Pan European peer to peer lender EstateGuru has launched a secondary market for their loans, according to a note from the company. Investors may now buy and sell the securities online.
EstateGuru is a peer to peer market for short term, property-backed loans for SMEs. Based in Estonia, EstateGuru currently claims over 32,000 investors from 106 different countries.
EstateGuru said that by providing a path for liquidity for its investors it has reached the next crucial milestone in its technological development agenda, with a variety of features set to follow in the near future.
Mihkel Stamm, COO of EstateGuru, said that although all the loans are short-term in nature, with an average term of 10.4 months, providing an option to sell an investment is an important addition to the platform:
“Having a wider variety of loans on the platform makes it possible for new investors to build diversified investment portfolios right away. Since the aim of the secondary market is not to fulfill the role of a trading platform, but rather to offer an early exit opportunity to those who need the liquidity, a 2% service fee has been applied,“ said Stamm.
Stamm added that research conducted by EstateGurue showed that liquidity is one of the major motivators that would generate additional interest in investors.
To date, EstateGuru reports approximately €150 million in loans originated. The average loan is around €147,000 with a 12.04% historical rate of return. The current default rate is 3.7%. The majority of the loans are originated in Estonia.