2014 Lender Lists:

Is Kreditech Destined for Greatness?

Kreditech is an innovative tech company based in Hamburg (Germany) that is growing rapidly across the global stage. Despite only being forming in 2012 they are already lending in 6 countries and there is another 6 on the way soon. They mostly trade as Kredito24 with the exception being that they use the K24 name in Australia and also Zaimo in Russia. Kreditech that was created by Sebastian Diemer now has 120 staff. I am sure that we will be discussing them much more over the coming months, especially since they are shortly arriving in the UK. The core product here is a sophisticated credit scoring system (similar to Wonga).

There is a difference here though in that they use online data for fraud detection, identification, scoring and so on. Other than lending directly, they allow others to use their technology at a cost. They are well funded and are now ready to make their mark. Their algorithm works through 10,000 dynamic data points allowing them to provide banking products to customers in emerging markets, where banks lack historical credit bureau info. As I’m aware, they may even completely cut out the usage of CRAs as they can gather enough information themselves. For this they analyse your online shopping habits, your social network profiles and even your grammar.

One such known technique is to scan through your Facebook list. If they see anyone on there that has borrowed from them then they will analyse the activity of this friend to see how well they managed their account. There are of course other companies doing this such as Lenddo and it wouldn’t surprise me if Wonga themselves do this. What is interesting is that Kreditech are growing much more quickly than Wonga. They started out in Poland in August 2012 and quickly spread to Australia, Czech Republic, Mexico, Russia and Spain. They are launching at the moment in Brazil, Dominican Republic, Peru, Philippines, Slovakia and the UK.

They are ambitious and carry the mantra of becoming “The Amazon of Consumer Finance”. Global payday loans may well be on the horizon in the years to come and I can see this company leading the way. Of course, expansion is good, but the product itself has to be crafted to a high standard. So far, they appear to be delivering the goods in this regard in the manner of their instant funding, their current 0% loan deals etc. If they wish to become a mega brand alike Amazon, they will have to fight off fierce competition from the likes of Vivus and Wonga who carry similar global ambitions.