March 9 (SeeNews) - The Bulgarian branch of Germany's Varengold Bank is in an advanced stage of negotiations for investments in peer-to-peer (P2P) lending platforms in two Southeast European countries outside Bulgaria, its general manager told SeeNews.
"P2P lending platforms are becoming more and more user-friendly and are constantly gaining the trust of borrowers and investors from CEE and SEE," Sergey Panteleev, general manager of Varengold Bank Sofia Branch, said, adding that the fintech sector in the region is developing quickly, thus providing opportunities for new projects.
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The Bulgarian branch of Varengold Bank was set up in 2018 with the aim of serving as a hub for the bank's regional expansion. Subsequently, the Bulgarian branch made its first investment providing a 1.5 million levs ($855,000/767,000 euro) equity and debt funding package to local P2P lending platform Klear in 2019.
Varengold Bank Sofia Branch now intends to provide a second debt financing package to Klear, amounting to 1 million levs.
"Klear is on its way from start-up to scale-up, and the partnership with Varengold Bank will help it expand its business across Bulgaria and SEE much faster," Panteleev commented.
Although equity investments are outside the main focus of Varengold Bank Sofia Branch, the lender does not hesitate to resort to them when they can increase efficiency and add value to the debt solutions it provides.
"We follow this approach as our goal is to become the bank for the marketplace lending industry and a preferred partner of fintechs," Panteleev said.
Recently, Germany's Varengold Bank raised its capital, aiming to strengthen its capital base. Part of the proceeds will be used to refinance credit platforms in the area of marketplace banking in Europe, including the company’s business in Southeast Europe, according to Panteleev.
Varengold Bank Sofia Branch considers as its core business areas in SEE marketplace banking - as many people and companies still have no access to capital and banking services - and commercial banking.
"We consider it our fundamental job as a bank to help change that. We believe the best way to do so is by supporting P2P online credit platforms in growing their businesses," Panteleev said.
"Sofia is one of the most vibrant fintech cities in SEE and it attracts many fintech ventures, especially young companies in their starting stage from both local and international markets with developer teams," Panteleev opined.