Since its registration in 2016, Penenza crowdlending platform has extended some RUR 17 billion ($300 mio) of loans to small and medium-sized businesses. That is an absolute record in Russia’s crowdlending market which only became possible due to issuing credits to participants of tenders at the OTC.ru e-marketplace.
Reinventing credit provision
Penenza crowdlending platform extends loans to small businesses, using funds of investors. It is owned by Financial Marketplace Operator where Dmitry Panguin holds 40% while Sergei Vasiliev and Dmitry Ponomaryov hold 30% each. According to Kontur.Focus service, the same individuals and in the same shares also own Instant Money Credit Center microlender.
In 2015 Penenza got investments from Russian Funds investment group whose major beneficiary is Sergei Vasiliev, the first investor of Rambler internet portal. In 2017 Penenza’s profit reached RUR 46 mio ($800K) with revenues at RUR 158 mio ($2,650K). The company employs 500 loan brokers.
“We are not a startup, but one of the top ten banks’ competitors. We merely are at the outset of our business life”, company CEO Dmitry Panguin says. “Bank lending is an absolute rubbish. So we decided to reinvent credit provision all anew. The matter is, banks do not extend loans to small businesses and set very low interest rates for depositors”.
Over 2017, Penenza granted in the aggregate RUR 9 billion of loans to small businesses. That is substantially higher that the results of its competitors such as Potok.Digital (you could find more information here – IF), StartTrack, Town Money, and Venture Club. Of RUR 1.15 billion which the company extended in December 2017, RUR 950 mio were loans to companies to secure their participation in tenders run by government-owned entities, while further RUR 200 mio were facilities that companies needed for honoring government contracts (i.e. a company has won a tender but lacks its own resources to proceed with the contract performance). Over the two months of the current year, the amount of issued loans reached RUR 859 mio ($15 mio). In total, over 18 months Penenza has extended 20K loans totaling RUR 17 billion.
Genesis
In 2010, Dmitry Panguin was one of the organizers of RTS Tender e-trade marketplace focused on participation in government procurement tenders at RTS (Russian Trade System) stock exchange. The marketplace was intended to support e-procurements by public sector entities (as per Federal Law No 44). When another Federal Law No 223 was enacted, state corporations were also obliged to make their purchases through open e-tenders. So RTS launched a new e-trade platform for that, ОТС (OTC.ru).
At first, OTC.ru was registered as an RTS Tender’s subsidiary, but in 2012 it became a separate company. Nowadays, the main shareholders of ОТС are Dmitry Panguin, Russian Funds, and Dmitry Ponomaryov. ОТС holds control over 40% of the state corporations procurements market. What made the expansion possible? In 2015 Panguin, Vasiliev and Ponomaryov registered their Financial Marketplace Operator which started issuing loans to tender participants. Those days, none of the competitors did that, even though by now RTS Tender has also adopted the practice.
“We grant financial facilities to participants of other e-marketplaces as well”, Dmitry Panguin says.
Many small businesses are unable to participate in tenders staged by public companies since they lack funds for making a deposit to secure their bid, which is usually 5% of the initial price of a contract.
Initially, Financial Marketplace Operator granted loans to such businesses out of its own resources, but then it started to attract funding from its partner companies. Eventually, Penenza B2B platform was set, for investor companies to extend credits to tender participants. Since last November, Penenza started attracting resources of its private partners at 20% per annum and thus became a proper crowdlending platform. Penenza’s revenue is about 1% of each deal.
At the moment, OTC.ru has got large customers such as Roscosmos State Space Corporation, UAC (United Aircraft Corporation), Rostelecom national telecommunications operator, Sukhoi aircraft manufacturer, Megafon mobile phone and telecom operator, Russian Railways, Tupolev aerospace and defence company, Moscow underground, Goznak printed security products manufacturer, Stroytransneftegaz oil and gas pipelines builder and operator, etc. OTC also has a developed nation-wide network of its branches. The platform intends to launch an e-shop or, to be exact, an e-marketplace for minor procurements.
Borrower gets no money
At Penenza platform, a borrower may be granted a loan ranging between RUR 3,000 ($52) and RUR 200 mio ($3.5 mio) for a term of 30 to 60 days with 3.5% of the facility amount charged for the first month and 20% per annum during the second month. To get a loan, one certainly has to submit some documents (including signed and sealed accounting reports of the company). A decision on credit granting is made within 24 hours after an online request submission.
An investor at the marketplace can expect a yield of 20% to 30% per annum, provided the funds are invested for at least two months. Besides, an investor is to pay the platform 0.1% of the loan amount (but not more than RUR 50K) for using Penenza service. In 2017, aggregate revenues of Penenza investors reached RUR 250 mio ($4.4 mio) with the investment portfolio at RUR 1.2 billion ($21 mio). There always remain some risks, but the marketplace representatives claim those are low with risks of arrears at 0.4% and risks of default at 0.2%.
To prevent a loan non-repayment, a tender participant would not even get the loan in his account since the money is transferred straight to the marketplace. Partner marketplaces then repay loans to Penenza.
Unlike most other crowdlending entities, Penenza does not lend to individuals since it is hard to assess their financial standing and to monitor their loan repayment. Investors of Penenza make their own choice of the borrowers. To secure their profits, they can lend to several tender participants at once, setting loan amounts at their discretion.
By Natalia Kuznetsova