We have all heard of cross border shopping. Indeed our aim is to help shoppers from all over the world with their overseas purchases and cross border shopping.
Shoppers can choose to buy products from shops all over the world, and find products and prices that might not be available in their own country. But what if that concept was adapted to the finance sector. A European cross-border credit marketplace, an online space for borrowing and lending money across borders.
One such marketplace, in fact, they claim to be the first, is called Crosslend.com. Their belief is that there is a mismatch in the supply and demand of the European credit markets, and Crosslend provides a place that allows lenders or investors who live in low interest rate countries to lend their money to borrowers from countries with higher interest rates. This means that the investors can get a higher rate of return and the borrowers can obtain credit at a lower rate then before.
Crosslend's clever platform uses algorithms to assess creditworthyness and they utilise a capital markets structure which means that all borrowers are rated according to their risk and scored from A, the lowest risk, to HR, the highest risk. The amount of interest paid on the money they borrow is calculated according to the risk. So lowest risk pays less than the highest risk.
The lenders can choose to borrow to any one in the marketplace they like, so can choose high risk, low risk or any combination of the two they like.
Crosslend is an example of what is called peer to peer lending, but where they differ from some other companies is that it allows people to borrow and lend cross border, at the moment in Europe.
This is all done in association with their partner bank, German bank biw AG, in which you will need an account to participate.