Interview with Xavier Laoureux, director at Mozzeno, a peer to peer lending platform based in Belgium.
Can you introduce yourself and Mozzeno?
Mozzeno is a Belgian fintech founded in December 2015. We have just launched the first digital platform to enable private individuals to participate indirectly in the funding of loans to other private individuals. Loans are granted by Mozzeno, acting as a regulated lender. Mozzeno then finances or refinances these loans thanks to the issuance of Notes (financial instruments).
I hold a Master in Law. I have worked more than ten years in digital marketing strategy for agencies like TBWA.
What problem is Mozzeno solving?
Borrower side: credit access at a fair price caused by inelastic credit scoring, high structure costs and lower availability of capital to lend. Investor side: low return of savings and risk exposure to get higher yield
What is the scale of the problem?
Borrower side: today in Belgium, 50 000 loans – consumer credit only – are granted each month for a total of 650 million EUR.
Investor side: 250 billion € in Belgium are sleeping (interest rate of 0,11%) on saving accounts
How is Mozzeno solving it?
Starting from Belgium, our company develop a smart digital platform offering a new and competitive way for a borrower to borrow money and for investors to invest money.
Borrower side: new credit scoring model based on extra multiple data points enabling to take credit decision based on individuals and therefore access untapped pool of good profiles.
Investor side: fair return by accessing a new asset class in which they will invest in a transparent way.The process will be seamless and as automated as possible for both parties.
Can you describe Mozzeno in numbers?
It is quite difficult as we had just launched one month ago, but here are a few numbers
- 227 loan application
- 20 preapproved
- 8 financed
- 138 investors
- More than 100k funds on accounts
What are the fundamental differences between the Belgian credit market and the rest or Europe?
Peer to peer lending as such is not permitted in Belgium. It is the reason why we have developed an indirect model. There is no direct relation between borrowers and lenders. It is Mozzeno which analysis and grants the loan to the borrower. Then, the loan is securitized and Notes are offered for the subscription of our lenders. Interesting is that we have developed a framework which enables the lenders to choose loan by loan based on a long list of criteria. There is no pulling.
In such model, we have regulated lender to grant loans to individuals and the FSMA (Belgian market authority) has approved our base prospectus which enables us to issue Notes.
What is the structure of investments you offer?
The Notes are limited recourse unsecured obligations of Mozzeno governed by Belgian law.
Payments of interest and principal under the Notes are contingent on the receipt by Mozzeno of payments of interest and principal from the borrower under the relevant Series Specific Loan.
What is the difference between the individual loans and notes?
The underlying assets of the Notes are consumer loans (“crédit à la consommation”/”consumentenkrediet”) governed by Belgian law. The Loans are granted by Mozzeno acting as Lender which is licensed and supervised by the FSMA in accordance with Book VII of the Economic Law Code.
The loans are amortising loans (instalment loans) of duration between 12 and 60 months at the time of this Prospectus, granted to Belgian residents for private purposes. Each loan is falling into a specific risk class as defined by Mozzeno.
Are there any restrictions on who can invest in Mozzeno?
Any individual of at least 18 years old may invest. You need a euro zone bank account to become an investor.
What are the initial and recurring fees for the investors?
The only fee is a maximum of 1% subscription fee on the invested amount
What is the expected ROI?
Investors make their investment choices, loans differ in both risk and therefore reward. Individual investor returns will vary according to their risk choice. Each loan has specific attributes such as net income, housing status, professional status. The profile of the borrower determine the risk profile and thus the return to the investor.
How is the risk of default mitigated by Mozzeno?
Loan applicants are carefully screened and analysed for their credit worthiness. We verify whether the loan suits the borrower’s profile. To that end, we consult the database of the Office for Credits to Private Individuals, managed by the National Bank. Next to the data on all the loans in Belgium granted to private individuals, this database also contains an overview of all the loans that are currently in default or have been in the past.
The ‘PROTECT guarantee’ protects the investor’s capital in the range of 60% and 100% of the remaining loan balance and up to 3 unpaid instalments ni case of default.
Investor strategy is facilitated through an auto investor or manual investing options. These choices allow investors to select loans according to their risk profile.
What is the essential ingredient for co-founders to work productively together?
To be complementary, different; opened to each other
Is there any other key information you would like to add, which has not been covered by the above questions?
We are working on our next funding round which should take place in Q2 2017.
Our platform is self-developed. Designing and developing the Mozzeno platform was done with the long term in mind. The modularity and scalability of the platform allow us to expand into other markets of the peer to peer and sharing economy. The modularity will open synergies with other financial services operating in the same space, through either white labelling of the existing modules (eKYC, digital boarding, transaction orchestration, scoring…) or co-development of other system modules.
How can potential investors discover more about Mozzeno?
All the information is available on www.Mozzeno.com
We thank Xavier Laoureux for the interview.