37519 - Kreditech

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Summary of Investment Information

Project Number

37519

Company Name

MONEDO HOLDING GMBH

Date SPI Disclosed

Dec 3, 2015

Country

World Region

Region

Global

Projected Board Date

Jan 4, 2016

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Nov 30, 2016

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Feb 5, 2016
Signed : Mar 7, 2016
Invested : Apr 12, 2016

Sector

Virtual lending, P2P, crowdfunding

Project Description

Kreditech (or the “Company”) is an online, technology-enabled consumer lending platform based in Hamburg, Germany. The Company uses predictive data analytics and a machine learning algorithm to assess the creditworthiness of consumers without an existing credit bureau score, in order to extend credit to those who do not have access to traditional financing options. Kreditech currently extends loans to consumers primarily in Poland, Spain, Czech Republic, Russia, and Mexico.

The Company is seeking to raise up to EUR 100 million of equity capital to fund operations and expansion into other emerging market countries. IFC is considering an investment of up to EUR 10 million in the Series C equity round.

Associated Advisory Engagement

Not Applicable

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	10.92

Development Impact

1. Access to credit to unbanked individuals: The investment in Kreditech will help provide financing to a demographic segment of mostly first time borrowers, from sub-prime to prime, with no existing scoring or selection/qualification. This is particularly important in Emerging Markets where the financial infrastructure not as developed.

2. Expansion of digital payments: Kreditech, through its non-lending products, will encourage electronic payments rather than use cash. This will help to develop local country payment infrastructure, empowering the e-commerce sector. Moreover, making payments electronically has been shown to generate efficiency and promote economic development.

1. IFC''s stamp of approval: An IFC investment will help Kreditech expand in Emerging countries; (i) It will provide comfort to the regulator as they examine the financial strength of non-bank financial institutions and their investors, and (ii) IFC will give the Company additional credibility with banks when they apply for local currency funding.

2. IFC Financial Institution building: IFC''s participation will result in the Company adhering to Responsible Lending practices and a strengthening of their corporate governance.

3. IFC long term partnership: Kreditech will benefit from a long term engagement with IFC, in particular to strengthen its capital base for continued loan origination growth, and grant the Company financial flexibility to expand in Emerging countries.

E&S Category Rationale / Risks and Mitigation

Contacts

For Inquiries About the Project, Contact

Kai Schmitz
Principal Investment Officer
International Finance Corporation
The World Bank Group
mailto:kschmitz@ifc.orghttp://www.ifc.org

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Local Access of Project Documentation

Kreditech
Ludwig-Erhard-Strasse1
20459
Hamburg
Germany
Attention: Mr. Rene Griemens CFO

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