German auxmoney partners with BNP Paribas to buy loans online

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LONDON, Nov. 10 (Reuters) – Auxmoney and BNP Paribas announced on Tuesday that the German fintech would use the French bank’s funding to start buying loans on its own platform.

Düsseldorf-based Auxmoney, which operates an online marketplace connecting individual borrowers in Germany with private investors and institutions, plans to invest up to € 500 million ($ 595 million) in loans issued on its platform.

Auxmoney has not disclosed how much of the total funding will be provided by BNP Paribas.

“We will be investing alongside our private and institutional investors in our market,” auxmoney Managing Director and Co-Founder Raffael Johnen said in an interview.

“It’s about aligning interests,” he added.

Auxmoney’s move comes as many online lenders struggled during the coronavirus crisis, which hit economies around the world and made consumer loans riskier.

Many lenders have tightened their credit requirements, resulting in lower volumes and origination costs, while others have faced declining demand for loans.

Johnen said investor interest in auxmoney lending has remained strong during the crisis, but he expects origination volumes to be lower than expected before the pandemic as auxmoney passed requirements to more stringent loan.

In September, auxmoney raised 150 million euros as part of a funding round led by Centerbridge Partners. Other funders include Index Ventures and Union Square Ventures.

Auxmoney said that last year, 700 million euros in loans were funded on its platform. ($ 1 = 0.8405 euros) (Reporting by Anna Irrera; Editing by Alexander Smith)

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