In recent years, the number of private loans in Sweden has increased significantly. At the same time, figures show that one in five Swedes are open to switching banks – a development that has led to the full-blown loan brokerage market.
According to a report from SvD from 2017, the largest loan intermediaries in Sweden grew by around 45% between 2015 and 2016. In 2017, Goodlend, one of Sweden’s largest loan intermediaries, generated sales of USD 495 million with a profit of USD 228 million .
We work differently, we have no customer search operations, the customer must always take the first step and contact us, says Goodlend’s CEO Janna Neiselmark in an interview.
At the same time, there are lots of comparison sites for loans, such as Gocool Credit, where private customers can compare loans and interest rates and see which banks offer loans without income directly on the website.
However, the large selection of loan intermediaries has led to a tight sealing of competition among the various players. As early as 2015, the Breakit news site reported that the industry appears to be saturated.
The article mentions the loan broker Advicelend as an example. The company had good growth and made profits in 2012 and 2013, but then stopped and showed red numbers in 2014 and 2015, which led to the forced dismissal of 40 employees.
However, the company managed to reverse the trend and has seen growth in both 2016 and 2017. In 2016, a profit of just over 6 million was made and in 2017 there was a slight loss.
Several players have joined the market and many are working with telephone sales. However, we see that more customers want to be contacted online which is why we chose to invest more on this channel and at the same time reduce our telephone sales, said Advicelend’s former acting CEO Richard Nick in the interview.
But despite the tough competition, many of the loan intermediaries continue to show strong growth.
More banks open for mortgage-loan cooperation
The intermediaries cooperate partly with larger banks such as MoneyAxis Bank, Righteous Us Bank, but also smaller lenders such as Money Quest, CreditHighway and Serratum. In the past, the focus has generally been on private loans, car loans and unsecured loans – so-called blank loans.
Mortgages generally account for a relatively small portion of the loan intermediaries’ turnover, despite the fact that mortgages account for almost 80% of all loans in Sweden.
We currently have mortgage requests of about USD 3 billion a month, a figure that is also growing, which also means that from now on we are making a profit. In addition to customer inflows, we generally see a trend in mortgage lending where new loan alternatives mean that banks are opening up for new partnerships, which means that our business is growing further, says Holgersson in a press release.