Esketit restructures after MFF’s departure from P2P lending

Esketit, a large and rapidly growing p2p platform, is restructuring now that Money for Finance (MFF), one of its largest loan originators, has announced that it will cease operations on all peer-to-peer platforms.

Existing loans from MFF will still be repaid until their maturity date, but no new loans from MFF will be added to Esketit’s website. As a result, Esketit no longer has any new loans from Georgia, the Philippines, and Jordan. The latter region in particular was an important part of Esketit, which had even focused an Auto-Invest strategy on it.

Reduction of diversification

MFF played an important role in Esketit’s early growth by providing short-term consumer loans that expanded the platform’s geographical reach, alongside AvaFin, Esketit’s founder. MFF’s departure reduces diversification and directly lowers the volume of loans available to investors.

Share of AvaFin increases

The change makes Esketit more dependent on AvaFin, formerly Creamfinance, which has credit operations in Europe and Latin America. This loan originator already made up the largest part of Esketit’s portfolio, and that share is now even larger.

New loan originator added recently

Esketit recently added MDI Finance, the parent company of the Sri Lankan brand Loanme.lk, as a new loan originator. This does provide additional diversification, but the scale is limited compared to the contribution made by MFF.

‘From a mixed portfolio of loan originators to a platform dominated by a single group’

This means that for now, the total loan offering for investors is shrinking. How quickly recovery is possible depends on the growth of AvaFin and MDI Finance. Esketit is shifting from a mixed portfolio of lenders to a platform dominated by a single group. However, AvaFin is a major player, and platforms such as PeerBerry and Bondora have already proven that a high concentration from a single player can also generate good volume.

Diversification between platforms can help

As a result, Esketit remains a platform that is also recommended by the editors of Investment Platforms Europe. However, we do see the disappearance of MFF as a concentration risk for investors, and we are keeping a close eye on the importance of diversification among originators. Diversification between other p2p platforms can help.