FRANKFURT, June 21 (Reuters) - Germany’s Commerzbank has launched a peer-to-peer lending platform to match small businesses seeking funding with institutional clients wanting improved investment returns.
The service will enable small businesses to borrow as much as 10 million euros ($11.3 million) with maturities of up to five years, Germany’s second-biggest lender said on Tuesday.
Rather than risk losing customers for this sort of funding to competitors in the emerging financial technology sector, Commerzbank has become the first major bank in Germany to offer such a service.
Commerzbank manager Michael Kotzbauer said he did not believe the “Main Funders” platform would erode the bank’s own lending business.
Commerzbank, which knows the customers on both sides, provides technical backup and ensures fair prices in a system approved by supervisors. It earns a commission for arranging the deal.
Such commissions help Commerzbank lessen its dependence on revenue from interest income, something banking supervisors have been pushing banks to do, given negative interest rates.
Peer-to-peer lending also avoids the problem banks face with having to back loans on their balance sheets with equity capital. ($1 = 0.8866 euros) ($1 = 0.8883 euros) (Reporting by Andreas Kroener and Jonathan Gould; Editing by Keith Weir)