Minister of Jobs, Enterprise and Innovation Mary Mitchell O’Connor TD, today welcomed the announcement from Wicklow based Initiative Ireland that it will create 25 new jobs in the coming years. The news comes as the company prepares to raise €2m in investment, under the Employment and Investment Incentive Scheme, supporting the launch of their new Personal Lending Platform across Ireland. Scheduled for launch in 2017, Initiative Ireland will connect everyday people, empowering them to borrow and lend money direct to each other, at a fair, risk-based price.  

Initiative Ireland plans to achieve the creation of 25 new jobs over the next 3 years. These roles will include a mixture of experienced specialist roles and some graduate opportunities, supporting the company’s Irish and European sales targets, as they seek to transform Personal Lending through their innovative lending platform.

Initiative Ireland

Once launched, the Initiative Ireland platform will enable everyday consumers to borrow and lend money to each other using its online lending platform. Initiative Ireland will perform credit assessments, apply credit scores to applications and facilitate the funding of each loan by multiple lenders, managing all approved loans thereafter.  Using risk-based pricing models, Initiative Ireland will offer favorable pricing to approved borrowers, with the best rates offered to those applicants who secure the best credit-scores. In this way, the platform has been designed to attract and approve high quality loans on behalf of its personal lenders, balancing risks with rewards.

Mary Mitchell O’Connor TD said, “Supporting innovative High Potential startups is a key part of the Government Action Plan for Jobs.  Initiative Ireland are working to bring impactful innovations to the market at home and abroad. I welcome Initiative Ireland’s peer-to-peer lending platform which will create 25 jobs and I wish the team the very best for a successful future.

Founded in 2015, Initiative Ireland has already been recognized by Enterprise Ireland, as a High Potential Start Up, receiving support from the State Agency. In Sept 2016, the company was also recognized by the MetLife Foundation at this year’s Inclusion Plus Awards, for their innovative lending model, which promotes financial inclusion for lenders and borrowers alike. The company is currently working to secure regulatory approval, aiming to launch Ireland’s first regulated Peer-to-Peer Lending Platform by May 2017.

Padraig W Rushe, CEO  of Initiative Ireland said, “At Initiative Ireland, we‘re excited about creating a consumer finance industry that is honest, fair and inclusive. That’s why we’re combining business and technology innovations which have worked well in other markets, to create something sustainable and tailored to the Irish Market. We believe we can make a positive difference to people’s lives, by giving them better options when it comes to borrowing money or putting their own money to work. It’s with thanks to Enterprise Ireland and schemes like the Employment Investment Incentive Scheme that companies like us are able to compete and deliver innovations to the market.”

Peer-to-Peer Lending

Since the first UK P2P Lender was established in 2005, Peer-to-Peer (P2P) Lending companies have been transforming how people borrow and lend money globally. Last year Peer-to-Peer or Marketplace lending accounted for over €3 Billion in UK lending according to a Cambridge University study and €26 Billion Globally. Despite the success of the model in the UK and USA, the Irish Personal Lending Market has yet to benefit from this innovative model.a way to ‘put their money to work’ by lending their funds to multiple borrowers as part of a personal lending syndicate. The company aims to offer lenders indicative returns between 5% – 7% per annum. This compares favorably to the low current average return being earned on approximately €95bn in Household Deposits, which was 0.18% per annum as of March 2016, according to ECB figures. Although lenders will be taking credit risks by lending their money through the platform, these risks are carefully managed by Initiative Ireland who perform credit assessments to approve loans and spread the lenders funds across multiple loans to minimize their exposure to any one lender. Furthermore, the company will also be launching a Safeguard Trust, which is designed to offer a limited guarantee to lenders, compensating them for amounts lost on any of their loans.  

For Personal Borrowers, the platform aims to offer the lowest fixed rate personal loans in the market, within indicative saving of 20% – 30% on the cost of loans. Unlike many traditional lenders, the platform is designed to offer risk-based pricing, a common model in the US and UK which provides lower cost loans to individuals with the best credit histories and scores, pricing loans affordably and fairly, based on the customer’s risk assessment. With an estimated annual Personal Lending Market of €4bn, the company aims to gain market share as a price leader, appealing to low-risk borrowers with fair, risk-based prices.

Employment and Investment Incentive Scheme

Having secured outline approval from the Revenue Commission, the company is currently looking to raise €2m in equity investment in Ireland. Under the terms of the scheme, eligible investors will be able to earn up to 40% in Income Tax-Relief on investments in the company of up to €150,000, in addition to any equity investment growth. These funds will be used by the company to support their 2017 commercial launch in Ireland, ahead of their UK expansion.  For more information on the company or their upcoming EIIS issuance, visit www.InitiativeIreland.com/eiis2016 , or follow on twitter @InitiativeIrl