Polish social lending website Monetto sent an e-mail newsletter to its users on January 20th informing them that their website would cease operations after the end of February.
In the newsletter, Monetto urged that lenders update their loan contracts and change the name account number of the bank account they use to collect repayments. Monetto said that it will no longer serve as an intermediary for processing loan repayments and that borrowers should repay their funds to lenders’ accounts directly.
Monetto was an early entrant into Poland’s social lending industry. The company was backed by the IIF venture capital fund.
The company’s CEO, Lukasz Banach, was interviewed in September 2009 by Finnovation.pl. In his interview, he commented that higher loan amounts that Monetto offered compared to other Polish social lending sites might attract more fraudulent activity than what other sites had faced.
Banach commented to Finnovation.pl that, “In USA, UK (also Germany) there are central, accessible and trustworthy databases of credit history. As long as there is no such thing in Poland, I don’t believe that social lending will be successful here. When this barrier is removed, the percentage of bad debts on P2P markets will fall down significantly. ”
The company’s downward slope began at the end of 2008 when its venture capital firm decided to pull out of the project. Since January 2009, Monetto stopped accepting new loan listings. There were several issues with transferring payments to lenders and the company’s customer service quality declined dramatically.
Although not officially report, many believe the company’s investors attempted to sell the service, however no buyer was found.
(Sources: WiseClerk.com, Finnovation.pl)
