This speaks in favour of investing in the Swiss credit market

There are profitable opportunities for investors to invest their capital on the Swiss credit market. Crowdlending is becoming increasingly popular as it is a simple solution with good returns.

Swiss loans as an investment idea

According to a study by the Lucerne University of Applied Sciences and Arts, the Swiss credit market is growing. Alternative forms of financing such as crowdlending are playing an ever-increasing role in this. Here, private and institutional investors directly provide capital for loans from companies and private individuals, without banks acting as intermediaries.

Advantages of crowdlending for investors

1. attractive returns: Crowdlending enables investors to achieve good returns – especially compared to interest rates on traditional investments such as fixed-term deposit accounts and government bonds. Another study by Lucerne University of Applied Sciences and Arts on the topic of ‘Risk and return in the crowdlending segment: are investments in the crowdlending market worthwhile?’ shows that investments in the crowdlending market are profitable, despite a brief increase in payment defaults during the pandemic. At LEND, payment behaviour remained at the usual high level during the coronavirus years. In addition, returns are stable and therefore easy to calculate.

2. easy access and transparency: Crowdlending platforms enable investors to invest in the credit market easily and from comparatively small sums. With LEND, for example, investments are possible from as little as CHF 500.

   Investors can decide for themselves which loan projects they want to invest in. This allows them to adjust the risk and return to their own objectives.

   Crowdlending platforms also offer a high level of transparency, as investors receive detailed information about the borrowers and projects. This enables informed decision-making when selecting investments.

3. diversification of the portfolio: Investing in crowdlending projects enables investors to diversify their portfolio in two ways. By not focussing the portfolio exclusively on one asset class, volatility is reduced.

   Fluctuations in returns can also be achieved through a broad diversification of several crowdlending investments across different borrowers and sectors. With our Roboinvest, it has never been easier to build a diversified loan portfolio.

4. support for SMEs and private individuals: Instead of having to borrow money from the bank at unfavourable conditions, borrowers can finance their projects much easier via crowdlending – whether business loans, personal loans or mortgages.

   Crowdlending investors support borrowers by making lending possible in the first place with their financial investments. Not only the borrowers benefit from this. Investors honour a stable return, which marketplace lending providers such as LEND ensure with their borrower selection, known as underwriting.

5. low debtor ratio in Switzerland: According to CRIF, only a few people are over-indebted. Every year, the CRIF debtor ratio is calculated for all private individuals in Switzerland. In 2024, this figure was 5.6 % and has therefore improved in all cantons. This means that the absolute majority of borrowers repay the loans they have taken out.

Risk

One might assume that crowdlending loans are mainly taken out by people or companies whose solvency is too poor to get a good interest rate from banks. However, marketplace lenders assess creditworthiness in the same way as banks. In some cases, it is even stricter because the platforms also have investors in mind and the security of the portfolio is all the more important here.

Similar to online trading, crowdlending scores with cost reduction and can therefore offer good conditions. If you have a look at the credit scores of investment projects on LEND, you will see that borrowers with a good credit rating in particular can take full advantage of the benefits of crowdlending. This keeps the default risk low and the effective returns remain stable.

Conclusion

Crowdlending is an attractive alternative to traditional forms of investment. By investing in crowdlending projects, investors benefit from stable returns, diversification, easier access and transparency, while supporting Swiss SMEs and private individuals.

The aforementioned studies emphasize the potential of crowdlending as a rewarding and diversifying investment opportunity in today's world.

To invest in the Swiss lending market via crowdlending, investors should choose a reputable and established platform that offers both the necessary experience and the required security standards. LEND has been active in the crowdlending segment since 2016 and has seen constant growth since then – our figures speak for themselves.

A Swiss bank account is required to become an investor.