Smava has joined forces with eBay’s car portal in Germany, mobile.de, to make loans transparent, fair and affordable.

Launched in 2007, the loans portal powers financing for the site, with car loans now one of the leading reasons to take a loan in Germany, says Smava founder & CEO Alexander Artopé.

“We looked for a very strong partner in order to make this market segment more transparent,” he told BusinessCloud.

“Mobile.de is the largest car platform in Germany with more than 1.4 million car offerings online.”

Earlier this year Smava narrowly missed out on winning the 2018 GP Bullhound Summit Superstar Award. The investment bank's annual three-day summit in Marbella eventually chose Chinese facial recognition technology developer SenseTime for the award.

Under the terms of the new partnership, consumers can look for a new car on mobile.de and simultaneously apply for a loan - if they pay the car dealer in cash, they can often also negotiate an extra discount at the car dealership.

German-headquartered Smava – which stands for ‘smart value’ – is establishing itself as a pioneer in the FinTech space, launching the first fully automated digital loan in 2016.

The company says its customers are saving on average 2,000 Euro in comparison to loans from branches.

Before the movement to digital loans, consumers had to print out the loan contract and head to the post office to process their identification.

From the application to the actual pay out this process could take up to 10 days. The company's fully digital loan product Kredit2Day has reduced that time to 10 minutes.

"Banks traditionally have an important information advantage over the consumer,” said Artopé.

"They know everything about consumers and the market. Consumers don't have this knowledge. That's why it is very hard to find the best loan - offline as well as online."

Artopé also points out that banks typically have standardised criteria for the acceptance of a borrower.

"This leaves out certain groups like freelancers, people with a limited working contract or retired persons," he said.

"This means they often have trouble getting a loan from a bank. We believe this is unfair. That's why we started the first P2P marketplace for lending in Germany and made it possible to get a loan without any banks involved."

The company recently raised $65 million, taking total funding to $135 million, and employs over 450 people from over 40 nationalities in Berlin and Hamburg.

It saw over 1 billion Euro transacted through its platform last year, with over double that expected for 2018.

"The average interest rate for personal loans in Germany has been 5.64 per cent in the first quarter of 2018,” said Artopé.

"Online loans are at an average interest rate of 3.79 per cent. This means the average personal loan in Germany is online 33 per cent cheaper than offline.

"If all Germans would take their loan with Smava they would save 2.4 billion a year."