Bondora's target borrowers are middle-income individuals who, because of regulatory or technical constraints, are underserved by traditional credit providers, and who are (i) receptive to online loans that would replace credit card borrowing, payday lending and short term loans as part of a personal finance solution, or (ii) unsatisfied with slow, branch-based loan origination processes.
More and more people are searching online for the best deal on products and services they need or want, which runs the gamut from clothing to insurance–and loans. Bondora offers a user-friendly application process conducted exclusively online, a fast underwriting process, and interest rates that are competitive in comparison to those of banks. However, even though Bondora competes with mainstream banks, it is important to note that borrowers who choose Bondora are not people who cannot obtain financing elsewhere. Bondora’s borrowers are not different than the banks’ customers.
Bondora markets itself to such borrowers through a combination of search engine marketing, television advertising, and email campaigns targeted at existing, former and prospective customers. The share of applications for each of these channels is 40% for cost per click (CPC) search engine advertising, 40% for TV and 20% for targeted email, respectively.
Bondora has invested substantial resources in brand recognition development and marketing automation tools that allow marketing to be scaled rapidly. Bondora has found through numerous tests that increasing marketing spending in targeted channels increases the volume of loan applications without altering the overall risk profile of the applicant pool. In other words, Bondora can increase origination volumes by a factor of three through increased marketing spending alone.