Negative public perception

There has in recent years been an increase in negative media coverage of the kind of consumer loans that Bondora offers. Certain consumer advocacy groups, as well as politicians and government officials in the various jurisdictions where Bondora Group operates, have advocated governmental action designed to limit certain types of lending or place severe restrictions on the activities of consumer lenders. More widespread acceptance of negative views toward certain loan categories and lending practices could have adverse consequences for Bondora Group’s business. More restrictive or unfavorable legislative or regulatory changes may have a material adverse effect on Bondora Group’s business, financial condition, operational results or prospects, or cash flow. Bondora Group may also be affected by changing perspectives about the lending sector in general.

Moreover, Bondora Group’s ability to attract and retain customers is dependent upon the success of its marketing campaigns and reputation, which rests on perceptions of its customer service, integrity, business practices, other subjective qualities, and its financial condition. Restrictions on Bondora Group’s ability to advertise its products, or negative perceptions or publicity regarding consumer lending in general, could erode trust and confidence and damage Bondora Group’s reputation among existing and potential customers. Such a development could (i) make it difficult for Bondora Group to maintain or expand its customer base or (ii) reduce demand for its products and services, which may have a material adverse effect on its business, financial condition, operational results or prospects, or cash flow.

Much of the antipathy toward consumer lending is centered on payday lending, a segment where Bondora Group does not operate. Bondora is a regulated consumer lender in all of the markets it operates in; it has sought to mitigate the perception risk related to its business by avoiding pay day and other unregulated lending activities.

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