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What is skin in the game?

Skin in the game is a concept used by various investment platforms where a loan originator needs to hold an equity stake in its loans. When skin in the game is used loan originators that place loans on Debitum are required to keep a certain percentage of each loan. For example, if a loan originator has agreed on a 5% skin in the game, the originator would need to hold a € 50 stake in a € 1000 loan. This prevents loan originators from offering excessive amount of loans. Moreover, this allows to align investors' and loan originators' interests.

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* Weighted average interest rate for all historic loans and ABS. Your earnings may be higher or lower than expected. Investing puts your capital at risk. Any indicated historic return does not guarantee the same future performance.