Loan Platform Roundup – August 2019
Back to the extended format of the monthly roundups. Here are my latest insights.
Table of contents
- Fast Invest
- Distribution and profit
- Affiliate earnings (and giving back!)
I never liked summer. It’s hot and crowded, business slows down, government branches slack even more than usual – and it seems that people take fewer loans, as well.
The supply of loans on Mintos plummeted this month, dragging down interest rates as the supply came down closer to investor demand. The same thing happened last August, and was exacerbated when Mogo repurchased many of their loans after securing cheaper funding through a bond. Back then, interest rates dropped to around 9%.
This year it was IuteCredit to issue a bond and repurchase part of its loans. The impact was not as severe, as their presence on Mintos is less pronounced, and there are more originators who still offer around 275k loans (Update 3/9/19: now 149k loans. Dramatic change!). Still, interest rates for Euro loans went down from around 15% to around 12.5% at maximum.
The previous rates were excessive and unsustainable, so I won’t complain about the decrease. However, these sharp fluctuations are annoying, and force investors to constantly reallocate their portfolios. Still, looking at this month’s returns, I can’t complain.
My distribution among Mintos loan originators:
|Loan Originator||Share in Mintos Portfolio|
Amazingly (and somewhat suspiciously), I maintain 100% current loans on Grupeer, with payments coming in like clockwork.
Plenty of loans are available, with interest rates ranging from 10% to 13.5%. Two new real estate projects were listed this month, and rewarded me with a nice cashback bonus for early investments.
Other than that, not much new. I think Grupeer is very focused on completing its upcoming interface and transparency improvements, which I highly anticipate.
Business as usual. One of my 2 late loans was repaid, and the borrower (Baltic Forest) seems to be on top of things. The other (H.M. Seafood) I sold away, which turns out to be easy on Crowdestate.
I received a few large repayments this month, causing the monthly return to sky-rocket. My XIRR since joining the platform is still rather low: 9.84%, but expected to go around 13% when more loans are repaid. Very, very happy with this platform.
Three projects were listed this month: one new, the others tiers of old projects.
Given their perfect track record and high returns, we can’t be too angry at Envestio for their pickiness when it comes to new projects. Still, I don’t like watching a large chunk of my deposited money sitting and waiting for new loans. Eventually I’ll have to withdraw another part of it.
A few more of my late loans were repaid this month, bringing the overall XIRR to 10.4%.
Lenndy responded to my TORCH report, saying that many of the suggested improvements are already in development. I updated a few points in the report, and await their approval to publish the full response. I’ve decided to reinvest some of the money withdrawn in August, but I still need to see Lenndy’s annual statement to gauge the platform’s stability.
The number of originators has gone up from 13 to 15, but project supply has decreased in the second part of August due to the summer slowdown. I’m hoping to see things pick up again in September. Meanwhile, the EvoEstate team is hard at work on adding a secondary market and a slew of other features.
Here is one of my latest investments. I’m actually surprised that this attractive project hasn’t reached full funding yet:
I joined FI last August, exactly one year ago. It was a small platform, severely lacking in transparency and functionality, but with aspirations as high as the sky. They were planning to raise money through an ICO, integrate the loan platform with a crypto conversion service, and turn it into an online investment bank.
All of these aspirations seem to have been abandoned over the past year. The only expectation I had left was for them to increase transparency, so I can better evaluate the risk and increase my investment. Fast Invest has failed to do even that, despite launching a whole new interface.
Well, time’s up. Some of the bonus I earned when joining the website was finally unfrozen after being locked for a year (another dirty trick). Since I no longer needed to keep my money on the platform to get the bonus, I withdrew over half of my balance. It’s a shame, but I don’t feel I can trust an opaque platform.
Distribution and profit
This month’s phenomenal returns were driven by anecdotal events: late loans being repaid on Lenndy and Crowdestate, the one-time bonus from Fast Invest, a cashback from Grupeer, and ultra-high-interest loans on Mintos, bought in June and July and repaid in August.
I did manage to increase my portfolio size this month, which is expected to increase my future returns and bring me one step closer to financial independence.
This month’s affiliate earnings were high enough to justify their own section in the post: €500 from Mintos, €45 from EvoEstate, €20 from Envestio and €7 from Grupeer. Thank you guys! The commissions are included in the “Deposits” column of the table above, so as not to be calculated as profits.
The extra income made me feel like giving something back. I discovered Paysera’s Social Responsibility page, where they list non-profits that accept donations using this payment system. I donated €20 to “Maisto bankas”, a charity that collects food and distributes it to people in need. Paysera participated in the donation, returning 1% cashback to my account.
I really like this method of donating, and think I’ll repeat it whenever I get a significant affiliate commission, picking a different organisation each time.
That’s it. I have a few more articles in progress, with not enough time… But you can help me pick a platform for the next TORCH report! Trying to decide between Fast Invest and Envestio – you can vote in the comments.