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Loan Platform Roundup: Dec. 2019
02/01/2020
Loan Platform Roundup: Dec. 2019
Interests on Mintos are picking up, but what about the troubled originators? And some other thoughts...

If you decide to join any of the platforms discussed below, you are welcome to use my bonus links.

Table of Contents


Distribution and profit

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Mintos

Troubled originators and low interest rates have driven investors to withdraw money from Mintos over the past few months. As a result, the funded loan volume in December was lower than in the two previous months, marking one of the longest slumps in the otherwise-impressive Mintos growth curve:

Click to enlarge on mobile

Around Christmas loan supply finally caught up with demand, pushing the interest rates back up to more familiar levels. Sadly, this change is mostly observed in loans from high-risk originators.

Speaking of which: I’ve created a spreadsheet for tracking recoveries from troubled originators. Some are progressing nicely, others – not at all.

I am becoming increasingly concerned about regulatory restrictions on high-interest lending. The license revocations in Kosovo, while extreme, reflect a common sentiment among world governments going against high-interest lending.

I would like to see more originators like Mikro Kapital, Akulaku and ID Finance, offering sustainable rates in the realm of 15-30%, as opposed to more tiny payday lenders like Creditter and Ukrpozyka. And I would like to see these lower-risk loans offered at competitive rates to investors: There is no justification for originators to charge 50% margin on loans with 20% borrower APR.

Finally, it’s interesting to see the consolidation of several small originators into two large groups: Sun Finance and Finko. This change increases clarity regarding the relations between the different originators, but I feel that originators listed under the same name should always offer a group guarantee.


Grupeer

Two new originators have joined this month, but both are under the Finsputnik umbrella, so they don’t really improve diversification.

Grupeer’s founder, Alla Kisika, sent an interesting New Year’s letter to investors. Besides presenting Grupeer’s impressive growth throughout 2019 (x3 monthly volume, x5 investors), she also admitted that they have faced challenges, and still need to improve. I really appreciate this kind of honesty, which only increases my trust in this platform.

Once Grupeer catches up in terms of functionality and transparency, they can go back to focusing on profitability and expanding their offerings. I feel that this will be a good year for Grupeer.


Envestio

In case you haven’t heard, Envestio went through a change of ownership and management this month. I like the fact that the entire old team stays on board, and that the new owner and managers plan to take the platform to the next level – as I had been wishing for a long time.

Unfortunately, some shady details were quickly uncovered about the new COO. I contacted Envestio and receive a mostly-reassuring response, but remain somewhat apprehensive. Little is known about the new owner, and it remains to be seen how Envestio develops from here.

Three unique projects were listed this month, all seemingly legitimate – so far so good.


Crowdestate

8 projects were listed this month, mostly tiers of old projects, but some new ones as well.

I sense that investors are more cautious about investing in CE in light of the few problematic projects we have seen recently. Out of curiosity, I went over the Updates section of some of the oldest late and default projects on the platform. I was impressed with Crowdestate’s dedication and professional efforts in resolving these cases, often successfully, some still in process with a positive outlook. Defaults do not necessarily mean loss of funds!


PeerBerry

I had a fun online interaction with PeerBerry’s Head of Marketing and Communications Rita Simanavičiūtė, who asked for my professional input on a video they are preparing for investors. I appreciate this kind of community outreach, and believe Rita’s promises that the team is hard at work on improving the platform.

This month I increased my portfolio size to about 10k, and will soon be eligible for the Loyalty Club. I currently have around 15% late loans, which is a bit better than on Mintos and Lenndy. Let’s hope that this ratio doesn’t change as my loans run older.

One thing I don’t understand about PeerBerry: If Aventus provides group guarantee for most of its small subsidiaries, what incentive do I have to invest in lower-interest loans from the larger subsidiaries? What am I missing?


Lenndy

The funny thing about Lenndy is that when late loans are finally repaid, the monthly return is suddenly astronomical. My all-time XIRR remains slightly lower than the average interest rate, but the difference is becoming acceptable: 11.68% instead of the expected 12%.

I am more concerned about the fact that absolutely nothing seems to have changed ever since I joined Lenndy. No new originators, no new functionalities, not even small bug fixes. The platform seems totally dormant, which is a dangerous state in such a competitive market. I will say it again: I wish Lenndy, with its 3 originators, merged into another platform like PB or Grupeer.


EVOEstate

A very important originator, EstateGuru, was supposed to join EVOEstate, but for some reason their first posting was removed shortly after listing. I don’t like this kind of thing, but I’m guessing that the miscommunication wasn’t EVOEstate’s fault.

As compensation, another well-established originator joined this month: Rendity, which operates in Austria and Germany. Several of their projects are already listed, and I hope that this valuable partner stays on board for the long run.

It frustrates me that some of the best projects on EVO are below my return threshold for investments in foreign currency. I wish there were a similar platform in Israel where I could invest in rentals yielding 6-7%.

All praise aside, it’s time EVO added the missing interface feature: loan status, full repayment schedule for each loan, list of expected payments for the entire portfolio, etc.


Fast Invest

Fast Invest’s Christmas greeting, which included photos of the entire large team, has reinforced my trust that this platform is legit. It’s sad that I still needed this reassurance after more than a year on the platform, during which there was not enough progress towards transparency.

I withdrew about 15% of my portfolio because Fast Invest failed to provide adequate response to my email about their change of bank details and the legal entity to which the account is registered. I’m still contemplating whether to reinvest or withdraw repayments.


Tarya

I haven’t been keeping track on the interest rates charged to borrowers, but feel like they have gone down a bit over the past 2 years, reducing my return. It’s amazing how much money one needs to invest to achieve any significant income with around 4% net return. Still, I like the stability and low-maintenance of this investment, and made another small deposit this month.


BTB

It took close to two months to distribute my initial deposit of 50k ILS (12.9k EUR) into loans, and even now a small amount remains uninvested. This cash drag is the cause for my low monthly return, but it should change now that almost all of the money is invested. I am much more concerned about BTB’s low loan volume, which may or may not be sustainable. Better transparency about platforms’ loan volume, growth and profitability is crucial in the Israeli P2P/B sphere.


Affiliate earnings

€29 from Lenndy, €27 from Envestio, €20 from Mintos, €15 from EVOEstate. Thanks to my supporters!


When I get the 2019 Q4 report from my hedge fund in about two weeks, I will publish a more personal full-year summary with notes on my path to financial freedom. Until then, farewell.

This post is not meant as investment counselling. I am just a fellow investor sharing his thoughts and personal experiences.

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