Get email notifications on new posts:
If you wish to join any of the platforms discussed below, you are welcome to use my bonus sign-up links.
Table of Contents
- Fast Invest
- Distribution and profit
- Affiliate earnings – and giving back
- Going to France!
Despite the addition of 3(!) new originators, loan availability throughout the month remained much lower than usual, with max interest rates hovering around 10-11%.
Since we went through the same thing last year, I believe that the rates will rise again, so it’s unwise to lock away money in low-interest loans for the long term. I’ve mostly kept to short-term loans, as well as lower-risk loans from Capitalia (8% with a buyback guarantee from the European Investment Fund) and Everest Finance. I also withdrew around €7000.
My L.O. distribution was fucked up by these unusual investments, so I’ll have to redistribute my portfolio when interest rates recover. *sigh* Oh, Mintos.
|Loan Originator||Share in Mintos Portfolio|
Two more originators were introduced this month, one direct (Cube Funder) and the other financed through a deal partner (Finsputnik > Sauleskredits.lv). My share in Grupeer is already pretty high, but I’ve decided to deposit more to invest just in these new originators.
Sadly, I don’t know their exact risk level, as Grupeer is late in adding L.O. ratings and financials, as it promised to do by the end of Q3. Platform financials are also missing. Grupeer, Please don’t become another Fast Invest, promising transparency without keeping your word. No excuses, just do it.
On a happier note, Grupeer responded to my inquiry about their too-good-to-be-true loan performance, explaining that:
1. Loans issued to the originator itself by a deal partner (e.g. Finsputnik Platforma > PlanetaCash) are not tied to any specific end-borrower loan. They are more like corporate bonds. Only in the case of L.O. collapse will those loans stop repaying. Then the buyback guarantee from the deal partner should kick in, if the deal partner survives.
2. Loans issued to end-borrowers (e.g. by Monify or Cube Funder) undergo a second screening by Grupeer itself, so they are less likely to fail than loans by the same originators on other platforms. If that’s true, I find it pretty impressive.
My late loans were repaid this month, except for the Nord Company dredger loan, which was only partially repaid. I’ve decided I don’t trust the borrower’s financial capacity enough to keep the loan, and managed to sell it without loss of capital.
Six projects were published this month, most of them tiers of previous projects where I’m already invested. Overall a OK month, but I’m experiencing cash drag here as well.
Envestio has bounced back from the slump of the past few months, listing 7 new loans (3 tiers of a large new project, 3 tiers of old projects, and 1 independent real estate project), amounting to a record-breaking monthly available loan volume of over €4m. Here is a graphic I made for their upcoming TORCH report:
I remain weary about Envestio’s repeat borrowers, but so far they’ve been repaying like clockwork. I deposited a bit more into the platform to grab the new projects (some of which are still available).
Despite having published a somewhat negative report on Lenndy just last month, this month I’ve significantly increased my investment in them. Not to be called a hypocrite, I’ll explain my rationale:
First, Lenndy maintains 12-13% rates while Mintos rates have dropped, so the risk/reward balance has shifted. Second, they listed a bunch of low-risk invoice-factoring loans from originator SimpleFin, which I wasn’t really exposed to before. Since these are short-term loans, I can pull out in a month or two, shortening the exposure to originator and platform risk.
Third, Lenndy responded to the TORCH report, saying that many of the improvements I called for are already in development, and others are being considered. Talk is cheap, so we’ll have to wait and see, but it’s a good start.
Only one “skin in the game” project was listed this month, but it’s a nice one, with 15% interest. The other new projects were either too risky or not attractive enough to attract funding from the platform owners themselves. The overall number of new projects wasn’t high considering the number of loan originators, which again makes me doubt the smaller originators.
On the bright side: EVOEstate told me that 3 more originators are expected to join in coming weeks. In the more distant future, they plan to add unique opportunities for investing through private real estate funds (which normally have a very high barrier to entry).
A secondary market was launched this month, and when they finish tweaking it, I hope they move on to things I care more about, like statistics and L.O. financials. So although the platform seems a bit dormant, they are constantly progressing, and have big plans for the future.
When Mintos rates went down last year, I joined Fast Invest. Sadly, they still haven’t improved their transparency – and I won’t invest more until they do. It’s a shame, as those 13%-interest loans with buyback guarantee seem super attractive right now.
But… this month I noticed a surprising UI change. Fast Invest added a “loan type” filter which includes real estate loans. I asked them about this, as well as the lack of improvement in transparency, and received an interesting reply:
“We are indeed planning to add real estate loans to offer our investors more diversification opportunities. We understand your concern regarding the transparency, and we are working on improvements:
– Loan status is indeed missing, and we will add it, but until then you can check it from the investments tab according to the next repayment date. If this date is in the past, it means the loan is overdue.
– Statistics page is in development and should be available soon.
– With new loan originators we are not planning to have non-disclosure clause about their names and they should be disclosed when we onboard new ones – which is a lengthy process in our case since we have a very strict due diligence process.
– Since we are operating from a UK company, all financial statements are freely available from the UK company registry.”
That’s some good news! As for the UK company registry, all I found was uninteresting corporate updates, and an old minimalistic financial report from 2017, which barely provides any information about the platform’s status. The 2018 report should be published this month, and I hope it includes more info.
Distribution and profit
The low rates on Mintos are not yet reflected in this month’s earning: The blow will come in the next few months. With Envestio, you can see the negative effect of cash drag from previous months, but my long-term XIRR remains amazing: 19.65%.
Affiliate earnings – and giving back
This was another good month for commissions, with €517 from Mintos, €48 from Envestio, €47 from Grupeer and €30 from EvoEstate. These figures are included in the “Deposits” column. Thanks to all my supporters!
When I receive – I give back. This month I used Paysera’s Social Responsibility page to donate €15 to Tautmilės globa, a Lithuanian organisation which rescues homeless animals. Paysera participated in the donation, returning 1% cashback to my account.
Going to France!
I’ll be spending the month of October in Lyon, France, to try out life in Europe. Exciting and scary! Unfortunately, French people aren’t a major audience of my blog, but if you happen to pass by the area, give me a holler.
At least I’ll have a bit of a break from work, so I can finally finish Envestio’s TORCH report.