My p2p lending portfolio – May update
It’s the fifth month I’m keeping a detailed track of my p2p lending portfolio. What I can say is that I start getting good at Excel, a skill I didn’t really want.
The main things that happened since last month with my p2p lending portfolio:
- I’ve added 800 EUR more into my portfolio
- This month’s earnings reached 196 EUR
- I sold most of my low-interest loans on Mintos and bought new ones with higher interest rates
- I’m trying out 5 new p2p lending platforms
Portfolio overview and month to month performance
My portfolio generated this month 196 EUR in earnings. It’s not even half of the minimum wage in Romania (450 EUR) so I can’t yet live off this income. My all-time earnings from peer to peer lending reached 1030 EUR this month. That’s one small achievement to celebrate.
This is how my portfolio evolved from the beginning of the year.
It’s value increased from 16872 EUR at the end of January to 18499 EUR at the end of May. Around half of the value increase (756 EUR) came from p2p earnings, while the other from new deposits.
New platforms in my portfolio
My plan a few months ago was to stop adding new capital in p2p lending for a while. But in some cases, the curiosity got the better of me while in others some opportunities are too good to pass. So I keep adding from time to time small amounts to different platforms and test them out.
Last month I’ve started testing out Robocash, doFinance, Swaper, Assetz Capital and Debitum Network.
This month I’ve added funds in 5 new platforms: Bondster, Via Invest, Flender, Kuetzal and TFG Crowd.
My full list of platforms
|Platform||Invested capital||Current value||Profit||Interest Rate/Annual return||Started Investing|
|Fast Invest||4010||4345 (+50)||335 (+50)||13.78% / ??||August 2018|
|Mintos||3494||3834 (+23)||335 (+23)||10.74% / 13.64%||June 2018|
|Viventor||1003||1025 (+7)||22 (+7)||13% / 14.35%||December 2018|
|NEO Finance||962||887 (+7)||-73 (+7)||17.28% / 11.79%||November 2018|
|PeerBerry||670 (-305)||793 (-291)||124 (+14)||12.21% / 11.95%||December 2018|
|EstateGuru||1242 (-17)||1317 (-8)||75 (+9)||10.97% / 11.07%||August 2018|
|Grupeer||980||1056 (+46)||76 (+46)||13.73% / ??||December 2018|
|Crowdestate||986 (-7)||1003 (-1)||17 (+6)||12.7% / 12.81||December 2018|
|Envestio||875 (-15)||956 (+1)||81 (+16)||18.26% / ??||November 2018|
|Crowdestor||586 (-14)||611 (-6)||25 (+8)||16.58% / ??||December 2018|
|Abundance||100 (GBP)||100||0||10% / ??||January 2019|
|Bulkestate||100||100||0||12% / ??||December 2018|
|Robocash||500||505 (+5)||5 (+5)||12% / ??||April 2019|
|DoFinance||150||152 (+1)||2 (+1)||10.33% / ??||April 2019|
|Swaper||100||100||0||12% / 12.68%||April 2019|
|Bondster||50 (+50)||50 (+50)||0||12.53% / ??||May 2019|
|ViaInvest||100 (+100)||100 (+100)||0||11% / 11.55%||May 2019|
|Debitum Network||150||150||0||10.36% / ??||April 2019|
|Assetz Capital||100 (GBP)||101 (+1)||1 (+1)||5.81% / ??||April 2019|
|Flender||250 (+250)||250 (+250)||0||?? / 10.5%||May 2019|
|Kuetzal||400 (+400)||400 (+400)||0||19% / ??||May 2019|
|TFG Crowd||400 (+400)||400 (+400)||0||16% / ??||May 2019|
|Total||17208 (+842)||18235 (+1035)||1025(+193)||13.95%/ ??|
The increase/decrease since last month is displayed in the parentheses. ( For example, whenever I deposit/withdraw funds to/from one platform, I add/subtract it from the invested capital in that platform).
I can group my p2p lending portfolio in 3 different categories:
- p2p lending marketplaces
- p2p consumer lending
- p2p business lending
P2p lending marketplaces
This is where platforms like Mintos or Fast Invest fit in. They don’t offer loans by themselves but instead, they provide a platform where 3rd-party lending companies (or loan originators) can offer their loans to investors.
All these p2p lending marketplace platforms have a few things in common:
- the loans published are already funded; meaning the borrower already received the money from the lending company; this means you start earning interest from the day you invest in a specific loan
- while most platforms focus on consumer loans (short or long term), they’re not restricted to that; business loans or invoice financing are not uncommon
- most of the platforms (or loan originators on the platforms) offer some sort of a buyback guarantee; combined with an auto-invest tool, this means you don’t care about the specifics of each individual loan, and instead invest almost blindly small amounts into multiple loans; the focus is moved from the loan/borrower details to the state and health of the platform and loan originator offering the loans
59% of my p2p lending portfolio is invested in one of these platforms. Some of the platforms here are redundant and eventually, I’ll just stick to one of them.
P2p lending marketplaces under tryout
DoFinance, Swaper, ViaInvest, Robocash and PeerBerry mostly deal with the same kind of short-term consumer loans (a.k.a. payday loans). Even more, some of their markets overlap. So, there’s no long-term reason to keep investing in all of them.
So far, this is what I’ve noticed on these 5 platforms:
- Robocash – every once in a while around 70% of my loans are late with their payments; they get bought back by Robocash and I receive the interest payments, so all is fine for now; I’m not worried about their late loans for 2 reasons: (1) they do take the skin off their borrowers with very high rates, so they can afford late payments and defaults, and (2) they do make public their financial statements; if they get in financial troubles I should see it; also, if they stop publishing their financial statements, I will definitely know there’s something wrong with them
- Swaper – I only have 90% of my capital invested; there’s a constant cash drag on the platform and I don’t really like it. They do offer the same 12% interest rate as Robocash does, but so far Robocash performs better.
- ViaInvest – I’m only into this platform because of their cashback bonus (10 EUR when you invest 50 EUR) but they started on the wrong foot; the interest rates are low (9-11%) and the auto-invest tool didn’t work
- DoFinance – I’m still trying to understand who in their right mind would invest in some of the complicated auto-invest funds they offer; all the loans offered are consumer loans and they all come with a buyback guarantee, so they all bear the same risks; yet you can auto-invest in a fund with an 11% interest rate and also in a fund with a 5% interest rate; the difference is that with the 5% interest rate fund you can withdraw your funds in 7 days if you need it; given the inherent risks of p2p lending, I think it would be irresponsible to treat such a fund as a short-term high-interest bank deposit
- PeerBerry – I get constant revenue from my loans (after the late loans normalized); it’s an interesting platform to observe; however, I don’t like that I can’t exit my investments at any time I want so I’ll keep reducing my exposure here
Viventor – I’m still trying to figure out this platform. It’s like Mintos, although on a smaller scale. More than half of the loans I’ve invested in only pay interest twice a year or at the end of the loan term. Therefore my returns after 5 months don’t look too great. The interest rates of the current loans are around 14%, so I can’t complain.
Bondster – I’ve read about these guys on a Facebook p2p lending group and I had to try them. They offer both consumer and business loans from the Czech market. The website is really bad and manually investing here is tedious. They do have from time to time interest rates around 13%, so I’ll give them a chance.
P2p lending marketplaces I like
Fast Invest – I like the constant and reliable income coming from this platform. Every month, I get 50 EUR.
There’s a lot of controversy around Fast Invest in the p2p lending community and I think most of it is unfounded.
Most of it regards recycled ideas on why Fast Invest doesn’t make public its loan originators. I’ve read somewhere that they’ll make public their loan originators this year (after renegotiating their contracts).
Other issues that were heavily discussed was the age of the CEO (not relevant) and the fact that the interest rates offered were too high to be sustainable, at 15%, compared to the 11% rates Mintos offered. Now the top interest rates offered on Fast Invest are at 13%, while Mintos offers lots of loans with 14-15% interests rates and yet nobody complains about it.
One other issue regards the fact that they only have a virtual office in the UK (while the actual main office is in Lithuania) and that is suspicious they don’t allow UK investors to invest on the platform. This doesn’t mean there’s something wrong with the company, it just means they didn’t get an FCA license in order to be able to accept investments from UK citizen.
Mintos – my earnings this month were half the usual (23 EUR). This is because I sold at a loss most of my low-interest loans and bought the newer ones with higher returns. The average interest rate of my loans increased from 11.6% to 13.6%. I’m trying to catch as many loans as I can with a 14% interest rate. The loans I’ve got rid of had interest rates between 9% and 12%, so my short setback on this month’s earnings should payout in the next months.
I like the fact that Mintos keeps evolving. Since I started last year to invest with Mintos, these are some of the few changes I liked the most:
- the loan originators ratings; I can see now which loan originator is reliable or not
- better loan originators statistics on how many of their loans are current, late with their payments, in default
- loan originators started to add fees on late payments; I get paid for the period the borrower was late with their payment
- individual loan originator cashback campaigns – these don’t happen too often, but sometimes when you invest in loans from a specific loan originator, you get a 1% or 2% cashback
P2p consumer lending platforms
I’m including in this group classic peer to peer lending platforms where borrowers register and request for a loan, and lenders finance the loans.
What these platforms usually have in common are the following:
- the loans are funded by the investors; if a loan is not fully funded, it gets cancelled and investors get their money back; this also means it takes longer to receive interest from your invested funds, as you won’t get any interest until the borrower receives its loan
- there’s usually no buyback guarantee; the p2p lending platform only retains a small percentage for intermediating the loan, so the risk is passed to the investors; 2 factors are important for getting a profit out of these platforms: the lending platform needs to do decent enough credit assessments that the percentage of defaults is limited, while the investors need to spread their investments into as many loans as possible so defaults are just a small part of their investments
While there are more platforms I’m following, like Finbee, Monestro or Omaraha, I’m currently only invested in Neo Finance.
I’ve only started investing in Neo Finance because I’ve bought some shares in a funding round last year on Seedrs and I was curious how they’re doing.
While my returns on the platform are lower than the ones of the typical investor, I’m happy with how the platform performs.
All the loans I’ve invested in are covered by a provision fund, which behaves like insurance. If the borrower is late with the payments, the provision fund covers the monthly interest payment.
While this brings me peace of mind, it comes with the cost of lower returns. The average interest rate of the loans I’ve invested in is at around 17%, while my expected annual return is just 11.7%.
Neo Finance is going public this month, which means a few interesting things for me:
- since they’ll be publicly listed, they’ll need to publish their financial statements periodically so I know when they’re having problems; I won’t be taken by surprise by an unexpected bankruptcy
- I get to see what happens with my shares on Seedrs and how they move from there to my broker account (Interactive Brokers)
- I’ve put a bid on their IPO and I’m curious if my offer will be accepted; of course, I’ve put the minimum price per share accepted, because I’m cheap
P2p business lending platforms
I’m including here all the platforms I’ve invested in that offer exclusively business loans.
Even though lending marketplaces like Mintos or Viventor offer business loans as well, the main focus of these platforms is still consumer loans. Because of the buyback guarantees and a large number of available loans, you don’t really care about the loan specifics and you can just invest in as many loans as possible to lower your risks.
The platforms focused solely on business loans are a bit different:
- the number of loans available is a lot lower
- the minimum investment in a loan is higher, typically 50 or 100 EUR
- the securities offered are different: sometimes it’s a buyback guarantee, other times is a mortgage or some other pledge on company assets
- most of the times there’s no auto-invest tool; if there is, you should be reluctant to use it; since the sums invested in a single loan are larger, you can afford the time to study each loan in part, read the project details, its financials, and decide on a case by case if you want to invest in it or not
35% of my p2p lending portfolio is invested in these p2p business lending platforms.
I’ve started this month to invest in the Irish p2p business lender Flender. I like the fact that I can finance my account through my credit card. I find their promoted interest rates misleading, mixing annual return rates with interest rates. You can read more about them here.
TFG Crowd, Kuetzal and Envestio
I’ve also started investing in TFG Crowd and Kuetzal. I’ve been following them for a while and I feel confident enough to invest some small amounts in them.
I would have been happy with staying on Envestio, but there are just not enough loans for me to invest there. And most of the loans that appear on the platform come from the same handful of borrowers. Envestio definitely needs to enlarge its pool of borrowers.
TFG Crowd and Kuetzal are good alternatives to Envestio. They both offer a buyback guarantee on loans with 15% to 21% interest rates. These platforms are still in their early phases and they offer higher interest rates in order to attract new investors, so I might as well just take advantage of that.
EstateGuru, Crowdestate and Bulkestate
Somehow I think about these platforms as different versions of the same thing. They all operate in the same markets, offering somewhat similar loans.
One of my investments in Crowdestate, a development project from Milan, completed this month and I’ve received my principal back. I’ve immediately invested it in a different project on Crowdestate.
EstateGuru had a cashback promotion this month, although it looked like a rich people promotion. For whatever you invested in May over 3000 EUR, you’d receive a 0.5% cashback. Whoever has more than 3000 EUR to invest every month, I’m sure they can find better investment opportunities than p2p lending.
Crowdestor keeps returning steady income. And they keep offering loans with excellent returns (the current one available is at 21% interest rate). Their buyback fund reached almost 70.000 EUR this month. It’s still not enough to cover a single default.
Grupeer – I’ve received 35 EUR in referral income so this really spiked up my earnings on the platform (Thank you!). My typical returns at around 10 EUR. A few loan originators on Grupeer keep offering 1% cashback when investing in their loans. It’s a good time to be on Grupeer.
Abundance Investment and Assetz Capital
These 2 are the only peer to peer lending platforms from the UK I’m invested in.
Abundance Investment – things are going too slow here. I would sell my investment and just leave the platform because it’s too boring but I can’t sell it yet because I didn’t get any income yet.
Assetz Capital – the interest rates are a bit too low for EU investors to add more money into it. While the UK investors get tax breaks, extra cashback for opening special savings accounts (IFISA), I’m only getting an expected 5-6% annual interest rate. A lot lower than the one received from the other platforms I’m invested in.
Nothing new happened on Debitum Network this month. I keep reinvesting my funds into loans with a buyback guarantee and I’m waiting to see what other loan originators they add to the platform next month.
It was a good month to be into peer to peer lending. See you next month.
P.S. I’m writing this from Vegas, and my economies are dwindling by the minute 🙂
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