4.3
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PeerBerry is a nice-looking Latvian peer to peer lending platform that had its first birthday in October 2018. They offer mostly EUR short-term loans at a usual return between 10-12%.

Lately, they added a few loan originators that also offer real estate and car leasing loans.

There are currently over 15000 investors registered on the platform (up from 3771 at the end of 2018) and the platform is steadily growing.

PeerBerry Highlights:

  • Launched: 2017
  • Headquarters: Latvia
  • Number of investors: 15000+
  • Loan types: Short-term loans, Real-estate, Leasing
  • Loan terms: 1 to 45 days on short-term loans, up to 5 years on long-term loans
  • Interest rates: 11-13.3%
  • Fees: no fees
  • Minimum investment: 10 EUR
  • Currency: EUR
  • Secondary market: no
  • Auto-invest: yes
  • Buyback guarantee: yes, after 60 days, including owed interest for the delay
  • Bonus: 0.5% – 1% loyalty bonus when investing more than 10.000 EUR

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How does PeerBerry work

PeerBerry is a p2p lending marketplace. This means it doesn’t directly offer loans but acts as an intermediary between lending companies and investors.

The lending companies have loans issued to their borrowers. They publish these loans on the PeerBerry website and offer investors an interest rate for them.

Investors choose to invest in these loans either manually or through the auto-invest profile. The minimum investment in each loan is 10 EUR.

PeerBerry will buy back the loan for you with the full interest as well if the loan payment is more than 60 days late.

A more in-depth look at PeerBerry

PeerBerry is a p2p lending platform launched by Aventus Group at the end of October 2017. Aventus Group is a payday lender with operations in most Eastern European countries.

Aventus Group used to offer their loans on Mintos, but at some point, they decided they’re big enough to open their own platform and cash in all the profits.

PeerBerry is doing well so far, and the platform grew constantly since it started. At the end of 2018, they managed to fund loans worth more than 7 million EUR on their platform.

 

peerberry investments

There are currently 20 loan originators on the platform, issuing loans from the Czech Republic, Denmark, Kazakhstan, Lithuania, Moldova, Poland, Russia, and Ukraine.

Most of the loan originators on the platform are part of the Aventus Group (keeping the profits in the family).

Besides short-term loans, they started to add some new loan originators that offer car loans (from the same Aventus Group) and bridge loans secured by real estate.

Becoming a PeerBerry investor

1. Create an account

Any person over 18 years old and living within the European Union can invest in PeerBerry.

The registration process was a bit weird because they never asked for a picture of an ID document and proof of address. These details are requested by all the other platforms I’ve used.

2. Fund your account

After registration, you can begin immediately to transfer money to your account. You can start to invest in any loan with as little as 10 EUR.

You can use an EU bank account, Revolut, Transferwise or any other electronic money institution if they’re based in the European Union.

PeerBerry asks you for an ID only when you want to withdraw funds from your account – a scan photo of your ID or passport.

Withdrawing funds from PeerBerry usually takes less than a day. I’ve been moving my funds between my Revolut account and PeerBerry and in both ways, the transfers took less than a day.

3. Invest in loans

Now you can invest either manually or through the auto-invest profile.

Platform experience

You can either manually pick the loans you’re interested or create an auto-invest strategy and let it pick investments for you.  You can also use both options.

Manual Investing

pearberry loan list

On the Invest page, you get a list of available loans, with interest rates around 10-12%. Most of the loans available are short-term, although I’ve also seen a few that have more than 12 months terms.

You can also filter the available loans by interest rate, loan term, the amount available for investment, country, loan originator and if the loan has a buyback policy or not.

The loan details

Once you click on a loan you’re interested in, you get a bit more details about the borrower. The details contain their age, sex, country and how many loans the borrower already has. You can also see the loan originator details, interest rate, remaining loan term and if the loan has a buyback guarantee policy or not.

peerberry loan details

Not that these details would matter at all. You want to invest only in small shares of the loans, so you’ll only invest 10 to 50 EUR into one loan. It would be a real pain to check borrower details on every loan you invest in.

You can see both your current and past investments on My Investments page.

peerberry my investments

This page is consistent with the Invest page and has the same filtering options for loan amounts, loan terms, interest rates and so on.

What’s missing on the Finished Investments page is when the loan was actually paid. It only stores the value of the scheduled payment date.

Auto-invest

peerberry autoinvest

The auto-invest feature is nice, simple and modern. It lets you set details like portfolio size, the maximum amount per investment, interest rates, loan terms, buyback guarantee. You have a reinvest check if you want to continue to reinvest your interest payments into the portfolio.

The only thing that it doesn’t let you do, and it would really help improve your returns from the platform, is setting the loan originators you’re interested in.

Loyalty program

PeerBerry has a loyalty program that rewards investors that invest over 10.000 EUR into their loans. Depending on the amount invested, you fall into one of these loyalty brackets:

  • Silver, you get 0.5% more on your investments when your active portfolio is over 10.000 EUR
  • Gold, you get 0.75% more on your investments if your portfolio is over 25.000 EUR
  • Platinum, 1% more on your investments if your portfolio is over 40.000 EUR

PeerBerry risks

As with many other p2p lending platforms, investing in PeerBerry projects comes with many risks. Before you start investing in PeerBerry, you should take these into account.

Platform risks

If PeerBerry files for bankruptcy, it should not affect the investors’ funds. Each investment is a contract between the investor and the lending company, not the PeerBerry platform.

Another risk comes from the fact that you only need a password to access your account. To minimize this risk, if you open an account here (or anywhere else in fact), try to follow at least these rules:

  • Try not to use the same password on 2 different websites
  • Don’t use easy passwords like “123456” or “password”
  • Don’t keep your passwords written on post-its
  • Use a specialized password manager to keep track of your passwords

Regulatory risks

Crowdlending is a fairly unregulated domain in most of Europe. Any changes could affect existing platforms. This means PeerBerry might find it hard to comply with the regulation changes and at the worst, they’ll have to suspend their activity.

Market risks

A rise in the unemployment rates in any of the countries of the loan originators will raise their defaults rate. If this goes too high, the loan originators might have problems honouring the buyback policy.

Performance risks

Your investment doesn’t depend on each loan’s performance, because it is covered by a buyback guarantee. The buyback guarantee states that if a loan is late by more than 60 days, PeerBerry triggers the buyback and the investors receive the principal and the interest accrued even for the 60 days late period.

The buyback can become a liability if the defaults rate on one or more of the loan originators become unsustainable. In this case, the buyback guarantee becomes useless, because it’s not paid by PeerBerry, but by the loan originator.

PeerBerry has a list of its 20 loan originators in their FAQ section, but it doesn’t contain any financial details about them. Most of these lenders offer payday loans with 500% to 5000% APR (annual percentage rate).

The example below from pujcka7.CZ, one of the loan originators, asks clients for an amazing174.000% APR on a 7 days loan. (The dog in the picture looks cute though)

high interest loan

Even more, I don’t think the loan originators do too much risk assessment on their loans either. One of the loan originators, creditplus.ua, states on their website (I used google translate):

The likelihood of approval on the application is 98.2%

This means that most of the loans will default anyway, and they’re more than happy with it. It doesn’t look like a sustainable model.

Liquidity risks

There’s no secondary market or a way to sell back your loan to PeerBerry before the loan term.

For the short-term loans, this is not a big issue, because they mature in at most 45 days. Most of the loans on PeerBerry are late by 30-60 days, but even with that, you can get a hold of your funds in at most 3 months.

For the long-term loans, the problem is even bigger. If you invest in a 5 years loan, you’ll need to wait for 5 years before exiting the PeerBerry platform. Or hope that in the meantime PeerBerry will build a secondary market.

My portfolio:

  • Last update: June 2019
  • Started Investing: December 17th. 2018
  • Current value: 777 EUR
  • Profit: 132 EUR
  • Expected annual return: 11.95%

I’ve started with an initial deposit of 5000 EUR but after 2 months I’ve moved almost 4000 EUR to other platforms.

peerberry portfolio

Initially, I planned to invest in these short-term loans because I could withdraw my funds fast in case a better opportunity arrived. Because these loans are usually late with their payments, I couldn’t really do this.

So, I’ve been slowly withdrawing every month all the payments I’ve received from PeerBerry. At the end of June, my portfolio was worth 777 EUR, out of which 132 EUR was the earnings I made so far on PeerBerry.

Since February I’ve stopped investing in short-term loans. They just don’t line up well with my internal values. I’ve started in turn to invest in leasing and real-estate loans. These have loan terms of up to 4 years and even better interest rates (13%). The downside is that with no secondary market, I’ll need to wait for 4 years before I can leave PeerBerry.

Conclusions on PeerBerry

PeerBerry has a few great features that make the platform one of my favourites. But it also has some missing features that might make me stop investing in it.

Buyback guarantee

They offer a buyback guarantee policy for loans that are over 60 days late. This also includes the interest payments for that period, so you don’t lose any money.

Auto-invest option

The auto-invest feature is good but it’s missing some important features.

It definitely needs a filter by loan originators in order to make the auto-invest actually usable.

The platform is still relatively new so I expect there will be new features added soon.

Good interest rates

The interest rates are good, ranging between 10% and 13%. They’re not the best on the market, but they’re risk-free as long as PeerBerry doesn’t go bankrupt or the entire P2P lending system crashes.

Nice user interface

The website also gets extra points for its design. It is fast and easy to use, with a clean and modern interface.

No secondary market

PeerBerry offers both short-term and long-term consumer loans. You can’t get out of your investments earlier in either case.

You can expect half of the short-term loans to be late with their payments at least 30 days and for a maximum of 60 days. So, if you plan to withdraw your funds from PeerBerry and you invested in short-term loans, you can expect to be able to do that in 2 to 3 months.

If you invest in any of their long-term loans, with maturities ranging from 1 to 5 years, you have no possibility to exit your investment ahead of loan-term.

I find the loans on the platform unethical

The loan originators that offer short-term loans on PeerBerry charge their clients an APR (annual percentage rate) between 500% and 5000%.

Leaving aside the fact that investors only get an 11% rate on those loans, that APR is astronomical.

I’m sure it doesn’t help the people who need those loans and for sure it doesn’t make me feel good for taking part in this.

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6 Comments

M · May 23, 2019 at 3:15 pm

Thanks for the great review. I’m wondering how I could find more reviews of Peerberry’s loan originators – there are a lot of them.

    Daniel · May 24, 2019 at 5:05 am

    Most of the loans come from loan originators part of Aventus Group (PeerBerry is part of the same group). You can find some details about them on FAQ -> Loan Originators section and on the About Us page.

Stoian · July 29, 2019 at 3:52 pm

I cannot find any option for diversification of investment. Even in manual investment you don’t have any mark in which loans you are already invested in.

    Daniel · July 30, 2019 at 12:20 pm

    You’re right. You can invest multiple times in the same loans if you’re not careful. It would be nice if PeerBerry had some better filters and stats.

    What I do to check in what loans and loan originators I’m invested in is to export my investments into excel and look at the data there. I can group it by loan originator and see if one of them has too much of a share. But this only helps me if I want to invest manually. Auto-invest picks up whatever it finds.

Momchil · August 13, 2019 at 1:13 pm

From my experience using the platform for 2 months it looks like there are around 30% of delayed loans which probably decreases profits. It really depends if the interest is paid in full or not.

    Daniel · August 14, 2019 at 3:59 am

    After more than half a year now I can see that the late loans don’t actually decrease the profits. You get paid interest for the late period as well. Although it’s annoying you can’t verify this anywhere on the website. I had to export all my loans and transactions in excel and run the numbers in order to see how much I got paid for each loan.

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