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PeerBerry P2P Lending Platform Review

PeerBerry is a new peer to peer lending platform that has its first birthday in October 2018. They offer EUR short-term loans at a usual return between 10-12%.

Published:  Tuesday, 29 December 2020
Author:  Daniel
Launched:
2017
Headquarters:
Latvia
Investors:
29,000
Investors from:
EEA
Investments Funded:
350 million €
Investment Types:
Consumer Loans
Investment Countries:
Central and Eastern Europe, Vietnam
Investment Terms:
30 days to 5 years
Interest rates:
10% - 12%
Minimum Investment:
10€
Currencies:
EUR
Early Exit:
no

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.

Loan originators 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 2020, they managed to fund loans worth more than 350 million EUR on their platform.

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

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

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.

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.

Platform experience

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

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.

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.

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.

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:

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.

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 honoring 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 default rate on one or more of the loan originators becomes unsustainable. In this case, the buyback guarantee becomes useless, because it’s not paid by PeerBerry, but by the loan originator.

You can get more details on each loan originator and how safe it is to invest in their loans on this page.

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 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.

Summary on PeerBerry

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

Buyback guarantee

It offers 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.

Good interest rates

The interest rates are good, ranging between 10% and 13%. They’re not the best on the market, but they’re less risky 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.

Learn more about Peerberry by visiting their website

Visit Peerberry

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