MoneyZen portfolio, 10 months

I realised then titling this post that soon I will have been investing into Moneyzen for a year. The only thought that comes to mind with this – underwhelming. Moneyzen has greatly underperformed my expectations and if a secondary market existed at this point I’d likely make a full exit from the site.

moneyzen

 

Thoughts on Moneyzen’s current situation

Having invested into Moneyzen for 10 months now, I’m struggling to even fill my original goal of 50€ invested per month. I haven’t wanted to reduce the requirements I have for the loans I wish to invest into since their whole business plan was to have high quality borrowers. This means that while I’ve kept interests reasonable in my opinion then money has been moving slowly and I’ve had time when no loans have gone out for close to a month.

I’m not sure if it’s an issue with their business model or the way they select their clients. At this rate the lack of liquidity is becoming a bit of a liability since exiting the portal is a time consuming process. Also, I’ve now had two loans go into collections as well, which means that a sum close to the number of euros I’ve made in investments is now locked down.

Just overall I’m feeling very unimpressed and I can’t really figure out what the issue is. Is there truly a level of market saturation that they can’t break through? Is there a lack of clients that they’d like or is it just that at the interest point they are at people would prefer loans? Will the hoped expansion to Finland finally be the key? Whatever it is, then other portals are showing growth while Moneyzen is just not doing much of anything. I’m considering just stopping all investments at this point to not lock down more money and just see how it goes.

5 thoughts on “MoneyZen portfolio, 10 months

  1. Haha, I think if MoneyZen would have a secondary market, it wouldn’t be too easy to make an exit because lack of liquidity.

    This idea of MoneyZen (to get as quality borrowers as possible) is somewhat dangerous. If you accept 500 applications per month and issue only 10-20 applications, then the rest of the borrowers might never turn back to MoneyZen. Meanwhile Orchard analysis has showed that many bad quality borrowers might turn to good ones (check it out here: http://www.orchardplatform.com/blog/revisting-repeat-borrowers/). We can see that most of the first loan HR’s turn out to be C or B/D group borrowers later. If MoneyZen prices it’s first line borrowers with lower rate than they currently accept, then there is no chance to get those people financed later and this is the main reason why I think they are too conservative. Yes – all of them should be getting money, but maybe the barrier has been set too high?

    1. Damn, no edit options? Last sentence should have been:
      “Yes – all of them shouldn’t be getting money, but maybe the barrier has been set too high?”

  2. This is one of the risks you have when joining new platforms that you’re either not happy with the loan performance or can’t invest your funds. That’s why I like platforms with existing secondary markets, although at current stage even these aren’t as liquid as they should for a smooth exit.

    But the issue here could simply be that there are way too many investors joining the platform with loan supply not catching up. At least judging by what’s going on in the real estate platforms and some others.

    Of course, what I’ve seen people mention as interest rate offers from Moneyzen for loans, then it didn’t seem that good price for a premium customer either so who knows.

    If they have proper platform level statistics, it should be easy to check whether the amounts have gone up or down though.

  3. I do hope You’ll feel better in time, Kristi (maybe after collection results or indeminification from ZenFund). MoneyZen quality is better than market average, few overdue investments are part of business. Actually for many investors it is intereresting higher yield opportunity (through penalty interest).
    Customer rating is cruical part of any lending business and yes, MoneyZen scoring system is part of business model and strategy (which secondary market will not resolve). Secondary market will be available in MoneyZen and there is no lack of liquidity either (as in any of biggest consumer loan p2p platforms in Estonia).
    To summarize it all there are risks in every investment opportunity and it is up to investor to make his decisions he/she feels comfortable with.
    I will personally inform You about launch in Finland and secondary market to make sure there is something to feel better about MoneyZen :)
    Daniel, CEO

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