There are new P2P lending platforms popping up like mushrooms. In many ways this is good – you have more platforms to choose from and a way to both manage risks and find an instrument most suited to your profile. On the other hand, it’s becoming difficult to keep up with all the different sites – if you’re Estonian you now have at least 10 P2P sites to choose from. So, to get a look into what the Latvian P2P site Viventor is about I got to ask some questions from their Operations Officer, Toms Niparts.
- Loans secured by mortgages
- ~6-7% estimated returns p.a.
- Buyback guarantee
- Minimum investment 10€
- 2,8 million euros in loans so far
What is Viventor’s main focus (what type of loans, which markets? do you have future expansion plans?)
Our main focus at this point is to offer high quality secured investments that carry very low levels of risk. As we move further, we are planning to add various other products with different levels of risk, as well as get into large scale real estate projects. We are aiming to serve investors from all over Europe, but it will obviously take some time to reach this goal. Currently, we see the most interest from Southern and Western Europe.
What do you feel is your competitive advantage when compared to other platforms on the market?
One thing is definitely the extremely low risk levels of loans. I don’t know any other platform that offers secured loans with LTV being between 20 and 40%, plus with a Buyback Guarantee. We are also putting a major focus on seamless investing experience and design of the platform, so that using it would be obvious also for people not very familiar with web products.
I noticed that you have a buyback guarantee – could you explain further on which terms it works and why you decided to have a buyback guarantee? (since many sites do not)
If a loan is 60 or more days delinquent, the loan originators will offer to buy back the investment at the face value (=price that investor paid to purchase the stake). The investor also has the right to refuse, and wait for the debt to be recovered, simultaneously accruing delayed interest and late fee payments.
Since we are a new platform without a known brand name, we have to build our image, and show that we, as well as our loan originators have skin in the game 100%. Buyback Guarantee is only one of the ways of doing it. All of the loans are also 100% pre-funded, and the originators have the first charge on the mortgages should a borrower default.
When looking at the loan listings – 6%-7%, why do you feel that this interest is competitive? (What are your historical returns & how do delayed/bankrupt loans get handled?)
We believe that 6-7% is a very good return for the deal offered. Keeping in mind the already mentioned low LTV levels, another major factor is that all the mortgages are located in Spain, which obviously speaks about their liquidity.
About the historical returns – there is not a whole lot of data so far, since we started out only less than two months ago. The weighted-average return of our loan book, for example, is 6.82% p.a. Fixed. About non-performing loans: the loan originators have debt collection partner companies for this purpose.
Anything that you want to add, that you wish investors knew about?
Apart from low levels of risk, Buyback Guarantee and the noteworthy collaterals, we also offer fixed interest, which only a few platforms on the market offer. This means that you receive the same amount of interest every month, instead of diminishing interest payments.
We have a plenty of loans available that reach the maturity within 12 months or less, so this means that an investor is not locking up his money for a long period of time. The Secondary market is coming soon, as well as a number of other loan products with different levels of risk and returns. Currently, Viventor is available in English, German, Russian and French, but we will be adding a few other languages in 2016.
A lot of investors feel that one of the key issues of P2P lending is the risk, so for them mortgage backed loans with low LTV would clearly be something interesting. However, looking at returns currently offered by other P2P platforms, it’s an issue of risk vs reward, but for people with a lower risk tolerance I can see these returns being attractive.
Of course they have a somewhat uphill battle ahead of them, since there are many P2P portals on the market offering different products even in the same niche (EG in Estonia, Mintos in Latvia). Hope they do well – the market could always use good competition.