First look into Viventor

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.

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Viventor profile:

  • Loans secured by mortgages
  • ~6-7% estimated returns p.a.
  • Buyback guarantee
  • Minimum investment 10€
  • 2,8 million euros in loans so far

Q&A

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.

First impressions

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.

18 thoughts on “First look into Viventor

    1. Hey! LTV – loan to value. For example: Your property is estimated to be worth 100K, you take a loan of 20K, that means a 20% LTV. The lower the LTV in percentages, the “safer” an investment should be in theory, since you shouldn’t have issues in selling off the property and covering the loan.

      1. In my opinion there always remains the question about the competence (credibility) of the evaluater. If it remains anonymous, by whom (which real estate company) the evaluation was given and when, then it adds little more than your mere faith.

        “as all the mortgages are located in Spain…”

        And as the COO of Viventor has a background of Twinero (a payday loan company in Spain) then I would suggest that Viventor might reinvest the gathered investments to finance payday or other consumer loans in Spain:

        With monthly interest of around 35%. And in comparison a 6-7% yearly interest rate makes it a monthly interest rate of 0.58%. So I would say they have a pretty profitable leverage to Spanish payday loans.

        So the described model resembles me more-less the business model of Twino or the late Trustbuddy.

        1. I definitely agree with the issue of credibility of evaluators – anyone who has ever hired one has experienced just how flexible the pricing is. However, at such low percentages it would have lower impact even if things are slightly overpriced.

          As far as the business links between companies go, I haven’t had a chance to look into it, but it’s clear that any business won’t be making a loss, and the model is built up for them to profit.

        2. Hi,

          Thank you for your comments. To give more information:
          >For every single loan listed, the appraiser company is shown in the “Open Loan View”. All valuations are done by independent appraiser companies.
          >The COO, Andris, joined Viventor’s board as a representative of the current partners in origination that we have. He has years of experience not only in non-bank lending (of various sorts), but also mortgage loan underwriting, so we strongly believed that him joining Viventor’s team would be beneficial in various ways.
          >Concerning your comments about Twino, Twinero and TrustyBuddy – the mortgage-backed loans is only the first type of product we are offering. We are on our way to offer our investors much more diverse investment opportunities. And, of course – should we offer short term consumer loans, we will also offer higher returns, that will obviously come with higher levels of risk.

          If there are any other questions, feel free to respond me here, or get in touch with me via toms@viventor.com at any time!

          Toms

  1. Few findings:
    * mostly interest-only loans where principal is scheduled to be paid in full in the last installment – compare for example with Crowdestate’s credit contracts, where principal is paid before interest, allowing for tax optimization (may or may not apply based on your status and tax residency)
    * their filter on status (current/late/non-performing) doesn’t work, all loans are shown to have current status even though several are late, based on manual inspection of repayment schedules

  2. Hello!

    Thank you for reviewing/presenting a new p2p-lending site.
    Definetely the mortgage (or other relevant collateral) backed p2p loans are the way to go these days.
    However, the problem these new guys are facing is to convince the investors WHY the new companies are BETTER than the old ones.
    For instance, Mintos has been treating me well so far and as a gesture of gratitude (and greed) I’ve doubled my portfolio over there during past 2 weeks as I happen to have some extra cash flooding from the rental units (and I am also still working despite I am thinking of retiring soon). :)

    Especially if a p2p lending starts, there is a steep learning curve and there are defaults taking place – there is no track record for the investors how they are handling the defaults, and they start with low interest rates instead of ending up with lower interest rates which is healthier approach as the perceived risk is lower.

    By the way, happy holidays, Kristi!

  3. “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.”

    With all else being equal a 6-7% return on a 20% LTV loan could be a lot better risk-adjusted return than a 8-10% on a 60% LTV loan.

    Of course, I’m not entirely sure how to calculate that and it probably requires some additional info, not just the LTV, but if someone really wants to invest based on risk-return, then google will probably help quite a bit :)

    I’d assume, you also need to look at liquidity for one thing, besides the accuracy of the valuation. There’s not much difference whether the LTV is 20% or 80%, if the real estate has no buyers.

    1. I think an interesting point here in addition to the actual value of LTV (since you are right, it’s difficult to predict whether there is a buyer), the question is – would someone be willing to lose their property over delinquent payments – if the LTV is only 20% I’d assume they’d work rather hard to pay since the loss is disproportionately big in case of failing to pay?

      1. Yeah, possibly. I tried, but couldn’t really think of many situations where the effective sales price would be below 20% LTV if you really wanted to offload the property :)

  4. If we are getting 6% and there are both Viventor and a loan originator in the chain the borrower must be paying at least 12%? At such low LTV I would have thought a bank would offer a much better deal.
    The loans are not small the terms are short, the repayments are several thousand €uro a month. What sort of private person has the income to afford that and yet needs a loan.
    We are not told the name of the borrower or anything about them
    I have exchanged emails with V about this but he isn’t able to explain to me.
    If I could trust the proposition it would be superb, but…

    1. That’s a good point. However, I think you are overestimating just how willing banks are to give loans at this point. In Estonian, at least, real estate backed loans aren’t something banks really want to invest much money into, especially “small sums” (from the bank’s point of view), which would make the 12% rates a bit less bizarre since they’re short term.

        1. Hi Steve,

          Can you please clarify the questions still uncertain for you? I am always happy to provide all the information I can.

          Regarding the loans themselves – all of the currently listed are taken for business expansion or generating additional income. The laws in Spain restrict securing the loan against the first property, so all the borrowers have two or more properties owned. Thus, making relatively big monthly repayments is within their capability.

          Concerning bank lending – in reality, acquiring bank financing in Spain takes quite some time and effort. From the loan originators’ experience, a fair share of the loans are repaid prior to maturity, since the borrowers refinance to other creditors that offer better conditions in the long run.
          One of our partners’ advantages is providing financing to eligible borrowers comparatively fast.

          All of the loan originators currently listed are part of Prestamos Prima Group.

          Toms

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