Social lending portfolio (March, 2016)

Honestly, so many things were happening in P2P in Estonia in March that it was difficult to keep track of everything. Overall, big numbers, some chaos and interesting future perspectives would probably describe the month. Overall, I just got back from London and it was an experience in how far behind we are when it comes to investing being mainstream – you can hardly look anywhere in central London (or on the metro) and not see some sort of advertising for investing. Things are hopefully changing here as well, though.

Bondora personal portfolio


I’ve started the process of wrapping up my private portfolio, which can be seen from the dip in interest earned (below 100€ for the first time in 6 months). What this means is that I am selling off defaults and old mispriced loans, that I want to get rid of. Current plan is to sell off the not-so-great parts of my portfolio within this year, and then do a sale for the better loans next January (so the tax obligation would arrive mid-2018).

Overall I think it’s a reasonable plan because 1) secondary market is so slow at the moment that I don’t want to dedicate too much of my time to selling things 2) selling good EST loans at a premium won’t be an issue, so I might as well let them pay as they are, and then sell the ones that are too far from deadline once I actively pull out. I’ve transferred out 1K of money, which is going into stocks since it’s money invested as a private person.

Bondora business portfolio


For my business portfolio, I am a bit torn. Bondora is not the highest returning part of my P2P portfolio (Omaraha is), however Omaraha is unable to offer enough volume and lacks a secondary market. So it seems that Bondora will have to remain the biggest part of my portfolio at this point. There was a slight dip in interest returns since last month a lot of the loans started with frontloaded interest payments, it should stabilize out and start climbing now.

Omaraha portfolio


As time goes on, I have to admit, I am liking Omaraha more and more. It is clearly currently top when it comes to returns, since I haven’t had any defaults yet. However, they recently announced that all new defaults will have a buyback at 80% of principal value, which means that the potential loss isn’t immense – especially since most of my loans (90%) are 900+ (the highest) credit group. Looking rather stable, and aiming to get to 100/month in interest earned by some time in autumn. Will see, depending on how I manage the different proportions – adding money to Omaraha is heavily dependent on their volume of loans. I mostly just add money when what I have on the account has run out.

Mintos, Twino, Viventor


I’ve essentially given up with my idea that Mintos could offer reasonable short-length loans and slightly replayed the proportions between Twino and Mintos. Of course, Twino has been slightly confusing this month, the biggest problem being that the autobidder is slightly broken at the moment. Viventor finally managed to get theirs working though, so there must be balance in the universe 😉

Currently Twino/Mintos stand equal in my portfolio (just added the money into Mintos later, which is why the interest returns lag). For Viventor, they seem to be doing OK, so I will probably add in a couple of hundred extra there just for their 1-month length loans. Mintos’s offers of 13% consumer loans and 13,5% car loans means that even though I’m not a fan of the loan lengths there, it does slightly pull ahead in the race of the Latvian platforms at the moment.


I have this dream, that one day CrowdEstate’s IT system will work as intended. At this point it seems like they are still suffering from issues when a new project releases, which made this project fun – since I was in London I had to find a Starbucks for wifi and then suffer through the horror of using their website on my mobile phone. I really want them to do well, but issues like this take away a lot of goodwill that investors would otherwise have.

Estateguru, Moneyzen & Investly

Estateguru is impressing with volumes, however as stated before, not adding any money currently since my portfolio there is private (no word of a secondary market for a long time now).

Moneyzen did not manage to get the new regulatory license on time, which means that no new loans are being given out. Which makes me reasonably happy that I ‘only’ have 500€ there, but it’s not being reinvested, so not good overall.

Investly seems to have gotten their pipeline for factoring (invoice selling)  going, there seems to be a reasonable amount of invoices listed, which is making me consider actually finalizing my registration and testing them out.

Social lending portfolio (February, 2016)

February passed so quickly that I didn’t really even have time to do much. However, despite the shortness, it was a nice growth month, with several interesting things happening on many P2P portals.

Bondora personal portfolio

Interestingly enough Bondora was by far the biggest surprise this month – after such a long time of investors complaining about all the things, they seem to have taken the investors’ wishlist and just started crossing off all the things that have piled up in the past few years. New cash flow & dashboard components allow for some interesting modelling options for your portfolio’s future. I haven’t had too much time to play around with it, but I must admit I like what I’m seeing!


Interest returns are now slowly starting to drop (to 108€) due to the fact that I’m slowly starting my exit. I’ve transferred out my first 450€ (which is being sent to work on the stock market). I’ve also started to slowly sell parts of my portfolio that will be selling at a loss – I don’t have to take into account any taxation issues on those, and at this moment selling large amounts of loans on the secondary market is definitely not comfortable. However, I’ve started to scan through my loans and started selling off defaulted loans that haven’t really started to recover and loans that are suffer from pricing issues (old HR loans with 20%-ish interest rates). It takes some playing around with discount rates, but I’m happy with how it’s going so far. The loans I’ll sell with a premium I’ll start selling Jan 2017 – meaning the tax obligation hits summer 2018.

Bondora business portfolio


The business portfolio is growing as planned. I’ll hit 200 loan pieces soon and then I’ll likely increase the bid size a bit. Overall absolutely no issues with money going out (I’m not using too strict criteria – just country & credit group limited). I must say I am pleased with the pricing changes since it’s clear to see when comparing my two portfolios that loans that are priced with the rating follow expectations reasonably well – AA, A, B loans are showing very good payment discipline, I hope the likelihood of defaults is also correctly determined, as my portfolio grows I’m becoming more of a fan of slow and steady.

Omaraha portfolio


Omaraha is doing slow and steady, most important news is that there was an announcement that they’ve received the permit needed to keep functioning from the Estonian Financial Authority. Still, Omaraha has some downsides – at this point I haven’t had any loans go out for 8 days (usually the rate is about 1 loan/day). I’m wondering if it’ll start moving or I’ll have to play around with the interest rates. I like their no-hassle system but lack of a secondary market is making me balance investments between different portals, and not letting Omaraha move too far ahead.

Mintos, Twino, Viventor


Interestingly enough the Latvian buyback triplets caused most hassle for me this month. Mintos could still use some usability upgrades, and it’s become clear that short-term investing there isn’t viable due to a lack of short term loans. However, my hopes for Twino becoming a major player in my portfolio were dashed with their brutal interest cut and some recent communication blunders. I did start investing in Viventor as well, but that’s mostly play-money at this point as they build up their reliability.

Definitely interesting choices to be made here in the near future – if the Latvians had managed to keep going as well as they were for the next few months, I think they would have wormed their ways into investors’ hearts even more, but as it stands, making decisions to divide my P2P portfolio is becoming difficult with all sites having some downsides.

Crowdestate portfolio

I contributed a small amount in the most recent CE project. A new one is opening for this months, I’m interested to see what it is. As it stands, the first round of investments that I’ve contributed in are starting to finish up, so I hope that the reinvestment snowball will start rolling at some point.

Estateguru & Moneyzen portfolios

Did not add any new money to either. Would probably exit if possible (at the very least to switch to business portfolios), but both stil lack a secondary market. At least my investments in MZ are small enough to get reinvested rather regularly. With Estateguru I’m just stacking up money to probably transfer it out at some point.

I opened a Viventor account

Since Latvian sites are doing rather well at attracting Estonian investors, then I decided to also test out the third Latvian portal, adding a small amount of loans at Viventor to my investments, which already include Twino and Mintos.

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What does Viventor offer?

Viventor started off with offering low interest and low LTV real estate loans and they just recently added short term (1 month) Spanish consumer loans with a set 12% interest rate and a buyback guarantee. Essentially what they seem to be building towards in one sense is a Mintos-like marketplace where different originators can finance loans and have 10%ish returns with buyback. It will be somewhat interesting to see how the battle for their marketshare will work out when competing against one another, but since Viventor has seemed to start from southern Europe there might be enough room for all. Also, P2P in general holds such a small part of the overall lending market that there should be room for everyone.

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How does the site work?

Overall, the site at this point works rather weakly. It seems to be developed live, meaning a lot of things investors are used to from other sites are missing. This includes things like a properly functioning autobidder, data export, easy to read cash flow report, and a whole pile of comfort functions.

I invested into my first loans manually and supply isn’t an issue in the sense that the site doesn’t really have a whole lot of investors yet and their history is by far the shortest of all P2P sites nearby. However, provided that they manage to work on usability they might have a volume issue rather soon as well (at this point there are 144 loans listed on primary market).

Overall, I hope for very quick improvements for the web, proper reporting would be step number 1, since  I created a business account and require usable documentation. Secondly, adding on other originators would likely increase their trustworthiness a fair bit as well. Interesting times at least, seeing Latvians claim large parts of the Baltic P2P investors’ money.

Is a 10% return too low?

Loans having buyback has caused interesting moves on the P2P market. Many investors flocked to the idea of having more guarantees, with rather solid returns – it was possible to earn 13-15% annualized with buyback guaranteed loans. However, the interest rates of loans have come down and I’ve witnessed several discussions on how the lower interest rates are not good enough anymore.


Twino announced that they are reducing interest across the board to 10% per annum to align better with the corporate interests. Mintos interest rates have also been slowly coming down on many of the buyback guaranteed loans and is starting to average closer and closer to 10%. So, is a 10% return too low?

Comparing returns & risk to other investments

If you look at the current state of what’s happening on the markets, then 10% in comparison to that is a rather reasonable number. Stock markets are not doing particularly great, and short term reaching such returns without taking significant risk is rather impossible. Looking at real estate, you can get returns that are higher, but that includes quite a lot of work on your part. If you look at passive investments, then I’d say that the 10% number when looking at the effort you have to put into the investment is rather reasonable.

Another issue, however, is the risks involved with investing. I heard more than one person say that with the lower rate the risk is no longer worth it. I’d actually be super interested to read any kind of actual risk analysis on this, because one thing that people seem to not keep in mind is that by reducing the interest rate the companies that offer it actually lessen the financial strain they place on themselves, making it less likely that they will fold in the future. So to some extent bringing the interests down actually also reduces the risk levels.

The third thing to keep in mind is the issue of supply and demand. Paying higher interest rates than strictly necessary is just bad business. It’s unlikely that any of the companies that have reduced the interest rates haven’t done serious analysis into the amount of money available on the market. In many countries people/investors are sitting on unprecedented amounts of money, meaning that there isn’t an issue of having enough supply. With other investments not offering similar returns with similar effort, enough people will gravitate towards P2P loans.

Will the rates drop further?

Seeing how some loans on the market in Mintos for example are already below 10% (and I know so are some Viventor loans), I’d actually dare say that there is still room for buyback rates to drop, because enough investors will appreciate the lack of default risk that they would have to carry otherwise. I don’t see the rates dropping much further, but clearly there is still enough money to go around.

Another thing that might influence the rates is also the inclusion of new investors. As buyback guaranteed loans get more and more attention more investors could enter the market driving the rates down even further. Those who remember what the market was like when Bondora bids worked by investors underbidding one another can easily imagine that driving rates to the ground is a rather viable option for those who earn returns more from the volume of their investments than the return rate.


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


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.