When considering the impacts of COVID-19 in the P2P industry, one clearly unintentional result of so many being mandated to stay at home was the increase in the savings rate for most families able to keep their jobs. At first, the growing activity of new investors in Robo.cash may seem paradoxical. However, most P2P lending investors work in the IT field, and staying at home allowed them to find new investment opportunities, and spend more time managing their assets.
Robo.cash: Platform Status Update
Robo.cash is among the P2P platforms capable of building a community of investors that allowed them to overcome the COVID-19 period and remain strong. Like PeerBerry, Robo.cash was able to combine financial transparency, a stable presence of the CEO in communication with investors, and operational capacity to deliver value to its ecosystem.
“We hope that the attitude of investors towards the P2P segment will not significantly change during 2020 despite the current situation in the markets. It is important, however, to choose a financially sustainable company with a strong track record and strict borrower scoring policy to invest in.”Sergey Sedov, CEO of Robocash Group
The Robo.cash approach to managing risk was based on local market conditions. To keep stability in Kazakhstan, Robo.cash have significantly reduced the online lending volumes and suspended the offline issuance, as well as cut the operating costs. In Spain, Robo.cash offered special conditions for prolongations on their own initiative from the first day of quarantine (since March 16). This measure allowed borrowers not to overdue their payments and extend the loan term instead. In Vietnam and Singapore, Robo.cash reported that there have been no changes related to the pandemic in the region, which could affect their business.
Overall, Robo.cash has kept a strong financial state amid the pandemic outbreak by reducing fixed costs by 27%, and variable costs by 40%. And by tightening of scoring that resulted in lower approval rates. In Spain, it went down from 46.1% in March to 38.1% in April, in Kazakhstan from 42.7% to 11.8%.
The platform also reported that they have plans based on three scenarios of its performance under different conditions. Even in the worst-case scenario, Robo.cash net profit is expected to reach $10.3 M.
Robo.cash: Relevant Changes
Among the answers from Robo.cash to the existing market conditions there are two in particular with significant impact for investors: the introduction of a secondary market for longer-term loans, and the raise of the individual investor investment limit to €180,000 per year.
Now it is possible to sell and buy loans with the maturity of one year using this feature at no additional costs or fees for both parties. In order to sell a loan on the secondary market you should own it for at least 6 months and if nobody purchased your loan within 14 days, Robo.cash will buy it from you on day 15.
Also relevant, users of Robo.cash can now invest up to €15,000 a month and €180,000 a year. The reasons for the previous limitations were associated to regulatory aspects that only now the platform was able to answer.
All these changes go in the right direction, and show a clear process to manage risk and face a ever changing market. I will probably reopen my investments in Robo.cash when conditions allow.
What do you think of Robo.cash?
After closing my position last year, Robo.cash opened new markets, published financial reports and engaged in better communication with investors. I’m considering reopening my account. What is your personal opinion on the future of the platform? Will you decide to invest or avoid it? Why? It will be very interesting to learn your opinion on this topic.