Let’s start with the obvious lesson from 2020: forget all expectations and remember that nothing is achieved without hard work and proper due diligence. If you are looking to P2P Lending investments as a passive investment, you are wrong. In this post I want to share how I see my P2P lending portfolio evolving in the post-COVID era. Please take into consideration that no information contained here constitutes tax, legal, insurance or investment advice.
My P2P Lending Investment Mistakes
If you follow the blog you already know that in a combination of greed and sheer stupidity, during 2019 I decided to follow a P2P investment approach devoted to maximize loan returns, with focus on high risk P2B platforms, that mostly were revealed as fraudulent scams. Clearly diversification didn’t work for me, and with COVID-19 a number of other P2P platforms showed additional risks. Mintos is a very good example of that. But the reality is that I wouldn’t be investing in P2P loans unless I thought it’s a simple, viable and profitable asset class, with a great future ahead but I’m critically aware of the industry risks, frauds and lack of regulation that make the management of this asset a complex activity.
Shifting Focus from P2P Platforms to Loan Originators
Since P2P lending is not passive, and proper due diligence is required to build wealth through this asset class, I started looking more and more to the loan originators instead of simply the P2P platforms. Some of the loan originators that you can independently assess loan volumes, audited financial reports, profit, existing capital, and timely projections are described below, based on the P2P platforms that make them available.
Mintos
PeerBerry
Peerberry was founded by the the Aventus Group to help it fund its growing loan portfolio. Since then Peerberry has changed ownership and has added other lenders to its platform but Aventus remains the lending group within the P2P platform.
Aventus Group
Lendermarket
Lendermarket is a P2P investment site that was established in 2019 to fund the loans of international lending group Creditstar.
Creditstar Group
Note: Kristaps Mors published an article questioning the Creditstar auditor quality. Please take this information into consideration before investing.
Moncera
Moncera is a P2P platform that offers loans from Placet Group. Placet Group is among the most stable and profitable loan originators in the market.
Placet Group
Robocash
Robocash is part of the Robocash group that is profitable. The platform loan volumes have been growing strongly during 2017. Investors have reported good experiences to date.
Robocash Group
Kviku Finance
Kviku Finance is a recent P2P platform that is part of the Kviku Group that since 2013 has been offering consumer loans in Russia, Kazakhstan, Ukraine, Spain, Poland, and the Philippines.
Kviku Group
Conclusions
Spending time assessing Loan Originators quality does not diminish the need to keep close control over P2P platform performance. The COVID-19 period is showing all the importance of both having a good P2P investment experience, that is manage by the platform, but in the end of the day we need to avoid any problems with loan payments, no delays with withdrawals, or unexpected increases in default rates. This is when investing following a Loan Originator analysis base can make difference.
What is your take on this approach? Any Loan Originators missing in the list? Let me know.
P2P Investments Options
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