May has been a good month, although the interest rate has dropped half a point compared to April levels, i.e. 7.1% (compared to 7.6%). The Real Estate Crowdfunding platforms have improved their interest rate compared to April, up to 3.4%, unlike P2P Crowdlending platforms and P2B crowdlending that have fallen to 11.4% and 3.4%, respectively.
Main news on my portfolio
The main News of the month can be summarized as follows:
- In May, I have started to invest in Reinvest24
- In April, I started investing in Kuetzal and Crowdestor
- In February, I started investing in WhiskyInvestDirect, a very innovative platform to invest in Scotch whiskey in the process maturation. In a couple of months I will present my assessment and record technique.
- Soon I will add the technical cards for Neo Finance and Twino, where I've been investing for seven months now. This month, I added Twino to my monthly analysis.
- I increased my positions in Mintos, Linked Finance, October, Bulkestate, Kuetzal, Crowdestor and Housers.
- The best platforms in terms of XIRR are 1) real estate: Bricks & People (now operating through the SociosInversores.com platform) and Estateguru; 2) P2B: Envestio; and 3) P2P: Finbee, Grupeer and Swaper.
- The best returns for the month were 1) real estate: CrowdEstate and Bulkestate; 2) P2B: Envestio; and 3) P2P: Finbee, Twino and Fast Invest.
- For Mintos, I present the combined yields (all currencies, taking into account the exchange rate), and for each currency separately (without applying the exchange rate).
- To compare all platforms, see my Comparator.
- The gray shading indicates inflated returns due to specific promotions, while the yellow shading shows that the returns are likely to be lower due to unpaid or delayed projects without a final decision.
All interests are calculated before deducting taxes.
As for delays and defaults, to highlight:
- Worrying situation in Housers, with a default and eight delayed projects.
- Also very worrying is the situation in Flender with five defaults
- Brickowner accumulates its first two delays.
- Delays in Estateguru increase from 5% to 7.4%.
- Linked Finance increases slightly to three defaults and five delayed projects.
- Delays and defaults of Finbee fall within the expected, being a platform without Buyback. The case of Fellow Finance is a bit more worrying, given that the defaults are not compensated so far with the profitability of the active loans.
- The "delays" of real estate platforms as Inveslar are not surprising either - property sales take time and so far delays are only a couple of months late. In the case of Privalore starts to be worrisome since they are already delayed for several months and affect 3 of my 6 active investments.
- CrowdEstate does not allow to easily check for delays. There are some, but it is difficult to define how many unless one consults each project one by one.
- To compare all platforms, see my Comparator.
Variation in the number of active projects from last month; I only include platforms without Buyback; Green if the parameters (delays and unpaid) have improved compared to last month and red if they have worsened.
In Brickowner, since all the investments are long-term and paid in full at the end of the project, my profitability remains at zero (since I started operating with the platform in May 2018). In April, I experienced the first two delays.
In Bulkestate, being all long-term investments and paying in full at the end of the project, I had no returns until December, when my first two projects ended. In May, there were two additional investment projects successfully repaid earlier than expected (Midia Grand Resort and Zantes Street, which were financed in June 2018).
The returns offered are excellent (always above 13%) and historically there is a 0% of defaults, so my strategy is continuing to invest in all new projects. The platform, which isn't usually too active, has launched four new projects in April. As a result, I increased my position 15.7% last month. Hopefully this trend will continue.
In May, I still couldn't reinvest all the money I have in my portfolio, so the yields have decreased compared to February, when I reached the peak of profitability since I use the platform. The net annual return offered by CrowdEstate, taking into account only the returns of projects already reimbursed (21), is 14.0%. Some payments are delayed, but they end up arriving (plus a compensation for the delay).
My strategy is to continue investing in each new project, except those funded in several stages ( "Multiple rounds investing"), as I believe it goes against the principle of diversification. Basically it would mean investing several times on the same project.
In February, CrowdEstate reached 28,200 investors, 140 projects, 58 million raised and a 19.2% historical return.
In Estateguru, the net annual return offered by the platform, taking into account only the returns of my projects already reimbursed, amounts to an impressive 14.5%. In Estateguru, delays remain at around 5% of the loans, i.e. 7.4%, and the defaults fall from two to just one.
My strategy is still to invest in each new project, except in those funded through several tiers (in which I only I invest in one, usually the first, of the tiers).
In May, EstateGuru announced that investors have provided more than €113 million to Baltic businesses. Over 23,000 investors have joined the EstateGuru platform. More than €6.8 million interest earned by investors. Also, the historical LTV for all funded loans remains under 58%, showing the conservative nature of our EstateGuru's management.
The situation is still worrying in Housers, with one defaulted project and eight delays, especially in fixed rate opportunities. Almost all of those that ended in the last few months ended up being delayed. I have decided to change my strategy: reduce my investment in fixed type projects to just 100 EUR per investment, and sell them in the secondary market before they finish to avoid them getting delayed, which almost always occurs in the last payment. In addition, I have ruled out making new fund transfers into my account. The saving or investment projects that used to be paid even several months before the projected date also start to accumulate some delays, at the moment still moderate though.
In May, there were changes in the shareholding and administrators of three promoters that control 7 of my active projects (BREDA, CERTOSA, DONADONI, MERANO, PALAZZO PITTI, SAN GALLO and SEMPIONE). The management of the purchase of these companies and taking control of them has taken a few months, resulting in projects being delayed in their payments. Some of the payments have already taken place in May and the others should follow in the coming days.
In May, Housers has launched a new system to rate projects designed by Silva & Asociados.
In May, Housers has turned four years old. Housers finances projects in three countries (Spain, Italy and Portugal), has more than 106,000 registered users from 155 different countries. Investors have invested more than 83 million Euro in the platform and the promoters have returned more than 28 million Euro between returns and capital returns.
The return rates of Inveslar, which were around 2% in recent months, have jumped to 5.2%, thanks to the purchase and resale of a project with much discount in the secondary market. Most projects are quite long term (7 of my 16 projects are 36 or 60 months), so the benefits are mainly for rentals. In May, we have been notified of the sale of two projects.
Inveslar, like Housers, seems to have definitely shifted in terms of the type of projects offered to fixed rate mortgage loans, as opposed to the savings or investment projects they used to offer.
In April, Inveslar announced that they are in the final phase to be able to publish projects with regulatory coverage within the framework of participatory financing platforms. In order to make the technological connection to operate under regulatory coverage, it will be necessary to transfer user data to the participative financing platform under which it will operate. This fact will provide additional guarantees to users and investors. Inveslar also announces that in a couple of weeks, after a few weeks of little activity, they will be back on track with new diversified projects, both in terms of assets and geographically.
Privalore offers only investment opportunities (rehabilitation), which translates in very unreliable returns. Since over one year (March 2018), the platform offers only opportunities in Madrid, whereas previously it focused exclusively on Barcelona. The biggest downside is that four of my six active investments are quite late (two of them 7 and 9 months late), so I have decided not to invest in any new project until the delayed ones catch up.
Envestio is still the platform with the best return rate (18.5%!). To take into account that almost all the new opportunities that are appearing, are in fact new tiers of financing of the same project (up to thirteen tiers sometimes), so investing in them, does not increase the diversification. With the return rates offered and Buyback (!), I intend to increase my position in the coming months (hoping that the offer will increase).
The biggest drawback is that the success of Envestio translates in new opportunities being sold out in a matter of minutes. So I have missed almost all the new projects in May. For this reason, I accumulate almost 30% of CashDrag, which is having a very negative effect on profitability ("just" 13.4% in May). It seems that Envestio is considering offering AutoInvest in the coming months. It would be a very positive change. If they also increase the offer of projects, Envestio will once again become one of my favorite platforms.
There are already five defaults in Flender. The defaults are not yet recorded as losses. We will still have to wait (probably) several months before knowing how they resolve. Flender has started legal activities to recover them (estimated at a 35% probability). I understand that it falls within the norm, although we are already talking about a default rate of 7.4%, the highest of all platforms, not counting P2P platforms without Buyback.
The Irish platform is the most active by far of all P2B platforms I use. Yields have been increasing progressively to stabilize around 8% in recent months. It is becoming one of my favorite platforms. Only 3 defaults (out of 488 projects!) and 6 projects with delays. I intend to continue investing in all new projects. In fact, I increased my positions by 5.3% since last month.
In April, Linked Financed reported that during the first quarter of 2019, the platform lent more than €11.3 million to SMEs across Ireland. Total loan origination is now above €92 million, across more than 2,000 loans. Also, there was a reduction in the platform-wide default rate, which fell to 1.05%.
The big problem of October to date, are the three projects in the process of judicial recovery (2.3% of the total), to which we must add three other delayed projects that seem to be following the same path. The result is a huge downturn in May profitability. Although this can be considered normal in this type of platforms, these incidents have made my IRR slightly negative after over one year of investing in the platform (-0.9% to be precise). On a positive note, to clarify that, unlike other platforms, October provisions 100% of the amount (since the judicial recovery processes take a long time and the result is unknown). Provisions are potential losses and over time some or all of the amount due may be recovered. The rest of the platforms do not consider such losses until the judicial recovery process ends. Hopefully there will be no more setbacks and my XIRR will gradually recover.
I have decided to stop making new contributions until I see how the defaults and delays evolve, and returns return to the expected levels. I will just reinvest the principal and interests returned.
The Euro amount of each project has increased, so now, despite the absence of AutoInvest, there is more time to invest.
In April, October has improved the monitoring of delinquent projects. Now, all the information (date of the incidence of payment, cause, number of installments in default ...) can be all found in the same place.
In Dofinanceafter 6-7 months with loans at 9% maximum, loans at 11% are back since April. VIP Dofinance investors can get up to 12% (1% extra) during the first 90 days (10% VIP status) using my promotional LINK . In my case, unfortunately, I will still have to wait a little over three months for my current investments at 9% to end to renew at 11%.
Dofinance represents the maximum of simplicity in the way it operates. Once the target profitability and term have been chosen, our inputs end and there is nothing left to do but wait.
Dofinance in numbers: At the end of 2018, there were 3,514 registered clients, 40% of German investors, followed by Spain (22%), Italy (11%) and the Netherlands (10%). The average investment amount was 2,695 euros and an average period of 6.8 months investment, with a 9% automatic investment as the most popular investment program.
Throughout 2018, the average interest rate grew from 12.78% to 14.3%. Accumulated turnover increased from € 5.2 million to € 73 million (22.05/2019). The volume of investment grew from € 1.4 million in 2017 to € 20 (by 22/05/18). Now Fast Invest has over 30,000 client (15/02/2019).
Very disappointing results for the moment. Interest rates are really attractive (up to 55%!), but without Buyback, so I've been a bit more cautious investing than with other platforms. As of today, the many defaults do not compensate for the higher returns offered, leaving me at the end with negative returns, at least for now. As to my strategyas they offer no Buyback, I have invested only in loans with interest rates above 48% and always the minimal amount, which in the case of Fellow Finance is quite high (25 EUR). I must say that there are other less risky loans, which surely would have resulted in a better performance than my (so far) failed investment strategy. It is a complex platform, and customer service is not particularly good, so I have many doubts about how it works. Surely studying it further can result in better results. I'll keep playing around without increasing my position hoping to be able to offer a more positive review in the coming months.
In April, Fellow Finance investors financed a record amount of loans worth approximately 20.9 million Euro. The accumulated volume of loans grew more than 435 million Euro and the total number of investors increased to 12 368.
Although yields are excellent time (TIR 16.8%), being a platform without Buyback, I am still awaiting the evolving platform medium-long term once the (many) defaults stabilize. Overdue and unpaid loans account for 15.3% and 15.6% of my portfolio, respectively. My AutoInvest selects only loans above 18%. For me it makes no sense to invest in loans without Buyback below that figure, considering there are other platforms that offer up to 14-15% with Buyback. For the moment my strategy is to keep my position (reinvesting profits). In a couple of months, once I see at what levels returns stabilize, I will decide whether to increase my position or start withdrawing funds.
In February, FinBee annouced their recovery rates on defaulted loans: 56.15% of the invested money from the insolvent clients from 2016, and 40.21% from 2017 (see graph above). The collection process is not over, so these indicators should continue to grow in the future. This piece of information was missing (in fact I asked about it just few weeks ago), which will be key to evaluate what to expect in the coming months and decide my future investment strategy. However, for investments after March, FinBee announced that they will compensate just 30% of defaulted loans.
Grupeer is one of my favorite platforms, with consistent results and returns always between 13 and 15%, although the average interest of loans has decreased and we no longer see loans at 14 or 15% as we used to.
As of 10th of January 2019, the owner of Grupeer platform is Grupeer Limited, which is registered and based in Ireland (instead of Alla Kisika).
In April, Grupeer updated its AutoInvest strategy, adding a new feature for selecting CashBack offers. By clicking the “Including CashBack” option, the Auto-invest algorithm will search the projects matching your interest rate criteria taking into account the available CashBack offers to invest your money into. For example, if you set your minimal interest rate as 14% and there is a CashBack offer 1% on a project yielding 13%, the Auto-invest strategy will treat this project as 14% (13%+1%) and will invest your money in this deal, if the “Including CashBack” option is chosen.
In April, two new loan originators entered Grupeer:
- PlanetaCash is a Russia-based micro lending company founded in 2018, focusing solely on online business loans from 30 to 400 Euro, with BuyBack Guarantee, interest rate of 13 %, and a term of 14 months.
- Bosak Microfinance Bank is a Nigerian company offering micro loans for people living close to poverty line. Founded in December 2009, Bosak Business loans come with a BuyBack Guarantee, 11 % interest rate, and a term of 4 months.
For June, Grupeer has announced three interesting CashBack campaigns:
- Invest in any PlanetaCash loans in June and get 1% CashBack for all investments you make in these projects.
- Invest in any Classical Finsputnik Platforma projects in June and get 1% instant CashBack for all investments you make in these projects.
- By investing over €5000 in any development project in June, you will get a 1% CashBack on the amount that is in excess of €5000.
When presenting my results, Mintos is more complicated since I invest in five different currencies. The graph shows in red the combined results of the platform (converting each currency to EUR according to the exchange rate of each month). This means that monthly profitability is very susceptible to variations in exchange rates.
Since October I invest manually, both in the primary and secondary markets.
The maximum return rates offered by loans in EUR have increased to 15% since April. Mintos reports that, during the last 10 weeks, the average interest rate for loans in EUR has grown by ~2%, resulting in the increase of the average interest rate on the marketplace from 11% to 13%. On top of that, there will be a Cash Back campaign (1%) during the month of June. In view of these unbeatable returns (offered by 6-7 originators and with Buyback!), I have decided to increase my investment an extra 77.9% in May!
The best IRRs (at the moment) are my investments in Kazakh tenges, Georgian laris and Russian rubles (16-7-16.8%).
The interest offered by loans in Tenges (KAZ) and rubles (RUB) remain stable between 17 and 19%. Usually there are always available both in the primary and secondary markets.
The loans in sterling pounds (GBP) and Georgian laris (GEL), are scarce lately in both the primary and secondary market, but 2-3 times a month, new loans are offered, so the problem of Cash Drag is not important.
- Kredit Pintar, the top consumer lending app in South East Asia, launched in September 2017, which issues on a daily basis more than 12,000 short-term consumer loans in Indonesia (50 EUR on average, net annualized returns of up to 12% and Buyback).
- JSC MFC Mikro Kapital (Mikro Kapital) allows to invest in business loans from the Russian Federation in both Euro and rubles, with average net annual returns of up to 9% for EUR loans and 15% for RUB loans and Buyback guarantee. Mintos rating is A-.
Others Originators already present in MINTOS expanded its product offering in April:
- IuteCredit has expanded its presence on the market place by launching Moldova-issued car loans in addition to the personal loans already offered for investment in the country. They are loans listed in EUR issued in Moldova for an average of EUR 4 000, at 11% interest rate; and Buyback guarantee.
- Mogo, the largest non-bank car loan financier in the Baltics, has placed its Armenia-issued car loans with expected net annual returns of up to 12%.
- ID Finance has expanded its presence on the Mintos marketplace with the launch of short-term loans from its lending business in Mexico. You can earn net annual returns of up to 10% for its loans up to USD 600 listed in Euro (EUR) and up to 18% for its loans in Mexican pesos (MXN), all with Buyback guarantee.
In May, Mexican loan originator Dineria.mx began operating in Mintos offering loans with Buyback guarantee and a net annual return of up to 14% in EUR and 18% in MXN. Since 2016, the company has issued more than 55,000 loans for a value of EUR 6.9 million.
Creamfinance, a loan originator which has been part of the Mintos family since 2015 has launched personal loans issued in Poland on the marketplace under the brand Lendon. Since its foundation in 2013, the company has distributed 754,045 loans worth around EUR 285 million. As of April 2019 Creamfinance Poland had a net loan portfolio of EUR 21 million.
Also since May, Mogo Finance S.A., the ultimate parent company of the Mogo Group companies operating on the marketplace, now provides a group guarantee for all Mogo loans on Mintos. This puts an extra layer of risk mitigation in place, by reducing the risk of the separate Mogo entities not being able to fulfil their obligations to Mintos investors. As a result, the rating to all Mogo group entities has been changed to A.
Mintos has announced that in the future, they will offer personal accounts (with IBAN) and debit cards. The personal account can be used to make and receive payments around the world, or receive the salary directly into the account by Mintos. But this was announced months ago and there has been no further update since.
In April, Mintos launched the Mintos Impact Fund. The first initiative will be cleaning up the Baltic Sea together with Pasaules Dabas Fonds (associated partner of WWF) and WWF Deutschland, where together with investors, Mintos will crowdfund EUR 100 000 to donate to the project.
Mintos has exceeded 2 billion Euro in investments (April 2019) to become the largest market for investment in loans in Europe (according to P2P-Banking), they have hired 28 new workers to almost double their workforce, they have reached 124,872 investors ( April 2018), have raised 5 million euros in a round of financing, have incorporated 31 new originators from 13 new countries, and investors have received 38.8 million in interest (April 2018).
Without offering spectacular returns, Peerberry compensates it with an amazing regularity (return rates always between 11 and 12%), minimum follow-up needed and zero Cash Drag. I intend to keep my position as long as everything stays like this.
In February, Peerberry launched two new originators: 1) Credit7 (Aventus Group) from the Republic of Moldova and established in 2017, which is a short-term loan provider with 12% annual return; and 2) Gofingo.com.ua (the private holding company – Gofingo, LLC) from Ukraine, which offers loans in Euro with a net annual return of 12%. Peerberry offers loans from 18 originators in 8 countries.
Peerberry in figures: In March, Peerberry achieved a volume of loans of 9.2 million and reached 6,000 investors from 59 countries that can invest in Polish, Czech, Danish, Lithuanian, Ukrainian and Russian loans. Most loans last less than 40 days.
Return rates have increased since April with the payment of interest on several of the longer-term loans (180-365 days), which are paid in full at the end, so the current return rate does not reflect the real profitability of the platform ( that should be 11.8% in my case).
Robocash continues with its excellent regularity after overcoming the problems of Cash Drag of last summer. Since November, all loans are offered at 12%, compared with the previous 14%. At the moment, my strategy is to maintain my current position.
Robocash will relocate its activities to Zagreb, Croatia by March 28, 2019 in order to facilitate further dynamic growth of the platform. The only change is that Robocash will now be operating under Robocash d.o.o., a limited liability company registered in Croatia for the purpose of due regulation. There will be no changes regarding investment methods, functionality of the platform or existing interest rates.
In April, Robocash announced a Loyalty Programme for investors. Investors with ID>1,000 will receive increased interest for 3 months (from 1 September to 30 November 2019) given that they keep from 1,000 EUR on the platform from June 1, 2019 to August 31, 2019. The bonus will be accrued according to the investor’s category, which corresponds to the investor’s minimum balance as of June 1, 2019:
The first 1,000 investors who joined the platform (not my case) will receive a guaranteed bonus of 0.3% from 1 September 2019 to 31 January 2020 regardless of their balance.
I began to invest somewhat reluctantly in November 2018, in view of the negative comments about Cash Drag and low returns. However, after seven months, Twino has become one of my most profitable platforms (13.1%), thanks in part to the positive fluctuations of my investments in currencies other than Euro. If the situation continues like this, I do not rule out increasing my positions.
In May, Twino announced a weekly 1% cashback bonus by investing in the loans issued in Latvia with the Auto-Invest tool. The campaign will run from 27 May to 30 June. Currently, Latvian loans come with the interest rate of 8%, Payment Guarantee, and the term from 3 to 60 months.
End of May marked 4 years of Twino Investment platform – more than EUR 500 million worth of loans funded through the platform. Twino now is the fourth P2P lending platform in Continental Europe that has ever reached such a funding amount. Moreover, 2018 resulted as Twino’s most successful year to date with company’s net profit being EUR 3.7 million. In 2019, Twino brought Business loans (term of 3-36 months, interest rate of 8% and Payment Guarantee) and Invoice financing to the platform, allowing to further diversify.
Until now it was a platform of moderate returns with excellent regularity, without Cash Drag that required a minimum follow-up. During the last few months, on top of this, there's been a gradual improvement in the return rates, reaching values of over 13% since January (except for a brief drop in March, when I increased my positions in 9%).
Unlike other platforms, Viainvest withhold taxes. I present tax-free results to facilitate comparison.
Loan browsing filters have been upgraded. There is now an option to filter all available loans based on the remaining loan term, and from now on, the loan term will be displayed in days instead of months. This also applies to auto invest settings.
In April, Viainvest mobile app has been made available for investors to download.
The situation is similar to that of Viainvest. For the last two months, I only invest in loans at 14% (and some at 15-16%), so I hope that the monthly returns will continue to increase in the coming months.
From April, in cooperation with Spanish lenders (Twinero, Presto and Seymoure), taxes on interest earned will be withheld at source (19%), meaning that you will receive net interest. When reporting your taxes, you can generate a Tax Report under your Account Statement. The bottom line “Taxes Withheld” indicates the cumulative withheld amount for the period. This will be deducted from your total earnings and it will indicate what is the remaining gross amount you have received and on which you have to pay the taxes on.
And in May, the number of originators continued to increase to reach 18 originators in 10 countries with the addition of Digital Finance International North Macedonia (part of Digital Finance International and Finstar Financial Group). Investors will now be able to invest in installment consumer loans issued in North Macedonia under the brand name - Kreddy. Kreddy will offer its installment consumer loans with maturities from 3 to 12 months. The company will maintain 5% skin in the game stake in every single loan and start by offering 12%p.a. return.
Evolution of my positions
Regarding the evolution of my positions since January 2018 depending on the type of investment, they remain more or less constant, although in May, my investments in P2P platforms have exceeded my investments in shares and investment funds, due to the increase in my positions in Mintos.