P2P Loans Monthly Review - October 2020

Im P2P lending monthly review October 2020, I look at the income and transactions in as usual my P2P portfolio and shed light on the most important developments and updates of individual P2P platforms.

This includes the introduction of the Mintos Risk Score in October 2020, the new record results from EstateGuru and the termination of the first business loan from VIAINVEST.

My P2P portfolio in October 2020

Here is an overview of how my P2P portfolio developed in October 2020.

revenue

In October 2020, I was able to record interest income of EUR 77.49. The downward trend of the last few months (September 2020: second lowest income in three years) has thus temporarily stopped. My negative net interest received at Bondora Portfolio Pro were similarly high (-122.03 euros), but there was very good income last month EstateGuru (35.36 euros; best value in two years) and due Network recorded (33.39 euros).

Transactions

In October 2020 I made some transactions. At Bondora 2,000 euros were withdrawn at Mintos and NEO Finance 1,000 euros each. For the time being, there was only limited reallocation. 1,000 are now additionally with EstateGuru added. Another 1,000 euros are to be invested on a new P2P platform by the end of the year.

P2P Portfolio

The value of my P2P portfolio has decreased from 35,622 euros to 32,707 euros. Looking ahead, I currently assume that this value will level off between 30,000 and 35,000 euros in the next few months.

Bondora

At Bondora there were no major changes or other news in October. New lending in Spain and Finland is still “on hold”, the EUR 1,000 limit at Go & Grow is still active and the credit volume was around EUR 3 million, at the level of the last few months.

After celebrating my three-year anniversary with Bondora in October, I took a look at my performance at Bondora Portfolio and saw how my loan portfolio, which had been relaxed since March 2019, has developed. Here you can look again at the answer:

Additional content I’ve published about Bondora:

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NEO Finance

NEO Finance reached a new milestone in October 2020 and, for the first time in its history, financed more than EUR 2 million in Lithuanian consumer loans per month. After the second-best value was only reached in August 2020 (1.79 million euros), there is a clear upward trend here. Let’s hope that the performance can keep up consistently in this difficult environment.

In addition to a few administrative issues in the previous month, NEO Finance has now probably put its marketing focus on selling itself as an extremely secure P2P platform. From my point of view: Yes, NEO Finance currently offers some advantages in terms of security that are missing on other Baltic P2P platforms. This includes the regulated environment for P2P loans, the associated transparency and the Electronic Money Institution license. All good and valid points.

Nevertheless, I would be happy if NEO Finance would instead take care of the topics that have been on the agenda for a long time and which I believe are overdue. This clearly includes the implementation of a German interface, a simplification of the investment experience on the platform and a solution to the withholding tax problem for interest income. All topics are well known. When does NEO Finance react?

Further content that I have published via NEO Finance:

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Mintos

At Mintos The first Ask Mintos Anything session without Martins Sulte took place at the end of October. The topic: Status update on the loans in recovery (funds in recovery). Even if I am personally affected by it, I am not following the topic as closely. For a long time now, the effort has not paid off with the yield and I don’t feel like being in a notoriously bad mood.

But what I was able to take with me: There are currently around 100 million euros in loans in the process of being recovered. This corresponds to 16 percent of the currently outstanding loan portfolio. Any questions?

Minto’s CEO Martins Sulte recently said that he expects to regain around 50 percent of these loans over a longer and unspecified period of time. Let’s wait and see what else is going on on this front and what developments there will be. At Capital Service in particular, I’m looking forward to the further development, as I still have just under 400 euros open myself.

Otherwise, Mintos announced the introduction of a new scoring model for lenders – the Mintos Risk Score. Instead of letters, lenders are now rated in four categories on a scale from 1 to 10. The criteria include:

Performance of the loan portfolio,
Efficiency of the credit service provider,
Repurchase strength and
Cooperation structure

Whether the new rating will bring more light into the dark or whether it is just about old wine in new bottles acts will show with time. Personally, I am rather skeptical about this, but with increasing duration and thousands of data points, Mintos should now hopefully have the ability to present the risks per lender for investors more accurately and precisely.

Additional content that I’ve published through Mintos:

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due Network

There was some good news in October 2020 due Network regarding the acquisition of new lenders. After not being able to close the bag with new cooperation partners in the last few months, we are now with us Evergreen Capital (Estonia) and CubeFunder (Great Britain) two new lenders have been added to the platform.

Both lenders currently offer assets with an interest rate of 10 percent, which is slightly higher than usual for Debitum standards. At CubeFunder there is also a 1% cashback if you invest in assets worth +500 euros.

In addition, Debitum is now offering a new investment structure with Triple Dragon, a UK lender. With the Implementation of a SPV (Special Purpose Vehicle) a new subsidiary has been established, giving Debitum more control over the management of the asset. Quasi a kind of further safety buffer for investors. A further 4 million euros in Triple Dragon assets are to be added to the platform in the coming weeks and months.

Further content that I have published via Debitum Network:

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VIAINVEST

With EUR 4.57 million, VIAINVEST, in October 2020, financed the most loans since February 2020 (5.77 million euros). The number of loans made available is now 1.5 million euros more than in the previous month. A sign that we are now regaining more confidence in the overall economic development? Let’s see how sustainable the trend will be in the next few months.

In any case, it was interesting that VIAINVEST received its first business loan in the previous month – namely the student residence project in Barcelona – terminated prematurely. The reason given was the uncertainty in the Spanish real estate sector. The student residence itself will continue to be built, but with other sources of funding. In addition to the repayment, VIAINVEST investors also receive the promised 8% interest.

For me, this allows for two conclusions. First: VIAINVEST is not prepared to accept major collateral damage and is therefore (as in the last few months) very consistent in its approach. Second: Business loans are a different field than consumer loans and therefore also involve a different level of risk. Perhaps one should therefore continue to focus on one’s core business in the future instead of diluting one’s clear focus.

Further content that I have published via VIAINVEST:

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EstateGuru

EstateGuru remains one of the really big winners for me this year 2020. After shaking off the numbers in April, the Estonian real estate platform has shown impressive growth since then and has been very well received by investors. The record levels of newly financed loan volumes in August and September were followed by a further increase of 50 percent in October.

Of the 15.2 million euros, more than half (7.9 million euros) went into Lithuanian real estate financing, the smallest market for EstateGuru in the Baltic to date.

The outstanding loan portfolio has thus grown to just under EUR 114 million. The rate of the loans in arrears is now 6.9 percent (+1.5 percent compared to the previous month).

If you want, you can now watch my interview with EstateGuru Community Manager Kadri Akk, where I asked your most important questions:

Further content that I have published via EstateGuru:

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P2P Loans Monthly Review – October 2020