Baltic

Estonia, Latvia, Lithuania

My Finbee P2P Lending Portfolio after 8 Months

wiseclerk 8 Comments

In August 2015 the new p2p lending marketplace Finbee launched in Lithuania. Finbee finances small unsecured consumer loans. The CEO told me that they meet all borrowers in person and that these are mostly looking to refinance other debts at higher rates, which they have paid in accordance to schedules punctually over months or years. Typical interest rates for investors are in the range of 20% to 32%. The platform is still very young, but recently loan volume picked up and Finbee crossed the milestone of 1M Euro loans financed since launch.

I started small and deposited only 50 Euro right after launch to test it and gain first hand experiences. Only two months ago I started depositing more and right now my deposited total amount is about 1,550 Euro.

The auction mechanism

Finbee lists all loan request and investors can bid either manually or via autoinvest (autolend). There is an auction period for each loan with investors underbidding each others in an reverse auction, meaning the interest rate will sink once the loan is filled. A pecularity of Finbee is, that each investor with a winning bid gets the individual interest rate he made the bid on, meaning there is no uniform lending rate for investors in the same loan (this is different from the way most other platforms handle reverse auctions, where usually all investors with winning bids get the same rate which is set at the highest winning rate at auction closing).

Finbee Loans
Loan requests at Finbee. The ones with the green button at right are open for bidding. Auction periods are initially set to 14 days but then reduced to 48 hours, once the loan is 100% filled by bids.

This auction mechanism often causes a mad rush in the last 5 minutes. Lots of bids are made right before closing and it is usual that the top closing interest rate drops 3-5% in these last minutes.

This is aided by a mechanism abbreviated ‘ARBU’ (Automated Response to Bumbed-off Underbids). Investors can enable ARBU to make lower bids on their behalf, once their original bid is outbid. The mechanism is quite configurable in selectable settings, but the catch is that it will not make more than 5 lower bids per loan. This led me to do quite a bid of configuring and experimenting with my settings. I also changed my strategy from multiple smaller bids on the same loan (e.g. 5 bids at 20 Euro), to now just 1 or 2 bids per loan at 30 to 35 Euro.

My strategy

In the first months I have just observed what is happening on the Finbee marketplace. Since February I go for the riskiest loans, risk category ‘D’ and sometimes ‘C’ with the highest loan amounts and the highest interest rates. I do all bids manually and have ARBU enabled with my settings, which I tweaked quite a bit. If I have multiple successful bids in one loan I try to sell some of the loan parts on the secondary market at premium in order to reduce the concentration. On the secondary market only current loans, that have made at least one repayment, can be sold. I also try to sell my late loans on the secondary market, but that means I have to wait for them to turn current again before I can sell them. Continue reading →

International P2P Lending Statistics – March 2016

wiseclerk 1 Comment
The following table lists the loan originations of p2p lending marketplaces in March. Funding Circle leads ahead of Ratesetter and Zopa. I added MoneyThing to the list. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms.
Investors living in markets with no or limited choice of local p2p lending services can check this list of marketplaces open to international investors. Investors can also check how to make use of current p2p lending cashback offers available.
Last month these companies crossed significant milestones:
P2P Lending Statistic 03/2016
Table: P2P Lending Volumes in March 2016. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.
Notice to p2p lending services not listed: Continue reading →

Live Stream of the P2P lending Conference in Vilnius presented by Savy*

Sponsored Post

The first P2P lending platform in Lithuania, SAVY, is organizing their second annual P2P lending conference on the 23rd of March in Vilnius, Lithuania. Guest speakers from all over the world, including the co-founder of LendIt Conference Jason Jones and the leaders of the top Baltic P2P lending companies – Mintos, Bondora and SAVY, amongst others, will engage in a number of panel discussions and presentations.

The conference will be focused on the possibilities of P2P lending and Crowdfunding, while the participants will touch some important topics related to the prospects, challenges and trends for Alternative Financing on a global scale and in the Baltic region specifically, as it offers a considerably higher return on investments than most Western European countries.

https://www.youtube.com/watch?v=B29ozFU0CQE

Live stream of conference starting at 13:30 GMT+2 on March, 23rd

*Sponsored post: This post was paid for by Savy.lt, the conference organizer. I rarely publish sponsored posts, but in this case I thought the content is a very interesting fit for the blog audience.

Twino to Remove Currency Risk for UK Investors

wiseclerk

Latvian p2p lending marketplace Twino today announced plans to shield UK investors using the platform from currency risks. So far all investments on the platform are conducted in Euro. Twino already takes the currency risk of Polish Zloty, Danish Krone or Georgian Lari versus the Euro. Now it plans to make the platform more attractive for investors holding their assets in GBP. The announcement reads:

One of TWINO promises is that we protect investors from currency risk. Thus, while investing on TWINO you don’t need to worry about Polish Zloty, Danish Krone or Georgian Lari appreciating against euro, as every transaction on the platform is performed in EUR.

However, investors from the UK still face the risk of EUR appreciating against GBP, which might lower their returns. Therefore, next week we are planning to launch a major upgrade that will remove the currency risk for investors, who hold their investable assets in British Pounds, equalizing the benefits of investing on TWINO with Eurozone investors.

The functionality will allow investors to choose the currency that they want to invest in (either EUR or GBP), and every transaction on TWINO will be processed in the chosen currency (including deposits, withdrawals, investments, repayments, etc.).

We will provide a further notice when the new functionality launches, and will be reaching out to existing investors, asking if they want to convert their TWINO accounts to GBP.

We are glad to be the first platform in Continental Europe to provide such functionality and hope some of you will benefit from it!

The Twino CEO Jevgenijs Kazanins indicated that Twino is hedging the currency risk, an action that is possible for a platform with volume but not available or viable for individual retail investors, would they strive to do it on their own.

Bondora Enhances Reporting Feature

wiseclerk

Bondora logoAfter what felt like a drought period, Bondora seems to focus again on working to improve functionality for investors. This week they released a new version of the cash flow report, with the following upgrades:

1) Historic payments will be split between current loans and loans in default as per the status active at the date of the payment
2) We will introduce day-level information that shows cash flow categorized per each investment
3) Forecast settings can be defined also for historic schedules so you can use cash flow based adjustments for predicting future payments
4) You can adjust your net return calculation based on the probability settings defined in the cash flow report
5) Cash flow report will show the opening cash balance and closing cash balance for each period
6) You will be able to define which data series to show on the chart
7) Historic planned schedules will be split between current loans and loans in default
8) Cash flow table results can be exported to Excel
9) You will be able to define which data series to show in the cash flow table
10) Live data from the current day (currently under Account statement for the last 24 hours) will be incorporated into the cash flow report
11) All data is in one table
12) You will be also able to filter to a specific loan in the Investments list straight through the cash flow report so you can quickly take loans off secondary market or put them there based on the information visible in the cash flow report

I have experimented a bit and like the way this report page gives me a quick visual representation of what is happing in my account and that it is very customisable. Plus it lets me set my personal values for expected loss rates and use that to calculate net return displayed in the dashboard. Read also what investor Oktaeder blogged about this feature.

If you are not investing at Bondora, this Bondora video will give you a good overview of the functionality.

International P2P Lending Marketplace List – Loan Volumes February 2016

wiseclerk 1 Comment
The following table lists the loan originations for February. Funding Circle leads ahead of Zopa and Ratesetter. I added Harmoney and Crowdproperty to the list. I do monitor development of p2p lending statistics for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms.
Investors living in markets with no or limited choice of local p2p lending services can check this list of marketplaces open to international investors. Investors can also check how to make use of current p2p lending cashback offers available.
Last month these companies crossed significant milestones:
  • Pret d’Union reached 250M EUR since launch
  • Harmoney crossed 200M $ since launch
  • Smava reached 100M EUR (counting p2p loans only, not the brokerage model for banks) since launch
P2P Lending Volume February 2016
Table: P2P Lending Volumes in February 2016. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.
Notice to p2p lending services not listed: Continue reading →