Debitum is one of the most established platforms in the Peer-to-Peer (P2P) lending arena, forging a conduit between investors and borrowers to channel capital towards businesses. Since its inception in 2018, operating from the vibrant city of Riga, Latvia, Debitum has made significant strides. The platform has garnered a robust base of over 10,000 registered investors, and facilitated the flow of more than 74 million Euros into lucrative loans, marking its territory in the P2P lending landscape.

This comprehensive review aims to unpack the multifaceted aspects of Debitum, analyzing its investment potential, safety measures, and outlining how to start investing through this platform.

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Expected Returns on Debitum

The appeal of Debitum lies in its promise of substantial returns, underscored by an impressive XIRR (Internal Rate of Return) of 11.44%. A five-year track record of zero defaults highlights the platform’s adept risk management and caliber of loan originators. The experiences of many investors, including my own, reflect yields around 10%, aligning with returns from others in the sector.

Debitum‘s Safety Measures

Navigating the P2P investment world requires thoroughly evaluating platform safety. Debitum meets this need by directing investments solely into business loans, fortified with tangible collateral. This prudent focus on asset-backed lending, although slightly reducing returns, significantly lowers default risks, creating a safe environment. Debitum’s safety architecture includes a robust 90-day buyback guarantee on all loans, plus a 15% penalty on delayed repayments by loan originators. The platform’s strict 4-step due diligence process for loan originators has prevented defaults. Introducing Asset-Backed Securities (ABS) reduces the risk associated with individual loan defaults, strengthening investment security.

Two-factor authentication (2FA) is also available on Debitum, which is another sign that both the financial and technical security of the platform are being taken seriously.

A hallmark of Debitum is its regulatory adherence, epitomized by its distinction as one of only four licensed P2P platforms in Europe, operating under license No. 06.06.08.728/537. This regulatory status not only increases investor fund protection but also sustains appealing returns, instilling reliability among investors.

They dedicate an entire section of their site to explaining very clearly how they protect their investors. They call this framework “Protection Plus”.

Protection Plus: Safeguarding Your Investments on Debitum Network

Protection Plus is the three-tiered security architecture developed by Debitum to ensure the protection of investor funds. Each layer addresses different aspects of investment risk, offering a holistic safety mechanism for individuals and entities looking to invest through the Debitum platform.

1. Platform Level Protection

At the foundational level, Debitum ensures regulatory compliance and financial security. Being a licensed investment brokerage supervised by the Central Bank of Latvia, it adheres to stringent European Union regulations. This compliance instills confidence among investors about the platform’s operational legitimacy.

Additionally, Debitum has an insolvency protection policy. In the rare event of platform insolvency, investors’ funds are shielded up to €20,000 by the Investor compensation scheme authorized by the Republic of Latvia.

The third aspect of platform-level security is the segregation of investor funds. Debitum assures that all invested funds are kept separate from the company’s own financials, ensuring that the investors’ money is not used for any internal business activities or to cover Debitum’s operational costs.

2. Loan Originator Level Safeguards

The second tier addresses the risks associated with loan originators. Debitum requires originators to maintain “skin in the game,” mandating them to hold a portion of the loans on their balance sheet. This ensures they have substantial risk and incentive to oversee the loans effectively.

Moreover, Debitum enforces a rigorous due diligence process on all loan originators, which encompasses business model assessment, financial checks, and ongoing monitoring of performance.

Unique to Debitum’s platform is the “Junior share” concept, which gives loan originators a subordinate position in the cash flow waterfall, prioritizing investor claims in case of defaults or insolvencies.

Furthermore, Debitum uses co-control bank accounts for loans issued by Triple Dragon and Sandbox Funding, maintaining a tight grip on the movement of funds and the quality of the loan portfolios.

3. Underlying Asset Level Assurance

The final layer of Protection Plus is focused on the underlying assets backing the loans. Debitum pledges solid collateral which may include real estate or accrued receivables, adding an extra layer of security.

Debitum has a “Buy Back obligation” policy in place, where if a loan defaults, the loan originator is bound to repurchase the loan, thus safeguarding the investor from a complete loss.

Additionally, Debitum implements late penalty charges for overdue payments, incentivizing timely repayments and adding to the overall security measures.

If default situations escalate, Debitum has partnered with Creditreform, a leading debt collection agency, to manage recoveries efficiently and effectively.

I like how specific and detailed Debitum are with this concept. After all, this is the biggest doubt that investors have before investing in a new platform. Debitum’s Protection Plus stands out as a comprehensive, multi-level investment protection framework designed to minimize risks for investors. By integrating strict regulatory adherence, due diligence, and strong collateral backing, Debitum not only promotes investment security but also demonstrates a deep commitment to its users’ financial well-being. With such measures in place, investors can engage with Debitum’s platform, assured that their investments are shielded through a thoughtful and thorough security apparatus.

Company and Team

At Debitum’s core is a team of seasoned finance industry veterans. The leadership, headed by CEO Henrijs Jansons, adeptly navigates finance, investor/partner relations, and marketing. COO Anatolijs Putņa leads platform development and HR, while CLO Gvido Bajārs oversees legal, regulatory affairs, and risk management, forming a robust operational backbone.

It should be noted that Debitum Network had a change of ownership, which is also reflected in the new way that Debitum now operates.

Specifically, in 2023, there were these changes to the ownership structure of Debitum:

• In July, the controlling ownership structure of SIA DN Operator – the legal entity of Debitum – changed. The existing CEO Henrijs Jansons remained. ^[reference]
• In September, the ownership changes of Debitum were completed after approval from the Bank of Latvia.

Previously, the ownership of Debitum platform was held by Mārtiņš Liberts. He is no longer involved or responsible in any operational decision-making.

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Loan Originators

The strength of a P2P lending platform depends significantly on the quality of its loan originators. Debitum has a transparent and meticulous vetting process for evaluating potential loan originators. This process analyzes the financial stability, growth potential, and professional management expertise of each originator.

Some of Debitum’s top originators include Evergreen Capital, Tripe Dragon and Sandbox Funding. They currently have loan originators from Estonia, Latvia, and the UK. These originators have passed Debitum’s stringent 4-step due diligence protocol, which reviews business plans, analyses financial statements, evaluates collateral, and conducts background checks on management. This rigorous, ongoing evaluation ensures continued alignment with Debitum’s high standards.

Each loan originator profiled on Debitum comes with a detailed overview, encompassing their operational history, financial performance, and management team. This level of transparency provides investors with a well-rounded understanding, enabling them to make informed investment decisions.

Debitum is regularly adding new loan originators, so you can expect a solid pipeline of investing opportunities.

Asset-Backed Securities

On Debitum, investors can invest in Asset-Backed Securities (ABS), which pool multiple loans into a single asset, providing an extra layer of diversification and security.

An asset-backed security (ABS) represents a financial instrument that gains its value from a pool of loans. The purpose of creating an ABS is to offer investors a secure and predictable investment option with fixed terms and income. By utilizing a pool of loans as collateral, the ABS ensures stability and repayment by replacing loans that mature or become overdue during their lifespan.

The loans included in this pool share similar characteristics, such as the loan originator and type, which may encompass factoring, trade finance, business loans, agro-loans, and car leasing. Although there may be variations in the loans’ start dates, maturity periods, and nominal values, their collective performance directly impacts the investment.

The success of this investment model relies on the performance of all loans in the pool and the loan originator’s expertise in loan origination. Through careful management of these factors, investors can potentially benefit from a reliable and rewarding investment opportunity in asset-backed loans.

Getting Started on Debitum

Getting started investing on Debitum is straightforward:

1. Create an account and complete identity verification. This is a quick and simple process.
2. Deposit funds via bank transfer. Debitum provides account details to route the deposit quickly.
3. Browse current investment options like business loans or ABS. The platform organizes opportunities clearly.
4. Select investments that match your criteria and allocate funds. The auto-invest feature (to be reactivated soon) will automate this.
5. Manage investments and withdraw profits. The user dashboard provides easy access to monitor performance.

User Interface and Experience

Debitum boasts a user-friendly interface, designed with an intuitive layout to ensure a seamless user experience. The platform provides easy access to vital information, investment options, and account settings, making it easy for both novice and seasoned investors to navigate and manage their investments.

Customer Support

Support is available through the standard phone, email and chat. I typically use chat and email, with a preference for chat when I have a quick and simple question. I’ve had good results whenever I messaged them during European office hours, and outside of those hours an email does the trick, with a reply being received within the next day or two.

Personal Experience and Returns

My investment trajectory on Debitum has been marked by a consistent yield performance, even amidst the economic turbulence induced by the COVID-19 pandemic during 2020 and 2021, where my average annual yields were of around 9%. This narrative underscores the platform’s robustness and its capability to deliver competitive returns, reflecting positively on its long-term viability.

Risks

Debitum is one of the few platforms that clearly spell out the risks to investing in P2P lending, and you can check those out on this page on their site. I’ll try to put it simply here by using analogies.

Investing on Debitum is a bit like embarking on a treasure hunt where the map is well-detailed but the terrain is unpredictable. Just like any treasure hunt, there’s a chance you won’t find what you’re looking for. Here, the treasure is your potential earnings, and despite having a good map in the form of Debitum’s protective measures, there’s still the chance of running into unexpected trouble.

Think of Debitum’s investments like planting a garden. You’ve got good tools and quality seeds (the protective layers and due diligence), but sometimes nature has other plans. A sudden storm (a loan default) or pests (market volatility) can harm your budding plants (your investments). And if the biggest plant (a loan originator) gets sick and can’t be saved by the garden’s first aid kit (the buyback obligation), it might affect the whole garden’s health.

In short, Debitum sets you up with a safety kit for your investment journey, but it can’t control the weather or the wildlife. You’re more protected than going it alone, but you should only pack into your investment basket what you can afford to adventure with.

External Reviews

Most reviews, especially since the change in ownership, are positive. Many investors like to use Trustpilot as a source of independent reviews. Although I don’t personally put too much weight on Trustpilot reviews, in this case, we can definitely say that the sentiment on Trustpilot about Debitum is a positive one.

Since the change in ownership has been fairly recent, I expect more investor reviews to be available in the coming months, so from this aspect, it’s worth noting that other platforms probably have more independent information and reviews available at the moment.

This is also one of the reasons (I suspect) why Debitum makes a special effort to really describe its offering in the best way possible, also outlining possible risks. This is good for the investor, as investor discontent almost always is the result of either investing in something they didn’t properly understand (and having a negative outcome) or malpractice from the platform’s side, which thankfully has become uncommon in the last couple of years, compared to the wild west early years of P2P lending.

What Sets Debitum Apart

Several key factors differentiate Debitum from other P2P lending platforms:

• Strict focus on asset-backed business loans, enhancing security
• Robust 90-day buyback guarantee and late repayment penalties
• One of only four licensed platforms in Europe currently
• Strong track record of zero defaults over 5+ years
• High XIRR of 11.44% reflecting profitability of its loan portfolio
• Transparent and meticulous vetting of loan originators

The combination of prudent risk management, regulatory compliance, and consistent returns makes Debitum stand out.

Alternatives to Debitum

While Debitum offers a robust and secure platform for P2P lending, investors might also consider exploring other platforms to diversify their investment portfolio. Some notable alternatives include:

1. Mintos: A well-established P2P platform known for its wide range of loan originators and investment opportunities.
2. PeerBerry: Known for its user-friendly interface and a good variety of short-term loan opportunities.
3. Bondora: Offers a range of investment products and has a long-standing history in the P2P lending space.
4. EstateGuru: Specializes in real estate-backed loans, providing a different asset class for diversification.

Conclusion

Debitum has all the signs of a reputable P2P lending platform, offering a conducive ecosystem for investors to channel funds into sustainable business loans. The platform’s stringent safety measures, transparent loan originator selection, and dedicated team are its hallmarks, instilling confidence in the investment community.

The yield on Debitum, although slightly trailing some counterparts, is offset by the emphasis on asset-backed lending and robust safety mechanisms, significantly enhancing the security quotient of investors’ funds.

With a simplified onboarding process, a promising outlook on the reactivation of the auto-invest function, and a diversified range of investment options, Debitum is currently looking like one of the most user-friendly and secure investment platforms in Europe. If you’re looking for passive income through higher-risk investments, you should definitely take a look at this platform.

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Invest with Lonvest

When investing in European P2P lending platforms, it’s important to maintain a healthy level of diversification across said platforms, but also to always be on the lookout for new (and perhaps better) platforms to allocate to. Lonvest is one platform that fits the bill, having launched in 2023 in Croatia.

The platform has already issued 280K worth of loans with an average rate of 13% and it’s growing quite fast.

Let’s dive into the nuances, strengths, weaknesses, and unique features of this platform.

Introducing Lonvest

Like its counterparts in the Peer-to-Peer lending sector, Lonvest offers a platform where investors have the opportunity to funnel their funds into loans, collaborating with other investors, and aiming for periodic interest. As mentioned, the platform was launched in 2023 and it’s registered in Croatia.

The main components of the team, on the other hand, are Ukrainian, and they are by no means newcomers to the P2P lending scene. The team has run lending platforms successfully in multiple countries for around 10 years, and this is simply a new twist or addon to a model that they have perfected over the years.

Loan Originators

I mentioned that Lonvest is the latest innovation from a team that has been in this business for many years, and that is why this platform is not an aggregator of loan originators, but rather a way of accessing the loan originators of the parent group – Space Crew Finance group. The group runs loan originators in Sri Lanka, Poland, Philippines and Vietnam.

While this may limit the amount of loans on offer on the platform, as an investor I know that there is direct responsibility of the quality of the loans, and Lonvest is not simply relying on 3rd party loan originators, all with their own systems, due diligence and market risks.

Loan origination fees typically range from 0.5% to 1% of the loan amount. These costs won’t be a surprise at the end of the term because they are typically determined before the loan payment is approved.

Expected Returns on Lonvest

Your earnings on Lonvest are contingent on your chosen investments. Based on the data from their in-house loan originators, the platform boasts potential annual returns of up to 13%, and they project an average annual yield of 12% for their investors.

This aligns with averages across several of its peers, and it’s something I’m keen on exploring further.

How to Invest with Lonvest

Setting up an account and making your first investment on Lonvest is remarkably straightforward, making it one of the most user-friendly platforms currently available. Here are the steps to get started:

1. Fill out the short initial registration form.
2. Complete the easy KYC process with Veriff – you just need an ID and to take a selfie.
3. Add funds to your account via bank transfer, reflected in your account within 2 days.
4. Choose one of the automated investment strategies (options starting from just 30 days).

You can make a minimum investment of €10, which in reality is only practical for testing out the platform. Most investors will deposit a few hundred/thousand euros to diversify suitably across the loans and geographies available.

Usability of the Platform

The team’s experience in the tech sector instantly showed when I started using the Lonvest platform. Everything works flawlessly, and it’s an easy process to register and get everything in order and ready to invest.

Moreover, the site is available in 3 languages: English, Spanish and German. I was able to verify the content in English and Spanish and found it to be easily understandable with no major issues. The blog is currently only available in English, but translations are on the way.

Safety Features of Lonvest

All loans on Lonvest come with both a buyback guarantee and a group guarantee. This ensures that if a borrower defaults, the loan originator will intervene, purchasing the loan and ensuring investors are reimbursed. This safety net is a staple among many platforms and is pivotal for securing your investments.

Given Lonvest’s oversight of its loan originators, investors can gain additional assurance. Their commitment to security is also evident in their embrace of AI-driven identity verification and adherence to GDPR protocols.

As mentioned, while not a security feature, the loan originators (part of the SpaceCrew Finance group) on this platform have a long positive track record.

Since Lonvest is based in Croatia, where there is no regulatory compliance need, this is not something that we can rely on for Lonvest. However, the reason why they chose this route is to launch rapidly, and they are in the process of also obtaining a European license as a financial platform.

The Team

In my experience, the biggest risk factor in this game is having an inexperienced team that doesn’t really has a good playbook, or is either too focused on the financial side, or on the tech side.

The founder of Lonvest, Roman Katerynchyk, started off his career by launching a tech outsourcing company that still exists, and he organically became familiar with the financial side of things by providing services and helping manage existing finance platforms in Ukraine. This gives him a rare mix of competencies in both the financial and tech sectors. At the end of the day, P2P lending platforms need a sound financial system behind them, and rely on the tech side to keep ahead of other players, including banks, and fulfill an uncovered need for investors and borrowers.

All other members of the team have their own years of experience, and Lonvest clearly displays the main figures behind the platform, with links to their Linkedin profiles where you can check out their experience and judge for yourself.

In addition, I can also share that I’ve met the founder Roman, and he has left a very good impression on me. He is a responsible person with lots of passion for this industry, and indeed is very knowledgeable both on the tech and finance side. Since these two sectors have always interested me and I also have years of experience in them, we had a very good conversation. In particular, I enjoyed learning about the way that he orchestrates Lonvest’s entrance in new markets, which is pretty impressive and requires a lot of moving parts that act in concert to make sure that money is made on the loans, while at the same time respecting the borrowers and their financial situations. This shows me that the team at Lonvest is not only good at generating returns but also has a very high ethical standard.

Liquidity

You can invest in short-term loans of 30 days, and Lonvest employs a buyback guarantee which means that you can sell back the loans within the 30-day period without incurring any penalties. This is a really positive point about this platform.

Support

I’ve interacted with support in English and got my questions answered cordially and professionally with no problems of any sort. Lonvest has a bot that can help you find answers to your questions easily, and if that is not enough, you can speak to an agent via live chat or get a reply over email.

Unique Points

One of the ways that Lonvest intends to differentiate itself from the rest of P2P platforms is by being very transparent about its operations. They plan to be very communicative with their investors and help educate them if they are newbies to this space. The Lonvest blog, or “Lending Insights”, proves to be a highly interesting read, and so far they are keeping to their promise by publishing regular and very interesting content, including interviews, news about the P2P lending space, and educational articles.

Things to Improve

There are several obvious things that should be improved, like for example the introduction of a secondary market and more languages on the site. However, given that this is a new platform it’s completely normal that those things are still being built out.

It would also be ideal to have a wider range of loans in terms of geography and loan originators. This is a double-edged sword though. If you only include your own loan originators in the platform, you can control things better and the lenders can trust your track record. This is currently the case with Lonvest. On the other hand, you can open the platform up to other loan originators, which brings more options to borrowers, but less control over loan quality and dependence on the performance of third parties.

Therefore I think that as long as Lonvest can keep the loan pipeline flowing, it’s perfectly acceptable to only offer loans from the loan originators within the same group.

Alternatives to Lonvest

There are many players in the space, but here are a few good alternatives if you’re trying to diversify across multiple P2P platforms

• Peerberry – One of the biggest P2P lending platforms that has been around for a number of years already.
• EstateGuru – A top choice if you want to diversify your lending portfolio into real estate loans in addition to consumer loans.
• Mintos – Probably the most well-known and trusted European P2P lending platform.

Conclusion

While Lonvest is technically a new P2P lending platform, the company and team behind it are anything but new to the lending space. They have had a ton of success for over 10 years, and I have full confidence that this will be a good platform to allocate going forward.

Lonvest offers good returns while treating borrowers fairly and offering a really nice interface for investors. I also look forward to seeing the educational material that Lonvest have promised to release in the coming months, as this would make it one of the best platforms for investors new to P2P lending.

Invest with Lonvest

In an era of economic volatility and historically low interest rates, innovative financial platforms have sought to offer individuals novel avenues for growing their wealth. Nibble.Finance, an Estonia-based affiliate of the IT Smart Finance (ITSF) group, is one such platform. Its approach is distinct: the platform enables investments in short-term microloans, a type of peer-to-peer (P2P) lending. This review will delve into the functionalities, user interface, security measures, and overall investment proposition of Nibble Finance.

The platform was founded in 2020, and IT Smart Finance Group is the holding company, while Joymoney is well-known as a credit company, and they are all linked.

The average interest rate obtained by more than 8,000 investors using the platform is 12%. More than €2m has been invested in the platform so far, proving that Nibble has been accepted by the general investor community in Europe.

The website is available in English, German, Spanish and Italian, catering for a big chunk of investors in their native language.

In this article, I’m taking a look at Monefit, a consumer loan platform designed to provide quick and convenient personal loans to customers in need of financial assistance.

Monefit was launched by Creditstar Group, an established financial services provider with over a decade of experience in the market. Operating across several European countries, Creditstar has built a solid reputation for offering short-term and installment loans to customers .

Registration and Account Setup

Getting started with Monefit is a straightforward process. The registration and account setup are user-friendly, and once registered you can either deposit money and start investing (SmartSaver) or apply for a credit line (CreditLine).

Auto-Invest Feature

Monefit is a black-box platform. This means that you do not have visibility into the loans that you’re investing in, but are trusting the platform to make the best use of your money and allocate it in a responsible way. This is similar to how Bondora’s Go and Grow Unlimited system works. So to invest, you will need to use Monefit’s auto-invest tool called SmartSaver.

Monefit gives you a return of 7% per year, and boasts more than €850m invested and €83m in interest earned by investors on the platform.

Your SmartSaver account has no fees of any kind and no hidden cost, so you know exactly how much you will receive when you decide to withdraw your funds.

However, it is worth mentioning that there is a €50 minimum withdrawal limit in place. Moreover, withdrawals are not instant, however the platform promises to process them within 10 days.

Deposits and withdrawals can only be made in Euros.

One thing to mention is that while the interest is advertised at 7%, possibly hinting that it’s a fixed return, it can actually fluctuate at the platform’s will, as detailed in the terms and conditions. So take that with a pinch of salt.

Monefit and Creditstar

As I mentioned, there are very close ties between Monefit and Creditstar, so it’s worth spending some time on investigating Creditstar itself.

The Credistar Group is a prominent and audited European lending group that offers loans to borrowers across Europe, operating in countries such as Spain, the UK, Sweden, Denmark, Poland, the Czech Republic, Estonia, and Finland.

Although Credistar recorded a profit in its audited financial statement for 2021, the company’s commitment to meeting investor obligations has been somewhat inconsistent.

Credistar also sources funds for its loans through platforms like Mintos and Lendermarket. However, investors using these platforms have encountered considerable delays in payments, as Credistar was unable to repay investors due to insufficient liquidity to finance its loans.

Investments that had reached maturity on Mintos were shifted to “pending payments,” while those on Lendermarket saw their terms extended.

These circumstances heightened investor risk and significantly affected their liquidity.

Despite both P2P lending marketplaces advertising Credistar’s loans with the highest returns, investors have expressed dissatisfaction with the company’s methods and its failure to honor the buyback guarantee it had pledged on both Mintos and Lendermarket.

The underlying cause of Creditstar’s “liquidity challenges” could be attributed to the lender’s assertive lending approach and unforeseen fluctuations in financing.

To maximize profits, the lender must issue a greater number of loans and secure more funding. This rationale could explain why the financial group opted to introduce an additional “financing source” – Monefit SmartSaver.

Alternative Platforms

As an investor, it’s crucial to explore and compare different investment platforms to find the one that best suits your needs and preferences. Here are some alternative platforms I’ve considered or invested in:

1. Mintos: Mintos is a popular peer-to-peer lending platform that offers a wide range of loan types from various loan originators across the globe. The platform provides a comprehensive auto-invest feature and a secondary market, making it a strong competitor to Monefit. However, Mintos’ extensive range of loan originators and countries may require more due diligence and research from investors.
2. PeerBerry: PeerBerry is another well-regarded European P2P lending platform that focuses on consumer loans, similar to Monefit. The platform is known for its user-friendly interface, auto-invest feature, and competitive interest rates. However, PeerBerry’s loans also have a geographic concentration in Europe, posing similar risks to Monefit.
3. Bondora: Bondora is a long-standing P2P lending platform that offers consumer loans in Estonia, Finland, and Spain. The platform is known for its simplicity and ease of use, with an auto-invest feature called “Go & Grow Unlimited” that targets a fixed return rate. Bondora’s main drawback is its limited geographic exposure, which may not suit investors seeking greater diversification.

Conclusion

This platform leaves me with mixed feelings. On the one hand, it’s not a platform that has to start from scratch, given that it’s backed by Creditstar, and the latter company has plenty of experience in the space. However, Creditstar itself does not have a stellar track record in its behavior towards investors.

Therefore, I would say that Monefit could be a good platform for you if you want absolute ease-of-use and high liquidity and you’re a fan of other similar products in the market such as Bondora’s Go & Grow. Monefit does in fact currently offer better returns than Bondora, but I would classify it as being riskier.

It’s always a good idea to explore and compare alternative platforms to find the one that best aligns with your investment goals and risk appetite.

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