Twino was one of the first platforms that I invested in when I got started with P2P lending. They’re one of the earliest companies in the space and as such deserve respect and a closer look, as many other companies are little more than a couple of years old.
I’ve been able to obtain returns of 9.21% on this platform, with no defaults whatsoever during the years I’ve been investing with them. Granted, the returns are not spectacular, but they’re always much better than the returns on money left in the bank, and this is a platform that has never given me any headaches.
The company started operations in 2009 (web platform as we know it launched in 2015) in Latvia and has originated over EUR 1 billion in unsecured consumer loans since then. Like Mintos and Peerberry, it offers European investors investment opportunities in unsecured European consumer loans.
It says it has nearly 22,000 investors from over 30 European countries. Twino has also disclosed that it has also issued loans to the value of €1bn (£860m), since it was set up 10 years ago, half of the value of which have been issued in the past three years. Twino Group employs on average 543 employees across its various offices.
Although I was a big investor on Twino earlier on, over the last couple of years, I’ve reduced my allocation on this platform in favor of other platforms like Mintos which I felt had better management and a faster growth trajectory. However, in 2020 Twino seem to be back on the rise and have implemented almost all the items that I felt had been missing, including a blog, website revamp, and more investment opportunities.
So is Twino worth investing in as part of a diversified portfolio in 2020?
How does Twino Work?
Twino works in a similar way to other P2P lending platforms, linking consumers who need loans with investors in the European Economic Area countries who are ready to lend money to them. You can learn more about how P2P lending works on my dedicated page.
You can, of course, use the auto-invest facility that Twino provides in order to automate your investment and not have to invest in loans manually. You can thus spread your money invested across hundreds or thousands of loans making sure you ware well-diversified geographically.
There are absolutely no fees for investors, and the nice thing for UK residents is that you can invest in Euro as well as GBP.
There are three types of loan types on offer:
Buyback – TWINO will buy back loan (principal amount and interest for investment period) from investor, if it is 60 or more days delinquent.
Payment Guarantee – TWINO will compensate both the invested principal amount and interest according to the loan repayment schedule for the whole loan period, even if the borrower is late with the repayment.
Ventures – Loan is secured and backed by collateral which comes in such forms as a pledge (share, commercial), mortgage and/or guarantees.
I personally stick to BuyBack guaranteed loans, but Ventures (a new addition on Twino) also looks interesting. More on that below.
Getting Started on Twino
Opening up an account on Twino is easy and takes less than 5 minutes. You will need to create a username and password as well as verify your identity.
To invest on the platform, you must also be at least 18 years old.
Once the initial standard procedure is done, you can access the platform and browse the loans available. You will then need to deposit money into your Twino account via a bank transfer (I use N26, Revolut or TransferWise to avoid fees).
Note that the currency of your first deposit will be used for all future activities in your account. If, for example, you first deposit money in GBP, then that currency will be the default for your Twino account.
You can also open a company account if you’re investing through a company. You will need to submit a few extra documents in this case.
The money will take a couple of days to arrive if using a SEPA transfer, and the same delay happens when withdrawing money. There are no fees for depositing or withdrawing.
Once you have the money, you can go ahead and start investing. Most investors opt to do so by setting up an auto-invest strategy.
Auto-Invest Strategies on Twino
The most hands-off approach to investing on Twino is to use an auto-invest strategy. As you can see in the screenshot below, you can set various parameters for each strategy (you can have multiple different strategies).
As you start filling in the parameters, the system will automatically calculate how many loans match your criteria. This will give you an indication of the strategy’s likelihood to achieve your investment goal. For example, if I have a goal of 20,000 euro for a strategy, but limit it to interest rates between 35-40% and a term of 2 months, I will probably not encounter a single loan available, as those parameters are by far too optimistic.
The best idea is to play around with the parameters until you find something that fits your goals. Every investor has his own risk tolerance and time frames so it doesn’t make sense to copy someone else’s strategy.
If you have no idea where to start from, try selecting BuyBack loans, limit the investment per loan to €25 and interest rate between 10 and 15%. You can then tweak things from there.
In 2020 Twino has launched Twino Ventures – secured investments in real estate, with the first project being a residential renovation project in Riga, Latvia.
These are loans that are backed by collateral in the form of commercial pledge, share pledge or mortgage.
The returns are fixed and are projected to be up to 12% per annum. All loans available are pre-screened by Mintos, who do the required due diligence before publishing them on the platforms. This does not mean that investors should invest blindly, however.
I think this is an interesting area for expansion for Twino and I’m interested to see how it goes for them.
Who Invests on Twino?
UK investors are responsible for 12% of TWINO’s investments, the second largest proportion only after Germany (33%).
Investors have already earned more than EUR 10m in interest and earn on average a market-leading return of more than 10% per annum.
Twino’s website is very clean and straight to the point.
The Statistics page shows the main numbers investors look out for in a neatly presented fashion, and all other information is easy to find.
The investment interface when you are logged in works pretty well and everything is presented clearly.
I would argue that Twino is quite transparent. You can easily find out who the top management at the company is by venturing to the Twino About page.
All financial statements up till 2018 are also easily available, as are general stats on loan performance.
As investors, we need to keep a close eye on the profitability of not only loan originators but also the platforms we invest in. In February 2019, Twino published consolidated results for 2017 and non-consolidated results to Sept 2018.
The results were not very good, with very large losses in 2017 and a negative equity position as of Sep 2018. In fact, their auditors raised ‘going concern’ risks, which means that they are of the opinion that there is a real risk that Twino will go belly up in the near future if things don’t improve.
In November 2019, Twino released its consolidated financial statement for 2018, which show an impressive turnaround in the company’s finances.
In fact, the company now reports pre-tax profits of €13m for 2018, compared to a €7.2m loss the year previous.
During 2018, Twino attracted 4,621 new investors that together with the existing client base of 11,604 acquired claims totaling EUR 199 million with an average annual yield above 10.9%.
The Twino Group’s non-bank lending companies issued loans amounting to EUR 183 million, of which 73% were issued in Russia, 9% – in Georgia, 7% – in Kazakhstan, 6% – in Poland and, 5% – in Latvia.
I’ve interacted various times with their customer care agents over Skype, and they were able to attend to all my queries in an efficient and well-articulated manner. I give them thumbs up on their support quality.
I would love to see a live chat integrated into the Twino website, however. That would be even easier than contacting over Skype. Phone numbers are available for various countries and you can also reach customer care over email.
One aspect where Mintos stands head and shoulders above many other platforms is in their reporting section. You can easily generate an income statement for the past year and also balances at the end of the previous year.
The PDF generated is comprehensive and contains all the information your accountant will need for tax purposes. It contains all the information necessary irrespective of whether you are investing as an individual or as a company.
Loan Portfolio and Interest Rates
In the early days, Twino used to provide excellent rates of return, rivaling those of other big platforms at the time like Mintos and Bondora. However, over time, Twino seems to have struggled to maintain a good inflow of loans with good interest rates. You should expect around 10% for 1-3 month loans at the moment from them, which is not spectacular. In 2020 things have started picking up, however, so I’m optimistic going forward.
Twino is contemplating expansion into the Asian market and also planning lending to real-estate and development projects. Currently, it has a presence in a number of European countries including Latvia, Poland, Russia, Georgia and Kazakhstan.
Their biggest presence is currently in Russia, although they previously were very heavy on Georgian loans. Concentrating on Russia has its own risks, but it seems to have given Mintos another shot at longevity after some worrying results in 2017.
Twino implements a buyback guarantee to cover investors against losses, which is protected by its parent group Twino Group.
TWINO issues loans via subsidiaries in Poland, Russia, Georgia, Latvia, Kazakhstan, Denmark, and Spain. Investors come from all over Europe with the UK accounting for the second-largest share of investment at 12%, according to the company. Germany is the largest market with 33% of the investing.
Here are the statistics on loan volume from the month of March 2020:
Loans listed from 01.03.2020 to 01.04.2020
As you can note, the volume for short-term loans with a buyback guarantee is much higher than that of installment loans with a payment guarantee. The rates of return are also significantly higher.
Twino was founded by Armands Broks, who is also the 100% shareholder of the company. The managing director is Anastasija Oleinika, who replaced Broks in November 2019 as CEO. Both are Latvians.
Armands Broks will now focus on new business opportunities and bringing talent on board.
At the time of the change in leadership, Broks and Oleinika both had some things to say:
Broks said: “We’re delighted to have Anastasija leading the team at this important time in the company’s growth. We’re currently working on a number of new business developments and are evaluating opportunities in new markets, most notably Asia in the next year.”
Oleinika said: “Reaching the €1bn milestone is significant for us, and is reflective of the business’ continued growth and expansion. The restructuring process we started in 2017 has brought the expected results in a very short time, and our financial results are testament to this.
It seems that this is a good move for Twino; I don’t really have any concerns about the Twino team as it stands today, they seem to be genuine people working hard to expand the platform.
Alternatives to Twino
I consider Twino to be an honest platform and worth using for a diversified P2P lending portfolio. Some other good options to consider as an alternative or an addition to Twino would be:
I think diversifying across 3-4 P2P lending platforms is ideal. Having more platforms makes it a hassle to manage everything – unless you have a lot of money to invest and investing is part of what you do on a day-to-day basis.