Income Marketplace is a new player in the FinTech field. Based in Estonia, this crowdlending marketplace offers its investors a platform that’s safe and transparent. Their Cashflow Buffer and diverse Loan Originators make P2P investing look promising.
If you’re interested in this new platform, then keep reading. We’ll be reviewing Income Marketplace in this review to help you decide whether or not it’s right for you.
Income Marketplace Overview
Income Marketplace was founded in 2020. It’s one of Estonia’s newest crowdlending marketplaces that allows you to select and control Loan Originators while using risk management mechanisms like Cashflow Buffers. It’s an interesting way to invest in P2P.
Their CEO, Kimmo Rytkönen has a solid background in FinTech. One of the companies he has helped to build is Tunaiku, the lending arm of recently IPO’d Amar Bank in Indonesia. The whole team also has a proven track record in their field. They have a background in management, fundraising, international finance, consumer lending, and P2P investment.
The company’s goal is to make loan investing more transparent and secure. It’s a place where you can invest in loans to earn passive income effortlessly.
Before we go over and look at the different aspects of the Income Marketplace, let’s take a quick look at the pros and cons.
- Loan originators are from Indonesia and Brazil
- 60-day buyback guarantee
- Competitive rates
- Some areas are not allowed to have loans yet
- Limited investment options
- Still new
In-depth Review of Income Marketplace
Now that you have an idea of what Income Marketplace is, let’s look at its different features and what makes it different.
Income Marketplace is a new P2P platform that enables its users to invest safely while pursuing transparency and engagement. Although still new to the scene, it already has originators from Indonesia and Brazil. They’re planning to widen their scope over the next few years.
Even if the number of originators is still small, they announced that they are planning on adding more companies still during 2021 and in the coming years.
They have a varied international presence — lenders and buyers all come from different parts of the globe. This allows for healthy competition within the platform. They even have a Cashflow Buffer mechanism so that the risks will be minimized.
It has a good concept, and it will most likely have more improvement as it grows.
Investments & Revenue
The concept behind the platform is that an investment that has a relatively low risk and moderate gross return is better in the long run than an investment that has a high annual interest rate with a high risk.
Income Marketplace doesn’t offer high risks, making it within the range of defensive or conservative investing marketplaces. For customers, you can expect to have 7% to 12% returns. Even if the risks aren’t high, its originators offer an annual interest rate of 12%.
Apart from the investments, you can also earn by joining their affiliate scheme. All you need to do is refer investors to their platform. For every registration, you get €5 plus a 1% commission. But the perks don’t stop there. You will have access to interviews and opinions from industry leaders in the P2P investment field.
Security & Risks
Income Marketplace, as mentioned before, is pursuing P2P investments that have transparency but also security.
And because of their investment scheme, the lower the risks, the higher the profits. So to lessen the risks, they use different mechanisms.
The first would be through the Buyback Guarantee from all their originators. Next, they offer an expanded 40% Skin in the game for their originators. Most platforms only offer a range from 5% to 10% when it comes to this, which also makes it their competitive advantage. Another method to reduce risks in their platform is through the Cashflow Buffer. This is Income’s mechanism that can only be found when you use their platform.
The Cashflow Buffer allows payments to investors to be ensured. It is done by managing the originator’s funds, from their expanded skin in the game to their operational returns. This helps minimize any risks when there’s non-payment. This also protects everyone in case the originator files for bankruptcy.
For more security, the funds on the platform are separated from the investor’s personal bank account. Your daily activities for your investor’s account in Income and your bank account won’t mix. You will need to deposit or withdraw to transfer money to and from your bank account.
Although you can see the borrowers’ information, you won’t be able to see their full details such as address and full name to comply with data protection laws. This is also to ensure the borrower’s security.
Although the Income Marketplace is relatively new, they have been committed to ensuring that their security and transparency can be seen from their website.
Liquidity & Diversification
There are a lot of maturity offers, ranging from short-term to long-term from Income Marketplace. As for now, the choices for the offers are leaning towards the short-term side, but the team is planning to implement a secondary market to support long-term offers.
As for diversification, Income Marketplace is pursuing to make their marketplace as diverse as they can. This can be seen through the choices for their originators, Indonesia and Brazil. In the future, they’re planning to add more loans from different loan originators.
The loans come from Loan Originators only and not from Income Marketplace itself. The Loan Originators are the ones who place the loans on the market. They are the ones to provide any loans to the customers wherever part of the map they are in.
Income Marketplace claims that it does its own due diligence for investors’ benefit. All the loans from the originators are thus thoroughly reviewed according to set parameters. Even the originators themselves are of course also reviewed by the team. Plus, they only partner with registered institutions. The Cashflow Buffer system protects investors if their originators suddenly file for bankruptcy.
How does the team check loan originators, you may ask? Well, they usually check if they have a good track record on issuing loans, although the team doesn’t specify how long these records should be. To minimize risks, they also check the company’s management as well as their financial standing. These originators are monitored monthly for their performance by the team.
As for why the loans are issued to the borrowers, they have many different purposes. The purpose of the loan can range from home improvement, business needs, vehicle purchases. All the details are included in each listing.
Investments & Taxes
If you’re worried about taxes, the income from investments is usually taxed as capital gains. But this will be dependent on your country of residence.
If you’re not sure of the arrangements, it might be best to consult with your local authorities or local advisers. If you need an account statement for tax purposes, you can download it from your account anytime.
You will be required to make a minimum of €10 investment. You can choose from two setups: Manual Investments or Auto Invest.
You’ll have two investment choices: Manual investment or Auto invest.
Let’s take a look at Manual Investments.
● Manual Investment
As the name suggests, you’ll be investing on the platform manually. You can browse through the listed loans, or you can ease your search by using their filters to find what appeals to you most.
You’ll have the freedom to compare the different loan details on the marketplace, such as interest rate, terms, the purpose of the loan, and information of the borrower. You can also purchase a piece of a loan instead of funding the entire thing.
● Auto Invest
Auto Invest, on the other hand, is automated using the company’s investment tool. But one of the best things about Income is that it still gives you control of what type of loans you want to invest in and work on your strategy.
The interest is calculated daily. This is also derived using the outstanding balance from the investments you’ve made.
According to Income, the formula is: (Invested amount)(Total number of invested amount days)(Interest rate / 365)
What You Need to Know When Using First Trade Platform
Registering Your Account
Once you’ve clicked on that, you’ll be prompted to a different page where you’ll be adding all your information.
But before you can proceed to the next step, you will need to verify your identity.
Adding Funds to Your Account
Now you can link your bank to add funds to your investor account. You can find your deposit details under the “Deposit/Withdraw” option of your account.
They require a 10€ minimum first deposit. It should be transferred from your bank account operating within the European Economic Area.
Payments are only accepted in euros, so make sure to select this currency before you start with the transfer.
Although the deposit is processed right as soon as it’s received, it can take up to two business days to complete the process.
Invest and Get Income
Once you have the minimum deposit, you can finally start investing. The minimum investment is €10. When the secondary market opens, the team stated that there would be no minimum investment required.
Once you’ve set the type of loan you want, the term, and the other details such as which loan originator to choose and the country of issuance, the system will do the rest.
The system will automatically invest in the loans that you have set in your criteria. Suppose you set a maximum amount for your auto-invest. In that case, they will reinvest loan repayments to the loans in your criteria so that your capital will keep on earning interest. It’s very efficient in increasing your money and lessening the time and effort you need to do this.
Bottom Line: Is the Income Marketplace Worth the Hype?
P2P lending has become one of the most attractive ways to invest. While there’s still a lot of room for improvement, it seems like it will only get better over time.
If you’re looking for a platform that values security and transparency, then Income Marketplace is perfect for you.
Its investor-focused approach guarantees your investments will have minimum risks involved.