Robo.cash offers some of the highest returns available anywhere right now
Robo.cash was included in our recent list of P2P investment sites for busy people that are fast and simple to use. It offers market leading interest rates for loans with buyback guarantees – 14% interest rates can be found on the site currently. While the number of investors is still relatively small, it is growing very quickly, as awareness grows of the high returns, and positive experience of investors to date.
However we think that interest rates are only one of several things investors should consider. The lending track record and financial strength of a lender / platform is also very more important. In this regard the Robo.cash group appears to be performing very well, with profits of almost €8 million in 2017, and a lending track record going back to 2010. While 8 years does not seem like a long time, in the European P2P world this makes it one of the more established players.
Investors currently have the option to choose loans from Spain, Russia and Kazakhstan. The site is an ‘auto-invest’ only style, meaning that investor funds will be allocated to loans automatically, and no manual selection is possible. As the loan maturities are very short (and will be re-invested frequently), and buyback guarantees are in place, we think this is a sensible approach.
There are a couple of areas where Robo.cash could make improvements. Firstly, investors are currently limited to investing €10,000 per annum. While for many investors this will not be a concern, it could limit the attraction of the site for investors with larger sums to invest. Secondly, investors are not allowed to use the services of sites such as Transferwise or Currencyfair to fund their accounts. This is a pity and we hope that it can be resolved soon.
Still, we expect Robo.cash to continue its fast rate of growth, and to attract a lot of new investors this year. We think that the combination of market leading interest rates (for buyback guarantee loans), a simple to use site, and a successful operating company is likely to make this an interesting proposition. The main risks we see with Robo.cash is the location of the loans – Russia and Kazakhstan are still emerging markets and are outside the EU. For that reason we would expect most investors to include Robo.cash loans within a diversified P2P investment portfolio, in combination with P2P investments held on other sites such as Mintos.
To visit Robo.cash click here.
Hi Sergey, can you please tell us about yourself and your background. You setup your business in 2010, what were you doing prior to that?
Hi Hans. Well, I’ve been running business since I was twenty. My first IT-company was founded in 2002 when I was studying at the university. After getting a broad experience in the markets of real estate, commerce and production I managed to raise enough money to co-found the lending company known as FinTerra. It is the very company which marked the start of the financial holding we have today.
Robo.cash provides loans from your lending companies in Spain, Russia and Kazakhstan. Can you explain the legal structure of the group for Robo.cash investors? Which company is operating the Robo.cash platform, and where is it located? Which company / companies provide the buyback guarantees?
To start with, Robo.cash is a part of the financial group which also includes already mentioned six affiliated lenders. The platform operated by SIA Robocash which located in Riga and registered in the Latvian commercial register works as an intermediary between investors and the credit companies providing short-term lending. The headquarters of the financial group is located in Russia and we also have offices in Kazakhstan, the Philippines and Indonesia which ensure development in those countries. There are plans to continue growing internationally. As for the buyback guarantee, it is provided by the lenders completely and there is a reserved provision fund at Robo.cash which has been sized to cover a month buyback.
What types of loans does Robo.cash provide?
Currently, the lending group of companies is specialized in the issue of short-term PayDay loans only. However, there are plans to expand the opportunities within the consumer lending for borrowers and provide larger loans for longer terms.
Are all of your lending companies operating profitably? Your website mentions that the group made a profit of €7.9m in 2017, so things seem to be going well….?
At the moment, there are no final figures on the profitability for 2017. As soon as there any update we will publish the information. Nevertheless, 2017 turned to be successful for all companies of the financial group. There was a great increase in the issue of loans, e.g. the volume of provided loans grew in Russia twofold and in Kazakhstan fourfold.
How do you manage your credit risk? What has been the trend in your default rates over the last year?
Having an extensive experience in the marketplace lending we have designed the own high-quality scoring completely in-house. Our team continuously improves the scoring and our results prove its efficiency. The default rate in the online lending amounted to 12 % in Russia and 14,5% in Kazakhstan in 2017.
Do you own the whole group or are there other shareholders?
Today the financial group unites seven operating enterprises with a different share distribution in each company. The investment platform Robo.cash working within the frames of the European Union and Switzerland, the lenders Zaymer.ru working online in Russia, Prestamer.es in Spain and Robocash.id in Indonesia also providing online PDL-loans are owned by me completely. Other companies like the offline lender FinTerra, Zaimer.kz working offline and online in Kazakhstan and the new enterprise in Philippines have been co-founded with my participation.
There’s a lot of P2P platforms operating in Europe. What are you trying to do to differentiate yourself?
The key difference is in our business model “peer-to-portfolio” which simultaneously combines advantages of peer-to-peer and peer-to-business models with a complete automation of the investment process. Investors of Robo.cash invest in short-term loans issued by the affiliated credit companies. Being a united financial group, we undertake all risks which can arise because of extensions on payment or default. Many other p2p platforms leave it to investors and rarely deal with borrowers. Robo.cash doesn’t provide manual investments. We believe that automation greatly saves time of investors, simplifies the process and puts investors in equal terms. Briefly speaking, the fully automated platform Robo.cash based on a peer-to-portfolio model helps investors to earn more in less time with a greater confidence about the money.
All of your loans come with buyback guarantee. Can you explain how this works? How many loan extensions do you permit a borrower to make before it is classed as a default?
Robo.cash appeared 7 years after the first lending company of the financial group started its work in 2010. To be mentioned, that by the start of the investment platform, the group already had an extensive experience in the microfinance market in Kazakhstan and Spain. Before Robo.cash, all companies were financed from the own funds completely, no third-party companies were involved so we clearly understand the concern of investors for their assets. Nevertheless, we are the first to be interested in the efficient work of the whole financial group. You already know that the buyback guarantee is provided to investors by the affiliated lending companies which work closely with borrowers. Credit companies have high-quality scoring developed completely in-house, own customer service and support departments which deal with clients in case of extensions or default loans. Technically, there are unlimited extensions possible, however, we always try to come to a solution which would satisfy both parties in order to return funds and keep clients positive about the service.
Do you accept payments from investors via Transferwise and Currencyfair?
In order to provide proper accounting and due to requirements of the bank serving our account, Robocash accepts funds transferred from bank accounts only. Payments made via Transferwise and Currencyfair are not accepted.
You are borrowing in euros and lending in some other currencies. Do you hedge this currency risk?
All risks with currency exchange are carried by the lending companies and referred to their own expenses.
You currently have a limit of €10,000 of investments per annum. We understand this is due to AML rules. Can you explain why this limit is in place? Other platforms don’t have these limits, so why is this a problem for Robo.cash? Are there plans to lift the limit?
You are right, there is limit of €10,000 on investments. At the very launch of the platform, it was an AML requirement from our partner bank in Latvia servicing our account. However, quite soon after the launch, we observed a great demand for investments on the platform and found the limit to be quite a fair solution for an automated service to put investors on equal terms. There are plans to lift it when we integrate the platform with the Russian lending company Zaymer.ru. Due to legislative hurdles, the integration process has taken longer time than we expected at first but we are about to finish it quite soon. It is one of the key tasks we are working on currently.
What are your plans for the Robo.cash platform? How many customers are you hoping to attract?
Well, the question here is not about the number of customers, but their quality. We are determined to attract €10 million by the end of 2018. However, success of Robo.cash is in many respects up to the efficiency of the whole financial group as the platform attracts non-banking financing to the affiliated credit companies which provide loans. Apart from already mentioned integration with the Russian lender, we are going to provide an opportunity to fund PDL-loans issued by the Philippine lender Robocash.ph. which started its work by the end of 2017. Furthermore, today Robo.cash is open to investors from the European Union and Switzerland and there are plans to attract customers from some other countries in Europe.
To visit Robo.cash click here.