Peerberry is a multi-lender P2P investment site
Peerberry is a European P2P investment site that has been growing very quickly and adding lenders to its platform over the last 12 months. 21 lenders are now listed on the site. Around €13 million of loans are being purchased by investors on its site each month.
You can read our full review of Peerberry here. We also recently published an interview with their new CEO, Arunas Lekavicius, which you can find here. We have found so far that the Peerberry website works very well, and the interest rates offered are attractive – generally around 11-12%. All loans offered have buyback guarantees.
Up to now it's been hard to get financial information on the Peerberry lenders
We have received many requests from readers for us to publish Peerberry lender ratings. This has taken us a lot of time and effort to do. Much of the information we required was not available from the Peerberry site, and was difficult to obtain from other sources. However the Peerberry management team have helped us to acquire key financial data from the lenders on their platform.
The corporate structures of the Peerberry lenders are quite complex. Another factor we have had to deal with is that some companies have received the benefit of intra-group guarantees while others do not. As a result of this we have decided to slightly alter our normal rating methodology to take the guarantees into account (both explicit and implicit guarantees). We felt that this would provide a more reliable result than our standard approach, particularly as there are so many lenders that are in start-up phase where no meaningful financial information is available yet.
Aventus Group operates many of the lenders on Peerberry
Peerberry was founded by the the Aventus Group to help it fund its growing loan portfolio. Since then Peerberry has changed ownership and has added other lenders to its platform. Aventus is a lending group with operations in many countries including Poland, Ukraine, Russia, Moldova, Kazakhstan and Czech Republic. We have obtained from Peerberry the global financial data for the Aventus Global group across all their businesses. The Aventus Global group has a fairly strong financial position, with almost €20 million of equity, and €5.8 million of profit for the first half of 2019.
On the Peerberry site some lenders are referred to as having a guarantee from the ‘Aventus Group’. We think this is slightly confusing because this guarantee actually refers to the Aventus Poland Group, which operates the lenders Smartpozycka, Pozyckaplus and Niewielkapozycka. We have received the consolidated financial statements for the Poland group, which we have summarised below. The lenders that receive this guarantee are small startup operations, with no real financial track record to date. Therefore we think it makes more sense to focus on the strength of the guarantee, rather than the startup lender. For these lenders, we have not assigned any scores for profit, capital etc. Instead we have assigned a score according to the perceived value of the guarantee.
Other lenders on Peerberry are small
The GoFingo group is the other main lending group on Peerberry. Five GoFingo Group companies in total are listed on Peerberry. The two largest companies are Euro Groshi in Ukraine, and SOS Credit in Czech Republic. Both companies made profits in 2018, however the businesses are still small. There are also three new lending businesses from GoFingo listed on Peerberry – Momentlaan of Denmark, GoFingo Ukraine and GoFingo Kazakhstan. The companies don’t have any real financial information or track record to rely on. The lack of size and track record of the GoFingo companies has resulted in them scoring poorly in our ratings.
The third lending group on Peerberry is Lithome. Lithome is the funding arm of a Lithuanian real estate developer, and is also a small company. One positive feature of the Lithome loans however is that they are secured on real estate, so investors receive the benefit of the collateral security as well as the buyback guarantee.
Peerberry lenders - key financial information
The lending businesses above with missing equity and P&L information are startup businesses, and as a result this information is not yet available. All information above has been provided by Peerberry management.
Our Peerberry lender score methodology
We’ve had to make some alterations to our normal scoring methodology to take into account the impact of implicit, and explicit guarantees provided to the lenders on Peerberry. What do we mean by this? Some companies, for example, have received guarantee commitments from the Aventus Poland Group. This means that if a borrower does not pay, and the lender is also insolvent, the Aventus Poland Group will cover any losses for Peerberry investors and fulfill the ‘buyback guarantee’. This is an ‘explicit guarantee’. We have provided a score valuing this group support, which is derived from the score of the group providing the guarantee.
We have also awarded ‘group support’ points for some lenders where no explicit guarantee is in place. As pointed out to us by the Peerberry management team, it is unlikely that some lenders would be allowed to default on their obligations to Peerberry investors, if the overall lending groups (Aventus, GoFingo), were in a financial position to provide support. Financial companies rarely allow subsidiaries to default as it creates signifcant reputational and legal risks. This is referred to as an ‘implicit guarantee’.
For lenders who are providing group support, or not receiving any group support, we have calculated their score out of 80 on the four primary rating factors of profit, capital, size and track record. We have then scaled this score up to generate a score out of 100 (for example a 60/80 score would be shown as a total score of 75/100).
Peerberry lenders - our rating scores
* – the Aventus Poland group includes Smartpozycka, Pozyckaplus, and Niewielkapozycka
Our thoughts on the lenders
Our preferred lenders on Peerberry are the larger, more established Aventus Group companies. These are the Polish lenders Smartpozycka, Pozyckaplus, Niewielkapozyczka, and also Pujcka7 of the Czech Republic. As noted above there are many startup Aventus companies listed on Peerberry that operate in countries such as Ukraine, Kazakhstan and Moldova. The lack of track record and geographic locations make them higher risk. While the guarantees they have received from the Aventus Poland group reduces these risks, we are not sure that the extra 1.2% yield offered on these loans is enough.
The latest Aventus Group company to launch on Peerberry is called Autofinance. It’s really just a startup auto lending business in Belarus, with only €100k of loans at December 2019. Importantly, according to Peerberry all loans are guaranteed by the Aventus Poland Group.
The lack of size and track record of the GoFingo companies has resulted in them scoring fairly poorly in our ratings. However we would expect their scores to improve once 2019 financials become available and the businesses have grown and developed a longer track record.
The loans offered by Lithome are secured on real estate projects. However the information provided is very limited and we think there are better sites to invest in these types of loans in Lithuania, such as EstateGuru.