Last updated 19 June 2020
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 12%. All loans offered have buyback guarantees.
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 €14 million of equity, and a preliminary estimated profit of €12.6 million for 2019.
Recently one of the Aventus Group companies left Peerberry – Pujcka7 from the Czech Republic. The Peerberry CEO told us this is because the volumes in that market are declining, and the company had no need to use P2P to fund its loans any longer. The company is not expected to return to Peerberry, and all investors received full repayments.
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 – GoFingo Ukraine, ZeCredit 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.
One GoFingo company left Peerberry recently – Momentlaan of Denmark. We expected this to happen, due to new Danish regulations that make short term / payday lending unprofitable due to a new interest rate cap.
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.
Aventus and GoFingo now both provide group guarantees
One of the biggest changes to Peerberry that has taken place is the recent introduction of group guarantees that are now provided by Aventus Group and GoFingo. According to Peerberry, under the terms of this guarantee, each entity in each group guarantees the payment of all liabilities of the other entities in each group. This is a significant improvement for Peerberry investors, where previously only some loan originators received these guarantees.
We have taken the value of these guarantees into account when performing our ratings. We begin with assessing the overall ratings for each group. We have then rated each subsidiary to take into account the value of the guarantees. The subsidiaries have lower overall scores than for the holding group. The reason is that there is always a risk that the guarantees are not honoured in the future, either for technical, legal or financial reasons. Our score haircut reflects these extra risks, compared to owning a direct loan issued by each holding company.
For the holding groups that 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).
Since the outbreak of COVID-19 Peerberry investors have been reporting a good experience, with no delays to withdrawals, or unexpected increases in default rates. Availability of loans has been falling as the loan originators have been reducing the volume of new loans they issue. We recently interviewed the CEO of Aventus Group, which you can read here.
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.
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 loan originators that rely heavily on their group guarantee score are inherently higher risk than others that have better individual scores for profits, capital levels, size and track record.
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.
Peerberry has recently launched a bonus offer that equates to 2% for smaller investments, and scales to 1% for larger investments. Full details are on its site. To take advantage, click on this link, open a Peerberry account, and you will automatically qualify. Available until December 31 2020.