Loan types available
Website and investment product features
What is Robocash? How does it work?
The Robocash Group has been operating since 2010. It established a P2P site in 2017 to help it fund its activities. The P2P operations are based in Riga, Latvia. You can read our interview with the CEO of Robocash, Sergey Sedov here. The Robocash Group is one of the larger loan originators to offer P2P loans in Europe. As at June 2020 they had $71 million of assets and $42 million of equity. They are one of our highest rated loan originators due to their strong balance sheet and high profit levels. You can find our latest ratings here.
Typical rates at Robocash are currently 12% but they do tend to fluctuate and have been as high as 14% in the past. All loans come with a buyback guarantee for any loans that have a repayment delay of more than 30 days. In test portfolios we have run, the credit quality has been strong, with only around 10% of loans being overdue at any point in time. That is a low percentage for the type of lending that Robocash does. Most of the loans offered are 7-30 day ‘payday’ style loans but the group offers loans up to 12 months of duration.
Unlike most other sites, it does not give investors the option to individually select loans. Instead, investors are required to make use of the auto-invest tools. The auto-invest tool has most of the options available at other P2P sites. Investors can choose the interest rate range they want to receive, which countries to invest in, loan maturity length, maximum investment per loan, and reinvestment options. Multiple auto-invest portfolios can be created, and we would recommend taking advantage of this, particularly so that geographic diversification can be controlled by the investor. We prefer to create portfolios for each country with size limits on each, rather than leaving it to algorithms to allocate loans.
We think that Robocash could make some improvements to the layout and usability of its website. Some features are not described or explained very well. In particular it is not obvious how to tell the website to direct any spare funds into a particular auto-invest portfolio. The investor summary page that investors see when they log into their account is also a little bit confusing and could be improved. However, the platform itself seems to operate effectively, and it is relatively easy to keep all funds fully invested.
The country options currently offered are Spain, Kazakhstan, Vietnam and Singapore. The Singapore option is slightly unusual in that the funds are lent to a Robocash Asian holding company located in Singapore. It then uses the funds to lend to subsidiaries in various countries such as Indonesia. Robocash says that all loans are backed by a group guarantee.
Sending money to Robocash can be difficult for investors outside of the Eurozone. We have experienced some difficulties in sending test deposits to Robocash using payment services such as Transferwise and Paysera. Robocash does not accept Transferwise deposits, and Paysera required significant AML checks to be undertaken before releasing the funds. This will not impact the majority of people who have Eurozone bank accounts but it is something to consider for investors located in the UK and other non-EU countries that do not have bank accounts that are part of the SEPA system.
Robocash offers an incentive scheme to reward investors who place larger sized deposits. To qualify, investors need to invest at least €5,000. Investors receive higher interest rates on their portfolio as the amount they invest increases. The additional interest earned starts at 0.3% and increases to 1% for people who have invested a minimum of €25,000.
All loans offered on Robocash currently come from a single lending group – Robocash. The group has been profitable for several years now and it made a profit of $US 7.3 million during the first half of 2020, which is a very good performance. It says that it plans to IPO some time during the second half of 2021.
This strong performance has led to it becoming one of our highest rated loan originators. As all loans have a buyback guarantee, we think the main investment risk is whether Robocash goes out of business. How likely is that? At the moment, this risk appears to be fairly low, but as always, the financial results of loan originators requires constant monitoring.
Robocash Group is based in Russia and most of the countries it operates in are emerging markets that have higher levels of country risk. It also operates in Spain which has been heavily impacted by COVID-19 as well as borrower friendly rules introduced in response by regulators there. Overall though, the company seems to have been managing these challenges well up to now, and the proportion of loans with a ‘current’ status on the Robocash P2P site has been consistently high.
Overall, we think based on the rates available and the strength of the Robocash group, the risk vs reward is attractive.
We think that Robocash is one of the better options available for European P2P investors currently. It is currently in our Top 10 list of European P2P sites.
The site is best for European P2P investors who are looking to diversify their P2P investments across more than 1 platform. The loan originator, Robocash Group has a good track record. Even so, there is a limit to how much exposure an investor should have to any single loan originator. That’s why we think the best use for Robocash is to be included within a portfolio of different P2P sites, so that exposure to any one lending group (no matter how strong) is limited.
We think that Robocash could make some improvements to how the website functions, and to provide better explanations on all the various options it gives to investors. It can be difficult to quickly understand what loans have been invested in, the status of loans, and how to allocate more funds to different auto-invest strategies. However, in our experience, the customer support team are quick to answer any questions, and this would not stop us from allocating funds to Robocash.
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