Bondora Review

By
Rafael Vieira (CreativeCompany.com)
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bondora
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Bondora

Bondora is a European p2p lending marketplace. It is based in Tallinn, Estonia. Estonia is Baltic state which is part of the European Union. A p2p marketplace enables borrowers to borrow money from multiple investors.

Strengths:

Investments Structure:

  • No fees for investors.
  • Micro-investments in many loans, spreading your risk across many borrowers.
  • Auto investing – Portfolio Manager – Hands off approach.
  • 20% returns up to (remember returns are directly related to risk).
  • Bondora operates in Spain, Slovakia, Estonia and Finland. Giving you geographical diversification.
  • Bondora is regulated by the Financial Conduct Authority (FCA) in the United Kingdom.
    Estonian Financial Supervision Authority (FSA) has granted Bondora a credit provider licence.

Statistics:

  • 1 billion of Euros of loans since they opened in 2009.

Secondary market:

  • Investors can sell and buy defaulted loan parts (60+days overdue).
  • Liquidity on the secondary market is higher after the transaction fees have been removed.

Defaults:

  • Collection procedures in place to retreive defaulted loans.

Weaknesses:

  • You can set the auto invest to purchase a collection of loans according to three settings. However, you cannot fine tune the auto investor tool to buy only loans with an A or AA rating, you can only do this via the API.
  • There is no buyback guarantee on the loans.
  • Recovery rates vary by country.

Opportunities:

  • Investing via an Estonian firm defers tax payments.
  • Research suggested that most loans default in the first 6 to 9 months. After that, the probability of default drastically falls.
  • The recovery rate after two years for loans that have defaulted is almost 80%
  • You can use https://beeplus.me/ to target specific loans

Threats

  • Newcomers to the platform may invest too much too quickly without understanding the system, and it’s nuances first.
  • Chasing high returns can be seen as profitable, but the return is a factor of risk. This can be “forgotten” by some blinded by the high returns.
  • On the extreme end there is the threats of Estonia being part of a conflict with it’s neighbour. Given Estonia’s geographical location it would be the first to experience any disruption.

Visit Bondora and register on Bondora to learn more about this platform and p2p investing.

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