I started investing with FinBee in 2016: during the years a lot of changes happened (almost all for the worse) but I still suggest you give it a try.

The platform is quite small, originating around EUR 1mio of new loans/month but steadily growing.

The very positive aspect of the platform is that their underwriting process works really well, in 3 years I had very low number of defaults among my investments.

Here a graphic proof of the expected and received instalments:

As you can see, the two lines almost overlap.

I am only investing in consumer loans with at least B rating and 17% yield or A rating and 14%. C rating loans are still acceptable but the rate of defaults is higher and in my opinion is not compensated by the higher yield. FinBee recently started to originate business loans: I think is good from a diversification point of view but I rarely invested in them because the default history is too short and yields are lower than consumer loans.

As you can see from this graph, yields went down from the launch of the platform:

Blue and Grey lines are consumer loans, green line represent business loans. It is important to focus on this dynamic because you want to be sure that the risk taken is still well rewarded when you invest.

FinBee used to have a fund to compensate defaulted loans, but it was discontinued. It is not clear how the defaulted loans are managed, if managed at all, that is why I tend to be so conservative. Typically if a loan goes in arrears (a monthly repayment miss for more than 30 days) I sell the loan in the secondary market with a discount between 15% and 20%. Once a loan is in default, last payment is more than 61 days late, you are not allowed to sell it anymore and, as I said before, its destiny is quite unknown.

FinBee is also charging a withholding tax at source, which reduces any interest payment by 20%. This is important to remember, because your final return will be affected by it.

If you do not want to choose the loans manually, they have an AutoLend function that does the job for you: I have a portfolio set up but I mostly manage the re-investable cashflows by myself.

Let me know what do you think about FinBee and your experience with the platform.

What I am reading now:

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