Grupeer is a P2P platform that was registered in 2016, launching in February 2017. Company operations are based in Riga Latvia. Grupeer offer two types of loans; loans issued by credit institutions to individuals and loans issued to enterprises.
*Affiliate link. We will receive a bonus on investments made, thanks for you support!
Why do we like what we like?
1. High Returns
Grupeer provides investors with the opportunity to earn a very impressive rate of return, averaging around 14%. Of the loan originators currently listed, Primo Invest currently provides the highest rate of return at almost 14%, and Credito provide the lowest rate of return at 12%. As always, we recommend investors conduct their own research prior to investing and do not focus solely on return rates, as risk tends to increase with return.
2. Strong Safety Net
a) Buyback Guarantee (All Loans)
All loans listed on Grupeer provide a Buyback Guarantee, reducing the risk for investors to lose their investment. This means that if a loan is delayed by more than 60 days, the loan originator steps in and repurchases the loan from the investor. As such, investors should focus their attention on the long term viability of the loan originator, rather than each individual loan.
b) Additional Security (Some Loans)
Additional collateral is provided for certain loans. This can be viewed in the ‘borrower details’ section of each loan. Depending on the loan type, collateral can include real estate, a personal guarantee or a guarantee from the parent company of the loan originator, amongst others. We would recommend investing in loans that have this additional security as it reduces loss on default.
c) Skin in the game
All loan originators listed on Grupeer are required to hold a 5% stake in the loans provided. This is a best practice technique seen across the P2P industry and is good for investors, as it aligns their interests with the loan originators.
3. Geographic Diversification
Grupeer provides investors with the opportunity to diversify across a number of geographic locations. The advantage here is that if a particular country is struggling economically leading to an increase in default rates, there is a smaller percentage of capital at risk.
Why don’t we like what we don’t like?
1. Low Liquidity
When an investment is made on Grupeer, capital is tied up for the duration of the loan. There is currently no secondary market or ‘invest and access’ products such as those seen on Mintos (see review here). Grupeer are currently working on introducing a secondary market, expect to see this in Q1 2020. Secondary markets are an important tool for investors that are looking to obtain a return on their capital but do not want their money to be tied up for a long duration.
2. Basic Website
There is a basic feel to the website ergonomics on Grupeer, and it gives off the impression that the platform is playing catch-up to larger players in the industry:
- The homepage showing an overview of investment performance lacks detail and can be improved. Grupeer have acknowledged this and have announced that improvements are coming in late 2019.
- There are no FX opportunities as all loan originators are euro – dominated.
- The auto invest feature is quite basic and does not provide investors with the opportunity to input detailed settings.
Having said that, it could be argued that the simplicity of the site is actually an advantage for the platform. Setting up a new account is simple and investments can be screened and made with just a few clicks. For people new to investing in P2P platforms and want a quick and easy process, this is a great place to start.
3. Transparency of Loan Originators Listed on Site
Data available on the loan originators listed on Grupeer lacks detail and transparency. All loan originators listed currently have a stated default rate of 0%, which is not an accurate reflection as loan defaults can and do occur often.
Additionally, data such as Financial Statements for loan originators is not yet accessible on the site. Grupeer have acknowledged this and plan to provide additional information on the financial statistics of loan originators from late 2019.
Grupeer provides the opportunity for investors to make a good return on their capital. Their are strong inherent safety nets in place reducing the risk of losing money invested. A few improvements to the site and additional features and there is no reason why the company can’t grow to become a bigger player in the P2P industry.