Omaraha – official stats and finnish loans to invest

Again more then one month has passed since my last post on Omaraha. The platform keeps me busy, as it seems always something new is happening. Before I forget, I did not receive SIA Best Lizings financials yet, so if I don’t get them during the next 2 weeks, I will buy them for 9 Euro online myself.

2 weeks without an Estonian loan

Maybe I popularised Omaraha too much through this blog and sent them many new investors, and as a result I don’t seem to get any Estonian loans ūüėČ Ok, maybe this is only half of the story behind this situation. The main reason is that seemingly that there are just not enough Estonian loans, there were fewer added to the platform as usual. Further they cut the long term loans at the moment. I now try to get some by setting my autoinvests interest rate a little lower, or give a little more bonus away.

Finnish loans to appear shortly

For some days now Finzo (operator of Omaraha) offers loans in Finnland. The first batch of finnish loans shall appear Monday, 3rd July on Omaraha. Setting an autoinvest profile is already possible. Let’s be curious to see how many loans, at which rates and quality there will be. Often I expressed my concerns with platform’s expansion into foreign territory. One can see what happened with the Slovakian loans, there were and still are problems. In my experience finnish borrowers are relatively good payers, but inferior to Estonians. I have to be carefull with such universal statements, as the borrowers payment morale largely depends on which clientel the platforms are focussing. I will test and start with a small amount with finnish loans.

A look at official stats

Here you can get an overview of the actual loanbook. If we take a general look at it, it seems, that 2017’s default rate is tiny. We will get a clear picture in the coming months on this:

You can play around with the settings of the stats page and can for example see that low rated Slovakian loans performed badly and resulted in a loss (pooled view). It seems as my assessment to exclude these loans in future was indeed correct. What surprises me the most is that overall Slovakian loans they seem to generate nice returns. I can add to this observations my own experience where scores from 900 to 1000 performed better, but I guess I will also have to deal with defaults there. To be fair, I have to mention that my loan universe is to small to gain stastitically relevant or significant results from it.

You see, you have to face the platform to being able to invest there. This is a welcomed variety to investing in platforms with autoinvest and buyback only. If there are questions, do not hesitate to post.

Omaraha and slovakian loans

Howdy, today I will share some recently gained experiences about  Omaraha. Actualy I had planned to deliver an analysis of SIA Best Lizings’ financial figures, but until now I haven’t received any documents for that. Hopefully I will be able to deliver the analysis during June. 

As a lot of things happened in my portfolio I take the opportunity to share some experiences I gained during the last months. 

Slovakian loans

At the lefthand side you can see an overview of my investments. The blue loans are already paid back. These are all slovakian loans with a bad credit rating. Unfortunately they all defaulted without even paying a single dime. They were all bought back by a collection agency for 60 cents on the Euro. Better then nothing, but these loans hit me hard in terms of my yield and portfolio value. At least I know now first hand that the buyback really takes place after 100 days of delay.

As a consequence I stopped investing in slovakian loans with low credit ratings. As for the better rated loans I am not quite sure yet what I will do, I need to get a better understanding and will report back in some weeks. To be fair I have to admit that my little number of loans is too small for a valid sample. It could just have been bad luck with the allocation, but I have seen enough and don’t want to experiment further.

On the other hand I can confirm that estonian loans mostly pay back on time and I have only two investments with little delay. I believe this is a great example for platform’s foreign expansion and the difficulties they face there. Bondora as well had the same problems with slovakian loans. Do not get me wrong, I don’t say slovakian borrowers are bad per se. I believe the platforms focus first on subprime borrowers which have a hard time or no chance to get a loan in their country. So they are really welcoming any opportunity to get a loan. 

Estonian loans

As I already told you my estonian loans perform much better in comparison to the slovakian.  I remain confident that I will cover my losses with the returns from my estonian borrowers. You easily get 20 to 25 percent out of an average borrower. In my opinion this is much better then 50 percent from a non payer ūüėČ

 

Conclusion

The reasonable thing to do in my opinion is to lay my focus on Estonians, and put my experiment with low graded slovakian loans to an end. 

If your opinion is different or you would like to share your thoughts, be my guest and post a comment. 

 

Omaraha – a closer look at SIA Best Lizings

Recently I wrote a blog post about Omaraha. Somehow I am bound to that platform and feel the need to dig deeper. Refresher: Omaraha for me is a hybrid platform, as on one side true p2p loans are issued and on the other side a loan originator is financeing its activities through Omaraha: SIA Best Lizings.

What does SIA Best Lizings do?

Before I can answer this question, I need to explain some things. At the moment “payment guarantee” is a really hot topic in p2p land. Twino claims the invention, Lenndy¬†offers it for some time now¬†and Omaraha seems to really have invented it (or still the Swiss guys from¬† Ricola? ;), we don’t know for sure…). Jokes aside, as far as I know, the payment guarantee is serviced by Omaraha for the longest period. They name these loans “secured loans” and one can be sure to get paid on due date (capital plus interest). These loans are offered through SIA Best Lizings, which leads me to the topic.

SIA Best Lizings is a company specialized on consumer loans from Latvia. They operate under this brand since 2008 but have a total experience in this field for more then 15 years. Not bad to have a¬†track record¬†for that long. I have checked their homepage with the help of google translate, as it is only in Latvian and Russian. Well, I don’t have even a basic understanding of those languages, so google translate is the only solution for me ūüėČ It seems as a borrower you can apply directly for a loan, or do it at a retail store for example. Best Lizings partners with lots of businesses from various sectors (online shops, furniture stores, do it yourself stores etc). So you can go to buy a bed or a sofa and get the financeing done locally.

To get the liquidity for financeing such loans, Best Lizings is applying for the funds at Omaraha and offers these secured loans. They have a duration from 3 to 36 months and actually interest rates from 9 to 11 percent, depending on the duration. When I started investing with Omaraha, I got 12 percent for 6 months, pitty that this is not the case anymore but as addition to the portfolio some of them might not hurt. Or if someone needs planning security with their funds, these loans can be used.

Financial Figures

To evaluate how safe these loans are, I need to run an analysis from their balance sheet, income statement and their cashflow statement. These documents are not public. Balancesheet from 2015 for 8 Euro is the best I could find. So I asked Omaraha and they promised to make the 2016 figures public in mid May. I also requested the 2015 figures, but have not received it to date. So I ask for a little patience and will hopefully come back in May with my analysis.

If there are any questions, just post them or use the contact form.

Some news from p2p land

Today I have only some news and updates for you.

Swaper

With Swaper it always looks like there are no loans available. That’s not entirely true as new loans are added everday, but they get sucked in by the autoinvests. My money is always nearly completely invested. Within 4 to 6 weeks loans from a new country should be added to the platform and will increase the supply. I am not allowed to say which one at the moment. It won’t be Denmark, as they are¬†looking for ¬†staff there first. Denmark will follow after next.¬†Visit Swaper.

Saving Stream will be named Lendy 

As I mentioned before Lendy ltd is the operator of Saving Stream. Now the platform will adopt the same name.¬†Rumours say that the FCA made this one of some¬†mandatory conditions for Saving Stream to obtain fully authorised status.¬†There are no other changes at the moment, but maybe we will be confused by Lendy and Lenndy, the lithunian platform ūüėČ

Twino to offer payment guarantee loans

Twino has announced to offer loans with a payment guarantee in the near future, an invention by Twino. These loans will always pay on due date, this will give some planning security to investors. That’s nice, but these loans are no invention by Twino. Omaraha uses this procedure on their secured loans and Lenndy on their buyback loans. Maybe Twino did not know that, or didn’t look so hard ūüėČ

Estateguru is getting on my nerves, but the supply increases

Not really official news, but I have to get rid off it ūüėČ There is room for improvement for Estateguru in terms of investor communication. It takes days to get answers (if any) to emails and it looks like that late payers are handled with kid gloves¬†. There are borrowers that pay their interest installment always late¬†and it seems like as Estateguru is tolerating that. In the end I have to admit, that there is no default to date and all borrowers have paid up. As investor I cannot complain with the supply of new loans in the last 2 weeks. Nearly daily new loans are coming in and sometimes more then one per day. This is fantastic and hopefully sustainable.

Omaraha – a quick flashback

Some months ago I have begun to invest with Omaraha. After I got used to the platform’s functionality my investments go smoothly and as expected.

A deepened look at the credit scores 

I asked the support to give me more details about the credit scores (ratings). I would like to share this information with you:
901-1000 = very good, no problems in credit registers and also positive payment discipline in our company or in our partner companies.
801-900 = good, no current and past problems in credit registers and other information is positive.
701-800 = decent, can be new and unknow client without payment problems, or client who have had little payment problems in the past, but other information is positive.
601-700 = riskier, either younger clients or clients who have had previous payment problems, but currently have not.
How does my portfolio look?

On the left-hand side you can see all my loans and you’ll notice that three of them are marked yellow. This overview can be found in your account under investments.¬†I have decided not to upload the complete screenshot as there the borrower’s name is visible.¬†My 3 yellow projects are all Slovaks and have a score of 700, so they rank in the lowest category. I suspected that this would happen, so no surprises here. At first appearance this looks great, just exclude the 700ers and everythink is okay? Yes and no, as with some green loans there are minor payment problems. Some borrowers have paid a partial installement and then renegogiated the payment plan. So I expect some of the greens to turn yellow at some point. To get a good feeling about my portfolio’s performance I have to give it a closer look.

 

Detailled information about the credit history

If you click on a loan in your portfolio you get a list of actions taken by Omahara, to secure the funds. Unfortunately these informations are not available in English. I already let Omaraha know that I would welcome this information in English.  As there is no secondary market at Omaraha these infos are not really useful anyway. At the end it is most important how many funds I have gotten back.

With this in mind I am investing furher and give periodically some updates. If there are questions, don’t hesitate to post here.