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Post by saraph on Jul 13, 2016 7:54:08 GMT
Did you guys invest? What are your thoughts?
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,317
Likes: 893
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Post by JamesFrance on Jul 13, 2016 8:44:59 GMT
I would need to know a lot more about the recovery process for defaults. There seems to be a plan for sale of defaulted loans like Omaraha which may be interesting if more information is given, but if it is anything like Bondora where loans are extended for years and many seem to repay nothing ever, but are still shown as "profit" I would not be interested.
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yacop
Posts: 68
Likes: 42
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Post by yacop on Jul 13, 2016 17:56:03 GMT
Who wants to be the guinea pig? Please do not be shy and raise your hands.
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Post by gmaxkenny on Jul 13, 2016 17:56:39 GMT
The expected rate seems to be around 15% and if attainable might be of some interest however for the moment I prefer 13% with buyback. It depends on which model they use to deal with defaults and from the information on their site it seems more like the Bondora model which I would have no interest in. I will just watch how it develops for now so wont rule it out completely,I learned the hard way of looking at headline rates and diving in before I really knew what I was investing in.
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Post by geoffrey on Jul 14, 2016 15:50:15 GMT
I just spent a tedious quarter of an hour clicking backwards through the 252 pages of loans on Twino. Of the 252 pages, only the first 99 pages are current (green) loans, and the last 153 pages are stuffed full of delayed or extended loans. I realize that extension is not necessarily delinquent, but it does suggest someone who is having difficulties. It's not possible to calculate any kind of default rate from this because paid-off loans are obviously not shown in this list, but I imagine that a good proportion of those loans will need to be bought back by the guarantee. Twino's own figures suggest a provision for "doubtful" loans of €17.6 million out of a loan book of €59 million which to my simplistic mind suggests they expect 30% of loans to be delinquent. Just counting pages, the number of "doubtful" loans as a proportion of the current portfolio is double this. I don't know what this tells us, but for sure, the underlying interest rate of these loans must be well into payday loan territory to return 12% or 10% with the buyback guarantee...
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,317
Likes: 893
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Post by JamesFrance on Jul 14, 2016 18:01:03 GMT
Many of the available loans can be on sale from investors as there is no separate secondary market, so you cannot calculate any proportion of extended or overdue loans by looking at the market. I often list extended 1 month loans as their interest rate is lower than longer loans.
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Post by Deleted on Jul 15, 2016 14:01:06 GMT
On an average I had about 75% of my loans either extended or bought back after 30 days.
(I limited my investment to €100 per loan and had about 300 loans at any given time)
I've now pulled out though, given the euro to £ exchange rate.
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Post by geoffrey on Jul 16, 2016 14:27:35 GMT
So I'm not really understanding how Twino breaks even. If it's paying us 10-12% , guaranteed, and they have 75% extended and of those, let's say half default (they themselves estimate provision for 30% of loans to be doubtful). So the underlying interest rate for this to make any kind of sense must be astronomical, no?
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Rob
Posts: 138
Likes: 36
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Post by Rob on Jul 19, 2016 10:16:21 GMT
Until recently, Twino was offering 24-month loans at 14.9% interest rate with Buyback guarantee. Now it is offering 'B'-rated loans with no guarantee for an "Expected Return" of 15%. This includes the assumption of re-investment of the interest received (presumably in more 'B' loans), whereas the 14.9% does not. So I do not think that this is a good deal at all as Twino is effectively offering higher-risk loans for a lower rate than it was previously offering guaranteed loans.
I note that there have been no 'A'-rated loans yet. With 'B' offering 15% Expected Return and 'C' offering 16% Expected Return, I assume 'A' would offer 14% Expected Return. As you can get guaranteed loans at 13% interest rate which is 13.8% Expected Return, it would then not make any sense to invest in 'A' at 14% Expected Return with no guarantee.
I think that the higher-risk loans need a substantially higher interest rate to justify buying them.
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Post by saraph on Jul 20, 2016 12:59:23 GMT
I can't help but to assume this "expected 15% and 16%" is just not gonna be accurate at all. I can imagine the roller-coaster. We shall see.
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Post by littleinvestor on Jul 20, 2016 22:55:10 GMT
On the other hand, I see on Mintos e.g. 15% loans selling without buyback for whichever type of ungrounded loan reasons selling like croisants in a bakery...
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Rob
Posts: 138
Likes: 36
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Post by Rob on Jul 21, 2016 6:43:44 GMT
On the other hand, I see on Mintos e.g. 15% loans selling without buyback for whichever type of ungrounded loan reasons selling like croisants in a bakery... Yes, but: 1. The interest rate quoted on Mintos has not been inflated by the inclusion of the assumption of re-investment of the interest 2. If it is a mortgage loan or certain business loans, it is backed by collateral so you should get your money back if it defaults 3. For these types of loans on Mintos, I believe this is the actual interest rate being paid by the borrower, not a small proportion after the majority has been skimmed off by the loan originator
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Post by littleinvestor on Jul 22, 2016 10:06:06 GMT
I don't totally agree with that; my experience thus far on both platforms doesn't show me a higher return for similar investments on Mintos than Twino ; Regarding the collateral's, there are plenty of business loans without collateral - e.g. www.mintos.com/en/20238-01 is 60 days or more late, from the provided balance sheet one could have already seen the short term liabilities could not be covered by the fixed assets or cash - I see plenty business with low cash flows taking loans at bad LTV, I doubt the recovery process produces something in case of bankruptcies. I have personally not had the experience, but I heard of similar cases on other platforms, money is rarely returned? With mortgages I doubt the process goes any easier e.g. www.mintos.com/lv/12691-01 Whether or not the loan originator is skimming off a proportion, I don't think we can verify that; most balance sheets provided by loan originators give too little detail.
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Post by saraph on Jul 22, 2016 20:34:27 GMT
I just spent a tedious quarter of an hour clicking backwards through the 252 pages of loans on Twino. Of the 252 pages, only the first 99 pages are current (green) loans, and the last 153 pages are stuffed full of delayed or extended loans. I realize that extension is not necessarily delinquent, but it does suggest someone who is having difficulties. It's not possible to calculate any kind of default rate from this because paid-off loans are obviously not shown in this list, but I imagine that a good proportion of those loans will need to be bought back by the guarantee. Twino's own figures suggest a provision for "doubtful" loans of €17.6 million out of a loan book of €59 million which to my simplistic mind suggests they expect 30% of loans to be delinquent. Just counting pages, the number of "doubtful" loans as a proportion of the current portfolio is double this. I don't know what this tells us, but for sure, the underlying interest rate of these loans must be well into payday loan territory to return 12% or 10% with the buyback guarantee... I just checked 12% 1 month loans. All of them (73 pages) are either delayed or extended. That makes me a bit worried.
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Post by littleinvestor on Jul 25, 2016 23:39:02 GMT
I would not be worried, perhaps just demand goes way over supply - I see on the 25-7 though 27 pages of 12% loans were added for 1 month duration
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