IMPORTANT – Please read!
In the last few weeks concerns appeared in social media that some things don’t look ok with Grupeer (possible scam), at least with some of their loan originators. There are also reports of delayed withdrawals, including on my side.
For more details visit this post by Ido Shkedi. You can also join this Telegram group for real-time updates.
In fact, in the last 2-3 months I gradually lost confidence in Grupeer. I have started a process of reducing my stake on them. Main reason is for their inability to deliver on things they have promised over and over again, and the complexity of understanding the relationship with their loan originators.
In this post we will review Grupeer, one of the rising platforms of the peer-to-peer lending industry.
I will show you how to get started and provide you the best tips and tricks based on my own experience. I invest in Grupeer from 2017.
What is Grupeer?
Grupeer is an online marketplace for loans. It allows investors to buy shares of loans originated by a variety of lending companies around the world.
It launched in 2017 in Latvia and they had a strong growth from the very beginning, becoming very popular among investors.
From all the research I did so far, most of the people who have Mintos in their portfolio also have Grupeer.
I wrote a post about that: How to Invest 10.000 EUR in P2P? 15 Bloggers Reveal Their Best Ways!. Check it out to learn more.
Grupeer has over 20.000 investors and they issued around 60 million EUR worth of loans. They recently reached an important milestone of over 1.5 million EUR payed to investors in interest.
How Grupeer works?
Grupeer is very similar to how Mintos works. Basically, it’s an online marketplace where loan originators offer pre-funded loans for people to invest in.
In this way, the loan originators can expand their business, by freeing up money to invest in other loans.
Loan originators on Grupeer
Unfortunately, Grupeer is not as transparent as Mintos when it comes to loan originators. But they are doing steps in the right direction.
They have created this page where they started to add information about loan originators.
For now you can find the basics and a blog post. For some, you can also find a presentation, which it’s useful to better understand how solid that credit company is. Otherwise, we don’t have yet any financial reports about them, which is not ideal.
One last note is that you won’t find all the loan originators on that page. It seems that they are working to add all of them, but honestly I don’t understand why it takes such a long time.
Update June 18, 2019: Grupeer read my review, and reached out to me to say that they only list ACTIVE loan originators on this page. So they DO have all the loan originators in there, but only those that matter for new loans. That makes sense now, as it was confusing to just see some of them, and the others not.
Anyway, there is a clear need of improvement in this area, and happy to see they are taking action and making things better and more transparent for us. A few months ago we didn’t had anything.
Update July 10, 2019: Grupeer posted on their blog a roadmap, which states that they will introduce ratings and financial performance statistics for loan originators in Q3 2019. That’s awesome! Read the full post here.
Update November 25, 2019: Grupeer has finally added ratings to their loan originators. At least now we have a way to differentiate them somehow. It’s not ideal yet, the next being disclosing financial reports of originators. Find them here. Also you can read their post introducing the ratings.
For now is clearly hard to make an informed decision when picking up loan originators due to limited information. To make it easier, I am going to comment on a bunch of them.
Another loan originator from Mintos who joined Grupeer. They can also be found on Viventor and Bondster. This seems to become a trend.
Update July 11, 2019: Grupeer announced via newsletter that they are removing Kviku from the platform. That was a short relationship, since they only joined in 2019. All clients that have invested in Kviku will receive their principal back by the end of July 2019, including the interest for that period.
They can be also found on Viventor. In this interview, Vlad, the COO, mentions that loans are fully segregated from those originated on other platforms, which is good. I assume that’s the case also for Kviku and DoZarplati.
It originate loans on its own, but it also borrows other loan originators (the deal partners). Keep reading to learn more about deal partners.
Primo Invest SIA
It focuses on real estate projects. They brought in probably the most famous project on Grupeer so far – Promenada building in Brest (Belarus).
Currently, they have other interesting projects, but probably the one that stands out more is Impersky. This project is a multi-purpose building, containing Class A offices and a hotel. Is being built in the city center of Minsk, Belarus. Currently there is a high demand of office spaces due to booming IT industry.
The cool thing is that you can see how the building is being constructed. Check progress on their website. Make sure to use Google Translate to get your way around. Here is also a Youtube video from just a week ago with a nice birds-eye view footage.
I am getting excited a lot about these kind of projects. It’s amazing to see that you can contribute to the construction of a huge building like this, which otherwise was only accessible by wealthy individuals.
A24 Finance and Ibancar
For now, they are the only who offer the newly introduced Loan Collateral Protection (again, keep reading to learn more). However, there is a downside. For example, A24 Finance has loans with lower returns. They offer 10% at the moment of writing this. Of course, the risk is also smaller.
Grupeer only offer business or real estate loans. They don’t have personal loans (or pay-day), as they believe that they are riskier and have higher rates of default (true).
However, they still wanted to offer investors access to pay-day loans through deal partners like Credito, StikCredit, and so on. And they found an interesting solution to do everything at a lower risk.
What happens is that they don’t allow investors to get direct exposure to individual loans, but rather compile them together and sell via an intermediary like Finsputnik Platforma.
In this model, Finsputnik Platforma issues a business loan to the deal partner loan originator (Credito), which in turn gives investors the claim rights to a portfolio of pay-day-loans.
This is a creative way to protect the investors from the defaults of a few individual personal loans. All that matters in the end is that the whole portfolio of individuals loans to be profitable.
Unfortunately this also creates a lot of confusion among investors, and makes it hard to understand in what you’re investing.
Here is a screenshot that shows you how to recognise such loans in Grupeer.
One particularity of Grupeer is that the majority of loans are non-amortized. Is important to acknowledge this. This means the principal is paid at the end of the loan term and monthly payments contain only interest.
However, they have recently implemented amortized loans as well. The difference is that part of the principal is payed monthly over the loan period. Interest will be then calculated from the remaining principal.
Usually amortized loans are a better choice, but don’t make a big deal about that. Per my knowledge, only Monify offer these kind of loans for now.
Skin in the game
It’s a mechanism that requires loan originators to retain a 5% stake (sometimes Monify offer 10%) in each loan. This ensures they list high quality loans, otherwise they will also lose money.
In other words, risk is not being fully offset to investors, maintaining a good balance.
Collateral loan protection
But what does it mean?
Collateral loan protection makes sure that a loan is fully covered by collateral (a property, car, or other assets…).
This comes in addition to the buyback guarantee, which reduces the risks even more. To find these kind of loans, you need to look for an umbrella icon, like in the screenshot below.
How Buyback Guarantee works on Grupeer?
I talked about it in the post on P2P risks but I want to add clarifications here specifically for Grupeer.
First of all, I would like to say that Grupeer seems to be the only platform with real estate and business loans that come with buyback guarantee protection in case of default.
The buyback guarantee protection will kick in after 60 days a loan missed payment. It will also pay for the interest during those 60 days, for all loan originators. From this regard things are much simpler than on Mintos.
Fortunately enough it was never needed for this protection to be used.
Why invest in Grupeer?
Grupeer is a good choice as it allows you to invest in high interest real estate and business loans pre-funded and protected by buyback guarantee.
Currently I am not aware of any other platform that offers this.
That was a short explanation, in just a few words. Now let’s understand that better and go through all reasons of investing in Grupeer.
REASON #1 – Real estate and business loans
Grupeer focuses on real estate and business loans.
This type of loans allows you to diversify your P2P portfolio. Mintos alone is not enough for this job, as they focus more on personal loans.
We also have new players like Crowdestor, Envestio. And the more traditional ones: Crowdestate, BulkEstate, EstateGuru. But those are riskier, as they don’t really have the same Buyback Guarantee protection like Grupeer does.
On top of that, loans on Grupeer are pre-funded and the minimum amount you can invest is 10 EUR.
Knowing all of the above, Grupeer seems the obvious choice.
Personally, I find the real estate projects very appealing. As you will see, they have a dedicated section for them (Invest -> Development Projects).
There you will find the ones that are still active and you can invest in them, but also old ones, that have been either fully invested already, or even fully completed (reached maturity).
I invested in many of these projects, but probably the most famous one is called Promenada, a residential and commercial building from Belarus.
Additionally, for this project there was a webcam, which allowed me to track realtime the construction of the building.
REASON #2 – Default rate is 0 (zero)
One thing that I mention every time when I’m being asked about Grupeer is that default rate is 0 (zero). As far as I’m aware all loans have been paid on time without any delays.
Not a lot of platforms can brag with such a performance. It just shows the quality work the team is doing to pick up businesses and real estate projects to invest in.
In comparison, on Mintos around 15% -20% of my loans are delayed and will eventually benefit of the buyback guarantee. But to be fair, my Mintos portfolio has only personal loans, which usually have higher default rates, so maybe not the best comparison.
REASON #3 – Higher returns
REASON #4 – Cashback campaigns on Grupeer
Grupeer’s cashback campaigns are a good way to maximize your returns on the platform. I’ve been using them from start, as they constantly had some you could benefit off.
To invest in loans with cashback campaigns, look for those with the EUR sign inside a blue circle, as seen below.
My current situation on Grupeer after 2 years
Pretty great, I would say!
I invest with them from September 2017, with amazing returns, and no real problems so far. All the loans are on time, no delays, being very happy about that.
Unfortunately not everything is as it should be. Nothing big to worry about. Keep reading to learn more.
One of the most annoying problem I have with Grupeer is that they don’t report the return of investments. We have to do our own math.
Update July 10, 2019: Looks like they will be making improvements in this area by end of Q4 2019. Read more here.
That being said, I’ve used the good old XIRR method and I have a 14,41% annual return.
I’m doing better than the platform’s medium return as I have also included the profit made from cashback campaigns.
At this point I have the most money on Grupeer, around 63% of my P2P portfolio.
Due to diversification reasons and a more balanced allocation of my P2P portfolio I want to reduce my exposure on the platform. I won’t do that via withdrawals, but rather pouring more money in other platforms.
Check out here what is my ideal P2P portfolio if I am to start all over again today.
How to open a Grupeer account?
Opening an account on Grupeer it’s easy and would not take you more than a few minutes.
You need to be at least 18 years old and have a bank account in one of the EU Member States, Norway, Iceland, Liechtenstein or Switzerland. I believe that even if you have a bank account outside those countries mentioned above, you can still contact support and figure out a solution.
Unfortunately they don’t accept any Latvian residents.
After registration you also need to verify your identity in order to be able to withdraw your money. This is an EU anti-money laundry requirement, so unfortunately you can’t skip it. But it’s easy enough, so I don’t think you’ll have problems.
Start creating an account using this link or the button below.
This is an affiliate link and will be an easy way for you to support the maintenance of this blog.
More than that, if you sign up using the link above until end of June 2019, you will receive an additional 10 EUR for any initial investment.
How to invest in Grupeer?
Now let’s see step-by-step how you can start investing in Grupeer.
Transferring money to Grupeer using Revolut
The first step you need to do is to transfer money to your Grupeer account. I recommend starting with small amounts, until you get used to it.
Grupeer allows you to send money to the platform using regular bank transfers, TransferWise (only until August 1st, 2019), or even Revolut.
My recommendation is to use Revolut, as is free and very simple to use.
From what I have read (not tried myself!) things are more complicated if you use TransferWise. It seems that you can’t make withdrawals from Grupeer to your TransferWise account. I believe the problem is that you don’t have a unique IBAN.
But there are more problems than that.
Grupeer will NO longer accept payments via TransferWise starting with August 1st, 2019.
So I am recommending to stay away from TransferWise, and just use Revolut.
Let’s see exactly how to transfer money to Grupeer using Revolut.
In the Revolut app, you need to create a beneficiary using the details from the Deposits page on Grupeer. After that we can execute the transfer by selecting the newly created beneficiary and filling your details.
Good to know!
Always make sure to fill up the payment reference with your Grupeer Investor ID, otherwise your money will be blocked.
If something goes wrong, and your money haven’t been deposited in Grupeer‘s account in 2-3 days, shoot an email to their support and they will resolve the problem in a few hours.
I’m not sure why, but things are moving much slower in this regard with Grupeer, when compared with other platforms.
Update July 10, 2019: According to their newly released roadmap, they promise to improve deposits and withdrawals by end of Q4, 2019.
One more advice.
Grupeer recently changed their bank account and that created problems for many.
Always check their Add funds page for latest payment details before sending any funds.
See below a series of screenshots that should help with this whole process of transferring money via Revolut.
As for withdrawals, I’ve made a quick test. I sent money to Revolut and, as expected, things went without a glitch, receiving the funds in about 2 days.
For more details on how to use Revolut to send (or withdraw) money to P2P platforms, check out this article. It fully describes the whole process, using Mintos as example, but flows are identical otherwise.
Multiple loans can be part of the same project
Before moving forward, I want to explain a particularity, which is important to understand.
Grupeer might split loans for the same project (or borrower) into smaller parts of 10.000 EUR up to 50.000 EUR.
This creates a lot of confusion. It makes it hard to understand how much you’re exposed on a specific project. I truly hope Grupeer will resolve it soon through some smart UI/UX.
However, the reason they are doing that is understandable and good for us.
Let’s take real estate projects as an example. By splitting the project in multiple loans is the way they control the construction process. Loans are related to specific construction stages, and when a stage is finished, they release the next chunk of money. They don’t release all the money to the borrower right away.
This is a great way to ensure our money is spent for the right purpose. It makes the borrower work hard for every stage, otherwise they won’t get the money for the next one.
Here is a screenshot that shows how the project called Impersky has many parts (57 actually).
Manual investments on Grupeer
In the beginning I was doing manual investments, which were time consuming, as you would expect, but also fun at the same time. Nowadays I switched to Auto Invest, but that’s not ideal.
To start manual investments with real estate projects go to the menu Invest -> Development Projects and for all the others to Invest -> Loan deals. Nothing special to say or explain here, as soon as you’ve picked a loan, you would click on the Invest button and then follow the steps.
If you do have the time, this is the method I recommend to invest in Grupeer. Auto Invest is good, but it has some flaws.
Automatic investments on Grupeer. How to configure the Auto Invest tool?
Currently I only use the Auto Invest method (Invest -> Auto-invest) to invest on Grupeer.
I am not very happy with it, but due to lack of time, I am willing to compromise.
But what’s wrong with Auto Invest?
Unfortunately there is no way to fully control in which loans it will invest.
I am talking specifically about loans which are part of the same project (see Impersky real estate project as example – it has 57 loans)
What happens is that the Auto Invest tool will end up investing into this project multiple times, just because it will invest into all 57 parts.
So if we do a simple calculation, and assuming we want to only invest 10 EUR per loan, Auto Invest can allocate 57 * 10 = 570 EUR for this project. That can be a problem.
And we have no setting on Auto Invest to prevent this.
If you’re okay with this limitation, go ahead and use it, otherwise, find the time to do everything manually.
However, there are signs that Grupeer will resolve this problem soon, so looking forward for that to happen.
Let’s now see how to actually configure Auto Invest.
You can create multiple strategies with different settings and you can prioritize them, but I don’t think you have to. I believe a single strategy will do just fine.
The platform is smart enough to prioritize loans with the biggest return (compared with Mintos, where is not working like that), and will invest in those at first. Only afterwards will pick loans with smaller return.
Here is a screenshot with my Auto Invest settings:
A few words about these settings:
- Loan type – I have only selected Business Loan and Development Project for two reasons: they don’t currently have other loan types available on the platform, and anyway, I wouldn’t want to invest in other types.
- Country – I’ve selected all countries available;
- Loan originator – I don’t like the loans for financing other loan originators which have pay-day loans. So try to avoid loan originators like Credito, NordCard, Pozyczka Pieniedzy, DoZarplati, etc.
- Interest rate interval (%) – I chose to invest only in loans with returns over 13%.
- Term interval (months) – I prefer loans with a duration of no more than 12 months.
- Strategy auto-invest limit – no limit, as this is the only strategy, it wouldn’t make sense otherwise.
- Max amount per project – for diversification reasons and to reduce my risk, I am only investing 10 EUR per loan.
- Repayment type – unfortunately as we don’t have too many loans with full amortization on Grupeer I’m forced to choose both types.
Update July 10, 2019: Grupeer made small improvements to Auto Invest by adding ability to see how many loans match your criteria. Read more here.
What I like about Grupeer?
- High returns, above market average.
- Focus on real estate and business loans.
- Buyback guarantee protection on all loans.
- Default rate is zero and no delayed payments as well.
- Detailed information on each loan – probably best loan descriptions in the industry.
- Although it might require other types of improvements, I like that Auto Invest will prioritize loans with the highest return.
- Great support, with fast and clear responses. As I have seen other people complaining about their support, this can be a biased opinion. Well, I hope those were only isolated incidents. So far everything has been great for me.
What I don’t like about Grupeer?
- No secondary market – that means there is no way to exit earlier. I consider this to be a big deal, so invest in Grupeer if you know you won’t need those money anytime soon. Update July 10, 2019: looks like secondary market will be introduced Q1 2020.
- Auto Invest has no option to limit the amount invested to a project – as there could be many loans for a project, then it would be great if i can limit the amount invested in that project, and not just per loan.
- No data on return of investment – so you will have to do your own math using XIRR.
- Loans have no amortization – most of them don’t have this, so you will only get the principal at the end of loan term.
- No status indicator for each loan – is almost impossible now to know what’s the status of each loan, unless you manually go through every single one of them.
- No statistics on loan originators allocation – so it’s extremely hard to know if your over exposed on a specific loan originator.
- Not enough information about loan originators and no rating system (like Mintos has) – I would appreciate detailed information on each and every loan originator, including financial data; However, there is enough info on the loans themself. Update November 25, 2019: They added ratings for their loan originators. You can also read their post introducing the ratings.
Per my understanding from Lars’ YouTube interview and also from this post of Ido from colminey.com, Grupeer has heard the investors loud and clear and they are working on addressing at least some of the problems.
Update July 10, 2019: They released a roadmap that states they will resolve all problems.
Anyway, they are shifting their focus to become a much more customer centric company, which is great news for us.
Looking forward for that to happen!
That’s it folks! I hope you found my Grupeer review useful and you had something to learn from it.
As a conclusion, I can really say I enjoy Grupeer and I will keep using them.
You can get high returns of over 14%, on business and real estate loans with a buyback guarantee. Add to that no delays or defaults so far.
And knowing they are already taking steps to improve the platform makes me even more excited about them.
If you enjoyed this article and you think you’re going to open a Grupeer account, feel free to use the affiliate link below.
I would be grateful and you will support me to write more awesome content in the future.
If you sign up using the link below until end of June 2019, you will receive an additional 10 EUR for any initial investment.
Share your thoughts on Grupeer
Are you already investing with Grupeer? If so, please share your thoughts in the comments section below.
How does the platform compare to Mintos?
Do you love the real estate loans as much as I do?
What ever you think, feel free to leave a comment in the section below or vote.
Until next time,
P.S. In the next post we will discuss on how much money to allocate to our Peer-to-Peer portfolio. We are going to talk about P2P as an asset class, as part of a full investment portfolio, along with bonds and stocks.
Disclaimer: This is a personal blog, containing our opinions and views, and nothing you read here can be used as investment advice or recommendation. You should also know that some of the links in this post may be affiliate links, meaning, at no cost to you, I may earn a commission. Read the full disclaimer here.