An interesting discussion with Sergii Demchuk, CEO and Gytis Juškys, risk analyst at Debitum.Network. We discuss lots of interesting questions like how they saw the problems with Aforti before every other P2P platform and go into details about their due diligence, monitoring, and re-evaluation of loan originators.
Main topics we discussed with Debitum.Network:
- Debitum.Network is a relatively young platform, so let’s start the discussion with the health of the platform. There was an ICO at the end of 2017. How much your rise in this ICO, how big is your current cash reserve, and what is your burn rate?
- Debitum.Network is based on blockchain (etherium I suppose). How the price of Etherium affects your operating costs?
- What is Debitum.Network relation to DebInfo loan originator on Mintos?
- Debitum.Network was the first platform to detect the problems with Aforti. It happened long before Mintos and Viventor. I am very curious what are the red flags you spotted and what you do to protect your investors from losses?
- Please explain in detail the most important points of your due diligence process for LO evaluation and how often you reevaluate them?
- What measures do you implement to prevent fraud from loan originators? For example, how you get sure, that they do not upload the same loans on other platforms?
- How do you solve the possible conflict of interest with related loan originators like Chain Finance and probably Factris?
- Do you foresee problems in any of your current loan originators and what is your plan to protect your investors in this case? If so, can you name them? I would like to know your opinion about who is the safest and who is the riskiest loan originators on the platform?
- Debitum.Network applied for the investment firm’s license in Latvia. A major advantage is that an investor is entitled to a compensation of up to 90% of the defaulted amount but not more than 20’000 EUR. Let’s elaborate on this warranty. If let’s say one investor has 10,000 EUR invested in loans of LO and that LO goes bust does the investor will get all 10,000 EUR and when?
I strongly suggest to see full video recording of my chat with Sergii Dimchuk, CEO and Gytis Juškys, risk analyst at Debitum.Network at my YouTube channel. Recorded live on 05.05.2020 without any editing.
Debitum.Network chat – full video recording
If you looking for a new platform to diversify your investment you may give Debitum.Network a try.
My results on Debitm.Network
I use the platform since February 2019 and I am quite happy with my results. You can see them yourself. The screenshot below shows the result from a single €1000 lump sum investment made on 01.02.2019. No any deposits and withdrawals are made. The numbers a as of 20.12.2019:
The current results after two months of corona virus situation also looks quite good to me. Here are the results as of 05.05.2020:
The return dropped a little bit, but this is probably partly because I add about 1500 EUR new investments in the first months of 2020. Anyway, I am pretty happy to have above 9% yield nowadays. Considering the circumstances I also really the quality of my investment portfolio:
My opinion is that now is more important to focus on risk, not the return. To me Debitum.Network risk/return ratio looks quite appealing. I also like that the platform provides some very nice geographical and originators diversification.
I plan to write an in-depth review of the platform to share a my experience in the near future. The most important fact for me is that Debitum.Network was the first P2P platform to stop offer Aforti loans in march 2019. Thanks to a very timely move no investors are affected from Aforti troubles, unlike Viventor and Mintos. This real proof of good monitoring of loan originators. I hope the current crisis will urge more P2P platforms to radically improve their loan originators’ monitoring procedures.
My strategy on Debitum.Network
As a general rule, I prefer to use manual investing on most P2P platforms that offers business loans. I stick to this strategy on Debitum.Network, also. This gives me more control on risk. I prefer to study the borrower at least briefly before investing. This is my strategy on other SME loan P2P platform I like – Flender.
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Important disclaimer: Remember that I am just a casual investor, not an investment consultant! This not an investment advice nor recommendation of any kind! Always do your own research and be very well aware of risks associated with investing!
Join my P2P Discussion group
I would like to hear your opinion and discuss Debitum.Network as well as other P2P platforms available for European investors in my Facebook group https://www.facebook.com/groups/P2PLendingEurope/. You guys are very welcome!