P2P lending service Bondora* has announced that in future it will focus completely on its hands-off investing product Go&Grow. From February 27th, the products called Portfolio Pro and Portfolio Manager will be discontinued. These allowed investors to select into which individual loans they wanted to invest.
Bondora originally started and grew big with investment into individual loans and only 2018 introduced the simplified Go&Grow product which soon became very popular. Over the years Go&Grow became more and more important for Bondora as investors seemed to prefer the easy to understand product with a fixed interest rate.
Being a P2P lending platform, and the fact Bondora havent survived a major financial crisis, the risk is fairly high. Adding on top of that the no buy-back guarantee and you have a high risk somewhat high return asset.
One of the features within Bondora is the tab called “Cashflow” which shows you the planned interest payments in a graph and table. This way you can monitor your planned and actual interest payments, giving you an idea of how much you make each month. It also lets you set a time interval, giving you insights into future earnings and principal repayments.
Go & Grow is much like a high interest savings account, as you just deposit money into the account and Bondora invests the money in a portfolio which gives you a flat rate return of 6,75%. You can withdraw the money anytime you want (€1 withdrawal fee) which is very convenient, compared to the less liquid way of buying and selling loans.
Portfolio Pro lets you set up a more customized investing profile, in regards to countries, ratings and loan durations. But still it is very straighforward, once you have selected your investing profile, you simply click “Start investing”.
They focus on unsecured consumer loans with principal amounts of €500 to €10.000 and repayment terms ranging from three to 60 months. In 2014 the UK Financial Conduct Authority (FCA) grants Bondora an interim license and in 2016 it gets licenced by the Estonian Financial Supervision Authority (FSA) as a credit provider.
Bondora issue the loans themselves through their parent company Bondora AS, which retains a share of the risk in each loan. The platform basically distribute shares of loans to investors, giving the borrowers below market rate loans and providing the investor with a much needed higher rate of return on investment.
Bondora was established in 2009 (post financial crisis) and has been one of the faster growing crowdlending platforms. With currently 288.000 customers (borrowers) and approaching 35.000 investors (lenders), it has issued over €123mio in loans.