Finbee review. A Lithuanian p2p platform
It’s been over a year and a half since I first invested in the Finbee p2p lending platform so here is my honest and open review of it. As time goes along I will continue to update this article with more insights from me. And as always I would like to welcome everyone to leave their own personal feedback or questions about this platform in the comment section.
Main facts about the company and the Finbee.lt platform:
Finbee platform is technically made out of 3 companies, one working with business clients, one with regular people and one as an entity in the Czech Republic. So I will provide information about both of them.
- CEO: Laimonas Noreika. Link to LinkedIn profile.
- Official company name: UAB Finansų bitė and UAB Finansų bitė verslui (Lithuanian companies have some restrictions when choosing their name, this is why the official name is different from the platform name, but in this case, it literally means “Finance bee”). In the Czech Republic, legal entity name is FinBee CZ Lending s.r.o.
- Company founded in 2015.
- Link to Lithuanian company ledger for
Finansų bitė and for Finansų bitė verslui
(if anyone knows any respectable Czech company ledger please leave a link in the comments)
- Company size: 21 employees total in both companies + at least one person in the
- Headquarters in Vilnius, Lithuania.
- Loans funded: 20 million euros. (last updated 2019-04)
- Auto invest feature: yes.
- Secondary market: yes.
- Smallest possible amount to loan: 5€
- Buyback guarantee: No, but some business loans are guaranteed by a person.
- Types of loans: personal and business loans.
Finbee.lt leadership review:
Laimonas Noreika, the CEO of Finbee, has a bachelor’s degree in business administration, from the International School of Management in Vilnius. Before founding Finbee, he was a board member in Lithuanian company called “Viena sąskaita”. In 2018 he also founded another company called “Desico”, a platform that issues and trades security tokens. His own platform managed to raise 1 million USD through security tokens.
Their business plan:
Given that I have no affiliation with this platform other than I am investing in it, I am describing their business plan as I see it.
Finbee platform started in Lithuania and focused only on the Lithuanian market. Latter on Finbee tried expanding to other markets by opening an office in the Czech Republic. At first, they funded loans on their main platform from both markets. But now it seems that they separated both countries into two different platforms under the same name but different websites, Finbee.lt and Finbee.cz. Personally, I think that going into the Czech market was not the best choice, given that it introduced two different currencies in one platform. Users from Lithuania seemed reluctant to invest in Czech loans as it introduced currency conversion costs.
But if Finbee tries to enter a new market, I hope that it will be a Eurozone market. This way, their main platform could see more borrowers and more investors. Or if they try to go for more non-Euro countries, they should figure out a way to minimise currency conversion costs, or simply loan in one currency.
Finbee loan types:
Finbee claims that they meet each borrower before signing a contract, but I am not sure if this is true. As they claim that it also seems like they work as loan aggregator with other lending companies. In future, I will try to clarify this.
Business loans come in three forms: with CEO guarantee to repay that loan or without it or with a pledge of collateral. From what I noticed, there are way more business loans than personal loans.
Personal loans usually have longer terms than business loans, but personally, they seem to have better repayment rate, compared to business loans.
Things I like about the Finbee platform:
Minimal investment amount only 5€
This is the lowest amount that I have seen so far and that’s great! Platforms like Nordstreet force me to invest 100€ into one loan. While Finbee allows me to invest in 20 different loans with the same amount. And in peer to peer lending, diversification is always the way to go.
So far it seems that I am getting better interest rates from this platform than other platforms. The average rate of 15% is huge. It’s significantly better than the Mintos 11% interest rate. But let’s not forget that I am taking a bigger risk with Finbee when compared to Mintos. And all of the interest rates should be measured after defaults. But so far I have 0 loans that defaulted in Finbee platform.
Seems like their borrowers like them:
I noticed that business borrowers are returning to the platform after their loans have ended or even to take out another loan. To me, this shows that customers see the benefit of such a service and are satisfied with it. And if borrower retention is high, then borrower numbers should only grow.
This one is simple, after all, when I am in the same city that the CEO lives, it’s not hard to actually meet him and ask some question in real life. And when all loans are located in the same country as I am, I have a better understanding of the market. I know if the economy is doing badly at the moment or if it’s doing great. I can have a better judgement of the current risk. Of course, this won’t apply to most of my readers 🙂
Things that could be better:
Not enough settings in auto-invest.
If I choose to invest
Not enough loans that fit my criteria
This one is simple while investing the minimal amount, it’s hard to lend out my money if I deposit anything more than a 100€ in one month. Not every month is like that, but this slows my potential investment rate into this platform.
No buyback guarantee
There is no buyback guarantee, so investors do take a bigger risk with this platform when compared to platforms that do offer this feature. But given their business model, this should not come as a surprise to anyone. Also worth mentioning is that business loans can come with CEO guarantee or pledge of collateral
My investment strategy review on Finbee:
For a few months, I used autolend tool to completely automate my investing with set it and forget it mentality. Only to log in occasionally and check my results. But over time I got fed up with its performance and now invest only manually. Which seems to be working better for me. Although I still follow my own set of rules when investing:
Loan duration: up to 24 months. I do prefer shorter loans if possible as I am the type of investor that believes that it’s hard to predict the future. And even with a good loan initially, borrowers situation might change over longer period that would force him to default.
Interest rate between 10% and 18%. This is not a hard rule that I follow, but given that the loans offered on Finbee are without buyback guarantee I would like to minimise my risks. Sure, some loans come with mortgage or pledge of guarantee to repay (in case of business loans), but it’s still better to have loans repaid successfully rather than risk gaining a bit more money and having to wait for recovery to kick in.
Invest the least possible amount into each loan. This is just a general rule that I follow on every peer to peer lending platform. And this why Finbee is great, as this platform allows users to invest as little as 5€ into one loan. I tend to follow this rule, with only occasional investments that go up to 10€ if it looks like a good deal.
A business should be profitable, individuals should have enough income to pay the loan: This one is simple, I will not try investing in unprofitable business as it just brings extra risks. The same rule applies to individuals, I will not loan you money if repaying that loan will mean that you will give me half of your monthly income.
My returns on Finbee platform:
No platform review should go without showing actual returns. For the most up to date returns, I would recommend following my monthly return posts.
I started to properly track my results since the beginning of 2019, by following each month returns. I can’t annualised returns, because, over the period shown below, I continued to invest, thus it would skew my annualised returns.
In conclusion for my Finbee review:
This is my finbee review after one year using it as an investor. Overall I am quite happy with the platform and will continue to hold part of my portfolio in it. But given that currently, I have issues finding enough loans, I will diversify more to other platforms.
If you enjoyed this Finbee review and would like to join this platform, register using this link. This is an affiliate link and will help support this blog.
As a reminder, I would like to note that this Finbee review will be constantly updated as time passes.