A few months ago I was very excited about Envestio - a relatively new platform that offers loans to businesses and very high returns to investors, up to 22%. Two of the projects I had invested in have finished and everything's been paid back; I have no complaints at all in this direction. Rather, the same thing that happened to many other platforms has also happened to Envestio - it has become a victim of its own success.
What does that mean exactly? Well, basically it means that there are not enough loans available on the platform, there are too many investors. It's a good problem for a platform to have because it means they can fund any loans quickly, but from the investors' point of view it is bad news. Usually it means that the interest rates will go down and/or more loan applicants will be accepted to satisfy the growing demand, potentially leading to more defaults and losses for the investors.
Time will tell how Envestio handles this problem. For now there is just a dearth of loans. I've had a little over 100 € sitting in my account for a couple of weeks, unable to invest them. Today I finally decided to withdraw the money and invest it somewhere else.
As for my other platforms, there are no major news except that the interest rates on Mintos have recovered during the last month. I haven't seen 15% yet but multiple loan originators are offering 14% loans.
As you can see in the chart below, Mintos is again the largest platform in my portfolio and I don't anticipate anyone dethroning it in the next couple of years.
1 thought on “Well, the honeymoon phase of Envestio is over”
I agree, the high yields honeymoon might be over. The last 2 loans have a 16% yield, much lower than the previous 22%. It makes perfect sense that Envestio lowers the yields now that the brand is better know and have better access to investors money. However, 16% is still not bad when compared with others platforms and may be worth to wait a bit longer to see if they manage to improve the loan availability. Similar thing happened with Grupeer and loans are back again with 14%.
All the best,
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