Choosing a P2P platform?


  • Community Manager

    Hey guys!

    2 weeks ago, we discussed on factors which matter to you in deciding to exit a P2P platform, as well as your invesment horizon / exit strategy. Some really good responses within the topic we started, as well as @chictrader's topic!

    It is of supreme importance that we make a balanced decision on whether to exit a platform, upon considering a variety of factors.

    Keeping these red lights at the back of our mind, we can also take a step back to check if we have picked the platforms which are aligned with our own needs and what's important to us.

    One of our community pioneers @antoniomc27 mentioned previously that he personally takes into account factors like: the platform's "management team's competency", "financial stability", "risk/return profile", investment product's fit with his own portfolio, etc. His post here!

    How about yourself?

    There're many factors which investors are concerned about in varying degrees. Would we all share the same set of priorities? 🤔

    Here's a list of all possible factors -- (counting on you guys to add on to the list! ☝ )

    • Yield (in the form of absolute returns, annualised returns, or internal rate of return etc.)
    • Due diligence conducted by platform
    • Competency of management team
    • Opportunities to interact with team
    • Transparency of platform
    • Potential cash drag (& whether this can be mitigated)
    • Reviews & experiences of other investors
    • Opportunities for & extent of diversification achievable (e.g. minimum investment amount, spread of loans across industries, geographical spread)
    • Crisis / default management
    • Skin in the game
    • Liquidity (e.g. easy withdrawals or deposits from platform account, presence of secondary market)
    • Alignment with personal portfolio & your existing diversification strategy
    • Buyback guarantee (applies more towards some global P2P platforms)
       

    Sources: 1, 2

    Which would be the 3 most important factors, to you?

     

    Disclaimer: Nothing in this article should be construed as, constitute, or form a recommendation, financial advice, or an offer from CrowdFund Talks. We are not to be held accountable for any losses on any investments made by readers. The content and materials made available are for informational purposes only.



  • I'd go with the following:

    1. Yield
    I think this much is obvious. Everyone is trying to get the best investment yield for their investment right?

    2. Due Diligence
    No one wants to see their investment defaults and due diligence plays a vital role in evaluating the ability of lenders to pay back. But then it's part of the risk they're taking when investing in P2P.

    3. Liquidity
    Not just ease of withdrawal but also the speed of it. If the system is well designed, funds shown on our profile should be available for immediate withdrawal. And when I say immediate, I mean like Instant Transfer withdrawal. I'm not sure how it works here now but back then when I tried P2P in UK in their early stages, withdrawal is a pain in the ass because they have to go through some authorization process before releasing it. Shouldn't that be done before you show it to me as my available balance?


 

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