Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #21  
Old 28.10.2018, 08:17
Forum Veteran
 
Join Date: Feb 2012
Location: CH
Posts: 2,304
Groaned at 87 Times in 73 Posts
Thanked 2,002 Times in 1,123 Posts
ivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond repute
Re: Peer to peer lending

P2P lending industry in Switzerland is a big f*king joke. Yields are not interesting, 10% is the max you can charge by law, this is way too little to lend to random guys off the street who can't get a loan from a bank. Don't underestimate how indebted this country is (among top 10 worldwide by most measures) and likelihood of defaults. From a few accounts I've heard people have trouble even breaking even - and this is at a time when economy is doing just fine, imagine what will happen in a full blown recession. Most of these platforms don't have any skin in the game, their only game is to skin their commissions off of lenders and borrowers and pass on the risks to clueless investors. The main selling argument seems to be "but banks pay 0%" and they conveniently don't talk about the risks

Take a look at some european platforms, e.g. Mintos, and feel the difference. Average borrower pays 20+%, much shorter loan durations - a few months not years, much bigger and more liquid market, "buyback guarantees" everywhere which turn your john doe loans essentially into junk bonds to originator companies, much more data available to quantify the risks, etc.

Last edited by ivank; 28.10.2018 at 08:45.
Reply With Quote
This user would like to thank ivank for this useful post:
  #22  
Old 28.10.2018, 09:46
Newbie
 
Join Date: Oct 2018
Location: Zurich
Posts: 4
Groaned at 0 Times in 0 Posts
Thanked 4 Times in 2 Posts
Portofino has earned some respectPortofino has earned some respect
Re: Peer to peer lending

Comparison Lend.ch - Mintos

I have invested in loans on the latvian p2p-lending platform Mintos since February 2015. My net annual return is 11.9% so far. The loans I invest in are all in €, although Mintos offers loans in other currencies. I would definitely recommend this plattform too.

It is true that Mintos is way more advanced than Lend.ch or any other Swiss plattform in every technical aspect:

-huge amount of loans on offer, many different types of loans in different countries
-liquid secondary maket where you can sell your loans if you need the money
-auto invest function that is easy to configure and does the work for you
-transparent statistics with default probabilities

Now, why would I even consider an alternative to Mintos if both the platform and the returns are clearly superior?

The main reason is currency risk. I do not know where the Swiss Franc/Euro currency pair is headed and I don’t want to predict something that might turn out wrong. All I know is that currency moves can be violent and wipe out the superior returns quickly, so I need a platform with loans in Swiss Francs too. This is because I earn and spend in Swiss Francs. Had I invested on the Mintos platform before January 2015, when a large currency move occured, the picture would look less rosy.
Considering this, I‘m happy with the 5% I make on Lend and the 12% on Mintos. These figures still compare well with traditional investments. I accept the lower returns in Swiss Francs because they come without currency risk. If you have a strong view on the future strenght of the Euro, or want to try out p2p-lending with a very small amount of money (10 €) you should try Mintos.
Reply With Quote
This user would like to thank Portofino for this useful post:
  #23  
Old 28.10.2018, 11:26
Newbie
 
Join Date: Oct 2018
Location: Zurich
Posts: 4
Groaned at 0 Times in 0 Posts
Thanked 4 Times in 2 Posts
Portofino has earned some respectPortofino has earned some respect
Re: Peer to peer lending

Rates and risk

Are the rates the Swiss p2p-platforms offer to investors high enough to compensate for the risks? Since they do not publish default rates yet, and, as has been pointed out, these would not include a major economic downturn anyway, we don’t know for sure.

What we do know are the characteristics of the market. If you consult the annual report of Cembra, one of the biggest provider of personal loans in Switzerland, you‘ll find a default rate in this segment of 0.6%. This is very low. According to a Forbes article the corresponding figure in the US is 3.5%.
How can defaults in Switzerland be so low, if household debt is - as has also rightfully been pointed out - higher than in almost every other country?

The explanation for this consists of two elements:
-household debt is an average figure that includes mortgages. With the prices of housing in Switzerland being what they are, this explains the elevated level. Personal loans are less common than in other countries. I‘d rather lend money to a person with a house than to someone who rents, because this implies financial stability in my view.
-The rate ceiling of 10% does not mean that you’re not getting paid for the risk. Its effect is rather that a person with shaky finances (low disposable income, prior defaults etc.) that might get a loan in another country for, say, 20%, simply doesn’t get a loan in Switzerland. Those who do get a loan, especially with modest rates of around 5%, will be very good risks. If a platform accepts the bad risks that a bank has turned down, its credit scoring system is botched and it will go out of business quickly as this becomes apparent. However, if the models the platforms use are more or less of the same quality as those the banks use, the rates investors get paid should be adequate for the low default risks in Switzerland.
Reply With Quote
  #24  
Old 28.10.2018, 12:02
DUTCH's Avatar
Senior Member
 
Join Date: Oct 2006
Location: Wollerau
Posts: 341
Groaned at 7 Times in 7 Posts
Thanked 467 Times in 197 Posts
DUTCH has a reputation beyond reputeDUTCH has a reputation beyond reputeDUTCH has a reputation beyond reputeDUTCH has a reputation beyond repute
Re: Peer to peer lending

Quote:
View Post
Rates and risk
If you consult the annual report of Cembra, one of the biggest provider of personal loans in Switzerland, you‘ll find a default rate in this segment of 0.6%. This is very low.
First, the disclosed delinquency rate (30 days over due) is closer to 3% for personal loans at Cembra for 2017. These delinquencies usually turn into losses as can be seen from their portfolio loss rate of 1% for 2017 (auto leases are secured, so personal and credit card would be worse than average).

Second, more importantly, Cembra vets every application individually, does due diligence, checks documents and has loads of experience doing this with dedicated people. They still suffer 3% delinquency. I would not be so naive to equate it to an online P2P lending loss experience, even remotely.

Also as an aside, if you really like EUR P2P returns but don't want EUR exposure, there is a product called FX Swap, which will help you get this. Research it.
Reply With Quote
  #25  
Old 28.10.2018, 13:03
eyebeebe's Avatar
Forum Veteran
 
Join Date: May 2009
Location: Pfäffikon SZ
Posts: 1,600
Groaned at 16 Times in 15 Posts
Thanked 1,711 Times in 804 Posts
eyebeebe has a reputation beyond reputeeyebeebe has a reputation beyond reputeeyebeebe has a reputation beyond reputeeyebeebe has a reputation beyond reputeeyebeebe has a reputation beyond repute
Re: Peer to peer lending

Quote:
View Post
Also as an aside, if you really like EUR P2P returns but don't want EUR exposure, there is a product called FX Swap, which will help you get this. Research it.
Who offers FX swaps at retail volumes to retail clients and are they regulated in Switzerland? I remember in 2009 when I first moved here and wanted to hedge some GBP exposure, my bank's minimum volume was CHF 250k.
Reply With Quote
  #26  
Old 28.10.2018, 13:36
Forum Veteran
 
Join Date: Feb 2012
Location: CH
Posts: 2,304
Groaned at 87 Times in 73 Posts
Thanked 2,002 Times in 1,123 Posts
ivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond repute
Re: Peer to peer lending

Swissquote, dukaskopy and countless other online gambling parlors with leverage up the wazoo if you want.
Reply With Quote
This user would like to thank ivank for this useful post:
  #27  
Old 28.10.2018, 13:57
Newbie
 
Join Date: Oct 2018
Location: Zurich
Posts: 4
Groaned at 0 Times in 0 Posts
Thanked 4 Times in 2 Posts
Portofino has earned some respectPortofino has earned some respect
Re: Peer to peer lending

Quote:
View Post

They still suffer 3% delinquency. I would not be so naive to equate it to an online P2P lending loss experience, even remotely.
So what do you think will the default rate of the Swiss platforms be?
Reply With Quote
  #28  
Old 28.10.2018, 14:21
DUTCH's Avatar
Senior Member
 
Join Date: Oct 2006
Location: Wollerau
Posts: 341
Groaned at 7 Times in 7 Posts
Thanked 467 Times in 197 Posts
DUTCH has a reputation beyond reputeDUTCH has a reputation beyond reputeDUTCH has a reputation beyond reputeDUTCH has a reputation beyond repute
Re: Peer to peer lending

Quote:
View Post
Who offers FX swaps at retail volumes to retail clients and are they regulated in Switzerland? I remember in 2009 when I first moved here and wanted to hedge some GBP exposure, my bank's minimum volume was CHF 250k.
UBS WM will do FX Swaps for smaller if needed, cannot say if this is for all clients. Likewise some other banks I know.

Also, Saxo for example will happily trade smaller amounts in FX for forward date, so combine with a FX spot trade and you get the FX Swap.
Reply With Quote
This user would like to thank DUTCH for this useful post:
  #29  
Old 28.10.2018, 14:32
DUTCH's Avatar
Senior Member
 
Join Date: Oct 2006
Location: Wollerau
Posts: 341
Groaned at 7 Times in 7 Posts
Thanked 467 Times in 197 Posts
DUTCH has a reputation beyond reputeDUTCH has a reputation beyond reputeDUTCH has a reputation beyond reputeDUTCH has a reputation beyond repute
Re: Peer to peer lending

Quote:
View Post
So what do you think will the default rate of the Swiss platforms be?
North of 3% and way north of 0.6%.
But I am not into P2P lending, you are. I just thought some of your figures looked too low so I researched.
Reply With Quote
  #30  
Old 07.09.2019, 20:20
Newbie
 
Join Date: Apr 2016
Location: Skopje
Posts: 4
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
AeroProDrive has no particular reputation at present
Re: Peer to peer lending

Quote:
View Post
No idea what you mean.

I'm talking https://www.cashare.ch or https://lend.ch or others I can find via Google.
I recently used https://crowd4cash.ch and lend.ch and I can tell you that it was very good experience. They helped me when nobody else would!
Reply With Quote
  #31  
Old 08.09.2019, 11:18
FTB FTB is offline
Newbie 1st class
 
Join Date: Aug 2019
Location: Zug, Switzerland
Posts: 10
Groaned at 1 Time in 1 Post
Thanked 10 Times in 7 Posts
FTB has become a little unpopularFTB has become a little unpopular
Re: Peer to peer lending

The P2P lending sector is a total black box. Most of the people on the internet who make positive reviews of the platforms are incentivised to do so, either because they get a commission, or because they are affiliated with the platform, or they are hoping that the new lenders bring in money so that they can cash out. I would be very cautious
Reply With Quote
The following 2 users would like to thank FTB for this useful post:
Reply

Tags
peer-to-peer




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Youth group dynamics and "peer pressure" at The Kollegitheater. HauskinsDale Commercial events 0 03.11.2013 18:55
Peer to Peer Sharing.....Legal in Switzerland? Caviarchips TV/internet/telephone 30 30.11.2011 18:56
Peer interviews markalex Employment 37 24.04.2010 16:16
Israeli Peer refused Dubai visa - politics Vs sport jacek Sports / Fitness / Beauty / Wellness 4 16.02.2009 19:49
What do you think of Peer-to-Peer downloads? Lob General off-topic 88 28.01.2008 16:58


All times are GMT +2. The time now is 18:10.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0