P2P Risk Management – Free E-book
Free e-book
The crowdlending platform Lonvest has publised a free e-book with the title: “Risk Management in the Digital Lending Business”.
It is too technical for small private investors like me. However, I believe that by publishing this e-book, Loninvest signals that they take security seriously.
I have had only positive experiences with Loninvest.
You may read my brief review of Loninvest or my full review of Loninvest.
Highlights
I found two parts of the book interesting. The most interestingpart is called “Risk Management Technological Innovations: the Road to the Future,” which discusses the use of Big Data in risk management.
The other interesting part is the conclusion, which provides an overview of the book’s content.
My Personal Risk Management
For small private investors like me, I have developed a simple and efficient system for handling security in crowdlending:
- Check for the presence of a secondary market to sell loans and exit the marketplace.
- Regularly monitor late loans.
- Examine your own loans: Are late loans increasing?
- Stop investing in loan originators with many late loans.
- Check Trustpilot for negative reviews and pay attention to the marketplace’s responses. (For instance, I ceased investing in Estateguro when numerous negative reviews appeared on Trustpilot, and most of my own investments were also late.)
- If you invest in short-term loans, be prepared to halt investments when signs of increasing risk become apparent.
Check for fraud
- check Trustpilot
- check for scam here: scam-detector.com
Check security
- Does the platform have a Licens?
- Look for diversity: (multiple loan originators, countries, and loan types)
- Check for the presence of a secondary market to sell loans and exit the marketplace
- If there’s no secondary market, only invest in short-term loans (1-3 months)
Regularly monitor late loans
- Examine your own loans: Are late loans increasing?
- Stop investing in loan originators with many late loans
- Check Trustpilot for negative reviews and pay attention to the marketplace’s responses
(For instance, I ceased investing in Estateguro when numerous negative reviews appeared on Trustpilot, and most of my own investments were also late) - If you invest in short-term loans, be prepared to halt investments when signs of increasing risk become apparent
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