Disclaimer: Please still do your own due diligence before investing in any P2P lending platform. I am just an investor trying to bring some value to the crowdlending community.
Date of interview: 06/02/2020
1 – What’s the value of Robocash in terms of investors, loans funded and actually interest paid to investors? Are there a lot of default loans?
Since the origination in February 2017, our P2P platform Robo.cash was joined by nearly 10,000 investors. For the whole time, they funded 143 mln EUR of loans and earned about 1.5 mln EUR. The share of default loans depends on several factors and varies among loan originators. As an example, the percentage of such loans issued by the Kazakh lender doesn’t exceed 19%. At the same time, there is always a 0% overdue on commercial loans from Vietnam and Singapore. Yet, I would like to remind you that we secure all loans on Robo.cash with a 100%-buyback guarantee, which comes into effect on day 30 after delay or extension by the borrower. In this case, we pay back the invested amount and the interest both for the loan term and buyback period. This way, investors do not lose their returns.
2 – What kind of due diligence you make before choosing a loan originator?
Our platform Robo.cash is based on the “peer-to-portfolio model”, meaning that it attracts investments for the loan portfolio of its parent company Robocash Group. All loan originators integrated with Robo.cash belong to the same group. Thus, we are fully aware of their activities, closely monitor the performance and take measures if necessary to minimize possible risks.
At the same time, not every company of Robocash Group can join Robo.cash as a loan originator. Integration with a P2P platform can be restricted by the legal framework of a particular country. To comply with the legislation, we carefully check the requirements of each country before the integration.
3 – How often do you visit these loan originators and make sure they’re wisely using the funds lent by investors?
Loan originators currently presented on our P2P platform are located in Spain, Kazakhstan, Russia, Vietnam and Singapore. Although they operate individually, their transactions are regularly monitored on all levels, including by the top management of the holding.
4 – Where can we see the proof that you’ve actually been doing research and due diligence on your loan originators?
The loan originators available on Robo.cash are profitable, which is confirmed by the management reports published on the website of Robocash Group (https://robocash.group/investors/). Later this year, we will be able to provide the audited figures for 2017-2019. It is also worth mentioning that we see a continuous growth in the issuance volumes of our loan originators – for example, the volumes of the Spanish company Prestamer.es have grown more than two times since January last year, and we keep working in this direction.
5 – Have you stopped cooperating with any loan originator so far? What was the reason behind it and what can you do in the future so there’s a reduced chance you’ll have to deal with similar situations?
In August, 2019, the group ceased operations of TezCredit, which issued instalment loans in Kazakhstan, as the project was considered inefficient. Consequently, the loan originator was removed from the platform. Meanwhile, we focused on strengthening the development of short-term consumer loans in the country.
In December last year, due to uncertainties around the license of the loan originator in the Philippines we also suspended investments in loans of Robocash Finance Corp. to prevent our investors from any risks.
In this sense, operations within the single group allow us to react fast and keep any changes under control. Also, I have to mention that in both cases we have been fulfilling all commitments and paying back all the invested funds including the earned interest to investors, as set by the assignment agreements.
Overall, the existing practices and our approaches have proven their efficiency. Moreover, there are no plans to add any external lenders to the platform, so we will keep taking full control over the work of our loan originators.
6 – Have you shared all of the default projects so far? Can we see anywhere in your company’s website information about projects that didn’t go so well? I think this is important for investors too, i.e., to see transparency from your side.
Investor’s personal account contains the information on late loans, which include both defaults and extensions. As I have said, whereas there may be late repayments on consumer loans issued for up to 30 days, there are no overdue commercial loans. Issued by the Vietnamese (for 180 days) and Singaporean companies (for 365 days) of Robocash Group, they are intended to support our business activities in Asia and are backed by the group guarantee.
7 – Are you doing something in order to accelerate the regulation of Crowdlending in Europe? How important is it for you?
We support the initiatives on creating a single regulation in Europe and will be ready to comply with it once it comes into force. We believe that the introduction of a single license will increase the investors’ trust in crowdlending and simplify the operation of P2P platforms in Europe. In general, we are aimed at working in full compliance with all local and international rules no matter the market. Moreover, some of our companies are licensed consumer lenders in countries where it is required by law, e.g. Russia, Indonesia and India.
8 – What’s your strategy to guarantee that things will continue to go as planned in the event of a world economic crisis? Wouldn’t the crowdlending sector be particularly affected?
We monitor both global and local macroeconomic trends in the countries of our footprint. Indeed, the slowdown in the global economy is exacerbated by the trade conflict between the US and China, and the coronavirus epidemic in China this year.
Before the start of the epidemic, we predicted that the recession in the developed Western countries could happen in the second half of 2021. However, the actions of the monetary authorities, and the suspension of trade wars, gave a chance to pass the “bottom” quickly and mildly, and recover the growth. In this case, the developing countries, where our business is mainly located, would face a temporary capital outflow and an “escape from risks”. Still, it would be possible to avoid an economic collapse and a significant slowdown.
However, the situation in China makes it difficult to predict the time of recession now, so we keep monitoring the events. According to our basic forecast, although the epidemic will cause damage to the Chinese and the global economy, it will be possible to stop it and offset the consequences with the help of monetary incentives and improvements in the trade conflict.
Despite the mild forecasts, we are ready for a crisis scenario as well, which implies a drop in the world GDP, income reduction and increased unemployment in the countries of our footprint.
One of the key elements of our strategy is to diversify our loan portfolio and build an advanced risk management system based on data analysis and machine learning. It allows us to precisely select creditworthy borrowers and adequately respond to changes in their behavior. In case of a negative scenario in the global economy, the population will face reduced income and savings. In fact, this means not a decrease, but an increase in demand for short-term online loans. However, the key role here will be played by proper setting of scoring algorithms and high-precision grading of customers in terms of loan repayment. We take it into account and are ready for this scenario as well.
9 – Is Robocash profitable? Where can we follow the quarterly and/or annual reports?
With the only goal to raise funds for the companies of Robocash Group, our P2P platform is not aimed at generating profit. Serving as an intermediary between investors and the affiliated companies of the group, it does not charge any fees from users and does not cooperate with any third-party loan originators. The only revenue for Robo.cash comes from fees paid by the integrated lenders for servicing their loans. This allows the platform to offset the expenses it bears (for example, marketing, HR etc.).Robocash Group, which owns both the P2P platform and the lending companies, is profitable. It is possible to view the unaudited consolidated financial statements for 2018 at the group’s website. The audit is now being carried out by KPMG, and we expect to have the audited financial reports for years 2017-2019 by the middle of 2020.
10 – In the long run, would you like Robocash to be listed in the stock market? Why?
As the platform’s model of operation does not focus on making profit, we have not considered the opportunity of listing Robo.cash in the stock market.
11 – Do you have any plans to start or increase cooperation with loan originators from the richest countries in the world? Wouldn’t it be a great opportunity to jump to those markets? (ex: USA, Canada, Australia, England, Germany, etc…)
Since Robo.cash is designed to attract funds for the affiliated lending companies of Robocash Group, we can only consider adding loan originators from the group’s footprint. Because the group is not present in the above mentioned countries, we do not plan to integrate any loan originators from there.
12 – What are the long term plans for Robocash? Do you have a vision for your company and would like to share it with us?
Our P2P platform Robo.cash has been always following the path of Robocash Group. Over time, its role for the group has significantly increased. Now, the platform serves not only as a tool financing consumer loans, but also facilitates the strategic development of the holding. This became possible with the introduction of long-term commercial loans on Robo.cash, which help accelerate the growth of our business in Asia.
Taking into account that in the long-term the group plans to scale its operations in South and Southeast Asia, we can expect an increased loan supply on Robo.cash, as well as a bigger share of commercial loans.
If there’s something else you want to say that can add a value to this interview, please feel free to do so.
At the end of February, Robo.cash will turn three years old. Since the launch of the platform, we have observed its strong growth, especially in the past year. Thus, in 2019, we saw a double increase in the amount of attracted investments and funding volumes compared to the year before. The number of investors on our platform grew 1.5 times. We expect that Robo.cash will keep the growth pace over the next several years and allow investors to benefit from the new opportunities it brings.
My Thoughts on Robocash
I like that the loan originators and Robo.cash belong to the same main group: Robocash Group. In this way, they can control better their loan originators, some of which are regulated in the respective countries.
I’m looking forward to taking a look at the audit this year to see how Robocash Group is doing financially.
So far I’ll keep reinvesting with Robo.cash while they seem to have their interests aligned with their customers. Regulation is really important in P2P and their big interest in it makes me happy.