Here is how Iuvo compares to similar European-based platforms:
|Platform||Link||Target Rate (%)||My XIRR (%)||Status||Live Rating|
|Review||Variable||11.47%||CLOSED (to UK)||4/5|
What is Iuvo Group?
Iuvo Group is a Estonia-based P2P lending platform. Operations began in 2017 and initially had a focus on the Bulgarian market before moving to Tallinn and expanding operations to more countries. In some regards they operate much like Mintos do. They offer investors the chance to invest in loans, but the loans are sourced from a variety of different originators. The countries here are very Eastern-biased with loans in Romania, Russia and Bulgaria being popular.
The loans made have much in common with other platforms; they tend to be personal loans which are unsecured. They are usually of lower duration, some being as short as a few months, but others lasting several years. Similarly, all loans here are covered by buyback guarantees. The terms of this guarantee are not standard and depends on the originator but it will kick in after 16, 30 or 60 days.
Unlike platforms such as Lendermarket, you can invest in other currencies as many of the loans have not being converted.
Helpfully, Iuvo Group publish a table of their loan originators which details some of their information and loan portfolio size.
Here is a list of Iuvo features:
|Investment Type||Personal Loans|
|Minimum Investment||10 EUR|
|Cash Drag||Very little|
|Fees||1% for secondary market sales|
|Provision Fund?||Buyback Guarantee|
|Available in ISA?||No|
|Active on forum?||No|
|Sign-up offers?||1.5% of total in first 2 months (to 150 EUR)|
Iuvo Group Sign Up Bonus
Currently there is a sign up bonus if you are referred, although you will have to invest a minimum of 1000 EUR. The sign up incentive pays a 1.5% bonus on all initial investments in the first 2 months, with a maximum of 150 EUR. Note that funds have to be invested in loans to qualify; you cannot simply keep it in the holding account.
Are Iuvo Group profitable?
Iuvo Group publish a reasonable amount of information on their own website about their finances. Their last report covers the 12 months to 31 December 2019, so does not cover the period of the pandemic. These accounts show a growing business that is still operating at a loss. Revenues trebled to 310,726 EUR but operating expenses also increased to give a loss for the year of 377,277 EUR (down from 394,739 EUR the year before). This loss was covered by an issue of share capital in the year, and cash at bank was 900,990 EUR.
Losses are not uncommon in the early stages of business, so on its own this is not a red flag. We can see from the scale of revenues however that this is a small company relative to others. Mintos, for example had over 9M of revenue in 2019.
The parent company of Iuvo Group is Management Financial Group which is a holding company for various similar companies to Iuvo, operating mainly in Central and Eastern Europe. This company enjoyed a bumper year last year and profits rose to £25.2m equivalent, although some of this was derived from a much smaller impairments being charged.
These accounts were audited in Bulgaria (MFG) and Estonia (Iuvo) so some care should be taken when reading.
Iuvo Group Operating Model
The way Iuvo works is quite similar to Mintos. Registration is quite straightforward and once providing identification and passing a questionnaire you are free to deposit. This can only be done by bank transfer, and only in BGN (Bulgarian Lev) or Euro currencies. After this clears you are cleared to invest into loans. This can be done manually, or via the auto-invest function. Both of these options provide many different filters to sort the loans by.
Iuvo aggregates loans from many different originators, which can be seen on the primary market. In general these loans are smaller, unsecured personal loans of shorter duration. Depending on which originator the loan comes from they may be available in a different currency. The Iuvo site allows conversion to Russian roubles, Polish zloty or Romanian leu if you would wish to fund these loans.
Although all loans currently carry a buy-back guarantee, the interest paid to investors on the loans can vary by quite a lot. For instance on the primary market rates vary from 18.77% down to 4.4%. There is a good reason for this. Although the buy-back kicks in after 16, 30 or 60 days (depending on originator), only the principal is guaranteed and not the interest. Thus for the higher risk loans there is an opportunity cost as your money is tied up and could be earning elsewhere. Loans are graded into risk classes (from A to High Risk) and whilst this is less relevant for sites where the buyback includes interest this is more relevant here. Perhaps because of this, more information is given about the borrowers than other sites. For example, alongside the risk rating we see the borrowers age/gender, monthly income, location and purpose of the loan.
Iuvo Group also offer a secondary market where existing loans can be exited early. Unlike other platforms, this service is not free for sellers and attracts a 1% fee.
How are funds protected?
The only source of protection is the buy-back guarantees which are offered by the originators. Every loan on the platform carries this guarantee, although the amount of time it takes before a loan is bought back differs. Additionally the guarantee only covers the principal, and not the interest that would otherwise have been paid. Another factor is that the originator has some ‘skin in the game’ – in that they invest alongside you. This gives some motivation for them to be diligent in loan administration.
Whilst this is better than nothing, the loan returns to investors are adjusted down to already compensate for this.
As always the buy-back guarantees are only as good as the company offering them. One potential form of risk is if an originator becomes insolvent. In this case, they would be removed from the site but existing guarantees would not apply. An event such as this would be very adverse for investors loans.
Iuvo is domiciled in Estonia and investments are not covered by any form of government-backed compensation scheme. Further, no information is given on the website about what happens if Iuvo Group itself becomes insolvent.
Iuvo Group Review: Pros:
There are some things to like about investing with Iuvo Group:
- Low cash drag: Currently between the loan originators Iuvo uses there are plenty of loans available to be funded. It would be very rare that nothing would be able to be funded.
- Loans have some reasonable information backing them, and for those investing manually, this allows the investor to vary the risks they take and the interest rate received.
- There are loans available in several currencies and you can exchange your deposited funds for these currencies, which means you can take exchange rate risk if so inclined.
- There is a secondary market available should investors which to redeem their investments early.
Iuvo Group Review: Cons:
There are also some things to be aware of:
- Buyback guarantee does not cover interest. This could lead to reduced returns, as the capital can take up to 60 days to be returned and in the meantime cannot be relent.
- The secondary market is not free and charges sellers a 1% fee on sales.
- Some of the better-rated loans pay as low as 4-5% interest – which isn’t particularly attractive even with the buy-back guarantee.
- Iuvo and its originators are relatively small companies who operate in less established jurisdictions; problems with originators could lead to lost principal and interest.
Iuvo Group: Conclusion
Iuvo Group are a relatively new platform which like many others offers the chance to invest in unsecured personal loans in European countries. With a large amount of originators, there are plenty of loans to choose from. Loans are graded and have a wide range of interest rates, allowing investors to choose from different strategies. At the lower end rates are a tad low for the risk and buy-back guarantees do not cover lost interest.
Disclaimer: This Iuvo Group review represents my own opinions and should not be substituted for investment advice. Please research before you invest with any firm. Typically P2P investments are not covered by the Financial Services Compensation Scheme (FSCS) in the same way bank deposits are. There are no guarantees that you will receive the returns advertised (or even a return at all).