I love to diversify my Peer-to-Peer lending investments on as many great platforms as possible. In this article, I will review the Peer-to-Peer lending platform Debitum, which I added to my portfolio in 2018.
In the article, I will tell you what I think are the biggest strengths (and weaknesses) of the platform, how to start using it, and what you can expect from investing on the platform. Let's start!
As for all Peer-to-Peer lending platforms, Debitum is a financial platform that matches borrowers with investors, that will lend money on the platform in exchange of interests on loans. The Debitum platform launched in 2018, and they are based in Vilnius, Lithuania.
They currently have over 3,000 investors registered on the platform, and they already funded over 68M Euros worth of loans.
The platform really puts their focus on making it really easy for investors to generate passive income on their platform, while keeping their investments safe & secure, which is what we are going to check in this review.
The returns you can expect on Debitum are slightly lower than on some other platforms, with an average yield currently at 9.65%. However, you can definitely get higher yields on the platforms, as I am currently around 10% on my own portfolio, which is in line with other Peer-to-Peer lending platforms in the field.
The question of the safety of the investors funds is central when investing on a Peer-to-Peer lending platform, as they will be managing all the money that you deposit on the platform and invest it in loans. When checking a new platform, I look at three things: what the platforms offers in terms of guarantees, the company itself (and their team), and finally the loan originators.
Debitum is really different from the other Peer-to-Peer lending platform as they solely offer investments in business loans, which are way safer than loans to individuals, especially with lower default rates. This of course also explains why the returns on the platform are slightly lower than other platforms, as you invest in safer assets.
On Debitum, all loans come with a 90 days buyback guarantee, so this is already a good point for the platform. They also have a very transparent credit scoring system, which makes it easy to select investments you want in your portfolio & what level of yield/risk you are looking for.
They also follow a strict due diligence process to put loans on the platforms, and use this process for the scoring system I mentioned earlier. We'll see later how to select loans based on their credit score in the auto-invest function.
Note that two-factor authentication (2FA) is also available on Debitum, which is another good point for the security of the platform.
As for all Peer-to-Peer lending platforms I add to my portfolio, I also check the company itself and see what they are doing in terms of security & safety of the investors funds.
Also, compared to the first time I wrote about this platform, Debitum is now a regulated & licensed investment firm. They got their investment brokerage license in September 2021 - which will guarantee that are following all the required processes to protect investors funds. This is definitely a very good trend that a lot of platforms are following, and it is good to see the Debitum is also following this trend.
As for all platforms I review, I also check who is in their management team, and what activities they did before going to Debitum. For example, I checked the profile of the co-founder of Debitum:
As you can see from this sample of his LinkedIn page, he was involved with other companies before Debitum (they are a few more below in the profile), which is a very good sign. I also checked other members of their management team with similar results.
I also always have do a close examination of the loan originators a platform uses, as this is usually where a platform will encounter problems if anything bad happens like a financial crisis.
Here, I really liked the transparency on who their loan originators are, which you can find on a dedicated page directly accessible from the main page of the website.
They currently have loan originators from Estonia, Latvia, and the UK. I liked the fact that they give details about each of their loan originators, especially about the security of the investors funds.
It is actually really easy to get started with Debitum and have your money start generating interests on the platform.
The first step is to open an account and get verified. This was done really quickly, and including the ID verification part it was all done in under 5 minutes.
Next, you will have to deposit funds in your account to start investing in loans and generate interests. This is also really to do with Debitum, as you can do it via a simple bank transfer.
Once this is done, you can basically start investing on the platform. Note that at the moment, you can't use the auto-invest function on Debitum as it was paused following them getting the investment license. However, it should be available soon again.
To invest on Debitum, you can go on the main investment page:
It's important to note that on Debitum, you can invest in ABS (Asset Backed Securities), which are basically pools of commercial loans that are grouped into one single asset. Compared to investing in loans one by one on other platforms, this gives you more stability in your returns, as well as additional safety as you get some instant diversification.
Most of the ABS I saw when investing have yields in the 9 - 9.5% range, which is in line with what is announced by the platform.
To actually invest in an ABS, you can simply click on the one you want:
From this page, you can check all the details about the ABS, like the interest rate, trust score, and also number of loans included in the asset. You can then also invest from this page, with a minimum investment of 50 Euros.
Once you invested in one or many ABS, you are basically done: your portfolio will start generating interests over time.
As for all the platforms I review, I also tried to withdraw money, and the money was back on my account in just 1 day.
As for all platforms I talk about on my website, I personally invested on the platform with my own money, for over 3 years now on Debitum. So far, I only had good returns with the platform, even during the COVID-19 crisis in 2020 & 2021, with an average annual yield of 9.78% over this whole period.
I spend a lot of time choosing high-quality platforms to invest on, and Debitum is really a platform I consider to be one of the best in the field of Peer-to-Peer lending platforms. They have decent yields, they did everything in terms of security & safety of the platform (like having an investment license), and they also have a website that is really easy to use.
For all those reasons, I really recommend you check out Debitum and consider adding it to your investment portfolio.