NEO Finance Review & €25 BONUS - Consumer P2P lending platform

Investors (09.2019)	Investments (09.2019)	Founded	Country
+8’100	+39 M EUR	2015	Lithuania

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NEO Finance is the crowdlending largest platform in Lithuania. This platform allows investing in consumer loans from Lithuanian borrowers with a minimum investment size starting from €10. Investment come with a BuyBack guarantee option, so people have the choice to activate it or not (in exchange, the ROI of the investment is reduced by 0.44% to 22.91% depending on the credit receiver’s creditworthiness rating and maturity of the loan). The average portfolio of investors on this platform is of €3’100.

The platform offers a signup bonus of €25 when creating your account via this link.

As side information, the platform has been launched leveraging a crowdfunding campaign for startups via the famous crowdfunding website Seedrs.

Performances:

The interest rates have an average of 12% ROI per year, like the majority of the crowdlending platforms in Europe, but you can find investments ranging from 6% to 27% with different profiles of risk. The image below displays the evolution of the average ROI per investment rating risk proposed on the platform (A: lower, B: medium, C: higher):

neo finance average interest rate

Safety:

Investors seem trusting this p2p lending platform since its creation as the granted loan amount is steadily increasing (see image below).

neo finance loans amount

NEO Finance is trying its best to provide safety factors to the investors:

The platform is transparent on the investment defaults statistics (see Statistic section at the bottom of the NEO Finance homepage)
It is regulated by the Electronic Money Institution (EMI) license granted by the Bank of Lithuania.
Loans investments can be protected by a BuyBack warranty option that they call “NEO Finance Provision fund” that will purchase your default loan
If this non-mandatory option is not selected the NEO Finance by default warranty system will pay you back the invested amount of the defaulted loans ranging from 50% to 80% of the initial value based on the loan risk rating A, B or C.

The image below displays the evolution of the provision fund size:
neo finance provision fund

Advice

NEO Finance is a rapidly growing crowdlending platform that, compared to its competitors, provides a higher level of transparency (e.g. loans defaults statistics, financial reports).

The platform also offers great flexibility in terms of investments where you can choose for e.g.:

The loans risks cathegory, with its related lower or higher ROI
To take or not a BuyBack guarantee option on your investments

Thanks to this flexibility you can build a portfolio ranging from 6% to extremely high 27%.

Pros & Cons

Pros	Cons
+ Highest-interest rates of the market (up to 27%) + High transparency in platform statistics + Safety fund in constant increase > 300K (=1% of total loans) + Minimum investment of €10 + Detailed borrower information + Auto-invest available + Secondary market available + Bonus of € 25 after first deposit by using this link	– BuyBack guarantee is optional and is not free – Withdrawals cost € 0.29 – No diversified investments (Consumer loans) – Investors must be European – Smaller-sized platform (lower track record)

Investment details

Investment currencies	EUR
Return on investment (ROI)	12%
Minimum investment	€ 10
Investment period	24 – 60 months
Default rate	0% (with BuyBack)
Investment fees	0%
BuyBack guarantee	Yes (optional)
Auto-invest	Yes
Secondary market	Yes
Trustpilot Score (Safety)	7.4/10	(09.2019)

Investment types

Consumer loan

Investment example

Investment result forecast

Below you will find the resulting forecast when investing using NEO Finance compared to investing the same amount in the US stock market (US stock market: 6% average yearly growth in the last 30 years).

By investing €1’000 using NEO Finance for 15 years you might end up with €11’974 (€9’577 more than with the stock market).

Chart by Visualizer