Debitum uses third-party risk assessors such as Scorify, Coface, and CRIF as well as their own internal analysis to review and monitor the performance of your investments. Debitum is a regulated P2P platform from Latvia that finds itself in a transition process. Due to the change of ownership in 2023, the platform has become much more agile and innovative with regard to new developments and adaptations.
They are also used to serve as a guarantee for delivery of the service. They are used as a means to increase trust and motivation in communities. Their supply is limited, while their demand will keep increasing as the network becomes more popular. Debitum solves this problem by launching its platform globally and effectively moving capital from developed countries to developing countries, where there is already a lack of trust in centralised banks.
Here, the monthly interest income is automatically transferred to the investor’s account. However, there is a restriction that only investors with an outstanding portfolio of 10,000+ euros can use the Auto Withdrawal function. Neither for deposits or withdrawals, nor for the functionalities when investing on the platform. Debitum is very careful when assessing new lenders, which is why there are only a few long-term partners on the marketplace.
The Debitum experiences within the P2P community are rated as slightly below average. In the 2023 community voting, a score of 2.72 was achieved with 32 votes. The fact that Debitum has taken this action independently and without consulting with affected investors suggests that there is little investor interest from the platform’s side. Debitum, like other P2P platforms, has also been strongly affected by the spread of the Covid-19 pandemic.
- Additionally, for desktop users, we also provide a browser extension that allows you to access and manage your Debitum wallet on your desktop browser.
- Martins is still the Director of Inntec which is a software company that helped build the technology for the P2P lending platform Debitum Network.
- The network will include fiat facilitators, a role designated to take care of all fiat transactions and make necessary records on the blockchain using smart contracts.
- After the launch of Abra 1.0 in September, 2018, Debitum Network is working towards the first CEE Markets launch scheduled for December, 2018.
- A verifier then assesses the deal, outlines the risks factors and approves the assets to create a pricing structure.
Their platform is helping small and medium enterprises solve their credit problems. Businesses that would previously have been forced to close due to lack of working capital and cash flow problems can now turn to Abra 1.0 and obtain funding from global investors. This global marketplace has established itself as a market maker in the alternate financing world. Small businesses often face difficulties and closure due to lack of access to easy credit and cash flow issues.
Debitum’s partnered loan originators submit loans to the platform for review, Debitum’s team of financial analysts then evaluate, credit scores, and either approve or deny debitum token the loans. These contracts collect information on parties and produce a trust rating. This rating is then used by investors to evaluate and choose assets to invest in.
To get access to the relevant data, Debitum offers to download tax reports and income statements from the platform. At Debitum, the interest rate for loans can vary depending on the market phase and investor demand. As an active investor who invested on Debitum between June 2019 and June 2023, I was able to achieve a total return of 8.9%. According to my previous Debitum experiences, this corresponds to a realistic return expectation.
In addition, interest rates have risen significantly, which, in combination with their regulation, make Debitum an attractive option for P2P investors in 2024. Communities are ran by a leader who receives a fee from the community’s trust arbitrage smart contract when members are active. This will incentivize the leader to develop business and grow the community. The group is also responsible for resolving issues, and additional functions are built into the trust arbitrage smart contract so that the leader can manage this task. According to Debitum’s customer support, none of the P2P investors have ever lost any money. Based on our recent conversation with Debitum’s founder Martins Liberts, we are convinced that Debitum Network is a good fit for P2P investors looking to invest in secured business loans.
How Debitum Works
These include Evergreen Capital (Estonia), Flexidea (Latvia and Poland) and Triple Dragon (UK). All the information that are covered in this Debitum review are based on my own personal experiences with the platform for the past years. Please make sure to do your own due diligence before investing on any platform. Although the platform functions on a p2p basis, Debitum realizes the need for more than a simple twofold approach. Instead the network requires three parties to form a community; the lender, borrower and investor. Our investment in the platform has always performed well, and we did not experience any defaulted loans.
Business Model & Finances
Debitum (formerly Debitum Network) is a Latvian P2P marketplace, launched in September 2018, where retail investors can invest in business loans from SMEs, earning returns of around 10% on average. Debitum is positioned in a very specific niche in the P2P environment. It operates as a regulated P2P platform, follows a marketplace model and it offers a buyback guarantee for secured business loans. This results in a combination that cannot be found on any other platform in this form.
The new investment vehicles are also called Asset-Backed Securities (ABS). In December 2023, Debitum has also implemented an Auto https://cryptolisting.org/ Invest feature. Investors have the option of having their investments selected automatically based on previously set criteria.
Debitum Network Requirements
For investors who prefer to invest in regulated platforms and who also want to diversify their loan portfolio outside of consumer loans, Debitum could be an interesting alternative. When focusing on business loans, one could think of the crowdfunding platform Crowdestor, which is not to be recommended. With regards to the marketplace model, alternatives such as Mintos (also regulated in Latvia), PeerBerry or Income Marketplace would come to mind.
Debitum Buyback Guarantee
This is amortised over the entire term as the underlying loans are repaid. Debitum has not published an audited annual report for its investors since 2021. It is therefore only possible to speculate about the company’s financial situation. You can always use the Noone blockchain wallet as a multi-currency wallet for more than 1000 crypto assets or as a mono-wallet, for example – Debitum wallet to safely manage all of your Debitum token.
Price performance
If you have read our guide about how not to get scammed by P2P lending platforms, you know that reserving the right to change the T&C without prior notice is a big RED FLAG. You must pass the verification process to transfer funds to your account. We suggest using bank transfers as there are no fees connected to SEPA payments.
It attempts to do so by creating a decentralised network that connects investors worldwide with under-banked small business directly. It allows easy access of funds and bridges the worldwide credit gap. It not only hosts borrowers and investors, but also hosts service providers involved in several steps of the banking process such as risk assessment, insurance and debt collection. By utilizing crypto currency, blockchain has the power to truly create an open marketplace for alternative lending. Cryptos are borderless and hold the same value anywhere in the world.