I read several questions about peer-to-peer lending that were asked something like 5 years ago. I just started investing in two sites (A and B from Riga, Latvia). Apparently p2p investing today 2015/16 has changed a bit. Moreover it is interestint to see that Baltic countries (Estonia, Latvia) enter the market (for example by subsidiaries of Scandinavian banks):
- A offers protected loans. Meaning that if loans are overdue for (approx) 30 days they repay the loan and interest to the lender.
- maturities are relatively short, starting with 1 month at A but also B has shorter and longer terms.
- B has a lot of loans in the secondary market where loans are sold at par or premium mostly and sometimes with discount.
So my questions are:
- How can a p2p site offer protection in the above sense? Do they put the loan back to the originator?
- Having read other questions here I see that the liquidity was an issue 5 years back. These days with horizons of only a couple of months this seems not to be a problem anymore. What do you think about this development?
- These days I only see loans in the secondary market at premium or with the same YTM as freshly issued loans. Given the fact that the site takes a 1% charge for secondary market trades - does it make any sense to invest there?
I hope this question serves as an update on the topic.