Author Archives: MPI

Peer to Peer Lending – The new financial intermediation model that gives headaches to classic banking or how the Internet and new technologies will change everything

When I was a child, I remember that my mother borrowed money from her colleagues in a somewhat organized way. The process was called the “Wheel”, and it worked quite simply. On the pay day of salary, the members of the “Wheel” borrowed each one with 100 EUR on one participant, who went home with the credit. Next month, another member of the “Wheel” benefited from money, and by rotation, after 10-12 months each contributed to help the other, and in turn be helped. The system was based on the time-based trust between employees and the human relationships that were being created in that professional environment.

Today, the access to the Internet, the new IT technologies,the expertise in money management, modern statistical analysis and large volume data processing, the creativity in developing new business come together in what is generically called FinTech, a fresh new cocktail between Financials and Technology. Peer to Peer Lending as a business is based on the ability to virtually connect over the Internet, cash providers either to be individuals, small businesses or institutional investors with potential customers who need cash, all against some fees or interest. The platforms that work on this principle mediate the demand and supply of cash through modern means, without having to support a whole network of classical “brick-and-mortar” subsidiaries (like banks).

The first such company was set up in the UK in 2005, and it works successfully, is called Zopa. To date, Zopa has billed approximately EUR 1.3 billion (GBP 1 billion) and served over 110,000 customers. In 2006, in the US in San Francisco, the two heavyweights of the US business, namely Prosper and Lending Club, were born. At the time of writing this article, Prosper broke over $ 4 billion and the Lending Club over $ 11 billion in 883,000 credits. It is worth mentioning that the Lending Club is listed on the NASDAQ stock under the “LC” symbol and offers loans to both individuals and SMEs. Another company, set up in 2007 in the US listed on the NASDAQ stock exchange under the symbol “ONDK”, is On Deck. This company only intermediates loans to small and medium-sized businesses and has exceeded the $ 3 billion threshold in loans.

In Europe, it is worth mentioning the Estonian company Bondora, that set up in February 2009. So far, it has earmarked EUR 96.3 million for over 220,000 customers. Bondora, registered in Estonia, operates in four countries: Estonia, Finland, Spain and Slovakia, and investors come from 37 countries.

Mintos is another peer-to-peer lending marketplace based in Latvia that connects investors with borrowers of non-bank lenders. So far, it has earmarked EUR 256 million for over 29700 investors, with an annual average 11.95% for investors, and a total value of loans sold in secondary market of € 5 150 522.

Probably few know, but Estonia is a “world champion” when setting up startups and administering the country through e-government; The Skype-owned collar owned by Microsoft is a business developed thanks to the software platform created in Estonia. Peer to peer lending (P2PL) platforms in the desire to attract investors and demonstrate good faith and business ethics, given that money generally finances unsecured loans, has released complex reports of anonymous data Client portfolio and business going without being required by any regulator.

Lending Club publishes on a monthly basis all credit portfolios, with the status of each credit, including non-performing loans, and also publishes data related to online customers but has been rejected by their internal creditworthiness model. Bondora publishes an impressive suite of reports daily, ranging from the loan portfolio to the history of payments, for statistical analysis and calibration of the investment strategy. This transparency is unimaginable in the classic banking business, although there are banks whose shares are traded on stock exchanges. Another aspect worth noting is that the nature of the P2PL business eliminates one of the problems banks are generally facing, namely a lack of balance between the short duration of deposits attracted to the relatively long lending time.

As an investor, through a P2PL platform, you assume from the very beginning the amount of credits you finance and their term, their risks, and if there is a platform in the so-called secondary market, you can sell your holdings at discounted rates. If this is not possible then you can only wait for the maturity of the loans and the monthly recovery of the initial investment plus the related interest.


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The 12 “tricks” to make savings

When it comes to money, saving is not my favorite subject. I prefer revenue growth!
However, saving is extremely profitable, because every money you save in a project is pure profit.
Revenues are taxed. Cost reduction, no.
Consequently, it is worth talking about ways we can make savings. We have selected 12 such ways for you.
This is my favorite list of “tips and tricks” when it comes to saving money:

1. Make short-term savings goals: for example, 20 EUR a week or something of this kind.
You will be more successful with such goals than with long-term ones (6 months or one year).

2. Get used to picking up the small pocket every time you change your home clothes and put it in the same place (jerky jar, etc.)

3. When you want to buy something, do not just think about how much it costs, but how much you have to work to pay for that object.
This will help you to see things more clearly.

4. Go shopping with the list and keep up the list.
There is not much to say here. Just do this a few times and draw conclusions. ?

5. Walk.
It’s healthy.
However, it would be desirable to do at least 10,000 steps a day, and if you sit in the office, you make between 2000 and 40000 steps.
If the journey to the office takes less than an hour (6-8000 steps), it would be interesting to reduce your transportation costs while increasing your health benefits.

6. Are you sure you need all the space you live in?
You may be in favor of this …
It is possible that a better arrangement of your home will save you 100 euros per month (for example).
In 10 years, that means 12,000 euros, without taking into account any interest.
With an intelligent investment strategy, it could easily be 20,000 euros.
Could you get that money in 10 years?

7. If you have a property do a calculation in terms of investment in thermal comfort for 10 or 20 years.
You may find that investing in thermal insulation or a smart heating solution can save you thousands of euros in the long run.

8. Buy clothes on two criteria: price and durability, not just price. A shirt that is ruined after two wears is a bad deal, no matter how much it cost.

9. Renegotiates the price paid for telecommunications (telephone, internet).
As technology progresses, costs in this area are going down. As a result, most people pay extra money because they do not renegotiate their contracts.
Do not miss this opportunity!

10. Be careful to look before you have fun!
You can find excellent prices when it goes to trips. If you plan ahead and compare multiple offers, you can find incredibly convenient prices.

11. Plan your gifts!
On the same idea as in point 10, gift planning can relieve you of unnecessary expenses. The most beautiful gifts are the right ones, not the expensive ones.
But, to fit a gift with the recipient, you need to think about it a long time ago.

12. Learn how to save – that is, studying the money!
A single idea like the above, that you learn and apply, can save you tens of thousands of euros over the years.

The most beautiful part?
Any of these ideas can be transformed into life-habits – which means they become automatism and, as a result, they no longer consume energy, but they bring you money.

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4 easy habits that can increase your earnings

This article is about the habits and attitudes of rich people. What you are about to read are habits, thoughts and behavior that we have noticed in some of the richest people.
Fortunately, it all applies to you, starting today (especially No. 3).
We present them in the order of speed you can apply in your life:

1. Spend as much as you need, not as much as you like

This is the main reason why most people live at the level of modesty, some even at the poverty level.
They choose not to spend money strictly on what they need, instead they choose to satisfy more lusts and pleasures.
But there are people who refuse to satisfy all their pleasures. Instead, they save and invest. This makes the difference between prosperous and less prosperous people.
This is the typical case of the young man sitting in a studio apartment in a lively neighborhood, but he has an expensive car …

2. Refuse to care about what other “people think about you”

Whenever you make a decision, in the present case, a buying decision, based on what others think about you, you are taking a step towards poverty. You will never be able to achieve your financial goals if you care, first and foremost, about what others think about you.

3. Start educating yourself financialy

What do prosperous people do? They invest in tehiryself.They invest in their education. Since self-education brings so many financial benefits (and not just financial) … it is normal for them to invest in their own person.
The power of financial gains is even greater as investment in self-education and skills are getting bigger.
Education is the most valuable asset you can ever have.
More … is an asset that will never devalue.
On the contrary !
So, your financial gain will become bigger as you invest in self-education and personal development.
I recommend you go to trainings, seminars, conferences to expand your network and increase your revenue.

4. Choose a field of work that you like, but must be very well paid (both conditions are important)

There are colossal differences between wages, even in those areas that require similar efforts for training and education. Prosper people, before engaging in a field,they look at what financial gain that domain can bring in at certain amount of time. Then, depending on this, they choose their jobs or possible businesses. Our suggestion is that before you get involved in a job/business, do a market study and see which are the best paid areas, but also the least paid ones. The goal is to know which domain has potential and what domains should be avoided.

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Little money or … poorly managed? 6 mistakes (and solutions)

How many times did you say to yourself : “If I had more money, then everything would be fine …”?
Well, if you were to have a brief analysis in the last year or the last 2-3 years, you probably have had “more money” and your income has been rising.
Something has changed?
Many people set a certain amount of money when they would have enough, they say, but when they ritch that amount, her/she observes, paradoxically, that it is still not enough and that they should have … much more.

Why is this happening?
Because the lack of proper financial management leads us to spend the more money that we have at our disposal.
We live in a society where consumption is promoted, even in an exaggerated way. You rarely happen to wonder why you bought a beautiful but unnecessary thing …

If you recognize yourself in the above ranges, then you are likely to recognize yourself in the following, where we underline only 6 of the most common mistakes we have noticed:

1. You are not setting up a budget

If you own a business or have a marketing affair, you probably planned a budget for an investment or a specific activity at a certain time. Setting up your budget helps keep your finances under control. You are the master of the situation. You will not be driven by money, to the intention to spend without measure and the panic of staying without money after.  So when it comes to a new home purchase, a vacation, buying a car, just set the amount you can fit. And the amount will be set based on the market price in line with the financial resources you have. So, the ideal is not to face a big budget hole after such a purchase.

2. You do not count on what you’ve spent before

When you spend on impulse, you ignore the overall picture. You go shopping and finally you realize that you have bought too many things (and implicitly, that you have spent too much). Ideal is to remember your purchasing history.
For example, if you bought a new phone this month, do not buy a new tablet. It’s possible that the two acquisitions together to make you a big hole in the budget. Another mistake is the purchase of similar products in a short time. Or in the early replacement of objects / equipment without necessity. A better management of the money you have can make the difference in the lifestyle and what you can afford.

3. You use your credit card to the maximum

If you own one or more credit cards, do not use them irrationally because … you still have to pay them. As said above, the ideal is to set up a budget for what you need and not to exceed certain limits.

4. You live a luxury life on a low-cost budget

It is good to dream and have high aspirations. But at in the same time, it’s good to be realistic. Especially when it comes to the money you have.
Do not try to live a life of luxury, as long as your budget is falling at to a low-cost …
There are people who spend their wages in two days and then have to live until the next salary. Better try to save, in order to allow you moments of indulgence from time to time. And in the long run keep your realistic sense and do not put you at higher expense than you can take.

5. You do not save

We think we do not have enough money to save, but the more money we gain, the more we spend.
So, you can think that you may never have enough so that you can to put something aside.
When it comes to saving, do not think of colossal amounts. Any cent set aside is an economy. In addition, it is important to learn the habit of saving so that it becomes an integral part of your life and of your family.

6. You ignore your debts

One of the biggest mistakes made when it comes to money is represented by … ignoring debts. If you do not take them into account, that does not mean they will disappear on their own. Worse, they multiply. If you have a debt to the bank, interest rises every day. If you have a debt to someone else, it will not raise interest, but it will increase the frustration and mistrust as far as you are concerned. Do your best not to have any debts. There are psychic pressures that make your plans go worse.


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4 mistakes that do not let you have more money

How many times did you happen to keep saying “if I had more money I would live much better!” Even if your income grew in time?
Many of us live this paradox!

What’s the explanation?

Actually, when we know that we have solid financial resources, we feel relaxed and do not put as much restrictions as when we know ourselves strained.
So, although we have more money in our account and in pockets (we gain more), we realize that we are confronted with the same problem.
Beyond that, we have certain habits that make us spend more than we need, and who do not allow us to have more money.

For instance:

1. You spend a lot on brands / label

We like brands. And we love to show them.
In the end, this is also the policy of the various producers: to create a desirable image with which the customer can identify themselves to buy.
Buying branded products is not a mistake.
But it becomes a real problem when we spend a lot of money in this direction.
Think, that finally, the brands do not define you. It gives you a certain status in society, it creates a good image in the eyes of others. But they are not talking about you completely.
When it comes to brands, focus more on the idea of quality.
Beyond the image it gives you, it’s better that the money you spend will bring you a high-end user experience.

2. You’re dying to have the latest gadgets

Somehow related to the idea of brands, we tend to spend a lot on the latest gadgets.
As the latest phone model appears, everyone breaks their savings to buy it.
Why are we doing this?
Again, because we like a lot the label. Before making such a purchase, ask yourself the question: “What other product can offer me the same quality (or similar) at a lower price?”. In this way you can get rid of a major investment that you will feel when you need it most. Do not throw all your savings on such a purchase.
Try to prioritize the things you need. Or that you want.

3. Pride does not let you take your second job

If you read biographies of rich people, you will find that many of them had all sorts of small jobs at the beginning of their career. And such people manage to raise wealth precisely because they have a mercantil way of seeing life.
They know how to use their time to earn money. And they often earned money with at least a second job.
Thus, wealthy people have grown up with care to have at least two sources of income. If one was lost, they were not found in financially distress.
So why not take a second job? It can be a project to work from home. Or it can be part time. Or a weekend job.
Opportunities exist in different places, it is important to identify and capitalize them.

4. You buy things you do not need

You have certainly moved from one place to another at least once in your life time. It has not happened to you to ask yourself, “Why do I have so many things?”
That’s because we all tend to spend on things we do not really need. And we collect piles of unnecessary things that in one way or another make us life harder, and we alter our wallet, too.
Before you buy a thing, try to pass a purchase intent through the following filters:

Do I really need this?
Do not I already have an object that can help me for what I need?
Can I borrow this from someone? (For example, a drill / reading book)
Can not wait until the product is on sale?

Such measures may seem minor to you, but buying only what you need and when you really need it will help you save.
In addition, you will see that you will not fill your house with all sorts of unnecessary things.
Because then you will not know how to get rid of them in an effective way (to give them someone else / to send them for recycling).

On what did you spend the most of your money and what solutions did you apply to get rid of waste?

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10 secrets to be successful and make money

No matter what your occupation is, you probably also want to earn more money.
Whether you are an employee, you are dealing with an online store or any other business where you sell your products and interact with customers, it is important to truly understand the path to success.

Here are some “secrets” you need to keep in mind to be successful and make money:

1. The most important thing: You must be able to offer a quality product or service that as many people as possible want to buy.

2. Put others first! You have to satisfy the needs of others, to help them fulfill their own dreams, and in this process YOUR dreams will also be fulfilled.

3. You must own or control at least one product. To make a lot of money, you have to come into the market with something only you can offer. You must have exclusive control of (at least) one product or service. This must be something people can not find anywhere else. It’s good to be something that many people want.

4. Money brings money. You need to be prepared to spend money (on ads, promotions, etc.) to earn money. If you do not invest money in your business, if you do not “plant the seeds,” you will not really be able to get a rich “harvest.”

5. Focus on advantages! Your customers do not care how extraordinary your company is or what wonderful person you are, they just want to know how your product can help them.
How it will meet their expectations, how they will benefit from it and how it will improve their lives, make them happier or richer, etc. They will buy what you sell only if they feel they will do better by buying from you.

6. Give something for free. Of course you will not make money by offering your services or products for free, but the word “FREE” is still ranked No. 1 in the top of the best words to use in commercials.
If you can provide a free sample, free information or a free catalog, people will come to you for the things you offer for free and if you do the right thing they will be impressed and will want to do business with you.

7. Treat them properly! You have to give your clients the feeling that they can trust you, feel confident that you are right and that you will offer them quality products or services. In addition, they need to know that they can get their money back if they are not happy.

8. You will need help. You must use the services of dealers, distributors and agents. It is impossible to reach everyone through your own efforts.
Your dealers will have bigger sales than you could ever have alone. Your dealers will reach people you can not reach. Who are the most suitable people to recruit as dealers? Your own satisfied customers!

9. Reinvest 30%. You must always keep some of the profit to reinvest it back into your own business. Use this money to buy multiple ads, print multiple catalogs or flyers, send multiple notifications (written or online).
This reinvestments of money in your own business will make them grow and “multiply”. If you do not do that, you will never get to really earn a lot of money.

10. Always keep your eyes and ears open. Find someone who already wins how much money you want and … do exactly what he does!

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Extra Finance has started financing real estate projects

Romanian alternative lending company Extra Finance has started a new line of business financing small- to medium-sized residential real-estate projects. Extra Finance will offer these loans to investors on the Mintos marketplace.

On average, projects financed by Extra Finance amount to EUR 0.8 million and have a one year repayment term. Prior to granting financing, all projects are carefully assessed and verified by an external real-estate company.

New loans listed by Extra Finance on the Mintos marketplace will have an interest rate of over 12% and a minimum of 10% skin in the game.

Extra Finance is a Romanian non-banking lender that has been operating for more than eight years. The company has branches in two Romanian cities. Last year, Extra Finance had a revenue of EUR 20.5 million, with a net profit slightly below the EUR 2 million mark. Their loan portfolio was EUR 14.6 million.

Extra Finance joined the Mintos marketplace at the beginning of 2017. So far, the company has financed loans worth more than EUR 300 000 through the marketplace.

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Credissimo joins Viventor peer-to-peer lending marketplace

Credissimo logo

Credissimo, a Loan Originator from Bulgaria joins Viventor peer-to-peer lending marketplace.

Established in 2007, Credissimo currently operates in Bulgaria and Macedonia, and is about to commence operations in Poland.  Since inception, the company has issued over 280’000 loans with total worth of more than 84 Million Euros.
Credissimo loans listed on Viventor marketplace:

  • 100-1250 EURO’s in size
  • 3-24 month’s in duration
  • 10%-11% projected annual return
  • 60 days Buyback Guarantee from Credissimo

The lender will retain at least 5% of every single loan and bear the currency risk by listing its products in Euros. All loans of Credissimo are projected to make monthly repayments, ensuring frequent and stable cash flow.

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10 tips for start-up investors on the capital market

If we want to invest in the capital market, it is very important to have patience and not to act on emotional impulses.
We need to control our emotions and not let ourselves be influenced by the subjective aspects when trading on the stock market.
Greed and fear are the biggest enemies of investors. If you’ve decided to sell a title at a 25% profit, respect that threshold because otherwise it’s possible to lower your profit as a result of further corrections. And the mutual is true, if you have set a loss of 15%, do it, otherwise it is possible to record a larger loss.

10 tips for start-up investors on the capital market:

1. Do not invest in the stock market the money you need right away. Do not plan what to do with the money you will earn from your stock investments, because the stock market is unpredictable, and no matter how much experience you have or how many growth signals you may notice, the market may contradict you and fall.
It is not advisable to invest in the money programmed for important events such as schooling, medical interventions or other projects, because you may have less pleasant surprises.
It is recommended to invest in the amount of money that you may be deprived of for a period of time. It is said to “forget” about the money invested in the stock exchange. That does not mean you do not watch the market because it will do all the work for you, but not include that money in the next financial plans.
Also, do not invest in reserve money set aside for unpredictable situations, because it may not be to your advantage to sell whenever an emergency occurs!

2. Do not invest the borrowed money on the stock exchange. Borrowed money is interest-bearing and must be repaid within a certain amount of time. If the stock market does not confirm your theories, you will have to take money from other sources to cover any losses and to repay the borrowed amounts.That way, you may unbalance your budget over a long period of time and it will be quite difficult to recover financially. Reimbursement of borrowed money, which you have not benefited from due to decreases, creates a lot of stress and you will remain with a negative image about the capital market.

3. Investments on the stock exchange start with small amounts. It is much more comfortable to start trading small amounts in psychological terms because potential losses can still be small. All trading principles and rules are the same regardless of the amount you invest, whether you are a start-up investor or have a low-value portfolio. It is much easier to gain experience with an account with less zeros because you are more relaxed and you can learn from your own mistakes.

4. Start with a demo account in which to create a virtual portfolio. This will help you better understand market mechanisms and build your own information and analysis system. When you start to gain knowledge and figure out how the stock market works and are happy with the returns you get from the virtual portfolio you can start trading on a real account. You can still keep your demo account to test new strategies and make changes to your portfolio, which you are not sure you want to do in the real market. You will gain confidence in yourself and the capital market will no longer seem an unacceptable field. It costs you nothing to make a demo account, but you can gain a lot of experience.

5. Do not invest in complex financial instruments at first. Another important tip is to approach the market from simple to complex. From the basic investments that you know and know how it works and how you can gain, diversify your portfolio with more and more complex financial instruments as you gain experience.

6. Do not wait for the best price. When you have decided to sell or buy, do it at the market price. The capital market is dynamic and constantly moving, and no matter what plans you have, the market will try to contradict you. If you are a long-term investor, small price differences should not be the reason why you can delay a transaction. The more you expect the titles you are targeting to reach a certain price, the more you risk losing your earnings, or even worse, you can record higher losses.

7. Set up an investment strategy and respect it. Once you have identified the type of investor you are and your attitude towards risk, you can begin to make a strategy for future investments. The most important thing about the strategy you set is to respect it and not to change it frequently. If you oscillate between two or more strategies, you risk not to get the expected results. Discipline is one of the most important qualities of an investor, be it beginner or advanced.

8. Do not invest all the amount available in a single financial instrument. The likelihood that all the financial instruments you invest in will decrease at the same time is rather small. By allocating financial resources to different destinations, you can cover the potential loss of some of your investment through the gains made by others. No matter how tempting an investment is, do not bet on a single card!
Diversification can make a difference between a winning investor and one who still expects his investment to become profitable.

9. Invest in the long run, so downtimes will have time to recover and on long-term you can make profit.

10. Invest in blue-chips. Blue-chip shares are the most liquid stocks with high capitalization and consistent financial results over the years. These shares have increased their value over time, due to the confidence shown by investors, confirming each year without disappointing their shareholders. These shares are usualy part of a number of stock indices, which once again demonstrate their quality of capital market stars.

Last but not least, when investing in the capital market, you must always be informed and not invest based on rumors. Any information needs to be verified from multiple sources and as far as possible these sources must be reliable.

Do not forget that in order to be an investor you need to spend time on this activity and become actively involved in decision-making.

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From savings to investments

Many people confuse the terms saving and investing. To save is to create a reserve of money that is kept at a risk as low as possible, even close to zero, while investing means putting the money saved to work in your favor to increase their value and to help you reach your financial goals more easily.

Savings to be affordable and to conserve their value are usually kept in financial instruments with increased liquidity and low risks, such as bank deposits or treasury bonds, these instruments being characterized by low returns. Earnings of savings are in the form of interest and the aim is to cover at least the inflation rate.

The qim of investments, on the other side, is the achieving of high returns by increasing the value of the invested capital and making profit, assuming an acceptable risk. Thus, the financial instruments used are from the least risky ones, such as bonds with a relatively low risk, medium risk (shares and peer-to-peer lending), and derivatives that have a high degree of risk and which are especially addressed to professional investors.

In short, the purpose of savings is to preserve capital at low risk and low returns, while the purpose of the investments are to increase the value of the capital invested in variable risk and return conditions depending on the financial instruments chosen.

The capital market is a dynamic way to invest the saved money. If you do not have the necessary knowledge to start investing on your own, you can contact a specialist. Before you start investing, you need to go through some essential steps:

– First of all you need to start your financial education. You can not start investing before understanding how the financial markets work and what are the characteristics of the financial instruments you want to invest in;

– You need to know what your risk appetite or maximum risk level is, according to which you will choose the right investments for your risk profile;

– You need to set your investment goals, including the time frame for which you want to invest, in order to create a diversified portfolio that meets your needs;

And last but not least, you need to determine what liquidity you want, so you can have access to your money when you want it.

Choosing the right investments may seem like a difficult process due to the multitude and variety of available tools, but having a trustworthy partner with you, as it wants to be for you, investments can become accessible to anyone who wants to become an investor .

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