Robocash Review

Is it safe to invest on Robocash ?

This is a legitimate question for any investor seeking to grow their financial assets. But it is impossible to give a binary answer, since it is up to each person to make up their own mind according to the elements presented to them. Nevertheless, as you can imagine given the money invested, I have formed my own opinion on the matter.

A strong international group

The Robocash platform was not set up by a bunch of geeks in their parents’ garage. Don’t laugh, there are a few I would never invest in.

We are dealing with a commercial entity which is owned by an international group and which is part of its value chain.

The objective of the Robocash platform is to promote the development of the lending activities of the group’s various entities by providing additional financing from private investors.

But its role remains limited as only 12% of the group’s total funding comes directly from the platform.

Sergey Sedov has built a group that generates tens of millions of dollars in turnover each year and employs nearly 1,800 people. He is an entrepreneur who created his first company when the Internet was still in its infancy.

100% of the loans guaranteed

All loans offered come with a 30-day buyback guarantee (better than most competitors who offer 60 days).

Thus, if a borrower defaults, the loan company buys back the loan in full after 30 days past due. This includes interest accrued for the entire period you held the loan (so including days past due).

In fact, I never have any late loans. But far from thinking that the borrowers at the end of the chain are virtuous, everything suggests that it is the group’s policy to assume the late payments themselves.

It seems to me that the loan originators pay us no matter what, which they can afford given the financial strength of the group and the cohesion between its different entities.

That’s pretty smart.

On the one hand, investors never experience any delays in their investments, which gives the feeling of an efficient platform.

On the other hand, by directly assuming this risk of delay (but also of default), Robocash recovers all interest related to the delay when payment is collected from the borrower.

Strategically formidable and effective !

Group guarantee

In the event that a problem arises with one of the loan originators, Robocash Group offers a group guarantee (although this is not legally formalised). This would be mobilised in the event that the company could not meet its financial commitments to investors.

It is in fact a reserve fund set up by the companies of the Robocash group. It is a guarantee for investors to recover their capital in case a company defaults, which has never happened so far, unlike the leader (Analysis and opinion of Mintos).

Indirectly, the profits made by the group are also a guarantee in case of problems in one of its subsidiaries. It is a great security to be in business with a group that is in solidarity, whereas Mintos is simply a platform where supply and demand meet.

The foundations of these two platforms are totally different. But as you can probably tell, I prefer the model where the loan originator is closely linked to the platform on which I invest.

Risk diversification

Even novice investors know that one of the keys to minimising risk is to diversify your assets. This diversification can take many forms, which is why it is so difficult to implement a real diversification policy.

Robocash does not offer an automatic diversification feature, which is not bad when you see the result on Mintos. But it is quite possible to set up a portfolio per loan company and to establish a fund limit for each of these portfolios. Thus, the investor can diversify their portfolio between loan originators.

Because once again, I see no point in diversifying between loans. It is the strength of the loan originator, not the borrower, which guarantees the success of our investment operations. But for those who wish to do so, it is possible to invest as little as €1 per loan.

In practice, with Robocash we smooth out the risk through intermediation rather than diversification. With 4 loan originators, or rather 3 since RC RIGA is only one entity, diversification is limited.

It is the fact of having a chain of intermediaries between the investor and the borrower that makes it possible to limit and smooth out the risk. This is especially true for RC RIGA Singapore as we have seen previously.

The potential risk is possibly at a geographical level because in practice our lending is very regionalized, especially in Kazakhstan and South East Asia. If a crisis were to occur, it could have an impact, but it could be anywhere in the world.

Crises are now part of our daily life and we have demonstrated our ability to overcome them, especially in Asia.

Robocash is not regulated

This is obviously a point worth raising, even if many crowdlending platforms remain unregulated. The movement is underway but leaves some people sceptical who rightly noted the difficulty for PeerBerry, a trusted platform, to be regulated in Latvia.

In my Peerberry review , I show that the platform has never encountered any payment defaults and is making good profits. Its only fault is that its operational team is based in Lithuania.

On the other hand, Mintos makes losses every year and has had a huge number of defaults from loan originators to the detriment of investors. Yet Mintos was licensed by the Latvian government. Go figure…

As a result, PeerBerry is relocating part of its crowdfunding activities (short-term loans) to … Croatia. It seems that Robocash was right before anyone else in locating its activities in this European country.

So that’s a point I’m going to follow up on but it doesn’t bother me more than that.