Afranga is a Bulgarian P2P lending platform that allows you to invest in consumer loans from the Bulgarian lending company StikCredit. This recently launched P2P lending platform offers you the chance to earn 12% interest per year by investing in loans secured by a buyback guarantee. Find out more about Afranga in our in-depth review.
Do you prefer to watch a video? Here is all you need to know about Afranga.
Afranga in Numbers
Afranga launched its operations in early 2021, making it one of the newest P2P lending platforms. The platform is backed by the Bulgarian lender Stikcredit, well-known amongst experienced investors.
Stikcredit started its lending operations in 2013. The company focuses exclusively on lending money to Bulgarian borrowers. The lender issues short-term loans as well as installment loans with a duration of up to 24 months.
Currently, Afranga is listing installment loans with a loan term between 5 and 10 months and an interest rate of 12%.
The effective APR for installment loans is between 39% and 49%. This is a relatively conservative interest rate for borrowers compared to many payday loan lenders in and outside of Bulgaria.
Stickredit AD is licensed and regulated by the Bulgarian National Bank.
Afranga is currently not offering any cashback bonuses for new investors.
Afranga’s User Requirements
You need to meet certain requirements to earn interest by investing in loans on Afranga.
- Be over 18 years of age
- Have citizenship in an EU / EEA country
- Have a bank account in an EU / EEA country
- Be resident in a country that has equivalent AML/CFT standards like in the European Union
- Pass the verification process
Afranga is listing loans in EUR, so we recommend depositing money from your EUR account to avoid currency exchange fees. Afranga advises only to transfer EUR to your account. If you don’t have a EUR account, you can open a free EUR bank account with Transferwise or N26.
No EUR bank account? No problem
Risk and Return
The risk and return ratio is the most important metric that you should consider when investing in loans. When investing on Afranga, you are currently only funding loans from Stikcredit, which means that your diversification is very limited to just one lender in one market.
As mentioned in the previous section of our Afranga review, Stikcredit is a well-established lending company with a decent track record.
If the borrower is delayed with its payments for more than 60 days, Stikcredit will repurchase the claim back from you and repay the loan principal and the accrued interest.
This guarantee is directly connected to the financial performance of the lender as well as the quality of its portfolio.
Let’s look at some additional data that will help you to evaluate the buyback guarantee.
Financial Reports from Stikcredit
Afranga was happy to provide us with audited financial reports for 2019 and 2020. Remember that the reports are from the Stikcredit lender rather than the platform, as Afranga only launched in 2021.
As you can see, Stikcredit managed to be profitable even during challenging times when many other lenders struggled due to the COVID-19 pandemic in 2020.
You should also be paying attention to the percentage of the loan book funded from P2P investors and from its loan book.
Stikcredit is well known in the industry, and the lender used to fund its loans via various marketplaces. Let’s have a look at the current status of Stikcredit’s portfolio.
Let’s have a look at Stikcredit’s portfolio. The data in this table was retrieved on 28/7/2021.
|Platform||Active Portfolio||% of Delayed Loans|
* Stikcredit doesn’t have the means to repay the loans because they are issued by an intermediary owned by Grupeer and Stikcredit doesn’t have information about the end investor. Until the matter is sorted in court and a liquidator is appointed, there is nothing Stikcredit can do.
** Stikcredit ended 2020 with c. €2.2M of funding from marketplaces and c. €6M of equity.
Is Afranga Safe?
If you are considering investing in loans, you should complete thorough research into the platform’s management and the terms and conditions.
Who Leads the Team?
Afranga is currently led by the COO Yonko Chuklev. Yonko was previously the CFO of a company producing protein balls. He also gained experience in Acuris Risk Intelligence, a London-based company that analyzes user data. Last but not least, Yonko has also worked as an Investment Analyst at Innimmo, a consulting firm in Sofia, Bulgaria.
The core team consists of four more employees who are responsible for Marketing, Support and the development of the platform.
Who Owns the Platform?
Afranga is funded by StikCredit and owned by Stefan Topuzakov, Kristian Kostadinov and Svetlin Nikolov. The company was founded in December 2020.
Are There Any Suspicious Terms and Conditions?
Whether you are a pro or just a beginner, it's essential to fully understand the rights when investing in loans. To be safe, you should read the terms and conditions before depositing any funds on any platform.
Storage of Funds
When depositing your funds on Afranga, the money will be stored in segregated bank accounts. This is a standard procedure for most marketplaces.
As with any other platform, Afranga may also amend its terms and conditions. The platform will inform you about any changes five days before the new terms take effect.
While you can’t review the loan agreements as an unregistered user, you can simply sign up for free and head to the primary market to review the documents. Verifying your identity is not required if you just want to look at the assignment agreements between you and the lender.
Potential red flags
- Currently, we are not aware of any red flags.
What’s our Opinion of Afranga?
Afranga makes an excellent first impression. We have had a few emails back and forth with the support to verify and confirm specific numbers.
The platform ticks many of the boxes we are looking for when evaluating P2P lending sites. We haven’t found any suspicious information about the company or its lending partner during our research.
The lender’s reports are audited and prepared following the IFRS. The company has been operating on the market since 2013 and has been profitable in the last two years.
While the diversification of your portfolio is very limited to loans only from Bulgaria, the quality of the loans could be much higher than many of the loans listed on more popular marketplaces like Mintos or Bondora.
Did we also mention that Afranga offers some of the highest rates in the industry?
After our initial research, we decided to test Afranga ourselves.
None of our portfolio's loans are delayed or defaulted. We will update our Afranga review if we spot any irregularities or changes to is services. Our portfolio consists of loans with a loan term between 1 and 6 months and an interest rate of 12%.
Afranga is a very user-friendly platform. The design is clean and you can easily navigate to all the important information that you might require. It’s much easier to navigate than IUVO’s platform, which is also a marketplace from Bulgaria.
As with most P2P lending platforms, Afranga also offers a tool to automate your investments. The Auto Invest feature is intuitive and takes less than one minute to set everything up. Simply define your preferences and activate your Auto Invest strategy.
🧾Does Afranga deduct taxes?
Afranga does not charge any taxes on your earnings in Bulgaria. You can see a summary of your account in your dashboard. When you file your taxes in the nation where you are a tax resident, you may download an account statement that you can submit to your tax authorities.
Afranga has recently launched its secondary market. To sell your investments, you must navigate to My Investment and choose the loans you wish to sell.
After you have selected your loans, you have to confirm your choice.
In the next step, you will be forwarded to the secondary market view, where you can define the premium or discounts for your loans.
The period until your loans are sold depends on the loan amounts and the current demand on Afranga. Some users have reported that they were able to sell some loans within one day.
As we are writing this Afranga review, there is no fee for the secondary market.
If you expect to receive an accrued interest for your loan, you will have to wait until the loan is repaid.
Afranga’s support is very responsive. The platform answered our questions within 24 hours. Afranga didn’t hesitate to provide further details that are not publicly available on the website, which we appreciate.
You can reach out to Afranga during business hours at firstname.lastname@example.org.
Afranga Review Summary
Afranga is a smaller P2P platform that lists loans from Stikcredit, a profitable lending company in Bulgaria. By investing in loans on Afranga, you will earn up to 12% interest per year, making it the highest return on investment compared to other P2P lending platforms.
Main Takeaways From Our Afranga Review:
- Regulated and profitable lender
- 60-day buyback guarantee
- High-interest rate
- Responsive support
If you are looking for ways to invest in consumer loans from Bulgaria, Afranga is currently one of the best options.
Why is the interest rate so high?
The interest rate on other platforms has always been 11-16% p.a., depending on market conditions. Stikcredit issues high-interest rate loans with an average APR of ~ 200%. The interest rate difference is significant enough to cover Stikcredit’s operating costs and profits.
What should I keep in mind when investing on Afranga?
Your portfolio won’t be diversified across multiple countries. That’s one of the downsides of Afranga. On the other hand, the platform offers very attractive returns, and the financials of the lending company speak for themselves.
Who is Afranga for?
Afranga is suitable for more experienced investors looking for the best risk and return ratio when investing in loans in Bulgaria. The platform offers even higher returns than its competitor Easy Credit on IUVO.
Can I withdraw my money anytime?
If you invest on Afranga, you can either wait until your loans are repaid or sell your investments on the secondary market.