Bondster Review

Bondster Review

Bondster is a new marketplace for loans based in the Czech Republic. Investors can invest in real estate and personal loans with yields up to 15% per year. In this Bondster review, you will learn more about the structure of the peer-to-peer (P2P) platform as well as risks and returns connected to investments on Bondster.

Bondster in Numbers

When choosing which P2P lending site you should invest on, don’t underestimate the importance of the transparency of the company. It’s so important to gather as much information as possible about a platform before you invest. With Bondster, a lot of the company’s most important statistics are accessible via their website.

Take a look at the following metrics for more information on this platform:

What can we see from the table above?

This P2P marketplace was founded in Prague in 2017, it’s owned by CEP Invest Private Equity and it’s operated by the team behind the P2B platform pujcmefirme.cz. Since Bondster was founded, the P2P marketplace has attracted more than 8,600 investors from all over Europe.

While we could find some of the above data on Bondster’s website, other information, including the average portfolio size and any financial reports are nowhere to be found.

This gave us a good reason to reach out to Bondster and test their customer support.

Luckily, Bondster replied to our request within a few hours and the team was very keen to provide us with additional information about their investors’ earnings, average portfolio size as well as their latest financial reports.

It’s worth noting that not all P2P lending platforms have such a responsive and helpful customer service team. When reaching out to other platforms, we’ve often been subjected to total silence.

When comparing the average portfolio size of Bondster’s investors to those on platforms that launched in the same year (like Envestio or Crowdestor), Bondster’s is slightly larger.

This could be a result of many things, but if we bear in mind that new investors typically start with smaller investments while building trust in a platform, and then later invest more capital, it’s likely that Bondster’s investors have greater trust in their platform than those using competitor platforms.

Bondster’s New User Requirements

Similarly to the registration requirements of every other European P2P platform, you need to be over 18 years old and have a European bank account in your name in order to invest on Bondster.

Sign Up Process

Again, like competitor platforms, the sign-up process consists of providing a copy of your ID, driving license or passport as well as a bank statement to prove that you are the account owner. This is a standard procedure that all platforms complying with the Know-Your-Customer regulations complete.

Transferring Money

Non-European investors need to prove the source of their income if they want to invest on Bondster.

Ideally, investors will transfer funds to their Bondster account via SEPA (bank transfer). There is no additional fee for this transfer and you should expect it to take between two and four days.

Note, Bondster only accepts incoming funds in euros or Czech crowns. If you choose to transfer funds in euros but invest in Czech crowns, your deposit will be exchanged according to the bank’s current exchange rate.

We recommend sending your money to Bondster in the currency you want to invest in, as the banks like to charge hefty exchange fees. You can use digital banks such as Revolut or N26 to get the best exchange rates.

Bondster’s Risk and Return

Property-Backed Real Estate Loans vs. Unsecured Personal Loans

Bondster market themselves as a P2P lending platform that offers secured investments. These secured investments are, however, only valid for certain opportunities.

Bondster investors can have the choice of property-backed real estate loans, unsecured personal loans and business loans that are backed by a personal guarantee of the borrower.

As we write this review there are only 44 real estate loans and 27 business loans, however, there are over 1,000 personal loans.

Due to the small numbers of loans available, we don’t think Bondster’s real estate or business loans are worth investing in.

The protection of those investments, as well as the returns, are no better than those on competitor sites that list real estate loans (like EstateGuru and Crowdestate) or P2B loans (Crowdestor and Grupeer).

If you like the sound of Bondster, check out its Latvian counterpart Mintos. Mintos also lists a variety of loans, a lot of which are from the same loan originators. Most Mintos investors choose the platform’s unsecured personal loans.

Czech Crowns vs. Euros

If you’re considering Bondster, you should know that there is a significant difference between investing in euros and Czech crowns.

Loans available for investment in Czech crowns typically have lower interest: 3.9-9%. In fact, at the moment, there are only a handful of loans in Czech crowns with interest above 10%.

Most investors will, however, choose to invest in euros. At the moment there are over 1,000 available loans in euros with an annual interest of 7-13%. These are personal loans which are backed by the loan originator’s buyback guarantee.

Bondster also offers the opportunity to invest in real estate loans with an interest of 3.9-9% or business loans with an interest of 5-16%.

Loan Originators

Bondster collaborates with many loan originators that also list their loans on Mintos. In fact, the Czech loan provider ACEMA, which has very positive ratings and no defaults on Mintos, is one of Bondster’s biggest partners.

Alongside ACEMA, Bondster works with other Czech loan providers -bezbanky.cz, bankometr.cz, Yaris; loan originators from Poland - Mikrokasa (which is also listed on Grupeer) and stikcredit.bg (one of Mintos’s loan originators); and Polish companies Lime Kredyt and Net Gotówka.

Find the full list of loan originators on Bondster’s website.

Most of the loans come from Czech Republic, Russia, Bulgaria and Poland, but Bondster actually collaborates with 23 loan providers from eight countries.

While this might seem like a great diversification opportunity, it’s worth noting that investors cannot always diversify across all countries as they’re subject to the availability of loans.

Each loan provider has a dedicated section on Bondester’s website with a brief description and financial metrics.a This level of transparency is pretty unique to Bondster. Some platforms, like Fast Invest, don’t even share the names of their loan originators.

Making information like this available definitely makes this P2P platform more trustworthy.

Bondster’s Buyback Guarantee

Most of the unsecured personal loans on Bondster offer a buyback guarantee provided by the loan originator. Depending on the loan company, your investment, together with the accrued interest, will be purchased back from you within 30 or 60 days of delayed payments.

Buyback guarantees of this kind are standard within the P2P lending industry and you’ll find similar features on platforms like PeerBerry, Robocash and Twino. The differences usually stem from the number of days until the buyback guarantee is activated or the terms concerning the accrued interest. For example, some of the loan originators on platforms like Mintos do not pay accrued interest if a loan is delayed.

Is Bondster Safe?

Before investing in a project, most investors tend to ask themselves the same question: ‘how safe is this opportunity?’ We suggest every investor conducts a due diligence of the platforms they’re considering investing on, in order to find out which platform is the right fit. First, let’s take a look at Bondster’s management.

Who Leads the Team?

Bondster Marketplace s.r.o. is led by the CEO Jana Mückova, and has been since September 2019.

According to her LinkedIn profile, Jana previously worked as the Senior Manager of international relations within the Czech Export Bank for three years.

Jana studied finance and international business affairs at University of Economics, Prague (VŠE) and Chinese studies and Chinese language at two prestigious universities in Hong Kong and China and of late she has been working on becoming an authority within the Czech fintech scene. She is also a co-author of a book called „Obchod s Čínou bez rizika a se ziskem" (Business with China without risk and with a profit) published by Mladá Fronta.

Jana is also the leading economist of Bondster and commented and contributed to numerous articles posted on high authority news websites in Czech Republic.

• Jana commented on Czech Republic’s inflation on seznamzpravy.cz
• Jana commented on Czech economy for major media outlet in Czech Republic Ceska televize
• Jana shared her career path during an interview with penize.cz
• Jana interviewed for Czech website focused on technology, business, traveling and design czechcrunch.cz
• Jana presented new investments opportunities at Investiční konference

Who is the Legal Owner of the Company?

Bondster s.r.o is owned by CEP Invest Private Equity SE. The owner of CEP Invest Private Equity SE is Václav Valeš. According to the Czech business register, there is one more company based at the same address - CEP Investments s.r.o.

The CEP Investments s.r.o. is a company specifically set up for private investments by the CEP Invest Private Equity SE. Michal Ondrýsek is the executive officer of CEP Investments s.r.o.

Is there Anything Suspicious within the Terms and Conditions?

Bondster’s terms and conditions are 53 pages long, and we went through the contract with a fine-tooth comb to check for anything suspicious.

The result? Nothing major!

The company’s terms seem to be a standardized contract that’s similar to those on other P2P lending platforms.

One thing to point out (although this is the case with all lending sites) is that Bondster’s terms do state that investors risk losing all their investments when using the platform.

Another interesting part of the contract is that you, as an investor, can request the provider repurchases your assignment. Having this as part of the contract increases the trust in Bondster’s services.

We also had a look at Bondster’s assignment agreement and haven’t found any suspicious clauses here.

Who Does the Due Diligence for Bondster’s Loan Originators?

Some companies outsource the due diligence of their loan originators or borrowers, but Bondster does this work in-house. According to Bondster, the platform has their internal risk team, who evaluate the individual loan providers.

Bondster evaluates metrics such as the PAR ratio (portfolio at risk), recovery rates, equity ratios, liquidity and profitability ratios.

We believe that having a team of experienced people in-house improves the risk assessment over outsourcing it to third-parties, which is what Monethera and Crowdestor do.

Is Bondster able to Protect Your Money?

Investing on Bondster is connected to certain risks, as is the case when investing on every platform. Most of your investments will be protected by a buyback guarantee: real estate loans are protected by property and business loans by a personal guarantee. Your funds on Bondster are stored in segregated bank accounts. Currently, 0.05% of investors’ money is in the process of being enforced. The low default rate is proof that Bondster is able to protect your investments.

Bondster’s Usability

What we really appreciate about Bondster is the amount of information they share about each loan. It’s actually very similar to the data shared on Viventor.

Even though most investors will be using the Auto Invest tool, having additional information about each loan increases investors’ trust in a platform and its services.

In your investor’s dashboard, you can view your investments that are currently active as well as your transaction statements.

Bondster’s Auto Invest

Like many other platforms, Bondster also offers investors the option to automate their investment strategies.

When using the Auto Invest tool, Bondster gives you full control over your investment strategy and there are enough loans available to invest in, especially compared to Mintos and Robocash, which are sometimes suffering from cash drag.

When using Auto Invest, you can define the following criteria:

• Investment amount per loan
• Interest rate
• Loan term
• Buyback guarantee
• Country of loan originator
• Loan originator
• Loan type
• Loan status

If liquidity is an important factor for you (and it probably should be!), we suggest ticking the box within the Investment exit option. We will describe this option in further detail in the next section of our Bondster review.

Using the Auto Invest is pretty self-explanatory, but should you run into problems, some of the above criterias come with additional information, simply hover over the information icon to find out more.

Alongside the Auto Invest tool and the list of your investments, you can also download your account statement and use this to calculate your taxes. Note, that Bondster does not withhold any taxes, unlike Viainvest or FinBee.

Languages Bonster’s Available In

Bondster’s website is available in three languages: Czech, English, and German, but there’s definitely room for improvement when it comes to the translation of their website; we have spotted a lot of errors in the German and English versions.

The newsletter is only available in Czech. So if you don’t speak Czech it will likely be confusing. We haven’t found the option to change the newsletter’s language but we’re hopeful that Bondster will fix those issues in the near future.

Bondster’s Liquidity

Liquidity is an important factor for any asset class. When choosing a new P2P platform, you should know whether you have the opportunity to exit your investments should you want to.

Bondster offers two investment exit options:

• 1. Smart Reserve: The smart reserve is a function that allows investors to withdraw their investments at any time with no additional cost. Note that this is only available for certain loans with a low interest of 3.9%. These loans are specially market with the option.
• Guarantee of Liquidity:Some loans give you the option to exit your investment within a week, month, quarter or year. There is sometimes a fee (typically 1-2%) connected to early withdrawals.

You should know that the majority of loans do not offer you the option to liquidate your investments before the end of the loan term. Currently, only around 10% of loans support early withdrawals.

There is currently no secondary market where you could sell your investments for a discounted price.

If you are looking for a platform that supports instant withdrawals, we suggest looking at the Mintos’ Invest and Access or Bondora’s Go and Grow products.

Bondster’s Customer Support

Bondster’s customer support is very responsive. During our test, we requested a link to their latest financial reports and Bondster got back to us with the income statements and balance sheets right away. Many platforms, like Crowdestor or FinBee, don’t disclose this information, even when specifically requested.

You can get in touch with the support via their contact form where you can let them know whether you’d prefer to jump on a call with them or have them answer your requests via email.

Before reaching out to their support, we suggest having a look at Bondster’s FAQ section, as most of the user’s questions have been already answered.

Bondster vs. Zonky

If you’re familiar with P2P lending, you might have heard about the P2P lending site Zonky. Zonky is the most popular P2P platform in Czech Republic, and many investors have asked us for a comparison of Bondster and Zonky.

We prepared the following table that should give you an overview of the differences between those two platforms.

Different Business Models

It’s not easy to compare these two platforms as they both fundamentally follow a different business model. Bondster allows you to invest in euros as well as Czech crowns, while Zonky’s focus is to cater to investors from Czech Republic and Slovakia only. Their website isn’t even available in English.

Different Loan Originators

Zonky was the first P2P lending platform in the Czech Republic to list self-originated loans. Bondster, on the other hand, mainly works with loan originators from Russia, Poland, Czech Republic, and Bulgaria.

Zonky charges fees of up to 5%, compared to Bondster’s max. 2% fee which investors pay in case they want to withdraw their money before the end of their loan term. If you deduct the income tax on Bondster, your return will be still above 10%, which is over double Zonky’s return of below 5%.

Bondster also offers more guarantees than Zonky, where you can invest in unsecured personal loans with no buyback.

Bondster Review Summary

Bondster follows a similar business model to Mintos, making it an interesting alternative to the Estonian platform. Bondster is not, however, as functional or popular as Mintos, but their product still seems to find its users. If you decide to use Bondster, you will want to invest in personal loans backed by the buyback guarantee with an average yield of 12-13%.

Diversification Options

Compared to other platforms, Bondster does not offer broad diversification functions, but the minimum investment amount starts at €5 which is lower than most other lending sites.

Liquidity

If you are someone who wants to have instant access to your investments, Bondster isn’t the best fit for you.

Can Bondster Compete?

If you are looking for an alternative to the Baltic P2P platforms, Bondster might be a good solution for you. In terms of returns, safety, and automation of your strategies, Bondster can certainly compete with other popular platforms. It’s also one of the most transparent P2P lending sites we came across in the recent weeks.

Although Bondster might appeal the most for Czech investors, it’s a suitable platform for anyone, no matter whether you’re just starting out or or want to improve your P2P diversification, and regardless of your country of residence.

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