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What is peer-to-peer purchasing of receivables?
Peer-to-peer purchasing of receivables (P2P) is financing a non-bank financial institution by a large group of people. It is more often managed by a specialized internet portals, such as iuvo.
What is iuvo and how does it work?
Iuvo was founded in July 2016 as a P2P portal, which allows its users to purchase loan receivables, issued by non-bank lending companies (originators). The users make a motivational return, and the originators get additional financing to expand their business.
After a loan is issued by an originator, it is listed on iuvo, where the users can see it and choose to purchase receivables from it to benefit from the expected annual return.
The user receives transfers to their iuvo account with paid installments. The received amount is proportional to the share they own of the principal.
In case a borrower delays the full repayment of an installment with a predefined number of days, the recovery mechanism is activated by the given originator, and you receive your remaining principal back. Some of the originators iuvo works with also pay you the expected annual return for the period of the delay.
What is a loan originator?
The loan originators are regulated non-bank financial institutions. These companies lend money with their own capital. The loan originators on iuvo are companies with good reputation and long history. They are standard-makers for issuing and managing loans, risk assessment, and debt collection on their respective markets. Iuvo is the p2p portal with one of the strictest due diligence processes for adding new originators.
What is a recovery mechanism?
It is a contractual obligation of every Originator on iuvo to recover the funds of every user who has purchased receivables from them in case of a delayed installment. Different originators offer different terms for the predefined number of days to activate the recovery mechanism.
What is a “group guarantee” and is there such on iuvo?
On iuvo there is a group guarantee for the loan originators, part of Management Financial Group (MFG) – Easy Credit, Easy Business, Access Finance, AXI Card, Mi Prestamo, Kredis and Viva Credit. MFG supports its companies with financial and other resources. The goal is for each of them to grow and be stable. MFG takes full responsibility for the debt of its companies, and in the unlikely event of insolvency of an originator part of MFG, the users will keep receiving payments for the loan receivables in the same way they did until that point in time.
Who are the borrowers?
All loans on the portal are already granted to the borrowers and are based on contractual responsibilities. The borrowers can be individuals (in most cases) or companies.
Iuvo’s users can access certain information about the borrower of every loan. Due to security measures and the mechanism by which the P2P portals function in Europe, the borrower’s identity is not revealed.
The score class determines the probability of the borrower to delay the full repayment of their loan.
Why should I use iuvo?
Since its launch in 2016, iuvo shows stable growth and offers the opportunity to make your money work for you with a competitive return. Some of the main advantages are:
– Easy to use – Suitable for everybody, regardless of their level of previous financial experience. No special skills are required to purchase receivables.
– Competitive return – Depending on the receivables you purchase, your expected annual return can be between 5% and 15%.
– Accessible – You can start regardless of your financial status. The minimum amount to purchase receivables is as little as 10 EUR. You add funds to your balance as many times as you want with no maximum limit.