Posted by In the second episode of P2P Unscripted, I spoke with Jakub from P2P Empire about five topics that have been demanded by the P2P lending investor community: The macroeconomic environment, the Nera Capital case on Mintos, the situation around Debitum and LFDF, the value of platform visits, and recommending P2P investments to friends and family.
The Macroeconomic Environment: Reason to Panic?
The current energy crisis and high inflation are worrying many P2P investors. We take a somewhat calmer view, though. We have lived through the Covid pandemic, the war in Ukraine, and other disruptions, and we draw on the experience gained during that time. The P2P platforms themselves also report that earlier crises – particularly the pandemic – had far greater operational impact than the current market environment.
According to Jakub, there are clear risk groups that can be identified: Borrowers in emerging markets and borrowers in the low-wage sector would be hit hardest by rising costs. Anyone looking to reduce their risk should cut back on – or avoid entirely – investments with newly launched lenders from emerging markets that have only a limited track record.
Personally, I see the real danger less in an economic downturn and more in a potential liquidity shock: When investors withdraw capital in huge amounts, lenders come under refinancing pressure and weak business models are exposed. The focus should therefore be on business models with sustainable profitability and transparent loan book performance. These are the benchmarks against which lenders should be measured and assessed.
Geopolitical Risk: Attack on the Baltic States?
A question from the community: How well are Baltic platforms prepared for a potential conflict with Russia? The honest answer: Not very much.
Experience from Ukraine has shown that money transfers and operations under martial law can be severely restricted. The risk is particularly high for platforms whose financed assets – such as real estate or consumer credit portfolios – are located in the Baltic region. There, recovering funds through non-functioning courts could become extremely drawn-out and uncertain.
My own investments at PeerBerry, TWINO, and Debitum were also blocked at the time by the war in Ukraine. PeerBerry returned the capital within three years, Twino was able to resolve the situation gradually, and Debitum (Motor Finance) remains unresolved to this day.
The Nera Capital Case on Mintos: EUR 61 Million at Risk?
Nera Capital is a lender on Mintos that finances law firms in so-called “no win, no fee” cases. The UK regulator is currently examining the solvency of several of these firms, following which their interest payments to Nera Capital – and thus to Mintos investors – have ceased. Now the repayment of principal is also at risk of stalling.
The outstanding portfolio on Mintos amounts to roughly EUR 61 million, potentially the largest lender default in the platform’s history. Nera Capital’s Mintos Risk Score most recently stood at around 7.1 to 7.6 – broadly in the safer range – which raises the question of how meaningful such scores actually are.
The core problem: Litigation finance is a complex business model that is very difficult to scrutinize. Many investors were probably drawn to this lender primarily by cashback promotions, without fully understanding the underlying risk.
That said, investors must also take personal responsibility and not treat Mintos as the sole due diligence authority. The platform has been unprofitable for years, lacks the resources for in-depth risk management across all markets, and the base prospectus itself openly flags the various risks involved.
Debitum and LFDF: Questions Remain
Five months after the first episode, my assessment of Debitum / LFDF has changed. I now see an elevated risk profile and have temporarily paused my investments there. The crux of the problem: public allegations of inflated purchase prices, missing purchase contracts, and a company response that leans more on cashback promotions and on-site visits than on consistent transparency.
My appeal: Investors should not dismiss critical, publicly available information as “old news,” but should continue to push platforms toward greater transparency. Regulators – whether in Latvia or elsewhere – will not do this for them.
Platform Visits: Useful, But No Substitute for Hard Facts
On-site visits to P2P platforms can be a useful part of due diligence. They give you a sense of the people behind the company and allow direct dialogue with management or shareholders. You sometimes also gain information that isn’t publicly available. I see this as a worthwhile component, but not a load-bearing pillar of a data- and numbers-driven analysis.
In the case of Debitum/LFDF, I was offered a visit to inspect the land on-site, with travel and accommodation at the company’s expense. In general, that’s a generous gesture. But with hundreds of purchase contracts, it’s impossible to form a well-founded assessment in a day or two. Anyone who gives a blanket “thumbs up” after such a visit is doing investors no favours. A serious evaluation requires AI-assisted document analysis.
Recommending P2P to Friends and Family
In personal circles, people occasionally ask about P2P lending. Mostly out of curiosity about what I actually do, less often out of genuine interest in investing. When it gets concrete, I recommend P2P as a small add-on, never as a core investment. My wife started investing in a few platforms last year after a thorough conversation about the risks and with a very small amount.
What I have noticed: As soon as you start explaining the risks, many people switch off. And that’s precisely the problem. Anyone who treats P2P as a comfortable and passive investment will be caught off guard by developments like the Nera Capital case.
My recommendation for getting started: First a global index fund as a foundation, then – for those who want it – a small, consciously chosen P2P position. And anyone who isn’t prepared to occasionally read a longer article or critically assess a development should put their money somewhere else.
Conclusion: Personal Responsibility Remains Essential
P2P investments are not a passive buy-and-hold instrument. Anyone who relies on marketing promises, cashback promotions, or platform risk scores without understanding the underlying business model risks being badly surprised.
The base prospectus, dry as it may be, is often the most honest source of information available. And with AI assistance, it can today be quickly broken down to its key risks. Anyone unwilling or unable to do that should put their money elsewhere.
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I’m Denny Neidhardt, the founder of re:think P2P. On this blog, I help retail investors make smarter, well-informed investment decisions in the world of P2P lending. Since 2019, I’ve been publishing in-depth analyses, platform reviews, and risk assessments to bring more transparency to this investment space. My goal is to challenge marketing claims, question developments, and empower investors with honest, independent insights.