Twino Review 2024: Bad Risk Management!

Twino is one of the heavyweights among European P2P lending platforms. This is evidenced by its long history since 2015, 60,000+ registered investors and a financed loan volume of EUR 1+ billion. However, the platform’s development since its foundation has been anything but straightforward.

Financially, the platform had to recover from its failed expansion strategy for a long time. After having regained a much more stable position by 2021, the problems started to mount up again from 2022 onwards. The bad risk management of Twino has affected investors in both Russia and Vietnam, putting investors funds at risk.

In this Twino review, you will get a bettter understanding about the current risk-reward profile of the platform and if the company is worth your time and money. 

All the information that are covered in this Twino review are based on my own personal research and experiences with the platform for the past years. Please make sure to do your own due diligence before investing on this or any other platform. More information can be found in the Disclaimer.

Further analyses of other platforms can be found on my P2P Platform Review page.

Summary

Before we get started, here is a quick summary with the most important information about Twino.

• Twino is a Latvian P2P platform on which investors can invest in consumer and real estate loans with an expected return of up to 12%. The operational launch of the platform took place in December 2016.
• The platform primarily serves as a source of financing for the lending business of FINNO AS (formerly SIA TWINO). This is a fintech company that has been established in the non-banking sector since 2009.
• The platform is operated by AS TWINO Investments, which is controlled by the financial supervisory authority in Latvia since September 2021 and is regulated in accordance with MiFID II. As a result, investors’ accounts with up to EUR 20,000 are protected against misappropriation or insolvency of the platform by the Investor Compensation Scheme.
• In recent years, Twino has revealed a number of weaknesses in their risk management approach. This lead to several million euros of investor funds from Russia and Vietnam being at risk.

About Twino

Twino is a Latvian P2P platform, launched in August 2015, on which investors have the opportunity to invest in consumer and property loans with an expected return of up to 12%.

The P2P platform is backed by the SIA TWINO parent company (reorganised as ‘FINNO AS’ in August 2021), founded in 2009, which is one of the largest non-bank lenders in continental Europe. In October 2019, the group reached the milestone of EUR 1 billion in funded loans. In May 2022, this funding threshold was also reached on the Twino P2P platform.

Due to its long history and the size of the company, Twino is one of the heavyweights in the European P2P lending environment. Since September 2021, the platform has also been controlled by the financial supervisory authority in Latvia and regulated in accordance with MiFID II.

Ownership and Management

Who are the main shareholders and management executives behind Twino? Let’s have a look!

Twino Ownership

Who owns Twino? The platform is currently operated by the Latvian company “AS TWINO Investments”. A look at the Latvian company register reveals that Armands Broks is the ultimate beneficiary shareholder of this company.

Armands is a Latvian businessman who founded the Twino parent company SIA FINNO (formerly SIA TWINO) back in 2009. In both cases, he still owns 100% of the shares in the companies.

Operationally, Armands was also CEO of the P2P platform for a decade before handing over this position to Anastasija Oleinika in July 2019. In the P2P lending environment, Armands is regarded as a well-connected businessman, entrepreneur and fintech enthusiast.

Twino Management

The Twino team is led by Latvian Helvijs Henšelis, who has been CEO of AS TWINO Investments since November 2022. He had already worked previously for the platform between January 2018 and April 2021 as Head of Group Tax Manager.

In June 2024, as part of my travels through the Baltic States, I had the opportunity to meet Helvijs in person. He has a very calm, sociable and slightly introverted character, which confirmed the impression from previous online meetings.

During my stay, we also recorded an interview in which we discussed regulation in Poland, the exit in Asia and the recoveries in Russia.

Business Model and Finances

Throughout the process of due diligence, investors should also have a look at the business model of a P2P platform as well as the overall financial situation. How does the company earn money? Does the platform operate profitably? And how well is the company positioned financially? In the following paragraphs of this Twino review, you can follow-up on those questions.

Monetization

How does Twino earn money? Twino earns most of its revenue from interest income. This refers to the difference (the spread) between the interest rate charged to borrowers and the interest rate offered to investors to finance the loan. In addition, Twino also earns money from various fees, commission income and operating income. This includes also credit default swaps.

Profitability

Is Twino profitable? The P2P platform, which is represented by AS TWINO Investments, generated a consolidated loss of EUR 2,700 in 2023. In the previous year, the platform generated a profit of EUR 178,488.

The annual report was prepared by BDO and carried out in accordance with IFRS standards. 

Sign Up and Bonus

To invest on Twino, investors must meet two requirements:

• A minimum age of 18 years
• Citizenship and residence in the European Economic Area.

If these requirements are met, registration on Twino can be completed in just a few steps.

• Registration: Enter name, email, date of birth, password, etc.
• Provide Financial Information: Planned investment amount, state citizenship, country of residence, tax residence, etc.
• Upload Documents: Copy of identity card, proof of residence

Also legal entities have the opportunity to sign-up on Twino, but only if the business is located in Latvia.

Twino Bonus

If you sign-up on Twino via this Link, you will receive a starting bonus of €20. To get the bonus, you must also invest at least €100 in the first 30 days after registration.

Investing on Twino

How does Twino work and what should investors know and consider when investing on the plaform? In the following sections of my Twino review you will find all the necessary information that you need.

Loan Offering

Twino has been a regulated P2P platform, controlled by the Latvian financial regulator FCMC, since 2022. Since this change happened, investors no longer invest in assignment contracts (claim rights), but in asset-backed-securities (“notes”).

These are financial instruments that are composed of a bundle of different loans. These can be short-term consumer loans to private individuals as well as real estate and business loans.

There is a fixed interest rate for the asset-backed-securities. This is amortised over the entire term when the underlying loans are repaid. Currently, there is a uniform interest rate of 12% on the platform.

For the borrower markets, investors can choose between Polish, Latvian and Vietnamese loans.

Costs and Fees

TWINO does not charge any fees. Neither for investing in securities nor for buying or selling on the secondary market. The withdrawal of funds is also free of charge.

Expected Returns

On Twino, interest rates for traditional consumer loans can vary greatly depending on the market phase and demand from investors. In general, investors can expect interest rates between 10% and 13%. In the case of property loans (Twino Ventures), the yield is often somewhat lower.

Overall, interest rates are at a level commensurate with the risk. Especially now that security has increased due to the regulation of the P2P lending platform.

My personal Twino return, since I started investing in December 2020, is 10.20%.

Twino Auto Invest

Investors have three options to invest in asset-backed securities on Twino:

• Manual selection via primary market
• Manual selection via secondary market
• Automated investment strategy

Twino Auto Invest is a functionality where certain investment criteria can be set-up in advance. Later, the returns are automatically reinvested in those preselected criteria. The following settings can be configured:

• Interest Rate: Up to 16
• Borrower Countries: Latvia, Poland, Vietnam
• Loan Term: Up to 12 months, up to 36 months or up to 60 months
• Reinvest Repayments

The minimum investment amount on Twino is €1.

Secondary Market

Since 2021, Twino is also offering a secondary market. Here is where investors can trade asset-backed securities and either buy or sell them prior maturity of the term. The securities can be bought at a premium (red symbol), at a discount (green symbol) or at par (grey symbol). Trading is free of charge for both sides.

The introduction of the secondary market was a necessary requirement for Twino to obtain the highest brokerage firm investment licence in Latvia.

Twino Forum

The P2P lending industry is a fast-moving environment. Hence, make sure to stay on top of all relevant information by subscribing to my channels on Telegram or WhatsApp. This way, you will always receive the latest information from the P2P industry, including platform news regarding Twino. 

Twino Taxes

In general, interest income earned through loan financing is considered investment income and thus must be declared as such in the tax declaration. In addition, since 2022, after obtaining the investment brokerage licence, Twino is legally obliged to withhold taxes on interest income collected through regulated financial instruments.

The applied tax rate depends on the country of tax residence and on the tax information and certificates submitted.

• 20% for private investors from Latvia
• 20% for private investors from outside the EU or EEA
• 5% for private investors resident in the EU or EEA (except Latvia)
• 0% for private investors from Lithuania (tax certificate required)
• 0% for legal entities

As a rule, the withholding taxes withheld can be deducted from the total amount when paying tax in the country of residence. This means that the effective tax rate is the same as for the previous investment in claim rights. The relevant double taxation agreement between Latvia and the country of residence is decisive for the creditability.

Twino Risks

Investors should look very carefully at the potential risk factors when evaluating a P2P platform. What is it that investors need to be aware of when it comes to Twino? Where are the underlying risks and how can they be assessed?

Platform Risk

The P2P platform, operated by AS TWINO Investments, has obtained an investment brokerage licence issued by the Latvian Central Bank in September 2021. As a result, the platform is subject to the requirements of the MiFID II Financial Markets Directive.

As a result, investors’ accounts are protected with up to EUR 20,000 by the investor compensation system in Latvia in the event of the platform’s insolvency or misappropriation of investor funds. This doesn’t include possible defaults by lenders though.

Regulation also requires Twino to maintain a segregated bank account for uninvested investor funds, to conduct a suitability and appropriateness assessment of investors in accordance with MiFID II and to publish regular audited financial statements.

Due to Twino’s many years of experience, the insolvency risk of the platform can be categorised as low.

Lender Risk

In addition to the platform risk, also the lender risk has to be assessed in particular as well. Twino has not always made the best performance when it comes to protecting investors funds. While the failed expansion in 2017 meant that nine out of eleven subsidiaries had to write off the financial year with heavy losses, it was at least possible to service the liabilities to investors in the form of a buyback guarantee from the group company.

The situation changed from 2022 onwards though: Since the war in Ukraine started, payment channels from Russia have been severely limited and restricted, meaning that Twino can only settle outstanding receivables from its investors in small instalments. As a result, a total of EUR 6.8 million in investor funds have not been accessible to investors. Two and a half years later, almost four million euros have still not been repaid.

Another example is the EUR 2.7 million in outstanding receivables from Vietnam, which are at risk at the time of the insolvency announcement (July 2024). According to Twino, EUR 1.4 million are to be repaid by January 2026. No comment has yet been made on the remaining EUR 1.3 million.

The situation is also a sensitive one because lenders from both Robocash and the Aventus Group have already pulled the trigger in Q2/2023 and exited their lending business in Vietnam. However, Twino did not take this step until April 2024. As it now turns out, this action came far too late, which once again casts a poor light on the platform’s risk management.

Twino in Crisis Situations

In the recent past, P2P platforms have had to overcome several crisis situations. These included the coronavirus pandemic and the war in Ukraine. How did Twino deal with these situations?

Corona Pandemic

Twino, like other P2P platforms, initially struggled with a strong outflow of liquidity in Q2/2020. SIA Twino’s annual report revealed that investors withdrew around 30% of the funds returned (EUR 4.2 million) during this period and did not reinvest them.

The liquidity risk would only have led to adjustments in Twino’s disbursement requirements if moratoria had been introduced in the individual borrower countries. However, this did not happen. Twino has therefore honoured the agreements it promised in advance and respected the contractual terms with investors.

War in Ukraine

The war in Ukraine had a strong impact on Twino, as historically a large proportion of the financed loan portfolio comes from Russia. Fortunately, this share had reduced significantly by the beginning of 2022.

At the beginning of the war in Ukraine, the outstanding loan portfolio in Russia totalled EUR 6.8 million. Due to the existing restrictions on payment transactions outside Russia, only the equivalent of EUR 100,000 can be repaid to Twino investors each month.

Although pending payments had to be installed, Twino has at least decided to continue to pay interest on the affected loans.

Advantages and Disadvantages

In this section, I have listed the biggest advantages and disadvantages of Twino.

Advantages

• Track Record: Twino has been operationally active in the P2P lending environment since 2015.
• Market Size: Twino has already financed more than EUR 1 billion in loans via the P2P platform.
• Regulation: The platform is regulated by the Latvian Financial Supervision Authority since September 2021.
• Annual Reports: The group company has published audited annual financial statements for many years.

Disadvantages

• Risk Management: Twino has already underestimated the country risk twice in the post-corona period.
• Management: Twino has had a lot of management volatility in recent years.
• Innovation: There has been a lot of stagnation and little development at Twino in recent years.

Twino Alternatives

Which Twino alternatives are there in the current market environment?

If you look at the main characteristics such as the origin, the history or the business model, then Viainvest would certainly be closest Twino alternative. The platform was launched in a similar period (2016), while the parent company also started lending in the non-banking sector back in 2009. The focus on consumer loans also unites both platforms, although there is currently no overlap in terms of borrower countries. Further information can be found in my Viainvest review.

You can find other Twino alternatives on the P2P Platform Comparison page.

Community Feedback

Twino is rated by many investors as an averagely popular P2P platform. At least if you take the results of my annual P2P community votings as a benchmark. In 2021, Twino scored 3.47 points, in 2022 it was 2.86 points and in 2023 it was 3.03 points.

In 2024, Twino was able to achieve a stable 3.21 points (147 ratings), which in the end was good enough for P10.

The most popular P2P platforms in 2024 have been Robocash, Profitus, Viainvest, PeerBerry and Esketit. The ratings are based on my P2P Community Voting 2024.

Summary Twino Review 2024

What is the final verdict of this Twino review?

Personally, I have been an active investor with Twino for many years and have therefore followed the developments of the P2P platform very closely. With loads of experiences since 2015 and a financed loan volume of more than EUR 1 billion (May 2022), Twino is one of the absolute heavyweights in the European P2P lending environment.

During the numerous crises in recent years, Twino has largely been able to fulfil the expectations of its investors and deliver solid double-digit returns.

However, the risk management approach of the Twino platform should be strongly questioned at the current stage. Twino has clearly misjudged the situation in both Russia and Vietnam and thus unnecessarily put the funds of its investors at risk. This leads to investors either not being able to access their funds for a longer period of time (Russia) or even write off a part of their investment as a loss (Vietnam).

Since the platform is growing its presence with real estate projects, while leaving the traditional consumer lending business on the side, Twino seemingly decided on their own to transform its investment profile to more conservative assets. 

At this point in time, investors are likely to find better options in the current P2P environment. 

FAQ Twino Review