“Easy invest” – new upcoming product on Debitum platform

A new diversified product in the crowdfunding market

Increasingly, investors are boldly investing through crowdfunding platforms, and this is not surprising: they offer a middle ground between high-risk instruments (such as equity or commodity markets) and highly cautious products such as government bonds with only symbolic returns. In addition, such platforms have a very wide choice of what to invest in – you can choose a product according to the period in which you want to invest, the potential return and risk. The issues of regulating the activities of the platforms are also moving in the right direction – crowdfunding platforms will be licensed in the near future.

Representatives of the alternative investment platform Debitum say unequivocally that this will be a positive message for investors who already enjoy alternative investment platforms, and Debitum is preparing for this with full responsibility. One of the steps the platform is taking while awaiting a licence is the launch of a new product that is even safer and will give investors more opportunities to spread risk with much less time spent than has been the case so far.

Diversified product

The new Debitum product “Easy Invest” has been designed to make investing larger amounts simpler without sacrificing portfolio quality or potential investment returns. This product is made up of different loans, so it differs from those already available on the market because by investing in one product, the investment is automatically split between different loans. By choosing “Easy Invest”, you will actually choose an already diversified loan portfolio, which will be formed and responsibly evaluated by the specialists of our platform.

The product is designed taking into account the current behaviour of investors on the platform.

Analysing consumer behaviour, the Debitum specialists noticed that the average deposit chosen by most investors to invest is about 1,000 EUR. This amount is usually split between different loans of about 100 EUR each. Thus, to invest about 1,000 EUR, the investor explores several dozen loans and selects about ten of them.

It takes time to select each of these investments and, later, all of the selected loans need to be tracked again. Thus, investing a relatively small amount takes a disproportionate amount of time. In the case of the “Easy Invest” product, the investor will only need to choose one investment product instead of ten, and the product chosen will already be diversified according to professional criteria. As before, Debitum will apply the strictest risk assessment criteria when selecting the loans to be included in “Easy Invest’s” offer.

How to choose

Upon launching the “Easy Invest” product, the platform initially offers a choice of around 20 investment options or, in other words, loan portfolios. Later, the choice will be expanded. Individual loans are grouped into these offered portfolios by maturity from 3 to 24 months and other criteria such as the expected return on investment, risk profile and who the intermediary company issuing the loan (loan originator) is.

For example, when choosing one or another ”Easy Invest” investment offer, all you need to do is look at its description, which details how many different loans are covered by a particular investment portfolio, what industry dominates, who the originator of the loan is and what the expected return and risk will be.

These criteria are also broadly in line with those under which the investor chooses a simple, non-diversified loan. However, in the case of “Easy Invest”, it is possible to safely invest larger amounts at once by a single choice, as the risk of the product would already be spread. The investor will no longer need to diversify investments between different loans, only to spread the risk between different loan originators. In addition, unlike investing in simple loans, the loan originators will also bear the risk of the loans that make up the product.

The loan originator, i.e. a company that provides credit to a business, will have to ensure that the loan is repaid, even if the final borrower is unable to do so.

Conditions and returns

How do investment conditions change when a company introduces a new product? Representatives of the platform assure that the conditions remain the same: the minimum amount of a separate investment will stay 50 EUR. However, if you choose ”Easy Invest”, you no longer need to divide your investments into small parts. You could invest a larger amount in one “Easy Invest” product, for example, 500–1,000 EUR or more.

The return on investment is also projected to be similar to investing in individual loans of similar risk on the Debitum platform. The return offered by Debitum has been a bit more moderate than usual in this market so far. This is precisely because we have always applied the highest quality criteria to loans – that’s how we keep Debitum loans default rate at 0%. In the case of “Easy Invest”, the quality of the investment will increase further due to the diversification element, and the return is projected to be similar to the previously existing one.

Disclaimer: Investments in financial products are subject to market risk and any investment should only be done with risk capital. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.