NEO Finance Review

February 14th, 2021
7 minutes read
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Stock-listed P2P lending company with superb transparency and a high degree of investor flexibility


Launch Date2015
Total Investment Volume€65m+
Average annual interest12%
Minimum Investment€10
Investment FeesProvision Fund (0.23-27.54%)
Who’s eligible to investEU citizens
Investment TypeConsumer loans
Secondary MarketYes (fee 1%)
Auto Invest FunctionYes
Investor ProtectionProvision Fund
Website LanguageEnglish, Dutch



  • Regulated and highly transparent provider
  • High-standard due diligence and debt collection processes
  • Investment flexibility


  • Limited diversification options
  • Lack of a universal buyback guarantee
  • Fees

Pros Explained

  • NEO Finance holds the Lithuanian unlimited e-money institution licence (EMI), which ensures financial supervision and investor protection. The company is also listed on the Nasdaq Baltic stock exchange. Being a publicly-traded and highly regulated company, NEO Finance is probably one of the most transparent European P2P lending platforms. It discloses performance statistics and financial results, and even performs “stress-tests” to estimate the impact of potential economic downturns on its profitability and cash flow.
  • NEO Finance evaluates borrower creditworthiness based on artificial intelligence (AI) and machine learning technology. Creditor reliability is then expressed in a transparent rating system, from A+ (most reliable) to E- (least reliable). NEO Finance only accepts loans with C rating or better. Additionally, in the case of borrower default, the platform relies on an external loan recovery company to collect overdue debts. So far, 65% of debts have been collected within two years.
  • The platform offers a high degree of investment flexibility, in the sense that you can choose between loans from different risk ratings and decide on the level of investment protection. This way, you can build a portfolio ranging from below 5% to over 20% ROI.

Cons Explained

  • Except for the wide risk/yield spectrum, little diversification is possible. Only consumer loans from Lithuanian borrowers are available, so if you’re looking to invest in other markets and/or loan types, you need to look elsewhere.
  • NEO Finance gives you three options when choosing your investment protection level. The safest choice is to use the Provision Fund that works similar to the buyback guarantees you might know from other P2P lending platforms. Here, the platform will cover the defaulted loan amount plus interest. Another option is to sell back the loan to the platform after it has defaulted. This can be done for 50 to 80% of the loan value depending on the borrower’s credit rating. Finally, you can wait for the debt to be recovered. Each option comes at a (significant) cost: the provision fund fee can reach close to 30% of the invested amount, depending on the risk rating; reselling the loan costs you up to half of its value; debt collection might take years.
  • Not only can the provision fund fee be painfully high, but it’s also deduced immediately after you enter the loan agreement. This means that you start with a negative return, so to speak, and need to build up interest to start seeing positive returns. Besides, NEO Finance charges a 1% fee for secondary market transactions, which you are likely to pay at some point as loan terms tend to be quite long.
Graph of the monthly development of the NEO Finance provision fund

Who is behind NEO Finance?

The NEO Finance team is a good blend of business, finance and technology professionals. Most of them are Lithuanians, but many have a varied international record in FinTech businesses, consultancies and banks.

NEO Finance is a successful fundraiser. In 2018, the team managed to crowdfund over €200,000 in equity via Seedrs. In 2019, they carried out an IPO, attracting over €0.6 million. ERA Capital has become the major shareholder, owning over two-thirds of NEO Finance’s shares. Launched in 2007, ERA Capital is a private equity firm investing in small and medium businesses in Europe, mostly specialising in financial services, IT services, entertainment and real estate.

In 2019, NEO Finance also opened a branch in the Netherlands, fully owned by the Lithuanian mother company. Additionally, the company operates three separate brands:

  • NEO Finance services retail investors in the EU;
  • Paskolų klubas targets mostly Lithuanian borrowers (but also investors) – this is where NEO Finance loans come from;
  • Neopay is a separate project, providing an online real-time payment collection tool for e-commerce businesses.

What does NEO Finance offer?

Unlike popular platforms such as Mintos or PeerBerry, NEO Finance is not only a marketplace but a loan originator itself. This means that the loans listed on the platform have been issued directly to NEO Finance clients. It can be a good thing – fewer intermediaries translate to higher transparency, more information about the borrowers and, potentially, higher returns as there are simply fewer parties that want a slice of the cake. It can have a downside though – exposure to a single loan originator always carries more risk than a healthy diversification throughout many providers.

On NEO Finance, you can invest in a range of consumer loans, including home repair loans, car loans, wedding loans, credit card refinancing and other. They are of a relatively high value (close to €3,000 on average) and a long maturity (an average of 52 months). There is a good balance between A, B and C rated loans, with fewer “extreme” options (A+ and C-).

How much can you earn?

The return will hugely depend on your investment strategy. The average interest rate is around 16.5%, ranging from just above 7% on A+ loans to almost 23% on C- loans. Historically, the rates were even higher, reaching 25% on C loans. 

Anyway, you will, almost certainly, make less than that. Counting in the provision fund fees or default costs, the average annual ROI stands at roughly 12%, just like most P2P lending platforms. Peaking into NEO Finance’s statistics again, we can see that indeed most investors (40%) make between 10 and 15%. Although there is a group of high-achievers (16% of all investors) with returns higher than 15%, a big group of investors also earn less than 10% (37%). Some have even made a negative return (roughly 5% of all investors).

As with many platforms, you can make some extra money by taking part in their bonus program. Here, NEO Finance offers a 1% cashback to new investors on investments made within the first three months after registration.

Graph of the historical returns at NEO Finance

Who is NEO Finance best for?

NEO Finance is probably best suited for active and experienced investors. To make the most of what the platform offers, you need to be smart in picking the investments and using the provision fund. With enough skills and luck, you can make 15% or more (but remember, without them, you can lose your money).

However, NEO Finance might also be a good inclusion in a broader investment portfolio, especially as its more conservative part – select the auto-invest function with provision fund protection, sit back and wait for relatively low but (relatively) safe returns.

How to invest on NEO Finance?

You can start investing as soon as you register, verify your identity and add funds to your NEO Finance electronic money account. You can invest manually, having access to relatively rich information on the borrower’s income, obligations, credit worthiness rating, the position held at the workplace, previous debts, etc. Or you can set the parameters of the auto-invest function (such as the maximum investment amount into the single loan, maturity, risk rating) and allow the NEO Finance system to automatically provide the best investment possibilities for you.


NEO Finance is one of the few fully regulated and stock-listed P2P lending platforms in Europe. Extraordinary levels of transparency, useful statistics and abundance of information on borrowers are all unique, strong points compared to most competitors, especially for savvy, active investors. But the extensive freedom of choice offered by NEO Finance makes it well-suited for almost any portfolio. You can play it safe or go all in – it’s all up to you.

Stay updated with information and monthly updated statistics on our page about NEO Finance.


At P2PMarketData we are dedicated to providing unbiased reviews of peer-to-peer lending, real estate crowdfunding and crypto lending platforms. Among other, in our mission to bring more transparency to the market we closely monitor and track over 70 platforms funding volumes.

When reviewing an alternative investment platform, we consider a variety of factors such as:

  • Number of investors
  • Minimum investment requirement
  • Historical annual returns
  • Diversification opportunities
  • Reinvestment opportunities
  • Educational and informational offerings
  • Platform fees
  • Total capital invested
  • Features (such as secondary market and automatic investing)
  • General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
  • Management team

We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).