TWINO is a marketplace for peer-to-peer lending that connects investors with borrowers of loan originators in the areas unsecured personal loans, business loans, real estate loans and invoice financing in Continental Europe. TWINO is providing investors with more or less automatic solution for lending into unsecured loans and loans secured with either BuyBack Guarantee or Payment Guarantee, thus allowing investors to better protect their investment.
Last updated: May 8. 2020
Office location in Riga
Table of Contents
TWINO Pros & Cons
Characteristics of Loans
8% – 13%
6 – 60 months
Buy-back Guarantee ✔
Minimum Investment ⇙
Loans on TWINO
On TWINO, investors are presented with a comprehensive list of available loans on the platform. In order to simplify the great variety of loan options, investors can use the filtering options at the top of the page to filter available loans by the following characteristics:
Minimum and maximum interest rates (in percentage)
Minimum and maximum terms (defined by months)
Countries (only eastern European countries such as Georgia, Latvia, Poland, Russia, and Kazakhstan are available)
Loan ratings (loans with BuyBack or Payment Guarantee)
Loan types (consumer loan, business loan or invoice financing)
Loan Statuses (Current, Extended or Delayed)
- Currency Exposure (Yes or No to be exposed to foreign currency fluctuations)
When choosing a specific loan on the list, investors get access to useable information such as loan type and loan amount as well as the date of issue and loan rating (whether the loan comes with a guarantee, such as BuyBack or Payment Guarantee, or not). Investors are also informed about how much of the loan share is available for investment, the specific interest rate for the investment, and the loan maturity presented in months (also often referred to as the “term” or “amortization”), among other things. The example displayed below is a consumer loan with Payment Guarantee.
Buyback Guarantee & Payment Guarantee on TWINO
As previously mentioned, TWINO offers two types of investment protection:
- BuyBack Guarantee
BuyBack Guarantee is more common and therefore a more well-known investor protection scheme than Payment Guarantee. BuyBack Guarantee protects investors in case a borrower is late with the repayment of a loan. On TWINO, a borrower can extend the duration of a loan with 10 days up to six times. The request for a 7th extension triggers the BuyBack Guarantee, and TWINO will then make sure to repurchase the loan from the respective investor in full amount, including the accumulated interest rates.
With the Payment Guarantee, to quickly compare, TWINO will compensate investor both the invested amount and the earned interests per loan schedule if the borrower is late with the monthly repayment between 1 and 30 days.
What Happens if TWINO Closes Operations or Becomes Insolvent?
There are two different types of investment structures in P2P investing:
- The direct structure means you are buying a claim against the borrower directly.
- The indirect structure means you obtain exposure to a loan by investing in a loan issued by a platform company to the loan originator.
As TWINO is guaranteeing for most of the loans on the platform and in the unlikely case of insolvency, the investor have a right to get the current balance on the Investor’s Profile paid out. But at the same time, the platform is most likely insolvent because of bad loans or worse and the guarantor of your Buyback Guarantee not there to honor it anymore. This means that it operates with a sort of indirect investment structure, where you in the worst case have a claim against the loan originator and platform (TWINO) that will determine how many % of your investments you get back from the assets in case of insolvency. On the opposite the best case is that the platform knows how to run a stable lending company and find good borrowers that in the end profits the lenders at a fair rate.
Read more in the User Agreement part 15. “Actions in case of insolvency of Twino”.
Assets as Collateral
TWINO has grown very popular recently and is now one of the most successful P2P marketplaces in Continental Europe, generating approximately 1 million euros in loans every single day. The different loan types that TWINO offers can be categorized in three:
- Unsecured loans
- Business loans
- Invoice financing
What these three loan types have in common is that they are not backed by an asset as collateral – the only protection mechanism related to these loans is the fact that they come with a personal guarantee. Unsecured consumer loans are not backed with a collateral by the owner, nor are business loans issued to small and medium enterprises (SME) or invoice financing. However, business loans and invoice financing are backed by a personal guarantee from the borrower. Recently TWINO launched real estate backed loans.
Although TWINO is one of the biggest players in Continental Europe and has experienced great success within the last 10 years, the number of available loans on the platform is relatively low compared to TWINO’s competitors, for instance Mintos and Peerberry. Nevertheless, TWINO offers detailed filtering options where investors can choose to see loans that fit within a specific range of interest rate or maturity time, loans that come with either BuyBack or Payment Guarantee and/or specific loan types. As of the screenshot below, where no filters have been chosen, TWINO found no more than 736 loan that match the specific criteria (which are not many, but enough to start investing right away). In comparison, Mintos offers more than 200.000 loans.
Automatic Investing or Auto Invest, as this platform also calls it, is a faster way of investing money than Manual Investing (described above). TWINO has even developed an Auto Invest tool that helps investors automatically invest their money based on their selected investment criteria. In the presented example, the investment criteria are these:
- Maximum investment in total is 1000 €
- Maximum investment per loan is 75 €
- Interest rate ranges from 0 to 40 %
- Term ranges from 1 month to 60 months
- All countries are of interest
- Selected loan type is business loans only
- Loan rating includes both BuyBack and Payment Guarantee (PG)
- Criteria for status is “Current”
The most obvious advantage of choosing Automatic Investing is that you save a lot of time on manually investing your money and/or earned profits, it goes back into the market right away.
Secondary Market - How to sell a loan on TWINO (Sell-Back Option)
The primary market is where new investments take place, and if an investor has made an investment that he/she wants to sell and hence let other investors buy, this will take place on the secondary market. Selling a loan on the secondary market is a way for the investor to exit an investment.
On TWINO, there is no section marked as “Secondary Market”, and investors cannot see whether a loan is sold by another user or by a loan originator. This means that when investors decide to sell an investment in a loan, what they are actually doing is selling the loan back to the market. The only loans that cannot be sold back to the market are loans with the status “Default”.
Nice to Know for Investors
Registration Process on TWINO
Registering as an investor on TWINO is fairly simple. First of all, you ought to complete the investor’s registration form which requires you to fill out the most basic information about yourself, e.g. whether you are registering as a private person or a company, your name, your email, etc. Hereafter, you will be asked to provide financial information such as your annual income, how much money you are planning on investing, and whether the money comes from personal savings, capital income or other.
Deposit & Withdrawal Process
When you have successfully filled out TWINO’s registration form, you can start depositing the amount of money you have decided to invest to your investor’s account. Keep in mind that the currency available is either Euros (EUR) or British Pounds (GBP). If your first deposit was realized in GBP, all transfers under your account will be in GBP. If your first deposit was not made in GBP, EUR will be used for all remaining operations under your account. Also keep in mind that the first transaction has to be done from your personal bank account – hereafter, investors can choose to use other services such as TransferWise or Revolut.
The process of withdrawing funds is less complicated than depositing funds; click on “Dashboard” in the top menu, then “Withdraw funds”. Under this tab, you can apply for a payout from your TWINO account to your personal bank account by specifying the amount of money you would like to withdraw.
TWINO offers an intuitive dashboard that makes it very easy for investors to manage their funds, investments, payouts, etc. Investors get a quick access to their portfolio and account balance – all from the same place. Additionally, it has been made easy for investors to make new investment, withdrawals, and deposits with only a few clicks.
Furthermore, this platform has developed a nicely organized reporting system for investment activities under the tab “Account Statement” (navigate to “My investments” in the top menu). In this section, investors are presented to the most necessary information about their investments such as incoming and outgoing transactions as well as the closing balance for the specific day, month or year. Investors even have the possibility of filtering by transactions types (e.g. repayment, buying/selling shares, funding, write off, cashback, etc.) and account types (principal, interest or sale)
The profit acquired through TWINO must be taxed by investors themselves per the income tax laws applicable in the respective country where the investor is a tax resident.
TWINO FAQ: “Do I have to pay taxes from the acquired profit?”
- United Kingdom: +44 2037 698
- Latvia: +371 67 799 997
- Estonia: +372 6980 163
- Germany: +49 0800 181 3467
- Workdays: 09.00-18.00 (EET)
- Weekends: Closed
Who can invest on TWINO?
In order to invest on TWINO an individual investor must be at least 18 years old and a citizen of an European Economic Area country. In addition, investors can choose to invest via a legal entity.
TWINO FAQ: “Who can invest?”
Is TWINO Regulated?
The TWINO P2P lending platform has applied for an Investment Broker License in Latvia and is said to expect approval by the end of 2020. As a platform with this type of license TWINO will be under the supervision of the Latvian Financial and Capital Market Commission (FCMC) which will for example mean that investors can become eligible for the FCMC investor protection mechanism of up to €20,000.
|Total investments:||+€667 million|
|Total investor earnings:||+€10.5 million|
|Number of investors:||+20 thousand|
|Average investments in 1-3 month loans:||90%|
|Average investments in 4-11 month loans:||1%|
|Average investments in +12 month loans:||9%|
|Average interest rate on 1-3 month loans:||11.5%|
|Average interest rate on 4-11 month loans:||9.5%|
|Average interest rate on +12 month loans:||10%|
|Outstanding principal defaulted:||10.5%|
|Outstanding principal delayed:||26.5%|
|Outstanding principal current:||63%|
|Latest financial report:||2018(PDF)|
Is TWINO Safe? Is it Legit?
TWINO as with other loan originator lending platforms do not come without risk. Most of the loans are unsecured and not backed by any collateral – though their new addition to the platform “Twino Ventures” are backed by real estate. The platform is making the cashflow more smooth by offering buyback guarantees and so called payment guarantee but as all knows a guarantee is only as solid as the company that is backing it. The financials of TWINO SIA company had it’s first positive annual report result in 2018 of roughly €8.7 million that contributes to the safety of the guarantees though still it is hard to evaluate the individual loans and a majority of the portfolio is not current (37%) so investing on TWINO is risky but they also offer high interest rates with buyback guarantees.
Please note that this overview may contain affiliate links. It means that a commission is earned if you decide to invest after using the link – of course without additional costs to you. The information on this site does not constitute investment advice and is solely to give you a simple and easy overview of the platform. Always conduct your due diligence and consult your financial advisor before making any investment decisions.
* Historical return is not a guarantee of future return. The number is directly from TWINO website twino.eu statistic page with 1-3 month loans average interest rate on initial duration for April 2020 (87% of loans have an initial loan duration of 1-3 months).