MoneyZen in Rahapuu portfolio

logofacebookLet’s get naked with my MoneyZen investments (and thoughts)

MoneyZen is an Estonian peer-to-peer lending company that targets to be the best marketplace lender in terms of avoiding defaults. Their vision is to be the first option financial portal that new generation borrowers and lenders will go to in the Nordic region. I’m somewhat confused about their vision, because currently they are operating in Estonia (borrower perspective) and Estonia is not part of the Nordic countries, yet. Though I kind of like the imaginary flag we could have as a Nordic country!

Source: Estonian World

Nevertheless, after destructive World War 2, Japanese companies had great visions how to be successful. Back then resources were scarce and companies just had to take the best out of it. Maybe you’ve heard before such ‘small’ companies like Toyota (famous for it’s lean management) and Sony (did the allmighty portable Walkman). It all started of world changing visions that came true (unfortunately Toyota has lately been struggling with callbacks and Sony is not at its height of fame anymore). Maybe MoneyZen will eventually be the number 1 marketplace lender in the Nordic region? Who knows!

I started investing with MoneyZen in august 2014 (post in estonian). Back then I was cautious because it was a new platform (and a lot of platforms came up in 2013-2014) and I wasn’t sure about MoneyZen ability to issue loans to good borrowers. After meeting back-then-CEO Daniel Lumi (now replaced by Jana Loemaa, but Daniel is still there as an advisor and owner) I gained a lot of confidence that they have the team to be successful in long haul.

How has my portfolio performed?


Minimum bid size is 10 euro. While my portfolio is still rather small (635€ my money has turned within 1,5 years to portfolio size of 739€), it takes sometimes weeks to collect the very needed 10 euros for reinvesting.

Actually I’m pleased with the returns so far. Compared to banks MoneyZen has helped me to grow in pace above 16% per annum. But hey, these are good times, right? Competition in lending sector is getting more fierce day by day.

From my perspective there are several issues that makes the sky cloudy above MoneyZen.

  • lack of true transparency
    • they write once a month blog post how things have gone for the previous month, but not covering current and future developements
    • to invest in MoneyZen investor needs to set the amount per contract, adjust interest rate and choose credit rating. That’s it. But how can I know that they truly are issuing any loans?Trustbuddy, ehh? What measures are taken in case of bankruptcy?
    • Some reports are still missing.
  • regulatory issues
    • KAVS or CCIA (Creditors and Credit Intermediaries Act) will come into force in 21.03.2016. It takes about 6-8 months to get the licence and MoneyZen applied for the licence in 31.12.2015. Without licence they can’t issue any new loans meanwhile. Does it mean they are on hiatus between March to August?
  • They are missing secondary market. No fast exit possible!

Though, there are also some good things:

  • My portfolio is still above 12% return mark
  • They take things more slowly (Old Estonian saying goes like this (actually I think we’ve stolen borrowed this one from Russia): Think before, don’t jump!)
  • All pages (that I use) in the allmighty WWW are covered with MoneyZen ads – marketing is in full power.
  • They are missing secondary market meaning I can’t exit right away. I keep telling myself to hold my head calm and don’t do stupid things! As you can see this point is relative. There are occasions where secondary market is good to have and also the other way.

Damn, I’m not too good in KISS (Keep It Short Stupid). So getting back to analysing my portfolio.

  • 102 contracts
    • 69 Zen (OK)
    • 15 repaid early
    • 12 Zen-1 (1 payment missing)
    • 3 Legal Action
    • 2 Debt collection
    • 1 paid on time

15 early repaid contracts brought me in 14,27 euro interest and 0,14 euro overdues. At the moment I don’t exactly know the difference of Legal Action and Debt collection, but those 5 contracts owe me 43,79 euro to reach breakeven. As you can see the money flows in from loans that are OK. Still, it is also too early to make any statements about debt collection. Even if all 5 contracts will be recovered, this doesn’t give us any meaningful statistics about recovery. Sample size should be much bigger for that.

Basically that’s it. In MoneyZen there are not that much buttons left for fine tuning nor tables to get any significant information from. I would say it’s a platform for really passive investor who cares to spend less than 15 minutes per year to keep the portfolio running. Still,  if you intend to invest a lot of money with MoneyZen, hold your horses! It is not possible due to small number of issued loans per month (usually around 30 contracts per month). But Nordic market is big! 🙂

If you find any irritating mistakes in my use of language then feel free to point it out in comment section below! My resolution for 2016 is to gain fluency in English, both speaking and writing, so I better start going with my goals fast! Days are long, but years are short!

Any questions? Feel free to comment!

2 kommentaari “MoneyZen in Rahapuu portfolio

  1. Huko

    Ddifference of Legal Action and Debt collection:

    I spoke with Daniel yesterday and asked about those differences. If I remember correctly, Legal Action means that case is under work for sending it to court. Debt Collection means that court has made decision and case is given to bailiff for collection.


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