DoZarplati (which literally translates as “Until Paycheck”) is a loan originator from Russia. Starting 5/18 on Mintos, DoZarplati issued total of $6.1M EUR in loans, out of which $1.7M EUR in December 2018. Almost all of the issued loans are short-term, but DoZarplati also offers personal loans and business loans. Loans are offered both in EUR and RUB, with EUR loans approximately double the overall size compared to RUB.
All of the issued loans in 2018 had the following structure (note that RUB is converted to EUR to have the same base):
You can also see the average interest rate which is not that high for short-term loans. It is interesting to see that the interest rate is so much higher for loans issued in RUB where the interest rate is ~ 17%.
Should you invest in RUB?
If you are not afraid of FX risks, this might be an interesting option. Outside of the FX risk it should not matter whether you invest in EUR/RUB and the potential revenue you can get is much higher. If you ask why is that the EUR loans have so much lower interest rate, the biggest reason is very likely the FX risk. DoZarplati provides the loans to customers in RUB. When you get financed in EUR, you need to make sure that the sudden FX rate changes will not destroy your business. You can do this either by assuming worse FX rate and creating additional arbitrary buffer in the APR charged to borrower vs interest paid to investor, or using hedging, which will cost you some money, or combining both together.
Also note, that DoZarplati actually offers investments on their website claiming interest rate up to 24.5%. If you are either from Russia or feel more adventurous today it is another investing path you can discover. If you think about the interest rate, it makes sense it is so much higher with direct investment. Without a doubt, Mintos needs to take some provision on the loans as it’s sole business is being a middle man between loan originators and investors.
Invest in EUR
I am currently investing in short-term EUR loans from DoZarplati as a pilot with ~15K EUR. You can see the results so far on my portfolio report page.
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