FINZY p2p portfolio has been different from I2IFunding (Code “discount50@i2i” ) and Rupee Circle(discount code PIND145) in terms of creditworthiness of the borrowers. While RupeeCircle had mostly high yield lower creditworthy loans FINZY has a good chunk of prime loans in its offering
In goodtimes and economic boom phases low credit investment provides higher reward as defaults are low while in tough conditions platform with high quality borrower do much better.
I had started investment on FINZY in 2019 after receiving favourable reviews from many of the blog readers. The Fees is also quite low compared to other platforms which is a positive.
To test the platform I started with INR 50 K the minimum requirement for Finzy.
Finzy has a model were you can create a portfolio of 5 loans, so I created 10 portfolio of 5 loans with INR 1000 in each loan. Idea was to be as granular as possible.
My review of the platform
Type of Borrowers on Finzy P2P
Finzy has its own proprietary credit model.Based on multiple inputs, finzy Rating use the proprietary credit algorithm. Linked to each level of rating is a rate of interest. finzy Rating ranges from A+1 to C6, with A+1 being most credit worthy and C6 being riskiest credit rating.
I had invested in A3- B6 category while totally avoiding C category. Average yield was close to 18%
Finzy P2P :Performance before Covid
The average yield of my investment were around 17.5% . After factoring in the fees and NPA ,my portfolio was giving me close to 17% till Feb 2020.
The NPA was at 0% till February.
Covid 19 Impact
My Portfolio allocation before Covid 19
- A1 to A6 – 30%
- B1 to B6 – 70%
- Salaried Borrower 75%
- Business Owner -25%
- Total Yield -17.5%
- NPA – 0%
During the Moratorium period there was significant impact on cashflow . Almost 35% of my book was in moratorium.
As of now there are 4 loans with more than 90 days of delay which is just over 1%. A few loans would be still in moratorium .Even if I consider a 5% NPA I will be earning 13% net yield.
Going Forward Finzy P2P
Finzy has done much better than other P2P platform during the covid phase. People can target a 50% allocation to A1-A1 Category and the rest in B1-B6 Category. Target yield of 15-16% is healthy with expected NPA of 1-2%
Considering the good performance of Finzy during Covid and ensuing lockdown it can be a good addition to the alternate investment portfolio considering Equity market are overbought while conventional debt is giving sub 6% yield.