Last month, our German investors Martin and Ulrike visited the Bondora HQ in Tallinn, Estonia. Martin has been investing with Bondora for over 5 years and is an avid user of the API, find out more below.

Martin Resch at Bondora

1. Tell us a bit about yourself.

52 years old, living in the south of Germany in a small town. With two children studying and the third at school I try to make some saving for investments anyway. I like reading, watching movies with my family, cooking and sitting on my pc, working, coding or just reading the latest news.

In our holidays we are mostly traveling around Europe. Twice we visited the USA (last year we saw the solar eclipse there) and I’ve been in Middle and South America. There are a lot of places left I want to see the next years.

2. What were your first impressions after having a tour of the office? Does it look like you expected?

It was a great deal for us to visit Bondora and Tallinn too, to see where our money is and to meet the people there. So thank you again for the invitation.

I saw a video on YouTube of your office before so I wasn’t so surprised. But there have been more people than I expected. There was a cosy but busy atmosphere but nobody played table-soccer the three hours we were in ;)

It was very interesting to chat with the experts and yes, rather convincing. You never know how an IT-department is doing is job, but the guy exactly knew what I was taking about. That was impressive. Learning more about how the data is collected and how the models are built showed me that Bondora is on its right way and my money is rather safe there. There will be always a risk if you want to earn 2 digit returns.

“Learning more about how the data is collected and how the models are built showed me that Bondora is on its right way and my money is rather safe there.”

3. Why did you start investing with Bondora?

I started at the very beginning of 2012 and I heard about Bondora (Isepankur) from Claus Lehman, the great German p2p-guru. Having invested in some German platforms before I was not so glad with these anymore. Bondora promised great returns and seems to be extremely transparent. But it was very exotic to invest in Estonia back in the day. My friends were astonished when I told them I invest money at a little Baltic startup using the internet – Germany is still not as developed as Estonia is.

There have many changes happened since 2012 and not all have been an improvement for the lenders. But there are three parties – lenders, borrowers and Bondora itself. So demanding i.e. 28% from everyone could not be the right way long-term. Bondora is my greatest investment in p2p but I invest in 5 or 6 other platforms as well. German platforms perform rather poor and I would not recommend them anymore.

“For newbies portfolio manager will be great. And – don’t try to micromanage your loans! After some time you will have hundreds or thousands of them. Of course, there will be defaults. But that is part of the plan.”

4. What investment method do you use? Can you tell us what your net return is to date?

I use API from the launch. I mostly invest on second market but it is easy to use on primary market too. I learned a lot about programming, javascript but finally it works exactly how I wanted.

It is still hard to say what my net return is. Bondora shows me 20% and that is not a bad guess for the moment. It went down about 5% the last year, because a lot of my loans are defaulted. But I don’t worry – there are several recoveries now month by month. On long term – another 5 years – I’m expect 12-15% before taxes. Even 10% will be seasonable.

For newbies portfolio manager will be great. And – don’t try to micromanage your loans! After some time you will have hundreds or thousands of them. Of course, there will be defaults. But that is part of the plan. You have to know exactly what you are doing before entering the 2nd market as a seller. There are sharks there that snap at once the best parts of your loans in sell and your performance will be much worse as if you wait and see.

5. What changes do you expect in the Peer to Peer lending market in the next 5 – 10 years?

I hope it will grow a lot. There are many competitors on the market now and we will see much more the next years. Not all of them will survive. We will see some fraudulence so is good to know which company has years of experience and a working businesses model. I guess regular banks will enter this business too, so just did ING DiBa buying Lendico in Germany.

In general interest will go down to let’s say 6-8% over libor what will be fine if defaults will go down as well.

Martin Resch

6. Do you think Germans invest differently to investors from other European countries?

German money is extremely shy and there are to less investors here taking a risk. I guess 20 million or more could be shareholders or p2p investors but only 20% do. Literately billions of euros are “invested” in call money bringing 0.0-something percent interests.

Lending and investing is not a subject at school nor in chats with friends. So I guess, yes we are different. The new generation seems to be somewhat better informed, there are a lot of blogs and websites about passive income now but nothing will change before long.

Life insurance yes, lending money – seems to be weird. On the other hand, Germans don’t have many credits beside mortgages. Credits are evil – so lending is bad too. So it will be a hard job to convince the ordinary German to invest in P2P.