Ivaylo Ivanov, Operations Director at iuvo, sat with ‘Manager’ magazine and talked ‘smart money,’ iuvo and the future of peer-to-peer investments.
Mr. Ivanov, what kind of financial technology stands behind iuvo?
Iuvo is a platform for online shared investments (peer-to-peer) that allows users to buy loan parts lent by registered non-banking financial institutions (loan originators). We give our investors the opportunity to realize a high return, whereas our originators get the chance to use the benefits of the P2P model to further develop their business.
After a long cultivation of the business model and technical development of iuvo, we launched the project in July 2016. Just four months after its official start we managed to attract over 650 users from two continents and more than 600 thousand EUR investments.
P2P is part of the global trend of sharing economy, which created the online platform business model of companies like Kickstarter, Uber, and Airbnb. They connect people who have resources that are in demand (money, automobiles, homes, etc.) with people who need it.
The global economy that is in a cycle of excessive liquidity and low-interest rates on bank deposits contributed to forcing ‘smart money’ to look for alternative forms of investment that bring high return – iuvo offers exactly this.
What educational background and preliminary preparation are necessary to use the platform?
Iuvo works in an extremely simplified way. Users buy parts of loans and get returns corresponding with the investment size and interest rate of the relevant loan. Payments are being made according to the loan’s repayment schedule. If the loan is delayed over 60 days, the originator will buy back the investments and will refund 100% of the sum to the user. All loan details are indicated on the platform. Iuvo is a tool for contemporary people who want to improve their financial culture and let their money work for them.
What kind of return can be earned and what does the net profit depend on?
It depends on the individual portfolio of bought loans at iuvo. Currently, the annual interest on loans with different class grades on the market is between 5 and 12%, whereas a balanced portfolio may generate our users an annual return of 7-10%. The first investment principle and our primary advice for our users is to allocate their funds between a maximum number of various positions, to diversify their portfolio as much as possible and to ensure their return.
Is crowdfunding expected to boom in 2017 or is the average Bulgarian going to remain precautious toward the alternative financial tools?
The business of crowdfunding platforms in Europe grew by three-digit percentages for the past 5 years, and there was no way for Bulgaria to remain isolated. However, our focus is not only on the Bulgarian and Estonian markets. We have planned a launch in 10 European markets for 2017, as well as adding at least 5 new originators to ensure a wider diversity of loans. In the long run, we would like to turn iuvo into one of the top five leading peer-to-peer platforms for investments in Europe.
Source: ‘Manager’ magazine (December 2016)