Debitum review
8
(our review)
In our latest review, investment platform Debitum scores an 8. The platform offers relatively stable and high returns on loans and is easy to use. For this review, we evaluated the registration process and compared the platform and its auto invest function with other major p2p platforms.
Contents:
Note: online investments through Debitum carry risks; you may lose (a part of) your deposit.
What characterizes Debitum?
Debitum was founded in 2018 as a peer-to-business (p2b) platform and focuses on financing business loans. It works with financial partners. Debitum has financed loans in multiple European countries, with a strong focus on the Baltic States and Eastern Europe.
The platform is attracting many international investors. Investors on Debitum achieve average returns of 8 to 10 percent, depending on the risk profile of the loans.
For this review, we created an account on a laptop and also tested the mobile site. Both versions were in English. However, it is also available in German, French, and Spanish.
Debitum is most often compared to peer-to-peer platforms such as Mintos, PeerBerry, and Bondora.
Creating an account
Setting up an account on Debitum is very simple. With just an email address and password, you can create an account, though you must verify it before transferring funds. Verification requires a camera (from your mobile phone), a valid ID, and proof of address.
After entering your email address and a password, you need to provide your name, date of birth, and address details. The verification process then begins.
By scanning a QR code, you can complete this process via your mobile phone. For us, (we are Dutch) this was only available in English. You scan your ID and take a photo of your face. Once these are verified, you must complete two questionnaires.
Mandatory questions about your knowledge or situation
Before transferring funds, you need to answer two questionnaires. These are required because Debitum holds both the ECSP and MiFID-II licenses. The questions help Debitum comply with regulations related to anti-money laundering and terrorism financing.
The first questionnaire focuses on you personally and includes questions about your income or the origin of your funds. The second questionnaire addresses European crowdfunding regulations. Platforms must assess investors’ experience, investment goals, and financial situation. Some questions in Debitum’s knowledge test were quite challenging.
Based on your answers, Debitum evaluates your knowledge and ability to handle potential losses. The goal is to determine whether the platform suits you and whether you are aware of the risks. Once approved, you can transfer funds to the platform and start investing.
Transferring funds: good payment options
The platform is user-friendly. Debitum offers several ways to transfer funds initially. You can use online banking to transfer money directly. Other options include credit card, Apple Pay, and Google Pay. All these methods allow for instant deposits, though they come with fees: credit card, Apple Pay, and Google Pay incur a 1 percent fee.
This works well for exploring the platform, but if you plan to deposit larger amounts, such as one thousand euros, it is more cost-effective to transfer funds manually, even though this takes a day to process.
Usability of the auto invest function
Once your funds are in your online account on Debitum, you can start investing. This is simple, both on mobile and via the online dashboard. We are particularly impressed by the auto invest function. You can set preferences for interest rates, loan durations, or amounts per investment. It also allows you to skip manually selected loans.
The platform distributes your funds across loans that match your criteria. With a low minimum investment amount (10 euros), it is easy to spread your funds across multiple loans. This reduces risks, and by setting a minimum interest rate or maximum loan duration, you can quickly create a portfolio of loans. For example, our first 100 euros were spread across 8 loans, each with an investment of 12.50 euros, on the same day.
Manual investing
Like other p2p platforms, most investors on Debitum use automated investing. On many platforms, this leads to loans being funded quickly, leaving fewer options for manual investors. However, this seems less of an issue on Debitum.
We still recommend using the auto invest function. Information about loans is limited, and you may invest in distant countries. This can make it difficult to assess risks properly. Diversification is often a good way to mitigate risks, and the auto invest function is an ideal solution for this.
Customer service in English
Debitum offers customer service by phone, online chat, Telegram, or email. Like many international platforms, Debitum provides customer service in English. It is available during business hours (8:00 to 16:00 CET, Monday to Friday).
It also has an online help center and a YouTube channel with informative videos about the platform and investment strategies. For this review, we asked questions in English via chat and email. The platform responded quickly during business hours. Questions sent after hours were answered the next business day.
Offerings
Debitum is a young platform that has quickly built a solid portfolio of loans. It offers good diversification across countries and loan durations. The volume is decent, although there are occasional periods when the offerings are less diverse.
Loans from partners
It is important to note that Debitum does not issue loans itself but collaborates with a few major financial service providers (loan originators). These financial partners are often professional organizations operating under local licenses.
For instance, Debitum works with Triple Dragon, a UK-based partner that finances video game and mobile app companies. Bono House finances assemblies and developments for eco-friendly housing projects. Foresto, a partner from Latvia, finances the acquisition and merger of forest properties. JSC Juno finances companies in the forestry and agriculture sectors in Latvia.
Returns
Debitum offers attractive interest rates and, according to the platform, has completed its first six years without any defaults. This success is attributed to a 90-day buyback guarantee on all loans. Loans that defaulted were repurchased by the respective financial partner.
The editorial team of Investment Platforms.eu achieved an average return of 12.69 percent in the first year using the platform’s auto invest function. Online reviews suggest that many other investors achieve average returns of between 8 and 11 percent.
Debitum does not charge investors any fees for using the platform. Investing in business loans and benefiting from its services is free. The platform earns revenue from the interest paid by borrowers on the loans.
Reliability and risks
Since September 2021, Debitum has held a MiFID II license issued by the Financial and Capital Market Commission (FCMC) in Latvia. This means that the platform is supervised by the Latvian government and complies with European regulations (License Nr. 06.06.08.728/537).
This license and the platform’s track record over recent years lead us to view Debitum as a reliable platform. Furthermore, investors are protected by the Investor Compensation Scheme, which covers up to 90 percent of net losses, with a maximum of 20,000 euros, in the event of Debitum’s insolvency.
Asset-backed securities
Debitum also offers ABS (asset-backed securities) investments. Here, you invest in a pool of multiple loans backed by collateral. The returns depend on the collective performance of all loans in the pool.
Review score: 8
In our latest review, we rate Debitum 8 out of 10. It is one of the platforms that we at Investment Platforms.eu actively use. If you are looking for high returns without the price fluctuations of stocks or options, Debitum offers relatively stable interest income.
Compared to PeerBerry, which offers a similar solution, Debitum is better regulated and provides better investment protection. Loans sometimes experience delays, but in our experience, these were resolved. As a result, the platform has delivered an excellent return for us.
The editorial team of Investment Platforms.eu has not yet encountered any defaults, achieving a return of 12.69 percent in the first year using the platform’s auto invest function.
The downsides of Debitum are similar to other p2p solutions. For example, you cannot access your funds instantly. It does not have a secondary market, and because you rely entirely on the credit checks of the partners, you may encounter delays or payment risks.
