Digilo review
7
(our review)
Digilo is a young crowdfunding platform focused on business loans secured by real estate. We rate the platform 7 out of 10. It is easy to use and offers a good selection of projects, although the current offering is still limited. As a result, we see Digilo mainly as a useful addition to a diversified crowdfunding portfolio.
Contents:
Note: investing via Digilo involves risk. You may lose (part of) your investment.
What is Digilo?
Digilo is a crowdfunding platform for business loans backed by real estate. It was founded in Latvia by a team of four women. Before launching Digilo, they worked together at a lending company within the group, managing real estate-backed loans.
The minimum investment on Digilo is 150 euro per project. Expected returns range from 9 to 12 percent per year. During our test, the number of available projects was limited, but the information provided for each project was clear and well structured.
Investors most often compare Digilo with platforms such as EstateGuru, Debitum and LANDE.
Investment offering
Through Digilo, you invest in business loans secured by real estate. The purpose of the loans varies. Businesses use them to finance or refinance working capital, equipment or future growth. At the moment, all projects are located in Latvia, although the platform plans to expand into the other Baltic countries.
The number of available projects is still limited. According to Digilo, this is by choice. The platform only publishes projects that meet its own quality and risk assessment standards, and expects deal volume to increase as the investor base grows.
Registration
The registration process at Digilo is quick and straightforward. You can complete it in seperate steps, although the full process took us about ten minutes. For identity verification, Digilo uses Onfido, a well-known identity verification provider. During registration, you take a photo of your identity document and a selfie with your phone.
For payments, Digilo works with Lemonway. During registration, you must answer mandatory questions about the origin of your funds and your financial situation. Crowdfunding platforms with a European ECSP licence are required to ask these Know Your Customer (KYC) questions.
After approval by Lemonway, which in our case was the next day, you can transfer funds to a French IBAN. You can do this through your own bank, if you include the required payment reference. Because Lemonway reviews incoming payments, it may take some time before your funds appear in your account. For example, payments we made on Friday were credited on Monday morning.
Once your balance has been credited, you can start investing.
Investing information
The project pages on Digilo provide key information such as the loan amount, loan term and interest rate. They also display the loan-to-value (LTV) ratio, showing the size of the loan relative to the value of the collateral. In addition, each project explains the repayment structure, such as a bullet loan (no repayments during the term) or a balloon loan (limited repayments during the term).
Besides the key figures, Digilo also provides the purpose of the loan, a repayment schedule and supporting documents, including a KIIS (Key Investment Information Sheet), which explains the risks and procedures in case of payment delays, as well as a property valuation report supporting the market value of the collateral. At the moment, these documents are only available in Latvian.
Reliability and risks
Digilo holds a European ECSP licence. This means the platform must comply with European crowdfunding regulations, including the segregation of client funds, the provision of a KIIS and mandatory KYC procedures.
Loans on Digilo are secured by real estate. This provides additional security if a borrower can no longer meet its repayment obligations. However, enforcing collateral is often expensive and legally complex, making platforms cautious about taking this step. These recovery procedures can also take a considerable amount of time.
Market conditions may change during the loan term. The value or condition of the collateral may decline, and together with the costs of enforcing security, there is no guarantee that selling the collateral will generate enough proceeds to repay the full outstanding debt.
Our review score: 7
In our review, Digilo receives a score of 7 out of 10. Overall, we are positive: during our test, the platform made a strong impression. Registration was straightforward, the project pages were easy to understand and the investment opportunities we reviewed appeared worthwhile.
The available projects and the team behind the platform appear solid, but Digilo is still a young platform. With the current number of projects, building a well-diversified portfolio is difficult. For that reason, we do not consider Digilo suitable as your only or primary investment platform. For investors who already use other platforms, it can be an interesting addition.
Over the coming years, we will mainly be watching how project quality develops and how Digilo handles payment defaults and collateral recovery. Without default cases, everything looks positive, but in the long run the way a platform manages problem loans is often one of the most important factors in determining its success.
Disclaimer
Investing involves risk. You may lose part or all of your investment. This review was written by the editorial team Of Investment Platforms Europe and is based on our own experiences. Our websites generate revenue through advertising and compensation from financial providers.
More information about our editorial policy and methodology can be found on our About page.
