Visit at VIAINVEST – a solid platform with a long track record. Including interview with platform lead Simona Lucatniece

Visit at VIAINVEST – a solid platform with a long track record. Including interview with platform lead Simona Lucatniece

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A tour around the VIAINVEST office

I went to visit VIAINVEST at their office in Riga just before I went to Lithuania. I had not looked into VIAINVEST before I went to Riga, as there were so many other interesting platforms that offers higher interest rates than the fixed 11% that VIAINVEST offers on all their loans. It was so busy at the P2P conference in the start of June so even though VIAINVEST was also present at the P2P conference I did not find the time to talk to them.  However when Gunars from Crowdestor put me in contact with VIAINVEST, I started looking into the company and the group. Now I wish that I started investing with them a long time ago. This is actually a pretty big company when you count in the VIASMS Group that they are part of. They also have a track record of 10 years in the direct to consumer loan business which is a lot more than most crowdlending companies in the Baltics. 

VIAINVEST have all of their resources in-house. They have two whole floors in one building and some extra people sitting in another building across the street. Touring the office with the platform lead, Simona, I also met one of the board members Deniss, who was working with the VIAINVEST risk analyst. It was actually really nice to see that the members of the board are there with the teams on a day to day basis. Going around meeting the employees in the different rooms, I asked if I could go to the IT department. Simona told me that not even she  have access to the IT department. That is tight security! Ok, so let us get on with the interview! 

The interview with the platform lead Simona Lucatniece

Georg: 
This is not really a question, but, I just have to say when I looked into The VIAINVEST platform and the VIASMS Group website, it was easy to find a lot of information about your business. You are one of the few platforms that share a lot of information. You have a lot of information that you cannot find on other platforms. Of course, you have also been in business a lot longer than most other platforms. There are annual reports, you can find descriptions about the board members and their experience in finance. You have a blog on the VIAINVEST website and also a lot of information about your different products and sister companies. So I just wanted to say you did a very good job of supplying information for investors. 

Simona: 
Thank you. We are trying to do our best. 

Georg: 
When I look in the Danish forums and in other bloggers portfolios it is not that common to see VIAINVEST, even though you have been in business for a long time. Why do you think that is? 

Simona: 
We have a relatively small portfolio and also a unique portfolio because we only list loans that are not available on other platforms. Our own loans. They are also some limitations on the portfolio. But the German bloggers that write about VIAINVEST, have given us high ratings. So I think that there is a certain trust level that we have earned. We are not striving for a global investor community. At this point, we don’t have enough loans to offer. We try to keep it a very solid, stable and safe portfolio. 

Georg: 
I actually prefer when a platform does not try to grow too fast to keep up with demand. If you would enter a new market too fast it could have a negative effect on the portfolio. 

Simona: 
We are going slow with our own loan originators. Currently, on the VIAINVEST platform, we have five loan originators. But we also have a Romanian loan originator in the group, but it is not yet listed on the VIAINVEST platform. This market is still young for us as we have been there for almost a year, but we still do not feel that we are stable enough in this market to offer the loans to our investors. We want to reach a certain point of stability and an inside feeling of security before we put it on the VIAINVEST platform. It is very important for us to offer a quality product to investors. We do not want to go fast and just put the loans on the VIAINVEST platform and then maybe later find out that the market is not stable. Or legislation hits and turns everything around. We are trying to take all the factors into account that comes with a new market and reach stability before offering the new loans to investors. This is a priority for us. 

Georg: 
You are actually a pretty big company. Your website says that you currently have 150 employees and 220 including sister companies. 

Simona: 
Yes. I will just briefly introduce the VIASMS Group as it is. We are currently in the VIASMS Group office in Riga and this is the headquarter of the company. The company is established in Latvia and has been in operation since 2009. So this year we had our 10-year anniversary. Over this 10 year period, we have expanded into 7 countries and I think that is a great achievement for a Latvian financial company. We are doing our best to expand our product portfolio and go outside consumer lending. Consumer lending was the first and main core business of the company. But now we have the VIAINVEST platform, we have a digital payment platform, we have savings products in Sweden, and we are constantly thinking about adding something new. Here at the office, we have a core team that includes risk management, legal, our CEO and board members are sitting here, as well as marketing. We also have colleagues from other countries here, e.g. Swedish debt collectors and of course the loan originator for the Latvian loans on VIAINVEST is also located here in this office. In other countries, we have subsidiaries where the particular country manager and their teams are working to originate loans. In the case of Sweden as well to manage the VIASPAR  product. Right now we issue consumer loans in Rumania, the Czech Republic, Poland, Spain, Sweden, and Latvia.  Then we have the 7th country wich in Lithuania where our digital payment platform VIALET is registered. So we have an electronic money institution license in Lithuania. However, the CEO and the team is located right here in Riga, in a building just on the other side of the street. We did not have enough room for them in the office, so we moved them to the next building. So the main things happen here and everything is operated from here. Our board members and CEO are regularly flying around and visiting all the daughter companies. So actually the cooperation is pretty close. On a daily basis, we work with all the countries. We know all the country managers very closely and they are all coming ones a month to the office here in Riga to give an update and work with other team members e.g. risk management and the data team. We are trying to keep everyone really close because this gives us the opportunity to know all the little details about what is happening in other countries. So we do not miss anything about legislation changes or changes in the team. This is the model we have established and use. 

Georg: 
So you have VIAINVEST, your P2P platform, that is part of the VIASMS Group. So how many people do you have dedicated just to the VIAINVEST platform?

Simona: 
Particularly focused on VIAINVEST and not doing anything else we have three people. Two of them are investor support specialists and investor advisors and one is a VIAINVEST developer that is working from the technical side of the platform. Then there is me as a representative and VIAINVEST platform lead, but I am also managing public relations for the whole group. Besides that, we have all these teams sitting right next to us e.g. marketing, who is really important for us they are also working with VIAINVEST and basically everyone else. But these four people are specifically concentrated on VIAINVEST. As we are unique soldiers we always attract colleagues because some questions from investors require us to consult legal, consulting risk and everything. We try to establish quality relationships with investors, so we address all the questions very seriously. That is why it is so important that we have the whole team sitting right next to us. 

Georg: 
What about your group IT department? Are they also located here in the building or is it outsourced? 

Simona: 
No, it is in-house. they are located in the same office but on the sixth floor. Currently, they are around 35 people. It is a big team because they support all the daughter companies in every country. In some countries where loan portfolios are bigger e.g. in Poland, they have dedicated teams. So IT is a huge part of our business. We could not do it any differently, because in this industry everything is changing really fast. Legislation and product needs change all the time and you need people in-house who can respond in seconds because sometimes there is a new idea about a new product and our board wants us to develop the product as soon as possible. Starting from today. Therefore it is really important that the IT team is reachable in a phone call or just by going upstairs to their office. 

Georg: 
There is a lot of new P2P platforms popping up all the time. Investors don’t hesitate to jump on a new platform or exit an existing one when there are small problems or a new platform comes out with a new product. What does VIAINVEST do to stay popular with the investors? What work does VIAINVEST do to attract investors and to keep the ones you have?

Simona: 
The most important thing for us is to keep a solid business and solid interest rates on VIAINVEST. There are some new companies who offer cosmic interest rates like 17 to 20 percent. I am not sure where this comes from. Maybe some people think that the P2P industry is very light, and easy money is circulating around here, but actually, it is not. It is serious business and serious risks and I think that a platform should take this responsibility to ensure a safe business environment. That is why I am really happy the VIAINVEST has the VIASMS Group in the background, so we always have a backup plan if something should happen to VIAINVEST. Of course, I hope nothing happens to us. But still, we have a solid track record behind us. Investors are actually really glad that the group is there as it is kind of a guarantee and security as in case of any difficulties, the group will always take over the liabilities of the VIAINVEST platform. This is one thing. The other thing is the personal touch that the investor support tries to ensure and the quick response time. This is very important. I also invest in different platforms and I have been in situations when I need an answer to an important question and no one answers for a week. That is terrible. These are you funds that the companies are dealing with and if you cannot answer in a week than there is a problem on your side because your team is too small or answering investors is not your priority. We are trying to do our best to ensure that this communication is fast and satisfying to the investors. These are the main reasons that ensure that investors stay on the platform. We are also always open if investors want to visit the office and see how we do business. Growth and stability are the main factors that are always in the background. It is true that new platforms have popped up out of nowhere in the recent time. Both bloggers and other platforms are concerned about this but we are all a huge community and if one platform goes down or a scam comes up it will affect the reputation of the whole industry. That is why it is great that there are some older and solid platforms that already have their own reputation. 

Georg: 
I talked to some German and Danish investors at the P2P conference and also in different forums. The tax document you require from investors on the VIAINVEST platform to not withhold tax when investing in loans from the Czech Republic or Spain, is holding some investors from using your platform. Why do you need that document? I have Spanish loans on other platforms and they do not require a similar tax certificate. 

Simona: 
For the platforms that are registered here in Latvia, the initial main problem and also an opportunity was that there is no unified legislation. The one legislated act that determines how a platform should work. So all acts that platforms have taken so far is an interpretation of the law. That means you can either be more strict with the rules or you can go with the flow. With VIAINVEST we are always trying to ensure maximum compatibility with the laws and we are really trying to do things right. So when we established VIAINVEST we also made the decision to withhold taxes on the platform even though other platforms do not. At a later stage, after consulting with legal, we removed this demand for a tax document for Latvia, Poland, and Sweden. So these countries are free from taxes on the platform. For the Czech Republic and Spain, we are still negotiating and checking local tax administrations as we are not the ones who can make the decision alone. It comes with discussions and we do not want to cause any troubles for our local loan originators in the Czech Republic or Spain. But the three other portfolios are the largest on the platform. But we are working on making deals with the local authorities. 

Georg: 
Are there any plans to onboard Rumania on the VIAINVEST platform in the near future?

Simona: 
Ideally, it would be at the end of the year, but I cannot give any timeline as it also depends on the decision of the board. In Rumania, there is also some instabilities with legal requirements for lending businesses so this can also affect the costs of the loan. 

Georg: 
Will you introduce 2-factor verification on the VIAINVEST platform at some point? 

Simona: 
Lately, we have received a lot of requests from investors on exactly this functionality and we are already working on a solution to introduce this on the VIAINVEST platform. If an investor trusts his funds with the platform, of course, he wants all the levels of security to be complete and everything is happening as it should. 

Georg: 
If you do some small improvements to the VIAINVEST platform, do you put them on your blog? 

Simona: 
Usually, we inform investors of changes on the VIAINVEST platform in a newsletter, but we have put changes on the blog if it is something more complicated. In that case, we try to explain it in a blog post. 

Georg: 
What did you think about the P2P conference in Riga at the start of June? 

Simona: 
First of all, I was amazed that something like that happened in Riga. Finally, we got a chance to be in our home country and everyone was coming to visit us. I think people really enjoyed Riga, especially in the summer because the weather was perfect. The P2P conference itself was a really great opportunity to meet other platforms and investors who were not yet invested in VIAINVEST and of course publishers. The part that I really liked about the conference was that I finally got this feeling that platforms, investors and publishers are all a huge community.  Everyone is really friendly and we are getting new friends all the time. I don’t really see platforms as true competitors because a smart investor will always diversify his investments among a lot of platforms and it is our responsibility as platforms to keep this environment safe, friendly and open minded. Because we all have a common reputation in terms of industry. Especially platforms who are working here in Riga as it has become a hub for P2P platforms. No other European country or even city has so many platforms. It is so great to have all these wonderful colleagues here and a lot of platforms to learn from. So I really hope this will be a returning event. 

Georg: 
The was actually an investment conference before at the start of April 2019 in Stuttgart. I think this was the first time the platforms got together. 

Simona: 
Yeah, we had this platform dinner where there were some bloggers and platforms who came together. It was actually great and I met some other platform representatives for the first time even though we were located in the same city. It was really cool. Now sometimes when Lars from Germany comes to Riga he is always organizing these night events and inviting the platforms so we can network. That is great. We have a lot to share at a lot of knowledge to give each other. Because investors spread themselves over many platforms, we are not in direct competition. So we can have open discussions about issues or things that worry us. If I know e.g. some bloggers or investors in person it gives me more comfort and trust in the industry and that we are doing a good job. 

Georg: 
I see some friendships forming between the platforms and I attended one of these informal events as well. I see this as something that protects investors as well as the industry. There are all these new platforms coming up and of course, you will talk internally about them. I would like to see in time some kind of group between established platforms to kind of evaluate the new platforms. The established platforms have some kind of unique knowledge and many times know some of the people behind. You will be able to see much clearer if it probably is a “kamikaze” platform. 

Simona: 
I think that is a wonderful idea with a group like that and I also think is about time to do something like that. It is of course already happening informally as we have these events. Many times they are arranged by bloggers because they feel responsible for the security of the funds of their followers. They feel responsible for advertising platforms that are solid and not scams or tricky platforms where you can not really know who is the true beneficiary. I think it will happen in the near future. It will just take some time to form. 

Georg:
There was a little thing I wondered about when I first signed up to the VIAINVEST platform. The interest rate is 11%, but the net annual return in my account currently says 19.2%? 

Simona: 
We already looked into this issue in your account with customer support. This is a number that change all the time, especially in the beginning, depending on invested amount and return. So after a little while, it will stabilize. It changes with each little transaction that happens. 

Georg: 
Does VIAINVEST you pay interest on all loans, even if they are not current? 

Simona: 
Yes. We pay interest for the period of investment, no matter if it is current, delayed or extended. 

Georg: 
You started the VIAINVEST platform during December 2016, But you actually started the group in October 2009. That was basically in the last financial crises. That seems like the worst time to start a financial company, or is it? Because I guess there is also a higher demand from borrowers at such times? Everybody in P2P is worried about what will happen when a new crisis arrives. Your group has actually been there, so can you tell me something about how direct to consumer loans are performing during a financial crisis? 

Simona: 
For non-bank consumer lending, a financial crisis is one of the best times to start a business, because more people are in need of additional funds at a point where banks kind of slow down their lending business. So this is where non-banking lenders and alternative finance tools come in play. So the financial crisis was one of the main reasons why the company was started. Since then we have experienced only growth and I think we are pretty stable and have a stable position in all our markets. For us, the crises may happen any day because of the legislation changes and this is a very important part of the business. During these years we have really established a thick skin and we are ready to transform the products or business model in days. It takes a very short time for us to find the path when something changes. So we feel confident about this. As you may know, there were recent changes in the Latvian legislation for consumer lending as they put a maximum amount for annual interest for borrowers. This came as a shock for the industry because the interest rate was very low at 25% annually. For these businesses, this is really low. But then again, we are still working and we are happy and everything is still happening. It all comes from experience and the knowledge on how to deal with the difficult and different problems. There will always be problems. At no time do we not have external factors that could affect something negatively. Therefore, your experience and ability to change is the most important thing. That is also why we have our IT team sitting here with our own people because we can then have a clear focus and change direction very fast. In the group and VIAINVEST we have established a pretty good knowledge base for everything, so we feel pretty confident about economic downturns and legislative challenges in all the markets. No country is easy for this kind of business. You just need to be able to adapt, like a chameleon. We are always cautious but at the same time, we feel solid and well established. 

Georg: 
What happens to the default rates during a financial crisis? Will they go up and will that be covered by the higher demand for loans?

Simona: 
It is possible to slightly modify the credit scoring model if we feel that people have difficulties repaying the loans, for example, by setting more strict rules and slowing loan issuance down for a period. We will adjust it to market needs of course taking into account all obligations imposed by the legislation and other requirements set by the regulator. We have our data team in-house and our risk manager is really bright-minded. He has a Ph.D. in mathematics and he developed all these scoring models by himself. So adjusting we can do very fast. But of course, there will always be defaults in this industry. So everything is about balance. But the one thing we try to do in every country where we issue loans is working personally with each customer. Sometimes you can detect problems with a customer, even before he has a delay. Usually customers also feel free to communicate with us by letting us know that he will not be able to pay on time. Maybe we will then extend the due date with two days. We are flexible like this because it allows us to keep on the customer and keep his interest in our company and also to avoid some major financial problems afterwards. So communication and a personal approach to the customer is important. 

Georg: 
Under numbers on the VIAINVEST website, I saw that it said 7.2% non-performing loans of total issued loans. Is that your current default rate? 

Simona: 
No. Actually 7.2% is loans that are more than 90 days late. This considers the whole group even including the loan originators that are not on the VIAINVEST platform yet. 

Georg: 
I looked a little bit on your other products and I saw VIASPAR in Sweden. This is not P2P but it was really interesting to see that you a deposit product where you can get 4.5% to 10.33% for private individuals. That seems very high in the current market. How do you manage that? 

Simona: 
It depends on the account type because there are accounts for private individuals and also for companies. There is also a term. In case of P2P maybe the term is 30 days for a short term loan. But for VIASPAR the term is 1 to 3 years where you are not able to withdraw your funds. The savings products are really typical for Sweden and a lot of consumer lending companies are branching there. 

Georg: 
I think you should start up a deposit product in Denmark. You would get a lot of customers. There you would be lucky to get 0.7%. If you could even just give a few percents then you would get a lot of customers. Even if the term was a year or more. 

Georg: 
I looked at your VIALET card as well. A am a very big advocate of Revolut. I really love their product and their free services and I use it for all my transfers and currency exchanges when I invest on the different crowdlending platforms, to get these services for free. How does Revolut and the newer player N26 compare to your VIALET product? Does the VIALET card have something that Revolut does not? What are the key selling points of your VIALET card product? 

Simona: 
You will not believe it but this is the most popular question about VIALET that I usually get. As I am not that actively involved in VIALET, I still have not figured out the best answer. But our VIALET CEO is very open for communication with clients so I will forward the question to him. In the development process of the product, they would for sure have explored Revolut and N26 and compared them to VIALET

Later Simona got back to me with this comparison document between the three products. Here is the comparison between the fees. You can download a PDF file with the full key selling points here

Georg: 
What are the expansion plans for VIAINVEST for the next couple of years? Are you going into any new markets? Are there new products in the pipeline? 

Simona: 
In terms of the group, we are looking at a few new markets. I cannot reveal any of them by name at this point but changes are coming. We feel confident enough to try something new. In terms of products for the lending business, as it changes all the time, there will be some product changes may be already in a few months. It will only bring more opportunities for both borrowers and investors. In terms of the VIAINVEST platform, I really hope that we will add Rumania as another loan originator. At the end of the year maybe there will be some changes in the regulations for platforms and finally all the market players will get the same rules for everyone. There will be a licensing process but right now it is too early to talk about this in details. For investors, I don’t think things will change much. It is more the platforms from the inside, how we operate, how we do taxes, how we do everything. This is a really good thing because it will give a more secure feeling for investors. Let us also see how VIALET develops because it is still a very young product and we are just testing the market to see where we can expand to and what features we can add. 

Georg: 
Why is the group called VIASMS? Does it have something to do with how borrowers apply for a loan? 

Simona: 
There is old history in relation to this name. At the very beginning, there was an opportunity to apply for and get a loan via text message. Since then the word SMS kind of stayed with us. actually recently we were discussing to change the group name to something more related to fintech but up until today, we have not come up with a good name. 

Georg: 
When VIAINVEST score borrowers do they supply most of the information used in the scoring themselves or do you get most of the information from some external services? I know this can vary a lot from market to market. 

Simona: 
I am not sure about all the countries, but in Latvia, the borrower fills in some basic information and then we use this paid service to get more information. There is a rule that we must use this service as a lender. They are called credit information offices or something. They store information about the credit history of each person who has at least once applied for a loan in the bank or a non-banking institution. So we use both internal information about the borrower and external. Then we combine the information into our scoring model and then we can give the borrower a risk score. 

Georg: 
When a borrower goes to your website and applies for a loan, how fast can they have the money on their account if the loan application is approved? 

Simona: 
As I live in Latvia, I only know how the Latvian loan originators work. But in general, we have this model around the group that the loan is issued within 15 minutes. First, there is an automatic scoring and then the operator, who is working from 8 o’clock in the morning until 10 o’clock in the evening, does the final decision and accept. So if the borrower has the same bank as us, the money may arrive on the same day, otherwise, the funds should be there the next day. 

Georg: 
What about the signing of the legal documents? Do you use electronic signatures on the loan documents? 

Simona: 
When a borrower requests a loan he simply signs by ticking a checkbox. 

Georg: 
Will that signature hold up in court if they default? What would keep someone from using another person’s data and taking a loan in their name? 

Simona: 
We have all their data and the ticking of the checkbox gives a legal obligation to fulfill the contract. There is this step in the application process on VIAINVEST where the borrower needs to confirm his identity by transferring 1 cent to our bank account. That confirms the identity of the borrower and we then return the 1 cent to the borrower. 

Georg: 
On the VIAINVEST platform you have short term direct to consumer loan or payday loans. You also have something called a credit line. What is that exactly? 

Simona: 
The credit line is something that we established because of legislative restrictions. We were forced to modify the product from a payday loan that is a really simple product, to a credit line that at the end of the day actually offers more flexibility for the borrower. So the credit line is an open-ended agreement that means that the borrower requests a loan, but the borrower really opens a credit agreement with no particular ending date. Within this agreement, the borrower can then request additional amounts of the loan. E.g. the borrower requests 300 euros today, then he repays 200 euros and 100 euros are still left for payment. If he now gets an additional need for 50 euros, he can add this additional request within the same agreement. As the calculation of interest and the repayment change accordingly. Here in Latvia this product has become really popular because it gives the borrower the chance to choose the repayment terms. If you are really into the payday loans and you would like to repay everything after 30 days like before, you can just do that. But if not, then you can choose the option to make monthly payments. It is a new generation product that gives more opportunities to borrowers because sometimes it is hard for the borrower to repay the full amount after just 30 days. It is a pretty short term and a credit line allows them not to be scared of the payments and enabled them to plan their finances better. 

Georg: 
For VIAINVEST that must also be a more profitable model because the loan gets a longer term than the payday loan? 

Simona: 
Yes. That is another reason that allows companies to survive after very strict legislative changes. We adapt to the changing market situation and create something new that allows us to continue our business successfully. 

Some final thoughts about the VIAINVEST platform

I have to say I am pretty impressed with VIAINVEST. The group has been in business for 10 years, the longest track record of any of the platforms I have visited so far. There portfolio and business model has proven to be stable even during a financial crisis. So they “only” have a return of 11% per year but let us be honest, that is actually a pretty good return. Sometimes I get really worried of the high interest rates we see out there. The successful investor is one that does not get greedy and does not always go for the highest returns. He is the one that choose solid companies and projects and keeps his emotions out of the picture. Another thing I really like about VIAINVEST is that they are very responsive whenever I contact them. This is really important for investors. If you have a question, problem or concern you should be able to get a proper answer quickly. The VIAINVEST platform interface and auto invest is extremely simple so I would actually say that VIAINVEST is a very good beginner platform and a very solid addition to your already existing portfolio. 

I have for now invested 2849 euros with VIAINVEST and in two days from the money landed at my VIAINVEST account all the funds were invested. So there is no apparent problems with cash drag. VIAINVEST will be one of my main platform over the next couple of months. At least in my top 5! 

About the tax certificate, I can only comment on the Danish tax certificate. The Danish tax document took me 5 minutes to fill in and send, and until they return it so I can invest in loans from Latvia, Poland, and Sweden without VIAINVEST withholding any tax. So these 3 countries are free from taxes on the platform. Polen is their biggest market anyway. For the Czech Republic and Spain I will just wait for the Danish tax authorities to return the signed tax certificate and I can open up for the last two countries as well in my auto invest! 

I made an agreement with VIAINVEST, that if you sign up using the green button below, you will get a 10 euro bonus if you invest at least 50 euros. 

Share the knowledge about VIAINVEST

If you know anyone who would like to start investing but is not sure how to get started, you could share this article with them. If you have any questions about VIAINVEST that I did not cover in this article, please leave a comment below and I will get an answer from VIAINVEST for you. Are you already invested with VIAINVEST? Why? Why not? Please share your thoughts below! 

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