#What is Twino their Business Model Risk and Strategy

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What is Twino, their Business Model, Risk and Strategy

(by fintech-reviews)

Twino is a Fintech (a company that provides financial services using new digital platforms). It is a company that intermediates investor loans (like me) to individuals and is present in a number of countries. The country of origin is Latvia, one of the countries that is betting more on strength in Fintechs.

Business Model

Twino is dedicated to assessing the risk of lending to individuals and makes these loans available in a type of market (which is not regulated). Thus, it gives private investors the possibility to buy small installments of loans to individuals in several countries. Each investor can choose the loan to buy, namely knowing the characteristics of the person, their income, the level of risk, the interest rate and the country.

Twino makes money through the difference in interest it charges to the customer and the one we investors are willing to fund. For example, I can buy a loan at a rate of 10% and if Twino charges 15% to the customer, you will earn this 5% difference to compensate for all the work, computer system and insurance you hire (more on this followed).

Risk of investing

Any loan carries the risk of the person to whom we lend the money not to give us back this money and the interest we charge. It is the risk of default that is lower or higher depending on the characteristics of the person. By investing in these loans we are transforming ourselves into a financial credit institution and being paid for it, with interest rates that can exceed 10% per year.

Having talked about the risk, it is important to mention something that significantly mitigates the risk. The insurance and guarantees that Twino gives us as investors.

One simple strategy

The average interest rate I have on my portfolio is 10% and I have had a good experience. Every day I receive the evolution of the portfolio, with the payments and receipts made. It is also possible to access a revenue projection and the control panel gives me the necessary statistics for risk control, including amounts by deadlines, by level of risk and by type of guarantee offered.

In terms of portfolio guarantees, 80% have PG and the remaining 20% have T. None is without guarantee nor does it seem to me that I will buy these credits without guarantee.