Proficient European P2P investors choose liquidity on the secondary market
According to the investment platform Robo.cash, 62% of European P2P investors support the opportunity of buying loans on the secondary market. The growing demand for this option is primarily driven by experienced customers with sufficient funding.
Over the past year, the platform has seen an increase in the number of investors favoring the secondary market. Since mid-2020, around 100 customers per quarter went for this liquidity-boosting alternative when setting up a portfolio.
However, the growth of the platform investor base outstrips the secondary market extension, and the share of the latter decreases over time. For example, of those who registered in Q2 2021, only 56% invest in the secondary market, compared to 74% who registered in Q2 2019.
"We can assume that new investors trust the secondary market less and do not invest in it initially due to the fact that they are not yet familiar with the platform or due to little experience", the platform analysts comment on the statistics.
Depending on the investment volume, the amount of funds entering the secondary market also changes. Only 59% of customers with funds of less than 1,000 euros invest in the secondary market. The number of the investors with a balance of 15,000 euros reaches 70%. The average investment of those who choose the secondary market is 25% higher than those who do not participate in it at all. Thus, mainly sophisticated players enter the secondary market.
“Large investors are keen to maximize their income on the platform and are not afraid to take advantage of its benefits. This includes actively using the secondary market, as this is where you can buy a loan with an attractive interest rate, as well as keeping funds on the platform and reinvesting them”, add Robo.cash analysts. "At the same time, the already small percentage of investors who prefer to withdraw funds from the platform immediately after closing the loan is decreasing. This could indicate a growing trust in both the P2P market in general and the Robo.cash platform directly".