Bondster Review (2021)

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Reza Machdi-Ghazvini,CAIA
Last updated on 14 September 2021

Overall Result for Bondster

3.75 of 5

Interest and costs

Flexibility and conditions

Usability

Support and service

  • On Bondster, investors can achieve an average return of 15% p.a.
  • Most loans are offered with buyback guarantees or with some other form of collateralization.
  • Only a minimum amount of €5 per loan is required.
  • Bondster is free of charge for investors.
  • Bondster is not supervised by an official financial market regulator.

We recommend Bondster as a P2P platform. The platform should aim for official regulation by the Czech Financial Market Authority in the medium term.

Invest on Bondster now

We have tested the P2P platform Bondster.

If you want to know:

  • if we would recommend Bondster to investors,

  • how Bondster as a marketplace offers P2P loans,

  • what kind of experiences investors have had with the platform,

  • how you can automatically invest in P2P loans on Bondster,

then you will find all the information you are looking for in this review.

Let's get started.

Table of contents

Bondster review

Introducing Bondster as a P2P platform

Bondster (BONDSTER Marketplace s.r.o.) was founded by the private equity firm CEP Invest in the Czech Republic in 2017. At the current time, Bondster is not supervised by the Czech Financial Market Authority Ceská Národni Banka.

BONDSTER Marketplace s.r.o. at a glance

  • More than 12,000 registered investors

  • Brokered loan volume: approx. €65 million

  • The average yield is currently about 15% p.a.

  • Loans are offered from the Czech Republic, Bulgaria, Colombia, Kazakhstan, Lithuania, Mexico, Philippines, Poland, Russia, South Africa and Spain

  • Most loans are offered with a buyback guarantee or with collateralization

  • Minimum amount per investment is 5 euro

  • Investments can be made manually or automatically

  • Investors can invest in consumer loans, real estate loans, corporate loans and other types of loans

  • A secondary market is available

  • Investors are offered a tax report for their tax return

Who can invest on Bondster?

You can register on Bondster as an individual, if you are 18 years old. The platform is open to individuals who reside within the European Union. There are exceptions for some countries, so it is best to contact Bondster support if you reside outside the EU.

As a company (or legal entity) you can also register on Bondster and similar conditions apply as for individuals.

Regardless of whether you want to register as an individual or as a company on Bondster, you need to have a bank account in a country of the European Union.

How P2P loans are offered on Bondster

Infographic about P2P platform Bondster

Bondster does not lend directly to individuals or other borrowers, but acts as a marketplace to offer loans from loan originators to investors.

The platform works with various loan originators. The main loan originator is the Czech financial company ACEMA, which brokers consumer loans, corporate loans and real estate loans. As of the current date (May 2021), approximately 40% of mediated loans originate from this loan originator. Other major loan originators on Bondster are Kviku (short-term loans from Russia), Tez Lombard (short-term loans from Kazakhstan) and Stikcredit (short-term loans from Bulgaria).

Unlike the platform itself, which is not supervised by the Czech Financial Market Authority, the loan provider ACEMA has been officially regulated by the Czech Financial Market Authority since 2018.

Example: Obtaining a loan through the loan originator ACEMA

Loan origination via ACEMA

You can check out how consumer loans are made on ACEMA's website.

Ratings on Bondster

On Bondster, loans receive ratings from A1, A2, A3 to D1, D2, D3. The A1 rating represents the best quality (highest creditworthiness).

Collateralization of loans on Bondster

On Bondster, loans are offered either with a buyback guarantee (buyback gurantee) or with collateralization. Short-term loans and consumer loans are in virtually all cases brokered unsecured, while in the case of real estate and car loans, the property or car is used as collateral.

Experiences of investors with Bondster 

Bondster was able to establish itself in a relatively short time as a serious growing platform on the market. If growth remains steady, it is expected that Bondster will have mediated more than €100 million in loans by the end of 2021, which will be an important milestone for the platform.

In general, there are no known major or minor issues with Bondster as a platform. But there have been difficulties on Bondster with various loan originators in the past. While this was of course unfortunate for investors, it is not atypical for a P2P marketplace like Bondster, as similar situations have occurred on other P2P marketplaces, such as Mintos. As an investor, you can only protect yourself from this by investing in loans from different loan originators.

Bondster is currently not supervised by the Czech Financial Market Authority. We think that supervision would benefit the platform and investors, as it would increase trust in the platform.

How did Bondster perform during the Corona crisis?

The P2P platform Bondster performed well during the Corona crisis. However, isolated loan initiators experienced problems, especially with buyback guarantees.

Bondster during Corona crisis

After Bondster went live in 2017, the platform was able to broker between €500,000 and €1 million in loans per month on average after a short start-up phase. This was followed by a strong growth phase starting in January 2019.

With the onset of the Corona crisis, the brokered loan volume then declined sharply, although this was also the case with just about all other P2P platforms.

In addition to the decline in loan volume, there were also isolated problems with loans from various loan originators. For example, there were late repayments on loans brokered by Net Gotówka, Szybka, Pożyczka, Lime South Africa and Speedcash. The delayed loans from these loan originators were brokered with buyback guarantees, which were supposed to repurchase the loans after 60 days, but in many cases this was not the case.

We always point out that investors should not blindly rely on the buyback guarantees. The value of buyback guarantees always depends on the creditworthiness of the loan originator. If a loan originator overestimates itself, it will almost always be unable to honor the guarantees.

Although there have been difficulties with a few loan originators, this is to be expected with P2P marketplaces. Also on a positive note, the main loan originators on Bondster, which account for about 3/4 of brokered loans, have not experienced similar difficulties.

The main loan initiators on Bondster are ACEMA, Kviku, Tezlombard and Stikcredit.

Advantages and disadvantages of Bondster

Advantages

  • On Bondster, you are free to choose whether you want to invest manually or automatically.

  • Besides consumer loans and short-term loans, you can also invest in other types of loans on Bondster.

  • Investing in Euro loans is free of charge for you as an investor.

Disadvantages

  • For loans denominated in Czech crowns, you have to pay a 1% fee.

  • The buyback guarantees should be viewed with caution. The value of the guarantees ultimately depends on the creditworthiness of the loan originator. Thus, the buyback guarantees can give you as an investor a false sense of security.

  • If Bondster goes bankrupt, you could lose your investment completely.

Register as an investor at Bondster

On Bondster, you can easily register online as an investor.

1. Register as a user on Bondster

To register, click on the button "Register" in the menu at the top of the Bondster website.

Bondster register as user

Then enter your first name, last name, date of birth and other personal information about yourself.

2. Verify your bank account

After submitting the form, you will be redirected to your account overview. Now you need to verify your bank account. To verify your bank account, you just need to make a deposit to your account at Bondster.

Deposits and withdrawals on Bondster

To deposit money to your account at Bondster, you have to transfer the amount to a central account of Bondster. You can choose between an account in Euro or in Czech Crown. We assume that you want to transfer money in Euro.

Deposit money

If you want to deposit money, click on the "Deposit money" button in the account overview.

After that, you will be shown exactly which information you have to enter for the transfer.

Bondster deposit money

When transferring money, make sure that you enter the reference details of the transfer as shown under "Payment reference", otherwise Bondster will not be able to credit the amount to your account.

Most of the time, a deposit does not take longer than 1 day. In some cases, however, a deposit can take up to 3 days.

Withdraw money

If you want to withdraw money from your account, you just need to press the "Withdraw money" button in the account overview and then specify the amount you want to withdraw.

Investing in P2P loans on Bondster

On Bondster, you can easily invest in P2P loans automatically or manually.

Auto Invest

With the Auto Invest feature of Bondster, you can invest in P2P loans automatically.

Bondster Auto Invest

With the Auto Invest feature, you can apply different settings, the most important ones are:

  • Investment amount (target amount)

  • Maximum investment amount per loan (max. share in 1 investment)

  • Loan type

  • Ratings (credit risk class)

When using the Auto Invest function, you must keep in mind that the tighter you set the limits, the fewer loans will be available. With Bondster, make sure that there are still enough loans matching your settings under the "Loans found" note.

When investing in P2P loans, it makes sense to invest only a maximum of €5 - €10 in a loan to limit the risk that emanates from individual loans. Furthermore, you can limit the default risk by investing in loans that have above-average ratings, on Bondster these are loans with ratings A1 to B3.

Manual investing

On Bondster, you can individually select the loans you want to invest in.

However, this is not recommended because when investing in P2P loans you should spread your investments as broadly as possible. For example, if you invest €1,000 on Bondster and divide the amount into €5 per loan, you would have to select 200 loans at the beginning. This would be very time-consuming and you would have to select new loans again regularly.

Secondary market on Bondster

While Bondster did not offer a secondary market to investor in the past, in August 2021 the platform finally launched a secondary market.

What returns can investors expect on Bondster?

On Bondster, you can expect an average return of 15% p.a. as of today (May 2021).

What costs and fees does Bondster charge investors?

For investments in Euro loans, Bondster does not charge any fees to its investors. But for loans in Czech Crowns you have to pay a fee of 1%.

Can you automatically invest in P2P loans on Bondster?

Yes, you can automatically invest in P2P loans on Bondster using the Auto Invest feature, which is even highly recommended.

Can you select individual loans on Bondster?

Yes, you can select individual loans on Bondster. But you have to be aware of the high effort and make sure to spread your investments sufficiently.

Risks of investing on Bondster

There are various risks that can occur with P2P loans as an asset class, which you as an investor must be aware of. A particularly important risk is the credit default risk. Loans can default when borrowers can no longer pay their rates.

This is not a risk that can only occur on Bondster. You generally have to expect all P2P loans to default.

The risk of default can be limited by investing primarily in P2P loans with above-average ratings. The risk of loan default can never be completely ruled out.

How reputable is Bondster?

Although Bondster is not supervised by the Czech Financial Market Authority, the main loan provider on Bondster ACEMA is regulated by the Czech Financial Market Authority. Furthermore, the platform has been on the market for 3 years and is expected to have mediated more than €100 million in loans in the near future.

Taking these points into consideration, we would classify the platform as reputable. However, in the future, the platform and the investors on the platform would benefit from an official regulation, as it would significantly strengthen the trust in the platform.

Are  detailed statistics about the loans on Bondster available?

Yes, Bondster publishes detailed information about the P2P loans offered on its website.

Does the Bondster platform publish its annual report?

Yes, Bondster publishes its annual report on its website.

How does the buyback guarantee work on Bondster?

Pretty much all loans on Bondster are backed by buyback guarantees. Loans with buyback guarantees are highlighted with a small gray sign. But it is also mentioned in the loan details whether the loan will be repurchased in case of difficulties.

On Bondster, delayed loans are repurchased after 60 days. You will be refunded both your invested capital and the lost interest.

What are the default rates on Bondster?

Bondster publishes default rates only for loans provided by loan originator ACEMA. The default rate for loans originated by ACEMA is 8.8%. This makes the default rates comparable to those on other P2P platforms.

Are the loans on Bondster protected by the deposit insurance?

No, the loans on Bondster are not protected by deposit insurance such as the FDIC insurance.

Paying taxes on income from P2P loans on Bondster

Bondster offers you a tax report for your tax return.

Prepare tax report on Bondster

In the account overview, click on the "TRANSACTION OVERVIEW" button at the bottom.

Bondster prepare tax report return

Then click on the link "PREVIOUS YEAR" or "CURRENT YEAR". At the bottom you only have to click on the button "TAX REPORT".

Result of our Bondster Review

Bondster is a good P2P platform, which is strongly reminiscent of Mintos in parts. Since Bondster operates as a marketplace similar to Mintos, this is not particularly surprising.

Although the platform is not officially regulated, what speaks for the seriousness of the platform is that detailed reports are provided on the brokered loans and the annual report is also publicly available. In any case, however, Bondster should be monitored by an official financial market regulator in the medium term.

Although Bondster is still relatively small compared to other P2P platforms, it provides investors with a large loan offer. With the Auto Invest feature, investors can efficiently invest in the available P2P loans.

All in all, we would unreservedly recommend Bondster to investors.

If you want to try Bondster, you should use our exclusive promo code to get 1% cashback on your investments.

The best way to find out if you feel the same way is to sign up as an investor on Bondster.

After you have made your experience with Bondster, we would be happy if you share your opinion about Bondster with us.