Nibble Review

Last updated on 27 May 2021 by Reza

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Nibble Review

Nibble is one of the smaller European P2P platforms (May 2021). The platform was founded in 2019 and has grown steadily since then. Nibble is part of IT Smart Finance Holding, which has been around since 2014.

All loans offered on Nibble are granted by loan originators (subsidiaries) that belong to IT Smart Finance Holding. This virtually eliminates conflicts of interest between loan originators and the platform. Investors benefit from this structure because they are less likely to expect a loan originator to suddenly go bust.

Introducing Nibble as a P2P platform

Nibble (Nibble OÜ) platform was founded by Maxim Pashchenko in Estonia in 2019. Nibble is part of IT Smart Finance Holding, which has been around since 2014. At present, Nibble is not (yet) supervised by the Estonian Financial Market Authority.

Nibble (Nibble OÜ) at a glance

  • 600 registered investors
  • Loan volume: approx. €500,000 in total
  • Investors can expect an average return of approx. 14.5% p.a. (May 2021)
  • Lending in Russia and Spain; soon also in Mexico (planned for 2021)
  • Loans are offered with and without buyback guarantee
  • You can invest already with €10
  • Investors can only invest automatically, there are 3 strategies to choose from: Classic, Balanced and Special
  • No secondary market, but investors can ask Nibble to find a buyer for the P2P loans
  • A tax certificate is not offered, but the platform provides its investors with all the necessary information for their tax returns

Who can invest on Nibble?

You can invest on Nibble as an individual if you are at least 18 years old and if you have a bank account in the EU. However, you can also invest on Nibble with an account outside the European Union, provided that you have your permanent residence in a country of the European Economic Area. 

Companies can also invest in P2P lending on the platform, provided they successfully pass the anti-money laundering process.

How P2P loans are offered on Nibble

Nibble: offering P2P loans

Nibble works together with its parent company IT Smart Finance Holding to broker loans.

The parent company owns several subsidiaries that are loan originators, focused on short-term consumer lending. This means that Nibble does not originate the loans directly. Instead, Nibble offers the loans that have been arranged by the loan originators of IT Smart Finance Holding.

Example: Obtaining a loan by a loan originator from IT Smart Finance Holding

Example loan originator Nibble

For example, the loans from Spain that are offered on Nibble are originated by the JOYMONEY S.L. company.

Ratings on Nibble

Nibble assigns ratings from AA to C for the loans (AA stands for the best rating or creditworthiness, C for the worst).

Collateralization of loans on Nibble

Loans offered on Nibble are short-term consumer loans that are typically unsecured.

Nibble review - investor experience 

The platform Nibble has only been on the market since 2020, so there is not yet enough data or experience to fairly evaluate its historical performance.

Nibble's affiliation with IT Smart Finance Holding gives the platform access to a proven business model. Nibble is thus similar to the other two very successful P2P platforms viainvest and Twino.

This structure is very advantageous for investors due to the following fact: Nibble's parent company can exercise full control over the loan originators, which reduces the likelihood of loan originator defaults. For example, defaults of loan originator have already occurred on other P2P platforms.

Nibble is not yet supervised by the Estonian Financial Market Authority (FSA), but has applied for a license according to its statements. In our opinion, the platform will benefit from supervision, as many investors will be more likely to invest in a young platform that is regulated.

How did Nibble perform during the Corona crisis?

Basically, the platform went to market during the Corona crisis. While the timing was certainly not optimal, we would highlight positively that the platform has survived the Corona crisis to date. Also, no negative feedback from investors can be found on the internet.

Other platforms that follow a similar business model to Nibble have come through the crisis flawlessly. This can be explained by two points in particular:

  • The fact that loan originators are controlled by parent companies has prevented sudden bankruptcies of loan originators.
  • The focus on short-term consumer loans means that borrowers still have a chance to repay their loan even if they run into financial difficulties. Short-term consumer loans typically have short terms and are made with relatively low amounts.

Of course, the experience gained with similar platforms cannot be transferred 1:1 to Nibble, if only because the volume of loans brokered on Nibble is still relatively low. In any case, however, we would assume that the platform can also benefit from the aforementioned points within a larger crisis, or has already benefited, albeit at a low level.

Advantages and disadvantages of Nibble

Advantages

  • Nibble offers you three automatic investment strategies that allow you to invest in P2P loans easily. The platform follows a concept similar to Bondora or Robocash.
  • As with other platforms that mainly broker short-term loans, Nibble offers you a very attractive risk-reward ratio with an expected return of 14.5% per annum on average.
  • Especially in difficult market phases the focus on short-term loans has advantages.
  • As an investor, Nibble is completely free of charge.

Disadvantages

  • You cannot manually invest in loans.
  • There is no secondary market, but you have the possibility to get your money within 30 days.
  • Some loans are brokered with buy-back guarantees. The value of these guarantees ultimately depends on the creditworthiness of the loan originator. If a loan provider goes bankrupt, it will certainly not be able to fulfill its guarantees. The buy-back guarantees may give a false sense of security (only relevant for the "Classic" strategy).
  • If the platform or parent company goes bankrupt, you face a total loss of your invested capital.

Register as an investor with Nibble

You can easily register online as an investor on Nibble's website.

1. Register as a user on Nibble

To register as an investor on Nibble, click on "Create account" in the menu.

Nibble registration

In the first step you have to enter your salutation, first name, e-mail address and password. After you have provided the information and clicked "Continue", you will be logged in.

2. Start and complete verification

Nibble start verification

To complete your registration, you have to click on the button "Identify yourself" in your profile overview.

Nibble verification

After that, you have to fill in some personal information about yourself. Enter your first name, last name and phone number and follow the instructions.

3. Deposit money on your Nibble account

You can invest on Nibble without verifying your account.

You can deposit money on your Nibble account via bank transfer or credit card payment. Depositing via credit card has the advantage that the amount is credited to your account directly after you have initiated the payment. With a bank transfer, it can take between 1 and 3 days before the amount is credited to your account, but usually it doesn't take longer than 1 day.

4. Verify your bank account

If you wish to withdraw money from your account at Nibble in the future, you should verify your account. You have two ways to verify your bank account on Nibble:

  1. You have to prove that you are the official account holder. For example, you can use a screenshot from your last bank statement. It is important that the IBAN is visible on the statement, along with your first and last name. Then send the screenshot to support@nibble.finance.
  2. Alternatively, you can transfer funds from your bank account to your Nibble account, and Nibble will automatically verify your account.

Deposits and withdrawals on Nibble

If you want to deposit money to your account at Nibble, you have to deposit the money to a central account of Nibble. On Nibble you can start investing almost immediately if you deposit the amount by credit card. Otherwise, you can also deposit the amount via bank transfer.

Deposit money by credit card

Once logged in, click on the "Deposit the account" button in your profile overview. On the next page you should see "Top-up with VISA/MC card" selected.

Nibble deposit money via credit card - first step

The first time you make a deposit by credit card, you will be asked for your address and contact number. The next time you do it, the information will already be there.

Nibble deposit money via credit card - second step

After that, a new window will open, and you will be asked to make a deposit with your credit card.

Deposit money by bank transfer

If you want to deposit money by bank transfer, click the "Deposit the account" button first, just like when depositing by credit card.

If you want to deposit the money to your account, select the link "Bank transfer account replenishment". After that, Nibble will show you the information that you need to enter in your transfer to credit the amount to your account.

Nibble deposit via bank account

It is important that you state the purpose of your transfer exactly as it is displayed under "Purpose of payment". Otherwise, Nibble will not be able to credit your account.

Withdraw money

If you want to withdraw money from your Nibble account, click on the button "Withdraw money" in your profile overview. After that, you choose the amount you wish to withdraw and the amount will be credited to your bank account.

Invest in P2P loans on Nibble

On Nibble, investing as an investor is made as easy as possible.

You do not need to select P2P loans one by one. You can invest in P2P loans fully automatically with three predefined strategies.

Invest automatically

On Nibble you can choose between the strategies Classic, Balanced and Special.

Nibble Strategies

The strategies differ from each other mainly in their return and risk profiles. Investors who want to achieve higher returns have to accept longer investment periods and invest higher amounts.

Furthermore, it is important to mention that only in the Classic strategy loans are secured by buy-back guarantees.

Nibble classic Strategy

If you want to try Nibble as a platform for the first time, you should choose the Classic strategy with an investment period of one month and a small investment amount. If you are satisfied with the platform after one month, you can always increase the investment period and amount.

Reserve fund on Nibble

If you choose the Classic strategy, the P2P loans are backed by buy-back guarantees. Nibble can offer you this additional protection by creating a reserve fund from its parent company, IT Smart Finance Holding.

The reserve fund acts as an additional airbag that protects you from loan defaults.

The creation of a reserve fund is mandatory by law for P2P loans brokered within the Russian Federation. For Spanish loans, on the other hand, it is not. Nevertheless, the platform also offers a similar reserve fund for loans from Spain as it does for loans from Russia, although Nibble is not required to do so.

Is there a secondary market on Nibble?

There is no secondary market on Nibble where you can trade P2P loans with other investors.

But, if you need to get your money urgently, you can request that Nibble find another buyer for your P2P loans. If the platform cannot find another investor within 30 days, you will get your invested capital plus interest minus 3% fee.

What return can investors expect on Nibble?

On Nibble you can expect an average return of 14.5% per year. Nibble provides three investment strategies that offer a slightly lower or higher return depending on your risk profile.

What costs and fees does Nibble charge investors?

As an investor, Nibble is completely free of charge for you.

Can you automatically invest in P2P loans on Nibble?

On Nibble you can only invest automatically. You can choose from three predefined strategies.

Can you select individual loans on Nibble?

No, it is not possible to select and invest in individual loans on Nibble.

Risk of investing on Nibble

With P2P lending as an asset class, you need to be aware that P2P loans can default. This is not unique to Nibble, but applies to all other P2P platforms.

The default risk of P2P loans can be limited by investing in P2P loans with good to very good ratings. On Nibble, for example, you can achieve this by investing in the Classic strategy, in which the loans are also secured by buy-back guarantees.

In no case you can eliminate the risk of loan default entirely. You have to accept that there will always be some P2P loans that will default. These expected defaults are included in the expected return from the beginning.

How reputable is Nibble?

Nibble is a comparably young platform. Typically, we only rate new platforms as very reputable once they have been on the market for at least 3 years. 3 years is a good benchmark for when the platform risk has been largely minimized.

In this context, Nibble benefits from its affiliation with IT Smart Finance Holding, which was founded back in 2014. The holding company's annual reports are available online and show that the parent company was profitable in 2019 and 2020. Therefore, Nibble can be considered a reputable company that performs the role of a P2P platform within IT Smart Finance Holding.

We believe that Nibble and potential investors will benefit greatly from the regulation by the Estonian Financial Markets Authority, as it will sustain investor confidence in the platform. According to Nibble, it has applied for regulation by the Estonian Financial Markets Authority.

How does the buyback guarantee work on Nibble?

In the Classic Strategy, P2P loans are backed by buyback guarantees. On Nibble, P2P loans are repurchased by the parent company after 60 days if the borrowers have not met their obligations. As an investor, you get back your invested capital plus the guaranteed interest.

With buyback guarantees, we always point out that the value of a guarantee depends on the guarantor. If, for example, the parent company backs the wrong horse in the future that result in financial problems, the guarantees would not be worth much either.

As an investor, you should therefore not blindly rely on the buyback guarantees, even if they have a great benefit for you.

What are the default rates on Nibble?

Nibble does not publish default rates for P2P loans. On comparable platforms, such as Twino, default rates average around 5%.

Are the loans on Nibble protected by the deposit insurance?

No, loans on Nibble are not protected by deposit insurance such as the FDIC insurance. Investors bear the loan default risk entirely.

Paying taxes on income earned by P2P lending on Nibble

As a fairly young platform, Nibble does not provide you as an investor with a pre-made tax certificate. But, the platform provides you with all the information you need for your tax return. If you have any questions, it is best to contact Nibble's support directly.