Building your knowledge on the rewards and risks of investing on liwwa’s marketplace will increase your chances of earning higher returns while reducing your risks.
What is liwwa’s marketplace?
It is a platform that brings together business owners who are looking for loans with investors who want to invest in these loans.
How does investing on liwwa’s marketplace work?
The process is simple and straightforward:
- Investors can start by signing up, where they will be asked to enter some basic information and create a login ID. Once completed, investors are able to invest up to $1,000.
- If investors wish to invest more than $1,000, they need to complete the Know-Your Customer (KYC) form and submit required documents for due diligence purposes.
- Once approved, investors can add funds to their liwwa account via credit card or a wire transfer from their bank account.
- Investors can also browse available campaigns and invest in the ones that meet their risk appetite.
What are the advantages of investing on liwwa’s marketplace?
- New asset class: SME loans are a distinct asset class that provides added diversification as part of your overall investment portfolio.
- High returns: P2P lending generally provides investors’ with relatively higher returns compared to various other investments. liwwa’s historical returns have ranged from 9.18% to 16.12%*.
- Risk diversification: Investors can diversify their risks by investing in different loans rather than investing in a single loan.
- Flexibility: Investors can choose whether to reinvest their returns or withdraw their repayments.
- Convenient: There is no minimum investment amount required for investors to get started. That provides them with the opportunity to test the water before they dive in.
What are the main risks and mitigation strategies?
The primary risk that investors could face is default risk, which is the risk that a borrower will be unable to make the contractual payments.
To mitigate this risk, investors are advised to diversify by investing in a large number of loans, spread across different risk categories and across various sectors.
liwwa’s credit approval process and credit risk management also play an important role in hosting established and creditworthy campaigns, therefore limiting default risk.
*The historical return range is based on the annualized Internal Rate of Return (IRR) of liwwa investors' actual portfolios, taking into account late payments, defaults, write-offs, recoveries and service fees for all loans originated since 2013. The range represents the 15th to 85th percentile of returns for investors whose accounts have been open for at least 12 months. Individual results may vary. Historical performance is no guarantee of future returns, and the historical return range is not intended as investment advice or as a guarantee of the performance of investment opportunities.