Invitee Post from Diversified Bull on DoFinance visit

Dear Readers, I am honored to present you the first guest post on my blog, by a frequent reader, who visited DoFinance and might start his own project one day. Everything below is from the feather of diversified bull, and he has a special offer for you at the end of the post. Enjoy.

This is a review of DoFinance that I visited at the end of May 2019. I have been an active p2p investor for the past 8 years and this review is based on my experience of the platform: I currently have €35k invested with them and discussed with the management team when I visited their Riga office.

I would like to start by thanking p2phero: I discovered early a few platforms thanks to his valuable posts and his opinion is always relevant. We exchange on investment ideas from time to time and he kindly offered me to post on his blog the feedback of my visits to a few Latvian platforms earlier this year. I will start today with DoFinance, which have just answered my follow-up questions after my visit in May.

DoFinance has been at the top of what I would call my “third tier” platform list for a while. Third tier in terms of size,  less than 5,000 investors, and transparency, no financial statement and limited statistics.

However, we know that diversity is essential in the p2p landscape and it is always worth identifying a promising loan provider. The interview that the two DoFinance co-founders gave a while ago to the well-known blogger Lars Wrobbel aroused my interest. I decided to investigate further and, although the financials of Alfa Finance, the group behind the platform, are not public, the resumes of the founders can be found on LinkedIn and give some insight. Two brothers Janis and Viesturs Kulikovski funded the group together with Ingars Zagorskis. Viesturs Kulikovski spent 8 years at Swedbank Latvia where he was a member of their management board before his departure in 2001. He also has extensive experience in real estate investment. We can expect he has gone through some market downturns in his career and is more risk-aware than some 25-years old startupper sometimes running these companies nowadays. His brother Janis has an international business background, including running operations in Indonesia, which gives some credibility to their loan origination business in the country. They claim on their site nearly 700,000 registered customers in total as of May 2019 and 182 employees worldwide. This should give some depth to their loan offering and I was curious to learn more about them.

They were very quick to respond to my request for an appointment and I could meet them in person two weeks later. Their office is situated in a charming district of Riga, next to parks and museums, in a typical historic building of the city. Luckily, it was just one block away from the apartment I was staying in. When I arrived, I was greeted by the platform lead Henrijs Jansons who showed me their premises and then introduced me to Viesturs and Janis. We had a one-hour meeting and they openly answered all my questions. They gave me the impression of trying to grow their business in a controlled manner. They have a complete vision of the process: from the loan origination to the issuance and the distribution on the platform and up to the recovery of delinquent loans. Development in Indonesia seems to be an important step for them with hundreds of thousands of customers and a large locally based team in charge of the origination and the debt collection processes.

I provide here a summary of the main topics we discussed during the meeting, my questions and their answers that they fine-tuned in the follow up emails we exchanged:

The site provides not much recent information about Alfa Finance Group, statistics are from 2016 – 2017 in the About Us section. In the blog you recently mentioned an NPL rate of 6.18% but with little information about what it means, the perimeter and the cohort of loans measured. Would it be possible to provide more up to date and detailed information of the loan performances by region. Also any financial statement of Alfa Finance or its subsidiaries would be useful to assess the buyback guarantee (BBG).

DoF: We get this question quite often. We plan to publish shareholder report once every 6 months. And also we have renewed our website with the latest statistics and some other information.

Autoinvest does not reinvest interests which creates a cash drag if funds are not withdrawn or reinvested immediately. Investing the paid interests requires a manual intervention, do you think you can provide a simple solution to this in the future?

DoF: Yes, we are currently developing updated auto-autoinvest functionality with possibility to choose if funds are reinvested, collected to investors DoFinance profile or withdrawn to bank account (there will be minimal automatic payment limit of 25 Eur).

The Indonesian p2p market is still at an early stage of development. According to their financial authority OJK, non-performing loans and defaults in Indonesia’s P2P industry were 6.3 per cent of all loans in February, up from 2.4 per cent a year earlier. Are you facing the same deterioration in your portfolio?

DoF: Fortunately, we have quite the opposite case – the NPL’s have decreased since December and we see positive trend. We have managed this by integrating with automatic ID and docs verification + introduction of employer calls (that is a common practice in the banking sector in Indonesia) to verify the customer. Such verification later helps to collect overdue loans as well.

In addition to the specific nature of the Indonesian p2p market, we have to remember that loans are originally denominated in INR (Rupiah) while us, end investors, receive euros. In the extreme scenario of a depreciation of let’s say 30% of the Rupiah, are the positions hedged or are you confident the originator will be able to absorb the losses?

DoF: We use the services of remittance companies ( and to reduce currency risk. Additionally, this year there was an election of president and parliament (they held them at the same time for cost efficiency) and same president and leading parties won, thus the country should remain stable and no controversial laws or regulations are expected to be passed.

Are there some situations (like the one described above) where the Indonesian loans would suffer a loss and the BBG fail, while the Polish loans would continue to be protected? Are they both guaranteed under the same umbrella or are they independently protected i.e. can Credo data Indonesia default on the BBG while it is still maintained for Polish loans?

DoF: Since our group is only in 30 day loans and all Risk department is centralized here in HQ, we can monitor and adjust risks, scoring cards etc monthly and do not suffer unforeseen increase in NPL. Moreover, at the moment ~80% is shareholder capital and only 20% are available for investment in platform. Additionally, all our loan originators are licensed and closing one would not affect the other.

From left to right: Ieva, Project Coordinator, Henrijs, Platform Lead and Janis, Co-funder.

In summary, DoFinance is, in my opinion, a solid choice in the p2p space and should be on the list of any investor looking for diversification across multiple platforms and originators: from invoice financing to personal loans in Poland or Indonesia. The team is competent and committed to the long-term development of the platform.

Then, they clearly have room for improvement as far as transparency and disclosure are concerned. At this stage of their development though, I don’t have an issue with it, especially after meeting them. I invest mainly into their indonesian loans offering the highest rates. I am not yet convinced by the lower yielding alternatives but it is always nice to have the choice. I personally intend to grow my investments with them.If you are interested in investing with DoFinance, this is a good time to do so as they are just starting a new 1% cashback offer from 08/07 to 31/07/2019. This will apply to all your investments in the 9% and 11% programs for a term of 6 months or more. In addition, I can sponsor you for a VIP account and you will get an extra 1% yield on some of the auto-invest strategies. To enjoy the VIP status, follow the usual registration process with DoFinance and also submit your email to After a few days, you will receive confirmation that your DoFinance account has been upgraded.

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