Omaraha (www.omaraha.ee) is relatively small, but efficient p2p investment platform from Estonia. Omaraha operates in Estonia and Slovakia. Investment currency – Euro. Investor must be 21 years of age and be permanent resident in Estonia or in any other European Union country.
Omaraha isn’t huge in number of stuff, but I never had any problems with support, both by email or forum. I have never seen any announcement about Omaraha plans to become “Nr 1” or talks about becoming “pan-European” or “pan-world” investment platform. Instead of that Omaraha provide fast and stable interface to invest and monitor results.
Omaraha is quite old – over 3year – player in p2p lending. From what I know, company was founded by Estonian leasing company. As result, they had enough of data to build and tune own application scoring model.
The main beauty of Omaraha for me – a nice time/result ratio. I spend on average 5-10 minutes a week and it is enough to manage my investment and get over 14% return (risk adjusted – after bad debts).
Sure, I need so small amount of time because Omaraha don’t have Secondary Market (possibility to sell investments). Also, Omaraha do not provide any datasets for additional analyse and development of own investment strategy. In my case, it is not a big issue. When Omaraha is not so huge and gives limited number of investment opportunities, there is no economical logic for me to spend days to analyze data. Time spend on analyze will cost me more than additional value from such analyze.
Second “candy” – warranty fund. Each defaulted investment is purchased by Omaraha. Omaraha states that “Payments out of the warranty fund are a minimum of 60% of the balance of the loan and a maximum of 80%”. I have never checked, so I assume they pay 60% from defaulted loan. Warranty fund is not a temporary marketing program, it was active even before my start of investments there.
And last not least – reporting, scoring and auto investment mechanisms are clear and efficient – investment does not require a lot of time and number of defaults is not dramatic. Omaraha looks consistent in their movements and plans.
I have started at Omaraha August 2014. My first investment was 300€. I setup autoinvestment plan investing minimum amount (10€) per loan. Money were “employed” withing few weeks. I did my second deposit September 2014 and later about New year. Summer 2015 Omaraha provided possibility to invest in Slovakia. Investors have possibility to setup autoinvestment profile for both countries separately. There is warranty fund and local partner. I decided to test and invested 200€ into it.
When you work with Omaraha you often see two versions of interest. Loan interest is what goes to investor. Total interest is what borrower pay (that includes fees to Omaraha, payments to warranty fund etc). I always look on Loan interest and I am not interested to count Omaraha’s part.
I had interesting case, when in the middle of last year my autoinvestment profile stop giving loans. Reason was very simple – I forgot that all investment terms have own expiration date (Valid until). After I resubmitted, all works fine.
Ok, you will ask what is result of investments today?
Omaraha is telling me
When I calculate risk adjusted return myself, I am getting such numbers:
|Risk&Tax Adj.||Risk Adj|
|2015-10-01||13.0 %||16.0 %|
|2015-11-18||13.7 %||16.7 %|
To calculate this return I used methodology described in Tracking result of investments.
Current Value of Portfolio calculated as
[Investment account Estonia] + [Investment account Slovakia] + [Portfolio balance]- 20% x [Overdue Payment Yellow] – 40% x [Overdue Payment Red]
My result is affected by my decision to invest in Slovakia. From 22 loan I have 7 green, 5 late, 8 defaulted and 2 sold to warranty fund (recovered).
Omaraha honestly show me negative result of investments in Slovakia. I am moving all my money from Slovakia account to invest to Estonia. I do not have too big portfolio at Omaraha, so it will be enough for me to invest in Estonia only.
What I miss at Omaraha? I like to see minimal Secondary Market and some information about financial result of Omaraha (as company). What worry me at Omaraha? Not a lot, but I have in mind that Omaraha is relatively small player without Venture Capital. Presence of Venture Capital may give me more guaranty in regards of governance, financial stability and long-term future of company.
Conclusion: Omaraha is not my main investment platform as I aim on a bit bigger return from my main investments (>20% XIRR). But I will continue to invest there and I will not remove any investments until auto-investment profile works, my risk adjusted return stay over 13% and I need to spend 5-10 minutes per week to manage my investments there. If you are passive investor or looking alternatives to invest part of money I recommend to look at Omaraha as safe and efficient platform to invest 10-30% of your euro portfolio.
Have a nice investments!
p.s. I am just starting to write blog. Therefore I will be very glad if you will leave some comments or evaluation of articles (I may not publish if you will note that). Thank you in advance!