Any investment involves a risk, so before becoming an investor, please evaluate your risk tolerance carefully. Esketit allows virtually anyone who is over 18 years old to become an investor. So, we advise all our clients to get familiar with the risks associated with investing in personal loans.
On our side, we have ensured that all security that is available to P2P investors are present on the Esketit Platform. We have introduced the security measures that cover most risks that the investors face - the default, platform, and liquidity risks.
With investing, it's essential to understand that even though we have taken care of all critical risks associated with it, you should still be aware of them. Some risk is normal and exists with every type of investment, including the stock market, not just peer-to-peer investments. Understanding the risk types and thoroughly following a few easy tips can help you on your way towards becoming a prosperous investor.
Investing is a skill you can exercise; with every new investment, you'll learn all the nooks and crannies and recognize what works for you.
We here at Esketit take risks very seriously. Because of our transparency policy, we also want to be very open about the risks associated with the investment market. And we also provide multiple tools and features to make investing with us as pleasant and productive as it can be. Below, you will find information about the most common risks of P2P lending and how to manage them.
Credit default risk
This means the end borrower (consumer) defaults on their loan payments
Loan originators provide a buyback obligation in case the consumer defaults on the loan
Founders of Esketit have 10+ years of experience in Credit scoring and understand whom to issue loans safely
On Esketit, loan originators follow the 'skin in the game' principle, meaning they keep a part of each loan in their books
Our Founders own the loan originators. Thus, Esketit doesn't have to evaluate any of our loan originators. The Founders have also invested in the equity in all the loan originator companies
Loan originator risk
The risk of a loan originator going out of business or experiencing problems. In this case, the BuyBack obligation is also at risk
Some of our loan originators provide a group guarantee: In case the loan originator cannot fulfill its BuyBack obligation towards investors, the owner of the loan originator (the Group) steps in to fulfill the BuyBack obligation
It's always a good idea to diversify your investment to limit your exposure. With Esketit, it's easy for you to diversify across loan originators
Even if the loan originator goes out of business, you still own claim rights and may be able to get your money back (depending on loan structure)
The risk of an adverse change in legislation affecting the Loan Originator or Esketit
All loan originator companies are strictly regulated by local consumer lending regulation: Central banks and consumer protection acts. Every Loan Originator on Esketit is licensed in the local jurisdiction