This can be seen as the second serious step in the financial sector after the emergence of e-banks, after all, 20 years ago, few people thought about managing accounts, making transfers or paying utility bills without leaving home, let alone investing without going to a branch of a bank or other financial institution.
With the development of financial services technology, a method has been achieved that allows thousands of people to pool together huge sums and thus earn from projects that were previously only available to large investors investing at least a few hundred thousand euros.
Profitus marketing manager Monika Lenčickaitė explained what benefits SFP provides to investors and why it is easier to start trusting your money and earning returns from investing.
“In Lithuania, the SFP breakthrough happened 6-8 years ago, according to the Bank of Lithuania, crowdfunding platforms financed a total of 8.5 million euros in 2018, and last year the amount financed already exceeded 230 million euros. What was the need for such a service, we can also see from how the amounts raised through “Profitus” grew. In the first year, we raised 1.49 million. euros, and last year we raised 3.1 million for one project in just 5 hours. In total, more than 160 million euros have already been raised throughout the year, and investors have earned 9.7 million euros,” explained M. Lenčickaitė.
The sudden popularity of crowdfunding has also shown people’s willingness to put their savings to work. Only before SFP, it required both more effort and incomparably more knowledge. The simplicity of investing through SFP has allowed thousands of people to start investing, to diversify their investments, allocating savings not only to shares, real estate or bonds, but also to SFP. The uniqueness of this type of investment is that experienced professional investors and beginners cooperate with each other.
Photo of representatives/Profitus marketing manager Monika Lenčickaitė.
Investment analysis is carried out by experts
This model is more useful and attractive for small investors, because it is simple, reliable, convenient, and 100 euros is enough to start investing, you don’t need to have thousands. This type is easy to use – if you use e-banking services, then you can easily use SFP as well, because everything is even simpler.
It’s also easy to choose what to invest in with just a few clicks. It’s convenient, because quick transactions both for depositing and withdrawing money, it’s also convenient to monitor the “path” of investments and constantly receive information about the interest paid. And the most important thing is that you don’t need any physical contacts, you don’t even need to be in Lithuania, you can invest and withdraw money from anywhere in the world, it’s important to have access to the Internet.
“This is a reliable way to invest, because the reliability of real estate projects is assessed by our experts with many years of experience in the real estate sector, as well as project developers requesting financing, their capabilities and experience. The investor does not need to analyze himself whether the project is viable, whether, for example, the houses being built or remodeled are in good areas, whether anyone will buy them. All this is done by our experts,” said the representative of “Profitus”.
Additional benefits can also be gained from using the platforms, such as participating in events about investing and finance. In addition to recruiting savings, you can also learn a lot of useful information about investments.
Profitus is currently preparing for the biggest investor event in Lithuania, the annual conference “Financial Freedom Forum”. Last year, more than 20 speakers, investment and finance experts took part in it, watched the speeches, and about a thousand people participated in the discussions and seminars.
It’s easy to choose what to invest in with just a few clicks.
Due to its convenience and reliability, even larger investors are increasingly turning to SFP, whose trust in the platforms has increased significantly in recent years. Experienced and professional investors have a very good sense of the professionalism and ability to work in others.
“The fact that there are large investors constantly investing on the platform, whose active portfolios are only growing, shows that we have earned a high level of trust. It grows together with the development of our services, because it is an opportunity to diversify by investing in the financing and lending of real estate projects not only in Lithuania, but also abroad. We have the most supply in Latvia, but we are increasing production in Estonia and Spain”, said M. Lenčickaitė.
The biggest benefit of SFP is synergy
A beginner investor, seeing that experienced investors investing in the same platform and depositing tens or hundreds of thousands of euros, considers the platform even more reliable.
Another benefit is that the more investors there are, the faster projects are financed. The dynamics of financing can be determined both by a large investor who has contributed a significant amount, and by many smaller investors. Their differences are also the strength of the community as a whole, as relying solely on large investors would mean the departure of anyone from the platform would be significant to the bottom line.
The interviewer notes that a small investor is not necessarily inexperienced. Some invest small amounts, but not because they don’t want to invest more. It’s just that a person’s income is lower, but this does not limit his desire to make sure that available savings grow or are protected from inflation:
“We try to keep the essence of crowdfunding, because SFP means a community of a large number of investors, the English term “crowdfunding” describes it more accurately. However, by maintaining the principle of crowdfunding, the investor community is much stronger, where both experienced and large, small and novice investors invest together. Currently, investors with an active portfolio of up to 3 thousand euros, we have more than 7 thousand. 3 – 10 thousand More than 1.5 thousand investors have a portfolio of EUR 50 thousand. euros, we have almost 200 investors. We also have several individuals with an active portfolio of almost one million euros. The business also finds it reliable and convenient to invest available free company funds through SFP and thus increase their earnings.”
The investment strategies chosen by large and small investors are similar, and this is the additional benefit for investors. By participating in events organized by the company, communicating with each other, and seeing how experienced investors invest, small investors also choose similar models and improve their investment strategies.
Žygymantas Gedvila/BNS photo. Money
Their essence is smart diversification of investments, when investments are not “crushed” too finely, but also not staggered to such an extent that if any project starts to be delayed, it does not become a challenge due to the invested amount.
According to the Profitus representative, people, especially last year when there was high inflation, wanted to invest in higher-return but riskier projects. They did this by dividing the available amounts more often than before, because it is safer that way. Therefore, the average amount invested in one project decreased, but the average active portfolio of investors increased. And it grows every year.
“Profitus” in 2022 became the market leader in terms of the total amount raised during the year, last year the leadership was also strengthened in terms of the growth of active investors. This year, it is intended to maintain similar growth indicators, this is due to the confidence shown by investors and the expectation of working with the market leader.
