THE FUTURE OF FINANCE IS PEER TO PEER

As traditional forms of saving and investment gradually lose the trust of customers due to inflation and liquidity concerns, the rapidly evolving fintech sector is ushering in a new era of smart investment. P2P lending is a crucial part of this shift. Venelin Todorov, cofounder, business development and product owner of Virr and Cashlend, is bringing it to Bulgaria.

Why is P2P lending a good alternative to traditional investment methods?

Over 90% of Bulgarians invest their savings in bank deposits or real estate to protect themselves against inflation. However, both of these investment types have specific structural weaknesses.

Real estate is typically low-liquidity and relatively low-yield. The transaction costs are high, and not every investor can meet the equity requirements of financing institutions. Real estate investors often end up with an asset that rarely generates over 3% annual return, while selling it in case of need may take over a year. Thus, returns are often below annual inflation.

Bank deposits, while more liquid, usually generate returns of less than 1% per year. Their main advantage is the guarantee scheme for deposits up to €100,000. But by keeping their savings in banks, Bulgarians are losing purchasing power. Cumulative inflation between September 2020 and September 2025 exceeded 41%.

Against this backdrop, P2P lending investments offer significant advantages, including low entry barriers, high liquidity, short investment horizons, a highly digitalized experience, and potential returns reaching 15-16% annually.

What is Virr.io?

Virr.io is a new P2P lending marketplace platform built on our long-standing experience with Cashlend, but designed as a separate brand. It is for Bulgarian non-bank financial institutions, while being open not only to Bulgarian investors but also to EU citizens.

Our vision is to develop Virr.io as a financial "super app" that goes beyond investments and offers additional financial services. Users increasingly prefer to manage all their financial assets through a single application. The platform will evolve in this direction.

What type of investors is Virr.io designed for?

Virr.io is designed for active investors who want their savings to work for them and who proactively seek new investment opportunities and alternatives to real estate, bank deposits, and exchange-traded funds. These are entrepreneurs, professionals, and experienced investors with strong financial literacy, who seek attractive returns and are comfortable accepting a reasonable level of risk.

They clearly understand that investing through our platform is not a shortcut to quick wealth, but requires a disciplined and long-term approach.

Currently, the platform is only for private investors from Bulgaria and the EU. We are considering allowing legal entities to register as well, as companies often hold significant idle capital and are also looking for efficient ways to invest it.

Which financial institutions do you partner with?

We currently partner with two Bulgarian non-bank financial institutions licensed by the Bulgarian National Bank: Victoria111 and Teru. Both have long-standing experience in consumer lending and operate with stable business models and processes. Their activities include micro-loans, car leasing, and mortgage lending, and both operate through physical branch networks across the country.

What are the risks of this type of investment?

Like any investment, P2P lending carries risks. The primary one is credit risk – the possibility that a loan may be repaid late or not repaid in full. There is also macroeconomic risk, driven by economic shocks or force majeure events, such as the Covid-19 pandemic. And there is always a possibility that a platform may cease operations.

These risks can be managed. Investors should diversify across different asset classes, platforms, loan originators, and individual loans. As a general rule, I would advise not investing more than 10% of one's net worth in a single platform or investment channel.

What about the advantages?

Investors in P2P lending platforms can achieve annual returns in the range of 15-20% and, with prudent portfolio management, reduce risk to a relatively low level.

Virr.io offers diversification across multiple companies, short investment terms ranging from one to 12 months, and a highly liquid secondary market that allows investors to sell their receivables quickly to other users on the platform. Loan originators can also repurchase portfolios, further enhancing liquidity.

Through these mechanisms, we address most of the inherent risks and provide investors with a strong balance between high returns and reduced risk.

What is your advice to someone who is investing for the first time with Virr.io?

First, I would advise investors not to allocate more than 10% of their savings to Virr.io – or to any single investment platform.

Second, they should start small, with €50 for example, to test the platform and determine whether this type of investment suits them. Virr.io allows investments starting from €10, and with €50, an investor can already diversify risk by allocating funds across five different loans.

Third, if the funds are not immediately needed, I would recommend reinvesting the returns to benefit from the power of compound interest.

My main recommendation is always to start prudently – with an amount that allows the investor to understand the platform and the model without unnecessary stress. Diversification is essential, as is carefully reviewing the information related to each investment.

Most importantly, P2P investments are not short-term speculation, but part of a long-term strategy. When approached with patience and discipline, they can be a very strong addition to a modern investment portfolio.

www.cashlend.bg
virr.io