P2P lending carries real risk. Learn about Hive5’s legal status, its key safeguards, and what happens if Hive5 or a Loan Originator becomes insolvent.
P2P lending is not risk-free. It’s an investment, not a bank deposit, so your capital is at risk. Bank deposits in the EU are generally protected by a deposit guarantee scheme up to €100,000 per depositor, per bank, but investments in P2P loans are not.
P2P lending can offer higher potential returns, but borrowers may repay late or not at all, and the Loan Originators that issue the loans may run into financial difficulty. Once you understand these risks, you can look at how Hive5 works to manage them.
This assessment reflects how Hive5 works: investors acquire claim rights to already-issued loans rather than traditional financial instruments such as shares or fund units. Visit the About Us page for details of our operating model.
Hive5 doesn’t operate under a financial services licence. Based on the current legal assessment of its business model, it does not require authorisation as an ECSP crowdfunding service provider, MiFID investment firm, payment institution, or e-money institution.
Read about our operating model on the About Us pageUninvested funds transferred to your Hive5 account are held in a separate account, segregated from Hive5’s own funds. This keeps investor money distinct from the platform’s operating funds, but it is not covered by a deposit guarantee scheme.
Clear financial reporting is a key part of corporate accountability. Hive Finance Group publishes annual financial statements that are audited by independent auditors, so investors can review the group’s balance sheet and financial position. You can find the most recent PDF on this site.
Eligible loans may include a Buyback Obligation after 60 days overdue. In this case, the Loan Originator is contractually obliged to repurchase the investor’s claim rights. It is an obligation of the relevant Loan Originator and depends on its ability to perform.
Under the Buyback Obligation, the investor receives the outstanding principal together with the interest accrued during the delay period, as set out in the Investment Agreement. You can see how buyback timing and payment delays affect your overall portfolio performance in our complete guide to returns and NAR.
P2P lending involves credit risk. Hive5 uses contractual and operational safeguards designed to reduce certain risks and provide transparency, but they do not remove the risk of loss.
Is peer-to-peer lending safe with Hive5? One of the best ways to understand the risks is to look at what might happen if something goes wrong.
Hive5 acts as an intermediary in the sale of claim rights to loans between investors and Loan Originators. If Hive5 became insolvent, existing legal relationships would continue under the applicable agreements.
Hive5 would provide investors with the transaction information needed to keep accurate records. No new Investment Agreements would be signed, and available funds would be returned in line with the applicable agreements and law.
In this case, the procedure set out in the applicable Investment Agreement between the Loan Originator, the investor, and Hive5 would apply. The Loan Originator’s financial situation may affect its ability to honour the Buyback Obligation or meet other payment obligations.
The risk that a borrower fails to make scheduled repayments or defaults.
The risk that the Loan Originator that placed the loan on the marketplace experiences financial distress or becomes insolvent.
The risk that the Loan Originator is unable to honour its contractual obligation to buy back eligible loans once they are 60 days overdue.
The risk that you cannot exit an investment quickly or convert claim rights into cash before the loan’s maturity date.
The risk that technical disruptions, system downtime, or administrative failures affect the services you receive.
The risk that legal or regulatory changes, or economic instability, in the countries where Loan Originators operate have an adverse effect on your investments.
The risk that comes from placing too much of your capital with a single loan, Loan Originator, or geographic market.
Is Hive5 safe to use? No investment is free of risk. Instead, Hive5 aims to reduce risk and manage potential losses through structural safeguards designed to limit the impact of certain risks on your portfolio.
Each Loan Originator assesses borrowers using its own credit and risk procedures. These may include identity, affordability, and other checks, depending on the product and market.
Spreading your capital across different Loan Originators, countries, and loan types can reduce concentration risk, although it cannot eliminate investment risk. Our article on diversification gives more guidance on this.
Eligible loans may include an obligation for the Loan Originator to buy back the claim rights once repayments are 60 days overdue. This means investors don’t rely solely on the borrower’s ability to repay, but the buyback depends on the Loan Originator’s ability to perform.
Uninvested funds are held in a separate account, segregated from Hive5’s own funds.
We value honest investor feedback, and we monitor third-party review platforms where users share their experiences of Hive5. We encourage all prospective investors to read a wide range of independent reviews and community discussions as part of their due diligence. Doing this for any platform can also help you recognise the warning signs of a P2P lending scam.
Protecting your capital means taking care before you commit any funds. The following steps form part of a responsible investing strategy.
Rather than relying on marketing summaries, read the Investment Agreement, the User Agreement, and all other relevant information on the platform.
Make sure you understand how the 60-day trigger for overdue repayments works. The Buyback Obligation is a contractual commitment by the Loan Originator, and it depends on the Loan Originator’s ability to pay.
Review Hive Finance Group’s independently audited annual financial statements and, where available, the financial reports of the Loan Originators you invest with.
With a minimum investment of €10, you can start with a small amount and see whether the platform meets your expectations.
P2P lending is not risk-free. Unlike bank deposits, P2P investments are not covered by deposit guarantee schemes, and you could lose some or all of your capital. Borrowers may repay late or default, and Loan Originators may be unable to meet their obligations. Diversification can reduce concentration risk, but it cannot eliminate investment risk.
Hive5 doesn’t operate under a financial services licence. Based on the current legal assessment of its business model, it does not require authorisation as an ECSP crowdfunding service provider, MiFID investment firm, payment institution, or e-money institution.
Hive5 acts as an intermediary in the sale of claim rights between investors and Loan Originators. If Hive5 became insolvent, existing investments would continue to be governed by the applicable agreements. Hive5 would provide investors with information on transactions concluded through the platform, no new Investment Agreements would be concluded, and available funds would be returned as provided by the applicable agreements and law.
The procedure set out in the applicable Investment Agreement between the Loan Originator, the investor and Hive5 applies. The Loan Originator’s ability to meet payment obligations, including any Buyback Obligation, may be affected.
Uninvested funds transferred to your Hive5 account are held in a separate account, segregated from Hive5’s own funds. This keeps investor money distinct from the platform’s operating funds, but it is not covered by a deposit guarantee scheme.
Investing in loan receivables involves risk, and you may lose some or all of your invested capital. Key risks include borrower credit risk, Loan Originator risk, Buyback Obligation risk, liquidity risk, operational and platform risk, country and regulatory risk, and concentration risk. Diversification can reduce concentration risk but cannot eliminate investment risk.
We value honest investor feedback and monitor third-party review platforms where users share their experiences of Hive5. We encourage prospective investors to read a wide range of independent reviews and community discussions as part of their due diligence.
Hive5 Help Centre
How do I diversify my investments?
Diversification means spreading investments across multiple exposures rather than concentrating all funds in a small number of investments.
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Hive5 investments are not bank deposits and are not covered by a deposit guarantee or investor compensation scheme.
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See who issues and services the underlying loans, how each business operates and which contractual obligations apply before you invest.
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Start investingInvesting in loans involves risk, including the risk of partial or total loss of your invested funds.
