Starting from January 1, 2020, there will be a new structure for investments in part of loans from Kazakhstan. This new structure will be implemented due to changes to the current legislation and licensing of consumer lenders in Kazakhstan, hence, limiting the assignment possibilities of consumer loan receivables.
How will the new process work?
Mintos investors will still have the opportunity to invest in loans from Kazakhstan, by investing in loans issued by Mintos Finance SIA (Mintos Group Company) to one of the Kazakhstan loan originators.
The repayment of loans issued by Mintos Finance to the loan originator will be pegged to the repayment of a respective loan issued by the loan originator to the borrower. Mintos Finance loans will be directly secured by a pledge on claims arising from the loan originator’s loans issued to borrowers.
In the case when the borrower’s loan becomes delinquent for 60 days or more, the loan originator will ensure the buyback of the claims on this loan from investors.
Please take into account that the new structure will be applicable to Kredit24, LF Tech and Sun Finance Kazakhstan. The existing structure of ID Finance Kazakhstan already complies with the upcoming changes in the legislation, thus no changes for this loan originator.
How does this affect existing investments and loans on the Mintos marketplace?
Investors making investments according to the new structure will still have exposure to the loans issued in Kazakhstan. Previously, investors had a direct claim against the final borrower. In the new scenario, investors will have a claim against the loan issued by Mintos Finance to the respective loan originator. Loans will be secured by a pledge on claims arising from loan originator’s loans issued to borrowers.
Because the investments made will still be pegged to the loan performance of the underlying borrower’s loans, current Auto Invest functions for investing in loans issued in Kazakhstan will remain valid for loans placed on the marketplace under the new structure. If the change in investment structure affects your investment preferences, please be sure to adjust your Auto Invest settings accordingly.
