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August 28, 2020
Following the recent news on Finko UA (Dinero and UkrPozyka) wind-down, we share an update as the negotiations about the wind-down conditions have continued.
The quality of Ukrpozyka’s and Dinero’s portfolios has shrunk due to the borrowers’ low repayment rate and the increased volumes of loans in the debt collection process that slowed down significantly during the ongoing pandemic related restrictions in Ukraine.
According to information provided by both lending companies on the changes of the loan portfolio of Dinero and UkrPozyka from 01.03.2020 to 01.08.2020, the Dinero total portfolio decreased by 7% or 2.2 million EUR, while non-overdue portfolio decreased by 63% or 7.9 million EUR. Ukrpozyka’s total portfolio decreased by 8% or 1 million EUR, while non-overdue portfolio decreased by 69% or 4.5 million EUR. Repayments (principal plus interest) for Dinero have decreased 8 times, while Ukrpozyka’s repayments decreased 10 times.
As a result, it has been agreed that Dinero and UkrPozyka repurchase all outstanding loans from the investors. This will result in all outstanding investments of Dinero and UkrPozyka to be allocated as funds in recovery. This will be portrayed in each loan status within the next few days.
Finko UA continues to service borrowers’ repayments and debt collections. According to Finko UA, these collections will cover the due amount in recovery with investors on Mintos by July 2021. Finko will make monthly payments which will be directed to investors’ accounts with investments in the loans issued by Dinero and UkrPozyka. These payments will be distributed to the investors the way pending payments do.
Interest on pending payments will accrue and will be payable after principal and accrued interest on principal is paid down in full. Volumes and frequency of pending payment interest yet to be covered will heavily depend on the borrowers’ repayment behaviour which at this time is difficult to predict, as it, in turn, depends on the overall economic situation in Ukraine in months to come.
Both lending companies have a parent company guarantee from EAG Finance. Considering the implications mentioned above, details of both are still being evaluated.
Along with the wind-down of Finko UA, Finko Group is no longer active on Mintos marketplace. Operational entities of Finko Group remain active in the markets of their operation for servicing already issued loans, yet not issuing new loans and not listing them on Mintos for investing.
August 21, 2020
Lending companies Dinero and UkrPozyka, both part of the Finko group and portrayed as Finko UA on Mintos, have decided to initiate a wind-down of their businesses due to the current economic situation in Ukraine. Effective immediately, loans of both lending companies are suspended from the Primary and Secondary Markets on Mintos.
Following the National Bank of Ukraine’s earlier decision in March 2020 to not allow lenders to calculate penalties for borrowers that are late with their payments, as well as the continued pandemic related restrictions in Ukraine, the process of collecting borrowers’ repayments and recovering debt has significantly stalled. This had a considerable impact on both lending companies’ operations, and the management teams faced a very challenging situation.
Restrictions on penalties and fees will likely be extended into September 2020, which would have an even greater impact on both lending companies’ borrowers’ repayment discipline. And due to the current situation of the global finance industry, funding options for Dinero and UkrPozyka are limited, slowing down their potential development possibilities.
Considering all of the above, the management teams of both companies and the management of the Finko group have come to a decision to wind down the businesses in Ukraine. Both companies will continue collecting the repayments from borrowers and transferring them to Mintos investors. At this moment, the management teams of both companies have expressed that outstanding investment will be covered in full by the end of July 2021.
The Mintos Risk Rating for Dinero and UkrPozyka remains the same, with an indication that both companies are suspended as of today.
About Dinero and UkrPozyka
Dinero and UkrPozyka are consumer finance brands in Ukraine and part of the Finko group. Dinero and UkrPozyka loans on the Mintos marketplace are portrayed as Finko UA. The current outstanding portfolio on Mintos is € 10 195 833 for Dinero and € 5 230 219 for UkrPozyka. There are 58,551 investors with active investments in Dinero loans with an average investment of € 174 per investor, and 48,225 investors with active investments in UkrPozyka loans with an average investment of € 108 per investor.
Suspension of a particular lending company occurs when Mintos intervenes in the Market – Primary, Secondary, or both – to stop investing due to concerns about a company’s operations. Once suspended, new investments cannot occur until the suspension is lifted or lapses. When both Markets are suspended, this is intended to protect investors’ interests by preventing investments in new loans on the Primary Market, or the sale of existing loans issued by the affected lending company on the Secondary Market.