Mintos Investor Q&A: Funds in recovery, March 2023

The lending companies are either holding repayments from borrowers for loans that investors on Mintos have invested in as cash, or using them to issue new loans, until they are able to transfer the money to Mintos. This depends on the lending company, and in many cases in our understanding would be a combination of both.

Can you update us about locked funds from Russian territory? When will these funds be unlocked?

Unfortunately, in the given circumstances with significant uncertainty lying ahead in relation to Russia, it’s impossible to confirm that 100% recovery of all funds can be achieved. The result may also vary by lending company. It would depend on the size of the portfolio funded and the company’s ability to get special permission for making larger payments. Nevertheless, we currently believe that the majority of the funds should be recoverable. There is still a high degree of uncertainty due to the political situation. Mintos is also not receiving the full loan level data from the Russian lending companies. Any repayments received so far and in the future are being distributed proportionally to all investors with relevant exposure.

Check out our blog Russia – Ukraine war updates where we post regular news for more information.

Why did Mintos wait 5 months to inform investors that Kviku was not cooperating? How will Mintos improve communication?

We always try to communicate to investors as transparently and as fast as possible. When it comes to recovering funds for investors, disclosing too much information can hurt these recoveries. Therefore, given that there were ongoing discussions about signing agreements with other lending companies from Russia, we were not able to disclose all the information about Kviku at that moment.

Please explain the legal possibilities to force Kviku to adhere to its contract? Do they have operations outside of Russia?

We can proceed to courts in Russia, which is one of the options considered. However, it should be taken into account that EU countries are considered “unfriendly” countries by Russia, therefore there might be some limitations to successfully litigate in Russia.

As far as we understand, the owners of Kviku have operations outside of Russia, including in Europe (also P2P lending on Kviku.finance). However, these are not legally in the same group as the Russian lending company we cooperated with. Before the war, we could legally litigate either in Russia or in Latvia. However, litigation in Latvia is no longer possible because decisions by a Latvian court cannot be enforced in Russia due to the Russian war in Ukraine.

From your news, I understand that Kviku has unilaterally decided to repay all loans in RUB (and not in EUR). However, my Kviku loans in RUB are also withheld, why?

Kviku has unilaterally (and per our understanding illegally) stated that the repayment will be done on 31 December 2026. We don’t agree with the position of Kviku. Loans in RUB are being withheld by Kviku until 2026 regardless of currency.

What is the expectation of recovering funds from Kviku considering the position of the company?

Kviku as a company should be able to repay all debts owed to investors. Given the current restrictions imposed on payments, it might take a long time to make these payments (for example, 10 million RUB per month), or could be repaid earlier with some cut on the amount if approvals are received. However, currently the key issue is their unwillingness to make payments. At the moment, the recovery situation is quite uncertain. However, after successful implementation of debt recovery activities, we could recover up to 50-70% of the amounts due from Kviku after costs.

Is Creditter paying back its debt and money withheld due to sanctions? What is the situation?

Creditter’s bank approved the amendments to the agreements. The lending company transferred RUB 10 million in EUR to us, which is the monthly limit imposed by the Central Bank of Russia. The money was distributed to investors on 2 March 2023. Creditter also made another payment at end of March.

Why didn’t I receive any January payment from Lime Zaim?

The situation with payment service providers is changing rapidly due to external circumstances. The January 2023 payment was initially declined by the service provider, as it stopped accepting RUB. The service provider has now informed us that it’s able to receive RUB again, and the lending company will initiate the transfer once more.