I would like to start this with utmost apology for Grupeer’s failure to communicate with you during this volatile time.
Grupeer’s business model was fit for fast growth. However, this was the first time that we, like many companies around the world, found ourselves in such a situation when a disease has such impact on all aspects of life and business. In our case several aspects collided – market uncertainty caused by the collapse of two Estonian P2P platforms, which why banks strengthened their AML requirements for such business, including us. Also, COVID-19 caused foreign currency (particularly, Russian and Belarus Rouble) fluctuations and internal protection measures in some regions. We were not ready for that.
Since March our focus has been to find a solution for the situation, and we have already taken several steps. Firstly, we have cut our administrative costs – let go employees, closed our office, cut all marketing and other expenses not related to the core business operations. Some internal functions we have substituted with outsource to maintain flexibility and lower cost base.
Secondly, as of the end of April we began a portfolio performance audit to determine a viable action plan based in the interests of investors. Performance audit includes – risk analyses, finance audit, AML improvement, loan originator financial health check & debt control, discussing recovery options with those who have issues. In June we will announce an action plan for repayment of investments.
Thirdly, as you may know unfortunately, our failure to provide timely and sufficient communication to our investors, caused chaos and that caused an avalanche, which served as one the reasons for banks to freeze our accounts. Now, it prevents us from ensuring any payments to the investors or receiving funds from loan originators. We are communicating with banks directly and trying to resolve this situation as soon as possible, but not later than June.
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However, I will kindly inform you that due to our staff reductions some processes, including customer communication could be slower.
Interests of our investors, and productive collaboration with loan originators is at the core of Grupeer’s business. Because of that our plan was to introduce several measures for stabilization such as become a licensed investment broker company, launch secondary market and risk accruals, which we did not manage to do before the crisis started. In perspective, it would allow us to leverage this situation. We try to work on these plans as well, while tackling current issues at hand.
Our main priority is to recover from the crisis in the best way possible for our current investors. We are focusing on our existing liabilities before taking on new ones, which is why we do not accept new investments at the time.
We believe that our previous results show our ability to carry out our promises. Our investor base was stable – 42% of all the registered investors made more than 1 investment, and 33% made more than one deposit. From 2017 till 2020 in total we have repaid 32M euros, which includes 4.4M euros of interest payments.
We are doing our utmost so we could carry out our liabilities towards our investors.