News and plans for DoFinance nearest future
We can surely say that the year 2021 and the first quarter in 2022 was not devoid of challenges, professional undertakings, and innovation here at DoFinance. Yet again we provide information and insights in our consequent blog update. This new update provides some fresh ideas on new potential investment opportunities that we were working on as well as on the new products and news on loan retrieval in Poland. The blog update is something we had a long time coming. Please always remember the temporal absence of an information update does not preclude action and progress in the company – quite the opposite – we, the DoFinance, were busy creating our new investment product and working with the regulator to obtain the investment brokerage license. DoFinance is to become a regulated entity in the next 2-3 months, therefore becoming open to new growth opportunities whilst becoming more secure than ever. But enough with the mere delineation of what is to be done as the time has come to talk about what we achieved over the past six months and share our news with our investors – so let us discuss this, as well as the immediate plans.
Today’s update revolves around the following core topics:
– New products
– New type of loans
– Update on loan retrieval in Poland
– Situation in Indonesia
– Plans for 2022
DoFinance’s product range will be expanding. Current plans encompass the onboarding of new loan originators in Europe, and potentially new loan originators in Indonesia. In Europe the loan originators are operating in financing consumer credit lines and instalment loans. In Indonesia, Dofinance is monitoring a loan originator that is providing collective loans. The main features of such loans are their availability to a new borrower segment, meaning that a new market is being penetrated right there, not mentioning the increased security which is provided by one of the features of the new product – the collective responsibility. Once the loan originator will prove the concept of this loan product, Dofinance will initiate audits to comply with requirements of the Financial regulator. After the audit process the new Loan Originator is introduced for investments.
Loans for the medicare field
The existing loan originator in Indonesia is in the final stage of starting issuing loans for medicare in cooperation with one of the leading pharma producers in the world. The purpose of loans will be to fund medical treatment of specific diseases. We at DoFinance consider this is an excellent investment opportunity, as the health industry has experienced a lot of changes in the past couple of years, especially in the pharmaceutical industry subdivision. It is becoming more and more obvious that the growth is sustainable and expanding, especially taking into account the context of the pandemic. A great chance to benefit from the current situation financially.
Since October 2022 DoFinance has not been actively attracting new investments and providing investment opportunities as it has been focusing mostly on changing the procedures and processes to comply with the requirements of the financial regulator. Firstly, the process is very bureaucratic and involves introduction and preparation of multiple procedures and processes. Afterwards these processes are introduced and visible to the investors. Already now we have introduced an investor questionnaire that is a precondition for anyone to place new investments. Also that includes customer and product suitability and appropriateness evaluation.
At this moment there are approximately 1’000 investors with investments of any size, the majority are still having remaining investments less than 800 EUR. After receiving an investment brokerage license and introducing new lending products it is expected that the median investment should increase to at least 5’000 EUR as it used to be.
Plans for 2022
In a nutshell, the above-mentioned changes are to happen gradually. We are deploying the new products and innovations as per our schedule and all our investors will be notified upon the release of new products and features. The new license is a gateway to tremendous growth opportunities, new markets, new levels of trust, and new strategies. We will never be the same after the license is acquired. Be sure to stay with DoFinance up to this moment to witness the transformation. The year 2022 promises a lot of positive changes, one of which is that the crowdfunding industry will be finally waking up after a protracted pandemic period. It is so pleasing to finally realize that the company managed to withstand the tremendous pressure as well as to develop further. A landmark achievement, nothing less. Let’s stay and see, let’s thrive together.
Latest situation in Ukraine
None of loan originators serviced through DoFinance have not been involved in operations with the countries affected by recent Russia aggression. In this regard our operations have not been negatively affected. Of course, we are monitoring the situation’s development with regard to new Loan originators and we will evaluate every potential risk before offering them to our investors.
Information about portfolio that was affected by the COVID19 pandemic and that is in recovery
Just to recap on the collection status in Poland – still old cases are being passed to the court for collection.
The total portfolio or LO in Poland was 3,3 m EUR, out of which DoFinance investors have investments of ~ 800’000 EUR. For the period from 08.2020 loan originator has paid 660’000 EUR in fees to lawyers and courts and bailiffs to enforce the collection. The repayments from debtors firstly cover court fees, penalties, interest and then the principal. For a brief moment, while the Loan Originator could afford it, the payments to investors were made irrespective of the costs of collections, but then it was briefly suspended to accumulate funds to cover court expenses. Right now there is again a positive cashflow and repayments to investors have resumed.
The loan originator was also considering selling the portfolio and this option is still available. The price offered however was far too low, and that would impose immediate loss to investors. Portfolio buyers are considering the age of the portfolio, while in the court the age does not matter, and the claims are being filed in full. Currently, the Loan Originator is still investigating portfolio selling as an option, but the intention is to balance time with the amount recovered.
More updates will be presented once there will be any material changes in the offers for the portfolio. In the meantime the collection through court is still being pursued as the main collection strategy.
The collection process for the part of the portfolio that was affected by COVID pandemic is ongoing in Indonesia and cash flows to investors have never stopped. The collection is much more difficult though due to weak law enforcement. Nevertheless, Loan originator is submitting the portfolio to different debt collection agencies and testing whichever is more efficient. Since Fintech as an industry is developing fast in Indonesia, new services and tools are appearing in the market that allow to improve collection even for the ageing portfolio. As a good new development, it is important to note that companies specializing in portfolio purchasing are increasing. Currently, their offer is still much different from Loan Originators expectations, but the offers are improving over time. Loan Originator is still looking for any new ways to improve collection, and the process is ongoing.
Total old loan portfolio in Indonesia is still around 5,45m EUR, from which DoFinance investors have an exposure of ~ 1,5m EUR. Even though the portfolio size is very large, the Loan Originator is still seeking for the most efficient ways to collect this portfolio. The problem is with the small size of the loans that prohibit choosing of more expensive collection tools.
Please note, that all investments contain high risks, and they should not be considered as the main source of income.