Welcome to DoFinance Insights and outlooks! DoFinance has prepared important information so that you stay up to date with the latest updates. This update provides information on the Portfolio Sale, Available funds, Payout requests, as well as on the provision of portfolio sales proceeds back to investor accounts.
Poland portfolio sale
First things first – after a lengthy process of negotiations with potential buyers of the defaulted portfolios serviced by the Alfa Finance Poland Sp.z o.o. and A.F.K. Sp.z o.o. (Loan Originators), the Loan Originators have closed portfolio sale transactions and have processed the transfer of portfolios to the buyer that has submitted the highest bid.
Loan Originators had submitted the offers to DoFinance for evaluation. As Loan Originators informed previously, as well as it has been presented in blog posts, during the last few months, costs of collection have exceeded the collection inflow itself, therefore according to professional judgment of the Loan Originators and DoFinance, sale of portfolios was economically the best choice for investors.
Therefore, DoFinance, acting in the best interest of the Investors and in-line with Terms and Conditions of DoFinance Website Usage Agreement accepted the offers and requested the sale.
The sales agreement stipulates discounted price at the level of 6,18% from nominal value of the claims and associated accrued interest of those claims. Sales agreement also stipulates the sellers’ obligation to cover costs related to transition of legal representation in courts to the law firm appointed by the buyer of the portfolio, as well as the outstanding court fees payable for submission of the cases to the courts. After deduction of these costs, the final amount to be transferred to the investors accounts is set to 4,32%.
This sale transaction represents final payment for outstanding assigned loan portfolio and will be reflected in investors profile as settlement for sold loan assignments.
Received sales proceeds will be made available for withdrawal pro-rata to nominal values of the investor’s assignments in Poland within weeks time as soon as accounting records will be prepared and visible in Investors accounts. Please note all of the transactions will be presented explicitly in your account statements.
Indonesia portfolio sale
Based on the same conditions as stated above, Loan Originators in Indonesia have requested and have completed identical actions in Indonesia. the Loan Originators have closed portfolio sale transactions and are processing the transfer of portfolios to the buyer that has submitted the highest bid.
Just like in Poland, costs of collection recently were substantially exceeding the collection inflow itself, therefore according to professional judgment of the Loan Originators and DoFinance, sale of portfolios was economically the best choice for investors, in the shortest time possible in order to secure at least some positive cash flow.
The sales agreement stipulates discounted price at the level of 0,2% from nominal value of the claims and associated accrued interest of those claims. Such low percentile is due to the fact that Indonesian authorities are placing all obstacles to fight debt collection industry, hence there are very few organizations that agree to buy others portfolios. Sales agreement also stipulates the sellers’ obligation to cover costs related to technical transition of the portfolio in systems and maintenance of systems for 2 months. After deduction of these costs, the final amount to be transferred to the investors accounts is set to 0,13%.
Sale transaction represents final payment for outstanding assigned loan portfolio and will be reflected in investors profile as settlement for sold loan assignments.
Received sales proceeds will be made available for withdrawal pro-rata to nominal values of the investor’s assignments in Indonesia within weeks time after accounting transactions will be recorded and will be visible to investors.
In total According to information available to Dofinance such result is substantial compare to recovery rates from other Loan Originators that suffered increased defaults due to COVID19 pandemic and placed government obstacles to high yield lending business.
What does it mean to sell a portfolio
A loan portfolio sale is a transfer of multiple loan assets in one transaction. As DoFinance informed previously, sale of portfolios is economically the best choice for investors. Therefore, Do Finance, acting in the interests of Investors and in accordance with the current Terms of the Agreement on the Use of the DoFinance website, accepted the sale of portfolios by Loan Originators. With the sale of Poland and Indonesia portfolios all sold investments are closed. So, the investment object as such ceases to exist, respectively, all and any payments for such investments have been accomplished until the final transfer of funds as described above.
What does it mean for investors
Despite the portfolios sale being good news, there is one notable detail about it – since DoFinance has also gotten very close to license acquisition, thus, as imposed by the local regulator, in order to provide the aforementioned funds to the current investors’ accounts, a certain AML (Anti Money Laundering) procedure must be carried out. This is a standard practice in all EU and DoFinance urges its investors to cooperate so that the subsequent funds transfer becomes possible and everyone could get their funds without hindrance. Most of the investors have already accomplished this process, but some still remain.
Please read the stages of the refund for withdrawal:
- Only the amount that will be credited after the sale of portfolios will be available for withdrawal and transfer to Investors private bank accounts, because these are funds that have been made available to Dofinance.
- With the amount that is displayed as available on the Do Finance account balance, Dofinance is doing everything that is practically reasonable to collect these funds from Loan Originators. One has to note that Loan Originators have faced far greater direct collection costs in the recent months than incoming funds from collections. As much as will be possible to reasonably collect will be made available for for withdrawal in next 1 –2 months.
Example:
Mr.Investor has an available balance of 50 Euros on the balance of DoFinance account.
After the sale of portfolios, 60 Euros were credited to his balance.
Thus, the total balance that Mr.Investor sees is 110 Euros,at the moment, until a special notice, he can withdraw and receive only 60 euros from the sale of portfolios.
What to expect from AML requests
DoFinance will ask to renew the customer information for every client who expects to receive any amount from DoFinance. It is only after the AML check and approval DoFinance has a right to complete the payout request, or provide the part of principal amount in the form of portfolio sales proceeds. The volume of the request may vary depending on information provided before and the risk level. But for the absolute majority the request will be limited by the single intuitive-to-complete form. DoFinance will send out the forms via email.
For further information and clarifications, please turn to our support service at info@dofinance.eu