Status update and the performance of invested funds until 01.05.2020

Last year was a rough period for the investment sector. During that time, loan originators listed in the DoFinance platform were working hard and testing different debt collection strategies to ensure that there is an actual outcome of that. In the new DoFinance blog, you will find out how the pandemic affected the company, what progress has been made, and what to expect in the future.

The general situation in the markets where Alfa Finance group is represented

Dofinance remains intact even after the pandemic that left a considerable footprint on the world economy, just as it did on the P2P investment sector. In some cases, loan originators declared bankruptcy or lengthy legal liquidations. DoFinance has proven how formidable it is in the face of such hurdles. Taking a look back, we all remember the moment when the P2P industry was with the poor performance of underlying assets from the beginning of 2020 until the end of April 2020. From that point, many investors began to be concerned about the future and return of their investments. In the following article, we provide some valuable insights as pertains to the current financial standing and overall progress in loan recollection.

The good news is that the company has passed through a pandemic and is actively working. Poland loan originator has stopped new loan issuance and currently, Poland loan originator is working on loan recovery exclusively with accountants and lawyers involved. The related costs for lawyers and accountant involvement are fully covered by Alfa Finance.

In the meantime, the Indonesian loan originators are fully operational, meaning that the new loans emerge alongside the new products. 

With regard to the money loans in Indonesia that were affected due to the pandemic, the up-to-date position is that the loans are being recovered with the help of external agencies and the local court system. Meanwhile, all cases in Poland are being referred to court, but because of the covid-19 restrictions, some parts of the cases have slowed down and the others should be resubmitted again.

Performance of affected portfolio part

dofinance_status_update_on_recovery_26.08.2021

Currently, the loan originator’s recovery plan is in progress, and since the last update, which was September 2020 the internal debt collection team and in solid partnership with debt collection agencies, the loan originator in Indonesia has managed to recover 776,681 EUR. Meanwhile, in Poland 186,793 EUR where almost all loans have been placed in court.

It is an excellent result proving that the company’s employees are working hard to accomplish all its promises. In percentage terms, 35% of total affected investments were recovered in Indonesia and 17% in Poland. The total portfolio in recovery for Indonesia and Poland is  5,446,000 and 4,325,000 EUR respectively. DoFinance investor share for the Indonesian part is 34% and for Poland 17%. The remaining portfolio is funded by shareholders’ investments, with 66% share of Indonesian loan originators while 83% share in Poland. The total payout to investors since the 1st of May 2020, including interest, is 1,272,535 EUR. We are planning to update the recovery plan progress every month from now on.

Up to 26.08.2021, the remaining principal amount of DoFinance investments in recovery is 1,471,371 EUR for Indonesia’s market and 921,662 EUR for the Polish market. Indonesian loan originator forecast is to recover at least 80% from total in recovery while Poland estimation is at least 100%, both loan originators expect to recover the aforementioned loans by the year 2023. 

Investment brokerage company license issued by FCMC

 The other good news is that the company is working towards obtaining a license from FCMC, which will have a substantial positive impact. There is still pending documentation to be prepared, and some processes are undergoing amendments according to the FCMC requirements. The FCMC license has great investor benefits and protection rules under EU financial industry regulation, MiFID II. This includes organizational requirements around capital requirements and best execution, preventing conflicts of interest, and product governance. It will be a huge step forward for DoFinance and is now only a few steps away from reaching even greater success.