Two Issues Currently Evolving on P2P Lending Marketplaces

This week some investors on the p2p lending marketplaces Viventor, Grupeer and Mintos are affected by issues that hinder the normal procedures on these marketplaces.

Viventor started to display the following warning message yesterday (visible only if you click on an affected loan)

Aforti Viventor
(Screenshot from Viventor.com)

As a result, multiple Aforti loans were on offer on the secondary market for 5 to 15% discount (at one point in time I saw 35% discount)

Asked for a comment, Viventor CEO Andrius Bolsaitis told P2P-Banking.com:

According to information that we have now, they have some cash management issues, we are in discussions with them and hope to resolve the situation soon. I will be personally meeting with their managers tomorrow in Warsaw and will have more updates then.

Update 14:02: Apparently Mintos has now suspended trading of Aforti loans on the secondary market. I reached out this morning to Mintos’ management for a comment on how they see the situation with Aforti.

Update 14:42: Reply from Mintos CEO:

Hi … ,

Thank you for your email.Aforti is overdue on passing to Mintos payments which Aforti has received from borrowers and payment for buybacks. Thus, we are suspending repayments and buybacks. We are meeting Aforti tomorrow in Warsaw and will update investors accordingly. Below excerpt from communication to all investors:
Mintos has suspended automatic repayments and buybacks for loans originated by Aforti Finance on our marketplace (EUR and PLN).
The decision was made based on Aforti Finance’s overdue transfers of borrower’s payments to the Mintos marketplace.

In order to protect the interests of our investors, all loans issued by Aforti Finance have been removed from the primary and secondary markets of the Mintos marketplace. This means you cannot buy or sell Aforti Finance loans, effective immediately until further notice.

Update 16:02: Statement from Aforti Holding:

Dear Sir,

In response to the questions regarding the message released by Viventor, we would like to inform you following.

We are currently at the stage of closing cooperation with the Viventor platform, what has been announced to Viventor. Situation suggested by Viventor is a result  of  change in Aforti Finance S.A business strategy. Our decision is determined by technical difficulties in cooperation with  Viventor platform. Also cause most workload has to be done manually, our operational risk increased significantly. This is what we want to avoid, cause AFORTI business model and operational procedures are going rather in the direction of using API to automatize processes and to minimize human errors.

It’s also worth to add, that we have not been using  Viventor platform for new loans for about two last months, as a result of mentioned above decision. Of course Viventor receives daily financial transfers, so we do not see any reason for such a message.

Due to the fact that for tomorrow (Thursday, August the 8th ) we have scheduled a meeting with the Viventor, we believe all misunderstandings will be clarified.

Update Aug. 8th: the meetings are at 12:00/13:00 (Warsaw time)

Update Aug. 8th: Debitum Network says investors on the Debitum platform are not affected as all Aforti loans were bought back on July 25th

Update Aug 9th: from Mintos

Update Aug 9th: by Viventor

As previously announced the meeting with Aforti took place in Warsaw. The parties found a solution with regard to the technical issues. We consider the solution satisfactory for both sides and expect all issues to be resolved during next week.

Update Aug. 12th: Mintos now says they had an agreement with Aforti since January 2019, due to which Aforti would not place any new loans on the primary market. Strangely they only communicate that agreement now. Why not in January?

Our team is once again meeting with Aforti Finance in Warsaw, Poland today to continue to work out the details of last week’s initiated solution for Aforti Finance to resume transferring borrower repayments to us for distribution among investors.

We aim to release the next more detailed update tomorrow.

Until then we thank you for your patience, as well as the questions to our Investors Service team and comments on the blog and social media. We are preparing to release answers to them as soon as we handle the current priority of resuming payments.

We also wish to remind that Aforti Finance has not been placing loans on the Mintos primary market since January 2019. It was a mutual agreement with Aforti Finance following a weaker than expected loan performance and IT system related issues. Aforti Finance has continued servicing the loans since then and the total Aforti outstanding loan portfolio on the Mintos marketplace has decreased from EUR 5.7 million on December 31, 2018 to current EUR 2.2 million as of August 12, 2019. In light of adverse changes in the mood on the Polish securitization and bond market as well as our due diligence insights on the company’s internal arrangements changes, we reflected our risk precautions by downgrading Aforti to C+ in March 2019.

At this stage we remain committed to working with Aforti Finance to continue servicing loans and passing borrower repayments to investors on the Mintos marketplace as soon as possible.

Update Aug. 12th: I have analysed the Mintos loan data and came to the result that the last Aforti loan, was listed on January 2nd on the Mintos primary market.

Update Aug. 13th: Several investors report that they received a repayment incl. late fees on this Aforti loan on Viventor today.

Update Aug. 14th: Mintos has announced that Aforti payments have resumed as of today. Aforti loans on the secondary market stay suspended.

 


Earlier this week on Monday, it became evident that the Lithuanian central bank had suspended the operations of Satchelpay (source), which Grupeer used as one of two ways for deposits by investors. From Tuesday onwards Grupeer asked investors to use the alternate deposit method via Baltic international bank only and said that they will add new payment providers this week.

Asked by P2P-Banking what the status of investor payments is, that were made shortly before or on the day of suspension to Satchelpay, a Grupeer contact told P2P-Banking:

At the moment we are in contact with the bank and have received the information that all transferred funds will be returned to the account of the sender. However, we cannot provide you with the exact terms.
More detailed information will follow.

Hopefully both incidents will be resolved satisfactorily for investors. On both issues I see room for improvement on communications with investors.

Little Progress in MYC4’s Recovery Attempts

As reported in the past MYC4.com has serious operational problems making it an investment with negative ROI for the vast majority of lenders. MYC4 has taken measures to recover as much of the outstanding loan amounts as possible, but progress is very slow.

This is a quick update on the situation

Kenya / Provider Ebony:
The receivership has been in place for two months now, but has recovered only a small amount. The court case against Ebony Capital Ltd. is ongoing still awaiting a ruling. (see details)

Ivory Coast / Former providers Ivoire Credit and Notre Nation
The responsibility for collecting these loans has been turned over to TRIUM International in September 2009. In the 5 months since then TRIUM International collected 17,848 Euro. TRIUM has asked to be relieved of the contract as soon as possible (see details)

Senegal / Provider Birima
Repayments have been delayed. Birima cites technical problems and a bad economic situation in Senegal.

Uganda / Provider FED/CMC
FED seems to have the worst status. MYC4 reports that collections nearly stopped due to a lack of staff and  working capital. Borrowers are said towithhold repayments in speculation on a collapse of FED/CMC.
MYC4 has defined 10 action steps for March and April. (see details)

Continue reading

Dutch P2P Lending Site Boober Fails

In the Netherlands p2p lending service Boober apparently has ceased operations. The website Boober.nl has been inaccessible for days and no one was available for comment as the phone went unanswered.

There are reports by lenders, who complain that loans are not serviced as usual. Even one borrower is seeking help, because he cannot get the monthly payment through to Boober.

As of the moment it was not possible to determine how outstanding loans will be dealt with.

MyC4 with accounting troubles

Since the new release, MyC4.com has encoutered repeated accounting problems, sometimes with wrong interest calculations, sometimes requiring correction of user account balances. 

Examples of incidents: 1, 2, 3, 4, 5

MyC4's staff has been quick to respond to the problems and usually is fixing them fast.
But I believe the issue here is, that p2p lending through a foreign internet startup requires a great amount of trust. And while lenders are used to bugs in new internet application, they do expect a high standard when it comes to accounting. After all no user of online banking would accept that he has to check the interest calculations made by the bank. 

The MyC4 team did a good job developing the platform so far and earned at lot of trust; but if the problems persists this might be an obstacle to further growth. 

Zopa criticism

Browsing the Zopa forums today, I noticed that negative posts by lenders are on the rise. This is quite different from the mostly positive feedback in earlier months.

Lenders are:

While the staff in many cases does not immeadiately solve the voiced problems, at least they are much more responsive in the forum compared to the Prosper staff in the Prosper forum.

Some of the complaints may turn out to be misunderstandings. Bear in mind, that only a tiny minority of the Zopa lenders are active posters in the Zopa forum, therefore it is quite possible that a fast majority of Zopa's lenders is still very satisfied with the service.

Users suspect problems may have risen, because Zopa stuff could be tied up with issues concerning US launch.

Temporary problems with some reports

Since two days the status field for the loans in the xml file of the Prosper data export is empty. Unfortunately this causes problems in some of the wiseclerk reports, which either show wrong values or are empty (e.g. the late loan list). For newly created or update maps the status of the loans is wrong, too.

Be assured that the reports will work fine again, once the the data export file contains correct values again.