It has been a truly challenging year for everyone, so what happened in DoFinance in 2020
For DoFinance this year started very successful, however not for a long time. Just as the company started growing and becoming successful, two factors happened – few fraudulent investment platforms were discovered, and COVID-19 pandemic started.
The effect of the first factor was that a lot of investors started withdrawing funds, they requested early withdrawals, and asked for early buy-backs. Loan originators in both countries started buying back and did early repayments. This was done mainly by the free capital of Alfa Finance company. Unfortunately, we did not expect that such a “bank-run” would not stop, so we actually paid out most of the free capital that was in the group company.
Secondly, in March, the Loan Originators started discovering that on top of “bank-run” the loans were starting to perform much worse. Consequently, the capital required to continue uncontrolled payouts only increased.
At that moment together with Loan Originators, the buy-back was suspended, since it was never present in the Assignment or Web agreements. The reason is that continuation would lead to financial default of Loan Originators and investors would lose all of their capital.
In our case, Loan Originators did everything to recover from the crisis and avoid default – they cut costs, substantially limited issuing new loans until the scoring models were adjusted. The outcome is that investors up until now are actually receiving payments and recoveries of delayed loans and can withdraw all repaid loans + profit if they wish to do so. In order to recover the whole portfolio the Loan Originator has to earn profits to cover the defaulted loans – there is no other source of funds that it can get and this is an important aspect that everyone has to understand.
At this moment, the Loan Originators have changed their approach to how they run the business – all loan portfolio in Poland is passed to court, hence it is an irrevocable process and eventually investors will get all of the funds that the court will recover. It is a lengthier, however much safer process.
In Indonesia the Loan Originator has substantially adjusted its scoring models, added new data sources and improved the quality of loans. Additionally, the loans that are passed to the DoFinance platform are evaluated more carefully, by taking into account COVID-19 effect. Plus, Loan Originator has signed an agreement with a debt collection company to sell all delinquent loans at an earlier day, to avoid unpleasant surprises in debt recovery. This way, now it is much easier to actually enforce buy-back of loans and the cash flow risk is minimised.
What happened recent days in DoFinance
As we continually improve the system and product to make it more convenient and transparent for investors, we made improvements regarding loan statuses, which unfortunately resulted in incorrect display of client available amounts.
Due to that we had a challenging few days with recovering of the system as it suffered this irregularity. We can say that the system has recovered completely and all functions are operating properly. No data was lost and no damage happened.
We are confident that we have the right strategy in place to meet the challenges and support the growing demand of fintech products in Indonesian market. Our aim is to improve our current operations and ensure stable company growth in long run. We strongly believe that our future success is dependent on our investors and employees who are also one of our greatest asset. We are committed to attracting, retaining and developing the most suitable professionals and establishing an environment for investors in which they can enjoy stable returns for their investments.
Despite everything the whole team wanted to say thanks to everyone who was with us and who supported us as much as anyone could.
But a special Thank you to those who believed and still believes that we will succeed and that we will be able to overcome any difficulties, because this can only be achieved by doing and working together.
Latvians have a very good expression “Caur ērkšķiem uz zvaigznēm” (“Through thorns to the stars”), 2020 was a year full of thorns, so let us wish for you and us that in the next year 2021, we will all reach our stars!
Wishing every day of the New Year to be filled with success, happiness, and prosperity for You!
Happy New Year,