Mogo Group launches loans from yet another country on Mintos – Kazakhstan. Mogo Kazakhstan offers a great opportunity to earn annual returns of up to 12% for its loans listed in euro (EUR) and up to 18% for its loans listed in tenge (KZT).
Kazakhstan is so far the largest country by area in Mogo Finance’s geographical presence and it is known for its significant natural resources, advanced legislative reforms and strategic location. Currently, over 93% of vehicle purchasing and selling transactions in the country take place in the used cars market which has created favourable conditions for Mogo Kazakhstan to enter the market and as a result continuously grow its loan portfolio.
Mogo Kazakhstan launched its business operations in January 2019, and as of 31 December 2019, the company had a net portfolio of EUR 5 million (KZT 2 billion), 1 564 active clients, and EUR 7.1 million worth of issued loans in total. As of 31 December 2019, Mogo Group had a net loan portfolio of over EUR 190 million across all its operations.
Mogo Kazakhstan on Mintos
TOO Mogo Kazakhstan-issued loans on Mintos are listed in the EUR and KZT currency and range from EUR 714 to EUR 16 666 (KZT 300 000 – KZT 7 000 000), with maturity from 3 to 84 months. Investors on Mintos can expect a net annual return of up to 12% (loans in EUR) and up to 18% (loans in KZT). For all loans placed on Mintos, Mogo Group will retain 5% on its balance sheet to ensure its interests are aligned with investors on Mintos.
All Mogo Kazakhstan-issued loans have a buyback guarantee and Mintos Rating of “A”. On top of that, Mogo has a Fitch Rating of B-. Both ratings are a result of Mogo Group’s long-standing solid financial performance and the fact that Mogo Finance guarantees the obligations for all its entities.
To obtain exposure to Mogo Kazakhstan loans, investors on Mintos will be able to invest in loans issued by Mintos Finance to Mogo Kazakhstan, where repayments depend on the borrower’s payments. Each loan issued by Mintos Finance to Mogo Kazakhstan will be pegged to a respective loan issued by TOO Mogo Kazakhstan to the final borrower. Mintos Finance is a Mintos group company. A detailed description of the new structure is available in the Mintos Finance loan agreements and assignment agreement. Some of the equity investors of Mogo Group and Mintos overlap.
Since its launch in January 2019, Mogo Kazakhstan has been adopting the best practices and processes from the Mogo Group by complimenting them with locally available and customised IT, security, and marketing features. The company has three layers of security/revenue/creditworthiness checks that minimise possibilities of external and internal fraud or misconduct cases. Kazakhstan stands out for hosting its own hub’s IT and marketing forces.
“Mogo Kazakhstan was launched in January 2019 and quickly became one of the attractive places to go when deciding to get finances for a car purchase. The company has a strong team of experienced underwriters and debt collection specialists that constantly streamlines the payment discipline and makes the company’s operations smooth and beneficial. I believe that our professional sales and marketing team coupled with the mighty back-end team create important prerequisites for a sustainable and quality portfolio growth. I am pleased that Mogo Kazakhstan is now turning into a loan originator for Mintos’ investors and that all stakeholders can now benefit from this new opportunity” says Azamat Seitbekov CEO of Mogo Kazakhstan.