Q&A on the current situation around coronavirus with Sergei Demchuk

Q&A on the current situation around coronavirus with Sergei Demchuk:

The written version of Q&A you will find below:

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1. How this crisis will affect the alternative lending market?

Well, like in any other crisis the downturn will happen. Of course, small businesses who are our clients are affected and some of them will experience a delay with repayments. At the same time, I believe that any crisis is also the time for new opportunities. I’ll give just one example: Governments already consider using alternative lenders to deliver support for small businesses. Previously they consider only commercial banks as a channel. Online channels and digitalization, working with clients remotely will be even in higher demand than before. And this is what we in Debitum are doing very well. That is why I believe that when we overcome this crisis. We will see future growth and development of alternative lending and alternative investment platforms.

2. What happens if the final borrower or loan originator goes bankrupt? Do I lose my investment?

You have a buyback guarantee provided by the loan originator. In case of a delay of 90 days Loan Originator, we repurchase the asset and you will get your money back.

3. Does Loan originator have enough funds for that?

We monitor key financial indicators for each loan originator, such as debt to equity ratio, level of defaulted loans, operational sustainability. We monitor on a monthly basis to make sure that our partners have enough funds to cover buyback. And even in unlike case of Loan Originator default you still have claims of right and you can collect the debt either by yourself or local debt collection company.

4. Does Debitum Network have enough funds to pay me back? What if Debitum Network goes bankrupt?

We always segregate the money from investors from our funds. They are kept on separate accounts. And the only investor decides where to invest. We just execute your order. So when an investor purchases an asset, we transfer funds to Loan Originator. When the loan is repaid, money transferred to investor account and the only investors will decide either to withdraw or reinvest. As to Debitum, we keep our operational expenses on a low level, and we have enough equity to support our sustainability during the next 12 months even in the worst-case scenario. So we are confident that we will work and develop our business in the future.

5. During last days many loans on Debitum Network were repaid but no new ones appeared to invest? What should I do?

During this week we talked to all our partners – Loan Originators, we wanted to check how well they are prepared for new circumstances. Now we additionally check all assets before uploading to the platform. That is why it took some time. However, already yesterday we uploaded new short term assets, and we keep doing t in next days. So go to the platform, have a look and invest! Don’t forget that money for investments needs to work – let’s keep investing and supporting businesses around Europe! And don’t forget investing in Debitum Network doesn’t require face-to-face contact and can be done during quarantine safely.

Stay safe! Keep investing!

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