Grupeer is the latest European peer to peer lender to shut down operations. Grupeer operates out of Latvia but also claims an office in Ireland. In a message posted on the site this week, Grupeer management claimed that the impact of the COVID-19 pandemic made operations unsustainable.
Grupeer is an online lender catering to consumers. Many listed loans displayed gross interest rates payable to an investor as high as 14%.
Grupeer founder Alla Kiska stated:
“In the light of the current worldwide health crises due to [the] spread of COVID-19 virus reaching proportions of a pandemic, Grupeer is hereby informing you about the upcoming changes in the company’s operations and payments to you, our investors.
We have received your inquiries and we understand that you have questions regarding your investments and protection thereof. The team of Grupeer has been working with legal experts on finding solutions acceptable to all parties involved.
Regretfully, we are forced to inform you that in the current circumstances it is not possible for us to continue operations as before with an objective cause out of our control. Therefore, we hereby notify you that all payments to investors of Grupeer are currently suspended due to [an] emergency state declared in European Union and worldwide regarding COVID-19 pandemic crises.” (emphasis added)
Kiska claimed that additional issues compelled the company to make the above decision including challenges in debt recovery. Grupeer staff has been reduced in light of the COVID-19 “quarantine.”
“The decision to suspend payments while temporary is also currently indefinite as it is not possible for us and the rest of the world to evaluate the consequences of this crises will leave on the investment market. Therefore, we are not able to offer you any timeline regarding the execution of the loans you have invested in. However, Grupeer will put its best effort to prepare and offer you such solutions as payment plans and other alternatives.”
Kiska asked site users to keep calm and be patient.
Several commenters on Twitter were not forgiving.
A post from several days prior foreshadowed a looming halt to lending activity. Kiska stated that Grupeer and their lenders have “limited legal instruments towards recovery of debts from the borrowers.”
It was only several weeks back that Grupeer posted an update that claimed dramatic platform growth. As of February 2020, Grupeer reported over 26,000 investors having invested approximately €73 million. In February 2019, Grupeer showed 6300 investors and €19.2 million invested.
