Latvia’s P2P Lender Grupeer Provides Update Regarding Current Repayment Status and Debt Collection Processes

Latvia-based peer to peer (P2P) lender Grupeer has provided an update regarding the current status with the repayments and debt collection processes on its platform.

The Grupeer team noted that, as its clients already know, since April 2020, the lender had suspended its “economic activity.” The P2P lending platform confirmed that it had stopped taking new investments in order to focus on “fulfilling liabilities towards existing investors.”

Grupeer’s management recently stated:

“We hoped that the resuming of economic activity will take place sooner, but it is directly affected by the low share of submitted KYC questionnaires. From all active investors, approximately half have submitted and verified updated KYC questionnaires, [this] creates difficulties [when it comes to] reopening bank accounts and to resume the economic activity of the company.”

Grupeer now claims that it has a solution to fulfill liabilities towards the investors who have turned in their completed and verified questionnaires. The company said it will “ensure repayments in collaboration with its debt collection partner Recollecta, Reg.Nr. 40203255274.”

Grupeer further claims that Recollecta is a professional legal team. The lender aims to “ensure transparency when it comes to repayments, [and] will be transferring the right of claims and funds to the attorneys of law.”

The P2P lender clarified that “additional actions from the investors are not required, as concluded agreements between Grupeer and investors allow us to engage Recollecta to enforce claims of investors against third parties.” Recollecta will reportedly be administering all incoming payments from loan originators and repayments to the investors “as per the schedule, as well as manage debt collection processes.”

(Note: for more detail about these processes, check here.)

The lender confirmed that the State Revenue Service (SRS) of Latvian Republic has suspended IA “Grupeer” economic activity, however, the company claims that this will not affect “the process of debt collection or repayments.”

The lending platform added:

“We intend to resume the full operation of Grupeer as a company and legal entity. We are preparing the company to obtain a license from the local regulator and become part of the regulated finance market. To do so, we continue our work to streamline or AML and risk policies and processes, as well as improve and strengthen our IT platform.”

As covered in April 2020, Grupeer announced it was pausing operations due to COVID-19.

In a blog post, Grupeer founder Alla Kiska stated that the Coronavirus had compelled the platform to halt operations as before and told investors “hereby [we] 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.”

A Telegram group, with over 3000 members, had been launched by impacted Grupeer investors. Some participating individuals appeared to have been interested in pursuing legal action in regards to the pause in payments.

In a blog post today (September 7), Grupeer stated:

“It has come to our knowledge that attorneys-at-law office “Ellex Kļaviņš” has provided misleading counsel to the investors regarding the matter of what means “stopping of the company’s economic activity.”

It is not immediately clear as to the status of any legal proceedings.

Around the world, some SME lenders have hit the pause button on issuing credit due to the crisis. While many consumer lenders continue to offer credit, all platforms are revisiting credit risk as concern has risen regarding a heightened default rate. Some industry insiders have shared predictions that not all online lenders will survive a health issue that has quickly morphed into a global economic crisis.

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