Lithuania’s Debitum, which Offers Borderless Small Business Financing, Announces Updates for 2021

The Lithuania-based Debitum platform, which offers borderless small business financing, was closed on December 31, 2020, for maintenance. Debitum’s management noted that as we enter the new year, Debitum also has “something new.”

Debitum added that they had already informed their investors and business partners before that Debitum had applied for the investment company license in Latvia. The firm’s management further noted that “for the reason of licensing a new legal entity, SIA DN Operator was created in 2019 and the required documents were submitted to the Latvian financial market regulator, Financial and Capital Market Commission (FCMC).”

Debitum added:

“We want to take the next step and switch a legal operator of the Debitum platform from the current platform operator, SIA Prosperitu, to the new legal entity, SIA DN Operator. It will give us time before getting the license to perform the necessary steps with the existing investors – the most important of which is to implement certain requirements for the protection of retail investors as specified by the European Union Markets in Financial Instruments Directive (MiFID II).”

Debitum reports that €30.83 million in capital has been provided for investment (to date). According to the platform’s official website, the current average interest rate stands at 8.6%, and there are 5,956 registered investors at the time of writing. The current average repayment term is 213 days.

Debitum notes that it only issues loans to businesses. It claims that “compared to consumer loans they are way more favored by professional institutional investors.”

The Debitum team added:

“We are the first Fintech platform that provides unified risk scores allowing investors to actually compare various assets based on a probability of default in the next 12 months. We have developed an innovative technical solution that ensures all steps of needed operations. We keep innovating and introducing new features and capabilities – all to ensure transparency and ease of investment for our users. We are currently originating loans to businesses in Estonia, Latvia, Lithuania, Poland and the Czech Republic.”

The Debitum team also mentioned:

“We intend to decentralize the process that is needed to successfully and efficiently fund [SMBs]. In the current financing world all steps of this process are carried out by a single financial institution in a centralized manner. We change that by adding various decentralized parties like risk assessors that are able to provide unified risk scores for every SME loan. That provides investors with needed transparency and information to make an informed decision.”

(Note: to learn more about these services, check here.)

As confirmed by Debitum, “all active investments, interests, and penalties accrued, the available balance of investors’ accounts, as well as all historic information about investors’ accounts, will be transferred to SIA DN Operator on December 31, 2020.” Beginning on January 1, 2021, DN Operator will be responsible for handling “all repayments, investments, deposits, and withdrawals.” In order to “make the transfer a smooth process the platform [was reportedly] not accessible on December 31, 2020.”

Debitum’s management reminded users that they need to be aware that bank account details for deposits “will be changed from January 1, 2021, to reflect that the Debitum platform is operated by SIA DN Operator.” Platform users have been requested to find out and confirm new deposit details before initiating a transfer. Any transfers made to the previous account of SIA Prosperitu will “be bounced back to your bank account,” Debitum clarified.

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