PeerBerry notes that their business partners have assessed the changes in interest rates in international markets and have “made appropriate changes in the interest rates on loans offered to invest in on the PeerBerry platform – the interest rates are slightly increasing.”
Interest rates on the PeerBerry platform from March 16, 2022 can be viewed here.
The platform’s management also noted that they thank you for all the feedback and questions they receive. Many questions are answered already, but the PeerBerry team feels they need to address a few more concerns.
Before the war in Ukraine began, or even on the first day of the war (on February 24, 2022) there was a communication that PeerBerry partners “have accumulated significant reserves on banks in the EU, and it was stated that PeerBerry business partners in Ukraine and Russia are fully capable to repay all investments in Russia and Ukraine within 60 days.”
The firm also noted that “the situation has completely changed.” From the ordinary business situation, “within one day, it turned to a total force majeure situation.”
PeerBerry sees that there are investors who “are misinterpreting [their] previous communication.”
Before the war (or even on the first day of the war, Feb 24), PeerBerry “communicated that our partners’ portfolios are 3 times larger (not reserves are 3 times larger) than their liabilities to investors plus their partners have sufficient reserves to cover their liabilities to investors within 60 days.”
This statement means, that their partners “start repayments from reserves and collect money from borrowers to repay all obligations within 60 days.” At the time when our statements were given, their statements “were absolute truth,” the company claims.
At that time “no one knew how this war will develop.” And also “no one knew that portfolios in two countries will be fully locked.” At the time of their previous statements, there were “no miscalculations – [their] calculations were prepared based on [their] business practices, on [their] partners’ practice during the first wave of Covid, which was a very hard period for business as well.”
But “not for the scenario of brutal genocide in Ukraine, what we see now,” the firm clarified.
The company also shared:
- Cash reserves: PeerBerry business partners “always kept a cash reserve in EU banks of about 10%+ of their portfolio on PeerBerry.” What does a 10% reserve mean – “if our partners held a portfolio of EUR 66 million on PeerBerry, according to our internal agreements, they have to keep cash reserves of EUR 7 million on accounts in banks in the EU.”
- On the day of the war, our partners “had over EUR 8 million reserves on their accounts. No business in normal circumstances would keep more on accounts because money generates value only when money is ‘working’.”
- Our partners “always reinvested their profits back into their business development. Since the war started, our partners repaid over EUR 8,5 million of Ukrainian and Russian loans to our investors.” The additional reserve for further “covering UA/RU obligations can be accumulated only in a certain timeframe, as a reserve is being accumulated from profitable companies’ profits.”
The company further noted:
- Every agreement “contains a default force majeure clause which says that business takes no responsibility in the case of the war (or another case which is an object of force majeure).”
- In the current case, our partners “are doing more than required by law in this force majeure situation.” Our partners “are not activating a force majeure clause, our partners set the plan to repay all UA/RU loans.”
The firm added:
- Why the buyback guarantee “cannot be applied for UA/RU loans – the buyback guarantee is being provided by the company, that issued loans.”
- The company, “damaged by war, can in no way provide a buyback guarantee or fulfill other obligations the same a person shot in war cannot pay his debt.”
- We should “not mix an ordinary business situation with a war situation.”
- The buyback and the group guarantees “are set for ordinary business situations, not for the war.”
- There is “a huge difference.” In this case, a Group guarantee “will be applied which means that UA/RU investments will be repaid in the timeframe, set by our business partners.”
Assessing the complexity of the situation caused by war, “the size of the obligations for investments in Ukrainian and Russian loans, also assessing the performance results and future projections of the healthy part of our partners’ business, Aventus Group and Gofingo Group forecast that all investments in Ukrainian and Russian loans will be repaid within 24 months.”
The update further noted:
“There are still many uncertain aspects that depend on how this war will develop, but the projection to cover all Ukrainian and Russian loans within 24 months is realistic. If the war ends soon, war-affected investments will likely be repaid sooner.”
The update also mentioned:
“We plan to cover war-affected loans with the following logic – when we receive a pool of funds, for example, to cover part of the Ukrainian loan, then the total amount received to cover loans will be divided proportionally to all investors, who invested in Ukrainian loans, according to the size of their investment.”
The company continued:
“For better tracking/for your convenience, we will display war-affected loans separately from performing investments. Currently, it is under development. Currently, we do not have war-affected loans that are more than 60 days late. Just a smaller part of war-affected loans recently entered 16-30 days late-term.”
For more details on this extensive update, check here.