Mintos reports rising interest rates
Mintos has reported higher interest rates on its marketplace during the first quarter, while it continues to seek alternative repayment solutions for its Russian borrowers amid the Ukraine crisis.
The European lending marketplace said that average interest rates have risen from 8.6 per cent in January to 10.6 per cent in March.
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“The bulk of loans available from investments come from established lending companies and groups that have their operations around the world, like Creditstar, ID Finance and IDF Eurasia, Eleving group, and Sun Finance,” Janis Pranevics, head of partnerships at Mintos, said in a blog on the platform’s website.
“These companies have their borrowers on four continents and in various geographies: from Mexico to South Africa and Kenya, in Indonesia and Vietnam, and in Estonia, Finland, Lithuania, Latvia, Poland, Spain, and other countries in Europe.”
Mintos said that some lending companies have started offering euro-denominated investments at interest rates above 13 per cent for the first time in months. Over the past two weeks, Mintos has seen €10m (£8.04m) of loans with rates ranging from 13 per cent to 16 per cent being listed on the platform.
Separately, Mintos said it is working to find alternative channels for transferring borrowers’ repayments after the Central Bank of Russia banned transfers to accounts abroad.
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“While we do see a strong willingness from the Russian lending companies to pay their dues to Mintos and investors – this is just not possible at the moment,” Martins Valters, co-founder and chief operating officer of Mintos, said in the blog post.
“Euro and other foreign currencies can’t be transferred from Russia, and European banks can’t service the rouble as they abstain both from a possible breach of sanctions regulations, and from the currently undefined value of the rouble.
“Without understanding what is the potential value span of the rouble, and with Russian businesses being blocked from access to their foreign currency assets, we can’t address the debt restructuring, no matter how willing lending companies are to fulfil their obligations.
“That’s why we’re working daily to find alternative channels for transferring borrowers’ repayments. Looking further ahead, the most hopeful development is that common sense will prevail, diplomacy will succeed over arms, and we will soon see direct implications on the financial markets in the long-term.
“Until this is reality, we will continue to work on solutions for transferring repayments, and on the larger part of our business that is intact, and which actually shows signs of growing attractiveness for investors in the asset class of loans.”