FAQ about Russian and Ukrainian lending companies on Mintos
Dear Investors,
For the past few months, we have been closely following tensions caused by the Russia-Ukraine crisis, as we work with lending companies in both countries. We’re now reacting to the most recent developments in this case.
Please see our latest Blog Post here: https://www.mintos.com/blog/mintos-takes-precautionary-measures-on-the-platform-in-the-case-of-the-russia-ukraine-crisis
Currently, we don’t experience any interruptions in repayment flow from borrowers of Russian and Ukrainian lending companies on Mintos. We also reached out to the lending companies for their comments, and according to their feedback, the current situation does not affect borrowers’ repayment discipline.
At the moment, we can’t predict how further escalation of the crisis and sanctions might affect the lending companies in these markets. We are monitoring the situation, and as a precautionary measure, we’re reviewing the impact of the market risks on the Mintos Risk Score for loans from the lending companies from Russia and Ukraine.
Based on this, we decided to remove loans from Russian and Ukrainian lending companies from the Mintos Conservative strategy. This automated investment tool selects loans for investments in the score range from 7 to 10. In case further developments require a decrease of the Mintos Risk Score for loans from Russian and Ukrainian lending companies, these loans will not be fit for the Mintos Conservative strategy anymore. We’re introducing this precautionary measure to prevent that from happening.
If you have any questions or feedback, please let us know!
We kindly invite you to our special AMA session to discuss topics related to the impact of the war in Ukraine and sanctions for Russia on Mintos, the state of relations with lending companies from Russia and Ukraine, and the effects on investors on Mintos.
AMA will be hosted by Martins Valters, Mintos Co-founder, COO/CFO on Monday, 7 March 2022 at 16:00 CET
Please check more information here:
https://help.mintos.com/hc/en-us/community/posts/4603758562705-Live-Mintos-AMA-dedicated-to-the-current-state-of-the-market
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How is the group guarantee of Mikro Kapital being implemented?
I have a large stake of my pending payments from them.
I got some redemption of those 2-3 weeks ago but the pending payments of Mikro Kapital keeps increasing (actually, faster than other LOs).
I contacted to the support and they said there is no group guarantee by Mikro Kapital but they are looking what they can do with it.
I understand that the situation is distressed with them and it is not a good idea to sink the whole ship of Mikro Kapital but at least make a timely payment plan for redemption of those pending payments that is realistic and does not threaten the whole business of Mikro Kapital.
Mikro Kapital likely needs some expansion in other markets in order to become stronger and be able to fulfill their obligations.
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Hi Annija, hi Mintos,
A few days ago, the Russian Central Bank ended its ban on the sale of euros and dollars. What exactly does this mean for our euro funds? Further it is written:
"On the other hand, transfers to foreign accounts, both in rubles and foreign currencies, for the payment of goods and services (including municipal services for real estate located abroad, medical services and educational programs, etc.) remain permitted.
Thus, there is still the possibility of making transfers to business partners on their foreign accounts. The possibility of payments for imports and repayment of foreign loans also remain."Doesn't this mean that Russian Lending Companies are now able to transfer back in Euro again ?
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@... tagging just in case, please see Philipp's message above.
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Also interested in hearing comments from @... regarding information from Philipp Gernot Schneider
Also, has Mintos considered using cryptocurrencies for receiving payments from Russia? This would surely be a feasible method to transfer funds in the current situation.
Any update is appreciated. Many of us have significant amount of money tied to loan investments in Russia, and at the moment there is minimally information available from Mintos' side.
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Dear Philipp Gernot Schneider, thank you for your comment. Could you please provide us with the original source of this information?
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Dear Ville Lahtinen, this question was answered in my previous comment, here is the relevant part:
Our latest update regarding funds in Recovery was on Thursday, 14 April 2022. Also, the Part Regarding Russia and Ukraine was specially covered there. Here is the link to the specific part: https://youtu.be/Mn0LOZKQr-8?t=670We specifically covered the points: RUB Exchange, RUB Transfers, Use of other Channels like Crypto, what are we doing, and explained the PeerBerry example. We encourage you to listen to this part...About other Channels like crypto, it is really not an option as we need to take into account that Lending Companies are regulated and there are capital controls for them.If companies are able to and want to pay us they technically do not have the ability to make payments. Therefore we are actively looking for alternative solutions for transfers together with Lending Companies. Please note that it does not happen in one day as changes in agreements etc. must be done because of Capital Controls.0 -
Hi @...
here the info of the russian central bank (in german):
here the info about the possibility of payback loans (in german)
https://www.roedl.de/themen/ukraine-krieg/russland-sanktionen-aktuell-neu-zahlungsverkehr-listen
Roedl & Partner is one of the biggest law comapnies/tax advisors in germany..
how can it be, that mintos (your team) does not know about such news like that with the euro opening of russian central bank!? iam confused.
iam curious about your answer.
thanks.
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The silver lining behind the cloud is that Ruble is getting stronger and stronger. I think now 1 euro is 80 Rubles only.
If I am not mistaken, Ecofinance had some solvency issues so those get easier as Ruble gets stronger and stronger.
What kind of alternative methods Mintos and the LOs are preparing currently - I did not find answer to this question on AMA and you guys keep saying you are preparing something (there should not be any reasons for secrecy)?
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Hi Mintos,
As i told you in my post some days ago, i will include my lawyer in this case finally at 30.04.2022. today i had a phone call with Roedl & Partner Law company. There are two questions open now which you should answer transparently:
1) What kind of alternative methods Mintos and the LOs are preparing currently - give the investors insides of those opportunities (same as you asked Jarmo Ville Viikki)
2) Why didnt you update the info, that the russian central bank allows the euro/dollar business again - see my last post
You had enough time now to make a good job.
@community
Anyone who wants to join the cause is welcome to contact me. i am sure that we will reach our goal more quickly with a common collective concern.
@mintos - still believe in you - now give us transparence.
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@Philipp Schneider , I`ll join, just send me a email: marin.jordanov@gmail.com, or give me yours...
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Dear Philipp Gernot Schneider, Marin Rumenov Yordanov, Jarmo Ville Viikki, thank you for your questions. We will get back with a response by end of the week.
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Dear @...
It would be good to give investors more information about IDF Kazkahstan:
1. What's the problem with IDF Eurasia's pending amounts not to be paid in one sum?
2. What's happening with IDF Eurasia's loan portfolio - all my loans are extended 60 or 120 days and it is deeply concerning? Give more information about Russia sanctions and their impact on Kazakhstan economy and IDF Eurasia's loan portfolio.
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@... @... @...
I just read the questionnaire/topic about "Alternative payment channels for investments in loans in Russia" ...
again... and again... you make fun of your customers!!!
If you find a way, you will know very well how much the extra cost will be. (Or the costs "for setting up and maintaining the alternative channels infrastructure" as written)
You are launching a survey, which actually includes a solution to the problem, but with a price that many investors would not agree with !!!
But you know that in view of the situation and your intolerance of customers, they will agree to these "good offers" of yours just to get some of their money back. (In fact, I am now waiting for the result of the survey, which is also anonymous !!! to show that the majority of investors agree to forgive 20% of their investments in Russian companies)I have been following your attitude towards us for several months now and I can say that legal measures will be taken against you as well.
You / your team are either too incompetent or just interested in your commissions that you generate from your clients !!!2 -
Hello,
Still I insist about crypto currencies.
I suggest to set up the following structure:
Open a bank account in Russia in Russian bank.
Open an account for trusted Russian crypto exchange.
Open an account into western trusted crypto exchange. Binance for instance (or any other that wants to deal with Mintos in this operation).
Get paid from the LOs in rubles to Russian bank account, transfer those funds into Russian trusted crypto exchange, convert them into some crypto currency, for example XRP. Then transfer those funds to the western crypto exchange and give IOUs to those currencies to Mintos investors.
Those IOUs can be converted into euros, and Mintos immediately executes the trade on Binance at appropriate spot (basically, Mintos being a middle man).
How Mintos could get paid in this? Charge a fee for the trade execution (for example, 2.5 %).
An investor can decide the moment (s)he wants to execute the trade. Generally, crypto is volatile so there is opportunity to make money in this for investors also (or lose if the investor panic sells - but that's his/her problem). 2.50 % fee in such trade is something I think the investors would accept if there is also upside to make even more money in the process. Especially, if Mintos times the RUB/crypto conversions correctly.
The investors need the full set of data for taxes, so it should be provided (all the rates, fees etc).
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@..., would you be so kind to share the answer to the following questions with me (and the rest of the community?) as well?
1) What kind of alternative methods Mintos and the LOs are preparing currently - give the investors insides of those opportunities (same as you asked Jarmo Ville Viikki)
2) Why didn't you update the info, that the russian central bank allows the euro/dollar business again - see my last post
Or does one have to threaten with a lawyer to get this information? :)
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Concerning on the Mintos update of 29th of April:
Mintos suggestion had no upside for the investors.
Basically, only costs that would lower the expected income.
This could be set also in other way: I assume not everything Russian is banned. Probably something that is directed to the emotionally motivated consumers are banned but b2b or some other similar import may not get so much heat from the general public and politicians.
Therefore, creating an import business that import such items from Russia to EU (for instance, to Latvia) and sells in euros. The currency conversion would take place according to the official rate and the Russian side of the business uses the rubles to buy Russian goods, transfers to the EU side, sells them here on EU for euros.
In this method, we could create the demand for those Rubles ourselves and get the needed euro supply by selling those items here in Europe.
The Mintos investors gets an opportunity to get equity in this company (the raised equity would represent some % of the money that is tied to Russian banks in Rubles). Most likely, it could make profit because of economy of scale, the profits could be paid as dividends to the equity holders.
The equity holders could also sell their shares to others.
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Dear Marin Rumenov Yordanov,
We don’t see how it happened that the possible costs range that might arise for the establishment of a completely new payments transfer system in another geography/jurisdiction(s) reads as Mintos inquiring investors about "commissions" we would generate for Mintos. Or how it translates to Mintos making fun of investors. This is not a correct interpretation and it absolutely does not reflect any work we did through the two big crises in financial markets starting from 2020. We firmly stand behind the professionalism of our whole team and the hard work done on multiple issues we faced together over the past two years.
So, please, let us reiterate what we already shared in the Russia and the war in Ukraine and sanctions-related information article thread, published on Friday, 29 April. The range of costs between 5% and 20% implies external costs and none of those would be kept for Mintos. The range is based on the knowns and also includes the possible unknowns. If we count that fixed external costs would be, for example, around 10%, there are also dynamic fees due to unordinary market conditions or currency exchange costs that we can’t count in as fixed from the starting point. These are, unfortunately, the unknowns. This is why we transparently shared the possible range with investors, asked investors' thoughts on it, and from here, we can adjust the following steps based on various opinions of investors, or understand whether investors want us to get into the intermediaries system setup at all.
We hope you do understand that Mintos or lending companies have no impact or responsibility for the current political situation directly impacting money flows to and from Russia. We are doing our best to find ways around the disrupted payment systems. At the same time, we need to stay within the environment of regulation-based requirements, and away from any possibility to breach sanctions. The same goes for the lending companies in Russia.
The survey is anonymous, as this is part of us being compliant with the investor data protection. Survey results are not hidden, we will share them in future communication on this topic.
We thank you for reaching out because that is the only way we can communicate any misunderstandings, or on your invitation further clarify details that don't go past the priority information that we share on the blog posts or in emails.
Thank you, and welcome to reach out to us in case of any other questions.
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@...
thanks for your answer 38 minutes ago.
But why dont you answer in this detailled kind to my questions?
1) What kind of alternative methods Mintos and the LOs are preparing currently - give the investors insides of those opportunities (same as you asked Jarmo Ville Viikki)
2) Why didn't you update the info, that the russian central bank allows the euro/dollar business again
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The good thing here is that RUB/EUR is now 70 as we speak.
If it continues this trend, it is 1-1 with euro in 1-2 months, and those RUble denominated payment quotas are starting to cover some of the Russian LO debt to Mintos investors.
Owning Rubles is better than owning bitcoins. Who would have believed so.
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Hello @...,
Can you write lists of lending companies who are clients of unsanctioned/sanctioned banks that can send payments of up to RUB 10 million per month to accounts of foreign companies?
As you write lending companies have no responsibility for the current situation, but investors as well.
To the range of costs between 5% and 20% you have estimated. Do lending companies or mintos also share the cost or you plan to have it fully covered by investors?
For loans denominated in euro, even in the past, it has always had its exchange rate risk for lending companies. I assume that lending companies are hedged against exchange rate risk and expect expensive exchange rate fluctuations.
In the moment I write this, the ruble is about 17% stronger than before the outbreak of the situation in Ukraine. even if commercial market differs from the rate published by the Central Bank of Russia of about 5-10%. Common sense suggests me that lending companies are not in the red and they could cover part of the costs from this exchange rate hedging
Lending companies do not pay us interest from the beginning of the situation.
Russia's central bank raises interest rate to 17%, so this is another source where lending companies make money from our huge amount of frozen money on US investors.
Let me remind you that loans are denominated in euros and it should be mainly a concern of the lending companies and not us investors to convert currency and pay transfer fees.
The estimated amount of 5-20% is, in my opinion, an example of the inability to negotiate fair rules with lending companies.
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The fact that Russian Central Bank "allows" EUR/USD doesn't mean you could transfer them into the EU. For the transfer to occur, Russian banks need a correspondent bank that's happy to facilitate the transfer and reconcile the balances (this is how SWIFT usually works). That's where the issue is - most international correspondent banks refuse to process the transfer, even if both lending company's Russian bank and Mintos' EU bank are willing to make the transfer.
Regarding the currency exchange rate, RUB only seems to get stronger because it isn't an open market anymore. Daily trading volume is at 0.5% of what it used to be before the war (that's 200x times less than it used to be). So while you see RUB/EUR at 70, you can't actually freely sell RUB at this price because no one wants to buy since implied price is a lot higher than that. Transactions that do occur at this price are likely gas and other essential payments, so I don't think such exchange rate will be available to us any time soon.
Regarding crypto suggestions, while individuals might transfer crypto out of Russia successfully, it's not as simple for regulated businesses. Such transactions have no way of passing standard KYC and AML checks, and hence they would be immediately deemed illegal. The funds would be seized by the bank, or later by the government, most likely without any hope of recovery. I'd prefer waiting than a guaranteed loss.
My personal view on this, I've been investing in Mintos loans for a couple of years now and I was generally happy with the recovery of COVID funds, which took more than a year and some smaller amounts in my portfolio are still pending. But it was recovered to the point where my Mintos portfolio was very healthy, although patience was required (again, took more than a year). I expect similar recovery in this case as well - both in terms of the timeframe (it won't be fast) and recovered amounts (not everything but healthy-enough).
I wish Mintos communicated better, there're a lot of unhappy people here with questions that Mintos either doesn't address or address vaguely.
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In Europe there is a bank called "Gazprom bank" that faciliates also the eur-rub conversions from European governments that need to pay their natural gas in Rubles because EU-members are considered as "unfriendly".
I think that route is the most likely one to go here if you go via traditional/conventional way.
I agree that Mintos should communicate in a clear manner. Not use complex and vague language but very clear and straightforward.
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Philipp Gernot Schneider,
1) we gave an update in the last post about exchanges https://www.mintos.com/blog/russia-ukraine-war-impact-update-swift-ban-rub-plunge-pausing-listing-new-loans-from-belarus-and-more/2) At this moment we can disclose just as much as we mentioned in the post.0 -
Hello,
Why won't Mintos follow the procedure that Peerberry is following? Repaying from the profits until the situation stabilizes?
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@...
Any news regarding...
- the status of the investors money from loans in Russia
- the actions done by Mintos in order to recover it
- the alternative payment methods you can offer to the investors0 -
Dear MIGUEL ANTONIO ABREU,
this question was already covered in this answer https://help.mintos.com/hc/en-us/community/posts/4472174640273/comments/5583307720593 .
Here is a part of it:
Regarding Peer Berry, we cannot comment exactly on the business model of PeerBery, but it looks like the funds will be repaid by lending companies which for us sounds like a Group guarantee which in our case has Mikro Kapital. Unfortunately, for other Russian companies, there is no Group Guarantee, therefore we need to look for other solutions.
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Sergio Pujol Calle, thank you for your questions. The next update is planned soon the next week, it will be published here as well.
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@...
any news about the update?
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@... @... @...
What`s going on with the "survey" and the alternative ways your team has found for the investments in Russia?
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It's been a long time I think @... and the rest of the team have prepared a perfect solution to recover RUB.
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