As we embark on a new year, we would like to take a moment to reflect on 2022 and thank you for your continued trust and support. Despite the ongoing challenges posed by the war in Ukraine and economic uncertainty, TWINO saw opportunities for growth and progress.

To recap, let’s look back at the 2022 highlights:

• Completion of the transition period and launch of Securities. We accomplished a significant milestone by becoming a fully-fledged investment brokerage firm, transitioning to a new operational model, and launching asset-backed securities on the TWINO investment platform. The successful completion of this complex project, including the implementation of all regulatory requirements, was a testament to the dedication and hard work of our entire team and collaboration with the regulator. It reflects our commitment to providing the best investment opportunities and services to our clients.

Since the launch of the first financial instrument on 5 July 2022, TWINO has already issued Securities with a total value exceeding EUR 17 million. These Securities are backed by business loans issued to Loan Originators both in Poland and Vietnam. Here are some other noteworthy figures for our financial instruments:

• Changes in company management. Several shifts in TWINO’s management structure were made to further sharpen our focus and enhance our ability to achieve strategic priorities.

Changes include the internal appointment of a new Risk Director and Member of the Management Board Māris Čevers, and the welcoming of Helvijs Henšelis as our new Chief Executive Officer and Chairman of the Management Board, thus strengthening the board with risk management, strategic and financial planning, and operational efficiency expertise, positioning us for long-term stability and growth.

Despite the uncertain economic outlook, I’m proud to say that in 2022 we were still able to make significant progress. We remained focused and worked hard to achieve our business objectives. We are now in a strong position to capitalize on new opportunities and help our investors to achieve their investment goals in the coming year”, shares Helvijs Henšelis.

• Withholding tax rate was lowered to 5% for EU and EEA tax residents. As you may have read in our blog, a notable achievement was accomplished in 2022 by the Latvian parliament in collaboration with the members of the fintech industry – the withholding tax rate was reduced from 20% to 5% for private individuals, tax residents of other member states of the European Union (EU) or a country of the European Economic Area (EEA). We are truly happy that our efforts have resulted in the law change and are therefore making the tax environment more attractive for our investors.
• User interface and functionality updates. While preparing for the launch of financial instruments, we also redesigned the user interface (UI) of the TWINO platform, which has made navigating our platform more streamlined. We have added new features to enhance the user experience, such as the ability to filter the investments on the secondary market. We are committed to providing our investors with the best possible experience and to continuously improving our platform to meet your needs. The feedback from you has helped us greatly to improve the functionality of the platform, as well as to prioritize future developments.

In conclusion, we’d like to address some of the most frequently asked questions.

Hoffman Rezidence repayment extensions.

Global geopolitical events and economic situation have slowed down the real estate market in Latvia and the Baltics in general – transactions are happening, but at a very different pace in different segments. Therefore, also the sale of the apartments in Hoffman Rezidence is slower than initially planned, which has affected the initially planned timeline for the repayment of the principal amount of the Loan by the Borrower (SIA Kuģu 13) to the Lender (SIA OC Finance).

Precisely because of such unforeseeable external circumstances, the Assignment Agreement between the Lender and the investors (Assignees) provides for an option for the Lender to extend the term of the repayment of the principal amount of the Loan. To give the Borrower (SIA Kuģu 13) additional time to settle its obligations, the principal repayment period for 10 of the outstanding credit lines has been extended by 12 months in accordance with the Assignment Agreement. Despite the above, the Lender makes regular interest payments to the investors in accordance with the payments received from the Borrower.

Corporate changes within TWINO Group.

We would like to clarify that along with becoming a licensed entity and the completion of the transition period TWINO (AS TWINO Investments) is an investment brokerage service provider and operates separately from the lending companies. TWINO is neither the Assignor, the Assignee, nor the Borrower. TWINO handles claims in accordance with its powers arising from the Assignment Agreements keeping the interests of our investors as our highest priority.

Repayment of loans invested via assignment agreements.

We are pleased to report that our cooperating Loan Originators have made significant progress in the repayment of loans invested through assignment agreements (previous operating model). We are closely monitoring that the repayments towards the outstanding balances are made in a timely manner. As of now, repayments for loans in Poland and Vietnam have been already received and processed in full.

Regarding the repayments of Russian loans, as we have informed previously, companies are currently affected by the decree of the Russian Federation, which limits the transfer of funds from the Russian Federation to Latvia (or any other member state of the European Union) to RUB 10 million per month. We’re receiving regular transfers from Russian Loan Originator within this limit which are allocated to investors once per month, on a pro-rata basis.

After reviewing all reasonable options for alternative payment routes, it was determined that the only option that would allow transfers over the limited RUB 10 million requires approval from the Russian regulator, the Central Bank of Russia. Russian Loan Originator has turned to the Central Bank of Russia with such a request, but unfortunately, the permission was not granted.

Buyback guarantee.

There is no buyback guarantee for the Securities since these financial instruments differ from the product that we offered previously. Previously the loans were issued directly to the borrowers –individuals thus a buyback or payment guarantee (as per peer-to-peer industry practices, usually offered by the Loan Originator) would protect the investors from the default by the individuals that are the end borrowers (consumers).

Now the underlying loans behind the Securities are business loans issued directly to the Loan Originator, which means that the Loan Originator already has the obligation to repay the loan to you. Therefore, there is no need for a buyback/payment guarantee anymore as the purpose of a guarantee – to ensure investors receive their funds in case the individual consumer defaults – is not applicable anymore.

Additionally, the investors are protected by the investor protection mechanisms outlined in the Financial Instruments Market Law, MiFID II, PRIIPs, the Key Information Document (KID), the Investor Protection Law, Prospectus Regulation, and other regulations which aim to further protect the interests of investors.