We continue with our weekly updates on TWINO’s operations during the global Covid-19 outbreak. These are indeed dynamic times and we are constantly responding to the ever-changing situation. As you know, we are offering investments in four countries – Latvia, Poland, Russia, and Kazakhstan – and in each of those countries the situation is a bit different. However, at this point, we see that governments are taking action everywhere without exception. Therefore, we are reacting and taking multiple actions ourselves to protect you, our investors, and safeguard your funds, while also providing capital to those who are in need the most during these challenging times.

I will start with group-wide activities of TWINO that have already been taken and continue with country-specific actions and loan portfolio performance.

TWINO Group’s activities that we have already done:

– Reviewed our group’s costs, as a result we have been able to cut them by around 40%. These changes are temporary until we start to see positive dynamics globally, and include the following costs among others:

• Temporarily (3 months) postponed our business development projects such as the launch of the Philippines lending operations;
• Temporarily (3 months) lowered our personnel costs by 40% and management salaries by on average 30%;
• Negotiated with our partners and providers to postpone or split in instalments multiple of our larger invoices that are due in the next months.

– Updated our lending sales targets with a larger focus on higher-quality borrowers, which is possible due to a larger count of incoming loan applications.

– Introducing multiple possibilities for our borrowers to refinance or extend their loans to help them cope with the short-term challenges.

Anastasija Oleinika, TWINO Group’s CEO: “Our first priority is to safeguard investor funds and provide each investor with speed in accessing liquidity they are used to, which in these challenging times means taking aggressive steps in freeing up the capital they do not invest anymore and ramping up profitability with all means accessible to us. This will reduce our business significantly if there will be a shrinking demand for our loans; however, we trust our investors not to overreact to the negative news flow and stay with us. Our loan portfolios are performing well, our liquidity is high, and we have had not a single delay in processing withdrawal requests from investors.”

Investment Platform:

• Increased interest rates for our platform’s investors. We see this as a logical step as investors seek liquidity in times of global uncertainty, which results in a discounted value of the underlying instrument. Even in the current situation, there is still space to raise interest rates and remain profitable;
• Timely investor withdrawals. We have always managed our cash-flow with the utmost responsibility; however, now when part of investors seek liquidity, we are further prioritizing this on the group’s level;
• TWINO Ventures – secured investments in real estate – have been launched. We already see great interest from our investors and we will organize a separate webinar on 31st of March at 12 pm CET together with our real estate expert – Edgars Ivanovs. We already have multiple other projects in the pipeline and you will hear about those soon;
• We have successfully registered a new legal entity (AS TWINO Investments) that will apply for investment brokerage license in Latvia.

Latvia:

• Actively cooperating with the Alternative Financial Services Association of Latvia and governmental institutions to shape the position of non-bank lending. One of the key topics is to promote responsible lending by introducing tailored extension solutions to our clients;
• Dedicating more workforce resources to debt-collection to successfully introduce these refinancing or extension options;
• Assisting our Small-to-Medium Enterprise lending clients to receive governmental support, which would help them overcome the temporary challenges.

Poland:

• Continuous work to make all processes for clients fully electronic which are currently less developed country-wide compared to Latvia;
• Pro-active and early communication with delayed customers to better understand all individual cases;
• Individual restructuring plans for those that are already facing financial difficulties due to recent global developments.

Russia:

• Covid-19 has not impacted the country’s economy as of now and businesses are working very similarly as they were before the outbreak. It is a very different situation compared to most of the European countries;
• A plan for adjusting operations if anything changes is already in place;
• Closely monitoring 5-day delayed borrowers and no changes from usual patterns have been observed.

Kazakhstan:

• Closely monitoring the actions taken by the national government to decide on the best approach in this market;
• Penalties will not be charged to the borrowers for the next 3 months;
• Considering multiple options to offer favourable loan extensions to the borrowers.

In case of any specific questions do not hesitate to contact us.