We are reaching out to give you the latest update on the repayments of Russian loans. We have been monitoring the situation and the effects of the sanctions on Russia and measures adopted by Russia against so-called “unfriendly states” closely, keeping the interests of our investors as our highest priority.
According to a decree issued by the Russian government, lending companies in Russia are limited in money transfers to any company in countries listed as “unfriendly states”. Limitations are aimed at debt repayment, dividend distribution, and services acquisition. Additionally, the introduced prohibitions on repatriation of capital transactions are limited to RUB 10 million per calendar month which is the maximum amount of repayment of debt to foreign creditors.
The current situation requires special readiness to address the effects of war daily, therefore, assessing the complexity of the situation, size of the obligations, and existing geopolitical uncertainty, the previous agreement with the Russian Loan Originator (Russian LO) has been adjusted accordingly:
- Repayment will take longer than within the initial schedule. Investors will be receiving principal repayments of at least RUB 10 million per calendar month (the maximum amount that can be transferred) allocated to investors once per month in line with the current Russian decree in place, on a pro-rata basis, when the actual amounts will be received from the Loan Originator. The forecast of the Russian LO is that all investments in Russian loans will be repaid in full within 3 years.
- You keep earning your interest. Together with the principal repayments, on top of the RUB 10 million that can be transferred from Russia each month, group companies of the Russian Loan Originator will be covering all interest due to investors on the full outstanding principal.
- The best effort will be made to accommodate investors that would prefer to have the chance to receive their principal as soon as possible, instead of continuing to earn interest on the outstanding amounts as set out above. Investors will have an opportunity to apply for a waiting list for faster principal repayments by sending us a message via their investor profile. Any repayments in excess of the aforementioned RUB 10m per month will first be distributed to those investors who have applied, on a pro-rata basis. The investors who have applied will still remain part of the common pool of repayment distribution. The application will be possible at any time until the full principal is repaid.
TWINO Investments confirms that the current delay in fully repaying investments in Russian loans is only due to the capital flow restrictions imposed by the Russian Federation. There are no significant problems with the repayment of consumer loans in Russia and the Russian LO has sufficient funds to settle its liabilities to investors. At this point, the protection of all creditors is of particular importance to us, therefore, we invite you to show solidarity in order to overcome the violation of the interests of European Union businesses caused by the restrictions imposed by the Russian Federation.
Statement from the Russian LO, Moneza
General Director of Moneza: ‘’We have always been committed to fulfilling our obligations to partners and customers ensuring uninterrupted operations and service no matter the external obstacles. And so far, we have always done so. However, the existing geopolitical situation together with restrictions and sanctions has held us hostage with many other companies and businesses. We treat all our investors responsibly and with dignity, and we share your concerns. I also confirm that the coverage of the investor-financed portfolio in Russia is sufficient to settle our obligations. We continuously monitor the situation and are ready to respond if any option to settle our liabilities faster arises. After initial distress caused due to loss of consumer confidence, impacting borrower behavior, in April the quality of our portfolio already was back to Q4 2021 level. So, business performance is strong and stable.”
We thank you for your patience and understanding, while the existing geopolitical conditions and corresponding sanctions are causing disruption to the normal operation of financial markets and cross-border transactions. It is important for us not only to ensure that all of our investors receive full repayment of their investment, but also that they are properly and fully compensated with interest over the extended investment term. Therefore, we believe that currently this is the most cost-effective solution for our investors we can offer.
What are the limitations for my investment to be repaid according to the initial schedule?
Lending companies in Russia are limited in money transfers to companies in countries listed as “unfriendly”, which includes the Members States of the whole European Union.
Repayments of Russian companies to non-resident creditors are limited to a maximum of RUB 10 million per month (Decree No 95 by the president of the Russian Federation from March 5, 2022). These payments can be received on the EU side only if they are made through a non-sanctioned bank, and to an EU-based bank that does accept RUB currency. Russian LO did set up such infrastructure of payments and the first calendar month of repayments will be June.
In addition, dividend distribution to non-residents is tightly controlled and has not been approved by the Central bank for the Russian LO (Decree No 254 by the president of the Russian Federation from May 4, 2022), thus, limiting the ability of the holding company of the Russian LO from other ways to receive the funds to be repaid to the investors.
When and how will I receive repayment of my investment?
You will receive a lump-sum repayment of principal once per calendar month, based on the actual cash transfer received from Russian LO. Unfortunately, we cannot set a fixed date, as payment infrastructure is not stable, and sometimes requires opening new bank accounts, moving agreements through state control in Russia etc.
The amount you will receive will be a pro-rate share in the total pool of investor receivables from Russian LO. On the same date, you will receive interest on the total investment amount outstanding accrued since the previous payment date.
Why don’t I get compensated in full through the buyback guarantee?
As per p2p industry practices, the purpose of the buyback guarantee has always been to ensure that even if the underlying borrower defaults, the investor gets their money back in full. Such a guarantee is usually issued by the loan originator; however, in some countries, there are various regulatory limits, including Russia, where embedding a guarantee within an agreement with the LO itself is not possible. Therefore, the guarantee was undertaken by the holding company, still representing a promise to the investors to cover defaulting underlying consumer loans as part of business-as-usual activities.
The existing geopolitical situation in Russia has caused disruption in the ordinary course of business activities, heavily affecting domestic and international financial market participants. Notwithstanding the introduced capital movement restrictions, we did request information on and evaluate the ability of the holding company to repay the investors without having access to money from Russia, either in the form of debt repayment or dividends, and concluded that repayment according to the original schedule is not feasible.
Considering the existing circumstances, the company reached a compromising decision, whereby the holding company undertook a significant cost-cutting and agreed to pay the investors full interest while the principal of the investment amortizes over a longer period of time.
How can I apply for faster repayment of the principal?
Log into your TWINO profile and send us a message expressing your wish to be added to the waiting list for faster principal repayments.
How will faster repayment of principal work?
The Russian LO and the holding company will continuously monitor the situation and in case it changes, or any free cash is available in excess of the aforementioned RUB 10m per month, it will be directed to repaying those investors who have indicated such a wish by applying for faster repayment of the principal. Repayment will be done on a pro-rata basis to all investors who have registered for faster principal repayment at least one day before such repayment is made.