Interview with Envestio

Envestio is one of our favorite peer to peer lending platforms besides Mintos. We’ve managed to get an opportunity to interview Liene Meldere and Eugene Kukin from Envestio.

What differentiates Envestio from other platforms?

I would like to emphasize that the team is united by the idea to make a product that is differentiating from the general market. For instance, we are working only with the businesses, which add real value to the economy, not like peer to peer lending platforms that simply refinance consumer loans issued to private persons at abnormal interest rate.

What is the procedure when a borrower defaults on a loan?

Please read more about our buyback mechanism here.

What happens if Envestio goes bankrupt?

In an unlikely case of Envestio shutting down all the agreements will be transferred to another legal entity, which will act as a new intermediary, in order to protect the interests and investments of Envestio participants.

Who secures and provides the buyback guarantee? Envestio?

Yes.

What guarantees the payment of the buyback guarantee?

We maintain and adjust our reserves as a percentage of the total funds invested by the participants. It’s always kept in a range of 12-15% following industry’s best practices. We try to evaluate every potential borrower from various perspectives and make sure we have sufficient guarantees/assets under pledge from a company and/or its beneficial owners. In a low probably case a project default happening in future, we will chase the debtor with help of the Estonian office of a well-known international legal adviser and believe to be able to recover our funds.

Is it possible for the buyback guarantee to get delayed?

We have enough reserves to execute any buyback, so we don’t plan such delays. But this may happen in a very low probability case of many projects defaulting at the same time and/or a huge simultaneous sale of investments made by participants (more than 15% of the total investments). In such extreme cases the repayment terms may be delayed, which applies also for licensed financial institutions such as commercial banks. Also we plan introducing a secondary market in future, so that the participants could sale investments to their peers.

Is it possible for the buyback guarantee to not be applied?

Under these very extreme conditions there can be a delay. Our team would work out a unique set of measures for every particular situation. In case of a mass sale, we may think of placing solid projects for additional investment at the platform. In the case of defaulted loans there will be a recovery of the funds via an Estonian debt collecting agency.

What guarantees that the value of the loan’s collateral will cover the loan’s nominal value?

We take a 1 year period into account when evaluating every project and assets provided under a pledge. Besides most projects have personal guarantees of the beneficial owner for the amount of the loan.

Is there a risk of early repayment of the loan that would decrease the expected yield?

In case a borrower decides to return the investment earlier, he still has to pay the interest for the whole period, mentioned in the agreement we enter. However, there were no such cases in the past.

Do you plan to release financial statements?

Yes, we will prepare annual statements. All statements will be available electronically in the Estonian Company Registrar. They shall be available by the end of the first half of 2019.

Do you plan to regulate your activity through a European financial regulatory authority?

Estonian regulatory body does not issue licenses for this types of business activities (Crowd investments). But we are voluntary member of the European Crowdfunding network (ECN) association and have to comply with the highest standards as the member. As soon as the Estonian regulatory body implements a possibility/requirement to obtain the license, we will be among the first members to apply for it.

Registration

Prospective investors can sign up here.
 
Eligible bonus:
  • 5 EUR “first deposit bonus”. This bonus is paid within 24h after the moment, when at least EUR 100 big first deposit of the invited participant reaches Envestio bank account.
  • 0,5% “timespan or activity bonus”, which is calculated as a percentage of the net amount, invested through the Envestio platform by the invited participant during 270 days from the date of completing the registration. This bonus is paid on a monthly basis, before the 5th date of current month for the previous month.
 
 

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