15 November 2019 Update: Metrokredit continues servicing existing loans and works with the Central Bank of the Russian Federation to resume issuance of new loans
Following last weeks’ announcement (below) on Metrokredit being excluded from the State Register of the Microfinance Organizations of the Russian Federation, which means they cannot issue new loans, the company continues servicing existing loans and collecting borrowers’ payments and passing them to investors on Mintos. Also, for loans that reach 60 days past due Metrokredit continues to provide the buyback guarantee. Looking forward, based on historic data we expect that around 20% of the current outstanding loans will reach 60 days past due with the vast majority of Metrokredit loans performing according to schedule.
Since the statement of the Central Bank coming into force last week, there have not been interruptions of Metrokredit collecting and transferring borrower repayments to investors. In the last week Mintos investors have received borrower repayments in the total amount of EUR 704 000.
The comment by Metrokredit COO Vyacheslav Krykhtin offers a re-cap of the situation and plans for next steps:
“Last week Metrokredit temporarily stopped issuing new loans. Management of Metrokredit has defined a detailed action plan on how to prevent shortcomings in the processes as soon as possible to resume lending activities and submitted the roadmap to the Central Bank of the Russian Federation. The company is determined to continue business in the long term and has requested Central Bank to resume lending operations. Meanwhile, Metrokredit continues to serve the existing portfolio. Moreover, the company’s liquidity is stable, and for loans that reach 60 days past due, Metrokredit will continue to exercise the buyback guarantee.”
8 November 2019
Metrokredit, a loan originator that joined Mintos in July 2018, temporarily has stopped issuance of new loans to borrowers. The existing investors will not be affected by this event, Metrokredit will continue serving existing loans, and investors will continue receiving repayments and interest.
According to the statement of the Central Bank of the Russian Federation issued on 6 November 2019, Metrokredit has been excluded from the State Register of the Microfinance Organizations of the Russian Federation. As a result, Metrokredit has temporary suspended issuance of new loans.
However, Metrokredit is entitled to service the loans that had been issued prior to 6 November 2019 and offer extensions according to the terms of the agreement if requested by the borrower and assessed as appropriate by Metrokredit. New Metrokredit loans will appear on Mintos marketplace, though these will be only the prolonged loans.
What does this mean for Mintos and investors
Mintos investors with existing investments in loans originated by Metrokredit will continue receiving borrower repayments as they are collected.
Starting from 7 November 2019, no new loans originated by Metrokredit (except for prolonged loans) are available for investing on the Mintos marketplace.
Metrokredit’s Mintos Rating will be downgraded for now from B- to C, as the company has a limited competitive position and will not issue new loans. The new rating will be effective on the Mintos marketplace from 12 November 2019 until further notice.
The management of Metrokredit is working on alternative solutions to continue issuing loans to their borrowers as soon as possible.
We will inform you about any upcoming plans or further changes on behalf of Metrokredit as soon as we know more.