#Stikcredit 2021 H1 report has been released.

Key figures:

Profit = € 1.3m
Assets = € 12.0m
Equity = € 7.3m
Debt = € 4.6m

$Afranga answered Matti's questions about the terms and conditions of the platform:

Matti: What penalty does this refer to? Additional payments for the borrower?
7.2.5. The Loan Originator reserves the right to calculate a contractual penalty according to the Loan Agreement if the Borrower delays the repayment

Afranga: Yes, the LO reserves the right to add charges to the borrower, for example late interest, collection fee, court fees, etc.

Matti: This is contradictory with what your help says:
8.6 The Assignee understands that all of the Loan agreements contain clauses according to which the Borrower has the right to repay the loan early without paying interest or penalties and buys the Claim under such conditions. The Assignee undertakes not to bring any claims against the Loan Originator, Afranga or the Borrower concerning full or partial early repayment of Loan based on the lost profit and any other losses.
vs. Help: In the event that a loan is repaid before the maturity date, you will receive in full your outstanding investment plus the accrued interest and late interest, if any.

Afranga: The text means that the Investor understands that under the loan agreement the borrower has the right to repay the loan before maturity at the borrower's discretion and that the borrower will not pay additional interest or penalties arising from early repayment - meaning there will be no penalties, additional charges or interest incurred by the borrower for the early repayment. In the event of full or partial early repayment the investor will not hold afranga or the LO responsible for the lost profit (the future unearned interest as per the repayment schedule).
In the event of early repayment, as pointed out in the help section, the LO repays principal plus accrued interest. Now that we read the highlighted text of the assignment agreement it's perhaps a bit ambiguous and l'll pass over to Legal to put it in more explicit terms.

Matti: Can you explain these provisions some more, e.g. give an example of how the buyback obligation could result in lost profit for an investor? Other than if the loan originator goes bankrupt? I mean, I understand that in that case funds may only be recovered from the borrowers through a liquidation process but how could an exercised buyback result in lost profit?
9.2 The Loan originator hereby authorizes Afranga, in case if the Loan originator’s obligation to exercise its buyback obligations have occurred, to write off from the Borrower’s Account and transfer the virtual money equivalent to the buyback price to the Virtual Account of the Assignee immediately, without obtaining prior separate order from the Borrower. The Claim shall be considered as transferred to the Borrower from the moment of the payment of the virtual money equivalent to the buyback price in the Afranga Account of the Assignee. The Assignee shall not file any complaints against the Loan Originator or the Borrower in respect
to the exercise of the buyback obligations due to lost profit and any other damages in this respect.
9.5. The Assignee shall not make any complaints or claims against the Loan originator in respect of the exercise of the buyback obligations due to lost profit and any other damages in this respect.

Afranga: Similar case to the one above. The Investor will not receive the full interest under the Assignment agreement and in accordance with the repayment schedule, because the loan is bought back before its maturity date. The Investor will only receive accrued interest up to the date of buyback. The Investor agrees that he will not hold Afranga or the LO accountable for the unearned interest due to the buyback.

Read all questions and answers in the attachment.

Matti: I found interesting things in $Afranga's terms and conditions which are contradictory to their buyback guarantee: 12.12. In event of the Borrower’s default, $Afranga and the Loan Originator shall not assume the responsibility for the security of the Claim, and the Loan Originator does not have an obligation to repay the User its paid Claim Price or a part thereof.

It's even repeated in Liability 17.1

$Afranga and/or the Loan Originator does not have to repay or compensate to the User for the paid Claim Price or any part thereof.

Comment from $Afranga:

The buyback obligation covers the loan and our / the Loan originator’s obligation to buy back a specific loan at the nominal value of the outstanding principal plus accrued interest from you. This obligation always stands as long as it is listed in each individual assignment agreement, generated when purchasing a loan. However, the buyback obligation is not the same as the security of the claim referenced in Art. 12.12. and as mentioned in another article, security interest (if any) is not re-registered in your favour. In this regard it is listed that we don’t have a responsibility for the security of the Claim.

The third point in Art. 17.1. is declaratory of the fact that while the buyback obligations take the loan default risk from you and transfer them to the Loan originator, you should be informed additional risks which may lead to non-performance are present. For example, if a Loan Originator defaults on their buyback obligations, we want our investors to be aware that the buyback obligation might not be executed in a way that investors receive the full price they have paid for a respective claim. Of course, in such a case we will assist the recovery of any funds not duly paid by an end borrower or a Loan originator, however we don’t have the obligation to compensate you for any losses you may incur. Also, related to this declaratory article you should be informed that at this stage investors are not protected by any investment or financial compensation scheme.

Stik-Credit have published 2021 Q1 financials.

Some key highlights:
- In February 2021 Stikcredit launched its own marketplace for investing in loans - Afranga. The marketplace has been an immediate success and we've already surpassed 1 million euro of outstanding investments.
- Stikcredit ended 2020 with record results achieving 2.3m EUR in net profit up 39% from the previous year.
As the market recovered from covid-19, we've increased our marketing efforts and March 2021 was our strongest month in the history of the company lending 1.275m EUR.
- Our net loan portfolio increased by 6% since the beginning of the year and we have strong expansion plans on the local market for the present year.
- The net profit for the quarter is 0.66m EUR up 22% versus 1Q20.

$Afranga has got a good start: "It has only been two months since we launched the marketplace and we've already come a long way: We're excited to announce that Afranga has surpassed €1 million in outstanding investments!"

5 Loan Originators exited $Mintos:
- Stik Credit (Bulgaria), can get exposore to their loans in $Afranga
- Finko (Georgia)
- BB Finance (Finland)
- ITF Group (Bulgaria)
- Aasa (Sweden)

1 about to exit:
- Capitalia (Latvia), can get exposure to their loans in $Capitalia

Cream Finance is also working on it's own platform, might be one of the next LOs to exit.

StikCredit - one of $Mintos loan originators, has launched it's own P2P platform: $Afranga with interest rates up to 18%