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Impact of the War in Ukraine on P2P Lending

<article>
<h2>War in Ukraine and its impact on your P2P lending portfolio</h2>
<p>The war in Ukraine has caused mixed feelings in P2P investors. The fear of losing money from P2P investments can be seen in the massively discounted sell-offs on Mintos&rsquo; secondary market.</p>
<p>In this article, we will have a look at the current situation and give you a few suggestions to decrease the risk while increasing the return.</p>
<center>
<div class="video"><iframe src="https://www.youtube.com/embed/wJF7p2lAQZQ" frameborder="0"></iframe></div>
</center>
<h2>Current Situation</h2>
<ul>
<li>Sanctions on Russia (VTB Bank PJSC, Bank Rossiya, Bank Otkritie, Novikombank, Promsvyazbank PJSC, Sovcombank PJSC, and VEB.RF were disconnected from SWIFT).</li>
<li>Lending partners on Mintos report difficulties transferring funds from Russia to Mintos as the banned banks are often corresponding banks for smaller banks which are being used by some of the lending companies.</li>
<li>RUB has fallen by more than 33% in the past two weeks.</li>
<li>Ukraine is paralyzed. The lending business is not operational which means that there is no issuance of loans or debt collection.</li>
<li>Investment risk in neighboring countries has increased (Estonia, Lithuania, Latvia, Poland, Moldova, Kazakhstan, Belarus).</li>
<li>The value of CZK, PLZ, UAH, KZT is decreasing.</li>
<li>Most Russian lenders are still operational and profitable, the banks from TWINO, AVENTUS, and ROBOCASH (Zaymer) haven&rsquo;t been affected by the sanctions yet.</li>
</ul>
<h2>Platforms&rsquo; Reactions</h2>
<ul>
<li>Several P2P lending platforms have suspended new placements of Russian, Belorussian, and Ukrainian loans (Mintos, PeerBerry, IUVO, Debitum, Crowdestor).</li>
<li>Mintos and IUVO have stopped the currency exchange feature for RUB.</li>
<li>TWINO and Bondster did not suspend the placement of Russian loans.</li>
<li>PeerBerry has activated the Group Guarantee to cover the loan repayments from Ukraine</li>
</ul>
<center>
<p><mark>Watch our latest interview with the CEO of the Aventus Group, where we discuss the current actions regarding the recoveries of loans from Russia and Ukraine. </mark></p>
<div class="video"><iframe src="https://www.youtube.com/embed/Yn4ZpFEuzrE" frameborder="0"></iframe></div>
</center>
<h2>Investors&rsquo; Reactions</h2>
<ul>
<li>Up to 20% discounts on Mintos&rsquo; secondary market for loans from Lithuania, Romania, Russia, Latvia, Estonia, Kazakhstan, Georgia, Kenya.</li>
<li>Mintos&rsquo; secondary market is currently offering close to 700,000 loans in comparison to the primary market with 225,000 loans.</li>
<li>Investors are demanding early repayments of loans.</li>
<li>Several investors have lost money due to the fall of the RUB as platforms suspended the currency exchange feature.</li>
</ul>
<h2>Risk Evaluation of the Current Events</h2>
<p>The current crisis cannot be compared to the short-lived domestic challenges that investors faced in Kazakhstan in January 2022.</p>
<p>The war in Ukraine is also having a bigger impact on the lending sector than the start of the COVID-19 pandemic at the beginning of 2020.</p>
<p>The investment risk for P2P investors in Russia and Ukraine is at an all-time high.</p>
<h3>What to Expect</h3>
<p>Investors should expect turbulent times ahead. You can expect to experience the following:</p>
<div class="alert-box">
<ul>
<li>Payment delays</li>
<li>Losses due to currency fluctuations</li>
<li>Losses due to defaults of smaller lenders</li>
<li>Losses due to sell-offs with a discount on the secondary market</li>
</ul>
</div>
<p><img class="lazy" src="https://p2pgallery.s3.eu-central-1.amazonaws.com/currency-risk-p2p.webp" border="0" alt="currency risk p2p" width="auto" height="auto" loading="lazy" data-src="https://p2pgallery.s3.eu-central-1.amazonaws.com/currency-risk-p2p.webp" /></p>
<p><mark>This table represents the development of local currencies in Russia, Ukraine, Kazakhstan, and the Czech Republic. If you are investing in foreign currencies, you will be taking the losses. If you are investing in EUR, the lending companies are taking the losses. </mark></p>
<h3>How to Lower the Risk?</h3>
<p>There is still time to lower your investment risk by evaluating the current situation and lowering the exposure in risky countries. Here are two main factors that will help you to decrease the risk of your P2P investment.</p>
<div class="tips-box">
<ol>
<li>Invest in countries far away from the conflict in Ukraine</li>
<li>Invest on platforms with banks located in western Europe</li>
</ol>
</div>
<p><img class="lazy" src="https://p2pgallery.s3.eu-central-1.amazonaws.com/country-risk-p2p.webp" border="0" alt="country risk p2p" width="auto" height="auto" loading="lazy" data-src="https://p2pgallery.s3.eu-central-1.amazonaws.com/country-risk-p2p.webp" /></p>
<h2>P2P Lending Opportunities that are NOT Impacted by the War in Ukraine</h2>
<p>Despite the fact that some of the most attractive and high-yielding P2P loans were issued in Eastern Europe, there are still plenty of investment opportunities in other countries.</p>
<table class="comparison4">
<tbody>
<tr>
<th>Platform</th>
<th>Lender</th>
<th>Country</th>
<th>Annual Return</th>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/esketit">Esketit</a></td>
<td>Money for Finance</td>
<td>Jordan</td>
<td>14%</td>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/bondster">Bondster</a></td>
<td>Danarupiah</td>
<td>Indonesia</td>
<td>14%</td>
</tr>
<tr>
<td>Bondster</td>
<td>Lime SA</td>
<td>South Africa</td>
<td>15%</td>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/lendermarket">Lendermarket</a></td>
<td>Creditstar</td>
<td>Spain</td>
<td>14%</td>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/income">Income</a></td>
<td>Danabijak</td>
<td>Indonesia</td>
<td>12%</td>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/robocash">Robocash</a></td>
<td>RC Riga Singapore</td>
<td>Singapore</td>
<td>12%</td>
</tr>
<tr>
<td>Robocash</td>
<td>Una Pay</td>
<td>Philippines</td>
<td>11.25%</td>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/iuvo-group">IUVO</a></td>
<td>EasyCredit</td>
<td>Bulgaria</td>
<td>6%</td>
</tr>
<tr>
<td>Bondster</td>
<td>Quickcheck</td>
<td>Nigeria</td>
<td>13%</td>
</tr>
<tr>
<td>Bondster</td>
<td>ITF</td>
<td>Bulgaria</td>
<td>13%</td>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/max-crowdfund">Max Crowdfund</a></td>
<td>Max Crowdfund</td>
<td>Germany, UK</td>
<td>9.55%</td>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/evenfi">EvenFi</a></td>
<td>EvenFi</td>
<td>Italy, Spain</td>
<td>8.2%</td>
</tr>
<tr>
<td><a href="https://p2pempire.com/en/review/goparity">GoParity</a></td>
<td>GoParity</td>
<td>Portugal</td>
<td>5.26%</td>
</tr>
</tbody>
</table>
<p>Keep in mind that you are not eliminating the country's risk by investing in other countries. You are only reducing the potential risk caused by Russian invasion.</p>
<p>There is no risk-free investment in the <a href="https://p2pempire.com/en/p2p-lending">P2P lending</a> sector, and the offered annual return directly reflects the risk you are taking.</p>
<h2>P2P and Crowdfunding Platforms with Banks in Western Europe</h2>
<p>The war in Ukraine has had an impact on the banking system in both Ukraine and Russia. A potential invasion of neighboring countries such as Estonia, Lithuania or Latvia could also affect the platforms' ability to process withdrawals.</p>
<p>A preventive measure would be to invest on platforms with the investor&rsquo;s uninvested funds located in some western European countries. Here are a few options to consider.</p>
<p><img class="lazy" src="https://p2pgallery.s3.eu-central-1.amazonaws.com/bank-details-p2p.webp" border="0" alt="bank details p2p" width="auto" height="auto" loading="lazy" data-src="https://p2pgallery.s3.eu-central-1.amazonaws.com/bank-details-p2p.webp" /></p>
<p><mark>Here are a few platforms that store investors&rsquo; funds in western European countries.</mark></p>
<h2>Alternative High-Yielding Crypto Interest Accounts</h2>
<p>If you are familiar with cryptocurrencies, you might as well use platforms such as <a href="https://p2pempire.com/en/review/youhodler">YouHodler</a> where you can earn 12% APY on your EURS which is a stablecoin backed by Euro reserves.</p>
<p>The team and the platform are located in Switzerland which makes it one of the best options to invest in during this challenging time.</p>
<div class="question">Keen to earn passive income?</div>
<button class="redirect external_link_button promo" value="youhodler">Sign Up on YouHodler</button>
<h2>Impact on Our P2P Lending Portfolio</h2>
<p>If you are following our <a href="https://www.youtube.com/c/P2PEmpire" target="_blank" rel="noopener noreferrer">YouTube channel</a>, you might be aware of our exposure in certain countries.</p>
<p>Due to the escalation in Ukraine and potential threats to invade neighboring countries we have taken the following preventive measures:</p>
<div class="checklist-box">
<ul>
<li>Temporarily stopped manual and automated investments on PeerBerry</li>
<li>Temporarily stopped manual and automated investments on EstateGuru</li>
<li>Offered our real-estate loans from Moldova on Reinvest24 for sale</li>
<li>Increased our stake on YouHodler</li>
</ul>
</div>
<p>Our exposure in P2P loans is currently more than &euro;52,000.</p>
<h3>Developments on PeerBerry</h3>
<p><a href="https://p2pempire.com/en/review/peerberry">PeerBerry</a> has initiated the group guarantee by the Aventus Group to cover up for loan repayments from Ukrainian loans.</p>
<p><strong>What does it mean?</strong></p>
<p>Profitable lenders under the Aventus Group trademark are repaying the loans from Ukrainian loan originators.</p>
<p>In addition to this measure, Aventus Group is using cash reserves to repay the debt to investors within the scope of the contractual obligation. Loans that are delayed for more than 60 days will be repurchased with the buyback guarantee.</p>
<p>The current exposure of Aventus' loans in Ukraine is &euro;5.7M.</p>
<p>The initiation of the Group Guarantee means that you will be experiencing more delayed loans on PeerBerry from lenders that are also not directly impacted by the war in Ukraine.</p>
<p>While some investors that did not invest in loans from Russia or Ukraine might be frustrated with this process, it is how the Group Guarantee works.</p>
<center>
<div class="video"><iframe src="https://www.youtube.com/embed/CuWZRB2MtiA?start=502" frameborder="0"></iframe></div>
</center>
<p><mark>Here is the answer from the CEO of Aventus Group to the question about what would happen to investors' investments in the worst case scenario. </mark></p>
<h4>GoFingo Group</h4>
<p>The Group Guarantee has been also activated for the GoFingo Group that has currently an exposure of &euro;9M in Ukraine. The recovery of the debt for Gofingo is more challenging as the group isn't as big as Aventus.</p>
<p>The debt from GoFingo's loans in Ukraine is being repaid from cash reserves as well as profits from GoFingo's lending operation in the Czech Republic and its real estate business in Lithuania. Investors should expect certain loan extensions.</p>
<p>Join PeerBerry&rsquo;s <a href="https://t.me/PeerBerry" target="_blank" rel="noopener noreferrer">Telegram chat</a> to be up to date about the latest developments.</p>
<h3>Developments on Robocash</h3>
<p>Robocash has assured investors that the current crisis in Ukraine doesn&rsquo;t impact the operation of the Robocash Group or the Robocash Investment platform which is based in Croatia.</p>
<p>The finance group is headquartered in Singapore and its loan originator Zaymer in Russia doesn&rsquo;t list loans on the Robocash platform.</p>
<p>Investors&rsquo; funds don&rsquo;t transact through Russian banks but are directly transferred from Robocash&rsquo;s new bank account in the Netherlands to the holding in Asia.</p>
<p>You can read more about the most frequently asked questions regarding the current crisis in Ukraine and its impact on Robocash <a href="https://robo.cash/news/live_chat_with_robocash_executives_in_summary" target="_blank" rel="noopener noreferrer">here</a>.</p>
<p>Join Robocash&rsquo;s <a href="https://t.me/robocash_europe" target="_blank" rel="noopener noreferrer">Telegram chat</a> to be up to date about the latest developments.</p>
<div class="tips-box">
<h3>Risk/Reward Ratings</h3>
<p>Keep in mind that while we take the country's risk for P2P lending platforms during normal market conditions in consideration, we don&rsquo;t factor in the elevated risk caused by Russia&rsquo;s invasion of Ukraine.</p>
<p>The current risk and reward ratings shall represent the likelihood of a platform being able to recover the debt and protect investors&rsquo; interest.</p>
<p>Please be aware that further escalation of the war could cause significant losses for P2P investors.</p>
</div>
<div class="alert-box">
<h3>What NOT TO DO</h3>
<p>Certain opportunistic investors like to buy discounted loans or expose themselves to the Russian market in order to increase their annual return.</p>
<p>This strategy is very risky as no one can predict the future developments of the lending business in the country. The offered potential return for the risk that you are taking might not be worth it.</p>
<p>We suggest you monitor the ongoing war in Ukraine and perhaps <strong>decrease your exposure in loans from neighboring countries to lower the potential future losses. </strong></p>
<p>Keep in mind that many P2P lending platforms are operating from the Baltics.</p>
<p><strong>A potential Russian invasion into NATO states would cripple the ability to transfer money to investors</strong> and significantly decrease the liquidity of your investment as well as increase the default risk.</p>
<p>The current conflict in Ukraine is something we haven&rsquo;t lived through yet, so we are unable to tell exactly what the long-term impact on investors&rsquo; P2P lending portfolios will be.</p>
<p>We recommend taking preventive measures and increasing the liquidity where possible to avoid potential losses.</p>
</div>
<h2>Support Ukraine</h2>
<p>The only way to stop Putin&rsquo;s aggression is to help protect the sovereign European countries. We have already donated all the income from our P2P lending portfolio generated in February 2022 towards a charitable organization that helps to keep the people of Ukraine safe.</p>
<p>If you stand with Ukraine, you can donate as well.</p>
<p><strong>What you can do: </strong><a href="https://supportukrainenow.org/" target="_blank" rel="noopener noreferrer">https://supportukrainenow.org/</a></p>
<p><strong>💙💛 Donate here:</strong> <a href="https://www.comebackalive.in.ua/" target="_blank" rel="noopener noreferrer">https://www.comebackalive.in.ua/</a></p>
<p>Your donation will save lives.</p>
<p>We are monitoring the situation in Ukraine as well as the responses of P2P lending platforms. Keep an eye out for platform-relevant news in our <a href="https://p2pempire.com/en/newsfeed">news section</a>. We will also be frequently updating this article to reflect the latest developments.</p>
</article>

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Read the latest developments from the P2P lending industry as well as preventive measures in regard to the war in Ukraine. ⏩ Find out more in our article.

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Impact of the War in Ukraine on P2P Lending 

Impact of the War in Ukraine on P2P Lending

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