Iuvo has already taken legal measures to protect the interests of investors, affected by the end of business relations with originator Business Bank Group (BBG), and to collect the amounts due.
The legal work on the case is done by the Internal Legal Department of Management Financial Group – a holding which includes in its structure leading companies specialized in the field of non-banking financial services in Central and Eastern Europe, and which is the majority owner of iuvo.A Georgian law firm and an Estonian law firm, which is a long-term partner of iuvo, are actively involved in the process.
The Estonian law is the applicable law under the contract between iuvo and BBG. Our long-term partner in Estonia – TGS Baltic, one of the leading law firms in the region, has already sent BBG an official notice to pay and to activate buy-back guarantee for all loans that have not reached maturity.
BBG was given payment deadline until 12 February 2020. However the payment was not made within this time limit. An inquiry to a Georgian law firm has already been sent for an advice on local level. To date, BBG’s records with the Georgian Business Register have been reviewed to verify whether insolvency proceedings were initiated – but there is no such information for BBG or BBG’s parent company. Iuvo’s next step is to file a claim against BBG to the competent Estonian court, and the court’s decision shall be enforced by the Georgian court.
On 11th February, iuvo announced that it ceases work with BBG due to delayed payments by the Georgian company.
After a serious accident with the person who was the main driving force of BBG’s business, the company has been hindered to operate with its funds and to function normally for a long period of time. As a consequence, BBG has suspended payments towards iuvo, which is the reason for the decision that the platform will cease work with BBG. Another factor is the currently complicated business situation in Georgia on the nonbank lending market, as well as the depreciation of local currency. Last year, the National Bank of Georgia implemented numerous restrictions on nonbank creditors, including a limit on the annual percentage rate of charge (APR) which created serious difficulties for all companies on the market.
BBG has a minimum share in iuvo’s portfolio – under 0.4% or 66,700 euro, and investors directly affected by the end of business relations with the company are less than 1.7%.
Iuvo is the P2P platform with the strictest rules for accepting loan originators on its market, and as a result the number of similar cases and their consequences are reduced to a minimum. Iuvo started its activity in 2016, and since then has established itself as a trusted partner to more than 18,000 investors from over 130 countries who have generated investments of more than 100 million euro on the platform. The average annual return that we have brought to our investors is 9.2%. Iuvo has fully paid in capital of 1.7 million euro, and Management Financial Group (MFG) is the majority owner of the platform.
MFG manages a rich portfolio of successful business models in the field of personal loans, financing of micro and small businesses, credit cards, digital business, and other alternative financial models. The holding and its group companies are a responsible employer of more than 7,700 employees and assistants in over 450 offices in Bulgaria, Ukraine, Romania, Poland, and Macedonia, and the expansion of the holding is currently developing on the markets in Russia, Mexico and Spain. The holding’s long-term ambition is to continue to prove itself as one of the fastest growing and leading providers of fintech products and services for the benefit of investors.