Risks at investing at isePankur

Investing at isePankur, similarly to all other investment opportunities, carries certain risks. The risks can be two-fold: some of the borrowers might not pay back the loans (credit risk) or Sõbralaen OÜ, the company managing isePankur, might go bankrupt (operational risk).

Credit risk means that you can lose part or all your investment, in case the borrower does not return the loan. All isePankur loans are unsecured and repayments are not guaranteed. However isePankur has developed a debt settlement process with which a court filing will be made against all long term debtors, with whom no settlements can be made. The debtor is handed over to the court bailiffs who can arrest the debtor’s bank accounts, assets and income after the positive court ruling. Investor can rest assured that isePankur takes all steps allowed by law to return the money to the investor. Investor does not have to do anything. We recommend getting familiar with the loan portfolio statistics and debt settlement process before investing.

Be certain to read isePankur’s recommendations on managing credit risk.

Operational risk is very unlikely as isePankur’s management and advisory board is a team with vast experience and has managed various large projects. Additionally isePankur is focused on keeping a very low cost base and has established stringent cost controls. In case of the unlikely event of Sõbralaen OÜ-s bankruptcy, the customers would be immediately repaid any amounts they have in their isePankur accounts. The funds held at isePankur accounts do not belong to Sõbralaen OÜ-s assets (incl. bankruptcy assets). This means that Sõbralaen OÜ cannot use the customers’ funds without direct their orders (e.g. invest in overnight deposits or other investment vehicles).

The investors and borrowers are passed all of the details relevant to their accounts and related transactions after the payments have been made. All contracts signed at isePankur are valid regardless of Sõbralaen OÜ-s existence and therefore the borrowers are obliged to repay the loans according to the agreements. A new partner to administrate the existing loan portfolio will thereafter be searched in partnership with investors.

We recommend reading the overview on investment risks and the influencers of investment decisions put together by Estonian Financial Services Authority in case this is your first time to invest.