Investors have expressed concerns about the future of Latvian peer-to-peer lender Grupeer as it becomes the latest Baltic platform to cease operations amid the coronavirus pandemic.
The platform said it would no longer pay interest owed to lenders due to the state of emergency declared across European Union member states and limits on being able to recover debts.
“Regretfully, we are forced to inform you that in the current circumstances it is not possible for us to continue operations as before with an objective cause out of our control,” Alla Kisika, chief executive of Grupeer, said.
“Therefore, we hereby notify you that all payments to investors of Grupeer are currently suspended due to emergency state declared in European Union and worldwide regarding the Covid-19 pandemic crises.
“Due to worldwide national limitations on any debt recovery procedures as well as remedies applied to borrowers, providing them with extended and postponed terms for payment obligations, the cashflow in the investment transactions has been automatically suspended.
“The closing of national borders and limiting physical movement of people has caused drastic decrease of demand for goods and services of the borrower-companies, resulting in termination of agreements and forcing many borrowers to suspend or cease economic activity. Therefore, neither borrowers nor Grupeer are able to fulfil obligations towards you, our investors.”
Kisika described the suspension as temporary but also indefinite “as it is not possible for us and the rest of the world to evaluate the consequences of this crises will leave on the investment market.”
She said there was no timeline and urged investors to be patient and understanding, adding that headcount has been reduced so it is taking longer to respond to queries.
It is unclear if Grupeer investors can still make withdrawals.
Grupeer has previously said withdrawals were taking longer due to a spike in requests.
Investors have also expressed concerns about some of the loans on the platform.
P2P blogger PeerDuck said one Norwegian borrower had applied for a loan on Grupeer but did not sign any agreement and found finance elsewhere, only for it to later appear on the platform.
One investor, Tobias Gerlach, told Peer2Peer Finance News that he has been unable to contact Grupeer and said the lack of response is a concern.
Estonian platform Monethera also suspended activity last week.
The Estonian P2P lending market is already under pressure at the moment after police launched a criminal investigation into the unexplained closures of Envestio and Kuetzal, which has left investors unable to access their funds.