06 September 2021
PeerBerry announces development plans

Dear Investors,

As you are aware, PeerBerry has been cooperating with a regulator in Latvia for a few years in a row (since 2019). Several very important aspects led us in parallel to consider other options for our business development. After a long investigation of other markets, we came to a final decision to withdraw our application for an IBF license in Latvia and to relocate our operations to another EU country, to Croatia, where we have a company (legal name Peerberry d.o.o) for two years already.

Below are the main reasons why:

  • Latvian regulation requires having an office and the core team in Latvia

We are Lithuanians, and we are proud of that. Latvian regulation indirectly requires us to be Latvian, however, this is what we cannot, and we are not going to change. For us, to be regulated in Latvia means that PeerBerry management including almost all our team members must be fired and new Latvian-speaking employees must be onboarded because no one from our team wants to relocate to Latvia. No one from us speaks the Latvian language. The current PeerBerry team has made PeerBerry one of the best-performing platforms in Europe. Our team is the greatest asset we have. We don’t see a point in establishing another office in Latvia with a completely new Latvian team, especially when we are in the process of having the regulated business in Lithuania. Moreover, we consider changing the team as an irresponsible step towards investors, because we cannot guarantee that the Latvian team would work better than we do.

  • IBF licensing does not cover real estate projects

IBF licensing does not cover real estate projects, which are a very important and growing part of our business. For PeerBerry, this means splitting the business into two parts. To run a real estate funding business in a well-regulated environment, we cooperate with one of the most progressive regulators in the EU – the Central Bank of Lithuania, and already this autumn we will receive the crowdfunding license. After the PeerBerry crowdfunding platform is launched, our investors will be offered to invest in real estate, business, and agro loans under the crowdfunding regulation. PeerBerry is also working on receiving an EMI license which will expand PeerBerry’s possibilities to offer new products in the future. More information about PeerBerry crowdfunding and EMI licenses can be found here https://peerberry.com/blog/peerberry-is-receiving-the-crowdfunding-license-in-lithuania/

  • Current regulation in Latvia has no relation with the regulation in other jurisdictions

Current regulation in Latvia will have no impact on the quality of lending companies, which operate in different jurisdictions. It is the responsibility of each platform to keep hands on their business partners’ performance and to onboard such business partners who are professionals at their work and who are financially capable of fulfilling their obligations to investors. Our partners are regulated, responsible, and financially strong in fulfilling their obligations, and it has already been proven during the most challenging time of the pandemic. Our investors have never had any problems with us, any defaulted loans, and any ‘money in the recovery’.

  • The investor protection mechanism under the IBF licensing raises questions

Latvian IBF licensing does not provide any guarantee for investors if the loan originator goes bankrupt/becomes insolvent. This means all remains the same as before. The protection mechanism steps in only if something happens with the platform (investment firm). In fact, investors have no actual protection because reasons, why the platform should fall into trouble, are hardly imaginable. Such protection is only based on an emotional aspect to feel more protected and is functional on the paper only. During the regulation process, a guarantee fund was discussed. We still do not have any information on how this guarantee fund under IBF licensing will work, who controls this fund, and how this fund is funded, even though we see few IBF licenses have already been issued.

For the reasons mentioned above, we do not see the point in packing the loans into Notes or securities and presenting them as something new with the same products inside, as this does not provide investors with any additional functional guarantees.  

PeerBerry relocates its operations to Croatia, a member of the EU. Investors will only benefit from it.

To implement our global strategy, PeerBerry will fully relocate its operations to Croatia, a member of the EU, before October 6th this year. Within few years, we have carefully analyzed Croatian laws. We presented our business model to Croatian authorities. Our activities fully comply with the requirements of Croatian law, and we can successfully continue our activities in Croatian jurisdiction with an official company which activity is registered to engage in financial service activities, except insurance and pension funding. Croatian local authorities are ready to implement EU-level regulation for alternative investment platforms after it is introduced.

Nothing will change for PeerBerry investors

After the relocation of PeerBerry operations to Croatian jurisdiction, nothing changes to our investors – we remain the same team, with the same office in the same country (Lithuania), and our business partners remain the same. Our investors will be able to continue to use the same products under the same conditions. The only change is that PeerBerry will be operating under PeerBerry d.o.o., a limited liability financial service company registered in Croatia, a member of the EU.

There will be no limitations introduced to investors. All PeerBerry investors are free to choose, whether to continue investing on PeerBerry or to withdraw investments:

–                           If you continue investing on PeerBerry after the relocation to Croatia, you will be only asked to read and confirm the updated User Agreement and Privacy Policy.

–                           If you would like to stop your investments on PeerBerry, just write an email about your intentions to stop investing on PeerBerry to info@peerberry.com before October 6th and your Auto Invest will be stopped immediately. You will be able to withdraw your investments after they are repaid according to the payment schedule (i.e. after your current investments will be finished and closed).

Onboarding more banking expertise into PeerBerry and raising the equity of the platform to EUR 125 000

After PeerBerry operations are fully relocated to Croatian jurisdiction, PeerBeery’s share capital, as planned earlier, will be increased to EUR 125 000.

PeerBerry is in the process of making changes in the PeerBerry shareholders’ structure. Vytautas Olšauskas, the shareholders and a board member of the specialized bank “Mano bankas” in Lithuania is in the process of joining PeerBerry as a shareholder of the platform. V.Olšauskas also is the co-founder and the shareholder of Gofingo Group, the current PeerBerry business partner. 

Financial stability

PeerBerry works profitable since the first year of operations. PeerBerry business partners are profitable. The largest PeerBerry business partner – companies operating under the Aventus Group name – earned EUR 27,4 million in net profit within the last 12 months (August 2020-July 2021). Loans issued by Aventus Group companies account for 82% of total loans in PeerBerry’s portfolio.

Heading towards our global strategy, we will continue close cooperation with the Central bank of Lithuania and with the Lithuanian P2P Lending and Crowdfunding Association on reaching our final goal – to become a fully regulated business on the EU level.

Sincerely yours

Arūnas Lekavičius, CEO of PeerBerry