Aventus Group will finish the year 2020 with a net profit of over 10 million EUR – this is calculated according to the 10-months results and the forecast for the remaining two months.
At the end of October, Aventus Group’s equity amounted to 29,73 million EUR. The total loan portfolio of the group companies amounted to 75,8 million EUR.
Despite the pandemic situation, this challenging year is very successful for the Aventus Group. Lending volumes grew steadily in all key markets. For instance, the loan issuance growth rate in October 2020 was 42% higher than in October 2019. The Group currently has more than 4,5 million registered clients.
Aventus Group has also significantly improved its debt-to-assets ratio, decreasing it from 76% (at the beginning of 2020) to less than 59% (currently).
Currently, the Group employs more than 1 100 professionals in different locations.
Andrejus Trofimovas, CEO of Aventus Group, shares his insights on the Aventus Group business, and the pandemic impact on the lending business and answers other questions relevant to PeerBerry investors.
Aventus Group passed the exam of the first wave of the pandemic very successfully. Can you remind, especially for those investors who joined your business partner PeerBerry later, what was the key to your outstanding performance?
We were successful, not because we were simply lucky in the first wave of the pandemic. We were prepared for it. This crisis has shown very clearly who has financial muscles and who has a large debt only.
The main thing we are convinced of once again is that every crisis is an opportunity as well. Despite a complicated and unclear situation, we do our best to get the maximum out of such a situation. During this challenging year, we discovered that some markets have a higher profit potential – so we direct more funding there. In those markets where we saw it is necessary, we were quick to reduce lending due to the pandemic situation. All actions together brought outstanding results for the Group this year.
In both business and personal life, I advise everyone not to borrow more than they can give back, especially if it needs to be done in a relatively short time. If you only pretend you are financially capable, your weaknesses will come to the surface very quickly – as soon as the first problems are encountered.
Would you like to have a friend to whom you lent your money, and he/she doesn’t give your money back to you? I’m sure – not. Maybe you will forgive such a friend, but I doubt you will lend him your money again. In this business, it is the same. We don’t lend again to those who don’t want to give us money back. Investors would also not lend to us if we did not repay. Simple. Our investors are our partners with whom we want to have a long-term partnership, and the only way to have it is to keep promises. Our only strategy in terms of the partnership with investors is to settle with all investors at the agreed time. There are no other options here.
I see no reason to be proud of a large debt, so we are growing steadily and only borrowing as much as we are 100% sure we will repay. That is why we are so cautious about the high level of debt.
What threats do you see in the second wave of the pandemic, and how is Aventus Group prepared for it?
Nothing has significantly changed in our business regarding the second wave of the pandemic. We live in pandemic conditions since March. I would say now it became much easier because there is no longer such a global panic as it was in the spring. Many have already adapted to the new realities – many people are working remotely, shopping online, etc.
We tightened lending conditions in the spring, and we keep them tightened. The default rate remains stable at around 7%. This year, we have reduced the volume of long-term loans, including car leasing, because the short-term loan business is more dynamic; we can react more quickly to changes and easier predict possible consequences and prepare for them.
Aventus Group’s debt-to-assets ratio has decreased to less than 59%. This means that our liabilities to PeerBerry investors are significantly less than at the beginning of this year.
As in the past, we continue to accumulate at least 10% of our loan portfolio to settle efficiently and smoothly with PeerBerry investors in any situation.
Summarising, our team is ready for the second wave of the pandemic even better than before.
Investors are interested in how are the new Aventus Group companies doing, those that only this year started offering loans through the PeerBerry platform.
There are no miracles in business, so naturally, new companies become profitable not in the first months of operation. In the beginning, a business requires a lot of investment in the company’s infrastructure and marketing. A business needs to reach a certain volume for it to start generating profits.
According to the previous experience of the Aventus Group companies, the newly established companies usually start to generate profits after about 12-24 months of operation. Those Aventus Group companies that started operations this year are following the usual trajectory for this business.
I see a very positive development trend for all companies that became PeerBerry partners this year. Investors have nothing to worry about, as all new companies are in the hands of other profitable Aventus Group companies – if some company would run into financial difficulties, another profitable Aventus Group company would take over that company’s liabilities and would settle with all investors. However, we see no indication that the Group guarantee would be required to be applied.
The Aventus Group has provided financial support for children with serious illnesses for several years. Many companies have reduced or stopped charitable funding due to the pandemic. How has the pandemic affected the Aventus Group’s charity activities?
Aventus Group donates a part of its profits to children with serious illnesses yearly. Treating children who are suffering from complex illnesses is very expensive. As economic conditions become more difficult, we understand that many families, who have ill children, will face even greater challenges, especially in countries where living standards are relatively lower. Therefore, we continue our mission of good works without any doubts to at least make things easier for children by helping them feel better.
We did not cut the charity budget this year. Currently, we aim to donate at least 20 000 EUR per month to different charity programs to help children diagnosed with cancer and other serious diseases. In comparison, last year 150 000 Eur was donated to charity throughout the year. The total charity amount this year will definitely be higher.
We also cover all medical expenses for our employees or close relatives when needed, not only for medical needs now related to Covid-19. It was our normal practice before the pandemic as well.
Could you please share in more detail what you have specifically changed or what new directions you found in your business, and what you are currently focusing mostly on?
As I mentioned already, this year, we became more focused on the short-term lending business, as we can respond more quickly to the effects of a pandemic in this business. We reduced the volume of long-term loans accordingly.
This year has opened up opportunities for us to monitor new markets. I have mentioned before that we are testing the markets of Kenya, India, and the Philippines. New companies in these countries will be launched soon.
This year, the Aventus Group has expanded its real estate business. Aventus Group real estate projects do not participate in P2P, but possibly next year, we will offer investors some interesting projects from this part of the Aventus Group business.
Investors have been informed earlier that lenders are currently planning higher lending volumes. What Aventus Group companies are planning, and what can investors expect for the upcoming holiday month?
Yes, December is one of the most active months in the loan business every year. In December, we plan to issue about 30-40% more loans than in previous months. Most likely, in December, we will issue more than 400 000 loans per month. This number still looks incredibly high, but this is a target we can achieve. Aventus Group unites more than 1100 employees. The size of the team and lending volumes make Aventus Group one of the biggest alternative lending companies in Europe for sure.
The Aventus Group is a profitable organization since 2009. I believe that profits need to be shared – it always gives a return. We are currently reviewing and adjusting the plans of the Group companies in each country, and higher interest rates for loans issued by some lending companies will likely be offered to investors before the end of November.