
Grupeer Suspends Payments to Investors - gdm85
https://www.grupeer.com/blog/statement-from-grupeer/
======
Animats
Reads like a typical Ponzi scheme that just collapsed.

If they were for real, they'd announce reduced revenue and show financial
statements. Sure, they're experiencing some bad debt. But not 100%.

~~~
trhway
>a typical Ponzi scheme that just collapsed.

doesn't sound that way [https://www.grupeer.com/why-
grupeer](https://www.grupeer.com/why-grupeer)

"Grupeer is different from other p2p investment platforms. We are creating a
safe environment for our clients and offer three different investment types.
Our primary objective is to bring high returns to our clients with minimal
risk."

and on the same page below:

"Secondly, investments are secured with BuyBack Guarantee. This means that if
the borrower goes bust, our partner- the loan originator is required to
buyback the defaulted loan and insure the repayment of the principal and
interest in full amount."

~~~
TylerE
> high returns to our clients with minimal risk

That's classic ponzi language.

Upside and risk go hand in hand. You can't sustainably produce one without the
other, else everyone would be infinitely wealthy.

~~~
trhway
man, it is the reason i posted it. Sometimes people completely miss sarcasm :)

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erikig
This is the first of many such organizations that are going to go through
this. All these collective funding platforms LendingClub.com, Prosper.com,
FundingCircle.com, YieldStreet.com, WunderCapital.com etc are going to be
forced to suspend payments to their investors as their clients face ongoing
economic hardships.

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bumpkinjunkie
They had me at: Register Now, Add Funds, Get Profit. I can't give them my
money fast enough....

Sounds like loan repayments (ie principal + interest) are suspended
indefinitely. This is the risk you take when you are expecting a 10+% return
on property dev and payday loan investments.

~~~
toomuchtodo
Prosper and LendingClub loan marketplaces are of similar high risk profile in
the US (the only borrowers on those platforms are those who couldn’t borrow
from banks or other traditional lenders). I expect those investors will end up
with interest and principal losses as well, the cost of investing in consumer
subprime debt.

~~~
adrr
Didn’t that happen during the last recession? I don’t understand why people
still put money into these unsecured loan companies.

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gullyfur
I believe both LendingClub & Prosper started after the last recession.

~~~
toomuchtodo
Prosper existed before the 2008 GFC/recession. I had thousands of dollars
worth of notes that went bad during it.

~~~
gullyfur
Thank you for correcting me, I was under the wrong impression

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datingscientist
For an unsecured lender, this is basically the apocalypse. Let's do the math -
numbers are US, but most of the major Western economies are going through some
version of this.

\- 30% household unemployment

\- 90+ day shutdown of most retail / service businesses

\- Implicit Mortgage and Rent holidays (no enforcement)

\- Other household assets are tanking (stocks, real estate)

\- Small business restart will be brutal, since the personal balance sheets &
credit of owners are getting devastated

So... payment on unsecured loans... bwhahahahah. Speaking as a former banker,
I'm guessing what - a 40% delinquency rate during Q2 and part of Q3? We're not
just talking about the unemployed people - others have hours cut, money lost
on investments, business slowdowns, etc.

Not to mention most of the population probably won't give a damm about you
trashing their credit score at this point. What's the point? It's all crap
now...

Oh wait... I haven't gotten to the best part. If a loan is 60 days delinquent,
these guys have to buy it back per the terms of their deal. That's why they
froze this thing...

At this point, it is a race between their cash reserves (what % they held back
to support buybacks) and the unknown peak of a massive wave of 60 day
delinquencies....

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gdm85
> That's why they froze this thing...

You're picturing it "too honest": there are allegations of misconduct which I
am afraid (given the bad quality of the recent official posts) might be true,
see for example:

[https://kristapsmors.substack.com/p/covid-19-first-p2p-victi...](https://kristapsmors.substack.com/p/covid-19-first-p2p-victims-
monethera)

~~~
datingscientist
Hmm... I agree that looks sketchy.

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taneq
If I'm reading it right, their business model is "eBay/Amazon for purchasing
secured loans", is that right?

Are they saying they're just suspending interest payments to investors, or
have they actually disappeared their investors' capital indefinitely?

~~~
csomar
> The team of Grupeer has been working with legal experts on finding solutions
> acceptable to all parties involved.

It looks ugly.

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futhey
Seems like if this wasn't a Ponzi scheme, they would stop soliciting new
investments on the homepage.

