On 24 March 2020, the Board of the Central Bank of the Republic of Armenia (CBA) published a revocation of license for the lending company United Credit Joint Stock Company, which operates under the brand name Varks. Varks, as a part of the Finko group, is represented as Finko AM on the Mintos marketplace.

The reason for the revocation, according to the announcement by the CBA, is a violation of the minimum capital requirements.

Finko AM (Varks) is now in the process of liquidation under article 2, chapter 9 of the Law of the Republic of Armenia on Credit Organisations. Finko group shareholders are communicating and working with the CBA on the details of this decision. Mintos has engaged local lawyers in Armenia and we are currently waiting for more information about the next steps to be taken in the interests of the investors on Mintos and the estimated timeline of the liquidation proceedings.

Finko CEO Janis Pizics comments on the situation:

“This comes as a significant surprise both to the local team as well as to FINKO Group. Varks is considering all legal options according to the law. Currently, a liquidation committee must be appointed by the shareholder of Varks and approved by the Central Bank. The committee will overtake all further actions related to operations as well as cash movement, focusing fully on covering all liabilities in the shortest possible time.”

Read the full statement

What this means for investors on Mintos

Starting from 25 March 2020, no loans originated by Finko AM are available for investments on the Primary and Secondary Markets on the Mintos marketplace.

Investors have invested in loans that have been issued by Mintos Finance, a Mintos group company, to Finko AM. The repayment of these loans is pegged to the repayment of the respective loans issued by Finko AM to the borrower.

Hence, investors hold claims towards Finko AM that are secured with a first rank pledge on all of Finko AM loan receivables. Also, all liabilities of Finko AM towards investors are secured by JSC Finko Group corporate guarantee. This means if Finko AM fails to fulfil any monetary claims arising from loan agreements when respective loans are due, JSC Finko Group is obliged to fulfil these obligations on behalf of Finko AM.

In light of this development, Finko AM rating on the platform will be downgraded to D. The new rating will be effective on the Mintos marketplace as of 26 March 2020.

About Finko AM (Varks)

Established in 2016, Finko AM is a universal credit organisation that offers its customers fast and easy access to funds through an effective application process. Varks.am is one of the leading alternative lending companies in Armenia. As of 31 December 2019, the company had a net loan portfolio of more than € 28 million and € 18 million equity, with its equity to assets ratio (E/A) at 31%.

Current outstanding investments of Mintos investors in Finko AM loans is € 23 772 664. There are 54 128 investors with active investments in Finko AM loans, with the average investment per investor being € 439. The current amount of pending payments on behalf of Finko AM is € 3 692 565.

We will inform you about any upcoming plans or further changes on behalf of Finko AM as soon as we know more.

March 25th, 2020

According to the announcement of the Central Bank of Armenia, the license for the business of the lending company United Credit Joint Stock Company, represented by a brand name Varks, is revoked.

Varks, as a part of the Finko group, is represented as Finko AM on the Mintos marketplace.

At the moment, we are identifying implications of this situation for investors on Mintos.

In the meantime, Mintos has suspended Varks issued loans from trading on the Primary and Secondary markets.

Updates for all affected investors will be shared as soon as we have more information. In the meantime, we thank you for your patience.