The business community in Mauritius is going through a very challenging time. Most businesses have been forced to remain shut and that includes some of our borrowers. It is difficult to ignore the negative impact this second confinement has had on business.

Given the challenging circumstances, we anticipate delayed or missed repayments from borrowers, as cashflow gets severely affected for businesses. Depending on the project you invested in, you may have received emails from us notifying you of delays in your scheduled repayments. Transparency is one of our key tenets here at Fundkiss. We feel the need to shed some light on the monitoring and recovery process we have in place to protect the interest of our lenders.

Fundkiss helps businesses grow by providing them unsecured business loans, without the need for any personal collateral or guarantees. This allows us to bring a very accessible credit experience to SMEs and Sole traders, a rather underserved credit market.

Unsecured lending also means putting in place a robust credit assessment, repayment monitoring and recovery process to protect the interests of our lender.

Why might a borrower be unable to make the repayments?

Businesses tussle with risks every day. At times, these risks materialize in the form of unforeseen events that adversely impact the business and their ability to make the scheduled repayment; delayed accounts receivables causing cash flow issues, shipping delays or even a pandemic!

How does Fundkiss ensure the borrowers will be able to repay their loans?

Each loan application goes through a robust 3-step credit assessment and review process. As a part of our due diligence, we require the borrowing business to have at least 2 years of operation with the financial documentation in support. Sole traders applying for a loan at Fundkiss require at least 3 years of operation.

The credit assessment process helps us determine the repayment capacity of the business and minimize risk early on.

Once funded, borrowers then go through a weekly monitoring process handled by our  Monitoring Committee. The committee oversees the monthly repayments from borrowers and anticipates any possible delays.

What happens if a borrower misses their repayment?

The course of actions taken to deal with a missed payment escalates depending on the level of the risk. A first missed payment is addressed by our internal team whilst a third consecutive missed payment would have legal repercussions.

The first missed payment from a borrower is dealt with internally by the operations and credit team at Fundkiss. The team would establish contact through phone and email, organise site visits and work with the borrower to rectify the situation.

A second consecutive missed payment escalates the matter to the internal recovery team led by the Head of Credit. The recovery team engages with the borrower to investigate, resolve and recover the second missed payment.

A third consecutive payment puts the loan account in a ‘default status’, where the Fundkiss legal team steps in.

How does Fundkiss deal with loan default?

In case of a default, Fundkiss’ legal team will initiate the legal process to recover the outstanding loan amount. Fundkiss takes the initiative to lead this process and covers all costs associated with the legal process.

The legal team would first assess the feasibility of options before proceeding to the execution of the recovery process which includes:

• Protective measures including freezing orders.
• Court claims for recovery of the debt.
• Serving statutory demand/ bankruptcy notices and winding up/bankruptcy petitions if the demands/notices are not complied with.

Despite the current circumstances, only two of the projects funded on our platform have missed 3 consecutive payments and proceeded to the legal recovery process.

How are the investors kept notified of delayed or missed payments?

Throughout the recovery process, Fundkiss practices complete transparency. We keep our lenders informed every step of the way through email and phone updates.

Lenders are notified of all developments and all decisions taken to bring the situation under control and protect the interest of all stakeholders involved.

How can you minimize risk in your SME loan investments?

Investors can reduce risk significantly by diversifying their portfolio when investing. Investors can spread the total amount they intend to invest with Fundkiss across multiple project loans from different sectors and industries. This way, if a loan does go into default, the impact on your overall portfolio returns is contained as not all your eggs are in the same proverbial investment basket.

The more diverse your portfolio, the more stable your returns and lesser risk of capital loss.

We hope you will feel confident and more equipped to invest after knowing more about our monitoring and recovery process. We will continue to bring new projects to the platform in the coming days.

Sign up as an investor today to ensure you don’t miss out on upcoming investment opportunities with Fundkiss. Visit www.fundkiss.mu/sign-up/ today!