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Delayed repayment, what does that mean...?

Written by Hans Kramer on 22 April 2022

While the vast majority of PlusPlus loans are repaid right on time, there are currently a few scheduled payments that are delayed. We're transparent about that. Maybe you've been notified yourself that a planned repayment to you is taking a little longer. And perhaps you are wondering what will happen next. That’s why we hereby explain what this means and how we deal with it.

 

Close contact

PlusPlus entrepreneurs are carefully selected. We not only look at why they need a loan and how much impact they can make with it, but also at the company’s viability and whether they will be able to repay a loan. Nevertheless, there are always circumstances that may prevent this from happening. A harvest may fail, market prices may fluctuate or unfavorable exchange rates may cause financial shortfalls. This does not necessarily mean that a loan will not be repaid. Sometimes they just need a little more time. 

Our local colleagues are in regular contact with the entrepreneurs on our platform. That way we know exactly when an entrepreneur cannot make a scheduled payment right away and what the reason is. That reason is important for assessing whether the business is still able to repay the loan. 

 

Different causes

There are several reasons why a company is unable to make a planned repayment, such as: 

In all these cases, we do not transfer any more money pending the agreed repayment. 

 

Sharing the risk

It has not happened yet, but it can of course happen that a company is no longer able to repay the money it has borrowed. In such a case, we first consider whether there’s a chance to recover the money via a procedure. If that’s not an option or doesn’t work, the loan is written off. To prevent investors from losing all their money in such a case, PlusPlus has set up a compensation fund. Investors can then reclaim part of their money (up to 50% of the outstanding amount) from this fund. This way, investors do not have to bear all the risks. We will explain how to claim this when the situation arises.

 

Investing in impact  

PlusPlus is not deterred by the above potential risks. We think it is too important that small and medium sized entrepreneurs in developing countries get the opportunity to grow. Despite the risks that always exist. The impact they make is more important to us than a repayment guarantee. This is how PlusPlus gives money meaning: with a bit of risk, for a big difference. 

More information about how PlusPlus handles risks can be found here