Before choosing any investment, it's essential to understand that all types of investing are associated with risk. At hive5, we're committed to highlighting these risks and providing solid tools and strategies to manage them effectively. Whether you're concerned about late payments, defaulted loans, the financial issues of a loan originator, data security, or IT system risks, we've got you covered. Here's how we help you navigate these challenges easily, ensuring your investment journey is both rewarding and secure.
Late and Defaulted Loans
Late payments or defaults may unsettle any investor. At hive5, we tackle this head-on with a two-layered buyback guarantee. If a loan payment is delayed by over 60 days, for consumer loans - Loan Originator and for business loans - Hive Finance will pay back your investment, including all accrued interest. It minimises exposure to bad debt and maintains confidence in your investment choices. Moreover, we have made up our rule to not wait for a delayed 60 days to pay back the loans. Thus, our remarkable track record speaks volumes, with no overdue loans on our platform.
Insolvency of Loan Originator
The financial stability of loan originators is crucial for the security of your investment. To ensure the company's financial stability, loan originators prioritise responsible lending, ensuring that loans are affordable and terms are transparent. Their unique borrower scoring system keeps default rates low, offering an added layer of protection for your investment. Also, they follow strict debt recovery processes. For instance, Ekspres Pozyczka collects up to 92.2% of the overdue amount 5-90 days past due. In addition, up to 40% of this default portfolio is recovered via sale to third-party debt collectors. So, the actual loan impairment is even lower than 7.8%, which places us in a position with the lowest loan default rate in the Polish microloans market. However, every loan originator may face financial issues due to unexpected circumstances. In case of insolvency of the Loan originator, the procedure established in the Investment Agreement signed between the Loan originator, the investor and Hive5, acting as the platform operator, would be applicable. In this case, returning the investment would be passed to the mother company, Hive Finance.
Also, Ekspres Pozyczka gives an additional liquidity buffer to protect against the risk of possible losses, which would be taken from the company's liquid cash reserve. It aims to balance Poland's consolidated production seasonality and p2p withdrawal servicing. The reserve would consist of 10% of monthly production volume (3-day production volume) consolidated (Ekspres Pozyczka and hive5) cash reserve.
Finally, we understand the importance of a financial company's transparency. Hence, we publish the financial data of all our loan originators and Hive Finance every quarter so that investors can be sure of the companies' liquidity—the financial report for Q3 2023 here.
Skin in the Game
To give you additional security of your invested funds, our shareholders provide an extra safety layer: they consistently allocate 10% of their funds for investment through hive5. It ensures that the interests of the asset's originator are aligned with investors, as both sides have a stake in the investment.
Insolvency of Hive5
Hive5 may also hypothetically become insolvent or unable to service its clients. However, we want to ensure you that our role as a strategic intermediary in the transactional process between investors and loan originators is created to guarantee the continuity of legal relationships, also minimising potential disruptions to our clients' investments.
In the unlikely event of hive5 facing financial difficulties, our commitment to transparency and client service remains unwavering. In case of hive5's insolvency, the parent company, Hive Finance, would immediately take over the obligations to creditors/investors. We guarantee the provision of complete transactional records to our investors until repaying the last debt.
Safeguarding Your Money and Data
Every user who registers on any website can face another risk - the insecurity of your data protection. Hive5 strictly follows the General Data Protection Regulation (GDPR), reflecting our commitment to data security and quality management.
Furthermore, in the digital age, cyber attack is possible. For this reason, the IT system's reliability is non-negotiable. Our company invests heavily in the security and performance of IT systems. Regular, highly qualified external audits and adherence to ISO certifications underscore our dedication to protecting your investments from operational disruptions. Our commitment to using cutting-edge technology ensures that your investment experience is smooth, secure, and efficient.
Our Loan originators strictly follow common group IT security protocols on all levels. The reliable functioning of IT systems plays a critical role in facilitating business operations.
Finally, now that we are growing bigger, we will soon introduce the Cybersecurity insurance policy coverage that will mitigate any potential third-party claims in case the worst happens.
To Sum Up
Invest with hive5, where we turn investment challenges into opportunities for growth and security. Let's embark on this journey together, maximising your returns while minimising risks.
