The ability to "survive" is part of the Moldovan business DNA

Interview with Dumitru Svinarenco, CEO of Microinvest and Pavel Zingan.

Hello, Dumitru. In the current crisis, bank executives avoid commenting. However, credit organizations, being smaller, are more receptive and open to communication. So, thank you for agreeing to give an interview right now.

Pavel, it’s no problem. However, I would like to clarify the measure. Do you know the total amount of the Microinvest loan portfolio?

I recognize. Unfortunately, I did not specify before our discussion…

MDL 1 billion 960 million. If we put Microinvest Microinvest in the rating of banks, our company would be on the sixth place in Moldova, according to the loan portfolio.

Then our discussion becomes even more interesting. I was convinced that the majority of the company’s portfolio consists of loans for individuals. However, it seems that we can approach the subject that is closer to me. Business. Right?

Yes. To make it easier for you to understand, Microinvest has about 4,000 business clients and around 36,000 debtors whose income consists mainly of salaries. At the same time, it is obvious that business loans cover the majority of the portfolio – about 70%.

So, to conclude the introductory part, what is the source of financing for the lending activity? Judging by the amount of the loan portfolio, of course it’s not about a group of individuals?

Microinvest has a successful cooperation with over 13 different foreign creditors. Many of them provide funding for entrepreneurship development, including FMO, DGGF, the Dutch government, DFC (WBC) US government and many other specialized development funds: Blue Orchard, DWM, Triple Jump, Symbiotics…

I think my next question will be a suitable one, although some businessmen may not like it. Don’t you get the impression that some entrepreneurs have a childish opinion that banks and lending organizations should give up payments on loans and interest during the emergency period? Or, at least, reschedule them, reduce interest rates, and generally be “understanding.” At the same time, the state does not plan to provide aid to banks, especially to credit organizations…

As much as a manager of a lending organization can afford it, I am on the side of business. The crisis is an unexpected blow for everyone. Of course, we have gone through some crises in the past, but this is the first time when companies have had to close for an indefinite period./p>

Therefore, the first thing we did was to amortize to some extent what is happening to our debtors. We canceled the penalty for the entire loan portfolio from March 17 to the end of May.

In my opinion, it is a balanced decision. There are examples on the market of canceling the repayment of loan installments, but I believe that canceling the penalty is enough to avoid further companies’ temptations to defer payments. In my opinion, if a company has money in times of crisis, it makes no sense to accumulate debt for later. And for those who are in a difficult situation, canceling the penalty is enough help. What are the company’s plans for restructuring?

Our loan officers and call center work with each client individually. If a customer has the possibility to pay the debt, we recommend doing it. As we said, accumulating debt doesn’t make sense. We decided not to complicate the situation and drew up a single “package” of restructuring measures. I will not go into details now, but its goal is to return each client debt to the current amount in a maximum of 9 months.

Dumitru, I understand that in the present conditions it is not the case to make forecasts. But still, I want to understand what we can expect in this situation. What is your opinion? Especially considering that you have 4,000 business clients. The company must plan the steps to be taken…

It’s more about strategy than forecast. The situation with the agricultural sector is the clearest. The credit cycle related to it is quite specific. Under normal circumstances, agricultural enterprises do not make payments for up to 9 months. In addition, I believe that in the current crisis, the food sector will be affected to a lesser extent, especially the part focused on the internal market.

As for other sectors, the most affected ones, it is time to prove that our organization is indeed a “trusted partner”. For example, restaurants … Now, they will need money to “restart”, because they have lost practically all the stocks of current assets due to quarantine. In addition, I do not think that a single tranche of credit will be enough, it may need two or more. But what I want to say … My team and I joined Microinvest in 2015, it was a difficult period for the company, and we focused on crisis management. We did it. I am convinced that the ability to “survive” is part of Moldovan business DNA.

Do you have enough reserve to take on the role of shock dumper for the real sector, at least for the company’s clients?

Currently, Microinvest has accumulated reserves to cover risks, also do not forget that our creditors are practically institutional. The finances they offer are not only the money of companies, but the money of governments and their mission is to support entrepreneurship, including in Moldova. Thus, from my point of view, the prospects for 2020 are obviously not optimistic, but we should certainly not panic. I think we can handle it. And businesses as well.

Pavel Zingan

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Client's Name
Client's Surname
Personal Identity Number
Currency
Term
Rate
Amount
Monthly payment
Amount to receive
Purpose
Comments

1. Name and Contact Information of the Creditor
Creditor
Address
Phone number
Email Address
Web page

3. Costs of the credit
Rates related to the credit
Annual Percentage Rate of Charge (APR) This is the total cost expressed as an annual percentage of the total amount of credit. The APR is there to help you compare different offers	%
In order to obtain the loan in accordance with the agreed terms and conditions, it is mandatory to conclude an insurance contract to guarantee the loan or a contract for another ancillary service.
Related costs
Any other costs deriving from the credit agreement	Fee for services rendered in relation to usage of credit, calculated and paid as follows: of the credit and paid by the Debtor on the date of granting the credit from own sources or is deducted by the Creditor from the amount of the credit The negotiation / prolongation of the credit can take place by mutual agreement of the parties, by signing an additional agreement, the Creditor being entitled to request an increase in the interest rate within the limits provided by the legislation in force. In case of negotiation / prolongation of the loan, the Borrower shall pay to the Creditor, at the date of the negotiation / prolongation a commission in the amount of 2% from the credit balance at the time of negotiation / prolongation.
Conditions under which the costs related to the credit agreement can be changed	The Sides can change the costs related to the credit by written agreement signed by both parties; For the non-constitution of the guarantees within the agreed term, the Creditor is entitled to calculate, and the Client will pay to the Creditor an Interest of delay in the amount of 5% annually, applied to of the daily balance for each day of delay, starting with the date following the term established for the constitution of the guarantee/ s and until the date of the proper execution of the respective obligation.
Obligation to pay for notarial fees / mortgage registration fees / fees for noting the prohibition of pledge in the Transport Register related to the pledge of means of transport (agricultural machinery)	Paid by the Client , except as otherwise provided in the pledge / mortgage agreement.
The cost for the valuation of real estate proposed in pledge	Paid by the Client directly to the Evaluator
Costs in the case of late payments Missing payments could have severe consequences for you (e.g. forced sale) and make obtaining credit more difficult
The repayment of the loan is free of charge in the secondary offices of the Creditor, as well as at the discretion of the Debtor through the representatives authorized to collect loan payments. The list of which and their fees are published on the website of the Creditor (www.microinvest.md/cum-achiti-creditul/). In case the Debtor use payment methods with fee, the Debtor cover all the costs of repayment of the loan and undertake to make the payments in such a way that the Creditor receives the agreed repayment amount and without any deductions by third parties processing the refund payment.
In accordance with and arising from the provisions of art. 15, para. 7), lit. a) from Law no. 202/2013, any payments related to the granted credit (commissions, taxes, penalties, late interest and any other type of payment), except interest, will be applied and collected within the limit of the ceiling of 0.04% of the total value of the credit per credit day multiplied by the number of days of actual use of the credit (hereinafter 'Ceiling'). Therefore, the Lender will be entitled to apply and collect the costs, excluding interest, exactly in the fixed or percentage amount established in the contract if the said ceiling allows, and if the ceiling is lower than the value of at least one cost, excluding interest, then the Lender will be entitled to reduce the fixed/percentage amount and apply and collect any of the applicable costs only within the limit of the ceiling value. When calculating the ceiling, the costs already applied and collected will be taken into account, with the exception of interest, which reduces its value. (Representative example: if the amount of the penalty is 20 MDL per day, and the ceiling value at that time is 16 MDL, then a maximum of 16 MDL will be collected).

4. Other important legal aspects
Right of withdrawal You have the right to withdraw from the credit agreement within a period of 14 calendar days	Yes
Early repayment You have the right to repay the credit early at any time in full or partially	Yes
The creditor is entitled to compensation in the case of early repayment The Debtor may repay the loan in full or in part in advance, notifying the Creditor in writing 3 days in advance, and paying an early repayment fee of:	% from early repaid amount, if the period of time between the date of early repayment and convened maturity exceeds one year; % from early repaid amount.The early repayment can be made only if the Debtor has no outstanding debts on interest or other amounts to be paid in accordance with the Contract. % from early repaid amount, if the period of time between the date of early repayment and convened maturity does not exceed one year.
Database usage The creditor must inform you immediately and without charge of the result of a consultation of a database, if a credit application is rejected on the basis of such a consultation. This does not apply if the provision of such information is prohibited by law or is contrary to objectives of public policy or public security The parties may agree on additional terms and conditions, which will be included in the credit agreement.	Yes
Right to a draft credit agreement You have the right, upon request, to obtain a copy of the draft credit agreement free of charge. This provision does not apply if the creditor, at the time of the request, is unwilling to proceed to the conclusion of the credit agreement with you	Yes
The period of time during which the creditor is bound by the pre-contractual obligations	This offer is valid for 15 calendar days after it is issued.
In this regard, I subsequently declare that: I was provided with the necessary information, the essential characteristics of the above-mentioned credit product were explained (interest rate, number of commissions, credit costs, early repayment conditions, total amount to be paid), as well as the consequences of non-compliance with contractual clauses; the costs included in the total cost of the loan were explained to me, including the costs for ancillary services related to the credit agreement; I was offered the possibility to negotiate individually the contractual clauses in the credit agreement that I intend to sign, I negotiated individually the granting commission, the monthly commission, the amount of penalties and I mention that its clauses do not disadvantage me, being fair in the report mine with the creditor; I was asked by the creditor about the probable importance of the information provided and whether essential circumstances that I expected to be provided were not omitted in order to make an informed and rational decision about concluding the potential credit agreement. the information provided and the corresponding explanations allowed me to assess, including the personal analysis of other offers of third party creditors, whether the proposed credit agreement is tailored to my needs and financial situation; I know the content of the contract and all its conditions have been explained to me, I have understood and accepted them, and the documents and information underlying the conclusion of the contract are complete and accurate; I know the law, the normative acts that will govern the contract, as well as the lack of consumer quality; I have no ambiguities or misunderstandings regarding the terms of the contract; the credit product corresponds to the purpose described above and will be used according to the destination and the economic activity carried out. The assets procured/resulted/constructed/repaired from received loan sources will be registered/transmitted in the social capital of the company where my business activity is carried out and/or will be used jointly by the members or individually however strictly for running my business activity. (Signature)