Crowdyvest has said that the combination of factors around debt acquisition, failed projections and default by partners are the causes of the delay in paying back investors affected between November 2021 and January 13, 2022.
According to a statement issued, the fintech platform explained that the ill-advised debt acquisition model from Farmcrowdy as well as failed projections to onboard equity investors and long term financing, and the ongoing defaults by Crowdyvest’s impact partners led to the inability to pay all monies plus interests that should accrue on monies received via the platform.
The company also resounded that all payments and ROI were paid up till the time when impact members started defaulting as against the notion that it had started defaulting since June/July.
What Crowdyvest is saying
Commenting on the debt it acquired, crowdyvest explained that it(Crowdyvest) was established in August 2019 as part of EMFATO Group but migrated farmcrowdy members to crowdyvest with the consent of members.
“Crowdyvest fully exited EMFATO Group through a debt acquisition agreement where it acquired Farmcrowdy’s debt at the time. In pursuit of its corporate objectives, Crowdyvest continued to invest in real estate, transportation, agriculture, and telecommunications amongst other viable sectors of the economy.”
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“However, the ill-advised debt acquisition model as well as failed projections to onboard equity investors and long term financing, and the ongoing defaults by Crowdyvest’s impact partners has now led to the inability to pay all monies plus interests that should accrue on monies received via the platform.”
Also on the significant business challenges that ultimately led to its inability to pay requesting members on-demand, it explained that challenges are a direct result of delayed payments from the organisation’s impact partners with whom it has had several transactions in the past whilst also adding that delayed payment is also tied to its failure to onboard equity investors for long term projection.
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Speaking on how it is working to ensure normalcy, the company said that its independent consultants have since commenced a thorough audit of the organisation’s operations while defaulting partners have been served demand notices to expedite the payback process.
It noted, “Crowdyvest is working hard to recover all debts so that payments can commence. Similarly, the deposit and withdrawal options on the platform have been disabled to ensure that no new deposits are credited into the system while complete attention is paid to the debt recovery and payout process.”
In its reaction to the perception that crowdyvest started defaulting since mid-last year, the company in a statement to Nairametrics noted, “We have verified from our records that all payments and ROI to members were paid up till the time when impact partners started defaulting. We also did not receive any email or complaint from any member in June/July that was not resolved. There is a very marginal room for errors and this is why our communication lines have been open since business commencement so that our members can contact us directly when isolated issues like this arise.”