Investment risks

The goal of investing is generating a profit. Success requires understanding & skillful risk management.

Money makes money

It's crucial to grasp that all types of investing carry risks, which is entirely normal. Market events beyond the control of investors or market participants, such as economic downturns or geopolitical events, can cause the value of investments to decline. However, there are manageable risks that investors should address. Remember, your risk tolerance is personal, so only you can determine what you're comfortable with.

Let's explore the risks on Nectaro and how you can handle them. Nevertheless, it's essential to understand that managing risk doesn't eliminate the possibility of losing part or all of your invested funds if some risks materialize. Smart investing means balancing risks and potential rewards effectively.

Risks related to the underlying loans

The borrower might delay scheduled payments or declare bankruptcy.
Risk management

Lending company offers a buyback obligation in case the underlying loans are underperforming.

Additionally, Nectaro's responsible team members diligently monitor the performance of underlying loans, promptly responding to alarms and taking necessary measures when needed.

Risks related to the lending company

The lending company may become insolvent, become unable to service loans, or stop cooperating with Nectaro.
Risk management

Nectaro ensures transparency and security in its collaborations with lending companies to protect our investors. We have a thorough onboarding and due diligence process, this ensures that all partners meet certain minimal criteria and receive legal opinions on the risks involved.

Rest assured, we actively monitor lending companies, keeping a close eye on their financial, operational, and regulatory status. In case of any issues, we have established security mechanisms to collect debt.

As an investor, we encourage you to review the Base Prospectus of any financial instrument. This will provide valuable insights into potential risks based on descriptions, historical performance, and other relevant data of the lending company.

Risks related to Nectaro

Nectaro may become insolvent, its license may be revoked, or the company may become unable to service its investors.
Risk management

Nectaro is an authorized investment firm and a member of the national investor compensation scheme under Directive 97/9/EC. This scheme is designed to protect investors by providing compensation in case Nectaro fails to return financial instruments or investor funds.

Please note that the maximum compensation an investor can claim under this scheme is 90% of their net loss, up to a maximum of €20,000. However, it's essential to understand that the scheme doesn't cover investment risk, such as poor performance of underlying loans, borrower default, or lending company default.

Risks related to the issuer

The company issuing the Notes may default on its obligation or become insolvent.
Risk management

The issuer is established as a special purpose entity. It is a wholly owned Nectaro company (SIA Nectaro) not engaged in any other business activities, thus limiting the default risk of the issuer.

Conflicts of interest risk

The interests of investors, the lending company, the issuer, and Nectaro may not always align.
Risk management

Nectaro has established internal procedures to detect and address conflicts of interest. You can find detailed information in our conflict of interest management policy.

Lending companies fund loans initially from their own budget and may not be certain of selling them to investors. Rest assured, all loans come with a buyback obligation. If a loan underperforms, the lending company will repurchase it.

Regulatory and compliance risk

Lending companies and Nectaro abide by laws and regulations in their operating geographies. However, the regulatory landscape for alternative investing and lending is relatively new and can change.
Risk management

At Nectaro, we closely monitor regulatory developments and adjust our strategy accordingly. Additionally, as part of our due diligence check, we assess the regulatory environment in which a lending company operates.

IT system risk

Nectaro, as an online investing platform, relies on IT systems to operate. Any failure or breach of these systems can impact our ability to serve our investors.
Risk management

As a licensed investment firm, Nectaro adheres to regulatory requirements concerning our IT systems. These regulations prioritize robust IT processes to minimize risks of failure. The regulator conducts audits to ensure our compliance with these requirement.

Risks related to cooperation with external partners

To provide the service to our investors, Nectaro collaborates with external partners, including banks and web service providers. Any issues with these partners might temporarily affect certain services.
Risk management

We take partner selection seriously and have backup service providers whenever possible.

Please note that for more specific details, you can find comprehensive information in the Base Prospectus for each lending company* of notes. This document provide in-depth insights into the investment process and associated risks.

*We wanted to clarify a term you may come across in our official documentation, such as procedures or the base prospectus. We refer to "Lending Company" as "Loan Originator." It's just a different name for the same concept. Rest assured, it doesn't change anything about the investment process or how everything works. We use "Loan Originator" as a standard term in those documents to make things more clear and consistent.

Unlock the potential of your money today!

A licensed European investment platform.

Investing in financial instruments involves risk. Keep in mind that there's no absolute guarantee of getting back the full invested amount.

SIA Nectaro (registration nr. 40203016025; legal address: Jeruzalemes 1, Riga, LV-1010, Latvia) is an investment brokerage firm licensed by Latvijas Banka (address: K. Valdemara 2A, Riga, LV-1050, Latvia). License number 27-5520233.

Nectaro is a member of the national investor compensation scheme established under EU Directive 97/9/EC. The scheme protects investors by providing compensation if Nectaro fails to return financial instruments or cash to investors. The maximum compensation an investor can claim under the scheme is 90% of their net loss, up to a maximum of €20 000.

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