Nectaro started to operate in Autumn 2023 operating under-investment brokerage firm (IBF) license issued by the Bank of Latvia. The platform offers investors to invest in Loan notes backed by retail loans issued by Dynnino Fintech companies Ecofinance Moldova and Ecofinance Romania, under the CreditPrime brand.

Sigita, thank you very much for joining us today please, tell us more about Nectaro. Why the company was created and how do you operate?

Nectaro, a part of the DYNINNO Group established in 2004 in San Francisco by Alex Weinstein, benefits from the group's extensive global presence and expertise across various sectors, including finance. (DYNINNO is a group of companies providing products and services in the travel, finance, entertainment, and technology sectors in 50+ countries. Today, 5,100 professionals work in the company around the world.) The creation of Nectaro was a strategic extension of the group's financial sector development. DYNINNO, with its successful track record in lending, found the establishment of an investment platform to be a natural progression in offering a full spectrum of financial services. Our aim was to develop a customer-centric platform. Unlike our counterparts in the investment field, we have crafted a clear positioning that prioritizes the needs of modern investors, particularly Gen Z and millennials. Central to Nectaro's philosophy is the importance of financial education. The platform is designed not just for investment, but to equip users with the knowledge and tools for making sound financial choices. This approach resonates particularly with younger investors, who may be navigating these decisions for the first time. This is our opportunity to improve the existing investment culture and become an industry challenger.

We all know there are options to start an investment platform without getting a license if you do jurisdiction shopping. So why do you decide to choose Latvia and go for a license?

In fact, we believed that operating within an unregulated environment was never a viable option for us. The investment sector is inherently linked to risks, a fact well-known to all. Operating in a regulated environment allows us to minimize these risks and eliminates the uncertainty often associated with unregulated markets. Nectaro’s establishment as a licensed investment platform under the Bank of Latvia’s supervision significantly boosts investor confidence and trust in the services we provide. This licensure not only demonstrates Nectaro's adherence to EU regulations but also signifies a strong commitment to legal and regulatory compliance. 

Furthermore, our regulatory framework is a fundamental aspect of our dedication to investor security

Also, it lays with Groups and Nectaro values – taking into account that the Nectaro Team is based in Latvia and led from Latvia obtaining the license here seemed the right thing to do.

License often makes user experience worse, they have to fill longer questionaries, do some knowledge tests, and so on. So why do investors have to tolerate this and choose a licensed platform?

In my opinion, it's surprising that we haven't yet developed services with a unified identity verification database to eliminate the need for repeating the same questionnaires and processes. Such an innovation could potentially be groundbreaking. However, I firmly believe that this verification stage should not be eliminated. As mentioned earlier, investing is intrinsically linked to risks and requires specific financial knowledge. Many European investors likely recall the ease of investing prior to the era of regulated frameworks. This does not bode well for investors. I believe the onboarding process is a small price to pay to ensure that the investment platform operates legally and in compliance with regulations and that its operations are audited and monitored by independent government experts. Nectaro underscores the importance of comprehending the risks associated with investing, even within a regulated framework. Also, I would invite not to exaggerate the complexity of onboarding on regulated platforms. For investors with good intentions, the impact of UX is not significant. No platform will ask you to provide the information outside your scope of knowledge or understanding. Regulated platforms provide more transparency and are asking the same of investors. As simple as that.

Regarding investor safety, it is often assumed that licensed means safer, but a license does not make loan originator risk smaller or prevent some country risk, and there are also plenty of fraud cases in other industries among licensed platforms. So what exactly makes licensed platforms safer than non-licensed ones? 

It is quite simple: protection against fraud schemes and backup in case of risks associated with investing in platforms like ours. There are usually 3 risk levels for investors: the end borrower cannot repay the loan; the lending company goes bankrupt, or the platform itself goes under. We have done significant risk mitigation for all of them: if the end borrower fails to repay the loan, Lending Company will provide an early repay obligation (known as a BuyBack Obligation), ensuring investors will receive their invested money back. Cases when landing companies go out of business just like that are rare, that's why our business has been built with a longstanding group of companies with a high reputation, being trustworthy and reliable choices for investors. The third risk is mitigated with license and regulation set in place – if Nectaro goes out of business, the Bank of Latvia is obliged to pay back investors their money up to 20 thousand euros per investor.

How do you see the future of the peer-to-peer marketplace industry and do you see a different path for licensed and non-licensed platforms?

In our observations, we can see that investors become more educated, and that affects their investment decisions. Choosing licensed or non-licensed platforms for their safety is one of them. As the national financial authorities dive deeper into the business, it is only a matter of time before the whole industry will be regulated appropriately, and there won't be a place for non-licensed players. 

What are the future development plans of Nectaro?

Our focus is devoted to offering more investment opportunities with existing products and improved geographic diversification, as well as expanding our product line by adding new investment types and exploring new potential partnerships. Currently, we are working on adding a new country on the platform – Moldova and putting into action the re-invest tool.

Last but not least, why should people consider investing in investment platforms, especially in one like Nectaro?

Money is a resource that can both lose its value and grow over time. Investing is the smart way of using your monetary resources to improve its value and create a passive income stream. When choosing where to invest, I always advise aligning choices with individuals' goals and desired outcomes, risk appetite, and current knowledge base about investment types. The advantage that such platforms as ours give is the opportunity to start the investment journey with small sums, for example, 50 euros, just to understand how the process works and decide if this is the right choice for investors. The so-called p2p platforms are unique investment opportunity not only because of very low entree barrier and low or no fees but also because it is a fixed income investment with comparably high return. It is a great addition to any investment portfolio.

Sigita thank you very much, for your very detailed explanations and answers. Investors must understand what a license provides in practice and why it is better to invest on a licensed platform. 

We wish you all a great day and a successful investing!