Several crowdfunding and crowdlending platforms halt operations due to COVID-19

The list of ‘frozen’ services includes Town Money, Lendly.ru, and JetLend. These platforms are not the only projects that have halted operations during the coronavirus pandemic.

According to RBC, Lendly.ru, Town Money, and JetLend are halting operations either in part or in full. Town Money will no longer offer loans to companies in the industries that have suffered most due to the coronavirus pandemic. Event organizers, restaurants, hotels, and projects focused on import and export operations were all left without an opportunity to receive financial assistance until the end of May. According to Town Money, loans to these types of businesses took up 27% of all the loans offered by the company, with government orders accounting for the largest share of the company’s revenue.

Lendly.ru did not offer loans with real estate guarantees to small and medium businesses until the beginning of May, while the JetLend platform stopped approving loans for all companies. JetLend representatives announced that this decision was necessary to ‘calibrate the risk system’, with the service starting to assess loan applications on April 20.

As you may recall, the StartTrack platform stopped operations on April 14. The company CEO Konstantin Shabalin announced that the risks of conducting business built on credit funds significantly exceed the potential earnings of investors offering these loans.

Crowdlending is a form of crowdfunding, where individuals invest in loans for legal entities with the goal of receiving profits in the form of interest. The key distinction of this model is the fact that the financing process does not involve banks and other financial organizations.