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European providers of alternative finance, Debitum and Mintos, slip into UK financing void caused by Brexit

European providers of alternative finance, Debitum and Mintos, slip into UK financing void caused by Brexit

With the United Kingdom poised to leave the European Union on 29 March 2019, its finance industry is surrounded by uncertainty. European financial experts are unsure whether the UK’s financial sector will benefit from Brexit, or undergo a ‘Brexodus’ as banks look to move to the continent.

The June 2016 Brexit referendum has caused a level of uncertainty around traditional investments – with uncertainty comes limited lending and borrowing. Limited lending and borrowing leads to deferred investments. Ultimately, this limits economic growth.

As more questions than answers about the future of the UK’s long-standing financial sector remain, financial experts believe that Brexit will allow alternative finance providers and investors to expand their portfolios.

The popularity of alternative finance rocketed in the UK after the global financial crisis of 2008 as investors sought out stable asset classes providing a quick return-on-investment – between 2010-2018, the alternative finance-market raised £11bn in the UK. It also grew from £3.2 to 4.6bn (43%) during 2015-2016.

Financial experts believe that the nature of alternative finance is one of the reasons it will appeal to UK investors who are seeking a stable and versatile investment as they move away from the UK’s traditional finance industry due to the slim possibility of leading international banks departing London for the continent.

In addition to the political uncertainty that Brexit brings, the economic uncertainty of the June 2016 referendum is also driving investors away from banks and towards alternative finance providers. This is down to the volatility it has caused throughout traditional markets. In contrast to traditional financing methods, alternative finance provides investors with low-risk, short-term yields with alternative finance providers offering payback times times of 2 to 6 months, whilst bank loans often have a maturity period of 1 to 5 years.

The regulatory issues that Brexit may introduce to banks and other traditional finance providers are also set to benefit the alternative finance sector. Depending on the outcome of the Brexit negotiations, regulations on banks and other such financial institutions may tighten. However, alternative finance providers are unregulated – or at least lesser regulated – meaning they will be able to spend less time on adjusting their businesses to newly introduced regulations, and focusing on lending.

A number of alternative investment companies such as Debitum Network and Mintos operate from mainland Europe, and could provide British investors with stable, unregulated investment opportunities across a number of international markets.

Alternative lenders are hopeful of increased business opportunities beyond Europe as a result of Brexit such as potential trade deals with Asia, Canada, and those already signed with six southern African states.

Both Debitum Network and Mintos are P2P lending platforms, which are aimed at connecting global investors and borrowers. Whilst Mintos issues both personal and business loans, Debitum Network works principally for small businesses seeking small loans with the loans they need to finance business essentials such as startup costs and short-term cash injections. Unlike Mintos, Debitum Network accepts both fiat and crypto-currency as a form of investment and withdrawal, and is based on blockchain technology for added security.

“It is brilliant to see that UK investors are looking at alternative finance,” said Debitum Network co-founder, Martin Liberts. “As questions remain surrounding traditional financing methods, hopefully investors will look to alternative finance thanks to its stable, low-risk nature and its quick-return on investments.”

With a no-deal Brexit seeming ever likely and another general election a possibility, alternative finance is one entity seemingly to benefit from the UK’s departure from the EU.

About The Author

SADC Correspondent

SADC correspondents are independent contributors whose work covers regional issues of southern Africa outside the immediate Namibian ambit. Ed.

Following reverse listing, public can now acquire shareholding in Paratus Namibia

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20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.