Venance: Alejandro Muszak, founder of a fintech company that has investors in Argentina and Uruguay, speaks after the raid

“We are at the disposal of Justice,” says Alejandro Mushak, founder and number one of lustArgentine fintech company participating in a court case in which thousands of people report debts and breaches of contracts. “We are committed to fulfilling our obligations,” insists the businessman.who was raided yesterday at his home in Buenos Aires.

He The legal scandal started in the case of alleged fraud, which is moving forward in the Court of Investigation No. 3 of Ushuaia, Federico Vidal, and there are about 3,000 investors involved in the company who have not received their debts since last month. In this context, justice acted with seven raids on Mushak’s home and six other locations to search for clues, documentation, ledgers, and other items.

lust is financial company engaged in issuing loans or financing consumption (household appliances and motorcycles) low-income segments of the population with high credit risk, from which it charges higher rates than banks. To finance himself, he received funds from private trusts, with the promise of high returns to those who invest in these instruments.

After raids and investor claims, Mushak admits there were debts, and claims that these non-payments are related to the “growth in arrears” in his client portfolio. And while the lawsuit is underway, the company has laid off about 200 people as part of a “cost-cutting plan” to keep operations going. Despite their debts continues its operations in Argentina, Uruguay and Spain and seeks to attract new customers.

“We compete with banks that have cheaper funding. This is a business with much lower margins due to the existing competition. In addition, there has been an increase in offenses in this market for two years,” defends Mushak, from whose home $80,000, $3,855, four cell phones, two tablets, two laptops, three netbooks and an external hard drive were seized. . .

“The reason for the situation that Wenance is going through today is the result of an increase in NPLs in the portfolio it has today. We provide loans and finance the purchase of household appliances and motorcycles. In motorcycles on the market, the delay was 11% and now it is 19%, and in household appliances it has increased from 14% to 23%”, says the businessman, who admits that he has 150,000 active clients today.

Why did the company allow these defaults?

-This This is not a situation that only Venans faces, it is faced by the entire market. As a result of inflation, which undermines the ability of people to pay, the entire industry suffers from non-payment. Not only Venance. And the offense is expressed after having borrowed. This is after the fact. You can borrow when the client’s situation is healthyEverything is fine check, but later his situation becomes complicated and leads to non-payment of the loan. As you can see these symptoms are getting better, but The macro situation in Argentina is unusual in the whole world, it is not easy.

– But why does this concern Venance, and not the rest of the market?

“We didn’t have enough time to correct this rise in crime with action. Wenance is a BCRA regulated company that provides non-financial loans. This regulation, adopted several years ago, obliges us to disclose everything about our activities: interest rate, loan conditions, and the administrator of the Promotora Financiera (PF) trust is regulated by the CNV. Wenance is a lending company that sells and collects loans, and those loans are used to securitize titles held by Promotora Fiduciaria (its president Martin Santiago Albasens is also accused of the case) and people invest in those titles. Wenance is the guarantor of the payments that Promotera Fiduciaria makes to investors. and we are concerned and busy responding to this non-payment.

Why didn’t you pay?

–Increase in arrears means titles are not being paid, therefore Wenance, being the guarantor, must take care of this payment. Because Wenance cannot be held responsible for all of these payments, although it does make reasonable efforts to collect them, they do have some legal requirements., from people who invested in a trust and did not receive a salary, for which we are the guarantors. AND it was not collected due to the high overdue debt on this loan portfolio.that support these titles. Wenance makes payments and we never have any money left. We are the guarantors of these titles for the equivalent of US$35,000 million. This means that there is a debt for the amount that these titles have to creditors. But over the past four years, we have paid out $245 billion. In other words, they exceed the amount of debt he has, further removing the presumption of fraud. There has been a lot of talk in the courts about the presumption of fraud, and this is not possible if someone pays more than they should.

– Why is there talk of alleged fraud and why is the justice investigation moving forward?

–I understand it These are legal strategies from lawyers who may not understand that the reality Venance has been exposed to is an economic reality and not typical of a malicious company. which was intended to deceive. Venance has a 20 year history. And these private trusts are the funding vehicles that all non-financial lending companies need to grow. Wenance has and complies with government financial trust programs. He paid the last one last month with an AA- rating from the S&P. And it reinforces the idea that we are a company that does the right thing, in the best possible way.

– What exactly happened to Venance to get to this situation?

–You have probably made mistakes in business. It is clear that the reason for the default is the high level of arrears. There are companies that operate on their own funds, and we compete with banks that have cheaper funding and a different ability to lose money. The Wenance client is in the bank, but does not have access to its financial products. Banks can afford to lose money, but Venance can’t because not having a fixed-term instrument that is cheaper in exchange rate than a trust, costs are higher.

-What will happen to outstanding payments?

– Wenance has three focuses today. The company continues to operate in Spain, Uruguay and Argentina. Secondly, we are focused on reducing costs for both personnel and suppliers. And thirdly, we strive to fulfill our obligations in order to ensure equal recovery conditions for all creditors.

What does equal conditions mean?

-What all creditors are equally important, whether they are small or large.

– Are you thinking about any restructuring or changing payment terms?

-Today, I can say that we are working to ensure that Wenance continues to function as a company and we can work to ensure that our creditors can recover. I wouldn’t talk about taking it out or anything like that because that’s not our goal. Today, the company’s goal is to remain what we have always been, and, above all, the concept of fulfilling obligations to creditors is very important.

Why were there raids?

– This is part of the judicial procedure, which does not mean that we are hiding information, quite the contrary. It was a raid under normal circumstances where we provided the authorities with the public information that the regulators have about us and the creditor information that the trust administrators also have. A raid is not the same as something forbidden or hidden. We are a company that has all the information in order, and what we have done is to provide it. We act spontaneously in all cases, offering justice all the elements that help to clarify these events, and I insist that we are not going to hide anything. We are at the disposal of Justice. It is in the hands of our lawyers.

Why were there layoffs?

– When a situation arises in a company, similar to the one that Venans is experiencing, it is logical to ensure its viability. Need to grow at low cost. We are focused on not duplicating roles or responsibilities, on working from Argentina serving other countries, and on keeping the jobs needed to sell, serve customers well and get paid. We postpone technology projects. We focus on what is needed.

-How much did it take?

– I can’t tell you now, but this is a serious staff reduction. About 200 people.

-How do you plan to restore the collection in order to be able to pay these debts?

– We are making adjustments that are related to providing better quality. We analyze all the mistakes that we could make. As loans become more restrictive, we introduce extreme collection measures.

Do you see room for improvement?

-Certainly. We are doing everything possible. I work at Wenance with the same responsibility as on the first day. My company is my life. I have a team behind me that supports me, they are convinced that the company can move forward. I devote 24 hours a day to solving this problem. We believe that this is a bad moment, but the company is going to move forward and, above all, with the main goal of fulfilling its obligations and our debts.