Macro-economic risks

Although there is evidence that the global economic has been improving in recent years, concerns remain about the ability of certain EU member states and other nations to continue servicing their sovereign debt obligations. Significant economic stagnation in certain eurozone countries–especially Greece, Ireland, Italy, Portugal, Spain, Slovenia and Cyprus, stemming in part from the aftereffects of the sovereign debt crisis and domestic austerity measures–has added to concerns. The measures introduced so far to rein in public debt and fiscal deficits have promulgated weak or negative GDP growth and high unemployment in these countries. If the fiscal obligations of these or other countries in the region continue to outpace government revenues, or if banking systems in these jurisdictions destabilize, their ability to service their debts in a cost-efficient manner may be jeopardized. The recent vote in favor of the UK leaving the European Union, or Brexit, has spurred additional financial market volatility, the broader consequences of which remain unknown. Bondora Group operates in these and other countries that are likely to be affected by such developments. Continued uncertainty regarding the sustainability and viability of various international financial support programs; the prospect that other countries might experience unwanted financial pressures; investor concerns about poor liquidity or excessive volatility in financial markets; lower consumer spending or higher inflation; and/or political instability could further disrupt global financial markets and have an adverse effect on the global economy more broadly. In addition, there is a risk that a default of one or more eurozone countries, or the aftershocks from Brexit, could lead to the expulsion or voluntary withdrawal of one or more countries from, or a disorderly break-up of, the eurozone, which could disrupt financial markets and possibly trigger another global economic downturn. Such events may have a material adverse effect on Bondora Group’s business, financial condition, operational results or prospects, or cash flow.

Bondora Group has already operated in three countries – namely, Estonia, Finland and Spain – at times when they have been in recession. Consequently, Bondora Group believes it has proven the viability of its business model in negative macroeconomic environments.

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