When will the SME who has defaulted on their repayment obligation be brought to court?
We will only consider taking the SME to court if our attempts to engage the SME verbally or in writing (which includes the serving of legal documents) for repayments had failed. Nevertheless, as there are fees payable to the court if we initiate legal action against any SME, we will have to also weigh the cost to be incurred for such actions against the probability of recovery.
For legal actions which involve the filing of a bankruptcy application against the Personal Guarantors of a promissory note and/or winding up application against the SME, we would also require the approval from all affected Investors as they would have to bear the costs.
Nevertheless, as there are fees payable by the investors to the court if we initiate legal action against any SME, hence we will have to also weigh the cost to be incurred by investors for such actions to be initiated against the probability of recovery.