jnm21
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Post by jnm21 on Apr 19, 2018 21:34:01 GMT
ensure that our provision fund is substantial enough to cover losses based on past performance of our loans. kuflink , did you really just say that? Have a look at the bottom of your own site, specifically the "Past returns are not necessarily a guide to future returns." This announcement is a disaster for you - you are alienating your investors at the worst time - with all the referral money about, you had rich source of investment, but now a lot of it will be withdrawn instead. Look at a £100K loan, 7% interest, £150K asset, I invest £1k, borrower does a runner day 1 & pays back nothing. The property finally sells for £86K after fees after 12 months. Under the old scheme: Investors owed £107K, kuflink share £21,400, others £85,600. Consumers get fully pay out of capital plus interest. Under the new scheme (if the PF is sufficiently funded): Investors owed £107K, kuflink share £0, others £107K. PF adds £14K. Consumers get fully pay out of capital, but no interest. Hardly equal!
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bugs4me
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Post by bugs4me on Apr 19, 2018 21:56:46 GMT
ensure that our provision fund is substantial enough to cover losses based on past performance of our loans. kuflink , did you really just say that? Have a look at the bottom of your own site, specifically the "Past returns are not necessarily a guide to future returns." This announcement is a disaster for you - you are alienating your investors at the worst time - with all the referral money about, you had rich source of investment, but now a lot of it will be withdrawn instead. Look at a £100K loan, 7% interest, £150K asset, I invest £1k, borrower does a runner day 1 & pays back nothing. The property finally sells for £86K after fees after 12 months. Under the old scheme: Investors owed £107K, kuflink share £21,400, others £85,600. Consumers get fully pay out of capital plus interest. Under the new scheme (if the PF is sufficiently funded): Investors owed £107K, kuflink share £0, others £107K. PF adds £14K. Consumers get fully pay out of capital, but no interest. Hardly equal! Must confess I'm getting more confused about this KL company strategy. The way in which the announcement was made - well there's spin which sometimes goes too far so insults the readers intelligence. In doing so I question whether KL really understands the P2P investor.
The PF will be based on KL's past loan performance - zero losses so there will be nothing in it. Assuming there will be some £'s placed into a PF exactly how will this be calculated.
jnm21 - you are an optimist. Even after the borrower has done a runner and the property is sold it will still be firmly in the hands of the platform to declare a default so the discretionary PF may pay out. As we are all aware from other platforms, there is nothing to stop KL simply announcing they are still chasing the borrower who they believe is somewhere in a deep jungle in South America but they remain optimistic. So no PF payout and KL can continue to boast no defaults - high fives all round then.
They have totally shot themselves in the foot over this by destroying their great USP. By all means reduce it even to say 10% but to stop it all together, with below market returns, a discretionary PF, etc, etc. Lucky my toe dipping was only a small four figures. It certainly won't be increasing.
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jnm21
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Post by jnm21 on Apr 20, 2018 2:26:28 GMT
bugs4me - get out of my head please! Let me clarify; had I not been too tired I was going to post a poll; which would you prefer: Reduce the skin to 10% Move to a PF As for being an optimist, that comment will have my workmates (who supposedly affectionately call me Victor Meldrew) in stiches!!! It is more a case of a little bit a novice investor, but more so being hypothetical to argue my point. kuflink will not accept that a PF is not equal to the skin with arguments on how they may behave, so let's hypothesize how the numbers don't add up even if the PF works perfectly. I think as others have said, this change, and more so the way you tried to (mis-)sell it is badly misjudged. At best it shows a massive lack of understanding (which is terrible) or worst of all a deliberate attempt to deceive or both.
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jnm21
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Post by jnm21 on Apr 20, 2018 3:07:46 GMT
Just to add, in the past kuflink took 20% against our 80%, i.e. 1/4 coverage. Now kuflink will cover (hypothetically, not optimistically or naively ) 20% against our 100%, i.e. 1/5 coverage. Clearly the same! Both coverages are equal, just some are more equal than others. Then again there is the viability issue; at present, if (sadly) kuflink went to the wall, their 20% is already in the pot. With the move to a PF, depending on the detail, their 20% 'guarantee' could go with them. Personally I think a 50% PF 'guarantee' wouldn't be as good as a 20% money down skin.
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keystone
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Post by keystone on Apr 20, 2018 9:07:47 GMT
kuflink How do these changes effect the auto invest loans on your platform? Are you still investing the first 5% in those loans or is the Provision Fund covering the first 5% only?
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Liz
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Post by Liz on Apr 20, 2018 9:33:12 GMT
The lack of information is either arrogant or KL are making this up as they go along. Or both! PS I hate Provision Funds. KL you need to up your rates by at least 300bps(basis points, i.e. 3 percentage points), to equate the same risk return as before or the PF needs to cover 100% of losses like Lendy's PF and Lendy still pay upto 13% !
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stub8535
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Post by stub8535 on Apr 20, 2018 16:41:15 GMT
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bugs4me
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Post by bugs4me on Apr 20, 2018 17:03:38 GMT
Would be even more interesting if the CEO or his deputy came onto this forum to explain in detail what benefits this gives to investors and the background thinking behind it.
It may be a minority of KF investors that are members of the P2PIF but looking at the figures, guests often outnumber members by three to one. So the audience is far larger than they possibly realise.
It's always a poor PR move when those that enacted the decision are conveniently absent and delegate to a member of staff who has to spin defend it. Tells a lot about the company IMO.
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stub8535
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Post by stub8535 on Apr 20, 2018 18:33:02 GMT
Would be even more interesting if the CEO or his deputy came onto this forum to explain in detail what benefits this gives to investors and the background thinking behind it.
It may be a minority of KF investors that are members of the P2PIF but looking at the figures, guests often outnumber members by three to one. So the audience is far larger than they possibly realise.
It's always a poor PR move when those that enacted the decision are conveniently absent and delegate to a member of staff who has to spin defend it. Tells a lot about the company IMO.
Fully agree bugs4me. Can't see the cs reps making that recommendation to the ceo directors if they have been watching elsewhere at how members talk to platform bosses though. We shall see what they cobble together and try to sneak out next Friday when vitriolic eyes are looking elsewhere😉 works for the Tory toffs! Corbyn forever😈😨
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jnm21
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Post by jnm21 on Apr 20, 2018 21:07:48 GMT
stub8535 the kuflink CEO is on twitter - I'm certainly not afraid to make the suggestion - consider it done! Welcome Narinder - the audience are listening & the mic is yours...
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stub8535
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Post by stub8535 on Apr 20, 2018 21:13:48 GMT
stub8535 the kuflink CEO is on twitter - I'm certainly not afraid to make the suggestion - consider it done! Welcome Narinder - the audience are listening & the mic is yours... Thank You. I will await the answers that will rapidly come in respect of an explanation why 20% first loss provision fund with no terms laid down about when it will pay out and the 20% skin in the game. I do hope he has his maths and logic heads available.
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sirius
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Post by sirius on Apr 21, 2018 7:29:06 GMT
I suggest that everyone withdraw any funds they presently have on the platform........and sit back and await the phone call!
It certainly got their attention on another platform.
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kaya
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Post by kaya on Apr 21, 2018 7:52:53 GMT
kuflink are taking a bit of a pounding on this board, but really their only mistake was to try and spin this change as being for our benefit (bad move there kuflink! What they are doing is an inevitable consequence of expansion plans, and brings them more into line with every other platform. Yes its good to see 'skin in the game', but this is just the way it is in this industry. What they really need to do now is get a secondary market up and running so that we can have more control over our investments.
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r00lish67
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Post by r00lish67 on Apr 21, 2018 9:03:29 GMT
kuflink are taking a bit of a pounding on this board, but really their only mistake was to try and spin this change as being for our benefit (bad move there kuflink ! What they are doing is an inevitable consequence of expansion plans, and brings them more into line with every other platform. Yes its good to see 'skin in the game', but this is just the way it is in this industry. What they really need to do now is get a secondary market up and running so that we can have more control over our investments. An SM would be helpful, but they did drop the ball on the comms massively. Initially, it's just the faux-positive update that irks, but after you think about it you wonder why anyone would now invest with Kuflink? A very new platform, untested recovery procedures, no SM, and offering DFL type loans up to 7% with no instant returns - Sound appealing? Hopefully they'll either provide an awful lot more assurance about how this provision funds differs from elsewhere, or do a graceful-as-possible about face. Perhaps there'll be a few who just continue to blindly invest, there always is, but it's certainly not going to be concept to support their 'growth plans' as it stands.
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Post by Ace on Apr 21, 2018 9:06:09 GMT
I disagree. They are not like the other platforms as they offer lower rates for similar investments. That was fine when they had a 20% skin, but not any more.
Edit: crossed with r00lish.
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