MarkT
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Post by MarkT on Feb 20, 2016 20:35:16 GMT
As a P2P newbie having recently joined Ratesetter it's becoming obvious there is a bit of a problem. On several occasions there have been no borrower offers in 3 out of 4 markets. I suspect that this situation is going to get worse when the new "Innovative" Financial ISA comes into being.
The reason for this imbalance is that P2P has been sold , almost entirely, on the benefits to lenders looking for a better rate of return than the pathetic rates offered by the banks and NS&I or the roller coaster ride of the Stock Market. Very little has been said regarding the benefits to borrowers. I suspect that, as a cohort, lenders looking for better returns are more financially astute than borrowers in general, further leading to an imbalance allowing the banks to being able to continue to rip off borrowers.
Contrast this to the "Pay Day" lending sector. Whilst I am no supporter of this model you can't deny that everybody knows about it. Equally I suspect more people know how to put an online bet on a sporting event than know how to get a competitive rate loan from a P2P provider.
I foresee that unless the P2P platforms do something to address this we will see lending rates fall through the floor.
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Post by GSV3MIaC on Feb 20, 2016 21:10:05 GMT
'Borrower offers' are a myth (read the forum to see why).
Look at the amount being matched each day and you'll see there is not so much of an imbalance as you might imagine.
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MarkT
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Post by MarkT on Feb 20, 2016 21:19:15 GMT
'Borrower offers' are a myth (read the forum to see why). Look at the amount being matched each day and you'll see there is not so much of an imbalance as you might imagine. Well, I've been reading quite a lot, as you can imagine as someone starting out, but is there a particular thread or two where I could be directed for a succinct explanation of why "borrowers offers" are not an indicator of the market balance? All help appreciated. I still think the P2P media profile is much more directed towards lenders rather than borrowers and it would serve both parties better if it were more equal.
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Post by GSV3MIaC on Feb 21, 2016 21:10:45 GMT
Look at p2pindependentforum.com/thread/4147/matching for instance. One reason for more focus on lenders is that for many P2P companies (not necessarily RS) there are way more lenders, by number, than borrowers (especially true where the P2P is lending to companies). |
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Post by westonkevRS on Feb 21, 2016 22:14:21 GMT
I still think the P2P media profile is much more directed towards lenders rather than borrowers and it would serve both parties better if it were more equal. Perhaps, but the product offering for borrowers is quite standard and doesn't differ greatly from the Banks, challengers (including the likes of Tesco and Sainsbury) and P2P platforms. It's just a fixed term loan with good rates and ability to make flexible payments. There isn't a story and certainly any direct consumer advertising is just in a blood bath of similar products lacking any USP won't make any difference. It'd be a waste of money, in my humble opinion. And borrowers don't have huge loyalty, money is a standard product - customers will get it where it's cheapest and fastest (think electronics, and Amazon vs. local bricks 'n' mortar electrical retailers). Most platforms "advertise" via B2B, i.e. with brokers, comparison sites, etc. You just won't see it on the telly or in a magazine - unless the firm has money to waste! Kevin. P.S. Rate trends on RateSetter (https://www.ratesetter.com/lend/statistics ) show r eturns have increased over the last 2 years - indicating if anything RateSetter is finding more borrowers than lenders. I personally therefore think the title if the thread is wrong.
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pikestaff
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Post by pikestaff on Feb 21, 2016 22:36:30 GMT
P.S. Rate trends on RateSetter (https://www.ratesetter.com/lend/statistics ) show r eturns have increased over the last 2 years - indicating if anything RateSetter is finding more borrowers than lenders. I personally therefore think the title if the thread is wrong. True, though my belief is that this is RS growing the distribution channel in preparation for ISAs. When they happen the title will most definitely be right. When I joined the 5 year rate was 5%, and I expect it to be back to 5% when ISAs come on stream. I was happy with 5% then. I'm not sure that I would be happy with 5% now. The introduction of property loans has made RS significantly more risky IMO.
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adrianc
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Post by adrianc on Feb 22, 2016 9:44:28 GMT
I personally therefore think the title if the thread is wrong. Perhaps a question mark instead of a full stop...?
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MarkT
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Post by MarkT on Feb 22, 2016 10:46:51 GMT
I personally therefore think the title if the thread is wrong. Perhaps a question mark instead of a full stop...? Indeed. Now amended. It looks like this whole market balance thing is a lot more complicated than I first thought. I will chip in again once I have digested the thread that GSV3MIaC has directed me to.
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alender
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Post by alender on Feb 22, 2016 12:05:15 GMT
I not sure investors we will ever really know how RS sets the rates, it has been stated it is clear as mud and for me there is not enough information available to clear the waters. However Kevin has helped in this regard but because of his position (understandably so) he is limited in what is able to tell us.
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Investor
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Post by Investor on Feb 22, 2016 12:13:38 GMT
True that westonkevRS plays his cards close to his chest. Is almost a year now since the last RS Charity auction on the forum, p2pindependentforum.com/post/39807/thread even though Kev has reported back to me that the new mugs (following the printing scandal) and even a few umbrellas should be available by now. Probably got 'lost' in the move |
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Post by Deleted on Feb 22, 2016 14:07:01 GMT
I still think the P2P media profile is much more directed towards lenders rather than borrowers and it would serve both parties better if it were more equal. P.S. Rate trends on RateSetter (https://www.ratesetter.com/lend/statistics ) show r eturns have increased over the last 2 years - indicating if anything RateSetter is finding more borrowers than lenders. I personally therefore think the title if the thread is wrong. Two years is an arbitrary period. When I joined RS longer terms rates (the then newly introduced 5 years rate) were close to 8% and that was a good rate for the time. Since then to me the rate has gone progressively down, so much that I haven't added a penny to my investment on RS. The RS platform is marvellous, but becoming too close to a bank and the interests on offer are uncompetitive to me (see the many secured loan companies that have been offering rates around 12% now for about 2 years...). I agree that there are more lenders around than borrowers. This is the result of the good name RS has made in attracting new comers rushing out of banks. Unfortunately my guess is that the older customers are not keeping their money in and this is why in particular periods, when the new flow of money is not sufficient, the rates go periodically slightly higher in waves... Problem is that they are much much lower than they used to be and totally below what the competition is offering now.
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MarkT
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Post by MarkT on Feb 22, 2016 15:23:40 GMT
OK. Having done my directed reading, I am, to some degree, enlightened. I thank GSV3MIaC for taking the time to point me in the right direction. It is indeed much more arcane than I first thought with most of the market matching and trading occurring out of sight of both lenders and borrowers. It does, however, explain why it always appears that there are many more lenders than borrowers. It also shows that,as mellbreak says, when you click "View full market", what you actually see is nothing of the sort, but is indeed just a short list of unmatched offers which only make up a small fraction of the market. All of this is not overly transparent, especially to newcomers. Anyway, armed with this new insight I will change my lending strategy and see what happens  . Thanks again. MarkT |
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Post by westonkevRS on Feb 22, 2016 18:06:53 GMT
True that westonkevRS plays his cards close to his chest. Is almost a year now since the last RS Charity auction on the forum, p2pindependentforum.com/post/39807/thread even though Kev has reported back to me that the new mugs (following the printing scandal) and even a few umbrellas should be available by now. Probably got 'lost' in the move The umbrellas that were created for the office move seem to disappear pretty sharpish.... ......But there are 100s of mugs. I'll bring a few to the lender drinks evening currently being planned for May '16. You can have a nice cup of tea if you don't want some beer or wine! Kevin.
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Post by newlender on Feb 22, 2016 20:07:00 GMT
Any date for that event yet, Kev?
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