Provision fund, capital or interest?

ben yep i understand that, my point is more, 'should all p2p platforms be forced to have a provision fund' others see the PF as a marketing gimmick, i'm sure RS don't see their PF as a gimmick , IMO i would guess that RS see there PF as a valuable protection tool against any capital loss to lenders.

In fact AFAIK no lender has ever lost any capital on RS, and we can add that the same applies for SS too. But is SS's PF at a sustainable amount? I would guess against one loan default it is, but more than one at the same time? 

How a sustainable PF is funded is another debate, but if RS can do it, why not all P2P platforms.

As for interest payments from the PF... No.

hi MarkT  its here>  savingstream.co.uk/how-it-works#provision-fund , im not sure there's much more SS could add.

It may just be me, but I can't see any terms of reference as to how the "discretion" will be applied.

hi MarkT it states 


'The Provision Fund does not guarantee loans or provide insurance against loss. In the event of a shortfall The Directors will consider any losses made by investors and may grant compensation at their discretion. You should be aware that your capital is at risk and interest payments are not guaranteed if a borrower defaults.'

edit crossed with stevet  edit bold mine

If this is the way the PF will be operated, then why would anyone want to invest in a defaulted loan?  They could be reasonably confident they'd get their capital back but might not get all -- or any -- of the accrued interest.  In this case the note on the Red Box, which now says "Interest will continue to accrue, but will not be credited until sale of security completes", needs to be extended by adding something like "and will be paid only to the extent that sale proceeds allow."  And somewhere it needs to be made clear the priority of the various components of payouts -- e.g. Is accrued interest at the end of the payout queue, or does it come before something like SS/Lendy's exit fee?  I expect that would kill the market for parts of defaulted loans, since there would be no upside on those parts compared to 'normal' SS parts -- unlike at some other platforms where overdue loans accrue interest at enhanced rates.

Another issue SS/Lendy have to wrestle with is how long they continue to pay interest on parts for which the borrower hasn't prepaid interest.  (PBL020 got to about -150 days before being declared to be a default.)  If a loan's Remaining Time were to reflect prepaid interest accurately, then as soon as it goes to zero, if I remember the New Ts&Cs correctly, SS would have to replace the loan's picture with an Amber box saying something like "Loan Overdue: Interest will continue to accrue, but will not be paid unless it it received from the borrower."  And it probably would become difficult to sell parts in those loans on the SM once that notice appeared.

I expect that the ease with which parts can be sold on the SM has a significant influence on people's willingness to invest via SS, so SS need to consider carefully before taking actions that would affect the SM significantly, and potentially reduce their ability to fund loans.  They could decide they're better off paying out interest they haven't received if it allows them to continue writing loans.

You said the PF was a marketing gimmick! I merely said there are other platforms without gimmicks people can chose if they like. I've never told anyone to shove off, thank you very much.
FYI, I did run a poll about not having a PF, but that wasn't he object of this poll, it was should the current PF cover interest.
Feel free to run your own poll, if you don't like the answers to mine