#292 refinanced by #501 AKA #500

If you want some don't lose hope yet, this is typical AC behaviour giving 100% or very nearly 100% to the auto accounts then gradually selling it off over the next few days, weeks & months - just set your target & wait.

I have finally lost patience with this loan (& AC in general) after yet another cut in lender rate, no reduction in risk & all interest rolled up so didn't set a target this time. I did have £16k invested in it when it was #166, as it paid 15% that was when AC priced for risk not liquidity (oh happy days!) but when it rolled over into #292 I set a slightly lower £12k target as the rate was dropped to 9%. It was standard AC practise to allow investors to rollover their investments back then so I was less than impressed with an allocation of <£100 (approx. £88 iirc) I did eventually get up to £1500 after a couple of months but by then had realised MLIA investors like me were no longer valued, needed or wanted on the platform so withdrew most of my funds to invest elsewhere.

Well I did set my target and about an hour later I got my requested allocation, so just made it but more luck than anything else..

I agree with your comments oldgrumpy however in it's defence I feel that AC has changed (and grown it's lender base dramatically)  because it recognised that it needed to be differnt to survive long-term and the reduced rates seem to be a market-wide phenomenon. I joined AC when you could get 4 figure allocations with ease on most loans and whilst I'm not a BH there were loans where I held mid 4 figures. Now sometimes getting £100 is difficult at initial allocation. As for interest rates 8% is as good as it gets now, I am de-risking my portfolio against property price drops so I am moving away from higher LTV loans and  just target the lower LTV >= 8% loans where I trust the security and ignore most of the rest unless I really like it.

On balance, for me AC still represents my biggest P2P investment, it is the platform I trust the most, they do proper platform DD, comunicate well, monitor loans better than most and manage defaults professionally so whilst the lower rates are unwelcome they are not yet a show stopper for me. Now max 6% loans might be a different story though!

I’d say reasonable communication but otherwise I agree with the your sentiments!

Hi everyone. In terms of our strategy and our credit policy it's important to set a couple of things out. At the beginning we were often pricing well above risk in order to create liquidity from investors but nonetheless had to take some risk of default to win the borrower provided we were happy we could recover most or all capital from the security if that happened.

In order to have a sustainable model through the cycles we have moved towards a little over high street bank risk appetite but with rates that are 2-3x their borrower rates. We feel we are now pricing for risk without a liquidity premium which is also fairer to borrowers. This is our sweet spot as there is good volume and yet default risk is modest, expected losses are low and average loan to value across the book is still barely over 60%

The most important point is that unlike some platforms we only tend to achieve a typical 0.9% pa servicing fee to run the loan monitoring with the entire balance going to lenders or to the provision funds. We don't operate the sort of average spread that several other large platforms seem to operate and yet we finally turned a profit pre tax last year of around £1m which I think is modest versus the £23m of interest that lenders have earned and the c £1.5m of provision fund protection ahead of most of their investments. It does feel fair and our focus remains on protecting lenders' capital and delivering the target rates on the investment accounts. Contrary to some thoughts we really don't want to close the MLIA account at all and if anything are likely to add some new tools in the autumn to make it easier to invest there.

Hope this helps and happy to chat.

Fully concur - without MLIA I would be out of AC - but happy to remain on this platform unless interest rates go too low. Like many P2P lenders I will continue to actively pursue an appropriate risk/reward return on my capital - and have already departed two platforms that failed to maintain adequate rates.

Hi, we don't publish the raw size of the provision fund very often as it is contextually isolated and may mislead people - the mathematical analysis of its scale relative to the risk of the portfolio in each investment account brings it context we feel. I suppose in a way that it's not dissimilar to the risk weighted capital % of a bank versus the actual pound value of that capital - the former equalises risk analysis of all banks (in theory) versus the type of risks they take and rewards those who take relatively low risk versus their capital size - it equally exposes banks who take too much risk (to the PRA/BOE) and forces hem to raise more capital. I wish there was a consistent way adopted by all p2p platforms to report risk, defaults, expected losses and stress testing results. Even the P2PFA members who are supposedly all using the same methodology clearly aren't, just look at their default pages and tell me they are represented the same way. I'm sure this will all come with time but after the next cycle I expect.

I did wonder one thing - were you implying that the larger the PF the more likely it is you may look to diversify beyond the MLIA ?