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The Money Platform (TMP)
Suggestions
Jan 26, 2018 20:26:42 GMT
Post by WestonKevTMP on Jan 26, 2018 20:26:42 GMT
Not open to lenders outside UK. Unusual in this day and age - why? I'm afraid the old adage of "Pecunia non olet" doesn't apply nowadays, we have to KYC the lender and validate source of founds, both inward and outward. I can't go I to detail on how we do this, I wouldn't want those money laundering villains to gain any insight. However the credit reference agencies play a big part of this, and they only provide information on UK residents. We accept non UK nationals, but they must be UK resident and have a UK based bank account. We could implement a paper based process, but it would be laborious and subject to increased regulatory scrutiny, and easier to cause fraud (paperwork is easy to fake) Kevin.
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Post by WestonKevTMP on Jan 26, 2018 9:59:55 GMT
I have 15% late and absolutely no communication from TMP. (Also a couple of defaults from before the statistics started, no communication about these either). All borrowers are communicated prior to loan repayments, and if there is a late payment has a number of automated and manual actions taken in all instances; > Human telephone call within the first 5 days to discuss potential solutions, which can include full/partial payment or more commonly an arrangement to pay over time > Automated emails > Automated text messages > Repeat CPA payments attempted > Letters, in certain curcumstances > Human interaction via social media The detail of communications and especially human interaction is not an easy thing to provide to lenders, and probably wouldn't give any reassurance. Notes are taken, but are probably not appropriate for public consumption, even by the lender as they can be very specific about the borrowers financial circumstance. So bearing in mind the volume of loans and the small value nature, it isn't practical or useful to provide detailed running commentaries. At the moment we limit communication to the financial status of the loan and balance. It isn't efficient to provide lenders with unique individualised commentary for every £250 loan written. It's also worth noting that we try to do the right thing by the borrower compared to other short term lenders. For example this includes freezing the subsequent interest to 0%, limit any further charges and never roll-over loans into another term. If lenders have any ideas as to what data they would find useful, we will make the change. But this must be automated and not simply access to the details human notes made on the loan. Kevin.
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Post by WestonKevTMP on Jan 26, 2018 9:52:53 GMT
WestonKevTMP According to your stats page. You now have 436 loans that are being repaid. Can i ask what % are late ? And how do you communicate that bad news to lenders ? Do you update lenders on progress made chasing these ? The lender's web site has a statistics page for the portfolio as a whole, which right now looks like; However this is of course rear view mirror reporting, and there is no guarantee the future will be similar. In fact We have made so many changes we expect future bad debt to be lower. This reporting is also showing "lates", whoich is a very common feature in higher risk lending. You only really know the final scenario after the full collections and arrangement process. The statistics are moving fast, for a number of reasons. We continuous change the credit policy based on our own data rather than generic lending policy (e.g. 3-month loans acceptance high APR will be dramatically different to 5-year low APR via a comparison site traffic). It's not only different score breaks, but the data used and customer journey is very different. As an example, we've now been able to build and implement a bespoke Money Platform scorecard specific to our business. This went live late summer 2017 and so the benefits should start to be seen shortly. However the biggest change was the move to amortising loans in late September 2017. Prior to this the loan product was a single payment "bullet loan", which for a higher risk short term borrower was a big ask, i.e. to pay back the capital and interest in one go three months down the track. This product was unique in the UK for a reason, and so since September customers make multiple payments. This de-risks the product hugely not only in that it makes affordability easier but partial payments reduce bad debt and gives us an early indicator of potential problems.
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Post by WestonKevTMP on Jan 24, 2018 9:31:38 GMT
According to ratesetter everyday account, typical interest rates for borrowers are APR: 2.9% to 49.9%. I have never seen Ratesetter offering 2.9% for borrowers lately, none can be found on thr loan comparison web sites. As far as i know, borrowing rates start from 6.9%, why do they tell investors rates for borrowers starts from 2.9%? 🤔 Its called keeping your options open. They have lent at these rates before (affiliates for the lower rates), and might in the future. They need to react quickly to market price changes, and wouldn't want to have to keep updating marketing T&C's everytime they wanted to shift their pricing buckets.
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Post by WestonKevTMP on Jan 22, 2018 18:19:30 GMT
Comrades, And another update in the same theme, The Money Platform has not made over 1,000 loans (it took us 5 months from the 500th); In fact, we've now written 1,084 loans to 777 postcodes (that's customers repeating, and telling their friends). As the platform develops and improves the acceptance policy, and rolls out new sources, lending volumes are now speeding up considerably. Some early adopters at the start did complain that their returns were diminished by slow lending, this is less of an issue now. I don't think it'll take 6-months to get to loan 2,000..... Kevin.
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Post by WestonKevTMP on Jan 16, 2018 17:51:46 GMT
My penny falls experiment (no new deposits, no withdrawals) is still ongoing. Over half my initial capital amount is now in defaulted or seriously late loans, but the rest is performing ok. Assuming no recoveries or further losses, I'm a little bit ahead at the moment, before tax. This is good. One of the reasons the platform is at the higher risk end of the P2P spectrum is that loans are not fractionalised and we have there is no provision fund. We are the " roller coaster of the P2P world"..... As a result lender returns will vary dramatically, with some enjoying fantastic returns and others doing disappointingly badly (and those with bad experiences tend to be more vociferous). Everyone is somewhere different on that bell curve, and that's not ideal. That said, I'm very expectant the overall default performance will improve even further from where we are today. For the following reasons; 1) Credit acceptance is evolving constantly to be based on our experience and own loan performance data, rather than a default model for the HCSTC market as a whole 2) Loans are now amortising over 8 and 12 weeks, rather than expecting customers to make single large capital and interest payments in one go. This also increases liquidity for lenders with payments, and if there is a default it'll be for a smaller amount 3) A TMP specific data scorecard is now in place, working in conjunction with the bureaux scores. 4) Loan values have been skewed towards lower £250 for new and higher risk customers. Making payments more affordable. 5) Borrower portfolio is increasing, and repeating business with us. This rapidly growing segment has improved acceptance, lower capture costs and lower bad debt. Launch is always hard at the start with no existing portfolio of borrowers, no data (relying on "expert" decisions) and as the new lender in town a magnet for dodgier borrowers. We are very grateful for our early adopters and it's great to know people are making a return, but onwards and upwards from here is encouraging. Longer term we want to embrace Open Banking, and think about how a pool or fractionalisation product could work. But these are longer term projects and will take money and IT resource before implementation. Kevin.
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Post by WestonKevTMP on Jan 9, 2018 19:18:17 GMT
I've been following TMP's threads since they appeared on the scene; this thread is particularly concerning in that I'm beginning to conclude that All the 'aces' are in the hands of the platform itself whether initially you were able to set your own lending rate or as now live with the fixed... ...what are your thoughts? All the best, J. You could "set your own rate", but it's important to understand why this was removed. I'm an advocate of customer choice, but really there wasn't a choice and the allusion caused problems. This is defined as High Cost Short Term Credit, so the maximum daily rate is 0.8%. TMP shares this with lenders so the lender rate is 0.4%. With the recent regulatory cap, we are not allowed to let lenders go above 0.4%. and in actual fact virtually all loans were written at this lowest rate anyway, money above 0.4% rarely got deployed. So letting lenders choose a higher rate just caused delays, frustration and questions. Arguably we could let lenders go below 0.4%. But this would require some IT work to have variable APR loans on the platform, and make sure we advertised correct representative APRs. Also lenders might not realise the risks, and offering too low a rate, would cause other financial issues for them. In the HCSTC market, a slightly lower daily rate and APR doesn't reduce bad debt as it does in the prime market. Hopefully the TMP product range will expand to cover different APR and risk quality (and loan length and value). But this will take time and investment. This is a very different sector to the one the traditional P2P platforms operate, where having the lowest APR on the comparison sites (and associated" eligibility") can make or break a business. That said, a personal goal would be to lower pricing to borrowers. This might one day attract better quality borrowers and generally be a good thing for the HCSTC market. Help put some of the incumbent morally dubious organisations under pressure. But this is a personal goal. Kevin.
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Post by WestonKevTMP on Jan 9, 2018 12:05:38 GMT
WestonKev has been very quiet. You would think they would be incentivised to chase lates as they get 50% of the interest, but maybe the main income is the upfront fees. Hi, it's true I'm not as active on the forums as I used to be. Ideally I'd be tagged @ then I'll certainly respond given time. There are no upfront fees. TMP only get paid if the loan is repaid, so we are in the same position as lenders. In terms of Collections there has been more focus recently here, both by employing in-house collections/chasing, and then a professional external agency who only get paid as a percentage of monies collected. As a new platform in the short term lending space the acceptance strategy is constantly changing. Not only using different data points but getting the cut-off between approval rates and bad debt in the right space. If we decline too many then lenders don't get funds deployed and the costs attached to all applications can make the CPA on written loans prohibitively high. It's a balancing act. What we are seeing is that as we build a portfolio of customers, they repeat borrow with a high frequency, and they have better lower bad debt accordingly as trusted borrowers. Not wanting to gloss over any bad debt suffered by lenders (myself included), the first 6-12 months are always the hardest. Not so much getting the credit policy right, but all new platforms attract higher risk borrowers as the new player in town. It takes time to weed out these initial bad guys, and focus on better sources of loan and existing borrowers. Kevin.
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Post by WestonKevTMP on Jan 6, 2018 17:29:54 GMT
I bet his superiors were a bit nervous of his presence on this forum.... The "superiors" were fine. It was more the official PR spin communication boys, who had a mini heart attack every time they saw my icon appear.....
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Post by WestonKevTMP on Jan 6, 2018 17:26:10 GMT
The new borrowing rate from rate setter (2017-01-06 17:01) is 7.1% but the market rate for lender is 2.6% They've got to feed both the Provision Fund, and all those hungry mouths.....
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Post by WestonKevTMP on Jan 5, 2018 8:03:29 GMT
The 90% order disappeared. Was it cancelled by ratesetter or the expert I wonder? He needed the money to prepare for an IPO.....
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Post by WestonKevTMP on Nov 28, 2017 12:17:29 GMT
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Post by WestonKevTMP on Nov 28, 2017 12:13:14 GMT
Don't you have to wait 5-10 years before you have all the recovery numbers in? Assuming Z actually chase the borrowers through bankruptcy, CCJ, IVA, etc. These are unsecured loans. Z cannot chase through bankruptcy or IVA (that's an individual's choice, hence the name). There most severe options are registering a default, and reporting this to the credit reference agencies. They could register a CCJ but the costs are prohibitive (over £1,000) with no legal power that increases recovery. They could place a charging order over property, but this is expensive and time consuming. I suspect that Zopa chase (emails, calls, etc) and register defaults. But nothing more. Kevin.
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Post by WestonKevTMP on Nov 7, 2017 8:46:20 GMT
Personally I'm getting a positive return. So it seems to me that Zopa haven't done a great job of smoothing any statistical volatility linked to getting an even spread of bad debt across all lenders.
What I don't know, do Zopa change the blend of future loans based on previous performance. Or just keep with same allocation strategy and hope things even out. Changing the loan make-up would be dangerous, as if they've got their bad debt estimates by risk profile wrong, simply giving higher return loans (to those that had a reduced AER return before) could make things even worse.
That said, the irony is that those that have had reduced earnings should stay in and hope Zopa give them preferred treatment. The "lucky" ones like me should probably get out!
Kevin.
P.S. This is why I prefer Provision Funds than fractionalisation of loans. Even if in theory it does reduce returns, it's insurance worth paying.
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Post by WestonKevTMP on Nov 1, 2017 21:40:45 GMT
More striking is the shift in "Lending Rates" on the 5-year product (the "riskiest" term). Zopa's maximum "Lending Rate" has dropped from 31.6% just 6-months ago to 20.9% last month. Average "Lending Rates" have dropped from 10.5% down to 7.2%. Kevin
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