marka
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Post by marka on Mar 12, 2018 14:30:18 GMT
...If it is going to continue to be common for borrowers to be over 7 days late with a payment, but for their account to then be normalised again soon afterwards, its not really the lenders that are being (directly) protected, its the provision fund, and lenders are just going to get their initial investment back with no return on it. That's a good point but won't it be resolved once the "variable PF grace" feature is implemented? I take it to mean we can delay the PF kicking in and give more of a chance for the repayment to be made so we make a (delayed) return? Its possible yes, but until we know anything more about this feature (which as far as I'm aware has only been mentioned the once on this thread) we can't say.
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Post by sayyestocress on Mar 12, 2018 14:55:17 GMT
That's a good point but won't it be resolved once the "variable PF grace" feature is implemented? I take it to mean we can delay the PF kicking in and give more of a chance for the repayment to be made so we make a (delayed) return? Its possible yes, but until we know anything more about this feature (which as far as I'm aware has only been mentioned the once on this thread) we can't say. We got marginally more info in the amortisation thread ( link): "... Now the 7 days is selected to make it as easy and convenient for lenders as possible. With that in mind, if we prove that borrowers are more likely to pay back after the 7 days then we can increase this period to 14 days or even more. We may also make it a variable lenders can select for their investments. We just want it to be as flexible and transparent as practically possible. "
But yes, until it's implemented we can't know for sure. Obviously there will be a balance of how long to leave it to get something late versus getting it back without interest and re-lending it into a loan that (hopefully) pays up. I would hope it would be tuned in our favour based on the data they have.
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Post by Butch Cassidy on Apr 3, 2018 15:21:49 GMT
Now that we are nearing 3 months of actual lending to real borrowers it would be good to have an early appraisal of how the Welendus model is panning out against plan, perhaps nsiam might have a few thoughts?
Personally I am satisfied with the progress that has been made, lending time is still quite quick, cash drag minimal, improvements such as e-mail notifications & paid interest for defaults are welcome, the addition of the statistics page is refreshingly open & honest regarding performance. As of 3.4.18 there have been 415 loans totalling just under £100k, £80k still live, with an average term of just over 100 days; loans that are 7 days overdue are 26% & over 14 days drop to 17% still well above the original target 10% level, finally the PF fund has dropped by 25% from £50k to £37K which I guess is to be expected at this still early development stage.
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Post by sayyestocress on Apr 3, 2018 16:07:12 GMT
Now that we are nearing 3 months of actual lending to real borrowers it would be good to have an early appraisal of how the Welendus model is panning out against plan, perhaps nsiam might have a few thoughts?
Personally I am satisfied with the progress that has been made, lending time is still quite quick, cash drag minimal, improvements such as e-mail notifications & paid interest for defaults are welcome, the addition of the statistics page is refreshingly open & honest regarding performance. As of 3.4.18 there have been 415 loans totalling just under £100k, £80k still live, with an average term of just over 100 days; loans that are 7 days overdue are 26% & over 14 days drop to 17% still well above the original target 10% level, finally the PF fund has dropped by 25% from £50k to £37K which I guess is to be expected at this still early development stage. I'm generally happy, though I am a bit concerned that the estimated default rates / risk categorisation of borrowers are being underestimated at this point. Admittedly I have only lent in the medium and high risk bands so far and my sample size is small, but more of my loans have been bought by the provision fund than repaid within 7 days of the end date. It would be nice to see the +30 day stats and to have the repayment stats broken down into the low/medium/high risk bands to be able to judge what settings are likely optimal.
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rzys
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Post by rzys on Apr 5, 2018 14:24:22 GMT
I'm somewhat alarmed by the rapid drop in the provision fund. This model of lending is too high risk for me without it.
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Post by nsiam on Apr 5, 2018 14:32:08 GMT
I'm somewhat alarmed by the rapid drop in the provision fund. This model of lending is too high risk for me without it. As with investors, the PF contribution is offset to the loan completion. The only difference is that the PF gets its pay out once on loan completion. We have updated the pay out for lenders already but not yet for the provision fund which is something we are intending to do very soon. Once this update is done, the PF should be more balanced. Another update to follow.
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rzys
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Post by rzys on Apr 5, 2018 17:16:45 GMT
OK, thanks for the reply. I'm not quite sure I understand you, but I'll keep observing. I only have my little toe in the water at this stage anyway.
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tarq
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Post by tarq on May 15, 2018 9:40:19 GMT
If I withdraw some funds from Welendus now, will I get the promised interest on the loans that the P/F bought?
Originally if you withdrew you forfeit that interest, but that was before the defaults.
There seem to be so many of these lately.
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benaj
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Post by benaj on Dec 21, 2018 6:33:11 GMT
I'm somewhat alarmed by the rapid drop in the provision fund. This model of lending is too high risk for me without it. As with investors, the PF contribution is offset to the loan completion. The only difference is that the PF gets its pay out once on loan completion. We have updated the pay out for lenders already but not yet for the provision fund which is something we are intending to do very soon. Once this update is done, the PF should be more balanced. Another update to follow. Thanks nsiam, I received payment from completed loans and now I notice the Provision Fund Coverage is back up to 109%. I suppose this PF coverage usually goes up around when most borrowers pay back around pay days
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zlb
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Post by zlb on Dec 29, 2018 12:51:30 GMT
I'm somewhat alarmed by the rapid drop in the provision fund. This model of lending is too high risk for me without it. As with investors, the PF contribution is offset to the loan completion. The only difference is that the PF gets its pay out once on loan completion. We have updated the pay out for lenders already but not yet for the provision fund which is something we are intending to do very soon. Once this update is done, the PF should be more balanced. Another update to follow. Hi nsiam, with regard to the FCA approved wind-down of loans, in the case that the platform has to be wound-down: does the wind-down process stipulate use of the provision fund, i.e. is the provision fund protected for use against defaulted loans, in the wind-down agreement, rather than support of any other kind of payment? thanks.
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Post by nsiam on Jan 3, 2019 19:56:54 GMT
As with investors, the PF contribution is offset to the loan completion. The only difference is that the PF gets its pay out once on loan completion. We have updated the pay out for lenders already but not yet for the provision fund which is something we are intending to do very soon. Once this update is done, the PF should be more balanced. Another update to follow. Hi nsiam , with regard to the FCA approved wind-down of loans, in the case that the platform has to be wound-down: does the wind-down process stipulate use of the provision fund, i.e. is the provision fund protected for use against defaulted loans, in the wind-down agreement, rather than support of any other kind of payment? thanks. Hi zlb, No, the provision fund will not be used for winding down the business and the provision fund will be the last function to wind down after all loan agreements are settled or terminated. To clarify, this is an FCA requirement that all lender have a wind down plan for the worst case scenario. We are not planning to wind down and not foreseeing any reasons to wind down in the near future. However, if we are to wind down, we have a plan so it can be done smoothly and with the least effect on investments and the performance of live loans. Best, Nadeem
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