tarq
Member of DD Central
Posts: 125
Likes: 28
|
Post by tarq on Mar 14, 2018 13:45:17 GMT
There seem to be more & more'missed repayment' on loans.
I note we get the 'stake' money back, but no interest.
We lend, take the risk & only get capital back.
I assume Welendus still get all their fees paid!
Or have I got this wrong?
|
|
|
|
Post by pmjenkins on Mar 14, 2018 14:25:58 GMT
It seems a shame that Welendus doesn't allow the borrower a bit more time.
Does Welendus persue the borrower or is the loan written off immediately??
|
|
Greenwood2
Member of DD Central
Posts: 4,241
Likes: 2,686
|
Post by Greenwood2 on Mar 14, 2018 16:37:11 GMT
There seem to be more & more'missed repayment' on loans. I note we get the 'stake' money back, but no interest. We lend, take the risk & only get capital back. I assume Welendus still get all their fees paid! Or have I got this wrong? The bigger problem is whether Welendus can afford to keep paying back the capital if a lot of loans are going bad. They seem to be taking the lion's share of the interest on good loans but even so it could become a problem.
|
|
|
|
Post by Butch Cassidy on Mar 14, 2018 20:43:48 GMT
Platform is still in soft launch phase & as I have said on other threads remains in listening mode; so I am happy to report another positive addition - that an "early adopter reward" that I suggested on the improved experience thread has been accepted & all forgone interest that would have been earned on PF loans is to be credited, as a reward for that early risk taking & aiding the platform in its development, e-mail explanation copied below;
"As a Welendus Beta early adaptor, we would like to thank you for your early interest in Welendus. As a thank you, we are pleased to offer you reward interest to cover the difference between your earned interest and requested interest on all your Provision Fund acquired investments. This offer will apply to all previous and future Provision Fund acquired investments on all loans issued during the Welendus Beta and Soft-launch period. The reward interest will be applied from the loan start date and until the Provision Fund acquisition date. We will soon start processing the reward interest which should start appearing in your account over the next 4 weeks. "
|
|
michaelc
Member of DD Central
Posts: 4,842 
Likes: 2,757
|
Post by michaelc on Mar 14, 2018 23:12:08 GMT
That is a nice touch but unless it is ongoing I'm not sure it addresses mine and the OPs issue.
I suspect that until we get more platform competition in this sector, there won't be much incentive to keep lender's returns as high as possible. Right now, the reward to the platform is skewed too high. A possible correction (that won't happen until said competition arrives), is for all of the platform's income from interest and fees to go into the "PF". Then if over time the PF looks sustainable, the platform takes its cut from there.
Currently, as I understand it, nearly half the interest goes directly to the platform's income whether or not the PF is sustainable.
|
|
rzys
Member of DD Central
Posts: 56
Likes: 44
|
Post by rzys on Mar 15, 2018 7:41:19 GMT
As long as they make it clear which loans have been repaid by the borrower and which by the PF.
Otherwise it would be easy for early adopters to be lulled into a false sense of security, with the rug being pulled after the soft launch period ends.
|
|
|
|
Post by sayyestocress on Mar 15, 2018 8:37:02 GMT
As long as they make it clear which loans have been repaid by the borrower and which by the PF. That's already the case. In the loan summary it'll say "completed" if the borrower repaid or "sold (pf)" if the provision fund 'bought' the loan after 7 days of non-repayment.
|
|
|
|
Post by sayyestocress on Mar 15, 2018 8:41:24 GMT
...A possible correction (that won't happen until said competition arrives), is for all of the platform's income from interest and fees to go into the "PF". Then if over time the PF looks sustainable, the platform takes its cut from there... Are you saying that the platform shouldn't take any income right now? Seems a little extreme.
|
|
|
|
Post by sayyestocress on Mar 15, 2018 8:51:03 GMT
It seems a shame that Welendus doesn't allow the borrower a bit more time. Does Welendus persue the borrower or is the loan written off immediately?? The loan isn't written off after 7 days; the provision fund buys the loan off us lenders (for the principal amount only) and their debt collection team pursue the borrower. If the provision fund can't cover the principal at the 7 day point then you get repaid if/when the debt collection team recoup the funds.
|
|
|
|
Post by Butch Cassidy on Mar 15, 2018 10:17:34 GMT
...A possible correction (that won't happen until said competition arrives), is for all of the platform's income from interest and fees to go into the "PF". Then if over time the PF looks sustainable, the platform takes its cut from there... Are you saying that the platform shouldn't take any income right now? Seems a little extreme. As with most things in life a balance needs to be struck & Welendus are currently exploring where that point maybe found; reasonable returns to lenders for the level of risk they take, sufficient PF contributions to establish & maintain a sustainable, well covered fund & enough remaining margin for the platform to both cover its costs & earn a decent return going forward.
AFAIK the consumer lending sector already has plenty of competition but Welendus are trying to offer a better deal for borrowers than they can currently secure as well as build a viable P2P business model. I believe that the approach they are following is sensible & will succeed over the medium term but I could well be proved wrong
Anyone who has suggestions for improvement can add their ideas to the forum thread of that name & help shape the platform future but they have so far proved that they are willing to listen to lenders & implement changes & new features in an attempt to improve their offering so I'm not sure what more over & above this they can do right now.
|
|
Greenwood2
Member of DD Central
Posts: 4,241
Likes: 2,686
|
Post by Greenwood2 on Mar 15, 2018 10:38:47 GMT
I suspect that until we get more platform competition in this sector, there won't be much incentive to keep lender's returns as high as possible. Right now, the reward to the platform is skewed too high. A possible correction (that won't happen until said competition arrives)... The Money Platform is doing a similar thing, with a more equitable cut of the interest for lenders, but no PF, unfortunately the number of late and defaulted loans on MP seems very high currently. I wonder if Welendus can be any more successful in getting good borrowers and recovering bad debt. It will be interesting to compare the two when Welendus and MP are more mature.
|
|
|
|
Post by Butch Cassidy on Mar 15, 2018 10:57:02 GMT
I suspect that until we get more platform competition in this sector, there won't be much incentive to keep lender's returns as high as possible. Right now, the reward to the platform is skewed too high. A possible correction (that won't happen until said competition arrives)... The Money Platform is doing a similar thing, with a more equitable cut of the interest for lenders, but no PF, unfortunately the number of late and defaulted loans on MP seems very high currently. I wonder if Welendus can be any more successful in getting good borrowers and recovering bad debt. It will be interesting to compare the two when Welendus and MP are more mature. I share your concern & looked at TMP several months ago but was (thankfully) unconvinced by their business model; as capital loss kills any potential return, irrespective of how favourable the level of interest split, which is why I favour the Welendus PF model - I still have my doubts about the PF sustainability (in fact I started the thread on that very subject) as it will ultimately make or break the platform but it still has far more chance of successfully scaling than TMP model IMHO.
|
|
michaelc
Member of DD Central
Posts: 4,842
Likes: 2,757
|
Post by michaelc on Mar 15, 2018 15:12:48 GMT
...A possible correction (that won't happen until said competition arrives), is for all of the platform's income from interest and fees to go into the "PF". Then if over time the PF looks sustainable, the platform takes its cut from there... Are you saying that the platform shouldn't take any income right now? Seems a little extreme. Perhaps not all but a large proportion because the platform doesn't know what the income will be until the loans have had a chance to default or not.
|
|
