bugs4me
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Post by bugs4me on Apr 19, 2018 17:56:08 GMT
<snip> If there are no losses then with this change Kuflink's profits will be reduced by x% of the loan plus the lost interest on 20% of the loan. The only scenario in which this change can be good for Kuflink is if there are substantial losses when 20% of losses will be greater than this profit reduction. So sadly I assume this is what Kuflink expect or at least fear. This is not an inducement to invest. <snip> There will be no losses. My cynical side says that why would KL default any loan covered by the PF when they can actively engage in can kicking like more than one other platform does. '....we're actively chasing the borrowers....' excuse will now come into play - so no defaults.
To remove the USP that KL had and offer it to investors as an act of generosity on their part I find offensive. Sorry KL, most investors have been around for too long to send you a 'thank you' e-mail for that move.
Also of course, there's no indication exactly how much will be allocated to the PF and how this is calculated. It's far too early in KL's career to calculate this figure on their experience. But no doubt this question will, if at all, be answered in an opaque way.
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madpierre
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Post by madpierre on Apr 19, 2018 19:16:00 GMT
This new policy is another blow for my P2P lending, with so many platforms going downhill I am running out of worthwhile choices. Sadly Kufflink have now lost their attractive niche in the market, which attracted most of us in the first place. I can only presume Kufflink Bridging were not happy with the interest rates their 20% stake was earning so are going elsewhere  and I think I will be joining them. |
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jcb208
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Post by jcb208 on Apr 19, 2018 19:38:21 GMT
Very disappointed as well, just when I thought I had been investing in a safer platform and upping my investments whilst running down others this hits the news, so I am running out of platforms I would invest new money in now, not sure about KF now either  |
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Liz
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Post by Liz on Apr 19, 2018 19:44:20 GMT
Let's see you expand your loan book when investors stop filling your loans.
You have shot yourself in the foot 👋
6-7% return with only a PF protection is far too risky.
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shimself
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Post by shimself on Apr 19, 2018 20:44:44 GMT
No it isn't. 20% in cash is not the same as a promise of 20% cover which is not guaranteed. Surely you get that. We can still provide the same guarantee to our investors in the form of 20% loss protection without the need to set aside 20% of every loan amount, but rather ensure that our provision fund is substantial enough to cover losses based on past performance of our loans. .. I think that the case is that to date not a single loan has failed (hurrah and thanks and well done). So judging by past performance the provison fund can be zero. Do you imagine for a moment lenders will find that comforting?
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metoo
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Post by metoo on Apr 19, 2018 22:01:06 GMT
I can understand you may not have enough capital to fund 20% of a larger loanbook. However, clearly the level of protection from a provision fund shared across all loans will be less, and will be less predictable for lenders. This does dilute Kuflink's USP, and reduces the justification for low interest rates.
For lenders to have any confidence in a provision fund they would at least need to see how much cash is in the fund, and the size of the live loan book, updated frequently. There would also need to be clarity on how the level of cover is to be maintained. In a property price crash, loans benefiting from the fund payouts first may empty the fund, leaving no protection for the remaining loans.
I previously assumed there were investors who were happy to fund Kuflink's 20% stake in the loans in return for a higher interest rate.
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Post by clayshooter on Apr 19, 2018 23:28:19 GMT
I have to agree that this is a bad move. On tje strength of it I wiĺl now no longer increase my planned investing, a pity as I really thought Kl were one of the best, but the risk/reward ratio is no longer good enough for me.
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madpierre
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Post by madpierre on Apr 20, 2018 7:58:27 GMT
I will not invest further at the present interest rates with a provision fund cover. Some of these loans do not fill quickly at the current rates anyway so the claim of more availability being good for Lenders is not wholly accurate. I already do not touch anything below 7% and have noticed rates slipping and quality dipping too so choices are already becoming limited. However I understand the problem Kufflink have with the level of funds required for their 20% stake should they expand further. For my part I will only invest if the interest rates become much more attractive for the increased risk level (the risks being kicking the default can down the road and multiple defaults draining the Provision Fund). Kufflink could also consider increasing the guaranteed Provision Fund cover above 20% as it won't be needed anyway because they don't have defaults |
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bugs4me
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Post by bugs4me on Apr 20, 2018 9:18:50 GMT
I’ve re-read this thread over and over - must be a masochist. kuflink do seem to be a bit touchy on the subject to say the least. Okay, appreciate they need to take the moral high ground about not commenting reference how other platforms operate but to be clear, the other platforms PF’s are not restricted to the first 20% loss. On the other hand, the other platforms conveniently delay defaults with the normal justification about we are still chasing the borrower - hence the loan has not defaulted. So apart from a couple of early payouts from their PF’s - in essence the funds are broke. The result is the absolute necessity to can kick and being offensive towards investors intelligence with false (IMO) optimistic updates. KL have failed to explain - a) to what level the PF will be funded as they do not posses any historical statistics regarding their loan book. b) will there actually be a separate PF or will it be funded directly from company funds. c) what constitutes a default to trigger the PF. Assuming the PF does activate and the can kicking has not taken place, if a loan returns only say 50% of investor’s original funding, then 20% from KL results in a 30% loss for investors. So it’s not a PF in the conventional sense but more of a restricted compensation scheme. My last post on the subject as the genius that thought this 20% PF up will keep silent plus I will not be committing further funds as things stand. Of course shouldn't we all be feeling grateful to KL for giving us the opportunity to increase our investments by an additional 20%!!!!! |
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jnm21
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Post by jnm21 on Apr 27, 2018 5:07:24 GMT
I see the platform Rep has voted in the poll 😏 May I ask how you can see who voted? Am I being silly & missing a joke?
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Apr 27, 2018 6:54:13 GMT
I see the platform Rep has voted in the poll 😏 May I ask how you can see who voted? Am I being silly & missing a joke? No and yes. Think about it.
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jnm21
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Post by jnm21 on Apr 27, 2018 9:22:56 GMT
May I ask how you can see who voted? Am I being silly & missing a joke? No and yes. Think about it. I did, only after I unvoted & revoted a dozen times, searched out your post & started writing the reply! You should write comms for P2P platforms (you have the writing style pegged - present a joke as a serious fact)! 
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shimself
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Post by shimself on May 1, 2018 21:31:07 GMT
I got an email today offering 20% first loss, and the select invest page still says it
What do you think? Rubbish admin or a change of heart?
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carolus
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Post by carolus on May 1, 2018 23:03:23 GMT
I got an email today offering 20% first loss, and the select invest page still says it What do you think? Rubbish admin or a change of heart? Email suggests it's because previous tranches of this loan have drawn down with the coinvestment. My guess is that logistically it was too tricky to have separate tranches of the same loan with different types of protection, rather than this being a full change of heart.
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jnm21
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Post by jnm21 on May 1, 2018 23:17:26 GMT
I got an email today offering 20% first loss, and the select invest page still says it What do you think? Rubbish admin or a change of heart? The investment page certainly shows the old style 20% skin! kuflink is this correct?
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and I think I will be joining them. 
