michaelc
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Post by michaelc on Jun 9, 2018 18:20:50 GMT
I see its at 49K now? I wonder if this is because it was manually topped up by the platform or if it has grown due to repayments? MY guess is the former since it seems to have been a sudden increase.
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Post by Proptechfish on Aug 11, 2018 15:19:03 GMT
I believe the PF was manually topped up as i noticed a big chunk being added after monitoring the fund decreasing over a few months. I have just noticed though, that they have changed the provision fund stat to a fund coverage % rather than the a provision fund monetary balance. I only see this as a step away from transparency, i'm not sure what the justification is and i'm not massively worried at this time as WLU are implementing some positive changes. In my experience so far though platforms have tinkered with PF data, made it less transparent and all of sudden 'poof'! The PF is gone. Maybe i'm cynical but an explanation for this move would be appreciated nsiam ?
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michaelc
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Post by michaelc on Aug 11, 2018 16:09:20 GMT
I totally agree and funnily enough just came to the forum to see if anyone knew anything about why it had gone then I saw your post just a few minutes ago!
An actual figure and a percentage would be good.
Overall as far as I'm concerned the jury is still out on this one. My toe is still dipped but it is just a toe. Its a very interesting concept but I find some of the website confusing and certainly cluttered.
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Post by nsiam on Aug 11, 2018 18:05:45 GMT
I believe the PF was manually topped up as i noticed a big chunk being added after monitoring the fund decreasing over a few months. I have just noticed though, that they have changed the provision fund stat to a fund coverage % rather than the a provision fund monetary balance. I only see this as a step away from transparency, i'm not sure what the justification is and i'm not massively worried at this time as WLU are implementing some positive changes. In my experience so far though platforms have tinkered with PF data, made it less transparent and all of sudden 'poof'! The PF is gone. Maybe i'm cynical but an explanation for this move would be appreciated nsiam ? Proptechfish, The reason for the change is to give lenders a more meaningful number to represent the PF cover. Using our previous approach each investor was interpreting the data differently. But now with the change, we believe the new one value of percentage PF cover gives investors one representative number to rely on rather than few parameters which can be used for different calculations. We are not moving away from transparency. We are all in for transparency. We would just like to make the information presented easy to understand and to use for experts and beginners a like. With the above in mind, we will be adding more data to our analytics as we build up volumes.As we are just testing this new display, it will be good to get your thoughts and feedback. Hope this clarifies the reason for the change. Best, Nadeem
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Post by nsiam on Aug 11, 2018 18:09:05 GMT
I totally agree and funnily enough just came to the forum to see if anyone knew anything about why it had gone then I saw your post just a few minutes ago! An actual figure and a percentage would be good. Overall as far as I'm concerned the jury is still out on this one. My toe is still dipped but it is just a toe. Its a very interesting concept but I find some of the website confusing and certainly cluttered. michaelc , thank you for your feedback. We understand the website is a bit confusing and we have already started working on a better frontend user experience to make it clearer. All feedback on what you would like to see and what you would like removed will be welcomed and taken into consideration as we are now making the updates. Best, Nadeem
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Post by Proptechfish on Aug 11, 2018 18:43:16 GMT
I believe the PF was manually topped up as i noticed a big chunk being added after monitoring the fund decreasing over a few months. I have just noticed though, that they have changed the provision fund stat to a fund coverage % rather than the a provision fund monetary balance. I only see this as a step away from transparency, i'm not sure what the justification is and i'm not massively worried at this time as WLU are implementing some positive changes. In my experience so far though platforms have tinkered with PF data, made it less transparent and all of sudden 'poof'! The PF is gone. Maybe i'm cynical but an explanation for this move would be appreciated nsiam ? Proptechfish , The reason for the change is to give lenders a more meaningful number to represent the PF cover. Using our previous approach each investor was interpreting the data differently. But now with the change, we believe the new one value of percentage PF cover gives investors one representative number to rely on rather than few parameters which can be used for different calculations. We are not moving away from transparency. We are all in for transparency. We would just like to make the information presented easy to understand and to use for experts and beginners a like. With the above in mind, we will be adding more data to our analytics as we build up volumes.As we are just testing this new display, it will be good to get your thoughts and feedback. Hope this clarifies the reason for the change. Best, Nadeem I appreciate the timely reply and understand the reasoning. WLU have my full support, so much so i've recently purchased equity so i am optimistic about the future for this platform. I am however understandably cautious having come across a few platforms i rather wouldn't have. So you can rely my continued questioning, in a constructive way of course, as WLU develops. Thanks Nadeem.
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Post by Ace on Aug 23, 2018 23:25:10 GMT
Hi nsiam , I'm concerned regarding the current values on the Welendus statistics page. The figures just before midnight on 23/08/2018 are: Total Amount Lent (£GBP): £453k Average Loan Term: 101 days Actual Average Default Rate: 0.9% Target Average Default Rate: 10% Provision Fund Coverage: 98.9%So, the PF contains slightly less cash than the total missed payments that are more than 30 days late. And, the current Actual Average Default Rate (AADR) is less than 1/11 of the Target Average Default Rate (TADR). It is the size of the PF that is concerning me, particularly given the that the current AADR is very low. Assuming that the AADR is highly correlated to the value of missed payments; if the AADR were to rise to the TADR, the PF coverage would then be roughly 8.9%. This appears to me to be inadequate. Hence, my concern. I expect that there is a flaw in my logic somewhere and am hoping that you will point it out for me.
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Ukmikk
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Post by Ukmikk on Aug 24, 2018 9:49:53 GMT
Hi nsiam , I'm concerned regarding the current values on the Welendus statistics page. The figures just before midnight on 23/08/2018 are: Total Amount Lent (£GBP): £453k Average Loan Term: 101 days Actual Average Default Rate: 0.9% Target Average Default Rate: 10% Provision Fund Coverage: 98.9%So, the PF contains slightly less cash than the total missed payments that are more than 30 days late. And, the current Actual Average Default Rate (AADR) is less than 1/11 of the Target Average Default Rate (TADR). It is the size of the PF that is concerning me, particularly given the that the current AADR is very low. Assuming that the AADR is highly correlated to the value of missed payments; if the AADR were to rise to the TADR, the PF coverage would then be roughly 8.9%. This appears to me to be inadequate. Hence, my concern. I expect that there is a flaw in my logic somewhere and am hoping that you will point it out for me. So PF coverage of missed payments (over 30 days late) is 98.9% (its actually up to 108.1 % as I write). IF all those missed payments convert to defaults (and I guess in reality they won't), then the PF will cover 98.9% of those defaults (or 108% today). Whether or not those defaults amount to more or less than the TADR is a different question, and the AADR would suggest we are running at a much lower rate. It would be useful to see % values for the current rate/target rate of late payments (as a % of all loans) to see the correllation between Missed payments and eventual defaults.
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Post by Ace on Aug 24, 2018 12:24:48 GMT
... IF all those missed payments convert to defaults (and I guess in reality they won't), then the PF will cover 98.9% of those defaults (or 108% today). ... Hi Ukmikk , thanks for replying. Unless I'm missing something, I don't think what you've written here is correct. The info text associated with the PF coverage statistic states: ' Provision Fund coverage presented as percentage of the Provision Fund balance to missed repayments (over 30 days late).' If a loan with a missed payment turns into a default the amount lost would generally be much larger than the value of a missed payment. For example: if a £100 loan was missing a £7 interest payment and later became a default, it would be £107 that was owing, not just the £7 that a 100% PF stat would cover! Perhaps the PF coverage text is incorrect and should read: ' Provision Fund coverage presented as percentage of the Provision Fund balance to missed repayments (over 30 days late) and associated loan balances.' In which case, I would agree with your comment.
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Ukmikk
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Post by Ukmikk on Aug 24, 2018 13:24:56 GMT
... IF all those missed payments convert to defaults (and I guess in reality they won't), then the PF will cover 98.9% of those defaults (or 108% today). ... Hi Ukmikk , thanks for replying. Unless I'm missing something, I don't think what you've written here is correct. The info text associated with the PF coverage statistic states: ' Provision Fund coverage presented as percentage of the Provision Fund balance to missed repayments (over 30 days late).' If a loan with a missed payment turns into a default the amount lost would generally be much larger than the value of a missed payment. For example: if a £100 loan was missing a £7 interest payment and later became a default, it would be £107 that was owing, not just the £7 that a 100% PF stat would cover! Perhaps the PF coverage text is incorrect and should read: ' Provision Fund coverage presented as percentage of the Provision Fund balance to missed repayments (over 30 days late) and associated loan balances.' In which case, I would agree with your comment. Hi Ace , thats a good challenge and I can understand your concern now. I guess it all boils down to what is the PF being measured against - I took it to be against the principal balances of the late paying loans as this is what the PF seeks to reimburse. From the statistics page; "Investors using Welendus benefit from the provision fund which will aim to reimburse lenders in the event of borrower missing a payment by longer than the investor’s pre-selected grace period. This provision fund protection is not a guarantee but we aim to pay all our investors for their principal losses." So the PF compensates for the principal not the interest, therefore it would not make sense to quote the PF as a proportion of the missed payments (interest). I took it to mean the percentage of the loans themselves but you are right, its not clear from the wording. Again over to nsiam for clarification (and I will keep quiet ).
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Post by Proptechfish on Aug 24, 2018 20:13:25 GMT
I think i'm right in saying the % coverage refers to the total outstanding 'principle' not the interest. I would think the missed interest paid as 'additional earnings' (from provision fund acquired loans) is paid from the WLU share of income. This was always my impression going back 6 months when i started. I've also aways viewed the 'additional earnings' payments as a rolling promotion that could be ended at anytime however i know there is talk of ways to continue this generous 'promotion' beyond soft launch. Ace Ukmikk Do either of you have Seeders ? WLU have an investment deck right now and theres lots of discussions on there you might find useful
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Post by Ace on Aug 24, 2018 20:20:48 GMT
I think i'm right in saying the % coverage refers to the total outstanding 'principle' not the interest. I would think the missed interest paid as 'additional earnings' (from provision fund acquired loans) is paid from the WLU share of income. This was always my impression going back 6 months when i started. I've also aways viewed the 'additional earnings' payments as a rolling promotion that could be ended at anytime however i know there is talk of ways to continue this generous 'promotion' beyond soft launch. Ace Ukmikk Do either of you have Seeders ? WLU have an investment deck right now and theres lots of discussions on there you might find useful Yes, I have a small equity investment in Welendus through Seeders. I'll go take a look there. If you're right about the PF they really should correct the PF info statement to make it accurate.
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Post by nsiam on Aug 25, 2018 17:39:31 GMT
Hi Proptechfish, Ace, Ukmikk and all, The provisional fund coverage is presented as follow; (Provision fund balance / Total of full principal of all live p2p loans) / Actual missed payment rate @ 30days With the above in mind, the provision fund cover is representative of the PF ability to pay out for all the principal of live loans once they become 30 days late.
Note that actual missed repayment rate used in the equation above is calculated based on actual current performance. Note that loans that are more than 30days on repayment are already bought by the provision fund from the investor. Therefore between 30days late and default, the risk is no longer on the investor. Please also note that the calculation is calculated live and hence the fluctuation with repayments and loan issue. Hope this answers your questions and clarifies. Thanks, Nadeem
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Post by Ace on Aug 25, 2018 20:20:01 GMT
Thanks for the reply Nadeem, I feel suitably reassured.
I assume that the definition of "Actual missed payment rate @ 30days" is:
(The total number of loans issued by the platform) / (The number of loans that have a repayment become overdue buy more than 30 days)
If so, will this be measured over a fixed time, e.g. over a rolling year, or will it be measured over all time?
Regardless, IMHO the current description on the website is incorrect, or at the least misleading. I would personally prefer a full and accurate description, ideally with a worked example. But, if you want to stick with a short descriptive sentence, how about "The Provision Fund Coverage is a measure of the Provision Fund's ability to cover all loan principles at the current missed payment rate ( > 30 days) expressed as a percentage". Though I'm sure someone will come up with something better; I'm definitely no wordsmith!
As others have mentioned, it would be nice to also have the Actual size of the PF restored.
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Post by nsiam on Aug 26, 2018 14:06:14 GMT
Thanks for the reply Nadeem, I feel suitably reassured. I assume that the definition of "Actual missed payment rate @ 30days" is: (The total number of loans issued by the platform) / (The number of loans that have a repayment become overdue buy more than 30 days) If so, will this be measured over a fixed time, e.g. over a rolling year, or will it be measured over all time? Regardless, IMHO the current description on the website is incorrect, or at the least misleading. I would personally prefer a full and accurate description, ideally with a worked example. But, if you want to stick with a short descriptive sentence, how about "The Provision Fund Coverage is a measure of the Provision Fund's ability to cover all loan principles at the current missed payment rate ( > 30 days) expressed as a percentage". Though I'm sure someone will come up with something better; I'm definitely no wordsmith! As others have mentioned, it would be nice to also have the Actual size of the PF restored. Hi Ace, You are correct. Just a slight update on your calculation is as follow; (The total number of loans issued by the platform with payments due today or earlier) / (The number of loans that have a repayment become overdue buy more than 30 days) The addition above ensures that the increased volumes does not wrongly dilute the missed payment rate stats. With regards to the second part of the question, the calculation is for all 2018 volumes. When we are over 1 year old, we will start looking at historical data as well. We will look into better wording the definition. Thanks, Nadeem
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