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Post by nsiam on Jan 15, 2019 12:17:49 GMT
I generally like what I see with Welendus, but in the event of a recession, I believe it would go down ahead of most other automated investment platforms (hence why you are getting better returns here vs some other options out there). At the moment, PF is just covering around 100% of late payments (value changes all the time). Yes, most of those late payments will clear within 90 days, but in the event of a recession, this would no longer be the case. Given all loans are short term and high APR - most borrowers will be really exposed to even "mild" recession - otherwise, they would not be borrowing here and would be going via cheap loan routes available elsewhere. I would summarise this as a high-risk, high-return "black box" account. There is an advantage in short-term credit. This advantage is how quickly the loan book matures and the company's agility making changes and refreshing its loan book. In the event of a downturn, new loan issuing can be quickly reduced and models adjusted for the new market conditions. This is not the case for long term credit as the credit assessment may have been conducted long before the indications for economic changes.
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Post by Ace on Jan 15, 2019 14:25:03 GMT
I like Welendus enough to have contributed to their equity raise on Seedrs, so certainty not trying to cause panic, but... I seem to be the only one that is concerned when I look at the statistics. I mentioned it a while ago in another thread without comment, so I'm obviously explaining myself badly, as usual. Either that or it's so blindingly obvious that I'm wrong that it doesn't merit a reply. Given the title of this thread, I'll give it one last go. The current stats for the 2018 cohort are: Actual Average Default Rate = 1.5% Target Average Default Rate = 10% Provision Fund Coverage = 123.5% On the face of it, all well and good. The Provision fund was more than sufficient to cover defaults. However, what concerns me is that it appears that the PF would have been totally inadequate had the Actual DR hit the Target DR. It looks to me that the PF would only have been sufficient to cover 18.5% of the losses ( 123.5 * 1.5 / 10 ). Given the lack of others concern, I'm fairly sure that I must have misunderstood something. I'd be grateful if someone could make me look stupid so that I can get a better nights sleep. The Provision fund pays out on missed repayment which is long before defaulting. Meaning, the Provision Fund has already covered most of risker loans of 2018. As missed payment occur before default, the Provision fund has already covered higher value than the Target Average Default Rate. We will add more stats to cover different scenarios including downturns and recessions. Thank you for the reply nsiam, I am somewhat reassured. I had missed the point that the PF has already covered most of that cohorts loans that will eventually default. However, with the currently provided statistics, it seems to be impossible to get a feeling for how likely the PF would be able to cover defaults if the Actual Average Default Rate were to rise to the Target Average Default Rate. Therefore, I look forward to the additional statistics in the hope that they will make the position clearer. I should point out that l'm not at all unhappy with my Welendus investments, in fact I am intending to add to it this year. It's just that I would like more information on how the loan book is performing so that I can take an informed view on the likely sustainability of the platform. For not entirely altruistic reasons, I wish you good luck.
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Godanubis
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Post by Godanubis on Jan 16, 2019 0:32:46 GMT
I would imagine there would be the good old spanner in the works of timeframe. Defaulting a loan is not immediate and if there is an eventual recovery the fact the loan defaulted does not matter. We should be asking for loans deemed unrecoverable even though this would be for the PF coffers.
Unlike property loans there is no tangible asset to measure efficiency of model. “There is nought stranger than folk.”
Because of this we must rely on the selection criteria employed which I am sure are evolving daily. Add in a few AIs to the selection process and it will become the best available.
There will always be the rogue element out there but the selection of borrowers and the relatively low scope to gain any substantial money easily as in other high value loans elsewhere I would imagine make the platform very low on the baddies list.
Things are working well and it is an inherent trait of humans to be pessimistic but let us try to curb our instincts and go on the facts.
If the facts show an actual definable hint of a problem then we comment and await an lnformed response and possible solution.
The Welendus forum has always been a place where I could visit occasionally since things generally were going well with little to comment on.
Things are running well so let’s all have a wee rest and let them make us lots of nice 👍 profits.
That would give us all time to deal with the other petulant platforms that do require constant scrutiny.
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michaelc
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Post by michaelc on Jan 16, 2019 15:04:06 GMT
Thanks to all of you who have contributed to the subject of this thread so far. I'm glad so few posts deviated from the topic with a "its great!" or "its awful!" post. I'm aware it has been discussed before but it is a dynamic subject and I think it is healthy to revisit it regularly.
I have increased my investment recently and that is why I'm even more interested in this.
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michaelc
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Post by michaelc on Feb 4, 2019 16:30:21 GMT
I just checked the PV coverage and it shows 84.1 % Yesterday it was above 100.
Is it really that volatile ?
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benaj
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Post by benaj on Feb 4, 2019 17:40:57 GMT
I just checked the PV coverage and it shows 84.1 % Yesterday it was above 100. Is it really that volatile ? I think it dropped 30% from 114%. Considering my PF bonus is 31% of my total interest earning, these movements do make sense around around repayment date. Once these borrowers make the repayment, it should go back up. Just gone back to 100% one minute ago.
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Post by gravitykillz on Feb 13, 2019 9:52:57 GMT
Anyone know if the provision fund on welendus is stronger than the one on growth street ? Growth street has loans of around 70 million but a pf of 800,000. This concerns me. Was woñdering if it would be safer to move those funds to welendus ?
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Post by sayyestocress on Feb 13, 2019 12:10:45 GMT
Anyone know if the provision fund on welendus is stronger than the one on growth street ? Growth street has loans of around 70 million but a pf of 800,000. This concerns me. Was woñdering if it would be safer to move those funds to welendus ? I've no experience with growth street but as a percentage that seems low. But it's important to remember that these companies are very different animals. They will have very different models and what constitutes a sufficient provision fund will be very different between the two companies. Welendus needs a big provision fund because the late payment / default risk is high due to being short term personal loans for cash strapped inidividuals. I would hope a company lending to businesses has much lower need for a provision fund.
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michaelc
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Post by michaelc on Feb 13, 2019 15:24:18 GMT
Anyone know if the provision fund on welendus is stronger than the one on growth street ? Growth street has loans of around 70 million but a pf of 800,000. This concerns me. Was woñdering if it would be safer to move those funds to welendus ? I've no experience with growth street but as a percentage that seems low. But it's important to remember that these companies are very different animals. They will have very different models and what constitutes a sufficient provision fund will be very different between the two companies. Welendus needs a big provision fund because the late payment / default risk is high due to being short term personal loans for cash strapped inidividuals. I would hope a company lending to businesses has much lower need for a provision fund. Yes I would agree. Also I think the pf in W is not only acting as a pf in the sense that it is integral to the model I think. I think it acts like a very large buffer to smooth out the spiky inflows from payments that are made with relatively huge interest rates but also relatively huge variance. I don't know what would happen if the FCA ever decides to ban PFs - perhaps W could argue this isn't a pf in the normal sense? Perhaps this also shows how stupid it would be for the FCA to meddle?
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Post by nesako on Feb 13, 2019 22:16:37 GMT
I've no experience with growth street but as a percentage that seems low. But it's important to remember that these companies are very different animals. They will have very different models and what constitutes a sufficient provision fund will be very different between the two companies. Welendus needs a big provision fund because the late payment / default risk is high due to being short term personal loans for cash strapped inidividuals. I would hope a company lending to businesses has much lower need for a provision fund. Yes I would agree. Also I think the pf in W is not only acting as a pf in the sense that it is integral to the model I think. I think it acts like a very large buffer to smooth out the spiky inflows from payments that are made with relatively huge interest rates but also relatively huge variance. I don't know what would happen if the FCA ever decides to ban PFs - perhaps W could argue this isn't a pf in the normal sense? Perhaps this also shows how stupid it would be for the FCA to meddle? Is it possible to see current outstanding loans value as well as PF value somewhere on Welendus? All I can see is cumulative amount lent and that PF = current total of all loans which are late by 35+ days (which may well be quite a large % of the loan book). PS. GS outstanding loans value is actually £22M with 818K provision fund. 80M is a cumulative amount lent and includes repaid loans
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michaelc
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Post by michaelc on Feb 13, 2019 23:07:26 GMT
Yes I would agree. Also I think the pf in W is not only acting as a pf in the sense that it is integral to the model I think. I think it acts like a very large buffer to smooth out the spiky inflows from payments that are made with relatively huge interest rates but also relatively huge variance. I don't know what would happen if the FCA ever decides to ban PFs - perhaps W could argue this isn't a pf in the normal sense? Perhaps this also shows how stupid it would be for the FCA to meddle? Is it possible to see current outstanding loans value as well as PF value somewhere on Welendus? All I can see is cumulative amount lent and that PF = current total of all loans which are late by 35+ days (which may well be quite a large % of the loan book). PS. GS outstanding loans value is actually £22M with 818K provision fund. 80M is a cumulative amount lent and includes repaid loans Not as far as I know. I think until a few months ago the PF was shown as an actual amount and not just a percentage. I don't understand why that was pulled. I like W but for me the biggest weakness is transparency and clarity. If I had that I'd increase lending by an order of magnitude. Trouble is I don't think they particularly need more lenders right now.
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Godanubis
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Post by Godanubis on Feb 13, 2019 23:11:49 GMT
Is it possible to see current outstanding loans value as well as PF value somewhere on Welendus? All I can see is cumulative amount lent and that PF = current total of all loans which are late by 35+ days (which may well be quite a large % of the loan book). PS. GS outstanding loans value is actually £22M with 818K provision fund. 80M is a cumulative amount lent and includes repaid loans Not as far as I know. I think until a few months ago the PF was shown as an actual amount and not just a percentage. I don't understand why that was pulled. I like W but for me the biggest weakness is transparency and clarity. If I had that I'd increase lending by an order of magnitude. Trouble is I don't think they particularly need more lenders right now. Seems to be getting better i'm investing about £250 a day and it gets allocated that day at 11.5-15%
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Post by Ace on Feb 13, 2019 23:57:18 GMT
Not as far as I know. I think until a few months ago the PF was shown as an actual amount and not just a percentage. I don't understand why that was pulled. I like W but for me the biggest weakness is transparency and clarity. If I had that I'd increase lending by an order of magnitude. Trouble is I don't think they particularly need more lenders right now. Seems to be getting better i'm investing about £250 a day and it gets allocated that day at 11.5-15% That proves that new cash is taking priority over reinvestments. I had significant uninvested repayments for 3 weeks.
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Godanubis
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Post by Godanubis on Feb 14, 2019 0:05:23 GMT
Seems to be getting better i'm investing about £250 a day and it gets allocated that day at 11.5-15% That proves that new cash is taking priority over reinvestments. I had significant uninvested repayments for 3 weeks. That is not good. . That affects us all. I had a hundred to be reinvested from PF buyout and it went ok.
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Post by Ace on Feb 14, 2019 0:16:47 GMT
That proves that new cash is taking priority over reinvestments. I had significant uninvested repayments for 3 weeks. That is not good. . That affects us all. I had a hundred to be reinvested from PF buyout and it went ok. Impossible to be sure, but perhaps it's prioritized on the total size of an investors funds. I'm pretty sure that yours is much bigger than mine 😆 Would probably make good business sense to keep bigger hitters happier. Might not be true, but since they refuse to explain we're bound to look for patterns to try and understand!
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