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Post by nickthefool on Jul 30, 2015 12:47:19 GMT
Yes I believe we are lending direct to the borrowers rather than to RS, but as RS guarantees the loan through the PF, the risk of losing your money is if RS fails (or stops running the PF somehow). I guess not quite the same as there are some potential reasons for RS to fail that don't mean loans will be defaulting (e.g. lack of borrowers), but IMO by far the most likely reason for RS to run into trouble is for mass defaulting of loans to occur.
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Post by Deleted on Jul 30, 2015 15:01:57 GMT
I'm sure WestonKev wouldn't mind me jumping in here as this is a wider industry point, but the Provision funds and Safeguard funds of the P2P lending world are NOT guarantees nor should they be considered as insurance products.
They are great mechanisms in helping to cover potential losses and go a long way to install trust in platforms but should not be considered guarantees. The FCA makes this very clear.
Mat
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Post by nickthefool on Jul 30, 2015 15:27:15 GMT
Sorry, lazy wording on my part. I know the PF is not a guarantee in a legal sense, and that RS mention in a few places on their site that it's not a guarantee. But as it's set up now, if the PF fails to pay out, then that's seriously bad news for RS's long term prospects.
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jonbvn
Member of DD Central
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Post by jonbvn on Jul 30, 2015 16:34:48 GMT
Yes, 5 yr. auto re-investment switched off....moving into 3 yr and about to dabble in Money Thing. I am loving Money Thing so far. It is now my preferred P2P company, whilst it remains relatively small & nimble;).
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Post by westonkevRS on Jul 30, 2015 17:09:21 GMT
....if the PF fails to pay out, then that's seriously bad news for RS's long term prospects. After platform failure risk, the risk of excessive defaults above the fund is the second key risk. RateSetter's primary innovation to the P2P industry was the concept of a Provision Fund and everything we do is centered around the fund. In truth, if the Provision Fund fails then RateSetter fails. Game over. The business could continue but it might take years to recover that trust, and probably never would. The Provision Fund is RateSetter. @ westonkevRS
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Post by bracknellboy on Jul 30, 2015 18:27:32 GMT
but is not Ratesetter's I Trust.... or is it ?
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Post by p2plender on Jul 30, 2015 21:17:56 GMT
so is there an example of 'platform risk' anyone wants to mention??
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markr
Member of DD Central
Posts: 766
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Post by markr on Jul 30, 2015 22:13:55 GMT
Are you Lord of the RateSettee, Kev?
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Post by westonkevRS on Jul 30, 2015 22:21:52 GMT
so is there an example of 'platform risk' anyone wants to mention?? There's at least two known to this forum that I'll be surprised if they last 12 months, probably not even to Christmas! But I'll not be saying the names on a public forum! But least say their volumes have not grown, they've gone publicly quiet, and they've made some desperate measures to raise operating cash or extract lender cash (and no, I'm not talking about a cash back!) @ westonkevRS
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Post by westonkevRS on Jul 30, 2015 22:23:06 GMT
Are you Lord of the RateSettee, Kev? Oops, I'll be in trouble with brand getting the name wrong! I'm the Zoolander of Risk.....
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Post by p2plender on Jul 31, 2015 9:04:45 GMT
platform risk now the new worry on top of defaults then....
And peeps willing to lend at the 6% and under marker. Hmmmm.
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Post by westonkevRS on Jul 31, 2015 20:51:01 GMT
platform risk now the new worry on top of defaults then.... And peeps willing to lend at the 6% and under marker. Hmmmm. I obviously wasn't talking about RateSetter, what with £15m in the Provision Fund and a load of recently raised cash sitting on the balance sheet (not unlike both Zopa and FC). I'm basically saying that peeps should watch out, I think lenders abviously know about default risk on loans. You've only got to scan this forum to see the defaults occurring and determine what your return could be (i.e. 10% isn't a normal return). I'm saying that I think people are under playing platform risk. Either under capitalised platforms that don't grow fast enough before their cash runs out, or where lenders disappear (perhaps because of defaults, a recession causing their risk appetite for P2P to diminish, or lack of deal flow). There will be platform failures, its inevitable. And unfortunately this will damage the reputation of everyone. So please peeps, don't look at the headline rate and loan defaults - make sure the platform will be around in 5+ years time.... @ westonkevRS
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Post by westonkevRS on Jul 31, 2015 20:53:50 GMT
but is not Ratesetter's I Trust.... or is it ? Turn of phrase, I mean the health of RateSetter as a platform is inextricably linked to the Provision Fund. If the fund fails, then so (probably) will RateSetter. And yes, the Provision Fund is held in a trust on behalf of lenders. Full detauls somewhere on the official web page. @ westonkevRS
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Post by Deleted on Aug 7, 2015 7:19:36 GMT
Currently 5.9% is the lowest on the 3yr and someone has offered 5.0% on the 5 year.
These are not the headline figures just the bottoms of the ladders. The headline figures are 6.0% 3-year and 5.9% 5-year
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jonah
Member of DD Central
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Post by jonah on Aug 7, 2015 7:56:50 GMT
Currently 5.9% is the lowest on the 3yr and someone has offered 5.0% on the 5 year. These are not the headline figures just the bottoms of the ladders. The headline figures are 6.0% 3-year and 5.9% 5-year My 5.9 on 3yr was around 180k in the queue iirc this morning... An hour later it was gone! the headline figures are probably 'wrong' due to the most recent 5yr loan being 6+ hrs ago. The volume in 3 year seems very high currently, at 10% of the 30 day volume in the last 24hrs. Not sure I understand what is going on there, but happy that another set of repayments is back out there.
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