Author: wiseclerk

International P2P Lending Volumes February 2018

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The table lists the loan originations of p2p lending marketplaces for last month. Funding Circle leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces adds up to 454 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file, I can publish statistics on the monthly loan originations for selected p2p lending platforms.

This month I added Nexoos.

Mintos reached 500M EUR originated since launch. Twino reached 250M EUR originated since launch.

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available. UK investors can compare IFISA rates.

P2P Lending Statistic February 2018
Table: P2P Lending Volumes in February 2018. Source: own research

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading →

Collateral UK in Adminstration – a Summary for Investors

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Yesterday evening investors on the Collateral p2p lending marketplace were informed via email by a letter by Gordon Craig that he was appointed administrator for Collateral (UK) Ltd, the company running the marketplace.

The company is continuing to trade under his supervision, but will not be facilitating any new loans and the secondary market is closed at the moment. Reason for the company going into administration is given as ‘The Company was operating in the belief that it was authorised and regulated by the Financial Conduct Authority under interim permission. It has transpired that this is not the case and consequently the Company has ceased lending‘.

Most reassuring for investors into loans is, that he states: ‘Please note that your investment is safe and this is a procedural and compliance issue. … ‘

Investors into loans do not need to take any immediate action. ‘I have lent money via the Collateral platform do I need to do anything? No. Subject to the borrower continuing to make payments of interest and capital those will be returned to you in accordance with the Collateral terms and conditions.’

At a later point it was clarified that uninvested cash and money invested in loans without drawdown is also safe:’ I can confirm however that any monies that are sat on the platform and are not invested are ring fenced in a separate client account and the intention is for these to be returned to all investors after the Administrator has obtained control of the bank account and carried out a reconciliation.‘

As P2P-Banking has learned, the individual loans are bankruptcy remote, with security held by a separate security trustee – Collateral Security Trustee Ltd.

Collateral has lent about 17 million GBP since the start, most loans were secured by property.

So that are the positive points.

It remains unclear to me how Collateral could have misjudged the regulatory status? The interim permission seems to have lapsed on January 29th. Again it is unclear whether it was actively revoked by the FCA. Investors analyzed yesterday that Collateral had quitely removed references to FCA authorisation (e.g. from email footer) after January 30th. Worse yet the company seems to have changed T&C materially and investors complain they were not notified about any change of T&Cs.

There is also the question why it was allowed to continue to operate from January 29th to February 28th, if it did not have the necessary regulatory approval (anymore). And the lack of communication (prior to the letter of the administrator which is comprehensive) is a disaster (see my previous article). Putting up a server maintenance note for two days, when you are going into administration is not the right way to do it in my opinion.

The adminstrator has not decided if the website will go live again ‘We are currently looking into the website and the possibility of this being reopened in order for investors to view the balance of their investments, however this isn’t something that will be dealt with until next week at the earliest.’

Several other UK platforms have emailed investors and informed them about procedures in place to reassure them that they have taken all the necessary precautions to be prepared in case of a situation like this.

To sum it up, while it is very unfortunate that a platform goes into adminstration with a chance that eventually it will go out of business, it looks like investors into loans will get off fairly lightly.

According to the FT the FCA commented it was ‘aware of the issue and working with the firm‘. The role of the FCA in this happening leaves some questions open for debate at the moment.

 

What’s Up at Collateral?

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Update Feb 28th, 10:50pm: according to a message recieved by affected investors, Collateral (UK) Ltd is going into administration

Or rather, why is Collateral down? A question concerned investors have been speculating on for over 36 hours now, since the website of UK p2p lending platform Collateral went down around 7pm two days ago and is showing a maintenance message. Investors criticize that there was no pre-announcement of this maintenance and worse that Collateral seemed to have ceased all communications to investors and did not react to any phone or email messages.

With no communications from the platform whatsoever investors wondered what to do. Some investors reported the incident to ActionFraud squad of the police while another contacted the FCA to voice his concern and seek advice.

This morning Collateral sent out this email to investors: ‘An update is being prepared and will be emailed to all lenders later today. Thanks for your patience, The Collateral Team‘.

So while at the time of writing of this article it is unclear what’s up at Collateral, this event does present two general questions in my view:

1) How should a p2p lending platform communicate in a crisis?

In my view not communicating at all is the worst choice. As investors pointed out, even if the nature of the crisis prevented communication through own website or email, then the platform could have elected to leave a message via the Twitter or Facebook channel. While that would have not reached all investors, it would have been better than silence.

2) What can concerned investors actually do to react, if the platform is seemingly unreachable/unresponding over a longer period of time?

The discussions amongst investors show great frustration on this point. And the questions is, how helpful any of the discussed measures really would be. The main suggestions were trying alternative phone contacts (calling management directly), visiting office in person, reporting to authorities (police, FCA), alerting the press.

From this incident I would say there is little investors can do to force an immediate reaction.

Regardless what was happening and what the outcome will be, my opinion is that this will tarnish the reputation of Collateral and that investors might try to withdraw (part) of their funds, once the platform is operational again.

Collateral maintenace message

Mintos Adds First Loan Originator From the UK

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P2P lending marketplace Mintos has added 1pm as new loan originator on the platform. 1pm is an FCA accredited non-bank finance provider which is publicly listed on the AIM market on the London Stock Exchange. The company provides various loan types to SMEs in Britain. On Mintos 1pm offers business loans for investment in GBP, with an interest rate of up to 11%.

1pm was founded in 2000 and listed on the London Stock Exchange in 2006. The company is dedicated to helping the United Kingdom’s economy grow by providing finance to businesses. It offers many finance solutions to SMEs within the United Kingdom including asset and vehicle finance, hire purchase, commercial loans and invoice financing.

1pm currently operates from eight sites across the United Kingdom. The company employs 170 people and has more than 16,000 small businesses as clients.

“An important part of our strategic growth plan is to harness the benefits of financial technology. By joining the Mintos marketplace, we will now be able to accelerate the amount of loans that are originated by our business and to access retail global investors efficiently, a funding source that would be unavailable to us without this digital capability,” says CEO of 1pm plc Ian Smith.

1pm business loans from the United Kingdom on Mintos range from GBP 3 000 to 50 000. The repayment period is from 3 months to 5 years. .

1pm has a total lease, loan and invoice finance portfolio of GBP 130 million. The interim financial results for the six-month period that ended on 30 November 2017 for 1pm plc showed the group’s revenue increased by 74% to GBP 13.9 million. Profit before tax for the group increased by 77% to GBP 3.6 million.

“The United Kingdom has one of the largest alternative finance markets in the world. We are very excited to have expanded Mintos into this geography by launching 1pm on the marketplace. The company is a great addition and offers investors on Mintos a new geography and further opportunities in GBP investments. We look forward to this partnership with 1pm and to seeing further partnerships arise in this market,” says Martins Sulte, CEO and Co-founder of Mintos.

ING Diba Buys Lendico

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Bank ING Diba acquires p2p lending marketplace Lendico. According to Finanz-Szene.de the transaction was reported to the German Federal Cartel Authority last week. The bank has confirmed the acquisition.

Lendico went through hard times. It had to cut back on international activities, never really took off on German home turf and realigned from consumer lending to SME lending. Last year the majority stake was sold from Rocket Internet to Arrowgrass.

Speculation is that the bank acquired Lendico in a make or buy decision to save development time for an own platform, which could have taken over a year. While the price of the acquisition was not disclosed, I suspect Lendico could have come cheap, considering the lingering of the business in the past years.

Ratesetter Launches IFISA Offer

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Ratesetter announced it will launch the IFISA product offer tomorrow. The Ratesetter ISA will initially be available to existing customers, then to new customers on 1 March and to inward transfers from other ISAs in April.

Key features of the Ratesetter ISA:

  • Average interest rates are 3% to 6% p.a. depending on level of access.
  • Ratesetter says it takes less than five minutes to open a Ratesetter account online.
  • All investors are automatically covered by Ratesetter’s Provision Fund which manages and diversifies risk, meaning investors do not need to choose specific loans. The Provision Fund has ensured that, to date, every individual Ratesetter investor has received their capital and interest in full. Lending on Ratesetter is an investment and capital is at risk.
  • The Ratesetter ISA is a flexible ISA. Investors can withdraw money and replace it later in the same tax year without losing their tax-free allowance.

Ratesetter’s CEO and founder, Rhydian Lewis OBE, told P2P-Banking:

‘RateSetter’s purpose is to give people the opportunity to earn more on their money. Our ISA makes that opportunity even more compelling because investing is now tax-free.

 Cash ISA savers are frustrated with low interest rates, while inflation is always nibbling away at their money. Stocks & Shares ISA investors have enjoyed good returns recently but may be nervous of market falls, as demonstrated in the last few days. Lending is a third asset class in the middle, offering the potential for higher returns than cash without the volatility of shares.

 With RateSetter’s excellent track record and our focus on the retail investor, we believe our ISA will become an attractive home for people looking to put their money to work.’

For more Innovative Finance ISA products see the large P2P-Banking IFISA comparison table.