Thin Cats Calls it a Day For Retail Investors – Puts Loans in Run-Off

British p2p lending marketplace Thin Cats announced that it will cease to offer new loans to retail investors. Thin Cats had facilitated about 556 million loans to UK business clients on its marketplace.

UPDATE: The headline hase been edited compared to an earlier version to clarify that the company only stopped to offer retail p2p loans. This confusion resulted from the fact that the announcement below made no mention that the company will focus on institutional clients in future.

The Thin Cats announcement reads:

You have probably noticed that the number of new loans for investment
on the P2P platform operated by Business Loan Network Limited (BLN),
one of the ThinCats Group companies, has fallen significantly over the
last two years.

Following a thorough review, we have concluded it is no longer cost
effective and practicable to raise funds in this way, so have decided to
close the P2P platform to new business and initiate a run-off process
for existing investors.

This proposal has been discussed with the Financial Conduct Authority
(FCA) and we have made a voluntary request to the FCA that the
permissions to operate an electronic platform be closed to new business.

Our decision to initiate the ThinCats P2P Platform run-off has had the
following impacts which became effective at 12.01am on 9 December 2019.

No new loans will be offered on the ThinCats P2P Platform
The secondary market has closed and any loan parts listed for sale at the time of closure have been cancelled
No new accounts, including ISA accounts, can be opened
No new lender deposits can be accepted

Please note that investors can continue to log in to their account(s) in
the usual way until such time as their account closes as part of the
run-off process.

Crucially all of our existing systems and controls will remain in place
to ensure investors’ interest and capital is collected when due or
otherwise actively recovered. Investors can continue to withdraw any
cash balances to their nominated bank account following the usual lender
withdrawal request process. It is no longer possible to add new funds
to your account(s), although loan repayments collected on your behalf
will continue in the normal way.

The effect on different categories of investor is detailed below:

1. Lenders holding performing loans

Lenders with status “A” loans that are performing as expected will
continue to receive interest and capital repayments in line with the
original loan schedule. We would encourage you to withdraw your cash
balances periodically.

Following the closure of the secondary market, you can no longer buy or
sell any loan parts and any loan parts currently listed for sale will be
cancelled.

For any performing loans that may subsequently become non-performing, these will be treated as described in section 2 below.

2. Lenders holding non-performing loans

For lenders with loans that are not performing in line with the original
loan schedule, we will continue to endeavour to maximise the returns to
lenders through our normal monitoring and recovery process. There will
be no additional impact from the introduction of a run-off period and we
will continue to email you with updates on specific non-performing
loans.

Once we have secured the maximum value from non-performing loans,
lenders will be asked to withdraw any remaining cash balances and close
their account.

3. Investors in Diversified Loan Portfolios (DLPs)

DLPs have a minimum Target Term, typically two years, during which it is
not possible to sell underlying loan parts. Following the closure of
the secondary market, performing loans within DLPs will no longer be
offered for sale via the secondary market towards the end of the Target
Term. Payments from these loans will, instead, continue until the loan
matures.

We will contact you separately with the proposed run off schedule for
each DLP that you hold and you will continue to receive DLP statements
on a quarterly basis.

Any non-performing loans within a DLP will be treated as described in section 2 above.

4. Registered investors with funded accounts but not holding loan parts

For investors that have cash balances in their ThinCats account(s) but
do not hold any loan parts, we encourage you to withdraw your cash to
your nominated bank account as soon as possible in the usual manner.

Once your account has a zero balance we will close your account. If you
do not withdraw any remaining cash balances, we will contact you again
to remind you of the need to transfer all monies out of your account.

5. ISAs

If you hold a loan or DLP within a ThinCats ISA, we will contact you
separately with details of the options open to you. It is no longer
possible to open a ThinCats ISA for the current tax year.

6. ThinCats Lending Clubs (“TLC”)

All TLCs have now come to the end of their term and those that remain
open are still to receive future realisations from non-performing loans
in each portfolio.

Once all possible realisations have been achieved the respective TLC will be closed and you will be notified accordingly.

In summary

The main impact of the platform run-off process is that no new loans
will be offered on the ThinCats P2P Platform and it is no longer
possible to open a new account.

In most other aspects, other than the closing of the secondary market,
the platform will continue very much as now: you will continue to
receive interest and capital repayments for performing loans and we will
continue to monitor loans and invoke recovery procedures in the normal
way. You will be able to log in to your account in exactly the same way.

We are committed to treating all customers fairly during the run-off
process and recognise it may raise a number of questions with investors.

Mintos Invest & Access Seems to Have Left ‘Normal Market Conditions’ for the First Time – Leaving Some Investors Surprised

In June Mintos introduced the Invest & Access product which was designed to make it as easy as possible for investors to invest on Mintos. You can read my article about the introduction here. One main aspect offered was that it promised high liquidity, which came with the disclamer ‘you should be able to access your money anytime under normal market conditions’. Another restriction was that this applied only to current loans, so with a typical portfolio of about 20-30% lates, investors could cash out about 70-80% of the portfolio fast.

I doubt that many investors observed the “under normal market conditions” part of the offer. And those who did, probably saw it as a theoretical definition, rather than a real possibility.

Well know, 6  months later, we observe the first time Mintos Invest & Access have left the ‘Normal market conditions’ state. Investors requesting withdrawals from their Invest&Access account since Friday report they received only part of the requested amount so far (about 700 out of 2000 Euro here; and 780 out of 9800 Euro here; there are further examples known to me.). Several investors expressed surprise that they could not cash out current loans fast.
Cashouts requested up to  Thursday are reported to have been completed as expected

The cause of course is that the liquidity of Invest&Access is dependent on Mintos being able to sell the loan part of investors wanting to cash out to other investors.

On Friday around noon, the Central Bank of Kosovo announced that it had revoked the licenses of Monego and Iute Kosovo loan originators which both had loans listed on Mintos. In the afternoon many investors sold loans from those originators through the Mintos secondary market until Mintos suspended the trading of these loans around 5:04pm (CET).
Following these occurences this seems to have for the first time on Mintos created higher cashout demands than requests for investing on reinvesting on the Invest&Access product and this is why some investors are seeing partial/delayed withdrawals currently. It is unknown whether the I&A product has a buffer to soften the impact of such cases, but it seems not (or it has been depleted in this instance)

Edit to clarify: the Invest&Access product behaves as described in the small print, it is just that some investors seem to have different expectations and gauged the associated risks differently. Investing in p2p lending is a high risk investment.

I’ve contacted Mintos for comment on the current liquidity situation of I&A but have not yet received a reply.

If you are an Invest&Access investor and want to cashout, you might not be aware that you have the option to normally list the loans on the secondary market. Therefore if you want to skip the invest&access selling queue (which I assume exists), you can just list your loans. Offering 0.1% to 0.2% discount might be sufficient to sell them. I am not advocating this, just informing you that it is possible to try that.

 

Platform Moneything In Wind-Down

Moneything logoThis morning british p2p lending platform Moneything announced that it will wind-down operations citing difficulties to compete in current market conditions. The platform facilitated 92.3 million GBP in loans since launch in 2015. 20.3 million GBP of the loans are still outstanding.

The full announcement sent to investors reads:

We have taken the decision to place MoneyThing into orderly wind-down and we are no longer taking any new investments or new customers.

We have found it is increasingly difficult to compete in the current market conditions and we expect there is a tougher economic environment to come.

During wind-down the business will continue to be managed and administered by the existing directors and our aim will be to minimise any disruption to our customers and ensure the safe return of funds.

We have provided detailed information on the platform on why we have taken this decision and how it affects our lender customers. Please log in to view.

We would like to thank all of our lenders for their support over the past few years. We made a commitment to lenders to provide a service and we would like to reassure lenders that that commitment will continue until the wind-down has been completed.

We have not been able to make MoneyThing a success. We will however aim to exit the market quietly with minimum disruption to our customers and the industry as a whole.

Please contact us at support@moneything.com if you have any questions or comments.

Moneything further states

Over the past few years there have been significant changes in the lending markets in the UK. The huge influx of institutional capital into the market has caused a reduction in lending rates, which is good for borrowers, but not for lenders.

The current economic uncertainty and likely future uncertainty means that there are less potential borrowers committing to projects and growth in borrowing is slowing. This means there is greater competition for borrowers and this places increased pressure on lenders to further reduce rates and perhaps to relax risk criteria or accept lower margins.

More recently the collapse of Lendy and then Funding Secure has had a big impact on lender confidence. Having spoken with a number of our lenders in recent weeks, it is clear that while the vast majority remain confident in MoneyThing as a platform, most also expect to reduce their investments across P2P or to continue to lend at a much lower level.

As a small, self-select P2P platform entirely funded by retail money, we cannot be certain that we can fund new loans with the current low level of lender confidence. As a result, it has become increasingly difficult for us to compete and we expect those market conditions to continue.

As such we have taken the decision to wind-down.

Moneything will continue to manage the existing loan book and aims to wind down the existing loan-book within 12 months.

 

International P2P Lending Volumes November 2019

The table lists the loan originations of p2p lending marketplaces for last month. Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 658 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.

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 volume november 2019
Table: P2P Lending Volumes in November 2019. Source: own research

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.

Links to the platforms listed in the table: Ablrate, Archover, Assetz Capital, Bondora, Bondster, Colectual, Credit.fr, Crowdproperty,  Dofinance, Estateguru, Fellow Finance, Finansowo, Finbee, Folk2Folk, Geldvoorelkaar, Growly, Grupeer, Investly, Iuvo Group, Kameo, Klear, Landbay, Landlordinvest, Lending Works, Linked Finance, Look&Fin, Mintos, MyTrippleA, Neofinance , October, Peerberry, Proplend, Ratesetter, Rebuilding Society, Savy, Smartika, Soisy, Sourced, Swaper, TFGcrowd, ThinCars, Twino, Viainvest, Viventor, Zopa.

Notice to p2p lending services not listed: Continue reading

Funding Societies Reaches Milestone of 1 Billion SGD in SME Lending

Funding Societies, an SME digital financing platform in Southeast Asia with presence in Singapore, Indonesia and Malaysia, Funding Societies has facilitated more than 1 million business loans to SMEs through a base of more than 150,000 individual and institutional investors in the last 4 years since inception in 2015. Funding Societies expanded its loan volume by 3 times in the last 12 month stating a default rate of 1.5%. Funding Society claims this to be the highest amount given out by any SME digital financing platform in Southeast Asia.

Funding societies founders Kelvin Teo and Reynold Wijaya
Funding Societies Founders Kelvin Teo and Reynold Wijaya

The growth in SME loans with Funding Societies is reflective of the increasing openness amongst businesses towards new generation funding options. As per the EY, UOB and Dun and Bradstreet report ‘Asean SMEs – Are you transforming for the future’, 67.8% of the SMEs are now open to non-traditional lenders including lending platforms. Alternative financing providers like Funding Societies are addressing this segment by providing technology backed funding solutions for the growth of local businesses.

Read an interview P2P-Banking conducted with the founders 4 years ago.

Kelvin Teo, Co-Founder and Group CEO of Funding Societies, commented, ‘What SMEs need is not subprime banking, but a different banking. We’re honored to have partnered with many SMEs in their growth journey. It hasn’t been easy, as SME financing is a patient business. We hope to work even closer with SMEs in 2020, in line with our belief of ‘stronger SMEs, stronger societies’ since 2015.’

Funding Societies specialises in all forms of short-term unsecured financing up to 2 million SGD, with funds disbursed as early as the next day. Funding Societies’ SME clients ranges from micro businesses and SMEs to small listed companies looking for working capital financing. For platform investors, the minimum amount is low starting from 20 SGD per investment. Other than individuals Funding Societies also has regulated financial institutions and funds who invest into loans on the platform.

Funding Societies is backed by Sequoia India and Softbank Ventures Asia Corp.

International P2P Lending Volumes October 2019

The table lists the loan originations of p2p lending marketplaces for last month. Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 703 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 Kameo and TFGcrowd. Fundingsecure was removed due to insolvency.

Milestones in cumulative volume lent crossed this month:

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 october 2019
Table: P2P Lending Volumes in October 2019. Source: own research

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.

Links to the platforms listed in the table: Ablrate, Archover, Assetz Capital, Bitbond, Bondora, Bondster, Colectual, Credit.fr, Crowdproperty, Debitum Network, Dofinance, Estateguru, Fellow Finance, Finansowo, Finbee, Folk2Folk, Geldvoorelkaar, Growly, Grupeer, Investly, Iuvo Group, Kameo, Klear, Landbay, Landlordinvest, Lending Works, Linked Finance, Look&Fin, Mintos, MyTrippleA, Neofinance ,October, Peerberry, Proplend, Ratesetter, Rebuilding Society, Savy, Smartika, Soisy, Sourced, Swaper, TFGcrowd, ThinCars, Twino, Viainvest, Viventor, Zopa.

Notice to p2p lending services not listed: Continue reading