19-10-2018, 08:38 AM
This idea has virtually no chance of getting off the ground.
Consider the basic pricople of P2P:
Lender A lends money to Borrower B via Platform C who charge, without risk, for their service. A simple model that many platforms have done their utmost to complicate including the latest, laughable introduction of Blockchain technology by Ablrate. All of this within the ludicrous system of "light regulation" by the UK's financial regulator the FCA which, in practical terms means nothing unless the platform does not have it.
Underlying this system is a fundamental conflict of interest between party A and party C, despite claiming to be party A's agent the former has no risk so does not care about the quality of the loan because it gets paid, usually up front, irrespective of the covenant party B can provide, what's more those fees are initially paid by the lender and the borrower only pays them at the end when (if) it repays in the case of one platform nearly half it's loan book is six months or more overdue.
This system has provided funds into the billions of pounds, a significant proportion of that has been through platforms where the management are woefully underqualified and in many cases have lamentably failed in their duty of care in the supervision of loans.
My suggestion, which probably has zero chance of being accepted by he platforms, form a body of creditors with the necessary skills to periodically "audit" the loan book. Within the community of lenders there are people with the necessary skills, probably far superior to many of the platforms, surveyors, valuers, lawyers, accountants, insolvency practitioners etc. Call the body whatever you like, it should be funded by the platforms and a sample chosen by the body, not each and every loan.
Even if this gets put to the platforms and they refuse consider why? What have they got to lose? If they do refuse why should you continue to trust them with your money that pays their wages?
If it seems to you this is just a irrelevence and overkill and an unnecessary level of bureaucracy and expense just look at the level of not just bad, but awful, lending decisions the platforms have made and the amount of money lost by the lenders (very large) and the amount lost by the platforms (nil)
Consider the basic pricople of P2P:
Lender A lends money to Borrower B via Platform C who charge, without risk, for their service. A simple model that many platforms have done their utmost to complicate including the latest, laughable introduction of Blockchain technology by Ablrate. All of this within the ludicrous system of "light regulation" by the UK's financial regulator the FCA which, in practical terms means nothing unless the platform does not have it.
Underlying this system is a fundamental conflict of interest between party A and party C, despite claiming to be party A's agent the former has no risk so does not care about the quality of the loan because it gets paid, usually up front, irrespective of the covenant party B can provide, what's more those fees are initially paid by the lender and the borrower only pays them at the end when (if) it repays in the case of one platform nearly half it's loan book is six months or more overdue.
This system has provided funds into the billions of pounds, a significant proportion of that has been through platforms where the management are woefully underqualified and in many cases have lamentably failed in their duty of care in the supervision of loans.
My suggestion, which probably has zero chance of being accepted by he platforms, form a body of creditors with the necessary skills to periodically "audit" the loan book. Within the community of lenders there are people with the necessary skills, probably far superior to many of the platforms, surveyors, valuers, lawyers, accountants, insolvency practitioners etc. Call the body whatever you like, it should be funded by the platforms and a sample chosen by the body, not each and every loan.
Even if this gets put to the platforms and they refuse consider why? What have they got to lose? If they do refuse why should you continue to trust them with your money that pays their wages?
If it seems to you this is just a irrelevence and overkill and an unnecessary level of bureaucracy and expense just look at the level of not just bad, but awful, lending decisions the platforms have made and the amount of money lost by the lenders (very large) and the amount lost by the platforms (nil)
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