26-05-2019, 10:19 AM
Lendy was incorporated in 2012 and despite having a tiny share capital, £1 until some time in 2015, raised close to half a billion pounds of, mostly junk (in the financial definition i.e. to mostly very poor covenants) finance at derisory rates for those types of loans. What’s more a large proportion of the £47million it claims on its web site to have paid to lenders is, collectively, their own money and to add further salt into that particular wound when returning it Lendy converted it into income subject to tax.
It is my belief that the whole operation was a pyramid scheme, NOT a ponzi, in that most of those that made money were the early adopters who were able to sell original loan parts to newer members via a secondary market that for a time at least didn’t even require prior funding, but those later joiners were seduced by alleged returns of 1% per month, even lower when the popularity of the platform was at its height. As a comparison Thomas Cook bonds currently yield just under 50% pa and they are a publicly listed company, even the sovereign debt of Greece yielded 25% at one time and that was effectively backed by the European Central Bank. I do not subscribe to the conspiracy theories that people “pumped and dumped” the loans on forums and elsewhere but there are certainly a few that have greatly profited from the business model of the company.
Others who have followed the detail of Lendy much more closely will know the sums of money much better than me, but as I understand it there are 21 DFLs in some form of default and 5 still performing, and 33 PBLs not performing and 3 still live. Taking just a few of those DFLs together the gross sum outstanding is greater than the £47million of “interest” paid, although as the security has not been realised in most cases, that could prove to e a prematurely pessimistic comment.
In the same way as “all that glistens is not gold” not “all Lendy loans are turds, whether polished or not.” But unless people were extremely adept at selecting the loans from the often misleading, sometimes mistruths, particulars those that have held to term have not made a profit.
All this from a platform that claimed to be the “most profitable P2P platform in the universe” and claimed “its not the borrower its the security that matters”
It is my belief that the whole operation was a pyramid scheme, NOT a ponzi, in that most of those that made money were the early adopters who were able to sell original loan parts to newer members via a secondary market that for a time at least didn’t even require prior funding, but those later joiners were seduced by alleged returns of 1% per month, even lower when the popularity of the platform was at its height. As a comparison Thomas Cook bonds currently yield just under 50% pa and they are a publicly listed company, even the sovereign debt of Greece yielded 25% at one time and that was effectively backed by the European Central Bank. I do not subscribe to the conspiracy theories that people “pumped and dumped” the loans on forums and elsewhere but there are certainly a few that have greatly profited from the business model of the company.
Others who have followed the detail of Lendy much more closely will know the sums of money much better than me, but as I understand it there are 21 DFLs in some form of default and 5 still performing, and 33 PBLs not performing and 3 still live. Taking just a few of those DFLs together the gross sum outstanding is greater than the £47million of “interest” paid, although as the security has not been realised in most cases, that could prove to e a prematurely pessimistic comment.
In the same way as “all that glistens is not gold” not “all Lendy loans are turds, whether polished or not.” But unless people were extremely adept at selecting the loans from the often misleading, sometimes mistruths, particulars those that have held to term have not made a profit.
All this from a platform that claimed to be the “most profitable P2P platform in the universe” and claimed “its not the borrower its the security that matters”
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