Exclusive: Kuflink opens up loan investments with 20% loss guarantee

By Emily Nicolle on 27th April 2018

P2P/Marketplace Lending

The platform has said it's seen zero losses to date, as it unveils some changes to its peer-to-peer investing regime.

Exclusive: Kuflink opens up loan investments with 20% loss guaranteeImage source: Thomas Lefebvre

Announced today in a statement seen by AltFi, peer-to-peer property investment platform Kuflink has announced that 100 per cent of each of its loans will now be available for investment.

Previously, investors could only access 80 per cent of each loan on the platform, with Kuflink investing the remaining 20 per cent on a first-loss basis. Under today’s news, the platform’s 20 per cent investment has now been replaced with a first loss guarantee, covering up to 20 per cent of the total loan amount in the event of a loan loss before investors would be affected.

Since launching in 2016, lenders have invested more than £17m through Kuflink, posting zero losses to date. All Kuflink loans are backed by UK property up to a maximum loan value of 75 per cent, providing borrowers with quick access to short-term finance and investors competitive interest that beats typical savings and current account rates.

Narinder Khattoare, Kuflink’s CEO, commented: “We are very proud of our track record at Kuflink and have adapted our proposition to offer increased availability across our investment portfolio. 

“All our investment opportunities are UK property based and whilst we are no longer co-investing, we are still providing the same reassurance through our 20 percent first loss guarantee.”

However, some investors have not taken the changes to be an improvement on Kuflink’s previous first loss policy. Complaints have ranged from the supposed reliability of a new provision fund, the lack of a Kuflink stake in a loan affecting its quality, and the loss of the platform’s appealing USP. 

Khattoare responded to some of these comments: “Thank you for your patience whilst we reviewed your comments. We welcome your feedback and would like to thank you for your support and for being a part of Kuflink. Without our community of investors we wouldn’t be where we are today – one of the fastest growing property-backed P2P lenders in the UK.

“We are successful because we cater for our customers. As per investor demand we have replaced our 20% stake with a 20% first loss, providing increased availability to our investors. Kuflink is one of a handful of platforms that has zero investor losses. We are constantly investing further into our infrastructure to stay ahead of the curve.”

*This article was updated to reflect the sentiment of investors responding to the announcement, and Khattoare's follow-up comment.

 

Comments

SteveH

30 Apr 2018 11:28am

Good God. What were you doing when you wrote this? Try again. Kuflink have ABANDONED their 20% first loss co-investment promise and have instead introduced a protection fund. Judging by the reaction on the p2pif investors are disappointed

Stuart Bowen

30 Apr 2018 07:02am

"..a first loss guarantee, covering up to 20 per cent of the total loan amount in the event of a loan loss before investors would be affected." This is not what the words issued said and the company has failed to clarify points raised by investors. No written details of how the provision fund "guarantee" would operate have been given by the firm. Using the words given in the email to investors as a guide the company leaves itself open to litigation but will not listen to suggestions to change things but, instead, persisting in the erroneous spin that the same loss amount will still be covered. Until Kufflink state the level of provision they will pre load and the mechanisms by which layouts are triggered and calculated then current investors will be stopping investment and withdrawing money returned from investment. Kufflink is small enough to be able to replace investors money that leaves the platform and thus survive, until the "guarantee" is called upon by the inevitable unrecoverable loss. Maybe Kufflink will play the same game as funding secure and Lendy and just renew or avoid a loan going into bad debt figures that would trigger payment. The whole p2p edifice is built on shifting sands, Collateral case where FCA interpretations of the financial services act forced the company into administration, comments in the case summing up that makes questionable the basis for other platforms operation methods and authorisation categories. We are at a point where all platforms need to keep a close eye on the case as some legal testing will drive the future of p2p from many directions such as definitions within the fs act, the operating procedures for authorisation by the FCA where no feedback loops on a per document case are in place, the process for unbiased information flow in the event of the FCA "using their judgement" to decide a course of action against companies they think have transgressed. We are at a crossroads for peer to peer. Some may fall onto the wrong road. Some may find their way back to the crossroads once again whilst others will need to close or morph into other unregulated guises. The future will tell if the industry cleans itself up before the FCA Jack boots cause another collapse in the name of establishing the might of the state's authority.

AltFi London Summit 2019

The UK's oldest and best-loved conference for fintech and alternative finance insiders returns for its sixth iteration at etc.venues. We'll showcase the best of the UK's digital banking, online lending and digital wealth sectors through a series of uniquely in-depth discussions and presentations. Open Banking will be in full flight, just over a year on from its launch, and will be a central theme at the event.

18th March 2019