Rebuildingsociety are toying with the notion of starting a contingency fund, following the lead of Zopa and Ratesetter.
The peer-to-business lending platform identified the provision fund as an especially important aspect of the FCA consultation paper – which was circulated in October. Rebuildingsociety already screen to check borrowers’ creditworthiness, and take security wherever possible, but appear keen to establish a provision fund. They are now trying to gauge users’ opinions about the matter through a member consultation survey.
Zopa’s contingency plan – “Safeguard” – was enforced in April of this year. Zopa has since lent more money than ever before, and the fund has swollen to over £1 million already, but it has not met with universal praise. The Safeguard system means lenders can no longer set their own interest rates – which are instead decided by Zopa. Some users have since complained about this loss of autonomy, and of reduced returns. Perhaps this factors into Rebuildingsociety’s decision to proceed with caution.