LendInvest Pushes for Increased Sector Transparency

By AltFi on 6th November 2014

P2P/Marketplace Lending

LendInvest has taken some major strides towards improving transparency within the peer-to-peer sector.

LendInvest Pushes for Increased Sector Transparency

The world’s leading property lending platform has funded over £170 million of loans since launching in May last year. A significant portion of that amount is comprised of loans that were originally underwritten by LendInvest’s “incubator” Montello Capital – with which the platform recently merged. Now LendInvest will pace the same path as Funding Circle, Lending Club and Prosper before them – publishing its loan book for all the world to peruse.

 Christian Faes, CEO of LendInvest, explained:

"One of the fundamental principals of peer-to-peer, and marketplace lending, is transparency. However, amongst all of the hype around the potential of P2P, many platforms have gone back to the old ways of finance - and there is very little transparency about what many of the P2P platforms actually do, and what an investor on the platform is investing in.

Increasingly is seems that P2P platforms are abusing the light regulatory regime for P2P, to run what are in essence black boxes, or funds with no transparency.

At LendInvest we want to adhere to the principals of new finance, and as such, we endeavour to provide as much transparency as possible. This move to publish our whole loan book, is a step towards this goal."

Sam Griffiths, MD at AltFi Data, welcomed LendInvest’s move:

“Transparency is a key factor in increasing trust and spurring growth in this nascent industry. LendInvest should be applauded for making more information available to investors and hopefully we will continue to see platforms providing more and more information about their performance, enabling investors to make increasingly enlightened investment decisions.”

So what can we learn from the information that LendInvest is now publishing? AltFi Data has drawn out a few noteworthy points:

  • LendInvest’s retail:institutional split is 64:36. -‘Retail’ customers have funded over £107m loan volume through the platform through 171 loans.
  • The mean LTV across the book is 57% with the retail investor enjoying slightly better security (55%) than the institutional investor (62%). The maximum LTV is 75%.
  • The vast majority of property financed by retail investors is in the South East of England with 59% having a London postcode (see interactive map below for the full picture).

It would have been nice to also gain an insight into the interest rates and the status of the platform's various loans, thereby enabling a fuller quantitative analysis to be conducted (although LendInvest has a 0% loss rate to date). But the available information sheds a great deal of light into the investment mix that LendInvest users can expect. It’s a massive step in the right direction - and one which we hope will prompt a number of UK platforms to follow suit.

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