Harmoney

[Vagabond47]

Yep, if this continues i'll be setting up auto-withdraw.

[leesal]

I'd like to see an update on the funding mix graph.

as a cynical question (don't know either way) What would prevent HM from holding back certain loans, for exclusive wholesale consumption; and just channel a token amount through retail?

[RMJH]

I'd like to see an update on the funding mix graph.

as a cynical question (don't know either way) What would prevent HM from holding back certain loans, for exclusive wholesale consumption; and just channel a token amount through retail?

There used to be a policy of no cherry picking for wholesale investors. I can't find reference to it now though it could still be there somewhere....

[myles]

What would prevent HM from holding back certain loans, for exclusive wholesale consumption; and just channel a token amount through retail?

The agreement that they currently have with us as investors. Full detail in the following, but the most relevant portion quoted below.

Source: https://www.harmoney.co.nz/assets/Le...april-2018.pdf

Harmoney’s Loan Allocation Policy

Harmoney’s loan allocation policy is designed to allocate loans between the wholesale and retail investor marketplaces on a fair, reasonable and equitable basis to ensure that each marketplace receives a representation of the overall risk grade of Borrowers approved to submit their loan (Loan Allocation Policy).

Harmoney sets a loan allocation percentage for each marketplace. Harmoney does not select specific loans to be allocated to either marketplace. Harmoney may, from time to time where it receives high loan application volumes or a higher proportion of funds from wholesale or retail Investors, allocate a greater proportion of loans to be funded from either the Peer-to-Peer Service or Wholesale Funding Model. Harmoney’s Loan Allocation Policy seeks to ensure that over time there is a representative sample of loan applications available in each marketplace.

[Vagabond47]

As it says quite clearly there,

Harmoney may, from time to time .... allocate a greater proportion of loans to be funded from either the Peer-to-Peer Service or Wholesale Funding Model.

So they randomly select which loans go to which lender group to keep the risk profile spread fair, but the percentage can be dialed to 90% wholesale/institutional if they receive lots of wholesale funding (like harmoney themselves becoming wholesale investors?) Which we all agreed to with the new T&Cs a while back.

So this might be temporary while harmoney lends out all its spare capital. At about $1/2 million a day drop in p2p marketplace lending how much money is Harmoney putting in the market itself?

[leesal]

[QUOTE]Harmoney’s Loan Allocation Policy seeks to ensure that over time there is a representative sample of loan applications available in each marketplace.
[/QUOTE]Did I read that right?

Previously wholesale and retail drew from the same pool, at Approx 40 loans per day. Us retail investors autolended, selected the bits we wanted and the wholesalers took up the remainder.

Now the Wholesale pool is completely separated from the Retail pool. Each getting their own select allocation. Which explains why we only get 7-10 daily (and some loans hang around for longer).

Take that one step further, retail by design will achieve no better then platform. Currently 10%? Even worse, if loans are left on the table, we the retail pool gets dialled back even further. Would gladly be told I'm wrong!

[RMJH]

I think it is too soon to form any conclusions. Wholesale fees are, or at least were, higher and probably a lesser administrative burden so we are actually lucky to get access to this market at all. Will be interesting to see how Harmoney's lending returns get included in the RAR.

[leesal]

I think it is too soon to form any conclusions. Wholesale fees are, or at least were, higher and probably a lesser administrative burden so we are actually lucky to get access to this market at all. Will be interesting to see how Harmoney's lending returns get included in the RAR.

Harmoney accesses the wholesale market, which isn't part of P2P so wont get reflected on RAR.

Reading further Wholesalers get access to the wholesale market and P2P platform. So everything will continue much as it does, although the volume will be reduced potentially significantly depending on the allocation policy.

[myles]

Harmoney accesses the wholesale market, which isn't part of P2P so wont get reflected on RAR.

? They are just another wholesaler, all other wholesalers are shown in the platform RAR graph (which I think is what RMJH meant), so their 'lending returns' will be reflected in the wholesale RAR and platform RAR.

leesal, it sounds like you were originally suggesting something significant has changed in the platform in relation to how wholesale and retail loans are treated? I don't think anything has changed other then a new wholesaler (Harmoney) has joined the platform.

I've not seen any clear info on why loan rates have suddenly dropped, but speculate that Harmoney have dropped a bundle of $'s in and because of their high Funds Available to Outstanding Principle ratio, might be getting the lions share at the moment, however it's never been completely clear to me if the wholesale allocation is treated this way, so I could be wrong.

[leesal]

See Page 9 of the investor disclosure agreement (below). It suggests very clearly that the new wholesaler (Harmoney), invests on behalf of all wholesale investors, completely separate from P2P


Wholesale Investors
Harmoney uses two funding models in order to make loans to Borrowers. These are:
• the Peer-to-Peer Service, where Borrower loans are funded from investments byretail and wholesale investors through its peer-to peer marketplace; and
• a wholesale funding model, where Borrower loans are funded from investments bywholesale investors (Wholesale Funding Model).

Wholesale Investors under the Peer-to-Peer Service
Harmoney may approve wholesale Investors to invest in loans through the Harmoney Peerto-PeerService................

Wholesale Investors under the Wholesale Funding Model
Under the Wholesale Funding Model, loans are made by Harmoney Nominee Limited (theNominee), which acts as a bare trustee for all of the wholesale Investors who choose to fund Page 10Harmoney Disclosure Statement (2018)loans through the Nominee. The Wholesale Funding Model is not available for retail investorsand is separate and distinct from the Peer-to-Peer Service described in this DisclosureStatement.Loans are allocated for funding via funds sourced from the Wholesale Funding Model inaccordance with Harmoney’s Loan Allocation Policy described below. This means that acertain percentage of loans will be randomly allocated for funding from that source.