Harmoney

[leesal]

Worked out the net impact on my current portfolio. My current weighted average interest rate on loans is 20%... superimposing new interestrates on revised dashboard it will be 17%

As per coolbear comments above, default rates unlikely to have changed in the last 2 years... that 3% reduction just a full hit to investor return.

I wonder how the insto's feel about the drastically reduced income with practically no change to the underlying risk?

[Saamee]

Worked out the net impact on my current portfolio. My current weighted average interest rate on loans is 20%... superimposing new interestrates on revised dashboard it will be 17%

As per coolbear comments above, default rates unlikely to have changed in the last 2 years... that 3% reduction just a full hit to investor return.

I wonder how the insto's feel about the drastically reduced income with practically no change to the underlying risk?

Inevesting Interest Rates have gone down across the board, everywhere you look.... Why would P2P be any different?

If they get no customers becuase their % Rates are too high - Investors would not be happy either!!

[leesal]

Inevesting Interest Rates have gone down across the board, everywhere you look.... Why would P2P be any different?

If they get no customers becuase their % Rates are too high - Investors would not be happy either!!

Do you not feel that consumer finance in the unsecured space has a degree of inelasticity of demand?

Recall Myles mentioning Gem charging AER of 49%; and the unregulated loan shark shops continue to be a problem. OCR hasn't fallen off a cliff, its reduced by 0.75% in 3 years.

Intrigued what prompted harmoney to go this hard in their reduction. If they are supposedly making "no money" off loan applications; and investing their own money into the platform? Maybe the insto's are happy with 7% RAR instead of 10%, wonder how they'll like it when the market tanks.

[Toukshare]

Worked out the net impact on my current portfolio. My current weighted average interest rate on loans is 20%... superimposing new interestrates on revised dashboard it will be 17%

As per coolbear comments above, default rates unlikely to have changed in the last 2 years... that 3% reduction just a full hit to investor return.

I wonder how the insto's feel about the drastically reduced income with practically no change to the underlying risk?

I agree - I was aiming for a weighted average lending rate of around 20%, which put me at a C2 "centerpoint". I will now have to get down to a D5 (!) centerpoint, which obviously carries a lot more defaults risk. I too think the reduction in rates are drastic. Down 5% in some grades is not fine-tuning, it's a complete change of tack.

[RMJH]

I agree - I was aiming for a weighted average lending rate of around 20%, which put me at a C2 "centerpoint". I will now have to get down to a D5 (!) centerpoint, which obviously carries a lot more defaults risk. I too think the reduction in rates are drastic. Down 5% in some grades is not fine-tuning, it's a complete change of tack.

Sorry I doubted your numbers, it just seemed way too radical! Agree this is a dramatic repricing of risk. The base rate component of these loans is practically immaterial on the higher grades.