RateSetter Cuts Interest Rate Payouts to Save for Bad Debts

UK based p2p lending platform RateSetter has halved their interest rate payout to investors so they can add the savings to the provision fund; RateSetter’s provision fund will now cover 5.4 percent of their loan book, a 58 percent increase as they expect bad debt to rise; Rhydian Lewis, CEO of RateSetter, said to the FT: “We have not seen an increase in bad debt yet, but what we have seen is an increase in people requesting payment holidays.”; the company originated £10mn in loans in April, down from an expected £40mn; “Consumers are being cautious,” Mr Lewis said to the FT. “A lot of consumer loans were for considerable purchases, home improvements and cars. These purchases are being deferred so it is natural that these loans are being deferred.” Financial Times

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