CROWD2FUND will launch a contingency fund for investors in the second quarter of 2019, as part of a series of new features which will soon be rolled out by the peer-to-peer lending platform.
The contingency fund will allow Crowd2Fund’s investors to share their losses, Chris Hancock, chief executive of Crowd2Fund, told Peer2Peer Finance News. Investors can opt in to the fund, which will reduce the overall value of the defaults in their portfolios. However, it will also mean that they receive a lower annual interest rate on their loans.
“It’s very simple,” said Hancock. “Everybody who wants to opt in will pay a certain amount and that will cover the forecasted losses for a 12-month period.”
Hancock also revealed that the platform will be improving its automated systems to ensure that credit risk and due diligence is consistent, which will allow the firm to list more opportunities for its investors.
This will involve increasing transparency around its recoveries process and allowing the platform’s lenders to take a more active role in how they manage defaulted payments.
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“One very exciting area that we believe is ripe for disruption, improvement and innovation is the recoveries area of fintech generally,” said Hancock.
“We’re going to be delivering a lot of features of the recovery side of the business which will include things like the ability to vote on whether to go into bankruptcy proceedings and to gamify the recoveries process.
“This will really bring the investors into the recoveries process and gives them the control and influence to be a part of that recoveries process.”
This article originally appeared in the January print edition of Peer2Peer Finance News. You can read the full issue here.
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