LendingCrowd attributes drop in new loans to government loan schemes

LendingCrowd has said that government emergency loan schemes have played a part in a decline in new borrowers on its platform during the Covid-19 pandemic.

The peer-to-peer business lender said the fall in new lending opportunities was expected and waas driven by the launch of both the bounce back loan scheme and the coronavirus business interruption loan scheme.

It also attributed the decrease in new loans to the tightening of its credit policy around sectors that were especially affected by the impact of the pandemic. LendingCrowd added that it is continuing to monitor this closely.

Read more: Returns on offer for P2P investors during Covid-19: Part 2

After announcing on 6 April that it will start offering payment holidays to struggling borrowers, LendingCrowd gave more details of the process.

All requests for a repayment holiday, lasting a maximum of three months, have been assessed on a case-by-case basis by the platform’s credit team. Borrowers have not been charged any fees for implementing a repayment holiday.

“We have also waived our fees around changing repayment dates to help businesses better plan their cashflow requirements,” LendingCrowd added in a blog post on its website.

Read more: The quandary facing P2P lenders and borrower payment holidays

In March, LendingCrowd deactivated the auto-investment feature in its Growth and Income accounts, which automatically uses repayments to purchase additional loan parts.

With auto-investment switched off, Growth and Income account holders will see cash building up in their accounts. Investors can reactivate this in their settings on the platform.

It also switched off the autobid feature in its self-select accounts.

LendingCrowd said these changes would give investors the opportunity to consider how they want to manage their funds.