Peer-to-peer platform Assetz Capital has seen “minimal” new loan defaults so far this year, while investor returns are expected to meet their targets, the platform has revealed.
In a monthly update to lenders, Assetz Capital’s chief executive Stuart Law (pictured) said that over the course of June, the platform saw a “further and final substantial catch up in borrower payments that had become overdue as a result of Covid-19.”
As a result, investors who hold a manual lending account will have seen “bumper interest payments” last month, while access account holders will receive their full advertised target interest rates by today (1 July).
Investors in the quick access account can expect to receive 3.75 per cent per annum, while investors in the 30-day and 90-day access accounts can expect four per cent and 4.10 per cent, respectively, starting from of 1 September 2020. The 90-day access account will continue to pay its previous target of 5.75 per cent throughout the months of July and August.
However, Law cautioned that “the catch-up payments will not be repeated so the achievement of these rates this month should not be seen as indicative of what is achievable in the months ahead.”
“We hope that as most of our remaining borrowers return to work, we’ll see a continued reduction in in those requiring loan payment forbearance and/or loan extensions,” said Law.
“Thanks to the resilience of our borrowers as well as the substantial government financial support for businesses and their staff, we have seen minimal new loan defaults so far this year. Even with the substantial property-backed security that we hold on loans, there is nevertheless always a risk of some loan losses and so the strength in the loan book so far this year is encouraging.”
He added: “We continue to run our business with an objective of seeing positive investor returns over the coming year, even net of any losses through defaults. Delivering above average net returns for our investors through the entire economic cycle, decade to decade, remains our key business objective.”
The lender update also confirmed that Assetz Capital has begun the testing phase for its upcoming Access Accounts Marketplace.
This marketplace will allow access account holders to make faster withdrawals by setting a discount on the loans that they wish to sell.
“We aren’t anticipating high discounts to be required to accelerate withdrawals,” said Law. “But the marketplace will find its own level as all trading of loan holdings will be set by investors rather than ourselves.”
More information on the Access Accounts Marketplace is expected within the next few weeks, with a view towards launching it before the end of July.