Peer-to-peer lending platform Crowd2Fund has tightened its credit policy and introduced enhanced checks and a revised pricing model.
In a blog on the company’s website, Crowd2Fund said that it recently completed an independent loan book audit, reviewing every loan that has gone into default or has been written off since the platform launched in 2014.
“Although as a start-up there were some improvements highlighted from early loan approvals and our credit policy, with no systemic issues found that would have changed our decision to list any of these loans,” Crowd2Fund said.
“However, hindsight is very useful and there are many learnings that have been taken very seriously and changes implemented as a result. The performance of our credit methodology is reflected across our loan book with positive earnings, as of today – even despite Covid-19.”
The platform revealed that it has introduced a number of enhanced checks, such as a Covid-19 questionnaire for businesses who’d like to list on Crowd2Fund, and an assessment of a business’ exposure to Brexit.
All loans will be reviewed twice from now on, first by Crowd2Fund and then by an independent underwriter. All loans will also be reviewed by an independent compliance auditor in real-time before being listed on the platform.
The lender has also reviewed its loan pricing model for consistency, and the Crowd2Fund Exchange has been enhanced with the introduction of an automatically-generated floor and ceiling price set by the platform.
“We’re proud of our improved credit methodologies and processes and, although some losses are inevitable, we strive to keep these to a minimum,” said Crowd2Fund.
“As ever, diversification is key to building a balanced investment portfolio on Crowd2Fund. Our improved crowdfunding tool, ‘The Exchange’, will also help you achieve this balance when it reopens very soon.”