LendingCrowd has said its loan market will remain closed to lenders but this will be reviewed monthly.
In November, the peer-to-peer lending platform said that retail investors will not be able to fund new loans on its platform for the foreseeable future after focusing on channelling institutional funds through the coronavirus business interruption loan scheme (CBILS), which it gained accreditation for in July 2020.
Then in December, LendingCrowd paused new retail deposits and registrations on the platform as it focused on CBILS lending and in January suspended trading on its secondary loan market due to the prevailing economic conditions and low number of loans on the platform.
LendingCrowd said business borrowers on its platform continue to make repayments, which will accumulate in lenders’ accounts as cash but it will not be possible to reinvest these repayments while the secondary loan market is suspended.
The platform said at its credit committee’s most recent meeting, it was decided that its loan market will remain closed to individual lenders.
LendingCrowd said it continue to review this position on a monthly basis and will communicate updates to its lenders.
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The platform said that as cash held in the platform’s accounts does not earn interest until it is used to fund loans, lenders should consider transferring their money to an interest-bearing account with another financial institution at this time.
LendingCrowd said that there is a one per cent fee of the capital withdrawn from the growth account, growth ISA, income account and income ISA, which is only paid when a withdrawal is made, not when a loan is sold.
The platform highlighted that its objective always remains to take a cautious approach to obtaining fair outcomes for lenders.
“We want to avoid lenders becoming overly exposed to individual loans due to the lack of available lending opportunities on our secondary loan market,” LendingCrowd said in a blog on its website.
“Our decision to temporarily halt trading on our secondary loan market is in line with the Financial Conduct Authority’s principle of ‘treating customers fairly’.
“We continue to charge this fee as it relates directly to services incurred by lenders with respect to the collection and allocation of borrower repayments.
“Since the outbreak of the Covid-19 pandemic, the entire LendingCrowd team has focused on doing the right thing and supporting our lenders and borrowers.”