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RateSetter provision fund
RateSetter has provided a positive statement about their provision fund which is used to repay lenders where the borrower defaults. RateSetter currently has the lowest default rate of any comparable peer-to-peer provider and with the added protection of the provision fund, no lender has lost any money due to defaults.
Here is their statement in full:
The Provision Fund has grown steadily over the last year which is testimony to the work of the RateSetter credit team and good news for our lenders. We have decided that it would be premature to declare a Surplus because we do not think the Fund is excessively capitalised and because at this relatively early stage of a growing loan book we feel it would be wrong to deplete the Fund. The Fund has so far met every claim and we will always act prudently to keep up this record and increase the level of protection for RateSetter lenders.
Also, we have incorporated a company, RateSetter Trustee Services Limited, to act as the trustee for the Provision Fund. The previous trustee was RateSetter Trustee Limited. We have updated the Terms and Conditions to reflect this. This change has no impact on how the Fund works.
The Ratesetters website offers no link (that I could find) to this independant Trust which holds this provisional fund. The details offered seem sparse
Surely the Ratesetter site needs to offer a link to this trust, so we can see the trust's objects or articles? Ratesetter's site (or a link to the Trust) needs to show who the trustees are and show their independent to the Ratesetter business.
The trustees running this trust on behalf of the lenders need to publish a regular independent report about how well the trust is funded and performing, compared to the Trust's objectives?
Where is the link on the Ratesetters site to the annual accounts of this trust. Do Ratesetter or the provisional fund finance its operation?
If the cash in this fund and the trust that holds & manages it has been transferred to a new trust within just a couple of years of operation. Shouldn't this press release mention why and the lenders be told?
(I continue to lend via Ratesetters, I'm questioning the lack of full, transparent information on their website, rather than their operations)