It was announced late in the evening on 24/05/2019 that the P2P lending platform Lendy Ltd has entered voluntary administration. On a statement on the FCA’s website it has also been announced that the FCA themselves will run an inquiry it what caused the collapse of Lendy Ltd. The administration covers the three core companies of the Lendy platform: Lendy Ltd, Lendy Provision Reserve Ltd and Saving Stream Security Ltd. There are at least three other companies associated with the director of Lendy that are not covered by the administration.
Many Lendy investors will see this administration as a realisation of the inevitable. Lendy has been in serious trouble for over 12 months, following a catalog of incoptenacies and miss truths it had all but destroyed confidence and support from its core lender base. This resulted in the secondary market place grinding to a halt, effectively locking in investors to loans. On the 11/03/2019 it was publicised that Lendy had been put on the ‘FCA’s Special Watchlist’ since January 2019 as concerns were growing about its ability to meet the minimum regulatory standards. Then on the 23/04/2019 Lendy notified lenders via it’s platform that it was experiencing banking issues, shortly after the FCA announced it was imposing further restrictions on Lendy’s operations. Lendy consistently claimed the banking issues were a technical issue and it was being resolved, however many lenders who are aware of how Lendy operates and the little regard it has towards it’s lenders, possessed the capacity to assume that these too events were inextricably linked, regardless of what Lendy claimed.
Other issues with the Lendy platform included, wildly over valued properties (which personally I hope will be looked into as part of the FCA inquiry). An almost total ineptitude/unwillingness/unpreparedness to handle and resolve problematic loans and recover securities. A seeming endless stream of monthly loan updates that in time proved to be irrelevant and non representative of the reality. A revolving door of staff appointments, particularly a number of high profile six figure appointments that seemed to last mere months. The threat of a direct legal action against the platform and all borrowers to the associated loans (that legal action has recently been thrown out of court, for being baseless).
For now the website remains live, I advise anybody who has not already done so to screenshot their loan holdings, account balance and download the Excel file while you still can.
Many Lenders have filled formal complaints to both Lendy and the FCA over the last 12 months so there is hope that the truth can be easily uncovered by the inquiry, however losses should be expected. On a personal note I am very fortunate that I have not lent new money through the Lendy platform (as published in a previous post) for sometime so my exposure is minimal, but my heart goes out to those that are significantly exposed especially those that have pension size investments tied up in this administration. Even worse are those lenders tied up in the Collateral UK fiasco too, (for I am too). This is the second sizable P2P platform failure in 12 months, Collateral UK circa £20 mil loan book, Lendy circa £200 mil loan book value. I have no doubt that this latest P2P platform collapse will force the wider P2P industry and the regulator to look in the mirror once again and ask what is going so wrong for this to keep happening.