Peer to peer lending platform LendingClub has recently stated that their average loan performance is ‘within expectations’.
The reassuring statement comes after last month’s presentation showed some loans arranged by the peer to peer lending company appearing to underperform.
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According to a blog post published by the company soon afterwards, a chart “was designed to highlight the routine process by which we identify credit segments that perform either above or below expectations, and inform next steps in terms of either adjusting credit policy or pricing.” It continued, “In this example, we highlighted two segments that were performing worse than expected and took the necessary steps to bring these segments back within expectations.”
It appears that the presentation shown was not clear enough. One slide included a chart showing write-off rates, for an amount of three and five year loans, as higher than expected, but the mistake came due to not giving numbers about the size of the segments, or describing the characteristics of the borrowers. LendingClub stocks fell 3 percent after the misinterpretation of the chart presented.
After this unfortunate mistake, many are now feeling apprehensive about LendingClub. But seeing as they’re one of the pioneers of marketplace lending, it’s fair to say that LendingClub will dust themselves off and be back on form in no time.