Managing risk and the Provision Fund
Managing risk
We do the heavy lifting to protect your investment
We only lend to creditworthy borrowers
Every borrower must pass our comprehensive credit screening processes when applying for a personal loan, car loan or renewable energy loan. Our in-house credit team uses a combination of innovative technologies and traditional resources (such as credit bureau information) to assess each borrower’s credit risk.
We handle the credit analysis so you can be confident that your funds are being matched to creditworthy borrowers.
The Provision Fund may help protect your investment
While we only match investor funds with loans to creditworthy borrowers, we appreciate that in some circumstances borrowers may be unable to repay their loans. That’s why we set up the Provision Fund, a pool of funds held in cash by a separate trustee, designed to protect investors in the event a borrower misses a payment or defaults.
How it works
The Provision Fund is designed to reduce the risks of consumer lending
The Provision Fund has ensured that no investor has ever lost a cent of principal or interest.*
All borrowers pay an amount into the Provision Fund
This amount is determined by the borrower’s risk profile, the loan amount and the loan term. A greater risk requires a higher contribution.
The Provision Fund can reimburse investors to protect against loss.
Plenti may make a claim on behalf of the investor where a loss is incurred due to a borrower late payment or default.
Provision Fund coverage
When does the Provision Fund protect investors returns?
The Provision Fund will ordinarily protect investors from any loss when the interest coverage ratio is greater than 100%.
206% Provision Fund coverage ratio
The Provision Fund holds cash and also receives regular inflows from some existing borrower loans. In determining the Provision Fund coverage ratio, we measure the Provision Fund buffer against expected future losses on loans outstanding. When the coverage ratio is above 100%, we expect the Provision Fund to cover all borrower late payments and defaults.
Note: Data as at 30 September 2021. See below for definitions of key terms
Investment risks
What are the risks associated with investing with Plenti?
As with every investment, investing with Plenti is not without risk.