Data valid as of 21st January
is the rebranded name of
YES-secure and was relaunched in 2012.
YES-secure is from the company that operates YES-pay.
It uses a listing style approach pioneered by Prosper
in the USA where borrowers can provide information
on the purpose of the loan along with their financial
information. Encash will group the borrower
by risk category from A* through to E. They
facilitate both personal and business loans.
Lenders are charged a 0.9% annual fee, and borrowers
are charged several fees, including an application
fee (unlike any other P2P provider). Lenders
are also able to sell their loans at more or less
than face value on a secondary market for a 1% one-off
Unique selling point
Encash allows lenders to invest in higher risk
markets unlike other P2P companies. As such
lenders are able to set their rates as high as 18%
AER. Encash also operate a social model of
connections between lenders and borrowers, however
it remains to be seen how this of benefit.
As Encash is operating in both peer-to-peer and
peer-to-business arena, and is the fifth largest
provider, but currently has less than 0.5% of the
total market. As well as competing with all
of the peer-lenders, YES-secure would be competing
with the high street banks, building societies and
as Encash isn't simply cosmetic, but there have
been improvements to the underwriting which
was clearly broken with YES-secure. Communication
has still been very patchy in terms of responsiveness
on the forums and replies to emails, with some
emails being ignored, and no replies to questions
raised on the forum.
There have not been any defaults of loans
originated under the Encash brand, but it is
far too soon to draw any conclusion. The
maximum lending rates in some markets are such
that higher rate taxpayers would be better off
leaving their money in the bank with the current
predicted bad debt estimates. These comments
should also be taken in conjunction with the
bad debt warning below.
In summary if you are prepared
to accept the higher risk of bad debt as a lender
and don't pay income tax, or are prepared to pay
the higher loan rates as a borrower, then Encash
could be for you.
Bad debt warning - bad debt can take months
to years to materialise, and therefore the actual
bad debt figure may not be fully representative,
especially when a company's loan book is growing
at a significant rate (for example for the first
two years Zopa bad debt was 0.05%)
Encash review written
Ian Gurney, last updated on 1st