I have experienced a defaulted note on this platform. In this article, I am going to share how Capsphere handled the defaulted note.
Number of notes invested
Since its inception till 11 June 2021, Capsphere has hosted a total of 29 notes. I have invested in 25 of the notes and 1 has defaulted.
Process
According to its FAQ, when defaults occur, Capsphere will seize (take ownership of) the asset financed and resell the asset in secondary markets. Each investor will be repaid based on the pro-rated amount invested in the investment note.
For the defaulted note, the platform sent an email to me about a month after the issuer delayed payment. After another month, Capsphere informed me that it has recalled the note and recouped a just and fair portion of the principal investment and interest accrued. The interest was credited first while the principal was credited later upon deduction of costs.
Conclusion
Though this note is classified as Completed, instead of Defaulted, I am not sure if I have recouped my principal. When I checked the note details, the principal and interest outstanding are both zero. Nonetheless, the principal received is not the amount that I have invested. Upon checking the statements, I discovered that the recouped amount was less than invested amount due to the high assignment fee. Almost 90% of my capital was recouped but the assignment fee was about 15% of my capital. I feel that 90% recovery from a defaulted note is quite good for peer-to-peer lending. I only hope that the platform will show the amount recouped in an easy-to-see format.
This was how Capsphere handled its defaulted note. I think the process is prompt but the communication could be better. Hopefully it will get better as time goes by as I notice that the platform is continuously improving its interface.
