RateSetter Australia’s 1st birthday

It’s our first birthday! RateSetter launched in Australia one year ago. It’s been a hugely exciting first year, and we’re pretty pleased with what we’ve been able to do in just 12 short months. To celebrate, we thought we’d share some of the highlights of our first year.

Birthday cake

The first peer-to-peer lender for all Australians

RateSetter is the first – and still the only – peer-to-peer (P2P) platform in Australia to allow everyday Australians to invest directly in consumer loans. We worked with ASIC for over two years to obtain the relevant licences, and to ensure the right protections are in place for our investors. Whilst this was a long journey, we consider the regulations that we now operate under set the gold standard for P2P lending globally.

A better deal for borrowers

RateSetter has helped Australians buy new cars, renovate their homes, get engaged, get married, go on honeymoons and send their mothers away (on holidays).

Our low rate personal loans have consistently beaten those offered by the big four banks. A three-year unsecured personal loan from RateSetter currently starts from just 8.1% (9.96% comparison rate*) compared with the average unsecured personal loan comparison rate from the big four of 17.28%†.

In recognition of our low rates and innovative loan product, Canstar has awarded RateSetter their coveted ‘5-star’ rating for ‘Outstanding Value’ – the first and only P2P lender to have received this award.

Attractive returns for lenders

All of our lenders, from our smallest first-time investors all the way through to our largest SMSF investors have enjoyed attractive returns on their RateSetter portfolios. In the last 12 months, we have facilitated more than $15 million in loans and returned more than $320,000 in interest to lenders.

Simpler and safer P2P lending

The RateSetter group was the first globally to introduce the concept of a ‘Provision Fund’ to help protect investors from borrower late payments or default, helping to make P2P lending simpler and safer. The RateSetter Australia Provision Fund currently holds over $750,000 and has ensured that every lender has received every cent of interest and principal due. Of course, the growth of the Provision Fund has been assisted by the fact we have not had a single default from the over 900 borrowers who have obtained a loan from RateSetter.

Earlier this year we also introduced secured personal loans – a first for P2P lending in Australia – helping to give borrowers seeking a low-interest car loan and providing additional assurance to lenders by facilitating loans that are backed by an asset that may be recovered should the need arise.

Comprehensive credit data

In July, RateSetter became the first Australian lender to fully implement Comprehensive Credit Reporting (CCR) data sharing through leading credit reporting body Veda. We see CCR as a game-changer for Australian consumers, helping boost competition between lenders and facilitating innovation such as true ‘risk-based pricing’ to give consumers a better deal.

Loan book release

In October, we publicly released our loan book. The loan book contains information about every loan originated through RateSetter since our launch up until 11 September 2015, when we passed $10 million in loans funded. Open data allows lenders and borrowers to make informed decisions and helps to ensure that we are accountable for the quality of loans we facilitate.

Partnerships with carsales.com and Stratton

In March we announced that Carsales.com and Stratton Finance (50.1% owned by carsales.com) together acquired a 20% equity stake in our company.

Through our partnership with Statton and relationship with carsales.com, we’re helping to offer a far better deal to creditworthy borrowers looking for a car loan, who are otherwise overlooked by more traditional lenders.

The future

Our first year saw our team grow from just a handful to over 25, but we’re not done yet – RateSetter has lots of exciting new developments in the pipeline and we’re looking for smart, creative people (especially in credit underwriting, customer service and business development) to join us. To our lenders and borrowers, thank you for your support. As always, please continue to let us know your thoughts.

Here’s to another great year. Onwards and upwards.

* Based on a fixed-rate, $10,000, 3-year unsecured loan
† Average of ANZ, CBA, NAB and WBC unsecured personal loan rates, based on a fixed rate, $10,000, 3-year unsecured personal loan. Data as at 9.30 am 11 November 2015.

Important notice: This post is accurate as at 13 November 2015

This information does not constitute financial advice and you should consider whether it is appropriate to your circumstances before you act in reliance on it. Any opinions, forecasts or recommendations reflect the judgement and assumptions of RateSetter as at the date of publication and may later change without notice.