RateSetter passes $250m milestone

In April we passed the significant milestones of 10,000 investors and $250 million in loans, with the number of registered investors doubling in the prior 12 months.

Recent research amongst our investor base has found that long-term customers of the Big Four Banks, Australian mums and dads, are diverting millions of dollars away from traditional investment options into P2P investing*. The research found that 61% had withdrawn money from high-interest savings accounts and 28% had withdrawn funds from term deposits to invest in P2P lending, with the amount invested by its Gen X investors increasing by 14% over the last 12 months and the average investment now sitting at close to $40,000**.

More money in your pocket

Commenting on this Daniel Foggo, CEO of RateSetter Australia said, “In the current climate, Australian consumers are looking for alternatives. Our rapid growth is proof that people, looking to earn investment returns or borrow money, are realising P2P lending can help put more money in their pocket.”

Table 1: Average amounts invested and matched rate***

SegmentAverage investment amountAveage interest rate after fees (p.a.)
Millennial$9,451.847.04%
Gen X (post-millennial)$37,266.647.40%
Pre-retirement$65,791.307.28%
Retirees$66,625.027.38%

Based on an analysis of our data, millennials make up the greatest number of registered investors at just over 6,000 and are most likely to be focused on the shorter-term lending markets. The one-month market has proven very popular, with 27% of millennials looking to this market for a short-term investment.

Gen X snap up green investments

The average rate received by investors in the one-month market over the last three months was 3.2% p.a. while investors in the one and three-year markets were matched at an average of 4.0% p.a. and 7.6% p.a. respectively over the same period. Gen X has also taken up RateSetter’s green loan marketplace in higher numbers than any other demographic since its launch in 2017.

Table 2: Where investors are withdrawing funds to make P2P investments

Bank savings accounts61%
Bank term deposits28%
Domestic equities15%
Residential or commercial property11%
ETFs6%
Corporate bonds or bank hybrid4%
Managed funds4%
International equities2%

The $250 milestone caps off a highly active 12 months for RateSetter. In June, we established a $20 million green loan funding partnership with the Government’s Clean Energy Finance Corporation; in September completed a $10.5 million fundraising led by leading private equity investor 5V Capital, and in December appointed former ING Direct CEO Vaughn Richtor as Chair of the board.

An investment in the RateSetter Lending Platform is not equivalent to an investment in a bank account. Most notably, it is not covered by the Financial Claims Scheme. As always, you should read our Product Disclosure Statement before investing in the RateSetter Lending Platform.

* Research based on December 2017 survey of RateSetter lenders
** The average amount invested by Gen X investors with RateSetter is $37,267.
*** Average amounts invested and average matched rates based on active investors are currently or have previously had funds matched to borrowers through the RateSetter Lending Platform
# Lender rates are displayed on an annualised basis and net of applicable fees. Lender rates assume payments received are continually reinvested at the stated rate and assume the investment is protected by the Provision Fund in the event of any borrower late payment or default, however, there is no guarantee nor warranty as to any protection from the Provision Fund. See our Product Disclosure Statement for further details.

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.

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