RateSetter passes $200m

by Ben Milsom

This week we passed through $200 million of loans matched between investors and borrowers. While we are always delighted to pass a significant lending milestone, it’s worth noting that this represents more than just a round number – every million funded provides further evidence that we’re gaining traction in Australia and successfully providing a structural alternative to the bank model. That’s something we think is worth celebrating.

Loan growth

After launching in 2014, it took 20 months of hard work to fund the first $50 million in loans.The most recent $50 million funded, however, took just four months. By monthly loan volumes, we’re now the largest peer-to-peer lender in Australia.

Cumulative value of loans funded
Cumulative value of loans funded

This is a growth curve our team is proud of, and you don’t need to look far into the future to see that it shouldn’t be long before we are funding over $50 million each month! To put that in perspective, that would make us one of the top 5 largest personal loan providers in Australia, by monthly volumes.

Investor returns

To date we’ve had over 9,000 investors register to lend on our platform. These investors represent a diverse range of people from millennials just starting to build an investment portfolio right through to retirees looking to invest their SMSF nest egg. Although our investors come from a variety life stages, we believe they’re attracted to RateSetter for similar reasons – to earn a strong, stable return by access an attractive asset class which is no longer the exclusive domain of our large banks.

Together our investors have earned over $10m in interest. Importantly, thanks to our considered approach to credit risk and our Provision Fund, every investor has received every amount of principal and interest due to them.

Investment diversification

In addition to the protection afforded by our Provision Fund, the typical RateSetter investor is now benefiting from strong diversification across borrowers during the normal course of lending and re-investment. On average, an investor that has been on the platform for over 12 months is matched to over 110 loans. 

Altogether, there have been over half a million matches on RateSetter’s lending markets, with an average match amount of ~$384. This means that the average RateSetter loan is funded by over over 25 investors!

Credit and Provision Fund performance

While we’re growing strongly, we have not compromised the credit performance of our loan book. Our loss rate remains below 1% of loans funded, and the actual loss for each annual cohort of loans is, to date, below the level indicated to investors on our statistics page.

In addition, our Provision Fund has has now grown to over $6.8 million, representing over 5.6% of our loan book and over 170% of expected future losses on current loan book.

Thanks to our team and supporters

Reaching this milestone has been made possible through the dedication of our team of over 60 talented and hardworking staff and directors.

Plus, we’ve only been able to reach this milestone thanks to the support of our customers – both investors and borrowers – who have been willing to step away from traditional incumbents and try something new.

So we extend our sincere thanks to all of our supporters as we take this time to reflect on reaching this significant $200 million milestone and we look forward to the next $100m and beyond! 

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The information contained in the RateSetter blog does not constitute financial product advice and has been prepared as general information only without consideration for your particular investment objectives, financial circumstances or particular needs. As with all investments, before you decide to invest you should familiarise yourself with the key investment risks and read the Product Disclosure Statement.

No responsibility or liability is accepted by RateSetter or its related entities for any errors or omissions or misstatements however caused or arising. Any opinions, forecasts or recommendations reflect the judgment and assumptions of RateSetter and its representatives on the basis of information at the date of publication and may later change without notice.

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