The Ashes of Peer to Peer Lending

A century and half old rivalry that continues to deliver.

Most of our lenders are aware that, although majority owned and managed locally, RateSetter in Australia is part of the RateSetter group – one of the world’s largest and most successful peer-to-peer lending groups.

We’re extremely proud of this association but, as every Australian sportsperson knows, a bit of friendly competition – spurred on by a century and a half of spirited sporting rivalry – can only be healthy. So we’d like to take a quick drinks-break to compare the scorecard with RateSetter in the UK.

Everyone can be a winner

RateSetter in Australia officially launched at the end of 2014, four years after RateSetter opened its doors to customers in the UK. We’ve now assembled a capable team of proven all-rounders with the requisite skill, stamina and game plan for strong performance and, tellingly, have achieved very similar milestones to those RateSetter in the UK chalked up in its first two years at the crease. Though perhaps with a bit more pace off the antipodean wicket.

Importantly, in Australia, we’ve attracted some fantastically supportive fans early on. Fans who’ve decided they like what we offer, and have found that tuning in regularly can have its rewards. What a marvellous setup for a thrilling competition – one in which everyone can be a winner. Even Graham Gooch.

We know our fans in Australia enjoy the attractive rates that come with investing in peer-to-peer lending. Few of them probably know, however, that our rates are substantially higher than those available to lenders in the UK – our 5-year market rate is almost double the UK rate1. Whether this is a win for Australia depends on your perspective.

Who’s close to lending nirvana?

Lenders in Australia might credibly argue they’re ahead. But in the five-day game one shouldn’t be complacent early on. RateSetter in the UK is arguably closer to achieving the peer-to-peer lending nirvana: a virtuous circle of low rates attracts the best borrowers, which supports consistent opportunities for lenders to earn attractive returns.

If history is anything to go by, we should expect rates in Australia to reduce over time as we extend our track record. A convergence of the ‘worm’, you might say.


Number of lenders4,50045,000
Average amount invested$12,300 £18,000 (~$30,000)

In the UK, RateSetter has brought together a strong community of lenders over 45,000 strong, and collectively they have earned over £50 million in interest.

It’s still early days for RateSetter in Australia in terms of number of lenders, and on average they have invested around one third the amount of money, but we’ve built strong foundations: we were the first peer-to-peer lender in Australia to allow retail investors to participate, and the number of lenders on our platform is growing stronger each month – in fact in September we had over 350 new lenders join our platform.

We’ve also got some exciting plans ahead to broaden our fan base. And with highly attractive rates on offer, we think it is only a matter of time until more Australians tune in.

Loans and loan book

Total value funded$63 million £1.5 billion
Number of loans funded3,750311,045
Average loan amount$16,800 £4,691

The relative size of our loan books and the strength of credit performance is where we see this healthy rivalry being focused over the coming years. As a younger player, we’re some way behind, funding ~$6m of loans each month compared to the impressive ~£55m in the UK. We’re confident that the concentrated nature of the market we operate in will continue to provide us with ample opportunity grow our personal loan products in Australia to show our pace, get our name on the honours board and make our fans proud.

Provision Fund protection

Capital and interest returned as due to individual investors100%100%
Provision fund balance*$2.6 million £22.6 million

* Includes contractual future income in the UK balance

Above all, RateSetter in the UK has shown real brilliance in the invention of a number of unorthodox strokes, exemplified by the introduction of the Provision Fund concept to peer-to-peer lending – to provide some extra padding, if you like.

Now the Provision Fund in Australia is growing strongly too. Both teams know that maintaining predictable, healthy returns on an on-going basis is what’s required to keep our supporters captivated, and allow the Ashes of peer-to-peer lending to reach its true potential. And to the delight of our fans, to date, both teams have been able to pay every individual investor every dollar, pound, cent and penny of interest and capital due.

Anything else just wouldn’t be cricket.


Of course, when making international comparisons we also should bear in mind the differences in central bank rates and interest rate expectations in the UK and Australia, and the differences in risks and liquidity attached to investing via RateSetter in the UK and in Australia.

An investment via RateSetter in Australia is specific to the RateSetter Lending Platform, which is different from any investment via RateSetter in the UK. The Provision Fund of RateSetter in Australia is entirely separate to the Provision Fund of RateSetter in the UK, and investors in Australia do not benefit from any protection from the Provision Fund of RateSetter in the UK. The above information is correct as at 4 October 2016. The information does not constitute general or specific investment advice.

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.