RainFin, which is 49% owned by Barclays, is following a familiar trajectory for first-to-market consumer lending platforms. Both Zopa in the UK and Lending Club in the US are now offering loans to SMEs after having initially kicked off peer-to-peer lending in their respective countries with a consumer facing product. Business borrowers may now seek up to R 250,000 on a 24 month term via the RainFin platform. Annualized interest rates are said to be somewhere between 10% and 32%.
Sean Emery, Founder and CEO of the platform, commented:
“We have two years of history now, but volume ramps up as you have performance data. We’re in the equity phase. When you get a rating, that’s the trigger point for massive acceleration.”
Though the currently available data may not be truly reflective of the platform’s loanbook at this early stage, Emery was able to share some insight. Over its two years of activity, an average of 5% of RainFin loans have defaulted. The platform’s least risky band of loans shows a default rate below 1%. 350 new customers register on the site each day, with 10% of them proving eligible to lend or borrow. RainFin reportedly lists 18 new loans with a value of R 400,000 every day.
You have to wonder whether the platform’s only serious competitor in the area – Lendico – will also be sizing up a broadening of its product offering.