It has been reported that RateSetter Australia will expand its product range. The platform has gained approval from the Australian Securities and Investments Commission and will move into secured personal loans.
Since launching in November last year RateSetter has lent AUS$3.5 million of unsecured personal loans for 3,644 borrowers. It currently offers loans from $2,000 to $35,000 with terms from six months to five years. All of the platform’s funding is retail money.
According to Daniel Foggo, CEO of RateSetter Australia, the platform has received $120 million of applications in the past six months. Foggo believes that the fact they have originated only $3.5 million is an indication of the high standards of the platform.
"We are not automated. We have a sophisticated technical platform but we do a lot of underwriting – probably more than traditional lenders."
This month RateSetter Australia also announced that it is the first Australian lender to fully implement Comprehensive Credit Reporting (CCR) data sharing with Veda, Australia’s lending credit bureau. The CCR framework allows lenders to share ‘positive’ data, including account and repayment history information, with credit bureaus.
The RateSetter Australia boss continued:
“We see CCR as a game changer for Australian consumers, boosting competition between lenders and facilitating innovation such as true 'risk-based pricing’. Using the additional data available with CCR will help lenders offer lower rates to more creditworthy borrowers.”
In March this year RateSetter Australia partnered with carsales.com and Stratton Finance. Part of this was a $10 million investment into the platform from Stratton Finance, and Stratton’s 50.1% owner carsales.com. The deal means Stratton directs customers seeking loans of less than $20,000 to RateSetter Australia, helping to boost origination volumes on the platform.
Rob Chaloner, Chief Executive of Stratton, explained:
“As a technology business operating in the finance sector, we expect to see RateSetter Australia loans fill a number of gaps in the Australian automotive financing market.”
It is clear that RateSetter Australia is working to cement itself as a viable alternative to the banks. However, P2P lending is still in its infancy in the Australian market and all of the platforms need to work to increase awareness among borrowers of this newly available method of acquiring credit.