RateSetter first published its full loan book in the UK in February 2015, as part of its entry into the Liberum AltFi Returns Index (LARI) – of which both Zopa and Funding Circle are also constituents. The actions of the UK’s “big three” prompted a number of other platforms to follow suit. MarketInvoice, LendInvest and Landbay have also made their loan books publicly available for download, via the AltFi Data site.
RateSetter Australia’s decision to do the same is the first example of such a move that we’re aware of outside of the UK and US markets. Both Lending Club and Prosper have published their complete loan portfolios online in the past, but they now partially restrict the information that is available to investors.
RateSetter Australia’s downloadable loan book includes data for every loan that has been originated by the platform since its public launch on 11th November 2014, up until 11th September 2015, and the data will be refreshed on an ongoing basis. The data itself includes loan amounts, interest rates, loan purpose, and non-identifying information related to borrowers, such as age, gender, state/territory of residency, employment status, income and homeownership status. For context, the UK platform’s loan portfolio includes the following data points: amount, issue date, term, interest rate, loan status, total interest paid, total recovery, total charged off principal, total principal paid, principal outstanding, loan amount group, origination quarter, defaulted, provision fund coverage, borrower type and secured/unsecured. As you can see, the Australian loan book is actually the richer of the two in terms of borrower information.
The numbers show that RateSetter Australia has facilitated 603 loans at an average size of $16,700 per loan, and that the platform has not yet suffered a single default. The average interest rates being paid by the platform’s borrowers range from 4.4% (1 year loans), to 8.2% (3 year loans), to 10.4% (5 year loans).
The publishing of RateSetter Australia’s loan book coincides with its passing of the $10m mark in cumulative lending. Daniel Foggo, CEO of the platform, offered his take on the importance of transparency:
“Real transparency is the cornerstone of P2P lending. Taking a ‘nothing to hide’ approach to our data will help to encourage greater consumer confidence in P2P.”
“It’s vital for investors to understand the risks as well as the benefits. Releasing this data helps ensure that as operators we are held accountable for the quality of the loans their platform facilitates.”
“We’d encourage others in our industry to follow us and open up their loan books to help create a new standard of openness and transparency.”
Mr. Foggo’s invitation may well morph into something of a fait accompli for Australian P2P platforms. In a nascent industry, one in which competition for investors is fierce, transparency (and, consequently, trustworthiness) will likely be a crucial distinguisher.