Peer-to-peer (P2P) lender RateSetter has made its loan book public as it pushes for greater transparency and accountability in the lending market.
The loan book contains information about every loan originated through RateSetter since its public launch on 11 November 2014 to 11 September 2015, including 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 home ownership status.
RateSetter CEO Daniel Foggo said the release of such information is unprecedented in the Australian lending market.
“We are proud to be the first P2P lender to release our loan book data in Australia. Sharing this data is commonplace in the US and UK where P2P lending is more established, but this level of transparency is unheard of in Australia and we want to encourage it,” he said.
“This sets us apart from traditional lenders and demonstrates our commitment to developing real trust with our borrowers and lenders. We recognise trust as fundamental to the success of our platform.”
Mr Foggo said transparency is the cornerstone of P2P lending, and taking a ‘nothing to hide’ approach to RateSetter’s data will help encourage greater consumer confidence.
“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,” he said.
“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.”
During the period covered in the loan book, RateSetter has facilitated 603 loans at an average value of $16,700 per loan. Additionally, not one of its borrowers had defaulted on their loan during the period.
The data also showed that borrowers have secured average interest rates of 4.4 per cent for one-year loans, 8.2 per cent for three-year loans and 10.4 per cent for five-year loans.
Car purchases are the top-rated purpose for securing a loan through RateSetter, with 21 per cent of borrowers seeking funds to buy a car. This was followed by home improvements and furnishings (14 per cent) and paying off credit card debt (12 per cent).
The data will be available publicly for download through the RateSetter website and will be updated on a regular basis.