The CEO of one of Australia’s leading peer-to-peer (P2P) lenders has urged the federal government to introduce incentives to encourage wider adoption of the comprehensive credit reporting (CCR) regime.
RateSetter’s Daniel Foggo says it's disappointing that out of the hundreds of credit providers, only three –including RateSetter – have adopted CCR since it was introduced two years ago, “despite the clear benefits to businesses and consumers”.
Mr Foggo said no major banks are currently sharing data with other credit providers under the regime.
“We think [the] government should move forward its time frame for implementing regulatory incentives,” he said.
“It is in the government’s interest to level the playing field for innovative new entrants like RateSetter who are trying to deliver true risk-based pricing and provide consumers with a better, fairer deal.”
RateSetter made its loan book public late last year, which contains information about every loan originated through the P2P lender since its public launch on November 11, 2014 to September 11, 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.
Mr Foggo said transparency is the cornerstone of P2P lending, and taking a “nothing to hide” approach 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.
Meanwhile, emerging online invoice trading platform InvoiceX released its loan book volumes in January as part of its push for greater transparency in P2P lending.