RateSetter Tops £1 Billion. Claims Record Pace for UK Marketplace Lending

RateSetter, a UK-based marketplace lending platform, has surpassed £1 billion in loans and is staking a claim in setting a record. According to the company, RateSetter accomplished this milestone in 1,933 days. “The company believes it is now the largest online retail money market in the world.”

Rhydian Lewis-Ratesetter“From the start our objective has been to disrupt the way people view interest rates in this country,” state Rhydian Lewis, CEO of RateSetter. “We have started a quiet revolution – a step change in transparency on a fundamental price point in people’s everyday lives – with interest rates set by the crowd, not by the banks. This is delivering real value: for example, compare our average one year interest rate of 3.7% to the average for a one year cash ISA at 1.17%.”

The online lender believes it is unique due to it ambition to become a reference for interest rates.  RateSetter allows its customers to set the rate of return at which they may earn.  Secondly, RateSetter states it is the only major UK marketplace lender where no investor has ever lost a single pound. This is due, in part, to is “Provision Fund”, which was crafted as a form of investor insurance.

The company says it has a growing base of more than 30,000 customers who may lend money via its platform.  The majority of investors (90%) remain smaller investors who may invest side by side with other entities and institutions. The number of active borrowers is said to stand at over 185,000. RateSetter states that this number exceeds any other UK platform.  In 2015, over £500 million was lent in 2015 and industry commentators predict an increase to £750m this year.

A few bullet points regarding the RateSetter platform;

  • Launched by Rhydian Lewis and Peter Behrens, with the first approved loan on 7 October 2010
  • 32,000 investors:
  • £31.5m in interest earned
  • No individual investor has ever lost a penny thanks to the Provision Fund (which stands at over £17m)
  • £2.7m largest investment; £10 minimum investment
  • 89% are individuals, 8% businesses, schools and charities, the remainder are City investment funds and the British Business Bank
  • 207,000 loans made:
  • 59% of lending is to individuals and 41% businesses, out of which 11% is to property developers
  • Profit recorded two years running (2013-14 and 2014-15)
  • £20m equity investment from City fund managers including Woodford and Artemis in March 2015
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