Harmoney, the first p2p lending marketplace in New Zealand, has raised 200M NZD from P2P Global Investments fund (P2PGI) to launch in the Australian market. The agreement includes both debt and equity. In its first year in operation in New Zealand Harmoney already originated 100M NZD in loans to consumers. Continue reading
This is a guest post by Leo Tyndall, CEO and founder of Marketlend.
The peer-to-peer lending industry remains embryonic in that there are only two Australian peer-to-peer lenders, Society One and Marketlend. The remaining peer-to-peer lenders RateSetter and ThinCats are spin-offs of their UK operations -RateSetter Australia is by now only partly owned by Retail Money Market.
The focuses of both Society One and RateSetter are personal loans whereas ThinCats and Marketlend focus on commercial lending. Legal structure by Society One and RateSetter is a managed investment scheme. ThinCats legal structure is unclear aside from that they are an authorised representative of an Australian Financial Services License similar to Society One and Marketlend. However, Marketlend has opted for the more traditional debt structure by establishing trusts that issue tradable bonds by an independent trustee.
The Australian peer to peer market is operating in the commercial banking market which is 2123 billion of client loans according to BMI Research as of November 2013. P2P Lending remains a new concept and irregularly reported albeit growing exposure is occurring through crowd funding publicity and statements by new investors like Murdoch investor group and James Packer investor group.
Crowdfunding saw commentary from the regulatory authorities in the form of a guidance and reference in a financial system review in last quarter of 2014. The essence is that it should be encouraged however, there are significant legislative hurdles at this time and consideration should be given to making it easier to commence such endeavors.
At this time if you offer a financial product, service, loan or investment to a retail person, a credit license is needed for lending and you are required to hold an AFSL or be an authorised representative of an AFSL holder who has sufficient licenses to enable it to advise, and offer financial products to the retail market. Furthermore, if you chose to offer a product, through a managed investment scheme, you need a responsible entity or must be a responsible entity (RE) to offer the securities. In layman terms, the RE is a similar entity to a trustee. A notable exception to this includes, operating to offer to wholesale investors and offering only business loans. Each of these has it’s own idiosyncrasies.
As recent as 15 March 2015 CBA top executive Kelly Bayer Rosmarin questioned whether peer to peer lending is driven by supply side factors in a low interest rate environment and wondered if the peer to peer model can sustain an entire cycle. This shows a lack of concern or possible complacency by the mayor banks. However other smaller or progressive banks have looked to discuss with peer to peer lenders about possible cooperation or investment.
For peer to peer lenders we welcome the benign attitude of the larger banks as it is the type of attitude that drives investors and borrowers towards this market. Australia is marketplace where the internet is a well-accepted forum for doing business and the financial services industry is already using it to develop their own businesses. This type of lending is a graduation of the electronic age of the financial services industry in Australia and here to stay.
There is talk of at least 3 new arrivals this year: Money place, Lend2fund and another that has operations offshore.
Marketlend is a business peer-to-peer lender who offers loans only to business in the form of working capital, traditional business lending and commercial property. Using intuitive software to take applications and automated proprietary software within a matter of minutes, Marketlend can complete external credit checks and rate the likelihood of loan repayment. The software is provided by third parties who offer similar solutions to government departments and public companies. A financial analysis is performed on available financials to determine debt coverage service ratios, leverage ratios and general health of the borrower. These data points, historical payment history and approximately 65 input items are used to determine the rating of the risk. Continue reading
Carsales.com has invested in an equity share of Australian Ratesetter marketplace. RateSetter today announced that Stratton Finance and Carsales would together invest about 10 million AUD in the Sydney-based local business, taking a combined 20 per cent equity stake which will puts the valuation of Ratesetter Australia at 50 million AUD. Continue reading
Ratesetter will expand its p2p lending operations to Australia in 2014 and says this will serve as the stepping stone to further launches in Asia. It is also exploring launches in association with financial services partners closer to home in Europe.
Ratesetter has secured investment of $3 million from local and international investors to kick-start its offering from its Sydney offices.
Headed by Daniel Foggo, a former banker with Barclays Capital and NM Rothschild in Sydney and London respectively, the company says it will be the only Australian P2P company offering market-beating savings rates to individuals who lend funds on its platform and accessible loan rates to everyday borrowers who are tired of banks’ hidden fees and profiteering.
Ratesetter will go live in Australia this summer. Ratesetter says, it will be the first P2P lender in Australia to be fully regulated from the outset, allowing all Australians to participate on its platform, not just professional investors. To make the platform available to retail investors at launch, Ratesetter has been working for a year on licensing.
Ratesetter, launched in October 2010 in the UK was also the first P2P lender to launch a ‘Provision Fund’ – the largest in the UK at 3.8 million GBP – to help protect savers’ funds in the event of a borrower default. In March 2014, Ratesetter also originated the largest monthly inflows in the UK p2p lending sector. Since October 2010 the total p2p loan volume originated by Ratesetter has been over 208 million GBP.
Rhydian Lewis, founder and CEO of Ratesetter, said: “When looking at international markets in which to expand, Australia was the obvious choice as it bears great similarity to the UK before the advent of p2p lending. Its saving and loans industry is ripe for disruption as banks have been offering below-par deals for too long with little true competition.” Continue reading
In Australia Reinventure Group, the new Westpac-funded venture capital manager, has invested $5 million in p2p lending service Societyone. Society One, which was founded in August 2012 (see related earlier coverage) by Matt Symons and Greg Symons has originated about 200 loans totalling 4 million AUD. The loan book has doubled in the past six months. Westpac’s VC fund will be joined on the SocietyOne shareholder register by Rocket Internet, which is already funding Lendico, and several local investors including the Australian head of global private equity giant KKR, Justin Reizes, who said he has invested in Society One in a personal capacity.The 8.5 million capital raising will allow Society One to develop new credit products. It recently launched livestock loans and loans tailored for young doctors which are being offered to sophisticated investors through its internet-based platform.
An Australian perspective on peer to peer lending by Rachel Botsman