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Peer2Peer Finance News | December 19, 2018

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RateSetter adds more detail to performance statistics

RateSetter adds more detail to performance statistics
Anna Brunetti

RATESETTER has stepped up transparency on its lending activities by making more data available through its annual performance table.

The peer-to-peer lender has introduced new categories, which break down how much of the funds are allocated to consumer and commercial loans.

A new sub-section within the online table will also indicate how much, within the commercial lending sector, was channelled to property developers, small- and medium-sized enterprises (SMEs) and to other lenders – known as wholesale lending.

Read more: UK loan market needs to be clearer and fairer

The move follows a request by the Financial Conduct Authority (FCA) that P2P platforms provide information about their wholesale lending operations.

At the end of last month, the UK watchdog warned against P2P players lending to other lenders and asked them to disclose information about those firms they have lent to that may not have the correct regulatory permissions.

P2P platforms have until Tuesday 14 March to provide data to the FCA.

RateSetter’s updated table shows that the firm has channelled just over £21.6m to other lenders this year so far, just below the £22.2m it lent to property developers.

Meanwhile, consumer loans remain at the core of the company’s lending activity, accounting for £91m of its investment in the year to date.

In comparison, SMEs received around £10m from the platform over the same period – something that may increase soon, as the firm told Peer-to-Peer Finance News it believes that small businesses will be a great source of borrower demand going forward.

The platform also used the table update to confirm that one of the loans it financed last year was partially taken onto its own balance sheet, to protect investors from potential losses on that loan.

Read more: Peer-to-peer lending must remain true to its roots

“In an exceptional case where a loan was made to a company that subsequently went into financial difficulty, RateSetter has taken part of the loan onto its own balance sheet and has agreed to give the company further direct financial support so that it can continue to trade and repay its debts,” said the firm.

“We did this because the loan was outside RateSetter’s credit policy and we believe that it is appropriate, in this specific case, to stand in front of our lenders. The performance figures in this table reflect actions that RateSetter has taken in this case.”

As part of this extraordinary measure, the platform agreed to give that specific borrower further direct financial support so that it can continue to trade and repay its debts, it said.

Read more: Wholesale lending deemed to be against P2P rules