RateSetter: Millennials are driving P2P growth in Australia
MILLENNIALS represent the largest retail investor group in the peer-to-peer lending market in Australia and will drive the sector’s growth, according to new research from RateSetter.
The London-headquartered P2P platform, which launched its Australian division to the public in 2014, argues that poor rates on savings accounts, high property prices and stock market volatility have pushed people aged 18-35 towards P2P lending.
RateSetter Australia said that its number of millennial investors had grown by 250 per cent over the last 12 months and now accounts for 58 per cent of total active investors.
The research, conducted among the platform’s Australian investors, found that 64 per cent of its millennial customers had moved money from low-interest savings accounts and 23 per cent had redirected money from equities.
19 per cent were lending through RateSetter as they were unable or unwilling to invest in residential property, the survey found.
Millennials are investing more money too – the average amount climbed 20 per cent year-on-year to AUS$9,710 (£5,624). They are expected to continue to drive the growth of P2P lending in Australia, with 80 per cent of those surveyed planning to increase the amount invested through the platform in the next 12 months.
“Millennial investors certainly don’t have it easy,” said Daniel Foggo, chief executive of RateSetter Australia.
“They are starting their wealth accumulation at a time of low interest rates, economic volatility and very high property prices. They need to be smart with their money, and they know a low-interest bearing bank account isn’t always the right choice.”