A PEER-TO-PEER analysis firm has expressed confidence that RateSetter will eventually become profitable after giving the lender’s Max account its highest exceptional rating.
A review of the platform by 4th Way praised RateSetter for its well-established team and excellent track record.
“If I had to choose one P2P lending platform that everyone with savings must put money into, I think it would be RateSetter,” Neil Faulkner, head of research for 4th Way, said.
“It’s well established, has an excellent record … a large reserve fund, incredible diversification, and bad luck from bad debts is eliminated because all lenders get the same return.”
The review highlighted that like most P2P lenders, RateSetter still isn’t profitable.
“RateSetter has matured in a sustainable way,” Faulkner said.
“It grew revenue rapidly for eight years. Its earnings have been stable at around £33m for each of the past two years.
“Its losses narrowed from £27m last year to £4m.
“Over the past year, its assets grew at roughly the same pace as its debts. As a deeply entrenched player in the loan and P2P space, I firmly believe that RateSetter will become profitable.”
Faulkner does suggest one area for improvement, suggesting it could be made clearer that investors may sometimes suffer severe exit delays.
“RateSetter can’t guarantee that you will be able to sell your loans to someone else before your borrowers repay them,” he said.
“Delays might occur in particular when the economy or interest rates change rapidly.
“While you continue to earn interest on those loans until they’re fully repaid, all P2P websites have that same risk.”