‘Big three’ peer-to-peer lending platform RateSetter has been hitting many headlines of late, so here Peer2Peer Finance News focuses on the platform and digests exactly what’s been going on.
The most popular story, of much interest to all stakeholders in the industry, is the news that Metro Bank is in “advanced discussions” to acquire RateSetter.
The two firms have entered into exclusive talks, with the bank showing a particular interest in the platform’s consumer loanbook.
Read more: Why is Metro Bank eyeing RateSetter?
Halving interest rates
At the start of May, RateSetter halved interest rates for all accounts for the rest of the year, in response to the economic uncertainty caused by Covid-19.
Access account-holders will earn 1.5 per cent per annum, rather than the three per cent rate that was previously offered, account-holders have seen their interest rates cut from 3.5 per cent per annum to 1.75 per cent per annum and max accounts will now be receive two per cent, halve of the previous four per cent.
Slowdown in requests for loan payment breaks
The platform said its loan performance was in line with expectations during April and it has avoided a “dramatic rise” in arrears.
Focussing on existing customers
Also at the start of June, RateSetter’s chief executive, Rhydian Lewis (pictured) exclusively revealed to Peer2Peer Finance News that the platform’s focus has been on serving existing customers during the coronavirus.
“The pandemic is the P2P lending industry’s first major crisis and the focus is entirely on existing customers, so you actually improve their experience and learn something,” he said.
The Covid-19 pandemic has hit consumer lending hard, with fewer people making major purchases like a car or a home improvement project.
RateSetter has seen a drop in consumer lending platforms so has taken a cautious approach to managing this, tightening its lending criteria to favour homeowners and customers with greater affordability and creditworthiness.
And despite Covid-19 impacting car dealerships significantly, RateSetter said its asset finance division has suffered fewer defaults than expected during the past few months.
The platform said its asset finance division performed well through the pandemic and predicts healthy demand as restrictions ease and normality gradually returns. The lender warned of challenging times ahead but said it is prepared to manage those risks.