|Founder||Rhydian Lewis, Peter Behrens|
RateSetter is a British peer-to-peer lending company based in Bishopsgate, London. The company is known for having introduced into peer-to-peer lending the concept of a "Provision Fund" – an internal fund which aims to help lenders manage the risk of borrower default. Launched in October 2010, by June 2018 the company had matched more than £2.5bn in loans and had over 500,000 investors and borrowers.
RateSetter's holding company, Retail Money Market Ltd, was incorporated in October 2009 by Rhydian Lewis, an investment banker from Lazard, and Peter Behrens, a lawyer turned banker formerly of Royal Bank of Scotland. The company was privately funded from the start by angel investors, and raised £13m in a 2017 funding round which took the total amount raised to over £40m.
RateSetter commenced operations in Australia in November 2014. The Australian branch, with the office located in Sydney, is managed and majority-owned locally, and was the first peer-to-peer lending platform in the country open to retail customers.
In December 2017, it was announced that over AU$200m had been lent via the platform.
RateSetter is based on the principle of an exchange. Price is determined by the supply of money from lenders and demand for money from borrowers, with both sides of the market specifying the rate they will accept. The firm has three markets for lenders to participate in: Rolling, 1 Year and 5 Year.
The firm introduced to consumer finance the concept of a "Provision Fund" to reimburse lenders in the event of a late payment or default. This is a capital sum (over £29,000,000 as of June 2018), generated by borrowers' payment of a "credit rate" fee based on their credit profile. As of June 2018, RateSetter claims that none of its individual investors have ever lost money.
Borrowers can apply for a loan for between 6 and 60 months. The company has strict lending criteria, accepting (in 2011) between 12 and 15 per cent of borrower applications.
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