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Appetite for P2P lending to keep growing

SMSF interest in peer-to-peer (P2P) lending as an asset class will only continue to grow this year, particularly as the advised channel begins to get on board, according to one P2P lender.

RateSetter chief executive Daniel Foggo said last year the business made it easier for SMSFs to use its platform.

“We’ve had now our first adviser put SMSF funds into the platform, so it’s definitely heading in the right direction,” Foggo told selfmanagedsuper.

“For that specific adviser we have found a way to be on their approved product list, so absolutely the interest from advised SMSF investors and the ease for them to invest in the platform is improving all the time.”

In September, the company announced it had passed $10 million in loans facilitated since its official launch to Australian consumers in November 2014.

More than 25 per cent of RateSetter’s loans are sourced from SMSFs.

Its 2016 focus will be to increase business scale.

“Last year was all about laying down a really good foundation and this year we should see ourselves scale up,” Foggo said.

“Coupled with that I think we’ll see an increased focus on SMSF investors as they do tend to deploy larger amounts of capital, so it’s a logical place for us.

“And a lot of our borrowing tends to be at that five-year market, which obviously lends itself very well to people who are investing for a longer period of time.”

RateSetter was funding about $1 million a week, compared to about $500,000 last year, he revealed.

“It’s starting to get more substantial and that growth will just continue into 2016, so there’s certainly an opportunity for people to deploy larger amounts for their SMSF,” he said.

“Our credit performance continues to go really well and we haven’t had a default yet still, and that’s on $19.5 million of lending, and our Provision Fund, which protects our investors, nearly has a million dollars in it.

“The message is that this asset class is proving itself. That’s what we’re trying to do – we’re trying to make sure it’s as safe as possible for investors.”

No major changes were planned for the platform, he said.

“We’re continuing to make lots of refinements all the time, but no, nothing fundamental in terms of changing the product,” he said.

“This year we will look to include access to business loans, et cetera, but it’s a bit premature at the moment.”

RateSetter was launched in 2010.

Its Australian operation was established in 2012.

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