Peer-to-peer lending Industry overview

Transcription

1 Peer-to-peer lending Industry overview February 017

2 Andrew Jones Head of Commercial Development RateSetter Australia

3 Current customer experience Complex organisations leading to poor customer experiences? Convenience Speed Personalisation Transparency Value 3

4 Agenda 1 What is peer-to-peer lending? Why invest in personal loans? 3 Investment checklist 4

5 What do peer-to-peer lenders do? Source borrowers Evaluate credit Match in a marketplace Administer loans Match people who want to borrow with people who have money to lend 5

6 US$ Bn Industry status growth Australia, $17bn by Global (ex. China) Australia Source: Morgan Stanley, Global Marketplace Lending, May 19, 015 6

7 A$ Millions Millions RateSetter overview loan originations RateSetter is growing rapidly in Australia, with visibility to reaching its monthly loans volumes in the UK of over $100 million month Cumulative loans funded - Australia 70 Cumulative loans funded UK 1, , ,00 1, Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct Source: RateSetter.com.au, RateSetter.com 7

8 Broad recognition He s a believer He s worried Policy makers taking supportive action Larry Summers, Harvard academic, World Bank economist, ex Treasury Secretary, etc Believes 70% of SME lending will be via alternative lenders Believes in the benefits: Reduces friction in the economy Improves allocation of capital Enhances financial system resilience On the board of Lending Club Jamie Dimon, CEO JP Morgan Quote: Silicon Valley is coming Warning to shareholders, April 015 George Osborne, former UK Chancellor Lending sovereign funds through platforms (including RateSetter group) Creating PP pension (ISA) options Removing information asymmetry between banks and PP lenders Legislating compulsory bank referral of declined SME loan applicants Malcolm Turnbull, Australian Prime Minister Pro-innovation agenda Watch this space 8

9 Peer-to-peer lending products Personal loans SME loans Residential mortgages Large business loans 9

10 Industry status key operators 10

11 Different peer-to-peer lending models 1 USA model Loan selection Investors need to understand diversification and loss given default Majority wholesale funding UK model Provision fund protection Platform retains a buffer to protect investors from default 11

12 US model 1

13 RateSetter model four lending markets 13

14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 RateSetter model customers set the rates 1% 10% 8% 6% 4% % 0% 1 month 1 year 3 year 5 year 14

15 The Provision Fund: safer peer-to-peer lending Borrowers Lenders $10 $330

16 Why invest in peer-to-peer lending? Easy online access and SMSF ready Class, BGL Attractive investment class High yield and low volatility Control and flexibility Low fees 16

17 Increasing return Risk vs return - illustrative Peer-to-peer lending Equities Bank deposits Increasing risk *Illustrative returns only 17

18 Investment checklist Track record Accessibility Regulated and ring fenced No pooled investment fund Diversification Transparency 18

19 Please contact us for more information Andrew Head Jones of Commercial Development Phone: Mobile: Important Note This presentation was prepared for the purpose of a briefing to the general public. The material in this presentation is general background information about marketplace lending and RateSetter activities and is current at the date of this presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered with professional advice when deciding if an investment is appropriate. Any forward looking statements included in this document are by nature subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to, RateSetter, so that actual results or events may vary from those forward looking statements, and the assumptions on which they are based. While RateSetter has sought to ensure that information is accurate, it makes no representation or warranty as to the accuracy or completeness of any information or statement in this document. Please read the Product Disclosure Statement before investing.