According to Australian Broker, peer-to-peer (P2P) lender SocietyOne has announced a major milestone this week, surpassing $60 million in total loans, with year-to-date loan volume already tripling the company’s loan originations during 2014. However, the chief executive says it is the type of growth that really demonstrates the value of the P2P proposition.
Since its launch the P2P lender has have seen a big shift from non-conforming borrowers to high-quality borrowers. In fact, SocietyOne’s growth this year has been driven largely by high-quality borrowers leaving the major banks.
“Right at the very start, literally at day one, there was certainly a higher proportion of people who may not have met the bank scorecard. However, there has been a pretty steady trend over the last three years where the average Veda score of all applications on any given week continues to go up as more and more.
“People who have a banking relationship have started to ask themselves if they are paying more than they should be for their existing personal loan or more than they might otherwise like to for the carry forward balance on their credit card.”
According to data from SocietyOne, the median yearly income of their typical borrower is approximately $82,000 and their median credit score is 742. The most common job titles of their typical borrower are professional (34%) and manager (22%).
SocietyOne chief executive Matt Symons says this not only proves the value proposition of P2P lenders, but the opportunity they have to significantly disrupt the market.
“I think there are opportunities for marketplace lenders, like SocietyOne, which are just inherently more efficient and competitive to offer a range of borrowers a great deal. I think the big thing is that historically in Australia, everyone has paid the same price. What we have pioneered in Australia – as the first marketplace lender to launch in Australia three years ago – was risk-based pricing in consumer credit,” he told Australian Broker.
“It is great to see Australians taking back control of the sort of information that banks and other institutions have traditionally always had on all of us as consumers and getting the benefit of that themselves. It is that kind of revolution where the power is being put back into the hands of the customer to make better choices about what financial services products meets their needs.”
