The figure is published on RateSetter’s website and updated in real time. The Provision Fund now covers historic bad debt by more than six times.
RateSetter turned the established peer-to-peer model on its head when it launched in October 2010. Unlike the traditional model, where lenders are exposed to bad debt, the Provision Fund acts as a buffer to protect lenders from late payment or default.
RateSetter’s management of the Provision Fund has ensured that every RateSetter lender has received every penny of capital and interest, making RateSetter unique in the fast growing world of peer-to-peer lending.
RateSetter has facilitated over £73m of loans between lenders and borrowers, of which £50m has been matched in the last 12 months. Monthly volume is now £6m a month, a 100% growth within six months.
According to Rhydian Lewis, RateSetter founder and CEO, the growth of the Fund makes RateSetter stronger, bringing confidence to more consumers:
"The Provision Fund acts as a barometer for our success – as it grows, people see their lending getting safer and safer. 74% of our customers cite our management of the Provision Fund as RateSetter’s USP and we’re delighted that our approach of simple and safe is becoming the industry message.”
This view is endorsed by RateSetter lender, Jochem van Ast, from Harrow, who welcomed the transparency of the Fund:
“Once I’d decided to put some of my money into a peer-to-peer lending platform, RateSetter’s Provision Fund was the deciding factor in selecting which operator to use. The extra level of protection it affords, and the simplicity of the model as a whole, was very attractive. Moreover RateSetter is absolutely transparent in the amount that is in the Fund, and how much bad debt it can cover.”
