Recently, Ratesetter became the first platform worldwide to be independently risk-rated.
It has been awarded a rating of 1 by the research agency, FE, which means it is considered low risk and investors can expect a steady return on their cash.
This is a clear sign of maturity in the market. In the past, independent ratings have signified a firm's intention to securitise loans as the third party score satisfies potential investors. In this instance, Ratesetter has put the move down to a need to further reassure savers over the safety of their investment, and it could put pressure on other firms in the market to acquire similar ratings.
We believe this to be another positive move for the market, but it would be wrong at this stage to seek similar ratings from FE. Primarily because our model is quite different to Ratesetter - our lenders are not really "savers" in the sense that those lending on Ratesetter are. We class our lenders as investors as the risk of lending to businesses without a compensation fund is higher, but so are the rewards.
We'll try to keep lenders posted on any developments in this field.
Read the full Financial Times article (subscription required)
Rebuildingsociety.com is proud to have been selected to be part of the 2019 Barclays Scale Up programme, run by Barclays in collaboration with Cambridge Judge Business School. The innovative programme aims to enhance the performance...
Interview with Brian Johnson, successful rebuildingsociety.com lender Hello Brian, how did you first find out about Rebs? I was becoming interested in P2P and opened some accounts with Funding Circle, Zopa and Ratesetter, when I...
I like cool names. Which means I love Fist Bump For Science, even before I realise just what a great concept it is. They take science kit into schools and colleges and get the kids...
A recent PWC report defines Financial Wellness like this: "Being financially ‘well’ not only means being able to meet current financial needs such as paying bills or holding sufficient insurance protection, but also being confident that...