Melbourne-based peer-to-peer lender MoneyPlace has officially launched to the public with the mandate of delivering tailored loan offers for borrowers and more stable returns for investors.

Melbourne-based peer-to-peer lender MoneyPlace has officially launched to the public with the mandate of delivering tailored loan offers for borrowers and more stable returns for investors.

“We’ve spent close to two years building up a platform and developing a process to support bringing peer-to-peer (P2P) lending to Australia,” said Stuart Stoyan, founder and chief executive of MoneyPlace.

“For too long Australian borrowers have been penalised by the big banks with their ‘one size fits all’ approach’ to personal loans … our core promise to Australian borrowers and investors is that we are using additional sources of data in a way that goes above and beyond a traditional lender.”

According to a Morgan Stanley report released in May this year, the P2P consumer lending market in Australia is expected to reach $10.4 billion by 2020 as a result of high mobile and online banking penetration which is driving rapid growth and disintermediation, as consumers turn away from banking incumbents for more competitive loan offers.

As previously reported by FST Media, MoneyPlace draws on alternative data sources – including academic grades and social media – to assess an individual borrower’s risk and provide them with a specific interest rate.

“Additional sources of data [allow us] to conduct risk-based pricing to provide a borrower with a very specific, unique loan offer which is tailored to them individually and [demonstrates] the risk that they represent,” Stoyan said.

“By being able to better assess a borrower’s risk, we are able to provide more stable returns to investors … it means that the investors are able to get the returns that they expect and I think it is that reduction of volatility that becomes absolutely important for investors, especially when you look at what has happened in the stock market over the last several months.”

Having received its full retail and wholesale operating licence from ASIC after an 18-month approval process, the launch represents a “very significant” step for MoneyPlace, who will provide unsecured consumer loans from $5000 to $35,000 with rates as low as 8.9 per cent.   

Stoyan, whose previous roles saw him lead strategic development and business management improvement in NAB’s national business banking unit, said that his team had been “inundated” and “overwhelmed” with the number of registrations and interest that MoneyPlace has generated to date.

“It is really exciting [and] it is also significant for the industry as we now have four fully-regulated players that can participate in the market, [thereby] providing better options for Australian borrowers and investors,” he said.

Among its key competitors are SocietyOne, established in 2012 and backed by Westpac’s venture capital fund, Reinventure Group; RateSetter Australia, father of the Provision Fund; as well as Sydney-based startup, DirectMoney.

Stoyan confirmed that the first phase of MoneyPlace’s launch will allow borrowers and wholesale investors to register on the site to get a loan or to invest, with the fintech startup bracing itself for a full-service launch in the long-term – a launch that is expected to include retail investors as well.

“Our rationale behind that is that, as we progressively increase in our loan volumes [and] as we get more borrowers onto the platform, we want to ensure that we have sufficient volume to enable our retail investors to have their funds fully deployed in a reasonable period of time,” Stoyan said.

“Some of the decisions that we’ve made to stagger the launch of MoneyPlace is actually about preserving a brilliant user experience, particularly for retail investors and ensuring that they have the best experience possible.”