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Bolton: How do investors know P2P right for them?

Peer-to-peer platforms need to start regularly disclosing information to their investors about more than just the individual loans they are invested in, one provider has argued.

Wednesday, December 9th 2015, 6:00AM

by Susan Edmunds

There are now three peer-to-peer lenders operating in the New Zealand market: Harmoney, Squirrel Money and LendMe.

They all give investors updates about the performance of the loans their money is involved in, including demographic information about the borrowers and updates on repayments being made, and any arrears.

But John Bolton, of Squirrel Money, said the sector could do better at providing wider information about peer-to-peer lending in general and the platforms themselves, to help borrowers decide if it would suit them.

Harmoney offers investors the opportunity to fractionalise their investment to reduce risk, buying parcels of loans at $25 each.

LendMe also fractionalises in parcels of $1000.

Squirrel Money does not fractionalise but has a reserve fund to cover unexpected losses.

“There needs to be transparency … there is concern generally around how much visibility are we creating and the degree of accountability needed," Bolton said.

He said there should be information more freely available about how the platforms were performing, their arrears and write-off rates.

“We should tell each investors about the individual loan they are in but where is the accountability at platform level to determine 'is this the appropriate way to invest, is peer-to-peer right for me'? What levels of disclosure should be provided into the market and what level of information is needed to help people decide peer-to-peer is the right thing? It’s higher level than individual loan disclosure.”

Bolton said investors would benefit from knowing how quickly loans were being approved and how often they were being refinanced out of the platform.

He said none of the peer-to-peer lenders were providing that information yet but it should be an industry goal.

Tags: Peer to Peer Lending Squirrel

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.15 2.35 2.75
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.29 - -
The Co-operative Bank - Owner Occ 4.40 ▲2.49 ▲2.89 ▲3.19
The Co-operative Bank - Standard 4.40 ▲2.99 ▲3.39 ▲3.69
TSB Bank 5.34 ▲3.30 ▲3.69 ▲4.04
TSB Special 4.54 ▲2.50 ▲2.89 ▲3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

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