More Than £1/2 Million Lent Through RateSetter in First Month of Operation

Online, November 9, 2010 (Newswire.com) - New peer-to-peer lending site RateSetter.com has lent £612,984 since it launched on 7th October, far surpassing expectations. More than 1,500 customers have registered in the first month, highlighting the strength of consumer demand to find an alternative to the banks in order to earn higher rates of return on their savings.

Interest rates on the site have offered considerably better value than those on the high-street. On average, 6.8% was available for savers in the 36-month market, with a high of 7.2% and a low of just 6.3%.

The average rate in RateSetter's unique rolling monthly market has been 3.7%, peaking at 4.9% and dipping below 3.0% for a short time due to a sudden influx of lenders. RateSetter is a market and customers set the rates, so fluctuations like this in the early days are to be expected.

Just 15% of borrower applications have been approved by RateSetter over the month of operation, though this figure is expected to rise as more creditworthy borrowers come to the site. RateSetter expects rates for savers to increase in both monthly and 36-month markets over time as the number of approved borrowers on the site increases.

In addition to this cautious approach, lenders have expressed support for RateSetter's 'Provision Fund', a separate pot of money into which borrowers pay a fee based on their creditworthiness. This fund is used to compensate lenders in case of default, though in the first month of operation there have been no missed payments.

RateSetter founder and CEO Rhydian Lewis said: "We have been delighted by the level of interest so far. The amount lent and number of people registering to use the site has been beyond our expectations for where we would be at this stage.

"The feedback tells us that lenders want market-beating returns whilst having their risk protected. That is exactly what we have done, at the same time providing a platform that is simple to use and considerably speeds-up the process of matching savers with borrowers.

"The response from customers in our first month has been phenomenal. We are also seeing repeat lenders as well which is great - people trying out small amounts and then increasing their investments."

David Hopper, a 55-year-old market research consultant from Surrey who has lent on the site, said: "The website is beautifully clear and simple to use. It feels transparent, so if you are worried about an issue you can find the information that reassures you that it is a credible and safe place."

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About RateSetter: (www.RateSetter.com)
RateSetter is a peer-to-peer (P2P) money market, allowing people to lend and borrow money directly with each other, setting their own interest rates and not being forced to take a rate set by a bank. RateSetter will cut the cost of borrowing and enable those already in debt to get out of it quicker, while at the same time increasing returns for savers. For borrowers there are no penalties for early repayment of a loan.

RateSetter was launched in September 2010 and is available to customers throughout the United Kingdom. Savers can invest as little as £100. RateSetter uses industry-leading fraud prevention and credit checking services, and has created a Provision Fund to further protect savers.

RateSetter is licensed by the Office of Fair Trading, the body responsible for consumer finance in the UK. RateSetter is a member of the Consumer Credit Trade Association and the fraud prevention agency, CIFAS.