Melbourne FinTech startup MoneyPlace has launched after becoming just the second peer-to-peer money lender to attain a full retail and wholesale financial services licence from the Australian Securities and Investments Commission.
The startup, founded by former National Australia Bank executive Stuart Stoyan last year, will provide unsecured consumer loans from $5000 to $35,000, with rates starting at 8.9 percent. The rates are determined through risk-based pricing, with loans offered by wholesale and retail investors.
Stoyan said the platform aims to provide fairer rates for borrowers.
“For too long Australian borrowers have been penalised by the big banks, with their ‘one size fits all’ approach to personal loans at 15 per cent and credit cards at 20 per cent. At the same time they are penalising people for simply saving their money, even this month keeping deposit rates flat while raising mortgage rates, all ahead of announcing $30 billion in profit,” Stoyan said.
Once the platform has fully launched, a user interested in getting a loan will be able to simply detail how much they want to borrow, the duration of the loan, whether they would classify their credit as excellent, average, or poor, and select what the loan is for, whether it’s for a new car, home improvement, and so on.
Though it took “considerable time and effort” to gain regulatory approval from ASIC, Stoyan said it was encouraging to see the ASIC’s willingness to understand the MoneyPlace model and ensure it is properly regulated.
“This demonstrates ASIC’s readiness to work with startups and foster innovation in financial services while ensuring it protects the consumer.”
Rob Coombe, group CEO at Quick Service Restaurant Holdings, and Marcus Oakley, a former chief risk officer for GE Capital Consumer Finance, have joined the startup’s advisory board.
MoneyPlace is just the latest in a line of lending startups to launch or do big things this year. Most, however, have focused on lending to startups and small businesses.
Rocket Internet-backed Spotcap launched its Australian arm earlier this year, offering SMBs credit lines that make available to them amounts varying from $1,000 up to $100,000, from which they can then draw a loan. Startups apply for a credit line by providing Spotcap access to their cloud accounting software or their ecommerce store, for example, after which Spotcap’s algorithm will determine whether the business has been approved for a credit line and its terms. Melbourne startup Moula, which uses similar data to provide short-term capital of up to $100,000, closed a $30 million funding round in June.
MoneyPlace’s direct competitor as a peer-to-peer lender is SocietyOne, a startup founded in 2011 that counts James Packer and Rupert Murdoch among its investors. SocietyOne is the only other peer-to-peer lender to have attained a full licence from ASIC. Its last round of funding came in December last year, raising USD$21.13 million in a Series B round.
As it currently stands, MoneyPlace is letting borrowers and wholesale investors register their interest on the site. Once loan volume allows, the platform will also open to retail investors.