In April Plenti^ passed the significant milestones of 10,000 investors and $250 million in loans, with the number of registered investors doubling in the prior 12 months.
Recent research amongst our investor base has found that long-term customers of the Big Four Banks, Australian mums and dads, are diverting millions of dollars away from traditional investment options into investing* in consumer loans. The research found that 61% had withdrawn money from high-interest savings accounts and 28% had withdrawn funds from term deposits to invest in consumer lending, with the amount invested by its Gen X investors increasing by 14% over the last 12 months and the average investment now sitting at close to $40,000**.
More money in your pocket
Commenting on this Daniel Foggo, CEO of Plenti Australia said, “In the current climate, Australian consumers are looking for alternatives. Our rapid growth is proof that people, looking to earn investment returns or borrow money, are realising consumer lending can help put more money in their pocket.”
Table 1: Average amounts invested and matched rate***
|Segment||Average investment amount||Aveage interest rate after fees (p.a.)|
|Gen X (post-millennial)||$37,266.64||7.40%|
Based on an analysis of our data, millennials make up the greatest number of registered investors at just over 6,000 and are most likely to be focused on the shorter-term lending markets. The one-month market has proven very popular, with 27% of millennials looking to this market for a short-term investment.
Gen X snap up green investments
The average rate received by investors in the one-month market over the last three months was 3.2% p.a. while investors in the one and three-year markets were matched at an average of 4.0% p.a. and 7.6% p.a. respectively over the same period. Gen X has also taken up Plenti’s green loan marketplace in higher numbers than any other demographic since its launch in 2017.
Table 2: Where investors are withdrawing funds to make consumer lending investments
|Bank savings accounts||61%|
|Bank term deposits||28%|
|Residential or commercial property||11%|
|Corporate bonds or bank hybrid||4%|
The $250 milestone caps off a highly active 12 months for Plenti. In June, we established a $20 million green loan funding partnership with the Government’s Clean Energy Finance Corporation; in September completed a $10.5 million fundraising led by leading private equity investor 5V Capital, and in December appointed former ING Direct CEO Vaughn Richtor as Chair of the board.
An investment in the RateSetter Lending Platform is not equivalent to an investment in a bank account. Most notably, it is not covered by the Financial Claims Scheme. As always, you should read our Product Disclosure Statement before investing in the RateSetter Lending Platform.
^Plenti was known as RateSetter prior to August 2020.
* Research based on December 2017 survey of Plenti lenders
** The average amount invested by Gen X investors with Plenti is $37,267.
*** Average amounts invested and average matched rates based on active investors are currently or have previously had funds matched to borrowers through the RateSetter Lending Platform
# Lender rates are displayed on an annualised basis and net of applicable fees. Lender rates assume payments received are continually reinvested at the stated rate and assume the investment is protected by the Provision Fund in the event of any borrower late payment or default, however, there is no guarantee nor warranty as to any protection from the Provision Fund. See our Product Disclosure Statement for further details.
This information does not constitute financial advice and you should consider whether it is appropriate to your circumstances before you act in reliance on it. Any opinions, forecasts or recommendations reflect the judgement and assumptions of Plenti as at the date of publication and may later change without notice.