Beware the hype of peer-to-peer lending

16 February 2015

Many people may not realise that the customer-owned banks were the original peer-to-peer lenders.

While these groups welcome new entrants into the personal loans market such as Society One and RateSetter due to the competition they promise to bring to the market, COBA CEO Mark Degotardi has reminded consumers of the need for consumers to shop around to find the best value borrowing. Often, this comes from the customer owned banking sector.

Canstar’s database shows that customer owned banking institutions offer unsecured personal loans at interest rates lower than these new players, and much lower than the major banks (Canstar, 2 February 2015).

Mr Degotardi noted that with customer owned banks, members lend to members, and are able to offer more favourable terms. “What sets us apart from listed banks and other shareholder owned businesses, such as these new P2P players, is that we’re owned by our customers and that makes all the difference” said Mr Degotardi on Wednesday.