MoneyPlace on track to open its portal this quarter

The latest entrant into Australia's peer-to-peer lending market, MoneyPlace, has confirmed that it expects to start trading in the June quarter, when it will join SocietyOne, RateSetter and ThinCats.

MoneyPlace chief executive Stuart Stoyan said he disagreed with the idea that was only room for two or three players in the market.

Stoyan said: "In the US, Lending Club and Prosper Marketplace are the dominant P2P lenders but there are lots of niches in areas such as student finance and SMEs. The market is large and it is no different here."

He estimated that total Australian P2P lending to date was around A$20 million to $25 million, with SocietyOne accounting for $15 million to $20 million, RateSetter accounting for $2 million and ThinCats $1 million.

MoneyPlace will target the personal loan market, with loans starting at $5000 on three-year fixed terms.

Its lending platform will process an application through to approval in ten minutes and deliver the money the next day.

Investors will carry the credit risk, although MoneyPlace will have a collections operation.

Stoyan said the company would price for risk, using credit scores as well as data collected from social media sites and others sources to do its credit assessments. He said assessments would be based on a richer collection of information than banks used.

"Our proposition is that pricing for risk is fairer," he said.

P2P lenders have to deal with a high level of regulatory uncertainty - a point that was underlined at last month's Australian Securities and Investments Commission annual summit, where there was plenty of discussion about the appropriate degree of regulation of innovative financial models.

Stoyan said he was encouraged by ASIC's move to establish an innovation hub to help start-ups navigate the regulatory system.

"We are in constant discussions with the regulator. ASIC's position is that competition and innovation are good things. It is still looking at how it will regulate the industry but it is working with us on that question," he said.

In the wake of the Cash Store judgment, commentators have suggested that the automated lending platforms that companies like MoneyPlace use will come under increasing scrutiny.

Stoyan said the problem was not automated systems of themselves but how well lenders ensure their accuracy, monitor their performance and carry out follow-up analysis.