What is GraduRates?
Founded in 2012 by Jothan Webb, GraduRates is a peer-to-peer lending platform that offers loans for postgraduate study.
They had sourced some very sound loans, helping students fund their education ahead of their move into employment.
Why are RateSetter taking on GraduRates' loan book?
GraduRates has decided to run down its operations ahead of the impending regulation of the industry by the FCA and wanted to ensure uninterrupted service to its customers. The number of loans is not large at all but Jothan wanted to ensure every last customer received proper service.
We spoke to GraduRates and agreed to take on the customers, making sure the borrowers were made fully aware of what was going on every step of the way and also making sure they remained in exactly the same position.
Rhydian Lewis, RateSetter CEO and co-founder, highlights the acquisition and wider benefits to the peer-to-peer industry:
"This is a sign of the peer-to-peer lending industry growing up. One of the things the Government is focussed on in the upcoming HMT Consultation on peer-to-peer ISAs is the ability for platforms to wind down in an orderly manner. This agreement between RateSetter and GraduRates will serve as a welcome example of the peer-to-peer market finding solutions that work in the best interests of customers."
New markets for RateSetter
The acquisition of GraduRates loan book gives RateSetter insight into a valuable subset within the lending market. Part of our business development mandate is to continue to extend into other, complementary markets and offering students loans for education is an area we'll now be able to build on.
Positive learnings for the future
With the P2P market growing at such pace and many new entrants joining, consolidation is inevitable and it is vital platforms are able to do so in a seamless manner without impacting customers.
This deal is a landmark example of how two platforms, GraduRates and RateSetter, can work together for good customer outcomes with the former winding itself down in an orderly way and the latter able to offer the high standard of service customers now expect of peer-to-peer platforms.