SocietyOne is a Peer-to-Peer (P2P) lending company with headquarters in Sydney, Australia. It is the first P2P lender in Australia to fully comply with Australia’s Securities and Investments Commission (ASIC) as a provider of financial services and credit activities. As of 17 May 2013, SocietyOne was the only 'active' P2P lender in Australia and had originated AUS$1.47 million in consumer loans.

Description

About SocietyOne

SocietyOne is Australia's first fully compliant P2P lending platform. As a P2P lender, SocietyOne connects borrowers and investors in a secure, safe, professional online environment.

SocietyOne enables individuals to lend and borrow money to each other without the intermediation of a bank or financial institution. Qualified borrowers can request up to $30,000 in unsecured personal loans at competitive rates determined by their credit profile. Approved applications are listed on the platform for verified investors to assess and bid on. Once terms are agreed and accepted by the parties, SocietyOne handles the funds management and servicing of every loan on behalf of the matched borrowers and investors. Stringent procedures and processes ensure a safe and secure lending environment.

Unencumbered by the branch infrastructure, overhead and capital reserve requirements that drive up operating costs for traditional banks, SocietyOne uses its advanced proprietary technology platform to radically reduce the cost of originating, servicing, and funding of traditional loans.

The Company's philosophy is to exploit the structural mispricing and operating inefficiencies that exist in the traditional banking sector to bring borrowers and investors better rates. In essence, its goal is to reinvent the concept of the personal loan (http://www.lendacademy.com/societyone-review/).

Launch

SocietyOne is headquartered in Sydney, Australia and was launched in August, 2012. According to the company, its technology platform and online loan application and loan management solution - known as ClearMatch - allows it to operate more efficiently than a traditional bank. (http://www.moneymanagement.com.au/product-news/2012/societyone-launches-new-loan-platform)

On January 28, 2013, six months after launch, SocietyOne announced that it had reached $1 million in loan originations on its P2P platform (http://finovate.com/2013/01/societyone-achieves-1-million-in-loan-originations-on-clearmatch-lending-platform.html).

How The Platform Works

SocietyOne matches creditworthy borrowers with investors in a 100% online environment. Approved borrowers list their loan requirements, secure funds with no bank involvement and generally receive lower rates than through traditional loans. All loan activities can be viewed online, and payments are fixed on a fortnightly or monthly basis. There are no prepayment penalties or fees for paying off a loan early.

Investors get direct access to a new asset class, with the possibility to achieve above average yields when compared with other fixed income investments. Investors decide which loans to fund, how much to invest in each loan, and what interest rate to accept as a return. Loan portfolios can be diversified by spreading investments over many loans for different objectives and with different risk categories.

In general, the P2P process means lower interest rates for low risk borrowers and higher rates of return for Australian investors.

SocietyOne handles the funds management and servicing of every loan on behalf of the matched borrowers and investors. The company makes money through the collection of a one-time application processing fee from borrowers, as well as a service fee from investors.(http://anthillonline.com/how-p2p-lending-is-making-its-way-down-under)

Investors

The SocietyOne platform is currently open to all Sophisticated and Institutional investors, as defined in the Corporations Act 2001. (http://www.asic.gov.au/asic/asic.nsf/byheadline/Certificates+issued+by+a+qualified+accountant?openDocument)

SocietyOne is the trustee of the SocietyOne P2P Lending Trust. The trust is currently an Australian wholesale unregistered managed investment scheme and not currently registered with the ASIC. Until it is registered, investors in the Fund must be wholesale clients and Sophisticated Investors.

According to the company, the P2P platform will potentially be made available to retail investors by early 2014 (http://www.bankingday.com/nl06_news_selected.php?selkey=13614).

Unless specifically agreed with SocietyOne, the company will only accept loan applications and applications to invest from Australian-resident persons.

Borrowers

SocietyOne is targeting Australian consumers who have seen “disproportionately high” lending rates for a long time. (http://www.arnnet.com.au/article/434135/societyone_takes_big_banks_peer-to-peer_online_loans) According to the company, this is not a risk-adjusted pricing model. Instead, the most inequitable pricing under the current lending system is for people who have excellent track records (http://www.societyone.com.au/blog/blog/2013/03/14/afr-societyone-interview-online-credit-fills-gap).

Borrowers must have a strong and stable employment history and their credit track record is verified through Veda Advantage, an Australian credit records bureau. (http://www.societyone.com.au/blog/blog/2013/03/14/afr-societyone-interview-online-credit-fills-gap)

Compliance

SocietyOne is fully compliant with Australia's National Consumer Credit Protection Laws and ASIC's financial services laws. The company holds an Australian Credit License and are an authorised Financial Services Representative of Ironbark Asset Management Pty Ltd, the holder of an Australian Financial Services License.

SocietyOne is the first P2P lender in Australia to hold an Australian Credit License, as well as to employ conventional credit reporting methods. (http://anthillonline.com/how-p2p-lending-is-making-its-way-down-under)

To further protect the beneficial interests of investors in SocietyOne, the company has set up the SocietyOne P2P Lending Trust as the holder of the loan assets. As a bankruptcy remote vehicle, the Lending Trust is a flexible and transparent structure that helps protect the beneficial interests of SocietyOne investors at all times. SocietyOne assigned full Trustee services to Perpetual Limited, Australia’s largest independent funds manager and one of the country’s most experienced investment and trustee groups.

ClearMatch™

SocietyOne's proprietary ClearMatch™ technology platform is a mature, fully tested, loan origination, credit assessment and loan portfolio management solution. The platform has taken $10+ million in investment to develop to date. As a bank-grade platform, ClearMatch™ has managed more than $1 billion in consumer finance loans over the past 10 years under former licensing arrangements.

ClearMatch's™ SmartFund module and 3-minute mobile loan application and approval solution (in Beta stage) may be an advantage over other P2P lending services whose processes from application to loan funding might take several weeks (http://www.wiseclerk.com/group-news/countries/australia-key-take-aways-from-the-society-one-p2p-lending-app).

International Markets

SocietyOne's P2P consumer loans platform could eventually also expand beyond Australia into other markets in Asia-Pacific and disburse in local currencies. (http://www.arnnet.com.au/article/434135/societyone_takes_big_banks_peer-to-peer_online_loans)

Recognition

On January 23, 2013 comparison rate site Mozo recognised SocietyOne's Personal Loan as the Most Innovative Banking Product of the Year (http://mozo.com.au/blog/2013/01/most-innovative-banking-products-of-2013).

On February 5, 2013, Peter Renton, publisher and chief blogger at P2P lending site Lend Academy, wrote that SocietyOne might be "the most innovative P2P lender on the planet", after seeing a demo of ClearMatch's SmartFund module and the first mobile personal loan application and approval process, and learning about SocietyOne's groundbreaking plans to expand the loan book into multiple asset classes. (http://www.lendacademy.com/societyone-review)

In November of 2012, SocietyOne was voted "Best of Show" at the inaugural FinovateAsia in Singapore with its debut of its ClearMatch technology used to streamline the loan application process on a mobile phone. See the video here. (http://finovate.com/2012/11/our-first-finovateasia-wrapped-up.html)

SocietyOne

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