Peer-to-peer lender RateSetter has reneged on a deal to lend directly to guarantor George Banco’s customers, less than a month after they formed a partnership.
RateSetter and George Banco forged the agreement in May, coming on the heels of the p2p lender’s acquisition of Vehicle Stocking and Vehicle Credit.
The partnership with George Banco was designed to build relationships with lenders, following the termination of RateSetter’s wholesale lending originations.
In a post on its website, RateSetter announced its decision to pull out of the direct lending part of the George Banco deal, saying there were better uses of its resources.
RateSetter said: “After further examination of the infrastructure required to do this, we concluded there were better uses of our development resources which may be deployed more effectively to source other borrowers.
“Therefore we will not facilitate lending directly to George Banco’s customers, and accordingly we have updated our Principles of Lending document which sets out our lending criteria.”
RateSetter said the existing wholesale loans to George Banco, which amounts to £31.5m, will continue to be repaid in line with the schedule of the existing contracts. The lender did not incidate whether it would return to its previous policy of lending to George Banco, which would then lend to its borrowers.
The p2p lender appointed Joanna Wright, former chief risk officer in GE Capital’s UK operation to head its risk department in late May.