FMA licenses Lending Crowd as NZ's fourth peer-to-peer lender

Monday 12th October 2015

The Financial Markets Authority has licensed New Zealand's fourth peer-to-peer lender, Lending Crowd, which plans to offer small-to-medium sized enterprises business loans of up to $200,000.

The Auckland based business will launch its online platform, which matches borrowers with lenders, later this year, it said in a statement. As well as business finance it also plans to offer vehicle and personal loans. Pending success in New Zealand it will launch across Australia, with trademarks already secured across the Tasman.

Lending Crowd’s platform will manage loans of between $2,000 and $200,000, all secured by either a registered vehicle or vehicles, a second security of residential or commercial property, or a combination of both, the company said.

“We’re pleased to offer investors access to an investment asset class normally dominated by the big banks," Wayne Croad, managing director and owner said. "In particular we believe the SME finance market is ripe for disruption."

The operators are licenced under the new Financial Markets Conduct Act, which came into effect in April 2014, providing a regime to match lenders with borrowers, with a $2 million cap on the amount allowed to be borrowed. The licensing is part of the regulator's expanded brief to bolster New Zealand's capital markets but the new platforms do carry risks for lenders. Much of the licensing process has been ensuring platforms in both equity crowd funding and peer-to-peer lending inform investors of the risks and the regulator will continue to monitor businesses' compliance with their licences.

Harmoney, the first licensed lender, has facilitated $126 million of personal loans according to its website, operating since September 2014 as the country's only peer-to-peer platform. The peer to peer marketplace, whose shareholding investors include Heartland Bank and Trade Me, has flagged plans to expand into Australia this month.

Meanwhile, Squirrel Money is due to launch in October while LendMe said it would launch before Christmas with or without confirmation of a tie up with an unnamed trading bank which is still under discussion.

BusinessDesk.co.nz

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