Fourth P2P lender licensed in New Zealand

New Zealand’s peer-to-peer lending sector is heating up after Lending Crowd has been granted its licence from the Financial Markets Authority (FMA) today.

In December 2014, Harmoney became the first peer-to-peer lending platform to receive a licence from the Financial Markets Authority in New Zealand. After just a few months, other platforms followed suit, such as the peer-to-peer consumer-lending platform LendMe and Squirrel Money, although neither the former nor the latter is yet operating.

Today, the peer-to-peer lending platform Lending Crowd has become the fourth P2P lender to secure a licence in the country.

Having evolved out of independent financier Finance Direct, Lending Crowd’s prime focus is to lower the cost of borrowing money. It plans to facilitate loans of between $2,000 and $200,000 for small and medium sized businesses (SMEs), vehicles and personal loans for three and five year terms. The loans will be secured by a registered vehicle, a second security on residential or commercial property, or a combination of both.  

Wayne Croad, Lending Crowd’s Managing Director, claimed:

“We know from experience business owners have a lot of frustration at the unnecessary bureaucracy when trying to access funds from big banks to purchase assets, obtain working capital or fund business expansion.”

Furthermore, Mr Croad believes that the financial services market is ripe for disruption, highlighting that the traditional banking system is obsolete and too expensive.

“Banks and other finance companies have a one interest rate fits all approach to borrower risk, which is unsuitable for most. Borrowers and investors are also paying for bloated overhead structures, such as bank branches, through inflated or deflated interest rates. These are now completely unnecessary and effectively expensive billboards.”

Lastly, Mr Croad announces his plans to expand the business into Australia, once it is successfully up and running in New Zealand, having already secured the appropriate trademarks. Though the New Zealand market may be starting to heat up, Mr Croad says there is plenty of room for new players. Will we see other platforms emerging soon?