There’s a new player in New Zealand’s nascent P2P lending market.
Squirrel Mortgages is poised to launch a peer-to-peer consumer lending offering, having become the third platform in the region to secure a P2P license from the Financial Markets Authority (FMA). Squirrel’s platform is likely to become the market's second-mover, with a launch planned for the first week of September. The incumbent is rival consumer lending service Harmoney, which has been live since July 2014. LendMe also holds a P2P license, but it’s unclear when the platform plans to launch.
Squirrel Mortgages MD John Bolton has from the outset suggested a clear divergence between the Squirrel platform and the model employed by Harmoney.
Squirrel’s P2P service will offer both secured and unsecured personal loans of up to $70k. Borrowing rates will be determined via investor auctions. The platform will feature a provision fund – “Loan Shield” – which is the first mechanism of its kind to appear within the NZ market. Squirrel will charge flat fees – rather than percentage based fees – of NZ$250 for unsecured loans, or $500 for secured. The platform will also feature a secondary market.
Harmoney has barely been out of the spotlight since launching in the summer of 2014. Heartland Bank took a 10% shareholding in the company for an undisclosed sum of money in September 2014. The platform later raised NZ$10m in equity money in January, in a fundraise that saw it tie up with popular online trading marketplace Trade Me. Harmoney then revealed its institutional colours by raising $50m from the US-based Blue Elephant Capital Management. That $50m was part of a larger $100m debt capital fundraise, which also saw Heartland Bank participate.
Mr. Bolton, on the other hand, is looking to strike out on the P2P purist route:
“Squirrel Money will connect borrowers and lenders together. Unlike other P2P offerings in the market, we aren’t funded by a bank to deliver a bank-style offering. All our loans will be genuine ‘person to person’ loans.”
“We want to stay true to the ethos of person-to-person lending and social entrepreneurship and, if international experience is anything to go by, this is an exciting time to be in the P2P space.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.