Heartland Bank, of New Zealand has taken up a 10% share for an undisclosed sum in the country’s only peer-to-peer lending platform HarMoney.
The P2P lending company received a license from New Zealand’s Financial Markets Authority in July, this year, to become the country’s first lending platform.
Heartland Bank says that the move is part of a broader strategy to occupy a leading position in niche markets through specialist offerings, which are different to traditional banks.
In conjunction with this, Heartland Bank is to provide a funding line to enable lending to a range of individual borrowers using the platform.
Heartland, formed from the merger of Canterbury and Southern Cross building societies and Marac Finance, has been chasing acquisitions outside of traditional banking to help grow earnings. In February the bank announced the acquisition of a reverse mortgage business from Seniors Money International for $87 million.
The bank has given HarMoney a huge boost after deciding to invest and Jeff Greenslade, chief executive, said the bank expects to invest a ‘meaningful amount.’
“We see it as a platform that gives us access to a customer base that we like anyway.
“We like the concept in terms of the UK and the US, we think the model has been proven to our satisfaction overseas and also the nature of the channel being online just adds another dimension to our strategy.”
Harmoney’s CEO and founder Neil Roberts has revealed that the company has now secured $100 million in lending capital from four funders including Heartland Bank, but has declined to name the other three. He described them as specialist peer-to-peer investment funds with some of the money coming from overseas.
"The facilities are mandated so that we can follow retail investment. This means that the majority of the funding is fractionalised," Roberts said. "Our system offers secured and unsecured, joint borrowing, SME loans and auto payout of debts for debt consolidation."
"There are four funders within the $100 million lending capital. No other consumer peer-to-peer platform, that I know of, has achieved institutional support of any scale prior to opening for business. This is a world first by Harmoney," said Roberts.