Peer-to-Peer lender Harmoney will expand into lending to small businesses next year.
Since its launch in July the firm has processed $4.5 million of consumer loans and its average loan size on the site is about $14,000, with an interest rate of about 18-19%. It is the first P2P company to be licensed by the Financial Markets Authority. Harmoney has also secured a large amount of institutional investment. This includes a $50 million investment from US based Blue Elephant Capital Management.
Neil Roberts, CEO of Harmoney, expects the platform to facilitate $100 million in personal loans over the next 12 months but believes that business loans will quickly gather steam and become a significant part of the company.
The companies that they will focus on lending to will be small businesses that are making the transition from being someone’s personal venture into an established business. Roberts believes that "A lot of those guys aren't served well at the moment." He expects that Harmoney will be able to facilitate loans to such companies at interest rates in the low teens. Roberts hopes that the New Zealand government may follow the lead of the British government in the help that it provides to small businesses – ideally in the form of investing capital through P2P lenders such as Harmoney.
The Kiwi Peer-to-Peer lending space is currently very small in terms of volumes but is poised for rapid expansion. Wayne Croad, the Managing Director of Finance Direct, recently announced that he is planning on registering an application to licence a new peer-to-peer lending platform by the name of Lending Crowd. He is expecting to launch in February or March next year. This is a forward-thinking expansion from Finance Direct – which has traditionally offered auto, property, personal and business loans.
Mr. Croad weighed in on Harmoney’s achievements up to now:
"I take my hat off to Harmoney getting out there first and doing what they've done because it's not as easy as what it looks from a face value point of view. There's a lot of technical aspects to it (P2P lending), and getting it right and making sure risk is managed for investors, and borrowers have a competitive offering."