Peer lender to aim for SME market

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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. As well as business finance it 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 $2000 and $200,000, secured by either a registered vehicle or vehicles, a second security of residential or commercial property, or a combination of both, the company said.

Managing director and owner Wayne Croad said, "We're pleased to offer investors access to an investment asset class normally dominated by the big banks.

"In particular we believe the SME finance market is ripe for disruption."

The operators are licensed under the new Financial Markets Conduct Act, which came into effect in April last year, providing a regime to match lenders with borrowers, with a $2 million cap on the amount that can 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 this month while LendMe said it would launch before Christmas.