New option for borrowers
Borrowers will soon be able to take out finance for a car using a peer-to peer service (P2P) that has been granted a licence to operate in New Zealand. The Financial Markets Authority (FMA) has granted its first P2P lending licence to online provider Harmoney. Peer-to-peer lending involves an intermediary charging fees for the use of an online platform that brings together lenders and borrowers. “It has great potential but lenders should also realise the risks are greater than putting money in a bank,” says Elaine Campbell, director of compliance at the FMA. “Lenders can lose money or not get the interest they expect if borrowers fail to repay the loans.” Harmoney chief executive Neil Roberts says the platform’s launch date isn’t far away and the company has a fully compliant online platform that automates the process of investing and borrowing. “We couldn’t be more excited to lead the charge and shake up the market with a competitive and technologically advanced investment and lending platform.” On its website, the company claims P2P lending is growing at 200 per cent annually and investment can see an average return of 12 per cent a year. Equity crowd funding and P2P lending became legal under the new Financial Markets Conduct Act, which passed into law in April. The FMA is also expecting to grant its first equity crowd funding licenses this month.
