Growth for federation

New data has revealed that Kiwis are embracing choice when it comes to financial services, with almost half of personal consumer lending in New Zealand being financed by non-bank lenders.

The findings were released in the latest annual report of the Financial Services Federation (FSF), which represents responsible and ethical finance and leasing companies operating in Aotearoa.

This comes after a significant year of growth for the organisation, which has seen a membership increase of 24 per cent in 12 months. The FSF’s 81 members include the likes of Protecta Insurance, Provident and Toyota Financial Services.

The data was collected in an FSF member data-gathering exercise performed by KPMG.

It shows 47 per cent of personal consumer loans, excluding mortgages, in this country is financed by the non-bank sector represented by the federation’s members.

“While the FSF does not offer membership to all non-bank lenders, the growth in membership means we’re likely looking at the most complete non-bank lending data available to date in New Zealand,” says executive director Lyn McMorran, pictured.

“It solidifies what we have already known for a long time – that the non-bank sector is seeing remarkable growth and has established itself as a compelling alternative to traditional banks for consumer and business lending.”

Responsible lending insights were also revealed in the data, showing a 24 per cent decrease in customer arrears from 5.8 per cent in 2016 to 4.4 per cent in 2021.

“We were pleased to see an overall loan-approval rate of 55 per cent. This shows our members are demonstrating careful consideration to ensure loans are provided responsibly and on a ‘quality over quantity’ basis.”

Click here to download the FSF’s annual report for 2020/21.