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Alternative capital pathways on the up: FMA reports

NZ’s peer-to-peer lending and equity crowdfunding sectors experienced steady growth in the last year, according to data from the Financial Markets Authority.

Friday, March 5th 2021, 6:18AM

Alternative pathways to capital through P2P and crowdfunding providers is seeing growth in New Zealand, according to an FMA report.

The FMA’s statistical report for the year ended June 30, 2020 covers activity by licensed P2P and crowdfunding providers that supply annual information returns to the FMA.

Registered investors on P2P platforms now number more than 34,000. While the number of investors with open investments increased slightly to 12,800, the total amount of outstanding loans on the lending platforms' books was $624 million. Up 8% over the year from 2019-20.

The levels of increase are substantial, especially when compared to 2017 which saw 8,000 open investments and approximately $360 million in outstanding loans.

Harmoney remained the largest P2P lending service provider in the year, accounting for more than half the industry’s outstanding loans. It stopped accepting retail lenders in April 2020, which will have an impact in subsequent years’ annual data returns.

In the crowdfunding space providers raised $16.5 million from retail investors in the year to June 2020. A 20% increase from 2019. Licensed crowdfunding platforms introduced 25 successful offers, compared to 19 in the previous year. Users of the licensed service in 2020 numbered 5,300 investors.

The total money raised by crowdfunding platforms was $34 million, including from retail and other wholesale investors.

According to Sarah Vrede, the director of capital markets at the FMA, the report shows a stable level of participation in a relatively niche sector of New Zealand’s capital markets.

“One of the main intentions of the Financial Markets Conduct Act is to promote innovation and flexibility in New Zealand’s capital markets.

“Peer-to-peer lending services provide an alternative form of borrowing and fixed-income investment, while equity crowdfunding services provide an alternative pathway for companies to raise capital in a cost-effective manner. 

“The data released today shows continued interest in these sectors as they mature,”

The number of retail investors participating in equity crowdfunding offers jumped 47% on the previous year to 5,374 – with a noticeable increase in smaller value investments.

Vrede stated that, “A consistent trend has emerged that crowdfunding investors are generally first-time users of a platform, which may suggest investors have targeted interest in the specific company raising capital.”

Capital raised by licensed retail investors in 2020 was 38% higher than 2017.

Read the report in full HERE:

Tags: FMA P2P

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Lender Flt 1yr 2yr 3yr
AIA 4.55 ▼2.25 2.59 ▲2.89
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 ▼2.25 2.59 ▲2.89
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 2.89 3.19 3.39
BNZ - TotalMoney 4.55 - - -
Lender Flt 1yr 2yr 3yr
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.40 3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - 2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.79 2.99 3.29
SBS Bank Special - 2.29 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
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TSB Bank 5.34 3.09 3.29 3.45
TSB Special 4.54 2.29 2.49 2.65
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Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
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Westpac Special - 2.29 2.69 2.79
Median 4.55 2.73 2.99 2.89

Last updated: 23 April 2021 8:50am

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