Cheap credit drives lender

Townsville Bulletin - - NEWS - TONY RAGGATT

LOW in­ter­est rates and volatile share and prop­erty mar­kets are pro­vid­ing the “per­fect plat­form” for a boom­ing Townsville in­vest­ment com­pany.

In­vestors Cen­tral, whose sub­sidiary Fi­nance One lends money to peo­ple na­tion­ally want­ing to buy a car, has re­ported a 44 per cent in­crease in its num­ber of in­vestors in the past year. Man­ag­ing di­rec­tor Jamie McGeachie said with the on­go­ing fall­out from the Greek debt cri­sis, its busi­ness was on track for con­tin­u­ing record growth.

“The state of Aus­tralia’s credit and in­vest­ment mar­kets have re­ally cre­ated the per­fect plat­form for the busi­ness to boom,” Mr McGeachie said yes­ter­day.

“Aus­tralia’s de­creas­ing rates mar­ket, talk of a hous­ing bub­ble and the volatil­ity of global shares on the back of the Greek debt cri­sis have all com­bined to cre­ate the per­fect con­sumer mar­ket for our busi­ness.”

One of its in­vestors, well­known Townsville busi­ness iden­tity Daryl Holmes, said he had backed the com­pany as “good- value in­vest­ment” and be­cause it also pro­vided a worth­while com­mu­nity ser­vice.

“Ev­ery­thing has some risk but In­vestors Cen­tral is grow- ing and per­form­ing well and is pro­vid­ing a good com­mu­nity ser­vice,” Mr Holmes said.

“Ev­ery­one, ba­si­cally, needs a car. To me, that’s a good­value in­vest­ment and there are good re­turns.”

While term de­posits in banks are pay­ing as lit­tle as 3 per cent, In­vestor Cen­tral’s fixed- term in­vest­ments are pay­ing be­tween from 9 to 16 per cent. Its write- offs for bad debts, cur­rently about 4 per cent, are well be­low its tar­get range of 7 to 9 per cent of writ­ten in­come. In­vestors Cen­tral was es­tab­lished in Townsville in 2011 and has grown its loan book from less than a $ 1 mil­lion to more than $ 32 mil­lion.

Aus­tralia is not ex­pected to suf­fer from Greece’s debt prob­lems but Mr McGeachie said its im­pli­ca­tions for the Euro­pean Com­mis­sion were weigh­ing on in­vestor sen­ti­ment.

“In Aus­tralia, we have a grow­ing num­ber of high net­worth in­di­vid­u­als and, since the GFC, a strong cul­ture of pri­vate and na­tional sav­ing,” Mr McGeachie said.

“This has led to a greater in­ter­est in in­vest­ments with less ex­po­sure to risk.”

The un­listed pub­lic com­pany raises cap­i­tal to in­vest ex­clu­sively in the na­tional car loans mar­ket and has achieved strong growth in rev­enue and profit on the back of sus­tained growth in na­tional ve­hi­cle fi­nanc­ing since 2010.

Pic­ture: EVAN MOR­GAN

RECORD GROWTH: In­vestors Cen­tral man­ag­ing di­rec­tor Jamie McGeachie.

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