Harmoney’s $200 million launch
Australia is the new target of a Kiwi peerto-peer lender, writes Rob Stock.
New Zealand’s largest peer-to-peer lender has opened its doors in Australia with A$200 million to work with.
Harmoney launched in New Zealand in 2014, and since then has made over $410m of loans, with some money coming from ordinary investors seeking a better return than they can get at the bank.
Now the peer-to-peer (P2P) lender has begun lending to Brisbanites, in a launch that’s more than a year later than Harmoney once planned.
A spell of Australian economic weakness was one factor appearing to contribute to the delay.
There are several large P2P, or ‘‘marketplace’’ lenders in Australia already, including Ratesetter and Society One. But Harmoney Australia’s general manager Ben Taylor, says they are not the operations he hopes to win market share from.
‘‘Our focus is really on the banks, which own the majority of all the lending in Australia.’’
There was ‘‘quiet discontent’’ among Australians with banks, Taylor said. It was their A$100billion of personal loans and credit card debt that Harmoney would aim to win a share of.
While banks tend to have one rate for borrowers, regardless of how small a default risk they present, Harmoney has a more graduated lending scale, and can offer people with good credit records lower borrowing costs.
There was also discontent among Australian investors with low returns on their bank deposits, Taylor said, but initially Harmoney in Australia wouldn’t be advertising for Australian investors to fund loans.
Instead, it will make loans using money from large ‘‘wholesale’’ investors, including giant UKlisted P2P Global Investments.
It intended to begin advertising for ordinary investors in the near future, Taylor said.
The loans it will be making are consumer loans of between A$5000 and A$35,000. Many will be refinancing deals, where people borrow to pay off the likes of credit card debt.
Neil Roberts, founder of Harmoney, said: ’’When people have access to affordable money, they are in a better position to manage their financial affairs, which has all kinds of benefits including a better credit score.’’
‘‘Brisbanites own approximately 1.5 million credit cards at an average interest repayment rate of 22 per cent per annum per card, and the road to real financial health for everybody begins with facilities such as affordable debt consolidation loans.’’
‘‘For example, even at a personal loan rate of 12 per cent from Harmoney – Australian banks charge 14-15 per cent interest on personal unsecured loans – Brisbane locals could still save more than $26 million per month, and more than $313 million per year, collectively if they consolidate debt via Harmoney’s platform.’’
The delay to the Australian launch also coincided with a tough time for Harmoney in New Zealand, in which the Commerce Commission filed civil proceedings at Auckland High Court.
It asked the court to rule whether fees charged by Harmoney to borrowers fall under the auspices of the Credit Contract and Consumer Finance Act.
Harmoney has changed its fee structure, but the case is ongoing, which has angered Roberts, who said the Financial Markets Authority and the Commerce Commission had both been aware of Harmoney’s business model before it was granted a peer-topeer lending licence in 2014.
ACT leader David Seymour, has called for law changes to allow more flexibility.
Harmoney said the launch delay was the result of laying the groundwork for its business carefully.
‘‘We wanted to spend time ensuring we had the appropriate regulatory licenses and that we could provide a world class experience.’’
‘‘After 10 months of beta testing, the timing is now conducive for us to launch,’’ it said.