Peer-to-Peer Lending Sees Resurgence in New Zealand Market

Peer-to-peer lending in New Zealand is witnessing a revival, with both established and new players making significant strides in the market. After a period of stagnation, Lending Crowd has announced its relaunch, while Go Lend has exceeded its first-year targets by surpassing $15 million in its investment portfolio.

Peer-to-peer lending initially emerged in New Zealand in 2014, promising to transform the financial landscape by connecting borrowers directly with investors, thus bypassing traditional banks. By 2017, the Financial Markets Authority had licensed eight peer-to-peer services, attracting over 20,000 registered investors. Despite early enthusiasm, the sector struggled to gain traction, leading to the closure of notable platforms like Harmoney in 2020 and Lending Crowd’s exit in 2023.

Recently, the momentum in the peer-to-peer lending market has shifted. Lending Crowd, under the leadership of managing director Wayne Croad, is re-entering the fray, reopening its platform to borrowers and planning to welcome investors back soon. Croad noted that regulatory changes, such as the introduction of the Depositor Compensation Scheme and the anticipated open banking framework, have created a conducive environment for renewed growth.

“The Government has made it clear it wants non-bank lenders to step up, innovate, and compete,” Croad stated. He emphasized the importance of technology in evolving their platform for a digital future. As Lending Crowd prepares to introduce new products, including first mortgages, it aims to align its interests with those of retail investors by sharing both risks and rewards.

The renewed interest in peer-to-peer lending is also evident at Go Lend, a new entrant focusing on secured property loans. Chief executive Luke Jackson reported that the platform has acquired over 400 customers since its launch in December 2024. Jackson pointed out that the market has shifted towards secured loans, meeting the growing demand for investment options that provide both returns and security.

“We saw a gap in the market for this type of offering,” Jackson explained. “Our platform allows investors to participate in property-secured loans with solid, fixed returns.” He noted that investors can buy portions of loans starting from as little as $1,000, making these opportunities more accessible.

Despite the overall decline in the peer-to-peer sector, Jackson expressed optimism about the future. He believes that as economic conditions improve, more loan opportunities will arise, allowing Go Lend to expand its customer base to between 1,500 and 2,000 by next year.

Within the eight licensed peer-to-peer lenders in New Zealand, only three others remain active: Squirrel, Southern Cross Partners, and Zagga. Squirrel, which began its peer-to-peer lending operations in 2015, has grown to manage over $500 million in investor funds, originating nearly $650 million in loans last year through its platform. Founder and group head of property finance, John Bolton, acknowledged the challenges of scaling in New Zealand’s market but highlighted that their model has adapted to include managed funds.

Bolton also pointed to the rise of decentralized finance (DeFi) as a transformative force in the financial landscape. He stated that while New Zealand has been slow to adopt these changes, the country is likely to see more businesses adjusting to the evolving financial environment.

Overall, the resurgence of peer-to-peer lending in New Zealand reflects a growing appetite for alternative finance solutions. With established players revitalizing their offerings and new entrants emerging, the sector may be on the cusp of a significant transformation. As the landscape continues to evolve, investors and borrowers alike are poised to benefit from increased competition and innovation in the financial space.