Online lender Harmoney is said to be eyeing a possible listing on the ASX - joining a queue of other Kiwi tech companies looking to list across the ditch.
The former peer-to-peer lender has hired Kiwi investment bank Jarden to help scope out its funding options.
An initial public offer is one option on the cards although Harmoney could instead choose to undertake a private fundraising round as it did in October last year depending on the appetite of investors.
Last year it raised close to $47 million through a combination of a series C funding round, which raised $25m from two investors - Australian private equity firm Kirwood Capital and a private institutional investor in New Zealand - and $21.9m through a corporate debt facility with an Australian investment fund.
Harmoney is said to be looking to raise A$60m this time around with the money used to reinvest back into the business to grow its business in Australia which is still at an early stage.
Harmoney's chief executive David Stevens said in its recent annual report that it estimated Australia's personal loan market to be more than eight times larger than New Zealand.
The company made a $15.4m loss for the 15 months to June 30 but that was largely due to it switching from a peer-to-peer lending model to using on-balance sheet term lending.
The move meant it had to provision for future credit losses in its current accounts under the IFRS accounting standards. Of the $8.89m provisioned only $2.5m was an incurred impairment loss on a loan book of $136m.
Harmoney says its lending has surpassed $1.7 billion and it has almost 50,000 customers in New Zealand and Australia.
Stevens noted its growth trajectory with the company, which launched in 2014, taking four years to reach $1b in lending but only 12 months to lend the next $500m.
If it goes ahead with an ASX listing it would likely happen before the end of this year with the IPO window said to be open until around November.
The ASX is proving to be popular with New Zealand tech companies with Kiwi buy-now-pay-later firm Laybuy expected to IPO shortly and mobile software engagement business Plexure also signalling plans to list on the ASX.
Australia's deep pool of investors with its A$3 trillion worth of superannuation assets is attractive while its growing number of technology companies means it is developing a reputation as the Nasdaq of the South Pacific.
The potential impact of Covid-19 on people's abilities to service their debts has made it tougher than ever for lenders to forecast credit losses and for auditors to assess whether management has undertaken an accurate assessment of those potential losses.
In Geneva Finance's annual report, filed to the NZX late Friday, auditors Baker Tilly Staples Rodway noted that valuation of finance receivables was a key audit matter due to the size of the assets and the "subjectivity, complexity and uncertainty inherent in the recognition of impairment".
"Management has prepared impairment models to complete its assessment of impairment for the group's finance receivables as at 31 March 2020.
"This assessment involved complex and subjective estimation and judgment by management on credit risk and the future cash flows of the finance receivables."
The auditor noted they had addressed the issue through taking seven different actions.
That included evaluating the design and effectiveness of key controls over loan origination, selecting a representative sample to look at more closely and "challenging and evaluating management's logic, key assumptions and calculation of its expected credit loss models against NZ IFRS 9 for recognising expected credit losses on financial assets."
Kiwibank's auditors PwC also noted provision for credit impairment as a key audit matter in its audit of the bank's financial statements this week.
"We considered this a key audit matter due to the subjective judgments made by the
Banking Group in determining the timing of recognition and the level of allowances for
expected credit losses..."
PwC noted expect credit loss models were inherently complex and a number of assumptions had been made by the bank concerning the inputs to the credit loss models.
"Further, the rapidly developing Covid-19 pandemic has meant assumptions regarding
economic outlook and the consequent impact on the Banking Group's customers is uncertain, increasing the degree of judgment required to be exercised in calculating the ECL (expected credit loss).
"Specifically, this includes judgments regarding the impact of Covid-19 on forward-looking information, including variables used in macroeconomic scenarios, their associated weightings and the level of additional provision overlays required."