FMA publishes benchmark P2P lending, crowdfunding figures

Crowdfunding platforms raised $74.2m from retail and wholesale investors, with 34 successful offers out of 50 in the year. Photo / 123RF

The Financial Markets Authority has released the first annual snapshot of lending through peer-to-peer platforms and equity raised via crowdfunding portals to give investors and firms a better handle on market trends.

The figures show individuals took out $121 million of new loans in the year ended June 30 through P2P platforms and businesses borrowed $31.5m with total loans outstanding at $259.6m and $29.6m respectively as at June 30.

Meanwhile, crowdfunding platforms raised $74.2m from retail and wholesale investors, with 34 successful offers out of 50 in the year.

"The flexible regime created by Parliament through the Financial Markets Conduct Act meant peer-to-peer and crowdfunding could be licensed and introduced in New Zealand quickly," FMA capital markets director Garth Stanish said in a statement.

"The FMA is committed to facilitating and encouraging innovation, provided the risks to investors are mitigated. We are also keen to publish data to enable companies and investors to understand the trends in different markets."

The introduction of the Financial Markets Conduct Act paved the way for a licensing regime of peer-to-peer lending and equity crowdfunding in what was an expanded brief for the newly-formed FMA to bolster New Zealand's capital markets.

The regulator collects data from licensed peer-to-peer lending and equity crowdfunding platform operators to inform its monitoring activities and plans to provide comparable year-on-year figures in future releases.

The data show peer-to-peer lending still pales in significance to the established lending channels, with $10.89 billion personal consumer loans with banks as at September 30 and a further $6.88b with non-bank lenders.

Business loans with banks totalled $101.61b as at September 30 and$4.59b with non-banks.

Peer-to-peer lenders had 16,977 outstanding personal loans and 92 business loans as at June 30.

In terms of asset quality, 1,469 P2P loans worth $20.4m were in arrears, or 8.61 per cent of total loans outstanding, while 833 loans worth $8.5m were written off.

On the other side of the ledger, 20,744 investors had registered with P2P services and 7,991 had open investments at the June 30 balance date.

Equity crowdfunding was comparable to New Zealand's angel investing community, which invested a record $69 million across 112 deals in 2016.

In context, some $2.13b of equity was raised by NZX-listed companies in the nine months through September 30, despite a relatively quiet year for initial public offerings.

The data show 2,093 investors used crowdfunding services in the year, and 263 potential issuers were rejected by the platform operators.