New Zealand’s FMA publishes first peer-to-peer and crowdfunding statistical returns

The Financial Markets Authority (FMA) has just published its first statistical report on peer-to-peer lending and crowdfunding in New Zealand.

The data shows $259.9 million is currently loaned to individuals and $29.5 million loaned to businesses through peer-to-peer lending in the year ending 30 June 2017.

A total of $74.2 million was raised from investors through crowdfunding, including wholesale investors, in the same period.

The FMA requires peer-to-peer lending and crowdfunding licensees to submit information returns every year. This is part of their license conditions and helps us better understand the market.

The FMA is publishing the data in an interactive format in order to enable the industry, investors and the media to engage and interact with the statistics.

Garth Stanish, FMA Director of Capital Markets, said:

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.

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.

Peer-to-peer lending

Peer-to-peer lending matches people who want loans with people who are willing to fund those loans. The intermediary is the peer-to-peer lending service.

The data shows that 7,991 investors had open investments at the end of the period covered. 20,744 investors are registered with peer-to-peer lending intermediaries.

As at 30 June 2017 there were 7 licensed peer-to-peer lending services in New Zealand. One further licence has been issued since the data was collected.

The average value of a new loan issued in the reporting period was $8,771.

Of 16,977 outstanding loans across all risk categories, 1,469 are in arrears. 833 loans with a total value of $8.5 million were written off in the period.

Crowdfunding

Crowdfunding service providers act as intermediaries between companies offering shares and investors who want to buy these shares.

Many companies looking to raise funds will be start-up or early-stage businesses. Companies can raise no more than $2 million from the public in any 12-month period, although additional money can also be raised from sophisticated ‘wholesale’ investors.

Of the eight licensed crowdfunding providers, 5 facilitated offers during the reporting period. There were a total of 50 offers, with 34 successfully meeting their funding target. 263 potential issuers were declined.

1,597 investors invested in crowdfunding for the first time, with 2,331 investing through the crowdfunding system in the year.

The report covers the period to the end of June 2017. Since then, two crowdfunding operators have requested the suspension of their licence, which the FMA has agreed to. A full list of licensed crowdfunding operators can be found here.

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