DirectMoney unable to fully fund loan demand
Australia’s only listed P2P lender, DirectMoney, says it is unable to fully fund its loans and is asking borrowers if it can refer them to another lender.
Chairman Stephen Porges said it is still looking for institutional funders beyond the one it has – Macquarie Bank – to fund the loan demand it has.Until it gets more institutional money he said it does not have enough cash to lend to all the borrowers applying for loans via its website. “The company remains intensely focused on progressing loan sales to institutions and development of a funding warehouse. At the same time we are rolling out a strong marketing program for [its retail loan fund],” he said in a release to the market on Monday.
But he said without another institutional backer, it could not “release cash” to fund the existing demand for loans.
“To support our excess loan applicants we are establishing a referral arrangement to a trusted lending institution,” Mr Porges said.
“This referral arrangement is intended to provide a further option for our excess loan applications which cannot be supported by sale of loans to the [retail fund] or institutional investors.”
The company wouldn’t confirm whether the institutional lender is Macquarie Bank.
It is understood DirectMoney has to talk to each borrower and get their permission to refer them to the other lender due to credit licence rules and privacy regulations.
DirectMoney, which floated in July 2015, has $6.78 million in loans and $9.1 million in net assets on its balance sheet. Its business model usually requires it to sell all of its loans to investors.
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