Consumers’ reluctance to take on new personal debt during the pandemic has put a dent in the growth ambitions of recently-listed consumer lender Harmoney.
The company issued its first financial report since listing on the ASX in November, revealing a 28 per cent drop in originations in the six months to December.
As a result, the loan book fell 6 per cent to A$468 million, compared with the previous corresponding period, and interest income was flat. The company made a loss of $2.8 million for the six months.
Harmoney does the bulk of its business in New Zealand, where it was founded in 2014. It originated $151 million of loans in NZ and $43 million in Australia.
The company said business picked up in the December quarter, after a very slow September quarter.
It paid an average funding rate of 6.7 per cent during the half, down from 7.3 per cent in the previous corresponding period, and charged an average interest rate of 17.4 per cent.
The impairment expense was $8.7 million, representing 3.7 per cent of average gross loans.
Harmoney sells direct to consumers, originates online and has what is calls an “automated loan approval system underpinned by a scalable proprietary technology platform. Borrowers typically get their money in 24 hours.
It does not work with brokers but it has commercial relationships with comparison sites, including Finder, Mozo and RateCity to support its digital marketing strategy. And it works with Google, using the Google Smart Bidding machine learning system to attract consumers.