Harmoney Limited is a New Zealand and Australian lending service which originally started with peer-to-peer lending but no longer serves retail investors. It is headquartered in Auckland with offices in Sydney. Harmoney operates by connecting individuals who want to borrow with individuals who want to invest. Harmoney provides unsecured personal loans up to $70,000 on a range of terms and competitive interest rates. Launched in September 2014, Harmoney was the first licensed provider in New Zealand after peer-to-peer lending and crowdfunding were enabled on 1 April 2014, following the passing of new financial legislation in New Zealand.
History
Harmoney was founded in late 2013 by Neil Roberts who became CEO of the new company. Roberts is the primary share owner of Harmoney. Icehouse holds a 2% stake, while Heartland Bank announced it had taken a 10% stake in the platform for an undisclosed sum in September, 2014. Trade Me announced in January 2015 it had acquired a 15% stake for $7.7 million. Trade Me appointed CFO Jonathan Klouwens to join Harmoney's board of directors. Harmoney launched on 10 September 2014, after it had obtained a licence by the Financial Markets Authority on 8 July 2014. The company said it had NZD $100 million available to lend from four main investors. One main investor was revealed to be Heartland bank, but Harmoney has declined to disclose the remaining three. In June 2016, Harmoney announced that it had generated 8.6 million in revenue for its first full year of operation. This was a loss of $14.2m for the full year, as it continues to invest and grow staff numbers.
Business Model
Harmoney enables borrowers to apply for personal loans through its website by providing details about themselves and the loan they would like to apply for. Loans are unsecured, and can be between $2,000 - $70,000 for three or five-year terms. Harmoney determines the creditworthiness of a borrower on the basis of their credit history, their income, debt and requested loan amount. Applicants are assigned a risk grade and associated interest rate according to Harmoney's scorecard, which grades loans on a scale from A to F. New Zealand residents aged 18 or older with a valid New Zealand driver's licence or NZ Passport are eligible to invest or apply for a loan through Harmoney. Loan interest rates range from 6.99% to 29.99%, with bad debts averaging 3.05% of total money borrowed as at December 2017. Investors can browse the loans listed on Harmoney's website and select loans based on criteria including loan amount, loan purpose, and loan grade. Harmoney fractionalises loans into $25 "notes", enabling investors to choose how many notes to invest in each loan, with a minimum deposit of $500 into your account. Investors earn money from interest and receive repayments from borrowers as they are made, proportionate to the percentage of the loan total they funded. Harmoney makes money by charging a platform fee to borrowers and a service fee to investors. The platform fee amount varies from 2% to 6% depending on the borrower's credit grade, while the service fee is 1.25% on all amounts the borrower pays.. Borrowers pay either $200 or $450 if their loan is successfully funded.
