The Financial Markets Authority (FMA) has given the first service license to peer to peer lender Harmoney.
Legislation introduced earlier this year means companies can raise as much as $2 million a year through peer to peer lending or through crowdfunding.
Harmoney says its official launch date isn't far away and in the meantime it will fine tune its systems and its lending platform.
"Harmoney has a fully compliant online platform that automates the process of investing and borrowing, says Harmoney CEO Neil Roberts says.
He adds Harmoney launched a similar business with over $3 billion in loan applications processed from the startup phase and prior to the sale of the business to GE Money.
The FMA says peer to peer lending brings new opportunities for borrowers and lenders, but it also stressed the investment risks.
“FMA’s role is to regulate the companies providing peer-to-peer lending services. The service has great potential but lenders should also realise the risks are greater than putting money in a bank. Lenders can lose money or not get the interest they expect if borrowers fail to repay the loans," says Elaine Campbell, FMA’s director of compliance.
“To meet the required standards, service providers must provide clear disclosure for lenders and have fair, orderly and transparent processes around how they deliver their service. Applicants must also demonstrate they’ll meet minimum standards of conduct. We are available during the process to help potential licensees understand their obligations,” she says.
Crowdfund Insider recently reported that Kiwi crowdfunding platform Snowball Effect was in the late stage of being licensed and would have at least two listings at launch, with Renaissance Brewing and Rippr the inaugural listings.
Rippr, a crowd loyalty venture, says on its Facebook page it will be focused on an equity crowdfunding campaign on the Snowball Effect website from Monday and had filmed an equity crowdfunding pitch. Renaissance Brewing Company's site also says it will shortly be equity crowdfunding with Snowball Effect.
Crowdfunding platform PledgeMe is also close to getting a slice of the action,currently working through final FMA requirements to be a licensed lending provider, says CEO Anna Guenther.