This week New Zealand's first peer-to-peer lender launched, giving Kiwis the opportunity to lend and borrow money without going to the bank.
Harmoney says this model is riskier than traditional lending but it believes that risk can be managed properly, giving people and businesses better access to borrowed money, and lenders a better interest rate.
Harmoney's chairman Rob Campbell told Firstline this morning the peer-to-peer system has only become possible recently, thanks to new technology.
"It provides a platform which means you don't use a bank or finance company or anything else, you can handle the process yourself, whether you're a borrower or a lender and there's in effect no intermediary."
He says the company acts as a platform for lenders and borrowers, not as a finance company.
"We don't raise any money from the public – we simply provide a platform, we don't handle the money, we don't direct where the money goes, that's all in the hands of the lenders and the borrowers.
"We've used the term in some places 'liberating lending' – I think it liberates borrowing as much as lending. It's nothing like a finance company."
The midrange of interest on loans the company deals with will most likely be in the early- to mid-teens, says Mr Campbell.
"That's a very, very competitive rate. If you go and look at what your bank will charge you for a personal loan… it will be a whole lot more than that."
The current limit on borrowing through the platform is $35,000.
Watch the video to see the full interview.
source: newshub archive