DirectMoney shows there’s life in marketplace lending
Australia's only listed marketplace lender delivers after its first year.
In a statement yesterday, DirectMoney announced a return of 7.76% p.a. on its personal loan fund after its first full year of operation. As the only listed marketplace lender in Australia, the performance is a good sign for the Australian market.
As a marketplace lender, DirectMoney writes unsecured personal loans to either the Loan Fund or institutional and wholesale investors. The first full year of performance for the Loan Fund was completed on 13 May 2016.
Earlier this week, DirectMoney issued a statement to shareholders announcing the surge in demand for its marketplace loans had left them unable to fully fund its loan book. To support the excess loans, chairman Stephen Porges said the company would establish a referral program with a "trusted lending institution".
The performance will be a welcome announcement to shareholders in light of recent share market announcements from the US. Lending Club, one of the several American listed marketplace lenders, revealed it had sold on a portfolio of $22 million of loans in violation of investors' instructions. To make the loans comply with investors standards, dates had been altered. The announcement has seen its share price drop more than 50%.
In the US, which has a significantly bigger peer-to-peer (P2P) market and a larger number of listed lenders, any impressive jumps or dips in performance is more noticeable. The case of Lending Club was the first real hit for the global P2P lending industry, with many Australian stakeholders debating whether the case would have an effect here.
While DirectMoney remains the only listed lender in Australia, the recent drive in demand and positive performance results are good indicators for the industry in general.