Has a new dawn for P2P lending arrived, cutting out the banks?
Monday, 26 January 2026
The time may finally be right for peer-to-peer lending to take off, with one new market entrant celebrating a successful first year, and an old player relaunching its platform.
Peer-to-peer lending was launched in New Zealand in 2014, amid much fanfare.
It was touted as a game-changer that would revolutionise the finance sector by bypassing banks and matching people wanting to borrow money with those looking to invest.
A look back at 2016 reveals the Financial Markets Authority licensed five peer-to-peer services, and by 2017 that had increased to eight with 20,744 registered investors.
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But it never took off as expected, and the sector quietly faded away.
New Zealand’s first peer-to-peer lender Harmoney closed its platform in 2020, and instead funds loans from wholesale markets, while another big name, Lending Crowd, bowed out in 2023.
Now, momentum has returned to the peer-to-peer space.
Late last year Lending Crowd, backed by its parent company Finance Direct, announced it was reopening to borrowers, and would soon be reopening to investors.
And new player Go Lend, which focuses on mortgage rather than consumer lending, announced it had surpassed its first-year targets.
Lending Crowd managing director Wayne Croad said while the reopening to investors would be staged, the time seemed right to relaunch the platform.
There has been significant regulatory and market change, including the introduction of the Depositor Compensation Scheme, and the forthcoming open banking framework, he said.
“It reflects a commitment to broaden competition and empower challengers to the big four banks. The Government has made it clear it wants non-bank lenders to step up, innovate, and compete.
“Technology has evolved, and we’ve updated our platform for a digital future as we wish to take advantage of open banking systems as they finally roll out in New Zealand.”
While it was currently only open to borrowers wanting access to alternative finance options, it was preparing to welcome back retail investors over the coming months, he said.
“We’ll have new products, such as first mortgages, and opportunities for everyday investors who are looking for decent returns, but Finance Direct will continue to invest in loans alongside them.
“That’s to ensure we’re sharing both the risk and the reward with our investors. It’s a level of alignment designed to give them greater confidence.”
Croad said peer-to-peer lending’s record in New Zealand was of mixed success, but while there were fewer players, the market had morphed and matured.
Since Lending Crowd announced its relaunch it had seen interest from returning investors who found the hybrid, high-tech approach it planned appealing, he said.
“Also, deposit rates have been affected as interest rates came down, so investors will start to look around for better returns, and peer-to-peer opportunities will become more attractive.”
Go Lend chief executive Luke Jackson agreed there was an appetite for different investment options from the public, and a greater acceptance for alternative platforms.
That appetite had contributed to his platform exceeding its first-year targets to surpass $15 million in its investment portfolio, and acquire over 400 customers since its launch in December 2024, he said.
“Our platform allows investors to participate in property secured loans with solid, fixed returns, but our point of difference is that retail investors can buy portions of loans down to as small as $1000.
“We saw a gap in the market for this type of offering, but as interest rates came down people looked for alternative options, and that’s been good for us.”
When peer-to-peer lending started out it revolved around smaller consumer type loans, and those loans were unsecured, he said.
“Now, a lot of those consumer lenders are not peer-to-peer lenders any more, and the peer-to-peer lenders that do exist are based around secured, property loans.
“The people that come to us, or others doing something similar to us, are people looking for good returns but who want some security behind it for their capital.”
Jackson said peer-to-peer was a fantastic structure for short-term property lending as there was real demand for those types of loans.
“A product like ours gives people the chance to invest in something they understand, and technology allows us to fractionalise more so that people who may not previously have been able to invest can.”
While the property market had been subdued last year, more positive activity was evident towards the end of the year, he added.
“Given the signs of economic improvement, we believe it will pick up more allowing us to source and offer more loan opportunities to investors.
“We are feeling positive about the outlook, and with our current growth trajectory we forecast reaching between 1500 and 2000 customers in the next 12 months.”
Aside from Lending Crowd and Go Lend, of the eight licensed peer-to-peer lenders on the FMA’s register, only three others are currently active. They are Squirrel, Southern Cross Partners and Zagga.
Of those Squirrel, which is better known as a mortgage broker and non-bank lender, is the biggest. It has been doing peer-to-peer lending since 2015, but it uses a model that also involves managed funds.
John Bolton, the company’s founder and group head of property finance, said it was currently managing over $500m of investor funds, and had about 13,000 Kiwi investors.
Last year, Squirrel originated almost $650m in loans through its peer-to-peer platform and related funds, he said.
“But in terms of the direct peer-to-peer lending that we report to the FMA, the amount would be about $150m because many investors buy into loans via our funds.
“So we are not a traditional peer-to-peer lender of the sort originally envisioned, but we have a sophisticated platform that allows investors to buy fractions of loans directly, and there is demand for that.”
Bolton was not convinced a new wave of peer-to-peer lenders was on the way.
That’s because the size of New Zealand’s market made it difficult to scale up to the extent necessary, establishment costs were expensive, and the sector was more heavily regulated than others.
But the future of finance involved decentralised finance (DeFi), a blockchain-based, peer-to-peer financial system that operates without traditional intermediaries like banks or brokerages, and uses digital currency, he said.
“And peer-to-peer lending is an early version of what is coming in finance. It takes a real world asset, like a mortgage, and fractionalises and sells it to investors.
“In the Defi world assets are tokenised, fractionalised and turned into digital contracts. Our platform is a version of that - it’s not based around blockchain, but everything that is happening in the Defi world is in our platform.”
New Zealand was behind in this space, but he expected to see more local businesses moving to adapt and catch up with the way the financial sector was heading, he said.