ASX-listed small business lender Prospa is expanding in New Zealand, setting up its first local lending facility, worth NZ$45 million.
Loans into NZ until now have been funded from Australia. The company says the standalone facility means around NZ$6 million of equity capital can now be redeployed in the Australian market.
The lender’s 3-year committed facility comes from Class B Notes with an undisclosed funding partner and paves the way for Class A investors as Prospa seeks to expand in the New Zealand market, where it launched earlier in 2019.
In its note to the ASX, the fintech startup said the NZ funding costs “are broadly consistent with the levels observed for Prospa’s facilities in the Australian market”.
The move comes just weeks after NZ Prime Minister Jacinda Ardern, on a visit to Australia, stressed the importance of foreign investment for the growth of her nation.
Prospa CFO Ed Bigazzi said he believes their new facility will act as a conduit to attract global funds into New Zealand.
“Our first NZ warehouse creates a solid platform for growth as we continue to pioneer in the online small business lending space,” he said.
In March this year, Prospa reached $1 billion in loan origination across Australia and New Zealand over seven years to more than 19,000 small business customers. It loan book sat at around $300 million at that point.
NZ general manager, Adrienne Church said the local New Zealand customer base spanned a range of industry sectors including hospitality, retail, professional services and building and trade.
Prospa shares are up 3.5% today to $4.40. The company listed on the ASX in June at a $3.78 IPO price, having raised more than $100 million to expand its lending ability.
Yesterday, New Zealand’s central bank caught economists and market by surprise when it announced a 50 basis points cut to interest rates, to match the RBA’s official cash rate of 1%.
The move saw the Australian dollar slide to a 10-year low against the US dollar at 66.77 US cents