An Australian bank has entered into a strategic relationship and equity deal with a peer-to-peer lender.
The long term relationship between MoneyPlace and Auswide Bank is the first of its kind in Australia and includes a five-year deal to fund up to $60 million to assist MoneyPlace to grow its consumer lending and for the bank to grow and diversify its financing activities nationally.
In addition, Auswide is taking a 20 per cent equity stake in MoneyPlace.
The P2P lender launched in October after receiving its retail and wholesale AFSL and provides loans of $5000 to $35,000 through its peer-to-peer lending platform.
MoneyPlace CEO Stuart Stoyan said the relationship is a critical milestone for P2P lending globally and demonstrates how banks can work with P2P lenders to provide better rates for all customers.
“This is an exciting development for both companies and is an example of the type of collaboration we believe enables traditional lenders to tap into the innovative business models that alternative lenders like MoneyPlace bring to the market,” Mr Stoyan said.
“In Auswide Bank we have a partner who is keen to take advantage of our low cost distribution channel to grow their consumer lending business and support their expansion into Melbourne and Sydney,” he said.
“Auswide Bank’s managing director, Martin Barrett and his team have put in considerable effort over the past couple of years to transform Auswide Bank, including a focus on digital, improving customer experience and accelerating growth in consumer finance.”
Mr Barrett said the bank is keen to take a position in the emerging P2P space to assist its growth in the consumer finance market and continue to improve its competitive positioning against the big four banks.
“We’ve been impressed with the platform, skills and capability of MoneyPlace and are excited by the opportunities that will flow from this relationship,” he said.
“By taking a 20 per cent equity stake, as well as using the MoneyPlace platform to invest funds for consumer finance, both organisations benefit and most importantly those customers requiring consumer finance benefit.”
Mr Barret said Auswide are the first bank in Australia to take this dual equity and funding position.
“This is a wonderful opportunity for both organisations to grow and be at the forefront of the P2P opportunity in Australia,” he said.
“It represents the ability for us to accelerate our consumer finance ambitions nationally. Technology is changing the market and we, through the right innovative partners, are keen to take advantage of the opportunities for growth it presents.”
[Related: Peer-to-peer lender joins ARCA]