Marketplace lending platform DirectMoney has been forced to offload some of its business to another lender to cope with an excess of loan applications.
In a statement to shareholders, DirectMoney executive chairman Stephen Porges said the company is establishing a referral arrangement with “a trusted lending institution”, which is intended to provide a further option for its “excess loan applications which cannot by supported by sale of loans to the fund or institutional investors”.
“This referral arrangement is also attractive as it has the potential to be extended into a more permanent loan sales arrangement,” he said.
“Consumer appetite for DirectMoney personal loans is strong and we are committed to our diversified strategies to fund this demand.”
Mr Porges said the ASX-listed lender remains “intensely focused” on progressing loan sales to institutions, as well as the development of a funding warehouse.
“At the same time, we are rolling out a strong marketing program for the fund which, as we have said, will be a centrepiece of the DirectMoney business model in the medium-to-long term,” he said.
“This is both a unique opportunity for Australian retail investors and a significant source of funding for our business.”
As of March 2016, DirectMoney held $6.78 million of loans and had net assets of $9.10 million on its consolidated balance sheet.