Harmoney chief executive Neil Roberts has presided over a rapid expansion of the business.

The country's first peer to peer lender Harmoney celebrates its first anniversary on Thursday, having made over $100 million of loans and established a platform to launch into Australia.

Harmoney was the first to get a licence to do peer to peer, or P2P, lending in New Zealand. That allowed it to operate an online personal loan marketplace where people who want to borrow can do so from people who want to lend.

Harmoney's highlights from a first year of trading included creating 65 jobs, as well as seeing both Heartland Bank and TradeMe become shareholders.

Chairman Rob Campbell said: "We are achieving phenomenal growth, and in 12 months have attracted 70,000 loan enquiries worth $1 billion and welcomed 3000 active personal investors to our marketplace."

Lenders had average account balances of $6000, and had enjoyed average yields of about 13 per cent net of fees and losses, Harmoney said, though a focus on lower-risk borrowers means credit losses have been low. The average weighted borrower rate has been 18 per cent, excluding fees.

Just over half of its loans have been for debt consolidation, Harmoney said. Just under 15 per cent have been for home improvement.



But it has not all been plain sailing.

Harmoney's "platform fee" is being probed by the Commerce Commission.

To borrow from Harmoney a borrower must pay a platform fee, which Harmoney believes is not covered by the Credit Contracts and Consumer Finance Act 2003. The act says no lending fee may be "unreasonable", including an establishment fee.

Harmoney's platform fee is "an up-front, one-off" fee of 2 per cent to 6 per cent of the loan amount, depending on how risky the loan is.

READ MORE: Harmoney fees scrutinised by consumer watchdog

Harmoney says that is the way P2P has operated overseas and has received legal advice that its platform fees are legal, but the Commerce Commission continues discussions with Harmoney on the issue.





After spending $15m building the Harmoney platform profitability has notyet been achieved, but Campbell said it would come as the business scaled up.

Some of that scale should come from lending in Australia, and one day further afield, though there are no plans to allow Kiwi investors to lend to Australian borrowers.



Roberts said: "We know we are doing well because the Australians are already bagging us."

So far borrowers are keener than retail investors to embrace Harmoney. About 80 per cent of money invested so far has come from institutions, but Roberts said in the past month the ratio was closer to 50/50.



HARMONEY TIMELINE:

September 2013: Neil Roberts decides to launch a peer to peer lending business.

July 2014: Harmoney gets the first P2P licence in New Zealand.

September 2014: Harmoney launches.

January 2015: TradeMe buys a 15 per cent shareholding.

August 2015: Harmoney passes $100 million in loans. Licence granted to launch in Australia.

September 2015: Harmoney passes the milestone of $1 billion of loan applications.

November 2015: Launch date for Australian P2P business.

