Non-bank lending has grown - fast

Date 19 May 2022

Non-bank lending is booming in New Zealand. According to the latest release of Reserve Bank lending figures in April 2022, non-bank lending in New Zealand has skyrocketed over the last few years, outpacing the major banks’ growth by a significant margin. Is it COVID? Is it the major banks interpretation of the CCCFA? Or is there something else at play that’s causing this recent growth trajectory? 

In New Zealand, the vast majority of lending is provided by the major banks, such as ANZ, ASB, Westpac or BNZ. They’re the first port of call for most borrowers and brokers – but they aren’t the only choice nor are they always the most suitable.

For those borrowers where main bank lending isn’t possible or appropriate, non-banks fill the gap, providing home loans, personal loans, auto loans and business loans to borrowers in unique circumstances. 

Non-bank lending is small – very small. Non-banks only made up about 1.5% of all home loan borrowing in New Zealand, according to Reserve Bank figures. But that number is growing, and rapidly.

According to those same Reserve Bank figures, main bank mortgage lending values grew 8.2% from March 2021 to March 2022. Non-bank mortgage lending, on the other hand, grew almost 4 times faster, increasing by over 30% over the same period.

Clearly, something is working for non-bank lenders and their customers. 

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Non-bank lending has grown - fast