Whakatane-based personal lender Asset Finance has temporarily stopped taking new money after it received a deluge of funds in the wake of receiving the government guarantee and the big cut in the Official Cash Rate last Thursday. Until last week, Asset Finance had been offering 8.05% for 12 months, 8.65% for 18 months and 9.75% for 2 years. This was well above the 5% to 5.5% being offered by the banks and the 6% to 7% being offered by other guaranteed finance companies. Even after reducing its 18 month rate to 7.25% Asset was seeing "six figure" inflows. "Rather than drop our rates to 5%, we've just said enough is enough for now. There's only so many good loans to do," Asset Finance Operations Manager Blair George told interest.co.nz.
The inflow of funds had been very strong after the November 27 government guarantee approval, but had accelerated again after last Thursday's 150 basis point cut in the Official Cash Rate, which triggered a fresh round of term deposit cuts by banks and others. "We were run off our feet with inquiries," said George. Asset Finance said it would reinstate its rates in January as new lending opportunities arose. * This article was first published today in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.
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