This was despite significant growth in loan originations
Prospa has released its half year results, and has recorded a net loss after tax of AU$3.2 million. This is despite a 265% increase in loan originations from 4Q20 to 1Q21.
Loan originations in New Zealand are at their highest monthly levels since Prospa’s launch, and have surpassed $100 million in total loans originated.
Loan originations for the first half of 2021 have remained below pre-COVID levels at AU$180.7 million (AU$306.8 million in the first half of 2020), but CEO Greg Moshal said that recovery has been speeding up throughout December and January.
Read more: Kiwibank releases half-year results
Moshal noted that lower revenue was offset by a 36% reduction in operating expenses and a 26% reduction in employee expenses. Despite the net loss, Moshal said Prospa has emerged from the pandemic “well-funded, with no corporate debt and with significant headroom to support the small business economy.”
“The significant work undertaken over the past six months has placed Prospa in the strongest possible position to capitalise on growing demand for capital,” Moshal said.
“While we have maintained our provision until we see a more stable economic environment, the current business trajectory and small business market gives us confidence that the balance sheet will return to grow in the second half as originations and new customer numbers continue to improve.”
“Since inception, we’ve deployed $1.8 billion in funding to small businesses, and this is only the start,” he added. “We’re excited and energised by the significant market opportunity in both Australia and New Zealand, and we’re seeing our momentum accelerate.”
Read more: Increased business confidence drives capital demand
Moshal said Prospa’s multi-channel distribution strategy will be a key part of helping the business grow, as well as its investment into efficient digital systems for advisers and customers.
“We have an in-depth understanding of small businesses, and our technology continues to become smarter and faster,” Moshal said.
“This enables us to quickly assess risk, identify opportunities and make loan decisions at a quicker pace. This has proven invaluable during the pandemic, and has allowed us to adapt to the changing economic environment.
“The small business economy is staging a comeback, both in Australia and New Zealand. Thousands of our customers are now in a position to grow.”
