- Digital consumer credit business MoneyMe (MME) has established a new $167 million warehouse funding facility led by Westpac
- The new facility has a two-year term and reduces funding costs for MoneyMe by more than half
- Senior funding will be provided by Westpac, while mezzanine funding will be provided by the Australian Office of Financial Management
- MoneyMe has also launched its new PayAnyone feature, which allows a person to person payments
- The company is up 4 per cent on the market this morning and trading for $1.56 per share
MoneyMe (MME) has established a new $167 million warehouse funding facility led by Westpac.
The new facility has a two-year term and reduces funding costs for MoneyMe by more than half. It has a rate below 3.95 per cent per annum, plus the bank bill swap rate (BBSW) on a fully drawn basis. This takes the combined warehouse loan asset funding costs to below 5 per cent per annum (plus BBSW).
These rates are down from the 2020 financial year funding costs of 11.4 per cent annum.
The facility was set up to scale from an initial $167 million loan receivable funding.
While the facility supports high loan receivable growth, MoneyMe will be introducing more competitive pricing and wider offers across its risk based priced Personal Loan and Freestyle products.
With new price changes, MoneyMe will further improve its offering of higher loan amounts to lower credit risk consumers, as well as the launch of new products.
The Australian Office of Financial Management (AOFM) will provide mezzanine funding into the facility in September.
Managing Director and CEO, Clayton Howes, said this major Australian bank partnership is transformative for MoneyMe.
“This is a significant milestone that provides a step-change in our funding costs, increases origination capacity and allows us to better compete on price. It is an achievement made despite the Covid-19 operating environment and is testament to the business model, the economics and quality of the loan assets and the growth opportunity,” Howes said.
“We welcome Westpac as a senior funding provider and look forward to having the AOFM as a mezzanine debt investor,” he said.
PayAnyone Launch
PayAnyone was launched this month and can be used by all freestyle virtual credit account holders.
The new functionality allows customers to pay any bank account in Australia directly using their freestyle virtual credit account.
“The launch of PayAnyone for our Freestyle virtual credit account is another exciting innovation to delight our customers. It is also fantastic to see our recent product launches from ListReady to MoneyMe+ resonate with customers so quickly,” Clayton said.
“We are looking forward to fully leveraging the lower cost of funds and capacity from the new warehouse funding facility to grow our balance sheet to meet
the needs of Generation Now,” Howes said.
MoneyMe is up 4 per cent on the market this morning and is trading for $1.56 per share at 11:30 am AEST.