Squirrel Money to launch a secondary market for investors

Peer-to-peer lender Squirrel Money is to launch a secondary market for its investors next week.

Wednesday, August 17th 2016, 6:00AM

It will allow loans to be on-sold to other investors, by those who need to get their money out before the loan term is up.

The Squirrel offer will be the first peer-to-peer secondary market available in New Zealand.

Managing director John Bolton said it was something that was often requested by those thinking about putting their money into a peer-to-peer platform.

"For us to be a successful platform with older people putting money in the secondary market is important because it's offers that liquidity that is really important to them. I think initially for us it's about having it there so that people who are a bit nervous about investing in a five-year loan, even though they tend to pay back faster than that, it give them extra comfort."

Squirrel Money is also offering an auto-renew function to allow investors to reinvest any money that is returned to them, without having to keep a close watch on the site.

An app for investors is also imminent.

Squirrel Money has so far lent $225,899 in loans.

It has a different model to other peer-to-peer providers because it uses a reserve fund to cover any potential losses to investors. They receive a lower interest rate return because of this added security - it offers up to 8.8% on five-year investments at present.

ends

© Scoop Media