Quote Originally Posted by myles View Post
From the Harmoney Linkedin page - 51-200 employees...

From Wikipedia (assuming it's accurate):

In June 2016, Harmoney announced that it had generated 8.6 million in revenue for its first full year of operation.[15] This was a loss of $14.2m for the full year, as it continues to invest and grow staff numbers.

So the running cost for 2016 was $22.8 Million...

Lots of info about running costs found here. $500 doesn't sound like so much?
Harmoney wrote 12,000 loans in that period - and generated 6.3 million in arrangement fee.

Thing is it only wrote 12,500 loans for 12 months ended Mar17. But had 36m of interest paid. Under the new fee model that would have generated 6.5m in fee and 5m in interest cost. Harmoney needs double that to generate a sufficient return for its shareholders.

Problem for Harmoney, is the NZ market has limited scale, its going to struggle to get beyond a certain ceiling in loan #s. If forced to reduce fee to $350, it'd need a 40% hike in lender fees to achieve same revenue, assuming no extra loans.

Issue for lenders, is Harmoney has huge incentives to rewrite loans. Not only for the rewrite fee, but interest in the first year of a loan is considerably more (60% of repayments in a 5 year D grade loan, then 40% in year 3, and plummeting to 10% if makes to year 5!).