NZ Fintech Group Holdings, the ultimate owner of online lender Moola.co.nz has gone into receivership with all its subsidiaries placed into the hands of liquidators.

Companies Office records show Partners For Growth V LP appointed receiver Thomas Rodewald to the holding company yesterday as part of a general security agreement reached on October 30, 2019.

Partners for Growth is a US venture capital firm which lends money to companies to enable them to grow.

Christchurch-based NZ Fintech Group Holdings is owned by Edward Recordon. Recordon said the company’s situation was due to an equity deal falling over at a late stage.

 “The company was expecting a large equity deal to settle in September which did not end up completing at the last minute and was the key driver for the position we are in today.”

But he said the last three years had also been very challenging.

“Seeing the rise of the unregulated BNPL [buy now pay later] players taking considerable market share; regulatory changes for short-term lenders and Covid and the economic backdrop made execution on business plans very difficult as a result.”

However, Recordon said there were some “fantastic assets and business plans in the pipeline”.

“We are working closely with the receiver and liquidators to achieve the best outcome possible given the circumstances. The situation will not affect current customers and loans will be serviced and managed as per usual.”

The holding company is the parent of NZ Fintech Group and NZ Fintech Solutions which are also in receivership. It also owns Zooma Car Finance which has gone into liquidation.

In October last year Recordon told the Herald it had raised $50m in institutional funding through Partners for Growth and Australia’s Alceon and was looking for a further $20 to $30m from both wholesale New Zealand investors and local institutions to top up the funding round and expand into the vehicle financing market.

NZ Fintech Group owns six further companies including Moola.co.nz, all of which have gone into liquidation. Liquidator Steven Khov was appointed yesterday by the shareholders through a special resolution.

Khov said it was still in the initial stages of the engagement with the liquidation and was currently assessing the position of the company.

“At this stage, the company is not processing any new loan applications, however customers with outstanding amounts and loans are encouraged to continue making payments as they normally would to avoid any adverse consequences and potential enforcement action against them.”

He said the liquidators were already fielding inquiries from parties interested in the business.

“Any parties interested in the business should express their interest to the liquidators.”

Moola offers short-term loans through online applications and had run foul of the regulator on a number of occasions.

In October last year it reached a settlement agreement with the Commerce Commission after it failed to comply with the Credit Contracts and Consumer Finance Act’s responsible lending principles.

That saw it agree to refund the interest and fees paid by 50 borrowers.

The loans were provided to borrowers between June 6, 2015 and November 30, 2017. During this time Moola provided high-cost short and mid-term loans with annualised interest rates of up to 547.5 per cent.

According to the Commission, Moola failed to make reasonable inquiries to ensure the loans met borrowers’ requirements and that borrowers were able to make repayments without suffering financial hardship.

It was the second settlement agreement Moola had reached with the Commerce Commission.

In March 2021 Moola agreed to refund approximately $2.8m to current and former borrowers after a Commerce Commission investigation into credit and default fees.

Moola agreed to the settlement with the commission, acknowledging the watchdog’s view that it had charged unreasonable credit and default fees between February 2016 and July 2017.

In December 2021 the Credit Contracts and Consumer Finance law was tightened bringing in more restrictions on how lenders could assess whether a borrower was suitable.

NZ Fintech was founded in 2013 with the aim of disrupting the non-bank personal finance sector through cloud-based digital-first solutions. Moola originally targeted the high-interest short-term loan market but this model had been phased out this year and the group was focused on delivering its next product into the auto finance space.

The company had spent $7m and four years researching and developing its Zooma brand and the product was ready for market launch.