Of his receivables, about half are personal loans with the rest a digital, Freestyle-branded credit card book (he charges interest but also sets up a fixed repayment plan); and MoneyMe +, a merchant funded, buy now, pay later product that just launched.

Harmoney, whose average loan size is $ 25,000, reported interim net income of $ 1.2 million. Its market capitalization is $ 220 million. Its shares have disappointed since its float in November of last year and fell 10% to $ 2.06 on Wednesday.

MoneyMe, with an average loan of $ 8,000, reported net income of $ 1.3 million and a market cap of $ 273 million. Its stock closed 1% lower at $ 1.58 after a late rally after a sell off after lunch.

Both companies have expanded their warehouse financing facilities with major banks and claim to have sufficient capacity to finance their growth. Harmoney chief executive David Stevens said it is targeting $ 1 billion in annual loans, with a highly automated direct-to-customer digital model – two-thirds of applications are untouched by humans.

MoneyMe CEO Clayton Howes said the technology was helping to create a scalable model that allowed new products to be added without changing the lending model. “We are creating a suite of products in one ecosystem and we believe that the experience of buying now, paying later can work for higher value purchases,” he said.

Clayton Howes, Managing Director of MoneyMe: “We are creating a suite of products in one ecosystem. “

The two companies are pursuing a $ 150 billion consumer loan market in Australia that has undergone massive structural change, with the share of major banks dropping from 90% in 2015 to 50% in 2018.

The other players are the recently listed Plenti, SocietyOne, which is considering an ASX listing, and the upcoming merger Bank of Queensland and ME Bank, which operates the Virgin Money brand. The big banks are jostling: the National Australia Bank buys the neobank 86 400, while Street Talk reported Wednesday that banks are kicking tires on MoneyMe.

Jardens analyst Wassim Kisirwani said that the momentum for Harmoney’s creation “is strong and accelerated during the semester and the second semester. Margins are also upbeat, helped by higher NIM and operating leverage. “

RBC Capital Markets analyst Tim Piper said MoneyMe’s third quarter “is going very well, ahead of our second half execution rate, with $ 90 million in originations, versus $ 69 million. dollars in the second quarter ”as financing costs decline.

Both companies said credit quality was strong – Harmoney’s 90-day and over arrears are at an all-time low of 0.6% of loans while MoneyMe’s charge rate has fallen by 80 points basic at 4.7%.