– Basic, personal loans comprise around two-thirds of its originations at present. Latitude and (hoping to IPO) SocietyOne are competitors in personal lending, along with the major banks.
– Growth is expected to come from areas such as car loans (Carsales is a strategic investor) (now 20%) and renewable energy installations in homes (currently 15% of loans). Macquarie is a major and well-established competitor on the vehicle space, while buy now, pay later providers like Humm (Flexigroup) and Brighte are getting into renewable energy.
From the prospectus, PLT expects a 34% growth in loan origination in the next 12 months. It is likely the solar and battery sector is where they will do best (for a start, bad debt numbers would likely be far lower). Tesla is a partner, and will refer business to fund batteries. Plenti is running the South Australian government’s $100 million battery scheme and is working with the NSW government to support its planned $3.2 billion investment into panels and batteries for solar. The NSW government will tender for a partner in the coming months, which Plenti is confident of winning.
Of the 300,000 solar power installations each year, only 3 per cent currently involve batteries, Mr Foggo said, but this will increase as the cost of batteries comes down. This will lift the average installation price of the kit from around $6,000 for just panels to around $16,000 for solar plus batteries, “and the propensity for people to take finance will increase,” he says.
Not that they are the only player for renewables. Last week, Humm and Brighte won a case in the Australian Competition Tribunal which suggested they will not have to conduct the same level of affordability checks on customers that Plenti has to as an interest-charging lender regulated by the credit act. The BNPL providers, which do not fall under the credit act as they don’t charge customers interest, said the decision will help them grow faster.
And just today, AGL Energy announced it will start installing discounted solar battery systems in households in NSW, Victoria and Queensland in an expansion of its “virtual power plant” program beyond South Australia as it works towards a 2024 target for storage through distributed resources and demand response. Customers joining the program in the three states will be able to buy batteries at cut-price rates in return for allowing AGL to use the systems at key times to improve security of supply, said AGL’s general manager for decentralised energy resources, Dominique Van Den Berg.
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On the other side. Plenti has around 22,000 registered retail investors; mums and dads can invest from as little as $10. Current returns for retail investors are around 5 per cent a year for three year commitments and 6.5 per cent for five years. Loans are also funded by eight smaller banks at the mutual end of the market, superannuation fund Future Super, and the government via the Clean Energy Finance Corporation.
– all in all, an interesting space. Pluses and minuses. just priced a bit high at IPO.
(DNH)
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