The shift towards private credit is structural and stems from tighter bank credit settings, regulatory capital requirements, and sustained demand from borrowers who fall outside traditional bank appetite (such as longer-term mortgages with a typical 30-year term). This has created a narrowing gap in the market that specialist platforms are filling with increasing sophistication.
The borrowers served by private credit are not marginal – they are self-employed business owners, property investors needing short-term bridging finance, and developers requiring certainty of execution. Traditional bank services are not designed for them.
The interest rate gap between finance companies and banks has narrowed from 1.4% to just 0.5% in under a year, according to the Reserve Bank of New Zealand’s May 2026 Financial Stability Report – a data point that signals sector maturity and growing investor confidence.
Sophisticated investors are not moving capital away from banks; they are diversifying alongside them. Private credit is increasingly understood as a complementary allocation, which broadens its appeal well beyond the traditional non-bank investor base. In Finbase’s case, we generally look at investment sizes from $2 million to $20 million.
Offshore and institutional capital is now conducting serious due diligence on New Zealand private credit platforms. The questions being asked – about governance, underwriting discipline, portfolio oversight, and funding structures – are the same questions asked of institutional-grade platforms anywhere in the world, and New Zealand operators are passing that test.
One highly current example is that of the ASX-listed investment manager Challenger, which has allocated a NZ$150m wholesale funding mandate to Finbase. This will fund first-ranking residential mortgages originated by Finbase to a pre-agreed credit and lending policy. Finbase acts as originator and servicer; Challenger is the institutional capital provider, and the capital sits behind the mortgage assets. This mandate reflects the transparency of private credit platforms and their ability to satisfy the demands of global investment supervisors in the face of rigorous assessment.
The KPMG Specialist Lenders Insights Report (March 2026) shows that the sector is no longer niche and now represents $22b in loan obligations, with 81% of lenders growing volumes. The report also identified strong profitability outcomes, with 75% of respondents experiencing an increase in net profit after tax compared to the prior year, and increases in non-interest income (53% of respondents reported growth of more than 10%) and improvements in net interest margins, which went up for 79% of those surveyed.
What has made this possible is the infrastructure investment that leading platforms have made over the past several years, in credit governance, compliance frameworks, reporting capability. That is the unglamorous but necessary work and expertise that unlocks institutional confidence.
For wholesale investors, this means more choice, better-structured products, and access to a lending market that has historically been hard to access at scale with genuine transparency. For borrowers, particularly property developers and investors who need certainty of execution, it means a more reliable and capable lending environment outside the banks.
The next 12 to 18 months will likely see further consolidation of capital toward platforms that can demonstrate institutional-grade credentials. Those who have done the work will grow. Those who have not will find it increasingly difficult to attract the capital they need.
New Zealand is not unique in this trajectory. Australia, the UK, and parts of Europe have seen the same institutionalisation of private credit over the past decade. Finbase is following a well-worn path, which should give investors confidence.
Finbase co-founder and managing director Pernell Callaghan.
Disclaimer: The views and opinions expressed in this article are those of the author and are based on publicly available information.
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