Harmoney (ASX:HMY) share price on watch after 60% customer growth

The Harmoney share price is on watch after the company released its FY21 third-quarter results.

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The Harmoney Corp Ltd (ASX: HMY) share price is on watch after the company released its FY21 third-quarter results.

The Harmoney share price closed at $1.95 on Friday.

Harmoney operates in the consumer credit industry, providing online direct personal lending services in Australia and New Zealand. It offers personal loans, car loans, wedding loans, holiday loans, education loans, business loans, and home improvement loans.

Harmoney's strong third-quarter results

Harmoney increased loans to new customers by 60% to NZ$44.1 million in the third quarter of FY21, up from NZ$27.5 million in the second quarter. Its new customer acquisition in Australia was the main growth driver, with record new loan originations of $9.4 million delivered in the month of March 2021.

This saw Harmoney achieve an increase of 148% on January 20211 and 38% growth on March 2020.

Harmoney released its new generation, behavioural credit decisioning and pricing engine called Libra on 17 February, which continues to have a "material impact" on Harmoney's ability to originate loans in Australia.

It is the first technology release from the company that incorporates improvements specifically focused on the Australian consumer. Harmoney's credit risk appetite and profile remains unchanged pre and post-implementation of the new platform.

Harmoney's New Zealand operation also delivered significant growth in new loan originations during the last quarter of NZ$22.7 million. This compares to $17.1 million in the second quarter of FY21 and NZ$8.8 million in the first quarter of FY21.

What did Harmoney management say?

Harmoney CEO David Stevens welcomed the results:

Australia is our biggest opportunity for growth and our recent performance in the region underscores how quickly our platform business can scale. New loan origination in Australia has doubled since updating the technology behind our new lending scorecard, making the credit underwriting process significantly more efficient at attracting and then converting customer enquiries into settled loans.

Importantly, it does not change Harmoney's risk appetite for high-quality, prime customers. It actually illuminates the pathway we are on to achieving our business objective of $1 billion in lending volumes each year – just in Australia. We are very confident in our ability to replicate our New Zealand success in this market.

Harmoney share price snapshot

Harmoney has a market capitalisation of $196 million and its share price has fallen more than $1 since December 2020. It's down 35% in 2021 so far, and 87% against the financial services sector.

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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