The major bank’s referral relationship with small business lender Prospa has come to an end, as the bank looks to develop its own products.
Westpac has decided not to renew its direct referral relationship with Prospa, which expired at the start of June.
The bank said that there are two reasons for its decision: low referral volume and it is developing its own competitive products.
A Westpac spokesperson clarified that the bank only referred business to Prospa in “unique circumstances where [it] didn’t have a product to meet customer needs”.
“We made the decision to not continue our contract with Prospa because we are working on developing our own Westpac products to satisfy more of our customers’ needs,” Westpac said.
The spokesperson also noted that its contract with Prospa expired prior to the small business lender indefinitely deferring its listing on the Australian Securities Exchange (ASX), which was scheduled for midday on 6 June 2018.
Prospa revealed in a disclosure to the ASX that the postponement was so that it could “clarify queries raised by ASIC [on Tuesday] in relation to Prospa’s small business loan terms”, which it further noted was “in the context of an industry-wide review”.
The Westpac spokesperson additionally clarified that Prospa undertook its own customer credit checks and that the bank did not refer anyone who was previously refused a Westpac loan.
[Related: Prospa further delays ASX listing]
Tas Bindi is the features editor with The Adviser magazine, Australia’s leading magazine for mortgage brokers. She writes about the mortgage broking industry, fintech, financial regulation, and mortgage market trends.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.
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