Chairman's Insight


Ren Hor Wong

Chairman & CEO

N1 Holdings Limited

In 2017, N1 capitalised on its vast network of Small and Medium Enterprises (SME) clients and expanded into SME lending, a natural choice for a company that constantly reinvents its business model to unleash growth momentum. In 2020, N1 has successfully re-positioned itself as a specialist SME lender in the Australian small and medium business community, with a core focus on property-backed SME lending products, playing to its strength of being an agile, quick and responsive lender. This has all been happening amid increasing regulatory tightening on banks, drastically reduced banks' appetite in the space of business lending.


The management of N1 recognised its current scale needs to adapt into a niche market in order to chart further growth trajectory. The product we are offering fits nicely in the gap foregone by burgeoning fin-tech lenders and mainstream banks. The emerging of fin-tech lenders in the market, providing unsecured smaller size loans to SME borrowers, created an awareness campaign in the business community of new alternatives to access debt financing, whilst mainstream banks have lesser appetite in deals less than $3mil or $5mil, if not larger ticket size. N1 SME lending product is property-backed, and in alignment to fill the market gap typically between the size of $200k and $2mil, too big for fintech lenders meanwhile too small for mainstream banks.


The 2020 health crisis has altered the lending landscape further, globally we see small businesses struggle, quality businesses that may have blossomed again post-crisis, if they have access to financing. The Australian real estate market however provides another contradicting story, defying gloomy outlook with stable prices. In saying that, the risk of second wave lock-down bringing a bumpy ride effect to property prices is well in the mind of N1's management and credit risk committee. Going forward, the team focuses on quality assets, business borrowers with strong financial circumstances, and promising SME financing strategy. N1's portfolio of loans remain low in leverage ratio giving abundant equity in security, shorter average loan term giving agility to property prices risks and a concentrated focus on metropolitan locations providing liquidity in contingency plans. We understand business lending requires business sense, and our strong pipeline has allowed us to be very selective on taking on loans into our portfolio, and human interactions in the assessment has added extra cushion in risk assessment, that we never believe a fin-tech pure play can procure, whilst a polished system that is able to handle larger deal flow volume. 


As the credit market inevitably tightens again, we will have the opportunity to deliver greater risk-adjusted returns with stronger pipelines, and our high focus on capital preservation remains.