Claire Matthews: Massey University Banking Expert on the number of green loans

Kiwis have racked up more than a billion dollars in green loans for energy efficient items like EVs, solar panels, and heat pumps. 

BNZ, ASB, and ANZ all lend up to $80 thousand on a 1% interest rate over three years. 

Massey University Banking Expert Claire Matthews says these are small loans, meaning the banks are pumping them out, while not actually lending a huge amount. 

She told Mike Hosking customers still have to go through the same process as loans with higher interest rates, and go through affordability checks. 

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Episode Transcript

Speaker 1 (00:00):
It looks like the green loans are hit. You know,

(00:01):
these green loans where you borrow money for certain things
in nature. I think it's summer interest free. Some are
like one percent. Anyway we borrow. We borrowed a billion
dollars in these green loans, and basically it's for evs
and heating your house and solar panels and stuff like that.
Doctor Claire Matthew's Massy University Banking expert with its clear
good morning to you, mo der Mike is a billion
dollars A lot, oh.

Speaker 2 (00:23):
I mean brilliant dollars are sitting a large amount of money.
And I think what's more important is because these are
smaller loans, it's actually a lot of loans. In terms
of the trial amount of lending banks are doing, it's
probably not a huge amount, But in terms of the
difference it's making, I suspect it's quite significant.

Speaker 1 (00:38):
How much is it real? Because I mean, say, I
couldn't give the monkeys about the environment, but I can
get one percent loan on an EV. Why wouldn't I
buy an EV and do it that way as opposed
to a regular car payment.

Speaker 2 (00:49):
Well, just something said, it's almost part of the part
of the reason for doing it. It's to help encourage
consumers to be more environmentally focused, maybe not because they
directly want to, but because it's incentives to do so.

Speaker 1 (01:03):
Yeah, is there a bigger picture of place thee solar?
I've got questions around in terms of longevity. So I
borrow money for solar, I put the solar on the roof,
and of course it takes years to pay off, and
then suddenly I'm selling the house, I get nothing back
and I still owe this money. I mean, the issues
around that are not.

Speaker 2 (01:17):
Really well potentially, but the point is that because you're
paying a lot less for the loan, the payback should
be much better. And there's a whole other issue around
the need for solar energy and other types of energy
to be more cost effective. So it's a slightly different issue.
But one would hope that as we become more environmentally conscious,

(01:40):
and there are a lot of New Zealanders that already are,
that the fact that you've got solar pedals on your
house will be a selling point, will it well, I
would hope so.

Speaker 1 (01:50):
Okay, And presumably this is the same criteria that all
banks use for lending. In other words, can you afford
to pay it back even if it is one percent
or zero percent, I mean, still be doing the DD
as they say.

Speaker 2 (02:03):
Absolutely. The fact that these are concessional interest rates does
not absolve the banks of the need to do the
normal affordability checks. So yes, they've got to make sure
that the irrespective of what amount you're paying, that you
can still afford it.

Speaker 1 (02:16):
They can't be making money at one percent. They must
be losing money. If they're losing money, is this green washing?

Speaker 2 (02:23):
Well, I don't know that it's green washing if they're
actually losing money green washing, No, But they're doing.

Speaker 1 (02:27):
It for altruistic reasons to save the world. So in
saving the world, are they saving the world? And if
they're not saving the world, is that green washing? Well?

Speaker 2 (02:35):
I think it is a contribution to help save the
world because it's getting people into things to help save
energy that may may not otherwise have been able to do,
and it is costing the banks, so they are doing
it partly it's about showing that they are contributing to
the community and adding value.

Speaker 1 (02:54):
Okay, hey, do you know about neo banks?

Speaker 2 (02:58):
A little bit depends on the Is it worth.

Speaker 1 (03:01):
Discussing neo banks at links? Tech Edwards. You know Tech Edwards,
the monopoly guy two degrees. Oh okay, yep, right, so
he's big on these neobanks. He reckons neo banks are
the future to banking in this country and therefore it'll
balance it out in the whole competition argument that's going on.
Do I need to look into neobanks and our neo
banks potentially the answer to the competitive problem in this

(03:23):
country with banks?

Speaker 2 (03:25):
Well, neo just means new, so all it really means
is that these are banks that are coming in that
are going to do things slightly differently. It's much like
the argument I think around open banking, that it's going
to make us do things in a different way and
the forebank's going to fix the competition problem. It's worth
worth having a look into because it all depends what
the neobank, how it specifically is going to operate, because

(03:47):
they're all going to be slightly different in terms of
what they're offering and how they go to operate. But
whether they're going to solve the problem, that's a different question.

Speaker 1 (03:56):
Well, it's a pleasure. Clear you have a good weekend.
Doctor Claire Matthew's out of Massive University, going to London
to find out that it's not a thing. Am I
If you missed yesterday's story, text wants to fly me
and the research all be worth your investment though, couldn't it?
Good Boo Wilson. We'll see how we're feeling later in
the show. We'll see how the show and go. Yeah,
I mean I might be over at by nine o'clock.
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