Adrienne Begbie: Prospa Managing Director on the impact of the latest OCR cut

Will the latest cut to the Official Cash Rate provide some much-needed stimulus to the business sector? 

The central bank's cut the OCR 25 basis points to 3% and is signalling more are possible. 

It's recognised unemployment is high, and businesses aren't producing as much as they could. 

Prospa Managing Director Adrienne Begbie told Mike Hosking that while some people were hoping for 50, a 25 basis point cut does help a lot.  

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Episode Transcript

Speaker 1 (00:00):
So to Christian and his bunch of mery travelers who
delivered more interesting news than we thought. Yes, twenty five points,
but for the first time you have a four to
two vote. More importantly, they missed the Q two contraction
and as a result we're most likely to get two
more cuts before Christmas. Adrian big b is the MD
of lending company prosper Enders with US Adrian, good.

Speaker 2 (00:15):
Morning, Good morning mate.

Speaker 1 (00:17):
Did you get a lot of confidence out of them
yesterday or not?

Speaker 2 (00:20):
Oh? Nonstand I think everyone was expecting the twenty five points.
Some people were hoping I'm fifty, but twenty five points
will do for now. It does help a lot. Do
you know that our New Zealand interest rates we were
forty seven percent higher at the peak of the increasing
the rates than we were pre COVID. It's a huge
amount out of people's pockets. It's a huge amount of
people to be able to spend and go out and

(00:41):
to help the economy.

Speaker 1 (00:42):
Exactly, why are we in a funk?

Speaker 2 (00:45):
Why are we in a funk? It's interesting, isn't it.
I listened to your shell all the time, so I
loved luxm quote the other day. Actually, when you were
talking to him about turning the ship around or getting
the getting the car out of a ditch and turning
the economy around. So that takes a long time. The
economy stall. So that comes out of we come out
of their recession, we come out of COVID and that
this impacts everyone's pocket The rates go out, the people's

(01:09):
value in their houses go down, so that impacts confidence.
Confidence drives so much in the economy.

Speaker 1 (01:14):
Do people want money at the moment? Is there a
sense of eye can take a risk or not?

Speaker 2 (01:19):
When it comes to business lending and starting, we see
it in our data. So we are kind of the
canary in and I'm in the mind because we are
leading to the small businesses. So when we're leading into
small businesses, the key data point that I watch is
the approval to settlement, so that shows that business that's
are actually confident to take the money. So the confidence
to take the money and the use of funds as well,

(01:40):
So we watch the use of funds. The thing that
was really interesting with when the budget come out with
that investment boost that they came out with, so we
saw an initial intake of people taking money to invest
in their businesses. So that has continued, But as the
confidence is returning and people have money to spend, that
helps them to get more confidence to be able to
invest in their business. We see that in our data

(02:00):
now good.

Speaker 1 (02:01):
So what Christian said yesterday broadly, as things are ish
coming right, they will continue to come right. By twenty
twenty six, he sees some form of normality. You would
agree with that, Yes, yes, we would.

Speaker 2 (02:13):
Everyone was hoping that you get to thrive, to survive
to twenty five or then thrive in twenty five, but
people are looking forward to twenty six. So I think
getting through the end of this year still there's still
a lot of pain out there. That's still some tough,
tough things to do, but it is improving. And when
you see that those data points to start to improve,
then that gives my business confidence as well as our

(02:34):
customers to be able to move forward and to really
start growing good stuff.

Speaker 1 (02:38):
I Adrian appreciate time very much. Adrian Bigbie, who's the
managing director of Prosper Morning Mike our Homeland, is currently
on floating any advice on when to fix and how long? Yes,
I do stand by

Speaker 2 (02:48):
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