But the company is shrugging off any worries about this, saying the loss will disappear, though it is not giving a timeline.

Prospa is a high profile, fast growing, business loans company that works in both New Zealand and Australia.

It has just released its financial results for the six months to December 31 2022. In a statement to the Australian Stock Exchange, Prospa said it said its Net Profit After Tax (NPAT) was a loss of $A5.2 million, compared with a profit of $A5.4 million in the previous corresponding period.

This was despite a fast-growing loan book, with loan originations up 35% and loan closures up 66% on the previous corresponding period.

But according to a company official, that growth was a big part of the problem.

Its senior investment relations manager, Melanie Singh, said more loans meant more money had to be put aside as provisioning for potential bad debts. Then, the harsh world economy required that provisioning to be met at a higher level.

“Because the loan book has grown so significantly, they have to put more money aside, just in case something happens. It doesn't necessarily mean something will happen, they are just taking a prudent approach. And they have increased their provisioning overlay (due to the difficult economy).

“$A10.7 million of that total provisioning is due to growth in the loan book and then $A18.9 million is due to a percentage increase in the provisioning overlay.”

In other words, the company was putting aside more money to safeguard more loans, and putting it aside at a higher rate, because the rest of the world was in strife.

Another contributor to the loss was the cost of installing a new IT system. But Singh said there was no real worry about the situation among company managers.

“They are not overly concerned because those top line numbers are continuing to grow and at this stage they are better placed to reinvest that growth.”