Ihug: your friendly home loan company?

Ihug is taking the plunge into online financial services. Ihug Finance Limited will officially launch next month in both New Zealand and Australia, but the ISP says it already has a number of clients making use of the company's 'very competitive interest rates'.

Ihug is taking the plunge into online financial services with the launch of its own finance company.

Ihug Finance Limited will officially launch next month in both New Zealand and Australia, but the ISP says it already has a number of clients making use of the company's "very competitive interest rates".

While IFL will initially provide hire purchase and rental options on Ihug products - including its successful $899 PC/Internet deal - Ihug director Tim Wood says that in future "we'll roll out a whole range of financial options, even down to home mortgages and mortgage broking."

Ihug's move to provide its own financing was first signalled by the company's directors more than a year ago, around the time it set up its Travel Online agency. Like Travel Online, IFL has been staffed and set up by specialist recruits and will seek to trim costs by providing direct online access to services.

"We're looking to bring it into a simplified form," says Wood. "so people can sit at home on their PC, whack in their details, get a credit check and they're either approved or declined. The customer gets a response back within half an hour - or even immediately if they're an Ihug customer.

"It's a matter of maximising your customer base - maximising your revenue on each customer. For us it makes easier to have the customer deal directly with us both on the financing side and on having an access account with us."

Westpac Trust, one of the New Zealand banks yet to outline an Internet banking strategy, will provide the "banking structure" for IFL, which will run on Ihug's existing Oracle financial platform.

Ihug's move takes it into what is expected to be a lucrative area of online services in the next few years. Big players such as the US-based Citibank, which registered New Zealand domains last year, see financial services as the driver for ambitious global growth plans. But Wood says the desire to get into business ahead of such large players was not a factor in the decision to launch IFL.

"Our PC sales have made it more important. Our volume's gone up a lot with the $899 offer," says Wood. "We've been using third-party finance so far and the aim of this move is to streamline the process for us and for the people buying their PCs - and anything else they want to buy, like IDTV or a Satnet product.

"It's a matter of maximising your customer base - maximising your revenue on each customer. For us, it makes easier to have the customer deal directly with us both on the financing side and on having an access account with us."

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