Another debenture lender freezes

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From the SMH:

Victoria-based lender Gippsland Secured Investments has frozen $150 million of savings from mostly local investors, putting the future of savings among thousands of rural Victorians in doubt.

The move represents the latest regional lender to come under strain following the collapse last year of Banksia Securities, another debenture house which put $660 million worth of savings under a cloud, hitting about 15,000 investors, many of whom also live in regional Victoria.

As a non-bank lender, Gippsland offers investors high interest on debentures and then lends these funds out as mortgages or commercial property loans.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.