The Non-Bank Lending Institutions (NBLI) sector provides around a third of consumer lending to New Zealanders but it remains small relative to the rest of the financial system. Mortgage lending from NBLI is around 3 percent of the total across the financial system.
Admittedly, this is still only halfway to achieving the target of stable 2 percent, but the situation has changed dramatically from when we started the quantitative and qualitative monetary easing about a year ago. As I have emphasized elsewhere,4 we need to provide a sufficient escape velocity to the economy in order to break free of deflationary equilibrium.