Wellington - Another New Zealand finance company collapsed on Monday, but its 2,558 investors who had put in 70 million New Zealand dollars (34.3 million US dollars) of their savings are to get their money under a government guarantee introduced last year.

Investors in Mascot Finance, based in the South Island city of Timaru, are the first to benefit from the government's retail deposit guarantee scheme introduced after 25 finance companies, holding nearly 4 billion New Zealand dollars, collapsed last year.

Mascot Finance's trustee, Perpetual Trust, said a major loan was unlikely to be recovered in full and receivership was the best option to protect investors.

Treasury Secretary John Whitehead said that all eligible Mascot Finance depositors would get 100 per cent of the money they were entitled to under the government's guarantee.

"The deposit guarantee scheme was put in place to give New Zealand depositors confidence that their money would be secure in the event an approved financial institution failed," he said. (dpa)