One of the UK’s aspiring fintech companies has confirmed that they are still funding as normal during covid-19.
Fund Ourselves, a London-based startup, offers short term loans ranging from £50 to £500, repaid over 3 months. The company founder, Nadeem Siam, has confirmed that the startup is ‘still lending as normal’ despite covid-19.
The number of private lenders offering funds during the last 6 months has fallen dramatically, with established lenders such as Amigo and Non Standard Finance taking a break from lending and only resuming in recent weeks at half capacity or less.
The demand for short term finance has been consistent in the last 6 months, especially with UK borrowers needing to top-up their existing income or overcome financial challenges due to covid-19.
There are around 3 million Britons that use short term or ‘payday’ lending each year, but many have struggled to get access to the funds they need due to a lack of supply.
Economic and market factors have contributed to the lack of funds available
With uncertainty facing the employment and income of prospective borrowers, many lenders have been inclined to pause any lending altogether.
Some have stated the difficulty in running affordability checks for applicants when their long-term income is not certain. Other lenders have preferred to act more cautiously towards lending and have looked to minimise costs by putting their staff on furlough or part-time hours.
In terms of market factors, the short-term lending industry has evolved in the last 2 years following strict regulation from the Financial Conduct Authority. The role of tougher restrictions and rise in claims from former customers has seen some of the UK’s largest lenders fall into administration, including Wonga, QuickQuid and The Money Shop.
Further pressure has been added to lenders, since the FCA authorised a one-month payment holiday during covid-19, allowing customers to revert payments to a later date, whilst lenders were eager for funds to come in sooner, rather than later.
Fund Ourselves set up to offer a viable alternative to high-cost lending in the UK. With loan terms of 3 months, customers pay lower rates than the average payday lender and get up to 12 months of interest-free borrowing if they are struggling to repay.
The company has confirmed that they are funded as normal during the pandemic.
As a peer-to-peer lender, individuals can also invest in short term loans, generating a return of 5% to 15% per annum which is diversified across a number of borrowers.
Founded by Nadeem Siam, a former NASA engineer, Fund Ourselves was listed in the Fintech Power 50 in 2019 and was ranked 22nd in the TechRound100 list of top UK startups.
Other UK lenders also funding as normal including Lending Stream, Cashfloat, MoneyBoat and Everyday Loans.