A London-based entrepreneur is looking to shake-up the fintech and short term finance industry and offer a solution to what he calls ‘the wonga problem’.
Nadeem Siam is the founder of Fund Ourselves, a company that was formerly trading as Welendus. After seeing the downfall of one of the UK’s largest lenders and subsequently Sunny Loans also going into administration this week, Siam has created a new lending platform to help customers seeking short term finance options, with zero late fees and free extensions that will not impact their credit score.
The Wonga Problem
Well-known payday giant Wonga went into administration almost two years ago, following more than £500 million owed in compensation claims. Some sources suggest that outstanding claims from Wonga may have exceeded 4 times this amount.
Wonga was a lending force, known for eye-watering interest rates that often exceeded 1,000% APR. After an enormous surge in compensation claims, the lender collapsed at the end of August 2018 – and was swiftly followed by other market leaders QuickQuid, The Money Shop and Uncle Buck.
A Gap in the Short Term Finance Market
Whilst there has been a significant collapse for many high street and online lenders, the demand for short term finance remains. There are nearly 3 million people throughout the country that are using payday loans to keep financially afloat and greater financial uncertainty surrounding coronavirus has only increased this demand.
With a gap now open in the lending sector for short term finance, Nadeem Siam attempts to fill it with his P2P fintech platform.
Fund Ourselves is a P2P fintech provider, offering loans that range from £50 to £500, provided directly from other individuals on their peer-to-peer platform. There are no charges applied for early repayments, and the maximum interest borrowers will pay back is 0.8% a day.
A unique selling point is that customers can borrow for up to 3 months, but receive an interest-free extension for up to 12 months if they are facing financial difficulty.
“We want people to leave in a better financial position than when they started,” Siam explains. “And not worse off than before.”
As a P2P platform, Fund Ourselves offers individuals the chance to invest their money into other borrowers looking for unsecured loans. The potential earnings for lenders range from 5% to 15% per annum based on the level of risk that they take on, with bad credit customers likely to pay higher rates. To ensure a diverse portfolio, investments will be spread amongst multiple borrowers, so you never have more than 10% in one individual.
Fund Ourselves founder, Siam explained his vision, “We are totally committed to provide smarter and simpler ways to deliver financial services, helping individuals to borrow or invest in a self-serving marketplace that is easy and safe to use. We believe we can empower people by disrupting the status quo with our Fintech products and chance the way people go about their financial lives.”