A London-based entrepreneur is offering what he describes as a more responsible alternative to high-cost lending.
Nadeem Siam launched Fund Ourselves, a peer-to-peer loans provider which has been designed to help those looking for short term finance under more flexible terms.
Customers can borrow £50 to £500 over a period of three months, but where typical payday lenders will charge late fees for non-repayment, Fund Ourselves offers an interest-free facility to repay over 12 months if the customer is having payment issues.
The development of Fund Ourselves comes after a huge regulatory crackdown on payday lending and an influx of claims compensations which has seen the biggest names in the industry fall into administration, including Wonga, QuickQuid, Piggybank and Sunny, earlier this week.
With around three million Britons using high cost lending every year, there is a greater demand than ever for short-term loans, especially with some of the largest players no longer active.
The loans are issued by a pool of peer-to-peer investors, which can trade openly on the platform. Using a system known as Autodiversify, an investor’s money is spread across multiple borrowers to minimise the risk of bad debt and maximise the chances of reaching the full return. Investors can start with as little as £10 and track their results in real-time online.
Individual investors can earn between five and 15 per cent a year through Fund Ourselves, depending on the level of risk that they take on, with bad credit customers offering higher rates of return.
Although investments are not covered by the financial services compensation scheme, every borrower will undergo a series of credit and affordability checks prior to funding and there is a customer service team available, currently based in Surrey, to follow up on collections. A provision fund is also in place to account and reimburse any potential losses for investors.
Founder Siam says his motivation was to offer a viable alternative to payday loans, providing affordable finance and serving the gap now created from the Wonga generation.
“Especially in Covid-19, there is a short flow of cash and very limited options for people looking for loans,” he said. “Fund Ourselves is delighted to fill the gap and offer a more affordable financial product that aims to help people come out of debt, not exacerbate it.”
For more information, visit: fundourselves.com