Nadeem Siam, a London-based entrepreneur, has launched a start-up targeted at a gap in the short-term lending market. Fund Ourselves offers a platform that utilises peer-to-peer lending to offer a win-win situation for borrowers and their lenders – with low-rate loans and returns for investors of 5% – 15%.
Through this innovative start-up, Siam strives to tackle what he states as “the Wonga problem”. The high-cost short term (HCST) lending industry has been heavily scrutinised in the past, some lenders notoriously referred to as “legalised loan sharks” that were often found to charge staggering rates of 1,000% or above.
After stricter regulations were enforced by the Financial Conduct Authority (FCA) in 2015, many of these controversial lenders lost their power, and had to leave the industry as a consequence.
Following this, from 2018 onwards the U.K.’s financial watchdog encouraged those who were customers of certain high-cost lenders to make claims on loans they felt they were mis-sold. These mis-sold loans included financial products that lacked appropriate affordability and eligibility checks, subsequently leading to financial debt for their borrowers.
This resulted in some of the once biggest lenders throughout the U.K. to be fined millions, some even hundreds of millions. The likes of Wonga, The Money Shop and QuickQuid are some of the most infamous examples of lenders to have fallen into administration due to these fines.
Whilst many of the biggest lenders in this market have fallen, the demand for short-term loans still remains. Siam feels that with such a demand should be lenders to serve it, stating “We want people to leave in a better financial position than when they started” and “not worse off than before”.
“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 change the way people go about their financial lives.”
What Is Fund Ourselves and How Does It Work?
Fund Ourselves is a start-up in the fintech industry, offering loans and investment opportunities via peer-to-peer lending. The loans offered can range from £50 to £500, of which are provided by investing individuals also on the platform.
With these loans, borrowers can benefit from 0 early repayment charges, and a maximum interest to be paid back of 0.8% a day. In addition to this, users of the platform can also invest by lending money to said borrowers, with potential earnings ranging from 5% – 15% per annum.
In addition to this, whilst customers are able to borrow for a maximum period of three months, if facing financial difficulties a maximum 12-month interest-free extension can be applied.
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