Founded in 2020, Fintern is a fast-growing UK-based credit technology platform. The fintech has just secured an additional €9.5 million, bringing the company’s total capital raised to €47.5 million. The funding was led by Hambro Perks, with inclusion from Fintern’s primary debt provider, Varengold Bank, as well as other high-net-worth individuals.
On a mission to make affordable loans available to more people, the London-based fintech is transforming the credit industry. There is more data available than ever before, we truly do live in a data-run world, yet, most lenders still base their decisions on old-fashioned credit scoring systems. According to Fintern, this is leaving over 15 million people in the UK facing unnecessarily high borrowing costs and unsuitable credit products.
Gerald Chappell, CEO and Co-founder at Fintern, said: “Today marks an important milestone for Fintern in our mission to make consumer lending accessible and fair. Our next-generation consumer credit technology is delivering significantly improved outcomes for consumers, and I’m excited to see this impact through our own lending, and through the technology, we provide to our partners. I am very pleased that our investors and partners have recognised the strength of our product and loan performance. We are confident about the next stage of our growth and remain committed to making consumer finance accessible and affordable to people who deserve it and have thus far been underserved.”
Fintern uses Open Banking and AI to make better lending decisions and to get a true picture of each applicant’s unique financial situation. The company looks at a variety of factors – what you earn, how you spend, and what’s left at the end. By combining this data with several other sources, Fintern can base their lending decisions on what someone can afford to borrow, rather than relying on an incomplete snapshot of the past. The fintech firm wants to make lending easy, open, affordable and accessible.
Since launching its consumer lending product in March 2021, Fintern processed more than 50,000 loan applications and proved that this affordable alternative works. The solution offers the flexibility to manage loan repayments around customers’ personal needs with lower interest rates than the market. On average, customers who choose to consolidate their debts with Fintern save £1,125 in interest costs compared to traditional lenders.
The young company claim that with their lending system, credit loss rates are less than half of those that the traditional credit scoring system would have otherwise predicted. This is achieved while expanding access to affordable credit: over 60% of Fintern’s customers would not have been approved for their loans had they been assessed by traditional methods.
Michelle He, COO and Co-founder at Fintern, said: “I know first-hand what it means to be denied access to vital financial support. When I first moved to the UK, I was unable to get a loan despite my full-time employment. It was incredibly frustrating and exposed many of the issues within the current lending system. After working within this system with Gerald, we decided we were in a unique position to change things for the better. As we emerge from the pandemic, Fintern is now more relevant than ever for those who seek financial stability and support. We’ve achieved a lot, but there is more to be done, and I am grateful to be part of a team who work tirelessly to make our product even better.”
Fintern’s consumer lending business has also served as the first client of the Company’s B2B credit analytics and underwriting software. Part of the capital raised will be used to build out the B2B team to integrate with the growing pipeline of external clients internationally.
Fintern aims to build a £1 billion loan book in the UK over the next 5 years, whilst using the experience gained from their own lending business to strengthen their B2B proposition.
George Davies, Partner at Hambro Perks, said: “We are excited to support Fintern and their mission to use Open Banking technology to drive fair finance for consumers. Not only does Fintern provide fair lending products for consumers in a way that is crucial and missing in our society, but they have built a platform that is truly effective and unparalleled in the market. We are enthusiastic about Fintern’s innovative product and are confident that its technology has the opportunity to change the industry dynamics for the better.”