There are a number of challenges in the consumer loan space which include high cost of consumer credit, onerous loan processing procedures and reluctance by traditional financial institutions to provide low amount consumer loans seen as not being economically viable. FINT Technology Africa Limited is a Fintech Company seeking to address these challenges via an online peer-to-peer lending platform recently launched in Lagos. BusinessDay met with FINT CEO, Chiwete Njokanma recently for an interview on the operations of the Company.
What is the idea behind FINT Technology Africa Limited?
Well, credit is a huge issue in Nigeria; and Africa as a whole. The existing systems do not accommodate all potential borrowers because of their credit status or lack thereof that makes them ineligible for traditional bank loans. To bridge this gap, we offer a peer-to-peer lending platform where lenders can support borrowers
There are quite a number of online loan platforms out there now. What makes FINT stand out?
FINT is currently the only platform that connects verified borrowers with lenders. We eliminated a lot of unnecessary costs; thereby, making the loans affordable for the borrower and rewarding to the lender. The FINT platform is also relatively easy to use, with an estimated sign up time of 10 minutes. Users can sign up instantly and apply for a loan, provided that all the necessary documents have been uploaded and verified.
From your website, there is a risk fee for applying, can you tell us more about this?
FINT is a loan marketplace that connects lenders to borrowers. As such, FINT does not actually give loans but allows lenders lend to borrowers to earn returns. Because of this, it is important for FINT to protect the lenders on the platform by ensuring that borrowers are who they claim to be and have the ability to pay back the loan amounts they apply for. The risk assessment fee goes to third- party service providers who aid in determining the credit-worthiness of the borrower and in verifying the authenticity of the information the borrower provided.
What documents do you require from a borrower to facilitate their loan application?
To access a loan on Fint platform, the borrower will need to upload proof of ID and 6 months bank statement.
What is the best way to take advantage of FINT as a lender?
For our lenders, we want to provide an attractive risk reward option that allows them to put their money in with a low barrier of entry
In addition, we offer lenders the ability to diversify their counterparty risk on the platform and lend to only borrowers that fit their risk appetite. That way, they are not exposed to one borrower alone.
Why should lenders trust you with their money?
We have secured the Lagos State Money Lenders License and have a number of affiliations that reflect our credibility. Also, insurance is mandatory on the platform for all loans. This serves as a form of credit enhancement for our lenders. The loan insurance arrangement ensures that lenders are repaid both principal and interest in the event borrowers default due to loss of life, loss of job, physical disability and critical illness.
What happens if a borrower refuses to pay back the money they borrowed?
We have an in-house team and are partnered with collections/default recovery agencies. Defaulters can be prosecuted on both a civil and criminal basis. However, before we involve our collection team or our third party service, we go through our internal debt recovery process.
In addition, the loan activities that happen on our platform are reported to the Credit Bureaus, who in turn make the status of the loan visible to banks and other lending institutions. In the event someone defaults on our platform, their chances of accessing a loan elsewhere is greatly reduced, if any at all; serving as a deterrent to potential defaulters.
What has been your most challenging experience since you launched?
In our experience, the standard belief that governs Fintech companies like ours, is that if it sounds too good to be true then it is in fact too good to be true. We started FINT at a time when many of our potential users had lost money in some of their first forays into non-traditional finance platforms that predominantly provided services online, leading to an almost complete degradation of credibility and trust across board.
Encouraging lenders to put aside their fears and trust our product hasn’t been very easy. However, this is a challenge the FINT team was well prepared for. While loans on the platform are not guaranteed, our proprietary risk agglomerating algorithm, loan insurance arrangement and other risk management structures we have in place have managed to allay most of the fears that surround our business model. , Even though the number of borrowers registered on FINT still exceeds the number of lenders, we are confident that in time this gap will fall, following continued success stories.
Where do you see FINT in the next 5 years?
Geographically, we see FINT expanding beyond Lagos, to other Nigerian centres of commerce, and then beyond the country’s borders to the rest of Africa. In the medium term, we aim to introduce different products and packages, to better assist lenders who may not have the time to micro- manage their engagement with borrowers on the platform. Lastly, because of the large gap between the number of people searching for credit and the amount of funding available, we see FINT gaining a greater piece of the market-share in the loan market place.
