After a successful pilot launch, a game-changing online lending service has announced ambitious growth plans as it looks to revolutionise the way people access credit in the North West and throughout the UK.
Set up by senior figures from the UK’s financial sector, including ex Citibank Executive Paul Salariya, FairQuid has confirmed that it hopes to bring an end to the high-interest predatory lending practices of high street lenders and Payday loan companies.
The online financial wellbeing platform – authorised and regulated by the Financial Conduct Authority – uses the length of service and performance of an employee as the core criteria of whether a person is eligible for a loan, and is looking to bring an end to the credit scoring model – a system it believes only serves to place people deeper into debt.
By partnering with some of the UK’s leading credit unions, FairQuid now offers people low-interest loans with ethical rates provided directly from a person’s employer with fixed, affordable, monthly payments taken directly from their salaries, while also encouraging employees to save as they repay. FairQuid offers an attached savings component which nudges employees to, ‘Save as you Borrow,’ a UK first.
FairQuid CEO, Vishal Jain, an ex Booking.com head, who comes with decades of experience in operational roles with major global software and tech companies, explains:
“Growing up in India, I experienced first hand the positive impact of micro-finance and ethical lending. We know that 46% of UK employees struggle with their finances and the average UK household debt is £8,000.
“Over 16 million people have less than £100 in savings and this lack of savings keeps them in a cycle of debt which is hard to break. Employees bring this stress to the workplace which leads to lower productivity, decreased engagement and higher attrition. We want to do something about that.”
“Using Credit unions as our ally, FairQuid has developed a completely new model for ethical lending. Credit Unions are a Not for Profit community-owned, community-driven finance provider. They don’t believe in aggressive lending practices and have caps on the amount of interest they can charge an individual.
“They only have 1.7 million members, around 5% penetration in the UK. They want to provide an alternative to predatory lending practices but end up not being able to lend. This is where we come in.
“To break the cycle of debt, we think a strong habit of saving is essential. We offer employees the possibility to, Save with a Purpose, therefore building healthy habits and helping others get out of debt at the same time alongside our partner Credit Unions. When a loan is taken out through the FairQuid platform we also nudge employees to, Save as you Borrow, to promote positive behaviour in the future and nudging employees to save regularly.
“We’re encouraging all UK employers to join our movement and make a positive impact on people’s lives, one employee at a time.”
Since soft-launching in 2016, FairQuid has already struck up working relationships with HR departments within the legal and manufacturing sectors in the North West of England.
It is now pushing forward to offer its unique model to all businesses throughout the UK and will look to more than treble its workforce in tech, sales and customer support to meet the expected high demand for its services in the next 12 months.
Vishal Jain continues: “We asked the question. Why don’t we use employee history as a proxy for accessing finance and use this as their Credit Union membership history? Let’s change the product. We will use people’s length of service as a direct signal of their ability to to stay employed and make repayments. The longer you’ve been with an employer, the more you can borrow. This is the benchmark.
“From an employer’s point of view, you’re rewarding loyalty and from a Credit Union point of view, they have a new way of assessing risk. This will allow them to increase their penetration levels in the UK and potentially access millions of new members.
“We’re proud to have 85-97% approval rates because we’re not focusing on credit scores and credit history. 15 – 20% of approved applicants have had CCJs and negative impacts on their file but we believe this doesn’t mean they can’t make all of their repayments.
“There is a clear need and demand for our service. There is a lot of education in the market that needs to be done and we have a lot of work ahead of us.”
Meanwhile, former Citibank Executive Paul Salariya said Vishal’s vision for FairQuid and his desire to curb the aggressive practices of the high-street lenders were the core reasons for joining the firm as Chief Commercial Officer.
He adds: “When I left Citibank in 2017 Credit Unions and FinTech were at the forefront of my mind. When FairQuid came knocking at my door, it was as if it had been tailor-made for me and exactly what I was looking for.
“I was really taken with Vishal’s vision and it resonated with me. I know that the UK has a problem with saving.
“We’re not trying to save the world but I wanted to try something different and that I felt would be more rewarding for me as an individual. After a wonderfully rewarding career at Citi and now this being the latter part of my career , I wanted to be involved in something that can make a difference.
“I was connected to Lehman Brothers and lived through the financial crisis. I know first hand that the financial system is unfair in a lot of ways.
“Within the retail banking system in this country the inequality gaps are getting larger and larger and if you’re at the bottom of that pile it’s almost impossible to break the cycle of debt.
“There’s an opportunity for people to use our technology to make a positive change.”