Nadeem Siam - Surrey-based peer to peer lender Fund Ourselves

A Surrey-based startup is looking to solve the UK’s problem with high cost loans, All About Weybridge is informed.

Fund Ourselves was set up by Surrey local, Nadeem Siam, a former NASA engineer who was puzzled by the UK’s reliance on high cost loan products such as payday and logbook loans, something that is used by over 3 million Britons a year.

Once a booming industry, the effects of strong regulation has seen the industry take a massive blow, with some of the largest lenders falling into administration due to hefty fines and large compensation claims. The likes of Wonga, The Money Shop and QuickQuid have exited in the last two years, with another firm, Amigo, also halting their lending.

“This has created a short supply of companies that can offer affordable loans,” explains Siam, “despite the demand for these products being very consistent.”

“But the main problem is that whilst these high cost loans can be effective, they often carry rates of up to 1,000% APR – and whilst some people can pay them off, those that cannot are left with a higher debt that they cannot get out of.”

With this problem in mind, Siam set up Fund Ourselves, a peer to peer lender which connects investors and borrowers who are looking for short term loans for up to £1,500.

As an investor, it is an appealing proposition, with a minimum deposit of £100, you can receive annual returns ranging from 5% to 15% depending on how much risk you are willing to take on. Good credit customers can offer returns of around 5%, whilst lending to those with poorer credit histories can offer up to 15% annual return – and your investment is diversified across a pool of borrowers to manage risk.

“What separates us from other lenders and addresses the ‘Wonga problem’ is that we have no penalising structure if a customer is struggling and unable to keep up with repayments,” Siam explains.

“Charging default fees and rolling over debt was a key feature of the traditional high cost lender’s business model, but we have eradicated that. If you cannot repay your loan, you are often hit with default fees, added interest and a black mark against your credit score.”

“But with Fund Ourselves, if a customer is struggling to repay for our loans which range over 4 to 6 months, we can extend this for free for up to 12 months and it will not impact their credit score. This should help the customer get their finances back on track in an affordable way and they can leave Fund Ourselves in a better position than when they started. That is the goal.”

With the customer service team based in Woking, their role is to validate any potential customers through a series of credit and affordability checks. Whilst investments are not covered by the financial services compensation scheme, Fund Ourselves does have a provision fund in place to recover any losses and the customer service team will also follow up on any bad debts to maximise returns for their investors.