NAIROBI, Kenya - June 18, 2018 - Nairobi-based Lendable Inc. (Lendable), is one of the first fintech companies to publicly adopt the Responsible Finance Forum’s Guidelines for Responsible Investing in Digital Financial Inclusion. As one of the inaugural signatories to the Guidelines, Lendable is today announcing a new internal philosophy on responsible lending relevant to its debt-financing platform.
Lendable’s technology-enabled deal platform assesses alternative lender financials, customer collections, and customer payment histories. It uses payment patterns and secondary data to predict future payments and to automatically price and monitor the financing facility.
Daniel Goldfarb, CEO and co-founder of Lendable says, “We believe that responsible lending is good business. If you provide an irresponsible lending product to borrowers, over time they will respond by not repaying. As such, we invest in helping our alternative lenders improve their systems and practices to meet global standards of responsible investing.”
According to a KPMG report on global fintech investment, digital lending is growing at a rapid pace, with over $31 billion invested in fintech companies annually. Across the African continent, digital lenders are extending credit to SMEs and consumers to grow their businesses, mitigate economic shocks, and finance productive assets - including renewable energy assets.
As opportunities created by digital lending have increased, so too have the risks surrounding digital financial services for investors, investees, and customers.
Critics have highlighted the dangers of credit leading to over-indebtedness that can result from high interest rates and confusing loan terms. These concerns are behind the Kenya National Treasury’s recent draft bill to regulate digital lenders and potentially cap interest rates.
Goldfarb says, “Lendable’s responsible investment philosophy addresses concerns by laying out standards that the deal platform sets and the direction we aim to help our clients grow. As a finance company that enables digital lenders to secure debt financing from offshore investors against their portfolio cash-flows, Lendable recognizes the key role investors play in ensuring responsible lending ideals are translated into practice. We have worked directly with our clients to improve governance and customer contracts.”
Lendable joined the alliance of over 50 fintech investors and digital finance investors in launching the Global Guidelines in Amsterdam on 20 June 2018. The Guidelines are aimed at spreading the benefits of the fintech revolution more widely.
Lendable’s philosophy highlights the importance of conducting thorough risk assessments during due diligence, promoting the responsible use of data, and lending only based on customer’ repayment capacity.
Goldfarb concludes, “Lendable hopes that our responsible lending philosophy will be followed by other investors and fintech companies similarly implementing the global guidelines at a company level.”
Anne Njoroge, firstname.lastname@example.org, +254 712 238 589
Lendable bridges the gap between institutional debt investors and high growth alternative lenders in Africa. The company employs technology-enabled deal services to help alternative lenders access structured finance to scale up their operations.
Lendable is able to reduce the time, resources and frictional costs incurred in closing deals. It provides deal origination, due diligence, standardized documentation, customizable online pricing models, payments administration and post-deal reporting.
Alternative lenders are non-banking, asset backed finance providers, who operate Pay-as-you-go (PayGo) platforms and in many cases also provide microfinance loans. They provide under-banked consumers with access to credit and enable them to own productive assets. These productive assets include home solar systems and appliances, farm equipment, livestock and vehicles. These platforms can also finance access to utility services like power and water.
The company helps lenders access multiple finance rounds valued from US$250,000 to US$10.0 million, with terms of 6 to 18 months and annual percentage rates of 12 to 18%. Alternative lenders that have secured capital through Lendable’s platform also get free access to Lendable Labs’ business intelligence and customer quality score tools, empowering them to improve their collections.
Lendable was founded in 2014 and the team has experience in delivering debt and equity deals with leading venture capital funds and investment banks. Since inception, Lendable has analyzed over 700,000 loans, signed up six alternative lenders, and has plans to move $40 million in capital in 2018. The company has offices in Nairobi and New York.