Exclusive interview with Plend’s Nathan Spiteri
Nathan Spiteri, head of growth at Plend, talks to Marc Shoffman about how the consumer lender is solving a problem in the sub-prime credit market
Most peer-to-peer lenders are focused on the property and business space but Plend is planning to shake things up when it comes to personal loans.
The open banking-backed consumer lender gained full Financial Conduct Authority (FCA) approval in May 2022 and already has a waiting list of thousands of borrowers.
In further recognition of the firm’s achievements, Plend won the Rising Star award at the Peer2Peer Finance Awards last month.
Its focus on financial inclusion – it was launched after co-founder Rob Pasco moved from New Zealand to the UK and struggled to open a bank account with no credit history – helped the platform to attract £40m of seed funding from investors in November 2022.
Nathan Spiteri (pictured), head of growth at Plend, explains what attracted him to the platform and its plans to develop and provide much-needed support for borrowers.
Marc Shoffman (MS): How did you become involved in Plend?
Nathan Spiteri (NS): I am from Australia and worked for Commonwealth Bank in various lending roles. I migrated to the UK just before Covid, and met Rob and Jamie at the pitch deck phase.
I was working for Wagestream, another ethical fintech, which is where I developed the base for financial inclusion. I fell in love with Plend’s mission. I saw the dedication from the founders and the personal reasoning behind launching Plend. It is a personal story and less commercial than other business. I liked the focus on helping people and financial inclusion.
MS: What has been the response since launch?
NS: We launched a beta platform in May last year. We put a very modest budget behind the social media campaign and weren’t expecting to get the response we did. In the month we launched in beta, the waitlist grew to 2,000 people. It means more people are looking for credit, so is a shock rather than purely a positive that we are getting business. It shows there is a problem.
Our financial inclusion report underlined this problem. A lot of people want affordable credit and the fact we are affordable in the sub-prime market is helping. You can see that from the Trustpilot reviews, as we are saving people hundreds of pounds per month. If you have an attractive proposition then the product is all the marketing you need.
MS: What rates do you offer?
NS: On average our loan rates are 13 or 14 per cent. Interest rates paid by borrowers are capped at 25 per cent but can be as low as four per cent through partners we provide embedded finance through.
We can also slide in at point of sale to help retailers increase their sales, by providing loans to their customers.
Read more: Plend hails power of open banking on anniversary
Our average loan term is three to four years but we offer loans ranging from one to five years. The average amount borrowed is £8,000. The idea is for it to be a longer-term sustainable loan. Typically 70 per cent of the approved loans are for debt consolidation, as it saves borrowers on annual interest. Second to that is home improvement, helping people enhance their lifestyle.
MS: Who are your typical borrowers?
NS: When we started out we expected borrowers to be younger people with thin credit files or people who haven’t built up a credit score. However, we have found that our average borrower has an income of £40,000 and is around 37 years old. That just goes to show that you don’t always know what people’s credit scores are and how important affordability is.
You can have a high income but a low credit score. We have provided a tailored solution that reflects someone’s current financial situation rather than just their history.
MS: Who are your typical investors?
NS: We have a mix of high-net-worth individuals and angel investors. We also partnered with Sivo, the US debt fund. Our strategy is to build on that to find more partners to provide debt with. Technically the model is peer to peer as the funding isn’t coming from the balance sheet but we don’t actually have retail investors. For now, we are focused on where we are but a retail platform is on the horizon.
MS: How will the £40m funding be used?
NS: It is a mixture of debt and equity. There is a portion that will be lent out to customers and then a part for the operational team, as well as for growth and investment on the platform side. We will also be seeking further funding including a series A round.
MS: How big is your loan book?
NS: We have processed more than £35m in loan applications so far. That is not all funded but it shows how busy the market is.
MS: What is your focus for business growth?
NS: We have a big focus on partnerships. There is also the embedded side with retail partners as well as apps and other fintechs who don’t have FCA regulation.
Others are attracted to our model and how we can look at additional data points and provide an attractive solution. We get to speak to a lot of investment platforms – there is a rise in interest for alternative investments. People want to invest in fine wines, whisky and vintage cars. The fact you can invest in a good cause and help people is also an attractive proposition.
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