- Borrowers make 33 million online loan searches a year in the UK but don’t buy
- FairMoney.com launches crowdfunding drive to be the USwitch of loans and help customers borrow safely
Price comparison website FairMoney.com is highlighting the underserved market for personal loan comparisons as it launches a fundraising drive to fuel ambitious growth plans aimed at becoming the USwitch of loans in the UK.
USwitch, which tapped the underserved UK energy switching sector only a few years ago, has just been sold, together with its sister and parent companies, to private equity for £2.2 billion.
FairMoney.com is developing unique Machine Intelligence capability that will deliver the most personalised, fair and transparent service, not only on loans, but soon on all products and services, to all customers.
Its research shows that more than 33 million online searches a year for loans are made in the UK, but existing price comparison websites (PCWs) are converting only a small fraction of these and are badly failing both borrowers and lenders.
FairMoney.com, inspired by the non-profit Campaign for Fair Finance, which aims to drive the financial services industry to offer fair credit to all customers and especially those who need it most, is seeking to raise new funds, to enable it to deliver rapid growth, through investment platform Shadow Foundr. Shadow Foundr has commented favourably on the exceptionally high level of returns available to investors in its FairMoney.com investment proposition.
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Shadow Foundr, which meticulously vets all investment proposals before any crowdfunding starts and, uniquely, only then puts them live once they have themselves raised at least 30% from their own seasoned, professional investor pool, has launched the fundraising at www.shadowfoundr.com/investments/514/fairmoney-com and has already hosted successful webinars for potential FairMoney.com investors.
Industry data shows that personal loans account for just 7% of the existing PCW market and with 11 million UK customers using the sites each year, FairMoney.com has identified the potential to enhance the market for the benefit of lenders and borrowers.
It believes current PCWs are not trusted on loans by borrowers and do not have the technology to provide reliable leads which convert well enough into business for lenders. FairMoney.com currently has links with 44 loan providers including major banks and P2P companies, offering 71 products ranging from loans for people with good credit ratings to those with adverse credit ratings.
FairMoney.com has developed unique Machine Intelligence technology which recommends totally, up-to-the-minute, highly personalised products to customers in an unbiased way and earns its revenue through cost per click or a fee or percentage of loans made, from advertisers on its website and for visitors to their advertisements.
Fairmoney’s proposition thus provides a win-win by directing its customers to the lowest priced lenders where the customer meets the lender’s underwriting standards through a seamless customer-centric journey. No frustration for the customer on being rejected for not meeting underwriting criteria, no rejected applications impacting credit references, and price comparisons which are honest and transparent. For the lenders, no time wasted on rejected applications, dramatically reducing origination costs.
Founder Dr Roger Gewolb, who previously founded both the UK’s multi-billion pound fair car finance industry for people with credit problems and the Campaign for Fair Finance, has invested £500,000, said: “We are tapping into the huge market opportunity that remains underserved by current PCWs for the Loans market. It’s low-hanging fruit.
“The opportunity exists to quickly establish Fairmoney.com as a champion of the consumer in the field of loans and thereafter for all products and services to do with money as the current PCWs are insurance focused.”
Fairmoney.com foresees an eventual trade sale to one of the larger PCWs as the most likely exit, but an acquisition by private equity or a financial services group is also possible, as is an IPO.