Growing at a rate of 122% YoY since launch has given Oakam the tools required to take on the global issue of the under banked
UK-based lender Oakam (www.oakam.com) has this month announced it has lent more than £250m since launch. These latest figures highlight that demand for Oakam’s services has increased dramatically; the first £125m was lent over the first six years, the following £125m has been lent in just the last two and a half. In fact, demand for Oakam loans has increased 122% on average every year over the company’s lifetime. As of July 2015, it has 20,000 active customers and manages a portfolio of £20m.
Oakam was founded by Frederic Nze after he recognised a need to help those without a bank account to access credit in the UK. For most of the population, its relatively easy to access lines of credit from banks, such as overdrafts and credit cards, to deal with emergencies, un-expected costs, funds to improve or start a small business. But the banking system is not designed for everyone and it excludes millions of vulnerable people in the UK. These are the ‘unbanked’ or ‘under-banked’ and their situation along with limited options makes them vulnerable and more likely to struggle to get a job/bank account/insurance.
That’s where Oakam comes in – its provides a financial lifeline to these people, giving them access to affordable credit, when no one else will help them.
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The average loan amount is around £1000 and are taken out over a manageable period of between three and 36 months. Oakam is also now seeing more requests for loans to purchase larger items, such as work vans, or for deposits on retail space. The company plans to offer larger loans, of more than £5,000, to fulfil this this demand from 2016.
Oakam’s aim is for customers to be understood, not judged, whilst accessing the credit they need in a responsible and intuitive way. The company therefore employs people who are from the local community and have even been customers so that they can empathise with existing customers. Oakam’s staff care, with recent satisfaction research showing that 76% of staff are satisfied with their jobs and 97% are ‘committed to Oakam’s success’. They speak 27 languages and even more dialects to help aid understanding of the product and its terms.
Oakam founder and CEO, Frederic Nze said, “The accelerated rate at which we’ve hit the £250 million milestone is proof that the traditional banking system is not for everybody and demand for services to support these communities is increasing rapidly. At Oakam we want to do more. By transferring what we’ve learnt in our stores to the digital world we can offer our services at a global level and go some way to tackling the challenge of serving the estimated three billion under banked adults in the world. Just because someone doesn’t have a credit history, it doesn’t mean they don’t need credit.”
After seven years of collecting and analysing the human insights that drive responsible borrowing and payment behaviours Oakam is now transferring its analogue knowledge to the digital world. Oakam has recently launched a free app which allows current customers to track their payments, balance and how much money they owe. Through the mobile app, Oakam is currently trialling the latest engagement and incentivisation techniques to positively influence customer borrowing behaviour. Oakam is also using advanced data science techniques to make the best underwriting decisions and reward customers with lower interest rates. In this way, the app helps borrowers to meet repayments and give them more control over their loans. Looking ahead, new digital ways of assessing credit worthiness and building trust will mean Oakam can serve its customers at a lower cost and disrupt the whole lending sector.
Oakam believes lending doesn’t have to be just a functional transaction – the goal is to build a bond, a relationship based on trust with customers. Advisors listen and discuss their circumstances and needs face-to-face or over the phone before making a decision on how much Oakam lends.