Former Royal Bank of Scotland banker Richard Bartlett has become chief financial officer at Uberima, a fintech consumer lender he contemplate to shift to an asset-backed funding form. Uberima will offer short-term consumer loans, and styles itself as a for-profit social enterprise taking on so-called ‘payday lenders’ that have gained a reputation for exploiting low-income borrowers with sky-high interest rates. Financial services can be ridiculously expensive for those least able to afford them. Uberima says “its edge will come from the technology it will use for credit decisions, allowing the firm to provide cheaper loans while still making acquisition”.
The model is build on a credit engine that allows us to take a more granular view of credit risk, which will make our loans 10%-40% cheaper than the alternatives, depending on maturity. Bartlett left RBS a year ago, after an 18-year career in the capital markets, having most recently been head of UK client coverage at the bank. He ultimately intends to bring Uberima to the fixed income markets with asset-backed transactions.
There is a perception of exploitation from short-term lenders because of the high interest rates they cost. The model cuts the right balance between social impact and profits, but we need to raise competitive commercial debt to make it viable. Uberima is currently running historical data through its credit engine, operating on capital supplied by its four co-founders, and needs to raise more equity. They are already exploring moving into other markets where poor credit scores can be problematic for consumers, such as mobile phone contracts and pre-paid credit cards.
Uberima’s stated social mission is to provide affordable credit and other financial services to individuals who are excluded from, or undeserved by, mainstream credit and financial services markets. The company is committed to re-investing at least 50% of its interests.