South England startup aims to solve short term money woes

A startup based in the south of England has raised funding to help household with short term lending problems.

Fund Ourselves, founded by Nadeem Siam, was set up in 2015 as a ‘viable alternative to high cost lenders such as Wonga and QuickQuid.’

The startup offers rates that are ‘more affordable’ than other high street lenders, offering loans ranging from £50 to £500 for a period of 3 months. A key selling point is that customers who are struggling to repay can have an interest free extension for up to 12 months, meaning that there are no late fees or default payments, which should help them get back on their feet.

Siam, a former engineer with NASA, has been looking to disrupt the high-cost lending industry for some time, challenging their high interest rates than often exceed over 1,000% APR.

Over the last 18 months, the UK has seen some of the most well-known and notorious lenders fall into administration following a surge of high compensation claims from former customers. Lenders such as The Money Shop, Piggybank and Uncle Buck have fallen into administration, after having to refund previous customers and often face an administration fee from the Financial Ombudsman of £500 on top, per customer.

More recently, Bournemouth-based Amigo, has agreed to refund over £100 million worth of claims, but has plans to continue lending by December this year.

Fund Ourselves officially works as a peer-to-peer lender, combining borrowers who are looking for short term loans and a pool of investors (individuals) who can invest and earn rates of 5% to 15% per annum. There are a number of successful peer to peer lenders that operate in this way, such as Zopa and Ratesetter.

As an investor, your money is pooled across a number of borrowers to diversify your investment - and you can keep track of your earnings through the Fund Ourselves portal. The riskier the candidate that you wish to lend to in terms of credit profile, the higher your return can be.

With the run up to Christmas and a challenging financial year for many during Covid-19, households are advised to avoid payday loans where possible. If you are looking to borrow money, you should consider speaking to your bank about various schemes and initiatives that are now available during Covid-19. If you are having debt issues, consider getting some free and impartial advice from the likes of MoneyAdviceService or the Citizen’s Advice Bureau.