Lendela makes it easier for borrowers and lenders
By Chong Jinn Xiung December 18, 2018
- One-stop platform for customers to apply for loans with multiple lenders
- Has soft launched in Indonesia and the Philippines; will be in Thailand soon
THE process of applying for a loan has not changed for decades in Southeast Asia. But the arrival of fintechs could soon change things as a wave digitisation is sweeping across the region.
One of these movers and shakers is Singapore-based loan broker platform Lendela. Serial entrepreneur Shylendra A S Nathan (pic) together with fellow co-founder and chief operating officer Nima Karimi started Lendela with the goal of massively increasing the efficiency of matching borrowers with lenders.
While the rest of the financial industry is moving forward, the market for loans has painfully been stuck in the past. Information is not readily available to borrowers and comparisons of different loans is still time-consuming and difficult.
At the same time, it is equally challenging for lenders to gain customers as the process is highly inefficient, limited by physical branches and a time when lenders can come to them.
Hence, explained Shylendra, this was why the broker system was born as a measure to fix this as they act as a one-stop platform for customers to apply for loans with multiple lenders.
For lenders we bring down the acquisition cost per customer, taking out applicants that are not relevant and bringing genuine customers that could be returnees.
Shylendra has noticed that a large number of loans that pass through their doors are for weddings, followed by personal loans that are used to fund business ventures.
While Lendela doesn’t market itself as a business loan specialist, Shylendra does not deny that there is a strong demand from small proprietors running Small Medium Enterprises and businesses that require loans as they typically can’t get the loan from banks.
So how are they different from the average comparison website that also offers services like personal loan comparison?
“We don’t cloud our service with content and information,” said Shylendra who also acts as the chief executive officer. “We go straight to the point to help customers achieve what they want.
“As a broker, we need to be focused. The work is more than just sending a lead to our partners but we are looking to integrate with our partners and make the journey to secure a loan fast and easy for our customers,” he explained further.
“The idea is to work with banks in the long term and integrate with them via Application Programming Interface (API) eventually to allow for quicker approvals. From the conversations we have been having with the banks we are likely to see more of this integration happening in 2019,” he added.
Indeed, if one were to visit the Lendela webpage there is a simple interface with two sliders that asks a customer how much they want to borrow and the period of time in which they intend to repay.
From there Lendela will ask for some basic personal information before they run a credit check on the individual and recommending the appropriate loans.
Beyond Malaysia and Singapore
Lendela launched in Singapore and Malaysia in Q3 of 2018 and largely caters to a wide segment of the market including the unbanked. It does so by partnering with both banks and non-bank partners, though they declined to mention how many partners they have accumulated so far.
Lendela raised a US$942,000 (S$1.3 million) seed round in September that was led by Cocoon Capital and IMO Ventures. According to Shylendra, the funds will be used to solidify Lendela’s presence in Singapore and Malaysia.
Despite this, Shylendra stresses that it has not been a cake walk as the challenge has always been identifying the unique challenges within each market. This could range from differences in obtaining credit information on borrowers to adopting electronic signatures.
That’s not to mention that banks have traditionally not been receptive of fintechs though that is now changing.
Despite having just launched, Lendela is wasting no time in establishing itself across Southeast Asia. It has already soft launched in Indonesia and the Philippines and they are expected to launch in Thailand very soon.
Lendela is also targeting two other markets outside of Southeast Asia but they declined to mention which though they hinted it would be matured markets.