“I don’t like hearing about people going to a payday lender for a loan. If they do, I’ve failed as a banker”
says Sechaba Ngwenya, CEO of Creditable. His startup sits in a place where banks don’t want to go. A place overflowing with savage payday lenders - exploiting vulnerable people in problematic financial situations like professional loan sharks.
Creditable is a technology that enables employers to lend money to their employees - a small loan to help until payday, for unexpected medical bills - repair costs - tuition fees - it could be for nearly anything. Creditable doesn’t control funds - nor does
it have a say in the finances of the business - it plugs into a employers ERP software and gives them the power to loan money to their employees.
I can’t help but ask - ‘what’s the point?’ - why do employers need to loan to their employees in the first place? He delivers an answer I feel has been drilled into him (He says earlier ‘I’ve said this so many times I could do it in my sleep’)
‘Business get to lend their money and make a small return - they can attract and keep their staff with this system. They can use the data to measure productivity of their employees’
If an employee agrees, the employer can monitor how the loaned money is being spent - giving a clearer picture of an employee’s spending habits and fortifying the KYC process.
‘The market accepts payday lenders - regulators hate them - other banks hate them’
It’s the connection between employer and employee which is Creditable's USP. We spend so much time at work, in contact with our colleagues and our bosses, that sometimes they know us better than our family - and certainly better than our banks.
Payday lenders pride themselves on giving loans to nearly anyone. Their eye-watering interest rates have received much media attention and caused misery among borrowers.
Banks don’t want to get involved in small, bridging loans for consumers - the returns are too small. Payday lenders are squandering their chances with their dirty reputations - so now Creditable is faced with an incredible opportunity.
‘I see Creditable, not becoming a payday lender - but being better than a bank at enabling credit.’
‘At the end of my time at Startupbootcamp I want to have big, household names using Creditable technology.’
It isn’t an unambitious goal - but it makes you wonder how much different a big corporation is to a major bank. Are they more open to new technology and new culture?
Empowering your employees with loans is a financial and altruistic process - it helps employees in hard times and keeps them loyal at the workplace.
There is much to consider for any business wanting to adopt Creditable - they must train staff in using the software - there’s extra work for finance controllers. And who’s liable when an employee fails to repay and what’s the process?
But these feel like small prices to pay for the benefits - the whole short-term lending industry is broken. Payday lenders are the highway robbers of the modern times - could Creditable be the hero we need?