The digital micro-lender has secured a major debt investment from the alternative credit giant.
The £35m debt facility is expected to see Oakam’s lending activity in the UK accelerate by more than 180 per cent year on year, pushing the platform to further disrupt the global micro-lending industry and capture market share from incumbents.
Oakam has closed over 420,000 loans since it launched in 2006, lending out £320m to date to underserved, financially excluded communities. The platform provides access to straightforward credit and budgeting tools through its mobile app, while also offering its services through a network of retail stores in the UK.
“Consumer credit has long been broken for those at the bottom. With 12 million financially excluded consumers in the UK alone, there is a significant opportunity for Oakam to fill the large unmet need for better, more accessible and affordable credit,” said Frederic Nze, CEO and Founder, Oakam.
“Our new partnership with VPC will enable us to further fulfil our mission of transforming and empowering lives through a fair and inclusive service.”
According to the digital micro lender, its use of alternative data in its underwriting process has enabled Oakam to evaluate more applicants at a lower cost than traditional doorstep lenders. The company has built a strong track record of growth in the last decade since its launch in 2006, and its loan application levels have grown by 300 percent in 2017 to date.
The news may come as slightly surprising to those who are familiar with Victory Park Capital (VPC), as its major funds have been moving into greater balance sheet exposure throughout 2017. The investment firm was previously known for its dedication in funding peer-to-peer and marketplace lending platforms, making its latest investment in Oakam a diversifying endeavour in the alternative credit sector.
The new facility from VPC will enable Oakam to continue capturing this rising demand nationally and abroad, at a time when traditional models such as doorstep lending are facing mounting operational hurdles.
“Oakam’s model in micro-finance that captures the value of a digital approach without overlooking the role of human interaction has enabled the team to break into a highly competitive market,” said Gordon Watson, Partner, Victory Park Capital.
“Our investment follows a long-standing track record at VPC of supporting fintech companies scale and provide financing where traditional means fall short. We look forward to supporting Oakam’s continued growth.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.