The company was able to make this cut in interest rates as it has recently surpassed the $30 million mark in loan applications, and this has allowed the company to refine its proprietary credit algorithms to reduce costs.
Kevin Sandhu, Grouplend's CEO, commented:
"With unprecedented demand for our fast, convenient and cost-effective borrowing platform, we're excited to announce that we're making our rates much more precise, much more personalized and much more affordable for Canadians."
"This announcement is an affirmation of Grouplend's value proposition and business model. The more applications we receive, the more powerful our technology becomes. It gets better at determining optimal interest rates. It gets better at fraud detection. It learns how people are using the platform. We now have a highly refined sense of who our customers are and how to better service them, whether by evolving our existing products or introducing new ones."
The majority of Grouplend’s customers have taken out loans to pay off credit card debt or other higher interest loans. Credit card owners in Canada are usually paying about 20% on their balance, compared to Grouplend’s rates of 6.3%-17.5%. Also non-mortgage debt in Canada is around $28,000 per person, and so the opportunity to consolidate debt at a cheaper rate is welcomed by many Canadians.
"Our $30 million in applications so far has exceeded our expectations. Canadian consumers have raised their voices and asked for easier, faster and more affordable financial services, and we're proud to be giving it to them."
Sandhu also mentioned that the platform reached the $30 million mark a lot faster than he expected. This shows what a great appetite there is for alternative finance in Canada. The peer-to-peer market has been slow to develop in the country and it has been compared to where the UK market was in 2007, however, at the rate it is currently growing it will become a more developed market, more similar to the US and UK, very soon.