Sprint Financial Services – the Jamaican lender – is seeking a pool of peer-to-peer lenders who can offer a maximum of $50 million. The move will allow Sprint to grow its loan portfolio by matching these lenders with its borrowers. Christopher Barrett - CEO – commented on the need for such a plan:
"Our current demand is exceeding our supply which is good news, but it can also be bad when you can't expand, hence the advertisement. We are trying to get some lenders in so we can leverage and get the funds out".
Sprint has grown impressively to date - having completed $48 million in loans and growing at a rate of 30% per annum. Barrett pointed to the sustainability of Sprint’s progress:
"Our portfolio at risk (PAR) is 1.06 per cent. Our 30-day PAR is 1.08 per cent and for seven days, PAR is 2.27 per cent. This is actually very, very good, given that the industry standard for MFI's is 15 per cent in PAR".
On top of this, the company also boasts a 98% repeat rate – meaning that once they land a customer, they retain the customer.
The CEO puts their low default rates - lower than 2% - down to their stringent operating procedure. The company claims that this includes both state of the art technology and physical check on the residence/ business property. The CEO also commented that "we also use the NSIPP [National Security Interest in Personal Property Registry of Jamaica] website to make sure that the collateral used is not being used for another loan. With the credit score generated, we do a risk assessment".
Sprint Financial Services' current operations include:
They offer loans between $10,000 and $100,000 for up to 8 month terms at interest rates between 4% and 6% per month.
Sprint is taking advantage of the global explosion of P2P popularity. According to the Liberium AltFi Volume Index, for example, European P2P volume has doubled to over €1 billion in the last 12 months.
Sprint is offering the platforms an impressive 12.5% return. The CEO remarked:
"The 12.5 per cent that they get back, it's very good for them," he said, comparing the figure to bank returns on deposits. "We make 45 per cent - everybody wins!”.
Impressive rate and a promising growth path. Whilst inherent risks remain in the alternative finance space, the benefits that Sprint can earn by partnering with responsible platforms may drive Sprint onto new levels. These partnerships mark an innovative example of how the peer-to-peer model can have wide reaching benefits to the financial system.