Neobank reseller Credi seeks a living

Ian Rogers Consumer lending

Credi, a business with near zero income and a hefty burn rate, is on the hunt for $1 million in funding via the Equitise crowd-funding platform.

“We’re transitioning to revenue now”, CEO and founder Tim Dean told Banking Day yesterday.

Cash receipts were a mere A$9,300 over the nine months to March 2019.

Credi is aiming for 50,000 users in three years and average revenue per client of $10 per month under a business model that converts the family as lender of record and creates a credit history that will allow tykes to borrow more widely in the future.

Relying on Mozo analysis, Credi positions the Bank of Mum and Dad, its target, at $65 billion.

“Our overheads are all they are going to be,” Dean said.

Dean’s plan is that Credi will ramp up into “a high volume software as a service business, generating income through an initial loan set up fee and monthly subscription.

“Credi is the first mover in the market providing an online platform for relationship lending,” - or so goes the story.

Credi’s typical lender is a 45 years plus home-owner and Credi’s typical borrower is 25 years plus.

The funder “operates exempt from the provisions of the National Consumer Credit Protection Act 2009, due to the nature of the loans it facilitates on its platform and the part it plays in the loan establishment, agreement and ongoing management.”

Payments will soon be critical to the Credi story, with Dean in negotiations with two unidentified neobanks “to launch a ‘family funded’ debit card …. The user will have all the benefits of a state of the art card including travel, overseas ATM withdrawals, payment via their phone, transaction management and card management, with the benefit of nil or low cost funding provided by a family member.”

Credi is also targeting Australian SMEs.

In this variant, “at its core will be a loan provided to an SME by a friend or family member that seeks to replace high cost credit provided by banks or non-bank lenders with low or no interest loans …. supporting early stage businesses with affordable working capital.”