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Entrepreneur offers “more responsible” short-term loan product

A London-based entrepreneur offers what he describes as a more responsible alternative to high-cost loans.

Nadeem Siam launched Fund Ourselves, a peer-to-peer lending provider that was designed to help those looking for short-term financing on more flexible terms.

Clients can borrow from £ 50 to £ 500 over a three month period, but where typical payday lenders will charge late fees for non-repayment, Fund Ourselves offers a 12-month interest-free repayment facility if the customer is having payment problems.

Fund Ourselves’ development comes after a massive regulatory crackdown on payday loans and an influx of compensation claims that saw the biggest names in the industry fall under administration, including Wonga, QuickQuid, Piggybank and Sunny, earlier this week.

With around three million Britons using high-cost loans each year, the demand for short-term loans is greater than ever, especially with some of the bigger players no longer active.

Loans are issued by a pool of peer-to-peer investors, who can trade openly on the platform. Using a system called Autodiversify, an investor’s money is distributed among multiple borrowers to minimize the risk of bad debt and to maximize the chances of achieving the full return. Investors can start with as little as £ 10 and track their results online in real time.

Individual investors can earn between 5 and 15 percent per year through Fund Ourselves, depending on the level of risk they assume, with bad credit clients offering higher rates of return.

While investments are not covered by the Financial Services Compensation Scheme, each borrower will go through a series of credit and affordability checks prior to funding and a customer service team is available, currently based in Surrey, to follow up on collections. A provision fund is also in place to record and reimburse any losses from investors.

Founder Siam says his motivation was to offer a viable alternative to payday loans, providing affordable finance and bridging the gap now created by the Wonga generation.

“Especially in Covid-19, there is a lack of cash and very limited options for people looking for loans,” he said. “Fund Ourselves is excited to fill the void and offer a more affordable financial product that aims to help people get out of debt, not make it worse. “

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