By Oliver Smith on Thursday 25 April 2019
Alternative lender claims equivalent of 12% of UK SME overdraft market.
Alternative lending platform iwoca today claimed its lending at the end of 2018 reached the equivalent of 12% of the UK’s small business overdraft market.
In the final quarter of 2018, iwoca approved just over £74m of lending to 3,802 companies, versus 31,637 overdrafts from high street banks.
Ironically since Iwoca started, overdraft approvals from high street banks have actually fallen from over 60,000 a quarter in 2012, according to data from UK Finance published today.
“The reason why I started iwoca was that there was already a massive kind of funding gap, but looking at the approval numbers since, they have dropped in half,” iwoca CEO Christoph Rieche told AltFi.
“We’ve taken 12% of the equivalent of overdraft approvals that we're making versus the banks, but we're really taking a smaller share of a much larger underserved market that isn't visible, and that's the way I look at it.”
Iwoca is now lending more to businesses than Santander and HSBC do in overdrafts for the first time.
“I think it's a bit of a failing that no one has really realised our share of the market, and probably our fault for focusing [too] much on building the platform and being present when customers are looking for financing,” said Rieche.
“We've been much less invested into above-the-line marketing which would have probably made us more famous.”
That’s starting to change, four weeks ago iwoca launched a new UK-wide advertising campaign with billboards across the train, bus, tube networks and on radio.
With iwoca claiming that 90% of the SME market has yet to hear about them and the fintech preparing a bid to secure £10m from Pool C of the RBS Alternative Remedies Package in the coming months, Rieche and his team are gearing up for a busy 2019.
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