RESPONSIBLE LENDING
“ OPEN BANKING DATA ENABLES US TO CATEGORISE
AND ANALYSE ON AVERAGE 1,600 INDIVIDUAL TRANSACTIONS SPANNING THE PREVIOUS 12 MONTHS
FOR EVERY APPLICANT ”
TIM ROONEY CEO , SALAD MONEY rates are well below market average due to the application of AI and our ability to analyse thousands of data points from the consumer . But it is the cost of funds that really affects us ."
Has buy-now-pay-later ( BNPL ) impacted vulnerable consumers ? With the most vulnerable consumers struggling to afford week-to-week essentials , buy-now-pay-later ( BNPL ) has proven incredibly popular . Consumers can offset the cost of purchases over several monthly instalments , often at no extra cost . But Responsible Finance has noticed “ an explosion ” of consumers with ' stacked-up ' BNPL loans , Hadjimichael continues .
“ Community lenders only lend if people can afford the repayments and it ’ s concerning to see some BNPL providers accepting applicants we don ’ t think can afford to repay loans ,” she says .
" Our members ' customers are typically those on low or changing incomes or in vulnerable circumstances who cannot access mainstream credit , so we are concerned about the impact , transparency and affordability of BNPL . It can soon add up to unsustainable amounts and over-indebtedness and can cause defaults on these and other payments , impairing people ’ s credit ratings and pushing them into financial exclusion .” fintechmagazine . com 125