Oakam sees surge in demand for loans as migrants kick-start careers

  • Financial
  • 01.10.2015 01:00 am

UK-based lender Oakam (www.oakam.com) today reports a surge in demand for its services from new arrivals to the UK who find it difficult to borrow from banks.

In the last six months, it has seen demand for loans from customers for whom English is not their first language surge by 40%. This growing demand mirrors a rise in the number of new arrivals to the UK – according to the Office for National Statistics, 636,000 migrants came to live in Britain in the 12 months to the end of March1.

Oakam has underwritten 156,000 loans to new migrants to the UK since 2007, equating to more than £130m. An analysis of these loans showed more than 25,000 were directly used by new arrivals to pay for things like specialist trade tools, formal work wear or basic equipment to help them start a business.  Oakam is also now seeing more requests for loans to purchase larger items, such as work vans, or for deposits on office space. The company plans to offer larger loans, of more than £5,000, to fulfil this this demand from 2016.

Oakam was founded by Frederik Nze, himself a Congolese migrant, after he recognised a need to help those without a bank account to access credit in the UK. The UK banking system excludes millions of people in the UK – in particular, recent arrivals to the country. This group is vulnerable because they have no credit history, little understanding of how UK financial products work (e.g. the need for a credit check) and often come up against language barriers.

Oakam founder and CEO, Frederic Nze said, “Just because you don’t have a credit history, it doesn’t mean you don’t need credit. Most migrants we work with want to get economically productive as quickly as possible, either by working for themselves or as employees. They often need credit to invest in the things they need to kick-start their career and we’re there to help them do that.”

Oakam ’s growth has been based on the company’s ability to provide a financial lifeline to new arrivals to the UK, giving them access to affordable credit when no one else will help them. Oakam also helps migrants find a route to mainstream credit.

Oakam staff come from all over the world and speak 27 languages including English, Polish, Portuguese, Spanish, French, Romanian, Filipino, Swahili Lingala and Yoruba. This helps removes language barriers and builds genuine long-term and trusting relationships with people from different communities.

After seven years of collecting and analysing the human insights that drive responsible borrowing and payment behaviours Oakam is now transferring its analogue knowledge to the digital world. New digital ways of assessing credit worthiness, building trust and instilling responsible borrowing behaviour will mean Oakam can serve its customers at a lower cost and disrupt the whole lending sector.

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