He reckons the non-prime, non-bank lending industry in Australia is A$30 billion and growing, and millennials have demonstrated their willingness to try new financial apps. Although Nimble will impose some restrictions on how the money is used – gambling is out, for example – borrowers have wide latitude on how they use the money. Slater expects the average loan size to be around A$3,000, with a 65% utilization rate. If borrowers only draw down a portion of their limit, their interest payment is reduced. It is the personal equivalent of a revolver loan in the corporate lending market, in which a company maintains an open credit line up to a specific limit, and instead of fixed or coupon payments, borrowers pay a monthly minimum based on the outstanding balance and interest rate according to the originally agreed terms. Nimble’s Anytime app is designed to give people a fixed loan amount that can be called at any point over the term, giving people a known interest rate for whatever they draw.
The business wasn’t creating value Gavin Slater, Nimble
Banks will provide personal loans but these are for fixed purposes such as renovating the house or buying a car, and tend to be large, ranging from A$5,000 to A$70,000. It is using its platform to grow a new segment of the lending market, somewhere between an AfterPay and a bank personal or auto loan.ĪfterPay allows people to pay for small purchases, such as apparel, on a fortnightly basis on a scheduled basis, with no additional interest charge. The team at Nimble is hoping business expansion will give it the kind of lift it needs to create an IPO or other “liquidity event” that lets its shareholders convert their equity into cash. The point was rammed home when Tencent acquired a strategic stake in AfterPay, sending the Australian payment company’s stock on a tear. Fintechs in other asset classes, including non-prime consumer lending, could fetch valuations in the 4-5x range, or even higher. “The business was generating attractive returns, but it wasn’t creating value,” Slater said. Nimble was founded in 2005 but Slater joined in 2018, after a career in various government-backed innovation programs and 17 years at National Australia Bank’s consumer banking business. The move derives from the desire of the company’s management to take a 15-year old company and increase its value so it can go public next year, says Gavin Slater, managing director and CEO in Melbourne. It wants to use mobile-first technology developed for microlending to win interest from millennials and younger people who want access to a standing limit of credit over time. The company sees a gap between installment loans for consumers – the AfterPay model – and large personal or auto loans from banks or other lenders. Nimble, an Australian micro-lending fintech, is now piloting a new business in larger personal loans, with the aim of going live in October.
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