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Banjo will compete directly with the major banks and target the 51 per cent of Australia’s small to medium businesses that it says do not have a business lending product other than an overdraft or credit card.
Banjo will provide six-month unsecured working capital finance at annualised rates similar to those provided by major financial institutions. Loans can be paid back earlier without penalty and clients can access ongoing funds without the need to reapply.
The fintech disruptor is headed by CEO Andrew Colliver, who previously worked at National Australia Bank for over a decade in a variety of roles. Mr Colliver’s most recent position at the big four bank was managing director, business performance corporate, institutional and specialised banking.
“In the digital age customer expectations are for anything, anytime, anywhere banking, aligning perfectly with the Banjo model: custom-built for the user experience, with ease and availability on any platform 24/7,” Mr Colliver said.
“The vision was simple. We wanted to take the stress out of business lending by leveraging technology. Business is challenging enough as it is.”
Along with a team of ex bankers and fintech experts, Mr Colliver has spent the last two years building the marketplace lending platform.
Identifying a sector that remains underserviced by traditional lenders, Mr Colliver and his ex-NAB business partners self-funded the start-up, which has recently raised $7.5 million in seed funding from likeminded experienced tech investors.
Banjo currently employs 15 staff including former members of NAB’s credit assessment and advisory teams, and a technology team that has worked in some of the world’s top 50 organisations.
Banjo has created a fund, meaning borrowers once approved, will be funded immediately out of a pool of funds committed to SME lending, according to a company statement.
The group said the Banjo Small Business Fund represents the creation of a new fixed income asset class that can provide regular income at a target return of 8-10 per cent per annum.
“Marketplace lenders over the next decade could achieve 15 per cent market share akin to what Aussie Home Loans did to the Australian mortgage market in the 1990s. Institutional funding will be needed if marketplace lending is going to live up to its potential,” Mr Colliver said.