The new digital platform, which offers lower lending rates and encourages prompt debt repayment, could compete with banks' personal loan facilities.
Singapore fintech company Credit Culture has announced the launch of its moneylending platform, making it the first licensee from a pilot by the Ministry of Law for new business models in the personal loans industry, to do so.
Promising transparent loan terms with no late interest and no early repayment fees, Credit Culture says its platform allows 24/7 access to personal loans with monthly interest capped at 1 percent, disbursed within only 10 minutes.
«We have seen how inefficiencies have affected the industry for years and the move to use technology to improve the system is long overdue. This is a win-win situation whereby improving the ecosystem, customers will be able to gain better access and management of their finances,» said Edmund Sim, founder and CEO of Credit Culture.
New Models for Loans
Credit Culture's credit scoring and application process is simpler, cheaper and more transparent than the manual processes offered by traditional banks. Its platform is built on the Amazon Web Services (AWS) cloud and taps on MyInfo, the central data repository of Singapore citizens' information to populate loan applications.
A proprietary credit-scoring engine then uses this data to assess the creditworthiness of a customer instantly. Apart from lower backend costs, the AWS approach is also scalable depending on customer demand, allowing the firm to grow quickly and roll out in new markets with ease.
The rates charged by Credit Culture are significantly lower than those charged by banks on overdue credit card payments, which average 24 percent per annum, or more than 2 percent per month. However, the effective interest rate could turn out higher than personal loan rates offered by some banks.
Ministry of Law Pilot
Credit Culture was founded by a group of banking industry veterans with knowledge of the consumer credit and technology space. In December 2018, the firm was among six selected by the Ministry of Law as part of a pilot to professionalize the personal loans space in Singapore.
In January, finews.asia reported that Credit Culture secured S$40 million (US$29.5 million) in funding from Malaysian-listed investment holding company RCE Capital via the purchase of five-year bonds secured against loan receivables from Credit Culture.
