Start-up loan broker Finance Hub aims to reduce the hassle of borrowing
It takes time to shop around for the best loan rates but a start-up company, Finance Hub Jamaica Limited, aims to cut that time to about a day.
The company acts as broker between customers and lending institutions, freeing the borrower from having to negotiate for the loan.
Finance Hub founder & CEO Scott Edwards said that after spending more than a decade in banking, he recognised the need for a bridge between customers and lenders.
''Being in the industry for the past 13 years, I and my team recognised this flaw and have developed a seamless process whereby all customers can conveniently, and in far less time, attain credit to achieve their financial goals whether this goal is to acquire a motor vehicle or a home,'' he said.
The company operates mainly online, but plans to set up a physical location to capture walk-in traffic.
Edwards runs the operation, with Alicia Edwards as company secretary and banker Shauwn Gracey as mentor. The company, which has five workers, will move into its new headquarters on Constant Spring Road, Kingston, this month.
Finance Hub aims to take the hassle out of loan transactions by bringing together borrower and lender.
''It is a holistic approach, so the client benefits from having a one-stop-shop approach to obtaining financing. There is no longer the need to go physically from one institution to another seeking the best deals, these institutions will now come to you," said the CEO.
"Currently most of our business goes through COK Sodality Credit Union, which is offering significant discounts with their ongoing promotions,'' he said.
There are no upfront costs to use the service. Once a loan is brokered for the customer on the website, the customer then completes the transaction at the lending institution. The lending institution would charge its usual fees for the loan, a portion of which is paid over to Finance Hub. That fraction remains undisclosed due to contractual reasons, said Edwards.
"The lending institutions benefit from having a pool of clients from which to pick, choose and refuse based on criteria which suit their institution the best. Finance Hub benefits from the premiums which these institutions pay for critical data," he said.
The company, now in its third month of operation has largely brokered car loans, but says there are growing enquiries for mortgages. The Finance Hub website captures pertinent information in order to allow financial institutions to make competitive offers to these customers.
''Finance Hub took four years to plan, one year to set up the company and operate on a part-time basis, and is three months now in full operation,'' said Edwards.
The start-up investment was not disclosed, but as an online company, the largest area of expenditure was establishing the website, he said.
Finance Hub has written approval to operate from both Bank of Jamaica and the Financial Services Commission, the company founder said, but he rationalised that the business is governed by neither regulator, based on the nature of its operations.
BOJ oversees deposit-taking institutions, while the FSC monitors other providers of financial services. Neither regulator responded to requests for comment.
Edwards said Finance Hub was started out of the recognition that there are serious gaps in the financing process, which cause undue stress on consumers. He believes the company can eventually scale up to broker around one to three per cent of new bank loans across the sector.
Central bank data indicate that new loans last year amounted to $46 billion; the previous year it was $99 billion.
''Helping customers to achieve their dream became more than just a hobby to me, it became a life passion which I could not act on, being in the corporate world. This led to my decision to jump in fully and pursue my dream. Being a family man, surprisingly, was an added incentive to make the switch, and it has been going good so far,'' the former banker said.
Correction: This story has been updated to indicate that Finance Hub has written approval to operate from BOJ and the FSC.