Notes from AltFi Lending Summit 2022

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AltFi Lending Summit 2022
Innovating through the slowdown. 3 November 2022, London – In-Person
Notes by: Kristi Rohtsalu
Summary
Key themes were following:
• Uncertainty and volatility of the economic environment; what lenders are observing and what are
they expecting from the next 6-18 months, how are they dealing with the uncertainty?
• Shift from the focus on traditional credit bureau scores to challenger credit bureau data to Open
Banking Data and observable changes in customer behaviours.
• Acting responsibly, helping consumers in the cost-of-living crisis; FinTech Pledge to improve the
financial lives of 10 million people by 2025 and gain competitive advantage.
• How sustainable are marketplace lending model and retail-backed P2P lending specifically, given that
Funding Circle is closed for retail investors and some other former well known P2P lenders have exited
the market?
• Innovative ideas and FinTech partnerships: Case study of Fiinu’s Plugin Overdraft and partnership with
Tuum.
• Green lending: What it is and what is the opportunity here?
• Embedded lending as smart way to “plug” into the customers’ workflows, understand customer needs
better and open up more business.
• Buy Now Pay Later for businesses.

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Contents
1 Introduction ..........................................................................................................................................3
2 Risk And Resilience In A Challenging Economy.....................................................................................3
3 The SME Fintech Lending Battleground In 2022...................................................................................5
4 Future Of Lending: How Open Banking Can Improve Customer Outcomes. Introducing Plugin
Overdraft By Fiinu.........................................................................................................................................7
5 Online Lending In A Post-Pandemic World: How Funding Circle Is Adapting To A Changing Market..8
6 Consumer Lending And The Cost Of Living Crisis..................................................................................9
7 The Lending Revolution In 2022: From Challenger Credit Bureaus To Embedded Lending...............11
8 FinTech Pledge 2025: How Zopa And ClearScore Are Mobilising A Coalition Of Fintechs To Combat
The Cost Of Living Crisis..............................................................................................................................13
9 The Green Lending Opportunity .........................................................................................................15
10 The Cutting Edge Of Responsible Lending ......................................................................................17
11 B2B Buy Now Pay Later's Moment To Shine?.................................................................................19
12 Poll Results......................................................................................................................................21
13 Appendices......................................................................................................................................22
13.1 Abbreviations..............................................................................................................................22
13.2 Disclosure....................................................................................................................................22

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1 Introduction
Welcome remarks by Oliver Smith, Managing Editor @ AltFi
The pace of change in our world right now is frenetic. In the last 12 months since last AltFi Lending event
in November 2021, the world has flung from post-pandemic recovery to global economic crisis:
• Cost of energy has spiralled.
• Inflation rates have jumped.
• Interest rates have risen remarkably.
• Cost-of-living crisis for millions.
• In the UK, there is a new Monarch, and UK has gone through three Prime Ministers and four Chancellor
of Exchequer’s.
This is the context and background for the pace of change in alternative lending sector.
2 Risk And Resilience In A Challenging Economy
Jon Westley, Chief Data Officer @ Experian
How to protect your business, innovate and grow in a challenging market? Disruption in the UK economy
is creating new uncertainties for lenders. Identifying how consumers and businesses are responding, what
their appetite is for credit and what opportunities exist for growth will be the key to success.
Overall trends
• Latest credit trends:
o SMEs have sustained resilience
o Seasonality is back
o Mortgage inertia
o Average mortgage payments are up
o Collections and forbearance are on the rise
o Credit usage continues to grow
o There is a reordering of risks
• Latest economic trends:
o Volumes are down, but spending is up
o Spend on fuel has increased considerably
o Interest rates are rising
o Real earnings are falling at fastest rate over a decade
Latest data round
• Statistically, we are not in a recession, but people are feeling we are in one.
• Employment:
o Be careful about the unemployment numbers. Inactivity is not reflected there! Rather look at
the inactivity figures.
o Inactivity has been increasing for some time. Two cohorts that are affected the most: 16-24
and 50-64.
o The redundancy rate has remained low.
• Cost of living:

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o Annual CPI inflation rate in the UK is back to July’s highs: 10.1% in September.
o Prices of food and non-alcoholic beverages have increased by 14.6% within the last 12 months
to September.
o Mortgage lenders have reacted ahead of the MPC (Monetary Policy Committee), and worse
looks yet to come.
o Government wants to do something tailored, focus on helping people with low incomes. High
income mortgagors are going to pay the most.
Trends
• Macro credit trends, consumers:
o Average Delphi scores are falling back to the pre-COVID levels. General population is seeing
some stress of indebtedness.
o Lending is still occurring; growth is expected to be continued for some time. Credit card usage
has started to slow down, however.
• Macro credit trends, commercial:
o SME lending has grown well.
o Arrears have remained stable.
o (To see problems) You have to look into specific sectors.
• Income:
o Nominal income continues to climb, but real income has decreased.
o We are starting to see people living out of their savings.
• There is a lag on the credit markets.
• Overdrafts and credit card balances:
o (In the UK) 10% more accounts are in minus as compared to a year ago.
o Credit card balances have been increasing from April 2021.
o We are still not on the pre-pandemic levels.
• Who is spending?
o The age group of 30-40 years is spending the most.
o In terms of risk groups, there is growth across all cohorts, yet most increase is observed in
highest risk segment.
• Delinquencies and collections:
o There is a lag in delinquencies. Currently, delinquencies are flat, below the pre-pandemic
levels.
o Mortgages in collection are starting to tick up.
o We see forbearance increasing in every sector, across all types of credits. There is a variation
in the success of different forbearance measures (as observed 6 months after the measure).
• Cost of living:
o Mortgage rates are increasing. For a typical mortgage of £100,000, monthly payment has
increased by £50. On average, mortgage payments have hit £1,000 per month.
Summary (concluded based on the UK data)
• Today, population is showing quite a bit of resilience.
• While we are approaching Christmas, we are going to see debt increasing.
• Unsecured lending continues to grow.
• When you are lending, you have to understand the segments you are lending to.

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• Cost of living: most probably, within the next 3-6 months we are going to see a layering effect. Higher
income segments are going to absorb the most of the shock: tax shock, increasing mortgage
payments, inflation.
• Currently, debt ratios are much better than before the pandemic.
• Vacancy rates are still high, but there is a mismatch between required vs available competencies.
Question from the audience: Where would layoffs occur first?
• Construction and housing.
• Hospitality.
• Everywhere where consumer is having discretionary spend.
3 The SME Fintech Lending Battleground In 2022
Richard Davies, CEO @ Allica Bank
Brian Cane, Director of Capital Markets and Origination @ CrossLend
Christoph Rieche, co-founder and CEO @ iwoca
[Moderator] Daniel Lanyon, Editorial Director @ AltFi
The panel examined how the SME alternative lending space is shaping up in a time of high inflation and
rising interest rates. This includes the impact of supply shortages and rising energy prices, the ongoing
fallout of lending during the COVID pandemic, as well as the continued innovation wrought by disruptive
players and trends as competition heats up.
Are we in a perfect storm with SME lending?
Christoph: It is not a new storm. We have been in a storm since the pandemic began – yet not a perfect
one. Government schemes are now closed. We see huge increase in loan demand. SMEs need liquidity.
There are opportunities where banks are not lending. So far, we have been markedly resilient.
Richard: Return of inflation is a new thing. High energy costs, supply chain disruptions, demand is falling
away… This has barely started. Insolvencies are slightly up, yet still on record lows; during the next 12-18
months, we expect them to increase 2-4 times.
Brian: Investors are becoming very cautious. Private market investors may not always be here when you
need them. Liquid vs illiquid investors. Re-pricing. Originators are somewhat slower. There is definitely
stress, but it’s not as bad as the crisis in 2008. I agree with the 12-18 months timeline for things to play
out.
Iwoca is moving into different areas. Christoph, can you explain your product strategy?
There is still gap on the market. There is still a lot of demand for our core product, the flexi-loan. Strategic
product developments:
• iwocaPay, the BNPL for SMEs. To be at the root of the model, between the buyer and the seller. Omni-
channel check-out tool.
• Embedded finance.

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Richard, what was 2022 for Allica Bank?
In July, we reached £1 billion in lending.
We are profitable on monthly basis since June 2022.
6,000 established SME customers.
2022 has been a really good year, yet we are not complacent. We are trying to be very thoughtful on how
we keep supporting customers.
Brian, what have been the recent developments in CrossLend?
We are focused on the friction between originators and investors.
We are enablers for the originators. It has a lot to do with the digitalization.
Even in the downturn, investors continue to look forward.
Question from the audience: Iwoca, are you not concerned about the BNPL?
(Reference is made to the controversies of consumer BNPL.)
Christoph: No.
Richard: BNPL for businesses is very different from BNPL for consumers.
Christoph: Businesses tend to have payment terms with the sellers. We are better to assess credit than
sellers. It is really a cash flow too. We are checking affordability on transaction level.
Question from the audience: What about repricing, risks, cost of funds?
Richard: We have offset cost of funds in our pricing. There is an increased cost of risk.
Brian: You have to see how wide these liability costs would go…
Question from the audience: Your thoughts on personal guarantees in SME lending, taking
entrepreneur’s home as security?
Richard: Check your practices, if you are doing it right now.
Christoph: It’s really about ‘skin in the game’ for the company. Owners putting in personal gurantee.
Question from the audience: What is currently keeping you “wake at night”?
Brian: There is a lot of volatility. This recession would be a lot deeper if you had a confluence of factors.
Christoph: How to feel really relevant for SMEs.
Richard: How deep the recession is going to be?
Question from the audience: Is the economy now better than in 2008?
Christoph: We are in much better place because banks are on strong position now. As long as money is
flowing, it’s ok. We are providing short term cash flow loans, recalibrating every month; fast to readjust
the portfolio. Embedded finance… We have more than 28 partners tapping to our platform; increased
volume is coming from there.

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4 Future Of Lending: How Open Banking Can Improve Customer
Outcomes. Introducing Plugin Overdraft By Fiinu
Dr Marko Sjoblom, Founder @ Fiinu
Rivo Uibo, Co-founder and Chief Business Officer @ Tuum
[Moderator] Maarja Pehk, the Head of Investor Relations and FDI in the UK for the Estonian Investment
Agency
A fireside chat with Fiinu, the UK fintech group, and Tuum, the modular core banking platform. Learn more
about the unique overdraft solution that will give consumers access to an overdraft facility without the
need to switch banks and current accounts, and how Tuum's lending module is powering this innovation.
Fiinu and Tuum recently announced partnership. More specifically, Fiinu Plc (ticker on London Stock
Exchange: BANK), a UK fintech group including Fiinu Bank, selected Tuum as the core banking platform to
power its Plugin Overdraft®.
Fiinu's Plugin Overdraft® is an unbundled overdraft solution which allows customers to have an overdraft
with Fiinu Bank without changing their existing bank. The underlying Bank Independent Overdraft®
technology platform is bank agnostic, allowing Fiinu to serve all other banks' customers.
Open Banking allows Fiinu's Plugin Overdraft® to attach ("plugin") to the customer's primary bank
account, no matter which bank they may use. Fiinu's vision is built around Open Banking, and it believes
that it increases competition and innovation in UK banking.
Sources: https://tuumplatform.com/news/fiinu-selects-tuum-to-power-its-plugin-overdraft/ ,
https://www.altfi.com/companies/fiinu
Marko:
Fiinu’s overdraft helps people in the cost-of-living crisis. The model of overdrafts has changed dramatically
over the past 3-4 years. As a result of changes in regulation two years ago, now only 20% of UK population
has access to overdraft (down from 50-60%).
Overdraft is a banking product; you cannot have it without a bank account. Very few alternative lenders
are providing this. Very small tickets, very short terms.
Plugin overdraft: Unbundling overdraft from your bank account. We link overdraft to your bank account,
we do it through Open Banking.
We had to scale. This is where Tuum came in.
Rivo:
There is still misconnect between suppliers and those who need finance. Consumers do not need to move
their bank account to Fiinu. You have to expose yourself to external world. APIs etc. Exposing yourself to
external world, this is the answer to the question: how to remain relevant?
Marko, what was the process to choose Tuum as your partner?
Outsourcing requirements are quite strict. We went through the usual ‘suspects’. Then Tuum enabled us
to connect to the sandbox. We explained what our investors wanted to see. Tuum gave us good insight
on how that system worked – before we even had agreed anything. Ultimately, we went through
scorecards.
Rivo, what was the experience from Tuum’s side?

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In core banking industry, nothing happens overnight. What attracted us to Fiinu, was impact driven. They
had very understandable plans, you could clearly see where the impact is going to come from.
What do you have in store for future?
Marko:
Getting to launch; we started from licences etc. We are a FinTech group with a bank license. Banking
license is for us an enabler.
We are first building the technology. Technology will go through external audit.
Because we are listed, we cannot share much. The focus is on UK.
Rivo: London has specific place in our hearts. We are growing the team etc.
How is Fiinu going to deal with bad debt?
Marko: We are working with a panel of debt collections.
Question from the audience to Fiinu: Is your overdraft portable? E.g., if I move my bank account from
one bank to another?
Marko: With us, you have one limit and you can split it between as many banks as you want.
5 Online Lending In A Post-Pandemic World: How Funding Circle Is
Adapting To A Changing Market1
Alexander Allen, UK Managing Director @ Funding Circle
A year into the job, Alexander Allen has overseen tough decisions including Funding Circle’s exit from retail-
backed P2P lending and its move beyond CBILS into a post-Covid lending landscape. Hear first-hand how
Funding Circle’s UK Managing Director views both the economic challenges ahead, and the opportunities
for growth.
How do you see it: What’s happening in real economy?
Through COVID, there were three types of SME customers:
1) Survivors – those who were struggling to survive;
2) Hedges – those who experienced stress and volatility; and
3) Thrivers – those who won from the crisis.
We see it similar today. We do not see anything huge coming. There certainly is uncertainty. A lot of the
pressure is felt by small companies.
COVID loan schemes – how are those loans doing?
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I missed the first half of the conversation (networking break); the notes are from the last 15 minutes.

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Funding Circle was the first nonbank to lend through those government schemes. All cohorts are
performing in line with our expectations. Delinquency figures are genuinely in line. We are proactive with
pre-delinquency services: helping businesses to manage the cash flow, supporting them before they
become delinquent.
What is the role of Open Banking in your case?
75% of applications are receiving automated loan offers. Open Banking is a key part to build this. With
bank account statements, you get huge amount of granularity.
What about alternative data?
We do use data like voice and words used – but we use this type of alternative data from servicing
perspective and from sales perspective, not for credit underwriting.
What are the challenges for the sales team right now?
The big theme right now is uncertainty. Businesses want the benefit of talking to somebody over phone.
Sales team has to understand the business and what kind of financing it needs; it is now more important
than ever.
While having moved away from retail investors, what is your take: how sustainable the marketplace
lending model is?
It depends from the model of the marketplace lender. These loans are an asset class to open up to the
investors. We have models, experience etc. For brand new marketplace lenders, it is more difficult now
than it was a few years ago. Based on our experience, we have started to lend to younger businesses.
Investors are supporting this. Positive returns, track record and relevant data points – these are the key.
Funding Circle started reselling its IPs?
We are doing embedded lending via APIs. We work with other marketplace lenders, partner.
6 Consumer Lending And The Cost Of Living Crisis
Robert Pasco, CEO and Co-founder @ Plend
Lucas Dalglish, Chief Commercial Officer @ JaJa
Daniel Drummer, CFO @ auxmoney
Andrea Cox, UK lead and Director of Affordability @Experian
[Moderator] Oliver Smith, Managing Editor @ AltFi
As consumer finances are being battered by a perfect storm of rising costs and interest rates, how are
lenders responding to this cost-of-living crisis as it impacts their borrowers?
What’s your strategy?

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Robert: Plend just launched. It is very good time to start now. You can get borrowers you would not have
got before.
Lucas: JaJa’s strategy is credit cards. Number of different brands. For us, it is all about growth. Agility is
critical. How we grow. We will launch or own product as a fun work. The strategy is based on brands we
have bought.
What changes in trends are you seeing among borrowers? How are you responding?
Robert: Borrowers are looking to consolidate their existing debts. There is a little bit of home
improvements, but mainly it’s about consolidation.
Andrea, on the affordability side:
The question is this: Whether or not the consumer can afford the product?
Previously, the focus was on income. Now the focus is on expenditures. Mortgage chock and energy costs,
food bills are going up. There are some delays in data; we do not yet see the true cost of living, do not
fully understand the impact that is coming next year.
It is important to get the right data on how people are changing their behaviours.
Daniel, from the perspective of Continental Europe / Germany:
Some of the themes are the same: high inflation etc. In Germany, most of the people have their mortgage
rates fixed for 10 years; they are not going to see mortgage payments raising for the next 2-3 years. A lot
of focus is on subsidies and support measures: government paying your gas bills etc.
From the Open Banking data, we do see that consumers are delaying larger purchases, cancelling second
holidays.
We in auxmoney have become more conservative, proactively tightening the credit marks.
Lucas: We do not see that much difference in consumer behaviours. We are paying a lot of attention on
key metrics: do we need to recalibrate? Do we need to make changes in affordability rules?
Three main challenges are these: inflation, interest rates and energy prices. What is the main challenge
for you, right now?
Andrea: Energy prices have come back as big priority, but raising mortgage payments is the key concern
for many lenders. First of all, mortgage payments are the key issue for middle-income and upper middle
income consumers.
Robert: Commercially, it’s interest rates. Inflation is a bigger risk in longer term… There has to be
consolidation happening…. We see a lot of uncertainty… Our particular focus is on borrowers’ income
stability: what jobs are going to disappear? What is the borrower’s sector of employment?
What is your outlook on the 2023 lending environment? Where are you on the scale from strongly
optimistic to strongly pessimistic?
Lucas: We do not know. We have to accept uncertainty, have flexible game plan. Flexibility and agility are
the keys here.

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Daniel: I couldn’t agree more with Lucas. The future is volatile. Be nimble. A clear outlook for the future
may be dangerous to have.
Question from the audience: How do you balance affordability?
Daniel: There is balancing between your responsibility to lend and navigating credit risk. Sometimes you
have to reject vulnerable people.
Question from the audience: Robert, how can consumers rebuild their short credits to long?
We do not consolidate very new loans; we do assume minimum repayment for the loans to be
consolidated. This reduces fraud risk. Consumer credit is shifting to embedded credits and partners having
a relationship with the customer.
Question from the audience: Andrea, are you seeing cost-of-living crisis biting consumers?
At present moment, we do see a slight impact on people’s credit scores. We are not really seeing the true
impact. We are on the trajectory where things are getting worse. Right now, we are seeing that customers
are tapping into their current account savings.
Question from the audience: Are you expecting to see higher levels of defaults?
Daniel: We too expect tightening economic situation next year.
Lucas: Unemployment is key. If it rises, defaults will increase.
7 The Lending Revolution In 2022: From Challenger Credit Bureaus To
Embedded Lending
Richard Prime, Co-CEO and Founder @ Sonovate
Michael Davidson, Chief Revenue Officer @ Freedom Finance
Matt Davies, Head of U.K. Market Development @ Nova Credit
A host of new technologies are now powering the lending revolution, from open banking onboarding to
instant decisioning and embedded lending. In this session, we explore the practical uses of these new tools,
and why every lender should be paying attention.
Matt / Nova Credit, why did Nova Credit decide to expand to the UK?
(Nova Credit is consumer-permissioned credit bureau which helps people to take their international credit
history with them when moving from one country to another, and this way access financial products like
credit cards, student loans, mobile phone financing, and more.)

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Matt: There is a significant population coming to live and work in the UK. When they are coming, they
leave their credit history and credit scores to home country. Newcomers are struggling to get better credit
products. Lenders are struggling, because they do not access their credit histories.
(To Richard/Sonovate and Michael / Freedom Finance) Is it problem for lenders?
Richard: We are in SME space; it’s somewhat easier with SMEs. We have relationship-based model. Of
course, you are happy with richer set of data.
Michael: We have a huge range of lending products, lenders we are working together. Credit data is not
only our problem, it is the problem for our lenders. Open Banking data, credit bureau data… We haven’t
solved it 100%.
Open Banking – Where is Open Banking for you?
Richard: Adoption in the SME sector is lagging behind. Faster credit decisions, real-time pricing. It is a little
early.
Michael: We have B2B relationships. There is user experience for consumers. Lenders to be able to absorb
the information.
Matt: In the US, we recently launched Open Banking based solution. It’s coming to the UK.
Embedded lending – What is driving it?
Michael: We feel, we have been doing it for 7-8 years. It is evolving, embedded lending accelerated by
BNPL. Finding new ways to be available for the consumer. Constantly delivering information on loan offers
to the consumer. For us, it’s an evolution.
Richard: Sonovate was embedded lender before we realised, we were embedded lender. Then the word
came. Embedded invoice funding, customer enjoys that. Make API calls, we provide you with credit risk
assessments. Customers do not want to be lenders. For us, it’s game changing. We can sit as 3rd
party in
the flow, build better products for the customers. We know more about customer workflows.
What is the regulator thinking about the embedded lending?
Michael: We do a lot of checks on consumers. BNPL feed… That information is sort of missing and that is
a bit of a problem.
Richard: The regulator would want to be on board. The bar is slightly lower in the B2B space.
Matt, what’s the impact of Brexit to Credit Nova?
Migration is now back on pre-pandemic levels. We are tracking that data.
What tech are you looking closely?
Matt: Alternative data. This is important for the “thin file” customers.

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Richard: Blockchain, how is that going to evolve?
Michael: New data.
8 FinTech Pledge 2025: How Zopa And ClearScore Are Mobilising A
Coalition Of Fintechs To Combat The Cost Of Living Crisis
Justin Basini, Group CEO and Co-founder @ ClearScore
Jaidev Janardana, CEO @ Zopa
This session with the CEOs of Zopa and ClearScore examined how the 2025 Fintech Pledge is helping UK
consumers build financial resilience in an unprecedented cross-industry collaboration.
(Read about the ‘2025 Fintech Pledge’ here: https://pledge2025.org/ )
What is your outlook, going forward?
Jaidev: Moderately pessimistic.
Justin: We are 7 years in business, continuing rapid growth. Expansion is going well. We are #1 in the UK…
5 million users are logging in every day globally. Over the next 5 years, our mission is going to be more
relevant.
Explain what the 2025 FinTech Pledge is?
Jaidev: Can we [UK FinTechs and strategic partners] create a coalition to make things happen? It’s going
to be difficult time for consumers: rising inflation and the subsequent price surges in everything from
energy bills, petrol prices and grocery costs… We want to improve the financial lives of 10 million people
by 2025: have savings, improve their credit reports, reduce their monthly claims… How do you get 10
million customers together, doing at least something?
Justin: How we [as a relatively young industry] combine our skills against much bigger competitor
[incumbent banks]? Now the scale of FinTech has given us the ability to make things happen.
Are you open to non-FinTechs getting involved?
Jaidev: We want companies that are aligned with the strategy. We do not care if you are FinTech or not –
as long as you are aligned with the strategy. Potentially, we will be adding consumer brands. If your
business practices are not aligned, if you are just making money out of customers, then you are less
welcome.
On the actions: Is there a reporting mechanism? What steps are you taking yourself?

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Jaidev: Yes, we are creating a reporting mechanism. Reporting at least once a month. For us, one example
metric may be: How much interest have we saved for the consumer with debt consolidation?
Justin: We are working with the credit data to improve customers’ access to credit, reduce credit prices
etc. Creating really compelling product for the consumer. Moving away from the just-credit-report view.
Jaidev: We recently launched debt collection tool in our app. Customers can just check how much they
could save. On savings products… Interest rate on savings reflecting base rates. We offer this for the
existing customers as well, not just for the new customers. We want also start capturing Open Banking
opportunities.
Industry is coming together to support the consumer, isn’t that a government’s job? Is government
doing enough?
Justin: Disruptors coming together is a great start for us. That is our responsibility: also reach to the
consumers that are more traditional and do not yet use FinTech services. In terms of government: they
have a lot on their plate. Most importantly, government has to ensure stability for the lenders. Both have
a role to play.
Jaider: Whether the government is doing something or not is not the question. It is our responsibility as
an industry. Over the next 6-12 months… It’s going to be though winter.
To your potential partners: What are they signing up to when joining the pledge?
Jaidev: Two things mainly: 1) doing what we aim to do, and 2) reporting on it. Also staying open to our
principles. Others can help us by spreading the message, holding events, raising public awareness.
Justing: I am humbled that FinTechs are putting their names up!
What is your current experience on the market? And when looking a year ahead?
Jaidev: I haven’t seen credit performance to be that good. During the pandemic, many customers built up
their savings buffers, repaid credit cards etc. Now we see debt and delinquencies turning back to the pre-
pandemic levels. It’s going darker from here. We should expect defaults to go up, we do expect them to
increase by 20-25% over the next year. That’s an informed guess at best; it’s sort of making projections
based on no data. [There is no historical precedence about current confluence of factors, and therefore
no representative historical data to look at.]
Justin: We see that credit demand is still not where it was pre-COVID. Supply will move more to the high
street banks and away from FinTech lenders. The banks have low funding costs. We haven’t seen this sort
of thing before: low unemployment but high expenditures. We are sitting down with customers, speaking
to them directly. I think, consumers in the expenditures chock are m ore resilient than in the
unemployment chock.
Which one of the UK’s high street banks would be first to join the Pledge?
Jaidev: Haven’t heard from any…

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What about Zopa’s plans to move into SME lending?
Jaidev: It’s an interesting market, but requires special skills. We do not have any concrete plans.
[Also read this article on AltFi website: “Zopa CEO: ‘The Fintech Pledge was new but the idea was always
in our DNA’”, https://www.altfi.com/article/10076_zopa-ceo-the-fintech-pledge-was-new-but-the-idea-
was-always-in-our-dna ]
9 The Green Lending Opportunity
Tim Coates, Co-founder, Chief Customer and Regulatory Officer @ Oxbury
Susie Aliker, CEO @ Tandem
Simon Cureton, CEO @ Funding Options
With billions of pounds of investment needed over the coming decades to transition the world to a net zero
economy, 'green lending' is often held up as the solution for this funding gap, but what do the experts
think?
What is green lending?
Simon: Helping businesses who are green in their purpose and/or want to take up a green project.
Tim: Decarbonised nature. It is a transition to a steady state.
Susie: Adding to previous speakers, green lending is about carbon reduction – carbon offsetting. We have
two principles in our approach:
1) How do we get green lending to mainstream? and
2) “Greener” – this is a long journey.
Susie, what led Tandem to moving into green space?
Market opportunity, giving consumers the choice and information. From business perspective, there is a
massive potential. Some stats: UK’s housing is one of the oldest in Europe, clearly there is a lot of
retrofitting to be done.
Simon, in summer 2021, Funding Options launched the UK’s first Green Finance marketplace for SMEs.2
What has been happening within the last 12 months?
Simon: Interest has been very high. Businesses want to finance an asset with low carbon emissions. There
is quite low supply of funding from the lenders’ side. Expectations on demand, going forward… It’s a little
too early to say. Clearly, demand over the past couple of years has increased.
Susie: In the context of energy crisis, green lending can become even more compelling.
2
See the announcement here: https://www.fundingoptions.com/blog/press/green-finance-marketplace-for-smes

16
Tim, what is the Oxbury’s interest in green lending?
(Oxbury is the UK’s only specialist agricultural bank and the only bank that has a singular focus on British
Farmers.)
Decarbonisation of food and agriculture sectors. It’s really important in terms of resiliency, in the context
of global chocks. Interest is growing month on month.
Is green lending somehow at risk, given the economy?
Susie: We have to accept the current situation. The costs for consumers are really significant (e.g., when
it comes to retrofitting homes). It’s about providing incentives, education, information. Current economy
is clearly a challenge.
Tim: Input costs for food are incredibly high. Demand is driving investing.
Simon: It’s a really significant challenge, a much broader challenge. There are about six million SMEs in
the UK. How do we incentivise them? We have seen lots of the ‘stick’ and too little ‘carrot’. Government
should come to support.
What does the government need to do?
Tum: Change legislation, introduce some form of green mandate.
Simon:
1) Establish access to funding with reasonable rates.
2) Standardization: How to evaluate the “greenness”? Otherwise, it is very difficult to navigate the
market.
3) Ensure some level of certainty. How to deal with the “property prisoners”? How the poorest will be
supported in the transition to “green”?
4) Support with raising consumers’ awareness.
What role the traditional lenders are going to play in this?
Simon: We see them “coming to the party”. Create a level playing field for incumbents and for FinTechs.
Question from the audience: Do you think the fear of “greenwashing” will stifle innovation?
Susie: Here we need standardization.
Tim: … and science-based approach to green targets.
Question from the audience: How to monitor and measure green lending impact?
Susie: What would qualify as a green loan? We have a set of clear standards. We have spent a lot of time
in building out that framework and building it into our systems.
Simon: It’s tough to measure in the SME space. We have a lot of work to do with our partners…

17
10 The Cutting Edge Of Responsible Lending
Vicky Zuiderent, CRO and Co-founder @ Radish Credit
Rosie Teo, General Counsel and Chief Compliance Officer @ Salary Finance
Ines Maia, CRO @ Fluro
Mak Diab, Senior Partnerships Manager @ GDS Link
It has never been more critical for lenders to manage and support their customers who may be struggling,
vulnerable or at risk of default. How are consumer lenders using the latest tools and processes around
affordability, managing vulnerable customers and dealing with collections?
What do we mean by “responsible lending”?
Vicky: Responsible lending has been closely linked to the non-performing rates. Effectively, this has led to
stricter credit policies and more rejections. The definition has to also incorporate those who need the
credit more.
Ines: Responsible lending means being affordable for the consumer.
Rosie: The focus has been on reducing credit risk, on credit being affordable for the consumer. The term
is much broader now. It’s about helping borrowers throughout their journeys. E.g., be also responsible in
collections when it comes to collections.
What do you see happening right now? Are people struggling more?
Ines: We haven’t seen delinquencies increase just yet. We have taken several measures: extended
payment holidays, reviewed our affordability strategies etc. Lesson learned from the pandemic: support
customers with payment difficulties.
Rosie: In Salary Finance, loan repayments are deducted from the borrower’s salary by the employer and
sent to us directly. We are now seeing more customers contacting us – customers that did not contact us
before.
Mak: There is a change happening. CROs have such a responsibility on their shoulders right now; they
need to changes the rules overnight! How are we able to get all the data just in one pipe and change
overnight?
Vicky: Focus is on vulnerability. There is a huge gap in proactively identifying vulnerabilities. We as lenders
have a responsibility here. It is a particular issue in lending. Take inspiration from utilities: have a sign-up
list for vulnerable customers.
Are you proactively changing your lending practices?

18
Rosie: Yes, absolutely. Employment data is the key in new lending. Affordability assessment, the sector
where one [the borrower] works. The data is showing us that we can keep open some more lines than
other lenders.
Ines: We have taken very proactive moves, incl.:
1) Reviewing affordability rules,
2) Adjusting credit risk models,
3) Having a tech stack that allows us to react very quickly.
How are you looking at the scary forecasts from the Bank of England?
Rosie: We have put in a buffer for that.
Mak: For us, the question is this: How are we going to help lenders with the data? Legacy is making
adjusting slow and costly. We are offering a set of APIs. Before, everyone looked at the credit scores. Now
everyone is looking at salaries. Software as a Service.
Question from the audience: How do you balance being responsible lender with profitability?
Vicky: My opinionated answer is that if you start wit the outcomes for the customers in mind, you
eventually will be more profitable. (Lower customer acquisition costs, lower losses etc.) Of course, we are
going to need to be profitable. But if you start being led by profitability… Be careful not to lose sight from
what you are aiming to do.
Rosie: We focus on providing low-cost affordable credit.
Ines: We have customers at the centre of what we do.
Question from the audience: With increasing cost of living, do we know what people are borrowing for?
Mak: That’s my private hobby, but I am also working at food banks. The people coming to food banks have
to make very hard decisions on spending their incomes. From supply perspective, from the Open Banking
data we can see what people are spending money for.
Vicky: Understanding the customers and their needs. We are looking for why we can lend to them rather
than why we cannot.
Rosie: Look for what they are spending.
Question from audience: How do you comply with the Consumer Duty3
?
Ines: We do not lend if we believe that customer cannot serve the loan. We have touchpoints throughout
the borrower’s journey.
3
The Consumer Duty is a new Consumer Principle in the UK that requires firms to act to deliver good outcomes for
retail customers. Refer to: Consumer Duty | FCA

19
Rosie: Make good efforts to assess affordability at the origination. Can the customer afford the credit?
E.g., there is one lender who is checking how customer fills credit questionnaire: where is he/she stopping
and hesitating?
11 B2B Buy Now Pay Later's Moment To Shine?
Lara Gilman, Head of New Ventures @ iwocaPay
Julia McColl, Chief Product Officer @ Chetwood
Dan Chaplin, Investor @ Dawn Capital
Beau Allison, Co-Founder and CTO @ Tranch
With the consumer buy now, pay later sector under pressure, B2B BNPL is taking over as one of the hottest
areas of fintech lending at present. But how do these pay later options stack up against traditional business
financing, especially during an economic downturn?
How do you think about the term ‘BNPL’? Isn’t there bad reputation coming from consumer BNPL?
Beau: BNPL for businesses is totally different from affordability and eligibility perspective than consumer
BNPL. There are benefits from business perspective; BNPL offers flexibility.
Lara: We danced around with the BNPL term. There is moral hazard on consumer side. For businesses, it’s
a cash flow tool. Buyers need to be able to smoothen their lumpy cash flows.
Julia: It’s a completely different use case than the consumer BNPL. The term ‘BNPL’ is a helpful shorthand
to describe how the product works. The risk is that negativity of consumer BNPL can stick; some consumer
outcomes are not desirable.
Dan: We do use the term ‘BNPL’. It is really a marketing term. It’s just about the distribution channel: e-
commerce stores and online marketplaces. The very fact of that sort of credit existing is nothing new; just
the channels are different. The term ‘BNPL’ basically says what these companies are doing.
Lara: The structures of invoice finance and BNPL are different still, repayment terms are different. With
iwocaPay, we have made a better product. It is accessible, omnichannel:
1) The product is more easily embedded.
2) The product helps us reach out to new customers.
Beau, how long has Tranch been around?
Beau: A year in the UK – now in the US.
Julia: Chetwood provides technology for Tranch. Banking-as-a-Service and Software-as-a-Service.
Flexibility at which we can build different products, enable lots of different features.
Dan, tell us about your decision to invest into the space?

20
For us, it started with Billie. These embedded finance channels ultimately give you much more granular
data. It is more about engaging with the customers that are online rather than offline. Despite of the
economic downturn, underlying trend is still there.
Lara, how do you expect iwocaPay to perform in the economic downturn?
We have a longer understanding on how the risk models are performing. We can quickly adapt. We are
on a nice position to leverage on our experience.
Question from the audience: What do you think about the BNPL regulation in business space? Is it going
to be introduced?
Lara: Regulation provides an insurance of one being responsible. The problem with aggressive regulation
is that it shuts down the opportunity. A healthy conversation has to happen; one cannot just take the
consumer regulation and apply it to the businesses.
Question from the audience: What is the difference between the BNPL and the invoice finance?
Beau: We enable the supplier to offer flexible payment terms.
Lara: Traditional invoice finance was really for big guys. A lot has changed with Billie.
Question from the audience: Isn’t BNPL space crowded?
Dan: There are lots of white spaces. I don’t think it’s too crowded.
Julia: We are changing customer journeys. This means opening up to more customers. It’s a growth area.

21
12 Poll Results
There were two polls run during the day:
1. What is your outlook on the 2023 lending environment?
2. Which trend are you most optimistic about?
The results are on the graphs below.
3%
6%
18%
33%
40%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Strongly optimistic
Strongly pessimistic
Neutral
Moderately optimistic
Moderately pessimistic
What is your outlook on the 2023 lending environment?

22
13 Appendices
13.1 Abbreviations
API – Application Programming Interface
B2B – Business-to-Business
B2B BNPL – Buy Now Pay Later for businesses
BNPL – Buy Now Pay Later
CBILS – The Coronavirus Business Interruption Loan Scheme (in the UK)
CRO – Chief Risk Officer
IP – Intellectual Property
MPC – Monetary Policy Committee
P2P – Peer-to-Peer, Person-to-Person
SMEs – Small- and Medium-sized Entities
13.2 Disclosure
This paper includes my notes, scribbled down during the event and slightly polished during the next couple
days. Quotes are not precise, hence no quotation marks. I did my best to capture what was said, yet there
may be mistakes. I wrote things down to get more out of the event myself; nobody, neither AltFi nor any
of the featured companies has paid me for this.
Event page on AltFi website: https://www.altfi.com/events/altfi-lending-summit-2022

Notes from AltFi Lending Summit 2022

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