December 6th, 2016
This month's featured Originator is Progressa, a Canadian marketplace lender that focuses on social responsibility by helping consumers reconsolidate their debt. Here's their story.
ASPIRE: Give us the elevator pitch for Progressa.
PROGRESSA: Progressa is a socially responsible alternative lender helping Canadians get out of debt and rebuild their credit.
ASPIRE: What really sets Progressa apart from other marketplace lenders?
PROGRESSA: We stand apart from other lenders because of our commitment to socially responsible and direct lending. What we mean by this is that our mandate isn’t necessarily about providing the cheapest loan, or the fastest - we lend by directly paying off our clients’ outstanding debts, and lend to people in a way that is sustainable for them and will not create any further negative impact on their financial health.
Our marketplace lending platform is also unique in the Canadian market as we offer to institutional buyers a co-ownership participation in our loan pools rather than making individual loans available for sale. This keeps us fully aligned with our marketplace investors as we share in the risks and rewards along side one another.
ASPIRE: Tell us about the culture at Progressa, what it's like to work there, and the kind of people there.
PROGRESSA: Progressa is all about innovation, and one of the best ways to innovate is to be able to share ideas and information freely and openly - our employees are learning and creating data from each of the many interactions with clients they have per day. We’re blending the professionalism and culture of service of a financial firm with the agile, creative workflow and personality of a startup.
ASPIRE: Let’s move to the technical aspects of the business. Tell us a bit more about Progress’s loan approval process. What key traits do you look for or avoid?
PROGRESSA: Let me start with the non-technical answer first, we look for good people trying to do the right thing. Our slogan is “Borrow for the RIght Reasons” and we really mean it. At the end of the day, people fall behind on their bills for reasons that are out of their control. Progressa wants to give those people a second chance to pay off these bills and rebuild their credit.
The technical answer, we are on our 3rd generation proprietary credit model and have processed just shy of 50,000 applications since inception. We rely on thousands of data points per application which allows us to identify applicants who have an ability to service their debts, even if they might not fit the traditional credit box.
ASPIRE: Talk to us about how Progressa has grown over the years, both as a company and in terms of funding volume.
PROGRESSA: We’ve grown from just two employees to over 80 in Vancouver and Toronto over the last four years. In the process of growing, we’ve brought on some amazing talent from the financial services sector in Toronto and technology sector in Vancouver. The Company’s funding volume is on pace to grow over 3.0x versus prior year.
ASPIRE: What are some challenges and opportunities facing Progressa (and marketplace lending in general) in the future?
PROGRESSA: Progressa’s biggest challenges and opportunities revolve around diversifying and lowering its cost of capital over time and becoming a healthier business for it. As the company matures, and we can show further credit performance, we are hopeful to be able to achieve the right mix for our capital structure that ultimately allows us to be most successful.
Marketplace lending is likely going to be a popular subject over the coming years for regulators in Canada. For Canadian lenders to be able to compete on a global scale, regulators need to begin to provide clarity on this area and create an even playing field across provinces. People talk about marketplace lenders as ‘bank killers’ in Canada, and we believe the opportunity exists to challenge traditional bank models, but also see a great deal of potential in partnership with major banks in order to serve a wider marketplace of people with different lending needs. And this goes without saying, regulations need to help foster the space and not stand in the way.
ASPIRE: Any closing thoughts?
PROGRESSA: We are very excited about 2017 and the ways that FinTech is opening up new ways for Canadian consumers to achieve their financial objectives, and are looking forward to working closer with Aspire to help achieve Progressa's objectives!