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Ferratum Group extends to SME lending with Mambu

Ferratum Group has launched an SME lending service using the cloud-based system of Mambu. It is live in Sweden and Finland, with a wider roll-out planned. It is one of the first recruits for Mambu in this domain but with the supplier claiming a UK SME lender recruit of late as well.

The Ferratum Group has gone live in an initial two countries with Mambu’s cloud-based lending platform to support a move into small business financing. This is the first customer to have the Mambu platform for this use but others are on the way, including one in the UK. ‘We do see a lot of interest in the SME lending space,’ says Mambu’s co-founder and COO, Fredrik Pfisterer.

The initial cutover was in Sweden on 19th May and then Finland on 22nd June. Ferratum Group’s director of business lending, Scott Donnelly, expects to launch in at least one more western European country in Q4, perhaps also in one central European one in that timeframe, and three more western European countries in Q1 2016.

Prior to this, the lending activities of Ferratum were purely consumer-oriented, with a focus on unsecured. It was set up in Helsinki in 2005, operates across 22 countries in Europe, North America and Asia Pacific, and recently completed an IPO on the Frankfurt Stock Exchange. Its consumer business is mainly underpinned by in-house systems that were developed at the outset, says Donnelly. Last year it selected Misys’ Fusionbanking core banking system but this will be used only for deposit taking and mobile services in Malta, where it has a banking licence.

The in-house systems were felt to have limitations when it came to extending them for the new business lending unit, says Donnelly. It was also felt that to adapt them would have taken away resources from the consumer side of the business. And Ferratum was looking for a relatively fast launch, having decided to move into the SME sector towards the end of last year.

It considered a package, recruiting a contractor to build a solution, or a cloud-based system, says Donnelly. The latter approach was felt most able to allow Ferratum to meet its ambitious timescales and to provide the scalability needed. Aside from Mambu, there were a few other options, he says, but these didn’t seem as advanced. Mambu has been around since 2011, with a focus on a cloud-based delivery from the outset, with most of its customers in the microfinance (MFI) sector.

The contract was signed in January and there was then some delay as other logistics for the launch were worked out, including legal agreements. The implementation started in March and there was integration to a few third party systems and Ferratum’s front-end. Most of the requirements were ‘out of the box’, says Donnelly, and others were handled by the extensibility of the Mambu system. Apps can be created for interfaces to external systems, such as for retrieving credit reports.

Ferratum’s service has typically a one-day turnaround on loan applications, with these mainly for six twelve months, between €2000 and €25,000, to businesses that have been operational for at least two years. Ferratum might expand both the length and value of the loans over time, says Donnelly.

Mambu has been doing a fair amount of development to its platform for SME lending recently, says Pfisterer, for aspects such as revolving credit and other credit arrangements. The UK signing will offer this form of lending under a banking charter and is due to be announced shortly, he says.

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