Elfin Market

Idea

Introduction

Credit cards are commonplace in the UK. Every day, millions of people use them as a flexible way to borrow money, whether to cover occasional large expenses or to fund their everyday spending. There are actually over 60 million credit cards in the UK and the outstanding credit card debt amounts to £72 billion.

But when it comes to cost, we believe customers could be much better served. Current credit card APRs have reached 24.7% on average - the highest recorded in 13 years. Not to mention the many additional fees: balance transfer fee, annual fee, cash advance fee, late payment fee.

Elfin Market wants to disrupt the credit card market and offer a fair and affordable alternative to “traditional” credit cards. To do that, we use peer-to-peer lending. That means we directly connect borrowers and lenders without costly intermediaries.

With 5.8% representative APR, our line of flexible credit, the Elfin Purse, has a 75% cheaper representative APR than the average credit card, and comes with no additional fees.

Intended impact

With the Elfin Purse, borrowers get a line of credit that they can draw upon as often as they wish, up to their credit limit. Withdrawals are transferred to the borrower’s bank account within seconds, and they can use the funds however they like.

We’re also working on adding a payment card, the Elfin Card, which will be directly linked to the borrower’s Elfin Purse to make it even closer to a regular credit card.

Lenders lend their funds to our borrowers, who have all passed our strict credit checks (we’ve approved less than 7% of borrower applications so far). These funds are used to finance the flexible lines of credit our borrowers receive. Our lenders enjoy attractive returns, automated distribution among multiple borrowers, and flexibility on their investments. Also, thanks to our Innovative Finance ISA, they can earn tax-free interest.

Substantial accomplishments to date

- We received authorisation from the Financial Conduct Authority to run our peer-to-peer lending platform.

- We launched in September 2019 following our beta earlier in the year.

- Since then we've had a 60% monthly growth of our user base, and we now have over 200 borrowers.

- We lent over £300k since our launch and we’re already paying interest to our lenders.

- We previously raised £750k in pre-Seed funding.

Monetisation strategy

We collect a flat servicing fee of 1.5% before passing on interest from borrowers to lenders.

That’s it.

Use of proceeds

- Hire 2 developers to further build up in-house capabilities, including the launch of iOS and Android apps.

- Make additional hires for customer support, community management and marketing.

- Cover our operating costs for the next year (including the launch of the Elfin Card and an increased marketing budget).

Investor Perks

For our investors through Seedrs who also open a lender account on our platform, we offer an additional 1% annual return for any investments made until 1 month after the end of the campaign. This reward amount will be deducted from our servicing fees, so of course we won’t charge borrowers more to give it to you!

Please note that any discounts, rewards and/or offers listed by a company in its campaign are subject to the terms and conditions applied by that company. It is the company’s responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.