NatWest owned SME lending platform Esme Loans has lent more than £50m to UK SMEs over two years.
Esme cuts the time it takes to apply for a loan to 10 minutes for SMEs, offering SMEs loans of up to £150,000. Application is made easy through the use of the latest technology, including application programming interfaces (APIs).
Esme is an example of a traditional bank setting up a standalone digital business to take on the increasing numbers of fintech competitors. It was created by an internal innovation team at NatWest Bank, led by traditional banker, come fintech leader, Richard Kerton. Definetly a case of ‘if you can’t beat them, join them.”
Kerton said: “We have achieved great momentum since launch just over two years ago, and we are now lending over three times more than we were this time last year. Our customers tell us they love the speed and ease of our platform, and we are continuing to invest in our technology to ensure that we’re offering a seamless, intuitive experience that provides customers with the funding they need.” The company recently signed a deal with Microsoft to support Esme’s automated decision making with a cloud based data warehouse.
So Esme Loans is owned by a bank but is not part of a bank. There is a logic to this with an appetite for borrowing from non-bank lenders. According to a survey of 2000 directors at UK SMEs, carried out by peer to peer lender Growth Street 49% of UK SMEs would seek financing from non-bank lenders as they begin to better understand the business models of companies in this space, including fintechs.
This is probably £50m in lending business that the RBS Group, which includes NatWest and owns Esme, wouldn’t have won without the Esme platform.
I recently interviewed Kerton at Esme Loans for my Fintech Interview series, which I will write up soon, with more detail about Esme Loans.