Written by: Stuart Foxman
When Mark Maurice needed a loan as a student, he wasn’t happy with the options available. First comes the chasing for lenders. Then comes all the paperwork – and the surprises. While Maurice qualified for a low interest rate, that was just a come on. The actual rate was much higher.
There had to be a better way to secure small-dollar amount loans. Maurice, who lives in San Francisco, came up with one when he was visiting friends in Toronto. Why not create a straightforward system to connect borrowers to lenders, with competitive rates, no hassle and quick payments?
In 2018, Maurice and his friends launched the Lenmo peer-to-peer app (the name is short for “lend money”).
“We’re a fully digitized lending platform,” says Maurice, the firm’s CEO.
Lenmo (golenmo.com) links people looking to borrow not only with financial institutions and lending businesses, but also with people who have cash to lend. That gives individual lenders a short-term investing vehicle. And it gives borrowers an alternative to bank loans, credit cards or payday loans.
Right now, Lenmo is available only in the U.S., although Maurice has plans to expand to Canada. Meanwhile, the Toronto connection remains strong. That’s home base for the company’s chief technology officer (John Hakim) and partnership director (Albert Mansour). A number of initial investors also came from Toronto.
Here’s how Lenmo works. Potential borrowers simply have to submit their name, address, ID and social security number. Based on a credit report and bank-aggregated data, Lenmo then uses a machine learning algorithm to arrive at risk score. That score determines the rates offered to the borrower.
Users remain completely anonymous throughout the entire borrowing/lending process. Borrowers request an amount and the payback period. Lenders set their underwriting rules, pick and borrower and make an offer. The borrower can choose any lender that proposes a deal. Borrowers can have multiple lenders compete to fund their loan. Lenmo gets borrowers the loan the same day.
All of the administration happens behind the scenes, with Lenmo taking care of it. For re-payments, Lenmo connects directly to the borrower’s bank account and transfers the money right back to the lender. The model is simple: lenders bring the capital, and Lenmo brings the borrowers.
Loans are available up to $5,000. Within its first year, Lenmo had generated almost $1.6 in loans across almost 6,800 transactions. Those numbers are poised to grow quickly, as Lenmo now has more than 50 businesses signed, 75 who are in line for a demo, 4,500 active investors, and more than 120,000 registered users.
“Our rapid growth demonstrates that the small-dollar amount loan sector was in dire need of the mobile technology Lenmo is now offering,” says Maurice.
Lenmo charges borrowers on the platform 1% of the loan principal or a minimum of $3 (regardless of the interest rate and payback period). Lenmo Enterprise, the business solution for financial institutions and lending businesses, charges the same 1% of the loan principal or a minimum of $3 per loan to borrowers.
Before starting Lenmo, Maurice had over a decade of business development and management experience in several industries, including start-ups, in Africa, Europe and North America. He holds an undergraduate degree in engineering and an MBA.
Maurice says Lenmo is looking to recruit engineers to Toronto. He’s excited by the access to tech talent in this market, and by the overall support for entrepreneurs. “I think Toronto is one of the hubs for startup communities,” he says.
Photo: Courtesy Lenmo