Fintech Lenders “Don’t Need No Stinking Badges” Quo: Lender to the Masses

Man, there are some serious new approaches to “The Business of Lending to the Masses” entering the marketplace.

I’ve previously broken down OneMain.com, Dave.com, and Earnin.com… and more on our Blog. Today, I point you to Quo.

Now if you’re “old school,” like I was back in the day, this will likely piss you off!

After all, to build your consumer loan business it’s likely you approached the launch of your payday loan business, your installment loan business, your car title loan business, your pawnshop business… whatever you choose to call it, and plodded through your State licensing process. You then selected a loan management software provider, integrated with ACH and debit card providers, struggled to get a bank account opened… and on and on. Just to get a State license can kill 30 – 90 days+. Oh, you’re a Lender so let’s not forget to get your Bond! And your lawyer, your consumer loan contracts… Of course, by collaborating with a federally recognized Native American Indian tribe you could get set up within 30 days and loan in 37+ States.

Why do I suspect the following Forbes piece will upset you? Because these new Fintech Lenders “don’t need no stinking badges” – I mean licenses. [Shout out to Clint Eastwood in “The Good, the Bad and the Ugly.” Great movie and soundtrack!]

According to the Forbes article:

“Quo relies on using AI to sort through a user’s financial transactions to understand their spending habits.

Once a user’s economic history is compiled and interpreted, the startup sends a debit card to the user for financial use.

The debit card allows access to two types of loans via a monthly subscription: $5.99/month for $400 at 5% APR or $9.99/month for $700 at 2% APR.

Those interest rates are dramatically lower compared to credit cards and payday loans.

The startup providing these loans from a small-monthly fee with borrower-friendly APRs reflects their mission of not wanting their users to be in debt.

Unlike the conventional credit business models, profit is not made by keeping users spending and perpetually in debt to pay interest, but by getting them out of debt to build savings.

These loans come with user-specified constraints, such as the money only being used at merchants that are relevant to the purpose of the loan. If someone is taking out the loan to make a car payment, then the user could only spend that money to pay off the vehicle for that month. More importantly, if a user falls behind on their loan repayment, Quo is able to restructure the loan in real-time to adjust to a person’s immediate financial constraints.”