PERTH, Australia, May 15, 2017 /PRNewswire/ -- The Bank of Mum and Dad is not just about a loan for getting on the property ladder for first-time buyers. It is the tip of a large financial iceberg.
Research carried out for Credi by RMIT shows that the informal lending market extends into billions of dollars per year in the US, UK and Australia.
* The Australian public lend in excess of $1.65billion each year in unprotected, informal loans
* 50% of first-time buyers get help from friends and relatives
* In the US 2.3 million start-ups have been funded by friends and family
* UK and US have similar scales of relationship lending
* Credit from family and friends is the 2nd most common form of credit in the US
Loans between related parties are built on relationships. As long as a relationship remains good, the terms of the loan are met, but should the relationship sour, the loan sours also.
After a two-tier build phase, Credi launched in April 2017 as a loan management platform to enable members of the public to build, negotiate, share and manage personal loans in one platform. Credi.com delivers loan documentation, negotiation to a legal contract agreement, repayment reminders and ongoing loan management - powering "The Bank of Mum and Dad".
Tim Dean CEO says, "We want to save relationships from the strain of financial dealings by turning informal agreements into credible, manageable and formal ones. We believe that by looking after reminders, calendering and contracting on behalf of the lender and borrower we are removing the most fraught aspects of relationship loans."
"In the past people either did nothing to formalise their agreements, which is fraught with risk, or emailed and called to communicate their wishes leading to misunderstanding and confusion, or at best downloaded a loan template document that they passed between themselves - documentation that was not understood, properly completed or stored for future reference if needed. Credi does all of this and way more in one place, seamlessly. Two parties can set up, negotiate and agree a contract in minutes," Dean added.
Since launch, Credi has documented over $2M in loans, and have $3M "pending". Tim Dean commented, "It's early days, but the loans we are seeing broadly mirror our research - from a $650K loan between family members to upscale a residence to loans for cars, holidays, laptops Apple watch and even to fund a start up!"
Credi is built for individuals but is releasing a partner version for finance professionals over the coming weeks, targeting accountants, book keepers, financial planners. Tim Dean commented " We have a number of businesses lining up for our partner version. We will roll-out a comprehensive loan management system, adding to the Credi platform, including secured loans, entity management and automated bank payment reconciliation, that they can promote to their customers and in due course administer for them." After that Credi plans a global roll-out.
About Credi Pty Ltd: Credi is a Financial technology business. Our mission is to change the way we lend money. We want to empower people to help each other and take control of their financial relationships without creating friction and stress.
Learn more at https://credi.com or email firstname.lastname@example.org. Full media kit at https://credi.com/wp-content/uploads/2017/05/Credi-Media-ZIP.zip
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