A benefit of modern banking technology and licensing is the power “to create players and lenders to serve nearly every niche”, writes Oliver Smith in an article for AltFi. One of the newest banks being set up is for farmers, Smith reports.
The Chester-based bank, called Oxbury, will help lend to farmers facing a dearth of cash after Brexit and will lend according to specialist cashflow needs that can often fluctuate seasonally. Referring to an article in The Times, Smith says Oxbury is close to securing a banking licence. The board of directors of the company include ex-head of business banking at HSBC, Huw Morgan, and former Bank of England adviser, Tim Fitzpatrick.
James Farrar, CEO and co-founder of Oxbury, says: “Oxbury provides farmers with the specialised lending they need to run their farms and offers savings accounts to any individual or business that want to back British farmers and UK agriculture.”
Warnings from the National Farmers’ Union indicate that Brexit could have a bad effect on the farming sector, but that’s yet to be seen, Smith writes. He adds that “the team are certainly entering a market hungry for support”.
AltFi article
Fintech helping late payments?
In the UK, research finds that there were fewer late invoices paid to small businesses in 2019 than in 2018, according to a PYMNTS article. The Construction Index reports that construction firm Kier Construction has been reinstated to the UK Prompt Payment Code (PPC) as of December 2019. PPC was created in 2008 by the UK government as a response to a call from businesses to transform the payment culture, and the businesses who sign up to this code have a set of principles to abide by. But how can fintech help improve invoice wait times further?
The article refers to another PYMNTS article that reports Scott Wolfe, CEO of Levelset, a platform that helps construction contractors get paid, believes that fintech solutions have an opportunity to help the construction sector. Wolfe is quoted as saying this in respect of the “fragmented tiny players” in a large construction product “who are overlooked with respect to the payments problem”.
Also, in January 2020, investors backed a US-based fintech that aims to be a “provider of accounts receivable services to help small businesses recover revenue stuck in unpaid invoices”, according to PYMNTS.
However, it’s not all good news regarding wait times for invoice payments in the UK. The article reports that the wait times for invoice payments in the UK have doubled in B2B businesses, despite there being fewer late payments. The article reports on the latest data for this including:
- The average time a small business waited to receive a payment on a past-due invoice in 2019 was 23 days – it was 12 days in 2018, according to MarketFinance data as reported in an Accountancy Age article.
- 87% of small businesses say they have taken on fewer orders because of cashflow constraints due to late payments, according to the MarketFinance data.
PYMNTS article
Digitising bookkeeping
An India-based fintech startup that enables digital recording of credit or payment transactions through a mobile app is gaining traction, Tahira Noor Khan reports in an article for Entrepreneur. The company, called OkCredit, was founded in 2017 by Harsh Pokarna, Aditya Prasad and Gaurav Kumar.
Since 2017, OkCredit has attracted a user base of more than ten million people, spread across 2,800 cities in India. According to Khan, its use is growing 100% month-on-month since January 2019.
Kumar, co-founder and chief product officer, explains how the idea for OkCredit was born out of observation. “We noticed that we would buy things on credit from our grocery store and the shopkeeper would take a long time finding entries and filling in the details,” Kumar is quoted.
The three founders then came up with the original product of OkCredit to help small business owners and their customers, “and that is why it resonated with our users”, says Kumar.
Khan reports that the startup has digitised the process of paper account books and has made it easier and faster. The free app includes features such as sending automatic WhatsApp reminder messages to customers after spending.
The company has raised multiple rounds of funding, including a Series B funding round of US$67m led by an existing investor, and in June 2019, it raised US$15.5m in a Series A funding round. In total, OkCredit has raised US$83m.
Entrepreneur article
How have you seen fintech innovations improve your sector? Leave your comments below.
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