London fintech lender Creditspring has revealed a £48m cash injection today as it looks to meet a surge in demand as consumers turn to credit amidst a cost of living crunch.
Creditspring, which provides a credit subscription service to members, said the fresh funding was now earmarked to ramp up its lending capacity after its own research found that consumers were turning to borrowing to cope with soaring inflation.
The firm’s latest Financial Stability Tracker found that one in six UK adults will need to borrow in the coming months, and Creditspring is now poised to dish out £100m to support its members this year, up from just £25m last year.
Neil Kadagathur, Co-Founder and CEO of Creditspring told City A.M. the firm’s customer base had swelled by over 50 per cent since the start of the year, which underlined “how many people in the UK are in need of additional financial support.”
“In the last six months we’ve seen customers reporting a 20 per cent increase in utility expenses on applications, as well as a 10 per cent increase in transportation expenses,” he said.
“We know the cost of living crisis is hitting people hard and while this could lead to an increase in defaults, we’ve made changes to mitigate this including carrying out even more stringent checks and ensuring our customers have access to the financial tools and support that they need.”
Kadagathur told City A.M. the firm had now “tightened” its acceptance criteria to make sure it was still lending responsibly.
The funding boost comes as Creditsprings’ Financial Stability Tracker showed that three in ten people are now “terrified” for their financial future, with this rising to 39 per cent among people on incomes under £10,000 per year.
The firm said it will now pump the funds into “substantially” growing its team, with plans to double the employee base by the end of the year and targeting 30 new hires in this quarter alone.