London-based fintech lender Creditspring today revealed a £48m cash injection as it seeks to meet a surge in demand as consumers turn to credit amid a cost crisis life.
Creditspring, which provides a credit subscription service to members, said the new funding was now aimed at boosting its lending capacity after its own research found consumers were turning to borrowing to cope with the surge in inflation.
The company’s latest Financial Stability Tracker revealed that one in six UK adults will need to borrow in the coming months, and Creditspring is now set to shell out £100m to support its members this year, up from just 25m pounds sterling last year.
Neil Kadagathur, co-founder and CEO of Creditspring says City AM. the company’s customer base has grown by more than 50% since the start of the year, highlighting “how many people in the UK need additional financial support”.
“Over the past six months, we’ve seen customers report a 20% increase in utility spend on apps, as well as a 10% increase in transportation spend,” he said.
“We know the cost of living crisis is hitting people hard and while this may lead to increased defaults, we have made changes to mitigate this, including carrying out even tighter checks and ensuring that that our clients have access to the financial tools and assistance they need.”
Kadagathur said AM City the company had now “tightened” its acceptance criteria to ensure it was still lending responsibly.
The increase in funding comes as Creditsprings’ Financial Stability Tracker showed that three in ten people are now ‘terrified’ about their financial future, with the figure rising to 39% among people with incomes below £10,000 a year .
The company said it will now funnel the funds into “substantial” growth of its team, with plans to double the employee base by the end of the year and target 30 new hires over the course of the year. this quarter alone.