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Nemuru: a 360-degree consumer financing solution


For customers, access to financing options for their diverse needs can unlock their spending potential. Although banks provide financing solutions to a majority of the public, there are still large groups of consumers who do not have full access to a number of financial options or who miss out entirely. These groups aside, it is common for consumers to find it difficult to get financing for their specific needs that go beyond traditional loans.

There is clearly a gap within the consumer lending landscape and in this highly digitised world, customers are invariably ready to welcome innovative and tailored solutions that may not always be available from traditional banks. Nemuru aims to bridge this gap by providing lending solutions for merchants, platforms, and banks to better serve the final customer and help businesses and lenders grow their business or portfolio.

What is consumer financing?

Customer financing lets customers buy goods or services by lending them credit. This way, the customer gets the product or service right away, but they pay over time. However, the merchant receives full payment upfront. The customer is typically charged interest on the financing while the merchant might have to pay a small fee for each financed transaction. In some cases, the merchant bears all the cost of financing by providing a very attractive 0% interest option to their customers.

The current state of the lending market

The post-pandemic era will entail a shift in consumer mindset regarding personal finances, especially due to the economic stress that is still being experienced globally. With fluctuating fuel prices, inflation, and overall uncertainty, risk aversion behaviour will only become more commonplace. This means that there will be a higher degree of decision-making processes by the average consumer, for high- or medium-ticket than there ever was.

The conventional way to offer consumer loans is losing relevance as merchants have high operating costs, lose time in administrative processes and need extra effort for the applications as most of them are still done physically. Besides that, the customer is required to deal with a considerable amount of documentation and to submit personal data to merchants, along with hard copies of their documents. Also, another big pain point is that the customer needs to be present at the point of sale.

A solution that offers the customer alternatives for financing a transaction, as well as a smooth experience by simplifying the process of applying and obtaining one, can go a long way to alleviate the customers’ scepticism toward any such high-ticket purchases. New players in the

consumer lending industry have emerged to serve this need for customers, thus, benefiting the merchants and the lenders.

The Fintech Revolution

There is a clear need for solutions that resolve these barriers to consumer financing and transform the way that the financial institutions, payments gateways, and merchants provide and process lending solutions. As in most cases, it is technology that provides the solution. Fintech has enabled the digitalisation of lending and allowed new players to enter the lending market. As for the incumbents who have embraced it, it has helped them to stay relevant.

As BNPL markets and BNPL-focused fintech scale, banks could lose out by not acting. Research estimates that BNPL fintech has already diverted $8-10 billion of annual revenue away from banks. This need not be the case since 70% of BNPL users would be interested in using BNPL offerings from their banks – if they were available. (“The Deloitte and Mambu guide to Buy Now, Pay Later (BNPL)”)

In effect, the market presents two general ways to offer consumer financial products. One of these, high tickets, represents the offer of goods and services where their price is high, so the process needs to be compliant with KYC perspective and the AML regulation; it is therefore a more robust process than the low tickets process. The second way, low tickets, is simpler because it does not require documentation, video identification, etc. (BNPL). Both processes and their manner of offer could be 100% digital.

Top-line growth and merchant adoption: Widespread merchant adoption is a key driving force of BNPL’s success. Merchants typically experience growth through sales conversion and basket size. Research shows increases of 30-50% in average order value (AOV) and a 20-30% improvement in sales conversion when BNPL is offered. Worldpay data indicates that BNPL accounted for 2.9% of global e-commerce in 2020 with the highest adoption in mature markets. Market share is expected to reach 5.3% by 2025. BNPL adoption has erupted in mature markets including Sweden (25% penetration) where it is the leading e-commerce payment method and Germany (20% penetration) (“The Deloitte and Mambu guide to Buy Now, Pay Later (BNPL)”)

How Lending-as-a-service solutions can be helpful For Customers:

● Increased buying power

● Helps in improving credit score
● Transparency in the transactions
● Financial inclusion
● Simplicity in loan applications
● Multiple financing options to choose from For Merchants:
● Improves customer experience and retention
● Boosts sales: Higher AOV, Higher Conversion rate, Higher LTV
● Helps attract new customers
● New revenue streams
● Payment in instalments means cash flow benefits
● Lenders with solid financial backing and capital can offer their own BNPL financing solutions
● Can leverage their customer data to improve their loyalty program’s value proposition and provide better-targeted offers

For Financial Institutions:

● White-labelling is cheaper than building own
● A larger data pool for the platform means smarter solutions
● Economies of scale
● Can get to market faster
● Speeds up digital transformation
● Amplifies the scope of the market
● Exponential revenue growth
● New products for their customers and SMEs
● Opportunities to engage and monetise their existing merchant relationships ● Attracts new merchant clients looking to introduce BNPL offerings
● Create cross-sell opportunities for additional products and value-added services ● Can help grow retail banking customers, at a lower acquisition cost

About Nemuru

Nemuru is a credit-as-a-service platform that aims to democratise financing access for customers and allow businesses, platforms, and lenders to grow their sales and portfolios

respectively. Founded in 2018, and based in Barcelona, Spain we are a group of 20 enthusiastic members sharing the common goal to revolutionise consumer lending. We are dedicated to making the best lending solution for customers, businesses, and financial institutions. Our aim is to make credit services accessible to everyone, that are simple and convenient for all parties involved.

Our platform acts as a credit intermediator and provides an advanced API that can be easily integrated by merchants, platforms, payments gateways or lenders such as banks to provide lending solutions to their clients. From BNPL or POS / Consumer financing (including auto loans) to white-labelling of the lending platform, Nemuru is here to offer 360-degree lending solutions.

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