Bling is successful with its microcredit app

FACTS

• Bling is a mobile application carried by the eponymous FinTech, formerly known as Sherwood. It offers a cash advance solution open to individuals.

• Bling relies on instant payment as an alternative to bank overdraft.

• The mobile application allows you to request cash advances up to a maximum amount of 100 euros.

• Eligibility criteria: have regular cash inflows (minimum 400 euros, with a history of at least 2 months); the algorithm also evaluates financial management and calculates the availability of borrowed funds (for at least 5 days in the month).

• Terms of use: amount up to 100 euros, repayable within 30 days maximum.

• Customer journey:
  • from the Bling application, users connect their bank account via Bankin' ;
  • once the bank account is connected and the IBAN verified, they can apply for an advance ;
  • acceptance is immediate;
  • in case of acceptance, Bling transfers the amount to the bank account.

• There are two transfer options:
  • a free transfer, within 5 to 7 days
  • an instant transfer charged 5 euros

• Once the amount is advanced, Bling waits for the next regular cash flow into the account (salary, pension and other allowances) to draw down the reimbursement.

• If the repayment fails, a fee of 5 euros will be charged.

• In addition, Bling allows you to set up an "anti-overdraft" alert and should soon offer a PFM tool called Money Master.

CHALLENGES

• Helping a financially fragile population: Bling's initial results show that a quarter of the amounts lent out in 2020 were used for food shopping and to pay everyday bills (electricity, telecommunications, fuel). Impulse purchases were less represented than what FinTech expected, especially since the latter is clearly aimed at a population that lives on a "just-in-time" basis. With this in mind, one of the growth areas of the start-up is also to add a transaction analysis module to its offer, which will help its customers avoid overdrafts and start saving.

• Meeting a major need: 57% of French people exceed their authorized overdraft at least once a year and 1/4 of French people exceed this limit each month.

• Bling positions itself as an alternative between overdraft and micro-credit. Bling does not fall under the credit legislation, given the repayment period of its micro-loans. It therefore does not charge interest. However, its business model relies heavily on the added value offered by Instant Payment, especially for people who need funds quickly. The start-up is also counting on the simplicity of its Open Banking based solution to build loyalty and make its customers regularly use it.

MARKET PERSPECTIVE

• Payroll advances are common in the United States, in the form of payday loans, which are very expensive. The model is now also emerging in Europe, with the Spanish examples of PayFlow or Typs.

KEY FIGURES

• 2020: launch
• 150,000 users
• 4 million euros advanced for 60,000 funded projects (average advance: 66 euros)
• 15 employees