Mar 11, 2022

Nstart secures a credit institution license and expands in Europe

Swedish fintech Nstart has established a unique service to challenge growing over-indebtedness. Net sales has grown sharply and Nstart now launches its second market as a next step in its European roll-out.

Nstart is a Swedish fintech challenging legacy credit models and growing over-indebtedness with new technology and methodology for sustainable lending. The company offers highly indebted consumers an opportunity to regain control of their own finances and start a journey towards freedom of debt.

Nstart has built new technology for precision screening of consumers’ financial data in real time. This generates vastly better conditions for managing and controlling risk. In turn, this makes it possible to help consumers with low credit ratings, so called ‘non-lendables’, with a solution that radically reduces costs and nudges the customer towards freedom of debt.

On average, Nstart reduces borrowing costs by EUR 500 per month and customer. If the customer honors the payment commitments and does not take up additional credit, further interest rate reductions are offered. No additional debt is granted, and the consumer never sees any new money as Nstart redeems loans and credits directly.

"Our end-game, for all our customers, is to help them get rid of bad credit and free themselves of debt. We have redesigned the way to work with consumer credit completely, by building and using new technology for real-time credit data management, risk scoring and lending. It gives us a much deeper understanding of the customer's financial situation than what traditional lenders get. Being able to control risk in a better way, we can offer the market's most sustainable lending service’" says Daniel Ahrenby, Nstart's CEO.

Demand driven by the BNPL market

Increasing availability of loans and credits and growing buy-now-pay-later behavior (BNPL) among consumers, in particular young ones, are key factors driving over-indebtedness. With it follows a growing demand for solutions offering a way out of the negative lending spiral.

For a consumer ending up in over-indebtedness, including payment remarks and lowered credit rating, chances of financial recovery through refinancing of expensive loans and credits are generally small.  

Legacy screening models applied by banks and lenders are blunt and based on historical credit information that is not always representative of the individual’s present situation. These models offer limited precision to lenders and prevent an individual with low credit rating, but otherwise stable income, from refinancing and from finding a way to financial recovery.  

"We offer a path to financial come-back for some of those who need it most, which benefits the individual as well as society at large. 50 percent of our customers had bailiff debt and about 70 percent had payment remarks, before we redeemed their expensive loans and credits. We fill an important gap in the market for consumers who have been abandoned by banks and lenders" says Daniel Ahrenby.

Nstart offers the service directly to consumers through proprietary web marketing and via lending brokers. The company has grown strongly since the start in 2016 and presently has a loan volume of approximately EUR 100 million. In 2021, net sales increased to EUR 14 million.

Launch in Norway

Nstart takes another step in its expansion now launching in Norway, as part of a broader European roll-out.  

"We see similar consumer demand in a number of European markets, where growing e-commerce and BNPL behaviour are driving over-indebtedness. We aim to launch Nstart in a number of countries in the years to come, with the objective of taking the leading position in our field in Europe. We’ve just released our service in Norway where we see strong demand’, says Daniel Ahrenby.

Consumer loan growth in Norway was dampened by the introduction of a national debt register and the Corona epidemic, but the country is still at the very top in terms of unsecured loans in Europe. 29 percent of all consumers over the age of 18 have unsecured loans with an average debt of EUR 12,000. Debt is also unevenly distributed, with half of the borrowers with the highest loans having 97 percent of the total debt.1

Daniel Ahrenby, Nstart’s CEO

Nstart facts

Nstart has built and uses proprietary new technology to deep-screen the consumer's financial data in real time, Nstart can manage and control risk more efficiently than legacy banks and lenders. Nstart's credit losses were only 1.2% by the end of 2021.

Nstart offers a refinancing solution for consumers with too much debt, to help them recover financially. The solution replaces existing expensive loans and credits, reduces costs and nudges the customer towards better creditworthiness and freedom of debt.

Customers with a high-risk profile: 50 percent of the customers had bailiff debt and about 70 percent had payment remarks.

No new debt: Nstart only offers refinancing of existing debt. No additional lending and no top-up financing.

Driven by customer intent: Nstart’s customer growth is based entirely on the customer's own intent and demand for a way out of indebtedness. Intrusive mass marketing is an absolute no-go.

Immediate redemption: Nstart redeems existing loans directly with creditors. The customer does not get any new money on the bank account, just a second chance.

Sharp cost reductions: Despite high risk profiles, Nstart reduces customer’s borrowing costs by EUR 500 per month and customer, on average. The average Nstart customer has EUR 3,000 in gross monthly salary.

Continuous cost reductions: When the customer honors the payment commitments and does not take up new credit, further reductions of the interest rate are offered.

1 Statistisk Sentralbyrå Norway,

Oscar Hyléen

Deputy CEO


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