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Behind the Idea: Monedo

Monedo is an alternative online lending provider who has provided more than two million loans and served over one million customers since launching. It recently announced it’s in the process of rebranding Kreditech to Monedo across its four key markets of India, Poland, Spain and Russia, a culmination of two-years of strategic refocus.

The changes have already taken place at its German parent company and in Poland. Other markets will follow in coming months.

Chief Executive Officer, David Chan, who was previously CEO of Barclaycard Europe, estimates that Monedo has a global market of approximately EUR300 billion in consumer credit issuance to target, which will help drive growth.

David Chan CEO of Monedo
David Chan, formally CEO of Barclaycard Europe, is the current CEO of Monedo

What has been Monedo’s response to financial technology innovations?

We are embracing them and even paving the way in areas such as AI use for lending. Fintech innovation is the lifeblood of everything we do and it’s at the heart of our business model.

We’re an alternative online lending provider operating in India, Poland, Spain and Russia. Through our use of technology, we’re able to bring greater financial freedom for our customers, where traditional banks can’t. Our aim is to build better access to credit through technology, using the data in a way it has never been used before.

Our team of data scientists are pioneering advancements in artificial intelligence and machine learning to make better customer lending and credit risk decisions, and underwrite loans.

Our AI-driven credit scoring technology and digital lending process is fully automated and needs no human intervention. This means Monedo customers can receive personalised loan offers and pay-outs when they need them, day and night, week or weekend, through a fast and convenient online process. This gives us a competitive edge over traditional, conservative banks who often leave customers waiting days for a decision; with many of them closed during the evening and weekends.

How has this changed over the past few years?

Monedo (then Kreditech) was founded in Hamburg in 2012. Like many fintechs, it came about as a response to the 2008 banking crisis. Our ethos is about taking the best innovations in technology to help those who can’t traditionally get access to loans. This could be because they’ve recently moved to a new country and therefore their credit history doesn’t show up on traditional bank’s systems; or it could be they have slight spending blemishes on their file from a few years ago.

But a growth in real-time alternative data sources, AI and computer processing power in recent years has meant lending companies no longer need to rely on just historic data when assessing the risk of a loan applicant. Our view is that someone’s past isn’t always the best predictor of their future and by accessing alternative sources of transactional and behavioural data we can build a much better picture of who’s applying for credit, which aids our automated decision-making process.

This “underserved”, or so-called “near prime sector” is estimated to be worth EUR300 billion globally by our calculations and ever advancing alternative data sources and machine-based learning algorithms are key to unlocking it.

How have you created a culture of change inside the company?

I joined Monedo in 2018 with a 20-year background in financial services. I’m confident that some of my experience and of others in the leadership team help create a scale-up culture at Monedo that sets us apart from younger fintechs.

But I also believe the diversity of our overall company is the key to our success and a healthy company culture. We always look to hire the best brains in lending and tech, and we’ve employed more than 350 people from over 40 nations in seven different countries. I’m a strong believer that having a bright, diverse team sparks new ideas and challenges existing approaches. Having a multicultural team also creates a richer environment in which everyone can flourish.

Our recent rebrand from Kreditech to Monedo follows 24 months of strategic refocus at the company. That’s included the appointment of a new Chairman, myself as Chief Executive, Chief Financial Officer and Chief Technology Officer. Our people and culture have been absolutely key to that and have helped us raise more than EUR45 million during that period, led by leading tech investors HPE Growth and Runa Capital.

What Fintech ideas have been implemented?

AI and machine learning have been at the core of Monedo’s business since inception but in recent years we’ve also implemented some new technologies.

In Poland, for instance, our business model allowed us to team up with e-commerce partners so that buyers can choose Monedo credit as a payment option when shopping online (either as a direct loan or through a buy-now-pay-later option).

We’ve also recently overhauled our back-end technology platform for flexibility and scalability.

What benefits have these brought?

Using AI and machine learning means we can automate a lot of our decision-making processes and therefore serve customers better, as we can speed up applications and provide credit 24/7. By building a far more comprehensive picture of applicants we can also provide credit to a much wider group of people who want to borrow.

Our e-commerce or “point-of-sale” technology also means we’re able to open up new lending channels, which is creating new revenue streams for us and online retailers, while providing more flexibility for online shoppers. Usage figures of our “pay-later” service in Poland show this is proving even more popular during lockdown. I strongly believe this ever-evolving behaviour of more people shopping online using their laptops and mobile phones will be a permanent change and reinforce opportunities for digital businesses like ours.

The new back-end technology platform we introduced last year is also helping simplify and speed up the application process for customers, while helping us process data and understand our customers better.

Do you see any other industry challenges on the horizon?

The Covid-19 pandemic, and recession that it’s created, is the biggest challenge facing all businesses right now. It is now clear we are in a global recession, caused by a massive drop in consumer spending, which is driving rapid unemployment.

For the fintech industry, it’s challenging many start-up’s business models, which have been focused on growth and customer acquisition over profitability. What’s clear now is that fintechs need to focus on managing cash flow and profitability as a matter of urgency. The pandemic is also creating new challenges in terms of assessing credit risk.

Can these challenges be aided by Fintech?

Absolutely, whereas banks were a big part of the problem during the 2008 Global Financial Crisis, this time around it’s different. The financial services market, with fintech at the heart, can play a key role in helping those worse off.

The financial services market is playing a key role in terms of keeping economies moving and supporting individuals though continued access to finance and helping those having trouble managing their debt. Governments have done a great job of championing the fintech industry in the past, and by including them in government-backed loan schemes, can go one step further, for both the industry and those in need.

With many workers in furlough, I also think there’s more the sector can do through volunteering and helping the societies in which it operates. Whether that’s through providing skills training to the unemployed or funding and distributing food packages to those affected by the pandemic, like we have in Thailand, there’s more that we can all do.

Final thoughts…

While it may seem like a distant possibility right now, the Covid-19 crisis will end. The distrust of traditional banks caused by the 2008 financial crisis, and unemployed bankers turning their knowledge to a better use, helped birth the fintech market we know today.

The growth of artificial intelligence and machine learning was one of these innovations and has created a whole new category of smart banking, which is helping better serve customers.

I am confident that the current crisis will bring new opportunities and new innovations for the financial services industry, and the world at large.

Monedo is where the best finance and tech brains come together. Thanks to our unique 
scoring technology and digital lending process, our customers receive offers


  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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