Sun Finance is a rapidly growing online and mobile lending platform focused on providing great customer journeys. With over 6 million registered customers, across 8 different countries, it offers a variety of lending products, including microloans and Buy Now Pay Later.
Founded in 2017 by Toms Jurjevs, the company aims to become an accessible one-stop-shop for consumer financing needs, particularly focused on alternative finance and historically unbanked consumers.
In light of this, The Fintech Times sat down with Jurjevs to learn more about one of the fastest-growing online lending platforms on the market.
Tell us more about Sun Finance
Sun Finance is a mobile and online lending platform that offers a variety of lending products to our consumers across 8 countries. We call ourselves a lending platform as we don’t just do one particular type of loan, we offer anything from a short term loan or a single payment load right up to a line of credit and instalment loan. Founded in 2017 we initially launched in Latvia, and soon launched in Scandinavian markets as well as several other countries, from Central America to South-East Asia.
What was the inspiration behind founding the company?
One of the reasons why I founded Sun Finance was that I wanted to be a founder. I was in the industry before that working in a company with a similar product portfolio in similar countries. I started there when I was 21 years old and stayed for 8 years, eventually promoted to a regional director position. I was successful for my age but I was still an employee – I always wanted to sit at the shareholder table and feel a sense of ownership, like I was working for myself.
I left the previous company before I turned 30, as I thought that was a big milestone in my life and something needed to change. I called up my best friend and said, ‘do you want to come with me and make something from scratch?’ He said yes and so here we are.
What are the main challenges you have faced?
We come face to face with challenges every day, both large and small. The large challenges have changed over time, with the biggest challenge for our first year being to find the right core management team of the company. This is parallel of course to launching the business, but we wanted to succeed from day one and be larger than any of the other players in Europe. My co-founder and I understood that if we wanted to be successful it couldn’t be a one-man show and we would need a core management team that we can trust to lead and help grow the company.
For the first year, we were focused on attracting these people, many of which I knew personally from previous experiences within the industry. We ended up with 22 people in the core management team of the company in 2017, and currently, they’re all still here. I believe our people are the core success of Sun Finance, that I can lead them but allow them to lead their teams. We’re not bosses and employees, they’re all essentially partners and a part of the shareholder programme, so we all have a mindset of entrepreneurs rather than employees.
How much has regulation affected your operations, particularly with your expansions?
Regulation is always on the table when you’re in this business, it’s a constant thing on your mind particularly the more countries you do business in. This can actually be helpful in a sense of diversifying your risks, which is one of the reasons why Sun Finance operates in such a wide list of countries. If you only operate in one country then of course you only need to worry about that particular regulation. But if you have problems with that regulation or they crack down on you etc, then you start to have problems with operations. However, with a diversified list of countries and therefore diverse regulations, you’re better equipped for when that regulation comes into play. As a large company, we are always happy to receive regulation as it gives you ground rules and guidelines on how the business should go forward.
How does the industry differ in different regions?
What we have experienced in entering these different markets is what we call the 80/20 rule. For us, this means that 80% of the business in every country is the same, this is what we do centrally through our HQ. However, 20% of the business relies on the local knowledge of the local market. So, to be successful as a group you need to know both of these things and know that not everything is done equally in each country. Some things can be centralised to save cost and be more efficient, however, companies often fail when expanding as they forget about this local knowledge and the local specifics of the market. They just try and do everything the same as in the previous country and that often ends up as a failure. We appreciate our country managers and our local people very much as we know that in the end, it’s the local employees doing the groundwork and making the business work, we’re just supporting them.
Last year Sun Finance launched a Buy Now Pay Later product, what are your thoughts on the BNPL market currently?
I would say BNPL is the hottest topic in fintech right now. I think BNPL now is what Uber was 10 years ago, super cool and trending with many companies trying to do it. It’s a very interesting business, but of course, there are always issues as a business. Many companies in the BNPL space tend to be loss-making companies. They’re growing but the bottom line isn’t showing right now, leading to companies trying to push the boat out to make some bottom line profits. You’ll see there’s a lot of marketing around BNPL companies, with players in the industry trying to appeal to as many potential customers as possible through things like zero fees etc.
In light of this, I predict that in a couple of years in this market it’ll be very clear who are the winners and the losers and who comes out on top, and these products which are currently completely free for the consumer are going to start charging interest or fees. It’ll be interesting to watch the next few years to see how it all plays out.
For us, we’re trying to be a profitable fintech company and aren’t raising billions every month, so we offer a similar product with some interest involved. It’s a flexible product allowing you to split larger and smaller purchases based on your payment preferences up to a term of 36 months.
What are the other trends you’ve noticed in the industry?
I think there’s still a sense of the pandemic impacting the industry. It showed the world that the future is online, you can purchase things online, you can borrow money online – everything you could do before with your finances you can do online and it’s often more efficient. However, this has also led to increased awareness of customer experiences and customer satisfaction, with a bigger awareness of fintech.
Previously, everything to do with money was done through a bank, your savings, loans etc -all aspects of your finances were controlled through a bank. However, what we now know is that you can’t be an expert in all areas and banks aren’t doing everything efficiently and effectively for customers. This is where fintechs come in as they are focused on providing better experiences for customers with streamlined offerings, doing one thing really well. That’s the future of the industry.
What are the company’s goals for the future?
We have our own buzzword exercise matrix growth structure, where we have the x and the y axis. On the one axis we have growth in geographies, where we want to launch in new countries, and on the other axis we have new products, and opening new products in those markets in which we’re already present.
We have a couple of countries in our pipeline that we want to launch into in the near future. In that respect, our ultimate goal is to have a further 15-20 countries and in all of those countries have at least 3-4 products that we offer on our platform.