NatWest shutters three-year-old fintech lender Esme Loans
NatWest is closing its fintech lending platform Esme Loans, which it first piloted back in 2017.
The closure follows a number of other bank-birthed fintech wind downs. Including Barclays’ Pingit, UBS’ Smart Wealth and NatWest’s challenger venture Bó.
According Esme Loans’ website, it “is being closed and is not accepting any new loan applications”. The dashboard will remain live for current users.
What was Esme Loans?
Rolled out en masse in 2018, Esme Loans operated under the leadership of Richard Kerton. Kerton spent 14 years at then-named RBS prior to the bank’s fintech creation.
It issued unsecured small business loans backed by personal guarantees, ranging from around £5,000 to £150,000 over 1-5-year periods. Limited companies with at least two years’ trading history could take out the loans.
NatWest had lent around £100 million to businesses via Esme Loans by December 2019. The bank had plans to double this in 2020 but has since made a U-turn on such plans.
Funding for Esme Loans, which enjoyed a London Tube advertising campaign for a time, came in part from Pollen Street Capital, a London-based alternative investment management company.
Add it to the list
A NatWest spokesperson told AltFi the bank is prioritising “investment spend across the bank on products and services”. They continued: “After careful consideration, we have made the decision to wind down Esme Loans.”
NatWest says it will integrate the learnings which underpin Esme Loans into future SME ventures.
“As a bank, we will continue to test and learn, investing in innovative banking services that will provide a better experience for our new and existing customers, helping them to thrive.”
The bank currently operates Mettle, a digital challenger for small and medium-sized enterprises (SMEs). The fintech once had a consumer-facing sister, Bó, wound down last year just six months after launch.
Bó accumulated just 11,000 customers, most of which were “friends and family”. It’s unclear how many users Esme Loans acquired during its longer lifetime.
In April 2020, on the eve of Bó’s closure, NatWest’s chief executive Alison Rose told Yahoo Finance UK that “the circumstances have changed”, alluding to coronavirus.
Rose said the greater “opportunity” was in the small business market, despite the fact the bank has now wound down one of its SME fintech arms.