Europe’s leading provider of digital trade credit solutions, Hokodo, has partnered with AI powered transaction analytics firm, Fuse, to enhance its credit offering to businesses in the UK.
The partnership empowers businesses to access more personalised credit options by combining Fuse’s credit risk and Income Verification tools with Hokodo’s B2B lending capabilities.
Using Fuse’s tools, Hokodo offers finance options to businesses that were previously excluded from credit such as sole traders, who are often not scored by traditional credit bureaus and therefore struggle to access credit. The latest figures from the ONS indicate that there are more than three million sole traders operating in the UK alone, highlighting the scale of the micro-business finance market.
By utilising customer income verification via Fuse’s innovative tools, Hokodo has streamlined the process for existing customers to expand credit lines by analysing repayment patterns on previous loans.
With the cost of doing business increasing over the last 12 months, many organisations have struggled with economic challenges from rising energy costs to spiking salary demands. As a result, business appetite for credit to boost competitiveness and fuel growth has increased sharply.
Recent figures from the Federation of Small Businesses suggest that demand for business finance is set to increase with 81% of finance brokers expecting a rise in demand over the next six months. However, 84% also said that high street banks were reluctant to lend to SMEs.
Hokodo recently became the first B2B BNPL provider with a full European payments licence after the acquisition of a Lithuanian payments business. This is a vital step in Hokodo’s journey to improve B2B payment options across Europe. Hokodo is now available in seven of Europe’s largest markets with expansion fuelled by last year’s $40m fundraise to enable one million businesses to access a better way to pay by 2025.
Over the past several months, the B2B lender has announced a number of key partnerships including collaborations with BNP Paribas, Citi and leading payment service providers Mangopay and Lemonway.
Hokodo is the latest lender to partner with Fuse to enhance its credit decision-making. Other partners include education lender, Knoma, which selected Fuse as its Open Banking partner.
Using insights formed through the analysis of Open Banking data, Fuse provides lenders with 97% accuracy for transaction enrichment, providing clearer insights into affordability, reduced rate of defaulted loans, and improvements to borrower outcomes.
Sho Sugihara, CEO and Co-Founder of Fuse, comments: “Hokodo is shaking-up the B2B payments space and providing businesses with alternative credit options and we’re proud to support this mission to improve the business finance market. By utilising AI transaction analytics, Hokodo can now unlock access to additional funding streams for thousands of businesses, as well as support groups such as sole traders who are typically excluded from mainstream credit options.
“By improving decision-making and offering more personalised credit products with lower risk of defaults, Hokodo can provide the financial support needed for businesses looking to kickstart their growth by utilising their innovative BNPL product.”
Nicolas Rabinovitch, Director of Data Science & Fraud at Hokodo, says: “Fuse provides us with the Open Banking data we need to make better risk decisions, offer credit to more buyers and understand buyer behaviour in a B2B context. We are now offering sole traders another path to get approved, and Fuse is helping to support these risk decisions. Ultimately, this empowers a greater number of small and micro businesses to access the credit they deserve.”
Fuse is the latest product from credit builder app, Pave. Since launch, Pave has analysed more than 150,000 lending decisions, 1.5 million consumer credit reports, and over 400 million Open Banking transactions. Pave seeks to bring more financial equality to millions across the UK. As a fully regulated credit builder, receiving nearly half a million downloads to date, Pave utilises Open Banking transactions to help consumers build better access to credit.
Fuse was also recently selected for the Mastercard Start Path Open Banking programme, an award-winning, global startup engagement programme. This will provide Fuse with the opportunity to access hands-on mentoring through Mastercard’s global network to accelerate and scale its solutions to meet long-term growth plans.