Montréal-based FinTech platform Fig has launched its personal loans platform marketed directly to consumers as it looks to simplify and automate the borrowing process for Canadians.
The launch comes roughly 17 months after Fig first began offering its loans through a series of partnerships with companies like Toronto-based Borrowell. Now, Canadians can submit applications directly through Fig’s platform and website to secure a personal loan.
“We really wanted to make sure that we had the best of both worlds, which was the ability to be agile, to really drive innovation [and] disrupt the market, while leveraging the resources of a corporate entity such as Fairstone.”
Fig, which is a wholly owned subsidiary of Montréal-based Fairstone Bank, has already amassed 9,000 customers, according to CEO Francois Cote. Its founding team includes a trio of former banking executives, including Cote, chief revenue officer Monisha Sharma, and chief credit and risk officer Ardalan Shojaei. Sharma formerly headed business development at Credit Karma and developed investment strategies at RBC, while Shojaei previously held leadership positions at RBC and Capital One.
For his part, Cote has worked in the personal loans space for over 20 years in both Canada and the United States (US).
He said in his former role as chief digital and technology officer at Fairstone Bank, he identified a gap in the Canadian market for a fully automated lending product for personal loans.
“[There have been] some advancements in mortgages and so forth, but when it came to personal loans, Canadians really lacked a fully digital option,” Cote explained.
While securing a loan online is certainly not new—Borrowell, for example, offers a marketplace for online personal loans, while US players like SoFi offer online student loan refinancing, mortgages, and personal loans—Fig describes itself as Canada’s first “fully digital” lending startup.
Cote claimed that for most lenders, the process is not truly 100 percent online, often requiring a call with an agent or an in-person meeting at a bank. Fig says its platform requires no human intervention at all. Borrowers can apply within 30 seconds, get approved, and receive funds in 24 to 48 hours, according to Fig.
“If you wanted to get a similar product at a bank, it could take you days or even weeks to get a personal loan,” Cote added.
Fig is focused on the prime lending market in Canada, which refers to borrowers who have high credit ratings and a low risk of default. This segment is generally served by large banks. Cote believes this area of focus makes Fig different from other Canadian FinTech startups, which are targeting the underbanked segment of the Canadian market, such as Koho. Koho CEO Daniel Eberhard told BetaKit in 2022 that he feels Koho provides the most value to Canadians living paycheque to paycheque.
Seeing the need for a new lending platform, Cote left his role at Fairstone Bank in 2022 and teamed up with Koru, a venture studio that works exclusively with companies in the Ontario Teachers’ Pension Plan (OTPP) portfolio, which includes Fairstone.
Over the course of a year, Koru helped Fig develop a minimum viable product and hire a permanent team. The startup officially launched in March 2023 through partnerships with other companies like The Brick, Finder, ClearScore, Perkopolis, and fellow Canadian FinTech startup Borrowell.
“Hopefully in the future, it becomes a well-known brand like SoFi.”
Borrowell’s primary offering allows Canadians to check their credit score and receive personalized financial recommendations and a range of lending options. Cote said Fig’s integration with Borrowell allows users to get a guaranteed rate and approval within seconds.
“Fig has been a great addition to the Canadian financial services landscape,” Simon Wyse, chief revenue officer of Borrowell, told BetaKit. “We’ve been pleased to work with their team from the beginning, helping them develop and launch their online prime loan product.”
Cote believes Fig’s rate guarantee sets it apart from the big banks. He explained that many financial institutions approve borrowers at a specific rate, but this rate often changes once the loan is finalized. “It usually only changes one way, which is to go up,” he added.
With Fig, the rate given at approval is guaranteed. Canadians can borrow up to $30,000 and Cote claims its rates, which start at 12.99 percent, are also competitive, but noted that this claim is primarily based on customer feedback.
“If you were to try to compare those rates within the banks, it’s very difficult to find transparency,” Cote added. “…It’s hard to see what [the banks’] starting rates are, but we do know, based on our customers’ feedback, that 12.99 [percent] is quite competitive.”
For two points of comparison, Spring Financial allows Canadians to borrow up to $35,000 with interest rates beginning at 9.99 percent, while Canada’s prime rate, the rate at which banks lend to customers with good credit, is 6.95 percent as of June 5. However, banks typically offer loans at rates that are slightly higher or lower than the prime rate, depending on the borrower’s creditworthiness and other factors.
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Being a corporate venture and wholly owned subsidiary of Fairstone Bank, Cote believes Fig’s ownership serves it well, since the platform leverages Fairstone’s balance sheet in order to make loans, while drawing on Fairstone’s “100 years of lending expertise,” and its status as a Schedule I bank.
“We really wanted to make sure that we had the best of both worlds, which was the ability to be agile, to really drive innovation [and] disrupt the market, while leveraging the resources of a corporate entity such as Fairstone, which brings a lot of the security and also the stability that you would want,” he added.
Fig’s ownership structure includes Fairstone Bank, as well as Fairstone shareholders who indirectly hold ownership, including OTPP, Smith Financial Corp., and Centerbridge Partners. Cote noted that Fig is funded through its current ownership, and therefore has no plans to raise external funding in the near future, nor work with any lenders aside from Fairstone, but noted he “wouldn’t rule anything out.”
Since first entering the market last year, Cote claimed Fig has already supported 9,000 Canadians and issued $135 million in loans. Over the last year, Fig has grown not only its customer base but also its team; the startup’s headcount now sits at 35.
The startup isn’t slowing down on its partnership strategy either. Last month, Fig entered into an agreement with Walmart Canada. The deal gives the retail giant’s app users access to preferred loan rates through Fig, and up to $100 in Walmart gift cards with a Fig loan. Cote said his focus going forward is on making Fig a household name.
“Hopefully in the future, it becomes a well-known brand like SoFi,” he added. “It’s a great use case in the US. That brand would be much more out there and prevalent, and certainly something like that is what we’re looking at for Fig.”
Feature image courtesy of Fig.
