Term Finance

Term Finance: Pioneering Digital Lending in Trinidad and Tobago

Term Finance has carved a significant niche in Trinidad and Tobago's financial landscape since its inception in 2015. As the nation's first fully web-based credit institution, it has redefined access to credit for many, particularly catering to the under-banked and unbanked segments of the population, alongside small and medium-sized enterprises (SMEs). Headquartered in Port-of-Spain, Trinidad and Tobago, with its local operating entity, Term Finance (Trinidad & Tobago) Limited, situated at 1st Floor, CIBC Financial Centre, Maraval, the company represents a modern approach to lending.

The company's ownership structure highlights its strong backing: 80% is held by PointWest Capital, a private investment firm, with a crucial 20% stake owned by the First Citizens Group, one of the Caribbean's leading financial institutions. This partnership not only provides significant capital but also lends credibility and integration with established banking networks. Under the leadership of founder and CEO Oliver Sabga, Term Finance has strategically positioned itself as a technology-driven lender, leveraging digital platforms to offer rapid, paperless credit solutions. The parent company, Term Finance Holdings Limited, has also expanded its footprint across the Caribbean, with subsidiaries now active in Barbados, Guyana, Jamaica, and St. Lucia, demonstrating a robust regional growth strategy originating from its Trinidadian base.

Term Finance's business model is fundamentally digital, designed for efficiency and accessibility. It operates entirely online, eliminating the need for physical branches and streamlining the application and approval processes. This model specifically targets several key areas of credit need:

• Consumer Credit: Primarily personal loans offered to employees of partnering organizations, providing a convenient and often faster alternative to traditional bank loans.
• SME Credit: Offering online small-business financing, crucial for many local enterprises that may struggle with the stringent requirements and lengthy approval times of conventional banks. Turnaround times are typically measured in days, which is a significant advantage for businesses requiring quick access to capital.
• eCommerce Financing: Providing point-of-sale product financing, supporting online merchants and enabling consumers to purchase goods through flexible payment plans.
• Prepaid Mastercard: Facilitating digital prepaid cards powered by First Citizens Bank, further integrating its services into the broader financial ecosystem and offering convenient payment solutions.

This comprehensive digital approach allows Term Finance to serve a broad spectrum of the Trinidad and Tobago market, providing financial inclusion through technological innovation.

Loan Products, Rates, and Terms Offered by Term Finance

Term Finance offers a diverse portfolio of loan products designed to meet various financial needs for individuals and small businesses across Trinidad and Tobago. Understanding the specifics of these offerings – including loan amounts, interest rates, repayment terms, and associated fees – is crucial for any potential borrower.

Loan Products:

• Personal Loans: These are unsecured consumer credit facilities aimed at individuals, often employees of companies partnered with Term Finance. They can be used for various personal expenses, debt consolidation, or unexpected costs.
• Business Loans: Tailored for SMEs, these loans provide working capital, support expansion, or cover operational costs. Unlike many traditional lenders, Term Finance focuses on a quicker, online application for businesses.
• Product Financing: Specifically designed for e-commerce, this allows consumers to finance purchases directly at the point of sale from online merchants. This service facilitates greater accessibility to goods for customers and increased sales for businesses.
• Prepaid Card Credit: While details are less explicit, this likely refers to credit lines or advances linked to the First Citizens-powered prepaid Mastercard, offering a flexible credit option.

Loan Amounts, Interest Rates, and Terms:

Term Finance provides flexibility in loan amounts, ranging from a minimum of TT$1,000 to a maximum of TT$150,000. It is important for borrowers to note that these figures are indicative and subject to change, based on the company's internal policies and market conditions. For context, TT$1,000 is approximately US$148, and TT$150,000 is approximately US$22,200.

The interest rates applied by Term Finance are competitive within the digital lending space, typically ranging from 15% to 36% Annual Percentage Rate (APR). The exact APR a borrower receives will depend on several factors, including their credit score, the loan tenure chosen, and their overall financial profile. It is always advisable to obtain a personalized quote to understand the precise cost of borrowing.

Repayment terms are structured to accommodate borrowers, generally spanning from 6 to 36 months. Loans are typically repaid through monthly installments, conveniently managed via bank debit or through Term Finance's online portal, ensuring ease of payment for clients.

Fees Structure:

Transparency regarding fees is a key aspect of responsible lending. Term Finance outlines several fees:

• Origination Fee: This fee, charged for processing a new loan, typically ranges from 1% to 3% of the total loan amount.
• Processing Fee: A flat fee of TT$150 is generally applied for processing the application.
• Late Payment Fee: In the event of a missed or delayed installment, a fee of TT$200 or 5% of the outstanding installment (whichever is greater) is incurred.

It is critical for potential borrowers to verify these indicative fees directly with Term Finance at the time of application, as precise amounts may be subject to change and specific loan agreements.

Collateral Requirements:

Most consumer personal loans offered by Term Finance are unsecured, meaning they do not require specific assets as collateral. This makes them more accessible for individuals who may not own significant assets. However, for SME and eCommerce financing, loans may be secured by receivables or inventory, providing a level of security for the lender while still offering flexible financing options for businesses.

The Seamless Digital Application Process and Mobile Experience

Term Finance's core strength lies in its fully digital operational model, offering a streamlined and efficient application process complemented by a robust mobile application. This approach significantly reduces the time and effort traditionally associated with obtaining a loan in Trinidad and Tobago.

Application Channels and KYC:

Potential borrowers can initiate their loan application through two primary digital channels:

• Mobile App: Available for both iOS (Apple App Store) and Android (Google Play Store) devices.
• Website: A fully responsive online portal at mytermfinance.com, accessible from any device with an internet connection.

The entire Know Your Customer (KYC) and onboarding process is conducted online, reflecting Term Finance's commitment to paperless lending. Applicants are typically required to provide:

• Government-issued identification (e.g., national ID card, driver's permit).
• Proof of income, often through recent bank statements.

Term Finance utilizes an instant ID verification process through third-party Application Programming Interfaces (APIs), which significantly speeds up the initial verification steps. This e-KYC approach enhances security and convenience, allowing applicants to complete the necessary documentation from anywhere.

Underwriting and Disbursement:

The underwriting process at Term Finance is sophisticated and technology-driven. The company employs a proprietary credit scoring algorithm that goes beyond traditional credit bureau data. This algorithm integrates various financial indicators, including:

• Credit bureau information.
• Income flow analysis from bank statements.
• Employer verification.
• Behavioral indicators, which can provide a more holistic view of an applicant's financial responsibility.

This comprehensive assessment enables Term Finance to make informed lending decisions rapidly. A significant advantage for borrowers is the quick decision time: applications are typically reviewed and a decision rendered within 24 hours of receiving a complete application. This fast turnaround is a key differentiator in the local lending market.

Once a loan is approved, disbursement methods are designed for convenience:

• First Citizens Bank Transfer (ACH): The primary method, leveraging its integration with the First Citizens Group.
• Mobile Money: Offering flexibility for those utilizing mobile financial services.
• Cash Pickup: Available at designated agents for individuals who prefer or require cash.

Automated reminders via SMS and email assist with collections, and for accounts over 90 days delinquent, an outsourced agency handles recovery efforts.

Mobile App Features and User Experience:

The Term Finance mobile application is central to its digital strategy and user experience. It offers a suite of features designed for convenience and self-service:

• Loan Calculator: Allows potential borrowers to estimate repayment schedules and costs.
• Document Upload: Simplifies the submission of required identification and income proof directly from a mobile device.
• Balance Tracker: Enables customers to monitor their outstanding loan balance and payment history in real-time.
• e-Statements: Provides access to digital statements for record-keeping and financial management.

The app has generally received positive feedback from users. On iOS, it boasts a rating of 4.2 out of 5 stars from over 150 reviews, while the Android version holds a 4.0-star rating from more than 200 reviews. Users frequently praise the app's ease of use, intuitive interface, and the speed of the application process. While some negative feedback points to occasional server downtime or strict credit criteria, the overall sentiment reflects a positive user experience with a highly functional digital lending tool.

Regulatory Compliance, Market Position, and Competitor Landscape

Operating within the financial sector of Trinidad and Tobago demands strict adherence to regulatory frameworks. Term Finance demonstrates a commitment to compliance, ensuring its operations are legitimate and consumer-focused. This section explores its regulatory standing, competitive environment, and overall market position.

Regulatory Compliance and Consumer Protection:

Term Finance is a fully licensed entity, operating under the direct oversight of the Central Bank of Trinidad & Tobago as a financial institution offering credit facilities. This licensing ensures that the company operates within established legal parameters and is subject to regular scrutiny. Furthermore, Term Finance is also subject to FINCORP regulations and undergoes periodic audits by the Financial Intelligence Unit (FIU), which are critical for preventing money laundering and terrorist financing. To date, there have been no reported regulatory actions against Term Finance in Trinidad and Tobago, indicating a clean compliance record.

Beyond regulatory mandates, Term Finance has implemented several measures to safeguard consumer interests:

• Transparent Fee Disclosure: Borrowers are provided with clear information regarding all applicable fees, as discussed in a previous section, helping them make informed decisions.
• Right to Early Repayment: Customers have the right to repay their loan earlier than the stipulated term without incurring penalties, offering financial flexibility.
• Dedicated Complaints Process: A formal and accessible complaints process is available via their website, ensuring that customer concerns can be addressed effectively and efficiently.

Market Position and Competitor Landscape:

In Trinidad and Tobago's evolving digital lending market, Term Finance has established itself as one of the top three digital lenders. It competes primarily with other digital-first financial technology companies such as FastCash Caribbean and FintechTT. What sets Term Finance apart and forms its key differentiators include:

• Fully Web-Based Model: Its entirely digital platform provides unparalleled convenience and accessibility.
• Faster Turnaround: The streamlined application and underwriting process often results in quicker loan approvals and disbursements compared to competitors and traditional banks.
• Integration with First Citizens Banking Network: The strategic minority investment by First Citizens Group offers significant advantages, including seamless fund transfers and enhanced credibility.

Term Finance's growth trajectory is robust, marked by consistent regional expansion each year since its launch, now encompassing Barbados, Guyana, Jamaica, and St. Lucia. Future plans include entering additional Eastern Caribbean markets like St. Vincent & Grenadines and Grenada by 2026, signaling ambitious growth. The company has also forged significant partnerships, notably with First Citizens Group and telecommunications provider bmobile (as a Champions of Business Awards sponsor), which strengthen its market presence and service delivery.

Customer Reviews and Service:

Customer feedback generally highlights the efficiency of Term Finance's services. Positive reviews frequently commend the speed of approval, the ease of use of the mobile app and website, and the clear online interface. These aspects are critical for users seeking quick and hassle-free financial solutions. However, some negative feedback pertains to occasional server downtime, which can temporarily disrupt service, and what some perceive as strict credit criteria. The latter is a standard practice for responsible lending, especially for an unsecured product.

Term Finance provides comprehensive customer support through various channels, including 24/7 chat support, email, and a dedicated phone line. They aim to adhere to a Service Level Agreement (SLA) promising a response within two business hours, which is a commendable standard for digital lenders.

Practical Advice for Potential Borrowers in Trinidad and Tobago

Before committing to any loan product from Term Finance or any other lender in Trinidad and Tobago, it is essential for potential borrowers to approach the decision with careful consideration and a clear understanding of their financial situation. Here is some practical advice tailored for locals:

1. Understand All Terms and Conditions:

Always read the fine print. While Term Finance aims for transparency, it is your responsibility to fully comprehend the loan agreement. Pay close attention to the interest rate (APR), the total amount repayable, the loan term, and all associated fees (origination, processing, and especially late payment fees). Do not hesitate to use their customer service channels to ask questions about anything unclear before signing.

2. Assess Your Affordability:

Before applying, objectively evaluate your current income and expenses. Use the loan calculator on Term Finance's app or website to determine if the monthly installments fit comfortably within your budget. Over-borrowing can lead to financial strain and potential default, which can negatively impact your credit history.

3. Be Aware of Interest Rate Variability:

Remember that Term Finance's interest rates range from 15% to 36% APR. Your specific rate will depend heavily on your credit score and other financial indicators. A higher credit score generally translates to a lower interest rate, saving you money over the life of the loan. Strive to maintain a good credit history by paying bills on time.

4. Prepare Necessary Documentation:

Term Finance’s process is digital and fast, but it relies on complete and accurate information. Have your government-issued ID and recent bank statements (as proof of income) readily available for upload. Delays in providing these documents will prolong your approval time.

5. Utilize the Digital Platform Wisely:

Leverage the convenience of the Term Finance mobile app. Use the balance tracker to monitor your loan status and payment due dates. Set up automated reminders for payments to avoid late fees, which can add up quickly (TT$200 or 5% of installment). The e-statements feature is useful for maintaining personal financial records.

6. Compare with Other Options:

While Term Finance offers significant advantages in speed and accessibility, especially for the under-banked, it is always wise to compare their offerings with other financial institutions in Trinidad and Tobago. Explore options from traditional banks (if you qualify), credit unions, or other digital lenders like FastCash Caribbean and FintechTT. Different lenders may have varying rates, terms, and eligibility criteria that might better suit your specific needs.

7. Borrow Responsibly:

Only borrow what you truly need and have a clear plan for repayment. Avoid taking out loans for non-essential items or simply because the money is readily available. Responsible borrowing builds a positive credit history, which can be beneficial for future financial endeavors.

By following these practical steps, potential borrowers can make informed decisions when considering a loan from Term Finance, ensuring a positive and financially sound experience within Trinidad and Tobago's dynamic lending environment.