Qard: Opening up financing to e-merchants!

3…2…1… Loan!

A recurring issue in the finance sector, difficulty accessing bank loans represents a major hurdle for the development of French SMEs and micro-businesses.

However, this situation could improve as new players arrive that want to break with this “financial conservatism”. One of the players of this change is Qard, a young startup that finances, via an innovative online service, French SMEs and micro-businesses that don’t have easy access to bank loans. Azzeddine Chaibrassou, cofounder of the startup, talks about the birth of this innovative entrepreneurial project.

Reinventing finance

With university courses at the intersection of IT, marketing and commerce respectively, Qard’s founders have built an entrepreneurial project fuelled by a desire to inject fresh blood into finance!

With a dual specialisation mostly acquired abroad (Netherlands, Luxembourg, Switzerland), Azzeddine — our entrepreneur — gained a solid background facilitating his insertion into the financial microcosm. Thus, after his studies, the young entrepreneur took time to nurture his entrepreneurial idea by immersing himself in his chosen field: finance. Then, with 10 years of professional experience as a financial strategy consultant with Swiss and Luxembourgish private banks and investment funds, Azzeddine felt the need to leave this circuit by creating his startup in collaboration with his partners. That’s how Qard was born.

Founded in 2017, “Qard is a financial technology startup whose mission is to reinvent e-merchant financing”, explains Azzeddine Chaibrassou.

But where does this startup’s raison d’être come from?

Quite simply from an identified need that has existed for some time and is familiar to everyone in the world of finance: the lack of access to loans for small businesses. However, given the emergence of new finance players, it would appear that the situation is beginning to improve for these small entities often excluded from bank credit. The reason is that the recent advent of fintechs has generated fresh impetus within finance and has provided new business opportunities for entrepreneurs who want to become involved in this segment where (almost) everything still needs to be done. Our cofounders’ approaches therefore originate not only in the economic opportunity provided by this niche, but also and mainly in e-commerce businesses’ financing requirements.

Indeed, small businesses do not have accounting expertise because of their low level of income. This automatically leads to insufficient clean and reliable data, indispensable in order to obtain bank loans. In other words, without audits or standardised accounts, they are unable to obtain bankers’ trust.

This is where Qard comes in, by providing small e-commerce entities with viable funding solutions of up to 50,000 euros via the development of financial analysis algorithms and partner banking establishments.

“In order to surf this emerging change in practices, we have put in place a support technique that makes it possible to obtain loans for SMEs and micro-businesses from this data”, comments Azzeddine Chaibrassou.

The innovation provided by Qard’s algorithm system enables risks to be assessed for SMEs and micro-businesses using technologies such as machine learning and data analytics. It is therefore primarily from this new paradigm and this new configuration that Qard has emerged.

Lean Management

Based on a “standard” business model that consists in taking commission on each funding operation, Qard operates exclusively on the basis of needs. This therefore results in some inconsistency in activity because of the irregularity of businesses’ loan requests. This permanent fluctuation necessarily leads to the establishment of a limited hard core from which the startup’s teams structure themselves. Qard is thus built around the cofounders who divide up the startup’s strategic functions between themselves in order to remain frugal.

So whilst Nicolas is responsible for the marketing, communication and sales and Vincent for the technology, Dimitri and Azzeddine are in charge of the data part and the finance part respectively. The rest of the activities necessary to the startup’s good development are therefore undertaken by its ecosystem via onshore and inshore service providers and freelancers.

To summarise, Azzeddine Chaibrassou says that “this work organisation based on delivering service and closely controlling costs and investments illustrates Qard’s lean management”.

Reminder: lean management consists in reducing products’ marketing cycles, assessing the progress achieved and collecting user feedback. The purpose of this approach is to design products and services that can best satisfy consumer demand with minimal initial investment.

“The innovation we’re proposing currently concerns process and execution”

Qard’s particularity lies less in the financial product it offers its clientele — debt — and more in the way it makes it available. Indeed, Qard offers loans instantaneously, online and aimed at a disadvantaged segment (SMEs and micro-businesses), which is highly innovative in the world of finance. The innovation offered by Qard is thus technological more than it is financial, insofar as the degree of innovation of the transaction process is highly advanced whilst, at the same time, research regarding the financial product is still at an embryonic phase.

However, “product development” isn’t secondary in the minds of the startup’s cofounders, as they are currently working on structured products such as hybrid contracts. Requiring further research, these solutions are not yet sufficiently mature and ready to find an immediate economic application (the entrepreneurs are saying 1 year in the best-case scenario).

Another element of this development, increasing market share represents a major challenge for Qard. At the moment, it is focusing a little on France and mostly on Switzerland. Why Switzerland? Quite simply because that country has a particularly favourable framework for the development of disruptive fintechs. Indeed, the expertise and know-how developed in France, for example in the field of Crowd lending or Crowd funding, are attracting much interest in Switzerland. The Swiss market furthermore constitutes a sort of seal of quality and a real springboard to the world. Well-established in Switzerland, Qard’s aim is to expand across all of Western Europe in the medium term.

And that’s the least we can wish them, because the growth of players such as Qard within the financial ecosystem could prove beneficial for e-traders thanks to the establishing of a virtuous economic cycle… The project will then have come full circle!

The Qard startup has been in residence on Le Plateau since 16 April, 2018. #LePlateau is a 1,000m² space that accommodates, under one roof and for periods of up to 6 months, Societe Generale teams and ecosystem startups. Each resident works on their own project, either disruptive or innovative, in open spaces where teams commingle. The Plateau provides an environment that enables this work to be undertaken in a single place, but also and more importantly methodological support to accelerate projects, the organising of the residents and premises to enable them to swap and share their expertise and experience.