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  • Microlending

    Microlending is the provision of small short-term unsecured credit

    These loans are typically used by borrowers who need to cover unexpected or emergency expenditures and cannot access traditional loans or credit because they have poor, thin or no credit history. When used responsibly, micro loans offer millions of financially-excluded consumers an entrypoint or re-entry into the traditional financial system, by helping them to build credit and graduate into longer-term credit products.

    How do you set your interest rate? 



    Our interest rates are tailored to each individual borrower. The rate will vary based on the amount borrowed, the length of the loan, the frequency of repayment, and the creditworthiness of the individual. We work with every customer to choose a loan that is appropriate for their financial situation. What differentiates Oakam from other microlenders is our dynamic pricing. This means that our customers have the ability to lower their interest rates by up to 51% through a number of actions, such as on-time repayments. You can learn more about our rewards programme, Oakam Grow, here. It’s also worth noting that for new customers, our interest rates are 4% below the FCA’s 0.8% rate cap and for existing customers, we charge up to 37% below the FCA rate cap. Most of our peers operate at the rate cap.

    Is the APR advertised on your website the actual annual interest rate a consumer can expect to pay on an Oakam loan?

    As a microlender regulated by the FCA, we are required to advertise a representative APR (Annual Percentage Rate) on our website. This reflects the maximum amount a borrower would pay on a 12-month loan assuming no principal repayment during that period. While this calculation works well for loans with a duration of 12 months or more, it can be misleading when applied to shorter-term loans. Interest rates on all Oakam loans are capped at 0.8% per day as established by the FCA. Our borrowers typically pay well below this rate cap and have the option to reduce their interest rate through our rewards program, Oakam Grow. You will never repay in interest more than the amount you borrowed in principal for all our loans of up to 12 months.

    What type of loans do you give out?

    Oakam offers two types of loans: The Oakam Loan and the Big+ Loan. The Oakam Loan is our shorter-term product for first-time borrowers, which can be taken out for 6 months. However, for existing customers, the Oakam Loan is also available for a duration of 3, 6 or 12 months. We also provide existing customers with the option of choosing a Big+ Loan, which is a longer duration loan and can be taken out for up to 36 months. The availability and pricing of each product depends on the borrower’s personal circumstances and credit history.

    Where is microlending used around the world?

    The global microlending industry plays a key role in both the developing and developed world by providing financially-excluded consumers access to credit that is critical to their lives and livelihood. Although microloans are often associated with developing countries, a significant need exists in developed countries, including the UK. It is estimated that the UK alone is home to around 8 million consumers considered unbanked or underbanked.

    Are you a payday lender?

    No. While payday lenders also offer micro-loans, their business model and target market is distinctly different. Payday lenders cater to middle income consumers who are typically highly indebted and have access to other credit products, like credit cards. Oakam’s customers have little existing debt and are limited in accessing other types of credit.

    What is the benefit of taking a loan from Oakam versus similar lenders?

    Through digital innovation and the growing accessibility of the smartphone, Oakam has disrupted the micro-lending sector to bring more transparent, affordable and rewarding credit options to overlooked or financially vulnerable consumers. The benefits of our model are:


    Our digital approach to micro-lending opens up access to valuable alternative data sources that enable more accurate, inclusive and personalised credit scoring and lending, than reliance on traditional credit bureau data allows.

    Convenient access

    Customers can manage the entire lifecycle of their Oakam loan – application, repayments and loan top-ups – from our mobile app, website or call centres, providing an accessible, convenient alternative to the traditional doorstep model.

    Financial empowerment

    Our model was built to empower underserved consumers to take control of their credit health. We do so through our gamified rewards journey, Oakam Grow, which uses behavioural nudges to encourage positive financial choices.

    What happens if a customer can’t repay a loan?

    Oakam believes in helping our customers make responsible financial decisions, instead of penalizing them when they experience setbacks. As a result we don’t charge late fees on missed payments or interest in arrears. Our team works with each customer at the outset of the relationship to ensure the repayment schedule is fair and achievable.

    Want to find out more about Oakam?