Why did you start Smart-Pig Loans?
Smart-Pig was launched in January 2012 by two students at the University of Hertfordshire and the University of Warwick. We originally started Smart-Pig in protest of unethical payday loans, after one of us got into trouble with a payday loan and ended up owing many times what we borrowed.
Today, the industry is very different. All of the bad practices are illegal, and some of the culprits are out of business.
What was there to be angry about payday loans?
In 2012, adverts for short-term loans and payday loans were everywhere. From 2007 onwards, some lenders had raised massive amounts of money from wealthy funds and venture capitalists and flooded everywhere they could with advertising. Lenders even sponsored football clubs and free London travel on New Year’s Eve. Hundreds of other quick, online payday loan companies appeared overnight to try to get in on the action.
At the time consumer credit (all personal loans, credit cards and other credit products sold to the general public) was regulated by the Office of Fair Trading. The OFT wasn’t prepared for fast online credit, and these short-term lenders found there were limited rules to follow compared to the new FCA regulations.
Instead of doing the right thing, many payday loan companies decided to make as much money as possible as quickly as possible. All of this was common practice:
- Some customers could get a loan with limited checks, which meant some of these customers were given loans they couldn’t afford.
- Checks were predominantly based on if a customer was likely to repay, not if they could afford to.
- Some customers found hidden fees deducted from their loan amount when it arrived.
- Some customers were encouraged to reborrow unaffordable amounts again and again.
- Some customers were trapped in cycles of borrowing, where they could only repay their loan interest each month and had to “roll over” the loans instead of repaying.
- Customers debit cards were charged multiple times to try and collect repayments from their bank accounts.
What was supposed to be a short-term loan ended up turning into a long-term nightmare for some customers.
What did you do about it?
Despite some headlines to the contrary, none of these payday lenders really targeted students. However, adverts were everywhere, and students were caught in the crossfire.
We toured the country in 2011 asking 500 students about payday loans and found that 10% of students had applied for a payday loan.
We didn’t come from very wealthy backgrounds, so finding the money to start Smart-Pig was a problem. We got some money together from the three F’s (friends, family and fools!), built a website, got our consumer credit licence from the OFT, and starting lending money from the basement of our student accommodation.
What happened then?
It took almost two years of running Smart-Pig on a shoestring until we were able to find investment to grow the business and took on our first few employees.
In 2015, the Financial Conduct Authority (FCA) was created to tightly regulate the consumer credit market. This was great news and they banned more of the issues that was causing customers problems. Some lenders went out of business and those who didn’t had to make big changes to their products and some had to give customers compensation.
In August 2015 we became the first HCSTC lender (short term lender) to be authorised by the FCA, which was a huge achievement. Following this, we were able to get bank finance from overseas to make Smart-Pig the lender it is today.
Who started Smart-Pig Loans?
Smart-Pig was started by students Tom Parks and Shreiff Benaziza. Tom studied Engineering at the University of Warwick and Shreiff studied Law at the University of Hertfordshire.
Today, Tom and Shreiff are CEO and COO of SBTP Group respectively. Tom has gone on to work on and invest in other start-up businesses alongside SBTP, especially in renewable energy and green hydrogen.
Why is it called Smart-Pig?
We tried lots of other names, but Smart-Pig won. All the students we tested the names with were from the University of Hertfordshire, so blame them if you don’t like it!
What are SBTP Group and Buffa Loans?
In 2018 we decided to start working on a new lender, buffa, to bring everything our customers loved about Smart-Pig to the wider short-term loan market. We launched buffa in 2019 and you can find us at www.buffa.co.uk.
Buffa and Smart-Pig are both part of SBTP Group, which we are growing into a network of responsible, customer-first lending business. Soon, short-term loans will be only part of what we do as we build on the different services we offer.
In 2019, buffa was given the dubious honour of “Least Worst Short Term Loan” by long term short term loan
critic Money Saving Expert.
Representative 842% APR.
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