Credit Suisse once played an important role in corporate lending. But its acquisition by UBS is creating new market relationships, to the benefit of Zug-based fintech firm Cashare.
Credit Suisse (CS) and UBS long held sway in Switzerland’s corporate banking world. But the former now no longer exists. The market is ripe for a shakeup. Foreign names are some of the players now getting in on the act. Germany’s Commerzbank is one of them, as finews.ch reports.
But they are unlikely to be targeting the lending market for SMEs under two million francs. «When a major player like Credit Suisse vanishes, it has ramifications,» Michael Borter said in an interview with finews.ch.
Banks Became More Restrictive
Borter is the founder and CEO of Cashare. The fintech from the canton of Zug has focused on crowdlending. Launched in January 2008, it operates the largest and most established crowdlending platform with the biggest crowd in Switzerland.
Borter has found that banks have become more restrictive in their lending to SMEs, especially since the Covid pandemic.
But the CEO says new lending models are gaining importance, especially in the case of SME loans. «Over the past few years it’s become clear people are increasingly willing to consider alternatives.»
Non-banks as Lenders
A study by the Zug Institute for Financial Services drew this conclusion way back in 2021. It identified a sharp rise in non-banks since 2016 (from 6 to 15 percent), while banks’ share has remained unchanged. «We can definitely see this trend. And with the takeover of CS by UBS, it’s become even more evident,» Borter explains.
And playing right into Cashare’s hands. In the early years most of the clientele were private customers. Now it’s businesses. The figures speak for themselves.
More Than 200 Million Francs in Loans
The Zug-based Fintech has arranged over 220 million Swiss francs in SME loans: an increase of 7 percent. The company does not disclose revenue or earnings figures.
Cashare also carried out a capital increase last December, partly to splurge on improving its IT infrastructure.
Double-digit Growth
Borter sees IT, especially system efficiency, as one of fintech’s advantages. «All our processes are automated, except for controls. This significantly speeds up loan approvals and makes it attractive for businesses,» the former portfolio manager says.
Borter believes there is yet more potential in corporate lending. «We’re just at the start of a transformation that has been given a shot in the arm from the acquisition of CS.» He’s therefore anticipating double-digit growth for the current year.
