Dealflow | November 13, 2018

Amalgamated Bank joins $26 million closing of Insikt social bond securitization

Dennis Price
ImpactAlpha Editor

Dennis Price

ImpactAlpha, November 12 – Insikt, propounded ‘in-seekt’, is a tech-enabled community development finance institution that makes small loans to working families in the U.S. through its lending platform Lendify.

The fintech firm packages up the loans the into securities, which it then issues as bonds to financial institutions, foundations and private investors. Its latest $26 million securitization attracted Amalgamated Bank, a B-corp-certified commercial bank that went public on the NASDAQ stock exchange in June.

The issuance marks Insikt’s fifth securitization this year, backed by 21,000 loans. INSIKT’s total securitization volume across 16 issuances reached $273 million.

Insikt launched Lendify in 2014 to serve America’s 66 million underbanked and unbanked and break their reliance on predatory and payday lending. The cloud-based lending platform uses a proprietary algorithm to offer loans of between $500 and $1500 with annual percentage rates of between 30% and 60% (pay loans can reach annual interest rates of up to 400%). The firm says that two-thirds of its repeat customers improve their credit scores an average of 312 points between their first and second loan.

“How they structure their securitization program gives us the confidence that our investment will make a meaningful difference in the communities that need it most,” said Amalgamated Bank CEO Keith Mestric, “while providing a healthy return for our shareholders – which is even more important now that we are a public company.”