Q&A with Alan Davison, chief commercial officer of Afin Bank
This morning Mortgage Solutions exclusively revealed the launch of a new mortgage lender, Afin Bank. Afin Bank announced it has secured its banking license authorisation with restrictions (AwR) and is planning a full launch into the market next year.
The digital bank has been created to serve the financial needs of people from Africa living and working in the UK, and will be offering residential mortgages for first-time buyers, movers and remortgagors, as well as buy-to-let mortgages for both UK and overseas borrowers from Africa.
Afin Bank’s parent company is WAICA Reinsurance Corporation plc, one of the largest reinsurance companies in Africa and in the top 100 reinsurers worldwide. Headquartered in Sierra Leone, WAICA Re has subsidiaries across Africa including Ghana, Nigeria, Kenya and Zimbabwe, and has made a significant investment and funding commitment to Afin Bank.
We sat down with chief commercial officer of Afin Bank, Alan Davison, who was formerly distribution director at Together Personal Finance, to discuss the launch, the mortgage proposition, the focus on adviser distribution, and the financial needs of this specific borrower community.
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Why did you launch Afin Bank?
The inspiration for Afin Bank came from the real experiences of people living in the UK, especially those from West Africa, who are potentially struggling to build banking relationships in this country, particularly when trying to get a mortgage.
We feel this is an underserved group; people who are struggling to get a mortgage because of their nationality or visa status, or lack of credit history within the UK. Very few mainstream banks offer products designed specifically for foreign nationals, so borrowers from those communities are usually considered by mainstream lenders simply based on the lender’s own credit appetite, rather than being offered products that suit a borrower’s needs and circumstances.
As Afin Bank will be a specialist in the market, our credit underwriting will be tuned to our customers’ circumstances, ensuring common sense, speedy decisions and certainty for the borrower.
What customers are you expecting to help?
Afin Bank was created with the needs of the African diaspora in mind. These are thriving communities and include people who work in our health sector and major corporate firms. They are also entrepreneurs, running businesses and creating wealth and opportunities in the UK, contributing to society and the economy. There are more than 1.5 million African nationals in the UK.
We’ll also serve Africans based overseas who want to invest in the UK property market and, as we grow, we expect to appeal to borrowers from other underserved diaspora communities in the UK who might be struggling to get a mortgage from our traditional high-street lenders. There are around eight million foreign nationals in the UK. Plus, as a specialist lender, we want to support other specialist borrowers like high-net-worth individuals, professionals and the self-employed.
And, as you would expect for a bank, we’ll also be offering a range of Financial Services Compensation Scheme (FSCS) protected savings accounts.
Even with those numbers do you think it’s a big enough target market to aim at?
We do. Data from Twenty7Tec has shown a 54% increase in mortgage searches for non-UK resident criteria in Q4 2023 versus Q3 2023, which demonstrates growing demand.
We’ve also spent a lot of time talking to diaspora communities, potential customers, existing borrowers and advisers active in this market to understand the borrower’s needs and challenges. That is why, in addition to working with mortgage advisers, Afin Bank is also building partnerships with groups and organisations in African diaspora communities, including cultural networks and associations.
And while there have been a few specialist mortgage products available to this borrower demographic, there’s been nothing, for example, designed specifically for the issues African nationals face, such as nationality or visa status, or a potential lack of credit history in the UK. Neither has there been anything specifically marketed to the diaspora communities.
We also want to help underserved customers establish a credit footprint that will not only help them get the home they want, but also access other financial services in the UK. We want Afin Bank to be the go-to bank for Africans working and living in this country, or Africans based overseas looking to invest in the UK property market.
What mortgages can advisers expect Afin Bank to be launching, what is your timescale and do you have any initial lending targets?
We’ll reveal details of the product range when we launch our full proposition which, subject to regulatory approval, we anticipate will be next year.
However, there will certainly be a remortgage product which may well be a good option for those existing borrowers who have seen their circumstances change – perhaps because of a visa situation – and we’ll have first-time buyer products which again will be designed for borrowers who might usually struggle to get a quality deal because of their nationality or visa status, or lack of credit history within the UK. And, as mentioned, we’ll be active in the buy-to-let space, for borrowers either based in the UK or overseas, looking to invest in our property market.
Clearly, we’ve not launched as yet but we have ambitions to lend £1bn over the next five years and adviser distribution is going to play a hugely important role in terms of what we want to achieve and the customer base we want to target. Afin Bank’s CEO is Jason Oakley, who previously co-founded SME lender Recognise Bank, we’ve got a very strong management team and are in the process of putting a highly-experienced adviser-focused sales team in place, of which we hope to announce further news very soon.
We’re hugely excited for what comes next and we’re working hard to create a team and product proposition which will be exciting for advisers, and which will create opportunities for a wide range of borrowers and a community who we believe will benefit significantly from mortgages specifically designed for them.
