Michael Lee-Chin Jr has ventured into an online business that offers loans to the unbanked and others facing challenges in accessing credit.
Lee-Chin Jr, the son of investor and bank owner Michael Lee-Chin, has joined forces with banking and finance veteran Andrew Patterson and technology and communications professional Adrian Dunkley in a start-up called Seed Investments.
Since May 2022, the trio have been testing the technology that will support a total digital microfinance operation and dealing with regulators.
Lee-Chin Jr, the oldest of three brothers, says he is not involved in his father’s multibillion financial empire, which includes NCB Financial Group, Jamaica’s top banking conglomerate.
In an interview with the Financial Gleaner he acknowledged that his company ventures into a market dominated by NCB, that is the issuing of loans, but said he subscribes to his grandmother’s dictum that “there’s room under the sun for everybody to shine”.
He also noted that he has his father’s support in charting his own path.
“I’ve never had any association with the NCB Group. I’ve always shied away from the family business,” Lee-Chin Jr said.
As to the evolution of Seed Investments, he said that in January, he started researching digital banking company Nubank, run by billionaire David Valez, and eventually came to the realisation that although there were many financial institutions, there were none in the online space that had the unbanked as their central focus.
“I thought to myself that it is really something where I can be helping people, especially those outside of the banking system,” he said.
The immediate thought was to take the business to Africa, where there is a larger population and, therefore, greater growth possibilities, but Lee-Chin Jr opted to come to Jamaica first, where he has connections and access to resources. He then put out a vague LinkedIn ad simply saying “Jamaican banker needed”, to which there were many replies, including from tellers.
Lee-Chin Jr said that after a series of interviews, Andrew Patterson turned out to be a good fit, coming as he did with his experience in the financial markets and running his own microfinance operation. The two then partnered with data scientist and head of Starapple analytics firm Adrian Dunkley. Lee-Chin Jr owns 51 per cent of Seed Investments while his two partners hold 24.5 per cent each.
Lee-Chin Jr says he has put US$3 million into the start-up. The money is proceeds from the sale of property he owned in Jamaica and savings.
“I put the proceeds into launching this company with the idea that I’m going to build this company and make it profitable, enticing potential investors to grow more. First step is Jamaica, and the next step is the Caribbean,” he said.
Quizzed about the meaning behind the name ‘Seed’, Lee-Chin Jr said that after exploring a number of names, he got divine inspiration during morning prayers. “I really see this company as a ‘kingdom’ company; one that will be here for a long time. Profits will be good when they come, but they will be a by-product of us doing good. That is why we’re here,” he said.
Seed Investments will be targeting persons who do not have ready access to financing or who otherwise would have difficulty securing the necessary backing for their projects.
“Our customer is everybody, but I really have a soft spot for the underdog, the unbanked, for the underbanked,” Lee-Chin Jr said, adding that the essential difference with Seed is that the company will not look at credit history to determine loan approvals.
“We don’t look at your past. We have, through our special scripts from our data scientist, where, based on the questions we ask you, we will have a better picture of you than if you were coming into a bank,” he added.
The company will rely on data analytics to assess risk for prospective customers. Loan processing will be done via mobile phone or Wi-Fi-enabled devices. The process will be entirely digital, from application to approval to disbursement of funds.
Seed Investments became operational on Monday, October 24, but is not yet able to grant loans, saying it is still awaiting Bank of Jamaica approval.
The central bank, which recently took over the oversight of microlending institutions, requires all new and existing players to acquire a licence to operate.
Lee-Chin Jr says for now, his company will concentrate on customer engagement and marketing until approval is granted to issue loans.