Calgary company lets people split their rent payments
< p class="styled__StyledLegend-sc-v64krj-0 cfqhYM">Koray Oztekin, CEO and founder of Calgary-based Zenbase, which charges users a flat monthly fee to split their rent payment into installments.
Calgarian fintech company Zenbase allows tenants to split their monthly rent payment into two installments with a “rent now, pay later” formula.
According to the Founder and CEO of Zenbase, Koray Oztekin, the goal is to bring a balance between when people get their paychecks and when they have to pay their rent.
Our mission is to give people complete control over how they manage their household expenses, he says, adding that a growing market exists for this type of service as inflation spikes.
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According to Tal Schwartz, who writes the Canadian Fintech newsletter, there are different ways to rent now and pay later.
Early models were typically aimed at landlords and integrated into property management software, he says.
He explains that when a landlord requested payment from a tenant, the option to pay in instalments was offered.
More recently, Tal Schwartz explains that direct-to-tenant models have been introduced.
One was offered by Chroma Technologies, another Calgary company.
Users paid Chroma half of their rent on or before the first day of the month. The company would then pay the entire month's rent directly to the landlord, and tenants would pay the balance back to Chroma on the next payday, says CEO and co-founder Myles Shedden.
However, he explains, less than a year after launching his service, Chromas ended it because their loan losses were too high.
According to Koray Oztekin, Zenbase has extremely low default rates because it works directly with landlords and only accepts tenants who are in good standing with their rent payments.
He explains that their customers are usually people who have difficulty raising money, but who always manage to do so.
We're just giving them a break so they don't default on other bills, he says. The company offers this service at a cost of between $9.90 and $19.90 per month.
While rent now, pay later is still new, Tal Schwartz believes it will become very popular in the next few years.
Several fintech companies in Canada offer such a formula.
I'm very, very certain that several other well-known fintech brands will start offering this service, he says.
Zenbase announced earlier this year that it has raised $4.1 million through fundraising and plans to begin expanding into provinces other than the Prairies.
Scott Hannah, president and CEO of the Credit Counseling Society, does not recommend that people who find themselves in difficult financial circumstances turn to a such a service.
If it is a one-time rent arrears, Scott Hannah suggests asking your landlord for a delay or even a advance to his employer.
He also recommends that people watch their budget carefully and seek help from a credit counselor if necessary to avoid finding themselves to pay more than $100 a year for an entity to pay our rent and be reimbursed immediately.
With information from Paula Duhatschek