Rural communities are often overlooked by financial services, but there are pioneers who embark on transformative journeys to bridge the divide. As we celebrate a decade of FOLK2FOLK empowering rural communities and businesses, we sit down with our own pioneer, FOLK2FOLK Co-Founder Louis Mathers, to explore the inspiration behind FOLK2FOLK’s journey.
In this candid interview, Louis reflects on the origins and aspirations that have shaped our mission and continue to define FOLK2FOLK.
- What inspired you to start FOLK2FOLK?
There was definitely an anti-establishment element to why FOLK2FOLK was started. My co-founder and I had been treated terribly by a large high street bank who wanted us to expand the banking agency we ran, only for them to arbitrarily decide later to terminate all agencies across the country. We suddenly had banking premises but no agency. How could we still provide our long-standing customers with this much-needed local service and retain our loyal staff? We closed the agency and decided to open a new business – offering local people the chance to earn interest and support local businesses. We wanted to plug this gap while showing we could provide finance, and look after investments locally, much better than our large international counterparts. FOLK2FOLK was born.
- Can you describe the circumstances that led to the inception of FOLK2FOLK?
We started building FOLK2FOLK during 2012 ready for launch in early 2013. At that time the country was still feeling the effects of the financial crisis. I had been a busy property lawyer in Bristol and since returning to Cornwall the transaction levels were significantly below what I had been used to. I simply did not have enough to do! So when events unfurled and we saw the opportunity to start a new business, I threw myself into building a lending business that could allow investors a fair return on their investment, while also supporting small local businesses. I had acted for a wide range of lenders as a property solicitor, so it was incredible to have the opportunity to use this experience to build and launch a secured property lender of our own.
- Over the last 10 years, what have been the biggest challenges FOLK2FOLK has faced?
We have certainly had our fair share of challenges, but I look back and now realise that these challenges are actually opportunities and gifts – to learn and evolve.
It initially took us a while to establish a senior management team that understood the ethos of the business and share our values and it certainly now makes us extremely appreciative of the team we have.
Finding the right technology solutions has also been a challenge. FOLK2FOLK is not the type of business you can entirely automate; our customers highly value human interactions and both the underwriting and the security due diligence needs human expertise. Therefore, getting the right balance between tech and human continues to be a challenge as we grow.
- How has FOLK2FOLK evolved over the decade in response to industry changes?
While of course we have had to adjust to ensure we stay compliant with legal and regulatory changes; the core elements have remained consistent with how we started. In fact, it has been interesting to see many of our competitors adjust their offerings over the years, to bring them in line with ourselves. 10 years on we still provide maximum five-year, interest-only loans secured on property at a maximum LTV of 60%. Simple!
- What values have remained core to FOLK2FOLK over the years?
Fairness has consistently been a key value. We have always operated on the basis of ‘fair exchange’ between our borrowers and investors. Kindness and respect are also values we hold very close, ensuring we treat both borrowers and investors with regard. It can be difficult to always get the balance right, but I do believe it sets us apart from other financial services organisations who predominantly only deal with one side of the transaction at any one time.
- How has the company impacted local communities over the years?
The impact the business has had on local communities is without doubt the best part of FOLK2FOLK. Whilst we often find it hard to formally quantify the impact, it’s not hard to see how people’s lives have changed when speaking with our customers, both borrower and investor. We get so much wonderful feedback: from borrowers saying they could not have achieved their dreams without our support, to investors thanking us for growing their wealth and providing monthly income.
I often liken FOLK2FOLK to the story of George Bailey in the 1946 film ‘It’s a Wonderful Life’ – where his guardian angel shows him how different his local community would be without the Building & Loans business he runs. I watch it every Christmas and I’m proud to say it makes me misty eyed! We can see, first-hand, that FOLK2FOLK has had such an immense and positive impact on so many people’s lives.
- Looking ahead, where do you see FOLK2FOLK in the next 10 years?
FOLK2FOLK has certainly moved into a new phase of growth. It is now a mature business with a wide range of interested parties.
FOLK2FOLK is definitely more of the tortoise than the hare when it comes to growth. Keeping faithful and being patient in its journey. This doesn’t mean there isn’t much going on though! Change has been a constant over the last 10 years and it will continue to be that way over the next 10 years. Steady, sensible change as we continue on our growth journey ever onwards.
- On a personal note, how has FOLK2FOLK shaped you as an individual?
FOLK2FOLK has been a central part of my life for the last 10 years. I have learnt so much in that time and in particular I have learnt that as a Founder sometimes you need to fight for what you believe in, and other times you need to merely conserve your energy for what really matters. I have also learnt that staying true and keeping to core values and purpose is much more important to me than the mere pursuit of profitability.
- What message would you like to share with our customers, employees and other stakeholders on this milestone?
I am so grateful to everyone that believed in us to take on a loan, invest their money with or through us, or accepted a job with us. I really understand what a huge commitment this was and a real statement of trust. I hope we have repaid that trust (at least once over!). In our early years it would have been somewhat of a ‘leap of faith’ to engage with a relatively untested, innovative start-up, doing something quite unique. Friends, family, early adopters, customers and colleagues (past and current) – thank you, without your belief in us we would not have reached such a key milestone, and in such good health. I look forward to what the next 10 years may bring.