Ophelia: a New, Simpler Way to Manage your Debt

Ophelia: a New, Simpler Way to Manage your Debt

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Industrial
  • Social & Cultural

Keywords

  • Lab Innovation

Ophelia: a New, Simpler Way to Manage your Debt

Published on:
January 17, 2019
Event date:
Thursday, 17 January, 2019 - 14:30

Interview with Patrick Roy, founder of Ophelia fintech, a startup in residence at the Fonds de solidarité FTQ/QI Innovation Lab, helping people with excessive debt.

Tell us about Ophelia. What is it that you do?

Ophelia offers ordinary people struggling with debt a solution to consolidate their debts and accumulate savings. We help people who can no longer afford the minimum payment on their many cards and lines of credit pay off their debt and save money every month.

We do so in three easy steps. First, we consolidate all eligible loans, such as credit cards, personal loans, lines of credit, etc., into one place. Second, Ophelia lets clients pay at their own pace, in accordance with their current financial situation. Third, Ophelia automatically places a portion of its clients’ payments in a savings account it creates for them. When the loan is repaid in full, the savings are theirs.

They no longer have to live with the stigma of debt, which looms over many a Quebec household. In a survey we conducted, one in four respondents admitted to having lied or hidden the amount of their debts during their lifetime. Too many people have also told us that they have, at times, cried in distress faced with the amount of their debts. Ophelia is not simply a debt consolidation tool. It brings compassion to managing debt.

   

Where did you get the idea to start this business?

While I was studying psychology, my mother called me asking for help to pay off three full $10,000 credit cards that she could no longer pay. We went through so-called traditional means, like debt consolidation services, but were refused because the debt was too excessive. She cut her cable, bought less groceries, and so forth, but she couldn't keep up because she had to deal with unforeseen events like sick leave, reduced work hours, and others. Her only options were either to borrow money at an unconscionable rate or declare bankruptcy. Which she did. The consequences of bankruptcy are heavy. Bankruptcy appears on a person's credit report for seven years, making it more difficult to obtain a loan in the future.

At a loss as to why no safety net existed to help my mother before it was too late, I decided to pursue a Bachelor's degree in Accounting. I came out with the firm intention to develop a humane solution to a situation that affects too many Quebec households: excessive debt.  

After a few tests, I founded Ophelia with my partners. Our solution offers over-indebted people the opportunity to consolidate their debts at a reasonable rate and helps them adopt healthy financial habits.

What impact does your startup have on the people you work with?

We help people get out of debt while saving, that's something in itself. But, the greatest impact we see in the people we help is their relief. The relief of no longer having no idea how to get out of their snowballing debt. Those who come to us leave with solutions and an offer suited to what they can afford. Often, just that little boost is all they need to start managing their personal finances soundly rather than remaining in denial.

We do a lot to understand what people are going thru when they are facing debts and how they deal with them. For example, we've made a short survey which you can fill up here!

That being said, you aren’t the only debt consolidation service on the market. What makes you innovators compared to your competition?

Our biggest difference compared to other debt consolidation services is the ability we have to offer a reduced interest rate while helping people improve their financial health by accumulating savings. We also share practical tips to reduce certain expenses. Part of each payment a client makes on an Ophelia loan is placed in a secure savings account. This collateral enables us to offer a much better interest rate. In addition, the terms of Ophelia loans account for our clients' current financial situations; thus, we can offer a reduced interest rate with maximized savings. Finally, we provide personalized support to help our clients develop habits to improve their financial health. For example, bringing a bag of bagels and cream cheese to work instead of stopping at a café every morning saves a lot of money.

What is your most recent success?

We will soon receive substantial financing to grant loans to about 50 people by the month of May. To boot, we have just obtained our money lender's license. These two major steps in our development validate our approach and add to our credibility.

What advantages do you get from being part of the FTQ/QI Innovation Lab?

By working alongside a diversified mix of startups in the FTQ/QI Innovation Lab, we get to open our horizons and share our practices. For example, there’s a virtual art gallery startup in residence at the Lab called Gallea: it has an ingenious business model. We are currently looking at how to draw inspiration from their practices.

How do you see your future?

The debt ratio of Canadians, standing at close to 175% per household, is a major problem. We believe that Ophelia will prove to be a preventive solution for consumers, enabling them to avoid finding themselves overcome with debt. And, from our recent dealings with Canadian banks, we believe that we’ll be able to offer our solution to their customers in the near future. Obviously, nothing’s set in stone. But, I’m pleased to see that banks want to be part of the solution and help improve their customers’ financial health.

In the next ten to fifteen years, we want to have built a strong enough reputation for people with debt problems to know that they can count on Ophelia for help before considering bankruptcy. To reach our goal, we are forging partnerships with banks to build mechanisms to reach people who need help and refer them to Ophelia before they become one of the 28,000 Canadians who declare bankruptcy each year.

You are a prisoner of your debt and wants to know how much Ophelia could help you save? Follow opheliafintech.com in the coming days to apply online!