Investec provides U.K. fintech with $67m for online loans
December 13, 20171.2K views0 comments
In a sign that a sweeping new European Union banking law may be spurring banks and fintech startups to tie-up, Investec Plc has formed a pilot program with MarketInvoice Ltd., a British online lender to businesses.
According to Bloomberg, London-based MarketInvoice, which arranges loans for small companies secured by accounts receivable, will handle the underwriting for Investec customers in the partnership, according to the bank’s website. Investec will provide 50 million pounds ($67 million) in the first year to fund the loans, Anil Stocker, the startup’s co-founder and chief executive officer, said in an interview.
The deal is just the latest in a series of tie-ups between traditional financial services companies and U.K. online lenders in the last year. In August, Dutch insurer Aegon NV placed 160 million pounds with Funding Circle Ltd. for loans to small companies. Three months later, LendInvest Ltd. raised funds from Citigroup Inc. to offer buy-to-let mortgages on its website.
More deals may be coming in 2018 thanks to the EU’s new open banking law, Stocker said, even as the U.K’s departure from the EU appears to slow down the British economy and stoke inflation. The legislation, set to take effect in January, will direct lenders to share their clients’ financial data with rivals to bolster consumer choice in financial services.
“There are a lot of banks looking for ways to collaborate with fintechs,” Stocker said. “We think that open banking could be a bigger shift in the market than Brexit.”
Report courtesy Bloomberg