Koyo raises £3.8m for Open Banking loan platform

Koyo raises £3.8m for Open Banking loan platform

UK open banking-powered online lender, Koyo, is set to launch later in the year following a £3.8m ($4.9m) raise in debt and equity funding.

The platform provides an avenue for those without credit history or are new to the UK to access low interest loans and credit cards. Koyo will be the only lender that requires all customers to complete an open banking application in order to provide competitive prices for credit without the need for guarantors.

A lack of historical credit data is the leading cause of low credit scores across the UK, where there are between six and eight million people currently lacking the necessary credit history information to be considered for traditional borrowing options.

Data sourced through open banking will allow Koyo to access current information about a potential borrower’s payment history, meaning that attractive borrowing opportunities are extended to a market which has been severely underserved or targeted by payday lenders.

Thomas Olszewski, Koyo founder, says: “Koyo was built to give people who have historically been taken advantage of, an opportunity to access credit at a competitive rate and build credit history…When I moved to the UK from the USA my credit history did not come with me.

"This made getting a credit card or loan difficult, if not impossible. I realised this is a problem that affected millions of people who are new to the country, but also people who have not built a credit history in the UK more generally.”

The funding round was led by Forward Partners, with Seedcamp, Christian Faes (LendInvest) and Charlie Delingpole (ComplyAdvantage) also involved.

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