DUTCH insurer Aegon has enter a four-year strategic partnership with Funding Circle to fund loans through the peer-to-peer platform.
The financial services group will back £160m of loans in the first 12 months of the deal, which will help approximately 2,600 UK businesses, Funding Circle said on Thursday.
Aegon will use money from Knab, a Dutch fintech banking firm it has a stake in, to fund the loans.
“Funding Circle allows small businesses to access much needed funding,” Mike de Boer, chief financial officer of Aegon Bank NV, said.
“The strategic partnership we have signed with Funding Circle is another important step in the strategy of Aegon to cooperate with fintech partners in the direct lending landscape.
“This partnership gives Aegon access to attractive small business loans over the next four years, which helps to further diversify our investment portfolio. High savings inflow of our successful fintech Knab banking operation is used to invest in the Funding Circle loans.
“This agreement follows an extensive due diligence on the loan origination, compliance and risk-returns of the Funding Circle loans. Funding Circle has shown that their robust process, technology and financial innovation capabilities have a positive impact on the UK economy and small businesses in particular. Funding Circle provides quick and transparent funding to small businesses.”
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Aegon joins a wide range of investors backing loans on Funding Circle, including 65,000 individuals, local councils, the government-owned British Business Bank, the European Investment Bank and other financial institutions.
“This partnership is validation of the attractive risk-adjusted returns that are being generated to investors by lending through Funding Circle,” Samir Desai (pictured), chief executive of Funding Circle, said.
“Now investors of all shapes and sizes can benefit from the stability of the asset class whilst also providing much-needed job creation and economic growth. We hope our joint programme with Aegon will develop to deliver increased lending to UK small businesses over the coming years.”
The platform, which gained authorisation from the Financial Conduct Authority (FCA) in May, has provided 32,000 loans to small businesses, backed by 69,000 investors.