PORTUGUESE online bank Banco BNI Europa has agreed a funding deal with Funding Circle in Germany, with a long-term goal to extend the partnership to other countries where the peer-to-peer lender operates.
Banco BNI Europa said on Tuesday that it will provide €50m (£44m) to finance small business loans originated through Funding Circle in Germany over the coming months – its largest commitment to the country’s small business sector to date.
The investment will provide access to finance for around 600 companies and thereby help to create around 1,500 new jobs, the bank said.
Deteriorating funding conditions for smaller businesses in Germany have become a key obstacle to growth that Funding Circle has stepped in to address, Banco BNI Europa said.
According to a study by Germany’s state-backed development bank KfW, cited by Banco BNI Europa, more than one in four companies with an annual turnover of up to €1m reported deteriorating access to finance in the country.
Pedro Pinto Coelho, executive chairman of Banco BNI Europa, called German small- and medium-sized enterprises (SMEs) “a highly attractive asset class” and heralded Funding Circle’s standards of risk assessment and credit analysis.
“A perfect match: both Banco BNI Europa and Funding Circle have proven that they are able to stimulate local economies through technological and financial innovation,” he added.
Thorsten Seeger, managing director – Germany of Funding Circle, called the partnership “an important signal for German SMEs”.
“The investment of a renowned institutional partner such as Banco BNI Europa is a stamp of approval of our online lending platform model and our mission to facilitate access to finance for small businesses and reduce their dependency on an outdated banking system,” he said.
“Besides delivering attractive returns to investors, we also measure our success through our immediate contribution to stimulating the local economy.”
Banco BNI Europa said its long-term plan is to extend the partnership to other countries where Funding Circle is active. London-headquartered Funding Circle has operations in the UK, US, Germany and the Netherlands.
In December, Funding Circle hit the €100m loans milestone in Germany just two years after launch in the country.
Banco BNI Europa has unveiled a number of funding deals with P2P platforms over the past 12 months. In May, it announced agreements with UK business finance provider MarketInvoice and Portugal’s largest P2P lender Raize.