BANCO BNI Europa, the Portuguese challenger bank, has started investing in US consumer loans through a funding deal with Upgrade, a US consumer credit platform.
The partnership aims to expand access to affordable credit for consumers in the US.
As part of the agreement, Banco BNI Europa committed an initial sum of US$30m (£23m). The bank has already invested in US consumer loans originated on platforms like Lending Club and Prosper through a third-party fund.
The announcement follows a raft of deals by Banco BNI Europa in the alternative finance space. They include investments in peer-to-peer lenders Funding Circle in Germany and Raize in Portugal, as well as UK P2P invoice finance platform MarketInvoice.
Pedro Pinto Coelho, executive chairman of Banco BNI Europa, said Upgrade is different from other consumer loan offerings because of its focus on borrower free cashflow as a key metric.
“We’re also supportive of Upgrade’s credit education initiative, which provides much needed advice and assistance to US borrowers as to how they can improve their credit health,” he added.
The loan purchase programme was implemented by institutional investor Fintex Capital, which issued a bond to BNI Europa backed by the portfolio. Fintex also acts as asset manager for the underlying loans.