FORMER peer-to-peer lending professionals from the likes of RateSetter are among the team launching what it claims is the UK’s first Open Banking-powered digital consumer lender.
Koyo says that it will be the only lender that requires all customers to complete an Open Banking process as part of the application. It aims to improve financial inclusion, offering personal loans to people with a lack of historical credit data who would be rejected by traditional lenders.
By using Open Banking data rather than credit agencies to underwrite risk, Koyo will be able access more up-to-date information and potential borrowers. The firm says that the technology will enable it to offer far more competitive rates and cheaper borrowing, to a market currently underserved or treated unfairly by extremely expensive payday lenders.
Kevin Allen, currently chief risk officer at P2P lender The Money Platform and previously RateSetter’s chief risk officer, is Koyo’s head of credit risk.
Peter Kent, head of marketing at Koyo, was previously a marketing acquisition specialist at RateSetter and worked as an adviser and consultant to P2P consumer lenders Lending Works and The Money Platform.
Chief technology officer (CTO) Guy Evans was previously CTO at specialist online mortgage lender LendInvest.
Chief executive and founder Thomas Olszewski is from a venture capitalist rather than P2P background, having previously worked at Frontline Ventures in London and Cavalry Ventures in Berlin. He also worked as a hedge fund trader analyst at Verition Fund Management.
Koyo has already raised $4.9m (£3.8m) in debt and equity funding ahead of its launch later this year. Its funding round was led by venture capital firm Forward Partners with participation from European seed fund Seedcamp.
Co-investors include Christian Faes, founder & chief executive of LendInvest and Charlie Delingpole, founder and chief executive of compliance fintech ComplyAdvantage. Delingpole was previously chief executive and co-founder of invoice finance provider MarketInvoice.
“When I moved to the UK from the USA my credit history did not come with me,” said Olszewski.
Read more: P2PFN’s interview with Kevin Allen
“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. 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.
“The opportunity is further evidenced by a seasoned management team which includes Kevin Allen and Guy Evans.”
Olszewski added that Koyo has “global ambitions” and plans to explore other markets “where thin file customers are underserved”.