Peer-to-peer lending platform Money&Co has applied for a UK banking licence and plans to raise £50m to become a digital merchant bank.
However, the Money&Co P2P lending platform will continue to operate, and it will continue to offer its Innovative Finance ISA (IFISA) products.
Nicola Horlick (pictured), chief executive of Money&Co, told Peer2Peer Finance News that if the banking licence is approved, the platform will also be able to offer cash ISAs and stocks and shares ISAs.
Horlick added that she has been mulling a move into the banking space for several years, and came close to striking a deal with a family office in 2020.
“We were thinking of applying a couple of years ago but then we agreed to work with a family office that was looking to buy a small UK bank,” she said.
“The deal didn’t go through and so we have now decided to apply.
“We are very happy with our specialist lending verticals (music lending and litigation funding) and have two more that we want to add. We feel that being able to take deposits will allow us to grow very significantly.”
It is believed that Money&Co will diversify into agricultural loans, and may also start to offer a crypto-related product.
Horlick said that she expects the banking licence to take between 14 and 24 months to process, and estimates that the company will have to raise around £50m in order to prove to the Prudential Regulation Authority that it has sufficient capital to become a bank.
“This is not a decision that we have taken lightly as it is an expensive process and will take us it a very onerous regulatory regime but we believe that it is the right thing for the business,” Horlick added.
In December, Horlick told Peer2Peer Finance News that she expects Money&Co to become profitable in the year ending 31 March 2022. She also hinted that this would be a “big year” for the company, with a substantial expansion of its lending book.
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