Koyo Loans has raised $4.9 million to launch an online lending platform that utilises Open Banking. Koyo’s aim is to offer competitively priced credit to people who are new to credit or have recently arrived in the UK. Let’s take a look at how Koyo is making credit applications easier for everyone.
Introducing Koyo Loans
Koyo has launched the UK’s first Open Banking powered consumer online lending platform. Founded by CEO Thomas Olszewski, Koyo will help the 6-8 million people in the UK who have thin or no credit and represents a multi-billion pound opportunity. Koyo closed a funding round led by Forward Partners, raising $4.9 million in debt and equity funding.
How do people with no credit history borrow money?
The number one cause of a low (or no) credit score in the UK is a lack of historical credit data. This leads to expensive borrowing and very few opportunities for people to borrow money. In the United Kingdom, between 6-8 million people lack sufficient credit data to be considered for traditional modes of borrowing. As a result, those looking to borrow money are typically offered high fees that can lead to a range of financial problems. Koyo is hoping to level the playing field.
To apply for a loan from Koyo, lenders must complete an Open Banking process as part of their application. This allows Koyo to offer competitively priced credit and does away with the need for guarantors. Central to Koyo’s ethos is affordable loans that are available to everyone, regardless of credit history.
A very personal vision
The founder of Koyo Loans, Thomas Olszewski, was inspired to launch the company as a result of his personal experience of trying to access credit in the UK for the first time. When he moved from the USA to the UK, his credit history didn’t follow him. He realised that it was nigh on impossible to apply for a credit card or any type of loan when he arrived in the UK. Not alone, Thomas understood that millions of people must be experiencing the same issue, but he couldn’t find a solution.
As a result, he was inspired to launch Koyo to help people who have traditionally been taken advantage of as far as credit applications and offers are concerned. Utilising the latest innovations in modern banking – particularly Open Banking – Koyo is attempting to level the playing field and provide affordable credit options to lenders who might otherwise be priced out of loans.
Since launching in 2019, Koyo has been able to offer unsecured personal loans to people with a broad range of financial backgrounds. Instead of using a borrower’s credit score as the sole metric, Koyo utilises Open Banking to get a picture of their current financial circumstances. Ultimately, this allows Koyo to make more informed decisions about a person’s creditworthiness, enabling more people to access credit as a result.
Another great thing about personal loans is that they’re easy to apply for and can be used for a variety of reasons. For instance, Koyo approves borrowers who are looking to pay for wedding fees, home improvement projects, or car loans, among other things. Overall, Koyo is a startup that is making credit more accessible to the masses, helping lots of people get settled in the UK.