The UK-based online lender Koyo raises £3.8 million for its funding services, and is now set for its launch later on this year. The funding services this money will be used for are debt and equity funding. Leading the round was Forward Partners, alongside Seedcamp, ComplyAdvantage’s Charlie Delingpole and LendInvest’s Christian Faes.
Founder of Koyo Thomas Olszewski has commented that “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” drawing from his own experiences when first moving to the UK, and how his credit history from the USA “did not come with [him]”
Olszewski further states that “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 provides financial support to those with a poor, or non-existent, credit history (i.e. those who have just moved to the UK) without needing a guarantor. The online lenders will require potential borrowers to complete an open banking application, which will enable them to find the best rates for each applicant.
One of the main causes of a poor credit score within the UK is a lack of credit history, with roughly six to eight million people throughout the UK lacking the credit history for more traditional means of borrowing. This has led to many without a credit history being rejected from these more traditional means of borrowing.
Koyo uses open banking to access details for these types of applicants, including their payment history, opening them up to more borrowing opportunities. With Koyo’s launch set to happen this year, many struggling with non-existent credit histories could now access more accommodating means of funding.