Dutch financial services group Aegon is set to invest £160m in small businesses through loans originated by British peer-to-peer (P2P) lending platform Funding Circle.
Funding Circle, which allows investors to lend directly to small businesses, has hitherto been used to fund over £2.5bn of loans to 26,000 businesses in the UK.
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The P2P lender said Aegon’s investment will be used to offer loans to around 2,600 UK businesses.
Aegon will fund £160m of loans in the first year, with plans to eventually extend the partnership for another three years.
Aegon Bank CFO Mike de Boer said: “The strategic partnership we have signed with Funding Circle is another important step in the strategy of Aegon to cooperate with Fintech partners in the direct lending landscape. This partnership gives Aegon access to attractive small business loans over the next four years, which helps to further diversify our investment portfolio.”
Funding Circle CEO and co-founder Samir Desai added: “This partnership is validation of the attractive risk-adjusted returns that are being generated to investors by lending through Funding Circle. Now investors of all shapes and sizes can benefit from the stability of the asset class whilst also providing much-needed job creation and economic growth.”
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By GlobalData
