UK-based fintech start-up Koyo has raked in $4.9m in a funding round led by Forward Partners to further strengthen its business model that focuses on offering loans to borrowers with low creditworthiness.

The round was also backed by Seedcamp, ComplyAdvantage founder and CEO Charlie Delingpole as well as LendInvest founder and CEO Christian Faes.

The infusion included debt and equity funding.

Established by Thomas Olszewski last year, the London-based fintech firm is scheduled to roll out its business later this year.

It will leverage open banking data to provide loans to those new to credit, or underbanked borrowers in the UK without guarantors or hidden charges.

Koyo will take a credit decision based on the transactions in customers’ current account once it is linked to Koyo’s platform using open banking.

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Olszewski said: “When I moved to the UK from the USA my credit history did not come with me. 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 (former CRO of RateSetter) and Guy Evans (former CTO of LendInvest).”