New Form of Bank Loans through the Financial Technology
Kabbage is licensing its digital lending technology to one of Canada’s largest banks, which plans to offer an online application process to small businesses. Scotiabank will establish the underwriting criteria for the loans which will go to small businesses in Canada and Mexico.
Scotiabank will keep the majority of the loans on its own balance sheet while Kabbage has the option to buy a minority of them, according to Kabbage Executive Chief Rob Frohwein. The loans may be granted up to $ 100,000 and will be offered more than six or 12 months and have interest rates as low as 1% per month. Customers can pay back prematurely without incurring additional charges.
The Scotiabank deal is similar to Kabbage’s recently announced partnerships with ING and Santander, according to Frohwein. In all three instances Kabbage is licensing technology to multinational banks that want to digitize the small-business lending process. The bank said that Kabbage’s technology will allow the bank to provide a fully automated application process, as well as fully automated underwriting, servicing and loans monitoring.
Kabbage, Inc. is a company in the Fintech line located in Georgia, Atlanta is the most promising companies in this area. Since its inception has been of great importance in financial technology. Kabbage, Inc. is a pioneer in a new and automated way to lend money to small businesses and consumers. The company has simplified the manual process to one that is 100% automated and online application. Businesses and consumers can use their own data to submit an application online and receive an immediate decision and access to funds in the act.
James O’Sullivan, the firm’s group head of Canadian banking, said in a press release, “Scotiabank is transforming the banking landscape by embracing technologies that drive new and improved experiences for its customers worldwide“.
Kabbage leverages data generated, such as income, accounting data, commercial transactions, shipping data, social media and other sources to understand the overall health of a company and calculate credit lines throughout the customer life cycle.
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