Dutch Bank ING dives back into alternative lending

BII P2PBI Intelligence

Dutch bank ING took a stake in WeLab, an alternative consumer lender in China and Hong Kong, as part of WeLab’s $160 million Series B funding round. WeLab, which launched in mid-2013, services 2.5 million customers and saw a ten-fold increase in loan disbursements in 2015, according to Finextra. ING is considering starting a partnership with WeLab in its own markets, according to CEO Ralph Hamers.

ING is advancing further into the alternative lending industry, which is growing rapidly across the world.

  • ING took similar steps with Kabbage, a small business alternative lender, in 2015.The bank joined a $135 million funding round for Kabbage, and soon after, announced a small business lending program in Spain leveraging Kabbage’s platform.
  • ING is committing to fintech to become more competitive. That’s because, according to the firm, the WeLab investment increases its pace of innovation. It also allows ING to offer a wider variety of services in-house, which could make it competitive with smaller startups that may offer increased convenience and more favorable interest rates to borrowers.
  • It’s likely we’ll see more such collaboration in the future. BI Intelligence predicted that 2016 will bring more partnerships between banks and smaller, digital-based finance startups, largely because of the technology these startups bring to banks and the capital and reach banks can offer back to them.

P2P lending has proved to be a winning formula in the US, Europe, and China. China is driving much of this growth, having represented the lion’s share of total global loan volume in 2015. The Chinese industry reached 982 billion yuan ($149 billion) in originated loans in 2015, according to Deal Street Asia. That number marks nearly a four-fold increase over the 2014 total of 252.8 billion yuan ($38.3 billion). For context, WeLab facilitated $1.4 billion in loans last year.

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