Dutch financial services giant Aegon bucks Brexit by committing to lend £160m via Funding Circle as the start of a four year planned programme.
The UK’s leading marketplace lender for small businesses has signed a landmark deal with Aegon, one of the world’s largest providers of life insurance, pensions and asset management. Aegon will fund £160m of loans in the first 12 months of the agreement, with the aim of extending the deal steadily across a four year programme.
Aegon managed €815bn of its own and its customers investments as of June 2017, and has 26 million customers worldwide. It joins an diverse array of investors on the Funding Circle platform, which includes 65,000 individuals, local councils, the British Business Bank and the European Investment Bank.
In the aftermath of Brexit, Funding Circle was forced to give up on a planned multi-billion pound funding programme with the European Investment Bank, which had committed to funding £100m of loans prior to the vote. Funding Circle had called for the UK government owned British Business Bank to step up in the place of its European partner, but now it would seem that Aegon has taken up the mantle.
The first year of the investment programme is expected to positively impact around 2,600 small businesses, creating an estimated 6,400 jobs – and UK government has already voiced its full-throated support for the initiative.
“Small businesses are the lifeblood of our economy and it’s fantastic news that Aegon are investing through Funding Circle to help them thrive and grow,” said the Economic Secretary to the Treasury, Stephen Barclay. “This partnership with one of the UK’s largest FinTech firms is further proof that the UK remains the global leader in FinTech. Aegon’s venture also shows that there is significant appetite for inward investment into the UK and we hope to see more deals of this scale in the future.”
Mike de Boer, CFO at Aegon Bank NV, said that the partnership with Funding Circle represents another important step in Aegon’s strategy “to cooperate with fintech partners in the direct lending landscape”. He added that savings inflows to Aegon’s banking operation Fintech Knab would be used to invest in Funding Circle’s loans.
Funding Circle CEO and co-founder Samir Desai (pictured) also weighed in: “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. We hope our joint programme with Aegon will develop to deliver increased lending to UK small businesses over the coming years.”