Current customers in the U.K. can apply for loans as the online bank advances its efforts toward profitability.
The bank is offering loans from £200 to £15,000, following a successful test pilot last year. Monzo, valued at £2 billion, wants to take on higher-priced traditional lenders, the report said.
Monzo is “more nuanced than we were probably two or three years ago,” CEO Tom Blomfield told the news outlet. He added that jumping into more traditional lending “can get us a good way to profitability, if not even all the way.”
The eBank joins smaller rival Starling Bank on the lending front, becoming the second online bank in the U.K. to offer personal loans. Revolut has yet to introduce the service and German group N26 isn’t yet offering loans in the U.K.
App-based Monzo has more than 2 million users but over £85 million in losses since its 2015 launch. The company is hopeful that its consumer lending division will lead to profits, according to the report.
In June, Monzo started its move into the U.S. banking market through a partnership with Ohio-based Sutton Bank. It has already signed consumers up for its cards in cities including Los Angeles, New York and San Francisco and there is currently a waiting list.
In the U.S. there will be no minimum balance requirements and no monthly fees, but the company will not pay interest on deposits.
The U.S. is a different market with its own challenges, according to some observers. As noted in a report by Richard Lumb, group chief executive for financial services at Accenture, “For U.K. FinTechs looking to fly the nest, one major contrast will be the complexity of federal- and state-level laws, compared to the U.K.’s FinTech-friendly regulatory environment.”