The open finance partnership platform mmob has added small- to medium-sized business (SMB) lender iwoca to its network of digital finance providers, Financial IT reported.
The partnership will allow “banks and other large financial institutions to easily embed small business loan provision into their digital ecosystems and ensure they can rapidly meet the rising demand for alternative lines of credit from [SMBs] eager to invest in their growth post-pandemic,” according to the report.
In addition, processing and sharing customer information between the two entities will reduce the time SMBs need to spend on paperwork, making loan applications less complex and the approval process faster, the report stated.
“As big banks reduce their risk appetite, we believe embedded finance is the future of [SMB] lending,” said iwoca Commercial Growth Director Colin Goldstein in the report.
He added the partnership ensures “mmob’s commercial partners can quickly respond to the increasing demand for credit from [SMBs] and enable us to further extend our reach into new sectors by embedding our solution within the financial apps and systems business owners use every day.”
The announcement comes on the heels of iwoca’s quarterly SMB index of U.K. brokers, which showed a rising demand for SMB loans, the report stated. More than a third of brokers had submitted more lending applications for unsecured finance in May compared to April.
And iwoca said its own data indicated 50% of applications that go through embedded finance partners receive speedier decisions and are 58% more likely to convert when compared to direct applications, according to the report.
Earlier this year, iwoca announced the integration of its iwocapay product with Xero’s payment platform to give SMBs a Pay Later option.
Read more: iwoca Integrates With Xero for SMB Pay Later Option
The integration lets iwocaPay to be accessible via Xero. SMB owners can add it to their Xero invoices to help reconcile them more easily, while their customers receive access to more attractive payment options.
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