The Royal Bank of Scotland has made its first step into the online market lending space with the launch of its Esme service, a digital platform that provides loans up to £150,000 ($186,000; €177,000) to small and medium-sized enterprises.
The unit will operate under the bank’s NatWest brand and will provide loans with a maximum term limit of five years, according to the Financial Times.
RBS chief executive Alison Rose told the Financial Times that “the last thing SMEs want is to spend hours filling in paper work, so this allows them to quickly compete a digital process”.
A representative from RBS did not respond to a request for comment before publication.
UK marketplace lending has continued to increase in size as more firms enter the market. According to research by the Peer-to-Peer Finance Association, a UK-based trade body, more than £800 million in new loans were made in the UK in the last quarter, raising the total amount for the year to close to £3 billion.
Robert Pettigrew, director of the P2PFA, said that the “impressive” loan volume was evidence of “further consolidating the sector’s position in financial services”.
He added that the industry is set to benefit from the uncertainty following Brexit, noting that the sector is developing rapidly as investors focus their attention on which areas of the market are set to benefit. “The position of P2P lending as a major part of the solution in a post-Brexit world is unquestionable,” he said.
Last month, Bank of England governor Mark Carney said that within the P2P sector there is the potential for disrupting how traditional banking is done. “Fintech’s true promise springs from its potential to unbundle banking into its core functions of settling payments, performing maturity transformation, sharing risk and allocating capital,” he said.