PayPal, an international digital wallet based e-commerce business, has ventured into the alternative lending market after advancing over $200m of loans to consumers and small businesses.
Set to spin off from the parent ebay next year, PayPal will give consumers and merchants an additional reason to use PayPal through its new offering originally popularized by start-ups like Lending Club and OnDeck, reported Financial Times.
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PayPal accrued over 35,000 loans at a maximum of $60,000 from its merchant lending program since September. It will spend $1bn to buy an outstanding loan portfolio from GE Capital.
Steve Allocca, head of credit at Paypal, said: "It’s just scratching the surface of what we see as the opportunity there. This has never been a space that’s been particularly well served by banks or traditional lenders."
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