Unlock stock picks and a broker-level newsfeed that powers Wall Street.
SoFi seals up to $5 billion loan agreement as fintech lending gains ground

In This Article:

(Reuters) - SoFi said on Thursday it has finalized an agreement of up to $5 billion with funds managed by asset manager Blue Owl Capital to provide personal loans on its finance app, highlighting the increasing shift of consumers from traditional banks to fintech lenders.

WHY IT'S IMPORTANT

High interest rates, stricter bank lending standards and a growing preference for digital-first financial services have driven borrowers toward fintech platforms, which offer faster approvals, flexible credit options, and streamlined application processes.

At the same time, institutional investors are increasingly backing these loans, attracted by their potential for higher yields compared to other fixed-income assets.

CONTEXT

SoFi's two-year agreement with funds managed by Blue Owl Capital is its largest such deal to date and highlights rising demand for personal loans from both borrowers and debt investors.

Under the terms of the agreement, the fintech will act as an intermediary by referring pre-qualified borrowers to lending partners or originating loans on behalf of third parties, making borrowing more accessible.

It also advances SoFi's strategy to diversify its revenue streams through less capital-intensive, fee-based income sources.

In October, the company announced a $2 billion loan platform business agreement for personal loans with funds managed by affiliates of Fortress Investment Group.

BY THE NUMBERS

In 2024, SoFi's loan platform business originated $2.1 billion of loans, the fintech firm said.

For full-year 2024, the company's fee-based revenue surged 74% to $969.9 million, driven by strong performance across origination fees, loan platform business as well as interchange, brokerage and referrals.

GRAPHIC

(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)