Citigroup Inc (NYSE:C) Inks An Agreement With LendingClub Corp (LC) To The Tune Of $150 Million
Citigroup Inc (NYSE:C) and LendingClub Corp (NYSE:LC) are joining hands to extend credit opportunities to underserved credit seekers. The companies are also working alongside Varadero Capital L.P. to facilitate the $150 million affordable community credit. Many banks are looking to communities to expand their lending operations, especially in reaching out to low income earners.
There is a trend across the U.S. where banks are looking for new ways to reach out to undeserved borrowers with low-cost loan services. Tapping into the platform of LendingClub will enable Citigroup Inc (NYSE:C) to quickly expand its affordable credit offerings to people with low or moderate incomes.
Community lending platforms
According to LendingClub’s CEO, Renaud Laplanche, banks are interested in enhancing community lending efforts and partnerships with platforms such as the one that LendingClub provides, which is crucial in attaining that goal.
For Citigroup Inc (NYSE:C), being part of the community lending initiative perfectly matches the bank’s desire to increase borrowing alternatives for Americans. Citigroup’s John Heppolette, said the partnership will allow them to directly respond to the growing need for affordable lending and a way for more Americans, especially underserved borrowers, to get access to responsible credit.
At Citigroup Inc (NYSE:C) is a unit known as Citi Community Capital, whose focus is on availing loans for community development and related investments. The community lending unit receives Community Reinvestment Act (CRA) consideration.
The community lending partnership
As part of the agreement, all the qualifying loans in the community lending initiative will be issued by WebBank and purchased by Varadero Capital, backed by CitiBank. According to Varadero Capital’s Chief Investment Officer, Fernando Guerrero, the initiative will benefit customers with loans at very competitive interest rates.
Adjusting global retail operation
Citigroup Inc (NYSE:C) has been shrinking its retail operations in the global market as the bank seeks to streamline its structure and become more profitable. It is considering a sale of its Latin American retail business where it could fetch nearly $1.5 billion in the transaction.
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