A consumer finance app that plans to launch later this year has shifted its strategy away from peer-to-peer lending due to the “intense” regulatory environment.
Punk Money is now focused on friends and family lending, whereby consumers can borrow money from someone they already know.
The investor sets the interest rate, although the borrower can request a certain rate, and users can opt in to report their data to credit bureaus to improve their credit score.
Founder and chief executive Ewan Dickie said he was originally planning to launch Punk Money as a P2P lending platform but decided on a change of direction in the third quarter of last year because of the stringent regulatory approval process.
“We saw P2P regulation was incredibly intense and it would be difficult to progress quickly within that – the Financial Conduct Authority was really stringent on new players which meant a major roadblock to entering,” he told Peer2Peer Finance News.
“Friends and family lending has less competition. It was better for us to focus on building a product that we knew was going to help people.”
Dickie said Punk Money closed a £500,000 funding round at the end of 2021, and later this year aims to raise £3m and launch to market.
He also revealed that more than 8,000 people have registered to use the app so far.
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