Today Mogo (NASDAQ:MOGO) announced a long awaited partnership with a lending institution to accelerate its loan growth and move future loans off its balance sheet to reduce debt. It announced a deal with goeasy Ltd. to provide Canadians with personal loans up to $15,000 with terms of up to 5 years, on a mobile device using the Mogo app.
While the two companies consider this a six-month pilot, Mogo will be entitled to full loan origination fees for all the customers it provides goeasy from the start of the pilot. After the pilot, the deal will be finalized and possibly expanded based on results. Once the pilot goes live later this month, consumers will be able to use the Mogo app to get a no-obligation loan pre-approval, customize their loan, and complete the loan agreement in minutes. goeasy will fund loans that meet its credit criteria, while Mogo will still fund other loans. The customer will not be aware who is giving the loan until it is finalized and both companies will provide loans based on their own lending criteria. The process has seamless integration into the Mogo app. goeasy's operating division, easyfinancial, is a leading provider of unsecured and secured non-prime consumer loans in Canada. It has been in business 13 years, has more than 350 lending locations, has originated more than $3.3 billion in loans and has a $1 billion consumer loan portfolio. While Mogo’s loans typically average $3,000, we expect that those provided by goeasy may average a higher amount.
Goeasy provides sub-prime loans and we expect that Mogo is still pursuing a lending partner that will provide its customers prime loans and/or other financial products in the near future.
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