Arab Press

بالشعب و للشعب
Wednesday, Jan 14, 2026

Need a loan? There's a tech company for that.

Need a loan? There's a tech company for that.

Once something Silicon Valley avoided, financial services such as consumer loans have crept in to the offerings of just about every tech company. The transition to such services highlights the increasing pressure on tech companies to find new sources of revenue. Many tech companies claim that innovation, along with consumer choice, will help people who haven’t had access to traditional banking, but lending carries risks that tech companies are not used to.
Technology companies have a new product to sell: debt.

Once something Silicon Valley avoided, financial services such as consumer loans have crept in to the offerings of just about every tech company, a transition that highlights the increasing pressure to find new sources of revenue.

Many of those services come with claims that innovation, along with consumer choice, will help people who haven’t had access to traditional banking. But some Silicon Valley veterans are also warning that lenders to consumers and small businesses are already plentiful and that the practice of lending carries different kinds of risks than tech companies are used to.

And tech critics aren’t keen on the idea either, pointing to a history of using automated systems that end up discriminating against already marginalized groups.

Uber became the most recent tech entrant in October when it announced a new division called Uber Money that will offer financial products, including a digital wallet containing debit and credit cards. The ride-hailing company has struggled to turn a profit.

Other major tech companies have also come up with similar consumer or small-business offerings. Apple has teamed up with Goldman Sachs for a credit card. Payment companies Stripe and Paypal offer small-business loans. Facebook has teased an entry into finance through its embattled Libra digital currency project. Amazon has offered short-term loans to businesses since 2011 and added Bank of America as a partner in 2018. Even China’s tech giants are getting in on the act.

Those companies are also competing with a variety of startups solely focused on financial services technology -fintech, in Silicon Valley parlance -that offer a variety of tools and services that are underpinned by lending.

It’s the kind of trend that has some investors seeing a future in which tech companies without a financial services business are the outliers. Michael Gilroy, a partner at the investment firm Coatue Management, published a blog post in August declaring that “all big brands will become fintechs.”

“You need to have a business that’s already working,” Gilroy told NBC News. “Then you can get into lending.”

But he also offered a warning: The downside of lending is as big as its upside.

“Credit can be a very bad thing depending on how it’s packaged and how you give it, but credit can also be an incredible driver of the economy,” Gilroy said.

Some major tech companies are already experiencing the pitfalls of consumer lending. A New York regulator is investigating possible sex discrimination in the way Goldman Sachs set credit limits for the Apple Card. Uber’s credit effort has attracted criticism from labor activists and politicians who say the company already has a predatory relationship with its drivers.

The rise of peer-to-peer lending -in which tech platforms connect individuals in need of loans with people interested in lending money - in the mid-2000s led to the first “tech-enabled” consumer debt companies, with some, like Lending Club, going public at multibillion-dollar values. But those companies remained a very small percentage of the larger U.S. consumer and small-business debt industries, which lend hundreds of billions of dollars each year.

That began to change after the U.S. financial crisis, which led banks to pull back from consumer and small-business lending.

“The banks, post-crisis, never really got back into expanding their consumer lending or small-business lending, so there’s this whole market that’s underserved,” said Logan Allin, general partner at Fin Venture Capital, which invests in financial technology startups. “And there’s a portion of that market that definitely deserves credit.”

Bringing financial services to underserved populations has been a rallying cry for tech companies seeking to enter the world of banking. The race to bring banking to poor people around the world has been called a ”$100 trillion opportunity.”

The size of that market, combined with the importance of payments as an everyday consumer service, make lending a tempting proposition for big tech companies even if they’re not bringing anything new to the industry.

“It’s not a shiny industry in the sense it’s not feature-rich,” said Gene Munster, a veteran tech analyst and managing director of the venture capital firm Loup Ventures. “The concept of payments being central to us is timeless, and I think these companies recognize you need to build products that capitalize on just the usage of them.”

Startups are, however, looking to bring new angles to lending. Venture capital flooded into fintech companies around the world in 2018 with $36.6 billion invested across more than 2,300 rounds of fundraising -more than the previous two years combined, according to Innovate Finance, a fintech membership association in the United Kingdom.

But the opportunities for fintechs may be limited, particularly in the United States. Americans already have high personal debt levels, spurred in part by fintech companies that now account for a greater percentage of the overall personal loan market than banks, according to data from TransUnion.

And Allin noted that some tech companies are looking to “alternative metrics” such as tracking smartphone usage as an indicator of creditworthiness, rather than relying on traditional data such as credit scores and income.

The technology behind these loan programs also tends to be secretive, employing algorithms and artificial intelligence to determine who should and shouldn’t receive loans.

“It’s a bit black-box,” Allin said.

Fintech lending has added to broader concerns about “shadow banking” -lending that happens outside traditional financial institutions such as peer-to-peer lending and through hedge funds -that now accounts for almost $15 trillion in assets in the U.S. alone. A 2017 survey by the Federal Deposit Insurance Corp. found about 25 million people in the U.S. were unbanked.

Fintechs also face changing consumer appetites for loans. Jordan Nof, managing partner of the startup investment firm Tusk Venture Partners, who also oversaw venture capital investments at Blackstone, said young professionals who might make sense for fintech companies aren’t looking for loans.

“Consumers who are in their 20s and 30s right now have demonstrated time and time again an aversion to taking on any additional debt,” Nof said. “They want to pay off their student loans as quickly as possible, so creating a new debt product for people who don’t want debt, that’s a tough sell.”

Nof said that while he sees plenty of lending-focused startups that offer legitimate value to consumers, a strong U.S. economy combined with intensifying competition among startups can create problems.

“Right now, we’re just seeing people solving problems that don’t exist,” Nof said.

Nof warned that it’s easy for lending startups to end up resembling payday loan companies -something there’s plenty of. CB Insights, a company that tracks startups, found more than 30 companies dedicated to “unbundling the paycheck” in a variety of ways including lending and loan servicing.

And while startups often thrive by forcing stodgy markets to change, disruption is a far riskier proposition when it comes to debt.

“I think that whenever it comes down to the stakes, it’s kind of similar to health care,” Nof said. “The stakes are just really high. You really can’t get things wrong on that side.”
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Donald Trump Organization Unveils Championship Golf Course and Luxury Resort Project in Saudi Arabia
Inside Diriyah: Saudi Arabia’s $63.2 Billion Vision to Transform Its Historic Heart into a Global Tourism Powerhouse
Trump Designates Saudi Arabia a Major Non-NATO Ally, Elevating US–Riyadh Defense Partnership
Trump Organization Deepens Saudi Property Focus with $10 Billion Luxury Developments
There is no sovereign immunity for poisoning millions with drugs.
Mohammed bin Salman’s Global Standing: Strategic Partner in Transition Amid Debate Over His Role
Saudi Arabia Opens Property Market to Foreign Buyers in Landmark Reform
The U.S. State Department’s account in Persian: “President Trump is a man of action. If you didn’t know it until now, now you do—do not play games with President Trump.”
CNN’s Ranking of Israel’s Women’s Rights Sparks Debate After Misleading Global Index Comparison
Saudi Arabia’s Shifting Regional Alignment Raises Strategic Concerns in Jerusalem
OPEC+ Holds Oil Output Steady Amid Member Tensions and Market Oversupply
Iranian Protests Intensify as Another Revolutionary Guard Member Is Killed and Khamenei Blames the West
President Trump Says United States Will Administer Venezuela Until a Secure Leadership Transition
Delta Force Identified as Unit Behind U.S. Operation That Captured Venezuela’s President
Saudi-UAE Rift Adds Complexity to Middle East Diplomacy as Trump Signals Firm Leadership
OPEC+ to Keep Oil Output Policy Unchanged Despite Saudi-UAE Tensions Over Yemen
Saudi Arabia and UAE at Odds in Yemen Conflict as Southern Offensive Deepens Gulf Rift
Abu Dhabi ‘Capital of Capital’: How Abu Dhabi Rose as a Sovereign Wealth Power
Diamonds Are Powering a New Quantum Revolution
Trump Threatens Strikes Against Iran if Nuclear Programme Is Restarted
Why Saudi Arabia May Recalibrate Its US Spending Commitments Amid Rising China–America Rivalry
Riyadh Air’s First Boeing 787-9 Dreamliner Completes Initial Test Flight, Advancing Saudi Carrier’s Launch
Saudi Arabia’s 2025: A Pivotal Year of Global Engagement and Domestic Transformation
Saudi Arabia to Introduce Sugar-Content Based Tax on Sweetened Drinks from January 2026
Saudi Hotels Prepare for New Hospitality Roles as Alcohol Curbs Ease
Global Airports Forum Highlights Saudi Arabia’s Emergence as a Leading Aviation Powerhouse
Saudi Arabia Weighs Strategic Choice on Iran Amid Regional Turbulence
Saudi Arabia Condemns Sydney Bondi Beach Shooting and Expresses Solidarity with Australia
Washington Watches Beijing–Riyadh Rapprochement as Strategic Balance Shifts
Saudi Arabia’s Vision 2030 Drives Measurable Lift in Global Reputation and Influence
Alcohol Policies Vary Widely Across Muslim-Majority Countries, With Many Permitting Consumption Under Specific Rules
Saudi Arabia Clarifies No Formal Ban on Photography at Holy Mosques for Hajj 2026
Libya and Saudi Arabia Sign Strategic MoU to Boost Telecommunications Cooperation
Elon Musk’s xAI Announces Landmark 500-Megawatt AI Data Center in Saudi Arabia
Israel Moves to Safeguard Regional Stability as F-35 Sales Debate Intensifies
Cardi B to Make Historic Saudi Arabia Debut at Soundstorm 2025 Festival
U.S. Democratic Lawmakers Raise National Security and Influence Concerns Over Paramount’s Hostile Bid for Warner Bros. Discovery
Hackers Are Hiding Malware in Open-Source Tools and IDE Extensions
Traveling to USA? Homeland Security moving toward requiring foreign travelers to share social media history
Wall Street Analysts Clash With Riyadh Over Saudi Arabia’s Deficit Outlook
Trump and Saudi Crown Prince Cement $1 Trillion-Plus Deals in High-Profile White House Summit
Saudi Arabia Opens Alcohol Sales to Wealthy Non-Muslim Residents Under New Access Rules
U.S.–Saudi Rethink Deepens — Washington Moves Ahead Without Linking Riyadh to Israel Normalisation
Saudi Arabia and Israel Deprioritise Diplomacy: Normalisation No Longer a Middle-East Priority
As Trump Deepens Ties with Saudi Arabia, Push for Israel Normalization Takes a Back Seat
Thai Food Village Debuts at Saudi Feast Food Festival 2025 Under Thai Commerce Minister Suphajee’s Lead
Saudi Arabia Sharpens Its Strategic Vision as Economic Transformation Enters New Phase
Saudi Arabia Projects $44 Billion Budget Shortfall in 2026 as Economy Rebalances
OPEC+ Unveils New Capacity-Based System to Anchor Future Oil Output Levels
Hong Kong Residents Mourn Victims as 1,500 People Relocated After Devastating Tower Fire
×