Pagaya Announces New Lending Partnership with OneMain Financial

Rhea-AI Summary

Pagaya Technologies (NASDAQ: PGY) and OneMain Financial (NYSE: OMF) have announced a new partnership to expand credit access for auto finance customers. OneMain will utilize Pagaya's AI-driven lending technology to serve customers outside its existing credit criteria. This collaboration aims to broaden OneMain's ability to provide auto loans to qualified borrowers.

Sanjiv Das, President of Pagaya Technologies, expressed enthusiasm for the partnership, highlighting their commitment to helping large lenders increase financial opportunities for customers. Micah Conrad, COO of OneMain, emphasized that the partnership will enable them to continue serving hardworking Americans by expanding access to auto loans. Both companies are exploring the possibility of expanding their collaboration into a broader enterprise agreement.

Positive

• New partnership with OneMain Financial, a leader in nonprime consumer lending
• Expansion into auto finance lending, potentially increasing Pagaya's market reach
• Possibility of a broader enterprise agreement with OneMain in the future

Negative

• None.

Insights

Financial Technology Analyst

This partnership between Pagaya and OneMain Financial marks a significant development in the fintech and lending space. Pagaya's AI-driven technology could potentially expand OneMain's auto lending capabilities, allowing them to serve a broader customer base. This move is particularly noteworthy as it targets the nonprime consumer segment, a substantial market often underserved by traditional lenders.

The collaboration could lead to increased loan originations for OneMain, potentially boosting their revenue streams. For Pagaya, this partnership with a major player like OneMain validates their technology and could pave the way for more high-profile partnerships. The mention of a possible broader enterprise agreement suggests room for substantial growth in this relationship.

However, investors should be cautious. While AI-driven lending promises to expand credit access, it also carries risks, particularly in the nonprime segment. The success of this venture will largely depend on the accuracy and reliability of Pagaya's AI models in predicting creditworthiness beyond traditional metrics.

Credit Risk Analyst

The partnership between Pagaya and OneMain presents an intriguing risk-reward scenario. On one hand, Pagaya's AI technology could potentially identify creditworthy customers that traditional models might overlook, expanding OneMain's customer base in the auto finance sector. This could lead to increased loan volumes and potentially higher returns.

However, the focus on customers outside existing credit criteria raises some red flags. The nonprime market is inherently riskier and expanding into even riskier territory could potentially increase default rates. The success of this venture will hinge on the robustness of Pagaya's AI models and their ability to accurately assess credit risk in this challenging segment.

Investors should closely monitor key performance indicators such as loan origination volumes, default rates and net interest margins in the coming quarters to gauge the effectiveness of this partnership. While the potential for growth is significant, so is the potential for increased credit risk.

OneMain to utilize Pagaya’s technology to serve Auto Finance customers outside its existing credit criteria

NEW YORK--(BUSINESS WIRE)-- Pagaya Technologies Ltd. (NASDAQ: PGY) (the “Company” or “Pagaya”), a global technology company delivering AI-driven product solutions for the financial ecosystem, and OneMain Financial (NYSE: OMF) ("OneMain"), the leader in offering nonprime consumers responsible access to credit, today announced a new partnership.

Pagaya’s proprietary, AI-driven lending technology enables fintechs, banks, and other loan originators to provide broader credit access for their customers. Through this partnership, OneMain’s auto lending business will leverage Pagaya’s technology to support the company’s ability to serve more qualified customers that are outside its existing credit criteria. The two firms are also working to expand their partnership towards a broader enterprise agreement.

“We're thrilled to partner with OneMain as we continue to expand our lending products and grow our partner network,” said Sanjiv Das, President of Pagaya Technologies. “This partnership represents our continued commitment to helping the country’s largest lenders provide more financial opportunity to their customers with our tech-enabled lending solution.”

“Our partnership with Pagaya allows us to continue to serve hardworking Americans by furthering access to auto loans,” said Micah Conrad, COO of OneMain. “We look forward to working toward a broader enterprise partnership with Pagaya.”

About Pagaya

Pagaya (NASDAQ: PGY) is a global technology company making life-changing financial products and services available to more people nationwide, as it reshapes the financial services ecosystem. By using machine learning, a vast data network and a sophisticated AI-driven approach, Pagaya provides comprehensive consumer credit and residential real estate products for its partners, their customers, and investors. Its proprietary API and capital solutions integrate into its network of partners to deliver seamless user experiences and greater access to the mainstream economy. Pagaya has offices in New York and Tel Aviv. For more information, visit pagaya.com.

About OneMain Holdings, Inc.

OneMain Financial (NYSE: OMF) is the leader in offering nonprime consumers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans. We empower our customers to solve today's problems and reach a better financial future through personalized solutions available online and in 1,300 locations across 44 states. OneMain is committed to making a positive impact on the people and the communities we serve. For additional information, please visit OneMainFinancial.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240806207871/en/

Media Contacts

Emily Passer

Head of PR & External Communications, Pagaya

Press@pagaya.com



Kelly Ogburn

Vice President, Corporate Communications and Public Affairs, OneMain Financial

Kelly.ogburn@omf.com

Source: Pagaya Technologies Ltd.

FAQ

What is the new partnership between Pagaya Technologies (PGY) and OneMain Financial?

Pagaya Technologies (PGY) and OneMain Financial have partnered to expand credit access for auto finance customers. OneMain will use Pagaya's AI-driven lending technology to serve customers outside its existing credit criteria.

How will Pagaya's technology benefit OneMain Financial's auto lending business?

Pagaya's AI-driven lending technology will enable OneMain Financial to serve more qualified customers that fall outside its existing credit criteria, potentially expanding its auto lending business and providing broader access to auto loans.

Are Pagaya (PGY) and OneMain planning to expand their partnership further?

Yes, Pagaya (PGY) and OneMain are working towards expanding their partnership into a broader enterprise agreement, which could lead to more extensive collaboration in the future.

What is the significance of this partnership for Pagaya Technologies (PGY)?

This partnership represents Pagaya's (PGY) expansion into auto finance lending and growth of its partner network, potentially increasing its market reach and reinforcing its position in AI-driven lending solutions.