Block received approval from the Federal Deposit Insurance Corp. to directly offer small consumer loans to Cash App customers.
The fintech said in a press release that Square Financial Services will start offering and servicing Cash App Borrow in the coming weeks.
Block, which has been making the loans through an external bank partner, said the average loan has been less than $100 with about a month in duration. It originated nearly $9 billion in Cash App Borrow loans last year with an historic loss rate of less than 3%.
“We’re focused on building technology to increase access to the economy, and Square Financial Services is a critical tool in helping us deliver on that,” Amrita Ahuja, Block’s chief operating officer and chief financial officer, said in the release.
“The bank allows us to provide a clear path to cash flow using our proven underwriting mechanisms for businesses and now, consumers who are not well served by the traditional banking and credit systems,” she added.