Fintech firm Block has received approval from the Federal Deposit Insurance Corporation (FDIC) to issue loans through its banking subsidiary, Square Financial Services.

This allows the company to expand its Cash App Borrow product, offering small-dollar consumer loans.

The move comes as Block faces slowing growth and a 33% drop in stock value this year. Last quarter, the company reported just 4.5% revenue growth, leading to an 18% stock decline, its steepest since 2020.

Cash App Borrow provides short-term loans averaging under US$100, with a one-month repayment period.

Despite a robust underwriting model, Block saw a 39% rise in transaction losses in its lending division.

Last month, the company integrated Afterpay, its buy now, pay later (BNPL) service acquired for US$29 billion, into the Cash App card to compete with Affirm and other BNPL providers.