John McCrank

NEW YORK (Reuters) – Robinhood Markets Inc (NASDAQ:) Wednesday announced that they have launched a fully-paid Securities Lending Program. Users can lend their shares to other market participants through the popular App and receive passive income.

Robinhood is trying to diversify income from transactional revenues, which accounted for nearly 3 quarters of its revenue. However, they were down 48% compared with a year ago when individuals invested in so-called “meme stocks”.

Robinhood makes money already by borrowing shares its customers purchase on margin. But the new fully paid program will also include shares owned by nearly 23,000,000 users. As long as these people opt in to participate and fulfill certain requirements,

Jason Warnick, Chief Executive Officer of Robinhood, stated that the new program could bring in as much revenue as Robinhood’s margin lending program.

In 2021, margin securities lending helped the Menlo Park-based firm to earn $137.2 Million.

Robinhood chief broker officer Steve Quirk stated that transactional revenue was the main component of revenue, but the offer becomes more valuable as the offerings are expanded.

Institutional investors often request shares in return for fees.

Quirk said, “It’s another way, especially in challenging markets, such as the one we’ve been experiencing lately, to generate a bit more income off an existing portfolio.”

Robinhood users need to have at least $5,000 in account value and at minimum $25,000 of reported income.