Is Veteran-Owned Entrepreneurship Headed Toward Extinction?

Veteran-owned business statistics

Any entrepreneur will tell you, starting a small business is not for the faint of heart. It takes vision, grit, determination, dedication, an overwhelming willingness to fight to the end, the will to overcome hurdles you never could have anticipated. But the result, for those with enough heart to see it through, can be massively […]

The post Is Veteran-Owned Entrepreneurship Headed Toward Extinction? appeared first on Lending Times.

Veteran-owned business statistics

Any entrepreneur will tell you, starting a small business is not for the faint of heart. It takes vision, grit, determination, dedication, an overwhelming willingness to fight to the end, the will to overcome hurdles you never could have anticipated.

But the result, for those with enough heart to see it through, can be massively rewarding. It takes a certain, special type of work ethic to start something from scratch, to build something from the ground up. Many have ideas, but few can execute to fruition.

Perhaps that’s why so many veterans transition from the military to business owners. All of those characteristics mentioned above…those are just standard traits for the men and women who dutifully and proudly serve in the military. So it shouldn’t come as too much of a shock to hear that as many as 25 percent of transitioning service members aspire to become small business owners. In fact, there are more than 2.5 million U.S. businesses today that are majority-owned by veterans.

Yet veterans are at a serious disadvantage when it comes to seeing their business ideas come to light. The issue isn’t a lack of desire, skill, or intent…it’s something else. Where, exactly, is the system broken?

An Overall Decline of Entrepreneurship – Why?

It’s a topic well-discussed by Inc.com in recent years – the fact that entrepreneurship as a whole has been on the decline for decades. Some reports show the trend has been on a downward slide for nearly four decades.

Just why is the ability to fulfill that age-old American dream of starting your own business in a slump? The main answer is simple: lack of access to capital.

For millions of businesses across the nation (both veteran-owned and non), cash flow and capital are a huge struggle. The simple fact is that access to working capital is among the greatest of challenges small businesses face. All too often, business owners just can’t get funding to start or grow their businesses. The term “underbanked” represents the 77 percent of small/medium business owners who are declined by traditional banks after they apply for funding for their business ventures. And for veterans, this is even more the norm.

VOBs – Entrepreneur Assets to Our Economy

U.S. veteran owned businesses (VOBs) are an essential component of our overall economy. The leadership skill sets and values service men and women hone during their time in the military is a big part of what transforms many of them into natural leaders. They develop an uncanny ability to solve problems…many of them are able to overcome the types of challenges most small businesses face during the startup phase. And these leadership skills often carry them throughout their tenure as business owners, even years after they launch. After analyzing four year’s worth of credit data (of both VOBs and non-veteran-owned-businesses), a recent report from Experian notes that VOBs tend to have improved sustainability and longevity when compared to non-veteran-owned businesses.

There are countless other substantial benefits VOBs offer. They’re more likely to provide employees with retirement plans, health insurance, paid leave and profit sharing. They’re also 30 percent more likely than non-veteran-owned businesses to employ fellow veterans. Statistically, research consistently shows that VOBs report impressive numbers in relation to growth, employment opportunities and sales, including:

  • VOBs with more than two employees = over 490,000
  • Total number of VOB employees = 5.8 million
  • Annual payroll = $210 billion
  • Number of VOBs that are “small businesses” = 99.9 percent
  • 6-digit sales of $100,000 or more = nearly 80 percent
  • Generate an annual revenue of $500,000 or more = more than 38 percent
  • VOBs have collective sales of = $1.2+ trillion

What does all this tell us? VOBs are a huge benefit to the economy. That’s in part what makes it so hard to ignore the other side of the story. Despite their success and contribution to our economic sustainability, many VOBs – just like most small businesses today – are struggling to make ends meet. The Small Business Association (SBA) Office of Advocacy says that over 69,000 VOBs closed as a result of inadequate cash flow.

Taking that leap of faith and starting your own business has always been a risk, for any entrepreneur, but with entrepreneurship across the board on an overall decline (for both VOBs and non-veteran owned businesses), that risk seems somehow even greater these days.

Challenges Veteran Business Owners Face

Of the many challenges entrepreneurs face when starting a new business, for most, funding is high on the list. For the majority of veterans, sources of capital can include personal savings (30 percent) and personal or business credit (nearly 11 percent).

According to the same Experian report, veterans tend to have significantly fewer mentorship options and a lack of networking opportunities. They’ve also historically had less access to capital than their non-veteran owned counterparts, says a report from the Federal Reserve Bank, who together with the SBA assessed the stats of both VOB and non-VOB small businesses.

The SBA’s Office of Advocacy partnered with the Federal Reserve Bank of New York to publish FINANCING THEIR FUTURE: Veteran Entrepreneurs and Capital Access. Their research shows that despite need being strikingly similar amongst VOB and non-VOBs, there is a glaring disparage in lending opportunities for the two groups. It’s one major reason why veteran entrepreneurship continues to see a generational decline.

The report notes that even though VOBs submitted more applications for funding than non-VBOs (47 percent versus 43 percent, respectively, submitted three or more applications), from a larger variety of lenders (online lenders, small banks and large banks), VOBs received less financing overall. During 2010 – 2017, SBA loans to VOBs increased by 48 percent, whereas they increased by 82 percent to non-VOBs. This is despite dedicated veteran-dedicated relief programs.

And some more results of those applications? It’s reported that 60 percent of VOBs still have a financing shortfall due to receiving less funds than they applied for. In comparison, only 52 percent of non-VOBs received less than requested.

The report also points out what we’ve already seen in multiple other studies, that:

  • “military service is highly correlated with self-employment probability,” and
  • “veterans are at least 45 percent more likely than those with no active-duty military experience to be self-employed”

What should all this data tell us? It’s pretty clear: we should be putting more faith and funding into VOBs.

Real-Life Success Stories

For those veterans who have been able to find funding through alternative resources, the results are both impressive and inspirational.

Just look at veteran and owner of The Texas Silver Rush, Joseph Remini. Remini creates custom jewelry and is considered a “destination” in Fredericksburg. He’s created custom pieces for the likes of stars including Santana, Ringo Starr and countless other country artists. Reliant Funding’s non-traditional funding options allowed him to purchase the silver he needed to make expensive, custom, one-of-a-kind pieces that are allowing him to make a name for himself. Remini knows that Reliant’s dedication to veterans is something unique.

“I will tell you that Reliant has given me peace of mind. I know I am with a company that cares about me, is willing to grow with me.” – Joseph Remini, The Texas Silver Rush

Christopher Adams is VBO of Cedar Creek Builders and a rental management company. When both companies were growing at a rapid speed, Adams used alternative funding to purchase and replace equipment he desperately needed for a job. Borrowed funds also allowed him to cover unexpected costs during the winter months. His success even meant he was able to purchase a personal condo without concern that it would affect his credit, and ultimately, his ability to access capital to grow his businesses. Adams is grateful for the opportunity non-traditional funding has afforded him.

“Reliant is there when you need funding. It is nice to know and have that peace of mind.” – Christopher Adams, Cedar Creek Builders

Reliant Funding is honored to represent so many veterans in small business. By eliminating origination fees for veteran and active duty service members and their families, and releasing a comprehensive resource guide for veteran owned businesses, Reliant has shown its dedication to the veteran community. We believe knowledge is power, so we’re committed to setting VOBs up with the know how to successfully navigate:

  • Cash flow management strategies
  • Funding options and how to use them
  • Franchise initiatives
  • Certification as veteran owned business
  • Training and education opportunities
  • How to take and apply advice from other successful veteran business owners

If you’re a veteran or family member of a veteran looking for funding and working capital for your new or existing venture, our special offering to veterans and the debut of our VOB guide is proof of our commitment to investing VOBs.

Sources:

Author:

Adam Stettner is the CEO and Founder of Reliant Funding

The post Is Veteran-Owned Entrepreneurship Headed Toward Extinction? appeared first on Lending Times.

Thursday December 5 2019, Weekly News Digest

Prosper monthly originations

News Comments Today’s main news: SoFi gets BitLicense in New York. Funding Circle unveils 250M GBP securitization of SME loans. Zopa raises 1.4M GBP. RateSetter to close family finance product. RMBS gears up for securitization windfall. Reserve Bank of India raises P2P lending limit by 5x. Today’s main analysis: Prosper performance update – October 2019. […]

The post Thursday December 5 2019, Weekly News Digest appeared first on Lending Times.

Prosper monthly originations

News Comments

United States

United Kingdom

European Union

India

Other

News Summary

United States

Prosper Performance Update – October 2019 (Prosper), Rated: AAA

Highlights from the report include:

  • In October, 64% of originations were rated AA-B. The dollar‑weighted average FICO on the platform was 720, relatively flat month‑over-month.
  • The weighted average income of borrowers on the platform in October was ~$106K, relatively flat month-over-month.
  • The weighted average borrower rate for October originations increased 30 bps month-over-month largely due to a shift in Prosper Rating mix.
Source: Prosper

See the full report here.

New York Gives SoFi Green Light on BitLicense (SoFi), Rated: AAA

New York State Department of Financial Services (NYDFS) has approved SoFi’s BitLicense application, allowing SoFi Invest customers in New York to trade cryptocurrencies on its platform through SoFi Digital Assets, LLC.

FT Partners’ CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA

FT Partners recently announced our role as exclusive financial advisor to 

Source: FT Partners

Financings
* 

Source: FT Partners

See the full report here.

Online Lending Platform Refines the Science of Underwriting (CFO.com), Rated: AAA

Through the use of artificial intelligence, Upstart examines approximately 1,600 variables pertaining to loan applicants, says CFO Sanjay Datta. But he doesn’t like to draw attention to the artificial intelligence per se.

In a Nov. 8 report, Kroll rated the performances of five loan securitizations, worth a cumulative $1.5 billion, that Upstart offered from mid-2017 through early this year. Each one has significantly outperformed Kroll’s forecast at the time of the deal.

Kroll predicted that Upstart’s first securitization, dated June 21, 2017, would experience 13.07% credit losses by October 2019. But the actual losses were only 9.96%, 24% better than forecast.

Kabbage data places Vermont at third-highest small business revenue growth in the first half of 2019 (Vermont Biz), Rated: AAA

Kabbage placed Vermont at the third-highest in the nation at 173.90 on the Kabbage Index Value, based on monthly median-revenue growth for small businesses.

The Kabbage Index Value (KIV), a value used to track revenue growth of small businesses, increased almost 22 points, from 136.8 to 158.4 points, indicating U.S. small businesses’ median revenue grew 15.7% in the first six months of the year. This represents a 22% increase compared to the same time period in 2018 and a large contrast from the second half of 2018 when small business revenue only grew 1.8 percent.

Source: Kabbage

StreetShares Discontinues Major Segment of Its Financing Business (deBanked), Rated: A

StreetShares quietly discontinued a major part of its financing business on November 15, a new disclosure filed with the SEC revealed.

The company has only facilitated $180 million in funding to small businesses since inception in 2014. That would indicate that the invoice factoring portion was roughly half of the company’s funding volume.

Monzo hires Visa exec to lead US push (ZangPay), Rated: A

Monzo has hired a Visa executive — who was previously with Standard Chartered — to lead its US business as it ramps up efforts to become a fully-fledged bank in the country even though complex rules have deterred some rivals, according to the FT.

There’s a better way to regulate small-dollar lending (American Banker), Rated: A

Innovation in online lending has shifted consumers away from traditional payday lenders. And while that’s a safer bet, the shift has also sparked a misguided policy conversation around online lending that is focused on the wrong thing: capping interest rates.

Bad Credit? Regulators Back Ways for Risky Borrowers to Get Loans (WSJ), Rated: A

Consumers with spotty or no credit histories might find it easier to get loans after federal banking regulators endorsed alternatives to traditional methods of assessing creditworthiness.

The regulators on Tuesday backed the use of information such as borrowers’ cash flow as an alternative to the traditional credit-evaluation system, which relies on scores issued by companies such as Equifax Inc. and Experian PLC based on applicants’ past history of borrowing and repayments.

Assets managed by robos up 10% so far in 2019 to $ 283 billion (Investment News), Rated: A

Assets managed by digital advisers grew 10% over the first three quarters of 2019 to reach a total of $283 billion, according a new report from Aite Group, a consulting firm.

Fintech Lending Stocks Have Been a Bust. Here’s Why. (Barron’s), Rated: A

Fintech lenders were supposed to be the next big thing in finance. Big data, machine learning, peer-to-peer platforms, social networking data: the list of buzzy new ideas that were supposed to upend the business of money lending went on and on.

Bank Regulators’ Proposals Won’t Erase Madden Uncertainty (Law360), Rated: A

These Funding and Business Assistance Programs Are Helping Felons Restart Their Lives (Stamford Advocate), Rated: A

1. Prosper

Prosper is a peer-to-peer lending platform. The entire process is online, with no background check. Hence criminal history does not affect getting a loan.

2. HelpForFelons.org

HelpForFelons.org has lists of grants and loans for felons and links to reentry programs around the country.

More students from higher-income families taking out student loans (Marketplace.org), Rated: A

Whether their families are higher income, lower income, or somewhere in between, a majority of all students today take out loans to cover at least part of their undergraduate degree. Which wasn’t always the case.

In fact, over the last 20 years, the percentage of students from higher-income families — defined here as making more than $114,000 a year — who take out loans to get a bachelor’s degree has more than doubled, from 30% in the mid-1990s to 60% now, according to a new report out Wednesday from the American Enterprise Institute. The percentage of students from low-income families who take out loans is higher, just over 75%, but hasn’t increased nearly as much since the 1990s.

Source: Marketplace.org

Crypto lender hires local mayor to smooth over regulatory hurdles (Decrypt), Rated: A

Cred, a crypto lending and borrowing platform, announced earlier this week that it has added a local California mayor to its roster to further boost government relations for its business.

Ally Medina, mayor of Emeryville—a city in California, will lead the company’s strategic government relations and business development initiatives.

Payday Lender Curo Group Can’t Derail Securities Class Action (Bloomberg Law), Rated: A

Curo Group Holdings Corp. failed to shake off a proposed shareholder class action after the District of Kansas found sufficient allegations that the company didn’t disclose facts that were bound to impact its financial performance.

Curo Can’t Ditch Investor Suit Over Canada Products (Law360), Rated: B

Source: Law360

Elevate Credit to Attend the Jefferies’ Crossover Consumer Finance Summit (BusinessWire), Rated: B

Elevate Credit, Inc. (NYSE: ELVT), today announced that its Chief Executive Officer, Jason Harvison, and Chief Financial Officer, Chris Lutes, will attend the Jefferies’ Crossover Consumer Finance Summit on December 12, 2019 at The New York Lotte Palace Hotel. Mr. Harvison and Mr. Lutes will be available for 1×1 meetings with investors.

Harvard University and ArborCrowd Partner to Host Panel That Examines the Future of Commercial Real Estate Investing (Yahoo! Finance), Rated: B

On Tuesday, November 20, Harvard University’s Real Estate Development Club together with ArborCrowd (the “Company”), the first crowdfunding platform launched by a real estate institution, hosted a panel of experts at Harvard University to discuss the future of commercial real estate investing. The panel was attended by graduate students interested in pursuing a career in commercial real estate.

Finicity Solution Live Within Ellie Mae Encompass Consumer Connect (Markets Insider), Rated: B

Finicity, a provider of real-time financial data access and insights, and Ellie Mae, the cloud-based platform provider for the mortgage finance industry, today announced that Finicity’s digital Verification of Assets (VoA) solution is now available through Ellie Mae’s Encompass Consumer Connect, part of the Encompass Digital Lending Platform.

United Kingdom

Funding Circle Unveils £250 Million Securitization of SME Loans With Waterfall Asset Management (Crowdfund Insider), Rated: AAA

Marketplace lending company Funding Circle (LSE:FCH) recently unveiled its £250 million securitization of SME loans with Waterfall Asset Management. The duo reported that the portfolio brings the total amount of UK Funding Circle loans securitized to £1 billion and the deal will notably open up the small business loans asset class to an even wider range of investors such as insurance companies and pension funds.

Is the current share price of FTSE fintech company Funding Circle a bargain buy? (The Motley Fool), Rated: A

On, average Funding Circle collects 4.86% of the total amount of new loans generated annually as transaction revenue and 0.82% of the annual principal balance of loans under management in servicing fees.

Fintech Zopa raises £140m just in time for banking licence (Yahoo! Finance), Rated: AAA

Financial technology company Zopa has raised £140m, just in the nick of time to meet a key requirement of its provisional banking license.

Zopa announced on Tuesday it had secured the investment from IAG Capital, a US investment group that first backed the online lender in 2018.

Zopa valuation fall hits Augmentum Fintech but other gains buoy portfolio (AltFi), Rated: A

Zopa has seen its valuation fall by 47 per cent following its latest fundraise to a new money valuation of £188m.

The trust wrote down £10.3m in the value of Zopa and its share price has fallen has fallen 4.67 per cent as a result today.

Zopa Bank fundraising delays ‘not down to P2P lending concerns’ (P2P Finance News), Rated: A

ZOPA’S struggle to raise last-minute funding so it can launch its banking brand should not be seen as a sign of trouble for the peer-to-peer lending sector, an analyst claims.

RateSetter to close family finance loan product (P2P Finance News), Rated: AAA

RATESETTER is to stop offering its family finance product from the new year.

Uncapped raises £10M to offer revenue-based finance to growing businesses (TechCrunch), Rated: A

Uncapped, a London-headquartered and Warsaw-based startup that wants to provide “revenue-based” finance to growing European businesses, is officially launching today and disclosing that it has raised £10 million in funding.

UK start-up Student Finance raises €1.15m to tackle university loans (Fintech Futures), Rated: A

Educational technology start-up Student Finance has raised €1.15 million in a seed funding round led by Seedcamp and Mustard Seed Impact.

Growth Street CEO exits (AltFi), Rated: A

Greg Carter, the CEO of Growth Street, has stood down from his role.

Carter, who co-founded the business in 2014, is to remain with Growth Street in an advisory role, the company said.

Finastra joins World Economic Forum (Finastra), Rated: B

Finastra today announced that it has joined the World Economic Forum. The move will see the company collaborating with industry leaders and policy-makers to drive change across financial services, world trade and beyond, to help build a better, sustainable future.

China

China gradually cleans up P2P lending businesses (Ecns.cn), Rated: AAA

Southwest China’s Sichuan Province became the country’s latest province to ban all peer-to-peer lending (P2P) businesses amid regulators’ tightened grip on the internet financial industry due to monetary risks.

European Union

Securitization: RMBS gears up for windfall (Euromoney), Rated: AAA

Volumes have picked up since then, and RMBS-related issuance is forecast to reach $100 billion in 2019, up from $86 billion in 2018, according to Standard & Poor’s. However, the market is still a shadow of its former self. The banks still dominate mortgage lending, but not nearly to the extent that they used to. Most are quick to point out that their online disruptors have yet to perform through a cycle.

The banks still dominate mortgage lending, but not nearly to the extent that they used to. Most are quick to point out that their online disruptors have yet to perform through a cycle.

It’s securitization, but not as we knew it (Euromoney), Rated: A

There is no more ‘originate to distribute’, the grand name for the strategy behind so much of the dysfunctional lending that drove the sub-prime residential mortgage-backed securities (RMBS) crisis.

Today banks provide funding to a growing army of private and buy-side institutions that make the loans, and the banks then arrange securitization exits for them.

German fintech N26 targets IPO in 4-5 years (Reuters), Rated: A

German fintech N26, valued at $3.5 billion in its latest funding round, views a stock market listing as an attractive option, but rather in 4-5 years than in the short-term, its Germany head told Reuters.

Klarna Bank picks Amazon for expanded cloud services (American Banker), Rated: A

In a move to aid faster expansion and provide more security and regulatory compliance tools, Klarna Bank in Sweden is strengthening its longtime relationship with Amazon Web Services by making it the bank’s preferred cloud provider.

Klarna says it will leverage the AWS global infrastructure to support its scale, now at 60 million customers across 170,000 merchants in 17 countries.

European FinTech: the next generation trend setter (Finextra), Rated: A

Despite the influence of the US, we are finding something quite different when exploring the way the FinTech market is evolving. European technological innovation is having a profound effect on the approach US companies are taking, reversing the well-known ‘cultural influencing trend.’

International

International P2P Lending Volumes November 2019 (P2P-Banking), Rated: AAA

The total volume for the reported marketplaces in the table adds up to 658 million Euro.

Source: P2P-Banking

How in-branch video banking enhances customer service experience (Bob’s Guide), Rated: A

While they turn to online banking, and given the rise in digital transformation, the most customers still appreciate the need for financial advice face-to-face, especially for complex transactions or help. Accenture’s recent study of financial service consumers show that on average two-thirds of consumers favour face-to-face interaction with their bank.

A 2018 study supported by the retail banking industry group EFMA, Vidyo and CUNA Strategic Services suggested more customers would be willing to use in-branch video (90 percent) than online video banking (85 percent).

Crypto Loans See Solid Growth, Platforms Attract Community Interest (CoinTelegraph), Rated: A

Today, the entire crypto loaning industry is estimated at $4.7 billion and the number of crypto loan platforms is growing rapidly, according to a report made by blockchain company Graychain Ltd. While lenders have only earned a combined $86 million in interest since 2018, the demand for cryptocurrency loans is growing. In the first quarter of 2019, over 5,400 new loans were issued, and in the second, at least 18,500. The volume of lending also increased, with lenders issuing $64.8 million in loans in the first quarter and $159.3 million in the second.

Source: CoinTelegraph

OpenID Foundation Launches New Microsite Focused on Open Banking and Fintech Developers (OpenID), Rated: B

The OpenID Foundation has launched a new microsite focused on global open banking initiatives and providing resources for fintech developers implementing the Foundation’s Financial-grade API (FAPI).

Australia/New Zealand

Peer-to-peer lending and crowdfunding 2019 data published (Scoop), Rated: AAA

The Financial Markets Authority (FMA) today published its third statistical report on peer-to-peer lending (P2P) and crowdfunding services in New Zealand.

Year-on-year, there were 34% fewer successful crowdfunding offers and 52% less investment from licensed service investors.

India

RBI Raises Peer-To-Peer Lending Limit Fivefold (Bloomberg Quint), Rated: AAA

India’s central bank has raised the lending cap for peer-to-peer platforms fivefold, providing a boost to such lending.

The aggregate exposure of a lender to all borrowers at any point of time, across all non-banking financial company-peer-to-peer platforms, will be capped at Rs 50 lakh against Rs 10 lakh at present, the Reserve Bank of India said in a statement on Developmental and Regulatory Policies issued on Dec. 5.

A 30-year-old company is disrupting the loan marketplace business in an old-fashioned way (Economic Times), Rated: A

MyMoneyMantra is taking on rivals like BankBazaar and Paisabazaar head on. The company is growing its giant distribution network even as it swiftly expands its digital footprint to scale faster. But its physical network will remain the core business. A digital-only model just doesn’t deliver, believes its founder.

Xiaomi announces launch of digital lending solution Mi Credit in India (The News Minute), Rated: A

Xiaomi on Tuesday announced Mi Credit, its digital lending solution in India. Mi Credit is Xiaomi’s second Mi Finance solution to be launched in India after Mi Pay.

Xiaomi Offers Digital Lending Marketplace For Young Indian Consumers (PYMNTS), Rated: B

The new venture is an app called Mi Credit, and it’s a marketplace for personalized lending, offering users credit between Rs 5,000 ($70) and Rs 100,000 ($1,400). Xiaomi said it offers a “low” interest rate.

Online lending segment to witness consolidation in next 5-6 months: CASHe’s Ketan Patel (IBS Intelligence), Rated: A

The NBFC (non-banking financial company), which lends to the young salaried segment with a monthly income of Rs 15,000 and upwards, is already profitable. With a monthly run-rate of 19000 loans, the lender has  30,000 unique customers. Its CEO Ketan Patel, who had spent 18 years in Kotak Mahindra Bank before joining CASHe, told IBS Intelligence that as long as lenders use technology to focus on strong underwriting, they need not worry about collections or NPAs.

Asia

FinAccel raises $ 90 million for low-fee lending app (Impact Alpha), Rated: AAA

FinAccel’s mission is to improve financial inclusion across Southeast Asia’s “vast and fast growing middle class”. Its starting point is Indonesia, where most of the country’s 265 million people lack access to formal financial services but do have a cell phone.

Indonesian P2P lender Komunal bags seed money in East Ventures-led round (Tech in Asia), Rated: A

Indonesian peer-to-peer lending company Komunal secured an undisclosed amount of seed funding in a round led by East Ventures, with local VC firm Skystar Capital also participating.

Latin America

Goldman Makes Biggest Mexico Fintech Bet With MercadoLibre Loan (Bloomberg), Rated: AAA

Goldman Sachs Group Inc. agreed to lend $125 million to Mercado Credito, the bank’s third loan to a Latin American fintech this year and the biggest ever in Mexico.

MercadoLibre dominates Latin American e-commerce with an almost 25% market share and 40 million unique monthly visitors, Julie Chariell, a senior analyst at Bloomberg Intelligence, said in a November report. It’s based in Argentina, but almost two-thirds of its $603 million in third-quarter net revenue came from Brazil, according to the company’s financial statements. Its market value more than doubled this year to $29 billion.

The borrower, a unit of MercadoLibre Inc., plans to use the money to triple in about one year its $100 million working-capital portfolio provided to small and midsize companies in Mexico, Martin de los Santos, a senior vice president, said in a phone interview.

The Next SMB Lending Frontier (Nexoos), Rated: AAA

Source: Nexoos

See the full white paper here.

SoftBank pours $ 100M into Mexico’s Konfio (TechCrunch), Rated: A

Three months after Goldman Sachs lent $100 million to Mexican fintech Konfio, SoftBank has invested another $100 million into the financial services company. The investment confirms Reuters’ August report that SoftBank was in advanced talks with the startup — now one of the most heavily funded fintechs in Mexico.

Brazilian FinTech Rebel Lands $ 10M For Affordable Loan Products (PYMNTS), Rated: A

Rebel, a Brazilian FinTech that offers unsecured credit to middle-class citizens in the country, has raised $10 million in new equity funding, according to a press release.

Africa

Consumer credit scoring is the latest African fintech sector to get funding with $ 20 million for Migo (Quartz Africa), Rated: AAA

Migo, a fintech startup offering credit-as-a service to large companies, has raised $20 million in a Series B round led by Brazil-focused venture firm, Valor Capital Group. The round also saw participation from existing investors including The Rise Fund and Velocity Capital. It follows a $13 million Series A round in August last year.

Africa’s fintech boom is creating niche ecosystems to power the industry’s future globally (Quartz Africa), Rated: A

In the inaugural edition the Global Fintech Index City Rankings, four African cities are identified among the top 100 fintech ecosystems globally.

City Global Finech Index City rank
Johannesburg, South Africa 62
Nairobi, Kenya 63
Lagos, Nigeria 71
Cape Town, South Africa 87
Accra, Ghana 123
Kigali, Rwanda 132
Kampala, Uganda 168

Authors:

George Popescu
Allen Taylor

The post Thursday December 5 2019, Weekly News Digest appeared first on Lending Times.

Further reading

The Fidouchies; Fox News vs Paul Singer; music streaming; nation states and much more…

The Fidouchies; Fox News vs Paul Singer; music streaming; nation states and much more...