- Today’s main news: Zuckerberg, Bezos, Gates back Wagestream. Funding Circle plans 300M GBP IPO. P2P lenders take in 300M GBP in second year of IFISA. Hong Kong receives 29 bids for virtual bank licenses.
- Today’s main analysis: Does fintech has a vicious funding circle?
- Today’s thought-provoking articles: Samir Desai discusses Funding Circle’s IPO as plan to conquer America. Q3 lending earnings insights. Sub-prime lenders shrug off Wonga’s political cloud. China’s fintech giants have the clout to dominate.
- Zuckerberg, Gates, Bezos back UK-based Wagestream. This makes sense, but I wonder if they may be thinking that their own employees will be the ones to take advantage of what Wagestream has to offer.
- Samir Desai on Funding Circle’s IPO as a path to conquer America. This is an excellent article with a lot of detail and critical perspective. It discusses more than Funding Circle and UK lending. There is also much to say about international competition, including China, U.S., Asia, and the rest of Europe. A great read.
- Does fintech have a vicious funding circle? This is a great quetion, and an excellent exploration into its answer.
- Q3 2018 Lending Earnings Insights. From PeerIQ.
- Scratch intros loan servicing platform that align interests of lenders and borrowers.
- Funding Circle to raise 300 milliong GBP in London IPO. This is an important IPO. Not just for Funding Circle, but for the online lending industry as a whole. Could it take Funding Circle beyond Europe?
- Funding Circle’s IPO will be open to existing investors.
- Don’t be blinded by Funding Circle’s wizardry.
- Funding Circle to host cryptocurrency event to promote women in fintech.
- Sub-prime lenders shrug off Wonga’s political cloud. After Wonga’s collapse, will there be another online lender to step up and take over the market?
- Kreos Capital is first in line for Wonga payout.
- P2P lenders record taking in 300 million GBP in IFISA’s second year.
- Cash ISA accounts are at an 18-year low.
- County Down Developments gets 250,000 GBP credit facility from Blend Network.
- Casper offered Klarna credit without permission.
- Fintech giants have the clout to dominate. And with the continued crackdown on smaller firms, they are the likely beneficiaries of the clamp down.
- Hong Kong Monetary Authority gets 29 bids for virtual bank licenses.
- Airwallex to seek virtual bank license.
- Banks expect stable earnings growth.
- State banks to boost lending.
- Australia: Wong’a collapse is a warning to Aussie fintechs.
- India: FinUp backs SlicePay.
- Indonesia: Kredivo hits speed bumps on Series B funding.
- International: Robo-advice is not dead.
- Sweden: Instantor opens up bank API.
- Australia: Micro lender makes a big difference.
- Israel: Tel Aviv on top 10 list for entrepreneurial undergrad programs.
- United States
- As Wonga Collapses, Zuckerberg, Bezos & Gates Back A Fairer Alternative To Payday Loans (Forbes), Rated: AAA
- Samir Desai On Funding Circle’s $ 2 Billion IPO And His Plan To Conquer America (Forbes) Rated: AAA
- The Risk of a Vicious Funding Circle in Fintech (Bloomberg) Rated: AAA
- Lending Earnings Insights (2018 Q3) (PeerIQ) Rated: AAA
- Scratch Introduces First Loan Servicing Platform To Align Financial Interests of Lenders and Borrowers (Scratch Email) Rated: A
- United Kingdom
- Funding Circle plans to raise £300m in London IPO (Financial Times), Rated: AA
- Funding Circle IPO will be open to platform’s existing investors (Peer2Peer Finance) Rated: A
- Don’t be blinded by the wizardry of tech darling Funding Circle (London Evening Standard) Rated: A
- Funding Circle to host cryptocurrency event to promote women in fintech (Peer2Peer Finance) Rated: B
- UK sub-prime lenders shrug off political cloud (Nasdaq), Rated: AAA
- Hedge fund Kreos Capital is first in line for Wonga payout deal after lending the collapsed payday loan company around £34m (This is Money) Rated: A
- P2P lenders record £300m intake in second year of the IFISA (P2P Finance News), Rated: AAA
- The end of the Cash Isa? Number of new accounts hits 18-year low (Moneywise), Rated: A
- P2P marketing clampdown ‘may restrict IFISA takeup’ (P2P Finance News), Rated: A
- Northern Irish housebuilder secures £250,000 from P2P platform (Development Finance Today), Rated: A
- Mattress start-up Casper offered credit in UK without permission (Financial Times), Rated: B
- China/Hong Kong
- China’s Fintech Giants Have The Money And Means To Dominate Despite The Wider Slowdown (Forbes), Rated: AAA
- HKMA Receives 29 Bids for First Round of Virtual Bank Licences (Regulation Asia) Rated: AAA
- Tencent-backed Airwallex to join push for Hong Kong virtual bank license (SCMP) Rated: A
- Stable earnings growth expected by mainland banks, but bad-loan worries linger (SCMP), Rated: A
- China’s state banks to boost lending as Beijing fans economy (Nikkei), Rated: A
- European Union
- INSTANTOR OPENS UP BANK API – PROVIDING UNIQUE ACCESS TO HALF A BILLION PEOPLE (Fintech Finance), Rated: B
- Robo-advice not dead: GlobalData (Financial Standard) Rated: A
- Collapse of UK payday lender Wonga sounds warning for Aussie fintech vigilance (Australian Financial Review) Rated:AAA
- Micro lender makes big difference (Latrobe Valley Express) Rated: A
- China’s FinUp, existing investors back digital lending startup SlicePay (VC Circle) Rated: AAA
- Southeast Asia’s startups suffer from Series B funding crunch, says Kredivo’s Gar (Deal Street Asia), Rated: AAA
- Tel Aviv Climbs on List of Top 10 Undergraduate Programs for Entrepreneurs (CTech) Rated: B
As Wonga Collapses, Zuckerberg, Bezos & Gates Back A Fairer Alternative To Payday Loans (Forbes), Rated: AAA
Samir Desai On Funding Circle’s $ 2 Billion IPO And His Plan To Conquer America (Forbes) Rated: AAA
Funding Circle has already facilitated over £5 billion ($6.37 billion) in loans since launching in 2010, mostly from its home U.K. market.
Funding Circle facilitated over £1 billion in loans to small businesses during the first six months of 2018 alone.
It’s now on track to become London’s biggest fintech IPO since global payments giant WorldPay’s bumper £4.8 billion ($6.1 billion) listing in 2015.
In the U.K. just 5% of businesses say Funding Circle when asked where they would go for finance, according to the company’s data, and 95% continue to chose their banks.
The Risk of a Vicious Funding Circle in Fintech (Bloomberg) Rated: AAA
There are fintechs, and then there are fintechs. Cheerleaders point to payments startups like Jack Dorsey’s Square Inc., whose stock has soared 242 percent in a year, as evidence of a Silicon-Valley-style revolution in the making. But there are sob stories, too: loan platforms LendingClub Corp. and On Deck Capital Inc. are still trading well below their IPO prices. Promises of break-neck expansion often crash into the reality of regulated finance.
Lending Earnings Insights (2018 Q3) (PeerIQ) Rated: AAA
We remain in the late stages of the credit cycle. The US consumer has benefitted from record low unemployment, rising incomes and home prices, and a lower tax rate. The supply of credit and competition to offer loans is increasing. Lenders are optimistic about consumer spending and debt levels, and are reserving for potentially higher losses in the future.
We see divergent credit performance across FinTech asset classes. Enova (Subprime) and OnDeck (Small Biz) are seeing near cycle-low charge-offs, while LendingClub (Prime) is seeing higher delinquencies on newer vintages. LendingClub also increased its charge-off estimates across loan grades by ~40 bps QoQ.
Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. Loan loss provisions are increasing at roughly twice the rate of loan growth across card issuers, but overall reserve levels are still low.
Scratch Introduces First Loan Servicing Platform To Align Financial Interests of Lenders and Borrowers (Scratch Email) Rated: A
Scratch, a new financial technology company started in 2015 to transform the antiquated business of getting America’s $13 trillion household debt repaid, introduced the first loan servicing platform to align the financial interests of lenders and borrowers.
The Scratch loan servicing platform empowers borrowers with a simple web application for understanding, managing and paying back their loans while providing lenders accurate, real-time portfolio insights. And, by automating the back-office complexities of loan management, Scratch can devote more resources to giving borrowers the attention and guidance they deserve.
Loan Servicing Crisis Persists
U.S. household debt composed of mortgages, student loans, auto loans, credit cards, home equity lines of credit, and other consumer loans, is at an all-time high and growing daily.
Today, household debt is at a high of $13 trillion and 8 out of 10 Americans carry some type of debt, including mortgages, credit cards, student loans, and auto loans. And everyone who has a loan has a loan servicer.
Funding Circle plans to raise £300m in London IPO (Financial Times), Rated: AA
Funding Circle has announced plans to become the first of Britain’s new generation of financial technology companies to go public, in a deal expected to raise £300m and value the peer-to-peer lender at more than £1.5bn.
The initial public offering of Britain’s biggest peer-to-peer lender will provide a significant test of investor appetite for the breed of fintechs that have sprung up in the past decade to challenge high-street banks. Funding Circle has arranged £5bn of loans to small companies in the UK, the US, Germany and the Netherlands since its launch in 2010 by connecting businesses looking to borrow money with retail and institutional investors willing to lend them money.
However, the company’s prospective value of more than £1.5bn is above the current value of US-listed peers OnDeck and Lending Club, which have both suffered tumbling share prices since their lPOs.
Funding Circle IPO will be open to platform’s existing investors (Peer2Peer Finance) Rated: A
FUNDING Circle has said it expects its existing investors will be able to become shareholders in the company after it goes public.
Funding Circle said that its initial public offering (IPO), if it goes ahead, would aim to raise around £300m, with at least 25 per cent of the company’s issued share capital to be placed on a free float.
In a blog post on its website, also on Monday, the P2P lender said that its customers would have the opportunity to apply to participate in the IPO and become a shareholder in Funding Circle via an intermediaries offer.
Don’t be blinded by the wizardry of tech darling Funding Circle (London Evening Standard) Rated: A
Given that Funding Circle’s flotation comes just days after the collapse of that other trailblazing fintech, Wonga, it’s hard not to compare the two.
Both were launched to fill the gaps in the lending market where traditional banks feared to tread. Both used tech wizardry to check they were lending to the right people at the right price. Both brilliantly deployed digital technology to make their services simple and fast to use.
Hopefully, for future investors, the similarities end there.
Funding Circle to host cryptocurrency event to promote women in fintech (Peer2Peer Finance) Rated: B
FUNDING Circle is to host a panel event focusing on cryptocurrency, described by the organisers as “one of the most interesting but least understood areas of fintech.”
The event is being held in connection with FinTechWomen, a London-based meet-up group, and is sponsored by Funding Circle.
UK sub-prime lenders shrug off political cloud (Nasdaq), Rated: AAA
UK sub-prime investors are shrugging off Wonga’s cloud. Customer complaints and a regulatory clampdown forced the payday lender to stop making loans. The likes of Amigo Holdings and Non-Standard Finance have different models, and regulators’ blessing. Yet, with Wonga out of the picture, they too risk becoming the focus of public ire.
Investors love it. Amigo’s return on equity will be around 40 percent this year, using Thomson Reuters I/B/E/S, while it and Non-Standard Finance should grow revenue on average by more than 20 percent each year up to 2021, analysts reckon. NSF, which has a more diversified business including unguaranteed loans, is valued at over 17 times forward earnings. Amigo’s shares were priced at 12 times forward earnings even after a selloff promoted by disappointing results on Thursday. The consumer finance sector on average trades at less than 11 times forward earnings, according to Eikon.
Hedge fund Kreos Capital is first in line for Wonga payout deal after lending the collapsed payday loan company around £34m (This is Money) Rated: A
A Mayfair hedge fund is at the front of the queue to be paid by collapsed Wonga as fears grow that thousands of its hard-up customers will get nothing.
Kreos Capital lent Wonga about £34million two years ago and is understood to be still owed around £10million by the payday loan company.
Under the arrangement, it is thought to be in line to collect that sum ahead of other creditors.
P2P lenders record £300m intake in second year of the IFISA (P2P Finance News), Rated: AAA
ALMOST £300m was invested across Innovative Finance ISAs (IFISA) in the previous tax year, HMRC data reveals.
The latest ISA statistics from the taxman shows £290m of subscriptions in IFISA for the 2017/2018 tax year across 31,000 accounts.
P2P lenders saved £9,355 on average.
Zopa revealed it received more than £150m in its IFISA during the previous tax year.
The end of the Cash Isa? Number of new accounts hits 18-year low (Moneywise), Rated: A
The data shows that savers subscribed to 10.8 million Isa accounts during the 2017-18 tax year, down from 11.1 million in the previous tax year. This represents a fall of 10%.
P2P marketing clampdown ‘may restrict IFISA takeup’ (P2P Finance News), Rated: A
Stuart Law, who heads up the business P2P lender, warned that the strong take-up of the IFISA could be hampered by the FCA’s proposed marketing restrictions for the sector.
Under the proposed changes, platforms would be restricted to marketing to those who are certified as sophisticated or high-net-worth investors or those that certify that they will not invest more than 10 per cent of their net portfolio in P2P agreements.
Northern Irish housebuilder secures £250,000 from P2P platform (Development Finance Today), Rated: A
The loan from Blend Network came after the housebuilder was turned down for a loan by Barclays.
Mattress start-up Casper offered credit in UK without permission (Financial Times), Rated: B
A US online mattress start-up backed by rapper 50 Cent has been forced to stop offering credit to UK customers, after it emerged it had been doing so without permission from the regulator.
Casper, a five-year-old company that is on a major European expansion drive, was allowing UK customers to buy on credit from Swedish bank Klarna.
China’s Fintech Giants Have The Money And Means To Dominate Despite The Wider Slowdown (Forbes), Rated: AAA
HKMA Receives 29 Bids for First Round of Virtual Bank Licences (Regulation Asia) Rated: AAA
Standard Chartered, WeLab, Zhong An Bank and HKT among several banking, technology and telecom firms applying for virtual banking licenses.
Twenty-nine financial and technology firms, including Standard Chartered and WeLab have submitted applications to obtain Hong Kong’s first online-only banking licenses.
The company shifted its headquarters to Hong Kong from Melbourne earlier this month as it prepares to submit a virtual banking license application, along with partners, ahead of Friday’s deadline.
Airwallex co-founder and chief executive Jack Zhang said the company will team up with a traditional bank and other local partners as part of the application process, although he declined to reveal their identities.
Another reason for the relocation to Hong Kong is proximity to major clients, including Tencent, online travel operator Ctrip, e-commerce JD.com as well as traditional lender Bank of East Asia.
And Beijing’s crackdown on the peer-to-peer lending sector – the shadow banking system that saw rampant illicit and risky behaviour continue in the first half of this year – has helped increase demand for corporate lending levels too.
The country’s big four banks – Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of Chinaand Bank of China – reported profit rises of between 5.2 and 7.9 per cent in the three months ending June.
China’s state banks to boost lending as Beijing fans economy (Nikkei), Rated: A
First-half earnings showed the lenders rallying after several years of low growth. Collective net profit rose 5.7% year on year to 532.1 billion yuan ($77.9 billion), while the lenders’ average ratio of bad debt fell 0.06 percentage point in six months to 1.52% at the end of June.
INSTANTOR OPENS UP BANK API – PROVIDING UNIQUE ACCESS TO HALF A BILLION PEOPLE (Fintech Finance), Rated: B
Today Instantor, the Swedish fintech company making financial decisions easy, announces, WDSK, The World Domination Starter Kit. The WDSK is an initiative to support start-ups and scale-ups to develop next-generation products by giving them access to Instantor´s Bank API with no associated costs for new Instantor customers. By using Instantors bank API, developers will have access to transactional data from over 300 banks in 25 countries, with the potential to reach half a billion people. Instantor´s bank API has an unrivaled reach, and the WDSK initiative includes access to several markets outside new Open Banking legislation. The authentication and the end user’s interaction with banks are handled by Instantor, and the data can be accessed once the end user has given their consent.
Robo-advice not dead: GlobalData (Financial Standard) Rated: A
The analyst suggested robo-adviser may be ahead of their time, given high net-worth demand for robo-advice is on the rise among the next generation of investors.
“While robo-advice is here to stay, it will take time to cement itself. The digitally-savvy next generation will embrace an automated service and big banks should capitalize on this. However, a big brand is not enough to justify much higher fees,” Woldemichael said.
To succeed, incumbents will have to provide a level of service, and prices, that are genuinely competitive with those offered by startups.”
Collapse of UK payday lender Wonga sounds warning for Aussie fintech vigilance (Australian Financial Review) Rated:AAA
The collapse of Wonga, one of Britain’s most high-profile fintech lenders, provides salient lessons for Australia, which considers the UK a template for financial technology policy and where tighter laws to protect vulnerable customers from payday lenders appear to have stalled.
Wonga, built around a slick app allowing customers to get expensive loans via their mobile phone, was “notorious for its extortionate interest rates and was a toxic symbol of Britain’s household debt crisis”, said The Guardian last week.
The payday lender “failed because it was too greedy and at times crossed the ethical line”, it said, quoting prominent UK financial columnist Martin Lewis, who described Wonga’s loans as “the crack cocaine of debt – unneeded, unwanted, unhelpful, destructive and addictive”.
Micro lender makes big difference (Latrobe Valley Express) Rated: A
Her heartfelt story was told at Good Money’s one-year anniversary last week during what Carol described as a “life-changing event” after borrowing money to buy essential appliances like a new fridge and washing machine.
The low to no-interest lender was set up in July last year in partnership with Good Shepherd Microfinance and the National Australia Bank, following a $2.3 million investment from the state government.
More than 2900 people made enquiries in the hub’s first year, and the store has provided more than 500 no and low-interest loans for household appliances, car-related expenses, household furniture and costs such as medical and education expenses.
China’s FinUp, existing investors back digital lending startup SlicePay (VC Circle) Rated: AAA
SlicePay, a digital lending platform which caters to college students and young professionals, has raised an undisclosed amount in an extended Series A round of funding led by Chinese firm FinUp Finance Technology Group.
The company said in a statement that existing investors Blume Ventures, Japan’s Das Capital, and Russia’s Simile Ventures had also participated in the round.
A person close to the development who did not wish to be named pegged the deal at $14.9 million (around Rs 105 crore at current exchange rates).
Southeast Asia’s startups suffer from Series B funding crunch, says Kredivo’s Gar (Deal Street Asia), Rated: AAA
Having recently raised what is estimated to be the largest Series B funding round for a fintech firm in Southeast Asia, Indonesia-focused lending platform Kredivo says the process was far from smooth sailing.
The company was forced to look beyond the region to raise the majority of its fund, as it found that there were simply very few investors in the region that specialized in doing Series B investments.
Tel Aviv University is among the top ten global undergraduate programs in terms of producing venture capital-backed entrepreneurs, according to a report published last week by Seattle-based market research company Pitchbook. Pitchbook ranked Tel Aviv in eighth place, up from ninth last year, above Yale, Princeton, and Brown.
Two other Israeli universities made the top 50 list: the Technion-Israel Institute of Technology came in at 14, while the Hebrew University of Jerusalem placed at 35.
News Comments Today’s main news: Clarity Services integrates with Experian. Octopus Choice passes 100M GBP AUM. Funding Circle hits 100M Euro in German lending. Younited Credit tops 100K loans. Square Peg invests $8M in Airwallex. Silver Bullion hits $50M in loans. Today’s main analysis: The deteriorating auto loan quality. Today’s thought-provoking articles: China’s startup investors are a bunch of “cashed-up […]
- Today’s main news: Clarity Services integrates with Experian. Octopus Choice passes 100M GBP AUM. Funding Circle hits 100M Euro in German lending. Younited Credit tops 100K loans. Square Peg invests $8M in Airwallex. Silver Bullion hits $50M in loans.
- Today’s main analysis: The deteriorating auto loan quality.
- Today’s thought-provoking articles: China’s startup investors are a bunch of “cashed-up cowboys.” Chinese borrow a lot from multiple lenders. How China’s war on risk benefits U.S. companies. Online banking, payments solutions coming down the pike. How M-Pesa is transforming money for the poor in Africa.
- Clarity Services integrates completely with Experian. AT: “A letter to Clarity Services suppliers explains Experian invoicing.”
- Max Levchin explains, again, how Affirm is different from credit cards. AT: “I don’t understand why this is confusing. It isn’t Levchin’s communication skills.”
- Moody’s sends warning about deterioriating auto loan quality. AT: “Goes broader than auto lending, but it connects auto loan quality to the broader economy. A great read.”
- Square doesn’t want to be lumped in with Amazon, Facebook. AT: “I can’t blame them.”
- Interview with Levi King of Nav.
- Why traditional financial advisors should not fear artificial intelligence.
- America’s gig economy workers. AT: “This is very telling. More than a third of American workers are in the gig economy. Of course, most of them are part-time and/or earn less than $500/month. So the question is, are these workers prime targets for online lending products, and, if they’re entrenched in the gig economy, does that mean the way to reach them is through online channels?”
- $287M restitution sought in CashCall case.
- How to create the best B2B customer experience.
- Why P2P lending is an interesting investment. AT: “Very basic.”
- Cayan being acquired.
- Octopus Choice now has more than 100M GBP under management. AT: “Congratulations. Great achievement.”
- Assetz Capital changes Great British Business, green energy accounts.
- Ranger Direct Lending provides $9.1M for Argon Credit.
- ThinCats launches updated website, rebranding.
- Goji makes new appointments.
- Startup investors are ‘cashed-up cowboys’. AT: “Perhaps there was a natural tendency to favor their own despite the evidence of overvaluation. It’s not like we haven’t seen similar tendencies in the U.S.”
- Borrowers still target multiple online lenders. AT: “The interesting thing here is the indication of attempts to profit from lending arbitrage.”
- Fintech IPOs don’t dazzle Wall Street.
- Funding Circle lends 100M Euro in Germany. AT: “Congratulations.”
- Younited Credit issues 100K loans. AT: “Congratulations.”
- BorsadelCredito.it raises 1.6M Euro.
- DreamQuark wins Fintech of the Year award.
- Chairman appointed to National Personal Credit Platform.
- Airwallex secures $8M investment from Square Peg.
- Chatbot home loan advice is diversified.
- Challenger banks are okay, but need improvement.
- Silver Bullion hits $50M in lending.
- Amartha focuses on P2P lending for women entrepreneurs.
- Affin Islamic Bank’s latest sponsored volume on IAP.
- United States
- Integration of Clarity Services by Experian (Clarity Services Email), Rated: AAA
- PayPal Co-Founder Max Levchin Gave a Remarkably Honest Response to Accusations About His New Startup (Inc.), Rated: AAA
- Moodys Warns Of Deteriorating Auto Loan Quality (ValueWalk), Rated: AAA
- Square to small banks: Don’t lump us in with Amazon and Facebook (American Banker), Rated: A
- Levi King of Nav (Lend Academy), Rated: A
- Traditional FAs Shouldn’t Fear AI (Financial Advisor IQ), Rated: A
- Working in America’s gig economy (Multibriefs), Rated: A
- Consumer board seeks $ 287 million in restitution over CashCall case (Northern California Record), Rated: A
- How To Build The Best B2B Customer Experience (Forbes), Rated: A
- Interesting Investments: Peer-to-Peer Lending (Equities.com), Rated: A
- Boston Fintech Company Cayan Is Getting Acquired for $ 1.05B (Bostinno), Rated: B
- United Kingdom
- Octopus Choice passes £100m AUM (AltFi), Rated: AAA
- Assetz Capital Makes Changes to the Great British Business & Green Energy Accounts (Crowdfund Insider), Rated: A
- Ranger Direct Lending makes further $ 9.1m provision for Argon Credit (AltFi), Rated: A
- ThinCats Reveals New Branding, Launches Updated Website (Crowdfund Insider), Rated: B
- Goji – Empowering Direct Lending (LinkedIn), Rated: B
- China’s Wild Bunch: Startup Investors Are Cashed-Up Cowboys (WSJ), Rated: AAA
- Borrowing From Multiple Online Lenders Remains Prevalent (Caixin), Rated: AAA
- China’s war on risk hands US$ 121b loan market to big firms (The Malay Mail Online), Rated: AAA
- Chinese FinTech IPOs Don’t Dazzle Wall Street (PYMNTS), Rated: A
- European Union
- Funding Circle hits €100m lending milestone in Germany (P2P Finance News), Rated: AAA
- C’est Génial! Younited CREDIT Tops 100,000 Loans (Crowdfund Insider), Rated: AAA
- BorsadelCredito.it Raises €1.6M in Funding (FinsSMEs), Rated: A
- DreamQuark wins the 2017 Fintech of the Year (Digital Journal), Rated: B
- National Personal Credit Platform Appoints Chairman (Caixin), Rated: B
- Online Banking and Payments: Innovative Solutions on the Horizon (FinsSMEs), Rated: AAA
- How Banks Are Leveraging Chatbots for Customer Service (Crowdfund Insider), Rated: A
- Digital investments: Modern ways to invest in the digital age (Bankless Times), Rated: A
- Australia/New Zealand
- Australian Fintech Airwallex Secures $ 8 Million Investment From Square Peg (Crowdfund Insider), Rated: AAA
- Testing a chatbot’s home loan advice gives a range of outcomes (Stuff), Rated: A
- Regulatory Pathway for Challenger Banks Just OK, Could be Improved (Crowdfund Insider), Rated: A
- 5 Consumer Lending Trends To Look Forward To In 2018 (Inc42), Rated: AAA
- Unique Secured P2P Lender Silver Bullion Reaches $ 50 Million in Loans (Crowdfund Insider), Rated: AAA
- Amartha Powers Micro Peer to Peer Lending in Indonesia, Focuses on Women Entrepreneurs (Crowdfund Insider), Rated: A
- Affin Islamic Bank lists latest sponsored venture on IAP (New Straits Times), Rated: A
- Payday lenders squeezed by new regulations (The Globe and Mail), Rated: B
- A mobile banking service is transforming how the poor transfer money — here’s how it works (Business Insider), Rated: AAA
Integration of Clarity Services by Experian (Clarity Services Email), Rated: AAA
As a supplier to Clarity Services Inc, we are writing to formally notify you that as of October 6, 2017, Clarity Services Inc has been purchased by Experian Holdings, Inc.
Effective January 1, 2018, purchases and invoice payments will be processed by Experian’s centralized Procurement and Accounting departments.
PayPal Co-Founder Max Levchin Gave a Remarkably Honest Response to Accusations About His New Startup (Inc.), Rated: AAA
To its critics, though, Affirm, which recently raised $200 million in a growth round, is engaged in something sinister, luring people into a financial trap by enticing them to buy things they can’t afford. CEO Max Levchindoesn’t agree with that interpretation at all, but he does accept some of the blame for not creating a more accurate perception.
Here’s how Affirm works: You can borrow money to make a purchase at any store that integrates with Affirm (or any store at all if you use the mobile “virtual card”). If Affirm’s proprietary credit model judges that you’ll be able to pay back the sum, then you’re offered a loan. During the next several months — up to a year — you’re expected to make monthly payments, which include interest. The APRs range from 10 to 30 percent.
The key things that differentiate Affirm from other credit options are that you get all of the information up front, stated plainly, and the interest charged by the startup is simple rather than compounding. When you make the initial purchasing decision, you know exactly how much extra you will end up paying to buy the product right now, instead of saving up over several months. There are no additional fees.
Moodys Warns Of Deteriorating Auto Loan Quality (ValueWalk), Rated: AAA
The economy is expected to expand in 2018, with projections for stock market performance clocking in at 8% basis Goldman Sachs. But not all is well – a Moody’s report notes that specific asset sectors are struggling, particularly when it comes to car loan quality worsening.
Moody’s anticipates that US GDP growth will strengthen slightly to 2.3% in 2018 from 2.2% in 2017, with unemployment also continuing to move lower to 4.0% from 4.4%.
Auto loan quality is worst, but pockets of “challenged” loans exist across the board
Auto loan ABS issuers will likely securitize pools with attributes broadly similar overall to those in the pools backing their 2017 securitizations, even as a further decline in US auto sales pressures lenders to loosen underwriting to support volumes. We project sales will slip another 0.6% after an estimated 3.6% drop in 2017, following eight consecutive years of annual increases.
Auto loans appear to be on the front-lines of credit issues. Household debt, for instance, has increased to $13 trillion, with a significant part of that increase in auto loans. Sub-prime auto loans, in particular, are showing signs of weakness.
When looking at investment in asset-backed securities, the originator makes a difference. ABS backed by loans from online lenders such as SoFi, Lending Club Corporation, Prosper Marketplace Inc. and Marlette Funding have correlated with “prime credit quality.” But that is not the case across the board.
Square to small banks: Don’t lump us in with Amazon and Facebook (American Banker), Rated: A
Square, the Silicon Valley payment processor that is at the center of the fight over the tech industry’s ambitions in banking, is firing back at its small-bank critics, while also taking steps to placate community activists.
Advocacy groups that once expressed concern about the adequacy of Square’s plan to satisfy its obligations to low- and middle-income customers are now sounding more supportive of the fintech’s bid to open a bank.
Levi King of Nav (Lend Academy), Rated: A
In this podcast you will learn:
- Levi’s background that led to the founding of Nav.
- The products that Nav offers today.
- How their business model works.
- How they get small business owners interested in finance.
- How Nav saves their customers money.
- Why Levi thinks that small business owners may not need to be educated on finances in the future.
- Their approach to producing content on their site.
- The marketing channels they use to attract small business owners.
- Levi’s thoughts on the entry on Amazon, PayPal and Square into small business lending.
- Why proprietary data sets are going to be so important going forward.
- The story behind the Nav brand and why they rebranded a couple of years ago.
- The big name equity investors they have and how they closed their funding rounds.
- What the future holds for Nav.
Traditional FAs Shouldn’t Fear AI (Financial Advisor IQ), Rated: A
Traditional wealth managers are convinced the advent of robo-advisors and artificial intelligence threatens the jobs of financial services professionals, Wendy Spires writes on WealthBriefing. But the reality is that the high-touch business of financial advice stands to benefit from AI, as do its traditional practitioners, she writes.
For example, while 71% of wealth managers believe financial advice clients are prepared to accept advice from robo-advisors, the reality is different, she writes. Self-directed investing, for example, dropped from 45% in 2010 to 38% in 2016 — during a time when the number of robos and the services they offer expanded significantly, according to Spires.
Working in America’s gig economy (Multibriefs), Rated: A
“The gig economy … is now estimated to be about 34 percent of the workforce and is expected to be 43 percent by the year 2020,” notes Intuit CEO Brad Smith. “We think this points to a lot of growth as we look ahead.”
Based on the most recent demographic data available from the Bureau of Labor Statistics, it appears the gig workforce is fairly evenly distributed across the age spectrum, but the highest percentages are seen at opposite ends of the scale. Individuals 65 years and older had the highest level of self-employment at 24.1 percent, while those under 35 (the so-called millennial generation) made up 18 percent.
BLS data reveals a few more interesting statistics concerning the gig workforce:
- Men are almost twice as likely as women to be self-employed.
- More than 30 percent of gig workers possess professional or advanced degrees.
- Whites and Asians are marginally more engaged in gig work than are other racial or ethic groups.
In fact, data crunched by online lender Earnest and reported by Priceonomics indicates that about 85 percent of gig workers make less than $500 per month.
Consumer board seeks $ 287 million in restitution over CashCall case (Northern California Record), Rated: A
A Nov. 20 hearing featured the Consumer Financial Protection Bureau calling CashCall a purveyor of “financial snake oil” and arguing the online lender should pay as much as $287 million because they deceived customers.
How To Build The Best B2B Customer Experience (Forbes), Rated: A
In order to build the best B2B customer experience, companies should focus their effort on four principles:
- Invest in digital systems. Financial technology start-up Kabbage leverages new technology to approve small business loans in just seven minutes—a huge improvement over the 20 days it takes a typical bank. By simplifying the loan application process for web and mobile, Kabbage allows customers to apply for loans within minutes from anywhere in the world, which relieves a huge pain point for small businesses.
- Leverage data.
- Customize the experience.
- Use omnichannel to see the big picture. In fact, the average B2B customer uses six different channels as they make a decision. Customer experience happens in many places, which means companies need to create a consistent omnichannel experience.
Interesting Investments: Peer-to-Peer Lending (Equities.com), Rated: A
Peer-to-peer (P2P) lending, also known as peer lending, crowdlending, or social lending, is essentially what it says on the tin: lending money to another in an unsecured loan.
Prosper, one of the bigger companies managing P2P lending, has seen a fairly consistent return of about 9 percent through 2014, with a dip to 6.6 percent in 2012. Lending Club has seen a rise from 4.9 percent in 2009 to about 8 percent in 2014. All told, not bad ROIs.
First, you must be at least 18 years old, with a Social Security number, and live in an eligible state to even consider investing. Then, some states require that you have a minimum $70,000 gross income ($85,000 for California), and a minimum net worth of $70,000. You may not be able to invest more than 10 percent of your net worth. However, if your net worth is at least $250,000, there is no minimum income requirement.
Boston Fintech Company Cayan Is Getting Acquired for $ 1.05B (Bostinno), Rated: B
Cayan, a payment processing company that has been around the Boston fintech scene for the last 19 years, is in the process of getting acquired by Total System Services in an all-cash transaction valued at approximately $1.05 billion. The transaction is expected to close in the first quarter of 2018.
Octopus Choice passes £100m AUM (AltFi), Rated: AAA
Octopus Choice has passed £100m of assets under management, following on from the launch of its Innovative Finance ISA in the summer.
Assetz Capital Makes Changes to the Great British Business & Green Energy Accounts (Crowdfund Insider), Rated: A
On Monday, online lending platform Assetz Capital announced it is doing away with the Great British Business Account (GBBA) and the Green Energy Account (GEA).
China’s Wild Bunch: Startup Investors Are Cashed-Up Cowboys (WSJ), Rated: AAA
In the first 11 months of this year, 3,418 new venture-capital and private-equity funds in China raised 1.6 trillion yuan ($241.76 billion), more than double the amount of 2015 and more than 10 times that of 2006, according to consultancy Zero2IPO Group. It estimates about 12,000 investment firms manage 8.5 trillion yuan in capital, an increase from 8,000 firms managing 5 trillion yuan in 2015.
Out of 221 unicorns in the world, 59 are in China, according to CB Insights. While that may lag behind the 127 from the U.S., it’s ahead of the U.K.’s 12 and India’s nine. Many Chinese investors want to invest in Silicon Valley because they think the valuations there are more reasonable.
Government agencies and local governments have announced 1,040 venture funds since 2015 aiming to raise about 8 trillion yuan, according to Zero2IPO. Much of the money is used to lure businesses to set up local offices, to help boost employment and tax revenues. The Hubei Province’s 200 billion yuan fund is believed to the largest of its kind.
Borrowing From Multiple Online Lenders Remains Prevalent (Caixin), Rated: AAA
In China, online lenders or peer-to-peer (P2P) platforms that only facilitate lending do not have full access to borrowers’ credit information as there is no such centralized platform that shares the data.
Some borrowers take advantage of this information asymmetry to apply for loans from multiple lenders so they can roll over previous debts elsewhere, or to take out cheaper loans to repay the ones that charge higher interest rates and profit from the difference, or even become lenders on other P2P platforms themselves, according to a study by the Beijing Internet Finance Industry Association.
The association’s recent report found that among the 61 online lenders surveyed, 44% of their customers on average had borrowed from multiple sources.
The survey found that nearly 500,000 borrowers tried to profit from arbitrage by taking advantage of the different interest rates charged by different online lenders. On average, each of them borrowed from 2.36 online lenders, the survey said.
China’s war on risk hands US$ 121b loan market to big firms (The Malay Mail Online), Rated: AAA
China’s whac-a-mole approach to risk — hit it everywhere it pops up — is set to hand control of the surging US$121 billion technology-driven lending market to a small group of leaders such as Lufax Holding and the finance affiliate of Jack Ma’s Alibaba Group Holding Ltd.
Macquarie estimates credit extended by China’s fintech firms will jump more than seven-fold by 2022 to 6.2 trillion yuan (RM3.8 trillion) to pay for things like luxury and household goods or training and education. About half that market is micro-lending — typically small, short-term loans with high interest rates, Macquarie says.
China’s 10 biggest fintech companies account for 36 percent of all loans, said Dexter Hsu, a Taipeh-based Macquarie analyst. Tighter regulation could erode China’s more than 2,000 online micro-lenders and so-called P2P platforms, which directly match borrowers with investors, to less than 200, he said.
Chinese FinTech IPOs Don’t Dazzle Wall Street (PYMNTS), Rated: A
Newly listed Chinese FinTech companies in the U.S. are struggling on Wall Street, leaving investors with unexpected losses and posing as a setback to other Chinese firms hoping to go public.
“The quality of the businesses were either too early [to go public], untested or just poor,” said Anh Lu, an equities portfolio manager at T. Rowe Price in Hong Kong. “And they were asking for very high valuations on top of that.”
Funding Circle hits €100m lending milestone in Germany (P2P Finance News), Rated: AAA
FUNDING Circle has hit the €100m (£88.2m) loans milestone in Germany just two years after launch in the country.
The business lending platform says 3,000 investors have backed 1,100 German businesses and created more than 2,000 jobs since 2015.
The platform entered the European market following its acquisition of German platform Zencap in 2015. It now has operations in the UK, US, Germany and the Netherlands.
C’est Génial! Younited CREDIT Tops 100,000 Loans (Crowdfund Insider), Rated: AAA
Younited Credit has just surpassed 100,000 in loans since platform inception. The Paris based online lender (formerly named Pret d’Union) reported an accelerating rate of loan originations as the number has doubled since September 2016 when total loans stood at 50,000. The platform provides loans from €1000 to € 40,000. To date, Younited Credit has originated over € 650 million in loans.
BorsadelCredito.it Raises €1.6M in Funding (FinsSMEs), Rated: A
BorsadelCredito.it, a Milan, Italy-based fintech startup, raised €1.6m in funding.
The round was led by P101 Ventures, with participation from Azimut Enterprises Holding, GC Holding, Banca Popolare di Fondi and private investors.
DreamQuark wins the 2017 Fintech of the Year (Digital Journal), Rated: B
A startup company called DreamQuark, which produces Artificial Intelligence applications for financial services, has been awarded the Finance Innovation ‘Fintech of the Year’ prize.
National Personal Credit Platform Appoints Chairman (Caixin), Rated: B
The chairman of a wholly-owned central bank subsidiary, Zhu Huanqi, has been appointed chairman of a planned national personal credit-information platform, Caixin has learned from sources familiar with the matter.
Online Banking and Payments: Innovative Solutions on the Horizon (FinsSMEs), Rated: AAA
In the near future, online banking and payments will go through some fascinating changes beyond what has already happened over the past several years.
Advanced Mobile Payments
Today, there is increasing demand for biometric authentication apps. To ensure that consumers get what they want, MasterCard is going a step further by developing facial identification, voice recognition, and even cardiac rhythm programs. These innovative solutions will enhance the mobile payment experience for customers and retailers alike.
Growing Opportunities for Mobile Wallets
Back in 2014, Apple was the only real contender for mobile wallets. Within just one year, others followed their lead, including Samsung and Google. Then, in just a short amount of time, more big-name players joined in, such as Chase, Amazon, and Walmart. However, that was not the end. Even social media platforms started offering online payment options. With sites like Facebook that have mobile wallet solutions, people can send money and make payments.
Another prediction is that by 2025, 75 percent of all transactions will be made using mobile wallets rather than actual cash.
Greater Demand for Digital Remittances
For instance, a San Francisco-based company founded in 2001 called Xoom has experienced amazing growth because of digital remittances. In fact, it passed up MoneyGram, which speaks volumes.
Growth Potential with Peer-to-Peer Lending
For instance, having originated loans over $20 million since being founded, Lending Club ranks as one of the fiercest competitors in this arena.
How Banks Are Leveraging Chatbots for Customer Service (Crowdfund Insider), Rated: A
Bank of America: Erica
In October of 2016, Bank of America unveiled Erica, their new AI chatbot. Available in the bank’s mobile app, Erica can work with voice and text commands.
Erica uses machine learning and specially-designed algorithms to provide Bank of America services that were typically reserved for the bank’s top-tier customers. As an example, it could recommend a way to pay down more on your credit card debt to save on interest payments. Or if your checking account is close to being overdrawn, it could contact you to recommend a transfer from your savings account.
Customers can access Nina from the bank’s website, and it can understand a wide range of text requests using specially designed Natural Language Understanding technology.
In the first three months after Nina’s release, the software was handling an average of 30,000 customer interactions per month. Of those early interactions, Nina was able to provide a resolution rate of 78%.
Capital One: Eno
Eno from Capital One is a chatbot program that works through SMS messaging.
You can use this AI chatbot to check the balance on your accounts, see your available credit, track recent transactions, pay bills, and more.
The Wells Fargo virtual assistant is a chatbot that the bank recently released for use with Facebook Messenger. Once a customer enrolls their account, they can then use Messenger to contact the virtual assistant for basic tasks like tracking recent transactions, balance inquiries, and finding the nearest ATM.
Digital investments: Modern ways to invest in the digital age (Bankless Times), Rated: A
The internet has brought about all kinds of new ways to invest one’s money.
- Peer-to-peer lending – You’re best off using a well-established site such as Ratesetter.
- Micro-investment apps – Some apps round up all of your expenses to the nearest dollar and then put the leftover change into an account (for example, if a cup of coffee costs $3.14, this will be rounded up to $4 and the $0.86 extra change will be put into the account).
- Social media shares
Australian Fintech Airwallex Secures $ 8 Million Investment From Square Peg (Crowdfund Insider), Rated: AAA
Less than one year after securing $13 million during its Series A funding round, Aussie fintech startup Airwallex announced it has received an $8 million investment from Paul Bassat’s Square Peg.
Testing a chatbot’s home loan advice gives a range of outcomes (Stuff), Rated: A
A mortgage broking firm is offering an AI chatbot to help first-home buyers understand some of the basics – but an experiment shows you shouldn’t put too much faith in any online calculators’ estimates of how much you might be able to borrow.
Squirrel has launched Alan, an online tool that answers questions like “how much deposit do I need”, “what’s an auction” and “how much can I borrow?”
Regulatory Pathway for Challenger Banks Just OK, Could be Improved (Crowdfund Insider), Rated: A
FinTech Australia has provided a comment onthe consultation paper published in August regarding authorising new entrants into the banking industry. The creation of digital challenger banks in Australia is a welcomed move but, according to FinTech Australia, needs some improvement.
5 Consumer Lending Trends To Look Forward To In 2018 (Inc42), Rated: AAA
This amendment to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 is a step towards standardisation and providing a visible digital identity, thereby promoting transparency in financial transactions. Another factor that is pushing financial transparency is the rise of Fintech and the subsequent new-age companies that are offering digital avenues for finance such as payment platforms, blockchain companies, alternative financers like P2P lenders and so on.
Consumer Lending Trends To Look Forward To In 2018
Alternative Lending Boom
New service providers will serve the underserved and unserved, meeting the unmet demand. We will continue to see the rise of direct lending as well as P2P lending, marketplaces, crowdfunding platforms etc.
Ease Of Access To Credit
Credit will continue to grow, thanks to the alternative lending boom. One such burgeoning space is the Line of Credit. It has gained momentum in 2017 with the metros being early adopters and is expected to expand into tier 2 & tier 3 cities in 2018.
The Rise Of InsurTech
Investment In Emerging Technologies
Blockchain will expand in putting together smart contracts, and digital identification. Already, FinTech investments in Asia increased to $5.4 billion in 2016, up 12.5% from $4.8 billion in 2015, driven mainly by China and India.
Government And Regulatory Push For Fintech
Unique Secured P2P Lender Silver Bullion Reaches $ 50 Million in Loans (Crowdfund Insider), Rated: AAA
Silver Bullion, a peer to peer lending platform based in Singapore, has reached $50 million in loan originations. The unique platform that provides secured lending based off of bullion saw more than double the lending volume in 2017 versus year prior.
Amartha Powers Micro Peer to Peer Lending in Indonesia, Focuses on Women Entrepreneurs (Crowdfund Insider), Rated: A
Amartha Founder & CEO, Garuda Typhoon Andi Putra recently commented;
“Since its establishment, Amartha has been committed to connecting the unbanked micro entrepreneurs, and investors who want to add this asset investment in a sector that is more profitable and socially valuable. The uniqueness lies in the micro-entrepreneurs or Amartha Partners, all of which are women. Today, more than 72,000 women micro entrepreneurs throughout Indonesia have enjoyed our services, with a total fund distributed more than 200 billion rupiah (US $ 15 million). “
Affin Islamic Bank lists latest sponsored venture on IAP (New Straits Times), Rated: A
KUALA LUMPUR: Affin Bank Bhd’s wholly owned subsidiary, Affin Islamic Bank Bhd, has today listed its latest sponsored venture with Segi Seri Sdn Bhd on Investment Account Platform (IAP), a shariah-compliant platform similar to crowdfunding and peer-to-peer lending platforms.
Affin Islamic said the venture plans to raise RM3.3 million on IAP to part-finance contract awarded to them recently, which is related to preparation and serving of dietetic food to an established government hospital in Malaysia for a duration of three years.
Payday lenders squeezed by new regulations (The Globe and Mail), Rated: B
Another challenge is the new technology. Instant Financial Inc., a Vancouver-based startup, released an app this year that lets workers paid by the hour get their day’s earnings after a shift. It’s free for employees. Employers pay a fee. The focus so far is the hospitality industry, and includes companies such as McDonald’s and Outback Steakhouse in the United States. Instant has about 175,000 people on the service in the United States and about 5,000 in Canada. Wal-Mart has a similar product, which it sourced from another company.
A mobile banking service is transforming how the poor transfer money — here’s how it works (Business Insider), Rated: AAA
In 11 countries around the world, some 30 million people use a mobile money service that is transforming how people handle their finances.
It’s called M-Pesa, and it has lifted hundreds of thousands of people out of poverty in Kenya.
Krispo, 40, is enrolled in GiveDirectly’s experiment in basic income, a system of wealth distribution in which people receive a standard salary just for being alive.
The money comes with no strings attached. Krispo and the other villagers have received $22 a month since October 2016, and they’ll continue getting it until October 2028.
Scattered around town are M-Pesa stands, outfitted with live agents who can dispense money — essentially an ATM with a human teller.
There is a small fee for each transaction. For the amount given to GiveDirectly recipients, this fee is 30 shillings. (GiveDirectly actually wires 2,280 shillings each month — 30 shillings above the 2,250 recipients can spend — to cover the cost.)
News Comments Today’s main news: China Rapid Finance goes public at $350M valuation, down from C round valuation of $1bil. VPC Specialty Lending Investments annual results continues to disappoint Morty launches fully-automated mortgage marketplace. Barclay’s opens Europe’s largest fintech site in London. Airwallex wins $17M funding. India to see fintech regulations soon. Today’s main analysis: National survey shows instant […]
- Today’s main news: China Rapid Finance goes public at $350M valuation, down from C round valuation of $1bil. VPC Specialty Lending Investments annual results continues to disappoint
- Morty launches fully-automated mortgage marketplace. Barclay’s opens Europe’s largest fintech site in London. Airwallex wins $17M funding. India to see fintech regulations soon.
- Today’s main analysis: National survey shows instant financing will drive business to online retailers
- Today’s thought-provoking articles: Lending IPOs find cautious investors amid consumer credit fears.SoFi’s first PR campaign tells millennials how to ask for a raise
- Elevate announces expanded elastic funding capacity. GP:”Elevate Credit will apprently have access to $250mil up from $150m from Victory Park Capital via a separate vehicle called Elastic. “
- SoFi’s first PR campaign tells millennials how to ask for a raise. GP:”A very interesting marketing approach, in line with SoFi’s interests of their borrowers increasing their repayment capability.” AT: “This is why SoFi is now the industry leader.”
- PayPal partners with WooCommerce, Xero for ‘Business in a Box’. GP:”A very interesting approach. Square is built on making taking credit card payment easily. PayPal is falling behind on innovation.” AT: I would argue that PayPal was the world’s first digital bank. Many online entrepreneurs, including myself, have been using it as a bank account for years even if the service hasn’t acted like a traditional bank. Now, it looks like PayPal is trying to become an actual bank as well as a small business tool box. Think Quicken + CRB.”
- National survey shows instant financing will drive business to online retailers. AT: “This is good news for Klarna. I suspect we’ll see other e-commerce financing solutions begin to hit the market soon. There is certainly a demand for it.”
- Morty launches fully-automated mortgage marketplace. GP:”The interesting part here is not comparing mortgage prices, Lending Tree does that. It is instead if you can close via the website as well. I am curious to see traction and volume numbers here. I think it is all about customer experience. “
- RealtyeVest is a one-stop real estate investing platform.
- Lending IPOs find cautious investors amid consumer credit fears. GP:”An article about China Rapid Finance’s IPO.”
- This startup wants to be the Amazon of real estate. GP:”Cadre is an e-commerce site for investing in real estate. Cadre seems to be just a high net worth crowdfunding real estate company.”
- NCAP impacts credit data of all credit bureaus due to public record standards. GP:”National Consumer Assistance Plan(NCAP), a set of initiatives designed to improve the accuracy of credit report information, as well as to provide consumers with a better experience interacting with the nationwide Credit Reporting Agencies (CRAs). During the week of July 10, 2017, the CRAs will remove from their databases previously collected public record data that does not meet the enhanced PII standards.”
- Robo advice: Better than no advice?
- Helping clients determine risks in alternative investments. AT: “A great illustration.”
- Lantern Credit appoints Ricardo Gomez-Acebo to board.
- Incumbent financial services’ millennial strategy. AT: “A little laugh never hurt anyone.”
- Attorney Jonathan Frutkin to speak at crowdfunding conference.
- RateSetter upgraded to top-tier in transparency. GP:”4th Way rating of RateSetter has improved. “
- Sharing the voice of British small businesses.
- UK SMEs to back Tory leadership.
- Flender is granted P2P credit license. GP:”Congratulations!”
- RateSetter partners with George Banco. GP:”RateSetter has acquired specialist motor finance providers Vehicle Stocking Limited and Vehicle Credit Limited out of their parent company’s administration”
- Growth Street celebrates marketplace rate drop.
- Funding Circle review. GP:”Funding Circle is the only peer-to-peer lending platform of scale which operates across multiple geographies. “
- VPC Specialty Lending Investments annual results continues to disappoint. GP:”NAV return of 0.85%”
- Going round in circles.
- United States
- Elevate Announces Expanded Elastic Funding Capacity (BusinessWire), Rated: AAA
- SoFi’s first PR campaign answers the question, ‘How do I ask for a raise?’ (PRWeek), Rated: AAA
- PayPal launches a small biz toolset, ‘Business in a Box,’ with WooCommerce & Xero (TechCrunch), Rated: AAA
- National Survey Shows Instant Financing Will Drive Business to Online Retailers (PR Newswire), Rated: AAA
- Morty launches fully-automated mortgage marketplace (PRNewswire), Rated: A
- RealtyeVest Is the One-Stop Platform for Real Estate Investing and Project Financing (PR Newswire), Rated: A
- Lending IPOs Find Cautious Investors Amid Consumer Credit Fears (Bloomberg), Rated: A
- This Startup Wants to Be the Amazon of Real Estate (Inc), Rated: A
- NCAP Notice to Clients regarding Public Record Standards (Experian Email), Rated: A
- Robo Advice: Better Than No Advice? (Forbes), Rated: A
- Helping Clients Determine Risks in Alternative Investments (Wealth Management), Rated: A
- FLEETCOR to Acquire “Cambridge Global Payments,” a B2B International Payments Provider (BusinessWire), Rated: A
- Lantern Credit Appoints Ricardo Gomez-Acebo to Board of Managers (BusinessWire), Rated: B
- Incumbent financial services’ millennial strategy (The New Yorker via CB Insights Email), Rated: B
- Attorney Jonathan Frutkin Featured Speaker at Washington D.C Crowdfunding Conference (Benzinga), Rated: B
- United Kingdom
- RateSetter upgraded transparency to “top-tier” level, says 4th Way (P2P Finance News), Rated: AAA
- Sharing the voice of British small businesses (Funding Circle), Rated: AAA
- UK SMEs set to back Tory leadership (P2P Finance News), Rated: A
- Flender is granted its P2P credit license (AltFi), Rated: A
- RateSetter Partners with George Banco, Acquires Two Motor Finance Businesses (Crowdfund Insider), Rated: A
- UK P2P Lender Growth Street Celebrates Marketplace Rate Drop, Signals Increased Momentum (Crowdfund Insider), Rated: A
- FUNDING CIRCLE REVIEW (Orca Money), Rated: A
- VPC Specialty Lending Investments Annual Results Continues to Disappoint (Crowdfund Insider), Rated: A
- Going round in circles (Bridging&Commercial), Rated: B
- Former Unicorn China Rapid Finance Goes Public at a $ 350M Valuation (Lend Academy), Rated: AAA
- P2P Industry News (Xing Ping She Email), Rated: A
- China Rapid Finance a consumer lending force in China (Bankless Times), Rated: A
- International P2P Lending Volumes April 2017 (P2P-Banking), Rated: AAA
- European Union
- Barclays Opens Europe’s Largest FinTech Site in London (Yahoo! Finance), Rated: AAA
- Melbourne fintech Airwallex just won $ 17 million funding from Mastercard, Sequoia and Tencent (Business Insider), Rated: AAA
- FinTech Australia Reflects on First Year (Crowdfund Insider), Rated: A
- India to see regulations for fintech space soon: KPMG report (Outlook), Rated: AAA
- SoftBank Said in Talks to Invest $ 1.4 Billion in India’s Paytm (Bloomberg), Rated: AAA
- 3 Alternative Lending Trends That Have Made Fintech Startups Popular (Inc42), Rated: A
Elevate Announces Expanded Elastic Funding Capacity (BusinessWire), Rated: AAA
Elevate Credit, Inc. (“Elevate”) announced today that Elastic SPV, which purchases loan participations in the Elastic line of credit product originated by Republic Bank & Trust Company (“Republic Bank”), increased its debt facility with Victory Park Capital from $150 million to $250 million. This is the first step in a two-step process to further increase and diversify the funding capacity for the Elastic line of credit product.
During the second quarter of 2017, an additional SPV will be created as another funding source for the Elastic line of credit product. This additional SPV for Elastic would provide additional funding, diversified funding sources and further lower the cost of funds.
SoFi’s first PR campaign answers the question, ‘How do I ask for a raise?’ (PRWeek), Rated: AAA
Starting May 15, SoFi staffers will participate in an online series that will offer users tips on communicating their value in the workplace and tell inspirational stories. The company will hold workshops in eight U.S. cities including New York, Chicago, Seattle, San Francisco, and Washington, DC, on negotiating pay raises, non-monetary benefits, and other topics. Career expert Nicole Lapin will appear at the New York event.
The average SoFi student loan customer is about 33 years old and has a student loan balance of about $75,000, more than twice the national average. A SoFi survey also found 50% of young, college-educated professionals had not negotiated their own salaries, and 54% said they don’t know their “market value.”
PayPal launches a small biz toolset, ‘Business in a Box,’ with WooCommerce & Xero (TechCrunch), Rated: AAA
PayPal today launched a new service, called Business in Box, aimed at bringing more U.S. small business owners to its payments platform. The service, which was developed in partnership with WooCommerce and Xero, offers merchants a suite of tools for running their online businesses, including an online storefront, accounting tools, the ability to apply for working capital from PayPal and, of course, support for taking payments either online or offline, via PayPal.
Business in a Box is largely aimed at first-time business owners who already know what they want to sell and have a roadmap in mind, as well as at established offline businesses that want to make the move online.
Often, these business owners would otherwise turn to an e-commerce platform, like Shopify, Magento, BigCommerce or WooCommerce, to establish their online presence and take advantage of other add-ons that can help them with other aspects of their business, like running promotions, marketing, order management, shipping, social media and more.
The company also noted today that PayPal Working Capital has now helped more than 115,000 businesses worldwide access more than $3 billion in loans and cash advances since the service launched in 2013.
National Survey Shows Instant Financing Will Drive Business to Online Retailers (PR Newswire), Rated: AAA
American consumers appear to be warming up to instant financing options when purchasing goods and services online. According to a new national survey, three quarters (75 percent) of consumers indicate they would be likely to select an online retailer that offered instant financing compared to another that did not; 28 percent would be very likely to change merchants in order to use instant financing.
Instant financing is an easy-to-use, revolving line of credit that consumers apply for within a merchant’s online checkout. It allows consumers to spread purchases over time with low APR financing offers, and provides an alternative to credit and debit cards when paying for an online purchase.
The online study was fielded between April 10 and 13, 2017 by Researchscape International on behalf of Klarna North America (www.klarna.com). The survey of 2,024 consumers, ages 18 and older, was designed to better understand the behaviors and attitudes of consumers towards instant financing. Consumers were quota-sampled using 32 different cells (gender by age by region) to closely match the overall national population.
In terms of how instant financing might impact their spending while shopping online, 39 percent of consumers indicated they would spend more money on a purchase if they had the option of instant financing compared to 42 percent who would not and 19 percent who did not know if they would spend more money.
Smartphone owners, 88 percent of consumers who responded, were asked about the ease and willingness to enter certain types of personal information when applying for instant financing. Among the information seen to be “too much trouble” to enter were Social Security number and bank account numbers (51 percent each), and credit card numbers (40 percent). On the other hand, just over a tenth of consumers found it to be too much trouble to enter an email address (11 percent), birthday (12 percent) or spouse’s name (12 percent).
Other key findings of the survey include:
- Nearly half of respondents (47 percent) would like to be presented with an instant financing option while shopping online
- Just over a quarter of consumers surveyed (28 percent) have used instant financing while 68 percent have not and 4 percent were not sure if they had
Beyond probing consumers’ thoughts regarding availability, the survey also asked about the convenience and ease-of-use factors of instant financing. For instance, a majority of consumers (52 percent) expect to wait three or more minutes to be approved for instant financing. Twenty-eight percent would expect to wait two minutes and just 20 percent would expect to wait under a minute. Klarna’s approval process typically provides an approval in under a minute with only simple, top-of-mind information required.
Morty launches fully-automated mortgage marketplace (PRNewswire), Rated: A
Focused on empowering homeowners to make smarter decisions about their mortgages, today Morty (www.himorty.com) launches its fully-automated mortgage marketplace, where homebuyers can shop, compare — and close — any loan option from among its network of lenders. Morty is initially rolling out with 10 major lenders across 10 markets in the United States, with plans to expand nationally by the end of 2017.
Leveraging the founding team’s diverse experience and learning first-hand from homebuyers during its initial pilot, Morty was able to identify pain points from start to finish and prove the benefits of a marketplace model. In the over one thousand real-life loan scenarios it has run for homebuyers, Morty has observed rate and fee variances across lenders that can add up to tens of thousands of dollars in fees and monthly payments.
Morty is creating an entirely new model: access to any lender or mortgage product within a single, unified mortgage process from first click to closing day.
Here’s how it works:
- Homebuyers create a simple financial profile by linking their income, assets, employment, and property information and describing their homeownership goals.
- Morty’s pricing engine algorithmically matches the homebuyer’s profile with each lender’s eligibility and pricing guidelines to show accurate, customized quotes, inclusive of all lender fees and closing costs.
- Borrowers see their loan options in full transparency and compare across lenders and products.
- Never once leaving the Morty platform, the homebuyer chooses a loan and Morty automates the process all the way to the closing table.
In addition to its launch, Morty also announces that it has raised $3 million in funding led by Thrive Capital with participation from SV Angel, FJ Labs, Corigin Ventures, MetaProp, Techstars and several angel investors.
RealtyeVest Is the One-Stop Platform for Real Estate Investing and Project Financing (PR Newswire), Rated: A
RealtyeVest, Formerly IHT Realty Group, officially unveiled their new brand and optimized website. Destined to become one of the largest real estate crowdfunding platforms in the US, the new RealtyeVest website () provides a simple, secure and transparent platform for accredited investors, real estate developers and owner-operators.
“Our decision to rebrand from IHT Realty Group to RealtyeVest was a result of listening to feedback from our strategic partners and observing best practices in the industry,” said Daniel Summers, CEO. “We believe our new name better represents the essence of our business, and we are excited about the innovative technology that powers our new online marketplace. We spared no expense in the new build, providing a win-win to our investors and Sponsors.”
RealtyeVest is an online marketplace that connects investors and Sponsors (real estate owner-operators) to crowdfund exclusive real estate investments. Their platform allows its members to browse, research and make informed investment decisions on these exclusive properties.
Lending IPOs Find Cautious Investors Amid Consumer Credit Fears (Bloomberg), Rated: A
China Rapid Finance Ltd. on Friday became just the second consumer lender this year to list in the U.S., following Elevate Credit Inc. earlier in April. Although they do business on opposite sides of the world, the duo has much in common: Both face investor questions about the reliability of their borrowers, both begin trading amid a particularly iffy time in the credit cycle and — perhaps consequently — both slashed their IPO price days before going public.
When LendingClub Corp. went public in 2014, some hailed the event as the dawn of a new era for finance. Shares have since fallen 60 percent from the IPO price.
“China Rapid Finance is coming to the market during a turbulent time in the China peer-to-peer industry as regulators roll out more controls to clean up what has so far been chaotic growth in the past few years,” MCM Partners analyst Ryan Roberts wrote in a note on the stock’s first initiation, a buy rating. “The company reduced the pricing range by about 40 percent, which we suspect reflected tepid demand from backers,” the note said.
Both recent IPOs are now trading up from their reduced offering prices by nearly 25 percent. MCM says the IPO valued China Rapid Finance at 4.7 times its book ratio. William Blair on Monday said that Elevate Credit is trading at 7.5 times its 2018 estimated earnings per share.
This Startup Wants to Be the Amazon of Real Estate (Inc), Rated: A
Even so, the 29-year-old Williams is a force, as is his company. Since launching, Cadre has generated nearly $1 billion worth of deals, raising close to $70 million in funding from high-profile investors such as Peter Thiel, Goldman Sachs, and Jack Ma.
So Williams set up a website where he could analyze these homes using a tax parcel ID–which tracks the value of a property over time–and measured this against what they were selling for. Using the data, and bolstered by the cash of wealthy Harvard alums including the Kushners, he started buying dozens of properties and flipping them for three times their original price. “By the time I graduated, I was at a crossroads: Do I scale this business nationally, or do I do tech banking at Goldman Sachs?” he recalls thinking.
Williams decided to do both. He pulled 18-hour days as an investment banker–and then would quietly work on his startup from the comfort of a supply-closet-size room by night. Real estate, he figured, was a valuable asset that ought to be made available to more (and more average) investors.
Cadre is an e-commerce site for investing in real estate. It connects customers–primarily wealthy individuals, referred to as “qualified purchasers”–to property deals across the U.S. (Cadre requires a minimum investment of a few hundred thousand dollars; that’s somewhat less than what a traditional fund requires, but likely more than what you’d pay to buy into a real estate investment trust, or REIT, which trades like common stock.) Williams declined to comment on what exactly the company charges its investors–it asks for an upfront fee and a recurring subscription rate–though notes that it’s in the range of a “couple hundred basis points.” A fund, by contrast, will typically take 2 percent of the investment, and then 20 percent of profits over time.
Although Cadre faces competition mainly from the traditional brokers, a growing number of startups have emerged in the real estate leasing space, such as 42Floors, a San Francisco website that lists commercial real estate and office rentals, and Rofo, an online marketplace for property listings and potential tenants that can facilitate lease deals without broker intervention.
NCAP Notice to Clients regarding Public Record Standards (Experian Email), Rated: A
In 2015, Equifax, Experian, and TransUnion announced the National Consumer Assistance Plan (NCAP), a set of initiatives designed to improve the accuracy of credit report information, as well as to provide consumers with a better experience interacting with the nationwide Credit Reporting Agencies (CRAs).
In June 2016, the CRAs announced enhanced public record data standards for the collection and timely updating of public record data reported on consumer credit reports. The enhanced standards require: (i) minimum consumer identifying information (name, address, social security number and/or date of birth) (“PII”) and (ii) minimum collection frequency for public records (at least every 90 days). These enhanced standards will apply to new and existing public record data on the CRAs’ respective consumer credit reporting databases. As previously announced, these enhanced standards are effective July 1, 2017.
Based on information provided by our public record vendor about the data available from courts and recorders’ offices, we expect bankruptcy public record data will continue to meet the enhanced collection and reporting standards. However, civil judgments and approximately half of tax lien data are not expected to meet the enhanced standards.
During the week of July 10, 2017, the CRAs will remove from their databases previously collected public record data that does not meet the enhanced PII standards. This includes the removal of all judgment public records and the portion of tax liens not meeting the enhanced standard. Public record data will also be monitored for adherence to the enhanced PII and collection frequency standards after July 1, 2017.
Despite the anticipated loss of significant volume of public record data from credit files, impact analysis conducted by the CRAs, as well as leading scoring model companies using CRA data, show a modest risk scoring impact and minimal loss in predictive performance as a result of these changes.
Please contact any member of your Account teams with questions you may have or forward questions to:
- Equifax: email@example.com
- Experian: DataReporting@experian.com
- TransUnion: TUDAS@transunion.com
Lantern Credit Appoints Ricardo Gomez-Acebo to Board of Managers (BusinessWire), Rated: B
Lantern Credit, a financial technology company working to solve systematic inefficiencies in the consumer credit industry, adds Ricardo Gomez-Acebo to its Board of Managers. He joins Chairman John Mack, Vice Chairman John Sculley, James Held, Seth Johnson, Kevin Knight and Chad Swensen on the Lantern Board.
Gomez-Acebo has more than 30 years of experience in the Spanish and International Retail Banking sector, holding various executive roles at Spanish banks Banesto and Banco Santander including General Manager of Europe for Banesto. Gomez-Acebo led business development with strategic financial partners at Banco Santander and most recently is heading risk management for the bank.
Incumbent financial services’ millennial strategy (The New Yorker via CB Insights Email), Rated: B
Attorney Jonathan Frutkin Featured Speaker at Washington D.C Crowdfunding Conference (Benzinga), Rated: B
Radix Law’s principal attorney, Jonathan Frutkin, will be a featured speaker at the “Fourth Annual Conference and Workshop for Crowdfunding USA” scheduled for May 4 to 5 at the National Press Club in Washington D.C. Frutkin is the author of the book Equity Crowdfunding: Transforming Customers into Loyal Owners.
RateSetter upgraded transparency to “top-tier” level, says 4th Way (P2P Finance News), Rated: AAA
RATESETTER’S upgraded data disclosure on its loan book and expected losses has brought its transparency to a top-tier level, according to peer-to-peer lending research firm 4th Way.
Based on the amended methodology, expected cumulative losses now stand at £18.06m, which paired with the current £22.44m provision fund buffer result in a 124 per cent coverage ratio – six per cent higher than last reported.
RateSetter’s data table now provides a clear estimate of the losses expected over the lifetime of its loan book, spelling out the losses that have already materialised and future expected losses for each year of origination, as well as a detailed breakdown of different types of arrears, provision fund adequacy levels, and investors’ expected returns.
Sharing the voice of British small businesses (Funding Circle), Rated: AAA
What we discovered is that small businesses are going for growth, unfazed by the uncertainty caused by last year’s referendum result and the snap election. Nearly 70% of UK small businesses expect their turnover to increase within the next 12 months – half of whom expect a steady increase of between 6 and 20%, and only 6% expect turnover to decrease.
Small businesses, who already account for 60% of private sector employment, will continue to drive much needed job creation this year. More than half of the businesses we spoke to are planning to hire at least one new full-time member of staff over the next year. With more than 5 million small businesses across the country – this could mean the creation of millions of new jobs in the next 12 months!
When asked what their one policy priority is in the run up to the election, tax was by far the most important issue. With business rates mentioned specifically nearly 300 times, 40% said that they want the new Government to focus on this area after the election. The second most important policy area, according to a quarter of businesses, was of course Brexit.
To date investors have lent £2.2 billion to more than 23,000 UK small businesses.
UK SMEs set to back Tory leadership (P2P Finance News), Rated: A
A vast majority of the 2,300 firms interviewed by the country’s third largest small- and medium-sized enterprises (SME) lender are poised to throw their weight behind Theresa May’s party as the best positioned to deliver Brexit, despite half of them opposing the separation from the 28-nation bloc in the referendum last year.
The research also confirmed that UK SMEs have quickly shrugged off Brexit-induced economic worries, as seven in 10 firms expect to deliver stronger profits in the next 12 months and only six per cent forecast a drop in turnover over the same period.
Flender is granted its P2P credit license (AltFi), Rated: A
Peer-to-peer friends and family lender, Flender announced it has now received its full authorisation from the FCA and has also launched operations in Ireland.
The platform says it has funded loans of over €900,000 since its soft-launch, without any marketing or advertising. It has seen demand from companies in a wide range of industry sectors including construction, F&B, energy companies, retailers and more. It reports that it has attracted over 750 registered users, 138 campaigns submitted with 11 currently live on the platform.
RateSetter Partners with George Banco, Acquires Two Motor Finance Businesses (Crowdfund Insider), Rated: A
RateSetter previously provided financing to George Banco. RateSetter will now lend directly to George Banco’s growing customer base with George Banco generating the leads.der George Banco. RateSetter has also acquired an equity stake in the George Banco company.
Additionally, RateSetter has acquired specialist motor finance providers Vehicle Stocking Limited and Vehicle Credit Limited out of their parent company’s administration. RateSetter will rebrand both businesses and invest in them to build on its current motor finance capabilities. RateSetter previously provided wholesale finance to these businesses.
UK P2P Lender Growth Street Celebrates Marketplace Rate Drop, Signals Increased Momentum (Crowdfund Insider), Rated: A
Growth Street’s marketplace rate dropped on Monday from 6.5% AER to 6.4% AER, rewarding borrowers with a 10bps drop in their costs of funds. The UK P2P lender attributes the drop to the momentum it has built on its platform, welcoming over 700 investors to date since the launch of its investment offering in November.
FUNDING CIRCLE REVIEW (Orca Money), Rated: A
Loans are split into a minimum of £20 chunks or loan parts allowing investors to achieve a high level of diversification when investing relatively low amounts. Funding Circle suggests lending to a minimum of 100 businesses to achieve a 1% exposure to any one business. When investing a minimum of £2,000, Funding Circle’s auto-bid function will achieve this level of diversification automatically.
Borrowers across Funding Circle are all small to medium sized businesses (SMEs), borrowing between £5,000- £1million for loan terms of 6 months to 5 years.
Funding Circle is the only peer-to-peer lending platform of scale which operates across multiple geographies. The P2P platform has expanded from the UK to the USA, Germany and Spain. 74% of Funding Circle’s group (Funding Circle Holding Limited) revenue in the period ending the 31st December 2015 came from its UK business (Funding Circle UK Limited).
VPC Specialty Lending Investments Annual Results Continues to Disappoint (Crowdfund Insider), Rated: A
VPC Specialty Lending Investments PLC (LSE:VSL.L) released 2016 annual results last week and according to Chairman Andrew Adcock, results continue to disappoint. Shares in the fund that invests in various online lending assets continue to trade at a significant discount to the net asset value per share. As of December 31, 2016, VPC had deployed 87% of its NAV (with its cash holding of 13% temporarily elevated due to the recent sale of the Funding Circle U.K. portfolio). During 2016, VPC generated an NAV return of 0.85% for the Ordinary Shares and distributed dividends of 6.00 pence per Ordinary Share relating to the income earned during the year.
Going round in circles (Bridging&Commercial), Rated: B
The recent news that peer-to-peer lending platform Funding Circle plans to stop all property development lending by mid-2018 came as something of a surprise.
Risk is always a factor in construction, but it is how that risk is managed that is important. Funding Circle’s withdrawal could allow other lenders to enter this space, and increased competition will be no bad thing in giving developers greater choice.
While we appreciate that there are always certain areas of the market that give cause for concern, many of our clients have a clear appetite for further growth. While demand is strong, and developers continue to be starved of funds by traditional lenders, the market for alternative finance – and peer-to-peer lending particularly – will come to the fore.
Former Unicorn China Rapid Finance Goes Public at a $ 350M Valuation (Lend Academy), Rated: AAA
The IPO price was set at $6.00 and the company raised $60 million which was adjusted down from their anticipated raise of $105 million. Back in 2015, it was reported that the company had a pre-money valuation of $1 billion after closing a $35 million Series C. The company is now valued at $350 million.
At time of writing shares were trading around $7.10 per share.
The fact that China Rapid Finance and Yirendai before them chose to go public in the US is significant. In a recent Lend Academy podcast with Yirendai CEO Yihan Fang, she stated that they felt the US was more educated on marketplace lending. This coupled with the fact that Ning Tang (Founder of parent company CreditEase) and other management members had experience in the US and were more comfortable with the US capital markets led to their decision to list in the US.
Another company that could seek a US IPO is Ppdai.com who last year said it could go public in the first half of 2017.
P2P Industry News (Xing Ping She Email), Rated: A
Today, FuMi Tech, MI’s related eco-chain company, announced it has finished A round of financing and raised 100 million RMB. This round of financing led by Buddhism Capital, with MoBai Capital and the previous investor ShunWei Capital participated. The fund will be continuously used to improve users’ experience.
WeBull, one of the products of FuMi Tech, providing trading services of US and HK stocks, and supporting real-time quotes of global stock, foreign exchange, funds and derivatives markets of over 20 countries. In fact, FuMi Tech has previously raised a joint investment of 50 million RMB from MI and ShunWei Capital.
Recently, China Construction Bank(Guangdong Branch) has launched its P2P funding depository product “Dragon depository”, and currently the bank has reached agreements with several P2P lending platforms.
According to an insider of CCB, the two critical measurements for their P2P cooperators are: bad debts and overall strength of the platform.The participation of CCB will promote the compliance process and bring a sustainable development of P2P lending industry.
The first Asia Credit Rating Agencies CEO Fair & Systemic Risk International Seminar was held in Beijing recently. Hongwan Chen, the deputy director of the financial department of National Development and Reform Commission, said that the regional cooperation across Asia is important for it could accelerate the Construction of Credit System in the area. He also advise to build credit record for local companies incorporated overseas and foreign investors, and set up a “blacklist” about those seriously illegal enterprises.
China Rapid Finance a consumer lending force in China (Bankless Times), Rated: A
Dr. Wang completed his Ph.D in statistics at the University of Chicago in 1995 before moving on to Sears Credit where as head of analytics he developed models employing credit bureau data while also overseeing the creation of a credit data warehouse. He returned to China, where in 2001 he founded China Rapid Finance which began by developing credit scoring and decisioning models that helped companies issue more than 100 million credit cards.
In 2010 they made the move into marketplace lending, where they teamed up with more than 100 Chinese internet companies to analyze and score data that allowed them to preselect customers.
Seven years later China Rapid Finance has become China’s leading online consumer credit marketplace after facilitating 15 million loans to two million borrowers, beginning with small amounts for short durations and growing into longer-term loans for larger amounts.
EMMAs total 500 million and have been underserved by traditional credit providers, who focus on the 300 million super prime people who work for government or large institutions, Dr. Wang explained. He estimates China’s consumer credit coverage at roughly one-fourth that of the United States. While roughly 60 per cent of Americans have credit coverage, that rate is 16 per cent in China.
EMMAs are prime and near-prime consumers who are educated and have stable employment in the services and with startups and SMEs, but they have little credit history and cannot obtain bank credit. They also largely stayed away from the notorious shadow banks, a large (no one knows precisely how large) opaque industry which helped fuel both real estate and small consumer loans.
International P2P Lending Volumes April 2017 (P2P-Banking), Rated: AAA
Funding Circle leads ahead of Zopa and Lendinvest. The total volume for the reported marketplaces adds up to 445 million Euro.
Milestones reached this month are:
- Younited Credit crossed 500 million Euro loan volume since launch
Barclays Opens Europe’s Largest FinTech Site in London (Yahoo! Finance), Rated: AAA
Barclays has today opened its flagship open innovation site, Rise London, in Shoreditch. It is Europe’s largest co-working space dedicated to financial technologies (FinTech).
Rise, created by Barclays, brings together from across the world a carefully curated community of FinTech startups, along with our corporate clients and other experts, to work on Barclays’ customer and business opportunities and together help to create the future of financial services.
Rise London will house more than 40 FinTech companies, along with Banking and Technology teams from Barclays, and will serve as a gathering place for leaders in the FinTech and venture capital communities. Rise London will play host to more than 200 hours of learning, workshops, hackathons and networking on a monthly basis.
Melbourne fintech Airwallex just won $ 17 million funding from Mastercard, Sequoia and Tencent (Business Insider), Rated: AAA
Australian cross-border payment startup Airwallex has secured US$13 million ($17.4 million) in a funding round to continue its expansion overseas.
For Sequoia — the 45-year-old firm famous for investing in famous tech brands such as Apple, Google and AirBnB – the deal represents its Chinese arm’s first investment in an Australian startup.
Airwallex founder and chief executive Jack Zhang told Business Insider that the company, which already can make payments to 100 countries, will use the cash injection to expand its physical presence in locations such as London, Shanghai, Hong Kong, Indonesia, Malaysia and Taiwan.
FinTech Australia Reflects on First Year (Crowdfund Insider), Rated: A
India to see regulations for fintech space soon: KPMG report (Outlook), Rated: AAA
The government is expected to come out with regulations for fintech (financial technology) space as the industry is likely to witness increased payments and lending activities, a study said today.
Over the next quarter, insurtech may come into its own in India, according to the report.
Citing Paytm attracting Asia’s largest funding round of USD 200 million in March quarter, it said AI and blockchain may be big bets for investors apart from payments, open data and data analytics.
Over the quarter, investment into Asia’s fintech space hit USD 492 million across 33 deals, as per the report.
SoftBank Said in Talks to Invest $ 1.4 Billion in India’s Paytm (Bloomberg), Rated: AAA
SoftBank Group Corp. is in talks to invest about $1.4 billion in India’s One97 Communications Ltd. in a deal that would value the owner of the country’s largest digital-payments provider at about $7 billion, according to people familiar with the matter.
The deal is not yet finalized and the terms may yet change, said the people, asking not to be identified because the matter is private. One97 Communications, whose Paytm unit has seen business surge as India took most of its paper bills from circulation, has also had discussions with two other investors, one of the people said. The company was last valued at $4.2 billion, according to research firm CB Insights.
3 Alternative Lending Trends That Have Made Fintech Startups Popular (Inc42), Rated: A
Traditional banks have left quite a few gaping holes when it comes to unsecured loans, especially for salaried people who are not employed in companies that they classify as A/A+ category.
Quick Personal Loans
Customers, it appears, are warming up to online alternative lending portals, and it is predominantly due to the speed with which the loan application is processed, verified and approved. Tedious documentation, in addition to ambiguous rules and non-transparency in the whole process that a customer faces with banks, has made entrepreneurs reinvent lending for salaried employees. The ease and convenience of digital (and painless) transactions are considered priceless. There are lenders such as Qbera, which disburses personal loans up to INR 5 Lakhs in 24 hours.
Alternative Fixed Income Products Become More Popular
2016 saw RBI releasing a set of directives regarding P2P loans in India. The paper recommends NBFCs status for P2P lenders, which is almost consistent with what the P2P sector has been demanding. This liberal approach helps to protect the interest of all stakeholders without choking innovative ideas. P2P lenders are hoping for these recommendations to become regulations after the budget announcement, which will give the arena a facelift.
Short-Term Payday Loans
You don’t get instant cash from banks and online payday loan providers often save the day. As they are offered for shorter tenures compared to online personal loans, it gets repaid more quickly, which is a definite plus. You can even opt for monthly, fortnightly, weekly or daily loans.