Thursday April 11 2019, Weekly News Digest

china p2p lending

News Comments Today’s main news: Lending Club loans $159M in the past week. OnDeck offers same-day funding. Kabbage secures $700M in funding. RateSetter ISA passes 200M GBP in subscriptions. Funding Circle CEO pocketed 4M GBP last year. Klarna launches global customer authentication platform. Today’s main analysis: Drivers of global growth in FSB’s shadow banking. (A […]

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United States

Need a loan for Tax Day? According to Lending Club data, you’re not aloan… er, alone (Thinknum), Rated: AAA

As seen in data from Lending Club ($NYSE:LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.

RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.

Lending Club Total Principal Loaned (Weekly)

ONDECK OFFERS SAME DAY FUNDING TO EMPOWER SMALL BUSINESS (OnDeck), Rated: AAA

OnDeck today announced that it will offer to fund and debit customer bank accounts with Same Day ACH transfers, eliminating a decades long pain point for small business owners accustomed to the traditional ACH transfer process, which can take multiple days and lacks certainty on when the transactions will hit bank accounts.

Same Day ACH transfers from OnDeck provide qualified OnDeck Term Loan and Line of Credit customers with funds up to the National Automated Clearing House Association (NACHA) cap of $25,000 by 5:00 pm local time on the same business day the customer books or makes a draw on their line of credit.* Qualified customers are also debited via the same day ACH service, providing them additional predictability in transaction clearing times and offering better clarity around day-to-day cash flow management.

Highlights from Jamie Dimon’s Annual Letter (PeerIQ), Rated: AAA

US payrolls rose by 196 k in March and the unemployment rate remained at 3.8%.

Source: Bloomberg, PeerIQ

Highlights from Jamie Dimon’s Letter to Shareholders

Jamie Dimon published his annual letter to shareholders. We look at some highlights below:

  • The banking system, and JPM in particular, is over-capitalized – Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks.
Source: JPM, PeerIQ

PM is investing billions in technology to compete – the cloud, AI, ML and digital banking

  • JPM customers can now open a bank account online in under 5 minutes and can reduce their mortgage closing times to 3 weeks.
  • The bank now has 49 Mn active digital customers, including 33 Mn active mobile customers
  • JPM is looking at fintechs in the US and in China as not just opportunities but also looming competition.

Online lender Kabbage rakes in 0m funding (Verdict), Rated: AAA

Kabbage, an online lender for small businesses, has fetched $700m in asset-backed securitisation (ABS) funding.

With the securitisation, the company’s debt funding increases to $940m.

Real-time data was Kabbage’s secret sauce, its first investor says (American Banker), Rated: A

The firm started life as a small, scrappy fintech startup in Atlanta in 2008, but has grown rapidly. It made $2 billion worth of loans in 2018 and more than $600 million in the first quarter of 2019. It also recently agreed to provide financing at the point of sale on Alibaba.com as part of a program called Pay Later.

Upstart Raises $ 50 Million and Announces New Bank Partners (Lend Academy), Rated: A

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

PeerStreet Lowers Minimum Real Estate Investment to $ 100 (Think Reality), Rated: A

The burgeoning peer-to-peer lending platform PeerStreet has unveiled product updates that enable investments of only $100.

The company recently announced it’s lowered the minimum investment to $100 for “small balance reinvestments” when using its automated investing product. The upgrade also expands the investment types available for automated investing to include cash offer loans and 30-day notes, which offer shorter terms than typical bridge loan investment options, the company said.

Sharestates Wins Top Real Estate Platform Award at LendIt Fintech USA 2019 (PR Newswire), Rated: A

Sharestates, a marketplace lending platform that connects real estate developers with investors, was crowned Top Real Estate Platform at LendIt Fintech USA2019 in San Francisco, California on April 9, 2019. The Top Real Estate Platform award is based on performance, volume, growth, product diversity, and responsiveness to stakeholders.

Now operating in 46 states, Sharestates offers diversified asset classes including residential, multi-family, mixed-use, commercial properties, and land acquisitions.

Since launching in 2015, Sharestates has closed on over $1.7 billion in total loan volume and returned over $675 million in principal to investors. Average annualized returns have exceeded 10% every year. As a result of its strong performance and valued relationships, 82% of Sharestates loan volume has come from repeat borrowers and 81% of its investors are repeat investors.

The stREITwise Platform Brings Real Estate Investment to All (Realty Biz News), Rated: B

The company has just announced a new acquisition to its investment portfolio, a $32 million mixed-use building in Carmel, Indiana, one of the most affluent suburbs of Indianapolis. The 140,000-square foot Allied Solutions Building, already around 87 percent leased, stands poised to increase dramatically in value thanks to its location in the heart of downtown Carmel in the heart of a busy mixed-use development surrounded by restaurants, coffee shops, fast-casual dining, service-oriented retail, and the locally renownedSun King distillery and food hall right next door.

13 cities where renting is cheaper than buying a home (AOL), Rated: A

Americans’ homeownership rate is 64.8%, according to the latest U.S. Census data.

Following are the 13 metros where renting is cheaper by more than $150 a month, beginning with cities with a smaller advantage for renters.

BlueVine Adds Term Loan to Suite of Online Working Capital Solutions to Fuel Small Business Growth (GlobeNewswire), Rated: A

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced that it is making term loan financing available for business owners through its suite of online financing solutions. The BlueVine Term Loan provides small- and medium-sized business owners with fast and simple access to financing to grow their businesses through BlueVine’s advanced online platform. More than 59 percent of businesses are looking for funds to grow their business, according to the 2017 Federal Reserve Small Business Credit Survey Report on Employer Firms. With a BlueVine Term Loan, business owners can quickly pursue larger projects and investments to bring their businesses to new heights.

Aura Approves 350,000th Affordable Loan (Bakersfield.com), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, this week approved its 350,000 th loan.

Since its launch in 2014, Aura has provided more than $437 million in credit-building loans to borrowers at approximately 1,200 partner locations using technology that enables local businesses to administer loan applications. Currently, Aura’s average loan size is around $1,600.

In total, Aura has raised over $403 million in social bonds across 21 bond issuances. The most recent issuance was in March for $50 million.

What Kind of Collateral Do I Need for a Business Loan? (Nav), Rated: A

Before you can qualify for a commercial loan, you’ll need to prove that doing business with your company is a good risk. This means you’ll need to pass successfully through a lender’s qualification process.

Next Wave of Personal Loan Growth May be Driven by Prime and Above Consumers (MarketWatch), Rated: A

The prime and above risk tiers have become a greater focus for lenders in recent years. Nearly two-thirds of unsecured personal loan balances originated in the first three quarters of 2018 were lent to prime and above consumers. FinTechs drove this shift as originations for prime and above grew to 62% in 2018, up from 52% in 2013. While still less conservative than banks, FinTechs’ overall risk profile for originations now aligns tightly with credit unions. At the end of 2018, FinTechs held the majority share of personal loan balances with 39%, while banks and credit unions followed with 28% and 21%, respectively.

Student Debt Isn’t Just An Employee Problem — It’s Also An Employer Problem (Killer Startups), Rated: A

The Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit for the fourth quarter of 2018 that outstanding student loan debt increased to $1.46 trillion, which is $15 billion more than the previous quarter. It also reported that student loan debt rose by $79 billion in 2018.

The student debt load isn’t just impacting the individual students who enter the workforce, hoping they can find a job that enables them to make those monthly payments. I’s also slowing economic growth. A January 2019 Federal Reserve paper noted that young adults report their student loan debt is the reason they’re unable to buy a home. The same report also cited other research concluding that 20 percent of the decline in homeownership among young adults relates to student loan debt that’s been rising since 2005.

Amount Announces Cloud-Based Account Verification Platform (Kake), Rated: A

Amount today announced AmountVerify, a cloud-based platform for risk management across financial products. AmountVerify marks the first time industry leading fintech provider Avant is making a component of its cutting edge online lending platform available to financial service companies as a standalone product through Amount.

Onfido raises $ 50M to create the Identity Verification Standard for Businesses Globally (Markets Insider), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M. The round was led by SBI Investment and Salesforce Ventures, with support from M12 (formerly Microsoft Ventures), FinVC and others, including existing investors.

Forward Financing Expands Capital Base with $ 90 Million Credit Facility (Yahoo! Finance), Rated: A

Forward Financing has closed on a $90 million credit facility, consisting of a $60 million senior revolving credit facility and a $30 million junior term loan. AloStar Capital Finance (“AloStar”), a division of Cadence Bank, N.A., served as the Agent on the senior facility.

Credibly Announces Investment Grade Senior Debt Offering (Yahoo! Finance), Rated: A

Today, Credibly announces the next phase in its balance sheet growth strategy with a $10 million Investment Grade-rated senior debt offering. The transaction closed on March 28, 2019.

Mitek Expands Auto-Capture User Experience Across All Digital Channels with the Addition of Desktop (GlobeNewswire), Rated: A

Mitek today announced it has upgraded its desktop browser experience to support auto-capture so customers can rapidly verify the identity of applicants across all digital channels: desktop browsers, mobile web and native applications.

According to Javelin Research, today only one third of users (34 percent) still complete the entire account opening process on their desktop.

MiSnap delivers a superior auto-capture experience for desktop and across mobile devices through:

  • Guided commands:  Real-time commands such as where to place a document in relation to the camera or detection of glare on the ID document are some of the conditions evaluated in order to help the user capture an optimal image, which improves image acceptance rates and reduces capture retries.
  • Advanced image analysis: Once MiSnap has achieved an optimal capture of the ID document, the software then further analyzes the image and makes the necessary adjustments in order to process all images consistently and accurately.
  • Modern architecture: Because MiSnap uses WebAssembly, it can perform at native speeds and is easy to integrate into customers’ web-based apps and requires minimal footprint.

58% of lenders will use AI in next two years (AI Foundry Email), Rated: A

Fannie Mae recently put out a 

  • Nearly two-thirds of lenders are familiar with AI
  • But, only 27% are using it in their businesses now, and…
  • Only half of that group are currently using it with customers (the rest are doing trials)
  • However, looking ahead two years – 58% of lenders expect to use AI/ML in their mortgage business.
  • Of the rest:
      • 22% predict they’ll be investigating AI
      • 19% foresee being in a “wait and see” mode

    These data points show us that “prime time” is coming soon for AI/ML in mortgages. 

    Fintech alone won’t be enough to boost credit union mortgage volumes (Credit Union Journal), Rated: A

    How can credit unions, especially small institutions, compete with Quicken Loans’ Rocket Mortgage “Push button, get mortgage” campaign?

    They can’t – and, sources said, they shouldn’t try.

    GROUNDFLOOR Wins 2 FinTech Awards (Groundfloor Email), Rated: B

    GROUNDFLOOR was named Best Crowdfunding Platform by the 

    Pulte Mortgage and Finicity Partner to Combat the Home Loan Paper Chase (MarketWatch), Rated: B

    Pulte Mortgage announced today it is partnering with Finicity — a leading provider of real-time financial data access and insights, to provide its borrowers with a faster, simpler and more secure way to navigate the home financing process.

    Hudson Data and LendingPoint partner to prevent Synthetic ID fraud (Finanzen), Rated: B

    Hudson Data and LendingPoint announced that they are partnering to create an industry solution to prevent synthetic identity fraud using powerful graph machine learning.

    Dharma crypto lending platform officially goes live (CoinGeek), Rated: B

    Dharma Labs completed a Series A funding round earlier this year to support its cryptocurrency lending platform project. The San Francisco-based company raised $7 million from companies such as Polychain Capital, Coinbase Ventures and others and, if there was any concern about the platform not going live, those concerns are now extinguished. Dharma announced this past Monday in a Medium post that the platform is now live.

    United Kingdom

    RateSetter ISA Milestone: Passes £200 Million in Subscriptions (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender RateSetter recently announced its ISA has now passed the milestone of attracting £200 million in subscriptions.

    “Investors have enjoyed an average annualised return of 4.5%, tax-free of course, since the RateSetter ISA launched in February 2018. The average RateSetter ISA balance stands at £11,000.”

    Funding Circle boss pocketed more than £4m last year (P2P Finance News), Rated: AAA

    FUNDING Circle founder Samir Desai (pictured) earned more than £4m last year, having cashed in some of his shares at the time of the peer-to-peer lender’s stock market flotation.

    Desai took home a salary of £210,000 last year, according to Funding Circle’s annual report, a four per cent increase from his salary of £202,000 in 2017.

    The majority of his total remuneration of £4.081m came from cashing in share options.

    Zopa rewrites outdated money idioms (The London Economic), Rated: AAA

    Each future-looking idiom challenges the status quo. For example, according to Zopa, the ‘signing for the bill’ gesture will be redundant soon. Instead, when people have finished their meal, people will be more likely to signal facial or iris recognition to the waiter. Jonesy gives his take and takes it one step further by illustrating a customer displaying his eyeball to request the bill.

    Source: The London Economic

    Fintech unicorns are leading job creation in London (Business Insider), Rated: AAA

    In 2018, there was a 61% increase in fintech job creation within London from the previous year, per a new report by Robert Walters, making it the fastest growing sector for vacancies in the city.

    The UK houses 25% of all fintech unicorns and their growth plans call for more talent. There are 29 fintech unicorns worldwide, seven of which are based in the UK, making the UK second only to San Francisco, which is home to nine.

    Over 30% of jobs in the UK’s fintech industry are for IT-related roles, compared with 24% in 2017. And fintech unicorns’ hiring for IT professionals increased 74% year-over-year (YoY).

    Source: Business Insider

    London to take San Francisco’s fintech unicorn crown (The Innovation Enterprise), Rated: A

    However, the report has predicted that London could take the lead as early as this year, as the city receives 39% of European fintech venture capital funding, with the runner-up, Berlin, taking just 21% of the total investment.

    With 50% against a global average of 33%, the UK also enjoys the highest rate of consumer fintech adoption of any Western country, only beaten by India and China, the report found.

    LendInvest gains £200m HSBC funding as it seeks home loan market entry (Verdict), Rated: A

    LendInvest, which operates an online marketplace for mortgages, has received an investment of £200m ($261m) from HSBC UK to support its foray into the regulated home loan sector.

    Peer-to-peer scheme for first-time buyers launches (FT Advisor), Rated: A

    Start-up company Stepladder is promoting a new way for first-time buyers to save for a house deposit.

    Arbuthnot Latham launches Arbuthnot Direct for those seeking long-term interest returns (Arbuthnot Email), Rated: B

    Arbuthnot Latham & Co., Limited (“Arbuthnot Latham”) is pleased to announce the launch of its new platform under the trading name of Arbuthnot Direct. Arbuthnot Direct offers fixed term deposits online, targeting retail customers who are seeking interest returns on their money over the longer term. The platform held a successful soft launch in February 2019 and has already met with a positive reception.

    China

    The rise and fall of P2P lending in China (Finextra), Rated: AAA

    It is worth mentioning that the size of China’s P2P industry is larger than that of the rest of the world combined, with outstanding loans of US$217.96BN.

    China’s online P2P lending industry grew rapidly between 2011 to 2015, with the number of P2P lenders growing from 50 to nearly 3,500 respectively.

    Trouble started brewing in China back in 2016, when statistics released by the Chinese Banking Regulatory Commission showed that about 40% of P2P lending platforms were in fact Ponzi schemes.

    This triggered the shutdown of P2P lending platforms; over 900 closed by the end of 2016. For 2018, only 1,021 providers remained in place.

    Source: Bloomberg News

    Shenzhen police arrest Zhang Wei, calling China Create Capital a ‘mafia-like gang’ (SCMP), Rated: A

    China Create Capital Limited, the investment holding company headed by the 46-year-old Heilongjiang native is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms, the Shenzhen police said in a notice. The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

    The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country’s financial system and capital markets, where 1,129 “mafia-like” syndicates were broken up across 10 provinces last year, with 4.94 billion yuan (US$737 million) of assets seized, according to the police. A number of Chinese oligarchs including Anbang Group’s

    former chairman Wu Xiaohui

    , CEFC Group’s founder Ye Jianming and financier Xiao Jianhua had fallen from grace since 2017.

    $ 60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market (CoinDesk), Rated: A

    These new crypto lenders include such notable names as Bixin Capital, FBG Capital and DGroup, founded by Dong Zhao, who made a name by operating one of the longest-running over-the-counter (OTC) trading desks in China. Along with a startup called Babelbank, these investors have originated a combined $60 million worth of loans over the last five months, denominated in cryptocurrencies or, in one firm’s case, Chinese yuan.

    European Union

    Klarna launches global customer authentication platform (Klarna), Rated: AAA

    Klarna today announced the launch of its global authentication platform — an aggregator with multiple global and local authentication solutions. The platform allows multinational businesses, including merchants and other banks, to provide a simple, secure and personalised customer authentication experience irrespective of market, through a one-time integration.

    Klarna Sees Payments as Evolving From Function to Engagement (WWD), Rated: A

    Klarna’s Hannah Bravo says customers chose brands based on payment options.

    This New Tool Is Helping Retailers Build Consumer Trust During Online Checkouts (Footwear News), Rated: B

    The Klarna platform enables businesses to choose from a range of global and local authentication methods so that they can find one that works best for their customer. Whether using SMS verification or emailed one-time passwords, brands and retailers can verify their customers’ identities with minimal interruption to the consumer’s shopping journey.

    International

    Drivers of Global Growth in FSB’s Shadow Banking (DBRS Email), Rated: AAA

    DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010, according to the FSB. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster.

    Summary highlights of the commentary include:

    • Shadow banking is still growing. This narrow, but rapidly growing, subset of nonbanks had assets of $52 trillion in 2017, up 75% from $30 trillion in 2010.
    • Since 2010, assets of nonbanks are also growing, up 61% to $185 trillion. That is 49% of the $378 trillion in total global assets in all financial institutions at the end of 2017, up significantly from 44% in 2010.
    • The key driver of this growth in nonbank assets is the expansion of OFIs. These OFIs are defined as all financial institutions that are NOT central banks, banks, insurance companies, pension funds, public financial institutions, or financial auxiliaries. Assets at these OFIs grew 71% since 2010 to a record $117 trillion in 2017, or just over 30% of assets in financial institutions globally.
    • By far, the largest segment of shadow banking globally is collective investment vehicles, which are subject to runs. These include fixed income funds, mixed funds, MMFs and hedge funds. Since 2010, this segment has grown by 130% to $36.7 trillion in assets. By contrast, growth in other segments has been less than $1 trillion, or even negative.

    Read the full report here.

    Crypto Lending Platform Salt Adds Support for Dash as Collateral (Crypto-Economy), Rated: A

    Cryptocurrency lending platform Salt will now be allowing its users to collateralize their Dash holdings including their Masternode staking coins to access loan facilities.

    India

    RentoMojo in talks to raise $ 40 million from GMO, others (livemint), Rated: A

    For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.

    Asia

    Housing sector remains major source of complaints: BPKN (The Jakarta Post), Rated: A

    The BPKN received 154 complaints in the first quarter, most originating from the housing sector. BPKN communications and education coordinator Arief Safari said the agency had received 129 complaints on the housing sector in the first quarter, followed by six complaints on online peer-to-peer (P2P) lending, three on banking and the remainder on various sectors, including travel and e-commerce.

    Batumbu to help finance SMEs (The Jakarta Post), Rated: A

    PT Berdayakan Usaha Indonesia has announced that it aims to help small and medium enterprises (SME) access financial capital through a partnership program with its digital platform Batumbu.

    MENA

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

    Thursday March 28 2019, Weekly News Digest

    structured debt

    News Comments Today’s main news: Klarna launches open banking platform. SoFi re-engineers home loans. Apple’s new credit card. OakNorth secures guarantee of $133M. Qupital raises $15M to bumrush China. Today’s main analysis: Arbuthnot Banking Group audited final results for 2018. Today’s thought-provoking articles: U.S. yield curve, new fintech products. Cities with most overleveraged mortgage debtors. Household debt. Expanding access to credit […]

    The post Thursday March 28 2019, Weekly News Digest appeared first on Lending Times.

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    News Comments

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    United Kingdom

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    News Summary

    United States

    SoFi Refreshes Home Loans, Making Home Buying Painless and Paperless (PR Newswire), Rated: AAA

    Today, SoFi announced the refresh of its mortgage offering as SoFi Home Loans, complete with a reengineered process that helps people buy or refinance a home with an online application, no hidden fees, or prepayment penalties.

    SoFi Home Loans offer competitive rates including affordable down payments, with as little as 10% down on loans up to $3MM, with no hidden fees or prepayment penalties. SoFi allows applicants to choose between four different loan terms and fixed or adjustable rates. Those interested in refinancing can choose between traditional mortgage refinancing, cash-out refinancing, and student loan cash-out refinancing. If SoFi Home Loans isn’t able to handle a loan request, SoFi provides an easy option to digitally transfer member information to its affiliate partner who may be able to help.

    Apple’s new credit card keeps advisors guessing (Financial Planning), Rated: AAA

    The Apple credit card is the latest offering by a Silicon Valley tech giant looking for a ready-made avenue into the financial services’ sector. While the new card mostly benefits loyal users of Apple products, it’s also an unwelcome reminder of an ever present question on the minds of wealth managers: Will the FAANG companies like Facebook, Amazon, Apple, Netflix and Alphabet continue their land grab of services historically provided by the financial services industry — and at what cost to traditional RIAs?

    Ominously, a majority of investors considering switching financial services providers said they would consider banking with a tech company like Facebook, Google or Amazon if they could, according to a recent survey by Novantis.

    US Yield Curve Inverts; New Products from FinTechs (PeerIQ), Rated: AAA

    For the first time in 3,000 days, and with much anticipation, the 3-month and 10-year treasury curve inverted. The median time to a recession after this curve inverts is between 1 to 1.5 years. However, unprecedented interventions such as QE (and higher central bank holdings globally) make it difficult to draw hard and fast conclusions. Market participants are pricing in a 41% probability of an interest rate cut in the September meeting.

    Source: PeerIQ; Bianco Research

    New Products from FinTechs

    FinTech innovation continues with new products from PeerStreet and Figure. PeerStreet has launched a 30-year loan to enable private investors to buy rental properties. Residential for Rent loans are targeted towards rental home operators. The rental market in the US has grown exponentially post-crisis people struggle to buy homes. The number of rental homes has grown from 36 Mn in 2006 to 43 Mn in 2017.

    Source: FactTank, PeerIQ

    2019’s Cities with the Most Overleveraged Mortgage Debtors (WalletHub), Rated: AAA

    Buying a home represents an important milestone for most consumers. But for those who dive in to the deep end of real estate without a financial safety net, the decision could lead to buyer’s remorse in the long run. Mortgage rates are slowly falling after reaching their latest peak in November 2018, and are close to the lowest they’ve been in the past 3 decades. This makes 2019 a tempting time to buy a home. Some industry experts believe 2019 is friendlier toward buyers than sellers because of the lower rates.

    Source: WalletHub

    Household Debt – Mixed Signals (DBRS), Rated: AAA

    The most recent Quarterly Report on Household Debt and Credit issued by the Federal Reserve Bank of New York (the Fed) and Equifax Inc. (Equifax) showed that household debt rose for the 18th consecutive period during Q4 2018 to $13.5 trillion, $869 billion higher than the peak reached in 2008. This represented the third-smallest increase (0.24%) over the 18 consecutive periods of growth, partly because of decreasing mortgage loan debt during Q4 2018 to $9.2 trillion from $9.4 trillion at the end of Q3 2018 and flat levels of auto loan debt at $1.3 trillion for both Q3 and Q4 2018.

    Expanding Access to Credit in the Land of New “Halves” (Lend Academy), Rated: AAA

    Credit is one of the largest, most powerful, lucrative and important industries in the world. It also is one of the best tools for wealth creation – home ownership, small business ownership and growth, and, leveraged investing.  This is readily accessible for prime consumers with more options now than ever before. But for the other half of the country that is non-prime, options are still limited and in many cases non-existent.

    Early pioneers of securitizations like SoFi, the scaling of marketplace lending like Lending ClubProsper and Best Egg, and new distribution models like Greensky and Affirm have contributed towards increasing comfort of these “new asset classes” that were mostly locked up in bank’s balance sheets.

    There are a lot of new “halves” in today’s world.

    Amount Delivers Seamless Digital and Mobile Lending Platform to TD Bank (PR Newswire), Rated: A

    Amount, a technology provider for financial institutions, today announced a strategic partnership with TD Bank. TD Bank, a top ten U.S. bank, is leveraging Amount’s platform to power the bank’s TD Fit Loan, which launched in August 2018. This initial offering allows consumers to consolidate higher-interest debt, while helping TD meet growing consumer demand for a seamless digital and mobile lending experience. Through this partnership, TD and Amount will roll out additional offerings, as well as standalone tools addressing fraud, verifications and decisioning.

    5 Freebies With Your Student Loans (NerdWallet), Rated: A

    1. Career coaching

    Who offers it: SoFi.

    SoFi members have received over 15,000 coaching sessions to date.

    4. Referral bonuses

    Who offers it: Multiple refinance lenders.

    • Education Loan Finance offers $400 for each successful referral, as well as $100 for the loan applicant.
    • Laurel Road lets you split its $400 bonus however you and your referral see fit.
    • Splash Financial provides $250 apiece for both parties.

    5. Charitable work

    Who offers it: CommonBond.

    If you prefer freebies that help others, CommonBond has a one-for-one social impact mission. For each loan the lender issues, it donates an amount based on a formula that funds a child’s education in a developing country through the nonprofit Pencils of Promise. Those donations have totaled over $1 million to date.

    CNote Launches Wisdom Fund to Close Lending Gap for Women (PR Newswire), Rated: A

    Women are the fastest-growing group of entrepreneurs in the U.S. Yet less than 5 percent of small business lending—only $1 in $23—goes to women. CNote aims to fix this disparity with the Wisdom Fund, a new impact investment opportunity launching today.

    Investors in the Wisdom Fund will earn an estimated 4 percent annual return, over a 60-month term, on a loan portfolio that’s diversified across established CDFIs. Email wisdomfund@mycnote.com to learn how you can help fund more women-owned businesses today.

    Women seeking loans should contact a participating CDFI. Partners in the Wisdom Fund’s first phase include:

    • Carolina Small Business Development Fund, which provides small business loans and financial training to startups, existing businesses and community organizations in North Carolina.
    • LiftFund, a Texas-based organization that empowers underserved entrepreneurs with capital and support services in 13 states.
    • TruFund, a national nonprofit organization that provides affordable capital to small businesses and nonprofits in AlabamaLouisiana and New York.

    Study Finds 70% of Americans Would Share More Personal Data for Fairer Credit Decisions (PR Newswire), Rated: A

    More than half (54%) of loan applicants don’t even have a clear understanding of why they receive the interest rate they do from a lender, while a majority (70%) say it is difficult finding lenders who will look at them as something other than their credit score.

    • 7 in 10 American adults (71%) wish there was another way to prove themselves to credit lenders outside of the standard credit score.
      • Hispanics (82%) and African Americans (81%) are more likely than Whites (67%) to want lenders to look at additional factors in lending decisions.
    • 77% believe more data is better when evaluating potential borrowers’ credit.
    • 71% would be willing to share more personal data with a lender if it resulted in a fairer credit decision. The motivation is even higher among middle-class earners. 79% of people making $50,000 to $75,000 would share more personal data to prove their creditworthiness, compared to 66% of people making over $100,000.
    • 84% think their bank should use modern technology to assess their creditworthiness.
      • Specifically, about half of loan applicants (53%) would like their ideal lender to use machine learning to make fairer credit decisions.
      • More than 2 in 5 (42%) would like their ideal lender to use machine learning to make the credit for homeownership more accessible to everyone.
      • Surprisingly, older generations want newer technology even more. Baby boomers and seniors (83% and 87%, respectively) wanted their banks to use new technologies to score them, compared to 79% for Millennials and Gen Zers.

    Survey: Alternative Data Sharing (Urjanet), Rated: B

    Urjanet surveyed more than 300 U.S.-based adults to assess consumer sentiment around alternative data sharing in the lending process. Key findings include:

    • A majority of consumers have multiple alternative sources of payment history
    • Alternative data sharing represents a huge opportunity for lenders to drive financial inclusion
    • Most consumers (59%) are willing to share utility and telecom data to boost chances of approval

    SigFig launches platform to help retail banks sell financial products (Investment News), Rated: A

    SigFig, the financial technology firm that developed digital advice platforms for several large financial institutions, wants to help banks automate more than investment management.

    Technology to Play Crucial Role in Preparing ABS Professionals for Next Economic Cycle (ABL Advisor), Rated: A

    An overwhelming majority (90 percent) of asset-backed securities (ABS) professionals feel that adopting new technologies will be important to preparing their businesses for the next economic cycle, according to Capital One’s sixth annual survey at SFIG Vegas 2019.

    The survey also revealed that ABS professionals believe the biggest risks to their businesses are uncertainty around regulatory risk and increased credit risk, both at 29 percent. However, despite regulatory risk being a top concern, the industry’s apprehension has nearly cut in half over the last two years. In 2018, 48 percent noted regulations were the biggest risk to their businesses while 58 percent thought so in 2017. Additional top-of-mind concerns for 2019 include increases in interest rates (18 percent) and increased competition (17 percent).

    TrustToken’s Stablecoin Now Available On Cred’s Crypto Earning Platform (BlockTribune), Rated: A

    Asset tokenization platform TrustToken has announced a strategic partnership with crypto lending platform Cred.

    Founded by former PayPal financial technology veterans, Cred is a decentralized global lending and borrowing platform that allows stablecoin issuers, exchanges and wallets to provide valuable earn and lending services worldwide.

    Fintech in Brief: Update on Legal Challenges to OCC Fintech Charter (JDSupra), Rated: A

    On March 19, 2019, the New York State Department of Financial Services (“NYDFS”) filed a brief in opposition to the Office of the Comptroller of the Currency’s (“OCC”) motion to dismiss the NYDFS’ lawsuit challenging the OCC’s statutory authority to grant special purpose national bank charters to Fintechs (the “Fintech Charter”). The brief in opposition signals that the NYDFS will continue its opposition to the Fintech Charter under the leadership of Acting Superintendent Linda Lacewell, who replaced outgoing Superintendent Mari Vullo in February. In opposing the OCC’s motion to dismiss, the NYDFS argued that it has standing to challenge the Fintech Charter, the matter is ripe for judicial review, and its claims are not time-barred. The NYDFS also argued that the OCC’s interpretation of the “business of banking” is not entitled to Chevron deference and “should be invalidated in its entirety.”

    Mortech Partners with Roostify for Enhanced Online Mortgage Experience (Business Wire), Rated: A

    Today, Mortech, a Zillow Group business providing mortgage technology solutions for mortgage lenders and secondary market teams, announced a new partnership between Mortech’s product and pricing engine (PPE) and Roostify, a digital lending platform that gives customers more control of their home buying process while allowing loan officers to utilize the latest technology to more easily process loans. The strategic partnership will integrate two proven mortgage technology solutions to improve the digital mortgage experience for many industry-leading lenders.

    Finastra brings community banking services outside the branch with the launch of Fusion Digital Front Office (Finastra), Rated: A

    Finastra has launched Fusion Digital Front Office, an innovative tablet-based banking platform that enables community banks and credit unions to take services directly to the consumer, outside of the branch. The solution provides a simple gateway to manage account origination, sales and service, and transaction processing from any remote location.

    Huobi’s US Arm Launches Institutional Group for OTC Crypto Trading (CoinDesk), Rated: A

    “We’re entering the market now with a real institutional offering, we’re definitely going to be offering some new products and services,” such as token lending and over-the-counter (OTC) trading, in the coming months, he added.

    Elevate Named as a Finalist for LendIt Fintech 2019’s Financial Inclusion Award (AP News), Rated: B

    Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, has been named as one of six finalists in the “Excellence in Financial Inclusion” category for the LendIt Fintech Industry Awards 2019. This award is given to the company that has made the biggest impact in expanding access to financial services in new and innovative ways.

    J.D. Power ranks Regions among top alternative lenders for personal loans (Biz Journals), Rated: B

    Birmingham’s largest bank has ranked among the top alternative lenders in the U.S. for providing personal loan satisfaction through digital applications.

    United Kingdom

    ARBUTHNOT BANKING GROUP (“Arbuthnot”, “the Group” or “ABG”) Audited Final Results for the year to 31 December 2018 (Morningstar), Rated: AAA

    FINANCIAL HIGHLIGHTS

    ·      Profit Before Tax £6.8m (2017: £2.5m)

    ·      Underlying profit before tax £7.4m (2017: £3.2m)

    ·      Operating income increased by 24% to £67.9m (2017: £54.6m)

    ·      Negative earnings per share 134.5p (2017: positive 43.9p)*

    ·      Continuing earnings per share 38.0p (2017: 14.0p)

    ·      Underlying earnings per share 40.3p (2017: 17.6p)

    ·      Final dividend per share 20p (2017: 19p), an increase of 5%

    ·      Total full year dividend per share 35p (2017: 33p)

    ·      Bonus share issue to create new class of non-voting shares

    ·      Net assets £196m (2017: £236m)

    ·      Net assets per share 1283p (2017: 1547p)

    ·      Underlying return on deployed equity 5.6% (2017: 4.2%)

    Consolidated statement of financial position

     

    At 31 December

    2018

    2017

    Note

    £000

    £000

    ASSETS

    Cash and balances at central banks

    17

    405,325

    313,101

    Loans and advances to banks

    18

    54,173

    70,679

    Debt securities at amortised cost / held-to-maturity

    19

    342,691

    227,019

    Assets classified as held for sale

    20

    8,002

    2,915

    Derivative financial instruments

    21

    1,846

    2,551

    Loans and advances to customers

    22

    1,224,656

    1,049,269

    Other assets

    24

    12,716

    20,624

    Financial investments

    25

    35,351

    2,347

    Deferred tax asset

    26

    1,490

    1,527

    Interests in associates

    27

    – 

    83,804

    Intangible assets

    28

    16,538

    15,995

    Property, plant and equipment

    30

    5,304

    3,962

    Investment property

    31

    67,081

    59,439

    Total assets

    2,175,173

    1,853,232

    EQUITY AND LIABILITIES

    Equity attributable to owners of the parent

    Share capital

    37

    153

    153

    Retained earnings

    38

    209,083

    237,171

    Other reserves

    38

    (13,280)

    (949)

    Total equity

    195,956

    236,375

    LIABILITIES

    Deposits from banks

    32

    232,675

    195,097

    Derivative financial instruments

    21

    188

    931

    Deposits from customers

    33

    1,714,286

    1,390,781

    Current tax liability

    236

    705

    Other liabilities

    34

    18,549

    16,239

    Debt securities in issue

    35

    13,283

    13,104

    Total liabilities

    1,979,217

    1,616,857

    Total equity and liabilities

    2,175,173

    1,853,232

    Read the full report here.

    Tech Nation Lists 10 Fintech Pioneers In Future Fifty 2019 Cohort (Forbes), Rated: AAA

    Revolut, Monzo, Starling Bank, Currencycloud, Aire, Blockchain, MarketInvoice, Quantexa, Nested and Salary Finance were revealed to be among the 24 most dynamic and fast-growing late-stage technology companies to be chosen to join Future Fifty’s 2019 cohort.

    Tech Nation and Dealroom data has also revealed that the U.K. has attracted a whopping $7.9 billion in funding in 2018 and closed the gap for exits of venture-backed companies with the U.S. As well as this U.K. sales, IPOs and mergers were worth $40 billion – ahead of every other European country – which points to the success of the tech sector as a whole in the country.

    OAKNORTH ANNOUNCES BRITISH BUSINESS BANK ENABLE GUARANTEE OF £133M (Business Leader), Rated: AAA

    OakNorth has today announced its participation in the ENABLE Guarantee programme, securing a guarantee of £133m from the British Business Bank, the UK government’s economic development bank. OakNorth will use the guarantee to strengthen further its lending support to fast-growth businesses and established property developers and investors.

    The ENABLE Guarantee programme is designed to encourage banks to increase their lending to smaller businesses by reducing the amount of capital required to be held against such lending. Under an ENABLE Guarantee, the UK Government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.

    Inside OakNorth’s plan to take its lending technology global (Tearsheet), Rated: A

    As a challenger bank, OakNorth charts a different course. While Revolut, Monzo, and N26 focus on putting their digital current accounts in the hands of millions, OakNorth doesn’t even offer a current account. While other challengers are racing to acquire banking licenses all over the world, OakNorth is happy with just a UK license.

    OakNorth is also posting profits while other challengers aren’t.  The bank announced a £33.9m profit for 2018, up 220 percent from 2017.

    OakNorth provides debt financing to entrepreneurs in growing businesses, lending £0.5M to £40M to profitable, scale-up, British businesses. To fund its underwriting, OakNorth offers digital savings accounts. It currently has 40,000 customers with digital savings accounts and has lend £3 billion in under four years.

    Successful UK Payday Lender Western Circle Limited Begins Offering Personal Loans Online (Finger Lakes Times), Rated: A

    Western Circle Limited has made a name for itself by offering responsible payday loans online. Their decision to branch out into the personal loans market through the new brand PersonalLoansNow.co.uk was well received by their customers.

    Five last-minute IFISA ideas (P2P Finance News), Rated: A

    THE END of the tax year is fast approaching, so if you haven’t yet taken full advantage of your £20,000 ISA allowance to make tax-free returns, now is the time. The peer-to-peer lending industry is expecting to see an uptick in inflows into Innovative Finance ISAs (IFISA) this year now that there is a much wider choice of products available and the potential for higher returns than cash with lower volatility than the stock market.

    FINTECH LAUNCHES AI LOAN COMPARISON SERVICE (Business Cloud), Rated: A

    Loan marketplace Monevo has launched a new platform to give consumers comparisons of pre-approved loans.

    Based in Macclesfield, the business is a licensed credit broker for personal and business loans and is Europe’s largest personal loan marketplace.

    An Alternative Approach (IFA Magazine), Rated: A

    When it comes to asset allocation, advisers constantly face the challenge of finding real diversification in client portfolios. Sue Whitbread met with Matthew Ardron and Benedict Yung of Basset & Gold Group, to talk about their approach of offering fixed rate bonds that invest in alternative lending.

    Half of Brits running out of cash before payday – pushing them to rogue lenders (Mirror), Rated: A

    Exclusive research for Mirror Money shows by the end of this month, those turning to payday loans will have shelled out more than £214million – that works out at £28 per second

    P2P to have strong presence at Innovate Finance Global Summit (P2P Finance News), Rated: B

    FOUNDERS of the ‘big three’ peer-to-peer lenders are among the confirmed speakers at Innovate Finance Global Summit (IFGS), which takes place next month at London’s Guildhall.

    Giles Andrews of Zopa, Samir Desai of Funding Circle and Rhydian Lewis of RateSetter are all participating in various sessions at the fintech industry trade body’s flagship conference on 29-30 April 2019, which marks the start of UK Fintech Week.

    Other confirmed speakers from the P2P world include Zopa chief executive Jaidev Janardana, ArchOver’s Angus Dent, Ali Celiker from British Pearl and Roxana Mohammadian-Molina from Blend Network.

    China/Hong Kong

    Hong Kong SME financing platform raises $ 15m for China push (Finextra), Rated: AAA

    Hong Kong-based online SME trade financing platform Qupital is targeting the mainland after closing a $15 million Series A funding round led by CreditEase FinTech Investment Fund.

    Consumers hunger for loans, lenders popping up everywhere (Shine), Rated: AAA

    Qin Shuifeng, 30, who lives in the suburban district of Jiading, went to a branch of the Postal Savings Bank of China in 2016 to seek a loan for home improvements.

    The lender granted her and her husband a credit line of 1 million yuan (US$148,600), of which they drew 600,000 yuan, with an interest rate 10 percent higher than the benchmark rate.

    Competition 

    The central government has issued a series of policies favorable to consumer lending since the second half of 2018.

    Still, risks remain. To realize sustainable development, players need to build strong operational and risk control capabilities, either by themselves or in partnership with financial technologies firms.

    European Union

    Klarna Launches Open Banking Platform (PR Newswire), Rated: AAA

    Today, Klarna, one of Europe’s leading payment providers and the global market leader in payment initiation services, announces the launch of its own Open Banking Platform. This platform will enable access to more than 4,300 European banks through a single Access to Account (XS2A) API in line with Payment Services Directive (PSD2). Klarna’s XS2A API is the most established and proven solution that has been developed at scale across markets for almost 15 years through the Klarna Group company Sofort.

    This platform provides a fully proven and mature infrastructure, superior market coverage and connectivity, with access to 99% of online banking consumers currently across 14 European markets. By opening up its own advanced technology and capabilities, Klarna is simplifying and democratising access to APIs securely. Both established and newer banks and fintechs as well as other licensed businesses, will be able to build smart and personalised offerings that meet the evolving needs of consumers across Europe. Klarna has been one of the leading proponents of the PSD2 legislation and believes high-quality APIs will drive innovation and competition but most importantly will empower consumers across Europe with increased choice, control and clarity on their finances, and ability to access better products.

    International

    Has Alternative Lending Seen Its VC Peak? (PYMNTS), Rated: AAA

    U.S. FinTech funding reached its highest level in five years in 2018, according to CB Insights data published last month, hitting $11.89 billion. Yet at a time when analysts say VCs are focusing more on late-stage investment, alternative lenders are having a tougher time securing funding, particularly market newcomers in a crowded market.

    But there is evidence that investors’ appetite for alternative lending startups is on the wane, even as overall FinTech funding continues to climb — and as the success of the alternative lending market grows, too.

    eToro buys blockchain company Firmo (Fintech Futures), Rated: A

    Just weeks after launching in the US, trading and investment platform eToro announced plans to purchase Copenhagen-based blockchain firm Firmo, reports Julie Muhn  at Finovate

    Founded in 2017, Firmo offers a programming language called FirmoLang that runs on a sidechain. Exchanges can leverage FirmoLang to create financial instruments such as P2P lending platforms or cryptocurrency derivatives with tokens. And Firmo is versatile, allowing the tokens to be run on any blockchain.

    Battlestar Capital Earns 30% Returns For Holding Crypto (ChainBits), Rated: B

    Battlestar Capital, which is a blockchain staking-as-a-service company, revealed that customers could potentially earn up to 30 percent on a yearly basis when it comes to their idle crypto holdings. Here is everything about the startup’s claims in a nutshell.

    In an interview, the company said that it has teamed up with crypto lending startup called Celsius Network in an attempt to launch a large-scale service capable of offering potentially high returns.

    Australia

    APRA Proposes Stricter Credit Risk Management Standards (Regulation Asia), Rated: AAA

    The revised prudential standard enhances board oversight of credit risk and requires more intensive credit checks on borrowers. APRA also highlights the risks of P2P originated loans.

    India

    New modes of lending, fund raising on cards (The Asian), Rated: AAA

    In a bid to change the market dynamics of the banking and financial sectors, the Reserve Bank of India (RBI) will soon come up with alternative models of lending and capital raising for the sectors.

    Asia

    Bukalapak partners three P2P lenders to provide loans for offline businesses (Tech in Asia), Rated: AAA

    Bukalapak is teaming up with Indonesian P2P lending startups Amartha, Modalku, and PohonDana to provide loan facilities in a program called Modal Mitra. The loans are available to offline vendors who are part of the company’s Mitra Bukalapak program.

    The financing offered through Modal Mitra ranges between US$70 and US$700 and can be paid back in up to six months, with weekly installments starting from US$6. It can only be used for purchases in the Mitra Bukalapak app.

    Eurasia

    Russian fintech launches digital bank 131 (Finextra), Rated: AAA

    Bank 131, a new digital bank focused on Russian companies and entrepreneurs that work for global internet companies and/or buy from global ecommerce companies with a Russia presence, announced today they have received their banking license from authorities – the first and only new bank to do so in four years.

    Canada

    Shadow banking has grown, but risks to financial systems are modest (Advisor’s Edge), Rated: AAA

    Canada’s shadow banking sector has grown substantially in recent years, but the overall financial system has grown even faster, keeping risks in check, suggests a new report from the Bank of Canada.

    In the report, the central bank details the results of its monitoring of so-called “non-bank financial intermediation” (NBFI), also known as shadow banking. Among other things, the report finds the Canadian NBFI sector has grown by 1.7 times since 2006, driven by strong growth in investment funds, securities financing transactions and private lending.

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday March 28 2019, Weekly News Digest appeared first on Lending Times.

    Thursday January 17 2019, Weekly News Digest

    marketplace securitizations

    News Comments Today’s main news: RateSetter surpasses 3B GBP in lending. SoFi Money bank-like offerings. LendingClub land on 2019 Bloomberg Gender-Equality Index. HeZhong International to list on Nasdaq. Robo.cash doubles investors in 2018. Kabbage to provide point-of-sale loans to Alibaba shoppers. Today’s main analysis: Marketplace lending securitization slowed in Q4 2018. Today’s thought-provoking articles: Consumer credit continues to grow. Loan default […]

    The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

    marketplace securitizations

    News Comments

    United States

    United Kingdom

    International

    Other

    News Summary

    United States

    SoFi Offering Bank Like Services, But it is Still Not a Bank (Crowdfund Insider), Rated: AAA

    Today, SoFi is distributing more invites to their bank-like services – SoFi Money, a service announced last summer. SoFi is offering consumers the following:

    • No “freakin” fees, including annual, transactional, overdraft, or any other account fees.
    • Higher interest rates, a “whopping” 2.25% APY on your money.
    • Free ATM usage as SoFi will reimburse the fees.
    • Mobile first as your phone is your [bank] branch.
    • Secure – Accounts are FDIC insured up to $1.5 million.³

    More MDs, fewer residents in SoFi’s next student loan securitization (Asset Securitization Report), Rated: A

    Social Finance’s next student loan securitization features higher exposure to physicians, and fewer of them are still in a residency program, according to rating agency reports.

    Borrowers with medical and dental degrees are considered to be good credits in part because they have some of best employment prospects. They account for 28.8% of borrowers in the pool of collateral who have medical degrees, up from 22% for SoFi’s previous student loan securitization, according to Moody’s Investors Service.

    LendingClub Selected for 2019 Bloomberg Gender-Equality Index (LendingClub), Rated: AAA

    LendingClub Corporation (NYSE: LC), today announced that it is one of 230 companies selected for the 2019 Bloomberg Gender-Equality Index (GEI), which distinguishes companies committed to transparency in gender reporting and advancing women’s equality. The index doubled in size from 2018 and includes firms from 10 sectors, headquartered across 36 countries and regions. Collectively, these firms have a combined market capitalization of USD 9 trillion and globally employ more than 15 million people, of which 7 million are women. Thirteen markets are represented for the first time this year, including Argentina, China, Israel, and South Africa.

    Securitization in Marketplace Lending Slowed in Q4 2018 (Lend Academy), Rated: AAA

    Issuance totaled $2.6 billion, which is the slowest pace of issuance in 5 quarters and was related to market volatility according to PeerIQ. Volume decreased 44% from the prior year period and dropped 25% quarter over quarter. Total issuance in 2018 was $15.3 billion and included newer issuers Upgrade and Enova. PeerIQ expects that Upgrade and Enova will continue to participate in the securitization market going forward. While Q4 represented a drop in deals, cumulative issuance still stands at $44.5 billion across 142 deals which is a significant amount.

    Source: Bloomberg, PeerIQ

    We should also point out that LendingClub sold more than $1 billion in CLUB certficates in 2018 which likely reduced their securitization volume in 2018.

    Source: Lend Academy

    Fed Affirms Flexibility on Rate Hikes (PeerIQ), Rated: AAA

    Consumer credit continues to grow. The Fed reported that consumer credit outstanding grew at an annualized rate of 6.7% in November to $3.98 Tn. This is the third month out of the past four that consumer credit grew more than $20 Bn, for the first time in four years.

    Source: Federal Reserve, PeerIQ

    Experian: Loan Default Rates Rose In Dec (PYMNTS), Rated: AAA

    According to the S&P/Experian Consumer Credit Default Indices, which the companies said in a press release represent a comprehensive measure of changes in consumer credit defaults, the composite rate rose six basis points from December to 0.89 percent. The bank card default rate rose 25 basis points to 3.34 percent, while the auto loan default rate jumped 10 basis points to 1.03 percent. The default rate on first mortgages was three basis points higher at 0.67 percent.

    What’s more, S&P Dow Jones Indices and Experian said that all five of the metropolitan statistical areas showed a higher default rate in December of 2018. In Miami, it increased 41 basis points to 1.93 percent, while New York saw a 13 basis-point increase to 0.96 percent and the Chicago default rate was up four basis points to 0.88 percent. In Dallas, the default rate ticked up three basis points to 0.85 percent, while in Los Angeles it was up two basis points to 0.52 percent.

    Source: PRNewsfoto/S&P Dow Jones Indices

    Fiserv to acquire First Data for $ 22bn (Fintech Futures), Rated: A

    A giant will roam the fintech land as Fiserv will acquire First Data in an all-stock transaction of $22 billion.

    LendingTree Ranks Most Competitive Housing Markets (LendingTree), Rated: AAA

    Key Findings:

    Denver, Los Angeles, and Portland, Ore., have the most competitive buyers in the country. Buyers in these areas have higher than average credit and the ability to put down a larger down payment.

    Birmingham, Ala., Virginia Beach, Va., and Pittsburgh have the least competitive buyers in the country.Living in a less competitive market can be beneficial for buyers as it means that the path to homeownership is less challenging than it is in other parts of the country. For example, in these three areas, only 43% of mortgage shoppers had prime credit, compared to an average of 49% across the 50 largest metros in the U.S.

    Roostify Enables Digital Mortgage Solution for Glacier Bancorp (BusinessWire), Rated: A

    Roostify today announced that Glacier Bancorp, Inc. has launched a digital mortgage solution powered by Roostify. Glacier Bancorp, Inc. is a regional bank holding company providing commercial banking services in 104 communities through 164 banking offices in Montana, Idaho, Colorado, Utah, Washington, Wyoming and Arizona. The company holds total assets of $11.9 billion and shareholder equity of $1.5 billion.

    Joust launches a digital bank for gig-economy workers (American Banker), Rated: A

    The fintech startup Joust is launching a mobile banking app Tuesday designed for the 56.7 million Americans who rely on freelance income.

    The product comes with a bank account, a merchant account, and a way to get quick credit. Behind it is a network of community banks that will gather the deposits the app brings in.

    Snoop Dogg Invests In Klarna, Sweden’s $ 2.5 Billion Unicorn (Forbes), Rated: A

    Klarna, the Swedish financial technology giant valued at $2.5 billion last year, has a new addition to its shareholder register from the most unlikely source.

    Millionaire American rapper Snoop Dogg, aka Calvin Broadus, has today become a minority shareholder in the company which offers buy-now-pay-later services at 100,000 retailers in Europe and across the U.S.

    2019 business: 5 trends that will dominate 2019 (Business Report), Rated: A

    1. Consumers demand data control:  a Deloitte report shows 71% of purchased data is … inaccurate.

    2. Alternative lending will surge: It makes sense that non-bank lending will continue to grow, not only was 2018 a big year for the industry but, more importantly, 80% of small business loans are rejected.

    6 Personal Loan Lenders That Accept Cosigners (Credible), Rated: A

    Not all personal loan lenders allow you to add a cosigner to your physical or online application, but there are some that do. Here are six lenders that allow cosigners on their applications.

    1. Freedom Plus
    2. Laurel Road
    3. Lending Club
    4. Lightstream
    5. OneMain Financial

    What happens to robos in a downturn? (Financial Planning), Rated: A

    As stocks soared to record highs over the past decade, robo advisors amassed billions of dollars in investable assets. But now with the onset of ominous market indicators and volatility, advisors say they are worried about how automated investment platforms will perform during a major market downturn and what that might mean for their bottom lines.

    “It is a wild unknown,” says Josh Pace, president of the custodian TCA by E-Trade.

    SMB BANKING: THE NEXT WAVE OF INNOVATION (LendIt), Rated: A

    Key findings address:
    • How the largest banks, regional banks and community banks differ in their approaches to blending hi-tech and hi-touch customer interactions
    • Who are emerging SMB-focused fintech companies and partnerships to watch
    • What banking functions and features are most sought after by SMBs
    • How mobile apps are being designed specifically with SMB customers in mind
    • Why big data and artificial intelligence are key to integrated financial dashboard and advisory applications
    White Oak Healthcare Finance, LLC (“White Oak”) today announced it acted as sole lender and administrative agent on the funding of a senior credit facility for GMF Capital (“GMF”) and Meridian Senior Living (“Meridian”). The funds were used to acquire assisted living/skilled nursing facilities located near Providence, Rhode Island.

    FundThrough Engages 919 Marketing to Fuel U.S. Expansion (PRWeb), Rated: B

    FundThrough, North America’s fastest growing automated, tech enabled invoice factoring company and a power player in the fintech SMB (small and midsized businesses) working capital space, has engaged 919 Marketing, a leading national franchise marketing agency offering content marketing and public relations services to all companies (franchise or non-franchise), to generate consistent brand awareness and accelerate expansion in the U.S. markets.

    Fed not an impediment to fintechs’ charter ambitions (American Banker), Rated: B

    Comptroller of the Currency Joseph Otting on Wednesday downplayed concerns that applicants for the agency’s new fintech charter may face resistance from the Federal Reserve Board.

    Some in the fintech industry are raising alarm that the Fed may balk at allowing holders of the new special-purpose charter into the payments system, which could reduce the overall value of the charter.

    United Kingdom

    RateSetter Milestone: Online Lender Surpasses £3 Billion in Lending (Crowdfund Insider), Rated: AAA

    UK based peer-to-peer lender RateSetter announced on Tuesday it has surpassed £3 billion in online lending. RateSetter reported that the milestone follows a successful year, with the lender originating more than £700 million of new lending and active loans under management grew to £820 million.

    RateSetter also revealed that more than 600,000 customers have used its lending platform to invest or borrow. To date, investors have lent £1.9 billion to individuals and £1.1 billion to businesses. A total of £2.2 billion has been repaid by borrowers, generating returns of £120 million for RateSetter investors, who have enjoyed an average annual interest rate of 4.4% per year since RateSetter’s launch in 2010.

    Rapper Big Narstie named among celebrities joining Zopa hotline for a day (P2P Finance News), Rated: AAA

    PEER-TO-PEER lender Zopa is making four celebrities honorary ‘Zopians’ for a day next week.

    It has launched a “FeelGood Hotline” to banish the January blues that will be staffed by pop star and TV host Frankie Bridge, broadcaster Lauren Laverne and rapper Big Narstie (pictured) on 23 January.

    Boxing icon Frank Bruno will also be on the hotline.

    UK challenger bank Tandem eyes IPO (Fintech Futures), Rated: A

    UK digital challenger bank Tandem has got its young beating heart set on an IPO within the next few years.

    In a brief written and video update, it looks to the future and the past. For example, it cites its recent $15 million investment from Hong Kong for Asian market expansion plans.

    Tide Collaborates With ClearBank to Transform UK SME Banking Market (Crowdfund Insider), Rated: B

    Tide, a UK-based SME challenger banking, announced on Monday it has formed a new partnership with ClearBank to help transform the UK SME banking market.

    Tide reported that through its support, ClearBank has applied for a grant from Pool A of the Capability and Innovation Fund that forms part of the £775 million RBS Alternative Remedies Package, a government-backed competition. 

    A quarter of UK consumers will have a neobank account within five years (Business Insider), Rated: A

    Currently, 9% of Brits, equating to 4.5 million people, have opened an account with a digital-only bank, according to the study. By 2024, a further 16% of the population, or 8.5 million people, intend to do the same.

    Source: Business Insider

    ARBUTHNOT COMMERCIAL ASSET BASED LENDING LTD. SUPPORTS MBO OF PLUMBWORLD WITH £3.5M STOCK ONLY FACILITY (Arbuthnot Latham), Rated: A

    Arbuthnot Commercial Asset Based Lending Ltd. (Arbuthnot Commercial ABL) is pleased to announce the completion of a bespoke £3.5m transaction to support the management buy-out of Online Home Retail Limited (trading as www.plumbworld.co.uk), one of the UK’s leading e-commerce retailer of bathroom related products, from Grafton Group PLC, an international distributor of building materials.

    BBVA name dropped in Atom Bank takeover talks (Fintech Futures), Rated: B

    BBVA is one of the names coming up in a potential takeover of the UK digital challenger Atom Bank.

    Sky News has learnt that Atom is in talks to appoint Citi to advise its board on options for the business.

    Accountants Look Out (Fintech Finance), Rated: B

    Two thirds (66%) of accountants surveyed said that they do recommend external finance providers to their clients. Whilst these recommendations will be based on the need of any given business, they also indicated their preferred source of funding. Half (50.8%) indicated that they would recommend their clients speak with a bank about their finance needs. Interestingly, more than a third (36.3%) are recommending an invoice finance provider ahead of a business loan provider (33.66%).

    China

    HeZhong International, Chinese P2P Lender, Seeks $ 5.8 Million Nasdaq Listing (Capital Watch), Rated: AAA

    The Shenzhen company hopes to raise up to $5.8 million in New York under the symbol “HZ,” according to its prospectus filed with the U.S. Securities and Exchange Commission.

    On its online platform, HeZhong matches borrowers and investors, facilitating mostly consumer loans ranging from $437 to $2,200. It also issues car loans in the amounts ranging between $2,900 and $29,200.

    HeZhong IPO: Tempting But Risky With 3,330% Revenue Growth (Seeking Alpha), Rated: A

    • Based in Shenzhen, China, HeZhong offers an online peer-to-peer lending marketplace, providing consumer and automobile loans to the Chinese borrowers and risk-adjusted returns to the investors.
    • Certain investors will believe that the interest rates seem quite appealing. Annual interest rates are between 8% and 15%, and usual tenures are from 7 days to 360 days.
    • The year 2018 was also great in terms of profitability. The company went from reporting losses from operations of -$1.1 million to report operating profit of $5.6 million.
    European Union

    Robo.cash doubles new investors in 2018 (P2P Finance News), Rated: AAA

    LATVIAN peer-to-peer lending platform Robo.cash has reported that it doubled its investor base in 2018 as it expanded its product range and scaled up its lending.

    The P2P payday lender said the total volume of investments on its platform hit €5m (£4.45m) after a strong year, representing 93 per cent growth. Meanwhile, it attracted 3,200 new investors, twice the number in 2017, with the majority coming from Germany.

    Investment in European Companies Remains Steady but Deal Flow Dives (Crowdfund Insider), Rated: A

    Dow Jones has published their Q4 VentureSource report today and while investment in European companies “held steady” deal flow dropped.

    The report indicates that the number of deals in Q4 stood at 729. In comparison to the prior quarter, it dipped slightly from 738. When you compare year over year quarters the discrepancy is greater as Q4 2017 delivered 865 separate deals.

    In total amount raised, Q4 2018 came in at € 5.19 billion. This is a decline from Q3 at €4.98 billion. But year over year the amount was down as well as Q4 2017 saw € 5.6 billion raised.

    Better systems can aid business of giving money to tackle poverty (Breaking News), Rated: A

    On a visit to Ethiopia last week, the Taoiseach chose to visit one of the most impoverished areas of the world and witness, first hand, profound poverty.

    While there, he was introduced to a woman who had bought four potentially life-saving sheep with a micro-loan provided by Irish Aid.

    Irish Aid is operated by the Department of Foreign Affairs. It is, effectively, managed on behalf of us citizens.

    International

    Kabbage to provide point-of-sale loans to Alibaba shoppers (American Banker), Rated: AAA

    Kabbage, an online lender to small businesses, is now providing point-of-sale loans to small businesses that buy things on Alibaba’s online shopping site, the two companies announced Monday.

    Under the program, which is called Pay Later, small-business owners can get credit lines of up to $150,000 for their orders on the site.

    White Oak Global Advisors Surpasses $ 2.5 Billion of Loan Originations (AP News), Rated: A

    White Oak Global Advisors, LLC (“White Oak”), today announced it funded over $2.5 billion in loans in 2018.

    Klarna links up with Daniel Wellington to allow shoppers to slice their purchase and pay over time (Klarna), Rated: B

    Today, global payments provider, Klarna announced a new collaboration with Daniel Wellington, maker of classic and timeless watches. Loyal shoppers of Daniel Wellington will now benefit from Klarna’s newest payment option, which allows customers to pay for their watches and accessories in 4 equal interest-free installments collected bi-weekly from the shopper’s chosen debit or credit card.

    India

    Blockchain, AI providing traction to India’s crowdfunding platforms (Financial Express), Rated: AAA

    Although crowdfunding in India is at a nascent stage, with only 15 notable crowdfunding platforms (CFPs), the concept holds immense potential for the country’s startup ecosystem.

    A World Bank report states crowdfunding has emerged as a multi-billion dollar global industry, and is expected have a volume of $300 billion by 2030.

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

    Thursday January 3 2019, Daily News Digest

    china p2p lending

    News Comments Today’s main news: RateSetter passes 500M GBP in secondary market lending. U.S. economy fuels boom in consumer debt. Seedrs tops 500M GBP in crowdfund securities. Today’s main analysis: China P2P lending crackdown could see 70% firms closed. Today’s thought-provoking articles: Peter Renton’s Q3 2018 MPL results. 2018 was a standout year for fintech funding. 9 big ideas […]

    The post Thursday January 3 2019, Daily News Digest appeared first on Lending Times.

    china p2p lending

    News Comments

    United States

    United Kingdom

    China

    International

    India

    News Summary

    United States

    U.S. Economy Fuels Boom in Consumer Debt (WSJ), Rated: AAA

    Consumer debt, including credit cards, auto and student loans and personal loans, is on pace to top $4 trillion in 2019.

    Consumer spending has increased 2.7% on average in the four quarters through September compared with the same period a year earlier, as disposable income rose 2.7% on average, according to Moody’s Investors Service. Meanwhile, personal savings as a percentage of disposable income was 6.3% in the third quarter, above a 20-year average of 5.9%, according to Bureau of Economic Analysis data.

    My Quarterly Marketplace Lending Results – Q3 2018 (Lend Academy), Rated: AAA

    My trailing 12 month returns for the year ended September 30, 2018 across all my accounts was 4.77% up from 4.46% in my last update. My original six accounts, all with Lending Club and Prosper, also improved over last quarter but are still at a paltry 3.19%.

    Source: Lend Academy

    How Betterment Stayed on Top in 2018 (and How they Plan to Stay There in 2019) (Financial Advisor IQ), Rated: A

    Robo advisor Betterment currently manages $15 billion in assets for its more than 400,000 customers, firm CEO Jon Stein tells FA-IQ. But at the start of 2016, Betterment’s AUM was just a little over $6 billion, Stein says. The firm has cemented its place on the 2018 Financial Times’ 300 Top RIAs list.

    Q: How has Betterment’s client base evolved?

    A: When Betterment was first launched, our customer base was mainly young folks in their twenties who were depositing $100-$500 to invest at a time. That client demographic has shifted dramatically over the years. Today, more than one-third of our business comes from customers who are at least 50 years old.

    2018 – Volatile Equity and Credit Markets (PeerIQ), Rated: A

    2018 was a volatile year for equity and credit markets, particularly in the fourth quarter. The S&P500 is down ~7.5% for the year, and cyclical stocks are down more. CDX IG spreads have widened ~40 bps and CDX HY spreads have widened ~150bps.

    ABS markets enjoyed record issuance. However, spreads widened, and all-in yields were higher leading to rate increases for borrowers and tighter margins for lenders. 2019 is shaping up to be a pivotal year in this late economic cycle. Synchronized global growth could turn into a synchronized slowdown. The risk of policy error is heightened as the Fed navigates record low unemployment and a slowdown in growth. The US yield curve has partially inverted and the all-important 3-month – 10-year yield spread is at ~37 bps.

    Kevin Tweddle of Independent Community Bankers of America (Lend Academy), Rated: A

    Our next guest on the Lend Academy Podcast is Kevin Tweddle. His official title is the Group EVP for Innovation and Financial Technology at the Independent Community Bankers of America (ICBA), the leading trade organization representing community banks. He is completely focused on fintech and helping community banks use technology to thrive in the future.

    Online Loan Marketplaces: Benefits, Challenges, and Enormous Growth (Small Biz Trends), Rated: A

    Financial technology (Fintech) and the internet have enabled the creation of online loan marketplaces. Marketplace lending is made possible by technology platforms that use scoring algorithms to determine the borrowers’ ability to repay.

    Fintech online loan platforms have started creating partnerships with banks and credit unions to reach small businesses who aren’t as comfortable dealing entirely online. Traditional lenders are eager to jump on the Fintech bandwagon to avoid being made obsolete.

    As a small business owner, will you consider online lenders to finance your business? The convenience of banking online is attractive to many who want to bank from anywhere. Online lender Kabbage says 17% of their loans have been accessed through mobile.

    Equifax Faces Scrutiny As Dems Take Over The House (PYMNTS), Rated: A

    A report in the Wall Street Journal, citing analysts, reported that legislative response to the massive Equifax data breach of 2017 is at the top of the agenda for 2019. The Wall Street Journal noted that existing proposals, some bipartisan, provide a glimpse into how changes can be made to the industry. The paper noted the changes would pertain to how the firms handle consumer information and could include tougher cybersecurity standards and making it easier for consumers to fix mistakes on their credit reports.

    White Oak Healthcare Finance Provides $ 161 Million to Support Allegiant Healthcare’s SNF Acquisition (AP News), Rated: B

    White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as sole lender and administrative agent on the funding of a $161 million senior credit facility for Allegiant Healthcare (“Allegiant”) and Hillstone Healthcare, Inc. (“Hillstone”). The funds were used to acquire and provide working capital for a portfolio of 17 skilled nursing facilities in Ohio.

    Five reasons Bitcoin could enter a more extreme death spiral (The Conversation), Rated: B

    The one upside to all this is that, although cryptocurrencies may have entered a death spiral, the blockchain economy is here to stay. As well as allowing safe peer-to-peer lending and transactions, it is being used to build more efficient supply chains and in the evolution of the internet of things – to name just a few of its applications.

    United Kingdom

    RateSetter passes £500m in lending on secondary market (P2P Finance News), Rated: AAA

    RATESETTER has passed £500m in lending on its secondary market, marking a major liquidity milestone for the platform.

    At the end of December 2018, the peer-to-peer platform revealed that a cumulative total of £500m in liquidity had been provided to investors via its secondary market. According to the platform, in the majority of cases investors were able to access these funds within one working day.

    Seedrs Tops £500 Million in Crowdfunded Securities (Crowdfund Insider), Rated: AAA

    In a blog post, UK crowdfunding platform Seedrs shared that it has now topped £500 million in investment crowdfunding. The money has been raised for 720 deals that have been successfully funded since the platform launched.

    P2P set for fundraising boom in 2019 (P2P Finance News), Rated: A

    P2P lenders raised more than £10m through crowdfunding platforms last year to boost their technology and operations, while almost £2bn was ploughed into the wider fintech sector.

    “39 fintech companies have used crowdfunding platforms to raise capital. This is a record level of crowdfunding investment into fintech companies and we expect to see more of this in 2019.”

    Robo-advice app for self-employed launches (FT Adviser), Rated: A

    A new robo-advice service designed especially for the self-employed and freelancers is expected to launch in the first quarter of 2019.

    The start-up, which received £1.5m after a funding round in late 2017, is currently in the Financial Conduct Authority (FCA) Sandbox, and hoping to receive authorisation in the next couple of months.

    iwoca adds Barclays and HSBC to Open Banking connections (Fintech Finance), Rated: B

    iwoca,the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking. This expands the number of Open Banking connections offered by iwoca to three, including Lloyds Bank, and will enable more than 60 percent of the lender’s customers to take advantage of the Open Banking service.

    Arbuthnot Commercial ABL provides £6.5m facility to Fluorocarbon Group (Specialist Banking), Rated: B

    Arbuthnot Commercial Asset Based Lending (ABL) has agreed to provide a £6.5m refinancing facility to fluoropolymer processor the Fluorocarbon Group.

    China

    China P2P Lending Crackdown May See 70% of Firms Close (Bloomberg), Rated: AAA

    The number of Chinese peer-to-peer lenders may drop by 70 percent this year, a research firm that tracks the industry says, as the nation intensifies a crackdown on riskier forms of financing.

    As few as 300 companies will remain by the end of the year, according to an estimate from Shanghai-based Yingcan Group. The number of operators dropped by more than 50 percent to 1,021 during 2018, it said, adding that there’s been no new entrants into the market since August.

    Tighter Reg Shrinks China’s P2P Lending Mkt By 50 Pct In 2018 (PYMNTS), Rated: A

    According to Yingcan Group, by the end of 2019, there will only be 300 P2P lenders remaining. During 2018, the market research firm said the number of P2P lenders declined by 50 percent to 1,021. What’s more, no new companies have entered the market since August.

    Yidai shuts shop as China intensifies crackdown on P2P lenders (Banking & Finance), Rated: A

    Yidai, an online peer-to-peer (P2P) lending intermediary, is the latest to exit the business as China reins in its US$176 billion experiment with this riskier form of financing.

    The company set up a committee to start refunding its lenders after “months” of losses, Yidai said in statements over the extended holiday weekend. It has about 32,000 lenders with an outstanding principal balance of four billion yuan (S$795.4 million), and expects to repay them in three-to-five years.

    International

    2018 was a standout year for fintech funding (Business Insider), Rated: AAA

    In the first half of 2018 alone, fintechs secured $57.9 billion, nearing the previous annual record of $62.5 billion set in 2015.

    Fintechs including UK neobank Revolut, US insurtech Root, US fintech for gig economy workersEarnin, Hong Kong-based alt lender Oriente, and US crypto exchange operator Coinbase all raised funding rounds of over $100 million this year.

    9 big ideas for 2019 (American Banker), Rated: AAA

    JPMorgan Chase collected more than $1.8 billion in revenue from overdraft fees in 2017, according to an analysis of regulatory data by the Center for Responsible Lending. Bank of America and Wells Fargo both raked in more than $1.6 billion. Big banks typically charge around $35 per overdraft. Many other institutions also rely on such fees.

    Give customers some control of their financial data

    For decades, banks, credit card networks and credit bureaus have been sharing and selling consumers’ financial data without their knowledge or consent while data aggregators have screen-scraped that information without the full cooperation of financial services providers.

    But there are signs that is beginning to change.

    Fintech Predictions for 2019 (Crowdfund Insider), Rated: A

    10. New Asset Class – New Asset Backed Lending for Crypto

    The likes of Nexo, SALT, CoinLoans & Unchained Capital have emerged in the recent months unlocking the value of your cryptocurrency. There is a list of crypto lending sites here.

    8. Banks will rule again

    We have seen big banks leveraging Fintech platforms from OnDeck and Avant in 2018. More of it will come in 2019 as banks begins to decentralize banking again.

    7. Everyone will be rich (unlocking home equity value)

    I attend a talk by Mike Cagney of Figure at 2018’s Lendit China conference. He’s creating something completely different to unlock the potential of the entire “supply chain” process from home equity lines of credit to bundling and tracking this asset class utilizing smart contracts and blockchain. He wants to eliminate the hurdles and ambiguity for the secondary market.

    As home equity value rises and interest rates increase, home equity products will need a ton of tech. It has become a forgotten art since the great depression. I am predicting that a lot more of Fintech companies will come to light in 2019 working with the banks to unlock consumers’ home equity value

    India

    Top 30 Fintech Influencers in India 2019 by Digital Fifth (Fintech News), Rated: AAA

    Amrish Rau : CEO at PayU India

    Amrish Rau is the CEO of PayU India, the country’s leading digital payment solution provider valued at around USD 2.5 billion. Previously, he had founded Citrus Pay, which was acquired by Naspers (PayU) in one of the largest startup acquisitions in India. PayU’s digital lending platform Lazypay has done extremely well with nearly 4.5 lakh customers already using it. He has also invested in multiple startups like Signzy, Elemential, Nuo and Open.

    Harshil Mathur : CEO & Co-Founder at Razorpay

    Harshil runs one of India’s most innovative Fintechs, Razorpay, which is morphing from a B2B Payment Gateway into a Financial Conglomerate. They have entered the lending business with Razorpay Capital, which has already reached an annual loan disbursal rate of USD 30 million.

    Manish Khera : CEO at Happy

    Manish is the founder of Happy Loans – one of the fastest growing MSME lending platform in the country.

    Naveen Kukreja : Co-Founder & CEO at Paisabazaar.com; CMO at Policybazaar

    Naveen is the co-founder and CEO of Paisabazaar.com. Under Naveen’s leadership, Paisabazaar.com has become one of the largest marketplace platforms for lending and banking products. Paisabazaar.com currently disburses annualized loans worth USD 1 billion to more than 1000 towns and cities across India.

    Red tape grounds P2P startups as investors stay clear of space (India Times), Rated: A

    The latest entrants into the digital lending sector, peer-to-peer lending platforms, are facing an uphill task attracting investors with regulatory restrictions limiting their growth potential.
    OMLP2P is a Mumbai-based lending platform and disburses around Rs 20 lakh per month. Another Mumbai-based P2P lending startup Paisadukaan’s founder Rajiv Ranjan also said that VCs have been shying away from this sector because of the limitation imposed by the RBI.
    Authors:
    George Popescu
    Allen Taylor

    The post Thursday January 3 2019, Daily News Digest appeared first on Lending Times.

    Thursday December 6 2018, Daily News Digest

    Consumer Spending

    News Comments Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018. Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019. Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest […]

    Consumer Spending

    News Comments

    United States

    United Kingdom

    International

    Southeast Asia

    Other

    News Summary

    United States

    SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA

    Late Friday Bloomberg reported that SoFi was cutting 7% of its staff, or around 100 jobs, in the company’s mortgage department. This is due to a change in strategy as to how they underwrite mortgage loans. Rather than underwrite loans themselves, as they have done since launching their mortgage business back in 2014, they will outsource the underwriting to a partner.

    KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA

    Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (“CLUB 2018-P3”). This is a $272.40 million consumer loan ABS transaction that is expected to close December 13, 2018.

    The transaction has initial credit enhancement levels of 30.87%, 22.80% and 9.70% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.

    This transaction is LendingClub Corporation’s eighth rated sponsored securitization, fourth of 2018 and the fifth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com.

    Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA

    Real estate marketplace lender Money360 announced on Monday it has surpassed $1 billion in loans originated and closed since inception. The announcement comes just 11 months after the lending platform revealed it had hit $500 million.

    Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA

    US Q3 GDP showed 3.5% annualized growth, well above potential growth of 2%. Growth slowed from the blistering 4.2% pace in Q2 due to rising inventories and lower consumer spending:

    Source: WSJ, PeerIQ
    Source: VantageScore, PeerIQ

    LendingTree Debt Report November 2018 (LendingTree), Rated: AAA

    Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.

    In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.

    43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A

    For the week ending Dec. 2, 2018, the share of borrowers with rates under 5% was the highest in two months, which may lend some support to a weakening housing market.

    Source: LendingTree
    Source: LendingTree

    LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A

    LendingTree today released its State Migration Study on where Americans are interested in moving. The study looked at where people moving out of state are going and discovered that of the 12.1 percent of homebuyers across the country who change states, most plan to head south.

    Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states.

    Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state.

    Source: LendingTree

    October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA

    October was a big month for Reg CF campaigns, according to the StartEngine Index. In fact, October booked the most money raised using the crowdfunding exemption since the rule became actionable in May of 2016.

    According to StartEngine, $10.9 million in funding was raised. Until October came along, this past July held the top spot at $10.7 million. The Index indicates that Reg CF has now raised $151.7 million since inception. The Food & Beverage industry remains the most popular sector to use Reg CF followed by Tech.

    Source: Crowdfund Insider

    Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA

    Installment payments have been around for seemingly forever but a new crop of fintechs are offering it with a twist: the ability to pay off smaller purchases in installment payments that in many cases are interest-free.

    And it appears to be resonating with scores of U.S. consumers judging from the brisk business installment payment services like QuadPay.com enjoyed during the kick off to holiday shopping season this past Thanksgiving weekend. David Sykes, chief operating officer at QuadPay.com said 35% of online Black Friday sales for one large merchant customer came via QuadPay. On average Sykes said its service accounts for around 20% of all the online transaction from its roughly 500 e-commerce partners.

    QuadPay.com makes money via the merchant, getting a cut of the sales generated by its service. That enables it to offer interest-free loans to consumers wanting to purchase everything from Uggs to underwear. Sykes said the average value of the orders on the platform is $150. QuadPay takes 25% of that on day one and then spreads out the remaining payments every two weeks. Because the average installment payment is around $37 there isn’t too much risk of customers defaulting on the loan.  To prevent default it won’t let a customer use the service again if they were ever late with a payment. The executive noted QuadPay approves 92% of all applicants.

    How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A

    In Business Insider Intelligence’s second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank’s mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.

    Source: Business Insider

    Why Wealthfront is offering free financial planning (Financial Planning), Rated: A

    Wealthfront is offering its planning services for free, effectively unbundling its software, and giving millions of Americans access to a financial roadmap.

    The second largest independent robo is betting the firm can steer users into fee-based accounts after they interact with its software to come up with a financial plan. The freemium software uses the firm’s automated advice engine, Path, according to the firm.

    Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A

    Building a great service is hard but not impossible. But building a great service and making it available for free — that’s really hard.

    Credit Karma seems to have figured out a way to do both. The company, with 85 million members in the U.S. and Canada, continues to roll out free, innovative financial products to its user base. It all began 11 years ago with a simple premise: to provide users with free access to their credit scores. From there, the company has rolled out a bunch of new products, including ID monitoring, tax preparation, a financial chatbot, auto finance, and unclaimed money.

    Betterment launches tool to optimize cash savings (Tearsheet), Rated: A

    Automated investment advisor, Betterment is rolling out “Two-Way Sweep”, a tool that can automatically “sweep” excess money from customers’ bank accounts into a Betterment account optimized to provide better returns for cash.

    What’s behind this new product: Studies show that only one in three millennials is investing in the stock market. That means they’re holding a high percentage of cash. In fact, Betterment sees 30 percent of customers with cash balances of $20,000 on average. This excess in savings earns little to no interest. Betterment’s Two-Way Sweep is intended to take the hesitation out of deploying more money into investments by automating the process.

    CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A

    CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.

    OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A

    Chicago-based fintech firm OppLoans has been honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2019. This marks the second year in a row that the personal lender has been named to this prestigious list in the Small & Medium Business category. The Employees’ Choice Awards program, now in its 11th year, is based solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies on Glassdoor, one of the world’s largest job and recruiting sites.

    Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A

    According to 2017 statistics from the FDIC, 16 percent of households in Mississippi are unbanked, choosing instead to use “predatory services” like corner store check cashing in their neighborhoods.

    Allen founded her first startup, an app development shop, while still in college. After moving to Silicon Valley, Allen realized it wasn’t just rural communities that were underserved by banks. Inner city areas across the country, most of which are home to majority Hispanic and African-American populations, are also affected. An FDIC survey found that more than 15 million adults in the U.S. go unbanked.

    In 2016, Allen founded CapWay with co-founder and fellow Mississippian Timothy Lampkin. The mobile-first platform is aimed at younger generations (think older millennials and Gen Z) in those unbanked communities to help them break out of the predatory economy cycle.

    Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B

    Finicity, a provider of real-time financial data aggregation and insights, announced today it is working with mortgage banker Princeton Mortgage to automate borrower asset verification for lenders. The agreement will provide Princeton Mortgage loan officers and borrowers with a faster, simpler loan origination experience that reduces both paper chase and headache.

    NBKC Bank fintech accelerator participant wins $ 1M (Biz Journals), Rated: B

    Onward Financial Inc., a member of the first cohort in NBKC Bank’s Fountain City Fintech accelerator program, won a $1 million award from the Communities Thrive Challenge, which is put on by The Rockefeller Foundation and the Chan Zuckerberg Initiative.

    United Kingdom

    P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA

    Back in 2005 Zopa quietly launched their P2P lending platform in the UK, the world’s first. It was the start of a lending revolution that has moved on to all corners of the globe. Today, a new chapter begins as the company announced that regulators have approved Zopa’s banking license. With that Zopa achieves another first: becoming the world’s first combined peer to peer lending platform and digital bank.

    Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA

    Zopa explained that this is called the “mobilisation’ phase” as regulators put some restrictions in place. A full licence will be granted once it meets the conditions set by the regulators.

    Zopa said it will begin its new service next year. The digital bank will include options such as a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), credit card and a money management app.

    Pointing to a statement by the FCA that just “40% of UK adults have confidence in the financial services industry,” Zopa sees opportunity in becoming a digital bank unencumbered by green-screen legacy tech and unnecessary brick and mortar branches.

    Zopa explained it would redefine banking with the following services:

    • Giving customers a fair deal as standard – with no catches like sign-up offers that aren’t available to existing customers or hidden fees and charges.
    • Making sure money management is simple and a real person is available to discuss
    • Going beyond ‘good enough’

    Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A

    ZOPA has insisted its peer-to-peer lending rates will not be dictated by the savings products on offer when its bank launched.

    It currently offers target returns of 4.5 per cent on its Zopa Core product and 5.2 per cent on Zopa Plus.

    Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A

    Other companies expected to be promoted to the FTSE 250 are peer-to-peer lending platform Funding Circle, the retirement housebuilder McCarthy & Stone and the investment trusts Smithson and Woodford Patient Capital.

    Funding the future of the UK PLC (Business Leader), Rated: A

    Looking at 2017, we saw some encouraging trends and one of them is in terms of diversity and choice. We saw peer-to-peer lending grow at over 50%. It’s obviously coming from a smaller base as it’s a reasonably new form of lending, but 50% growth is a very strong outcome.

    Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A

    Tandem Bank has announced its Journey Card has assisted nearly three-quarters (72 per cent) of its users to first-time credit or is helping individuals with poor credit history get back on track.

    Due to the higher risk users it targets, the credit card carries a reasonably expensive representative APR of 24.9 per cent.

    Tandem says it hopes to help the 43 per cent of Journey Card holders who have poor credit history, some of whom have defaulted with other providers.

    CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A

    Peer to peer property lender CrowdProperty is now disclosing their performance metrics using Brismo’s (formerly known as AltFi) standardized reporting methodology. CrowdPropert states that it is the first property development platform to incorporate the Brismo process which is described as an independent standard.

    UK housebuilders back new online property listing start-up (Financial Times), Rated: A

    Some of the UK’s largest housebuilders are backing a new property portal that will launch next year in the latest attempt to challenge the two dominant market leaders, Rightmove and Zoopla.

    Barratt Developments, Bovis, Persimmon and Redrow have signed up to list their homes with the start-up Rummage4Property, as have Countrywide and about 30 other estate agency groups.

    ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A

    Arbuthnot Commercial Asset Based Lending (ABL) has supported a highly experienced Management Buy In (MBI) team, led by Paul Hampton, with a £2m invoice discounting facility to support Premier House Investment’s acquisition of Ralph Coleman International Ltd (RCI) and provide ongoing working capital, paving the way for the company’s exciting expansion plans.

    KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A

    KAMBO is expanding beyond desktops to become accessible on our most coveted devices, our smartphones. With the introduction of two native apps, KAMBO’s lending platform will become one of the most flexible and diverse of its kind.

    The KAMBO app is now available on iOS and Android, making it the first crypto-lending platform to have an app in the App store.

    LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B

    Ingard, a compliance network, brokerage, and lending packager specialist, announced on Tuesday online lending platform LendInvest has joined its buy to let panel. According to Ingard, members may now access the lender’s buy to let range direct by registering through LendInvest’s online portal

    China

    Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA

    Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”) is pleased to announce that OneConnect, a subsidiary of the Group, ranked first in one of the world’s most authoritative machine-reading comprehension challenges — the Stanford Question Answering Dataset 2.0 (SQuAD). GammaLab Institute of Artificial Intelligence (GammaLab), owned by OneConnect, scored 83.435, close to the human performance level of 86.831, way ahead of other companies in the challenge.

    Another scenario is internet arbitration in universal financial inclusion. Small loan companies tend to turn to online arbitration, which is expensive and takes time to resolve, under the current peer-to-peer lending market. With the reading comprehension skill of GammaLab, the arbitrator will finish a case quicker, reducing the cost for arbitration.

    International

    International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA

    Mintosleads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 473 million Euro.

    I removed Unilend, as the platform has closed and the company has gone into receivership.

    Source: P2P Banking

    CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A

    CoreLogic, a global property information, analytics and data-enabled solutions provider, announced today the introduction of its Total Home Value for Originations AVM solution.

    The new Total Home Value for Originations solution is specifically calibrated and packaged to improve efficiencies when performing property valuations during the purchase and refinance loan underwriting process.

    Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A

    According to EY study, fintech startups have raised $41.7 billion in the first half of 2018 across the globe. So, what fintech strategies need to be implemented to transform the consumer experience on the market?

    • Consumers first
    • Rebuilding trust
    • Lack of credibility
    • Partnership instead of competition
    • Improving the quality of lives

    Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B

    Nasdaq has acquired Quandl, a Toronto-based provider of alternative and core financial data. Terms of the deal were not disclosed.

    Australia

    Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA

    Helio Lending is the first independent crypto lending company to launch on Australian shores according to reports.

    The company claims to be in the position to offer 50% more spending power to clients than they would have by holding on to their crypto assets.

    Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A

    Lodex, Australia’s first auction-style loans and deposits marketplace leader, today announced it has secured capital investment from Lakeba Group, an established Australian technology innovator.

    India

    India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA

    India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%, which also throws a huge opportunity for India to not only make best out of financial services sector but also to disrupt it.

    Southeast Asia

    How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA

    UberWeWorkSaudi Arabia. The biggest startup stories in 2018 shared one long and influential thread: Japanese conglomerate SoftBank, its $100 billion tech investment fund, and founder Masayoshi Son.

    The Vision Fund is backed by several prominent investors, including Apple and the government of Abu Dhabi, but its largest financial partner is Saudi Arabia’s sovereign wealth fund. The country’s government, under crown prince and de facto ruler Mohammed bin Salman, contributed 45 percent of the $100 billion, and in October announced plans to put another $45 billion into a second Vision Fund.

    P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA

    Peer-to-peer (P2P) lending has emerged as a popular alternative financing option for small and medium enterprises (SMEs) in Southeast Asia. In 2016, P2P lending generated US$115.01 million, which accounted for more than half of total market share of Southeast Asia’s alternative financing market. In an evolving financing landscape, P2P lending complements the services banks provide and support the region in realising its growth and development potential. The very fact that investment in the region’s startups tripled from US$2.52 billion in 2016 to US$7.86 billion in 2017 is a testament of the vast potential in Southeast Asia’s FinTech startups.

    Businesses, largely SMEs, benefited from such platforms too. According to a Deloitte report, SMEs contribute to 40% of Southeast Asia’s gross domestic product (GDP) and hiring 70% of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, especially in terms of financing. This is due to strict banking regulations imposed after the 2008 global financial crisis, which have made banks and most financial institutions increasingly risk-averse. This is evidenced by McKinsey Global Institute’s report stating that 39 million Southeast Asian SMEs (or 51%) lack access to credit.

    Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA

    Malaysia’s securities regulator may license more operators of equity crowdfunding (ECF) and peer-to-peer (P2P) lending platforms next year, after current operators raised more than 200 million ringgit (US$48.25 million) for small firms since the industry was legislated in 2015, according to its chairman.

    Singapore’s Milieu Insight raises US$ 730K to enhance market research platforms (e27), Rated: A

    Singapore- and Thailand-based marketing software startup Milieu Insight has announced that it has raised S$1 million (US$730,000) from a group of private investors including former Rippledot Capital Director, Ravi Ravulaparthi.

    Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A

    HonestFund (CEO: Sanghoon Seo) has announced that the company, one of the largest marketplace lending players in South Korea, has successfully raised $12 million Series B investment.

    Investment was led by Korea’s leading VCs and investment companies, such as Dunamu & Partners, MurexPartners, KB Investment, TL Asset Management, Bass Investment and HB Investment. This brings HonestFund’s total investment to $21 million, making it one of the most valuable Fintech companies in South Korea.

    Canada

    How experimental tech drives TD Bank’s mobile app (American Banker), Rated: AAA

    While many banks have sought to employ experimental technologies when dealing with customers, including predictive virtual assistants, geolocation and advanced data analytics, few have brought all those pieces together to the degree used by TD Bank.

    The bank has used such technologies live in production and won significant customer adoption, with its mobile app becoming No. 1 in the finance category in Canada for both iOS and Android. Mobile customers use the app 17 times a month on average, a figure that is growing.

    OnDeck to merge Canadian operations with Evolocity Financial Group (Seeking Alpha), Rated: A

    OnDeck (NYSE:ONDK) will combine its Canadian lending operations with Evolocity Financial Group, a private, Montreal-based online small business lender, to create OnDeck Canada.

    Africa

    Peer-to-Peer Lending as a Means of Propelling Startup Growth (Modern Ghana), Rated: AAA

    Capital is the livewire of any business, especially for startups and established small businesses. Hence, they are always seeking for some additional funding that is too small for an angel investor to get a return for their effort. Banks also think it’s not worth their time. That’s where peer-to-peer (P2P) lending is working to fill that lending gap. This model may be a solution for many small businesses that are struggling with just tapping smaller funding amounts.

    Authors:

    George Popescu
    Allen Taylor

    Tuesday November 27 2018, Daily News Digest

    Reliable Consumers for JP morgan, Citigroup, wells fargo and Bank of America

    News Comments Today’s main news: LendingClub hits $1B in CLUB certificate issuance. Zopa boosts Augmentum Fintech fund returns. Monzo breaks record on crowdfunding round. Yirendai’s critical stage to regain growth. Judo gets $350M in funding. Today’s main analysis: How late-cycle expansions turn into recessions. Today’s thought-provoking articles: LendingClub does more lending during holidays. Turning LendingClub into a financial health club. Why […]

    Reliable Consumers for JP morgan, Citigroup, wells fargo and Bank of America

    News Comments

    United States

    United Kingdom

    India

    Other

    News Summary

    United States

    LendingClub Reaches $ 1bn in CLUB Certificate Issuance (Lend Academy) Rated: AAA

    LendingClub has seen issuance of their new CLUB Certificate reach $1bn in less than a year after first announcing the pass-through security product last December at their investor day. The CLUB Certificate was created to make it easier for institutions to invest in LendingClub originated loans.

    Loan for the holidays: Lending Club loans out more during holiday shopping months (Thinknum Media) Rated: AAA

    This year was a record-breaking season for holiday shopping, as online spending surged 23.6% according to Adobe Analytics.

    But where is all that money coming from? While some consumers saved up for the season, others might have turned to loans, such as ones offered at Lending Club ($NYSE:LC), to pay down huge gifts or refinance debt from credit card spending.

    Outside of March 2016 — a month during an unusual stretch of time right before its chief executive Renaud Laplanche stepped down and a federal subpoena came in — Lending Club typically has the most loans issued by dollar amount in the months before the holiday season, according to data tracked since 2013.

    Source: Thinknum

    LendingClub CEO Working to Turn It Into a Financial Health Club (Web Pro News) Rated: AAA

    The CEO of LendingClub, Scott Sanborn, says that they are really looking to make membership in the club mean something and are working to take Lending Club and turn it into a ‘financial health club’ that will help people successfully manage expenses. He says that LendingClub helps by shining a spotlight on credit card debt which is the first step to doing something about it.

    A Looming Crisis in People’s Overall Financial Health

    We are seeing really an epidemic happening which is incomes have been stagnant for more than 20 years. All of people’s major expenses, healthcare, college, housing, is going up and it’s creating a real looming crisis in people’s overall financial health and it’s something that people just aren’t talking about. Close to half of Americans have credit card debts and they are more than twice as likely to talk about spousal infidelity than they are about the fact that they have credit card debt that they need to manage. We believe that by shining a spotlight on the problem it’s the first step to helping people do something about it.

    Top fintech VCs explain how PayPal missed a golden opportunity and why they wouldn’t invest in LendingClub today (Business Insider) Rated: AAA

    PayPal is arguably one of the biggest success stories to come out of Silicon Valley in the last 20 years. It launched the careers of Peter Thiel, Elon Musk, and Max Levchin and paved the way for other members of the “PayPal mafia” to make seed investments in a next generation of startups.

    “OnDeck and LendingClub have scaled, strong businesses now, but you’d never invest in those companies as startups today,” Harris said. “I don’t think you would look at unsecured personal lending or small-business lending, where you have to go out and acquire customers in the wild, with no special sauce. That’s 10-year-old thinking.”

    The current model many VCs advocate is for companies to find ways to offer additional services, like loans, to existing customers. Acquiring new customers can be expensive, and there’s a competitive advantage when you underwrite or target new services to existing customers, because they know more about them.

    PeerIQ’s Lender Earnings Webinar; Bank Exec Comments on the Credit Cycle (Peer IQ) Rated: AAA

    One of the main themes that we explored in the LEI was how late we are in the credit cycle. Most C-level executives were extremely are sanguine on the economy but are nonetheless taking precautions. PeerIQ’s view is “The good news — and the bad news — is that conditions don’t get better than they are now.” We recommend reviewing Bloomberg Julie Verhage’s “US Banks See Good Times Ahead Even as Many Prep for Downturn” for more.

    Source: Peer IQ

    How Late-Cycle Expansions Turn into Recessions

    The current US expansion that started in June 2009 is the longest on record at over 113 months. Late expansions are characterized by low unemployment, high consumer confidence, high asset values. We currently observe a near 50-year low unemployment rate, near record high consumer confidence, and the highest level of consumer credit outstanding (although well below peak per-capita debt levels).

    Ironically, it is these solid economic indicators that are responsible for the party coming to an end. In a simplified model, credit availability expands to the marginal borrower (e.g., new entrants, cov-lite corporate loans, thin-file credits, etc.) just until the marginal consumer or corporate loans creates more losses than expected. Lenders feel the pinch on credit performance and on funding due to rising rates. Lenders individually tighten lending leading to a reduction in the supply of credit on an aggregate basis.

    PeerIQ’s Q4 2018 Lending Earnings Insights Report (Lend Academy) Rated: A

    PeerIQ released their Q4 2018 Lending Earnings Insights Report which points to a number of themes showing the economy is strong but CEOs are striking a cautious tone. Delinquencies and defaults continue to be low as consumers have seen their wages rise and taxes drop. Lenders are increasing reserves as they anticipate credit to renormalize in the near future, saying the economy right now was too good to be true.

    Read the Full Report here.

    Excerpts:

    Regulators are increasingly focusing on the greater role of non-banks in consumer lending.Large money center banks continue to pull-back from riskier loans such as small business and consumer lending. Large banks instead have increased their credit facility volume 6x since 2010. FDIC Chair Jelena McWilliams cites the significant role of non-banks in origination as potential for systemic risk. The FDIC is contemplating granting ILC charters to non-banks – a major shift.

    Delinquencies and charge-offs in FinTech asset classes are near all-time lows, although charge-offs on prime credit are increasing. Enova (Subprime) and OnDeck (Small Biz) are seeing near cycle-low charge-offs, while LendingClub (Prime) is seeing higher delinquencies on newer vintages. The change in LendingClub’s charge-off estimates across loan grades was mixed. Charge-offs on grades B and C are estimated to be higher by 28 bps and 16 bps respectively QoQ.

    Small Businesses Are Poised for Growth, but Are Lenders Ready? (Business Wire) Rated: AAA

    Source Business Wire

    Betterment, Merrill Edge, Fidelity’s Go Lead the Pack in Digital Advice Branding, Claims Cerulli (Financial Advisor IQ) Rated: A

    Robo-advice pioneer Betterment is the pack leader in digital platform awareness among investors, a new Cerulli Associates study reveals. But Merrill Lynch and Fidelity aren’t far behind, the study shows.

    Among the more than 5,500 people polled, the Betterment brand was known by 15% of respondents, Merrill Lynch’s Merrill EDGE by 13%, and Fidelity’s Go by 12%. Trailing the three frontrunners was Charles Schwab’s Intelligent Portfolios and Vanguard’s Personal Advisor Services, which were each recognized by 10% of respondents, the study reveals.

    For its digital platform marketing awareness study, Cerulli polled investors under the age of 45 earning more than $125,000 annually and with more than $250,000 in investable assets.

    5 Business Loans You Can Get Without Being Profitable (NAV) Rated: A

    With the Bureau of Labor Statistics reporting over 415,226 startup firms less than 1 year old in 2017, it’s apparent that this category of business will need funding like never before. However, business loans are tricky. On hand, they tend to offer a larger line of credit to companies than personal loans or lines of credit. On the other hand, qualifying can be difficult and often requires you to provide at least two years of documentation that you are profitable.

    For the brand new business that hasn’t managed to turn a profit (yet), what is left? How can you get a cash infusion into your business in time to expand, add employees, support a product launch, or refinance existing debt? The following loans are a bit non-traditional, but just might be exactly what you are looking for in your quest for funding during your startup years.

    TD Bank Launches New Digital Mortgage Experience Powered by Roostify (Business Wire) Rated: A

    Roostify, a digital lending platform provider, announced that TD Bank, America’s Most Convenient Bank®, has leveraged Roostify’s technology to provide customers with a digital mortgage offering. This digital experience combines the latest in lending technology with a human-centric approach that gives TD Bank’s customers an accelerated, low-stress path to home ownership.

    The deployment now provides prospective homebuyers with useful tools to assist them in finding a loan that fits their needs and budget. Leveraging Roostify’s proprietary DecisionBuilder lead tool, TD Bank’s Digital Mortgage allows consumers to explore which loan products they qualify for, right from a simple-to-use web page. Consumers can then move on to apply for their chosen loan in minutes, and follow a streamlined, all-digital process for moving their loan through closing. With easy access to TD Bank’s expert loan team, homebuyers can enjoy both the convenience of a digital solution and reassurance of expert guidance as they navigate one of the most significant transactions of their lives.

    The Lending Alternatives Hopeful Investors Should Know Inside And Out (Forbes) Rated: A

    People buy real estate for many reasons — generating cash flow, a tax write-off, appreciation value. Some of the greatest profits are made when buying real estate in a down market. Seasoned investors and fortunate newcomers who purchased coastal residential property from 2012-2017 are sitting on healthy equity appreciation as well as competitive interest rates in the 3.5-5% range.

    The traditional path to buy a property is to obtain financing through banks, credit unions or a mortgage company. Following the 2008 housing crisis, traditional lenders implemented more strict guidelines: Stellar credit scores from 740 and above, stable employment, a low debt-to-income ratio, six months or more of liquid reserves.

    For hopeful investors unable to meet these demands, alternatives are to pay all cash or to finance the purchase using hard money financing or a private lender. By utilizing one of these two methods, buyers also do not have to be concerned with the mounds of paperwork lenders requested. There are some advantages and disadvantages by using either type of alternative financing.

    How Marcus by Goldman Sachs took to the streets of New York to market its high yield savings account (Tearsheet) Rated: A

    Marcus, the online consumer bank by Goldman Sachs, has been running a man-on-the-street ad campaign about recent research the company conducted. According to the survey, 60 percent of Americans with savings accounts don’t know the interest rate on their savings account, and *more than half* of Americans with savings accounts (56 percent) opened theirs without exploring other options.

    Dustin Cohn, head of brand and marketing communications at Marcus, joins the podcast to talk about the survey and why Marcus chose interest rates as a differentiator. We unpack the recent advertising campaign and explore the recent acquisition and integration of personal finance app, Clarity Money.

    Ross: Easy money and the rise of ‘neo banking’ (My NorthWest) Rated: A

    Banks are entering a whole new era. It’s called neo banking. Because it’s so “neo.”

    You just sign over your paycheck, and suddenly you can buy things with a wave of the phone. As far as I can tell, you just look romantically at what you want to buy – and it’s yours!

    You can even get loans. But it’s friendlier because neo banks don’t have loan officers who look at your income statement and say “Ha ha ha, you’re kidding!”

    United Kingdom

    Zopa helps boost Augmentum Fintech fund returns (Peer2Peer Finance) Rated: AAA

    ZOPA’S latest funding round has boosted the value of Augmentum Fintech’s portfolio, helping the fintech investment fund report net asset value growth of 5.1 per cent in its maiden financial results.

    UK-listed Augmentum Fintech unveiled its first financial results on Monday since launching in December 2017. It reported that a recent £60m private fundraise by Zopa had boosted the value of its stake in the lender by £3.5m to £22m.

    Augmentum Fintech Sees Portfolio Rise In First Interims Since IPO (Morning Star) Rated: A

    Augmentum Fintech PLC reported its first interim results Monday since listing on the London Main Market in March.

    In the period from incorporation on December 19 last year to September 30, the fintech venture capital investor had a net asset value total return of 5.1%.

    At September 30, Augmentum Fintech’s NAV per share was 104p. The company’s net assets at September 30 totalled GBP97.8 million.

    The company’s portfolio fair value increased 62% since the company listed in March to GBP53.9 million on September 30 from GBP33.3 million on March 13.

    Monzo confirms record-breaking UK fintech crowdfunding round (City AM) Rated: AAA

    Digital bank Monzo has today announced it will be heading back to the crowd for the last chunk of its series E fundraising round, with a target of up to £20m.

    The raise, first reported exclusively by City A.M. in August, will be the largest fintech crowdfunding round in the UK to date.

    Going live on Exeter-based platform Crowdcube, existing Monzo investors will get early access to the round from 3 December. The round will then be opened up to other Monzo customers, who can invest up to £2,000.

    Banking app Monzo explores expansion into high-cost loan products (The Telegraph) Rated: A

    Monzo, the financial technology start-up,  is considering launching loans aimed at “the Wonga segment” of the market, its chief executive Tom Blomfield said.

    Mr Blomfield said he hopes in future to offer loans to people with poor credit scores who may not be able to access more traditional loan products.

    UK Competition and Markets Authority Questions PayPal Acquisition of iZettle (Crowdfund Insider) Rated: A

    The UK Competition and Markets Authority (CMA) has issued a statement on the PayPal acquisition of iZettle – an event that was announced in early 2018 and closed in September. PayPal purchased Sweden based iZettle for $2.2 billion as the company seeks to gain access to iZettle’s point of purchase credit platform.

    The CMA stated:

    “… the CMA has found that PayPal could face insufficient competition in the UK after acquiring its market-leading rival. The finding raises concerns that the merger could result in customers, which include small and medium-sized businesses, paying higher prices or receiving a lower quality service.”

    The CMA added that iZettle could have provided strong competition for PayPal if the company had not moved to take over the Fintech.

    NatWest digital loan ceiling lifted to £700K (FinExtra) Rated: A

    NatWest has today announced the launch of a new digital platform which will be available to all NatWest business and commercial customers allowing them to apply online for secured and unsecured loans of up to £750,000 – the largest digitally available loans in the industry.

    The new platform, available to all business and commercial banking customers who use online banking, will allow applicants to complete the process in a matter of minutes, with a decision being communicated to customers usually within 24 hours, sometimes immediately. This fully digitised application process streamlines the customer experience and reinforces NatWest’s position as the UK’s leading commercial lender.

    NatWest’s development underlines the bank’s commitment to further improving its digital offering and builds on the success of its ESME Loans platform, which provides loans of up to £150,000, Mettle – the standalone digital business current account, and LenderComm, the first production use of blockchain in the syndicated loan marketplace.

    Arbuthnot Commercial Asset Based Lending supports acquisition of Euxton Tile Supplies Ltd (Bridging Loan Directory) Rated: B

    Arbuthnot Commercial Asset Based Lending (ABL) has supported the acquisition of Euxton Tile Supplies Ltd (Euxton) by Earle Group with a £2m asset based lending facility, comprising a £1,250,000 confidential invoice discounting line and a £750,000 cash flow strip to provide the desired level of headroom in the transaction.

    Wonga to automate compensation claims (TNT Magazine) Rated: A

    Wonga, the payday lender that went into administration this August, plans to automate its compensation claims process – sparking fears that customers will lose out. Accounting firm Grant Thornton is in the process of winding up Wonga and is legally obliged to assess the claims of all customers who believe that they have been mis-sold loans.

    The Guardian reports that in a bid to cut costs the administrators are creating an automated ‘adjudication tool’ that will decide which claims to pay out on, rather than processing each claim manually.

    In its October letter to creditors, Wonga said that it had been receiving roughly 200 to 500 compensation claims every day after it went into administration on 30 August. Before that date the company had received 24,000 complaints from customers and a further 9,500 had been escalated to the Financial Ombudsman Service.

    Proplend Milestone: Surpasses £50 Million in Online Lending (Crowdfund Insider) Rated: A

    Less than six months after surpassing £40 million in online lending, UK based peer to peer lender in the property space, Proplend, announced on Monday it has now reached £50 million in online lending. According to the lender, all loans are commercial property backed, comprising a mix of bridging and mortgage lending risk-adjusted returns, which were funded by the lending platform’s growing band of Classic account, Pension account, and ISA “Lenders.” Proplend also revealed:

    “By circumventing the traditional banking system, our Lenders have access to secured, inflation-beating fixed income returns whilst providing creditworthy commercial borrowers with an invaluable source of fast, flexible, interest only alternative funding. Having facilitated its first loan in 2014, Proplend has since accommodated over 50 commercial facilities, each loan typically funded within 24 hours by more than 100 participating Lenders. With a maximum loan term of 5 years, 20 loans have fully repaid to date with more than £15m capital returned and over £4m interest earned across the book – much of it tax-free.”

    China

    Yirendai Is At A Critical Stage To Regain Growth (Seeking Alpha) Rated: AAA

    Yirendai Ltd (NYSE: YRD) released the third quarter 2018 earnings on November 12, with diluted Earnings per ADS of RMB2.43 (USD$0.35), decreased from USD 0.5 from second quarter. Considering the application of ASC 606, the adjusted earnings per ADS (if ASC were not adopted) is RMB 5.89 (USD 0.86), increased from RMB 4.91 in the same period from last year.

    1. The volume of newly originated loans has been decreasing, more than the loan volume decrease of the industry. We can compare YRD’s loan volume with the industry, as well as some competitors, as below.
      Source: Seeking Alpha

    WeiyangX Fintech Review (Crowdfund Insider) Rated: A

    Ping An Invests $47 million in Berlin-based Fintech Startup Finleap

    The Ping An Insurance Group’s Global Voyager Investment Fund led a €41.5 million ($47 million) investment towards Berlin-based Fintech company Finleap.

    Internet Finance Association of Jiangxi Province Issues P2P Exit Guidelines

    On November 16, the Internet Finance Association of Jiangxi Province issued the “Guidelines for the Exit of Online Lending Intermediary Organizations in Jiangxi Province (Trial)”, stating that online lending institutions should put the rights of protecting lenders at the top of their exit work and minimize the loss of lenders. The guidelines specifically mention that when a P2P institution exit, it needs to take eight steps, namely:

    (1) to file an application for withdrawal;

    (2) to set up an exit work leading group;

    (3) to issue an exit notice and close some platform functions;

    (4) to prepare a business list of circumstances and formulate an exit plan;

    (5) submit an exit plan and other related materials;

    (6) publish relevant information such as the exit plan;

    (7) implement the lender’s funds as planned, and steadily settle the stock items;

    (8) completion of the exit.

    European Union

    Lendingblock Receives In-Principle Licence as DLT Provider in Gibraltar (Crowdfun Insider) Rated: AAA

    Securities lending platform for digital assets Lendingblock has issued a statement indicating that the Gibraltar Financial Services Commission (GFSC) has made an in-principle decision to grant the firm authorization as a Distributed Ledger Technology (DLT) provider. Lendingblock adds that it continues to work closely with the GFSC as it seeks the full DLT licence.

    Lendingblock says that following this decision, and the successful testing period, the Lendingblock platform is open for institutional onboarding in preparation for launch.

    Market participants are now able to sign up for access and will be able to commence borrowing and lending  BTC, ETC, BCH, and LTC beginning early next year.

    Digital lenders ‘must keep investing to grow’ (IBS Intelligence) Rated: A

    Research from digital ID specialist Mitek has concluded that there is a huge opportunity for digital lenders to grow, if they continue to invest in digitisation.

    The findings have been published as a whitepaper, authored by fintech research practice Autonomous NEXT. Titled European Digital Lenders, it looks into the state of the digital lending market in Europe.

    He said the report found that venture capital investment is still flowing into the space and is set to hit $800m in Europe: “The UK alone has originations of over $6bn, and Europe-wide, the addressable market is $150bn – with current digital lender revenues estimated at $400m,” he added. “Moreover, the market shows impressive originations growth, with a 60% CAGR since 2013.”

    Australia/New Zealand

    Australian challenger bank Judo gets $ 350m funding boost (Fintech Futures) Rated: A

    Melbourne-based challenger bank Judo Capital is edging towards a bank licence with a $350 million debt facility agreement with firm Credit Suisse.

    The bank shared the news with Business Insider. David Hornery, co-founder and co-CEO of Judo, says the facility will provide further depth to Judo’s funding for Australian SMEs.

    Short-term loan, long-term debt: Superloans under investigation after slew of complaints (Stuff) Rated: A

    Short-term money lender Superloans has come under attack from people who say they target poor and vulnerable consumers, charge extremely high interest rates, and resort to illegal means for recouping their money.

    The Commerce Commission has launched an investigation into Superloans after it received more than 20 complaints against the company since 2013 – several from financial advisors.

    Copies of the complaints, obtained under the Official Information Act, reveal one complainant alleged Superloans threatened to take repayments out of a person’s pay cheque, illegally.

    Another woman complained that a Superloans’ employee only looked at her bank statements before approving her loan application, and did not check her credit.

    India

    IvyCap Ventures makes first investment in P2P lending through Lendbox (The Ecomonic Times) Rated: AAA

    Credit marketplace LendBox has secured the first investment by a large institutional investor in India’s peer-to-peer lending space, raising Rs 6 crore in a pre-series A financing round.

    Major Trends Witnessed this year in Fintech (Entrepreneur) Rated: A

    Online lending platforms have been quite phenomenal in filling in the credit void within our country. But how accomplished are they in doing so? MSME loans are considered as the trickiest element of lending given the sheer opacity that exists within the sector. This opacity has decreased the share of scheduled commercial banks in MSME credit from 95% to 90% between December 2015 and March 2018. The credit growth turned negative post-demonetization. During the same period, the share of loans by NBFCs (which are essentially used by online lending platforms) nearly doubled growing with an annual average of 35 per cent, largely because of cutting-edge technologies such as Artificial Intelligence and Big Data.

    5 ways to reduce risk in P2P lending (The Economic Times) Rated: A

    Lending money is a risky affair. However, there are ways to minimize the risk. Since peer-to-peer (P2P) lending is a relatively new concept and the RBI regulations for the P2P sector are barely about a year old, here are five effective ways in which you can reduce the risk to ensure getting your money back. Of course, with interest.

    Understand the platform
    You should try to understand how the online P2P model works before lending money on it. An investor should be aware how the money is lent on the platform and what are the risks involved in lending money on the platform.

    Do not hesitate to ask the P2P player about the overall volume, defaults, recovery process and likely returns. You can do your own research or simply contact the P2P company through emails, chats or phone calls.

    Do not go overboard
    Sure, P2P platforms can offer your higher double-digit returns. But that doesn’t mean you should lend your entire in P2P lending. Choose the amount you wish to invest and then diversify,” says Raghavendra Pratap Singh, Co-Founder, i2ifunding.

    Ex-Infosys CFO & Director V. Balakrishnan Joins Association of NBFC P2P Platforms as Patron Member (Indian Web) Rated: B

    Within a month after the formation of NBFC-P2P industry bodyAssociation of NBFC P2P Platforms, the association today announced the joining of finance industry veteran & Former Infosys Chief Financial Officer V Balakrishnan as Patron Member.

    P2P lending industry players have formed association to represent the Indian NBFC-P2P industry at various national as well as at international forums. The P2P operators participating in the operations are OML P2P, Monexo, PaisaDukan, Finzy, Cashkumar, Liquiloans, Micrograam, Lendsmartp2p, Peerlend and Indiamoneymart. The association aims to establish formal lines of communication between various government and regulatory authorities on matter of compliance and to create awareness about the industry and to work towards enhancement of public trust in this sector.

    Asia

    HonestFund Raises $ 12.2 million (USD) in our Series B round (Honestfund Email) Rated: AAA

    HonestFund is one of the largest peer-to-peer lending players in South Korea. We were founded in 2015 and currently have about USD 300 million in cumulative originated loans. We have recently raised USD 12.2 million in our Series B round from the top VC firms, IT giants, and the largest financial institutions (i.e. Shinhan Bank and Hanwha Life Insurance) in South Korea.

    Canada

    Unlicensed online payday lenders are operating in New Brunswick (Global Newswire) Rated: A

    Unlicensed online payday lenders are targeting New Brunswickers, warns the Financial and Consumer Services Commission.

    FCNB has been receiving complaints from consumers about inappropriate collection practices by payday lending businesses not licensed to operate in the province.

    “We are hearing that these businesses are contacting consumers who have fallen behind in their payments at their place of employment and in some cases, threatening to seek repayment from their employer. Sometimes they are contacting them up to 50 times a day,” said Alaina Nicholson, director of Consumer Affairs at FCNB. “It is against the law for a payday lender in the province to contact you at your place of work, or to contact your employers or coworkers to collect a payday loan that is late.”

    Subscribe Technologies Upgrading Lendertech With Peer To Peer Lending Service And Integrating Platform Into Gingerly Marketplace (Stockhouse) Rated: A

    Subscribe Technologies Inc. is pleased to announce it is upgrading the Company’s Lendertech financial technology platform with financial service auction and matchmaking features and has begun the initial phase of integrating the technology with the Company’s flagship Gingerly small business software application marketplace.

    LenderTech facilitates greater and broader access to capital for those in need, including across a number of traditional and emerging areas such as mortgages, commercial lending, auto loans, student loans, and small business loans, among others.

    As intended, our development team is now integrating this money lending service into the Gingerly software application marketplace and dashboard, with the addition of new Peer-to-Peer matchmaking features, designed for SMEs to have greater and faster access to lenders in one clean and simple to use interface.

    IOU Financial Inc. Joins the FINSYNC Lending Network  (PR Newswire) Rated: B

     IOU FINANCIAL INC., a leading online lender to small businesses (IOUFinancial.com), is pleased to announce its strategic partnership with FINSYNC, Inc. (“FINSYNC”).

    Small businesses of all types rely on FINSYNC to visualize, manage and project cash flow and analyze loan options.  IOU’s non-collateralized financing product has been assimilated by FINSYNC, enabling users who apply for financing through FINSYNC to quickly access IOU’s affordable, flexible financing for working capital and expansion.

    Africa

    Nigeria’s mixed signals on fintech (Euromoney) Rated: AAA

    Earlier this year, the country’s central bank and the Nigeria Inter-Bank Settlement System opened a regulatory sandbox to enable budding fintech companies to develop new products freely and securely, becoming one of the first African countries to do so.

    Even before that launch, Nigeria was frequently touted as the continent’s next big fintech hub, set to compete with South Africa and Kenya.

    Bitcoin exchange NairaEx, online lender KiaKia and invoicing platform Payant are just three of the firms that have made a name for themselves in short order.

    Authors:

    George Popescu
    Allen Taylor

    Thursday October 18 2018, Daily News Digest

    Major US Banks Active Mobile Banking Users

    News Comments Today’s main news: Upgrade to debut ABS bond. KBRA assigns preliminary ratings to Upgrade Receivables Trust 2018-1. Funding Circle launches free iPad incentive. China’s P2P lending is in trouble. Today’s main analysis: State laws put installment loan borrowers at risk. (A MUST-READ) Today’s thought-provoking articles: SoFi’s data science head on machine learning and non-traditional lending. LendingClub’s Bill Walsh says […]

    Major US Banks Active Mobile Banking Users

    News Comments

    United States

    United Kingdom

    International

    Other

    News Summary

    United States

    Online lender Upgrade prepares debut ABS bond  (International Financing Review) Rated: AAA

    Upgrade, an online lending company started by former LendingClub founder Renaud Laplanche, is looking to sell a debut asset-backed bond deal, four people with knowledge of the deal told IFR on Wednesday.

    KBRA Assigns Preliminary Ratings to Upgrade Receivables Trust 2018-1 (Business Wire) Rated: AAA

    Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Upgrade Receivables Trust 2018-1 (“UPGR 2018-1”). This is a $286.390 million consumer loan ABS transaction that is expected to close October 30, 2018.

    This transaction represents the first ABS securitization collateralized by unsecured consumer loans originated through the online marketplace lending platform operated by Upgrade, Inc. (“Upgrade”) and the first from the Upgrade Receivables Trust (“UPGR”) shelf. Upgrade Receivables Trust 2018-1 (“UPGR 2018-1” or the “Issuer”) will issue four classes of notes totaling $286.390 million. The proceeds from the sale of the notes will be used to purchase the loans and related rights from Upgrade Receivables Depositor LLC (the “Depositor”), who purchased the loans from the unaffiliated transferors, to fund the reserve account and to pay transaction expenses. The Depositor will in turn sell the loans to the Issuer.

    Preliminary Ratings Assigned: Upgrade Receivables Trust 2018-1

    Class Preliminary Rating Expected Initial Class Principal
    A A (sf) $187,308,000
    B BBB (sf) $32,569,000
    C BB (sf) $28,440,000
    D B (sf) $38,073,000

    SoFi’s data science head: Opening the funnel to non-traditional borrowers with machine learning (Thomson Reuters) Rated: AAA

    ANSWERS: What are some of the issues in machine learning that you are working to solve for right now?

    WU: I think where machine learning plays the biggest role is in datasets that have extremely high numbers of dimensions, very low signal ratios and very sparsely populated values. For example, people in lending use data from the bureau. There are millions and millions of rows, there are thousands and thousands of columns. Each specific field has very little to no signal and each person has very few things that are actually populated. Those are opportunities where machine learning, particularly deep learning, has an extremely high potential.

    ANSWERS: How can machine learning assist with lending decisions, and how does one keep bias from creeping into that?

    WU: When making a decision on creditworthiness, machine learning can help lenders look at metrics beyond FICO and income. Whether it’s adding more information to traditional metrics versus determining creditworthiness of applicants without a full credit history, machine learning can drive tighter risk management while assessing borrower’s creditworthiness where traditional models cannot.

    LendingClub’s Bill Walsh: ‘At its core, marketing is a data problem’ (Tearsheet) Rated: AAA

    Today’s marketer on the hot seat is Bill Walsh, LendingClub’s general manager and head of marketing for personal loans. Bill brings an engineer’s approach to marketing. The MIT grad began his tenure at Lending Club in an operations role, where rigorous problem solving was used to solve some of the biggest problems in the business. Now that he’s leading marketing on the consumer side, he brings a similar approach.

    We talk about how LendingClub defines marketing and approaches channels. We pay particular attention to a recent TV campaign you might have seen over the summer of 2018. Measuring and responding to the signal is core to LendingClub’s approach and in the course of this four week broadcast campaign, Bill’s team iterated twice. This puts ad agencies on notice — this is the new data-driven fintech marketing world.

    Mobile banking is reaching a saturation point in the US (Business Insider) Rated: AAA

    JPMorgan Chase counted32.5 million active mobile banking customers in Q3 2018 — an 11% year-over-year (YoY) increase from 29.3 million in Q3 2017.

    That’s up from the 31.7 million active mobile customers in Q2 2018, but is also a slight deceleration from the 12% YoY growth in Q3 2017— following several quarters of decelerating growth: Chase has been adding around 800,000 mobile users on a quarterly basis.

    Wells Fargo counts 29 million total active digital customers — 22.5 million of which use mobile banking. This marks an 8% annual increase in mobile banking customers, but a 4% YoY increase in total digital customers, demonstrating that most of its new customers are coming from mobile channels.

    Source: Business Insider

    State Laws Put Installment Loan Borrowers at Risk (PEW) Rated: AAA

    Pew’s analysis found that although these lenders’ prices are lower than those charged by payday lenders and the monthly payments are usually affordable, major weaknesses in state laws lead to practices that obscure the true cost of borrowing and put customers at financial risk. Among the key findings:

    • Monthly payments are usually affordable, with approximately 85 percent of loans having installments that consume 5 percent or less of borrowers’ monthly income.Previous research shows that monthly payments of this size that are amortized—that is, the amount owed is reduced—fit into typical borrowers’ budgets and create a pathway out of debt.
    • Prices are far lower than those for payday and auto title loans. For example, borrowing $500 for several months from a consumer finance company typically is three to four times less expensive than using credit from payday, auto title, or similar lenders.
    • Installment lending can enable both lenders and borrowers to benefit. If borrowers repay as scheduled, they can get out of debt within a manageable period and at a reasonable cost, and lenders can earn a profit. This differs dramatically from the payday and auto title loan markets, in which lender profitability hinges on unaffordable payments that drive frequent reborrowing. However, to realize this potential, states would need to address substantial weaknesses in laws that lead to problems in installment loan markets.
    • State laws allow two harmful practices in the installment lending market: the sale of ancillary products, particularly credit insurance but also some club memberships (see Key Terms below), and the charging of origination or acquisition fees. Some costs, such as nonrefundable origination fees, are paid every time consumers refinance loans, raising the cost of credit for customers who repay early or refinance.
      Source: PEW

    Read the full report here.

    Bank Of America’s Zelle Boosts P2P Transactions 138 Pct In Q3 (PYMNTS) Rated: A

    Bank of America cut expenses and reduced its provision for credit losses as the financial institution also beat analysts’ revenue and earnings expectations. Bank of America, in reporting its latest financials on Monday, also said that Zelle P2P payment transactions increased 138 percent year over year.

    Revenue increased about 4 percent year over year, hitting $22.8 billion, higher than analyst expectations of $22.67 billion. The financial institution reported earnings per share of 66 cents, which represents a 43 percent year-over-year increase and is above analyst expectationsof 62 cents. Net income grew 32 percent to $7.2 billion.

    Bank of America said its provision for credit losses decreased $118 million during the third quarter of 2018, to $716 million. “The net reserve release was $216 million, driven by continued improvement in consumer real estate and energy portfolios,” the bank said in its Q3 financial report.

    As digital banks proliferate, so do risks (American Banker) Rated: A

    Facing intense deposit competition from online-only banks such as Ally Financial and Goldman Sachs’ Marcus, many traditional banks are looking to turbocharge their deposit gathering by launching — or considering launching — digital banks of their own.

    PNC Financial Services Group is the latest big bank to join the fray, recently rolling out a digital-only bank in markets where it lacks a brick-and-mortar presence. Like JPMorgan Chase, Citizens Financial Group and a number of other regional and community banks, PNC is counting on its digital bank to attract low-cost deposits to fuel loan growth while also helping it reach new demographic groups.

    Early results have been promising — PNC CEO William Demchak said Friday that he’s been “pleasantly surprised” by the response in the Kansas City, Mo., market — but with the space becoming so crowded, industry watchers are beginning to question if the U.S. marketplace can reasonably support so many new digital banks.

    Source: American Banker

    Outside Financial Launches to Help Consumers Save up to $ 3,000 on Auto Loan Packages (PR Newswire) Rated: A

    Outside Financial, an independent auto loan marketplace, launched its consumer-first platform today to bring transparency to auto finance. The company is the first to offer full auto loan packages outside of the dealership, which can save customers $1,000 to $3,000, along with time and hassle. Outside Financial also arranges refinances for existing borrowers.

    In 2017, Americans racked up $568.6 billion in auto loans1, yet 60 percent of buyers don’t know they can bring their own financing to the dealership. The company’s new Outside Financial (OF) Markup Index* reveals that, on average, new car buyers are charged $1,717 in hidden markups when arranging their loans through a dealer.

    Individual Investors Can Now One-Click Invest in Commercial Real Estate with CrowdStreet’s “Blended Portfolio” Offering (Benzinga) Rated: A

    CrowdStreet, which operates the largest and most diversified online marketplace for direct equity investment in U.S. commercial real estate, is now raising $25 million for the company’s first CrowdStreet Blended Portfolio investment offering. To provide individual investors and registered investment advisors another way to diversify their investments with commercial real estate, the company plans a series of diversified and specialty portfolio investment options that will collectively raise and invest up to $170 million.

    The first CrowdStreet Blended Portfolio’s proceeds will be deployed across 30-50 pre-vetted projects on the CrowdStreet marketplace, representing a broad range of commercial and multifamily asset types, risk profiles and geographies.

    Credible.com Unveils First Truly Consumer-Centric Mortgage Marketplace (Business Wire) Rated: A

    Credible.com, the leading online loan marketplace, announces the launch of its first-of-its-kind mortgage marketplace. Credible.com is the only mortgage marketplace that provides actual rates from top lenders in 3 minutes (without affecting a borrower’s credit score), and a streamlined digital origination process. The platform is designed to save borrowers frustration, time and money.

    The Credible.com mortgage marketplace builds on the success of the company’s marketplaces for student loans, student loan refinancing, and personal loans, which have facilitated more than $1.6 billion in loans to date. The first product offered through the mortgage marketplace is mortgage refinancing, which went live today in 20 states that collectively represent 65 percent of mortgage originations.

    Talking Regulation at the Online Lending Policy Summit (Lend Academy) Rated: A

    The big topic of the day was the OCC’s Special Purpose National Bank Charter also known as the Fintech Charter. The topic was laid out for the audience by the first keynote speaker, Grovetta Gardineer, the Senior Deputy Comptroller for Compliance and Community Affairs at the OCC. She talked about the history of the OCC going back to 1863, with the National Banking Act, when the dollar supplanted state currencies as the sole currency of the United States, a revolutionary idea back then. Ms. Gardineer reaffirmed the authority of the OCC to introduce a national fintech charter and talked about how companies should proceed if they are interested. While she would not comment on specifics she did say that the OCC is currently having preliminary conversations with fintech companies but no formal application has been received yet.

    The new head of the CFPB’s Office of Innovation, Paul Watkins, talked about the importance of the regulatory sandbox concept. He was one of the architects of the Arizona fintech sandbox and he is bringing that knowledge with him to Washington. He talked about the two main tools to help facilitate innovation at the CFPB: their trial disclosure program and the no action letter.

    How Dealstruck Arrived, “Disrupted,” and Died – A Cautionary Online Lending Tale (deBanked) Rated: A

    A self-described member of the “lucky sperm club,” a not-even 30-years-old Senturia went on to successfully raise $30 million of investor capital to fund his business, enough to fuel his rise and price-shame his competitors for years. But it wouldn’t last, as he detailed in book, Unwound, about the behind-the-scenes chaos that ravaged Dealstruck until the company closed for good in late 2016.

    AFR Wholesale announces partnership with Floify (Housingwire) Rated: B

    AFR Wholesale and Floify shook hands on a partnership, and AFR will now use Floify’s point-of-sale technology.

    AFR’s goal in partnering with Floify, a 2018 HW Tech100 winner, is to reduce origination time and increase broker productivity. According to the release, Floify’s POS platform can save up to 15 hours of processing time per loan.

    This is only one of an ever-increasing number of companies partnering with software companies or developing their own tech solutions in hopes of increasing productivity and getting some breathing room in the margin department in this tough mortgage market.

    iintoo Launches Principal-Protection Product for Retail Investors Supported by Insurance Provided by Everest (iintoo Email) Rated: B

    Online Real Estate Investment Management Company iintoo Investments Ltd. (“iintoo”) launched Epiic (Equity Protection Investment Community), the first-of-its-kind real estate investment product that provides principal protection for private accredited investors. Supported by insurance provided by an affiliate of Everest Re Group, Ltd. (NYSE:RE), a leading international reinsurance and insurance organization with operations that span the globe, and a social community pool, Epiic offers two layers of protection for investors’ principal.

    iintoo opens up access to real estate investments that were once exclusive to professional funders and high-net-worth individuals. Starting at $25,000, accredited investors can invest in ownership shares in projected high yield, premium real estate projects.  Each project undergoes a rigorous due-diligence and approval process provided by iintoo.  In order to assess the risk factors in real estate investing, iintoo also conducted a thorough analysis of the real estate market in the United States, taking into consideration all sectors in all 50 states over the past 30 years.

    TRANSACT Tech San Francisco to Examine the Impact of Software Providers on the Payments Industry (PR Newswire) Rated: B

    The Electronic Transactions Association (ETA) will bring together executives from leading banking, payments and FinTech companies on November 1, 2018 for TRANSACT Tech San Francisco at the Wells Fargo Connections Center. The event will explore how software services are changing the way key ecosystems players – processors, banks and hardware manufactures – serve merchants and channel partners.

    The day-long conference will kick-off with a fireside chat with Secil Watson, Executive Vice President and Head of Digital Solutions for Business at Wells Fargo. “Customer expectations are changing rapidly, and pace of change in technology is accelerating.” said Watson. “Yet we still have cash and checks. What can we learn from today’s customer experiences to build a better payments ecosystem for tomorrow?

    Finicity Partners with Freddie Mac to Provide Industry-Leading Automated Income and Asset Assessment Solution (Finicity Corp) Rated: B

    Finicity, a leading provider of real-time financial data aggregation and insights, announced today it has been selected as a third-party service provider for the new Freddie MacLoan AdvisorSM automated income and asset assessment capabilities, which provide a faster, easier way for lenders to verify loan application data upfront. Finicity’s digital verification reports greatly improve efficiency and accuracy, while also providing a simpler, more pleasant borrower experience.

    Freddie Mac announced its new income and asset assessment capabilities at the Mortgage Bankers Association Annual Convention & Expo earlier today. Finicity’s verification reports are integrated within Freddie Mac Loan Product Advisor®, the cornerstone of Loan Advisor Suite.  When the capability goes live later this quarter, asset verification will be generally available and income verification will be available as a limited release.

    United Kingdom

    Funding Circle launches ‘free iPad’ incentive (Peer2Peer Finance) Rated: AAA

    LISTED peer-to-peer platform Funding Circle is enticing new investors by offering a free iPads. But there’s a catch – they have to add at least £30,000 to their Funding Circle accounts before 16 November.

    The P2P platform is also offering a number of other cashback and ‘giftback’ incentives to lenders who invest lower amounts of money.

    Investors who add £20,000 to their Funding Circle accounts will receive £200 in John Lewis vouchers, while those adding £15,000 will get an Amazon Echo.

    LendInvest Update: Accelerates BTL Production Application Volume Thanks to Rate Reductions (Crowdfund Insider) Rated: A

    UK-based online lender LendInvest announced last week it has reduced rates and product fees across its Buy-to-Let product range. According to LendInvest, the pay rate for its five year fixed rate product has dropped to 3.60%, with the ICR calculation at a pay rate of 3.60%. Meanwhile, product fees for all BTL mortgages on standard property and HMO cases have been reduced to 1%, with borrowers who prioritize leverage in mind.

    The lending platform also reported that for a limited time, valuation fees have been reduced to £100 for all standard property cases. LendInvest will now cover the borrower’s legal fee scale costs for standard property, standard conveyance cases, where dual representation is selected.

    You think it’s going to be easy challenging the big banks? Think again (The Times) Rated: A

    here has never been a more opportune moment for the pack of digital upstarts looking to topple the institutions that dominate the financial industry. Rarely does a week go by when a big bank does not suffer an IT meltdown, spewing sensitive data into the ether or freezing customers out of their accounts.

    A decade after the collapse of Lehman Brothers, public distaste for the high street banks remains at elevated levels. Two thirds of Britons do not trust big banks to act in the best interests of society, according to a recent YouGov poll. The advent of smartphones, meanwhile, has fundamentally altered consumers’ expectations of their relationship with service providers.

    Amex brings SME financing to UK with ezbob (Banking Tech) Rated: A

    American Express (Amex) has partnered with online financing platform ezbob to offer UK SMEs competitive access to finance.

    Through this partnership, eligible Amex business clients will receive a referral to apply for up to £300,000 in finance from ezbob at a fixed annual interest rate from 3%.

    Carlos Carriedo, senior vice-president of global commercial services at Amex, says: “We know agility is crucial for smaller businesses to help retain a competitive advantage but accessing the finance needed to react swiftly to changing customer demands, or seize an opportunity, can be a challenge.”

    Amex customers taking out a loan with ezbob will also benefit from a 40,000 Membership Reward points offer, the company adds.

    Connect for Intermediaries announces new panel (Mortage Strategy) Rated: A

    Connect for Intermediaries has announced the launch of a new unsecured lending panel.

    Comprising Funding Circle, iwoca, Whitoak and Fleximise, the panel will be open to all of Connect’s AR members, and Connect will be able to obtain terms on behalf of other brokers as referrals.

    Loans from £5,000 to £250,000 for up to five years will be available from 1.5 per cent.

    Connect sales director Kevin Thomson says: “We have seen an increased demand for unsecured loans for trading businesses, as increasingly, brokers are coming to us with business clients who are looking to ease cashflow or expand their businesses.

    P2P Lending Investment Returns Outstrip Many Market Competitors (CL News) Rated: A

    P2P lending arrived in the UK back in 2010 with the launch of Funding Circle. The idea was simple. In the wake of the financial crisis, banks were – and still are – paying abysmally low rates of interest to savers. P2P platforms allowed savers to collectively lend money to businesses and individuals, usually over relatively short periods of time. By cutting out the middleman (or to be more precise, banks and other traditional lenders), P2P lenders were able to offer competitive rates to borrowers and superior returns to investors.

    The market has evolved over the years. AltFi – which provides specialist news for the alternative investment industry along with a range of analytics services – says the market is growing rapidly. For instance, in 2015, P2P lending platforms brokered around £1.1bn in loans. In the first half of 2018 alone, the figure was £3bn. Separate figures from the Peer to Peer Finance Association reveal that its members have, to date, originated loans to a value of £9bn.

    11:FS Foundry’s launch brings digital to banks (Banking Tech) Rated: A

    Consultancy firm 11:FS has launched 11:FS Foundry, an approach to delivering digital banking services through a modular core banking architecture. It kicks off with the partnership with DNB, Norway’s financial services group, which has also become an investment partner.

    DNB has invested £3 million for a 5% stake in 11:FS Foundry. This investment represents the long-term commitment between 11:FS and DNB to change how banks deliver digital banking services, the two companies say.

    Watchdog warns payday lenders over customer complaints (Financial Times) Rated: A

    The UK’s Financial Conduct Authority encouraged payday lenders to proactively compensate past customers; the industry has come under a lot of heat in recent months after a surge of complaints; companies say a lot of these complaints are bogus and a pushed by professional claims management companies (CMCs)

    Wonga was forced to shut down a few months ago after they saw a significant rise in complaints, complaints now cost companies more than $725 per complaint after the first 25 complaints; the rise in complaints has come after new rules were put in place in 2015 where high cost lenders we ordered to drop fees and adhere to stricter standards; a new survey by Kantar TNS showed that 60 percent of payday loan customers still pay more than anticipated.

    Fintech offers fresh ways to finance an MBA (Financial Times) Rated: A

    According to David Simpson, admissions director at London Business School, MBA students spend just as much time trying to find funding as they do trying to find the right program; while struggling to find his own financing Prodigy Finance CEO Cameron Stevens though there had to be a better way so he started Prodigy with two former classmates.

    The company is now growing fast by offering a service few others do, while also collecting credit records from across the globe; “You have talented people who have proved their potential in receiving offers to business school,” says Mr Stevens to the FT. “The only barrier for them is funding, because the banks are still incredibly localised, as they were in the 1500s.”

    Arbuthnot Banking Group PLC Third Quarter Trading Update (Arbuthnot Group) Rated: A

    Customer Lending balances are 28% higher than at the same time in the prior year and originations of new loans are 18% higher. However, as previously stated, the Group remains committed to maintaining its discipline in both credit underwriting decisions and return on capital when extending credit.

    The newly launched Asset Based Lending division continues to develop ahead of the original business plan and has a strong pipeline of new opportunities. The Specialist Finance division has now completed the hiring of its core team of six employees and is currently setting up its operations based in Manchester. It is expected that it will write its first deals toward the end of the fourth quarter or early 2019.

    OakNorth appoints form PRA director to board (Finextra) Rated: B

    OakNorth – the bank for entrepreneurs, by entrepreneurs – today announces the appointment of Martin Stewart, the former Director of Banks, Building Societies & Credit Unions at the Bank of England, as an Independent Adviser on its advisory board.

    Stewart joined the Bank of England in April 2013 and spent five and a half years there. In addition to supervising UK banks, building societies, credit unions and new entrants into UK banking, he was a Member of the PRA’s Executive Team responsible for PRA regulatory policy. His regulatory experience also includes spending three years at the FSA between 2010-2013, where he was a member of the leadership team that defined and implemented the UK’s post financial crisis prudential regulatory regime that now underpins the work of the Prudential Regulation Authority. In addition to this, he has almost two decades’ board-level experience having been Managing Director of a group of European subsidiary companies of the IFG Group PLC for almost four years, and as Chairman of the International Credit Union Regulators’ Network for the last six years.
    China

    China’s P2P Lending Sector Is in Serious Trouble (Money Makers) Rated: AAA

    P2P lending has been lucrative in China with little constraining regulation. The industry is worth as much as $120 billion and has been high-risk, but high return.

    Chinese regulators have been clamping down on debt and financial risk, the number of loan defaults is rising, capital investments are running out of the sector, and Chinese citizens are losing money. And getting pretty angry about it.

    In July 2018, 114 P2P lending platforms in China were shut down or had funds suspended, without warning, by China’s regulators over liquidity concerns. Since June 2018, 243 online P2P lending platforms have gone bust.

    Several Chinese Peer-to-Peer Lending Companies Have Submitted Self-Inspection Reports (Capital Watch) Rated: A

    With hundreds of peer-to-peer (P2P) lending platforms having collapsed at the beginning of this year, different district-level financial bureaus recently rolled out a tougher reform on all P2P platforms’ risk compliance to ease a growing panic among investors.

    This industry reform involves three major steps. First, all platforms have to complete a P2P Compliance Self-Inspection Report and submit it to the bureau by the end of October. Then, companies will be inspected by its local Internet Finance Industry Association, a non-state association. This will be followed by verification of inspection results by district-level Municipal Bureau of Financial Work with field inspection and a possible final check by higher-level government organizations.

    New York-listed Hexindai Inc. (Nasdaq: HX) and PPDAI Group Inc. (NYSE: PPDF) both announced that they have completed and submitted the report.

    European Union

    A risky investment (Euro Weekly News) Rated: AAA

    MANY UK nationals living part of the year in Spain, or visiting often, might spend months here but still retain tax residency in their home country.

    This means those looking for investment opportunities can still take advantage of UK tax efficient products such as Finance ISAs – ones which use peer-to-peer lending to offer high rates of return. They may be nothing new but one legal justice firm has upped the ante offering returns of up to 8 per cent a year.

    International

    Advantages of P2B platforms in lending to SMEs (Lendit Conference Blog) Rated: AAA

    In the EU and Australia, SMEs comprise 99.8% of all the firms and employ about 67% of the workforce. To tell the truth, SMEs might be rightfully called the economy, not just the backbone of it. A few other facts that follow are paradoxical. 2 years ago, International Finance Corporation (under World Bank) presented statistics that the gap for underfinanced SMEs around the world stood at 2.6 trillion $. One might expect, the situation got better in recent years with the global economy picking up and showing better and better numbers. On the contrary, most recent statistics from the same institution shows that the gap has widened to 5.2 trillion $.

    P2P platforms make lending process global

    P2B platforms can connect a business on one side of the world with an investor from another side of the world, and with a third party providing a service from yet another part of the world. All applications for loans can be made online, processed, assessed and the decision made within a matter of a few hours. Compare it to a similar process with the banks and the difference, that of speed and efficiency becomes clear. As an asset (loan) is put on the platform, investors can start investing within a matter of seconds. In such a way, a local business, somewhere in Eastern Europe can get funds from someone (or institutional investors) in UK or Germany and be able to use the collected amount for business operations within a couple of days.

    4 developments that will shape the future of fintech (Business Matters) Rated: A

    Within the past decade, we’ve seen the landscape of fintech move from a few disruptive start-ups to an industry that’s changing the landscape of business altogether. Consumers are becoming more and more accepting of technology as part of their day-to-day finance, a factor that has stretched the services sector and levelled the playing field with traditional institutions.

    For instance, there has been a monumental shift in the way that consumers are managing their money. PwC’s Global Fintech Survey 2017 found that 84% of incumbent financial services providers believed their customers were already making payments with fintech companies, 68% thought customers were conducting fund transfers, and 60% said their clients were using fintech for their personal finances.

    Quona Capital leads $ 5 million round for Brazilian small business lender BizCapital (Impact Alpha) Rated: A

    Brazilian fintech firm BizCapital launched operations in January to help Brazil’s small business owners secure capital necessary for the day-to-day and growth needs of their businesses. Quona Capital, a financial tech investment firm that spun out of Accion, has led the company’s R$20 million ($5 million) investment round. Two existing investors, Monashees and Chromo Invest, both based in Brazil, also participated.

    Roughly 70% of Brazil’s micro and small business owners are shut out of mainstream bank lending and instead resort to taking personal loans, which can carry interest rates as high as 200%. BizCapital offers short-term loans for up to R$150,000 ($40,000) at annual rates in the mid-double digits. The company hasn’t disclosed the size of its loan book but says it’s received more than 100,000 credit requests and serves customers in all 26 Brazilian states.

    Australia

    Global corporate lending platform, Trade Ledger has warned the Federal Government of substantial weaknesses in its proposed Open Banking implementation plan, when compared to the global best-practice model.

    These primarily include the lack of an independent implementation and governance organisation, and limited consumer and small to medium-sized enterprise representation in the development of industry standards.

    According to Trade Ledger, these omissions “risk a scaremongering campaign around data security that could stall progress and reduce the scope of the changes, leaving the door open for overseas financial markets to take over our local markets in the new era of Open Banking”.

    India

    UIDAI Asks Non-Banking Fintech Companies To Stop Aadhaar-Based Services (Inc 42) Rated: AAA

    After getting telecom companies to submit their exit plans from Aadhaar-based services, the Unique Identification Authority of India (UIDAI), the Aadhaar regulatory body, has now asked digital payment companies to stop offering any sort of Aadhaar-based service on their platforms.

    In a letter, the UIDAI also directed digital payment companies to submit confirmation of closure of Aadhaar-related authentication and their alternative plans to exit from the Aadhaar-based ecosystem.

    According to reports, the UIDAI has sent the letter only to non-banking companies such as PayPoint, Eko India Financial Services, and Oxigen Services, among others.

    Citing unnamed sources, an ET report stated that banks and payment companies such as Paytm, which have obtained banking licences, have not received the notice.

    Africa

    Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account.

    Now, a proliferation of lenders are using the same technology to extend credit to the banked and unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up.

    This week, the finance ministry published a draft bill on financial regulation which covers digital lenders for the first time. A key aim is to ensure that providers treat retail customers fairly, it said.

    Authors:

    George Popescu
    Allen Taylor