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.

Tuesday November 23 2016, Daily News Digest

CEO optimism

News Comments Today’s main news: SoFi, Lending Club gear up for a busy quarter. RateSetter drops unsecured business loans. Zopa’s targeted returns rise to 4% and 4.5%. Monzo to phase out prepaid cards. Funding Societies surpasses SGD 100M in SME crowdfunding in SE Asia. Today’s main analysis: CEO optimism grows worldwide. Today’s thought-provoking articles: Which car brands borrowers stretch […]

CEO optimism

News Comments

United States

United Kingdom

European Union

International

Asia

News Summary

United States

SoFi, Lending Club gear up for busy quarter (GlobalCapital), Rated: AAA

Up to four transactions from marketplace lenders SoFi and Lending Club are slated to hit the market this quarter, including prime and non-prime consumer and student loan refinancing offerings.

SoFi is preparing to bring at least one consumer loan offering and possibly one more refinanced student loan offering over the next two months. The planned offerings could be in the range of previous transactions, said a source familiar with the company’s plans.

Twitter slides after news that online lending startup SoFi may poach its operations chief (Business Insider), Rated: A

Shares of Twitter dipped on Monday after it was reported that Twitter’s chief operating officer, Anthony Noto, may leave the company for an offer to become the CEO of Social Finance, or SoFi, an online lending company.

Twitter’s stock was down 1.16% on Monday at $23.39 per share.

LendingTree Reveals Which Used Car Brands Borrowers are Stretching the Most to Buy (Business Insider), Rated: AAA

A recent LendingTree survey found that 27 percent of Americans plan to purchase a car in 2018. To discover if consumers are more likely to stretch their available incomes to own certain brands, LendingTree looked at people who found auto loans on the LendingTree.com platform in 2017 to buy used vehicles.

Contrary to popular assumptions, the results revealed that people aren’t going broke to buy used luxury cars. In fact, buyers of the most expensive cars seem to handily afford them.

On the other hand, LendingTree found Buick owners have the hardest time affording their car payments — not because they’re indulging in particularly expensive vehicles but because their income tends to be on the lower side, meaning they use a larger share of take home pay to cover their monthly payments.

Car Makes Borrowers Stretch the Most to Buy Used

Rank

Make

Estimated Monthly Payment as a Percent of Estimated Monthly Income

Average Estimated Monthly Payment

Average Estimated Vehicle Price

1

BUICK

10.9%

$418

$18,597

2

CHRYSLER

10.9%

$440

$18,497

3

NISSAN

10.6%

$405

$18,231

4

DODGE

10.6%

$454

$22,290

5

CHEVROLET

10.2%

$437

$20,930

6

KIA

9.7%

$368

$17,357

7

HONDA

9.4%

$389

$18,053

8

HYUNDAI

9.3%

$356

$17,216

9

MITSUBISHI

9.0%

$370

$17,205

10

CADILLAC

8.8%

$480

$25,294

11

FIAT

8.8%

$341

$16,543

12

FORD

8.6%

$424

$21,648

13

GMC

8.3%

$466

$25,077

14

JEEP

8.1%

$414

$21,885

15

VOLKSWAGEN

8.0%

$363

$16,909

16

MAZDA

7.8%

$355

$18,326

17

TOYOTA

7.7%

$385

$19,788

18

JAGUAR

7.6%

$503

$27,734

19

INFINITI

7.6%

$454

$24,728

20

BMW

7.4%

$476

$25,038

21

MERCEDES-BENZ

7.3%

$519

$28,792

22

SUBARU

7.2%

$361

$19,219

23

ACURA

7.0%

$409

$22,623

24

AUDI

6.8%

$482

$26,725

25

LEXUS

6.7%

$459

$25,393

26

LINCOLN

6.6%

$396

$22,205

27

LAND ROVER

6.2%

$569

$31,704

28

VOLVO

6.1%

$400

$20,877

29

MINI

5.7%

$355

$17,728

30

PORSCHE

5.0%

$635

$42,173

31

TESLA

4.6%

$818

$54,234

Fintech lender Fundbox shows how open banking can be done (American Banker), Rated: AAA

The online small-business lender Fundbox says it is integrating its automated lending service with several software programs commonly used by its borrowers — and it’s a move that could hold a lesson for banks.

What’s striking about what Fundbox is doing, and the reason bankers could learn from it, is it is capitalizing on the concept of open banking — allowing a piece of a lender’s products and services to be accessed through a third party — in a way that few U.S. banks have.

Capital One comes the closest — its application programming interfaces let third parties offer services like prequalifying customers for Capital One credit cards and sharing its reward information.

Square is like ‘Amazon or Google in their early days’ (Business Insider), Rated: A

When Wall Street compares one of Jack Dorsey’s two public companies to Amazon and Google, you’d expect them to be talking about the one in the tech sector — Twitter. But on Friday, Nomura analyst Dan Dolev said that Square, Dorsey’s payments company, is the one that resembles today’s tech giants in their early days.

Dolev thinks that these new initiatives will massively increase the number of payments Square processes by a long-term compound annual growth rate of 20%. Dolev also says that this growth will provide a 40% to 45% boost to earnings margins.

CashCall to pay $ 10 mln, CFPB request for $ 287 mln denied (Reuters), Rated: A

In a decision on Friday, U.S. District Judge John Walter ordered California-based CashCall to pay $10.3 million instead, ruling that the CFPB did not justify the larger amount.

defi SOLUTIONS Lands $ 55 Million (Finovate), Rated: A

Loan origination solutions company defi SOLUTIONS just closed on $55 million in funding. The Series C round comes from Bain Capital Ventures, offering social proof along with a stamp of approval for defi’s suite of loan services. This is the Texas-based company’s first round of financing.

The primary capital portion of the investment will be used to accelerate product development, expand resources and facilities, and grow the number of employees by nearly 50% this year.

A Bird’s Eye View of What We Achieved (YieldStreet), Rated: A

Source: YieldStreet

Ohad Samet of TrueAccord (Lend Academy), Rated: A

Ohad Samet is the CEO and Co-founder of TrueAccord. They are a new kind of debt collection company that uses a data driven approach and digital first communications.

US Banks Suffer 20 Percent Jump in Credit-Card Losses (Newsmax), Rated: A

U.S. banks have reportedly recently suffered a 20 percent jump in credit card losses.

The soaring bad debts has fueled fear about the financial health of middle America, the Financial Times explained.

Recently disclosed results showed Citigroup, JPMorgan Chase, Bank of America and Wells Fargo took a combined $12.5 billion hit from soured card loans last year, about $2 billion more than a year ago. The FT reported.

Reuters recently warned that U.S. banks, already under pressure from slower loan growth and low interest rates, could be facing yet another challenge as a rising number of Americans fall behind on their credit card payments.

U.S. consumer credit outstanding rose in November by the most in 16 years as credit-card balances surged, recent Federal Reserve data showed, by $11.2 billion, to $1.023 trillion.

Credit Card Startup Petal’s Latest Funding Round Signals NYC Fintech Upturn (Crunchbase), Rated: A

Last week, alternative credit card issuer Petal closed its $13 million Series A led by Peter Thiel’s Valar Ventures. It was announced just four months after Petal’s $3.6 million seed round.

The news marks a significant month for Manhattan’s sometimes-struggling fintech scene, with MoneyLionhaving raised a whopping $42 million during its Series B in early January. And while these numbers are a drop in the bucket compared to the U.S. fintech industry surpassing $5 billion in Q3 ’17, the momentum is already being felt, and it comes as a welcome change for the city.

Do You Need a Personal Financial Advisor or Will a Robo-Advisor Do? (Nerdwallet), Rated: A

At the top end, some personal financial advisorscharge an annual fee plus investing expenses as a percentage of your assets under management, typically about 1% to 1.5%. As a result, these advisors often require that new clients have an account minimum of $250,000 in assets.

By comparison, robo-advisors — which use algorithms to build and manage a client’s investment portfolios and require little human interaction — charge fees from 0.45% to 0.70% of the amount managed. And many will take on new clients with $0 to open an account.

The downside of robo-advisors: Investment choices are more limited — often a small selection of low-cost index funds or exchange-traded funds — than the asset choices that full-service brokers and advisors may provide. And while many offer financial advice via email, chat or phone consultations, those hybrid services are likely to come at an additional cost.

What to Know About Peer-to-Peer Lending Apps Like Yahoo’s ‘Tanda’ (Lifehacker), Rated: A

The Tanda app, launched by the company Friday and available on Android and shortly on iOS, does exactly what its name implies. It lets you join groups of people to work toward savings goals together, in tandem: Each user pays an agreed-upon amount into a pot, choosing when they receive the money. Those who need it soonest pay a fee, and those who wait the longest receive a two-percent bonus. Yahoo Finance takes eight percent of the first payout and seven percent of the second payout, according to Android Police.

Yahoo Finance isn’t the first to think to monetize a more formal version of this sytem—the site eMoneyPool has been available to the public since 2013, servicing over $3 million, and the apps KyePot and Cashare serve a similar purpose. On Tanda, users receive a trust score, with higher scores allowing users access to larger money pools, up to $2,000.

Lending Tree: Dayton home market isn’t so competitive (Dayton Daily News), Rated: B

In a national ranking, Dayton ranks relatively low for factors Lending Tree deems indicative of a competitive housing market. Prospective buyers in this area have relatively low average down payments, among other factors Lending Tree placed in the ranking.

On the list of 100 cities with the “most competitive home buyers,” Dayton ranks overall at 96, below Augusta, Ga. and above El Paso, Texas. Youngstown Ohio is last on the list at No. 100. San Francisco, Calif. is first.

FormFree Celebrates Its Tenth Year of Operations (Send2Press), Rated: B

In 2016, Fannie Mae named FormFree its first designated vendor for automated asset verification as part of the Day 1 Certainty initiative. Since then, FormFree has signed more than 800 lender clients, including 70 percent of the nation’s top 40 mortgage originators, and accepted over 1.25 million orders for the company’s flagship AccountChek® Asset Report. The company also increased its total number of technology integrations and reseller partnerships to over 100, making AccountChek available for more than 90% of mortgage transactions nationwide.

recent announcement from the U.S. Department of Veterans Affairs (VA) makes even more loans eligible for automated asset verification through AccountChek. On December 29, the VA published Circular 26-17-43 confirming that the VA permits the use of automated asset verification services like AccountChek.

United Kingdom

RateSetter to Focus Solely on Asset Backed Lending for Commercial Loans (Crowdfund Insider), Rated: AAA

Peer to peer lender RateSetter said its commercial lending vertical will focus solely on secured lending in its commercial finance vertical. Following a review of its commercial finance operations, RateSetter said it would move to “simplify” its commercial finance by funding only property backed or asset backed loans.

RateSetter said it will continue to maintain a diversified approach to lending into consumer, business and motor finance markets, however, the commercial finance offer will no longer include unsecured business finance.

RateSetter exits unsecured business loans market (P2P Finance News), Rated: A

Business borrowers will now only be able to access property-backed development and investment loans or asset-backed hire purchase deals.

All existing unsecured business applications will be processed and will continue to repay in line with their schedule, the platform said.

The targeted annual return for its basic Zopa Core product has increased from 3.7% to 4% while the higher risk Zopa Plus product now has a targeted return of 4.6%, up from 4.5%.

Monzo to phase out popular prepaid cards by April (Financial Times), Rated: AAA

Challenger bank Monzo has announced it will close its popular prepaid Mastercard in early April, although its half a million customers can still enjoy valuable travel perks if they upgrade to Monzo’s current account.

Until this month, Monzo cards also offered fee-free cash withdrawals from foreign ATMs. However, this has now been capped at £200 of overseas withdrawals within a rolling 30-day period, and customers pay a 3 per cent fee if they exceed this limit.

The UK is leading the way in crowdfunding and P2P lending as the rest of Europe plays catch-up (City A.M.), Rated: A

While the UK remained the largest alternative finance market in Europe by far, at €5.6bn (£4.9bn), the rest of Europe began to play catch-up as it grew its own market by 101 per cent, the data from the university’s Centre for Alternative Finance showed.

Excluding the UK, Estonia ranked first for alternative finance volume per capita for the second year in a row, at €63, followed by Monaco and Georgia.

Start-up revolution shows signs of fatigue after years of growth (Financial Times), Rated: A

Britain’s start-up revolution is stalling, with the number of businesses created last year falling for the first time in almost a decade.

There were 5.5 per cent fewer start-ups in 2017 compared with 2016, according to research by DueDil, a financial analysis company. It found that 647,923 new businesses were started last year — down from 685,928 in 2016, bringing to an end what had been annual increases since 2008.

Investly Plans to Raise 2M GBP on Seedrs (P2P-Banking), Rated: A

Investly is currently pitching on Seedrs to raise between 500K and 2M GBP in a crowdfunding for equity campaign. To become a shareholder, the required minium investment amount is 13 GBP.

What are the three main advantages when investing in the invoices?

Liquidity – Investly is quite different compared to most platforms because the investment period is only 30 to 40 days on average.

Return – Historically investors have earned 11-12% annually on invoices.

What ROI have investors made on average on the platform in the past?

The net return on Estonian invoices has been 11.2% annually and in the UK it’s been 12.6% annually.

Loans to help poorest families avoid poverty premium (Third Force News), Rated: A

A £600 loan repaid over six months would typically cost an extra £330 to repay to a door step lender and over £500 to repay via a payday lender. Repaying via a social lender could easily halve this cost.

Hollywood actor and social activist Michael Sheen has supported the launch of a new £1 million fund set up by the Carnegie UK Trust and features in a new short film called Speaking out for Fair Credit.

“The need for ethical alternative providers is clear, whether they be on our local high streets or available online. But it’s not just about creating more providers – we need to do more to enable them to compete with the high cost providers and to provide vital financial support to communities across the UK, putting people before profit.”

It is estimated that around 150,000 people in Scotland borrow £250m from high cost lenders like pay day loan firms, door step lenders and rent-to-own shops annually.

European Union

European online alternative finance is growing (Cambridge Network), Rated: AAA

Excluding the United Kingdom, which remained by far the largest alternative finance market in Europe at 5.6 billion euros, online alternative finance grew 101 per cent in Europe to 2.06 billion euros from 1.02 billion euros a year earlier. The UK’s market share in Europe declined to 73 per cent in 2016 from 81 per cent a year earlier as other markets grew faster.

France (444 million euros), Germany (322 million euros) and the Netherlands (194 million euros) are the three largest European alternative finance markets outside the UK, followed by Finland (142 million euros), Spain (131 million euros), Italy (127 million euros) and Georgia (103 million euros).

Peer-to-peer consumer lending is the largest alternative finance segment in Europe for the third year in a row, at 34 per cent, followed by peer-to-peer business lending (17 per cent), invoice trading (12 per cent), equity-based crowdfunding (11 per cent) and reward-based crowdfunding (nine per cent).

International

CEO optimism booms despite increasing anxiety over threats to growth – New content available (The News Market), Rated: AAA

Fifty seven percent of business leaders say they believe global economic growth will improve in the next 12 months.

Optimism in global growth has more than doubled in the US (59%) after a period of uncertainty surrounding the election (2017: 24%). Brazil also saw a large increase in the share of CEOs who are optimistic global growth will improve (+38% to 80%). And even among the less optimistic countries such as Japan (2018: 38% vs. 2017: 11%) and the UK (2018: 36% vs. 2017: 17%), optimism in global growth has more than doubled since last year.

Fintechs Haven’t Reduced the Trade Finance Gap – So far (American Express), Rated: A

According to a September 2017 report from the Asian Development Bank (ADB), the trade finance gap remained relatively steady at $1.5 trillion in 2016 compared to a record high $1.6 trillion gap the year prior.1 MSMEs remain hardest hit by gaps in trade finance: the ADB report attributed 74 percent of rejected trade finance requests to MSMEs and midcap firms in 2016, compared to just 57 percent in 2015.2

ADB says this is despite fintech investment in trade finance that exceeded $13 billion in 2016 – more than half of the estimated $24 billion in total 2016 fintech investment cited in a separate report from the International Chamber of Commerce (ICC).3 Some experts – including Steven Beck, Head of Trade Finance at ADB – say fintech efforts may need to be redirected before their impact on import-export trade finance can be fully realized.4

Longfin (LFIN) Launches Commercial Ziddu Smart Contracts on Ethereum Blockchain (StreetInsider), Rated: B

Longfin Corp. has announced that its Ziddu Smart Contracts are commercially available on the Ethereum blockchain.

Ziddu Smart Contracts are currently available for Trade Finance and FX markets, and Longfin is preparing to launch Smart Contracts for bullion financing within the second quarter of 2018.

Asia

Funding Societies Surpasses SGD 100 Million in SME Crowdfunding (Core Sector Communique), Rated: AAA

Funding Societies, the leading peer-to-peer (P2P) lending platform in Southeast Asia, welcomed the start of the year by crossing the SGD 100 million mark in total crowdfunded SME loans across Singapore, Indonesia and Malaysia. In line with the platform’s goal of responsible growth, Funding Societies expanded its crowdfunding book by 400% in 2017 while maintaining a default rate of 1.5%.

Increasing the Access of SMEs to Credit in Vietnam (International Policy Digest), Rated: A

According to statistics by the Ministry of Planning and Investment (MPI), SMEs contributed approximately 48% of Vietnam’s GDP in 2012. Moreover, based on research by the United Nations Economic and Social Commission for Asia and the Pacific, since SMEs are usually labour intensive they employed 77% of Vietnam’s labour force.

The Ministry of Planning and Investment in their survey in 2012 of SMEs ability to access financing indicated that approximately 30% of SMEs in Vietnam could not get any financing from financial institutions and another 30% that could get financing faced numerous difficulties in accessing funds.

The 2015 survey found that the percentage of firms having bank loans in 2015 for micro-sized firms was 40%, small firms 62%, medium firms 74% and 81% for large firms. Access to bank services in 2015 also took into consideration how common it was for these enterprises to give bribes to the bank staff: Micro (64%), small (56%), medium (49%) and large firms (39%). The percentage of firms that experienced how interest rates and other lending conditions applied to private businesses are always more difficult than those for SOEs: micro (74%), small (71%), medium (65%) and large (48%).

Authors:

George Popescu
Allen Taylor

Monday March 20 2017, Daily News Digest

lending club delinquency rates

News Comments Today’s main news: Experian, Finicity collaborate on MPL digitalization. RateSetter, Zopa among P2P lenders signed up on Bud. Lending Works launches 3-minute loan app. Creditas taps asset-backed market to fund auto loans. Today’s main analysis: PeerIQ performance monitor. OCC FinTech Charter: A new model for tech-enabled financial services? Today’s thought-provoking articles: Why CommonBond’s CEO says OCC charter […]

lending club delinquency rates

News Comments

United States

United Kingdom

Australia

China

India

South America

Asia

News Summary

United States

Experian and Finicity collaborate to digitize marketplace with less tedious experience for consumers and lenders (Yahoo! Finance), Rated: AAA

Experian®and Finicity have joined together to make it easier for consumers to apply for a loan, accelerating loan underwriting and broadening loan availability. The new technology also improves accuracy and reduces fraud risk for lenders. Experian’s new Digital Verification Solutions will deliver verification of assets and verification of income leveraging Finicity’s data aggregation and insight platform. Experian is the first credit bureau to implement this technology, which will give consumers the opportunity to secure mortgages as well as other types of loans with less paperwork and hassle by connecting with financial institutions digitally.

By digitizing the end-to-end mortgage process, loan approvals that take as long as 70 days, may be approved in as little as 10 days. With Experian’s industry-leading credit decisioning and Finicity’s account insights technology, consumers can rapidly complete the income and assets verification process through a simple digital experience.  Consumers will then permit delivery of appropriate account data, which is pushed to Experian’s Decisioning as a ServiceSM hosted platform. This will give lenders the ability to integrate consumers’ account data into their credit decisioning processes. As a result, lenders and other service providers will assess a consumer’s ability to pay and verify borrower income and assets in a manner compliant with the Fair Credit Reporting Act (FCRA).

Experian and Finicity’s partnership also will benefit the approximately 25 percent of the U.S. population with limited or no credit history, including millennials, who are the largest segment of the workforce and are increasingly applying for loans. While these consumers may have a limited credit history, most consumers have a checking and savings account, as well as other payment obligations such as rent, and utility and phone bills, which can demonstrate they are capable of repaying a loan.

PeerIQ Performance Monitor (PeerIQ), Rated: AAA

  • Lending Club targeted the most significant increases in borrowing rate to riskier borrowers in E, F, and G-grades. Prosper’s recent borrowing rate increases are mild comparing to Lending Club’s rate actions. We expect that the overall borrowing interest rates will continue to increase in response to hikes in Federal Funds rates
  • For Lending Club’s 36-mo and 60-mo products, delinquency rates continue to trend higher for 2016 vintage. We expect loans to approach peak delinquency after ~13 months of seasoning; for Prosper, we expect the 36-mo product to hit peak delinquency about 9 months of seasoning and 13 months for the 60-mo term product.
  • For both Lending Club and Prosper, charge-off rates continue to be elevated for loans in 2016 vintages. The spikes in charge off rates agree with delinquent loan pipelines as loans transition from delinquency to charge-off states. (We note that recent credit buy box tightening will not show up in the 2016 vintage).
  • We expect that originators continue to adjust pricing and credit modeling based on forward-looking credit market, Fed Funds rate expectations, the credit environment andthe competitive landscape in consumer unsecured lending.

See the full report here.

Why CommonBond’s CEO says fintech charter could be a game changer (American Banker), Rated: AAA

For the founder of an online lending startup, David Klein, CEO of CommonBond, talks like a sage.

The bearded entrepreneur notes approvingly that the conversations in his industry are becoming “more grounded and mature, rather than all about going to chase the shiny object,” and that company valuations are “catching up to reality.”

What’s new at CommonBond?

DAVID KLEIN: One of the things we are most excited about is what we call the 401(k) for student loans. This is SaaS-based technology that enables employers to contribute to their employees’ student loan repayment every month.

It is very early days, so only about 4% of companies have a student-loan-related benefit. That number is expected to be over 20% in two years.

Over 70% of millennials have student loan debt. Over 50% are thinking about student loans are thinking about them more than retirement and about 80% of them would choose a company to work for if they had this benefit.

In some of your talks over the last year or so, you’ve hypothesized that the number of marketplace lenders would soon shrink. Has it happened the way you thought it would? Have many hung on longer than you thought?

For online lending, 2016 was a year where the strong got stronger and the weak got weaker. There were a few shops that closed up and there were some players that became better known and entered 2017 stronger than ever. I think that continues in 2017 and 2018, regardless of geopolitical or macroeconomic picture, because if you study the emergence of industry, that’s what tends to happen.

What’s the key to that default rate? Are you chasing only the HENRYs?
We look at past credit and future prospects. We look at credit reports and FICO scores, but we look at cash flow, employment, industry of employment. We are looking at a host of factors.

What are your thoughts on the OCC’s proposed fintech charter?

The OCC charter would allow us to comply with regulation in one jurisdiction, instead of 51 jurisdictions including D.C. To the extent that we can save on costs, we could pass that along to customers.

It would affect capital costs. We might get access to low-cost deposits like banks do, we might get access to the Fed discount window to get close-to-free money and we might get access to better pricing in the capital markets by being a chartered institution. We’d be poised to significantly lower our cost of capital long term.

The OCC FinTech Charter: A New Model For Tech-Enabled Financial Services? (Payment Law Advisor), Rated: AAA

On February 21, DWT Payments team members Andy Lorentz and Tom Scanlon took part in a discussion organized by NYPAY that focused on the prospects of the OCC special purpose fintech charter.

View the presentation here.

The 5 Best ‘Alternative Investments’ to Consider (Newsmax), Rated: A

Private equityThese investments aren’t publicly traded or listed on the stock market. Private equity or venture capital firms invest in venture capital, start-ups, company growth, or restructuring of a company.

Real estate — Investing in property may include housing, apartment complexes, and commercial real estate. The Wall Street Journal explained that some self-directed individual retirement accounts allow people to diversify their investments into real estate, among other options, but there are many rules and risks. You also can invest in property indirectly through real estate investment trust (REIT) funds, which are available on public exchanges.

NEW REPORT: What’s The Ticket To Platform Payments Success? (PYMNTS.com), Rated: A

Radial, for example, an omnichannel technology and sales platform provider, recently debuted a new deferred payment option called Buy Now, Pay Later. The new payment feature, the result of a collaboration with European solution provider Klarna, allows customers to spread payments out over the course of six to 36 months. Similarly, fundraising platform Virgin Money Giving and payment processors Worldpay recently collaborated on a new payments system designed to handle the high number of donations that are made in the days and hours leading up to major events such as the London Marathon.

Meanwhile, PayPal looked to improve its platform with a new acquisition. The company announced plans to acquire multichannel bill payment processing and receivables company TIO Networks for a total of $233 million, according to reports.

Financial Poise™ Announces “EQUITY CROWDFUNDING,” a Four-Part Webinar Series, Available On-Demand Now through West LegalEdcenter (Benzinga), Rated: B

Financial Poise™ Webinars and West LegalEdcenter are pleased to announce the on-demand premiere of a new webinar series “EQUITY CROWDFUNDING 2017,” designed to introduce attorneys and business owners to the basics of investing in private companies through crowdfunding. Moderator Chris Cahill of Lowis & Gellen joins panelists from firms including Crowdcheck, CFX Markets, Crowdfunding Lawyers.net and Riggs Davie in Episode #1, Title III, Regulation A+, and State Crowdfunding Regimes.

Nasdaq Announces Development Role In Shaping Ad Contracts Blockchain (Yahoo! Sports), Rated: B

Securities exchange operator Nasdaq has announced it is helping to compile a blockchain for ad contracts, in partnership with the New York Interactive Advertising Exchange.

The blockchain is billed as being a transparent market mechanism for advertisers and publishers to set up ad contracts, creating a more fluid, price-driven environment for digital advertising.
It is hoped that the new system will provide a more efficient basis for the wider digital advertising industry, said to be worth in excess of $32 billion per year.
Nasdaq has already filed patents for its technology, in addition to launching its own private market Linq, powered by the same infrastructure, back in 2015.
United Kingdom

RateSetter and Zopa among P2P lenders signed up to money platform Bud (P2P Finance News), Rated: AAA

SIX PEER-TO-PEER lenders including RateSetter and Zopa have partnered with Bud, a new online platform and app that enables consumers to manage their finances on a single dashboard.

Zopa, Landbay and Assetz Capital have all got live pages on the platform, meaning that Bud’s customers will be able to manage their P2P loans alongside their bank accounts, pensions, mortgages and other investments.

LendingWell, Lending Works and RateSetter have also signed up to Bud, although their pages have not gone live yet.

Bud currently has 18 partners operational on the site, with another 20 signed up.

Walsh said that Bud is currently in talks with other P2P platforms.

It has been in its ‘beta’ testing phase since November and currently has around 4,000 customers signed up.

P2P lender launches three-minute loans through app (Bridging&Commercial), Rated: AAA

A fintech app has partnered with peer-to-peer (P2P) platform Lending Works to offer loans in just three minutes.

Revolut customers will now be able to apply for between £500-5,000 in credit in two minutes and receive funds on their contactless card almost instantly.

The London-based company also plans to enable a P2P lending marketplace among its own user base of 530,000 Europeans, ultimately allowing customers to lend and borrow money across borders.

RateSetter funds SME acquisition in the South East (P2P Finance News), Rated: AAA

RATESETTER has channelled £140,000 to fund a small- and medium-sized enterprise (SME) acquisition in the South East, as part of its focus on business lending in the region.

The peer-to-peer finance platform has arranged two loans to enable Thame-headquartered digital marketing agency Purple Frog acquire Oxfordshire neighbour OXLink, an IT specialist that will help it scale up its operations.

Zopa Celebrates Plus Products 1st Birthday (Crowdfund Insider), Rated: AAA

On Friday, peer-to-peer lender Zopa celebrated the one year birthday of its product, Zopa Plus, by taking a look back at its progress over the past twelve months.

While revealing how Zopa Plus has performed to date, the Zopa team explained that the product is performing in line with expectations. Although each individual investor has different Plus experiences, 73% of investors have notably invested for an average of at least six months, with no loan sales, have achieved actual returns of at least 6%.

Fintech Startup CurrencyCloud Raises m in Series D Funding Round (Finance Magnates), Rated: A

UK-based fintech company CurrencyCloud, a cross border payment-as-a-service provider, announced the raising of £20 million (US $25M) in Series D funding round. The company has raised from backers a total of £44 million ($61 million) in venture funding to date.

The firm has amassed an impressive roster of investors which this time included Alphabet’s venture arm GV, formerly Google Ventures, in addition to existing investors Notion Capital, Sapphire Ventures, Rakuten FinTech Fund, and Anthemis.

MarketInvoice names Zopa’s Giles Andrews as chairman (P2P Finance News), Rated: A

ZOPA co-founder Giles Andrews OBE has been appointed chairman of MarketInvoice, to help support the peer-to-peer invoice finance platform’s plans for growth this year.

Andrews will work directly with MarketInvoice’s co-founders Anil Stocker and Ilya Kondrashov to drive scale in the business, as well as chairing and managing the board of directors, the company said.

The high-profile appointment comes at a pivotal time for MarketInvoice, as it is looking to double its lending to £2bn this year.

 

Merseyside Pension Fund finances Canary Wharf development (IPE), Rated: A

The Merseyside Pension Fund has backed a £12m (€13.8m) loan secured against a development in Canary Wharf.

The £6.8bn public sector scheme has partnered with LendInvest on the deal.

The loan will help finance a planned development in London’s Docklands, which will include a 320-bedroom hotel and 199 residential units.

Digital Disruption Has Arrived In FinTech (Forbes), Rated: A

ClearBank, the first new clearing bank to be authorized in the UK in over 250 years launched on February 28th.

It is the only UK clearing bank that does not offer services direct to the consumer – a neutral and independent platform service that does not compete with its own customers.

There are big incentives for FinTechs and incumbents to use ClearBank. Put simply, they will be able to process payments and offer new competitive transactional banking services more cost effectively, efficiently and faster than has ever been possible.

I suspect ClearBank will be on the radar of everyone in the global FinTech ecosystem.

Blockchain, Distributed Ledger, Artificial Intelligence, and Identity technologies all promise to deliver technology enabled disruption, but appear to be slow out of the starting blocks with adoptable and scalable use cases. ed on February 28th.

Crowdfunding platform becomes Sharia-certified (Bridging&Commercial), Rated: A

Crowdfunding property investment platform Yielders has secured full Sharia certification from the UK Islamic Finance Council (UKIFC).

Launched in April 2016, Yielders specialises in pre-funded investment opportunities with pre-defined rental incomes, enabling investors the chance to start earning returns almost immediately.

How to find your way through the Isa maze (This is Money), Rated: B

Over the years, Individual Savings Accounts – Isas for short – have helped millions of people build long-term wealth they can access tax-free and at any time (unlike a pension).

But the Isa is about to get a major facelift which will make it a more exciting proposition than ever before.

From the beginning of the new tax year on April 6, a family of four – with two children under the age of 18 – will between them be able to squirrel away a maximum £48,256 in Isas over the course of 12 months.

Australia

AI automation FinTech startup Presagen secures competitive commercialization funding (Newsmaker), Rated: A

AI automation FinTech startup Presagen has secured its first round of funding as part of the South Australian Early Commercialization Fund  (SAECF), which is administered by TechInSA. SAECF is a new government grant funding scheme for companies with innovative technologies that have potential for global markets and large revenues. Presagen has been awarded the first of three possible phases of funding. Companies that are awarded all three phases can receive up to $500,000 in funding to support global commercialization initiatives. Presagen will use the funding to bolster its growing technical team.

Presagen uses a unique behavioral AI technique which emerged from the defense industry to automate complex human-centric tasks using software.

China

China, Blockchain & The Holy Grail of Marketplace Lending (CoinDesk), Rated: AAA

When one of the world’s largest corporations gets together with one of its largest peer-to-peer (P2P) lenders, you can almost hear the market sit up.

That’s what happened last week, when Chinese conglomerate Foxconn joined forces with P2P lender Dianrong to launch a blockchain platform for working capital. The benefits to supply chains are clear: smoother cash flows for suppliers will strengthen their liquidity, lower their costs and avoid delays in delivery due to lack of funding.

Should this change occur as projected, investment is likely to migrate to the stronger P2P lenders, shrinking the pool of potential borrowers.

The opportunity to lend to entities with a better-than-average risk profile at a reasonable return is the ‘holy grail’ of marketplace lending.

Peak Establishes New Fintech Subsidiary in China (Military-Technologies), Rated: B

Peak Positioning Technologies Inc. (CSE: PKK) (OTC PINK: PKKFF) („Peak” or the „Company”) today announced that the Company has established a new fintech subsidiary in Shanghai.

India

RBI likely to add tough riders to regulate P2P growth (India Times), Rated: AAA

The Reserve Bank of India (RBI) is expected to introduce strong riders to prevent the nimble peer-to-peer (P2P) lending industry from growing rapidly and suffering the same fate it did in many countries where P2P almost ended up looking like a ponzi scheme.

The RBI, which is expected to release the guidelines on the industry soon, believes that while the sector is yet to show much scale and traction, there should be a strict vigil on its functioning.

The regulator is worried about some cash-based unscrupulous lenders joining these platforms and lending at high interest rates, and would prefer institutional lenders to enter the space and perhaps reduce rates.

Credy looks to digitize personal lending in India  (TechCrunch), Rated: B

Lending platform Credy is looking to change the way people gain access to personal loans in India. The company, which is currently a part of Y Combinator’s Winter 2017 batch, is digitizing the process and improving access to capital for residents by opening up peer-to-peer loans to a wider group of borrowers and lenders.

With all that in mind, Credy has emerged to improve personal lending in a market that is worth $50 billion and is growing at a 30 percent rate.

South America

Brazil’s Creditas taps asset-backed debt market to fund auto loans (Reuters), Rated: AAA

Brazilian financial technology company Creditas Soluções Financeiras Ltda tapped the asset-backed debt market to raise 50 million reais (US$16 million) for auto loan refinancing, its chief executive said, an area shunned by traditional lenders after soaring delinquencies.

Sergio Furio said the transaction in February was the first in which Creditas fully decided collection and credit scoring procedures. Proceeds will go to refinance borrowers at a fraction of the cost of auto loans from banks.

Consumers in Latin America’s biggest country pay an average 190 percent a year for unsecured overdraft, credit card and consumer loans with banks.

Secured personal credit accounts for 1 percent of Brazil’s outstanding lending, a sign large banks have overlooked a segment that could thrive as benchmark domestic interest rates approach single-digits.

Asia

Our fintech future (Bangkok Post), Rated: A

In a digital world where the exchange of money is being revolutionised, banks are stepping up their collaboration with financial technology specialists to shape the future of financial institutions along with their security and data collecting systems.

While the internet has made banking much easier for consumers, it can also be a gold mine for hackers. In the old days they were simply called thieves, and they are breathing down the necks of banks, which are racing to find ways to make security cheaper and more effective. This is where fintech comes in.

In addition to working with fintech innovators on security systems and on ways to make customers’ banking experience better and faster. Mobile applications and various other electronic payment systems besides the ATM are the top examples that come to mind.

The Malaysia-based bank is broadening its fintech reach by joining with the likes of Samsung Pay and Go-Jek, a transport, logistics and payments startup in Indonesia, to provide more payment channels. It is also collaborating with the Thai mobile market leader Advanced Info Service for a mobile point of sale application, an e-wallet system for mobile money transfers, as well as Touch N’ Go, whose customers include Malaysian tollway operators, and the shopping portal Lazada for e-commerce payments.

US-based IDC provides market intelligence, advisory services and events for the information technology, telecommunications and consumer technology markets.

Artificial intelligence (AI) applications used to collect and analyse this personal information are getting smarter every day, opening more opportunities.

Mobile banking applications can be about providing services such as information about exchange rates or locations of businesses since it is not always about money transactions.

Authors:

George Popescu
Allen Taylor