Tuesday November 21 2017, Daily News Digest

Purchase APR LendingTree

News Comments Today’s main news: Experian buys, integrates Clarity Services. Think Finance files for bankruptcy. PayPal offers robo-investing. Assetz Capital achieves 1.5M GBP funding through Seedrs. Elevate launches industry research repository. Nav Athwal steps down as CEO of RealtyShares. Ping An Insurance prepares for Lufax IPO. TransferWise doubles revenue. Today’s main analysis: LendingTree releases monthly mortgage offer report. Today’s thought-provoking articles: The […]

Purchase APR LendingTree

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United States

Integration of Clarity Services Inc by Experian (Experian Email), Rated: A

Dear Clarity Services Inc Supplier:

As a supplier to Clarity Services Inc, we are writing to formally notify you that as of October 6, 2017, Clarity Services Inc has been purchased by Experian Holdings, Inc.

Effective January 1, 2018, purchases and invoice payments will be processed by Experian’s centralized Procurement and Accounting departments.

Source: Experian

Think Finance Files for Chapter 11 (U.S. Bankruptcy Court), Rated: AAA

Read the court brief here.

PayPal in robo-investing venture (The Australian), Rated: AAA

The payments company was connecting its website and smartphone apps with those of Acorns Grow, a five-year-old automated savings and investment service, the two companies said on Monday.

PayPal users would be able to use their accounts to make contributions to Acorns and would be able to monitor and manage their Acorns investments from the PayPal app, said Joanna Lambert, the company’s vice-president of consumer financial services.

PayPal is rolling out the Acorns offerings in phases, with the first batch of users getting access on Monday and all US users by early 2018.

Elevate’s Center for the New Middle Class Launches Industry Research Repository (BusinessWire), Rated: AAA

The Center for the New Middle Class, a research-focused body developed by Elevate to engage and educate the public about the growing needs of individuals who do not have access to traditional credit options, today announced it has launched an industry research repository for researchers, reporters, policy makers and the general public. Known as the Resource Database, it is a curated collection of the best research on non-prime Americans and their challenges, attitudes, and needs.

In addition to containing external research and editorial content from sources such as Pew, the National Bureau of Economic Research and “The Atlantic,” the database will house research and commentary from the Center for the New Middle Class regarding economic conditions that affect America’s New Middle Class.

By visiting the database here users can search for entries, filter the results, and see the full bibliographic reference of information provided.

The Cleveland Fed Retracts Their Report on “P2P Lending” (Lend Academy), Rated: AAA

The shame of all this is that all the sensational headlines have already been written and confirmed in many people’s minds the supposed shady nature of our industry. It would have been far better for everyone if the authors of this report had done their homework and produced a thoroughly researched report in the first place.

As Todd Baker pointed out, “we really should know which online lenders are adding to consumer financial health and which ones are detracting from it.”

Why The Cleveland Fed Pulled Their Online Lending Study (PYMNTS), Rated: AAA

“[These borrowers] are not underbanked, they’re sort of overbanked,” observed Yuliya Demyanyk, a Cleveland Fed economist and co-author of the report. “Defaults on [marketplace] loans have been increasing at an alarming rate, resembling pre-2007 crisis increases in sub-prime mortgage defaults, where loans of each vintage perform worse than those of prior origination years.”

The authors of the Nov. 9 report “have received several questions about the composition of the underlying data set they used in their analysis,” the Cleveland Fed said on its website, and are “revising their paper to further clarify the data sample they used” and will post the new version as soon as it’s ready.

So, what happened?

One theory is that they may have stretched the definition of online lending so far as to make an accurate and credible apples-to-apples comparison implausible.

Karen Webster spoke with Lending Club’s head of government relations, Richard Neiman, to get a better sense of the source of discrepancy, since even Googling the definition of marketplace loan, Webster commented, might have saved the Cleveland Fed economists a lot of grief.

“The industry is so big now,” Neiman said, “that it is not easy for policymakers to fully understand the divergences between different platforms, the different products, the different modeling and the differences in levels of transparency that are now defined as online lending.”

LendingTree Releases Monthly Mortgage Offer Report for October (Business Insider), Rated: AAA

LendingTree, the nation’s leading online loan marketplace, today released its first monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network.

  • October’s best loan offers for borrowers with the best profiles had an average APR of 3.75% for purchase and 3.70% for refinance, on conforming 30-year loans.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were down 3 bps month over month, to 4.31%, the lowest since November 2016. In contrast, the loan note rate of 4.18% was up 7 bps to the highest since July.
  • Consumers with the highest credit scores (760+) saw an average APR offer of 4.18% vs 4.44% for consumers with scores of 680-719. The APR spread of 22 bps between these score ranges was 1 bps lower than in September. The spread represents nearly $12,600 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $228,730. Additional costs are due to higher interest rates, larger fees or a combination of the two.
  • Refinance APRs for conforming 30-yr fixed loans were up 10 bps to 4.26%. The credit score bracket spread widened to 16bps from 15 bps, nearly $7,500 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $235,844.
  • The average proposed down payment for purchase mortgages have been rising for 7 months and reached $59,680 in October.
  • Average monthly payments were little changed at just over $1,100 for both purchase and refinance. The credit score bucket spread was $241 for purchase and just $77 for refinance.
Source: Business Insider
Source: Business Insider

Inflation and Counterfeit Credit (GoldSeek), Rated: AAA

Let’s take a look at an often-repeated idea that is popular in the gold and alternative investing communities. The government possesses a printing press. Therefore, it will never default. It will just inflate its way out of the debt. It will devalue the dollar.

The government does not set the value of the dollar. And it has no mechanism to set it. So, logically, it has no mechanism to reset it. It cannot devalue it. In the same way, you cannot lower yourself down by your bootstraps since you are not lifting yourself up by them in the first place.

We must emphatically state that the government does not print. It borrows. Congress does not have a printing press, to create greenbacks. It has a Treasury that can sell bonds to cover whatever payments the government is obligated to make that it has not got tax revenues for. Over the past year, for example, the government increased its debt by over 630 billion dollars.

Like any bank, the Fed borrows to fund its purchases of interest-paying assets. It earns a spread between what it pays (currently about 1.25%) and what its asset portfolio pays (over 2%). The commercial banks currently deposit over $2.1 trillion in excess reserves, and the Fed’s total liabilities are over $4.4 trillion including Federal Reserve Notes (on which the Fed pays zero). Unlike any commercial bank, there is a law that obligates us to treat the Fed’s liabilities as if they were money.

We are working on the problem that all borrowing and lending uses the dollar. We offer gold financing, simplified and a yield on gold, paid in gold.

Source: GoldSeek

Right now speculative mania is occurring in crypto currencies so that may (but not necessarily, beware correlation!) shunt such capital flows away from gold. As to default risk, there are signs of rising stress in high yield credit markets, but it’s early yet.

Nav Athwal Exits CEO Role at RealtyShares (Crowdfund Insider), Rated: AAA

Nav Athwal, one of the more prominent founders in the real estate crowdfunding space, has announced his decision to step down from the CEO role at RealtyShares, a platform he founded four years ago.

Ed Forst, RealtyShares Board Member and former CEO of Cushman and Wakefield, has been selected as the interim CEO while the company searches for a permanent replacement.

Crowdfund Insider spoke to Athwal regarding his decision to change his leadership role at RealtyShares and he explained he would continue to be engaged with the company;

“RealtyShares is in the strongest position it’s ever been in. The company is moving from the build phase to the scale phase of its lifecycle. To best position RealtyShares for the future, I made the decision to transition out of my role as CEO to a new role on the Board of Directors. I asked Ed Forst to take on the role of interim CEO, while we look for a permanent CEO who will fit the culture and profile we’re seeking. I am still very much a part of RealtyShares and will be actively involved in strategic decision-making. I am looking forward to supporting the company in this new capacity and getting back into principal real estate investing and agribusiness. As I begin to work on additional projects, I will be sure to let you know.”

Leading RealtyShares Into Its Next Chapter (RealtyShares), Rated: A

I started RealtyShares four years ago with the idea of creating a company that would make real estate more accessible, efficient, and transparent. RealtyShares has come a long way since those early days in my living room. It is now a 100-person operation and the leading platform for online real estate investing and capital formation.

My primary focus has always been to best position RealtyShares for future success. RealtyShares is now at an inflection point. I will remain on the Board of Directors supporting the company as it continues on its journey to build a global marketplace for real estate investing.

Kabbage Releases Research: On Building Successful Small Businesses (Crowdfund Insider), Rated: A

Kabbage Inc., a global financial services, tech and data platform serving small businesses, released new data reporting on the similarities that connect all small business owners (SBOs), including personal sacrifices, professional challenges and growth expectations. Featuring responses from 400 SBOs, the data shows more than 67 percent expect to increase revenues by the end of 2017, with more than half anticipating an increase of 10 percent or higher.

In partnership with Bredin, a leading small-business market research firm, Kabbage polled small business owners across industries, including retail, education, manufacturing, food and beverage, healthcare, automotive, energy and finance.

RealtyMogul Tops $ 300 Million in Real Estate Funding (Crowdfund Insider), Rated: A

RealtyMogul has topped $300 million in total deal flow.

RealtyMogul has garnered over 140,000 investors, received over $300 million invested into deals presented on its platform and returned $65 million to its investors since its inception in 2012.

RealtyMogul Wins Gold in 2017 Stevie Awards for Women in Business (BusinessWire), Rated: A

RealtyMogul has been awarded the Gold Stevie Award in the Consumer Services category during the 14th annual Stevie Awards for Women in Business.

The Stevie Awards for Women in Business are the world’s top honors for female entrepreneurs, executives, employees and the organizations they run. All individuals and organizations worldwide are eligible to submit nominations – public and private, for-profit and non-profit, large and small. The 2017 awards received entries from 25 nations and territories.

The Postal Banking Solution (Jacobin Magazine), Rated: A

Fewer than two thousand people live in Bluff, but any one of them can walk into the post office and cash a check or apply for a loan.

Meanwhile, the United States is riddled with what are called banking deserts — inhabited areas, many of them urban, where residents have no access to a bank.

One in four US households is unbanked or underbanked, meaning they’re fully or partially boxed out of traditional financial services. Those 68 million people represent a growing market for payday loan sharks, and spend an average of 10 percent of their yearly income on the high interest and fees that go with alternative financial services — roughly the same proportion they spend on food.

But there’s a collective solution to the banking desert: we could set up a public postal banking system like New Zealand’s.

Fighting the fees: robo-advisers win followers, if only for lower costs (Pittsburgh Post-Gazette), Rated: A

But one day last year Mr. Hansen was complaining to his mother, an avid investor, about the high fees he was paying on his investment account. She suggested he look into an online investment company called Betterment that markets itself as a low-fee alternative to traditional financial advisers.

Some of the most popular robo-advisers — such as Betterment, Wealthfront and Charles Schwab’s Intelligent Portfolio — use exchange-traded funds to keep costs low. Betterment charges an annual fee of 0.25 percent of the account value. Wealthfront charges no fee for accounts $10,000 or less. Schwab’s robo-advising platform limits its fees to the operating expenses included in the ETF, which range between 0.07 percent and 0.21 percent of the fund balance.

Citizens Bank, a Providence, R.I.-based bank that claims the third-largest deposit market share in the Pittsburgh region, introduced a new digital investment and advisory platform on its online banking home page in September.

A July report by S&P Global Market Intelligence predicts that digital advice assets will grow from $98 billion at the end of 2016 to $460 billion at the end of 2021.

InterNex Capital Launches “Velocity” (PR Newswire), Rated: A

Digital asset-based lender, InterNex Capital (“InterNex”) is pleased to announce their Velocity platform for small and medium-sized businesses. Velocity provides borrowers on demand liquidity through the InterNex Line of Credit and delivers real-time access for working capital management. Velocity empowers accelerated growth and powerful analytics, traditionally only available to large enterprises.

Wells Fargo adds overdraft protection with Rewind (Bankrate), Rated: B

On Nov, 14th, Wells Fargo announced Overdraft Rewind, a new feature to help customers avoid fees for overdrawing their checking accounts right before payday, when overdrafts most commonly occur.

Going forward, the bank will not charge overdraft or insufficient funds fees if a direct deposit large enough to cover those charges is received by 9 a.m. local time the day after the account goes negative.

You don’t need to opt in; if you have a Wells Fargo account, you’re covered by default.

Fintech seeks to ‘democratize data’ with Nasdaq’s help (American Banker), Rated: A

The fintech startup Intrinio has partnered with Nasdaq to include the exchange’s real-time data feeds in its financial data marketplace.

Global Debt Registry Unveils Collateral Pledge Blockchain Proof of Concept (Global Debt Registry), Rated: A

Global Debt Registry (GDR), the asset certainty company, today announced it has developed a collateral pledge registry, the first of its kind in the structured credit space, using Hyperledger Fabric, one of the Hyperledger blockchain framework implementations hosted by The Linux Foundation.

Midwest is on the rise in attracting tech investors’ interest (Crain’s Cleveland Business), Rated: A

Among those quoted in the story is Mark Kvamme, a top venture capitalist in Silicon Valley who now heads Columbus-based Drive Capital. The firm has raised $550 million and invested in 26 companies, betting, The Timessays, that “the middle of America amounts to an undervalued asset, rich in markets, new business ideas and budding entrepreneurs.”

Even so, three-quarters of all venture capital invested in America goes to California, New York and Massachusetts, the National Venture Capital Association estimates, and Ohio gets less than 1%.

Getting Help with Credit Card Debt (Business Insider), Rated: A

For the many Americans who face unmanageable credit card debt, it’s time to get their financial lives in order, says Andrew Housser, co-founder and CEO of Freedom Debt Relief– and if they need outside help, time to know how to find the right firm.

People looking for a trustworthy debt relief organization to help win the battle against debt can ask Housser’s seven questions:

  1. Does the company provide actual consultations and free advice to consumers?
  2. Does the company provide educational material, including budgeting and financial advice, free of charge?
  3. What is the background of the firm’s management team?
  4. How long has the company been in business?
  5. Request and review the company’s dropout and completion rates.
  6. What are the fees, and how will the firm assess them?
  7. How will the company help with creditor calls?

Atomist is formally launching with the Developer Automation Platform, an open source client and API. The new Development Automation Platform is designed to bring automation into the development and delivery process so that developers can focus on more important tasks.

Companies such as NVIDIA, Pivotal, Kyyti Group, Marlette Funding and Barclays Africa use Atomist for automation.

Mphasis’ top trends in Cognitive Intelligence in 2018 (CIO), Rated: B

  1. Smart environments with Pervasive Human and Machine Networks
  2. Predictive Analytics driven Customer 360
  3. Artificial Intelligence driven Multi-structured analytics – Cognitive Intelligence can enable insurance companies in analysing contact centre as well as chat data interactions in real time to predict propensity for fraud based on voice, video and text analysis and correlating the same with other similar fraudulent customer behaviors. The long term objective in such scenarios is to build machine learning based intelligent systems which learn on an ongoing basis based on historical pattern based analysis of billions of user and machine data points and predicts events.
  4. Immersive Multi-modal User Experiences
United Kingdom

Assetz Capital Achieves £1.5 Million Through Latest Seedrs Funding Round (Crowdfund Insider), Rated: AAA

Less than a month after launching its latest equity crowdfunding campaign on Seedrs, peer-to-peer lending platform Assetz Capital has successfully secured £1.5 million from more than 700 investors. The online lender took to the funding portal to raise £1 million for expansion.

Banking bots advise NatWest customers on investments (ITPro), Rated: AAA

NatWest has launched a chatbot that allows customers to seek financial advice from the comfort of their sofa.

The bot will determine the best way for customers to invest their money by asking questions such as what they want to achieve from investments, their current financial situation, what they can afford, their debts and other personal information, plus their attitude to risk.

It will then suggest ISA products they could consider for investment, plus how much they should consider investing and the most effective way to use their ISA allowance.

Monzo plans crowdfunding push to deepen ties with customers (Financial Times), Rated: A

Banking app Monzo is planning to launch one of the UK’s largest crowdfunding efforts next year to give customers in the fast-growing bank what it calls “a greater share of ownership”.

Tom Blomfield, chief executive, said the start-up, which raised £71m in a private equity fundraising earlier this month, intends to make a further cash call of between £10m and £30m in 2018.

However, the main driver of the crowdfunding push would be “to enable the customer base to own part of the bank”, Mr Blomfield said, adding that crowdfunding created a “genuine sense of ownership”.

Payday loan firm used £1.2m pension liberation scheme to pay debts (Citywire), Rated: A

Three directors of an insolvent payday loan firm which received cash from pension liberation schemes have been disqualified.

Speed-e-Loans.com (SEL), used £1.2 million from private investors via the schemes to meet its existing debts.

Directors Philip Miller, Robert Alan Davies and Daniel Jonathan Miller have been banned from acting as directors for nine, six and five years respectively for breaching fiduciary duties and the duties of care, skill and diligence.

China

Ping An Insurance Preparing For IPO Of Online Financing Platform Lufax (Asian Review), Rated: AAA

Ping An Insurance Group is working towards an initial public offering for its peer-to-peer online financing platform Lufax Holding, the Chinese insurer’s chief operating officer said on Monday.

She didn’t provide a timeline or size for the planned public offering. The company was valued at $18.5 billion after a round of fundraising last year.

Ping An Insurance sells tech, lightens assets to aid returns (Asian Review), Rated: A

Ping An Insurance Group will go light on assets and target technology exports as its next mainstay, China’s leading financial conglomerate said Monday.

European Union

TransferWise reports doubled revenue for last fiscal year (AltFi), Rated: AAA

The London-based firm’s annual revenue has grown by 140 per cent since last year, coming in at £67m this year compared to £28m in 2016. Its audited results show an adjusted operating profit of £2m, and an overall profit for the fiscal year of £7.4m.

As a result, TransferWise’s operating loss has decreased from £17m in 2016 to £56,000 in 2017.

Swiss Platform Launches ICO Engine to Host Start-ups (TheStreet), Rated: A

Switzerland headquartered Eidoo has today officially launched a initial coin offering (ICO)engine that allows companies and startups to host ICOs through the Eidoo mobile app.

According to data provider Coinschedule, $3.3 billion has been raised in more than 200 ICOsover the past 12 months alone and the popularity of this innovative ICO form of crowdfunding shows no signs of relenting.

BNP Paribas buys 10% stake in SME credit specialist Caple (AltFi), Rated: A

Through the alliance and a 10 per cent stake in Caple, BNP Paribas Asset Management (BNPP AM) is establishing a new platform to offer alternative credit to European SMEs.

Australia/New Zealand

CEO Jeff Greenslade details why Heartland Bank is moving aggressively into digital banking (Interest), Rated: AAA

Greenslade also reiterated Heartland’s forecast for June 2018 year net profit after tax of between $65 million and $68 million, an increase of up to 12% from $60.8 million in the June 2017 year.

“While some understandably lament the decline of branch banking, the bricks and mortar approach is not something we can compete in and is showing signs of obsolescence,” said Greenslade.

He pointed to Heartland’s digital services offering livestock finance, personal loans, SME working capital finance and deposits, noting “significant opportunity” to build on these.

Heartland has just six branches in Takapuna on Auckland’s North Shore, Hamilton, Tauranga, Wellington, Riccarton in Christchurch, and Ashburton.

India

Lower interest rates for borrowers in offing? Read where things stand (Financial Express), Rated: A

The Reserve Bank of India’s (RBI) guidelines for peer-to-peer (P2P) lending will attract more people to these platforms and help bring down the interest rates for borrowers, Bhavin Patel, founder and CEO of LenDen Club, told Shritama Bose. Players in the segment have sought the regulator’s clarifications on the permissibility of institutional lenders on P2P platforms, he added.

Will the RBI guidelines have an impact on the lending rates?

In the current scenario, the P2P lending market is a minuscule percentage of the huge lending market in India. But, due to the sentimental impact of the regulation, many more lenders may take to P2P lending, resulting in higher liquidity on such platforms. This will eventually lead to reduction of the interest rates offered to borrowers in this segment.

How Fintech is Shaping Up the Future of Financial Services (Dekh News), Rated: A

Traditional banking institutions have changed very little in the last hundred years. Most offer online banking and mobile apps these days, but behind the scenes, very little has changed.

In total, $49.7 billion was invested in fintech between 2012-16, which indicates just how important fintech is.

Fintech innovators are more cost-effective than traditional lenders. Their technology and business models are low cost. A traditional lender may have operating costs of around 7% compared to an online lender whose operating costs are as low as 2%.

A staggering 38% of customers no longer visit banks. The rise of online banks has proven that traditional bank branches are not essential. Online lenders such as Atom have become firmly embedded in the banking ecosystem.

MENA

A tale of how two cities thrive in FinTech world (Khaleej Times), Rated: A

Two cities thrive in this new world. Singapore and Abu Dhabi. Long before renewable energy was pervasive, Abu Dhabi had established Masdar. It has brought in the magic of the Louvre from Paris. Singapore has consistently been ahead of the curve of change. The world’s largest vertical botanical garden paves the way for urban farming. The Marina Reservoir is a masterpiece of engineering and vision that turned an inlet of the sea into a strategically critical freshwater resource for the “Little Red Dot”.

Recently, the Abu Dhabi Global Market (ADGM) held its inaugural FinTech Abu Dhabi Summit.

Two major announcements were made at the event. The first was the launch of the ADGM FinTech Innovation Centre by the first half of 2018.

The second was about a collaboration. ADGM and Plug and Play, the world’s largest startup accelerator based in Silicon Valley, signed a new partnership to launch a startup acceleration programme in Abu Dhabi, focused on FinTech. The programme, first of its kind in the Mena region, will be housed within the ADGM FinTech Innovation Centre. The partnership was signed by Ahmed Al Sayegh, chairman of ADGM, and Saeed Amidi, CEO, Plug and Play. Some of Plug and Play’s success stories include Google, Paypal, Dropbox and Lending Club.

Authors:

George Popescu
Allen Taylor

Thursday November 16 2017, Daily News Digest

securitization

News Comments Today’s main news: Marcus surpasses 2017 goal. LendInvest gets into buy-to-let. Top 3 spots on KPMG Fintech 100 list are all Chinese. Lendix launches SME bridge loans in France, Spain, and Italy. Mauritia issues draft P2P lending rules. Marlette closes fourth securitization in a year. Today’s main analysis: Rising challenges unlikely to deter U.S. securitizations. Today’s thought-provoking articles: […]

securitization

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United States

Marcus from Goldman Sachs Surpasses 2017 Goal (Bank Innovation), Rated: AAA

Martin Chavez, chief financial officer for Goldman Sachs, showed in a slideshow at a Bank of America Merrill Lynch event yesterday that Marcus had already surpassed $1.96 billion in originations as of Nov. 9.

What that means is that from Nov. 9 to Nov. 14, over a span of five days, Marcus originated more than $40 million in loans.

Rising challenges unlikely to deter U.S. securitization in 2018 (Asset Securitization Report), Rated: AAA

As a result, Fitch’s outlook for U.S. structured finance ratings is predominately stable for 2018. That said, given where we are in the credit cycle, Fitch is keeping a close watch on select asset types that could run into some issues over the next 12 months.

Entering 2018, Fitch has either Positive or Stable Outlook on over 90% of its rated securitized bonds.

Perhaps the most notable change that has manifested from risk retention is the shrinking universe of originators bringing new securitizations to market. This is particularly notable in the universe of CMBS originators, which has shrunk from a high of roughly 40 to now less than 20 due to a combination of risk retention and Reg A/B.

Competitive pressures, long in place for subprime autos, are escalating in a marketplace ABS environment that is struggling to find its footing by testing recent underwriting models, asset quality and, in some cases, business models. Delinquencies and chargeoffs of existing assets continue to increase as marginal borrowers increase their leverage. Not likely to help is the drive for growth among large marketplace lenders coupled with rising market pressure from competing banks like Goldman Sachs (Marcus), Discover, and Suntrust. And unless originators tighten their credit policies with discipline, the strain will intensify.

Source: Asset Securitization Report

Online lenders should heed criticism of their effect on borrowers (American Banker), Rated: AAA

The consumer lending industry is abuzz about the Federal Reserve Bank of Cleveland’s recent report on debt consolidation and online lending. This excellent piece of research concludes that, on average, online installment loan borrowers fall into more debt after taking out a loan, experience hits to their credit score and history as a result, and take out online loans despite having access to traditional banking and credit channels.

The first two conclusions are damning, especially as these loans are often marketed as a way to help consumers consolidate credit card debt and improve their finances. At the end of the day, a lender’s duty is not merely to avoid losses. Any loan must be suitable for the customer — which means it should be made only if the lender believes it is improving the customer’s financial health. A lender not guided by that principle should be prepared for severe criticism as well as elevated losses down the road.

But it would be nonsensical to discredit or ignore the study because it includes online lenders beyond well-known fintech names.

The Best of Both Worlds with Prosper for Borrowers and Lenders (DoughRoller), Rated: AAA

Founded in 2005, and generally recognized as the first peer-to-peer (P2P) lending platform in the US, Prosper has funded more than $10 billion in loans since.

While borrowers can get personal loans ranging in size between $2,000 and $35,000, investors can put as little as $25 toward funding those loans.

There is one exception, however. You cannot use loan proceeds for post-secondary educational expenses. That’s because some of the rules in federal law aren’t compatible with P2P lending. More specifically, with education loans, the borrower must have at least 30 days to accept or reject a loan offer.

Medical procedures available for financing under the PHL program include:

  • Cosmetic dentistry
  • Bariatric surgery
  • Cosmetic and plastic surgery
  • Fertility and reproductive procedures

All Prosper loans have a term of either three or five years.

The minimum requirements are:

  • A minimum FICO score of 640, based on a TransUnion FICO 08 score
  • Debt-to-Income (DTI) ratio below 50%
  • Stated income greater than $0 (you must have an income)
  • No bankruptcies filed within the previous 12 months
  • Fewer than seven credit bureau inquiries within the last six months
  • A minimum of three open trades reported on your credit report

Interest rates are between a minimum of 3.00% for the best AA rated borrowers to a maximum of 36.00% for the lowest rated HR borrower grades.

Source: DoughRoller

Prosper for Investors

Prosper advertises that the average rate of return by investors on the platform is 7.41% per year.

Loans rated HR have a much higher average return, at 11.73%.

You can open either a General Investment Account or an IRA. Available IRAs include traditional, Roth, SIMPLE, SEP and rollover IRAs (IRA accounts are held with Millennium Trust Company). At this time, Prosper has made only individual accounts available. You cannot hold an account jointly with someone else.

For regular investment accounts, the minimum is $25. For IRA accounts, the minimum is $5,000.

Similar to other P2P platforms, when you invest with Prosper, you don’t actually invest in whole loans. Instead, you invest in small slivers of those loans, referred to as “notes.” The notes are in denominations of $25. This means that you can spread an investment of $1,000 across as many as 40 different loans.

The servicing fee is 1% of the outstanding balance of a loan. That means that if the loan pays 8%, your net return will be 7%.

Source: DoughRoller

Marlette Funding Closes Fourth Personal Loan Securitization Within Past Year (LendEDU), Rated: A

Last week, marketplace lender Marlette Funding announced the closing of its fourth proprietary securitization. The transaction was worth an estimated $312 million, and it is the fourth securitization announcement since August of 2016 from Marlette Funding.

eOriginal Named as One of Fastest Growing Companies in North America on Deloitte’s 2017 Technology Fast 500 (eOriginal), Rated: A

eOriginal, Inc., today announced it has been named to Deloitte’s Technology Fast 500 list as one of North America’s fastest growing technology, media, telecommunications, life sciences, and energy companies. eOriginal earned the rank of 294 by more than doubling revenues during the evaluation period of FY 2013 through FY 2016.

Betterment, the investing startup with $ 11 billion in assets, is rolling out a new service to make charitable giving easier (Business Insider), Rated: A

Betterment, the New York-based roboadviser, announced Wednesday a charitable giving feature that’ll let users donate shares of their account to partnered charities.

The firm, which manages $11 billion for over 300,000 customers, partnered with 11 charities for Betterment Charitable Giving, including Big Brothers Big Sisters of NYC, UNICEF, and World Wildlife Fund, according to a news release. The new feature is set to go live November 28.

Subprime car loans souring faster at nonbank lenders (American Banker), Rated: A

Despite signs of trouble in subprime auto lending, U.S. banks and credit unions are well positioned to ride out any market turbulence, a new report from the Federal Reserve Bank of New York suggests.

More than $435 billion in auto loans to borrowers with credit scores below 660 were outstanding during the third quarter of this year, the report found. That total has been climbing steadily since bottoming out at $249 billion in early 2011. Delinquency rates have also been rising as it has become easier to qualify for an auto loan.

Fidelity latest financial firm to facilitate data sharing with fintechs (American Banker), Rated: A

Fidelity Investments is joining the ranks of financial firms sharing customer account data with others through an application programming interface.

The new service, called Fidelity Access, will give third parties access to Fidelity customers’ account data for use in apps and services like tax preparation, budgeting, financial planning, spending analysis and portfolio advice — provided the Fidelity customers give their OK. Customer data to be shared includes Fidelity account balances, securities holdings, and transactions.

These are the most valuable fintech companies in America (MarketWatch), Rated: A

Stripe Inc., whose software is used by businesses to accept and track digital payments, leads the way as the most valuable fintech startup in the U.S., with a $9.2 billion valuation.

And just to be clear, fintech startups are nowhere near close to catching up to the big banks. Wells Fargo & Co. has a market cap of more than $266 billion, and Bank of America Corp. has a market cap of more than $273 billion.

RealtyProfits Offers Accredited Investors an Innovative Platform to Invest in the Real Estate Sector (Digital Journal), Rated: A

RealtyProfits (www.RealtyProfits.com) announces today an exciting and innovative investment opportunity, RealtyProfits IV, with a Preferred Return of 12 percent per annum, available exclusively to accredited high net-worth individuals and institutional investors. The private preferred equity securities, available for purchase at www.RealtyProfits.com, are being offered through WealthForge Securities, LLC, a registered broker/dealer and member of FINRA/SIPC.

The geographically diversified portfolio includes properties in 700 cities coast to coast, with a current estimated value of $1.73 billion and more than $700 million of equity in more than 5,900 portfolio properties. The properties include primarily single-family homes and condominiums ranging in value from $100,000 to more than $2,500,000.

Accredited investors can start investing with as little as $20,000. RealtyProfits IV offers monthly cash distributions. Preferred equity investors receive all distributions made by RealtyProfits IV until fully repaid. The Preferred Return is 12 percent per annum, with initial monthly Base Preferred Return payments at 6 percent per annum anticipated depending on cash flow during each of the first 24 months.

Reality Shares Teams up with Nasdaq to Launch Blockchain Tech Index (BusinessWire), Rated: A

Reality Shares and Nasdaq announce the creation of the Reality Shares Nasdaq Blockchain Economy Index, a smart-beta index that tracks the growth and development of leading global companies creating and implementing blockchain solutions.

An ETF that will track the Index is already in the works, with Reality Shares filing for it on November 2, 2017.

Reality Shares and Nasdaq compiled the index by utilizing internal and external research and their proprietary Blockchain ScoreTM ranking system. The Index is comprised of global companies that seek to capitalize upon transformational blockchain technology that may potentially disrupt the markets in which they operate.

How to Choose Between a Peer-To-Peer Lending or Traditional Loan (Experian), Rated: A

Shopping for a loan at a P2P provider is a two-step process. First, based on a credit score (or credit scores) and your answers to a few basic questions—your full name, address, date of birth and annual income—the lender determines which loan offer(s) to extend to you. (It’s possible at this juncture that the lender will decide not to extend any loan offers; if they do, they’ll explain why.)

Once you choose the loan you want, the lender does a more detailed credit check and may ask you to verify your income and to provide additional background information.  Each P2P site has its own lending criteria, including minimum credit scores, and additional information requirements vary accordingly. Some P2P lenders want information on your educational background; others want work history or details about your financial assets. In most cases, you can submit the necessary documents electronically.

The first step in the P2P loan-approval process gets one or more of your credit scores by a method known as a soft inquiry—the same process you use when you check your own credit scores. Soft inquiries have no impact on your credit scores. However, the hard inquiries traditional lenders make when you apply for a credit cards or bank loans are reported to the national credit bureaus. They appear on your credit reports, and typically cause temporary credit-score drops of several points.

In the second step of P2P loan approval, the lender performs a hard inquiry to confirm your credit score and, likely, to review your full credit report.

Before you apply for a P2P loan

  • Take a look at the fine print on the bottom of each provider’s homepage, to get an overview of the loan amounts they offer and the rates and fees they charge.
  • Make sure the lender operates in your state.
  • Check your FICO Score and review your credit reports for any major negative entries. Accounts in collection, liens and civil judgments are among the items that could torpedo your loan application, even if you meet the credit-score requirements.
  • Determine the amount of money you need and watch out for tempting upsells.
  • Consider using the Experian loan-referral tool to explore offers from multiple P2P lenders (and possibly traditional lenders as well).

Resignation of CFPB head gives Trump opportunity to erase Elizabeth Warren’s legacy (Legal Insurrection), Rated: A

Richard Cordray, an Obama appointee and head of the Consumer Financial Protection Bureau (CFPB) announced to staff in an email Wednesday his plans to resign. While he’s yet to confirm his plans, there’s speculation Cordray will return home to run for Ohio’s governorship.

Seven Signs That the Bond Bull Market is Over (INTL FCStone), Rated: A

  • The bond bear market is already here: short and medium-term treasuries have lost value in the past 5 years
  • Buybacks have fallen to a five-year low, and big repurchasers have underperformed
  • Oil prices are at a 30-month high, and the futures curve is in backwardation
  • The long and the short ends of the yield curve are moving together again
  • The Chinese trade surplus has shrunk from 10% of GDP to almost zero in the past ten years
  • The U.S. deficit is growing again, an unprecedented phenomenon in times of expansion and peace
  • Small bubbles are popping out: Auckland houses, Ethereum crypto coins, and collectible cars
Source: Global Macro Report, INTL FCStone

Read the full report here.

Spring Framework Creator Launches Atomist for Development Automation With $ 22 Million in Series A Funding (Marketwired), Rated: A

Today on stage at Structure 2017, Atomist is formally launching and unveiling its Development Automation Platform with an Open Source client and API. As part of today’s launch, Atomist is announcing $22 million in Series A funding from Accel and Matrix Partners.

Bestow Gives Texas Residents First Access to On-Demand Life Insurance (PRWeb), Rated: A

Bestow Inc., the company behind a revolutionary new approach to life insurance, today announced the early access roll out of its comprehensive, full-stack, digital life insurance solution in Texas. For the first time Bestow’s solution is available to the public, giving Texas residents primary access to apply for the only on-demand life insurance solution, instantly and without a medical exam.

Leveraging applied intelligence and algorithmic underwriting, Bestow redefines the way consumers research, buy and manage life insurance. Using data to calculate risk, Bestow removes the need for a medical exam and streamlines the entire process into a matter of minutes. The Texas launch gives consumers access to choice term life insurance plans, including a unique two year term policy never before available for life insurance. Additionally, customers can choose between ten or twenty year term life insurance.

The Zebra Raises $ 40 Million, Taps New CEO To Expand Beyond Car Insurance (Forbes), Rated: A

The Zebra, which has always described itself as the Kayak of car insurance, has hired a longtime Kayak executive as its new CEO.

The Austin-based company, which allows drivers to compare prices for car insurance online, said on Tuesday that it has tapped Kayak’s former president Keith Melnick to run the company.

The Zebra also said it has raised $40 million in a Series B funding round, led by Accel Partners. That brings its total funding to $61.5 million.

MarketScout in Dallas Creates $ 25M Insurtech Venture Fund (Insurance Journal), Rated: B

Dallas-based insurance exchange and MGA MarketScout announced it has launched MarketScout InsurTech (MIT), which will make investments in tech-enabled insurance distribution. The initial funding of $25 million will come exclusively from MarketScout Corp., parent of MIT, according to the firm.

House Financial Services Committee Approves Legislation to Help Keep Lending Partnerships Between Banks and Online Lenders (Crowdfund Insider), Rated: A

The House Financial Services Committee has approved HR 3299 or the “Protecting Consumers’ Access to Credit Act of 2017.” The bill “restores consistency” in lending laws across state boundaries. HR 3299 impacts the case of Midland Funding, LLC v. Madden – an ongoing law suit that has the potential to undermine online lenders. Sponsored by Congressman Patrick McHenry, includes an important statement that clarifies allowable interest rates on loans potentially ending the issue associated with the law suit.

How Do You Beat a Robo-Advisor? Trust (Think Advisor), Rated: A

“Technology by itself cannot create trust,” Robert C. Merton, a Nobel laureate in economics now teaching at MIT, recently told ThinkAdvisor. “The successful advisor must have the trust of their clients.”

Given the importance of trust in the advisor-client relationship, Merton recommends financial advisors (the breathing kind) should:

  • Check what they are doing to retain and enhance trust with their clients.
  • Make sure the business model being used supports the creation of trust.
  • Take advantage of technology to improve/enhance what the advisor does.
  • Do not view technology as a “competitor or substitute” for the advisor.
  • Understand and assess the financial technology they employ to certify trusting its use in client solutions.

HFLA launches initiative to help underserved reach financial stability (Cleveland Jewish News), Rated: A

The Hebrew Free Loan Association has launched its Looking to the Future Initiative with support from the St. Luke’s Foundation and the PNC Foundation. The initiative accounts for $73,000.

The initiative enables HFLA to increase its lending of interest-free loans to Cleveland’s underserved neighborhoods and grows the organization by expanding its reach, according to a news release. HFLA received a $63,000 grant from the St. Luke’s Foundation and a $10,000 grant from the PNC Foundation to launch the effort.

Fundation Purchases Select Assets from Able Lending to Enhance Partnership Strategy (BusinessWire), Rated: B

Fundation Group LLC, a digitally-enabled lender and credit solutions provider, today announced that it has acquired a variety of assets from online small business lender, Able Lending of Austin, Texas.

Former Capital One Executive Troy Jamison Joins Victory Park Capital as Chief Risk Officer (BusinessWire), Rated: B

Victory Park Capital (VPC), an investment firm focused on middle-market debt and equity investments, announced today that Troy Jamison joins as chief risk officer for the firm’s nonbank financial services portfolio. Jamison is based in Chicago and reports directly to CEO and Co-Founder Richard Levy.

CFPB updates website to officially address end of arbitration rule (Housingwire), Rated: B

The Consumer Financial Protection Bureau finally updated its website to acknowledge President Donald Trump revoking the controversial arbitration rule.

blog post from Ballard Spahr previously stressed the importance of the CFPB updating its website to note the rule’s override since the rule was killed nearly two weeks ago.

The webpage for “Arbitration agreements” now has an update on the top that states:

On Nov. 1, 2017, the President signed a joint resolution passed by Congress disapproving the Arbitration Agreements Rule under the Congressional Review Act (CRA). Pursuant to the joint resolution, the Arbitration Agreements Rule has no force or effect. The materials relating to the Arbitration Agreements Rule on the Bureau’s website are for reference only.

HOUSE FINANCIAL SERVICES COMMITTEE PASSES SMALL BUSINESS CREDIT ACT (Coalition for Small Business Growth Email), Rated: B

The 

United Kingdom

LendInvest launches into buy-to-let (Mortgage Strategy), Rated: AAA

LendInvest is launching a range of buy-to-let loans aimed at professional landlords and investors.

Rates start at 3.69 per cent for a two-year fix at 60 per cent LTV.

The firm will offer loans of between £50,000 and £5m, up to a maximum LTV of 80 per cent.

Citigroup joins the AI bandwagon (Business Insider), Rated: A

Citigroup 

Source: Business Insider

SyndicateRoom Alum Squirrel Launches Crowdcube Funding Round (Crowdfund Insider), Rated: A

Squirrel, a personal finance app designed to help users have more control over their money, has launched an equity crowdfunding round on Crowdcube. This initiative debut comes less than one year after the company completed its SyndicateRoom funding round with £585,000 in funds. Squrriel is now seeking £400,000.

Government unveils financial package to support tech (P2P Finance News), Rated: A

THE GOVERNMENT has given a £21m boost to a technology programme that has supported firms such as Zopa and Funding Circle as part of a range of measures to boost the tech sector.

The funding will make Tech City UK and Tech North one national organisation called Tech Nation and help grow government-backed startup support programmes such as Founders Network, Northern Stars, Future Fifty and Upscale.

Cash Converters International Ltd reports security breach and ransom demand (The Motley Fool), Rated: A

Payday lending and pawnbroking business Cash Converters International Ltd (ASX:CCV) announced a cybersecurity breach in its UK operations last night.

Sadly, computer system integrity is becoming an increasingly relevant – and often overlooked – concern for investors, with a vast majority of companies relying in one way or another on computer systems.

Valorem Foundation Launches All-New Cryptocurrency Platform (PR Newswire), Rated: A

Valorem Foundation, a Blockchain startup specializing in stabilized value-based exchange and transactions, has announced the launch of its new cryptocurrency platform. The company has developed a multi-layered platform to disrupt and expand the following services globally: microloans, car loans, student loans, rent payment, P2P networks, buying and selling of goods & services, business investing, real estate crowdfunding, and insurance.

Empowering the world: How you can make money through improving lives (City A.M.), Rated: A

This sea change should explain why investment firm Ethex has managed to scoop up so much support in its short history – raising more than £50m since 2013.

Its business model has a peer-to-peer lending feel – that is, it uses a digital platform to allow retail investors to lend to individuals and entrepreneurs.

But it comes with a twist, because Ethex is a not-for-profit organisation which lets you invest in companies that have a positive impact – socially and environmentally.

If you want to get involved, the platform has a minimum investment of £50, which arguably makes it more accessible to younger generations.

Trussle hires VP engineering from Funding Circle (Mortgage Introducer), Rated: B

Trussle has appointed Matthew Gretton as vice president of engineering from peer-to-peer lending platform Funding Circle.

China

Alibaba affiliates sweep top 3 spots in global fintech ranking (Asian Review), Rated: AAA

Financial technology companies linked to China’s Alibaba Group Holding took over the podium in KPMG’s latest Fintech 100 list, announced on Wednesday.

Ant Financial, which runs Alibaba’s massive Alipay e-payments network, took the No. 1 spot on the list, which was compiled with fintech accelerator H2 Ventures. Online property insurer ZhongAn Insurance and microloan provider Qudian placed second and third; both have received investments from Ant.

See the full list here.

One of China’s hottest companies rebuffs criticism about transparency (CNBC), Rated: A

Despite public criticism about a lack of transparency in some practices, Ant Financial is doing things the right way, a senior executive at the company said Wednesday.

“The demand for these securities is very healthy and continuing to expand,” Douglas Feagin, senior vice president and head of global business at Ant Financial, told CNBC’s “Street Signs.” “That, at the end of the day, is the ultimate barometer of whether you’re giving enough information to investors to invest.”

Ant Financial will use local partners in Southeast Asia: executive from CNBC.

Earnings at Some U.S.-Listed Chinese Microlenders Taper (Caixin), Rated: A

In the three months ending Sept. 30, Yirendai’s net income was down 12% to 303 million yuan ($45.7 million) from 344.3 million yuan a year ago, the company said Wednesday. Another Chinese microlender, China Rapid Finance Ltd., earlier reported a wider net loss of $4.4 million in the third quarter. Although Qudian Inc., a larger player that listed in New York last month, recently posted a four-fold increase in its third-quarter net profit from a year ago, citing better operational efficiency and its growing borrower base.

Cinda International Leads Massive Round In Chinese Fintech Company 9f Group (China Money Network), Rated: A

Beijing-based fintech company 9f Group has raised a massive new funding round from Cinda International Holding Ltd, a subsidiary of state-owned China Cinda Asset Management Co., Ltd., Focus Media Information Technology’s Chairman Jiang Nanchun, video game developer Youzu Interactive’s chairman Lin Qi and an unnamed Chinese industry fund.

The company did not disclose financial details except to say that it raised “hundreds of millions of U.S. dollars” in the latest financing deal, according to a company announcement. It is also unclear how the company is valued in the round, but 9f Group is listed on China Money Network’s China Unicorn List with a US$1 billion valuation when it last raised a US$110 million series B round in 2015.

European Union

For Spain’s banks, survival means digital (Financial Times), Rated: AAA

Santander’s Openbank has changed a great deal since it was founded as Spain’s first telephone banking service in 1995. Now a fully digital operation, its mobile app allows users to temporarily disarm a lost credit card, as well as to check whether fellow Openbank customers are buying or selling a given stock at any moment. Currently, it has some 1.2m customers in Spain and more than €8bn ($9.3bn) in assets under management.

In recent years, Spain’s two biggest banks — Santander and BBVA — have increased their financial and managerial investment in fintech, digital banking and big data. Like their peers, they are convinced that the days of branch-based lending are drawing to a close.

Spanish banks average about €15m assets under management per employee, says Daragh Quinn, banks analyst at investment bank Keefe, Bruyette & Woods. At a digital operator like Openbank, that number is close to €60m.

The digital push is on two fronts: first, a mobile app that allows customers to access almost all of the bank’s products without going into a branch. Second, a venture capital approach whereby banks invest in or partner with fintech start-ups to add products.

Online Lender Lendix Launches Flexible SME Bridge Loans in France, Spain & Italy (Crowdfund Insider), Rated: AAA

Lendix, online lender for SMEs in continental Europe, has announced the launch of a new financing product: the Flexible Bridge Loan. This product is designed to will allow a greater number of French, Spanish and Italian SMEs to benefit from the speed of execution of Lendix’s lending platform while leaving them the possibility of setting up an overall refinancing solution with other financial institutions.

The Lendix Flexible Bridge Loan is a 5-year amortizable loan with a standard commitment for the first 9 months and the possibility of early repayment at no cost for the remainder of the loan term, even in the event of refinancing by other financial institutions.

Swedish $ 370 Billion Home-Loan Market Gets New Mortgage Fund (Bloomberg Quint), Rated: A

As investors wonder whether Sweden’s housing market is headed for a correction, the country’s first mortgage fund is about to enter the $370 billion Swedish home-loan industry.

Stabelo plans to pool capital from Swedish institutional investors in exchange for fixed-income securities. That money will then be lent to home buyers. The fund starts offering its products this week and will work with Avanza Bank AB, Sweden’s largest online lender. Avanza, which owns just below 20 percent of Stabelo, will handle distribution and marketing.

International

Has P2P marketplace lending become B2P? (Cuffelinks), Rated: AAA

Due to this issue, the original incarnation of peer-to-peer lending has not lasted. As the CEO of Zopa, a UK-based P2P lender said,

“As bad debts soared, the approach was abandoned and Zopa was moulded into a ‘big sausage machine’. Its technology now links lenders with a pool of borrowers without any direct contact or the need for investors to make credit decisions.”

Australia’s major peer-to-peer lender is SocietyOne. It currently has $350 million borrowed through its platform, and is growing rapidly. In fact, loan volumes in the first three quarters of this year have totalled $141 million so far, surpassing the $139 million in loans facilitated over the entire course of 2016, as shown below.

Source: Cuffelinks
Australia/New Zealand

Exemption for personalised digital (robo) advice (Scoop), Rated: A

Following the FMA’s release of its second consultation paper on personalised robo-advice (now called digital advice), the leading law firm has published its tips for providers looking to develop digital advice platforms.

Head of Russell McVeagh’s Corporate Advisory group, Dan Jones, says the exemption is a necessary first step in putting the New Zealand financial advice regime on equal footing with overseas regimes, and may provide particular assistance to New Zealanders in KiwiSaver.

India

How P2P lending can be a route to creating financial inclusion (Daily News & Analysis), Rated: A

For years, banks have had a monopoly in lending money to businesses and individuals. However, the 2007-08 financial crisis created a havoc, rapidly-expanding the funding gap. This led to the advent of a niche fintech vertical, peer-to-peer (P2P) lending.

The geographical reach of a P2P lending platform is far superior, with the major differentiator being its online interface. Such digital financial services play an important role in supporting the objective of financial inclusion. Anybody, from the remotest areas, having access to internet, can be eligible to get/give a loan.

In the age of digitisation where almost everyone has access to internet, such platforms have the potential to change the financial graph of a country.

Are P2P platforms safe for lending and borrowing? (India Times), Rated: B

While banks and non-banking finance companies (NBFC) are the readily available sources for loans, who does the P2P platform cater to? “Unfortunately, banks in India follow mediocre credit assessment policies which are suited only for borrowers who can offer collateral or have an impeccable credit history. In practice, majority of the borrowers lie in between these extremes. Therefore, majority of Indians can borrow on P2P platforms,” says Raghavendra Pratap Singh, co-founder, i2ifunding, an online P2P lending marketplace.

RBI has put a cap on the amount that can be borrowed and lent. The aggregate exposure of a lender or the maximum that one may borrow at any point of time, across all P2Ps, shall be capped at Rs 10 lakh. Even the exposure of a single lender to the same borrower, across all P2Ps, shall not exceed Rs 50,000 and the maturity of the loans shall not exceed 36 months. “More clarity from RBI is expected on how the regulator intends to monitor the compliance of this aspect and how it will fix the responsibility,” says Singh.

Risks for a lender
Since this is an unsecured loan where there is no face-to-face interaction, a P2P lender needs to be aware of the risks involved. Bubna says, “All investments involve risk. However, in comparison to equity or commodity market investments or real estate, P2P lending has lower risk as it is addressed by on-boarding high quality borrowers. Further, lenders are suggested to create a diversified portfolio of loans.”

Asia

Introducing ACE, Crowdo’s New Artificial Intelligence Due Diligence System (Crowdfund Insider), Rated: A

Crowdo, a South East Asian online marketplace for P2P lending and crowdfunding unveiled today its proprietary Artificial Intelligence driven due diligence system, Crowdo ACE, aimed at benefiting both their borrowers and investors. Crowdo ACE takes into account a few thousand unconventional and alternative attributes and represents a new way to perform due diligence versus traditional means used by conventional financial institutions. It has already been applied to process more than 3,000 loans.

In a largely-unbanked Indonesia, Amartha uplifts women micro-entrepreneurs (YourStory), Rated: A

Twenty-six people, four nationalities, 10 days. Travelling across Southeast Asia as a Startup AsiaBerlin Roadshow delegate to explore startup ecosystems was an experience unto itself.

Amartha has so far disbursed over $13 million to 60,000 women micro-entrepreneurs and aims to improve their income, and ultimately quality of life.

Aria: Amartha is an Indonesian financial technology startup that focuses on providing affordable financial access, and mentorship to the unbanked population living below the poverty line. Amartha operates much like a peer-to-peer lending platform, and so far, has disbursed more than $13 million to 60,000 borrowers. The borrowers are mostly women micro-entrepreneurs and Amartha aims to improve their income, and ultimately alleviate their status through financial inclusion.

Aria: When we started operations in April 2016, we disbursed $40,000 a month. By the end of 2016, we were disbursing $800,000. Today, on average, we disburse $2.5 million per month. So far, we have disbursed more than $13 million, across more than 60,000 borrowers. The average ticket size of a loan now is around $300.

We charge a fee based on the profit sharing principle. Of the 22-30 percent annual interest rate paid by borrowers, we collect 11-13 percent for our revenue.

Africa

The Mauritian Financial Services Commission Issues Draft Peer-To-Peer lending Rules (Mondaq), Rated: AAA

Following the announcement of the Government on peer-to-peer lending and funding in the 2017-2018 Budget, the Mauritian Financial Services Commission (“Commission”) has issued draft rules on 10 November 2017 to regulate the peer-to-peer lending sector – as sector which has grown rapidly in other countries.

In the region, Kenya and Africa are leading in the peer-to-peer business lending market. According to a study conducted by the University of Cambridge, within Africa, South Africa had the largest number online alternative finance platforms, with $15 million raised in 2015 (The Africa and Middle East Alternative Finance Benchmarking Report, February, 2017).

Borrower and lender – a borrower must be a resident in Mauritius; however, there is no residency requirement for the lender.

Restrictions on amounts  Hence, a lender, who is a legal person, cannot lend more than MUR 500,000 (approx. GBP 11,000) in any 12 months’ period. A lender, who is a natural person, cannot lend an amount in excess of 10 per cent of his income or a maximum of MUR 300,000 (approx. GBP 6,600), whichever is lower, in any 12 months’ period.

Obligations of a P2P operator – the Peer-to-Peer operator must publish the following information on its website:

  • details of how the P2P lending will operate
  • measures to prevent money laundering and combatting terrorist financing
  • security measures to ensure data protection
  • dispute resolution mechanism.
Canada

Borrowell wins Deloitte Fast50 award (Borrowell Email), Rated: A

Borrowell has won a Companies to Watch award as part of the Deloitte Fast50 program. We are one of only eleven companies across Canada to win that award this year, and the only company from Toronto. Fast50 winners in the category for established companies include well-known names like Shopify, SkipTheDishes, Wave and Influitive. The list was announced an hour ago. 

Russia

Moscow Is On Its Way To Becoming A Smart City And Fintech Powerhouse (Forbes), Rated: A

Its citizens and businesses are also quick to adopt the latest disruptive technologies such as fintech and cryptocurrencies. Moscow has a 35 percent fintech adoption rate, higher than New York’s 33.1 percent.

Authors:

George Popescu
Allen Taylor