August 9th 2016, Daily News Digest

August 9th 2016, Daily News Digest

News Comments Today’s news focus on Lending Club’s results, OnDeck’s results, and the FDIC proposing tougher hurdles for partnerships with marketplace lenders. United States Lending Club results are in my opinion really positive: Originations in Q2 2016 > Q2 2015. I did not expect that ! Yes, there is a reduction in origination vs Q1 […]

August 9th 2016, Daily News Digest

News Comments

United States

United Kingdom

Canada

Mexico

Singapore

India

News Summary

 

United States

Lending Club results reveal pain of governance scandal, (FT), Rated: AAA

Lending Club said that originations of loans between April and June came to $1.96bn in the period, down 29 per cent from the previous quarter but fractionally higher than a year ago. That came as a surprise to some analysts, who had been braced for a steeper year-on-year fall.

Despite the stronger-than-expected top line, profits at Lending Club were hit by a surge in fees to professional services firms engaged in helping it to fight back, goodwill writedowns related to a 2014 acquisition, and a host of payments to staff affected by severance and retention programmes.

The net loss for the second quarter came to $81.4m, compared to a loss of $4.1m a year earlier.

Lending Club ended the quarter with 1,499 employees and contractors, down from 1,545 at the end of March.

There had been “a gaping hole [in management], given that the two most important people in the business — the CEO and Jeff Bogan, head of capital markets, had to leave,” said Peter Renton, founder of LendIt.

Despite the $2bn or so in quarterly loan originations the survival of the company was still in doubt, said Peter Atwater, Delaware-based president of Financial Insyghts.

OnDeck Reports Second Quarter 2016 Financial Results, (PR Newswire), Rated: AAA

OnDeck® today announced second quarter 2016 financial results highlighted by strong credit performance and record levels of Loans Under Management, Originations and gross revenue.

For the three months ended June 30, 2016, OnDeck increased Loans Under Management by 47% year-over-year to $1 billion, grew Originations 41% to $590 million, and increased gross revenue by 10% to$69.5 million.

“Our leadership position and diversified funding model enabled us to produce solid results this quarter,” said Noah Breslow, OnDeck’s chief executive officer.  “Although financial comparisons continue to be affected by our planned reduction inMarketplace sales and its resulting accounting impacts, we believe that retaining a greater percentage of loans on our balance sheet is the right decision for the long-term economics of the business. To that end, our Unpaid Principal Balance grew 57% year-over-year, which will drive future gross revenue.”

Mr. Breslow continued, “In addition, we are encouraged by credit performance trends across OnDeck’s portfolio, which continued to be strong, demonstrated by both sequential and year-over-year improvements in our 15+ Day Delinquency Ratio. We will continue to prioritize responsible growth of Loans Under Management as we progress through the remainder of the year.”

Financial Highlights

  • Gross revenue was $69.5 million for the quarter, up 10% from the prior year period.
  • Net revenue was $28.9 million for the quarter, down 33% from the prior year period.
  • GAAP net loss attributable to OnDeck common stockholders was $17.9 million for the quarter, compared to net income of$5.0 million in the prior year period.
  • Adjusted EBITDA* was a loss of $12.4 million for the quarter, compared to positive $8.7 million in the prior year period.
  • Adjusted Net Loss* was $14.0 million for the quarter, compared to Adjusted Net Income* of $7.3 million in the prior year period.

Key Business Highlights

  • Origination volume increased to a record $590 million for the quarter, reflecting 41% growth over the prior year. Lifetime Originations also reached a new milestone of over $5 billion during the second quarter.
  • Loans Under Management reached $1 billion, up 47% from the prior year period.
  • Unpaid Principal Balance grew to $790 million, up 57% from the prior year period.

Gross revenue increased to $69.5 million during the second quarter of 2016, up 10% from the comparable prior year period.  The increase in gross revenue was primarily driven by higher interest income, partially offset by lower gain on sale revenue. Interest income increased to $63.9 million during the quarter, up 27%, and primarily reflected the growth of average loans, which increased 37%.  The Effective Interest Yield for the second quarter of 2016 was 33.3%, down from 35.9% in the comparable prior year period, reflecting the continued mix shift to lower cost distribution channels, an increase in average term loan length over the period, and OnDeck’s lower pricing and origination fees for repeat loan customers.

Gain on sale was $2.8 million during the second quarter of 2016, down 76% from the comparable prior year period. The decline in gain on sale primarily reflected a lower Gain on Sale Rate during the quarter and the reduction of loans sold through OnDeckMarketplace.  OnDeck sold $79.3 million1 of loans sold through OnDeck Marketplace at a 3.5% Gain on Sale Rate during the second quarter of 2016, compared to $149.7 million of loans through Marketplace at a 7.8% Gain on Sale rate in the second quarter of 2015.  Loans sold or designated as held for sale through OnDeck Marketplace represented 15.6% of term loan originations in the second quarter of 2016 compared to 32.8% of term loan originations in the comparable prior year period.

Net revenue was $28.9 million during the second quarter of 2016, down 33% from the comparable prior year period. The decline in net revenue primarily reflected the reduction of Marketplace sales in the second quarter, which led to lower gain on sale revenue, higher provision expense and higher funding costs for the period. Net revenue margin decreased to 41.5% during the second quarter of 2016 from 67.9% in the prior year period, reflecting the decline in net revenue.

Overall, credit performance in the second quarter of 2016 was strong, with the 15+ Day Delinquency Ratio decreasing to 5.3% from 8.0% in the prior year period and from 5.7% sequentially.

The Cost of Funds Rate during the second quarter of 2016 increased to 6.7% of Average Funding Debt Outstanding, up from 5.2% in the comparable prior year period. The increase primarily reflected the acceleration of $1.6 million of deferred debt issuance costs due to the early voluntary prepayment in full of our prior securitization issuance.

Operating expenses were $47.5 million during the second quarter of 2016, up 24% over the comparable prior year period as OnDeck continued investing in our technology and analytics capabilities and incurred expenses related to supporting OnDeck’s overall growth.

Total Funding Debt at the end of the second quarter of 2016 was $554 million, up 52% over the prior year period.  The increase in total funding debt reflected the growth of Unpaid Principal Balance during the period. OnDeck continues to actively explore opportunities to further strengthen its financial flexibility, including upsizing existing debt facilities, adding new debt facilities, entering into additional securitizations, increasing Marketplace sales, and increasing its corporate line of credit.  While no assurance can be given, OnDeck expects that it will continue to be able to obtain sufficient financing to maintain its current level and planned growth of originations.

At the end of the second quarter of 2016, cash and cash equivalents were $78 million, down from $160 million at December 31, 2015. The decrease in cash and cash equivalents primarily reflected the company’s increased funding of loans on balance sheet.

Third Quarter 2016

  • Gross revenue between $73 million and $76 million.
  • Adjusted EBITDA between a loss of $9 million and a loss of $11 million.

Full Year 2016

  • Gross revenue between $280 million and $290 million.
  • Adjusted EBITDA between a loss of $35 million and a loss of $43 million.

FDIC Proposes More Hurdles for Bank Partners of Marketplace Lenders, (Pepper Hamilton), Rated: AAA

On July 29, 2016, the FDIC issued FIL-50-2016, which seeks comment on proposed Guidance for Third-Party Lending for FDIC-supervised institutions when lending through a business relationship with a third party. The guidance would apply to all FDIC-supervised institutions that engage in third-party lending, regardless of asset size.

The proposed guidance defines third-party lending as an arrangement that relies on a third party to perform a significant aspect of the lending process. This includes institutions originating loans for third parties; institutions originating loans through third parties or jointly with third parties; and institutions originating loans using platforms developed by third parties. These include marketplace lending companies with bank partnerships.

Due Date for Comments

Comments are due October 27, 2016 and should be sent to thirdpartylending@fdic.gov.

Questions

The FDIC is seeking comment on the following topics:

  • the definition of third-party lending and scope of the guidance
  • potential risks arising from the use of third-party lending programs
  • elements of third-party lending risk management programs
  • supervisory considerations.
  • examination procedures.

The proposed guidance states that the FDIC would evaluate lending activities conducted through third-party relationships as though the activities were performed by the institution itself.

To manage the risks identified by the FDIC, the proposed guidance requires institutions to establish a third-party lending risk management program and compliance management system that is commensurate with the significance, complexity, risk profile, transaction volume, and number of third-party lending relationships the institution has.

This proposed guidance is another example of the FDIC continuing to raise the bar for marketplace lenders’ relationships with FDIC-insured banks. The FDIC has a negative view of the risks associated with marketplace lending, as evidenced by its November 6, 2015 Financial Institution Letter FIL-49-2015, which addressed the underwriting and credit risks associated with purchased loans and loan participations from third parties. More recently, in the February 1, 2016 issue ofSupervisory Insights, the agency discussed the specific risks that banks need to consider when dealing with marketplace lending companies, including third-party risk, compliance risk, transaction risk, servicing risk and liquidity risk, as well as specific due diligence recommendations.

Carrie Dolan Departs Lending Club as CFO, (Crowdfund Insider), Rated: A

Dolan is a highly respected executive not only at Lending Club but within the financial industry.  Last year, Dolan was named the “Most Powerful Woman in Finance” by American Banker. The same year she was also recognized as the Financial Woman of the Year by the Financial Women of San Francisco. Before coming to Lending Club, Dolan was Treasurer for the Charles Schwab Corporation.

Lending Club released a statement on her departure, alongside Q2 financial results. The company stated;

“Carrie was integral to Lending Club’s maturity and growth over the past six years,” said Scott Sanborn, CEO and President of Lending Club. “She approached us early this year about planning a transition, and in May the Board and I asked her to postpone her plans until we could navigate recent events. I and the Board want to thank her for her leadership, commitment and dedication particularly over the last several months, and wish her well in her next endeavor.”

Dolan for her part said of the decision to leave Lending Club;

“I remain a passionate believer in this business model and this company, and it has been a deeply rewarding experience to help build Lending Club from 40 employees to over 1,500. Now that investors are re-engaged with the platform, I am excited to begin my next chapter.”

Ron Suber, President of Prosper and a marketplace lending industry advocate, told Crowdfund Insider;

“I have known and respected Carrie for many years. We wish her the very best in her next endeavors. She has played a vital role in the growth of not just Lending Club but all of marketplace lending. This industry is maturing and entering a new era.”

The announcement of Dolan’s departure comes at a time when there are rumors of tanking moral at the online lender. The all hands mentality, following the resignation of former CEO Renaud Laplanche, may have taken its toll.

Lending Club CFO Dolan steps down, (FT), Rated: AAA

Chief executive Scott Sanborn, said:

Our efforts to reengage investors are working, with fifteen of our top twenty largest investors back on the platform today.

Despite the unusual disruption to our supply of capital in May, we facilitated nearly $2 billion of loans to nearly 170,000 borrowers. While we still have a lot of work ahead, the value that we bring to borrowers and investors is stronger than ever, and we believe we have the resources and resolve to execute on our mission.

The company said on Monday that its chief financial officer Carrie Dolan had resigned to “pursue a new opportunity”. The San Francisco-based company said that Ms Dolan had approached the board earlier this year about the move but had her delay her departure until the company could “navigate recent events”. Bradley Coleman, who previously served as Controller has been named interim CFO.

News of Ms Dolan’s departure came as the company deepened its losses for the second quarter. Lending Club reported a net loss of $81.4m or 21 cents a share in the three months ended in June, compared with a loss of $4.1m or 1 cent a share in the year ago period.

Excluding one-time items, adjusted loss came in at 9 cents a share, worse than the 3 cent loss that analysts were looking for.

Revenue however climbed nearly 7 per cent to $103.4m, ahead of analysts’ forecasts for $100.6m.

Private agencies devise new credit score models for first-time loans, (LiveMint), Rated: AAA

The inability of traditional credit bureaus to assign credit scores to many loan applicants who haven’t borrowed earlier has spawned a variety of private agencies using novel techniques to fill the gap.

CreditVidya says it looks at data sources ranging from behavioural, transactional, location and social profiles to assess the risk of an individual. This could be, for instance, a check on whether a loan applicant checks office e-mail from a place where she says her office is located. The bureau says its engine runs basic searches around the Internet to verify the applicant’s employment, spending habits and cash withdrawal rates from ATMs. Consistency of a particular behaviour among these data points demonstrates stronger stability of a customer,” said Abhishek Agarwal, co-founder and chief executive officer, CreditVidya.

Hong Kong-headquartered Lenddo, another credit assessment firm, says it uses psychometric tests and application form analysis as tools to check credit risk. The company, which works in 20 countries around the world, is focusing purely on small-value loans between Rs.1 lakh toRs.8.5 lakh in India.

Experian, which started in 2010, has introduced a technique that compares a first-time customer with statistically similar customers who have borrowed before to see the trend in repayment.

According to Sumit Bali, senior executive vice-president and head-personal assets at Kotak Mahindra Bank, the main issue with using third-party services for credit assessment seems to be the issue of invasion of privacy.

Kotak Mahindra Bank has been using surrogates such as educational background, duration of employment and financial stability to assess younger customers who may not have a credit history.

For instance, LenDenClub, a P2P lender, has been looking at a customer’s income data, equated monthly instalments (EMIs) repayment record and credit bureau data and pairing it with behavioural patterns on consumer loans, family details and employer track record to take lending calls.

David Snitkof of Orchard Shares Unique Insight into Online Lending Market Dynamics, (Crowdfund Insider), Rated: AAA

Orchard Marketplace is a platform that is uniquely positioned at the intersection of institutional money and online lending.

From my perspective, the first half of 2016 has proved defining for online lending, further solidifying the fundamental truths of our industry, including broader access to credit, a better customer experience and significantly increased transparency. The unfortunate events of the past few months presented a learning moment for online lending and I’m pleased to see that many participants have taken that opportunity to set the bar even higher.

It’s not surprising that originators are trying to diversify their capital structure.

For the past couple years, originators were flush with investor demand and could compel adherence to their preferred terms.  Today, these originators are more willing to be flexible with investors who make commitments to fund their lending.

The news cycle has started to slow for many of the negative headlines of early 2016, so I expect to see the path cleared for positive developments.

In addition to continued enthusiasm from European investors, we’ve seen strong interest from Chinese Wealth Management firms to invest in U.S. credit, as evidenced by notable US-Chinese partnerships such as those between DriveWealth and CreditEase, Robinhood and Baidu, Saxo Bank, and Shanda group’s growing stake in Lending Club.

There is a common misconception that the online lending industry is not regulated, when in fact, it is.

Marketplace Update: Pre-Qual Changes, (Funding Circle Email), Rated: A

Borrower Minimum Requirement Changes
As our business grows, so does the strength of our risk models. Each loan we review provides us with more data, allowing us to continuously make improvements to the accuracy and efficiency of our assessment process.

Based on thorough statistical analysis, our Credit & Risk team have updated our minimum requirements to the following :

  1. Business Tenure – Greater than 2 years
  2. Annual Revenue – No revenue restriction
  3. Net Profit – No net profit restriction (application could be approved based on risk assessment and loan affordability)
  4. Business Type – Should not be sole proprietor
  5. Bankruptcy – Should not have happened in last 7 years
  6. Tax Lien – No auto decline due to tax lien (application could be approved based on risk assessment and paid off status)
  7. Ineligible Industries – Speculative real estate, loan brokers, non-profit, adult entertainment, weapon manufacturers and sellers, money transacting/movement businesses, gambling, marijuana producers/sellers, bail bondsmen, government entities

Elevate Hires GE Executive Director Al Comeaux as Chief Communications Officer , (Business Wire), Rated: A

Elevate, a provider of online credit solutions for non-prime consumers, announced the addition of Al Comeaux, who has assumed the role of Chief Communications Officer. Mr. Comeaux brings to the role nearly 30 years of experience leading digital and online communications strategies at leading international consumer brands.

In his role, Comeaux will focus on investor relations, corporate communications, and internal communications.

Term Sheet: August 09, 2016, (Fortune), Rated: AAA

A new study on the state of startup/corporate collaboration from MassChallenge and Imaginatik shows that not only are corporates more eager to work with startups, 23% of it see it as “mission critical, and 82% said it’s at least “somewhat important.”

Most importantly, 67% of those responded that they wanted to work with earlier stage startups.

It became trendy to launch corporate-run startup accelerator programs, which I used to mock as “innovation by osmosis.” There’s a whole new class of corporate venture arms from non-tech corporations ranging from the insurance industry toCampbell Soup. Fortune 500 companies have hired “startup scouts” and opened innovation hubs in Silicon Valley.

But lately I’ve noticed a shift in the strange, sometimes awkward relationships between corporations and startups. Corporations take startups—even very young ones—far more seriously today. Look no further than the recent Fortune 500 acquisitions of startups as proof:General Motors spent $1 billion (or around that with earn-outs) on Cruise Automotive, a 30-person autonomous vehicle startup that hasn’t even launched a product. Unilever spent $1 billion on Dollar Shave Club, a razor startup that adds just $200 million in revenue to Unilever’s €53.3 billion bottom line. And of course, yesterday Wal-Mart spent $3 billion on Jet.com

Brief: Marketplace Lender LendingUSA Names Brian Walby Vice President of Sales, (Crowdfund Insider), Rated: B

On Monday, marketplace lending platform, LendingUSA, announced it has appointed Brian Walby as its new vice president of sales. Walby previously worked as owner and managing director of RVC Consulting and has held executive and senior level positions at Experian Interactive Media and LendingTree.

United Kingdom

UK regulator responds to government questions on P2P regulations, (Business Insider), Rated: A

FCA’s response to Tyrie’s questions was published last week, the same day the UK announced its first interest rate cut in seven years. This is particularly timely, as the rate cut may end up being a driver behind new growth in the alternative finance industry, as outlined in last Friday’s briefing.

  • Responsibility f0r accuracy of information lies squarely with firms. FCA said that since October 2014 it has considered 37 cases of P2P and investment-based promotion, of which 21 were amended or withdrawn for breaking guidelines. FCA’s hard line on misleading promotions is especially important — falling interest rates will drive a decline in the interest rate paid on bank accounts, which could drive savers to explore P2P lending as an alternative way to earn interest income.
  • Firms have regulatory incentives to ensure creditworthiness of borrowers. P2P lenders must abide by the same rules as legacy lenders when it comes to assessing borrowers’ creditworthiness. Firms also voluntarily publish their loan books meaning they have a commercial incentive to ensure creditworthiness of borrowers — if books showed a default rate, potential investors would be put off, while existing investors would likely withdraw funds.
  • FCA has its own concerns about consumer understanding of risk. There is some evidence that FCA and Tyrie are right to be concerned — 37% of UK consumers who are aware of P2P lending think it is either equally risky, less risky, or are unsure of its risk relative to savings accounts. Savings accounts are covered by deposit insurance while all capital invested via P2P lending is at risk.
  • FCA admits crowdfunding is a small industry but has faith it will grow. FCA expects P2P lending and other crowdfunding models to result in a growing choice of finance providers. We think this may be optimistic and that as banks acquire new technology enabling them to compete with alternative lenders, we will actually see consolidation in the industry.

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on fintech regulation that explains how regulators in Europe are successfully growing fintech innovation and how it’s becoming a model for regulators around the world.

Here are some of the key takeaways from the report:

  • The financial technology sector is booming, and Europe is a leading region for growth. VC-backed fintech companies in Europe raised £1 billion ($1.5 billion) in funding across 125 deals in 2015.
  • With this boom in funding comes a need to regulate the nascent industry. There are a variety of approaches — active, passive, and restrictive — that regulators can take. The EU and the UK, in particular, have taken an active approach, in order to encourage growth.
  • The regulation that will have the most impact on the European fintech market is the Second Directive on Payments Services, known as PSD2. It will force banks to open up their systems to fintechs. This will allow fintechs to act as intermediaries between banks and their customers.
  • The UK regulator is actively promoting its approach to regulation as a model for other countries to follow. Some of its innovations are already being copied by other regulators around the world.

In full, the report:

  • Examines the different approaches to fintech that regulators can take
  • Explains the key EU laws that will affect the European financial services industry in the next two years and beyond
  • Explores the potential impact of new regulations
  • Details the workings of the initiative central to the UK regulator’s approach to fintech
  • Highlights what can be achieved when regulators, governments, and fintech companies work together

What does a drop in interest rates mean for SME P2P lenders?, (Alt Fi News), Rated: A

Last week marked a historic day for the UK economy. The Bank of England announced a 0.25 per cent cut to interest rates and a raft of monetary policies to encourage growth in the wake of the referendum. A 0.25 per cent base rate is the lowest we’ve ever seen, it’s the first time the monetary policy committee MPC has cut interest rates in seven years, and the committee is not ruling out a further cut later this year.

As expected we’ve already seen banks and building societies review the savings and mortgage rates they pass on to customers but the impact is less clear in the emergent P2P sector. Inevitably, there will be some changes to the rates of return that lenders receive, but whether this will actually have a tangible effect on the appeal of P2P, is doubtful.

In reality, a 50 per cent reduction in base rate is only a 0.25 per cent fall, and that will not, in itself, make much of a difference to the industry.

By providing a steady stream of cheap money for banks to lend, there was little incentive for them to attract deposits from savers, weighing down available rates.

Even with this additional incentive for banks to lend, we’ll have to wait and see whether businesses really do benefit from the scheme.

In this environment, P2P lending has emerged as a genuine alternative to this type of intervention, producing investment income four or five times greater than bank deposits, while simultaneously providing business loans to fill the funding gap left by the banks. When all is said and done, a base rate cut won’t alone be enough to drive business-led growth in the economy and may put some downward pressure on returns, but for peer to peer lenders and the platforms they use it will be water off a duck’s back.

Canada

Asset Direct – Canada’s Marketplace for Unsecured Credit, ( News Wire Canada), Rated: A

Asset Direct of Canada Inc., is proud to announce the launch of their services to consumers inCanada.  Asset Direct is Canada’s premier loan search engine for unsecured credit.  Simple and easy to use, their free platform gives consumers the power to search multiple lenders in order to find a loan and payment plan that best suits their needs.

Asset Direct works with many lenders across Canada including: Canada Drives, Consolidated Credit, Easy Financial, Grow, LendingArch, Magical Credit, OnDeck, and Refresh Financial.  Together, Asset Direct and the above-mentioned companies are co-innovating the lending market.

Mexico

Mexican P2P Lender Kubo.Financiero Raises .5M During Series A Funding Round, (Crowdfund Insider), Rated: A

Last week, Mexican peer-to-peer lending platform, Kubo.Financiero announced it had secured $7.5 million during its Series A funding round, which was led by Bamboo Finance with participation from Endeavor Catalyst, Monex Grupo Financiero, KuE Capital, Tanant Capital, Javier Molinar, Alta Ventures Mexico Fund I, Capital Invent, Vander Capital, and Wayra.

Founder and CEO of Kubo.Financiero, Vicente Fenoll, stated this is a sign of confidence not only for the company but also for Mexico’s fintech industry.

Diego Serebrisky, managing director of Alta Ventures Mexico Fund I, Managing Partner of Dalus Capital and Board Member of Kubo, added:

“We decided to continue supporting kubo in this round of capitalization, because it is one of the leading companies in the Fintech industry in Mexico, offering a much higher financial product competition, generating huge profits for their customers. “

Singapore

Funding Societies raises .5M for its loan marketplace in Southeast Asia, (Tech Crunch), Rated: A

Look! Another notable funding round for a fintech startup in Southeast Asia, after Singapore-based Funding Societies raised a $7.5 million Series A round for its take on marketplace lending.

Fund Societies is active in Singapore and (as ‘Modalku’) Indonesia — Southeast Asia’s most developed economy and its largest economy, respectively — where it is rivaled by the likes of Capital Match and MoolahSense.

The company said it has paid out $8.7 million to date across 96 loans. It claims a 94 percent repayment rate which CEO Kelvin Teo touted as its most notable data point since it shows reliability over volume.

“We’re not the biggest in Singapore, but we have done the most term loans because we take the approach that over-lending to a person will come and bite you in terms of defaults,” he explained.

As for fine details: Funding Societies is primarily focused on working capital loans. In Singapore, the average loan size is SG$90,000 ($67,000) while that falls to SG$25,000 ($18,500) in Indonesia.

It charges a loan origination feed to the borrower (3-4 percent in Singapore, 5-6 percent in Indonesia) and a 1 percent monthly fee to the lender. It claims an approval rate of between 15-25 percent for loan applicants.

Teo told TechCrunch that the company is working to expand its service to Malaysia, where it has a handful of employees and an application to operate locally is pending regulator feedback.

Teo foresaw plenty of competition coming to market — that is why he and co-founder Reynold Wijaya launched the company in 100 days last year while they were in the U.S. completing their studies at Harvard University.

That sounds like a lot, and the company has already grown to some 70 employees, but the Funding Societies CEO insists that the company is matching startup-style growth with the responsibility that comes with providing financial products.

India

RBI governor Raghuram Rajan may unveil P2P norms as parting shot, (India Times), Rated: A

As Reserve Bank of India governor Raghuram Rajan prepares to deliver what would be his last monetary policy speech on Tuesday, speculations are rife that he will announce regulations for peer-to-peer (P2P) lending.

In April, RBI had come out with a consultation paper on P2P lending platforms and asked for public suggestions on the need to regulate them. Next step for the regulator is to come out with draft guidelines and ask for further suggestions before coming out with the real regulations.

People in the know said the buzz at the RBI is that Rajan wants to get all the innovative projects – including P2P platforms, regulations around the financial technology space and new payments procedures like Unified Payments Interface and Bharat Bill Payments – cleared before he demits office.

Author:

George Popescu