Monday August 6 2018, Daily News Digest

China alternative assets

News Comments Today’s main news: Barclays buys stake in MarketInvoice. N26, Revolut are coming to America. Zopa raises 44M GBP for new bank. China private equity funds suffer. Linked Finance ink 10M Euro in loans in Q2. Today’s main analysis: The states where payday lending charges almost 700 percent interest. Today’s thought-provoking articles: PeerIQ’s MPL Securitization Tracker. Debut of the […]

China alternative assets

News Comments

United States

United Kingdom

China

European Union

Other

News Summary

United States

Will Europe’s fintech banks conquer North America? (AltFi), Rated: AAA

Revolut and N26 will be launching in the US soon, but what sort of market will they be entering? How are local banks adapting their offerings to suit younger users? And what will be the impact of the newly-announced bank charters for fintechs?

PeerIQ’s MPL Securitization Tracker for 2Q2018 (PeerIQ), Rated: AAA

  • Twelve marketplace lending securitizations priced this quarter totaling $5.0 Bn, the highest level of quarterly issuance, representing 36% growth YoY.  To date, cumulative issuance equals $38.4 Bn across 126 deals.
  • We observed spreads widening and yields rising on new issuance. Weighted average all-in yields on consumer deals increased from 2.9% to 4.2% QoQ, and on student deals from 3.0% to 4.5% QoQ.
  • All deals issued this quarter except SoFi’s student loan passthrough securitizations were rated.   
  • Tranches continue to get upgraded. So far, ratings’ agencies have upgraded 51 consumer MPL tranches and 67 student MPL tranches that are outstanding.
  • Citigroup, Deutsche Bank, and Credit Suisse continue to top the issuance league tables with 54% of MPL ABS transaction volume.
  • Freedom Financial issued its inaugural deal and OnDeck returned to the market. SoFi issued over $2 Bn in student loan passthrough securitizations.
Source: PeerIQ

Debut of the OCC’s FinTech Charter + Supervisory Standards (PeerIQ), Rated: AAA

The US economy added 157k jobs in July and the unemployment rate dropped to 3.9%. Wage growth came in strong at 2.7%, potentially fueling inflation down the road and keeping the Fed on its stated rate hike path.

OCC Asserts its Authority and is Open to Accepting SPNB Charters

Immediately following the report, Joseph Otting, Comptroller of the Currency, announced that the OCC would start accepting applications from “fintech companies that are engaged in the business of banking but do not take deposits.”

An SPNB can engage in a limited range of banking or fiduciary activities like credit card operations, taking deposits, paying checks, lending money, community development, or cash management activities. The policy is a significant development as companies with the Fintech charter would be able to perform banking activities like lending and payment processing nationally.

Who are the Likely Winners and Losers?

The long-term winner of the charter is the US consumer who will benefit from greater competition, innovation, and access to credit. Payments companies that seek to compete with Visa/Mastercard also stand to benefit. Lenders that qualify for the charter may also have a competitive advantage. Payments arms of firms like Google, Apple, Amazon and PayPal would fit the profile, as well as large non-bank lenders that can demonstrate sustainable profitability de-risked their business models. Fintechs that have liquidity, funding, or going-concern risks will struggle to obtain charters.

Less is more for OCC’s fintech financial inclusion plans (American Banker), Rated: A

The Office of the Comptroller of the Currency is threading a tricky needle.

It has affirmed that it plans to evaluate fintech charter applicants based on their fair lending efforts, but it’s pulled back on specifics for how that process might work. That has made some consumer groups nervous.

The OCC published an updated version of its licensing manual supplement for fintechs on July 31, in connection with an announcement that it’s begun accepting applications for fintech charters.

Fintech charter: Be wary of innovating into another crisis (The Hill), Rated: A

But before we allow fintech firms to bound over the regulatory mound, it’s important to take a hard look at why we regulate the financial services sector so thoroughly to begin with.

Many also claim that fintech will bank the unbanked and lead to financial inclusion. The only thing standing in the way of all of this change and disruption, many claim, is overbearing government regulation.

With OCC’s door officially open, will fintechs enter? (American Banker), Rated: A

Fintech companies now have the federal option they have long sought after the Office of the Comptroller of the Currency green-lighted firms to apply for a special-purpose bank charter. But winning OCC approval on charter bids will not be a walk in the park.

One day after the OCC announcement, some fintech firms signaled clear interest in the charter. But the agency’s decision also prompted a slew of additional questions, including whether firms would be able to meet the regulator’s tough criteria, and whether state regulators would continue to fight

Does a Bank Charter for Square Still Make Sense? CEO Jack Dorsey Thinks So (Bank Innovation), Rated: A

POS payments provider Square is still interested in pursuing a bank charter, but how? It may be more challenging given that the company will be paying more attention to its customer-facing prepaid products like Square Cash and its Cash Card, according to CEO Jack Dorsey in the company’s earnings call yesterday.

This map shows the states where payday loans charge nearly 700 percent interest (CNBC), Rated: AAA

Some short-term loans cost over 20 times more in interest than the average credit card. And yet one in 10 Americans have used them.

In the U.S. today, these loans are a $9 billion business. In the past two years, 11 percent of U.S. adults say they’ve taken out a payday loan, according to a recent survey of approximately 3,700 Americans that CNBC Make Itperformed in conjunction with Morning Consult.

Source: CNBC

This Rebrand Is Not Barking Up The Wrong Tree (Forbes), Rated: AAA

For 

$ 203.49 Million in Sales Expected for Elevate Credit Inc (ELVT) This Quarter (Fairfield Current), Rated: A

Equities analysts expect Elevate Credit Inc (NYSE:ELVT) to announce sales of $203.49 million for the current fiscal quarter, according to Zacks. Two analysts have made estimates for Elevate Credit’s earnings, with the lowest sales estimate coming in at $201.00 million and the highest estimate coming in at $205.97 million. Elevate Credit reported sales of $172.85 million in the same quarter last year, which indicates a positive year-over-year growth rate of 17.7%. The business is scheduled to announce its next earnings report on Monday, October 29th.

NCUA’s Proposed Payday Alternative Loans Unattractive to CUs: Trades (CU Times), Rated: A

A new payday alternative program proposed by the NCUA is unlikely to convince many more credit unions to offer short-term loans because the loan terms are too prescriptive, credit union trade groups said.

Why Real Estate Deals, Not Startups are the Big Success Story of Equity Crowdfunding (Crowdfund Insider), Rated: A

In the year after Title III went into effect, startups received only $38 million in equity crowdfunding, according to Bloomberg—an amount that amounted to “a rounding error” in the larger system.

Before the JOBS Act, there were three formidable barriers to widespread individual investment in commercial real estate.

  1. Limited access to deal flow
  2. Inconvenience
  3. High minimums

Online crowdfunding has eliminated all three barriers

To begin with, the process is far more transparent and accessible, with minimum investments dropping to as low as $10,000.

ICBA calls for a new FDIC moratorium on industrial loan charter applications (American Banker), Rated: A

Renewing longstanding opposition to industrial loan charters, the Independent Community Bankers of America urged the Federal Deposit Insurance Corp. to impose a two-year moratorium on such applications.

The trade group also pressed the FDIC to reject an application from the student loan servicer Nelnet for an industrial loan charter.

Lenders One Names Michael Kuentz as Chief Executive Officer (Altisource), Rated: A

Lenders One Cooperative, a national alliance of independent  mortgage bankers, announced that Michael Kuentz has been promoted to the role of Chief Executive Officer of Lenders One by its Board of Directors. Mr. Kuentz previously held the title of President. In his new role, he will assume responsibility for Lenders One’s day-to-day operations and strategic execution as well as continue to lead and manage the cooperative’s sales effort.

United Kingdom

Barclays takes stake in SME lender MarketInvoice (Banking Tech), Rated: AAA

Barclays has taken a “significant” minority stake in UK-based SME lending platform MarketInvoice.

Details were not disclosed, because we live in the age of secrecy, but the bank says the deal is a key part of its plans to invest in new business models for growth, and MarketInvoice’s ambition to broaden its reach across the UK.

P2P lender Zopa raises £44m to fund new bank (Financial Times), Rated: AAA

Zopa has raised £44m in a new funding round to aid its expansion into traditional banking as its traditional peer to peer business comes under pressure from regulators.

Wonga investors inject £10M so cash-strapped payday lender can fund claims (TechCrunch), Rated: A

Yesterday Sky News reported that those same two, Accel Partners and Balderton Capital, are among a group of Wonga investors that have agreed to inject a further £10M (~$13M) into the business to help fund compensation claims related to its past censured practices.

Can this new breed of robo-advisers help you take control of your money? (The Telegraph), Rated: A

Savers have historically been forced to choose between picking and managing their own investments, paying for financial advice, or, recently, handing their money over to a “robo adviser” to do it for them.

China

China private equity funds suffer wave of closures (Financial Times), Rated: AAA

Chinese alternative asset managers have become the latest casualty of the country’s crackdown on debt and financial risk, with a record number of private equity and hedge funds dissolving in recent months as new regulations limit their fundraising.

In the first six months of this year, the Asset Management Association of China (Amac) — a government-controlled industry body — “lost contact” with 163 private fund institutions, more than 70 per cent of the total for which contact was lost for 2017.

Source: Financial Times

Chinese P2P chief Yao Kunjie makes the Forbes high achievers list while under investigation (SCMP), Rated: A

Yao Kunjie, 28, is the CEO of peer-to-peer lending platform Beimi Wallet and was named on the financial sector list on Thursday.

Forbes magazine puts out regional lists of high achievers born after January 1, 1988, in 20 sectors every year.

The announcement came just a week after Shanghai police said Yao had been detained on July 13 on suspicion of “illegally absorbing public funds”, without elaborating, in a statement last Saturday.

Qudian Tries to Distance Itself from Other P2P Lenders (Capital Watch), Rated: A

Qudian Inc. (NYSE: QD) defended its business model Friday, saying that it is not undergoing the same “[volatility] and uncertainty” suffered by China’s broader peer-to-peer industry.

The announcement sent the company’s stock up nearly 5 percent mid-afternoon to $7.59 per American depositary share.

Source: Capital Watch

China lends trillions to SMEs, farmers as part of inclusive finance push (Global Times), Rated: A

For example, banks’ balance of loans to farmers stood at 30.95 trillion yuan ($4.53 trillion) as of the end of 2017, up 48.2 percent from 2013. The balance of lending to small and micro-sized businesses stood at 34.74 trillion yuan in 2017, up 73.1 percent from 2013, according to Feng.

European Union

€10m loans mark record quarter for Linked Finance (Independent), Rated: AAA

Linked Finance, an Irish peer-to-peer (P2P) lending platform, recorded its strongest quarter to date in the three months to the end of June, facilitating over €10.1m to Irish SMEs.

This followed on from a strong start to 2018, with total lending for the year now more than €18.7m, up 65pc on the same period in the previous year.

The increase in lending is down to both the volume and size of loans. The number of loans that went live on the platform rose by 39pc in the period to 335, with average loan size up 19pc to almost €56,000.

BANCO BNI EUROPA LAUNCHES EQUITY RELEASE IN SPAIN WITH ÓPTIMA MAYORES (Fintech.Finance), Rated: A

Banco BNI Europa launches equity release in Spain in partnership with Óptima Mayores, the Spain’s leading financial advisor specialized in this segment.

Altisource Names Justin Vedder as Chief Operating Officer of Origination Solutions (Altisource), Rated: B

Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”) (NASDAQ: ASPS), a leading provider of services and technologies to the mortgage and real estate industries, today announced the appointment of Justin Vedder as Chief Operating Officer, Origination Solutions.

International

How Fintex Capital Enabled the $ 30M Banco BNI Europa Investment in Upgrade Loans (Lend Academy), Rated: AAA

Last month we learned about the new $30 million investment received by Upgrade from the Portuguese digital bank Banco BNI Europa.

In reality BNI Europa did not actually purchase Upgrade loans, they invested in a privately placed bond that was backed by Upgrade loans. This bond was issued by Fintex Capital.

India

Regulations Shrink India’s Peer-To-Peer Lending Industry (Bloomberg Quint), Rated: AAA

When the Reserve Bank of India first brought out a discussion paper on peer-to-peer lending in April 2016, it said that there were 30 such start-ups in the country. It then proceeded to fashion a set of rules for the nascent but fast growing sector and came out with regulations in October 2017. Key among them was a requirement that peer-to-peer lenders register with the RBI.

Nine months since, only five of these lenders are registered in the ‘NBFC-P2P’ category, according to RBI data available until June 30, 2018.

This includes:

  • Fairassets Technologies India Pvt. Ltd.
  • Fincquare Fintech Pvt. Ltd.
  • Bridge Fintech Solutions Pvt. Ltd.
  • Bigwin Infotech Pvt. Ltd.
  • OHMY Technologies Pvt. Ltd.

Cashkumar foresees huge potential in online lending for short-term credit (The Hindu Business Line), Rated: A

Peer-to-peer (P2P) lending company Cashkumar, which offers short-term credit to borrowers, foresees huge potential to lend in the online space.

At present, the company services around 200 loans a month . It is targeting to service about 80 loans a day in the next six months, besides expanding operations to 20 cities by next year.

Asia

Japan’s Samurai Asset Finance Offers Loans Collateralized by Digital Assets (Bitcoin Exchange Guide), Rated: A

A Japanese firm listed on the Tokyo Stock Exchange recently unveiled loans that can be collateralized by three digital assets, namely BitcoinBitcoin Cash and Ethereum. As of now, the maximum amount borrowable is capped at 300 million yen (approximately $2.7 million).

Currently, the loan limits range from a minimum of 20 million yen ($180,000) to a maximum of 300 million yen ($2.7 million). The default repayment period is twelve months, although there are provision for extensions. The interest rates for these loans start from 7% to 155 annually, inclusive of commissions and extensions charges. If a lender fails to repay the loan in time, they will liable to a delinquency charge of 20% per year.

Crypto for real estate (Business Times), Rated: A

WE believe, in time, all real estate assets will reside on the blockchain – this is the grand vision of real estate entrepreneurs Julian Kwan and Alice Chen. The married couple – who co-founded Singapore-based real estate crowdfunding platform InvestaCrowd – has created a new product: RealFuel,

IMDEX ICO (IMDX Token): Decentralized Exchange & Crypto Banking Platform? (Bitcoin Exchange Guide), Rated: B

It’s difficult to ascertain much information about the people behind IMDEX. The company appears to have some connection to a Korean company called Techton Soft that was established in 2016. The Techton Soft website indicates that the company specializes in investment trading solutions, peer-to-peer lending, artificial intelligence, and cryptocurrency exchange. The Techton site states that the company has 10 employees, making it a rather small operation, and lists a man named SangHyun Kim as the CEO.

Authors:

George Popescu
Allen Taylor

Mondy July 16 2018, Daily News Digest

market implied inflation

News Comments Today’s main news: LendingTree to acquire Student Loan Hero. SoFi to go after brokerage business. British Business Bank talking about backing Funding Circle loans. Funding Circle slashes US exposure. Duanrong raises $45M. Today’s main analysis: Deep dive on inflation. Today’s thought-provoking articles: New LendingClub account performance. New York state’s recommendations for online lending. Is there subprime auto loan bubble […]

market implied inflation

News Comments

United States

United Kingdom

China

Asia

Other

News Summary

United States

LendingTree, Inc. Announces Agreement To Acquire Student Loan Hero (Payment Week) Rated: AAA

LendingTree, Inc. (NASDAQ: TREE) announced today that it has entered into a definitive agreement to acquire Student Loan Hero, Inc., a personal finance website dedicated to helping student loan borrowers manage their student debt.  Student Loan Hero offers current and former students in-depth financial comparison tools, educational resources, and unbiased, personalized advice.

We are going after the brokerage business, says SoFi CEO (CNBC) Rated: AAA

SoFi CEO Anthony Noto discusses the company’s “modern take on the checking account” and where he seeing the next big investment opportunity, including cryptocurrency.

Rising Inflation, Deep-Dive on Inflation Trends (PeerIQ), Rated: AAA

Consumer credit increased by $26.4 Bn in May, the largest monthly jump in 6 months, to an all-time high of $3.9 Tn. Growth was driven by a $9.8 Bn increase in revolving credit card debt. Credit growth has been averaging 7.6% fueling consumer spend-driven GDP growth. The Fed’s latest G-19 report can be found here.

Source: Federal Reserve, PeerIQ

Rising US Inflation

US CPI rose by 2.9% YoY, its highest reading since March 2012. This week we look at various inflation measures and how they stack up against the Fed’s 2% inflation target.

Measured Inflation vs the Fed’s Inflation Target

Source: BLS, BEA, PeerIQ
Source: Bloomberg, PeerIQ

New LendingClub Account Performance – Q2 2018 (Lend Academy) Rated: AAA

The current status of my LendingClub account is very typical for new investors. A handful of loans have been paid in full while just a couple have entered either grace period or the late 31-120 days stage. A majority of the loans are issued and current.

Below is a screenshot of my target allocation shortly after account setup with about half of my capital allocated to LendingClub notes.

Source: Lending Club

Below is a screenshot as of today with all $5,000 invested which now closely resembles my target allocation.

Source: Lending Club

DFS Releases Recommendations for Online Lending (deBanked), Rated: AAA

The New York State Department of Financial Services (DFS) released a report on Wednesday on the subject of online lending in the state. The report was mandated by a billsigned by New York Governor Andrew Cuomo on June 1 of last year.

Source: New York Department of Financial Services

Access the full report here.

Loan applicants are reverse engineering the online lending algorithms (Tearsheet) Rated: A

Online lenders are assailed by fraudsters on all fronts. There were 1579 data breaches in the U.S. in 2017, 302 of which resulted in the exposure of full credit and debit card numbers. Because online finance frees up applicants from having to show up physically to a bank, it also opens up opportunities for identity fraud. This really is the other side of phishing and identity hacks. Once data ends up in the hands of criminals, the next step is to monetize it by taking out fraudulent loans.

Kabbage claims that 95 percent of its customers have a fully-automated underwriting experience.  “By getting customers to connect their Amazon, Square, eBay, and business bank accounts, Kabbage gets a direct view into the finances of a small business borrower,” said Yaakov Erlichman, vice president of fraud and underwriting strategy at Kabbage. “We have more than two million live data connections. It’s really hard to fake live business data.”

You Accidentally Sent $ 149 to a Stranger on Venmo? Good Luck Getting It Back (Wall Street Journal) Rated: A

With the rise of money-transfer apps such as PayPal Holdings Inc.’s Venmo, it’s never been easier for people to send money to their friends. It’s also never been easier to accidentally send money to a total stranger.

Getting the money back is often far more difficult: Many digital payments are irreversible.

For the recipient, it’s the equivalent of finding cash on the sidewalk— except it comes with a moral quandary.

Baker Hill Inks Loan Origination Deal with West Texas State Bank (Finovate) Rated: A

One month after bringing its loan origination platform to $5.6-billion North Carolina-based First Bank, Baker Hill is back in the news. The fintech is teaming up with West Texas State Bank (WTSB) to support efficient loan growth with its NextGen Loan Origination for Commercial and Consumer Lending platform. The technology, in the words of West Texas State Bank Chief Lending Officer and COO Les Robbins, will help the bank “streamline the origination process with … roles-based, intuitive lending solutions.”

Uphold To Bring Crypto-Backed Credit To Members With Libra Credit Partnership (Block Tribune) Rated: A

Cryptocurrency platform Uphold has partnered with crypto lending platform Libra Credit to offer its users access to a variety of Libra Credit products.

Founded by former PayPal financial technology veterans, Libra Credit is an ethereum-based lending network that facilitates open access to credit anywhere and anytime. Libra Credit offers a seamless digital lending process that can be completed in five steps: application, verification and credit assessment, confirmation, collateral deposit, and disbursement. The platform focuses on a dual-credit risk scoring mechanism that considers the creditworthiness of the pledged collateral as well as the credit information of the borrower. Borrowers will be able to pledge any crypto-assets as collateral and receive loans in their desired asset.

How to Choose Your First Real Estate Crowdfunding Investment (U.S. News) Rated: A

Crowdfunded real estate investments account for $2.5 billion of the $7 trillion commercial real estate market, according to CFX Markets. There’s major growth potential in the industry as more investors lock in on the benefits of investing in real estate through crowdfunding platforms.

United Kingdom

British Business Bank in talks to back £150m of Funding Circle loans (Peer2Peer Finance) Rated: AAA

FUNDING Circle’s listed investment trust is in talks with the British Business Bank (BBB) about providing further funding through the peer-to-peer platform.

It comes as the Funding Circle SME Income Fund (FCIF) reported its net asset value (NAV) had increased from £308m to £165m in the year to March 2018, while its NAV total return was 14.9 per cent.

FCIF highlighted a structured finance transaction with Citibank to fund loans through the Funding Circle platform as one of its major deals last year, and also revealed it was in talks with the BBB about providing up to £150m of funding.

Funding Circle slashes US exposure after dividend cut (Citywire) Rated: AAA

Funding Circle SME Income (FCIF) will reduce exposure to US loans after the increased cost of hedging the dollar saw the listed peer-to-peer fund cut its dividend.

Last month, the alternative lender to small businesses said it would cut its annual dividend of 6.5p per share to between 5p and 6p, after a ‘material increase’ in the cost of removing the impact of changes in the value of the dollar on its portfolio.

However, a ‘partial reallocation of capital deployment away from the US and towards the UK and continental Europe’ will see North American loans fall by up to 10% from 25% of the £329 million portfolio.

LendInvest partners Onfido for digital verification services (Verdict) Rated: A

Instead of the need for paper forms, LendInvest BTL applicants can now confirm their identity online by incorporating Onfido’s proprietary technology into its digital application system.

The new solution not only eliminates the needs for certified physical copy documents and saves time, but also it makes the mortgage application process easier for both brokers and their clients

Plans are also being considered to add Onfido technology into the onboarding process used for LendInvest’s online investment platform in the future.

UK Peer to Peer Lender Lending Works Raises £2.8 Million in New Funding Round (Crowdfund Insider) Rated: A

Lending Works has received £2.8 million in funding in a round led by Maven Capital Partners, with £800,000 of backing from Pollen Street Capital and NVM Private Equity. The UK peer to peer lender said proceeds will be used to fuel growth including loan customer acquisition via other channels.

Founded in 2014, Lending Works has originated approximately £115 million in loans with £32 million (27%) in the first half of 2018. – 27% of which (£32 million) was distributed in the first half of 2018 alone. Lending Works expects to originate £100 million in loans during 2018. The P2P lender is also a member of the UK Peer to Peer Finance Association (P2PFA) – the association that represents leading P2P platforms.

Another robo-adviser enters the fray: Tiller lets you invest in passive AND active funds – so how does it compare? (This is Money) Rated: A

Another player has entered the increasingly crowded ‘robo-advice’ space to cater for modest investors who have been priced out of conventional financial advice.

The new service, called Tiller, will pit against the likes of Nutmeg and Moneyfarm in a bid to win the custom of those investing smaller amounts who are under-served by financial advisers.

Like many of its competitors, Tiller creates a personalised portfolio which is rebalanced if necessary, buying and selling depending on what the markets do.

China

There’s No Subprime Bubble in China Auto Loans (Bloomberg) Rated: AAA

Slowing car sales and tightening credit look like a toxic combination for China’s auto-financing industry, which has exploded in the past few years. Concerns the sector is heading for a subprime-like meltdown may be overblown, though.

Sales in the world’s largest car market rose 2.3 percent in June from a year earlier, data showed last week. While faster than several analysts expected, growth decelerated from an 8 percent pace in May. Compared with the previous month, deliveries fell about 1 percent in June.

The cooling coincides with Beijing’s quest to deleverage the financial system, which has led to tighter liquidity, reduced access to credit and, in theory, squeezed consumer discretionary spending. In a report last week, analysts at Sanford C. Bernstein linked the weakness in car sales to a slowdown in peer-to-peer lending, pointing to “the deflation of what amounts to a subprime (P2P) auto bubble.”

Source: Bloomberg

Chinese Fintech Platform Duanrong.com Raises $ 45M Series B Round (China Money Network) Rated: AAA

China Money Network’s DealShot provides detailed information on venture capital and private equity deals in China on a daily basis.

Here you can find out where Chinese investors have been investing their money each workday.

Company Round Lead Investor Participants Sector Headquarters
Duanrong.com Series C Lanua Asia fund Fintech Beijing
LemonBox Seed Round Y Combinator, Guangjian Lab E-commerce Beijing
58 Suyun Series A InnoVision Capital Cainiao Network, Russia-China Investment Fund (RCIF), Qianhai Fund of Funds, 58 Daojia Logistics Tianjin
Honor Alliance Series A Angel Around Investment Fund Enterprise services Beijing
ASR Microelectronic Series B IDG Capital, Wanrong Hongtu Fund Smart Hardware Shanghai
Hash World Series A+ Shunwei Capital Danhua Capital Blockchain Beijing
EON Protocol Angel Round UpHonest Capital, BGOGO, Fission Capital Blockchain
Paopao Hero Series A undisclosed Consumer Upgrade Guangzhou
Haowujiayi Pre-A undisclosed E-commerce Shenzhen
51signing.com Series A Fenbushi Capital, DL Capitals Enterprise services Beijing
Viva Vision Biotech Series B Healthcare Shanghai
iBanker Pre-A Button Capital Mindfulness Capital, AC Capital Education Beijing
Soushi88.com Series A Ferry Venture Capital Buhuo Ventures E-commerce Guangzhou
IPSTAR Pre-A miHoYo Volcanics Venture, Shenzhen Huode Qianhai Fund Management Co., Ltd Media & Entertainment Shanghai
Huaqiang PCB Series B Cowin Capital, China Merchants Bank E-commerce Shenzhen

China: WeiyangX Fintech Review (Crowdfund Insider) Rated: A

Toutiao Marches into the Fintech Market with Cash Loan Products

China’s leading digital media platform Toutiao has long denied the potential of entering the financial markets. However, it is reported this week that a series of cash loan products have launched on Toutiao’s app without too much marketing.

The product Fangxinjie (literally meaning reliable lending) was listed within Toutiao’s digital wallet with credit up to200,000 yuan and daily interest low to 0.03%.

Fintech Startup xyb100 Secures ¥200 Million B Round Funding led by Japanese Financial Institution Credit Saison

This week, fintech startup xyb100 announced that it had secured 200 million B round funding by famous Japanese financial institution Credit Saison.

European Union

Fundvisory Raises €1.8M From Macif and Aviva France (Coverager) Rated: AAA

Fundvisory, the Paris-based startup that offers a white-label robo-advisory solution has raised 1.8 million euros from Aviva France and Macif.

Founded in 2015, Fundvisory provides automated and modular robo-advisory tools such as portfolio monitoring, risk profiling and compliance to help financial institutions digitize their financial advisory services. Led by Nicolas Gonzalez and Romain Deguest, the startup previously raised 300,000 euros from friends and family, and is currently a team of 10 according to LinkedIn.

India

RBI Grants NBFC-P2P Certification to Cashkumar (Silicon India) Rated: AAA

According to a recent Morgan Stanley report, Indian P2P lending industry is estimated to cross the $4 billion mark by 2021. Owing top such pleasing industry forecast, along with the additional support schemes & initiatives from the Government, the fintech players in India have garnered a lot of momentum. In this light, Cashkumar, one of India’s leading P2P lending companies, announced that it has been granted the NBFC-P2P license from RBI (Reserve Bank of India). With this, Cashkumar joins the list of the very few fintech firms who hold the NBFC-P2P accreditation. Post this, the company focuses on providing loans between  20,000-100,000 with tenures of 3-12 months and offering only to salaried individuals.

Asia

Japanese startup Paidy raises $ 55M Series C to let people shop online without a credit card (Tech Crunch) Rated: AAA

Paidy, a fintech startup that enables Japanese consumers to shop online without using a credit card, announced today that it has raised a $55 million Series C. The round was led by Japanese trade conglomerate Itochu Corporation, with participation from Goldman Sachs.

The Tokyo-based startup says this brings its total funding so far to $80 million, including a $15 million Series B announced two years ago. One notable fact about Paidy’s funding is that it’s raised a sizable amount for Japanese startup, especially one with non-Japanese founders (its CEO and co-founder is Canadian and Goldman Sachs alum Russell Cummer, left in the photo above with CTO and co-founder Lee Smith).

Bambu raises $ 3m in Series A funding (FinTech Futures) Rated: A

Bambu CEO and founder Ned Phillips says it has topped growth targets for the year, and points to seven new clients in Asia and the US that were slated to go live soon.

He adds: “Our next ambitious goal is to get a million end users on the platform by 2019.”

Also participating in the round were Singapore family office Octava and Japanese fintech investor Mamoru Taniya.

The funding takes Bambu’s total capital to more than $4 million.

Lendr wins Asian award for innovative partnership (Manila Standard) Rated: B

Lendr, the digital lending platform of FINTQnologies Corp., bagged the ‘Most Innovative Partnership Strategy’ award at the 21st Annual Telecom Asia Awards on June 26 in Singapore.

MENA

Generation Start-up: Smart Crowd helps micro-investors build wealth, brick by brick (The National) Rated: AAA

In the case of Smart Crowd, the platform enables fractional ownership of real estate. Investors can purchase a stake in a rental property for as little as Dh5,000 ($1,300), ‘co-owning’ the asset along with tens, hundreds (or thousands, depending on the size and value of the unit) of other people.

They can hold their stake for as long as they wish, collecting the rent from it, or sell it and use the proceeds to invest in something else listed on the platform. Or they can use accumulated returns to buy a property on their own.

Smart Crowd is licensed by the Dubai Financial Services Authority, the regulator of Dubai International Financial Centre, Dubai’s financial free zone, to provide crowdfunding services for real estate. It won regulatory approval in January, obtained an operating licence in April, and in June completed its first transaction – the acquisition of a Dh365,000 studio in Remraam generating a gross annual yield of 10.8 per cent (approximately 8.6 per cent with fees), the founders say.

Big data for bigger opportunities (Khaleej Times) Rated: A

Businesses in Dubai are not sparing any efforts to tap possible avenues to boost sales and growth, and the latest trend is that firms specialising in big data are unlocking opportunities to study customer preferences, loyalties and any segment that will help boost customer numbers.

Big data is a term that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important: it’s what organisations do with the data that matters. Big data can be analysed for insights that lead to better decisions and strategic business moves, according to the definition given by SAS Institute.

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

How fintech gave this SBA lender an edge (American Banker) Rated: A

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

How fintech gave this SBA lender an edge (American Banker) Rated: A

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor