- Today’s main news: CFPB sues 4 online Indian-tribe lenders. Sharestates launches real estate lending white label solution. China Rapid Finance announces IPO pricing. Yirendai files Form 20-F.
- Today’s main analysis: Corporate credit tightens amid sluggish Q1 growth. Avant’s first 2017 ABS.
- Today’s thought-provoking articles: Europe on pace to set new record for fintech deals.
- CFPB sues four online lenders operated by Indian tribe. GP:”In general India-tribe lenders attract more lawsuits. It is unclear if it is because they tend to be sloppier on compliance or lenders who are more aggressive on terms tend to partner with Indian-tribes because no bank will partner with them. In all cases being associated with an Indian-tribe seems to bear stigmata at least recently.”AT: “The CFPB is attempting to do what it was set up to do, but with attacks coming from state regulators, who knows how long it will be able to continue to do so?”
- Corporate credits spread amid Q1 economic growth sluggishness. GP:”An interesting data point in the overall economic cycle.”
- Avant’s first 2017 ABS. GP:”A good test of market perception of the Avant underwriting and product quality. Securitization has seen favorable investor demand. Avant retained 5% of the deal per Dodd-Frank. “
- Sharestates launches white label solution for real estate private lenders. GP:”A sign that the market is maturing. Also a sign that cost of customer acquisition is growing as real estate crowdfunding companies get into technology sales / white labels entrusting 3rd parties to finding customers and letting them focus on the platform.”AT: “This is brilliant, and I’m not just saying that because I write for this company. Real estate is inherently local. By establishing a white label solution for real estate private lenders, Sharestates could position itself as the leader in RECF for many years to come. As far as I know, this is the first white label solution specifically for the real estate lending market. If the solution is any good, they should get a lot of participation.”
- Colorado moves to dismiss suits. GP:”A very standard move in any lawsuit. It is unlikely to suceed.”AT: “These are interesting arguments, but I don’t see it happening. There is too much at stake to allow states to railroad online lenders and relegate them to second-class status. There needs to be a real discussion about which level of government has the power to regulate and legislate online lending.”
- Fundrise files new Reg A+ for Income eREIT. GP:”We haven’t seen many Reg A+ fund raises in our space. I do think it is a very interesting tool for early stage companies. “AT: “This should have been expected. Selling out of shares as quickly as they did on the first round, I wonder why they didn’t file a second Reg A+ sooner.”
- Thrive to power small biz lending for Horizon Community Bank. AT: “Perhaps we’ll see a wave of community banks getting in on the online lending act.”
- Online lending has reached a tipping point. GP:”I think they actually mean it has reached maturity.” AT: “GDR’s Charlie Moore lays good groundwork for his argument. He makes some great points.”
- Lendio announces annual list of top 10 best states for small business lending. GP:”There is very little transparency and public data in the SME lending space (unlike in personal lending thanks to Lending Club for example). This data is a step in the good direction. We hope more will be made available.”AT: “This is based on their own data, so it’s not objective. Interesting nonetheless.”
- The future of finance. AT: “What’s interesting about this is the unchanging talking points from SoFi’s Mike Cagney about how banks should adopt technology, and how it would affect their businesses if they did. Short story: They could lay off more employees and cut business expenses.”
- How Goldman Sachs is trying to erase debt stigma. GP:””
- Leverage digital tech to forge relationships with your clients’ children. AT: “For financial advisors.”
- Justices affirm cities’ right to sue banks under housing law.
- SoFi personal loans review. GP:”A good summary of SoFi’s approach, which has pushed them where they are today. Most notably: no origination fee. SoFi is probably the only major online lender that has no origination fee. Avant started without an origination fee and lately had to introduce one for profitability. “
- Celent’s corporate banking appoints Alenka Grealish as senior analyst.
- TransferWise to set up office in Singapore. GP:”Singapore is a good compromise between pro-business environment, trained workforce with good skills and price. Hong Kong is extremely expensive. Mainland China is not a good base to do business outside China. However, in the past, I found that for South East Asia a good cost/quality/location compromie was Jakarta.”AT: “I can’t think of a better place to set up office if you want to tackle the Asian markets.”
- Europe on pace for record year in fintech deals. GP:”The Brexit doesn’t seem to be slowing London down but it does seem to be accelerating continental-fintech.”
- China Rapid Finance announces IPO pricing. GP:”A very interesting IPO, and a second IPO very soon after the Elevate Credit one. China Rapid Finance has to be compared to Yirendai. We look forward to observing the IPO’s price and trend.”
- Yirendai Form 20-F. GP:”An interesting financial summary that can be used for younger companies for their financial models.”
- IFC, Ant Financial to enable digital financial inclusion in emerging markets.
- Monthly P2P lemnding industry report. GP:”Volume down due to 2 vacations in April. 224.09 bil RMB in volume in Aprisl 2017. Loan balance concentrates on Beijing, Shanghai, and Guandong province in this order. The Beijing concentration is surprising.”
- WeiyangX fintech review.
- United States
- CFPB Sues Four Online Lenders Operated by a California Indian Tribe (Crowdfund Insider), Rated: AAA
- First-Quarter Economic Growth Sluggish, but Corporate Credit Spreads Tighten Anyway (Morningstar), Rated: AAA
- Avant’s First 2017 ABS (PeerIQ), Rated: AAA
- Sharestates Launches White Label Lending Solution for Real Estate Private Lenders: Shareline Solution (Crowdfund Insider), Rated: AAA
- Colorado Moves to Dismiss Suits (Orrick), Rated: A
- Fundrise Files New Reg A+ for Income eREIT (Crowdfund Insider), Rated: A
- Thrive Platform to Power Small Business Lending for Horizon Community Bank (Thrive Email), Rated: A
- Online lending has reached a tipping point (Business Insider), Rated: A
- Lendio Announces Annual List of Top 10 Best States for Small Business Lending (PRWeb), Rated: A
- The Future of Finance: More Data, Fewer People (Institutional Investor), Rated: A
- How a Goldman Sachs brand is trying to erase debt stigma (Tearsheet), Rated: A
- Leverage Digital Technology To Forge Relationships With Your Clients’ Children (FA Magazine), Rated: A
- Justices affirm cities’ right to sue banks under housing law (Arkansas Online), Rated: B
- SoFi personal loans: 2017 comprehensive review (Bankrate), Rated: B
- Celent’s Corporate Banking Appoints Alenka Grealish as Senior Analyst (citybizlist), Rated: B
- United Kingdom
- TransferWise Goes Big. Sets up Office in Singapore for Asian Expansion & Global Domination (Crowdfund Insider), Rated: AAA
- European Union
- Europe On Pace for Record Year in Fintech Deals (Crowdfund Insider), Rated: AAA
- PledgeMe Launches Lending Month of May: Seeks to Help Kiwis Learn More About Crowdlending (Crowdfund Insider), Rated: A
- Australian youth drive P2P revolution (AltFi), Rated: A
- China Rapid Finance Announces Pricing of Initial Public Offering (PR Newswire), Rated: AAA
- Yirendai FORM 20-F (SEC), Rated: AAA
- IFC and Ant Financial to enable digital financial inclusion in emerging markets (The Asset), Rated: A
- P2P Industry News (Xing Ping She Email), Rated: A
- WeiyangX Fintech Review (Crowdfund Insider), Rated: A
- FinMomenta launches peer-to-peer online lending platform Tachyloans (The Hindu BusinessLine), Rated: AAA
- Tachyloans Targets India’s Fintech Segment Which is About to Touch $ 2.4B By 2020 (BW Disrupt), Rated: A
CFPB Sues Four Online Lenders Operated by a California Indian Tribe (Crowdfund Insider), Rated: AAA
The Consumer Financial Protection Bureau (CFPB) has sued four online lenders for collecting debt from consumers they allegedly did not owe. The four lenders include: Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc.
The CFPB alleges that the lenders made deceptive demands and illegally took money from consumer bank accounts for debts that consumers did not legally owe. The CFPB filed to stop the practices, recoup relief for impacted consumers, and asses a penalty on the aforementioned lenders. Each of the four lenders operate out of a single address in Upper Lake, California and is owned and incorporated by the Habematolel Pomo of Upper Lake Indian Tribe (Habematolel Pomo Tribe or the Tribe), a federally recognized Indian tribe.
The CFPB states that since at least 2012, Golden Valley Lending and Silver Cloud Financial have offered online loans of between $300 and $1,200 with annual interest rates ranging from 440 percent up to 950 percent.
Read the actual complaint here.
First-Quarter Economic Growth Sluggish, but Corporate Credit Spreads Tighten Anyway (Morningstar), Rated: AAA
Economic growth for the first quarter of 2017 slowed to a 0.7% annualized rate compared with a 2.1% rate in the fourth quarter of 2016. This represents the slowest rate of economic expansion over the past three years.
On a positive note, business investment picked up rapidly.
The average corporate credit spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade bond market) tightened 2 basis points over the course of last week to +121. In the high-yield market, the Bank of America Merrill Lynch High Yield Master Index tightened 22 basis points to end the week at +375. In the equity markets last week, the Nasdaq index broke through 6000 to new highs and the S&P 500 rose 1.5%.
As an indication of how tight corporate credit spreads have become compared with their historical averages, since the beginning of 2000, the average spread of the Morningstar Corporate Bond Index has registered below the current level only 26% of the time. The preponderance of the time that the index was at a level tighter than the current credit spread occurred during the buildup to the 2008-09 credit crisis. In 2004-07, corporate credit spreads were pushed to historically tight levels as new structured investment vehicles were engineered to arbitrage the differentials in expected default risk. But once the credit crisis emerged, investors found that many of these vehicles did not perform as advertised.
Avant’s First 2017 ABS (PeerIQ), Rated: AAA
We see a bifurcation in credit performance trends between mass affluent credit card issuers, and issuers focused on mass market credit segments. Synchrony, the largest store credit card issuer, shares dropped 16% on Friday due to a 45% increase in its loan loss provision. Capital One and Discover also increased their provision by 33% and 14% respectively. By contrast, the credit card master trusts of large card issuers (AXP, BAC, JPM) exhibit delinquencies that are near all-time lows (as analyzed in prior PeerIQ newsletter) due to their focus on higher credit quality relationship customers.
On Friday, bond investors welcomed the first Avant ABS deal of the year. AVNT 2017-A was upsized to $247.8 Mn collateral and received significant interest from broader credit investors.
Avant Loans Funding Trust 2017-A (AVNT 2017-A)
Avant priced its first unsecured subprime consumer deal of 2017 on April 26th (AVNT 2017-A), its fourth rated securitization. The transaction was upsized from $192.6 Mn to $218.9 Mn due to favorable investor demand. The deal was led by JP Morgan who also structured the transaction, as well as Credit Suisse and Morgan Stanley. Avant retained 5% of the deal, consistent with risk retention requirements of Dodd-Frank Act.
Strong Alignment of Interests
Avant’s business operating model allows for several important components that strengthen alignment of interests between Avant and institutional investors. According to Kroll Rating’s pre-sale report, as of March 31st Avant retained approximately $2.5 Bn (65%) of the $3.8 Bn in loans originated through the Avant Platform. For this transaction, Avant contributed 95% of the loans in the collateral pool.
Further, on the deal Closing Date, Avant or its majority-owned affiliate acquires and retains at least 5% of the fair value of total capital structure by Regulation Risk Retention.
Kroll increased the weighted average cumulative net loss (CNL) rate when rating AVNT 2017-A. For loans with 36 months or less terms, the CNL was increased from 13.86% in AVNT 2016-C to 18.39% in AVNT 2017-A (“Run-off Portion”). Further, Kroll assumed 16.55% for the representative portion in its pre-sale report, suggesting an upward shift in loss assumptions for AVNT loan product.
We observe a parallel shift in the credit curve: the A tranche was 100 basis points tighter and the B tranche was 185 basis points tighter than the corresponding tranches in AVNT 2016-C. The C tranche was priced at 450 basis points. The C tranche (BB-rated) was fourteen times over-subscribed, reflecting credit investors’ “risk-on” mentality.
The exhibit conveys that trigger profiles can be very different even for similar collateral from the same shelf. AVNT 2017-A shows a much higher starting CNL profile (MOB=1) than AVNT 2016-B, starting at 1% and peaking at 25%. Although the changes in the underwriting standard is obvious, the loss trigger profile is slightly steeper, reflecting more up-front loss timing for AVNT 2017-A as compared to older deals, such as AVNT 2016-B.
Sharestates Launches White Label Lending Solution for Real Estate Private Lenders: Shareline Solution (Crowdfund Insider), Rated: AAA
Sharestates, an online real estate investment marketplace, has announced the launch of a new financing capability; Shareline Solution. The new service is a hybrid between lending and brokering a loan. Private lenders will have access to Sharestates lending capabilities to directly serve their clients all under their own brand. The new lending service is described as a white label, correspondent lending program that empowers private lenders to quickly launch a robust real estate crowdfunding and lending marketplace.
With this solution, Sharestates explains it will tap into more geographical regions by working directly with local, private lenders through strategic partnerships.
Colorado Moves to Dismiss Suits (Orrick), Rated: A
As we noted in a recent Alert, WebBank and Cross River Bank filed separate federal civil actions to enjoin the Administrator of Colorado’s Uniform Consumer Credit Code from enforcing state lending laws against Avant, Inc. and Marlette Funding LLC, online lending platforms that facilitate and service loans originated by the two Banks. The Banks assert that Colorado’s lending laws are preempted by federal banking statutes. On April 25, the Administrator moved to dismiss the Banks’ actions on several grounds.
First, the Administrator contends that the lawsuits do not present a federal question and thus fail to establish subject-matter jurisdiction.
Second, the Administrator argues that the Banks lack standing because their alleged injuries—including loss of revenue from the assignment or sale of their loans—are either inadequately pled or insufficiently related to the enforcement proceedings against Avant and Marlette.
Third, the Administrator argued that if the State’s enforcement actions against Avant and Marlette (which were removed to federal court) are remanded to state court, then the federal court should either dismiss or stay the action brought by WebBank and Cross River Bank’s cases based on the Younger abstention doctrine (which establishes rules against federal courts from interfering with ongoing state court or administrative proceedings).
Fourth, and perhaps most significantly, the Administrator asserts that the Banks’ preemption arguments fail as a matter of law because federal banking statutes—particularly the National Bank Act (“NBA”), 12 U.S.C. § 85, and the Depository Institutions Deregulation and Monetary Control Act (“DIDMCA”), 12 U.S.C. § 1831d—do not preempt the application of state lending laws to nonbank entities.
Fundrise Files New Reg A+ for Income eREIT (Crowdfund Insider), Rated: A
Fundrise, an online marketplace for investing in real estate, has filed a Reg A+ offer with the SEC to sell additional shares in their Income eREIT. This will be the second round for the Fundrise Income eREIT. The first round sold out raising the maximum amount allowable of $50 million. Fundrise is offering up to $41,189,280 in common shares which represents the value of shares available to be offered as of the date of the offering circular out of the rolling 12-month maximum offering amount of $50 million in the eREIT shares.
Thrive Platform to Power Small Business Lending for Horizon Community Bank (Thrive Email), Rated: A
Thrive Inc. (Thrive) is pleased to announce a multi-year technology licensing agreement with Horizon Community Bank (HCB), a leading Arizona-based FDIC insured bank and subsidiary of Horizon Bancorp, Inc.
Thrive’s proprietary cloud-based lending technology will power the complete, end-to-end small business lending process for HCB encompassing:
- Digital applications, automated credit / financial analysis and background/verification checks, loan offers and declines, e-closings, integrated servicing, borrower interface and real-time risk management capabilities
- Operationally, HCB will benefit significantly from improved loan processing efficiencies and reduced origination costs:
- Loan processing time is expected to be reduced from weeks to days
- Cost reductions of greater than 40% are expected for each loan application cycle
- HCB will benefit extensively from new digital customer acquisition channels, while user experiences for existing and new customers will be modernized and improved
Online lending has reached a tipping point (Business Insider), Rated: A
Online lenders have been facing an uphill battle recently as investors question whether they are truly getting the loan transparency they need to confidently invest in this young industry. Investors, credit providers and ratings agencies are worried about loan data integrity as well as collateral and ownership rights behind the loans.
Phase One: Concept – The Early Days (2006-2010)
The concept of partner banks – like WebBank and Cross River – issuing loans on behalf of these platforms, quickly became an established model. These banks helped ensure the borrower regulations were met, including state licenses among others. Consumers are well protected and borrower fraud is tightly managed.
But in 2008, regulators took notice of this rapidly expanding market, and the SEC issued a statement requiring lending platforms to register and report loan financials to the Commission to protect investors. With this change, the SEC highlighted the need to treat fractional loans as securities that need to be reported.
Phase Two: Institutional Entry – Enter the Big Dogs (2011-2015)
In 2011, the landscape changed for online lenders with institutional investors, in search of yield in a near-zero interest rate environment, tossing their hats in the ring to enter this emerging industry. A $5 million investment from an anonymous institutional investor into LendingClub marked the first infusion of institutional investor capital into the online lending space.
And that was only the beginning as institutional investment continued to flow into the market, primarily from specialist hedge funds, often with lines of credit from well-known large investment banks. At this point, the industry evolved its name from Peer to Peer to Marketplace Lending and ultimately Online Lending to reflect the fact that large institutions were now funding a large portion of the loans.
Also in 2013, securitization changed the face of online lending, providing lending platforms more scalable access to capital to fund the needs of new lenders. Eaglewood Capital closed on a $53 million unrated securitization deal for loans originated by LendingClub, making it the very first securitization deal in the space.
Analytics and secondary markets began to emerge in 2015, with companies like PeerIQ, dv01 and Monja providing analytics and reporting tools to help investors better track their online lending investments. Secondary markets for these loans kicked off this same year, with the launch of both Orchard and Ldger, aiming to provide additional liquidity options for investors in the space.
Later in 2015, the first partnership between a bank and lender was forged with JP Morgan and On Deck leading the charge.
Phase Three: Maturity & Scale – The Future is Clear (and transparent!) (2016 – …)
And now we arrive at the present – a tipping point where the fate of the industry lies squarely in its ability to adopt effective risk control infrastructure for investors to bring certainty to this asset class and therefore attract new capital.
A modern fintech lending model has been using a thirty-year-old due diligence methodology, comparing loan tapes with loan agreements, both provided by the seller. It goes without saying that this method is far from modern or efficient, with no independent validation of data integrity against trusted data sources.
Today, transparency is being redefined. Online lending has undoubtedly provided greater loan data and performance reporting than investors are used to. However, loan transparency from the seller without independent data certainty has been proven dangerous.
A vital part of this infrastructure is for the industry to adopt a central loan information clearing house that focuses on ownership rights and asset certainty for each loan as well as serving as a collateral pledge registry to prevent the double pledging of assets. Increased asset certainty is helping to protect and attract capital from new larger, more risk averse investor segments. With the infrastructure changes we’re seeing emerge in the industry today, including the potential of Blockchain technology, this goal of new capital sources is closer to reality for online lenders than ever.
In honor of National Small Business Week, Lendio, the nation’s leading marketplace for small business loans, today announced its second annual list of top 10 states for small business lending, based on lending data from the Lendio platform, which matches businesses with more than 75 lenders.
This year’s top states for small business lending are:
- New York
- New Hampshire
The ranking is based on a calculation of several key indicators, including approval rates and loan sizes, from among thousands of Lendio’s customers from April 2016 to March 2017.
1 – Utah
2016 Ranking: 3
No. SMBs: 268,872*
No. SMB Employees: 540,268*
Average Loan Size: $37,648
2 – Washington
2016 Ranking: 4
No. SMBs: 574,455*
No. SMB Employees: 1,300,000*
Average Loan Size: $24,746
3 – California
2016 Ranking: 2
No. SMBs: 3,800,000*
No. SMB Employees: 6,800,000*
Average Loan Size: $23,391
4 – Virginia
2016 Ranking: 13
No. SMBs: 706,626*
No. SMB Employees: 1,500,000*
Average Loan Size: $20,520
5 – Texas
2016 Ranking: 6
No. SMBs: 2,600,000*
No. SMB Employees: 4,600,000*
Average Loan Size: $21,003
6 – Florida
2016 Ranking: 7
No. SMBs: 2,400,000*
No. SMB Employees: 3,200,000*
Average Loan Size: $21,103
7 – New York
2016 Ranking: 18
No. SMBs: 2,100,000*
No. SMB Employees: 4,000,000*
Average Loan Size: $23,014
8 – New Hampshire
2016 Ranking: 5
No. SMBs: 132,432*
No. SMB Employees: 289,914*
Average Loan Size: $19,893
9 – Pennsylvania
2016 Ranking: 22
No. SMBs: 1,000,000*
No. SMB Employees: 2,500,000*
Average Loan Size: $17,561
10 – Georgia
2016 Ranking: 8
No. SMBs: 1,000,000*
No. SMB Employees: 1,600,000*
Average Loan Size: $16,348
The Future of Finance: More Data, Fewer People (Institutional Investor), Rated: A
Credit Suisse is now piloting a robot named Reggie, a virtual assistant not unlike Amazon’s Alexa. Credit Suisse’s Reggie was programmed to answer regulatory questions, according to Brian Chin, CEO of global markets for the investment bank. Chin, who spoke on a panel at the Milken Institute Global Conference in Los Angeles on Tuesday, expects that the Swiss bank will be able to ultimately cut the number of calls to its call center by 50 percent. But at this point, Reggie is better at providing information for simple questions than appropriately addressing more complex inquiries.
The technology exists now to streamline labor-intensive processes such as loan underwriting. Mike Cagney, CEO and co-founder of SoFi, an online consumer lender, uses five pieces of data to provide instantaneous loan decisions. SoFi is now moving to use non-traditional information for underwriting, including data from cell phones, which it thinks will predict consumers’ future behavior. Cagney said banks could shed thousands of people if they used similar technology.
How a Goldman Sachs brand is trying to erase debt stigma (Tearsheet), Rated: A
“There’s a stigma around debt, people don’t like to talk about it,” Nicole Sbarra, a product manager for Marcus, said at an event in New York Thursday night. “It makes them very uncomfortable. And most people also don’t think of credit card debt as actual debt, they see it as a balance… [Marcus] is going to help you understand that there’s more to you than this extreme amount of debt on your shoulders.”
Keeping the brand separate, as much as possible, from Goldman is necessary, in some ways, considering the bank’s history. From 2005 to 2007, Goldman issued and underwrote mortgages and securities backed by residential loans that were borrowed by consumers with poor credit. This led to the housing bubble burst and economic recession. Last year Goldman paid out $5.1 billion for its role in the financial crisis.
Money is one of the most personal and sensitive topics for people, even people with lots of it, which is why empathy plays such an important role in building a financial product. The average American carries some $16,000 in credit card debt and about 70 percent of them don’t know there are alternative options to that credit card debt, said Michael Cerda, head of product.
Leverage Digital Technology To Forge Relationships With Your Clients’ Children (FA Magazine), Rated: A
According to various statistics, millennials and members of Generation X will inherit anywhere from $15 trillion to $40 trillion or more from their baby boomer parents by 2050. This will be the largest cross-generational transfer of wealth in history, but many financial advisors haven’t yet prepared for this opportunity.
As the relationship progresses, advisors can proactively invite a client’s children to meetings, and reach out to them to offer financial planning education at applicable stages of their lives. This education can have a big impact if it is taught using the state-of-the-art reporting, proposal and prospecting tools that come with today’s digital advice platforms. For example, when a client mentions that their teenage son or daughter just secured their first after-school job, the advisor can offer to meet with them to deliver an interactive digital presentation on how to save and invest their earnings.
Justices affirm cities’ right to sue banks under housing law (Arkansas Online), Rated: B
The Supreme Court ruled Monday that cities may sue banks under the federal law that bans discrimination in housing, but it said such lawsuits must tie claims about predatory lending practices directly to declines in property tax revenue.
The justices’ 5-3 ruling partly validated an approach by Miami and other cities to try to hold banks accountable under the federal Fair Housing Act for the wave of foreclosures during the housing crisis a decade ago.
SoFi personal loans: 2017 comprehensive review (Bankrate), Rated: B
Who is a SoFi personal loan good for?
- Anyone with good to excellent credit. SoFi borrowers have an average credit score of 730, although credit scores range from 680 to 850, according to the company. Check your credit score for free before you apply.
- High-income earners. SoFi borrowers have an average annual income of $114,000. Real median household income in the U.S. is about $56,500.
- Someone who has a short credit history. SoFi has no minimum requirement for how long you’ve used credit, but rather looks at how responsible you’ve been at paying bills.
- Someone who doesn’t need a co-borrower. SoFi, like many other online lenders, does not allow joint borrowers on a single loan. If your credit or income aren’t good enough to qualify on your own, you may want to consider using a different lender.
- Someone who doesn’t mind an entirely online experience. The entire process takes place virtually — from applying for a loan to receiving approval to having the money deposited in your bank account if you are funded.
SoFi offers both fixed- and variable-rate personal loans that range from $5,000 to $100,000 and are repayable over three, five or seven years. Minimum loan amounts are higher in four states: Arizona, Kentucky, Massachusetts and New Hampshire.
Fees and penalties
- SoFi doesn’t charge an origination fee.
- Late payment fee is either 4% of the unpaid installment amount or $15, whichever is less.
- You won’t be penalized for paying off your loan early.
Celent’s Corporate Banking Appoints Alenka Grealish as Senior Analyst (citybizlist), Rated: B
Celent is pleased to announce that Alenka Grealish will be joining the Banking practice as a Senior Analyst based in San Francisco. Her research will focus on innovation in treasury management services, trade finance, working capital finance, and the implications for customer journeys across segments, including small business. As part of her research, she will track the digitization of the financial supply chain, and the rise of fintechs and new business and revenue models.
TransferWise Goes Big. Sets up Office in Singapore for Asian Expansion & Global Domination (Crowdfund Insider), Rated: AAA
I am not alone in using the service as Transferwise has grown rapidly around the world. In the UK, 10% of the people who transfer money utilize the service. A recent funding round gave Transferwise a billion dollar valuation so it has achieved Fintech Unicorn status.
Today, Transferwise is moving around $ 1.2 billion monthly. They estimate they save consumers and businesses, around $2 million daily. Who loses out? The banks, of course.
Global remittance stands at around half a trillion dollars each year. According to the World Bank, remittances in East Asia and Pacific registered about $126 billion last year. If you add South Asia (India, Pakistan, Nepal and Bangladesh) you can add another $110 billion to that number. Transferwise setting up shop in Singapore just makes sense.
Europe On Pace for Record Year in Fintech Deals (Crowdfund Insider), Rated: AAA
CB Insights reported that European fintech firms raised over $667 million over the first three months of the year through a total of 73 deals. It’s important to note that CB Insights’ report is based only on VC-backed deals as opposed to KPMG’s Q1 report which was based on all types of deals, which is why the report released by KPMG last week showed over $880 million raised from 89 deals in Europe.
In just three months, European firms this year have already raised 60% of the total amount that was raised all of last year.
What’s also promising is the fact that early-stage investing has increased as well. Over $195 million of the amount raised in Q1 of this year was in seed and series A funding rounds. Q4 of 2016 only saw $54 million raised in those rounds.
PledgeMe Launches Lending Month of May: Seeks to Help Kiwis Learn More About Crowdlending (Crowdfund Insider), Rated: A
On Monday, New Zealand’s crowdfunding platform PledgeMe announced it was dedicating the month of May to lending related goodness.
As part of the program, the PledgeMe crew will be doing the following:
- Explaining what it means in a super straight forward way; borrowing money doesn’t need to be as complicated as it’s been made out to be.
- Create case studies on how it has worked in the past.
- Hosting a webinar to answer questions real time, and then blog about it.
- Writing a weekly blog series showcasing how crowdlending can work for various company organizations
- Creating a podcast series
- Putting together a mini-documentary on the company behind “the bubble”
Australian youth drive P2P revolution (AltFi), Rated: A
But its millennials that are driving the P2P revolution. They’re turning away from banks and property in droves and creating space for fintech disrupters, according to new research by RateSetter Australia.
The company has seen the number of millennial investors using its platform increased a startling 250 percent the past 12 months.
The average investment from millennials was only A$10,000, much smaller than the A$50,000-plus averaged by baby boomers and the ‘silent generation’.
China Rapid Finance Announces Pricing of Initial Public Offering (PR Newswire), Rated: AAA
China Rapid Finance Limited (“China Rapid Finance”) (NYSE: XRF) announced today that its initial public offering of 10,000,000 American depositary shares (“ADSs”) was priced at US$6.00 per ADS, with a total offering size of US$60 million. Each ADS represents one Class A ordinary share of China Rapid Finance. China Rapid Finance has granted the underwriters a 30-day option to purchase up to an additional 1,500,000 ADSs at the initial public offering price, less the underwriting discounts and commission. The ADSs have been approved for listing on the New York Stock Exchange and are expected to begin trading on April 28, 2017 under the symbol “XRF.”
Yirendai FORM 20-F (SEC), Rated: AAA
119,512,300 ordinary shares, par value US$0.0001 per share, as of December 31, 2016.
IFC and Ant Financial to enable digital financial inclusion in emerging markets (The Asset), Rated: A
IFC, a member of the World Bank Group, and Ant Financial Services Group, the parent company of Alipay, have signed a memorandum of understanding to make basic financial services more accessible in China and other emerging markets.
Under the new memorandum the two parties will strengthen their collaboration for inclusive digital finance, green digital finance, business-environment enhancement and credit-data analysis.
Ant has invested in payment and digital finance companies in India, Thailand and Indonesia.
P2P Industry News (Xing Ping She Email), Rated: A
Monthly Report of China’s P2P Lending Industry
On 1st May, Online Lending House released the monthly report of P2P lending industry. According to the report, the total business volume decreased in April due to the two minor long leaves(Qingming Festival holiday and May Day holiday). However, the trend of the industry is optimistic especially in the number of borrowers, cumulative trading volume and the development of lending platforms.
In April 2017, the loan volume is 224.92 billion RMB, and the cumulative volume reached to 4,330.12 billion RMB, however, the same figure of the corresponding period last year was 1,888.12 billion RMB. Over the past year, the volume in P2P lending industry has nearly increased by 2.5 trillion RMB. The loan balance mainly concentrates on Beijing(338.70B RMB), Shanghai(242.35B RMB) and Guangdong province(177.98B RMB) , jointly accounting for 79.26% of the country’s total balance.
Ant Financial：Alipay Model will be Replicated in B&R(Belt and Road) Countries
The globalization process of Ant Financial started since February 2015 and the business has spreaded to India, Thailand, Indonesia and the Philippines etc. “We look for local partners instead of running a branch abroad, and aim at developing countries with great demand for e-payment rather than developed countries. The immediate benefits from this mode will save 5-8 years’ research and development time.” Jia Hang, the general manager of international division, explained the company’s overall global strategy for the first time. Ant Financial also announced they would keep replicating the Alipay business to other B&R Countries.
WeiyangX Fintech Review (Crowdfund Insider), Rated: A
This week, China Banking Regulatory Commission released a documentation “Guidelines on risk prevention and control in banking industry” to regulate the small cash loans market by perfecting the in-out mechanisms, paying more attention to the supervision and decreasing operation risk.
Here are some recommendations for this round of regulatory reform:
- At present, diverse interest rates should be permitted to coexist, but the existence of exorbitant usury must be prohibited. It is reported that the average interest rate of cash loans has reached 158%, which produces disastrous influence on the development of microfinance industry in China.
- To reduce risk, government should make the relevant laws to conduct stricter regulation on different kinds of cash loans companies.
- Training should be provided to microfinance organizations in order to improve operations and strengthen management capabilities.
The Beijing Municipal Administration Traffic Card, more commonly known as the Yikatong, is preparing to tap into demand for mobile payment devices, with the launch of a wristband capable of making contactless payments.
With the wearable tech industry on the rise, Yikatong believes engineering a variety of payment methods is essential to ensuring customer satisfaction. According to analysts at IDC, the wearable devices market is booming, with around 50 million units projected to be sold in 2017, which is expected to achieve a target of 78% average growth a year until 2018.
One of China’s largest online lending platform, CreditEase, has launched a private blockchain service based on ethereum.
This week, Chinese bike-sharing startup ofo announced a strategic investment from Ant Financial, but the total funding volume was not disclosed. In the future, ofo will work with Ant Financial on payments, credit and other international business expansion.
FinMomenta launches peer-to-peer online lending platform Tachyloans (The Hindu BusinessLine), Rated: AAA
Even as a final set of regulations is yet to be firmed up in the country’s burgeoning digital peer to peer (P2P) lending space, a Singapore-based fintech start-up FinMomenta has launched its operations to tap individuals and businesses that are considered ‘risky’ by the bigger NBFCs and banks.
The company uses a proprietary credit scoring model enabled by Artificial Intelligence and Big Data to assess the creditworthiness of applicants. It also uses e-KYC and Aadhaar for verification of the borrowers that helps lenders to automatically invest in the recommended list of borrowers, according to Khaderbad.
Tachyloans also analyses the social media profiles of its borrowers and uses psychometric analysis to understand their creditworthiness.
The platform is currently open for all resident individuals looking for loans in 50 cities across India.
Tachyloans Targets India’s Fintech Segment Which is About to Touch $ 2.4B By 2020 (BW Disrupt), Rated: A
Tachyloans has made its entry at a strategically important time in India’s burgeoning fintech sector that is forecasted to touch $2.4bn by 2020. Tachyloans uses a proprietary credit scoring model enabled by Artificial Intelligence and Big Data to assess the creditworthiness of applicants. The stronger the credit profile, lesser the credit or default risk. The company’s innovative platform electronically verifies the borrower information using the KYC (Know Your Customer) documentation provided, and qualifies them through their proprietary credit decision model.
At Tachyloans, the entire registration, application and documentation procedure is simplified for both borrowers and lenders, thereby offering complete transparency throughout the process. Unlike the traditional banks, in Tachyloans lenders can earn returns as high as 25% per annum and borrowers can avail loan at lower interest rates starting from 11.5% per annum. The background verification check of the borrowers is also done by various parameters at the backend before getting them on board.
Furthermore, FinMomenta will be looking at collaborating with banks and other financial institutions to ensure a straightforward process and faster disbursement of loans.