Thursday October 10 2019, Weekly News Digest

Lend Academy

News Comments Today’s main news: Affirm debuts shopping app. Zopa profits tick upward. RateSetter recovering from loan scandal. PPDAI stock rises 7% with lift in institutional-funded loans. Oportun ends Nasdaq debut with 8% gain. Australia: RBA cuts interest rates, online lenders follow. Today’s main analysis: The Future of Finance: Marcus, Neobank, and fintech. (A MUST-READ) […]

The post Thursday October 10 2019, Weekly News Digest appeared first on Lending Times.

Lend Academy

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

OnDeck Survey: Economy is Top Concern for Small Businesses Ahead of 2020 Election (New Kerala), Rated: AAA

OnDeck today announced the results of a national survey of U.S. small business owners that finds economic issues are the most important factors in determining their choice for president in 2020.

  • Economic concerns arise in several dimensions, including tax policy, job growth, support for small businesses, government spending and the overall economic climate. These issues were cited as the top concerns of more than 33% of those surveyed;
  • Immigration was an issue of interest for 11.3% of small business owners surveyed, ranking second behind the economy as a concern.
  • 57% of small businesses surveyed said they were either Very Optimistic or Somewhat Optimistic about the economic outlook for their businesses;
  • 93% of those surveyed said they plan to vote in the 2020 election.
  • 60% of small business owners surveyed said they already know who they plan to vote for in the 2020 presidential election.

Affirm debuted a new app encouraging customers to start their shopping journeys with it (Business Insider), Rated: AAA

The point-of-sale (POS) financing provider 

Source: Business Insider

Affirm ships new shopping and bill splitting app (Finextra), Rated: A

Affirm’s app also allows consumers to pay at any brick-and-mortar store that accepts Apple Pay or Google Pay, which is increasingly important as 24% of consumers want the flexibility to look online and shop in-store.

Those with Apple Pay or Google Pay enabled have also seen up to 14% of transactions driven in-store, making the Affirm app a rare omnichannel solution for customer acquisition.

Max Levchin On The Future-Present Of Everywhere POS Lending (PYMNTS), Rated: A

Since Affirm’s launch, the landscape in the POS space is radically different than it was when Affirm entered. It is, first and foremost, a much bigger and more populated space than it once was. Other startups have come to the field — AfterpayUplift and Sezzle for example — but also bigger and more established names in financial services. In the last 12 months alone SquareMastercardPayPal and Chase have all rolled out POS installment lending products or enhancements as the market continues to pick up popularity among consumers, particularly younger ones.

Latest Macro; latest from Marcus; Oportun goes IPO (PeerIQ), Rated: AAA

Q4 is off to a brisk start. The jobs report released this past Friday shows 114K in net new jobs (vs expectations of 120K), generally flat wages, and a drop in the unemployment rate to 3.5%.

On the one hand, the US economy is near ‘stall speed’ – around 1 to 1.5% growth rate.

Source: PeerIQ, The Daily Shot, Conference Board

House prices are expected to rise 5.8% over the next year due to low mortgage rates.

Two major financing announcements this week. FinTech lender, Oportun, led by CEO Raul Vazquez, ends its Nasdaq debut with an 8% gain. The debut is notable as it represents a positive shift in the sentiment to the reception of lenders to the IPO market.

My Quarterly Marketplace Lending Results – Q2 2019 (Lend Academy), Rated: AAA

The upward trend in my returns continued in Q2, making it the fifth quarter in a row with increasing returns. My preliminary return for the 12 months ending June 30, 2019 is 6.20% (one investment is still not final), the best I have achieved since Q3 2017.

Source: Lend Academy

The Maybe-Dubious Rise of the Loans-for-Sneaker Business (GQ), Rated: AAA

Afterpay is one of a number of platforms that have sprouted up over the past couple years that are willing to float customers a couple hundred or thousand dollars to shop. In addition to it, there are Affirm, Sezzle, Klarna, and Quadpay. They are positioned as a more consumer-friendly option than credit cards, a whole host of services bent on—because this is 2019—disrupting the powers that be.

Globally, Afterpay, which launched in Australia, has over 4.6 million customers and 35,000 retail partners. In the U.S., where Afterpay only launched in May of last year, it has two million customers and is available at 6,500 retailers. Over three million people use Affirm, while another 500,000 have shopped with Sezzle.

Silicon Valley promises aside, Afterpay is, at best, a platform that allows you to take out what amounts to a small loan on an item. After an approval process—Afterpay does not check a credit score; others like Affirm do—the customer pays a fourth of the price upfront and the rest is paid off in three equal installments every two weeks.

Also new is the $1,500 limit, up from $500, that Afterpay raised after Hyde-McCormick proved himself a responsible shopper and the $87.50 payments currently due every two weeks.

What Happened to Borro? (deBanked), Rated: A

In 2013, Borro, an innovative online lending company that was poised to disrupt pawn shop lending forever, invited me to their stylish offices at 767 Third Avenue in Manhattan.

Borro made $50 million worth of such loans in 2013 and doubled that number in 2014.

Auto, home equity are soft spots in consumer lending (American Banker), Rated: A

In its quarterly report that tracks consumer delinquency trends, the American Bankers Association said that 30-day past-due rates ticked up in eight of 11 categories in the second quarter when compared with the first quarter, but stressed that delinquencies remain well below historic norms.

Finally! Maker Offers Multi-Collateral DAI Lending (Cryptovest), Rated: A

Maker DAO, the most active decentralized finance app on the Ethereum network, has announced a date for its long-awaited multi-collateral DAI generation. According to observers, November 18 may be the date MKR starts accepting other assets as collateral.

Multi-collateral DAI creation has the potential to be riskier in comparison to ETH-based models. Currently, Maker is deliberately over-collateralized at above 300%, with the minimum at 150%, due to the high volatility of crypto assets.

A $ 40 Billion Pile of Leveraged Loans Is Battered by Big Losses (Bloomberg), Rated: A

Loans tied to more than 50 companies have lost at least 10 percentage points of face value in just three months, according to data compiled by Bloomberg. Some have dropped a lot more, with lenders lucky to get back just two-thirds of their investment if they tried to sell.

It’s hardly a full-blown apocalypse for the junk-rated leveraged loan market, which totals $1.2 trillion.

Energy is the hardest-hit sector on the list, with more than $12 billion of loans falling more than 10 cents on the dollar. Consumer and health care follow, comprising around $8 billion and $5 billion of loans outstanding, respectively.

Source: Bloomberg

Ruling cuts short debt collectors’ victory lap over CFPB proposal (American Banker), Rated: B

Under the CFPB’s May proposal, debt collectors could have unlimited contact with debtors through email and text messages, though consumers could opt out of such communications. Additionally, collectors could satisfy disclosure requirements with a hyperlink embedded in an email that takes consumers to a description about how they can dispute a debt.

The SEC is hiring a chief data officer (Business Insider), Rated: B

The Securities and Exchange Commission is hiring its first chief data officer, according to a job posting for the role.

Voyager Selects Celsius Network to Manage Certain Assets (AP News), Rated: B

Voyager Digital, LLC, a subsidiary of publicly-traded Voyager Digital (Canada) Ltd (Ticker VYGR.CN), an industry-leading best execution crypto asset broker, today announced a partnership with Celsius Network, in which Celsius will manage a portion of Voyager’s digital assets.

United Kingdom

Zopa’s P2P profits tick up but group losses widen due to heavy investment in bank (P2P Finance News), Rated: AAA

Zopa Group – which incorporates the P2P platform and upcoming digital bank – reported a pre-tax loss of £18.295m for the year ended 31 December 2018, compared to a pre-tax loss of £5.536m the previous year.

Zopa: nine in 10 shoppers confused by car finance options (Verdict), Rated: A

In a survey of 2,000 consumers, 47% of people who had recently bought a car with finance are unable to identify which type of finance deal they signed up for. Zopa estimates that the average car buyer could save up to £11,000 over the course of their lifetime by working out the best finance deal available.

Ratesetter recovering from loan scandal (The Times), Rated: AAA

One of Britain’s largest peer-to-peer lenders appears to be recovering from a toxic loan scandal after its latest results showed it edging towards breaking even.

Accounts for Ratesetter, which links 56,000 ordinary investors with consumer and business borrowers, show that pre-tax losses narrowed by 69 per cent in the year to March.

Wonga customers’ average compensation payout may be just £118 (The Guardian), Rated: A

Customers who were mis-sold loans by the collapsed payday lender Wonga are expected to receive less than 10% of what they are owed in compensation after administrators revealed that only £41m will be put aside for claimants.

Payday loan alternative Savvy secures £20 million funding facility (Finextra), Rated: A

Stockport and Wilmslow based fintech company Savvy.co.uk is to create 25 jobs after securing a £20 million investment.

The funding, from London-based Cairn Capital, will increase lending capacity for the company who provide an ethical alternative to pay-day loans.

MEET THE FRENCHMAN WHO WANTS TO SOLVE THE UK’S HOUSING CRISIS (Business Leader), Rated: A

WHY DID YOU START BLEND NETWORK?

I started working in the financial industry as an FX trader before moving to trading gold and copper, both much more inefficient markets than FX. I realised that the UK property market was a hugely inefficient market in the sense that lenders and borrowers are not meeting. On the one hand, you have very experienced property developers across the country who are trying to access funds to build homes but traditional lenders are no longer active in providing development finance.

Instead, we lend in places such as Coventry, East Anglia, Doncaster, Northern Ireland. Northern Ireland is a very good example of our strategic approach to lending. Last year, we did around 80-85% of our business in Northern Ireland.

Crowdfunding a start up options explained for businesses and investors (What Investment), Rated: A

Crowdfunding a start up brings to mind the statement ‘Nothing worth having comes easy’, never truer than in the case of launching a start-up. Getting a new business off the ground will often require capital. Something which a lot of people don’t know how to go about getting.

These are:

  • Reward based crowdfunding;
  • Equity based crowdfunding;
  • Debt based crowdfunding, and
  • Donation based crowdfunding.

Landlords wary of tax changes (Money International), Rated: A

Half of the 200 landlords approached agreed tax changes and tougher mortgage borrowing criteria have thwarted their plans to buy more properties, while 15% admitted they had been put off buying homes to rent.

A third who still wanted to invest are considering a switch from buy to let to peer-to-peer lending secured against property, while 8% have already done so.

China

PPDAI Stock Soars 7% on Increase in Institutionally-Funded Loans (Capital Watch), Rated: AAA

The stock in PPDAI Group Inc (NYSE: PPDF) closed 7% higher on Wednesday, at $2.83 per American depositary share, after it announced a positive trend in funding of loans by its institutional partners and increased loan origination volume.

For the third quarter, the Shanghai-based company, which operates an online consumer finance marketplace, said in a statement on Wednesday that the volume of loans facilitated by its institutional funding partners jumped to $2.64 billion, up 91% from the second quarter. Total loan origination volume was above PPDAI’s guidance, it said, as it reached $3.51 billion, up 14% from the previous quarter.

European Union

What we learned at this year’s LendIt Fintech Europe (Business Insider), Rated: AAA

At the conference, Business Insider Intelligence identified four emerging themes that we expect to set the tone for the space for the next year: further proliferation of partnerships between banks and fintechs, increased focus on digital banks’ sustainability, accelerated innovation and disruption from small- and medium-sized business (SMB) lenders, and more challenges ahead for the UK’s P2P lenders.

  • CYBG bank and price comparison site GoCompare recently partnered to offer an energy compare and switch service for all of CYBG’s B customers.
  • Barclays bank partnered with SMB finance fintech MarketInvoice last year to give Barclays’ SMB clients access to MarkeInvoice’s solutions. 
  • French Banking-as-a-Service platform Treezor was acquired by Société Générale last year, as the bank looked to enhance its ability to innovate and decrease time to market.
Source: Business Insider

Linked Finance launches ‘Beyond Brexit’ business loans (Bridging and Commercial), Rated: A

The new 18-month loan period will allow borrowers to access working capital facilities of up to €300,000 (approximately £265,194) in just 24 hours.

ID on track to double revenues as it eyes €300m+ of revenue within 2 years (Fintech Finance), Rated: A

ID Finance, the fintech operating in Europe and Latin America, saw revenue growth of over 100% in the first 9 months of 2019 and is on track to double its revenues to €90m revenue this year. The data science, credit scoring and digital finance company is now planning its first equity crowdfunding round via Crowdcube as it targets €300m+ of revenue within 2 years.

Binance Launches New Lending Program Phase (CoinCodex), Rated: A

The Binance cryptocurrency exchange has launched the latest phase of its relatively new lending program. For the program’s eighth installment, Binance is sticking with the model of short-term loans, as users only have to commit their crypto for 14 days.

International

A Guide to What’s Happening in the Fintech Revolution (Bloomberg), Rated: AAA

These underbanked markets, led by countries in Asia and Africa, have inspired fintech innovation that’s leapfrogging the technology available in the developed world. Ant Financial Services Group’s Alipay and Tencent Holdings’ WeChat Pay in China, Paytm in India, and Safaricom’s M-Pesa in Kenya are some well-known examples.

Source: Bloomberg

Take Facebook Inc.’s plan to launch a digital currency called Libra in 2020. The social network’s gigantic reach—more than 2.4 billion active monthly users—could draw a much wider audience to Libra than has used previous cryptocurrencies. For instance, global remittances by migrants reached a record $689 billion last year, according to the World Bank.

Source: Bloomberg

San Francisco-based 500 Startups staked 43 such companies in the 12 months ended June 30.

Goldman’s $ 1.3B Marcus burn, Neobank £200MM loss; plus 14 short takes on top developments (Lex), Rated: AAA

Goldman is losing $1.3 billion on Marcus, trying to build a Fintech leader. Etrade is going to lose $75 million from cutting trading fees to $0 to keep up with Robinhood. Revolut is losing £35 million on £60 million in revenue, with another £140 million burned by Atom, Monzo, Tandem, and the rest.

Source FT Research and Future of Finance

Generally speaking, from a deposit point of view, these are still all small businesses at £1 billion in assets (e.g., Betterment manages $20 billion).

Source: ARK Invest and Future of Finance

The first is that the Robinhoods and Monzos of the world are 10x overpriced relative to the payments apps. I can sort of buy this — though money in motion is way easier to capture than money at rest. The second is that venture investors think a finance user is worth $1,500 in a digital bank.

Source: Future of Finance

Blockchain: the future of finance (Financier Worldwide), Rated: A

Recent examples of blockchain’s impact on financial markets go well beyond these initial applications or P2P lending or crowdfunding.

The first wave of applications in finance and banking is being driven by easily achievable gains in actively traded assets.

MasterCard incorporated a blockchain payment system providing vendors real time, lower cost settlements on cross-border transactions. Representing a consortium of more than 40 of the world’s largest banks, fintech firm R3 launched a payment system built on DLT platform Corda, to expedite intra-bank transfers.

St. Regis Aspen, a Colorado resort, is a partnership formed with a crowdfunding site, Indiegogo, that in lieu of a traditional IPO completed a private placement via DLT financing real estate. This sale of ‘tokens’ – fractional interests in the underlying property – raised $18m, compliant with securities laws.

Australia

Hot home loan rates starting with a 2 (mozo), Rated: AAA

The RBA has cut official interest rates for the third time this year, and already a handful of lenders have responded by slashing rates across their range of variable rate home loans. Right now, if your home loan doesn’t have a ‘2’ in front of it, you’re missing out.

loans.com.au jumps on October RBA home loan rate cut party (mozo), Rated: AAA

The online lender has announced its response to the 0.25% drop in the official cash rate though, with loans.com.au taking 0.15% off a number of variable rate home loan offers for both owner occupiers and investors.

The changes, which come into effect on October 17, will have an impact on a number of  loans.com.au home loan offers including:

• Essentials Variable loan – reduced by 0.15% with rates now as low as 3.04% (3.06% comparison rate*).

• Smart Home Loan – reduced by 0.15% with rates now as low as 2.88% (2.90% comparison rate*).

• ZIP Home Loan – reduced by 0.15% with rates now as low as 3.08% (3.10% comparison rate*).

• Offset Variable loan – reduced by 0.15% with rates now as low as 3.12% (3.14% comparison rate*).

OnDeck appoints Robbie Fidler as new national broker chief (IT Wire), Rated: B

Online SME lender OnDeck Australia has appointed experienced commercial lending operator Robbie Fidler as its national broker channel manager.

Asia

SPV 2030: Sharing of risks and reward (The Malaysian Reserve), Rated: A

The growth and success of peer-to-peer (P2P) lending is a testament of the viability of risk-sharing contracts, where the investors take on some risks (for higher return) from the ventures they are financing. This way, finance will be grounded in the real economy, which is another core principle of Islamic finance.

MENA

Beehive funds first SME in Bahrain (Arabian Business), Rated: AAA

Dubai-based Beehive, the region’s first regulated peer-to-peer lending platform, has funded its first SME in Bahrain.

Canada

BFS Capital Opens New Data Science and Engineering Hub in Toronto (Financial Post), Rated: B

BFS Capital, a leader in small business lending, has officially launched a data science and engineering hub in Toronto as the company accelerates its plans to develop best-in-class digital financial products for small businesses across the globe.

Authors:

George Popescu
Allen Taylor

The post Thursday October 10 2019, Weekly News Digest appeared first on Lending Times.

Thursday August 8 2019, Weekly News Digest

LendingClub

News Comments Today’s main news: Funding Circle debuts U.S. ABS platform for small biz loans. LendingClub to pursue national bank charter, reports Q2 losses. SoFi sues unnamed defendants over Consumer Loan Program 2015 Trust. DigiFi launches first open-source loan origination system. BlockFi raises $18.3M for crypto lending. Funding Circle posts higher revenues, bigger pre-tax losses. […]

The post Thursday August 8 2019, Weekly News Digest appeared first on Lending Times.

LendingClub

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

Funding Circle debuts ABS platform for U.S. small-business loans (Asset Securitization Report), Rated: AAA

Funding Circle is securitizing its first pool of U.S.-based small business loans.

According to Kroll Bond Rating Agency, the online business-loan lender is marketing $198.45 million in notes backed by loans made to small- and medium-sized businesses in the U.S. Funding Circle has previously issued notes for asset-backed pools of small-business loans in its native UK.

The transaction consists of four classes of notes, including a $142.8 million Class A tranche with an initial A- rating from Kroll, and benefiting from 32.5% credit enhancement.

LendingClub Discusses National Bank Charter, GreenSky Exploring Sale (Lend Academy), Rated: AAA

A topic that has been coming up more often is the potential of a national bank charter. Last week we learned that small business lender OnDeck was pursuing a charter and LendingClub is doing the same.

Today LendingClub reported their Q2 2019 earnings. Highlights include record loan originations of $3.1 billion, up 11% from the prior year period and record net revenue of $190.8 million, up 8% year over year.

Source: LendingClub and LendAcademy

GreenSky Q2 2019 Earnings

David Zalik, GreenSky Chairman and CEO included this statement in the press release:

Notwithstanding the Company’s solid operating results, in light of the complexity of the Company’s operating model, we do not believe that the Company’s current market value is reflective of the Company’s strong record of cash flow generation and intrinsic value. Accordingly, GreenSky’s Board of Directors, working together with its senior management team and legal and financial advisors, has commenced a process to explore, review and evaluate a range of potential strategic alternatives focused on maximizing stockholder value. In connection with this review, GreenSky has retained FTP Securities LLC (“FT Partners”) and J.P. Morgan Securities LLC as its financial advisors, and Cravath, Swaine & Moore LLP and Troutman Sanders LLP as its legal advisors.

The news sparked Christopher Donat, an analyst Sandler O’Neill to speculate that Square or Goldman Sachs could be potential buyers according to this article in American Banker.

LendingClub envisions a ‘marketplace bank,’ seeks charter (Bank Innovation), Rated: A

Peer-to-peer lending platform LendingClub is exploring the possibility of obtaining a national bank charter as it adjusts its strategy following a $10.6 million loss in the second quarter.

Digital Banking: LendingClub Gets Some Fintech Love as it Pursues National Bank Charter (Crowdfund Insider), Rated: A

Shares in LendingClub (NYSE:LC) are rising during another down market day as the trade war with China has no end in sight and political tempers flare. Shares are currently trading over 10% higher following yesterday’s Q2 earnings report where LendingClub said it expected to finally report a positive net incoming in Q3 following years of losses.

Second, LendingClub has hardened its lending model with years of fine-tuning. Unlike some other digital-only banks, LendingClub has been providing credit to consumers for more than a decade having originated over $50 billion in loans.

LendingClub Logs Lower-Than-Expected Losses (PYMNTS), Rated: A

By the numbers, net loss came in at $10.66 million or $0.12 per share — a lower loss than last year when Lending Club reported a loss of $60.86 million or $0.72 per share. Adjusted loss per share narrowed to $0.01 from $0.08 a year earlier.

Net revenue increased 8 percent from year-ago revenues of $176.98 million in 2018 to $190.8 million in 2019, driven by the higher volume of loan originations Sanborn mentioned.  Loan originations during the quarter were at $3.1 billion, up 11 percent year over year. While the revenue number is an improvement, it came in very, very slightly below analysts’ estimates.

LendingClub posts smaller-than-expected loss on loan originations (Nasdaq), Rated: A

LendingClub said it now expects smaller loss for the year than it had previously forecast. Adjusted net loss is expected to be between $5 million and $20 million, from $9 million to $29 million.

P2P lender LendingClub increases credit access with Select Plus Platform (Verdict), Rated: B

LendingClub, a US-based P2P lending platform, has introduced the Select Plus Platform to offer borrowers access to sophisticated investors.

LendingClub: America Does Not Need Another Credit Card, Apple Card Spells Disaster for Consumers (Crowdfund Insider), Rated: A

Apple Card, a “new kind of credit card” launched by Apple (NASDAQ:AAPL) in partnership with Goldman Sachs (NYSE:GS) is expected to be made available to the public within the next few days. In fact, it has been reported that invitation emails have already gone out to a small group of iPhone owners. More will follow during August.

One detractor is LendingClub.

Anuj Nayar: Americans don’t need another credit card. They need the right tools to help them build their financial futures and pay down debt without the opportunity to accumulate more at high-interest rates. Goldman Sachs tried to pursue building a helpful consumer tool with Marcus but now has slipped back into its old ways, looking to make money by getting consumers hooked on revolving, high-interest debt on Apple’s credit card.

Court activity on July 12: Sofi Lending Corp. vs Jaime Daric (Northern California Record), Rated: AAA

The Superior Court of California for San Francisco County reported the following activity in the suit brought by Sofi Lending Corp. against Jaime Daric and other unnamed defendants on July 12: ‘Declaration Of Non Service (transaction Id # 63543270) Filed By Plaintiff Sofi Lending Corp., As Attorney In Fact For Deutsche Bank National Trust Company, Trustee Of Sofi Consumer Loan Program 2015 Trust’

Rate cuts (PeerIQ), Rated: AAA

This week, we discuss the Fed rate cut to the 2 to 2.5% target range, and provide market color on OnDeck earnings.

Fun fact #1: It has been 3,878 days (10.5+ years) since the FOMC last cut rates.

This is the second longest streak on record behind the 4,115 days that passed between cuts in the discount rate since 1954. Markets are speculating on additional rate cuts before year-end although Fed Chair Powell positioned the rate cut as an “adjustment” rather than a change in trend.

Source: Chicago Fed PeerIQ

DigiFi Launches the World’s First Open-Source Loan Origination System (Markets Insider), Rated: AAA

DigiFi, an enterprise SaaS company building the future of lending technology, announced today the launch of its open-source loan origination system (LOS). The free-to-use platform, which was built over 45,000+ development hours and has been operating in-market with top lenders since late 2018, provides an end-to-end suite of modular capabilities that can be used individually or together to drive digital transformation.

DigiFi’s open source release underscores the lending industry’s dissatisfaction with the closed-loop systems available from existing LOS providers, which force lenders into onerous long-term contracts for inflexible systems.

Bitcoin and Ether Lender BlockFi Raises $ 18.3 Million Series A (CoinDesk), Rated: AAA

Crypto lending startup BlockFi received $18.3 million in a Series A funding round led by Valar Ventures, the company announced Tuesday.

Valar, which was founded in part by PayPal co-founder Peter Thiel, was joined by Winklevoss Capital, Galaxy DigitalConsenSys, Akuna Capital, Susquehanna, CMT Digital, Morgan Creek, Avon Ventures and PJC. Valar’s investment was its first in the cryptocurrency industry following prior investments in other fintech firms like Transferwise, a press release said.

Want to Hire Millennials? Better Help Repay Student Debt (Bloomberg), Rated: AAA

Like millions of her peers, Nicole Read graduated with thousands of dollars of debt. Unlike most of them, she’s getting direct help from her employer to pay it back.

In Read’s case, it’s $100 a month.
Such plans are spreading. They were on offer to staff at about 8% of U.S. employers in 2019, more than double the 2015 level, according to an April survey by the Society for Human Resource Management.

Another study by business adviser Willis Towers Watson found that 32% of firms are considering introducing a similar benefit by 2021.

Source: Bloomberg

Verishop Inc. is excited to announce a partnership with financial technology company Affirm Inc., giving customers more choice at checkout to pay for their purchases over time.

To see if they qualify, customers only need to provide five simple pieces of information2 and a credit decision is made within seconds. Monthly payments are shown in real dollars instead of hard-to-calculate percentages so customers will know exactly what they owe with no hidden or late fees. Customers never pay a dollar more than they agree to at checkout. The pay-over-time option is available for purchases ranging from $50 to $17,500 with a 30-day payment deferral available for smaller amounts.

Klarna offers payment installments to Toms, Asos US customers (Retail Dive), Rated: B

  • Klarna, an alternative payment platform, announced Monday that Asos shoppers in the United States will now be able to use its services, according to a press release. The announcement comes after Klarna also publicized its partnership with Toms on Thursday.

Lendio Surpasses $ 1.5 Billion in Small Business Loans Facilitated (Lendio), Rated: A

Lendio today announced it has facilitated more than $1.5 billion in financing to small businesses across the U.S.

According to the Federal Reserve Banks’ 2019 Small Business Credit Survey, “applications to online lenders continued to trend upward” last year, with 32% of applicants turning to online lenders, up from 24% the previous year.

Lendio’s 15-minute online application gives business owners access to multiple lenders with offers suited to meet their capital and business needs.

Behind the growth of PayPal’s SMB lending business (Tearsheet), Rated: A

In just a few years, PayPal’s business financing solutions has serviced over 225,000 small businesses around the world with funding. Between PayPal Working Capital and PayPal Business Loans, the company has recently surpassed $10 billion of capital it’s leant out to SMBs

Online lender backed by Nas says it was hit by security breach (New York Post), Rated: A

Earnin, which is also backed by tech investor Andreesen Horowitz, discovered in February that a third-party security firm had accessed customers’ bank transactions — including all their debit card purchases and payment statements going back for months, the company confirmed to The Post.

Small Business Loan Approvals at Banks Hit Record Highs (GlobeNewswire), Rated: A

Approval rates for small business loan applications rose to another post-recession record (27.7%) at big banks ($10 billion+ in assets), while also climbing above 50% at small banks in July, according to the Biz2Credit Small Business Lending Index released today.

Small bank approvals of small business loan applications inched up one-tenth of a percent to 50.1% from 50% in June.

Small business loan approval rates among alternative lenders dropped three-tenths of a percent to 56.8% from 57.1% in June.

What business does a crowdfunding fintech have with banks? (American Banker), Rated: A

Krista Morgan, the founder and CEO of the crowdfunding fintech P2Binvestor, always understood that funding small-business loans through investors would be challenging. But when the firm launched in 2014, she quickly recognized it wasn’t lining up the investors or capital that was the difficulty.

“Finding capital through our investor platform has been relatively straightforward,” she said. “Finding businesses and winning the business and being competitive in market and building the technology that supports the lending has been the harder side of the marketplace.”

Fox Corp. Buys 67% Stake In Consumer Loan Marketplace Credible Labs (Stock News Press), Rated: A

Citing reports, as per the terms of the deal, the shareholders of Credible Labs will reportedly receive A$ 2.21 in cash per CHESS depository interest (CDI), representing A$55.25 per share of common stock of the company.

Fox says it will commit up to $USD 75 million ($AUD110.8 million) of growth capital to Credible over the next two years.

Cross River — A Regional Bank Providing Specialized BaaS Services (Tearsheet), Rated: A

  • Who we spoke to: Gilles Gade (Founder and CEO) and Phil Goldfeder (SVP and Communications)
  • Establishment year: 2008
  • Bank license: Yes
  • API documentation

Al Goldstein of Avant and Amount (Lend Academy), Rated: A

We last had Al Goldstein, the CEO and Chairman of Avant and Amount, on the show back in 2015. So much has changed since then not just in the personal loan space but in the banking space as well. And Avant has evolved to meet those challenges.

Mall landlords weigh becoming lenders to blunt retail crash (American Banker), Rated: A

Mall landlords accustomed to offering rent reductions to ailing retailers are mulling a new strategy to forestall the industry’s collapse: positioning themselves as lenders to tenants struggling to stay afloat.

The boutique bank PJ Solomon has organized discussions with several mall owners about pursuing such a strategy with the troubled retailer Forever 21, according to people with knowledge of the matter, in what could serve as a model for future transactions within the sector.

This woman paid off ,000 in credit-card debt with a personal loan, but her first attempt landed her in the red again (MarketWatch), Rated: A

Rogers is far from the only person to have used this debt-consolidation strategy with success. At the end of 2018, nearly 11% of adults in the U.S. held a personal loan, according to data from ExperianEXPN, +1.84%.   The number of personal loans has risen 42% since 2015, making them the fastest-growing category of debt in the country.

Around 61% of personal loans are used for debt consolidation, said Ezra Becker, senior vice president of research and consulting at TransUnion.

An update on credit access and the Bureau’s first No-Action Letter (CFPB), Rated: AAA

For some consumers, the use of unconventional sources of information, or “alternative data,” to evaluate creditworthiness may be a way to increase access to credit or decrease the cost of credit. Alternative data includes information not typically found in core credit files of nationwide consumer reporting agencies and may indicate a likelihood of meeting obligations on time that a traditional credit history may not reflect.

The Bureau remains committed to using all of the tools at its disposal under the Dodd-Frank Act to help address these important issues around access to credit.  Toward that goal, the Bureau is currently reviewing comments to its proposed No-Action Letter, Trial Disclosure, and Product Sandbox policies.

Don’t let AI trigger a fair-lending violation (American Banker), Rated: A

The use of artificial intelligence and machine learning poses both opportunities and risks for financial institutions.

While using such predictive techniques may mitigate consumer lending credit risk, financial institutions should be cognizant of the potential impacts of bias and its implications on fairness.

Peer-to-peer crypto lending startup Dharma pauses new deposits and loans (The Block Crypto), Rated: A

Dharma, the San Francisco-based crypto lending startup behind the open-source protocol of the same name, has announced via Twitter that it is “pausing new deposits and loans” on its platform.

I quit my job at 34 with $ 3 million—here are my 5 biggest regrets about early retirement (CNBC), Rated: AAA

And in 2012, I finally retired at 34. By the time I quit my job, I had amassed a net worth of about $3 million that generated roughly $80,000 in investment income per year.

If I worked a few extra years before retiring, I would have had the financial confidence to buy more real estate in 2012, right before prices began to take off. (A rental property in San Francisco that cost $900,000 in 2012 would be worth roughly $1.6 million today.)

Source: Bay Area Market Reports, Compass

I also could have leveraged my interests in real estate and technology to start a real estate crowdfunding company — or, at the very least, join one. I still believe that real estate is one of the most straightforward ways most Americans can build wealth over the long term.

OppLoans Review: Installment Loans for Borrowers with Bad Credit (Money Check), Rated: A

One such lender that is looking to capitalize on this space is OppLoans. The US-based lender offers loans to those with poor credit, ranging from $500 up to $5,000.

Galaxy Digital Makes Its Next Move in Crypto Lending Markets (Bitcoin Magazine), Rated: B

DrawBridge Lending (DBL), a digital asset loaning, borrowing and investing company, has received an investment from merchant bank Galaxy Digital with the aim to greatly expand DBL’s institutional investment and lending capacity.

Minneapolis-based Digital Finance Startup DeFiner.org Wins 2019 Detroit Fintech Challenge (Yahoo! Finance), Rated: B

Less than two years after being conceptualized, Minneapolis-based digital lending & borrowing platform DeFiner.org has beat out 17 other Fintech startups to win one of the industry’s most coveted prizes.

United Kingdom

Funding Circle adds to August ABS supply with first US deal (GlobalCapital), Rated: AAA

UK-based marketplace lender Funding Circle is set to issue its first US securitization, a $198.45m deal backed by loans made to small and medium-sized enterprises (SMEs).

Funding Circle posts higher revenues but pre-tax losses widen (P2P Finance News), Rated: AAA

FUNDING Circle has increased its revenues but widened its pre-tax losses, according to a half-year report which echoed last month’s results preview.

The FTSE 250-quoted firm posted a 29 per cent jump in revenue to £81.4m but pre-tax losses widened to £30.8m from £27.1m in the first half of 2018.

Adjusted core earnings fell year-on-year to £1.2m from £3.3m.

Tide, Starling Ramp Up Rivalry Over SMB Customers (PYMNTS), Rated: A

The rivalry between U.K. challenger banks Tide and Starling continues to heat up as Tide signs on its 100,000th small business customer.

Reports in The Telegraph on Monday (Aug. 5) said the companies continue to compete for the small business customer base. Tide has on-boarded 100,000 small business customers, described by the firm’s chief executive Oliver Prill as a “very significant milestone.”

Young SMEs and companies that have recently switched banks are prime UK neobank targets (Business Insider), Rated: A

1 in 4 UK robo-advisors shuttered in two years (AltFi), Rated: A

Digital wealth management, or robo advice as it used to be called, has been around for more than a decade and launched into the UK in 2011 with the arrival of Nutmeg. Things started to get really interesting around 2016 and 2017 when a flurry of companies were founded to attack the space dominated by traditional wealth management, an industry looking after £1trn of investors’ assets.

OakNorth strengthening leadership team with appointment of Jackson Hull as CTO and COO (Fintech Finance), Rated: B

OakNorth has today announced the appointment of Jackson Hull as its Chief Technology Officer (CTO) and Chief Operating Officer (COO). With over 15 year’s C-suite experience in London and San Francisco, Jackson is a leading expert in building high-volume eCommerce applications, global SaaS platforms, mobile and IoT platforms, as well as award-winning products and services in finance, fintech, travel, accommodation and retail.

China

Jiayin Closes Cases Against 12,000 Debtors Online (CapitalWatch), Rated: AAA

Jiayin Group Inc. (Nasdaq: JFIN), China’s online lending platform, announced it has solved more than 12,000 cases of overdue payments and attempts to escape debt as of May.

Shanghai-based Jiayin runs a peer-to-peer lending marketplace, known as Niwodai, which connects borrowers and investors. The company has established a tailored legal department for post-loan management to handle online arbitration. As it reported on its website, as of the end of May, it has closed more than 12,000 cases in more than 30 provinces in China.

European Union

Swedish fintech Klarna valued at $ 5.5 billion in funding round (Reuters), Rated: AAA

Online payments firm Klarna, which has attracted a growing following with its “buy now, pay later” service for shoppers, said on Tuesday it had raised $460 million in a funding round that makes it Europe’s most valuable fintech startup.

Investors led by San Francisco-based Dragoneer Investment Group put new money into the Swedish company, giving it a valuation of $5.5 billion and additional financial firepower to expand in the United States.

Video: What’s next for Klarna, the most valuable EU fintech (Yahoo! Finance), Rated: A

Yahoo Finance’s Adam Shapiro, Julie Hyman, Rick Newman, and Scott Gamm join Klarna Co-Founder and CEO Sebastian Siemiatkowski.

Penta, the German business banking startup, raises €8M additional funding (TechCrunch), Rated: A

Penta, the business banking provider for small and medium-sized enterprises (SMEs) that was recently acquired by fintech company builder Finleap, has raised “over” €8 million in new funding.

The startup raised a €7 million Series A round in late 2018, and is thought to have had more than €18 million investment since being founded in 2016.

Two Issues Currently Evolving on P2P Lending Marketplaces (P2P-Banking), Rated: A

This week some investors on the p2p lending marketplaces ViventorGrupeer and Mintos are affected by issues that hinder the normal procedures on these marketplaces.

(Screenshot from Viventor.com)

Update 14:02: Apparently Mintos has now suspended trading of Aforti loans on the secondary market.

EstateGuru, a Marketplace for Short-Term, Property Backed Loans, Launches in Portugal (Crowdfund Insider), Rated: A

EstateGuru, an online marketplace for secured, short term loans, has launched in Portugal, according to a note from the company. EstateGuru is now providing crowdfunding services in six different countries including Estonia, Latvia, Lithuania, Finland, and Spain. EstateGuru said by opening in the Portuguese market the company had achieved its next milestone in its long term strategy.

International

International P2P Lending Volumes July 2019 (P2P-Banking), Rated: AAA

Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 611 million Euro.

Source: P2P-Banking

Ethereum’s Latest Milestone — 200,000 Smart Contracts (Crypto.IQ), Rated: A

DeFi protocols such as Compound, Dharma, and Uniswap are among the most advanced tools of Ethereum-based P2P lending solutions. Another interesting use case built on Ethereum is the decentralized prediction market platform Augur (REP).

Crowdfunding: alternative ways to find a community of impact investors (Specialist Banking), Rated: B

At the same time, there’s been a remarkable increase in the impact investment market — investments made with the intention to generate positive social and environmental impact alongside a financial return — with the Global Impact Investing Network valuing the global market at $502bn.

Australia/New Zealand

CommBank Invests US$ 100 Million In Fintech Klarna As Digital Transactions Continue To Grow (Which-50), Rated: AAA

Commonwealth Bank has invested in Klarna, a Swedish rival to Afterpay, and will bring the European buy now, pay later provider to Australia. The deal accompanies the bank’s continued investment in its digital capabilities.

CommBank invested US$100 million in the fintech’s US$460 million funding round, announced yesterday, which values the company at $5.5 billion. The bank will also become Klarna’s exclusive partner in Australia and New Zealand.

Prospa Establish NZ Warehouse Facility, Shares Rise on ASX (Crowdfund Insider), Rated: AAA

Online lender Prospa Group Limited (ASX: PGL) has established its first warehouse facility specifically to fund New Zealand small business loans. According to a note from Prospa, the 3-year facility has an initial capacity of NZ $45 million.

Judo bank breaks Aussie record with $ 400m round (Fintech Futures), Rated: A

Australian challenger, Judo Bank, has completed the biggest single funding round in the country’s history by raising $400 million, writes Jane Connolly.

StartupSmart reports that the finance – which is double Judo’s original target for the round – came from new institutional investors, including Bain Capital Credit and Tikehau Capital, along with existing investors.

India

India’s Indifi raises $ 21M to expand its online lending platform (TechCrunch), Rated: AAA

Indifi, a Gurgaon-based startup that offers loans to small and medium-sized businesses and also operates an online lending marketplace, has raised 1,450 million Indian rupees ($21 million) in a new financing round to expand its business in the country.

Indifi, which has raised about $34 million in venture capital to date, has also relied on debt to grow and finance loans on its platform. Currently, it’s in about $21 million in debt, Alok Mittal, co-founder and managing director of Indifi, told TechCrunch in an interview.

A typical loan processed by Indifi is of about $7,000 in size. Overall, the startup offers between $1,400 to  $70,000 in capital to businesses.

Asia

65% of Singapore Customers Interested in Digital Banking (Crowdfund Insider), Rated: AAA

According to a recent survey, in Singapore digital banking has some pent up demand. JD Power has published a brief retail banking satisfaction study and, according to their numbers, 65% of consumers are interested in opening digital bank accounts. This is an increase from the year prior where 52% of surveyed individuals expressed similar digital banking interest.

Authors:

George Popescu
Allen Taylor

The post Thursday August 8 2019, Weekly News Digest appeared first on Lending Times.

Thursday July 6 2019, Weekly News Digest

PayPal

News Comments Today’s main news: 3 top execs exit SoFi. Zopa proclaims end of monogamous banking. LendInvest earnings hit the roof. Financial Conduct Authority sets new rules for UK P2P lending. Quarter of global small firms are significant fintech users. Biz2Credit raises $52M. Today’s main analysis: Alternative lenders steal business from banks. P2P lending will be […]

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

PayPal

News Comments

United States

United Kingdom

China/Hong Kong

International

Other

News Summary

United States

SoFi Loses Three Top Executives (WSJ), Rated: AAA

Three top executives of Social Finance Inc. are leaving the financial-tech startup in the coming weeks, adding to the challenges the company faces as it moves through a tough environment for online lenders.

Marketing chief Joanne Bradford, head of risk Kevin Moss and Ashish Jain, the lender’s top capital markets executive, recently told Chief Executive Anthony Noto about their plans to step down from their roles. All three had been at the company prior to Mr. Noto taking the reins in early 2018.

Tech Driving Bank Earnings Growth (PeerIQ), Rated: AAA

US first quarter GDP growth was revised lower to 3.1%. There is fear that the economy is slowing due to the ongoing trade war and the length of this economic expansion. The 3 month-10 year yield curve fell to its most inverted since 2007 to -12.3 bps. Recessions have usually followed within 18 months of this curve inverting. The market is looking to the Fed to bolster economic growth with the odds of a rate cut at the September meeting now at 54%.

Source: CME, PeerIQ

Technology Driving Earnings Growth

Banks and lenders are reaping the benefits of their technology investments now. Banks like Citi have been able to offer new products and grow their deposit base, while Capital One has improved its efficiency ratio by 400 bps. Banks and lenders continue to make large technology investments for faster growth at lower cost.

Alternative Lenders Continue to Steal Business From Banks (The Financial Brand), Rated: AAA

What is less well known is the rapid growth of PayPal as a digital lending alternative. It may be time for banks and credit unions to wake up, however, as the company announced that they had crossed $10 billion in small business lending in only 5 years.

Amazon Joins PayPal as Top 5 Small Business Digital Lender

Amazon has joined PayPal, OnDeck, Kabbage, and Square as a top 5 digital small business lender. In fact, Amazon revealed that it had made more than $1 billion in small business loans to US-based merchants in 2018.

The peer-to-peer business lender, Funding Circle, also revealed its first-quarter trading update, showing that loans under management rose by 44% compared to the first quarter of 2018, while originations grew by 23% (they have originated $9.5 billion in loans).

Consumer Financial Protection Bureau Releases Rules for Comprehensive Reform of Debt Collection Industry (Debevoise & Plimpton), Rated: AAA

On May 7, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) released a Notice of Proposed Rulemaking (“NPRM” or “Notice”) to increase regulation of the debt collection industry.1 The much-anticipated Notice is the outgrowth of the CFPB’s 2016 Outline of Proposals (the “Outline” or the “2016 Outline”), which was a cornerstone of the Obama Administration’s efforts to protect consumers and overhaul all aspects of consumer finance (see our August 10, 2016 client alert on the Outline here). One presidential election and two CFPB Directors later, CFPB Director Kathleen Kraninger announced a more limited plan to put in place substantial protections, but which rejects some of the 2016 Outline’s more ambitious proposals. The NPRM would overhaul the industry by, for example, requiring that debt collectors make no more than seven attempts by telephone per week to reach consumers about specific debts, and allow debtors to opt out of allowing collectors to contact them via e-mail, text messages, or other media. However, the proposal fails to address many of the Outline’s calls for increased regulation of substantiation of debt, decedent debt, and transfer of information to subsequent collectors (among other things).

See the full report here.

Biz2Credit Raises $ 52M In Funding To Expand (PYMNTS), Rated: AAA

Biz2Credit, the online lending platform that helps banks and other financial institutions manage small and medium-sized business (SMB) lending processes, announced Tuesday (June 4) that it raised $52 million in venture funding.

Biz2Credit said the Series B funding round was led by WestBridge Capital.

Jared Kaplan of OppLoans (Lend Academy), Rated: A

The next guest on the Lend Academy Podcast is Jared Kaplan, the CEO of OppLoans.

Lighter Capital Introduces Suite of Alternative Financing Solutions to Fund More Startups up to $ 3 Million (Yahoo! Finance), Rated: A

Lighter Capital announced today that it has launched new financing products to better match the capital needs of growing startups. To date, Lighter Capital has provided over $150 million in more than 500 rounds of financing to over 300 startups. The company has historically provided Revenue-Based Financing and has now broadened its portfolio to include lines of credit and term loans, designed to provide startups capital over time as they need it. Unlike most venture debt, startups do not need to have raised Venture Capital to qualify for funding.

1. Lighter Line of Credit – Startups have fluctuations in capital needs, to make essential payments like payroll or wait for a big customer payment. The Lighter Line of Credit is a revolving working capital line. It enables startups to draw and return capital numerous times, to even out their cash needs.

2. Lighter Term Loan – Provides startups growth capital in a traditional structure with predictable payments. Lighter Capital will also make forward commitments, giving startups the right to get additional capital for a period of time. For example, a startup could get a $500,000 loan today and a commitment from Lighter Capital to provide an additional $500,000 over the following six months.

LendPro Unveils Dynamic Routing Capability to Streamline POS Financing (LendPro Email), Rated: A

LendPro LLC, a provider of Lending-As-A-Service (LaaS) products and platforms for retailers, today unveiled Dynamic Routing —an innovative POS financing solution that automatically matches consumer credit applications with the best-available lending option.

While alternative lending software moves credit applications through a pre-defined, inflexible process, Dynamic Routing by LendPro dynamically guides borrower application data to lenders in the merchant’s financing portfolio based on the attributes of the sale. For example, if the total price for a specific purchase is too large (or small) for a lender’s target loan size, LendPro’s Dynamic Routing system can route the applicant to a different lender. This technological innovation saves time, increases simplicity, and may help the borrower avoid an unwanted credit application.

Why it’s Time to Ask Your Wealth Manager About P2P Lending (Crowdfund Insider), Rated: A

Using a crowdfunding platform, however, 5,000 individuals might each invest $1,000 into the company. Each of those individual investors is exposed to a very small amount of risk, and the company is able to raise the funds without surrendering ownership.

Possible Finance lands $ 10.5 million to provide consumers softer, kinder short-term loans (TechCrunch), Rated: A

It’s one reason that venture capitalist Rebecca Lynn, a managing partner with Canvas Ventures  and an early investor in the online lending company LendingClub, has largely steered clear of the numerous startups crowding into the industry in recent years. It’s also why she just led a $10.5 million investment in Possible Finance, a two-year-old, Seattle-based outfit that’s doing what she “thought was impossible,” she says. The startup is “helping people on the lower end of the credit spectrum improve their financial outlook without being predatory.”

Santa Clarita Ranked Second Highest ‘Debt-Ridden’ City In California (Home Town Station), Rated: A

LendingTree, an online loan marketplace, released a report this week detailing the accrued debt of all California cities with a population of at least 50,000.

Santa Clarita ranked the second highest in auto loan debt with an average of about $21,000, and second in the state for personal loan debt, excluding mortgages, with an average of just over $6,000.

Source: Home Town Station

Cities With the Highest Percentage of Black Homeowners (Black Enterprise), Rated: A

Even though housing discrimination has been outlawed for 50 years, studies show that the U.S. black homeownership rate isn’t any higher than when the Fair Housing Act initially passed in 1968. In fact, the racial gap between white and black homeowners today is significant. According to the U.S. Census Bureau, the homeownership rate among white Americans is 73.2%, while the black homeownership rate stands at 41.1%. In comparison, 42% of black households owned their homes back in 1970, two years after housing discrimination based on race, color, religion, and national origin was outlawed.

According to the report, the U.S. cities that have the highest percentage of black homeowners are San Jose, Los Angeles, Salt Lake City, San Antonio, and Portland. On the other hand, the cities where black homeownership is lowest relative to overall population are Memphis, New Orleans, Baltimore, Virginia Beach, and Milwaukee, where the median household income for black residents is a mere $28,928.

See LendingTree’s report here.

Real Crowd Says HNW Investors Poised to Boost Real Estate Investments in 2019 (Crowdfund Insider), Rated: A

Real estate crowdfunding platform RealCrowd reports that High Net Worth (HNW) investors are looking to increase their portfolio of real estate investments during 2019. According to a survey by the Fintech platform, 53% of surveyed HNW individuals expect to make “two-to-four direct real estate investments in 2019.” Specific details on the survey process were not revealed.

This is a big improvement over year prior when just 33% planned to do the same thus an increase of around 20%.

The survey also stated that 47% of respondents’ desire to allocate more than 25 percent of their investment portfolio to commercial real estate.

WealthStone – Democratizing Access to Commercial Real Estate (PR Newswire), Rated: A

WealthStone LLC announces the launch of its new website, WealthStoneLLC.com, where technology brings increased access to institutional-quality commercial real estate investments to a wider audience, while delivering the best customer experience possible for its growing global investor base.

3 Investments That Lead to Passive Income (Realty Biz News), Rated: B

Peer-to-peer lending is a relative newcomer to the world of investments. Lending Club and Prosper were the first institutions to offer P2P loans beginning in mid-2000, and they’ve changed the way countless loans are handled. Instead of going to the bank, borrowers apply for loans from other people. People who have been denied loans from financial institutions are often approved for P2P loans at rates that are lower than those of larger financial institutions.

Sagent Lending Technologies to Transform the Lending Experience, Powered by Microsoft Azure (BusinessWire), Rated: A

Sagent Lending Technologies announced today a strategic initiative to transform the borrower and the lender experience through Microsoft Azure. Sagent will leverage the potential of artificial intelligence, machine learning, data science, and cognitive services available on Azure that will provide a reimagined experience for Sagent clients and their consumer borrowers.

BofA, Longtime Leader in Leveraged Loans, Warns of `Carnage’ (Bloomberg), Rated: A

The U.S. economy is on solid footing except for one potential trouble spot, according to Bank of America Corp.’sChief Executive Officer Brian Moynihan: leveraged loans — a business the bank has dominated for a decade.

Bank of America was bookrunner on some $317 billion of leveraged loans this year, accounting for 10.8 percent of the market share, the Bloomberg data show, which captures all leveraged term loans and revolver facilities that are either new or have been amended.

Moody’s Investors Service said covenant quality for 2018’s last quarter was close to a record low, and the rating company sees no signs of improvement this year. Federal Reserve Chairman Jerome Powell said last month that the market looks a lot like the mortgage industry in the run-up to the subprime crisis.

Digital Banks Look to Attract Older Generations (LendIt), Rated: A

One of the challenges for the challenger banks like Monzo, Starling and Revolut is to go beyond the young demographic they’ve been successful at attracting to their products; not surprisingly, less than 5% of Monzo’s customers over 60; as more bank branch close they are looking to bring in older customers who are no longer being served by traditional banks; Monzo and Starling have both added the ability to make cash deposits; Starling recently partnered with the post office and Monzo partnered with a payments service which is in 30,000 shops in the UK; these digital banks and their competitors are experimenting in how they can have more physical points of contact with customers; Revolut recently shared a plain English customer contract in a move to help their customers better understand the product.

The tech banks are using to boost deposit growth (American Banker), Rated: A

First Arkansas & Trust, for example, is using Plinqit, a goal-oriented savings app from a fintech called HTMA Holdings, in the hopes of boosting deposits.

And some banks have begun to specialize in the banking-as-a-service model to increase deposits.

Following is a look at how regional and community banks are employing tech to help in the race for deposit growth:

Wharton just released an online fintech course for the masses (Technical.ly), Rated: A

On Thursday, the University of Pennsylvania’s Wharton Online announced its new virtual fintech specialization program, “FinTech: Foundations and Applications of Financial Technologies,” for students and professionals who want to learn about the rapidly changing tech.

The four-course financial program is available via online education platform Coursera, and will detail the use of cryptocurrency, robo-advising, crowdfunding and modern investing.

BlueVine Appoints Silicon Valley Veteran Herman Man to Chief Product Officer (BlueVine), Rated: B

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced today that it has named Silicon Valley technology and engineering veteran, Herman Man, its Chief Product Officer. In this role, Man will focus on developing the next generation of BlueVine products and oversee the company’s product vision, strategy, design and execution to deliver on its mission to provide fast, fair and easy financing solutions every small business needs to thrive.

Lendio Announces New Senior Vice President of Lender & Partner Strategy (Lendio), Rated: B

Lendio announced today that Denada Ramnishta has been promoted to Senior Vice President of Lender & Partner Strategy.

Thomas M. Affolter Joins White Oak as Managing Director to Bolster Origination Efforts (Yahoo! Finance), Rated: B

White Oak Global Advisors, LLC (White Oak) is pleased to announce that Thomas (Tom) M. Affolter has joined White Oak as a Managing Director based in Chicago. Mr. Affolter will focus on originating new investment opportunities and expanding the coverage network for White Oak’s private debt funds.

United Kingdom

Zopa says fintech revolution has killed off monogamous banking (P2P Finance News), Rated: AAA

ZOPA has declared that “monogamous banking is a thing of the past”, as new research reveals that the average UK adult has a relationship with seven different financial providers.

The peer-to-peer consumer lender, which is launching a digital bank, said that the fintech revolution has changed the shape of financial services for consumers.

It cited a survey that found 71 per cent of UK adults said they do not need a relationship with their main bank, while two thirds are actively using products from banks and financial providers other than their main current account provider.

LendInvest earnings soar as it looks to disrupt ‘slow moving’ banks (P2P Finance News), Rated: AAA

ONLINE property lender LendInvest has reported an 82 per cent jump in core earnings, as it looks to disrupt the UK mortgage market.

LendInvest, which used to be a peer-to-peer lender before it shut its platform to retail investors, posted core earnings of £4m for the year ended 31 March 2019, up from £2.2m the previous year.

The firm, which is considering a stock market flotation, said that platform assets rose by 69 per cent to £788.3m over the same period, while revenue rose by 36 per cent to £72.7m.

FCA Announces New Rules For UK P2P Lending Platforms (Lend Academy), Rated: AAA

The long awaited changes to P2P lending regulations in the UK are finally here. Today, the Financial Conduct Authority (FCA) announced that the new rules for peer to peer lending platforms have been set and will come into effect on December 9, 2019.

  • Introducing more explicit requirements to clarify what governance arrangements, systems and controls platforms need to have in place to support the outcomes they advertise. These new rules focus particularly on credit risk assessment, risk management and fair valuation practices, especially for platforms with more complex business models.
  • Strengthening rules on plans for the wind-down of P2P platforms.
  • Applying marketing restrictions to P2P platforms, designed to protect new or less experienced investors. We have also clarified the practical implication of these new rules as they apply to P2P agreements.
  • Introducing a requirement that an appropriateness assessment (to assess an investor’s knowledge and experience of P2P investments) be undertaken, where no advice has been given to the investor. We have also provided guidance on what the assessment should include.
  • Setting out the minimum information that P2P platforms need to provide to investors

Assetz Capital hits bridging loans and small business lending milestones (AltFi), Rated: A

Peer-to-peer lender Assetz Capital said it has hit a double milestone, providing over £100m in bridging loans and a further £50m in small business funding, “as the appetite for alternative forms of finance continues to rise across the UK”.

The Manchester-based fintech adds that since it was founded six years ago it has lent over £780m to small firms and property developers, helping build 3,700 homes in Britain.

UK P2P sector poised for “significant further growth” (P2P Finance News), Rated: A

THE UK’S peer-to-peer lending sector is set to experience “significant further growth”, according to Standard & Poor’s.

A report released by the ratings agency this week said that the growing involvement of institutional funds and increased securitisation issuance are set to boost the industry.

Santander and eBay team up on UK loans app (Techradar), Rated: A

In an effort to fend off tech giants and newer digital rivals, Santander and eBay have announced a new lending partnership for small businesses.

The Spanish bank will begin offering loans to over 200,000 small and medium-sized businesses that sell products on eBay in the UK through its financial technology app Astro.

As £165m Lendy collapses, experts warn ‘a dozen more peer-to-peer firms will follow’ (The Telegraph), Rated: A

While investments of varying risk are available, some platforms have tempted consumers with returns of more than 12pc on high-risk projects. But the collapse of one large platform, Lendy, which offered loans on property developments, has concerned investors across the sector.

Wagestream Says One Complaint Against PayDay Lenders is Resolved for Every Three Received (Crowdfund Insider), Rated: A

Payday loan alternative Wagestream has issued a release stating the Financial Ombudsman Service (FOS) has received 47,220 complaints against payday lenders since 2018. Yet while many complaints have been received only a fraction have been resolved. Wagestream states that only one out of three are resolved or just under 17,000.

Welendus unveils rebrand as Fund Ourselves (P2P Finance News), Rated: B

WELENDUS, the peer-to-peer payday lender, has rebranded as Fund Ourselves.

ARBUTHNOT SPECIALIST FINANCE CONCLUDES FIRST LOAN COMPLETION SINCE LAUNCHING THE BUSINESS (Arbuthnot Latham), Rated: B

Arbuthnot Specialist Finance (ASFL) is pleased to announce it has concluded its first loan completion since announcing its launch in late May. The deal is a 70% LTV residential product loan on a property located less than half a mile from the University of Central Lancashire campus in Preston.

China/Hong Kong

The Escalating US-China Trade War, Part 1 (In Homeland Security), Rated: AAA

China is in debt, significantly. Part of the problem is that it is difficult, if not impossible, to assign a figure to the debt. There are Chinese statistics for official debt, but following the 2008 economic crisis, China implemented new restrictions on lending. Over the past decade, those restrictions have shifted from one type of loan to another so Chinese citizens get creative with how they borrow money for business purposes or to purchase property.

Furthermore, the economic crisis took “shadow lending” to new heights. Shadow lending can include everything from organized crime to banks obfuscating the purpose of a loan or peer-to-peer lending. China cracked down on this lending practice too, but the debt amount is significant and official numbers do not typically include shadow lending.

New US Tariffs Spell Doomsday for China’s Economy (The Epoch Times), Rated: AAA

The additional 25 percent tariff imposed by the United States on $200 billion worth of Chinese goods will trigger a new round of factory closures in China, driving economic collapse.

In the context of the blow-up of the P2P (peer-to-peer lending) and other usury, the 8.4 trillion will cause most medium and small-sized banks to fall into bankruptcy crisis.

HSBC Rolls Out Digital Wallet To Hong Kong Businesses (PYMNTS), Rated: A

HSBC has reportedly expanded its PayMe digital wallet to startups and small businesses, marking its first foray into the business payments marketplace.

European Union

ING pushes for open banking with SME financing platform and Yolt expansion (Fintech Futures), Rated: A

ING is keen to maximise the possibilities of open banking and is working with Yolt and Funding Options on bringing new features to customers across Europe.

Firstly, ING is launching a marketplace for SME financing in the Netherlands, which will open to other external financing providers, becoming the first Dutch bank in doing so.

International

We are “very close” to peak fintech, with more than 10,000 startups jumping into the boom (Quartz), Rated: AAA

According to Curve’s Shachar Bialick, the founder and CEO, an app that lets customers to link all their credit and debit cards to just one card, says there are more than 10,000 fintech startups around the world, and even he can’t keep track of them all. Some, or even most, aren’t going to make it.

Quartz: It’s been about four months since Amex blocked Curve. What are your plans now?

Bialick: Amex was never a critical part of Curve. It was always an opportunity to solve a big problem Amex has in the UK and Europe, which is access.

Curve has continued to grow in Europe without Amex.

Have we reached the peak in terms of new fintech startups?

I don’t know if we reached the peak, but we definitely are very close, because today there are over 10,000 fintechs globally. I don’t know over 90% of them.

Peer To Peer Lending To Be The Next $ 1 Trillion Industry (ValueWalk), Rated: AAA

By eliminating the need for banks, peer to peer lending allows investors to invest in individual and company debt with 5-10% returns – a far cry from the the lowly 1.5% that you’ll received in a regular CD account.

And it works better for borrowers too. Borrowers are able to take out loans with greater ease and lower interest rates, typically offered in the region of 3-4%.

The average default rate at Lending Works is only 3.2% over the last six years. And many P2P lenders allow you to choose secured loans for additional protection.

Transparency Market Research estimates the industry be worth $900 billion by the end of 2024, with an annual growth rate of 48%, up from $26 billion in 2015.

Source: ValueWalk

One quarter of world’s small firms are ‘significant’ fintech users, says report (AltFi), Rated: AAA

Fintechs are becoming the ‘new normal’ in financial services, said a survey by professional services firm EY.

Fintech adoption is by far the highest in China, where 61 per cent of small businesses use their services, followed by the US, 23 per cent, the UK, 18 per cent, South Africa, 16 per cent, Mexico, 11 per cent, with the average set at 25 per cent.

Source: Ernst & Young

See the full report here.

Tencent, Temasek Invest $ 35 Million in U.K. Open-Banking Startup (Bloomberg), Rated: A

Chinese technology giant Tencent Holdings Ltd. and Singapore government-owned fund Temasek is to invest $35 million in London-based TrueLayer.

The Fintech Bubble Floats Toward a $ 64 Billion Pin (The Washington Post), Rated: A

Trendy U.S. online payments company Stripe, worth some $22.5 billion according to private-market valuations, is joining Amazon.com Inc. and Apple Inc. in warning about the impact of EU rules aimed at getting customers to double-check payments going out from their accounts.

Adyen trades at a gob-smacking 110 times this year’s earnings, with a market value of 20.8 billion euros. That’s almost twice the worth of Deutsche Bank AG, even though the Dutch fintech only employs the equivalent of 1% of the German lender’s staff. Stripe is the sixth most expensive private company in the world, according to researchers at CBInsights.

Australia

RBA Boss Warns Banks On Undermining The Economy (SB Dirty South Soccer), Rated: A

THE Reserve Bank of Australia (RBA) has cut the cash rate to a new record low.

The online lender announced a new headline variable rate for owner-occupiers at 3.34 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 23 2019, Weekly News Digest

young credit card delinquents

News Comments Today’s main news: DBRS assigns provisional ratings to SoFi Consumer Loan Program 2019-3 Trust. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2019-3. Funding Circle seeds shareholder input on wind-down plans for investment trust. TransferWise valuation doubles to $3.5B. Today’s main analysis: High income, super prime borrowers take bigger share of […]

The post Thursday May 23 2019, Weekly News Digest appeared first on Lending Times.

young credit card delinquents

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

DBRS Assigns Provisional Ratings to SoFi Consumer Loan Program 2019-3 Trust (DBRS Email), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes (collectively, the Notes) to be issued by SoFi Consumer Loan Program 2019-3 Trust (SCLP 2019-3):

— $420,000,000 Class A Notes at AAA (sf)
— $31,100,000 Class B Notes at AA (sf)
— $62,500,000 Class C Notes at A (sf)
— $35,600,000 Class D Notes at BBB (sf)

View the full report here.

KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2019-3 (Yahoo! Finance), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Prosper Marketplace Issuance Trust 2019-3 (PMIT 2019-3). This is a $380.99 million consumer loan ABS transaction.

Class Rating Initial Class Principal
A A- (sf) $270,750,000
B BBB- (sf) $51,470,000
C BB- (sf) $39,720,000
D B- (sf) $19,050,000

Millennial DQs on the rise; GreenSky earnings; OCC on a fix for Madden? (PeerIQ), Rated: AAA

US consumer debt rose by 0.9% QoQ in 1Q to $13.7 Tn.

Source: Bloomberg, PeerIQ

Mixed FinTech Earnings

FinTech issuers saw growth in revenues and loans. Pace of loan growth weakened slightly as originations fell at Enova and grew by less than 10% YoY at OnDeck and OneMain. Stock price performance post earnings was mixed. Enova saw its stock price increase by 18% post earnings while OnDeck’s stock price dropped by 16%.

Source: Bloomberg, PeerIQ

High Income and Super Prime Borrowers Taking Bigger Share of Personal Loans on LendingTree Marketplace (Lending Tree), Rated: AAA

Over the past 10 years, the amount of outstanding personal loan debt has increased by 75%.

Key findings

  • The share of personal loan inquiries from those with incomes over $108,000 increased by 77% between the second quarter of 2017 and the first quarter of 2019, while the share of inquiries from people earning over $84,000 increased by 65%.
  • The share of personal loan inquiries from super prime borrowers (740 and higher) increased by 47% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime and super prime borrowers (680 and higher) rose by 36%.
  • The share of personal loans closed by borrowers with incomes over $108,000 on the LendingTree marketplace increased by 38% between the second quarter of 2017 and the first quarter of 2019, and the share of borrowers earning over $84,000 increased by 26%.
  • The share of closed personal loans from super prime borrowers (740 and higher) increased by 37% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime borrowers (680 and higher) rose by 19%.
  • Borrowers with incomes up to $24,000 decreased their share of closed loans by 22%, and those with incomes up to $48,000 decreased their share by 17%.
  • The share of loans closed by borrowers with scores below 560 increased by 28%, but the share of closed loans from borrowers with scores between 560 and 619 dropped by 24%.
  • The share of inquiries from people with incomes up to $24,000 dropped by 27% during the same period, while inquires from those with incomes up to $48,000 dropped by 16%.
  • The share of loan inquiries by borrowers with scores below 560 decreased by 12%, and the share of closed loans from borrowers with scores below 620 decreased by 9.2%.

For example, in the SoFi Consumer Loan Program 2017-3 LLC, securities show that the average gross income of borrowers as of May 2017, was $141,780, with an average FICO score of 731, and an average VantageScore of 682. The most recent offering, reported in February 2019, showed borrowers had an average income of $151,144, an average 753 FICO score, and a 713 VantageScore.

Job Loss and Medical Expenses Leading Causes of Bad Credit (Yahoo! Finance), Rated: AAA

Job loss and medical expenses are the leading factors causing Americans’ credit scores to drop, according to new research by Elevate’s Center for the New Middle Class (CNMC).

According to the new report, 55% of respondents cited job loss or reduction in work hours as the reason why their credit score dipped below 700. Nearly a quarter (24%) cited medical bills as the primary cause. Following these leading factors, a variety of typical, seemingly innocuous expenses follow, including repairing a car (11%), leaving home for the first time (6%), and putting a child through college (5%).

Non-prime consumers are 86% more likely to experience multiple factors that negatively affect their credit score compared to just one. For example, of the 23% who mention a medical reason, about three-quarters (75%) also experienced an income drop, severely complicating their ability to manage and cover medical expenses.

Americans Use Short-Term Loans to Pay Off Debt (Lexington Law), Rated: A

American debt is at an all-time high. How did we manage to dig ourselves into a steep $13 trillion hole? Credit card debt alone accounts for $1 trillion of this debt, with the average balance over $6,000 per capita.

  • 33% of Americans are going into debt to pay off debt
  • Generation X is most likely to incur short-term debt to pay down long-term debt
  • Women who use debt to make other debt payments tend to do so multiple times

Bernardo Martinez of Funding Circle USA (Lend Academy), Rated: A

In this podcast you will learn:

  • The knowledge that Bernardo brought with him from PayPal.
  • What he has learned in his first year on the job at Funding Circle.
  • The range of terms for their small business loans.
  • The types of investors they have on their platform today.
  • How and why 72% of their customers came to Funding Circle first.
  • How their offering compares to what is offered at banks today.
  • Who Bernardo sees as their biggest competitors.
  • How they view the SBA and their loan guarantee program.
  • How the LendingClub partnership came together.
  • Why no other online platform has reached significant scale in term loans for small business.
  • How they expanding their business into Canada.
  • Who they are hiring for their new Denver office.
  • How they are approaching their relationships with regulators in DC these days.
  • How they helped get SB-1235 passed in California.
  • How Funding Circle is monitoring their risk as it pertains to the economic cycle.
  • What is most exciting for Bernardo today at Funding Circle.

How a Silicon Valley startup is trying to rebrand payday loans (Vox), Rated: AAA

Once every few weeks, Myra Haq withdraws $100 or so from Earnin, an app that lets people borrow small sums of money.

The app lets her withdraw up to $100 a day, and never more than what she actually makes in a pay period, and then withdraws the money from her checking account once her direct deposit hits.

Unsurprisingly, payday lenders typically target low-income people — a 2013 Pew report found that 58 percent of people who use payday loans have trouble meeting monthly expenses at least half the time and usually borrow to deal with “persistent cash shortfalls rather than temporary emergencies.”

The average American household with student debt owes almost $48,000, and experts believe that student loan debt has held millennials back from major life milestones like marriage, homeownership, and having children.

How One Company Wants to Reduce or Even Eliminate Your Unpaid Medical Bills (Forbes), Rated: A

Relying on personal savings or insurance may not even be enough to pay off expensive medical bills. As a result, .

Earnin invited some community members to try HealthAid and was able to find savings for about 90% of people.

In one case, Earnin was able to get a patient’s $48,000 bill fully forgiven.

Figure Technologies loan platform secures $ 1B financing facility (CoinGeek), Rated: A

Figure Technologies looks to be profiting from increased interest in the cryptocurrency industry. Specifically, in a press release dated May 9, it was announced that the company had secured a $1 billion line of credit on the Provenance.io blockchain. The agreement also involves two other companies, Jefferies and WSFS Institutional Services, which will provide the line of credit.

LendKey’s Vince Passione on partnering with banks and credit unions and the future of lending as a service (Tearsheet), Rated: A

Vince joins us on the show to talk about his partnership model and the challenges and opportunities of working alongside banks and credit unions, which have deployed more than $2 billion in lending capital on the digital platform.

Small-business fintech launches lending platform for banks (American Banker), Rated: A

Spurred by bank interest, small-business lending platform Biz2Credit has unveiled a software-as-a-service version of its loan management, servicing and risk analytics product.

After HSBC and New York-based Popular Bank contracted with Biz2Credit to use the software, the company decided to launch the platform for all banks to use.

At a cramped desk on the 22nd floor of a downtown Manhattan office building, Gary Roth spotted a looming disaster.

An urban planner with two master’s degrees, Mr. Roth had a new job in 2010 analyzing taxi policy for the New York City government. But almost immediately, he noticed something disturbing: The price of a taxi medallion — the permit that lets a driver own a cab — had soared to nearly $700,000 from $200,000. In order to buy medallions, drivers were taking out loans they could not afford.

Prodigy Finance Aims to Bridge Healthcare Gap with New Loan Offering (University Business), Rated: A

Prodigy Finance today announces it will be supporting international students pursuing Master of Public Health (MPH) and Master of Science in Public Health (MSPH) degrees, Master of Science in Nursing (MSN) degrees, as well as those enrolling in Advanced Standing Dental programs and Select Certificate Dentistry programs in the U.S.

Crypto Lending Startup BlockFi Slashing Interest Rates on Ether Deposits (CoinDesk), Rated: A

Cryptocurrency lending startup BlockFi is almost halving the interest rates it offers on ether (ETH) deposits, while some bitcoin (BTC) rates will increase slightly.

From June 1, customers with 25–100 ETH balances in a BlockFi Interest Account (BIA) will see the interest rate drop from the current 6.2 percent annual percentage yield (APY) to 3.25 percent, the startup announced Tuesday. Those holding over 100 ETH balances will earn just 0.2 percent APY.

Some BTC balances, on the other hand, will see a slight interest rate increase – up to 2.15 percent from the current 2 percent – for deposits of over 25 BTC. Those holding 0.5–25 BTC will continue to earn 6.2 percent APY, BlockFi said.

Find the Right Loan Among 300+ Lending Partners for Credit Card Consolidation and More (CardRates), Rated: A

In a Nutshell: LoanStart helps consumers in search of a loan find a lender that suits their funding needs within just five minutes after submitting a simple, fee-free loan request form. Working securely with more than 300 trusted lending partners, including conveniently located storefront providers, the service makes finding a suitable lender easy. In today’s connected world where loan options abound, LoanStart cuts through the clutter to connect consumers in need of funds with lenders willing to provide financing.

Maxex Closes Series B Funding (FinSMEs), Rated: A

Maxex, LLC, an Atlanta, GA-based residential mortgage loan exchange, closed a Series B funding round of undisclosed amount.

CFPB Sues Debt-Collection Agency Over Deception Allegations (PYMNTS), Rated: A

The Consumer Financial Protection Bureau (CFPB) said Friday (May 17) that it has filed a lawsuit in federal court against a debt-collection agency that, the agency said, violated the Fair Debt Collection Practices Act.

The lawsuit targets Forster & Garbus, LLP, a debt-collection law firm based in New York.

Plaid gives digital banks and fintech a new tool to bypass traditional finance (CNBC), Rated: A

Start-up Plaid, recently valued at $2.7 billion, already connects bank accounts to fintech apps like Venmo, Robinhood, Coinbase and Acorns. It announced “Plaid Direct” on Wednesday, which lets users more easily connect to newer digital banks like Chime.

Capital Markets Veteran Joins PeerStreet to Manage Institutional Sales (BusinessWire), Rated: A

PeerStreet, a marketplace for investing in real estate backed loans, has announced the appointment of Deepa Salastekar as the Vice President of Institutional Sales. Ms. Salastekar joins PeerStreet to expand the company’s relationship base of institutional partners across all investment types available through PeerStreet.

Dharma now supports peer-to-peer lending in USDC to attract mainstream investors to DeFi (The Block Crypto), Rated: B

Defi startup Dharma announced Wednesday that it will start to support peer-to-peer lending of USDC, in a push to engage mainstream investors.

United Kingdom

Funding Circle investment trust asks shareholders to approve wind-down plans (P2P Finance News), Rated: AAA

FUNDING Circle is set to begin a managed wind-down of its dedicated investment trust, the Funding Circle SME Income Fund (FCIF), once it gets the green light from shareholders.

The FTSE 250-listed peer-to-peer business lender said last month that shareholders had backed plans to stop investing in new assets and begin the process of returning capital to investors.

Funding Circle Sets Hard Limit To Incentive Pay For Senior Executives (Morningstar), Rated: A

Funding Circle Holdings PLC clarified its director pay policy Wednesday following “feedback from shareholder advisory bodies”.

The small and medium enterprise loan platform said the amount granted in each year for a three year period under the company’s long-term incentive plan to can now no longer exceed GBP2.0 million and GBP1.1 million for the company’s chief executive and chief financial officer, respectively.

Span A Higher Than Span B for Funding Circle Sme Income Fund Limited (FCIF.L) (Williams Business Review), Rated: B

After a recent indicator scan, we have noted that Span A is currently higher than Span B for shares of Funding Circle Sme Income Fund Limited (FCIF.L). Traders may be paying close attention as this signal may indicate a possible bullish move.

TransferWise doubles its valuation to $ 3.5bn (Fintech Futures), Rated: AAA

UK-based international payments fintech TransferWise has doubled its value to $3.5 billion after raising $292 million in secondary funding, Jane Connolly writes.

Call for ‘credit curfew’ to help late-night borrowers (The Times), Rated: A

Banning borrowers from accessing high-cost credit websites between 11pm and 7am would ease the numbers of people spiralling into debt as activity peaks during these hours, according to researchers at Newcastle University.

Monzo hits 2m customers, adding 1m in eight months (AltFi), Rated: A

Monzo has hit 2 million current account customers in just two years since getting a banking license, and just eight months after it hit 1 million accounts.

It launched its current accounts less than 18 months ago with customers having spent £10.7bn through Monzo so far.

Arbuthnot Specialist Finance reveals offering (Bridging and Commercial), Rated: A

Arbuthnot Latham & Co has officially launched its specialist finance division.

Arbuthnot Specialist Finance will offer short-term residential finance up to 70% of market value (MV), with rates from 0.65% per month.

For this product, it will offer loans between £30,000–£3m-plus.

For commercial properties, it will offer up to 65% of MV, including interest and fees (up to 85% of the 90-day MV, or 95% of the purchase price, whichever is the lower), with rates available from 0.75%.

New peer-to-peer lender targets 7.5% return with education loans (Your Money), Rated: A

Lendwise plans to offer borrowers loans of up to £100,000, with interest rates ranging from 7.5% to 12%. Pricing will be based on a range of factors, which the peer-to-peer lender said go beyond the applicant’s financial profile and credit record. They include the specific postgraduate or professional qualification course they are taking, the length of study and the repayment period.

Finastra’s open cloud platform drives collaboration and innovation in financial services (Fintech Finance), Rated: A

Today ahead of its FusionONE developer conference, co-hosted with Microsoft, Finastra unveiled the latest developments to its FusionFabric.cloudopen platform for innovation.

The 61 new open APIs (and more than 200 Endpoints) span many of Finastra’s solutions, including retail and corporate banking (both enterprise and North American community markets), consumer lending and mortgage, payments and treasury and capital markets. These are now available in the FusionFabric.cloud API catalog for developers to harness in building financial services applications. Some of these powerful APIs are already enabling:

China

A fintech revenue surge helped Tencent smash quarterly expectations (Business Insider), Rated: AAA

Tencent posted record quarterly profits and smashed market expectations in Q1 2019, driven largely by surges in its fintech and cloud revenue, per Reuters.

Fintech and business services is now Tencent’s second largest division, responsible for a quarter of its revenue. This was the first time the tech giant broke out earnings for the unit, which brought in revenue of Rmb21.79bn ($3.2 billion), a 44% year-over-year (YoY) spike. Key in driving this growth is its payments wallet for WeChat, whose 1.11 billion users make it the largest social media platform in China, as well as its insurance services, which include a 20% stake in Aviva Hong Kong, and its cloud computing service.

Tencent’s online advertising grew 25% YoY, compared with 55% YoY in the same period last year, suggesting that China’s slowing economy and continued trade tensions with the US are hitting the firm.

Source: Business Insider Intelligence

DBS Bank Expects a Boost in Chinese P2P Lending Market from the Greater Bay Area (LearnBonds), Rated: A

Greater Bay Area could be the key to reviving the struggling P2P lending market in China, according to DBS Bank.

The Singaporean bank estimates that P2P lending will experience a 17% annual growth rate by 2030.

European Union

Identity technology and Dublin’s draw for fintech firms post-Brexit (Forbes), Rated: AAA

According to 

1 in 10 European banks to vanish by 2023 (AltFi), Rated: A

Bumper banking profits disguise an underlying weakness in traditional banks, as their per customer income has tumbled over the past decade.

That’s the finding of a report by consultants A.T. Kearney, which found data across 92 European banks revealed income per client had fallen 11% since 2008.

Australia/New Zealand

Commerce Commission’s court case against payday lender Ferratum scheduled for next year (Interest), Rated: AAA

A backlog of cases in the Auckland High Court means the next hearing in the Commerce Commission’s legal action against online payday lender Ferratum New Zealand won’t be held until June next year.

Asia

Indonesian fintech association sanctions lending platform that sets high interest rate (KrAsia), Rated: AAA

Two Indonesian lending platforms regulated under the country’s financial services authority (OJK) have been penalized by the ethics council of AFPI, the industry association for fintech lenders in Indonesia.

The organization revealed that one of the companies in question is P2P lender Do-It, which charged an interest fee rate of 1% per day.

Africa

Onefi is Expanding Carbon’s Digital Banking Services to Ghana (Technext), Rated: AAA

Nigerian digital financial platform, Carbon (formerly Paylater) is taking big steps to introduce its revamped financial services into Ghana. The online lender is looking to hire a new country manager for Ghana and this suggests the company is looking to introduce its new services like PayVest into Ghana.

Authors:

George Popescu
Allen Taylor

The post Thursday May 23 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 16 2019, Weekly News Digest

consumer debt

News Comments Today’s main news: iintoo picks the meat off the bones of RealtyShares. Kabbage, Affirm, SoFi among CNBC’s Disruptor 50. LendInvest cuts rates, product fees. Tencent profits, revenues surge. Pleo raises $56M. Prospa closing in on IPO. Paytm offers credit card. Today’s main analysis: LendingTree Personal Loan Offers Report. Is POS trend putting pressure […]

The post Thursday May 16 2019, Weekly News Digest appeared first on Lending Times.

consumer debt

News Comments

United States

United Kingdom

Asia

Other

News Summary

United States

This crowdfunding firm just picked the carcass of RealtyShares (The Real Deal), Rated: AAA

New York-based iintoo acquired RealtyShares’ assets, Inman reported. The move boosts the company’s portfolio size to $2.5 billion assets under management from $1 billion, according to the company.

Current and former investors in RealtyShares will be able to access iintoo’s crowdfunding platform, the report said. The deal — terms of which were not disclosed — is a joint venture between iintoo and Texas-based real estate firm RREAF Holdings, LLC, which will manage the investment porftolio.

Meet the 2019 CNBC Disruptor 50 companies (CNBC), Rated: AAA

14. Kabbage

Founders: Rob Frohwein (CEO), Kathryn Petralia (President), Marc Gorlin
Launched: 2009
Headquarters: Atlanta
Funding:
 $489 million
Valuation: $1.2 billion (PitchBook)
Key technologies:
 Artificial intelligence, cloud computing, machine learning
Industry: 
Credit, financial services, lending

26. SoFi

So far, 600,000 members, $30 billion in loans

33. Affirm

Founders: Max Levchin (CEO), Nathan Gettings, Jeff Kaditz
Launched: 2012
Headquarters: San Francisco
Funding:
 $800+ million
Valuation: $3 billion (PitchBook)
Key technologies:
 Machine learning, software-defined security
Industry: 
e-commerce, financial services, fintech

New LendingClub Account Performance – Q1 2019 (Lend Academy), Rated: AAA

In April 2018, LendingClub provided us with $5,000 to open a brand new account. Since then we have been chronicling the status of the account on a quarterly basis. Below are links to the full series of blog posts in chronological order:

Source: Lend Academy

Personal Loan Offers Report – April 2019 (LendingTree), Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 9.23% in April.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 9.23%, an increase of 13 basis points from the prior month and an increase of 188 basis points from the same period one year ago.
  • At $20,810, the average loan amounts offered with the best APRs to all borrowers with a score of 760 was up 0.33% ($69) from last month, and down 9.44% ($1,964) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had offered APRs of 5.15% on average, and loan amounts of $19,489. A borrower with this APR and loan amount would save $1,565 by consolidating debt with a 10% APR over a three-year term.

Is the Point-of-Sale Trend Putting Pressure on Plastic? (Markets Insider), Rated: AAA

The latest entrant to the credit market, point-of-sale loans, may be shaking up how consumers finance large purchases. According to the TransUnion (NYSE: TRU) Q1 2019 Industry Insights Report, this phenomenon, combined with the popularity of credit card reward programs, may be particularly taxing for the private label card category.

Year-over-Year Origination Growth

Card Type Q4 2018 Q4 2017 Q4 2016 Q4 2015 Q4 2014 Q4 2013
Private Label -5.5% -6.7% -3.8% -0.1% 4.1% 9.2%
 Bankcard 2.9% 0.1% -4.4% 15.1% 7.4% 18.1%

Q1 2019 Credit Card Trends

 

Credit Card Lending Metric

Q1 2019 Q1 2018 Q1 2017 Q1 2016
 Number of Credit Cards 432.8 million 416.5 million  405.8 million 386.4 million
Borrower-Level Delinquency Rate (90+ DPD)  1.89%  1.78%  1.69%  1.50%
Average Debt Per Borrower $5,554 $5,472 $5,332 $5,193
Prior Quarter Originations* 16.5 million 16.0 million 16.0 million 16.7 million
Average New Account Credit Lines* $5,296 $5,283 $5,262 $5,091

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Growth in Personal Loans Led by Super Prime Consumers

Personal loan balances continued to climb in Q1 2019, growing 19.2% year over year to a new high of $143 billion. Over the past four years total balances have nearly doubled, growing from $72 billion in Q1 2015. Growth is occurring across all risk tiers with originations increasing 9.7% to 5.0 million in Q4 2018.  Super prime borrowers had the largest growth on the origination front with an increase of 22.5% year-over-year, compared to 19.5% over the same period last year.

Q1 2019 Unsecured Personal Loan Trends

 

Personal Loan Metric

Q1 2019 Q1 2018 Q1 2017 Q1 2016
 Total Balances $143 billion $120 billion $102 billion $93 billion
Number of Unsecured Personal Loans  21.4 million 19.2 million 16.9 million 15.4 million
Number of Consumers with Unsecured Personal Loans  19.3 million 17.6 million 15.7 million 14.7 million
 Borrower-Level Delinquency Rate (60+ DPD) 3.47%  3.51% 3.72% 3.59%
 Average Debt Per Borrower $8,618 $7,986 $7,603 $7,544
 Prior Quarter Originations* 5.0 million 4.6 million 3.7 million 4.1 million
Average Balance of New Unsecured Personal Loans* $5,432 $5,044 $5,132 $5,077

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Credit Card Loan Performance (PeerIQ), Rated: AAA

US consumer credit grew by $10.3 Bn in March, at a 3.1% annualized rate, the slowest in nine months. Revolving credit outstanding decreased by $2.18 Bn indicating that consumers ended the quarter more cautious about borrowing. US GDP growth has been propelled by rising consumer spending and a slowdown could put a dampener on growth.

Source: Bloomberg, PeerIQ

30 and 90-day delinquency rates from credit card master trust data

Source: Bloomberg, Bank Credit Card Trust Data, PeerIQ

Declining Credit Enhancement in US MPL ABS is Unwarranted (Crowdfund Insider), Rated: A

Fitch is out with a report on marketplace lending (MPL) asset-backed securities (ABS) stating declining credit enhancement is unwarranted.

Fitch states that credit enhancement (CE) levels of ‘Asf’ category rated US MPL ABS have meaningfully declined since 2017, while asset quality remained relatively steady. As a result, bondholders of more recently issued transactions have less loss protection for the same amount of asset risk.

PeerStreet Reports Accelerating Growth as the Real Estate Platform Tops $ 2 Billion in Property Lending (Crowdfund Insider), Rated: A

This past March, PeerStreet, a real estate crowdfunding platform, announced that it had topped $2 billion in transactions and over $1 billion in Assets Under Management. Three months early in January, that transaction number stood at $1.7 billion. If that pace holds, PeerStreet should be nearing $3 billion in transactions by the end of the year thus firmly establishing itself as a leading property lending platform. While some sectors of real estate crowdfunding have struggled, PeerStreet does not appear to be one of them.

WealthStone Announces Real Estate Platform (Yahoo! Finance), Rated: A

WealthStone LLC announces the formation of its new real estate platform.

Typical investments require between $10 million to $100 million in total capitalization per project, including prudent leverage. These assets are expected to provide a total annualized return of 10% to 12%, including an annual cash dividend of 5% to 8% to the equity invested in its projects.

WealthStone aims to allocate approximately $300 million of equity capital for an estimated $700 million of total investments in a variety of real estate ventures during its current deployment phase.

Fintech seeks to help customers avoid overdrafts — with assist from a big bank (American Banker), Rated: A

The savings app provider Digit on Tuesday unveiled an instant withdrawals feature that will let users move money from their Digit account to their bank account instantly. This can help them meet emergencies and avoid incurring overdraft fees and resorting to payday loans.

Startup Launches To Combine All Of Your Credit And Debit Cards Into One Digital Card (Forbes), Rated: A

Forget checking your balance on your mobile phone. Startup Binji wants you to use your debit card instead.

In stealth mode for the past twelve months, the Irvine, California fintech is launching a debit Mastercard that enables consumers to consolidate as many as twenty-four credit cards and debit cards into a single account.

Connecting the Unbanked to A Friendlier Ecosystem (Cryptopolitan), Rated: A

P2P lending platforms like AssetStream are introducing significant improvements in the world of financing, which makes lending and borrowing friendlier and more easily accessible services.

How do We Empower a Growing Number of Small Enterprises? (Cryptopolitan), Rated: A

To be exact, if a company with relatively worse credit score applies for a large loan, let’s say $1 million, they’re more likely to be approved than a smaller, more trustworthy company that applied for a $100,000 on the same terms.

Data privacy, AI, regulation: Small-business lending is changing fast (American Banker), Rated: A

“We used to have 14,000 banks. When I started at the SBA, we were down to about 8- or 9,000 banks. Now we’re down to 5,000 banks.”

Much of the technology that is transforming how small-business lending gets done is coming from fintechs, and Mills sees “the next wave of the fintech evolution” as a partnership between these innovators and banks. “Particularly small banks,” she says.

Listen to the podcast here.

Goldman Sachs execs are opening up about their plans for Marcus (Business Insider), Rated: A

The bank has made more than $5 billion in consumer loans since making the first loan in October 2016. It has also attracted more than $46 billion in deposits.

Talwar’s comments may foreshadow the next phase of Marcus’ growth, which will center on three pillars:

1. Free financial-management software offered by Clarity Money, which was bought by Goldman last year and is likely to be rebranded at some point.

2. Direct-to-consumer products such as loan and deposit products, potentially in addition to wealth-management and insurance products.

3. Strategic partnerships.

Walmart Offers Even.com To Improve Employee Financial Health (Forbes), Rated: A

Although Even.com can let Walmart employees access their wages ahead of payday, that is its least important features, according to its CEO, Jon Schlossberg. For $8 a month — like many employees Walmart pays a share of the fee — it aims to improve financial wellness. It shows  users with a glance at a smart phone how much they have left to spend safely and helps them save for specific goals.

Millennials Are Helping to Sound the Credit Card Alarm (Bloomberg), Rated: A

First, the charge-off rate among card issuers in the first quarter increased to the highest level in almost seven years. The figure is effectively a gauge of “bad debt” — it reflects the percentage of loans companies have concluded will never be repaid. As Bloomberg News’s Jenny Surane noted last month, executives like Capital One Financial Corp. CEO Richard Fairbank chalked that up to the length of this economic expansion causing some negative credit events during the financial crisis to disappear from credit bureau reports, essentially making risky borrowers look stronger.

Crypto Startup Launches Bitcoin Term Deposit Offering 9% Annual Interest (CryptoGlobe), Rated: A

A Delaware-based cryptocurrency startup called BitLeague has recently launched a Bitcoin term deposit product designed to bring mainstream-like services to the crypto economy and attract new users.

The move was announced at Consensus 2019 and, according to a press release, the term deposit will offer 9% annual interest, with a lock-in period of 3 to 36 months.

Human Rights Watch Comment on CFPB Proposal (HRW.org), Rated: A

According to research by the Pew Charitable Trusts, approximately 12 million Americans take out payday loans and 2.5 million take out vehicle-title loans each year.[3] The short-term nature of these loans and their repayment structure drive about 80 percent of borrowers to re-borrow frequently and repeatedly pay fees to refinance their accumulated debt.[4]  The 2017 rule establishes logical baselines for consumer protection, including by requiring lenders to verify that borrowers have the ability to repay the loan and its associated fees prior to issuing a loan.

The vast majority, around 73 percent, of survey respondents reported household incomes under US$40,000, with an average of two children each, and nearly half had taken out a payday, auto title, or both types of short-term loans. People reported taking out loans most often to cover unexpected expenses, but also for their everyday expenses and groceries. More than half of those who took out a loan said they had trouble repaying their loans and associated fees.[8]

Fintech charter delayed following court ruling: Otting (American Banker), Rated: A

In a recent sit-down with American Banker, Otting said he no longer expects to have a fintech firm formally apply for the new special purpose bank charter in the second quarter of the year, after a federal judge ruled May 2 that the New York State Department of Financial Services could continue with its case to invalidate the charter.

Accomplished Human Resources Executive Joins Online Small Business Lender (OnDeck), Rated: B

OnDeck today announced the appointment of Deb Stroff as the company’s Chief People Officer.  Ms. Stroff will be responsible for leading all aspects of people strategy, including overseeing organizational design, total rewards, talent management, recruiting, leadership development and learning, as well as driving the talent agenda forward as OnDeck continues to grow in scale and complexity.

Roostify and Docutech Join Forces to Amplify the Consumer Experience (Roostify), Rated: B

Roostify announced the finalization of its integration with Docutech, a provider of document eSign, eClose and print fulfillment technology.

By joining forces with Docutech, Roostify consumers can now view, complete, and eSign documents, all within the Roostify platform.

CrowdStreet Appoints Award-Winning FinTech Innovator Donna Wells to its Advisory Board (Yahoo! Finance), Rated: B

CrowdStreet, Inc., a technology provider with an online marketplace for direct equity investment in commercial real estate (CRE), today announced the appointment of financial technology entrepreneur Donna Wells to its Advisory Board. The news comes on the heels of the company passing the $500 million threshold in total online investments with a record number of new individual investors.

Cadre Expands Executive Team, Appointing Sam Mischner as Chief Commercial Officer (Yahoo! Finance), Rated: B

Cadre announced today that Sam Mischner has joined the company in the role of Chief Commercial Officer. Mischner brings expertise in strategic sales and operational excellence to Cadre, where he will oversee marketing, sales, and operations.

LendingPoint CEO Chosen as Entrepreneur of the Year Finalist Southeast by EY (BusinessWire), Rated: B

LendingPoint is excited to announce that CEO and founder Tom Burnside was selected as a finalist for EY’s Entrepreneur of the Year Southeast. The program recognizes entrepreneurs in more than 145 cities around the world who demonstrate excellence and extraordinary success in areas such as innovation, financial performance, and personal commitment to their businesses and communities.

United Kingdom

LendInvest cuts rates and product fees (Mortgage Introducer), Rated: AAA

LendInvest has dropped its product fees and lowered interest rates for both of its 5-year fixed rate buy-to-let remortgage products for a limited time.  

The products will be available on standard property cases up to 75% loan-to-value and up to £250,000 in loan size.

The products are offered at an interest rate of 3.60%, with the ICR calculated at the pay rate, or at an interest rate of 3.49% with the ICR calculated at 5%. Both products will have zero product fee.

CapitalRise secures new institutional funding line to write larger loans (AltFi), Rated: A

Specialist property lending platform CapitalRise has secured a £30m institutional funding line from a major financial institutional investor, as it looks to expand its loan book.

The new £30 million facility was received from a UK bank, whose name is undisclosed.

OakNorth completes £30m loan-on-loan facility with Hilltop Credit Partners (Fintech Finance), Rated: A

OakNorth – the bank for entrepreneurs, by entrepreneurs – has completed its first finance deal with Hilltop Credit Partners, a specialist funding partner for small and mid-sized residential property developers and housebuilders.

The £30m loan-on-loan facility will be used to support the recently launched real estate development lending platform, led by Paul Oberschneider, who has more than 25 years of experience in property development and asset management. Backed by Round Hill Capital, a global real estate investment firm with a focus on macro-driven residential real estate investment strategies, Hilltop Credit Partners aims to help developers who know their local markets but need access to tailored financing solutions in order to fund their projects.

Crypto lending platform for business launches this month (Yahoo! Finance), Rated: A

London-based financial services firm Mode has announced its first product – a crypto-backed lending platform for businesses – will launch later this month.

The company is aiming to become the UK’s first fully-regulated digital-asset bank as it works on building an ecosystem of products and services designed to bridge the gap between digital and traditional finance.

The service is aimed at companies which hold Bitcoin and Ethereum – whether through direct purchase, investment, or as payment from clients.

How to Build Your Own Startup with Micro-financing? (Cryptopolitan), Rated: A

A report on This is MONEY shows that more than 50% of UK startups with less than 50 employees were rejected for bank loans. More so, 37% of SMEs are likely to give up their search for loans after their first approach is rejected.

P2P investing not always ‘high-risk’ (FT Adviser), Rated: A

Imagine an asset class where investor returns have been overwhelmingly positive every year since its inception and incredibly stable, hovering around the mid-single digits, without the rollercoaster of the stock market.

OakNorth completes £2.5m loan to multi-site specialist school, Cressey College (fe news), Rated: B

OakNorth completes £2.5m loan to multi-site specialist school, Cressey College, to support the groups growth strategy.

Finastra appoints Mark Miller as Chief Financial Officer (Virtual Strategy), Rated: A

Finastra has announced the appointment of Mark Miller as Chief Financial Officer (CFO) effective May 13, 2019.

Mark is a seasoned finance executive, with nearly 25 years of global technology, finance and operational experience. He has worked at several industry-leading companies including, most recently, Marketo, where he was CFO and travel technology firm Sabre Corporation, where he spent 18 years in a number of leadership and executive roles including CFO.

China

Tencent profit tops forecast as fintech and cloud revenues surge (Reuters), Rated: AAA

Tencent Holdings Ltd posted record quarterly profit on Wednesday, smashing market expectations, as the social media and gaming giant booked a rise in the value of its investments while fintech and cloud revenues helped make up for declines in games.

In the three months ended March, Tencent saw 17% growth in net profit to 27 billion yuan ($3.93 billion), beating the 19.4 billion yuan average of 13 analyst estimates compiled by Refinitiv.

Boosting profit was a 46% rise in “net other gains”, such as from investments, to 11.1 billion yuan. Revenue, however, came in just shy of analyst estimates at 85.5 billion yuan, with growth at an all-time low of 16%.

European Union

Business card management platform Pleo raises $ 56m (Fintech Futures), Rated: AAA

Fintech Pleo, the business spending platform based around smart company cards, has raised $56 million in a Series B financing round led by Stripes, a New York-based growth fund.

Pleo will use the funding round to more than triple its headcount, from 120 to 400 employees by the end of 2020 and to accelerate product development as it aims to service the entire purchase process for SMEs across the whole of Europe. This includes adding credit, invoices, mobile payments, a vendor marketplace, VAT reclaim and more.

International

More global banks commit to Finastra’s Fusion LenderComm (Realwire), Rated: A

Finastra has signed three global banks on its Fusion LenderComm platform as part of a coordinated campaign, including BNP Paribas, Natixis and Societe Generale. With NatWest, which joined recently, the ramp up signals a move towards a new era of efficiency in this complex space.

How to capture Gen Z spend (Drapers Online), Rated: A

In a survey, 58% told Klarna that they would pay more than $5 (£3.90) for one-hour delivery – if brands cannot compete, then consumers will take their custom elsewhere.

Leading the way in terms of sustainability, 72% said they would pay more for sustainably sourced products, 55% would abandon a purchase if it was not sustainable, and 83% said it is important that brands prove be “pro-equality”.

Klarna found that most of this generation still frequent the high street, and do so more than any other age group.

Australia

Prospa IPO books close; on track for June 11 listing (AFR), Rated: AAA

Investment banks Macquarie and UBS are set to underwrite Prospa’s $610 million sharemarket float after running a bookbuild to sell the shares.

The brokers closed the bookbuild at 2pm on Wednesday and funds were told the lead managers had secured enough support to raise the $110 million required for Propsa’s initial public offering.

Home loan discount frenzy drives bargains for borrowers (Mozo), Rated: A

Popular online lender Tic:Toc has launched a $1,000 cashback offer for all new customers, while competitor loans.com.au has dropped its variable rate below 3.50% to match Tic:Toc’s ultra low rates. Homestar has a competitive low rate plus fee waiver offer on the market, while Virgin Money is enticing new customers with Velocity rewards points.

India

India’s largest mobile wallet company Paytm now offers a credit card (TechCrunch), Rated: AAA

The firm, operated by One97 Communications, today unveiled Paytm First Credit Card with lofty benefits as it races to bulk up its financial offerings. The cards, issued by Citi Bank, will be the first in the country to offer unlimited, one percent cashback on purchases, Paytm claimed in a statement. The company is hoping to rope in about 25 million credit card customers in the coming months.

The penetration of credit cards remains very low in India with under 50 million peoplepossessing one.

SIDBI’s pilot scheme for fintech NBFCs to boost digital lending (Business Line), Rated: A

To give a fillip to digital lending, Small Industries Development Bank of India (SIDBI) has put together a pilot scheme to extend financial assistance of up to 10 crore to new-age fintech non-banking finance companies (NBFCs) engaged in financing small businesses and other income-generating activities.

Asia

P2P lending in Vietnam (krASIA), Rated: AAA

In Vietnam, where the economy is booming, approximately 79% of the population is unbanked. Without a banking account, it is almost impossible for people to access financial services such as insurance and loans. The phenomenon is called “financial exclusion.”

The country has an internet penetration rate of 67%, higher than the region’s average of 58%, and nearly three-quarters of the adult population owns a smartphone.

Vietnam is fertile ground for massive fintech adoption, particularly in peer-to-peer (P2P lending).

P2P Lending to Overcome Financial Exclusion (SME Magazine), Rated: A

The global P2P market is estimated to be worth US$490 billion in 2020. By then, Vietnam’s own P2P market is expected to be US$7.8 billion, almost doubling from US$4.4 billion in 2017 according to estimates by APAC-focused consulting firm Solidiance. Currently, there are over 40 P2P lenders operating within Vietnam; several of which are prominent due to their size and reach.

Innoven Capital pulls in USD 200 million from Temasek and UOB (krASIA), Rated: A

Singapore-headquartered venture debt firm Innoven Capital received an additional USD 200 million in funding from its shareholders – Temasek Holdings and United Overseas Bank (UOB). The firm said it’s doing this in anticipation of the massive potential that Asia’s venture debt space offers.

Canada

Koho Secures $ 42M in Series B Funding (Finsmes), Rated: AAA

Koho, a Toronto, Canada-based fintech company that provides Canadians with a mobile current account and Visa card, closed a $42m Series B funding round.

Authors:

George Popescu
Allen Taylor

Business card management platform Pleo raises $56m

The post Thursday May 16 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 2 2019, Weekly News Digest

fintech deals india china

News Comments Today’s main news: OnDeck publishes Q1 financial results. LendingClub to move 350 jobs out of San Francisco to Utah. Salary Finance picks SoFi co-founder Dan Macklin as CEO. Klarna rolls out payment plans for physical stores in UK. HeZhong International sets terms for IPO. India tops China as Asia’s top fintech funding source. Today’s […]

The post Thursday May 2 2019, Weekly News Digest appeared first on Lending Times.

fintech deals india china

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

OnDeck Reports First Quarter 2019 Financial Results (PR Newswire), Rated: AAA

OnDeck today announced first quarter 2019 net income of $5.9 million, Adjusted Net Income of $8.3 million and gross revenue of $110.2 million.

Net income was $5.9 million, or $0.07 per diluted share, and decreased from the prior quarter’s net income of $14.0 million, 0.18 per diluted share, primarily due to higher loan loss provision, higher operating expenses and an accrual for income taxes.  Net income significantly improved from a loss of $1.9 million, or $0.03 per diluted share, in the year-ago period reflecting higher interest income from asset growth.

Adjusted Net Income was $8.3 million, or $0.10 per diluted share, and decreased from $15.9 million, or $0.20 per diluted share, in the prior quarter and increased from $6.4 million, or $0.08 per diluted share, in the year-ago period, reflecting the  aforementioned drivers.

Loans grew 3% sequentially and 19% from a year ago to $1.2 billion. Originations were $636 million, down from $658 million in the fourth quarter and up 8% from $591 million in the year-ago quarter.  The annual growth was broad-based with increases from both domestic and international operations as well as in both term loan and line of credit offerings. The average term loan size was unchanged sequentially at $53 thousand and was down from $58 thousand a year ago. Unit volume decreased 5% sequentially and increased 15% from the year-ago quarter.

Gross revenue was $110.2 million, essentially unchanged from the prior quarter, and up 22% from the year-ago quarter driven by higher interest income. Loan Yield of 35.6% decreased from 36.6% in the prior quarter reflecting a decline in portfolio performance while pricing was generally stable, and was unchanged from the year-ago quarter.

Interest expense of $11.3 million was essentially unchanged sequentially and decreased from a year ago despite a higher debt balance as borrowing rates improved. The Cost of Funds Rate continued to improve to 5.4%, a 20 basis point sequential improvement and a 140 basis point improvement from the year-ago quarter, as we refinanced debt at lower costs. First quarter financing activity included the extension and upsizing of four debt facilities aggregating to $595 million with improved terms.

Net Interest Margin was 29.5%, down from 30.0% the prior quarter as lower asset yields more than offset the impact from improved borrowing costs.  The increase in Net Interest Margin from 27.8% in the year-ago quarter was driven by improved borrowing costs.

Provision for loan losses increased to $43.3 million and the Provision Rate increased to 6.8%. The 15+ Day Delinquency Ratio increased 120 basis points sequentially to 8.7%.  Approximately half of the increase was in loans 15-89 days delinquent reflecting credit testing and economic trends, and the balance was in loans 90-days or more delinquent reflecting the change in our collection strategy for late-stage delinquencies. The Net Charge-off Rate increased to 12.2% and remains near the low end of our 12%-14% target range. The Reserve Ratio increased 30 basis points sequentially and 50 basis points from a year ago to 12.5%, reflecting portfolio quality trends and a higher proportion of 90-day plus delinquent loans, which have higher reserves.

Operating expenses increased from the comparable periods to $48.3 million, reflecting growth in the business and investments in our strategic initiatives, primarily technology and analytics. The Efficiency Ratio was 43.8%, up from 41.1% the prior quarter but improved from 49.3% in the year-ago quarter, while our Adjusted Efficiency Ratio* of 41.0% increased from 39.4% in the prior quarter and 40.1% in the year-ago quarter.

Provision for income taxes was $1.7 million compared to zero in 2018 when taxable income was completely offset by operating loss carryforwards. The effective tax rate was 24% and reflected a 21% U.S. federal rate, local and state income taxes, and losses in international subsidiaries.

Total assets increased 5% sequentially and 18% from a year ago to $1.2 billion primarily reflecting loan growth. Cash and cash equivalents was unchanged from year end at $60 million and decreased from $70 million a year ago. Other assets and other liabilities increased over the comparable periods as we recorded a net $28 million right-of-use asset in other assets and an equivalent increase in other liabilities stemming from the adoption of a new lease accounting standard. The 3% sequential increase in debt to $842 million was consistent with the growth in loans.

Total OnDeck stockholders’ equity of $309 million increased $10 million, or 3%, from year end and $45 million, or 17%, from a year ago.  Book value per diluted common share outstanding of $3.89 increased from $3.77 at year end and $3.40 a year ago.

Food Truck Satisfies as OnDeck Small Business of the Month (Yahoo! Finance), Rated: B

OnDeck today announced that Me So Hungry, a food truck business based in California, is its Small Business of the Month for April 2019. Owned by brothers Cory and Mike Ewing, Me So Hungry is the first food truck business to receive the OnDeck recognition.

LendingClub to slash San Francisco office, move 350 jobs to Utah (Mercury News), Rated: AAA

LendingClub, the online-loan marketplace, plans to wind down customer support operations in its home city of San Francisco and shift staff to Utah as it seeks to trim costs.

In an internal memo to staff reviewed by Bloomberg, Chief Executive Officer Scott Sanborn said LendingClub aims to have its teams completely out of San Francisco by December.

About 350 jobs will shift to Lehi, Utah, where LendingClub recently opened a new office.

SoFi Co-Founder Steps Back Onstage with Salary Finance (newKerala), Rated: AAA

Salary Finance announces SoFi co-founder Dan Macklin will be joining as CEO, Salary Finance Inc. (the US arm of the group).

Strong GDP Growth Continues (PeerIQ), Rated: AAA

Source: Bloomberg, PeerIQ

LendingTree Study Finds Tesla Drivers Have Highest Average Credit Scores (Yahoo! Finance), Rated: AAA

LendingTree today released its study ranking car brands by their buyers’ average credit score. Tesla buyers have the highest with a score of 740. Chrysler buyers have the lowest scores, with an average score of 656.

Key findings

  • Luxury brand buyers occupied the top spots. TeslaPorsche and Lexus lead with average credit scores of 740, 727 and 699 respectively.
  • Chrysler buyers had the lowest average credit score at 656, but it’s worth noting that this still falls in the “fair” range. It’s also right around the average credit score for all used car purchases.
  • For most auto makes, a credit score in the good range (670-739) was enough to be approved for an auto loan. Of the 30 different makes analyzed, 22 had an average approved credit score fall into that range

Read the full report here.

Understanding Sequential Pay Structures (DBRS), Rated: AAA

In a January 2019 newsletter, DBRS discussed the Evolution of the Shifting Interest Structure in residential mortgage-backed security (RMBS) transactions. Another common structure in RMBS transactions is the sequential pay structure.

The sequential pay structure is one of the most elementary and straight-forward structures in RMBS. Post-crisis, the sequential pay structure and its variations have been widely used in seasoned re-performing loan (RPL) and non-Qualified Mortgage (QM) transactions. Such structure largely benefits the senior classes in payment priorities over the subordinates.

Source: DBRS

Read the full report here.

Finitive Raises $ 6 Million Series Seed Round Led By Atomic Labs (PR Newswire), Rated: A

Finitive (www.finitive.com), a financial technology platform providing institutional investors with direct access to alternative lending investments, announced today that the firm raised approximately $6 million in a series seed financing. The round was led by Atomic Labs with participation from Ninepoint Partners – one of Canada’s leading private credit fund managers – as well as other investors and members of the management team.

Goldman Sachs, Regions help raise $ 55M for construction-lending fintech (American Banker), Rated: A

Built Technologies, a construction lending fintech platform, has raised $55 million in funding through Goldman Sachs and a handful of investors including Regions Financial, the company said Monday.

The Nashville, Tenn., company finished $31 million in series B funding through Goldman Sachs with the remainder amount raised by venture capitalists and Regions. The funding will help the 5-year-old fintech invest in research and development while building out its national client base, according to the firm’s CEO and co-founder, Chase Gilbert.

A busy month for fintech funding (American Banker), Rated: A

Novo, a challenger institution in the field of small-business banking, and the no-code platform provider Unqork held Series A funding rounds.

The online lender Upstart, which raised $50 million in a Series D round, says it can both lower loan loss rate and increase the number of customers underwritten.

Extend is building a platform to distribute digital cards by partnering with payment networks and card issuers. Another startup, MotoRefi, claims it can save consumers an average of $100 a month on vehicle refinancing by connecting them to trusted credit unions and community banks.

Moving Beyond Financial Literacy to Financial Empowerment (Lend Academy), Rated: A

Some of my thinking was prompted by this recent column in American Banker by Jennifer Tescher, the CEO of the Center for Financial Services Innovation (CFSI).

There are several companies in this space doing great work in creating high quality products: EvenPayActivTrueConnect and HoneyBee all offer options to employers that help their employees who need access to quick financing. Even has a groundbreaking deal with Walmart that has resulted in 300,000 employees using their pay advance app.

MoneyLion has four million users and they are focused on ending financial stress for all Americans by taking a holistic approach and being proactive in providing help. Dave helps the 30 million people who are hit by overdraft fees each year by advancing $75 from their next paycheck. Tally is a fully automated debt manager to help consumers get out of credit card debt.

Inside Varo Money’s three-year quest for a bank charter (American Banker), Rated: A

Just ask Colin Walsh, the co-founder and CEO of Varo Money, who began discussions with regulators three years ago to charter a national bank. Though the fintech won approval from the Office of the Comptroller of the Currency last year to move forward, it is still waiting on an answer from the Federal Deposit Insurance Corp.

Cross River Teams Up With RS2 To Offer New Digital Banking Experience (Crowdfund Insider), Rated: B

Cross River, a bank that delivers advanced financial and compliance products/services to the fintech industry, announced on Monday it has teamed up with RS2 to offer a new digital banking experience. Through the collaboration, Cross River and RS2 will provide merchants with a global payment experience for processing credit and debit card transactions, as well as digital banking for their workers and consumers.

Blend’s Erin Collard: Mortgages are the data superset of every other financial product (Tearsheet), Rated: A

Financial technology company Blend began building its platform by helping traditional institutions digitize mortgages, working with firms like Wells Fargo, US Bank and some regional banks and credit unions.

New York launches its own ‘mini CFPB’ (American Banker), Rated: A

New York has created a statewide financial protection division that will focus solely on corporate compliance and consumer issues, following similar efforts by New Jersey and Pennsylvania.

The New York State Department of Financial Services on Monday named Katherine A. Lemire, a former assistant U.S. attorney, to be executive deputy superintendent of the agency’s newly created Consumer Protection and Financial Enforcement division.

Think Finance to Pay CFPB $ 7 for Loan Violations (Bloomberg Law), Rated: A

A bankrupt payday lender will have to pay a $7 civil penalty to the Consumer Financial Protection Bureau over nearly $50 million in loans it issued in states where they were not legal, according to bankruptcy court filings.

Judge Brian Morris of the U.S. District Court for the District of Montana granted a stay in the CFPB’s litigation against Think Finance LLC on April 30, pending activity in the bankruptcy court.

Capital One drives auto finance deal with CarGurus (Finextra), Rated: A

CarGurus today announced a partnership with Capital One Auto Finance that will benefit both consumers and dealers.

The Most Powerful Women in Banking (American Banker), Rated: A

Camille Burckhart, Popular Inc.

Chief information and digital officer

Jacqueline Howard, Ally Financial

Senior director, corporate citizenship

Carrie Lichter, Fifth Third

Chief operational risk officer

Now you can pay for your flights in instalments with these booking companies (Lonely Planet), Rated: A

Online travel apps CheapOair and OneTravel will soon operate a new feature that allows customers to pay for their airfare in instalments. It means that customers don’t have to pay for the full cost of their flight upfront and can instead spread the cost out into more manageable payments that suit individual budgets, choosing between three-, six- or 12-month instalments. Fareportal, the company that operates CheapOair and OneTravel, said its partnering with online lender Affirm to introduce the new feature.

For example, a $300 (£230) purchase at 10% APR spread out over three months would cost $101.69 (£78) per month.

A recent study by the U.S. Chamber of Commerce revealed that Mississippi, Nebraska and Maine are the three states where small to medium businesses have grown the most year over year. This is according to sales in Amazon stores, specifically. More than half of the items sold in Amazon stores are from small to medium businesses.

The top 10 fastest-growing states breaks down as follows:

  1. Mississippi
  2. Nebraska
  3. Maine
  4. Texas
  5. Indiana
  6. Colorado
  7. North Dakota
  8. Vermont
  9. Wisconsin
  10. Missouri

The third-party physical product sales, which is what gets sold on Amazon stores primarily, passed $160 billion in 2018. Nearly 20% of rural small businesses generate 80% of their revenue by selling products online.

Unlocking the Digital Potential of Rural America (American Innovators), Rated: AAA

Unlocking the digital potential for rural small businesses across the country could add $47 billion to the U.S. GDP per year.

Increased adoption could grow annual revenues of rural small businesses by more than 21% over the next three years – the equivalent of $84.5 billion per year – with states in the South seeing the greatest benefit

Online tools and technology have the highest potential impact on rural small businesses with revenue under $100,000

Read the full report here.

Proof of Work: the slow but steady process of institutional adoption (The Block), Rated: A

Antonio from dYdX

dYdX is a decentralized exchange for margin trading, borrowing, lending, and eventually derivatives. dYdX allows traders to trustlessly short and get leverage on crypto assets.

  • DAI lending rate has been high due to strong demand to go leveraged long on ETH, peaking at over 77% APR returns for lenders over the weekend

Brendan from Dharma

Dharma is the easiest place to borrow and lend cryptocurrencies. It enables non-custodial peer-to-peer lending through smart contracts on Ethereum.

  • #ReFi with #DeFi continued in full force, leading to over 1.7m in borrow volume (nearly all Dai-denominated)

Lendio Franchise Opens in Erie to Expand Access to Capital for Local Businesses (Lendio), Rated: B

Lendio has announced the opening of a new Lendio franchise in Erie. Through the Lendio franchise program, John Fee, a local business owner himself, will help other entrepreneurs in the community apply for loans, review their options and secure funding, easing their financial hurdles.

Fundbox Selected By Brandwise To Power Net Terms For Suppliers, Agencies, And Retailers (Yahoo! Finance), Rated: B

Today Fundbox announced that the sales technology leader Brandwise and Fundbox have entered into an exclusive agreement whereas Fundbox will be Brandwise’s business-to-business (B2B) trade financing partner.  Brandwise will leverage Fundbox’s business capital platform to power financing terms within the Brandwise ecosystem of 250,000 retailers.

White Oak Commercial Finance Adds to its ABL Originations Team (Yahoo! Finance), Rated: B

White Oak Commercial Finance, LLC (“White Oak”), an affiliate of White Oak Global Advisors, LLC, announced today the appointment of Michael Goletz to Director of ABL Originations, covering the Midwest U.S. region. Mr. Goletz joins from WNB Specialty Finance, a division of Woodforest National Bank, where he was responsible for sourcing and structuring asset-based lending debt facilities ranging from $5 million to $25 million.

Urjanet Announces 2019 SPARK Award Winners (PR Web), Rated: B

Urjanet, the global leader in utility data aggregation, today announced the winners of its 2019 SPARK Awards: AvidXchange, Bright Power, SimpleBills and Guppy – four companies at the forefront of using utility bill data to better serve their customers, community partners, and the environment.

  • Most Innovative Use of Utility Data: SimpleBills. In addition to utility bill management, residents can use SimpleBills to report their utility bill payment history to credit bureaus through a unique opt-in service.
  • Leader in Financial Inclusion: Guppy. Through its partnership with Urjanet to acquire user-permissioned utility data, Guppy enables greater access to financial services for consumers, as well as background and ID checks for businesses, all while keeping the end user in control of their own data.
United Kingdom

Klarna gets physical: All UK payment methods now available in-store (Fintech Finance), Rated: AAA

Global payments provider Klarna has today announced that all its alternative payment options are available both in-store as well as online.

Klarna’s alternative payment options include:

  • Shoppers can pay later, up to 30 days after delivery of goods
  • Shoppers can pay for purchases in 3 equal instalments collected monthly
  • For higher-ticket items, consumers can use Klarna’s consumer finance in 6-36 month payment plans

£1bn debt fund launched for UK non-bank lenders (P2P Finance News), Rated: A

EUROPEAN Risk Capital (ERG) has launched a £1bn multi-client debt programme for UK-based, mid-market non-bank lenders.

The programme – titled ‘CreditStream’ – has a minimum deal target size of £10m, making it primarily suited to mid-sized lenders including bridging and development lenders, second charge mortgagees, consumer and SME funders, auto/equipment finance companies, and fintech lenders. The maximum deal size can be in excess of £100m.

Lendy execs launch wage advance firm (P2P Finance News), Rated: A

Companies House documents show Brooke and Kelly, whosecurrent role at Lendy remains a mystery, set up a firm called Copious Capital in July 2018.

Copious Capital’s launch product is Pay Me Today, described as an “antidote to payday lending,” which lets companies approve and arrange salary advances for staff who need access to money before payday.

Lendy’s operations manager Pamela Guillamón owns between 25 per cent and 50 per cent of Pay Me Today, according to Companies House documents.

Woodford’s peer-to-peer exodus continues with VPC sale (Citywire), Rated: A

Fund manager Neil Woodford has followed his £88 million sale of his stake in peer-to-peer lending trust P2P Global Investments (P2P) by offloading his entire £40 million stake in rival VPC Specialty Lending (VSLV).

Relendex ‘very keen’ to get behind modular housing (Development Finance Today), Rated: A

Relendex is “very keen” to get behind modular housing, according to its chief operating officer Max Lehrain.
Development Finance Today recently reported on the difficulties lenders faced when funding modular builds, however Fintan explained some ways Relendex was able to feel comfortable with supporting such schemes.

OakNorth continues supporting British SMEs with senior lending hires (Fintech Finance), Rated: B

OakNorth – the bank for entrepreneurs, by entrepreneurs – is bolstering its regional presence with the appointment of four senior team members in Manchester, the Midlands and the South West.

Christopher Swarbrick, who has 18 years’ banking experience, joins as a Senior Director, Debt Finance. 

Christopher Richards joins from RBS where he spent 11 years and most recently held the role of Senior Relationship Manager, managing a portfolio of 40 complex banking relationships.

Mother tells of ‘devastating’ impact caused by collapse of Eridge firm London Capital & Finance (Times Local News), Rated: B

THE mother of two sons, one of whom is autistic, has told of the impact on their lives brought about by the collapse of a Tunbridge Wells based investment firm.

Around 11,500 people are set to lose a total £237million following the demise of the company based at Eridge Park.

LCF were selling unregulated mini-bonds, offering investors an eight per cent return for money that was purportedly being lent to a range of businesses.

China

HeZhong International sets terms for $ 5 million US IPO (Nasdaq), Rated: AAA

HeZhong International Holding, which operates a peer-to-peer lending marketplace in China, announced terms for its US IPO on Wednesday.

The Shenzhen, China-based company plans to raise $5 million by offering 1.3 million shares at a price of $4. At $4, HeZhong International Holding would command a market value of $55 million.

European Union

Which digital banks have the best overdrafts? (AltFi), Rated: AAA

Starling Bank

The London-based challenger bank charges 15 per cent equivalent annual rate for arranged overdrafts.

Charges £2 a month for unarranged overdrafts as well as the standard rate of interest. Will waive charges if your monthly overdraft interest comes to less than 10p for the month. Operates a monthly fee cap of £2.

Runner up

Monzo

Customers with arranged overdrafts are charges a 50p charge every day your account is overdrawn by more than £20, up to a maximum charge of £15.50 a month.

The Rest

B

The digital lender, launched by Clydesdale and Yorkshire Banks in 2016, charges a 12.5 per cent equivalent annual rate on arranged overdrafts. On top of this it charges a fee of £6 a month. The bank charges £6 a day for unarranged overdrafts.

N26

The Berlin-based app-only bank, with more than 2 million customers in 24 countries, said it will launch an overdraft facility for its 200,000 UK account holders “soon.”

55 Investors Become the Co-Owners of a Building in Western Switzerland (Yahoo! Finance), Rated: A

Foxstone (www.foxstone.ch) announces the acquisition, in crowdinvestment, of a residential building in Concise (VD) by 55 investors, of all ages and all backgrounds. They acquired a share of the building in co-ownership with a minimum amount of CHF 50’000.-

The total amount raised in co-ownership was CHF 3,250,000 for an acquisition price of the building of CHF 6,800,000, the remaining balance being financed by a mortgage. The net return on equity is 6.53%, which represents an annual return of CHF 3,265 for a CHF 50’000 investment. The Régie du Rhône takes care of the day-to-day management of the building.

How BBVA overhauled its mobile banking app (American Banker), Rated: A


International

Global fintech investment doubled in 2018 (HousingWire), Rated: AAA

Total global fintech investment increased from $50.8 billion in 2017 to a full $111.8 billion in 2018, according to KPMG’s The Pulse of Fintech, a biannual report that highlights key trends in fintech across the globe.

But the report showed something interesting when it comes to fintech – payments and lending continued to attract the most significant investment dollars globally.

China’s fintech funding dipped significantly in Q1 2019 (Business Insider), Rated: AAA

Global fintech funding was down 13% from $7.3 billion in Q4 2018 to $6.3 billion in Q1 2019, according to a new report from CB Insights.

However, deal numbers increased from 427 in Q4 2018 to 445 in Q1 2019, despite early stage funding dipping, while mid- and late-stage funding increased. Moreover, funding actually ticked up 1.5% year-over-year (YoY) from $6.2 billion in Q1 2018.

P2P Industry is Likely to Shine Despite Troubles in China (Learn Bonds), Rated: A

According to a PWC report, the U.S. P2P market is likely to reach $150 billion by 2025. Another report from Allied Market Research indicates that Peer to Peer (P2P) market could grow at a CAGR of 51.5% from 2016 to 2022.

Efma White Paper Covers Potential of SME Ecosystem (Monitor Daily), Rated: A

Drawing insight from recent research, case studies and observations from bankers working closely with SMEs, this digest outlines the main challenges facing banks today when trying to attract SME customers, such as intense competition from new entrants like Alibaba-backed online lender MYbank and Tencent-backed WeBank in China. In other markets, like the UK, 63% of financial services players in 2018 didn’t exist a decade before.

Authors of the 2019 Geneva Report on the World Economy seek market participant input (Fintech Policy), Rated: B

The topic of this year’s Geneva Report on the World Economy will be “the future of banking.”

The authors of the report (Kathryn Petralia, Kabbage; Thomas Philippon, NYU Stern School of Business; Tara Rice, Bank for International Settlements and Nicolas Veron, Peterson Institute for International Economics and Bruegel) are asking for input from market participants.

Asia

India unseats China as Asia’s top fintech funding source (TechCrunch), Rated: AAA

China’s massive fintech industry took a beating in recent months as the government continued to wind down online lending nationwide, rattling investor confidence.

Funding for fintech startups shrank 87.6 percent year-over-year to $192.1 million during the first quarter of 2019, a new reportfrom data provider CB Insights shows. India, which recorded $285.6 million raised for fintech startups in the period, overtook China to be Asia’s top fundraising hub for financial technology. Both countries clocked in 29 fintech deals, suggesting a cooling investor sentiment in China which saw its height of 76 deals just three quarters ago.

Source: CB Insights
India

Coming Together of Traditional Lenders and Fintech Players, Creating Better Opportunities (Entrepreneur), Rated: AAA

Fintech driven alternative lending is the second most funded and one of the fastest growing segments in the Indian fintech space. At last count, there were over 20 plus digital, alternative lending companies, each with their version of the truth, and probably another twenty in the stealth mode.

One thing common with most new age lending companies is that they rightly understand that they have a better chance of succeeding by collaborating with the existing lenders like Banks and NBFCs.

Canada

MOGO: A Rapidly Growing Canadian Fintech Provider (Yahoo! Finance), Rated: AAA

Mogo (MOGO) is a rapidly growing Canadian fintech company with over 800K members that generates revenues from a series of innovative products to help consumers manage & control their financial health.

  • Mogo is a high growth disruptor. Was the company not fighting the headwinds of strategically exiting the short-term loan business that it phased out throughout 2018, it would have shown 71% revenue growth on what it calls “core revenues” or revenues of continuing operations. Core revenue, excludes the company’s legacy short term lending revenue which Mogo fully exited at the end of Q3 2018. In 2018, the company generated $61 million in total revenues representing 26% growth, spurred by a doubling of its subscription and services business to $27 million. In the most recently reported quarter, Q4 2018, Mogo’s core revenue increased 75% versus the same period in 2017 with Subscription & Services revenue having its fourth consecutive quarter of at least 100% year over year growth. In 2018, it added more than 210,000 new members to reach 756,000 members on December 31, 2018 (up 39%), and on March 21st it announced it has surpassed 800,000 members.
  • Based on a combined value of the company’s lending business and its subscription services and fee generation business we believe the company is worth $7.67 per share when compared with other companies in these spaces.
Africa

The Legal and Regulatory Framework Governing Financial Technology (Fintech) in Nigeria (Lexology), Rated: AAA

FinTech is also gaining traction in the areas of lending and alternative financing (such as peer-to-peer lending, business-to-consumer lending, and so on), as well as financial and insurance products.

Pursuant to the Banks and Other Financial Institutions Act, Chapter B3 LFN 2004, an entity that wishes to provide marketplace lending may do so by registering as a bank or Other Financial Institution (“OFI”).

The use of airtime for the repayment of loans to a mobile lender could constitute a premium rated service, the provision of which requires the approval of the NCC.

Authors:

George Popescu
Allen Taylor

The post Thursday May 2 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 31 2019, Weekly News Digest

fintech vc 2018

News Comments Today’s main news: Kabbage expands into India. GreenSky launches loan product for elective health care. Lending Works hits 150M GBP in loans in five years. Ant Financial’s money market fund shrinks to two-year low. Ant Financial raised close to combined raise of all U.S., Europe fintechs last year. Varo Money raises annual percentage yield on savings accounts to […]

The post Thursday January 31 2019, Weekly News Digest appeared first on Lending Times.

fintech vc 2018

News Comments

United States

United Kingdom

International

India

Other

News Summary

United States

GreenSky launches new loan product for elective health care (American Banker), Rated: AAA

The Atlanta fintech on Tuesday announced the launch of a revolving credit line of up to $25,000. GreenSky previously offered only installment loans; the new product is designed to be a better fit for elective medical providers that rely heavily on repeat business.

Is SoFi Money the Bank Account of the Future? (Lend Academy), Rated: AAA

There are three main benefits that SoFi touts with the SoFi Money account:

  1. Pay zero account fees.
  2. Earn more interest.
  3. Free ATMs everywhere.

SoFi will pay (as of this writing) 2.25% on balances held in a SoFi Money account. Note about the small print: you will only earn this 2.25% for the first three months and then the interest rate drops to a (still respectable) 1.25% unless you do one of two things. Either setup a salary direct deposit of $3,000 or more a month or do $500 in debit card transactions each month. I am in the process of moving my salary deposit to my SoFi Money account.

The cash balance in SoFi Money Accounts is swept to one or more program banks where it earns a variable rate of interest and is eligible for FDIC insurance. FDIC Insurance is not provided until the funds arrive at partner bank. There are currently six banks available to accept these deposits, making customers eligible for up to $1,500,000 of FDIC insurance (six banks, $250,000 per bank).

Mixed Credit Card Issuers’ Earnings (PeerIQ), Rated: AAA

Credit card master trust data shows that delinquencies have picked up from their lows but remain significantly below their peaks. Issuers (with the exception of Capital One), have increased loan loss reserves at a rate higher than loan growth as credit renormalization continues.

30 and 90-day delinquency rates from credit card master trust data

Source: Bloomberg, Bank Credit Card Trust Data, PeerIQ

How online platforms shook small-business lending in America (Financial Times), Rated: AAA

In the years after the financial crisis, small businesses that needed credit were stuck. New capital rules discouraged big banks from touching any borrower perceived as risky. The bond and loan markets, where larger businesses flocked for inexpensive debt capital, have little use for sums under $100,000 — which is what most small enterprises need.

A handful of non-bank lenders, payment and e-commerce companies have leapt into the gap. In an environment of easy money and economic expansion, small business lending operations at OnDeck, Kabbage, PayPal, Square and others have grown fast.

LendingTree Analysis Reveals How Personal Loan Purposes Vary by States and Credit Scores (PR Newswire), Rated: AAA

Key takeaways

  • Managing existing debt is far and away the most popular reason for a personal loan, representing 61 percent of all loan requests in 2018. Thirty-nine percent of borrowers plan to use their loans to consolidate debt, and 22 percent plan to use it to refinance credit cards.
  • Consumers seeking personal loans to manage debt also requested the highest origination amounts: $14,107average amount for credit card refinance, and $12,670 for debt consolidation.
  • Almost 15 percent of loans reasons are categorized as “other” — the third most popular choice. Home renovation and improvement loans are the next-most popular loan purpose, accounting for 7.7 percent of loan requests with an average loan amount of $12,384.
  • New Englanders are the most likely to use their loans to manage existing debt, taking the top five spots. The residents of MississippiLouisiana, and Arkansas are the least likely.
  • Washington, D.C. is home to the highest rates of a few offbeat loan purposes, with more residents requesting loans here for a move (7.4 percent) or business (2.6 percent). It’s also tied with New York and Louisiana as the place where wedding loans are most requested, with 1.5 percent of loans in these states intended to cover the costs of tying the knot.
  • West Virginia is the top state for borrowers requesting loans for their home, specifically home improvements (8.6 percent of loans requested in this state) or home buying (4.9 percent).
  • In Wyoming, residents request personal loans for medical expenses more than anywhere else (6.5 percent). In fact, most of the states where people are more likely to request a loan for medical costs are low-density states with more rural areas.
Source: LendingTree

See the full report here.

Cities Where Homeowners Stay Put the Longest (LendingTree), Rated: AAA

  • Cities with shorter housing tenure have greater price appreciation. The top 10 cities had an average tenure of 7.46 years and an average three-year home price appreciation of 12%. The bottom 10, with an average tenure of 6.63 years, have average price appreciation 30%. This suggests that higher housing turnover drives prices upwards, while faster price appreciation could be enticing home owners to sell.
  • The northeast dominates the list of cities with the longest tenure. The top three cities, Pittsburgh, New York and Buffalo are all in the northeast. An additional three northeastern cities are in the top 10 for a total of six.
  • Hot and sunny places have the shortest tenures. The three cities with the shortest tenures — Las Vegas, Phoenix and Austin — are all in warm-weather areas. This reflects high migration rates to those cities, something we looked at in a prior study on where Americans are moving. Denver is the only city in the bottom 10 that experiences a significant winter season.

A George Soros-backed fintech has raised millions to analyze consumer loan trends just as recession worries pick up steam (Business Insider), Rated: A

dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01’s board.

Kabbage hires chief revenue officer from LegalZoom (Biz Journals), Rated: A

Atlanta-based Kabbage Inc. has hired the chief marketing officer at LegalZoom as its new chief revenue officer.

Laura Goldberg‘s appointment is effective immediately, according to a Kabbage spokeswoman. She succeeds Victoria Treyger, who vacated the CRO position at Kabbage in August 2018 to accept a position with Felicis Ventures.

Varo Raises Annual Percentage Yield on Savings Account to Industry-Leading 2.80% (PR Newswire), Rated: AAA

In a move to make high-yield savings available to more Americans, no-fee mobile banking company Varo Money, Inc., announced today that it raised the Annual Percentage Yield (“APY”) on its FDIC-insured Varo Savings Account to 2.80% for customers whose Savings Account balance is $50,000 or less, and who have qualifying direct deposits and debit card purchases from their Varo Bank Account.1 An APY of 2.12%1 will apply if these conditions are not met.

Elevate’s RISE Brand Announces Scholarship to Promote Financial Literacy (BusinessWire), Rated: A

Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that its largest consumer product, RISE, will offer college scholarships in an effort to promote financial literacy.

The RISE scholarship will offer five $5,000 awards each year to students who demonstrate a desire to improve their financial knowledge and educate others on personal finance. To be eligible for the scholarship, students must complete an online financial literacy course that was developed in partnership with digital education expert EVERFI.

Credit card player Petal picks up $ 30m funding (Fintech Futures), Rated: A

New York-based credit card firm Petal is back in the money with $30 million in Series B funding.

This is Petal’s second investment from Valar, which was also the lead investor in its Series A funding round. Back in October 2018, Petal got $34 million in financing.

Fintech targets banks keen for out-of-market CRE loans (American Banker), Rated: A

As more banks take the often risky step of expanding outside their traditional markets, especially through digital means, some fintechs sense an opportunity to offer them data they need to find new customers and assess risk.

LendingClub, OnDeck Capital and Lending Tree are each online lending platforms that have bet on this trend. CrediFi, a finance data provider, aims to do the same with a focus on one of the largest asset classes around: commercial real estate.

LoanSnap Raises $ 4.7M in Funding (Finsmes), Rated: A

LoanSnap, a San Francisco, CA-based creator of smart loan technology, raised an additional $4.7M in funding.

The round, which brought total financing to $17M, was led by Thomvest Ventures and existing investors.

Oxygen gets $ 2.3m funding for digital banking life (Fintech Futures), Rated: A

San Francisco-based digital banking service Oxygen has raised $2.3 million in funding to breathe life into its gig economy plans.

In this round it got funding from Digital Horizon Capital; Cynthia Chen, investor, advisor, executive and board member for several US-based fintechs and now co-founder and chief risk officer at Figure; ZMT Capital (China); Locus Ventures; Endure Capital; PioneerFund; Magic City; Light Bridge; Strawberry Creek; Base Ventures; The House Fund and Sam Yam, co-founder of Patreon.

Better Mortgage Secures $ 70 Million in Series C Funding from American Express Ventures and the Healthcare of Ontario Pension Plan (PR Newswire), Rated: A

Better Mortgage, one of the leading digital mortgage lenders in the U.S., today announced its closing of $70 million in Series C financing from American Express Ventures and the Healthcare of Ontario Pension Plan (HOOPP), in addition to existing investors Kleiner Perkins, Goldman Sachs, and Pine Brook. The new capital will support continued growth and investment in Better’s technology platform.

CFPB Announces $ 3.2 Million Settlement with Online Payday Lender (JD Supra), Rated: A

On January 25, 2019, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an online lender that extends unsecured payday and installment loans, as well as lines of credit, resolving allegations that the lender had engaged in unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536.

Popular ‘robo-advisor’ Betterment picks Philly for its first office outside New York; to hire 20 by end of 2019 (Philly.com), Rated: A

Betterment, a digital wealth manager popular among millennials, has picked Philadelphia for the first office outside its New York home base.

The company, which manages $15 billion in assets, plans to open a Philadelphia office as soon as February, according to founder Jon Stein. Betterment is looking for office space in Center City, with the intent of adding 20 employees in its computer and engineering departments by the end of 2019.

Numerated and PayNet Partner to Improve Digital Lending (BusinessWire), Rated: B

Numerated announces that it will integrate PayNet’s MasterScore v2 within its real-time lending and growth platform. PayNet, a leading commercial lending data and analytics firm, will integrate its proprietary database within Numerated’s customizable rules- and segment-based credit decisioning engine to offer banks additional business scoring criteria for managing risk when lending to businesses in real-time.

Planet Home Lending Opens Several Branches; Sees Growth in Business Channels (PR Newswire), Rated: B

Planet Home Lending, LLC opened 26 active distributed retail branches and brought on 165 mortgage loan originators in 2018. Planet Home Lending also enjoyed additional growth in 2018 in its other channels.

Senior Counsel, Litigation (Employment Focus) (Built in Chicago), Rated: B

Guaranteed Rate is building a winning team to reinvent the mortgage experience through innovation, technology and a relentless focus on providing industry-leading mortgage products and superlative customer service.  The Senior Counsel will embrace and support these efforts by working to pursue claims and resolve disputes as appropriate through negotiation, arbitration or litigation, with a particular focus on employment claims and matters.

United Kingdom

Lending Works hits £150m of loans in five years (AltFi), Rated: AAA

Lending Works, the peer-to-peer lender, has surpassed £150m in loans to households and firms.

Nick Harding, Lending Works Co-Founder and CEO, says the firm is aiming to reaching £300m loans by the end of 2019 thanks in part to its “greatest ISA season yet ”.

LendInvest provides GBP7.35 million bridging loan in under seven days (Property Funds World), Rated: A

UK property finance specialist LendInvest has facilitated a GBP7.35 million bridging finance loan for a developer in just seven days.

Brexit blamed for slowdown in consumer lending (P2P Finance News), Rated: A

UNSECURED consumer lending has slowed to its lowest level since 2014, as Brits scale back their spending amid Brexit uncertainty.

The latest Bank of England Money and Credit statistics also found that the total number of mortgage approvals fell from 126,794 to 124,829 in December 2018, indicating an overall lag in the lending market.

Meanwhile, mortgage approvals for house purchase were around 63,800 in December – just slightly less than the 2018 average of 65,200.

Ultimate Finance lends record £1.4bn to small firms (AltFi), Rated: A

Small business financer Ultimate Finance said it lent a record £1.4bn to small firms across the UK last year.

The Bristol-based business said its overall lending jumped 35 per cent in the year to December 2018, boosted by writing more loans across its operations.

It said its bridging loans more than doubled to £31m over the period, asset finance jumped 37 per cent to £46m, while invoice finance also increased by almost a quarter to £117m.

Primary Factors to Have At Hand When Borrowing Money Online (EconoTimes), Rated: A

Online borrowing should be all about convenience, and Loanski loans have made this aspect their rising pillar for excellence. The only requirement for one to apply for a loan through the platform is they must be United Kingdom residents and have an active bank account. These minimum requirements essentially mean that anyone who uses their bank accounts frequently can have the pleasures of having an instant loan when they need it the most.

China

Ant Financial’s money market fund shrinks to 2-year low (Financial Times), Rated: AAA

The world’s largest money-market mutual fund, Ant Financial’s Tianhong Yu’E Bao, was at its smallest for two years by the end of last year as Chinese regulators pressured it to downsize over concerns about systemic risk.

The shrinkage is a sign that Ant, the financial services business of Alibaba Group, is shifting away from marketing its own financial products to serving as a platform for other groups to access its huge customer base.

Cryptocurrency and pyramid schemes add to US$ 44.5 billion surge in illegal fundraising in China (SCMP), Rated: A

Chinese police investigated more than 10,000 cases of illegal fundraising last year, a 22 per cent rise in the caseload, according to China’s top prosecutors.

The total amount involved also rose, more than doubling to about 300 billion yuan (US$44.5 billion), the Supreme People’s Procuratorate said on Wednesday.

Apart from traditional hotbeds such as product marketing, real estate investment, and education, there has been a big rise in fundraising schemes in online lending, wealth management, private equity, cryptocurrency, and elderly care services.

European Union

Europe’s fintech companies are preparing for a no-deal Brexit (CNBC), Rated: AAA

Europe’s fintech companies are getting serious about the possibility of a no-deal Brexit.

As uncertainty looms over the U.K.’s split from the EU, the industry gathered this week at the Paris Fintech Forum. Payments providers, cryptocurrency exchanges and digital banks all said they were taking steps to prepare for the worst-case scenario.

N26 is a Berlin-based digital bank that was recently named one of Europe’s largest fintech start-ups.

Synsam Group and Klarna Launch Innovative Contact Lens Subscription in the Nordics (Webwire), Rated: A

Synsam Group has over 50 years of experience in improving people’s eye health and is today Sweden’s largest optician chain with over 190 stores in Sweden, and 500 stores throughout the Nordic region. One of the company’s most popular services is Synsam Lifestyle Contact Lens Subscription, which includes home deliveries and annual contact lens examinations. To create a better and smoother customer experience, Synsam Group and Klarna have developed a new concept that allows customers to subscribe to contact lenses by using their mobile phones instore, while they can manage all the administration around the subscription online.

International

China’s Ant Financial raised almost as much money as all US and European fintech firms combined (Quartz), Rated: AAA

When it comes to financial technology companies, Ant Financial is in it own league. The affiliate of e-commerce giant Alibaba raised $14 billion in venture capital last year, not far from the $15.9 billion for all fintech investments in the EU and US in the same period. A key question is whether the growth of the world’s most valuable fintech firm is an anomaly or a sign of things to come from China.

Ant Financial accounted for 35% of global venture capital investment in fintech firms last year, according to CB Insights.

Source: Quartz

Cross River and Railsbank Announce Partnership (BusinessWire), Rated: A

Cross River Bank (“Cross River”), a leading innovator and provider of banking services for financial technology companies, and Railsbank Technology Limited (“Railsbank”), a leading UK-based open banking and RegTech technology services platform, today announced that they have entered into a partnership arrangement that will provide Railsbank the opportunity to offer a variety of API-powered, banking and payment processing services across the U.S.

Fintech companies raised a record $ 39.6 billion in 2018 (Reuters), Rated: A

In the last three months of the year, five companies joined the coveted ranks of fintech “unicorns”, or companies valued at more than $1 billion. These include credit card provider Brex, digital bank Monzo and data aggregator Plaid.

Australia

Canada’s Eguana will set up local manufacturing to join South Australia Home Battery Scheme (Energy-Storage.news), Rated: AAA

The South Australia Home Battery Scheme, launched by the state government, offers a maximum of AU$6,000 assistance per household for the purchase of battery energy storage. Home storage systems are typically, but not always, paired with solar PV, and homeowners can get back between AU$500 and AU$600 per kilowatt hour of battery storage capacity purchased.

Announced in September and then launched a month later, the scheme will assist up to 40,000 households financially, with the state government putting in AU$100 million and peer-to-peer lending group RateSetter later committing the same amount of funding in the form of low-interest loans.

ING latest lender to hike variable home loan rates (Mozo), Rated: A

Online lender ING has become the latest bank to lift its variable home loan rates following an announcement earlier today.

The lender will raise rates across all of its variable rate home loan products by 15 basis points, effective as of February 7, 2019.

India

Small Business Lender Kabbage Expanding to India (Lend Academy), Rated: AAA

Kabbage has opened an office in Bengaluru (formerly Bangalore) and plans to have 125 employees by year end. For comparison, the company has about 350 employees in their Atlanta headquarters.

To our knowledge Kabbage is the first US-based lender to enter the Indian market.

RBI directs P2P lenders to file quarterly reports on key metrics (TechCircle), Rated: AAA

Lending has been our star performer: MobiKwik founder (India Times), Rated: A

As of the end of the last financial year, we have a register user base of more than 107 Mn users and a network of over 3 Mn merchants. We are aiming at 400% growth this fiscal. We are aiming at 400% growth this fiscal. We are adding over 3 Mn new users every month, one of the highest in the industry. We will have close to 200 million users by the end of 2019.

A) Lending is growing by leaps and bounds ever since we started out. The opportunity is huge with less than 10% of Indians having access to credit.

Blockchain-based Loan Marketplace Streamsource Raises $ 1 Mn Seed Funding from Accel India (IndianWeb2), Rated: A

Gurgaon-based StreamSource Technologies, a decentralized marketplace for loans, has raised $1 million in seed funding from Accel India, making it Accel’s first local investment in the blockchain sector.

Indian banks unveil blockchain-linked funding for SMEs (Fintech Futures), Rated: A

A group of 11 Indian banks have teamed together to unveil the nation’s first blockchain-linked funding for SMEs.

According to the Economic Times, the participants include ICICI, Axis, HDFC, Kotak Mahindra, Yes Bank, Standard Chartered, RBL, South Indian Bank, IndusInd Bank, State Bank of India and Bank of Baroda.

How are interest rates set on P2P platforms? (India Times), Rated: A

“Borrowers on our platform are given a score out of 100, which determines their risk profile. A score of 52 to 60 points is high risk while a borrower with more than 60 points will get a lower interest rate,” says Bhavin Patel, Founder & CEO, LenDenClub.

IndiaMoneyMart App Brings P2P Investment and Wealth Creation for Masses (Business Standard), Rated: A

lending or lending is a mode of direct financing that enables individuals to borrow and lend on mutual terms. Platforms like IndiaMoneyMart (IMM) eliminate the traditional financial institutions and enable businesses to flourish through a people to people contact.

P2P industry expectations from Budget 2019 (India Times), Rated: A

“While a great boost to the P2P industry would be via the regulator easing lending caps, we look forward to a critical role from the finance ministry for better financial inclusion by extending SOPs to retail investors,” says Dhiren Makhija, CEO, Cashkumar.

Here’s how you can invest in peer-to-peer lending (CNBCTV18), Rated: A

According to i2ifunding.com, a category A borrower may face the least risk while a category F borrower faces the highest risk.

Following interest rates are paid by borrowers across categories:

  • A category borrowers – 12.00 percent to 14.99 percent
  • B category borrowers – 15.00 percent to 17.49 percent
  • C category borrowers – 17.50 percent to 19.99 percent
  • D category borrowers – 20.00 percent to 22.49 percent
  • E category borrowers – 22.50 percent to 24.99 percent
  • F category borrowers – 25.00 percent to 36.00 percent

CreditVidya receives $ 3m funding to develop credit score tech (Fintech Futures), Rated: A

CreditVidya, an Indian alternative credit score firm, has raised $3 million in a funding round led by Bharat Innovation Fund.

Ryan Khoury, Navroz D. Udwadia and Rick Gerson (founding members of Falcon Edge Capital) also participated in the round.

Abhinav Kumar, of Trivago fame, joins Paisadukan as a marketing advisor (India Times), Rated: B

Digital marketing strategist Abhinav Kumar who shot to fame because of his appearance on television commercials of travel search engine Trivago has joined peer to peer lending platform Paisadukan as a digital marketing and branding advisor and also will be on the company’s advisory board.

Asia

P2P lending third most complained about business sector (The Jakarta Post), Rated: AAA

The country’s growing peer-to-peer (P2P) lending sector has become one of the most complained about business sectors partly because of high interest rates and aggressive debt collection practices, according to a report.

The report by the Indonesian Consumers Foundation (YLKI) shows online lending platforms are the third most complained about business sector while property and banking rank second and first respectively.

NTU and Chinese online lender WeBank launch research centre (Straits Times), Rated: A

Nanyang Technological University (NTU) and China’s first digital-only bank have opened a research centre that aims to help customers manage their finances in real-time wherever they are.

NTU research scientists and engineers from WeBank will also study how to provide personalised wealth management advice to customers, among other projects, in the five-year partnership.

Authors:

George Popescu
Allen Taylor

The post Thursday January 31 2019, Weekly News Digest appeared first on Lending Times.

Fintech Sandboxes: A Global Overview

fintech sandboxes

When an industry develops at a breakneck speed, the law can take some time to catch up. Existing regulations usually do not fit new paradigms, and it can stifle innovation. A regulatory sandbox is the perfect solution because it allows for the testing of new innovations in a controlled environment. The term “sandbox” refers to […]

The post Fintech Sandboxes: A Global Overview appeared first on Lending Times.

fintech sandboxes

When an industry develops at a breakneck speed, the law can take some time to catch up. Existing regulations usually do not fit new paradigms, and it can stifle innovation. A regulatory sandbox is the perfect solution because it allows for the testing of new innovations in a controlled environment.

The term “sandbox” refers to the box of sand where small children play in a confined boundary. The term has received a new connotation in a commercial sense and refers to a closed environment used for experimenting and testing projects or new ideas. Regulatory sandboxes help in testing business proposals and prototypes under a regulator’s supervision. These testing grounds have an advantage of not being governed by current rules and, therefore, the business can explicitly experiment the validity of their projects without the danger of getting caught on the wrong side of existing law.

Such regulatory sandboxes are critical for the development of the alternative lending industry. The gist of having regulatory sandboxes in this sector is to comply with the regulatory directives that complement the growth of fintech companies without compromising on users’ safety and protection. The existence of suitable safeguards assists players in executing a live trial in the market without having to worry about the legal consequences.

The Dawn of the Regulatory Sandbox

Financial regulators across the globe understand the challenges and opportunities presented by innovations like digital-only banking, P2P lending, robo-advisors, and other fintech innovations. Some countries have taken the lead in ensuring that an ecosystem is created which helps startups experiment with their products and services without running afoul of current rules.

United Kingdom- The Pioneer

Seeing massive investor interest in this industry, the Financial Conduct Authority (FCA) proposed a regulatory sandbox as a part of its Project Innovate. It started accepting applications in mid-2016.

The UK has completed the successful testing of models from 18 out of 69 firms in the first phase and 24 out of 77 firms in the second phase. The sandbox has accepted 18 out of 61 firms for the third phase, and 29 out of 69 applications received qualified to the testing stage in the fuurth phase.

Participants in the UK sandbox came from sectors like retail banking, general insurance, retail lending, and wholesale lending. Around 35 percent of the participants in the secnd phase were from other countries, including the US and Singapore. The fourth cohort has almost 40 percent of startups experimenting with distributed ledger technology for disrupting traditional finance.

The UK regulatory sandbox includes:

  • A positive reaction from other global regulators.
  • The startup community’s eagerness is evident from each phase being oversubscribed.
  • It has reduced the time to get an idea to market. FCA claims that, during the first year itself, 90 percent of the firms were able to go for a commercial market launch of their product.
  • Also, many of the approved fintech companies were able to attract VC investment for their projects.

Singapore

The second jurisdiction to launch the concept of a regulatory sandbox is Singapore. The Monetary Authority of Singapore (MAS) introduced its sandbox in June 2016. It has launched a range of schemes for interested startups. Till date, the country has the maximum regulatory alliances and has entered into co-operation arrangements with eight countries including UK, Australia, and Japan.

Since its launch, the MAS has guided over 140 applicants from around the globe. About one in five applications has been approved for experimentation.

Startups in crowdfunding, financial advisory, artificial intelligence, cross-border funding, distributed ledgers, and more were able to experiment under the MAS scheme. The sandbox has helped Singapore attract overseas startups to come and do business in the country. And it is contributing positively in making Singapore a Smart Financial Hub by allowing these young startups to form partnerships with traditional financial institutions.

United States

The Consumer Protection Financial Bureau (CPFB) initiated the concept of regulatory sandboxes to ensure global compliance and to stimulate innovation in the fintech industry.

Arizona became the first state to open a fintech sandbox in the US by passing a legislation to create a Regulatory Sandbox Program. This program will enable finetch players to test their financial products without being subjected to the licensing provisions of the state. The move will come under the supervision of the Arizona Attorney General. Another state, Illinois, also on the footsteps of Arizona, has a separate regulatory bill (currently on hold) on the horizon.

Along with the regulatory sandbox, the US has also launched an ‘office of innovation’, which primarily focuses on blockchain and cryptocurrency technologies. The aim is to stimulate competition in the industry and expedite consumer advancement.

The participants included payment start-ups, financial technology companies, credit agencies, and lending companies.

The startups in the Arizona sandbox will be allowed to experiment with their financial products for a period of up to two years. The sandbox has promoted investment and job creation in the state. It will help improve the competitive position of the country in the global fintech industry. The concept has also helped early stage entrepreneurs surpass the legal hurdles with access to a trillion dollar opportunity.

Canada

The Ontario Securities Commission (OSC) launched its sandbox “LaunchPad” in February 2017. The government is said to create a “super sandbox” that will help foster communication between fintech players, financial institutions, regulators, and the government. It is a part of its 2016-2019 Business Plan to understand how technology affects the markets. An agency by the name Ontario Fintech Accelerator Office will also be instituted to provide assistance to start ups. The government plans to develop the retail payment and financial sector framework at the national level.

It has given a push to Canada’s innovation market as earlier, due to the domination of a few financial companies in the industry, innovation was slow. Now, it has allowed Canadian fintech companies to come forward and grow both locally and internationally. The new idea will benefit Canadian SMEs who could not access funding from traditional lenders.

Global Integration

The concept of regulatory sandboxes is currently running in over 20 nations. Apart from the countries mentioned above, Australia, Indonesia, Hong Kong, Malaysia, Denmark, and Thailand have sandboxes running to join the race. To promote interaction among participants at a global level, a GFIN (Global Financial Innovation Network) has been launched, aimed at knowledge sharing and facilitating cross-border testing of ideas. It is a joint effort of FCA and 11 other regulatory authorities. Organizations such as the US CFPB, Hong Kong Monetary Authority, UK FCA, MAS, and others, are a part of this network. The goal is to go past the idea of a sandbox and ensure that regulators are able to support the advancements in the fintech industry.

Authors:

Written by Heena Dhir.

The post Fintech Sandboxes: A Global Overview appeared first on Lending Times.

Predicting Default Rates for Online Lending

Clarity Services

According to data from Experian’s Clarity Services, online consumer lending has grown over 350 percent from 2013 to 2017. Funded single-pay volume rose 72 percent while installment loan volume went up nearly 500 percent. The single-pay loan volume actually shot up 106 percent through 2016 but fell slightly the following year. Still, these numbers indicate […]

Clarity Services

According to data from Experian’s Clarity Services, online consumer lending has grown over 350 percent from 2013 to 2017. Funded single-pay volume rose 72 percent while installment loan volume went up nearly 500 percent. The single-pay loan volume actually shot up 106 percent through 2016 but fell slightly the following year. Still, these numbers indicate a growth in online alternative finance lending, and with governments around the world cracking down on traditional payday lending, this spells a huge opportunity for further growth in the years to come.

In 2013, the average online installment loan amount was just below $800. In 2017, it was just over $1,400. And the average loan term rose from six months in 2013 to almost 10 months in 2017.

This growth may have something to do with how online installment loan providers are marketing their services. The number of lenders using direct marketing in 2015 was indexed to 100, but in 2018 (through July), that number was 275, representing growth on pace to reach 550 percent by year end. The number of pre-screened mailed names went up from an indexed amount of 100 in 2015 to 988 through July of this year.

Marketing isn’t the only factor affecting growth in this segment of online lending. There is also a growing number of lenders tapping into the market, and the fact that the Consumer Financial Protection Bureau (CFPB), several U.S. states, the United Kingdom, and other government entities are beginning to target traditional brick-and-mortar payday lenders is contributing to the growth of the online installment loan segment.

The growth of this segment highlights the importance of credit risk evaluation. The need for effective credit risk solutions that identify potential defaulters and is capable of separating the good borrowers from the bad is also growing.

The Importance of Predicting Defaults Before Issuing Online Loans

One of the most important tasks for any lender is predicting the likelihood of default. A higher than expected default rate can lead to huge losses. On the other hand, mitigating delinquencies can lead to greater profits and allow the lender to issue more loans. It is particularly important to predict whether a borrower will default on the first payment of an installment loan. After all, defaulting on the first installment means the lender will not recoup any of its investment, and defaulting on the first payment is a clear sign that the borrower should have been flagged as a high credit risk and will likely default on subsequent payments.

Alternative finance lending is inherently risky. Lenders must fight a higher default rate than banks (20 percent vs. 3 percent) right off the bat. That alone makes predictive credit risk modeling a necessity in today’s installment loan market.

In recent years, online lending leaders have seen greater than expected default rates, which means these online providers must be extra diligent about predicting delinquencies in order to watch their bottom lines. For this reason, the tools that lenders use to make such predictions must be carefully chosen so that default rates decline and profits increase over time.

3 Ways to Identify Good Credit Risks Before Issuing a Loan

Some defaults are to be expected. Profitable lenders understand that the interest on the good loans will pay for the losses on the bad loans. Nevertheless, mitigating those losses is paramount to maintaining solvency and being able to service future borrowers. An online installment loan lender can use credit risk scoring to decrease default rates and increase profits simply by identifying the good and bad credit risks. Here are three ways a lender can ensure they are focusing on the good credit risks:

  1. Prescreen your potential borrowers – Credit risk evaluation should begin before you make initial contact with potential borrowers. If you are involved in direct marketing, prescreen potential borrowers before sending them your marketing collateral. Not only can this lower your default rate, but it will also lower your marketing expenses.
  2. Use an effective credit risk scoring solution – Today’s lenders do not just rely on FICO scores and payment histories. They collect alternative data that identifies how potential borrowers spend their money and handle their debts. Much of this data is out of sight from traditional credit scoring agencies, but it is essential to getting a complete picture of the borrower.
  3. Make your offer based on the borrower’s credit risk profile – First, build a credit risk profile on the borrower and use the predictive score to make your loan offer. It is best when lenders are able to structure a loan based on a consumer’s risk level. For example, a higher risk customer might warrant a smaller loan amount to control the lender’s risk.

Assessing Credit Risk: The Perfect Solution for Online Installment Loan Providers

The most important factors in underwriting the subprime consumer involve credit risk assessment and fraud detection. New solutions that combine the largest visibility into the industry’s alternative credit data and traditional bureau data ensure lenders are fully equipped to assess and mitigate risks. These solutions are offered by Experian’s Clarity Services and Experian, and include:

  • Clear Credit Risk
  • Clear Advanced Attributes

These solutions are designed to assess a borrower’s creditworthiness or to determine credit eligibility. Lenders receive an actionable score with adverse action codes to help them determine whether a potential borrower is a solid credit risk and to help determine a reasonable loan structure.

Clear Credit Risk is Clarity’s trademarked credit risk product designed to predict the likelihood of a borrower’s default on the first payment. It includes an effective score and is built on data that has proven most predictive for subprime consumers.

Experian’s Clarity Services is a credit reporting agency founded in 2008 and acquired by Experian in 2017. As the leading alternative credit data provider, the company services a wide variety of alternative finance lenders such as auto finance companies, check cashing services, prepaid credit card issuers, short-term installment lenders, small-dollar credit lenders, telecommunications providers, and more.

Authors:

Allen Taylor

Thursday November 8 2018, Daily News Digest

LendingClub total loans

News Comments Today’s main news: LendingClub loan origination estimates better than expected, losses widen. Zopa closes 60M GBP in funding. Landbay hits 200M GBP lending landmark. N26 expands in Europe. BBVA, Red Electrica Corporation complete blockchain-based syndicated loan transaction. Today’s main analysis: Q3 earnings for GreenSky, LendingClub, OnDeck. Today’s thought-provoking articles: How GreenSky is changing financing. LendingTree’s mortgage offers report […]

LendingClub total loans

News Comments

United States

United Kingdom

International

Other

News Summary

United States

LendingClub profit beats estimates on record loan originations (Reuters), Rated: AAA

Online lender LendingClub Corp (LC.N) reported an adjusted third-quarter profit that edged past analysts’ estimates and raised its full-year earnings forecast on Tuesday, helped by record loan originations and higher transaction fees.

The company said it now expects 2018 adjusted earnings of between $89 million and $94 million, up from a previous range of $75 million to $90 million.

LendingClub loss widens on higher expenses (Reuters), Rated: A

Online lender LendingClub Corp’s quarterly net loss widened, due to higher expenses for outstanding legacy issues.

The San Francisco-based company’s net loss fell to $22.8 million, or 5 cents per share, in the third quarter ended Sept. 30, from a loss of $6.5 million, or 2 cents per share, a year earlier.

LendingClub to expand in Utah (Pulse.com), Rated: B

The Governor’s Office of Economic Development announced 

How GreenSky, In-House Financing, and Blockchain Are Transforming the World of Credit (Premier Gazette), Rated: AAA

Fifty years ago, if you needed a loan for yourself or your business, you would typically walk into a brick-and-mortar bank, fill out a bunch of paperwork, talk to a loan officer, and wait several days or weeks to find out if you were approved. Today, this story has changed, and it’s going to look even more different in the future.

Borrowers seem to like GreenSky’s new way of obtaining credit. So far, the fintech company has served more than 1.9 million customers, providing them over $13 billion. Perhaps GreenSky’s most promising distinction is that it has also been consistently profitable with its new way of providing loan services. Its transaction volume has grown steadily from $2.1 billion in 2015 to $3.8 billion in 2017. During the same time, it grew its merchant base from 5,000 to nearly 13,000. Clearly, consumers in the 21st century like the new way of borrowing.

GreenSky estimates the home improvement industry, one of its key targets, to be just south of $350 billion annually. At a transaction volume of $3.8 billion, the fintech company has roughly 1% of the market.

Source: Premier Gazette

The APR’s for GreenSky’s products tend to fall between 5% and 24%, depending on the borrower’s credit profile. Loan terms vary from 42 to 90 months, and customers can borrow up to $55,000. GreenSky does not cater to subprime borrowers.

Late in 2018, GreenSky announced a new partnership with American Express.

Roundup of Q3 2018 Earnings: GreenSky, OnDeck, LendingClub (Lend Academy), Rated: AAA

OnDeck posted gross revenues of $103 million, up 8% from the previous quarter and 23% from the prior year period. OnDeck is benefiting from higher interest income due to rate increases as well as their origination growth while being able to decrease funding costs. Effective interest yield was 36.5%, up from 33.1% last year.

Source: Lend Academy

Net income came in at $9.8 million for the quarter, up from a loss of $4.1 million from the prior year period.

Source: Lend Academy
  • Gross revenue of $392 million to $396 million, up from $380 million to $386 million,
  • Net income of $20 million to $24 million, up from $10 to $16 million, and
  • Adjusted Net income of $40 million to $44 million, up from $30 million to $36 million.

GreenSky

GreenSky reported record transaction volume in the third quarter of $1.4 billion, up 33% year over year. Revenue increased 29% to $113.9 million year over year. GAAP net income was $45.7 million.

Source: Lend Academy

LendingClub

Net revenues were $184.6 million, up 20% from the prior year period and originations were $2.9 billion, up 18% from last year. Applications also reached their highest levels, up 30% year over year.

In Q3 2018 GAAP Consolidated Net Loss was $22.7 million, or $7.3 million if you exclude $15.5 million of expenses related to outstanding legacy issues.

Source: Lend Academy

Total loans issued by the company now stands at over $40 billion.

Source: Lend Academy
  • Net Revenue in the range of $688 million to $698 million.
  • GAAP Consolidated Net Loss in the range of $129 million to $124 million, reflecting expenses related to outstanding legacy issues through the third quarter partly offset by higher Adjusted EBITDA guidance.
  • Adjusted EBITDA in the range of $89 million to $94 million.

LendingTree Mortgage Offers Report – October 2018 (Lending Tree), Rated: AAA

October’s best mortgage offers for borrowers with the best profiles (the 95th percentile of borrowers) had an average APR of 4.61% for conforming 30-year fixed-rate purchase loans, up from 4.39% in September. The APR on refinance loan offers increased 22 basis points (bps), to 4.62%.

For the average borrower, the purchase APR for conforming 30-year fixed-rate loans offered on LendingTree’s platform was 5.27%, up 18 bps from September. The loan note rate of 5.14% is the highest rate of the year.

Consumers with the highest credit scores (760-plus, representing the 65th percentile of borrowers) received an average APR of 5.12%, versus 5.42% for consumers with scores of 680 to 719. The APR spread of 30 bps between these score ranges is the same as it was in September. For the average purchase loan amount of $233,938, the spread represents over $15,000 in additional costs for borrowers with lower credit scores over 30 years.

For the average borrower, the APR for conforming 30-year fixed-rate refinance loans increased 17 bps from September to 5.26%. The spread between credit score brackets (760-plus and 680 to 719) remained the same as last month, at 24 bps. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $238,447.

Average proposed purchase down payments fell to $60,361, a decline of about $3,600.

Source: Lending Tree

LendingTree Study Finds Millennials in the South Owe the Most on Their Cars (Benzinga), Rated: A

LendingTree today released its study on where millennials owe the most on their cars.

Key findings

  • Even car loans are bigger in TexasMetros in the Lone Star State dominate the top of the list: McAllenHoustonEl Paso and San Antonio have the highest median auto loan balances for millennials at $23,704$20,925$20,544 and $20,521 respectively.
  • Car capital of the world has the lowest auto debt. Ironically, Motor City has the lowest levels of millennial auto debt on our list with a median debt of $10,841 as well as the lowest average debt of $14,573.
  • Great Lakes area metros shine with the least auto debt. After Detroit, millennials in Rochester, N.Y.Grand RapidsToledo, Ohio, and Cleveland carry the lowest median auto debts, at $12,165$12,429$12,678 and $12,717 respectively.
  • New York and Ogden, UtahThese metros are on opposite ends of the spectrum when it comes to carrying any auto debt at all — New York has the lowest percentage of millennials with auto debt at 41.5 percent while Ogden, Utah has the highest percentage of millennials with auto debt (64.5 percent).

Outside Financial Brings Much-Needed Transparency to Auto Lending (Digital Journal), Rated: A

To prevent the average consumer from being charged more than $1700 in hidden markups on auto loan packages, Outside Financials opens an independent loan marketplace to facilitate transparency in auto lending and auto refinance.

We got a peek at Plaid’s financials, the fintech startup whose valuation has tripled in the past 6 months to as much as $ 3 billion (Business Insider), Rated: AAA

As of October, Plaid told investors it was on track to generate about $70 million over the next 12 months, two people who were briefed on the financials tell Business Insider.

That’s up from the $50 million in revenue the company told investors just one month earlier it was on track to generate, two other people who reviewed Plaid’s financials at the time said.

Fighting financial crime without excluding the underbanked (American Banker), Rated: A

Eugene Ludwig, founder and chief executive officer of IBM’s Promontory Financial Group, said artificial intelligence — already employed to help identify potential anti-money-laundering activity — is getting smarter, and can now be used to identify vulnerable groups of people who have been incorrectly labeled as high risk.

Nerdwallet Wants To Make Comparison Shopping For Financial Services Simple (Forbes), Rated: A

For example, Nerdwallet personal loan product page sorted loans by interest rates.

“All our consumers hated it. They wanted it sorted by monthly payments, which seems odd until you put yourself in their shoes and see what is going on month by month,” Chen said. “We have to meet them where they are. If you start by wagging your finger, that’s a good way to get them to hit the back button on their browser.”

Nerdwallet has three million members and more than 100 million visits each year, Chen said.

InfoSec Governance, Risk, and Compliance Manager (LinkedIn), Rated: B

SoFi is seeking an experienced InfoSec Manager to assist in all aspects of our governance, risk and compliance program.

NRL Mortgage Selects The Riivos Mortgage Lending Application (PR Newswire), Rated: B

Riivos Mortgage, a division of Riivos, Inc., the provider of cloud-based continuous value chain management technology, today announced that NRL Mortgage, an originator serving customers coast to coast, is using the Riivos Mortgage Lending forecasting, planning and reporting application to help them analyze and capitalize on growth opportunities. NRL Mortgage is majority owned by St. Christopher’s Holdings LLC, a privately-owned holding company based in Houston, Texas.

Judge suspends compliance deadline for CFPB payday rule (American Banker), Rated: B

U.S. District Judge Lee Yeakel on Tuesday reversed a previous order from June and granted, in part, the request by acting CFPB Director Mick Mulvaney and two industry trade groups to delay the payday rule’s August 2019 compliance date. They sought a delay to prevent lenders from having to comply with the old rule before the revisions are finalized.

United Kingdom

Zopa, the UK P2P lending company, closes £60M round on path to launching a bank (TechCrunch), Rated: AAA

Obtaining a banking license and then launching an actual new retail bank requires capital. A lot of capital. Enter Zopa, the U.K. peer-to-peer lending company that wants to become a bank, which today is announcing that it has closed £60 million in further funding. Only £16 million is actually new new money, having already disclosed £44 million in August, so this is effectively an extension of that earlier fund-raise.

Landbay reaches £200m lending landmark (P2P Finance News), Rated: AAA

LANDBAY has hailed its quality service and strong broker relationships as it reached the £200m lending milestone this week.

The peer-to-peer property platform, which purely focuses on buy-to-let mortgages (BTL), said it had reached the landmark with a track record of zero defaults.

Atom is intensifying its mortgage push (Business Insider), Rated: AAA

Atom has initially introduced 2- and 5-year buy-to-let remortgage products for landlords that have four to 25 properties. Users will have to pay a 1% loan fee, and the maximum loan term is 25 years.

Source: Business Insider

Older P2P property lenders boast “negligible or zero losses” (P2P Finance News), Rated: A

THE LONGEST running peer-to-peer property platforms are providing investors with high returns and “negligible or zero capital losses,” analysis claims.

Research from P2P analysis firm 4th Way has highlighted 11 lenders who now have a track record of four years or more.

LendInvest seeds newly launched real estate debt fund with £150m (Real Assets), Rated: A

LendInvest has launched a new real estate debt fund with £150m (€171.6m) seed capital from a previous fund.

JAJA SMASHES CROWDFUNDING CAMPAIGN AS IT READIES CREDIT CARD LAUNCH (Fintech Finance), Rated: A

Jaja Finance, the company on a mission to simplify the world of consumer finance, announces that it has already reached its fundraising target of £3m on equity crowdfunding platform Seedrs. The company will use the funds to expand its team and launch its digital credit card, Jaja.

China

Chinese tech CEO predicts ‘exponential’ growth in financial technology (CNBC), Rated: A

Financial technology has reached a tipping point for China’s Ping An Technology and future growth in that area is set to be exponential, according to CEO Ericson Chan.
European Union

N26 Expansion: German Challenger Bank Brings Services to Denmark, Norway, Poland, & Sweden (Crowdfund Insider), Rated: AAA

Germany-based challenger bank N26 is bringing its services to Denmark, Norway, Poland, and Sweden.

“N26 passes on these cost benefits to its customers. N26 partners with the most innovative fintech and traditional financial companies to offer its customers best-in-class products such as TransferWise (foreign exchange), Raisin (savings), Clark and Allianz (insurance), auxmoney (credit) and others.”

International

Banks complete first syndicated loan on blockchain (BBVA), Rated: AAA

BBVA and Red Electrica Corporation have become the first businesses in the world to deliver a syndicated loan using blockchain. The €150m deal, granted by BBVABNP Paribas and MUFG, was reached in record speed using BBVA’s proprietary platform- which is powered by distributed ledger technology.

Seven Businesses That Promise Digital Can Be Ethical (Forbes), Rated: A

In financial services, an industry where trust is a particular issue, Monzo was founded on the idea that there should be an alternative to traditional banking practices. Monzo argues that banks should get rid of punitive fees, do more to ensure customers know exactly what they can expect to pay for an overdraft, and provide greater control over how people spend their money.

Start-up Wagestream has just raised £4.5m for a business it promises will kill off the payday loan sector and the ‘payday poverty cycle’.

Banks should ally with fintechs in battle against payday lenders (PaymentsSource), Rated: A

Bankers who regard payment technology companies such as fintechs as a problem may be missing opportunities.

Alternatives to payday lending are an example. These fintechs provide credit for nonprime customers, such as a recently divorced woman faced with a slew of new expenses. It is pricey credit, but cheaper than payday lenders. Unlike payday lenders, these companies provide credit reporting and reduced rates as a client pays off the loan. Eventually, a successful client qualifies for bank lending and leaves to take advantage of bank interest rates.

Source: PaymentsSource

Report: AI in Fintech (Diplomatic Courier), Rated: A

FinTech has revolutionized the way that banks and insurance companies function. Rather than prioritizing themselves and their services as in the past, banks must emphasize client needs in today’s new technological era. This focus on personalized financial services manifests itself in FinTech—a financial infrastructure for consumer enablement. As FinTech applies data and technology to financial services in an effort to address industry challenges, artificial intelligence is essential to FinTech’s existence and usage.

To read the full report click here for the digital edition.

Crypto Power Player PwC is Assisting on Cred Crypto Lending Platform’s New Stablecoin Project (Bitcoin Exchange Guide), Rated: A

A division of the worldwide accounting and consulting firm PwCis currently working with a new stablecoin project that aims at developing a U.S. Dollar-based coin. The Hong Kong division will be exploring the best practices for issuing new stablecoinsworking with the Loopring Foundation.

Research reveals three tech strategies that will benefit small and midsized financial institutions (Finastra), Rated: B

A new piece of research, sponsored by Finastraand executed by Mercator Advisory Group, shows that small and midsized financial institutions can derive significant benefits to operational efficiency by pursuing three distinct cost-saving strategies: vendor consolidation, cloud delivery, and artificial intelligence. Based on in-depth interviews with C-level representatives of community banks and credit unions with asset size between $200 million and $5 billion, the research gauges attitudes toward and levels of adoption for each strategy.

  • Consolidation of vendors ultimately eliminates the need to maintain and manage multiple systems, and can improve operational efficiency by 20-30%.i
  • Cloud delivery brings numerous benefits including the ability to easily scale system capacity to meet demand.
  • Artificial intelligence (AI), which is the least adopted of the three strategies to date, promises to make processes smarter, faster and more personalized to the consumer. However, in order to reap these rewards, banks must prioritize their vendor consolidation and cloud delivery road maps.

The white paper, titled Landmark Decisioning: Using Vendor Consolidation, Cloud Computing, and Artificial Intelligence to Improve Operational Efficiency, is available here.

Persona and FintruX announce renewed control over personal data (Leaprate), Rated: B

Persona, the blockchain-based solution for identity management,has just announced its partnership with FintruX, the P2P lending ecosystem, to streamline the onboarding process for customers while ensuring they remain in full control over their personal details.

Persona is the first identity management solution developing its own blockchain, as opposed to other projects being developed as ERC20 tokens over Ethereum.

Asia

Funding Societies | Modalku Included in Global List of 100 Leading Fintech Innovators (Markets Insider), Rated: AAA

‘Look at where debt has gone’: MAS chief warns of 3 shifts in global financial risks (Channel NewsAsia), Rated: A

While the fault lines of the last global financial crisis have been mostly addressed, risks remain and have shifted in three ways over the past 10 years, said the Monetary Authority of Singapore’s (MAS) managing director Ravi Menon on Wednesday (Nov 7).

Meanwhile, the extension of credit has shifted from banks to non-banks – one of the areas that have not been given enough attention, said Mr Menon.

Canada

Loop Partners With Equifax to Launch Canada’s First Free Business and Consumer Credit Education Platform (Newswire), Rated: AAA

Equifax Canada and Loop today announced the launch of a credit health and monitoring platform for businesses. Launched at the intersection of Small Business Month and Financial Literacy Month, the new platform empowers Canadian small business owners and entrepreneurs alike, to improve their financial and credit health through easy-to-read credit scores, reports and resources.

Crypto Loans On The Rise – BTC Used As Collateral For Canadian Dollars (Crypto Disrupt), Rated: A

It is now possible to attain a loan for Canadian Dollars (CAD) using bitcoin as collateral. The ability to use crypto as a form of collateral for fiat is a sign of further legitimacy for the sector. More providers are expected to follow suit and offer crypto loans, with a wider range of fiat currencies for a larger range of acceptable cryptocurrencies used as collateral.

Authors:

George Popescu
Allen Taylor