Thursday October 24 2019, Weekly News Digest

P2P lending tax rates

News Comments Today’s main news: Judge says OCC cannot issue fintech charters. Kabbage ends Q3 with nearly $100M in revenue. Funding Circle shares up over 10% while loans under management up over 30%. Balboa competes $409M securitization. FundingSecure enters administration. Today’s main analysis: Q3 bank earnings. Today’s thought-provoking articles: 2019 financial fears infographic. Why there […]

The post Thursday October 24 2019, Weekly News Digest appeared first on Lending Times.

P2P lending tax rates

News Comments

United States

United Kingdom

China

Other

News Summary

United States

Fintech unicorn Kabbage ends Q3 with nearly 0 million in revenue amid loan growth (MarketWatch), Rated: AAA

Financial technology unicorn Kabbage finished the third quarter with just shy of $100 million in revenue as the company continued to grow its small-business lending platform.

The decade-old company told MarketWatch that it generated $99.4 million in third-quarter revenue as loan originations ticked up 43% on a year-over-year basis. The company said it extended $715 million in loans to customers during the quarter.

US fintech Kabbage launches new payment service to help small businesses get paid quicker (AltFi), Rated: B

Kabbage, a US fintech backed by Softbank which uses AI-based algorithms to help work out the terms of small business lending, is launching a payments service which it says will cut the time it takes small businesses to get paid from 90 days to 24 hours.

Judge Rules OCC Unable to Issue Fintech Charters (Lend Academy), Rated: AAA

Yesterday, a federal judge ruled that the OCC does not have the legal authority to issue bank charters to non-banks. Judge Victor Marrero ruled on the fact that a clause in the National Bank Act’s business of banking requires that only firms which take deposits can receive a national bank charter.

Banking charter remains a long way off for fintechs after court ruling (American Banker), Rated: A

Fintech firms continue to face a murky path into the banking system after a federal court ruling that threw out the Office of the Comptroller of the Currency’s special-purpose charter, observers said.

The charter has already been on unsteady ground. No firm has yet applied with the OCC facing legal challenges. But the decision Monday out of the U.S. District Court for the Southern District of New York shines an even brighter light on potential alternatives for fintech companies seeking a national licensing solution.

Is This the End for the OCC Fintech Charter? (Payments Journal), Rated: B

The story isn’t over yet. The OCC has said it will appeal the decision.

New Jersey bank partners with On Deck Capital (Biz Journals), Rated: A

Marketplace Lending Update #7: This and That (The National Law Review), Rated: A

In striking down the OCC’s interpretation of Section 5.20(e)(1), Judge Marrero reasoned that the National Bank Act “unambiguously requires that, absent a statutory provision to the contrary, only depository institutions are eligible to receive national bank charters from the OCC.”

Kabbage Heads to Court (Again)

Non-bank marketplace lender Kabbage joins the growing number of online lenders who are defending Madden and “true lender” claims in New York’s federal courts. Unlike prior lawsuits, such as those recently filed against Capital One and Chase Bank,2 the putative class action against Kabbage targets small business loans, not credit card or other consumer loans.

Q3 Bank Earnings, Venmo & AmEx Card Launch (PeerIQ), Rated: AAA

PayPal is launching a Venmo credit card (expected 2H 2020). Venmo’s credit card launch follows a flurry of launches from Avant, Upgrade, Ollo, Brex and others in recent years. PayPal has a unique edge – the breadth of customers on its payment network. Relatedly, PayPal and Synchrony extending their overall 15-year consumer credit relationship.

Bank Earnings Season Underway

JPM

  • Industry leading ROE of 18% driven by consumer banking ROE 30%+ [!!]
Source: PeerIQ, JPMorgan Chase & Co

Citi

  • Strongest 35% YTD share price gain in KBW index (stock trading below book value)
  • 66% of new deposits coming from areas where they do not have branches

GS

  • ROE in the 12% range, profit drops 26%. ROE will be low for the foreseeable future while GS pours billions in investing in building a consumer franchise
  • CEO David Solomon: “In three short years, we have raised $55 billion in deposits on the Marcus platform, generated $5 billion in loans, and built a new credit-card platform and launched Apple Card,” adding “which we believe is the most successful credit card launch ever.”

Bank of America

  • Profits up 8% YOY; NIM robust at 244 bps just shy of recent peak of 251 bps
  • #1 in mobile banking and online banking. Digital banking users have increased by 5% over the past year and number of active mobile users has increased by almost 11%. – Number of branches has decreased by 1.9

Balboa Completes Largest Securitization in Company History at $ 409MM (Monitor Daily), Rated: AAA

Online lender Balboa Capital successfully completed a $409 million asset-backed securitization (ABS) of small and mid-ticket equipment loans and leases, its sixth and largest transaction to date.

ABS Professionals Look to New Financial Partners Amidst Changing Economic Landscape, Capital One (ABL Advisor), Rated: A

Capital One survey conducted at ABS East 2019, a conference convening professionals from across the asset-backed securities (ABS) industry, found more than one-third (38 percent) of professionals plan to engage with new financial partners and implement new technologies, over the next 12 months, to prepare for the changing economic landscape. Additionally, 34 percent of respondents plan on reviewing or reshaping their credit and underwriting risks over the next 12 months.

Of the various challenges facing the industry, ABS professionals elected that regulatory uncertainty (22 percent), increased credit risk (18 percent) and increased competition (18 percent) pose the greatest challenges for their businesses over the next 12 months. Fluctuations in interest rates was listed as the greatest challenge for 15 percent of respondents.

2019 Financial Fears Survey (Wallet Hub), Rated: AAA

Current Mortgage Rates in Iowa (Benzinga), Rated: A

Quick Look: Best Mortgage Lenders in Iowa

  1. Academy Mortgage Corporation: Best Overall
  2. Quicken Loans: Best for Online Lending
  3. Wells Fargo: Best for First-time Home Buyers
  4. Bank Iowa: Best for Customer Service
  5. US Bank: Best for Competetive Rates

1. Best Overall: Academy Mortgage Corporation

You can get in-person service and online loan assistance for conventional, FHA, VA and refinance loans, as well as first-time homebuyer education.

IIRR Management Services Discusses RealtyShares Acquisition (Crowdfund Insider), Rated: A

IIRR Management Services (IRM) claims to be one of the largest crowdfunded real estate investment firms in the world. IRM is owned by RREAF Holdings and iintoo Investments. The company recently took over management of Realtyshares’​ portfolio – once a prominent entrant in the real estate crowdfunding sector that unexpectedly collapsed in 2018 stunning the industry. Today, IRM claims over $1.5 billion in combined assets salvaged from RealtyShares.

CrowdStreet: A Platform that Democratizes Real Estate Investment Opportunities While Diversifying Portfolios (CardRates), Rated: A

CrowdStreet indicates a total average annual return rate of 25.5% across all fully realized deals, according to the company website. The company believes markets are stronger when they are more accessible, transparent, and efficient.

Since CrowdStreet launched in 2014, the company has posted over 360 projects on its Marketplace and has raised more than $800 million from thousands of investors, he said.

The platform allows accredited investors to diversify their portfolios by investing in individual projects or funds for as little as $25,000.

Finitive Receives $ 2M in Venture Debt from Silicon Valley Bank (FINSMES), Rated: A

Finitive, a NYC-based financial technology platform providing institutional investors with direct access to alternative lending investments, closed a $2m venture debt.

Bitcoin IRA to Launch Interest-Earning Crypto Accounts (Altcoin Buzz), Rated: A

Bitcoin IRA has partnered with the leading crypto trading and lending firm Genesis Capital to launch interest-earning cryptocurrency accounts.

The crypto trading firm will accept Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and ZCASH.

Crypto-powered foundation Rippleworks expands its reach (Devex), Rated: A

Galen and Larsen, who built the online lender E-Loan together, are both interested in broadening the perspectives of Silicon Valley executives who might otherwise be detached from ways to make an impact on the rest of the world.

Fintech Innovator Fundbox Named to Prestigious IDC FinTech Rankings by IDC Financial Insights (Yahoo! Finance), Rated: B

Fundbox, the B2B payments and credit network designed to facilitate and accelerate B2B commerce at scale, announced that the company ranked #92 on the 2019 IDC FinTech Rankings.

Beware Online Loan Calculators (WSJ), Rated: B

According to a study published online in the Journal of Behavioral and Experimental Finance in June, borrowers unconsciously could be manipulated into choosing a more expensive loan, depending on the calculator’s default settings.

United Kingdom

Shares in Funding Circle up over 10 per cent, after loans under management jump by more than 30 per cent (AltFi), Rated: AAA

Shares in peer-to-peer lender Funding Circle climbed over 10 percent after its loans under management soared 31 percent to £3.7bn, but the company cautioned of “an uncertain economic environment”.

It said loans under management had grown to £3.7bn compared to £2.8bn the year previous.

Funding Circle reported that loan originations were up from £1.6bn in 2018 to £1.8bn in 2019.

FundingSecure goes into administration (P2P Finance News), Rated: AAA

FUNDINGSECURE, the peer-to-peer pawnbroker and property lender, has gone into administration.

FundingSecure administration not a ‘reflection of P2P as a whole’, claims major platform (Bridging and Commercial), Rated: A

Jonathan Avery-Gee, Edward Avery-Gee and Daniel Richardson at CG & Co have been appointed administrators of the company and are working closely with the FCA.

Stuart Law, CEO at Assetz Capital, claimed that smaller P2P lenders were “clearly struggling to keep up”.

Assetz chief rules out purchase of FundingSecure loanbook

Industry raises concerns as Funding Secure enters administration (Mortgage Introducer), Rated: A

The collapse of the P2P firm has left around 3,500 investors facing an unclear future as the administrator works their way through the loans.

Starling Bank Raises £30 Million to Fund its Expansion as it Approaches its Millionth Account (The Fintech Times), Rated: A

Starling Bank, the UK digital bank, has raised £30 million in a new funding round. Merian Chrysalis Investment Company Limited is leading the round with an investment of £20 million, while Starling’s existing investor, JTC, has added a further £10 million.

Andrew Lawson joins Oodle Car Finance as chief product officer (Asset Finance International), Rated: A

Oodle Car Finance has appointed Andrew Lawson as chief product officer.

He joins from Zopa, the world’s first peer-to-peer lender, where he spent five years as chief product officer responsible for business growth during a period of expansion that saw the brand become the UK’s largest online open market lender.

Celsius Network Now Supports Tether At 12% Interest (CryptoBriefing), Rated: A

Celsius Network will begin supporting Tether (USDT), the largest stablecoin in the market, in its interest-earning wallet. That will enable users to leverage their holdings in order to receive a passive income.

Wayfair, Klarna bring flexible payments to UK shoppers (The Paypers), Rated: A

Klarna’s range of flexible payments are available to shoppers online at Wayfair.co.uk, with additional new features on Wayfair.de. Joining Klarna’s partner list, Wayfair customers across the UK now have control over how and when they pay for their purchases, with payments options such as Pay later and Pay in 3.

Six bids made for stricken reseller (Channel Web), Rated: B

Six offers have been made for welsh education reseller Gaia, which fell into administration earlier this year.

A number of lenders were also revealed to be owed hundreds of thousands of pounds, with White Oak UK and Funding Circle owed £703,000 and £500,000 respectively. HMRC is owed £866,148.

Capitalise.com launches partnership with iwoca and a high street bank to enable instant funding quotes for SMEs (Fintech Finance), Rated: B

Capitalise.com, the business funding platform for accountants, has today announced a partnership with small business lender, iwoca, and a high street bank, to launch Instant Offers. The partnership enables accountants to receive instant quotes on funding applications for their clients. Accountants benefit from offering their clients exceptional customer service with instant quotations and eligibility on suitable financial products whilst lenders can onboard high credit quality businesses, faster.

China

The Meteoric Rise and Spectacular Fall of Peer to Peer Lending in China (Lend Academy), Rated: AAA

I first wrote about the Chinese p2p lending industry later that year and introduced the west to CreditEase, the company that was the largest p2p lending platform in the world. Over the next couple of years the industry thrived with thousands of platforms launching and the total loan volume skyrocketing to over $150 billion in 2015, which was four times the loan volume of 2014.

China’s Biggest Ever Financial Scandal

We got the first inkling that something was not quite right when China was rocked by the biggest financial scandal in its history. Ezubao, one of China’s largest p2p lending platforms, collapsed as it was revealed the business was nothing more than an elaborate Ponzi scheme. Around 900,000 investors collectively lost $7.6 billion in what was the second largest Ponzi scheme the world had ever seen (Madoff being the largest).

There Will Be No LendIt China in 2019

We have held LendIt China every year since 2016 in Shanghai and I am sad to report that in 2019 there will be no event. While we have expanded beyond online lending it still represented a significant part of our business in 2018 but given the recent challenges we expect no lending companies will be interested in speaking, sponsoring or even attending this year. So, we made the difficult decision to cancel the event. We will regroup in 2020 and hopefully will be able to bring our unique event back to China.

Chinese Regulators Forcing More P2P Platform Closures With Stricter Rules (Business Times), Rated: A

The newly imposed rules by the China Banking and Insurance Regulatory Commission (CBIRC) will mainly be targeting online P2P lending companies. These companies often entail high-risk lending activities that result in massive defaults, suicide, deaths, and illegal debt collections.

Since 2017, the country has had an estimated $692.8 billion in bad loans. The sector has tried to dispose of these bad loans as best they can through different methods.

China’s Incredible Shrinking P2P Lending Industry (Caixin Global), Rated: A

The draconian cleanup campaign of China’s scandal-ridden peer-to-peer (P2P) industry has led to a three-year implosion that has put the sector almost back to where it was in 2014.

The number of functioning P2P lending platforms fell to 646 in September, a decline of nine compared with August and the lowest since early 2014 when the industry was booming, data compiled by Wangdaizhijia, an online lending research portal, show. The scale of the drop has been dramatic — at its peak in November 2015, the sector had more than 3,600 platforms.

European Union

Digital lending platform Roostify plots expansion with new investment from Santander (Housingwire), Rated: AAA

Roostify, which powers the digital mortgage platforms of JPMorgan ChaseTD BankGuild MortgageHSBC Bank USA and more, is plotting an expansion in the U.S. and internationally thanks to a new injection of funding from Santander Group and others.

International

Tax Rates on P2P Lending – Low versus High (P2P-Banking), Rated: AAA

In the countries colored in black the income tax rate is applied on interest earned on p2p lending investments. That means the individual rate of taxation depends on the other and overall income of the investor. For example in the UK the tax bands are 20%, 40% and 45% dependent on overall income. In Ireland tax bands are 20% and 40%.

Source: P2P-Banking

Banks That Can’t Keep Pace With Fintech Firms Risk $ 88 Billion Revenue Loss (Forbes), Rated: AAA

Days after it was announced that banks across the world are currently in a ‘do-or-die dilemma,’ Accenture’s 2019 Global Payments Survey reveals that 60 percent of the participants believe they will lose up to 15 percent of payments revenue – $88 billion – in the next three years after being displaced by emerging, competing financial services players.

38 percent of respondents said that big technology companies pose a competitive threat and 32 percent of those surveyed feel the same about fintech firms, which makes sense with the latter attracting nearly $11 billion through over 800 deals between 2016 and 2018.

Asia

Fintech companies need strict law to protect consumers, ensure fair business (The Jakarta Post), Rated: AAA

Indonesia’s growing financial technology (fintech) companies have called on the government and legislators to issue a new law to ensure fair business for and better protection of both the industry and consumers. The Indonesian Fintech Lenders Association (AFPI) said that fintech companies, especially those involved in peer-to-peer (P2P) lending or online lending, needed a stricter regulation to ensure that all the stakeholders, such as borrowers and investors, would receive better protection.

The Explosion of FinTech in Indonesia and how Companies like Gojek and Weyland Tech, Inc. are Winning (Investor Ideas), Rated: A

According to one recent report, “Indonesia’s fintech industry is in the midst of a period of significant growth. P2P lending recorded a triple-digit increase in 2018, while e-payment services have grown more than six-fold since 2012, prompting a surge of new foreign investment into a vibrant and increasingly diverse start-up community.”

Canada

Luge Capital raises $ 85M to invest in Canadian fintech startups (TechCrunch), Rated: AAA

There are 831 financial technology startups headquartered in or operating in Canada, according to data collected by Fintech Growth Syndicate, yet only a handful of venture capital funds specializing in the region and sector.

Luge Capital, a fintech and AI-focused venture capital fund headquartered in Montreal and Toronto, is looking to close that gap. The firm has raised $85 million for its debut fund and plans to make seed investments as small as $150,000 and as large as $2 million.

Authors:

George Popescu
Allen Taylor

The post Thursday October 24 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 21 2019, Weekly News Digest

fintechs and personal loans

News Comments Today’s main news: BlockFi hits $25M in deposits in 2 weeks. Cash-back ETF injects trouble into ETF market. PeerStreet expands product line. Funding Circle fund higher impairments drag returns. Dianrong blames Chinese regime for troubles. Today’s main analysis: New home equity loans do not significantly alter credit scores. Today’s thought-provoking articles: SoFi Money review. Can Citi, JPMorgan beat […]

The post Thursday March 21 2019, Weekly News Digest appeared first on Lending Times.

fintechs and personal loans

News Comments

United States

United Kingdom

China/Hong Kong

Other

News Summary

United States

BlockFi Receives $ 25 Million in Crypto Deposits in Just 2 Weeks After Launching Lending Products (CryptoGlobe), Rated: AAA

BlockFi Lending LLC, a New York-based “secured non-bank lender” that provides cryptocurrency-backed loans in USD to digital asset investors, has revealed that its interest-generating deposit accounts have received over $25 million in cryptocurrency.

SoFi Money Review: Online Checking (Nerdwallet), Rated: AAA

SoFi Money is an online checking account by SoFi, a company best known for its student loan refinance loans. SoFi’s account has a top-of-the-line interest rate and no monthly or overdraft fees. There’s no free ATM network, but SoFi reimburses many third-party ATM fees and doesn’t charge its own. SoFi also boasts unique perks: free career counseling and financial planning sessions.

Can Citi and JPM beat FinTech Personal Loans? (PeerIQ Email), Rated: AAA

The personal loan market has grown rapidly since 2010 and the growth has been driven by FinTechs. 

Source: TransUnion, PeerIQ

“My Chase Plan” and “My Chase Loans” – a point-of-sale financing alternative and a personal loan product respectively – that will be offered to its existing credit card customers.

LendingTree Study Finds New Home Equity Loans Do Not Significantly Alter Credit Scores (LendingTree), Rated: AAA

Home prices in the United States have rebounded to new highs since the financial crisis. As a result, American homeowners are sitting on the largest amount of home equity in history — at just over $15 trillion dollars, according to the Federal Reserve.

  • The decline in scores averaged just 13 points. At the high end, scores declined by 24 in San Jose,Calif. The smallest decline was 5 points in San Diego. Borrowers had an average score of 735 to start, so the declines are quite negligible in terms of access to credit and may have marginal impacts on the cost of credit. The highest starting credit score was 752 in San Francisco, while the lowest was 712 in Indianapolis.
  • The decline took an average of 158 days to reach bottom, which is just over five months. St. Louis homeowners saw their credit scores reach their lowest points in an average time of 101 days (3 months), while the longest decline was for homeowners in Dallas at 211 days (7 months). Loans do not appear on credit reports immediately after closing. Typically, the lender starts reporting to the credit bureaus after your first payment, depending on the lender’s reporting cycle. Thus it may take about 60 days after closing or even longer for it show up and start affecting a score.
  • Scores recovered over an average of 163 days. This is also just over five months, so the time to fall and recover are about equal. The quickest time to recover was 102 days, or slightly over 3 months, in Cincinnati. Borrowers in Chicago had the longest recovery time of 243 days, just over 8 months.
  • Scores recover within a year and begin to move higher. The complete cycle to return to the credit score prior to the home equity loan takes 321 days, less than 11 months. The shortest cycle was in St. Louis at 211 days and the longest in Chicago at 443 days, about 15 months.

As Cash-Back ETF Hits Market, Signs of Trouble Start to Mount (Bloomberg), Rated: AAA

Last week, one ETF upstart created a minor splash by doing what was once unthinkable — offering to pay investors to buy into its exchange-traded fund. That comes on the heels of eight fund providers — including JPMorgan Chase, Vanguard and BlackRock to name a few — all slashing fees in one of the industry’s most aggressive rounds of price cuts to date.

The sub-zero fee giveaway by Salt Financial, which previously ran a single $11 million ETF, is widely seen as a marketing gimmick to drum up a little PR, get customers in the door and increase its assets under management. During the first year, investors will receive 50 cents for every $1,000 in a new low-volatility stock ETF — until it grows to $100 million. After a year, a management fee of 0.29 percent, or $2.90 per $1,000, could kick in.

The race to zero, however, is very real. Fidelity Investments jump-started the no-fee push in August by offering index funds for free. In February, SoFi said it would waive charges on two planned ETFs for the first year. Last week, JPMorgan started selling America’s cheapest-ever ETF for the princely sum of 20 cents for every $1,000 invested. And BlackRock unveiled plans Wednesday to cut fees for large clients in one of its S&P 500 indexed mutual funds.

PeerStreet Expands Product Line with Residential for Rent Loans (BusinessWire), Rated: AAA

PeerStreet, a platform for investing in real estate backed loans, today announced the launch of a new loan product for private lenders: Residential for Rent loans. Residential for Rent loans have a 30-year term so borrowers can secure long-term financing for residential rental properties. This launch is in response to key market conditions: as more people struggle to finance buying a home, the rental market has continued to grow.

3 Big Reasons To Fill Out The FAFSA (Even If You Think You Earn Too Much) (Huffington Post), Rated: A

One-quarter of families don’t complete the FAFSA, according to Sallie Mae’s 2018 How America Pays for College survey. Of those that don’t fill it out, 48 percent say it’s because they don’t believe they’ll qualify for financial aid.

But they’re often wrong: An analysis by NerdWallet found that in 2017, students left an estimated $2.3 billion in federal financial aid on the table by not filling out the FAFSA.

According to Elaine Rubin, senior contributor and communications specialist at private student loan marketplace Edvisors, most Americans are eligible for some type of federal aid. In fact, it’s available to anyone with a household income below $250,000 per year, CNBC reported.

Madden lawsuit nears end, but online lenders still seek fix from regulators (American Banker), Rated: A

An 8-year-old class action that wreaked havoc on the online lending industry is finally winding down, but the lobbying push in Washington to undo its impact shows no signs of abating.

Lawyers in the case have filed a proposed settlement that would provide $9.8 million in cash and debt relief to as many as 58,000 consumers, setting up the final chapter in a lawsuit that is likely to be remembered best for the legal precedent it established.

The State of Digital Engagement for Online Lending (LendIt), Rated: A

A recent trend report by Clarity Services, a credit reporting provider, showed that online funded loan volumes grew by almost 500% between 2013 and 2017.

How Far are Most in their Digital Transformation Strategy?

  • 54% of financial institutions have developed a digital strategy, but have not yet implemented it
  • 29% of financial institutions are currently developing a digital transformation strategy
  • Only 14% of financial institutions are in the process of implementing a digital transformation strategy

How Much Will They Be Investing In Digital Transformation in the Next 12-18 Months?:

  • 65% are planning to increase spending by 10%
  • 26% are planning to increase spending by 1-9%
  • 6% have no plans to change spending

What will They be investing in over the next 12-18 Months?

  • Replace or upgrade legacy IT systems — 88%
  • Reduce operational inefficiency — 76%
  • Improve customer experience — 74%

X Financial’s Fourth Quarter Results Take Stock 5% Higher (Capital Watch), Rated: A

The stock of X Financial (NYSE: XYF) jumped more than 5 percent Tuesday morning, to $6.55 per American depositary share, after the peer-to-peer lending marketplace announced improved revenue and profit for the fourth quarter, as well as a dividend for 2018.

The Shenzhen-based company, which connects borrowers and investors on its platform, reported in a statement Monday evening that its revenue grew 18 percent year-over-year to $125.5 million during the three months through December.

Its net income, X Financial said, was $35.2 million, or 22 cents per share, at a 53 percent increase from the same period of 2017.

Why Corporates Cant Fund Early Pay Programs (Dynamic Discounting + SCF) (Spend Matters), Rated: A

If you look at the graph below, 5% of S&P 500 companies hold more than half the overall cash; the other 95% of corporations have cash-to-debt levels that are the lowest in data going back to 2004, according to Wells Fargo research. We know who those 5% are — they are the GAFA companies: Google, Amazon, Facebook and Apple.

Source:

ZestFinance Using AI To Bring Fairness To Mortgage Lending (Forbes), Rated: A

Discrimination in lending has long been a problem, shutting minority groups out of the home buying process.

ZestFinance, the artificial intelligence software company focused on the credit market is trying to change that with ZAML Fair, a new software tool that aims to reduce the instances of biases and discrimination in lending.

CoreLogic Launches PanoramIQ to Provide More Accurate and Complete Property Insights (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, today announced PanoramIQ, an intelligent property solution that delivers a more complete view of property data with more current and reliable sources than public-record data alone. Utilizing a combination of public and proprietary property datasets, a unique property ID, machine learning and advanced analytics, PanoramIQ provides lenders, mortgage industry professionals and government entities with deeper, more accurate and complete property insights, allowing clients to make better decisions in a timely and efficient manner.

White Oak Healthcare Finance Launches Real Estate Investment Vehicle with New Hires (ABL Advisor), Rated: A

White Oak Healthcare Finance, LLC announced it will broaden its product offering and enter the healthcare real estate investment market.  White Oak hired Jeff Erhardt, Paul Nevala, Mike Treiber and John Brussard to build out the vehicle, which will initially invest up to $500MM and will focus on investments in seniors housing and skilled nursing properties using triple net leases and joint-venture RIDEA structures.

Banks seek Congress’ help to block fintech path to ‘industrial’ charters  (Roll Call), Rated: A

A bank industry group is lobbying Congress to block financial technology firms, such as online lender Social Finance Inc. and payment processor Square Inc., from obtaining an obscure form of a state bank charter that would let them operate nationally with little federal supervision.

The Independent Community Bankers of America last week distributed a policy paper around Washington calling for an immediate moratorium on providing federal deposit insurance to industrial loan companies, or ILCs, which are chartered by only a few states — most notably Utah.

Form S-3 Senmiao Technology Ltd (Street Insider), Rated: A

Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.

Debt Securities. We may offer debt securities, which may be secured or unsecured, senior, senior subordinated or subordinated, may be guaranteed by our subsidiaries, and may be convertible into shares of our common stock. We may issue debt securities separately or together with, upon conversion of or in exchange for other securities. It is likely that any debt securities issued will not be issued under an indenture.

Figure Technologies, Inc. Expands Leadership Team as It Builds Out Financial Empowerment and Wealth Offerings (PR Newswire), Rated: B

Figure Technologies, Inc., a fintech company in both the home equity and blockchain space, announces that John Sweeney has joined the company as the head of Wealth and Asset Management, along with Dr. Michael Dooley, who joined as chief economist. These hires reflect Figure’s commitment to empowering consumers and building out products to improve their financial well-being.

LendPro Hires Belinda Kelton as Vice President of Sales (LendPro Email), Rated: B

LendPro LLC, a provider of Lending-as-a-Service (LaaS) products and platforms for retailers, has hired retail industry veteran Belinda Kelton as its Vice President of Sales, the company announced today. Kelton is the latest of many new hires for the fast-growing fintech company, which recently moved to a new location to accommodate new staff members and provide the best service possible to customers.

Corporate Counsel, Commercial (Go In House), Rated: B

Affirm is looking for a business-minded Corporate Counsel, Commercial with broad expertise in complex commercial transactions. This role will report to Affirm’s Associate General Counsel.
United Kingdom

Funding Circle fund sees higher impairments continue to drag returns (AltFi), Rated: AAA

The Funding Circle SME Income fund saw just a marginally positive performance in February with Net Asset Value growth of just 0.05 per cent as impairments continued to hurt performance.

Impairments reduced NAV returns by 0.7 per cent in February, said analysts at Liberum, in line with the average monthly impairment rate of recent months.

Revolut Is Testing the Limits of Finance (Bloomberg), Rated: AAA

Storonsky is getting a taste of the scrutiny that lies ahead as he tries to upend the world of banking with Revolut, his 3-1/2 year-old startup. The U.K.’s financial regulator is examining why the digital bank last summer temporarily turned off a system designed to automatically block suspicious transactions.

It was valued at $1.7 billion at its last fundraising and now has over 4 million customers after new accounts tripled in 2018. That’s about three times more than the two lenders combined and the same number of customers as foreign-exchange business TransferWise, which is four years older.

Source: Innovate Finance

CrowdProperty launches equity sale after increasing loan book by £100m (PlaceTech), Rated: AAA

The specialist peer-to-peer lender has secured £100m of loan capital as it launches a public crowdfunding campaign, already oversubscribed, that values the business at more than £15m.

Having raised £100m from an unnamed “major institution”, CrowdProperty will use the funds to expand the number of property projects it backs over the next 12-24 months.

OakNorth reports £33.9m profit for 2018 and commits to donating 1% of all future net profit to charitable causes and social entrepreneurship (OakNorth Email), Rated: A

IFISA Guide: SME loans (P2P Finance News), Rated: A

Ablrate’s IFISA offers returns ranging between 10 and 15 per cent, enabling investors to fund asset-backed loans to UK businesses.

ArchOver’s IFISA enables investors to fund secured business loans and enjoy tax-free returns of up to 10 per cent per year.

MoneyThing’s IFISA is one of the highest-paying tax wrappers that invests in secured business loans, offering annual returns of up to  13 per cent.

Assetz Capital

Returns vary depending on the account, going from 4.1 per cent to 6.25 per cent on its auto-invest products, and up to 15.5 per cent with its manual lending option.

Funding Circle

The minimum investment in this flexible IFISA is £1,000.

LendingCrowd

The Growth and Income ISAs automatically spread investors’ money across a range of loans and have variable target rates of six per cent and 5.6 per cent, respectively.

Specialist lender funding will be the key issue for 2019 – LendInvest (Mortgage Solutions), Rated: A

The situation is a big reminder to lenders that it is crucial to concentrate on building a diverse range of funding sources, rather than just one single route.

It’s something that we have put a lot of work into at LendInvest, as it allows us to lend with confidence, knowing that the funds we have promised to a borrower will be there.

The firm sent out an email on 24 January 2019 suggesting that recipients should have a “stockpile ready” as some believe Brexit “could affect the amount of food available,” while offering a £5 promotional discount on a loan.

Why investors are fleeing the ‘fear and greed’ of stock markets for peer-to-peer loans (The Telegraph), Rated: A

Investors are ditching the stock market in favour of bundled loans sold by fledgling platforms that are yet to be tested by a financial crisis.

The top 20 UK places for high net worth earners (Citywire), Rated: B

Nearly two fifths of the UK’s top earners now live in London, according to research from peer to peer lending platform easyMoney.

China/Hong Kong

China’s Online Lender Dianrong Blames Chinese Regime for its Woes (NTD), Rated: AAA

Dianrong, one of China’s biggest peer-to-peer (P2P) lenders, is laying off staff and shutting stores. The company blamed the Chinese regime for its troubles and said the absence of clear-cut policies was proving to be a heavy burden.

Dianrong shut down 60 of its 90 offline stores and laid off an estimated 2,000 employees, Reuters reported in early March.

Pintec’s Stock Rises on Steady Results During Quarter of IPO (Capital Watch), Rated: A

Pintec Technology Holdings Ltd. (Nasdaq: PT) gained 15 cents in trading by midday after reporting a slight increase in revenue and narrowed losses for the fourth quarter.

The Beijing-based tech platform facilitating financial services said on Wednesday that its revenue in the three months through December was $32.9 million, 2 percent higher year-over-year. Its net loss was $1.2 million, a 10 percent decrease from the same period of 2017. Loss per share was 1 cent.

For the full year, Pintec reported revenue of $153.1 million, 85 percent higher from the preceding 12 months, and profit of $1.1 million in contrast to a loss in 2017.

KKR Raising First Asia Real Estate Fund, Targeting $ 1.5 Billion (U.S. News), Rated: A

Global investment powerhouse KKR & Co Inc is raising its first Asia-focused real estate fund, targeting $1.5 billion as it looks to deepen its real estate portfolio in the region, said people with knowledge of the matter.

Investment firms raised $18.6 billion in 26 Asia-focused real estate funds last year, the highest since 2008, according to data provider Preqin. KKR’s U.S.-based rival Blackstone Group raised the region’s biggest real estate fund last year at $7.1 billion.

China and distressed debt top DB’s hedge funds tastes test (City Wire Selector), Rated: A

Alternative investors are increasingly drawn to Asian hedge funds and distressed strategies, according to the latest Alternative Investment Survey from Deutsche Bank.

The 2019 survey canvassed the views of 425 asset allocators running $1.7 trillion of hedge fund assets in 28 countries.

European Union

Finnest and Invesdor Merge to Combine Debt and Equity Operations in Europe (Crowdfund Insider), Rated: AAA

Finnest, an Austria based Fintech that provides debt capital to small and medium-sized firms, has announced a planned merger with Finland based Invesdor Oy. The newly formed company will see the combination of a leading Nordic equity crowdfunding platform and a top online lender serving the DACH region (Deutschland, Austria, Switzerland). The two companies will now be able to offer a full stack of debt and equity services and investments across Northern Europe as well as more numerous options for investors.

Invesdor claims over 50,000 registered users as well as a MiFID II license for 28 European countries – the first crowdfunding platform to receive approval. Invesdor reports investors, both institutional and individual, from over 150 different countries. Invesdor currently offers a unique financing portfolio in the market, from equity to loans and bonds to IPOs.

Bitbond to Work with BitGo for Germany’s First Security Token Offering (Bitbond), Rated: A

Bitbond has launched Germany’s first Security Token Offering with a BaFin approved Prospectus and will be using  BitGo’s Business Wallet. The STO has a hard cap of EUR 100 million (~USD 113 million) and will conclude in May. Thousands of investors have already joined to take advantage of early bird discounts.

The STO marks a significant milestone for the crypto asset industry, not only because it has an approved prospectus, but also because it offers tokenized debt with a predetermined maturity. Bitbond Token (BB1) holders will receive quarterly and annual payments for 10 years, after which Bitbond will buy back the token at its original value of EUR 1 per token.

India

Top 5 sectors that need upskilling: How to stay relevant in age of disruption? (Indian Express), Rated: A

The banking sector is witnessing a massive growth owing to the launch of connected products and services, business innovation and the rise of the middle class along with the emergence of new fintech areas of mobile payments, digital wallets and P2P lending. Technologies such as chatbots, blockchains and automation through robotics powered by AI are transforming the sector.

CRYPTO EXCHANGE COINDCX RAISES SEED FUNDING FROM BAIN CAPITAL VENTURES (Coin News Span), Rated: B

Bengaluru-based client leasing startup RentoMojo has raised $10 Mn serial B funding from Bain Capital Ventures and Renaud Laplanche.

Asia

Look out for 2019’s top 7 lending startups (e27), Rated: AAA

As of 2019, there are still 2.45 billion underbanked and unbanked people in the world. The more innovative lending companies there are, the faster this market will be covered and served.

October.eu (formerly Lendix) is an innovative, easy-to-use, and intuitive peer-to-peer platform for lending and investing.

The Dharma team works on a platform that lets businesses build lending products on the Ethereum blockchain.

The governing idea of Kabbage is that funding shouldn’t be complicated for businesses. So, the company makes an effort to provide entrepreneurs with up to US$250,000 in loans for which you can allegedly qualify for in just 10 minutes or at most, a day.

Founded in 2014, TurnKey Lender has already become the market’s leading intelligent all-in-one lending automation platform.

The name SoFi comes from social finance and it’s another great example of a successful peer-to-peer lending operation. Founded in 2011, the company is already a huge market player with US$30 billion worth of funded loans and 600 thousand members.

Affirm goes a different route than most alternative lenders. The idea behind it is enabling in-house financing for retail businesses. So, the store’s customers get an instant loan with zero to 30 per cent interest rates.

With quite a unique approach, Lendio offers small business an opportunity to get services and credit products from lenders with the best conditions. It’s a marketplace with more than 75 lenders on board.

Vietnam is the region’s fintech hub (The ASEAN Post), Rated: AAA

Vietnam’s strong economic growth in recent years has led to the flourishing of the nation’s digital economy. The country’s economy in 2017 was deemed to be one of the best performing in the region. Its economy saw a 6.8 percent increase in gross domestic product (GDP) – higher than the government’s initial target of 6.7 percent – making it one of the fastest growing economies in Southeast Asia.

Vietnam currently has 54 percent of its population on the internet and the number is expected to grow further in the coming years.

Data from Vietnam Briefing shows that 39,580 start-ups entered the Vietnamese market in just the first four months of 2017, a 14 percent increase from the first quarter of 2016. Within the start-up scene, the fintech sector has become the most attractive for investments, receiving US$129 million in 2016.

Travelstop Targets Fintech SMEs with Business Travel Management Platform (Fintech News), Rated: A

Co-founded by former Expedia employees, Singapore-based Travelstop is a modern, artificial intelligence (AI) powered SaaS platform that simplifies business travel, automates expense reporting for businesses in Asia, and offers insights to business owners.

The platform is quickly gaining traction from the region’s startups and fintech community, helping small and medium-sized enterprises (SMEs) and high-growth organizations including Funding Societies, Fintech News Network, RedDoorz, S P Jain School of Global Management and Dot Property better to manage their business travels.

Asia has the largest share of mobile internet traffic, with 61% of its population using mobile devices to go online.

How Ovo Has Grown to be Indonesia’s Largest Digital Payments Platform (Entrepreneur), Rated: A

After online stores, Indonesia’s leading digital payments platform Ovo has been making strides into offline stores, increasing the number of merchants that accept the payment method.

OVO has reportedly acquired local peer-to-peer lending company Taralite, a move that will pave the way for OVO to branch out into the lending business which is seen to be a potential profit-generator for the company.

TurnKey Lender Opens a New Office in Kuala Lumpur (Digital Journal), Rated: A

TurnKey Lender, a provider of intelligent lending automation, decision management, and risk mitigation solutions, announces the opening of a new office in the capital of Malaysia, Kuala Lumpur. Its main goal will be to physically represent TurnKey Lender and support the company’s operations in Asia.

With internet penetration at 85.7% in 2018, the country is perfectly positioned for the rapid growth of alternative lending initiatives in areas like peer-to-peer lending and in-house financing.

Golden Gate Ventures ties up with Hanwha to invest in Asian startups (SDF-KH), Rated: B

Golden Gate and Hanwha will focus on startups that are raising fund for ‘Series B’ stage.

Singapore-based Golden Gate Ventures confirmed on Tuesday that it has teamed up with South Korea-based Hanwha Asset Management to invest in Southeast Asian technology startups.

Authors:

George Popescu
Allen Taylor

The post Thursday March 21 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 24 2019, Weekly News Digest

millennials loan money

News Comments Today’s main news: Funding Circle, Stripe partner on small business expansion. Goldman, Citi drop Chinese P2P lenders. RateSetter attracts 75K investors. MarketInvoice gets 56M GBP in equity, debt funding. Hexindai shares credit data with Baihang Credit. Today’s main analysis: PeerIQ on bank earnings. Today’s thought-provoking articles: The link between marketplace lending and personal bankruptcy. 10 best places to […]

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

millennials loan money

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Goldman, Citi Drop Chinese Peer-to-Peer Lenders After Crackdown (Bloomberg), Rated: AAA

First came a sweeping government crackdown and a surge in defaults and failures at thousands of China’s peer-to-peer lenders. Now, in another troubling sign for the industry, some of the biggest investment banks have stopped taking them public.

Wall Street firms including Goldman Sachs Group Inc. and Citigroup Inc. walked away from U.S. initial public offerings of Chinese P2P lenders in recent months, people with knowledge of the matter said. Their concerns mainly stemmed from the timing of the deals, with an uncertain outlook for P2P companies and a slumping market knocking down valuations. In each case, the businesses went ahead with their offerings after finding new underwriters.

Marketplace Lending & Personal Bankruptcy: Cause and Effect (Lend Academy), Rated: AAA

A national wave of personal bankruptcies that began in 2008 reached a peak in the year ending September 2010, when nearly 1.6 million bankruptcies were filed.

Filings fell by 1.8 percent for the 12-month period ending March 31, 2018, compared with the year ending March 31, 2017. The data continues a national trend of declining bankruptcy filings since 2010-2011.

An interesting white paper (The Real Effects of Financial Technology: Marketplace Lending and Personal Bankruptcy) co-authored by Dr. Piotr Danisewicz, University of Bristol and Ilaf Elard, Assistant Professor of Finance at Shanghai University of International Business and Economics was released last summer.

Among the many additional conclusions Danisewicz and Elard reach in the white paper are:

  • The Madden win triggered Lending Club and Prosper, the two largest U.S. marketplace lenders, to reduce lending in the states affected by the verdict.
  • The co-authors attribute the increase in the incidence of personal bankruptcy following Madden to the reduction in marketplace lending. This hypothesis is supported by a number of further results.
  • The consequences of Madden are limited to the enforceability of marketplace loans and suggest that the increase in bankruptcy rates following Madden arises predominantly from changes in marketplace lending.
  • Danisewicz and Elard also rule out that the rise in bankruptcy following the verdict could be the result of an increase in defaults by marketplace borrowers in the affected states. This may occur if marketplace borrowers are over-indebted and default after being unable to obtain additional marketplace loans in the affected states.

Strong Bank Earnings (PeerIQ), Rated: AAA

Banks had a rough quarter for trading revenues. FICC revenues at MS dropped by 30% YoY and by 18% YoY at GSBank of America’s 15% YoY drop in trading revenues was offset by a 10% increase in consumer banking revenuesRevenues at Wells Fargo dropped by 5% YoY driven by lower consumer loan balances. WFC faces a regulatory asset cap until the end of 2019 which is hampering loan growth. JPM was the only bank where the provision for credit losses increased, driven by a reserve build for credit cards due to loan growth.

Source: PeerIQ

10 Best Places to Pay Down Debt (LendingTree), Rated: AAA

Americans’ debt balances continued climbing in 2018, with total consumer debt tracking to top $4 trillion by the end of that year. With balances climbing high, many borrowers will want to use the new year to take their debt down a peg. For those who do so, prioritizing paying off debt can bring major rewards both in the near and long distance future.

86 Million Americans Fear Maxing Out Plastic on Large Purchases (WalletHub), Rated: AAA

The holiday shopping season is over now, and many Americans are seeing the impact on their credit card bills and bank statements. During the holidays, people often make a lot of large purchases, and sometimes max out their cards in order to do so. In a nationally representative survey conducted by WalletHub, 34 percent of respondents say they worry about maxing out their card with a large purchase.

Source: WalletHub

Credit Line Increases Drive Consumer Engagement and are Most Likely to Happen at the Beginning of the Year (AP News), Rated: A

According to a new study from TransUnion (NYSE: TRU), consumers are 50% more likely to receive a credit line increase (CLI) between the months of January and May. However, credit line decreases (CLD) occur at twice the normal rate during the month of January.

Lendio Provides More Than 5,000 Kiva Loans to Support Women-Owned Businesses Around the World (Lendio), Rated: A

Lendio announced today that through continued efforts to support business growth around the world, the Lendio Gives program has funded more than 5,000 Kiva microloans. To-date, Lendio’s employee contribution and employer matching program has provided more than $130,000 in loans to underserved business owners in 78 countries.

Lendio Franchising Named No. 1 Financial Services Brand in Entrepreneur’s Franchise 500 (Lendio), Rated: B

Lendio Franchising recently ranked in Entrepreneur magazine’s Franchise 500, the world’s first, best and most comprehensive franchise ranking. Named #1 in the Business Financial Services category for the second year running, Lendio Franchising was recognized for its outstanding performance in areas including unit growth, financial strength and stability, and brand power. Placement in the Franchise 500 is a highly sought-after honor in the franchise industry; Entrepreneur received more than 1,000 applications this year, making it one of the company’s most competitive rankings ever.

Commercial Real Estate Finance Platform CrediFi Milestone: Total Capital Raised Has Surpassed $ 29 Million (Crowdfund Insider), Rated: A

CrediFi, a fintech and commercial real estate finance platform, on Wednesday it has raised an additional $6 million in funding. This funding comes on the heels of the $13 million previously raised in Series B funding. The company reported that the total amount it has raised has surpassed $29 million.

Lending Express Celebrates $ 100M Lending Milestone & California’s Golden Opportunities (Crowdfund Insider), Rated: A

Lending Express, an Israeli tech company dedicated to creating a better world of funding for SMBs, has surpassed $100 million in financing facilitated between small and medium business owners and online lenders. Lending Express also obtained state permission to open for business in California.

Fundation Launches Digital Lending Capability with Banc of California for Small Business Customers (OAOA), Rated: A

Fundation announced that it has recently launched a digital lending solution in partnership with Banc of California, enabling the California-based bank to offer a new, streamlined end-to-end solution for small businesses seeking a business loan or line of credit. The solution enables small businesses to apply for loans and lines of credit through a simple online application at Bancofcal.com and receive funds in a little as one business day.

Entrepreneurs Take Note: Success Is Within Reach (WWD), Rated: A

With insight from 600 “thriving” U.S. small business owners, a study by global financial services platform Kabbage, Inc. reveals one-third of small businesses started with less than $5,000 in start-up capital.

According to the report, particularly scrappy or thrifty entrepreneurs may want to consider starting a business in one of the three categories costing $5,000 or less “during the first six months.” Accounting; at 45 percent, online retail; at 44 percent and construction and landscaping; at 39 percent represented the least amount of start-up capital, or lowest entry barriers.

Officials caution federal workers of predatory online payday lenders during federal shutdown (News 8), Rated: A

Attorney General William Tong and Department of Banking Commissioner Jorge Perez cautioned federal workers on Wednesday to avoid predatory online payday lenders who may seek to exploit the struggling workers during the partial government shutdown.

Most People Would Not Loan Their Loved Ones Money to Start a Business (Fundera), Rated: A

The time and effort it takes to raise the funds for your startup can quickly get out of hand, which may be the reason that 29% of new small businesses run out of cash and fail.

In fact, 38% of startups are funded by friends and family members.

We surveyed 1,000 Americans on whether or not they would loan a friend or family member money to start their business and found that 82% of people would not loan a friend or family member money to start a business.

Source: Fundera

No Pay Stub? No Problem. Unconventional Mortgages Make a Comeback (WSJ), Rated: A

Lenders issued $34 billion of these unconventional mortgages in the first three quarters of 2018, a 24% increase from the same period a year earlier, according to Inside Mortgage Finance, an industry research group. While that makes up less than 3% of the $1.3 trillion of mortgage originations over that period, the growth is notable because it came as traditional home loans declined. Those originations fell 1.2% over the same period and were on track for a second down year in 2018.

North Capital Launches REITless Impact Income Strategies (PR Newswire), Rated: A

North Capital Investment Technology Inc. recently launched a new investment vehicle, REITless Impact Income Strategies (REITless), focused on lending and strategic debt investments to primarily single- and multi-family real estate development and redevelopment projects that aim to produce positive social impact in communities nationwide. The impact initiatives targeted by the company are energy efficiency, employment generation, affordable housing, and green-housing improvements that promote environmental sustainability. REITless is managed by North Capital Inc., an SEC-registered investment advisor (RIA).

BFS Capital Achieves $ 2 Billion in Financing (BusinessWire), Rated: A

BFS Capital, a leading small business financing platform, today announced it has now issued more than $2 billion in financing to over 22,000 small businesses across the United States, Canada and, through its United Kingdom subsidiary, Boost Capital.

KeyBank To Acquire Online Lending Business Laurel Road (PR Newswire), Rated: A

KeyBank National Association today announced that KeyBank and Laurel Road Bank have entered into a definitive agreement for the acquisition by Key of Laurel Road’s digital lending business; Laurel Road’s three bank branches located in southeast Connecticut are not part of this transaction. Through the acquisition, Key will enhance its digital capabilities with state-of-the-art, customer-centric technology and will leverage Laurel Road’s proven ability to attract and serve professional millennial clients.

GROUNDFLOOR Launches Real Estate Investments Specific To Georgia Residents During Federal Shutdown (PR Newswire), Rated: A

Today, Atlanta-based GROUNDFLOOR is launching new investment opportunities specific to Georgia residents. The crowdsourced real estate investing and lending platform regularly offers investment opportunities to accredited and non-accredited investors throughout the country. Due to the federal shutdown and furloughs at the Securities and Exchange Commission, GROUNDFLOOR is now resurfacing state-by-state securities to continue to offer investors the opportunity to invest on a fractional, self-directed basis in Georgia real estate.

Is community banks’ loan growth too much of a good thing? (American Banker), Rated: A

Total loans at publicly traded banks with assets of less than $20 billion rose 9.2% in the fourth quarter from a year earlier, based on Jan. 18 data compiled by FIG Partners. Publicly traded banks above that threshold have reported a 2.7% increase in loans.

Breakout Capital Finance expands Board of Directors, appoints Neil Gurvitch and Firoze Lafeer (PR Newswire), Rated: B

Breakout Capital Finance, a leading fintech innovator, announces the expansion of its Board of Directors by appointing Firoze Lafeer, company CTO, and Neil Gurvitch as an independent director.  In making the appointments, Carl Fairbank, Breakout’s Founder and CEO, said, “We continue to see rapid growth in our lending- and technology-focused endeavors.  Adding more seasoned leadership continues our expansion and growth plans.”

Samsung NEXT, NBKC Executives and Ellie Mae Veteran Join ProPair Advisory Board (BusinessWire), Rated: B

ProPair, a Silicon Valley innovator using machine learning and predictive decision-making to change how mortgage lenders are assigning and prioritizing their leads, today announced the additions of Leo Chang, Chad Cronk and Nick Hedges to its advisory board.

United Kingdom

RateSetter attracts over 75,000 investors (Bridging and Commercial), Rated: AAA

RateSetter has announced that over 75,000 investors have put money into its platform.

Since its launch in 2010, investors have earned £120m through the P2P lending platform at an average interest rate of 4.4% per year.

RateSetter currently has £830m of investment under management, including £170m invested through its Isa.

MarketInvoice secures £56m equity and debt funding (MarketInvoice), Rated: AAA

Fintech business MarketInvoice today announced it has raised £26m in new equity funding. This Series-B funding round was led by Barclays and Fintech fund, Santander InnoVentures with significant participation from European venture fund Northzone, an existing investor in the company. Technology credit fund Viola Credit, who also participated in the equity round, will provide a debt facility of up to £30m. The facility will help scale the MarketInvoice business loans offering that sits alongside their core invoice finance solutions.

Goldman Sachs’ Marcus platform reveals AUM (AltFi), Rated: A

The US investment giant said its digital bank attracted has more than £5bn in UK savings just three months after its launch.

The US investment giant debuted its online lending and deposit platform, Marcus, in the UK at the end of last summer, and pulled in 100,000 customers and £5.4bn in the final quarter of the year.

Metro Bank shares crash after loans blunder revealed (The Guardian), Rated: A

Metro Bank has revealed a major blunder in how it classifies its loan book, an admission that drove its share price down by nearly 40% on Wednesday, wiping £800m off the value of the company.

The bank, which has been opening new branches as established rivals cut back, revealed that hundreds of millions of pounds of commercial property loans and loans to commercial buy-to-let operators had been wrongly classified in risk terms, and should have been among its “risk-weighted assets” (RWAs).

Glenhawk grows team with LendInvest hire following strong start to 2019 (Property Funds World), Rated: B

Having originated GBP28.4 million of potential loans since the start of the year, and completed on just over GBP4 million, early indications are that 2019 will see accelerated demand for Glenhawk’s fast and flexible short term property finance. Wareham joins Glenhawk’s 20-strong team of real estate professionals, supporting an increasingly diverse range of borrowers across the South of England and Midlands.

China

Hexindai Begins Sharing Credit Data with Baihang Credit (PR Newswire), Rated: AAA

Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, announced today that it has connected its systems and begun sharing credit data with Baihang Zhengxin (“Baihang Credit”).

China crackdown aims to push peer-to-peer lenders out of the industry (Australian Financial Review), Rated: A

Chinese authorities have further tightened controls on the peer-to-peer lending industry, aiming to clear out as many P2P platforms as possible, according to an official document seen by Caixin.

Microlenders need to obtain licences from the regulators and meet certain minimal capital requirements. For instance, a microlender in Shanghai needs to register its business with more than 200 million yuan ($41.2 million). P2P platforms usually don’t have to meet such requirements.

Chinese investors try to storm company after P2P lender failure (Business Times), Rated: A

In the latest sign of turmoil in China’s once booming peer-to-peer (P2P) lending sector, around 80 investors in failed lender Xinhehui protested outside the Hangzhou headquarters of a related company on Tuesday, demanding a US$330 million bailout.

Mrs Xue, who would only provide a surname for fear of retaliation, said she arrived at 8am with around 80 other investors from Zhejiang and neighboring provinces, demanding payment for 2.26 billion yuan (S$452 million) of products that Xinhehui had sold, including 860 million yuan (S$172 million) worth that were due for repayment on Jan 6.

Xi Tells Cadres to ‘Prevent and Control’ Risks as China’s Economic Woes Mount (The Epoch Times), Rated: B

At a high-level meeting of senior Chinese Communist Party officials held in Beijing, Chinese leader Xi Jinping gave an opening speech on Jan. 21 that hinted at the severity of China’s economic downturn.

European Union

Fellow Finance Launches Peer to Peer Lending in Denmark (Crowdfund Insider), Rated: AAA

Finland based peer to peer lender Fellow Finance is now operating in Denmark. The company says it will offer Danish consumers access to credit while Fellow Finance investors will be able to fund Danish loans. Currently, Fellow Finance provides consumer loans in Finland, Germany, Poland, and Sweden.

Note to Irish and US parents: college not the only path for your cherished offspring (Irish Central), Rated: A

According to the student loan marketplace www.lendEDU.com, the average debt per borrower at a public college is $26,872. This rises to $31,710 if you’re inclined to a private college experience. For graduate school students – whose parents have by now presumably said, “Time to pay your own way, sunshine” – the average debt is a staggering $57,600.

International

Funding Circle partners with Stripe to help small businesses expand (PR Newswire), Rated: AAA

Funding Circle, the global small business loans platform, today announced that it has joined the Stripe Partner Program, providing businesses using Stripe with access to affordable business financing through Funding Circle. As a verified extension partner, Funding Circle now enables Stripe users to import their data directly and securely to apply for a business loan up to $500,000 — making the process faster and easier so they can get back to running their businesses.

Boost Capital ups firepower as US parent hits $ 2bn lending milestone (AltFi), Rated: A

Small business lender Boost Capital has refinanced its credit facility lifting its funding capacity to $60m, as its US parent targets European growth.

The Chelmsford-based platform, which provides business loans and merchant cash advances, said it upped its credit firepower from $40m after signing a deal with New York-based investment firm Atalaya Capital Management.

India

Matrix Partners invests in P2P lending platform LiquiLoans (Techstory), Rated: AAA

Mumbai based peer to peer lending platform LiquiLoans, one of the few players to have secured a P2P license, has now secured an undisclosed amount of funding from some of the existing investor that is Matrix partners India.

Fintech startup floated by ex-Lendingkart execs MoneyOnClick raises funding (VC Circle), Rated: A

Two former executives from online lending platform Lendingkart have quit the firm to set up a new venture in the alternative lending space, catering to consumers.

According to their respective LinkedIn accounts, the startup, which has been operational since October 2018, has already raised $2.25 million (Rs 16.02 crore at current exchange rates) as part of its first institutional funding round from undisclosed investors.

Women, non-metros topping up on credit, says BankBazaar survey (MoneyControl), Rated: A

Non-metro cities have emerged as the bigger market for unsecured credit in terms of volume than the metros in 2018, according to BankBazaar Moneymood 2019 report.

The average personal loan ticket size in non-metros is Rs 2.80 lakh compared to Rs 2.55 lakh in metros. The unsecured credit portfolio includes personal loans and credit cards which are used more for consumption activities than secured loans.

Online rental marketplace Sacorooms Rises fresh funding Pre-Series A (Times of India), Rated: A

Sacorooms, a start-up that is building co-living spaces, has closed a pre-Series A round of funding for an undisclosed amount from Mr. Broadway. The investment comes after a strategic round led by Incubate Fund and a group of investors from the real estate industry this year.

Asia

OJK Zero Down Payment Policy Drives Multifinance Growth (Tempo.co), Rated: AAA

The recent policy of zero percent down payment for vehicle credit issued by the Financial Services Authority (OJK) believed to be able to drive the performance of the multifinance industry. Businesses are confident that multi-finance companies will perform better with the new regulation.

Chairman of the Indonesian Financing Company Association (APPI) Soewandi Wiranto, said that the business expansion stated in the new regulation can increase financing industry growth. Based on APPI’s calculation, industrial asset growth for 2019 can reach up to 9 percent while the growth rate of receivables is predicted to be in a range of 6 to 7 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

Wednesday June 13 2018, Daily News Digest

Financial Strain by category

News Comments Today’s main news: Money360 surpasses $750M in commercial real estate loans closed. Attorneys defend $16M LendingClub fee. Funding Circle lending unlocked 75K jobs in 2017. Westpac ends Prospa relationship. Today’s main analysis: Should financial advice be tailored along credit and gender lines? Today’s thought-provoking articles: GreenSky look fairly valued, but there are competitive risks. 4 companies driving […]

Financial Strain by category

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Money360 Surpasses $ 750 Million in Commercial Real Estate Loans Closed (Globe Newswire), Rated: AAA

Money360, a technology-enabled direct lender specializing in commercial real estate loans, today announced it has surpassed $750 million in loans closed since inception. This includes $82.5 million in loans closed in May 2018.

Notable loans closed in 2018 include:

  • A $26 million bridge loan for a specialty retail center in Punta Gorda, FL, brought to Money360 by Mark Reichter at Q10 / Triad Capital Advisors, Inc.
  • A $15.6 million bridge loan for an office building in Houston, TX, brought to Money360 by Rich Perry at Churchill Commercial Capital
  • A $17.25 million bridge loan for a medical office in Newport Beach, CA, brought to Money360 by Scott Monroe at NorthMarq Capital, Inc.
  • A $7.9 million bridge loan for Raytheon’s industrial space in Albuquerque, NM, brought to Money360 by Jake Clopton at Clopton Capital
  • A $9.2 million bridge loan for a neighborhood center in Tulsa, OK, brought to Money360 by Mark Reichter at Q10 / Triad Capital Advisors, Inc.
  • A $5 million bridge loan for an office park property in South Bend, IN, brought to Money360 by Dean Giannakopoulos at Marcus & Millichap Capital Corp.
  • A $5 million bridge loan for a manufactured housing property and park in West Sacramento, CA, brought to Money360 by Jake Clopton at Clopton Capital
  • A $3 million bridge loan for a mid/high rise multifamily building in Detroit, MI, brought to Money360 by Robert Krupka at Gelt Financial
  • A $2.3 million bridge loan to a self-storage building in Panama City Beach, FL, brought to Money360 by Doug Brooks at Marcus & Millichap Capital Corporation
  • A $1.6 million bridge loan to a multifamily building in Macon, GA, brought to Money360 by Naveed Khan

Attys Defend $ 16M LendingClub Fee Bid That ‘Shocked’ Judge (Law360) Rated: AAA

Attorneys seeking $16 million for representing LendingClub Corp. investors in securities class actions against the peer-to-peer lending company defended their fee bid Monday to a California federal judge who previously said the amount “shocked” him, saying their work produced an “outstanding result under any measure.”

The 28-page motion filed by attorneys for Robbins Geller Rudman & Dowd LLP, lead counsel for the lead plaintiff, argues that the requested 13.1 percent cut of the $125 million settlement is reasonable in light of the results achieved, the risks…

GreenSky Looks Fairly Valued, But Competitive Risks Remain (Forbes) Rated: AAA

GreenSky followed through with its plans to go public within weeks of confidentially filing with the SEC last month – making it the largest fintech IPO in the country since LendingClub and OnDeck went public nearly four years ago. The company offered 38 million shares at $23 per share to raise $874 million (with the actual proceeds being $830 million after underwriting fees). The company’s shares have largely traded around this level since then. This points to a valuation of $4.4 billion for GreenSky – around the figure .

GreenSky’s role as an intermediary between lenders and potential borrowers with strong credit histories makes its overall business model a risk-averse one, as it bears negligible credit risk. At the same time, the relationships it has built with banks, home improvement companies and healthcare providers promise to drive growth at a steady pace over the foreseeable future, even as the company explores other growth segments.

Four companies driving the bank tech discussion, with only one a FAANG (American Banker) Rated: AAA

Facebook, Apple, Amazon, Netflix and Google garner so much attention that they have their own collective shorthand, FAANG. But at American Banker’s Digital Banking conference this week, a mostly different set of companies were top of mind: Call them SASA, or Starbucks, Amazon, Sears and Acorns.

More than 40% of the 55 million U.S. smartphone users will have made an in-store mobile payment through Starbucks’s app, and that just over 23 million consumers over the age of 14 will use the Starbucks app to make a point-of-sale purchase at least once every six months, according to Gavin Michael, head of technology for Citigroup’s Global Consumer Bank, citing data from research firm eMarketer.

Should financial advice be tailored along credit and gender lines? (American Banker) Rated: AAA

Women with credit scores below 700, according to an analysis conducted by Elevate’s Center for the New Middle Class, an independent research arm of the online lender.

Source: American Banker/Elevate

Fifty-six percent of women with subprime scores say their finances cause them significant stress. About 45% of men with subprime credit scores say the same, as well as only 23% of women with prime ratings and 16% of men with prime ratings.

Seventy percent of women with subprime credit scores work full time, versus 62% of women with prime scores.

The woman with subprime credit is 41% more likely to have children in her home than a prime woman. She is also 79% more likely to have an elderly parent living with her.

Only 39% of Non-Prime Women Believe They Have the Skills to Manage Their Finances (SC Now) Rated: A

Most surprisingly, only 39% of this group believe they have the skills to manage their finances, despite the fact that ongoing research from myriad sources have found women to be the primary financial stewards of their households.

Key findings in the research include:

  • Two-thirds of non-prime women live paycheck to paycheck.
  • They are 3x more likely to have lost a job in the last year compared to prime women
  • Only 34% of non-prime women hold salaried jobs
  • They are 4x more likely to have trouble predicting next month’s income compared to prime women
  • More than 4 out of 5 non-prime women admit to running out of money at least once a year
  • More than one quarter admit to running out of money every month
  • They are 24% more likely to say their finances cause them stress compared to non-prime men
  • Only 13% of non-prime women would have money on-hand to cover an emergency of $1200
  • Non-prime women are 6x more likely to have used a payday loan

But another myth persists: Seasonal businesses suffer most of all. SBA’s data doesn’t bear this out, showing companies across varied industries tend to follow similar patterns in terms of failure. Manufacturing-based businesses, for example, are no more protected from failure than seasonally driven businesses like restaurants and retail stores, meaning other factors determine companies’ likelihood of long-term success.

An Ohio State University study indicated that  of restaurants don’t make it past the first year. Another 2005 study amended that, saying that the 60 percent figure applied to the first three years.

With CB Insights finding that  of small business failures can be attributed to cash flow problems, it’s imperative that seasonal business owners find ways to “spread the wealth.”

Kabbage, for example, ties its line of credit to a small business’s live data, allowing the company to adjust lines of credit in real time to match a business’s seasonal needs.

Why Digital Lenders Are Tightening Their Lending Criteria (PYMNTS) Rated: AAA

In the early days of online lending, the big appeal was access to funds for potential borrowers with few, if any, options for securing capital.

According to recent reports, some of the largest marketplace lending players in the field — SoFi, LendingClub, AvantProsper — are being pushed by their investors to batten down their credit hatches and demand better credit scores from their borrowers, as well as shorter maturities so they can make more attractive offerings to investors as they look to repackage those loans into asset-backed securities.

According to KBRA, the weighted average of FICO credit scores of Prosper’s loans, packaged in ABS, increased to 717 in a March 2018 deal from 704 in a sale two years earlier. And they weren’t the only lender to see its average score go up — SoFi, increased the weighted average of its FICO credit scores to 744 in a sale earlier this year from 732 in a deal at the start of last year.

Overlooked Millionaires: Finding A Home In The Democratized Family Office Model Of Financial Advice (Forbes) Rated: A

Over the last 20 years, the number of American investors with between $2 million and $20 million in investible assets has grown remarkably. According to 

Optimal Blue, Finastra partner for pricing integration (Mortgage Professional America) Rated: B

Optimal Blue and Finastra have announced an expansion of their relationship under which Optimal Blue will be integrated Finastra’s Fusion MortgagebotPOS product.

The new integration enables banks and credit unions to provide mortgage applicants with Optimal Blue’s live pricing searches via any point-of-sale channel. Fusion MortgagebotPOS is a web-based platform that allows lenders to receive applications through every point-of-sale channel: consumer-direct via the internet, in the branch or call center, or through professional loan officers.

Direct 1031 Exchange Launches New Online Platform for Accredited Investors (Sys-Con Media) Rated: A

A new online platform is now available for accredited investors seeking direct access to Section 1031 exchange investment opportunities with the launch of real estate investment sponsor Direct 1031 Exchange. The company provides Section 1031 exchange offerings directly to investors using the Delaware statutory trust structure under SEC Rule 506(c).

Through Direct 1031 Exchange’s online investment portal, accredited investors can participate in 506(c) DST offerings sponsored by the firm with no upfront load or commission paid by the investor.

LendStreet and Its Unique Approach to the Debt Settlement Space (Lend Academy) Rated: A

LendStreet is a lender that works with consumers who are experiencing financial difficulties. These are people who have taken on too much debt and find themselves in a hole, unable to pay it all back. But rather than declaring bankruptcy, these people want to work things out and reduce their debt through a debt settlement.

This is the point when the debt settlement companies come in. LendStreet lends only to customers whose debt is being or will be negotiated by a debt settlement company. Most of LendStreet’s customers are already enrolled with debt settlement companies before getting to LendStreet. Those who come directly to LendStreet are paired with a debt settlement company to negotiate down their debt, which will be funded by a LendStreet loan.

Chris Sugden of Edison Partners (Lend Academy) Rated: A

Chris Sugden is the Managing Partner of Edison Partners, a growth equity firm based in Princeton, New Jersey. They provide growth capital for small business doing $5 million to $20 million in annual revenue, typically based on the east coast between DC and Boston. They have never invested in a Silicon Valley startup.

In this podcast you will learn:

  • The history of Edison Partners and their unique New Jersey location.
  • The difference between East Coast and West Coast entrepreneurs.
  • The three different verticals they cover.
  • The impact that Marcus will have on the broader fintech space.
  • The shift Chris has seen with the banks as they embrace fintech.
  • The interesting fintech trends Chris is focused on right now.

Radius in Boston working with fintech firm on online business checking platform (American Banker) Rated: A

Radius Bank in Boston has lined up its next fintech project.

The $1.2 billion-asset online bank is working with a Treasury Prime, a San Francisco startup, to create a business checking account. The Tailored Checking Account will allow business owners around the country to quickly open accounts online.

SME smartphone lending set to take off (P2P Finance News), Rated: A

Fintech platform Kabbage predicts that 20 per cent of US dollars lent to SMEs will be via smartphone apps by the end of 2018.

Kabbage analysed nearly 150,000 US small businesses and found an increasing trend towards lending organised via mobile devices, with the number of loans increasing more than 300 per cent.

Online Lender Accused Of Using Tribe To Shield Illegal Loans (Law 360) Rated: A

An internet lending company and others have engaged in a plot to charge illegally high interest rates on loans while attempting to use a Michigan tribe’s sovereign immunity as a shield from suit, a group of borrowers said in a proposed class action filed in California federal court Monday.

Four plaintiffs from various states claimed in their complaint that even though Big Picture Loans LLC said it was owned and operated by the Lac Vieux Desert Band of Lake Superior Chippewa Indians, loans made in Big…

Nobel laureate Kahneman says human financial advisors are still crucial (CNBC) Rated: A

Daniel Kahneman, a Nobel Prize-winning economist, said Tuesday financial advisors still play a major role in the finance world — despite recent technological disruptions in the industry — as they act as therapists for investors.

Robo-advisors are growing at a very fast rate, surpassing $200 billion in assets under management last year, according to BackEnd Benchmarking, which releases quarterly data on robo-advisors.

Lending Express Opens Shop in Silicon Valley & Adds Moshe Kazimirsky to Team (Crowdfund Insider) Rated: B

Lending Express, an AI-powered marketplace for business loans, has opened a new Silicon Valley office in San Mateo, as well as the appointment of Moshe Kazimirsky to VP of Strategic Partnerships and Business Development to support the West Coast team. The announcement comes on the heels of Lending Express’ May $2.7 million seed funding round led by Entrée Capital, iAngels, and existing investors.

PeerStreet’s CEO Brew Johnson and Leadership Team Wins Comparably’s 2018 Culture Awards in Multiple Categories (Business Wire) Rated: B

PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that it has won Comparably’s 2018 Culture Awards in the following categories:

  • Best CEOs for Diversity
  • Best CEOs for Women
  • Best Managers
  • Best Leadership Team

Robots could replace as many as 10,000 jobs at Citi’s investment bank (Business Insider) Rated: A

Robots could replace as many as 10,000 human jobs at the banking giant Citi within five years, its president told the Financial Times.

Wells Fargo bans cryptocurrency purchases on its credit cards (Payments Source) Rated: B

Wells Fargo & Co. customers hoping to use their credit cards to buy Bitcoin will have to look elsewhere.

United Kingdom

Lending through Funding Circle unlocked 75,000 jobs in 2017 (Pr Newswire) Rated: AAA

A new report published today by Oxford Economics reveals that lending through Funding Circle, the global small business loans platform, unlocked 75,000 jobs in the United States and Europe in 2017.

Peer-to-peer lender Funding Circle to create 200 UK jobs (B Daily) Rated: A

Peer-to-peer lending platform Funding Circle is creating 200 jobs in the UK.

The London-headquartered firm has this morning (June 13) confirmed plans to take on 400 new employees in 2018, half of whom will be recruited in the UK.

LendInvest’s path from adversity to opportunity (City A.M.) Rated: A

Although the online marketplace model had been proven to work – Amazon and eBay had been established over a decade earlier – LendInvest was initially both “offline” and “pretty uninteresting”. It wasn’t until 2012, with £30m investors’ capital under management, that the founders became intrigued by the role tech could play.

The path to success is littered with unforeseen obstacles, good days can follow bad, tailwinds become headwinds. LendInvest is no exception. When the company was young, raising debt finance often felt like an uphill struggle. It took many air miles and international calls, but eventually an eastern European bank offered a £2m funding line, later increased to £6m.

Ranger Direct shares end higher after bowing to activist pressure to wind up (Financial Times) Rated: A

Ranger Direct Lending operates a £128 million investment company which has faced pressure from activist investors who own almost 30% of the company.

The board proposed yesterday of winding down the company as Ares Management withdrew itself from consideration to manage the trust. Ranger’s board also suggested shareholders vote against newly nominated directors by activist investors.

Ranger Direct Lending has struggled as defaults have crept up in the sector.

Monzo launches task automation with IFTTT (Tearsheet) Rated: A

Personal finance apps offer customers insights into their budgeting and spending habits, but U.K.-based digital bank Monzo is taking that a step further by letting its customers design their own rules on how they want to interact with their money.

Monzo’s tie-up with If This Then That, rolled out in early June, lets customers automate tasks using their financial data through personalized rules. IFTTT is a web and app-based platform to help customers get apps and devices to work together. It lets users set up “if, then” rules; for example, “if I post an Instagram, post it as a native photo on Twitter,” or “if I add a new task to an Amazon Alexa to-do list, add it to the iPhone reminders app,” and so on. IFTTT’s integration with consumer financial data lets them experiment with new use cases for financial data and lets the bank learn more about customer preferences and behavior.

Collateral investors may have to join queue of creditors (Peer2Peer Finance) Rated: A

COLLATERAL investors may end up having to recoup any unpaid interest owed as a creditor of the company, the administrator of the closed peer-to-peer lending platform has revealed.

An update from BDO said its initial view was that due to section 26 of the Financial Services and Markets Act – which deems that agreements with unregulated parties are unenforceable – investors would be treated as creditors.

This means they would have to submit documentation to BDO on what they are owed and wait to see what funds can be recouped through the administration.

European Union

B2B FinTech Could Earn Index Ventures $ 2 Billion This Year (PYMNTS) Rated: A

Venture capitalist (VC) firm Index Ventures is on its way to earn $1.6 billion from its early investments in B2B FinTech, according to Forbesreports Monday (June 11). Index Ventures’ portfolio includes iZettle and Adyen, with unconfirmed reports of a Funding Circle initial public offering (IPO) that could push Index Ventures into the $2 billion mark.

LendInvest joins Luxembourg fintech hub (Finextra) Rated: B

LendInvest, the UK’s leading online marketplace platform for property finance, has become a fellow of the Luxembourg House of Financial Technology (LHoFT), the country’s leading FinTech innovation hub.

LendInvest has had a presence in Luxembourg since 2014 when it established its first Luxembourg-domiciled fund.

Fintech threatens to eclipse banks that do not adapt digitally (Financial Times) Rated: A

Writing an opinion piece for the FT BBVA Executive Chairman Francisco Gonzalez talks about the rise of fintech and big tech in banking. He explains that banks still have an advantage when it comes to security, privacy and compliance.

A new regulatory model is needed for the new era of digital banking and data. Banks need to build on what they do best and evolve to ensure they stay relevant. He believes there is a paradigm shift occurring in banking and that banks need to find a new way to support customers and build out their assets

Australia

Westpac Ends Prospa Collaboration After IPO Postponement (PYMNTS) Rated: AAA

Days after Australian alternative lending platform Prospa delayed its Initial Public Offering (IPO) indefinitely, one of its bank partners, Westpac, announced it was ending its relationship with the FinTech.

Reports in The Australian Financial Review (AFR) on Monday (June 11) said Westpac is ending its referral program that sees small business owners rejected for a bank loan linked to the Prospa platform.

Dover Financial Group calls in outstanding debts from financial planners (Australian Financial Review) Rated: A

Dover Financial Group lured financial advisers by offering to postpone payment of annual licence fees for a year or more, but the collapsed company is now calling for immediate payments of those debts, leaving planners, who are already worried about their future, furious.

India

With Rs 35 cr in disbursals, Lendbox is creating a new asset class for investors (Your Story) Rated: AAA

Basing only 20 percent of its risk assessment engine on the CIBIL score, the platform assesses a borrower’s credit-worthiness based on their social, professional, behavioural analysis, including their salary expenditure trends and limits on credit card. The founders claim that the platform takes close to 130 data points into consideration before deciding on a suitable interest rate.

The borrowers are then classified between A1 (A2 and A3) and B3, with the rate of interest ranging from 12 to 36 percent.

Ekmeet says that close to 85 percent of loan requests are denied by the platform, and only 20 percent of their total users are from Tier II towns and cities.

Asia

Kakao Bank’s chatbot will answer up to 80% of requests (Fintech Futures) Rated: A

Kakao Bank, South Korea’s largest internet-only bank, is already showing the beta version of its customer support chatbot, which is scheduled to be launched sometime this month.

The bank says that the tech will help relieve the stress on its customer services department, which receives up to 80% of requests that could be automated.

Canada

Luge Capital goes huge with $ 75m fintech funding (Fintech Futures) Rated: AAA

Initially, $50 million of the raised capital was announced in October 2017 by the Caisse de dépôt et placement du Québec (CDPQ) and Desjardins Group, two of the fund’s major investors.

Sun Life Financial, the Fonds de Solidarité FTQ and La Capitale are also “significant” participants. Luge says it may expand the fund up to $100 million in the coming months.

Real estate crowdfunding in Canada: portal insights for 2017/18 (IT Business Blog) Rated: A

Real estate online investment or crowdfunding has been a sector that has attracted significant interest in the U.S. over the last several years, with more than 100 portals launched to serve rapidly growing developer and investor interest. In fact, industry research hub crowdsourcing.org estimates that the industry will be worth more than $300 billion USD by 2025.

Latin America

Defaults the largest driver of Brazil banking spreads -cenbank (Reuters) Rated: AAA

Credit defaults have been the main factor keeping Brazilian banks from cutting interest rates to households and companies, the central bank said on Tuesday, even as benchmark rates have fallen to all-time lows.

The average cost of credit fell 1.3 percentage points in 2017 to 21.3 percent, according to a central bank report, compared with a 6.75 percentage point decline in the benchmark Selic interest rate. Spreads fell 3.8 percentage points to 18.9 percentage points.

Defaults, which reached 3.2 percent at the end of 2017 according to a widely used metric, forced banks to keep interest rates high to account for potential losses, the central bank said.

Defaults were behind an average 37.4 percent of banking spreads in 2015-2017, the largest contributor to bumping up credit costs to consumers. Other reasons were administrative expenses, taxes and financial margins, a central bank report showed.

Authors:

George Popescu
Allen Taylor

Monday June 4 2018, Daily News Digest

Average segment revenue Qudian

News Comments Today’s main news: Yirendai announces earnings results. LendingCrowd goes over 3M GBP in loan originations in May. Starling seeks 80M GBP in funds. Transferwise partners with first European bank. Today’s main analysis: Is Qudian too risky? Today’s thought-provoking articles: The most well-funded tech startups in each U.S. state. Alipay isn’t just for the Chinese. International P2P lending volumes […]

Average segment revenue Qudian

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

The United States Of Startups: The Most Well-Funded Tech Startup In Every US State (CB Insights) Rated: AAA

Using the CB Insights database, we identified the most-well funded VC-backed technology startups by state based on disclosed equity funding. We excluded funding from debt as well as lines of credit, and only considered companies that have raised at least $1M of equity funding since 2015 to date (5/23/18).

Source: CB Insights

Citi has announced a direction for a new digital bank (Business Insider) Rated: A

A digital-only bank can allow Citi to continue onboarding new account holders despite its shrinking physical presence.

And because Citi already has 10 million active mobile banking customers as of Q1 2018, which represents 25% year-over-year (YoY) growth, it’s likely that consumers with Citi accounts will continue to do their mobile banking through Citi, so it’s a good move for the firm to target another customer base by leveraging its card network and cobrand partnerships.

How Capital One sees digital identity as a business opportunity (American Banker) Rated: A

Capital One has taken a different tack, spending much of the past year building out a digital identity platform that it can potentially position as a service it would sell to businesses.

By buying the startup Confyrm and hiring its founder, consumer identity expert Andrew Nash, the bank is taking another step toward making a business out of addressing the industry’s digital identity needs, industry observers say.

Source: American Banker/Experian

Hottest Alternative Lending Options Available for Small Businesses (All Business) Rated: A

Here are some trending alternative lending options—one of them may be just right for your SME.

Revolving business line of credit-Individuals and corporations are eligible to take out revolving lines of credit; this type of credit line allows entrepreneurs to pay a commitment fee and then utilize funds on an as-needed basis.

Unsecured business loan-Secured business loans require collateral and unsecured business loans do not. If you’re an entrepreneur and would prefer not to borrow money without putting your home, auto, or business inventory (or something else along those lines) up as collateral, then seeking out an unsecured business loan from an alternative lender may be your most practical option.

Crowdfunding-This funding method involves raising capital via individual investors, friends, customers, and family. It’s about tapping into the collective efforts of a big group of people, mostly through crowdfunding platforms and social media networks.

Too broke to own a home? These startups will fund your American Dream (Fast Company) Rated: A

Loftium, a Seattle-based startup, will contribute to a buyer’s down payment in exchange for Airbnb income.

Loftium has so far closed on nearly 50 homes, says Yifan Zhang, cofounder and CEO.

Other startups are taking a similarly innovative approach to the staid, highly regulated housing market. HomeFundMe, for example, helps homeowners crowdsource down payment funds from family members, friends, and employers. Point, based in San Francisco, buys equity from existing homeowners, and then cashes out when they sell–a homeowner-friendly twist on home equity lines of credit (HELOCs).

Laurel Road, MoviePass Join Forces  (Broadway World) Rated: A

Laurel Road, an online lender and FDIC-insured bank, has announced an exclusive, first-of-its-kind partnership with MoviePass, the nation’s premier movie theater subscription service, designed to further amplify savings and value for its customers.

As part of the agreement, MoviePass customers who refinance their student loans with Laurel Road will receive a free annual membership to MoviePass.

How credit card issuers are prepping for the next downturn (American Banker) Rated: A

Is the next turn in the credit cycle right around the corner? Or is it still years away?

The answer has big ramifications for the $1 trillion credit card industry, which has enjoyed unusually strong profits in the post-crisis period, but typically suffers during recessions.

At an industry conference in New York, credit card industry executives said Thursday that they still see sunshine on the horizon. But they were also careful to make clear that they are taking steps to prepare for rainy days ahead.

2018 Rising Stars: Viral Shah (Housing Wire) Rated: B

Viral Shah is cofounder and head of capital markets at Better Mortgage, where he oversees financial product innovation, the mortgage marketplace and corporate nance. Shah’s experience includes consumer nance, capital markets, corporate development and strategy.

Shah led the acquisition and integration of the mortgage lender that Better Mortgage purchased in 2015, while concurrently running the $30 million Series A capital raise.

Shah built out the capital markets infrastructure for the company, obtaining multiple warehouse lines and establishing a loan marketplace representing $700 billion of annual demand and 70% of the mortgage market, including some of the largest GSEs, banks, hedge funds, REITS and asset managers.

PeerStreet’s Nia Patel Named One of HousingWire’s 2018 Rising Stars (Business Wire) Rated: B

PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that Nia Patel has been named to HousingWire’s 2018 Rising Stars list of young leaders to watch in the housing industry. HousingWire’s 2018 Rising Stars list recognizes talent that demonstrate leadership and innovation, inspiring not only those within their company, but also their communities and the industry at large.

United Kingdom

LendingCrowd Milestone: Celebrates Record Month For Loan Origination (Crowdfund Insider) Rated: AAA

LendingCrowd, one of the UK’s fastest-growing alternative finance lenders to the SME market, announced on Friday it is on course for continued expansion after completing loan deals totaling to more than £3 million during May, marking the p2p lending platform’s best month ever. The company also reported that despite the month having two bank holidays it also saw its deal volumes reach a fresh record and secured loans for 36 small business covering a wide range of sectors across Britain.

UK challenger bank Starling seeks £80m funding (Fintech Futures) Rated: AAA

UK challenger bank Starling is looking to raise £80 million in its latest quest for funding – and it has ended its relationship with TransferWise.

In addition to the cash injection, Starling is hiring a new international advisory firm, as it potentially hunts for action beyond the UK. Starling is already in Ireland.

Catch the budgeting bug: apps aimed at millennials (The Sunday Times) Rated: A

Chip promises to help you save “without feeling it”. You link the app to your current account (12 providers are signed up); it works out what you can afford and sends this money every few days to a savings account paying 1% interest. It’s free, regulated by the Financial Conduct Authority (FCA) and available for iOS and Android.

Plum uses Facebook Messenger to analyse your cashflow before banking money. You can invest it in peer-to-peer platform RateSetter and earn up to 3% interest (RateSetter is not covered by the Financial Services Compensation Scheme). Plum is free and available for iOS and Android.

If you are self-employed or do freelance work, Coconut allows you to track your income and outgoings and any tax you owe.

In the red: the soaring cost of middle-class borrowing (The Times) Rated: A

This week the city regulator, the Financial Conduct Authority (FCA), said charges for dipping into an unarranged overdraft, something 13 million people do each year, can be ten times higher than the cost of paying off the same amount on a payday loan.

While 19 million people use the planned overdraft that comes with their bank account, most don’t see this as debt and will also probably have paid charges.

UK financial watchdog calls for ‘radical overhaul’ of high-cost credit (Financial Times) Rated: A

The UK financial regulator called for a “radical” overhaul of rules surrounding bank overdrafts and rent-to-own businesses on Thursday, dismissing criticism that it was dragging its heels in its efforts to protect vulnerable customers.

The Financial Conduct Authority said forcing banks to give more transparent information about overdrafts would save customers more than £200m a year. The regulator said it would consider more fundamental changes in future, such as a ban on fixed fees and ending distinctions between unarranged and arranged borrowing costs.

When Tandem met Harrods: we had ‘sir’, but we didn’t have ‘dame’ (AltFi News) Rated: A

When Tandem’s banking plans went up in smoke last year, after a failed fundraise, few could have guessed that it would rise from the ashes on the wings of luxury department store Harrods’ banking arm.

But that is exactly what happened. The digital challenger completed the acquisition of Harrods Bank in January, giving it a banking licence, £80m of equity capital, £400m of deposits and a £375m mortgage loanbook. It has now launched a cashback credit card and fixed savings accounts – not to mention having signed up 100,000 customers.

In announcing that milestone earlier this week, Tandem revealed that its chief executive Ricky Knox (pictured, right-middle) had invited Harrods Bank’s 7,000 global customers to meet face-to-face in his office in the months following the acquisition.

Finance companies and retailers are experimenting with Slack (Tear Sheet) Rated: B

While no major bank has rolled out a Slack bot for customers (though they’ve done so on Facebook messenger or iMessage), challenger bank Revolut is testing its capabilities for business customers.

This week, the bank launched Revolut Connect, a feature that lets business account holders “talk” to companion apps they use frequently for crucial day-to-day functions like payroll and expense management.

China

Yirendai Announces Earnings Results (The Ledger Gazette) Rated: AAA

Yirendai (NYSE:YRD) issued its quarterly earnings data on Thursday, May 24th. The technology company reported $1.72 EPS for the quarter, beating the consensus estimate of $0.99 by $0.73, Briefing.com reports. The firm had revenue of $253.90 million during the quarter, compared to the consensus estimate of $250.75 million. Yirendai had a net margin of 21.93% and a return on equity of 51.90%. During the same period in the prior year, the firm posted $5.81 earnings per share.

Qudian: The Risky Chinese Fintech Opportunity (Seeking Alpha) Rated: AAA

QD’s average loan size is small. Roughly speaking it ranges from $100-200 per customer. The average cash credit was $136, as listed in its IPO prospectus. QD considers that these small credits pose a favorable risk-reward profile because customers are likely always to pay back their debts. Also, since their credit is short term, its risk is lower compared to longer-term credit products.

Source: SEC filings, quote QD, and author’s elaboration
Source: SEC filings, quote QD, and author’s elaboration

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

International Tuition Payment Platform Easy Transfer Receives Tens of Million Yuan in Series A Financing

This week, Easy Transfer announced that it has won tens of millions yuan in Series A financing, which was led by Zhen Fund and followed by IDG Capital. It is reported that this round of investment will be mainly used for product development, team-building and marketing.

The Hong Kong Monetary Authority is Expected to License Virtual Banks by the End of this Year

On May 31st, Hong Kong Monetary Authority (HKMA) issued the revised “Virtual Bank Recognition Guidelines”. The president of the HKMA, CHAN Tak-Lam, said that some interested parties have begun to submit applications to the HKMA. HKMA will carefully and quickly assess the applications and is expected to license virtual banks by as early as the end of this year.

Consumer Finance Company Dauron Secures Tens of Million Yuan in Pre-A Round of Financing

Dauron, an online consumer finance company, announced that it had received tens of million yuan in Pre-A round of financing from Jingbei Investment and Wanrui Factoring.

European Union

Transferwise partners with first major European bank BPCE (City A.M.) Rated: AAA

Out with the old and in with the new: digital money transfer service Transferwise has partnered with Banques Populaires’ and Caisses d’Espargne (BPCE), France’s second largest bank, to integrate its API directly into BPCE’s banking apps.

Set to go live at the beginning of 2019, the partnership between Groupe BPCE, its international banking arm Natixis Payments and Transferwise will see the fintech’s international payments API power all payments made digitally by the group’s 15.1m retail customers at the mid-market exchange rate.

Transactions will also be set at Transferwise’s low-cost 0.5 per cent fee on most routes, and will serve over 60 international destinations. Currently over 3m people use the platform to transfer more than €2m (£1.75m) every month.

How European FIs Are Building Delightful Banking Experiences (Medici) Rated: A

BBVA was the first financial institution in Spain to launch ‘Online Onboarding’via mobile in 2016, which allows anyone to open an account in just a few minutes and start banking right away. This service uses a procedure that verifies a customer’s identity through a selfie and a video call.

The Estonian eID card system is one of the most advanced in the world and serves as the basis for all of the digital services that are available in the country. The system has been in service for 16 years already and represents a highly sophisticated digital access card for all of Estonia’s secure e-services.

Monzo uses a photo of the customer’s passport or DL for identification and matches it to a video selfie; N26 uses passport/ID proof + video chat-based ID verification (in Germany, specific nationalities are also required to check at the closest post office to show their ID); similar to N26, Fidor asks for passport/ID proof + a video chat for ID verification.

International

International P2P Lending Volumes May 2018 (P2P Banking) Rated: AAA

Source: P2P Banking

So you think Alipay is just for the Chinese? (Chris Skinners Blog) Rated: AAA

It all started with a very good sum-up of Ant Financial’s recent $150 billion by Huy Nguyen Trieu, CEO @ The Disruptive Group. Ant were valued at around $50 billion when I first started to focus upon them two years ago, so a tripling in value in two years is notable, especially as it would make them the tenth largest bank in the world by value.

Second point is that valuation of $150 billion. In another conversation on social media, someone questioned that valuation (coincidentally a former member of Standard Chartered, Axel Winter, Former Global Chief Architect & Technology Strategy Head).

Source: Chris Skinners Blog

How Banks Can Stay Relevant in a Changing World (Payments Journal) Rated: AAA

The idea that we don’t care about our finances is counterintuitive. Hot new fintech start-ups and challenger banks are racing to develop apps providing evermore detailed analytics. But to make an impact and deliver real value, Brkic argues that banks need to take a step back and get better at delivering simple services that make a big difference.

Take overdraft charges. A service that alerts the consumer when they are about to go overdrawn and comes up with a solution (such as transferring money from a savings account, or temporarily extending a planned overdraft) is useful because it instantly solves a problem before it arises. For those living pay check to pay check, an avoided overdraft charge is more immediately beneficial than knowing that 10% of income is spent on dining out.

Meet the new bank. Same as the old bank

Advanced algorithms that promote generic, impersonal user experiences should be avoided. To immunise against engineers’ disease, Hammersley contends that inherently human interactions, such as customer service chatbots, should not be left solely in the hands of engineers.

Accessible Data and Artificial Intelligence: Is this the Future of Fintech? (Payments Journal) Rated: A

For organizations faced with the rise in product liability and fraud losses, AI is progressively positioned as a key tech to help robotize instant fraud detection and maximize performance in the near future. In addition, overlooked factors that influence the effectiveness of access data will include:

  • Geographical variances in data
  • Varied risk across products, apps, and channels
  • Accuracy of fraud classification
  • Relatively occurrence of fraud compared to transactions

With the advancements of AI and Accessible Data, we can add in precious metals, international currencies, peer-to-peer lending, identity protection, e-Wallet security, cloud computing access and more into the global payment experience.

Cyber, battery, sports tech win big investments (Isreal 21c) Rated: B

Lending Express of Tel Aviv, San Francisco and New York City, an AI-powered business loan marketplace with more than 55,000 customers in the US and Australia, secured $2.7 million in seed financing.

Millennials and money (Gulf News) Rated: A

Millennials make up about one-fourth of the global population today and are the inheritors of one of the largest inter-generational wealth transfers seen in human history, holding $17 trillion (Dh62.44 trillion) or about 10 per cent of the world’s private wealth. Banks and financial institutions have the challenge of catering to a newer type of customer in a rapidly changing technological environment, blurring boundaries and creating new business paradigms.

For banks, merely building a digital version of a branch is not the answer if your customers have never been to one. As author and futurist Brett King says, a bank is no longer somewhere you go to, it is something you do. Banks that are able to provide anytime, anywhere banking, combining tech and touch intelligently, stand to win.

Australia

How this fintech startup chief facilitated $ 50 million in Australian business loans without stepping foot in the country (Smart Company) Rated: AAA

Business loan marketplace Lending Express launched in Australia in 2016, and since then it’s facilitated $50 million in small business loans. But it was only last month that co-founder and chief executive Eden Amirav first set foot on Australian soil.

Now the Israeli startup has secured $US2.8 million ($3.7 million) in funding, Amirav has plans to further improve the artificial intelligence-enabled platform, and to get his message to even more Aussies.

Using artificial intelligence and machine learning, Lending Express connects small businesses seeking loans with alternative lenders. The business owner fills in an application via the online platform, and Lending Express runs an algorithm, immediately identifying the lenders that would be most likely to approve the loan.

Upcoming IPOs this week (Motley Fool Australia) Rated: A

According to ASX Ltd (ASX: ASX) there is only one IPO this week. That share is:

Prospa Group Limited (ASX: PGL)

Its principal activity is online lending to small businesses.

It’s looking to raise $146.5 million and list on 6 June 2018.

Asia

Fintech in Iran: Challenges and opportunities (Tehran Times) Rated: AAA

According to statistics published by International World Stats (IWS) until December 31, 2017, there are 56,700,000 Internet users in Iran, which is 69.1% of the population.

The internet finance in Iran is now mostly PSP-based, which offers shops online services for accepting electronic payments by a variety of payment methods including credit card and bank-based payments.

Authors:

George Popescu
Allen Taylor

Wednesday May 16 2018, Daily News Digest

Lending Tree Stock price

News Comments Today’s main news: Auto loan delinquency rate hits 5.8%. RateSetter reaches 100M GBP in investor returns. Marcus may expand to Germany. OurCrowd surpasses $1B AUM. liwwa lends $11M to SMEs. Today’s main analysis: LendingTree among the 5 worst finance sector stocks, according to Nasdaq. Today’s thought-provoking articles: 3 ways technology shifts consumer approach to debt. New reporting rules […]

Lending Tree Stock price

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Anthony Noto’s first shareholder letter as SoFi CEO outlines company values, growth areas (CNBC) Rated: AAA

But it’s the growth of new products at SoFi that will most likely attract the attention of investors, as the company tries to justify its $4.4 billionprivate market valuation.

In the letter, Noto said the SoFi at Work program, which partners with companies to help their employees pay off student loans and other debt, expanded its funded loan volume by 118 percent from a year earlier. The program, used by over 700 businesses, was launched in September 2016, so the growth is coming off a small base from last year at this time.

SoFi CEO Noto on 3 things his fintech company must do from CNBC.

Auto Loan Delinquency Rate Reaches High of 5.8 Percent (PYMNTS) Rated: AAA

Borrowers in the U.S. are defaulting on subprime auto loans at a higher rate than during the financial crisis in 2008.

Data from Fitch Ratings shows that the delinquency rate for subprime auto loans more than 60 days past due reached the highest since 1996 at 5.8 percent.

The default rate during the 2008 financial crisis was around 5 percent.

 

5 Worst-Performing Finance Sector Stocks to Steer Clear Of (Nasdaq) Rated: AAA

Based in Charlotte, NC, LendingTree, Inc. TREE operates as an online loan marketplace for consumers seeking loans and other credit-based offerings. This Zacks Rank #5 stock has a VGM Score of D. Shares of the company have lost 18% so far this year. The 2018 earnings estimates have been revised 5.7% down over the last 30 days.

Source: Nasdaq

3 Ways Technology Is Shifting Consumers’ Approach to Debt (Newsmax) Rated: AAA

The emergence of fintech and blockchain are making the loan experience streamlined and accessible to ordinary consumers, as well as to people who have issues with their credit score, businesses interested in alternative interest plans and people who are hesitant about taking loans from banks for whatever reason.

Peers Over Institutions

P2P lenders pool together smaller amounts contributed by investors and lend the money out to consumers through digital platforms. Recently, P2P platforms like Lending Club and Prosper are making available loanable amounts of around $30,000 to $40,000 at competitive interest rates and with easier application processes.

Credit Scores Matter Less

As of 2017, those aged 18-29 have an average score of just 652 which is lower than previous generations and has become an issue as they start settling down and are in need of loans for mortgages.

Fintech and blockchain, however, are starting to minimize the overall impact of credit scores in an effort to bring more financial inclusion. They can include factors such as: salary, purchasing history, educational attainment, and even social media activity.

The Drive to Decentralize

The centralized approach of financial institutions controlling the people using their systems financial activities is also being challenged.

Decentralization has been key to blockchain’s growing appeal.

 

 

Earnest vs. SoFi: Which Personal Loan Is Best for You? (Student Loan Hero) Rated: A

It’s possible to get up to $100,000 from SoFi. With Earnest, you’re limited to a maximum of $75,000.

Source: Student Loan Hero

Because you can borrow more with SoFi, you also get access to longer loan terms — up to seven years. The longest term with an Earnest loan is five years.

Finally, SoFi doesn’t have a minimum credit score requirement, while you need a score of at least 680 to qualify for a loan with Earnest.

Even though Earnest has a minimum credit score of 680, the lender also takes into account your education, job history, and other data to help determine an interest rate.

Private Equity’s Plan to Beat the Low-Cost Investing Robots (Bloomberg) Rated: A

Private equity firms smell money in the financial advice business. Last month, Hellman & Friedman LLC paid $3 billion to buy Financial Engines Inc., an online retirement planning service. Thomas H. Lee Partners LP in October took a stake in HighTower, a Chicago-based wealth adviser with $50 billion under management at the time. And in April 2017, private equity giant KKR & Co. and Stone Point Capital LLC bought a majority share of Focus Financial Partners LLC in a deal that valued the wealth manager at $2 billion.

 

Ex-Citi, Comcast execs raise $ 100M more for Fair Square credit cards (The Enquirer) Rated: A

Fair Square Financial LLC, the two-year-old, 50-worker Wilmington company that markets the Ollo credit card, says it has raised $100 million more from Orogen Group, the New York investment firm headed by former Citigroup CEO Vikram Pandit; Atairos Group, headed by former Comcast chief financial officer Michael Angelakis; and others.

Fair Square, which has lent MasterCard holders about $400 million since early last year (using the Bank of Missouri’s lending powers), is one of a string of software-intensive lenders and financial service firms that have sprung up in Wilmington in recent years, capitalizing on the area’s concentration of credit card managers and workers.

Cracking 2 Myths Of Online Lending (Benzinga) Rated: A

Of the many informative and innovative sessions powering the 2018 Benzinga Global Fintech Awards, none may be as important to the future of lending as the fireside chat between Cornelius Hurley, Executive Director at Online Lending Policy Institute, Colin Darke, General Counsel at Rocket Loans, and Jeremy Potter, Associate Counsel at Quicken Loans.

One of the main catalysts of the chat was a discussion about Hurley’s two main myths surrounding the future of lending:

  • Online lending is unregulated and is a shadow banking component.
  • There is a nexus between payday lending and online lending.

AlphaPoint Launches Framework for Real Estate Blockchain Tokens (CoinDesk) Rated: A

A longstanding real estate and private equity firm, Muirfield Investment Partners, has joined with AlphaPoint in an effort to offer its investors a more easily tradeable way to participate in the property market.

The idea is to use blockchain as a conduit for introducing more liquidity into the real estate market.

AlphaPoint’s plan is to see everything go on the blockchain. The actual asset won’t be on paper and tokenized, but that documentation will be stored using the tech. Further, it can use software to pay out dividends, if those are part of the deal, and to ensure that assets aren’t transferred to people they shouldn’t be.

Need to attract millennials? Offer student loan benefits (HR Morning) Rated: A

If you want to attract and retain millennials, it’s all about the benefits. And no perks are more sought after among this group than studen loan benefits. In this post, guest author Alyssa Schaefer, the chief marketing officer of Laurel Road, a national online lender, explains why employers can’t wait to roll out student loan benefits if they’re serious about hiring the best and brightest millennials.

BorrowersFirst Shut Down: What This Means for Current and Prospective Borrowers (Student Loan Hero) Rated: A

That’s why it’s so frustrating when the company you borrowed from sells your loan to another lender or stops servicing loans altogether.

Unfortunately, if you have BorrowersFirst personal loans, that’s exactly the position you’re in. BorrowersFirst no longer offers personal loans or manages loans for people who borrowed from it in the past.

Market Guide for Identity Proofing and Corroboration (Whitepages PRO) Rated: A

In the new guide, Gartner discusses these key findings:

  • Data breaches have led to rampant compromise of personally identifiable information (PII). As a result, correctly reciting PII is worthless as a stand-alone method of corroborating a person’s claimed identity.
  • Onerous “identity proofing” methods for new-account opening and as part of step-up or multifactor authentication use cases increase customer abandonment. This creates a competitive liability when customer attrition and market share loss exceed the potential fraud loss.
  • Many technologies used in online fraud detection use cases, such as device reputation, can be used in identity proofing and substantiation use cases. In addition, these technologies can be invoked to elevate trust during subsequent interactions.

How Peer-To-Peer Financing Could Open Up the Property Market to Millennials (Leap Rate) Rated: A

Peer-to-peer (P2P) lending has increased in popularity over recent decades, spurred on by the age of connectivity. Blockchain startups have been quick to recognize the benefits that the new technology can bring to P2P finance, directly connecting individuals who wish to exchange value without the need of any intermediaries such as banks.

Now, one startup plans to use artificial intelligence (AI) and machine learning in combination with blockchain technology to create a P2P lending platform for home loans. This could prove to be an ideal solution for frustrated millennials, who may be more open to using new technology to achieve their property ownership goals.

Beyond bitcoin: Blockchain firms look to provide social good (BizWest) Rated: B

Possible social good applications include peer to peer lending, digital identities (ideal for refugees), protection against runaway inflation, campaign finance reform, direct democratic votes, solar energy trading and freedom of speech free from censorship.

United Kingdom

RateSetter Milestone: £100 Million in Investor Returns (Crowdfund Insider) Rated: AAA

UK Peer-to-peer lending platform RateSetter has topped the milestone of returning £100 million in pre-tax interest payments to its investors. RateSetter reports accomplishing this without any individual investor losing a penny.

 

New reporting rules push down Funding Circle fund’s returns (Peer2Peer Finance) Rated: AAA

THE Funding Circle SME Income Fund (FCIF) has reported its first drop in net asset value since 2016 after adopting new IFRS 9 reporting standards.

The new accountancy standards mean funds have to include potential losses in their portfolio. The fund, which invests in loans originated by peer-to-peer lender Funding Circle, revealed its returns were down 0.6 per cent in April after allowing for a 1.1 per cent provision.

This was the first drop in NAV since the fund’s first monthly update in November 2015 when it was down 0.1 per cent. The NAV had been consistently positive up until last month.

European Union

Goldman Sachs eyes Germany for expansion of Marcus (Financial Times) Rated: AAA

As Marcus looks to launch a UK savings product soon the bank is already eyeing additional European markets; they plan to make Germany the next stop, though it might be looking at 2019 or beyond; Marcus is slowly becoming an important part of the overall Goldman strategy as they look to diversify; their consumer brand has a goal to boost Goldmans’ revenues by 5 percent in three years.

 

Azbit ICO (AZS Token): Crypto Exchange And Investment Platform? (Bitcoin Exchange) Rated: A

Azbit, found online at Azbit.com, is an online trading platform that comes with built-in margin trading and algorithmic trading tools.

A pre-ICO Azbit tokens begins on July 1, 2018.

Azbit has an electronic payment system that will provide support and processing for all online and cryptocurrency payments, then offer additional services like instant exchange, a P2P debt platform, and P2P lending backed by your crypto portfolio.

Lithuania central bank welcomes Chinese FinTech companies (English News) Rated: B

Lithuania invites Chinese companies and investors to take advantage of a friendly and flexible FinTech environment in the country which offers broad development possibilities, chairman of the Board of the Bank of Lithuania, said on Tuesday ahead of his trip to Beijing.

It is estimated that by 2024 the annual growth of the global peer-to-peer lending market will amount to almost 50 percent in the country.

MENA

OurCrowd Surpasses $ 1 Billion AUM (Finovate) Rated: AAA

Equity crowdfunding platform OurCrowd recently reached a major milestone. The Israel-based company has surpassed $1 billion in assets under management.

OurCrowd is currently backing 150 startups across the globe and has previously helped 20 startups successfully exit from funding since its launch in 2013. One of OurCrowd’s most notable investments is Hyperloop, which it backed before Virgin Group invested in the company last year.

Jordanian fintech start-up lends over $ 11 million to SMEs (CPI Financial) Rated: AAA

liwwa, an Amman-based fintech startup and a peer-to-peer lending platform, announced the issuance of over $11 million in debt to small businesses across more than 300 loans since its inception.

Africa

Cellulant Raises $ 47.5M in Series C Funding (Finsmes) Rated: AAA

Cellulant, a Nairobi & Lagos–based digital payments provider, raised $47.5M in Series C funding.

The round was led by TPG Growth’s The Rise Fund, with participation from Endeavor Catalyst, Satya Capital, Velocity Capital & Progression Africa.

Led by Ken Njoroge, co-founder and Group CEO, and Bolaji Akinboro, co-founder and CEO, Cellulant Nigeria, Cellulant provides a digital payments platform that delivers connected, flexible payment options for consumers and businesses, and works with financial institutions, governments and mobile network operators to increase transparency and expand their reach in Africa.

 

Authors:

George Popescu
Allen Taylor

Tuesday May 15 2018, Daily News Digest

McKinsey Asia Personal Financial Services Survey Customers and Digital only Banks

News Comments Today’s main news: Prosper loan originations up 27% year-over-year, over $2B co-sponsored securitizations closed. Funding Circle launches new borrower referral incentive. Renren investors seek to block asset sales. PayMate acquires Z2P Technologies. Today’s main analysis: Singapore’s biggest bank vs. China’s tech giants. Today’s thought-provoking articles: 80% of startup money goes to three states. The Sharestates story: $1B […]

McKinsey Asia Personal Financial Services Survey Customers and Digital only Banks

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Prosper Loan Originations up 27% Year-over-Year; Over $ 2 Billion of Co-Sponsored Securitizations Closed (Business Wire) Rated: AAA

Prosper today reported financial results for the first quarter of 2018. Loan originations increased 27% year-over-year to $744 million, driven by strong demand for the company’s personal loan product and stable funding.

Financial highlights include:

  • Total Net Revenue, which includes the non-cash impact related to warrants to purchase preferred stock, was flat year-over-year at $30.5 million in Q1 2018 compared to $30.8 million in Q1 2017.
  • Core Revenue(1), which excludes the non-cash impact related to warrants to purchase preferred stock, increased $11.6 million or 34% year-over-year to $45.7 million in Q1 2018 compared to $34.2 million in Q1 2017.
  • Net Loss decreased by $12.6 million to ($11.4) million in Q1 2018 compared to a Net Loss of ($24.0) million in Q1 2017.
  • Adjusted EBITDA(1) increased $13.6 million to $4.5 million in Q1 2018 compared to ($9.0) million in Q1 2017, the fourth consecutive quarter of positive Adjusted EBITDA(1) generated by Prosper.
Key Operating and Financial Metrics (Unaudited)
(in thousands)
Three Months Ended March 31,
2018 2017
Loan Originations $ 744,127 $ 585,590
Transaction Fees, Net 31,354 26,869
Servicing Fees, Net 7,184 6,154
Total Net Revenue 30,450 30,845
Core Revenue (1) 45,729 34,152
Net Loss (11,401 ) (24,021 )
Adjusted EBITDA(1) 4,520 (9,039 )

80% of start-up money goes to three states — here’s what one visionary is doing to help spread the wealth (Business Insider) Rated: AAA

Baird: And the microfinance industry is — $30 billion a year around the world is lent in $500 chunks to small businesses, near a 100% repayment rate.

Microfinance is a tool. All investing is a tool. Every microfinance bank, every bank is neither good nor bad, they’re amoral. It’s just what are people trying to do with it. I’ve seen microfinance banks that act in extractive ways and their primary goal is extract as much profit out of poor communities as possible. I’ve seen payday lenders do the same thing. I’ve also seen microfinance banks that are very good and say, “Our core goal is building wealth for the community and we’ve structured our business in a way that works for us.”

One percent of start-up investment goes to African-Americans. Two percent of start-up investment goes to women. There are a lot of people who are overlooked.  So roughly 80% of start-up investment goes to three states: New York, Massachusetts, California. If you’re in Ohio or Florida or Nairobi or Mumbai, it’s really hard to get your idea into the system.

The Story of Sharestates: From Startup to $ 1 Billion in 3 Years (Lend Academy) Rated: AAA

Now, just over a year later, they have announced they recently crossed the $1 billion mark in originations. The company did so in just over 3 years, having officially launched in February 2015, just before LendIt USA that year. They are the second company in the real estate crowdfunding space to do so and are on our list as one of the ten options available for accredited investors in the marketplace lending space.

Originations in the lending space is only one metric. Any lending company’s survival depends on the quality of the loans they are making. According to the Sharestates’ website, investors have earned an average 10.54 percent annualized return. They also report 0% loss of principal for their investors. As of last year when we checked in the company was profitable which sets them up for continued success going forward. We’ve seen very few companies in the marketplace lending space broadly achieve this goal.

BuildDirect Partners With Affirm (Globe Newswire) Rated: A

BuildDirect, the first technology platform for the home improvement industry, today announced its partnership with Affirm Inc., a financial technology company that provides transparent payment alternatives to traditional credit. Now, U.S.-based BuildDirect customers have easy access to flexible and transparent financing options to pay for home improvement and renovation materials over time. At the point of sale, shoppers will see exactly how much they’ll pay in fixed monthly installments over the term they choose.

Banks struggle to combat the cyber crime bad guys (Financial Times) Rated: A

Digital banking has been a big positive for the financial services industry, though it has opened companies to greater cyber risk; cyber criminals now have a lot more entry points when it comes to getting access to funds illicitly; banks have increased their spending on defense but it isn’t enough as they also need to construct better, more secure systems; the CEO of Standard Chartered writes in the FT that banks can better utilize the data they collect, design tech better and work more closely with governments to catch bad actors.

Blockchains Could Be the Answer to Fairer Lending Systems (Nasdaq) Rated: A

The advancement of blockchain technology, this is poised to change. Through the technology, anyone anywhere in the world can raise financing from peers without having to rely on the traditional credit scores and the often heavily bureaucratic conventional mortgage processes.

Blockchain solutions such as Homelend  are making it possible for borrowers to directly reach lenders without depending on any intermediary and with no paperwork. The whole process is safeguarded by smart contracts to ensure that all parties in the deal adhere to their part of the bargain. According to Aneeza Haleem , a senior account manager at Cognizant Technology Solutions, blockchain-powered peer-to-peer mortgage financing significantly reduces the costs involved in the mortgage process.

Will Wells Fargo hurt Zelle by improving on it? (Payments Source) Rated: A

The irony of the explosive growth of mobile P2P is this: As consumers get more comfortable with paying one another through mobile devices, they’re thinking of P2P less as a service that one should find within a bank’s app.

This is a problem for Early Warning’s Zelle, the bank-run P2P network whose main selling point is its integration with banks. It’s a sharp contrast to rivals such as Venmo, which styled itself on a social media app; and Facebook and Apple, which took their own messaging platforms and blended P2P payments into the interface.

Capital One buys digital identity start-up Confyrm (Fintech Futures) Rated: A

Capital One has acquired San Francisco-based digital identity start-up Confyrm as it seeks to capture the market for consumer identity services.

Financial details were not disclosed, but as part of the deal Andrew Nash, founder and CEO of Confyrm, has become managing vice-president of Capital One’s consumer identity services. No word on what happens to the rest of the staff.

Confyrm was founded five years ago and offers help against online fraud.

Where Bank of America uses AI, and where its worries lie (American Banker) Rated: A

Bank of America spends $3 billion developing and buying technology every year, and about three times that on keeping its existing IT infrastructure going, says David Reilly, global banking and markets technology chief information officer.

As you might expect, some of that goes to artificial intelligence technology. The bank does not disclose how much.

An old-school fraud analytics program might see a customer using a card in a place they have never used a card before and block the transaction.

AI can do better.

The one area where banks and fintechs want more regulation (American Banker) Rated: A

Banks, fintech firms and data aggregators are asking regulators to provide more clarity on how to handle consumer data and who is responsible for leaks when it is shared between firms — a request that’s seemingly a reversal from the deregulatory approach the industry often takes.

The potential liability stemming from consumer data has become a critical concern for the financial industry as more data aggregators and fintech firms rapidly enter the space, seeking access to customers’ bank account information in order to offer loans and other products.

Could US Post Offices Become Banks? Here’s How The Plan Would Work (10 News) Rated: A

Now, there are a couple different ways Congress could build banking into the U.S. Postal Service. The first approach would just cover the basics.

That means offering low-dollar checking accounts and debit cards to low-income earners. That would at least offer basic financial services to all Americans, regardless of wealth. And it probably wouldn’t be too tough politically because the big banks typically aren’t interested in these customers.

But Gillibrand’s proposal would go further, allowing the postal service to also make loans of up to $1,000 with a super low interest rate around 2 percent, even to the poorest Americans. Because many of those loans would be at risk of not being paid back, some experts say the interest rate will have to be higher, maybe 25 percent. But that would still be a lot lower than rates from payday lenders, which often have people pay back three or four times what they borrowed.

Citizens Financial To Launch Online Consumer Bank (PYMNTS) Rated: A

Citizens Financial Group announced on Monday (May 14) plans to launch Citizens Access, a nationwide direct-to-consumer online bank.

In a press release, Citizens Financial said the digital platform will offer FDIC-insured deposits products aimed at serving people who want to save and want the flexibility of an online banking service. The company said it will provide digital deposit services at attractive rates and lower costs to help consumers save more for the future. The platform will be launched in the third quarter and will be available throughout the U.S.

 

Now Is the Time to Refinance Student Loans (Pharmacy Times) Rated: B

Refinancing your student loans from pharmacy school can potentially save you a significant amount of money while providing the convenience of making one payment a month. Keep in mind refinancing may not be for everyone. Individuals with a poor credit history, low salary from a pharmacy residency or fellowship, or those who want to keep the provisions in federal loans may want to closely consider their options before jumping right into refinancing their loans.

United Kingdom

Funding Circle launches new borrower referral incentive (Peer2Peer Finance) Rated: AAA

FUNDING Circle is offering £1,500 in Amazon vouchers to anyone who refers a business that takes out a loan of £25,000 or more with the peer-to-peer lending platform.

The UK’s third-largest lender to small businesses said the borrowers may need the cash to grow, refurbish, buy stock or equipment, hire more staff or simply boost their cash flow.

HMRC updates crypto investors on tax confusion (Peer2Peer Finance) Rated: A

However, a HMRC representative has told Peer2Peer Finance News that the tax office will deal with cryptocurrency related tax bills “on a case-by-case basis”.

The 2017-18 tax year saw huge volatility across the cryptocurrency sector, with Bitcoin reaching a high of £13,840 in mid-December before ending the tax year at approximately £4,750 per coin. This has led to confusion among retail investors regarding their tax liability, particularly if they sold out of the market at a high, then reinvested the profits only to see any gains wiped out.

Frederic Nze of Oakam (Lend Academy) Rated: A

In this podcast you will learn:

  • What was the catalyst that led to the founding of Oakam.
  • The loan products that Oakam offers.
  • The difference between small dollar loans in the US and the UK.
  • How Oakam is able to find their customers.
  • What percentage of their customers apply for a loan on a smartphone.
  • Why they still have physical stores where people can apply for loans in person.
  • How they have refined their underwriting models over the years.
  • How they are dealing with increased fraud via their online channels.
  • The interest rates they charge.
  • How their customers are able to reduce these rates for future loans.

Technology not size is key to banking success (Financial Times) Rated: A

Antony Jenkins, former CEO of Barclays and now head of 10x Future Technologies, writes in the FT that technology is key to the battle with banks; having technology that is more nimble and focused on the customer will help to better position challengers; UK challengers banks have found it hard to compete against the big names, even with recent consolidation; understanding what the customer needs most and allowing them to access services anytime and anywhere is what firms should focus on.

Fintech most popular sector for HNW investors (Investment International) Rated: B

Capitama’s current registered investors have a total annual investment capacity of £7.6bn. Of this total capacity, investors have expressed an annual investment capacity of £5bn into private equity opportunities, with £2.3bn total annual investment in Debt and Income opportunities. The interest of the registered investors in Philanthropic and Social Impact opportunities currently stands at £300m per year. This is an additional theme on Capitama given the rise in interest in these organisations from wealthy individuals and organisations.

69% of Capitama investors are interested in fintech investment opportunities and 67% want to see software and technology deals. Of the nine different investment types available on Capitama, Growth funding is the most popular, with 83% of Capitama registered Investors interested in this area, followed by Early stage investments (72%), Buy-outs (63%), and Real Estate (47%).

 

 

China

Renren Investors Seek to Block Asset Sales to Chief, SoftBank (Bloomberg) Rated: AAA

A group of Renren Inc. investors are trying to block the private sale of company-owned assets to a consortium that includes its own top executive and major shareholder SoftBank Group Corp.

Renren announced the complex deal in April, which it said was necessary to address concerns that the SEC might deem it an investment company — forcing its delisting if it failed to obtain relevant licenses.

The letter accused management of trying to transfer the assets at values equal to or lower than their book value, neglecting their duty to smaller shareholders and misrepresenting certain financial statements. For example, it says the shares in SoFi — one of America’s biggest student loan refinancers — are being sold at a valuation of $269 million when they could be worth double that amount.

US online lending model is unproven, Eisman of The Big Short fame says in Hong Kong (South China Morning Post) Rated: AAA

Steven Eisman, famous for successfully shorting the US subprime market before the onset of the 2008 financial crisis, has said the online lending business model used in the United States is unsustainable, and that losses from Canadian mortgages could widen.

The one pocket of financial market anomaly in the US was online lending, where, he said, the underwriting of peer-to-peer credit was unproven, as selling a loan to investors such as hedge funds and other financial institutions was an unsustainable business model.

“The problem [with P2P lending] is that selling a loan [online] is not the same as selling a book. You buy a book on Amazon and that’s the end of the transaction. When you make a loan, that’s the beginning of a relationship. The question is how you manage that relationship,” said Eisman.

Soft Chinese Tech IPOs Test Next Wave of Listings (Wall Street Journal) Rated: A

More than a dozen technology companies from China are rushing to go public abroad, in an enticing opportunity for investors but one that has generated poor returns recently.

Shares of most Asian tech companies that have listed in New York and Hong Kong since the start of 2017 have notched lackluster performances, with the bulk trading below their initial public offering prices after strong early gains.

European Union

Bondora Go & Grow – Bondora Rolling Out New Product (P2P Banking) Rated: AAA

Go & Grow is designed for the passive investors as hands off p2p lending. One of the main advantages is that Bondora says it is tax optimised.

The Bondora Go & Grow product features a target interest rate of 6.75% which will accrue daily. It runs completly on autoinvest. The investor just needs to join it and pay money into the Go & Grow account (or transfer it from the normal Bondora account). The Go & Grow account promises daily liquidity. There is a 1 EUR withdrawal fee making small withdrawals expensive but for portfolios of 1000 EUR or more and usual investment horizons this fee is negligible.

Three Year Old Fintech Mintos is Profitable (Crowdfund Insider) Rated: A

Latvian Fintech Mintos is reporting a profit in its brief three year old history. According to the company, the global online marketplace for loans has seen their revenue increase more than four-fold in 2017 to € 2.1 million generating a net profit for the year of € 197,000. Mintos says it has experienced significant growth, making it the “peer-to-peer lending market leader for continental Europe” with a 38% market share.

In aggregate, Mintos has topped € 660 million in investments by investors and the company expects the amount of loans funded to reach EUR 1 billion before the end of this year. As of May 2018, Mintos claims more than 58,000 investors using the platform and this number is expected to surpass 100,000 at some point in 2017. Currently, investors may expect an average 12.1% rate of return.

International

The 30 most valuable VC-backed companies in the world (Pitch Book) Rated: AAA

Ridehailing giants Uber and Didi Chuxing, based in San Francisco and Beijing, respectively, lead the list of most valuable private companies around the globe. And moving down the rankings, the pattern set at the top continues. A total of five of the companies are in the ridehailing industry, and 26 of the 30 are based in either the US or China.

 

Source: Pitch Book

What is Libra Credit: Digital Assets as the Future for International Credit (Coin Central) Rated: AAA

Libra Credit is offering a decentralized lending Ethereum-based ecosystem that helps users get open access to credit anywhere and anytime.

As long as a user has digital assets, they will be able to borrow money from Libra Credit by using those digital assets as collateral. Additionally, these users will be able to build an international credit history – a concept that Libra Credit and its partners plan to push to be recognized globally.

Source: Coin Central

Libra Credit plans to charge a fixed 8% annual interest rate charged by Libra Credit, which is party enabled by its partnerships with traditional finance institutions. The rate is competitive with that of other peer-to-peer lending platforms such as Lending Club and Salt, but isn’t tied to the availability of a peer match.

Source: Coin Central

How Misbehaving Australian Banks Are Causing Global Pain (Bloomberg) Rated: AAA

Australia’s four biggest banks — Commonwealth Bank of Australia, Westpac Banking Corp.National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd. — have been plagued by a string of scandals. The accusations run the gamut from giving misleading financial advice to trying to manipulate a benchmark interest rate. Simmering public resentment — stoked by a sense banks were gouging fees to fuel record profits and executive pay — boiled over last year when Commonwealth Bank was sued for systemically breaching anti-money laundering rules.

The government has announced tough new penalties for corporate wrongdoing and beefed up the regulator’s powers; analysts have trimmed earnings forecasts and speculate future legislation could force the biggest banks to sell off advice businesses.  All this comes at a time when bank profits are under pressure from a slowing housing market, rising costs and increased competition. Most of the banks are trying to simplify their operations and sell non-core operations.

Citi Inks $ 100 Million Trade Finance Deal With Asian Development Bank (PYMNTS) Rated: A

Global financial institution Citi is expanding its existing partnership with the Asian Development Bank (ADB) to share risk in trade finance transactions, reports in The Financial said Friday (May 11).

The ADB’s Trade Finance Program reached a deal worth $100 million with Citi that sees the financial institutions (FIs) sharing risk on trade finance transactions in an effort to bolster support for trade and access to finance across Asia.

 

Australia/New Zealand

FINNIES 2018: Here are all the finalists for Australia’s fintech industry awards (Business Insider) Rated: A

89 companies and individuals were chosen for Australia’s only industry-backed fintech awards, from a record field of more than 200 entries.

Excellence in Business Lending
● Finstro
● Prospa
● Spotcap Australia
● The Invoice Market – tim
● Trade Ledger

Excellence in Consumer Lending
● HashChing
● MoneyMe
● MoneyPlace
● RateSetter Australia
● SocietyOne

Robot financial adviser granted FMA exemption (Radio New Zealand News) Rated: A

The country has its first robot financial adviser after KiwiWealth was given an exemption by the Financial Markets Authority from the current law which requires humans to give financial and investment advice.

But Mr Bishop said it would still have human advisors offer detailed advice and have control of the robot.

India

PayMate Acquires Digital Lending Platform Z2P Technologies to Benefit SMEs (BW Disrupt) Rated: AAA

PayMate, an early pioneer in India’s payments industry and a leading player in electronic Business-to-Business (B2B) payments space, announced today the acquisition of Z2P (Zaitech Technology Pvt. Ltd.), a digital lending platform which provides hassle-free and real-time credit using social and banking data along with proprietary analytics and AI.

The acquisition is expected to be completed by May 2018 and it follows the announcement in February of this year by PayMate of its B2B partnership agreement with Visa.

As a result of the acquisition, PayMate acquires an innovative and proven lending solution in Z2P, which when combined with PayMate’s proprietary B2B payments platform will revolutionize the way businesses manage their payment operations, cashflow, and access to growth capital. PayMate plans to partner with banks and NBFCs to improve the flow of credit to SMEs.

Canada

Last week, Power Financial CEO Jeff Orr told reporters he plans to invest more money in fintech startups as the company looks to find technologies that can be incorporated into its business model and avoid disruptions that have hurt other sectors.

Widely known on the Street for its empire of financial advisers and investment products, Power Financial has spent $320-million in the fintech sector – with more than half the funds being allocated toward online robo-adviser Wealthsimple.

Asia

Singapore’s Biggest Bank Takes on China Giants in Fintech Battle (Bloomberg) Rated: AAA

 

Almost 55% of customers say they would consider branchless digital-only bank

Source Bloomberg

Gupta credits his early recognition of the threat to his early days in Citigroup’s transaction banking division, unusual for a bank CEO, who tend to hail from the retail or investment banking arms of their institutions. That background taught him both the nuts and bolts of banking and the importance of technology, Gupta said. He also dabbled briefly but unsuccessfully in the startup world, when he quit Citigroup in 2001 to found an Internet portal in India, around the time the dotcom bubble was bursting.

Latin America

Morgan Stanley Goes After Brazilian FinTech Market (PYMNTS) Rated: AAA

Bloomberg, citing four people with direct knowledge of the matter, reported that Morgan Stanley purchased $14 million in local subordinated bonds from online consumer lender Geru Tecnologia e Servicos. The Geru bonds, which the company issued in December of 2017, have a four-year maturity and pay about 11.2 percent each year, noted the report.

The company is also reportedly in talks with international investors about raising $50 million via an equity round that QMS Capital is handling. QMS has a 10 percent stake in Geru. General Atlantic could also be an investor in the round of fundraising, noted the report.

Authors:

George Popescu
Allen Taylor

Thursday May 10 2018, Daily News Digest

Quarterly Originations

News Comments Today’s main news: Quarz Capital Management outlines proposals to unlock >70% returns in LendingClub share price. Sharestates surpasses $1B in loan originations. Funding Circle hires first female NED. Today’s main analysis: Review of LendingClub’s Q1 2018 earnings results. Today’s thought-provoking articles: LendingTree’s monthly mortgage offer report for April 2018. Crowdfunding in the absence of liquidity constraints. Digitization […]

Quarterly Originations

News Comments

United States

United Kingdom

China

European Union

International

News Summary

United States

Quarz Capital Management Outlines Proposals to Unlock Return of >70% in the LendingClub’s Share Price (PR Newswire) Rated: AAA

Quarz Capital Management, Ltd. (QCM), an investment manager, today issued a letter urging LendingClub to take immediate and decisive steps to address the severe undervaluation of its share price and unlock a potential attractive total return of >70% for shareholders.

US ONLINE MARKETPLACE LENDING BEHEMOTH TRADING AT ‘STARTUP’ VALUATION
– POTENTIAL TOTAL RETURN IN EXCESS OF 70% OVER THE NEXT 3 YEARS –

LendingClub is the largest online lending marketplace platform in the US with an estimated ~50% market share1. The firm is projected to generate more than $700million of revenue on ~$11billion of loan originations in 2018E. LC’s substantial loan origination volume of more than $35billion since 2006 and its proprietary credit data increase the effectiveness of credit and risk models and enable the largest institutional investors to undertake the rigorous due diligence required to allocate capital on its platform.

Recommendation 1. Emphasize on cost control to increase profitability

Recommendation 2. Improve alignment of compensation system for top management

Recommendation 3. Increase shareholder return on sizeable cash holdings

LendingClub Q1 2018 Earnings Results Review (Lend Academy) Rated: AAA

During the first quarter, LendingClub is typically affected by the seasonality of the lending business so it’s beneficial to look both at the last quarter as well as the prior year period. In the first quarter of 2018, LendingClub posted originations of $2.3 billion. This represents a 5% decrease from the previous quarter, but an increase of 18% from the prior year period.

Source: Lend Academy

Revenue came in at $151.7 million, down 3% from the previous quarter but up 22% from the prior year period. They incurred a GAAP net loss of $31.2 million which included legal expenses related to legacy issues of $17 million.

Source: Lend Academy

 

Here’s Why Lending Club Is Soaring Today (The Motley Fool) Rated: A

The company called for 20% growth in its 2018 outlook, so 22% revenue growth is even better than expected. And, the company’s full-year outlook calls for total revenue in the range of $680-$705 million. At the midpoint, this implies average revenue of more than $180 million per quarter for the rest of the year. Considering that the first quarter’s revenue was “just” $151.7 million, this represents some impressive growth ahead.

Q1 2018: LendingClub Platform Update (Lending Club) Rated: A

During the first quarter of 2018, we continued to observe that credit performance across the industry is returning to long-term averages and interest rates are rising across fixed income assets.1 On the platform, we continue to see both of these trends in action: investors show higher demand for higher quality assets and are looking for higher interest rates overall.

Sharestates Surpasses $ 1 Billion in Loan Originations; Celebrates With $ 100,000 Giveaway to Investors (PR Newswire) Rated: AAA

Online real estate investment platform, Sharestates, today announced they have surpassed $1 Billion in loan volume – an incredible milestone that showcases their continued growth in the real estate investment space. To celebrate the achievement, Sharestates is giving away $100,000 to mark the occasion.

LendingTree Releases Monthly Mortgage Offer Report for April (PR Newswire) Rated: AAA

LendingTree today released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.

See the full report here.

CRE Crowdfunding Firms Continue to Scale Up Platforms (National Real Estate Investor) Rated: A

Crowdfunding firms have put a lot of effort into educating accredited investors on real estate crowdfunding and real estate investing in general. Those efforts are starting to pay for firms such as CrowdStreet. The firm hit a major milestone in March with more than 99,000 registered investors on its platform. CrowdStreet also is generating a high volume of repeat investors that are using crowdfunding to create diversified real estate portfolios with different sponsors, property types, geographic markets and risk profiles, notes Tore Steen, CEO, CrowdStreet.

The average investor on CrowdStreet has five investments in their portfolio, and over 20 percent of investors on CrowdStreet have invested more than $1 million across 12 unique investments.

Some crowdfunding platforms, such as Fundrise, Realty Mogul and Rich Uncles, have introduced e-REITs as a way to reach non-accredited investors and expand their potential customer base. But for the most part, crowdfunding firms are firmly focused on raising capital from accredited investors.

Groundfloor is one of the few crowdfunding platforms that is providing direct investment opportunities to non-accredited investors.

Banks in constant game of catch-up in combating mobile fraud (American Banker) Rated: A

Even as banks and other financial firms have invested heavily in technology designed to protect customers’ data, fraudsters have become more and more aggressive in trying to steal consumers’ identities to open accounts, take out loans or intercept payments.

According to ThreatMetrix, a global cybersecurity network used by banks and e-commerce firms to help determine the authenticity of digital transactions, 210 million attempted attacks were made on its network during the first quarter of 2018, a 62% increase over the same period last year.

Cohn says starting ‘digitized’ bank one option for next job (American Banker) Rated: A

Gary Cohn, the former director of the White House Economic Council, said he’s still weighing options for his next role but one possibility is a digital bank.

“I do have an idea for a company,” Cohn, who was president of Goldman Sachs before joining the Trump administration, said Tuesday in an interview on CNBC. “It would be an interesting concept playing on the knowledge I know from the banking world, in running a regulated bank, but in a digitized world.”

Where big banks fear to tread (Financial Times) Rated: A

Bank accounts for small businesses is an area of fintech not yet solved; Azlo is looking to fill that void as they believe banks have built their small business offering for the traditional small business owner; the new age business owner doesn’t have years of tax returns to share, providing accounts for them is not a risk banks want to take; Azlo also plans to move into loans later as an alternative to overdraft fees; they believe a straightforward, transparent offering will allow them to serve the type of small business banks have overlooked for years.

How Northwestern Mutual is using LearnVest to build advisory services (Tearsheet) Rated: A

Northwestern Mutual is growing its advisory services, building on the technology and expertise of LearnVest, which is currently shutting down and preparing for a rebrand as a content site this year.

In a statement, Northwestern Mutual said it wants to serve customers wanting an “end-to-end experience” with a human adviser using LearnVest’s digital planning platform, alongside a new content site. The integration also allows the parent company to concentrate on full-scale financial planning — a message consistent with a recent job posting that noted the company is scaling its technology and personal finance approach to reach millions of people across both LearnVest and Northwestern Mutual brands.

Bitcoin Sees Wall Street Warm to Trading Virtual Currency (The New York Times) Rated: A

The parent company of the New York Stock Exchange has been working on an online trading platform that would allow large investors to buy and hold Bitcoin, according to emails and documents viewed by The New York Times and four people briefed on the effort who asked to remain anonymous because the plans were still confidential.

Rebundling the bank: an interview with Renaud Laplanche (AltFi News) Rated: A

It’s clear that Laplanche has designed Upgrade from the start with scale in mind. Little more than a year after launching its first product, the company has 250 staff across three centres, San Francisco, Phoenix, and Montreal, and its series A funding round was no minnow at $60m. Originations are running at $100m a month, having reached a level after a year that it took Lending Club more than six years to reach. Laplanche said in April he expects to originate $2bn of loans this year.

Laplanche is scathing about credit cards, labelling them “fundamentally bad products”. They are expensive – the average interest rate on the US’s $1.03 trillion of balances is 17 per cent, he says, which rises to perhaps 25 per cent once fees are accounted for – and borrowers can run up debts without having to pay down the principal every month as they would with a loan. Many don’t even realise they are taking out a loan, and card issuers never use the word.

California bank goes online competitors one better (Banking Exchange) Rated: A

First Foundation Bank, an 11-year old $4.5 billion-assets bank headquartered in Irvine, Calif., gets that message. Lorrie Asker, senior vice-president, commercial banking, says she’s heard from many clients that they handle their finances and their banking between 10 P.M. and 2 A.M. In the Age of Amazon, everyone, she says, craves immediate online availability of services, including banking.

Marketplace business lenders frequently point out that busy small business owners’ lives often don’t synch with “bankers hours.” Being able to apply for credit with online players like Kabbage or OnDeck any hour of the day is a much touted advantage. It plays to the credit hungry who find their credit by Googling for it.

10 tips to beef up your crowdfunding campaign (Born2Invest) Rated: A

Researchers from Georgia Tech checked out nine million phrases culled from 45,000 Kickstarter campaigns, and they discovered the most-used phrases from fully funded campaigns versus those that failed.

Some platforms to consider include:

IndiegogoA popular crowdfunding platform that is home to mostly technological innovations. Aside from this, the platform also offers initial coin offerings (ICO) of new cryptocurrencies.

SeedInvestThis crowdfunding platform has a selection process for startups it wants to help out. While the company only accepts one percent of startups that apply, it presents a selection of highly vetted businesses.

StraightUpMade for real estate crowdfunding, the company invests along with its clients. If a client finds a project interesting, StraightUp also supports it by participating in the crowdfunding.

LendUp Bolsters Leadership Team Across Finance, Engineering, Credit Card Product, InfoSec, And Legal, (PR Newswire) Rated: B

LendUp, a fast-growing fintech firm for the emerging middle class, today announced a number of executive hires, including a General Counsel and VP of Engineering, as well as new heads of Capital Markets, Credit Card Product, and Information Security. These appointments will help LendUp expand the scope of its affordable, consumer-friendly products, as it becomes a first-of-its-kind destination for responsible spenders, savers, and strivers.

Beyond Spare Change: Debt Payment Startup Qoins Wins Country’s Largest Fintech Prize (Hypepotamus) Rated: B

Qoins, an Atlanta-based startup that rounds up users’ spare change to help them pay off their debt, took home the largest equity-free cash prize for startups in the country as the winner of the Fintech Innovation Award Challenge at this week’s FinTech South conference. The audience was able to vote on which of four finalists would receive the $50,000 check during a live pitch event.

4 Tips for Finding the Best Online Mortgage Lenders (Nerd Wallet) Rated: B

Since not every lender offers a fully digital mortgage and your experience can differ from one lender to the next, it’s a good idea to find a company that offers an online experience that meets your expectations. These four tips will guide you to the right fit.

  1. Know who offers the loan you need with qualifications you can meet
  2. Evaluate the customer service
  3. Find out if an online application is right for your situation
  4. Test-drive online lender platforms by getting preapproved

Laurel Road Named Winner Of Best Consumer Lending Product Category In 2018 Fintech Breakthrough Awards (PR Newswire) Rated: B

Laurel Road, an online lender and FDIC-insured bank, today announced that its online student loan solution has been selected as winner of the “Best Consumer Lending Product” award by FinTech Breakthrough, an independent organization that recognizes the top companies, technologies and products in the global fintech market today.

United Kingdom

Funding Circle, the UK’s biggest peer-to-peer lender, will this week take another step towards a £2bn London flotation by naming its first female non-executive director.

Sky News understands that the company, which is targeting a listing soon after the summer, will announce that former O2 executive Cath Keers is joining its board.

Ms Keers, who is an experienced non-executive director in the retail, technology and logistics industries, will bolster Funding Circle’s public market credentials as well as improving the gender balance in its boardroom.

NatWest fintech investments bear fruit as SME loans platform goes live (Computer Weekly) Rated: A

NatWest has launched a fintech (financial technology) lending platform aimed at small to medium-sized enterprises (SMEs) that cuts the time it takes to apply for a loan to 10 minutes. The project will help the bank fight off competition from peer-to-peer lenders.

The platform, known as Esme Loans, offers SMEs loans of up to £150,000 and makes it easier to apply for them by using the latest technology, including application programming interfaces (APIs).  The entire process is online and paperless, with customers able to apply in less than 10 minutes.

China

Six and the Citi unveil API partnerships in Hong Kong (Fintech Futures) Rated: AAA

Citi has made six API partnerships with corporations in Hong Kong as it looks to improve its digital banking services.

The six partnerships are:

  • HKTVmall integrated with Citi Pay with points API
  • EGL Tours integrated with Citi Pay with points API
  • AIA Hong Kong integrated with Citi Customers API
  • Octopus App integrated with Citi onboarding, cards and money movement APIs
  • Citi Visa Fetch App
  • Zurich Hong Kong integrated with Citi Customers API

China’s peer-to-peer lending hits the skids (Nikkei Asian Review) Rated: A

Peer-to-peer lending is slowing dramatically in China as a looming clampdown on the industry spurs platform providers to throw in the towel — sometimes after just a few months in business.

The balance of peer-to-peer loans, or financing between individuals, came to 1.29 trillion yuan ($202 billion) on April 30, up a mere 6% from the end of 2017. That increase represents a sharp slowdown from the 50% surge last year and the 100% jump in 2016, according to industry information provider WDZJ.com. Less than 200 billion yuan worth of contracts were signed for April, down around 20% year on year.

European Union

CROWDFUNDING IN THE ABSENCE OF LIQUIDITY CONSTRAINTS (All About Alpha) Rated: AAA

A forthcoming issue of the Journal of the European Economic Association will carry a study arguing that crowdfunding in the absence of liquidity constraints is a superior method of equity financing–superior to “traditional financing forms,” that is, unless those traditional financiers are fully competitive and perfectly informed.

By one estimate, global crowdfunding reached $195 billion in 2017. Of that, $13 billion was equity- or reward-based.

The 60 second interview: Lara Oyesanya (The Lawyer) Rated: A

Ahead of her session at the In-house Financial Services Conference, Lara talks to The Lawyer about the legal challenges of digital innovation and the way in which technology is transforming the in-house lawyer’s relationship with external counsel.

What legal challenges are brought forward by digitalisation?

Will AI function within current legal frameworks, do we actually know how it will function to properly assess legal risks, is monitoring required to ensure due legal process? There are then ongoing discussions around data, information and cyber security.Algorithms and Applied Programming Interfaces (APIs) are at the heart of digitalisation. With the continued development of artificial intelligence (i.e. algorithms with learning capabilities), there will be more legal challenges to address.

UniCredit Pushes on Cost, Asset Quality to Affirm Leadership (Bloomberg) Rated: A

UniCredit SpA Chief Executive Officer Jean Pierre Mustier is ramping up cost cuts and improving asset quality to keep his promise of building a leading pan-European bank.

A 5.2 percent decline in operating expense in the first quarter helped the bank increase net income to 1.11 billion euros ($1.3 billion) from 907 million euros a year earlier. That beat the 796 million-euro profit expected by the average of 8 analysts surveyed by Bloomberg.

UniCredit climbed as much as 2.6 percent in Milan trading and was up 2.4 percent at 17.96 euros as of 9:23 a.m. That boosts the bank’s gain this year to 15 percent.

Taaleri records a loss of about EUR 2.5 million from a German geothermal project (Globe Newswire) Rated: B

Taaleri Investments Ltd, part of the Taaleri Group, acquired the majority shareholding in Erdwärme Oberland GmbH (86.42% of shares and votes) from the Italian energy-company Enel on March 12, 2018.

Unfortunately, the tests on the first geothermic production site have proven that the project on the site in question is not commercially doable and, Taaleri Investments Ltd records hence a loss of approximately EUR 2.5 million, visible in Taaleri Groups half year results 2018.

International

Digitization of Money and Finance: Challenges and Opportunities (International Monetary Fund) Rated: AAA

The global economy is experiencing a non-stop digital revolution. Consider this one number: a recent study estimates that by 2025, what is called the “global data-sphere” will grow to 163 trillion gigabytes from 16.1 trillion gigabytes in 2016. That ten-fold increase will encompass data held everywhere from the cloud to our handheld devices.

It raises the prospect of expanding financial inclusion, especially in developing countries. The possibilities are exciting.

Companies working with artificial intelligence are exploring credit scoring based on payment data. Fintech startups in Latin America, Africa, and Asia are moving toward the use of peer-to-peer lending data, and information from mobile phone payments to build reliable credit databases.

Firmo protocol for financial derivatives on the blockchain (Next Big Future) Rated: A

The Firmo protocol executes financial contracts on blockchain technology. Contracts are written using the domain specific language; FirmoLang. FirmoLang provides a secure execution environment for financial contracts on decentralized asset-classes. Similar to software built for airplane coordination, FirmoLang is formally verified, yielding needed security benefits for smart contracts in finance. FirmoLang compiles directly to Ethereum Virtual Machine bytecode. The Firmo Protocol is designed to integrate with and support the advancing decentralized economy, including: Decentralized exchanges, p2p lending platforms, prediction market platforms and more.

Firmo is building the future of financial infrastructure. 1/7 of the world’s economy is derivatives, but these financial contracts are not securely available in the crypto economy yet.

Valorem : Blockchain, Loans, P2P Networks, Investing, Marketplace, Insurance and Charity. ICO is still live! (TechBullion) Rated: A

The Valorem foundation provides a decentralized platform enabled by smart contracts of the blockchain to allow users engage in cryptocurrency-based transactions and exchanges. The transactions between users are facilitated by an ERC20 standard token called VLR token.

Valorem Foundation’s VLR token is the utility token for this ever changing platform. Valorem Foundation is developing a unique platform with the following features: Microloans, Student Loans, Car Loans, P2P Networks, Business Investing, Crowdfunding, Buying/Selling of goods, Insurance and Charity.

Authors:

George Popescu
Allen Taylor

 

Tuesday May 1 2018, Daily News Digest

Pace of Mobile Payment Adoption in China

News Comments Today’s main news: Former SoFi CEO Mike Cagney raises $50M for blockchain-based Figure. RateSetter IFISA attracts ‘high tens of millions’ of GBP. Brazilian online lender Agibank files for IPO in São Paulo. Today’s main analysis: The cities with the highest rates of mortgage denials. Today’s thought-provoking articles: Hedge funds are down in Q1. MPL’s new ways look […]

Pace of Mobile Payment Adoption in China

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

SoFi’s Former CEO Harnesses the Blockchain for Home Loan Startup (Bloomberg) Rated: AAA

Mike Cagney, who built SoFi into America’s biggest student loan refinancer before quitting amid allegations of sexual harassment at the fintech firm, is preparing for his second act: a startup offering home-equity loans.

Cagney has raised $50 million for San Francisco-based Figure, which plans to use the blockchain to help expedite loan approvals in minutes rather than days, according to people familiar with the matter. Two global banks have agreed to finance loans and several firms have agreed to purchase them, say the people, who requested anonymity to discuss a private matter.

CHINA-US TRADE WAR AND OTHER WORRIES (All About Alpha) Rated: AAA

The Eurekahedge April 2018 report says that hedge funds were down in the first quarter of the year (-0.13%). This is the industry’s worst performance since Q1 2016.

The steepest performance-based losses by regional mandate were those of the North American funds, they lost $1.2 billion. Meanwhile, asset inflows remained net positive but were lower (17% lower) than were the net asset inflows for the first quarter 2017.

The highest performance gains by regional mandate were those of the Asia ex-Japan funds. (+0.5%). But those hedge funds were down in March, largely on rumblings of a US/China trade war.

Total assets under management for the global hedge fund industry are now at $2.48 trillion.

Marketplace Lending’s New Ways Look a Lot Like the Old Ones (Bloomberg) Rated: AAA

Last week, the Federal Trade Commission accused LendingClub, the largest of the peer-to-peer lenders, of misleading consumers with hidden fees and continuing to charge borrowers even after they had paid off their loans. Shares of the online lender fell to nearly $2.50, its all-time low.

Source Bloomberg

In the first quarter, peer-to-peer lenders sold $4.3 billion in asset-backed securities, according to industry tracker PeerIQ. That was slightly down from $4.4 billion in issuance in the last three months of 2017, which was a quarterly high for the industry. PeerIQ estimates that peer-to-peer ABS securitization will hit $18 billion this year, up from $14 billion in 2017.

Source: Bloomberg

 

LendingTree Reveals the Cities With the Highest Rates of Denied Mortgage Applications (Lending Tree) Rated: AAA

LendingTree delved into data from more than 10 million mortgage applications using the most recent available Home Mortgage Disclosure Act data set to find out the main reasons would-be borrowers were rejected.

Key findings:

  • Nearly one in 10 borrowers get denied for mortgages. On a national level, 8% of loan applications were denied.
  • Credit history and debt are the biggest barriers. The leading reasons for denial were credit history (which includes credit score) and debt-to-income ratio, which were each responsible for 26% of denied loans. These were followed by collateral at 17% and incomplete applications at 14%. All other reasons for denial were cited in less than 10% of denied mortgage applications.
  • Debt is a huge barrier to borrowers living in California. We found three California cities (Los Angeles, San Francisco, San Jose) had the highest share of borrowers who were denied because of their debt-to-income ratio.
  • Credit history is holding borrowers back in Louisville, Ky., Memphis, Tenn. and Philadelphia. Among failed applications in these three metros, we found the highest rates of denied borrowers due to their credit history.


Memphis among top 10 cities for highest rates of denied mortgage applications, study says (Bizjournal) Rated: A

Memphis-area mortgage applications are denied at a rate of 12 percent, the third-highest out of 50 cities in a study by LendingTree Inc., an online loan marketplace based in Charlotte, North Carolina.

Houston among top 10 cities for highest rates of denied mortgage applications (Bizjournal) Rated: A

The top reason for a mortgage denial in Houston was debt-to-income ratio, which is the share of monthly debt obligations in relation to monthly gross income. Most lenders want this number to be 43 percent or lower, per the report.

Other Texas cities ranked quite lower than Houston on the list. San Antonio was No. 18 with an 8.05 percent rate, Dallas was No. 21 with a 7.58 percent rate, and Austin was No. 27 with a 7.05 percent.

What’s next for Citi’s mobile app (Tearsheet) Rated: A

Banking apps are now among the most widely and frequently used apps, along with weather and social media, according to Citi’s second annual mobile banking study, released Thursday.

If that’s true — the study examines the behavior of some 2,000 U.S. adult consumers — that would mean people are checking their bank accounts more frequently than they use music, news and dating apps. Although, 20 percent of millennials actually use their mobile banking app while on a date, Alice Milligan, the chief digital client experience officer for Citi’s U.S. consumer bank, pointed out in a presentation of the results.

Could the USPS Be a Short-Term Lender for the Underbanked? (Nonprofit Quarterly) Rated: AAA

In this age of electronic communications, we often take the post office for granted, but it remains a powerful institution. As the US Postal Service (USPS) website indicates, 47 percent of the world’s mail volume is handled by the USPS; the website adds that if it were a private sector company, “the Postal Service would rank 37th in the 2017 Fortune500. In the 2017 Global Fortune 500 list, we ranked 99th.” The business employs over 500,000 career employees, has annual revenues of $69.6 billion, and operates 30,825 “retail offices” nationwide.

It is this last aspect—the ubiquity of post offices across the nation—that has spurred legislation (Senate Bill 2755), introduced last week by US Senator Kirsten Gillibrand (D-NY), that would require every post office to provide basic banking services. Interestingly, the idea of post offices offering banking services is not new. From 1911 to 1967, post offices offered savings and deposit services for Americans (although not loan products). At one time, Americans held more than $3 billion in deposits through postal banking ($30 billion in inflation-adjusted 2018 dollars). Other countries, including Japan, Germany, China, and South Korea, continue to offer banking services through their postal networks.

Daniel Maran of the Huffington Post explains that, “Under Gillibrand’s proposal, Americans could cash paychecks and deposit money in accounts free of charge at each post office location. Deposits would be capped at the larger of two amounts―$20,000, or the median balance in all American bank accounts. The postal banks would be able to distribute loans to borrowers of up to $1,000 at an interest rate slightly higher than the yield on one-month Treasury bonds, currently about 2 percent.” By contrast, a Pew Charitable Trusts report found that average payday loan of $375 typically costs a borrower $520 in interest and fees.

Financial Engines Sold To PE Firm For $ 3 Billion, Plans To Combine With Edelman (Financial Advisers) Rated: A

Financial Engines announced on Monday that it will be acquired by private equity firm Hellman & Friedman and combined with Edelman Financial Services.

According to the announcement, Hellman & Friedman will make the acquisition in an all-cash transaction that values Sunnyvale, Calif.-based Financial Engines at $3.02 billion. Financial Engines shareholders will receive $45 per share in cash upon closing.

Leading Robo-Advisors Post Negative First Quarter Returns (Financial Adviser) Rated: A

The best taxable robo-advisor performers in the first quarter for total portfolios were SoFi, which posted a loss of 0.14 percent; Schwab, which returned a negative 0.33 percent; and TIAA’s socially responsible portfolios, which posted a 0.45 percent loss.

The top-performing taxable robo-advisors for total portfolios over the two-year duration of Backend Benchmarking’s study are Schwab, offering 10.98 percent annualized two-year returns; SigFig, which returned an average of 10.71 percent annually over two years; and Betterment, which returned 10.24 percent.

MetaBank, CURO to offer flexible credit to underbanked (Bankless Times) Rated: A

MetaBank, a provider of payment, community banking and financing solutions, today announced an agreement with CURO, a facilitator of short-term credit to underbanked consumers. Together, the organizations will launch a new line of credit product the parties believe will be more flexible and transparent than others in the market, and well-suited for US-based underbanked consumers. CURO and Meta expect to unveil the new, joint brand and a timeline for the pilot launch later this year.

Through the credit option expected to be launched by CURO and Meta, underbanked consumers would be able to access credit with a flexible timeline for repayment. These consumers would also be able to control their cost of borrowing through transparent fees that would apply only when credit is drawn. Estimates indicate 67 million adults are considered un- or underbanked. Many of these adults typically have poor credit ratings and, as such, have difficulty securing credit or loans — this product is expected to provide a responsible credit option for many of those consumers.

LendingTree, Inc. to Present at SunTrust Robinson Humphrey Internet & Digital Media Conference (Benzinga) Rated: B

LendingTree, Inc. (NASDAQ:TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, today announced that it will participate in the SunTrust Robinson Humphrey Internet & Digital Media Conference at The Palace Hotel in San Francisco, California.

Trent Ziegler, Vice President of Investor Relations and Treasurer at LendingTree, is scheduled to present on Tuesday, May 8, at 9:10am PT and will participate in one-on-one meetings throughout the course of the day. The presentation will be webcast live and archived at 

8 Side Hustles You Can Start Today (NAV) Rated: B

If you’re looking for a way to grow income over time, and don’t mind the risk and reward nature of investment, peer to peer (P2P) can be a great way to earn some passive income on the side.  Operating much like a bank loan — but without the bank – P2P lending connects people with money (even if it’s only a few hundred dollars) with people who need it.

United Kingdom

 

RateSetter IFISA has attracted ‘high tens of millions’ of pounds (Peer2Peer Finance) Rated: AAA

RATESETTER has revealed that its Innovative Finance ISA (IFISA) has already attracted “high tens of millions” of pounds from investors, in less than three months since launch.

RateSetter opened its IFISA to existing customers on 8 February and to new customers on 1 March. The platform previously reported that it had seen over 5,000 IFISA accounts opened in the first month.

TransferWise founder Taavet Hinrikus invests in fintech chatbot Cleo (Tech Crunch) Rated: A

Cleo, the London-based fintech that offers an AI-powered chatbot as a replacement for your banking apps, continues to put together an impressive list of backers. The startup’s early investors already include Entrepreneur First, Moonfruit founder Wendy Tan White, Skype founder Niklas Zennström, Wonga founder Errol Damelin, and LocalGlobe, the seed VC firm founded by father and son duo Robin and Saul Klein, amongst others. Now TechCrunch can reveal that TransferWise founder Taavet Hinrikus has become a Cleo  investor and advisor.

Family Building Society And LendInvest Reduce Buy To Let Investment Rates (Residential Landlord) Rated: B

Family Building Society and LendInvest have each reduced rates on a number of buy to let mortgage deals.

Family Building Society slashed interest rates across its entire buy to let product range, whilst LendInvest has reduced rates on several of its buy to let deals.

CrowdProperty names Mike Bristow as chief executive (Peer2Peer Finance) Rated: B

CROWDPROPERTY co-founder Mike Bristow has been appointed as chief executive of the peer-to-peer property lender, taking over the reins from fellow co-founder Simon Zutshi.

Bristow, who was also a non-executive director at CrowdProperty, had been acting as interim chief executive for around two months before taking on the role on a permanent basis, effective from 1 May.

Zutshi has now been appointed as chairman of CrowdProperty.

China

Lessons From A Mobile Payments Revolution (American Banker) Rated: AAA

According to the research firm eMarketer, 76% of Chinese smartphone users made a mobile point-of-sale purchase in 2017, compared with 25% of American users. In total, 61.8% of all such transactions globally are Chinese.

Source: American Banker

In the first 10 months of last year, China processed a whopping $12.8 trillion in mobile payments, according to the state-run news agency, Xinhua — 38% higher than for all of 2016.

Though it’s not exactly an apples-to-apples comparison, the U.S. market in 2017 had just $49.3 billion in mobile point-of-sale transactions, according to Shelleen Shum, eMarketer’s forecasting director.

Start with an oligopoly

More than 90% of Chinese mobile payments run through Alipay and WeChat Pay, rival platforms backed by China’s two largest internet conglomerates — Alibaba, essentially the Amazon of China, and Tencent Holdings, owner of WeChat, the nation’s must-have messaging and social-media app with more than 1 billion users.

Peering into the murky world of China’s online P2P sector (Asia Times) Rated: A

During an 18-month period, Ezubo swindled up to 900,000 investors out of 50 billion yuan (US$7.7 billion).

In one of the country’s highest-profile court cases, the founders of what was once China’s largest peer-to-peer lending platform, Ding Ning and his younger brother Ding Dian, were jailed for life last September.

Another 24 executives were sentenced to prison terms, ranging from three to 15 years, after disbelieving depositors mounted unprecedented protests in fintech’s biggest scandal.

“[Just] 500 P2P companies, out of the total 4,856, are likely to maintain their operations this year,” it added.

Fincera Reports 2017 Year-end Financial Results (Digital Journal) Rated: A

Fincera Inc. (”Fincera” or the ”Company”) (OTCQB: YUANF), a leading provider of web-based financing and ecommerce services for small and medium-sized businesses and individuals in China, today reported financial results for the year ended December 31, 2017.

Full-year 2017 Financial Highlights

  • Income for the year ended December 31, 2017, increased 16.9% to RMB1.0 billion (US$156.7 million) from RMB875.9 million in the prior year.
  • Net loss improved to RMB8.4 million (US$1.3 million), from net loss of RMB12.3 million in the prior year.
  • Net cash provided by operating activities increased 148.4% to RMB2.1 billion (US$326.6 million) for the year ended December 31, 2017, from RMB859.2 million in the prior year. This increase resulted in a 63.6% improvement in the Company’s overall cash position to RMB1.3 billion (US$191.5 million) at the end of 2017, compared to RMB764.8 million at the end of 2016.

Operational Highlights

Loan transaction volume across all loan types for 2017 totaled approximately RMB26.8 billion (US$4.1 billion), compared to approximately RMB24.4 billion in 2016.

Source: Digital Journal
International

Can FinTech Walk The FinTalk? (PYMNTS) Rated: AAA

BLOCKCHAIN

In January, the International Data Corporation (IDC) reported worldwide spending on blockchain solutions would increase to $2.1 billion in 2018 from $945 million in 2017 and will grow more than 80 percent year over year to reach $9.7 billion by 2021. Most of that spend will be concentrated in the U.S., with supporting use cases mostly related to financial services and cross-border settlement, for a grand total of $242 million in 2018.

To put that into context, the IDC projected worldwide growth and spending on mobility solutions at 15 percent a year from a 2018 base of $1.6 trillion; on security-related hardware, software and services at 10 percent a year from a 2018 base of $91.4 billion growing to $120.7 billion in 2021 and on the Internet of Things at 14 percent a year from $772.5 billion in 2018 growing to $1.1 trillion in 2021.

MARKETPLACE LENDING

LendingClub was hit with a lawsuit by the Federal Trade Commission (FTC) last week over claims of “deceptive” practices.

Following that news, LendingClub’s stock price took a nosedive. Yesterday, it was trading at an all-time low of $2.70.

Launched in October of 2016, Marcus is Goldman’s $2 billion annual hedge on threats to its core commercial banking and trading businesses. Goldman Sachs reported on its Q1 earnings call that Marcus, since it launched, has originated $3 billion of new loans and taken in $9 billion of new retail deposits.

DIGITAL BANKS

If the blockchain is all about replacing the global financial system and marketplace lending is all about replacing traditional lenders, digital banks in the developed world are about upending the traditional banking ecosystem.

Crypto lending may be risky, but these firms say they’ve solved the riddle (American Banker) Rated: A

A new crypto lender, Nexo, will launch Monday in a market where existing participants have already withstood trial by fire.

Such lenders extend credit to those who want to own digital currency, such as bitcoin and ether, and hold onto it long-term while investing it in real estate and elsewhere. But crypto lenders have been severely tested of late as digital currency prices dropped about 70% between December and February.

Source: American Banker, Coindesk

Nexo

The team behind Switzerland-based Nexo runs a consumer lending operation called Credissimo that has made more than a million loans to consumers of up to $2,000 in Europe.

Salt Lending

Denver-based Salt Lending, which started crypto lending earlier this year, has made just under $40 million in loans and has had no losses, according to co-founder Blake Cohen.

Unchained Capital

Unchained Capital, which publicly launched in November, is originating “single-digit million dollars of loans per month,” according to CEO Joe Kelly. The typical loan size is $120,000; the average interest rate is 12%.

RCN Partners with IdentityMind Global to Provide KYC and AML Compliance for Its Protocol (PRWeb) Rated: B

IdentityMind Global today announced that Ripio Credit Network (RCN), a global peer-to-peer credit network based on co-signed smart contracts that connect lenders and borrowers located anywhere in the world, has partnered with IdentityMind to provide KYC and AML compliance support.

Australia

Research shows savings at online lenders (Broker News) Rated: A

The company’s research shows the average customer of one of the big four banks can save more than $2,500 a year by switching to an online deal. This has increased from a year ago, when the potential annual savings were $2,250.

Despite these savings and the fact most other services have migrated online, only 27% of consumers said they would take out a home loan with an online lender.

India

Fintech Startup MyLoanCare Raises Series A Funding (Inc42) Rated: AAA

Gurugram-based B2C online loans marketplace MyLoanCare has secured $977.7K (INR 6.5 Cr) equity Series A funding from Ncubate Capital Partners, a private investment arm of SAR Group family office.

The startup plans to use the funding for branding, technology augmentation and growth. MyLoancare also plans to enter new segments of the market including cards, savings and investments.

 

 

Asia

INDONESIAN fintech startup EmasDigi enables the investing in as well as buying and selling of gold through mobile applications with easy processes that require little time.

The idea began with EmasDigi chief executive officer and founder Claudia Kolonas selling vouchers which gave people easier access to the gold trading market.

EmasDigi is affiliated with PT PG Berjangka, which is registered and supervised by the Trade Ministry’s Futures Exchange Supervisory Board (Bappebti). This affirms EmasDigi’s commitment to consumer protection and ensures compliance with legal provisions in Indonesia.

Fintech microfinance, the next opportunity (Prothom Alo) Rated: A

Bangladesh is widely known as the origin of microfinance. The pioneer two NGOs, Grameen Bank and BRAC, have taken this poverty reduction tool to different places in the world, especially in Asia and Africa. This has been acclaimed by the United Nations and other international organisations. Certainly the objectives of microfinance have undoubtedly already been achieved.

Microfinance was inaugurated in the 1980s for a specific, target group of people (given their poverty level). It doesn’t have the generalised character required to reach all people.

Latin America

Brazilian online lender Agibank files for IPO (Reuters) Rated: AAA

Brazilian online lender Banco Agibank SA on Monday filed for regulatory clearance to launch an initial public offering (IPO), according to a securities filing.

Agibank follows Banco Inter SA’s (BIDI11.SA) strategy of raising capital to fund its expansion and IT investments. On Monday, Inter made its debut in São Paulo stock exchange, in the first IPO by a Brazilian retail bank in nearly a decade. In late afternoon, Inter’s units were stable at 74 reais.

The bank and its owner, Marciano Testa, will sell an undisclosed amount of preferred shares in the IPO.

Canada

Fintech Select Earns a Net Profit of $ 435k and Reduces Liability by $ 7.6m for the Year Ending Dec 31 2017 (Globe Newswire) Rated: AAA

Fintech Select Ltd. (“Fintech Select” or the “Company”) (TSX-V:FTEC) is pleased to announce that its financial statements for the year ending December 31 2017 have resulted in a net profit of $435k. 2017 Financial Statements and Management Discussion & Analysis (“MD&A”) will be filed on SEDAR shortly.

2017 Highlights

  • Reduced the Company’s liability by $7.6M including our unfavourable high-interest loan
  • Made a net profit of $435k for the year due to the reduced liability
  • Reduced interest rate of 24% per annum plus management fee to 12% on April 1, 2017, and further to 6% plus management fee on May 16 2017.
  • Raised $3.4M through two private placements in April and June of the year, and had access to un-restricted cash of $915k by December 31 2017
  • Increased its customer care service revenue
  • Established an advisory board with high skill sets in business and Cryptocurrency space
  • Filed a patent-pending for Cryptocurrency POS platform.
  • Developed and launched the Company’s first phase of the Cryptocurrency POS solution, which simplifies buying cryptocurrecny to the mass of consumers
  • Acquired software for P2P Micro Lending and initiated the project to work on required changes and enhancements to meet the regulatory required standards

Authors:

George Popescu
Allen Taylor

Monday April 30 2018, Daily News Digest

LendingClub

News Comments Today’s main news: GreenSky files for IPO. LendingTree hits $181M consolidated revenues. KBRA assigns preliminary ratings to Morgan Stanley resecuritization. Zopa says savers are abandoning cash ISA. KBRA assigns first European ratings. Today’s main analysis: FTC vs. LendingClub, dueling unicorns. Today’s thought-provoking articles: JD Supra on LendingClub’s FTC issues. Aussie borrowers should embrace for rate hike. Brazil’s amended payment […]

LendingClub

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Fintech Firm GreenSky Files for IPO (Wall Street Journal) Rated: AAA

Financial-technology firm GreenSky Inc., a provider of point-of-sale financing and payments technology, disclosed plans to go public.

The Atlanta company, which operates a lending platform that enables retailers, health-care providers and home contractors to offer loans to their customers, filed preliminary documents Friday for an initial public offering with the Securities and Exchange Commission.

FTC Sues Lending Club For Deceptive Advertising (JD Supra) Rated: AAA

According to the FTC, this deception is made worse by the fact that Lending Club never adequately discloses the up-front fee to consumers during the entire online application process.  The fee is only mentioned once—inside an explanatory “pop-up bubble” that only appears if the applicant happens to click or tap on a relatively small and inconspicuous icon. Because applicants are not required to click or tap on the icon in order to move forward with their loan application, many applicants never saw the disclosure at all.

LendingTree’s 1Q consolidated revenue grows to record $ 181m (Mortgage Professional American) Rated: AAA

Online loan marketplace operator LendingTree saw its consolidated revenue rise to a record $181m during the first this year – up 37% from the same period in 2017, according to a financial statement released Thursday.

January to March revenue from mortgage products stood at $73.5m, up 17% from the first three months of 2017. In particular, purchase and refinance revenues went up 13% and 18%, respectively. Citing the Mortgage Bankers Association, LendingTree said originations industry-wide were projected down 4% in the comparable period.

KBRA Assigns Preliminary Ratings to Morgan Stanley Resecuritization Pass-Through 2018-SC1 (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to one class of notes issued by Morgan Stanley Resecuritization Pass-Through Trust 2018-SC1 (“MSRP 2018-SC1”). This transaction represents the securitization of the consumer loan asset-backed trust certificates issued by SoFi Consumer Loan Program 2015-1 Trust (“SCLP 2015-1”) and supported by a portfolio of prime unsecured personal loans (“Underlying Loans”) that were originated by SoFi Lending Corp (“SoFi”).

Preliminary Ratings Assigned: Morgan Stanley Resecuritization Pass-Through 2018-SC1

Class Preliminary Rating Initial Class Principal
B BBB (sf) $36,700,000

 

Diversify Into Real Estate With Your IRA Or 401(k) (Forbes) Rated: A

The IRS does allow 

Navient Reports Greater Earnings and Fewer Student Loan Charge-Offs (Lend EDU) Rated: A

On April 24, Navient stated from its earnings report in the first quarter that it had $500 million of originations in private education refinance loans, a 43 percent fall in private education loan charge-offs and a 32 percent jump in business processing fee revenue year over year, according to a press

Business processing earnings: Earnings were $10 million in the first quarter, compared to $3 million in 2017’s first quarter.

Consumer lending earnings: Earnings were $50 million in the first quarter, up from $38 million in 2017’s first quarter. This jump came from a $7 million increase in net interest income, an $18 million decline in loan losses provision and a $9 million fall in income tax expense.

Federal Education Loans earnings: Earnings were $141 million, up from $129 million in 2017’s first quarter.

Unitus Ventures Marks The First Close Of Its $ 45.2 Mn Fund II With $ 15 Mn (Inc42) Rated: A

Unitus Ventures (formerly known as Unitus Seed Fund), an impact venture fund investing in early-stage startups, has announced to have raised $15 Mn (INR 100 Cr) towards the first close of its $45.2 Mn (INR 300 Cr) Unitus Ventures Fund II.

The fund will be utilised for onward investing of $753K – $2.2 Mn (INR 5 Cr -INR 15 Cr) each to 25 to 30 startups specialising in education, healthcare and inclusive fintech.

Yolande Piazza of Citi Fintech (Lend Academy) Rated: A

In this podcast you will learn:

  • The origins of Citi Fintech and the goal of their group within Citi.
  • How they have created a new and innovative culture within Citi Fintech.
  • Why Citi Fintech released a global open banking API.
  • Citi’s Canvas platform that is their internal sandbox product.
  • How they create these products hand in hand with their customers.
  • Why this is about more than just creating mobile offerings.
  • What Citi’s newly announced national digital bank means for the overall bank.
  • How Citi will help non-bank customers as well as their own customers.

 

Mastercard: Serving The Financial Needs Of The ‘New Middle Class’ (PYMNTS) Rated: A

Whether an applicant has recently immigrated and lacks the background data to be approved, or is recovering from a drastic life event such as a divorce or death of a spouse, demonstrating their creditworthiness is often impossible by traditional means – i.e. the FICO score – leaving as many as 160 million Americans up the creek with no paddle.

Haymond said Mastercard has already put its philosophy into practice by partnering with CreditStacks, a FinTech that focuses on providing credit to new Americans, as well as launching its Inclusive Futures Project in December 2017 to address the needs of gig and on-demand workers.

Mastercard Meets Elevate

Some of the features of the new product will include purchase and fraud alerts, credit score monitoring, a full-service mobile app and on/off functionality for the credit card. Cards will be awarded based on the analysis of data from alternative sources, Haymond said, which can fill in the blanks to evaluate a customer’s creditworthiness when traditional data points are not present or don’t meet requirements.

Millennials now more bullish about finances than baby boomers — study (Spears Magazine) Rated: A

Almost nine in ten (88 per cent) HNW millennials feel more confident about their finances than a year ago- but less than half of baby boomers (47 per cent) shared the same sentiment.

A new study from SunTrust Bank also found that millennials are more confident than their generation X counterparts, of whom 66 per cent are more confident than last year.

Some 16 per cent of those surveyed attributed their increased optimism to ‘having a great investment firm’, while 13 per cent cited increases in income and assets.

Possible Finance launches with small, short-term loans designed for low-income borrowers (Geek Wire) Rated: B

Tony Huang was inspired to create Possible Finance because “it’s so damn expensive to be poor.”

Possible Finance customers can apply for small loans and receive approval quickly using a mobile app. Customers can build credit when they make payments, unlike traditional payday loans, which typically do not report to credit agencies unless a borrower misses payments.

LendingPoint is the fastest-growing company in metro Atlanta (Atlanta Business  Chronicle) Rated: B

Being a successful financial technology (fintech) lender requires focusing more on the lender portion of your business than the fintech portion. That’s the way Tom Burnside, CEO and founder of LendingPoint, runs his company, the number-one overall fastest-growing private company in the metro area.

 

 

United Kingdom

Zopa executive: “Savers are abandoning the cash ISA en masse” (Peer2Peer Finance) Rated: AAA

SAVERS are “abandoning the cash ISA en masse”, as the personal savings allowance (PSA) makes the tax-free wrappers less relevant for consumers, a Zopa executive has said.

New data from UK Finance showed that investment in cash ISAs fell from £773m in March 2017 to just £332m in March 2018 – a decrease of 42 per cent.

Immigration rules ‘could choke fintech’, says lobby group Innovate Finance (The Times) Rated: A

The prospect of tighter immigration rules after Brexit risks choking off a boom in Britain’s burgeoning fintech industry, according to a new study by lobby group Innovate Finance.

The report says the financial technology sector is on course to top 100,000 employees by 2030, with 30,000 jobs set to be created.

The result would be a shortfall of 3,200 highly skilled workers by 2030, at a cost to the fintech sector of £361m, the report said.

Investment trusts back “substantial opportunity” in alternative lending (Peer2Peer Finance) Rated: A

Victory Park Capital Specialty Lending (VPC) and P2P Global Investments (P2PGI) released their annual reports on Friday morning, insisting there were still opportunities for online lending and consumer credit as banks continue to scale back.

VPC reported a NAV return of 3.07 per cent for 2017, up from 0.95 per cent in 2016 but below its eight per cent target.

Similarly, P2PGI posted NAV total returns of 3.03 per cent for 2017, down from 4.1 per cent in 2016 and below its target of six to eight per cent.

Is there still life left in P2P investment trusts? (Peer2Peer Finance) Rated: A

But four years on from the launch of P2PGI, the investment trust has admitted in its 2017 annual report that historic performance was ”more volatile than we would like.”

But P2PGI still sits at a discount to NAV of 17.5 per cent and VPC is at 12.5 per cent.

Putting Your Bitcoin Investments to Work (Coinspeaker) Rated: A

One pioneer in the field to consider is Nebeus, a crypto bank that brings together cryptocurrency opportunities and a standard bank service. Its Nebeus trading platform supports peer-to-peer (P2P) lending and a multi-cryptocurrency wallet. The platform enables customers to buy, sell, store, remit, lend and borrow cryptocurrency funds.

Nebeus offers two cards that allow holders to spend their cryptocurrency at their convenience online, offline, or to get cash at ATMs, and the convenience and protection this card offers is hard to beat.

The Nebeus Exo Card lets users top up their card with all major cryptocurrencies and spend that money with over 30 million merchants online. Users can make $1,500 ATM withdrawals per day, worldwide. And they get 3% cashback In NBTK tokens monthly. There is no monthly fee for the card for NBTK holders.

China

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

On April 23, China’s leading financial inclusion platform FINUP filed a listing application for the Hong Kong Exchanges and Clearing Limited (HKEX).

Ant Financial Invests in Bangladesh-based Fintech Startup bKash

On April 26, Bangladesh-based mobile financial service provider bKash and Ant Financial jointly announced a strategic partnership to promote the development of financial inclusion for the unbanked and underbanked communities in Bangladesh.

NIFA Establishes e-Contract Standards for Online Lending

On April 23, the National Internet Finance Association of China released a draft of standards on “Safety Regulations for Internet Finance Contracts”.

With $ 1.9 Billion Investment, Former Baidu Unit Challenges Fintech Rivals (Wall Street Journal) Rated: A

Baidu Inc.’s former financial-services unit has attracted a $1.9 billion investment from firms including U.S. private-equity giants TPG and the Carlyle Group, giving it fresh ammunition to compete in China’s increasingly crowded financial-services space.

Chinese VC Firm Sky9 Capital Reaches Final Closing Of $ 200M For New Fund (China Money Network) Rated: B

Sky9 Capital, a venture capital firm founded by a former partner at Lightspeed Venture Partners, announced today that it has completed the final closing of a new fund with total commitments of US$200 million.

Sky9 Capital Fund III, L.P. will invest mainly in China-based businesses with a focus on early-stage companies in the Internet, enterprise, and deep technology sectors.

European Union

KBRA Issues First European Ratings (Business Wire) Rated: AAA

Kroll Bond Rating Agency Europe Limited (KBRA) is pleased to announce its first published European Structured Finance ratings. KBRA issued its inaugural published European ratings on Small Business Origination Loan Trust 2018-1 DAC (“SBOLT 2018-1”), a £206.6 million ABS transaction collateralized by unsecured loans made to small and medium-sized enterprises (“SMEs”) incorporated in the United Kingdom (“UK”). This transaction represents the second ABS securitisation collateralised by unsecured loans to SMEs originated through the online lending platform operated by Funding Circle Limited (“Funding Circle”). The full rating report can be accessed here.

This is KBRA’s first publicly rated European ABS securitisation after being registered as a Credit Rating Agency by ESMA in November 2017.

International

The FTC vs LendingClub, Banking through the Post Office, Dueling Unicorns (PeerIQ), Rated: AAA

On Thursday, Amazon reported $3.27 EPS earnings well above the $1.26 estimates. The stock jumped 7% to record highs in reaction to the beat. The news comes just days after Amazon invested $22mm into Capital Float, India’s self-proclaimed largest online lender. We recently discussed Amazon’s path to the banking sector via its reported partnership with JP Morgan.

The lines between tech and banking continue to blur. Square announced the acquisition of Weebly for $365 Mn.

Dueling Unicorns

Source: PeerIQ, Company Websites, Crunchbase

FTC vs LendingClub

On Wednesday, the FTC charged LendingClub with deceiving borrowers.

In response to the lawsuit, LendingClub posted a detailed rebuttal, refuting the FTC’s claim. As seen in the image below from LendingClub’s blog post, the company believes they provide borrowers multiple opportunities to understand the Origination Fees mentioned in the FTC’s lawsuit. LendingClub goes on to refute each claim made by the FTC individually.

Source: LendingClub

In a post on Lend Academy, Peter Renton questions the cause of this lawsuit, and points to the fact that only two of the five FTC Commissioner seats were occupied at the time of the complaint, and one of the two left on Friday. Renton’s understanding is that LendingClub and the FTC were cooperating and this lawsuit “came out of left field.”

Are You Ready To Give Fintech A Try? (Forbes) Rated: A

In just three years, Germany’s 

Blockchain Startup ShareRing is Facilitating the Adoption of Cryptocurrency (Coinspeaker) Rated: A

ShareRing will achieve this by employing a dual-coin mechanism through its own ShareLedger blockchain that will operate with two distinct tokens. The first – ShareToken (SHR) – will be the utility token of ShareRing. SHR will drive the consensus algorithm and act as a tradable coin on cryptocurrency exchanges.

The second currency, SharePay (SHRP) will be pegged to fiat and can be purchased directly from the ShareRing app using a credit card. A user can then use their SHRP to buy sharing services within the ShareRing application. ShareRing foresees a wide range of partners for the platform, sharing not just apartments and cars, but time, labor, as well as peer-to-peer lending and group tours.

FintruX Network (FTX) Will Be Listed In 3 Exchanges in their first week of token unlock (satPRNews) Rated: B

Qryptos exchange was the first exchange to list FintruX (FTX) On April 22, Bancor network quickly followed suit by listing Fintrux on April 24.

Potential investors, who missed their ICO, will now be able to buy the tokens on Qryptos, Bancor Network and HitBTC as well.

Australia

Borrowers should ‘brace’ themselves for rate hikes (The Adviser) Rated: AAA

After online lender ME claimed that it was “forced” to hike interest rates on its owner-occupier and investor loans as a result of increased funding costs, comparison site finder.com.au asked a panel of economists whether they believed other banks would follow.

According to the finder.com.au survey of 17 economists, 78 per cent said that they expected more lenders would raise their rates out of cycle as a result of rising US interest rates.

 

India

Fintech Startup Rubique Raises Fresh Round Of Funding (Inc42) Rated: AAA

Kalaari Capital-backed online lending marketplace Rubique has raised fresh funding led by Japan’s Recruit Group and Russian venture capital management company Emery Capital.

Blacksoil and existing investor Kalaari Capital also participated in the funding round. Apart from this round, the startup is also in the final stages of closing another tranche’ of funding, to be led by a couple of marquee investors

The startup plans to use the funds to hire more data scientists, enhance technology and reach a monthly revenue of $1.8 Mn (INR 12 Cr) by September.

Crowd Genie Opens India Office to Expand Asia-Pacific Asset Exchange (BC Focus) Rated: A

Crowd Genie Financial Services Pte. Ltd. is incorporated in Singapore and was granted a “Dealing in Securities” license by Monetary Authority of Singapore (MAS) in March 2017. This makes Crowd Genie one of the handful licensed platforms in Singapore.It is a peer-to-peer lending online platform that lets Singapore-based SMEs obtain financing from investors.

Crowd Genie is contemplating to establish a blockchain based Asia-Pacific asset exchange. It recently started an office in Bangalore, India and named Kunwar Singh as its Chief Technology Officer. The company completed its CGCOIN token sale in March this year. It intends to work on the regulatory elements to drive India centric assets onto its exchange.

A primer on crowdfunding (The Hindu BusinessLine) Rated: A

P2P lending is when individuals lend to small businesses/individuals for either a social or a commercial initiative. P2P lending can also be for non-income-generating activities. The consideration here is the interest on the amount lent. The return varies with the risk associated with the business and the individuals running the business — higher the risk, higher the return. Some of the prominent P2P platforms include Milaap, Kiva, Faircent and Cashkumar.

P2P platforms insist on KYC fulfilment for both lenders and borrowers. Diligence exercise is done on borrowers to assess credit-worthiness, genuineness and repayment capability.

Crowdfunding for non-financial consideration is of two types — social lending/donation crowdfunding and reward crowdfunding. Here the return or consideration may or may not be commensurate with the money raised.

 

Latin American

Brazil: Amended payment method regulation (IFLR.com) Rated: A

On March 26 2018, the Brazilian Central Bank enacted amendments to the existing regulation on payment methods, proposing more flexible rules on payment arrangements, payment institutions and on interchange fees charged to issuers of debit cards. The Central Bank expects these changes to foster competition among market players and as a result provide reduced debit card costs for end users.

This new regulation follows an international trend already observed in several developed and developing countries. In the US and Mexico, for instance, maximum limits for interchange fees charged in debit cards transactions led to average cost reductions on such fees of 40% and 50%, respectively.

Authors:

George Popescu
Allen Taylor