Thursday September 12 2019, Weekly News Digest

bank technology

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-4 Trust. Stripe debuts corporate credit cards. College Ave completes $300M securitization of private student loans. Yirendai issues earnings results. Today’s main analysis: Deregulating Fannie and Freddie (A MUST-READ REPORT FROM THE U.S. TREASURY). Today’s thought-provoking articles: Average FICO scores hit […]

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News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-4 Trust (Yahoo! Finance), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-4 Trust (“SCLP 2019-4”). This is a $465 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-4

Class

Preliminary Rating

Class Principal

A

AAA (sf)

$360,000,000

B

AA+ (sf)

$29,500,000

C

A+ (sf)

$47,500,000

D

BBB+ (sf)

$28,000,000

OnDeck CEO Noah Breslow to Deliver Keynote Address at 2019 LEND360 Conference (GuruFocus), Rated: A

OnDeck today announced that Chairman and CEO Noah Breslow will be a keynote speaker at the LEND360 Conference in Dallas, Texas on Thursday, September 26, 2019. Mr. Breslow will discuss industry trends in alternative data and how they are improving many aspects of online lending to small businesses.

Case activity for On Deck Capital, Inc. vs Beautyshea, LLC on Sept. 9 (Pennsylvania Record), Rated: B

‘Judgment Entered For $6,593.50 On 09-09-2019 236 Notice Of Judgment Sent 09-09-2019’

Payments giant Stripe debuts a credit card in its latest step into the financing fray (TechCrunch), Rated: AAA

Last week, when the popular payments startup Stripe made some waves with its first move into money lending through the launch of Stripe Capital, we reported that the company was also soon going to be launching a credit card. Now, that news is official. Today, the company is doubling down on financing with the launch of corporate cards for business customers.

College Ave Student Loans Completes $ 300 Million Securitization of Private Student Loans (Crowdfund Insider), Rated: AAA

Student loan marketplace, College Ave Student Loans, announced on Tuesday it has completed a $300 million securitization of private student loans, its third securitization and largest to date. According to College Ave, the transaction was oversubscribed attracting a broad and diverse group of repeat investors and new participants. Barclays and Goldman Sachs were joint lead underwriters on the transaction with Barclays serving as structuring agent and sole bookrunner.

The Deregulation of Fannie and Freddie; Rate Cuts; “Full Stack” Banks (PeerIQ), Rated: AAA

This week, the Trump administration released their long awaited housing finance plan that will privatize Fannie Mae and Freddie Mac.

The plan would require a significant recapitalization – up to $180 Bn.

Read the full report here.

Source: Federal Reserve, PeerIQ

Average FICO score hits all-time high (CNBC), Rated: AAA

For the first time, the average national credit score has reached 706, according to FICO, the developer of one of the most commonly used scores by lenders.

Source: CNBC

U.S. Consumer Debt Surges on Jump in Credit-Card Balances (Bloomberg), Rated: A

U.S. consumer borrowing swelled in July by the most since late 2017 as Americans carried larger credit-card balances to fund both everyday and online purchases.

Total credit rose by $23.3 billion from the prior month, exceeding all estimates in a Bloomberg survey of economists, Federal Reserve figures showed Monday. Revolving debt outstanding increased by $10 billion, also the most since November 2017, while the growth of non-revolving credit was little changed from a month earlier.

Kabbage Launches New Small Business Revenue Index (Crowdfund Insider), Rated: A

Global financial service platform Kabbage announced this week the launch of its new Small Business Revenue Index. According to Kabbage, the index has two million live data connections the platform maintains across its customer base of more than 200,000 small businesses.

The Current State of the Small Business Lending Sector (Lend Academy), Rated: AAA

The companies that I view as pioneers in this space are Kabbage and OnDeck.

Although Kabbage and OnDeck were early to small business lending there are many other names in this space with varying models and scale including Funding CircleStreetsharesFundboxBlueVineBiz2CreditFundation and Credibly to name a few. LendingClub also has a small business lending operation but they primarily work with partners Funding Circle and Opportunity Fund today to originate these loans.

The Challengers of Small Business Lending

Probably the most recognizable name is PayPal and the Working Capital product which, according to deBanked, has surpassed OnDeck in small business lending volume.

Patriot Financial leads $ 15 million round for Numerated (American Banker), Rated: A

Numerated, the loan technology company that incubated inside Eastern Bank and spun off on its own in May 2017, has raised $15 million from bank investment fund Patriot Financial Partners. Existing investors Venrock, Fintop Capital and Hyperplane also joined the round.

TBF Financial Buys $ 60 Million in Commercial Debt from Major Online Lender (PR Newswire), Rated: A

TBF Financial purchased nearly $60 million in non-performing loans from a major online small business lender in recent transactions, CEO Brett Boehm announced today.

TBF bought the pools of post-charge-off loans as the highest bidder in transactions arranged through multiple brokers. In most cases, the company purchases directly from alternative lenders, equipment leasing companies and banks.

LendingTree Ranks the 50 Most Expensive Towns in America (NewKerala), Rated: A

No. 1 Vineyard Haven, Mass.

Total population 17,321
Median individual income $39,045
Median home value $674,600
Affordable housing costs for a median income earner $911
Calculated mortgage payment for a median priced home $2,767
Median rent payment $1,441
Home affordability deficit -$1,856
Rent affordability deficit -$530

The DeFi trend is accelerating and gaining acceptance, with Coinbase joining the fray. The leading brokerage has created the Coinbase Bootstrap Fund, to boost DeFi projects. Coinbase will invest in two projects, the Compound crypto lending scheme, and the dy/dx crypto derivative exchange.

The 30-somethings guide to creating passive income (Ladders), Rated: A

You might not have $30,000 saved up to buy a rental property right now, but do you have $500? The beauty of REITs like DiversyFund is you can start investing for the amount of money you might drop on a new pair of shoes.

There are public and private REITS as well as funds classified as real estate crowdfunding. Compare your options and find the best one that works for you.

PeerStreet Named CRETech 2019 Real Estate Tech Award Winner (Crowdfund Insider), Rated: B

Real estate investment platform PeerStreet announced on Tuesday it won first place in CRETech’s 2019 Real Estate Tech Awards (RETAs for the Information & Intelligence – Crowdfunding category.

Zillow chooses Impac Mortgage COO Rian Furey to lead mortgage expansion (Housingwire), Rated: B

Zillow announced Monday that it is naming Rian Furey president of Zillow Home Loans.

Balboa Capital Continues Accelerated Growth, Adds 125 New Employees in First Half of 2019 (Yahoo! Finance), Raated: A

Balboa Capital, an online lender that specializes in equipment financing and small business loans, hired 125 new employees during the first six months of 2019 to accommodate the company’s rapid increase in new business and acquisition of several new strategic partners.

United Kingdom

Why crowdfunding may not be the great democratising force in investment after all (The Conversation), Rated: AAA

The digital revolution has had a huge impact on the way new and small companies are financed – and crowdfunding has been at the forefront.

Initially, crowdfunding brought great optimism that it would have a “democratising effect” on finance. On the one hand it would enable entrepreneurs excluded from traditional sources of finance to attract funding. And, on the other, it would provide new opportunities for people with even relatively modest amounts of money to invest. For example, private investors looking for higher returns than those available with high street banks have been attracted to various lending platforms – also known as peer-to-peer (P2P) platforms.

Sonovate raises £110m to drive invoice finance (Fintech Futures), Rated: A

Finance tech provider Sonovate is looking to expand internationally and deploy more working capital to SMEs and mid-market businesses after raising £110 million, reports Jane Connolly.

Spotcap find 77% of SME brokers are upbeat about Brexit (AltFi), Rated: A

Over three-quarters of commercial finance intermediaries in the UK expect the number of loans they broker to increase after Brexit, with more than half saying the number will rise “by a lot”.

In July Berlin-based online lender Spotcap asked 132 UK brokers, accountants and advisers about the future of SME finance in the UK, the results of which it published today as part of a report entitled The State of Commercial Finance in the UK.

FCA urges firms to prepare for no-deal Brexit and launches helpline (P2P Finance News), Rated: A

FIRMS should prepare for the possibility of a no-deal Brexit, says the Financial Conduct Authority (FCA), as it launches a dedicated helpline for businesses.

The City watchdog, which oversees the peer-to-peer lending market as well as the rest of the financial servcies sector, says firms who have not prepared appropriately for the UK leaving the EU without a deal may see an impact on their business.

Foreign firms eyeing P2P market entry (P2P Finance News), Rated: A

REGULATORY consultancy Bovill has reported a steady stream of interest from new entrants to the peer-to-peer lending market, particularly from overseas firms.

Brown attributed the slowdown to the fact that P2P is a more mature market, meaning there was “less of a gold rush” for new players.

H&M extends Klarna ‘buy now, pay later’ service to the UK (Fashion United), Rated: B

Swedish fast-fashion giant H&M has extended its partnership with payment provider Klarna to the UK market, offering Brit shoppers the option to ‘buy now, pay later’.

New SME services added to Starling Bank’s marketplace (AltFi), Rated: B

Digital Risks is an insurance provider for small and medium-sized digital businesses, including cover for specific threats like commercial legal protection, cyber security, management liability, employers liability, public liability and professional indemnity.

While CyberSmart is a platform for SMEs to identify digital weaknesses and achieve their Cyber Essentials Certification, the government-backed accreditation for companies looking to protect against cyber threats.

China

Yirendai (NYSE:YRD) Issues Earnings Results (Mayfield Recorder), Rated: AAA

Yirendai posted its earnings results on Tuesday, September 3rd. The technology company reported $0.24 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.48 by ($0.24), Morningstar.com reports. Yirendai had a return on equity of 32.93% and a net margin of 15.30%. The firm had revenue of $322.89 million for the quarter.

LexinFintech Secures $ 300 Million Private Placement of Convertible Notes with PAG (Crowdfund Insider), Rated: A

Chinese consumer financing platform LexinFintech announced on Wednesday it has entered into a convertible note purchase agreement with PAG issue and sell convertible notes in an aggregate principal amount of $300 million through a private placement. 

IceKredit Raises $ 47M in Pre-Series C Funding (FINSMES), Rated: A

IceKredit, Inc., a Los Angeles, CA and China-based credit risk and credit management company, raised $47m in pre-Series C funding.

These Chinese Online Lenders Are Not For the Weak at Heart (GuruFocus), Rated: A

Beijing-based online lender Yirendai (NYSE:YRD) and Shanghai-based Paipaidai, or PPDAI Group (NYSE:PPDF), shares have been pummeled down to their lowest levels in the past year. Yet aside from receiving credit lines from large Chinese institutions amid China’s crackdown on fraud lending in their industry, both lenders appear to remain in a healthy state.

PPDAI — the older and bigger of the two lenders — came out strong in its recent quarter, beating earnings expectations. The $1.2 billion online lender reported it had 29% year-over-year growth in loan origination volume to $3 billion, compared to just 1.6% growth a year earlier.

Hexindai Announces Support For Regulators’ Decision to Include P2P Platforms in Central Bank’s Credit System (Crowdfund Insider), Rated: B

Chinese peer-to-peer lending platform Hexindai (NASDAQ: HX) announced on Tuesday its support for the decision by industry regulators to include the country’s P2P platforms in the central bank’s credit system. The online lender reported that it believes this as a positive move for the P2P industry.

Sequoia-Backed P2P Lender Huobank Collapses As Beijing Mops Up Online Finance Risks (China Money Network), Rated: A

European Union

Banks raise concerns ahead of ECB meeting (Irish Examiner), Rated: A

The president of Germany’s powerful savings banks association, community lenders that dominate the country’s shopping streets, joined Dutch bank ING yesterday in criticising the ECB’s loose monetary policy.

Its 50 million customers have increased their savings by almost 5% since last year to €965bn which is roughly the size of the Dutch economy. With lending amounting to about €860bn, the banks are left with a chunky unused surplus.

Fintech Europe Selects Eight Startups for its Fourth Batch (Yahoo! Finance), Rated: B

Fintech Europe, Plug and Play’s fintech-focused innovation platform based out of Frankfurt, Germany, announced today the eight startups selected for its fourth batch. The platform has grown its partner base to 11 Financial Institutions since its inception in May 2018. Together with Deutsche Bank, TechQuartier, BNP Paribas, Nets Group, UniCredit, Aareal Bank, Abanca, Danske Bank, DZ Bank, Elo, and Finablr, it runs two 12-week innovation programs a year.

CashDirector 

CashDirector SA is a technology company providing SMEs and banks with a Digital CFO integrated with on-line banking, helping with SMEs manage cash flow and accessing financing.

Credit Kudos

Credit Kudos is a credit bureau that uses financial behaviour to measure creditworthiness.

International

Technology Is Banks’ New Battleground (WSJ), Rated: AAA

European banks are spending vast sums on technology—but it may not be enough to defend against the incursions of bigger, richer American rivals.

U.S. lenders already dominate investment banking in Europe. The big risk for the continent’s banks is that slicker tech could give their American rivals a platform to make gains in lending to companies—the Europeans’ traditional stronghold.

This year, Europe’s banks plan to make technology investments worth in aggregate $77 billion, according to consulting firm Celent. That compares with $105 billion for their U.S. rivals. Faster, more seamless trading systems have long been a priority, but tech spending has shifted across business lines and from back office to front office. It can cover everything from maintaining decades-old systems to cutting-edge artificial intelligence.

Source: Celent

Wirecard Teams Up With Credibly to Digitalize Funding Disbursements (Crowdfund Insider), Rated: A

Germany-based global provider of digital payments and commerce solutions Wirecard announced on Wednesday it is partnering with U.S. business funding fintech Credibly to digitalize funding disbursement. Wirecard claims to be one of the largest issuers of payout cards in the U.S. and is now offering fully digitalize solutions.

PwC to AM industry: disrupt yourself or face extinction (City Wire Selector), Rated: A

The European financial services industry is facing an ‘Amazonisation’ moment, in which those offering consumer-first solutions underpinned by sustainable finance will survive and the others will cease to compete.

That is the headline finding of 52-page report co-authored by PwC Luxembourg and Luxembourg for Finance, which investigated underlying industry trends and indicated that the European market is losing ground on its US and Asian peers when it comes to innovation and assets.

State of the Chain: Five Winning Use Cases for Blockchain in 2019 (U.today), Rated: A

Predictably it was Binance that stole the limelight, with the surprise launch of its eponymous lending platform, which was unveiled on Monday, August 26, and then proceeded to fill its initial lending quota of 200,000 BNB and 10 million USDT in a matter of seconds two days later.

Dharma and Compound have announced new products, while Coinbase has hinted that this will be the next vertical it expands into.

Lenders can enjoy annualized interest of up to 15%, which is significantly better than the negative rates they are currently offered on fiat savings and on negatively yielding government bonds.

Australia

Hopes fintech inquiry will ‘validate’ bank competitors (The Sydney Morning Herald), Rated: A

On Wednesday New South Wales senator Andrew Bragg successfully moved to secure a senate committee inquiry into the fintech and regulatory technology spaces, paving the way for a year-long review into how competitive Australia is in these sectors.

Chief executive of small business lender Lumi, Yanir Yakutiel, said the inquiry should focus on expanding the regulatory sandbox program, which is designed to help early stage fintechs test their ideas.

India

Five Ways Artificial Intelligence Is Instigating Paradigm Shift In Online Lending Space (Via.news), Rated: AAA

Currently, digital lending accounts for around 15% to 20% of the total lending market and could surpass 50% in coming years.

Asia

Chinese P2P Lending Companies Ventures to Vietnam (LearnBonds), Rated: AAA

This business model boomed in China, but following a regulatory clampdown by authorities on risky financial practices, the number of fintech and peer-to-peer (P2P) lending platforms in the country dropped from about 1,900 a year ago to just 900 in May.

It now appears that some of these Chinese P2P lending companies have not necessarily disappeared. They simple ventured into new markets and in particular Vietnam.

According to the State Bank of Vietnam (SBV), there were 40 peer-to-peer lending companies operating in Vietnam as of March. Of these, 10 companies are from China.

MENA

The opportunity of peer-to-peer lending in Lebanon (Executive Magazine), Rated: AAA

Through conversations with Lebanese entrepreneurs, business owners, bankers, and politicians, I have had a number of eye-opening discussions into the challenges and opportunities faced by Lebanon’s SME ecosystem. Given the country’s long-standing tradition in financial services and its large banking sector, I believe fintech—with solutions such as peer-to-peer lending, machine learning to personalize insurance solutions, and the use of artificial intelligence for wealth management—stands as a serious contender to unlock the funding challenges faced by Lebanon’s SMEs.

Latin America

SoftBank in talks to invest in Latam venture capital funds (Reuters), Rated: AAA

Japan’s SoftBank Group Corp (9984.T) is in talks with venture capital firms in Latin America to invest hundreds of millions of dollars in their funds, a move likely to speed up spending of a $5 billion regional venture capital fund, three sources with knowledge of the matter said.

So far, SoftBank has only announced direct investments using the fund’s resources, injecting capital into Colombian delivery app Rappi, Brazilian lender Creditas, gym membership app Gympass and Mexican payments firm Clip, for instance.

Proptech Flat raises US$ 4.5 million pre-seed round led by ALLVP (Contxto), Rated: A

Contxto – Not only is the Mexican real estate industry huge but also outdated with many inefficient processes. Counteracting this, a new Mexican startup, Flat, recently raised US$4.5 million in one of Mexico’s largest pre-seed rounds ever.

Africa

Nigerian online-only bank startup Kuda raises $ 1.6M (TechCrunch), Rated: AAA

Nigerian fintech startup Kuda — a digital-only retail bank — has raised $1.6 million in pre-seed funding.

Canada

Peer to Peer Lender Lending Loop Tops $ 50 Million in Loans (Crowdfund Insider), Rated: AAA

Canada’s first peer to peer lending platform for SMEs, Lending Loop, has topped CDN $50 million in loans, according to a post by Brendon Vlaar, co-founder and CTO of the company. Lending Loop provides investment opportunities in debt-based securities to both accredited and non-accredited investors.

PayBright Raises $ 34M in Growth Equity Financing (FINSMES), Rated: A

PayBright, a Toronto, Canada-based fintech company, received a $34m equity investment from goeasy.

Authors:

George Popescu
Allen Taylor

The post Thursday September 12 2019, Weekly News Digest appeared first on Lending Times.

Thursday April 11 2019, Weekly News Digest

china p2p lending

News Comments Today’s main news: Lending Club loans $159M in the past week. OnDeck offers same-day funding. Kabbage secures $700M in funding. RateSetter ISA passes 200M GBP in subscriptions. Funding Circle CEO pocketed 4M GBP last year. Klarna launches global customer authentication platform. Today’s main analysis: Drivers of global growth in FSB’s shadow banking. (A […]

The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

china p2p lending

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

Need a loan for Tax Day? According to Lending Club data, you’re not aloan… er, alone (Thinknum), Rated: AAA

As seen in data from Lending Club ($NYSE:LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.

RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.

Lending Club Total Principal Loaned (Weekly)

ONDECK OFFERS SAME DAY FUNDING TO EMPOWER SMALL BUSINESS (OnDeck), Rated: AAA

OnDeck today announced that it will offer to fund and debit customer bank accounts with Same Day ACH transfers, eliminating a decades long pain point for small business owners accustomed to the traditional ACH transfer process, which can take multiple days and lacks certainty on when the transactions will hit bank accounts.

Same Day ACH transfers from OnDeck provide qualified OnDeck Term Loan and Line of Credit customers with funds up to the National Automated Clearing House Association (NACHA) cap of $25,000 by 5:00 pm local time on the same business day the customer books or makes a draw on their line of credit.* Qualified customers are also debited via the same day ACH service, providing them additional predictability in transaction clearing times and offering better clarity around day-to-day cash flow management.

Highlights from Jamie Dimon’s Annual Letter (PeerIQ), Rated: AAA

US payrolls rose by 196 k in March and the unemployment rate remained at 3.8%.

Source: Bloomberg, PeerIQ

Highlights from Jamie Dimon’s Letter to Shareholders

Jamie Dimon published his annual letter to shareholders. We look at some highlights below:

  • The banking system, and JPM in particular, is over-capitalized – Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks.
Source: JPM, PeerIQ

PM is investing billions in technology to compete – the cloud, AI, ML and digital banking

  • JPM customers can now open a bank account online in under 5 minutes and can reduce their mortgage closing times to 3 weeks.
  • The bank now has 49 Mn active digital customers, including 33 Mn active mobile customers
  • JPM is looking at fintechs in the US and in China as not just opportunities but also looming competition.

Online lender Kabbage rakes in 0m funding (Verdict), Rated: AAA

Kabbage, an online lender for small businesses, has fetched $700m in asset-backed securitisation (ABS) funding.

With the securitisation, the company’s debt funding increases to $940m.

Real-time data was Kabbage’s secret sauce, its first investor says (American Banker), Rated: A

The firm started life as a small, scrappy fintech startup in Atlanta in 2008, but has grown rapidly. It made $2 billion worth of loans in 2018 and more than $600 million in the first quarter of 2019. It also recently agreed to provide financing at the point of sale on Alibaba.com as part of a program called Pay Later.

Upstart Raises $ 50 Million and Announces New Bank Partners (Lend Academy), Rated: A

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

PeerStreet Lowers Minimum Real Estate Investment to $ 100 (Think Reality), Rated: A

The burgeoning peer-to-peer lending platform PeerStreet has unveiled product updates that enable investments of only $100.

The company recently announced it’s lowered the minimum investment to $100 for “small balance reinvestments” when using its automated investing product. The upgrade also expands the investment types available for automated investing to include cash offer loans and 30-day notes, which offer shorter terms than typical bridge loan investment options, the company said.

Sharestates Wins Top Real Estate Platform Award at LendIt Fintech USA 2019 (PR Newswire), Rated: A

Sharestates, a marketplace lending platform that connects real estate developers with investors, was crowned Top Real Estate Platform at LendIt Fintech USA2019 in San Francisco, California on April 9, 2019. The Top Real Estate Platform award is based on performance, volume, growth, product diversity, and responsiveness to stakeholders.

Now operating in 46 states, Sharestates offers diversified asset classes including residential, multi-family, mixed-use, commercial properties, and land acquisitions.

Since launching in 2015, Sharestates has closed on over $1.7 billion in total loan volume and returned over $675 million in principal to investors. Average annualized returns have exceeded 10% every year. As a result of its strong performance and valued relationships, 82% of Sharestates loan volume has come from repeat borrowers and 81% of its investors are repeat investors.

The stREITwise Platform Brings Real Estate Investment to All (Realty Biz News), Rated: B

The company has just announced a new acquisition to its investment portfolio, a $32 million mixed-use building in Carmel, Indiana, one of the most affluent suburbs of Indianapolis. The 140,000-square foot Allied Solutions Building, already around 87 percent leased, stands poised to increase dramatically in value thanks to its location in the heart of downtown Carmel in the heart of a busy mixed-use development surrounded by restaurants, coffee shops, fast-casual dining, service-oriented retail, and the locally renownedSun King distillery and food hall right next door.

13 cities where renting is cheaper than buying a home (AOL), Rated: A

Americans’ homeownership rate is 64.8%, according to the latest U.S. Census data.

Following are the 13 metros where renting is cheaper by more than $150 a month, beginning with cities with a smaller advantage for renters.

BlueVine Adds Term Loan to Suite of Online Working Capital Solutions to Fuel Small Business Growth (GlobeNewswire), Rated: A

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced that it is making term loan financing available for business owners through its suite of online financing solutions. The BlueVine Term Loan provides small- and medium-sized business owners with fast and simple access to financing to grow their businesses through BlueVine’s advanced online platform. More than 59 percent of businesses are looking for funds to grow their business, according to the 2017 Federal Reserve Small Business Credit Survey Report on Employer Firms. With a BlueVine Term Loan, business owners can quickly pursue larger projects and investments to bring their businesses to new heights.

Aura Approves 350,000th Affordable Loan (Bakersfield.com), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, this week approved its 350,000 th loan.

Since its launch in 2014, Aura has provided more than $437 million in credit-building loans to borrowers at approximately 1,200 partner locations using technology that enables local businesses to administer loan applications. Currently, Aura’s average loan size is around $1,600.

In total, Aura has raised over $403 million in social bonds across 21 bond issuances. The most recent issuance was in March for $50 million.

What Kind of Collateral Do I Need for a Business Loan? (Nav), Rated: A

Before you can qualify for a commercial loan, you’ll need to prove that doing business with your company is a good risk. This means you’ll need to pass successfully through a lender’s qualification process.

Next Wave of Personal Loan Growth May be Driven by Prime and Above Consumers (MarketWatch), Rated: A

The prime and above risk tiers have become a greater focus for lenders in recent years. Nearly two-thirds of unsecured personal loan balances originated in the first three quarters of 2018 were lent to prime and above consumers. FinTechs drove this shift as originations for prime and above grew to 62% in 2018, up from 52% in 2013. While still less conservative than banks, FinTechs’ overall risk profile for originations now aligns tightly with credit unions. At the end of 2018, FinTechs held the majority share of personal loan balances with 39%, while banks and credit unions followed with 28% and 21%, respectively.

Student Debt Isn’t Just An Employee Problem — It’s Also An Employer Problem (Killer Startups), Rated: A

The Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit for the fourth quarter of 2018 that outstanding student loan debt increased to $1.46 trillion, which is $15 billion more than the previous quarter. It also reported that student loan debt rose by $79 billion in 2018.

The student debt load isn’t just impacting the individual students who enter the workforce, hoping they can find a job that enables them to make those monthly payments. I’s also slowing economic growth. A January 2019 Federal Reserve paper noted that young adults report their student loan debt is the reason they’re unable to buy a home. The same report also cited other research concluding that 20 percent of the decline in homeownership among young adults relates to student loan debt that’s been rising since 2005.

Amount Announces Cloud-Based Account Verification Platform (Kake), Rated: A

Amount today announced AmountVerify, a cloud-based platform for risk management across financial products. AmountVerify marks the first time industry leading fintech provider Avant is making a component of its cutting edge online lending platform available to financial service companies as a standalone product through Amount.

Onfido raises $ 50M to create the Identity Verification Standard for Businesses Globally (Markets Insider), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M. The round was led by SBI Investment and Salesforce Ventures, with support from M12 (formerly Microsoft Ventures), FinVC and others, including existing investors.

Forward Financing Expands Capital Base with $ 90 Million Credit Facility (Yahoo! Finance), Rated: A

Forward Financing has closed on a $90 million credit facility, consisting of a $60 million senior revolving credit facility and a $30 million junior term loan. AloStar Capital Finance (“AloStar”), a division of Cadence Bank, N.A., served as the Agent on the senior facility.

Credibly Announces Investment Grade Senior Debt Offering (Yahoo! Finance), Rated: A

Today, Credibly announces the next phase in its balance sheet growth strategy with a $10 million Investment Grade-rated senior debt offering. The transaction closed on March 28, 2019.

Mitek Expands Auto-Capture User Experience Across All Digital Channels with the Addition of Desktop (GlobeNewswire), Rated: A

Mitek today announced it has upgraded its desktop browser experience to support auto-capture so customers can rapidly verify the identity of applicants across all digital channels: desktop browsers, mobile web and native applications.

According to Javelin Research, today only one third of users (34 percent) still complete the entire account opening process on their desktop.

MiSnap delivers a superior auto-capture experience for desktop and across mobile devices through:

  • Guided commands:  Real-time commands such as where to place a document in relation to the camera or detection of glare on the ID document are some of the conditions evaluated in order to help the user capture an optimal image, which improves image acceptance rates and reduces capture retries.
  • Advanced image analysis: Once MiSnap has achieved an optimal capture of the ID document, the software then further analyzes the image and makes the necessary adjustments in order to process all images consistently and accurately.
  • Modern architecture: Because MiSnap uses WebAssembly, it can perform at native speeds and is easy to integrate into customers’ web-based apps and requires minimal footprint.

58% of lenders will use AI in next two years (AI Foundry Email), Rated: A

Fannie Mae recently put out a 

  • Nearly two-thirds of lenders are familiar with AI
  • But, only 27% are using it in their businesses now, and…
  • Only half of that group are currently using it with customers (the rest are doing trials)
  • However, looking ahead two years – 58% of lenders expect to use AI/ML in their mortgage business.
  • Of the rest:
      • 22% predict they’ll be investigating AI
      • 19% foresee being in a “wait and see” mode

    These data points show us that “prime time” is coming soon for AI/ML in mortgages. 

    Fintech alone won’t be enough to boost credit union mortgage volumes (Credit Union Journal), Rated: A

    How can credit unions, especially small institutions, compete with Quicken Loans’ Rocket Mortgage “Push button, get mortgage” campaign?

    They can’t – and, sources said, they shouldn’t try.

    GROUNDFLOOR Wins 2 FinTech Awards (Groundfloor Email), Rated: B

    GROUNDFLOOR was named Best Crowdfunding Platform by the 

    Pulte Mortgage and Finicity Partner to Combat the Home Loan Paper Chase (MarketWatch), Rated: B

    Pulte Mortgage announced today it is partnering with Finicity — a leading provider of real-time financial data access and insights, to provide its borrowers with a faster, simpler and more secure way to navigate the home financing process.

    Hudson Data and LendingPoint partner to prevent Synthetic ID fraud (Finanzen), Rated: B

    Hudson Data and LendingPoint announced that they are partnering to create an industry solution to prevent synthetic identity fraud using powerful graph machine learning.

    Dharma crypto lending platform officially goes live (CoinGeek), Rated: B

    Dharma Labs completed a Series A funding round earlier this year to support its cryptocurrency lending platform project. The San Francisco-based company raised $7 million from companies such as Polychain Capital, Coinbase Ventures and others and, if there was any concern about the platform not going live, those concerns are now extinguished. Dharma announced this past Monday in a Medium post that the platform is now live.

    United Kingdom

    RateSetter ISA Milestone: Passes £200 Million in Subscriptions (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender RateSetter recently announced its ISA has now passed the milestone of attracting £200 million in subscriptions.

    “Investors have enjoyed an average annualised return of 4.5%, tax-free of course, since the RateSetter ISA launched in February 2018. The average RateSetter ISA balance stands at £11,000.”

    Funding Circle boss pocketed more than £4m last year (P2P Finance News), Rated: AAA

    FUNDING Circle founder Samir Desai (pictured) earned more than £4m last year, having cashed in some of his shares at the time of the peer-to-peer lender’s stock market flotation.

    Desai took home a salary of £210,000 last year, according to Funding Circle’s annual report, a four per cent increase from his salary of £202,000 in 2017.

    The majority of his total remuneration of £4.081m came from cashing in share options.

    Zopa rewrites outdated money idioms (The London Economic), Rated: AAA

    Each future-looking idiom challenges the status quo. For example, according to Zopa, the ‘signing for the bill’ gesture will be redundant soon. Instead, when people have finished their meal, people will be more likely to signal facial or iris recognition to the waiter. Jonesy gives his take and takes it one step further by illustrating a customer displaying his eyeball to request the bill.

    Source: The London Economic

    Fintech unicorns are leading job creation in London (Business Insider), Rated: AAA

    In 2018, there was a 61% increase in fintech job creation within London from the previous year, per a new report by Robert Walters, making it the fastest growing sector for vacancies in the city.

    The UK houses 25% of all fintech unicorns and their growth plans call for more talent. There are 29 fintech unicorns worldwide, seven of which are based in the UK, making the UK second only to San Francisco, which is home to nine.

    Over 30% of jobs in the UK’s fintech industry are for IT-related roles, compared with 24% in 2017. And fintech unicorns’ hiring for IT professionals increased 74% year-over-year (YoY).

    Source: Business Insider

    London to take San Francisco’s fintech unicorn crown (The Innovation Enterprise), Rated: A

    However, the report has predicted that London could take the lead as early as this year, as the city receives 39% of European fintech venture capital funding, with the runner-up, Berlin, taking just 21% of the total investment.

    With 50% against a global average of 33%, the UK also enjoys the highest rate of consumer fintech adoption of any Western country, only beaten by India and China, the report found.

    LendInvest gains £200m HSBC funding as it seeks home loan market entry (Verdict), Rated: A

    LendInvest, which operates an online marketplace for mortgages, has received an investment of £200m ($261m) from HSBC UK to support its foray into the regulated home loan sector.

    Peer-to-peer scheme for first-time buyers launches (FT Advisor), Rated: A

    Start-up company Stepladder is promoting a new way for first-time buyers to save for a house deposit.

    Arbuthnot Latham launches Arbuthnot Direct for those seeking long-term interest returns (Arbuthnot Email), Rated: B

    Arbuthnot Latham & Co., Limited (“Arbuthnot Latham”) is pleased to announce the launch of its new platform under the trading name of Arbuthnot Direct. Arbuthnot Direct offers fixed term deposits online, targeting retail customers who are seeking interest returns on their money over the longer term. The platform held a successful soft launch in February 2019 and has already met with a positive reception.

    China

    The rise and fall of P2P lending in China (Finextra), Rated: AAA

    It is worth mentioning that the size of China’s P2P industry is larger than that of the rest of the world combined, with outstanding loans of US$217.96BN.

    China’s online P2P lending industry grew rapidly between 2011 to 2015, with the number of P2P lenders growing from 50 to nearly 3,500 respectively.

    Trouble started brewing in China back in 2016, when statistics released by the Chinese Banking Regulatory Commission showed that about 40% of P2P lending platforms were in fact Ponzi schemes.

    This triggered the shutdown of P2P lending platforms; over 900 closed by the end of 2016. For 2018, only 1,021 providers remained in place.

    Source: Bloomberg News

    Shenzhen police arrest Zhang Wei, calling China Create Capital a ‘mafia-like gang’ (SCMP), Rated: A

    China Create Capital Limited, the investment holding company headed by the 46-year-old Heilongjiang native is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms, the Shenzhen police said in a notice. The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

    The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country’s financial system and capital markets, where 1,129 “mafia-like” syndicates were broken up across 10 provinces last year, with 4.94 billion yuan (US$737 million) of assets seized, according to the police. A number of Chinese oligarchs including Anbang Group’s

    former chairman Wu Xiaohui

    , CEFC Group’s founder Ye Jianming and financier Xiao Jianhua had fallen from grace since 2017.

    $ 60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market (CoinDesk), Rated: A

    These new crypto lenders include such notable names as Bixin Capital, FBG Capital and DGroup, founded by Dong Zhao, who made a name by operating one of the longest-running over-the-counter (OTC) trading desks in China. Along with a startup called Babelbank, these investors have originated a combined $60 million worth of loans over the last five months, denominated in cryptocurrencies or, in one firm’s case, Chinese yuan.

    European Union

    Klarna launches global customer authentication platform (Klarna), Rated: AAA

    Klarna today announced the launch of its global authentication platform — an aggregator with multiple global and local authentication solutions. The platform allows multinational businesses, including merchants and other banks, to provide a simple, secure and personalised customer authentication experience irrespective of market, through a one-time integration.

    Klarna Sees Payments as Evolving From Function to Engagement (WWD), Rated: A

    Klarna’s Hannah Bravo says customers chose brands based on payment options.

    This New Tool Is Helping Retailers Build Consumer Trust During Online Checkouts (Footwear News), Rated: B

    The Klarna platform enables businesses to choose from a range of global and local authentication methods so that they can find one that works best for their customer. Whether using SMS verification or emailed one-time passwords, brands and retailers can verify their customers’ identities with minimal interruption to the consumer’s shopping journey.

    International

    Drivers of Global Growth in FSB’s Shadow Banking (DBRS Email), Rated: AAA

    DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010, according to the FSB. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster.

    Summary highlights of the commentary include:

    • Shadow banking is still growing. This narrow, but rapidly growing, subset of nonbanks had assets of $52 trillion in 2017, up 75% from $30 trillion in 2010.
    • Since 2010, assets of nonbanks are also growing, up 61% to $185 trillion. That is 49% of the $378 trillion in total global assets in all financial institutions at the end of 2017, up significantly from 44% in 2010.
    • The key driver of this growth in nonbank assets is the expansion of OFIs. These OFIs are defined as all financial institutions that are NOT central banks, banks, insurance companies, pension funds, public financial institutions, or financial auxiliaries. Assets at these OFIs grew 71% since 2010 to a record $117 trillion in 2017, or just over 30% of assets in financial institutions globally.
    • By far, the largest segment of shadow banking globally is collective investment vehicles, which are subject to runs. These include fixed income funds, mixed funds, MMFs and hedge funds. Since 2010, this segment has grown by 130% to $36.7 trillion in assets. By contrast, growth in other segments has been less than $1 trillion, or even negative.

    Read the full report here.

    Crypto Lending Platform Salt Adds Support for Dash as Collateral (Crypto-Economy), Rated: A

    Cryptocurrency lending platform Salt will now be allowing its users to collateralize their Dash holdings including their Masternode staking coins to access loan facilities.

    India

    RentoMojo in talks to raise $ 40 million from GMO, others (livemint), Rated: A

    For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.

    Asia

    Housing sector remains major source of complaints: BPKN (The Jakarta Post), Rated: A

    The BPKN received 154 complaints in the first quarter, most originating from the housing sector. BPKN communications and education coordinator Arief Safari said the agency had received 129 complaints on the housing sector in the first quarter, followed by six complaints on online peer-to-peer (P2P) lending, three on banking and the remainder on various sectors, including travel and e-commerce.

    Batumbu to help finance SMEs (The Jakarta Post), Rated: A

    PT Berdayakan Usaha Indonesia has announced that it aims to help small and medium enterprises (SME) access financial capital through a partnership program with its digital platform Batumbu.

    MENA

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

    Wednesday July 11 2018, Daily News Digest

    Change Year to Year in Commercial loans

    News Comments Today’s main news: PayPal is on an acquisition binge. Financial advisers eschew P2P lending. Ant Financial to go all in on the blockchain. 51 Credit Card IPO priced at HKD 8.50 per share. Today’s main analysis: Consumer debt increases in May. Today’s thought-provoking articles: Business loan drought ends for banks. Germany’s crowdfunding market hits $588M. Brazil leaders want […]

    Change Year to Year in Commercial loans

    News Comments

    United States

    United Kingdom

    China/Hong Kong

    International

    Other

    [toc]

    United States

    PayPal is leading a payment company acquisition binge (Quartz) Rated: AAA

    PayPal is tearing through a flurry of payment company acquisitions, having snapped up four in just a five-week period this year.

    This year has already been a record for payment company deals, with $46 billion in acquisitions (paywall) though June, according to Dealogic. That compares with $33 billion in total for last year

    Recent acquisitions include iZettle, a Swedish mobile payments company, and Hyperwallet, which businesses can use to pay employees around the world (the deal size is only shown if it has been verified by Pitchbook):

    Source: Quartz

    Business-Loan Drought Ends for Banks (Wall Street Journal) Rated: AAA

    Preliminary second-quarter data from the Federal Reserve indicate the year-over-year growth rate of business loans rose to 5.5% in late June from less than 1% near the end of 2017. The upturn marks the reversal of a prolonged slump in business-loan growth that began in earnest about two years ago.

    For banks, the acceleration in lending may help lift results when firms report quarterly results this month. Profits from lending are a major component of bank earnings and grow when total loans increase or rates on loans rise. Business-loan growth often helps on both fronts because these credits typically carry floating rates that allow banks to capture rate increases.

    Source: Wall Street Journal

    Consumer Debt Increases In May (PYMNTS) Rated: AAA

    New data shows that U.S. consumer debt rose in May by the most in six months, showing that Americans were more comfortable with spending midway through the second quarter. The data from the Federal Reserve shows an increase in revolving debt, which includes credit cards, as well as a boost in non-revolving debt that includes educational and auto loans.

    Source: Lending Tree

    This latest news comes after LendingTree, the nation’s leading online loan marketplace, released its first Consumer Debt Outlook in May 2018, finding that Americans owe more than 26 percent of their income on consumer debt, up from 22 percent in 2010. That means Americans are on track to accumulate a collective $4 trillion in consumer debt by the end of this year. In fact, over the past five years, Americans have been accumulating more debt, and for nearly two years, consumer credit has grown at a steady rate of 5 to 6 percent annually.

    Source: Lending Tree

    See the full results of the study here.

    Insolvent insurer causes headache for Va. bank’s student lending (American Banker) Rated: A

    Virginia National Bankshares in Charlottesville, Va., will increase the loan-loss allowance for its student loan portfolio after an outside insurance carrier was shut down.

    The $625 million-asset Virginia National said in a regulatory filing Thursday that ReliaMax Surety, a South Dakota insurer that issued surety bonds tied to purchased student loans, is insolvent and was placed into liquidation last month.

    JPMorgan Chase launched an online bank for millennials called Finn, and I prefer it to the real thing (Business Insider) Rated: A

    Finn, a mobile bank built by Chase, recently rolled out nationwide. And I gave it a try.

    In addition to offering bread-and-butter checking and savings account functionality, it also offers services many firms in the personal finance startup space have built their businesses around. These include automatic saving tools and charts to see where you are spending money.

    Personally, I think the app is a better experience than my traditional Chase mobile bank, since it more easily allows you to send checks from the app, save money in an easy and fun way, and keep track of your spending. It’s also free. And there’s no overdraft fees. But it’s not without flaws.

    The Past, Present and Future of the ILC Bank (DeBanked) Rated: A

    Last Thursday, Square confirmed that it withdrew its application to the FDIC for depository insurance, which would allow it to take deposits from customers in all 50 states. The company said it plans to refile.

    Regardless of the reason for withdrawing the application, this news revives the debate over whether fintech companies should be allowed to become banks in the first place – at least in the manner that Square and SoFi have sought to attain bank status.

    How to invest $ 100 regularly and make it a fortune? (Global Banking and Finance) Rated: A

    Don’t let your money sit, let it work for you. I know I sound bit weird, but you can put your money to work. No! you do not need the fortune to invest in, just $100 is all that is required. Though investing an amount may appear bit difficult in starting but once you get a hold on the things, it will become easy eventually. Investing is all about making a choice, you can invest $100 and can earn thousands in future or you can just spend this amount on a dinner.

    Lending Club

    This could be another great option to make the investment in. Lending Club is basically a peer-to-peer lending, where borrowing and lending takes place between the ordinary folks. This is one of the largest online market in the world, that connects the investors and borrowers.

    Can I turn $ 100k into $ 1 million in a decade? (Money Rates) Rated: A

    A decade is a fairly short period of time, so think about what it will take to grow your initial investment by a factor of ten in ten years. With no additional investment, turning $100K into 1 million would require a compound average annual return of 25.9 percent, which is pretty unrealistic. Historically, the U.S. stock market has averaged a return on investment of about 10 percent per year.

    Peer-to-peer lending has created a relatively new form of income investing in which you can invest by making personal loans. Higher risk loans produce higher income yields but are also more likely to default. You can manage your risk somewhat by choosing lower risk loans, focusing on shorter term loans and diversifying by funding small amounts of many different loans.

    Credibly Hires Former CIO of FBI to Drive Information Technology Strategy (Crowdfund Insider) Rated: B

    Credibly, a small and medium-sized business lending platform, announced on Tuesday it has hired Jerome Pender to drive its information technology strategy. According to the online lender, Lender is a seasoned professional more than three decades of experience in information technology. He has experience in business systems, enterprise architecture, technology, and governance.

    Prior to joining Credibly, Pender was the Chief Information Officer, Operating Partner, and Managing Director at Z Capital Partners. He also spent more than a decade at the FBI, serving as Chief Information Officer and Executive Assistant Director, as well as Deputy Assistant Director. Before the FBI, he held several leadership positions at UBS AG.

    United Kingdom

    Advisers eschewing P2P due to insurance ‘grey area’ (Peer2Peer Finance) Rated: AAA

    FINANCIAL advisers are avoiding giving advice on peer-to-peer lending because they are worried it will not be covered by their professional indemnity insurance (PII).

    Max Lehrain, chief operating officer at P2P property lender Relendex, said P2P investing is a “grey area” when it comes to PII.

    Brendan Llewellyn, co- founder and director of communications platform Adviser Home, suggested PI insurers will decide whether or not to cover P2P investments on a case-by-case basis.

    Open Banking – a complete failure? (The Finanser) Rated: A

    PwC recently delivered a report on open banking – Open Banking market could be worth £7.2bn by 2022: PwC – PwC UK. Some notable points raised;

    The principle growth areas are projected as account aggregation, analytics of expenditure and financial product comparisons. This is difficult to understand given that none of these areas is new – in fact the information is being delivered differently – that is all that has changed. And in most cases (relative to challenger banks) the data delivered is very limited, preventing innovation on these pre-existing services. The major market comparison engines pull richer data through a combination of private means and screen scraping, and have made clear that open banking APIs will not replace this in their current form.

    Oblix secures FCA authorisation for P2P lending platform (Bridging & Commercial) Rated: A

    Oblix Capital Technologies has been granted authorisation as a P2P firm by the FCA.

    The authorisation allows the subsidiary to the London-based specialist lender Oblix Group to operate a regulated electronic lending platform.

    Oblix has enjoyed a strong period of growth and hopes the launch of its P2P lending platform will supplement this.

    NEW CHIEF EXECUTIVE FOR PROPERTY LENDER (Insider Media) Rated: B

    A new chief executive has taken the helm at a Birmingham-based peer-to-peer property lender. Michael Bristow has assumed the role at CrowdProperty after acting as a non-executive director.

    Bristow was previously managing partner at Growth Strategy, a property technology investor and private equity advisory business.

    China/Hong Kong

    150 Billion Dollar-valued Firm Ant Financial Will Go All in on Blockchain (Toshi Times) Rated: AAA

    Ant Financial: you may never have heard of it if you don’t live in Asia, but its payment platform Alipay is one of the biggest payments facilitators in the region, bigger than Samsung Pay, Apple Pay, and Android Pay in most Asian countries.

    It is part of Jack Ma’s $450+ billion valued Alibaba empire and recently raised significant investment from investors worldwide pumping its own value up to a whopping $150 billion.

    51 Credit Card’s IPO priced at HKD 8.50 per share (KrASIA) Rated: AAA

    China’s 51 Credit Card, an online credit card management platform, is set to price its IPO at HKD 8.5 per share at the bottom of its indicative range of between HKD8.5 – 11.5, according to various reports.

    The company is set to raise an estimated US$129 million in the flotation, according to a Tencent report.

    Its net profit is up nearly 1304% in 2017 from a year earlier, standing at $112 million (RMB 744 million). However, it has been operating in a negative cash-flow for the last three years and its cash and cash equivalents dropped to 1.26 billion yuan in 2017 from 2.1 billion yuan in 2016.

    Hong Kong digital bank Neat nabs tidy $ 2m funding (FinTech Futures) Rated: A

    Hong Kong-based digital bank Neat has secured a new round of $2 million funding from Dymon Asia Ventures and Portag3 Ventures.

    According to Neat, this investment will be used to unveil some new features and tools; and for recruitment.

    For the features and tools, it offers a vote option on its website to create a “wishlist”. (A common ploy among new firms and banks.)

    Chinese Auto Sales Run Into a Lending Roadblock (Wall Street Journal) Rated: A

    China’s crackdown on shadow banking has caused some high-profile blowups. Now it’s driving the country’s car makers off course.

    One big target for Beijing has been the proliferation of peer-to-peer lending platforms—total transactions on these ballooned to 2.8 trillion yuan ($423 billion) last year, more than 10 times the total in 2014, according to industry website wdzj.com. The worry is that such platforms have become a hotbed for embezzlement, or could simply run out of money. Local media reported dozens of them collapsing.

    Tighter rules may trigger P2P industry shakeout (ECNS) Rated: A

    Only one out of the nine peer-to-peer lending companies in China might be able to survive as top financial regulators are stepping up the pace of scrutiny to curb risks caused by the massive unregulated sprawl in the past few years.

    The central government plans to maintain “pressing posture of severe attack” to clamp down on activities violating laws and regulations in internet finance, extending the ongoing nationwide crackdown for another year, Pan Gongsheng, deputy governor of the People’s Bank of China, the central bank, said during a meeting on Monday.

    Dianrong Names Tony Zhang Chief Technology Officer (PR Newswire) Rated: B

    Dianrong today announced the appointment of Tony Zhang as Chief Technology Officer (CTO). Mr. Zhang will report to Long Hsiang Loh, CEO of Dianrong.

    Mr. Zhang has nearly two decades of experience in science and technology, with in-depth knowledge of financial and internet technology as well as company management. He worked in Silicon Valley for 11 years, including eight years at PayPal in various leadership roles. He provided recognized technical and business leadership across a range of PayPal’s core product features and functionalities.

    International

    LendLedger (LOAN Token): Decentralized Blockchain Crypto Lending Market? (Bitcoin Exchange Guide) Rated: A

    LendLedger hopes to be the solution to these problems by opening up global lending markets. The platform is changing the face of lending to the underserved segments. Already this platform has processed tens of millions of dollars in loan requests in India, which has led to the provision of loans to hundreds of thousands of borrowers in the informal and small business sectors in 40 Indian cities. This platform is opening up new financial markets across the globe.

    The platform unlocks data on informal and small business borrowers making it possible for lenders to offer loans to the informal traders. LendLedger seeks to bridge the $2.6 trillion lending gap between the institutional lending capital and informal borrowers. The aim of the platform is to come up with a lending market that is both inclusive and profitable for all the participants.

    Leading Crypto-Backed Lending Networks Join Forces To Unlock Mass Adoption (Payment Week) Rated: B

    Etherisc, the global, decentralized insurance platform for collectively building insurance products, has announced the launch of a blockchain consortium to create Collateral Protection Insurance (CPI) for the crypto lending market. The consortium aims to address a current, significant barrier to mass adoption by facilitating safe participation in crypto lending, clearing the way for more institutional players to enter the market.

    The founding members of the lending consortium include bZx, formerly b0x, a decentralized margin lending protocol and liquidation oracle marketplace; Celsius Network, a peer-to-peer decentralized borrowing and lending platform; Colendi, a comprehensive credit scoring protocol and microcredit platform; ETHLend, a peer-to-peer lending smart contract on the Ethereum blockchain for lending ether; Lendroid, a unique non-custodial lending platform working to enable a range of collateralized loans, advanced auction markets and trust-independent margin trading; Libra Credit, a lending ecosystem that facilitates open access to credit; Nexo, a platform for instant crypto-backed loans, powered by the 10-year-old leading European FinTech group Credissimo; Ripio Credit Network, a protocol based on smart contracts and blockchain technology, which brings enhanced transparency and reliability in credit and lending; and Sweetbridge, a blockchain-based economic framework that transforms supply chain, logistics, and unleashes working capital.

    European Union

    Germany’s crowdfunding market reaches $ 588 million (Business Insider) Rated: AAA

    At the end of June 2018, small- and medium-sized businesses (SMBs) in Germany had raised €500 million ($588 million) using equity crowdfunding and crowdlending marketplaces, according to a report from crowdfunding.de.

    Source: Business Insider

    Here are a couple of key takeaways from the report:

    • Real estate companies use crowdfunding most. Real estate accounted for over half, 53.3% of all the crowdfunding in Germany, making it the most common segment to opt for this funding method. It was followed by enterprise with a 42.6% share of funding raised and energy at 3.8%. Other segments combined only had a 0.3% share, showing that crowdfunding is largely dominated by two areas. However, as crowdfunding becomes more popular, we might see other sectors increasingly choosing it.
    • Unsurprisingly, a digital real estate investment provider had the largest share of funding among platforms. Germany-based Exporo raised 32.3% of the total, followed by UK-based Funding Circle with 14.4%. This shows that foreign companies also have a lot to gain from Germany’s crowdfunding market.

    Read the full report here.

    Australia

    Robo-advice users in for the long haul (Financial Standard) Rated: A

    Insights from the automated investment platform show 36.5% of its users are attempting to grow wealth outside of super, while 28.6% are using it to accrue retirement savings.

    The top reasons driving use of automated investment and advice platforms were lower fees and investment diversification, highlighted by 18.3% and 16.7% of users respectively.

    Viewing the data through a gender lens, half of Six Park’s female clients are checking the progress of their portfolios at least once a month and their most common goal is the ability to purchase a property in the near-term; 25% of females flagged this, compared to just 10% of men. In contrast, more than half of Six Park’s male clients are checking their portfolios on a daily or weekly basis.

    Latin America

    Local leaders in Brazil look for investments in social impact (Impact Alpha) Rated: AAA

    At the country’s first social finance forum in 2014, you could count the participants on one hand. All of them were in Rio and Sao Paulo. Equity crowdfunding and peer-to-peer lending were still in regulatory review. Few universities included social finance in their curriculum. All of that has changed. Today:

    Asia

    Credit manager AsiaCollect picks up $ 4.5m funding (FinTech Futures) Rated: AAA

    Singapore-based credit management services (CMS) provider AsiaCollect has raised $4.5 million to date after closing its recent investment round led by SIG Asia Investments.

    Dymon Asia Ventures, the venture capital arm of Dymon Asia Capital, a Singapore-based alternative investment management firm, returned to co-invest in this round after investing $1 million in AsiaCollect’s pre-series A equity round in August last year.

    AsiaCollect offers CMS outsourcing, CMS advisory services, debt purchasing, and Software-As-A-Service (SaaS).

    Authors:

    George Popescu
    Allen Taylor

    Thursday August 31 2017, Daily News Digest

    European fintech

    News Comments Today’s main news: SeedInvest to host live crowdfunding at LendIt Europe. Funding Circle says ‘good-bye’ to smaller brokers. DBRS upgrades SoFi Professional Loan Program Transactions. Credibly to manage BizFi’s portfolio. Fundrise re-opens Income eREIT. Laplanche to keynote at LendIt Europe. Today’s main analysis: France, Sweden scooping up bigger share of Europe’s fintech deals since Brexit. Today’s thought-provoking articles: France, […]

    European fintech

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    Australia

    India

    Asia

    Middle East

    Africa

    South America

    CARICOM

    News Summary

    United States

    DBRS Upgrades and Confirms SoFi Professional Loan Program Transactions (DBRS), Rated: AAA

    Of the 36 outstanding publicly rated classes reviewed, 24 were confirmed and 12 were upgraded.

    Issuer Debt Rated Rating Action Rating Trend Notes Published Issued
    SoFi Professional Loan Program 2013-A LLC Post-Graduate Loan Asset-Backed Notes Upgraded AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2014-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Upgraded AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2014-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Upgraded AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2014-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Upgraded AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2014-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Upgraded AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Upgraded AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Upgraded AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-A LLC Post-Graduate Loan Asset-Backed Notes, Class A-2 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-B LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-C LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-D LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class A-1 Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class A-2A Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class A-2B Confirmed AAA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-B LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded AA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-C LLC Post-Graduate Loan Asset-Backed Notes, Class B Confirmed AA (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-D LLC Post-Graduate Loan Asset-Backed Notes, Class B Confirmed AA (low) (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class B Confirmed AA (low) (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-B LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded A (low) (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-C LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded A (low) (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2015-D LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded A (low) (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-A LLC Post-Graduate Loan Asset-Backed Notes, Class B Upgraded A (low) (sf) Aug 30, 2017 US
    SoFi Professional Loan Program 2016-E LLC Post-Graduate Loan Asset-Backed Notes, Class C Confirmed A (low) (sf) Aug 30, 2017 US

    CREDIBLY SELECTED TO SERVICE BIZFI’S $ 250M PORTFOLIO (Credibly Email), Rated: AAA

    Credibly, a leading findata small and medium-sized business (SMB) lending platform, announced today that the company is now servicing BizFi’s $250 million portfolio and 5,200 merchants.  Since 2005, BizFi had been a leading capital provider to SMBs and in 2016 was one of nation’s top three largest originators of merchant cash advances.  Numerous SMB direct lenders vied for the BizFi portfolio. Credibly was chosen due to their proprietary data science driven portfolio management strategy.

    Credibly also announced that it has crossed the $500 million milestone in capital deployed to tens of thousands of SMBs across the U.S.  This is separate from the $250M portfolio the company is now servicing from BizFi.

    In addition to servicing the BizFi portfolio, Credibly is working with both sales partners and merchants to provide additional working capital to the businesses in BizFi’s portfolio. Credibly’s data science team has the ability to analyze BizFi’s twelve years of data and remittance history, which will allow Credibly to better service both the BizFi and Credibly portfolios. Further, BizFi’s data enhances Credibly’s risk management, scoring models, and portfolio management tools.

    The Small Business Association (SBA) estimates that traditional banks still reject approximately 90 percent of SMB loan applications. Since 2010, Credibly has emerged as a proven platform that leverages data science and analytics to provide SMBs with a simple and intuitive way to access critical working capital.  The company addresses the fundamental capital needs of SMB owners across a broad credit spectrum and through every stage of a business’s life cycle.

    Main Street SMBs across a wide variety of industries that include restaurants, retail stores, salons, spas, dry cleaners, auto body shops, and doctors’ offices, all rely on Credibly to secure the necessary capital they need to grow.

    Fundrise Re-Opens Income eREIT (Crowdfund Insider), Rated: AAA

    Fundrise, the very first real estate crowdfunding platform in the US, has re-opened its Income eREIT to investors.

    According to Fundrise, the Income eREIT has performed quite well, so far. The Income eREIT has generated 10% or higher in annualized dividends since Q2 of 2016. As of Q3 2017, the fund has posted a 10.5% annualized dividend which compares favorably to the FTSE NARET Composite REIT Index at 4.2%.

    Bills Being Introduced to “Fix” Decision in Madden v. Midland (Lend Academy), Rated: A

    For a historical perspective you can read our coverage of the case at the below links:

    An article in American Banker this week from Adam Levitin, professor of law at Georgetown University, provides his perspective on what the bills mean for the case.

    Nat Hoopes, Executive Director of the Marketplace Lending Associationdisagreed with Levitin’s assessment. Here is what he had to say:

    These bills are strongly pro-consumer. They will help ensure that consumers can continue to refinance their higher interest rate debts, saving consumers significant amounts of money through lower interest costs.  Furthermore, these bills clearly cannot facilitate predatory lending because they do not change the rate or terms on which any entity in this country (regulated at the state or federal level) can lawfully lend money.  The language of the bills simply reaffirms one of the fundamental principles of contract law — that valid loan contracts can be sold on the secondary market.

    We have a situation created by the Second Circuit decision where responsible lending has been reduced in three states (NY, CT, VT). Demand has not been reduced in these states.

    Trizic Drags Banks Into The Fintech Age With Automated Wealth Management (Benzinga), Rated: A

    Trizic, the fintech company behind a B2B wealth management platform, has signed on as the technology provider to Fidelity National Information Servcs Inc FIS 0.21%, connecting the Bay Area startup with the banking sector.

    Trizic Digital Advisor — an open-API platform for registered investment advisers, enterprise clients, banks and credit unions — is a product built from the ground-up, CEO Drew Sievers told Benzinga.

    The platform’s features include trading, portfolio management, cash management, billing and compliance reporting

    The 8 hottest housing markets in America (Business Insider), Rated: A

    Sharestates, an online real-estate investing platform, has released its fall report on the hottest housing markets in the US.

    Places on the list are ranked by three metrics:

    • Return on Investment (ROI): The rate of return to Sharestates loan investors.
    • ARV: The ratio of the total loan amount, including acquisition and rehab financing, compared with the After Repair Value.
    • Increase in demand from 2016 to 2017: Percent of 2017 Sharestates loans in the listed areas compared with 2016.

    The top 3:

    3. Sparrows Point, Maryland

    ROI: 11.8%

    ARV: 50%

    2. Flatbush, Brooklyn, New York

    ARV: 28%

    Increase in demand: 400%

    1. Fishtown, Philadelphia, Pennsylvania

    ROI: 11.8%

    ARV: 14%

    Increase in demand: 650%

    LendingTree, Inc. Announces Changes to its Executive Team (PR Newswire), Rated: A

    LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, has announced two key promotions within its leadership team. J.D. Moriarty, who joined LendingTree earlier this year as SVP of Corporate Development, has been promoted to Chief Financial Officer, and Gabe Dalporto, who previously served as the company’s Chief Financial Officer since 2015 and as LendingTree’s Chief Marketing Officer from March 2011 to June 2015, has been elected to the company’s board of directors.

    DOL Rule Delay Highlights Industry Battle Lines (Financial Advisor IQ), Rated: A

    Word that full implementation of the Department of Labor’s contentious fiduciary rule has been delayed for two years — until July 2019 — may not have shocked many observers but it’s still deeply significant, say industry experts on both sides of a debate that’s raged across two very different presidential administrations.

    That’s if it ever even happens, grumbles Rostad, whose organization wants all financial advisors to be client-first fiduciaries as a matter of public service. He says the Trump administration and the brokerage industry despise two provisions of the DOL rule — the right for investors to sue advisors and firms for breaches of the rule, and the best interest contract exemption, which lets advisors continue receiving commissions if they agree in writing to continue acting in the client’s best interests and make a full disclosure of options other than commission-based business available. And the administration and brokerage industry will be working overtime between now and mid-2019 to get the provisions watered down or eliminated altogether, says Rostad.

    Meanwhile, the Financial Services Institute, a Washington D.C.-based advocacy group for “a healthier, more business-friendly regulatory environment for our members” — mainly broker-dealers and their advisors — sees the delay as an opportunity for needed refinements.

    Banks aren’t giving up on personal finance apps (American Banker), Rated: A

    Don’t consign personal financial management apps to the ash heap of technology just yet.

    Granted, on Thursday Prosper Marketplace is discontinuing Prosper Daily, an app formerly known as BillGuard that helped users monitor their finances and credit scores. And the next day Capital One Financial is set to close the money management app Level Money.

    Will Blockchain Change The Way We Invest? (Forbes), Rated: A

    Currently, the value of all the Bitcoin in the world is around $90 billion, much less than individual companies such as Amazon ($474.41 billion market cap), Google ($649.49 billion) and Apple ($815.39 billion). However, with the current trend, some investors predict cryptocurrencies to be worth $5 Trillion by 2022.

    As cryptocurrencies are becoming more common, new blockchain powered platforms are emerging to change the way we invest. The success of these companies may create a scenario in which fintech companies like RobinhoodFundriseQuantopian and others – currently considered the most disruptive companies in the world – will become outdated in a few years.

    Real.markets – Disrupting real estate crowdfunding

    REAL is an Ethereum Smart-Contracts governed ecosystem that focuses on creating the best conditions for Real Estate investment eliminating costs due to unnecessary intermediaries, providing transparency and liquidity, alleviating tax inefficiencies and easing cross-border transactions under a unified crowdfunding platform.

    NASDAQ LINQ – Trade private companies

    Almost two years ago NASDAQ launched LINQ, a digital ledger technology that leverages a blockchain to facilitate the issuance, cataloging and recording of transfers of shares of privately-held companies on The NASDAQ Private Market in collaboration with Chain.

    enigma – machine-based investing platform and infrastructure for crypto-assets

    From 2009 to 2015 alone, the amount of assets under management (AUM) by quantitative hedge funds grew at a rate of 14% year-over-year, nearly double the 8% year-over-year growth of assets managed by traditional hedge funds.

    Following the rising demand for crypto-currencies, enigmabelieves an interesting opportunity arises: algorithmic trading on crypto-assets. Many exchanges already offer the ability to place orders through RESTful APIs, permitting users to run their trading algorithms locally.

    FinTech Can Help Increase Financial Literacy (Huffington Post), Rated: A

    From mobile payments, app based investing platforms, to online banking solutions, financial technology (FinTech) has revolutionized not only how consumers receive financial services but also how they expect to receive such services.

    recent studyshowed that 59 percent of senior financial services executives believe that we will see an increase in the use of digital solutions to improve operations, with 56 percent of executives citing technological disruption as a component of their business strategy. From an operational perspective, findings have shown that core financial institution activities including Deposits and Lending and Investment Management are expected to be radically reconfigured as a result of technological innovation. Consumers have also begun to shift their preferences towards FinTech, with statistics indicating that in 2016 a third of consumers reported regular use of financial technology services, with such use doubling from two years prior. Furthermore, more than 52 percent of consumers are expected to use FinTech services in “the near future.”

    A recent study found that two-thirds of Americans cannot pass a basic financial literacy test, with the number of those who can pass such a test decreasing annually. Globally, the figures reflect similar trends; in 2015, only 35 percent of men and 30 percent of women were classified as financially literate.

    Greenlight’s flagship product is a debit card for children that utilizes mobile app technology to provide parents with a customizable and monitorable solution to facilitate purchases.

    TS: Greenlight is free for 30 days and then just $4.99/mo. for the whole family to use (all parents and up to 5 kids). Each child receives their own Greenlight Card with their name on it and a unique PIN. Parents use our app on either their iOS or Android smartphone, and can easily manage all of their kids’ cards from one place.

    Parents can load and transfer money onto their kids cards instantly from anywhere with no additional fees. That money can be limited to specific stores or websites, or be spent anywhere depending on what parents decide. Greenlight provides real-time mobile alerts to tell parents where and when their kids are making a purchase and can even automate allowances.

    Kids can also use the Greenlight app on their smartphone. They can visually see their balances, request money, and communicate what they’re purchasing with their parents. When a parent receives a funding request from one of their children, they can easily approve or decline the request in the app.

    Bitcoin Exchange Sees Complaints Soar (Bloomberg), Rated: A

    The U.S. Consumer Financial Protection Bureau has received at least 293 complaints about Coinbase Inc., according to data reviewed by Bloomberg.

    More than a third of the grievances came from individuals who said they were unable to access their money when promised. Many people also complained about other transaction or service problems. Accusations of fraud represented less than 15 percent of the complaints.

    LendingCalc Appoints Former Chief of Risk at Dianrong, Terry Tse as Adviser (Newson6.com), Rated: B

    LendingCalc, Inc., a direct investment platform providing global access to digital specialty finance for institutional investors, announced the appointment of Terry Tse, the former Chief Risk Officer of the leading Chinese P2P platform, Dianrong, as strategic adviser for the firm. In his role, Terry will help build LendingCalc’s global investment gateway and platform due diligence framework.

    United Kingdom

    Marketplace lending platform Funding Circle cuts off smaller brokers (AltFi), Rated: AAA

    Funding Circle will be refocusing its energies on its most highly engaged business finance brokers.

    More changes in the ever-changing marketplace lending sector. A few weeks on from announcing sweeping changes to its investment process, leading business-focused platform Funding Circle is changing its approach to working with corporate finance brokers.

    One such broker, who wished to remain anonymous, told AltFi that Funding Circle is cutting off 300 brokers. The platform works with approximately 1,000 active brokers at present.

    P2P lender LendingCrowd extends cashback offering (AltFi), Rated: AAA

    The Edinburgh-based platform is extending its cashback offering, giving clients £150 for investing £2,500 or more on the platform by 30 September.

    REDWOOD BANK LAUNCHES FOUR MONTHS AFTER SECURING ITS INITIAL BANKING LICENCE (Global Banking and Finance), Rated: A

    Redwood Bank, Britain’s newest business bank for SMEs (small and medium sized enterprises), has announced that just over four months after securing its initial banking licence, it has completed its “Mobilisation” phase and has now opened for business, offering secured SME mortgages for business owners, as well as for experienced commercial and residential property investors. It has also launched a competitive business deposit account.

    Its speed to market is the result of a combination of factors, including having a very experienced and proven management team, and the fact that it’s the first business bank with 100% cloud- based infrastructure, which improves efficiency as well as security.

    Trends among investment advisors mirror developments in P2P lending (AltFi), Rated: A

    New research from Equifax Touchstone, an intermediary database provider, illustrates an enhanced focus among investment advisors on delivering consistent investment outcomes to customers.

    Of 141 surveyed investment advisors, 82 per cent were found to have a centralised investment process, meaning that a consistent approach to allocation and monitoring exists for all clients.

    However, 76 per cent use model portfolios, which are bespoke to a customer’s risk-reward preferences, and which are automatically rebalanced regularly to bring returns in line with expectation – even if the broader approach to investment management is the same for all clients. These model portfolios are comprised of a diversified pool of mutual funds that invest in a variety of assets, ranging from large and small stocks to REITs.

    But in its shift to passive strategies, P2P is perhaps less closely aligned with investment advisors. Equifax Touchstone’s survey shows that advisors still very much value active investment vehicles. While passive investing plays a part for 82 per cent of advisors, the majority invest 25 per cent or less in passives, with11 per cent of advisors investing more than 50 per cent in them.

    Crowdfunding your start-up: Learn the basics from Crowdcube (Startups.co.uk), Rated: A

    If you’re looking to raise finance for your business, there are a few options you can explore including secured or unsecured debt, private equity, venture capital investment, peer-to-peer (P2P) lending and crowdfunding.

    Some of the more popular crowdfunding models include reward-based, donation-based, micro-lending, P2P, peer-to-business and equity.

    Equity crowdfunding as an industry, over its six-year lifetime, has raised about £600m in the UK, with close to half of that having been raised by Crowdcube. Equity crowdfunding facilitates investment into start-ups, early stage businesses and growth companies in return for a pro-rata equity stake in the business.

    Investments can be made from as little as £10 with no maximum in place, which typically culminates in pro-rata ownership of the company via ordinary or B investment shares.

    You may have also seen the likes of BrewDog, River Cottage and Grind raise money through bonds on Crowdcube. This is where a company launches a funding round starting from at least £250,000.

    BrewDog raised £10m through a bond in December 2016, offering 8% interest to the investors. Over 2,700 people backed BrewDog in three weeks and should see interest payments for the next four years; the length of the bond term.

    “Property Crowd Funding” – The Magic of Modern Day Investing (Huffington Post), Rated: A

    Real estate has been booming around the world, particularly in the UK, with new housing, apartment and condo complexes being built at a phenomenal pace.

    Abdullah Iqbal, Co-Founder of the Knightsbridge based start-up PropTech Crowd.

    While there existed property crowdfunding companies already, Abdullah and his dad saw an obvious vacuum in the market. “None of the property crowdfunding platforms were Shariah compliant at the time, due to them being involved with interest. Our motivation was to take the banks out of the equation, enabling investors to have shares and democratising the property market for everyone, while conforming to the Islamic prohibition of interest”, emphasises Abdullah.

    The company’s core mission is to revolutionise property investment through innovative crowdfunding technology, allowing everyday investors to access high-ROI opportunities that they may have been priced out of in the past.

    I learned that Mufti Abdul Kader, a renowned Islamic scholar and expert in Islamic finance, is a Shariah Compliance Advisor at PropTech Crowd. His duties entail making sure that all elements of the business are Shariah compliant, visibly and consistently.

    Giving developers direction on safety (Bridging and Commercial), Rated: A

    At LendInvest we have been clear that the housing market will look a lot healthier when there is less emphasis on the major developers, when we instead have a market which encourages small- and medium-sized (SME) developers to build homes too. Our studies have found that SME developers are excluded from much of the government support that exists for SMEs from other industries, something which has to change.

    Bumpy Brexit risk does not justify record low rates (Reuters), Rated: A

    The Bank of England should not keep interest rates at their record low as an insurance policy against the risk of a “bumpy Brexit” and it needs to start raising borrowing costs now, BoE policymaker Michael Saunders said.

    But at the same time the Brexit hit to sterling has pushed up inflation above the BoE’s 2 percent target, leading to the split among the central bank’s rate-setters.

    Earlier this month, they voted 6-2 to keep rates at 0.25 percent and the BoE warned that Brexit was weighing on the economy.

    China

    What are the Implications of the Rapid Growth of Fintech in China? (Brink), Rated: A

    We see five major key success factors for the future China fintech market:

    1. Data abundance and application – Business models in financial services will be increasingly data-driven, and data will be at the core of the value chain.
    2. Large customer base
    3. Availability of proprietary and comprehensive products
    4. Strong knowledge of financial services and risk management – A strong combined core of financial services expertise and risk management capabilities remains a prerequisite for success, allowing for more efficient identification of useful data and building of effective risk models.
    5. “Fin plus tech” organization and culture

    Niche Fintech Players should expand and perhaps transform their business models. The first and most intuitive way is to grow organically beyond a niche. Qudian, for example, has expanded beyond its legacy focus on university borrowers to develop an e-commerce ecosystem driven by a consumer finance model.

    European Union

    SeedInvest to Host Live Crowdfunding at LendIt Europe in London (Crowdfund Insider), Rated: AAA

    SeedInvest and LendIt, the roving Fintech conference, have partnered on live crowdfunding for the upcoming LendIt Europe event scheduled for this coming October. The live event is being billed as a European first. LendIt Europe participants will be able to invest directly in companies participating in the PitchIt portion of the event taking place in London.

    SeedInvest previously powered several live investment crowdfunding events in Europe with noted success. SeedInvest’s partnership with Jason Calacanis, and his LAUNCH Festival, reportedly raised $7.5 million from 3900 individual investors. This will be the platform’s first foray beyond the US borders though and may be a sign of a strategic push for the company.

    France and Sweden are scooping up a bigger share of Europe’s fintech deals since Brexit (Quartz), Rated: AAA

    France and Sweden’s share of financial technology deals in Europe has grown since Britons voted to leave the EU in June last year, according to research firm CB Insights.

    France’s share of venture capital transactions has increased by five percentage points since 2014, to 11% so far this year. Sweden’s take has risen three percentage points over that time, to 12%.

    Download the CB Insights report on European fintech trends here.

    LendIt Europe Announces Upgrade Co-founder and CEO Renaud Laplanche as Keynote Speaker (Fintech Finance), Rated: AAA

    LendIt announced that Renaud Laplanche, the CEO of Upgrade and former CEO of Lending Club, will join the keynote speaker roster for LendIt Europe 2017.

    He will be giving the opening keynote speech on the second day of LendIt Europe where he will be giving an update on Online Lending 2.0 and discussing the US fintech market, where the online lending industry is today and how it fits into the broader fintech sector trends going forward.

    Peter Thiel is backing Berlin ‘InsurTech’ startup Coya in a million round (Business Insider), Rated: A

    Silicon Valley investor Peter Thiel has led a $10 million seed funding round into Berlin-based “InsurTech” startup Coya.

    Thiel’s fund Valar Ventures led the round, which also included funding from e.ventures, and La Famiglia, a European venture capital fund backed by entrepreneurs.

    The investment is one of the biggest “seed funding” rounds in Germany.

    International

    Banking landscape shifts as Chinese groups globalise (Financial Times), Rated: AAA

    Global cross-border capital flows have declined 65 per cent since 2007, and half of that is explained by a drop in cross-border lending flows. The largest global European banks, and some US ones too, are in retreat from foreign markets. But financial globalisation is far from finished — rather it is broadening and becoming more inclusive as developing economies, most notably China, step into the breach.

    The eurozone has been at the forefront of the retreat from foreign markets among banks in advanced economies. The foreign claims of eurozone banks have fallen by $7.2tn, or 45 per cent, since 2007, and nearly half of that has been claims on other borrowers in the eurozone — particularly other banks, new MGI research finds. UK and Swiss banks have sharply reduced foreign assets since the crisis as well. US banks, which have always been less global than their European counterparts, have re-focused on growth at home.

    In contrast, China’s four largest commercial banks have seen their foreign assets grow 12-fold since 2007 to more than $1tn. And that’s still only 9 per cent of their total assets. Foreign assets make up 20 per cent or more of the total assets in the largest banks in all advanced economies; if China’s largest banks follow that path, they could see tremendous growth in foreign lending ahead.

    How Banks And Fintech Startups Redefine Finance (CoinTelegraph), Rated: A

    But as financial technologies continue to expand, legacy players have come to accept the disruptive role of fintech startups and the need to work together. In recent years, the relation between banks and fintech startups has evolved from marginal investments to closely knit collaboration and integration.

    Banks are now getting involved at different levels to help fintech companies get off the ground. This includes an increasing number of buyouts, mergers and partnerships.

    An example is Goldman Sachs, a banking firm that has invested more than $570 mln in fintech companies since 2012. Last year, the banking giant acquired Honest Dollar, a digital retirement savings platform, in order to expand the startup’s brilliant solution to millions of its customers. Along with Standard Charter, Goldman also helped Momo, a Vietnam-based mobile wallet and payment app, raise $34 mln in two rounds of funding. Goldman also launched its own online lending service Marcus last year, a move that is inspired by the fintech culture. The service has so far doled out more than $1 bln in loans and expects to cross $2 bln by the end of this year.

    On the other end, fintech startups are helping banks adopt new technology. Ezbob, for example, is a UK-based startup that provided online lending services to SMEs before white-labeling its technology and changing its business model to a Lending as a Service (LaaS) platform. The Royal Bank of Scotland has leveraged Ezbob’s technology to launch Esme, its automated lending platform which allows small and medium-sized businesses to obtain loans quickly, even outside working hours.

    The future of robo-advice is human (Robo Advice News), Rated: A

    When Betterment decided to offer its clients access to a human financial advisor, it marked a growing trend of robo-advice platforms adding a human touch element.

    Automated wealth platforms or robo-advice is not likely to find its success by just digitalising its services, says Thomas Davenport, a professor of information technology and management at Babson College. The future lies in a hybrid model that uses the efficiency of big data with the softness of personalised human advice.

    Around 60 per cent of consumers would rather have a live person in charge of their finances instead of relying on automated technology, according to a survey from Legg Mason Asset Management.

    Reducing Investment Funds to SMEs from Financial Institutions to Drive Global Market for Peer-to-peer Lending (OpenPR), Rated: B

    A recent report added to the portfolio of MarketResearchReports.biz presents a detailed analytical account of the global market for peer to peer lending. The report, titled “Global Peer-to-peer Lending Market Size, Status and Forecast 2022,” states that the market will exhibit growth at an exponential pace over the period between 2017 and 2022.

    This report presents detailed insights into the market and its expansion across the globe from 2017 to 2022.

    Get Sample Copy Of This Report @
    www.marketresearchreports.biz/sample/sample/970169

    Australia

    Fintech’s feeding frenzy: why it’s time to stop, collaborate and listen (Finfeed), Rated: AAA

    In 2016, KPMG suggested US$24.7 billion was invested in fintech companies globally. Data accumulated by Financial Technology Partners, an investment bank focused on fintech, cites $36 billion across over 1500 funding deals from over 1700 unique investors (not taking into account M&A deals) as a more accurate figure.

    As it has done throughout history, the banking and lending industry is dominating the fintech landscape, with payments and e-commerce a formidable rival.

    The financial services and technology sectors are set for changes as the budget proposed a series of measures to encourage innovation in the fintech industry. This includes new legislation which, if implemented, is likely to allow crowd-sourced equity funding, tax concessions for start-ups and angel investors and fewer barriers to licensing of finance firms. The traditional banking sector could see more digital disruption arising from these changes which could subsequently create demand for top finance and technology talent.

    Credit insurance provider Atradius recently launched its new digital platform ‘Atrium’, which provides customers and distribution partners with real-time data to better understand buyers, credit limits and risk. The platform is designed to drastically improve the user experience, including time efficiency – operations that used to take 15 minutes now only take three.

    Then there is Lenddo, an Asia-based fintech platform that uses non-traditional data to provide credit scoring and verification to economically empower the emerging middle class around the world.

    Secure payments data platform, EFTsure, recently announced a new collaboration agreement with PricewaterhouseCoopers Australia. Under the agreement, PwC can advise certain clients of EFTsure’s innovative real-time payment verification technology and best practice payee management solution to help those clients to mitigate the risk of fraudulent or erroneous electronic business payments.

    Other companies making inroads include UBank, one of Australia’s leading digital-only banks, which recently unveiled RoboChat, Australia’s first virtual assistant to help potential home buyers and refinancers complete their online home loan applications.

    Source: Finfeed
    India

    Fintech Startups And Why They Need To Get An NBFC License (TechStory), Rated: A

    FinTech, the abbreviated form of financial technology, is that segment of the start-up culture that deals with good old finance and banking business but through the more novel methods of crowdfunding, peer-to-peer models, mobile payments, loans and even asset management. They squarely fall under the definition of Non-Banking Financial Companies (NBFCs), and considered against the Indian banking scenario they do not meet the legal definition of a bank as is outlined in the Companies Act 2013 or even the Companies Act, 1956.

    If a recent Accenture report is anything to go by, fintech that was in a near-nascent state back in 2008 globally shot up in value from $930 million to about $12 billion by the start of 2015.

    The other advantages are:

    • Cheaper business setup and expansion costs;
    • Quick rolling of funding rather than the drawn out method of first talking to investors;
    • Cheaper cross-border transfer of money (a fine example is that of UK-based TransferWise);
    • Simple registration process backed by minimal documentation, sometimes not requiring any Net Worth or collateral information (as is the case with LendingKart);
    • Make alternative credit scoring possible for ineligible borrowers for various types of loans; and
    • Even foster efficient fraud and anti-money laundering management in real time across products, channels and customers (as IndusInd has been successfully pioneering since quite some time now).

    Why FinTechs need NBFC licenses to operate?

    Since NBFCs are principally in the business of providing loans and advances, insurance, acquisition of shares, debentures and stocks, leasing, hire-purchase and even receiving deposits under a set arrangement or scheme, they fulfil the popular 50-50 test and are required to obtain the ‘Commencement of Business’ certificate from RBI (as per section 45 l (a) of the RBI Act).

    The 50-50 test that is the basis of the principal business conducted by an NBFC finds application when a company’s financial assets constitute more than 50 percent of the total assets and income from financial assets constitute more than 50 percent of the gross income.

    Democratising real estate via blockchain (New Straits Times), Rated: A

    At the same time, our commitment to offer alternative investment channels was reinforced when we saw how the global flow of funds and individual investors continued to cause disruptions in house prices in many major cities.

    Crowdfunding and peer-to-peer lending have been touted as among potential alternative platforms that can give small developers access to funding. We saw a number of such platforms used in many countries and they helped solve some of the funding needs.

    On June 18 2015, we were deeply encouraged by news that Wanda Group (one of the largest commercial developers in China or the world by now) announced that it had raised five billion yuan (RM3.4 billion) from investors online in just three days to fund the construction of three malls. Investors were able to take part in the projects by investing as little as 1,000 yuan. This is truly opening up access to real estate.

    Firstly, digital tokens created on blockchains are technically very difficult to hack and all transactions and documents are transparent. Secondly, in transaction using digital tokens, especially those involving completed properties, a lot of middleman fees can be reduced. More importantly, such digital tokens can be traded much like shares are traded on stock exchanges. This makes real estate a liquid instrument.

    A Loan to Fund Every Need (Outlook India), Rated: B

    “Data analytics offer efficient ways of analysing credit history and behaviour of a prospective borrower to make lending fast and easy on the digital platform,” says Rishi Mehra, CEO, Wishfin.com. Smartphones have made digital transactions seamless and by including a lending option, the ‘right now’ generation has it going for them like never before.

    A P2P lending portal works in a way wherein lenders can make offers to fund borrower’s requirements which are accepted on first come, first served basis. Borrowers can seek to raise money from multiple lenders. A formal contract is signed by the lender and the borrower once they reach an agreement. The good news is that RBI has finalised P2P lending norms, which means there is nothing illegal or fishy about these loans. This format of lending is fast catching up, especially among the youth because many of them don’t have a credit score that will make them eligible for borrowing as soon as they start earning.

    Asia

    Financial authority to regulate peer-to-peer lending (The Jakarta Post), Rated: AAA

    The Financial Service Authority (OJK) will soon regulate peer-to-peer (P2P) lending to minimize the risk of bad debt in the virtual financing business.

    “The procedures for borrowing will be regulated in detail, such as how contract agreements anticipate the risk of bad debt,” Hendrikus said as reported by kompas.com on Wednesday.

    He said his institution would also regulate the mechanism of “know your costumer” (KYC) through the existing technology.

    Geisha loan application: Accepted (Nikkei Asian Review), Rated: A

    Some new loan-makers are dabbling in tech to help them gauge a potential borrower’s creditworthiness.

    For potential borrowers it finds here, the lender will set artificial intelligence loose on the trove of data that the booking website serves up, like how busy the applicants’ inns are.

    Japan Net Bank, an online lender, also uses technology to sift through big data when screening potential borrowers. Partnering with freee, a Tokyo-based online accounting software provider, the bank recently began using AI to quickly pick up and analyze data concerning potential borrowers’ financial situations as well as how well their businesses are doing.

    Middle East

    Bahrain: The latest nation to lay claim to “fintech hub” status (AltFi), Rated: A

    Where isn’t a global fintech hub these days? Count Bahrain among the multitude of claimants. The Central Bank of Bahrain (CBB) has announced the first members of its new regulatory sandbox: NOW Money and Tramonex.

    Dubai-based NOW Money claims to be the first company in the Gulf region to offer a mobile banking solution to users, including accounts and a range of low-cost global money transfer options for low-income workers.

    Tramonex is a business-facing solution, helping companies to process and transfer funds online. Its focus is on facilitating conversion and settlement services to automate cross-border transactions.

    Micropayments FinTech Innovation in Dubai (Simmons&Simmons), Rated: B

    International law firm Simmons & Simmons continues to advise on cutting edge payment platform projects and the emerging regulation of payments. The Middle East TMT team, led by partner Raza Rizvi and senior associate Neil Westwood, advised Mercury Payments Services LLC (Mercury) on the phased roll out of an innovative payment service through cards issued by the Roads and Transport Authority of Dubai (RTA).

    Africa

    SA fintech adoption beats global average, expected to surge (Moneyweb), Rated: AAA

    South Africa ranks among the highest in fintech users globally and reports one of the highest incidences of intended use, a new study finds.

    At 35%, fintech adoption in South Africa beats the global average of 33% and is mostly in line with its emerging market peers, who boast large tech savvy but financially underserved populations. Domestically, 6% of fintech users use five or more services and are classified as super users.

    At 41%, adoption among consumers aged 25 to 34 is highest, closely followed by those aged 35 to 44 at 40%. The largely digital native 18 to 24 year-old category lags behind at 36%, mostly due to them having less sophisticated financial needs. Adoption gradually declines from age 45 upwards.

    EY found that fintech adoption is highest among South Africans who earn $50 000 to $80 000 per annum at 51%, with usage at 50% among those who earn more than $150 000 annually. Adoption of all five services – money transfer and payments, financial planning, savings and investments, borrowing and insurance – is highest among the former income bracket. Surprisingly, those that earn more than $150 000 are the highest users of borrowing services, possibly due to their ability to leverage off their earnings.

    Source: Moneyweb
    South America

    Brazil proposes new rules for fintechs, peer-to-peer lending (NASDAQ), Rated: A

    Brazil’s central bank has proposed allowing financial technology companies to lend money, without taking deposits as commercial banks do, as part of new rules for the fast-growing fintech industry in Latin America’s largest economy.

    The rules,which will be assessed in public hearings over the next 2-1/2 months, should not require congressional approval, central bank director Otávio Damaso said on Wednesday. Commercial banks will be allowed to create their own fintechs once the rules are in place, he said.

    CARICOM

    Global Domination Capital (Newsday), Rated: A

    Global Domination Capital is set to be the region’s first fintech startup company, offering equity crowdfunding and peer-to-peer lending solutions to the OECS countries and the CARICOM member states.

    This includes Barbados, Jamaica, The Bahamas, Trinidad and Tobago and The Turks and Caicos Islands.

    Authors:

    George Popescu
    Allen Taylor

    Will Every Originator Launch a Fund?

    loan originator fund

    One of the more interesting panels of the day at LendIt USA 2017 was the panel titled “Every Originator Will Launch a Fund.” It’s an interesting title because it could very well have been styled as a question since most of the panel discussion centered on the thought process an origination platform should go through […]

    loan originator fund

    One of the more interesting panels of the day at LendIt USA 2017 was the panel titled “Every Originator Will Launch a Fund.” It’s an interesting title because it could very well have been styled as a question since most of the panel discussion centered on the thought process an origination platform should go through when considering whether to launch its own fund. Panelists included Dan Vetter, CEO of Money360; Geoffrey Kott, Senior Finance Executive at Cross River Bank (CRB); Glenn Goldman, CEO of Credibly; Jay Bernstein, partner at Clifford Chance; and Joe Toms, president of Freedom Financial Asset Management.

    Not all of the businesses represented on the panel have launched a fund, but they have all had to think it through, so their expertise and the lessons learned can benefit other originators considering a fund.

    The first question asked was “Where does the fund structure fit into the business strategy?”

    Vetter said, “There are two types of customers,  borrowers and investors. So we’re sellers of money and sellers of risk. We view money as a commodity.”

    Kott took a more rhetorical approach to the question. He said, “We ask, ‘what’s the right financial strategy’? We start with risk and diversification. You should have as many different ways of financing a business that you can.”

    “We’re a bank,” Kott said. “We want to finance loans that are on our balance sheet. But we’re prepared to put skin in the game. As we continue to execute on our strategy, we’ll become more reliant on the fund. And we can diversify the fund. While we feel we have the expertise to manage fund, that’s not the approach we want to take.”

    Instead, CRB wants to work with a third-party fund manager.

    “Our view is this,” Kott said. “we have an inherent strength to run a bank. We don’t want to confuse ourselves with the added label of fund manager.”

    So right away, originators interested in launching a fund must ask themselves if they want to become a fund manager or focus on their core business. It’s an important question and one that can determine a lot of other things down the road.

    The mod asked another question, “When you view other funds out there, how do you view a fund in comparison to other capital forces?”

    Bernstein was first to answer. “People don’t think of the cost of not having diversity in place. When times are great, you don’t need it. Not everybody should have a fund, but when there is liquidity in the back end of the market, that’s when you need it.”

    That was a nice segue into the kinds of liquidity investors have.

    “We launched a fund management company two years ago,” Vetter said. “We took in new capital for about a year and learned some lessons.” That fund didn’t do so well, so Money360 launched another one. “The loans we’re investing in are short term commercial real estate loans. The minimum investment is $50,000. Funds generate a lot of liquidity.”

    Freedom Financial Management launched their fund in June 2016. They started with $30 million of their own capital and then raised additional money with insurance companies.

    “We have $170 million total assets today,” Toms said.

    Kott said Cross River Bank is asking whether they should set up a fund or pursue securitization, so they don’t have one now.

    One of the advantages to an online lender having a fund, according to Vetter, is proprietary deal flow to invest in.

    If loan originators do set up a fund, one of the questions they’ll have to ask is, What is the right structure?

    “At the end of the day,” Bernstein said, “you have to look forward and ask yourself how big you want to scale. There are a number of different scales of gray.”

    Goldman said there is a timing element involved, as well.

    “How does the originator want to view themselves?” he asked. “You want the loan to come off the platform in a real-time basis. You want it capital light.” Originators have to decide if they want to be balance sheet-light or balance sheet-intensive.

    Toms compared the alpha approach to the index approach and noted that alpha is more risky.

    “You have to understand the different risks,” he said.

    Goldman added that knowing the right allocation is important while Kott pointed out that each finance source has its own idiosyncrasies. Therefore, diversification is important.

    “What it all comes down to,” he said, “is it’s an optimization game. You have to make sure you have the financing that allows you to originate all the loans that borrowers want. You have to be flexible and diversified in how you price assets.”

    Toms noted the risk to investors.

    “You now have a different risk,” he said. “How is the originator allocating assets, and are they doing it in such a way to alleviate risk?” He said Freedom Financial Management doesn’t let people pick products off the shelf. “We buy our own cooking. What we offer is what you get.” Off-the-shelf assets involve more risk and more problems, he said.

    Authors:

    Allen Taylor

    July 27th 2016, Daily News Digest

    July 27th 2016, Daily News Digest

    News Comments Today we have a very long US section, I guess we are compensating for yesterday. Quite a few very interesting pieces of info. And a fun Chinese section as well. Do note the fund raises in P2p in China despite the overall doom and gloom feeling. Reminder 1 USD  = 6.67 RMB United […]

    July 27th 2016, Daily News Digest

    News Comments

    • Today we have a very long US section, I guess we are compensating for yesterday. Quite a few very interesting pieces of info.
    • And a fun Chinese section as well. Do note the fund raises in P2p in China despite the overall doom and gloom feeling. Reminder 1 USD  = 6.67 RMB

    United States

    United Kingdom

    European Union

    China

    News Summary

    United States

    Elevate Announces 5 Million Expanded Credit Facility from Victory Park Capital, (Business Wire), Rated: AAA

    Comment:  Elevate was planning an IPO early 2016. See below.

    Elevate, a provider of innovative online credit solutions for non-prime consumers, today announced it has increased its credit facility with Victory Park Capital (VPC), a privately held registered investment advisor dedicated to alternative investing, by an additional $100 million to a total of $545 million. The company will use the additional capital to support the rapid growth of its credit products in the U.S. and U.K. and for further investment in its suite of online credit solutions.

    Despite market turmoil in the online lending space over the past few months, Elevate has continued to benefit from high consumer demand for its products and has experienced year-over-year loan portfolio growth of more than 80% since Q1 2015,” said Ken Rees, CEO of Elevate. “We believe that more responsible non-prime credit products like RISE, Elastic and Sunny are making a positive difference in the lives of our customers who often struggle with limited financial options. This expanded credit facility with Victory Park Capital will help us continue to serve this growing consumer need.”

    Old article, context relevant: This Should Be The First Tech IPO of 2016, (Fortune), Rated: AAA

    Comment: article published January 11 2016.

    Elevate Credit has improving financials, but regulatory risks.
    Elevate Credit, a Texas-based provider of online credit solutions to non-prime consumers, on Monday said that it plans to offer 3.6 million shares at between $20 and $22 per share. It’s the first company to set an IPO range so far this year, and likely will attempt to price before the end of January.

    Elevate was formed in 2014 as a spin-out from Think Finance, which had been founded in 2001 to provide analytics and tech services to “lenders looking to meet the needs of Americans underserved by today’s traditional banking system.” Elevate represented Think’s branded consumer lending products group, including Rise(installment loans in the U.S.), Elastic (open-end lines of credit in the U.S.) and Sunny (installment loans in the UK). It is led by former Think Finance CEO Ken Rees, who previously founded CashWorks, which was bought by GE Money Services in 2004.

    The company reports a $20 million net loss on $300 million in revenue for the first nine months of 2015, compared to a $44 million net loss on $180 million in revenue for the year-earlier period. Elevate also today disclosed preliminary fourth quarter data, showing that it broke even on around $134 million in revenue. This compares to an $11 million net loss on $94 million in revenue for the fourth quarter of 2014.

    The numbers are promising, but Elevate will have to answer two major questions before its IPO.

    The first revolves around Victory Park Management, a private equity affiliate that is the sole source of debt financing for all Rise and Sunny loans. There is no indication that VPM is in any sort of trouble―and it recently amended its credit facility with Elevate in order to accommodate increased loan volume—but investors may balk at backing a financial services business that relies so heavily on a single debt provider.

    Second, Elevate may need to get some investors comfortable with a tech-enabled business model that shares certain elements of brick-and-mortar payday lending. In particular, Elevate charges very high interest rates in certain markets. For example, the APR on a Riseloan in Idaho can total 365%. Same for a Rise loan in Elevate’s home state of Texas. The company says it is different from payday lenders in that its loans don’t contain balloon payments and that repayment can help borrowers improve their credit scores. At the same time, however, its listed IPO risk factors includes promised new rules on payday lending from the Consumer Financial Protection Bureau. The company also says that the introduction of new rate caps by state legislatures could “make it difficult or impossible to offer [Rise] at acceptable margins.”

    IPO on horizon, subprime lending startup Elevate adds 5M in credit from Victory Park Capital, (Tech Crunch), Rated: AAA

    Elevate’s niche right now is providing loans to borrowers with creditscores between 575 and 625. As the company expands, it wants to provide loans to customers with even lower credit-scores.

    Ken Rees, CEO of Elevate, is quick to note that 65 percent of Americans are underserved as a result of their low credit-scores. With additional lending data, it might just be possible to underwrite loans with confidence for these underserved customers. Previously, customers of Elevate would have been forced to take title or payday loans.

    “20 percent of all title loans result in the customer losing their car,” noted Rees.

    Elevate’s revenue run rate is hovering around $500 million even while average customer APR has been falling. The company has seen an 80 percent growth in loans outstanding over the last year, while charge-off rates have decreased from 17-20 percent in early 2014 to 10-15 percent today. Charge-off rates monitor loans that a company feels it can’t collect.

    Rees’ previous company, Think Finance, backed by Sequoia and TCV, got itself into legal troubles last year and was accused of racketeering and the collection of unlawful debt.

    Elevate rewards borrowers for watching financial literacy videos with better interest rates on products like RISE that are targeted at financial progression. The company also offers free credit monitoring. The average weighted APR for RISE is a hefty 160 percent, but it’s relatively tame next to a traditional 500 percent APR payday loan. RISE loans drop by 50 percent APR after 24 months, and fall to a fixed 36 percent APR by 36 months.

    Over 65 percent of Elevate borrowers have experienced a rate reduction. All of these lending practices have improved customer retention for the company, 60 percent of Elevate borrowers who payoff their loan will get another. Typically these new loans will be granted at even lower interest rates.

    Prosper Said to Pitch Fund That Would Buy Its Online Loans, (Bloomberg), Rated: AAA

    Prosper Marketplace Inc. is setting up a private fund that will purchase consumer loans arranged through its online platform, providing another source of capital to fuel growth after other investors pulled back.

    Executives at the closely held company are meeting with potential clients this week to pitch the Prosper Capital Consumer Credit Fund, according to a person familiar with the matter who asked not to be identified discussing confidential talks. The fund’s managers are targeting returns of 6 percent to 8 percent.

    The goal is “sustainable and attractive risk-adjusted returns,” according to a presentation obtained by Bloomberg. The fund will buy a cross-section of “unsecured consumer loans originated through the Prosper marketplace on a passive basis.”

    LendingClub, for instance, has run investment vehicles for several years similar to the one being started by Prosper. And Social Finance Inc., an online lender that gained popularity by refinancing student debt, started a hedge fund this year to buy its loans and potentially those of competitors.

    The Prosper fund plans to start buying loans for clients as soon as September and could manage as much as $1 billion over time, according to the person. The fund won’t use leverage or charge investors performance or management fees, though loans in the portfolio will still be subject to Prosper’s standard servicing fees of 1 percent. The minimum investment is $250,000 and Prosper expects it to be attractive to family offices, high-net-worth individuals and foundations, the person said.

    A similar fund managed by a LendingClub unit has had a rough ride this year. Returns slumped. The company disclosed that it had improperly allocated some loans to the portfolio. And by mid-June, clients had asked to pull out $442 million — or 58 percent — of the fund’s assets, forcing managers to limit withdrawals, according to a letter sent to investors. In response, LendingClub has said it overhauled the fund’s governance.

    The new Prosper fund will allow quarterly resumptions of up to 5 percent of net asset value, according to the presentation.

    Goldman Sachs: The Newest Online Lender, (Seeking Alpha), Rated: AAA

    The emphasis it has placed on this initiative, and the speed with which it has been accomplished, demonstrate that it is a priority for Goldman Sachs.

     

    (Source: GS report)

    Harit Talwar would head up the project. His last position was at Discover , where he ran the U.S. cards division. Unusually, Talwar was hired as a full partner, giving some idea of how seriously Goldman took the Mosaic initiative. Abhinav Anand, head of Analytics, also came from Discover, where he was in charge of the risk division.

    Boe Hartman, formerly of Barclay’s credit card division, was Chief Technology Officer. David Stark, formerly of Citigroup’s credit card division, was Chief Risk Officer, in charge of the underwriting. These men worked for traditional banks.

    However, Darin Cline, head of operations, was formerly head of operations at Lending Club. And Greg Berry, Chief Architect, used to work for OnDeck. These officers had experience with the new online lenders. Goldman wanted the best of both breeds as it put its own product together.

    The benefits of sticky capital: steady growth

    When you are a lender, you need funds to lend, and when you want to grow as an online lender, you need a source of funds that won’t dry up when the credit market contracts a few points. This is one of the problems Lending Club has faced recently. Its originate-to-distribute model, plus its meteoric growth (until recently), meant that it was heavily dependent on institutional funding. But it turns out that institutional funding flees quickly when credit markets turn slightly less rosy. The impacts of a recent, fairly small, capital drought have ramified into internal mismanagement, crippled growth, and a share price collapse for Lending Club.

    The benefits of cheap capital: profit (with a regulatory wrinkle)

    Those same depositors also provide just about the cheapest capital there is. The average interest rate on a Lending Club loan is 12.8% and 14.6% at Prosper. With a cost of capital at 1.05%, comparable rates would give GS Bank a fat interest margin of 11.75-13.55% (not counting allowances for losses).

    In its “New Shadow Banking” report, Goldman’s researchers estimated a TAM for the consumer loans business at $258B, with an average ROA of 2.2%. That is $5.67B of profits up for grabs, and you can bet that Goldman intends to own a big piece of it. Every percentage point of that amount would add about one additional percentage point to the bank’s 2015 net income.

    How to build your own bank, (Tradestreaming), Rated: AAA

    Large financial institutions are opening up their APIs.
    Exposing the tech underbelly of the finance industry is leading to an increasingly collaborative partnership environment.

    BBVA offers an API marketplace for its European and US business units. In the US, the bank’s Compass unity provides connectivity for pre-authorized users to access key account data. It also offers an open security hookup that application developers can integrate to have BBVA clients authorize access to BBVA account information in their name. In Europe, the APIs go further, providing data on card purchases, identify verification, and money transfers.

    In August 2015, technology industry bank SVB acquired a fintech startup, Standard Treasury. The startup had raised a couple of million dollars and was working on developing APIs for banking and that activity, the technology, and the team that developed it, was brought in-house at SVB.

    Some banks have created APIs for just a select group of partners. They’re not necessarily interested in opening them widely for general use. Instead, they’re a quick and easy way to get vetted entities on their platforms. Barclays’ Developer Network (BDN) is the UK bank’s offering for approved firms to build applications using bank data and infrastructure. Barclays uses BDN in conjunction with the 13-week accelerator it runs together with Techstars. Participating startups in 4 locations (London, New York, Cape Town and Tel Aviv) get access to BDN in addition to working with decision makers at the bank and a group of mentors.

    RBS has taken a similar approach to Barclays. The RBS API was made available as part of the Open Bank Project, an open source API and app store for banks. RBS uses its API as part of hackathons the bank sponsors.

    Fidelity officially launches retail robo-adviser, (Investment News), Rated: A

    Comment: What is happening in the robo-advisor space is very relevant to the p2p lending space.

    Boston-based fund company Fidelity Investments on Wednesday officially launched its retail robo-adviser, Fidelity Go, after months of testing it out with about 1,000 users. Geode Capital Management, a Boston-based investment firm that has acted as a sub-adviser for Fidelity products for 13 years, will invest, monitor and manage Fidelity Go portfolios. The account minimum is $5,000, and clients are charged 35 to 40 basis points.

    The company is focusing on younger, emerging and digitally-savvy investors with the platform, and has worked with this target audience to develop the robo.

    Fidelity is also working on an institutional platform, which will be an integrated experience for investment advisers, bankers and broker-dealers, a spokesman said. More details will be available by the end of the year, he said.

    How One Community Bank Closed Its Branches And Went Fully Digital, (The Financial Brand), Rated: A

    A few years ago, Radius Bank had six branches. Today it has only one. How did they pull off this massive transition from brick-and-mortar to virtual?

    An Amalgamation of Partnerships Solves the Fintech/Product Puzzle.

    With traditional marketing media, it is difficult to accurately measure account acquisition, so the bank made the shift to go 100% digital in late 2014, bringing all consumer/retail marketing in-house. Now, instead of airing a commercial on television, Radius uses YouTube in conjunction with the Google Display Network. Billboards have been replaced with banner ads across the internet.

    The mortgage industry (finally) moves online, (Tradestreaming), Rated: AAA

    75 percent of home buyers would use online mortgages if they knew they could speak with someone when needed.
    “I was frustrated by how offline, opaque and inefficient the mortgage application experience was,” said Rajesh Bhat of Roostify.

    Roostify offers originators the technology to build a consumer-facing one-stop shop for the mortgage process with the ability to integrate additional products through an API.

    Some of the newer players, like LendingHome or LandBay, try to replace current originators. Both are peer-to-peer home lenders. Sindeo and Blend Labs help customers through their mortgage applications by providing information or streamlining data collection and processing. SoFi, known more as a student loan provider, is now also active in the mortgage market, offering online applications for mortgages.

    Quicken Loan’s Rocket Mortgage — which promised that home buyers could get approved for a mortgage in 8 minutes — was a big catalyst for that process.

    Crowdlending platform uses Bitcoin, (Springwise), Rated: A

    BTCJam is a lending platform that deals in Bitcoin to facilitate international P2P lending.

    Founded in 2012 with the aim of providing affordable credit, the system boasts 19,905 loans funded, USD 24 million borrowed in over 200 countries to date, with 24 loans currently fundraising.

    Although recent reports claim the business is withdrawing from trading in the US leaving uncertainty amongst many American users, BTCJam continues to service its customers worldwide.

    Another Bone of Contention Between Political Parties: Student Loan Debt, (Real Money), Rated: A

    In 2013, the amount of money student loan borrowers owed the federal government crossed the $1 trillion threshold for the first time, according to the Consumer Financial Protection Bureau. For the class of 2016, the average student graduated with $37,172 in loan debt.

    Five of the top lenders in this space include Sallie Mae (SLM) , Action Alerts PLUS holding Wells Fargo (WFC) , Discover (DFS) , Citizens Bank and SoFi — which acts as an online loan marketplace.

    “The federal government should not be in the business of originating student loans. In order to bring down college costs and give students access to a multitude of financing options, private-sector participation in student financing should be restored,” the party’s official platform stated.

    That stance is a repudiation of the 2010 federal legislation that scaled back the role of private lenders providing student loans. The banks now act as middlemen, collecting fees and keeping records while students go through federal channels to secure the loans.

    However, the federal government has also taken steps to provide relief for borrowers in recent years as the interest rate on federal loans for undergraduate students dropped to 3.76% in 2016 from 4.29% in 2015. The government also adjusted the maximum Pell grant amount for inflation to $5,815 from $5,775 last year. Pell grants are used by nearly 8 million lower-income students in the country.

    Democratic presidential candidate Hillary Clinton recently released her campaign’s college financing plan. The main tenets of her plan aim to allow students from families making up to $125,000 annually to go to school without having to incur any debt. Another tenet states that all community colleges will offer free tuition.

    Kabbage enlists Marketo for marketing, (Finextra), Rated: AAA

    Marketo, Inc. (NASDAQ: MKTO), the leading provider of engagement marketing software and solutions, today announced that Kabbage Inc., a disruptive financial technology platform that provides businesses with access to working capital, is leveraging the Marketo platform to improve email open rates and cut down on campaign production time.

    Up until October 2015, Kabbage, relied on a different marketing automation provider and a number of other tools to manually engineer communications with potential customers. As the company grew, the team needed to consolidate and integrate these tools with its existing CRM for better alignment between marketing and sales. In this way, the team hoped to strike the right cadence of communication with its customers, serving them with a premiere customer experience, at any time and from virtually any device.

    Kabbage chose Marketo for its ability to track the return-on-investment of email campaigns and also for its proven track record of security in highly regulated industries such as financial services and healthcare. Since implementing Marketo, Kabbage has seen email open rates and click-to-open rates jump more than 10 percent compared to campaigns deployed via the company’s previous marketing automation system. The marketing team attributes this success to the speed and ease-of-use of the Marketo platform, saving on average 2-3 hours in day-to-day production time.

    OnDeck Capital’s Hidden Margin Of Safety, (Seeking Alpha), Rated: A

    This article explores how GAAP accounting is obscuring the earnings power of ONDK.

    ONDK is optically profit-less, but has the potential to ramp up earnings substantially if it slows down its expansion.

    While this is not what the company will or should do, it’s a helpful illustration of another source of margin of safety in the stock.

    This is ignoring the substantial opportunity ahead of the company and the value creation over the longer-term.

    Credibly Interview: Innovative Online Lending Is Changing The Industry, (Nasdaq), Rated: A

    After the bust of the first Internet bubble, folks did not go back to using fax machines. The fact is, what the lending industry has done in terms of creating a far superior user experience — following on how gaming, social, travel, and virtually every other industry has moved online — has created an opportunity to get more capital to the folks who need it and lowering people’s cost of funds along the way.

    [Another myth I see] is the demise of innovative lending. But I just want to spend a second talking about what I mean by “innovative lending.” We as an industry have been challenged in coming up with what we should be calling ourselves. “Peer-to-peer,” in the early days, captured the essence of what the models were about in many ways, but that quickly evolved to perhaps institutional-to-peer. “Marketplace” implies that there’s a pure marketplace that’s operating, matching up borrowers and lenders in a hands-off kind of way. But that also implies a singular source of financing; that the financing for those individual loans comes from “the marketplace.”

    I talk a lot about the importance of having diversified sources of funding available to you regardless of how you originate assets.

    we all know that small businesses represent roughly 60% of GDP and roughly 60% of our labor force — and during the short time we’re sitting here today, our industry will probably do more of that to the tune of $10 million to $20 million. There’s a significant social benefit that we’re helping to create, and none of what we’re reading about in the press is going to change any of that.

    MPL Policy Summit to be Held on September 13th in Washington DC, (Business Wire), Rated: AAA

    Spearkers :

    Thomas J. Curry, Comptroller of the Currency

    Congressman Patrick McHenry, (R, NC-10th), House Financial Services Committee.

    Goldman Sachs Gets Closer To Taking On The Marketplace Lenders, (PYMNTS), Rated: A

    When asked by a JPM analyst if the firm was considering the “case for buying something? … So you get to a critical mass more quickly?” Schwartz neatly shot that idea down.

    “This particular effort, when we looked at it, we really felt like it was best designed from scratch. The reason for that is we are kind of uniquely positioned. It allows us to leverage our technology skills and our risk skills … if you look at the competitive landscape, there are benefits that online lending platforms provide to consumers, and there are benefits for large commercial providers of credit … we are really looking to bridge the gap between those strengths and offer consumers, the best we can, a really thoughtful, differentiated product.”

    Goldman purchased $15 billion in consumer accounts from GE Bank during Q2. He noted the two efforts were separate — Goldman Sachs isn’t becoming Goldman Sachs Savings & Loan — but connected insofar as they both buttress and diversify the Goldman brand.

    “We view those as separate. Having said that, the acquisition went well, adding in excess of $15 billion of deposits to the firm … We have had in excess of 20,000 consumers open up new accounts with us. We have had very significant growth in a short period of time. It really speaks to the brand strength.”

    It also remains to be seen if Republicans will win the election in November and reinstate Glass-Steagall as is a plank of their party platform. Such a regulatory change could statutorily bar Goldman from entering into these types of retail functions because it is an investment bank.

    United Kingdom

    Dear Mr. Bailey, “The Peer-to-Peer Lending Sector Has Embraced a Level of Transparency Which is Unrivaled in Financial Services”, ( Crowdfund Insider), Rated: AAA

    The letter is embedded here.

    The UK Peer to Peer Finance Association has released a letter addressed to Andrew Bailey, Chief Executive of the FCA, buttressing their position regarding the recent dialogue with the House of Commons’ Treasury Select Committee.

    This past June, Andrew Tyrie, MP, Chairman of the Committee, expressed concern regarding the risk of peer to peer lending. In an open letter to Bailey (then Deputy Governor of the Bank of England for Prudential Regulation) the Committee expressed its concern “to ensure that the FCA is paying due attention to the risks – and the opportunities – afforded by the growth of peer-to-peer lending”.

    Today Farnish is responding to oral evidence presented by Bailey last week to the House of Commons Committee.

    In her response, Farnish asserted that peer to peer lending platforms “exist solely because they create value to consumers on both sides of the platform: investors are able to earn fair predictable risk-adjusted net returns that can outperform other investment products, whilst borrowers can access fast and flexible finance.”  Farnish asked that Bailey and the FCA “would start from first principles, based on risks and benefits to consumers.”

    Farnish assured Bailey, and others, the sector “accepts its responsibility for ensuring that those investing in peer-to-peer products understand the nature of their investment, and appreciate the degree of risk incurred.”

    European Union

    Rocket Internet to Develop Banking Services With FinTech Group, (Wall Street Journal), Rated: AAA

    FinTech Group is developing a digital bank for Rocket Internet using the banking license of FinTech subsidiary Bank biw as a first step of a comprehensive partnership of the two companies. Rocket and FinTech Group plan to develop joint banking business models at an EU level.

    China

    Chinese P2Ps plagued by flaky guarantees, ( FT # Fintech), Rated: AAA

    China’s peer-to-peer lending industry is experiencing breakneck growth. Yet the industry is yet to deal with the “rigid repayment” problem – the perception afflicting the Chinese fixed-income universe that default is impossible.

    A fintech conference in Shanghai last week, known as LendIt, attracted standing-room-only crowds. A conference staffer called the scene on the first day “chaos” and tightened entry restrictions on the second day to prevent un-registered guests from sneaking in.

    Loans outstanding from

    P2P platform focused on property collateral mortgage Hepan Finance received RMB 66M Series A Investment, (Crowdfund Insider), Rated: A

    Founded in 2013, Hepan Finance is a P2P platform focused on providing operating capital to small businesses in the Shanghai area. Prior to launching the lending platform, the company’s experience, and expertise was primarily in value assessment and foreclosure of real estate properties. This experience has transferred to the P2P platform’s ability to confidently control risk and deal with collateral assets after default. On the investor side, the platform offers a 12% return for its 12-month wealth management product, which recently decreased from a 15% return in early 2016. The 1-month short-term product provides a 7.2% return. According to its website, Hepan has managed RMB 2.4 billion in investments and has over 220,000 registered investors.

    Hepan’s recent Series A Investment was led by Chinese VC firm ZCZB Capital. According to its website, ZCZB Capital focuses on providing fast, small loans (under RMB 5 million) to startups in a variety of industries. Prior to this injection of funding, Hepan had shrunk in borrowing and only made loans against high-end properties. It was stated that the new funds would be used in recruiting, engineering upgrades and offline promotions.

    Online finance marketplace Caogen Investment received RMB 1B Series B Investment from a state-owned fund, (Crowdfund Insider), Rated: A

    Founded in 2013, Caogen Investment is an open lending platform focused on providing operating capital to small businesses. More flexible than other P2P platforms, Caogen accepts property, equipment, material and even products as collateral. The platform now works with suppliers and distributors in over a dozen industries including fishery, furniture, hard rock mining and energy. On the investor side, returns range from 6.5% to 12% with terms ranging from 31 to 365 days. According to its website, Caogen has managed RMB 34 billion and has 6 million registered users.

    P2P platform focused on banker’s acceptance-secured business loans Yinpiao.com received RMB 120M in funding from SOE, (Crowdfund Insider), Rated: A

    Banker’s acceptance (BA) bills are a promise of future payment guaranteed by a bank. These are often traded on the secondary markets. P2P platform Yinpiao.com relies on BA assets to back online investment products. The platform not only sells BA before maturity but also originates loans secured by BA. Before launching Yinpiao.com in 2014, the platform’s finance team had over seven years of experience in trading BA and handled over RMB 50 billion each year. On the investor side, the platform provides an average return of 8.8% with terms varying from 7 to 180 days. According to its website, Yinpiao.com investors purchased 6 billion wealth management from August 2014 to June 2016.

    Investing RMB 120 million in Yinpiao.com, Huayu Economic Development Ltd. is a state-owned corporation that controls 26 companies in nuclear power, munition technology, aerospace, and mining. Aside from the funding, Huayu may introduce Yinpiao.com to high-quality borrowers from multiple supply chains in the industrial sector.

    P2P platform focused on supply chain financing Ziben Online raised RMB 200M in funding from four strategic investors, (Crowdfund Insider), Rated: A

    Ziben Online (ZO) provides short-term capital to small businesses in certain supply chains. ZO typically works with large corporations by providing loans to their suppliers.

    Author:

    George Popescu