Thursday May 23 2019, Weekly News Digest

young credit card delinquents

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

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

young credit card delinquents

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United States

United Kingdom

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News Summary

United States

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

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

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

View the full report here.

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

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

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

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

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

Source: Bloomberg, PeerIQ

Mixed FinTech Earnings

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

Source: Bloomberg, PeerIQ

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

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

Key findings

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

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

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

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

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

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

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

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

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

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

In this podcast you will learn:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

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

Source: Business Insider Intelligence

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

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

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

European Union

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

According to 

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

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

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

Australia/New Zealand

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

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

Asia

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

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

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

Africa

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday April 4 2019, Weekly News Digest

soft spending

News Comments Today’s main news: Affirm raises $300M. LendingClub charged with privacy violation. Funding Circle issues 187M GBP securitization. Zopa legacy portfolio drags. Fellow Finance facilitates 18.2M euros in March loans. Today’s main analysis: March 2019 debt report from LendingTree (A MUST-READ). Today’s thought-provoking articles: Interview with SoFi CEO Anthony Noto. The slowing U.S. economy. […]

The post Thursday April 4 2019, Weekly News Digest appeared first on Lending Times.

soft spending

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

Max Levchin’s Affirm raises $ 300 million (Axios), Rated: AAA

Affirm, the consumer credit startup led by PayPal co-founder Max Levchin, has raised around $300 million in Series F funding at a $2.9 billion post-money valuation, Axios has learned from multiple sources.

PayPal co-founder’s fintech company scores $ 300 million, plans massive hiring in S.F. (Biz Journals), Rated: A

Flush with a monstrous funding round, this San Francisco-based fintech company plans to ramp up its hiring from 580 employees to 850 by the end of the year – and the bulk will be in the Bay Area.

FTC Privacy and Data Security Report for 2018 (JDSupra), Rated: AAA

  • LendingClub, a peer-to-peer lending company, was charged with failing to deliver adequate privacy notices to consumers required by the Gramm-Leach-Bliley Act’s Privacy Rule and Regulation P. The FTC’s complaint alleged that “LendingClub violated these rules by failing to provide its customers with clear and conspicuous notice before collecting consumers’ financial data and by failing to deliver the notice in a way that ensured that consumers received it.” Customers were instead forced to follow a series of links before being able to review the privacy policy, a method the FTC deemed to be improper.

Anthony Noto of SoFi (Lend Academy), Rated: AAA

The CEO of SoFi talks priorities, innovation, company culture, competition and what it will take to build a world class financial services firm

Read the full transcript of the interview here. Interview by Peter Renton.

US Economy Slowing (PeerIQ), Rated: AAA

US 4th quarter GDP growth slowed to 2.2%, as what is shaping up to be the largest expansion in US economic history starts to lose steam. Consumer spending also slowed in January, rising by just 0.1% MoM. The Fed’s preferred inflation gauge, PCE, rose by just 1.4% YoY, justifying the Fed’s decision to keep rates on hold. Overall signs point to a slowing economy in the late stages of an expansion.

Source: Bloomberg, PeerIQ

LendingTree Debt Report – March 2019 (LendingTree), Rated: AAA

After a brief respite in mid-2018, the debt-to-income ratio for consumer debt rose once more, reaching 25.41% by the end of 2018. That falls just shy of the all-time high of 25.49% set one year earlier.

Household wealth saw a $5 trillion decline last quarter

Losing $5 trillion of wealth may sound disastrous, but that’s what happened to American households last quarter. According to the Federal Reserve, total net worth of U.S. households fell from $108 trillion to $104.3 trillion in the last quarter of 2018. The loss was the biggest quarterly drop since the depths of the great recession of 2008.

PayPal Makes Its First-Ever Investment in a Blockchain Startup (CoinDesk), Rated: A

Announced today, PayPal has joined the extension of a Series A funding round in Cambridge Blockchain, a startup that helps financial institutions and other companies manage sensitive data using shared ledgers.

Neither PayPal nor Cambridge Blockchain disclosed the investment amount, but recent filings with the SEC indicate that Cambridge Blockchain has raised a total of $3.5 million in new equity from several investors over the past nine months. That follows the $7 million close of its Series A in May of 2018, and brings the total capital raised to $10.5 million.

Zillow is now a mortgage lender, launches Zillow Home Loans (HousingWire), Rated: A

Zillow announced Tuesday that it is launching its own mortgage lending operation, which it is calling Zillow Home Loans.

A payday lender in disguise? New York investigates the Earnin app (American Banker), Rated: A

As early wage access programs such as Even, PayActiv, FlexWage, ZayZoon and DailyPay gain traction, some other apps are copying their style while using a more traditional payday-loan model — sparking attention from law enforcement agencies in the process.

That’s what happened to Earnin, which is often referred to and bills itself as an early wage access provider, which give employees access to their paychecks before they are deposited. The New York Department of Financial Services launched an investigation of the firm over concerns it may be skirting state lending laws by, among other things, requiring tips from users in lieu of disclosing fees.

Crypto Lending Platform BlockFi’s Interest Account Customers Receive Their First Interest Payments (Bitcoin Exchange Guide), Rated: A

Leading crypto lending platform BlockFi recently announced that their Interest Account customers received their first interest payment for their Bitcoin [BTC] and Ethereum [ETH] deposits.

Since their public launch on March 5, BIA has grown by over 400% and counting. Approximately 75% of BIA clients have a balance of less than 5 BTC or 150 ETH. Their median account balance is $7,000 USD.

Crypto lenders push no-tax perk of leveraging bitcoin for cash (American Banker), Rated: A

Former Wall Street trader Edgar Fernandez used some of his bitcoin as collateral to borrow nearly $100,000, a move that let him keep his cryptocurrency and avert a tax bill on the newly acquired cash.

Genesis Capital, a cryptocurrencies lender in Jersey City, New Jersey, an affiliate of Genesis Trading, says it handed out more than $1.1 billion in cash loans and borrowed virtual cryptocurrencies in 2018. That total volume doubled in the last quarter of 2018 from the volume of the previous two quarters. Other lenders have also said they are doing more transactions, including Nexo, a cryptocurrencies lender that says it has loaned $330 million since launching last April.

Atomic Capital Goes On The Attack With New Crypto Loan Offer In The Market (Bitcoin Exchange Guide), Rated: A

The asset tokenization company, Atomic Capital, is making a very aggressive loan offer in the crypto lending field. Back on Wednesday, the firm will be giving USD loans for 85% of the value of the Bitcoin (BTC) or Ethereum (ETH) used as collateral. In this way, the firm will be offering the most generous loan-to-value (LTV) in the space.

Just to put it into comparison, BlockFi offers a maximum LTV of 50%. Celsius Network, meanwhile, is giving customers 25%, 33% or 50% LTV.

Atomic will be charging interest rates of 11% and 13%. This is much more than the 4.5% or 8.95% that other competitors offer.

New $ 4.8m funding for SME bank Novo (Fintech Futures), Rated: A

Novo has raised $4.8 million in venture seed financing to make banking accessible for small businesses by launching no-fee FDIC-insured digital banking.

Blend seeks to deepen bank ties with account opening product (American Banker), Rated: A

Blend is aiming to expand its customer base of banks and credit unions with a digital account opening product that it says takes some customers as little as two minutes to complete.

The account comes in addition to the mortgage products the digital loan origination fintech already offers and can stand on its own or be integrated as a package, the company said Tuesday.

Will Millennials Bring Non-banks into Their Finances? (deBanked), Rated: A

According to an Accenture surveyfrom five years ago, 34% of millennials said they would bank with Apple if such a product were available.

Best low cost franchises to get into (BM Magazine), Rated: A

Business Services Franchise

Success Member Inc.: It is the leading online loan marketplace that connects consumers with banks, credit partners and multiple lenders both nationally and internationally. They offer training with an expert to this industry of 33 years, along with a lifetime one-on-one dedicated support.

Minimum Cash Required:$25,000

  • Training and Support: Yes
  • Financing: Yes
  • SBA Approved: Yes
  • Home-Based: Yes

Goldman Sachs’ Marcus Loses Product Head (PYMNTS), Rated: A

Marcus, the consumer bank operated by Goldman Sachs, has seen its head of product Michael Cerda quit his job.

Tradeweb Raises $ 1.1 Billion in Year’s No. 2 IPO in U.S. (Bloomberg), Rated: A

Tradeweb Markets Inc. raised $1.1 billion in the second-largest U.S. initial public offering this year, after again increasing the number of shares it was selling and then pricing them above the marketed range.

Tradeweb’s IPO is also the biggest for a financial services company in the U.S. since online lender GreenSky Inc. raised $874 million in May.

Class Action Lawsuit Filed Against Brendan Ross, Direct Lending Investments, and Others (deBanked), Rated: A

A class action lawsuit has been filed in California against Direct Lending Investments, LLC (DLI), Brendan Ross, Bryce Mason, Frank Turner, Rodney Omanoff, and Quarterspot Inc. alleging breach of contract, breaches of fiduciary duty, aiding and abetting breaches of fiduciary duty, and fraudulent inducement.

Read the full complaint here.

AI-Powered Asset Manager Pagaya Goes
After Real Estate (Institutional Investor), Rated: A

Pagaya, which manages money using algorithms created with artificial intelligence, has raised $25 million in a series-C financing round led by Oak HC/FT, a health care and financial technology venture firm.

The fund raise will support the company’s move into real estate, corporate credit, mortgages, and other asset classes.

White Oak Commercial Finance Adds Origination Talent in Texas (AP News), Rated: B

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, today announced the appointment of Andrew Bae to Director of ABL Originations, concentrating on Texas and the Southwestern U.S. region. Mr. Bae brings nearly 20 years of experience in commercial finance, most recently leading the establishment of the Dallas office for ExWorks Capital, a senior secured debt fund.

Charles Schwab Now Offers Investment Advice Digitally via Subscription (Subscription Insider), Rated: A

Clients pay a one-time fee of $300 and then $90 a quarter.

United Kingdom

Funding Circle back in securitisation market with £187m deal (P2P Finance News), Rated: AAA

FUNDING Circle has entered the securitisation market for the third time, with a £187m portfolio of UK loans originated by the peer-to-peer business lender.

Alternative asset manager Pollen Street Capital is the equity sponsor of the deal, having backed Funding Circle’s last securitisation eleven months ago.

While Funding Circle operates in the UK, the US, Germany and the Netherlands, the loans included in the securitisation are just from the UK.

Zopa legacy portfolio drags on P2PGI performance (P2P Finance News), Rated: AAA

P2P GLOBAL Investments (P2PGI) has blamed its poorly-performing legacy Zopa portfolio for its latest net asset value (NAV) dip.

The alternative finance-focused investment trust generated a NAV of just 0.31 per cent in February 2019, down from 0.45 per cent in January, and 0.75 per cent in December. This brings the trust’s annualised NAV to 3.7 per cent.

Will more challenger banks evolve as banking as a service providers? (Tearsheet), Rated: A

Starling Bank recently raised £75 million to fund a European expansion. As part of that announcement, the UK-based challenger said it had signed on three new clients to its banking as a service.

According to Starling, it has 20 institutional clients on its BaaS platform, which it launched in August 2018. Payment volume through the service is doubling month over month.

Monzo, following Revolut and N26, mulls new £11 per month premium offering (AltFi), Rated: A

Digital challenger bank Monzo crowned a bumper year in 2018 by coming first for customer service in an independent survey, stealing the title from regular winner First Direct. But will its growing legion of coral card-carriers ever pay for its expanding array of services?

The bank, which is now testing a new paid-for premium offering, thinks they might just do so. ‘Monzo Plus’ – as it is being called – even allows users paying a monthly fee to have Monzo cards in colours other than its famous ‘hot coral’ colour.

How to join the rush for a last‑minute Isa (The Times), Rated: A

There are now just over 48 hours left to make the most of the annual tax breaks on offer in an individual savings account (Isa). This year’s £20,000 allowance expires at midnight on April 5 and you can’t carry it over so it’s a case of use it or lose it.

Monevo Review – An Excellent Place to Begin Your Loan Search (DoughRoller), Rated: A

Through Monevo, you’ll be matched with loans of up to $100,000 with interest rates ranging from 3.99% to 35.99% APR; finding this many competitive options could take you hours to do individually. With Monevo, you can do it in about 60 seconds.

FCA warns that P2P Isas are ‘high risk’ (Money Observer), Rated: A

The Financial Conduct Authority (FCA) has warned that mini-bonds and peer-to-peer loans held within the Isa wrapper are “high risk”.

Payday lending isn’t over yet – and now its victims are being shortchanged yet again (Independent), Rated: A

The administrators of WageDay Advance, which went under in February, have started contacting thousands of former customers owed compensation through being mis-sold loans by the company to urge them to join a growing list of creditors.

Compared with Wonga, WageDay was more of a piranha fish than a shark – but the problems it has created aren’t all that different.

Five ways to add IFISA diversity (P2P Finance News), Rated: A

THIS WEEK is the busiest of the year for ISA providers and ISA savers alike. As the end of the tax year approaches, investors and savers are rushing to make the most of their annual ISA allowance, while ISA managers scramble to convince them that theirs is the right product.

I trust bricks and mortar and want to invest but what’s the best way to create an income from property? (This is Money), Rated: A

People are still making money from property and always will, sometimes lowering their exposure by jointly investing with friends and family, or looking at peer-to-peer lending. Investing locally can give first time investors more confidence as they know their own postcodes, and can keep an eye on what’s going on.

Finastra welcomes Sharon Doherty as Chief People Officer (Techapeek), Rated: B

Finastra today announced the appointment of Sharon Doherty, as Chief People Officer. Doherty joins from Vodafone, where she held the position of Global Organization and People Development Director. In her new role at Finastra she will have global responsibility for making Finastra the most loved and inclusive employer in the Fintech industry.

China

Regulators to pilot P2P lender registration program in back half of 2019 (technode), Rated: AAA

China is expected to start piloting a registration program for online peer-to-peer (P2P) lending platforms in the second half of this year. Regulators plan to start requiring P2P lenders in pilot cities, located in more developed regions, to register with the monitoring system. Regional and national players will have to meet certain requirements on registered capital, risk reserves, and lender risk compensation in order to be registered in the system. Regulators aim to roll out the national registration system by 2020.

European Union

Fellow Finance’s platform facilitated 18,2 million euros of loans in March (GlobeNewswire), Rated: AAA

In March Fellow Finance investors funded business and peer-to-peer loans worth around 18,2 million euros. Cumulative loan volume grew over 415 million euros and the total number of investors grew to 12 031. You can always check the real-time peer-to-peer lending statistics on our website: www.fellowfinance.com/for-investor/statistics.

Finleap acquires German challenger bank Penta (Fintech Futures), Rated: A

European fintech ecosystem Finleap has acquired Berlin-based digital sector banking solution Penta, reports Jane Connolly.

CoinLoan Enables Borrowers to Obtain Fiat Currency Using Cryptoassets as Collateral (Cardrates), Rated: A

In a Nutshell: In the wake of the 2008 financial crisis, peer-to-peer (P2P) lending arose as an alternative to credit offered by traditional banks. At the same time, blockchain-based cryptocurrencies like Bitcoin also emerged. Now, CoinLoan is bringing the two together through its P2P lending platform that lets borrowers use cryptoassets as collateral for obtaining fiat (or traditional) currency. Lenders provide capital with a guarantee from CoinLoan that they will be repaid in full. Borrowers gain access to funds without needing to dispose of their cryptoassets or prove their creditworthiness.

International

Women in Fintech Demolish Glass Ceiling (Lend Academy), Rated: AAA

Valerie Kay, Chief Capital Officer at LendingClub, is responsible for overseeing LendingClub’s Investor Group. She addresses the need for diversity, inclusion, mutual respect and collaboration. She emphasizes the vital importance of diversity to drive better workplaces, happier customers and more profits.

Andrea Gellert, Chief Revenue Officer and Chief Marketing Officer of online small business lender OnDeck, says she sees good progress being made by Fintechs in finding female candidates at all levels including C-Suite and board positions. She points out, “There are more female founders than there used to be. We are moving at a much more accelerated pace than previous industries did in terms of female management.”

Onfido scores $ 50 million investment (Finextra), 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.

Australia

Australian neobanks target scale of UK rivals without growing pains (AltFi), Rated: AAA

Sydney-based digital bank Volt promises to offer a faster more personalised service than the country’s big four incumbents – National Australia Bank, Commonwealth Bank, Australia and New Zealand Banking Group and Westpac.

Melbourne-based small business bank Judo launched last June lends between A$250,000 to A$5,000,000, and is process of applying for a banking license from the Australian Prudential Regulation Authority.

Brokers urged to seize opportunities in SME space (TheAdviser), Rated: A

According to research from small business lender OnDeck Australia, which involved a survey of 331 business with an annual turnover of less than $5 million, 25 per cent of SMEs plan to seek additional finance over the next 12 months.

India

P2P lending (Invest in India), Rated: AAA

India currently has about 30 online P2P lending platforms. Some of these are Faircent, i2ifunding, Lendbox etc. In 2018, as many as 11 P2P players received the RBI licence to operate as an NBFC – P2P company. RBI in its master directions has defined NBFC – P2P as a non – banking institution which carries on the business of a peer – to – peer lending platform. The estimated P2P lending to be generated in India over the next 5 years is pegged at around $ 4 bn. Whereas in China, the P2P lending book currently is around $ 100 bn.

Southeast Asia

SINGAPORE-based  leading SME lending platform Validus Capital (Validus) and Lighthouse Canton, an independent asset management and family office advisory services firm, jointly announce the reopening of the LCV Trade Finance Fund (the Fund) with additional capacity of US$14.8 million (S$20 million; RM60 million).

Canada

OnDeck merges Canadian ops with Evolocity (Finextra), Rated: AAA

OnDeck (NYSE: ONDK), the leader in online lending to small business, today announced it has completed the transaction combining its Canadian operations with Evolocity Financial Group (Evolocity), a Montréal-based online small business lender. The combined companies are majority owned by OnDeck.

South Africa

For South Africa’s first challenger bank, conversational AI isn’t just a nice-to-have (Tearsheet), Rated: AAA

South Africa’s TymeBank has launched Max, an AI-powered conversational assistant designed to help consumers learn about personal finance.

For South Africa’s first challenger bank, conversational AI is an important piece of its product roadmap.

Latin America

Why Fintech Startups Are Rapidly Becoming Unicorns in Latin America (Next Billion), Rated: AAA

Fintech was the #1 sector of venture capital investments in Latin America last year, and experts are estimating that the LatAm fintech market will exceed $150 billion by 2021.

In the past few years, over 300 fintech startups have been born in Mexico alone, coming in just second to Brazil, which boasts nearly 400 startups in its own fintech sector.

Authors:

George Popescu
Allen Taylor

The post Thursday April 4 2019, Weekly News Digest appeared first on Lending Times.

Thursday February 28 2019, Weekly News Digest

Annual fintech financing Singapore

News Comments Today’s main news: SoFi to roll out crypto trading with Coinbase. Walmart now offers Affirm loans. Funding Circle fund ups the ante on buyback strategy. Orca launches IFISA. LendDenClub cross 1 million borrowers, lenders milestone. Today’s main analysis: 2019 securitization update. How marketplace lending is a growing and dynamic global market. (A MUST-READ) Today’s thought-provoking articles: The 2009 […]

The post Thursday February 28 2019, Weekly News Digest appeared first on Lending Times.

Annual fintech financing Singapore

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Fintech Startup SoFi to Roll Out Crypto Trading Via Partnership With Coinbase (CoinTelegraph), Rated: AAA

Fintech startup SoFi — known for its online lending services — is partnering with major United States-based crypto exchange Coinbase to roll out crypto trading support, according to a CNBC report Feb. 26.

Millennial online lender SoFi to offer zero-fee ETFs, an unexpected rival for index fund giants Vanguard, iShares (CNBC), Rated: A

The race to zero-fee exchange-traded funds has found an unlikely competitor: Online lending and personal finance platform SoFi, which has filed for two index ETFs that will waive management fees for the first year. In making the move to zero-fee ETFs, the online lender is crashing an ETF party dominated by Vanguard and BlackRock‘s iShares.

FTC orders SoFi to stop misleading consumers (MPA Mag), Rated: B

The Federal Trade Commission has ordered online lender SoFi to stop lying about how much borrowers can save by refinancing with the company.

Digital lender founded by ex-SoFi CEO raises $ 65M to fuel expansion (American Banker), Rated: A

The new company founded by Mike Cagney, the former embattled chief executive of Social Finance, plans to announce a $65 million funding round on Wednesday, bolstering firm’s expansion into other financial services, including wealth management.

With the new venture, Cagney is using some of the strategies from his tenure at SoFi — like diversification into areas typically only occupied by traditional banks. However, the new company, Figure, is focusing on different customers, and it’s taking steps to avoid scandals similar to the ones that saw Cagney step down from the SoFi helm.

Walmart teams with Affirm to offer point-of-sale loans (American Banker), Rated: AAA

Walmart will offer its customers point-of-sale loans for the first time — both on its website and in nearly 4,000 U.S. stores — under a partnership with the Silicon Valley lender Affirm.

Under the deal, Walmart shoppers will be able to get Affirm loans of three, six or 12 months to finance purchases ranging from $150 to $2,000. The loans are already being offered in Walmart stores, and they will be available to Walmart’s online shoppers in the coming weeks.

Affirm’s latest partnership brings its alternative financing to Walmart’s US stores and website (TechCrunch), Rated: A

The companies announced this morning that Affirm’s financing options would be made available in more than 4,000 Walmart Supercenters across the U.S., and will roll out to Walmart.com in the weeks ahead.

The offering will go live across Walmart Supercenters nationwide, except in Iowa, West Virginia and Puerto Rico, and will be soon available on Walmart.com.

Loan app Affirm CEO breaks down new Walmart partnership (CNBC), Rated: A

Loan app Affirm CEO breaks down new Walmart partnership from CNBC.

ABS Vegas – 2019 Securitization Update; Square Charter Status (PeerIQ), Rated: AAA

In regulatory news, Square’s ILC charter application has received opposition from 37 community groups. The groups are concerned about Square’s CRA activities and have asked the FDIC to bolster Square’s CRA requirements. Before this letter from community advocates, nearly all of the 15 letters the FDIC received were in favor of Square’s bid. Square is the furthest along the path to getting an ILC charter and its experience will determine whether other FinTechs follow its lead.

Structured Credit Investor magazine explores the challenges facing the maturing marketplace lending sector. Issuers need to distinguish between the borrower experience that they provide and manage liquidity. The article also makes the point that the sector is ripe for consolidation, although we haven’t seen any M&A yet.

2019 Securitization Update

The first two months of 2019 saw 5 securitization deals totaling $1.7 Bn in new issuance. The issuance volume represents a 23% drop over that seen in the first two months of 2018, as the market recovers from the volatility in equity and credit markets seen at the end of 2018. Total securitization issuance now stands at $46.2 Bn, with 147 deals issued to date.

Source: PeerIQ

The Housing Market’s 10 Year Challenge — Comparing The Housing Market of 2009 to Today (LendingTree), Rated: AAA

When the real estate bubble burst in late 2008, many Americans saw their home values fall drastically, but a lot has changed in the 10 years since — housing prices have rebounded from their lows during the Great Recession. And though prices are now starting to cool, in many cases, home values have even exceeded their 2006 highs.

On average, median home values have increased by nearly $50,000 across the 50 largest metros in the United States since 2009.

Metros where housing prices have recovered the most since 2009

San Jose, Calif.

Median home value 2009: $638,300
Median home value 2017: $957,700
Median home value change: $319,400
Median unemployment rate change: -6.4%
Median household income change: $32,991

San Francisco

Median home value 2009: $591,600
Median home value 2017: $849,500
Median home value change: $257,900
Median unemployment rate change: -5.4%
Median household income change: $27,889

Los Angeles

Median home value 2009: $463,600
Median home value 2017: $617,100
Median home value change: $153,500
Median unemployment rate change: -5.0%
Median household income change: $11,467

Source: LendingTree
Source: LendingTree

Gen Xers Carry the Biggest Auto Loan Burden; Study Finds (One World Herald), Rated: A

According to the loan comparison website, the median balance of Gen Xers who have auto loans is $18,741 is higher than other age groups. It is 9% more than baby boomers’ $17,185 median balance. This is higher than millennials’ $16,200 and 37 percent more than the lowest median balance of $13,666 held by Gen Z.

Personal Loan Interest Rates for February 2019 (Nerdwallet), Rated: AAA

Personal loan interest rates, whether you’re considering a loan from a bank, credit union or online lender, generally range from about 6% to 36%. The actual rate you receive depends on factors such as your credit score and history, annual income, existing debt and where you get the loan.

Online lenders offer the lowest starting interest rates on personal loans to borrowers with good to excellent credit.

Source: Nerdwallet

LightStream and Marcus both require a minimum credit score of 660. LightStream accepts joint applications, and one applicant can have a credit score lower than its minimum. SoFi has a slightly higher credit score requirement and requires at least $45,000 in annual income.

Elevate Credit (ELVT) Posts Earnings Results, Meets Expectations (Fairfield Current), Rated: A

Elevate Credit (NYSE:ELVT) announced its quarterly earnings results on Monday, February 11th. The company reported $0.09 earnings per share (EPS) for the quarter, meeting the Zacks’ consensus estimate of $0.09, Bloomberg Earnings reports. The business had revenue of $207.29 million for the quarter, compared to the consensus estimate of $212.42 million. Elevate Credit had a return on equity of 15.72% and a net margin of 1.59%. Elevate Credit updated its FY 2019 guidance to $0.55-0.65 EPS.

Source: Fairfield Current

Hunt Real Estate Capital buys RealtyMogul’s proprietary loan underwriting program (Housing Wire), Rated: A

Hunt Real Estate Capital, which offers financing for all types of commercial real estate, will soon have a new underwriting system to help it originate those loans, as the company is buying a proprietary loan underwriting system from RealtyMogul.

Elevate’s Joan Kuehl Named Dallas ORBIE CIO of the Year (The Progress), Rated: B

Elevate Credit, Inc. (“Elevate”) today announced that Executive Vice President and Chief Information Officer Joan Kuehl has been named the Large Enterprise CIO of the Year by the Dallas ORBIE CIO of the Year Awards. The award honors chief information officers who have demonstrated excellence in technology leadership.

A Recession Coming? Small Business Lending Platform Kabbage Says It’s Prepared (Forbes), Rated: A

The world is bracing for a recession, with the latest data showing  in the U.S. expect it to occur by the end of 2021

If those predictions prove true, it will be the first major economic downturn for some of the nation’s leading fintechs. Born out of the ruins of the recession, these startups have enjoyed nearly a decade of success buoyed by strong economic growth, a bull run in the stock market and low unemployment.

Here’s more on the  AJC Top Workplaces midsize companies (AJC.com), Rated: B

Kabbage has been named to the list for five consecutive years and this is its first year in the top five. The private financial technology company, founded in 2009, has 489 global employes and 367 at its U.S. headquarters in Atlanta. Flexibility at work and perks, such as a daily catered lunch and snacks, are among reasons employees appreciate working for Kabbage. Wellness benefits include fitness classes, health equipment onsite, biweekly meditation classes, CPR training, an annual flu shot clinic and sponsoring sports clubs. It also fully pays health benefits for individuals and provides annual bonuses and a 401(k) match. Through its sabbatical program, employees of five years can receive six weeks of paid time off and an additional $6,000. In 2018, Kabbage participated in the Atlanta PRIDE parade and also took a stand against gun violence after the mass shooting at Stoneman Douglas High School. Workers in 2019 will build a Habitat for Humanity home as part of its Kabbage Kares program, which also has supported PAWS Atlanta, Easter Seals and the Epilepsy Foundation.

Diversifying a Self-Directed IRA Made Simple with New Offering from CrowdStreet (The Progress), Rated: A

CrowdStreet, an online marketplace for direct equity investment in commercial real estate (CRE), today launched a streamlined, investor-friendly approach to investing qualified retirement account funds into commercial real estate offerings. This new option makes it easier than ever for individuals to access CRE investments with their self-directed IRAs (SDIRA), thus reducing their investment exposure to a volatile stock market and achieving more independence in managing their investments.

Liquid P2P and Interest Radar Announce Strategic Partnership (Liquid P2P), Rated: A

Liquid P2P and Interest Radar are pleased to announce that they have entered into a strategic partnership. The two third-party investing services for online peer-lending giant Lending Club will combine strengths under a single platform to deliver a more comprehensive automated tool with a patent-pending liquidity solution.

Direct Lending Investments Suspends Investor Withdrawals (Lend Academy), Rated: A

Earlier this month Brendan Ross, the CEO of Direct Lending Investments, Inc., sent a letter to investors notifying them that they have suspended withdrawals and redemptions effective February 8, 2019. Lend Academy was able to obtain a copy of this investor letter, dated February 11, that provides some color into what happened. The reason given was the delinquency of a large holding, VOIP Guardian, a telecom receivables factoring company.

Fintech deal will provide access to midsize businesses in U.S. (American Banker), Rated: A

Add HSBC to the list of banks partnering with commercial online lenders.

The bank on Tuesday announced a partnership with Neptune Financial, a San Francisco online lender that focuses on businesses with $10 million to $100 million in assets. The bank estimates that, with the access it will get to Neptune customers, the deal represents a $1.5 trillion opportunity.

Venmo debuted a limited-edition rainbow-colored card (Business Insider), Rated: A

Venmo, the PayPal-owned peer-to-peer (P2P) giant, debuted a limited-edition rainbow-colored version of its physical card product. The card will function the same as regular Venmo cards, allowing customers to pay wherever Mastercard is accepted, split costs and tips, withdraw funds from select ATMs, and manage their Venmo balance, but it will only be available for as long as supplies last, according to Venmo.

Source: Business Insider

Why digital identities will be so important in the next few years, according to Mastercard’s vice chairman (CNBC), Rated: A

The pace with which we are moving toward the internet of things is “very rapid” but we “can’t have the internet of everyone without the inclusion of everyone,” according to the vice chairman of payments giant Mastercard.

“You have to start focusing on how does the human get involved, and that’s going to be through having a digital identity,” Ann Cairns told CNBC’s Karen Tso on Monday at the Mobile World Congress in Barcelona.

Credit Karma’s Dana Marineau: ‘We want users to think of us as more than just free credit scores’ (Tearsheet), Rated: A

Today’s marketer on the hot seat is Dana Marineau, Credit Karma’s vice president of brand, creative and communications. People love Credit Karma for its free credit scores, but the company provides so many other free tools. Dana’s team is tasked with elevating the brand beyond just free credit scores, as a place to get help with financial decisions and achieve financial progress. She brings a 15 year experience at EA, working on many of the top sports games in the business.

Why this small bank created a separate, digital-first brand (American Banker), Rated: AAA

When Midwest BankCentre, a community bank in St. Louis, launched the digital-first Rising Bank in February, it joined the ranks of other financial companies —generally large players such as JPMorgan Chase, Wells Fargo and MUFG Union Bank — that have created separate, digital-only brands. Unlike them, the $1.9 billion-asset Midwest hopes to keep a community bank feel at the internet-only unit.

The Future Is Plastic: Fintech Unicorn Brex Launches New Credit Card For E-Commerce Merchants (Forbes), Rated: A

Brex, a San Francisco credit card startup that reached a valuation of $1.1 billion late last year, 22 months after its founding, is launching its second product, a physical credit card for e-commerce companies. Its first card, targeted to venture-backed tech startups, has attracted more than 3,000 customers by providing higher spending limits and simplifying the application process.

YieldStreet raises $ 62M to democratise alternative investments in shipping, real estate and more (TechCrunch), Rated: A

YieldStreet — which provides a platform for making alternative investments in areas like real estate, marine/shipping, legal finance, commercial loans and other opportunities that in the past were only open to institutional investors — is today announcing that it has raised $62 million in a Series B round of funding.

Guaranteed Rate Leads Mortgage Executive Magazine’s List of Top Loan Originators in America (GlobeNewswire), Rated: A

For the seventh consecutive year, Guaranteed Rate has the most loan originators of any lender on Mortgage Executive Magazine’s annual list of the “Top 200 Mortgage Originators in America,” including the number one originator.

Guaranteed Rate led the way with 36 originators ranking within Mortgage Executive Magazine’s Top 200, including three of the top five. Shant Banosian of Boston, Mass., was named the nation’s 2018 Top Originator by funding $536 Million in total loan volume.

Americans Focus On Debt Management But Lose Focus On Retirement Savings (Forbes), Rated: A

Our minds are wired to prioritize the near-term over the long-term. We shouldn’t be surprised that a new survey by 

U.S. banking regulator fights NY lawsuit over fintech charters (Reuters), Rated: A

The U.S. Office of the Comptroller of the Currency has asked a Manhattan federal court to dismiss a lawsuit by a New York financial regulator over its plan to issue banking charters to fintech companies, saying the lawsuit is premature.

Blockchain and data protection: the main concerns (JDSupra), Rated: A

Blockchain’s usage is no longer limited to digital crypto currencies, as blockchain databases may be deployed in innumerable circumstances and scenarios, including, for instance, within the financial services and insurance sectors for money transfer, peer-to-peer lending and transfer of securities, as well as automatic execution of contracts.

LoanStreet positions for growth with new hires (LoanStreet Email), Rated: B

After the launch of LoanStreet’s commercial lending product and the announcement of their $6.5 million funding round, LoanStreet – the first fully-integrated platform that streamlines the process of sharing, managing, and originating loans – has appointed three credit union industry veterans to support LoanStreet’s aggressive growth.

These new hires include Mike Doherty, Managing Director and Head of Credit Union Sales; Tony Harter, Business Development Director; and Joe Parvin, Business Development Director.

White Oak Business Capital Hires Carol Bader Apicella to Expand Northeast and Mid-Atlantic Markets (GlobeNewswire), Rated: B

White Oak Business Capital, Inc. (“WOBC”), an affiliate of White Oak Global Advisors, LLC, has announced that Carol Apicella has joined the firm as Senior Vice President and Senior Business Development Officer. Apicella will be responsible for expanding the firm’s markets in the Northeast and Mid-Atlantic.

United Kingdom

Funding Circle fund adds firepower for buyback strategy (AltFi), Rated: AAA

The portfolio, an investment trust, of loans originated by Funding Circle lowered its dividend expectations amid lower projected returns last year prompting a discount to its net asset value.

Following a move to a more than 10 per cent discount last year it started share buybacks in a bid to narrow its discount. It has now made additional capital available from its free cash flow to be deployed into share buybacks, the fund said yesterday.

Orca Innovative Finance ISA Launches, Enables Diversified P2P Investment (Crowdfund Insider), Rated: AAA

Orca Money is finally launching its long-anticipated Innovative Finance ISA (IFISA). Orca’s spin on the savings vehicle allows investors to spread their money across multiple peer-to-peer lenders (P2P) thus providing a heightened degree of diversification. Additionally, Orca Money conducts due diligence on behalf of IFISA investors.

Currently, the Orca IFISA allows access to 5 P2P platforms: Lending Works, Assetz Capital, Landbay, Octopus Choice and Lending Crowd.

Experian, ClearScore scrap merger plans (Reuters), Rated: A

Experian Plc, the world’s biggest credit data firm, said on Wednesday that it had agreed with rival ClearScore to abandon their proposed merger, after Britain’s competition watchdog indicated that it may block the deal.

NatWest launches account aggregation as Open Banking takes hold (AltFi), Rated: A

It’s been a long time coming, but Open Banking is finally spreading through the traditional banking industry, this week with the launch of account aggregation for NatWest customers.

The RBS subsidiary becomes the UK’s 4th bank to let customers connect rival current accounts.

Will Open Banking boom in 2019? (AltFi), Rated: A

It has been over a year since the Open Banking UK initiative under the Competition and Markets Authority order and Second Payment Services Directive (PSD2) was launched and has become one of the industry’s biggest technology and regulatory shake ups in recent years. It is no surprise that the initiative’s first year has seen a relatively low consumer uptake. This has been coupled with reports that consumers’ knowledge of the scheme appears to be markedly low.

Aave Launches Platform to Pay Bills Using Crypto (Finance Magnates), Rated: A

In an attempt to bring crypto closer to the mainstream, the London-based fintech startup has announced the launch of Aave Pay.

The app will allow its users to pay their utility bills using digital coins by converting crypto into fiat in real-time using bank transfer facility. The company is claiming that the platform can be used to business expenses as well including employee salaries, income taxes, and other commercial or corporate expenses.

Investing in crowdfunded development projects – what you need to know (Property Investor Today), Rated: A

You can invest in peer to peer development loans for the short term or in an Innovative Finance ISA for a longer commitment period, but with the potential to earn tax free returns.

By comparison, a peer to peer lending platform with its own development company will have much more control over its projects and be able to give you more detailed and trustworthy updates.

Failed Lender Reaching ‘From Beyond The Grave,’ MPs Warn (Law360), Rated: A

Failed payday lender Wonga is damaging the finances of thousands of customers “from beyond the grave” because they cannot seek redress for allegedly missold loans as the company was not covered…

International

Some Bankers Are Doing Even Worse Than in 2009 (The Washington Post), Rated: AAA

It may not feel like it, but some corners of banking are suffering as badly as they did during the depths of the financial crisis. Global volumes of initial public offerings and share placings in January and February have been nearly 60 percent lower than in the same period last year. The numbers are worse than the first two months of 2009. If activity doesn’t pick up soon, it would be worrying evidence of the fragility of investor sentiment.

The hope is that the lull is temporary, and technical. The government shutdown in Washington has gummed up U.S. IPOs. Uncertainty over the U.K.’s future relationship with Europe just drags on. And the December stock-market wobble probably killed off deals that were being planned for the window that traditionally opens between January and the start of the full-year earnings season in late February.

Marketplace Lending – A Growing and Dynamic Global Market (DBRS Email), Rated: AAA

I wanted to share with you a new joint report from our U.S. and European structured finance teams. The new report, attached to this email, analyzes the growth of the marketplace lending market around the globe.

The commentary includes the following topics:

— The evolution in finance, from traditional banking to FinTech.
— FinTech’s influence on marketplace lending around the globe.
— Growth hurdles.
— Securitization considerations.

Bank on it: How Enova’s software expands credit access worldwide (Built in Chicago), Rated: A

Not all credit histories are created equal.

That’s the case for a large part of the world’s population who can’t get access to a loan from a traditional credit provider — like a bank — creating a world in which the hardest working people don’t always get access to the credit they need. Enova, however, believes it has a solution. The fintech company draws on the power of machine learning and data to offer products that expand access to credit for consumers and small businesses.

Blossom Capital scores $ 85m from Robinhood and Funding Circle backers (AltFi), Rated: A

Blossom Capital, which has already backed five startups including rental marketplace Fat Lama, today raised $85m which it will use to lead Series A rounds of between $5m and $10m in Europe.

Eight Simple Ways to Earn Bitcoin Online Legally (The Crypto Updates), Rated: B

Earn Bitcoins as the interest payments: If you have earned some Bitcoins already, you can put the Bitcoins to earn for you. Lend them out at particular interest rate. You can lend the Bitcoins directly to someone known at a greed interest rate and repayment period. You need to assess trustworthiness of borrower. Peer to peer Bitcoin lending is another way to let the earned Bitcoins earn for you. There are many peer-to-peer lending websites where the borrowers post the borrowing requests. Over these websites, you can act as a lender. It is also possible to fund the small portion of numbers of loans to reduce the risk.

European Union

Grid Finance suspends taking investments below € 100,000 (Irish Times), Rated: AAA

One of the largest providers of peer-to-peer loans in the State has shut down a key part of its business aimed at smaller investors, blaming an absence of regulation in the crowdfunding space.

Grid Finance, which is backed by Enterprise Ireland, wrote to holders of its “Brick” accounts – that facilitate the investment of up to €100,000 – in recent days stating that it would withdraw the offering from the marketplace.

China

Dragon Victory International: Exposure To The Chinese Crowdfunding Market At A Regulatory-Driven Discount (Seeking Alpha), Rated: AAA

In recent years as China winds down its industrial and manufacturing powerhouse growth, it’s looking to other developed nations to determine which platforms it should invest in and pave the way to sustained economic growth. As most other major developed nations have done over the past century, financial services and engineering have been a very profitable platform and companies in China are quick to launch their own services to capitalize on the triple-digit growth in online financial services exhibited since 2003.

Similar to Hexindai (HX), which I’ve previously covered as a leading online lender which is capitalizing on the middle class appetite for debt to finance their lives and vacations, Dragon Victory International Limited (LYL) is taking on the crowdfunding segment in the People’s Republic of China. Similar to countless other platforms around the world, the company’s services are around financing new companies and capitalizing entrepreneurs through public funding and they already have over 4.5M users who use their services, a number nearly doubling each year.

Source: Dragon Victory International F-1 filings

China Fintech Today: The P2P Boom Is Truly Over (SupChina), Rated: A

This year, the government has continued to lead a reorganization of the industry:

  • More companies will die: As of February 17, only 60 percent of online lending institutions had disclosed their operational information for January 2019, including five problematic platforms.
  • However, the current asset quality of the online lending industry has improved significantly according the data from firms that did report.
  • As of the end of January 2019, the accumulated amount of the online P2P online loan industry was about 7.78 trillion yuan ($1.16 trillion). The total loan amount in January was 91.4 billion yuan ($13.61 billion), down 55.1 percent year-on-year and down 1.3 percent from the previous month.
  • Further consolidation of industry players is certain. Some experts quoted in media reports predict that the scale of future online loans will continue to shrink because of regulation.
  • Some listed companies, such as Aoma Electric and Panda Financial Companies, have abandoned their P2P businesses.
  • Aoma Electric issued a letter of concern to the Shenzhen Stock Exchange on February 14, attributing the decision to the broader economic slowdown, and a high number of overdue loans.
  • Panda Gold Control in 2018 was also dragged down by its P2P business, and expects a net loss of 41.16 million ($6.13 million) to 57.63 million yuan ($8.58  million) in 2018. Faced with the uncertainty of the P2P sector, Panda Gold Control chose to divest.

A Crypto Project That Raised $ 20 Million Is Caught Faking Its Founding Team (CoinDesk), Rated: A

Launched on Dec. 2, BHB claims to offer an ethereum-based solution for peer-to-peer lending, but by Jan. 18, local media reports were already accusing the project of operating an illegal pyramid scheme. Now, CoinDesk is able to reveal inconsistencies in the information provided about its founding team that further suggest something may be amiss at the China-based project.

However, the image of Bobby White used in BHB’s marketing materials is identical to that of an economics professor at China’s Tsinghua University named Alexander White. Meanwhile, the image of Gregory Moss is the same as one used by a philosophy professor at The Chinese University of Hong Kong, who is also named Gregory Moss.

Tencent-backed brokerage firm downsizes US IPO amid weak market demand (Technode), Rated: A

Tencent-backed online brokerage firm Futu Securities has set the terms for its US initial public offering (IPO) to raise up to $130 million, which will value the company at more than $1 billion. The company previously set its target at as high as $300 million when it filed for the US listing in December.

Chinese tech behemoth, Tencent, owns over 38% of the company, has shown interest in purchasing up to 25% of the new shares issued.

Australia

How should accountants talk to clients about fintechs? (In the Black), Rated: A

Like the ombudsman’s office, ASIC has also made information available to educate consumers and advisers, including on its MoneySmart Borrowing Basics and Peer-to-Peer Lending sites.

Is any flexibility possible, Shiel wonders, with a peer-to-peer lending model in which the borrower likely doesn’t know who is providing the funds?

India

LenDenClub crosses 1,00,000 borrowers and lenders milestone (News Barons), Rated: AAA

LenDenClub, one of India’s fastest growing peer-to-peer (P2P) lending platforms, recently crossed an important landmark with more than 1,00,000 borrowers and lenders on its platform. The breakdown of borrowers to lenders is 83,300 and 16700, respectively. The company crossed this milestone by keeping up with latest market trends, and saw an increase in the use of its product InstaMoney, which was launched in June 2018.

Why Do Fintech Startups and Investors See a Huge Potential in Lending? (Entrepreneur), Rated: AAA

Today, thanks to the ongoing digitization, borrowing has become as easy as it can get in India. For contrast, all it takes now is the touch of a few buttons, answers to a few verification-related questions, and anyone can receive a loan in a matter of hours or days, if not minutes. And all of this is without any collateral and while enjoying the comfort of your home. Now, compare this with taking a day off to go to the bank, doing extensive paperwork, visiting frequently to check the progress of your loan application, and ultimately, getting your application rejected because of the loan officer’s misjudgement. All while wasting two months of time in the constant to and fro and taking multiple days off from your office.

It is beyond doubt that the advent of fintech startups has altered the game of lending in India. It has become both simpler and convenient to borrow using their revolutionary approaches driven by state-of-the-art technologies. Currently, more than 1,500 fintech startups (of all shapes and sizes) are catering to the Indian market, and more than half of these startups have been launched over the last 3 years. This gives us a clear picture of how lucrative the sector is becoming for our startup ecosystem. But what is essentially fuelling this trend? Let’s find out.

Banning of UDS to benefit P2P Lending Industry (Inventiva), Rated: A

The latest ordinance of the Banning of Unregulated Deposits (UDS) 2019, was passed by the government to provide a comprehensive mechanism to ban UDS as well as to protect the interest of depositors. This is in line with the Reserve Bank of India’s guidelines on the NBFC-P2P sector, issued in October 2017 to regulate the unorganized lending business in the country.

Asia

Singapore fintech investments rose two-fold to US$ 365m in 2018 (SBR.com.sg), Rated: AAA

US$102.2m of the total funds raised went to lending fintech companies such as the homegrown Funding Societies.

Fintech investments in Singapore more than doubled to US$365m in 2018 from US$180m in 2017, putting the country amongst the top five fintech markets by funds raised last year in Asia Pacific, behind China, India, Australia and Japan, according to Accenture’s analysis of CB Insights data. The number of deals in the country rose to 71 from 61 in 2017, making it the third busiest market in the region, behind only China and India.

Source:

Validus Capital raises $ 15m for SME financing (Fintech Futures), Rated: A

Validus Capital, a Singapore-based SME financing platform, has raised SGD 20.5 million ($15.2 million) in a Series B funding round, led by FMO, a Dutch public-private development bank.

Latin America

PayPal expands its small business loans initiative to Mexico (Leaprate), Rated: AAA

Online payment giant PayPal launched its Working Capital initiative in 2013 as an alternative method for business to access working capital much faster than through traditional means. Many small and medium-sized business (SMB) clients embraced the program and since then the company has advanced more than $6 billion in loans to over 170,000 businesses in the UK, US, Germany and Australia.

PayPal also recently revealed that it has partnered with Konfio, a Mexican online lender that utilizes unconventional data sources to facilitate fast credit assessments, in a deal that will allow PayPal to extend its Business loan and working capital programs to Mexican businesses.

ID Finance eyes ‘pivotal moment’ for Latam fintech as revenue in region climbs 403% (Fintech Finance), Rated: A

ID Finance, the fintech company operating in Europe and Latin America, saw revenue of $49m in 2018. This represents growth of 236% for the business, which was formally separated from its operations in Russia and CIS region last year.

The company is enjoying particularly strong growth in Latam, one of the world’s fastest growing markets for fintech adoption thanks to high mobile penetration and a sizeable underbanked population – according to the World Bank 61% of Mexico’s population is excluded from the traditional banking system, while 40% of Brazil’s 207m population are blacklisted. The company now has 141 employees in Latam and saw revenue growth of 403% in the region last year.

Challenger bank N26 expands to Brazil (Fintech Futures), Rated: A

Germany-based mobile challenger bank N26 is powering on yet again as it has revealed its plans to expand to Brazil.

Africa

How FinTech Companies Inspire Africa With Mobile Technology (PYMNTS), Rated: AAA

With the potential for rapid growth and job creation, FinTech firms in Africa have caught the attention of global investors. According to the London Stock Exchange Group’s 2019 “Companies to Inspire Africa” report, which highlights these firms, the FinTech sector has the second highest growth rate representation of technology and telecoms as well as financial services. As it stands, companies in this space represent more than a quarter of 360 featured firms from 32 different countries. Pan-African payments firm Cellulant is among the companies that appeared in the first and second editions of the report.

Authors:

George Popescu
Allen Taylor

The post Thursday February 28 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 24 2019, Weekly News Digest

millennials loan money

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

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

millennials loan money

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

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

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

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

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

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

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

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

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

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

Strong Bank Earnings (PeerIQ), Rated: AAA

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

Source: PeerIQ

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

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

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

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

Source: WalletHub

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Fundera

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

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

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

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

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

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

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

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

European Union

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

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

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

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

International

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

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

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

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

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

India

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

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

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

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

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

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

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

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

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

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

Asia

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

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday December 20 2018, Daily News Digest

US Yield Curve

News Comments Today’s main news: OnDeck to enter equipment financing. SoFi releases video to destigmatize debt. RateSetter sees 47% revenue growth. Funding Circle fund expects lower returns. 360 Finance financials. Today’s main analysis: U.S. yield curve inverts. Today’s thought-provoking articles: Why did OnDeck file suit in Arlington? Fewer Americans rely on cash. More than half of Americans can’t cover a $1,000 […]

The post Thursday December 20 2018, Daily News Digest appeared first on Lending Times.

US Yield Curve

News Comments

United States

United Kingdom

China/Hong Kong

Southeast Asia

Other

News Summary

United States

OnDeck (ONDK) to Enter Equipment Financing Market (StreetInsider), Rated: AAA

OnDeck announced today that it will begin offering equipment finance loans to select U.S. small businesses next year, bringing its heralded technology and digital lending expertise to what has traditionally been a slow-moving, opaque, and complicated process.

Who’s On Deck? And why are they in Arlington? We explain. (Biz Journals), Rated: AAA

At 2 p.m. on a Friday in mid-October, it’s judgment day for 13 small companies from across the country.

The plaintiff is On Deck Capital Inc., a publicly traded online small business lender based in New York that has sued each of the 13 companies for not repaying loans. Its choice of setting: the Arlington General District Courthouse.

New SoFi Campaign Aims To Destigmatize Debt and Financial Insecurity In Powerful “Money Talks” Video (PR Newswire), Rated: AAA

SoFi today launched a campaign showcasing some of its members’ most intimate stories around their personal struggles with money. Produced in collaboration with director Tatia Pilieva, the filmmaker most notably known for her sensational short film ‘First Kiss,’ the video captures twelve SoFi members, strangers to each other, meeting for the first time to have open-ended, unfiltered conversations about their lives, their money, and their views for their futures.

The video, along with more about the members featured in the video, are now live at 

US Yield Curve Inverts; Spreads Widening on New FinTech Deals (PeerIQ), Rated: AAA

Core CPI rose by 2.2% keeping the Fed on track to raise interest rates next week for the fourth time this year. The market-implied probability of a rate hike next week is ~77%, although the rate hike path in 2019 remains uncertain. The US yield curve saw its first post-crisis flatteningwhich we will look at in greater detail below.

US Yield Curve Inverts for the First Time Post-Crisis

The US yield-curve saw its first inversion post-crisis as the spreads between the yields on 3-year and 5-year Treasuries fell to -1 bps. The spread between the yields on 3-month and 10-year treasuries has been an accurate predictor of past recessions. As the chart below shows, there have been 6 recessions since 1970 after the 3-month – 10-year curve inverted. Currently, the 3-month – 10-year curve is 49 bps away from inversion, but markets are watching every part of the yield curve closely.

Source: Federal Reserve, PeerIQ

Spreads are Widening on New FinTech Deals

LendingClub and CommonBond are out with new securitizations. KBRA has rated the tranches on LendingClub’s latest $272 Mn deal CLUB 2018-P3 A-, BBB, and BB. The $300 Mn collateral pool consists of 17,825 Prime loans with an average balance of $16.8 k, a weighted average coupon of 14.58%, and a weighted average remaining term of 48 months. The weighted average FICO score of the borrowers is 703. The deal has an initial O/C of 9.2% and an excess spread of 9.1%. Both the O/C and excess spread are the lowest for LC’s 2018 prime deals. This deal priced 27-50bps wider than LC’s prior deal in September due to market volatility and widening structured products spreads, according to DebtWire.

More Americans are making no weekly purchases with cash (Pew Research), Rated: AAA

Entegra Bank Chooses Velocity Solutions to Power Its Small Business Digital Lending (deBanked), Rated: A

Velocity Solutions announced today that its Akouba digital lending platform was selected by Entegra Bank to power the bank’s digital lending for its small and medium-sized business customers. Akouba provides community and regional banks with origination and underwriting services.

LoanStreet Signs Up Workers Credit Union to Use Fintech Loan Participation Platform (Crowdfund Insider), Rated: B

LoanStreet, a Fintech “loan participation platform,” has signed up Massachusetts-based Workers Credit Union to its growing network.

Lending Express Appoints Former Maple Founder Ofer Ariel to Chief Product Officer; Promotes Daniel Katz to Chief Operating Officer (PR Newswire), Rated: B

Lending Express, the technology company dedicated to increasing access to funding for small businesses, today announced the promotions of Ofer Ariel and Daniel Katz to Chief Product Officer and Chief Operating Officer, respectively. This announcement follows a period of impressive growth for the company, and is indicative of its commitment to provide best-in-class service to both its customers and partners.

United Kingdom

RateSetter Announces 2017-18 Revenue Growth of 47% (Crowdfund Insider), Rated: AAA

UK based peer-to-peer lender RateSetter announced last week the results of its 2017-2018 financial year, which ended on March 31, 2018. The lending platform reported that revenues were up by 47% (which was £34.3 million) from the previous year (£23.4 million). The company noted that the year-end, there were 44,441 active investors on the platform with loans under management of £700 million.

Funding Circle fund expecting lower returns (AltFi), Rated: AAA

A hit from its European Investment Bank transaction as well as higher UK loss rates have prompted a fall in expected returns for the Funding Circle SME Income fund.

The £332m Funding Circle SME Income Fund saw a fall in its net asset value (NAV) of 1.4 per cent in November as the investment trust’s board said it expected returns for the full year would be lower than previously anticipated owing to a higher expected rate of defaults among certain loan pools.

Orca opens waiting list ahead of 2019 IFISA launch (P2P Finance News), Rated: A

ORCA has opened a waiting list for investors interested in its self-select portfolio and Innovative Finance ISA (IFISA), with plans to launch both products in the first quarter of 2019.

The peer-to-peer lending analysis and investment platform, which first revealed its plans to launch a tax wrapper to Peer2Peer Finance News in October, said the Orca ISA will allow investors to hold multiple P2P loans from different providers in one tax wrapper.

It will offer interest of up to 6.5 per cent.

Transferwise – the power of partnerships (Fintech Futures), Rated: A

Cross-border payments were ripe for disruption and doing more than most to shake up things is peer-to-peer (P2P) specialist, Transferwise. Its number of partnerships with banks is multiplying while, in parallel, it is adding settlement options, most recently for direct access to the euro payment infrastructure through a euro settlement account with the Bank of Lithuania.

At present, with one notable exception, the partner banks that have been announced are challenger or other low-end players. However, it now claims over four million people around the world using its service to transfer over £3 billion each month. In the UK, global head of partnerships, Stuart Gregory, says its share of consumer international transfers is around 15%, putting in on or close to a par with some of the largest UK banks.

P2P property lending platform completes £10m investment round (AltFi), Rated: A

Peer-to-peer property lending platform BLEND Network has completed a £10m late-seed round of investing.

N26 Metal Now Available in the UK (coverageR), Rated: A

N26, the provider of mobile banking services which launched in the UK last month with a free account, is now offering N26 Metal – its first premium membership for UK customers.

For the price of £14.90 per month, Metal members get access to an exclusive partner program, dedicated customer service, and worldwide travel insurance provided by Allianz. In addition, members benefit from free ATM withdrawals in pounds, free payments in any currency, free withdrawals worldwide, and LoungeKey airport access in over 1k destinations.

This ex-Googler wants to help high street banks be more like Monzo (Yahoo! Finance), Rated: A

The head of innovation at one of Britain’s big high street banks told me earlier this year that he has a mantra when approaching a new problem: “What would Monzo do?”

Traditional banks are struggling to keep pace as Monzo pushes the boundaries. The startup sends smartphone push alerts when you spend money, knows when you’re abroad, lets you freeze your debit card if lost, and offers chatbot customer service — all through the app.

Onfido Sees 342 Pct Sales Growth In 2018 (PYMNTS), Rated: A

Onfido, the global identity verification company, announced Tuesday (Dec. 18) that it achieved 342 percent sales growth in 2018 compared with 2017 and that it has a four-year growth rate of 3,857 percent.

Starling Bank’s Megan Caywood jumps to Barclays’ ship (Fintech Futures), Rated: B

Megan Caywood, Starling Bank’s chief platform officer, is joining Barclays, as she handed in her notice a couple of weeks ago, according to TechCrunch.

China/Hong Kong

How a Chinese anti-virus software maker builds a fintech firm to wrestle with giants (TechCrunch), Rated: AAA

360 Finance,  an online consumer loan platform that spun off from China’s anti-virus service giant 360 Group, has joined a raft of Chinese fintech companies to go public in the U.S. over the last two years.

The company priced its initial public offering at $16.50 per share last Friday, raising $51 million by selling 3.1 million American depositary shares.

Source: TechCrunch

You’ve applied for a Virtual Bank license, what’s next? (Hubbis), Rated: AAA

Hong Kong is preparing for the arrival of virtual banks (VB) — pure digital players that offer banking services solely through digital channels without bricks-and-mortar branches. In an exclusive article from Synpulse we discover the challenges associated with virtual banking.

What is your differentiating proposition?

With HKMA’s recent announcement of receiving 29 applications for VB, competition is expected to be intense.

Focus on Customer Needs

Basic banking services are about fulfilling three main needs of the customer:

  • How do I pay or get paid?
  • How can I borrow?
  • How do I grow or protect my savings?

Capitalize on strong partnerships

FinTechs have traditionally excelled in one particular area (e.g.p2p lending, remittance and FX conversion).

Avoid a Pure Discount Model

VBs can leverage their lower operating costs to provide lower fees, higher deposit rates or other price incentives to attract customers. However, without a clear differentiating proposition, a pure low-cost play will not be sustainable.

Jiayin, a Top Player in P2P Lending Business, Files for $ 57.5 Million IPO on Nasdaq (Capital Watch), Rated: A

A leading individual financial marketplace, Jiayin Group Inc., is seeking to raise up to $57.5 million in an initial public offering on the Nasdaq Global Select Market in New York.

ByteDance registers fintech trademarks (Technode), Rated: A

In July, Jinri Toutiao launched a fintech product named Safe Lending. Up to 20,000 users were permitted to borrow up to RMB 200,000 (around $30,000) per person per day. The company claimed the Bank of Nanjing was one of its loan partners.

The product became the subject of investigations by the media in September. ByteDance later shuttered the online money lending service, while thousands of Chinese P2P lending companies shut down in the second half of the year.

PINTEC Partners with China National Investment & Guaranty Corporation to Develop Digital Lending Technologies (Markets Insider), Rated: B

Pintec Technology Holdings Ltd. (“PINTEC”) (NASDAQ: PT) today signed a strategic cooperation agreement with China National Investment & Guaranty Corporation (“I&G”), a leading enterprise in China’s guarantee industry. The two sides will jointly develop the next generation digital lending technologies and nurture a dynamic credit financing ecosystem for small and micro-sized enterprises in China.

European Union

Online Lender Creditshelf Partners with CrossLend to Offer First Digital Securitization of Loans (Crowdfund Insider), Rated: AAA

Germany based Fintech creditshelf Aktiengesellschaft, an SME financing platform, is launching a new partnership with CrossLend to offer the first digital securitization of SME loans in Germany.

A Visit to Crowdestor in Riga (P2P Banking), Rated: A

On invitation of Crowdestor I travelled to Riga and met the founders of Crowdestor Janis Timma and Gunars Udris. Crowdestor is a Latvian p2p lending platform for SME loans. They launched a year ago. Loans are typically for terms of up to 18 months and interest rates are quite high – the current loan offer by a transportation company seeking expansion capital carries 17% interest rate. The Crowdestor website is available in English, German and Portuguese language. Currently most investors on the platform are Germans, followed by Spanish investors.

Funding Options: From Fintech Petting Zoos To SME Lending Sanctuaries (Forbes), Rated: A

Both financial institutions and fintech startups have made serving SMEs a priority in 2018. However, despite business current accounts like Mettle being created this year, online comparison marketplace Funding Options has helped millions of firms across Europe, especially those that cannot get traditional bank lending because they are early-stage, high-growth or in difficulty, since its launch in 2012.

International

Finastra announces Eric Duffaut as President and Global Head of Field Operations (RealWire), Rated: A

Finastra has appointed Eric Duffaut as President and Global Head of Field Operations. Based at Finastra’s London Headquarters, Duffaut will take responsibility for the company’s entire go-to-market organization including global sales, services and consultancy, as well as overseeing the Finastra partner ecosystem.

Strengthening the Spread: ETHOS Now Live on Nitrogen Network (CoinTelegraph), Rated: A

Token of Ethos.io, a leading cryptocurrency wallet provider and Blockchain Financial Services (BFS) platform, has been officially listed on Nitrogen Network, a new decentralized peer-to-peer crypto lending network.

Nitrogen Network enables market participants to lend and borrow cryptocurrencies on their own terms, all while maintaining control of their holdings and private keys. This supports effective portfolio management and a diverse range of investment views across a wide variety of crypto assets.

Australia

As banks become stricter with lending, could your HELP debt get in the way of getting a home loan? (ABC.net.au), Rated: AAA

As banks rein in lending in the wake of the banking royal commission which revealed “irresponsible lending is endemic in Australia”, those who might have easily secured a home loan a few years ago now face much more stringent criteria.

Banks are looking more carefully at expenses and debts which, for 2.7 million Australians, will include a HELP (formerly HECS) debt.

India

NBFC Vivriti Capital secures Rs 200 Cr from Creation Investments in Series-A equity funding (Your Story), Rated: AAA

Vivriti Capital, a Chennai-based lending platform for corporate entities, has raised Series A equity funding of Rs 200 crores from Creation Investments, an investment management company focused on financial services.

Crowdfunding – A Brief Overview Of The Regulatory Framework (Mondaq), Rated: A

3. Peer-to-Peer Lending or Debt Crowdfunding: Peer-to-Peer Lending (P2P lending) is a form of crowdfunding used to raise loans which are re-paid along with interest. It can be defined as the use of an online platform that matches lenders with borrowers in order to provide unsecured loans. The borrower can either be an individual or a legal person requiring a loan. The interest rate may be set by the platform or by mutual agreement between the borrower and the lender. Fees are paid to the platform by both the lender as well as the borrower.2

4. Equity Crowdfunding:

The SEBI Consultation Paper furnishes proposals for a regulatory framework governing procedure of Security based Crowdfunding methods for Start-ups and Small and Medium Enterprises (SMEs).

The Directions define a “Non-banking financial company – Peer to Peer Lending Platform”4(NBFC-P2P) as a non-banking institution which carries on the business of a Peer-to-Peer Lending Platform. Peer-to- Peer Lending Platform5 has been defined as an intermediary providing the services of loan facilitation via online medium or otherwise, to the participants6(a person who has entered into an arrangement with an NBFC-P2P to lend on it or to avail of loan facilitation services provided by it). Non-banking institutions other than companies have been prohibited from undertaking the business of Peer-to-Peer Lending platform.7 The Directions provide the scope of activities, prudential norms (the aggregate loans taken by a borrower at any point of time, across all P2Ps, is subject to a cap of Rs.10,00,000/-), operational guidelines, inter alia other regulations.

Southeast Asia

Why the ASEAN P2P lending market will avoid the Chinese pitfalls (ASEAN Today), Rated: AAA

To say that 2018 was a rough year for peer-to-peer (P2P) lending businesses in China would be a gross understatement. It was nothing short of a bloodbath, mirroring in many ways the US sub-prime mortgage crisis of 2008-09.

China, despite its economic power, shares the following crucial features with smaller markets in South and Southeast Asia:

  • A large percentage of small-to-medium enterprises (SMEs) and individuals without access to traditional banking services
  • High mobile penetration among the population
  • Easy access to investor funds, both domestic as well as international

The Southeast Asian approach to P2P lending regulation is more proactive than the Chinese model

In the heydays of P2P platforms in China, the authorities pursued more of a “wait and watch” approach. In marked contrast, the regulatory bodies of Southeast Asian economies have adopted more pro-active steps to regulation.

Korea’s digital banks have two speeds: fast and faster (Asia Money), Rated: A

The average internet speed in South Korea is 26.7 megabits per second, faster than anywhere else in the world, according to French virtual private network developer Le VPN.

No Korean bank has ever been in the mix for this much-coveted prize. Nor did a single Korean firm appear in the latest Forbes rankings of the world’s 50 most innovative fintech companies. Indeed, it’s hard to identify a single well-known and home-grown fintech brand. There’s no Korean answer to, say, China’s Ant Financial, or Singapore-based ride-sharing-to-food-delivery service Grab.

OJK Pledges to Announce Names of Illegal Fintech Firm (Tempo), Rated: A

The Financial Services Authority (OJK) committed to monitoring legal and registered financial technology (fintech) companies of peer-to-peer lending or online loan as an effort to maintain the security for consumers.

Eurasia

Russia Is A Top Five Leader Of Digital Banking In Europe (Forbes), Rated: AAA

Because of the lack of legacy IT infrastructure within banks in Russia, the country has been listed in the top five leaders of digital banking in Europe, according to a new Deloitte and ID Finance report.

Latin America

Vitacon innovates again and launches an investment opportunity starting at USD250 with return of up to 12,8% per year (PR Newswire), Rated: AAA

Vitacon, a leading construction company that is revolutionizing the way people live in São Paulo, is launching one more investment opportunity for people seeking new options for earning income and diversifying their portfolios. The company, which for the past nine years has been incentivizing the shared economy in its residential developments, is launching the possibility for any investor to invest directly USD250 in a CD, a fixed income security issued by Banco Topázio, with a 24-month maturity, which allows for annual yields of up to 12.8%.

This new method, P2P Lending, is similar to one introduced in 2015, when Vitacon launched the first real estate crowdfunding, which surpassed expectations and created an international benchmark in the field, raising 28% above what was expected for the construction of the VN Cardoso de Melo building in a very prime location of São Paulo, scheduled for delivery next year.

Authors:

George Popescu
Allen Taylor

The post Thursday December 20 2018, Daily News Digest appeared first on Lending Times.

Thursday December 6 2018, Daily News Digest

Consumer Spending

News Comments Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018. Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019. Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest […]

Consumer Spending

News Comments

United States

United Kingdom

International

Southeast Asia

Other

News Summary

United States

SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA

Late Friday Bloomberg reported that SoFi was cutting 7% of its staff, or around 100 jobs, in the company’s mortgage department. This is due to a change in strategy as to how they underwrite mortgage loans. Rather than underwrite loans themselves, as they have done since launching their mortgage business back in 2014, they will outsource the underwriting to a partner.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (“CLUB 2018-P3”). This is a $272.40 million consumer loan ABS transaction that is expected to close December 13, 2018.

The transaction has initial credit enhancement levels of 30.87%, 22.80% and 9.70% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.

This transaction is LendingClub Corporation’s eighth rated sponsored securitization, fourth of 2018 and the fifth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com.

Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA

Real estate marketplace lender Money360 announced on Monday it has surpassed $1 billion in loans originated and closed since inception. The announcement comes just 11 months after the lending platform revealed it had hit $500 million.

Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA

US Q3 GDP showed 3.5% annualized growth, well above potential growth of 2%. Growth slowed from the blistering 4.2% pace in Q2 due to rising inventories and lower consumer spending:

Source: WSJ, PeerIQ
Source: VantageScore, PeerIQ

LendingTree Debt Report November 2018 (LendingTree), Rated: AAA

Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.

In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.

43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A

For the week ending Dec. 2, 2018, the share of borrowers with rates under 5% was the highest in two months, which may lend some support to a weakening housing market.

Source: LendingTree
Source: LendingTree

LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A

LendingTree today released its State Migration Study on where Americans are interested in moving. The study looked at where people moving out of state are going and discovered that of the 12.1 percent of homebuyers across the country who change states, most plan to head south.

Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states.

Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state.

Source: LendingTree

October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA

October was a big month for Reg CF campaigns, according to the StartEngine Index. In fact, October booked the most money raised using the crowdfunding exemption since the rule became actionable in May of 2016.

According to StartEngine, $10.9 million in funding was raised. Until October came along, this past July held the top spot at $10.7 million. The Index indicates that Reg CF has now raised $151.7 million since inception. The Food & Beverage industry remains the most popular sector to use Reg CF followed by Tech.

Source: Crowdfund Insider

Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA

Installment payments have been around for seemingly forever but a new crop of fintechs are offering it with a twist: the ability to pay off smaller purchases in installment payments that in many cases are interest-free.

And it appears to be resonating with scores of U.S. consumers judging from the brisk business installment payment services like QuadPay.com enjoyed during the kick off to holiday shopping season this past Thanksgiving weekend. David Sykes, chief operating officer at QuadPay.com said 35% of online Black Friday sales for one large merchant customer came via QuadPay. On average Sykes said its service accounts for around 20% of all the online transaction from its roughly 500 e-commerce partners.

QuadPay.com makes money via the merchant, getting a cut of the sales generated by its service. That enables it to offer interest-free loans to consumers wanting to purchase everything from Uggs to underwear. Sykes said the average value of the orders on the platform is $150. QuadPay takes 25% of that on day one and then spreads out the remaining payments every two weeks. Because the average installment payment is around $37 there isn’t too much risk of customers defaulting on the loan.  To prevent default it won’t let a customer use the service again if they were ever late with a payment. The executive noted QuadPay approves 92% of all applicants.

How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A

In Business Insider Intelligence’s second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank’s mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.

Source: Business Insider

Why Wealthfront is offering free financial planning (Financial Planning), Rated: A

Wealthfront is offering its planning services for free, effectively unbundling its software, and giving millions of Americans access to a financial roadmap.

The second largest independent robo is betting the firm can steer users into fee-based accounts after they interact with its software to come up with a financial plan. The freemium software uses the firm’s automated advice engine, Path, according to the firm.

Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A

Building a great service is hard but not impossible. But building a great service and making it available for free — that’s really hard.

Credit Karma seems to have figured out a way to do both. The company, with 85 million members in the U.S. and Canada, continues to roll out free, innovative financial products to its user base. It all began 11 years ago with a simple premise: to provide users with free access to their credit scores. From there, the company has rolled out a bunch of new products, including ID monitoring, tax preparation, a financial chatbot, auto finance, and unclaimed money.

Betterment launches tool to optimize cash savings (Tearsheet), Rated: A

Automated investment advisor, Betterment is rolling out “Two-Way Sweep”, a tool that can automatically “sweep” excess money from customers’ bank accounts into a Betterment account optimized to provide better returns for cash.

What’s behind this new product: Studies show that only one in three millennials is investing in the stock market. That means they’re holding a high percentage of cash. In fact, Betterment sees 30 percent of customers with cash balances of $20,000 on average. This excess in savings earns little to no interest. Betterment’s Two-Way Sweep is intended to take the hesitation out of deploying more money into investments by automating the process.

CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A

CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.

OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A

Chicago-based fintech firm OppLoans has been honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2019. This marks the second year in a row that the personal lender has been named to this prestigious list in the Small & Medium Business category. The Employees’ Choice Awards program, now in its 11th year, is based solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies on Glassdoor, one of the world’s largest job and recruiting sites.

Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A

According to 2017 statistics from the FDIC, 16 percent of households in Mississippi are unbanked, choosing instead to use “predatory services” like corner store check cashing in their neighborhoods.

Allen founded her first startup, an app development shop, while still in college. After moving to Silicon Valley, Allen realized it wasn’t just rural communities that were underserved by banks. Inner city areas across the country, most of which are home to majority Hispanic and African-American populations, are also affected. An FDIC survey found that more than 15 million adults in the U.S. go unbanked.

In 2016, Allen founded CapWay with co-founder and fellow Mississippian Timothy Lampkin. The mobile-first platform is aimed at younger generations (think older millennials and Gen Z) in those unbanked communities to help them break out of the predatory economy cycle.

Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B

Finicity, a provider of real-time financial data aggregation and insights, announced today it is working with mortgage banker Princeton Mortgage to automate borrower asset verification for lenders. The agreement will provide Princeton Mortgage loan officers and borrowers with a faster, simpler loan origination experience that reduces both paper chase and headache.

NBKC Bank fintech accelerator participant wins $ 1M (Biz Journals), Rated: B

Onward Financial Inc., a member of the first cohort in NBKC Bank’s Fountain City Fintech accelerator program, won a $1 million award from the Communities Thrive Challenge, which is put on by The Rockefeller Foundation and the Chan Zuckerberg Initiative.

United Kingdom

P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA

Back in 2005 Zopa quietly launched their P2P lending platform in the UK, the world’s first. It was the start of a lending revolution that has moved on to all corners of the globe. Today, a new chapter begins as the company announced that regulators have approved Zopa’s banking license. With that Zopa achieves another first: becoming the world’s first combined peer to peer lending platform and digital bank.

Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA

Zopa explained that this is called the “mobilisation’ phase” as regulators put some restrictions in place. A full licence will be granted once it meets the conditions set by the regulators.

Zopa said it will begin its new service next year. The digital bank will include options such as a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), credit card and a money management app.

Pointing to a statement by the FCA that just “40% of UK adults have confidence in the financial services industry,” Zopa sees opportunity in becoming a digital bank unencumbered by green-screen legacy tech and unnecessary brick and mortar branches.

Zopa explained it would redefine banking with the following services:

  • Giving customers a fair deal as standard – with no catches like sign-up offers that aren’t available to existing customers or hidden fees and charges.
  • Making sure money management is simple and a real person is available to discuss
  • Going beyond ‘good enough’

Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A

ZOPA has insisted its peer-to-peer lending rates will not be dictated by the savings products on offer when its bank launched.

It currently offers target returns of 4.5 per cent on its Zopa Core product and 5.2 per cent on Zopa Plus.

Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A

Other companies expected to be promoted to the FTSE 250 are peer-to-peer lending platform Funding Circle, the retirement housebuilder McCarthy & Stone and the investment trusts Smithson and Woodford Patient Capital.

Funding the future of the UK PLC (Business Leader), Rated: A

Looking at 2017, we saw some encouraging trends and one of them is in terms of diversity and choice. We saw peer-to-peer lending grow at over 50%. It’s obviously coming from a smaller base as it’s a reasonably new form of lending, but 50% growth is a very strong outcome.

Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A

Tandem Bank has announced its Journey Card has assisted nearly three-quarters (72 per cent) of its users to first-time credit or is helping individuals with poor credit history get back on track.

Due to the higher risk users it targets, the credit card carries a reasonably expensive representative APR of 24.9 per cent.

Tandem says it hopes to help the 43 per cent of Journey Card holders who have poor credit history, some of whom have defaulted with other providers.

CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A

Peer to peer property lender CrowdProperty is now disclosing their performance metrics using Brismo’s (formerly known as AltFi) standardized reporting methodology. CrowdPropert states that it is the first property development platform to incorporate the Brismo process which is described as an independent standard.

UK housebuilders back new online property listing start-up (Financial Times), Rated: A

Some of the UK’s largest housebuilders are backing a new property portal that will launch next year in the latest attempt to challenge the two dominant market leaders, Rightmove and Zoopla.

Barratt Developments, Bovis, Persimmon and Redrow have signed up to list their homes with the start-up Rummage4Property, as have Countrywide and about 30 other estate agency groups.

ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending (ABL) has supported a highly experienced Management Buy In (MBI) team, led by Paul Hampton, with a £2m invoice discounting facility to support Premier House Investment’s acquisition of Ralph Coleman International Ltd (RCI) and provide ongoing working capital, paving the way for the company’s exciting expansion plans.

KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A

KAMBO is expanding beyond desktops to become accessible on our most coveted devices, our smartphones. With the introduction of two native apps, KAMBO’s lending platform will become one of the most flexible and diverse of its kind.

The KAMBO app is now available on iOS and Android, making it the first crypto-lending platform to have an app in the App store.

LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B

Ingard, a compliance network, brokerage, and lending packager specialist, announced on Tuesday online lending platform LendInvest has joined its buy to let panel. According to Ingard, members may now access the lender’s buy to let range direct by registering through LendInvest’s online portal

China

Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA

Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”) is pleased to announce that OneConnect, a subsidiary of the Group, ranked first in one of the world’s most authoritative machine-reading comprehension challenges — the Stanford Question Answering Dataset 2.0 (SQuAD). GammaLab Institute of Artificial Intelligence (GammaLab), owned by OneConnect, scored 83.435, close to the human performance level of 86.831, way ahead of other companies in the challenge.

Another scenario is internet arbitration in universal financial inclusion. Small loan companies tend to turn to online arbitration, which is expensive and takes time to resolve, under the current peer-to-peer lending market. With the reading comprehension skill of GammaLab, the arbitrator will finish a case quicker, reducing the cost for arbitration.

International

International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA

Mintosleads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 473 million Euro.

I removed Unilend, as the platform has closed and the company has gone into receivership.

Source: P2P Banking

CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, announced today the introduction of its Total Home Value for Originations AVM solution.

The new Total Home Value for Originations solution is specifically calibrated and packaged to improve efficiencies when performing property valuations during the purchase and refinance loan underwriting process.

Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A

According to EY study, fintech startups have raised $41.7 billion in the first half of 2018 across the globe. So, what fintech strategies need to be implemented to transform the consumer experience on the market?

  • Consumers first
  • Rebuilding trust
  • Lack of credibility
  • Partnership instead of competition
  • Improving the quality of lives

Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B

Nasdaq has acquired Quandl, a Toronto-based provider of alternative and core financial data. Terms of the deal were not disclosed.

Australia

Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA

Helio Lending is the first independent crypto lending company to launch on Australian shores according to reports.

The company claims to be in the position to offer 50% more spending power to clients than they would have by holding on to their crypto assets.

Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A

Lodex, Australia’s first auction-style loans and deposits marketplace leader, today announced it has secured capital investment from Lakeba Group, an established Australian technology innovator.

India

India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA

India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%, which also throws a huge opportunity for India to not only make best out of financial services sector but also to disrupt it.

Southeast Asia

How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA

UberWeWorkSaudi Arabia. The biggest startup stories in 2018 shared one long and influential thread: Japanese conglomerate SoftBank, its $100 billion tech investment fund, and founder Masayoshi Son.

The Vision Fund is backed by several prominent investors, including Apple and the government of Abu Dhabi, but its largest financial partner is Saudi Arabia’s sovereign wealth fund. The country’s government, under crown prince and de facto ruler Mohammed bin Salman, contributed 45 percent of the $100 billion, and in October announced plans to put another $45 billion into a second Vision Fund.

P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA

Peer-to-peer (P2P) lending has emerged as a popular alternative financing option for small and medium enterprises (SMEs) in Southeast Asia. In 2016, P2P lending generated US$115.01 million, which accounted for more than half of total market share of Southeast Asia’s alternative financing market. In an evolving financing landscape, P2P lending complements the services banks provide and support the region in realising its growth and development potential. The very fact that investment in the region’s startups tripled from US$2.52 billion in 2016 to US$7.86 billion in 2017 is a testament of the vast potential in Southeast Asia’s FinTech startups.

Businesses, largely SMEs, benefited from such platforms too. According to a Deloitte report, SMEs contribute to 40% of Southeast Asia’s gross domestic product (GDP) and hiring 70% of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, especially in terms of financing. This is due to strict banking regulations imposed after the 2008 global financial crisis, which have made banks and most financial institutions increasingly risk-averse. This is evidenced by McKinsey Global Institute’s report stating that 39 million Southeast Asian SMEs (or 51%) lack access to credit.

Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA

Malaysia’s securities regulator may license more operators of equity crowdfunding (ECF) and peer-to-peer (P2P) lending platforms next year, after current operators raised more than 200 million ringgit (US$48.25 million) for small firms since the industry was legislated in 2015, according to its chairman.

Singapore’s Milieu Insight raises US$ 730K to enhance market research platforms (e27), Rated: A

Singapore- and Thailand-based marketing software startup Milieu Insight has announced that it has raised S$1 million (US$730,000) from a group of private investors including former Rippledot Capital Director, Ravi Ravulaparthi.

Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A

HonestFund (CEO: Sanghoon Seo) has announced that the company, one of the largest marketplace lending players in South Korea, has successfully raised $12 million Series B investment.

Investment was led by Korea’s leading VCs and investment companies, such as Dunamu & Partners, MurexPartners, KB Investment, TL Asset Management, Bass Investment and HB Investment. This brings HonestFund’s total investment to $21 million, making it one of the most valuable Fintech companies in South Korea.

Canada

How experimental tech drives TD Bank’s mobile app (American Banker), Rated: AAA

While many banks have sought to employ experimental technologies when dealing with customers, including predictive virtual assistants, geolocation and advanced data analytics, few have brought all those pieces together to the degree used by TD Bank.

The bank has used such technologies live in production and won significant customer adoption, with its mobile app becoming No. 1 in the finance category in Canada for both iOS and Android. Mobile customers use the app 17 times a month on average, a figure that is growing.

OnDeck to merge Canadian operations with Evolocity Financial Group (Seeking Alpha), Rated: A

OnDeck (NYSE:ONDK) will combine its Canadian lending operations with Evolocity Financial Group, a private, Montreal-based online small business lender, to create OnDeck Canada.

Africa

Peer-to-Peer Lending as a Means of Propelling Startup Growth (Modern Ghana), Rated: AAA

Capital is the livewire of any business, especially for startups and established small businesses. Hence, they are always seeking for some additional funding that is too small for an angel investor to get a return for their effort. Banks also think it’s not worth their time. That’s where peer-to-peer (P2P) lending is working to fill that lending gap. This model may be a solution for many small businesses that are struggling with just tapping smaller funding amounts.

Authors:

George Popescu
Allen Taylor

Thursday November 8 2018, Daily News Digest

LendingClub total loans

News Comments Today’s main news: LendingClub loan origination estimates better than expected, losses widen. Zopa closes 60M GBP in funding. Landbay hits 200M GBP lending landmark. N26 expands in Europe. BBVA, Red Electrica Corporation complete blockchain-based syndicated loan transaction. Today’s main analysis: Q3 earnings for GreenSky, LendingClub, OnDeck. Today’s thought-provoking articles: How GreenSky is changing financing. LendingTree’s mortgage offers report […]

LendingClub total loans

News Comments

United States

United Kingdom

International

Other

News Summary

United States

LendingClub profit beats estimates on record loan originations (Reuters), Rated: AAA

Online lender LendingClub Corp (LC.N) reported an adjusted third-quarter profit that edged past analysts’ estimates and raised its full-year earnings forecast on Tuesday, helped by record loan originations and higher transaction fees.

The company said it now expects 2018 adjusted earnings of between $89 million and $94 million, up from a previous range of $75 million to $90 million.

LendingClub loss widens on higher expenses (Reuters), Rated: A

Online lender LendingClub Corp’s quarterly net loss widened, due to higher expenses for outstanding legacy issues.

The San Francisco-based company’s net loss fell to $22.8 million, or 5 cents per share, in the third quarter ended Sept. 30, from a loss of $6.5 million, or 2 cents per share, a year earlier.

LendingClub to expand in Utah (Pulse.com), Rated: B

The Governor’s Office of Economic Development announced 

How GreenSky, In-House Financing, and Blockchain Are Transforming the World of Credit (Premier Gazette), Rated: AAA

Fifty years ago, if you needed a loan for yourself or your business, you would typically walk into a brick-and-mortar bank, fill out a bunch of paperwork, talk to a loan officer, and wait several days or weeks to find out if you were approved. Today, this story has changed, and it’s going to look even more different in the future.

Borrowers seem to like GreenSky’s new way of obtaining credit. So far, the fintech company has served more than 1.9 million customers, providing them over $13 billion. Perhaps GreenSky’s most promising distinction is that it has also been consistently profitable with its new way of providing loan services. Its transaction volume has grown steadily from $2.1 billion in 2015 to $3.8 billion in 2017. During the same time, it grew its merchant base from 5,000 to nearly 13,000. Clearly, consumers in the 21st century like the new way of borrowing.

GreenSky estimates the home improvement industry, one of its key targets, to be just south of $350 billion annually. At a transaction volume of $3.8 billion, the fintech company has roughly 1% of the market.

Source: Premier Gazette

The APR’s for GreenSky’s products tend to fall between 5% and 24%, depending on the borrower’s credit profile. Loan terms vary from 42 to 90 months, and customers can borrow up to $55,000. GreenSky does not cater to subprime borrowers.

Late in 2018, GreenSky announced a new partnership with American Express.

Roundup of Q3 2018 Earnings: GreenSky, OnDeck, LendingClub (Lend Academy), Rated: AAA

OnDeck posted gross revenues of $103 million, up 8% from the previous quarter and 23% from the prior year period. OnDeck is benefiting from higher interest income due to rate increases as well as their origination growth while being able to decrease funding costs. Effective interest yield was 36.5%, up from 33.1% last year.

Source: Lend Academy

Net income came in at $9.8 million for the quarter, up from a loss of $4.1 million from the prior year period.

Source: Lend Academy
  • Gross revenue of $392 million to $396 million, up from $380 million to $386 million,
  • Net income of $20 million to $24 million, up from $10 to $16 million, and
  • Adjusted Net income of $40 million to $44 million, up from $30 million to $36 million.

GreenSky

GreenSky reported record transaction volume in the third quarter of $1.4 billion, up 33% year over year. Revenue increased 29% to $113.9 million year over year. GAAP net income was $45.7 million.

Source: Lend Academy

LendingClub

Net revenues were $184.6 million, up 20% from the prior year period and originations were $2.9 billion, up 18% from last year. Applications also reached their highest levels, up 30% year over year.

In Q3 2018 GAAP Consolidated Net Loss was $22.7 million, or $7.3 million if you exclude $15.5 million of expenses related to outstanding legacy issues.

Source: Lend Academy

Total loans issued by the company now stands at over $40 billion.

Source: Lend Academy
  • Net Revenue in the range of $688 million to $698 million.
  • GAAP Consolidated Net Loss in the range of $129 million to $124 million, reflecting expenses related to outstanding legacy issues through the third quarter partly offset by higher Adjusted EBITDA guidance.
  • Adjusted EBITDA in the range of $89 million to $94 million.

LendingTree Mortgage Offers Report – October 2018 (Lending Tree), Rated: AAA

October’s best mortgage offers for borrowers with the best profiles (the 95th percentile of borrowers) had an average APR of 4.61% for conforming 30-year fixed-rate purchase loans, up from 4.39% in September. The APR on refinance loan offers increased 22 basis points (bps), to 4.62%.

For the average borrower, the purchase APR for conforming 30-year fixed-rate loans offered on LendingTree’s platform was 5.27%, up 18 bps from September. The loan note rate of 5.14% is the highest rate of the year.

Consumers with the highest credit scores (760-plus, representing the 65th percentile of borrowers) received an average APR of 5.12%, versus 5.42% for consumers with scores of 680 to 719. The APR spread of 30 bps between these score ranges is the same as it was in September. For the average purchase loan amount of $233,938, the spread represents over $15,000 in additional costs for borrowers with lower credit scores over 30 years.

For the average borrower, the APR for conforming 30-year fixed-rate refinance loans increased 17 bps from September to 5.26%. The spread between credit score brackets (760-plus and 680 to 719) remained the same as last month, at 24 bps. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $238,447.

Average proposed purchase down payments fell to $60,361, a decline of about $3,600.

Source: Lending Tree

LendingTree Study Finds Millennials in the South Owe the Most on Their Cars (Benzinga), Rated: A

LendingTree today released its study on where millennials owe the most on their cars.

Key findings

  • Even car loans are bigger in TexasMetros in the Lone Star State dominate the top of the list: McAllenHoustonEl Paso and San Antonio have the highest median auto loan balances for millennials at $23,704$20,925$20,544 and $20,521 respectively.
  • Car capital of the world has the lowest auto debt. Ironically, Motor City has the lowest levels of millennial auto debt on our list with a median debt of $10,841 as well as the lowest average debt of $14,573.
  • Great Lakes area metros shine with the least auto debt. After Detroit, millennials in Rochester, N.Y.Grand RapidsToledo, Ohio, and Cleveland carry the lowest median auto debts, at $12,165$12,429$12,678 and $12,717 respectively.
  • New York and Ogden, UtahThese metros are on opposite ends of the spectrum when it comes to carrying any auto debt at all — New York has the lowest percentage of millennials with auto debt at 41.5 percent while Ogden, Utah has the highest percentage of millennials with auto debt (64.5 percent).

Outside Financial Brings Much-Needed Transparency to Auto Lending (Digital Journal), Rated: A

To prevent the average consumer from being charged more than $1700 in hidden markups on auto loan packages, Outside Financials opens an independent loan marketplace to facilitate transparency in auto lending and auto refinance.

We got a peek at Plaid’s financials, the fintech startup whose valuation has tripled in the past 6 months to as much as $ 3 billion (Business Insider), Rated: AAA

As of October, Plaid told investors it was on track to generate about $70 million over the next 12 months, two people who were briefed on the financials tell Business Insider.

That’s up from the $50 million in revenue the company told investors just one month earlier it was on track to generate, two other people who reviewed Plaid’s financials at the time said.

Fighting financial crime without excluding the underbanked (American Banker), Rated: A

Eugene Ludwig, founder and chief executive officer of IBM’s Promontory Financial Group, said artificial intelligence — already employed to help identify potential anti-money-laundering activity — is getting smarter, and can now be used to identify vulnerable groups of people who have been incorrectly labeled as high risk.

Nerdwallet Wants To Make Comparison Shopping For Financial Services Simple (Forbes), Rated: A

For example, Nerdwallet personal loan product page sorted loans by interest rates.

“All our consumers hated it. They wanted it sorted by monthly payments, which seems odd until you put yourself in their shoes and see what is going on month by month,” Chen said. “We have to meet them where they are. If you start by wagging your finger, that’s a good way to get them to hit the back button on their browser.”

Nerdwallet has three million members and more than 100 million visits each year, Chen said.

InfoSec Governance, Risk, and Compliance Manager (LinkedIn), Rated: B

SoFi is seeking an experienced InfoSec Manager to assist in all aspects of our governance, risk and compliance program.

NRL Mortgage Selects The Riivos Mortgage Lending Application (PR Newswire), Rated: B

Riivos Mortgage, a division of Riivos, Inc., the provider of cloud-based continuous value chain management technology, today announced that NRL Mortgage, an originator serving customers coast to coast, is using the Riivos Mortgage Lending forecasting, planning and reporting application to help them analyze and capitalize on growth opportunities. NRL Mortgage is majority owned by St. Christopher’s Holdings LLC, a privately-owned holding company based in Houston, Texas.

Judge suspends compliance deadline for CFPB payday rule (American Banker), Rated: B

U.S. District Judge Lee Yeakel on Tuesday reversed a previous order from June and granted, in part, the request by acting CFPB Director Mick Mulvaney and two industry trade groups to delay the payday rule’s August 2019 compliance date. They sought a delay to prevent lenders from having to comply with the old rule before the revisions are finalized.

United Kingdom

Zopa, the UK P2P lending company, closes £60M round on path to launching a bank (TechCrunch), Rated: AAA

Obtaining a banking license and then launching an actual new retail bank requires capital. A lot of capital. Enter Zopa, the U.K. peer-to-peer lending company that wants to become a bank, which today is announcing that it has closed £60 million in further funding. Only £16 million is actually new new money, having already disclosed £44 million in August, so this is effectively an extension of that earlier fund-raise.

Landbay reaches £200m lending landmark (P2P Finance News), Rated: AAA

LANDBAY has hailed its quality service and strong broker relationships as it reached the £200m lending milestone this week.

The peer-to-peer property platform, which purely focuses on buy-to-let mortgages (BTL), said it had reached the landmark with a track record of zero defaults.

Atom is intensifying its mortgage push (Business Insider), Rated: AAA

Atom has initially introduced 2- and 5-year buy-to-let remortgage products for landlords that have four to 25 properties. Users will have to pay a 1% loan fee, and the maximum loan term is 25 years.

Source: Business Insider

Older P2P property lenders boast “negligible or zero losses” (P2P Finance News), Rated: A

THE LONGEST running peer-to-peer property platforms are providing investors with high returns and “negligible or zero capital losses,” analysis claims.

Research from P2P analysis firm 4th Way has highlighted 11 lenders who now have a track record of four years or more.

LendInvest seeds newly launched real estate debt fund with £150m (Real Assets), Rated: A

LendInvest has launched a new real estate debt fund with £150m (€171.6m) seed capital from a previous fund.

JAJA SMASHES CROWDFUNDING CAMPAIGN AS IT READIES CREDIT CARD LAUNCH (Fintech Finance), Rated: A

Jaja Finance, the company on a mission to simplify the world of consumer finance, announces that it has already reached its fundraising target of £3m on equity crowdfunding platform Seedrs. The company will use the funds to expand its team and launch its digital credit card, Jaja.

China

Chinese tech CEO predicts ‘exponential’ growth in financial technology (CNBC), Rated: A

Financial technology has reached a tipping point for China’s Ping An Technology and future growth in that area is set to be exponential, according to CEO Ericson Chan.
European Union

N26 Expansion: German Challenger Bank Brings Services to Denmark, Norway, Poland, & Sweden (Crowdfund Insider), Rated: AAA

Germany-based challenger bank N26 is bringing its services to Denmark, Norway, Poland, and Sweden.

“N26 passes on these cost benefits to its customers. N26 partners with the most innovative fintech and traditional financial companies to offer its customers best-in-class products such as TransferWise (foreign exchange), Raisin (savings), Clark and Allianz (insurance), auxmoney (credit) and others.”

International

Banks complete first syndicated loan on blockchain (BBVA), Rated: AAA

BBVA and Red Electrica Corporation have become the first businesses in the world to deliver a syndicated loan using blockchain. The €150m deal, granted by BBVABNP Paribas and MUFG, was reached in record speed using BBVA’s proprietary platform- which is powered by distributed ledger technology.

Seven Businesses That Promise Digital Can Be Ethical (Forbes), Rated: A

In financial services, an industry where trust is a particular issue, Monzo was founded on the idea that there should be an alternative to traditional banking practices. Monzo argues that banks should get rid of punitive fees, do more to ensure customers know exactly what they can expect to pay for an overdraft, and provide greater control over how people spend their money.

Start-up Wagestream has just raised £4.5m for a business it promises will kill off the payday loan sector and the ‘payday poverty cycle’.

Banks should ally with fintechs in battle against payday lenders (PaymentsSource), Rated: A

Bankers who regard payment technology companies such as fintechs as a problem may be missing opportunities.

Alternatives to payday lending are an example. These fintechs provide credit for nonprime customers, such as a recently divorced woman faced with a slew of new expenses. It is pricey credit, but cheaper than payday lenders. Unlike payday lenders, these companies provide credit reporting and reduced rates as a client pays off the loan. Eventually, a successful client qualifies for bank lending and leaves to take advantage of bank interest rates.

Source: PaymentsSource

Report: AI in Fintech (Diplomatic Courier), Rated: A

FinTech has revolutionized the way that banks and insurance companies function. Rather than prioritizing themselves and their services as in the past, banks must emphasize client needs in today’s new technological era. This focus on personalized financial services manifests itself in FinTech—a financial infrastructure for consumer enablement. As FinTech applies data and technology to financial services in an effort to address industry challenges, artificial intelligence is essential to FinTech’s existence and usage.

To read the full report click here for the digital edition.

Crypto Power Player PwC is Assisting on Cred Crypto Lending Platform’s New Stablecoin Project (Bitcoin Exchange Guide), Rated: A

A division of the worldwide accounting and consulting firm PwCis currently working with a new stablecoin project that aims at developing a U.S. Dollar-based coin. The Hong Kong division will be exploring the best practices for issuing new stablecoinsworking with the Loopring Foundation.

Research reveals three tech strategies that will benefit small and midsized financial institutions (Finastra), Rated: B

A new piece of research, sponsored by Finastraand executed by Mercator Advisory Group, shows that small and midsized financial institutions can derive significant benefits to operational efficiency by pursuing three distinct cost-saving strategies: vendor consolidation, cloud delivery, and artificial intelligence. Based on in-depth interviews with C-level representatives of community banks and credit unions with asset size between $200 million and $5 billion, the research gauges attitudes toward and levels of adoption for each strategy.

  • Consolidation of vendors ultimately eliminates the need to maintain and manage multiple systems, and can improve operational efficiency by 20-30%.i
  • Cloud delivery brings numerous benefits including the ability to easily scale system capacity to meet demand.
  • Artificial intelligence (AI), which is the least adopted of the three strategies to date, promises to make processes smarter, faster and more personalized to the consumer. However, in order to reap these rewards, banks must prioritize their vendor consolidation and cloud delivery road maps.

The white paper, titled Landmark Decisioning: Using Vendor Consolidation, Cloud Computing, and Artificial Intelligence to Improve Operational Efficiency, is available here.

Persona and FintruX announce renewed control over personal data (Leaprate), Rated: B

Persona, the blockchain-based solution for identity management,has just announced its partnership with FintruX, the P2P lending ecosystem, to streamline the onboarding process for customers while ensuring they remain in full control over their personal details.

Persona is the first identity management solution developing its own blockchain, as opposed to other projects being developed as ERC20 tokens over Ethereum.

Asia

Funding Societies | Modalku Included in Global List of 100 Leading Fintech Innovators (Markets Insider), Rated: AAA

‘Look at where debt has gone’: MAS chief warns of 3 shifts in global financial risks (Channel NewsAsia), Rated: A

While the fault lines of the last global financial crisis have been mostly addressed, risks remain and have shifted in three ways over the past 10 years, said the Monetary Authority of Singapore’s (MAS) managing director Ravi Menon on Wednesday (Nov 7).

Meanwhile, the extension of credit has shifted from banks to non-banks – one of the areas that have not been given enough attention, said Mr Menon.

Canada

Loop Partners With Equifax to Launch Canada’s First Free Business and Consumer Credit Education Platform (Newswire), Rated: AAA

Equifax Canada and Loop today announced the launch of a credit health and monitoring platform for businesses. Launched at the intersection of Small Business Month and Financial Literacy Month, the new platform empowers Canadian small business owners and entrepreneurs alike, to improve their financial and credit health through easy-to-read credit scores, reports and resources.

Crypto Loans On The Rise – BTC Used As Collateral For Canadian Dollars (Crypto Disrupt), Rated: A

It is now possible to attain a loan for Canadian Dollars (CAD) using bitcoin as collateral. The ability to use crypto as a form of collateral for fiat is a sign of further legitimacy for the sector. More providers are expected to follow suit and offer crypto loans, with a wider range of fiat currencies for a larger range of acceptable cryptocurrencies used as collateral.

Authors:

George Popescu
Allen Taylor

Tuesday October 9 2018, Daily News Digest

LendingClub

News Comments Today’s main news: China Rapid Finance issues regulatory report, board change. H&M invests in Klarna. Tencent drops $180M into Nubank. KKR, Tencent lead $175M investment into Voyager. Today’s main analysis: Gen Z is more optimistic than millennials about home ownership. Today’s thought-provoking articles: The cities in America with the biggest houses. Inside Ameritrade’s integration with WeChat. Unemployment rate […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Startup Credit Kit; 48-year Low Unemployment Rate (PeerIQ), Rated: AAA

The US economy added 134k jobs in September and the unemployment rate dropped to a low of 3.7%  – a level not seeing since the Beatles broke up in 1970. Wage growth came in strong at 2.8%, and raises the specter of inflation down the road.

Point-of-Sale lending continues to grow, with Square now providing instalment loans of up to $10,000 to shoppers who purchase big-ticket items from Square’s merchants. Borrowers can repay in fixed monthly payments over a period of 3, 6, and 12 months with interest rates ranging from0% to 24%. The move puts Square in direct competition with other POS lending services – Affirm, Klarna, Greensky and more.

In regulatory news, the FDIC has received 21 banking applications this year, over twice the number for last year. The FDIC however has approved only 4 of these applications to date.

PeerIQ’s Learning of the Week

This week we look at the performance of LendingClub’s 36-month loans. Over the life of the loans, borrowers with verified income have 140 bps higher losses. This is due to a “selection effect” – namely, LendingClub applies an extra layer of income verification high credit risk borrowers.

Source: PeerIQ

LendingTree Reveals the Cities with the Biggest Houses in America (LendingTree), Rated: AAA

LendingTree compared home sizes across the country, but first, let’s look at some national data. The Census Bureau reports that the median size of new homes completed in the second quarter was 2,412 square feet. Home sizes have leveled off the past few years from a peak of 2,488 square feet in the third quarter of 2015, though homes sizes are generally larger today than they were for previous generations.  Because only a small proportion of the housing stock is new each year, the median size of all homes is lower given a median house age of 37 years.

Key findings

  • Everything is bigger in Texas. Whoever coined this phrase must have been thinking about real estate. Houston leads the list, with Austin and Dallas also in the top five. Besides having a lot of space, Texas has been adding new residents at a steady pace, with the nation’s largest annual population growth between 2010 and 2016. More new homes means larger homes.
  • South equals size. Other Southern cities dominate the top 10, with Atlanta, known for its sprawl, at No. 2.
  • Money talks. The Washington, D.C., area, whose suburbs includes the three wealthiest counties in the country, comes in third. Boston, another wealthy city, shows up at ninth.
  • Show me? The Midwest lives up to its unpretentious reputation by having the most cities with the smallest houses. Missouri’s Show Me State nickname clearly does not refer to houses, with its two largest cities both in the bottom 10.
  • Older is smaller. Cities with older housing stock have smaller houses, including Detroit at  No. 45 on our list.
Source: LendingTree
Source: LendingTree

More Optimistic Than Millennials, Gen Z Is Here to Revolutionize the Housing Market (Property Shark), Rated: AAA

Key takeaways:

  • Gen Z has its eye on homeownership, with 83% planning on buying a home within the next 5 years
  • College debt is the #1 obstacle towards homeownership for Millennials and Gen Z
  • Gen X chooses intergenerational living to care for relatives more often than any other generation
  • Gen Z is willing to compromise on almost anything to keep costs down – but dreams of lots of space and amenities
  • Gen Z to pose serious competition to Millennials on the real estate market
  • Millennials are more realistic about their means, and the most pessimistic about the prospect of homeownership
Source: PropertyShark

Whatever they may see as the most significant hurdle towards homeownership, more than 80% of respondents from all three generations expect to buy a home in the next 5 years. Part of more established family units and with stabilized careers, Gen Xers are the least likely to buy homes in the near future, while Millennials are the most likely – 87% of Millennial respondents expect to enter homeownership within 5 years.

Considering that the oldest of Gen Z are barely 23, it is noteworthy that a whopping 83% see themselves entering the real estate market within 5 years.

Source: PropertyShark

B+E announces sale of Darien TD Bank property for $ 6.9 million (Patch), Rated: A

B+E (Brokers+Engineers), the first brokerage firm and trading platform for net lease (NNN) real estate, today announced the sale of property that is leased long-term to TD Bank in Darien, Connecticut.

Located at 55 Boston Post Road, the +/- 4,380SF location was sold for $6,900,000 at a 5.1% cap rate. The property has +/- 7 years remaining on the lease and was sold to a 1031 exchanger. B+E represented the seller, Chimblo Family Real Estate, LLC.

Real Estate Startup Landis Raises $ 2M in Funding (Finsmes), Rated: A

Landis, a NYC-based marketplace for institutional real estate investing, raised $2M in funding.

The round was led by Signia Venture Partners with participation from Red Swan Ventures, Graph Ventures, and Kima Ventures, as well as the founders of RealtyShares (Nav Athwal), Compass, Floored, Tango, Rypple, and Stanford professor and JetBlue Chairman Joel Peterson.

Fintech firm Curve looking to raise $ 50 million to become the ‘Amazon of banking’ (CNBC), Rated: A

Fintech firm Curve is aiming to raise $50 million in funding, its CEO told CNBC in an exclusive interview, as it looks to get some cash to boost its aim to become the “Amazon of banking.”

Smartphone brand can reflect creditworthiness: FDIC study (American Banker), Rated: A

A new study released Thursday bolsters the case for lenders to use borrowers’ digital footprints in assessing their creditworthiness.

The paper, released by the Federal Deposit Insurance Corp.’s Center for Financial Research, said the data trails people leave online — even down to what brand of smartphone they use — are useful at predicting default rates.

Fed studies rural branch closings (American Banker), Rated: A

For a regulator grappling with what is the right balance in big-bank supervision, the Federal Reserve is also trying to drill down on industry trends at the most micro levels.

The Fed’s top regulatory official, Vice Chairman of Supervision Randal Quarles, gave wide-ranging remarks Thursday on the central bank’s efforts to gather and understand data about the community banking sector.

AFR Promotes Brandao to President and Packer to COO (Business Insider), Rated: B

American Financial Resources, Inc. (AFR) is pleased to announce two key executive promotions. Laura Brandao has been promoted to President and Bill Packer is now Chief Operating Officer of the NJ-based leading niche lender.

United Kingdom

Are there too many property investment platforms? (Development Finance Today), Rated: A

A recent poll conducted by Development Finance Today revealed that 65% of industry professionals believed that there were too many property investment platforms in the market.
Source: Development Finance Today

I’m Stephen Moss, the founder and managing director of Sourced (Property Investor Today), Rated: A

Established to match UK and overseas investors with hand-selected investment opportunities, we offer UK-wide investment advice and property sourcing through our 34-strong network of franchises.  This guarantees the same level of local knowledge and off-market opportunities, anywhere in the country.

Since we started in October 2017 our network has grown from one to 34 offices, we have launched a new peer-to-peer (P2P) lending platform and we’re building on our current position as the country’s largest property investment platform and network of property sourcers.  We’re also the first company to provide a free online training platform that gives investors of all levels of experience, the skills, knowledge and support they need to grow their portfolios.

Multiply: the new app that wants to put a financial adviser in everyone’s pocket (Evening Standard), Rated: B

Multiply is the latest fintech app launching on the Apple App Store, which wants to be your own personalised financial adviser so you can understand your money and the best things to do with it.

How Manchester entrepreneurs should begin investing (About Manchester), Rated: B

  • Peer to peer lending – you may have heard of popular companies in this investment sector such as Funding Circle. With peer to peer lending, you lend money to business start-ups to help them become established. When they are profitable you get your money back with any agreed interest.
China

China Rapid Finance Announces Regulatory Report & Board Change (Crowdfund Insider), Rated: AAA

China Rapid Finance Limited (NYSE: XRF) announced last week that it submitted its P2P Compliance Self-Inspection Report to its local P2P regulatory office. According to the online lender, this new report is considered the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.

China Rapid Finance then explained it is focused on the next two process steps:

  • A self-disciplinary inspection conducted by NIFA and regional regulatory authorities
  • verification of inspection results by the regional P2P Rectification Office to conduct on field inspections

China Looks to Foreign Investors and Pensioners as Distressed-Debt Saviors (The Epoch Times), Rated: A

According to data from Bloomberg, China’s total balance of non-performing loans (NPLs) reached 1.96 trillion yuan ($285 billion) at the end of June 2018. To help lower this figure, China has been pawning off toxic loans onto foreign investors and unsuspecting pensioners.

Oaktree Capital Management in September acquired 115 NPLs for 2.4 billion yuan ($350 million) from one of China’s “bad banks” China Huarong Asset Management Co., according to Bloomberg.

The digital divide: inclusion must not create exclusion (The Finanser), Rated: A

There’s a legitimate concern that the change that’s happened in Chinese society since 2014 with regard to rapid conversion from cash and cards to mobile payments has been too fast for some. What happens to those left behind in the digital economy?

European Union

H&M buys $ 20 million stake in Swedish fintech firm Klarna (Reuters), Rated: AAA

Fashion chain H&M (HMb.ST) is acquiring a small stake in Klarna in what will be the Swedish online payments services firm’s largest partnership so far.

H&M is paying around $20 million for a stake of less than 1 percent, a Klarna spokeswoman said, confirming a Financial Times report on Monday.

Mintos partners with Trustly to offer real-time transfers (P2P Finance News), Rated: A

MINTOS, Europe’s largest peer-to-peer marketplace, has partnered with payments company Trustly to offer its customers the option to transfer funds in real-time from bank accounts across Europe.

Mintos said the collaboration with Swedish e-payments company Trustly will allow investors using its platform to transfer money in real-time from bank accounts across 29 European countries. This strips out the usual waiting time that is associated with conventional clearing systems.

Money laundering and backlogs dent ING’s image as tech leader (American Banker), Rated: A

Since taking charge of ING Group in 2013, Chief Executive Officer Ralph Hamers has labored to make it the most digitally advanced lender in Europe. His motto: disrupt yourself before a competitor does it first.

It’s safe to say the tumult at ING during the last few weeks isn’t what Hamers had in mind.

Equity Crowdfunding Platform Anaxago Launches Asset Management Firm Anaxago Capital (Crowdfund Insider), Rated: B

Anaxago is launching an asset management firm, Anaxago Capital, to attract more institutional investors and ready itself to fund larger projects. With this, Anaxago expects to double its outstanding investments by 2020.

International

China’s Tencent invests $ 180 million in Brazil fintech Nubank (Reuters), Rated: AAA

Chinese gaming and social media firm Tencent Holdings Ltd (0700.HK) paid $180 million for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.

Inside TD Ameritrade’s integration with WeChat (Tearsheet), Rated: AAA

TD Ameritrade continues to explore how to connect with its clients over different platforms.

The company, which has already launched experiences on Messenger, Twitter DM, Amazon Alexa devices and Apple Business Chat, has launched a chatbot for WeChat.

TD Ameritrade’s chatbot allows retail investors in Hong Kong to do their research, access market information, and get support through one of the most popular social and messaging platforms in Asia.

Celsius, Pays Interest To Crypto Depositors (CoinTrust), Rated: A

Celsius, a recently established cryptocurrency lending firm, has announced that it offers interest to thousands of users who deposit Bitcoin and Ether with its wallet application. Celsius claims to have won over 10,000 users since its mobile app was launched on June 29, with an average deposit of 0.5 BTC or 5.50 Ether earning as much as 6.7% per annum. Celsius generates the interest income by lending the crypto to hedge funds which open short position in the crypto market.

APAC

KKR and Tencent lead $ 175m investment in Philippines’ Voyager Innovations (Banking Tech), Rated: AAA

Telco PLDT, investment firm KKR and Tencent are part of a $175 million investment in Philippine digital tech company Voyager Innovations.

MENA

UAE-based startup Smart Crowd just got funded by Shorooq Investments (Startup MGZN), Rated: AAA

Smart Crowd, a new real estate crowd investing platform is just closed a Seed Funding round with $600,000 from Shorooq Investments, followed by Abaxx Technologies500 Startups, and other high-level strategic individual investors.

Authors:

George Popescu
Allen Taylor

Tuesday October 2 2018, Daily News Digest

delinquencies by vintage

News Comments Today’s main news: Renaud Laplache banned from securities industry for 3 years. Varo Money pulls bank charter application. Funding Circle completes IPO. Marcus enters the UK. OnDeck Australia expands equipment finance. Today’s main analysis: Delinquency/Loss Trends, yield curve. Today’s thought-provoking articles: Americans prefer humans over robo-advisors. Global P2P lending market expected to reach $898B by 2024. AltFin’s path to […]

delinquencies by vintage

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Lending Club founder settles; banks fear weak third quarter (American Banker), Rated: AAA

Renaud Laplanche, the co-founder and former CEO of online lender LendingClub, agreed to pay $200,000 and be banned from the securities industry for three years to settle Securities and Exchange Commission fraud charges. In addition, LendingClub Asset Management (LCAM), an investment management unit of LendingClub, will pay a $4 million fine while Carrie Dolan, the company’s former chief financial officer, will pay $65,000.

LendingClub Responds to DOJ and SEC Settlements (PR Newswire), Rated: A

“We are pleased to have resolution and closure,” said LendingClub Chairman Hans Morris. “Following an internal review in 2016, LendingClub’s Board of Directors accepted the resignation of Renaud Laplanche as Chairman and CEO of the Company. The Board’s decision was not made lightly but the violation of the Company’s business practices, along with a lack of full disclosure by Mr. Laplanche during the review, was unacceptable. The allegations made by the DOJ and the findings of the SEC further support the Board’s decision to take swift and decisive action. We have full confidence in our new management team and we are a better company today.”

Why this fintech pulled its FDIC charter application (American Banker), Rated: AAA

Varo Money is inching closer to having a bank — the next step will require a major leap.

The fintech, which aims to offer consumer banking services with no fees, applied for a national bank charter over a year ago. While it recently received preliminary and conditional approval from the Office of the Comptroller of the Currency, Varo has been unable to secure the blessing of the Federal Deposit Insurance Corp.

Delinquency/Loss Trends; Yield Curve One Hike from Inversion (PeerIQ), Rated: AAA

The range of Fed Funds Rate is now between 2% – 2.25%. A super-majority of committee members indicated that they would like to hike rates by another 25 bps in DecemberUS GDP growth of 4.2% in the 2nd quarter was the fastest since 2014 Q2, and US consumer confidence reached an 18-year high in September.

 

Source: Federal Reserve, Bloomberg, PeerIQ
Source: PeerIQ, Bloomberg

Delinquencies by Vintage

Source: PeerIQ

Bank of America is luring top talent from Apple and Disney to fuel its billion digital ambition (Business Insider), Rated: A

Like its competitors, Bank of America Merrill Lynch is spending a colossal amount of money to stay competitive in the financial tech race: Its $10 billion annual tech budget sits just behind JPMorgan’s $10.8 billion and ahead ofCitigroup’s $8 billion.

A large chunk of that spending goes to the firm’s profit-driving consumer-banking operation, which accounts for $34.5 billion in revenue and $8.2 billion in net income, which is 38% of the firm’s total.

SoftBank Invests $ 400M in Home-Selling Startup Opendoor (Coverager), Rated: A

Online real estate marketplace Opendoor  has announced a $400M investment from the SoftBank Vision Fund, bringing its total funding to date to over $1b. The company also announced it has secured access to more than $2b in debt financing from top banks.

Governor Brown Signs Bill That Expands Access to Capital for the Underbanked (BusinessWire), Rated: A

INSIKT, a CDFI-certified fintech company disrupting the predatory lending industry, today celebrated a major step forward for working families and small businesses in California with the signing of Assembly Bill 237 (AB237), following unanimous approval by the CA Legislature. Sponsored by Lorena Gonzalez Fletcher (D-San Diego), this new law significantly expands access to lower cost loans for Californians who are part of the 66 million underbanked in America ensnared in endless cycles of predatory debt.

AB237 builds on the success of California’s Pilot Program, established in California in 2010 to provide affordable credit for loans below $2,500. The Pilot Program has many consumer protections, including rate caps, mandated underwriting, credit education and reporting of payback information to credit bureaus so that consumers can build their credit score.

The Pilot Program has been working, with the volume of payday lending declining in California by almost 7% from last year, the third consecutive annual decline. AB237 extends all of the Pilot Program’s consumer protections to larger loans of up to $7,500. It also adds new protections, including a 36% maximum debt-to-income ratio, minimum loan terms of one year, and mandatory rate reductions on second and third loans for borrowers in good standing.

Compass Raises $ 400M in Series F Funding (Finsmes), Rated: A

Compass, a NYC-based real estate technology company, raised $400m in Series F financing round.

The round – which will bring the total capital raised to nearly $1.2 billion – was led by the Softbank Vision Fund and Qatar Investment Authority (QIA), with participation from Wellington, IVP and Fidelity.

Americans Prefer Humans over Robos for Financial Advice (Wealth Management), Rated: AAA

Americans are relatively comfortable with automating financial advice but the majority still want a human to consult, according to Charles Schwab’s latest Consumer Digital Demands report.

The report, which surveyed 1,000 U.S. adults this summer, including 391 current robo advisor users, showed Americans are more open to technology performing some tasks than others. For example, 75 percent of respondents said they’re comfortable with more human assistance than automation when it came to performing surgery. They also are overwhelmingly more comfortable with humans over technology when it comes to driving a car (74 percent), diagnosing a major health issue (73 percent) and flying an airplane (66 percent).

Source: Charles Schwab

Read the full report here.

46 percent of millennials think it takes $ 1,000 to start investing—here’s how much you actually need (CNBC), Rated: A

recent survey from financial services app Twine found that 46 percent of millennials believe they need at least $1,000 to start investing. Another 17 percent believe they need at least $10,000 before they’re able to invest.

Overall, 56 percent assume they don’t have enough money to become investors themselves.

It’s simply not true. There are plenty of ways to get into the market with as little as $1, including contributing to an employer-sponsored 401(k) plan, opening a Roth IRA or using a robo-advisor such as Betterment, Wealthsimple or Ellevest, which offer $0 account minimums.

CREDIT WITH A CONSCIENCE (Petal Email), Rated: B

We’re thrilled to announce today that the Petal credit card is now publicly
available on our website at www.petalcard.com.

Meet Klarna (Missy Farren & Associates, Ltd. Email), Rated: B

We’re excited to let you know we are now working with 

Real Estate Mogul And Owner of Flipnerd.com, Mike Hambright, Has Been Published In Forbes (MENAFN), Rated: B

Flipnerd.com continues to grow and make its mark in the real estate world due to the versatility and expertise of its owner, Mike Hambright. In recognition of his expertise, business acumen and dedication to succeeding in his carved niche, the founder of this real estate company has been published on one of the greatest platforms in the world, Forbes.

United Kingdom

Funding Circle Goes Public on the London Stock Exchange (Lend Academy), Rated: AAA

It was a landmark day for fintech in London as Funding Circle became the first UK marketplace lender to complete an IPO.  The company raised £300 million at a valuation of around £1.5 billion. They began trading on the London Stock Exchange (LSE: FCH) this morning with an initial price of 440 pence (at the lower end of the forecasted price range of 420p to 530p). While rising early in the day to 460p it closed the exactly flat at 440p.

Funding Circle valuation ‘reflects brand and growth opportunity’ (P2P Finance News), Rated: A

The peer-to-peer business lender, which listed on the London Stock Exchangeon Friday, was originally targeting a market value of £1.8bn. But after narrowing its IPO price range, it subsequently priced at 440p, implying a market capitalisation of £1.5bn.

Some market commentators argue the company is overvalued as it is still loss-making, although revenues surged from £51m in 2016 to £94.5m last year.

Goldman Sachs Enters U.K. Savings Market, Continuing Consumer Push (WSJ), Rated: AAA

Goldman Sachs Group Inc. entered Britain’s £700 billion ($922 billion) cash savings account market Thursday with the U.K. launch of its consumer bank Marcus, adding a fresh source of funding for the U.S. investment bank.

Online-only Marcus offers savings accounts paying interest of 1.5%, the highest rate for instant-access savings products, according to price-comparison websites.

Zopa customers vote Bond’s Aston Martin as most iconic screen car (P2P Finance News), Rated: A

THE ASTON Martin DB10 driven by Daniel Craig in the James Bond films has been voted the most iconic car in film and television.

The car won 35 per cent of votes in a poll conducted by peer-to-peer platform Zopa.

Inspector Morse’s maroon MK II Jaguar followed in second place with 14 per cent, while Dominic Toretto’s Dodge Charger from The Fast and The Furious came third.

Relendex increases max loan size to £5m (Development Finance Today), Rated: A

Relendex has announced that it has increased its maximum loan size from £3m to £5m.

Loans will also be available on commercial and industrial assets, where circumstances allow, as Relendex plans to reach a lending target of £100m in 2019.

UK in debt: how it looks in figures (London Loves Business), Rated: A

The research briefings provided by the UK Parliament itself show that student debt stands at £105 billion by the end of March 2018.

The Guardian reports that only 5% of the graduates remain unemployed six months after graduating. In addition to that, 74% of professionals who enter the workforce are full-time first degree graduates. In terms of the pay that they get, males more than females tend to benefit from getting a degree. The men’s average pay rise to £24000.

The Guardian reports that by the end of July 2017, unsecured credit had risen to a level not seen since September 2010. Specifically, unsecured debt has reached £201.5 billion.

70% believe low credit scores or zero hour contracts would prevent borrowing (Financial Reporter), Rated: A

Just 31.6% of the 2,400 respondents recognised that none of the reasons listed automatically prevent someone from getting a mortgage.

A massive 47.5% believed a low credit score could stop someone getting a mortgage, 33.4% thought a zero hour contract would be a barrier and 15.6% said a payday loan would stop an application from being accepted.

Fintech iwoca responds to £775m RBS competition package briefing (iwoca Email), Rated: B

The CEO of one of Europe’s fastest growing business lenders has a cautiously optimistic outlook for the £775 million RBS Alternative Remedies Package following a briefing by Banking Competition Remedies this morning.

“Funds from Pools C and D of the package’s Capability and Innovation Fund, would enable iwoca to bring innovative new technology to the market, making it easier for small businesses to secure finance on their terms, whenever and wherever they need it. What’s more, we would be that much closer to achieving our target of funding 100,000 small and micro businesses in the next five years.”

China

China Rapid Finance Announces Submission of Regulatory Report and Board Change (Markets Insider), Rated: AAA

China Rapid Finance Limited (the “Company” or “XRF”) (NYSE: XRF), operator of one of China’s largest consumer lending marketplaces, today announced that it submitted its P2P Compliance Self-Inspection Report (the “Report”) to its local P2P regulatory office. The Report is the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.

Golden Bull Reports 75% Revenue Rise for First Half; Up 6% on Wall Street (Capital Watch), Rated: A

The stock of Golden Bull Ltd. (Nasdaq: DNJR) rose more than 6 percent by Monday afternoon after the Chinese P2P lending company posted a 75 percent increase in revenue for the first half of 2018.

Revenue jumped to $4.9 million compared with $2.8 million during the first six months of 2017, the Shanghai-based company said, thanks to an increase in borrowers. According to its statement, Golden Bull has facilitated 3,000 loans with total volume of $77.8 million during the first half compared with 2,200 loans in the amount of $53.7 million processed a year ago.

Chinese Household-Debt Levels Reach Record High (The Epoch Times), Rated: A

While its overall household wealth has increased, China’s household debt-to-GDP ratio reached a record high of 49.1 percent in 2017, according to a new report on global wealth by German insurance giant Allianz. Since the beginning of 2008 to the end of last year, Chinese household debt jumped an average of 27 percent annually, according to separate but corroborating data from the Bank of International Settlements.

Samoyed Holding Files For $ 80 Million U.S. IPO (Seeking Alpha), Rated: A

Samoyed Holding (SMY) intends to raise gross proceeds of $80 million from a U.S. IPO, according to an F-1 registration statement.

The firm provides technology-driven credit services to credit-proven millennials in China.

SMY is growing revenues and weighted-average APR but is also seeing sharply increased charge-off rates for its credit card balance transfer marketplace.

European Union

Younited Credit expands to Portugal (AltFi), Rated: A

The Paris-based consumer lending platform Younited Credit has increased its potential customer base by launching in Portugal, its sixth European market. Already distributing loans in Germany and Austria, it has 35 per cent of its loans in Italy and Spain.

Telia Sweden overhauls organisational structure, brings in Klarna customer service head on 01 January (Telecompaper), Rated: B

Johan Andersson will lead the strategy division, Fredrik Sidmar will be in charge of professional services, Piero Trivellato will be responsible for digital and analytics, and Sandra Alenius will lead customer service delivery. Alenius will join Telia from Swedish payments specialist Klarna.

International

Global peer-to-peer lending market set to reach $ 898bn by 2024 (P2P Finance News), Rated: AAA

THE GLOBAL peer-to-peer lending market will grow to $898bn (£688bn) by 2024, according to new research.

The report predicted that this will allow the P2P market to achieve a compound annual growth rate of 48.2 per cent over the next eight years.

AltFin’s Inconsistent Path To SMB Adoption (PYMNTS), Rated: AAA

In the U.K., $248.9 million was lent to SMBs via alternative lending platforms in Q2, according to the U.K. Peer-to-Peer Finance Association (P2PFA). The P2PFA highlighted that the statistic means net lending to SMBs, via member alternative lending players, surpassed that of high-street banks, which lent about $169.4 million to SMBs during the year’s second quarter. New lending to small firms, among member marketplace lending portals, increased by nearly $130.3 million, the association noted.

In the U.K., 30 percent of small firms need external financing simply to survive, according to new Liberis data.

In the U.S., 63 percent of SMBs sought a loan for working capital needs last year, including payroll, inventory and supplies, according to new data from S&B Global Market Intelligence.

In Mexico, 44 percent of small businesses that have been in operation for five years haven’t seen their incomes rise, according to Moody‘s Senior Credit Officer Felipe Carvallo in an interview with Euromoney. According to Moody’s data, small businesses accounted for just 9.1 percent of all loans in Mexico as of last March — equivalent to only 2 percent of total GDP, reports said.

Skynet Controversy: Similarly Named Tezos dApp Promises Enhanced Peer-to-Peer Lending (BTC Manager), Rated: A

Skynet Open Network seems to promise all things to all people – fastest blockchain implementation, AI on Blockchain, Healthcare on Blockchain and more. Some of the 17,000 people on the SkynetOpen telegram channel were understandably furious about the similarities in the name when Skynet World announced their project on September 26, 2018.

According to the Skynet World whitepaper, they are the first DAPP on the Tezosblockchain.

Skynet World aims to disrupt the bank lending space by offering peer to peer lending through their app. According to Skynet World:

“Banks are the major source of debt finance for both households and businesses, accounting for about three-quarters and two-thirds respectively of all debt finance provided to those sectors… Banks charge most of the interest up front, a practice known as amortization. Through amortization, 70% of the total interest is paid by the halfway point of the mortgage period.”

Australia

SME lender expands equipment finance (AustralianBroker), Rated: AAA

An online lender has expanded its offering of equipment finance, saying it is providing a solution for the “underserved” market of small business owners.

OnDeck Capital Australia said it had received feedback from small businesses and brokers about the length of the loans.

India

MODI OPERANDI (All About Alpha), Rated: A

What’s your liquidity M.O.? If you are less than certain, it is time to look east toward the country of India and the land of Modi. After all, when 1.3 billion people cough there is a decent chance the rest of the world just might get sick, or maybe just sick of being gated, PIK-ed, or having their holdings marked down 10% or more in a single trading session.

In September an unlisted India company that relied on debt funding for various infrastructure projects defaulted and the spillover into the listed equity markets was contagious and quick. The poster child this time around was Dewan Housing Finance Corp. Their commercial paper, which was issued to fund their longer term capital needs, ticked up 50 basis points when a mutual fund went to liquidate some of that holding, and the stock ended up dropping by more than half in a single trading session. Despite management claims of good health and solid liquidity, many investors could not process or hear it as they ran from the fire. Some other names in this sector suffered similar fates, and the damages (or buying opportunities) are still being sorted out. In India, the publicly traded mutual funds are estimated to own 60% of the commercial paper issued by these non-bank finance companies.

Uttam Prakash Agarwal joins PaisaDukan as independent director (Business Standard), Rated: B

Former Uttam Prakash Agarwal has joined NBFC-lending major as 

APAC

Belt Road Capital invests $ 3m in Vietnamese P2P lending startup Tima (Deal Street Asia), Rated: AAA

Mekong-focused venture capital firm Belt Road Capital Management (BRCM) has injected $3 million in a Series B funding round of Tima, a Vietnamese P2P lending platform incepted in 2015.

The latest investment values the company at $20 million. Tima raised a series A round in 2016 from Dunearn Singapore Fund and G Capital.

First Circle, a Philippine-based Fintech, Preps to Launch New SME Targeted Credit Facility with Support of Government (Crowdfund Insider), Rated: A

First Circle, a Philippine Fintech, is expected to announce a new credit facility for SMEs nationwide. This new facility has gained the support of the Philippine Department of Trade and Industry (DTI) and the Bangko Sentral ng Pilipinas (BSP).

First Circle is an online lender that provides supply chain financing to SMEs.

Authors:

George Popescu
Allen Taylor

Thursday September 13 2018, Daily News Digest

funding circle

News Comments Today’s main news: OnDeck tops $10B in small business lending. KBRA assigns preliminary ratings to Consumer Loan Underlying Bond Credit Trust 2018-P2. Robinhood looking to IPO. Faircent approved by Reserve Bank of India. Today’s main analysis: A credit card debt study from Wallet Hub. Today’s thought-provoking articles: Should the next billion dollar financial platform be for […]

funding circle

News Comments

United States

United Kingdom

India

Other

News Summary

United States

OnDeck Small Business Online Lending Tops $ 10 Billion (PR Newswire) Rated:AAA

OnDeck has achieved a milestone in the Financial Technology (FinTech) industry, becoming the first non-bank online lender to surpass $10 billion in total loans originated to small businesses. OnDeck, with operations in the United StatesCanada and Australia, is the world’s largest non-bank online lender to small business by total loan volume.

The achievement by OnDeck, a pioneer of the FinTech lending industry, is the latest indication that small businesses increasingly prefer to seek financing online. According to the Small Business Credit Survey from the Federal Reserve, small business owners are turning to online lenders in record numbers. In 2017, 24 percent of small businesses seeking credit applied online, up from 21 percent the previous year.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2 (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2 (“CLUB 2018-P2”). This is a $270.30 million consumer loan ABS transaction that is expected to close September 27, 2018.

Source: Business Wire

Robinhood is targeting an IPO (Business Insider) Rated: AAA

Fintech unicorn Robinhood, which offers zero-fee stock, option, and crypto trading, has begun preparations to go public, Baiju Bhatt, the company’s chief executive, revealed at TechCrunch Disrupt SF last week. The US-based firm has raised $539 million in funding, and it’s currently valued at $5.6 billion.

Source Business Insider

In preparation for the initial public offering (IPO), the five-year-old company is in the process of hiring a chief financial officer (CFO), as well as undertaking audits from the Securities and Exchange Commission (SEC) and FINRA, a US securities markets watchdog.

The Next Billion Dollar Financial Platform – Baby Boomers (The Sociable) Rated: AAA

If you’ve immersed yourself in the world of Silicon Valley and you keep up with current trends, then it comes as no surprise that ageism in the U.S. tech world is an ongoing debate. The job search engine Indeed reports that 43% of workers in the tech industry worry about losing their jobs due to their age. While the general population is aware of the issue, its resolution is slow-moving.

The characteristics of Generation Z – those born after 1996 – are still being discovered. We don’t know enough about them yet to understand what kind of impact they will have. The Millennial Generation and Gen X have arguably been the main sales focus during the rise of Silicon Valley. Millennials in particular have overtaken the market, with 83% of today’s managers belonging to that generation. Finally, we have the Baby Boomers. Whether it’s because Millennials believe that older generations can’t use new tech – or that they inherently cater to people their own age by nature – Boomers are falling by the wayside.

People aged 50+ are the largest demographic in the United States, encompassing one third of the total population at 110 million. This age group is responsible for spending 50% of the total disposable income in the country.

Credit Card Debt Study: Trends & Insights (Wallet Hub) Rated: AAA

Americans repaid $40.6 billion in credit card debt during Q1 2018 – the second-largest quarterly payoff ever. But we added almost $30 billion back to our tab in Q2 2018. We also began the year owing more than $1 trillion in credit card debt for the first time ever, after adding a post-Great Recession record of $91.8 billion to our tab in 2017.

Only four times in the past three decades have we overspent so much in a year. And in each case, the charge-off rate – currently near historical lows – rose the following year. That’s true so far, as charge-offs are up nearly 3% from Q4 2017 to Q2 2018.

Source: WalletHub

Source: WalletHub

College Ave Student Loans Announces Completion of Second Successful Securitization (Crowdfund Insider) Rated: A

Student loan marketplace, College Ave Student Loans, announced on Tuesday it has completed a $199 million securitization of private student loans, its second successful securitization. According to the platform, the CASL 2018-A transaction completed over the summer, achieved higher ratings than College Ave’s inaugural securitization, receiving an ‘AA’ rating from DBRS and an ‘A’ rating from S&P for its senior notes. 

According to College Ave, the transaction was heavily oversubscribed attracting a broad and diverse group of repeat investors and nine new participants. Barclays and Credit Suisse were joint lead underwriters on the transaction with Barclays serving as structuring agent and sole bookrunner.

White Oak Global Advisors raises $ 2.1 billion for its Direct Lending Strategy (Globe Newswire) Rated: A

White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the close of the White Oak Yield Spectrum Fund (the “Fund”) to outside investors. The Fund and other associated vehicles raised concurrently approximately $2.1 billion of total commitments, exceeding the $1.75 billion fundraising target. White Oak’s previous flagship fund, the White Oak Summit Fund, closed with approximately $1.3 billion of commitments in March 2016.

The capital for the White Oak Yield Spectrum Fund was raised from a diversified group of institutional investors worldwide. In particular, the Fund attracted very strong support from public and private pension funds, insurance companies and global family offices. White Oak currently manages over $5.6 billion of committed assets.

The Fund will primarily invest in first-lien, directly originated lending strategies, including term loans, asset-based loans, and equipment financing.

‘Fintech Charter’ Has No Early Takers as Lawsuit Looms (Wall Street Journal) Rated: A

A national banking regulator is offering cutting-edge financial firms a new pathway into the traditional banking system. So far, few of them are biting.

The lack of immediate interest from the likes of LendingClub Corp. LC +0.00% , Square Inc., and others comes in large part from uncertainty about what activities the Office of the Comptroller of the Currency’s so-called fintech charter will allow, what regulatory requirements it will carry, and whether it will hold up in court.

That uncertainty grew Wednesday when the Conference of State Bank Supervisors, a group of state regulators, said it intends to file a lawsuit challenging the OCC’s authority, renewing a previously unsuccessfully legal challenge.

2018 Fed Rate Hike Survey (Wallet Hub) Rated: A

Source Wallet Hub

Opendoor Buys Open Listing To Create End-to-End Marketplace (PYMNTS) Rated: A

In a press release, Opendoor said the acquisition of Open Listings, which operates a platform that aims to make it easier and lower-cost to find, tour and buy any home on the market, will enable it to create an end-to-end marketplace for the buying, selling and trading of homes. According to the company, 71 percent of home sellers are also looking to purchase a home.

With the acquisition, Opendoor customers will be able to line up a purchase of any home on the market via a trade-in transaction. Buyers who use Open Listings will get a discount on the home purchased through a commission rebate of up to 50 percent, the company said in the press release.

Via mobile phone or computer, customers can tour and submit an offer on any home on the market, get an offer on their existing home and align the timing of both transactions. By integrating Open Listings with Opendoor‘s mortgage, title and homes services, the company said conducting a real estate transaction will be as easy as booking a flight or making an online purchase.

Fintech out to start national bank clears one hurdle but faces more (American Banker) Rated: A

Varo Money in Salt Lake City is one step closer to becoming a national bank.

The fintech firm, which aims to lower the cost of banking through a mobile-only platform, recently received preliminary and conditional approval from the Office of the Comptroller of the Currency. Varo still needs to apply and receive approval from the Federal Deposit Insurance Corp. and the Federal Reserve.

Colin Walsh, Varo’s co-founder and CEO, is optimistic that the company will be operating as a bank within a year. He characterized the OCC’s decision as a pivotal moment for banking — one that shows regulators are more willing to consider nontraditional models.

State regulators renew push to block OCC’s fintech charter (American Banker) Rated: A

State regulators said Wednesday they intend to refile a lawsuit against the Office of the Comptroller of the Currency in an effort to block it from offering a new federal bank charter for fintech firms.

The Conference of State Bank Supervisors said its board recently decided to proceed with another round of litigation against the national bank regulator now that the agency said July 31 it would offer a so-called special-purpose national bank charter to fintech firms.

This will be the state regulators’ second attempt at blocking the OCC in court.

Millennials in this American city are carrying the most debt (Ladders) Rated: B

New data from online loan marketplace LendingTree shows that San Antonio is the American city where Millennials have “the most debt,” with a median debt balance of $27,122 — not including mortgages.

Researchers took a look at “anonymized credit report data of My LendingTree users who live in the 50 biggest metro areas in the U.S.” to compile the data. They were born anywhere between the years 1981 and 1996.

The 10 cities where Millennials have the most debt

Here they are, plus the average percentages of what highly contributes to Millennials’ “total debt balances.” Again, these don’t include mortgages:

  1. San Antonio: median balance of $27,122, with car loans making up 43.2% of “total debt balances”
  2. Pittsburgh: median balance of $26,403, with student debt being 45.7% of all debt
  3. Austin: median balance of $26,164, with 18.1% of all debt being from credit cards and 37.1% being from car loans
United Kingdom

Stress testing at Funding Circle (Funding Circle) Rated: AAA

This means building a sustainable platform that allows investors to earn attractive and stable returns by lending to creditworthy businesses, during every stage of an economic cycle. Since 2010, globally we’ve improved access to affordable capital for more than 50,000 businesses, and opened up a new asset class for over 80,000 investors.

Source: Funding Circle

Fed stress parameters included:

Adverse Scenario Severely Adverse Scenario
GDP Falls 2 ¼ percent below Q4 2017 Falls 7 ½ percent below Q4 2017
Unemployment Rises to 7% Rises to 10%
Home Prices Falls 12% Falls 30-40%
Source: Funding Circle

Thinking of buying into the Funding Circle IPO? Read this first (AOL) Rated: A

Peer-to-peer lender Funding Circle fired the starting gun on its much-anticipated plans to go public earlier this month. The company, which is only eight years old, is looking to attract a value of £1.7bn and raise £300m in the process.

Since its founding, Funding Circle has transformed the market for business financing, matching everyday investors who have money to spare with businesses looking for funding to expand. In total, the company has put together £5bn in loans for small businesses since 2010.

However, if you’re thinking of buying into the IPO, there are several issues you need to consider first.

Barclays opens up mobile banking app to rival accounts (Fintech Futures) Rated: A

Barclays has become the “first” UK bank to allow customers to bring their other current accounts into its mobile banking app.

Barclays says this new feature gives customers a way to get a clearer picture of their day-to-day finances within its app. It uses API technology – all powered by open banking.With competition in UK banking tougher than an East End gangster, banks are trying to stand out and play a game of constant one-upmanship.

It’s also a riposte to the many fintech start-ups offering a similar service. For example, last month London-based personal finance app Bippit launched with the offer of an account connecting and savings service.

Monzo: When is a bank not a bank? (FT Alphaville) Rated: A

Monzo is frequently hailed as one of the most exciting challenges the tech industry poses to high street banks.

Wikipedia calls it a “digital, mobile-only bank”. Mashable summed it up as the “bank that’s apparently so cool it’s become a chat up line in London’s bars”. Its own stated ambition is to “build a better bank”. In April 2017, it acquired a banking licence.

But does Monzo actually behave like a bank?

Banks, under one interpretation, are economic inventions which create liquidity from an array of otherwise illiquid assets. Douglas Diamond, the US economist, describes a bank as “a lender financed with demand deposits”. Depositors sacrifice higher returns for the privilege of immediately being able to withdraw their capital whenever they want.

iwoca: We are the UK’s Fastest Growing SME Finance Provider (Crowdfund Insider) Rated: A

Online lender iwoca says it is UK’s fastest growing SME finance provider. The claim comes following the publication of the Sunday Times Hiscox Tech Track 100 which ranked iwoca 30th on the list.

The Sunday Times Hiscox Tech Track 100, published last Sunday, 9th September 2018. Ranked No. 30 on the ilst – which ranks Britain’s tech firms in regards to the fastest-growing sales. iwoca joins a group of prominent UK Fintechs recognized by the Times.

Proptech Startup Unmortgage Raises £10M in Seed (FinSMEs) Rated: A

Unmortgage, a London, UK-based proptech startup, raised £10m in funding.

Backers included Anthemis Exponential Ventures, and Augmentum Fintech plc.

The company intends to use the funds to expand operations and finance the part of the homes it purchases.

Crowdfunding – looking beyond equity investment (What Investment) Rated: A

At a time when banks were increasingly adopting the ‘computer says no’ approach, entrepreneurs and those involved with company start ups sought different ways of financing their ambitions.

Crowdfunding platforms including CrowdCube and Seedrs emerged, using technology to bring investors and companies thirsty for cash together.

Ten years later there are more crowdfunding platforms than ever, the top 10 crowdfunding platforms in 2018  as listed by What Investment.co.uk’s sister website Growth Businessinclude names such as Seedrs, CrowdCube plus RateSetter, Trillon Fund and Funding Circle.

P2PFN celebrates its second birthday (Peer2Peer Finance) Rated: B

PEER2PEER Finance News launched two years ago today!

The progress that has been made in two years is staggering. Most P2P platforms have become fully FCA authorised and many of them have launched IFISAs – which attracted £290m in the last tax year.

The UK’s largest P2P firms have cumulatively lent out more than £11bn, Zopa is getting closer to its bank launch and Funding Circle is floating on the main market of the London Stock Exchange next month.

China

China’s tech is addicted to debt (Technode) Rated: AAA

China has become addicted to debt. Now, its tech industry is hooked too.

It started innocently enough. Back in 2008, when the fallout of America’s own debt binge was giving the whole world a hangover, China engaged in a decisive and robust economic stimulus, injecting RMB 4 trillion into key sectors of its economy. Banks, mostly state-owned in China, were directed to lend more, particularly to other state-owned firms. As a result, China recovered quickly from the global financial crisis, even as the US and Europe struggled to get back on their feet.

However, even as the Chinese economy recovered, the banks continued to lend, and Chinese companies continued to invest, most notably in infrastructure projects. Not only did they invest, they invested A LOT.

Source: TechNode
European Union

Spotcap Issues Quarter of a Billion in Credit Lines to Businesses (Spotcap) Rated: AAA

Global fintech lender Spotcap has issued more than EUR 250 million in credit lines since its launch in 2014.

The company combines robust credit assessment principles with innovative technology to offer a smooth and straightforward loan experience. The fintech undertakes cash flow based, rather than credit-score based underwriting, resulting in a fair assessment of the real-time performance of a business.

In the last 12 months, Spotcap experienced more than 100 percent year-on-year growth in the volume of credit lines it provided, growing at a faster pace than the alternative finance industry, which recently experienced 41 percent year-on-year growth in Europe.

International

Fintech investment powerhouse Ribbit Capital aims for $ 420 million with its latest fund (Tech Crunch) Rated: A

Ribbit Capital, the financial technology investment firm whose portfolio includes hits like the no-fee mobile investment platform Robinhood; cryptocurrency wallet and marketplace provider Coinbase; and Root Insurance, the automotive insurance platform that just joined the billion-dollar startup club; is raising $420 million for its latest fund, according to a filing with the Securities and Exchange Commission.

The fund would be Ribbit’s fifth foray out with limited partners and its $420 million target is only a nominal increase from the $300 million it had set out to raise for its fourth fund last year.

Coinbase alone is now worth at least $8 billion on paper, and no one laughs when chief executive Brian Armstrong says that his company’s goal is to become the New York Stock Exchange of crypto securities.

Robinhood, another one of Ribbit’s portfolio darlings, is flirting with a $6 billion valuation after its latest funding round earlier this year — and has become synonymous with stock trading for a new generation of investors (despite some criticism about its business model).

 Australia

Fintech Prospa Ranks 6th in LinkedIn Top Startups List (Crowdfund Insider) Rated: AAA

Prospa says it has been named 6th on the 2018 LinkedIn Top Startups List. The list marks the 25 best startups to work for in Australia. Prospa adds that it is the top Fintech on the list as well.

Prospa is an online lender catering to small business. Prospa allows SMEs access to loans between $5,000 and $250,000, with approval and funding within as little as 24 hours.

Now in its sixth year, Prospa has established itself as delivering consistent high growth with a solid customer satisfaction NPS score averaging 77 and customer repeat rates of 69%.

Small business lenders pledge fairness under ASIC’s gaze (The Sidney Morning Herald) Rated: A

Fintech lenders say they’re moving quickly to review and amend any unfair contract terms before the watchdog comes knocking, but there are still questions about best lending practice.

Last week, alternative lender Prospa confirmed it had changed a number of contract clauses after receiving a query letter from the Australian Securities and Investments Commission (ASIC) back in June that arrived just days before the startup put the brakes on its planned ASX listing.

India

Authors:

George Popescu
Allen Taylor