News Comments
- Today’s main news: Funding Circle sets new high on loans under management. SoFi partners with Lemonade, Root. Salary Finance hires SoFi co-founder, raises $32.8M. Dianrong to raise $100M. Klarna may be headed to the stock market. Linked Finance sees record quarter.
- Today’s main analysis: European online alternative finance grows 36%. (A MUST-READ REPORT FROM THE CAMBRIDGE CENTRE FOR ALTERNATIVE FINANCE)
- Today’s thought-provoking articles: LendIt Fintech USA 2019 slide presentations. Are crypto-tracking stocks a viable alternative to a Bitcoin ETF? Nearly 1 in 4 millennial homebuyers want to buy a home before getting married. Challenger banks overtake traditional banks in customer satisfaction.
United States
- SoFi partners with Lemonade, Root. SoFi is moving aggressively into insurance products.
- LendIt Fintech USA 2019 slide presentations. Everyone should be able to find something of interest here. Start with the keynote speaker addresses: Mike Cagney of Figure, Renaud Laplanche of Upgrade, and Rob Frohwein of Kabbage.
- Are crypto-tracking stocks viable alternatives to a Bitcoin ETF? A super-interesting read, with a little nugget about crypto lending.
- Nearly 1 in 4 millennial homebuyers want a home before marriage. Interesting study from LendingTree.
- Groundfloor doubles year-over-year revenue. Groundfloor is one of the few opportunities for non-accredited investors. They are looking better every day. Disclosure: I own stock in and have an account with Groundfloor.
- Reali acquires Lenda, opens a mortgage lending platform.
- Avant to settle with Federal Trade Commission for $3.85 million.
- Returnly raises $19 million for online returns.
- Small businesses turn more often to online lenders.
- Mastercard acquires Vyze. This looks like a move to compete directly with Affirm.
- Earnest launches private student loans.
- Banks to turn to Avant, Amount to jump start digital lending.
- Digital lenders consider stricter credit approvals.
- Smart ways to invest $1,000.
- Nearly 60% of millennials consider lottery a viable retirement plan.
- Direct Lending Investments had more than 950 investors.
- 360 Mortgage launches no-income, no-asset mortgage program.
- Virginians are suing online lenders who charge 900% interest.
- Lendio opens franchise in Phoenix.
- BlueVine, Ocrolus partner.
United Kingdom
- Funding Circle sets record high on loans under management. Congratulations.
- Salary Finance hires SoFi co-founder, raises $32.8 million. The plan is to expand into the U.S.
- Welendus closes funding round, plans to expand into India.
- New rules coming for P2P lending, crypto.
European Union
- Klarna is preparing for a stock market listing. No other details at this time.
- Klarna expands relationship with Acne Studios.
- Linked Finance has a record quarter. Congratulations.
- Online alternative finance in Europe grows 36% to 10 billion euros. This report from the Cambridge Centre for Alternative Finance is a must-read.
- Top 5 real estate crowdfunding platforms to invest in.
China
- Dianrong raising $100 million.
- Rules for online lending still aways off.
- Large P2P lenders ordered to get disclosures ready.
Other
- International: Challenger banks overtake traditional banks in customer satisfaction. This is an awesome read. Challenger banks in many countries have had an uphill battle, but the tide is turning. People are now realizing that it is not only convenient to bank online, but the service is good too.
- Asia: The Korean fintech opportunity.
- MENA: A roadmap for fintech firms entering fast-growing emerging markets. A LendIt Fintech report.
- Canada: Lendified raises $15 million.
- Australia: April holidays will impact 1 in 4 SMEs.
- Brazil: Sky-high interest rates are choking economic growth.
- India: P2P lenders seek limit on lending relaxation.
- Brazil: More on credit card interest rates.
- India: Fintechs see a lucrative opportunity in open banking.
- Asia: Singapore, Cambodia partner on cross-border fintech.
- Australia: Talking about the big banks.
News Summary
- United States
- SoFi announces partnerships to expand insurance offering (Insurance Business Mag), Rated: A
- LendIt Fintech USA 2019 Slide Presentations Now Live (LendIt Fintech), Rated: AAA
- Are Crypto-Tracking Stocks Viable Alternatives to a Bitcoin ETF? (Finance Magnates), Rated: AAA
- Nearly 1 in 4 Millennial Homebuyers Want to Buy a Home Before They’re Married (LendingTree), Rated: AAA
- GROUNDFLOOR Doubles Year Over Year Revenue (PR Newswire), Rated: A
- Real estate startup Reali acquires online lender Lenda, expands into mortgages (Housingwire), Rated: A
- Avant to pay $ 3.85M to settle allegations of deceiving borrowers (American Banker), Rated: A
- A Max Levchin-Backed Startup Raises $ 19 Million To Tackle Online Returns (Forbes), Rated: A
- Small businesses turning far more often to online lenders (American Banker), Rated: A
- Mastercard Redefines Choice at Checkout with Acquisition of Vyze (Business Wire), Rated: A
- Earnest Launches Private Student Loans (PR Newswire), Rated: A
- Banks turn to a former rival to jump-start digital platforms (American Banker), Rated: A
- Digital Lending Companies Considering Stricter Credit Approvals (Investing News), Rated: A
- 7 Smart Ways To Invest $ 1,000 (Forbes), Rated: A
- Nearly 60% Of Millennials Look To Lottery For Retirement, Survey Says (FA-Mag), Rated: A
- Direct Lending Investments Had Over 950 Investors (deBanked), Rated: A
- No-income, no-asset mortgages are back (at one lender, at least) (Housingwire), Rated: A
- Some online lenders charge 900% interest and ignore Virginia law. So borrowers are suing. (Pilot Online), Rated: A
- Lendio Franchise Opens in Phoenix to Expand Access to Capital for Local Businesses (Lendio), Rated: B
- BlueVine Partners with Ocrolus for Faster Processing of Financing Applications (Ocrolus), Rated: B
- United Kingdom
- Peer-to-peer lender Funding Circle’s loans under management soar to record highs (City A.M.), Rated: AAA
- Salary Finance raises $ 32.8m, hires SoFi co-founder for US push (Finextra), Rated: AAA
- Welendus closes funding round as it prepares for India expansion (P2P Finance News), Rated: A
- City watchdog readies new rules for cryptoassets and P2P (FN London), Rated: B
- China
- China’s P2P lending platform Dianrong raising $ 100m (Deal Street Asia), Rated: AAA
- National Rules on Online Lending Still Far From Sight (Caixin Global), Rated: A
- Large P2P lenders ordered to ready disclosures for regulators (technode), Rated: A
- European Union
- Tech unicorn Klarna could quickly be prepared to contemplate bourse itemizing (Infosurhoy), Rated: AAA
- Klarna Expands Relationship with Acne Studios (Business Wire), Rated: B
- Linked Finance marks record quarter (Tech Central), Rated: AAA
- Total Online Alternative Finance Grows 36% Topping €10 Billion (Crowdfund Insider), Rated: AAA
- Top 5 Real Estate Stocks To Invest In (Prague Post), Rated: A
- International
- Challenger banks overtake traditional banks in customer satisfaction, in 4 charts (Tearsheet), Rated: AAA
- Australia
- April holidays to negatively impact 1 in 4 SMEs (My Business), Rated: AAA
- LET’S TALK: THE BIG 4 BANKS (Dynamic Business), Rated: A
- India
- P2P firms seek RBI relaxation on lending limit (Business Standard), Rated: AAA
- Fintech startups spot a lucrative space in ‘open banking’ (Economic Times), Rated: A
- Asia
- Riding the Korea FinTech Wave (Finextra), Rated: AAA
- Cambodia, Singapore In X-Border FinTech Pact (Cambodia Daily), Rated: A
- MENA
- A ROADMAP FOR FINTECH FIRMS ENTERING FAST-GROWING EMERGING MARKETS (LendIt Fintech), Rated: AAA
- Canada
- TORONTO FINTECH, LENDIFIED, RAISES $ 15 MILLION CAD SERIES A (Betakit), Rated: AAA
- Latin America
- How sky-high interest rates are choking economic growth in Brazil (The Brazilian Report), Rated: AAA
- Brazilian Credit Card Interest Rates: Enough to Choke a Horse or Risk Based Pricing? (Payments Journal), Rated: A
United States
SoFi announces partnerships to expand insurance offering (Insurance Business Mag), Rated: A
SoFi has announced two new partnerships in the insurance space. The partnerships expand SoFi’s portfolio of offerings to include homeowners’ and renters’ insurance through Lemonade and auto insurance through Root.
LendIt Fintech USA 2019 Slide Presentations Now Live (LendIt Fintech), Rated: AAA
Keynote Presentations
- Beyond the Hype: How Blockchain Changes Everything | Mike Cagney, Figure
- Three Fintech Questions that Matter in 2019 | Renaud Laplanche, Upgrade
- You Might Need Glasses, Your Vision Sucks | Rob Frohwein, Kabbage
Advancements in Credit, Underwriting and Identity
- Go with the flow? What cash flow data has to say about thin file borrowers | Melissa Koide, FinRegLab
- What are the data points telling us about the current credit market | Joseph Breeden, Prescient Models, Ram Ahluwalia, PeerIQ, Jason Laky, TransUnion Ashish Gupta, Prosper, Moderator: Julian Hebron, The Basis Point
Small Business Lending Innovation
- Evolving the SMB Toolkit to Meet New Demands in Lending | Omri Dahan, Marqeta
Niche Lending: Looking for Yield
- An In Depth Look at the Patient Lending Market | John Dwight, Simplee, Rob Seidman, HCS, Camilo Concha, LendingUSA, Howard Michalski, Sortis Holdings Moderator: Mike Sobek, medZero
- Wealth Tech : Uncorrelated Returns from Alternative Assets | Milind Mehere, Yieldstreet
- Understanding Chinese Auto Backed Assets | Richard Yi, Wangjin Financial
Are Crypto-Tracking Stocks Viable Alternatives to a Bitcoin ETF? (Finance Magnates), Rated: AAA
As the world continues to wait for the US SEC’s decision on the Bitcoin ETF applications that are still being processed months after a decision was expected, some investors may find themselves seeking alternative methods of entering into the Bitcoin market without actually having to do the dirty deed of investing in Bitcoin itself.
Crypto lending serviceshave recently reported record profits; crypto futures exchanges are also reporting higher-than-ever trading volumes.
Nearly 1 in 4 Millennial Homebuyers Want to Buy a Home Before They’re Married (LendingTree), Rated: AAA
Young adults are getting married later than previous generations. In 1980, the median age for men and women at their first marriage was 24.7 and 22, respectively. In 2018, the ages increased to 29.8 and 27.8, for men and women, respectively.
Millennials make up the largest share of homebuyers at 37%, according to a report from the National Association of Realtors.
Nearly a quarter (24%) of millennial first-time homebuyers want to own a home before getting married.
On the flip side, this means just over 3 in 4 millennial buyers (76%) want a marriage before a mortgage. Additionally, 27% of millennial buyers are postponing parenthood until they’ve achieved homeownership. Among homebuyers of all ages, nearly 2 in 5 are waiting to get a pet until after purchasing a house.
More than a quarter (26%) of first-time buyers have poor credit.
Just 15% of first-time buyers have a score of 740 or higher. Nearly 2 in 5 (38%) aren’t satisfied with their credit score, yet more than a quarter of those who are dissatisfied haven’t taken steps to improve their score. By contrast, more than 70% of repeat homebuyers are satisfied with their credit score.
GROUNDFLOOR Doubles Year Over Year Revenue (PR Newswire), Rated: A
GROUNDFLOOR, an investing and lending platform that allows anyone to invest fractionally in real estate, is today announcing its Q1 results and momentum. Despite the government shutdown of the U.S. Securities and Exchange Commission for 35 days, GROUNDFLOOR still experienced 123% percent non-GAAP Q1 revenue growth compared to the prior year Q1.
Additional Q1 momentum for GROUNDFLOOR includes:
- Achieving a 166% increase in unit volume for loans closed in Q1 ’19 vs. Q1 ’18
- More than doubling loan application volume for Q1 ’19 vs. Q1 ’18 (121% increase)
- Selling more than $14.5M in real estate investments to retail investors on the platform
- Surpassing more than 60,000 registered users
- Eclipsing $100MM in loans to real estate developers to-date in more than two dozen states
- Expanding product offerings, such as new construction loans and a fixed annualized notes product returning 5 percent on a 90-day term
- Launching a second online public offering to purchase stock in GROUNDFLOOR directly
Real estate startup Reali acquires online lender Lenda, expands into mortgages (Housingwire), Rated: A
Reali announced Wednesday that it acquired Lenda, an online mortgage lender that launched in 2013 and currently operates in 12 states.
And with the acquisition, Reali is launching Reali Loans, a mortgage lending operation of its own.
Avant to pay $ 3.85M to settle allegations of deceiving borrowers (American Banker), Rated: A
The online lender Avant will pay $3.85 million to settle Federal Trade Commission allegations that it misled customers who were seeking to repay their loans.
The FTC said Monday that its commissioners approved the settlement by a 5-0 vote.
A Max Levchin-Backed Startup Raises $ 19 Million To Tackle Online Returns (Forbes), Rated: A
A San Francisco-based startup called Returnly is seeking to solve at least a portion of the headache—namely, the payment delay—by issuing instant store credit when you decide you don’t want an item. The company says that by assessing a shopper’s risk, it can offer store credit to 85% of customers on the spot, without first requiring that the item has been received or even put in the mail.
Returnly announced on Wednesday that it has raised $19 million in a Series B funding round, led by venture capital firm Craft Ventures and with participation from Max Levchin, the PayPal cofounder who currently runs Affirm.
Small businesses turning far more often to online lenders (American Banker), Rated: A
Last year 32% of credit-seeking small businesses applied to an online lender, up from 19% in 2016, according to the survey, which was released Tuesday. Over the same period, large banks, small banks and credit unions all saw either steady application rates or a slight decline in interest from those same small businesses, which typically had fewer than 10 employees.
Mastercard Redefines Choice at Checkout with Acquisition of Vyze (Business Wire), Rated: A
Mastercard (NYSE: MA) today announced it has acquired Vyze, a technology platform that delivers more choice – and purchasing power – to people who want their point-of-sale payment options to match the flexibility and convenience of today’s shopping experiences.
Increasingly, consumers are seeking alternative financing options,1 leaving merchants and financial institutions with a need to deliver these services at the point of sale. In the U.S. alone, these solutions represent a more than $1.8 trillion opportunity, according to Accenture.
Earnest Launches Private Student Loans (PR Newswire), Rated: A
Earnest today announced that it’s modernizing student loans with a new in-school student lending offering.
Built based on feedback from students and people with student debt, an Earnest student loan incorporates four unique differentiators:
- Innovative eligibility check – A quick two-minute eligibility check requires only basic personal information, school details, and an estimated credit score.
- Cosigner invite – Earnest’s application makes it simple and easy to invite a cosigner to the process.
- Checkout – Clients can customize their loan according to their individual financial needs with easy-to-understand terms and a clear understanding of their monthly payments after graduation.
- 9-Month grace period – Earnest found through talking with recent graduates that they wanted the flexibility of a longer grace period after graduation to get settled. Earnest offers a 9-month grace period after graduation compared to the 6-month industry standard.
Banks turn to a former rival to jump-start digital platforms (American Banker), Rated: A
In the “If you can’t beat ‘em, join ‘em” world of bank-fintech relations these days, TD Bank’s recent agreement with the online lender Avant fits right in.
Avant is expanding its efforts to license technology to traditional banks, and TD Bank in March announced it will use the Chicago company’s technology platform, called Amount, to power the bank’s unsecured loan product, TD Fit Loan. HSBC, Regions Banks and Banco Popular also use Amount.
Digital Lending Companies Considering Stricter Credit Approvals (Investing News), Rated: A
Over the past decade, the digital-lending industry has evolved to become more sophisticated. For example, companies are integrating big data and proprietary algorithms to analyze a borrower’s credit risk score in a matter of seconds, according to Juniper Research.
According to the firm, MPLs are projected to generate US$588 billion in loan origination value annually by 2023. This is estimated to account for 41 percent of SME funding around the world.
7 Smart Ways To Invest $ 1,000 (Forbes), Rated: A
2. Lend to those in need and earn some interest.
Lending Club is one such peer-to-peer lending service I tried out, and I found it to be very easy to use and reliable (see my
Nearly 60% Of Millennials Look To Lottery For Retirement, Survey Says (FA-Mag), Rated: A
The odds of winning the $654 million Mega Million prize last year were put at one in 302 million, while the $345 million Powerball offered one chance in 292 million. But those astronomical odds apparently haven’t deterred the many Americans who are banking on using a lottery jackpot for their retirement nest egg.
Thirty-one percent of Americans don’t invest because they think it’s risky, but 39 percent, including 59 percent of millennials, feel it’s reasonable to think of the lottery jackpot as a potential means of retirement, according to the survey.
Miillennial men in particular (66 percent) believe the lottery is a reasonable retirement plan, compared to 58 percent of millennial women. However, if they did win the lottery, more millennial men (61 percent) than women (42 percent ) would save or invest the entire amount.
Direct Lending Investments Had Over 950 Investors (deBanked), Rated: A
Documents filed in a New York Supreme Court case by the receiver managing Direct Lending Investments (DLI), revealed that DLI had more than 950 investors worldwide with collective investments on the books totaling over $780 million.
No-income, no-asset mortgages are back (at one lender, at least) (Housingwire), Rated: A
And now, NINA loans are back, as 360 Mortgage Group announced this week that it is launching a no-income, no-asset mortgage pilot program.
Some online lenders charge 900% interest and ignore Virginia law. So borrowers are suing. (Pilot Online), Rated: A
A loose-knit group of Virginians, stung by triple-digit interest rates on payday and other loans, is trying to do what the General Assembly won’t — make sure all lenders, including online ones, follow Virginia laws.
The latest lawsuit, filed last week, alleges that four web sites — Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial and Majestic Lake Financial — set up in the name of the Habematolel Pomo of Upper Lake tribe in northern California were actually operated by non-tribal members in a Kansas City suburb, including the son of a payday loan executive convicted of fraud and racketeering.
Lendio Franchise Opens in Phoenix to Expand Access to Capital for Local Businesses (Lendio), Rated: B
Lendio has announced the opening of a new Lendio franchise in Phoenix. Through the Lendio Franchising program, Sam Foreman will help local businesses apply for loans, review their options and secure funding, easing the financial hurdles for area small business owners.
(Ocrolus), Rated: B
Ocrolus today announced a partnership with BlueVine. BlueVine leverages Ocrolus technology to accelerate growth and scale operations efficiently, creating a faster and more seamless experience for its customers.
United Kingdom
Peer-to-peer lender Funding Circle’s loans under management soar to record highs (City A.M.), Rated: AAA
Loans under management grew 44 per cent to £3.4bn compared to £2.3bn in the first quarter of the previous year, and revenue growth soared by 40 per cent.
The firm reported that loan originations were up 23 per cent from £525m in the first quarter of 2018 to £644m between January and March this year.
Salary Finance raises $ 32.8m, hires SoFi co-founder for US push (Finextra), Rated: AAA
Salary Finance, a UK-based startup focused on salary-linked savings and loans for employees, has raised $32.8 million and hired SoFi co-founder Dan Macklin for a US expansion.
Welendus closes funding round as it prepares for India expansion (P2P Finance News), Rated: A
WELENDUS, the peer-to-peer lender focused on short-term loans, has closed its last seed funding round, as it prepares to expand into India.
City watchdog readies new rules for cryptoassets and P2P (FN London), Rated: B
The Financial Conduct Authority is prepping new rules for cryptoassets and peer-to-peer lending, two rapidly growing areas of fintech.
China
China’s P2P lending platform Dianrong raising $ 100m (Deal Street Asia), Rated: AAA
Shanghai-based peer-to-peer lending platform Dianrong is looking to raise $100 million in fresh funding, according to a Financial Times report, a move that should give it enough buffer to meet China’s strict capital requirement for P2P players.
The GIC-backed firm has not made any official statement about its fundraising plan but analysts said the move is part of the firm’s efforts to meet Beijing’s proposed Rm500 million ($74.5 million) capital requirement for P2P operators nationwide.
National Rules on Online Lending Still Far From Sight (Caixin Global), Rated: A
It will not be soon for China’s commercial banks, consumer finance service firms and other institutions to see a national regulation governing internet-based lending activities, despite recent progress on specific rules for online peer-to-peer lending and microloans, Caixin learned.
Large P2P lenders ordered to ready disclosures for regulators (technode), Rated: A
Large platforms with loan balances of more than RMB 5 billion ($750 million) must register with the information disclosure database by the end of May.
European Union
Tech unicorn Klarna could quickly be prepared to contemplate bourse itemizing (Infosurhoy), Rated: AAA
Swedish tech unicorn Klarna is nearing the point where it could seek a stock market listing, but it’s unlikely to be this year, the CEO and co-founder of the fast-growing online payments services firm said.
Klarna Expands Relationship with Acne Studios (Business Wire), Rated: B
The Stockholm-based fashion house Acne Studios has expanded their existing European partnership with Klarna. Showing at Paris Fashion Week, Acne Studios encompasses women’s and men’s ready-to-wear, shoes, accessories and denim, but also moves across the borders of fashion, art and design. With Klarna now available in Acne Studios’ online store, shoppers in the U.S. can choose to checkout with four equal payments – with no interest or fees.
Linked Finance marks record quarter (Tech Central), Rated: AAA
The first quarter of 2019 saw the platform provide more than €11.3 million in loans to Irish SMEs, an increase of 32% over the same period last year.
Since its establishment in 2013, Linked Finance has helped provide more than 2,000 loans and €92 million in funding to businesses across Ireland. Lenders who have supported SMEs through the platform have earned more than €7.1 million in interest and received more than €50.4 million in repaid principal since the business launched in 2013.
Linked Finance issued its largest loans ever in the quarter with a number of €300,000 loans provided. The average loan increased to €70,000.
Total Online Alternative Finance Grows 36% Topping €10 Billion (Crowdfund Insider), Rated: AAA
According to CCAF, in 2017 the alternative finance market grew by 36% to € 10.44 billion – dominated by the UK.
Excluding the UK, European online alternative finance industry grew 63% from €2.06 billion to €3.37 billion in 2017.
The top three European markets following the UK, include:
- France at €661 million
- Germany at €595 million
- The Netherlands at €280 million
- The Nordic countries collectively generated €449 million, making them the third-largest regional market in Europe following France and Germany.
Read the full report here.
Top 5 Real Estate Stocks To Invest In (Prague Post), Rated: A
But before I share these top real estate crowdfunding companies, I would first want to tell you about the characteristics which a best performing real estate should have. Well, they must have:
- Pricing power
- High usage rates
- Regular dividend
International
Challenger banks overtake traditional banks in customer satisfaction, in 4 charts (Tearsheet), Rated: AAA
Challenger banks have leapfrogged to the forefront in overall customer satisfaction, according to a new study from FIS.
63 percent of direct bank customers report being “extremely satisfied”, compared to 52 percent of credit union customers and just 19 percent of customers of the top 50 global banks.
73 percent of all consumer interactions with banks in the US are done digitally.
Nearly two-thirds (65 percent) of younger millennials (between ages of 18 and 26) reported that they have not used any branches at all in the prior month.
Australia
April holidays to negatively impact 1 in 4 SMEs (My Business), Rated: AAA
According to new research commissioned by SME lender OnDeck, Australia’s small to medium enterprises (SMEs) are bracing for “a double whammy” of disruption from the back-to-back Easter/Anzac Day public holidays.
Over one in four (27 per cent) of SMEs expect the Easter/Anzac Day period to disrupt normal trading.
LET’S TALK: THE BIG 4 BANKS (Dynamic Business), Rated: A
Leo Tyndall, CEO and Founder Marketlend
In the wake of the Royal Commission we’re seeing a tightening of finance for SMEs with even long time customers being turned away for loans. For years, banks have taken too long and required too much, like property collateral, from SMEs. Innovations like marketplace lending are giving SMEs transparent and prompt access to.capital when they need it.
Stephen Barnes, Principal at Byronvale Advisors Pty Ltd
I would say that the term ‘redundant’ may not be so appropriate but certainly through a number of factors the ‘Big 4’ may be less able to meet the needs or timeliness requirements of small business. A large number of small business owners need to use personal assets, usually the family home, as security for loans.
India
P2P firms seek RBI relaxation on lending limit (Business Standard), Rated: AAA
A little more than a year after the Reserve Bank of India (RBI) came out with guidelines for peer-to-peer (P2P) lending companies to convert into non-banking finance companies (NBFCs), micro and small enterprises (SME) lending has turned out to be the focus area for these companies.
However, the current regulation does not allow a single lender to lend more than Rs 10 lakh across P2P platforms at a time. This is hampering growth prospects, say P2P players. The association of P2P lenders has sought relaxation in the norm, and requested the RBI to raise the limit to Rs one crore, according to sources in the industry.
Fintech startups spot a lucrative space in ‘open banking’ (Economic Times), Rated: A
Asia
Riding the Korea FinTech Wave (Finextra), Rated: AAA
South Korean Financial Services Commission (FSC) has identified three sectors — payments, data, and lending — to protect consumers, foster fintech innovation, and ultimately remove uncertainties that may restrict investments into Korea.
Legal Framework Around Marketplace Lending
South Korea is a country that has gone through two economic crises which has made banks extremely conservative especially in terms of lending. As such, 40% of the population cannot receive loans from tier one banks and must resort to secondary markets such as savings banks with extremely high interest rates above 20% and shady underground loan sharks.
Cambodia, Singapore In X-Border FinTech Pact (Cambodia Daily), Rated: A
Deputy Managing Director of MAS Jacqueline Loh said the relationship demonstrates a FinTech that may extend to other countries in the ASEAN region.
MENA
A ROADMAP FOR FINTECH FIRMS ENTERING FAST-GROWING EMERGING MARKETS (LendIt Fintech), Rated: AAA
This paper provides case studies and market analysis from the Arab Middle East and Africa as examples of fast-growing economies, open to best-in-class solutions, with both wealthy and underbanked populations. Key go-to-market findings serve to inform fintech firms, investors and others about participating in the region.
Download the report here.
Canada
TORONTO FINTECH, LENDIFIED, RAISES $ 15 MILLION CAD SERIES A (Betakit), Rated: AAA
Lendified, a Toronto-based FinTech, announced today that it has closed a $15 million CAD Series A funding round, in order to continue its growth within Canada.
The round was co-led by WD Capital Markets and INFOR Financial, and saw funding from CI Financial Corp., Windsor Private Capital, FirePower Capital, and a group of investors including Glenn Murphy, founder of FIS Holdings and former CEO of Gap Inc. and Shoppers Drug Mart.
Latin America
How sky-high interest rates are choking economic growth in Brazil (The Brazilian Report), Rated: AAA
Brazilian Credit Card Interest Rates: Enough to Choke a Horse or Risk Based Pricing? (Payments Journal), Rated: A
Bank accounts for consumers is still relatively low, with only 68%, compared to 79% in China. Debit cards, however, outpaced credit by 2:1.
While you may see a slight uplift in the U.S. and U.K markets, consider this:
- Annual consumer rates for credit cards topped 270 percent for unpaid balances.
- As Brazil suffered its worst economic crisis in history, the banks raised credit card rates to a stunning 500 percent per annum on unpaid bills.
- With Brazilians relying on credit an paying for everything from everyday goods to luxury items in installments, massive interest rates are being embedded into these payments.
Authors:
The post Thursday April 18 2019, Weekly News Digest appeared first on Lending Times.
Thursday April 4 2019, Weekly News Digest
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.
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. Women in fintech demolish glass ceiling.
United States
- Affirm raises $300 million. A recent announcement shows Affirm developing a relationship with Walmart.
- Affirm to hire in San Francisco.
- LendingClub charged with privacy violations. Specifically, the charge is a violation of the Gramm-Leach-Bliley Act.
- Anthony Noto of SoFi. Interview with Lend Academy’s Peter Renton. See the transcript of the podcast.
- How the U.S. economy is slowing. From PeerIQ.
- LendingTree’s March 2019 debt report. Detailed. Great charts. A must-read.
- PayPal invests in blockchain startup. Is this dipping the toe in the water? Will we see PayPal taking crypto payments any time soon? Or is this a one-time investment?
- Zillow opens home lending arm.
- Earnin under investigation in New York. Given the sentiments on payday lenders, whether or not you consider Earnin in that category, this was bound to happen.
- BlockFi interest account customers get first payouts.
- Crypto lenders push no-tax perk of Bitcoin loans.
- Atomic Capital makes aggressive offer on crypto loans.
- SME bank Novo snags $4.8 million in funding.
- Blend to deepen bank ties.
- Will millennials allow non-banks a foothold in finances?
- Success Member is an online loan marketplace franchise.
- Marcus product head resigns.
- Tradeweb raises $1.1 billion.
- Direct Lending Investments gets hit with class action.
- Pagaya enters real estate sector.
- White Oak Commercial Finance adds origination talent.
- Charles Schwab to offer digital investment advice by subscription.
United Kingdom
- Funding Circle issues 187 million GBP securitization. It’s good to see this.
- Zopa legacy portfolio drags.
- Starling Bank raises 75 million GBP.
- Monzo mulls 11 GBP per month premium offer.
- Monevo review.
- FCA warns against P2P isas. Again.
- WageDay Advance is a smaller type of Wonga.
- Five ways to add IFISA diversity.
- Income properties.
- Finastra adds chief people officer.
European Union
- Fellow Finance facilitates 18.2 million euros in March loans.
- Finleap acquires Penta.
- CoinLoan enables fiat loans with crypto assets as collateral.
International
Other
- China: Regulators to pilot P2P lender registration program later in 2019.
- Canada: OnDeck merges with Evolocity.
- Australia: Neobanks target UK rivals scale.
- India: P2P lending.
- South Africa: TymeBank launches Max, a conversational AI for finance.
- Singapore: LCV Trade Finance fund on track.
- Latin America: Fintech unicorns.
- Australia: Brokers urged to seize SME opportunities.
News Summary
- United States
- Max Levchin’s Affirm raises $ 300 million (Axios), Rated: AAA
- PayPal co-founder’s fintech company scores $ 300 million, plans massive hiring in S.F. (Biz Journals), Rated: A
- FTC Privacy and Data Security Report for 2018 (JDSupra), Rated: AAA
- Anthony Noto of SoFi (Lend Academy), Rated: AAA
- US Economy Slowing (PeerIQ), Rated: AAA
- LendingTree Debt Report – March 2019 (LendingTree), Rated: AAA
- PayPal Makes Its First-Ever Investment in a Blockchain Startup (CoinDesk), Rated: A
- Zillow is now a mortgage lender, launches Zillow Home Loans (HousingWire), Rated: A
- A payday lender in disguise? New York investigates the Earnin app (American Banker), Rated: A
- Crypto Lending Platform BlockFi’s Interest Account Customers Receive Their First Interest Payments (Bitcoin Exchange Guide), Rated: A
- Crypto lenders push no-tax perk of leveraging bitcoin for cash (American Banker), Rated: A
- Atomic Capital Goes On The Attack With New Crypto Loan Offer In The Market (Bitcoin Exchange Guide), Rated: A
- New $ 4.8m funding for SME bank Novo (Fintech Futures), Rated: A
- Blend seeks to deepen bank ties with account opening product (American Banker), Rated: A
- Will Millennials Bring Non-banks into Their Finances? (deBanked), Rated: A
- Best low cost franchises to get into (BM Magazine), Rated: A
- Goldman Sachs’ Marcus Loses Product Head (PYMNTS), Rated: A
- Tradeweb Raises $ 1.1 Billion in Year’s No. 2 IPO in U.S. (Bloomberg), Rated: A
- Class Action Lawsuit Filed Against Brendan Ross, Direct Lending Investments, and Others (deBanked), Rated: A
- AI-Powered Asset Manager Pagaya GoesAfter Real Estate (Institutional Investor), Rated: A
- White Oak Commercial Finance Adds Origination Talent in Texas (AP News), Rated: B
- Charles Schwab Now Offers Investment Advice Digitally via Subscription (Subscription Insider), Rated: A
- United Kingdom
- Funding Circle back in securitisation market with £187m deal (P2P Finance News), Rated: AAA
- Zopa legacy portfolio drags on P2PGI performance (P2P Finance News), Rated: AAA
- Will more challenger banks evolve as banking as a service providers? (Tearsheet), Rated: A
- Monzo, following Revolut and N26, mulls new £11 per month premium offering (AltFi), Rated: A
- How to join the rush for a last‑minute Isa (The Times), Rated: A
- Monevo Review – An Excellent Place to Begin Your Loan Search (DoughRoller), Rated: A
- FCA warns that P2P Isas are ‘high risk’ (Money Observer), Rated: A
- Payday lending isn’t over yet – and now its victims are being shortchanged yet again (Independent), Rated: A
- Five ways to add IFISA diversity (P2P Finance News), Rated: A
- 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
- Finastra welcomes Sharon Doherty as Chief People Officer (Techapeek), Rated: B
- China
- Regulators to pilot P2P lender registration program in back half of 2019 (technode), Rated: AAA
- European Union
- Fellow Finance’s platform facilitated 18,2 million euros of loans in March (GlobeNewswire), Rated: AAA
- Finleap acquires German challenger bank Penta (Fintech Futures), Rated: A
- CoinLoan Enables Borrowers to Obtain Fiat Currency Using Cryptoassets as Collateral (Cardrates), Rated: A
- International
- Women in Fintech Demolish Glass Ceiling (Lend Academy), Rated: AAA
- Onfido scores $ 50 million investment (Finextra), Rated: A
- Australia
- Australian neobanks target scale of UK rivals without growing pains (AltFi), Rated: AAA
- Brokers urged to seize opportunities in SME space (TheAdviser), Rated: A
- India
- P2P lending (Invest in India), Rated: AAA
- Southeast Asia
- LCV TRADE FINANCE FUND ON TRACK WITH AN ADDITIONAL US$ 14.8MIL TO SUPPORT SMES IN SINGAPORE (Digital News Asia), Rated: A
- Canada
- OnDeck merges Canadian ops with Evolocity (Finextra), Rated: AAA
- South Africa
- For South Africa’s first challenger bank, conversational AI isn’t just a nice-to-have (Tearsheet), Rated: AAA
- Latin America
- Why Fintech Startups Are Rapidly Becoming Unicorns in Latin America (Next Billion), Rated: AAA
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
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.
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.
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
LCV TRADE FINANCE FUND ON TRACK WITH AN ADDITIONAL US$ 14.8MIL TO SUPPORT SMES IN SINGAPORE (Digital News Asia), Rated: A
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:
The post Thursday April 4 2019, Weekly News Digest appeared first on Lending Times.
Thursday February 28 2019, Weekly News Digest
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.
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 housing market compared to today. Personal loan interest rates for February 2019. Why Midwest BankCentre created a separate digital-only bank. Some bankers are worse off than in 2009. Dragon Victory International analysis.
United States
- SoFi to offer crypto trading through Coinbase partnership. This is the most interesting news story of the week. The largest cryptocurrency exchange partnering with one of the largest marketplace lenders to offer cryptocurrency trading will be a huge feather in the cap for both companies.
- Walmart now offers Affirm loans. We saw this one coming. In fact, I wonder why it took so long. Affirm snagging Walmart as a customer will catapult it to PayPal status fast.
- More on Affirm’s, Walmart’s partnership.
- Affirm CEO breaks it down.
- 2019 securitization update, Square charter status. Square is finally seeing some opposition to its banking aspirations. Excellent analysis from PeerIQ.
- The housing market of 2009 compared to today. A LendingTree analysis showing the markets where median home values have increased the most and the least. California is hot. The Mid-Atlantic and Eastern states are not.
- Personal loan interest rates for February 2019. A great breakdown from Nerdwallet.
- Why a small bank launched a separate digital-only branch. I think we’re going to see more of this. As more consumers demand digital banking, and Millennials are all over it, more brick-and-mortar banks will see the opportunity to launch digital-only branches as separate entities. It’s actually a smart move.
- SoFi to offer zero-fee ETFs.
- FTC orders SoFi to stop misleading consumers.
- Figure raises $65 million.
- Gen Xers have the largest auto loan burden.
- Elevate Credit posts earnings results.
- Elevate’s CIO wins award.
- Hunt Real Estate Capital buys RealtyMogul’s loan underwriting program.
- Kabbage says it’s prepared for the coming recession.
- Kabbage named one of the top workplaces among midsize companies in Atlanta.
- CrowdStreet has new self-directed IRA offering.
- Liquid P2P, Interest Radar partner.
- Direct Lending Investments suspends investor withdrawals.
- HSBC partners with Neptune Financial.
- Venmo debuts rainbow-colored card.
- Mastercard says digital identities will be very important in a few years.
- Credit Karma wants to be known for more than free credit scores.
- Brex launches credit card for e-commerce.
- YieldStreet raises $62 million.
- Guaranteed Rate listed as top loan originator.
- Americans focus on debt management more than retirement savings.
- Banking regulator challenging New York on fintech charters.
- Blockchain can be used for P2P lending.
- LoanStreet makes new hires.
- White Oak Business Capital hires new head of markets.
United Kingdom
- Funding Circle fund adds firepower for buyback strategy.
- Orca Innovative Finance ISA launches.
- Experian backs off ClearScore merger.
- NatWest launches account aggregation.
- Open Banking could boom in 2019.
- Wonga reaches from beyond the grave.
- What you need to know about crowdfunding developments.
- Aave launches bill pay platform for crypto.
International
- Some bankers are worse off than in 2009. A look at global IPOs.
- Report on how marketplace lending is still a growing and dynamic market. A must-read from DBRS.
- Enova expands worldwide credit access.
- Blossom Capital gets $85 million from Robinhood, Funding Circle investors.
- How lending can earn your Bitcoin online. I’d like to see a service where small lenders can lend fiat and earn Bitcoin.
Other
- India: LenDenClub crosses 1 million borrower, lender milestone. Congratulations! Excellent achievement.
- Mexico: PayPal to expand small business loans into country with new partnership. PayPal has begun its slow expansion internationally. Could it someday be a global powerhouse?
- China: Analysis of Dragon Victory International. A very interesting look from Seeking Alpha.
- Latin America: ID Finance Latam revenues climb 403%.
- India: Why startups, investors see big potential in lending.
- Ireland: Grid Finance suspends investments below 100,000 euro.
- Brazil: N26 expands into Brazil.
- China: Is the Chinese P2P lending boom over?
- Singapore: Fintech investments rose to $365 million USD in 2018.
- India: UDS ban will benefit P2P lending.
- Australia: How should accountants talk about fintechs?
- Singapore: Validus Capital raises $15 million for SME financing.
- China: BHB raises $20 million using fake bios of founding team.
- Africa: Fintechs inspire with mobile technology.
- China: Futu Securities downsizes U.S. IPO.
News Summary
- United States
- Fintech Startup SoFi to Roll Out Crypto Trading Via Partnership With Coinbase (CoinTelegraph), Rated: AAA
- Millennial online lender SoFi to offer zero-fee ETFs, an unexpected rival for index fund giants Vanguard, iShares (CNBC), Rated: A
- FTC orders SoFi to stop misleading consumers (MPA Mag), Rated: B
- Digital lender founded by ex-SoFi CEO raises $ 65M to fuel expansion (American Banker), Rated: A
- Walmart teams with Affirm to offer point-of-sale loans (American Banker), Rated: AAA
- Affirm’s latest partnership brings its alternative financing to Walmart’s US stores and website (TechCrunch), Rated: A
- Loan app Affirm CEO breaks down new Walmart partnership (CNBC), Rated: A
- ABS Vegas – 2019 Securitization Update; Square Charter Status (PeerIQ), Rated: AAA
- The Housing Market’s 10 Year Challenge — Comparing The Housing Market of 2009 to Today (LendingTree), Rated: AAA
- Gen Xers Carry the Biggest Auto Loan Burden; Study Finds (One World Herald), Rated: A
- Personal Loan Interest Rates for February 2019 (Nerdwallet), Rated: AAA
- Elevate Credit (ELVT) Posts Earnings Results, Meets Expectations (Fairfield Current), Rated: A
- Hunt Real Estate Capital buys RealtyMogul’s proprietary loan underwriting program (Housing Wire), Rated: A
- Elevate’s Joan Kuehl Named Dallas ORBIE CIO of the Year (The Progress), Rated: B
- A Recession Coming? Small Business Lending Platform Kabbage Says It’s Prepared (Forbes), Rated: A
- Here’s more on the AJC Top Workplaces midsize companies (AJC.com), Rated: B
- Diversifying a Self-Directed IRA Made Simple with New Offering from CrowdStreet (The Progress), Rated: A
- Liquid P2P and Interest Radar Announce Strategic Partnership (Liquid P2P), Rated: A
- Direct Lending Investments Suspends Investor Withdrawals (Lend Academy), Rated: A
- Fintech deal will provide access to midsize businesses in U.S. (American Banker), Rated: A
- Venmo debuted a limited-edition rainbow-colored card (Business Insider), Rated: A
- Why digital identities will be so important in the next few years, according to Mastercard’s vice chairman (CNBC), Rated: A
- Credit Karma’s Dana Marineau: ‘We want users to think of us as more than just free credit scores’ (Tearsheet), Rated: A
- Why this small bank created a separate, digital-first brand (American Banker), Rated: AAA
- The Future Is Plastic: Fintech Unicorn Brex Launches New Credit Card For E-Commerce Merchants (Forbes), Rated: A
- YieldStreet raises $ 62M to democratise alternative investments in shipping, real estate and more (TechCrunch), Rated: A
- Guaranteed Rate Leads Mortgage Executive Magazine’s List of Top Loan Originators in America (GlobeNewswire), Rated: A
- Americans Focus On Debt Management But Lose Focus On Retirement Savings (Forbes), Rated: A
- U.S. banking regulator fights NY lawsuit over fintech charters (Reuters), Rated: A
- Blockchain and data protection: the main concerns (JDSupra), Rated: A
- LoanStreet positions for growth with new hires (LoanStreet Email), Rated: B
- White Oak Business Capital Hires Carol Bader Apicella to Expand Northeast and Mid-Atlantic Markets (GlobeNewswire), Rated: B
- United Kingdom
- Funding Circle fund adds firepower for buyback strategy (AltFi), Rated: AAA
- Orca Innovative Finance ISA Launches, Enables Diversified P2P Investment (Crowdfund Insider), Rated: AAA
- Experian, ClearScore scrap merger plans (Reuters), Rated: A
- NatWest launches account aggregation as Open Banking takes hold (AltFi), Rated: A
- Will Open Banking boom in 2019? (AltFi), Rated: A
- Aave Launches Platform to Pay Bills Using Crypto (Finance Magnates), Rated: A
- Investing in crowdfunded development projects – what you need to know (Property Investor Today), Rated: A
- Failed Lender Reaching ‘From Beyond The Grave,’ MPs Warn (Law360), Rated: A
- International
- Some Bankers Are Doing Even Worse Than in 2009 (The Washington Post), Rated: AAA
- Marketplace Lending – A Growing and Dynamic Global Market (DBRS Email), Rated: AAA
- Bank on it: How Enova’s software expands credit access worldwide (Built in Chicago), Rated: A
- Blossom Capital scores $ 85m from Robinhood and Funding Circle backers (AltFi), Rated: A
- Eight Simple Ways to Earn Bitcoin Online Legally (The Crypto Updates), Rated: B
- European Union
- Grid Finance suspends taking investments below € 100,000 (Irish Times), Rated: AAA
- China
- Dragon Victory International: Exposure To The Chinese Crowdfunding Market At A Regulatory-Driven Discount (Seeking Alpha), Rated: AAA
- China Fintech Today: The P2P Boom Is Truly Over (SupChina), Rated: A
- A Crypto Project That Raised $ 20 Million Is Caught Faking Its Founding Team (CoinDesk), Rated: A
- Tencent-backed brokerage firm downsizes US IPO amid weak market demand (Technode), Rated: A
- Australia
- How should accountants talk to clients about fintechs? (In the Black), Rated: A
- India
- LenDenClub crosses 1,00,000 borrowers and lenders milestone (News Barons), Rated: AAA
- Why Do Fintech Startups and Investors See a Huge Potential in Lending? (Entrepreneur), Rated: AAA
- Banning of UDS to benefit P2P Lending Industry (Inventiva), Rated: A
- Asia
- Singapore fintech investments rose two-fold to US$ 365m in 2018 (SBR.com.sg), Rated: AAA
- Validus Capital raises $ 15m for SME financing (Fintech Futures), Rated: A
- Latin America
- PayPal expands its small business loans initiative to Mexico (Leaprate), Rated: AAA
- ID Finance eyes ‘pivotal moment’ for Latam fintech as revenue in region climbs 403% (Fintech Finance), Rated: A
- Challenger bank N26 expands to Brazil (Fintech Futures), Rated: A
- Africa
- How FinTech Companies Inspire Africa With Mobile Technology (PYMNTS), Rated: AAA
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
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.
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
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.
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.
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.
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.
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.
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.
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:
The post Thursday February 28 2019, Weekly News Digest appeared first on Lending Times.
Portrait of a Marketplace Lending Investor
Alternative lending start-ups have entered mainstream consumer and SMB lending, but have yet to establish themselves as additions to traditional fixed income portfolios for investors. Marketplace lenders started out as peer-to-peer lenders, but institutional capital and accredited investors are now accounting for the lion’s share of lending capital on such platforms. Direct Lending Investments, LLC […]
Alternative lending start-ups have entered mainstream consumer and SMB lending, but have yet to establish themselves as additions to traditional fixed income portfolios for investors. Marketplace lenders started out as peer-to-peer lenders, but institutional capital and accredited investors are now accounting for the lion’s share of lending capital on such platforms. Direct Lending Investments, LLC (DLI), a growing and active participant in this developing world of private credit, focuses on buying loans and extending loans to alternative lending platforms and other business partners. In particular, the firm provides credit to the growing sectors of the market that are no longer served by traditional bank lending and, more importantly, structures its funding in a way so that the originator takes on default risk.
Inspiration and founding
Brendan Ross, the founder and CEO of DLI, first began investing in marketplace lending personally and on behalf of his clients through Lending Club (LC) and Prosper loans. In 2012, he launched DLI to expand his investment horizon beyond peer-to-peer lending, which he has since moved away from altogether. The firm’s inaugural deal in November of 2012 was with IOU Financial, a SMB loan originator. Since then, the firm has expanded to include receivables as well as real estate and consumer loans in its portfolios, and has grown to over $900 million in assets under management.
Regulatory premium
DLI targets segments, such as small business lending, which are not well served by traditional banks for their capital needs. These areas have what Mr. Ross calls a “regulatory premium” where legislation or regulation has disrupted historical financing methods. This premium allows these lenders to earn higher returns as they do not have to compete with banks, which previously served this market segment. Areas that DLI has identified with regulatory premiums include small business lending, receivables, consumer lending, and real estate.
Customer acquisition
Direct Lending strives to work with lenders that acquire borrowers in a unique way, instead of going down the overcrowded, undifferentiated path of acquiring borrowers through direct mail or from brokers. By emphasizing disintermediation and proprietary customer acquisition, the firm identifies business partners with competitive advantages in their industry. Being able to bring down customer acquisition costs is an important differentiator for a platform, and often, it is a boon to the credit worthiness of the platform.
Shift in investment structure
Over time, DLI has shifted its emphasis from buying loans directly to extending credit facilities to single purpose entities that loans and other financial assets originated by the originator. The assets serve as collateral, and the risk of individual defaults lies with the originator. This structure is designed to provide DLI’s capital with a strong first position with regard to the originator’s assets and align incentives between DLI and its business partners. In addition, various credit enhancements, such as corporate guarantees, may be utilized in each agreement. This is a markedly different approach than acquiring loans directly from originators, which do not share any of the credit risk once the loan is off their books.
Carving its own niche
DLI seeks to capitalize on inefficiencies in the lending market for its investors. The strategy may be seen by investors as a form of diversification from high yield debt, emerging market debt, and business development companies. In the niche area of private debt, there are many large companies with massive AUMs like KKR, BlackRock, Fortress, Ares and Apollo, but the company believes in quality rather than quantity and feels that performance and agility within the space is more important than contending with the largest private debt managers.
DLI over banks
Although bank capital, or a securitization, can be a cheaper source of financing for originators, it involves rigid formalities. What gives DLI the upper hand is it provides a higher loan-to-value ratio as compared to banks, and is more flexible in structuring relationships. Bankers are not typically comfortable with any tweak in their borrowers’ business models, whereas DLI understands that it is important to be nimble. This additional maneuverability has proven extremely dear to Silicon Valley start-ups and gives DLI a leg up against its banking counterparts.
Edge over its rivals
Direct Lending Investments, unlike some competitors, does not insist upon warrants or any equity stakes in its business partners; instead, it is focused on earning a high ROI and, in the process, providing lenders with unprecedented flexibility to utilize their own equity.
Founder and legal team
Brendan Ross, Founder and CEO, has been a C-level executive prior to launching DLI. He has been responsible for nurturing and turning around many businesses, including Reserve America, Fanfare Media Works, and Razorgator. He started his career at Mercer Management Consulting (now Oliver Wyman) and later started investing in consumer loans through Lending Club and Prosper in 2011.
DLI has an in-house legal team, which allows it to examine loan deals faster and more thoroughly. Research is headed by Dr. Bryce Mason, who is well known for his elaborate analysis of Lending Club loan history and was also the founder of P2P Picks. The team roster is expected to increase from 24 to 40 within the year. DLI’s ability to identify best in class originators with proprietary customer flow, coupled with a structure focused on strong capital protection without taking any originator equity is a win-win for both the originators and the limited partners.
Authors:
Written with Heena Dhir.