Thursday December 5 2019, Weekly News Digest

Prosper monthly originations

News Comments Today’s main news: SoFi gets BitLicense in New York. Funding Circle unveils 250M GBP securitization of SME loans. Zopa raises 1.4M GBP. RateSetter to close family finance product. RMBS gears up for securitization windfall. Reserve Bank of India raises P2P lending limit by 5x. Today’s main analysis: Prosper performance update – October 2019. […]

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Prosper monthly originations

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News Summary

United States

Prosper Performance Update – October 2019 (Prosper), Rated: AAA

Highlights from the report include:

  • In October, 64% of originations were rated AA-B. The dollar‑weighted average FICO on the platform was 720, relatively flat month‑over-month.
  • The weighted average income of borrowers on the platform in October was ~$106K, relatively flat month-over-month.
  • The weighted average borrower rate for October originations increased 30 bps month-over-month largely due to a shift in Prosper Rating mix.
Source: Prosper

See the full report here.

New York Gives SoFi Green Light on BitLicense (SoFi), Rated: AAA

New York State Department of Financial Services (NYDFS) has approved SoFi’s BitLicense application, allowing SoFi Invest customers in New York to trade cryptocurrencies on its platform through SoFi Digital Assets, LLC.

FT Partners’ CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA

FT Partners recently announced our role as exclusive financial advisor to 

Source: FT Partners

Financings

Source: FT Partners

See the full report here.

Online Lending Platform Refines the Science of Underwriting (CFO.com), Rated: AAA

Through the use of artificial intelligence, Upstart examines approximately 1,600 variables pertaining to loan applicants, says CFO Sanjay Datta. But he doesn’t like to draw attention to the artificial intelligence per se.

In a Nov. 8 report, Kroll rated the performances of five loan securitizations, worth a cumulative $1.5 billion, that Upstart offered from mid-2017 through early this year. Each one has significantly outperformed Kroll’s forecast at the time of the deal.

Kroll predicted that Upstart’s first securitization, dated June 21, 2017, would experience 13.07% credit losses by October 2019. But the actual losses were only 9.96%, 24% better than forecast.

Kabbage data places Vermont at third-highest small business revenue growth in the first half of 2019 (Vermont Biz), Rated: AAA

Kabbage placed Vermont at the third-highest in the nation at 173.90 on the Kabbage Index Value, based on monthly median-revenue growth for small businesses.

The Kabbage Index Value (KIV), a value used to track revenue growth of small businesses, increased almost 22 points, from 136.8 to 158.4 points, indicating U.S. small businesses’ median revenue grew 15.7% in the first six months of the year. This represents a 22% increase compared to the same time period in 2018 and a large contrast from the second half of 2018 when small business revenue only grew 1.8 percent.

Source: Kabbage

StreetShares Discontinues Major Segment of Its Financing Business (deBanked), Rated: A

StreetShares quietly discontinued a major part of its financing business on November 15, a new disclosure filed with the SEC revealed.

The company has only facilitated $180 million in funding to small businesses since inception in 2014. That would indicate that the invoice factoring portion was roughly half of the company’s funding volume.

Monzo hires Visa exec to lead US push (ZangPay), Rated: A

Monzo has hired a Visa executive — who was previously with Standard Chartered — to lead its US business as it ramps up efforts to become a fully-fledged bank in the country even though complex rules have deterred some rivals, according to the FT.

There’s a better way to regulate small-dollar lending (American Banker), Rated: A

Innovation in online lending has shifted consumers away from traditional payday lenders. And while that’s a safer bet, the shift has also sparked a misguided policy conversation around online lending that is focused on the wrong thing: capping interest rates.

Bad Credit? Regulators Back Ways for Risky Borrowers to Get Loans (WSJ), Rated: A

Consumers with spotty or no credit histories might find it easier to get loans after federal banking regulators endorsed alternatives to traditional methods of assessing creditworthiness.

The regulators on Tuesday backed the use of information such as borrowers’ cash flow as an alternative to the traditional credit-evaluation system, which relies on scores issued by companies such as Equifax Inc. and Experian PLC based on applicants’ past history of borrowing and repayments.

Assets managed by robos up 10% so far in 2019 to $ 283 billion (Investment News), Rated: A

Assets managed by digital advisers grew 10% over the first three quarters of 2019 to reach a total of $283 billion, according a new report from Aite Group, a consulting firm.

Fintech Lending Stocks Have Been a Bust. Here’s Why. (Barron’s), Rated: A

Fintech lenders were supposed to be the next big thing in finance. Big data, machine learning, peer-to-peer platforms, social networking data: the list of buzzy new ideas that were supposed to upend the business of money lending went on and on.

Bank Regulators’ Proposals Won’t Erase Madden Uncertainty (Law360), Rated: A

These Funding and Business Assistance Programs Are Helping Felons Restart Their Lives (Stamford Advocate), Rated: A

1. Prosper

Prosper is a peer-to-peer lending platform. The entire process is online, with no background check. Hence criminal history does not affect getting a loan.

2. HelpForFelons.org

HelpForFelons.org has lists of grants and loans for felons and links to reentry programs around the country.

More students from higher-income families taking out student loans (Marketplace.org), Rated: A

Whether their families are higher income, lower income, or somewhere in between, a majority of all students today take out loans to cover at least part of their undergraduate degree. Which wasn’t always the case.

In fact, over the last 20 years, the percentage of students from higher-income families — defined here as making more than $114,000 a year — who take out loans to get a bachelor’s degree has more than doubled, from 30% in the mid-1990s to 60% now, according to a new report out Wednesday from the American Enterprise Institute. The percentage of students from low-income families who take out loans is higher, just over 75%, but hasn’t increased nearly as much since the 1990s.

Source: Marketplace.org

Crypto lender hires local mayor to smooth over regulatory hurdles (Decrypt), Rated: A

Cred, a crypto lending and borrowing platform, announced earlier this week that it has added a local California mayor to its roster to further boost government relations for its business.

Ally Medina, mayor of Emeryville—a city in California, will lead the company’s strategic government relations and business development initiatives.

Payday Lender Curo Group Can’t Derail Securities Class Action (Bloomberg Law), Rated: A

Curo Group Holdings Corp. failed to shake off a proposed shareholder class action after the District of Kansas found sufficient allegations that the company didn’t disclose facts that were bound to impact its financial performance.

Curo Can’t Ditch Investor Suit Over Canada Products (Law360), Rated: B

Source: Law360

Elevate Credit to Attend the Jefferies’ Crossover Consumer Finance Summit (BusinessWire), Rated: B

Elevate Credit, Inc. (NYSE: ELVT), today announced that its Chief Executive Officer, Jason Harvison, and Chief Financial Officer, Chris Lutes, will attend the Jefferies’ Crossover Consumer Finance Summit on December 12, 2019 at The New York Lotte Palace Hotel. Mr. Harvison and Mr. Lutes will be available for 1×1 meetings with investors.

Harvard University and ArborCrowd Partner to Host Panel That Examines the Future of Commercial Real Estate Investing (Yahoo! Finance), Rated: B

On Tuesday, November 20, Harvard University’s Real Estate Development Club together with ArborCrowd (the “Company”), the first crowdfunding platform launched by a real estate institution, hosted a panel of experts at Harvard University to discuss the future of commercial real estate investing. The panel was attended by graduate students interested in pursuing a career in commercial real estate.

Finicity Solution Live Within Ellie Mae Encompass Consumer Connect (Markets Insider), Rated: B

Finicity, a provider of real-time financial data access and insights, and Ellie Mae, the cloud-based platform provider for the mortgage finance industry, today announced that Finicity’s digital Verification of Assets (VoA) solution is now available through Ellie Mae’s Encompass Consumer Connect, part of the Encompass Digital Lending Platform.

United Kingdom

Funding Circle Unveils £250 Million Securitization of SME Loans With Waterfall Asset Management (Crowdfund Insider), Rated: AAA

Marketplace lending company Funding Circle (LSE:FCH) recently unveiled its £250 million securitization of SME loans with Waterfall Asset Management. The duo reported that the portfolio brings the total amount of UK Funding Circle loans securitized to £1 billion and the deal will notably open up the small business loans asset class to an even wider range of investors such as insurance companies and pension funds.

Is the current share price of FTSE fintech company Funding Circle a bargain buy? (The Motley Fool), Rated: A

On, average Funding Circle collects 4.86% of the total amount of new loans generated annually as transaction revenue and 0.82% of the annual principal balance of loans under management in servicing fees.

Fintech Zopa raises £140m just in time for banking licence (Yahoo! Finance), Rated: AAA

Financial technology company Zopa has raised £140m, just in the nick of time to meet a key requirement of its provisional banking license.

Zopa announced on Tuesday it had secured the investment from IAG Capital, a US investment group that first backed the online lender in 2018.

Zopa valuation fall hits Augmentum Fintech but other gains buoy portfolio (AltFi), Rated: A

Zopa has seen its valuation fall by 47 per cent following its latest fundraise to a new money valuation of £188m.

The trust wrote down £10.3m in the value of Zopa and its share price has fallen has fallen 4.67 per cent as a result today.

Zopa Bank fundraising delays ‘not down to P2P lending concerns’ (P2P Finance News), Rated: A

ZOPA’S struggle to raise last-minute funding so it can launch its banking brand should not be seen as a sign of trouble for the peer-to-peer lending sector, an analyst claims.

RateSetter to close family finance loan product (P2P Finance News), Rated: AAA

RATESETTER is to stop offering its family finance product from the new year.

Uncapped raises £10M to offer revenue-based finance to growing businesses (TechCrunch), Rated: A

Uncapped, a London-headquartered and Warsaw-based startup that wants to provide “revenue-based” finance to growing European businesses, is officially launching today and disclosing that it has raised £10 million in funding.

UK start-up Student Finance raises €1.15m to tackle university loans (Fintech Futures), Rated: A

Educational technology start-up Student Finance has raised €1.15 million in a seed funding round led by Seedcamp and Mustard Seed Impact.

Growth Street CEO exits (AltFi), Rated: A

Greg Carter, the CEO of Growth Street, has stood down from his role.

Carter, who co-founded the business in 2014, is to remain with Growth Street in an advisory role, the company said.

Finastra joins World Economic Forum (Finastra), Rated: B

Finastra today announced that it has joined the World Economic Forum. The move will see the company collaborating with industry leaders and policy-makers to drive change across financial services, world trade and beyond, to help build a better, sustainable future.

China

China gradually cleans up P2P lending businesses (Ecns.cn), Rated: AAA

Southwest China’s Sichuan Province became the country’s latest province to ban all peer-to-peer lending (P2P) businesses amid regulators’ tightened grip on the internet financial industry due to monetary risks.

European Union

Securitization: RMBS gears up for windfall (Euromoney), Rated: AAA

Volumes have picked up since then, and RMBS-related issuance is forecast to reach $100 billion in 2019, up from $86 billion in 2018, according to Standard & Poor’s. However, the market is still a shadow of its former self. The banks still dominate mortgage lending, but not nearly to the extent that they used to. Most are quick to point out that their online disruptors have yet to perform through a cycle.

The banks still dominate mortgage lending, but not nearly to the extent that they used to. Most are quick to point out that their online disruptors have yet to perform through a cycle.

It’s securitization, but not as we knew it (Euromoney), Rated: A

There is no more ‘originate to distribute’, the grand name for the strategy behind so much of the dysfunctional lending that drove the sub-prime residential mortgage-backed securities (RMBS) crisis.

Today banks provide funding to a growing army of private and buy-side institutions that make the loans, and the banks then arrange securitization exits for them.

German fintech N26 targets IPO in 4-5 years (Reuters), Rated: A

German fintech N26, valued at $3.5 billion in its latest funding round, views a stock market listing as an attractive option, but rather in 4-5 years than in the short-term, its Germany head told Reuters.

Klarna Bank picks Amazon for expanded cloud services (American Banker), Rated: A

In a move to aid faster expansion and provide more security and regulatory compliance tools, Klarna Bank in Sweden is strengthening its longtime relationship with Amazon Web Services by making it the bank’s preferred cloud provider.

Klarna says it will leverage the AWS global infrastructure to support its scale, now at 60 million customers across 170,000 merchants in 17 countries.

European FinTech: the next generation trend setter (Finextra), Rated: A

Despite the influence of the US, we are finding something quite different when exploring the way the FinTech market is evolving. European technological innovation is having a profound effect on the approach US companies are taking, reversing the well-known ‘cultural influencing trend.’

International

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

The total volume for the reported marketplaces in the table adds up to 658 million Euro.

Source: P2P-Banking

How in-branch video banking enhances customer service experience (Bob’s Guide), Rated: A

While they turn to online banking, and given the rise in digital transformation, the most customers still appreciate the need for financial advice face-to-face, especially for complex transactions or help. Accenture’s recent study of financial service consumers show that on average two-thirds of consumers favour face-to-face interaction with their bank.

A 2018 study supported by the retail banking industry group EFMA, Vidyo and CUNA Strategic Services suggested more customers would be willing to use in-branch video (90 percent) than online video banking (85 percent).

Crypto Loans See Solid Growth, Platforms Attract Community Interest (CoinTelegraph), Rated: A

Today, the entire crypto loaning industry is estimated at $4.7 billion and the number of crypto loan platforms is growing rapidly, according to a report made by blockchain company Graychain Ltd. While lenders have only earned a combined $86 million in interest since 2018, the demand for cryptocurrency loans is growing. In the first quarter of 2019, over 5,400 new loans were issued, and in the second, at least 18,500. The volume of lending also increased, with lenders issuing $64.8 million in loans in the first quarter and $159.3 million in the second.

Source: CoinTelegraph

OpenID Foundation Launches New Microsite Focused on Open Banking and Fintech Developers (OpenID), Rated: B

The OpenID Foundation has launched a new microsite focused on global open banking initiatives and providing resources for fintech developers implementing the Foundation’s Financial-grade API (FAPI).

Australia/New Zealand

Peer-to-peer lending and crowdfunding 2019 data published (Scoop), Rated: AAA

The Financial Markets Authority (FMA) today published its third statistical report on peer-to-peer lending (P2P) and crowdfunding services in New Zealand.

Year-on-year, there were 34% fewer successful crowdfunding offers and 52% less investment from licensed service investors.

India

RBI Raises Peer-To-Peer Lending Limit Fivefold (Bloomberg Quint), Rated: AAA

India’s central bank has raised the lending cap for peer-to-peer platforms fivefold, providing a boost to such lending.

The aggregate exposure of a lender to all borrowers at any point of time, across all non-banking financial company-peer-to-peer platforms, will be capped at Rs 50 lakh against Rs 10 lakh at present, the Reserve Bank of India said in a statement on Developmental and Regulatory Policies issued on Dec. 5.

A 30-year-old company is disrupting the loan marketplace business in an old-fashioned way (Economic Times), Rated: A

MyMoneyMantra is taking on rivals like BankBazaar and Paisabazaar head on. The company is growing its giant distribution network even as it swiftly expands its digital footprint to scale faster. But its physical network will remain the core business. A digital-only model just doesn’t deliver, believes its founder.

Xiaomi announces launch of digital lending solution Mi Credit in India (The News Minute), Rated: A

Xiaomi on Tuesday announced Mi Credit, its digital lending solution in India. Mi Credit is Xiaomi’s second Mi Finance solution to be launched in India after Mi Pay.

Xiaomi Offers Digital Lending Marketplace For Young Indian Consumers (PYMNTS), Rated: B

The new venture is an app called Mi Credit, and it’s a marketplace for personalized lending, offering users credit between Rs 5,000 ($70) and Rs 100,000 ($1,400). Xiaomi said it offers a “low” interest rate.

Online lending segment to witness consolidation in next 5-6 months: CASHe’s Ketan Patel (IBS Intelligence), Rated: A

The NBFC (non-banking financial company), which lends to the young salaried segment with a monthly income of Rs 15,000 and upwards, is already profitable. With a monthly run-rate of 19000 loans, the lender has  30,000 unique customers. Its CEO Ketan Patel, who had spent 18 years in Kotak Mahindra Bank before joining CASHe, told IBS Intelligence that as long as lenders use technology to focus on strong underwriting, they need not worry about collections or NPAs.

Asia

FinAccel raises $ 90 million for low-fee lending app (Impact Alpha), Rated: AAA

FinAccel’s mission is to improve financial inclusion across Southeast Asia’s “vast and fast growing middle class”. Its starting point is Indonesia, where most of the country’s 265 million people lack access to formal financial services but do have a cell phone.

Indonesian P2P lender Komunal bags seed money in East Ventures-led round (Tech in Asia), Rated: A

Indonesian peer-to-peer lending company Komunal secured an undisclosed amount of seed funding in a round led by East Ventures, with local VC firm Skystar Capital also participating.

Latin America

Goldman Makes Biggest Mexico Fintech Bet With MercadoLibre Loan (Bloomberg), Rated: AAA

Goldman Sachs Group Inc. agreed to lend $125 million to Mercado Credito, the bank’s third loan to a Latin American fintech this year and the biggest ever in Mexico.

MercadoLibre dominates Latin American e-commerce with an almost 25% market share and 40 million unique monthly visitors, Julie Chariell, a senior analyst at Bloomberg Intelligence, said in a November report. It’s based in Argentina, but almost two-thirds of its $603 million in third-quarter net revenue came from Brazil, according to the company’s financial statements. Its market value more than doubled this year to $29 billion.

The borrower, a unit of MercadoLibre Inc., plans to use the money to triple in about one year its $100 million working-capital portfolio provided to small and midsize companies in Mexico, Martin de los Santos, a senior vice president, said in a phone interview.

The Next SMB Lending Frontier (Nexoos), Rated: AAA

Source: Nexoos

See the full white paper here.

SoftBank pours $ 100M into Mexico’s Konfio (TechCrunch), Rated: A

Three months after Goldman Sachs lent $100 million to Mexican fintech Konfio, SoftBank has invested another $100 million into the financial services company. The investment confirms Reuters’ August report that SoftBank was in advanced talks with the startup — now one of the most heavily funded fintechs in Mexico.

Brazilian FinTech Rebel Lands $ 10M For Affordable Loan Products (PYMNTS), Rated: A

Rebel, a Brazilian FinTech that offers unsecured credit to middle-class citizens in the country, has raised $10 million in new equity funding, according to a press release.

Africa

Consumer credit scoring is the latest African fintech sector to get funding with $ 20 million for Migo (Quartz Africa), Rated: AAA

Migo, a fintech startup offering credit-as-a service to large companies, has raised $20 million in a Series B round led by Brazil-focused venture firm, Valor Capital Group. The round also saw participation from existing investors including The Rise Fund and Velocity Capital. It follows a $13 million Series A round in August last year.

Africa’s fintech boom is creating niche ecosystems to power the industry’s future globally (Quartz Africa), Rated: A

In the inaugural edition the Global Fintech Index City Rankings, four African cities are identified among the top 100 fintech ecosystems globally.

City Global Finech Index City rank
Johannesburg, South Africa 62
Nairobi, Kenya 63
Lagos, Nigeria 71
Cape Town, South Africa 87
Accra, Ghana 123
Kigali, Rwanda 132
Kampala, Uganda 168

Authors:

George Popescu
Allen Taylor

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Thursday November 21 2019, Weekly News Digest

LexinFintech Vintage Curve

News Comments Today’s main news: SoFi helps Pro.com make home improvement loans. BlueVine raises $102.5M. OCC, FDIC propose Madden fixes. Zopa gets banking license. Twino CEO stands down, platform hits 1B euro in loans issued. Today’s main analysis: LexinFintech lending business analysis (A MUST-READ). Today’s thought-provoking articles: Fed rate inversion. 10 cities that cost money […]

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

LexinFintech Vintage Curve

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United States

United Kingdom

European Union

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News Summary

United States

Pro.Com Partners with SoFi to Make Home Improvements Even Easier (PR Newswire), Rated: AAA

Pro.com, the premier digital platform focused exclusively on building custom homes and major remodels from start to finish, announced a new partnership Tuesday with online personal finance company SoFi, aimed at revolutionizing how homeowners finance and complete their remodels, renovations and upgrades.

BlueVine raises $ 102.5M more for banking services that target small businesses (TechCrunch), Rated: AAA

The startup, which offers financing and other banking services to SMBs, today is announcing that it has raised $102.5 million, a Series F round of equity funding that is coming from a mix of financial and notable strategic investors.

Led by ION Crossover Partners, the round also includes existing investors Lightspeed Venture Partners, Menlo Ventures, 83North, SVB Capital, Nationwide (a major financial services player in the UK), Citi Ventures, Microsoft’s venture fund M12, and private investors; as well as new investors MUFG Innovation Partners Co., Ltd, O.G. Tech (the VC connected to Israeli billionaire and property magnate Eyal Ofer), Vintage Investment Partners, ION Group, Maor Investments and additional private investors.

FT Partners Advises BlueVine on its $ 102,500,000 Series F Financing (FT Partners), Rated: B

FT Partners served as exclusive financial advisor to BlueVine and its board of directors on its $102.5 million Series F financing

The OCC and FDIC Both Propose a Madden Fix (Lend Academy), Rated: AAA

There is finally some real light at the end of the tunnel. In the last two days we have heard from both the OCC and the FDIC on the Madden issue, something they called unfathomable in a joint amicus brief in Colorado a couple of months ago. They have each given notice of their proposal that would clarify the “valid when made” doctrine once and for all.

At the core of the issue is the ambiguity created by the Madden decision. A loan can be valid when it is made but if it is sold or transferred can suddenly become invalid in the Second Circuit states of NY, CT and VT. This has led to reduced consumer lending to these states and also concern that, given no regulatory clarity, this could expand to other states.

Here are links to the OCC and FDIC proposals. There will be a 60-day comment period where interested parties can weigh in.

Big Tech Race to Own Digital Wallet; GS Robo-advisor on Launchpad (PeerIQ), Rated: AAA

Refinance demand increased by 13% from the previous week and was 188% higher than a year ago, when rates were 114 basis points higher.

First-time inversion driven by the long-end…

Source: PeerIQ, Blackstone, St. Louis Federal Reserve

In regulatory news, lawmakers are taking aim at payday loan rates. Congress members plan to introduce federal legislation that would cap interest rates at 36%.

The next move for Facebook would be to offer lending products most likely indirectly (e.g., via POS partnerships or via co-brand products such as Amazon Chase Visa, etc.).

Insurance startup Vouch tacks on growth funding to serve startups (Pitchbook), Rated: A

Just two months ago, the ink was barely dry on a more than $24 million Series A that Sam Hodges raised for his startup Vouch Insurance. Now he is back with an even larger funding, led by Y Combinator‘s Continuity Fund, as the company seeks to join a crop of startups that cater to the needs of other startups.

Fireblocks Is Now Securing The Biggest Crypto Lending Company In The US (PR Newswire), Rated: A

Fireblocks (www.fireblocks.com), an enterprise platform for securing digital assets in transit, announced today, Celsius Network, the largest provider of interest income and digital asset loans in over 150 jurisdictions worldwide is enlisting Fireblocks to help protect over $400 million assets and 53,000 active wallets, securing both retail and institutional divisions.

5 Ways to Invest in Real Estate Online (The Motley Fool), Rated: A

The primary difference between using a crowdfunding site versus flying solo on your investment journey is that your investment is managed by a team of real estate professionals. Of course, that is also the biggest risk as you are completely dependent on the project developer to deliver what they promised.

If you are not an accredited investor but want to be involved in real estate crowdfunding, companies such as Fundrise, stREITwise, and RealtyMogul are a great place to start.

ArborCrowd Investors Receive Strong Returns on the Sale of Quarry Station Apartments (BusinessWire), Rated: A

ArborCrowd (the “Company”), the first crowdfunding platform launched by a real estate institution, announced today that its Quarry Station Apartments investment (“Quarry Station”) has been realized in under two years, providing investors with returns quicker and higher than initial projections. The property’s $49.35 million sale price generated an internal rate of return (IRR) of 20.31%, surpassing the original return target of 16% to 19%.

How Crowdfunding Has Changed the Game for Real Estate Investing (The Motley Fool), Rated: A

Through real estate crowdfunding, the developer can utilize an online platform that enables a large group of people to invest small dollar amounts in the project. If the development company chooses to follow the crowdfunding option, here’s how that could work:

  • First, the developer identifies an online platform that is suited to the company or mixed-use development. Each platform is different and most real estate crowdfunding sites receive significantly more project applications than they select.
  • If the investment passes all the legal, physical, and financial due diligence requirements the platform requires, that platform will then allow the developer to solicit funds using their site.
  • An investor can then use that platform to contribute financially to the development.
  • The funds are then tied up until the investor delivers on the project.

The 10 worst US cities for commutes that cost you time and money (Business Insider), Rated: AAA

Online loan marketplace Lending Tree published a report on the most expensive commutes in the 100 largest cities in the US in October.

Consider a resident in New York, which Lending Tree ranked as the city with the fifth most expensive commute. Using Lending Tree’s findings via 2017 Census Bureau data, the median annual earnings for a full-time employee in New York is $51,573; their hourly wage is $26. Now, consider the mean time of commuting one way, 41.8 minutes. If you make $26 per hour at your job, and you spend 83.6 minutes daily on your round-trip commute, then your time wasted commuting is worth $37 of time you would have been working.

Five cities in California – Oakland, San Jose, Irvine, San Francisco, and Fremont – took top 10 spots in the ranking, with four of those cities being in the increasingly expensive San Francisco Bay Area.

Read the full report here.

Fintech: The Fourth Platform – Part One (Forbes), Rated: A

While the first generation of fintech companies created billions of dollars of value, because of new enablers like Plaid, Cross River Bank, Finix and Wisetack, we’re now moving past that phase to one where fintech moves from being a business model unto itself, to being the fourth layer in the stack or the “fourth platform,” wherein financial functions like payments, lending and insurance join connectivity, intelligence and ubiquity as layers of the stack upon which new companies can be built.

Source: Forbes

Balboa Survey: Small Business Owners Anticipate Robust Black Friday (Monitor Daily), Rated: A

Online lender Balboa Capital released the results of its 2019 Black Friday Survey, which was conducted to examine how small business owners are preparing for this historically busy shopping day, and to find out what their Black Friday sales expectations are.

The survey reveals that 70% of small business owners are preparing for Black Friday early, and 83% anticipate meeting or exceeding their Black Friday sales goals. Balboa Capital’s survey was sent to a sample of small business owners in a wide variety of industries during the first week of November 2019.

American Financial Exchange, LLC (AFX) Announces AMERIBOR on the Blockchain (Mondovisione), Rated: A

American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced today the launch of its AMERIBOR on the blockchain. AFX now mints two ERC-721 non-fungible tokens for each AMERIBOR transaction on the AFX platform (for each counterparty to the transaction).  The pair of tokens is automatically minted when the transaction is repaid by the borrowing counterparty to the lending counterparty. Each token contains encrypted transaction data and encrypted counterparty data. The counterparty data is normalized prior to encryption to further preserve counterparty anonymity.

5 Best Alternatives to Traditional Savings Accounts (Nerdwallet), Rated: B

The pros. Peer-to-peer lending tends to be a win-win: Investors get a higher rate of return on their money than a lot of banking products offer, and borrowers get an interest rate on their loan that’s usually less than bank-offered loans and credit cards.

The cons. Peer-to-peer lending won’t give you quick access to your cash if you need liquidity.

Alchemy Partners with Plaid to Enhance Loan Decisioning and Fraud Detection Capabilities (PRWeb), Rated: B

Alchemy, one of the SaaS fintech lending infrastructure companies, has partnered with Plaid to support businesses in account and asset verification for improved lending decisioning.

United Kingdom

UK peer-to-peer lender Zopa gets banking license as it looks to compete with industry giants (Stock Daily Dish), Rated: AAA

British peer-to-peer lender Zopa has obtained a U.K. banking license, clearing a key hurdle in its bid to launch a digital bank and compete with industry giants.

Business Loans Marketplace Funding Xchange Raises $ 10.4 Million via Round Led By Downing Ventures, Gresham House Ventures (Crowdfund Insider), Rated: A

Funding Xchange (FXE), a company that helps people and organizations find suitable business loans and funding options from its marketplace of more than 45 established lenders, has raised £8 million (appr. $10.4 million) through an investment round.

London-based mobile credit card company Tymit secures £4m in funding (AltFi), Rated: A

Tymit, the London-based mobile-enabled credit card company, has secured £4m in a funding round, which it will use to develop its customer service offering.

Arbuthnot Commercial ABL supports EA-RS Fire Engineering’s acquisition of Circum with £2m facility (Business-Money), Rated: A

Arbuthnot Commercial ABL, the specialist asset based lending arm of Arbuthnot Latham, has completed a £2m asset based lending (ABL) transaction in support of the strategic acquisition of Circum Ltd, a fire protection services specialist, by EA-RS Fire Engineering Ltd. (“EA-RS”). The facility comprises a flexible confidential invoice discounting line and a term loan.

Crowd2Fund’s first EIS-approved funding round goes live (P2P Finance News), Rated: A

CROWD2FUND has launched its first funding round since being granted Enterprise Investment Scheme (EIS) approval from HMRC.

The platform has already raised 19 per cent of its target from current shareholders and has now opened the £1.2m fundraise to private investors.

Buzzy finance startup Starling Bank has lost another senior employee amid an exodus of executives (Business Insider), Rated: A

Starling’s head of banking compliance Rachel Coote has quit to join startup Paybase. Coote is the sixth senior employee to leave the buzzy finance company in 2019.The company’s chief financial officer Tony Ellingham has confirmed he will also depart within the next year.

Trading giant Robinhood makes its UK debut in Revolut challenge (City A.M.), Rated: A

US fintech Robinhood, a commission-free trading startup valued at $7.6bn (£5.9bn), has today arrived in the UK.

Users will be able to invest in more than 3,500 US-denominated stocks, including Apple, Amazon and Tesla. They will also be able to access foreign stocks that are available to trade in dollars through depository receipts, such as Barclays and Burberry.

OakNorth Bank completes GBP3.54m loan to fund aparthotel development in London (Property Funds World), Rated: B

The finance will be used to fund the acquisition of a mixed-use property at 68‐86 Clapham Road in Oval, and in its place, develop an aparthotel with between 120-175 units, subject to receiving planning permission. The site is located within walking distance of several Zone 1 underground stations – Oval, Stockwell and Vauxhall – as well as the South Western railway line, providing services to Clapham, Waterloo, Guildford, etc.

Crypto Lending Platform Nexo Joins FIO, As Usability Remains Top Priority (Chipin), Rated: B

Nexo, the dominant player in the crypto lending space, is joining the Foundation for Wallet Interoperability (FIO), the industry consortia bringing together leading companies in the blockchain ecosystem to solve the biggest problem faced by the industry — usability.

China

LexinFintech: A Rare Quality (Seeking Alpha), Rated: AAA

LexinFintech (LX) reported a solid set of Q3 results with loan origination growing 170% y/y that resulted in a beat on both revenue and EPS. More importantly, loan origination guidance was increased to RMB115-125b vs. the prior forecast of RMB115b.

Source: Seeking Alpha

Overall, asset quality remains stable at the end of Q3 with delinquency rate declining 9bps to 1.4% and the 6-month charge-off rate maintained at just above 2%.

Source: LexinFintech

Institutional funding has reached 75% of the total loan balance. In terms of origination, institutional accounts for 94% of the total loans originated, meaning that LX’s own P2P platform Juzi Licai is becoming less relevant going forward.

Source: LexinFintech
European Union

Twino CEO stands down, as Latvian lender swings into black (AltFi), Rated: AAA

Twino founder Armands Broks is to standing down as CEO and will now focus on new business opportunities and bringing talent on board.

The management change comes as Twino, which offers European investors investment opportunities in unsecured European consumer loans, reports pre-tax profits of €13m  (£11m) for 2018, compared to a €7.2m (£6.2m) loss the year previous.

Twino has also disclosed that it has also issued loans to the value of €1bn (£860m), since it was set up 10 years ago, half of the value of which have been issued in the past three years.

The Best Crowdlending Platforms (The African Exponent), Rated: A

Smart Lenders AM Launches New Investment Fund Specialized in Marketplace Lending (Crowdfund Insider), Rated: A

Smart Lenders AM announces the upcoming launch of a new fund dedicated to financing loans to European SMEs issued through marketplace lending platforms (crowdlending).

Real Estate Crowdfunding Platform EstateGuru Partners with Ober-Haus on Market Research (Crowdfund Insider), Rated: A

Real estate crowdfunding platform EstateGuru and OberHaus, real estate agency operating across the Baltic region, have joined together to produce shared real estate market research and analysis with a specialized focus on the needs of the crowdfunding platform.

International

Profits and Losses of P2P Lending Marketplaces 2017 and 2018 (P2P-Banking), Rated: AAA

Source: P2P-Banking
Australia

What does a competitive mortgage rate look like in November 2019? (finder), Rated: A

The lowest fixed rate in Finder’s database right now is 2.68%, a single basis point lower than the lowest variable. This is unusual (the lowest three year fixed rate this time last year was 3.74%).

Another online lender I spoke to was fine with apartments in the same suburb but didn’t offer pre-approval. This meant I would have to start a full application with them even before I had found a place to buy. For some borrowers, this can be a significant turn-off.

Asia

Ant Financial eyeing S’pore digital bank licence (The Straits Times), Rated: AAA

Billionaire Jack Ma’s Ant Financial Services Group said it may apply for a virtual banking licence in Singapore, a move that would add a heavyweight contender to the race.

OneConnect leads Southeast Asia’s sustainable financing with two smart lending platforms (Yahoo! Finance), Rated: A

OneConnect Financial Technology Co. Ltd. (OneConnect), today announced it is leading Southeast Asia’s sustainable financing with the launch of two smart lending platforms – SeekCap, the Philippines’ first lending platform that helps the underserved micro, small and medium enterprises (MSMEs) manage cashflow and grow their business, as well as a multi-finance platform that will empower millions of unbanked and underbanked Indonesians with easy access to loans to finance their purchase of vehicles essential for their daily transportation so as to improve mobility and their lives.

MSMEs form the backbone of any economy. In the Philippines, more than 99% of all businesses are MSMEs and they contribute to almost 63% of total employment. Yet, at present, only 9% of loans and financing from the country’s major banks go to MSMEs.

Latin America

Brazilian Digital Bank Neon Raises $ 95 Million (Crowdfund Insider), Rated: AAA

Brazilian Digital bank Neon has reportedly raised $95.27 million in a funding round led by Banco Votorantim and the General Atlantic fund. This is according to a write up in Estado.

Neon claims a customer base of 2 million users. The additional funding will help the digital bank grow with expectations to triple that number by 2020.

How Brazil is leading Latin America’s fintech revolution (Business Insider), Rated: A

There were 380 fintechs operating in the country in May 2019, per Finnovista, and around two-thirds (64%) of Brazilian consumers are defined as fintech adopters by EY — a rate that’s level with the global average and higher than the majority of G7 countries’.

  • Smartphone and internet penetration: Three-quarters of Brazilians used smartphones in 2017, which is expected to tick up to 86% by 2025 — and both figures are the highest across the region.
  • High fees charged by incumbentsBrazil’s four largest banks control almost 80% of the country’s deposits, with similar concentrations in credit and assets.
  • A large underserved population: Around 45 million people in the country don’t have access to or have not used a bank account in the past six months.

Why Mexico’s Fintech Sector Will Be One to Watch in 2020 (Next Billion), Rated: A

The economy in Mexico remains largely informal and cash dependent. An estimated 44% of the adult population in Mexico owns no financial products. This largely unbanked population, coupled with the new fintech legislation, has created immense opportunities for Mexico’s fintech sector to grow. In fact, roughly 100 new Mexican fintechs were established in 2018 alone, representing 52% growth for the industry. Mexico has become a regional leader with more than 273 fintech ventures operating in the country. When combined with Brazil’s 380 fintech ventures, the two countries make up 56% of the region’s total fintech activity.

Authors:

George Popescu
Allen Taylor

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

Thursday November 14 2019, Weekly News Digest

Mintos P2P lending

News Comments Today’s main news: OnDeck prices $125M securitization. Kabbage issues $200M in ABS notes. LendInvest expands buy-to-let to Scotland. Celsius surpasses $4B in crypto lending. ID Finance raises 4.95 GBP on Crowdcube. IOU Financial releases 3- and 9-month financial results. Today’s main analysis: Why the banking system is broken. Today’s thought-provoking articles: Productivity trends […]

The post Thursday November 14 2019, Weekly News Digest appeared first on Lending Times.

Mintos P2P lending

News Comments

United States

United Kingdom

International

European Union

News Summary

United States

OnDeck Announces Pricing of $ 125 Million Securitization (OnDeck), Rated: AAA

On Deck Capital, Inc. announced today that it has priced $125 million initial principal amount of Series 2019-1 Fixed Rate Asset-Backed Notes (the “Notes”) in a private securitization transaction. The Notes, which will be issued in five classes, were priced with a weighted average fixed interest rate of 3.04% per annum. It is expected that DBRS, Inc., in satisfaction of one of the closing conditions, will rate the Notes at closing. The anticipated AAA(sf) DBRS rating for the Class A Notes would be the highest rating ever for a class of notes in an asset-backed securitization of small business loans in the online lending industry.

Source: OnDeck

Kabbage issues $ 200M in additional notes to 2019-1 ABS series (Asset Securitization Report), Rated: AAA

Online small-business lender Kabbage is adding $200 million in additional notes for its outstanding $700 million Series 2019-1 revolving securitization that was originally issued in March

The largest tranche is the $138.1 million in additional Class A notes that will carry a 3.825% coupon with a preliminary AA rating from Kroll, and will bulk up the AA-rated Class A tranche of $483.4 million in notes already in circulation. The additional notes will also benefit from 34.88% credit enhancement applied to the earlier tranche.

Rob Frohwein on the Growth of Kabbage, from Lending to Payments (The Financial Revolutionist), Rated: A

Is this different from PayPal or Square, which are offering small business lending based on the flows of receipts through their platforms?

“WHEN A SMALL BUSINESS OWNER GETS COMFORTABLE WITH THE FACT THAT THEY CAN TURN THE SYSTEM ON, AND IT WILL ANALYZE CASH FLOW AND TAKE ACTIONS IN A WAY THAT IS IN THE BUSINESS’S BEST INTEREST, THAT IS THE HOLY GRAIL OF WHAT WE ARE TRYING TO ACHIEVE”.

We realize the big payment platforms that have gotten into lending have a relatively clear view of money coming in, to the extent that those transactions happen over their technology, although small business owners often use multiple payment systems. But they don’t have a strong understanding of outflows. Business owners can connect Kabbage to key data, receipts of cash, payment processors, or receipts in the bank account, account data we have access to, as well as what we see through sources like Quickbooks. We often see cash flowing out in the bank account, so we get a pretty good view of both sides of the account. We can predict when their cash flow will ebb, and we can inject capital when there is going to be a drop below a specified level.

Productivity Trends, LC Q3 Earnings (PeerIQ), Rated: AA

The labor department released the latest productivity data, which showed a contraction in productivity – a 30 bps decline in the recent quarter (vs +90 bps growth expectation), the biggest decline in 4 years. Economists have attributed the surprise decline to the ‘cat memes’ and Instagram. (#wekid.)

Below we show an excerpt of long-run productivity growth. Takeaways:

  • Long-run US GDP and productivity growth is at a lower trend level (2.3%) than observed during the 1960+ period (3.1%)
  • This means that the ‘speed limit’ for GDP and income growth is about ~2% (consistent with 10-year bond yields of ~1.9% – another rough correlation for growth)
Source: PeerIQ, Blackstone, St. Louis Federal Reserve

Deserve, a FinTech startup, led by CEO Kalpesh Kapadia, raises $50 million in funding led by Goldman Sachs.  Deserve is a lending-as-a-service infrastructure provider that sells their platform to firms that want to offer their own branded cards. Sallie Mae, Accel, Aspect Ventures, Pelion Venture Partners and Mission Holdings also invested in the Series C round.

LendingClub Beats Earnings, Markets Expect Q4 GAAP Profitability

The earnings are a milestone in that it is the first time that LC experienced a positive adjusted net income since the turnaround Sanborn led since becoming CEO in 2016.

Some highlights:

  • Revenue also topped records at $204.9 million, up 11% year over year.
  • LendingClub crossed a record $3.3 billion in originations for the quarter, up 16% year over year
  • GAAP net loss of just $400,000 compared to the prior year period where they lost $22.8 million. Analysts expect Q4 GAAP profitability
  • Adjusted net income came in at $8 million, up from a loss of $7.3 million, in the prior year period.

Consumers Poised to Continue Strong Credit Activity this Holiday Season (Markets Insider), Rated: AAA

New TransUnion (NYSE: TRU) data from the just-released Q3 2019 Industry Insights Report point to a few factors that could portend good things for retailers this holiday season.

TransUnion found that private label card originations increased 2.4% to 12.4 million in Q2 2019 (latest data available), marking the first such year-over-year increase in 11 quarters. Origination growth is being driven by prime and above consumers, with their share of new accounts growing faster than non-prime borrowers. The number of new bank-issued credit cards also rose in Q2 2019, increasing 5.2% to 16.6 million, the fifth straight quarter of yearly growth.

As a result of this growth, the number of consumers with access to revolving credit now stands at a record high 200.5 million consumers as of Q3 2019, up from 198.0 million in Q3 2018. On average, bank-issued credit card balances for individuals have grown to $5,668, while private label average card balances, per individual, grew to $2,022 in this timeframe.

Charging Up Credit Cards in November and December; Paying Them Down in the New Year

 Year
 
Q4 Bankcard
Balance Growth
 Percent of Bankcard
Debt Paid Down in the
Following Quarter
(Q1)
Q4 Private Label
Balance Growth

 
Percent of
Private Label
Debt Paid Down
in the Following
Quarter (Q1)
2018/2019 $31.9 billion 92% $6.6 billion 102%
2017/2018 $32.6 billion 84% $6.3 billion 94%
2016/2017 $33.3 billion 72% $8.5 billion 30%

Gen Z is turning around credit: Survey of NearPrime borrowers finds Gen Z FICO scores higher than Millennials & Gen X (LendingPoint Email), Rated: AAA

We recently analyzed just over 5 million NearPrime loan applications received between July 2018 and July 2019 to find that Gen Z, or those born after 1996, have an average FICO score that’s higher than both Millennials and Gen X. This is especially interesting when you consider that how long you’ve had credit is a key factor when it comes to credit scoring. And even with the duration of credit use playing a role in FICO scores, Gen Z is off to a strong start in building their credit profile.

Source: LendingPoint

Making upby 2020, this rising post-Millennial generation thinks about personal finance differently than any other age group, setting the stage for lasting change across the financial landscape.

What does Gen Z want personal loans for?

  • 3X more likely than a Millennial to apply for loans for a major purchase.
  • 2X more likely than both Gen X and Millennials to apply for loans for healthcare.
  • More than 2X more likely than a Millennial to apply for loans for auto needs.
Source: LendingPoint

LendingPoint No. 9 Fastest Growing Company in North America on Deloitte’s 2019 Technology Fast 500 (Yahoo! Finance), Rated: A

Data and technology platform LendingPoint today announced it ranked No. 9 on Deloitte’s Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and energy tech companies in North America and now in its 25th year. LendingPoint grew 8,812.87% since its start in 2015, hit successive usage records year-over-year and is now running $100 million per month in loan originations through its platform.

How Fintech’s Third Wave Will Change How You Bank (Fortune), Rated: AAA

The first wave met demands resulting from the aftermath of the financial crisis: A need for credit fueled alternative lenders. Online and peer-to-peer marketplaces, such as Prosper and LendingClub, flourished, while laid-off workers seeking to re-skill buoyed student loan providers like Social Finance, or SoFi.

The next wave swelled atop a flood of mobile devices that came after Apple debuted the iPhone in 2007. Access to consumers became the primary object for upstarts. Apps appealed to younger generations, used to flicking and tapping smartphone screens rather than visiting branch offices.

This paradigm is still in full swing. Some of its best-known champions: Credit Karma, a free credit score provider, Internet-only “neobanks” like ChimeMonzo, and N26, and online stock traders like Robinhood.

Even as the second wave crests, a third is beginning to rise: Automation.

Real Estate Investment Platform Fundrise Touts Performance Over Past 5 Years (Crowdfund Insider), Rated: A

Fundrise reports that during the past five year period, the platform portfolio has averaged a 10.79% return. In comparison,  Vanguard’s Total Stock Market ETF and Real Estate ETF produced average returns of 7.92% and 7.40%, respectively, states Fundrise.

The Future Of Real Estate Investing: Digital Assets Are Here, Now (Forbes), Rated: A

Some of the most proven use cases include agricultural supply-chain management and food safety, tokenization of real estate assets, foreign exchange transactions, immutable voting, interbank settlements, securing patient data and land registry. And the list goes on.

Be it company equity, asset-backed securities, cryptocurrencies or security token offerings (STOs), the age of digital assets is now, and they are real-deal investments, with 

Independent Community Bankers of America Supports Closure of Industrial Loan Charter “Loophole” to Eliminate “Shadow Banking” (Crowdfund Insider), Rated: A

The Independent Community Bankers of America (ICBA) has issued a statement of “strong support” regarding pending legislation targeting Industrial Loan Charters (ILC).

The Eliminating Corporate Shadow Banking Act of 2019 (S 2839) was introduced to the Senate Banking Committee yesterday sponsored by Senator John Kennedy.

Costs, Losses Soar At StreetShares (deBanked), Rated: A

StreetShares increased revenue by nearly 40% year-over-year, according to the company’s latest fiscal year 2019 filing, but costs soared and increased by almost 90%.

StreetShares reported a staggering $12.3M loss on only $4.4M in revenue. That loss was much wider than the previous year’s loss of $6.5M on $3.2M in revenue.

Reliant Funding Debuts Free Comprehensive Business Guide for Veteran-Owned Businesses (The Grunion), Rated: B

In honor of celebrating America’s heroes during the month of November, Reliant Funding announces the release of “The Complete Veteran Business Owner Resource Guide.” The informative, 40-page handbook serves to provide industry tips and resources for veterans on entrepreneurial journeys.

According to Bunker Labs, nearly 25 percent of transitioning veterans indicate they would like to start a business. Currently, over 2.5 million businesses in the US are majority-owned by military veterans. Since 2008, Reliant Funding has provided working capital to veteran owned businesses across the US.

To access the guide, click here.

Toast Launches Toast Capital To Help Restaurants Secure Loans (Crunchbase), Rated: A

United Kingdom

LendInvest expands Buy-to-Let offering into Scotland (Property Funds World), Rated: AAA

LendInvest has expanded its Buy-to-Let offering into Scotland as demand for long-term property finance in the Scottish housing market increases. 

The move comes months after the announcement that LendInvest has received GBP200 million in funding from the National Australia Bank for the business to expand its capacity to lend in the UK BTL market.

Celsius Network surpasses $ 4 billion in crypto loans (CryptoSlate), Rated: AAA

Celsius Network, a cryptocurrency lending platform, announced that it has surpassed $4.25 billion in loan origination. In a press release shared with CryptoSlate, the company said that it was a 93 percent increase from the $2.2 billion it recorded at the beginning of 2019.

Larger businesses can now get loans in new borrowing scheme (Elite Business Magazine), Rated: A

MarketInvoice has launched a new specialist team called Corporate Solutions to provide bigger loans for Britain’s larger businesses. Estimated to be a £13billion finance market, these businesses can now secure a credit facility of up to £5 million (based on their revenue) and up to £500K as a business loan on a flexible term of up to three years from MarketInvoice. These limits will increase steadily over the next 12 months.

MarketFinance Set to Transform Business Lending Industry (PR Newswire), Rated: B

MarketInvoice has today updated its name to MarketFinance. The fintech business lender established in 2011, has provided over £2.6 billion in lending to thousands of UK businesses.

MarketFinance current product suite

  • Invoice finance: All businesses can get finance for selected invoices or finance all of them on a rolling basis (up to £1m in finance).
  • Business loans: Qualifying business can access up to £250k over 1-3 years with monthly or weekly repayments. This will rise to up to £500k in the coming months.
  • Corporate lending: Larger businesses can access up to £5m in structured facilities combining invoice finance and a business loan.
China

Yirendai Digital Q3 2019 Earnings Preview (Seeking Alpha), Rated: AAA

  • Yirendai Digital (NYSE:YRD) is scheduled to announce Q3 earnings results on Thursday, November 14th, after market close.
  • The consensus EPS Estimate is $0.48 (-44.2% Y/Y) and the consensus Revenue Estimate is $259.41M (+59.0% Y/Y).
  • Over the last 2 years, yrd has beaten EPS estimates 100% of the time and has beaten revenue estimates 63% of the time.
  • Over the last 3 months, EPS estimates have seen 1 upward revision and 0 downward. Revenue estimates have seen 1 upward revision and 0 downward.

Tencent plans blockchain-based virtual bank on back of new Hong Kong licence (Fintech Futures), Rated: A

Chinese conglomerate Tencent is planning to launch a blockchain-based digital bank after being granted a licence by the Hong Kong Securities and Futures Commission (SFC).

Ping An fintech spinoff OneConnect Financial Technology files for a $ 100 million US IPO (Nasdaq), Rated: A

OneConnect Financial Technology, a Ping An-backed provider of operations management tools for financial firms, filed on Wednesday with the SEC to raise up to $100 million in an initial public offering.

Revenue for the nine months ended September 30, 2019 grew 72% to $222 million (33% gross margin); operating loss widened to -$160 million.

Alibaba’s Jack Ma Says Singles’ Day Shopping Results Miss Expectations (The Epoch Times), Rated: B

Alibaba Group Holding Inc. co-founder Jack Ma said on Nov. 13 results from the Singles’ Day annual online shopping festival had missed the Chinese e-commerce giant’s expectations.

Recent crackdowns on shadow banking—from insurance products to peer-to-peer lending—have likely put a dent in consumer income.

European Union

Fintech ID Finance Raises £4.95 Million on Crowdcube, Claims Record for Spain (Crowdfund Insider), Rated: AAA

ID Finance, based in Barcelona, has closed its crowdfunding round raising £4.95 million. The equity offering was listed on Crowdcube Spain and topped the previous record for equity crowdfunding in the country. ID Finance is an online lender, data and credit scoring company operating in Europe as well as Latin America.

According to the offering page, 1223 individual investors participated in the round which sought 5.76% equity at a pre-money valuation of £81,037,856. Investors averaged £4,049 of investment.

FinTech Comparative Guide (Mondaq), Rated: A

1.2 Do any special regimes apply to specific areas of the fintech space?

With regard to fintech credit platforms (ie, crowdlending, marketplace lending, peer-to-peer lending platforms), the Dutch legislature and the Netherlands Authority for the Financial Markets (AFM) have established a specific regime. Fintech companies that operate an online credit platform match lenders with borrowers when attracting a loan.

Nederland Crowdfunding has drawn up a code of conduct with which its members must comply. Through this self-regulatory code, which aims to ensure more transparent business operations, member platforms can distinguish themselves from other crowdlending platforms active in the Netherlands ().

As of September 2019, 44 lending platforms were registered in the public register of the Netherlands Authority for the Financial Markets. Peer-to-peer and consumer credit platforms, as well as crowdinvesting / equity platforms, are less active in the Dutch market.

French Crowdfunding Assocaition Appoints New Chairman (Crowdfund Insider), Rated: B

The French Crowdfunding Association (Financement Participatif France or FPF) has appointed Jérémie Benmoussa, co-founder of Fundimmo, as Chairman replacing Stéphanie Savel.

International

The Banks Have Gone Mad and the System is Broken (Hacker Noon), Rated AAA

Source: Hacker Noon

A US$ trillion market
The equity crowdfunding market is more known than the peer to peer lending market (crowdlending) and it has also a longer history. According to this research by Statista.com this global market was worth approx. US$ 7 billion in 2019. Less than peanuts. According to fundly.com, the equity crowdfunding industry is projected to grow to US$ 300 billion by 2025. Still nothing to be overly excited about.

Now let´s look at what the peer to peer lending sector is doing instead.

According to Statista.com it was worth US$ 9 billion at its very inception in 2014, the next year was already worth US$ 64 billion and it is projected to grow to a US$ 1 trillion industry by 2025. Now, that´s not peanuts.

Source: Statista

Mintos is a Latvian Fintech company which was launched in 2015 to become a “global marketplace for peer to peer loans”.

Source: Mintos

According to their data small investors had lent through their platform almost € 1 billion up to August 2018. Then, in the following 15 months — thanks to the new wave of zero/negative interest rates — the investments have more than tripled to € 3.8 billion.

DeFi Inflows Doubled in 2019 (Cryptovest), Rated: AAA

DeFi is a growth sector in 2019, and funds held in various schemes have doubled in 2019.

Crypto lending started off a few years ago, with rock-bottom lending rates of 0.5% for Maker DAO. Later, skepticism brough interest rates to above 20%, with the fear of a mass exodus and liquidations.

Now, trust is back and more than 1.793 million ETH is locked with Maker DAO. The issuance of DAI has increased to 102 million coins, with the permission to expand to 120 million.

TrustToken Partners to Offer Industry-Leading Interest on 5 International Currencies (Yahoo! Finance), Rated: A

TrustToken is enabling holders of TrueCurrencies (fully collateralized stablecoins) to earn up to 10 times the local bank savings rate in five global currencies.

Users of TrueUSD (backed by US Dollars) may accrue up to 12% APR (annual percentage rate) while holders of other TrueCurrencies may gain between 4-6% APR.

TrustToken’s full suite of stablecoins, with respective earning opportunities:

  • TrueUSD (backed by the US Dollar), offering up to 12% APR across all five partners
  • TrueGBP (backed by the British Pound), offering up to 5.2% APR on Celsius Network
  • TrueHKD (backed by the Hong Kong Dollar), offering up to 5.2% APR on Celsius Network
  • TrueCAD (backed by the Canadian Dollar), offering up to 5.2% APR on Celsius Network
  • TrueAUD (backed by the Australian Dollar), offering up to 5.2% APR on Celsius Network

7 Practical Ways of Earning From Cryptocurrency (Cryptomorrow), Rated: B

5. Lending

Lending cryptocurrency is becoming a popular way of earning from cryptocurrency where owner lends to other users to return a predefined percentage per defined period. A good number of exchanges now allow their users to lend out their holdings and earn interests. You deposit cryptocurrency and choose desired time to lock in or lend although you can take it back any time. In most cases, those taking the loans do so for purposes of margin trading and such exchanges do have those margin trading features.

India

Who Bears the Risk in Fintech? (FinDev Gateway), Rated: A

The excitement around fintech in India is palpable. This enthusiasm can be attributed to fintech’s potential as a market-led solution to the policy objective of financial inclusion. Fintech can expand the reach of formal finance by offering users personalized financial products in an economically viable manner. Unsurprisingly then, regulation of fintech is central to financial inclusion.

Our recent research, Financial regulation of consumer-facing fintech in India, aims to do just that, answering the question of how fintech is regulated in India.

Asia

Indonesia’s ALAMI gets funding, claims to be the first sharia-based VC funding round in SEA (e27), Rated: A

Indonesian sharia-based P2P lending platform ALAMI announced an undisclosed funding round led by Golden Gate Ventures, with the participation of Agaeti Ventures, RHL Ventures, and Hong Kong-based angel investor Aamir Rahim through Zelda Crown.

Canada

IOU Financial Inc. Releases Financial Results for the Three and Nine-Month Period Ended September 30, 2019 (Yahoo! Finance), Rated: AAA

  • Loan originations increased 14.5% to US$41.4 million in Q3 2019 compared to Q3 2018.
  • Total loans under management increased 27.4% to $108.0 million as at September 30, 2019 compared to the same period in 2018.
  • Adjusted gross revenue increased 46.8% to $6.8 million in Q3 2019 compared to Q3 2018.
  • Adjusted Operating Expense Ratio decreased to 10.1% in Q3 2019 compared to 10.5% in Q3 2018.
  • Extended the maturity date of the convertible debentures from December 31, 2020 to December 31, 2023 .
  • Adjusted net earnings amounted to $0.8 million in the third quarter of 2019, an increase of 64.2% over Q3 2018. Adjusted net earnings amounted to $1.5 million year-to-date.
  • IOU has repurchased 1,222,000 common shares since the beginning of its Normal Course Issuer Bid (“NCIB”).

Sezzle opens office in Toronto, taps PayPal executive to lead it (StarTribune), Rated: A

Sezzle Inc. is opening an office in Toronto to expand usage of its “buy-now-pay-later” payments service by retailers and shoppers in Canada.

The Minneapolis-based financial-technology company first offered its service in Canada in April and subsequently hired marketers to reach out to retailers there. On Wednesday, it added a country manager, Patrick Chan, a former senior executive in PayPal’s Canadian office, to accelerate its growth.

Authors:

George Popescu
Allen Taylor

The post Thursday November 14 2019, Weekly News Digest appeared first on Lending Times.