- Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018.
- Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019.
- Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest month for Reg CF since May 2016. Installment loans explode online. How Zopa will redefine banking. International P2P lending volumes. India lining up with China on fintech adoption rate. Can P2P lending plug southeast Asia’s business financing gap?
- SoFi cuts mortgage business jobs. The number is 7%, a small cut. The significance is SoFi is changing how they underwrite morgtgages.
- KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. LendingClub’s eighth rated sponsored securitization.
- Money360 surpasses $1 billion in loan originations and closings. Congratulations. Huge achievement.
- Rate hikes pause in 2019. Lower consumer spending in Q3, but now that Christmas is here, how much will it increase?
- LendingTree Debt Report November 2018. Non-mortgage consumer debt will exceed $4 trillion by the end of 2018. That represents a $1 trillion debt increase in five years.
- October was biggest month for Reg CF since May 2016. $10.9 million raised. This shows that Reg CF is going strong.
- Installment loans take off online. I look for online installment loans to increase in the next 2 to 5 years.
- 43.5% of purchase borrowers received mortgage rates under 5% last week.
- Americans are moving south–to Florida and Texas.
- Citibank leads major financial institutions on mobile banking.
- Why Wealthfront is offering free financial planning.
- How Credit Karma has built a billion dollar brand.
- Betterment launches tool to optimize cash savings.
- CommonBond acquires NextGenVest.
- Glassdoor names OppLoans a Best Workplace–again.
- CapWay expands digital banking options.
- Finicity partners with Princeton Mortgage.
- Onward Financial wins $1 million.
- Zopa granted a banking license. Zopa kicked off the P2P lending craze. Now it has a banking license, which makes it the first company to combine P2P lending and digital banking. Awesome move.
- How Zopa will redefine banking.
- Zopa says bank launch won’t affect P2P lending rates.
- Funding Circle expected to make FTSE 250 index.
- Funding the future of the UK PLC.
- Tandem Bank wants to improve consumers’ credit ratings with Journey Card.
- CrowdProperty uses Brismo to provide lending performance metrics.
- Arbuthnot backs MBI team.
- Kambo rolls out two mobile apps for crypto lending.
- LendInvest joins Ingard’s buy-to-let panel.
- International P2P lending volumes for November 2018. Mintos leads with 135.9 million euro in new loans. Ablrate fell down 100%.
- CoreLogic launches automated valuation solution.
- 5 customized digital lender strategies that work.
- Nasdaq buys Quandl.
- How SoftBank became the big startup story of the year. SoftBank’s Vision Fund funds some of the best startups, including fintech success stories.
- Can P2P lending plug southeast Asia’s business finance gap? An excellent read.
- Malaysia may issue more equity crowdfunding, P2P lending licenses in 2019.
- Milieu Insight raises $730,000.
- HonestFund raises $12 million.
- India catches up with China on fintech adoption.
- Canada: How experimental technology helps TD Bank on mobile.
- Australia: Helio Lending launches for crypto lending.
- Canada: OnDeck merges with Evolocity Financial Group.
- Australia: Lakeba invests in Lodex.
- Ghana: P2P lending as a means of propelling startup growth.
- China: Ping An wins global machine learning competition.
- United States
- SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA
- KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA
- Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA
- Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA
- LendingTree Debt Report November 2018 (LendingTree), Rated: AAA
- 43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A
- LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A
- October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA
- Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA
- How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A
- Why Wealthfront is offering free financial planning (Financial Planning), Rated: A
- Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A
- Betterment launches tool to optimize cash savings (Tearsheet), Rated: A
- CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A
- OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A
- Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A
- Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B
- NBKC Bank fintech accelerator participant wins $ 1M (Biz Journals), Rated: B
- United Kingdom
- P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA
- Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA
- Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A
- Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A
- Funding the future of the UK PLC (Business Leader), Rated: A
- Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A
- CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A
- ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A
- KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A
- LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B
- Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA
- International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA
- CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A
- Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A
- Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B
- Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA
- Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A
- India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA
- Southeast Asia
- How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA
- P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA
- Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA
- Singapore’s Milieu Insight raises US$ 730K to enhance market research platforms (e27), Rated: A
- Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A
- How experimental tech drives TD Bank’s mobile app (American Banker), Rated: AAA
- OnDeck to merge Canadian operations with Evolocity Financial Group (Seeking Alpha), Rated: A
- Peer-to-Peer Lending as a Means of Propelling Startup Growth (Modern Ghana), Rated: AAA
SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA
Late Friday Bloomberg reported that SoFi was cutting 7% of its staff, or around 100 jobs, in the company’s mortgage department. This is due to a change in strategy as to how they underwrite mortgage loans. Rather than underwrite loans themselves, as they have done since launching their mortgage business back in 2014, they will outsource the underwriting to a partner.
KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (“CLUB 2018-P3”). This is a $272.40 million consumer loan ABS transaction that is expected to close December 13, 2018.
The transaction has initial credit enhancement levels of 30.87%, 22.80% and 9.70% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.
This transaction is LendingClub Corporation’s eighth rated sponsored securitization, fourth of 2018 and the fifth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com.
Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA
Real estate marketplace lender Money360 announced on Monday it has surpassed $1 billion in loans originated and closed since inception. The announcement comes just 11 months after the lending platform revealed it had hit $500 million.
Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA
US Q3 GDP showed 3.5% annualized growth, well above potential growth of 2%. Growth slowed from the blistering 4.2% pace in Q2 due to rising inventories and lower consumer spending:
LendingTree Debt Report November 2018 (LendingTree), Rated: AAA
Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.
In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.
43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A
For the week ending Dec. 2, 2018, the share of borrowers with rates under 5% was the highest in two months, which may lend some support to a weakening housing market.
LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A
LendingTree today released its State Migration Study on where Americans are interested in moving. The study looked at where people moving out of state are going and discovered that of the 12.1 percent of homebuyers across the country who change states, most plan to head south.
Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states.
Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state.
October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA
October was a big month for Reg CF campaigns, according to the StartEngine Index. In fact, October booked the most money raised using the crowdfunding exemption since the rule became actionable in May of 2016.
According to StartEngine, $10.9 million in funding was raised. Until October came along, this past July held the top spot at $10.7 million. The Index indicates that Reg CF has now raised $151.7 million since inception. The Food & Beverage industry remains the most popular sector to use Reg CF followed by Tech.
Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA
Installment payments have been around for seemingly forever but a new crop of fintechs are offering it with a twist: the ability to pay off smaller purchases in installment payments that in many cases are interest-free.
And it appears to be resonating with scores of U.S. consumers judging from the brisk business installment payment services like QuadPay.com enjoyed during the kick off to holiday shopping season this past Thanksgiving weekend. David Sykes, chief operating officer at QuadPay.com said 35% of online Black Friday sales for one large merchant customer came via QuadPay. On average Sykes said its service accounts for around 20% of all the online transaction from its roughly 500 e-commerce partners.
QuadPay.com makes money via the merchant, getting a cut of the sales generated by its service. That enables it to offer interest-free loans to consumers wanting to purchase everything from Uggs to underwear. Sykes said the average value of the orders on the platform is $150. QuadPay takes 25% of that on day one and then spreads out the remaining payments every two weeks. Because the average installment payment is around $37 there isn’t too much risk of customers defaulting on the loan. To prevent default it won’t let a customer use the service again if they were ever late with a payment. The executive noted QuadPay approves 92% of all applicants.
How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A
In Business Insider Intelligence’s second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank’s mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.
Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A
Building a great service is hard but not impossible. But building a great service and making it available for free — that’s really hard.
Credit Karma seems to have figured out a way to do both. The company, with 85 million members in the U.S. and Canada, continues to roll out free, innovative financial products to its user base. It all began 11 years ago with a simple premise: to provide users with free access to their credit scores. From there, the company has rolled out a bunch of new products, including ID monitoring, tax preparation, a financial chatbot, auto finance, and unclaimed money.
Betterment launches tool to optimize cash savings (Tearsheet), Rated: A
Automated investment advisor, Betterment is rolling out “Two-Way Sweep”, a tool that can automatically “sweep” excess money from customers’ bank accounts into a Betterment account optimized to provide better returns for cash.
What’s behind this new product: Studies show that only one in three millennials is investing in the stock market. That means they’re holding a high percentage of cash. In fact, Betterment sees 30 percent of customers with cash balances of $20,000 on average. This excess in savings earns little to no interest. Betterment’s Two-Way Sweep is intended to take the hesitation out of deploying more money into investments by automating the process.
CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A
CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.
OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A
Chicago-based fintech firm OppLoans has been honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2019. This marks the second year in a row that the personal lender has been named to this prestigious list in the Small & Medium Business category. The Employees’ Choice Awards program, now in its 11th year, is based solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies on Glassdoor, one of the world’s largest job and recruiting sites.
Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A
According to 2017 statistics from the FDIC, 16 percent of households in Mississippi are unbanked, choosing instead to use “predatory services” like corner store check cashing in their neighborhoods.
Allen founded her first startup, an app development shop, while still in college. After moving to Silicon Valley, Allen realized it wasn’t just rural communities that were underserved by banks. Inner city areas across the country, most of which are home to majority Hispanic and African-American populations, are also affected. An FDIC survey found that more than 15 million adults in the U.S. go unbanked.
In 2016, Allen founded CapWay with co-founder and fellow Mississippian Timothy Lampkin. The mobile-first platform is aimed at younger generations (think older millennials and Gen Z) in those unbanked communities to help them break out of the predatory economy cycle.
Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B
Finicity, a provider of real-time financial data aggregation and insights, announced today it is working with mortgage banker Princeton Mortgage to automate borrower asset verification for lenders. The agreement will provide Princeton Mortgage loan officers and borrowers with a faster, simpler loan origination experience that reduces both paper chase and headache.
P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA
Back in 2005 Zopa quietly launched their P2P lending platform in the UK, the world’s first. It was the start of a lending revolution that has moved on to all corners of the globe. Today, a new chapter begins as the company announced that regulators have approved Zopa’s banking license. With that Zopa achieves another first: becoming the world’s first combined peer to peer lending platform and digital bank.
Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA
Zopa explained that this is called the “mobilisation’ phase” as regulators put some restrictions in place. A full licence will be granted once it meets the conditions set by the regulators.
Zopa said it will begin its new service next year. The digital bank will include options such as a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), credit card and a money management app.
Pointing to a statement by the FCA that just “40% of UK adults have confidence in the financial services industry,” Zopa sees opportunity in becoming a digital bank unencumbered by green-screen legacy tech and unnecessary brick and mortar branches.
Zopa explained it would redefine banking with the following services:
- Giving customers a fair deal as standard – with no catches like sign-up offers that aren’t available to existing customers or hidden fees and charges.
- Making sure money management is simple and a real person is available to discuss
- Going beyond ‘good enough’
Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A
ZOPA has insisted its peer-to-peer lending rates will not be dictated by the savings products on offer when its bank launched.
It currently offers target returns of 4.5 per cent on its Zopa Core product and 5.2 per cent on Zopa Plus.
Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A
Other companies expected to be promoted to the FTSE 250 are peer-to-peer lending platform Funding Circle, the retirement housebuilder McCarthy & Stone and the investment trusts Smithson and Woodford Patient Capital.
Funding the future of the UK PLC (Business Leader), Rated: A
Looking at 2017, we saw some encouraging trends and one of them is in terms of diversity and choice. We saw peer-to-peer lending grow at over 50%. It’s obviously coming from a smaller base as it’s a reasonably new form of lending, but 50% growth is a very strong outcome.
Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A
Tandem Bank has announced its Journey Card has assisted nearly three-quarters (72 per cent) of its users to first-time credit or is helping individuals with poor credit history get back on track.
Due to the higher risk users it targets, the credit card carries a reasonably expensive representative APR of 24.9 per cent.
Tandem says it hopes to help the 43 per cent of Journey Card holders who have poor credit history, some of whom have defaulted with other providers.
CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A
Peer to peer property lender CrowdProperty is now disclosing their performance metrics using Brismo’s (formerly known as AltFi) standardized reporting methodology. CrowdPropert states that it is the first property development platform to incorporate the Brismo process which is described as an independent standard.
UK housebuilders back new online property listing start-up (Financial Times), Rated: A
Some of the UK’s largest housebuilders are backing a new property portal that will launch next year in the latest attempt to challenge the two dominant market leaders, Rightmove and Zoopla.
Barratt Developments, Bovis, Persimmon and Redrow have signed up to list their homes with the start-up Rummage4Property, as have Countrywide and about 30 other estate agency groups.
ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A
Arbuthnot Commercial Asset Based Lending (ABL) has supported a highly experienced Management Buy In (MBI) team, led by Paul Hampton, with a £2m invoice discounting facility to support Premier House Investment’s acquisition of Ralph Coleman International Ltd (RCI) and provide ongoing working capital, paving the way for the company’s exciting expansion plans.
KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A
KAMBO is expanding beyond desktops to become accessible on our most coveted devices, our smartphones. With the introduction of two native apps, KAMBO’s lending platform will become one of the most flexible and diverse of its kind.
LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B
Ingard, a compliance network, brokerage, and lending packager specialist, announced on Tuesday online lending platform LendInvest has joined its buy to let panel. According to Ingard, members may now access the lender’s buy to let range direct by registering through LendInvest’s online portal.
Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA
Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”) is pleased to announce that OneConnect, a subsidiary of the Group, ranked first in one of the world’s most authoritative machine-reading comprehension challenges — the Stanford Question Answering Dataset 2.0 (SQuAD). GammaLab Institute of Artificial Intelligence (GammaLab), owned by OneConnect, scored 83.435, close to the human performance level of 86.831, way ahead of other companies in the challenge.
Another scenario is internet arbitration in universal financial inclusion. Small loan companies tend to turn to online arbitration, which is expensive and takes time to resolve, under the current peer-to-peer lending market. With the reading comprehension skill of GammaLab, the arbitrator will finish a case quicker, reducing the cost for arbitration.
International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA
I removed Unilend, as the platform has closed and the company has gone into receivership.
CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A
CoreLogic, a global property information, analytics and data-enabled solutions provider, announced today the introduction of its Total Home Value for Originations AVM solution.
The new Total Home Value for Originations solution is specifically calibrated and packaged to improve efficiencies when performing property valuations during the purchase and refinance loan underwriting process.
Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A
According to EY study, fintech startups have raised $41.7 billion in the first half of 2018 across the globe. So, what fintech strategies need to be implemented to transform the consumer experience on the market?
- Consumers first
- Rebuilding trust
- Lack of credibility
- Partnership instead of competition
- Improving the quality of lives
Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B
Nasdaq has acquired Quandl, a Toronto-based provider of alternative and core financial data. Terms of the deal were not disclosed.
Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA
Helio Lending is the first independent crypto lending company to launch on Australian shores according to reports.
The company claims to be in the position to offer 50% more spending power to clients than they would have by holding on to their crypto assets.
Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A
Lodex, Australia’s first auction-style loans and deposits marketplace leader, today announced it has secured capital investment from Lakeba Group, an established Australian technology innovator.
India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA
India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%, which also throws a huge opportunity for India to not only make best out of financial services sector but also to disrupt it.
How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA
Uber. WeWork. Saudi Arabia. The biggest startup stories in 2018 shared one long and influential thread: Japanese conglomerate SoftBank, its $100 billion tech investment fund, and founder Masayoshi Son.
The Vision Fund is backed by several prominent investors, including Apple and the government of Abu Dhabi, but its largest financial partner is Saudi Arabia’s sovereign wealth fund. The country’s government, under crown prince and de facto ruler Mohammed bin Salman, contributed 45 percent of the $100 billion, and in October announced plans to put another $45 billion into a second Vision Fund.
P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA
Peer-to-peer (P2P) lending has emerged as a popular alternative financing option for small and medium enterprises (SMEs) in Southeast Asia. In 2016, P2P lending generated US$115.01 million, which accounted for more than half of total market share of Southeast Asia’s alternative financing market. In an evolving financing landscape, P2P lending complements the services banks provide and support the region in realising its growth and development potential. The very fact that investment in the region’s startups tripled from US$2.52 billion in 2016 to US$7.86 billion in 2017 is a testament of the vast potential in Southeast Asia’s FinTech startups.
Businesses, largely SMEs, benefited from such platforms too. According to a Deloitte report, SMEs contribute to 40% of Southeast Asia’s gross domestic product (GDP) and hiring 70% of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, especially in terms of financing. This is due to strict banking regulations imposed after the 2008 global financial crisis, which have made banks and most financial institutions increasingly risk-averse. This is evidenced by McKinsey Global Institute’s report stating that 39 million Southeast Asian SMEs (or 51%) lack access to credit.
Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA
Malaysia’s securities regulator may license more operators of equity crowdfunding (ECF) and peer-to-peer (P2P) lending platforms next year, after current operators raised more than 200 million ringgit (US$48.25 million) for small firms since the industry was legislated in 2015, according to its chairman.
Singapore- and Thailand-based marketing software startup Milieu Insight has announced that it has raised S$1 million (US$730,000) from a group of private investors including former Rippledot Capital Director, Ravi Ravulaparthi.
Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A
HonestFund (CEO: Sanghoon Seo) has announced that the company, one of the largest marketplace lending players in South Korea, has successfully raised $12 million Series B investment.
Investment was led by Korea’s leading VCs and investment companies, such as Dunamu & Partners, MurexPartners, KB Investment, TL Asset Management, Bass Investment and HB Investment. This brings HonestFund’s total investment to $21 million, making it one of the most valuable Fintech companies in South Korea.