Friday November 29 2019, Weekly News Digest

Beehive SME Infographic

News Comments Today’s main news: Funding Circle US launches Small Business Choice. LendingPoint closes $175.6M direct-to-consumer securitization. Chinese P2P lenders have 2 years to change business model. Klarna starts new merchant partnership every 8 minutes. Today’s main analysis: Cities where millennials have the highest credit card balances. Today’s thought-provoking articles: Schwab to acquire TD Ameritrade, […]

The post Friday November 29 2019, Weekly News Digest appeared first on Lending Times.

Beehive SME Infographic

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

Funding Circle US Launches Small Business Choice, Providing Interest Rate and Loan Term Options to Small Business Owners (BusinessWire), Rated: AAA

Funding Circle US today announced Small Business Choice. The newest feature of the Funding Circle US loan platform provides borrowers with three fully approved loan options with different terms and rates to give small business owners the flexibility to find the loan that best fits their needs.

Under Small Business Choice:

  • Loan options are suggested after being completely underwritten by Funding Circle. Borrowers are fully approved for all three options.
  • In line with Funding Circle’s global commitment to transparency, offers are presented in a straightforward way over the phone and in emails that directly outline the total loan amount, term, rate and monthly payment.
  • The feature applies to all small business owner applicants, including existing borrowers, at Funding Circle US.

LendingPoint Closes $ 175.6 Million Direct-to-Consumer Loan Securitization and Inaugural, $ 61.7 Million Point-of-Sale Loan Securitization (BusinessWire), Rated: AAA

Data and technology platform LendingPoint today announced that it has closed two additional securitizations of loans originated on the LendingPoint platform: LendingPoint Receivables Trust 2019-2 (“LDPT 2019-2”) issued $175.65 million of KBRA-rated notes backed by a pool of direct-to-consumer loans and LP LMS 2019-1 Asset Securitization Trust (“LPMS 2019-1”) issued $61.7 million of unrated notes backed by a pool of point-of-sale loans. Guggenheim Securities was sole structuring advisor and sole manager of both transactions.

Cities Where Millennials Carry the Highest Credit Card Balances (Experian), Rated: AAA

Millennials accounted for about 20% of all credit card debt in Q2 2019, an increase of 2 percentage points year over year. Their generation was the only one to see a marked increase in overall credit card balances in Q2 2019. Since 2015, millennials have seen their average FICO Scores*  increase 17 points and their average credit card balance increase by $1,390.

Cities With Highest Millennial Credit Card Balances in Each State

Schwab is the 800 lb Gorilla Now; Future of FinTech; Madden Fix (PeerIQ), Rated: AAA

Charles Schwab Corp. is in negotiation to acquire TD Ameritrade. The deal would combine two of the largest online brokerages with strong banking capabilities. Shares of both companies were up significantly in the news.

Source: PeerIQ, Bain Capital Ventures LP

Full interview with Max Levchin, co-founder of Paypal (CNBC), Rated: A

PeerStreet Continues Rapid Growth With New Milestone: $ 3 Billion in Loan Transactions (BusinessWire), Rated: A

PeerStreet, a platform for investing in real estate backed loans, today announced that as of last month, more than $3 billion in loans have been transacted through the PeerStreet marketplace. This milestone comes on the heels of the company announcing the close of its $60 million Series C funding round coupled with $4.25 billion in new capital commitments.

Entera Raises $ 7.5M in Funding (FinSMEs), Rated: A

Entera, a San Francisco, New York and Houston-based real estate technology platform that enables investors to access, make data driven decisions and purchase residential real estate, raised $7.5m in funding.

An internet banking pioneer’s view from the catbird seat (American Banker), Rated: A

If David Becker’s career were put to country song, the title might be “I was internet banking when internet banking wasn’t cool.”

Becker founded the online-only First Internet Bank in 1998, well before the term digital platform was thrown around. Online banking long had promise, but to hear Becker tell it, it’s really coming into its own — and he has a front-row seat to change.

Wolters Kluwer Launches Consumer Lending Online Applications Offering for Community Banks, Credit Unions (BusinessWire), Rated: A

Wolters Kluwer’s Compliance Solutions business has launched Online Applications for Consumer Lending (CLA), a digital offering that enhances the online loan origination capabilities of U.S. community banks and credit unions. CLA allows consumers to begin a loan application from any digital device, at any time. It integrates seamlessly with Wolters Kluwer’s ComplianceOne solution, an industry-leading loan documentation and processing system that helps lenders optimize their lending and document preparation processes in a secure, fast and cost-effective manner.

Why small businesses need regulators’ proposed ‘Madden’ fix (American Banker), Rated: A

Just recently, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. proposed an important clarification to the “valid when made” doctrine, which provides that if a loan’s interest rate is valid in the state of origination, that loan continues to be valid when transferred to a party in another state. That long-standing doctrine was overturned by the so-called Madden case in 2015.

MoneyLion : Names Samantha Roady Chief Operating Officer (MarketScreener), Rated: B

MoneyLion, the digital bank and financial membership platform, today announced the appointment of fintech and global finance industry veteran Samantha Roady as Chief Operating Officer, a new position within the company. She has served as a MoneyLion board member since September 2016.

Supreme Court to hear CFPB constitutionality case in March (American Banker), Rated: B

The Supreme Court on Tuesday said it will hear arguments March 3 in a case challenging the constitutionality of the Consumer Financial Protection Bureau’s leadership structure.

United Kingdom

Zopa is running out of time in bid to become bank (Evening Standard), Rated: AAA

PEER-to-peer lending giant Zopa faces a race against time to raise up to £150 million and satisfy regulators it is financially strong enough to become a bank.

Zopa rival Funding Circle has seen its shares crash from 400p a year ago to 99p today.

Zopa nears crunch time as investor woes worsen (Financial News), Rated: A

One of the UK’s best-known and oldest fintech companies is running up against a tight deadline to secure funding needed to maintain its banking licence, as a major investor is sidetracked by a funding crunch of its own.

Marketplace lending expected to top £6bn this year, says report (AltFi), Rated: A

Marketplace lending is expected to top £6bn this year but lenders will face a significant test of their risk management procedures, loan servicing and recovery practices should the economy worsen, a new report warns.

The report says that gross marketplace lending is likely to grow 16 percent from £5.3bn to £6.2bn from 2018 to 2019.

Wonga‘s legacy of nearly 400,000 mis-sold loans (Wellston Journal), Rated: A

Administrators for the lender, which collapsed in August 2018, have revealed that 389,621 eligible claims have been made since Wonga‘s demise.

So far, the compensation bill is £460m, with the average claim £1,181.

The administrators said they had received 560,982 claims by the end of August.

Britain’s RBS launches digital bank Bó to take on start-ups (Reuters), Rated: A

Royal Bank of Scotland has launched its standalone digital bank Bó in a plan to fend off competition from fast-growing online start-ups including Monzo and Starling.

Funding and technology: the foundations of building a great product  (Mortgage Introducer), Rated: A

Disrupting the traditional mortgage process has always been our goal at LendInvest.

From the way you apply for a loan, to case management to how that loan is funded, we believe the experience can be better at every stage of that journey.

LendInvest Promotes Andy Virgo to Key Role (Crowdfund Insider), Rated: B

LendInvest, the Fintech marketplace for property finance, has promoted Andy Virgo from Business Development Manager to Head of Key Accounts for LendInvest.

Lisa Fiondella Joins Finastra as Chief Data Officer (Markets Insider), Rated: B

Finastra has hired Lisa Fiondella as Chief Data Officer to lead its comprehensive data strategy, including how data collected through the FusionFabric.cloud platform and various cloud-based solutions, can be best utilized. She will be responsible for developing a data product roadmap and manage the process of bringing new data products to market.

China

P2P: China’s once-booming lending industry must close within two years, government notice says (SCMP), Rated: AAA

All existing peer-to-peer lending platforms in China must become small loan providers within two years, a notice seen by Reuters on Wednesday showed, the latest official edict aimed at curbing the once-booming industry.

All Chinese peer-to-peer (P2P) lending firms need to clear outstanding loans in less than one year before switching to small loans, according to a notice issued by China’s Internet Financial Risk Special Rectification Work Leadership Team Office, which was launched by Beijing to mitigate risks in the online lending sector.
  • Only 427 existing peer-to-peer (P2P) firms were still operating by the end of October, down from 6,000 at their 2015 peak

China Bids Farewell to P2P Lending (Finews.Asia), Rated: A

In order to transition, firms must meet a minimum capital requirement of 50 million yuan ($7.1 million) to become a small regional lender and 1 billion yuan ($142 million) to become a small national lender.

Ping An to fold P2P lender Lufax into new consumer finance arm (Technode), Rated: AAA

Ping An Insurance has received approval from regulators to set up a consumer finance arm, a representative from its peer-to-peer (P2P) loan affiliate Lufax confirmed on Friday, in a move that is reportedly the beginning of its transition away from P2P lending amid increasingly stringent regulations.

Lufax Prepares for Life After P2P Lending (Caixin), Rated: A

European Union

Flender Makes BIG Mark in Ireland’s SME Lending Market (deBanked), Rated: AAA

The following month Flender would reveal remarkable news, a new €75 million funding line, bringing their total to €109 million raised since the company’s founding in 2015. The company is backed by Eiffel Investment Group, Enterprise Ireland, entrepreneur Mark Roden and former Ireland rugby player Jamie Heaslip.

Meawnwhile, CEO Kristjan Koik told the Irish Times that the top 3 banks in Ireland have 92 percent of the SME lending marketshare so there is still a ton of opportunity for non-banks like Flender to grab hold of.

Alternative Lending Marketplace October Reveals New $ 110 Million Commitment from European Investment Fund and Others to Finance European SMEs (Crowdfund Insider), Rated: A

A new €100 million (appr. $110 million) agreement was finalized by the EIF, CNP Assurances, Bpifrance, Zencap, and various other entities in order to fund European SMEs via marketplace lending platform October. These companies are part of the recent institutional fund launched last year.

Half of European P2P investors have more than 25pc of portfolio in P2P loans (P2P Finance News), Rated: A

MORE than half (52.3 per cent) of European peer-to-peer investors surveyed by Robo.cash have more than a quarter of their portfolio in P2P loans.

Irish Consumers Still Don’t Trust New Technology, Including Digital Challenger Banks (Crowdfund Insider), Rated: A

Three quarters, or 75%, of Ireland’s consumers, are only using a “high street” bank, which makes the country the most traditional in Europe.

Only around 10%, or one in ten, Irish consumers are banking only with a challenger bank. Around 11% of Millennials and 12% of Gen Z consumers in Ireland are using (only) challenger banks, the report revealed.

When looking five years ahead:

  • 17% of Ireland’s consumers are expected to bank solely with a challenger bank (up from around 14% in 2019).
  • 35% of Ireland’s citizens will be banking with some combination of challenger and traditional financial institutions (up from about 21% in 2019).
  • 48% will be banking solely with a legacy bank (down significantly from 68% in 2019).

This, according to Fujitsu’s latest “From Demanding to Discerning: Tech and the New Banking Customer” report.

Investor confidence in P2P lending is growing in Europe (Wealth Adviser), Rated: A

According to a new survey by Robo.cash, 64.9 per cent of the European P2P investors have full confidence in P2P lending. Remarkably, 52.3 per cent of respondents mentioned that P2P loans take a considerable share of their investment portfolio – over 25 per cent.

Citadele Bank to invest in consumer loans through Fellow Finance P2P platform (Finextra), Rated: B

Citadele Bank is launching a partnership with Europe’s most advanced lending platform, Fellow Finance, which brings together individuals, businesses and investors.

International

Klarna partners with a new merchant every 8 minutes in 2019 (PR Newswire), Rated: AAA

During 2019, Klarna has once again seen stellar growth with 60,000 new merchants globally including River Island, Boohoo, Made.com, Michael Kors, Expedia, H&M, Abercrombie & Fitch, Timberland, Marchesa, Agent Provocateur, Rue 21, TOMS, WayFair, Microsoft, and Shein. Now over 190,00 merchants partner with Klarna.

– Consumer growth and preference builds, adding 16 million new consumers globally.

OakNorth and N26 Have Received the Most Funding Out of All US and European Digital Banks (Crowdfund Insider), Rated: A

According to Crunchbase data, OakNorth ($1 billion) and N26 ($670 million) have received the most funding out of all other major US and European neobanks.

Regulators in Dubai and Luxembourg sign fintech pact (Finextra), Rated: B

The Dubai Financial Services Authority (DFSA) and the Commission de Surveillance du Secteur Financier (CSSF) Luxembourg, entered into an agreement to cooperate in the development of FinTech.

Australia

Almost 50% of Australians Have Not Heard of Neobanks or Digital-Only Banks (Crowdfund Insider), Rated: AAA

The number of users that may consider changing their primary banking institution during the coming six-month period is currently 12% or 2.5 million Australian residents, which is reportedly 9% greater than the previous year.

The Nielsen surveys revealed that around 50% of Australia’s consumers noted that they had not heard of a neobank. Only a third, or about 33%, of the nation’s consumers said they’d be willing to use a neobank as one of their financial services providers, even after the benefits of using digital-only banks were explained to them.

A quarter, or 25%, of consumers who became aware of neobanks stated they would most likely use them as one of their primary financial services providers.

Asia

Indonesian P2P lender Amartha bags series B money from Line, others (Tech in Asia), Rated: AAA

Indonesian peer-to-peer lending startup Amartha has raised an undisclosed amount of series B funding in a round led by Line Ventures, the venture capital arm of global messaging app Line.

MENA

Dubai-based Fintech, Beehive, Releases State of the SME Ecosystem Report (PR Newswire), Rated: AAA

Key findings from the report include:

  • Surveyed MENA SMEs have more women in senior positions than the global average.
  • 28% of respondents see innovation as a priority for growth, yet only 2% of business owners are currently trying to access finance to fund it.
  • SMEs offer young people a great opportunity for development. 48% of SMEs would hire someone under 25 with no experience.
Source: Beehive

See the full report here.

Authors:

George Popescu
Allen Taylor

The post Friday November 29 2019, Weekly News Digest appeared first on Lending Times.

Thursday September 5 2019, Weekly News Digest

neobanks

News Comments Today’s main news: LendingPoint closes $178M personal loans securitization. OnDeck hits $879M in online financing in Texas alone. RateSetter adds three products. Funding Circle lenders face longer cash out waits. Yirendai files Form 6-K. Today’s main analysis: International P2P lending volumes for August 2019. Today’s thought-provoking articles: Silicon Valley is building a social […]

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

neobanks

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

LendingPoint : Closes $ 178 Million Personal Loans Securitization (MarketScreener), Rated: AAA

LendingPoint, the company revolutionizing and democratizing commerce, announced today that it closed its inaugural securitization of consumer loans. LendingPoint Receivables Trust 2019-1 (“LDPT 2019-1”) issued $177.85 million of notes backed by a pool of $187.22 million of direct-to-consumer loans originated on the LendingPoint platform.

The LendingPoint Receivables Trust securitization was rated by Kroll Bond Rating Agency, Inc. and includes $117.76 million of Class A notes rated “A-“, $24.74 million of Class B notes rated “BBB-“, $23.68 million of Class C notes rated “BB-” and $10.67 million of Class D notes rated “B-.” The notes priced at a blended yield of 4.05% per annum and provided for a 95% advance rate. The transaction has a 5% overcollateralization Deposit and a 5% overcollateralization Target. The risk adjusted yield of the receivables securing the notes is expected to be 13.14% per annum.

TyMac Electric Powers Business Success with Online Financing from OnDeck (PR Newswire), Rated: AAA

OnDeck today announced that TyMac Electric of Plano, Texas is its Small Business of the Month for August, 2019.  The 30-person company serves the Dallas-Fort Worth area with high-quality, professionally managed electrical services.

Over the last two years, OnDeck has provided additional financing to TyMac Electric as the business grew to meet demand in the Dallas-Fort Worth commercial marketplace.

Overall, OnDeck has provided more than $879 million in financing online to small business owners in the State of Texas.

2019’s Best & Worst Places to Retire (WalletHub), Rated: AAA

Best Retirement Cities

Overall Rank
(1 = Best)
City Total Score ‘Affordability’ Rank ‘Activities’ Rank ‘Quality of Life’ Rank ‘Health Care’ Rank
1 Orlando, FL 60.87 9 11 68 48
2 Tampa, FL 59.06 10 19 45 95
3 Scottsdale, AZ 58.35 98 22 3 58
4 Charleston, SC 58.30 42 21 56 51
5 Miami, FL 57.21 51 5 105 74
6 Denver, CO 57.08 113 17 43 17
7 Fort Lauderdale, FL 56.58 65 18 82 56
8 Cape Coral, FL 56.50 19 51 15 109
9 Minneapolis, MN 56.46 145 3 58 5
10 Cheyenne, WY 56.06 2 142 50 33

Source: WalletHub

Silicon Valley is building a Chinese-style social credit system (Fast Company), Rated: AAA

Have you heard about China’s social credit system? It’s a technology-enabled, surveillance-based nationwide program designed to nudge citizens toward better behavior. The ultimate goal is to “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step,” according to the Chinese government.

Many Westerners are disturbed by what they read about China’s social credit system. But such systems, it turns out, are not unique to China. A parallel system is developing in the United States, in part as the result of Silicon Valley and technology-industry user policies, and in part by surveillance of social media activity by private companies.

Fundrise Opportunity Zone Fund Has Raised Over $ 22 Million (Crowdfund Insider), Rated: A

Real estate investment platform Fundrise has raised over $22 million for their Opportunity Fund. The information was revealed in a recent Form D 5o6c filing with the Securities and Exchange Commission (SEC).

Kabbage acquires Radius Intelligence, the marketing tech firm with a database of 20M small businesses (TechCrunch), Rated: A

Data is the new oil, as the saying goes, and today Kabbage — a fintech startup backed by SoftBank that has built a business around lending up to $250,000 to small and medium enterprises, using AI-based algorithms to help determine the terms of the loan — is picking up an asset to expand its own data trove as it looks to expand into further SMB financial services. The company has acquired Radius Intelligence, the marketing technology firm that has built a database of information on some 20 million small and medium businesses in the U.S.

Here is a list of the top nonbank and alternative lenders in 2019 (Business Insider), Rated: A

Nonbanks and alternative lenders have garnered attention in the banking industry due to their ability to partner with legacy banks and utilize technology to make financial transactions more efficient and convenient for users.

Source: Business Insider

Chime now has 5 million customers and introduces overdraft alternative (TechCrunch), Rated: A

Challenger bank Chime has reached 5 million customers in the U.S. The San Francisco-based startup is creating an FDIC-insured mobile bank without any physical branch. The company also promises fewer fees.

Back in March, Chime  said it had 3 million customers when it announced its $200 million Series D round. So that’s 2 million additional customers in roughly 5 months.

Zac Prince of BlockFi (Lend Academy), Rated: A

Even Financial raises $ 25 million to connect banks with channel partners (VentureBeat), Rated: A

Even Financial, a four-year-old New York-based provider of APIs for financial services search, acquisition, and monetization, today announced that it’s raised $25 million in a strategic round of investment co-led by Citi Ventures and MassMutual Ventures, with additional participation from LendingClub. Existing backers American Express Ventures, Canaan Partners, F-Prime Capital, GreatPoint Ventures, and Goldman Sachs also participated in the round, which brings the company’s total raised to $50 million.

Credit Sesame, a platform for managing loans and credit scores, picks up $ 43M en route to IPO (TechCrunch), Rated: A

Credit Sesame — which lets consumers check their credit scores and evaluate options to rebalance existing debts and loans to improve that score and thus their overall “financial health,” in the words of CEO and founder Adrian Nazari — has raised $43 million. With the company already profitable and growing revenues 90% each year for the last five, Nazari said that this round is likely to be the last round the company raises before it goes public.

Household debt in the U.S. continues to rise and as of this year now stands at nearly $14 trillion.

Fintech startup CrowdBureau closes $ 1.1 million Series A equity funding with $ 9.7M valuation (Tech Startups), Rated: A

CrowdBureau Corporation, a fintech startup and index provider, has closed $1.1 million Series A equity funding to expand its series of benchmarks and launch a pilot program for its patent-pending regulatory technology product. The round, which values the company at $9.7 million, was led by Clydagh Limited, Estuary Holdings Ltd. and Alpama Limited along with existing investors.

Some Companies Offer a New Benefit: Payroll Advances and Loans (WSJ), Rated: A

A growing number of companies are helping workers gain access to payroll advances and loans, reflecting concern over the impact money problems are having on productivity levels and worker retention.

Employers including Walmart Inc. and Pima County, Ariz., have recently added these services. The aim is to help cash-strapped employees, many with damaged credit, cover unexpected expenses without resorting to high-cost debt.

Lendingblock Launches Institutional Crypto Lending Platform (Lendingblock), Rated: A

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the launch of its institutional lending platform on September 3, 2019. The lending product, which is a reinvented version of securities lending from traditional capital markets, is the first exchange fully dedicated to pure crypto lending and aims to support the needs of the broader cryptocurrency market by providing a secure and liquid venue for lending and borrowing needs of institutional market participants.

Upon launch, Lendingblock platform users will be able to borrow and lend BTC, ETH, PAX and USDT on a fully collateralized basis, for loan terms of 1, 7, 14 and 30 days, with a minimum trade size of $100,000 equivalent of a specified digital asset.

How American Express uses machine learning to detect fraud (American Banker), Rated: A


A financial planner says there’s a ‘huge opportunity’ to build wealth during a recession (Business Insider), Rated: A

As long as you have a cash safety net to fall back on should you lose your job or face an unexpected expense, there’s little reason to panic, says Lauren Anastasio, a certified financial planner at SoFi, a personal-finance company.

Are P2P Loans A Viable Investment for Your Portfolio? (Yahoo! Finance), Rated: A

Peer to peer (P2P) loans allow you to act as a bank, providing loans directly to other individuals or businesses in exchange for a return on your investment via interest payments. Investing in P2P loans, which are typically smaller than a traditional bank loan, has proven to be reliable no matter the economic climate.

Judge Rejects States’ Fintech Charter Challenge, Again (Bloomberg Law), Rated: A

The Office of the Comptroller of the Currency was able to beat back a challenge by state regulators to its proposed charter for financial technology firms for a second time, but the charter remains in limbo due to other litigation.

White Oak Global Advisors Announces Commercial Property Assessed Clean Energy (PACE) Financing Program (GlobeNewswire), Rated: B

White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the California Statewide Communities Development Authority (“CSCDA”) has named White Oak as a commercial PACE Program Administrator for the CSCDA’s Open PACE Program.  As a Program Administrator, White Oak will provide up to 100% financing for energy efficiency, renewable energy, water conservation, and seismic retrofit projects on commercial real estate.

White Oak is seeking to fund projects ranging in size from $500,000 to $150 million.

United Kingdom

RateSetter revamps investment products (P2P Finance News), Rated: AAA

RATESETTER is rejigging its investment products, to boost liquidity and give the peer-to-peer lender more control over market rates.

The three new products, which will be available on 3 October, will be called Access, Plus and Max. Access will offer three per cent interest and no fees to access money; Plus will offer four per cent interest and cost 30 days’ interest to access money; and Max will offer a five per cent interest rate, with a fee of 90 days’ interest to access money.

Funding Circle Amateur Lenders Facing Longer Waits To Cash Out (Morningstar), Rated: AAA

Amateur lenders on peer-to-peer lending platform Funding Circle Holdings PLC are facing waits of 100 days to cash out of their loans, it has emerged.

Investors who provide funding for small businesses through the platform can list old loans for resale to other investors if they wish to withdraw all their money.

But the PA news agency understands that the amount of time taken to re-sell the loan parts has risen from just a few days in January to up to three months in recent transactions.

Funding Circle reveals inclusion in FTSE4Good Index Series (Funding Circle), Rated: A

Funding Circle today reveals its inclusion in the FTSE4Good Index Series, which recognises companies that demonstrate the highest standards of corporate governance and sustainability.

Woodford trust is on the FTSE 250 casualty list (The Times), Rated: B

The investment trust, which focuses on early-stage companies, was one of six companies to be relegated from the second tier of quoted stocks.

Among them is Funding Circle, the online peer-to-peer lender aimed at small and medium-sized companies, which floated at 440p a year ago. Last night its shares closed at 110¼p.

P2PGI blames writedowns and Funding Circle bad debts for poor July (P2P Finance News), Rated: A

P2P GLOBAL Investments has blamed writedowns in the value of two equity stakes and bad debts from Funding Circle for a “disappointing” performance in July.

The alternative finance-focused investment trust delivered a 0.33 per cent NAV return for the month of July, down from 0.48 per cent the previous month. This brought the trust’s year to date return to 2.88 per cent, and 23.93 per cent since inception.

Investors ‘nearly’ double IFISA holdings (AltFi), Rated: A

Small investors have parked £588m across 40,400 accounts by the end of the second quarter of this year, according to trade body the Peer-to-Peer Finance Association (P2PFA).

The compares with around £300m invested in this product 12 months ago across major platforms such as Funding Circle, Ratesetter, Zopa, said the trade body.

Lending Works targets profitability and £10m turnover in 2019 (P2P Finance News), Rated: A

The peer-to-peer consumer lender reported a loss of just over £2.1m for the year ended 31 December 2018, up from £1.41m the previous year, which chief executive Nick Harding (pictured) attributed to a larger wage bill.

There is no requirement for businesses to report revenues in small company accounts, but Harding revealed that the firm saw revenues rise to £6.2m last year and is targeting £10m this year.

Peer to Peer Lender Folk2Folk Tops £300 Million in Lending (Crowdfund Insider), Rated: A

Folk2Folk, a peer-to-peer lender for local, rural and SME businesses, has now surpassed £300 million in lending, according to a company release. Folk2Folk notes that it is the 3rd largest P2P Lender to UK businesses in terms of money lent.

P2PFA boss Paul Smee: ‘Lendy was an outlier that should not have been authorised’ (AltFi), Rated: A

The collapse of Portsmouth-based property peer-to-peer firm Lendy, with outstanding loans of more than £160m, and some £90m in default, prompted the new rules from the FCA. The watchdog is also carrying out an in-depth report into the firm’s failure, which affected with some 21,500 investors. Critics argue that Lendy under competitive pressure wrote poor quality loans to swell its balance sheet, which then turned bad.

However, the Lendy crash, taken together with the poor float of the sector’s biggest firm Funding Circle last October, which languishes 75 per cent below its 440p float price at around 112p this week, has tarnished the sector.

UK Fintech Curve fastest startup ever to reach £4m Crowdfunding on Crowdcube (Fintech Finance), Rated: B

Last month, Curve announced plans to launch a seven figure crowdfunding campaign for early September, with plans to raise £1million. However, just 42 Minutes after launching to pre-registered customers, Curve had raised four times that figure, breaking records in the process. The current overfunding amount stands at £5million.

China

Form 6-K Yirendai Ltd. For: Sep 30 (Street Insider), Rated: AAA

  • Cumulative number of investors served reached 2,185,513, representing an increase of 1% from 2,159,490 in the first quarter of 2019 and compared to 1,974,984 in the second quarter of 2018.
  • Number of active investors in the second quarter of 2019 was 671,957, representing a decrease of 13% from 768,514 in the first quarter of 2019 and compared to 928,251 in the second quarter of 2018.
  • Total assets under management (“AUM”) for Yiren Wealth was RMB 43,604.2 million (US$ 6,351.7 million) as of June 30, 2019, representing a decrease of 7% from RMB 46,663.1 million as of March 31, 2019. Average AUM per investor reached RMB 149,480 (US$ 21,774) as of June 30, 2019, representing an increase of 7% from RMB 139,473 as of March 31, 2019.
  • AUM of non-P2P products amounted to RMB 354.3 million (US$ 51.6 million) in the second quarter of 2019, representing a decrease of 23% from RMB 457.7 million in the first quarter of 2019 and compared to RMB 951.0 million in the second quarter of 2018. Non-P2P products include money market funds, mutual funds and insurance.

Consumer Credit—Yiren Credit

  • Total loan originations in the second quarter of 2019 reached RMB 9.7 billion (US$1.4 billion), representing a decrease of 12% from RMB 10.9 billion in the first quarter of 2019 and compared to RMB 18.2 billion in the second quarter of 2018.
  • Cumulative number of borrowers served reached 4,491,466, representing an increase of 2% from 4,404,812 in the first quarter of 2019 and compared to 4,027,254 in the second quarter of 2018.
  • Number of borrowers in the second quarter of 2019 was 135,246, representing a decrease of 10% from 149,715 in the first quarter of 2019 and compared to 267,628 in the second quarter of 2018.
  • The percentage of loan volume generated by repeat borrowers was 35.9% in the second quarter of 2019.
  • 52.5% of loan originations were generated online in the second quarter of 2019.
  • Remaining principal of performing loans reached RMB 58,071.3 million (US$8,459.0 million) as of June 30, 2019, representing a decrease of 8% from RMB 63,213.8 million as of March 31, 2019.

Yirendai Ltd. (YRD) Q2 2019 Earnings Call Transcript (The Motley Fool), Rated: AAA

As of September 2019, the line of credit we have obtained from our institutional partners has increased from RMB19 billion in Q1 2019 to close to RMB30 billion. We are now working with approximately 10 partners, including leading joint stock and city commercial banks. We expect loan origination funded by institutional partners to reach approximately 30% by the end of this year.

China Rapid Finance Retains China Merchants Bank New York and Pangaea Finance as Co-Financial Advisors for Recapitalization and Restructuring (Yahoo! Finance), Rated: AAA

China Rapid Finance Limited (XRF) (the “Company”) today announced that its Board of Directors has retained China Merchants Bank Co., Ltd., New York Branch (CMBNY), and Pangaea Finance as separate Co-Financial Advisors, and Pangaea Finance as Structuring Agent, to advise it for strategic alternatives, including but not limited to potential strategic partnerships, recapitalization of certain operating companies, and for a related reconfiguration of the Cayman company as a listed investment vehicle for China credit.

Central bank to include troubled P2P lending industry in credit system (Technode), Rated: A

China’s central bank will include the country’s troubled online peer-to-peer (P2P) lending platforms in its credit reference system as the clampdown on illegal financial services continues, Chinese state-run media reported on Wednesday.

China’s credit system to cover P2P lending in tightening regulation (Xinhua), Rated: A

P2P lending platforms in operation will provide certain information such as online lending interest rates to credit reference agencies such as operators of financial credit information basic databases and Baihang Credit, China’s only licensed and market-oriented personal credit agency, according to an official guideline.

China Central Bank’s Credit System to include P2P Lending Platforms amidst tightening regulations (China Knowledge), Rated: A

Credit information of P2P lending platforms will be collected, regardless of their operational status. New penalties will also be imposed on defaulting borrowers of P2P online lending. Some of the penalties include higher loan interest rates and restriction limits to loan and insurance services.

Chinese entrepreneur among 41 arrested over illegal P2P platform (CGTN), Rated: A

Property mogul and founder of a leading Shanghai contemporary art museum Dai Zhikang has turned himself into police following the collapse of a peer-to-peer lending platform, as China continues to crackdown on illegal online lending.

Shanghai police confirmed Monday that Dai, the founder and head of Zendai Group, was among 41 people being investigated over illegal fundraising through an online P2P platform called Laocaibao.

European Union

Revolut is looking to hire 400 customer support staff following compliance complaints (Business Insider), Rated: AAA

Revolut is looking to hire up to 400 staff at a new base in Portugal, a move that will increase its employee headcount by almost a third.

Source: Business Insider

German online bank N26 expands to Switzerland (Verdict), Rated: A

German online bank N26 has launched its services in Switzerland, as it continues to build up its footprint across the globe.

Binance Crypto Lending Program expansion – a bad idea for traders (FX Street), Rated: A

Binance is one of the latest entries in launching its crypto lending platform on August 28. In the first phase, it began with a short period fixed return on Binance (BNB), USDT (Tether) and Ethereum Classic (ETC). It provides an annual return of 15%, 10%, and 7% respectively, beginning with a 14-Day fixed period. Binance starts with about $30 million in crypto-lending. Moreover, the annual interest offered is higher than the return from banks.

International

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

Milestones in culumulative volume lent crossed this month:

  • Bondora: 250M EUR
  • Fellow Finance: 500M EUR
  • Mintos: 3000M EUR
  • Thincats: 500M GBP

The total volume for the reported marketplaces in the table adds up to 634 million Euro. I track the development of p2p lending volumes for many markets.

Source: P2P-Banking

Fall Conference Season for Fintech Kicks Into Gear This Month (Lend Academy), Rated: AAA

ABS East

When: Sept 22-24, 2019
Where: Miami, FL
Link:  /> Discount code: LEND10

Lend360

When: Sept 25-27, 2019
Where: Dallas, TX
Link: 

LendIt Fintech Europe

When: Sept 26-27, 2019
Where: London, UK
Link: 
/> Discount code: LENDACADEMYVIP

Moneyconf

When: Nov 4-7, 2019
Where: Lisbon, Portugal
Link: 

Money2020 China

When: Dec 4-6, 2019
Where: Hangzhou, China
Link: 

I WISH I’D BOUGHT IT WITH KLARNA (The Drum), Rated: B

The Swedish ‘pay later’ service, Klarna has launched its first international campaign – ‘I wish I’d bought it with Klarna’ – with the internet sensation Celesta Barber as its leading lady.

Australia

Ethereum lossless lottery PoolTogether is still innately flawed despite updates (finder), Rated: A

How do you encourage people to practice responsible saving? Easy. You shake it up with a dose of randomness and call it a lottery instead. This is the basic principle behind Pool Together, a lossless lottery designed in such a way that there are no losers. The idea is that everyone always gets back the price of their ticket, but one lucky person walks away with a lot more than that.

Pool Together is built on Ethereum, and utilises the Dai stablecoin in combination with the Compound crypto lending system.

India

Online lender Namaste Credit launches digital-only bank (Finextra), Rated: AAA

Online lending marketplace Namaste Credit today said that it is launching its Neobanking solutions for MSMEs, becoming a full-fledged “Digital-Only Bank” with a foundational SaaS play.

IndiaMoneyMart opens the first East-India branch for NBFC-P2P Lending (United News of India), Rated: A

Making sense of regulatory sandbox for Fintech startups (Vantage Asia), Rated: A

Over the past few years India has seen rapid development in the financial technology sector and it has the second highest number of Fintech startups in the world. According to certain estimates, India’s Fintech sector added about 1,300 startups from 2015 to 2018. According to the National Association of Software and Services Companies, India’s Fintech market is expected to be worth US$2.4 billion by 2020.

India Government Panel Pushes for Fintech, Regtech Adoption (Regulation Asia), Rated: A

The panel has also proposed the development of a marketplace model for P2P lending, and the introduction of virtual banking in India.

Why fintech panel believes P2P platforms can ease credit supply (India Times), Rated: A

While the importance of P2P lending sector in India is understood by all stakeholders, and a lot has been done over the last few years to encourage the sector, a lot more needs to be done to accelerate its growth.

APAC

Leading Southeast Asian Peer to Peer Lender Funding Societies Revamps with New Executive Team (Crowdfund Insider), Rated: AAA

Funding Societies, one of the largest peer-to-peer (P2P) lending platforms in Southeast Asia, has revamped its executive team with new hires.

Matt Lambie joins as the Chief Technical Officer, Dheeraj Chowdhry as the Chief Executive Officer and Jared Goldberg as the Chief Data Officer.

Top 10 APAC Startups Reigning the Future Finance Industry (Banking CIO Outlook), Rated: A

Africa

AlphaCode of South Africa Invests $ 1.5 Million in Three Domestic Fintech Startups (CryptoNewsZ), Rated: AAA

AlphaCode is the incubation and investment arm of Rand Merchant Investment Holdings, and in a new development, the company has decided to invest a combined $1.5 million in three separate Fintech startups in South Africa. The companies in question are Zande Africa, which is a platform meant for merchant finance, while the others are Bright On Capital, a peer to peer lending firm and Livestock Wealth, an agricultural investment startup. AlphaCode invested $655,000 each on Bright On Capital and Zande Africa, while Livestock Wealth got an injection of $131, 000.

Authors:

George Popescu
Allen Taylor

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

Thursday April 4 2019, Weekly News Digest

soft spending

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

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

soft spending

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

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

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

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

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

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

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

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

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

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

US Economy Slowing (PeerIQ), Rated: AAA

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

Source: Bloomberg, PeerIQ

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

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

Household wealth saw a $5 trillion decline last quarter

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Business Services Franchise

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

Minimum Cash Required:$25,000

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

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

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

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

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

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

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

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

Read the full complaint here.

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

European Union

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

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

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

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

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

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

International

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

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

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

Onfido scores $ 50 million investment (Finextra), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M.

Australia

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

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

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

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

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

India

P2P lending (Invest in India), Rated: AAA

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

Southeast Asia

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

Canada

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

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

South Africa

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

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

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

Latin America

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

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday January 24 2019, Weekly News Digest

millennials loan money

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

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

millennials loan money

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

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

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

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

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

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

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

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

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

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

Strong Bank Earnings (PeerIQ), Rated: AAA

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

Source: PeerIQ

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

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

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

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

Source: WalletHub

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Fundera

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

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

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

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

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

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

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

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

European Union

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

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

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

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

International

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

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

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

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

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

India

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

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

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

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

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

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

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

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

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

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

Asia

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

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday October 11 2018, Daily News Digest

marketplace lending securitization

News Comments Today’s main news: Marcus may reign in new loans, but not SoFi, LendingClub. Fellow Finance goes public. Aereal Bank invests in BrickVest. Aussie borrowers dump banks for P2P lenders. Figure launches HELOCs on blockchain. Today’s main analysis: PeerIQ’s Q3 2018 marketplace lending securitization tracker. Today’s thought-provoking articles: How every day can be payday. Older Americans are most creditworthy. Corporate […]

marketplace lending securitization

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

Goldman’s Marcus May Rein In New Loans Next Year But Rivals Aren’t Worried (Forbes), Rated: AAA

Nearly two years after exploding on the online personal lending market scene, Marcus, the unit of Goldman Sachs, is reportedly retreating, reigning in its loan origination target for 2019.

That’s according to 

PeerIQ’s Q3 2018 Marketplace Lending Securitization Tracker (Lend Academy), Rated: AAA

A total of eight marketplace lending securitizations were issued in the third quarter, totaling $3.5 billion. This is the fifth highest level of quarterly issuance which is noteworthy given that the summer is typically a slower period for issuance. This is an increase of 35% from the prior year period.  It’s hard to believe that total marketplace lending issuance to date stands at $41.9 billion across 134 deals.

There has been a shift with spreads tightening and yields falling on new deals, a reversal from prior quarters. PeerIQ noted that all-in yields on consumer deals decreased 2 basis points from 3.72% to 3.7% and student deals decreased 100 basis points from 4.5% to 3.5% over the previous quarter.

Economic Growth is Solid, Lending Securitization Strong, but are Storm Clouds Gathering? (Crowdfund Insider), Rated: A

PeerIQ states:

“Citigroup, Deutsche Bank, and Credit Suisse continue to top the issuance league tables with 57% of MPL ABS transaction volume. Citi and CS are increasing their activity in the Fintech space, with CS also offering risk retention solutions on securitizations.”

The end of the two-week pay cycle: How every day can be payday (MarketWatch), Rated: AAA

Teresa Long, an assistant manager at a Walmart near Dallas, is like many Americans: She sometimes struggles to pay her monthly bills on time, especially when her biweekly paycheck fluctuates.

Occasionally, when she was not able to budget correctly for the month, she would default on a bill, miss a payment or send in a check late. Sometimes Long would take out a payday loan, but the fees were crippling. “You’re taking a $300 loan, and, by the time you pay it off, it’s probably $1,000 or $1,500,” said the 40-year-old mother of four. “It’s extra money you could have been saving.”

So when she saw information on an internal Walmart website about a new service from an Oakland, Calif.-based company called Even, Long was intrigued. It promised to pay her up to half her wages in advance, on demand, for an average $6 monthly subscription fee.

Sources: Pew Charitable Trusts, Center for Financial Services Innovation

LendingTree Study Finds Older Generations Most Creditworthy (PR Newswire), Rated: AAA

LendingTree today released its study on Americans’ credit scores by generation that found that the older someone is, the better their credit tends to be. On average, members of the silent generation (the oldest cohort) have credit scores 100 points higher than those of millennials.

Key takeaways

  • Millennials and Gen Xers have, on average, “fair” credit scores.
  • Baby boomers have “good” scores.
  • Members of the silent generation have “very good” scores.
Source: PR Newswire

Why older people have higher credit scores

One possible reason for higher scores among older people is cultural. In general, they may use credit less and may be more disciplined savers and spenders, said Kali McFadden, senior research analyst at LendingTree.

Another reason is that older Americans are more settled financially, with lower monthly costs. In general, the older someone is, the lower their mortgage payments and student loan debts are (or they don’t have such payments at all). Older Americans may also not need new furniture or have child care costs. That means they are less likely to have urgent financial costs that can result in delinquencies, which can hurt credit scores.

Millennials and Gen Xers may have to pay more for loans

Banks, credit card issuers and other lenders make lending decisions based on a borrower’s creditworthiness. They offer much better rates to borrowers with higher scores.

Source: PR Newswire

Boomers aren’t much better off

While the higher credit score of baby boomers (average credit score: 696) is a sign of better financial stability than the younger generations, there’s still room for improvement. The average boomer score trails that of the elder generation by 38 points.

The CEO of Robinhood sets out his vision after announcing another move to compete with major brokerages (Markets Insider), Rated: A

Robinhood, the zero-fee stock trading app that helped kickstart a race to the bottom in brokerage fees, has a new weapon in its arsenal as it fights to become the Amazon of personal finance: an in-house clearing system.

The $5.6 billion startup announced Wednesday that it has completed a two-year effort to build and launch its own in-house clearing provider that will allow it to save money and improve trading for its 6 million customers, cofounder and CEO Vlad Tenev told Business Insider.

Mike Cagney’s Figure Launches Blockchain-Powered Online Home Equity Loans (PYMNTS), Rated: AAA

Figure rolled out the first of those products yesterday: a digitally processed home equity loan that it claims can cut approval time to five minutes. According to Cagney, those Figure loans can range between $15,000 and $100,000, with funds made available to users in five days — down from the 45 days that such products usually take.

Learn more about Figure’s business model here.

Online Investing in Real Estate through Crowdfunding Expected to Grow (Urban Land Institute), Rated: A

Crowdfunding has captured the imagination—and money—of investors throughout the United States. While it is used for everything from charitable campaigns to launching startup businesses or paying legal fees, commercial real estate may be the largest online investment opportunity for crowdfunding to date, according to a panel at the 2018 ULI Fall Meeting in Boston.

“This $14 trillion market is the nation’s third-largest investment asset class behind stocks and bonds. Crowdfunding allows real estate firms to reach beyond friends and family to investors anywhere,” he said.

Toward a more inclusive fintech industry (American Banker), Rated: A

I worked for seven years in a company run exclusively by men — no women on the leadership team at all. The executive suite was physically walled off, a literal boys’ club, and no matter how valuable my performance, I wasn’t going to be a “cultural fit” for the all-male back room. Even now, 84% of venture-backed companies lack even a single female founder.

Significantrigorous research proves women in leadership make companies more profitable, and diverse leadership teams make better business decisions.

Direct lending platform Goji hits £100m in assets (AltFi), Rated: A

Goji has reached over £100 million in assets under management on its platform, the firm has said.

This latest milestone coincides with Goji becoming a partner of adviser-support network SimplyBiz.

Jake Wombwell-Povey, CEO of Goji says the firm has doubled the assets on the platform in a little over six months.

Roostify Announces Bidirectional Integration with Ellie Mae’s Encompass Digital Mortgage Solution (BusinessWire), Rated: B

Roostify, a digital lending solution, announced that its platform now offers a bidirectional integration with Ellie Mae’s Encompass digital mortgage lending platform. The seamless integration allows lenders to easily pass information between the two systems, driving quality and efficiency in the loan origination process.

States’ response to OCC fintech charter ‘disappointing,’ top Treasury official says (American Banker), Rated: B

A senior Treasury Department official said he was disheartened by state regulators’ negative response to its fintech report, which supported the Office of the Comptroller of the Currency’s plans to create a national fintech charter.

United Kingdom

Fintech startup Wagestream wants to tackle Britain’s ‘poverty premium’ (TechWorld), Rated: AAA

The UK’s Financial Ombudsman Service claims to have received 10,979 complaints about payday loans between April and June 2018, according to figures from its annual review for 2017/18.

The figures came just weeks after what was the UK’s biggest payday lender, Wonga, went into administration.

But London-based Fintech startup, Wagestream, has emerged to put an end to the misery of ‘poverty premium’ as it makes a stand to ‘destroy payday loans’.

Savers Offered 8% By ISA Bond That Fights for Justice (OA Online), Rated: A

INVESTORS seeking a higher rate of return – and who want to use their money to help victims of things like professional negligence – will be interested in a new bond by Just, held through an Innovative Finance ISA called Just ISA.

Launched in summer 2018, the Just ISA offers tax-free returns of 8% by investing in a bond that is ultimately used to fund legal cases on behalf of people who are seeking redress from things such as professional negligence by individuals and corporations.

London’s most influential people 2018 (Evening Standard), Rated: B

Tom Blomfield   – Chief executive of Monzo

The Oxford graduate has made carrying the ubiquitous orange payment card a mark of cool as its cult status continues to grow.

Samir Desai – Chief executive and co-founder of Funding Circle

The former management consultant has been at the helm for eight years of the leading peer-to-peer lender to small businesses.

Jaidev Janardana – Chief executive of Zopa

The former Capital One man is boss of the world’s first peer-to-peer lending company which is launching a bank.

China

Overheard in the Long Room: corporate China (FT Alphaville), Rated: AAA

Two diverging trends here. China, on a national level, is requiring more and more cash to service its debts. Not good news for those concerned about the Republic’s burgeoning debt burden, estimated to be anywhere between 300 to 350 per cent of GDP, depending on who you ask and what mood they’re in.

Source: Financial Times

This hasn’t deterred bond buyers however, as the IMF recorded a circa $40bn flow into yuan-denominated bonds over the second quarter of this year, according to Brad Setser at the CFR:

Source Financial Times
European Union

Fellow Finance goes public (AltFi), Rated: AAA

The platform is expected to raise approximately €10m. With a valuation of €55m at the close of the IPO on Tuesday, the platform anticipates rapid growth. The IPO saw 1.3 million new shares in the company on offer for an 18.3 per cent stake in the company. The offer was 2.2 times oversubscribed.

In addition to the new shares on offer, just under 1.3 million in existing shares in the company will go on sale too.

Nasdaq Helsinki welcomes Fellow Finance to Nasdaq First North Finland (Nasdaq), Rated: A

Nasdaq (Nasdaq: NDAQ) announce that trading in Fellow Finance Plc shares (short name: FELLOW) commence today on Nasdaq First North Finland. The company belongs to the Financials sector. Fellow Finance is the 61st company to be admitted to trading on Nasdaq’s Nordic markets* in 2018, and it represents the 9th listing on Nasdaq Helsinki in 2018.

German Blockchain Banking Group Bitwala Teams Up With solarisBank to launch Cryptobank Services (Crowdfund Insider), Rated: A

On Tuesday, German blockchain banking group Bitwala announced it has teamed up with solarisBank to launch its new cryptobanking services. According to Bitwala, nearly 35,000 customers have already pre-registered to be among the first to get access to new service, which helps customers to manage cryptocurrencies with unprecedented convenience and benefit from the high level of security and deposit protection commanded by German banking laws.

International

Germany’s Aareal Bank invests in UK real estate platform BrickVest (Banking Tech), Rated: AAA

Germany’s Aareal Bank says it plans to acquire a stake in BrickVest, the London-based online platform for commercial real estate investments.

SALT Coin Hits Retracement Target After 55% Gains (Global Coin Report), Rated: A

The announcement by SALT coin to accept Litecoin (LTC)as collateral in their blockchain lending platform led to an explosion in the price of their ERC-20 token. In a 24 hour shake-up that rocked the altcoin market just before the weekend, this crypto-lending favorite rose over US $0.82 on Friday morning. SALT (SALT) shot up 55% overnight while the rest of the market stagnated in a prolonged malaise.

The platform now offers USD loans at a 5.99% interest rate(for loans less than US$75,000) and has removed the cap on maximum loan amounts.

Nexo (NEXO) Overview: We might have gotten the first legit crypto lending platform (Captain Altcoin), Rated: A

After a prolonged period of sideways movement throughout the month of September, staying just below $0.050, the currency started growing around 21st. The slow rise lasted until 30th, when the daily trade volume sharply dropped off from $984,935 to $230,742. The same way it dropped, the volume soared back up on October 1st. NEXO price followed suit and grew to$0.0933 on a daily trade volume of $1,765,517. After a short correction of both parameters, the price and volume spiked up once again on the 5th, this time reaching $0.1143 and $1,936,530 respectively.

Source: Captain Altcoin

Crowdfunding firm aims for rapid global growth (BusinessDay), Rated: A

Finnish crowdfunding platform Fellow Finance is targeting fast international growth after a successful initial public offering (IPO) in Helsinki, its CEO says.

Founded back in 2013, the company was valued at €55m by the IPO, which closed on Tuesday and was more than two times oversubscribed.

Australia

More Aussie borrowers are dumping banks for peer-to-peer lenders, CommSec reveals (mozo), Rated: AAA

According a recent CommSec Economic Insights Report, the number of Aussies borrowing from non-bank financial institutions rose by 10.3% over the year to August.

“Banks are facing greater competition from non-banks. At the same time bank deposits are only lifting at a 2.5% annual rate, putting greater reliance on external funding. It is clearly a competitive and challenging environment for financial institutions,” said CommSec chief economist, Craig James.

Latin America

Goldman Sachs has joined George Soros and Steve Cohen in backing an Argentinian mobile banking startup (Business Insider), Rated: AAA

Ualá, the one-year-old mobile banking startup, raised $34 million in its series B round led by Goldman Sachs Investment Partners, along with existing investors including a private fund managed by Soros Fund Management, Jefferies, the venture arm of Steve Cohen’s Point72, and entrepreneur Kevin Ryan, according to an announcement seen by Business Insider.

Over 50% of people in Argentina had never had a card before and are only operating in cash, so the company aims to provide these people financial inclusion by giving them access to financial system, he added.

What’s happening with crypto in Latin America? (Crypto Insider), Rated: A

Latin America is undergoing somewhat of a transformation in the world of global finance. With the state of the banking industry in many countries in the region, people are turning to one another to solve their problems. From neighborhood initiatives to cross-border peer-to-peer lending platforms and online-only independent banking solutions, Latin America is exploring new ways to approach their personal finances.

APAC

Borrowers and Lenders Discover a Reputable Financial Conduit with FundKo (Digital Journal), Rated: AAA

As the world becomes ever more interconnected, as does the financial system. Borrowers and lenders are no longer confined by the parameters of a localized system. In fact, many lenders are branching out to the internet, through online companies such as FundKo.

FundKo is a peer to peer lending company in the Philippines.

No customer may invest 100% of their money on a single loan: in fact, the largest sum of money they may invest is 10% of a loan. This guideline ensures that lenders never suffer a catastrophic loss.

Authors:

George Popescu
Allen Taylor

Wednesday June 20 2018, Daily News Digest

Banks with most closures

News Comments Today’s main news: SoFi Money has launched. Lendio Employee Contribution Program funds 2,800 loans through Kiva. Goldman funds Yirendai. Nubank opens 1.5M digital accounts. Today’s main analysis: UK banks are closing branches faster. Today’s thought-provoking articles: How Goldman Sachs is transitioning into a consumer-facing bank. Europe’s IPO market is heating up. SoftBank yanks startups from Renren. The rise of […]

Banks with most closures

News Comments

United States

United Kingdom

China

European Union

International

India

Brazil

News Summary

United States

Are you ready to ditch your bank? SoFi is betting its future on it (Fast Company) Rated: AAA

At first glance, SoFi’s banking app, which launches in beta today, is no different from the existing options on the market. It comes with a debit card, enables peer-to-peer payments, and accepts mobile check deposits. The interface, like that of many banking apps, is dominated by a blue-and-white color scheme. But in the details, there is a hint of SoFi’s bigger ambitions. SoFi Money, as the product is known, sets the stage for the fintech company to become both a financial hub and lucrative recommendation engine for its 500,000-plus members.

Source: Fast Company

Goldman Will Pay Big Money for Cash — Yes, Even Your Measly Savings (The Street) Rated: AAA

The Wall Street investment bank is trying to transform itself into a broader financial-services company like bigger rivals Bank of America Corp. and JPMorgan Chase & Co. So a couple years ago, Goldman expanded beyond its traditional clientele — elite corporations, big investors and the super-rich — to provide retail banking through a new website called Marcus. The company now offers both personal loans and savings accounts, with a minimum deposit of just $1. So, ordinary people can apply.

But here’s why you should take a look now: Since New York-based Goldman is trying to build up the business rapidly, it’s offering some of the highest rates on savings deposits in the U.S. – currently 1.7%. That compares with near-zero rates at the biggest retail banks, including Bank of America, JPMorgan Chase, Citigroup Inc. and Wells Fargo & Co.

Lendio Employee Contribution Program Funds 2,800 Loans in 78 Countries Through Kiva (ABC6) Rated: AAA

Lendio announced today that Lendio Gives, its employee contribution and employer matching program, has provided more than $70,000 in microloans to 2,800 underserved entrepreneurs in 78 countries through Kiva. In May, Lendio ranked 6th among Kiva’s Internal Business Groups for total fundings, with over 300 new loans funded.

5 Best and Fast Small-Business Loans (Entrepreneur) Rated: A

Also, find out how much you can actually afford to borrow by calculating your Debt Service Coverage Ratio (DSCR). To figure out your DSCR, you simply divide your net operating income by your total debt service. With some lenders, you can get away with a 1.0 ratio; however, most lenders prefer a DSCR that shows your annual net operating income is higher than your total debt, such as a DSCR of 1.35 and above.

Finastra acquires Malauzai (Payment Journal) Rated: A

Finastra has acquired Malauzai, a provider of mobile and Internet banking solutions for community financial institutions. The deal reflects Finastra’s commitment to the US retail and business banking sectors by further enabling digital transformation for community banks and credit unions across the country.

The acquisition is built on an already successful and proven partnership between Finastra and Malauzai, which saw the latter’s digital solution integrated into Finastra’s Fusion Phoenix core banking system.

Fees Not Hidden, LendingCorp Says In Challenge To FTC Suit (Law 360) Rated: A

LendingClub Corp. asked a California federal judge Monday to toss a Federal Trade Commission suit claiming the online lender falsely promises consumers their loans come with “no hidden fees,” arguing that its origination fee is noted on its website in at least three places.

The San Francisco-based company asserts in its motion to dismiss that an origination fee, deducted when loan funds are initially disbursed, is not hidden, and the FTC knows it.

5 Companies to Watch as Tech Takes Aim at the Finance Industry (PR Newswire) Rated: A

The $8.5 trillion U.S. financial services industry is going through a dramatic transformation, with incumbents fending off upstart fintech companies that promise to disrupt their old ways of doing business.

#1 Paypal (NASDAQ: PYPL)- PayPal processed approximately $49 billion in mobile payment volume in the first quarter, which is up 52 percent from a year earlier. Mobile payments actually account for 37 percent of Paypal’s entire payment volume.

#2 QPAGOS (QPAG)-QPAGOS (QPAG) is upending this dynamic industry, with what some like to call small “super-banks” deposited on street corners, in supermarkets, or an endless number of other convenient locations.

#4 Alibaba (NYSE: BABA)-Alibaba is quickly becoming one of the world’s hottest companies thanks to its innovative approach to technology.

Fintech entrepreneurs show why finance masters are not just for bankers (Financial Times) Rated: A

Some of the world’s most successful companies have been formed by founders quitting university to nurture their start-ups, not least the Harvard dropouts Bill Gates, of Microsoft, and Mark Zuckerberg, of Facebook.

But a small yet significant number of students on masters in finance degrees do the opposite, enrolling to improve their core finance knowledge.

Maximilian Voigt applied for a place on the masters degree in financial economics at Saïd Business School at Oxford university shortly after co-founding Gründermaschine, an incubator for early stage fintech ventures in Frankfurt.

New Credit Card Startup Lands $ 50 Million From PayPal Mafia And Other Investors (Forbes) Rated: A

Brex, a San Francisco company that offers a corporate credit card for startups, has launched its first product and raised $50 million in new investment, bringing its total funding to $57 million. PayPal founders Max Levchin and Peter Thiel contributed to the Series B financing round, in addition to fintech venture capital firm Ribbit Capital, early Facebook investor Yuri Milner and former Visa CEO Carl Pascarella.

The startup has a new model for determining whether companies are creditworthy. Instead of focusing on founders’ personal credit history or a company’s expected profits, it looks at the amount of money a startup has in its bank account, and it sets a credit limit that’s typically 10% of that total.

People are getting loans to pay for their vacations (Market Watch) Rated: A

Affirm charges interest, but presents that total as a flat fee at the beginning of the payment process, which was more comforting than putting the big purchases on a credit card, she said.

The fee varies depending on the customer’s creditworthiness and the time period during which they plan to pay.

Phillips isn’t alone. In recent years, companies have increasingly allowed travelers to book airfare, hotels and amusement-park tickets, with the promise they’ll pay later.

LendingTree Reveals How Your Neighbors Are Utilizing Equity in Their Homes (Lending Tree) Rated: A

Home improvement tops the list of uses for home equity loans. The most common use was home improvement, at 43 percent of home equity loan requests.
Real estate investors borrow the most. Borrowers who were looking to invest in another property had the highest property values and requested loan amounts. For property investments, borrowers requested an average of $103,625.
For non-property investments, which likely include small businesses, borrowers requested $80,241.
Just over 1 percent of requests were to fund retirement. Not surprisingly, this cohort had the highest average age of 63 — 12 years above the next highest average age.
A small share accessed their home equity for emergency expenses. This group had the lowest loan amount requested of $35,747 and kept their LTV low at 51 percent.
Debt consolidators push the limits on LTV. Borrowers looking to consolidate debt had the highest LTV of 74 percent.

Klarna Launches First U.S. Out-of-Home Marketing Campaign (Klarna Email) Rated: B

Klarna is mounting its first out-of-home marketing campaign in the U.S. in three-cities. Elements of the campaign will appear in San Francisco, New York City and Columbus, Ohio, beginning the week of June 18.

White Oak Commercial Finance Adds John Merille as Director of Originations (Markets Insider) Rated: B

White Oak Commercial Finance (“WOCF”) announced today the addition of John Merille as Senior Vice President and Director of Originations.

MoneyLion Appoints Jon Stevenson as New Head of Wealth Management and Banking (Business Wire) Rated: B

MoneyLion Inc., the financial operating system revolutionizing the way Americans save, invest, borrow, and build their credit, announced today that Jon Stevenson has joined the company as the new Head of Wealth Management and Banking.

In this role, Stevenson is responsible for developing simplified, accessible solutions that address the financial challenges faced by millions of Americans every day. He will help MoneyLion Plus members create investment plans that align with their unique circumstances and goals – services traditionally reserved for high-net-worth individuals through their Financial Advisor.

United Kingdom

LendInvest ups proc fees for NACFB registered brokers (Mortgage Strategy) Rated: AAA

Specialist lender LendInvest is upping procurement fees for NACFB registered brokers.

The lender currently offers 1 per cent proc fee as standard for bridging deals but is increasing this to 1.2 per cent exclusively for NACFB registered brokers.

LendInvest currently partners with the NACFB to run property development academies for brokers.

UK banks are increasingly closing branches (Business Insider) Rated: AAA

Here are some key statistics about branch closures:

  • Branch closures are accelerating. In 2016, 630 bank branches and building societies closed. This number increased nearly 40% to 879 in 2017. Meanwhile, 670 branches have already been closed or are due to close by the end of June, suggesting that this number will probably far higher this year.
  • Most branches have closed in Scotland. Not all regions in the UK have seen the same level of closures, and Scotland is currently leading the way with 368 closed branches, followed by the Southeast and Southwest, with 361 and 327, respectively. Northern Ireland, on the other hand, has only seen 44 branches close, so far. The trend toward closing branches probably depends in part on demand from customers, so branches in rural areas or with an older demographic may be more likely to stay open.
Source: Business Insider

The Starling Bank roadmap: What’s next for 2018? (Starling Bank) Rated: A

This means that more Starling customers will now be able to use their smartphone and wearable devices as a fast and secure way to pay almost anywhere that contactless payments are accepted and without ever having to get their card from their wallet.

Plus new customers on Android will be able to add their sparkling new Starling debit card to their Google Pay wallet straight from our app meaning that, like our iOS customers, you can start spending within minutes of opening your account!

Lending Standards Board to extend remit to P2P (Peer2Peer Finance) Rated: A

THE LENDING Standards Board (LSB) has revealed plans to extend its Standards of Lending Practice to the peer-to-peer lending and invoice finance sectors next year.

The voluntary standards came into effect in 2017 for loans, credit cards, overdrafts and charge cards.

UK Fintech Plum Returns to Seedrs: Now Seeking £850,000 in Funding (Crowdfund Insider) Rated: A

Less than a year after securing nearly £925,000 through its first equity crowdfunding campaign on Seedrs, Plum, an artificial intelligence (AI) chatbot for personal finance, has returned to the funding portal, seeking an additional £850,000 in funding.

China

Yirendai Obtains Institutional Funding from Goldman Sachs (PR Newswire) Rated: AAA

Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”) announced today that Goldman Sachs, a leading global investment banking firm, has provided the Company with RMB 324 million of funding for a term of 3 years.

Hexindai Reports Unaudited Fourth Quarter and Fiscal Year 2018 Financial Results (PR Newswire) Rated: AAA

Fourth Quarter of Fiscal Year 2018 Operational Highlights

  • Total loan volume facilitated (1was US$418.4 million (RMB2.7 billion) during the fourth quarter of fiscal year 2018, an increase of 236.7% from the fourth quarter of fiscal year 2017.
  • Gross billing amount (net of VAT)(2was US$31.8 million during the fourth quarter of fiscal year 2018, an increase of 231.1% from the fourth quarter of fiscal year 2017.
  • Gross billing ratio (net of VAT)(3) for credit loans was 7.6% during the fourth quarter of fiscal year 2018, a decrease from 8.1% during the fourth quarter of fiscal year 2017.
  • Number of borrowers (4) was 33,322 during the fourth quarter of fiscal year 2018, an increase of 285.2% from the fourth quarter of fiscal year 2017.
  • Number of investors (5) was 62,039 during the fourth quarter of fiscal year 2018, an increase of 103.2% from the fourth quarter of fiscal year 2017.

LexinFintech sees installment payments boosting China’s domestic consumption (Shine) Rated: A

Installment payments are helping to power China’s domestic consumption and sales of online lender LexinFintech Holdings Ltd’s installment finance platform Fenqile surged 220 percent during an e-commerce shopping festival.

Fenqile, translated as “Instalment Pleasure” in Chinese, lets consumers buy electronic equipment like mobile phones and consumer accessories such as handbags on credit and repay the loan in installments.

Sales of Shenzhen-based LexinFintech’s Fenqile surged 220 percent during the annual 618 e-commerce shopping festival on Monday, a major mid-year shopping event initiated by e-commerce giant JD.com.

European Union

Europe’s IPO market heats up, and unicorns are getting in line (CNBC) Rated: AAA

So far this year, 27 IPOs totaling $32.5 billion have been launched in Europe, eclipsing the 57 listings worth $8.28 billion last year, according to dealroom.co, an Amsterdam firm that tracks fast-growing companies. The big difference this year is not the number of listings, which has been fairly steady in recent years, but the size of the valuations of the companies. “There is a clear emergence of unicorns after a few years of increasing investment in the venture capital sector,” said Gilles Babinet, a French serial entrepreneur.

Swedish digital payments firm Izettle should have been the next head-turner for investors, but PayPal swooped in with an offer of $2.2 billion — twice the IPO value.

Building the digital investment bank of the future – Interview with Simona Vaitkune, CEO of Fast Invest (EU Startups) Rated: A

Fast Invest is a European P2P lending investment facilitator platform specialising in low-risk, medium-high return investment opportunities. With one successful ICO crowdsale behind and one currently ongoing, the company is now embarking on a blockchain enabled global expansion. Fast Invest is headquartered in London, with offices in Milan and Warsaw, and already employs a team of about 50 people.

We recently had the opportunity to talk with the founder and CEO, Simona Vaitkune, about the Fast Invest story so far and projects ahead.

Online lender Fellow Finance expands to Sweden (Finextra) Rated: A

Fellow Finance launches a new channel for personal financing to Swedish customers and simultaneously an opportunity for its investors to start investing in Swedish consumer loans.

From the launch Fellow Finance will offer its services for individual borrowers and plans to introduce a business loan option for companies in the future.
International

SoftBank Finally Finds A Bargain (Forbes) Rated: AAA

SoftBank continues to make waves by underwriting the valuations of a growing number of turbocharged “unicorns” carrying private values north of $10 billion. It recently bought 15% of Uber at a $48 billion valuation. In partnership with GM, it paid $2.25 billion for a 19.6% stake in Cruise Automation. Masayoshi Son’s conglomerate is also 

20 Best Cryptocurrency Lending & Fiat Loan Blockchain Platforms To Use (Bitcoin Exchange) Rated: A

So cryptocurrency loan platforms solve the liquidity problem that the market has at this moment. But let’s check some of the most popular and known lending coins.

BeeLend-BeeLend is able to connect borrowers and lenders in different countries.

BitBond-In a similar way to BeeLend, Bitbond connects borrowers and lenders on a peer-to-peer basis, allowing users to borrow up to $25,000 dollars.

Bitfinex-This is another platform that works as an exchange but supports fiat and crypto lending.

BlockFiBlocFi, is located in New York and offers users the possibility to borrow money against their BTC and ETH holding in 35 different US states.

Celcius-Born as an ICO that raised over $50 million dollars, it facilitates lending fiat currencies for cryptocurrency holdings as collateral.

Coincheck-The Japanese-based company has been lending cryptocurrencies since a very long time.

India

The rise of P2P lending platforms (Business Line) Rated: AAA

On the other side is 31-year-old Arpit Sabharwal, a Mumbai-based businessman, and lender on P2P platform Faircent. Arpit’s portfolio stands at 4 lakh and returns have been around 17 to 19 per cent. He is now re-allocating some of his mutual fund portfolio to the peer-to-peer lending platform.

But these platforms are not really risk-free. According to officials, the average default rate is in the range of 5-6 per cent.

According to industry insiders, there has been a near 15-20 per cent growth in loan applications and disbursements (across these platforms) on a month-on-month basis in the last one year.

While bigger players such as Faircent are said to be disbursing close to 2 crore a month, others like i2i Funding.com have been disbursing close to 60 lakh to 1 crore on a monthly basis.

Peer-to-peer lending claims its first victims (The Ken) Rated: A

Some of the biggest lenders on peer-to-peer lending marketplaces are staring at defaults from 20% all the way up to 50%. And RBI’s recent regulations are not going to fully fix it

IndiaMoneyMart Launches Loan Help Hotline for Borrowers Trapped in Payday Loan Debt (PR Newswire) Rated: A

Mumbai-headquartered IndiaMoneyMart has launched a Helpline for Loan applicants who are stressed and stuck in payday loan debt trap. Borrowers are welcome to reach out on +91-9082646766 between 11am to 4pm from Monday to Friday.

Latin America

Brazil’s Nubank storms to 1.5m digital account openings (Fintech Futures) Rated: AAA

Brazil-based challenger Nubank has got 1.5 million customers signed up for its digital savings account (“NuConta”) over the last six months.

As reported in October, Nubank started to offer these accounts in addition to its credit card business. The move was designed to provide access to billpay, account-to-account transfers, and the ability to earn more in interest than is available with a regular savings account.

According to the bank, it has transacted around BRL 4 billion ($1 million) in its digital account so far, with over four million credit card customers on its books.

Authors:

George Popescu
Allen Taylor

Monday February 5 2018, Daily News Digest

Nav financing

News Comments Today’s main news: Banco BNI starts lending through Fellow Finance. eBay drops PayPal for Adyen. Aviva exec backs robos. OneConnect secures $650M funding. Stripe sets up engineering hub in Dublin. EBANX gets $30M in funding from FTV Capital. Today’s main analysis: FT Partners’ Alternative Lending Market Analysis for January, and an interview with Nav CEO. Today’s thought-provoking articles: […]

Nav financing

News Comments

United States

United Kingdom

China

European Union

International

India

APAC

MENA

Latin America

News Summary

United States

eBay ditches PayPal for Adyen (Fintech Futures), Rated: AAA

What the good fintech can giveth, it can taketh away. eBay has given PayPal the boot and turned to Dutch firm Adyen as its primary processing partner.

Looking to sweeten this bitter pill, eBay says PayPal, a “long-time” partner, will be an option at the checkout for its buyers.

PayPal powers BofA Merrill digital payments (Fintech Futures), Rated: A

Bank of America Merrill Lynch’s (BofA Merrill) US-based commercial clients can now make payments in local currencies to payees who hold PayPal accounts.

Strong Job Gains, Marcus Acquihires, MLA Testimony (PeerIQ), Rated: AAA

Janet Yellen chaired her last Fed meeting as the committee kept interest rates on hold in January. Futures are pricing in a 93% probability of a rate hike in March and 3 rate hikes for 2018. The recent sell off on the long end of the curve has seen 10-year treasury yields edge past 2.85%, providing respite to banks who were seeing their loan margins compress as the curve flattened.

In securitization news, Marlette completed its largest securitization to date, with MFT 2018-1 coming in at $464 Mn. The deal was significantly over subscribed and eventually upsized continuing the trend of larger deal size that we pointed out in ourQ4 securitization trackerThe senior tranches were rated AA by Kroll. The collateral pool has 40,303 loans with an average loan balance of $12k, weighted average coupon of 14.3% and a FICO score of 703. All the loans were originated by Cross River Bank.

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

This month’s report features an exclusive interview with Levi King, Co-founder and CEO of Nav, which is a data aggregation platform and marketplace that bridges the gap between small businesses and financial institutions. In the interview, Levi discusses the motivation behind founding Nav and how the company solves the challenges small businesses face managing their credit and securing financing solutions, among other topics.

Source: FT Partners

Download and read the full report here.

Open banking’s early adopters bet on ‘tremendous gains in value’ (American Banker), Rated: AAA

Only a few banks have embraced open banking and offer APIs to almost anyone. But they are betting on having a head start on competitors, as trends in the industry, such as increased bank-fintech partnership and evolving regulation, will push the banking-as-a-platform movement toward reality.

Operating as BBVA Compass in the U.S. in Birmingham, Ala., in 2016 it named a head of open APIs, and has engaged in several data-sharing agreements with fintechs. It is one of a handful of U.S. banks engaged in open banking — Capital One, Silicon Valley Bank, Citi and CBW Bank in Weir, Kan., also have such programs.

Last May, BBVA opened up its API Marketplace and made commercially available eight APIs so companies, startups and developers would be able to build new products and services by accessing and integrating customer’s banking data — with their permission — into their applications.

Source: American Banker

Fiserv Has Largest U.S. Marketshare of Top Bank Core Processors (Bank Innovation), Rated: A

According to data gathered by FedFis.com, the top processor is Brookfield, Wis.-based Fiserv. With more than 37% of the market share, Fiserv is well ahead of its competitors. The second, Monett, Mo.-based Jack Henry & Associates, has just half Fiserv’s market share with 17.6%. Close behind JHA is Fidelity National Information Services Inc., better known as FIS.

Enova Reports Fourth Quarter and Full Year 2017 Results (PR Newswire), Rated: A

Enova International (NYSE: ENVA), a financial technology company offering consumer and small business loans and financing, today announced financial results for the quarter and year ended December 31, 2017.

Fourth Quarter 2017 Summary

  • Total revenue of $243.7 million in the fourth quarter of 2017 increased 20.4% from $202.4 million in the fourth quarter of 2016.
  • Gross profit margin was 47.7% in the fourth quarter of 2017 compared to 51.8% in the fourth quarter of 2016, driven by growth in the installment loan and receivables purchase agreement segment as well as a higher mix of new customers, which requires higher loan loss provisions.
  • Net income was $6.9 million, or $0.20 per diluted share, in the fourth quarter of 2017 compared to net income of $8.7 million, or $0.26 per diluted share, in the fourth quarter of 2016.
  • Fourth quarter 2017 adjusted EBITDA of $38.1 million, a non-GAAP measure, increased from $35.1 million in the fourth quarter of 2016.
  • Adjusted net income of $8.9 million, or $0.26 per diluted share, a non-GAAP measure, in the fourth quarter of 2017 increased from adjusted net income of $8.5 million, or $0.25 per diluted share, in the fourth quarter of 2016.

Full Year 2017 Summary

  • Total revenue of $843.7 million in 2017 increased 13.2% from $745.6 million in 2016.
  • Gross profit margin was 53.0% in 2017 compared to 56.0% in 2016.
  • Net income was $29.2 million, or $0.86 per diluted share, in 2017 compared to net income of $34.6 million, or $1.03per diluted share, in 2016.
  • Full year 2017 adjusted EBITDA of $157.8 million, a non-GAAP measure, increased from $142.3 million in 2016.
  • Adjusted net income of $46.9 million, or $1.37 per diluted share, a non-GAAP measure, in 2017 increased from adjusted net income of $37.5 million, or $1.12 per diluted share in 2016.

No Credit? No Problem! Microlender for Women Uses Novel Approach (WSJ), Rated: A

Daniela Morales’s lender is demanding. Every Friday morning, at 9:45 sharp, she has to visit a small apartment in Woodside, Queens, to make her weekly payment—currently $293 plus $17 interest on a $6,900 balance.

Ms. Morales’s lender is Grameen America, a nonprofit microlender for women entrepreneurs. To get a Grameen loan, you don’t need any collateral or credit history, just the support of a small group of Grameen loan recipients who can vouch for you. It is, essentially, a reputation-based loan.

There are other nonprofit microlenders operating in the city, including Accion and BOC Capital Corp. But Grameen America, modeled on a Bangladeshi microlender, is unique in its peer support and loan-approval model.

The loans, which start at $500 and command an interest rate of 18% on a declining balance, must be repaid in six months. The interest rate falls as the loan is repaid. Members who establish a good track record qualify for larger sums.

How This Founder Is Using Fintech To Give Women More Financial Control (Benzinga), Rated: A

Morty is an online mortgage broker. Our mission is to empower homebuyers to make smarter home financing decisions. With a modern tech stack and a marketplace of lenders, we offer customers the most options, great rates, and a transparent process.

What surprised you the most in the fintech industry in 2017?

That there wasn’t more innovation in the mortgage space. It’s the only lending vertical that hasn’t moved online- credit cards, student loans, small business loans, personal loans- all have a big online presence. There is still so much to be done in mortgage, it’s exciting.

Hackers Targeting Payroll Direct Deposit (PYMNTS), Rated: A

In an article penned for JD Supra by law firm Ogletree, Deakins, Nash, Smoak & Stewart, P.C., experts warned of a type of payroll scam that sees fraudsters diverting direct deposits from employee accounts to criminal accounts.

According to the firm, fraudsters use a phishing scam by sending an email from an address similar to a legitimate company account.

Ogletree Deakins warned that not only does this scam result in lost funds, but it is ultimately a data breach, with scammers gaining access to corporate systems and data. The report also noted that scammers are targeting all types of businesses using all types of payroll providers.

Will Markets Ever Live Up to Our Expectations (Guru Focus), Rated: A

The fintech industry is the powerhouse behind the meteoric rise of the peer-to-peer lending market. After several platforms launched online payments, it was only a matter of time before new ones emerged offering lending services that are offered by and to registered members.

LendingClub Corp (NYSE:LC) has been one of the most notable players in this space and its popularity pushed it public in 2014. However, since then, the company has struggled to live up to expectations, reflecting the actual picture of the status of the peer-to-peer lending.

According to critics, while peer-to-peer lending is an attractive option for borrowers looking for alternative financing solutions, it appears to have growth limitations due to lack of funding for new products. Peer-to-peer lending platforms do not take deposits and this is a limiting factor, but analysts suggest that if they are to grow to the point of rivaling the mainstream lending market, then they may have to start taking customer deposits.

How to Win Man vs. Machine Advice Game (ThinkAdvisor), Rated: A

TD Ameritrade put the competitive pressures tied to robo-advisors and other technology left, right and center at its LINC 2018 RIA conference this week in Orlando. Industry leaders highlighted the power and threat of technology and how to address these trends in the advice business.

The dealmakers financing top adviser technology (InvestmentNews), Rated: A

It’s impossible to look at the landscape of modern adviser technology without seeing Steve Lockshin’s footprints.

As an early investor in Betterment, Mr. Lockshin, 41, was instrumental in encouraging the robo-adviser to pivot from competing against advisers to partnering with them.

Brad Bernstein could see the role of advisers was changing.

What was once an industry of investment managers and salespeople was shifting to financial planning. Driving the change was technology — automating and commoditizing many of the ways advisers traditionally added value for clients. Mr. Bernstein, 51, managing partner at growth equity firm FTV Capital, believed there was a demand for products that helped advisers better articulate their value to clients.

That’s what attracted Brooks Gibbins, 45, to the industry when he founded FinTech Collective with his partner, Gareth Jones, in 2012. The venture capital firm has been one of the most active early-stage fintech investors over the past five years, seeding some of the biggest names on the adviser fintech scene.

Seeing the opportunity for adviser fintech startups to get acquired by, or partner with, financial institutions, Ian Sheridan decided to draw on his more than 25 years of experience in the financial services industry — working in wealth, retirement and investing in startups — to identify which technology would be part of the next wave of innovation.

Fidelity rocked the adviser fintech world in 2015 when it acquired eMoney, one of the most popular financial planning and client portal tools among independent advisers. The reported $250 million price tag proved there was money to be made in adviser fintech.

“Prior to that, there was good technology out there, but there wasn’t this stream of new business models, this new equity flowing in,” said Mike Durbin, 50, the president of Fidelity Institutional who spearheaded the deal. “The pace has clearly quickened.”

After a career that took him from E.F. Hutton to founding the Lockwood family of companies, Len Reinhart turned toward private investing in retirement.

American Association of Private Lenders Opposes Florida Mortgage Licensing Bills (PR Newswire), Rated: A

The Florida legislature kicked off its legislative session by introducing Florida Senate Bill 894 and House Bill 935, legislation that could cover private mortgage lenders. The bills, introduced by Sen. Rene Garcia (R-Miami) and Rep. Jeanette Nunes (R-Miami), would eliminate a longstanding business purpose exemption for loans secured by a Dwelling.

On January 18, the bill passed the House Insurance and Banking Subcommittee with a 13-1 vote. On January 24, the House Commerce Committee passed the bill on a unanimous vote. The Senate similarly passed the bill on a unanimous vote in the Senate Banking and Insurance committee on January 23.

American Association of Private Lenders’ (AAPL) position is that the proposed regulation would harm Florida residents, business and the state’s economic growth by consolidating power to a few licensed parties. Private lenders provide much needed capital to a marketplace which is underserved by large financial institutions. Professional business parties need to be able to work with each other without significant regulatory intervention. The proposed regulation would result in less market competition, translating to higher interest rates, a higher cost of credit and would force business out of Florida and into neighboring states including Alabama, Georgia, Tennessee, North and South Carolina, all of which exempt business purpose loans from licensing requirements.

Amy Johnson Named as Chief Operating Officer at dv01 (PR Newswire), Rated: B

dv01, the data management, reporting, and analytics platform that provides institutional investors insight into lending markets, today announced the appointment of Amy Johnson as Chief Operating Officer. Johnson will report to dv01 founder and CEO, Perry Rahbar.

As COO, Johnson will be responsible for dv01’s finance, legal, and sales efforts, including helping execute the company’s vision and scale its operations.

The 10 D.C. Area Startups That Raised Capital in January (DC Inno), Rated: B

Reston, Va.-based online lender StreetShares closed $23 million in equity funding on Jan. 24. The lender focuses on veteran-owned small businesses and relies on a peer-to-peer lending model. About $20 million of the new round is from Bethesda, Md.-based firm Rotunda Capital Partners. Previously, StreetShares had raised $8.3 million between three rounds.

United Kingdom

Aviva executive backs robo-advisers in call for financial advice shake-up (New World News), Rated: AAA

An Aviva executive has backed the rise of robo-advisers and called for a shake-up of financial advice to help open up the industry to the mass market.

Andy Briggs, chief executive of Aviva UK Insurance, said the current regime is freezing out large swathes of the population because only the upper echelons can afford the hefty fees.

Mr Briggs said robo-advisers could also be more powerful and beneficial to customers if the artificial intelligence did not have to carry out full financial assessments.

Treasury begins SME finance inquiry (Bridging&Commercial), Rated: A

The Treasury committee has launched an inquiry into SME finance to look at the state of the market and the lessons to be learned from RBS’s Global Restructuring Group (GRG).
The Treasury’s inquiry will look at the extent of competition in the market, the various sources of funding available to SMEs – including P2P lending and crowdfunding – and whether the current regulatory framework provides enough protection to SMEs when they borrow money.

The committee will also consider the regulation of SME lending and whether banks should be bound by a broader set of duties when dealing with SMEs.

The pros and cons of each of the six types of ISA on the market (Your Money), Rated: A

6) Innovative Finance ISA

An Innovative Finance ISA (IFISA) is a peer-to-peer lending or crowdfunding product. In some instances, you can generate returns of around 8 – 9% by lending to private borrowers or by taking stakes in ‘crowdfunded’ investments. The IFISA is also subject to the same £20,000 annual ISA allowance so you can split your money between this ISA, as well as cash and stocks and shares.

While this is regulated by the FCA, peer-to-peer lending is not covered by the FSCS meaning your capital is at risk.

Things can only get better, says Christie & Co (The Caterer), Rated: B

Easily available debt from banks, financial institutions, peer-to-peer lending and even crowdfunding, together with forecasts of revpar growth of 2.4% in London and 2.3% in the regions, will help drive investments. Strong leisure business enjoyed by hotels last year – up 20% – is expected to continue to grow, depending on a continued weak pound.

Sainsbury’s and British Land chairmen join late payments start-up (Financial Times), Rated: B

A UK start-up that is aiming to end the culture of late payment that plagues British business has recruited two FTSE 100 chairmen as investors and advisers.

David Tyler, chairman of supermarket chain J Sainsbury, and John Gildersleeve, chairman of property group British Land, have joined the advisory board of Previse.

The London-based business pays supplier invoices instantly and collects the money from customers later. By analysing years of payment data it uses artificial intelligence to calculate the likelihood it can collect from the big customer. It has pilots running with two large corporations and is in talks with dozens more, Mr Gildersleeve told the Financial Times.

China

Ping An OneConnect fintech subsidiary raises $ 650 million in financing (Finextra), Rated: A

OneConnect is the only one-stop FinTech-empowered solutions provider in China. Financing of the three subsidiaries received positive responses, particularly from international institutional investors, including the SoftBank Vision Fund (which invested in Ping An Good Doctor and Ping An Healthcare Technology), International Digital Group (IDG) and SBI Group etc., proving that the capital market fully recognizes Ping An’s technological innovation, the business model for its technology as well as the growth potential and business value of the Group.

European Union

Banco BNI Europe Starts to Lend on Multiple P2P Lending Platforms (P2P-Banking), Rated: AAA

Today Banco BNI Europe announced it will start lending on Fellow Finance.

‘Investing via Fellow Finance in consumer and SME loans offers us a great opportunity to easily expand our operations and we are very satisfied with the analytical and professional approach of Fellow Finance in credit intermediation’ echoes Pedro Pinto Coelho, Executive Chairman of Banco BNI Europa.

U.S. Fintech Stripe Picks Dublin for New Engineering Hub (U.S. News), Rated: AAA

U.S. payments firm Stripe said on Monday it would place its first engineering center outside its home market in the Irish capital Dublin, attracted by the city’s growing technology workforce and global outlook.

Robo Advisers Start to Take Hold in Europe (WSJ), Rated: AAA

Estimates differ, but according to TechFluence, a technology research firm with offices in Frankfurt and London, the European market had assets under management of about $3.5 billion at the end of 2017. That compares with an estimated $200 billion to $250 billion in the U.S., according to Burnmark, a fintech research firm. Estimates of the number of services range from 98 to 126 in Europe, compared with about 200 in the U.S.

The cost of entry is also much lower: generally €5,000 to €10,000 (about $6,200 to $12,400), versus hundreds of thousands at least for a discretionary service through a bank, says Timo Pfeiffer, head of research and business development at Solactive AG, an index provider that has researched the growth of robo advisers in Europe.

Popular with banks

This has led to a number of banking groups preparing robo-adviser offerings, Mr. Mellinghoff says. One example is Comdirect, a subsidiary of Commerzbank , CRZBY -3.17% which launched a robo-advisory platform in May. This service, called Cominvest, had gained assets of more than €200 million as of end of December and is expected to grow rapidly in the coming years, says Sabine Schoon, head of corporate strategy and consulting at Comdirect.

The European market has also attracted interest from major U.S. providers; BlackRock Inc. BLK -2.98% announced in June 2017 that it was taking a minority stake in Scalable Capital, a robo-adviser specialist that operates mainly in the German and British markets.

BBVA’s digital push helps drive 20% profit rise (Financial Times), Rated: A

Spanish bank BBVA’s dash to get customers to buy products digitally rather than in branches helped it report a 20 per cent rise in underlying full-year profits, with results boosted by lower costs as well as higher revenues.

Top P2P Cryptocurrency Token Etherecash Gets Listed on QRYPTOS, Following Successful Crowdsale (The Daily Telescope), Rated: A

Top P2P cryptocurrency startup Etherecash has announced that its ECH token will be listed on popular cryptocurrency exchange QRYPTOS on 6th of February 2018, following a successful crowdsale in which the company raised over 40 million USD. This news comes as The Estonian-based lending startup saw a very successful Q4 to 2017 as it gears up for its token distribution in early 2018.

Crypto-lending ICO Etherecash recorded contributions of over 40 million USD and over 46000 new registrations.

GN Compass Creating More Liquidity for its Token, GNCT (PR Web), Rated: B

GN Compass is the first peer-to- peer lending platform for Cryptocurrency-Backed Loans.

All transactions are verified and distributed on the Ethereum Blockchain. GN Compass is joining an expanding group of pioneering projects integrating the Bancor Protocol to maximize the trading liquidity of GN Compass tokens.

Mifid tips balance against active funds in favour of ETFs (Financial Times), Rated: B

New business inflows almost doubled for Europe’s exchange traded fund industry in 2017, in the run-up to the EU’s introduction of rules designed to improve market transparency and strengthen investor protection.

Net inflows into European-listed ETFs reached a record $108bn last year, up from $55.7bn in 2016, according to ETFGI, a London-based consultancy.

International

Disruptive innovation in equity crowdfunding (Deloitte), Rated: AAA

A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” studies the disruptive forces shaping the future of equity crowdfunding.

View the infographic here.

Disruptive innovation in digital banking (Deloitte), Rated: AAA

A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” examines disruptive innovation in digital banking.

View the infographic here.

IdentityMind Global Introduces KYC and Anti-Money Laundering Plug-in for ICOs (Crowdfund Insider), Rated: A

IdentityMind Global, Digital Identities You Can Trust, an SaaS platform that builds, maintains and analyzes digital identities worldwide, allowing companies to perform identity proofing, risk-based authentication, regulatory identification, and to detect and prevent identity fraud, announced the immediate availability of its KYC Plug-in for ICOs which provides a turnkey solution for customer onboarding functionality and user experience to walk ICO participants through the know your customer (KYC) process to meet regulations worldwide.

BFB partners with US real estate fintech start-up (Trade Arabia), Rate: A

Bahrain FinTech Bay (BFB) and the Fintech Consortium (FTC) have announced a strategic partnership with OffrBox, a New York City-based Fintech start-up that has developed an end-to-end real estate transaction platform on which one can buy and sell residential properties online.

India

How early-stage startups raise money (Times of India), Rated: A

The first ’round of funding’ Abhishek Latthe got when he was setting up his wearable device startup SenseGiz in 2013 was from his family and friends. The next year, he set up a crowdfunding page on Kickstarter and raised $47,000. Late in 2014, he took out a bank loan. It was only two years later in 2015, that he could convince Karnataka Semiconductor Venture Capital Fund to back him with Rs 3 crore.

Banks do not back companies without collateral and since the business model is unproven, other investors too hesitate. So, funding options include getting help from friends and family, crowdfunding, or dipping into one’s savings, but how do founders decide on the path to take?

Gadkari says peer-to-peer lending and bridge funding, which fulfil a company’s short-term working capital needs, have also become popular. Choosing the best funding option depends on the company’s need. The next step for an entrepreneur is to negotiate the company’s valuation.

FinTech will revolutionise lending in India, says Faircent CEO (money control), Rated: A

Lending is one of the oldest professions in the world and is one of the pivotal reasons for the banking system to take shape.

There is evidence of lending activities dating back to 2,000 BC between merchants, farmers and traders.

However, up till now, lending as an activity has been largely limited to financial institutes such as banks and Non-banking Financial Companies (NBFCs).

For instance, lenders on Faircent.com usually avail average gross returns of 18% to 26% per annum. This makes online P2P loans a lucrative alternative investment avenue for them.

What makes online P2P lending even more lucrative as an asset class for potential investors is the fact that it offers lenders the opportunity to diversify their investments across multiple risk buckets and loan requirements.

Source: money control

Everything you need to know as pressure mounts on cryptocurrencies (GK Men), Rated: B

Sapan Gupta a Practice-Head at Shardul Amarchand Mangaldas said, “capitalising on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors”.

APAC

After a Successful Crowdsale Campaign, Karma (KRM) Begins Trading With Blockchain (Coin Idol), Rated: AAA

Decentralized p2p lending platform Karma has just announced trading as well as access to its platform and blockchain solutions. The project has now been backed by Danish fintech startup OpenLedger. Karma’s p2p lending platform can be used on the OpenLedger DEX platform and the Korean exchange CoinLink.

Why Blockchain’s Growing Pains Could Benefit Underbanked SMBs (PYMNTS), Rated: AAA

According to a report released earlier this month by EY, 21 percent of people in the world — about 1.6 billion people — are underbanked. More than 200 million micro and SMBs fall into the underbanked category, too, with access to finance the largest hurdle for many of these firms.

EY pinpointed the APAC region as a particularly wide opportunity for financial services players to address this gap: Bank revenue in this market, researchers said, could reach $88 billion by 2020. If traditional banks don’t step in, alternative financial services firms will.

“A lot of smaller, private small businesses are under-funded,” Tran noted. “It’s not like here [in the U.S.], where we have an established financial and banking system. If you implement something like a decentralized blockchain, a P2P lending system, that would enable [SMBs] to get funded a lot easier than going through the normal banking system. With blockchain technology, you can put a platform together that is smart contract-based, allowing individual investors to participate in a growing economy. On the other hand, you allow [SMBs] to get funded very quickly.”

MENA

Top 20 Fintech Startups In The Middle East (Forbes), Rated: AAA

1 PayTabs
Online payment processing solutions

2 Souqalmal.com
Financial products comparison site

4 Beehive
SME focused peer2peer lending platform

5 Yallacompare
Financial products comparison site

8 liwwa
Peer-to-peer lending platform

StartAD launches on February 18 for fintech startups (Arabian Business), Rated: A

Innovation platform startAD will host a ten-day entrepreneurship programme, Venture Launchpad, at New York University Abu Dhabi (NYUAD), from February 18-27.

It will see ten fintech startups pitch their business ideas to investors. UAE-based early-stage startups are encouraged to apply by February 12, 2018, the application deadline.

The programme will equip them with the tools and knowledge to develop a scalable and capital efficient scheme. These include insights into crowdfunding, peer-to-peer lending, blockchain, algorithmic trading, credit scoring, cryptocurrency, payments, insurance tech and money transferrals.

Latin America

Brazilian Fintech EBANX Secures $ 30 Million Investment From FTV Capital (Crowdfund Insider), Rated: AAA

Brazilian fintech EBANX announced on Wednesday it has secured a $30 million investment from FTV Capital.

EBANX also processes payments for major merchants from 50 different countries, including the U.S. and China. The company reported that just last year it processed $1.2 billion in cross-border transactions and achieved the milestone of helping more than 30 million users from the region gain full access to major international e-commerce merchants.

Authors:

George Popescu
Allen Taylor

Wednesday December 13 2017, Daily News Digest

Wednesday December 13 2017, Daily News Digest

News Comments Today’s main news: Court dismisses case against OCC Fintech Charter. Affirm’s valuation confirmed at $1.75B. RateSetter Australia reaches $200M milestone. SoftBank invests $450M into Compass. Starling Bank expected to profit in 2019. Linked Finance launches P2P lending pension accounts. ID Finance raises $85M through ETF bonds. Today’s main analysis: TransUnion reports on consumer credit markets. Today’s thought-provoking articles: What […]

Wednesday December 13 2017, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

MENA

Israel

South America

News Summary

United States

Court throws out New York regulator’s suit against OCC fintech charter (American Banker), Rated: AAA

A New York District Court judge threw out a lawsuit by the New York Department of Financial Services that sought to block the Office of the Comptroller of the Currency’s attempted fintech charter, saying the charter doesn’t exist yet so the suit is premature.

Lending startup Affirm valued at $ 1.8 bln in latest financing round (Business Insider), Rated: AAA

Silicon Valley lending startup Affirm said on Monday it has raised $200 million in a fresh round of funding, boosting prospects as the firm aims to go after the market for millennial shoppers needing loans.

The new financing put Affirm’s total fundraising to date at about $450 million, and increases its valuation to $1.75 billion, according to a source with knowledge of the matter.

Max Levchin On What Comes After $ 200M Worth Of Capital Affirmation (PYMNTS), Rated: AAA

The CEO with the measured response is PayPal co-founder Max Levchin, who told Karen Webster that with any capital raise of size, the temptation is to believe that “it is a big victory and it is validation … but all it really is, is a temporary tally of how far you have gone.”

He noted that with big investments come big responsibility (and Affirm has raised roughly $450 million to date), as he remarked that there is the implicit end goal of taking the money and parlaying vision and strategy into strong returns on that cash.

Affirm says that its retailers report that consumers who use Affirm leave with a basket size 75 percent greater than those who don’t use Affirm to pay for their purchases, and enjoy site-wide conversion rates as much as 20 percent higher, with revenue per visitor lifts of more than 10 percent.

Doing customers wrong allows your competitor to make things right (American Banker), Rated: A

Consider Affirm, a startup that offers consumers installment loans for individual purchases and markets the loans as a simpler and more honest financing alternative — a message that is clearly targeted at consumers who are frustrated by a perceived lack of transparency in the costs associated with using credit cards. This message appears to be resonating in the market; Affirm is processing relationships with more than 1,000 internet retailers and is reportedly working with Walmart on a pilot project.

In an interview with American Banker, Douugh founder and CEO Andy Taylor said: “When we dug deeper, we realized the consumer debt levels are out of control. Big banks are running off legacy business models that are driven to keep customers within these debt cycles. They’re not properly incentivized to foster financial wellness.”

Affirm, Marcus and Douugh are all basing their strategic direction on a simple but powerful insight: There is a difference between the way many consumers use credit cards and the way that those consumers should use their credit cards in order to maximize their financial wellness.

Retailers now offers Instaloans to pay for purchases (ABC30.com), Rated: A

A growing number of major retailers offer shoppers instant loans to pay for your purchases.

But how do they work? And are they better than credit cards?

Each lender may be slightly different, but typically: you give basic information, decide the length of the loan -usually anywhere from three to twenty-four months and in less than a minute you’ll know if you’re approved.

Prosper Appoints Former J.P. Morgan Chase CMO Claire Huang to Board of Directors (Crowfund Insider), Rated: AAA

Peer-to-peer lending platform Prosper announced on Tuesday it has appointed former Chief Marketing Officer of J.P. Morgan, Claire Huang to its board of directors. According to Prosper, Huang has held senior leadership positions at various well-known financial services companies, which includes Bank of America, Fidelity Investments, and American Express.

OnDeck Adds Former GE Capital and SunTrust Executives to Finance Team (PR Newswire), Rated: AAA

OnDeck (NYSE: ONDK), the leading online lender to small business, today announced the hiring of two senior financial services executives to join its management team. Kelly Merrill and Erich Wust will assume new leadership roles that directly support OnDeck’s mission of empowering small business owners with the fastest and most flexible credit solutions.

Kelly Merrill joins OnDeck as the Senior Vice President for Finance, where she will help lead the company’s short-term and long-term financial planning initiatives. Merrill brings over a decade of finance experience to OnDeck from GE Capital, where she played a leading role in developing and executing the disposition strategy for GE Capitals’s $200 billion balance sheet.  Previously, Merrill was the Chief Financial Officer (CFO) of GE Capital Real Estate, where she led a team of more than 50 employees.

Erich Wust has been appointed as the Senior Vice President for Portfolio Management at OnDeck. He will be responsible for managing portfolio credit strategies, balance sheet optimization and other components of the company’s loan portfolio. Wust joins OnDeck after more than a decade in credit and risk leadership roles at SunTrust Bank.

Compass gets $ 450M from SoftBank; real estate portal now valued at .2B (TechCrunch), Rated: AAA

Less than a month after raising $100 million led by Fidelity, real-estate startup Compass is striking while the iron is hot. The company has now picked up an even bigger investment of $450 million, this time from the SoftBank Vision Fund, plus another $50M in secondary deals, to fill out a vision of its own: taking its real estate rental and sales platform global.

New York-based Compass is now valued at $2.2 billion post-money, up from $1.8 billion just four weeks ago, with $775 million raised to date.

Consumer Credit Market Expected to Remain Strong in 2018 Even in a Rising Rate Environment (NASDAQ), Rated: AAA

In spite of rising interest rates, the U.S. consumer credit market is poised to perform well in 2018, with well-managed delinquencies and continued wide access to credit across all products. TransUnion’s (NYSE:TRU2018 consumer credit forecast found that expected increases to GDP, personal income, total employment and the Housing Price Index, among other factors, will outweigh potential negatives such as increasing interest rates and slowing vehicle sales.

5-Year Trends: Serious Borrower-Level Delinquency Rates for Key Credit Products**
Credit Product Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018* PCT Change in Last 5 Years (2013-2018)
Auto Loans  

1.23

%  

1.19

%  

1.27

%  

1.44

%  

1.43

%  

1.46

%  

+18.7 %

Credit Cards 1.60 % 1.48 % 1.59 % 1.79 % 1.86 % 1.96 % +22.50 %
Mortgage Loans 4.31 % 3.40 % 2.46 % 2.28 % 1.83 % 1.65 % (-61.7%)
Unsecured Personal Loans 4.01 % 3.73 % 3.62 % 3.83 % 3.37 % 3.36 % (-16.21%)
*Projections; **Serious mortgage, auto loan and personal loan delinquencies are defined here as those with payments 60 or more days past due. Serious credit card delinquencies are defined as those with payments 90 or more days past due. 

Inside the Mortgage Forecast

60-Day+ Mortgage Delinquency Rate and Average Mortgage Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
7.16% 6.65% 6.15% 5.38% 4.31% 3.40% 2.46% 2.28% 1.83% 1.65%
$190,324 $186,488 $185,594 $184,753 $187,228 $187,311 $189,914 $194,415 $200,935 $205,534
*Q4 2017 and Q4 2018 include projections

Inside the Credit Card Forecast

90-Day+ Credit Card Loan Delinquency Rate and Average Credit Card Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
2.97% 2.17% 1.90% 1.75% 1.60% 1.48% 1.59% 1.79% 1.86% 1.96%
$6,043 $5,609 $5,485 $5,371 $5,324 $5,329 $5,337 $5,486 $5,626 $5,675
*Q4 2017 and Q4 2018 include projections

Inside the Auto Finance Forecast

60-Day+ Auto Loan Delinquency Rate and Average Auto Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
1.59% 1.27% 1.11% 1.15% 1.23% 1.19% 1.27% 1.44% 1.43% 1.46%
$14,922 $15,031 $15,377 $16,061 $16,781 $17,456 $18,004 $18,391 $18,588 $18,694
*Q4 2017 and Q4 2018 include projections

Inside the Personal Loan Forecast

60-Day+ Personal Loan Delinquency Rate and Average Personal Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
4.98% 4.78% 4.20% 3.93% 4.01% 3.73% 3.62% 3.83% 3.37% 3.36%
$6,650 $6,138 $5,895 $5,904 $6,247 $6,741 $7,360 $7,640 $8,066 $8,461
*Q4 2017 and Q4 2018 include projections

Why JPMorgan, Amex, HSBC are backing ‘isolation’ web browsing (American Banker), Rated: AAA

Often users are tricked by phishing emails that mimic a legitimate note from the boss or a senior corporate leader. And the links and sites can look secure. According to PhishLabs, nearly 25% of all phishing sites in the third quarter were hosted on HTTPS domains — almost double the rate of the previous quarter.

As part of their effort to deflect these attacks, some banks are turning to isolated browsing, or remote browsing, technology. Such systems force all internet activity to happen in a protected space on the cloud, preventing malicious code from reaching a company’s network. The technology is not brand new, but it is starting to gain traction as some large banks have finished their testing of it and are going public with their use of it.

JPMorgan Chase, American Express and HSBC announced Monday that they are leading a $40 million round of funding in the isolation-tech provider Menlo Security, bringing its total funding to $85 million.

Source: American Banker

 

Niche lending and fintech cross paths in Silicon Slopes (Utah Business), Rated: A

There are, however, entire demographics not serviced by tried-and-true lending institutions. Often, these folks’ credit score fails to meet a bank’s minimum standards. Or they need unconventional terms on an equipment or business loan. Whatever the reason, these transactionally marginalized sectors find themselves at the mercy of high-interest lenders. Or with no access to capital at all.

“There is a significant population of U.S. consumers who can’t get a loan,” notes Nate Heward, CFO at Acima Credit, a company that provides a point-of-sale credit platform.

Capitalism abhors a void

From the ubiquitous strip mall payday lender to the world of microfinance, a plethora of entrepreneurial solutions has emerged to get cash in the hands of would-be borrowers cut off from other avenues. These alternative lending practices have various degrees of reputability; a wide spectrum exists between the purely predatory lending shop, on the one hand, and the creative value-adding venture, on the other.

Scratching the consumer itch

In practical terms, Acima asks four simple questions of the would-be borrower:

  1. Do you have a three-month history with your current employer or source of income?
  2. Do you deposit $1,000 or more into your checking account each month?
  3. Have you had a checking account for at least 90 days?
  4. Is your checking account free from NSFs, excessive overdrafts and negative balances?

It’s all fintech

The companies profiled in this article may not be considered fintech firms per se; they’re not using technology to create a new financial paradigm a la Paypal, Indiegogo or Coinbase. They’re merely offering tried-and-true solutions to untapped consumer markets. Viewed from another angle, however, they’re fintech companies through and through. Acima, Progressive, et al are racing to deliver the most convenient financial solutions to the most people in their target customer base. And to do so, they’re relying on technology all the way.

Finance teams are ‘bottlenecking’ banks’ digital transformations (Tearsheet), Rated: A

Banks are working hard to beef up their technology and innovation teamsembrace agile developmentand move to acting like digital companies, but bank finance departments still do a lot of manual work and will start to hold their companies back from becoming digital entities. Finance teams are the control functions and scorekeepers of an organization, but if they can’t process data at the same speed as the rest of the organization they could slow down the speed of company mergers or product rollouts when competing transactions are already taking place.

Royal Business Bank Invests $ 500K in Lendistry Loan Fund, Providing Opportunity for Small Businesses in Underserved Communities (Digital Journal), Rated: A

Royal Business Bank, a wholly-owned subsidiary of RBB Bancorp, has made a $500K commitment to the Lendistry CRA Loan Fund I. Launched at a time when most banks were struggling, Royal Business Bank has been successfully serving the Asian-American community since 2008. While specializing in businesses engaging in trade with Pacific Rim countries, the bank also offers small business loans and residential mortgages.

First financial industry brief filed in CFPB English v. Trump case (Ballard Spahr Email), Rated: A

This afternoon (LT Editor: December 12,2017) the Credit Union National Association (CUNA), represented by Ballard Spahr’s Alan Kaplinsky, filed the first amicus brief from the financial industry in the English v. Trump litigation over who will succeed Richard Cordray as the head of the Consumer Financial Protection Bureau. CUNA supports the President’s authority to appoint an acting director.

Lawsuit: Trump appointee Mick Mulvaney has ‘no more right’ to lead CFPB ‘than Santa’ (Washington Examiner), Rated: A

A new federal lawsuit says President Trump’s “plainly illegal” appointment of Mick Mulvaney to be acting director of the Consumer Financial Protection Bureau must be reversed in favor of Leandra English, who also claims the title.

Ilann Maazel, an attorney for the Lower East Side People’s Federal Credit Union, told the Washington Examiner that the credit union is suing because of the feared effect of Mulvaney policies.

The legal dispute centers on whether the 2010 Dodd-Frank financial reform, which set up the CFPB, makes the deputy director the acting director if there’s a vacancy, or whether the older Federal Vacancies Reform Act gives the president that power.

US Bank sees success with Zelle (Business Insider), Rated: A

US Bank integrated Zelle — which has over 30 other banking partners like Bank of America (BofA), JPMorgan Chase, and Citi — last year. The bank saw a 104% increase in Zelle transactions in the past four months, and a 50% increase in customer enrollment in the P2P offering during that time.

Source: Business Insider

To compete with big tech firms, banks need big-tech talent (American Banker), Rated: A

Nine years ago, D.J. Patil and Jeff Hammerbacher coined the term “data scientist.” Four years later, Patil and Thomas Davenport deemed the profession “the sexiest job of the 21st century” in the pages of Harvard Business Review.

For banks, this imbalance is particularly challenging at a time when the industry is increasingly vying for the same talent the tech giants are aggressively courting. To stay competitive, the financial services industry must defend against a new cast of competitors by changing how it attracts, hires and develops data science talent.

 

BitGo Raises $ 42.5M in Series B Funding (Finsmes), Rated: A

BitGo, a Palo Alto, CA-based company which makes digital currencies usable for businesses in a regulated economy, raised $42.5m in Series B financing.

The company intends to use the funds to accelerate enabling businesses to integrate digital currencies into their existing financial systems.

AI 100: The Artificial Intelligence Startups Redefining Industries (CB Insights), Rated: A

Source: CB Insights

5 Promising Early-Stage Startups to Watch (Tech Startups), Rated: B

Throtle is a 2nd generation data onboarding company focused on deterministic matching, identity resolution and closed loop enablement, powering brands and companies with their omnichannel marketing efforts.

Affirm is a San Francisco-based financial service startup that offers installment loans to consumers at the point of sale. Its aim is to improve the banking industry to be more accountable and accessible to consumers.

Homebuying With Alternative Credit (Microbilt), Rated: B

Source: Microbilt
United Kingdom

Digital challenger Starling to hit profit in 2019 says founder Anne Boden as European expansion takes crucial step (City A.M.), Rated: AAA

Digital-only challenger bank Starling will “definitely” be in profit by the end of 2019, its chief executive told City A.M., as it announced a major step in its plans for European expansion.

The bank will today announce it has become a direct member of the single euro payments area (Sepa), which allows credit transfers, direct debit and card payments in euros across the whole of the EU.

Crowdfunding a mission to save capitalism from itself (Financial Times), Rated: AAA

Jeff Lynn is on a mission to save capitalism from itself at a time when millions feel locked out, and unable to foresee themselves better off than their parents. His answer: to democratise capital.

That is one reason he founded Seedrs, an online platform through which individual investors can buy shares in high-growth companies at an early stage — a privilege once reserved for institutions and private equity funds. The other reason was to make money.

Seedrs, which along with Crowdcube dominates the UK market, has funded more than 540 deals, representing £280m of investment. Some were follow-on rounds, and in total about 400 companies have been funded. About 20-30 companies are live on the site at any time.

Crowdfunding by numbers

Critics say a big difference between crowdfunding and the stock market is liquidity — you cannot just sell your stake. But Seedrs has begun a secondary market and says it has had several exits already.

Free Agent, a Scottish maker of accounting software, floated in November 2016 at 87p. Its shares remain below the 100p Seedrs investors paid, though some sold when it hit 140p this year. Chapel Down, a vineyard, was already quoted on the Nex exchange (formerly ISDX) when it raised money at 28p a share in October 2014. It has been trading around three times that level.

China

SenseTime Raises US$ 410M Series B Financing (Finsmes), Rated: A

SenseTime, a Chinese artificial intelligence company focused on computer vision and deep learning technologies, raised US$410m series B1 B round of financing.

SenseTime has powered many industries such as finance, security, smart phone, mobile Internet, robotics, and automobile with core computer vision technologies including face recognition, video analysis, character recognition, and autonomous driving.

European Union

Linked Finance Launches New P2P Lending Pension Accounts (Better Business), Rated: AAA

Irish peer-to-peer lending company Linked Finance has launched a new type of account that allows holders of self-administered pensions to make P2P lending to Irish SMEs part of their pension investment portfolio.

With net returns of between 7 and 8.5 per cent, 24/7 online account access, complete control of lending activity, and monthly repayments of principal & interest, P2P lending is becoming an attractive asset class for a growing number of investors.

Mobile bank N26 partners with crowd-lending platform Younited Credit in France (Telecompaper), Rated: A

European start-up N26 has expanded the range of its banking services on offer in the French market via a partnership with Younited Credit, a fintech start-up specialising in short-term loans and crowd-lending.

The Advantages of #Peer-to-Peer Lending (EU Reporter), Rated: A

For many years, if someone wanted a loan, they would have to apply for one through a bank. Before they received that loan, the bank investigated their credit and decided what the rate of interest would be applicable.

However, there is another way to get a loan without worrying about a low credit score or high interest rates. This is peer-to-peer lending or P2P. Through peer-to-peer lending platforms, individuals can invest their money in other individuals, with an interest rate that the two groups have agreed is fair.

Hungarian fintech secures EUR 6 mln in Czech funding (Portfolio.hu), Rated: A

The investor will first acquire a 20% stake in Barion, which is active in online and mobile payments, for EUR 2 mln.

Finnish Crowdfunding & P2P Lending Platform Fellow Finance Receives Payment Institution Authorization (Crowdfund Insider), Rated: B

Finnish crowdfunding and peer-to-peer lending platform Fellow Finance announced on Tuesday it received payment institution authorization from the Financial Supervisory Authority of Finland. The online lender claims it is the first funding platform to receive this type of authorization, which will notably enable Fellow Finance to provide new services to its consumer and corporate customers, to expand its services further in Europe and to utilize the new payment service directive (PSD2) in the development of Fellow Finance service.

With Norrsken House, ex-Klarna executive envisions a global network of co-working spaces focused on impact (TechCrunch), Rated: A

He launched the Norrsken Foundation later that year with about $20 million of his own money. By early 2017, the first fruits of that funding took shape with the opening of Norrsken House, a co-working space in Adalberth’s hometown of Stockholm dedicated to companies that are developing technologies that have a social impact.

Now, Adalberth has committed an additional $62 million of his own money to expand that vision. The goal, he said, is to eventually create a network of 25 impact-focused co-working spaces and foundation hubs around the globe in the next 10 years. The first Norrsken House has 112 companies in it and seven have received direct investment from the Norrsken Foundation’s fund (more on that in a bit).

International

ID Finance raises $ 8.5m via exchange-traded bonds to support growth (Finextra), Rated: AAA

ID Finance, the emerging markets fintech company, today announced successful completion of its first issuance of exchange-traded bonds.

The company raised $8.5m from the bond registered in Russia and listed on the Moscow Exchange. It was the first tranche of a $170m bond issuance programme that the company plans to support global expansion.
The bond, which was oversubscribed, has a maturity period of three years and a quarterly coupon payment frequency.

Banks, fintechs and a Brit royal to build green-lending blockchain (American Banker), Rated: A

Could fintech help the planet cope with climate change?

Some major players — Prince Charles; bankers from Barclays, Standard Chartered, and BNP Paribas; three fintechs; and professors from the University of Cambridge — all hope the answer is yes.

On Tuesday at the One Planet Summit in Paris, they are expected to announce they are developing blockchain technology that lets banks see which potential borrowers use environmentally sustainable practices and therefore are worthy of preferential lending terms. Such disclosures presumably would put pressure on companies to pollute less.

Australia

RateSetter’s Australian business hits $ 200m milestone (AltFi), Rated: AAA

RateSetter Australia has hit the AUD$200m mark in lending a little over three years removed from launching down under. The platform, which lends to both businesses and individuals, has doubled its lending volumes over the past six months.

Interestingly, 56 per cent of its investors withdrew money from bank savings accounts in order to divert them into the platform, while a further 17 per cent reallocated money from bank term deposits. The greatest proportion of the platform’s investors are millennials, at 58 per cent, although they invest the least amount of money on average of any age group at $9,454. Retirees (aged 65 and over) by contrast invest an average of $66,118.

India

Understanding the Data Protection White Paper Part XI: Establishing proper deterrent consequences for privacy violations (Tech 2), Rated: AAA

This article is Part 11 of a multi-part series explaining the recently issued white paper on data protection in India. You can read Part 1Part 2, Part 3Part 4Part 5Part 6Part 7Part 8Part 9 and Part 10.

Consider also the case of Sitesearch in the US, where the company bought payday loan applications and sold them to third parties, which included fraudsters, who used the data to steal more than $25 million from user accounts. Such careless buying and selling off of data should not be justifiable in the name of consent. While safeguards such as requiring that companies transfer data to only to companies with a comparable level of privacy provisions help, these must be backed up by huge penalties for violations.

For example, consider the Equifax data breach, the breach of a credit information company, leading to the loss of crucial data of over 143 million Americans. This breach was the result of a vulnerability in their web application software, a vulnerability that was discovered and for which a patch had been issued at least 2 months before the actual hack. The breach of this crucial data was thus the result of negligent, or non-implementation of the patch.

A landmark privacy judgment in India is the Canara Bank case, which struck down a provision in a law, which allowed the authorisation of ‘anyone’ to conduct investigations and demand the production and seizure of documents, including bank documents. Such a wide delegation of powers can allow any and everyone, even unscrupulous actors, permission to gain access to confidential data, which should not be allowed.

This case draws attention to an important aspect of data protection — it must be ensured that investigations, at all times, must be authorised, and by authorised personnel only. Any violations, or even exceeding of powers must be punishable.

Asia

8Percent leverages power of platform (Korea Herald), Rated: A

Companies that have used the 8Percent platform include Korea’s leading vehicle-sharing app operator Socar, solar energy firm S-Power and restaurant chains Power Plant and The Booth.

For example, a P2P investor into Socar was given a 1-hour free-driving offer each month for a year, until the loan matured. The offer was part of a return to about 600 retail investors, who lent a combined 1.3 billion won ($1.19 million) to the car-sharing firm in July 2015.

Vouchers for restaurants, such as Power Plant and The Booth, were given as rewards to investors.

According to a December estimate by 8Percent, three-fourths of investors, who offered an accumulated 97.7 billion won in loans, were from metropolitan areas — either Seoul or Gyeonggi Province — while those in their 20s or 30s accounted for over three-fourths of investors. The investors, without tax being deducted, are offered on average 9.78 percent interest for investments.

Some 65 percent of its borrowers — about 5,000 – had a credit rating between 4 and 6 on the scale of 1 to 10.

MENA

Crowdfunding real estate: a new reality booming? (Gulf News), Rated: AAA

Similarly, online REITs use online platforms and digital technology to enable wider access to REITs and quicker dissemination of REIT information. This allows mass participation and broader wealth distribution.

The ticket size to crowdfund a $1-billion airport is not exactly for everyone. However, a three-bedroom apartment in Mumbai, Manchester or Dubai Marina jointly owned by a hundred individuals sounds realistic. It also helps diversify risks for investors.

Smart Crowd is a crowdfunding platform, very different from an online REIT. The company believes it can enable anyone with Dh5,000 in savings to enter the Dubai property ladder. Its platform is awaiting final regulatory approval from the Dubai Financial Services.

Israel

MK Rachel Azaria threatens banks with P2P legislation (Globes.co.il), Rated: AAA

MK Rachel Azaria, chair of the Knesset Reforms Committee (officially known as the Special Committee on the Planning and Building Bill and the Maternity Leave and Parenting Bill) did not like the draft circular released by the Bank of Israel on regulating the relationship between the banks and the digital peer-to-peer (P2P) lending platforms on Sunday.

Azaria is now threatening to promote legislation that will regulate relations between the banks and the platforms, but this appears to be designed to pressure the Bank of Israel to publish new, more focused guidelines .

South America

Creditas Raises $ 50M in Series C Funding (Finsmes), Rated: A

Creditas, a Sao Paulo, Brazil-based digital secured loan platform provider, raised $50m in Series C funding.

Authors:

George Popescu
Allen Taylor

German Alternative Lending Market: An Overview

alternative finance

Post 2008, Peer-2-Peer lending has enjoyed a rapid rise all across the world. Quick accessibility to funds, easy processing and less paperwork means it has became the preferred choice for individuals and SMEs. The global P2P lending market was valued at US$26 billion in 2015 and is projected to reach US$460 billion by 2022; it […]

alternative finance

Post 2008, Peer-2-Peer lending has enjoyed a rapid rise all across the world. Quick accessibility to funds, easy processing and less paperwork means it has became the preferred choice for individuals and SMEs. The global P2P lending market was valued at US$26 billion in 2015 and is projected to reach US$460 billion by 2022; it is growing at a compound annual growth rate of 51.5% from 2016 to 2022, according to Research and Markets. North America is the largest P2P market in the world followed by Europe.

In 2015, the European alternative finance market grew by 92% to €5.4 billion.Though the UK is head and shoulders above the rest of Europe (representing 81% of the overall market in 2015 with a volume of €4.4 billion), continental Europe is rapidly catching up. Leading the charge for the rest of Europe are France, Germany, and Sweden.The combined market volume of the 3 countries was estimated close to 461.5 million Euros, representing roughly 74% of continental Europe’s P2P market.

Germany’s Alternative Lending Market

Post-Brexit, continental Europe has been in a frenzy as they try to attract beleaguered London-based fintech companies to establish a presence in their respective countries. Germany is trying to dethrone France from the top spot as the biggest alternative lending market in continental Europe. From 2013 to 2015, Germany’s alternative finance market volume increased from a meager €65 million to a healthy €249 million.

Source:

Most popular P2P Models

  • Peer 2 Peer consumer-lending – The most promising and fast growing model has been the consumer-lending model. From 2013-2015, this model has witnessed an average annual growth of 95%.
  • Peer 2 Peer business lending – Booming export-oriented economy and growing number of SMEs has allowed this model to witness significant growth in recent years.It grew by almost seven times in a span of one year, from a paltry €6.1 million in 2014 the transaction volume increased to € 48.2 million in 2015.
  • Equity-based crowdfunding – This is one P2P model that has endured quite a rough time lately and regulatory unrest has been the chief reason. This led to a fall from € 29.8 million in 2014 to €17.3 million in 2015.
Source:

Germany’s P2P Regulatory Environment

Though Germany is one of the biggest EU credit markets, the country has only very recently seen a surge in the alternative lending segment. The biggest factor for its slow growth stems from the stern and complex regulatory framework. Under German law (‘Kreditwesengesetz’), only banks may originate loans. To comply with this regulation, each P2P lending service has to partner with a bank that formally originates the loan and right away has to sell the rights to proceeds to the investors via the platform. This requires a complex legal (and technical) structure in which no direct contractual relationship is forged between the investor and borrower. This has also led to Germany’s P2P players being absent from the secondary loan market.

Apart from this, another challenge P2P players face is competition from traditional banks in terms of interest rates offered for unsecured installment loans. Currently, the monthly average real interest rate varies between 5.62% and 6.06 % p.a. in 2017. This hardly leaves any room for P2P lenders to compete with the banks. Use of credit cards is not as prominent as in the US or UK, so there is less opportunity to do high-interest refinancing.

But having said that, since the post-2008 financial crisis, traditional banks have lost public trust, and customers are now open to trying other financing alternatives. The rise of millennials and their reliance on smartphones and tablets is another reason the P2P market is beginning to thrive in Germany.

Leading P2P lenders in Germany

  • Auxmoney – A financial services company that provides an online peer-to-peer loan marketplace. It has raised $198 million in various rounds of funding. It is the largest P2P platform in the country. As of January 31st, 2016, the company had originated 441 million EUR in loans since launch with a monthly loan origination volume of 10.6M. It was founded by Philip Kamp, Raffael Johnen, and Philipp Kriependorf. It offer loans up to €25,000 with loan terms ranging from 12 to 60 months. They assign a proprietary credit score to each borrower and the rate of interest is based on that score.
  • Lendico – Founded in December 2013 by the incubator and venture capitalist Rocket Internet. Lendico is a multinational company that operates a peer-to-peer lending platform. The platform links lenders and borrowers with interest rates starting at 2.99 percent. Loans are available to borrowers for amounts between $1,360 and $34,000. Loan terms range from 6 months to 60 months. It also allows German investors to lend cross-border via Spanish loan listings. Arrowgrass Capital acquired it in July this year. It also operates in Spain, the Netherlands, Austria, Poland, and South Africa.
  • Zencap – Founded in 2014 by Dr. Matthias Knecht and Christian Grobe. Zencap used to offer business loans of up to €250,000 for durations ranging from 6 months to 60 months, and at the end of 2015 it was acquired by UK-based Funding Circle. Since inception, it has originated loans worth €66 million (approx).
  • SpotCap – Founded in 2014 by Jens Woloszczak and is based in Berlin. Rocket Internet backed Spotcap offers online business loans to companies in Spain, the Netherlands, the UK, and Australia. It has secured over €100 million in funding in various rounds. It has a high-profile list of investors that includes Rocket Internet, Access Industries, Holtzbrinck Ventures, Kreos Capital, Finstar Financial Group, and Heartland Bank.
  • Smava – Smava GmbH is a Berlin-based credit broker and founded by Alexander Artope. Since its launch in 2007, more than 15,000 investors and 6,000 borrowers have done business with each other through the smava.de credit market. It has raised almost $67 million in funding.
  • Main Funders – Commerzbank also launched its own P2P platform last year under the name Main Funders. It offers SME loans ranging from EUR 200 thousand to EUR 10 million for a maximum period of 5 years. Main Funders charges 0.45% of the loan amount from the borrowers and charges 0.2% from investors.

Apart from this, players from other countries are beginning to show interest in the German market. Recently, Finnish P2P credit marketplace Fellow Finance collaborated with Wirecard AG to offer loans to consumers in Germany. Likewise Advanon, a Switzerland-based P2P player, has started operating in the German market as well.

Conclusion

Even though the German fintech market is still in its infancy, the size of the economy makes it extremely lucrative. Considering it is one of the largest markets in EU, it is quite ironical that it is still untapped. But online lenders now seem to be focusing on Germany and are aggressively investing to lure borrowers. It is safe to say that the next few years will be very interesting for the German alternative lending market.

Author:

Written by Heena Dhir.

Thursday September 7 2017, Daily News Digest

robo-advisors

News Comments Today’s main news: Square plans to apply for an ILC banking license. Laplanche boosts volumes at Upgrade. SoFi CEO pulls out of Goldman fintech conference due to recent sexual harassment allegations. RealtyMogul launches MogulREIT II. Today’s main analysis: Why broker-dealer robo-advisors miss the point. Today’s thought-provoking articles: Why broker-dealer robo-advisors miss the point. RateSetter says even a millionaire couldn’t […]

robo-advisors

News Comments

United States

United Kingdom

China

European Union

International

India

MENA

Canada

Africa

News Summary

United States

Square to apply for industrial bank, inflaming ILC debate (American Banker), Rated: AAA

Payment processor Square is seeking an industrial loan company, according to several sources familiar with the matter, further sparking debate over whether fintech companies should be allowed to use the controversial charter.

“ICBA’s feeling about Square applying for an ILC is the same about SoFi,” said Camden Fine, the president and CEO of the Independent Community Bankers of America. “If these entities want to be banks, they should apply for banking charters and come under full and unified banking supervision.”

Square’s main purpose for the charter will be to extend its small-business lending business, the spokesperson said. Though it also intends to take deposits, which would provide some amount of funding for its on-balance-sheet loans, the lion share of the company’s loans would still be sold off to third parties.

Square also felt the ILC charter was best suited to its structure, as the company owns a point-of-sales hardware appliance business and even a food delivery service called Caviar.

Ousted Lending Club chief boosts volumes at new venture (Financial Times), Rated: AAA

Renaud Laplanche, the former Lending Club chief ousted over a governance scandal last year, is stepping up lending at his new venture, determined to re-impose himself on the market for refinancing more than $1tn of credit card debt.

Mr Laplanche launched his firm, Upgrade, in April, having raised $60m in Series-A funding from a group of investors including Union Square Ventures, Ribbit Capital and CreditEase, China’s leading online lender. As at Lending Club, he is homing in on consumers struggling with big balances on credit cards — offering to swap a floating rate of, say, 17 per cent for a fixed rate about 5 percentage points less.

While Mr Laplanche declines to say how much business he has done so far, he has begun to boost volumes, responding to steady demand from consumers and also for high-quality assets from half a dozen core institutional investors. That new cadre of investors is unfazed by the scandal which erupted in May 2016, he said.

SoFi CEO Backs Out of Goldman Event Amid Sexual Harassment Probe (Bloomberg), Rated: AAA

Social Finance Inc. Chief Executive Officer Mike Cagney was supposed to take the stage at the Goldman Sachs FinTech Conference in New York City on Thursday, but he backed out amid a lawsuit and internal investigation at the firm.

Why broker-dealer robo advisors miss the fintech point (Financial-Planning), Rated: AAA

Over the past two years, there’s been a growing trend of broker-dealers announcing prospective launches of their own robo advisor solutions. From LPL developing a platform with BlackRock’s FutureAdvisor to Voya planning to launch a robo advisor, and Kestra Financial announcing it is working on a robo platform on the back of its acquisition of H. Beck, there’s been no shortage of announcements.

Launching a robo advisor does hold appeal among broker-dealers. Many of their reps are asking for it, either because it’s an easier way to handle smaller clients, or just to have a robo advisor option for millennial clients. Who wouldn’t want a button for the advisor’s website that young people can click to open up small accounts that will grow with time? And from the broker-dealer’s perspective, ideally, this helps them address the coming generational shift of assets from baby boomers down to millennials.

But for a broker-dealer that in the aggregate is losing 3% to 5% a year in asset outflows a decade from now, it’s a crisis, because a broker-dealer still has a multi-decade open-ended timeframe as an ongoing business entity. This is why we see broker-dealers, as well as RIA custodians, so obsessively beating the drum about advisors needing to focus more on younger clients. It’s not actually because advisors desperately need younger clients for our businesses to survive. It’s because they, the broker-dealers and RIA custodians, need us to get younger clients for them so their businesses survive and so they have younger clients after we’re gone and retired!

And so from the broker-dealer’s perspective, if millennials are pursuing robo advisor solutions, then the broker-dealer wants to roll out a robo advisor to get those younger clients and solve its own long-term generational issue. But here’s the problem with the strategy: robo advisors live and die by their ability to get clients online, and that’s not easy for anyone, especially a large base of independent registered representatives.

DOOMED TO FAIL

Betterment is just over $10 billion in total assets after six years. Wealthfront is just over $7 billion AUM in that same duration. Schwab made news for $15 billion dollars of assets, but has actually noted only a third of that total was new assets. Vanguard is now over $80 billion, but remember they had much of their assets already as well. Vanguard is direct-to-consumer through the Internet already; those in Vanguard’s Personal Advisor Services were predominantly existing Vanguard investors, simply upsold to human advice. Even Edelman online, which launched in early 2013, has accumulated barely 1,000 clients and just $62M of AUM after four years (and their average robo client is actually a baby boomer anyway.)

Source: Financial-Planning

VALUE IN EFFICIENCY
In other words, the real blocking point of robo advisors is the client acquisition cost — what it takes to market and get a young investor to invest on your platform. As the founding companies learned the hard way, this is not an “If you build it, they will come,” kind of asset-gathering opportunity. Instead, robos at best have been struggling to solve those client acquisition costs in the face of slowing growth rates, and many have been getting outright buried by those costs. That’s why robo advisor growth rates continue to slow down. Most of them have already sold, and most of the ones that are left aren’t even really focusing on a pure robo strategy anymore.

RealtyMogul.com Launches Second Real Estate Investment Trust, MogulREIT II, to Invest in Multifamily Apartment Buildings (BusinessWire), Rated: AAA

RealtyMogul.com, the online marketplace for commercial real estate investing, today announced the launch of the company’s second real estate investment trust or “REIT,” MogulREIT II.

MogulREIT II aims to invest in multifamily apartment communities across the United States that have demonstrated consistently high occupancy and income levels across market cycles. MogulREIT II also plans to invest in multifamily properties that offer value add opportunities with appropriate risk-adjusted returns and potential for appreciation objectives.

According to the U.S. Census Bureau’s Housing and Vacancy Homeownership Report, the U.S. apartment market has experienced a strong recovery, as evidenced by the steady drop in vacancies and an average annual effective rent growth of 3.9% per year, between 2010 and 2015.

MogulREIT II plans to only consist of properties that satisfy RealtyMogul’s rigorous zero-based underwriting process, which analyzes each potential deal from scratch through a combination of proprietary in-house analytics and underwriting. RealtyMogul also spends over $1 million annually for the use of third-party data and technology to vet each deal. The process is so intensive, fewer than 1% of the requests reviewed by RealtyMogul pass its high underwriting standards. Keep in mind there are risks to investing, including loss of capital, so one should evaluate the full offering materials.

RealtyMogul MogulREIT II Survey Data (RealtyMogul Email), Rated: A

Overview

RealtyMogul recently commissioned Harris Poll to conduct an online survey among over 2,000 U.S. adults to better understand the reasons people choose to rent over buying a house.

Americans have shifting priorities and owning a home might not be at the top of the list

  • Roughly 7 in 10 Americans (71%) believe the home buying process is overwhelming
  • 70% of Americans believe people these days will need to rent well into their 30’s in order to save enough money to buy a home
  • Over a third of Americans (35%) would prefer renting over owning a home to maintain a flexible lifestyle
  • Roughly a third of Americans (34%) would rather save their money to spend on traveling than to put it towards buying a home
  • A third of Americans (33%) would prefer to rent than own a home if it meant they could still afford small luxuries (e.g. eating out, fancy coffee, avocado toast) in their everyday life

Read the full survey results here.

LendingRobot CEO exits (Geekwire), Rated: A

Emmanuel Marot has left LendingRobot, the peer-to-peer lending company he co-founded in 2013. He served as CEO of the startup for the past four years, navigating LendingRobot through a merger with NSR Invest in August.

Marot isn’t sure what his next career move will be but remains General Manager of Zenvestment.com, according to LinkedIn.

Legislative Update 162 (Experian Email), Rated: A

Highlights this issue:

  • On September 7, the House Subcommittee on Financial Institutions and Consumer Credit has scheduled a hearing to review “Legislative Proposals for a More Efficient Federal Financial Regulatory Regime.” The Subcommittee has not released the full agenda, but it is expected that the hearing will focus on several bills affecting consumer credit.
  • Congress continues to consider legislation that would repeal the CFPB’s Arbitration Rule using an expedited legislative process under the Congressional Review Act (CRA). The House of Representatives passed a resolution of disapproval on July 25. The Senate is expected to take up the measure upon their return from the August recess, although there is uncertainty when a vote will take place given other priorities that Congress must pass by September 30, which is the end of the US Fiscal Year.
  • On August 30, three Democrats on the House Energy and Commerce Committee sent a letter to the Government Accountability Office (GAO) requesting that GAO further evaluate post-breach identity protection products used by government agencies.
  • Legislators in California continue to debate legislation that would enact a broadband privacy law in the state, similar to the one first issued by the FCC and then overturned by Congress. A.B. 375 would prohibit an internet service provider from using, disclosing, selling or permitting access to customer personal information.

Read the full report.

StartEngine Files to Raise $ 5 Million Reg A+ Crowdfunding Offer (Crowdfund Insider), Rated: A

StartEngine, one of the most activea investment crowdfunding platforms in the US, has filed with the Securities and Exchange Commission to raise up to $5 million in common equity at $5 per share.

The actual listing is not yet live on the StartEngine platform. The filing indicates that up to an additional 100,000 shares may be issued as “bonus shares”. There are no selling shareholders and the entire proceeds will go to the company. According to the filing, the minimum investment is $500.

Web site steered U.S. borrowers into bad, illegal payday loans: CFPB (Reuters), Rated: A

The bureau imposed a $100,000 fine on California company Zero Parallel LLC, which as a “lead aggregator” identifies potential borrowers and then sells their information. The action shows the agency has its eye on the online side of the industry, which crosses state lines and has grown in recent years. Potential borrowers fill out web forms and then are immediately sent to a lender’s site to take out the debt.

According to a CFPB statement, Zero Parallel sold applications to lenders it knew did not follow states’ usury laws, interest-rate restrictions and prohibitions on who can make the loans, and kept borrowers in the dark about risks and costs.

Zero Parallel simply sold leads to the highest bidders, according to the CFPB, and borrowers did not know they were taking out illegal loans.

Zero Parallel will pay the fine without admitting or denying the allegations, the CFPB said. The agency also said it had reached an agreement with Zero Parallel’s owner, Davit Gasparyan, to resolve similar charges filed last year against his previous company, T3Leads, with a $250,000 fine.

FINTECH Gains Traction as Businesses Embrace Alternative Banking and Financial Solutions (PR Newswire), Rated: A

Global Payout, Inc. (OTC: GOHE) makes payment solutions available to clients around the world, serving the needs of everything from commercial enterprises to government institutions. Its Global Reserve Platform is a web-based banking platform that includes everything domestic, foreign exchange, and international payment service providers need to conduct financial transactions. It handles online banking, compliance, mobile wallets, card management, biometric payments, authentication, merchant payment processing, bill payments and more, while also offering core and traditional banking products. Global Payout’s primary focus in this area is logistics, in addition to small to medium size companies, banking, and travel firms.

The CEO of Able Lending Responds to the Rumors (Lend Academy), Rated: A

Yesterday, the CEO of Able Lending, Will Davis, reached out to me to clear the air. Here is his unedited statement:

We believe this story originated by the fact that we’ve been in active discussions with a number of originators to acquire Able, and there’s a non-zero chance this story was placed in order to throw an interested party off the trail.

This anonymous source doesn’t seem to be anyone close to Able, because Able does not own a portfolio of loans (it originates and distributes loans to direct lenders, who then hold those loans on their balance sheet) and therefore has no portfolio to sell. In any event, we have no plans to go out of business and no plans to declare bankruptcy.

Passive Investments In CRE: Do They Really Exist? (Seeking Alpha), Rated: B

The wealth of new crowd-funding opportunities in CRE is just the latest addition to a long line of traditional equity funds, REITs and ETFs already offering investors the chance to invest without the high upfront cost traditionally associated with a direct CRE investment. It sounds easy, right? But how truly “passive” are these opportunities?

The only problem with passive investing in CRE? Pure 100 percent passive investing doesn’t exist.

United Kingdom

RateSetter: Even a millionaire could no longer live off savings interest (P2P Finance News), Rated: AAA

ROCK-BOTTOM interest rates are now challenging the convention that someone with £1m in savings could live off the interest, RateSetter claims.

The peer-to-peer platform’s latest savings tracker found on average UK adults think they would need an income of £26,140 per year to live comfortably, but £1m in an average savings account would pay just 0.14 per cent interest, equating to £12,500 each year.

£1m invested in a one-year bank bond with an average rate of 0.79 per cent would earn just £7,900, while the same amount could earn £45,000 in a RateSetter account earning 4.5 per cent interest.

Investors opting to put their £1m into FTSE 100-listed stocks would have earned £80,000 in interest over the 12 months to the end of August, the research found.

Funding Circle reveals new brand positioning and identity with ‘Made to do More’ campaign (The Drum), Rated: A

The challenge was to find an emotional positioning that resonated with Funding Circle customers while instilling trust and confidence as a financial services company. Rooster Punk helped Funding Circle to identify a common thread that connects small business owners, investors and the people who work at Funding Circle. Results revealed they share a uniquely driven yet positive attitude to work and life, a restless determination to succeed and the tenacity to get there. The agency called this ‘Made to do More’.

Rooster Punk’s founder, Paul Cash, commented: “Developing Funding Circle’s new position and identity had to go deeper than a product message around faster business loans. We set out with the ambition that we didn’t just want people to buy from Funding Circle, instead we wanted them to buy into them.

Meet the firm which hopes to solve the late payment problem (City A.M.), Rate: A

This warning comes from Tony Duggan, chief executive of fintech firm Crossflow Payments, a company which acts like a cog between corporations, their suppliers, and funding providers – ensuring that suppliers don’t have to wait for a month or more to get paid.

Duggan’s warning is not just a reference to Brexit, but centres on the introduction of new payment practice laws, which will make it a criminal offence for a corporation not to make public whether it is paying suppliers according to the terms of the contract.

The code looks to stamp out problems with late payments. Ultimately it aims to improve the cashflow of businesses – largely suppliers – by making sure they are paid by their corporate customers on time.

Crossflow is a no frills sort of business; it’s basically a B2B version of peer-to-peer lending, and one that is currently pretty unique in the UK arena.

Peer-to-peer lender Linked Finance marks 1,000th loan (RTE), Rated: A

Peer-to-peer lending platform Linked Finance has funded its 1,000th loan for a small or medium sized company here.

Figures published by Linked, which facilitates loans from individuals directly to businesses outside the banking system, show €31m has now been borrowed through the platform.

The company, which was launched in 2013, also said that €2.5m in interest has already been repaid to Linked Finance lenders.

Marrying self organising teams and customer obsession – Interview with Andrew Lawson (Customer Think), Rated: A

Highlights from my conversation with Andrew:

  • Capital One was an early pioneer in big data, data driven decision making , customer centricity and human centred product design.
  • Back in 2014, a lot of banks were talking a lot about being customer centric but when you get inside the banks there was little evidence to back that up. [Ed: Have things changed?]
  • Customer obsession is very much behind the growth of peer-to-peer lending.
  • When Andrew joined Zopa in 2014 they were a team of around 50 people lending about £20mill per month.
  • Zopa was founded to “make money simple and fair”.
  • Zopa was awarded Superbrand status in the early part of 2017. The annual Superbrands’ league table is based on independent research to identify the UK’s strongest brands, as voted for by marketing experts and thousands of British consumers.
  • Zopa still thinks of itself as a start-up despite the fact that they have been going for 13 years now.
  • In that time Zopa have never spent any money on growing their brand and have grown organically and via word of month.
  • Zopa has won a bunch of customer service awards that celebrate and recognise their approach.
  • Zopa has recently moved to a system of self-organising teams and that is helping them to achieve more and deliver more on their customer promise.
  • In the first quarter of 2016 they delivered more than they had in the whole of 2015 with the same number of people.
  • Ultimately, it’s all about creating an environment where you find and allow great people to go and solve problems.
  • Andrew’s role is all about ensuring they have the right people in the right tribes solving the right problems. It’s not about him being able to come up with all the answers as that just doesn’t scale.
  • In terms of mistakes, initially they found that their tribes went too tribal and it was difficult seeing what was going on within the tribes. That was a problem particularly given the level of technical and strategic dependencies that exist between tribes.
  • On a day to basis, their teams work in a way that is akin to a modern agile environment and are able to pick the right model (1 week sprints, 2 week sprints, kanban etc) depending on their context and preferences.
  • As is the nature of agile working, they are constantly tweaking and looking for ways to improve.
  • Other challenges they have faced include the management of people from different backgrounds, skillsets and with different experiences.
  • Given that they are now 250 people in London, the next big challenge for them will be how do they move this system into a remote context.
  • The heart of their success has been in creating those relationships where there weren’t relationships before i.e. between business people and tech people. It’s easy when you sit next to them or are in the same office but more difficult when you are in different locations, time zones or even speaking different languages.
  • They embraced a lot of Spotify’s approach as there are lots of things written about them and by them on how they organise themselves (videos, talks, blog posts, slide shows etc). Google ‘Spotify and Tribes’ to find more.
  • Don’t make assumptions around customers needs. Go and ask then as you will almost certainly be wrong.


UK fintech investment rises in H1 (Finextra), Rated: A

More than a billion dollars was invested in British Fintech companies in the first half of this year, over a third more than the same period in 2016, according to trade body Innovate Finance.

Fintech employs over 60,000 people in the UK and contributes $9bn (c.£7bn) to the economy.

Two peer-to-peer lending platforms also received significant rounds of investment. London-based FundingCircle a marketplace which allows investors to lend directly to SMEs raised another £80m in equity funding. Venture capital group Accel led the funding round alongside investors such as Temasek from Singapore. The business lent £1.1bn in 2016. In June Zopa another peer-to-peer lender raised £32m from Indian investor Wadhawan Global Capital and European venture capital fund Northzone. The business plans to use the funding for the ambitious roll out of its own retail bank.

China

After regulators ban on coin fundraising, over 40 ICO platforms closed (Xing Ping She), Rated: AAA

Several platforms have taken steps after the central bank’s announcement of ban on ICO (initial issue of tokens). Up to September 5th, more than 40 platforms in China have taken measures to suspend the operation, registration or even permanently stop the service of ICO. Among them, ICOAGE, a well-known ICO platform, has launched a one-key withdrawal function. Meanwhile, ICOAGE’s official website says that it will actively negotiate with the project side, and even if the project does not accept the refund, ICOAGE will pay the relevant digital currency in advance to ensure the safety of investors. It is worth mentioning that, despite the regulation to stop the ICO, there still stages “the last madness” in the market, with some of tokens’ daily gains exceeding 30%.

China steps up financial regulation to address risks (China.org.cn), Rated: A

China’s ban on Initial Coin Offerings (ICOs), a digital coin fundraising scheme, was only part of a broader campaign to curb the country’s financial risks.

In an announcement Monday, China’s central bank ordered a complete halt on new ICO offerings, in which technology start-ups issue their own digital coins, or “tokens,” to investors to access funds.

Similar to ICOs, peer-to-peer (P2P) lending served as an Internet-based alternative for companies and individuals to borrow money. As the P2P industry took off in recent years, it also made room for high-profile fraud, which prompted regulators to act fast.

European Union

Klarna’s newest investor could hold the key to ‘growing the company’s revenues manifold’ (Business Insider), Rated: AAA

Klarna last week reported some impressive revenue growth, which, combined with a push into digital banking and recent deals with VISA and Stripe make its future prospects look rosy.

What could make Permira a strategic asset for Klarna, is its stake in Magento, one of the world’s biggest e-commerce platforms. The idea would be to integrate Klarna with Magento; a goal that Lundell says was in the works already before Permira’s entry.

Seeing that Magento runs some 15 percent of global e-commerce, getting visibility on the platform could open up a gigantic new market for Klarna and its CEO and cofounder Sebastian Siemiatkowski.

Mambu’s SaaS Banking Engine Helps N26 Transform Operations (Fintech Finance), Rated: A

Mambu announced that its innovative solution is being used by N26 to allow the Berlin-based mobile bank to integrate systems and quickly bring services to market in support of its growth strategy.

Before N26 was granted a full banking licence in July last year, it used the services of a partner bank and then migrated to its own platform in late 2016. Since then their customer base has grown by 500%, helping them reach the 500,000 customer mark in August 2017.

Mintos Reports Topping €300 Million Milestone in Online Lending (Crowdfund Insider), Rated: A

Latvia based Mintos has reached a new milestone having now topped  €300 million in online loans since platform launch two years ago. Mintos reports that more than €200 million has been invested in 2017 alone, making Mintos a market leader in continental Europe claiming a 40% market share.

Mintos states that as of September 2017, approximately € 1 million is invested in loans through Mintos daily, which is three times more than just a year ago.

European Central Bank working on new fintech licensing guidelines (Independent), Rated: A

The European Central Bank is working on new licensing guidelines that would also cover financial technology firms, Daniele Nouy, the ECB’s top bank supervisor told a conference on Wednesday.

The fintech sector, though still relative small, has been stealing market share from traditional lenders in a variety of sectors from payments to lending, attracting investment $6.5bn (£4.9bn) in the first half of the year.

Wirecard Supports Fellow Finance’s Market Entry in Germany and Ensures a Completely Digital Credit Process (Business Insider), Rated: B

Wirecard supports the Finnish FinTech company Fellow Finance to enter and provide a digital infrastructure for the German financial market. Wirecard is supporting Fellow Finance by placing their German full banking licence at the Fellow Finance’s disposal and in addition enabling a completely digital credit process. For example, the identification of the borrower as well as the signature of the credit agreement are made fully electronically.

The market volume of German alternative online financial services grew enormously between 2013 and 2015. In peer-to-peer consumer lending alone, there was year-on-year growth of 95%.

International

Q2 2017 Fintech Insights (FT Partners), Rated: AAA

Source: FT Partners

Get the full report here.

Banking the Unbanked through AirFox ICO (Cryptocoins News), Rated: A

AirFox’s groundbreaking idea involves using a mix of micro-credit and advertising to facilitate to make mobile data plans accessible to the world’s poor and underprivileged.

AirFox will launch their initial coin offering (ICO) on September 19, 2017 at 10:00 am EST. The token on sale is called AirTokens (AIR) and the period of sale has been fixed at 31 days. There are plans afoot to sell a total of 1.5 billion AIR, out of which 1.05 billion (70 per cent) are on offer at the crowdsale. AirTokens are based on the Ethereum (ETH) blockchain.

Laying out his vision Victor Santos, CEO and Co-founder of AirFox says, “Investors will be able to hold AirTokens that will be used by Lenders and Advertisers to sponsor the mobile internet of millions of users. There will be a market for buyers and sellers of AirTokens. Those who wish to take the AirTokens and lend micro-credit to users, will also be able to earn an interest using the data that we collect on the smartphone.”

AirFox raises $ 6.5M in token presale (CoinReport), Rated: A

AirFox, the firm utilizing advertising and blockchain technology to bring smartphone data and internet to 4 billion people in the developing world, has met the presale target of its token, AirToken (AIR), almost two weeks early, raising $6.5 million, according to an email CoinReport received from BIGfish Communications, AirFox’s PR firm.

India

Modalku Gets Audited to Gain Public Trust (Jakarta Globe), Rated: A

Mitrausaha Indonesia Group, also known as Modalku, a homegrown marketplace that provides peer-to-peer lending, received an “unqualified opinion” which is the best possible audit outcome  from public accounting firm Purwantono, Sungkoro & Surja, hoping it will help the company gain the public’s trust.

Purwantono, Sungkoro & Surja, a member of Ernst & Young, granted the company an “unqualified opinion” ranking after reviewing the company’s financial statements, income reports and other relevant comprehensive income statement, equity changes, cash flow datat and other information for the year ending Dec. 31. A ranking of this stature means the statements are deemed sound.

Credit scoring platform CreditVidya bags $ 5 mn from Matrix, Kalaari (VC Circle), Rated: A

Mumbai-based InfoCredit Services Pvt. Ltd, which operates credit scoring platform CreditVidya, has raised $5 million (Rs 32 crore) in a fresh round of funding led by Matrix Partners, the company said.

Existing investor Kalaari Capital, which had invested $2 million in June 2016, has also participated in the round. While Matrix put in Rs 23.81 crore, Kalaari accounted for the rest.

What is P2P lending and borrowing: All you want to know about Digital marketplace for loans (Financial Express), Rated: A

In layman’s terms, Peer-2-Peer (P2P) lending and borrowing is like a digital marketplace for loans. Hence usually it is known as ‘marketplace lending’ or often gets confused with crowd-funding. Instead of applying for a loan with a bank, NBFC, private finance company or any other loan institution, you can request a loan from regular people like you and me (therefore, the term Peer-2-Peer).

Most of these loans are unsecured for a large number of people who are underbanked or thinly banked.

The actual logistics of Peer-to-Peer can be a little more complicated in India, but some platfoms like ours allow the borrower to download the app, fill the application form and apply for the loan. As a borrower, you have to fill a quick online registration form and pay the upfront registration fee which is refundable. Then proprietary credit assessment is done and a brief commentary of why you want a loan is shared with the lenders. The app requires the loan applicant to submit bank statement, upload basic KYC documents like PAN card, Aadhaar card etc. The proprietary algorithm assigns the loan interest rate and tenure to post the loan on the marketplace for lenders to assess and invest.

MENA

Developing Asia accounts for large trade finance gap (The Asset), Rated: A

Businesses particularly the micro, small and medium-sized enterprises (MSMEs) continue to face challenges in accessing sufficient credit, resulting in a global trade finance gap of US$1.5 trillion in 2016.

Emerging economies continue to face the greatest shortfalls with developing Asia accounting for 40% of the global total in trade finance gap. The MSMEs have the biggest difficulties in accessing trade finance, representing 74% of the total rejections in 2016, compared with 57% in the previous year.

The cost of regulatory compliance can lead banks to exit client relationships as reflected by the 40% response in the 2016 survey and 45% in 2015, including the withdrawal of correspondent relationships.

Mideast fintech startup NOW Money fetches $ 1.46 mln (PE Hub), Rated: A

NOW Money has closed its bridge funding round with a total of US$1.46m.

In addition to the recent US Venture Capital investment, mentioned in a previous press release, this funding round includes $700,000 from Dubai-based Venture Capital firm, Myrisoph Capital. Other contributions have come from private investors and MENA-based women’s investor network WAIN.

WAIN is the first investor network for women in the MENA region. Its goal is to build an informed ecosystem of women investors who support women entrepreneurs in the Arab world.

Canada

IOU Financial Partners with Rubicon Global to Fund Recycling Ecosystem (Business Insider), Rated: A

IOU FINANCIAL INC. (“IOU” or “the Company”; TSX-V:IOU), a leading online lender to small businesses (IOUFinancial.com), is pleased to announce a strategic partnership with Rubicon Global.  IOU joined the RUBICONPro buying program to provide Rubicon’s network of independent haulers with fast, convenient and reliable, non-collateral funding solutions.

Where bank loans are not an alternative, an IOU term loan will help Rubicon’s haulers invest in equipment to take on more recycling volume and proudly join Rubicon’s expansion projects for a more sustainable world.  IOU loans will also be provided to Rubicon’s base of thousands of small businesses embracing recycling to contribute to a healthy planet.  IOU will also promote Rubicon’s innovative model to its thousands of existing and past borrowers.

Africa

Development of African ­crowdfunding platforms (DandC), Rated: AAA

Africanise crowdfunding means setting up local crowdfunding platforms with adapted technology for local investment. No bank account? Not a problem! Many African countries lack conventional money transfer infrastructure; bank accounts and credit cards still tend to be the exception, not the rule. To permit widespread participation in crowdfunding in such circumstances, mobile phone-based money transfer services (like the Kenyan financial service M-Pesa) are needed. The Indian crowdfunding platform Ketto () works with a courier service that collects cash payments.

Copying these approaches is not the way to move ahead in Africa, not least because of the lack of an adequate institutional and legal environment. First and foremost, SME financing  requires national crowdfunding platforms with traditional financing options (donation-, rewards- and lending-based). Minimum contributions must be small and payable in local currency.

Authors:

George Popescu
Allen Taylor