Thursday August 29 2019, Weekly News Digest

VC-backed fintech

News Comments Today’s main news: Funding Circle closes $198M ABS for U.S. SMBs. KBRA assigns preliminary ratings to Consumer Loan Underlying Bond Credit Trust 2019-P2. SoFi to create 300 jobs in Jacksonville, Florida. LendInvest postpones IPO until at least 2020. Binance offers crypto lending. Today’s main analysis: The nonbank and alternative lending industry in 2019. […]

The post Thursday August 29 2019, Weekly News Digest appeared first on Lending Times.

VC-backed fintech

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United States

Funding Circle Closes $ 198 Million Securitization to Support US Small Businesses (Valdosta Daily Times), Rated: AAA

Funding Circle today closed its first asset-backed securitization (ABS) of US small business loans originated through its platform. The $198 million deal marks the debut of Funding Circle’s US securitization sponsorship capability, and is the fifth securitization of Funding Circle business loans globally.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2019-P2 (Benzinga), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2019-P2 (“CLUB 2019-P2”). This is a $287.80 million consumer loan ABS transaction.

Preliminary Ratings Assigned: Consumer Loan Underlying Bond (CLUB) Credit Trust

2019-P2

Class

Preliminary Rating

Initial Class Principal

A

A+ (sf)

$200,700,000

B

A- (sf)

$37,900,000

C

BB (sf)

$49,200,000

DeSantis says SoFi, SS&C Technologies will create 498 jobs in Jacksonville (Jax Daily Record), Rated: AAA

Florida Gov. Ron DeSantis announced Wednesday that two international information technology companies will create a combined 498 jobs in Jacksonville, disclosing the names of Project Quail and Project Liberty.

SoFi, a California-based online personal finance company, has been seeking $1.5 million in state and city incentives through the Qualified Target Industry Tax Refund program as code-named Project Quail to establish its southeastern operations center and create 300 jobs in Jacksonville.

Court activity on Aug. 27: Sofi Lending Corp. vs Cindy Luu (SE Texas Record), Rated: B

The Harris County Civil Court reported the following activity in the suit brought by Sofi Lending Corp. against Cindy Luu on Aug. 27: ‘Original Petition Citation Issued’.

Swimming Pools Are a Highly Prized Amenity Amid the Summer Heat (LendingTree), Rated: AAA

A new LendingTree study ranks the 50 largest cities by its share of homes with a swimming pool. We found that about 10% of homes have pools, ranging from nearly 33% in Phoenix to 1% in Portland, Ore. We also looked at the values of homes with and without swimming pools to show how much this amenity is worth. Let’s dive in.

Key findings

  • You’ve gotta pay to play: The median home with a pool is valued at $469,187, while the median home without a pool is valued at $305,152 — a 54% premium. The highest premium is in Memphis at a whopping 157%.
  • Go West: It’s no surprise that six of the top 10 cities for swimming pools are in the West — four in California and one each in Arizona and Nevada.
  • Hot, hot, hot: Phoenix, which experiences more than 100 days above 100 degrees a year, leads the way with 32.7% of homes having a swimming pool.
  • Sunshine State: Florida is not far behind California with three cities in the top 10. Miami, Tampa and Orlando rank second, third and fourth, respectively.
  • Rain and water don’t mix: Two of the cities with the least swimming pools are in the rainy Northwest. Portland is in last place with just 1% of homes with pools, while Seattle is not far ahead with 1.3%.
Source: LendingTree

Brex Teams With BigCommerce To Offer Merchant Financing (PYMNTS), Rated: A

Corporate eCommerce card company Brex has announced a partnership with leading SaaS eCommerce platform BigCommerce, according to a release.

Brex’s open credit line, three-month payment terms and interest-free financing are now available to all BigCommerce merchants through the BigCommerce App Store.

German challenger bank N26’s plan to win over Americans (American Banker), Rated: A

N26’s new SoHo office has all the design elements of a tech startup — high ceilings, distressed wood, big windows, a pingpong table, beanbag chairs, community meeting areas.

Digital Banking And Branches Not An Either/Or Proposition (PYMNTS), Rated: A

GOBankingRates found that 25 percent of consumer prefer banking with a mobile app, though nearly half preferred banking in person at a branch or ATM. Yet 76 percent said they wouldn’t open an account with a bank that doesn’t have a mobile app.

According to Fiserv, the preference for digital interactions (online plus mobile) is 58 percent, considerably ahead of the preference for branch interactions (32 percent).

When breaking out online, though, there is a preference for online (37 percent) compared to mobile (17 percent).

Why Fifth Third is raising its bet on alternative power (American Banker), Rated: A

Fifth Third Bancorp is building out its renewable energy banking business, highlighting how the alternative power niche isn’t just for the biggest banks.

The $169 billion-asset Fifth Third recently added three new managing directors to its renewable energy investment banking group. With the additions of Timothy Beach, Ari Citrin and Oliver Janssen, the bank intends to offer more specialized capital markets and M&A advisory services to renewable energy firms, most of which are in solar.

How to Get Your Small Business Ready for a Recession (Successful Meetings), Rated: A

How students are trying to avoid college loans (Marketplace.org), Rated: AAA

Student debt can seem inevitable. Today, more than 44 million Americans owe nearly $1.5 trillion in student loans. This debt has been blamed for many things: Americans’ lack of retirement savingsdeclining rates of home ownership, even the death of marriage.

A look at the nonbank and alternative lending industry in 2019 (Business Insider), Rated: AAA

According to Oracle’s Digital Demand in Retail Banking study of 5,200 consumers from 13 countries, over 40% of customers surveyed think nonbanks can better assist them with personal money management and investment needs, and 30% of respondents who haven’t tried a nonbank platform said they’re open to trying one.

Business Insider Intelligence’s Online Mortgage Lending Report found that the top five US banks – Wells Fargo, Bank of America, and JPMorgan Chase, US Bancorp, and Citigroup – only accounted for 21% of total mortgage originations, which is a huge decline from their 50% combined market share in 2011.

Source: Business Insider

According to a survey from the Federal Reserve Bank of Richmond, in 2016 only 58% of loan requests from small businesses were approved by incumbent banks, compared to 71% approved by alt lenders that same year.

Fund That Flip Raises Another $ 11M to be the Funding Solution for Real Estate Speculators (Alley Watch), Rated: A

AlleyWatch caught up with Matt Rodak to learn more about the company’s success, future growth plans, and recent round of funding, which brings its total funding to $13M across four rounds.

New Tools Help Mortgage Lenders Build Stronger Relationships with Borrowers’ Real Estate Agents (SimpleNexus), Rated: A

SimpleNexus makes it easy for loan originators to create co-branded mobile apps for Realtor partners to share with borrowers. The shared platform enhances the borrower experience by keeping partners up-to-speed on loan progress and putting mortgage calculators and other handy tools at partners’ fingertips.

Pagaya Expands PAID Shelf with Prosper: Closing $ 115 Million Consumer Credit ABS (BusinessWire), Rated: A

Pagaya, a global financial technology company using artificial intelligence (AI) to reshape asset management, today announced the closing of a consumer credit asset-backed security (ABS) at $115 million. Led by structuring agent Cantor Fitzgerald, the ABS will be actively managed by Pagaya’s AI.

Pagaya has been working closely with Prosper to develop innovative financing solutions for consumers, which will be featured in this securitization.

Tech startup Blooma launches out stealth with $ 2.75 million seed funding for its loan origination AI platform (Tech Startups), Rated: A

Blooma, a tech startup that reduces time to revenue for commercial lenders, launches out of stealth with $2.75 million seed funding to transform the lending experience for commercial and private lenders and other organizations. The financing was led by Floodgate, a Palo Alto, Calif.-based investor. Other backers include: Abstract Ventures, Crescent Ridge Partners and Serra Ventures.

Former PayPal executive joins crypto lending startup Cred as CFO (The Block Crypto), Rated: B

Cryptocurrency lending and borrowing startup Cred has hired former PayPal executive as its chief financial officer (CFO), according to an announcement Monday.

iCapital Network expands exec team with four New hires (PE Hub), Rated: B

“STYLE360” Celebrates 15 Years At New York Fashion Week With New Title Sponsor Klarna (PRWeb), Rated: B

Fashion event agency, A-List Communications announces their lineup and new title sponsor Klarna for their 15th year of STYLE360, which will take place during the latter portion of Spring/Summer 2020 New York Fashion Week from September 9 – 11, 2019.

White Oak Commercial Finance Originates a Revolving Credit Facility to The Good Kitchen (Financial Content), Rated: B

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today the origination of a new revolving credit facility to healthy meal service company The Good Kitchen. Originally founded as a meal delivery service, The Good Kitchen will use the proceeds of the credit facility to expand its business into packaged meals sold at 1,500 stores across the United States.

Lenders Moving Away From Small-Dollar Loans to High-Interest Installment Loans (Lexology), Rated: B

California non-bank consumer lenders are moving away from small-dollar short term payday loans and are, instead, embracing longer-term installment…

United Kingdom

LendInvest reportedly shelves IPO plans for now (AltFi), Rated: AAA

Nearly a year after announcing a $39.5m “pre-IPO” funding roundLendInvest has delayed plans to IPO this year in favour of another private cash injection, according to a report by Financial News.

Mobile banking apps in the UK are surging ahead of investment and insurance apps (Business Insider), Rated: A

Over three-quarters of consumers in the UK use a finance app, according to a new study from Speedie Consultants that surveyed 200 people in the country. Twenty-four percent of those surveyed use their finance apps around twice a week, and 23% said they use it daily. The most common finance app users were aged 25-45, in addition to consumers over 65.

Source: Business Insider

Klarna launches VAR campaign created by 72andSunny (Prolific London), Rated: A

Swedish fintech payments firm Klarna has launched a new campaign focused around the introduction of Video Assistant Referee technology in the UK’s Premiere League.

Celsius Network Sees A 20x Increase In Deposits, However, Many Analysts Are Concerned (Bitcoin Exchange Guide), Rated: A

According to the latest press release, leading crypto lending firm Celsius Network has seen an increase of 2,165% growth in deposits. The network has already surpassed 20,000 BTC through mobile app deposits during the first year of operations.

New data reveals rapid growth in Peer-To-Peer lending is cannibalising High st bank market share (ResponseSource), Rated: A

Know Your Money data revealed that:

• Peer to Peer and Challenger lenders comparison searches have more than doubled in 3 years

• 33% of Businesses selected a P2P or challenger lender on  in 2019 – compared to just 15% in 2017

• Alternative lending interest more than doubled in the last 2 years

Revolut Boosts Executive Leadership with New Hires from Traditional Banking (Crowdfund Insider), Rated: B

According to Revolut, the Fintech bank has hired Philip Doyle as Director of Financial Crime Risk, Wolfgang Bardorf as Treasurer and Stefan Wille as Deputy Chief Financial Officer.

European Union

Zurich-based Numbrs is the latest fintech to join the unicorn club (Business Insider), Rated: AAA

The Zurich-based fintech, whose investors include former Deutsche Bank CEO Josef Ackermann, raised $40 million at a valuation of over $1 billion, reports Bloomberg. The latest investment brings Numbrs’ total raise to date to almost $200 million, CEO Martin Saidler told the outlet.

Notably, in contrast to many of its peers, Numbrs has joined the unicorn club not by focusing on venture capital and private equity funding, but instead by relying mostly on individuals and families — 50 have invested in the company thus far. The startup’s app enables users to aggregate their various bank accounts and manage their finances, and offers a marketplace for consumers to purchase various financial products.

Source: Business Insider

P2P Global Investments sells largest position for €250m (AltFi), Rated: A

The £1bn P2P Global Investments has sold one of its largest positions, in Castlehaven Finance, an Irish alternative development and bridging finance lender.

Castlehaven typically provides loans of between €1m – €20m in the property space, an increasingly big proportion of P2P GI’s portfolio.

The investment trust has provided financing in excess of €385m to Castlehaven since 2016.

What is the EU doing to understand if Artificial Intelligence apps are trustworthy? (Open Access Government), Rated: B

The University of Oxford received an immense £150 million donation to create a centre studying the ethics surrounding AI in the modern world, whilst global audiences continue to be fascinated by shows like Black Mirror which explore the worst-case consequences of AI accessing personal data.

The project is composed of three distinct, albeit related, parts, run in sequence from January 2019 to December 2020:

Part 1: Application of AI for risk management in bank and peer to peer lending

Part 2: Application of AI for risk management in financial investments and robot advisory

Part 3: Application of AI for risk management in blockchain payments and crypto assets

International

Binance Launches Crypto Lending Service (CryptoGlobe), Rated: AAA

Binance has launched a lending service allowing its users to earn cryptocurrency without trading, in a passive way. Currently the service is open for only a few tokens – its Binance Coin (BNB), Tether’s USDT stablecoin, and Ethereum Classic (ETC). Annualized interest rates are of 15% for BNB, 10% for USDT, and 7& for ETC.

Alternative Finance is Experiencing an Unprecedented Boom Worldwide (Crowdfund Insider), Rated: A

Ten years after the financial crisis, Alternative Finance continues to exhibit strong growth. The sector is estimated to account for nearly €300 billion of inflows worldwide, a market exhibiting 25% annual growth and largely dominated by the Chinese (75%), which percentage was already recorded in 2015 by a study conducted jointly by KPMG and the University of Cambridge.

The United States takes second place with 19% of the market, while Europe currently represents just 6%, 60% of which comes from the United Kingdom. In France, alternative finance raised €1.4 billion in 2018, a year-on-year increase of 39% according to the annual report of KPMG and the non-profit group Financement Participatif France (FPF).

The latest crowdfunding trend is in real estate (Born2Invest), Rated: A

The global crowdfunding market is estimated to be expanding from 2018 to 2022 to $89.72 billion. From the first recorded successful crowdfunding in 1997, to how the first dedicated crowdfunding platform ArtistShare had come about in the year 2000,  crowdfunding has indeed disrupted many industries in different levels.

How and why the global centre of cryptocurrency moved back to Asia (Finder), Rated: A

The problem of investment scammers is much bigger than cryptocurrency though, Wong pointed out, and much bigger than Invest: Asia.

“I don’t think Invest: Asia is big enough to move the needle if you’re running a scam in China,” he said. “That just speaks to the size of the population in China. In general, I think there’s lots of financial scams in general in China, right? For example, a couple years ago there was a big peer to peer lending scandal.”

“The peer to peer lending was legitimately becoming a hot growth FinTech sector in China, but then people were running these peer to peer scams. Because it was so hot, everyone’s talking about it. It creates the conditions for scammers to launch whatever scheme that they want to launch.”

Australia/New Zealand

Prospa Full Year 2019 Results (Scoop), Rated: AAA

• FY19 loan originations of $501.7 million up 36.6% on the prior year (FY18: $367.3 million), 3.1% ahead of prospectus forecast.
• FY19 revenue of $136.4 million up 31.2% on the prior year (FY18: $104.0 million), in line with prospectus forecast.
• FY19 pro forma EBITDA of $6.8 million, ahead of prospectus forecast by 11.5%.
• Prospa has now delivered approximately $1.2 billion in loans since inception and total customer numbers in Australia and New Zealand grew to over 20,000 in FY19, up 58% on the prior year.
• Customer satisfaction remains consistently high, with Prospa’s annual average Net Promoter Score in excess of +77 in 2019. Prospa also has a rating of 9.8/10 on independent review platform TrustPilot.
• Business expansion has continued with the successful launch of new cash flow products and services and diversification into New Zealand.
• Further investment in executive strength, with new Chief Technology Officer, Chief Commercial Officer and Executive General Manager, Growth Channels appointed.

2019 Finder Awards winners (Finder), Rated: AAA

The 2019 Finder Awards recognise the market’s most competitive offerings across credit cards, home loans, personal loans, car insurance, banking, insurance, technology and superannuation.

Source: Finder
Source: Finder
Source: Finder
Source: Finder
Source: Up Bank
India

What future trends do you foresee in the startup ecosystem? (New India Express), Rated: AAA

P2P lending has also become increasingly popular as an alternative lending route as small businesses find it easier to obtain loans directly from other individuals. Going forward, we can expect more cloud-based services backed by advanced analytics that offer personalized loan limits and payback schedules, based on the borrower’s credit history.

Traditional players will also get into online lending and emulate the strategies of P2P lending companies. More businesses will start adopting work-from-home policies to increase cost savings and productivity. On the tech front, businesses will start investing more in AI and analytics to get a deeper insight into customer behaviour.

– Kewal Kapoor, director and creative strategist of CHAI Kreative and Return of Million Smiles  

Xiaomi is moving into India’s consumer-lending market (Business Insider), Rated: A

The fourth-largest mobile phone vendor plans to launch a consumer-lending business, dubbed Mi Credit, in India in the next few weeks, according to Reuters. It will offer loans of up to 100,000 rupees ($1,451), with interest rates starting at 1.8%.

Xiaomi is positioned as a leading smartphone manufacturer in India, with 70 million mobile phones in use throughout the country. It already launched its payment app, dubbed Mi Pay, in the country in March, which is reportedly “doing well,” per Reuters. For context, in China, Xiaomi’s lending business shows a loan book worth $8 billion.

Source: Business Insider

Furniture rental startup RentoMojo to raise Rs 27.7 Cr led by Samsung VC arm (YourStory), Rated: B

In July 2019, the company secured Rs 1.16 crore from Renaud Laplanche, the Co-founder and CEO of Upgrade, who earlier participated in the startup’s Series C funding round of Rs 77 crore in May, along with Accel Partners, Chiratae Ventures, IDG Ventures, and Bain Capital. At that time, the startup said the funds will be used for accelerating its growth and expansion to new cities.

Canada

IOU Financial Inc. Releases Financial Results for the Three and Six- Month Period Ended June 30, 2019 (PR Newswire), Rated: AAA

  • Loan originations increased 31.8% to US$38.5 million in Q2 2019 compared to Q2 2018.
  • Total loans under management increased 36.4% to $101.0 million as at June 30, 2019 compared to the same period in 2018.
  • Adjusted gross revenue increased 25.1% to $5.5 million in Q2 2019 compared to Q2 2018.
  • Adjusted Operating Expense Ratio decreased to 10.0% in Q2 2019 compared to 11.9% in Q2 2018.
  • Adjusted net earnings amounted to $0.3 million in the second quarter of 2019, representing the sixth consecutive profitable quarter. Adjusted net earnings amounted to $0.8 million year-to-date.
Africa

Why and how peer-to-peer lending had to become market place lending (Business Live), Rated: AAA

The linked dangers of an inverted yield curve and a slowing economy have hammered banks stocks in recent months, and profit margins are already compressing. But the banks’ worries pale in comparison to challenges confronting the peer-to-peer or “market place” lenders — the start-ups that have set out, over the past decade or so, to upturn the banking industry.

Authors:

George Popescu
Allen Taylor

The post Thursday August 29 2019, Weekly News Digest appeared first on Lending Times.

Wednesday June 6 2018, Daily News Digest

Marcus future plans

News Comments Today’s main news: N26 reaches 1 million customers. Prospa postpones float. Transferwise could be working with Monzo. Ant Financial shifts away from finance. Goldman Sachs backs Marqeta. BlueVine raises $60M. Today’s main analysis: Capitalists invest in Chinese companies. Today’s thought-provoking articles: Goldman shares its vision for Marcus. 10x Banking founder discusses the future of fintech. Indonesia’s looming digital disruption. United […]

Marcus future plans

News Comments

United States

United Kingdom

China

European Union

International

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United States

Goldman Sachs backs card issuing, processing startup Marqeta (Reuters) Rated: AAA

Goldman Sachs Group Inc (GS.N) has joined a $45 million investment round in Marqeta, a U.S. fintech company offering technology businesses can use to issue payment cards, the startup said on Tuesday.

The round, which brings Marqeta’s total funding raised to $116 million, was led by venture capital firm ICONIQ Capital, according to a statement from the companies. Marqeta is also backed by Visa Inc (V.N).

Goldman Sachs Shares Their Vision for the Future of the Marcus Platform (Lend Academy) Rated: AAA

Source: Lend Academy

In the presentation Solomon did not address everything on this slide directly but much of it is self-explanatory. First, Goldman is breaking down their vision for their consumer platform into four key areas: Borrow, Spend, Save, Protect with 12 separate products listed. It is also interesting that Clarity Money is front and center on this slide. They clearly view the personal financial management app as a critical piece of the puzzle.

Let’s look at the future products in the Borrow space beyond personal loans:

  1. Credit Cards – we have already heard about their deal with Apple but there will likely be a Marcus branded credit card at some point.
  2. Mortgage – This is a huge market and one that still has plenty of room for disruption. While it won’t be easy to displace the banks or large non-bank lenders like Quicken Loans and loanDepot there is a huge market to go after.
  3. Auto – Another big market with no clear fintech leader. The banks still dominate auto lending, particularly for new cars. LendingClub has started in the auto space focused on auto refinancing and I expect that will be the area Marcus would go to first.

When disaster strikes, digital banking can become a lifeline (American Banker) Rated: A

As chief information and digital officer at Popular Inc., Burckhart’s role is mostly in the office and boardroom. But in the aftermath of the Category 4 storm, she and her team spent days in the field, figuring out how to get banking services to those who needed them.

Their efforts cannot be overstated, since the company occupies a key role in the island’s economy: Its Banco Popular claims to have 56% of the deposits in Puerto Rico and 49% of the net loans, as of year-end.

A week after Hurricane Maria, despite islandwide communication and electrical outages, Popular had 53 of 168 branches and 150 of 635 ATMs in service, as well as all digital channels.

Digital Banker of the Year: Fifth Third’s Tim Spence (American Banker) Rated: A

Last year, Spence oversaw the configuration of so-called Agile teams to work on Fifth Third’s online banking channels and mobile apps. This resulted in a revamped bill pay experience, along with the addition of online branch appointment scheduling and the ability to withdraw cash at ATMs using the bank’s mobile app. In months, it was also able to launch Zelle peer-to-peer payments and Momentum, a proprietary app that helps millennials pay off student loans faster through micro payments from rounding up purchases.

The plumber to US fintechs branches out (Financial Times) Rated: A

Apex Clearing helps to power leading fintech firms like Robinhood, Betterment and Stash, acting as the plumbing and operating in the background; as these digital platforms begin to slow their growth Apex has started to look beyond the startups for bigger clients; Bill Capuzzi, CEO of Apex Clearing, says there is more than $500bn of addressable market with larger firms who want to digitize; the effort is not easy as some traditional players still use fax machine technology; making progress slow but firms know they need to digitize and Apex is hoping to take a big share of those making the shift.

The Woz: Blockchain might be a bubble, but it’s on the right track (AltFi News) Rated: A

The ‘Woz’ also offered thoughts on digital banking and artificial intelligence.

He said that online banks ‘just aren’t as secure’ as their incumbent rivals, referencing a time that his own crypto-currency holdings, or a portion of them, were stolen from a digital bank.

Real Estate Startup FlyHomes Raises $ 17m in Series A Funding (Finsmes) Rated: A

FlyHomes, a Seattle, WA-based real estate startup, raised $17m in Series A funding.

The round was led by Andreessen Horowitz, with participation from Mark Vadon and Shasta Ventures, among others.

The company intends to use the funds to increase deployment of its Cash Offers program, accelerate hiring, invest in further product development, and drive new market expansion in Seattle, San Francisco, Chicago and Boston.

IDology Study Reveals Consumer Insights on Digital Identity Fraud (IDology) Rated: B

Key consumer behavior trends and other major findings identified in the IDology Consumer Digital Identity Studyinclude:

  • Fraud concerns are impacting consumer choices online, with 83 percent surveyed having extreme to moderate concern that their identities will be used to fraudulently open accounts.
  • Consumers view biometrics, knowledge-based authentication and one-time passcodes as the most secure methods of authentication. Overall, 90 percent of consumers are comfortable answering knowledge-based authentication questions to verify their identities but prefer demographic-based questions over credit-based questions two to one.
  • Fifty-six percent of consumers report that they are more likely to choose a financial institution if they know it offers advanced identity verification methods.
  • When opening an account online, consumers place a premium on security (88 percent) and ease (72 percent), with 31 percent reporting they have abandoned signing up because it was too difficult or took too long. This reveals that more than ever, consumers are looking to do business with companies and financial institutions that have minimal friction as part of their overall service experience, along with assurance that their transactions and identities are secure.

Despite worries, America’s small business owners bullish on economy (Bankless Times) Rated: A

According to the survey, 53 per cent and 52 per cent respectively of small business owners named (1) the cost of providing health insurance for employees and (2) the effect of changes in the new tax law as key business considerations. What’s more, 35 per cent of respondents report the new tax plan has already caused them to make changes in their business, with 10 per cent reporting that they are actively investing in new equipment or staffing.

Cross River Hires Veteran Banker To Lead SBA Loan Practice (PR Newswire) Rated: B

Cross River, a leader in the emerging Fintech industry, has hired Kevin Gallagher, an accomplished small business lending specialist, to head its Small Business Administration loan division.

Gallagher joins Cross River from Empire State CDC: The 504 Company, where he led business development efforts around various SBA loan products and community lending products. Prior to that, he served as national sales director for SBA-related programs at Customers Bank and Citibank.

United Kingdom

TransferWise’s next partnership could be with U.K. challenger bank Monzo (Tech Crunch) Rated: AAA

According to sources, the international money transfer service and European unicorn is working with the fast-growing U.K. challenger bank Monzo.

The tie-in will likely see TransferWise functionality offered within Monzo’s mobile banking app, courtesy of the TransferWise API. It will give Monzo’s 700,000 customers the ability to send money in various supported currencies at the ‘mid market’ rate in addition to TransferWise’s low and transparent fees.

A partnership with U.K. challenger bank Starling was also announced last year, but integration with the bank’s app never materialised and TechCrunch learned last week that the partnership has now dissolved entirely. That is particularly noteworthy given that Monzo and Starling are direct competitors with an interesting shared history, shall we say.

10x Banking Founder on Why FinTech Is the Future (Bloomberg) Rated: AAA

Sphonic to partner with Paysafe on digital wallet services (Peer2Peer Finance) Rated: A

DATA and risk management specialist Sphonic has been chosen to provide digital wallet services to global payments provider Paysafe Group.

Sphonic, which works with peer-to-peer lenders including Funding Circle and Zopa, supplies data networking services.

These include customer on-boarding, anti-money laundering, know your customer, fraud detection and monitoring as well as authentication.

Automated financial advisor Multiply raises £1.75 million (Finextra) Rated: A

Multiply, the UK’s first fully-automated independent financial advice service, has secured investments totaling £1.75 million, led by Octopus Ventures.

Octopus Ventures, the early stage investor, invested £1 million, and was joined by Portag3 Ventures LP and Entrepreneur First to support Multiply’s development and roll-out of their beta consumer facing product. Angel investors include Nick Hungerford, former CEO of Nutmeg, Taavet Hinrikus, CEO and co-founder of TransferWise, Peter Rading, Michael Orland and Toby Moore.

China

Ant Financial is shifting its focus from finance to tech services (CNBC) Rated: AAA

Ant Financial Services, the dominant Chinese fintech company, is shifting its main focus to technology services and away from payments and consumer finance as Beijing’s crackdown on financial risk deepens, four sources with knowledge of the matter said.

But in five years, technology services will make up 65 percent of Ant Financial’s revenue, compared with an estimated 34 percent in 2017, according to confidential company projections viewed by Reuters. That would involve helping banks and other institutions with services like online risk management and fraud prevention.

Mao is Laughing: Capitalists Pour Money into Chinese Companies (Nasdaq) Rated: AAA

Over the past week, two private Chinese technology unicorns, Xiaohongshu (“Little Red Book”) and Sensetime, announced that they had raised nearly $1 billion, adding to the ranks of large Chinese enterprises thinking about going public. Another Chinese company is scheduled to IPO in June, 3 recently selected bankers (a key step for launching an IPO) and 11 have already gone public for a total of 15 year to date, compared to 15 in all of 2017.

Year to date, the 11 Chinese companies are up 39%, compared to only 3% for last year’s vintage. HUYA, a leading live streaming platform for video games, is up 147% since its May 10, 2018 IPO, followed by another video streamer, IQIYI, up 62%. Last year’s big winner was tiny filter maker Newater, up 177%, followed by online lender Lexin Fintech, up 73%, while more than half of its 2017 comrades are under water.

China’s fintech startup Caogen Touzi secures $ 358m Series D round (Deal Street Asia) Rated: A

Hangzhou-based fintech platform Caogen Touzi has closed an RMB 2.3 billion ($357.8 million) Series D round led by Shanghai-listed Geo-Jade Petroleum, a property development and oil and gas firm, and other investors.

In a security filing, Geo-Jade Petroleum said it will invest no more than RMB 500 million ($78 million) in Caogen Touzi.

Caogen Touzi told Kr36 that the firm will focus on tapping the rural finance market in the future and use the funds for business development.

Fintech Company Pintec Raises $ 103M in Equity Funding (Finsmes) Rated: A

Pintec, a Beijing, China-baased independent technology platform enabling financial services, raised US$103m in financing.

The round was led by Mandra Capital and SINA Corp., with participation from STI Financial Group, Shunwei Capital Partners and ZHONG Capital Holding Group, among others.

The company intends to use the funds to increase investment in R&D, traffic integration, risk management and operations.

European Union

N26 passes million customer milestone (Finextra) Rated: AAA

We are very excited to announce that N26, that’s us, now has over a million customers.

To celebrate we put together a look at how customers help us transact €1 billion a month. Before continuing though, we’d like to mention that while we do look at aggregated data, we never look at individual data unless explicitly asked to do so.

ING pushes for open banking with SME financing platform and Yolt expansion (Fintech Futures) Rated: AAA

ING is launching a marketplace for SME financing in the Netherlands, which will open to other external financing providers, becoming the first Dutch bank in doing so.ING is keen to maximise the possibilities of open banking and is working with Yolt and Funding Options on bringing new features to customers across Europe.

ING is also expanding its money management capabilities offered to consumers with the launch of Yolt in France and Italy.

Fintech Company FinCompare Raises €10M in Series A Funding (Finsmes) Rated: A

FinCompare, a Berlin, Germany-based fintech company, raised €10m in Series A funding.

The round was led by ING Ventures with participation from Speedinvest and Uniaq Ventures.

The company intends to use the funds for the expansion of the team, investment in IT and further growth.

Challenger bank Banco BNI Europa selects Alterestfor effortless loan data management (Banco BNI Europa Email) Rated: B

Banco BNI Europa and Alterest, an innovative loan data and intelligence platform, publicly announced today their partnership to streamline investment analytics and risk management between the bank and its credit originating partners. Initiated in Oct, 2017, the partnership comprised of data-feeds integration with tech-enabled lending platforms, implementation of a reconciliation process between operations and nostro accounts, and configuration of an IFRS9-compliant impairment calculation model.

Euro MPLs growing, but securitization a ways off (GlobalCapital) Rated: A

The marketplace lending sector in Europe is growing, with a sharp focus on the small to medium sized enterprise segment, but it is still lagging UK and the US markets and lenders will need to ramp up scale and educate investors before a meaningful pipeline of securitization can build

A panel on focused on European marketplace lenders on day one highlighted the risks and the challenges facing the sector. Speakers hit on some well tread talking points, such as the availability of data on underlying loan portfolios and the lack of performance history.

International

FusionFabric.cloud platform changes the way software is developed, deployed and consumed in the financial world (Finastra) Rated: A

Finastra announced the availability of the three core components within its FusionFabric.cloud platformfor open innovation:

  • FusionCreator – A rapid development environment for financial applications with low-code capabilities and integrated API management tools
  • FusionOperate – A management system to deploy and operate applications in a secure cloud infrastructure
  • FusionStore – An online marketplace for banks to search, try and buy applications

FusionFabric.cloud already has over 60 Fintechs and providers signed up.

The AI and robo-advice questions you should be asking (Professional Adviser) Rated: A

Automated advice, robo-adviser, machine learning, AI-enabled expert advice, robo-advice digital journey, hybrid machine/adviser solution … in a very short space of time the advisory sector has coined a significant amount of terminology for robo-advice.

Being properly informed about these issues and asking the right questions of a provider can make an enormous difference in levels of investment.

Australia

Prospa float postponed as ASIC queries small business loan terms (Australian Financial Review) Rated: AAA

Small business lender Prospa says it has taken a conservative approach in delaying its $576 million ASX float by two days, in order to respond to renewed concerns from the corporate regulator that its standard form contracts may contain unfair clauses in breach of consumer laws.

New build financing gap boosts Southern Cross (Good Returns) Rated: AAA

Peer to peer lender Southern Cross Partners has seen an increase in investor demand as first time buyers struggle to finance new-build properties.

The lender says it experienced a 10-20% increase in investor demand last year amid a lack of available funding for the construction and sale of new homes.

Mortgage group’s “mortgage hell” billboard above CBA (Australian Broker) Rated: A

Online mortgage startup HashChing is advertising with a billboard above a Commonwealth Bank of Australia (CBA) branch.

The home loan marketplace has launched a campaign against the big banks, which includes this billboard in the Melbourne CBD. The slogan reads, “Our brokers will go to mortgage hell, so you don’t have to”.

MENA

Israeli fintech co BlueVine Raises $ 60m (Globes) Rated: AAA

Israeli alternative business lending company BlueVine today announced that it has closed $60 million iSeries E financing round led by Menlo Ventures, and including new investors, such as SVB Capital. All major existing investors also participated. Including this financing round, the company has raised $533 million to date including $128 million in equity financing and $405 million in debt financing. This latter figure included $200 million raised from Credit Suisse two months ago.

The new financing will support BlueVine’s plan to expand its highly-successful invoice factoring and business line of credit products, and to explore new products catering to small and medium-sized businesses. BlueVine also plans to use the funding to accelerate R&D hiring.

Asia

Indonesia’s coming digital disruption (The Business Times) Rated: AAA

INDONESIA’S digital economy is set to boom, helping its overall economy expand from US$1 trillion in 2017 to US$2.7 trillion by 2027.

Over the next 10 years, we expect online retail in Indonesia to increase 14-fold from just US$4.4 billion in 2017 to US$63.2 billion, or 19 per cent of total retail sales versus 3 per cent currently.

To support this growth, as well as the rise in e-services such as ride hailing, travel bookings and food delivery, we expect an equally rapid adoption of e-money from just 2 per cent of nation-wide transactions in 2017 to 24 per cent by 2027.

We are also seeing the emergence of fintech solutions such as peer-to-peer lending targeting the 44 per cent of the population who do not have access to banking services today.

Thierry Sanders, CEO Of Mekar (Indonesia Expat) Rated: A

We’ve shifted our activities and are now mainly financing women’s businesses. Lending to women is safer in Indonesia. Statistics show that five percent of male borrowers, on average, will not pay back. With our female borrowers, it’s only 0.5 percent. Which is why we chose to focus on women. They also have a harder time getting financed. Now, 95 percent of the businesses we finance are women’s businesses.

Caribbean

ECCB advises caution regarding non-traditional financial services (St. Lucia Times) Rated: AAA

The Eastern Caribbean Central Bank (ECCB) is aware of the emergence of several initiatives which compete directly with traditional financial services. These include but are not limited to: peer to peer lending, digital wallets, crowd funding ventures, crypto-assets and initial coin offerings (ICOs) in the Eastern Caribbean Currency Union (ECCU).

Authors:

George Popescu
Allen Taylor

Tuesday June 5 2018, Daily News Digest

Delinquency and cumulative loss on 60 month loans

News Comments Today’s main news: Revolut to seek U.S. banking license. SoFi former venture head to raise $150M fintech fund. BBVA invests 85.4M GBP in Atom Bank. China Rapid Finance receives SO27001 certification. Lendix raises $37M. Today’s main analysis: U.S. economic outlook, according to TransUnion. Today’s thought-provoking articles: Millennials are set to be next wave of single family rental […]

Delinquency and cumulative loss on 60 month loans

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

British fintech startup Revolut to seek U.S. banking license (Reuters) Rated: AAA

British financial technology startup Revolut plans to apply for a banking license in the United States, Chief Executive Officer Nikolay Storonsky said on Monday.

The company, launched in 2015, could apply by the end of the year in California, Storonsky told Reuters in an interview at the sidelines of a fintech conference in Amsterdam.

Debate on Consumer Credit Health, TransUnion Summit (Peer IQ) Rated: AAA

Source: Peer IQ

US Economic Outlook from TransUnion Financial Services Summit 2018

  1. Short-run GDP growth rate will be around 3%, driven by consumer spending and stimulus from the tax reform act. However, over the long-term, GDP growth will be hampered as the economy’s resources are approaching full employment, low trend productivity growth, and fading (and reversing stimulus) effects of tax reform.
    Source: Peer IQ
  2. Long-range inflation expectation is ~2% which would put a natural ceiling on the neutral Federal Funds Rate and the number of Fed hikes.
  3. As the Fed raises rates and tapers the reinvestment of its balance sheet, the 1-5 year part of the treasury curve will be most affected, as that’s where the majority of the Fed’s holdings lie. This should lead to a flatter yield curve and put pressure on refinancing of corporate debt, most of which is benchmarked to the less than 5-year part of the yield curve. Rising rates will also cause the debt-laden US consumer to slow down spending as a larger portion of income goes towards debt service.
  4. Tight lending standards and economic strength have brought down the delinquency rates in all asset classes except auto loans. Delinquencies in auto loans have picked up recently to 4.3%, with subprime auto doing worse.
    Source: Peer IQ
  5. US GDP growth has been aided by strong tailwinds in the form of stimulus from tax reform, low interest rates, and strong credit growth. As interest rates rise and consumer credit growth slows, investors need to keep an eye on economic fundamentals before making investment decisions.

SoFi’s Ex-Venture Head to Raise $ 150 Million Fintech Fund (Bloomberg) Rated: AAA

Social Finance Inc.’s former head of ventures and corporate development, Logan Allin, is raising a $150 million fund to invest in early stage financial technology firms in the U.S. and abroad, including Asia, Europe and Israel, according to people familiar with the matter.

Fin Venture Capital plans to invest in companies that will spin out of top fintech firms, like SoFi, Affirm Inc. and Stripe Inc. and sectors like real-estate technology, insurance technology and alternative lending. The venture firm will also look for corporate blockchain applications, but not investments in cryptocurrencies, the people said.

How student loan companies pretend to be your friend (The Guardian) Rated: A

This month, banking company Laurel Road announced that if you refinance your student loan with them, they will give you a year’s membership to MoviePass, the movie theater subscription service.

The partnership shines a light on the growing market for private student loans. Private lenders currently hold less than 10% of the $1.4tn in outstanding student loan debt but have been aggressively lobbying for legislation that would loosen the government’s monopoly.

Social Finance Inc (SoFi), one of the most high-profile private financial startups in the US, has led the charge in this regard.

Education Loan Finance Launches $ 50,000 Contest to Pay Off Student Loans (Digital Journal) Rated: A

Education Loan Finance (ELFI), a division of SouthEast Bank, focusing on student loan debt refinancing and consolidation, announces the launch of a video contest where the winner will receive a $50,000 cash prize towards their student loan debt.

According to the Brookings Institute, more than 44 million Americans have student loans that total nearly $1.4 trillion. Student loan debt is now the second-largest source of household debt in the U.S. after home mortgages.

Eloan Personal Loans Review: Fast Loans in As Little As a Day (Student Loan Hero) Rated: A

According to TransUnion, fintechs, or online lenders that use financial technology to streamline the lending process, originated 32% of personal loans in the first six months of 2017.

The rates on your loan will depend on your creditworthiness, as well as your loan amount and repayment terms. Here are the ranges you can expect depending on your credit score:

  • Excellent: 5.49% to 10.49%
  • Very good: 10.49% to 13.49%
  • Good: 13.49% to 16.49%
  • Pretty good: 16.49% to 19.49%
  • Fair: 19.49% to 35.99%

Eloan looks beyond your credit score

Your credit score isn’t the only factor at play when Eloan reviews your application. The lender also looks at your debt-to-income ratio, length of credit, and debt repayment history before making a final decision.

Tom Burnside of LendingPoint (Lend Academy) Rated: A

In this podcast you will learn:

  • Tom’s background building databases and credit systems.
  • The founding story of LendingPoint.
  • The loans terms that LendingPoint offers for their loans.
  • The kinds of data they use for underwriting.
  • How they are using technology to run their underwriting and elsewhere in their business.
  • What was behind their decision to acquire LoanHero, the point of sale platform.
  • How they have integrated LoanHero into their company.
  • How they closed the additional $600m credit facility from Guggenheim.
  • Tom’s thoughts on what we are doing well and what are we doing poorly as an industry.
  • What they are working on at LendingPoint for the future.

Fintech startup SpotOn almost tripling staff this year as it squares off against Square (San Francisco Business Times) Rated: A

SpotOn, which started the year with 150 employees, now has a workforce of about 250 people, working at the company’s Financial District headquarters or in a Chicago office. SpotOn said it expects to have 400 employees by year-end.

SpotOn offers credit card processing services and a range of other services to small and mid-sized merchants, pitting the upstart against Square (NYSE: SQ).

Retail Banking Company Chime Raises $ 70M in Series C Funding (Finsmes) Rated: A

Chime, a San Francisco, CA-based retail banking company, raised $70m in Series C funding.

The round, which has valued the company at about $500m, was led by Menlo Ventures, with participation from Forerunner Ventures, Aspect Ventures, Cathay Innovation, Northwestern Mutual, Crosslink Capital, and Omidyar Network.

Fifth Third adds new fintech partner to enhance service for corporate clients (American Banker) Rated: B

Fifth Third has struck a strategic partnership with Intellect Global Transaction Banking, a unit of Intellect Design Arena that has its U.S. headquarters in New Jersey.

Why Millennials Are Poised To Be The Next Wave Of Single Family Rental Investors (Forbes) Rated: AAA

While it may be a surprise given the stereotypes surrounding the millennial generation, research from the National Association of Realtors found that millennials continue to be the largest group of homebuyers, representing 65% of all first-time homebuyers last year. According to TD Bank, 

TD Ready Challenge launches (Finextra) Rated: B

TD today launched the TD Ready Challenge, an annual North American initiative that has ten $1 million (CDN) grants available to help catalyze innovative solutions for a changing world.

United Kingdom

BBVA Announces Completion of £85.4 Million Investment in UK-Based Atom Bank (Crowdfund Insider) Rated: AAA

On Friday, BBVA announced it has completed the £85.4 million investment into Atom, which was announced in March of this year. According to the firm, With this transaction, it increases its stake in UK’s first bank built exclusively for smartphone or tablet to 39%. Atom also secured capital from some other shareholders, bringing the total capital raised to £149 million.

BBVA added that the new investment will allow Atom to continue its impressive growth, and support the uptake of new clients and build core capabilities.

P2P lenders prepared for new data rules (Peer2Peer Finance) Rated: AAA

PEER-TO-PEER lending platforms have welcomed the new General Data Protection Regulation (GDPR) and confirmed that their processes meet with the new EU standard.

A RateSetter spokesperson told Peer2Peer Finance News that the firm “has implemented a comprehensive cross-departmental project to ensure [we are] compliant with new data protection legislation,” while Landbay chief executive and co-founder John Goodall said that “we view GDPR as an opportunity to further build customer trust and confidence and continue to offer quality information to our customers.”

Light at the end of the tunnel for green energy P2P lenders (Peer2Peer Finance) Rated: A

RENEWABLE energy is in the midst of a “turnaround”, according to Trillion Fund’s chief executive, which could benefit the peer-to-peer lending sector.

Theresa Burton heads up the wound-down green energy P2P platform, which closed to new investment in 2015 after government subsidies for the sector were cut.

P2P lenders show there’s life outside London (Peer2Peer Finance) Rated: A

P2P lenders headquartered around the UK’s regions are demonstrating impressive growth, while helping create employment in other parts of the country.

One example is Manchester-based Assetz Capital, which recently passed the £500m lending milestone.

Meanwhile, Edinburgh-based P2P lender LendingCrowd recorded its best-ever month for completed loan deals in May.

Businesses should mind the scale-up gap (Spear’s) Rated: A

While some £8.27 billion was poured into SMEs last year versus £3.9 billion in 2016, 81 per cent of these deals took place at the seed and start-up stages. Of the 35,210 ‘scale ups’ – defined as companies posting annual growth above 20 per cent (across three years) with turnover between £1-20 million and ten or more employees – a mere 1,505 received investment. Furthermore the number of investment deals has plateaued over the last five years for these firms, at around the 20 per cent of investment.

The report from the Supper Club, an entrepreneurial network and advocacy group, shows that over the last five years the number of SME investment deals has risen from 1,010 in 2013 to 1,500 — a 50 per cent rise. The corresponding increase in the ‘scale up segment, however, was under 20 per cent, with the number of deals going from 260 to 280.

China

China Rapid Finance Receives ISO27001 Certification (PR Newswire) Rated: AAA

 China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE:XRF), operator of one of China’s largest consumer lending marketplaces, today announced that it achieved ISO/IEC 27001:2013 Certification (“ISO 27001”), the international standard that describes best practices for an information security management system (ISMS). Certification to ISO 27001 demonstrates that the company has adopted internationally-recognized standards to ensure borrowers and investors on its marketplace benefit from the highest level of data protection.

China’s debt collectors focus in on $ 200bn P2P debt pile (Financial Times) Rated: A

An estimated Rmb1.3tn in outstanding P2P debt as of May, according to online lending intelligence firm Wdzj.com, and a rising number of defaults have opened the door to a wave of start-ups using new technologies to try to recover tardy loans.

Ziyitong, which has sought to recover Rmb150bn since it was set up in 2016, recently launched an AI platform to help recover delinquent loans for some 600 debt collection agencies, and more than 200 lenders including Alibaba Group and Postal Savings Bank of China, Ms Sheng said.

European Union

Lendix raises $ 37 million for its lending marketplace (Tech Crunch) Rated: AAA

French startup Lendix has raised a new funding round of $37 million (€32 million). With this new influx of cash, the startup has one goal in mind. It wants to become the leading lending marketplace of Continental Europe.

Idinvest and Allianz are leading the round, with CIR SpA (De Benedetti’s holding firm) also participating. Existing investors Partech, CNP Assurances, Decaux Frères Investissements and Matmut are also participating once again.

Next year, Lendix  plans to operate in 7 countries.

BBVA teams up with Fintonic on loan marketplace (Finextra) Rated: A

Today the Spanish Fintech announced at the Money20/20 Europe event that BBVA has signed up to be part of the Fintonic loans platform, that processed the entire loan procedure for amounts of up to 30,000 euros without you having to leave the app, regardless of the institution providing the loan.

In addition to BBVA, other large banks and financial companies such as EVO Finance, Wanna, WiZink or Zaplo have partnered with the Fintonic loan platform. To date, the platform has processed over 7,500 loans for users, with a total volume of over 30 million euros and an average of 3,850 euros per contract.

First nine startups selected for EBAday2018 Fintech Zone (Finextra) Rated: B

Now in its thirteenth year, EBAday, a conference built by bankers for bankers, is expected to attract 1500 banking professionals and 70 exhibitors to the Munich, Germany conference on 12-13 June.

With interest in digital banking and fintech at an all-time high, the EBAday Fintech Zone will provide a dedicated space for innovative startups to network with and demonstrate their products to payment heads from across the European banking industry.

The first nine firms selected for this year’s Fintech Zone touch on many of the critical elements currently driving the digital agenda of banking and payments, from P2P payments to marketplace lending, Open APIs and artificial intelligence.

International

Personetics Accommodates Digital-Only and Challenger Banks (Finovate) Rated: A

Cognitive analytics company Personetics has traditionally served large banks, including six of the top 12 banks in North America and Europe. Today, however, the company launched a new offering that makes its solutions more accessible for smaller digital-only and challenger banks.

  • Pre-built banking content: The offering includes hundreds of pre-built insights, financial tips, and personalized advice that the bank can easily modify and control
  • API-first approach: Personetics uses open APIs to integrate AI functionality into a bank’s digital banking experience and allows banks to create their own brand identity and customer engagement strategy.
  • Editing tools: These tools allow the bank to retain control over the content and develop new capabilities to support its own business goals.
  • Fast time-to-market: Personetics delivers a production-level solution in just three months.
Australia

Online lenders challenging the big banks (Rate City) Rated: AAA

As the RBA leaves the cash rate on hold, new research has revealed the average home loan customer could save $82K by switching from a big four bank, to a low rate online lender.

New calculations show a family with a $350K loan looking for a fully-featured mortgage, could save up to $82,118 over the life of their loan, by going with the lowest comparable online lender, instead of a major bank.

Online lenders facts

  • Around 30% of lenders in the RateCity database are online.
  • Australia’s fifth largest home loan lender is online only (ING).
  • Nine of the 10 lowest rate lenders in our database are online lenders.

5 killer EOFY home loan deals (Mozo) Rated: A

loans.com.au Essentials Variable 80

  • 3.64% variable rate (3.66% comparison rate*)
  • No application or annual fees
  • Free extra repayments and redraw facility

Looking for a no fuss mortgage option offering up superb value? Look no further than the  Essentials Variable home loan from popular Aussie online lender loans.com.au. With a super low rate, no upfront or ongoing fees and the option to choose weekly, fortnightly or monthly repayments, this loan is easy on the hip pocket. You can also opt to split your loan between fixed and variable rates to find the perfect balance between certainty and flexibility.

India

CoinTribe, a MSME Lending Marketplace, Raises $ 10M from Sabre Partners and Existing Investors (Disrupt) Rated: AAA

CoinTribe, Gurugram headquartered credit based lending marketplace for MSMEs, has raised over $10 million equity capital in Series-B round led by Sabre Partners along with participation from existing investor, Puneet Dalmia.

With this round of funding, total equity capital raised by CoinTribe has increased to over $15 million. CoinTribe plans to use this additional capital to further enhance capabilities of its proprietary online credit algorithm, expand to new markets and further develop technology to enable faster and nimble product and credit model innovation.

Asia

How can new crowdfunder GlobalSadaqah improve transparency, impact of Islamic social finance? (Salaam Gateway) Rated: A

Umar and Ethis Ventures are behind Ethis Crowd, the world’s first Islamic real estate crowdfunding platform that raises funds for social housing development projects in Indonesia. These projects are backed by the Indonesian government. Ethis Crowd began with retail crowdfunding and moved into the institutional space when it started working with Islamic banks and large investors.

Ethis is also behind Kapital Boost, which crowdfunds financing for small and medium-sized enterprises.

In Southeast Asia, The Fintech Era Is Just Starting (Thailand Business News) Rated: A

In Indonesia, for example, Go-Pay and a number of other apps target the 51 percent of folks without bank accounts by providing cash transfers. Meanwhile, a bank called Mandiri allows people to avoid having a bank account entirely, instead letting them link their e-wallet to a mobile phone number. The wallet is topped up at kiosks and stores around the country. You can even withdraw money from your e-wallet via a Mandiri ATM.

For Indonesia’s Investree, it works like this: a small business is waiting to be paid by a client, but that won’t happen until the end of the month. So Investree lenders immediately pay the business owner the invoice amount.

Latin America

Brazil online lender Agibank says IPO may raise around 2.5 bln reais -filing (Reuters) Rated: AAA

Brazil’s online lender Banco Agibank SA set on Monday the price range for its initial public offering between 13.87 reais ($3.70) and 16.96 reais per share, according to a securities filing.

Agibank’s shareholders and the bank may raise around 2.5 billion reais in the offering, considering the mid-point of the price range, 15.41 reais. The pricing is scheduled for June 21. ($1 = 3.7447 reais) (Reporting by Carolina Mandl; Editing by David Gregorio)

Authors:

George Popescu
Allen Taylor

Thursday March 1 2018, Daily News Digest

JPMorgan

News Comments Today’s main news: RateSetter opens IFISA to new investors today. Amazon customers would bank with e-tailer. Zopa’s VC firm raises 500K GBP in 24 hours. Collateral goes off line. Auxmoney hits profitability. Credy raises $1.4M. Today’s main analysis: Is JPMorgan’s tech investment paying off? Today’s thought-provoking articles: Presenters at LendIt Fintech USA 2018. Klarna’s end-of-year report. Asia’s fintech investment drops. […]

JPMorgan

News Comments

United States

United Kingdom

European Union

International

Asia

Canada

News Summary

United States

Many Amazon customers would welcome banking services (RetailDive), Rated: AAA

  • More than half of 1,000 U.S. Amazon customers recently surveyed said they would be willing to use an Amazon-created virtual currency for purchases, according to a survey conducted by student loan marketplace LendEDU.
  • Among other findings, the survey (which questioned consumers, including some Amazon Prime members, that made purchases on Amazon within the previous 30 days) found that 44.5% said they would also keep their primary bank account with Amazon if the e-commerce giant offered such a service.
  • Furthermore, about half of respondents said they would seek personal loans from Amazon if they were available, and roughly 45% said they would use an auto loan offering from the company. Another 30% claimed they would be ready to take out an Amazon-created mortgage.

Broad Mix of Thought Leaders to Present at LendIt Fintech USA 2018 (Lend Academy), Rated: AAA

Lending

  • Jay Farner, CEO, Quicken Loans
  • Max Levchin, Co-Founder & CEO, Affirm
  • Anthony Noto, CEO, SoFi
  • Renaud Laplanche, CEO, Upgrade

Digital Banking

  • Yolande Piazza, CEO, Citi FinTech
  • Suresh Ramamurthi, Chairman & CTO, CBW Bank
  • Luvleen Sidhu President, Co-Founder & Chief Strategy Officer, BankMobile
  • Jeremy K. Balkin, Head of Innovation, HSBC Bank USA
  • Nicolas Kopp, U.S. CEO, N26 Inc.

Blockchain for Financial Services

For 2018 we looked at one of the biggest new trends in financial services, blockchain and decided to create an event within our event. We are debuting our new blockchain event Blockfin by LendIt.

  • Tim Draper Founder & Managing Director DFJ
  • Richard Craib, CEO, Numerai
  • Tom Ding, Co-founder & CEO, String Labs/Dfinity
  • Vincent Wang, Chief Innovation Officer, China Wanxiang Group
  • Kathleen Breitman, Co-Founder, Tezos
  • Catherine Wood, CEO/CIO, ARK INVEST

Will JPMorgan’s splashy tech investment pay off? (American Banker), Rated: AAA

“Retail distribution is like a muscle,” Chief Financial Officer Marianne Lake said in discussing the company’s recently announced plan to open 400 branches in up to 20 new markets. “You have to exercise it or it goes to waste.”

Nonetheless, the New York megabank raised eyebrows when it said it would invest an additional $1.4 billion in technology in 2018 — the driving factor in projections for noninterest expenses to rise 6% in the year ahead.

Fintech Platform Current Announces Strategic Investment from Fifth Third (Crowdfund Insider), Rated: A

Current, the fintech platform that allows teens to connect their money with the people, brands and experiences they value, announced on Tuesday that Fifth Third Capital, a direct equity investment subsidiary of Fifth Third Bancorp (NASDAQ: FITB), has joined the recently announced Series A funding, led by QED Investors.

Leasing App Honcker Plans Expansion With $ 23M Funding From IAC (Auto Finance News), Rated: A

Vehicle leasing startup Honcker secured $23 million in series A funding this week and is using the capital injection to expand nationwide and bring some added features to its app, founder and Chief Executive Nathan Hecht told Auto Finance News today.

InterActive Corp. (IAC) — the media investor behind Investopedia, Tinder, Vimeo, and many others — is making its foray into the vehicle marketplace with this funding round to take a minority stake in the company. Honcker partners with dealers and plugs into their existing lender network to provide an online leasing marketplace.

How Are Fintech And Proptech Changing The Real Estate Industry In 2018? (Forbes), Rated: A

2. Ability To Reach New Investors Online

The ability to raise capital online and reach new accredited investors through online portals is still in its infancy.

5. Data Analysis To Drive Investment Decisions

Really use data analysis to drive your investment decisions, don’t just look at the headlines. Utilize big data and predictive analytics to dig into what is responsible for the migration of renters, and what those renters are seeking in their new apartment.

7. Reduced Friction In Buying, Owning And Selling

We are constantly pushing to incorporate or develop technologies to improve our business and customer experience by reducing cost, friction and time, as well as improve transparency and security. Some of these we develop ourselves, like application of machine learning and AI to develop a national neighborhood rating system. Others we adopt, like animated 3D visualization software. –

LA tech startup InvestFar’s innovative platform spearheads globalization of real estate investing (Digital Journal), Rated: A

Rising LA startup InvestFar; recently launched its signature mobile app to help aspiring investors with informed investment decisions. Titled as “InvestFar”, the app is the first platform to boast all the tools and resources needed for successful investments in long-distance or local markets nationwide.

Built in LA, this real estate tech startup is on a path to innovating how real estate and investors in this industry scale and manage their investments beyond local markets, especially in markets like Los Angeles, San Francisco and New York – where we often see inflated housing prices and shrunken inventory given increasing foreign investment.

Small construction companies lukewarm on tech investment (ConstructionDive), Rated: A

  • A recent customer survey from small business funding siteKabbage revealed that fewer than 35% of small construction companies planned to make investments at some level this year in technologies that could help their businesses and further bring them into the digital age.
  • More than 65% of contractors who responded to the study did not have a plan to invest in tools like big data solutions or mobile technologies, and the same percentage was either neutral, against or not likely to spend more than 20% on social media advertising.
  • Kabbage also found that even with well-publicized cyber attacks and other computer-related crimes, not even 40% of small construction firms planned to invest in cybersecurity.

ACA International Responds to Misleading ACLU Report on Debt Collection Industry (ACA International), Rated: B

Last week, the American Civil Liberties Union (ACLU) released a misguided and heavily misleading report accusing private debt collectors of using the criminal justice system to “punish” and “terrorize” consumers. This is absolutely false and undermines the commitment and integrity of the professional debt collection industry.

Legitimate debt collectors work with consumers to help recover outstanding debt on behalf of businesses, nonprofit organizations and governmental entities.

Tiny Kansas bank bets big on fintech (American Banker), Rated: B

Nbkc bank in Overland Park, Kan., is comfortable sitting at the same table as many of the banking industry’s biggest innovators.

The $632 million-asset bank, a unit of Ameri-National Corp., recently participated in a $16 million investment in Greenlight Financial Technology, which offers debit cards for kids that parents can control from their phones. Other investors included the Amazon Alexa Fund, SunTrust Bank and Ally Financial.

United Kingdom

RateSetter to open IFISA to new investors on Thursday (P2P Finance News), Rated: AAA

RATESETTER is opening up its Innovative Finance ISA (IFISA) to new investors on Thursday, meaning that two out of the ‘big three’ lenders will be offering the tax wrapper outside of their existing customer base.

Industry onlookers argue that the IFISA will only begin to move into the mainstream once the largest P2P platforms offer the product to new investors.

VC firm behind Zopa raises £500,000 for fintech fund in just 24 hours (P2P Finance News), Rated: AAA

A FINTECH venture capital firm that has a stake in Zopa has surpassed a £500,000 fundraising target for a new investment company in the first 24 hours.

Augmentum Capital, which has a 7.4 per cent holding in peer-to-peer lender Zopa worth £18.5m, is looking to raise £100m through an initial public offering (IPO) alongside a crowdfunding listing on Seedrs.

What’s Up at Collateral? (P2P-Banking), Rated: AAA

A question concerned investors have been speculating on for over 36 hours now, since the website of UK p2p lending platform Collateral went down around 7pm two days ago and is showing a maintenance message. Investors criticize that there was no pre-announcement of this maintenance and worse that Collateral seemed to have ceased all communications to investors and did not react to any phone or email messages.

With no communications from the platform whatsoever investors wondered what to do. Some investors reported the incident to ActionFraud squad of the police while another contacted the FCA to voice his concern and seek advice.

1) How should a p2p lending platform communicate in a crisis?

In my view not communicating at all is the worst choice.

2) What can concerned investors actually do to react, if the platform is seemingly unreachable/unresponding over a longer period of time?

Collateral investors in limbo after lender shuts down site (P2P Finance News), Rated: A

Meanwhile, it emerged that the three limited companies listed on the Financial Services Register that have traded under the name of Collateral have not had regulatory permission to operate as a consumer credit business for at least 11 months and have all now been dissolved.

Cash4Assets, which traded under the name Collateral, had cancelled its interim permissions with the Financial Conduct Authority (FCA). A permission end date is given of 23 March 2015.

Regal Pawnbroker, which also listed Collateral as one of its trading names, saw its interim permissions lapse on 31 March 2016.

And Goldmann and Sons saw its interim authorisation lapse on 31 March 2016.

Assetz Capital introduces manual lending Isa (Bridging&Commercial), Rated: A

The P2P lender recently announced it had registered 2,000 investors for its Innovative Finance Isa(IFIsa) since it launched in December last year.

So far, Isa users have invested £14m, with one third coming from transfers from other Isa providers.

Funding for finance start-ups hits all-time high in threat to big banks (The Telegraph), Rated: A

Major fundraisings in the UK last year included digital insurance distributor BGL Group getting $900m, while payments venture TransferWise got $280m. Elsewhere Monzo raised £93m in two separate rounds, while Revolut got $66m.

Britain’s two biggest lenders, Lloyds and RBS, announced £5.5bn worth of investment programmes between them last week, with online banking a primary focus of their spending plans.

Banks scramble to be open as clients shrug (Royal News 24), Rated: A

Open banking, as this particular revolution is known, was introduced on the second weekend of January, forcing Britain’s biggest banks to provide third parties with access to the accounts of any customers who authorise it.

A Citigroup analysis published last week finds three reasons why disintermediation of the established order is likely to be delayed. One is slow consumer adoption. A second is the fragmentation of the market for new “open banking” services in early stages of the regime. The final one is the ability of established payment providers to adapt to the new rules.

European Union

Klarna year-end report January – December 2017 (Cision), Rated: AAA

July – December 2017
● Compared to last year, total sales volume grew by 43%
● Total operating revenues increased 32% to SEK 2,474m (1,868)
● Operating income for the period was SEK 203m (35)
● Net income for the period amounted to SEK 117m (17)

January – December 2017
● Year over year growth in total sales volumes was 42%
● Total operating revenues increased 27% to SEK 4,526m (3,561)
● Operating income amounted to SEK 524m (168)
● Net income for the year amounted to SEK 346m (113)
● 26,000 new merchants, Group total now 89,000
● 19 million new consumers used Klarna this year

Highlights from the year
● Bank license was obtained in June
● BillPay GmbH was acquired in September
● Additional tier 1 capital was raised in May and a senior unsecured bond was issued in September

German fintech lender auxmoney hit profitability in 2017 (AltFi), Rated: AAA

Its origination volumes rose by 75 per cent during the course of the year, with over 40,000 loans and €316 million funded. Auxmoney has now disbursed more than 100,000 loans in its history, with a cumulative funding total of around €700m.

BNI Europa eyeing up further P2P lending deals (P2P Finance News), Rated: A

BANCO BNI Europa is eyeing up further deals in the alternative finance space to diversify its portfolio and widen its product offering for clients.

The Portuguese online bank has announced several funding deals over the past year, including peer-to-peer lenders Funding Circle in Germany and Raize in Portugal, and UK P2P invoice finance platform MarketInvoice.

JSC VIA SMS Group interim twelve month report for year 2017 (GlobeNewswire), Rated: B

The Group has closed the reporting period with a net turnover of EUR 20 141 087 that shows 21,5% increase in comparison with the same period in 2016. The largest net turnover was reached in Spain where the net turnover has increased by 63%; the second largest turnover was reached in Sweden – by 55%, the third – in Poland where net turnover increased by 17% in comparison with data reported to December 31, 2016.  Company’s EBITDA in 2017 has reached EUR 2 779 456 and has ensured the net profit of EUR 835 542.

International

Cerberus Capital Management to Acquire Bluestone Group’s Australasian Operations (PR Newswire), Rated: B

Cerberus Capital Management, L.P. today announced that one of its affiliates has entered into an agreement with Bluestone Group, the international financial services business based in the U.K., to acquire its Australasian mortgage lending and portfolio servicing operations (“Bluestone Holdings Australia”).

India

Credy raises US$ 1.4 million in seed round (Tech in Asia), Rated: AAA

The online lender secured the funding from Y Combinator, Khosla Ventures, and Vy Capital, in addition to several Silicon Valley-based angel investors. It will use the capital to expand its loan book, build partnerships with institutional lenders, enhance its underwriting technology, and hire new team members.

Asia

ASIA SEES MASSIVE DROP IN FINTECH INVESTMENT AS CHINA LOSES MOMENTUM (CFO Innovation), Rated: AAA

Total fintech funding in Asia was US$3.85 billion in 2017—a massive drop-off from the more than US$10 billion invested in 2016 while the amount in Q4 2017 declined to US$748 million across 38 deals after a solid US$1 billion+ in Q3, said KPMG.

Decreased fintech investment in China accounted for much of the decrease in investment in Asia, KPMG explained. According to the firm, China saw just US$45.8 million in investment in Q4’17, while total investment in 2017 was US$1.33 billion.

The top five fintech deals in the region in Q4 are as follows:

  • WeLab (lending firm in Hong Kong): US$220 million, Series B
  • GoSwiff (payments/transactions firm in Singapore): US$100 million, M&A
  • BiWang Group (Institutional/B2B firm in Shenzhen, China): US$100 million, M&A
  • PolicyBazaar (Insurtech firm in Gurugram, India): US$77 million, Series E
  • Onlyou (Institutional/B2B firm in Shenzhen, China): US$45 million, late-stage VC
Canada

Katipult Named Among Industry Giants as Finalist for “Most Promising Partnership” Award (Cision), Rated: A

Katipult Technology Corp. (TSXV:FUND) is honoured to announce that it has been nominated, alongside Polymath Inc., for the Most Promising Partnership Award at the second annual Lendit Fintech Industry awards in April. The Katipult-Polymath partnership will be competing against some of the world’s finance and fintech giants including partnerships involving Goldman Sachs, Macquarie Group, Swedbank, and Lending Club.

National Bank CEO praises federal cybersecurity plan (Financial Post), Rated: A

The chief executive of National Bank of Canada said Wednesday that the federal government’s latest budget included “a big step forward” on cybersecurity.

The federal budget tabled on Tuesday proposed various cybersecurity-related commitments, including $155.2 million over five years so that the Communications Security Establishment could create a new “Canadian Centre for Cyber Security.”

Crypto KABN launches Blockchain-Enabled Biometric ID Validation (Yahoo! Finance), Rated: B

Crypto KABN Holdings Inc. (‘Crypto KABN’ or the ‘Company’) an innovator in financial services, technologies and products for the blockchain industry, is pleased to announce that it is launching a revolutionary Blockchain-enabled biometric validation platform, called ID KABN, as the first component of its suite of financial and technology services, at the FFCON18: Velocity Conference in Toronto on March 5, 2018.

Authors:

George Popescu
Allen Taylor

Friday January 12 2018, Daily News Digest

bitcoin debt

News Comments Today’s main news: More LendingClub-IEG drama.Black Fish raises $145M.Moneygram partners with Ripple.Kreditech expands into India with Mambu. Today’s main analysis: JP Morgan Chase’s investments into digital technology.Is Yirendai undervalued? Today’s thought-provoking articles: Investors go into debt to buy bitcoin.Small business financing trends.How open banking could change how people manage money.Banks, trade finance, and […]

bitcoin debt

News Comments

United States

United Kingdom

China

European Union

International

India

APAC

Africa

News Summary

United States

Lending Club has a bitcoin pivoting suitor (Financial Times), Rated: AAA

Lending Club has all kinds of problems: a history of profit warnings, faint traces of scandal after a management upheaval almost two years ago, and a share price still more than 80 per cent adrift from its peak.

Add to that list: a bizarre, crypto-fuelled activist campaign waged by a Las Vegas-based payday lender called Paul Mathieson, who told authorities in his native Australia that he fled to America in 2008 because he feared being killed by a mobster.

Mathieson’s case for change at Lending Club, laid out in a letter to the company’s board on 2 January, is not a terrible one, on the face of it. He argues that the cost structure at the loss-making company, a pioneer in peer-to-peer lending, is “excessive,” noting fancy headquarters in San Francisco and “hundreds” of “excess” developers. He says that the board should consider a pivot to using its own balance sheet to lend, rather than acting as a broker, taking fees for matching borrowers with lenders. Underwriting has been sloppy, he says, resulting in sub-par returns to investors.

Mathieson is offering 13 shares in his own penny-stock company, IEG Holdings, for every share in Lending Club. At the time of the offer on Monday morning, that was a premium of 19 cents, or about 5 per cent.

Source: Financial Times

SeeThruEquity Issues Update on IEG Holdings Corporation (Bay Street), Rated: A

IEG Holdings Corporation (OTCQB: IEGH) provides online unsecured consumer loans under the brand name “Mr. Amazing Loans” via its website, www.mramazingloans.com, in 20 US states. The company offers $5,000 and $10,000 personal loans over a five-year term at rates ranging from 19.9% to 29.9% APR. IEG Holdings plans future expansion to a total of 25 US states, which would cover 240mn people and represent approximately 75% of the US population.

Since 2013, IEGH has obtained additional state lending licenses, and they are licensed and originating direct consumer loans in 20 states including: Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. The Company was founded in 2010 and is headquartered in Las Vegas, Nevada.

IEG Holdings Plans to Create its own IEGH Crypto/Blockchain Currency Backed by Gold Metal and SEC Registration as a Security

IEGH announced that its wholly owned subsidiary, Investment Evolution Crypto, LLC (“Crypto”), is negotiating to purchase a gold project with gold metal in the ground and prospecting licenses. IEG Holdings plans to utilize a gold resource to investigate creating, through Crypto, and a joint venture with Investment Evolution Corporation, also a wholly owned subsidiary of IEG Holdings, its own gold metal-backed crypto/blockchain currency, and potentially offer loans and accept loan repayments in its own crypto/blockchain currency.

IEGH increases loan originations

The company stated that it provided $960,000 in new consumer loans through its online property mramazingloans.com, from the October 2017 to December 2017 period. This represented a 12.3% increase over its July to September 2017 operating period, during which the company’s new loan originations were $855,000.

Desperate to get into bitcoin, investors slip into debt (CNBC), Rated: AAA

Roughly 18 percent of people who buy bitcoin use a credit card to do so, according to a new survey by loan marketplace LendEDU. Of those, 20 percent have not paid off their balance. The phrase “buy bitcoin with credit” has been trending on Google for weeks.

Another problem with going into debt for cryptocurrencies is that people will have to pay back their debt before they see sufficient returns, said Erika Safran, founder of Safran Wealth Advisors. That may require tapping other resources, potentially creating further financial trouble.

Credit card debt from CNBC.

Small Business Financing Trends To Stay Abreast Of (CXO Today), Rated: AAA

  • Traditional bank loan rejections are notoriously high in all markets
  • Small Business Administration (and equivalent agencies) are nefarious for overextending the time-to-credit tolerances of small businesses
  • Volatility of markets, and exposure of almost all markets to disruption by startups could pose urgent cash needs for businesses, which are generally not considered for loan applications by traditional lenders.

Online Lending And Its Deepening Hold Over The Small Business Finance Market

In 2014, a Federal Reserve (US) survey concluded that one in five small business owners opted for loans from online lenders. Since then, the proliferation of online lending platforms has been on the surge, to the extent that traditional brick and mortar lending institutions have also had to move base to the online domain. In the coming years, multiple factors will result in the success and sustainability of online lending platforms. These include:

  • Growing confidence among small business owners to trust online lending platforms
  • Availability of cheaper, quicker, and more convenient loans
  • Options to truly personalize and customize the loan repayment terms to suit the business’ interests

The Call for Transparency in the Online Lending Market

Though the online lending market has been growing year on year, this doesn’t detract from the concerns around lack of transparency in the way some of these platforms operate. Some of the key concerns are around undisclosed APRs and hidden fees. In fact, some online lenders have been castigated for charging significantly high rates of interests from borrowers, often with service quality issues post-approval. Thankfully, there’s already some progress towards bringing a degree of regulation in place for online lending platforms to be at par with traditional lending regulations.

JPMorgan Chase Competitive Strategy Teardown: How The Bank Stacks Up On Fintech & Innovation (CB Insights), Rated: AAA

JPMorgan is making a bigger push into payments technology as digital banking becomes a strategic priority.

In 2016, the bank spent $9.5B on technology and Dimon has committed $300M alone to improve JPMorgan’s technology for its asset management products. Relative to its peer group, JPM claims the highest number of mobile banking customers and its Chase Mobile app currently sports a 4.7 (out of 5) rating in the App Store.

Earnings call analysis – Barclays, Bank of America, Morgan Stanley talking up digitization

  • JPM discussed continued digital consumer banking growth, which grew 6% in Q3’17.
  • Bank of America spent portions of its Q1’17 and Q3’17 talking about digital banking initiatives and technology investment. Specifically, CEO Brian Moynihan mentioned the bank spent $2.25B on technology initiatives in the first three quarters of 2017. The bank also now sees mobile devices account for 1 of every 5 deposit transactions.
  • On Morgan Stanley’s Q3’17 earnings call, Morgan Stanley CFO Jonathan Pruzan mentioned the bank is beta testing new customer-facing digital products it plans to launch, potentially in the robo-advisory space. Specifically, Pruzan noted: “When we think about our wealth business, it’s a business that’s built on scale. And it’s built on the fact that people with wealth want personal advice. So it’s going to be both a mix of technology and digital with the personal element of the advice channel. And we think that’s the winning formula going forward.”

Based on the data, JPMorgan ranks ahead of most bulge bracket banks when it comes to overall fintech investment since 2013, but behind its peers Goldman Sachs and Citi.

Online Marketplace Lender Nav Facilitated More Than 20,000 Small Business credit Approvals in 2017 (Crowdfund Insider), Rated: A

Nav, a small business marketplace lending platform, announced this week it has facilitated more than 20,000 small business credit approvals in 2017.

The company currently has more than 327,000 entrepreneurs now using its platform to manage their data and access capital.

Bono’s Fund Makes Its First Fintech Investment, Backing Acorns (Bloomberg), Rated: A

The Rise Fund, a private investment firm co-founded by the U2 lead singer, is making its first known bet on a fintech business by backing Acorns Grow Inc., said people familiar with the matter, who asked not to be identified because the details are private.

Georgia Company Acquires S.D. Fintech Startup LoanHero (San Diego Business Journal), Rated: A

LoanHero, one of San Diego’s few financial technology startups, has been acquired by Georgia-based company LendingPoint.

Terms of the deal, announced Jan. 11, were not disclosed.

Small-dollar lender Oportun to open 20 offices in Florida (American Banker), Rated: A

Oportun, a community development financial institution that provides small loans to individuals with little or no credit history, is planning to open 20 lending offices in Florida.

The Redwood City, Calif.-based lender said this week that it has already opened four offices in Miami and Hialeah and that it expects to add 16 more in the Sunshine State, primarily in South Florida, by the end of the year.

6 Key Trends in Fintech to Watch in 2018 (Lend Academy), Rated: A

  1. Convergence of Software and Financial Products  One of the important lessons that Square taught the market is that bundles of software solutions (loyalty, POS, analytics, scheduling and many others) and lending are essential drivers in advancing growth of payment processing.
  2. InsureTech
  3. The Power of the Machines  Companies like LendingClub are using machines to discover new relationships and patterns to introduce more tailored financial offers to their customers.
  4. Emerging Economies  Many growing companies in Africa, Asia, and Latin America are developing and adopting financial solutions, often faster and with more innovation than in developed economies.
  5. Wealth Management
  6. Rise of Crypto and Blockchain

Google Pay brings payment tools under a single brand (Tearsheet), Rated: A

The Internet giant is finally putting its many payments capabilities — Google Wallet, Android Pay and Pay with Google — under a single name, Google Pay, after lagging for years behind Apple Pay and Samsung Pay.

Ladder Secures $ 30M Series B Led by RRE Ventures (coverager), Rated: A

CA-based life insurance MGA Ladder announced it has raised $30M in a Series B round led by RRE Ventures, with participation from Thomvest Ventures, as well as Ladder’s existing investors: Canaan Partners, Lightspeed Venture Partners and Nyca Partners . Ladder launched its fully-digital life insurance solution in California on January 10, 2017, and has since expanded to nearly every state across the country.

Fifth Third regains top CRA grade, an entree to M&A (American Banker), Rated: A

Fifth Third Bancorp has received top marks from the Federal Reserve on its most recent Community Reinvestment Act examination as expected.

Fifth Third announced the results on Wednesday, saying in a press release that the Fed gave it an “outstanding” rating on its most recent exam. The Cincinnati company had said in a regulatory filing last month that it expected to ace the test, which covered the period between Jan. 1, 2014, and June 30, 2016.

A Beginner’s Guide to Applying for College Loans (Student Loan Hero), Rated: A

Student loan debt statistics show that more than 70 percent of students graduating from four-year colleges have debt, so you aren’t alone if you need to borrow to cover educational costs.

Step 1: Understand your options

  • Federal loans for students
  • Federal loans for parents
  • Private loans for students
  • Private loans for parents
Source: Federal Student Aid

Step 7: Determine if you’ll need to apply for private loans

  • Family contributions if parents or other family members are willing and able to pay
  • Savings
  • Scholarships or grants from community groups or other sources
  • Parent PLUS Loans
  • Private student loans

Step 8: Learn how to apply for private student loans

Because there are many private student loan lenders, it’s a good idea to shop around. You should consider:

  • Loan eligibility requirements: What do you need to qualify?
  • Loan terms: How long do you have to repay the loan?
  • Repayment terms: When do you need to start repaying, and is there a prepayment penalty?
  • Fees: Is there a cost to apply for the loan or a loan origination fee?
  • Interest rates: Is the rate fixed or variable? How much will you pay to borrow?

You can visit our private student loan marketplace to find private student loan lenders offering loans to parents and students.

Here are the top 6 lenders of 2018!

LENDER RATES (APR) ELIGIBLE DEGREES
CHECK OUT THE TESTIMONIALS AND OUR IN-DEPTH REVIEWS!
2.58% – 7.25% Undergrad
& Graduate
VISIT SOFI
2.57% – 6.39% Undergrad
& Graduate
VISIT EARNEST
2.76% – 7.25% Undergrad
& Graduate
VISIT COMMONBOND
2.99% – 5.15% Undergrad
& Graduate
VISIT LAUREL ROAD
2.74% – 7.26% Undergrad
& Graduate
VISIT LENDKEY
3.11% – 8.46% Undergrad
& Graduate

 

 

Roostify adds tech veteran Adnan Habib as vice president of engineering (Housingwire), Rated: B

Roostify announced Thursday that it hired Adnan Habib as the company’s new vice president of engineering.

In this role, Habib will lead Roostify’s growing product delivery team and will be responsible for making improvements to the Roostify’s digital lending platform.

Roofstock Appoints Suresh Srinivasan as Chief Marketing Officer (BusinessWire), Rated: B

Roofstock (www.roofstock.com), the leading online marketplace for buying and selling leased single-family rental homes, today announced the strategic hire of Suresh Srinivasan as chief marketing officer. Srinivasan has 20 years’ experience leading marketing, product, and e-commerce functions at Fortune 500 and high-growth tech startups. Most recently serving as the SVP of Marketing for Xome, Srinivasan brings a deep understanding of the fast-growing real estate technology sector to Roofstock where he will be responsible for accelerating growth of Roofstock’s marketplace for single-family rental homes and developing the company’s partnership network.

United Kingdom

An invisible banking reform that ‘could fundamentally change how we manage our money’ is days away (Business Insider), Rated: AAA

Regulators in Europe and the UK are ordering banks and credit card companies to share customer data with other companies if their customers agree. The companies will also be able to carry out payments on a customers’ behalf.

Open Banking forces lenders to offer a digital “fire hose” of data that any third party can use to get standardised access — provided the startup is registered with the UK Financial Conduct Authority (FCA) and the customer agrees to share their data. They won’t have to negotiate deals with banks, just plug into their digital systems and go.

The aim of Opening Banking is to give customers greater control over their data and to encourage account switching.

An investigation by the UK Competition and Markets Authority in 2015 found just 3% of customers switched their banks in the last year, meaning many were left with accounts that were not right for them.

 

ThinCats Says 2018 is Poised for Growth in SME Lending (Crowdfund Insider), Rated: A

ThinCats says 2018 is poised for growth. The online lender reports that December was a record month booking £12 million of funding listed on the platform followed the biggest-ever ThinCats-listed loan of £6.7 million to the Chelsea Yacht & Boat Company at the end of September.

Loan Store Reveals to Reduce Interest Rates on Instant Cash Loans for the UK People (MENAFN), Rated: A

Loan Store is the responsible lending hub that reveals to reduce the interest rates on instant cash loans for the UK people.

Hennery Dicosta, a senior adviser of Loan Store, has offered the complete details about this announcement. This is what he said- In a recent scenario, people usually try to borrow a small loan amount. That is why we have decided to provide the loans for bad credit people with no guarantor and no fees on an instant decision to resolve their short term emergencies. We never charge any processing fee and we are now providing these loans on quite low rates of interest. Besides, we do not judge the creditworthiness of the borrowers with their credit rating and give an instant decision on their loan request.

Crowdstacker joins the Peer-to-Peer Finance Association (P2P Finance News), Rated: B

CROWDSTACKER has joined the Peer-to-Peer Finance Association (P2PFA), becoming the self-regulated trade body’s eighth member.

The business lending P2P platform will be represented by chief executive Karteek Patel.

China

3 Growth Stocks at Deep-Value Prices (The Motley Fool), Rated: AAA

With that in mind, we asked three Motley Fool investors to each profile a company that has a low valuation now compared to its earnings-growth potential. They identified Yirendai (NYSE:YRD)Criteo S.A.(NASDAQ:CRTO), and Changyou.com (NASDAQ:CYOU) as strong contenders trading at attractive discounts.

China’s first P2P online lending platform

The Chinese P2P lending market blossomed in the late 2000s, catering to  customers who were underserved by traditional banks, and is worth about $60 billion today.

Analysts expect Yirendai’s revenue and earnings to rise 74% and 14% respectively this year, followed by 43% revenue growth and 41% earnings growth next year. Yet the stock trades at just 14 times earnings, compared to an industry average of 26 for credit service providers. Based on those numbers, Yirendai looks likely an undervalued growth stock.

But there are some obvious reasons why investors are discounting it.

First, Yirendai is a subprime lender. Just 1.7% of its loans were rated as prime “Grade A” last quarter. Another 8.7% were Grade B, and 14.1% were Grade C — but 75.5% were rated Grade D. Yirendai collects higher fees from lower rated borrowers, but its business could collapse if its delinquency rates rise.

The company only discloses delinquency rates for loans past due by 15 to 89 days, and that rate came in at a low 1.8% last quarter. But it doesn’t report any data on loans delinquent for over 90 days.

Chinese finance platform Black Fish raises $ 145m from Gobi, Lightspeed, others (Deal Street Asia), Rated: AAA

Black Fish, a consumer finance platform based in China’s Nanjing region, has received $145 million in a series A round from a cluster of firms  including Lightspeed China Partners and Shanghai and Kuala Lumpur based Gobi Partners.

Others who participated in the round include Morningside Venture Capital, JAFCO Asia, Fullcent Capital and Zhang Tao, founder of Dianping.com.

At this point, the average annual growth rate of consumer finance is 16.4 percent.

China’s Renren Is Poised To Unlock Value From Its Investment Portfolio And Grow With Blockchain (Seeking Alpha), Rated: A

Renren holds a significant investment portfolio that is easily worth $12 per share.  This value will likely be realized in the near term due to multiple catalysts.

The company has started to get involved with blockchain-related businesses, which potentially turns them into a “blockchain play”.

This situation leads to an asymmetrical payoff structure in which there is very little downside and significant upside. My target price is $18.

Renren was an early VC investor in Sofi, taking part in its seed round of financing as well as a later follow-on round. They currently hold a 13% stake in SoFi, having sold 14.1% of their holdings (representing 2% of SoFi) in April 2017 for $92 million.

Source: Seeking Alpha

Dianrong Signs Strategic Agreement with Dalian Finance Development Bureau & Dalian Finance Industry Investment Group (PR Newswire), Rated: A

Dianrong and the Dalian Finance Development Bureau and Dalian Finance Industry Investment Group (DFIIG) recently signed a strategic cooperation agreement to drive financial innovation in Dalian and across China. According to the agreement, Dianrong will develop a series of specific projects in partnership with the Dalian government, including:

  • Assist the Dalian Finance Development Bureau in creating a financial technology (fintech) cloud platform to provide fintech capabilities for small loan and guarantee companies, and other small and medium-sized financial institutions in the region and at large. Tools and services will include sophisticated fraud detection, big-data risk management tools, payment channel integration, and compliance reporting. The fintech cloud platform will also provide regulators with easier monitoring of local lending activities and trends in an ongoing and comprehensive way, helping them provide timely policy guidance and support on risk management.
  • Work with DFIIG to establish a special Internet finance investment fund for Dalian. The fund will focus on investment in fintech projects and startups with the potential to strengthen Dalian’s new economy and financial services industry.
  • Develop a supply-chain trading platform in Dalian utilizing advanced fintech and blockchain capabilities to help more small and medium-sized suppliers secure needed funding. Last year, Dianrong created the first blockchain platform for supply-chain finance with FoxConn Group, a global leader in consumer electronics.

Shanghai tightens financial sector supervision (Ecns), Rated: B

Shanghai is one of China’s largest financial markets by market trading volume. In 2017, its trading volume was 1,438 trillion yuan ($220.9 trillion).

Shanghai has already launched a campaign against fraud and illegal behavior in financial consumer markets, such as internet-based peer-to-peer lending, cash loans to college students, and pay-day loans.

European Union

Rocket Internet CEO says ready to pounce with cash pile (Business Insider), Rated: AAA

Germany’s Rocket Internet needs to hold on to its mountain of cash so it can compete with rivals from the United States and China and pounce when investment opportunities arise, the chief executive said in an interview.

CAUTIOUS MARKET

Rocket is invested in more than 100 start-ups, including in financial and property tech, logistics and travel sites, with its stakes in the five biggest of them potentially worth more than 1 billion euros to Rocket, according to Berenberg bank.

International

MoneyGram Signs Deal to Work With Currency Startup Ripple (WSJ), Rated: AAA

MoneyGram International Inc. MGI +2.63% signed on to run a pilot program testing XRP, a digital currency created by San Francisco startup Ripple, in its payments network, the companies said Thursday.

The Dallas-based company agreed to test XRP as a tool for reducing money-transfer costs and settlement times.

How Banks Can Use Trade Finance Services and Data to Increase Share of Wallet (Traxpay), Rated: AAA

While global trade presents tremendous growth opportunities, businesses of all sizes are none-the-less finding it difficult to access much needed credit, resulting in a global trade finance gap. According to an Asian Development Bank’s (ADB) 2017 Trade Finance Gaps, Growth, And Jobs Survey, that gap was $1.5 trillion in 2016.

Non-financial institution competitors are aggressively targeting this market, using innovations such as blockchain to develop products and tools that not only replace outdated paper and manual-based processes, but also deliver unprecedented levels of cybersecurity that are critical in today’s digital transaction space. The same ADB survey revealed more than $13 billion in venture capital was invested in FinTech trade finance in 2016 alone.

The recent Simmons & Simmons Hyperfinance studyof the world’s leading trade banks found that only 7% believe they are at the forefront of digital innovation in spite of the fact that 80% of innovation leaders report digitally-driven products and services introduced over the past three years have expanded revenue growth. This illustrates the reality that financial institutions recognize the importance of developing a digital strategy, but few are moving aggressively enough to take advantage of these new technologies.

PRINCIPLES, ESG, AND CREDIT RISK (All About Alpha), Rated: AAA

The question before the house right now, though, is: what about the credit rating agencies? The question comes in three parts: there are the global CRAs; the smaller/regional CRAs in most of the world, and regional CRAs in the special case of China.

First, the global CRAs [there are just two of them, Moody’s and S&P] are making “strong efforts” to incorporate an understanding of ESG issues. They are hiring staff with ESG backgrounds, equipping their existing analysts with the relevant expertise, and drawing on third party providers.

Then there is China. Its CRAs include Dagong Global, China Chengxin, and Golden Credit Ratings. The idea of integrating ESG into their analyses is thus far limited to the issue of green bonds, that is, bonds issued for the development of brownfield sites. Government policy in China encourages green bonds and the CRAs have responded. The resulting assessments are focused on the “E,” not so much the “S” or the “G.” And their environmental assessments rely on measuring the impact of the project the bond aims to finance.

  • Research very generally supports the hypothesis that there exists a causal link between ESG factors and the credit worthiness of a borrower;
  • Academic research in limited in that it is too exclusively content to measure credit risk by credit ratings, rather than testing the ratings themselves against alternative measures;
  • But some research does employ the spread of credit default swaps as an independent measure of risk;
  • Anecdotal observation indicates a clear link between G and defaults, although the linkage between E and S and defaults is more difficult to pin down;
  • There is much evidence in the linkage of ESG to macroeconomic factors and potential growth, which in turn are important to sovereign risk in particular.

ABS braces for more auto deals after strong start to year (IFR), Rated: A

The asset-backed bond market is braced for a slew of new issues next week, with deal flow expected to be dominated by auto issuers including BMW and Mercedes.

Just two issuers sold deals this week – GM Financial and Consumer Portfolio Services – and both auto trades were met with strong demand from investors. One banker on the GM deal said the deal was over-subscribed across the capital stack.

The biggest tightening though was seen on the smallest and lower rated tranches. The 3.58-year Class B, rated Aa3/AA by Moody’s and Fitch, priced at 30bp over interpolated swaps versus guidance of 35-40bp and whispers of 45bp area.

The 3.58-year Class C, rated A1/A, priced at 50bp over interpolated swaps versus guidance of 55-60bp and whispers of 65bp area.

FROM BANKING TO BITCOIN, FINTECH IS POISED TO CHANGE THE WORLD (Tech Genix), Rated: A

Currently, it represents only 1 percent of the global financial industry. By comparison, digital media accounts for 40 percent while eCommerce accounts for around 10 percent.

Source: Tech Genix

To give you a perspective, venture capitalists invested more than $13 billion across 840 different fintech holdings in 2016, according to a report by KPMG. This is 7 percent more than they invested in 2015.

According to the McKinsey report, five areas will see high growth over the next decade. They are consumer finance, mortgage, lending, retail payment, and wealth management.

Online payments

PayPal handled $1.73 billion worth of transactions in the first quarter of 2017 alone, representing a 30 percent increase year-on-year.

Borrowing and lending

However, the delinquency rates have been increasingover the last few years. These rates have increased from 0.56 percent in January 2015 to 0.75 percent in December of the same year.

Overstock.com’s 2017 Highlights: Innovation, Expansion, and Recognition (Business Insider), Rated: A

Overstock’s blockchain-focused subsidiary, Medici Ventures, named its board of directors in 2017, and also saw a number of its portfolio companies continue to use blockchain to revolutionize industries including capital markets, money and banking, property registry, voting, identity, and underlying blockchain technology, including:

  • tZERO, the world’s first SEC approved, blockchain-based alternative trading system, launched its initial coin offering (ICO), which attracted over 10,000 subscribers and raised $100M in commitments in the first 12 hours of its pre-sale. A significant portion of the tZERO security tokens issued will be available to accredited investors in the public sale beginning in January, 2018.
  • DeSoto Inc., a joint venture between Overstock.com founder and CEO Patrick Byrne and world-renowned economist Hernando de Soto, was created to develop a global property registry system to surface the property rights of billions of people in the developing world.
  • Bitt, a Barbados-based financial technology company using blockchain to create central banking tools and mobile money applications, named Rawdon Adams, son of former Barbadian Prime Minister Tom Adams, as its CEO. Bitt also fully launched its new mMoney digital payment product, bringing to market a blockchain-based mobile wallet that allows users to participate in digital transactions on their smartphones without the need for a traditional bank account, helping to foster financial inclusion in the region.
  • South-American based Ripio (formally known as BitPagos), participated in an ICO that raised $37M to fund its Ethereum-based peer-to-peer lending platform, Ripio Credit Network.
  • Belgium-based SettleMint launched a token sale for its DataBroker DAO, a peer-to-peer marketplace created to provide Internet of Things (IoT) sensor-owners with a clear path to data monetization, and data consumers with a decentralized marketplace in order to buy IoT sensor data. SettleMint also signed an agreement with The Islamic Research and Training Institute, the research arm of the Islamic Development Bank Group, to work with local partner Ateon on developing blockchain-based financial products that can be used to support development and inclusion in IsDB member countries.

Global lender selects Aussie fintech, Trade Ledger, as worldwide technology partner (PR Newswire), Rated: A

Zürich-based lender, TradePlus24, has selected Australian deep tech startup, Trade Ledger, as its global technology partner to roll out its new trade insurance wrapped lending product across their European lending network, and enter the Australian market.

Bankers fear they will get Amazon-ed in tech disruption (Financial Times), Rated: A

According to IDC, only about a quarter of US bank technology budgets is spent on digital transformation, as opposed to business as usual. They expect this to grow to nearer 40 per cent in 2020.

Secondly, this spending could substantially boost banks’ productivity, and profits.

Banks will drive up the cost of customer acquisition for start-ups who will increasingly struggle unless they build network effects and scale very quickly. Roboadvisers and peer-to-peer lenders will be on heightened alert. Some start-ups will need to rethink their plans to disrupt and look to form partnerships instead.

Changes in financial regulation, such as a lighter touch fintech charter being examined in the US or the second payment services directive in Europe, could potentially make this more likely. The tech giants have the brands, customer reach, digital processes and flair to develop good products, and to take swift advantage of any regulatory changes.

Karma token trading opens after successful million ICO campaign (Crypto Ninjas), Rated: B

India

German Online Lender Kreditech Heads to India (Bank Innovation), Rated: AAA

German online lender Kreditech is making its way to India, Bank Innovation has learned.

For this expedition, the fintech has teamed up with SaaS banking platform Mambu for providing short-term lending products specifically tailored to local consumers.

Kreditech selects Mambu’s SaaS banking engine for its passage to India (Finextra), Rated: A

Kreditech currently operates in Europe and Latin America and will expand into India in early 2018, together with its partner PayU, a global online payments provider and Mambu client in Latin America.

The loan product is expected to go live in the first quarter of 2018, all data will be hosted by AWS India.

NiYO Solutions Raises $ 13.2M in Series A Funding (FINSSMES), Rated: A

NiYO Solutions Inc., a Bangalore, India-based fintech startup for salaried employees, raised $13.2m (85 crore) in Series A funding.

APAC

Myanmar takes small steps towards providing greater liquidity for SMEs (Myanmar Times), Rated: AAA

A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

Currently, local banks extend loans at interest rates ranging between 8.5 percent and 13pc. The local banks began offering SME loans at8.5pc interest in 2015. Since then, the Japan International Cooperation Agency (JICA) and KfW Development Bank from Germany have also launched SME loans.

P2P lending

To get around the financial constraints, borrowing from family members and peers is common.

In fact, a rising number of businesses have resorted to P2P lending for funds to build up their businesses. Without any guarantees of success though, many entrepreneurs ultimately end up in debt. Others fall prey to fraud. Last year, The Myanmar Times reported at least three cases of fraud involving fake promises of repayments with up to 30pc interest.

Cloud Lending Solutions Recognized as a Top 25 FinTech Company of 2017 (BusinessWire), Rated: B

Cloud Lending Solutions was recognized as a “Top 25 FinTech Company for 2017” by APAC CIO Outlook Magazine. A panel of industrial experts and executives collaborated with the editorial board to curate the list with an aim to provide clarity into the ideal FinTech partners.

Africa

Local digital currency eyes real estate disruption (ITWeb), Rated: AAA

Cape Town-based fintech company, Wealth Migrate, has launched a global   – WEALTHE Coin.

According to Wealth Migrate, while almost half of the world’s wealth is held in real estate, fewer than 13% of people have access or the resources to invest in and  from this lucrative market.

Authors:

George Popescu
Allen Taylor

Friday October 6 2017, Daily News Digest

Funding Circle lending

News Comments Today’s main news: LendingClub completes second self-sponsored securitization. Pennsylvania AG sues Navient. Federal regulator clamps down on payday lending. Elevate supports rule on small dollar lending. RateSetter expected to profit next year. China’s pyramid schemes double in 2017. KBRA opens first European office. LendIt leadership changes. Today’s main analysis: Funding Circle’s October review. Today’s thought-provoking articles: Payday lending’s tough restrictions. Cordray’s […]

Funding Circle lending

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

News Summary

United States

LendingClub Corp Completes Second Self-Sponsored Securitization (Financials Trend), Rated: AAA

LendingClub Corp (NYSE:LC), America’s leading web marketplace connecting investors and borrowers, has contributed to and sponsored its second securitization contract. The Consumer Loan Underlying Bond Credit Trust 2017-P1 released $323.1 million in prime notes supported by consumer loan assets enabled through the LendingClub platform. It marks as the sixth securitization sponsored or supported by company, and the fourth rated securitization of company facilitated loans overall.

This deal was backed by around $350 million of collateral and comprises $217.3 million of Class ‘A’ notes rated “A-(sf)”, $51 million of Class ‘B’ notes rated “BBB (sf)” and Class ‘C’ notes worth $54.7 million rated “BB (sf)”. All ratings were given by Kroll Bond Rating Agency, Inc.

Pa. attorney general files suit against student-loan company (Philly.com), Rated: AAA

The Pennsylvania Attorney General’s Office filed suit Thursday against Navient, the largest U.S. student-loan servicer, alleging widespread abuses and deceptive acts involving its administration of student loans.

The suit against Navient Corp. and its subsidiary Navient Solutions LLC, formerly a part of Sallie Mae, could affect hundreds of thousands of Pennsylvanians, Attorney General Josh Shapiro said, adding that the office is seeking restitution for all borrowers affected by the practices.

That includes anyone who received private student loans from Sallie Mae or who has had federal or private student loans serviced by Navient and has had problems with repayment.

The Wilmington-based company, which has a large servicing center in Wilkes-Barre, already is the subject of a federal lawsuit filed this year by the Consumer Financial Protection Bureau (CFPB). Washington state and Illinois also have sued the company.

Pennsylvania residents have filed 1,059 complaints against Navient with the CFPB as of September, the Attorney General’s Office said.

Online lender Earnest sells to Navient, in a disappointing deal for investors (TechCrunch), Rated: A

Earnest, a well-funded fintech startup with bold ambitions to create a modern financial institution, is selling to the student-loan company Navient for $155 million in cash.

The exit isn’t so great for Earnest’s investors. They’d plugged roughly $320 million in cash and debt into the company, which was initially centered around providing small loans to people based on their earning potential and evolved over time to provide personal loans to a broader base of customers, as well as lend money to coding academies, as it told TechCrunch in late 2015.

Fintech deal suggests everything old is new again (NASDAQ), Rated: A

Everything old is new again in finance. Navient, which services debt, is buying startup student-loan refinancer Earnest for less than half its 2015 valuation. Even then, it’ll eat into the new owner’s earnings and share buybacks. Worse, Navient faces a fresh lawsuit over dodgy practices.

The Pennsylvania attorney general’s office filed charges on Thursday that follow ones from the U.S. Consumer Financial Protection Bureau in January with Illinois and Washington. All allege that Navient in some way or other cheated borrowers paying for college, which the company denies.

Earnest’s $155 million price tag suggests most in the industry have downgraded their expectations about profitable growth.

Navient shares tumbled 12 percent, erasing market value more than three times the value of the acquisition.

Elevate Expresses Full Support for CFPB Small Dollar Lending Rule (BusinessWire), Rated: AAA

Ken Rees, CEO of Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, issued the following statement in response to the final “small dollar lending” rule issued today by the Consumer Financial Protection Bureau (CFPB):

“We applaud the CFPB, and we fully support this rule. We believe this rule is good for consumers and for the business we have built to better serve them. The small dollar rule protects consumers from the cycle of debt inherent in payday loans, short-term auto title loans, and certain balloon payment loans, and it encourages the kind of innovation we’re doing in underwriting, pricing and product development. We are heartened that regulatory uncertainty has been lifted with today’s announcement. Our current view is that the rule requires minimal or no changes to our business.”

Federal Regulator Clamps Down on Payday Lending Industry (U.S. News), Rated: AAA

Payday and auto title lenders will have to adhere to stricter rules that could significantly curtail their business under rules finalized Thursday by a federal regulator. But the first nationwide regulation of the industry is still likely to face resistance from Congress.

The Consumer Financial Protection Bureau’s rules largely reflect what the agency proposed last year for an industry where the annual interest rate on a payday loan can be 300 percent or more. The cornerstone is that lenders must now determine before giving a loan whether a borrower can afford to repay it in full with interest within 30 days.

Because studies by the CFPB have found that about 60 percent of all loans are renewed at least once and that 22 percent of all loans are renewed at least seven times, this cap is likely to severely wound the industry’s business model. In California, the largest payday loan market, repeat borrowers made up 83 percent of the industry’s loan volume.

The CFPB estimated that loan volume in the payday lending industry could fall by 55 percent under the new rules.

Roughly 12 million people took out a payday loan in 2010, according to the Pew Charitable Trusts.

In addition to the “full payment test” and the limits on loan renewals, the CFPB rules would also restrict the number of times a payday lender can attempt to debit a borrowers’ account for the full amount without getting additional authorization.

This Government Agency Is Seriously Overstepping Its Bounds (Fortune), Rated: A

The Consumer Financial Protection Bureau (CFPB) has a mission: to protect consumers from unfair, deceptive, or abusive practices. According to a new national poll by the Cato Institute in collaboration with YouGov, protection from deceptive practices is just what the American public wants. Asked to prioritize regulatory goals, the majority of respondents put “protect consumers from fraud” front and center.

Unfortunately, the CFPB continually misses the mark, issuing rules that make splashy headlines but in practice do little to stop bad behavior. Its latest proposed rule, expected to become final soon, doesn’t target fraud itself. Instead, it goes after an entire industry and will significantly reduce consumers’ access to credit at the exact moments they need it most.

As the Cato poll finds, the majority of payday borrowers say they receive good information about rates and fees from their payday lenders.

Payday Lending Faces Tough New Restrictions by Consumer Agency (The New York Times), Rated: AAA

The operators of those stores make around $46 billion a year in loans, collecting $7 billion in fees. Some 12 million people, many of whom lack other access to credit, take out the short-term loans each year, researchers estimate.

Industry officials said on Thursday that they would file lawsuits to block the rules from taking effect in 2019 as scheduled.

Under the new rules, lenders would be allowed to make a single loan of up to $500 with few restrictions, but only to borrowers with no other outstanding payday loans.

A dropoff of that magnitude would push many small lending operations out of business, lenders have said. The $37,000 annual profit generated by the average storefront lender would become a $28,000 loss, according to an economic studypaid for by an industry trade association.

Prepared Remarks of CFPB Director Richard Cordray on the Payday Rule Press Call (ConsumerFinance.gov), Rated: AAA

After a long process of research, outreach, and review of over one million public comments, the Consumer Bureau today has issued a rule aimed at stopping debt traps on payday and auto title loans. The rule is guided by the basic principle of requiring lenders to determine upfront whether people can afford to repay their loans. These strong protections cover loans that require consumers to pay all or most of the debt at once, including payday loans, auto title loans, deposit advance products, and longer-term loans with large “balloon” payments. The new rule also curtails repeated attempts to debit checking accounts that rack up fees and make it harder for consumers to get out of debt. This provision applies to the same kinds of loans and to high-cost installment loans as well. These protections bring needed reform to a market where far too often lenders have succeeded by setting up borrowers to fail.

Loans like these are heavily marketed to financially vulnerable consumers. Though they offer cash-strapped consumers access to credit, the full-payment requirement can make these loans unaffordable.

More than four out of five payday loans are re-borrowed within a month, usually right when the loan is due or soon thereafter. In fact, about one-in-four initial payday loans are re-borrowed nine times or more, as consumers pay far more in fees than they borrowed in the first place. Just like payday loans, the vast majority of single-payment auto title loans are rolled over or re-borrowed on the day they come due or soon thereafter. And one-in-five borrowers end up having their car or truck seized by the lender because they cannot repay the debt.

Our research has shown that the business model for payday and auto title lenders is built on miring people in debt.

The new rule also addresses how lenders extract loan payments from consumers’ accounts. This part of the rule covers short-term loans, balloon loans, and high-cost longer-term loans where the lender has account access. After two straight unsuccessful attempts, the lender cannot debit the account again unless it gets a new authorization from the borrower. In addition, lenders must notify consumers in writing before attempting to debit an account at an irregular time or for an irregular amount.

The final rule issued today applies the underwriting requirements only to lenders of short-term and balloon-payment loans. This is a change from our proposal, which would have required underwriting for a wider swathe of longer-term loans. We want to take more time to consider how the longer-term market is evolving and the best ways to address practices that are currently of concern and others that may arise as the market responds to the reforms prompted by this new rule.

The Bureau has spent five years developing this rule.

Despite Ban on Payday Lending, Public Pensions Profit from Outlawed Loans (NBC New York), Rated: A

Short-term, high-interest debt known as payday loans are illegal inside New York borders. But that hasn’t stopped state and city retirement funds from investing more than $40 million in payday lenders that operate in other states.

The Finance Industry’s Complaint Against the Consumer Financial Protection Bureau (U.S. District Court, Northern District of Texas), Rated: A

Read the full complaint here.

Fifth Third Bancorp’s Greg Carmichael Discusses the Relationship Between FinTechs and Banks (The Clearing House), Rated: A

This environment presents challenges to introducing technologies, products, or services. If we have an issue, we can’t advance the products or services. A zero-tolerance regulatory environment puts constraints on products and services that we may like to get into the marketplace. For instance, small dollar lending has been problematic. As you know, Jim, small-dollar lending is a very important product for our customers. Many customers are regularly going out to payday lenders, title loans, and pawn shops to get short-term access to dollars.

When you look at the amount of capital you have to hold, and the underwriting requirements for a small business loan versus a larger loan, the cost is the same. It makes it more difficult to serve small businesses, and you see small business lending by banks being significantly reduced over what you saw pre-crisis.

This partnership has already helped us form relationships with companies like GreenSky, ApplePie Capital, Transactis, and AvidXchange. This has enabled Fifth Third to accelerate our innovation in those different areas, whether it is unsecured lending, small business franchise lending, or accounts payable automation.

Well, the interesting thing with FinTechs is that most of them need a bank as a partner to be successful.

GreenSky doesn’t exist, Lending Club doesn’t exist, OnDeck doesn’t exist without liquidity and the safe harbor banks provide for the asset. Partnerships between a bank and a FinTechs are a potential strong win for our customers and a win for our banking shareholders because we’re more efficient in how we deliver innovative products and services.

Our $30 billion community commitment focuses on supporting low- to moderate-income borrowers. $11 billion of our five-year commitment is dedicated to mortgage lending; $10 billion is for small business lending; and $9 billion is for community development lending and investments.

Balance Credit Expands to California Consumer Credit Market (BusinessWire), Rated: A

Balance Credit, a leading online lender whose analytics and technology-driven solutions have enabled nearly $100 million in credit access for underserved Americans, has expanded its personal loan offering to residents of California. The expansion will allow Balance to assist the estimated 26 percent of Californians who are currently underserved by mainstream banking products. With the launch in California, Balance has expanded its geographic coverage from 19% to 31% of US consumers.

With today’s news, California marks the 9th state where Balance Credit operates, including Delaware, Missouri, New Mexico, Ohio, South Carolina, Texas, Utah, and Wisconsin.

5 ways to buy a home with a low down payment (KHOU.com), Rated: B

In fact, the average down payment, according to the National Association of Realtors, has been 6 percent for the last three years.

What do you do if you don’t have 20% lying around?

SoFi. SoFi is new to the mortgage lending space, but it’s setting itself apart in a big way. It accepts borrowers with a 10 percent down payment, but they primarily target borrowers with higher FICO Scores — think 700+. On the bright side, they do not charge mortgage insurance. In fact, SoFi doesn’t charge any loan origination, application or broker commission fees.

Lawmakers Call Ex-Equifax CEO’s Testimony Insufficient (Law360), Rated: A

House lawmakers on Thursday sharply questioned the former chairman and chief executive of Equifax Inc. over a massive data breach that left more than 145 million Americans’ personal information exposed, raising questions about why he had appeared to testify as opposed to current executives.

Appearing in his fourth congressional hearing over a three-day span, former Equifax Chairman and CEO Richard Smith faced a flurry of questions over the details of the breach, including over curious stock trades by top company executives just before the breach was made….

Ex-Bookkeeper Stole $ 1.6M From NJ Co. Via PayPal (Law360), Rated: B

Pennsylvania federal prosecutors Thursday filed an indictment charging a Philadelphia man with using PayPal to embezzle $1.6 million from his former employer, a New Jersey company that sells products for the cellular phone industry.

Peter Goodchild, 54, who was a bookkeeper at the Florham Park, New Jersey-based QwikSource LLC, allegedly pilfered the funds over a 10-year period. He also faces charges of money laundering, aggravated identity theft and filing false income tax returns.

Barclays US tests personal finance tool (Banking Technology), Rated: B

Barclays US is dipping its toe into the financial health business, testing a personal financial management tool that aggregates all of a customer’s Barclays credit cards, personal loans and savings products – as well as accounts with other banks – in one place, reports Banking Technology‘s sister publication Paybefore.

This new service, My Personal Bank, which will be announced soon, is embedded in the bank’s credit card mobile app.

Allrise Financial moves into downtown Reno (Northern Nevada Business Weekly), Rated: B

Allrise Financial Group has leased 5,500 square feet at 200 S. Virginia Street in Reno.

Did the CEO of Hardwick Clothes Cut Ties With the NFL Over ‘Unpatriotic’ Protests? (Snopes), Rated: B

In September 2017, Tennessee businessman and CEO of Hardwick Clothes Allan Jones withdrew all NFL-related advertising for his companies, in response to “unpatriotic” national anthem protests.

Source: Snopes

On 26 September 2017, Jones, who also owns Buy Here Pay Here U.S.A. and U.S. Money Shops, posted a screenshot to his Facebook page showing an email instructing his ad-buyer to stop any commercials for his companies from being broadcast during NFL games.

United Kingdom

RateSetter will return to profit next year, says CEO (P2P Finance News), Rated: AAA

RATESETTER will return to profit next year, its chief executive and co-founder has said.

The peer-to-peer lender was profitable in the financial years ended 2014 and 2015, but has fallen into the red since then, as it has invested heavily into scaling up the business.

The ‘big three’ platform published a recording of a recent speech by Rhydian Lewis (pictured) on its website on Thursday, in which he underlined his belief that RateSetter is a “sustainable and profitable model”.

Your October Review – Insight and Analysis (Funding Circle), Rated: AAA

Last month Funding Circle investors, like you, lent over £100 million to UK businesses to help them grow and develop.

Source: Funding Circle

September industry news

Thanks to investors, last year over £1 billion was lent to 10,000 businesses through Funding Circle, helping to create 25,000 new jobs.

We recommend lending £2,000 or more, so you can lend to 100+ businesses, with no more than 1% going to each one.

Source: Funding Circle

From peer-to-peer to here: Three issues that Zopa must solve (AltFi), Rated: AAA

Zopa is the world’s original peer-to-peer lending platform and the biggest consumer-focused platform in the UK. It has also been closed to new investors for the better part of eight months. The reason is explicitly that it cannot find enough new borrowers. Demand for its loans among existing investors is more than sufficient to match demand on the other side of the marketplace. For this reason, Zopa‘s Innovative Finance ISA has largely been an exercise in tax efficiently wrapping money that it already had on the platform.

A more meaningful initiative in the platform’s ongoing plight to attract borrowers might be its latest partnership with Saffron Building Society. This, for the first time in Zopa’s 12 year history, brings it into branches. Its loans will now be made available to Saffron’s 90,000 customers in any of its 11 branches across Hertfordshire, Essex and Suffolk, as well as via the building society’s website. Applicants can expect a quote within minutes.

Zopa may well have a bright future, but in the short-term it seems to me that it has three core issues that it must iron out:

  • Finding new origination channels in order to open to new customers once more, capitalise on the IFISA opportunity and take advantage of the cost benefits of deposit funding.
  • Meaningfully speed up whatever is delaying loan sales on the platform.
  • Find a way to maintain an attractive risk-premium for its P2P investors.

LendInvest CEO Christian Faes Challenges Government to Back SME Builders: Game On (Crowdfund Insider), Rated: A

“There are five times fewer small scale developers today than in the last housebuilding boom and not a single one of today’s top ten housebuilders was created before 1990. There is a clear monopoly in the sector,” clarified LendInvest Co-Founder & CEO Christian Faes.

Online Lender Lendy Seeks IFISA Permission & Announces Repayment For Largest P2P Loan (Crowdfund Insider), Rated: A

UK-based peer-to-peer property platform Lendy is currently seeking permission to launch an innovative finance ISA (IFISA). This news comes just after the online lender announced its 2016 earnings and additional growth plans.

Meanwhile, Lendy also announced the repayment of its largest p2p loan. Bridge and Commercial reported that the loan, which was secured against former the Kentish Town Studios building in North London, has been repaid in full 21-days ahead of schedule and even returned a gross 12% per annum in interest.

Digital wealth manager Moneyfarm acquires tech behind fintech chatbot Ernest (TechCrunch), Rated: A

Moneyfarm, the U.K.-headquartered “digital wealth manager” has acquired the technology behind personal finance chatbot Ernest. Terms of the deal aren’t being disclosed, though I understand that, along with the tech, this is an acqui-hire of sorts, seeing London-based Ernest’s CTO Lorenzo Sicilia join Moneyfarm to oversee technology integration.

Starling Bank expands to offer business accounts (Banking Technology), Rated: A

Starling Bank, one of the first banking challengers to offer a mobile-only current account in the UK, is expanding into the business market.

The Starling for Business account will initially be for entrepreneurs, sole-traders, and small business owners. The aim is to offer “fast, secure, and flexible” ways of managing business finance from mobile.

Can a robot give financial advice? (Which?), Rated: B

New guidance setting out how artificial intelligence services can give streamlined financial advice has been published by the Financial Conduct Authority (FCA).

Some of the most popular include:

  • Nutmeg: an online service that suggests a diversified investment portfolio tailored to the personal information you provide. Nutmeg will continually rebalance your portfolio in line with your risk profile, unless you change your preferences.
  • BestInvest: a platform to manage your investments online, offering research and analysis tools. Further advice is provided via phone by advisers.
  • RPlan: a tool for DIY investors, with the choice to choose, track and review investments online.
  • Barclays Financial Personality Assessment: this tool helps you identify your attitude towards risk and your composure levels. Users can then work with an adviser to build a portfolio.

Robo-advice on mortgages

Aside from investing advice, online services are also helping people make another major financial decision – applying for a mortgage.

A handful of robo-advisers for mortgages are currently operating in the UK market – Trussle and Habito are both up and running, while MortgageGym was granted a license from the FCA earlier this year.

Saving by app

  • Chip is a smartphone app which analyses your spending patterns and automatically transfers your money into a savings account, based on what it thinks you can add afford to save. While its standard interest rate is 1% AER, users can earn up to 5% AER by referring friends to the app.
  • Plum operates in a similar way, analysing your transactions and recommending savings, though it communicates via Facebook Messenger.
  • Cleo analyses your spending and suggests improvements to help you save more, but it won’t move your money for you.

Where are the top 10 buy-to-let postcodes? (Bridging&Commercial), Rated: B

Luton has held off Colchester to remain top of the LendInvest buy-to-let index, while Manchester has broken into the top three amid increasingly stronger metrics in northern markets.

The top 10 buy-to-let postcodes

Source: Bridging & Commercial

The bottom 10 buy-to-let postcodes

Source: Bridging & Commercial
China

Pyramid scheme investigations in China double during 2017 (NASDAQ), Rated: AAA

The number of pyramid schemes investigated by Chinese police more than doubled in the first nine months of the year, with cases involving nearly 30 billion yuan ($4.5 billion), the official Xinhua News Agency said on Thursday.

Police investigated 5,983 schemes from January through September, an increase of 118 percent, with internet-based pyramid schemes on the rise, many involving virtual currencies, according to the report which cited the Ministry of Public Security.

European Union

Rating agency opens in Europe (Structured Credit Investor), Rated: AAA

KBRA has opened its first European office, located in Dublin, Ireland, and intends to expand into further jurisdictions (SCI passim). Several new hires and some existing staff will support the European effort, which will have a concerted focus on infrastructure and aviation securitisation, along with traditional core business areas.

MyBucks Named ‘Best Financial Inclusion Company’ at European FinTech Awards 2017 (Next Billion), Rated: B

Luxembourg-based and Frankfurt-listed fintech, MyBucks S.A., was announced as the winner of the Award for ‘Best European Financial Inclusion Company’ at the European Fintech Awards 2017 taking place in Brussels, Belgium.

International

Leadership Changes at LendIt (Lend Academy), Rated: AAA

LendIt events today look and feel very different from our early events. Along with that LendIt as an organization has grown and matured. Last month we made some internal changes that I want to share with you here.

My partner Jason Jones, who has been the driving force in the growth of our business, took over the CEO role some time ago as the business became more complex.

As of early September, Jason has transitioned out of the CEO role and is now Co-Chairman along with me. This allows him to focus his entrepreneurial drive on areas of our business where he can make the most impact. He is turning his attention to become more client focused as major global financial services and technology companies become more involved in our business.

Bo Brustkern, who has until recently stayed in the background, is now taking on the mantle of CEO of LendIt.

Similarly, we have promoted Joy Schwartz, our longtime head of operations, to become President of LendIt.

Finastra, R3 and seven banks have blockchain plan (Banking Technology), Rated: A

FinastraR3 and seven banks – including BNP ParibasBNY MellonHSBCING and State Street – are working together to create a blockchain-fuelled online marketplace for the syndicated loan market.

Underpinned by Corda, R3’s distributed ledger technology (DLT) based platform, Fusion LenderComm exposes real-time credit agreement, accrual balances, position information and transaction data to lenders, from agent bank loan servicing platforms such as Finastra’s Fusion Banking Loan IQ.

How Prodigy Finance Helped Fund My MBA At London Business School (Business Because), Rated: A

Determined to boost her business skills and gain more international exposure, Argentinian Amelia Martinez decided to pursue an MBA at London Business School (LBS).

Coming from a developing country with high levels of inflation and currency fluctuations, she faced many hurdles funding her MBA, particularly when new government restrictions were imposed preventing her from taking money out of her country to pay for the last instalment of her tuition.

With a Prodigy Finance loan however, she was able to pay for and complete her degree. Having completed her MBA at LBS, she’s since gone on to work for the company that helped her do it.

Banks team up with IBM in trade finance blockchain (Financial Times), Rated: B

A group of banks are teaming up with IBM to build a new global system for trade finance using blockchain technology that is designed to track goods and automatically release payments as they move around the world by plane, ship or truck.

Bank of Montreal, Caixabank, Erste Bank and Commerzbank are joining the project called Batavia, which was launched by UBS and IBM last year and aims to start testing the technology using real transactions by early next year.

Australia

Millennial Money: We’re not willing to pay to keep our finances in check (Stuff), Rated: A

A 2014 survey by global investment banking company UBS found millennials preferred to seek advice from their friends rather than a professional.

Most millennials, like older generations, first looked to a spouse or partner for financial advice. Their next choice is their parents, followed by friends and other family members.

Non-millennials were much bigger champions of financial advisors: 40 per cent of non-millennial respondents reported seeking advice from one as their first port of call on a financial decision, while only 14 per cent of millennials said the same.

Source: Stuff

Blockchain Driven P2P Lending & Investment Platform Announces Crowdsale (Coin Idol), Rated: B

The crowdsale for the platforms ‘LoanBit Token (LBT)’ is scheduled to go live in November, with a presale beginning on 4th October 2017, and ending on 15th October 2017.

The ICO for LoanBit is set to go live on in November and will be open for only 31 days.

LoanBit – Legit Bitcoin Lending Interest Rates & Earning Platform? (Bitcoin Exchange), Rated: A

LoanBit is a lending platform created by an Australian startup called LoanBit Proprietary Limited. The platform is designed to work as a mediator between bitcoin lenders and businesses looking for short-term loans in bitcoin.

LoanBit promises to offer you a guaranteed daily interest rate of 2% to 5%, which adds up to triple or quadruple digit guaranteed returns per year. You can invest in LoanBit for as little as 0.01 BTC.

LoanBit claims to be a legitimately registered Australian company. The company lists an address in Canberra (17/7-17 Bunda St). They also have an Australian company number (610 418 794).

In any case, the LoanBit.net website was registered on February 16, 2017. The latest version of the website, which features the HYIP scam, only appeared online on September 10, 2017 – so it’s brand new.

Yes, LoanBit appears to be a scam, based on all of the information we can find online today.

India

P2P lending norms will bring order to industry, but speed bumps ahead (VC Circle), Rated: AAA

India’s P2P lending market, which is predicted to be worth $4-5 billion by 2023 according to community loan exchange platform Faircent, has several players operating in the space, such as LenDenClub, Monexo, BillionLoans, i-Lend, LoanMeet, i2iFunding and FinMomenta. However, so far, P2P lending had been operating in a regulatory grey area. As such, the rollout of these guidelines gives legitimacy to the business.

FinMomenta co-founder and CEO Brahma Mahesh Khaderbad believes it paves the way for P2P platforms to gain legality, transparency and credibility.

The RBI has said that every company seeking registration should have a net-owned fund of not less than Rs 2 crore.

The guidelines say that any fund transfer between participants on a P2P lending platform shall be through an escrow account, which will be operated by a trustee. At least two escrow accounts, one for funds received from lenders and pending disbursal, and the other for collections from borrowers, shall be maintained.

The central bank has said that the aggregate exposure of a lender to all his/her borrowers at any point, across all P2Ps, should be capped at Rs 10 lakh. The aggregate loans taken by a borrower at any point of time, across all P2Ps, has also been capped at the same amount. The exposure of a single lender to the same borrower, across all P2Ps, shall not exceed Rs 50,000.

Read more on the guidelines here.

P2P lending platforms to get transparent, safer (Business-Standard), Rated: A

The norms on peer-to-peer (P2P) lending platforms issued by the Reserve Bank of India (RBI) will help make them more transparent and also safer for customers. “The regulations ensure that P2P platforms will protect the interests of lenders and borrowers will get faster access to credit,” says Shankar Vaddadi, founder and director of i-lend.

What peer-to-peer lending is and how RBI’s guidelines will impact it (Financial Express), Rated: B

The RBI said P2P lending, even though of no significant in value, yet can “disrupt the financial sector and throw up surprises” in future, and the associated risks to the financial system are “too important to be ignored”.

The RBI has laid down following criteria for registering under Non-Banking Financial Companies (NBFC) :

  • P2Ps should have a minimum Rs 2 crore capital
  • P2Ps cannot take any loan exposure themselves
  • P2P will undertake credit assessment and risk profiling of the borrowers and lenders
  • P2P will maintain documents related to loan agreements
  • P2P will provide assistance in disbursement and repayments of loan amount
  • P2Ps cannot hold balance sheet or funds
  • P2Ps cannot cross-sell products except for some insurance products

“This is an extremely positive step for the P2P lending business. The retail millennial lenders, an investor demographic which has been focussed on extensively in the regulations will be leveraging the power of the crowd for the benefit of small
borrowers,” Vinay Mathews, Founder & COO, Faircent.com said.

Student micro-financing startup SlicePay raises Series A round (VC Circle), Rated: A

SlicePay, a digital payment platform catering to college students, has raised $2 million (about Rs 13 crore) in a Series A round from Japanese investment fund Das Capital and Russian early-stage investor Simile Venture Partners, its co-founder told VCCircle.

Existing investor Blume Ventures also participated in the round.

YES BANK launches second cohort of YES FINTECH accelerator (YourStory), Rated: A

YES BANK, India’s fifth-largest private sector bank, has been significantly contributing to the fintech space by collaborating with and mentoring more than 100 fintech startups to co-create innovative financial solutions for its Corporate, SME, and retail customer base. In March this year, they launched a business accelerator programme for fintech startups called YES FINTECH, in association with T-Hub, Anthill, and LetsTalkPayments.

YES BANK is all set to launch the second cohort of YES FINTECH, which will kick off on November 13.

The YES FINTECH roadshow in Mumbai will include a Fireside Discussion on GES (Global Entrepreneurship Summit) and its impact on Fintech and Mumbai as India’s Fintech Hub. In conversation will be Amit Goel, Founder LTP, Puneet Shukla, NITI Aayog and Vivek Belgavi, Partner, PwC. After this, Rajeev Chari, COO, Numberz and Arpit Ratan, Founder, Signzy, both startups that graduated from the Summer Cohort of YES FINTECH, will share their experience of being a part of the programme.

When: 6th October

Where: ISME Ace, One India Bulls, Lower Parel, Mumbai

Time: 2 pm-5pm

The YES FINTECH roadshow in Bengaluru will begin with a GES lead-up panel discussion on ‘Women in Fintech. Panellists will include Lizzie Chapman from Zestmoney, Prashanthi Reddy from YES BANK and Dr. Anna Roy of NITI Aayog.  Following this, Shankar, Founder, FRS Labs, and  Ankit Ratan, Founder, Signzy, both startups that graduated from the Summer Cohort of YES FINTECH, will share their experience of what it was to participate in the programme.

When: 11th October

Where: 91 Springboard, 8th Block Koramangala, Bengaluru

Time: 2 pm-5pm

Authors:

George Popescu
Allen Taylor

Monday March 27 2017, Daily News Digest

marlette funding

News Comments Today’s main news: CFPB fines Experian $3M. Marlette Funding closes $333M securitization. EU considers passporting for fintechs. CreditMonk makes user reviews relevant for SMBs. Today’s main analysis: Recent securitizations. MFT 2017-1. Today’s thought-provoking articles: RateSetter provides update on wholesale lending. China the new leader in fintech worldwide. IT Consortium CEO calls for reg postponement on fintech. United States CFPB […]

marlette funding

News Comments

United States

United Kingdom

European Union

China

India

Asia

Africa

News Summary

United States

CFPB fines Experian $ 3 million for lying about consumers’ credit scores (Housingwire), Rated: AAA

Experian, one of the nation’s three major credit reporting bureaus, misled consumers by telling them that the credit scores they purchased from the company were the same ones that lenders used to make credit decisions, the Consumer Financial Protection Bureau said Thursday.

And for that deception, the CFPB is fining Experian $3 million.

According to the CFPB, Experian developed its own proprietary credit scoring model, which it calls the “PLUS Score.” Experian then took that “PLUS Score” and applied it to information in consumer credit files to generate a credit score it offered directly to consumers.

Experian then marketed and sold the PLUS Score to consumers.

According to the CFPB, Experian violated Dodd-Frank from at least 2012 through 2014 by “falsely representing that the credit scores it marketed and provided to consumers were the same scores lenders use to make credit decisions.”

Additionally, the CFPB said that Experian also violated the Fair Credit Reporting Act, which requires a credit reporting company to provide a free credit report to consumers once every twelve months.

Until March 2014, consumers getting their annual report through Experian had to view Experian advertisements before they got to the report. This violates the Fair Credit Reporting Act prohibition of such advertising tactics, the CFPB said.

Marlette Funding Closes $ 333 Million Securitization Transaction (Yahoo! Finance), Rated: AAA

Marlette Funding, LLC, a provider of online consumer lending platforms and services, announced today it closed its second proprietary “MFT” securitization. Approximately $333 million of Best Egg collateral was financed via three classes of Notes and one class of Certificates with certain loan sellers retaining risk on a portion of the Notes and/or Certificates.

The transaction was significantly oversubscribed and successfully priced which was based upon Marlette’s differentiated product offering and superior credit trends. Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Deutsche Bank and Citi. The Class A, B and C fixed-rate Notes were rated A (sf), BBB (sf) and BB (sf), respectively, by Kroll Bond Rating Agency (KBRA).

The “MFT” securitization is yet another significant milestone for the company, and a cornerstone of its long-term capital strategy. The transaction involved the sale of loans by Marlette and four other whole loan buyers who accessed the securitization markets via Marlette’s effective creation and management of the MFT shelf. The transaction was also notable for complying with the Dodd-Frank Act’s risk-retention requirement by utilizing a jointly sponsored entity comprised of Marlette and the originating bank, Cross River Bank.

Recent Securitizations (Orchard Platform), Rated: AAA

Data extracted from Finsight’s US ABS Market Overview.

Marlette Funding Trust 2017-1 (MFT 2017-1), (PeerIQ), Rated: AAA

Financing headlines dominated the news cycle this past week. OnDeck, an SME lender, amended its asset-backed revolving credit facility with Deutsche Bank to extend the facility’s maturity date to March 2019 and increase the borrowing capacity to $214 Mn. Further, Fundation, a leading credit solutions provider for small business, secured an asset backed credit facility from MidCap Financial.

Marlette has a strong capital market team led by ex-DB banker Karan Mehta and uses securitization as a funding channel. Citi Held for Asset Issuance 2016-MF1 (CHAI 2016-MF1), closed on March 4, 2016, was the first deal from the Marlette Platform which executed in challenging market conditions; Marlette Funding Trust 2016-1 (MFT 2016-1), closed on August 2, 2016, and was the second deal and first under the MFT shelf. MFT 2017-1, backed by $333 Mn of consumer loans, represents its third and the largest ABS transaction (Exhibit 1), led by Goldman Sachs, Deutsche Bank and Citigroup. Due to high demand, MFT 2017-1 was upsized by 18%, from $257 Mn to $304 Mn before pricing last Friday.

In a sign that regulatory uncertainty continues, the Marlette transaction did not include any loans from Colorado. Most recently, in February, Colorado state regulators filed a complaint against Marlette and demanded various remedial actions including refunding any excess charges to Colorado residents. Originators relying on the partner-funding bank model to impacted markets (such as NY, CT, VT) are structuring transactions to mitigate regulatory risk. 

Source: PeerIQ, Bloomberg, Kroll Rating

Besides credit supports, senior tranche investors have additional structural protection in the form of cumulative net loss rate triggers, which lead to accelerated repayment of principal in the event of worse-than expected collateral performance.

Such CNL trigger profiles represent the first order approximation of loss timing curve. If the CNL triggers are set too tight, the triggers have elevated risk of being breached, leading to reputational hazard to the issuer; if too wide, the original bond rating may be challenged and the senior bond holders may not receive the structural protection they expected.

 

Honeymoon’s Over for Peer-to-Peer Lending (Bloomberg), Rated: A

If they were, perhaps Promise Financial would still be making loans to finance wedding dresses and cakes and bad DJ’s. This relatively young firm was offering to make unsecured loans of around $10,000, typically for weddings, and charged interest rates that went up to nearly 30 percent.

But it stopped making loans at the end of January, according to a Bloomberg News article on Friday by Matt Scully. Instead, it’s changed its name to DigiFi and will provide technology to bigger banks.

And second, it makes more sense for many smaller online lenders to team up with larger financial operations rather than try to go it alone in an unforgiving and complex world.

This is yet another sign of the slow abandonment of the original vision of peer-to-peer lending in the U.S., where individuals lend to one another in a decentralized, Internet-based platform. The largest online lending firms, such as LendingClub and Prosper Marketplace, finance loans through securitizations, money from institutional investors and banking relationships. Promise, for example, raised around $100 million of funding agreements from investors including Greg Lippmann, a legendary mortgage-debt trader.

Does Marketplace Lending Offer Greater Transparency for Your Investment? (NREI Online), Rated: A

Companies that do the bulk of their business online are in many ways more accessible than traditional brick-and-mortar establishments, and that’s particularly true when it comes to marketplace lending.

Marketplace lending, also known as peer-to-peer lending, refers to the practice of matching borrowers and investors through online platforms. These transactions can be based on a number of consumer- or industry-driven needs—anything from student loans to commercial real estate deals. Taking advantage of advanced technology, data-driven algorithms and innovative credit models, these platforms may frequently better serve their client base. They have broad options in terms of asset class and geography, quick response times and lower overhead costs, which can translate to an overall better value for both borrower and investor.

Digital technologies provide greater transparency and actionable intelligence to the marketplace, allowing investors to better understand loan performance and, in many cases, to research potential loan transactions directly and thoroughly from the convenience of their desktop or mobile device.

Digital technologies also allow for better consistency of reporting standards, loan origination data and portfolio performance, which leads to better decision-making by investors.

These digital technologies enhance the speed and efficiency of a transaction, many times providing real-time data afforded by the ability to better monitor information associated with a particular deal.

Alt-Lending Reshuffles, Auto Loan Alarm Bells And HHGregg Goes Bust (PYMNTS.com), Rated: A

Alt lending, particularly marketplace lending, looks like it is about to become a much smaller neighborhood. The auto-lending market continues to kill canaries in those coal mines at an alarming rate. And the retail death cycle mows on with HHGregg officially declaring bankruptcy and Sears more or less admitting to its shareholders that the same fate may soon befall them.

All in all, Prosper lost $118.7 million last year, up from $26 million in 2015. According to the in-house explanation, those losses are primarily derived from lower loan volumes, higher costs that are also attributed to legal settlements and restructuring efforts.

And Prosper isn’t alone in losing money in marketplace lending — OnDeck reported $85.5 million in annual losses for 2016, and LendingClub is looking at $146 million.

The latest data out of Ally Financial indicates that growth in the auto lending segment will come in between 5 percent and 15 percent of adjusted earnings in 2017.

The National Automobile Dealers Association indicates that its used-car price index has dropped 8 percent from a year ago and now sits at its lowest level in seven years.

Back on March 6, HHGregg filed for Chapter 11 bankruptcy, and, without a buyer in line, it has no choice but to move forward with the filing.

Competing with fintech on business loans isn’t rocket science (American Banker), Rated: A

If you’re a business, applying for a loan from a bank is not a fun experience. For most borrowers, it’s as bad today as it was 20 years ago. Banks in 1997 required borrowers to meet in person with a banker. They asked for piles of paper documents like tax returns and articles of incorporation. They took their time getting back to the business with an answer. And all of that’s true in 2017.

One reason is that fintechs are figuring out ways to win on their own or with large partner banks. These firms give business borrowers a world-class user experience: Websites are beautiful, minimal data is required to start and a loan request can be answered immediately. Fintechs will continue to get better and better, and borrowers will end up pursuing the path where it is easier to borrow. After all, business owners are consumed on a daily basis with simply running their business; in many cases, they’d rather pay a higher interest rate than spend scarce time on a lengthy process with an unsure outcome.

The other reason banks need to respond now is that business lending innovation is within reach. Here are a few obvious opportunities.

  • Put your application online
  • Allow your borrowers to upload required documents
  • Eliminate the paper
  • Publish your criteria and your process
  • Create a fast lane
  • Communicate with your borrowers

BlackRock and Vanguard call for delay to fiduciary rule (Financial Times), Rated: A

BlackRock and Vanguard have called on US officials to delay the introduction of landmark rules set to govern America’s $16tn retirement industry just weeks after President Donald Trump ordered a review of the controversial measures.

Mr Trump ordered the DoL to revise or scrap the rule, which the Obama administration predicted would generate $17bn annually in cost savings for American workers and retirees, if it found the measures would limit savers’ access to financial advice or increase litigation against advisers.

The new regime is expected to lead to a rise in financial advisers recommending cheaper passive funds over expensive actively managed products that pay a commission. BlackRock and Vanguard, which have large passive fund ranges, were expected to be among the winners of the measures.

Fifth Third invests in 5-year network upgrade as part of $ 112M contract (American Banker), Rated: A

Fifth Third Bancorp has made a major investment in its electronic network as part of an effort to modernize its branches and partner with fintech firms.

The Cincinnati company discussed the five-year project to upgrade its network Thursday at American Banker’s Retail Banking 2017 conference in Miami. Part of a $112 million renewal of a preexisting contract, the upgrades will allow customer videoconferencing with remote experts, Wi-Fi inside branches, distance learning and real-time data feeds to fintech partners.

Fifth Third has already begun piloting self-service video kiosks in its branches. People tend to be intimidated at first, but once they use a video teller they become comfortable, said Jerry Frederick, chief infrastructure officer at Fifth Third. Wi-Fi in the branches is allowing staffers to help customers using computer tablets.

Important Fintech Terms to Help You Understand the Fintech Industry (TechBullion), Rated: A

According to a report by PwC, the cumulative investments in the fintech sector will exceed $150 billion by 2019. The report also notes that 20 percent of financial services businesses will be taken over by fintech startups by 2020. Here are 10 important terms to help you understand the industry.

Payment Gateway refers to a service provider authorizing credit card payments. It acts as an intermediary between an online payment portal and a financial institution such as a bank.

Coined by the UK Financial Conduct Authority (FCA), RegTech is a combination of two terms; regulation and technology. It refers to the systemic changes taking place in the fintech industry where traditional regulation would not be effective. RegTech makes use of blockchain, big data, cloud technology and artificial intelligence making it a fast and effective method.

KYC is the acronym for “Know Your Customer.” The phrase is widely used in the fintech and financial services sector as a whole. It refers to the procedures that companies should use in identifying their customers and determining the legality of their transactions. The object of KYC procedures is to combat money laundering.

P2P Lending is the short form for peer-to-peer lending. P2P lending refers to a modern development where one can obtain a loan from another individual without involving a financial institution acting as an intermediary. It is a way of obtaining social loans.

What do you want to ask SoFi CEO Mike Cagney at Disrupt NY? (TechCrunch), Rated: B

Today, however, the company is tackling an even wider range of services, from mortgages to personal loans, to wealth management and life insurance. And thus far, SoFi’s business has been a hit, with total equity financing of $1.9 billion.

I’m going to have Cagney on stage in a fireside chat, and I’ll have plenty of my own questions.

But, in the spirit of social sharing and community that SoFi aims to espouse, I’d like to hear what you want to ask Cagney. You can send me your questions anonymously, or by email: remember to put “SoFi Disrupt” in the subject heading.

House Committee Schedules Hearing on the State of Bank Lending (Crowdfund Insider), Rated: B

The Subcommittee on Financial Institutions, part of the House Financial Services Committee, has scheduled a hearing on the state of bank lending in the US. The hearing will take place at 2PM Tuesday, March 28th. Typically these hearings are live-streamed on the HFSC website.

United Kingdom

RateSetter provides update on wholesale lending (P2P Finance News), Rated: AAA

The peer-to-peer lender stopped taking on new wholesale partners last December, after it emerged that the City watchdog had concerns about the practice within the P2P sector.

RateSetter added more details to its annual performance table earlier this month, introducing new sub-categories that include a breakdown of how much of the funds are channelled to wholesale lending.

Last month, the FCA confirmed its position on wholesale lending and highlighted that if a lending business borrows through a P2P platform and lends that money to others, it may be “accepting deposits”.

If the borrower does so without the correct regulatory permissions, this would involve a breach of the Financial Services and Markets Act (FSMA) and may be a criminal offence.

HOW I GOT STARTED: GRAY STERN OF LANDBAY (BQ), Rated: A

Of course. When I moved to the UK I had a very limited network here. Luckily, I met my co-founder and CEO John Goodall very early on (July 2013). He had just completed his MBA and had been looking at the burgeoning peer-to-peer lending space – so we were both looking at the opportunity from different sides (John as a saver, and me as a property investor). It was a logical step then to launch Landbay as a peer-to-peer funded mortgage lender.

Our equity funding has been split between private individuals and a number of institutional investors, including a hedge fund and the listed company Zoopla Property Group. As a mortgage lender we also have to raise lending capital.

To date, we’ve been funded by retail investors, but over the course of this year we will be complementing this with significant institutional funding. Getting those facilities in place has been a challenge, but we’ve come out the other side with the capacity to rapidly scale our lending operation.

As a mortgage lender we also collect a lot of data, so applying this data to help streamline other processes, say the provision of insurance, tax/accounting, conveyancing, property management – this is the logical next step. A streamlined process saves on time and cost – and my hope is that we can redirect these savings back into the properties themselves, creating better homes for more people.

How An IFISA Can Help You Save Tax (iexpats.com), Rated: A

Many peer to peer lenders offer IFISAs, but if you do not know about them, most do not tell you about the tax saving option.

Any income paid as interest on loans is wrapped in the ISA and remains tax-free. Money paid into an ISA is not taxed and any cash taken out is tax-free as well.

However, lending money online is risky, which is why the return is often between 5% and 7%, compared with the meagre returns from high street banks and building societies.

Expats remaining UK tax resident while on assignment abroad still pick up ISA tax breaks, but non-residents do not.

European Union

In blow to London, EU considers passporting for fintech services (Reuters), Rated: AAA

The European Commission could introduce EU passporting and lower regulatory requirements for financial technology firms, moves that could undercut London’s leading position in “fintech” as Britain gets ready to leave the European Union.

The EU executive’s vice president Valdis Dombrovskis said on Thursday that the Commission is considering how to regulate the expanding sector to encourage its development in Europe, while protecting consumers from risks that may emerge.

He said the Commission was exploring new rules that would give fintech companies passporting rights to expand across borders and operate anywhere within the EU’s single market.

That could threaten London’s status as the European hub for fintech companies, because firms based there are likely to lose their passporting rights when Britain leaves the bloc at the end of a two-year divorce process due to start next week.

RBS mulls mortgage robo advice service, shuts 158 branches (AltFi), Rated: A

The Royal Bank of Scotland is testing its robo advice services for mortgage loans and expects to make a decision on whether to roll it out by the end of the third quarter.

The government-owned bank has already cut hundreds of jobs and replaced them with “robo” like advisors, in an attempt to cut costs.

China

China is new leader in fintech worldwide with 39% of global volume (e27), Rated: AAA

2016 became the first year when the US lost its dominant global leadership in fintech  –  lost to Asia! Only the previous year, Asian fintech was twice smaller than the US, and just last year, it easily surpassed the US, accounting for 47 per cent of the global volume, as you can find in the new issue of Money Of The Future 2016/2017 fintech report.

While China dominates Asian fintech market by amount of funding, India is number one, in terms of the number of fintech deals (Paytm is the leader).

Fintech helps Chinese SMEs get loans (Straits Times), Rated: A

Mr Li Dongrong, President of the National Internet Finance Association of China, said financial technology, called fintech in short, can help solve the “last mile” problems of delivering banking services to those in remote areas. “In this age of mobile finance, we can achieve a breakthrough in this,” he added.

Indeed, in the last three years, JD Finance, the online finance arm of e-commerce giant JD.com, has lent more than 250 billion yuan (S$50.7 billion) to over 100,000 small business, and given credit worth tens of billion yuan to some 4 million farmers, said Mr Chen Shengqiang, chief executive of JD Finance.

China: WeiyangX Fintech Review (Crowdfund Insider), Rated: A

On March 15, the People’s Bank of China issued a report “Development of payment services in rural areas” to summarize and analyze the payment business in China’s rural areas during this past year.

By the end of 2016, the number of users of online banking has witnessed impressive growth in the rural areas, and online banking transactions also grew significantly.

Overall, in the rural areas, online banking maintained stable growth, and mobile banking continued to grow at a rapid speed. While telephone banking transactions fell significantly.

On March 13, Chunghwa Post announced that it would launch a cross-border payment business in April this year with Alipay.

On March 16,Yirendai released its financial results for Q4 of 2016 and full year of 2016. According to the report, the net income was RMB 1.1164 billion (US$160.8 million), achieving a 305% year-on-year growth. However, the subprime loans accounted for around 90% of the total loans, which would be a severe potential risk for the company’s long term development.

India

Fintech Tracker: Can CreditMonk Make User Reviews Relevant To Small Business? (Bloomberg Quint), Rated: AAA

That’s the idea behind financial technology firm CreditMonk – an open-source platform that allows businesses to rate each other based on payment behaviour.

The company is creating a database which clients can access to get an idea of the payment track-record of firms they may be dealing with. This is not unlike the information that credit bureaus like CIBIL provide. The difference is that while CIBIL gets its data on repayments of loans from banks and financial institutions, CreditMonk depends on ratings generated by users.

The process of rating a company on the website is similar to rating a hotel on a website like TripAdvisor. A reviewer first has to sign in to the website and disclose which company they represent. A company that is listed on the website can then be rated on a scale of one to five on the basis of various parameters.

The reviewer can choose to post the review anonymously on the website but since a log-in is mandatory to write a review in the first place, CreditMonk can investigate claims of a false review, if such a situation arises, Doongursee said.

CreditMonk is likely to face a challenge in building credibility while it sets up its database, according to Mahesh Murthy, a venture capitalist, and a co-founder at Seedfund.

Mobetize Expands B2B Data Top-Up Service to India with Smart Charge (Korea IT Times), Rated: AAA

Mobetize Corp. in Vancouver Canada, a provider of  mobile financial services (MFS) technology for the multi-billion dollar business to business (B2B) segment of the Fintech as a Service (FaaS) sector announced the expansion of its B2B Data Top-up/Gifting service to India with smartCharge from the press release of Globe Newswire on March 24.

Mobile data traffic is expected to increase by 800% on a global basis within five years.

During 2016 alone, India experienced significant growth in mobile traffic – up 76% from last year, and by 2021, consumer mobile traffic in India will grow 7.4-fold at a Compound Annual Growth Rate of 49% year over year. Much of this growth will be fueled by pervasive consumer adoption of smartphones, smart devices and the use of machine-to-machine connections with an estimated 1,380 million mobile-connected devices by 2021.

Asia

Lufax plans online platform as part of transformation from P2P to wealth management company (SCMP), Rated: A

Lufax, China’s biggest peer-to-peer (P2P) lender backed by Ping An Insurance, is planning to set up a platform to facilitate global asset allocation for middle income earners in Asia and Chinese investors.

The Singapore-based platform will be launched this year, according to Lufax chief executive Gregory Gibb.

The company will also target middle class Asian investors in countries such as India and Indonesia, who want to invest internationally with smaller amounts down to US$10,000.

The challenge for Lufax is how to communicate with customers using standardised information and tell them of investment risks and opportunities via a mobile phone screen – all in 30 seconds to one minute.

Lufax was valued at US$18.5 billion in a January fundraising and is in talks with four investment banks – JP Morgan, Citigroup, Citic Securities and Morgan Stanley – for a planned initial public offering in Hong Kong.

Africa

IT Consortium CEO calls for regulatory postponement on Fintech (Ghana News Agency), Rated: AAA

Mr Romeo Bugyei, Chief Executive Officer of IT Consortium has appealed to government to allow the Financial Technology (Fintech) industry in Ghana to grow and be fully established in order to foster the growth of financial inclusion.

Mr Bugyei, who runs IT Consortium, a Fintech organisation engaged in payment aggregation and enabling the use of systems for financial services, said Fintechs help to make things cheaper by giving alternative ways of banking using digital or technological solutions.

He explained that because Fintechs were currently not regulated, they were required to partner with banks when doingtransactions that required depositing, which meant that the banks indirectly regulated Fintechs.

He said the central bank, at the meeting held with Fintechs, declared its intention to leave the sector unregulated for the time being, but said it would monitor the sector to know the technologies being used and guide where there were problems.

He stated that the Bank of Ghana was one of three central banks globally, including the central banks of Philippines and Mexico, that had been selected by BFA Global, to participate in a programme funded by the Gates Foundation called ‘Regtech for Regulators Accelerator (R2A)’ designed to help pioneer the next generation digital financial supervision tools and techniques

Authors:

George Popescu
Allen Taylor