Wednesday July 11 2018, Daily News Digest

Change Year to Year in Commercial loans

News Comments Today’s main news: PayPal is on an acquisition binge. Financial advisers eschew P2P lending. Ant Financial to go all in on the blockchain. 51 Credit Card IPO priced at HKD 8.50 per share. Today’s main analysis: Consumer debt increases in May. Today’s thought-provoking articles: Business loan drought ends for banks. Germany’s crowdfunding market hits $588M. Brazil leaders want […]

Change Year to Year in Commercial loans

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China/Hong Kong

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United States

PayPal is leading a payment company acquisition binge (Quartz) Rated: AAA

PayPal is tearing through a flurry of payment company acquisitions, having snapped up four in just a five-week period this year.

This year has already been a record for payment company deals, with $46 billion in acquisitions (paywall) though June, according to Dealogic. That compares with $33 billion in total for last year

Recent acquisitions include iZettle, a Swedish mobile payments company, and Hyperwallet, which businesses can use to pay employees around the world (the deal size is only shown if it has been verified by Pitchbook):

Source: Quartz

Business-Loan Drought Ends for Banks (Wall Street Journal) Rated: AAA

Preliminary second-quarter data from the Federal Reserve indicate the year-over-year growth rate of business loans rose to 5.5% in late June from less than 1% near the end of 2017. The upturn marks the reversal of a prolonged slump in business-loan growth that began in earnest about two years ago.

For banks, the acceleration in lending may help lift results when firms report quarterly results this month. Profits from lending are a major component of bank earnings and grow when total loans increase or rates on loans rise. Business-loan growth often helps on both fronts because these credits typically carry floating rates that allow banks to capture rate increases.

Source: Wall Street Journal

Consumer Debt Increases In May (PYMNTS) Rated: AAA

New data shows that U.S. consumer debt rose in May by the most in six months, showing that Americans were more comfortable with spending midway through the second quarter. The data from the Federal Reserve shows an increase in revolving debt, which includes credit cards, as well as a boost in non-revolving debt that includes educational and auto loans.

Source: Lending Tree

This latest news comes after LendingTree, the nation’s leading online loan marketplace, released its first Consumer Debt Outlook in May 2018, finding that Americans owe more than 26 percent of their income on consumer debt, up from 22 percent in 2010. That means Americans are on track to accumulate a collective $4 trillion in consumer debt by the end of this year. In fact, over the past five years, Americans have been accumulating more debt, and for nearly two years, consumer credit has grown at a steady rate of 5 to 6 percent annually.

Source: Lending Tree

See the full results of the study here.

Insolvent insurer causes headache for Va. bank’s student lending (American Banker) Rated: A

Virginia National Bankshares in Charlottesville, Va., will increase the loan-loss allowance for its student loan portfolio after an outside insurance carrier was shut down.

The $625 million-asset Virginia National said in a regulatory filing Thursday that ReliaMax Surety, a South Dakota insurer that issued surety bonds tied to purchased student loans, is insolvent and was placed into liquidation last month.

JPMorgan Chase launched an online bank for millennials called Finn, and I prefer it to the real thing (Business Insider) Rated: A

Finn, a mobile bank built by Chase, recently rolled out nationwide. And I gave it a try.

In addition to offering bread-and-butter checking and savings account functionality, it also offers services many firms in the personal finance startup space have built their businesses around. These include automatic saving tools and charts to see where you are spending money.

Personally, I think the app is a better experience than my traditional Chase mobile bank, since it more easily allows you to send checks from the app, save money in an easy and fun way, and keep track of your spending. It’s also free. And there’s no overdraft fees. But it’s not without flaws.

The Past, Present and Future of the ILC Bank (DeBanked) Rated: A

Last Thursday, Square confirmed that it withdrew its application to the FDIC for depository insurance, which would allow it to take deposits from customers in all 50 states. The company said it plans to refile.

Regardless of the reason for withdrawing the application, this news revives the debate over whether fintech companies should be allowed to become banks in the first place – at least in the manner that Square and SoFi have sought to attain bank status.

How to invest $ 100 regularly and make it a fortune? (Global Banking and Finance) Rated: A

Don’t let your money sit, let it work for you. I know I sound bit weird, but you can put your money to work. No! you do not need the fortune to invest in, just $100 is all that is required. Though investing an amount may appear bit difficult in starting but once you get a hold on the things, it will become easy eventually. Investing is all about making a choice, you can invest $100 and can earn thousands in future or you can just spend this amount on a dinner.

Lending Club

This could be another great option to make the investment in. Lending Club is basically a peer-to-peer lending, where borrowing and lending takes place between the ordinary folks. This is one of the largest online market in the world, that connects the investors and borrowers.

Can I turn $ 100k into $ 1 million in a decade? (Money Rates) Rated: A

A decade is a fairly short period of time, so think about what it will take to grow your initial investment by a factor of ten in ten years. With no additional investment, turning $100K into 1 million would require a compound average annual return of 25.9 percent, which is pretty unrealistic. Historically, the U.S. stock market has averaged a return on investment of about 10 percent per year.

Peer-to-peer lending has created a relatively new form of income investing in which you can invest by making personal loans. Higher risk loans produce higher income yields but are also more likely to default. You can manage your risk somewhat by choosing lower risk loans, focusing on shorter term loans and diversifying by funding small amounts of many different loans.

Credibly Hires Former CIO of FBI to Drive Information Technology Strategy (Crowdfund Insider) Rated: B

Credibly, a small and medium-sized business lending platform, announced on Tuesday it has hired Jerome Pender to drive its information technology strategy. According to the online lender, Lender is a seasoned professional more than three decades of experience in information technology. He has experience in business systems, enterprise architecture, technology, and governance.

Prior to joining Credibly, Pender was the Chief Information Officer, Operating Partner, and Managing Director at Z Capital Partners. He also spent more than a decade at the FBI, serving as Chief Information Officer and Executive Assistant Director, as well as Deputy Assistant Director. Before the FBI, he held several leadership positions at UBS AG.

United Kingdom

Advisers eschewing P2P due to insurance ‘grey area’ (Peer2Peer Finance) Rated: AAA

FINANCIAL advisers are avoiding giving advice on peer-to-peer lending because they are worried it will not be covered by their professional indemnity insurance (PII).

Max Lehrain, chief operating officer at P2P property lender Relendex, said P2P investing is a “grey area” when it comes to PII.

Brendan Llewellyn, co- founder and director of communications platform Adviser Home, suggested PI insurers will decide whether or not to cover P2P investments on a case-by-case basis.

Open Banking – a complete failure? (The Finanser) Rated: A

PwC recently delivered a report on open banking – Open Banking market could be worth £7.2bn by 2022: PwC – PwC UK. Some notable points raised;

The principle growth areas are projected as account aggregation, analytics of expenditure and financial product comparisons. This is difficult to understand given that none of these areas is new – in fact the information is being delivered differently – that is all that has changed. And in most cases (relative to challenger banks) the data delivered is very limited, preventing innovation on these pre-existing services. The major market comparison engines pull richer data through a combination of private means and screen scraping, and have made clear that open banking APIs will not replace this in their current form.

Oblix secures FCA authorisation for P2P lending platform (Bridging & Commercial) Rated: A

Oblix Capital Technologies has been granted authorisation as a P2P firm by the FCA.

The authorisation allows the subsidiary to the London-based specialist lender Oblix Group to operate a regulated electronic lending platform.

Oblix has enjoyed a strong period of growth and hopes the launch of its P2P lending platform will supplement this.

NEW CHIEF EXECUTIVE FOR PROPERTY LENDER (Insider Media) Rated: B

A new chief executive has taken the helm at a Birmingham-based peer-to-peer property lender. Michael Bristow has assumed the role at CrowdProperty after acting as a non-executive director.

Bristow was previously managing partner at Growth Strategy, a property technology investor and private equity advisory business.

China/Hong Kong

150 Billion Dollar-valued Firm Ant Financial Will Go All in on Blockchain (Toshi Times) Rated: AAA

Ant Financial: you may never have heard of it if you don’t live in Asia, but its payment platform Alipay is one of the biggest payments facilitators in the region, bigger than Samsung Pay, Apple Pay, and Android Pay in most Asian countries.

It is part of Jack Ma’s $450+ billion valued Alibaba empire and recently raised significant investment from investors worldwide pumping its own value up to a whopping $150 billion.

51 Credit Card’s IPO priced at HKD 8.50 per share (KrASIA) Rated: AAA

China’s 51 Credit Card, an online credit card management platform, is set to price its IPO at HKD 8.5 per share at the bottom of its indicative range of between HKD8.5 – 11.5, according to various reports.

The company is set to raise an estimated US$129 million in the flotation, according to a Tencent report.

Its net profit is up nearly 1304% in 2017 from a year earlier, standing at $112 million (RMB 744 million). However, it has been operating in a negative cash-flow for the last three years and its cash and cash equivalents dropped to 1.26 billion yuan in 2017 from 2.1 billion yuan in 2016.

Hong Kong digital bank Neat nabs tidy $ 2m funding (FinTech Futures) Rated: A

Hong Kong-based digital bank Neat has secured a new round of $2 million funding from Dymon Asia Ventures and Portag3 Ventures.

According to Neat, this investment will be used to unveil some new features and tools; and for recruitment.

For the features and tools, it offers a vote option on its website to create a “wishlist”. (A common ploy among new firms and banks.)

Chinese Auto Sales Run Into a Lending Roadblock (Wall Street Journal) Rated: A

China’s crackdown on shadow banking has caused some high-profile blowups. Now it’s driving the country’s car makers off course.

One big target for Beijing has been the proliferation of peer-to-peer lending platforms—total transactions on these ballooned to 2.8 trillion yuan ($423 billion) last year, more than 10 times the total in 2014, according to industry website wdzj.com. The worry is that such platforms have become a hotbed for embezzlement, or could simply run out of money. Local media reported dozens of them collapsing.

Tighter rules may trigger P2P industry shakeout (ECNS) Rated: A

Only one out of the nine peer-to-peer lending companies in China might be able to survive as top financial regulators are stepping up the pace of scrutiny to curb risks caused by the massive unregulated sprawl in the past few years.

The central government plans to maintain “pressing posture of severe attack” to clamp down on activities violating laws and regulations in internet finance, extending the ongoing nationwide crackdown for another year, Pan Gongsheng, deputy governor of the People’s Bank of China, the central bank, said during a meeting on Monday.

Dianrong Names Tony Zhang Chief Technology Officer (PR Newswire) Rated: B

Dianrong today announced the appointment of Tony Zhang as Chief Technology Officer (CTO). Mr. Zhang will report to Long Hsiang Loh, CEO of Dianrong.

Mr. Zhang has nearly two decades of experience in science and technology, with in-depth knowledge of financial and internet technology as well as company management. He worked in Silicon Valley for 11 years, including eight years at PayPal in various leadership roles. He provided recognized technical and business leadership across a range of PayPal’s core product features and functionalities.

International

LendLedger (LOAN Token): Decentralized Blockchain Crypto Lending Market? (Bitcoin Exchange Guide) Rated: A

LendLedger hopes to be the solution to these problems by opening up global lending markets. The platform is changing the face of lending to the underserved segments. Already this platform has processed tens of millions of dollars in loan requests in India, which has led to the provision of loans to hundreds of thousands of borrowers in the informal and small business sectors in 40 Indian cities. This platform is opening up new financial markets across the globe.

The platform unlocks data on informal and small business borrowers making it possible for lenders to offer loans to the informal traders. LendLedger seeks to bridge the $2.6 trillion lending gap between the institutional lending capital and informal borrowers. The aim of the platform is to come up with a lending market that is both inclusive and profitable for all the participants.

Leading Crypto-Backed Lending Networks Join Forces To Unlock Mass Adoption (Payment Week) Rated: B

Etherisc, the global, decentralized insurance platform for collectively building insurance products, has announced the launch of a blockchain consortium to create Collateral Protection Insurance (CPI) for the crypto lending market. The consortium aims to address a current, significant barrier to mass adoption by facilitating safe participation in crypto lending, clearing the way for more institutional players to enter the market.

The founding members of the lending consortium include bZx, formerly b0x, a decentralized margin lending protocol and liquidation oracle marketplace; Celsius Network, a peer-to-peer decentralized borrowing and lending platform; Colendi, a comprehensive credit scoring protocol and microcredit platform; ETHLend, a peer-to-peer lending smart contract on the Ethereum blockchain for lending ether; Lendroid, a unique non-custodial lending platform working to enable a range of collateralized loans, advanced auction markets and trust-independent margin trading; Libra Credit, a lending ecosystem that facilitates open access to credit; Nexo, a platform for instant crypto-backed loans, powered by the 10-year-old leading European FinTech group Credissimo; Ripio Credit Network, a protocol based on smart contracts and blockchain technology, which brings enhanced transparency and reliability in credit and lending; and Sweetbridge, a blockchain-based economic framework that transforms supply chain, logistics, and unleashes working capital.

European Union

Germany’s crowdfunding market reaches $ 588 million (Business Insider) Rated: AAA

At the end of June 2018, small- and medium-sized businesses (SMBs) in Germany had raised €500 million ($588 million) using equity crowdfunding and crowdlending marketplaces, according to a report from crowdfunding.de.

Source: Business Insider

Here are a couple of key takeaways from the report:

  • Real estate companies use crowdfunding most. Real estate accounted for over half, 53.3% of all the crowdfunding in Germany, making it the most common segment to opt for this funding method. It was followed by enterprise with a 42.6% share of funding raised and energy at 3.8%. Other segments combined only had a 0.3% share, showing that crowdfunding is largely dominated by two areas. However, as crowdfunding becomes more popular, we might see other sectors increasingly choosing it.
  • Unsurprisingly, a digital real estate investment provider had the largest share of funding among platforms. Germany-based Exporo raised 32.3% of the total, followed by UK-based Funding Circle with 14.4%. This shows that foreign companies also have a lot to gain from Germany’s crowdfunding market.

Read the full report here.

Australia

Robo-advice users in for the long haul (Financial Standard) Rated: A

Insights from the automated investment platform show 36.5% of its users are attempting to grow wealth outside of super, while 28.6% are using it to accrue retirement savings.

The top reasons driving use of automated investment and advice platforms were lower fees and investment diversification, highlighted by 18.3% and 16.7% of users respectively.

Viewing the data through a gender lens, half of Six Park’s female clients are checking the progress of their portfolios at least once a month and their most common goal is the ability to purchase a property in the near-term; 25% of females flagged this, compared to just 10% of men. In contrast, more than half of Six Park’s male clients are checking their portfolios on a daily or weekly basis.

Latin America

Local leaders in Brazil look for investments in social impact (Impact Alpha) Rated: AAA

At the country’s first social finance forum in 2014, you could count the participants on one hand. All of them were in Rio and Sao Paulo. Equity crowdfunding and peer-to-peer lending were still in regulatory review. Few universities included social finance in their curriculum. All of that has changed. Today:

Asia

Credit manager AsiaCollect picks up $ 4.5m funding (FinTech Futures) Rated: AAA

Singapore-based credit management services (CMS) provider AsiaCollect has raised $4.5 million to date after closing its recent investment round led by SIG Asia Investments.

Dymon Asia Ventures, the venture capital arm of Dymon Asia Capital, a Singapore-based alternative investment management firm, returned to co-invest in this round after investing $1 million in AsiaCollect’s pre-series A equity round in August last year.

AsiaCollect offers CMS outsourcing, CMS advisory services, debt purchasing, and Software-As-A-Service (SaaS).

Authors:

George Popescu
Allen Taylor

Friday March 30 2018, Daily News Digest

Friday March 30 2018, Daily News Digest

News Comments Today’s main news: LendingClub grows short interest. Larry Summers resigns from LendingClub board. RealtyShares intros gap financing for projects under $20M. Mark Davies steps down from RateSetter board. Today’s main analysis: Heap’s behavior attribution platform. Today’s thought-provoking articles: Can Noto sell mortgages at his new SoFi post? China banks report drop in bad loans. Chinese families rack up […]

Friday March 30 2018, Daily News Digest

News Comments

United States

United Kingdom

China

Other

News Summary

United States

LendingClub Corp (LC) Sees Significant Growth in Short Interest (the Ledger Gazette), Rated: AAA

LendingClub Corp (NYSE:LC) was the recipient of a large increase in short interest during the month of February. As of February 28th, there was short interest totalling 31,244,316 shares, an increase of 11.0% from the February 15th total of 28,142,392 shares. Based on an average daily volume of 9,132,224 shares, the days-to-cover ratio is presently 3.4 days. Currently, 11.3% of the company’s stock are short sold.

Larry Summers Has Resigned From the LendingClub Board (Lend Academy), Rated: AAA

Yesterday, we learned that after nearly six years Mr. Summers will be leaving the board of LendingClub. He is being replaced by leading economist and Stanford professor Susan Athey. While she is not nearly as well known as Larry Summers she still brings serious economics clout to the board.

Heap launches behavioral attribution platform (Venture Beat), Rated: AAA

Source Heap

Heap is aiming to automate insights and is starting today with the launch of Heap Behavior Attribution. The new product is the industry’s first attribution product that measures behavior and does so in a way that requires no data science or engineering resources, the company said.

The Heap Behavioral Attribution measures standard marketing channels (i.e. Google and Facebook), and also ties in a set of broad user behavior, including email, customer relationship management (CRM), shopping cart, customer success, and either-or testing platforms. Examples include user behaviors stored in Salesforce, Marketo, Shopify, Autopilot, Optimizely, Oracle, and more.

Source Heap

It has more than 100 employees and 6,000 customers, including Twilio, Lending Club, App Annie, Morningstar, Monotype, and Casper.

 

RealtyShares Introduces Gap Financing Program For Projects Under $ 20 Million (Business Wire), Rated: AAA

RealtyShares today announced a gap financing program that delivers subordinated financing solutions to commercial real estate owners seeking higher leverage on the financing of projects under $20 million. The suite of solutions, which includes preferred equity, mezzanine debt, and second lien loans, helps commercial real estate operators get the capital they need to buy, refinance, or renovate commercial properties.

He Can Fix Your Student Debt, but Can He Sell You a Mortgage? (Bloomberg), Rated: AAA

As chief operating officer of Twitter Inc., Anthony Noto did a lot to calm the company’s perpetually anxious shareholders. On Feb. 26, however, Noto took over as chief executive officer of a financial technology startup, Social Finance Inc., or SoFi.

He’ll be facing increasingly tough competition. SoFi sees Marcus, the consumer-lending business started by Goldman Sachs Group Inc. in 2016, as the biggest threat, according to people familiar with SoFi’s thinking.

One question Noto will have to navigate is how much SoFi should use its own balance sheet—that is, hold on to the loans it originates as opposed to selling them to other investors. It currently keeps a slice of loans but sells off most of them. Holding loans allows a company to earn a stream of interest income, but investors generally put a lower value on financial firms than tech platforms.

SoFi says it plans to hold 500 events in 2018, up from 41 in 2015.

The wealth management unit, fully launched in May 2017, had $42.3 million in assets under management as of Jan. 18, according to Prosser.

 

Instant Financing Offers Drive Sales, Decrease Cart Abandonment (Retail Touchpoints), Rated: AAA

E-Commerce retailers in the U.S. recognize the value of instant financing offers, and 64% believe providing financing options through their online store is important to driving new and increased sales, according to a survey from Klarna. Another 46% believe such services decrease cart abandonment, which is a pressing concern for retailers.

Instant financing is a revolving line of credit that shoppers can apply for during online checkout, letting them spread payments out over time with low annual percentage rate (APR) offers. The option is particularly appealing to Millennials, as fewer than 33% of them carry credit cards, according to a 2016 Bankrate survey.

Retailers’ enthusiasm for online financing is shared by shoppers, and a 2017 Researchscape International survey conducted on behalf of Klarna found that consumers:

  • Prefer online merchants that offer instant financing (75%);
  • Want to be presented with an instant financing option when shopping online (47%);
  • Would spend more if given instant credit options when making a purchase (39%); and
  • Are very or completely likely to change retailers to use instant financing (28%).

FINANCE THEORY, LISTED EQUITIES, AND LIQUIDITY (AllAboutAlpha), Rated: A

A recent paper from Robeco discusses whether a liquidity premium exists in the stock market. The authors, David Blitz, Jean-Paul van Brakel, and Milan Vidojevic, conclude that “the evidence for such a premium is, at best, weak.”

Less politely, these authors refer to the whole notion of a liquidity premium as having been “challenged and debunked in various studies.”

Theory and Practice

In a sense there “should” be a liquidity premium. The more illiquid a stock, the more difficult it is to trade it, which on some models means that illiquid stocks are less attractive than liquid stocks, and should command a premium. One should have to be bribed to hold an illiquid stock just as one has to be bribed to hold a risky one.

BLACK ENTREPRENEURS, SMALL BUSINESS OWNERS NOT TAKING ADVANTAGE OF SBA OFFERINGS (Black Enterprise), Rated: A

Here is a surprising statistic: Over 80% of small business owners have never visited their local U.S. Small Business Administration office.

The finding was revealed as part of a random survey of 409 owners and senior leadership at small businesses by national online lender Fundera and online research firm Qualtrics.

Fundera also offers a list of other resources black entrepreneurs can tap into to help them get help with everything from how to run a small business to becoming a certified minority business.

Marketplace Lending Update #2: Another Rocky Mountain Remand (The National Law Review), Rated: A

In our prior Clients & Friends Memo “Who’s My Lender?” published on March 14, 2018, we analyzed two actions brought against marketplace lenders, one against Kabbage Inc. (“Kabbage”) in federal court in Massachusetts1 and the other against Avant in federal court in Colorado.2 In that memo, we noted that the Massachusetts action against Kabbage is proceeding to arbitration, while the action against Avant was remanded to state court.

Last week, Colorado courts issued several new rulings related to marketplace lending. First, the federal court in Colorado remanded another enforcement action brought by the Administrator of the Colorado Consumer Credit Code against Marlette Funding (“Marlette”),3 which had been doing business as a marketplace lender in Colorado under the name Best Egg. Following the reasoning in the Avant decision discussed in our prior memo, the court rejected the marketplace lender’s argument that Colorado’s usury laws were subject to complete preemption under federal law and therefore the court granted plaintiff’s motion to remand. As a result, Avant and Marlette will be forced to make their arguments that a bank is the “true lender” and that the Colorado Administrator’s usury claims are therefore preempted by federal law, and any other defenses, in Colorado state court.

KBRA Comments on Cross River Bank’s Settlement with the FDIC (Business Wire), Rated: A

The FDIC announced yesterday that it had reached settlements with Cross River Bank (“Cross River”) and Freedom Financial Asset Management (FFAM). Kroll Bond Rating Agency (KBRA) believes that the settlement and related consent order have a low likelihood of adverse impact upon the credit profile of Cross River and that of its parent, CRB Group, Inc. (CRB). While FFAM represents a very small portion of Cross River’s customer base, KBRA believes any adverse regulatory action draws heightened scrutiny to Cross River and the MPL industry, a factor already considered in the current ratings. Furthermore, KBRA believes that the matters cited by the FDIC were isolated instances and is not representative of pervasive issues with Cross River’s Compliance Management System (CMS). Nonetheless, we believe that has Cross River has since adopted enhanced compliance and reporting requirements consistent with FDIC guidance and incorporated enhancements to their CMS.

Enacomm and VOX Network Solutions to Provide Financial Institutions with Data-Driven Phone and Digital Assistant Banking (Global Newswire), Rated: B

VOX Network Solutions (VOX) has announced a partnership with Enacomm, Inc. (Enacomm) to bring Enacomm’s self-service solutions to VOX clients.  Through the reseller agreement, financial institutions will be equipped with VPA (Virtual Personal Assistant) banking and the Enacomm Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

Crypto Asset Expert David Drake Joins Advisory Board of Digits (Nothing in Particular Blog), Rated: B

Digits, a leading crypto company using technology aimed to combine the convenience of credit and debit card payments with the utility of cryptocurrency payments and to easily allow the consumer the ability to effortlessly pay for goods and services with crypto via their existing credit or debit card, announced today the addition of a highly respected crypto expert, David Drake, to its advisory board team.

United Kingdom

Betfair founder Mark Davies steps down from RateSetter board (Peer2Peer Finance), Rated: AAA

MARK Davies has stepped down from the board of RateSetter after more than six years.

Davies, who was part of the founding management team at e-gaming company Betfair, joined the board of the peer-to-peer lender as a non-executive director in November 2011 – just 13 months after the company’s launch.

Data gatherers should be regulated like financial advisers (Financial Times), Rated: A

There was a time in the UK when most people were under the impression that financial advice was free. They went to see an adviser. He gave them advice. They handed over their money to him to be looked after. They never got a bill.

Only when the government changed the laws in 2012 did they realise they were paying. A lot. They just hadn’t noticed for the simple reason that they did not physically pay it to the adviser.

Deal maker Numis on the front foot after M&A numbers surge (Evening Standard), Rated: A

The City broker, which worked on the Trinity Mirror takeover of the Daily Express, and the sale of cocktail bar Revolution, said sales would be “significantly ahead” of £53 million recorded last year.

Since September, the company has worked on big deals like  the Mirror-Express takeover, the £600 million float  of car insurer Sabre and  the Aveva tie-up with Schneider’s electrical business.

Numis is also lined up to work on AJ Bell’s £500 million float and Funding Circle’s £1.5 billion float later in the year.

Shares rose 1.5%, gaining 5.5p to 365p.

One year to Brexit: How to protect you finances (Money Observer), Rated: A

Brexit is officially one year away and the impact it is having, and will continue to have, on our financial lives is filling the pages of our newspapers and TV screens daily.

Foreign currency

Since the Brexit vote in June 2016, sterling has fallen significantly in value against the euro. The pound reached a high of €1.42 in October 2015, but at the time of writing on 20 March 2018, it was worth 21 per cent less at €1.14, according to currency specialist Moneycorp.

Typical transaction costs for using your card abroad are between 2.75 and 2.99 per cent, and you will be charged a non-sterling purchase fee of up to 1.25 per cent on top.

Each time you use an ATM abroad, you can also be charged anything from £1.50 to £2 a time, so it is wise to withdraw larger sums in one go or to get a specialist overseas card that allows fee-free spending and cash withdrawals, according to Nick England, chief executive of travel money firm EasyFX.

Where are the current UK BTL hot spots? (Property Reporter), Rated: B

The latest UK buy-to-let index from property finance experts, LendInvest, has shown that the Midlands appears unaffected by the UK’s current house price growth slowdown, sending three of its largest cities into the top 5 places to invest – but where came out top?

  1. 1.  Colchester
  2. 2.  Northampton
  3. 3.  Leicester
  4. 4.  Luton
  5. 5.  Birmingham
  6. 6.  Manchester
  7. 7.  Ipswich
  8. 8.  Brighton
  9. 9.  Rochester
  10. 10.  Norwich

Together appoints new regional development director (Bridging & Commercial), Rated: B

Together has expanded its professional sector team with the appointment of Mel Fourie as its new regional development director.

Mel joins the specialist lender from RateSetter, where she was its strategic partnership manager covering the North of England.

China

Big four China banks report first drop in bad loans in 6 years (Asian Review), Rated: AAA

Industrial and Commercial Bank of ChinaChina Construction BankAgricultural Bank of China and Bank of China had a total of 765.7 billion yuan ($122 billion) in non-performing loans on their books at the end of 2017, marking a 0.2% drop on the year.

Non-performing loans ratios — a gauge of asset quality — averaged 1.57% at the four state-owned lenders, 0.15 percentage point less than at the end of 2016. “Special mention” loans with an elevated potential for default decreased 0.9% to 1.59 trillion yuan. All four banks had reported 2017 results as of Thursday.

Famous for hoarding cash, Chinese families are now racking up debt on an unprecedented scale (South China Morning Post), Rated: AAA

Chinese families with their long tradition of saving money are now accumulating debt at a rate never been seen before, according to data compiled by a state-backed think tank in Beijing.

The country’s household leverage ratio – or the ratio between debt incurred by families and gross domestic product – surged to 49 per cent at the end of last year from 17.9 per cent at the end of 2008, going up about 3.5 percentage points annually, the think tank said in a report released on Thursday.

So in the period from 1993, when the data became available, to 2008, the household debt ratio went from 8.3 per cent to 17.9 per cent, with an annual rise of 0.65 percentage points.

According to its report, average disposable income could cover standard loan interest and mortgage repayments, while households were still sitting on 70 trillion yuan (US$11.13 trillion) worth of bank deposits and cash overall – enough to offset the 40 trillion yuan in outstanding bank debt.

Dianrong and Sino Guarantee Announce Lenders Protection Plan (PR Newswire), Rated: A

Dianrong and China United SME Guarantee Corporation, known as Sino Guarantee, one of China’s leading guarantee companies, today announced a new lenders protection plan for Dianrong customers. The plan, which went into effect at the beginning of 2018, is designed to provide third-party protection in the event of a loan default.

Dianrong’s borrowers now have the option to purchase the Sino Guarantee lenders protection plan, which further improves the borrower’s risk and credit profile. Sino Guarantee will then use a dedicated fund account to pay lenders the loan principal and any outstanding interest in the event of a loan default covered by the plan.

European Union

Spotcap Roundtable: Customers Expect More as Fintech Boosts User Expectations (Crowdfund Insider), Rated: A

Spotcap, an SME focused online lender based in Berlin, recently held a roundtable on the future of finance. Individuals from prominent firms joined with the Fintech lender to assess progress made so far. Representatives from Deutsche Bank, Figo, GP Bullhound, McKinsey along with Spotcap debated how the financial ecosystem model will evolve, the implications for the customer, and the challenges and opportunities for Fintechs and more traditional financial service firms.

International

Alt.Estate To Become an Industry Standard for Blockchain-Based Real Estate Transactions (the Merkle), Rated: A

Using the blockchain technology to disrupt the real estate market, Alt.Estate has a strong potential to become an industry standard for the blockchain-based real estate transactions. A strong technology stack, a go-to-market strategy with 10X leverage, a working prototype with three tokenized apartments in key geographies, strong community support, and a solid pipeline of enterprise deals all position Alt.Estate as a win-win solution for real estate developers and investors.

Estimated at $217 trillion, the real estate market is worth nearly 2.7 times the global GDP.

“ERC-20” FOR REAL ESTATE

Developed two years ago, ERC-20 has quickly become a significant industry standard for all the tokens on Ethereum. Inspired by the approach of ERC-20 developers, Alt.Estate’s Protocol aims to become an industry standard for the tokenized real estate.

 

Asia

This Startup Combines FinTech And Traditional Lending Circles To Empower Women (Forbes), Rated: AAA

When Fonta Gilliam joined the foreign service out of school, she didn’t expect it would lead her to entrepreneurship. But after seeing community lending in practice throughout her work in East Asia and Africa, Gilliam wondered what would happen if she combined these traditional practices with new financial technology.

It all started when Gilliam was working in the visa department at the embassy in South Korea.

The practice of a lending circle is a kind of informal savings program. Say you have 10 members who each put $100 into the lending club each month. One member collects the full 1,000 each month and each month the total amount rotates until 10 months has passed and the circle starts back at the beginning.

Proptech – the emerging disruption in real estate (The Business Times), Rated: A

In proptech, three forms of technologies are particularly pertinent and pervasive: blockchain, augmented reality (AR) and artificial intelligence (AI). In Singapore, these technologies are already making their impact felt in the real estate industry with their adoption by startups, global corporations and the government.

Blockchain: facilitating real estate transactions

A form of distributed ledger, the blockchain is distributed across nodes, locations and even countries. Being decentralised, it eliminates the need for an intermediary to process, validate or authenticate transactions.

Artificial intelligence: extracting insights from data

The most valuable tech companies (Facebook, Amazon, Netflix, Google) are where they are today because of the trove of consumer data they possess and continue to accumulate. In the realm of technology, data is wealth, and AI is the key to unlocking this wealth. AI, as the name suggests, is teaching the computer to think like a human, making sense of the data fed to it.

Proptech: transforming real estate in Singapore

Cognisant of the need to keep up with change, the Singapore government has introduced an Industry Transformation Map (ITM) for the real estate industry. The ITM is focused on using automation, digitised contract templates, and predictive systems to streamline processes for property transactions and facilities management.

MENA

How GISC LoanCoin Network (GIS) is democratizing Credit with its Blockchain P2P, B2B & Altcoin Lending Platform (MenaFn), Rated: AAA

GISC uses a strict proprietary model composed of a fundamental and technical analysis strategy. So when their analysts suggested that cryptocurrency are poised to outperform in developing nations for some years to come, the company dedicated to coming up with a solution that would basically democratize lending of blockchain digital assets on a global scale.

GISC LoanCoin Network platform is designed with an aim of bridging traditional lending services to the blockchain and opening access to the non-banked. GISC LoanCoin Network is a Ethereum blockchain utility token based lending platform that will support P2P and B2B lending by eliminating intermediaries like banks and other financial institutes. It’s a platform where borrowers can interact and deal directly with the lender and GIS token holders can earn income by becoming Lenders or Guarantors.

GISC differs from other lending platforms like ETHLend and SALT in a way that GLN lends against Altcoins and this feature is yet to be introduced by any other lending platform. The platform usually takes a low, around 2% transaction fee for credit assessment/KYC-AML/ ID verification and connection through the network.

Authors:

George Popescu
Allen Taylor

Monday March 19 2018, Daily News Digest

Monday March 19 2018, Daily News Digest

News Comments Today’s main news: Robinhood valuation tops $5B. MarketInvoice reaches 2B GBP milestone. Lendy reaches 20K investors. Senmiao Technology prices IPO at low end. Merchant Advance Capital closes $30M debt facility. Today’s main analysis: CLUB 2018-NP1 Deep Dive. Today’s thought-provoking articles: Helena, Montana wants to be tech talent destination. More SMEs plan to apply for finance. The third age of credit. Australian […]

Monday March 19 2018, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

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United States

Valuation for Robinhood, Maker of App That Offers Free Stock Trades, Tops $ 5 Billion (Wall Street Journal), Rated: AAA

Robinhood Markets Inc. is set to be valued at about $5.6 billion in a new funding round, according to people familiar with the matter, a fourfold increase in just one year that reflects the stock-trading app’s soaring popularity among millennials.

The Silicon Valley startup is in the final stages of securing around $350 million from a group of investors led by Russian firm DST Global, according to the people familiar with the fundraising.

Helena, Montana wants to be a new destination for engineers after landing a SoFi office (VentureBeat), Rated: AAA

With a population of slightly more than 31,000, Helena is one of the country’s smallest state capitals. It’s not surprising, given that the entire state of Montana is home to only 1 million people. In addition to being tiny, Helena is also incredibly remote. The closest large metropolitan areas are Salt Lake City and Seattle, which are both nearly 500 miles away.

Those qualities shouldn’t make Helena a candidate to house a large engineering team for one of Silicon Valley’s most valuable unicorns. However, SoFi, the online personal finance company focusing on student loans, mortgages, and personal loans, has multiple locations in the city that together house roughly 140 employees — many of them programmers and engineers, as I learned on a trip last month to Helena.

Amazon’s footprint grows, CLUB 2018-NP1 Deep Dive (Peer IQ), Rated: AAA

Amazon continued its foray into the lending sector this week by offering a a robo advisor. Amazon is partnering with banks where they lack a clear regulatory swim lane.

CLUB 2018-NP1

Source: Peer IQ

This is the largest near-prime deal that has been issued so far. The deal has 8,237 loans more than the CLUB 2017-NP2 deal and the average loan balance is $422 lower. The weighted average FICO on LC’s near-prime deals is 639, lower than that on AVNT 2017-B.

Source: Peer IQ

Kushners’ Cadre Startup Benefited From Misleading Rent Filings (Bloomberg), Rated: A

Cadre owned about 60 percent of three rent-regulated buildings in Queens sold by Kushner Cos. in April 2017. The $59 million price tag was an 80 percent premium over what they paid in January 2015, property records in New York show. It was the first known deal that Cadre, then a fledgling company, took from purchase to sale, and the high rate of return in a short time was touted as a proof-of-concept for its web-based investing platform.

Kushner Cos., Cadre’s operating partner at the properties, told the city the buildings had no rent-regulated tenants when applying for construction permits to update the buildings in 2015 but tax records filed later showed almost 100 such residents, according to a report by the Associated Press. The number of tenants fell precipitously prior to the buildings’ sale, the wire service reported.

 

U.S. Appeals Court Voids Obama-Era ‘Fiduciary Rule’(Financial Advisor), Rated A

A federal appeals court on Thursday voided the U.S. Department of Labor’s “fiduciary rule,” an Obama administration measure adopted in 2016 meant to curb conflicts of interest among providers of financial advice to Americans planning for retirement.

Study Finds Link Between Payday Loans, Poor Health (LendEDU), Rated: A

A new study has disclosed that almost 40 percent of people seeking short-term, high-interest loans from lenders such as payday loan companies are likely to report their health as either fair or poor.

Short-term loans have grown from a $10 billion industry in 1998 to $48 billion in 2011, reported The Guardian. Interest is extremely high on these loans—up to 600 percent per year—and the funds, typically utilized by low-income borrowers, are used for necessities including car repairs, food, and rent, according to the study.

Short-term loans have grown from a $10 billion industry in 1998 to $48 billion in 2011, reported The Guardian.

How Citizens Bank is reaching millennials (Tearsheet), Rated: A

Citizens Bank is selling millennials a comfortable, enjoyable life of travel, adventure and everything short of avocado toast in an effort to grow its student loan refinancing business.

At the end of 2017, Citizens’ student loan book was valued at $8.1 billion, according to the company. It’s a space which startups have forged a path, with CommonBond funding $1.5 billion loans since it was founded in 2012, and the value of SoFi’s student loan originations at $14 billion. Still, banks have unique advantages when it comes to the student loan refinance market, like a strong resource base to invest in marketing, and a book of business based on deposit products that lowers their costs.

Goldman Sachs launches in-house incubator (Tearsheet), Rated: A

Goldman Sachs has launched an in-house incubator to allow its employees to bring innovative ideas and solutions to life, and to Goldman.

GS Accelerate is accepting applications for “ideas that can deliver best-in-class solutions for our clients, take Goldman Sachs into new business areas, manage risk and tackle inefficiencies in our operations,” according to an executive memo sent to staff Thursday and shared with Tearsheet. Goldman declined to comment further.

Developing The Application of Anti-fraud Technology to Enhance Financial Risk Management (Lendit), Rated: A

With the maturity of the underlying technologies such as artificial intelligence and blockchain, the manual driven anti-fraud method will be closely integrated with artificial intelligence driven anti-fraud method by incorporating the online and offline scenarios, constantly and quickly generating a surge in innovative strategies from the previous unidirectional and inefficient strategy.

The current application of anti-fraud technology is a rule engine driven approach, that is, it can detect the problems when the frauds are triggered but cannot predict and warn in the early stage. By accumulating and studying the data of fraudulent activities and developing the new cyber technology, the application of anti-fraud technology is expected to be turn from passive investigation into active pre-warning to build up the first firewall of anti-fraud. Adding intervention techniques out of the rule engine, such as neural network technology, will help to improve the pre-warning mechanism.

Bank Fintech Partnership More Than Just a Good Idea (Lendit), Rated: A

Bank customers demand highly functioning and seamless digital experiences.  They expect easy loan application processes that minimize data entry and turn around decision and funding in session-time.  They expect configurable communications, inbound and outbound, via the channel of their choosing and on the cadence of their choosing.  They expect to conduct every possible interaction, including account opening, without being require to walk into a branch.  They crave AI-driven advice and AI-fueled interaction channels.  With mobile payment processes, remote deposit capture, 24/7 access and service, and high degrees of security all to boot.

While it is possible to develop these capabilities in house, the best solutions already exist, developed by fintech providers who are ready to partner with the bank.

Blake Cohen of SALT Lending (Lending Academy), Rated: A

In this podcast you will learn:

  • How Blake first got involved with blockchain and bitcoin.
  • The conversation that led to the founding of SALT Lending.
  • The outcome of his conversations with banks around accepting bitcoin as collateral.
  • How they discovered there would be demand for their proposed lending service.
  • Why they decided to sell discounted memberships instead of doing an ICO.
  • Why anybody who is holding cryptocurrency instantly understands their value proposition.
  • How much membership tokens, known as SALT tokens, cost.
  • The total amount of loan demand they have received to date.
  • How the process works when taking out a loan.
  • The loan products they are offering today.
  • How their margin calls work.
  • Why they do no credit checks on their borrowers.
  • How loans are getting funded today and their plans for the future here.
  • How the volatility in the price of cryptocurrencies has impacted their business.
  • The vision for the future of SALT lending.

Best Online Checking Accounts (Benzinga), Rated: A

Online checking accounts are different from regular checking accounts at your bank/credit union and the number one reason they’re different is that they’re from banks that forgo a traditional branch structure. Ally Bank is a great example of this type of online-only option.

Best for no monthly fees: Capital One 360 Online Checking Account
Best for hIgh APY: Consumers Credit Union Free Rewards Checking
Best for no deposit minimum: Ally Interest Checking
Best business online checking account: EverBank Business Checking

Lendio announces South Charlotte franchise (Bankless Times), Rated: B

Small business loan marketplace Lendio this week opened a franchise in Charlotte, North Carolina. Through the Lendio franchise program, Chris Cronk will help local businesses in the community apply for loans, review their options and secure funding.

OnDeck Names Diamond Janitorial Services as Small Business Of the Month (PR Newwire), Rated: B

OnDeck (NYSE: ONDK), the leader in online lending to small business, today announced that Diamond Janitorial Services has been selected as the OnDeck Small Business of the Month for March, 2018.

 

Government Lifts Prohibition on Payday Lending Chain’s Partnership With National Banks (WSJ), Rated: B

The Office of the Comptroller of the Currency has lifted a prohibition on partnerships between payday loan chain ACE Cash Express Inc. and national banks, as the agency’s Trump-appointed head, Joseph Otting, is encouraging financial institutions to offer more small-dollar consumer loans.

The OCC rescinded a 2002 consent order that restricted ACE’s ability to offer payday loans funded by nationally chartered banks.

Private equity firms buying real estate data and software provider EDR for $ 205 million (Housingwire), Rated: B

Two prominent private equity firms are buying EDR, a provider of real estate data and software-as-a-service, for $205 million, the companies announced earlier this week.

The buyers for EDR, which provides property due-diligence and risk management technology and information, are Silver Lake and Battery Ventures.

United Kingdom

MarketInvoice reaches £2b milestone (Finextra), Rated: AAA

Business finance company MarketInvoice has today reached the landmark milestone of having advanced £2b worth of invoice finance and business loans to UK companies.

The first £1b was achieved after 5 years of trading and the second £1b took just 14 months to reach. During this brief time, two new products were launched (confidential invoice discounting and business loans). These helped MarketInvoice provide funding worth £714.2m to business in 2017 up from £410.4m in 2016 (up 74%).

Lendy Announces 20,000 Investor Milestone & Repays Five Loans in February 2018 (Crowdfund Insider), Rated: AAA

Lendy announced this week it has attracted its 20,000th investor to its peer-to-peer lending platform. This news comes just days after the online lender announced it repaid five loans in February 2018.

According to P2P Finance News, the lender reported that about 7,000 new investors have joined its platform during the past year, with growth in the under 40 age group. Lendy also revealed that investors have secured more than £37 million in interest since its platform’s launch in 2012, with over  £373 million in total has been lent through the platform.

More SMEs planning to apply for finance, research shows (London School of Business & Finance), Rated: AAA

A study from market research agency BDRC has shown that the number of SMEs planning to apply for finance increased in 2017, rising from 10% in the first quarter to 14% in the last three months of the year.  

The company’s SME Finance Monitor surveyed 132,000 businesses and also found that more SMEs are becoming aware of peer-to-peer (P2P) lending, with more than 30% being aware of this type of finance in the final quarter of 2017.

The research showed an increase in awareness of P2P lending combined with crowdfunding, with 46% being aware of these types of finance, up from 36% at the start of last year.

Nearly half (48%) of larger businesses with 50-249 employees were found to be aware of P2P lending, compared to 32% of solo operations and 31% of smaller businesses with fewer than ten employees.

Get ready for UK fintech’s Big IPO Year (AltFiNews), Rated: A

Funding Circle, one of the most notable UK ‘unicorns’ (a tech firm with a valuation north of £1bn), is the latest firm to make headlines for a soon-expected IPO. It also recently enlisted Goldman Sachs and Morgan Stanley to help with the process, according to media reports. Many other notable digital lending platforms such as Zopa and LendInvest as well as banking challengers such as Monzo have also dropped hints that they aspire to move into public spheres eventually, if not soon.

Peer-to-peer lender offers rare secured retail bond paying 5.4pc (The Telegraph), Rated: A

peer-to-peer lender is launching a secured retail bond paying 5.375pc in interest annually, until it matures in 2023. The company, LendInvest, is a service that allows individuals to loan their money to finance property projects.

IF Isas: a bold way to build your capital (Money Week), Rated: A

This time last year, for example, none of the big three peer-to-peer (P2P) lending platforms – Zopa, RateSetter, and Funding Circle – had IF Isas available. But the situation has improved, and now more than 30 platforms offer them.

More than 75% of those surveyed by specialist researcher AltFi Data shortly before Christmas said they weren’t aware of the products.

If you want to lend to consumers, you could try RateSetter, which offers up to 4.9% a year over five years. A far riskier option is FundingSecure. This platform offers 12% or more on sub-prime asset-backed lending – P2P pawnbroking, effectively.

On the lending to business side, Funding Circle offers 7.2%, but is currently only open to existing customers. Assetz Capital offers from 3.75% to 15% over various terms. Crowdstacker offers up to 7%. The UK Bond Network allows you to invest from £5,000 in individual corporate bonds from listed and unlisted businesses, returning an average of 11.1%. And if you prefer to invest in renewable-energy projects, Abundance Investments offers up to 15%.

China

Micro-cap Chinese fintech Senmiao Technology prices $ 12 million IPO at $ 4 low end (Nasdaq), Rated: AAA

Senmiao Technology, an early-stage Chinese marketplace for peer-to-peer lending, raised $12 million by offering 3.0 million shares at $4.00, the low end of the range of $4.00 to $4.50.

At $4.00, the company commands an IPO market cap of $102 million and an enterprise value of $90 million. During fiscal 2017, it booked $0.2 million in revenue and a net loss of $0.7 million.

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

Ant Financial Buys Shares in Telenor Microfinance Bank

On March 13, Pakistan’s Telenor Group announced a strategic partnership with China’s Ant Financial Services Group. According to the agreement, Ant Financial will acquire 45% of Telenor Microcredit Bank, at the value of US $184.5 million. According to the agreement, Ant Financial will acquire 45% of Telenor Microcredit Bank, at the value of US $184.5 million.  

JD Finance Starts a New 13 Billion-Yuan Fundraising

On March 13, JD Financial announced that the group has initiated a new 13 billion yuan fundraising round. The new funding raised will be mainly utilized for financial licenses acquisition, technology research and marketing. It is said that CICC and COFCO shall lead this investment with a share of 10-billion-yuan. The leading investors will sign the agreements with JD Finance by the end of March and close their investment by the end of April.

Statistics shows that the valuation of JD Finance has reached 120-billion-yuan before this planned investment and is expected to reach between 165 and 190-billion-yuan after that.

 

 

Weekly Review (Investors Business Daily), Rated: A

China-based online lender Qudian (QD) reported $229.2 million in revenue and diluted EPS of 26 cents. ADT posted a surprise adjusted loss of 6 cents a share on 6% sales growth to $1.11 billion. On a GAAP basis, the home security company earned 99 cents a share.

European Union

Real estate crowdfunding in Finland: the drivers of campaign success and the industry development (Theseus.fi), Rated: B

The objectives of the study were to examine the phenomenon of real estate crowdfunding in Finland, to explain the success or failure of RECF campaigns, to understand the drivers behind industry development and to assess its future potential. The data was collected from the two main sources: interviews with the experts and the information from the websites of the crowdfunding platforms.

International

The Third Age of credit (TechCrunch), Rated: AAA

Today, buoyed by a plethora of technologies and a golden age for abundant data, creditis undergoing its most radical change yet. But it is being pulled in many directions by competing forces, each with their own vision for the future.

The last year has witnessed a Cambrian explosion in credit innovation, unveiling hundreds of possibilities for the future of credit. Unlike the last two ages, credit of the future will be personal, predictive, self-correcting and universal.

What does a new world of credit look like?

Thousands of startups are all finding new ways to apply this same concept of statistical modeling. WeLab in Hong Kong and Kreditech in Germany, for example, use up to 20,000 points of alternative data to process loans (WeLab has provided $28 billion in credit in four years). mPesa and Branch in Kenya provide developing-world credit using mobile data, Lendabledoes so using psychographic data and Koradoes this on blockchain. Young peer-to-peer lending startups like Funding CircleLending Club and Lufax have originated more than $100 billion in loans using algorithmic underwriting.

Victory Park Capital partners IFC on fintech fund for emerging markets (Finextra), Rated: A

Victory Park Capital (“VPC”), a leading investment firm focused on providing flexible debt and opportunistic equity solutions worldwide, announced today that it has launched a new fund together with the International Finance Corporation (“IFC”), a member of the World Bank Group.

The new fund will invest in financial technology companies in emerging markets. The partnership aims to improve access to debt capital for financial technology companies that lend to small businesses and consumers in emerging markets.

Accountants Look to Artificial Intelligence As Clients Get More Demanding (Sanvada), Rated: A

Accountancy firms to be particular are busy investing in AI and automation initiatives to help staffs with mundane tasks. The need is so open in some situations that businesses fail to deliver their mandate to customers.

In the research, close to 50 percent of the accountants said they would like to automate number crunching, diary management and the most time consuming of all: data entry. On the same note, three quarter showed great attraction to AI, to have it assist time-consuming responsibilities and automate involving tasks with recurring patterns.

Accounting firms have been in the front line of using cloud computing and Sage report stated that 67 percent of respondents now link their success to the use of cloud tech.

Finastra named provider of best payments solution by Global Finance (Vested for Finastra Email), Rated: B

Finastra has been named ‘best payment solutions provider’ by Global Finance, as part of the publication’s Best Treasury & Cash Management Banks and Providers for 2018, announced in the March issue of the magazine.

Finastra received the award based on its best-of-breed payments and financial messaging solutions that enable financial institutions and their business customers to manage cash, process payments, exchange information and transfer funds cost-effectively, securely and reliably within and across national boundaries.

Australia

SMEs shun banks, turn to fintechs (Financial Standard), Rated: AAA

The proportion of SMEs planning to use banks dropped from 38% to 24% between 2014 and 2018, the Scottish Pacific SME Growth Index shows. It is recalculated every six months.

About half (47.6%) of the 1253 small-to-medium business leaders who had not used non-banking lending options in the last 12 months said they are interested in using alternative financing in the future.

Of the SMEs that used alternative working capital options in 2017, the most popular was debtor finance (77%), followed by merchant cash advances (23%), peer-to-peer lending (10%), crowdfunding (9%) and other online lending (5%).

9 in 10 SMEs say cash flow problems prevented revenue growth (Finder), Rated: A

A new report released this week has revealed the changing state of cash flow, finance and growth for Australian small- to medium-sized enterprises (SMEs). The SME Growth Index, released by working capital provider Scottish Pacific, found that one in five (21.1%) SMEs were unable to take on new work because of cash flow restrictions, and 9 in 10 (92.7%) SMEs said that cash flow restrictions actually prevented them from generating more revenue.

Small business revenue is heavily influenced by the business’ cash flow. Of the 1,253 small business respondents to the Index, only 7.3% said that improved cash flow would not have led to more revenue. The restrictions on revenue due to cash flow has cost the Australian economy $229.8 billion.

FinTech Australia Points to Report that Highlights Growth in Fintech Lenders as Traditional Finance Declines (Crowdfind Insider), Rated: A

FinTech Australia, is highlighting a report this week that points to the decline in traditional fince options (IE Banks) and the ongoing rise in SMEs using Fintech platforms to address their capital needs.

The report is courtesy of the Scottish Pacific SME Growth Index, released every six months, which is based on interviews with 1,253 SMEs across Australia with annual revenues of up to $5 million.

For SMEs with plans to invest in expansion over the next 6 months, 24% say they will fund growth by borrowing from their main relationship bank – continuing a downward trend, and well short of the high of 38% who nominated this option to fund growth in the first round of the Index in September 2014. More than one in five SMEs (22%) plan to use alternatives to their main bank to fund upcoming growth, with 91% relying on their own funds. Of the SMEs that used alternative working capital options in 2017, their funding choices were: debtor finance (used by 77%), merchant cash advances (23%), P2P lending (10%), crowdfunding (9%) and other online lending (5%).

Gen Y advisers shy away from the big banks (Financial Review), Rated: B

Data from consumer information company Adviser Ratings provided exclusively to The Australian Financial Review reveals in the last two years, the non-aligned sector – or what was previously termed the independent space – has seen it attract 70 per cent of all news advisers, compared with 40 per cent previously.

There has also been a 32 per cent increase in the number of Australian Financial Services Licenses (AFSLs) granted by the Australian Securities and Investments Commission. This equates to 400 new licenses in two years. Total adviser numbers have grown 10 per cent, up to 24,777 from 22,612 over that period.

India

Is RBI sleeping over Faircent’s P2P ad that promises huge returns? (MoneyLife), Rated: AAA

An overhyped, front page advertisements in a leading economic daily by Faircent.com, which claims it is India’s largest peer-to-peer (P2P) lending website, is luring people promising returns that are safer than the risky ’Sensex’ — almost like a Ponzi scheme. Shockingly, the company’s business and its puffery does not seem to attract the attention or supervision of any regulator. Not even the Reserve Bank of India (RBI), whose governor recently lamented that his organisation does not have adequate powers over banks — especially public sector banks. So what about finance companies that are regulated by it? The Faircent.com advertisement would give you a clue. The last line of the advertisement, in its fine print carries a disclaimer saying, the “Reserve Bank of India (RBI) should not be held responsible for these claims or promises”.

Movers And Shakers Of The Week [12–17 March 2018] (Inc 42), Rated: B

Online financial services marketplace BankBazaar has appointed Aparna Maheshas the Chief Marketing Officer.

P2P lending company Faircent has roped in Vikas Prasad and Mayank Bishnoi on board its leadership team.  Vikas has joined Faircent as Head – Planning, Processes, and Control, while Mayank has taken over as Head – Customer Experience.

Asia

Genie: the broadest Asian business loans exchange platform (Global Coin Report), Rated: A

The Genie ICO recently hit its soft cap of $5 million, with another $20 million in the pipeline. They had achieved about $2.5million through crowd sale; with the $3million underwritten amount, the current token purchase crosses the soft cap of $5million.

 

The ICO, which started a few weeks ago, finalized on March, 1st. Tokens were for sale at a rate of 0.0025 ETH, with a fundraising goal of 5,000,000 USD that was already met.

INTERVIEW-Indonesian banks will see “more than 12 pct” loan growth in 2018- regulator (Reuters), Rated: A

Indonesian banks will see “more than 12 percent” loan growth in 2018 thanks to a recovering global economy and a pickup in commodity prices, the country’s financial regulator said.

Loan growth in Indonesia has fallen below 10 percent since the start of 2016, compared with more than 20 percent during the commodity boom years before that.

Canada

Merchant Advance Capital Closes $ 30 Million Debt Facility (deBanked), Rated: AAA

Canadian Merchant Advance Capital closed a $30 million debt facility from Comvest Credit Partners today.

“This is giving us significant runway,” Merchant Advance Capital CEO David Gens told deBanked. “For the next 12 months in particular, we’ve got great visibility as far as where our incremental capital is going to come from. This will allow us to focus less on fundraising and more on just building the business.”

Founded in 2010, Merchant Advance Capital offers several small business financing products including fixed term loans and business lines of credit.

Royal Bank of Canada Explores Blockchain to Automate Credit Scores (CoinDesk), Rated: A

The Royal Bank of Canada may be interested in putting credit scores on a blockchain.

In a patent application released Thursday, the bank outlines a platform built on a blockchain that would automatically generate credit ratings using a borrower’s historical and predictive data. The application as described proposes a system that would utilize more data sources than existing credit rating systems, improving the loan process while creating an immutable record.

If a loan application is submitted, the system would automatically determine what sort of loan and creditor would be appropriate before generating a unique smart contract that contains the terms of the loan.

Authors:

George Popescu
Allen Taylor

Wednesday February 14 2018, Daily News Digest

OnDeck gross revenue

News Comments Today’s main news: OnDeck becomes profitable. NepFin launches first online commercial lending platform for U.S. market. MoneyLion has 2 million customers. Sequoia China leads $40M DataVisor Series C. Moody’s reviews CommonBond for upgrade. Today’s main analysis: Review of OnDeck Q4 2017 earnings results. Today’s thought-provoking articles: The Future of Lending. Is investing RateSetter Isa worth it? Genie ICO: The […]

OnDeck gross revenue

News Comments

United States

United Kingdom

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International

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News Summary

United States

OnDeck swings to profit, eyes second bank partnership (American Banker), Rated: AAA

The New York-based small-business lender recorded net income of $5.1 million in the quarter that ended Dec. 31, which compared with a $35.9 million loss in the fourth quarter of 2016.

OnDeck, which has recorded $94.5 million losses over the last two years, is cutting costs in an effort to achieve profitability.

Review of OnDeck Q4 2017 Earnings Results (Lend Academy), Rated: AAA

In the fourth quarter they generated $5 million of GAAP profit. To put this in perspective, this is $41 million better than the prior year period. This puts them on solid footing as they look towards priorities for 2018. Originations for the quarter were $546 million, up 3% from the prior quarter.

Source: Lend Academy

Gross revenue came in at $87.7 million, up 7% year over year. Gain on sale revenue or revenue from loans sold on OnDeck’s marketplace to investors totaled $0.6 million. Other income totaled $3.5 million, up slightly from $3.4 million in the previous quarter.

Source: Lend Academy
Source: Lend Academy

Full Year 2018

  • Gross revenue between $370 million and $382 million.
  • GAAP Net income (loss) attributable to OnDeck between $(2) million and $10 million.
  • Adjusted Net income between $16 million and $28 million.

First Quarter 2018

  • Gross revenue between $86 million and $90 million.
  • GAAP Net income (loss) attributable to OnDeck between $(5.5) million and $(1.5) million.
  • Adjusted Net income between $1 million and $5 million.

OnDeck Flips To Profitability Much To The Market’s Delight (PYMNTS), Rated: A

Originations were up 3 percent over the previous quarter to $546 million.

Loans sold or designated as held for sale through OnDeck Marketplace represented 3.9 percent of term loan originations. Provision for loan losses was $34.4 million and the Provision Rate was 6.4 percent, down from Q3’s 7.5 percent.

Gross revenue increased to $87.7 million, up 7 percent year-over-year, while net revenue was $42.1 million, up 159 percent year-on-year.

The cost of funds rate was 6.5 percent, which was a slight increase over Q3. OnDeck noted that figure will likely continue to tick up during 2018, as the Fed is forecast to keep raising short-term interest rates.

Online lender OnDeck’s profit beats on lower costs, shares soar (Reuters), Rated: B

Shares of OnDeck Capital Inc (ONDK.N) soared on Tuesday after the online lender reported better-than-expected quarterly profit as it set aside less money for bad loans, and managed to keep costs lower.

NepFin Launches First Online Commercial Lending Platform for -Trillion U.S. Market (Digital Journal), Rated: AAA

Neptune Financial Inc., or NepFin, a financial services firm, announced today that it has launched the first online commercial lending platform for mid-sized U.S. businesses, creating a new source of credit as well as business software solutions for a large, thriving sector of the economy whose borrowing options are limited.

NepFin also announced that it has raised a $10-million Series A round led by Sands Capital Ventures with participation from its existing investors. Michael Raab, Partner at Sands Capital, will join NepFin’s board, which already includes Third Point’s David Bonanno, currently a board member of SoFi, as well as Robert Schwartz, Managing Partner at Third Point Ventures. This round brings NepFin’s total capital raised to $13 million.

NepFin, whose platform has digital solutions built from the team’s years of experience in online lending and traditional finance, says that its focus is on one of the most underserved sectors of the broader U.S. economy – businesses with between $10 million and $100 million in revenue. NepFin provides loans of up to $60 million.

LendingClub at the Watermark Conference for Women (LendingClub), Rated: A

LendingClub is excited and proud to be a sponsor of the Watermark Conference for Women being held on February 23rd in San Jose, California. As part of the agenda, two of our Client Advisors from the Business Loans team, Mana and Somie, will be leading roundtable discussions with women entrepreneurs on the core elements to consider when exploring small business financing options.

Forbes Fintech 50 2018: The Future Of Lending (Forbes), Rated: AAA

Affirm, San Francisco

Makes instant three, six and 12 month loans for purchases from 1,500 online merchants. A handful of sellers subsidize 0% rates, but most loans carry annual interest rates of 10% to 30%.

Bona fides: More than 1 million loans issued. Partners include Wayfair and Expedia.

Better Mortgage

Digital-only mortgage originator estimates the loan an applicant qualifies for within three minutes using stated income and a credit score check.

Bona fides: Fannie Mae and five of nation’s six largest banks buy its loans.

Blend

Speeds up the mortgage approval process at the nation’s largest lenders with its cloud based white label software.

Bona fides: Wells Fargo and U.S. Bancorp are already onboard

CommonBond

Online lender refinances and finances undergraduate and graduate student loans.

Bona fidesCommonBond has made $1.5 billion in loans, but says just two have gone into default.

GreenSky

Provides on-the-spot financing for home improvement projects (with loans up to $65,000) via a network of contractors and bank partners — without itself taking on the risk of defaults. Most borrowers don’t pay a dime in interest thanks to zero-interest promotional periods that last from 6 to 60 months. Recently began offering financing at doctor, dentist and veterinary offices.

Bona fides: Has facilitated over $10 billion in loans

Kabbage

Lending platform offers nearly instantaneous small business loans. Uses creative alternative data to underwrite loans–such as the number of UPS packages a business sends and receives over time.

Bona fides: Over $4 billion in originations to 130,000 small businesses

LendingHome

Four year-old online lender started out providing bridge loans to fix and flip housing investors, a historically underserved segment. With original product now available in 25 states, LendingHome has expanded into personal mortgages in 14.

Bona fides: $2 billion in loans made; 10,000 homes financed

Tala

Approves developing-world borrowers who lack a credit history for micro-loans of between $10 and $500 by crunching 10,000 data points—from financial transactions to mobile games played—from an applicant’s smartphone.

Bona fidesHas made more than 4.5 million loans, with a repayment rate above 90%.

Upstart, San Carlos, CA

Uses alternative data such as education, employment history and whether applicants know their own credit score to underwrite and price loans. After five years of training its algorithms, it now approves 47% of loans without human intervention and with some of the lowest default rates in the industry.

Bona fides: $1.5 billion in loans originated to 120,000 borrowers

MoneyLion Reaches 2 Million Customer Milestone As Growth Accelerates (BusinessWire), Rated: AAA

MoneyLion, the digital personal finance platform for the financial middle class, today announced that it now empowers over 2 million customers to better their borrowing, saving and investing through personalized, AI-driven solutions. The growth of MoneyLion’s community is a reflection of the positive financial outcomes its customers have achieved and the platform’s unique approach to money management for everyday Americans.

The momentum behind MoneyLion’s customer growth follows a number of recent milestones for the company, including:

  • The December launch of MoneyLion Plus, a first-of-its-kind membership that combines guided savings, simple investing, access to low-cost loans, and personalized daily financial tips to help consumers build their credit, financial resilience, and first $2,000 in savings. MoneyLion Plus has democratized access to private banking-like services typically reserved for high net worth consumers, providing an opportunity for first-time investors to begin building wealth.
  • Completion of a successful $42 million Series B equity round in January, bringing MoneyLion’s total funds raised to $67 million. This financing accelerates MoneyLion’s continued development of innovative, inclusive financial products and services for America’s financial middle class.

Student lending platform on review for ratings boost (AltFi), Rated: AAA

Moody’s puts six tranches issued by CommonBond on review for upgrade.

Moody’s Investor Services has placed six tranches issued by CommonBond Student Loan Trust 2016-B, 2017-A-GS and 2017-B-GS on review for upgrade. The tranches are comprised of loans to students, and $488m of asset backed securities are affected by the review.

Dwolla Lands $ 12 Million (Finovate), Rated: A

In a short, three-sentence blog post, Dwolla CEO Ben Milne announced that the company closed a $12 million round of funding. The investment, which brings the Iowa-based company’s total to $51.4 million, was led by Foundry Group with participation from Union Square Ventures, Next Level Ventures, Ludlow Ventures, High Alpha, and Firebrand– all existing investors.

Fortress Balance Sheet: Goldman Sachs’ Online Lender Marcus Has Access to $ 17 Billion in Deposits (Crowdfund Insider), Rated: A

But today, Blankfein shared that Marcus now has access to over $17 billion in deposits representing a huge amount of credit firepower at an unbeatable cost to lend.

In a savvy move, Goldman acquired GE Capital’s retail deposits prior to launching Marcus. Since the acquisition, these deposits have grown an impressive 90%.

Secured Lender BlockFi Secures $ 1.55M Funding to Build Cryptoasset Ecosystem (Crowdfund Insider), Rated: A

BlockFi, a New York-based non-bank lender that offers USD loans to cryptoasset owners, announced a $1.55 million raise from ConsenSys Ventures, Kenetic Capital, PJC, SoFi,  Purple Arch Ventures and Lumenary. The new capital injection will be used to bridge the gap between traditional debt capital markets and the cryptoasset ecosystem.

Five credit unions sign with new text messaging platform in January to enhance lending and operations (CUInsights), Rated: A

Shastic, a SaaS company specializing in banking-specific technology services, has signed on five new customers in the first month of 2018. The recent growth follows the fintech company’s early launch of Elle, the conversational text messaging platform built for credit unions. Elle is an expansion of their automation services to deliver efficient, real-time message communication between a credit unions and their members.

Data-sharing spec revised to encourage open banking (American Banker), Rated: A

The Financial Services Information Sharing and Analysis Center announced Tuesday an attempt to move the ball forward on data sharing and open banking in the U.S.

The FS-ISAC on Tuesday released a new version of its technical recommendations for data sharing, the Durable Data API specification. This could become the standard banks and third parties adopt for PSD2-style data sharing and open banking. In fact, the new standard meets all of PSD2’s requirements, according to the security data-sharing organization. (However, PSD2 also requires third parties to register and agree to be overseen by a regulator, something unlikely to happen here.)

What We Talk About When We Talk About Finances (With Alexa) (PYMNTS), Rated: A

As anyone who has used an Alexa skill might know, the movement toward conversational finance, or financial conversations, is a tricky one, as specific instructions or questions (okay, they are commands, really) have traditionally been needed to spur the assistant to retrieve information.

To that end, USAA has sought to bring a natural cadence and flow to the conversation, one that builds, and built, on its experience in the PYMNTS Voice Challenge last year.

In play for customer data, TD Ameritrade rolls out Twitter trading bot (Tearsheet), Rated: B

The brokerage firm released a Twitter bot Thursday, allowing stock investors to execute trades, get market updates and browse educational content through direct messages. For the brokerage, encouraging traders who use Twitter to transact will give it, the hope is, a rich source of user data to offer personalized customer experiences and product recommendations.

Millennial entrepreneur strives to provide affordable financial advice to all (NewsOK), Rated: A

How to go about repairing your credit, reducing your student loan debt or obtaining the best mortgage loan now is available to you through a locally produced app.

The answers are among the widespread financial advice available to consumers nationwide through a new app called Coinmast launched by an Oklahoma City-based millennial entrepreneur.

At $11 a call, the tech startup offers such help from certified financial counselors, certified financial planners and certified public accountants whom Haller contracts nationwide. Experts, he said, offer advice on almost anything, excluding on individual securities, insurance and taxes.

Robo advice app Stash raises .5m Series D, releases investing for kids (AltFi), Rated: A

US-based micro investments app Stash has announced a $37.5m raise in Series D funding, led by Union Square Ventures. Existing investors Breyer Capital, Coatue Management, Entree Capital, as well as fintech familiars Goodwater Capital and Valar Ventures, also joined in on the round.

My Financial Advisor is a Robot (Direct Industry), Rated: A

Fintech company Moneyfarm uses cutting-edge technology as well as human financial expertise to help make investing simple, easy and cost-effective. The company also invests in artificial intelligence and machine learning and recently bought AI-driven chatbot Ernest. 

DirectIndustry e-magazine: What is the technology behind it?

Paolo Galvani: We use technology to match investors with investment portfolios that are specifically built for their investor profiles. Each new customer completes a survey during the sign-up process. The algorithms we have developed in-house match each investor to an investor profile that reflects their tolerance for risk. Investors are then paired with a portfoliothat is specifically built and managed by our team of investment experts to reflect the customer’s investor profile.

LPL rolls out robo-adviser to regional bank (InvesmentNews), Rated: A

Webster Bank, a $26.4 billion financial institution with branches in Connecticut, Rhode Island, Massachusetts and New York, announced that it would start offering access to Guided Wealth Portfolios, a digital advice platform developed by LPL Financial and BlackRock Inc.‘s FutureAdvisor.

Interest Doesn’t Always Bring Adoption of Robo-Adviser Tech (PlanAdviser), Rated: A

A new report published by Cerulli Associates examines the growth trajectory of the digital financial advice market that has occurred since 2015, finding there remains a clear inverse relationship between an investor’s age and their willingness to engage with purely digital financial advice platforms.

Scott Smith, director at Cerulli, notes that as of the third quarter of 2017, there is “greater openness to digital advice relationships, but a strongly negative correlation between age and interest remains.”

Cetera Financial Group Enhance Delivery of Advice-Centric Experience for Financial Advisors, Clients (PR Newswire), Rated: B

Cetera Financial Group (“Cetera”)*, a network of independent firms supporting the delivery of professional financial advice, today announced that the six firms comprising its network will be organized under its newly-created Traditional and Specialty Channels. The formation of these two channels is expected to accelerate the ability of each network firm to support Cetera’s Advice-Centric Experience for advisors and clients, which envisions a financial advice profession driven by goals-based planning and solutions that help clients achieve more predictable outcomes on their journey to financial well-being.

Looking for Credit Union Student Loans? Here’s How to Find and Apply for Them (Student Loan Hero), Rated: B

MyCreditUnion.gov provides a map that makes it easy to locate credit unions in your area. Input your address to find a list of credit unions, directions to each location, and available member services. You can then contact local credit unions to find out about membership requirements and student loan options.

One of the best ways to research your options is to use LendKey. LendKey offers easy access to hundreds of different credit unions and community banks that provide private student loans.

You have the option of applying directly through a credit union that allows people to join from anywhere in the United States. Some examples of credit unions open to individuals nationwide include Alliant Credit UnionDigital Federal Credit Union, and First Tech Federal Credit Union.

United Kingdom

New Isa from RateSetter offers 6% return: is it worth investing? (Which?), Rated: AAA

With the new product form RateSetter, you could earn 3-6% interest on your investment, depending on how long you lock your money away.

RateSetter’s Innovative finance Isa allows you to invest up to £20,000 in a tax year.

It is a flexible Isa product, meaning you can withdraw money and replace it without using up your £20,000 tax-free savings allowance.

Say, for example, you put £10,000 into your innovative finance Isa and then withdrew £5,000. Under the rules, you could still deposit £15,000 without incurring tax.

The shortest duration investment rolls over monthly with an interest rate of 3.1%. The longest is a five-year investment, which currently has an interest rate of 5.8%.

Money goes to… Minimum investment Projected rate
Abundance Green energy projects £5 6-9% over lifetime of investment (3-5 years)
Advancr Public and private businesses £1,000 5-6% depending on length of bond
Basset & Gold Fixed income bonds £1,000 3-7% depending on product
CapitalRise Property development projects £1,000 10% or more depending on the project
Crowd2Fund Businesses £10 9%
Crowd for Angels Crowd bonds funding small businesses £25, but companies can increase that 12%
Crowdstacker Businesses £500, but set by borrowers 5-7%
Downing Crowd Fixed-term bonds for small businesses £100 4-7%
Folk2Folk Asset-backed loans to small, mostly rural businesses £20,000 5.5-6.5% depending on product
Funding Circle* Businesses £1,000 4.8-7.5% depending on selected risk level
FundingSecure Asset-backed sub-prime loans to individuals £25 Up to 16%
Goji P2P Consumer, business and property loans £5,000 5%
HNW Lending Asset-backed loans to individuals and businesses £10,000 6-15% depending on term and risk
Kuflink Property loans £100 5%
LandlordInvest Asset-backed loans to landlords £100 5-12%
Landbay Buy-to-let mortgages £5,000 4%
LendingCrowd Business loans £1,000 6%
Lending Works Individuals £10 3-5% depending on term
Money&Co. Businesses £100 8%
Mongoose Crowd Community energy projects £100-200, but can vary by project 4-7%
Property Crowd Commercial and residential developments £5,000 10%
Proplend Property of varying types £1,000 5-12%
Ratesetter Businesses, individuals and property developers £10 3-6% depending on product
Rebuildingsociety Small and medium-sized businesses £10 9.7%
Relendex Commercial and residential property loans £500 10%
UK Bond Network Businesses £5,000 11%
Zopa** Individuals £1,000 4-4.6% dep

Fintech group TruFin raises £70m (Finextra), Rated: A

TruFin, a British fintech and banking business with fingers in various niche lending pies, has raised £70 million through a listing on the LSE’s AIM market.

LendInvest unveils product transition process (BestAdvice), Rated: A

The Product Transition process allows existing borrowers to transfer between specialised loans that are tailored to support them at each stage in their development project.

Lendy returns £2.1m loan repayment from luxury property in Chelsea (Mortgage Introducer), Rated: A

Peer-to-peer lending platform Lendy returned a £2.1m loan repayment to P2P investors from a luxury apartment in Chelsea, on an investment made through Lendy.

Lendy appoints new head of finance (Bridging&Commercial), Rated: B

Andrew Wawrzyniak has joined the peer-to-peer lending platform from Fund Partners, a fund manager whose clients include Octopus Investments, Pictet Asset Management and Russell Investments.

China

Sequoia China leads $ 40M DataVisor Series C (Bankless Times), Rated: AAA

DataVisor, a provider of fraud detection solutions using unsupervised machine learning, today announced a $40 million Series C round of financing led by Sequoia China, with participation from existing investors New Enterprise Associates and GSR Ventures.

Rock Wang, managing director at Sequoia China, will join DataVisor’s board of directors. With this new round of financing, DataVisor will expand its global footprint in the fraud detection and prevention market, which is estimated to reach $41.6 billion by year 2022 according to research firm MarketsandMarkets.

European Union

Swedish Online Payments Company Klarna Shuts Down Tel Aviv Development Center (CTech), Rated: AAA

Swedish online payments company Klarna Bank AB (publ) will be shutting down its Tel Aviv development center during the next few months, the company announced Tuesday. All 31 of its employees in Tel Aviv were offered the opportunity to remain with the company and relocate to one of its Swedish or German offices.

Banco BNI Europa to invest with CrossLend (Finextra), Rated: A

Banco BNI Europa and CrossLend have launched a cooperation whereby Banco BNI Europa invests into notes issued by CrossLend Securities SA.

International

Barclays faces new charge, Triodos innovates and outlook for Citizens Bank in the US (Financial Times), Rated: A

Martin Arnold and guests discuss the latest charges against Barclays, Bevis Watts of the ethically-focused bank Triodos talks about his new UK peer-to-peer lending model and Bruce van Saun explains what US rate rises will mean for Citizens Bank.


 

Australia

DirectMoney Secures New Strategic Investment From Alceon For Growth & Innovation Initiatives (Crowdfund Insider), Rated: AAA

Australian marketplace lending platform DirectMoney announced on Tuesday it secured a strategic investment from alternative investment manager Alceon to fund growth and innovation initiatives.

According to DirectMoney, the investment will be structured through an initial placement of $600,000 at $0.042 per share (being 14,285,715 new shares), a 56% premium to the price at close of trading on February 9th and equivalent to a 3.1% shareholding.

India

Why just rent when RentoMojo also gives you the option of renting and owning (YourStory), Rated: AAA

Online rental and financing marketplace RentoMojo, which lets consumers in eight cities lease furniture, two-wheelers and home appliances, has launched an additional  rent-to-own model. 

PE AND VC OPPORTUNITIES IN 21ST CENTURY INDIA (AllAboutAlpha), Rated: AAA

ARA Law, a firm based in Mumbai and Bangalore, India, has issued a paper on private equity and venture capital in that country.

The main text of the paper begins with sectoral analysis and market behavior. PE and VC investments in India declined in the early months of 2017, but they had started to pick up already before the end of the first quarter and in the third quarter investments by such vehicles “surprised the market with a tremendous jump in deal volume as well as value.”

In August of that year the deal value reached US$5 billion. The third quarter as a whole saw 129 deals of value greater than US$100 million, aggregating to about US$7 billion.

The most lucrative sector last year was e-Commerce, “in spite of the sharp fall in investments by the end of AY 2016,” followed by real estate. In the 3d quarter, e-Commerce recorded roughly US$2.6 billion in deals across 18 deals. Real estate?  US$2.3 billion across 13 deals. Banking and Financial Services? Third place in the league table with US $1.4 billion across 25 deals.

MoneyOnMobile Raises $ 5 Mn Funding From S7 Group (Inc42), Rated: A

Mumbai-based fintech startup MoneyOnMobile has raised $5 Mn in Series H funding from Russia-based private aviation and aerospace holding company S7 Group. The development comes just two weeks after the startup secured $7.6 Mn Series F funding from undisclosed investors.

Asia

Genie ICO: A Blockchain Network For Decentralized Business Loans (Global Coin Report), Rated: AAA

Genie was created to provide individuals based in Asia with a unique way to borrow and lend money for their business using a peer-to-peer system that is based on a blockchain network. The Genie ICO has been created by an experienced team after observing the rapidly changing Asian financial landscape ever since cryptocurrencies, ICOs, and blockchain technology grew to prominence in 2017.

The platform will also have its very own token Crowd Genie Coin (CGC) which will be generated via an ICO. There will be a limited supply of 120,000,000 tokens available. Of this amount, only 50 million will be available for purchase during the token sale. The rest of the tokens will be used for facilitating transactions on the platform, will be given to the founders, used for distribution, etc. All tokens that are not bought during the token sale, however, will be destroyed to increase the value of a single CGC.

The Genie team hopes to raise a total of $35,000,000 throughout the ICO and the value of 400 CGC tokens has been estimated to be of equal value of 1 ether, which at the time of writing equates to $858. This means that a single CGC is worth $2.15. However, the interested investor can invest a minimum of 0.1, which will attract a wide variety of investors.

Authors:

George Popescu
Allen Tayl

Tuesday November 19 2017, Daily News Digest

Moody's wage growth

News Comments Today’s main news: Clarity Services integrates with Experian. Octopus Choice passes 100M GBP AUM. Funding Circle hits 100M Euro in German lending. Younited Credit tops 100K loans. Square Peg invests $8M in Airwallex. Silver Bullion hits $50M in loans. Today’s main analysis: The deteriorating auto loan quality. Today’s thought-provoking articles: China’s startup investors are a bunch of “cashed-up […]

Moody's wage growth

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Canada

Africa

News Summary

United States

Integration of Clarity Services by Experian (Clarity Services Email), Rated: AAA

As a supplier to Clarity Services Inc, we are writing to formally notify you that as of October 6, 2017, Clarity Services Inc has been purchased by Experian Holdings, Inc.

Effective January 1, 2018, purchases and invoice payments will be processed by Experian’s centralized Procurement and Accounting departments.

Source: Clarity Services

PayPal Co-Founder Max Levchin Gave a Remarkably Honest Response to Accusations About His New Startup (Inc.), Rated: AAA

To its critics, though, Affirm, which recently raised $200 million in a growth round, is engaged in something sinister, luring people into a financial trap by enticing them to buy things they can’t afford. CEO Max Levchindoesn’t agree with that interpretation at all, but he does accept some of the blame for not creating a more accurate perception.

Here’s how Affirm works: You can borrow money to make a purchase at any store that integrates with Affirm (or any store at all if you use the mobile “virtual card”). If Affirm’s proprietary credit model judges that you’ll be able to pay back the sum, then you’re offered a loan. During the next several months — up to a year — you’re expected to make monthly payments, which include interest. The APRs range from 10 to 30 percent.

The key things that differentiate Affirm from other credit options are that you get all of the information up front, stated plainly, and the interest charged by the startup is simple rather than compounding. When you make the initial purchasing decision, you know exactly how much extra you will end up paying to buy the product right now, instead of saving up over several months. There are no additional fees.

Moodys Warns Of Deteriorating Auto Loan Quality (ValueWalk), Rated: AAA

The economy is expected to expand in 2018, with projections for stock market performance clocking in at 8% basis Goldman Sachs. But not all is well –  a Moody’s report notes that specific asset sectors are struggling, particularly when it comes to  car loan quality worsening.

ValueWalk

Moody’s anticipates that US GDP growth will strengthen slightly to 2.3% in 2018 from 2.2% in 2017, with unemployment also continuing to move lower to 4.0% from 4.4%.

Auto loan quality is worst, but pockets of “challenged” loans exist across the board

Auto loan ABS issuers will likely securitize pools with attributes broadly similar overall to those in the pools backing their 2017 securitizations, even as a further decline in US auto sales pressures lenders to loosen underwriting to support volumes. We project sales will slip another 0.6% after an estimated 3.6% drop in 2017, following eight consecutive years of annual increases.

Auto loans appear to be on the front-lines of credit issues. Household debt, for instance, has increased to $13 trillion, with a significant part of that increase in auto loans. Sub-prime auto loans, in particular, are showing signs of weakness.

When looking at investment in asset-backed securities, the originator makes a difference. ABS backed by loans from online lenders such as SoFi, Lending Club Corporation, Prosper Marketplace Inc. and Marlette Funding have correlated with “prime credit quality.” But that is not the case across the board.

Source: ValueWalk

Square to small banks: Don’t lump us in with Amazon and Facebook (American Banker), Rated: A

Square, the Silicon Valley payment processor that is at the center of the fight over the tech industry’s ambitions in banking, is firing back at its small-bank critics, while also taking steps to placate community activists.

Advocacy groups that once expressed concern about the adequacy of Square’s plan to satisfy its obligations to low- and middle-income customers are now sounding more supportive of the fintech’s bid to open a bank.

Levi King of Nav (Lend Academy), Rated: A

In this podcast you will learn:

  • Levi’s background that led to the founding of Nav.
  • The products that Nav offers today.
  • How their business model works.
  • How they get small business owners interested in finance.
  • How Nav saves their customers money.
  • Why Levi thinks that small business owners may not need to be educated on finances in the future.
  • Their approach to producing content on their site.
  • The marketing channels they use to attract small business owners.
  • Levi’s thoughts on the entry on Amazon, PayPal and Square into small business lending.
  • Why proprietary data sets are going to be so important going forward.
  • The story behind the Nav brand and why they rebranded a couple of years ago.
  • The big name equity investors they have and how they closed their funding rounds.
  • What the future holds for Nav.

Traditional FAs Shouldn’t Fear AI (Financial Advisor IQ), Rated: A

Traditional wealth managers are convinced the advent of robo-advisors and artificial intelligence threatens the jobs of financial services professionals, Wendy Spires writes on WealthBriefing. But the reality is that the high-touch business of financial advice stands to benefit from AI, as do its traditional practitioners, she writes.

For example, while 71% of wealth managers believe financial advice clients are prepared to accept advice from robo-advisors, the reality is different, she writes. Self-directed investing, for example, dropped from 45% in 2010 to 38% in 2016 — during a time when the number of robos and the services they offer expanded significantly, according to Spires.

 

Working in America’s gig economy (Multibriefs), Rated: A

“The gig economy … is now estimated to be about 34 percent of the workforce and is expected to be 43 percent by the year 2020,” notes Intuit CEO Brad Smith. “We think this points to a lot of growth as we look ahead.”

Based on the most recent demographic data available from the Bureau of Labor Statistics, it appears the gig workforce is fairly evenly distributed across the age spectrum, but the highest percentages are seen at opposite ends of the scale. Individuals 65 years and older had the highest level of self-employment at 24.1 percent, while those under 35 (the so-called millennial generation) made up 18 percent.

BLS data reveals a few more interesting statistics concerning the gig workforce:

  • Men are almost twice as likely as women to be self-employed.
  • More than 30 percent of gig workers possess professional or advanced degrees.
  • Whites and Asians are marginally more engaged in gig work than are other racial or ethic groups.

In fact, data crunched by online lender Earnest and reported by Priceonomics indicates that about 85 percent of gig workers make less than $500 per month.

Consumer board seeks $ 287 million in restitution over CashCall case (Northern California Record), Rated: A

A Nov. 20 hearing featured the Consumer Financial Protection Bureau calling CashCall a purveyor of “financial snake oil” and arguing the online lender should pay as much as $287 million because they deceived customers.

How To Build The Best B2B Customer Experience (Forbes), Rated: A

In order to build the best B2B customer experience, companies should focus their effort on four principles:

  1. Invest in digital systems. Financial technology start-up Kabbage leverages new technology to approve small business loans in just seven minutes—a huge improvement over the 20 days it takes a typical bank. By simplifying the loan application process for web and mobile, Kabbage allows customers to apply for loans within minutes from anywhere in the world, which relieves a huge pain point for small businesses.
  2. Leverage data.
  3. Customize the experience.
  4. Use omnichannel to see the big picture. In fact, the average B2B customer uses six different channels as they make a decision. Customer experience happens in many places, which means companies need to create a consistent omnichannel experience.

Interesting Investments: Peer-to-Peer Lending (Equities.com), Rated: A

Peer-to-peer (P2P) lending, also known as peer lending, crowdlending, or social lending, is essentially what it says on the tin: lending money to another in an unsecured loan.

Prosper, one of the bigger companies managing P2P lending, has seen a fairly consistent return of about 9 percent through 2014, with a dip to 6.6 percent in 2012. Lending Club has seen a rise from 4.9 percent in 2009 to about 8 percent in 2014. All told, not bad ROIs.

First, you must be at least 18 years old, with a Social Security number, and live in an eligible state to even consider investing. Then, some states require that you have a minimum $70,000 gross income ($85,000 for California), and a minimum net worth of $70,000. You may not be able to invest more than 10 percent of your net worth. However, if your net worth is at least $250,000, there is no minimum income requirement.

Prosper, for example, has an annual default rate 3 to 4 percent higher across all grades. Lending Club has a 6 to 7 percent default rate.

Boston Fintech Company Cayan Is Getting Acquired for $ 1.05B (Bostinno), Rated: B

Cayan, a payment processing company that has been around the Boston fintech scene for the last 19 years, is in the process of getting acquired by Total System Services in an all-cash transaction valued at approximately $1.05 billion. The transaction is expected to close in the first quarter of 2018.

United Kingdom

Octopus Choice passes £100m AUM (AltFi), Rated: AAA

Octopus Choice has passed £100m of assets under management, following on from the launch of its Innovative Finance ISA in the summer.

Assetz Capital Makes Changes to the Great British Business & Green Energy Accounts (Crowdfund Insider), Rated: A

On Monday, online lending platform Assetz Capital announced it is doing away with the Great British Business Account (GBBA) and the Green Energy Account (GEA).

Ranger Direct Lending makes further $ 9.1m provision for Argon Credit (AltFi), Rated: A

The £232m Ranger Direct Lending fund has made a further $9.1m provision against its indirect investment in the collapsed Argon Credit lending platform.

ThinCats Reveals New Branding, Launches Updated Website (Crowdfund Insider), Rated: B

SME peer to peer lender ThinCats has launched a new website and branding designed to position itself for its next phase of growth in 2018.

Goji – Empowering Direct Lending (LinkedIn), Rated: B

Paul McMahon, former group marketing director of Aegon and UK CEO of FNZ, and Vincent Bordes, Founding Partner of Vestigo, the credit risk consultancy, will comprise the advisory board. Elizabeth McCallum joins as Goji’s Head of Marketing,  David Beacham as our Head of Distribution, and Rehan Islam as Head of Investments.

China

China’s Wild Bunch: Startup Investors Are Cashed-Up Cowboys (WSJ), Rated: AAA

In the first 11 months of this year, 3,418 new venture-capital and private-equity funds in China raised 1.6 trillion yuan ($241.76 billion), more than double the amount of 2015 and more than 10 times that of 2006, according to consultancy Zero2IPO Group. It estimates about 12,000 investment firms manage 8.5 trillion yuan in capital, an increase from 8,000 firms managing 5 trillion yuan in 2015.

Out of 221 unicorns in the world, 59 are in China, according to CB Insights. While that may lag behind the 127 from the U.S., it’s ahead of the U.K.’s 12 and India’s nine. Many Chinese investors want to invest in Silicon Valley because they think the valuations there are more reasonable.

Government agencies and local governments have announced 1,040 venture funds since 2015 aiming to raise about 8 trillion yuan, according to Zero2IPO. Much of the money is used to lure businesses to set up local offices, to help boost employment and tax revenues. The Hubei Province’s 200 billion yuan fund is believed to the largest of its kind.

Source: The Wall Street Journal

Borrowing From Multiple Online Lenders Remains Prevalent (Caixin), Rated: AAA

In China, online lenders or peer-to-peer (P2P) platforms that only facilitate lending do not have full access to borrowers’ credit information as there is no such centralized platform that shares the data.

Some borrowers take advantage of this information asymmetry to apply for loans from multiple lenders so they can roll over previous debts elsewhere, or to take out cheaper loans to repay the ones that charge higher interest rates and profit from the difference, or even become lenders on other P2P platforms themselves, according to a study by the Beijing Internet Finance Industry Association.

The association’s recent report found that among the 61 online lenders surveyed, 44% of their customers on average had borrowed from multiple sources.

The survey found that nearly 500,000 borrowers tried to profit from arbitrage by taking advantage of the different interest rates charged by different online lenders. On average, each of them borrowed from 2.36 online lenders, the survey said.

China’s war on risk hands US$ 121b loan market to big firms (The Malay Mail Online), Rated: AAA

China’s whac-a-mole approach to risk — hit it everywhere it pops up — is set to hand control of the surging US$121 billion technology-driven lending market to a small group of leaders such as Lufax Holding and the finance affiliate of Jack Ma’s Alibaba Group Holding Ltd.

Macquarie estimates credit extended by China’s fintech firms will jump more than seven-fold by 2022 to 6.2 trillion yuan (RM3.8 trillion) to pay for things like luxury and household goods or training and education. About half that market is micro-lending — typically small, short-term loans with high interest rates, Macquarie says.

China’s 10 biggest fintech companies account for 36 percent of all loans, said Dexter Hsu, a Taipeh-based Macquarie analyst. Tighter regulation could erode China’s more than 2,000 online micro-lenders and so-called P2P platforms, which directly match borrowers with investors, to less than 200, he said.

Chinese FinTech IPOs Don’t Dazzle Wall Street (PYMNTS), Rated: A

Newly listed Chinese FinTech companies in the U.S. are struggling on Wall Street, leaving investors with unexpected losses and posing as a setback to other Chinese firms hoping to go public.

“The quality of the businesses were either too early [to go public], untested or just poor,” said Anh Lu, an equities portfolio manager at T. Rowe Price in Hong Kong. “And they were asking for very high valuations on top of that.”

European Union

Funding Circle hits €100m lending milestone in Germany (P2P Finance News), Rated: AAA

FUNDING Circle has hit the €100m (£88.2m) loans milestone in Germany just two years after launch in the country.

The business lending platform says 3,000 investors have backed 1,100 German businesses and created more than 2,000 jobs since 2015.

The platform entered the European market following its acquisition of German platform Zencap in 2015. It now has operations in the UK, US, Germany and the Netherlands.

Earlier this month it said it had passed £3bn of lending in the UK and $5bn globally across all its platforms.

C’est Génial! Younited CREDIT Tops 100,000 Loans (Crowdfund Insider), Rated: AAA

Younited Credit has just surpassed 100,000 in loans since platform inception. The Paris based online lender (formerly named Pret d’Union) reported an accelerating rate of loan originations as the number has doubled since September 2016 when total loans stood at 50,000. The platform provides loans from €1000 to € 40,000. To date, Younited Credit has originated over € 650 million in loans.

BorsadelCredito.it Raises €1.6M in Funding (FinsSMEs), Rated: A

BorsadelCredito.it, a Milan, Italy-based fintech startup, raised €1.6m in funding.

The round was led by P101 Ventures, with participation from Azimut Enterprises Holding, GC Holding, Banca Popolare di Fondi and private investors.

DreamQuark wins the 2017 Fintech of the Year (Digital Journal), Rated: B

A startup company called DreamQuark, which produces Artificial Intelligence applications for financial services, has been awarded the Finance Innovation ‘Fintech of the Year’ prize.

National Personal Credit Platform Appoints Chairman (Caixin), Rated: B

The chairman of a wholly-owned central bank subsidiary, Zhu Huanqi, has been appointed chairman of a planned national personal credit-information platform, Caixin has learned from sources familiar with the matter.

International

Online Banking and Payments: Innovative Solutions on the Horizon (FinsSMEs), Rated: AAA

In the near future, online banking and payments will go through some fascinating changes beyond what has already happened over the past several years.

Advanced Mobile Payments

Today, there is increasing demand for biometric authentication apps. To ensure that consumers get what they want, MasterCard is going a step further by developing facial identification, voice recognition, and even cardiac rhythm programs. These innovative solutions will enhance the mobile payment experience for customers and retailers alike.

Growing Opportunities for Mobile Wallets

Back in 2014, Apple was the only real contender for mobile wallets. Within just one year, others followed their lead, including Samsung and Google. Then, in just a short amount of time, more big-name players joined in, such as Chase, Amazon, and Walmart. However, that was not the end. Even social media platforms started offering online payment options. With sites like Facebook that have mobile wallet solutions, people can send money and make payments.

Another prediction is that by 2025, 75 percent of all transactions will be made using mobile wallets rather than actual cash.

Greater Demand for Digital Remittances

For instance, a San Francisco-based company founded in 2001 called Xoom has experienced amazing growth because of digital remittances. In fact, it passed up MoneyGram, which speaks volumes.

Growth Potential with Peer-to-Peer Lending

For instance, having originated loans over $20 million since being founded, Lending Club ranks as one of the fiercest competitors in this arena.

How Banks Are Leveraging Chatbots for Customer Service (Crowdfund Insider), Rated: A

Bank of America: Erica

In October of 2016, Bank of America unveiled Erica, their new AI chatbot. Available in the bank’s mobile app, Erica can work with voice and text commands.

Erica uses machine learning and specially-designed algorithms to provide Bank of America services that were typically reserved for the bank’s top-tier customers. As an example, it could recommend a way to pay down more on your credit card debt to save on interest payments. Or if your checking account is close to being overdrawn, it could contact you to recommend a transfer from your savings account.

Swedbank: Nina

Customers can access Nina from the bank’s website, and it can understand a wide range of text requests using specially designed Natural Language Understanding technology.

In the first three months after Nina’s release, the software was handling an average of 30,000 customer interactions per month.  Of those early interactions, Nina was able to provide a resolution rate of 78%.

Capital One: Eno

Eno from Capital One is a chatbot program that works through SMS messaging.

You can use this AI chatbot to check the balance on your accounts, see your available credit, track recent transactions, pay bills, and more.

Wells Fargo

The Wells Fargo virtual assistant is a chatbot that the bank recently released for use with Facebook Messenger. Once a customer enrolls their account, they can then use Messenger to contact the virtual assistant for basic tasks like tracking recent transactions, balance inquiries, and finding the nearest ATM.

Digital investments: Modern ways to invest in the digital age (Bankless Times), Rated: A

The internet has brought about all kinds of new ways to invest one’s money.

  • Bitcoin
  • Peer-to-peer lending – You’re best off using a well-established site such as Ratesetter.
  • Micro-investment apps – Some apps round up all of your expenses to the nearest dollar and then put the leftover change into an account (for example, if a cup of coffee costs $3.14, this will be rounded up to $4 and the $0.86 extra change will be put into the account).
  • Social media shares
Australia/New Zealand

Australian Fintech Airwallex Secures $ 8 Million Investment From Square Peg (Crowdfund Insider), Rated: AAA

Less than one year after securing $13 million during its Series A funding round, Aussie fintech startup Airwallex announced it has received an $8 million investment from Paul Bassat’s Square Peg.

Testing a chatbot’s home loan advice gives a range of outcomes (Stuff), Rated: A

A mortgage broking firm is offering an AI chatbot to help first-home buyers understand some of the basics – but an experiment shows you shouldn’t put too much faith in any online calculators’ estimates of how much you might be able to borrow.

Squirrel has launched Alan, an online tool that answers questions like “how much deposit do I need”, “what’s an auction” and “how much can I borrow?”

Regulatory Pathway for Challenger Banks Just OK, Could be Improved (Crowdfund Insider), Rated: A

FinTech Australia has provided a comment onthe consultation paper published in August regarding authorising new entrants into the banking industry. The creation of digital challenger banks in Australia is a welcomed move but, according to FinTech Australia, needs some improvement.

India

5 Consumer Lending Trends To Look Forward To In 2018 (Inc42), Rated: AAA

This amendment to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 is a step towards standardisation and providing a visible digital identity, thereby promoting transparency in financial transactions. Another factor that is pushing financial transparency is the rise of Fintech and the subsequent new-age companies that are offering digital avenues for finance such as payment platforms, blockchain companies, alternative financers like P2P lenders and so on.

Consumer Lending Trends To Look Forward To In 2018

Alternative Lending Boom

New service providers will serve the underserved and unserved, meeting the unmet demand. We will continue to see the rise of direct lending as well as P2P lending, marketplaces, crowdfunding platforms etc.

Ease Of Access To Credit

Credit will continue to grow, thanks to the alternative lending boom. One such burgeoning space is the Line of Credit. It has gained momentum in 2017 with the metros being early adopters and is expected to expand into tier 2 & tier 3 cities in 2018.

The Rise Of InsurTech

Investment In Emerging Technologies

Blockchain will expand in putting together smart contracts, and digital identification. Already, FinTech investments in Asia increased to $5.4 billion in 2016, up 12.5% from $4.8 billion in 2015, driven mainly by China and India.

Government And Regulatory Push For Fintech

Asia

Unique Secured P2P Lender Silver Bullion Reaches $ 50 Million in Loans (Crowdfund Insider), Rated: AAA

Silver Bullion, a peer to peer lending platform based in Singapore, has reached $50 million in loan originations. The unique platform that provides secured lending based off of bullion saw more than double the lending volume in 2017 versus year prior.

Amartha Powers Micro Peer to Peer Lending in Indonesia, Focuses on Women Entrepreneurs (Crowdfund Insider), Rated: A

Amartha Founder & CEO, Garuda Typhoon Andi Putra recently commented;

“Since its establishment, Amartha has been committed to connecting the unbanked micro entrepreneurs, and investors who want to add this asset investment in a sector that is more profitable and socially valuable. The uniqueness lies in the micro-entrepreneurs or Amartha Partners, all of which are women. Today, more than 72,000 women micro entrepreneurs throughout Indonesia have enjoyed our services, with a total fund distributed more than 200 billion rupiah (US $ 15 million). “

Affin Islamic Bank lists latest sponsored venture on IAP (New Straits Times), Rated: A

KUALA LUMPUR: Affin Bank Bhd’s wholly owned subsidiary, Affin Islamic Bank Bhd, has today listed its latest sponsored venture with Segi Seri Sdn Bhd on Investment Account Platform (IAP), a shariah-compliant platform similar to crowdfunding and peer-to-peer lending platforms.

Affin Islamic said the venture plans to raise RM3.3 million on IAP to part-finance contract awarded to them recently, which is related to preparation and serving of dietetic food to an established government hospital in Malaysia for a duration of three years.

 

Canada

Another challenge is the new technology. Instant Financial Inc., a Vancouver-based startup, released an app this year that lets workers paid by the hour get their day’s earnings after a shift. It’s free for employees. Employers pay a fee. The focus so far is the hospitality industry, and includes companies such as McDonald’s and Outback Steakhouse in the United States. Instant has about 175,000 people on the service in the United States and about 5,000 in Canada. Wal-Mart has a similar product, which it sourced from another company.

Africa

A mobile banking service is transforming how the poor transfer money — here’s how it works (Business Insider), Rated: AAA

In 11 countries around the world, some 30 million people use a mobile money service that is transforming how people handle their finances.

It’s called M-Pesa, and it has lifted hundreds of thousands of people out of poverty in Kenya.

Krispo, 40, is enrolled in GiveDirectly’s experiment in basic income, a system of wealth distribution in which people receive a standard salary just for being alive.

The money comes with no strings attached. Krispo and the other villagers have received $22 a month since October 2016, and they’ll continue getting it until October 2028.

Scattered around town are M-Pesa stands, outfitted with live agents who can dispense money — essentially an ATM with a human teller.

There is a small fee for each transaction. For the amount given to GiveDirectly recipients, this fee is 30 shillings. (GiveDirectly actually wires 2,280 shillings each month — 30 shillings above the 2,250 recipients can spend — to cover the cost.)

Authors:

George Popescu
Allen Taylor

Monday November 20 2017, Daily News Digest

weather unsecured consumer loans Orchard

News Comments Today’s main news: PayPal to sell $6B in consumer loans. Cleveland Fed retracts study on P2P lending. China Citic, Baidu launch direct bank. Flender to expand into eastern Europe, Spain. Douugh partners with Choice Financial. Today’s main analysis: Orchard Platform says how hurricanes affect unsecured consumer loans. Is LendingClub shifting to higher quality borrowers permanently? Today’s thought-provoking articles: […]

weather unsecured consumer loans Orchard

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

PayPal to sell $ 6 billion in consumer loans to Synchrony Financial (TechCrunch), Rated: AAA

PayPal announced today it has agreed to sell $5.8 billion in consumer credit receivables to Synchrony Financial, in an expanded relationship between the companies. The deal also includes Synchrony’s acquisition of $1 billion in participation interests in PayPal receivables held by certain investors and a chartered financial institution, the company said.

As a result of today’s deal, the two companies will expand their partnership by making Synchrony Bank the exclusive issuer of the PayPal Credit online consumer financing program available to PayPal customers in the U.S. for the next 10 years, replacing Comenity.

Orchard Platform Initiates Analysis: Severe Weather’s Effect on U.S. Unsecured Consumer Lending Industry (Crowdfund Insider), Rated: AAA

In a recent blog, Orchard Platform posted initial research how much Hurricanes Harvey and Irma affected the U.S. unsecured consumer lending industry. According to Orchard Platform, approximately 91% outstanding loans in Florida were in designated FEMA disaster areas including metropolitan areas Tampa, Orlando, Miami and Jacksonville.

“The population of loans in the areas affected by Harvey experienced a 3x increase from July 2017 to September 2017,” according to Orchard Platform Credit Analytics Manager Nicholas Del Zingaro. “All consumer unsecured loans in Texas experienced a 170 bps increase in Current to 30 Roll Rate over the same period. Irma made landfall on September 10th, but the Florida and Irma designated areas within Florida and Southern Georgia already show signs of distress, with the Current to 30 Rate increasing from 1.5% to 2.5%. The total population had an uptick of 30 bps from August to September.”

Source: Crowdfund Insider

Why Cleveland Fed should retract its online lending study (American Banker), Rated: AAA

The Marketplace Lending Association is calling upon the Federal Reserve Bank of Cleveland to temporarily retract and revise its report on online lending due to what we see as serious flaws in the authors’ reliance on certain underlying data.

In our view, this paper — “The Taste of Peer-to-Peer Loans” — and its accompanying materials show that a lack of precision and understanding of subject matter can result in significant inaccuracies. The report’s authors presented findings that seemed to reflect issues with the P-to-P industry, but they actually relied on data from a much broader category of loans. The result was a misleading and brutally critical report about the P-to-P industry that was actually based in part on data from more traditional loans.

Cleveland Federal Reserve Pulls Document Critical of Peer to Peer Lending as Critics Question Research Methodology (Crowdfund Insider), Rated: AAA

Earlier this month Crowdfund Insider posted a research report published by the Cleveland Federal Reserve that was highly critical of the peer to peer lending industry (marketplace lending) in the US. The report, authored by Yuliya Demyanyk at the Cleveland Federal Reserve, Elena Loutskina at the University of Virginia, and Daniel Kolliner at the University of Maryland, has since disappeared from the Federal Reserve site.

GS Marcus Deep-Dive (PeerIQ), Rated: AAA

Marcus, was launched in October 2016 amidst mixed perceptions from market participants. One-year later, however, Marcus has achieved its $2 Bn origination objective – making it the fastest growing lending platform that PeerIQ tracks.

GS Marcus expects to originate $13 Bn over three years – the exact amount that Wells Fargo consumer balances have shrunk over the last twelve months as detailed in the PeerIQ Lending Earnings Insights reportGS expects to grow revenue from the Marcus platform to over $1Bn by capturing roughly 6% of the $250Bn unsecured consumer loan market:

Source: PeerIQ

GS CFO Marty Chavez notes that Marcus has an aggressive ~3.5% ROA objective. By comparison, Discover’s ROA is currently ~2.4% and has only achieved a quarterly 3.5% ROA once in the last ten years.

Source: PeerIQ

Although the statistics look similar, each lender is measuring loss-rates somewhat differently:

  • Lending Club and Prosper cumulative loss rates on 36-month prime term loans are ~12% – as estimated by ratings agencies during a base case (not thru cycle) scenario.
  • GS projects thru-the-cycle annual credit losses of 4.0%. Therefore, GS is betting that it will outperform on losses thru-the-cycle.
  • Discover’s 3.2% loss-rate is a realized statistic from the most recent 10-Q.
    • Discover management notes that loss rates are re-normalizing to higher levels. Indeed, Discover’s loss rate was 2.1% two year ago in 3Q 2015 and management expects losses will continue to re-normalizing going forward.
    • We believe a comparable thru the cycle loss-rate for Discover would meet or exceed 4%. By way of comparison, the Discover loan portfolio experienced a peak charge-off rate during the financial crisis of ~7%. (and continued to deliver a positive ROA).
* GS estimate of 4%, Lending Club and Prosper based on 3-year ratings agencies cum. Loss estimate of 12%. Discover based on 3Q-10Q realized
Source: PeerIQ, GS Investor Presentation, Public Filings, Bloomberg.

Is LendingClub Making a Permanent Shift to Higher Quality Borrowers? (Lend Academy), Rated: AAA

recent post on the Lend Academy Forum spurred a discussion about the potential future of LendingClub, particularly as it relates to the types of borrowers they serve. While we don’t have insight into what LendingClub’s plans are, there are several things that have happened over the last two years that help us hypothesize that LendingClub’s strategy may be shifting.

LendingClub recently sent an email titled “How LendingClub Notes May Help You Generate Long-Term Wealth”. In it, they tout returns in the 4-6% range, a far cry from the returns some investors saw in LendingClub’s early days. The 4-6% range they present is footnoted, clarifying that this includes only grades A-C.

After I began writing this article LendingClub coincidentally announced in their recent earnings call that loan grades F and G would no longer be available to investors  These loans have an average interest rate of 24.16% on LendingClub’s platform. Moving forward, the loans will be brought in house as part of a test portfolio for LendingClub.

You can clearly see the expansion of C grade loans, which has increased to 36.09% of total originations in 2017, the most ever.

Source: Lend Academy

C grade loans currently make up just shy of 50% of 60 month loans.

Source: Lend Academy

Are Banks and Credit Unions Prepared for a New Mobile Era? (The Financial Brand), Rated: AAA

After years of strong mobile growth being driven by younger demographic segments, the majority of recent, more modest growth can be attributed to the 55 and older generation. In fact, consumers in the 55+age group have a three-year compound annual growth rate (CAGR) of nearly 8% compared to only 2% for the 18 to 34 segment, according to a study from Deloitte.

As in 2016, close to 90% of consumers viewed their phone within an hour of waking up, with roughly 80% doing the same within an hour of going to sleep.

Interestingly, the Deloitte research found that over 70% of younger demographic groups believe they are using their phones too much and are looking for ways to limit dependence. Alternatively, only 13% of consumers over 55 had the same concerns.

Source: The Financial Brand

When consumers were asked about the way they communicated on mobile phones, all options increased in 2017, including text messaging (91%), voice calls (86%), email (81%), social messaging (72%) and video calls (30%). The increase in voice calls reversed a four-year decline.

The survey found a significant growth in use of mPayments in 2017, albeit against a rather low base number. According to Deloitte, consumers who said they made an in-store mobile payment with a smartphone or other device in 2017 reached 29%, which is a 50% increase over 2016. Those who used mPayments weekly also increased by 50% in 2017, (from 8% to 12%).

This $ 700 Billion Industry Has Been Untouched By Tech, Until PeerStreet Changed Everything (Forbes), Rated: A

The PeerStreet platform lets accredited private investors access the huge market of real estate loans, backed by big data and advanced underwriting to identify loans that can give consistent returns.

Brett Crosby, Co-Founder and COO of PeerStreet, has extensive experience in analytics from his time working at Googleas Director of Product Marketing.

What did you do before this?

I was the co-founder of a company called Urchin, which was early in the web analytics space. We were acquired by Google in 2005, and turned Urchin into Google Analytics. I stayed at Google for 10 years, building and launching Google Analytics, launching mobile ads, local ads, the go-to market on social initiatives at Google, and Google Drive. After that, I was running global growth on Chrome, Gmail Docs and Drive.

Mulvaney as CFPB head? Five things to know (American Banker), Rated: A

If President Trump taps Office of Management and Budget Director Mick Mulvaney as interim head of the Consumer Financial Protection Bureau, as is widely expected, he will be a sea change from outgoing head Richard Cordray.

Mulvaney, a former congressman from South Carolina, was a fierce critic of the bureau when in Congress and he sat on the Financial Services Committee.

CFPB final payday/auto title/high-rate installment loan rule published in Federal Register (The National Law Review), Rated: A

The CFPB’s final payday loan rule was published in today’s Federal Register.  Lenders covered by the rule include nonbank entities as well as banks and credit unions.  In addition to payday loans, the rule covers auto title loans, deposit advance products, and certain high-rate installment and open-end loans.  For a summary of the rule, see our legal alert.

The controversy around Mark Warner’s payday lending bill, explained (The Week), Rated: A

At issue is the different ways that states try to handle payday lenders. Some states try to crack down on them with caps on interest rates. But other states are more lenient. And the situation is further complicated by big national banks, which operate under federal law and only have to comply with interest rate caps in the state they’re chartered in.

That loophole enables national banks to engage in “rent-a-charter” schemes. Since these banks aren’t subject to an interest rate cap (or are subject to a more lenient one), they can issue a predatory loan, then immediately sell that loan to a smaller payday lender barred by state law from issuing it on its own.

Pavaso Inc. has announced that it has selected eOriginal to support lenders in the digital mortgage process. Specifically, Pavaso will utilize eOriginal’s electronic promissory note (eNote) and electronic vaulting (eVault) services.

Elevate Credit (ELVT) and Its Peers Head to Head Comparison (Dispatch Tribunal), Rated: A

Net Margins Return on Equity Return on Assets
Elevate Credit 0.13% 1.40% 0.14%
Elevate Credit Competitors -27.28% -16.64% -8.05%

51.8% of Elevate Credit shares are held by institutional investors. Comparatively, 40.9% of shares of all “Professional Information Services – NEC” companies are held by institutional investors.

Gross Revenue NetIncome Price/Earnings Ratio
Elevate Credit $580.44 million -$22.37 million 357.00
Elevate Credit Competitors $242.33 million -$13.85 million 84.22

How Blockchain Technology Can Serve the Have-nots (Wharton), Rated: A

Some 2.7 billion people worldwide today have zero access to capital. Despite lacking any credit history or verifiable economic identity, these so-called unbanked or under-banked individuals can now access global capital markets with a $10 Android phone, thanks to blockchain-based economic identity platforms like BanQu or Humaniq that create a unique hash of verifiable authenticity — similar to a social security number — from a simple retina scan or selfie. The total market opportunity this group represents is a staggering $380 billion, according to a recent report.

Coinbase is going after big hedge fund money with its new cryptocurrency security platform (Business Insider), Rated: A

On Thursday, Coinbase, the San Francisco-based cryptocurrency exchange, announced a new platform that might quell the anxieties of big money investors looking to invest in crypto. The platform, called Coinbase Custody, was built specifically to meet the needs of such investors, including hedge funds and family offices, according to a Medium post by Coinbase CEO Brian Armstrong.

Just last week, an unidentified user accidentally deleted the code library required to use recently created digital wallets within Parity, a popular digital-wallet provider, and cryptocurrencies have long been associated with the chasms of the deep, dark web.

The service will charge users a $100,000 startup fee. Armstrong said there will also be a monthly fee based on assets.

Because index funds pose little competitive threat, expense ratios for the leading alternative funds are far higher than elsewhere in the industry. These days, the vast majority of conventional fund sales go into funds that have expense ratios of less than 0.60%–usually much less. With alternatives, on the other hand, a 1% expense ratio is considered low-cost. Most of the larger funds have expense ratios approaching 1.5%, which would doom them were they not alternatives.

Given all these differences, it’s not surprising that, for alternatives, industry leadership is upside down. The giants are absent. Among them, Vanguard, BlackRock, Fidelity, Capital Research, and T. Rowe Price run a grand total of $7 billion in alternative mutual funds. In contrast, the management firm AQR controls $29 billion.

Source: Morningstar Direct

RealEstateInvestingProfits.com Explain Why Bitcoin and Real Estate Investing are Joining Forces (PRUnderground), Rated: A

RealEstateInvestingProfits.com, a strategic consulting and real estate investing educational platform that is responsible for a combined 1,000 closings and nearly a 100m in total sales volume focused on wholesale/flips with their partners and affiliates, are making a compelling argument, suggesting that real estate and Bitcoin should be natural partners and doing their best to open eyes to possibilities in this area.

With the Real Estate Market Size growing from $7.1 trillion in 2015 to $7.4 trillion in 2016, currency movements effectively reduced the size of the global real estate investing market by approximately 2.3% in the dollar (USD) terms according to MSCI Research, the question many are asking – Can Bitcoin be a positive disruptor to save on third-party fees and high transactions exchanges from lending?

How does Affirm make money? (Vator.tv), Rated: B

Affirm makes it easy to repay the loan, send out email and SMS text messages to remind the customer of upcoming payments. Users can pay theur Affirm bills online, by debit card or ACH transfer, and sign up for autopayment.

The company makes money the same way that a credit card does: by charging interest of between 10 percent and 30 percent.

United Kingdom

In lending its all about the recovery (AltFi), Rated: A

There’s a problem with shadow banking and alternative finance. It’s called what to do when bad stuff happens.

Whereas most consumer lenders will struggle to provide 5%, platforms such as Funding Circle, Assetz and ThinCats can easily provide a net yield in excess of 5%, even after allowing for losses.

This deeper understanding of the lending process and defaults is all for the good but I think it raises a much more critical issue, especially relevant for SME lending – how do lenders cope with problem borrowers?

But Funding Circle also has a sweet spot in lending tens and hundreds of thousands of pounds which means they tend to avoid lending large sums in the £500k to £50m bracket (in fact nothing towards to the top end).

Financial advisers found publishing false credentials online (Which?), Rated: A

Which? Money analysed 43 advice firms which are listed on on Unbiased.co.uk – a comparison service that allows you to find a financial adviser – which stated they employed certified financial planners. These are advisers who hold a specific certification from the Chartered Institute of Securities and Investment (CISI).

Some 63% of them (27 firms), however, did not actually employ any such advisers.

Seven out of 24 firms (29%) were also falsely claiming to be accredited by the Society of Later Life Advisers (SOLLA), and 14 out of 72 firms (19%) claimed to have advisers with chartered financial planner status, despite not employing anyone who was, in fact, chartered.

UK FinTech to Launch a Bitcoin Visa Debit Card with Support for Altcoins (Cryptocoins News), Rated: A

A London-based fintech startup is planning on launching a prepaid Visa debit card, giving users the option to spend a range of cryptocurrencies across the U.K.

On Tuesday, the London Block Exchange (LBX) launched, headed by an 18-year Credit Suisse veteran.

The cryptocurrencies include bitcoin, ethereum, ripple, litecoin and monero.

Fintech startup Glint de-cloaks to offer a multi-currency account and card that supports spending gold (TechCrunch), Rated: B

London-based Glint has been pretty stealthy about what it planned to offer, despite several funding rounds and a vague description that it wanted to a create new “global currency” based on gold. Well, today the fintech startup is finally de-cloaking with a staggered launch of its multi-currency account, app and card that does indeed let you store your money in gold and convert it back to fiat currency at the point of payment.

Komodo (KMD) bringing first dICO to Market with Monaize (Oracle Times), Rated: B

Komodo (KMD) has a much smaller market cap at $233 million. Komodo promises to be a block chain interoperable network to allow transactions across coins to help financial institutions bring banking to freelancers, small business owners, and other underserved customers accept and send payments.

Monaize is now teaming up with Komodo for the first dICO to facilitate financial transactions using cryptocurrency.

China

China Citic, Baidu launch direct bank in fintech push (Reuters), Rated: AAA

China Citic Bank Corp (601998.SS) and search engine giant Baidu Inc (BIDU.O) launched on Saturday a direct banking joint venture, dubbed AiBank, to capitalize on China’s rapidly growing fintech sector.

Young, Carefree and Unsecured (Bloomberg), Rated: AAA

Consumer lending is booming in China, thanks to a less thrifty younger generation who have cast off the save-at-all-costs mentality of their parents.

China’s unsecured consumer loans amounted to just 9 percent of gross domestic product in the first nine months of this year, compared with 15 percent in the U.S., according to consultants Oliver Wyman. The educated 18- to 36-year-old borrowers LexinFintech targets tend to be ignored by banks, even though their job prospects mean that they’re unlikely to default.

Auto financing, meanwhile, has exploded to account for more than a third of car purchases last year from 8 percent in 2011, according to CLSA Ltd. data.

Peer-to-peer lender PPDAI Group Inc., which listed in New York last week, also said that its rates exceeded 36 percent once fees are included. The company’s shares are trading below their offer price.

WeiyangX Fintech Review (Crowdfund Insider), Rated: A

People’s Bank of China, China’s central bank, has made plans to launch a united platform by the end of 2017 for collecting personal credit information and assessing people’s credit ratings.

The new platform is expected to cover data from non-traditional market participants, especially Fintech industry (e.g. peer to peer lending), which will complement the existing credit data mechanism, increase supervision over non-traditional financial sectors and effectively reduce systematic risks.

Third-party credit service agencies may also become shareholders in the new platform with a ratio of 8% respectively.

On November 16th, Jianpu Technology Inc. announced it would be listed on the NYSE. Goldman Sachs, Morgan Stanley and JP Morgan are the bookrunners for the deal.

On November 16th, Xiamen Financial Affairs Office released the first P2P lending firms fillings in China. However, what drew the media’s attention more in the fillings is a firm called Jing Dong Xu Hang Online Lending Information & Intermediary Service Ltd. This company is a wholly owned secondary subsidiary of JD Finance. 

European Union

Flender looking at expansion into eastern Europe and Spain (The Business Post), Rated: AAA

Flender, a peer-to-peer lending start-up backed by Ding founder and Esat Digifone co-founder Mark Roden, is eyeing up an expansion to eastern Europe and Spain after it launches in Britain next year.

Charles Egly of Younited Credit (Lend Academy), Rated: A

Younited Credit is the largest online consumer lender in Continental Europe having crossed €500 million in total loans issued earlier this year.

In this podcast you will learn:

  • What the banking environment is like in France.
  • The long road they took to get a banking license.
  • The typical borrowers coming to Younited Credit today.
  • The terms of the loans they are offering today in France.
  • The kinds of investors on their platform today.
  • How they structure their investor offerings.
  • The three different ways they make money.
  • How their insurance product works.
  • The yield to investors of their different offerings.
  • Who Charles sees as their competitors.
  • How they are expanding their business to Italy and Spain.
  • Some of the large investors they are working with today.
  • Their approach to technology and underwriting.
  • Some of the alternative data they are using to feed into their algorithms.
  • How Brexit has impacted their business.
  • How they are using the €40 million they raised recently.
  • Where they are at with regards to profitability.

And more.

Allied Irish Banks invests €30m in payments fintech firm Transfermate (City A.M.), Rated: A

Allied Irish Banks (AIB) has invested €30m in (£27m) in business-to-business international payments start-up Transfermate, it will announce today.

The investment could value Transfermate at between €250m to €300m, sources said.

International

Fintech funding round-up (Banking Technology), Rated: A

As reported in May, peer-to-peer lending start-up Flender was seeking to get €1 million in funding and is targeting a UK launch after getting full authorisation from the Financial Conduct Authority.

Over in Israel, Tipigo Ventures, which offers an artificial intelligence (AI) powered wealth management platform, has raised $1 million in seed funding. The firm says this puts its valuation at $10 million.

Kuants, an algorithmic trading platform, will “co work” and “co live” at IA’s start-up academy during a three-month long acceleration programme.

Staying in India, Sumeru Enterprise Tiger Business Solutions, a Bengaluru-based banking software start-up, has raised $900,000 from unnamed investors in India and the US.

Australia

Fintech start-up Douugh scores partnership with US mutual bank Choice (Financial Review), Rated: AAA

Sydney-based fintech start-up Douugh has scored a partnership with US mutual bank Choice Financial, as it readies to launch its smart banking personal assistant, Sophie.

As part of the open banking partnership, Douugh will launch an integrated bank account and debit card with the bank, giving it the ability to accept deposits. Choice Financial has also invested in Douugh, as part of a $2.5 million seed round.

India

Fintech startups simplify digital money lending (Sunday Guardian Live), Rated: AAA

Amongst those startups who have been simplifying digital lending are Rubique, InCred, ZestMoney, Qbera, Loan Singh etc.

Working as a medium for a customer and financial institutions, data analytics performed on hundreds of data points on Rubique’s platform assess the creditworthiness of the customers (loan origination qualification), bringing predictability by giving them eligible offers to choose from.

Using real-time processing is also part and parcel for Zest Money, based in Bangalore since 2015, whose USP is its simple digital process, fast approval time and flexible products, with the benefit of multiple options to pay EMIs.

Using cutting-edge technology and proprietary credit underwriting algorithms, based on alternative data sources, Loan Singh enables frictionless lending to creditworthy and underserved borrower segments. It mainly provides personal loans (for salaried individuals), Professional Certification Loans (for students pursuing skill development and certification programmes), and Small Ticket Unsecured Personal and Consumer Loans (through third-party associations).

Others like InCred, founded in January 2017 and based out of Mumbai, focus on giving credit to those customers who have traditionally been underserved by large banks and NBFCs.

How fintech startups are assisting MSMEs, the biggest contributors to the Indian economy (YourStory), Rated: A

While contributing eight percent to the nation’s total GDP, micro, small and medium enterprises (MSMEs) also provide for 40 percent of the total export. Producing over 10,000 different types of products, these small-scale ventures are also responsible for 45 percent of the entire manufacturing output.

To begin with, last year’s demonetisation drive has propelled the digital onboarding of a number of MSMEs.

However, given a favourable environment and a slew of radical changes, there is still a huge credit deficit that is still unmet for the sector. This is exactly where the number of mushrooming fintech startups step in. To disrupt the status quo and level the playing field, a number of fintech lenders are supporting these small-scale ventures. The fact was made evident by McKinsey, claiming that nearly 75 percent of the emerging fintech lenders are helping MSMEs with lending, payment systems, retail banking, wealth management and more.

In digital drive, Aegon Life looking for fintech partnerships (Zeebiz), Rated: B

Aegon Life Insurance is exploring partnerships with fintech firms to expand customer base through a digital push of selling policies online, a top company official said.

Five fintech platforms which will make all your honeymoon dreams come true (Business-Standard), Rated: B

Here is a list of five fintech platforms, which will make all your honeymoon dreams come true:

  1. Loantap.in
  2. Faircent.com
  3. Rubique
  4. CreditMantri
  5. BankBazaar
Asia

P2P lender Crowd Genie targets raising up to $ 31.6m via ICO (Deal Street Asia), Rated: A

Singapore-based P2P lending solutions provider Crowd Genie plans to conduct an initial coin offering (ICO) of its CGCOIN currency, aiming to raise up to ETHB100,000 ($31.69 million).

Are crowdfunding and P2P lending good options for business financing? (e27), Rated: A

For the better part of a decade, banks have relaxed their lending conditions, too, so small businesses are finding more success with being approved for a loan.

But banks are not the only ones providing funding to small businesses, as they are actually reluctant to lend money to such enterprises in some jurisdictions. In China, for example, state-owned banks are not too fond of lending to individuals and small businesses. However, here P2P lending is a booming market, with around 2,200 p2p lenders and a market valued at US$100 billion.

Not all small businesses have the capability to launch their own ICOs, nor build their own blockchains over Ethereum, however. For this purpose, a startup called Starbase will empower any business or individual to crowdfund using cryptocurrencies and tokens without building their own network.

WeiyangX Fintech Review (Crowdfund Insider), Rated: A

It is based on this point of view that MAS and the Hong Kong Monetary Authority decided to collaborate on a Blockchain-based cross-border trade finance platform. The platform, which is called Global Trade Connectivity Network (GTCN), is an open-sourced Blockchain platform and will be launched at the start of 2019.

OJK Will Fix The Rules Regarding Fintech (Gatra News), Rated: B

The authority noted that as of September this year, 24 P2P lending companies consisting of 16 local companies and 8 foreign companies have been registered and licensed in OJK. Meanwhile 31 P2P lending companies are in the process of registration.

Authors:

George Popescu
Allen Taylor

Wednesday October 4 2017, Daily News Digest

ICO funding by month

News Comments Today’s main news: Elevate customers save more than $2B. Overstock launches SEC-compliant ICO alternative. RateSetter trims secondary market fees. PeerStreet funds over $500M in loans with zero investor losses. Qudian leads 2 IPO launches totaling $869. Kabbage on the road to $161M raise. Today’s main analysis: International P2P lending volumes. Today’s thought-provoking articles: Renren’s Joe Chen’s sneaky SoFi share grab. Hedge […]

ICO funding by month

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Caribbean

News Summary

United States

Elevate Customers Save More Than $ 2 Billion Thanks to Advanced Tech-Enabled Underwriting (BusinessWire), Rated: AAA

Elevate Credit, Inc. (“Elevate” or “the company”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced their customers have saved more than $2 billion, versus what they would have paid for payday loans. $613 million of these cumulative savings were incurred in the first half of 2017 alone.

Joe Chen’s Sneaky SoFi Share Snatch (Forbes), Rated: AAA

But in Silicon Valley Renren’s founder and CEO, Joseph “Joe” Chen, is no outcast. He is a well-connected guru and mentor who sits on the boards of companies in which Renren has invested, like LendingHome, Fundrise, and Motif Investing. Chen also sits on the board of Social Finance, known as SoFi, which has been under fire due to a mounting sexual harassment scandal that recently saw Mike Cagney resign as SoFi’s CEO and chairman.

Chen is cooking up a deal that will allow shareholders of Renren who are “qualified purchasers” and “accredited investors,” to exchange their shares in the company for ownership in a spinoff entity consisting of its investment portfolio, including Renren’s stake in SoFi. Other shareholders who do not qualify would instead get a cash payment reviewed by a special committee of Renren’s board.

Under the spinout plan, Chen, who owns 31% of Renren’s stock, SoftBank, which owns 39% of Renren, and DCM, which owns 8.6%, will likely increase their SoFi holdings. Most of the shareholders owning the remaining 20% of Renren would lose their exposure to SoFi given that they appear to largely be individual retail investors, Securities & Exchange Commission filings show. This would leave them with a yet-to-be determined dividend, and a holding in a declining, money-losing Chinese internet company.

Renren still has its stake in SoFi, which together with some other Renren investments is worth more than Renren’s market capitalization of $630 million.

Overstock.com launches SEC-compliant ICO alternative (Bankless Times), Rated: AAA

Online retail giant Overstock.com is currently not only offering custom jewelry or discount mattresses but has been delving into cryptocurrency through Overstock.com, its subsidiary focused on Blockchain ventures.

In their Overstock.com, they are now in a joint venture together with RenGen and Argon Group to launch an Automated Trading System (ATS) for trading tokens issued via ICOs.

According to reports, $2 billion has been raised in token sales this year alone.

Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag (Bloomberg), Rated: A

Hedge funds are proving to be first among equals when it comes to digital token sales by technology startups, receiving preferential discounts and terms and then often cashing out. While legal, the maneuver is drawing comparisons to some of the eyebrow-raising practices that took place during the IPO heyday of the 1990s, when many preferred investors would quickly resell shares for big profits.

“It’s not healthy for the ecosystem, and it’s pretty abusive,” said Kyle Samani, a managing partner at Austin, Texas-based Multicoin Capital, which invests in ICOs. “They are getting a discount because they are a big name, and they think it’s going to draw the retail investor. It’s the greater fools theory –- I’ll buy it if there’s someone who’s more of a fool than me.”

Source: Bloomberg

Startups often announce, with much fanfare, that such-and-such funds and big-name investors have participated in the presale. What isn’t as well publicized is that the early investors — and, possibly, even the startup’s founders — can often cash out right after the ICO.

Source: Bloomberg

More than 80 percent of ICOs are doing presales, according to Lex Sokolin, global director of fintech strategy at Autonomous NEXT.

PeerStreet funds over half a billion in loans, maintains zero losses to investors (PeerStreet Email), Rated: AAA

PeerStreet, the real estate investing platform for real estate debt, has just hit the milestone of having funded half a billion in loans and with zero losses to investors since the company launched in 2015.

Platforms in the P2P and crowdfunding space are seeing increasing competition and scrutiny, but PeerStreet has continued to offer investors access to quality loans and high yields, earning the public testimonial of some high-profile users, such as 

Kabbage is Raising $ 161 Million (Crowdfund Insider), Rated: AAA

Online SME lender Kabbage is raising $161 million, according to a filing with the Securities and Exchange Commission. The Fintech firm filed the Form D last week indicating it had already received $80,573,040 with the same amount remaining to be raised.

Atlanta fintech ‘unicorn’ Kabbage raising $ 161 million (Biz Journals), Rated: B

Kabbage, which is mulling an IPO, has raised about $80 million on the planned raise, according to a Securities & Exchange Commission filing. The fintech, valued at more than $1 billion, announced a $250 million investment from SoftBank last year.

Kabbage’s Petralia Talks Big Tech, Fintech and Lending (deBanked), Rated: A

It’s only been a few weeks since the blockbuster announcement that SoftBank is investing $250 million into Kabbage, which thrust the small business lender into the spotlight for a few reasons, not the least of which was the more than $1 billion valuation that has been speculated for Kabbage.

This valuation, of course, is in stark contrast to that of OnDeck, which also lends to small businesses.

“All of our bank partnerships are technology integrations where our technology sits in their systems. They use our technology to deliver the customer experience. And I think what SoftBank saw in us was that potential. Whatever the valuation was I can assure you it was a result of a lot of due diligence on the part of SoftBank,” she said.

Rethinking Credit Scores in the Age of Fintech (Huffington Post), Rated: AAA

What value do the three big ratings bureaus, Equifax, Experian and TransUnion, provide today in our emerging digital economy?

Increasingly in a world where payments may involve a peer to peer exchange, a global transfer, and more and more often a mobile phone transaction, the definition of good credit is going to change and widen.

Today, Experian maintains credit information on 215 million American consumers [Experian]. That’s over two-thirds of the total U.S. population [U.S. Census]. Roughly half of the population in the US has a FICO credit score that is less than 650, meaning that nearly half of people in the US cannot get credit from banks today.

The Equifax debacle turned up the volume on the call for change. We’re about to see more innovative ways of looking at credit, most of them built by mobile-first fintech companies.

Companies like PayPalKabbageSmartBizSquare, and others have stepped in to look at new ways to determine creditworthiness. Rather than depend solely on a single score like FICO, they are looking at a more holistic picture of a credit applicant.

SoFi, another lending startup, is using AI to analyze data from sources other than credit card information. And ShoCard, a blockchain-identity management system (IMS), teamed up with Creditinfo to let a customer claim their identity and manage who it gets shared with.

Chad Swenson of Lantern Credit believes your credit should be under your control. “Companies,” he says, “now have the ability to work with multiple alternative data streams outside of the traditional data delivered from the bureaus.”

Evan Singer, CEO of SmartBiz, a company devoted to helping small businesses secure loans, says that other metrics like your bank rating (how you use your bank rather than your credit) is another important piece of the puzzle often ignored.

CrowdStreet Debuts First Direct Commercial Real Estate Investing Platform for Financial Advisors (CrowdStreet), Rated: A

CrowdStreet, provider of the leading commercial real estate investment platform for investor acquisition and relationship management, today announced several enhancements to its flagship Sponsor Direct white-label software platform designed to address the needs of modern investment firms. With these new features, Sponsor Direct is now the only software offering that combines support for financial advisor accounts with a suite of tools specifically developed to help them engage, communicate with and service their investors. Hines Securities Inc. is the first firm to leverage these new capabilities, relying on Sponsor Direct to provide easy-to-use online real estate capital fundraising functionality to financial advisors.

CrowdStreet’s proven software solutions currently support more than 53,000 investors, managing more than 1,000 offerings and $3.7 billion in invested capital. Since its launch, the CrowdStreet software platform has been used to raise more than $260 million and distribute more than $684 million to investors.

New Yorkers pay the second highest ATM fees in the country (NY Daily News), Rated: A

ATM fees have reached an 11-year record high, and New Yorkers are paying the second highest rates, says Bankrate’s annual Checking Account Survey for 2017.

The national average ATM fee is $4.69, equaling the average ATM surcharge of $2.97 plus the average out-of-network fee your main bank charges of $1.72.

Cities whose fees top over $5 include Pittsburgh ($5.19), New York ($5.14), Washington, D.C. ($5.11), Cleveland ($5.11) and Atlanta ($5.05).

Even the lowest fees still don’t drop below $4 with Milwaukee at $4.19 and Dallas at $4.07.

Overall, ATM withdrawal fees have risen by 55% over the last ten years and there is little to curb this growth.

1031 Crowdfunding Moves Up Rankings to #4 Among Top Real Estate Crowdfunding Sites (PR Newswire), Rated: A

1031 Crowdfunding, LLC announced today that the Company moved up in the rankings for the 2017-2018 Top 100+ Real Estate Crowdfunding Sites to #4 overall and maintained its position as #1 ranked Real Estate Crowdfunding site for 1031 Exchanges.

The Real-Estate Crowdfunding Review conducted in-depth research of over 100 real estate crowdfunding sites to form the reviews and rankings provided in the Top 100+ Real Estate Crowdfunding Sites. Site features most highly-valued included: pre-funding, low investor fees, low investors minimums, bankruptcy protection, velocity, positive investor feedback, co-investment by the company, and venture capital funding in the company.

Top 100+ Real Estate Crowdfunding Sites (The Real Estate Crowdfunding Review), Rated: A

13 sites in the former top 25 have fallen completely out of the rankings due to abandoning their business model or challenges. 5 sites have improved tremendously with substantially increased volume, and a few of these that were lower ranked have leaped up the charts as well.

Tier 1: Best of the Best

These sites have it all: High transparency, co-investment,  pre-funding, high-volume, average to low fees, excellent bankruptcy protection, strong administration and customer service, and strong financial backing.

None. No site has all these features yet, but we hope that will change by the time of our next review.

Tier 2: All-Stars

These sites are all extremely strong in the majority of the fundamentals that are most important to investors.

Tier 4: Up-And-Coming + On-probation

There are 2 types of sites in this category. The 1st are up-and-coming sites that may not be as polished as competitors but have some sort of promise or potential for the future. The 2nd are sites that did well in last year’s rankings, but since then have had substantial investor complaints, decreasing volume or other challenges.

Justice Department gives big banks green light on real-time payments (American Banker), Rated: A

Following an antitrust review that lasted almost a year, the Department of Justice has greenlighted a real-time payments network being developed jointly by the nation’s largest banks.

The government’s approval may boost the prospects of a system that is being built by The Clearing House, the payments firm co-owned by JPMorgan Chase, Citigroup, Bank of America, Wells Fargo and a host of other banks.

Fintech players assess post-disruption environment (Banking Exchange), Rated: A

Has the state of consumer credit changed post-crisis? Lending Club Chief Executive Scott Sanborn said he believes that the “new normal” in consumer lending is riskier.

Wages are stagnant, Sanborn said, and a greater portion of many consumers’ income now goes toward repayment of debt. Credit cards, student loans, and auto loans are among the major drains on the consumer wallet today, he noted.

A common use of marketplace lenders’ credit is debt consolidation loans, undertaken by consumers to bring down their overall borrowing rates.

Lending Club is not alone among nonbank digital lenders in going beyond traditional credit criteria. A co-panelist with Sanborn, Sarah Friar, chief financial officer at Square, said that her company—which recently applied for an industrial bank charter in Utah—doesn’t use FICO ratings at all. Friar said Square—which began as a payments mechanism and has expanded into small business credit—looks at financial accounts, number of employees, and status versus other players, among other factors.

Spending Within Their Means: Some Cities Do It Better Than Others (Business Insider), Rated: A

LendingTree®, the nation’s leading online loan marketplace, has released the findings of its study on how well residents in the top 50 U.S. metropolitan areas are spending within their means – or aren’t.

Among the 50 ranked metro areas, residents are, on average, using 30 percent of their revolving credit lines — such as credit cards and home equity lines of credit, or HELOCs. They also have mortgage balances averaging 79 percent of their annual income and non-housing debt balances averaging 44 percent of annual income, and have had five credit inquiries in the last two years.

Greenville, SC takes the top score, despite having the second-lowest average income among the 50 cities ranked at $65,503 per household.

Source: LendingTree

Rank

Metro

Spending Within Their Means Score

Inquiries (last 2 years)

Revolving Credit Utilization

Non-Housing Debt % of Income

Mortgage Debt % of Income

1

Greenville, SC

71

4.0

27.6%

47.3%

61.6%

2

Greensboro, NC

65

3.8

28.9%

48.5%

63.9%

3

Kansas City, MO

64

5.9

28.4%

42.8%

65.0%

4

Buffalo, NY

64

4.0

29.0%

50.5%

55.2%

5

Charlotte, NC

64

3.8

28.2%

43.2%

84.9%

6

Milwaukee, WI

64

7.1

28.4%

39.7%

65.8%

7

San Francisco, CA

63

3.9

28.9%

28.4%

109.1%

8

Boston, MA

62

4.6

29.0%

35.7%

86.9%

9

New York, NY

62

4.4

30.5%

34.7%

77.6%

10

Raleigh, NC

61

3.8

27.6%

45.2%

85.6%

11

Pittsburgh, PA

60

5.1

28.0%

51.2%

49.3%

12

Nashville, TN

59

4.4

27.8%

43.9%

80.4%

13

Hartford, CT

58

5.5

30.0%

38.1%

76.8%

14

Oklahoma City, OK

58

6.0

28.3%

47.8%

60.7%

15

Portland

56

3.5

30.0%

40.2%

90.8%

16

Grand Rapids, MI

56

6.8

29.4%

43.3%

59.8%

17

Detroit, MI

56

5.9

30.1%

41.0%

65.0%

18

Louisville, KY

56

6.8

28.3%

43.0%

68.4%

19

Washington, DC

55

4.0

30.1%

37.1%

102.8%

20

Richmond, VA

55

4.0

29.8%

41.2%

87.5%

21

Denver, CO

55

3.1

29.2%

39.9%

108.0%

22

St. Louis, MO

53

7.7

29.0%

42.8%

67.0%

23

Philadelphia, PA

53

5.6

28.9%

43.0%

79.4%

24

Minneapolis, MN

53

4.3

30.5%

39.5%

83.6%

25

Birmingham, AL

53

5.6

29.2%

47.3%

62.5%

26

Cincinnati, OH

53

5.7

29.1%

44.9%

68.0%

27

Cleveland, OH

52

6.6

28.9%

49.4%

58.9%

28

Austin, TX

52

4.9

30.0%

42.5%

78.2%

29

Dallas – Fort Worth, TX

52

5.1

29.5%

44.3%

69.9%

30

Indianapolis, IN

51

6.6

28.4%

46.1%

68.3%

31

Atlanta, GA

51

4.3

29.2%

45.0%

81.2%

32

Columbus, OH

49

6.2

30.6%

45.9%

57.4%

33

Salt Lake City, UT

48

4.2

30.2%

39.7%

98.2%

34

Chicago, IL

46

7.2

30.1%

39.5%

80.1%

35

Seattle, WA

46

4.6

30.6%

37.6%

98.7%

36

Memphis, TN

45

5.1

29.7%

51.2%

64.9%

37

New Orleans, LA

43

4.2

30.8%

50.8%

66.9%

38

Miami, FL

43

4.1

29.0%

48.7%

89.5%

39

Harrisburg, PA

42

6.2

29.1%

47.8%

70.1%

40

Sacramento, CA

42

4.4

32.0%

38.5%

103.2%

41

San Diego, CA

41

4.3

32.8%

37.2%

118.2%

42

Los Angeles, CA

39

4.6

32.0%

38.6%

108.3%

43

Houston, TX

39

5.3

31.4%

46.8%

70.3%

44

Tampa, FL

38

4.2

29.9%

51.6%

80.7%

45

Virginia Beach, VA

36

3.8

33.2%

46.8%

95.4%

46

Orlando, FL

31

4.3

30.7%

51.0%

82.1%

47

Jacksonville, FL

25

4.1

32.3%

51.8%

87.9%

48

Phoenix, AZ

25

5.1

30.4%

48.1%

102.7%

49

Las Vegas, NV

20

5.1

31.8%

50.6%

96.6%

50

San Antonio, TX

19

7.3

32.1%

54.7%

72.2%

Goldman Sachs Explores a New World: Trading Bitcoin (WSJ), Rated: B

Goldman Sachs Group Inc. GS 0.40% is weighing a new trading operation dedicated to bitcoin and other digital currencies, the first blue-chip Wall Street firm preparing to deal directly in this burgeoning yet controversial market, according to people familiar with the matter.

Goldman’s effort is in its early stages and may not proceed, the people said.

United Kingdom

RateSetter streamlines secondary market fees (P2P Finance News), Rated: AAA

RATESETTER has announced that it is simplifying the way investors can access their money, with one single “transfer fee” when selling loans on the secondary market.

Lenders are currently charged two fees when selling out existing RateSetter loans, but from 2 November this is being streamlined into a single charge. The fee will be a percentage of the capital being withdrawn, and will be fixed for each market.

P2P Finance News

LendInvest urges government to back SME builders (Mortgage Solutions), Rated: AAA

Property finance platform LendInvest has called on government to do more to support small builders after discussing the subject with a group of influential MPs.

The event follows the publication of a report by LendInvest earlier this year on the challenges faced by property SMEs. These include constrained access to finance and distorted policy around regulation, taxation and access to land.

At the time of the report LendInvest said only 12.5% of new homes built today are constructed by small builders, down from 37.5% before 1990.

A canary in the P2P coal mine? (Financial Times), Rated: A

How are British “peer-to-peer” lenders doing?

Employee lenders are one of the fastest-growing areas of UK fintech (Financial Times), Rated: A

Online lenders that are repaid from people’s salaries have raised more than £175m in recent months, marking out the nascent sector as one of the hottest areas of the UK financial technology market.

Legal & General, the insurer, will on Wednesday announce that it is leading the latest £40m investment in SalaryFinance, which provides loans to employees of 50 groups in the UK and plans to expand in the US.

Founded by three former executives from Google, PA Consulting and Royal Bank of Scotland, SalaryFinance combines with companies to offer their employees loans at lower rates than credit cards or payday lenders.

The company has an unusually low default rate of 0.5 per cent because of the security of deducting repayments directly from a borrower’s salary, and the extra information it gains about its customers by tapping into their employer’s payroll systems.

Fintech awareness is surprisingly low in the UK (Business Insider), Rated: A

Despite the high number of UK consumers who use financial products and the extent of financial services penetration in the country — 91% of people across the UK have a current account, and 67% use contactless payments at least once a month — awareness of fintech services in the UK remains low, according to a 

Source: Business Insider

Luton is still the best place for buy-to-let investors (What Mortgage), Rated: B

According to the latest Buy-to-Let Index from online mortgage lender LendInvest, Luton has managed to hold on to the top spot as the best place for buy-to-let investment.

Luton has seen a 4.51% increase in rental price growth and an average yield of 4.51%.

China

Chinese Lender Qudian Leads 2 IPO Launches Totaling $ 869M (Law360), Rated: AAA

Chinese online lender Qudian Inc. launched an estimated $769 million initial public offering on Tuesday, adding to a growing IPO pipeline along with private equity-backed medical device company OptiNose Inc., which set terms on a projected $100 million offering.

Beijing-based Qudian plans to offer 37.5 million Class A shares priced between $19 and $22, raising $768.8 million if shares price at midrange. Qudian, represented by Simpson Thacher & Bartlett LLP, is directly offering 35.6 million shares in the IPO while various existing shareholders are selling 1.9….

European Union

Robo.cash Founder Sergey Sedov Comments on Recent Milestone (Crowdfund Insider), Rated: AAA

Robo.cash, an automated P2P lending platform that includes a buyback guarantee, recently celebrated its own steady growth during 2017 Q2, noting that its total amount of investments now exceeds €1.8 million. In addition, nearly €400,000 in loans were added in August alone, while the  average invested amount per investor gained 2.2% to the previous month at €3,270 in August. More than 900 investors have joined the platform in the first six months of operation.

The Ultimate List of LendIt Europe 2017 Speakers to Follow on Twitter (LendIt), Rated: B

If you follow them, we guarantee that your news feed will be filled with industry news, trends, thoughts, opinions and more!

Source: LendIt

 

International

International P2P Lending Volumes September 2017 (P2P-Banking), Rated: AAA

This month I added Raize, a marketplace in Portugal.

Source: P2P-banking

GoldMint Partnership Signals Strategic Advancement (NASDAQ), Rated: A

GoldMint, a blockchain-based startup that helps gold owners profit from digital assets backed 100 percent by physical gold, recently announced an innovative collaboration with the mineral production company Eurasia Mining .

Through this agreement, GoldMint is establishing a method for applying blockchain-based technology to the development of resource industry projects.

India

GET YOUR FINANCES RIGHT (Daily Pioneer), Rated: A

Last year, State Bank of India (SBI) announced that the ceiling limit for its foreign educational loans would be raised from Rs 30 lakh to Rs 1.5 crore.

According to statistics, about45 per cent of international students in US alone comprise of Chinese or Indian students.

Here’s a quick look at the financial loan options other than SBI:

  • The Indian Government has installed the portal ‘Vidya Lakshmi’ that allows students to check out various loan options and fund providers. Loans are provided in four slabs — Below Rs 4 lakhs, between Rs 4 lakhs and Rs 7.5 lakhs; and above Rs 7.5 lakhs with differing interest rates for each slab.
  • Credila, an HDFC Ltd. Company, India’s first dedicated educational loan company, offers loan approvals before you secure admission. You can get loans up to Rs 2.5 crores.
  • Prodigy Finance offers competitive loans which does not need a co-signer or collateral. Students can start repaying six months after graduation, and there are no penalties for early repayment. You can also avail of their $10,000 scholarships, which is being given away this year to mark their decade of business.
  • GyanDhan, India’s first educational loans marketplace, offers 100 per cent financing for top B-Schools and engineering schools. They offer loans with collateral starting as low as 9.1 per cent.
  • Avanse Educational Loan covers 100 per cent of study abroad expenses on a floating interest of 12 per cent to 17 per cent.
  • Nationalised banks are offering a comparatively lower rate of interest between 9 per cent to 13 per cent on an average.
Asia

Seasoned Japanese startup puts fintech on the map with $ 500m IPO (Tech in Asia), Rated: AAA

Money Forward, a well-established financial tech startup, has launched its IPO, marking a watershed moment for Japan’s burgeoning fintech scene.

The firm, started in 2012, is now worth US$505 million after listing on the Mothers Index Futures section of the Tokyo Stock Exchange, which is designed for high-growth and emerging stocks.

The IPO raised approximately US$25 million.

MENA

Payday Loan Ranger Is Helping People Cover Gaps In Between Their Paychecks (MENAFN.com), Rated: A

Payday Loan Ranger is a loan service that specializes in providing loans from $50 to $1000.

Payday Loan Ranger’s popularity rises from the fact that it completely simplifies the process and never makes it as hectic and difficult as similar services. Their entire service is reduced down to three simple steps, applying online, searching for the best lenders, and then receiving the cash as early in the first 24 hours.

With over 2,000,000 applications already processed, it has become one of the most popular services used for such transactions and continues to rise in usage as it seems people are truly in need of such a novel service.

Caribbean

Why Bitcoin Will Not Solve the Caribbean’s Financial Inclusion Woes (CircleID), Rated: AAA

The issue of financial exclusion can be summarized into two categories: unbanked and underbanked. Unbanked individuals do not have an account at a regulated financial institution, while underbanked individuals have accounts, but frequently use alternative or unregulated financial services.

Unbanked individuals are faced with a heavy economic burden when conducting even the most basic financial transactions. For example, cashing a cheque can cost the average person with full-time employment as much as USD$20,000 over his/her lifetime. Western Union, as an example, charges as much as USD$42 to send a USD$500 remittance to Barbados. ‘Underground’ alternative financial service providers levy as much as USD$10 on every USD$100 transferred.

Another reason for unbanked individuals is attitudinal and behavioral; they really do not trust banks. This sentiment may not be all that unfounded, as a number of the banks across the Caribbean region have been reducing the teller services that unbanked individuals are familiar with and prefer, forcing more (non-technical) customers to online channels, regularly increasing service fees, and even worse, looking to divest their retail operations in favor of corporate banking and wealth management business units.

To obtain Bitcoin, you must already be “economically included” — both in terms of Internet and financial access.

Predatory businesses are convenient where the unbanked live. Rural areas like Trelawny, Jamaica or Mayaro, Trinidad are home to large swathes of unbanked households. Traditional banks don’t see a viable business cases for locating a branch or satellite office in such districts. This means that check cashing and money changing businesses that charge exorbitant rates are the only real means of conducting transactions. Kenya’s M-PESA succeeded because it leveraged an existing network of agents and vendors.

Globally, mobile banking is overtaking branch-centered activity more and more — for example, in Norway, 91% of the population use online banking channels. The explosion of fintech companies that are ‘unbundling’ traditional banking functions, added to the maturity of the first generation of Internet banking solutions, are hastening this trend. Consequently, the amalgamation of omni-channel banking, fintech platforms, and open APIs are obscuring the lines between traditional and alternative finance.

Moreover, besides remittances, financial inclusion also includes micro-credit, micro-insurance, cooperatives, peer-to-peer lending, rural/agricultural credit, mobile money, mobile vouchers, and a number of other alternative financial services. Financial inclusion is multi-faceted, and Bitcoin has yet to distinguish itself in any of the aforementioned categories.

The Caribbean region has serious online trust issues. In 2016, OAS and IDB published a report titled, ‘Cybersecurity: Are We Ready in Latin America and the Caribbean?’ Researchers conducted assessments of 13 Caribbean nations, including Bahamas, Barbados, Jamaica, and Trinidad & Tobago. The methodological framework covered ‘Culture & Society’, and one of the key findings was the extremely low levels of online trust in the region. Caribbean people do not trust that their online activities aren’t being monitored, they do not trust their service providers, they do not trust social networks, they do not trust their search engine provider, they do not trust companies to keep their personal data safe and secure, and most relevant — they do not trust online and mobile banking platforms.

Authors:

George Popescu
Allen Taylor