Thursday March 21 2019, Weekly News Digest

fintechs and personal loans

News Comments Today’s main news: BlockFi hits $25M in deposits in 2 weeks. Cash-back ETF injects trouble into ETF market. PeerStreet expands product line. Funding Circle fund higher impairments drag returns. Dianrong blames Chinese regime for troubles. Today’s main analysis: New home equity loans do not significantly alter credit scores. Today’s thought-provoking articles: SoFi Money review. Can Citi, JPMorgan beat […]

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

fintechs and personal loans

News Comments

United States

United Kingdom

China/Hong Kong

Other

News Summary

United States

BlockFi Receives $ 25 Million in Crypto Deposits in Just 2 Weeks After Launching Lending Products (CryptoGlobe), Rated: AAA

BlockFi Lending LLC, a New York-based “secured non-bank lender” that provides cryptocurrency-backed loans in USD to digital asset investors, has revealed that its interest-generating deposit accounts have received over $25 million in cryptocurrency.

SoFi Money Review: Online Checking (Nerdwallet), Rated: AAA

SoFi Money is an online checking account by SoFi, a company best known for its student loan refinance loans. SoFi’s account has a top-of-the-line interest rate and no monthly or overdraft fees. There’s no free ATM network, but SoFi reimburses many third-party ATM fees and doesn’t charge its own. SoFi also boasts unique perks: free career counseling and financial planning sessions.

Can Citi and JPM beat FinTech Personal Loans? (PeerIQ Email), Rated: AAA

The personal loan market has grown rapidly since 2010 and the growth has been driven by FinTechs. 

Source: TransUnion, PeerIQ

“My Chase Plan” and “My Chase Loans” – a point-of-sale financing alternative and a personal loan product respectively – that will be offered to its existing credit card customers.

LendingTree Study Finds New Home Equity Loans Do Not Significantly Alter Credit Scores (LendingTree), Rated: AAA

Home prices in the United States have rebounded to new highs since the financial crisis. As a result, American homeowners are sitting on the largest amount of home equity in history — at just over $15 trillion dollars, according to the Federal Reserve.

  • The decline in scores averaged just 13 points. At the high end, scores declined by 24 in San Jose,Calif. The smallest decline was 5 points in San Diego. Borrowers had an average score of 735 to start, so the declines are quite negligible in terms of access to credit and may have marginal impacts on the cost of credit. The highest starting credit score was 752 in San Francisco, while the lowest was 712 in Indianapolis.
  • The decline took an average of 158 days to reach bottom, which is just over five months. St. Louis homeowners saw their credit scores reach their lowest points in an average time of 101 days (3 months), while the longest decline was for homeowners in Dallas at 211 days (7 months). Loans do not appear on credit reports immediately after closing. Typically, the lender starts reporting to the credit bureaus after your first payment, depending on the lender’s reporting cycle. Thus it may take about 60 days after closing or even longer for it show up and start affecting a score.
  • Scores recovered over an average of 163 days. This is also just over five months, so the time to fall and recover are about equal. The quickest time to recover was 102 days, or slightly over 3 months, in Cincinnati. Borrowers in Chicago had the longest recovery time of 243 days, just over 8 months.
  • Scores recover within a year and begin to move higher. The complete cycle to return to the credit score prior to the home equity loan takes 321 days, less than 11 months. The shortest cycle was in St. Louis at 211 days and the longest in Chicago at 443 days, about 15 months.

As Cash-Back ETF Hits Market, Signs of Trouble Start to Mount (Bloomberg), Rated: AAA

Last week, one ETF upstart created a minor splash by doing what was once unthinkable — offering to pay investors to buy into its exchange-traded fund. That comes on the heels of eight fund providers — including JPMorgan Chase, Vanguard and BlackRock to name a few — all slashing fees in one of the industry’s most aggressive rounds of price cuts to date.

The sub-zero fee giveaway by Salt Financial, which previously ran a single $11 million ETF, is widely seen as a marketing gimmick to drum up a little PR, get customers in the door and increase its assets under management. During the first year, investors will receive 50 cents for every $1,000 in a new low-volatility stock ETF — until it grows to $100 million. After a year, a management fee of 0.29 percent, or $2.90 per $1,000, could kick in.

The race to zero, however, is very real. Fidelity Investments jump-started the no-fee push in August by offering index funds for free. In February, SoFi said it would waive charges on two planned ETFs for the first year. Last week, JPMorgan started selling America’s cheapest-ever ETF for the princely sum of 20 cents for every $1,000 invested. And BlackRock unveiled plans Wednesday to cut fees for large clients in one of its S&P 500 indexed mutual funds.

PeerStreet Expands Product Line with Residential for Rent Loans (BusinessWire), Rated: AAA

PeerStreet, a platform for investing in real estate backed loans, today announced the launch of a new loan product for private lenders: Residential for Rent loans. Residential for Rent loans have a 30-year term so borrowers can secure long-term financing for residential rental properties. This launch is in response to key market conditions: as more people struggle to finance buying a home, the rental market has continued to grow.

3 Big Reasons To Fill Out The FAFSA (Even If You Think You Earn Too Much) (Huffington Post), Rated: A

One-quarter of families don’t complete the FAFSA, according to Sallie Mae’s 2018 How America Pays for College survey. Of those that don’t fill it out, 48 percent say it’s because they don’t believe they’ll qualify for financial aid.

But they’re often wrong: An analysis by NerdWallet found that in 2017, students left an estimated $2.3 billion in federal financial aid on the table by not filling out the FAFSA.

According to Elaine Rubin, senior contributor and communications specialist at private student loan marketplace Edvisors, most Americans are eligible for some type of federal aid. In fact, it’s available to anyone with a household income below $250,000 per year, CNBC reported.

Madden lawsuit nears end, but online lenders still seek fix from regulators (American Banker), Rated: A

An 8-year-old class action that wreaked havoc on the online lending industry is finally winding down, but the lobbying push in Washington to undo its impact shows no signs of abating.

Lawyers in the case have filed a proposed settlement that would provide $9.8 million in cash and debt relief to as many as 58,000 consumers, setting up the final chapter in a lawsuit that is likely to be remembered best for the legal precedent it established.

The State of Digital Engagement for Online Lending (LendIt), Rated: A

A recent trend report by Clarity Services, a credit reporting provider, showed that online funded loan volumes grew by almost 500% between 2013 and 2017.

How Far are Most in their Digital Transformation Strategy?

  • 54% of financial institutions have developed a digital strategy, but have not yet implemented it
  • 29% of financial institutions are currently developing a digital transformation strategy
  • Only 14% of financial institutions are in the process of implementing a digital transformation strategy

How Much Will They Be Investing In Digital Transformation in the Next 12-18 Months?:

  • 65% are planning to increase spending by 10%
  • 26% are planning to increase spending by 1-9%
  • 6% have no plans to change spending

What will They be investing in over the next 12-18 Months?

  • Replace or upgrade legacy IT systems — 88%
  • Reduce operational inefficiency — 76%
  • Improve customer experience — 74%

X Financial’s Fourth Quarter Results Take Stock 5% Higher (Capital Watch), Rated: A

The stock of X Financial (NYSE: XYF) jumped more than 5 percent Tuesday morning, to $6.55 per American depositary share, after the peer-to-peer lending marketplace announced improved revenue and profit for the fourth quarter, as well as a dividend for 2018.

The Shenzhen-based company, which connects borrowers and investors on its platform, reported in a statement Monday evening that its revenue grew 18 percent year-over-year to $125.5 million during the three months through December.

Its net income, X Financial said, was $35.2 million, or 22 cents per share, at a 53 percent increase from the same period of 2017.

Why Corporates Cant Fund Early Pay Programs (Dynamic Discounting + SCF) (Spend Matters), Rated: A

If you look at the graph below, 5% of S&P 500 companies hold more than half the overall cash; the other 95% of corporations have cash-to-debt levels that are the lowest in data going back to 2004, according to Wells Fargo research. We know who those 5% are — they are the GAFA companies: Google, Amazon, Facebook and Apple.

Source:

ZestFinance Using AI To Bring Fairness To Mortgage Lending (Forbes), Rated: A

Discrimination in lending has long been a problem, shutting minority groups out of the home buying process.

ZestFinance, the artificial intelligence software company focused on the credit market is trying to change that with ZAML Fair, a new software tool that aims to reduce the instances of biases and discrimination in lending.

CoreLogic Launches PanoramIQ to Provide More Accurate and Complete Property Insights (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, today announced PanoramIQ, an intelligent property solution that delivers a more complete view of property data with more current and reliable sources than public-record data alone. Utilizing a combination of public and proprietary property datasets, a unique property ID, machine learning and advanced analytics, PanoramIQ provides lenders, mortgage industry professionals and government entities with deeper, more accurate and complete property insights, allowing clients to make better decisions in a timely and efficient manner.

White Oak Healthcare Finance Launches Real Estate Investment Vehicle with New Hires (ABL Advisor), Rated: A

White Oak Healthcare Finance, LLC announced it will broaden its product offering and enter the healthcare real estate investment market.  White Oak hired Jeff Erhardt, Paul Nevala, Mike Treiber and John Brussard to build out the vehicle, which will initially invest up to $500MM and will focus on investments in seniors housing and skilled nursing properties using triple net leases and joint-venture RIDEA structures.

Banks seek Congress’ help to block fintech path to ‘industrial’ charters  (Roll Call), Rated: A

A bank industry group is lobbying Congress to block financial technology firms, such as online lender Social Finance Inc. and payment processor Square Inc., from obtaining an obscure form of a state bank charter that would let them operate nationally with little federal supervision.

The Independent Community Bankers of America last week distributed a policy paper around Washington calling for an immediate moratorium on providing federal deposit insurance to industrial loan companies, or ILCs, which are chartered by only a few states — most notably Utah.

Form S-3 Senmiao Technology Ltd (Street Insider), Rated: A

Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.

Debt Securities. We may offer debt securities, which may be secured or unsecured, senior, senior subordinated or subordinated, may be guaranteed by our subsidiaries, and may be convertible into shares of our common stock. We may issue debt securities separately or together with, upon conversion of or in exchange for other securities. It is likely that any debt securities issued will not be issued under an indenture.

Figure Technologies, Inc. Expands Leadership Team as It Builds Out Financial Empowerment and Wealth Offerings (PR Newswire), Rated: B

Figure Technologies, Inc., a fintech company in both the home equity and blockchain space, announces that John Sweeney has joined the company as the head of Wealth and Asset Management, along with Dr. Michael Dooley, who joined as chief economist. These hires reflect Figure’s commitment to empowering consumers and building out products to improve their financial well-being.

LendPro Hires Belinda Kelton as Vice President of Sales (LendPro Email), Rated: B

LendPro LLC, a provider of Lending-as-a-Service (LaaS) products and platforms for retailers, has hired retail industry veteran Belinda Kelton as its Vice President of Sales, the company announced today. Kelton is the latest of many new hires for the fast-growing fintech company, which recently moved to a new location to accommodate new staff members and provide the best service possible to customers.

Corporate Counsel, Commercial (Go In House), Rated: B

Affirm is looking for a business-minded Corporate Counsel, Commercial with broad expertise in complex commercial transactions. This role will report to Affirm’s Associate General Counsel.
United Kingdom

Funding Circle fund sees higher impairments continue to drag returns (AltFi), Rated: AAA

The Funding Circle SME Income fund saw just a marginally positive performance in February with Net Asset Value growth of just 0.05 per cent as impairments continued to hurt performance.

Impairments reduced NAV returns by 0.7 per cent in February, said analysts at Liberum, in line with the average monthly impairment rate of recent months.

Revolut Is Testing the Limits of Finance (Bloomberg), Rated: AAA

Storonsky is getting a taste of the scrutiny that lies ahead as he tries to upend the world of banking with Revolut, his 3-1/2 year-old startup. The U.K.’s financial regulator is examining why the digital bank last summer temporarily turned off a system designed to automatically block suspicious transactions.

It was valued at $1.7 billion at its last fundraising and now has over 4 million customers after new accounts tripled in 2018. That’s about three times more than the two lenders combined and the same number of customers as foreign-exchange business TransferWise, which is four years older.

Source: Innovate Finance

CrowdProperty launches equity sale after increasing loan book by £100m (PlaceTech), Rated: AAA

The specialist peer-to-peer lender has secured £100m of loan capital as it launches a public crowdfunding campaign, already oversubscribed, that values the business at more than £15m.

Having raised £100m from an unnamed “major institution”, CrowdProperty will use the funds to expand the number of property projects it backs over the next 12-24 months.

OakNorth reports £33.9m profit for 2018 and commits to donating 1% of all future net profit to charitable causes and social entrepreneurship (OakNorth Email), Rated: A

IFISA Guide: SME loans (P2P Finance News), Rated: A

Ablrate’s IFISA offers returns ranging between 10 and 15 per cent, enabling investors to fund asset-backed loans to UK businesses.

ArchOver’s IFISA enables investors to fund secured business loans and enjoy tax-free returns of up to 10 per cent per year.

MoneyThing’s IFISA is one of the highest-paying tax wrappers that invests in secured business loans, offering annual returns of up to  13 per cent.

Assetz Capital

Returns vary depending on the account, going from 4.1 per cent to 6.25 per cent on its auto-invest products, and up to 15.5 per cent with its manual lending option.

Funding Circle

The minimum investment in this flexible IFISA is £1,000.

LendingCrowd

The Growth and Income ISAs automatically spread investors’ money across a range of loans and have variable target rates of six per cent and 5.6 per cent, respectively.

Specialist lender funding will be the key issue for 2019 – LendInvest (Mortgage Solutions), Rated: A

The situation is a big reminder to lenders that it is crucial to concentrate on building a diverse range of funding sources, rather than just one single route.

It’s something that we have put a lot of work into at LendInvest, as it allows us to lend with confidence, knowing that the funds we have promised to a borrower will be there.

The firm sent out an email on 24 January 2019 suggesting that recipients should have a “stockpile ready” as some believe Brexit “could affect the amount of food available,” while offering a £5 promotional discount on a loan.

Why investors are fleeing the ‘fear and greed’ of stock markets for peer-to-peer loans (The Telegraph), Rated: A

Investors are ditching the stock market in favour of bundled loans sold by fledgling platforms that are yet to be tested by a financial crisis.

The top 20 UK places for high net worth earners (Citywire), Rated: B

Nearly two fifths of the UK’s top earners now live in London, according to research from peer to peer lending platform easyMoney.

China/Hong Kong

China’s Online Lender Dianrong Blames Chinese Regime for its Woes (NTD), Rated: AAA

Dianrong, one of China’s biggest peer-to-peer (P2P) lenders, is laying off staff and shutting stores. The company blamed the Chinese regime for its troubles and said the absence of clear-cut policies was proving to be a heavy burden.

Dianrong shut down 60 of its 90 offline stores and laid off an estimated 2,000 employees, Reuters reported in early March.

Pintec’s Stock Rises on Steady Results During Quarter of IPO (Capital Watch), Rated: A

Pintec Technology Holdings Ltd. (Nasdaq: PT) gained 15 cents in trading by midday after reporting a slight increase in revenue and narrowed losses for the fourth quarter.

The Beijing-based tech platform facilitating financial services said on Wednesday that its revenue in the three months through December was $32.9 million, 2 percent higher year-over-year. Its net loss was $1.2 million, a 10 percent decrease from the same period of 2017. Loss per share was 1 cent.

For the full year, Pintec reported revenue of $153.1 million, 85 percent higher from the preceding 12 months, and profit of $1.1 million in contrast to a loss in 2017.

KKR Raising First Asia Real Estate Fund, Targeting $ 1.5 Billion (U.S. News), Rated: A

Global investment powerhouse KKR & Co Inc is raising its first Asia-focused real estate fund, targeting $1.5 billion as it looks to deepen its real estate portfolio in the region, said people with knowledge of the matter.

Investment firms raised $18.6 billion in 26 Asia-focused real estate funds last year, the highest since 2008, according to data provider Preqin. KKR’s U.S.-based rival Blackstone Group raised the region’s biggest real estate fund last year at $7.1 billion.

China and distressed debt top DB’s hedge funds tastes test (City Wire Selector), Rated: A

Alternative investors are increasingly drawn to Asian hedge funds and distressed strategies, according to the latest Alternative Investment Survey from Deutsche Bank.

The 2019 survey canvassed the views of 425 asset allocators running $1.7 trillion of hedge fund assets in 28 countries.

European Union

Finnest and Invesdor Merge to Combine Debt and Equity Operations in Europe (Crowdfund Insider), Rated: AAA

Finnest, an Austria based Fintech that provides debt capital to small and medium-sized firms, has announced a planned merger with Finland based Invesdor Oy. The newly formed company will see the combination of a leading Nordic equity crowdfunding platform and a top online lender serving the DACH region (Deutschland, Austria, Switzerland). The two companies will now be able to offer a full stack of debt and equity services and investments across Northern Europe as well as more numerous options for investors.

Invesdor claims over 50,000 registered users as well as a MiFID II license for 28 European countries – the first crowdfunding platform to receive approval. Invesdor reports investors, both institutional and individual, from over 150 different countries. Invesdor currently offers a unique financing portfolio in the market, from equity to loans and bonds to IPOs.

Bitbond to Work with BitGo for Germany’s First Security Token Offering (Bitbond), Rated: A

Bitbond has launched Germany’s first Security Token Offering with a BaFin approved Prospectus and will be using  BitGo’s Business Wallet. The STO has a hard cap of EUR 100 million (~USD 113 million) and will conclude in May. Thousands of investors have already joined to take advantage of early bird discounts.

The STO marks a significant milestone for the crypto asset industry, not only because it has an approved prospectus, but also because it offers tokenized debt with a predetermined maturity. Bitbond Token (BB1) holders will receive quarterly and annual payments for 10 years, after which Bitbond will buy back the token at its original value of EUR 1 per token.

India

Top 5 sectors that need upskilling: How to stay relevant in age of disruption? (Indian Express), Rated: A

The banking sector is witnessing a massive growth owing to the launch of connected products and services, business innovation and the rise of the middle class along with the emergence of new fintech areas of mobile payments, digital wallets and P2P lending. Technologies such as chatbots, blockchains and automation through robotics powered by AI are transforming the sector.

CRYPTO EXCHANGE COINDCX RAISES SEED FUNDING FROM BAIN CAPITAL VENTURES (Coin News Span), Rated: B

Bengaluru-based client leasing startup RentoMojo has raised $10 Mn serial B funding from Bain Capital Ventures and Renaud Laplanche.

Asia

Look out for 2019’s top 7 lending startups (e27), Rated: AAA

As of 2019, there are still 2.45 billion underbanked and unbanked people in the world. The more innovative lending companies there are, the faster this market will be covered and served.

October.eu (formerly Lendix) is an innovative, easy-to-use, and intuitive peer-to-peer platform for lending and investing.

The Dharma team works on a platform that lets businesses build lending products on the Ethereum blockchain.

The governing idea of Kabbage is that funding shouldn’t be complicated for businesses. So, the company makes an effort to provide entrepreneurs with up to US$250,000 in loans for which you can allegedly qualify for in just 10 minutes or at most, a day.

Founded in 2014, TurnKey Lender has already become the market’s leading intelligent all-in-one lending automation platform.

The name SoFi comes from social finance and it’s another great example of a successful peer-to-peer lending operation. Founded in 2011, the company is already a huge market player with US$30 billion worth of funded loans and 600 thousand members.

Affirm goes a different route than most alternative lenders. The idea behind it is enabling in-house financing for retail businesses. So, the store’s customers get an instant loan with zero to 30 per cent interest rates.

With quite a unique approach, Lendio offers small business an opportunity to get services and credit products from lenders with the best conditions. It’s a marketplace with more than 75 lenders on board.

Vietnam is the region’s fintech hub (The ASEAN Post), Rated: AAA

Vietnam’s strong economic growth in recent years has led to the flourishing of the nation’s digital economy. The country’s economy in 2017 was deemed to be one of the best performing in the region. Its economy saw a 6.8 percent increase in gross domestic product (GDP) – higher than the government’s initial target of 6.7 percent – making it one of the fastest growing economies in Southeast Asia.

Vietnam currently has 54 percent of its population on the internet and the number is expected to grow further in the coming years.

Data from Vietnam Briefing shows that 39,580 start-ups entered the Vietnamese market in just the first four months of 2017, a 14 percent increase from the first quarter of 2016. Within the start-up scene, the fintech sector has become the most attractive for investments, receiving US$129 million in 2016.

Travelstop Targets Fintech SMEs with Business Travel Management Platform (Fintech News), Rated: A

Co-founded by former Expedia employees, Singapore-based Travelstop is a modern, artificial intelligence (AI) powered SaaS platform that simplifies business travel, automates expense reporting for businesses in Asia, and offers insights to business owners.

The platform is quickly gaining traction from the region’s startups and fintech community, helping small and medium-sized enterprises (SMEs) and high-growth organizations including Funding Societies, Fintech News Network, RedDoorz, S P Jain School of Global Management and Dot Property better to manage their business travels.

Asia has the largest share of mobile internet traffic, with 61% of its population using mobile devices to go online.

How Ovo Has Grown to be Indonesia’s Largest Digital Payments Platform (Entrepreneur), Rated: A

After online stores, Indonesia’s leading digital payments platform Ovo has been making strides into offline stores, increasing the number of merchants that accept the payment method.

OVO has reportedly acquired local peer-to-peer lending company Taralite, a move that will pave the way for OVO to branch out into the lending business which is seen to be a potential profit-generator for the company.

TurnKey Lender Opens a New Office in Kuala Lumpur (Digital Journal), Rated: A

TurnKey Lender, a provider of intelligent lending automation, decision management, and risk mitigation solutions, announces the opening of a new office in the capital of Malaysia, Kuala Lumpur. Its main goal will be to physically represent TurnKey Lender and support the company’s operations in Asia.

With internet penetration at 85.7% in 2018, the country is perfectly positioned for the rapid growth of alternative lending initiatives in areas like peer-to-peer lending and in-house financing.

Golden Gate Ventures ties up with Hanwha to invest in Asian startups (SDF-KH), Rated: B

Golden Gate and Hanwha will focus on startups that are raising fund for ‘Series B’ stage.

Singapore-based Golden Gate Ventures confirmed on Tuesday that it has teamed up with South Korea-based Hanwha Asset Management to invest in Southeast Asian technology startups.

Authors:

George Popescu
Allen Taylor

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

Wednesday February 21 2018, Daily News Digest

LendingClub originations by funding source

News Comments Today’s main news: Lending Club losses extend to Q4 2017. LendingClub to settle lawsuit for $125M. Groundfloor launches online public offering. Even Financial gets backing from American Express. LendInvest launches buy-to-let calculator online. Today’s main analysis: Lend Academy reviews LendingClub’s Q4 2017 results. Today’s thought-provoking articles: Equity sharing and home ownership. How millennials move emerging markets. Why Australia needs […]

LendingClub originations by funding source

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Lending Club extends losses for fourth straight year (Financial Times), Rated: AAA

Lending Club lost money for a fourth year in a row last year, as it wrote a big cheque to settle class-action lawsuits connected to its governance glitches of 2016.

The San Francisco-based company, the biggest listed online lender in America, said on Tuesday that net losses for the fourth quarter almost tripled from a year earlier, to $92m, as it agreed a $125m settlement to resolve civil suits stemming from the loan-mis-selling scandal that blew up almost two years ago. About $48m of the sum would be covered by insurance, the company said, with the remainder to be paid from liquid assets of about $650m.

The loss for the full year came to $154m, wider than the previous year’s $146m.

LendingClub agrees to settle shareholder litigation for 5M (American Banker), Rated: AAA

Under the agreement, which was announced Tuesday, the San Francisco-based online lender expects to pay $77.25 million. An additional $47.75 million is expected to be covered by LendingClub’s insurance, bringing the total payout to $125 million. The deal is subject to court approval.

LendingClub Corp (LC) Shares Sink on Q4 Earnings Miss (InvestorPlace), Rated: A

Lending Club also underwhelmed in its revenue as the company raked in $156.5 million during its fourth quarter, below Wall Street’s consensus estimate of $157.6 million, according to FactSet. The figure did increase 20% compared to the year-ago quarter.

On an adjusted basis, the company posted earnings of a penny per share, compared to a loss of 2 cents in the year-ago quarter.

The company also experienced a 23% annual growth in originations, which reached over $2.4 billion.

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

LendingClub delivered another record quarter of $156.5 million in revenue up slightly from their previous quarter. Originations were slightly down from the third quarter at $2.436 billion. They reported a GAAP net loss of $92.1 million in the fourth quarter which was affected by the class action litigation settlement expense.

Source: Lend Academy
Source: Lend Academy

LendingClub provided the below guidance for Q1 2018 and reaffirmed their guidance for 2018:

First Quarter 2018

  • Total Net Revenue in the range of $145 million to $155 million
  • Net Income (Loss) in the range of $(25) million to $(20) million
  • Adjusted EBITDA in the range of $5 million to $10 million
  • Reconciling Items between net loss and non-GAAP adjusted EBITDA consisting of stock-based compensation of approximately $19 million, and depreciation and amortization and other net adjustments of approximately $11 million

Full Year 2018

  • Total Net Revenue in the range of $680 million to $705 million
  • Net Income (Loss) in the range of $(53) million to $(38) million
  • Adjusted EBITDA in the range of $75 million to $90 million
  • Reconciling Items between net loss and non-GAAP adjusted EBITDA consisting of stock-based compensation of approximately $77 million, and depreciation and amortization and other net adjustments of approximately $51 million

Stocks making the biggest moves after hours (CNBC), Rated: B

LendingClub stock plunged 10 percent after the bell. The peer-to-peer lending company reported earnings and revenues that missed Wall Street estimates.

Groundfloor Launches Online Public Offering Amidst Increased Stock Market Volatility (PR Newswire), Rated: AAA

Groundfloor, the first issuer qualified by the U.S. Securities & Exchange Commission to offer real estate based payment dependent notes that are available to non-accredited investors, today announced that it has raised a total of $4.3 million from 687 participating investors in a combination of two recent financings, a private online bridge note closed late last year and an initial closing of its online public offering of equity. In each case, the company kicked off the invitation-only raises to customers and friends of the company with a $1M target, surpassing that in under 48 hours. Due to increased growth opportunities and strong demand, the company has today expanded the equity raise to the public.

Groundfloor is offering a total of up to 530,000 shares of Common Stock at $10 per share in its online public offering. Investor benefits include: no investor fees for life2; access to regular shareholder-only loan offerings; and invitations to attend annual Groundfloor shareholder events.

Recently increased expectations that the Fed may raise interest rates in the future has investors rebalancing their portfolios, with a shift out of equity into debt, as bond yields are expected to increase. Twelve-month bond yields have recently inched up to 1.97 percent.

By comparison, Groundfloor investors have earned an average of 13.6 percent per year over the past three years, which represents over 6x the yield of a current one year Treasury note, and over 1,000 percent more than they would have made if their money had been in a CD or savings account over this period.1 Groundfloor’s retail investors create their own portfolios of real estate debt investments in the fix and flip residential housing market, and the loans on which the investments are based are secured by a first lien position against the underlying real asset.

Real Estate Equity Crowdfunding: A New Investment Opportunity for the Investors (EIN News), Rated: A

Talking in context of real estate, there are 3 ways to invest in a crowdfunded real-estate property:

• Equity crowdfunding
• Syndicated debt crowdfunding
• Platform-issued (‘pre-filled’) debt crowdfunding

Following are the pros and cons of going for equity crowdfunding in real estate:

Pros

• High yield potential
• Lower barrier to entry: Even if you have a very less amount of money, you can still invest even in large commercial real estate projects through equity crowdfunding and enjoy the benefits of the real estate i.e., strong returns and lower volatility.
• No self-employment taxes
• Higher returns

Cons

• The risks. An investor should know how to evaluate the risk factors like local economy volatility and chances of higher than expected construction costs. Due diligence is what is required.
• Liquidity constraint: These investments need to be held up for a period of five years or so, and hence one should go for this option if this much bandwidth is available, lack of liquidity is not there, and an investor is comfortable with the invested amount to be tied up for several years.
• It’s still an early option: It is still an early option to be considered as the performance track record and validation is still not complete and individual investors are still trying to figure it out.
• Lack of control: Since it is a passive investment, the investors are not involved in the day to day activities and therefore have limited ability and control over the operations required.

RealyInvest App Empowers Beginners to Invest in Commercial Real Estate (PR Newswire), Rated: A

In a rising tide of fintech apps, RealyInvest is emerging as a new way for beginning investors to access the high-priced world of premier commercial real estate right from their smartphones.

RealyInvestors can purchase fractional shares of REITs (Real Estate Investment Trusts) for as little as $5. Investors can also own shares of commercial real estate NNN Assets, such as a building long-term leased to Starbucks, for as little as $20.

All investments, rental income and dividend earnings can be managed right on your smartphone. Fees range from $1 to $3 per month, depending on investment options.

Silicon Valley Explores a New Investment: Your Home (WSJ), Rated: AAA

A handful of companies, including those backed by marquee Silicon Valley names such as Andreessen Horowitz and Mark Zuckerberg’s philanthropic organization, are experimenting with a product that essentially lets them take an ownership position in a house along with the homeowner. The agreements, called shared-equity contracts, provide a new way for investors to get exposure to rising home prices across the U.S.

Shared-equity products are aimed at new buyers who need help with a down payment, or current homeowners looking for an alternative to a cash-out mortgage refinancing or a home-equity loan. The first use has caught the attention of mortgage-finance giant Freddie Mac ,which recently agreed to buy loans on properties where one firm,Unison Agreement Corp. , contributes to the down payment.

Landed Inc. offers these down-payment contracts to teachers and other educators. Last year, the Chan Zuckerberg Initiative , a philanthropy co-founded by Facebook Inc.’s chief executive, gave Landed $5 million to start a new fund.

The length of the contracts can vary from a few years to 30. Homeowners can repay early, including if they sell their house before the term ends. How much they end up owing depends on how the value of their home changes. Because the funds are equity, not a borrowing, they don’t require monthly payments.

Even Financial inks $ 3 mln (PE Hub Network), Rated: AAA

Even Financial, the technology platform powering financial services online, has secured a strategic investment round totaling $3 million. The round includes an investment from American Express Ventures, the strategic investment unit of American Express, as well as Plug & Play and Arab Angels.

With this investment, Even Financial will expand its team and advance its proprietary technology, which allows financial institutions and other partners to scale customer acquisition and remain competitive in the growing online financial services industry.

Fundrise Reports 2017 Performance. Total Return for the Year Stands at 11.44% (Crowdfund Insider), Rated: A

In brief, this is what Fundrise reported;

“In 2017, Fundrise investments earned an 11.44%* total return on investment, including over $16 million in dividends paid out to investors. Delivering attractive, consistent cash flow is a core part of our mission to offer you a better way to invest.”

Online SMB lending platform Yalber closes $ 20M senior credit facility (Bankless Times), Rated: A

SMB lending platform Yalber closed a $20 million senior credit facility this week, the company announced today.

Blinker Joins With Ally To Enhance The Auto Industry’s Only Peer-To-Peer E-Commerce Platform (PR Newswire), Rated: A

South by Southwest Interactive Innovation Award winner and 2018 LendIt Fintech Industry Award finalist Blinker, the only peer-to-peer e-commerce platform that provides an end-to-end solution for anyone buying, selling or financing cars, announced two major milestones for its business today:

  • Blinker is now available in the largest car markets in the US – Beginning today, Blinker is expanding its proprietary e-commerce and loan origination platform from Texas and Colorado to California and Florida, allowing millions of customers to buy, sell and finance vehicles easier, quicker and safer with other people. Thirty percent of vehicle sales across the US every year are between people, yet private-party marketplaces including Craigslist, Letgo, Autotrader, Cars.com and Facebook Marketplace don’t have services such as integrated financing or lien payoff support. Leveraging artificial intelligence and machine learning, Blinker customers get guidance and tools to complete the entire purchase process themselves, from instant vehicle valuation to real-time auto loan approval to e-signing documents to secure funds transfer, all for free within Blinker’s mobile app.
  • Blinker joins with Ally to offer best-in-class auto protection products – Blinker will now give customers the option to add Ally’s vehicle protection coverage, including Ally Guaranteed Asset Protection (GAP) and Ally Premier Protection vehicle service contracts, for their vehicle purchases in the app. GAP covers the difference between the cash value of a vehicle and what Blinker customers still owe on their loan if the vehicle is totaled or stolen. Ally vehicle service contracts cover the repair cost for over 7,400 mechanical, electrical, safety or digital components, as well as some related expenses like trip interruption, rental car coverage, towing and 24/7 roadside assistance.

Zelle users are finding out the hard way there’s no fraud protection (TechCrunch), Rated: A

Scammers have taken to Zelle, the Venmo alternative backed by U.S. banks, to defraud consumers who believe the service includes the same protections they’ve come to expect from PayPal. A number of customers report having lost hundreds, or even thousands of dollars, over Zelle, when they used it for transactions with people they didn’t know – like tickets bought off a Craigslist posting, for example.

Cyberattacks took $ 56B from U.S. economy in ’16 (American Banker), Rated: A

Malicious cyber activity cost the U.S. economy between $57 billion and $109 billion in 2016, the White House said Friday.

The estimate comes in a Council of Economic Advisers report on the impact of cyberattacks on U.S. government and industry. The report details the range of threats that U.S. entities face from actors including corporations and countries such as Russia, China, Iran and North Korea.

The council’s estimate represents between 0.31% and 0.58% of the 2016 U.S. gross domestic product. For comparison, the report cites a Center for Strategic and International Studies report that estimated the cost of malicious cyber activities against U.S. entities at $107 billion in 2013, 0.64% of GDP that year.

BlockFi Raises 1.55M in Seed Funding (Finsmes), Rated: A

BlockFi, a New York-based fintech company whose first product is a loan for cryptoasset owners, raised $1.55m in seed funding.

Backers included ConsenSys Ventures, Kenetic Capital, PJC, SoFi, Purple Arch Ventures and Lumenary.

The 2018 World’s Most Innovative Companies (Fast Company), Rated: A

03 Square

For extending the benefits of banking

19 Social Capital

For putting values into its ventures

26 Kakao Bank

For marrying social messaging with banking

31 Paytm

For pioneering the cashless economy

42 Stripe

For writing the new startup manual

47 CommonBond

For offering payback

‘Pinterest will get even bigger for us’ says fintech lender Elevate Credit (The Drum), Rated: A

Speaking to The Drum in the final instalment of a four-part video series with Falcon.io exploring social media strategies, she admitted that while it can be a challenge, using data to understand her audience’s wants and needs has helped her shape content which is likely to resonate.

Fox says she has been finding success on the unlikeliest of social media platforms – Pinterest.

“All our content is more lifestyle focused than finance focused,” she explained.

OpenClose Bolsters Software Integration and Support Teams (Send2Press), Rated: B

OpenClose, an industry-leading multi-channel loan origination system (LOS) and mortgage fintech provider, announced that it has added staff to its integration and customer support departments. The new hires will help enhance OpenClose’s existing software products, facilitate digital mortgage processes, produce fintech-level innovation and provide excellence in customer support. The company also recently added three senior software engineers to its development team.

3 Loans for Students You Should Avoid Like the Plague (Student Loan Hero), Rated: B

1. Payday loans

You usually have only a couple of weeks to repay the loan, and the typical APR is almost 400.00%, according to the Consumer Financial Protection Bureau. If you can’t pay it back and have to take out a new payday loan to pay off the first, you could end up stuck in a vicious cycle of predatory debt.

What you should try instead: payday alternative loan (PAL).

2. Auto title loans

The reality is these short-term loans also have three-digit APRs, and you typically have between 15 and 30 days to repay the loan.

What you should try instead: A short-term campus loan.

$20 / $2,000 = 1%
1% x 365 days = 3.65
3.65 / 60 = 6.08% APR

3. Cash advances

This type of loan isn’t as costly as a payday loan or an auto title loan, but it’s not ideal for two reasons:

  1. Credit cards charge a fee, typically 5% of the advance amount. So, if you withdraw $500, you’ll have to pay $25 upfront.
  2. There’s no grace period with cash advances, so interest starts accruing immediately.

What you should try instead: A 0% APR promotion. Some credit cards offer a 0% APR promotion on new purchases for a period.

United Kingdom

Funding Circle to launch two new mobile apps this year (P2P Finance News), Rated: AAA

The business lender, which currently only has an iPhone app for investors to access, monitor and manage their accounts, is now advertising for a global mobile apps product manager and for an Android developer.

Both positions are based in the UK.

“We have an ambitious roadmap for this year and want to launch two new apps (Android and iOS) for our investors,” the job advert on the Funding Circle website said.

LendInvest Announces Launch of Buy-to-Let Online Calculator for Intermediaries (Crowdfund Insider), Rated: AAA

On Tuesday, LendInvest announced the launch of its new buy-to-let (BTL) online calculator for intermediaries.

 

P2P business lending up 51% (Bridging&Commercial), Rated: A

The value of P2P business lending grew by 51% during 2017, according to new research from the British Business Bank (BBB).

The report also found that the value of SME asset finance deals was up 12%.

Although net bank lending volumes remained positive (£700m in 2017), it was weaker than in both 2016 (£3bn) and 2015 (£2bn).

The BBB found that there had been a significant increase in both the value and number of SME equity deals, up 79% and 12% respectively.

Online lenders and banks may operate as ‘joint ventures’ (P2P Finance News), Rated: A

ONLINE lending platforms may partner with banks to fund and market credit products in the future, even sharing the approval process and compliance, in one scenario outlined by global banking regulators.

A number of peer-to-peer lenders have already partnered with banks on a smaller scale. For example, Metro Bank has lent through Zopa’s platform and Santander has referred borrowers to Funding Circle. However, these tie-ups have not gone as far as the report’s scenario suggests in terms of becoming a joint venture.

Crowdfund sites ‘are not explaining the dangers’ (The Times), Rated: A

Square Pie, which started life as a stall in London’s Old Spitalfields Market, expanded with the help of a “pie bond” that promised 8% annual interest over four years. The bond was offered through one of Britain’s biggest crowdfunding platforms, Crowdcube.

A total of 324 investors signed up, lending more than £650,000 to fund Square Pie restaurants and its efforts to improve supermarket sales. Square Pie has gone into administration — the first failure of a business that issued a mini bond on a crowdfunding site.…

Crypto lending platform nears launch (AltFi), Rated: A

Lendingblock is one such business. The soon-to-launch platform is, in its founder Steve Swain’s words, “an open exchange for cryptocurrency loans”.

Lendingblock is in the middle of a three-stage Initial Coin Offering that will conclude in March. The first phase has already been completed, raising the equivalent of $500,000. The offering has a hard cap of $10m.

Number of farming building conversions falls 20 percent in a year (FarmingUK), Rated: B

The number of conversions of farm buildings into new homes dropped 20% in the last year, denting hopes that these conversions could help solve the rural housing crisis.

According to Lendy, one of Europe’s largest peer-to-peer lending platforms, only 1,511 agricultural-to-residential conversion applications were approved in 2016/17.

China

The New Year to Bring a New Flood of IPOs (CapitalWatch), Rated: A

Golden Bull Ltd., an online peer-to-peer lending platform in China, plans to offer up to $9 million in shares on Nasdaq under the ticker symbol “DNJR.” The Shanghai-based company, which was founded in 2015, provides borrowers access to short-term loans.
European Union

Finnest Expands Online Financing to Larger Corporations, Adds Institutional Investors (Crowdfund Insider), Rated: AAA

Finnest is an interesting online lender operating in the DACH countries. The peer to peer platform was launched to provide SME funding supported by individual investors but the company is now expanding by providing loans of €10 million and higher. Institutional investors such as insurance companies, funds, family offices and banks will now be able to invest in large SMEs on “FinnestPro.”

Why it’s OK that the majority of consumers don’t know about Open Banking – for now (AltFi), Rated: A

The new EU legislation on payment services – PSD2 – and the introduction of Open Banking in the UK seem to have passed the vast majority of people in the country by, according to an AltFi News article last month.

This referred to a report by Which saying that 92 per cent of consumers hadn’t even heard of Open Banking.

International

How Millennials are Moving Emerging Markets (Morningstar), Rated: AAA

Millennials in advanced economies have come under pressure in recent years, thanks to stagnating wages, rising house prices and escalating student debt. But an altogether different trend is taking place in many emerging markets where millennials are seeing their prospects rapidly improve. This in turn is creating an investment opportunity, as millennials in these countries are becoming hugely influential on the prospects for emerging market equities.

Millennials will account for half of the global workforce by 2020, meaning they will be one of the most influential groups in shaping the economy and society, including consumption habits, policy and how companies may want to market and brand themselves. They are disrupting traditional industries and companies are having to adapt. This presents investment opportunities, but it also presents new investment risks.

Latest ICO Updates on VLR Token – Valorem Foundation ICO is LIVE! (TechBullion), Rated: A

Based on ERC-20, the multilayered cryptocurrency platform will host a marketplace that allows developmental phases. The first phase focuses on micro loans (small loans), rent payments, student loans and peer-to-peer payment processing.

As trust grows on the platform, phase 2 will be implemented to cater to sales distribution, global small business investing and global commercial and residential real estate crowdfunding while the third stage will serve charity and insurance. The final phase will be dedicated to maintenance and future developments that may include additional currency adoption, feature adding etc.

Valorem (VLR) is the token offered. The exchange rate stands at 1 ETH= 1000 VLR. There is a total supply of 200 million tokens of which 150 million are available during the ICO and 50 million will be kept in reserve. Valorem will not be mined.

Wealth managers must go digital (Raconteur), Rated: B

People born between roughly 1982 and 2002 are set to receive the biggest inheritance boom of any post-war generation. The Royal Bank of Canada (RBC) estimated the figure will be around $4 trillion in the UK, Canada and United States.

An Interview with Kirill Suslov – The CEO at Finom and TabTrader Founder (NewsBTC), Rated: B

NewsBTC: Now it seems that you have no experience with banking services yet. How do you plan to cover this area?

Now I can say we understand confidently how banking works and how it should work in the crypto industry. By 2020, we’re going to have a licensed bank and transform it into a crypto one with a network of crypto terminals.

A bit sooner, in 2018, we plan to release crypto e-wallets with linked debit cards. Miners will be able to use recently mined coins right away, transferring them to their wallets immediately. We’re also designing a platform for peer-to-peer lending.

Australia

Peer To Peer Lending Increasingly Popular In Australia (compare dinkum), Rated: AAA

Australian investors and borrowers are increasingly adopting peer to peer lending platforms according to the results of survey undertaken by ASIC. The results of the survey suggest that as much as $300 million of personal and business loans were underwritten by peer to peer lenders over the course of the last fiscal year. That represents a doubling in the amount that was lent on such platforms during the 2015/2016 financial year.

Why Australia needs a better system for credit scores (The Converstion), Rated: AAA

Australia’s credit rating system is failing both borrowers and lenders. Many borrowers are unaware of their own credit scores and our research shows they have trouble applying for suitable loans. Lenders are also struggling with too little information, causing them to extend loans to those they shouldn’t and restrict loans to worthy borrowers.

Upcoming changes to Australia’s credit reporting system could remedy these issues.

Under the new credit reporting regime, both lenders and borrowers will have access to more data, such as monthly payment histories on loans and credit cards.

More innovation ahead in mortgage lending

For higher-risk borrowers, novel techniques to assess credit risk (such as analysis of social media accounts) may be the answer to distinguish good borrowers from bad.

But prior experience from an over-reliance on credit scores in the United States shows that careful assessment of borrowers remains vital.

India

Refer to these fintech startups for range of medical loans (Business Standard), Rated: A

Among all the personal the medical loan is the most crucial one which is often required on an urgent basis by the applicants.

Recently a host of Financial technology(Fintech) and Non-financing related start-ups have been launched in providing a variety of medical to the clients.

Canada

They couldn’t get loans from their banks so turned to a legitimate-looking lender online (The Star), Rated: AAA

Unable to qualify for a loan from her bank, Johnston searched online for private lenders and found a website for what appeared to be a legitimate company calling itself North Clear Credit.

Everything about it — the variety of loans offered, the glowing testimonials, the company description — seemed professional. In fact, a customer who later reported North Clear Credit to police says an officer told her the website looked legitimate.

For Johnston and Mood, the terms were appealing. The money could be paid back monthly over five years at an interest rate substantially lower than what they would be charged elsewhere.

Johnston completed an online application and was approved for a $20,000 loan.

Within a few days, Johnston and Mood had lost $3,500, and two North Clear Credit “representatives” with whom Johnston had been corresponding had disappeared.

Blackchain Announces Private Placement (Stockhouse), Rated: A

Blackchain Solutions Inc. (the “Company” or “Blackchain”) (CSE: BIS), announces a private placement of up to 3,400,000 units at a price of $0.18 per unit, for gross proceeds of $612,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant is exercisable at a price of $0.22 per share for a term of two years.

Proceeds generated from this financing will be used to initiate and support the filing of multiple patents and trademarks related to the Blackchain Crypto Credit Rating API and P2P Lending Platform.

Authors:

George Popescu
Allen Taylor

Friday February 10 2017, Daily News Digest

Friday February 10 2017, Daily News Digest

News Comments Today’s main news: Will US rate rise hit P2P lending? US deregulation is no threat to P2P lending. Today’s main analysis: Apple users have higher credit scores, loan amounts than Android, Windows users. Today’s thought-provoking articles: Australian MPL update. United States Will US rate rise hit P2P lending sector? GP:” If savings accounts […]

Friday February 10 2017, Daily News Digest

News Comments

United States

United Kingdom

European Union

Australia

India

United States

Will US Rate Rise Hit Peer-to-Peer Lending Sector? (Morningstar), Rated: AAA

Rising interest rates in the US could hit this sector – but Simon Champ, manager of P2P Global Investments (P2P) told journalists in London on Wednesday that he is not unduly concerned about the effect this will have on returns.

“As the average life of the loans we own is very short – that is about one to three years –  we are able to steer the book even if economic policy changes. We can get back 3-4% of loans in a month, coming back in cash and reapplying that to other loans. So we are not worrying about what is happening in the US as we have the ability to move the trust weighting to different areas as a fiduciary,” he added.

Champ admitted that the current economic climate has helped to grow peer-to-peer lending services.

Champ also stressed the “amazing transparency” peer-to-peer lenders vehicles have, when compared to the banking sector. However, he believes in the long term, banks and peer-to-peer lending platforms will coexist comfortably within the same market.

Sachin Patel, global co-head at Funding Circle SME Income Fund (FCIF) echoes Champ’s views, saying that peer-to-peer lending provides another channel for small businesses to access finance.

Apple Users Have Higher Credit Scores, Loan Amounts and Better Rates than Android, Windows (PR Newswire), Rated: AAA

LendingTree® (NASDAQ: TREE), the nation’s leading online loan marketplace, analyzed over 2 million purchase mortgage and personal loan requests to better understand how Americans are shopping for their loans. The findings show that 41 percent of purchase mortgage shoppers and almost half (48.53%) of personal loan shoppers use a mobile device to shop and compare loan offers from different lenders. Additionally, the analysis suggests a correlation between a user’s device, credit score, and loan amount.

Overall, potential borrowers using a Mac computer have the highest average credit score in both the mortgage (FICO average 722) and personal loan (FICO average 683) categories, along with the highest average loan amount in each. In 2016, the average loan amount for Mac users was $274,412 for a mortgage and $14,650 for a personal loan, much higher than the national average of $226,554 and $11,921, respectively. The average down payment amount for borrowers using a Mac in 2016 was $66,865 while the national average came in at approximately $45,830.

Because Mac users averaged higher credit scores, they also received a lower interest rate offer on a 30-year fixed rate mortgage loan. Although interest rates increased in the last few weeks of 2016, the national average 30-year fixed interest rate for 2016 was roughly 4.04% when Mac users, with a higher average credit score, where offered an average rate of 3.93%.

Following closely behind Mac users are Apple iPad users, averaging the second-highest credit score and second-highest loan amount in both mortgage and personal loan categories, despite being one of the least-common devices used to submit loan requests. Naturally, iPad users received the second-lowest interest rate offer for a 30-year fixed rate mortgage loan, 3.95% in 2016.

On the other side of the spectrum, Android users averaged the lowest credit scores and lowest loan amounts in both the mortgage and personal loan categories. Unfortunately, this also means average interest rates offered to Android users were higher than the national average.

Data was analyzed from over 2 million loan requests and funded loans facilitated by LendingTree and through My LendingTree between January 1 and December 31, 2016.

Peer lenders are packaging loans and selling them to Wall Street (CNBC), Rated: AAA

But as the industry is growing, so are its funding needs. That’s where big Wall Street banks are stepping in.

P2P platforms increasingly are bundling loans together and selling them off to institutional investors as “asset-backed securities.”

Total ABS issuance for 2016 in peer lending came to $7.62 billion, according to S&P Global Market Intelligence analyst Eric Turner.

However, the practice of ABS issuance in the marketplace lending arena began only around 2013, when the total was a meager $257.1 million. That means issuance is about 30 times what it was just four years ago. The 2016 total also represented a 72.4 percent increase over the previous year.

Among platforms, SoFi leads the way in ABS offerings, with the firm accounting for 58.4 percent of the 2016 total. Avant and Earnest were other big issuers during the year, while Lending Club was fourth.

How One Female Fintech Founder Beat The Odds—And Raised Millions For Child Support App (Fast Company), Rated: A

When former Silicon Valley exec Sheri Atwood landed $4 million in crucial Series A venture capital funding for SupportPay, an app designed to streamline child care payments, a lot of attention was focused on her personal story. She was a divorced mom and child of a painful broken marriage—so the show-me-the-money skirmishes were familiar territory.

Last year in the U.S. just a handful of fintech companies founded by women raised Series A or Series B funding. In New York, there were two investment platforms—Sallie Krawcheck’s Ellevest ($9 million) and Wise Banyan ($3.5 million), and insurance broker PolicyGenius ($15 million). And in California there was online lender ApplePie Capital ($16.5 million), along with SupportPay ($4.1 million). Overall, billions poured into the sector.

What did they see that you think other investors missed?

They saw the need and also the social benefit it was providing. Especially here in the Valley, investors are more than willing to fund the 22-year-old white male problems. But all these problems facing the typical American over the age of the 30: No one is willing to do it. Unfortunately everybody is looking for a Mark Zuckerberg. When I say that I code, I’ve been tested in meetings. I wonder, have you ever asked a guy this? I passed their test.

What did it take to pull of your Series A?

We closed $4.1 million in December, led by Fenway Summer Ventures. It was incredibly difficult, compounded by the fact that the world changed. When we raised our seed capital, the consensus was to focus on user growth. Just get users on board, get them active and using the product. We weren’t focused on revenue. Then around March of last year, revenue became investors’ only focus. It required a huge shift in product, in strategy, in development. The whole rules of the game changed. At the time we were giving the product away for free, with the idea that eventually the it would be a monthly subscription. Our focus had to become getting users to convert to paid. We turned on revenue in June and started collecting revenue in July. That’s when we could start having conversations.

P2P lending to benefit from rising growth and inflation? (ValueWalk), Rated: A

Since the election, financials have gained about 18% and industrials are up 11.5%. Contrast this to the 1% rise in consumer staples and utilities.

Since the election, the S&P Small-Cap 600 is up 16%, with the S&P 500 up 7%. If Trump delivers on his trade threats, firms that earn a large share of their revenues from US sales will outperform multinationals.

P2P lending is a great source of fixed income. Its investors are currently averaging 7% returns on 36-month loans and 9% on 60-month loans.

P2P lending will also benefit from rising growth and inflation. If the economy improves, more borrowers will apply for loans. As investor appetite for risk increases, they will seek higher returns, which MPL offers.

How Fintech Can Take Off Without Getting Hampered By Regulations (Fortune), Rated: A

However, today’s rules regulating various licenses and charters are incredibly outdated and not well-suited to the Fintech world. For example, the way banking licenses are issued by state was established years ago when bric-and-mortar stores did not compete with online retailers.

If the OCC is going to start granting charters to fintechs, it will have to step out of its comfort zone and accept a certain amount of failure. For a fintech charter to deliver on its promise of making financial services more inclusive, efficient, and capable, it should be made available to a wide variety of firms. Many of these firms will ultimately not make it. Not only is that ok, it is necessary.

If the OCC sets a zero failure rate goal, and achieves it, something went wrong. If none of the firms chartered by the OCC fail, then either the OCC simply chose firms that were so entrenched that failure was not an option, or the OCC created a chartering regime that was so cumbersome and difficult that only firms that had already made it would apply. Either outcome is undesirable.

The OCC should instead focus on making certain these firms have a credible plan for protecting their customers in the event of failure. For example, a lending platform should have a plan to allow the borrowers to continue to make payments on the loan and the lender to receive those payments, even if the platform goes bust. If the customers are protected, the success or failure of any given fintech firm should not be a regulator’s concern.

Merrill Lynch Rolls Out Robo-Advisor (Financial Advisor), Rated: B

Merrill Lynch has launched its robo-advisor, paving the way for the wirehouse to capture clients for whom traditional financial advice is too expensive, the Wall Street Journal writes.

Merrill Lynch is the first among big brokerages to unveil a robo-advisor, the Journal writes. Wells Fargo plans to start piloting a digital service this year and UBS has also announced plans to release a robo platform.

United Kingdom

Funding Circle’s Patel: US deregulation is no threat to P2P (P2P Finance News), Rated: AAA

US PRESIDENT Donald Trump’s plans to deregulate financial services are no threat to peer-to-peer lenders, Funding Circle’s global co-head of capital markets has said.

“Trump has been quite open about his plans for deregulation, but I think that’s more with regard to investment banks,” said Sachin Patel (pictured) at a media roundtable held by the Association of Investment Companies.

“However, if he does deregulate retail financial services, that’s not the only way we compete with banks. It’s not just regulatory capital considerations, we can offer other advantages such as speed of transactions.”

UK footwear giant schuh partners with leading online payments provider Klarna (Retail Times), Rated: A

European payments provider Klarna has announced a partnership with 

What is the real potential of crowdlending? (Misys), Rated: A

Unbiased removes Innovative ISA tweet after criticism (Citywire), Rated: B

Last week, Unbiased posted a link on Twitter to an article with information about innovative finance ISAs. The article listed the benefits and risks of using the savings vehicle.

However following the tweet, many were quick to criticise Unbiased.

In response to this backlash, Unbiased contacted Phil Young, director of director of Threesixty support services, on Twitter to say it was ‘an internally written piece, for information only’, and that it took the post down ‘until we can review the facts’.

European Union

Austrian fintech startup Finnest raises €1 million, opening Slovakia office (Tech.eu), Rated: AAA

Austria fintech startup Finnest has announced a funding round of €1 million led by Maxfield Capital along with existing investors Speedinvest and a number of angels.

Vienna-based Finnest is a loan platform for SMEs and is currently active in the DACH region with plans to launch in its first non-Germany speaking market in the coming months. It will open an office in Slovakia later in February.

Finnest is addressing a segment that has been underserved so far, according to Maxfield Capital general partner Alexander Turkot: SMEs with annual turnover of at least €10 million that are trying to attract additional investment.

Interview with Ivalyo Ivanov, CEO of Iuvo Group (P2P-Banking), Rated: A

Iuvo is the first South-East European P2P platform that allows its users to buy parts of loans. All loans listed on the platform are issued by originators (registered non-banking financial institutions). We give our users the opportunity to generate an annual return up to 12% on their investments while simultaneously provide our originators with the chance to develop their businesses.

What ROI can investors expect?

The expected annual return depends heavily on the choices our investors make, but the return a well-balanced portfolio should make is on average between 7 and 12%.

How reliable is the credit rating / credit history data available for the Bulgarian loans?

Bulgaria has a very well developed non-banking financial sector and a great deal of experience with consumer loans. The quality of the scoring process is without a doubt on a very high level and there are no reasons to think that would change any time soon. Of course, as I’ve already said, thorough audits are made before we consider any originator joining us.

How is the company financed? Why did you select to start the company in Estonia?

Iuvo is financed through business angels. We chose Estonia as it has been the cradle of P2P lending in the past years and we believe the best way for us to grow and develop is to be where the best platforms are.

Is Iuvo Group open to international investors?

In order to open an account with us individual investors must be at least 18 years old, have a bank account in the European Union (or third countries that are currently considered as having equivalent AML/CFT systems to the EU), and have their identity successfully verified by Iuvo’s back office team.

Australia

Australian Marketplace Lending Update (The National Law Review), Rated: AAA

In a recent report on licensing applications the Australian Securities and Investment Commission (ASIC) revealed that it has granted 7 Australian financial services licences (AFSL) and 3 Australian credit licences to marketplace lenders between January and June 2016. A further 3 AFSL applications are currently being considered. Previously, 6 licenses were granted between 1 July 2015 and 31 December 2015. This indicates that the number of entrants to the Australian market continues to grow.

Unlike other jurisdictions such as New Zealand, Australia does not have specific marketplace lending legislation. Marketplace lenders have had to adapt to fit within the existing financial services framework.

Australian crowdfunder, DomaCom has signed an exclusive distribution deal with a New York-based real estate crowdfunding platform, Prodigy Network.

The deal aimed to expand investment opportunities for Australian investors wanting to invest in US real estate assets.
India

P2P lending marketplace Rupaiya Exchange aims to increase financial inclusion (The Tech Portal), Rated: B

Rupaiya Exchange intends to increase financial inclusion by enabling common man an access to credit. It enables borrowers to take personal as well as business loan through this virtual marketplace.

With the use of multiple data extraction, analysis techniques, and proprietary scoring mechanism, they score every individual and not rely only on the traditional credit checks. Through the use of technology, they want to provide credit to credible borrowers and bring down their cost of borrowing.

Authors:

George Popescu
Allen Taylor