Thursday September 26 2019, Weekly News Digest

LendingClub eligibility

News Comments Today’s main news: SoFi intros crypto trading. Investors locked out of LendingClub in 4 states. Funding Circle asks US regulators to folow UK’s model. Fundbox raises $176M. Klarna surpasses 12M transactions per year. Today’s main analysis: U.S. subprime auto loan ABS recession scenarios (A MUST-READ). Today’s thought-provoking articles: Recession talk cooling. Consumers with […]

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

LendingClub eligibility

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi Introduces Crypto Trading With SoFi Invest (PR Newswire), Rated: AAA

SoFi announced today that it has added crypto trading to its fast-growing SoFi Invest platform, as a response to demand from its over 800,000 members. SoFi Invest is now the first platform to offer automated and active investing with stocks, ETFs, and crypto through a single app.

SoFi Adds Bitcoin, Litecoin, and Ethereum to Invest Platform (Cheddar), Rated: A

SoFi goes live with crypto trading service for its over 800K users (The Block), Rated: B

SoFi users can initially buy and sell three cryptocurrencies – bitcoin (BTC), ether (ETH) and litecoin (LTC). The Block first reported the story last week, saying that the firm is beta testing the service in partnership with Coinbase.

SoFi CEO on what’s next for the company (Yahoo! Finance), Rated: A

Sofi CEO Anthony Noto joins The First Trade to discuss what’s next for the company.

Watch the video here.

Charlie Lee {LTC} praises SoFi as crypto-investing with Litecoin kicks-off (Our Bitcoin News), Rated: A

Litecoin is ranked at #6 underneath Tether, as well as Bitcoin Cash, in the market. The price jumped up at a rate of 0.60% in the course of the past 24-hours. This led to LTC scaling all the way up to $57.03 where it presently rests. The trading volume recorded stands at roughly $2.957 billion, whereas the supply has 63,337,479 LTC coins included as part of circulation. The total market cap of Litecoin amounts to $3.612 billion which depicts a massive decline compared to the value attained a week back.

SoFi CEO: Start investing in your 20s (Yahoo! Finance), Rated: A

SoFi CEO Anthony Noto discusses how his company’s consumers can now buy and sell Bitcoin, Ethereum and Litecoin.

SoFi Refunds Investors Hit By Capital Gains from Proprietary ETFs (ETF Trends), Rated: A

Financial technology company SoFi is offering refunds to investors hit by capital gains taxes following the change of replacing Vanguard funds with their proprietary ETFs in certain portfolios managed by their robo-adviser.

Some Investors Locked Out of Investing in LendingClub Loans (Lend Academy), Rated: AAA

Over the last 24 hours we’ve received several messages from Lend Academy readers alerting us that they have received information that they are no longer able to invest in LendingClub notes. There is is also an active discussion on the Lend Academy forum.

LendingClub state eligibility as of 9/24/2019. Source: Lend Academy

Funding Circle urges US regulators to follow UK model (P2p Financ News), Rated: AAA

FUNDING Circle’s US division is urging the Securities and Exchange Commission (SEC) to amend its restrictions on peer-to-peer retail investment.

The US financial regulator limits annual investment to five per cent of an investor’s annual income if their yearly income or net worth is under $107,000 (£86,075), rising to 10 per cent if the investor earns more than that.

Two Franchise Trends Aspiring Franchisees Should Look Out For (Forbes), Rated: A

Over the past 14 years, I’ve coached more than 1,500 people who were searching for the best franchise for their situation. I recently read the 2019 Small Business Trends 

Fintech Fundbox raises $ 176M to lend to business using AI (Information Management), Rated: AAA

Fintech Fundbox Inc. has raised $176 million in a new funding round from investors including Allianz SE and General Catalyst. The company planned to announce the funding along with a new $150 million credit facility.

A Fundbox spokesman said the new round valued the company at between $500 million and $1 billion, but would not disclose the exact valuation.

U.S. Subprime Auto Loan ABS: Evaluating Recession Scenarios (DBRS), Rated: AAA

Summary Highlights

  • Under the hypothetical Recession Scenarios, DBRS found that credit enhancement (excluding excess spread) coverage of remaining expected losses, as determined by a multiple calculation, decreased at the inception of the hypothetical recession for all of the Sample Transactions. The senior debt tranches experienced a swift deleveraging whereas some of the subordinated debt tranches could be at risk for a potential downgrade during the hypothetical Recession Scenarios.
  • After the initial decline in the multiple calculations at inception of the hypothetical Recession Scenarios, the deleveraging nature of the sequential pay structures of the transactions resulted in the calculated multiples for the analyzed debt tranches to move into the multiple range corresponding to the original rating of the debt tranche over varying lengths of time. The multiples for some of the debt tranches originally rated BB were weaker and moved into the BB range at a slower pace. As a result, those tranches would be more likely to be considered for a potential downgrade as compared to the more senior debt tranches where the structures delevered more quickly and the multiples reached the range corresponding to the original rating over a generally shorter period.
  • Over the life of the Sample Transactions, the credit enhancement multiples for all of the debt tranches analyzed, some on a delayed basis, ultimately moved into the AAA rating multiple range.
  • In each of the Recession Scenarios, the structure of each of the transactions provided sufficient credit enhancement for timely payment of interest and ultimate payment of principal of all debt tranches.
Source: DBRS

Read the full report here.

A Cooling in Recession Talk, Heat Up in Housing (PeerIQ), Rated: AAA

Lower rates, improved credit scores, and tighter housing inventory are improving the outlook for housing. Housing market achieved an 18-month high in housing starts and a record high in FICO scores.

The Citigroup Economic Surprise Index – a measure of actuals vs economist’s expectations – has also registered readings above the neutral baseline suggesting slowdown fears may be exaggerated.

Source: PeerIQ, CitiGroup

Consumers with Significant Liquidity Needs Often Access Alternative and Traditional Credit Markets Concurrently (GlobeNewswire), Rated: AAA

Many lenders believe that consumers who turn to the alternative credit market for liquidity do so because they have no other options. However, a TransUnion study presented today at the Lend360 conference found that these borrowers are frequently applying for and receiving traditional credit at the same time. While traditional subprime installment lenders and alternative lenders are competing over the same consumers, the study finds that the liquidity need is often not fully met in either market.

Source: TransUnion

Risk Levels Higher for Traditional and Alternative Loan Borrowers

Controlling for risk score, 8.5% of the alternative credit-active consumers had a serious delinquency in the first 12 months, vs. just over 2% for the control group. Bankcard performance was also worse. While these borrowers exhibited a preference for unsecured personal loans under $1,500 within 12 months of the alternative credit origination, they also originated auto and bankcard credit during that time.

Read the full report here.

Lendio to Double Sales Force, Expand Loan Product Offerings (Benzinga), Rated: A

Lendio today announced plans to double the sales force at its Lehi, Utah, and Woodbury, New York, offices. The company has hired 80 employees in 2019, and intends to add another 40 sales representatives by the end of the year, with plans to bring on another 40 in the first quarter of 2020. In addition to the expanding workforce, Lendio plans to bolster its selection of loan products for small businesses, with a 10% increase in the number of product offerings in the coming year.

Fintech lenders taking more market share from banks, survey finds (American Banker), Rated: A

Fintechs are continuing to siphon away customers for unsecured personal loans from traditional lenders, according to a study released Wednesday by Experian.

The study found that digital lenders more than doubled their market share in the past four years, with consumers across the credit spectrum increasingly turning to fintechs like Lending Club and Social Finance.

Fintechs now provide 49.4% of unsecured personal loans as of March compared to 22.4% in 2015, according to Experian.

Fintech Lenders Could Hold the Keys to Recession Recovery (Salon), Rated: A

Born out of the last recession, young fintech lenders have not yet been tested by a significant economic storm, and many in the industry are wrapped up in a dialogue of speculation about the industry’s ability to ride out an impending recession. It’s time to turn the conversation instead to focus on how fintech lenders can position themselves to play a critical role in recovery from the next downturn, whenever it may happen.

WeWork should ask SoFi CEO for advice on how to save the company (Yahoo! Finance), Rated: A

The two new guys running the slowly sinking ship known as once hot tech startup WeWork should give SoFi CEO Anthony Noto a holla on his Apple iPhone. Trust me, Noto has some good, timely advice for Artie Minson and Sebastian Gunningham.

Because the former Goldman Sachs banker and Twitter chief financial officer, now SoFi chief clearly gets how to rebuild a promising tech startup after a high-profile challenge or two. And then possibly, take it down the path of a successful initial public offering.

Generation Z’ers want more financial education – and innovative tools to help them learn (PR Newswire), Rated: A

As high school students return to school, they may see the benefits of new state laws across the country that require curriculums to offer a class about personal finance. This is great news for young adults as 76% of recent high school graduates agree it should be required, according to a national survey by Experian.

Many Gen Z’ers surveyed say innovative tools are the way to go when it comes to learning about credit (45%) and almost half (48%) would prefer to use tech-driven tools versus textbooks to learn more.

Survey respondents also say they are currently learning about finances mostly through their friends (28%), YouTube (27%) and some form of social media (24%).

D.C. Court Dismisses Challenge to OCC’s Fintech Charter (Manatt), Rated: A

In the latest battle over the Office of the Comptroller of the Currency’s (OCC’s) plan to issue special purpose national bank (SPNB) charters, a D.C. federal judge has for a second time dismissed a lawsuit brought by the Conference of State Bank Supervisors (CSBS).

The decision creates the potential for circuit split, as a New York federal court reached the opposite conclusion in a nearly identical action filed by the state’s Department of Financial Services (DFS).

9 Ways To Build an Empire Without Lifting a Finger (Yahoo! Finance), Rated: A

Another way to build your real estate empire is through real estate crowdfunding. As with investing in a REIT, real estate crowdfunding allows you to pool your money with other investors to invest in real estate. This could include multifamily units, commercial properties and bundles of single-family homes.

According to U.S. News & World Report, the top real estate crowdfunding platforms are ArborCrowd, RealCrowd, Groundfloor, CrowdStreet, PeerStreet, Small Change and RealtyMogul.

If you can afford the minimum investment — which is usually $25,000 — you can make big returns. Groundfloor boasts 10% returns for individual investors and CrowdStreet’s is even higher with 25.5% total average annual returns across all fully realized deals.

RealCrowd offers a breakdown of average annual income on a $1 million investment based on the property type: $78,000 for a suburban office, $72,000 for a retail space, $59,000 for a downtown office and $58,000 for a multifamily unit.

The Best And Worst MA Towns For Young Families (Patch), Rated: A

The online mortgage broker Lending Tree has tried to take some of the guess work out of that decision by ranking every community in Massachusetts with 5,000 or more residents based on their appeal to families with school-age children.

Hingham, under Lending Tree’s methodology, received a score of 72.5. Last-place Webster’s score was 31.9. Other towns in the top 10 included Winchester, Needham, Milton, Longmeadow, Wellesley, Cochituate, Pinehurst, Lexington and Nantucket.

JPMorgan donates $ 25M to get fintech in hands of underbanked (American Banker), Rated: A

JPMorgan Chase announced Tuesday a $25 million commitment to the Financial Health Network’s Financial Solutions Lab, a program meant to focus on the creation of fintech tools to help consumers better manage their finances.

The Financial Health Network (formerly The Center for Financial Services Innovation) previously received a $30 million philanthropic donation from the bank that spanned the last five years.

Bitcoin and Ethereum dive deep, is Bakkt to blame? (Mashable), Rated: A

“The disappointing BAKKT opening signals to the crypto community that institutions are less ready to invest in BTC at scale than was supposed, which means the price was probably too high and due for a correction. What we’ve just seen is short sellers and momentum traders piling on to make things worse, and now here we are back at support,” Alex Mashinsky, CEO at crypto lending and depository company Celsius Network, told Mashable in an emailed statement.

STRATA Trust Company Reaches $ 2 Billion AUC Milestone (PR Newswire), Rated: A

STRATA Trust Company (“STRATA”), a custodian dedicated to the complexity of holding alternative investments in tax-advantaged, self-directed retirement accounts, announced today that the firm has surpassed $2 billion in assets under custody. STRATA offers access to a range of asset classes that include private equity, private debt, real estate, crowdfunding, structured settlements and more. Since 2008, STRATA has been committed to empowering investors and the investment community with wider diversification and alternative asset custody solutions in retirement portfolios by delivering industry-leading service, education and support.

Online Pawn Lending Goes Back Offline (Business Wire), Rated: A

Prominent online lender Borro Private Finance unexpectedly ceased its collateral-based lending program this summer after nearly ten years of business. The UK-US-based establishment specialized in online pawn loans against valuable assets, including fine art, jewelry, and watches. Borro’s discontinuation of its operations comes nearly two years after the company’s withdrawal from the bridge loan market in July 2017.

Eleventh Circuit Tosses Online Lender’s Forum Selection, Class Waiver Clauses (Lexology), Rated: A

Siding with six consumers who filed suit asserting violations of state usury laws against online lenders, the U.S. Court of Appeals for the Eleventh…

Marqeta Hires Vidya Peters As First Chief Marketing Officer, as Company Continues to Build Out Expansive Global Vision (Business Wire), Rated: B

Marqeta, the first global modern card issuing platform, today announced the addition of Chief Marketing Officer Vidya Peters to its executive team.

White Oak Commercial Finance Acquires Veritas Financial Partners’ Asset-Based Loan Portfolio (ABL Advisor), Rated: A

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today it has purchased a portfolio of asset-based loans from Veritas Financial Partners, a Boca Raton, FL based specialty finance company.

Alchemy Technology And Equifax Partner To Drive FinTech Innovation (PR Newswire), Rated: B

Alchemy Technology Inc. and  Equifax Inc. (NYSE: EFX) today announced a new partnership to drive FinTech innovation. The relationship is designed to help banks, specialty financing firms and FinTech startups accelerate their time to market with easily deployable white labeled lending solutions. The two companies will make the “tech” in FinTech available to organizations of all sizes with a powerful combination of the Alchemy Lending Operating System and Equifax data analytics, credit, identity and income verification solutions.

Ex-Goldman Sachs Managing Director Joins Lendingblock as Strategic Advisor (Lendingblock), Rated: B

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the appointment of John Macpherson as a strategic advisor.

CoreLogic Credco Integrates its Three-Bureau PreQual Solution with eLEND Solutions (CoreLogic), Rated: B

CoreLogic, a global provider of property information, insight, analytics and data-enabled solutions, today announced that CoreLogic Credco integrated its Three-Bureau PreQual credit report and score solution on eLEND Solutions, an automotive technology company specializing in online and in-store credit and finance solutions. The integration of the prequalification solution gives CoreLogic Credco customers who use eLEND instant, single-source access to a consumer’s credit report and FICO score from all three national credit bureaus – Experian, TransUnion or Equifax.

Tavant Named to 2019 IDC FinTech Rankings (Business Wire), Rated: B

Tavant, a Silicon Valley-based provider of AI-powered digital lending technologies, announced today it has been named to the 2019 IDC FinTech Rankings, the most comprehensive vendor ranking within the financial services industry.

United Kingdom

Klarna Surpasses 12M Transactions This Year (PYMNTS), Rated: AAA

FinTech payments disruptor Klarna has announced the start of its “No drama, just Klarna” retail campaign in partnership with 13 brands in the U.K., the company said in a press release on Wednesday (Sept. 25).

Klarna offers “pay later” payment options and attracts 50,000 new users each week. The startup said that in the past year, it has processed 12 million transactions. In August, more than 100,000 U.K. shoppers downloaded the Klarna app.

Klarna reports surge in payments, merchant growth during first half of 2019 (Mobile Payments Today), Rated: A

Klarna, a London based installment financing provider and challenger bank, said it surpassed 3 million active users in the U.K. and 170,000 retail merchants worldwide.

Brits hit financial maturity at 31 (P2P Finance News), Rated: A

THE age at which UK men and women finally feel secure in their finances is 31, according to Zopa.

The survey showed a clear split between age groups, with 21 to 25 year-olds believing 32 would be the age when they finally felt good about their finances, while those age 26 to 30 were less optimistic about the future, saying they would reach money maturity at 38.

OakNorth Bank completes £20m loan to specialist lending fund (London Loves Property), Rated: A

OakNorth Bank, the UK bank powered by OakNorth, has provided a £20m loan to the RAW Mortgage Fund, a specialist fund providing buy-to-let property loans against residential real estate in the UK.

Wonga borrowers have less than a week to submit payday loan reclaims (The Sun), Rated: A

Anyone who believes they have been mis-sold a Wonga loan is allowed to apply for compensation, but its administrators set a deadline of 11.59pm on September 30.

If you miss the deadline, you won’t be able to apply anymore and you won’t get any compensation for mis-selling.

Nexo Now Accepts Tokenized Gold for Instant Credit Lines and Will Offer Interest-Bearing Accounts on Gold (Covington Journal), Rated: A

Nexo is adding the NYDFS-regulated PAX Gold as a collateral option for its signature , bringing gold-backed lending to the blockchain.

With PAX Gold, now offers gold investors instant access to their gold wealth in over 45 fiat currencies via same/next day transfers and across 200+ jurisdictions.

European Union

Kreditech Eyes Expansion After Securing EUR 20 Million in Equity Financing (Yahoo! Finance), Rated: AAA

Kreditech is ready to scale globally in the near-prime customer segment – declares David Chan, Kreditech CEO. The Germany-based online direct lender and Point-of-Sale (POS) financing provider estimates its global target market at ca. EUR 300 bn in consumer credit issuance. It aims to reach EUR 1 bn in revenue by 2025, which will be driven by growth in existing markets where Kreditech is present, as well as expansion into new geographies. Kreditech currently operates in IndiaPolandRussia and Spain, and serves over one million customers. The company has raised EUR 20 million in its latest equity financing round.

You’ve heard of challenger banks, now meet the challenger lenders (sifted), Rated: AAA

For better or worse, it was Wonga that first put “challenger lenders” on the map. The UK payday lender’s meteoric rise saw it become a household name before its collapse last year after a string of irresponsible, inflated loans.

This month alone, large funding rounds were announced by Sweden’s Capcito and Lendify, as well as by UK’s Sonovate, an invoice lender for SMEs with over 750 active clients. Banks are also watching closely, with Goldman Sach’s equity arm being a notable funder in Lendable, recently ranked the UK’s sixth fastest-growing private tech company.

In the UK, the challenger-lender industry grew to £6.1 billion in 2017, according to a study by the Cambridge Centre for Alternative Finance (CCAF). The CCAF also estimated that 29% of all new loans issued to SMEs came from challenger lenders in 2017. PwC predicts that figure will rise to nearly 40% in the next decade.

Source: Financial Times
International

Marketplace Lenders Navigate The Choppy Waters Of Compliance (PYMNTS), Rated: AAA

Regulators the world over are beginning to take a closer look at the alternative and marketplace lending business model.

In June, the U.K.’s Financial Conduct Authority announced plans to impose stricter restrictions on marketplace and peer-to-peer (P2P) lenders beginning this December following the watchdog’s decision to place P2P lending platform Lendy into administration — a result, the FCA said, of the industry’s lenient requirements to disclose governance arrangements and controls.

Also, in China, analysts at Yingcan Group pointed to the government’s P2P and marketplace lending crackdown as being likely to shrink the industry by as much as 70 percent this year.

This Fintech Safari Could Be a Wild Ride (The Washington Post), Rated: AAA

From ATMs to credit cards and PayPal, the West’s dominance of innovation in consumer finance appears to have exhausted itself.

At the top of the emergent new order is the fintech duo from China — Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Next in line are Alphabet Inc. and Walmart Inc., whose highly localized smartphone payment rivalry is playing out between Google Pay and PhonePe in India. In Southeast Asia, two homegrown ride-hailing giants are aspiring to dominate commerce.

The rise of African mobile money is associated with M-Pesa, Kenya’s digital-wallet revolution. Now traditional lenders like Standard Chartered Plc, with a presence on the continent going back more than a century, are discovering that online banking can help them mobilize low-cost current and savings accounts more profitably than acquiring customers via physical branches.

Australia/New Zealand

Harmoney says the P2P lender has been ‘slowly moving to lending our own money’ since 2015 (interest), Rated: AAA

The founder of Harmoney, New Zealand’s biggest licensed peer-to-peer (P2P) lender, says he can’t see a viable P2P lending model in New Zealand which is why Harmoney has started lending its own money.

Neil Roberts and David Stevens of Harmoney (Lend Academy), Rated: A

Harmoney, the first peer to peer lender to be licensed in New Zealand, has originated more than NZ$1 billion in loans since launching five years ago.


Read the PDF transcript here.

India

Kreditech targets India after EUR20m funding boost (Finextra), Rated: AAA

Kreditech, a German-based online lender and POS financing provider focused on “near prime” borrowers, is looking to the Indian market after raising EUR20 million in funding.

The round was co-led by Runa Capital and unnamed German private investors, with participation from existing shareholders HPE Growth and Amadeus Capital Partners.
Southeast Asia

Accumulated P2P lending exceeds W6tr (The Investor), Rated: AAA

Accumulated peer-to-peer loans in South Korea have surpassed 6 trillion won ($5 billion), data showed on Sept. 26.

Outstanding P2P loans extended by 220 companies stood at 6.2 trillion won in June, compared with 4.7 trillion won at the end of last year, according to the data compiled by the Financial Supervisory Service.

Indonesia’s Investree in talks to raise series C funding for regional expansion (Tech in Asia), Rated: A

Indonesia’s fintech peer-to-peer lending startup PT Investree Radhika Jaya is in talks with several investors to raise a series C funding as the firm looks to boost its expansion in Southeast Asia.

The Securities Commission Malaysia Approves EdgeProp as First Property Crowdfunding Platform in Malaysia (Crowdfund Insider), Rated: A

The Securities Commission Malaysia (SC) has registered EdgeProp Sdn Bhd as the first “Recognised Market Operator” to establish and operate a property crowdfunding platform in Malaysia. EdgeProp was granted an approval in principle in September 2019.

FINTECH COMPANIES FACE TALENT SHORTAGE (StaffingIndustry.com), Rated: A

The majority, or 94%, of fintech companies in Singapore, say the country requires fintech talent, according to survey data from Michael Page Singapore.

The number of Singapore consumers adopting fintech products and services has drastically risen in the last two years, tripling from 23% in 2017 to 67% in 2019, according to Michael Page.

Bitcoin Daily (PYMNTS), Rated: B

And Singapore-based exchange Bitrue has announced the launch of a low-interest crypto lending platform, which goes live on September 30.

MENA

Qatar Boosts FinTech Focus (PYMNTS), Rated: A

As reported by Crowdfund Insider, the Qatar Financial Centre (QFC) has expanded the number FinTech-related activities that will be awarded licenses. The additional support will come from the QFC platform.

The seven firms include DecisionLogic, which focuses on advanced bank verification that lets lenders qualify borrowers.

Africa

Proven ways you can make money in real estate (Daily Monitor), Rated: A

You can utilise a variety of methods that includes any of the following:
•Seller financing through lease options
•Trading fixed assets such as cars, jewellery and more
•Taking over someone else’s mortgage payments who might be in a distressed situation
•Bringing in an investment partner with cash
•Borrowing from a bank or getting a hard money loan
•Taking out a home equity line of credit
•Utilising a peer-to-peer lending network

Caribbean

Victoria Mutual acquires shares in Barbados-based FinTech Carilend (Jamaica Observer), Rated: AAA

Victoria Mutual Investment Limited (VMIL) has acquired a 30 per cent stake in Carilend, a Barbados-based financial technologies (FinTech) company, that is said to have revolutionised borrowing and lending in the Caribbean.

Authors:

George Popescu
Allen Taylor

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

Thursday September 12 2019, Weekly News Digest

bank technology

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-4 Trust. Stripe debuts corporate credit cards. College Ave completes $300M securitization of private student loans. Yirendai issues earnings results. Today’s main analysis: Deregulating Fannie and Freddie (A MUST-READ REPORT FROM THE U.S. TREASURY). Today’s thought-provoking articles: Average FICO scores hit […]

The post Thursday September 12 2019, Weekly News Digest appeared first on Lending Times.

bank technology

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-4 Trust (Yahoo! Finance), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-4 Trust (“SCLP 2019-4”). This is a $465 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-4

Class

Preliminary Rating

Class Principal

A

AAA (sf)

$360,000,000

B

AA+ (sf)

$29,500,000

C

A+ (sf)

$47,500,000

D

BBB+ (sf)

$28,000,000

OnDeck CEO Noah Breslow to Deliver Keynote Address at 2019 LEND360 Conference (GuruFocus), Rated: A

OnDeck today announced that Chairman and CEO Noah Breslow will be a keynote speaker at the LEND360 Conference in Dallas, Texas on Thursday, September 26, 2019. Mr. Breslow will discuss industry trends in alternative data and how they are improving many aspects of online lending to small businesses.

Case activity for On Deck Capital, Inc. vs Beautyshea, LLC on Sept. 9 (Pennsylvania Record), Rated: B

‘Judgment Entered For $6,593.50 On 09-09-2019 236 Notice Of Judgment Sent 09-09-2019’

Payments giant Stripe debuts a credit card in its latest step into the financing fray (TechCrunch), Rated: AAA

Last week, when the popular payments startup Stripe made some waves with its first move into money lending through the launch of Stripe Capital, we reported that the company was also soon going to be launching a credit card. Now, that news is official. Today, the company is doubling down on financing with the launch of corporate cards for business customers.

College Ave Student Loans Completes $ 300 Million Securitization of Private Student Loans (Crowdfund Insider), Rated: AAA

Student loan marketplace, College Ave Student Loans, announced on Tuesday it has completed a $300 million securitization of private student loans, its third securitization and largest to date. According to College Ave, the transaction was oversubscribed attracting a broad and diverse group of repeat investors and new participants. Barclays and Goldman Sachs were joint lead underwriters on the transaction with Barclays serving as structuring agent and sole bookrunner.

The Deregulation of Fannie and Freddie; Rate Cuts; “Full Stack” Banks (PeerIQ), Rated: AAA

This week, the Trump administration released their long awaited housing finance plan that will privatize Fannie Mae and Freddie Mac.

The plan would require a significant recapitalization – up to $180 Bn.

Read the full report here.

Source: Federal Reserve, PeerIQ

Average FICO score hits all-time high (CNBC), Rated: AAA

For the first time, the average national credit score has reached 706, according to FICO, the developer of one of the most commonly used scores by lenders.

Source: CNBC

U.S. Consumer Debt Surges on Jump in Credit-Card Balances (Bloomberg), Rated: A

U.S. consumer borrowing swelled in July by the most since late 2017 as Americans carried larger credit-card balances to fund both everyday and online purchases.

Total credit rose by $23.3 billion from the prior month, exceeding all estimates in a Bloomberg survey of economists, Federal Reserve figures showed Monday. Revolving debt outstanding increased by $10 billion, also the most since November 2017, while the growth of non-revolving credit was little changed from a month earlier.

Kabbage Launches New Small Business Revenue Index (Crowdfund Insider), Rated: A

Global financial service platform Kabbage announced this week the launch of its new Small Business Revenue Index. According to Kabbage, the index has two million live data connections the platform maintains across its customer base of more than 200,000 small businesses.

The Current State of the Small Business Lending Sector (Lend Academy), Rated: AAA

The companies that I view as pioneers in this space are Kabbage and OnDeck.

Although Kabbage and OnDeck were early to small business lending there are many other names in this space with varying models and scale including Funding CircleStreetsharesFundboxBlueVineBiz2CreditFundation and Credibly to name a few. LendingClub also has a small business lending operation but they primarily work with partners Funding Circle and Opportunity Fund today to originate these loans.

The Challengers of Small Business Lending

Probably the most recognizable name is PayPal and the Working Capital product which, according to deBanked, has surpassed OnDeck in small business lending volume.

Patriot Financial leads $ 15 million round for Numerated (American Banker), Rated: A

Numerated, the loan technology company that incubated inside Eastern Bank and spun off on its own in May 2017, has raised $15 million from bank investment fund Patriot Financial Partners. Existing investors Venrock, Fintop Capital and Hyperplane also joined the round.

TBF Financial Buys $ 60 Million in Commercial Debt from Major Online Lender (PR Newswire), Rated: A

TBF Financial purchased nearly $60 million in non-performing loans from a major online small business lender in recent transactions, CEO Brett Boehm announced today.

TBF bought the pools of post-charge-off loans as the highest bidder in transactions arranged through multiple brokers. In most cases, the company purchases directly from alternative lenders, equipment leasing companies and banks.

LendingTree Ranks the 50 Most Expensive Towns in America (NewKerala), Rated: A

No. 1 Vineyard Haven, Mass.

Total population 17,321
Median individual income $39,045
Median home value $674,600
Affordable housing costs for a median income earner $911
Calculated mortgage payment for a median priced home $2,767
Median rent payment $1,441
Home affordability deficit -$1,856
Rent affordability deficit -$530

The DeFi trend is accelerating and gaining acceptance, with Coinbase joining the fray. The leading brokerage has created the Coinbase Bootstrap Fund, to boost DeFi projects. Coinbase will invest in two projects, the Compound crypto lending scheme, and the dy/dx crypto derivative exchange.

The 30-somethings guide to creating passive income (Ladders), Rated: A

You might not have $30,000 saved up to buy a rental property right now, but do you have $500? The beauty of REITs like DiversyFund is you can start investing for the amount of money you might drop on a new pair of shoes.

There are public and private REITS as well as funds classified as real estate crowdfunding. Compare your options and find the best one that works for you.

PeerStreet Named CRETech 2019 Real Estate Tech Award Winner (Crowdfund Insider), Rated: B

Real estate investment platform PeerStreet announced on Tuesday it won first place in CRETech’s 2019 Real Estate Tech Awards (RETAs for the Information & Intelligence – Crowdfunding category.

Zillow chooses Impac Mortgage COO Rian Furey to lead mortgage expansion (Housingwire), Rated: B

Zillow announced Monday that it is naming Rian Furey president of Zillow Home Loans.

Balboa Capital Continues Accelerated Growth, Adds 125 New Employees in First Half of 2019 (Yahoo! Finance), Raated: A

Balboa Capital, an online lender that specializes in equipment financing and small business loans, hired 125 new employees during the first six months of 2019 to accommodate the company’s rapid increase in new business and acquisition of several new strategic partners.

United Kingdom

Why crowdfunding may not be the great democratising force in investment after all (The Conversation), Rated: AAA

The digital revolution has had a huge impact on the way new and small companies are financed – and crowdfunding has been at the forefront.

Initially, crowdfunding brought great optimism that it would have a “democratising effect” on finance. On the one hand it would enable entrepreneurs excluded from traditional sources of finance to attract funding. And, on the other, it would provide new opportunities for people with even relatively modest amounts of money to invest. For example, private investors looking for higher returns than those available with high street banks have been attracted to various lending platforms – also known as peer-to-peer (P2P) platforms.

Sonovate raises £110m to drive invoice finance (Fintech Futures), Rated: A

Finance tech provider Sonovate is looking to expand internationally and deploy more working capital to SMEs and mid-market businesses after raising £110 million, reports Jane Connolly.

Spotcap find 77% of SME brokers are upbeat about Brexit (AltFi), Rated: A

Over three-quarters of commercial finance intermediaries in the UK expect the number of loans they broker to increase after Brexit, with more than half saying the number will rise “by a lot”.

In July Berlin-based online lender Spotcap asked 132 UK brokers, accountants and advisers about the future of SME finance in the UK, the results of which it published today as part of a report entitled The State of Commercial Finance in the UK.

FCA urges firms to prepare for no-deal Brexit and launches helpline (P2P Finance News), Rated: A

FIRMS should prepare for the possibility of a no-deal Brexit, says the Financial Conduct Authority (FCA), as it launches a dedicated helpline for businesses.

The City watchdog, which oversees the peer-to-peer lending market as well as the rest of the financial servcies sector, says firms who have not prepared appropriately for the UK leaving the EU without a deal may see an impact on their business.

Foreign firms eyeing P2P market entry (P2P Finance News), Rated: A

REGULATORY consultancy Bovill has reported a steady stream of interest from new entrants to the peer-to-peer lending market, particularly from overseas firms.

Brown attributed the slowdown to the fact that P2P is a more mature market, meaning there was “less of a gold rush” for new players.

H&M extends Klarna ‘buy now, pay later’ service to the UK (Fashion United), Rated: B

Swedish fast-fashion giant H&M has extended its partnership with payment provider Klarna to the UK market, offering Brit shoppers the option to ‘buy now, pay later’.

New SME services added to Starling Bank’s marketplace (AltFi), Rated: B

Digital Risks is an insurance provider for small and medium-sized digital businesses, including cover for specific threats like commercial legal protection, cyber security, management liability, employers liability, public liability and professional indemnity.

While CyberSmart is a platform for SMEs to identify digital weaknesses and achieve their Cyber Essentials Certification, the government-backed accreditation for companies looking to protect against cyber threats.

China

Yirendai (NYSE:YRD) Issues Earnings Results (Mayfield Recorder), Rated: AAA

Yirendai posted its earnings results on Tuesday, September 3rd. The technology company reported $0.24 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.48 by ($0.24), Morningstar.com reports. Yirendai had a return on equity of 32.93% and a net margin of 15.30%. The firm had revenue of $322.89 million for the quarter.

LexinFintech Secures $ 300 Million Private Placement of Convertible Notes with PAG (Crowdfund Insider), Rated: A

Chinese consumer financing platform LexinFintech announced on Wednesday it has entered into a convertible note purchase agreement with PAG issue and sell convertible notes in an aggregate principal amount of $300 million through a private placement. 

IceKredit Raises $ 47M in Pre-Series C Funding (FINSMES), Rated: A

IceKredit, Inc., a Los Angeles, CA and China-based credit risk and credit management company, raised $47m in pre-Series C funding.

These Chinese Online Lenders Are Not For the Weak at Heart (GuruFocus), Rated: A

Beijing-based online lender Yirendai (NYSE:YRD) and Shanghai-based Paipaidai, or PPDAI Group (NYSE:PPDF), shares have been pummeled down to their lowest levels in the past year. Yet aside from receiving credit lines from large Chinese institutions amid China’s crackdown on fraud lending in their industry, both lenders appear to remain in a healthy state.

PPDAI — the older and bigger of the two lenders — came out strong in its recent quarter, beating earnings expectations. The $1.2 billion online lender reported it had 29% year-over-year growth in loan origination volume to $3 billion, compared to just 1.6% growth a year earlier.

Hexindai Announces Support For Regulators’ Decision to Include P2P Platforms in Central Bank’s Credit System (Crowdfund Insider), Rated: B

Chinese peer-to-peer lending platform Hexindai (NASDAQ: HX) announced on Tuesday its support for the decision by industry regulators to include the country’s P2P platforms in the central bank’s credit system. The online lender reported that it believes this as a positive move for the P2P industry.

Sequoia-Backed P2P Lender Huobank Collapses As Beijing Mops Up Online Finance Risks (China Money Network), Rated: A

European Union

Banks raise concerns ahead of ECB meeting (Irish Examiner), Rated: A

The president of Germany’s powerful savings banks association, community lenders that dominate the country’s shopping streets, joined Dutch bank ING yesterday in criticising the ECB’s loose monetary policy.

Its 50 million customers have increased their savings by almost 5% since last year to €965bn which is roughly the size of the Dutch economy. With lending amounting to about €860bn, the banks are left with a chunky unused surplus.

Fintech Europe Selects Eight Startups for its Fourth Batch (Yahoo! Finance), Rated: B

Fintech Europe, Plug and Play’s fintech-focused innovation platform based out of Frankfurt, Germany, announced today the eight startups selected for its fourth batch. The platform has grown its partner base to 11 Financial Institutions since its inception in May 2018. Together with Deutsche Bank, TechQuartier, BNP Paribas, Nets Group, UniCredit, Aareal Bank, Abanca, Danske Bank, DZ Bank, Elo, and Finablr, it runs two 12-week innovation programs a year.

CashDirector 

CashDirector SA is a technology company providing SMEs and banks with a Digital CFO integrated with on-line banking, helping with SMEs manage cash flow and accessing financing.

Credit Kudos

Credit Kudos is a credit bureau that uses financial behaviour to measure creditworthiness.

International

Technology Is Banks’ New Battleground (WSJ), Rated: AAA

European banks are spending vast sums on technology—but it may not be enough to defend against the incursions of bigger, richer American rivals.

U.S. lenders already dominate investment banking in Europe. The big risk for the continent’s banks is that slicker tech could give their American rivals a platform to make gains in lending to companies—the Europeans’ traditional stronghold.

This year, Europe’s banks plan to make technology investments worth in aggregate $77 billion, according to consulting firm Celent. That compares with $105 billion for their U.S. rivals. Faster, more seamless trading systems have long been a priority, but tech spending has shifted across business lines and from back office to front office. It can cover everything from maintaining decades-old systems to cutting-edge artificial intelligence.

Source: Celent

Wirecard Teams Up With Credibly to Digitalize Funding Disbursements (Crowdfund Insider), Rated: A

Germany-based global provider of digital payments and commerce solutions Wirecard announced on Wednesday it is partnering with U.S. business funding fintech Credibly to digitalize funding disbursement. Wirecard claims to be one of the largest issuers of payout cards in the U.S. and is now offering fully digitalize solutions.

PwC to AM industry: disrupt yourself or face extinction (City Wire Selector), Rated: A

The European financial services industry is facing an ‘Amazonisation’ moment, in which those offering consumer-first solutions underpinned by sustainable finance will survive and the others will cease to compete.

That is the headline finding of 52-page report co-authored by PwC Luxembourg and Luxembourg for Finance, which investigated underlying industry trends and indicated that the European market is losing ground on its US and Asian peers when it comes to innovation and assets.

State of the Chain: Five Winning Use Cases for Blockchain in 2019 (U.today), Rated: A

Predictably it was Binance that stole the limelight, with the surprise launch of its eponymous lending platform, which was unveiled on Monday, August 26, and then proceeded to fill its initial lending quota of 200,000 BNB and 10 million USDT in a matter of seconds two days later.

Dharma and Compound have announced new products, while Coinbase has hinted that this will be the next vertical it expands into.

Lenders can enjoy annualized interest of up to 15%, which is significantly better than the negative rates they are currently offered on fiat savings and on negatively yielding government bonds.

Australia

Hopes fintech inquiry will ‘validate’ bank competitors (The Sydney Morning Herald), Rated: A

On Wednesday New South Wales senator Andrew Bragg successfully moved to secure a senate committee inquiry into the fintech and regulatory technology spaces, paving the way for a year-long review into how competitive Australia is in these sectors.

Chief executive of small business lender Lumi, Yanir Yakutiel, said the inquiry should focus on expanding the regulatory sandbox program, which is designed to help early stage fintechs test their ideas.

India

Five Ways Artificial Intelligence Is Instigating Paradigm Shift In Online Lending Space (Via.news), Rated: AAA

Currently, digital lending accounts for around 15% to 20% of the total lending market and could surpass 50% in coming years.

Asia

Chinese P2P Lending Companies Ventures to Vietnam (LearnBonds), Rated: AAA

This business model boomed in China, but following a regulatory clampdown by authorities on risky financial practices, the number of fintech and peer-to-peer (P2P) lending platforms in the country dropped from about 1,900 a year ago to just 900 in May.

It now appears that some of these Chinese P2P lending companies have not necessarily disappeared. They simple ventured into new markets and in particular Vietnam.

According to the State Bank of Vietnam (SBV), there were 40 peer-to-peer lending companies operating in Vietnam as of March. Of these, 10 companies are from China.

MENA

The opportunity of peer-to-peer lending in Lebanon (Executive Magazine), Rated: AAA

Through conversations with Lebanese entrepreneurs, business owners, bankers, and politicians, I have had a number of eye-opening discussions into the challenges and opportunities faced by Lebanon’s SME ecosystem. Given the country’s long-standing tradition in financial services and its large banking sector, I believe fintech—with solutions such as peer-to-peer lending, machine learning to personalize insurance solutions, and the use of artificial intelligence for wealth management—stands as a serious contender to unlock the funding challenges faced by Lebanon’s SMEs.

Latin America

SoftBank in talks to invest in Latam venture capital funds (Reuters), Rated: AAA

Japan’s SoftBank Group Corp (9984.T) is in talks with venture capital firms in Latin America to invest hundreds of millions of dollars in their funds, a move likely to speed up spending of a $5 billion regional venture capital fund, three sources with knowledge of the matter said.

So far, SoftBank has only announced direct investments using the fund’s resources, injecting capital into Colombian delivery app Rappi, Brazilian lender Creditas, gym membership app Gympass and Mexican payments firm Clip, for instance.

Proptech Flat raises US$ 4.5 million pre-seed round led by ALLVP (Contxto), Rated: A

Contxto – Not only is the Mexican real estate industry huge but also outdated with many inefficient processes. Counteracting this, a new Mexican startup, Flat, recently raised US$4.5 million in one of Mexico’s largest pre-seed rounds ever.

Africa

Nigerian online-only bank startup Kuda raises $ 1.6M (TechCrunch), Rated: AAA

Nigerian fintech startup Kuda — a digital-only retail bank — has raised $1.6 million in pre-seed funding.

Canada

Peer to Peer Lender Lending Loop Tops $ 50 Million in Loans (Crowdfund Insider), Rated: AAA

Canada’s first peer to peer lending platform for SMEs, Lending Loop, has topped CDN $50 million in loans, according to a post by Brendon Vlaar, co-founder and CTO of the company. Lending Loop provides investment opportunities in debt-based securities to both accredited and non-accredited investors.

PayBright Raises $ 34M in Growth Equity Financing (FINSMES), Rated: A

PayBright, a Toronto, Canada-based fintech company, received a $34m equity investment from goeasy.

Authors:

George Popescu
Allen Taylor

The post Thursday September 12 2019, Weekly News Digest appeared first on Lending Times.

Thursday June 20 2019, Weekly News Digest

ASIC borrowers

News Comments Today’s main news: LendingClub expands borrower program. Funding Circle forced to narrow range of valuation. Yirendai revenues come from haircut loans. Chinese P2P lenders explore southeast Asia. Borrowell passes 1M members, raises $20M. Today’s main analysis: 5 ASIC findings on marketplace lending. Today’s thought-provoking articles: US Core, inflation ease. Fintech lending algorithms discriminate […]

The post Thursday June 20 2019, Weekly News Digest appeared first on Lending Times.

ASIC borrowers

News Comments

United States

United Kingdom

China

Other

News Summary

United States

LendingClub Expands Program to Help Borrowers Actually Pay Off Debt (Lend Academy), Rated: AAA

LendingClub shared a few stats on borrowers who choose this method:

  • Save an average of nearly $900 over the course of their loan
  • Cut their credit card interest rate nearly in half
  • Increase their credit score in just three months

The product has been tested for over a year and LendingClub is working with a partner network of over 1,700 credit card, bank and loan companies to make the process seamless. What’s interesting is borrowers can add up to 12 creditors per loan which is an important feature since borrowers often hold balances across many cards.

Turning Lending Club’s Worst Loans into Investment Gold (Towards Data Science), Rated: A

This is a writeup of a machine learning project I completed. In this post I hope to:

  • Describe my algorithm for predicting loan defaults.
  • Use the algorithm to construct a portfolio of clean loans

Inflation Miss (PeerIQ), Rated: AAA

US Core CPI rose by 2% YoY in May, just at the Fed’s target rate but below economists’ expectations. Consistently low inflation is boosting calls for a rate cut next week. The market is pricing in a 24% probability of a rate cut next week and a 76% probability of a rate cut in September.

Source: Bloomberg, PeerIQ

Fintech algorithms discriminate 40% less than traditional lenders (Quartz), Rated: AAA

Algorithmic fintech lending is less discriminatory against minorities than traditional loan officers, according to a recent study of US mortgages. The findings signal hope that technology could provide financing that’s more fair, but the research also underscores how widespread discrimination remains.

The US housing market has long been prejudiced against minorities. When Latino and Africa-American borrowers are looking to buy a home, they usually end up paying 7.9 basis points (0.079 percentage points) more than whites to take out the mortgage, and 3.6 basis points more when they refinance the debt, according to a National Bureau of Economic Researchworking paper published this month.

Buttigieg worries tech may add racial bias to credit decisions (American Banker), Rated: A

Pete Buttigieg said the way credit scoring is done in the U.S. is fraught with inequality and he’s worried the process may get worse with systems based on artificial intelligence.

Commercial Real Estate Crowdfunding Eyes ’18-Hour Cities’ for Small Investors (The Street), Rated: A

When Clear Point Gardens, a 604-unit apartment complex in Columbus, Ohio, recently changed hands, it produced a nearly 43% gain in 16 months, an amazing windfall for investors in the deal.

All 68 of them.

The sale of Clear Point, financed with help from investors on CrowdStreet’s online platform, is the latest example of how online syndication is revolutionizing the way deals are financed in the $6 trillion commercial real estate market.

HSBC launches digital mortgage platform with help from Roostify (HousingWire), Rated: A

One of the world’s largest banks is about to join the digital mortgage revolution, as HSBC Bank USA, the U.S. arm of HSBC Group, announced that it is partnering with Roostify to launch a digital mortgage platform.

Mirador’s Trevor Dryer: ‘The world doesn’t need another high price lender’ (Tearsheet), Rated: A

Trevor started Mirador to fill this void of bank-originated small business lending. We talk about why he started Mirador with a lending as a service model and what painpoints he was addressing.

Dave is launching a checking account that helps users build their credit score (Business Insider), Rated: A

The Los Angeles-based company, backed by investors including Mark Cuban, the DJ Diplo, and hedge fund Mark 2 Capital, said on Tuesday it’s rolling out a new checking account product that reports all rent payments to credit agencies. The new feature, added to Dave’s original app, helps customers to build their credit. Dave plans to begin reporting utility payments later this summer.

CoreLogic Launches Marketrac Platinum (CoreLogic), Rated: A

With Marketrac Platinum, lenders and title companies can utilize the interactive platform to identify top performing real estate agents and brokerage firms to prioritize professional relationships based on market trends.

Zirtue Revolutionizes Peer-to-Peer Lending (IT Business Net), Rated: A

Sprout Mortgage Launches ACORN Automated Underwriting System (Yahoo! Finance), Rated: A

Sprout Mortgage, the innovative force in Non-QM lending, today announced the launch of its ACORN automated underwriting system (AUS) as part of an ongoing effort to deliver value-added services to its third-party origination clients.

Finicity Integrates with LendingQB to Optimize Mortgage Origination Process (PR Web), Rated: B

Finicity announced today an integration with LendingQB. LendingQB’s platform now uses Finicity’s digital Verification of Assets (VoA) solution to allow lenders to free up resources, increase processing speed and reduce mortgage fraud while providing borrowers with a more efficient and positive experience.

Cardholders Seek to Capital-ize on Madden (The National Law Review), Rated: A

Last week, three Capital One cardholders filed a putative class action in the Eastern District of New York, Cohen v. Capital One Funding, LLC,1 alleging that the rates of interest they paid to a securitization trust unlawfully exceed the sixteen percent threshold in New York’s usury statutes.  The Plaintiffs seek to recoup the allegedly excessive interest payments and an injunction to cap the interest rates going forward.

Fundbox Tapped By Top B2B E-Commerce Software Provider OroCommerce to Power Net Terms (Fundbox Email), Rated: A

According to a 2019 research study by

Cross River poaches execs from student refinancing firm Laurel Road (American Banker), Rated: A

Cross River Bank, a Teaneck, N.J.-based bank that focuses most of its energy on supporting fintechs, is hiring several people from the student loan refinancing company Laurel Road to its capital markets team.

Cross River’s fintech partners include Affirm, Circle, Best Egg, Coinbase, Rocket Loans, Stripe, Upstart and Transferwise.

Optimizely Closes $ US105M Financing Round (Which-50), Rated: A

Optimisation platform Optimizely has closed US$105 million in financing, including US$50 million in Series D funding. The funding, led by Goldman Sachs Private Capital Investing, also included Accenture Ventures.

Austin Niemiec Named New Executive Vice President of Quicken Loans Mortgage Services (Yahoo! Finance), Rated: B

Quicken Loans Mortgage Services (QLMS), the second largest mortgage lender serving the needs of brokers, regional banks and credit unions, today announced that Austin Niemiec has been named Executive Vice President.

Self Lender Awarded Inaugural Inclusive Fintech 50 (PR Newswire), Rated: B

Self Lender is pleased to announce its inclusion in the inaugural list of winners of the Inclusive Fintech 50. The Inclusive Fintech 50 is a competition launched in February to help early-stage fintech companies attract capital and resources to benefit the world’s 3 billion financially underserved people. The competition was organized by MetLife Foundation and Visa Inc., with global nonprofit Accion and World Bank Group member IFC.

United Kingdom

No sign yet of breaking out of circle (The Times), Rated: AAA

The early days of a company’s life on the stock market tends to set the tone for what follows. The grief around Funding Circle’s listing began even earlier and has continued to plague it.

Days before trading in shares of the specialist online lender began at the end of September, Funding Circle and its bankers were gunning for a valuation of up to £1.75 billion, only to be forced to narrow the expected range shortly before it came to market, and then to price the shares at the lower level of 440p apiece.

Source: Refinitiv

Three Biggest Overperformers And One Underperformer In Peer-To-Peer Lending (4th Way Email), Rated: AAA

Landbay

  • Over £300 million lent.
  • Maximum loan size to property valuation (LTV) 80% – better than all the major high-street banks.
  • Average LTV: 72% – highly suitable for these kinds of mortgages.
  • Average rent: 190% of the monthly mortgage payment.
  • Over 90% of mortgages are to experienced and professional landlords.
  • Reserve fund: 0.6% of outstanding mortgages – modest but useful.
  • Type of lending: residential BTL.
  • Typical risk of this type of bank lending: very low.
  • P2P bad debts: none.
  • Interest rate: 3.54% after expected bad debts.

Proplend

  • £65 million lent.
  • Maximum loan size to property valuation (LTV) 75% and investors can choose to limit to 50% – lower than all high-street banks.
  • Average LTV  60% – highly suitable for these kinds of mortgages and loans.
  • Minimum rent on rental properties usually 110% of the monthly mortgage payment.
  • Type of lending: residential and commercial rented properties up to five years; some development lending; a mix of senior and junior debt (junior means other lenders get repaid first if the borrower’s property has to be forcibly sold to repay the loans).
  • Typical risk of this type of bank lending: low to moderate for shorter-term rental properties; moderate to high for developments and junior debt.
  • P2P bad debts: none.
  • Interest rate: 7.32% to 9.43% after expected bad debts (7.32%-12.13% before bad debts).

CrowdProperty

  • £35 million lent.
  • Maximum loan size to property valuation (LTV) 70% and investors can choose to limit to 50% – lower than all high-street banks.
  • Average LTV  61% (against starting value of property) – very low for these kinds of loans.
  • Type of lending: property development lending.
  • Typical risk of this type of bank lending: moderate to high.
  • P2P bad debts: none.
  • Interest rate: 8% after expected bad debts (7.32%-12.13% before bad debts).

Rebuildingsociety – the Underperformer

  • £15 million lent.
  • Type of lending: unsecured small business lending to sub-prime.
  • Typical risk of this type of bank lending: moderate to high.
  • P2P bad debts: 17% of total lent in pounds
  • Interest rates: estimate an average 5% after heavy losses.

British Business Bank adds £60m firepower to non-bank lender (AltFi), Rated: A

Simply, a non-bank lender, focused on SME asset financing has scored a a third financing tranche of £60m from the British Business Bank.

One fifth of UK investors upping exposure to debt investments (Investment Week), Rated: A

One-fifth of UK investors are increasing their exposure to debt amid low interest rates and Brexit uncertainty, according to research from FJP Investment, which found this number climbs to 34% when 18-to-35 year-olds are considered in isolation.

However, the independent survey – which comprises 950 investors – discovered 44% of participants are more focused on short-term debt investments over this financial year due to both political and economic uncertainty; this figure rose to 68% among under 35s.

OakNorth completes loan to Oncore IT for the acquisition of Fuse Technologies (Fintech Finance), Rated: A

OakNorth – the bank for entrepreneurs, by entrepreneurs – has provided a loan to Oncore IT, a managed service and cloud platform provider.

The finance has been used for the acquisition of Fuse Technologies, a London based provider of unified communications tools.

Brexit and drive for growth sees IT fintech salaries surge (AltFi), Rated: A

London-based java developers lead the pack, commanding starting salaries of up to £60,000, followed by software developers in the capital on up to £55,000.

Intense competition between UK-based fintechs – lead by Revolut, TransferWise, OakNorth and Funding Circle – and high street banks attempting to upgrade their services has led to bidding wars in order to gain top level IT professionals, said the report called The UK Fintech Revolution.

Lloyds first to launch open banking app for credit cards and savings (Fintech Futures), Rated: A

Customers of Lloyds Bank, Halifax and Bank of Scotland are the first to see their savings accounts and credit cards in one place, thanks to open banking technology, reports Jane Connolly.

J.P. Morgan working on a secretive digital banking project based out of London (TechCrunch), Rated: A

A number of incumbent banks are known to be developing new digital-first products in a bid to keep the new wave of challenger banks at bay and now it appears that the latest to make that move is J.P. Morgan.

According to sources, the investment bank has begun recruiting for a secretive skunkworks project within London’s booming fintech industry. Very few details are known about what exactly J.P. Morgan plans to build, although TechCrunch understands the bank is busy hiring high level developers with full-stack and cloud-based dev skills for the new project, along with other personnel.

Following Facebook’s Libra launch, UK regulator hints at greater Big Tech scrutiny (AltFi), Rated: A

The FCA says technology is dramatically changing the markets it regulates and blurring regulatory boundaries in a new report into its activities.

China

Yirendai Revenues Come From Suspect Haircut Loans (Seeking Alpha), Rated: AAA

Over 60% of YRD’s FY 2018 revenues stem from “haircut loans” (P2P service fees charged to borrowers) that are prohibited by Chinese regulation. Recent developments in the P2P lending sector with regards to questionable lending practices, unethical collections, and usury are not being disclosed in YRD’s SEC filings, leaving U.S., Canadian, and international investors completely in the dark.

The Chinese P2P Lending Market

Unlike in developed countries, there are no administrative bodies (such as the U.S. Securities Exchange Commission) which regulate peer to peer lending exchanges in China. Instead, such services are regulated by self-organized internet associations and retail banks. The lack of meaningful oversight has caused the Chinese P2P lending market to bubble into $178.9 Billion in FY2018, almost 22 times the size of the P2P lending market in the United States and 447 times that of Japan’s.

Over 850+ fraudulent/ponzi lending platforms were exposed in FY 2018 alone.

Source: iiMedia Research

But the bad numbers don’t end here:

– The total loan volume amounted to 245.9 billion in Q12019, down -55.5% Y/Y.

– 85.7 in new loans were lent in March 2019, down -53.5% Y/Y.

– Principal balance of all loans: 8,029 CNY billion, down -3.6% Y/Y.

– sum of P2P lenders and borrowers, up 21%.

Chinese P2P lending platforms look to Southeast Asia amid industry purge back home (Technode), Rated: AAA

A slew of Chinese fintech and peer-to-peer (P2P) lending platforms are looking to more lenient markets in Southeast Asia (SEA), following a prolonged industry crackdown in China that has left the sector reeling.

Over the past year, China’s regulatory clampdown on risky financial practices has wiped out more than half of the country’s P2P lending platforms. As of May, just 900 survived, down from almost 1,900 recorded a year ago.

In early June, Indian daily newspaper the Economic Times reported that Chinese fintech companies, including WeShare, 9F Group, and CashBUS, are exploring investment opportunities in the country’s burgeoning online lending sector, particularly in the P2P lending space.

XW Bank Welcomed by IMF as One of 6 Outstanding FinTech Companies From China (Yahoo! Finance), Rated: A

The International Monetary Fund (IMF) welcomed 6 outstanding FinTech companies from China including Ant Financial, WeBank and XW Bank.

European Union

Snask helps Klarna to communicate its ‘smooth’ banking offer with off-the-wall film and photography (Creative Boom), Rated: A

When Stockholm studio Snask was approached by Klarna, one of Europe’s biggest banks, to help communicate how its revolutionary payment solutions make life easier for its customers, it set out to create seven “never-seen-before” worlds.

LHV Bank Integrates Estateguru Investments in Online Banking Dashboard (P2P-Banking), Rated: A

You might wonder why that is relevant as most readers are unlikely to be LHV Bank customers. LHV Bank is a bank in Estonia.

I think it is highly interesting, as it is – to my knowledge – the first time a bank has integrated p2p lending investments in its customer interface. So the LHV bank customers, not only see their accounts and stock depots, but also their Estateguru investments conveniently listed in their online bank dashboard. Much has been talked about what role could banks have in p2p lending (mere transaction banks? providing credit lines?) and also there is a lot of speculation if PSD2 (open banking) will help fintechs to seize the access to the customer from banks because they could control the user interface in the future. But this is actually a first step a bank takes in the opposite direction. By aggregating “non-bank” information inside the dashboard, they aim to make the banking interface more useful for the customers.

International

How Klarna is Helping the World Shop Like a Queen (Power Retail), Rated: AAA

Klarna is the latest Buy Now Pay Later (BNPL) app to sweep through the world. Originating in Sweden, the BNPL platform allows users to purchase goods and schedule repayments in timeslots. At this point in time, Klarna is the first and only BNPL platform that’s available in the U.S. It’s also available in the UK, Denmark, Norway, Belgium and many other European countries.

Australia

Five key ASIC findings on marketplace lending (Cuffelinks), Rated: AAA

In April 2019, the Australian Securities and Investments Commission (ASIC) released its third report on marketplace lending, the Survey of marketplace lending providers: 2017–18The report paints a clear picture of a once-nascent industry enjoying growth with new borrowing increasing by nearly 45% in the 2017-18 financial year. The report notes that this growth is moderating compared to the near doubling in funds borrowed the previous year (from $156 million to $300 million). By contrast, the Australian Bureau of Statistics (ABS) reports that overall personal lending has declined by an astonishing 24% in the 12 months to March 2019.

Source: Cuffelinks

The ASIC report found that the average interest rate charged for marketplace loans entered into during the 2017–18 financial year was 11.5%, up from 10.5% in the 2016–17 financial year.

Source: Cuffelinks
India

All you need to know about P2P lending and Commodities (India Times), Rated: AAA

Vinay Mathews, Founder and COO, Faircent and Sanjay Gakhar, Vice President, MCX talks about the benefits of investing via the P2P platform and Commodities, ET Wealth investment Workshop in Delhi Listen in!

Watch the video here.

Asia

Indonesian firms turn to P2P lenders for funds (Asia-First), Rated: AAA

Small companies in Asia-Pacific are tapping new funding sources, according to the Economist Intelligence Unit (EIU) study commissioned by Mastercard, with peer-to-peer (P2P) lending platforms in Indonesia reportedly posting USD1.4bn worth of transactions in 2018, an increase from USD20m in 2016.

Canada

Borrowell passes one million members, raises $ 20 million in new capital (Zone Startups), Rated: AAA

RFI alumni company Borrowell announced that it had reached significantly more than a million users, making it Canada’s largest consumer fintech company by that measure.

In addition to this membership milestone, Borrowell also confirmed that it has received $20 million in Series B funding.

AltFi Toronto Summit 2019 (AltFi), Rated: B

WED, 9 OCTOBER 2019, 08:30 – 17:30 EDT

Blind Bird tickets are now on sale at a 50% discount ahead of the Summit’s agenda being announced later this Summer.

Authors:

George Popescu
Allen Taylor

The post Thursday June 20 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 2 2019, Weekly News Digest

fintech deals india china

News Comments Today’s main news: OnDeck publishes Q1 financial results. LendingClub to move 350 jobs out of San Francisco to Utah. Salary Finance picks SoFi co-founder Dan Macklin as CEO. Klarna rolls out payment plans for physical stores in UK. HeZhong International sets terms for IPO. India tops China as Asia’s top fintech funding source. Today’s […]

The post Thursday May 2 2019, Weekly News Digest appeared first on Lending Times.

fintech deals india china

News Comments

United States

United Kingdom

European Union

International

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News Summary

United States

OnDeck Reports First Quarter 2019 Financial Results (PR Newswire), Rated: AAA

OnDeck today announced first quarter 2019 net income of $5.9 million, Adjusted Net Income of $8.3 million and gross revenue of $110.2 million.

Net income was $5.9 million, or $0.07 per diluted share, and decreased from the prior quarter’s net income of $14.0 million, 0.18 per diluted share, primarily due to higher loan loss provision, higher operating expenses and an accrual for income taxes.  Net income significantly improved from a loss of $1.9 million, or $0.03 per diluted share, in the year-ago period reflecting higher interest income from asset growth.

Adjusted Net Income was $8.3 million, or $0.10 per diluted share, and decreased from $15.9 million, or $0.20 per diluted share, in the prior quarter and increased from $6.4 million, or $0.08 per diluted share, in the year-ago period, reflecting the  aforementioned drivers.

Loans grew 3% sequentially and 19% from a year ago to $1.2 billion. Originations were $636 million, down from $658 million in the fourth quarter and up 8% from $591 million in the year-ago quarter.  The annual growth was broad-based with increases from both domestic and international operations as well as in both term loan and line of credit offerings. The average term loan size was unchanged sequentially at $53 thousand and was down from $58 thousand a year ago. Unit volume decreased 5% sequentially and increased 15% from the year-ago quarter.

Gross revenue was $110.2 million, essentially unchanged from the prior quarter, and up 22% from the year-ago quarter driven by higher interest income. Loan Yield of 35.6% decreased from 36.6% in the prior quarter reflecting a decline in portfolio performance while pricing was generally stable, and was unchanged from the year-ago quarter.

Interest expense of $11.3 million was essentially unchanged sequentially and decreased from a year ago despite a higher debt balance as borrowing rates improved. The Cost of Funds Rate continued to improve to 5.4%, a 20 basis point sequential improvement and a 140 basis point improvement from the year-ago quarter, as we refinanced debt at lower costs. First quarter financing activity included the extension and upsizing of four debt facilities aggregating to $595 million with improved terms.

Net Interest Margin was 29.5%, down from 30.0% the prior quarter as lower asset yields more than offset the impact from improved borrowing costs.  The increase in Net Interest Margin from 27.8% in the year-ago quarter was driven by improved borrowing costs.

Provision for loan losses increased to $43.3 million and the Provision Rate increased to 6.8%. The 15+ Day Delinquency Ratio increased 120 basis points sequentially to 8.7%.  Approximately half of the increase was in loans 15-89 days delinquent reflecting credit testing and economic trends, and the balance was in loans 90-days or more delinquent reflecting the change in our collection strategy for late-stage delinquencies. The Net Charge-off Rate increased to 12.2% and remains near the low end of our 12%-14% target range. The Reserve Ratio increased 30 basis points sequentially and 50 basis points from a year ago to 12.5%, reflecting portfolio quality trends and a higher proportion of 90-day plus delinquent loans, which have higher reserves.

Operating expenses increased from the comparable periods to $48.3 million, reflecting growth in the business and investments in our strategic initiatives, primarily technology and analytics. The Efficiency Ratio was 43.8%, up from 41.1% the prior quarter but improved from 49.3% in the year-ago quarter, while our Adjusted Efficiency Ratio* of 41.0% increased from 39.4% in the prior quarter and 40.1% in the year-ago quarter.

Provision for income taxes was $1.7 million compared to zero in 2018 when taxable income was completely offset by operating loss carryforwards. The effective tax rate was 24% and reflected a 21% U.S. federal rate, local and state income taxes, and losses in international subsidiaries.

Total assets increased 5% sequentially and 18% from a year ago to $1.2 billion primarily reflecting loan growth. Cash and cash equivalents was unchanged from year end at $60 million and decreased from $70 million a year ago. Other assets and other liabilities increased over the comparable periods as we recorded a net $28 million right-of-use asset in other assets and an equivalent increase in other liabilities stemming from the adoption of a new lease accounting standard. The 3% sequential increase in debt to $842 million was consistent with the growth in loans.

Total OnDeck stockholders’ equity of $309 million increased $10 million, or 3%, from year end and $45 million, or 17%, from a year ago.  Book value per diluted common share outstanding of $3.89 increased from $3.77 at year end and $3.40 a year ago.

Food Truck Satisfies as OnDeck Small Business of the Month (Yahoo! Finance), Rated: B

OnDeck today announced that Me So Hungry, a food truck business based in California, is its Small Business of the Month for April 2019. Owned by brothers Cory and Mike Ewing, Me So Hungry is the first food truck business to receive the OnDeck recognition.

LendingClub to slash San Francisco office, move 350 jobs to Utah (Mercury News), Rated: AAA

LendingClub, the online-loan marketplace, plans to wind down customer support operations in its home city of San Francisco and shift staff to Utah as it seeks to trim costs.

In an internal memo to staff reviewed by Bloomberg, Chief Executive Officer Scott Sanborn said LendingClub aims to have its teams completely out of San Francisco by December.

About 350 jobs will shift to Lehi, Utah, where LendingClub recently opened a new office.

SoFi Co-Founder Steps Back Onstage with Salary Finance (newKerala), Rated: AAA

Salary Finance announces SoFi co-founder Dan Macklin will be joining as CEO, Salary Finance Inc. (the US arm of the group).

Strong GDP Growth Continues (PeerIQ), Rated: AAA

Source: Bloomberg, PeerIQ

LendingTree Study Finds Tesla Drivers Have Highest Average Credit Scores (Yahoo! Finance), Rated: AAA

LendingTree today released its study ranking car brands by their buyers’ average credit score. Tesla buyers have the highest with a score of 740. Chrysler buyers have the lowest scores, with an average score of 656.

Key findings

  • Luxury brand buyers occupied the top spots. TeslaPorsche and Lexus lead with average credit scores of 740, 727 and 699 respectively.
  • Chrysler buyers had the lowest average credit score at 656, but it’s worth noting that this still falls in the “fair” range. It’s also right around the average credit score for all used car purchases.
  • For most auto makes, a credit score in the good range (670-739) was enough to be approved for an auto loan. Of the 30 different makes analyzed, 22 had an average approved credit score fall into that range

Read the full report here.

Understanding Sequential Pay Structures (DBRS), Rated: AAA

In a January 2019 newsletter, DBRS discussed the Evolution of the Shifting Interest Structure in residential mortgage-backed security (RMBS) transactions. Another common structure in RMBS transactions is the sequential pay structure.

The sequential pay structure is one of the most elementary and straight-forward structures in RMBS. Post-crisis, the sequential pay structure and its variations have been widely used in seasoned re-performing loan (RPL) and non-Qualified Mortgage (QM) transactions. Such structure largely benefits the senior classes in payment priorities over the subordinates.

Source: DBRS

Read the full report here.

Finitive Raises $ 6 Million Series Seed Round Led By Atomic Labs (PR Newswire), Rated: A

Finitive (www.finitive.com), a financial technology platform providing institutional investors with direct access to alternative lending investments, announced today that the firm raised approximately $6 million in a series seed financing. The round was led by Atomic Labs with participation from Ninepoint Partners – one of Canada’s leading private credit fund managers – as well as other investors and members of the management team.

Goldman Sachs, Regions help raise $ 55M for construction-lending fintech (American Banker), Rated: A

Built Technologies, a construction lending fintech platform, has raised $55 million in funding through Goldman Sachs and a handful of investors including Regions Financial, the company said Monday.

The Nashville, Tenn., company finished $31 million in series B funding through Goldman Sachs with the remainder amount raised by venture capitalists and Regions. The funding will help the 5-year-old fintech invest in research and development while building out its national client base, according to the firm’s CEO and co-founder, Chase Gilbert.

A busy month for fintech funding (American Banker), Rated: A

Novo, a challenger institution in the field of small-business banking, and the no-code platform provider Unqork held Series A funding rounds.

The online lender Upstart, which raised $50 million in a Series D round, says it can both lower loan loss rate and increase the number of customers underwritten.

Extend is building a platform to distribute digital cards by partnering with payment networks and card issuers. Another startup, MotoRefi, claims it can save consumers an average of $100 a month on vehicle refinancing by connecting them to trusted credit unions and community banks.

Moving Beyond Financial Literacy to Financial Empowerment (Lend Academy), Rated: A

Some of my thinking was prompted by this recent column in American Banker by Jennifer Tescher, the CEO of the Center for Financial Services Innovation (CFSI).

There are several companies in this space doing great work in creating high quality products: EvenPayActivTrueConnect and HoneyBee all offer options to employers that help their employees who need access to quick financing. Even has a groundbreaking deal with Walmart that has resulted in 300,000 employees using their pay advance app.

MoneyLion has four million users and they are focused on ending financial stress for all Americans by taking a holistic approach and being proactive in providing help. Dave helps the 30 million people who are hit by overdraft fees each year by advancing $75 from their next paycheck. Tally is a fully automated debt manager to help consumers get out of credit card debt.

Inside Varo Money’s three-year quest for a bank charter (American Banker), Rated: A

Just ask Colin Walsh, the co-founder and CEO of Varo Money, who began discussions with regulators three years ago to charter a national bank. Though the fintech won approval from the Office of the Comptroller of the Currency last year to move forward, it is still waiting on an answer from the Federal Deposit Insurance Corp.

Cross River Teams Up With RS2 To Offer New Digital Banking Experience (Crowdfund Insider), Rated: B

Cross River, a bank that delivers advanced financial and compliance products/services to the fintech industry, announced on Monday it has teamed up with RS2 to offer a new digital banking experience. Through the collaboration, Cross River and RS2 will provide merchants with a global payment experience for processing credit and debit card transactions, as well as digital banking for their workers and consumers.

Blend’s Erin Collard: Mortgages are the data superset of every other financial product (Tearsheet), Rated: A

Financial technology company Blend began building its platform by helping traditional institutions digitize mortgages, working with firms like Wells Fargo, US Bank and some regional banks and credit unions.

New York launches its own ‘mini CFPB’ (American Banker), Rated: A

New York has created a statewide financial protection division that will focus solely on corporate compliance and consumer issues, following similar efforts by New Jersey and Pennsylvania.

The New York State Department of Financial Services on Monday named Katherine A. Lemire, a former assistant U.S. attorney, to be executive deputy superintendent of the agency’s newly created Consumer Protection and Financial Enforcement division.

Think Finance to Pay CFPB $ 7 for Loan Violations (Bloomberg Law), Rated: A

A bankrupt payday lender will have to pay a $7 civil penalty to the Consumer Financial Protection Bureau over nearly $50 million in loans it issued in states where they were not legal, according to bankruptcy court filings.

Judge Brian Morris of the U.S. District Court for the District of Montana granted a stay in the CFPB’s litigation against Think Finance LLC on April 30, pending activity in the bankruptcy court.

Capital One drives auto finance deal with CarGurus (Finextra), Rated: A

CarGurus today announced a partnership with Capital One Auto Finance that will benefit both consumers and dealers.

The Most Powerful Women in Banking (American Banker), Rated: A

Camille Burckhart, Popular Inc.

Chief information and digital officer

Jacqueline Howard, Ally Financial

Senior director, corporate citizenship

Carrie Lichter, Fifth Third

Chief operational risk officer

Now you can pay for your flights in instalments with these booking companies (Lonely Planet), Rated: A

Online travel apps CheapOair and OneTravel will soon operate a new feature that allows customers to pay for their airfare in instalments. It means that customers don’t have to pay for the full cost of their flight upfront and can instead spread the cost out into more manageable payments that suit individual budgets, choosing between three-, six- or 12-month instalments. Fareportal, the company that operates CheapOair and OneTravel, said its partnering with online lender Affirm to introduce the new feature.

For example, a $300 (£230) purchase at 10% APR spread out over three months would cost $101.69 (£78) per month.

A recent study by the U.S. Chamber of Commerce revealed that Mississippi, Nebraska and Maine are the three states where small to medium businesses have grown the most year over year. This is according to sales in Amazon stores, specifically. More than half of the items sold in Amazon stores are from small to medium businesses.

The top 10 fastest-growing states breaks down as follows:

  1. Mississippi
  2. Nebraska
  3. Maine
  4. Texas
  5. Indiana
  6. Colorado
  7. North Dakota
  8. Vermont
  9. Wisconsin
  10. Missouri

The third-party physical product sales, which is what gets sold on Amazon stores primarily, passed $160 billion in 2018. Nearly 20% of rural small businesses generate 80% of their revenue by selling products online.

Unlocking the Digital Potential of Rural America (American Innovators), Rated: AAA

Unlocking the digital potential for rural small businesses across the country could add $47 billion to the U.S. GDP per year.

Increased adoption could grow annual revenues of rural small businesses by more than 21% over the next three years – the equivalent of $84.5 billion per year – with states in the South seeing the greatest benefit

Online tools and technology have the highest potential impact on rural small businesses with revenue under $100,000

Read the full report here.

Proof of Work: the slow but steady process of institutional adoption (The Block), Rated: A

Antonio from dYdX

dYdX is a decentralized exchange for margin trading, borrowing, lending, and eventually derivatives. dYdX allows traders to trustlessly short and get leverage on crypto assets.

  • DAI lending rate has been high due to strong demand to go leveraged long on ETH, peaking at over 77% APR returns for lenders over the weekend

Brendan from Dharma

Dharma is the easiest place to borrow and lend cryptocurrencies. It enables non-custodial peer-to-peer lending through smart contracts on Ethereum.

  • #ReFi with #DeFi continued in full force, leading to over 1.7m in borrow volume (nearly all Dai-denominated)

Lendio Franchise Opens in Erie to Expand Access to Capital for Local Businesses (Lendio), Rated: B

Lendio has announced the opening of a new Lendio franchise in Erie. Through the Lendio franchise program, John Fee, a local business owner himself, will help other entrepreneurs in the community apply for loans, review their options and secure funding, easing their financial hurdles.

Fundbox Selected By Brandwise To Power Net Terms For Suppliers, Agencies, And Retailers (Yahoo! Finance), Rated: B

Today Fundbox announced that the sales technology leader Brandwise and Fundbox have entered into an exclusive agreement whereas Fundbox will be Brandwise’s business-to-business (B2B) trade financing partner.  Brandwise will leverage Fundbox’s business capital platform to power financing terms within the Brandwise ecosystem of 250,000 retailers.

White Oak Commercial Finance Adds to its ABL Originations Team (Yahoo! Finance), Rated: B

White Oak Commercial Finance, LLC (“White Oak”), an affiliate of White Oak Global Advisors, LLC, announced today the appointment of Michael Goletz to Director of ABL Originations, covering the Midwest U.S. region. Mr. Goletz joins from WNB Specialty Finance, a division of Woodforest National Bank, where he was responsible for sourcing and structuring asset-based lending debt facilities ranging from $5 million to $25 million.

Urjanet Announces 2019 SPARK Award Winners (PR Web), Rated: B

Urjanet, the global leader in utility data aggregation, today announced the winners of its 2019 SPARK Awards: AvidXchange, Bright Power, SimpleBills and Guppy – four companies at the forefront of using utility bill data to better serve their customers, community partners, and the environment.

  • Most Innovative Use of Utility Data: SimpleBills. In addition to utility bill management, residents can use SimpleBills to report their utility bill payment history to credit bureaus through a unique opt-in service.
  • Leader in Financial Inclusion: Guppy. Through its partnership with Urjanet to acquire user-permissioned utility data, Guppy enables greater access to financial services for consumers, as well as background and ID checks for businesses, all while keeping the end user in control of their own data.
United Kingdom

Klarna gets physical: All UK payment methods now available in-store (Fintech Finance), Rated: AAA

Global payments provider Klarna has today announced that all its alternative payment options are available both in-store as well as online.

Klarna’s alternative payment options include:

  • Shoppers can pay later, up to 30 days after delivery of goods
  • Shoppers can pay for purchases in 3 equal instalments collected monthly
  • For higher-ticket items, consumers can use Klarna’s consumer finance in 6-36 month payment plans

£1bn debt fund launched for UK non-bank lenders (P2P Finance News), Rated: A

EUROPEAN Risk Capital (ERG) has launched a £1bn multi-client debt programme for UK-based, mid-market non-bank lenders.

The programme – titled ‘CreditStream’ – has a minimum deal target size of £10m, making it primarily suited to mid-sized lenders including bridging and development lenders, second charge mortgagees, consumer and SME funders, auto/equipment finance companies, and fintech lenders. The maximum deal size can be in excess of £100m.

Lendy execs launch wage advance firm (P2P Finance News), Rated: A

Companies House documents show Brooke and Kelly, whosecurrent role at Lendy remains a mystery, set up a firm called Copious Capital in July 2018.

Copious Capital’s launch product is Pay Me Today, described as an “antidote to payday lending,” which lets companies approve and arrange salary advances for staff who need access to money before payday.

Lendy’s operations manager Pamela Guillamón owns between 25 per cent and 50 per cent of Pay Me Today, according to Companies House documents.

Woodford’s peer-to-peer exodus continues with VPC sale (Citywire), Rated: A

Fund manager Neil Woodford has followed his £88 million sale of his stake in peer-to-peer lending trust P2P Global Investments (P2P) by offloading his entire £40 million stake in rival VPC Specialty Lending (VSLV).

Relendex ‘very keen’ to get behind modular housing (Development Finance Today), Rated: A

Relendex is “very keen” to get behind modular housing, according to its chief operating officer Max Lehrain.
Development Finance Today recently reported on the difficulties lenders faced when funding modular builds, however Fintan explained some ways Relendex was able to feel comfortable with supporting such schemes.

OakNorth continues supporting British SMEs with senior lending hires (Fintech Finance), Rated: B

OakNorth – the bank for entrepreneurs, by entrepreneurs – is bolstering its regional presence with the appointment of four senior team members in Manchester, the Midlands and the South West.

Christopher Swarbrick, who has 18 years’ banking experience, joins as a Senior Director, Debt Finance. 

Christopher Richards joins from RBS where he spent 11 years and most recently held the role of Senior Relationship Manager, managing a portfolio of 40 complex banking relationships.

Mother tells of ‘devastating’ impact caused by collapse of Eridge firm London Capital & Finance (Times Local News), Rated: B

THE mother of two sons, one of whom is autistic, has told of the impact on their lives brought about by the collapse of a Tunbridge Wells based investment firm.

Around 11,500 people are set to lose a total £237million following the demise of the company based at Eridge Park.

LCF were selling unregulated mini-bonds, offering investors an eight per cent return for money that was purportedly being lent to a range of businesses.

China

HeZhong International sets terms for $ 5 million US IPO (Nasdaq), Rated: AAA

HeZhong International Holding, which operates a peer-to-peer lending marketplace in China, announced terms for its US IPO on Wednesday.

The Shenzhen, China-based company plans to raise $5 million by offering 1.3 million shares at a price of $4. At $4, HeZhong International Holding would command a market value of $55 million.

European Union

Which digital banks have the best overdrafts? (AltFi), Rated: AAA

Starling Bank

The London-based challenger bank charges 15 per cent equivalent annual rate for arranged overdrafts.

Charges £2 a month for unarranged overdrafts as well as the standard rate of interest. Will waive charges if your monthly overdraft interest comes to less than 10p for the month. Operates a monthly fee cap of £2.

Runner up

Monzo

Customers with arranged overdrafts are charges a 50p charge every day your account is overdrawn by more than £20, up to a maximum charge of £15.50 a month.

The Rest

B

The digital lender, launched by Clydesdale and Yorkshire Banks in 2016, charges a 12.5 per cent equivalent annual rate on arranged overdrafts. On top of this it charges a fee of £6 a month. The bank charges £6 a day for unarranged overdrafts.

N26

The Berlin-based app-only bank, with more than 2 million customers in 24 countries, said it will launch an overdraft facility for its 200,000 UK account holders “soon.”

55 Investors Become the Co-Owners of a Building in Western Switzerland (Yahoo! Finance), Rated: A

Foxstone (www.foxstone.ch) announces the acquisition, in crowdinvestment, of a residential building in Concise (VD) by 55 investors, of all ages and all backgrounds. They acquired a share of the building in co-ownership with a minimum amount of CHF 50’000.-

The total amount raised in co-ownership was CHF 3,250,000 for an acquisition price of the building of CHF 6,800,000, the remaining balance being financed by a mortgage. The net return on equity is 6.53%, which represents an annual return of CHF 3,265 for a CHF 50’000 investment. The Régie du Rhône takes care of the day-to-day management of the building.

How BBVA overhauled its mobile banking app (American Banker), Rated: A


International

Global fintech investment doubled in 2018 (HousingWire), Rated: AAA

Total global fintech investment increased from $50.8 billion in 2017 to a full $111.8 billion in 2018, according to KPMG’s The Pulse of Fintech, a biannual report that highlights key trends in fintech across the globe.

But the report showed something interesting when it comes to fintech – payments and lending continued to attract the most significant investment dollars globally.

China’s fintech funding dipped significantly in Q1 2019 (Business Insider), Rated: AAA

Global fintech funding was down 13% from $7.3 billion in Q4 2018 to $6.3 billion in Q1 2019, according to a new report from CB Insights.

However, deal numbers increased from 427 in Q4 2018 to 445 in Q1 2019, despite early stage funding dipping, while mid- and late-stage funding increased. Moreover, funding actually ticked up 1.5% year-over-year (YoY) from $6.2 billion in Q1 2018.

P2P Industry is Likely to Shine Despite Troubles in China (Learn Bonds), Rated: A

According to a PWC report, the U.S. P2P market is likely to reach $150 billion by 2025. Another report from Allied Market Research indicates that Peer to Peer (P2P) market could grow at a CAGR of 51.5% from 2016 to 2022.

Efma White Paper Covers Potential of SME Ecosystem (Monitor Daily), Rated: A

Drawing insight from recent research, case studies and observations from bankers working closely with SMEs, this digest outlines the main challenges facing banks today when trying to attract SME customers, such as intense competition from new entrants like Alibaba-backed online lender MYbank and Tencent-backed WeBank in China. In other markets, like the UK, 63% of financial services players in 2018 didn’t exist a decade before.

Authors of the 2019 Geneva Report on the World Economy seek market participant input (Fintech Policy), Rated: B

The topic of this year’s Geneva Report on the World Economy will be “the future of banking.”

The authors of the report (Kathryn Petralia, Kabbage; Thomas Philippon, NYU Stern School of Business; Tara Rice, Bank for International Settlements and Nicolas Veron, Peterson Institute for International Economics and Bruegel) are asking for input from market participants.

Asia

India unseats China as Asia’s top fintech funding source (TechCrunch), Rated: AAA

China’s massive fintech industry took a beating in recent months as the government continued to wind down online lending nationwide, rattling investor confidence.

Funding for fintech startups shrank 87.6 percent year-over-year to $192.1 million during the first quarter of 2019, a new reportfrom data provider CB Insights shows. India, which recorded $285.6 million raised for fintech startups in the period, overtook China to be Asia’s top fundraising hub for financial technology. Both countries clocked in 29 fintech deals, suggesting a cooling investor sentiment in China which saw its height of 76 deals just three quarters ago.

Source: CB Insights
India

Coming Together of Traditional Lenders and Fintech Players, Creating Better Opportunities (Entrepreneur), Rated: AAA

Fintech driven alternative lending is the second most funded and one of the fastest growing segments in the Indian fintech space. At last count, there were over 20 plus digital, alternative lending companies, each with their version of the truth, and probably another twenty in the stealth mode.

One thing common with most new age lending companies is that they rightly understand that they have a better chance of succeeding by collaborating with the existing lenders like Banks and NBFCs.

Canada

MOGO: A Rapidly Growing Canadian Fintech Provider (Yahoo! Finance), Rated: AAA

Mogo (MOGO) is a rapidly growing Canadian fintech company with over 800K members that generates revenues from a series of innovative products to help consumers manage & control their financial health.

  • Mogo is a high growth disruptor. Was the company not fighting the headwinds of strategically exiting the short-term loan business that it phased out throughout 2018, it would have shown 71% revenue growth on what it calls “core revenues” or revenues of continuing operations. Core revenue, excludes the company’s legacy short term lending revenue which Mogo fully exited at the end of Q3 2018. In 2018, the company generated $61 million in total revenues representing 26% growth, spurred by a doubling of its subscription and services business to $27 million. In the most recently reported quarter, Q4 2018, Mogo’s core revenue increased 75% versus the same period in 2017 with Subscription & Services revenue having its fourth consecutive quarter of at least 100% year over year growth. In 2018, it added more than 210,000 new members to reach 756,000 members on December 31, 2018 (up 39%), and on March 21st it announced it has surpassed 800,000 members.
  • Based on a combined value of the company’s lending business and its subscription services and fee generation business we believe the company is worth $7.67 per share when compared with other companies in these spaces.
Africa

The Legal and Regulatory Framework Governing Financial Technology (Fintech) in Nigeria (Lexology), Rated: AAA

FinTech is also gaining traction in the areas of lending and alternative financing (such as peer-to-peer lending, business-to-consumer lending, and so on), as well as financial and insurance products.

Pursuant to the Banks and Other Financial Institutions Act, Chapter B3 LFN 2004, an entity that wishes to provide marketplace lending may do so by registering as a bank or Other Financial Institution (“OFI”).

The use of airtime for the repayment of loans to a mobile lender could constitute a premium rated service, the provision of which requires the approval of the NCC.

Authors:

George Popescu
Allen Taylor

The post Thursday May 2 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 10 2019, Daily News Digest

Purchase APR

News Comments Today’s main news: P2P investors outperformed FTSE 100 in 2018. U.S. government shut down hurts SBA lending at banks. Monzo, Funding Circle put UK in tech investment lead. Robinhood closes in on UK launch. N26 valuation at $2.7B. Today’s main analysis: Mortgage offer report for December 2018. Today’s thought-provoking articles: New bank credit fell below 1%. Nexo publishes […]

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Purchase APR

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Government Shutdown Hurts SBA Lending at Banks in December (AP News), Rated: AAA

With the U.S. Small Business Administration (SBA) closed for the past two weeks because of the partial government shutdown, SBA loan approvals dropped in December 2018 at banks and other institutions. Despite this setback, small business loan approval rates for big banks reached another record high (27%) in December 2018, according to the Biz2Credit Small Business Lending Index released today.

Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals slipped below the half-way mark to 49.9% following the month of November when 50.2% were approved.

Loan approval rates among alternative lenders dropped from 56.7% in November to 56.6% in December.

Strong Employment Report; PeerIQ’s Benchmarking Application (PeerIQ), Rated: AAA

Real new bank credit fell below 1% at the end of 2018. This is a mixed indicator of a recession as there have been 9 recessions since the 1950s after real new bank credit has fallen below 1%, but also about 6 false signals as well.

Source: Federal Reserve, BEA, PeerIQ

LendingTree Releases Monthly Mortgage Offer Report for December (PR Newswire), Rated: AAA

  • December’s best mortgage offers for borrowers with the best profiles had an average APR of 4.35% for conforming 30-year, fixed-rate purchase loans, down from 4.66% in November. The APR on refinance loan offers also decreased from 4.63% in November to 4.34%. We consider people with the best credit profiles to be those in the 95th percentile of borrowers who received the best mortgage offers through the LendingTree marketplace, which allows users to compare offers from multiple mortgage lenders.
  • Mortgage rates vary depending upon parameters including credit score, loan-to-value ratio, income and property type.
  • For the average borrower, the purchase APR for conforming 30-year, fixed-rate purchase loans offered on LendingTree’s platform was 5.17%, down 18 basis points from November. The loan note rate of 5.05% was down 19 basis points from November. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.
  • Consumers with the highest credit scores (760+, representing the 65th percentile of borrowers) received an average APR of 4.98%, versus 5.33% for consumers with scores of 680 to 719. The APR spread of 65 basis points between these score ranges is higher than it was in November. For the average purchase loan amount of $224,609, the spread represents over $17,000 in additional costs for borrowers with lower credit scores over 30 years. The additional costs result from higher interest rates, larger fees or a combination of the two.
  • For the average borrower, the APR for conforming 30-year, fixed-rate refinance loans decreased 24 basis points from November to 5.09%. At 4.93% and 5.21%, respectively, the spread between credit score brackets (760+ and 680-719) was 28 basis points. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $239,329.
  • Average proposed purchase down payments fell to $54,217, a decline of nearly $6,000.
Source: LendingTree
Source: LendingTree

To view the Mortgage Offers Report, visit: www.lendingtree.com/home/mortgage-offers-report-december-2018.

Minority Entrepreneurs Are Thriving in These 10 (Mostly Coastal) U.S. Cities (Inc), Rated: AAA

San Francisco and San Jose, California, are not only home to Big Tech’s all-stars, they’re also the top two spots where minority entrepreneurs are thriving.

Over 42 percent of all minority-owned companies in these cities make at least $500,000 in annual revenue and more than half have been in business for six years or more, according to a new report released Tuesday by LendingTree, an online loan marketplace based in Charlotte, North Carolina. The study uses Census data to gauge how minority business owners with employees fare in the 50 largest metro areas in the U.S. It measures performance based on metrics including a company’s longevity, revenue, and whether a city’s minority population is proportionally represented in business ownership demographics, dubbed the “parity index.”

Source: LendingTree

Lending Startup Affirm to Test High-Interest Savings Accounts (Cheddar), Rated: A

Affirm is making good on its commitment to become a full-service bank. The lending startup led by PayPal co-founder Max Levchin is introducing no-free savings accounts through a bank partner, initially with a 2 percent annual interest rate and no minimum balance, Cheddar has learned.

Kabbage Data Reveals One-Third of Successful Small Businesses Started with Less Than $ 5,000 (PRWeb), Rated: A

New data released today by Kabbage, Inc., a global financial services, technology and data platform serving small businesses, shows that the majority of successful entrepreneurs began their businesses with little cash flow and short run rates. Polling 600 thriving U.S. small business owners, the Kabbage survey found 58 percent of small businesses started with less than $25,000 and one-third started with less than $5,000.

Kabbage vs. Fundbox: Which Line of Credit is Best For Your Business? (Nav.com), Rated: A

Kabbage Pricing Example

Let’s say you borrow $25,000 and are approved for a 6 month loan with a fee of 3% (fees range from 1.5% to 10%). Using Kabbage’s calculator, you will pay $2750 in total fees if you repay the loan on schedule.

To translate that cost into an APR, you can use Nav’s free calculator and enter the loan amount plus the amount of the first two payments ($4917 each) and the amount of payments 3-6 ($4479 each). This results in an APR of 37.5%.

Fundbox

Let’s say you borrow $25,000 for 24 weeks and you are approved at their lowest fee of $4.66%. Using Fundbox’s calculator, your weekly payments will be $1135.31 and you’ll pay a total of $2247.50 in fees. This results in an APR of 39%.

LendingFront Raises $ 4 Million to Help Lenders Modernize Small Business Lending Operations (PR Web), Rated: A

LendingFront, a small business lending software provider, today announced it has raised a $4 million Series A funding round led by Information Venture Partners with participation from Newark Venture PartnersRevel PartnersContour Venture Partners and existing investors Struck CapitalValueStream Ventures and Las Olas VC.

The funding will be used to help deliver LendingFront’s end-to-end white label software platform to more banks and financial institutions, giving them access to the most sophisticated technology in the market for originating, underwriting and servicing small business credit – a $600b+ market, according to the U.S. Small Business Administration.

Cross River, Stripe partnership targets marketplace economy (Bankless Times), Rated: A

Cross River, a provider of banking services for fintech companies, today announced a partnership with Stripe to help those in the marketplace economy—such as workers in ride sharing, food delivery, and other freelance occupations real-time access to earnings using push-to-card payments.

Fintech APIs Consolidate As Plaid Buys Quovo In $ 200M Deal (Benzinga), Rated: A

Fintech startup Plaid is negotiating a $200 million acquisition of rival Quovo, according to a Tuesday announcement. The merger would unite similar application programming interfaces connecting bank accounts to other fintech apps, such as Venmo, Coinbase and Robinhood.

The deal not only expands Plaid’s reach beyond its present 25 percent of U.S. financial accounts, but also positions the firm to penetrate the brokerage and wealth management spaces. Quovo’s traditional customers include Vanguard, Stifel Financial Corp SF 0.02%, John Hancock, Betterment and Wealthfront.

Top 7 Short Term Investment Ideas For Beginners (FX Daily Report), Rated: A

Often touted as direct lending, peer-to-peer (P2P) lending has taken the financial industry by storm. Although this short term investment option has only been for the last one decade, it has already managed to create a reputation of its own with the flexibility and diversification options it brings for lenders. The idea of P2P lending is simple: it is a simple investment option that is designed to bring investors and borrowers together on a single lending platform. These platforms offer relatively higher returns because of their low operating costs. Additionally, they also get to make some profits every time a borrower makes their repayment.

YieldStreet’s Alternative Investment Marketplace Booms In Times Of Volatility (Forbes), Rated: B

When YieldStreet launched a $6.45 million offering on its marketplace, it expected a lot of investors to get in on the deal. After all, they had about seventy-two hours to digest all the important aspects of the company and the offering.

CAN Capital Has New CEO, Hires Edward Siciliano to Lead Online Lender (Crowdfund Insider), Rated: B

CAN Capital, an online lender providing financing to SMEs, has a new Chief Executive Officer. Announced in a release yesterday, the Atlanta based Fintech has appointed Edward J. Siciliano as CEO.

SS&C Releases Precision LM, Integrated Loan Servicing and Accounting Platform (SS&C), Rated: B

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), today announced the release of Precision LM 4.0, the newest version of the company’s commercial/multifamily loan servicing solution.

United Kingdom

Zopa: P2P investors outperformed the FTSE 100 in 2018 (P2P Finance Newes), Rated: AAA

The consumer lending platform compared the returns from investing £15,000 equally across a FTSE 100 exchange traded fund (ETF), a cash ISA or a Zopa Plus account last year.

By investing £5,000 in Zopa Plus, investors could have grown their money by up to 5.2 per cent or £260 in 2018, 13.5 per cent more than if they’d invested in a product tracking the stock market, Zopa said.

Monzo and Funding Circle help put UK in lead for tech investment (Independent), Rated: AAA

Britain’s tech sector saw more venture capital investment and stock market flotations in 2018 than any other European country, as the likes of Monzo and Funding Circle took centre stage.

UK tech companies attracted £2.49 billion in venture capital investment last year – far more than Germany in second place with £1.38 billion and France in third place with £1.03 billion, according to data from London & Partners and PitchBook.

The figures also showed London was by far the UK hub for investment, accounting for £1.8 billion or 72% of the country’s venture capital raised in 2018.

UK online bank Monzo hires financial market veteran as chairman – source (Reuters), Rated: A

Robinhood is getting closer to a UK launch (Business Insider), Rated: AAA

US-based commission free trading app Robinhood has quietly begun recruiting for a new office in London in preparation for an eventual launch in the UK, reports TechCrunch.

The $5.6 billion fintech is hiring for multiple positions in the city, including recruitment, operations, and marketing, according to sources familiar with the matter cited by the outlet. It’s also reportedly seeking to fill compliance and product positions, suggesting the fintech’s strategy is focused on significant localization and product market fit for its UK expansion.

Source: Business Insider

Apps more popular than online banking in UK (Finextra), Rated: A

According to the study, which was commissioned by financial services review website Smart Money People, 39.2% of customers stated that their preferred means of dealing with banks is via apps, up from 30% in 2017.

In contrast, the preference for online banking has fallen from 45% in 2017 to 38.6% putting it below that of banking apps for the first time.

The survey also shows that the preference for digital channels (both mobile apps and online services) has grown slightly from 75% to 78% in the last year.

LendInvest partners with Mortgage Brain to bring BTL loans to wider market (Property Funds World), Rated: A

LendInvest, a specialist property finance lender, has partnered with mortgage technology expert, Mortgage Brain, to bring its Buy-to-Let (BTL) product to a wider audience of intermediaries.

This partnership follows recent changes to LendInvest’s BTL product in which it dropped its headline five-year fixed rate to 3.60 per cent with the ICR being assessed at the product pay rate, of 3.60 per cent. The lender also reduced its product fees to 1 per cent for all standard property and HMO mortgages.

Britain’s tech sector clocks up £2.5billion worth of new investment in 2018 as it comfortably tops the table of European countries (This is Money), Rated: A

UK based tech companies attracted £2.49billion in venture capital investment last year, according to data compiled by London & Partners and PitchBook.

This comfortably topped Germany in second place with £1.38billion and more than doubled third place France’s £1.03billion.

The data shows investment into the UK’s AI sector peaked at £736million in 2018, up a chunky 47 per cent on 2017.

China

China’s HNA touts assets for sale as funding crunch intensifies (Reuters), Rated: AAA

China’s indebted HNA Group met bankers on Tuesday to tout the latest assets that the sprawling conglomerate is putting on the block as it looks to raise funds and stave off an intensifying cash crunch.

The range of assets, spanning a hotel project in frozen Harbin and stakes in struggling online lender Dianrong, insurer Bohai Life and brokerage HNA Futures, underscores how the group is shedding almost all non-core businesses as it pares back an empire that once spread from Deutsche Bank to Hilton Worldwide.

China’s New Negative List Targets Unified Market Access (China Briefing), Rated: A

For example, ride hailing operations are under the ‘restricted’ category. Many claim that this is an official response to the 2018 Didi scandals, while illegal financial activities and internet-related business activities are likely designed to target the problems in peer-to-peer lending platforms that emerged earlier in 2018.

European Union

German mobile bank N26 joins Europe’s unicorn club with $ 2.7 billion valuation (CNBC), Rated: AAA

German fintech firm N26 said Thursday it has raised $300 million from investors in a round of funding — valuing the online lender at $2.7 billion.

That not only puts the company among the ranks of Europe’s unicorns — or private start-ups valued at more than $1 billion. It also makes it one of the most valuable unicorns in the continent.

TrueLayer launches data API in Germany (Fintech Futures), Rated: A

Ahead of the one-year anniversary of open banking (it was unleashed on 13 January 2018), TrueLayer says its data API will mean that businesses, especially fintechs, will be able to avoid “costly and time-consuming integrations of the dozens of fragmented banking APIs in Germany and across Europe”.

International

Nexo, the World’s Largest Crypto Lender, Publishes Interim Report (Sociable.co), Rated: AAA

Nexo is sharing the interim report detailing the dividend distribution of $912,071.00 to eligible NEXO Token Holders that occurred on December 15, 2018.

In just six months, Nexo’s crypto lending model has generated a net profit of $3,040,239.

Source: Nexo

Read the full report here.

Crypto Lenders Thriving Despite The Ongoing Bear Market (Use the Bitcoin), Rated: A

The ongoing crypto winter has meant that many businesses are struggling for funding. Some have resulted in shutting down while others lay off staff. However, one section of the industry is thriving; crypto lenders.

Crypto lenders that are focused on the crypto industry say that they are finding strong demand for their services from individuals that are not willing to sell their crypto coins at depressed prices. Also, there is demand from big investors that are eager to borrow coins for short selling.

Australia

Crypto-Lending Business Helio Lending Launches Regulated Investment Fund (Investment Revolution), Rated: AAA

Australian-based, government-regulated cryptocurrency lender, Helio Lending today confidently launched a new arm of its business, the Helio Secured Income Fund —  a regulated Managed Investment Scheme with an Australian Financial Services Licence — investors are now able to indirectly invest in cryptocurrency assets while targeting a return of 9.75% a year, net of all fees.

India

IndiaMoneyMart Receives NBFC-P2P Certification From RBI (The Week), Rated: AAA

The accreditation will enable IndiaMoneyMart to expand operations and target loan disbursals worth INR 100 Cr by FY 2018-19. It is an encouraging milestone to enable IndiaMoneyMart (IMM) gain traction among investors seeking for alternative asset class and boost their sentiments. The product offers an opportunity to earn steady cash flow every month to the lenders as well as compound their earnings by reinvesting.

Southeast Asia

Indonesia’s KinerjaPay gets US$ 200 million investment deal from local conglomerate (KrAsia), Rated: AAA

Indonesian mobile payments app KinerjaPay raised US$200 million investment from Wahana Group, a Surabaya-based conglomerate. The investment consists of a subscription of $100 million worth of shares in KinerjaPay’s Series F round and an additional $100 million in shares of the company’s Series G Convertible Preferred Stock. The company is listed on the US OTC market under the ticker KPAY.

Africa

#BizTrends2019: 6 trends in fintech and its regulation (Biz Community), Rated: AAA

In peer-to-peer lending, I think we will see growth beyond remittances and micro-donations to much larger-scale crowdfunding and insurance-type products, including short-term risk insurance products and co-investment structures (like mobile stokvels) on digital platforms. These types of products hold the promise (and risks) of consumers of financial services developing and administering such platforms themselves rather than the big, established players. Similarly, consumer development of payment systems is receiving a lot of attention in the international market and, increasingly, in South Africa. This is something to watch in 2019.

Authors:

George Popescu
Allen Taylor

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Thursday January 10 2019, Daily News Digest

Purchase APR

News Comments Today’s main news: P2P investors outperformed FTSE 100 in 2018. U.S. government shut down hurts SBA lending at banks. Monzo, Funding Circle put UK in tech investment lead. Robinhood closes in on UK launch. N26 valuation at $2.7B. Today’s main analysis: Mortgage offer report for December 2018. Today’s thought-provoking articles: New bank credit fell below 1%. Nexo publishes […]

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Purchase APR

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Government Shutdown Hurts SBA Lending at Banks in December (AP News), Rated: AAA

With the U.S. Small Business Administration (SBA) closed for the past two weeks because of the partial government shutdown, SBA loan approvals dropped in December 2018 at banks and other institutions. Despite this setback, small business loan approval rates for big banks reached another record high (27%) in December 2018, according to the Biz2Credit Small Business Lending Index released today.

Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals slipped below the half-way mark to 49.9% following the month of November when 50.2% were approved.

Loan approval rates among alternative lenders dropped from 56.7% in November to 56.6% in December.

Strong Employment Report; PeerIQ’s Benchmarking Application (PeerIQ), Rated: AAA

Real new bank credit fell below 1% at the end of 2018. This is a mixed indicator of a recession as there have been 9 recessions since the 1950s after real new bank credit has fallen below 1%, but also about 6 false signals as well.

Source: Federal Reserve, BEA, PeerIQ

LendingTree Releases Monthly Mortgage Offer Report for December (PR Newswire), Rated: AAA

  • December’s best mortgage offers for borrowers with the best profiles had an average APR of 4.35% for conforming 30-year, fixed-rate purchase loans, down from 4.66% in November. The APR on refinance loan offers also decreased from 4.63% in November to 4.34%. We consider people with the best credit profiles to be those in the 95th percentile of borrowers who received the best mortgage offers through the LendingTree marketplace, which allows users to compare offers from multiple mortgage lenders.
  • Mortgage rates vary depending upon parameters including credit score, loan-to-value ratio, income and property type.
  • For the average borrower, the purchase APR for conforming 30-year, fixed-rate purchase loans offered on LendingTree’s platform was 5.17%, down 18 basis points from November. The loan note rate of 5.05% was down 19 basis points from November. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.
  • Consumers with the highest credit scores (760+, representing the 65th percentile of borrowers) received an average APR of 4.98%, versus 5.33% for consumers with scores of 680 to 719. The APR spread of 65 basis points between these score ranges is higher than it was in November. For the average purchase loan amount of $224,609, the spread represents over $17,000 in additional costs for borrowers with lower credit scores over 30 years. The additional costs result from higher interest rates, larger fees or a combination of the two.
  • For the average borrower, the APR for conforming 30-year, fixed-rate refinance loans decreased 24 basis points from November to 5.09%. At 4.93% and 5.21%, respectively, the spread between credit score brackets (760+ and 680-719) was 28 basis points. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $239,329.
  • Average proposed purchase down payments fell to $54,217, a decline of nearly $6,000.
Source: LendingTree
Source: LendingTree

To view the Mortgage Offers Report, visit: www.lendingtree.com/home/mortgage-offers-report-december-2018.

Minority Entrepreneurs Are Thriving in These 10 (Mostly Coastal) U.S. Cities (Inc), Rated: AAA

San Francisco and San Jose, California, are not only home to Big Tech’s all-stars, they’re also the top two spots where minority entrepreneurs are thriving.

Over 42 percent of all minority-owned companies in these cities make at least $500,000 in annual revenue and more than half have been in business for six years or more, according to a new report released Tuesday by LendingTree, an online loan marketplace based in Charlotte, North Carolina. The study uses Census data to gauge how minority business owners with employees fare in the 50 largest metro areas in the U.S. It measures performance based on metrics including a company’s longevity, revenue, and whether a city’s minority population is proportionally represented in business ownership demographics, dubbed the “parity index.”

Source: LendingTree

Lending Startup Affirm to Test High-Interest Savings Accounts (Cheddar), Rated: A

Affirm is making good on its commitment to become a full-service bank. The lending startup led by PayPal co-founder Max Levchin is introducing no-free savings accounts through a bank partner, initially with a 2 percent annual interest rate and no minimum balance, Cheddar has learned.

Kabbage Data Reveals One-Third of Successful Small Businesses Started with Less Than $ 5,000 (PRWeb), Rated: A

New data released today by Kabbage, Inc., a global financial services, technology and data platform serving small businesses, shows that the majority of successful entrepreneurs began their businesses with little cash flow and short run rates. Polling 600 thriving U.S. small business owners, the Kabbage survey found 58 percent of small businesses started with less than $25,000 and one-third started with less than $5,000.

Kabbage vs. Fundbox: Which Line of Credit is Best For Your Business? (Nav.com), Rated: A

Kabbage Pricing Example

Let’s say you borrow $25,000 and are approved for a 6 month loan with a fee of 3% (fees range from 1.5% to 10%). Using Kabbage’s calculator, you will pay $2750 in total fees if you repay the loan on schedule.

To translate that cost into an APR, you can use Nav’s free calculator and enter the loan amount plus the amount of the first two payments ($4917 each) and the amount of payments 3-6 ($4479 each). This results in an APR of 37.5%.

Fundbox

Let’s say you borrow $25,000 for 24 weeks and you are approved at their lowest fee of $4.66%. Using Fundbox’s calculator, your weekly payments will be $1135.31 and you’ll pay a total of $2247.50 in fees. This results in an APR of 39%.

LendingFront Raises $ 4 Million to Help Lenders Modernize Small Business Lending Operations (PR Web), Rated: A

LendingFront, a small business lending software provider, today announced it has raised a $4 million Series A funding round led by Information Venture Partners with participation from Newark Venture PartnersRevel PartnersContour Venture Partners and existing investors Struck CapitalValueStream Ventures and Las Olas VC.

The funding will be used to help deliver LendingFront’s end-to-end white label software platform to more banks and financial institutions, giving them access to the most sophisticated technology in the market for originating, underwriting and servicing small business credit – a $600b+ market, according to the U.S. Small Business Administration.

Cross River, Stripe partnership targets marketplace economy (Bankless Times), Rated: A

Cross River, a provider of banking services for fintech companies, today announced a partnership with Stripe to help those in the marketplace economy—such as workers in ride sharing, food delivery, and other freelance occupations real-time access to earnings using push-to-card payments.

Fintech APIs Consolidate As Plaid Buys Quovo In $ 200M Deal (Benzinga), Rated: A

Fintech startup Plaid is negotiating a $200 million acquisition of rival Quovo, according to a Tuesday announcement. The merger would unite similar application programming interfaces connecting bank accounts to other fintech apps, such as Venmo, Coinbase and Robinhood.

The deal not only expands Plaid’s reach beyond its present 25 percent of U.S. financial accounts, but also positions the firm to penetrate the brokerage and wealth management spaces. Quovo’s traditional customers include Vanguard, Stifel Financial Corp SF 0.02%, John Hancock, Betterment and Wealthfront.

Top 7 Short Term Investment Ideas For Beginners (FX Daily Report), Rated: A

Often touted as direct lending, peer-to-peer (P2P) lending has taken the financial industry by storm. Although this short term investment option has only been for the last one decade, it has already managed to create a reputation of its own with the flexibility and diversification options it brings for lenders. The idea of P2P lending is simple: it is a simple investment option that is designed to bring investors and borrowers together on a single lending platform. These platforms offer relatively higher returns because of their low operating costs. Additionally, they also get to make some profits every time a borrower makes their repayment.

YieldStreet’s Alternative Investment Marketplace Booms In Times Of Volatility (Forbes), Rated: B

When YieldStreet launched a $6.45 million offering on its marketplace, it expected a lot of investors to get in on the deal. After all, they had about seventy-two hours to digest all the important aspects of the company and the offering.

CAN Capital Has New CEO, Hires Edward Siciliano to Lead Online Lender (Crowdfund Insider), Rated: B

CAN Capital, an online lender providing financing to SMEs, has a new Chief Executive Officer. Announced in a release yesterday, the Atlanta based Fintech has appointed Edward J. Siciliano as CEO.

SS&C Releases Precision LM, Integrated Loan Servicing and Accounting Platform (SS&C), Rated: B

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), today announced the release of Precision LM 4.0, the newest version of the company’s commercial/multifamily loan servicing solution.

United Kingdom

Zopa: P2P investors outperformed the FTSE 100 in 2018 (P2P Finance Newes), Rated: AAA

The consumer lending platform compared the returns from investing £15,000 equally across a FTSE 100 exchange traded fund (ETF), a cash ISA or a Zopa Plus account last year.

By investing £5,000 in Zopa Plus, investors could have grown their money by up to 5.2 per cent or £260 in 2018, 13.5 per cent more than if they’d invested in a product tracking the stock market, Zopa said.

Monzo and Funding Circle help put UK in lead for tech investment (Independent), Rated: AAA

Britain’s tech sector saw more venture capital investment and stock market flotations in 2018 than any other European country, as the likes of Monzo and Funding Circle took centre stage.

UK tech companies attracted £2.49 billion in venture capital investment last year – far more than Germany in second place with £1.38 billion and France in third place with £1.03 billion, according to data from London & Partners and PitchBook.

The figures also showed London was by far the UK hub for investment, accounting for £1.8 billion or 72% of the country’s venture capital raised in 2018.

UK online bank Monzo hires financial market veteran as chairman – source (Reuters), Rated: A

Robinhood is getting closer to a UK launch (Business Insider), Rated: AAA

US-based commission free trading app Robinhood has quietly begun recruiting for a new office in London in preparation for an eventual launch in the UK, reports TechCrunch.

The $5.6 billion fintech is hiring for multiple positions in the city, including recruitment, operations, and marketing, according to sources familiar with the matter cited by the outlet. It’s also reportedly seeking to fill compliance and product positions, suggesting the fintech’s strategy is focused on significant localization and product market fit for its UK expansion.

Source: Business Insider

Apps more popular than online banking in UK (Finextra), Rated: A

According to the study, which was commissioned by financial services review website Smart Money People, 39.2% of customers stated that their preferred means of dealing with banks is via apps, up from 30% in 2017.

In contrast, the preference for online banking has fallen from 45% in 2017 to 38.6% putting it below that of banking apps for the first time.

The survey also shows that the preference for digital channels (both mobile apps and online services) has grown slightly from 75% to 78% in the last year.

LendInvest partners with Mortgage Brain to bring BTL loans to wider market (Property Funds World), Rated: A

LendInvest, a specialist property finance lender, has partnered with mortgage technology expert, Mortgage Brain, to bring its Buy-to-Let (BTL) product to a wider audience of intermediaries.

This partnership follows recent changes to LendInvest’s BTL product in which it dropped its headline five-year fixed rate to 3.60 per cent with the ICR being assessed at the product pay rate, of 3.60 per cent. The lender also reduced its product fees to 1 per cent for all standard property and HMO mortgages.

Britain’s tech sector clocks up £2.5billion worth of new investment in 2018 as it comfortably tops the table of European countries (This is Money), Rated: A

UK based tech companies attracted £2.49billion in venture capital investment last year, according to data compiled by London & Partners and PitchBook.

This comfortably topped Germany in second place with £1.38billion and more than doubled third place France’s £1.03billion.

The data shows investment into the UK’s AI sector peaked at £736million in 2018, up a chunky 47 per cent on 2017.

China

China’s HNA touts assets for sale as funding crunch intensifies (Reuters), Rated: AAA

China’s indebted HNA Group met bankers on Tuesday to tout the latest assets that the sprawling conglomerate is putting on the block as it looks to raise funds and stave off an intensifying cash crunch.

The range of assets, spanning a hotel project in frozen Harbin and stakes in struggling online lender Dianrong, insurer Bohai Life and brokerage HNA Futures, underscores how the group is shedding almost all non-core businesses as it pares back an empire that once spread from Deutsche Bank to Hilton Worldwide.

China’s New Negative List Targets Unified Market Access (China Briefing), Rated: A

For example, ride hailing operations are under the ‘restricted’ category. Many claim that this is an official response to the 2018 Didi scandals, while illegal financial activities and internet-related business activities are likely designed to target the problems in peer-to-peer lending platforms that emerged earlier in 2018.

European Union

German mobile bank N26 joins Europe’s unicorn club with $ 2.7 billion valuation (CNBC), Rated: AAA

German fintech firm N26 said Thursday it has raised $300 million from investors in a round of funding — valuing the online lender at $2.7 billion.

That not only puts the company among the ranks of Europe’s unicorns — or private start-ups valued at more than $1 billion. It also makes it one of the most valuable unicorns in the continent.

TrueLayer launches data API in Germany (Fintech Futures), Rated: A

Ahead of the one-year anniversary of open banking (it was unleashed on 13 January 2018), TrueLayer says its data API will mean that businesses, especially fintechs, will be able to avoid “costly and time-consuming integrations of the dozens of fragmented banking APIs in Germany and across Europe”.

International

Nexo, the World’s Largest Crypto Lender, Publishes Interim Report (Sociable.co), Rated: AAA

Nexo is sharing the interim report detailing the dividend distribution of $912,071.00 to eligible NEXO Token Holders that occurred on December 15, 2018.

In just six months, Nexo’s crypto lending model has generated a net profit of $3,040,239.

Source: Nexo

Read the full report here.

Crypto Lenders Thriving Despite The Ongoing Bear Market (Use the Bitcoin), Rated: A

The ongoing crypto winter has meant that many businesses are struggling for funding. Some have resulted in shutting down while others lay off staff. However, one section of the industry is thriving; crypto lenders.

Crypto lenders that are focused on the crypto industry say that they are finding strong demand for their services from individuals that are not willing to sell their crypto coins at depressed prices. Also, there is demand from big investors that are eager to borrow coins for short selling.

Australia

Crypto-Lending Business Helio Lending Launches Regulated Investment Fund (Investment Revolution), Rated: AAA

Australian-based, government-regulated cryptocurrency lender, Helio Lending today confidently launched a new arm of its business, the Helio Secured Income Fund —  a regulated Managed Investment Scheme with an Australian Financial Services Licence — investors are now able to indirectly invest in cryptocurrency assets while targeting a return of 9.75% a year, net of all fees.

India

IndiaMoneyMart Receives NBFC-P2P Certification From RBI (The Week), Rated: AAA

The accreditation will enable IndiaMoneyMart to expand operations and target loan disbursals worth INR 100 Cr by FY 2018-19. It is an encouraging milestone to enable IndiaMoneyMart (IMM) gain traction among investors seeking for alternative asset class and boost their sentiments. The product offers an opportunity to earn steady cash flow every month to the lenders as well as compound their earnings by reinvesting.

Southeast Asia

Indonesia’s KinerjaPay gets US$ 200 million investment deal from local conglomerate (KrAsia), Rated: AAA

Indonesian mobile payments app KinerjaPay raised US$200 million investment from Wahana Group, a Surabaya-based conglomerate. The investment consists of a subscription of $100 million worth of shares in KinerjaPay’s Series F round and an additional $100 million in shares of the company’s Series G Convertible Preferred Stock. The company is listed on the US OTC market under the ticker KPAY.

Africa

#BizTrends2019: 6 trends in fintech and its regulation (Biz Community), Rated: AAA

In peer-to-peer lending, I think we will see growth beyond remittances and micro-donations to much larger-scale crowdfunding and insurance-type products, including short-term risk insurance products and co-investment structures (like mobile stokvels) on digital platforms. These types of products hold the promise (and risks) of consumers of financial services developing and administering such platforms themselves rather than the big, established players. Similarly, consumer development of payment systems is receiving a lot of attention in the international market and, increasingly, in South Africa. This is something to watch in 2019.

Authors:

George Popescu
Allen Taylor

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Friday May 25 2018, Daily News Digest

The likelihood that business would choose fintech over banks

News Comments Today’s main news: Prosper qualifies borrowers up to $40K. GreenSky completes largest fintech IPO of the year. RateSetter hits $2.5B in lending. Lebashe increases RainFin stakes to 75%. Today’s main analysis: Peter Renton’s quarterly MPL results. Today’s thought-provoking articles: Alternative loan customers may perform well on traditional credit products. Banks, credit unions, and alternative lenders. How Ashton Kutcher […]

The likelihood that business would choose fintech over banks

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Prosper Introduces Loans Up To $ 40,000 For Borrowers (Prosper Blog) Rated: AAA

Today we’re pleased to announce that Prosper now offers qualified borrowers access to loans up to $40,000.

GreenSky Completes Largest Fintech IPO of the Year (Lend Academy) Rated: AAA

There is a lot that sets GreenSky apart from many of the fintech companies that exist today. The biggest differentiator is that the company is profitable and runs a high margin business. In fact, the company has been profitable for the last five years. They reported $139 million in net income on revenues of $326 million last year. They also have a highly differentiated, boots on the ground model to originating loans, empowering contractors to offer financing to homeowners at the point of sale. They also partner with other types of merchants to offer financing. GreenSky only holds a small portion of loans on their own balance sheet with most loans being funded through around 15 bank partners.

Segment of Population Using Alternative Loans May Perform Well on Traditional Credit Products (Globe Newswire) Rated: AAA

Two-thirds of consumers active in the alternative loan market fall in the subprime risk category, the riskiest of all credit tiers. Yet, a new TransUnion (NYSE:TRUstudy found that many of these consumers perform well when opening traditional credit products such as credit cards, auto and personal loans.

TransUnion studied over five million consumers who originated a traditional credit product between Q2 2015 and Q1 2016 and measured their performance 12 months after originating the loan. Of the over five million consumers, approximately 450,000 (or 8%) were present in TransUnion’s alternative lending database. TransUnion then compared the performance of the alternative loan population to those consumers who were not seeking or did not possess an alternative loan product.

The study corroborated that many alternative loan borrowers do present greater risks on traditional loans. However, there is a material subset of this population that would present reasonable risks on an auto loan or credit card, among other traditional products.

For instance, in the near prime risk tier (consumers with a VantageScore 3.0 credit score of 601-660):

  • Approximately 14% of those borrowers who possessed only one short-term loan went 90 or more days past due on a traditional account 12 months later.
  • The delinquency level declined to less than 12% when a consumer possessed two alternative loans.
  • The delinquency figure dropped even further to around 9% when a consumer had eight or more alternative loans over the course of seven years.

Near Prime Consumers with Strong Alternative Loan Payment History Perform Better on Traditional Loans

Number of
Satisfactory
Alternative
Loan
Accounts
0 1 2 3-4 5-6 7-8 9-10 11+
Ever 90+
Days Past
Due in 12
Months on
Traditional
Loans
18 % 11 % 11 % 11 % 10 % 9 % 8 % 8 %

Comparing Origination Activity of Alternative Loan Borrowers to the Rest of the Population

Approximately 26% of alternative loan borrowers who originated a traditional loan product in the study opened an auto loan and 50% took out either a personal loan or auto loan. This latter statistic compares favorably to the 37% origination rate for the rest of the population in the study.

From a supply perspective, traditional finance companies are providing by far the most loans to alternative lending consumers, with a market share of 59%. However, credit unions (9%) and FinTechs (3%) supply about 12% of such loans to this credit population.

Five Banks and Credit Unions Rocking The Small Business Market (The Financial Brand) Rated: AAA

FIS found that more than one-quarter (27%) of small businesses in the U.S. are using alternative lenders like these. Among Millennial business owners, that percentage is double (48%). And yet only 7% say they are using these platforms for lower interest rates; in most cases, banks and credit unions offer better rates. FIS also found that small businesses have been turning to non-bank financial apps to make B2B payments.

In research conducted by ath Power Consulting, two-thirds of small business owners said they would consider switching to a competing banking provider if it offered products and services to help them better manage and grow their business, and over half (54%) would consider switching to a non-bank alternative for the same reasons.

Source: The Financial Times

Digital Federal Credit Union and offers a service to small businesses to raise capital and give its members an opportunity to invest in community business. The credit union has partnered with GrowthFountain, a funding portal of crowdfunding solutions. Tennessee Valley Federal Credit Union has also done the same thing.

San Francisco startup Seed is a free mobile-only banking service for small businesses, who can get a checking account and a debit card through Seed’s partnership with The Bancorp and have access to bill payment, mobile check deposit and ACH and wire transfers. Seed is sort of like Mint and QuickBooks except that Seed directly partners with a FDIC-insured bank (like how Simple started out). There’s not a physical checkbook in sight.

My Quarterly Marketplace Lending Results – Q1 2018 (Lend Academy) Rated: AAA

My preliminary return of 4.70% is close to where it was last quarter but still down. I don’t expect my final Lend Academy P2P Fund return to increase this number so I am still stuck in the downward trend of returns.

My six original accounts at Lending Club and Prosper have all been open for at least six years so they are very mature accounts that have experienced several turns of capital as I have kept reinvesting over the years. The returns for the past year are still bad at 2.34% as I continue to pay for poor underwriting performance in 2015 and 2016 at both companies. When you see today that you can get 3% on a 10-year Treasury Note a sub 3% return is just not acceptable for an unsecured consumer loan.

Source: Lend Academy

SoFi finds new downtown San Francisco office a talent magnet as it expands services (San Francisco Business Times) Rated: A

San Francisco-based SoFi said a downtown San Francisco office it picked up this year through an acquisition is paying an unexpected dividend: greater interest from engineers that the fintech wants to hire.

SoFi has 44 engineers at the company’s downtown San Francisco office at 222 Sutter St, consisting of almost 15,000 square feet on one floor. Another 40 or so employees float between SoFi’s downtown office and Presidio headquarters.

How [and why] I invest in startups (TechCrunch) Rated: AAA

A lot of venture funds try to optimize for returns. They run complex ratio economic models to determine what their diluted value will be at the end of the life cycle of the optimal and non-optimal case of every given company.

What I look for in founders

I don’t have a magic formula, but there are four important factors that must all check out for me to invest in a founder.

  1. Domain Expertise
  2. Grit
  3. Purpose
  4. Charisma

Amazon’s Finance Ambitions Are Drawing Attention From the Fed (Bloomberg) Rated: A

Fed Vice Chairman Randal Quarles, the U.S.’s most influential banking watchdog, is monitoring the potential for disruption to the industry and has expressed concern about how tech companies could provide financial services outside of regulators’ oversight, according to people who’ve spoken with him privately. Quarles hasn’t yet made any moves to intervene and the Fed’s influence would be limited.
Should the Fed get involved in the debate, it could be welcome news for traditional banks, who view Amazon and other technology companies as potential threats that enjoy fewer regulatory constraints. The companies are increasingly encroaching on lenders’ business, as evidenced by Amazon’s recent interest in offering a product akin to checking accounts.

Autotrader and Kelley Blue Book Team with LendingTree to Empower Shoppers with Auto Lending Options (PR Newswire) Rated: A

Securing vehicle financing in advance can save car buyers both time and money on their car-shopping journey. With this in mind, Autotrader and Kelley Blue Book, both Cox Automotive companies, have teamed with LendingTree. LendingTree’s auto finance marketplace provides each site’s visitors simple and easy online financing that can be used for new and used cars and trucks, anywhere in the United States.

Plenty of payday loan customers have good credit: TransUnion (American Banker) Rated: A

When Liz Pagel and Matt Komos began analyzing a slew of alternative credit data gathered by FactorTrust, an alternative credit bureau TransUnion acquired last year, they sought to understand the behavior of consumers who use payday loans, pawnshop loans, auto title loans, rent-to-own arrangements and “buy here, pay here” credit.

But 12% turned out to be prime and super prime. Only 3% were unscored.

The researchers then looked at what other credit these short-term borrowers have and found 75% have traditional credit, too.

Developers could make bank from Dodd-Frank rollback (The Real Deal) Rated: B

New legislation passed by the House of Representatives would relax restrictions on thousands of smaller lenders, potentially opening up the spigot for developers seeking commercial loans. The bill, which is awaiting President Trump’s signature, would remove provisions of the 2010 Dodd-Frank Act that many community and regional banks had deemed too costly and unfairly burdensome.

14 Chicago tech companies made Inc.’s 2018 Best Workplaces list (Built In Chicago) Rated: B

OppLoans is an online lender that uses a data-driven credit-scoring algorithm to provide loans to consumers who can’t access credit from traditional institutions. OppLoans is one of the fastest-growing tech companies in Chicago and has been named to the Inc. 500 two years in a row.

 

 

Fundbox Named “Best Overall Business Lending Company” In 2018 FinTech Breakthrough Annual Awards Program (PR Newswire) Rated: B

 Today Fundbox,  a leader in credit and payments for small businesses serving other businesses (SMB2B), announced that it has been selected as winner of the “Best Overall Business Lending Company” award by FinTech Breakthrough, an independent organization that recognizes the top companies, technologies and products in the global FinTech market today.

“We are delighted to recognize Fundbox for one of our program’s marquee awards, the Best Overall Business Lending Company award, an uber-competitive award category for our program with many compelling companies nominated,” said James Johnson, Managing Director, FinTech Breakthrough. “Fundbox stood out from the competition with its artificial intelligence-based underwriting platform. By fully automating the underwriting process with a data-driven risk model, Fundbox promises to underwrite faster, more cost-effectively and with greater accuracy than many other lenders – opening up lending possibilities for more customers. Congratulations to the entire Fundbox team for their industry recognition with our 2018 FinTech Breakthrough Award distinction.”

United Kingdom

RateSetter hits £2.5bn of lending (Peer2Peer Finance) Rated: AAA

The peer-to-peer lender, which launched in 2010, said 65,000 people have RateSetter investment accounts, financing more than 460,000 borrowers.

Investors have lent more than £1.55bn to individuals and almost £950m to businesses and have earned an average annual return of 4.4 per cent.

ArchOver launches Innovative Finance ISA to UK investors (Global Banking & Finance) Rated: A

ArchOver, the peer-to-peer (P2P) business lending platform, is helping British investors make the most of their annual tax-free allowance with the launch of its Innovative Finance ISA (IFISA). ArchOver’s IFISA service offers investors premium credit control and security, proven by ArchOver’s no-loss rate. It allows investors to invest directly in successful businesses, earning tax-free interest of up to 10% p.a. – far more than the average return on a cash ISA.

OakNorth: Brexit creates opportunity to reform banking regulation (AltFi News) Rated: A

OakNorth has called on the Treasury to use Brexit as an opportunity for regulatory reform in banking.

Responding to the Treasury Select Committee’s inquiry on SME finance, the bank said that there should be more proportionality between challenger banks and incumbents.

Mayo-based Doherty Menswear successfully raises €45,000 in peer-to-peer loans (Mayo Advertiser) Rated: B

To date, €1,012,000 has been raised through Linked Finance’s online lending platform (www.linkedfinance.com ) to facilitate business growth in Mayo, for 29 businesses.

Two more hires for ThinCats amid company growth (Peer2Peer Finance) Rated: B

PEER-TO-PEER lending platform ThinCats has appointed two new sales and marketing executives, as its hiring spree continues.

The alternative finance specialist has named Tony Smedley (pictured) as head of sales operations, and Richard Wilson as head of marketing, as part of a new push to “ramp up the provision of vital funding for small- and medium-sized enterprises (SMEs).”

China

China Rapid Finance Announces Preliminary First Quarter 2018 Results (PR Newswire) Rated: AAA

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE:XRF), operator of one of China’s largest consumer lending marketplaces, today disclosed preliminary financial results for the first quarter of 2018.

The Company expects to report a net loss in the range of $25 to $30 million, the majority of which consists of approximately $16 million of one-time expenses: 1) non-recurring expenses associated with preparing for registration; 2) write-offs related to receivables and amortizations; 3) non-cash accounting charges related to adoption of the new GAAP standard for revenue recognition (ASC 606); and 4) one-time costs associated with a pilot funding program that was discontinued due to regulatory changes.

Yirendai Reports First Quarter 2018 Financial Results (PR Newswire) Rated: AAA

In the first quarter of 2018, Yirendai facilitated RMB11,956.7 million (US$1,906.2 million) of loans to 174,128 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 65%; 23.1% of loan volume were generated by repeat borrowers who have successfully borrowed on Yirendai’s platform before; 72.5% of the borrowers were acquired from online channels;  100% of the loan volume originated from online channels was facilitated through mobile.

In the first quarter of 2018, Yirendai facilitated 214,231 investors with total investment amount of RMB11,427.6 million(US$1,821.8 million), 100% of which was facilitated through its online platform and 95% of which was facilitated through its mobile application.

In the first quarter of 2018, total net revenue was RMB1,592.7 million (US$253.9 million), an increase of 56% from prior year; net income was RMB278.9 million (US$44.5 million), a decrease of 21% from prior year and adjusted net income in the first quarter of 2018 was RMB668.5 million (US$106.6 million), an increase of 91% from prior year.

The fuse that could light China’s debt bomb (Financial Review) Rated: A

A financial planning manager in a major Shanghai bank branch points to a flickering computer screen displaying a list of wealth management products for customers wanting a higher yield to normal deposits.

For a deposit of 100,000 yuan ($20,600), he recommends a “low risk” product with an interest rate of 4.25 per cent over one year. Alternatively, the customer can opt for a riskier 4.75 per cent yield but there is no guarantee they will get any of their money bank. The customer is advised to act fast as yields are falling rapidly following closer government scrutiny of China’s savings products since March.

European Union

New Robo.cash P2P Lending & Millennials Research & 4M€ Milestone (Crowdfund Insider) Rated: AAA

Robo.cash’s research shows that Millennials are steadily taking over the leading position from the older generation of investors. Six months ago, the average age of investors of the platform was 38 years, and the age groups were distributed as follows: Silent generation (73-90) — 0.8%; Baby boomers (54-72) — 9.5%; Generation X (38-53) — 38.6%; Millennials (22-37) — 50.3% and Generation Z (18-21) — 0.8%. Today, the typical investor has grown younger to 37 years old due to the increased share of Millennials — 53.9% and Generation Z — 1.8%.

Source: Crowdfund Insider

Dublin-founded Future Finance agrees £100m debt facility (Irish Times) Rated: A

Future Finance, a Dublin-founded student loan specialist that recently secured €40 million in funding, has signed a £100 million (€114 million) debt facility.

The deal with alternative asset management firm, Waterfall Asset Management, which includes an option to participate in a further £150 million (€171 million) extension, will enable the company to grow its student lending business further.

International

What the Blockchain Means for the Future of Small Business Funding (Business.com) Rated: AAA

Business financing has always been a thorny issue for many small and medium-sized businesses (SMBs), and is often cited as one of the reasons behind the morbid failure rates for new businesses. One report found that about 29 percent of failed businesses identified the lack of working capital as a major reason for failure, second only to the lack of market demand for their products or services.

Here are a few specific ways the blockchain can be used to bolster funding for SMBs.

1. P2P lending

The blossoming crypto market is also helping fan the flames of disruption for P2P business lending. Earlier this month, Ripple, the company behind the third-largest cryptocurrency, XRP, announced plans to push the use of XRP into other industry segments outside of P2P payments and banking, including the P2P lending industry.

2. Using blockchain and big data to improve existing systems

Wish Finance, a blockchain-based lending platform for SMBs, is using the blockchain to help improve traditional risk scoring systems while providing a simple platform for repayments.

3. ICOs and SMB funding

But as investors become wiser and as trust becomes a permanent feature of the blockchain, there’s a growing opportunity for SMBs with solid business models to cash in.

Africa

Budding SA bank buys peer-to-peer lending firm RainFin (Business Tech) Rated: AAA

Johannesburg-based Lebashe will boost its holdings in RainFin by 24% to 75% for an undisclosed sum, the company said in an emailed statement on Thursday. RainFin, the largest peer-to-peer lender in South Africa, bought back the 49% held by Barclays’s South African unit, with Lebashe acquiring its 51% stake in February last year.

Asia

Singapore’s GIC emerges as most active Asian PE investor in Q1 (Deal Street Asia) Rated: AAA

Singapore’s sovereign wealth fund GIC completed at least 11 private equity deals in the first quarter of this year, making the $344-billion fund the most active Asian PE investor during the period.

GIC joined other investors in sealing two of the biggest investments of the quarter, according to a PitchBook report. It participated in the $5.5-billion buyout of Denmark’s Nets A/S by partnering with private equity firm Hellman & Friedman, and in the $2.5-billion investment in FirstEnergy in January.

Canada

IOU Financial Inc. Releases Financial Results for the Three-Month Period Ended March 31, 2018 (Benzinga) Rated: AAA

IOU FINANCIAL INC. (“IOU” or “the Company”) (TSXV:IOU), a leading online lender to small businesses (IOUFinancial.com), announced today its results for the three-month period ended March 31, 2018.

  • Net earnings on an IFRS basis and adjusted net earnings amounted to $0.8 million in Q1 2018, the second consecutive quarter with positive earnings for the Company.
  • Loan originations increased 11.2% to $24.5 million compared to the same period in 2017.
  • Provision for loan losses decreased 50.6% to $0.9 million in Q1 2018 driven by measures taken to reduce defaults.
  • Opex decreased 23.1% to $1.9 million for the first quarter of 2018

Authors:

George Popescu
Allen Taylor

Tuesday March 13 2018, Daily News Digest

Lending Club Average

News Comments Today’s main news: RateSetter enrolls 5K IFISA accounts in first month. OnDeck makes CFO transition. Augmentum set to IPO. TD Auto Finance, AutoGravity partner. Ranger Direct arbitration proceedings come to a halt. Investly secures 500K GBP through Seedrs. Today’s main analysis: A visualization of America’s personal loans. Today’s thought-provoking articles: UBS banned from sponsoring Hong Kong IPOs. China’s credit […]

Lending Club Average

News Comments

United States

United Kingdom

China

European Union

International

Australia

News Summary

United States

OnDeck Announces Chief Financial Officer Transition (PRNewswire), Rated: AAA

OnDeck today announced that the Company will appoint Kenneth (Ken) A. Brause as its Chief Financial Officer effective March 26, 2018, as part of a mutually agreed upon transition process between the Company and current Chief Financial Officer, Howard Katzenberg. Katzenberg will serve as an advisor to OnDeck until April 13, 2018, working closely with Brause to facilitate a smooth transition.

America’s personal loans visualized: income, principal, and credit scores (mediathinknum), Rated: AAA

Consider this: The average personal loan given out by loan giant Lending Club is for $15,000 given to a person with a sub-700 credit score and an income of $6,000 per month.

According to Experian, 73% of Americans die with an average debt balance of $61,554. This – on average – includes mortgage, credit card, auto, personal, and student loans. The average personal loan Americans take to the grave is $14,793.

That data is below and the results are fascinating and even daunting, especially for the apparent 73% of Americans who have a monthly payment to make. Read it and weep. Or make some payments.

Lending Club offers personal loans of up to $40,000. But that doesn’t mean everyone is asking for that much. Not does it mean that Lending Club is offering that much.

Interest rates are largely determined by credit score, but the average rate given out ranges from 12-14% with a peak high point in the 2013-2014 timeframe.

TD Auto Finance Partners with AutoGravity to Provide Enhanced Digital Car Buying and Financing Option (Business Wire), Rated: AAA

TD Auto Finance (TDAF), a subsidiary of TD Bank, America’s Most Convenient Bank, today announced a partnership with AutoGravity, a fintech provider modernizing the way consumers buy and finance automobiles. Through this partnership, indirect financing offers through TDAF will be made available to qualified auto buyers using AutoGravity’s digital platform to search for and finance their next vehicle from the convenience of their desktop or mobile device.

Santander Consumer USA And AutoGravity Work To Transform The Car-Buying And Financing Journey (PRNewswire), Rated: A

Santander Consumer USA Holdings Inc. (NYSE: SC) today announced it has reached an agreement with automotive technology leader AutoGravity to streamline and simplify the car-buying process for consumers. Through this agreement, Santander Consumer USA’s indirect finance offers will be available to AutoGravity customers nationwide through the AutoGravity mobile app.

BBVA Compass Express Personal Loan goes digital, opens to consumers in multiple states (BBVA Compass), Rated: A

BBVA Compass, the U.S. subsidiary of the global financial services group BBVA, now offers near instantaneous decisioning and potential same day funding for both customers and non-customers with the footprint wide1 opening of the fully digital BBVA Compass Express Personal Loan.

With the Express Personal Loan, customers and prospects can consolidate debt or fund large purchases with a low-interest personal loan that provides near instantaneous decisioning. Applicants with a BBVA Compass checking account can get same day funding upon loan approval. The loan, which represents months of effort across the entirety of the bank, underscores BBVA Compass’ drive to digital transformation and achieving excellence in customer experience.

The CIO Of The First Global Fintech Company On The Future Of Finance (Forbes), Rated: A

I recently caught up with the company’s chief information officer Bradley Strock, who has been in his role for three and a half years. We discussed PayPal’s transformation into a more customer-centric company, giving customers more choices of funding vehicles. We also covered how PayPal has successfully navigated the shift to mobile finance, resulting in a 50 percent increase in mobile payment volume in 2017.

In January of this year, Strock joined the ranks of board-level CIOs, as he commenced a directorship with $700 million revenue Elevate Credit, Inc., which provides online credit solutions to non-prime consumers, typically defined as those with credit scores of less than 700.

Peter High: Could you provide an overview of your role as CIO of PayPal?

Brad Strock: Most people are probably familiar with PayPal. We operate in over 200 markets around the globe. We are on a mission to democratize money and have had a great deal of success over the last couple of years. 2017 has been a great year in particular.

U.S. Fintech FinFit Announces $ 35 Million Senior Credit Facility With Ares Management (Crowdfund Insider), Rated: A

FinFit, a U.S.-based fintech that provides more than 80,000 American companies with a financial wellness benefit platform, announced on Monday the closing of a $35 million senior credit facility with Ares Management. The company stated it has the ability to increase the senior credit facility to $70 million and this capital raise follows a $16 million investment from Bison Capital Partners. Keefe, Bruyette & Woods was the exclusive financial advisor for the senior credit facility.

Colin Walsh of Varo (Lend Academy), Rated A

In this podcast you will learn:

  • How Colin’s background helped prepare him for his banking startup.
  • The differences he saw between what consumers wanted and what incumbent banks were delivering.
  • Why you need to offer a range of core products to move the needle on financial health.
  • How their banking partnership today enables Varo to offer banking products.
  • What banks are not doing well and how Varo is addressing this.
  • The profile of their typical customer.
  • How they are finding these customers.
  • How they are specifically helping their customers get a better handle on their finances.
  • Why Varo applied for a full national bank charter.
  • Details of the personal loan product they are offering today.
  • The traction that Varo has been getting.
  • Who Colin views as the main competition for Varo.
  • His vision for the future of Varo.

‘Women are not a target market’: Confessions of a former finance marketer (Tearsheet), Rated: A

Retail banks are missing out on $15 billion in global revenue thanks to a gender gap in access to checking and savings accounts.

A BNY Mellon report published last week in collaboration with the UN, cites flaws in design and marketing that make financial products less accessible to women than they are to men.

The report identifies gender gaps on other products; financial institutions are missing out on another $7 billion in credit card revenue, $14 billion in personal loans and $4 billion in housing, the report says.

Cloud Lending Solutions Recognized as Top 10 Best Performing Salesforce Solution Provider (Business Wire), Rated: B

Cloud Lending Solutions was recognized as a “Top 10 Best Performing Salesforce Solution Provider” of 2017 by Insight Success Magazine.

 

Eastern Bank-created fintech Numerated lands two new bank clients (American Banker), Rated: B

Numerated Growth Technologies, the online lending software startup that started life as an incubator within Eastern Bank, announced Monday it has two new clients, Franklin Synergy and MidFirst Bank.

These two additions bring the number of bank clients Numerated Software has landed to seven.

 

 

Fundbox Announces New Credit And Payments Solution To Bring $ 4.5 Trillion SMB2B Transactions Into 21st Century (Fundbox email), Rated: A

Today Fundbox announced the launch of Fundbox Pay, a new payment and credit solution servicing the $4.5 trillion small business-to-business (SMB2B) transactional market in the U.S. By addressing SMB’s lack of credit access and by facilitating credit payments between buyers and sellers, Fundbox Pay provides the 21st-century infrastructure to unlock the trapped value in the SMB2B economy.

Caliber Home Loans Launches Mobile Platform (PRNewswire), Rated: A

Caliber Home Loans, Inc. (“Caliber”) today announced the launch of a new mobile platform. Featuring three mobile phone apps customized for three user groups – borrowers, the Caliber sales force and their business associates – all users receive real-time information and the ability to respond from virtually anywhere. Caliber processes data from all three apps on the back end, which enables efficient and effective communication across the loan process.

 

 

Home Invest: When Did Investing in Rental Property Online Become Cool? (Digital Journal), Rated: B

When Home Invest entered the picture, that’s when. Home Invest allows you to run your next renovation from your laptop only, never having to walk your rental investment property.

United Kingdom

Zopa investor set to enter £94m fintech fund onto London Stock Exchange (Peer2Peer Finance), Rated: AAA

A NEW investment trust dedicated to backing fintech start-ups is set to list on the London Stock Exchange on Tuesday.

Augmentum Fintech has raised £94m through an initial public offering (IPO) alongside a Seedrs crowdfunding round that raised £695,000.

The company’s investment objective is to generate capital growth over the long term through investment in a focused portfolio of fast-growing and/or high potential private financial services technology businesses based predominantly in the UK and wider Europe.

RateSetter sees over 5,000 IFISA accounts opened in first month (Peer2Peer Finance), Rated: AAA

RATESETTER has revealed that over 5,000 Innovative Finance ISA (IFISA) accounts were opened in the first month since the product’s launch.

Ranger Direct Arbitration Proceedings Halted After Bankruptcy Filings (Interactive Investor), Rated: AAA

Ranger Direct Lending Fund PLC said on Monday Princeton Alternative Income Fund LP and Princeton Alternative Funding LLC filed voluntary petitions of bankruptcy last Friday, after arbitration proceedings following a provisional take over of a loan portfolio.

The company said that it was “disappointed” the bankruptcy filing has stopped the first phase of the arbitration, but believes Princeton’s portfolio will be investigated and the investments the fund has made will be compensated.

Starling and TrueLayer integrate for open banking (Finextra), Rated: A

Upstart challengers continue to lead the way in the UK’s open banking space, as API specialist TrueLayer integrates with Starling to enable businesses to access customer account data.

The Starling tie-up means that the bank’s customers can now share their data to use products created by these developers – including income verification tools, lending products and collated financial dashboards. The partners stress that account information will only be accessible when a customer chooses to use a new product and actively agrees to share their information through an explicit consent.

HSBC hopes to launch ‘open banking’ app within months (Financial Times), Rated: B

HSBC will launch a new app that centralises information about customers’ accounts — even those held with rival lenders — as early as next month, becoming the first major UK bank to take advantage of new regulations designed to boost competition and make it easier to switch providers.

The bank has set a target of the first week of May to release the “Connected Money” app, but Stuart Haire, HSBC’s UK head of retail banking and wealth management, told the Financial Times that he was hoping to make it widely available by mid-April.

 

 

 

 

Direct lending fund beats dividend target, launches new fundraise (AltFiNews), Rated: A

The RM Secured Direct Lending fund is looking to raise new capital through the issuance of new C shares and Zero Preference shares, according to regulatory filings.

Launched back in December 2016 raising £50.6m, the fund has raised another £30m through a C share issue in October 2017 but its managers have said on several occasions that the strategy can be scaled up significantly.  The fund has clocked up a 4.2 per cent dividend pay out last year beating its 4 per cent target.

How open APIs are paving the way for PFMs to succeed in Europe (Tearsheet), Rated: A

On Thursday, U.K. personal finance app Emma — which just launched in beta in December — announced a data-sharing agreement with challenger bank Starling Bank. It’s the second such agreement this year after a similar one with challenger bank Monzo in January.

The company’s two key revenue streams are based off interactions with customer data: referral fees from product recommendations and revenue from future financial products it could launch, including premium features within the app, he added.

 

Savers highlight interest and ROI as top priorities (Bridging & Commercial), Rated: A

The Next Gen: Investors and Savers report by P2P lending platform ArchOver has revealed that two-thirds of UK adults (67%) would call themselves ‘savers’ rather than ‘investors’.

The survey of 2,000 UK adults found that the average saver puts aside £191 a month.

Just under two-thirds of savers (66%) maintained a ‘rainy day fund’, while financing a new car or a holiday (29%) or paying for retirement (27%) were the other main reasons for saving.

The majority of savers (83%) used traditional savings accounts to build their nest eggs, followed by Isas (43%) and pension funds (33%).

China

UBS Hit With IPO Ban In Hong Kong (PYMNTS), Rated: AAA

Swiss banking giant UBS is reportedly banned in Hong Kong from sponsoring initial public offerings (IPOs), reports in Financial Times said Friday (March 9).

The publication cited UBS’s annual report, which revealed the 18-month ban from the Hong Kong Securities and Futures Commission. The regulator also fined UBS $119 million following an investigation into its sponsorship of IPOs for companies listing on the Hong Kong Stock Exchange.

According to reports, the ban comes two years after UBS warned it was also facing a suspension of corporate advisory services in Hong Kong. The bank also faced an investigation in Belgium in 2016 for money laundering allegations.

China’s Credit Crunch (The Diplomat), Rated: AAA

China Rapid Finance is one of thousands of private online micro-lending companies in China which, in recent years, have filled a critical gap in the country’s economy by extending credit to members of the lower and lower-middle classes, who traditionally have not had access to borrowing under the state-owned banking system.

Proponents of the payday and peer-to-peer loans offered by these companies assert that they offer borrowers upward financial mobility and the opportunity to achieve the trappings of a middle-class lifestyle. But the rapid proliferation of lending companies in an unregulated market has also led to widespread over-borrowing and a spate of predatory debt collection practices. More and more borrowers began to default on loans, and financial analysts and government regulators both worried that a growing debt bubble at the basement rungs of the Chinese economy might threaten the general stability of the country’s financial system.

 

European Union

Estonian P2P lender Investly Secures £500,000 Through Seedrs Campaign (Crowdfund Insider), Rated: AAA

Estonian peer-to-peer (P2P) lending platform Investly has successfully secured its initial £500,000 funding target through Seedrs. The equity crowdfunding round has so far attracted more than 375 investors.

Sweden’s VIA SMS to offer loans against crypto holdings (Finextra), Rated: A

CryptoLoan is a smart lending product offering Bitcoin-secured online loans that will allow Bitcoin investors to enjoy the value of crypto assets without selling them. The new product initially will be available for Swedish residents only, but the company is planning to open registration for other European countries shortly.

In the first phase of product development, CryptoLoan will offer online loans with Bitcoin collateral only to Swedish residents, but company development plans include expanding to other European markets shortly as well as enriching the list of accepted collateral with adding other cryptocurrencies. Customers from other European countries are welcome to sign up for news and get an exclusive opportunity to be the first to try the product as soon as it is available in the particular country.

BNP Paribas Fortis partners with Swedish fintech Tink for digital banking (AltFiNews), Rated B

Belgian bank BNP Paribas Fortis has announced it will be integrating tech from Swedish firm Tink to power its mobile banking applications.

International

Scoring with big data (The Edge Markets), Rated: AAA

The use of non-traditional data to churn out credit scores is now expanding beyond the underbanked and unbanked to reach even well-banked individuals who already have a credit score. This pool of data, which is used to discover patterns of users’ repayment behaviour based on their mobile phone and social media usage, is playing an increasingly important role in Asia alongside traditional credit scores.

Based on studies that have drawn a correlation between mobile phone usage and repayment rates, algorithms have been created to predict an individual’s potential for defaults. LenddoEFL is one of the pioneers in this field. It started its operations in the Philippines in 2011 before expanding to other countries with large underbanked populations such as Mexico and Colombia.

Mark Mackenzie, managing director for Asia-Pacific at LenddoEFL, says the company will be announcing a partnership in Malaysia in mid-2018, although he is reluctant to disclose more details.

As pointed out by impact investment firm Omidyar Network in its 2016 Big data, small credit report, it is estimated that individual consumer data production will reach 35 billion terabytes by 2020 — some 44 times the data produced in 2009. It also highlighted a few reports that had observed more than 30 companies globally that are already creating credit scorecards using non-traditional data.

Source: The Edge Markets

New Business Models and Emerging Technologies are Enabling Fintech Companies to Improve Financial Inclusion (The Financial), Rated: A

The report, Financial Inclusion in the Digital Age, was launched today during Money20/20 Asia in Singapore.

Over two billion unbanked adults in the world, representing 38 percent of all adults globally, do not have access to basic financial services and another 57 percent have basic accounts, but do not have access to diversified investments, low-cost payments systems, core household and business insurance, or credit. Financial Inclusion in the Digital Age explores some of the central frictions that prevent greater financial inclusion and financial well-being, and associated technological innovations that are fostering creative new approaches to mitigating these frictions for individuals and small businesses globally.

This serial entrepreneur wants to disrupt peer-to-peer lending, using blockchain (The Next Web), Rated: B

Most recently, he founded Celsius, the consumer credit blockchain-based startup.

The Celsius opportunity

Celsius gives its members the opportunity to use the coins they currently hold as collateral. With the Celsius Wallet, users can secure loans in dollars whenever they want by offering up their cryptocurrency as collateral. In the future, consumers will also be able to lend their crypto to others and earn interest in the process.

 

Australia

Fintech vs Banking: Which sector controls the future of money? (Small Caps), Rated: AAA

 

ApplePay is forecast to facilitate US$200 billion in payments by 2021 and already handles US$50 billion annually. Meanwhile, Amazon is preparing to cut the ribbon on its first chequing account feature by partnering with JP Morgan, a leading US bank.

According to the Australian Financial Review, 84% of millennials would consider banking with a tech giant like Google or Apple. This indicates that the average consumer puts more trust in their search engine provider than their internationally-recognised regulated Tier 1 banking institution, which only reaffirms the scale of the problem banks are now facing.

 

Authors:

George Popescu
Allen Taylor

Tuesday November 23 2016, Daily News Digest

CEO optimism

News Comments Today’s main news: SoFi, Lending Club gear up for a busy quarter. RateSetter drops unsecured business loans. Zopa’s targeted returns rise to 4% and 4.5%. Monzo to phase out prepaid cards. Funding Societies surpasses SGD 100M in SME crowdfunding in SE Asia. Today’s main analysis: CEO optimism grows worldwide. Today’s thought-provoking articles: Which car brands borrowers stretch […]

CEO optimism

News Comments

United States

United Kingdom

European Union

International

Asia

News Summary

United States

SoFi, Lending Club gear up for busy quarter (GlobalCapital), Rated: AAA

Up to four transactions from marketplace lenders SoFi and Lending Club are slated to hit the market this quarter, including prime and non-prime consumer and student loan refinancing offerings.

SoFi is preparing to bring at least one consumer loan offering and possibly one more refinanced student loan offering over the next two months. The planned offerings could be in the range of previous transactions, said a source familiar with the company’s plans.

Twitter slides after news that online lending startup SoFi may poach its operations chief (Business Insider), Rated: A

Shares of Twitter dipped on Monday after it was reported that Twitter’s chief operating officer, Anthony Noto, may leave the company for an offer to become the CEO of Social Finance, or SoFi, an online lending company.

Twitter’s stock was down 1.16% on Monday at $23.39 per share.

LendingTree Reveals Which Used Car Brands Borrowers are Stretching the Most to Buy (Business Insider), Rated: AAA

A recent LendingTree survey found that 27 percent of Americans plan to purchase a car in 2018. To discover if consumers are more likely to stretch their available incomes to own certain brands, LendingTree looked at people who found auto loans on the LendingTree.com platform in 2017 to buy used vehicles.

Contrary to popular assumptions, the results revealed that people aren’t going broke to buy used luxury cars. In fact, buyers of the most expensive cars seem to handily afford them.

On the other hand, LendingTree found Buick owners have the hardest time affording their car payments — not because they’re indulging in particularly expensive vehicles but because their income tends to be on the lower side, meaning they use a larger share of take home pay to cover their monthly payments.

Car Makes Borrowers Stretch the Most to Buy Used

Rank

Make

Estimated Monthly Payment as a Percent of Estimated Monthly Income

Average Estimated Monthly Payment

Average Estimated Vehicle Price

1

BUICK

10.9%

$418

$18,597

2

CHRYSLER

10.9%

$440

$18,497

3

NISSAN

10.6%

$405

$18,231

4

DODGE

10.6%

$454

$22,290

5

CHEVROLET

10.2%

$437

$20,930

6

KIA

9.7%

$368

$17,357

7

HONDA

9.4%

$389

$18,053

8

HYUNDAI

9.3%

$356

$17,216

9

MITSUBISHI

9.0%

$370

$17,205

10

CADILLAC

8.8%

$480

$25,294

11

FIAT

8.8%

$341

$16,543

12

FORD

8.6%

$424

$21,648

13

GMC

8.3%

$466

$25,077

14

JEEP

8.1%

$414

$21,885

15

VOLKSWAGEN

8.0%

$363

$16,909

16

MAZDA

7.8%

$355

$18,326

17

TOYOTA

7.7%

$385

$19,788

18

JAGUAR

7.6%

$503

$27,734

19

INFINITI

7.6%

$454

$24,728

20

BMW

7.4%

$476

$25,038

21

MERCEDES-BENZ

7.3%

$519

$28,792

22

SUBARU

7.2%

$361

$19,219

23

ACURA

7.0%

$409

$22,623

24

AUDI

6.8%

$482

$26,725

25

LEXUS

6.7%

$459

$25,393

26

LINCOLN

6.6%

$396

$22,205

27

LAND ROVER

6.2%

$569

$31,704

28

VOLVO

6.1%

$400

$20,877

29

MINI

5.7%

$355

$17,728

30

PORSCHE

5.0%

$635

$42,173

31

TESLA

4.6%

$818

$54,234

Fintech lender Fundbox shows how open banking can be done (American Banker), Rated: AAA

The online small-business lender Fundbox says it is integrating its automated lending service with several software programs commonly used by its borrowers — and it’s a move that could hold a lesson for banks.

What’s striking about what Fundbox is doing, and the reason bankers could learn from it, is it is capitalizing on the concept of open banking — allowing a piece of a lender’s products and services to be accessed through a third party — in a way that few U.S. banks have.

Capital One comes the closest — its application programming interfaces let third parties offer services like prequalifying customers for Capital One credit cards and sharing its reward information.

Square is like ‘Amazon or Google in their early days’ (Business Insider), Rated: A

When Wall Street compares one of Jack Dorsey’s two public companies to Amazon and Google, you’d expect them to be talking about the one in the tech sector — Twitter. But on Friday, Nomura analyst Dan Dolev said that Square, Dorsey’s payments company, is the one that resembles today’s tech giants in their early days.

Dolev thinks that these new initiatives will massively increase the number of payments Square processes by a long-term compound annual growth rate of 20%. Dolev also says that this growth will provide a 40% to 45% boost to earnings margins.

CashCall to pay $ 10 mln, CFPB request for $ 287 mln denied (Reuters), Rated: A

In a decision on Friday, U.S. District Judge John Walter ordered California-based CashCall to pay $10.3 million instead, ruling that the CFPB did not justify the larger amount.

defi SOLUTIONS Lands $ 55 Million (Finovate), Rated: A

Loan origination solutions company defi SOLUTIONS just closed on $55 million in funding. The Series C round comes from Bain Capital Ventures, offering social proof along with a stamp of approval for defi’s suite of loan services. This is the Texas-based company’s first round of financing.

The primary capital portion of the investment will be used to accelerate product development, expand resources and facilities, and grow the number of employees by nearly 50% this year.

A Bird’s Eye View of What We Achieved (YieldStreet), Rated: A

Source: YieldStreet

Ohad Samet of TrueAccord (Lend Academy), Rated: A

Ohad Samet is the CEO and Co-founder of TrueAccord. They are a new kind of debt collection company that uses a data driven approach and digital first communications.

US Banks Suffer 20 Percent Jump in Credit-Card Losses (Newsmax), Rated: A

U.S. banks have reportedly recently suffered a 20 percent jump in credit card losses.

The soaring bad debts has fueled fear about the financial health of middle America, the Financial Times explained.

Recently disclosed results showed Citigroup, JPMorgan Chase, Bank of America and Wells Fargo took a combined $12.5 billion hit from soured card loans last year, about $2 billion more than a year ago. The FT reported.

Reuters recently warned that U.S. banks, already under pressure from slower loan growth and low interest rates, could be facing yet another challenge as a rising number of Americans fall behind on their credit card payments.

U.S. consumer credit outstanding rose in November by the most in 16 years as credit-card balances surged, recent Federal Reserve data showed, by $11.2 billion, to $1.023 trillion.

Credit Card Startup Petal’s Latest Funding Round Signals NYC Fintech Upturn (Crunchbase), Rated: A

Last week, alternative credit card issuer Petal closed its $13 million Series A led by Peter Thiel’s Valar Ventures. It was announced just four months after Petal’s $3.6 million seed round.

The news marks a significant month for Manhattan’s sometimes-struggling fintech scene, with MoneyLionhaving raised a whopping $42 million during its Series B in early January. And while these numbers are a drop in the bucket compared to the U.S. fintech industry surpassing $5 billion in Q3 ’17, the momentum is already being felt, and it comes as a welcome change for the city.

Do You Need a Personal Financial Advisor or Will a Robo-Advisor Do? (Nerdwallet), Rated: A

At the top end, some personal financial advisorscharge an annual fee plus investing expenses as a percentage of your assets under management, typically about 1% to 1.5%. As a result, these advisors often require that new clients have an account minimum of $250,000 in assets.

By comparison, robo-advisors — which use algorithms to build and manage a client’s investment portfolios and require little human interaction — charge fees from 0.45% to 0.70% of the amount managed. And many will take on new clients with $0 to open an account.

The downside of robo-advisors: Investment choices are more limited — often a small selection of low-cost index funds or exchange-traded funds — than the asset choices that full-service brokers and advisors may provide. And while many offer financial advice via email, chat or phone consultations, those hybrid services are likely to come at an additional cost.

What to Know About Peer-to-Peer Lending Apps Like Yahoo’s ‘Tanda’ (Lifehacker), Rated: A

The Tanda app, launched by the company Friday and available on Android and shortly on iOS, does exactly what its name implies. It lets you join groups of people to work toward savings goals together, in tandem: Each user pays an agreed-upon amount into a pot, choosing when they receive the money. Those who need it soonest pay a fee, and those who wait the longest receive a two-percent bonus. Yahoo Finance takes eight percent of the first payout and seven percent of the second payout, according to Android Police.

Yahoo Finance isn’t the first to think to monetize a more formal version of this sytem—the site eMoneyPool has been available to the public since 2013, servicing over $3 million, and the apps KyePot and Cashare serve a similar purpose. On Tanda, users receive a trust score, with higher scores allowing users access to larger money pools, up to $2,000.

Lending Tree: Dayton home market isn’t so competitive (Dayton Daily News), Rated: B

In a national ranking, Dayton ranks relatively low for factors Lending Tree deems indicative of a competitive housing market. Prospective buyers in this area have relatively low average down payments, among other factors Lending Tree placed in the ranking.

On the list of 100 cities with the “most competitive home buyers,” Dayton ranks overall at 96, below Augusta, Ga. and above El Paso, Texas. Youngstown Ohio is last on the list at No. 100. San Francisco, Calif. is first.

FormFree Celebrates Its Tenth Year of Operations (Send2Press), Rated: B

In 2016, Fannie Mae named FormFree its first designated vendor for automated asset verification as part of the Day 1 Certainty initiative. Since then, FormFree has signed more than 800 lender clients, including 70 percent of the nation’s top 40 mortgage originators, and accepted over 1.25 million orders for the company’s flagship AccountChek® Asset Report. The company also increased its total number of technology integrations and reseller partnerships to over 100, making AccountChek available for more than 90% of mortgage transactions nationwide.

recent announcement from the U.S. Department of Veterans Affairs (VA) makes even more loans eligible for automated asset verification through AccountChek. On December 29, the VA published Circular 26-17-43 confirming that the VA permits the use of automated asset verification services like AccountChek.

United Kingdom

RateSetter to Focus Solely on Asset Backed Lending for Commercial Loans (Crowdfund Insider), Rated: AAA

Peer to peer lender RateSetter said its commercial lending vertical will focus solely on secured lending in its commercial finance vertical. Following a review of its commercial finance operations, RateSetter said it would move to “simplify” its commercial finance by funding only property backed or asset backed loans.

RateSetter said it will continue to maintain a diversified approach to lending into consumer, business and motor finance markets, however, the commercial finance offer will no longer include unsecured business finance.

RateSetter exits unsecured business loans market (P2P Finance News), Rated: A

Business borrowers will now only be able to access property-backed development and investment loans or asset-backed hire purchase deals.

All existing unsecured business applications will be processed and will continue to repay in line with their schedule, the platform said.

The targeted annual return for its basic Zopa Core product has increased from 3.7% to 4% while the higher risk Zopa Plus product now has a targeted return of 4.6%, up from 4.5%.

Monzo to phase out popular prepaid cards by April (Financial Times), Rated: AAA

Challenger bank Monzo has announced it will close its popular prepaid Mastercard in early April, although its half a million customers can still enjoy valuable travel perks if they upgrade to Monzo’s current account.

Until this month, Monzo cards also offered fee-free cash withdrawals from foreign ATMs. However, this has now been capped at £200 of overseas withdrawals within a rolling 30-day period, and customers pay a 3 per cent fee if they exceed this limit.

The UK is leading the way in crowdfunding and P2P lending as the rest of Europe plays catch-up (City A.M.), Rated: A

While the UK remained the largest alternative finance market in Europe by far, at €5.6bn (£4.9bn), the rest of Europe began to play catch-up as it grew its own market by 101 per cent, the data from the university’s Centre for Alternative Finance showed.

Excluding the UK, Estonia ranked first for alternative finance volume per capita for the second year in a row, at €63, followed by Monaco and Georgia.

Start-up revolution shows signs of fatigue after years of growth (Financial Times), Rated: A

Britain’s start-up revolution is stalling, with the number of businesses created last year falling for the first time in almost a decade.

There were 5.5 per cent fewer start-ups in 2017 compared with 2016, according to research by DueDil, a financial analysis company. It found that 647,923 new businesses were started last year — down from 685,928 in 2016, bringing to an end what had been annual increases since 2008.

Investly Plans to Raise 2M GBP on Seedrs (P2P-Banking), Rated: A

Investly is currently pitching on Seedrs to raise between 500K and 2M GBP in a crowdfunding for equity campaign. To become a shareholder, the required minium investment amount is 13 GBP.

What are the three main advantages when investing in the invoices?

Liquidity – Investly is quite different compared to most platforms because the investment period is only 30 to 40 days on average.

Return – Historically investors have earned 11-12% annually on invoices.

What ROI have investors made on average on the platform in the past?

The net return on Estonian invoices has been 11.2% annually and in the UK it’s been 12.6% annually.

Loans to help poorest families avoid poverty premium (Third Force News), Rated: A

A £600 loan repaid over six months would typically cost an extra £330 to repay to a door step lender and over £500 to repay via a payday lender. Repaying via a social lender could easily halve this cost.

Hollywood actor and social activist Michael Sheen has supported the launch of a new £1 million fund set up by the Carnegie UK Trust and features in a new short film called Speaking out for Fair Credit.

“The need for ethical alternative providers is clear, whether they be on our local high streets or available online. But it’s not just about creating more providers – we need to do more to enable them to compete with the high cost providers and to provide vital financial support to communities across the UK, putting people before profit.”

It is estimated that around 150,000 people in Scotland borrow £250m from high cost lenders like pay day loan firms, door step lenders and rent-to-own shops annually.

European Union

European online alternative finance is growing (Cambridge Network), Rated: AAA

Excluding the United Kingdom, which remained by far the largest alternative finance market in Europe at 5.6 billion euros, online alternative finance grew 101 per cent in Europe to 2.06 billion euros from 1.02 billion euros a year earlier. The UK’s market share in Europe declined to 73 per cent in 2016 from 81 per cent a year earlier as other markets grew faster.

France (444 million euros), Germany (322 million euros) and the Netherlands (194 million euros) are the three largest European alternative finance markets outside the UK, followed by Finland (142 million euros), Spain (131 million euros), Italy (127 million euros) and Georgia (103 million euros).

Peer-to-peer consumer lending is the largest alternative finance segment in Europe for the third year in a row, at 34 per cent, followed by peer-to-peer business lending (17 per cent), invoice trading (12 per cent), equity-based crowdfunding (11 per cent) and reward-based crowdfunding (nine per cent).

International

CEO optimism booms despite increasing anxiety over threats to growth – New content available (The News Market), Rated: AAA

Fifty seven percent of business leaders say they believe global economic growth will improve in the next 12 months.

Optimism in global growth has more than doubled in the US (59%) after a period of uncertainty surrounding the election (2017: 24%). Brazil also saw a large increase in the share of CEOs who are optimistic global growth will improve (+38% to 80%). And even among the less optimistic countries such as Japan (2018: 38% vs. 2017: 11%) and the UK (2018: 36% vs. 2017: 17%), optimism in global growth has more than doubled since last year.

Fintechs Haven’t Reduced the Trade Finance Gap – So far (American Express), Rated: A

According to a September 2017 report from the Asian Development Bank (ADB), the trade finance gap remained relatively steady at $1.5 trillion in 2016 compared to a record high $1.6 trillion gap the year prior.1 MSMEs remain hardest hit by gaps in trade finance: the ADB report attributed 74 percent of rejected trade finance requests to MSMEs and midcap firms in 2016, compared to just 57 percent in 2015.2

ADB says this is despite fintech investment in trade finance that exceeded $13 billion in 2016 – more than half of the estimated $24 billion in total 2016 fintech investment cited in a separate report from the International Chamber of Commerce (ICC).3 Some experts – including Steven Beck, Head of Trade Finance at ADB – say fintech efforts may need to be redirected before their impact on import-export trade finance can be fully realized.4

Longfin (LFIN) Launches Commercial Ziddu Smart Contracts on Ethereum Blockchain (StreetInsider), Rated: B

Longfin Corp. has announced that its Ziddu Smart Contracts are commercially available on the Ethereum blockchain.

Ziddu Smart Contracts are currently available for Trade Finance and FX markets, and Longfin is preparing to launch Smart Contracts for bullion financing within the second quarter of 2018.

Asia

Funding Societies Surpasses SGD 100 Million in SME Crowdfunding (Core Sector Communique), Rated: AAA

Funding Societies, the leading peer-to-peer (P2P) lending platform in Southeast Asia, welcomed the start of the year by crossing the SGD 100 million mark in total crowdfunded SME loans across Singapore, Indonesia and Malaysia. In line with the platform’s goal of responsible growth, Funding Societies expanded its crowdfunding book by 400% in 2017 while maintaining a default rate of 1.5%.

Increasing the Access of SMEs to Credit in Vietnam (International Policy Digest), Rated: A

According to statistics by the Ministry of Planning and Investment (MPI), SMEs contributed approximately 48% of Vietnam’s GDP in 2012. Moreover, based on research by the United Nations Economic and Social Commission for Asia and the Pacific, since SMEs are usually labour intensive they employed 77% of Vietnam’s labour force.

The Ministry of Planning and Investment in their survey in 2012 of SMEs ability to access financing indicated that approximately 30% of SMEs in Vietnam could not get any financing from financial institutions and another 30% that could get financing faced numerous difficulties in accessing funds.

The 2015 survey found that the percentage of firms having bank loans in 2015 for micro-sized firms was 40%, small firms 62%, medium firms 74% and 81% for large firms. Access to bank services in 2015 also took into consideration how common it was for these enterprises to give bribes to the bank staff: Micro (64%), small (56%), medium (49%) and large firms (39%). The percentage of firms that experienced how interest rates and other lending conditions applied to private businesses are always more difficult than those for SOEs: micro (74%), small (71%), medium (65%) and large (48%).

Authors:

George Popescu
Allen Taylor

Thursday September 28 2017, Daily News Digest

Chinese billionaires

News Comments Today’s main news: PayPal likely to buy big target like Square or Klarna soon. LendingTree acquires non-lending assets of SnapCap. Funding Circle boost revenues, narrows losses. ZhongAn raises $1.5B in Hong Kong IPO. Funding Societies intros first crowdfunding chatbot in Southeast Asia. Today’s main analysis: Hong Kong private wealth sees double-digit growth. Today’s thought-provoking articles: The next […]

Chinese billionaires

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Middle East

Canada

News Summary

United States

PayPal A Buyer, Not Seller, And May Seek A Big Target (Investors.com), Rated: AAA

Cash-rich PayPal Holdings (PYPL) is likely to pull the trigger on a big acquisition soon, and may be eyeing Europe or a big target like Square (SQ), says a Wall Street analyst.

Ellis says PayPal has $6 billion in cash on its balance sheet and could raise $4 billion or more by selling off its consumer credit business.

“While there are a number of potential candidates, we see the acquisition of a European payments asset as the most likely,” added Ellis in the report. “We believe the top candidates are Adyen, Klarna, Square and Stripe.”

Both Square and Stripe, however, would be costly acquisitions. Square’s market valuation tops $10 billion, while privately-held Stripe’s latest funding round in December gave it a whopping $9.2 billion valuation.

LendingTree Acquires Non-Lending Assets of SnapCap (PR Newswire), Rated: AAA

LendingTree, Inc. (NASDAQ: TREE) announced today that it has acquired certain assets of Snap Capital LLC, a tech-enabled online platform connecting business owners with lenders offering small business loans, lines of credit and merchant cash advance products through a concierge-based sales approach.

The acquisition purchase has a possible total consideration of $21 million, which consists of $12 million in cash at closing, and contingent consideration payments of up to $9 million.

The Next Billion-Dollar Startups 2017 (Forbes), Rated: AAA

Every year for the past three, Forbes has gone looking for 25 young U.S. companies with a strong shot at reaching a valuation of $1 billion or more. This year, with the help of TrueBridge Capital Partners, we asked venture firms which companies they thought most likely to hit the billion-dollar mark soon. Then we cut that list down to a final 25, evaluating strategies, funding and competitive challenges as well as estimating current revenues.

Blend

Founders: Erin Collard, Nima Ghamsari (CEO), Eugene Marinelli; Equity raised: $160 million; Estimated 2017 revenue: $27 million; Lead investors: 8VC, Founders Fund, Greylock Partners, Lightspeed Venture Partners

What it does: Makes cloud-based software that lenders use to originate mortgages online. Today, Blend works with about 30 mortgage originators, including Wells Fargo, U.S. Bancorp and Mason-McDuffie Mortgage. It also plans expansions into student and auto loans.

Fundbox

Founders: Yuval Ariav, Tomer Michaeli, Eyal Shinar (CEO); Equity raised: $108 million; Estimated 2017 revenue: $55 million; Lead investors: General Catalyst, Khosla Ventures, Spark Capital

What it does: Provides short-term financing to small businesses. Fundbox intends to reduce the cash-flow headaches of small companies, both those waiting for payment and those that need short-term credit to pay what they owe. Fundbox started as an invoice-financing company, lending money to small businesses against their accounts receivables at rates lower than those for cash advances and without prepayment penalties. Its new model, expected to launch in 2018, is meant to work like a credit card for business-to-business transactions. A company that owes money has Fundbox pay the invoice. The company that is owed gets its cash immediately (minus a small interchange fee). Meanwhile, the first company has 60 days to repay Fundbox before being charged interest. With U.S. businesses doing some $41 trillion in business-to-business transactions a year, the potential market is enormous, but setting up such a network is hard.

Plaid

Founders: William Hockey, Zach Perret (CEO); Equity raised: $60 million; Estimated 2017 revenue: $40 million; Lead investors: Goldman Sachs, New Enterprise Associates, Spark Capital

What it does: Makes software that helps technology startups and banks work together. Plaid’s products provide authentication of accounts and routing numbers, income validation and real-time balance checks. Among its customers: Venmo, Robinhood, Coinbase and Clarity Money.

Shinola Finds Kindred Partner in Affirm (BusinessWire), Rated: A

Affirm, Inc., the company started by Max Levchin to provide fair and honest consumer financing, today announced that Detroit-based design brand, Shinola, is using Affirm’s point of sale service to put customers first in an era when a merchant’s values often outstrip price for shoppers’ making a buying decision — especially among millennials.

Known for its dedication to thoughtful manufacturing by creating jobs and making watches, bicycles, leather goods, journals, jewelry, and audio equipment of the highest quality, Shinola is obsessive about customer experience to ensure a high-touch shopping experience that accurately matches the finely crafted watches, bicycles, jewelry, bags, accessories and gifts for sale on its website.

Since Shinola began offering Affirm’s financing to its shoppers, the company’s average order value (AOV) has increased by 52 percent. Also, 50 percent of the Affirm users on Shinola’s site are now between the ages of 18 and 34, a market Shinola has been working to grow.

Nearly 90 percent of marketers said customer experience would be their primary differentiator this year, according to a recent study by research and advisory firm Gartner, Inc. And, the majority of respondents — 55 percent — in a recent survey conducted by Affirm and Qualtrics of more than 1,000 22 to 44-year-olds in the U.S. said they prioritize a company with high values and ethical business practices, over minimizing their out-of-pocket costs.

How CRE Fundraising Is Changing and Why (Commercial Property Executive), Rated: A

Jason Burian: The number of closed-end private real estate funds in the market raising capital over the past three years:

  • January 2015 – 478
  • January 2016 – 492
  • January 2017 – 525 (record high)

Closed-end private real estate dry powder over the past three years:

  • December 2015 – $229 billion
  • December 2016 – $237 billion
  • July 2017 – $255 billion (record high)

CPE: Is the real estate crowdfunding industry a solution? What are the risks?

Burian: I see real estate crowdfunding as an alternative to traditional private equity real estate and an alternative source of investors and not as a solution to any problem. As we know, it is just an avenue for every day individual investors seeking exposure in their portfolios to real estate without acquiring shares of REIT’s.

Government regulation is always a risk for this relatively new industry sector. There are questions about the amount of government regulation and whether there is enough to make it a safe playing field. Until crowdfunding matures, with the proper level of regulation, there is always a risk that someone is taking advantage of that gap that currently may exist.

A new survey has concluded that then it comes to researching mortgages, Millennials prefer the D.I.Y. aspect of the online world, while Baby Boomers prefer to communicate with people.

According to the survey, “The Digital Mortgage Experience: A Study of Shifting Borrower Expectations,” from Los Angeles-based Velocify, more than one-third of all borrowers prefer self-service websites, especially during the research stage of getting a mortgage. But as the process evolves, demographic shifts occur. The survey found Millennials were 45 percent more likely to find their lender online than Baby Boomers, who were 87 percent more likely to use their current bank or lender for their home loans.

Boost Insurance Raises $ 3M in Funding (Finsmes), Rated: A

Boost Insurance USA, a NY-based technology-enabled insurtech development platform provider, raised $3m in funding.

The round was led by Norwest Venture Partners with participation from IA Capital Group, Greycroft Partners, and re/insurance industry leaders State National Companies (NASDAQ: SNC) and Nephila.

3 Stocks That Could Double Your Money (The Motley Fool), Rated: A

Company Recent Stock Price
Lending Club (NYSE:LC) $5.97
Fitbit (NYSE:FIT) $6.52
Etsy (NASDAQ:ETSY) $17.01

DATA SOURCE: TD AMERITRADE. PRICES AS OF SEPT. 26, 2017.

Finally starting to grow again

Peer-to-peer lending platform Lending Club has lost roughly three-fourths of its market value since its first trading day in 2014, thanks to several quarters of stagnant growth and a scandal that worried investors.

However, the company’s most recent earnings report shows that things may finally be starting to pick up, with 10% growth in loan originations, higher profit margins, and impressive revenue growth. In addition, the company said it could be on the verge of profitability by the start of 2018, and it expects double-digit sequential revenue growth in the third quarter of this year.

Lending Club’s current loan portfolio represents roughly 0.4% of the U.S. consumer lending market, and if the company could even manage to boost its market share to one or two percent, it could mean a big payday for the company’s investors.

Sumero Leads $ 45M Growth Equity Round in Treasury Fintech Kyriba (Xconomy), Rated: B

After raising $23 million in a Series D funding round last September, Kyriba says today it has raised $45 million in a growth equity round led by Sumeru Equity Partners, a tech-focused private equity firm that specializes in mid-market deals. Previous investors Bpifrance, Iris Capital, Daher Capital (all growth equity funds) joined the deal, along with HSBC.

The venture rounds are over for Kyriba, a cloud-based provider of corporate treasury and financial management software that is based in New York and San Diego.

Amazon effect’ makes advising smaller clients less profitable (Financial Times), Rated: B

Daniel Ketchum prides himself on his low fees and independence, but after 27 years as a financial adviser he is finding it harder to make a living working with smaller clients.

Increased government regulations and savers becoming more knowledgeable about investing have created what he calls the “Amazon effect” for US financial advisers.

But the US Department of Labor’s fiduciary rule, which came out this year, is making it harder for him to make a profit from advising small plans, he says.

The regulation requires advisers servicing retirement accounts to work in the best interest of the client and has disrupted the wealth management industry.

“I am trying to see if there’s an area where we can do this online and don’t need to leave the office,” he says. “If every plan had the economics of the smaller guys, it would be tough to pay staff, office rent and marketing.”

PayPal’s Cofounder Says Amazon Is “Not Yet” A Monopoly (BuzzFeed), Rated: B

Max Levchin, a cofounder of PayPal and former chairman of Yelp who is now CEO of the online lending startup Affirm, told BuzzFeed News on Wednesday that Amazon has “not yet” become a monopoly because of competition from major retailers like Walmart as well as from smaller brands, which are investing in ways to attract and keep customers in the real world as well as online.

Walmart is still much larger than Amazon in terms of net sales. During 2017 fiscal year, Walmart reported$485.9 billion in revenue and $481.3 billion in net sales. Amazon, on the other hand, reported about $136 billion in net sales in 2016.

United Kingdom

Funding Circle boosts revenues, narrows losses in 2016 results (AltFi), Rated: AAA

The UK’s largest marketplace lending platform marginally narrowed its losses in 2016. Funding Circle, a business loans marketplace, lost £35.7m in 2016, slightly down from £36.9m in the previous year. Meanwhile the platform boosted revenues by 59 per cent to £50.9m, and saw its total loans outstanding climb 61 per cent to £1.37bn, according to a Companies House filing.

Funding Circle has also flagged that its group operating results for the first half of 2017 demonstrate that revenue growth has accelerated further, approximately doubling year-on-year.

The UK Punches Above its Weight in Alternative Finance & Crowdfunding Can Provide a More Robust Funding Ecosystem (Crowdfund Insider), Rated: AAA

Crowdfund Insider recently spoke with Raghavendra Rau to better understand his perspective on the crowdfunding market. Rau is the Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge Business School. He is also a founder and Director at the Cambridge Centre for Alternative  Finance (CCAF). At the most recent CCAF annual conference in Cambridge, Rau shared some insightful research he had recently completed on the global crowdfunding market.

First, to clarify, in the UK crowdfunding encompasses both debt and equity so peer to peer lending (IE Marketplace Lending) is included in aggregate terms. It is more about many people (and perhaps some institutions) funding a single project. Rau, in his research, emphasizes that in the UK the debt crowdfunding market is far larger than the equity side. This makes sense and mirrors the public markets. Yet access to capital at a very early stage may require equity capital. But globally, over 90% of the crowdfunding market is debt, not equity. It is a debt financed world, at least for SMEs, said Rau.

“Yes, there is definitely potential here. Usually you have two types of firms. Most small enterprises do not require equity. They require debt. Debt means you have to have approximately stable cash flows. Equity means you have to convince the investors that you have an amazing idea that is going to pay off in several years and I am going to let you (the investor) share in this. This is more risky for the investor and so all SMEs are not suitable candidates to raise equity.”

Rau said there are two different paths. Banks or crowdfunding. With crowdfunding there is less paperwork. It is easier to process and in some instances less risk averse. Banks are pulling back from lending across the spectrum. SMEs, the engine of economic growth, are not getting the necessary capital via the traditional route.

So has the UK crowdfunding system been effective?

In the broader scope of things, China is the largest alternative finance market in the world. The US comes in a distant second. The UK is a strong third. But given the relative size of the UK economy, Rau calls the UK performance “extremely impressive.”

The UK is recognized as the top Fintech hub in the world but this required policymakers to be more creative and to take some chances. So far, it has paid off.

How FAs Engage Third-Party Services is Changing (Financial Advisor IQ), Rated: A

Wealth Mosaic aims to build “a resource covering all of the main business needs of wealth managers” in about a dozen verticals, says its co-founder Stephen Wall, who has worked as a wealth management consultant with Boston-based Aite Group and Scorpio Partnership in London. At first, though, he says the service will focus where it’s needed most: on technology and data resources as well as consulting and research options.

Though Wall sees a role for Wealth Mosaic with all “different types of wealth managers,” he sees particular growth opportunities helping “smaller independent” firms that lack in-house consulting arms to help them match their needs to third-party providers, whether the services in question are critical to the firm’s core mission or add value around the edges.

Advisers warned of robo-advice ‘cliff edge’ (FT Adviser), Rated: A

A panel of experts at the Chartered Institute for Securities and Investment’s financial planning conference in Newport today (26 September) said robo-advice did not necessarily pose a risk to financial advice as long as advisers adapted.

George Rooke, head of UK portfolio management at Wealthsimple, said there were advisers who would “struggle” because of their refusal to engage with robo-advice.

Michelle Pearce, co-founder of robo-adviser Wealthify, said advisers did not necessarily have to worry about being replaced by companies such as hers.

British Business Bank reaffirms support for fintech in new report (P2P Finance News), Rated: A

THE BRITISH Business Bank (BBB) has published a new report underlining the importance of diverse sources of funding for smaller businesses, including peer-to-peer lending.

The report, titled The Benefits of Diverse Finance Markets for Smaller Businesses, explains why and how the state-backed lender works to increase the number of providers and finance options available to small firms in the UK.

“To date £135m is committed to five fintech alternative lending partners. These partners cover a wide range of products including P2P term loans, invoice finance and merchant cash advances.”

Spotcap Announces UK Fintech Fellowship Winner (Crowdfund Insider), Rated: B

Spotcap, an online lender for SMEs, has announced Mohammed Hussan as the winner of its Fintech Fellowship 2017. The Fellowship awards one aspiring masters or MBA student with a £8,000 stipend towards their studies.

China

Online Insurer ZhongAn Raises $ 1.5 Billion in Hong Kong IPO (Caixin), Rated: AAA

ZhongAn, the online insurance seller with ties to China’s two largest internet companies, raised $1.5 billion from its Hong Kong IPO as investor flocked to the biggest listing to date by a new generation of Chinese financial technology (fintech) companies.

Shares of ZhongAn Online Property & Casualty Insurance Co. Ltd. were priced at HK$59.70 ($7.64) apiece, representing the top of their previously indicated range, according to a company announcement on Wednesday to the Hong Kong stock exchange. The offering raised HK$11.5 billion after being nearly 400 times oversubscribed.

ZhongAn Surges in HK Debut, Boding Well for Future Tech Listings (The New York Times), Rated: A

ZhongAn Online Property & Casualty Insurance Co jumped 18 percent on debut on Thursday after the biggest ever IPO by a financial technology firm in Asia, boosting Hong Kong’s hopes of luring future Chinese technology startups away from New York.

It also bodes well for expected listings from other fintech giants in Hong Kong, including Alibaba affiliate Ant Financial and peer-to-peer lending and wealth management platform Lufax.

Both Ant Financial and Lufax are considering IPOs in the city, sources previously told Reuters, although the timing for the deals is uncertain.

Private wealth in Hong Kong sees double-digit growth in 2017 (The Asset), Rated: AAA

THIS July, Hong Kong’s private wealth management industry recorded a 14% increase in assets under management (AUM) compared to a year ago. Hong Kong’s wealth management professionals believe that the growth is primarily driven by mainland China’s growing wealth, according to a recent report.

The estimated total private wealth in terms of AUM in Hong Kong is over US$800 billion as of July 2017, according to a survey by Private Wealth Management Association (PWMA) and PwC. This is an increase of 14% from US$700 billion in July 2016. PWMA’s annual members survey was produced with PwC in July 2017, with 33 out of 45 PWMA member firms participated.

In the survey, 100% of respondents cited mainland China as the main driver of growth in Hong Kong’s private wealth AUM. This may be unsurprising, as China has become home to the highest number of billionaires in the world. According to Hurun Report in 2016, China now has 568 billionaires, surpassing the 535 billionaires in the US, and now ranks first globally.

China’s Ant brings in CK Hutchison as Hong Kong payments partner (Reuters), Rated: A

Ant Financial, the payment affiliate of Alibaba Group Holding Ltd, said it will create a joint venture this year with CK Hutchison Holdings Ltd to operate its payment app in Hong Kong, ending Ant’s solo management of the service.

The new venture will allow Ant Financial’s Alipay to offer services via companies under CK Hutchison, which operates ports, retail, infrastructure and telecommunications businesses across 50 countries.

Ant Financial currently operates its payment app under the Alipay brand in Hong Kong, which offers transaction services at around 4,000 outlets in the city. The new joint venture will take over operation of the app, though it will still be branded Alipay, it said on Tuesday.

European Union

Fintech Group signs Kommunalkredit (Finextra), Rated: A

Kommunalkredit is a specialist bank for infrastructure financing based in Vienna, with a branch office in Frankfurt am Main. Its new online offering KOMMUNALKREDIT INVEST targets retail investors, who want to deposit their savings at attractive conditions. Their funds will be used to support key infrastructure investments made by Kommunalkredit such as schools, hospitals, care homes, wind farms, solar energy installations, waste-to-energy facilities, and transport projects.

FinTech Group provides a broad range of fully digital solutions and interfaces for KOMMUNALKREDIT INVEST: they include frontend processes such as online account openings, e-banking, and identification solutions such as video identification, e-signature and mTAN. On the backend side, FinTech Group will also run a data warehouse and carry out compliance monitoring as well as regulatory reporting.

Milan opens ‘Fintech District’ (Finextra), Rated: B

Thirty firms – ranging from start-ups to established corporates – have already selected the Fintech District as their home; they include businesses working in crowdfunding, peer-to-peer lending, blockchain and cryptocurrency-based technologies, and robo-advisory.

International

FinTech Has Yet To Make Impact On Trade Finance Gap (PYMNTS), Rated: AAA

Trade finance revenue is slipping at the world’s largest banks, especially as companies struggle in a global trade environment operating with a $1.5 trillion gap in trade finance availability.

According to the ADB’s latest survey findings, though, outlined in its Trade Finance Gaps, Growth and Jobs report, FinTech players have yet to make a meaningful impact on the trade finance industry.

The survey polled more than 515 banks and 1,336 companies across 103 countries, finding that FinTech innovators can, indeed, help address the $1.5 trillion trade finance gap which disproportionately impacts small- and medium-sized businesses (SMBs).

Approximately one-fifth of the companies surveyed said they had used some type of digital finance, alternative lending or FinTech platform to access trade finance, according to the ADB results.

Leveraging Alternative Data to Energize Your Lending Portfolio (LendIt), Rated: A

Banks aren’t just dealing with customers who want lending and credit information faster. Government regulations are also requiring them to do so, such as Australian banks requiring affordability checks as part of new consumer loans.

Venkat Srinivasan, Head of Lending at Monzo, said that as a new digital bank, they began to question why it was often a month or two months before consumers could see the transaction come through on their banking or credit card. Venkat noted that while technology is improving and customers are evolving, data availability is evolving at the same time.

Roger Vincent, Head of Banking and Innovation at Equifax, discussed how they’re finding new ways to store data, facilitate data movement, and turn data into insights in the form of scores and characteristics.

Phil Grady, CEO of Castlight Financial, discussed how they created a business that has taken traditional credit data from consumers and integrated it with transactional data. This involves categorizing income and expenditures, and then determining essential expenditures versus non-essentials. This enables Castlight to determine consumers’ real disposable income, which in turn helps lenders make better lending decisions. This type of granular level data has allowed Castlight to create the first real-time Financial Capability Formula.

Only three per cent of advisers offer robo-advice (AltFi), Rated: A

Only three per cent of 162 advisers surveyed said they offered fully automated wealth management services, the research found.

The study, which was conducted by research firm Platforum on behalf of JP Morgan, also found that only 14 per cent plant to implement it in the next two years.

Australia

Alternative Finance: Australia Becoming Regional Leader (Canstar), Rated: AAA

Australia’s alternative finance market has grown by 53% over 12 months according to a report released by KPMG, becoming the second largest in the Asia-Pacific region.

The report revealed Australia’s alternative finance market increased from US$27 million in 2015 to US$610 million in 2016 as Aussies turn to peer-to-peer lending (P2P), balance sheet business lending and crowdfunding.

In the US$245.28 billion Asia-Pacific alternative finance market, China was found to be the leader, accounting for 99.2% and representing 85% of the total global market.

P2P consumer lending was Australia’s second most popular alternative finance model behind balance sheet business lending, increasing from US$43 million in 2015 to over US$158 million in 2016.

India

Funding Societies introduces Miyu, the friendly Chatbot (Business Insider), Rated: AAA

Funding Societies, Singapore’sand Southeast Asia’s leading crowdfunding platform, has announced the launch of its chatbot Miyu. This is the first such chatbot created by a crowdfunding company in Southeast Asia. Miyu works round the clock to answer queries that a business owner or an investor may ask about the products and services offered by Funding Societies.

“We created Miyu via self-learning with guidance from our seniors. She is different from most other chatbots in the financial services space. Personally, I like that Miyu can escalate to human support whenever required, giving our users a seamless experience,” said Sherman Lim, who is a Singaporean and majors in Economics and Strategic Management at Singapore Management University (SMU).

The future plans for Miyu include acting as a Virtual Relationship Manager who can assist SMEs in loan application, and help investors navigate through the platform, initiate video chats with real customer experience managers as well as perform account opening and management activities such as investments, deposits, withdrawals, etc. without human intervention at any time of the day.

Fintech firms look to disburse loans, offer digital expertise under Mudra (livemint), Rated: A

Financial Technology (Fintech) firms are in early discussions with the government and Micro Units Development & Refinance Agency Ltd (MUDRA), exploring opportunities under the Pradhan Mantri Mudra Yojana (PMMY), said three people close to the development.

So far, PMMY loans have been extended by all public sector banks, regional rural banks (RRBs), cooperative banks, private sector banks, foreign banks, micro finance institutions and non-banking finance companies. Fintech companies have not been involved yet.

Under Shishu, refinancing is provided for loans up to Rs50,000. Kishor offers refinancing for loans above Rs50,000 up to Rs5 lakh whereas, Tarun provides refinancing for loans above Rs5 lakh up to Rs10 lakh. Mudra also offers services like credit guarantee for micro units and securitization of loan assets against micro enterprise portfolios.

Middle East

Dubai Economy signs new deal to develop emCash (Tahawul Tech), Rated: A

Emcredit, a subsidiary of Dubai Economy, and the UK-based Object Tech Group have signed a partnership deal to facilitate financial transactions through contactless payment.

Emcredit and Object Tech will develop a competitive, accountable and legally compliant emCash ecosystem together. Several associated products to protect emCash wallet and digital documents, enable direct real-time settlement and peer-to-peer lending, and provide credit rating based on the distributor ledger of emCash will also be developed.

emCash is based on blockchain technology and will be the digital currency in emPay wallet. The payment method, according to Dubai Economy, will allow the UAE residents to make varied payments through the near field communication (NFC) option on their phones. With emCash, emPay users will have the option of a secure digital currency, and merchants can receive such payments in real time without going through intermediaries.

Canada

The Digital Banking Underdog: Toronto Emerges as Global FinTech Leader (Let’s Talk Payments), Rated: A

It’s estimated that in 2017 alone, nearly $60 billion worth of payments will be made on mobile platforms. Comparing these figures to just two years ago, only $8.71 billion worth of transactions were made digitally in 2015.

In line with other frontrunners in the industry, such as London, Silicon Valley and New York City, Toronto, Canada, my hometown, stands apart as an emerging FinTech ecosystem, and it’s become a well-recognized leader amongst the largest and most stable financial centers in the world.

Ontario has been a global leader in digital payments for more than a decade, with Toronto leading in a high concentration of cryptocurrencies,blockchain, alternative lending and e-commerce growth verticals.

Authors:

George Popescu
Allen Taylor