Friday March 30 2018, Daily News Digest

Friday March 30 2018, Daily News Digest

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

Friday March 30 2018, Daily News Digest

News Comments

United States

United Kingdom

China

Other

News Summary

United States

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

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

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

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

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

Source Heap

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

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

Source Heap

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

 

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

Theory and Practice

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

Foreign currency

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

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

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

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

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

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

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

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

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

China

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

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

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

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

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

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

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

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

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

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

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

European Union

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

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

International

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

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

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

“ERC-20” FOR REAL ESTATE

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

 

Asia

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

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

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

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

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

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

Blockchain: facilitating real estate transactions

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

Artificial intelligence: extracting insights from data

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

Proptech: transforming real estate in Singapore

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

MENA

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

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

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

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

Authors:

George Popescu
Allen Taylor

Tuesday February 20 2018, Daily News Digest

Loan Charge Rates

News Comments Today’s main news: Cross River Bank, PeerIQ partner on loan data.Coinbase to offer crypto payments service to compete with PayPal.Better Mortgage hits $1B in mortgage loan funding.LendingClub updates Truth in Lending Statement.Zopa to launch a credit card.Funding Circle plans IPO at $2.1B valuation.Prospa ranked #1 among high-growth firms in APAC. Today’s main analysis: […]

Loan Charge Rates

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

APAC

Other

News Summary

United States

Fintech-friendly Cross River Bank partners with PeerIQ on loan data (American Banker), Rated: AAA

Cross River Bank in Fort Lee, N.J., has entered into a partnership with PeerIQ, a provider of consumer loan data analytics, in an effort to streamline capital sourcing between online lenders and institutional loan buyers such as small banks.

Coinbase Now Powering Payments in Digital Currency (Crowdfund Insider), Rated: AAA

Coinbase, one of the largest cryptocurrency exchanges in the world, has launched Coinbbase Commerce, a payments platform that allows merchants to accept digital currency anywhere, anytime.

Millennials SME Owners Prefer Online Alternative Lenders to Tradtional Ones (Bank Innovation), Rated: AAA

According to Mercator’s report, Business Banking Services: Keeping Up with Millennial Owners, 27% of total U.S. SMEs have used online alternative lenders (P2P lenders or marketplace lending platforms) in 2017.

Of this number, 48% of millennial owners (aged 18–34), currently have a loan from an alternative lender compared to 25% of SMEs run by owners over 35 years of age. Further, these millennial owners said they are twice as likely to use alternative lenders than their older counterparts.

Source: Bank Innovation

P2P lending soars but SMEs generally wary of finance (P2P Finance News), Rated: A

The 2018 Small Business Finance Markets report, released on Tuesday, found that P2P business lending rose by 51 per cent in 2017. In contrast, bank lending to UK small- and medium-sized enterprises (SMEs) fell to £700m in 2017 from £3bn the previous year.

Despite increased demand for alternative finance, the report found that 70 per cent of smaller businesses would rather forego growth than borrow. The BBB’s analysis found that only 1.7 per cent of small firms sought new loans over the last 10 quarters – a record low since its index began in 2011.

Less than half (43 per cent) of businesses surveyed were confident they would get a loan if they applied, even though most new loan applications (72 per cent) are approved.

Better Mortgage Hits $ 1 Billion Dollars in Mortgage Loans Funded after Launch in January 2016 (BusinessWire), Rated: AAA

Better Mortgage, a digital mortgage company focused on improving access to home financing for a new generation of homeowners, announced that it has funded over $1 billion dollars in mortgage loans to date. Better launched in January 2016, making it the third fastest online lender to reach this $1B milestone — per research published by Lend Academy in July 2017.

The Case for M&A (Why Banks Should Buy Online Lenders) (PeerIQ), Rated: AAA

Tech firms have already demonstrated they can open these markets. The largest money market fund in the world, Ant Financial’s four-year-old Yu’e Bao, was built on a sweep from the AliPay payments product. Intuit can utilize proprietary accounting and tax data to underwrite (and acquire) borrowers in novel ways. Amazon can underwrite small businesses using inventory turnover and reams of customer data.

“Big Tech” firms also have proprietary platforms and channels – in-home (think ‘Alexa’), apps, in-car, and mobile to name a few.  However, in the US – at least for now – Big Tech firms lack a regulatory “swimlane” to compete with banks in lending and payments on a national scale. Their non-bank and commercial status confines their activities to narrow forms of lending, affinity partnerships, and lead generation. Until that impediment is dissolved, “Big Tech” firms need to partner with national banks with unsecured lending capabilities to fully unlock these markets.

Our argument is that banks without an unsecured lending capability risk losing long-term customer relevance. Banks that do not have an unsecured lending business do not have a seat at the table.

Source: PeerIQ

Which Banks are the logical buyers?

Banks that have the following characteristics would make a short-list of likely acquirers:

  • Are active in lending, but have a gap in unsecured consumer loans
  • Banks with asset management or structured products arms that can package loans into new products (e.g., ABS offerings, investment vehicles, etc.). Also, banks that have aspirations to develop a robo-advisor
  • Banks that have a demonstrated history of partnering with FinTechs
Source: PeerIQ, SEC filings, bank corporate websites

We assume underwriting and loan terms similar to those today (e.g. ~700 credit score, 15% coupon, $15k principal, 3 to 5 year term). We assume annual charge-off rates of 5%. We assume a 1.5% deposit funding charge and a leverage ratio of 15%.

We find that a bank can generate 10% NIM, 2 to 3.5% ROA, 15 to 20% marginal-ROE during good times.

Update to Truth in Lending Disclosure Statement (Lending Club), Rated: AAA

As of Friday, February 23, 2018, recent updates made to the Truth in Lending disclosure statement for unsecured consumer loans will take effect. The forthcoming Truth in Lending disclosure statement is available here.

Will LendingClub Turn a Corner in 2018? (Guru Focus), Rated: A

LendingClub has a market cap of about $1.6 billion, which makes it one of the biggest players in the peer-to-peer lending market.

The company’s stock price has plunged nearly 40% over the last four months and this could continue unless the upcoming earnings call changes investor sentiment. LendingClub was valued at about $9 billion in late 2014 but it has dropped to about $1.6 billion.

Source: Guru Focus

Pricey personal loans would be outlawed by bill that would reshape state lending industry (Los Angeles Times), Rated: AAA

A bill introduced Thursday by Assemblyman Ash Kalra (D-San Jose) could dramatically reshape California’s lending industry by capping interest rates at roughly 20% for consumer loans between $2,500 and $10,000. Since rate caps were removed by the Legislature in the 1980s, there’s been no limit to the amount of interest lenders can charge on those loans.

That has led to startling growth in the market. In 2016, more than half of the loans between $2,500 and $5,000 and about 21% of larger loans charged interest rates of 100% or higher. In all, Californians in 2016 — the most recent year for which state data are available — borrowed $1.1 billion at triple-digit interest rates.

But Kalra’s bill would do much more than ban lenders’ priciest offerings. The bill would extend an existing set of rate caps that now apply to loans of less than $2,500 to all loans of up to $10,000. That would cap interest rates at roughly 19% for loans up to $10,000.

Had the caps been in effect in 2016, 98% of loans between $2,500 and $5,000 and 95% of loans up to $10,000 would have been outlawed. Only about $91 million of the $2.7 billion in loans made in those sizes in 2016 had rates below 20%.

BFS Capital Announces New 5 Million Credit Line (BFS Capital Email), Rated: A

BFS Capital, a leading small business financing platform, today announced it is has received a new $175 million revolving credit line provided by funds managed by Ares Management, L.P. BFS Capital will use the new facility to accelerate the growth of its lending business, following a record year where the company generated more than $300 million in originations, a new annual high.

Braviant Holdings Announces $ 7 Million Equity Raise (Braviant Email), Rated: A

Braviant Holdings, a leading fintech startup that uses advanced analytics and proprietary technology to make smarter lending decisions, has raised $5 million common equity from Loom Capital, LLC. Alongside the equity investment, Braviant has entered into an exclusive partnership with a subsidiary of Trend Capital, a tech-enabled digital marketing platform affiliated with Loom.

VPC’s portfolio sales drag on performance (P2P Finance News), Rated: A

VPC Specialty Lending Investments has reported a total net asset value (NAV) return of 3.07 per cent for 2017 – below its target return levels.

PeerStreet Review (Benzinga), Rated: A

In addition, “accredited investors” need only apply. Investors must have a net worth greater than $1 million in liquid assets (meaning the equity in your home doesn’t count) or you need to earn more than $200,000 per year or make $300,000 jointly.

PeerStreet’s minimum investment is $1,000 and account fees range from 0.25% to a 1% setup fee. The investment length ranges from six to 24 months.

Marla Blow of FS Card (Lend Academy), Rated: A

In this podcast you will learn:

  • How Marla’s time at the CFPB indirectly led to the founding of FS Card.
  • Why creating a new credit card company is so complicated and challenging.
  • What their Build card is and who is their target market.
  • How they are able to offer an secured credit card to people that banks reject.
  • The types of data they use to find stable customers in the subprime segment.
  • The typical size of the credit line they provide to these customers.
  • The profile of their target customer and how they are using the credit card.
  • How they are providing financial education to these people.
  • How FS Card is acquiring these credit card customers.
  • The percentage of their customers who have qualified for credit line increases.
  • Why improving credit scores of their customers is a key metric.
  • How they are able to issue these cards through their partner bank.
  • How FS Card makes money.
  • What regulators could be doing to help subprime consumers get more access to responsible credit.
  • What more should fintech companies be doing to help these underserved people.
  • The biggest challenges that FS Card has to overcome to become a large and successful credit card company.

How does real estate investing benefit from technology (Realty Biz), Rated: A

Buying and selling property has already become much more accessible due to technology, and this trend is only going to speed up. While historically, real estate professionals, investors, and landlords have been reluctant to pay for technology, and the data available has been spotty, the tide is turning as more wake up to the opportunities. Investment values are shooting up in many places due in a large part to technological advances, including the ability to market real estate to audiences beyond the immediate community and to close deals securely, quickly, and remotely with investors.

BBVA taps digital start-up Azlo to target US freelance market (Fintech Futures), Rated: A

BBVA has partnered with digital business account provider Azlo to target the freelance market in the US.

According to BBVA, by 2020 in the US alone, 43% of workers will be employed in freelance capacities – a trend that is expected to continue to grow.

Goldman Sachs and rivals home in on risky consumer banking (Financial Times), Rated: A

Lloyd Blankfein was a breezy opening act at a big industry event this week in Key Biscayne, Florida. On stage at the Ritz-Carlton the chairman and chief executive of Goldman Sachs was talking about Marcus, the bank’s new online savings and lending platform, which is targeting borrowers with scores as low as 660 on the 300-850 Fico scale. Goldman calls such people “creditworthy”; others call them subprime.

Banks Urged to Take On Payday Lenders With Small, Lower-Cost Loans (WRAL), Rated: A

Those who find themselves pinched for cash often turn to high-cost payday lenders. But traditional banks and credit unions could serve that role for borrowers and do it at much lower rates, according to a new proposal from the Pew Charitable Trusts.

B of A’s Moynihan: Big banks are ‘fine’ with Dodd-Frank (American Banker), Rated: A

While small and regional banks are pushing for a rollback of the Dodd-Frank Act, big banks are largely supportive of the 2010 financial reform law, Bank of America CEO Brian Moynihan said Thursday.

African-American Entrepreneur Launches Innovative Mobile Tax Refund Loan App to Revolutionize the Tax Industry (Black News), Rated: B

Good news for Americans struggling with income tax returns given the recent changes in the tax laws with the enactment of The PATH ACT. A visionary African-American entrepreneur, Marshawn Govan, has come up with an innovative mobile tax refund loan app that is all set to revolutionize the tax industry and make tax returns simpler for Americans.

Titled as MKG Tax Refund, the state of the art program is a patent pending mobile tax refund Collateral Driven Interest & Investment (SaaS) Software-as-a-Service (FOF) Fund-Of-Fund multi-manager investment application.

Add Another Bank to Fintech Roostify’s Roster of Investors (Bank Innovation), Rated: B

If there’s any question that digital mortgage firms are gaining attention from larger fintech players and investors, then look no further than venture capital firm Santander InnoVentures‘ investment in Roostify, a startup that digitalizes the mortgage application process.

French asset manager signs record deal in the Meatpacking District (The Real Deal), Rated: B

Tikehau Capital, a Paris-based firm with $15.6 billion in assets under management, signed a lease for the top two floors at Rockpoint Group’s new development at 412 West 15th Street, sources told The Real Deal.

The 11-year lease covers nearly 10,000 square feet on the top two floors of the 18-story building, which offer sweeping views of the Hudson River.

Lawmakers highlighted that H.R. 3299 — the Protecting Consumers’ Access to Credit Act of 2017 — clarifies current law to ensure innovative marketplace lending remains in-tact while simultaneously providing safe consumer protections.

H.R. 3299 passed through the House by a vote of 245-171 and went on over to the Senate, which received it, read the measure twice and referred to the Committee on Banking, Housing and Urban Affairs.

United Kingdom

Zopa on hiring drive to support credit card launch in 2018 (P2P Finance News), Rated: AAA

ZOPA is recruiting staff to develop its new credit card, which it plans to launch later this year as a feature of its digital bank.

Temasek-backed Funding Circle plans IPO at .1b valuation (Deal Street Asia), Rated: AAA

Funding Circle, the largest peer-to-peer (P2P) lender in the UK, is planning to list on the London Stock Exchange (LSE) that will see it float at an estimated valuation of £1.5 billion ($2.1 billion), according to a report by Britain’s Sky News.

Funding Circle set to hire Morgan Stanley to lead London flotation (P2P Finance News), Rated: A

FUNDING Circle is reportedly poised to hire Morgan Stanley to lead a flotation on the London Stock Exchange in the second half of this year.

The largest P2P platform by loan book size in the UK is expected to hire the US bank in the coming weeks, according to Sky News.

Lendy reports 224% turnover increase (Bridging&Commercial), Rated: AAA

Lendy has revealed a 224% turnover increase in 2016 (to £29.2m), compared with the previous year (2015: £9m).

The P2P lending platform has published its audited accounts for 2016, which also showed that profits before tax increased to £3.3m, compared with the £53,000 reported in 2015.

Lending Works chooses Credit Kudos to power new Open Banking initiative (Finextra), Rated: A

Credit Kudos, a challenger credit bureau, and Lending Works, a fast-growing peer-to-peer (P2P)  lending platform, are partnering to enable customers to benefit from the UK’s Open Banking  initiative, a secure way for banking customers to take control of their financial data. Credit Kudos  and Lending Works’ partnership is one of the first initiatives to use Open Banking to improve  customer experience in the finance industry.

Currently, approximately 60% of Lending Works’ borrowers are provided with  instant and automated credit decisions, whereas the remaining 40% require some manual  processes. Within the new world of Open Banking, Lending Works expects to increase that figure  to up to 90% of credit decisions being fully automated.

Small businesses look to specialist lenders for loans (Financial Times), Rated: A

British small businesses are diversifying their sources of funding away from big banks, as a growing number turn to specialist asset-backed lenders, peer-to-peer finance sites, private equity and venture capital investors.

Fewer small businesses are applying for loans than in the past five years and more of them fear that if they did they would be rejected, according to the latest report into small business finance by the British Business Bank, a government-backed development bank.

Out of the UK’s total of 5.7m small businesses, only 1.7 per cent applied for a loan or overdraft last year, the fifth consecutive year of decline since 2012.

There’s never been a better time to seek alternative finance (Belfast Telegraph), Rated: A

There are also several privately funded lenders (with a local presence in the province through brokerages) such as Atom Bank, Relendex, Thin Cats and Dunluce Capital which have all completed a number of deals in Northern Ireland from cash flow loans to property development finance.

The Access to Finance initiative supported by Invest Northern Ireland offers a variety of support including start-up funding, loans and equity investment.

WhiteRock Capital Partners manages the £50m NI Growth Loan Fund (Access to Finance) which offers loans from £50k to £1.25m to local SMEs. With an extensive network of funding partners, we work hard to deliver the most appropriate support for local businesses.

ArchOver readies for IFISA launch (P2P Finance News), Rated: A

ARCHOVER is planning to launch its Innovative Finance ISA (IFISA) in the next few weeks.

Crowdfunding Comes of Age (moneyexpert), Rated: A

Crowdfunding is gaining serious traction in the UK market, with the sector pushing past the £10 billion milestone in 2016. While, most people will probably still associate the idea of ‘crowdfunding’ with websites like Kickstarter or early stage equity investments, the reality is that 97% of the market is debt-based – either P2P lending or Crowd Bonds.

Both P2P lending and Crowd Bonds are also making big strides into the mainstream thanks to their inclusion in the new(ish) Innovative Finance ISA (IFISA), which allows investors to earn interest tax free on their investments.

It’s time to get clear on the Innovative Finance ISA (moneyexpert), Rated: A

With the birth of the Lifetime ISA (LISA) for 18-39 year olds on 6 April 2017, the Innovative Finance ISA (IFISA) is no longer the baby of the ISA family. But it is perhaps still the least well understood.

The peer-to-peer lending industry celebrates its 13th birthday this year. Has it finally grown up? (Verdict), Rated: B

Whether that’s Paypal in the US or the start of the peer-to-peer lending industry (P2P) in the UK, financial services were changing long before the global recession hit.

The P2P industry is celebrating its 13thbirthday this year. With big changes afoot in its major players such as Zopa, as well as Funding Circle, what is next for P2P lending?

China

China Gets Pushback on New Rules to Curb Lending Practices (WSJ), Rated: AAA

Chinese regulators and commercial banks are butting heads over new rules Beijing is rolling out to tackle off-the-books lending that’s compounding China’s debt woes.

Particularly targeted are practices banks use to move loans off their books by repackaging them as investments. Banks transfer the loans—mostly corporate and local government borrowings—to brokerages and other types of shadow lenders, which then peddle the rebundled investments to investors. Such maneuvers accounted for $3.5 trillion in off-balance lending as of last year.

European Union

Online Lending Market Growth Continues With Spanish Purchase (Prague Post), Rated: AAA

Wonga’s latest acquisition is Spanish company Credito Pocket, who was a lending company based in Barcelona. This is aimed to boost the visibility of their Wonga.es domain.

BinckBank and Raisin double up for Dutch savings market (Fintech Futures), Rated: A

BinckBank says it will be the first in the Dutch banking sector to offer its clients access to European savings products via its cooperation with Raisin.

Augmentum Fintech to raise £100mln to cash in on Europe’s financial disruption (Proactive Investor), Rated: A

A new trust aimed at Europe’s fast-growing fintech sector is looking to raise £100mln ahead of a float in London.

Augmentum Fintech PLC said the financial services sector is ‘ripe for disruption and disintermediation’ but, unlike other sectors such as retail and travel, this has yet to happen.

ING Diba Buys Lendico (P2P Banking), Rated: A

Bank ING Diba acquires p2p lending marketplace Lendico. According to Finanz-Szene.de the transaction was reported to the German Federal Cartel Authority last week. The bank has confirmed the acquisition.

International

Digital Identity Pioneer IdentityMind Global Lands $ 10M (Coverager), Rated: AAA

IdentityMind Global, the leader in Digital Identities You Can Trust, today announced that it has closed a $10M Series C round of financing. In addition to all existing investors, the round was co-led by Benhamou Global Ventures and Eastern Link Capital and included Hanna Ventures, Overstock.com, and Zanadu Capital Partners.

Coin-backed P2P platforms shrug off crypto volatility (P2P Finance News), Rated: A

Digital currencies such as Bitcoin and Ethereum suffered from price falls in January but many firms are still seeing the benefits of creating their own cryptocurrency to use for P2P lending. One provider, SOFIN, is currently looking to raise up to $1m (£720,000) to create a token that can be used as a tool to bypass high exchange rates so loans can be funded internationally.

FintruX’s whitelist closes in 11 days (AMBCrypto), Rated: B

The global P2P lending ecosystem, FintruX backed by Ethereum and No-Code development has reopened the Token Sale, FTX which is used to power the FintruX network and is set-up as a mean to reward or get rewarded for participating in the marketplace. The token’s minimum per transaction at present is 0.1 ETH.

Harnessing the Full Potential of the $ 600 Billion Crypto Network (NewsBTC), Rated: B

Gluwa and Aella Credit are the two fintech companies that have come together to create a blockchain based protocol that will allow investors to lend in any crypto.

These two companies plan to launch Creditcoin, which will operate across blockchains in the P2P lending market.

The Gluwa platform, to be powered by Creditcoin, will address the issues of accessibility of the crypto market by those in the fiat world by seamlessly connecting them with cryptocurrencies.

GISC LoanCoin Network (NewsBTC), Rated: B

GISC LoanCoin Network is a utility token based lending and borrowing platform that allows users to leverage their blockchain assets to secure cash loans. The network is optimal for P2P and B2B credit financing on a global scale.

iP2PGlobal Announces Its Pre-ICO Crowdsales For Its TWQ Token On Feb 19 (CoinTelegraph), Rated: B

The TWQ (Tawarruq) is an ERC20 token that confer the right to the token holder to submit an application for a personal financing based on a Commodity Tawarruq Trading program, through the iP2PGlobal platform and have it listed in the platform for prospective lenders to view and choose to finance.

10TWQs are needed to apply for a personal financing of up to 5ETH.

Australia

Australian Online Lender Prospa Ranks #1 in List of High Growth Firms in Asia Pacific (Crowdfund Insider), Rated: AAA

Prospa, a Sydney based online lender servicing the SME market, has received a nice recognition as it took the top spot for a high growth firm in Asia Pacific. According to a recent ranking of the top 1000 firms in Asia-Pacific by the FT, Prospa ranked number one having experienced revenue growth of 1600% during the time period of 2103 to 2016.

Payday lender Nimble Money up for sale, bids due this week (Financial Review), Rated: A

Privately owned personal loans company Nimble Money is on the block, with its two founders believed to be seeking an exit.

Street Talk can reveal Melbourne-based Baillieu Holst has been hired to find a buyer for the business and has been marketing the short term loans provider to financial services industry players and private equity firms in recent weeks.

Interested parties have been told Nimble Money is on track to make about $15 million in earnings this year, following significant growth in its loan book over the past 12-months.

It’s expected to be worth about $100 million.

Loans.com.au slashes variable rates for home buyers (Canstar), Rated: B

Online lender loans.com.au has cut interest rates on its variable rate home loan to just 3.52% (3.56%* comparison rate).

Comparatively, the next lowest variable home loan for owner-occpupiers at the time of writing sits at 3.54% (3.55%* comparison rate).

Over $ 11.5 million lent by payday loan alternative (finder), Rated: B

BaptistCare has approved 16 loans per week to some of Australia’s most financially vulnerable people.

The No Interest Loan Scheme (NILs), a microfinance program aimed at providing small no- and low-interest loans to financially vulnerable people, has this week announced it has surpassed $11.5 million lent in NSW. The loans are designed to help people on lower incomes purchase essential goods and services.

The loans are provided through BaptistCare with the scheme run under Good Shepherd Microfinance in partnership with NAB and the NSW Office of Fair Trading.

India

Financial services execs invest in fin-tech startup Fincash (VC Circle), Rated: AAA

Mumbai-based personal finance startup Fincash.com has raised Rs 1 crore ($150,000) in a fresh funding round from a group of angel investors from the financial services sector, a company statement said.

The startup will use this money to build its team, expand its product line, acquire customers and make its services available across more cities and towns, the statement added.

Fintech startup Aye Finance raises Rs 25 cr from Vivriti Capital (Economic Times), Rated: B

Fintech company focussed on the MSME sector Aye Finance has raised Rs 25 crore through a securitisation deal facilitated by Vivriti Capital.

APAC

Lendit’s accumulated volume of loan tops W100b (The Korea Herald), Rated: AAA

Lendit, a peer-to-peer lending platform operator in South Korea, has extended a combined 101.8 billion won ($95.4 million) in nearly 7,300 consumer loans as of Monday to midrange borrowers seeking lower interest rates, according to the fintech startup Monday.

How VC Firm Magma Partners is Tapping Into the Untapped Chilean Fintech Market (Bank Innovation), Rated: A

With government-backed initiatives and a finite business of copper export, Nathan Lustig, co-founder and managing partner at Magma Partners, saw huge potential in the Chilean fintech market.

Lustig points out that only 30% of Chileans have credit cards, while only 50% have bank accounts, “and that’s the more advanced population,” he said. Additionally, consumer experience is “pretty horrible for about 80% of this population,” he said.

One area within the fintech space that Magma has been particularly interested in is invoice-based lending, also known as factoring. In its portfolio is Portal Finance, a startup that provides SaaS for the factoring industry.

Portal Finance earns between 0.5% to 1% for every deal the bank accepts.

Talad platform offers SME loans based on invoice collateral (The Nation), Rated: B

Talad Invoice, a lending platform initiated by a fintech startup, is expected to grow at an exponential rate this year, following two years of peer-to-peer lending using invoices as loans collateral, said Watewiboon Pumipue, chief executive officer of D90 Capital Co, which operates the financial platform.

Finda envisions online financial marketplace (The Korea Herald), Rated: B

Finda operates an eponymous web portal that provides information about over 7,000 financial products — ranging from personal and mortgage loans, investment instruments, credit cards to insurance products — standardized in Finda‘s own format. Users can be offered easy-to-understand and up-to-date information about products online, she said.

Finda gathers information primarily from an open API by the Financial Supervisory Service, but since the FSS’ database provides data, including interest rates, of the previous months, Finda reflects updates directly from sellers — banks, insurers, credit card firms and peer-to-peer lending platforms.

Africa

Global Startups Boot Camp Coming To Rwanda (KTPress), Rated: A

Rwanda will next month host a continental Startup boot camp (SBC) that will source innovative and top startup talents in the country and across the globe.

SBC is a global family of industry-focused accelerators, which last year launched its first-ever Africa-based programme.

Canada

KiWi’s marketplace loans set for imminent Canadian debut (Financial Post), Rated: A

The next stage in the development of Canada’s first credit fund that invests in marketplace loans — unsecured consumer and small business loans provided by online lending companies — is set to play out over the next month.

The gang behind KiWi Private Credit Fund — formed last summer with $30 million of contributions from institutional and high-net-worth investors — is planning to meet the Canadian platforms.

Russia

Microfinancers warn Central Bank of return to 90s (Realnoe Vremya), Rated: A

The regulator has been fighting against expensive and very risky loans for several years already. Last July it tightened reserve requirements for MFO again: they must add 100% interest for payday loans with a delay of more than 90 days.

Firstly, the regulator is going to restrict the size of payday loans to 10,000 rubles, secondly, to reduce the biggest term of such loans to 15 days, thirdly, to reduce interest rates to 1,5% in 2018, to 1% in July 2019 a day. Now the largest payday loan is 45,000 rubles. The maximum term is 2 months, while extra payment on such loans is limited to a threefold size of a loan.

Payday loans account for 57,6% of all loans that MFOs granted in the second quarter of the last year.

Authors:

George Popescu
Allen Taylor