Thursday September 19 2019, Weekly News Digest

MAS Singapore

News Comments Today’s main news: SoFi to get its name on a football stadium. Petal raises $300M. Funding Circle closing in on 1-year anniversary of float. Zopa sends warning of imitation scams. Cumulative UK alt lending hits 11.3B GBP. Companies to get social credit in China. Today’s main analysis: Student loan refinancing rates are down. […]

The post Thursday September 19 2019, Weekly News Digest appeared first on Lending Times.

MAS Singapore

News Comments

United States

United Kingdom

China/Hong Kong

International

Other

News Summary

United States

Sundays at SoFi: NFL Stadium in Inglewood Lands a Corporate Name (Commercial Observer), Rated: AAA

Online lender SoFi Lending Corp. has secured the naming rights and a 20-year deal with the Rams and Chargers, according to the Los Angeles Business Journal. The firm agreed to pay around $20 million per year, reports say.

SoFi Stadium, which will be the largest in the NFL, is the centerpiece to the much larger $5-billion Hollywood Park project developed by Rams Owner/Chairman E. Stanley Kroenke. Construction is 75 percent complete, and the stadium is expected to open next summer for other events before the NFL preseason begins in August.

Taylor Swift to Open SoFi Stadium Next Summer (KFI AM 640), Rated: B

The opening of the $2.6 billion SoFi Stadium will happen next summer on July 25th. However it’s not for a Rams or Chargers game. Swift announced that she will play two shows (July 25th and July 26th) at the stadium as a part in her much-anticipated 2020 world tour.

Economy is Top Concern for Small Businesses Ahead of 2020 Election (OnDeck), Rated: AAA

Key Findings from the OnDeck Small Business Survey:

  • Economic concerns arise in several dimensions, including tax policy, job growth, support for small businesses, government spending and the overall economic climate. These issues were cited as the top concerns of more than 33% of those surveyed;
  • Immigration was an issue of interest for 11.3% of small business owners surveyed, ranking second behind the economy as a concern.
  • 57% of small businesses surveyed said they were either ”Very Optimistic” or ”Somewhat Optimistic” about the economic outlook for their businesses;
  • 93% of those surveyed said they plan to vote in the 2020 election.
  • 60% of small business owners surveyed said they already know who they plan to vote for in the 2020 presidential election.

President Donald Trump was the choice of 37% of small businesses surveyed, followed by Joe Biden at 18%. When combined, the top five Democratic candidates were the preference of 44% of respondents.

Student Loan Refinancing Rates Down Sharply (Credible), Rated: AAA

During August:

  • Rates on 10-year fixed-rate loans averaged 4.70%, down 22% from a July 2018 peak of 6.05%
  • Rates on 5-year variable-rate loans averaged 4.03%, down 14% from September

A borrower repaying the average graduate school debt of $84,300 over 10 years at 6.36% interest — the average rate for grad school loans in recent years — could save:

  • $20,927 by refinancing into a 5-year variable rate loan
  • $8,327 by refinancing into a 10-year fixed-rate loan

Credit card start-up Petal raises $ 300 million debt round from Jefferies (CNBC), Rated: AAA

The New York City-based company announced a $300 million debt round from Jefferies on Tuesday, adding to existing venture capital investments from names like Peter Thiel’s Valar Ventures.

Plaid adds credit card data to Liabilities product (Tearsheet), Rated: A

In July, Plaid launched its Liabilities product that gives developers access to real time information about what consumers owe. Expanding beyond student loan data, the company has added support for credit card information, so firms can build better debt management solutions.

GoCardless launches US debit payments solution and opens San Francisco office (TechCrunch), Rated: A

GoCardless, the London fintech that aims to become the one-stop shop globally for businesses that want to let customers pay via recurring bank payments, has launched a U.S. debit solution.

Specifically, GoCardless’  new U.S. product supports debit payments on the ACH (Automated Clearing House) network.

The company has also opened an office across the pond in San Francisco’s financial district, headed up by Andrew Gilboy, general manager, North America, who was previously the company’s chief revenue officer.

Nav Launches New Feature to Help Business Owners Boost Business Credit (PR Newswire), Rated: A

Today Nav, a fintech company that matches business owners with their best financing options for free, announced new offerings to help small business owners boost their business credit scores, giving an easy solution to developing a strong business credit profile that alternative and traditional lenders can trust and finance.

Why would HUD gut its own disparate impact rule? (The Times Weekly), Rated: AAA

Since 2013, the disparate impact rule has objectively examined the effects of business practices with lenders, landlords, insurers, and real estate professionals against the provisions of the 1968 Fair Housing Act. The rule required that first a plaintiff must establish a discriminatory effect in policies and/or practices, before the defendant(s) would bear the responsibility of proving their own practices were nondiscriminatory.

During delivery of Capitol Hill testimony earlier this spring, Nikitra Bailey, an EVP with the Center for Responsible Lending (CRL) also underscored the importance of disparate impact in fair housing.

“Disparate impact analysis encourages creative approaches that both increase effectiveness and inclusion,” testified Bailey. “This process and the value of disparate impact analysis was recently pointed out and endorsed by the largest personal loan company in the country, Lending Club.”

BlueVine Appoints Dosh & PayPal Vet Brad Brodigan As New Chief Commercial Officer (Crowdfund Insider), Rated: A

Online lender BlueVine announced on Wednesday it has appointed Brad Brodigan as its new Chief Commercial Officer. BlueVine reported that through this role, Brodigan will be responsible for overseeing revenue-generating functions including sales, customer service, and partner management.

Money360 Closes $ 170 Million in Commercial Real Estate Loans in July and August (GlobeNewswire), Rated: A

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, announced today it closed approximately $170 million in loans during July and August. This benchmark brings Money360 close to $500 million in loans closed this year.

Groundfloor Now Allows Real Estate Developers to Gain Pre Approval on Loans (Crowdfund Insider), Rated: A

Groundfloor, a real estate lending and investing platform that allows anyone to participate directly in real estate investments, has launched a new product to make the lending process more easier for real estate investors. Groundfloor now allows certain developers to gain pre-approval on loans with a new program called “QC Maxx.”

ABS East; Stripe’s Lending Arm; Madden Decision (PeerIQ), Rated: A

In financing news, student loan fintech “College Ave” locked down a $300MM securitization and a AAA rating this week. The securitization was co-led by both Barclays and Goldman Sachs. Affirm, led by Max Levchin, is reportedly close to wrapping up a $1.5 Bn debt and equity financing with Thrive Capital and Spark Capital leading.

Stripe is mirroring other payments companies that have since built lending capabilities – notably, Square and PayPal. Stripe believes it can compete in an already crowded small business lending market (OnDeck, Kabbage, Fundera, Funding Circle, etc.) due to its data & channel advantages stemming from its payments business.

Fintech Firm OppLoans Announces Its First Bank-Led Credit Facility (GlobeNewswire), Rated: A

OppLoans, a growing fintech and top rated direct-to-consumer online lending platform, announced today that it has secured its first bank-led asset-backed revolving credit facility. This facility structure will enable OppLoans to further its mission by broadening access to online personal lending products for more middle-income consumers with credit challenges.

Aura Completes Three Social Bond Issuances Totaling 5 million Over Last 4 Months (Yahoo! Finance), Rated: A

M&G Investments and Community Capital Management, a mutual fund that specializes in impact and Community Reinvestment Act (CRA) related investments, have joined with U.S. and international banks to invest $145 million in Aura’s social bonds to finance the origination of affordable, small dollar installment loans to working families in the United States.

Challenger banks insist they’re equal to the task of lending (American Banker), Rated: A

Almost all U.S. challenger banks offer no-fee checking, savings accounts and enhanced personal financial management tools. Now some of the most popular have taken, or are poised to take, their next step: making loans.

Personal loans and credit cards are lucrative but inherently risky, and these young companies — like MoneyLion, Varo and others — will have to prove to regulators, investors and the public that they have the wherewithal to weather downturns in the credit cycle.

Cash-flow data shows promise as predictor of credit risk (American Banker), Rated: A

Melissa Koide, co-founder and CEO of FinRegLab, analyzed loan data from six lenders that use cash-flow data in their underwriting. She shares what she found.

Prevu Raises $ 2 Million in Seed Funding to Grow its Digital Home Buying Platform (Digital Journal), Rated: A

Prevu, a customer-focused digital home buying platform delivering industry-leading efficiency and savings, announced today the closing of its $2 million seed funding round. The round was led by Corigin Ventures, a prominent seed-stage venture capital firm with expertise in the real estate technology and consumer industries as well as a history of backing startups disrupting residential brokerage business models.

Embattled Prodigy Network CEO Rodrigo Niño to step down (The Real Deal), Rated: A

Prodigy Network founder Rodrigo Niño is stepping down from his position as CEO amid mounting financial and legal issues, The Real Deal has learned.

Prodigy, a real estate crowdfunding platform, has faced criticism from investors in recent months over underperforming investment properties and unpaid distributions. On Monday, an investor in one of Prodigy’s newest projects — the 13-story Standard Hotel in Chicago — filed a lawsuit alleging the firm was “insolvent” and had used investments “for purposes other than those relating to the project.”

EquityMultiple Provides Investors with Options to Take Advantage of Unique Tax Benefits (Crowdfund Insider), Rated: A

Opportunity Zones are new, tax-advantaged vehicles for investors to earn more on their money. Created by the Tax Cuts and Jobs Act of 2017, the first qualified opportunity zones (QOZs) first hit the market in early 2018. Designated by state authorities, there are now thousands of QOZs in the US designed to boost development in selected communities. Investors receive a break on capital gains taxes which can be significant. Local officials can spur economic development which leads to more jobs. Online investment platforms immediately saw the opportunity intrinsic to QOZs with multiple platforms now offering investments in developments that benefit from these tax breaks.

Why are your Opportunity Zone Offerings better than some others available on competing investment platforms?

Soren Godbersen: There are a number of firms out there now marketing Opportunity Zone offerings to investors. We’re proud of what we have been able to offer to our investor network and there are a few things about our Opportunity Zone investments that are unique:

How to Recession-Proof Your Investments (U.S. News), Rated: A

AFTER A DECADE OF steady growth, the economic cycle is due for a reversal, with concerns of a recession.

  • Consider other types of investments outside of stocks and bonds.
  • Know that timing the market is difficult.

What to Invest in During a Recession?

Other less correlated assets include the real estate niche. With real estate crowdfunding, hypermarket segmentation is available. Investors can choose their property type and geographic region when investing in real estate. Two real estate crowdfunding platforms for accredited investors are CrowdFund and EquityMultiple. Fundrise and Groundfloor open targeted real estate investing to nonaccredited investors as well.

Litecoin Non-Profit to Hold Undisclosed Treasury Sum with Crypto Lender (CoinDesk), Rated: A

The Litecoin Foundation is putting its capital to work, lending at interest through another cryptocurrency program.

The Foundation has tapped the Celsius Network, a blockchain-based crypto lending program, to become its preferred crypto wallet, Celsius Network CEO Alex Mashinsky told CoinDesk.

As part of the deal, the Foundation will allocate an undisclosed portion of its treasury to the Network. LTC holders can receive up to 10.53% annually back on their crypto holdings and dollar loans as low as 4.95 percent as well.

Fintechs give small business more choice for credit than just banks (PaymentsSource), Rated: AAA

It’s no secret working capital is the lifeblood of all small businesses. It’s the fuel that keeps them running, helps them grow and take on new opportunities.

And yet, so many small businesses struggle with cash flow. In fact, according to a recent study from Intuit QuickBooks, 61% of small businesses have had cash flow issues in the past year.

Source: FIS

Walmart’s New Credit Cards Have One Big Goal: Boost E-Commerce (Bloomberg), Rated: A

In a sign of how much Walmart Inc. is betting on e-commerce, the retailer’s revamped credit-card program with Capital One Financial Corp. offers better rewards for online shopping and checking out with its mobile app.

The new options, which become available Sept. 24 and use Mastercard Inc.’s network, offer 5% cash back for purchases made at Walmart’s website, including groceries. At the chain’s physical stores, shoppers only get that rate for a year and have to check out with Walmart Pay at the cashier. Otherwise, store customers get 2% back.

Finicity Releases New Verification of Income and Employment Solution for Lenders (PR Web), Rated: B

Finicity, a provider of real-time financial data access and insights, announced today the release of its new Verification of Income and Employment (VOIE) solution using patent-pending TXVerify technology that will speed up borrower verifications and further advance the industry shift toward a fully digital experience.

The Finicity VOIE solution digitally extracts a borrower’s pay statement data from the paystub and then cross-verifies that key data with their income transactions from their financial institutions. Enabled by its TXVerify technology, this detailed vetting process creates a real-time picture of an applicant’s income and employment for fast, accurate reports. The solution does this by leveraging the highest value data – direct from banks – along with a scan, photo or PDF of a borrower’s paystubs. This process significantly shifts the current paradigm from a mostly manual process to one that is fully digital, all while reducing fraud and increasing confidence in the underwriting process.

Sallie Krawcheck: Why ‘don’t buy daily coffee’ is terrible advice (CNBC), Rated: B

“Don’t buy daily coffee” is the go-to financial advice. Co-founder and CEO of Ellevest, Sallie Krawcheck, says that advice is misleading and just enjoy your latte.

Ethereum Development Studio ConsenSys Announces Codefi, A New DeFi Software Suite (Crowdfund Insider), Rated: A

ConsenSys founder Joseph Lubin announced at the Ethereal Tel Aviv press conference (on September 15) that his New York-based venture studio is launching a new product, Codefi, for the emerging decentralized finance (DeFi) ecosystem.

Despite not having invested in emerging DeFi platforms, Lubin described P2P lending systems such as Uniswap and MakerDAO as some of the blockchain industry’s most promising projects.

ApplePie Capital Partners with LSQ Funding on A/R Franchise Financing (Monitor Daily), Rated: B

Online lender ApplePie Capital entered into a new strategic partnership with LSQ Funding Group, a technology-enabled provider of accounts receivable financing for small and mid-sized businesses.

United Kingdom

Funding Circle nears one-year anniversary of London float (P2P Finance News), Rated: AAA

The peer-to-peer business lender began conditional dealings on the London Stock Exchange on 28 September before being officially admitted to the bourse on 3 October. It launched with an offer price of 440p per share, giving the firm a valuation of £1.5bn.

However, its market capitalisation as of 17 September has since dropped to £348.7m, with its shares now trading at just over 100p.

Zopa warns over imitation scam firms (P2P Finance News), Rated: AAA

ZOPA has warned over a growing number of scam operators targeting UK customers using the peer-to-peer lender’s name to dupe investors.

They include: asking customers directly for their Zopa login details; claiming to work with companies investing money in Bitcoin or other cryptocurrencies; or working with companies who would ask them to take out a Zopa loan to fund an investment.

Record numbers of investors and borrowers as cumulative lending hits £11.3bn (P2P Finance News), Rated: AAA

MORE than 150,000 lenders were invested in 321,483 loans facilitated by Peer-to-Peer Finance Association (P2PFA) platforms at the end of the second quarter, which the trade body deemed “a record level of involvement in the sector”.

Funding Circle is the largest P2P lender among the P2PFA platform members, having lent out a cumulative total of £5.4bn as of the end of the second quarter. It is followed by Zopa at £4.5bn, with ThinCats in third place with just over £491m.

£814m of new loans were made in the second quarter, compared to £866m in the first three months of 2019.

Monzo halts cash referrals as it hits three million users (AltFi), Rated: A

Monzo has ended its cash incentivised referral system as the firm continues to grow users at a rapid pace.

Monzo now has passed the 3 million ‘users’ number, hitting the milestone late on yesterday and is now onboarding 55,000 people to Monzo every week.

Transferwise Books Its Third Consecutive Year of Profits (Lendit), Rated: A

European fintech company Transferwise has recorded its third year in a row of profits; the company reported its net profit after tax climbed to £10.3 million in the fiscal year ending March 2019, up 66% from the previous year on revenue of £179 million;

Payment provider Klarna appearing at London Fashion Week has everybody talking (MyLondon), Rated: A

UK fashion Designer Henry Holland decided to take things up a notch in Saturdays catwalk show with a T Shirt design in collaboration with Klarna.

Klarna expands partnership with Mothercare (The Paypers), Rated: B

Klarna and Mothercare have announced an extension to their partnership, which will see Klarna’s Pay later, Pay in 3, and Slice it products available online and in-store across the UK.

OakNorth Bank provides £3.7m loan to Clearview Developments (London Loves Property), Rated: A

OakNorth Bank the UK bank powered by OakNorth has provided a £3.7m loan to Clearview Developments for a new residential development in Royal Tunbridge Wells.

Smarterly and OakNorth Bank partner to offer new Notice Cash ISA range to Smarterly customers (Fintech Finance), Rated: B

The product range includes five Cash ISA Notice accounts, exclusive to Smarterly, ranging from 35 days at 1.05% to one year at 1.25%; Customers will not be able to apply for these products with OakNorth directly;

These five Cash ISAs Notice Accounts are:

  • 35 days – 1.05%
  • Three months – 1.10%
  • Six months – 1.15%
  • Nine months – 1.20%
  • One year – 1.25%
China/Hong Kong

Coming Soon: ‘Social Credit’ for Companies, Too (WSJ), Rated: AAA

A key target of China’s coming “social credit” system, which among Westerners usually triggers visions of “1984”-style monitoring of people, is actually misbehaving businesses.

Corporate America needs to prepare.

About 80% of information on the main data-sharing platform relates to companies rather than individuals, according to China consulting…

Hexindai Reports Unaudited First Quarter of Fiscal Year 2020 Financial Results (PR Newswire), Rated: A

First Quarter of Fiscal Year 2020 Operational Highlights

  • Total loan volume facilitated[1] was US$ 28.2 million (RMB192.3 million) during the first quarter of fiscal year 2020, a decrease of 93.5% from the first quarter of fiscal year 2019.
  • Gross billing amount (net of VAT)[2] was US$4.7 million during the first quarter of fiscal year 2020, a decrease of 90.7% from the first quarter of fiscal year 2019.
  • Gross billing ratio (net of VAT)[3] for credit loans was 16.7% during the first quarter of fiscal year 2020, an increase from 11.7% during the first quarter of fiscal year 2019.
  • Number of borrowers[4] was 18,546 during the first quarter of fiscal year 2020, a decrease of 36.0% from the first quarter of fiscal year 2019.
  • Number of investors[5] was 9,534 during the first quarter of fiscal year 2020, a decrease of 85.9% from the first quarter of fiscal year 2019.

First Quarter of Fiscal Year 2020 Unaudited Financial Highlights

  • Net revenue was US$4.9 million during the first quarter of fiscal year 2020, a decrease of 90.5% from the first quarter of fiscal year 2019.
  • Operating costs and expenses were US$12.6 million during the first quarter of fiscal year 2020, a decrease of 18.9% from the first quarter of fiscal year 2019.
  • Net loss was US$7.2 million during the first quarter of fiscal year 2020, compared to net income of US$29.7 million in first quarter of fiscal year 2019.
  • Basic loss per ordinary shares in the first quarter of fiscal year 2020 was US$0.15, compared to basic earnings per ordinary shares (“EPS”) of US$0.62 in first quarter of fiscal year 2019.
  • Diluted loss per ordinary shares in the first quarter of fiscal year 2020 was US$0.15, compared to diluted EPS of US$0.56 in first quarter of fiscal year 2019.
  • Adjusted net loss attributable to Hexindai Inc.’s shareholders (Non-GAAP) in the first quarter of fiscal year 2020 was US$7.0 million, compared to adjusted net income attributable to Hexindai Inc.’s shareholders (Non-GAAP) of US$29.9 million in the first quarter of fiscal year 2019.
  • Adjusted EBIT (Non-GAAP) in the first quarter of fiscal year 2020 was (US$5.8) million, compared to US$36.6 million in the first quarter of fiscal year 2019.

Zhang Yue, senior vice president at CreditEase, discusses the demand for credit in China, write downs in her portfolio, P2P lending, their wealth management business and their expansion plans.

Securing privacy concerns in FinTech in Hong Kong (Lexology), Rated: A

Hong Kong has built a strong environment for fostering innovation and financial technology or FinTech. With its large financial sector and its strategic role with Mainland China and gateway to the rest of Asia and the world, Hong Kong has the potential to take on an important role in being a leader in FinTech. In March 2019, for example, Hong Kong issued its first virtual banking licences, which will likely increase adoption of FinTech in the financial services sector.

Emerging technologies used in Fintech services and operations come in different forms, and include:

  • data analytics that support the operations of financial institutions (for example, credit scoring, loan processing);
  • peer-to-peer (P2P) financing (such as P2P lending and crowdfunding platforms);
  • distributed ledger technology, such as cryptocurrency, bitcoin transactions and smart contract applications, as well as blockchain services to help reduce fraud by keeping provenance data on the blockchain; and
  • financial investments, such as stock trading apps, robo-advisors and algorithmic trading and budgeting apps.
European Union

Binance Announces Phase Five of Crypto Lending Featuring Privacy Coins XMR, ZEC, and DASH (Crypto-Economy), Rated: AAA

Leading cryptocurrency exchange Binance has announced its launch of the fifth phase of its cryptocurrency lending product in which it customers subscribe to an allocation to lend other users their funds for interest rates as high as 15% Apr.

the 15% interest rate was only available to Binance’s native coin lenders in the first phase. On Tuesday, the exchange revealed three coins that will be included in the crypto lending product including only privacy-centric coins Monero [XMR], Zcash [ZEC] and Dash [DASH]. Their annualized interest rates will be a constant 3.5% but the lending period is only two weeks starting from this Friday September 20th through October 4th.

P2P Lender creditshelf to Acquire SME Finance Provider Valendo (Crowdfund Insider), Rated: A

creditshelf Aktiengesellschaft has signed a purchase agreement for the acquisition of all shares in Valendo – part of the finleap Fintech ecosystem.

According to a company release, the purchase price was in the “low seven-digit amount.” Payment will take place in two separate tranches. creditshelf has the option of settling both tranches in the course of two capital increases via a contribution in kind.

International

How MAS propelled Singapore to the top of the class (Euromoney), Rated: AAA

Today, Singapore sits proudly atop the Euromoney Country Risk (ECR) rankings. Based on ECR’s blend of financial and economic data, combined with the views of leading economists, no country in the world today has a stronger financial position.

When MAS said in July 2019 that it planned to issue five new digital banking licences, analysts soon spotted that three of them were wholesale licences, open to banks and non-banks alike.

Winners will be encouraged to lend, using digital means, to small and medium-sized enterprises and other non-retail segments – further evidence that corporate banking will be the next segment to feel the hot breath of disruption on its neck.

Source: Euromoney County Risk

Goldman Leads Trulioo’s $ 70M Raise To Expand Global Digital ID (PYMNTS), Rated: A

Trulioo, the global identity verification provider, has raised $70 million in new funding, eyeing growth in its core digital identification efforts, the company announced Tuesday (Sept. 17).

The company said in a release that the funding includes $60 million in a Series C round that was led by Goldman Sachs Growth Equity. Other participants included Citi VenturesSantander InnoVentures and existing investor American Express Ventures. The remaining $10 million came as unannounced follow-on financing from early investors, including BDC Capital and Blumberg Capital.

Equifax Continues Leadership In Alternative Data With Worldwide Urjanet Partnership (PR Newswire), Rated: A

Equifax Inc. (NYSE: EFX) and Urjanet today announced a global partnership that empowers consumers and businesses to share their payment data from thousands of utility, telecom and cable providers worldwide for a more complete picture of individual payment history, easier identity verification and the potential for better access to credit. This partnership builds on Equifax’s leadership in alternative data, using the Urjanet Utility Data Platform to incorporate consumer-permissioned data into the Equifax differentiated data approach.

5 Reasons Investors Should Consider Tokenized Assets (Benzinga), Rated: A

According to Deloitte, we shouldn’t view DLT as just a new type of “database ” but rather as a new way to organize the security value chain from issuance to custody. But what exactly can be transmitted through this chain?

Fractional ownership – take as much as you want

Digitizing shares makes them highly divisible, meaning that investors can buy very small percentages of tokenized assets.

So long, intermediaries! 

Security tokens have a simpler investment structure and lower fees.

On the way to maximum liquidity

Cherry on top

A security token is basically a digital signature connected with a smart contract responsible for facilitation and verification of ownership rights transactions.

India

Ribbit leads Series B funding in online investment platform Groww (VC Circle), Rated: AAA

Groww, an online investment platform that sells mutual fund products, has raised $21.4 million (Rs 152.5 crore at current exchange rate) in a Series B funding round led by Silicon Valley-based venture capital firm Ribbit Capital.

Groww said existing investors Sequoia India and Y Combinator also participated in the funding round.

RBI looking at how NBFCs, HFCs set their lending rates (livemint), Rated: AAA

The Reserve Bank of India (RBI) is studying how non-bank lenders and home financiers price their loans, close on the heels of directing commercial banks to link their loan rates to external benchmarks.

Source: livemint

RBI restricts access to credit data of consumers (Economic Times), Rated: A

The Reserve Bank of India has ordered commercial banks and non-banking lenders to stop providing unregulated entities access to consumer data held by credit bureaus, dealing a blow to scores of fintech startups that have based their business models on such information.

Source: India Times

RBI not in favour of ‘teaser’ loans, examines rate-setting mechanism of NBFCs, HFCs (CNBCTV18), Rated: B

The banking regulator is not in favour of hybrid loan products or ‘teaser loans’, a senior Reserve Bank of India (RBI) official today clarified. The remark gains significance in the light of State Bank of India chairman Rajnish Kumar’s recent comment that SBI would seek the regulator’s view on whether banks can introduce fixed-cum-floating rate products.

No dearth of demand on credit side, disbursed credit worth INR 5 billion: Flexiloans Co-founder (IBS Intelligence), Rated: A

FlexiLoans.com, an online lender for MSMEs in India, said that it has crossed a milestone number of disbursing over INR 5 billion of unsecured business loans across the country with its unique digital-only model. The Mumbai-based company, which has disbursed over 16000 loans across 1000 cities and towns in the country, says that there is no dearth of demand on the credit side. The company caters primarily to micro, small and medium-sized businesses.

How has the online lending market shaped up in the last few years?

Digital Lending market is currently at about USD 2 billion, up from about USD 1 billion in 2016. Significant traction and market niches discovered by various FinTech startups across the country have made this space very exciting, holistic and game-changing.

Online SME lender Cash Suvidha plans to raise upto $ 10 million (IBS Intelligence), Rated: B

The online lender for business and personal loans, Cash Suvidha, is planning to raise $5 million -$10 million equity funds in the next six months.

Asia

Terafunding Closes US$ 18M Series B Financing Round (FINSMES), Rated: AAA

Terafunding, a Seoul, South Korea-based Peer-to-Peer (P2P) lending platform, raised US$18M in Series B funding.

Backers included KB Investment, Hana Ventures, IBK Industrial Bank and Woomi Construction.

Julo raises $ 10M to expand its P2P lending platform (TechCrunch), Rated: A

Julo, a peer-to-peer lending platform in Indonesia, said on Wednesday it has extended its $5 million Series A raise to $15 million as it looks to scale its business in the key Southeast Asian market.

The $10 million Series A2 round for the Jakarta-headquartered startup was led by Quona Capital,  with Skystar, East Ventures,  Provident, Gobi Partners and Convergence participating.

Chinese P2P Firms Seeks Business in Vietnamese Market (W7 News), Rated: A

The declining demand for peer-to-peer (P2P) lending in China has prompted firms to find business elsewhere. LearnBonds report that Chinese P2P companies are eyeing Vietnam, which alarmed local lending companies.

MENA

Now Money offers alternative for Gulf’s unbanked expats (Financial Times), Rated: AAA

About 70 per cent of the population in the Middle East and north Africa do not have access to banking services, says Ian Dillon, co-founder of Now Money, a Dubai-based financial technology group.

The GCC recorded outbound remittances of $120bn in 2017, according to World Bank data. However, Gulf banks tend to exclude workers earning less than $1,400 a month, leaving most of them reliant on exchange houses to remit cash home.

Authors:

George Popescu
Allen Taylor

The post Thursday September 19 2019, Weekly News Digest appeared first on Lending Times.

Tuesday February 13 2018, Daily News Digest

china asset-backed securities

News Comments Today’s main news: SoFi’s adjusted 2017 profit was $126M. Funding Circle lent over 117M GBP in January. CreditEase Fintech Investment Fund invests in Fair. FT Partners advises Yapstone on $71M Series C round. LendingKart raises Rs1,129 crore. Today’s main analysis: Why China isn’t worried about the slowdown in asset-backed securities. Today’s thought-provoking articles: Goldman’s fintech approach to […]

china asset-backed securities

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Canada

MENA

News Summary

United States

Fintech SoFi blames missed earnings on borrowers skipping payments, increased hiring costs (San Francisco Business Times), Rated: AAA

SoFi said it made an adjusted profit of $126 million after pulling in revenue of $547 million for all of 2017, but did not break out figures for the fourth quarter.

(MarketWatch), Rated: A

SoFi Turns Losers Into Winners (and Investors) with the So Money Sweepstakes (PR Newswire), Rated: A

From February 12th through 16th, SoFi will award $25 in a SoFi Wealth account to 200 losers of HQ Trivia each day. To enter for a chance to win, all people need to do is Tweet to @SoFi on Twitter with a screenshot of their HQ loss screen and the hashtag #SoMoneyEntry. In addition to the $25, winners will also receive SoFi’s new card game, “So Money,” featuring playful questions that aim to encourage people to talk more openly about their financial lives.

Goldman Sachs is taking a fintech approach to grow its consumer lending business (Econsultancy), Rated: AAA

Two of the biggest proofs of Goldman’s transformation were its launch of GS Bank, a internet bank with a $1 deposit requirement, and Marcus, an online consumer lending platform through which well-qualified consumers could obtain personal loans of up to $30,000. GS Bank has since been merged into Marcus, which now serves as Goldman’s consumer brand.

As QZ pointed out, “Goldman thinks it can make $1 billion in extra revenue from its consumer lending business over the next three years, as much as it expects for its trading operations.”

As detailed by the Wall Street Journal, Goldman is reportedly in talks with Apple to offer buyers of Apple devices financing at point-of-sale. “Customers purchasing a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rates,” the Journal explained.

This type of financing is big business: by one estimate, $80bn of the $200bn consumers borrowed using retailer-affiliated credit cards or point-of-sale loans went towards big-ticket items including electronic gadgets.

Source: Econsultancy

The Future of Banking (Crowdfund Insider), Rated: AAA

The Use of Artificial Intelligence (AI) Will Increase

Artificial Intelligence (AI) will have a major role in banking for both the short-term and long-term. First, we will see AI help banks with fraud mitigation. Today, most fraud is detected through computer patterns that alert a fraud team who would then take the necessary steps to try to prevent or mitigate the threat. Now that technology has made access to money fast and easy, the transaction volume has increased exponentially.

Banks and Non-Banks Will Form Closer Partnerships

By tapping into a non-bank’s customer base, it will lower the bank’s cost of acquisition while providing more value for the customer. Banks will also realize that non-banks provide them with valuable data from their customer bases that they can leverage to provide a customized banking experience as well as a source for additional revenue streams.

There Will Be More Competition in the Digital Banking Space

Whether it’s JPMorgan Chase with Finn, or Greenhouse by Wells Fargo, big banks are entering into the digital banking space full force with the hope of attracting young consumers. Then you have digital banks like Ally, USAA and Capital One 360 who truly made a major effort in 2017 to attract millennials by tweaking their product, tone, messaging and branding to make sure they start penetrating that segment. We will continue to see that this year.

You still have niche financial products like Sofi that focuses on student loans or Stash Invest that focuses on investing, which are playing in the digital banking space.

Lastly, you have neobanks like Moven, GoBank, Simple and Varo who will continue to flourish and grow, but will be threatened by giants like Amazon, Google and Apple.

Cybersecurity will Get an Upgrade

After the highly publicized and damaging Equifax security breach that affected approximate 145 million Americans, we will surely see a modernization and upgrade of cybersecurity.

We spoke with the creator of the Chase Sapphire Reserve about millennials and the other challenges she’ll confront at JPMorgan (Business Insider), Rated: A

JPMorgan Chase, on the other hand, recently announced plans to expand its network. It’ll add 400 new branches in 15 to 20 new markets over the next five years — an investment spurred in part by the savings from the recently enacted tax law.

JPMorgan has, of course, culled some branches over the years, but far fewer than its peers — just 484, or 8.6%, since 2012, compared with cuts of more than 30% by its competitors Citigroup and Capital One over the same period.

BI: How does what happened with the Chase Sapphire Reserve phenomenon translate to the rest of the Chase consumer business?

Codispoti: The fact that we were able to break some myths with millennials. When I first took the job there was kind of this general consensus in the market that millennials wouldn’t pay a fee for a credit card or wouldn’t be interested in premium products — it just isn’t true. So I think we’re kind of breaking those myths when we think about banking and home lending as well.

We’ve shared in the past that we’ve had some extremely successful initial tests with the Sapphire Reserve customer, offering them a home lending offer of 100,000 points if they completed a home-lending mortgage with us. And 50,000 points for those who upgraded to Chase Private Client and deposited $100,000 into an account. We saw extraordinary results, greater than we ever expected. So clearly this is an engaged customer base, they love the Reserve brand. It transcends card into other areas of their financial life.

Citi Ventures’ Vanessa Colella: ‘No one runs innovation, it’s all about unleashing it’ (Tearsheet), Rated: A

As one of the largest financial institutions in the world, Citi takes its innovation efforts seriously. Combining internal and external models of collaboration with a disciplined corporate venture arm, the financial services giant ensures that it has a lot of coals in the innovation fire.

Real Estate Investment Platform, Sharestates, Continues Impressive Growth Launching New Marketplace in Arizona (AltFi), Rated: A

Today, Sharestates, an online real estate investment platform, announced today their inception into the Arizona Banking Department roster of lenders as Sharestates Investments LLC, NMLS ID number 1538766. With this launch, Sharestates will be offering their loan products to the real estate speculation and development community in a statewide effort.

As a part of Sharestates’ launch into the Arizona market, the company will be attending the 45th Pitbull Hard Money Conference located at the We-Ko-Pa Resort and Conference Center in Scottsdale, Arizona. The event will be held March 14-15, 2018 and members of the Sharestates team will occupy booth #417.

Sharestates has funded more than 895 individual loans, providing an average return on investment of 10.42%.

Realty Mentors Launches Its New Investment Advisory Business (Realty Biz), Rated: B

Realty Mentors announced a new investment advisory business. According to the article in Crowd Fund Insider.com, the company which is a commercial real estate diligence and underwriting company and is an affiliate company of CreditVest is claiming to be the first of its kind to launch in the commercial real estate crowdfunding industry.

When it comes to the real estate crowdfunding industry, their services will encourage new investors to enter the market because they will have the benefit of an objective and independent third party advising them.

Vishal Garg of Better Mortgage (Lend Academy), Rated: A

Our latest guest on the Lend Academy Podcast also thought it was crazy and decided to actually do something about it. Vishal Garg is the CEO and Founder of Better Mortgage and a few years back he missed out on buying his dream home because of the clunky and slow mortgage process. So, he started a company to completely turn this process on its head.

Stock Market Volatility & Your Retirement, Who You Gonna Call? Robo Or Human Advisor (Forbes), Rated: A

Spooked investors looking for reassurance beyond the panic in the headlines have two options to turn to. They can call up a financial advisor, or they can go on the Internet. Artificial intelligence, or fintech’s application of AI, robo advisors, are viewed by many as the future of affordable and effective retirement and investment advice. These algorithms are seen as thetechnology that will disrupt, if not replace, human advice.

Most robo advisor websites provide real-time quantitative information about the market’s performance. But information alone is not necessarily what people are looking for when they are faced with uncertainty. Market performance is public, but the impact on retirement investments is profoundly personal.

That observation touches on the key difference and perhaps the strategic advantage of human advice versus advice by algorithm alone. Clients, which for now are primarily of the human variety, are looking for someone to help them cope and to care as much as they do, as well as someone who has the discipline and expertise to provide perspective to what is otherwise presented in the news as chaos.

Klarna Announces Progressive Parental Leave and Benefit Policy for U.S. Employees (PR Newswire), Rated: A

Global payments provider Klarna (www.klarna.com) has implemented a new parental leave and benefits policy that offers all of its U.S. employees who become parents a comprehensive package that includes 20 weeks of leave at full pay, a flexible, part-time work week “ramp-up period” on their return and a two-year child care subsidy.

As of January 1, 2018, Klarna’s full-time and part-time female and male employees who become parents—either biologically or through adoption—are eligible to receive the new parental leave and benefits. In addition, applicable benefits of the new policy will be extended retroactively to U.S. employees who became parents in 2017.

The new Klarna parental leave and benefits policy for U.S. employees has three core components:

  • Parental Leave: The new parent may take 20 weeks of leave at full pay, and with full health and welfare benefits, during the child’s first two years.
  • Ramp-Up Period: Upon returning to work, employees will have the option to return to work on a part-time schedule.
  • Child Care Subsidy: Upon their return to work, Klarna will provide new parents with a child care benefit during the child’s first two years that will subsidize parents up to $250 per month to defray costs.

Trump Administration Plans To Defang Consumer Protection Watchdog (NPR), Rated: A

Within weeks of coming on board, Mulvaney has worked to make the watchdog agency less aggressive. Under his leadership, the CFPB delayed a new payday lending regulation from going into effect and dropped an investigation into one payday lender that contributed to Mulvaney’s campaign. In another move that particularly upset some staffers, the new boss also dropped a lawsuit against an alleged online loan shark called Golden Valley Lending. The suit says the lender illegally charges people up to 950 percent interest rates. It took CFPB staffers years to build the case.

Bonenfant sent NPR a screenshot from the Golden Valley website. It says on her $900 loan, her scheduled payments in less than 12 months will total $3,735, or more than four times what she borrowed.

Bonenfant has so far paid more than $3,000 to Golden Valley and rung up more than $1,000 in overdraft fees at her bank.

The lawsuit was moving forward until Mulvaney came on board, when it was suddenly dropped.

Federal Rent-a-Bank Bill May Harm Financially Distressed Consumers (Pagosa Daily Post), Rated: A

Recently, it was announced that the U.S. House of Representatives is likely to vote, the week of February 12, on H.R. 3299, the so-called “Madden fix” bill which would preempt state interest rate caps and open the flood gates to online predatory lending. The bill is spearheaded by U.S. Reps. Patrick McHenry (R-N.C.) and Greg Meeks (D-New York).

There are signs that some online lenders are making large numbers of loans that consumers will not have the ability to repay:

  • News reports show that delinquencies and charge-offs at marketplace lenders are rising.
  • One lender has had so many of its loans fail, that it had to repay investors for their losses in consecutive securitizations of the loans it bundled up and sold to Wall Street.
  • One online lender reportedly failed to verify a borrower’s income for a full two-thirds of its loans in 2016.
  • Moody’s credit-rating firm likens this industry to mortgage lending in the years leading up to the 2008 financial crisis in that “the companies that market the loans and approve them quickly sell them off to investors,” relieving themselves of the risk of the loan later going bad.
  • Many marketplace lenders make very large loans of $30,000-$50,000 or higher, and even 36% is a very high rate for such loans. Many states have tiered rate caps in recognition that interest becomes more unaffordable the larger the loan. Iowa, for example, caps interest at 21% for loans over $10,000.
United Kingdom

Funding Circle lends over £117m in January (Bridging&Commercial), Rated: AAA

Funding Circle has announced that it lent more than £117m last month to UK businesses.
The largest portion of funding went to businesses in the South East (22.1%), followed by companies based in London (16.2%), the Midlands (14.4%) and the South West (11.7%).
The property and construction sector received the largest part of the funding (17.6%), followed by professional and business support (13.5%) and retail (11.9%).

Referral schemes: make money from your friends and family (Love Money), Rated: B

People using peer-to-peer platform Funding Circle can net £50 if they recommend a friend or relative who goes on to lend at least £2,000.

Normally, Zopa investors can earn up to £50 if the person they recommend lends £2,000 with the platform. They’ll receive £50 too.

FSB launches new FinTech funding platform for SMEs (Tamebay), Rated: A

The Federation of Small Businesses (FSB) has launched a new fintech platform to provide small businesses and self-employed people with greater access to funding to help them grow and develop their enterprise..

The average amount a small business applies for from an alternative finance provider was found to be £39,000 in the survey, with equipment purchases and working capital for short-term operations or late payments being among the top reasons for businesses seeking finance.

LendInvest Announces Launch of Product Transition Process to Support Developers Throughout Their Projects (Crowdfund Insider), Rated: A

On Monday, LendInvest announced the launch of its new process for development finance borrowers to transition seamlessly between products. According to the online lender, the Product Transition process allows existing borrowers to transfer easily between specialized loans that are tailored to support them at each stage in their development project.

Mobile banking start up Fiinu launches Seedrs crowdfunding campaign (AltFi), Rated: B

Banking start up Fiinu has today launched a crowdfunding campaign on Seedrs,as it seeks £500k in seed funding to support its development and an application for regulatory approval from the Financial Conduct Authority (FCA).

China

CreditEase FinTech Investment Fund to Invest in Automotive Financial Technology Company Fair (Business Insider), Rated: AAA

CreditEase, a Beijing-based leading FinTech conglomerate in China, announced today that its venture fund, CreditEase FinTech Investment Fund (“CEFIF”), recently joined a group of prestigious investors to support California based Fair’s strategic expansion. Other investors in this round of financing include Siemens-backed next47 global venture fund, BMW i Ventures, Millennium Technology Value Partners, 137 Ventures, G Squared and Upfront Ventures.

Fair is a mobile technology platform that allows customers to lease and return a car with flexible terms entirely by using a smartphone.

Why China Isn’t Worried About a Slowdown in This Lending Market (WSJ), Rated: AAA

China’s market for asset-backed securities—which bundle up car loans, mortgages, consumer loans and other receivables into bondlike products—surged in 2017, led by issuers including the financial affiliate of Alibaba Group Holding Ltd. and other nonbank lenders. Total issuance of such instruments, which are mostly denominated in yuan, jumped 90% to over $220 billion last year from 2016, according to S&P Global.

The country is now the world’s second-largest market for securitized assets after the U.S., where issuance reached $510 billion in 2017, it said.

In the past couple of months, however, issuance in China of securities backed by unsecured small consumer loans has slowed sharply. This came after Chinese financial regulators took steps to curb a proliferation of internet lenders making microloans, small, short-term loans that typically carry high interest rates. These small loans represent roughly 40% of all consumer loans backing asset-backed securities in the country, according to S&P.

Around $1.3 billion worth of securities backed by unsecured microloans were issued in January 2018, down from $3 billion in the same month a year ago and versus a peak monthly issuance volume of nearly $7 billion last autumn, according to data provider Wind Info.

Source: The Wall Street Journal

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

WeChat has permanently banned over 1000 “cash loans” mini programs which violated its verification and operation rules. Xinhuanet has reported that there were multiple mini programs about “loans” on WeChat (e.g. unsecured loans and quick loans), ranging from 200 to 100,000. Complaints about the illegal credit products reached over 1,000 on one of China’s leading complain platform Ts.21.com

Hong Kong Monetary Authority (HKMA) announced that it would amend the relevant regulations on virtual banks.

Official documents show that the original guidelines require that a virtual bank incorporated in Hong Kong must hold at least 50% of its shares by an officially recognized and reputable bank or financial institution. The new ordinance recommends that non-financial institutions could register an “intermediary holding company” first when setting up a virtual bank, and then use the company to controls the virtual bank. This means that the authorities in Hong Kong have lowered the entry threshold on the financial qualification of virtual bank applicants. Non-financial institutions, including technology companies, can also apply to own and operate virtual banks in Hong Kong.

This week, LähiTaksi, a Finnish taxi company from Helsinki, announced that it would soon accept Alipay payments.

European Union

Robo firms signal their advice intentions (Money Marketing), Rated: A

Robo-advisers will increasingly move towards hybrid models over the next year, combining the human touch with machine learning, experts predict.

Scalable Capital, the Europe-wide robo firm, which has received financial backing from investment giant BlackRock, has just started offering telephone and face-to-face advice for clients who want to progress beyond an initial free session.

Nutmeg and Moneyfarm have both signalled plans to move in a similar direction, while Wealthify, which saw Aviva take a majority stake last year, won’t rule out taking this step in the future.

International

The Most Important FinTech Innovations that Will Change Our Lives in the Near Future (Interesting Engineering), Rated: AAA

It is largely evident that we are looking at inevitable digital disruption in financial services. The traditional banking system is yet to see any major technological innovation in lending whereas the FinTech firms have made huge investments in the same area. China moved96% of its e-commerce sales without the services of a bank. A report by Cisco pegs the peer to peer lending volume in China at approximately $66 billion, for the US that number stands at $16.6 billion, and for the UK it is $5.4 billion. Clearly, the opportunities aren’t fictional, and technology will guide this paradigm change.

American FinTech giants include Stripe, a San Francisco based firm valued at $5 billion, Credit Karma, another Silicon Valley-based FinTech firm valued at $3 billion.

The UK lags behind the US by quite a distance, but is second overall with $5.4 billion investment in the same time frame, thus confirming its position as one of the world’s leading FinTech hubs. Its FinTech bigwigs include TransferWise, DueDil, AstroPay, GoCardless and Digital Shadows.

FT Partners Advises YapStone on its million Series C Financing Round (FT Partners), Rated: AAA

FT Partners is pleased to announce our role as exclusive strategic and financial advisor to 

Source: FT Partners

Read the full transaction profile here.

ETHLend alters terms to encourage use of its own digital currency (P2P Finance News), Rated: A

CRYPTO-BACKED peer-to-peer lending platform ETHLend has reached more than £2m of loans as it announces new incentives to encourage users to transact with its LEND token.

Borrowers can post any digital currency as collateral and loans can be made in Bitcoin or Ethereum or LEND. But ETHLend now wants more people to use the LEND token as the means of exchange so it has said anyone providing funds in LEND won’t have to pay any transaction fees.

There is also a 50 per cent discount when the LEND coin is posted by borrowers as collateral.

Australia

DirectMoney a leading ASX gainer after revealing Alceon investment (Proactive Investors), Rated: AAA

DirectMoney Ltd (ASX:DM1) is an ASX leading gainer intra-day on news of a strategic investment by alternative investment manager Alceon.

The investment comprises an initial placement of $600,000 at $0.042 per share and is equivalent to a 3.1% interest.

India

Lendingkart raises total of Rs1,129 crore after latest funding round (livemint), Rated: AAA

Rs565 crore

What is it? The amount raised in equity funding by Lendingkart Technologies, a fintech start-up that provides online loans to small businesses. The latest fund raise, announced on Monday, takes the total amount raised by the Lendingkart Group to Rs1,129 crore.

Tell me more: Lendingkart’s latest funding round was led by Singapore’s Fullerton Financial Holdings, and also saw participation by existinginvestors, namely Sistema Asia Fund, Bertelsmann India Investment, Mayfield India, India Quotient and Saama Capital.

India fintech seeking to raise at least US$ 87m to grow tech capabilities (Business Times), Rated: A

AN Indian fintech company is seeking to raise over US$87 million of equity funding to expand its technological and analytics capabilities.

Lendingkart Technologies will be doing so through series C capital-raising, with the initiative led by Singapore’s Fullerton Financial Holdings, along with participation from existing investors.

Canada

Payday Loan Use Among Heavily Indebted Borrowers On The Rise (Payment Week), Rated: AAA

Payday loan use among heavily indebted Ontarians continues to escalate, as Ontario in 2017 involve payday loans, up from 27% in 2016.

The average number of payday loans outstanding at the time of insolvency declined to 3.2 in 2017, after peaking at 3.5 loans in 2014. However, the average payday loan size in 2017 is $1,095, an increase of 12.4% from $974 in 2016.  One in ten (9%) loans are $2,500 or more, up from 6% in 2016.

The average insolvent payday loan borrower owes $3,464 in payday loans, or $1.34 for every dollar of monthly take-home pay, on top of $29,997 in other unsecured debts. They are using payday loans to keep up with existing debt repayment.

Borrowell Gives Birth To New TV Campaign (Borrowell Email), Rated: A

Borrowell is making its first major foray into television with a 30-second spot that launches today, called “Home Birth.” Created by Toronto-based agency Conflict, the commercial aims to raise awareness of Borrowell’s free credit score monitoring service.

MENA

Saudi startups have wider funding options amid huge fund volumes (Saudi Gazette), Rated: AAA

In an interview, Nawaf Al Sahhaf, CEO of Badir, said financing options for these startups include without limitation Venture Capital firms, angel investors, accelerators, and incubators in addition to new alternatives such as crowd funding or even P2P lending platforms.

Venture Capital funding is an essential piece of the startup jigsaw.

Venture Funding is unique, however in its characteristic. I define a startup as a company that is looking to receive funding from a venture capitalist. This means that they meet several basic criteria for growth 1) a strong founding team 2) a solution to a clear and identifiable problem 3) a clear path to monetization and most important 4) a scalable product that has a regional if not global market.

All of these criteria are essential to be eligible for Venture Funding. Many of these criteria may not be applicable or sufficient for alternative funding channels including debt, bank funding or grants.

UAE ranked third for Islamic Fintech start-ups (Gulf Today), Rated: A

The UAE is ranked third in an analysis of Islamic Fintech start-ups, according to a survey by Bloomberg Intelligence, issued today. Malaysia and the United Kingdom are ranked first and second.

Crowdfunding and peer-to-peer (P2P) financing could be a game-changer in Islamic finance, it suggests, giving wider reach and potential to close the gap for small and medium enterprises, SMEs, which generated about 60 per cent of UAE GDP in 2014, with Dubai’s regulator introducing the first tailored regulation for crowdfunding in the GCC.

Authors:

George Popescu
Allen Taylor

Wednesday November 29 2017, Daily News Digest

Qudian

News Comments Today’s main news: Fiduciary rule delayed–again.SoFi prepares sixth student loan refinance ABS.LendingTree secures $250M amended, restated credit facility.Indonesian tech investments hit $3B YTD. Today’s main analysis: Qudian bounces back. Today’s thought-provoking articles: Will Mulvaney back consumers or payday lenders?American consumers say financial crisis had no impact on their lives.Online education startup promises to […]

Qudian

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

News Summary

United States

DOL Officially Delays Start of Fiduciary Rule (The National Law Journal), Rated: AAA

The Labor Department on Monday announced the official 18-month extension for the start of key provisions of the fiduciary rule.

President Donald Trump directed the Department to prepare an updated analysis of the “likely impact” of the fiduciary rule on access to retirement information and financial advice.

The extension will be published in the Federal Register on Wednesday.

SoFi readies sixth student loan refi ABS (GlobalCapital), Rated: AAA

SoFi is has entered the post-Thanksgiving pipeline with its sixth student loan refinancing transaction this year, in line with its plans to issue 12 securitizations in 2017.

The California-based online lender filed documents with the US Securities and Exchange Commission on Tuesday. Credit Suisse, Goldman Sachs, Bank of America Merrill Lynch and Morgan Stanley are banks on the deal, according to the deal documents.

SoFi Tackles Consumer Debts in New Ad Push (Lend Academy), Rated: A

While relaxing over the Thanksgiving weekend you might have noticed a new trend occurring in television while watching the games: six second ads.

SoFi is focusing their message on the consumers lifestyle, presenting an understanding as to why someone needed to increase their credit card debt.

They also placed a Black Friday circular with several national newspapers which you can see in the photo below. The ad is a clever take on the typical sales fliers we all see around this time of year. But instead of an ad featuring low prices we see an ad touting much higher prices. The message is that if you are buying gifts on credit cards this holiday season and carrying a balance you will be paying a lot more than the advertised price. It is a message focused on smart spending, giving a better look at the true costs of products when financed.

Would Trump’s CFPB Pick Mulvaney Back Consumers Or Payday Lenders? (International Business Times), Rated: AAA

Demonstrators gathered outside the Consumer Financial Protection Bureau (CFPB) in Washington D.C.  Wednesday to protest President Trump’s decision to appoint White House budget director Mick Mulvaney to director of the agency.

As a Congressman, Mulvaney accepted $55,500 in contributions from payday lenders during his four successful runs for Congress, including $26,600 during the 2016 election cycle,  according to the National Institute on Money in State Politics. Before he was tapped to lead President Donald Trump’s Office of Budget Management, Mulvaney took $115,200 from the securities and investment industry, and another $96,564 from the insurance industry in the 2016 cycle, both more than any other industry, according to the Center for Responsive Politics. This record, along with comments Mulvaney made indicating he would shutter the agency if given the opportunity, has led critics to question whether Mulvaney’s priority will be consumers — or the companies the agency is responsible for regulating.

Payday lenders appear to want Mulvaney to lead the CFPB.

Note to Mick Mulvaney: Donuts do not a CFPB director make (The Washington Post), Rated: A

President Trump’s hostile takeover of the Consumer Financial Protection Bureau, by contrast, relies on the rather less cherished legal principle of habeas cuppedia, Latin for “you shall have the pastries.”

Under the statute that created the CFPB, the watchdog agency set up after the 2008 crash to police lending abuses, it should now be rightfully run by Leandra English, the deputy director who succeeds the just-resigned director, Richard Cordray, until the Senate confirms a permanent replacement. Trump found another statute that he says lets him appoint Mulvaney. English filed suit to defend her legitimacy, Mulvaney submitted doughnuts, and a Trump-appointed federal judge, to nobody’s surprise, ruled in Trump’s favor.

Ten Years Post-Financial Crisis and Americans Say It Had No Impact, According to Hartford Funds Survey (BusinessWire), Rated: AAA

New data released today by Hartford Funds revealed that a decade after the Great Recession, Americans are unclear how the economic event impacted their life and financial behavior.

The majority (40 percent) of respondents said that the financial crisis had no impact on their life, yet large numbers reported that they avoid the market (42 percent) and have altered their spending and savings habits (46 percent). Others (26 percent) shifted their retirement timeline and plan to work longer then they’d hoped, and 25 percent had to change jobs or take on additional jobs.

The majority (40 percent) of respondents said that the financial crisis had no impact on their life, yet large numbers reported that they avoid the market (42 percent) and have altered their spending and savings habits (46 percent). Others (26 percent) shifted their retirement timeline and plan to work longer then they’d hoped, and 25 percent had to change jobs or take on additional jobs.

STRATEGIC ADVANCES IN THE USA FUEL MONEVO’S GROWTH (BQLive), Rated: A

The company’s growth is set to continue with ongoing success in the US, Monevo’s newest territory.

Personal loan originations in the US reached new heights by the end of 2016. Total balances reached $102bn for the first time, $14bn higher than the end of 2015. The number of consumers with personal loans at the end of 2016 was 15.82 million.

Fifteen US lenders, including Lending Club, Sofi, and Prosper have joined Monevo’s roster of over 150 personal loan lenders across the world.

GETTING STUDENT FINANCIAL AID MAY BECOME WAY EASIER WITH NEW FAFSA APP (Newsweek), Rated: A

Just like Uncle Sam, Education Secretary Betsy DeVos wants you…to be able to apply for financial aid on your phone.

DeVos said Tuesday that the government plans to launch an app for the Free Application for Federal Student Aid, or FAFSA, which some 20 million people fill out every year in hopes of getting grants, loans and other money for college or career training. It’s all part of a plan to make the FAFSA much simpler to submit.

HouseCanary Announces $ 31 Million Series B Funding, Comprised of PSP Growth and Existing Investors (HouseCanary), Rated: A

HouseCanary, the data analytics and valuation platform for real estate professionals, today announced it has closed a $31 million series B funding round, bringing the company’s total funding to $64 million to date. Investors in the round include PSP Growth, the venture and growth equity arm of PSP Capital, a private investment firm founded by entrepreneur and former Commerce Secretary Penny Pritzker, as well as Alpha Edison and other existing investors.

Investors can now value over 100 million properties with a median error of 2.5% or less. Lenders and appraisers use HouseCanary technology to reduce the time it takes to complete an appraisal from more than 25 days to less than a week.

Your Sneak Peak of the LendIt Fintech USA Agenda (LendIt), Rated: A

Fintech

How secure is your data? Recent hacks and breaches have re-stressed the importance of the data security and customer information. This track will help young startups and big box financial institutions verify customers, understand data security and utilize tools to improve efficiency. The future of technology is in robotics, machine learning and biometrics, not grasping these changes will make your business extinct.

BlockFin Summit

Bitcoin. Blockchain. Cryptocurrencies. ICO’s. Everyone’s talking about them, but how will these new age concepts change the future of money?

Digital Banking

Banks are looking to fintech partners to transform their business for the digital revolution. This track will explore the crucial role of mobile banking, smart ATM innovations, chatbots’ role, and the digital transformation at all levels—from branch to infrastructure to data storage.

Lending

Learn how to scale your growth like Lending Club, increase access to credit like LendingPoint, and utilize mobile-only technologies like MoneyLion.

Source: LendIt

The secret to reeling in cybersecurity talent at three big banks (American Banker), Rated: B

There will be 3.5 million unfilled cybersecurity jobs by 2021, up from 1 million last year, according to the research firm Cybersecurity Ventures. Meanwhile, Frost & Sullivan estimates 1.8 million cybersecurity jobs will go unfilled by 2022, a rise of around 20% since 2015.

The military is skilled at producing what Gary McAlum, the chief security officer at USAA, calls “Jedi Knights.”

Wells Fargo is making a big push to hire veterans, said Rich Baich, its chief information security officer. He has held several positions in the Navy, the North American Air Defense Command, the National Reconnaissance Office and the FBI.

As of August more than 8,500 veterans worked at the San Francisco bank, and at any given time it has 200 team members on active duty.

United Kingdom

LendingTree Enters into a $ 250 Million Amended and Restated Credit Facility (PR Newswire), Rated: AAA

LendingTree (NASDAQ: TREE), a leading online loan marketplace, announced today it has entered into an amended and restated $250 million five-year senior secured revolving credit facility that will replace LendingTree’s previous $125 million credit agreement.  The amended and restated revolving credit facility provides increased borrowing capacity and improved pricing, along with greater strategic and operational flexibility. The facility can be used to finance working capital needs, permitted acquisitions, capital expenditures, and general corporate purposes.

The amended and restated revolving credit facility will be governed by a maximum net leverage covenant of 4.50x, with step downs to 4.00x over time. Additionally, the amended credit facility contains an accordion feature under which the borrowing capacity can be increased by $100 million or a greater amount, subject to certain conditions.

Why a blockchain startup called Govcoin wants to ‘disrupt’ the UK’s welfare state (MENAfn), Rated: A

The UK chancellor’s recent Budget reminded us that systemic problems continue to plague the government’s delayed roll-out of universal credit – a single monthly welfare payment that will replace six separate benefits.

Govcoin, intent on ‘disrupting’ welfare state provision, has been working with the Department for Work and Pensions (DWP) since early 2016 to develop a solution for welfare payments.

‘Claimants can – voluntarily – download an app, which enables them to create virtual jam jars and apportion money to them. Whether that’s ‘rent’, ‘gas and electric’ – it’s entirely up to them,’ said Kay in an last autumn.

Govcoin will financially empower benefit claimants. But its distribution model involves benefits being paid – not in pounds and pence – but in the form of a cryptocurrency similar to . Govcoin promises to allow claimants to pay for goods and services – such as utilities – linked to the system.

Peer-to-peer Bitcoin lending fund launches (P2P Finance News), Rated: A

Called Bond, the fund lets accredited investors buy securities known as “Bond Units” in an asset portfolio that holds a mixture of property bonds, real estate and cryptocurrency assets.

Each Bond Unit, which digitally represents an equity share of Bond’s asset portfolio, will be issued on the Bitshares Blockchain and traded via the Bitshares decentralised exchange.

The portfolio has 30 per cent exposure to P2P Bitcoin lending; 30 per cent to property bonds and real estate; and 30 per cent to digital currency learning website the Billion Hero Campaign. The remaining 10 per cent is invested in alternative cryptocurrencies.

China

Banker Bulls Still Like Qudian, Despite China’s Crackdown (Barron’s), Rated: AAA

After losing more than 40% of its market value last week — as Chinese regulators tightened rules for online consumer lending — Qudian is seeing a 16% bounce today in its American depositary receipts (ticker: QD), to a recent $14.

Source: Barron’s

China’s fintech is still in its infant phase (TechNode), Rated: A

One of the Chinese fintech players that made their way to the US public market is Rong360 Inc’s Jianpu, an online platform for discovery and recommendation of financial products. The founder and CEO Ye Daqing recently joined its investor James Mi, founding partner of Lightspeed China Partners, on stage at TechCrunch Shanghai to discuss why the fintech is booming in China and what opportunities lie ahead.

There are many fintech companies that are quite controversial because some of them have damaged the reputation of the market. But two of the [fintech] companies you invested in have both filed for an IPO recently. James, what’s your view [on the market]? What makes you such a good investor, landing two IPOs?

Mi: Lightspeed mostly invests in early-stage companies. We usually look at their development in 3-5 years down the road.

We were actually very prudent about P2P. When we finished looking at all the companies we ended up choosing PPDAI because it was offering a real online solution. No offline sales. And this type of business contributes to the society.

Why are so many Chinese [fintech] companies going IPO in the US recently?

Ye: China will see ten to twenty years of significant growth in fintech and micro-finance. The level of digitalization of finance in China is much lower than that of e-commerce, which took more than ten years to reach 14%. Digital finance is currently at less than 5% penetration. In four to five years, or even longer, fintech will surpass retail. For example, lending, car mortgage, credit cards, and insurance.

Let’s look at another buzzword, that is artificial intelligence (AI). Every single industry nowadays is talking about AI. What will happen when AI meets fintech? 

Ye: The financial industry is actually a data industry, wholly relying on data to make risk control decisions and take care of customer service and marketing. Take our platform for example—it has nearly 70 million registered users, more than 2,500 partnered financial organizations, with 170,000 types of products, and each product is facing a changeable set of challenges and varying user behavior.

European Union

Nutmeg and Revolut investor launches new European fund (AltFi), Rated: A

A leading investor in Series A-stage technology companies, Balderton Capital has closed a total of $375m in its latest fund with a new generation of European tech in its sights.

Flender’s lenders throw €400,000 towards €2m funding round (SiliconRepublic), Rated: A

Dublin fintech Flender is hurtling with fierce velocity towards a funding round worth more than €2m, with involvement from some of its customers, who have already pledged €400,000.

“Initially, we offered €100,000 to them but this quickly overfunded and we increased this to €400,000.”

International

An online education startup thinks it can save bankers from losing their jobs to machines (Quartz), Rated: AAA

The attack on banking jobs has been relentless. British banks are set to close almost 800 branches this year, after shutting nearly 600 in 2016. The CEO of Deutsche Bank, Germany’s largest bank, warned that the company could afford to lose half of its staff to automation. Swiss bank Nordea announced at the end of last month that it was cutting a tenth of its staff, and its CEO said the banking industry could cope with half its current number of personnel. Consultancy Greenwich Associates estimates that 15% of the finance industry’s jobs are at risk of being lost to AI-driven alternatives.

In addition to teaching, Nguyen Trieu is leading by example with the launch of an AI-enabled mobile savings app, which is in the early planning stages.

But there’s a big difference in fintech scenes across the world.

The mindset and the way people use technology and fintech is very different. If you’re in Hong Kong, you have WeChat on your phone and you use it on a daily basis. Here, you don’t use fintech on a daily basis. Some people might use Revolut but they still have a traditional bank account. Here, fintech is seen as innovations on top of existing financial services whereas in Hong Kong, fintech is finance.

So the course is for everyone, everywhere?

And not just for people in finance. When we did the beta test only 40% of the users were from the finance industry—the rest were from tech, or were entrepreneurs or consultants.

So automation, AI, machine learning, and the like are all coming for your job if you don’t retrain?

Banks are thinking today about cutting thousands of jobs and increasing their technology budgets. To me, it is is absurd for a CEO of a bank to think this way.

So, what finance jobs most at risk right now?

In general, anything that can be automated will be automated. But right now, compliance is at risk. Over the past few years there’s been a lot of investment in compliance and KYC [know your customer], because regulators wanted the investment and it was a way for banks to demonstrate they were doing their part after the financial crisis. Now, that has totally changed. It’s starting to cost a lot and regulators have said we want you to show that you are being efficient, not just hiring a lot of people.

Exclusive Interview with Bloom Co-Founder Jesse Leimgruber (ChipIn), Rated: A

Bloom is a global decentralized credit scoring system available to anyone – even the unbanked and underbanked. Bloom’s flexible ecosystem will allow users to have access to credit services which work globally and are extremely secure and transparent thanks to the blockchain’s inherent features.

First off, why did you decide to use the blockchain in building Bloom? 

People shouldn’t be forced to rebuild credit from scratch when they move to a new country. Billions of people around the globe are still considered “credit unscorable,” forcing them into taking out dangerous, informal loans.

To make matters even worse, many governments generate credit scores based on religion, political affiliation, and voting status, instead of data. Even in the United States, 45 Million Americans (including many financially savvy millennials) still do not have a credit score.

What do you think is the biggest problem Bloom will solve and why is the problem important to solve?

3 Billion people cannot access credit, largely due to artificial restrictions from governments.
Tell us more about how BloomID works behind the scenes. The most interesting part about is the vouching process; how does this work and how does Bloom ensure that vouches are not manipulated or faked in any way?
BloomID is the Bloom protocol’s method of both establishing a reliable identity as well as forming the basis of creditworthiness for users who are newly entering the Bloom network. BloomID allows organizations who store information about individual identities to attest to the identity of a Bloom user and mark that information on the blockchain for future re-use. A user’s friends, family, and peers can help an individual bootstrap creditworthiness by vouching for their ability to act responsibly with credit. This is like a reference, similar to co-signing.

Is Bloom already working with notable businesses or firms? Are there any future partnerships in process? If yes, can you explain briefly about it?

We’ve been in touch with 100’s of lenders and partners. We’ve announced quite a few. Peer to peer lending, traditional fiat businesses, crypto lenders… we’re working with people on the whole spectrum.

For example: Self Lender is a credit building lender we are working with, Everex, Lendoit, and ETHLend are crypto lenders. We’re working with partners for anti-fraud such as TypingID.

Download the Bloom white paper here.

Exclusive Interview with ETHLend CEO Stani Kulechov (ChipIn), Rated: A

ETHLend is a Decentralized Lending Innovation using the Ethereum platform as its base.

First off, why did you decide to use the blockchain in building ETHLend?

Finance is where blockchain technology was conceived, and it is in finance that blockchain technology is arguably most transformative. It intrinsically offers greater visibility, scalability, and efficiency – and potentially at a lower cost.

By providing a means of authorizing fully trackable and verifiable transactions, it also offers the potential for truly open-source many-to-many lending. Presented in these terms, it may well seem like a threat to peer-to-peer firms. If blockchain removes the need for marketplaces, why should borrowers and lenders pay fees to these platforms? ETHLend promotes less fees, transparency, and integrity amongst borrowing and lending.

What do you think is the biggest problem ETHLend will solve and why is the problem important to solve?

In today’s world, you are at the mercy of banking institutions for borrowing and lending. We all know the bank pays out minimal interest on investment accounts and charges maximum interest on borrowing. We have partnered up with Bloom who provides credit scoring capabilities so both borrower and lender build a reputation amongst the ETHLend community which is usable elsewhere on the blockchain.

Why do you think the shift from traditional lending to P2P lending is happening right now?

Market research tells us that there are countries at the moment which are paying from 0.5 to 5 percent. For example, here in Finland, it is quite common to have a secured mortgage loan with an interest of 0.4 to 0.8 percent on bank’s marginal. On the contrary, In Brazil, the interest rate tops to 32 percent and Russians pay on average of 11 percent and in India 10 percent (take note that today’s numbers may differ).

The differences in interest rate mean that with a higher interest rate, people and businesses have less access to finance.

Source: ChipIn

Alternative investment LPs want more transparency and co-investment opportunities (HedgeWeek), Rated: A

More than 140 LPs responded to the survey, of whom approximately 52 per cent were based in North America, 31 per cent in Europe and 15 per cent in Asia Pacific. Nearly one quarter (22 per cent) were public pension plans, 15 per cent were consultants and 13 per cent were either endowments or family offices.

Intralinks is a leading financial services company with over USD31 trillion of transactions executed on its platform and over four million users. It has the largest community of GPs and LPs and is used by over 1,000 private equity, real estate and hedge funds on a daily basis. Over USD1 of every USD2 raised globally for private equity was facilitated using Intralinks for a total of USD317 billion in 2016 and 13 out of the 20 largest funds were raised on its platform.

More than one third of investors confirmed that their current allocation was more than 30 per cent, with nearly two thirds confirming that they planned to increase their allocation to alternatives over the next 12 months by 1 to 10 per cent.

Gold, Silver Storage & Lending For Hard Assets in the World’s Safest Jurisdiction (Palisade-Research), Rated: A

Gregor discusses Silver Bullion SG a company he started in Singapore where individuals can securely store their gold and silver. They just hold your precious metals and validate their authenticity. They do this without counterparty risk as your assets are marked, segregated and you hold the title. The company holds over 230 million in hard assets.

Using peer to peer lending you can withdraw up to half of your holdings in loans at low-interest rates.

GoCardless Tops Juniper Leaderboard for Fintech: A Sector Worth More Than 0 Billion in 2018 (BusinessWire), Rated: B

A new study from Juniper Research ranks GoCardless as the current clear leader in the fintech market. GoCardless enables simple payment processing and integration with many popular services, and Juniper believes that its potential for efficient, borderless commerce is disruptive and far-reaching.

Juniper’s Fintech Leaderboard Ranking

1. GoCardless

2. Onfido

3. Square

4. Lemonade

5. Kabbage

India

CROWDFUNDING SET TO GROW (Daily Pioneer), Rated: AAA

Crowdfunding activity in India is driven increasingly by mobile applications and payments. This trend is likely to witness exponential growth.

Rs 300 crore, the Indian crowdfunding industry is at a nascent stage compared to the global standards with the total amount of money raised via crowdfunding in 2016 at USD 738.9 million.

Asia

Investment in Indonesian tech start-ups reaches $ 3bn year-to-date (Oxford Business Group), Rated: AAA

Indonesia’s tech start-ups have been catching the eye of investors, having raised close to $3bn in funding in the year to September 13, a substantial increase on the $631m received in 2016.

Chinese firms are prominent among the foreign investors in Indonesia’s start-up boom, according to research firm CB Insights: Alibaba committed $1.1bn to online marketplace Tokopedia in August, and in May JD.com and Tencent Holdings invested $1.2bn in ride hailing motorbike service Go-Jek, which utilises mobile payment services.

Alternative financing posts 1462% growth

Last year Indonesia posted one of the highest growth rates in the Asia-Pacific region in alternative finance activity. The segment’s total market size expanded by 1462% to $35.4m, according to a report by the University of Cambridge, Monash University and Tsinghua University published at the end of September.

The study found that peer-to-peer (P2P) business lending had come to dominate Indonesia’s alternative finance market, accounting for just over 60% of the 2016 total, with P2P consumer lending representing 18% of the figure, or $6.5m.

Fostering collaboration and growing market opportunities

Indonesian tech start-ups attracted the second-highest amount of investment in South-east Asia between 2012 and September 13, at $4.6bn, behind Singaporean companies, which raised $7.3bn over the same period.

Fintech Challenge seeks to bolster financial inclusion in Vietnam (Nhan Dan), Rated: A

A programme entitled ‘Fintech Challenge Vietnam’ has been launched by the State Bank of Vietnam (SBV), with the aim of fostering innovation in financial services that promote greater financial inclusion in Vietnam.

Fintech Challenge Vietnam has been organised by the SBV with the support of the Mekong Business Initiative and sponsorship by the Vietnam Bankers Association and the Vietnam Fintech Club.

VN Central Bank launches first-ever fintech challenge (VietnamNet), Rated: B

The focus of the Fintech Challenge is on fintech solutions that can improve the offer of financial services to the underserved and unbanked.

The challenge is an opportunity for Fintech companies from both inside and outside Việt Nam who are interested in collaborating with commercial banks to pilot and scale solutions that improve financial services in the following categories: electronic payments, e-KYC (Know Your Customer)/e-Identification, open APIs, blockchain and peer-to-peer lending to apply.

The deadline for application is January 18, 2018, at fintech.mekongbiz.org.

OJK to issue new fintech regulation in March (The Jakarta Post), Rated: B

The Financial Services Authority (OJK) aims to issue a regulation on financial technology (fintech) businesses by March next year amid robust development of the industry, OJK deputy commissioner Nurhaida said Tuesday.

Authors:

George Popescu
Allen Taylor

Wednesday September 20 2017, Daily News Digest

low credit scores

News Comments Today’s main news: PayPal to fully integrate Swift Financial after closing acquisition.GoCardless raises $22.5M.Qudian poising for U.S. IPO.Varengold Bank AG to give $61M to MarketInvoice.Bondora hits 100M Euro milestone.Reserve Bank of India to treat P2P lenders as non-banking financial companies. Today’s main analysis: Public distrusts regulators as much as Wall Street.(a must-read) Today’s […]

low credit scores

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Latin America

Africa

News Summary

United States

PayPal will fully integrate Swift Financial ‘over the next year’ after loan provider acquisition closes (VentureBeat), Rated: AAA

A little over one month after revealing plans to acquire Swift Financial, PayPal has announced that the deal is now complete.

PayPal said that it plans to fully integrate Swift Financial into its payment service “over the course of the next year,” according to Darrell Esch, PayPal’s vice president and commercial officer of global credit, in a blog post.

PayPal has actually offered a working capital program for lending money to small businesses since 2013, and it has loaned more than $3 billion through the program to date. This compares to the $3 billion Amazon has loaned SMEs since the launch of Amazon Lending back in 2011, and the $1.5 billion in loans Square has doled out since launching Square Capital in 2014.

Public Distrusts Wall Street Regulators as Much as Wall Street (Cato.org), Rated: AAA

The new Cato Institute 2017 Financial Regulation national survey of 2,000 U.S. adults released today finds that Americans distrust government financial regulators as much as they distrust Wall Street. Nearly half (48%) have “hardly any confidence” in either.

Americans have a love-hate relationship with regulators. Most believe regulators are ineffective, selfish, and biased:

  • 74% of Americans believe regulations often fail to have their intended effect.
  • 75% believe government financial regulators care more about their own jobs and ambitions than about the well-being of Americans.
  • 80% think regulators allow political biases to impact their judgment.

But most also believe regulation can serve some important functions:

  • 59% believe regulations, at least in the past, have produced positive benefits.
  • 56% say regulations can help make businesses more responsive to people’s needs.

Americans want regulators to focus on preventing banks and financial institutions from committing fraud (65%) and ensuring banks and financial institutions fulfill their obligations to customers (56%).

  • 77% believe bankers would harm consumers if they thought they could make a lot of money doing so and get away with it.
  • 64% think Wall Street bankers “get paid huge amounts of money” for “essentially tricking people.”
  • Nearly half (49%) of Americans worry that corruption in the industry is “widespread” rather than limited to a few institutions.
Source: Cato Institute

Few Americans Want “More” Financial Regulations—They Want the Right Kinds of Regulations, Properly Enforced

Polls routinely find that a plurality or majority of Americans want more oversight of Wall Street banks and financial institutions. This survey is no different. A plurality (41%) of Americans think more oversight of the financial industry is needed. However, only 18% think the problem with federal oversight of the banking industry is that there are “too few” rules on Wall Street. Instead, 63% say the government either fails to “properly enforce existing rules” (40%) or enacts the “wrong kinds” of regulations on big banks (23%).

Despite Distrust of Wall Street, Americans Like Their Own Banks and Financial Institutions

  • 90% are satisfied with their personal bank; 76% believe their bank has given them good information about the rates and risks associated with their account.
  • 87% are satisfied with their credit card issuer; 81% believe their credit card issuer has given them good information about the rates, fees, and risks associated with their card.
  • 83% are satisfied with their mortgage lender.
  • Of those who have used payday or installment lenders in the past year, 63% believe the lender gave them good information about the fees and risks associated with the loan.
Source: Cato Institute

Democrats and Republicans Want a Bipartisan Commission to Run CFPB, Divided on CFPB Independence

  • Nearly two-thirds (63%) of Americans think the CFPB should be run by a bipartisan commission of Democrats and Republicans, rather than by a single director. Support is post-partisan with 67% of Democrats and 64% of Republicans in favor of a bipartisan commission leading the agency.
  • A majority (54%) of Americans think that Congress should not set the CFPB’s budget and should only have limited oversight of the agency.
  • Few Americans (26%) believe the CFPB has achieved its mission to make the terms and conditions of credit cards and financial products easier to understand. Instead, 71% say that since the CFPB was created in 2011 credit card terms and conditions have not become easier to understand—including 54% who believe they have stayed the same and 17% who think they have become less clear.

Most Support Risk-Based Pricing for Loans, Say Low Credit Scores are Due to Irresponsibility

Nearly three-fourths of Americans (74%) say they’d be “unwilling” to pay more for their home mortgage, car loan, or student loan to help those with low credit scores access these loans.

Source: Cato Institute

PayPal Officially Adds Swift Financial to Fuel More Dreams (PayPal), Rated: A

The acquisition will expand PayPal’s ability to provide access to business financing options to the millions of small business owners who rely on PayPal and our partner platforms to run their businesses. As we’ve said before, increasing access to capital is vital to the success of small businesses and is a strategic offering for PayPal, which drives merchants’ sales growth, increases processing volume, and reduces merchant churn.

A Manifesto to All Men: We Have to Do Better (Lend Academy), Rated: AAA

Like many of you I was shocked and infuriated by the news out of SoFi last week. I think we all expected better from the company and its leaders. Some of the behavior that has been reported is reprehensible and it points to a much deeper problem that goes way beyond fintech. The problem of sexual harassment in the workplace is bigger than any one company, any one industry or even any one country. It is rampant throughout the globe.

Men: we cannot keep behaving this way.

I have been drinking at the bar late at night at enough conferences to know that many men believe it is still ok to treat women as objects. This kind of attitude has consequences in the workplace. And if the leaders of the company condone this behavior there will be a culture that is at best unwelcoming towards women and at worst so toxic it can endanger the very survival of the company.

Women in Fintech

People often complain to me about the lack of women in fintech. People say that LendIt does not have enough female speakers and there are not enough women in general at our events.

This article is the first step in what I expect will be a long journey towards making fintech a more welcoming place for women. I want to see us do better as an industry. We should do everything we can to make fintech an attractive career choice for young women. We have several initiatives around this that are in the planning stages that we hope to roll out at LendIt USA in San Francisco next year.

Today In Data: SoFi’s Woes (PYMNTS), Rated: A

In addition, there are rumors circulating that improperly funded SoFi loan products were sold to investors.

Here are the numbers:

  • $4 billion | Valuation of SoFi as of Sept. 15
  • $3.1 billion | Value of loans funded by SoFi in Q2 2017
  • $1.9 billion | Total venture capital funding raised by investors like Baseline Ventures, Discovery Capital and SoftBank
  • $134 million | SoFi revenue generated in Q2 2017
  • 350,000 | Number of borrowers who have used SoFi’s lending services, totaling more than $20 billion in loans
  • $75,000 | Settlement SoFi reached with a former executive assistant, as detailed by The New York Times
  • 30 | Number of employees who have leveled accusations against SoFi’s former CEO

Sallie Krawcheck’s Ellevest just landed a big new round of funding (TechCrunch), Rated: A

Ellevest, a nearly three-year-old, New York-based digital investment platform built for women and led by former Wall Street titan Sallie Krawcheck, has raised $34.6 million in fresh funding.

It’s technically a Series A round, according to the company, which says a widely reported $10 million round that closed last year was seed capital.

The round — which was led by Rethink Impact, and includes participation from PSP Growth, Salesforce Ventures, CreditEase Fintech Investment Fund, LH Holdings, SK Impact Fund, Morningstar, Khosla Ventures, Mellody Hobson, Ulu Ventures, Contour Venture Partners and Astia Angels — brings the company’s total funding to $44.6 million.

Ant Financial to try again for U.S. approval of MoneyGram deal (Reuters), Rated: A

Chinese payments company Ant Financial is planning to resubmit its application for U.S. review of its deal to buy MoneyGram International Inc (MGI.O) for $1.2 billion, a source familiar with the matter said on Friday.

Ant Financial and MoneyGram have already refiled for clearance from Committee on Foreign Investment in the United States (CFIUS) when they were unable to secure it within an assessment period after the first application, Reuters reported in July, citing sources.

Ant Financial’s latest attempt for approval would be its third as the maximum time of 75 days for assessing such applications nears completion.

JPMorgan Seeks to Banish Paper Payments With a Fintech Venture (Bloomberg), Rated: A

JPMorgan Chase & Co. is partnering with another fast-growing technology firm, this time to help business clients eradicate paper checks.

The bank is working with Bill.com, the largest U.S. business-to-business payments network, to enable customers to send and receive electronic payments and invoices, according to Stephen Markwell, a product strategy head for JPMorgan’s commercial bank. The New York-based lender will pilot the service in early 2018 and plans to offer it to more business and commercial clients later in that year, Markwell said.

While many consumers already are embracing digital tools for sending money, like PayPal Inc.’s Venmo or the banking industry’s Zelle, more than half of business payments are still via check, according to Markwell. Companies write 8 billion checks a year, each costing about $4 to print and handle, he said.

In an ongoing acquisition streak, LendingTree buys another online loan marketplace (Biz Journals), Rated: A

LendingTree Inc. (NASDAQ:TREE) has acquired an online loan platform for businesses called Snap Capital, known as SnapCap, in a potential $21 million deal. SnapCap is LendingTree’s fifth acquisition since June of 2016.

LendingTree says the acquisition has a potential value of $21 million. The online marketplace will pay $12 million in cash upfront and if SnapCap hits certain performance targets over time, it will receive contingent payments of up to $9 million.

Charlotte-based LendingTree has been diversifying its business over the last several years beyond mortgages. And its stock price has been on the rise as a result. LendingTree’s stock was up about 7% Tuesday afternoon after the acquisition announcement. The company’s shares were trading at $251 Tuesday afternoon, up from about $93 per share a year ago.

LendingPoint Closed On $ 500M Credit Facility In August (PYMNTS), Rated: A

Online lender LendingPoint announced Tuesday (Sept. 19) that it had closed an up to $500 million credit facility on Aug. 22.

In a press release, the company said the credit facility was arranged by Guggenheim Securities. LendingPoint noted it drew down $138.5 million of the facility at the closing, and it took an additional $32.7 million on Sept. 15. The proceeds are being earmarked to bankroll the growth of its consumer installment loan portfolio, a business element which has roughly doubled between August 2016 and August 2017.

According to the company, the up to $500 million credit facility is among the largest credit facilities raised in the online consumer lending market in 2017.

Pine River Capital Shutting $ 1 Billion Flagship Hedge Fund (WSJ), Rated: A

Pine River Capital Management is closing its $1 billion flagship hedge fund after clients asked to withdraw more money than the firm was expecting, according to a person familiar with the matter.

The move will further shrink the Minnetonka, Minn.-based firm’s assets under management to $7.5 billion, half the roughly $15 billion it managed in 2015.

Don’t let court squander online lenders’ chance to reach underserved (American Banker), Rated: A

Most of the country has never heard of Madden v. Midland Funding and the common law doctrine of “valid-when-made,” but the impact of the misguided decision by the 2nd U.S. Circuit Court of Appeals on consumers is far-reaching.

Rate exportation has been key to the rise of standardized nationwide financial products, like credit cards, allowing banks to lend to borrowers across state lines without necessarily establishing a physical presence in every state, giving consumers better choices.

Following the Madden decision, it is unclear in the 2nd Circuit whether certain bank loans transferred to a marketplace lending platform would be ruled valid or not. Are loans bound by the bank’s “home” state rate cap, or the borrower’s “host” state rate cap? No one knows for sure. This legal uncertainty has caused nonbank investors in these loans to pull back, which, in turn, has led to a reduction in responsible and affordable online lending. Borrowers who are still trying to build credit have lost better options. According to an August study by professors at the Columbia, Stanford and Fordham law schools, “the decision reduced credit availability for higher-risk borrowers in affected states.”

Reliant Funding and Merchants Capital Access to be known as Reliant Funding (PR Newswire), Rated: A

San Diego-based Reliant Funding and New York-based Merchants Capital Access are now joined as one under the Reliant Funding name.

Four Facts about Reliant Funding

  • Reliant Funding’s business model provides access to capital for businesses that traditional banking typically does not serve. With innovative pricing and cutting-edge risk management, it gives businesses the fuel they need to penetrate their market and grow.
  • Since its founding, Reliant has funded businesses over thirty thousand times, providing over $900 million in working capital to America’s small businesses.
  • Reliant Funding speaks directly with thousands of American small and medium sized businesses each month and services thousands more. The focus is always on the individual client, their business story and meeting their needs.
  • Reliant Funding’s Wholesale Division currently works with hundreds of partners, providing them with funding for their clients as if those clients were directly originated in-house. The key is a commitment to strategic alliances, ensuring the relationship lasts longer than a single transaction. It’s just one aspect of many which sets Reliant Funding apart from the competition.

Randstad Professionals addresses technology’s impact on finance and accounting (Business Insider), Rated: A

Cloud computing, big data and financial technologies have raised the stakes for finance and accounting professionals according to Randstad Professionals‘ new whitepaper, Technology’s Impact on Finance and Accounting.

There are three broad areas in which emerging technologies and digital tools are causing significant disruption to the way things are done:

 

  • Breaking down big data for strategy: Finance and accounting employees can use big data to their advantage by forecasting trends, pinpointing behavioral patterns and suggesting probable outcomes — all of which can tie into a company’s strategy and impact their bottom line.
  • Leaving repetitive work to the cloud: Cloud actions have the ability to handle inventory management, generate invoices and provide accurate financial data. The software also delivers convenience for employees who want to digitally share company finances among coworkers, financial advisors, customers and other key stakeholders at a moment’s notice.
  • Putting the functionality in finance: Finance is making its way into fixed markets that provide mobile phone applications and access on everyday devices. Over the years, we have revolutionized how we pay, view our bank statements and transfer money through start-ups such as Bitcoin and Linden Dollar. Technologies that also integrate peer-to-peer lending or personal loan requests allow for a frictionless experience for customers.

 

Opponents Ready For US Payday Loan Rule (America Now), Rated: A

The Consumer Financial Protection Bureau (CFPB) is expected in coming days to release a long-anticipated rule curbing payday lending, now that a final review by other regulatory agencies has concluded, three people familiar with the matter said.

The rule pits the country’s consumer financial watchdog against payday lenders who say the new regulation will wipe out much of their established industry, currently overseen by the states, and push poor and rural customers to use illegal loan sharks.

Because the loans can carry interest rates as high as 390 percent, borrowers can become trapped in devastating cycles of taking out new loans to pay outstanding ones, the CFPB said.

When The Payday Lending Rule Drops, Opponents Are Ready To Attack (PYMNTS), Rated: A

Payday and short-term lending is an approximately $6 billion-a-year industry, one that both critics and supporters of payday lending agree will take a major hit if the CFPB’s proposed rules on payday lending go through.

To make that block happen, Republicans in the House of Representatives added a “rider,” or amendment, to a spending bill banning the CFPB from regulating the payday loan industry.

The CFPB rules on payday lending have been in the works for some time and would require lenders to conduct background checks showing borrowers can afford the loans and to limit the number of loans made to a single borrower.

First Associates Loan Servicing Earns Morningstar’s Highest Ranking  (PR Web), Rated: B

First Associates Loan Servicing announced today the release of the Morningstar ranking report certifying their overall excellence in loan servicing. Morningstar awarded First Associates a MOR RV1 ranking of ‘stable’ which is the highest certification possible and deeply assesses risk management, call center performance, quality assurance, technology, security protocols, project management and disaster recovery protocols.

Low-cost loans help hurricane victims rebuild (TheStreet), Rated: B

Since the majority of consumers lacked insurance coverage for flood damage, the costs keep adding up from replacing furniture and appliances to renting another home or apartment until the costly repairs are completed.

The Small Business Administration offers both homeowners and renters disaster loans ranging from 1.75% to 3.5% of up to $40,000 for property damage such as furniture, clothing, cars and appliances and up to $200,000 for repairs to the house.

Using money from your IRA or 401(k) account is likely a better option than asking friends or family or seeking a loan from a payday lender.

RealtyShares Gives Investors Access To Real Estate With Just A Few Clicks (Benzinga), Rated: B

What makes it so diverse? The markets available or the types of real estate?

Amy Kirsch: All of the above. We’ve done deals in 39 states, we offer debt and equity, commercial and residential, and we’ve done basically every asset class.

Do you have a minimum for investment?

The lowest limit we have now is $5,000, but it varies on how large of a fundraise we’re completing.

What’s innovative about RealtyShares? The technology, or what it lets you access?
A combination of both—I’ve invested in real estate in the past, and it’s always come through people I knew, and it was concentrated to where I was living at the time. When you’re looking at middle-market opportunities or don’t have hundreds millions of dollars to invest, the opportunities become a little more rare. So access is definitely a differentiator here.

Prime-Ex Perpetual Launches Pre-ICO for Residential Real Estate Crowdfunding Effort (EIN News), Rated: B

On Monday, Prime-Ex Perpetual‘s real estate crowdfunding effort began in earnest with the launch of their PEX-Token cryptocurrency sale, aimed at generating $25,000,000 in USD equivalent cryptocurrencies. The PEX-Token is a dividend token in which the company will pay 80% of company profits back to the PEX-Token holders. Beginning Monday people purchasing PEX-Tokens will receive 15% bonus PEX-Tokens for purchasing PEX-Tokens early.

United Kingdom

GoCardless, a fintech that makes recurring payments easy for subscription businesses, raises $ 22.5M (TechCrunch), Rated: AAA

Once again, Accel, Balderton Capital, Notion, and Passion are backing GoCardless, this time to the tune of $22.5 million and on the back of what the startup says is record annual growth in the U.K. and strong, early traction in new markets. Outside of Blighty, the company operates its bank-to-bank payments network in the Eurozone and Sweden.

GoCardless isn’t disclosing revenue. Instead the company says it processes over $4bn worth of transactions across more than 30,000 organisations in the U.K. and Europe, working with small startups and large enterprises across a number of industries. It offers an API and off the shelf integrations with over 100 partners including Xero, Sage and Zuora. Customers include Sage, Thomas Cook, Box and The Guardian.

Artificial intelligence: the legal and regulatory challenges (Lexology), Rated: A

Artificial intelligence (AI) will soon be everywhere. The insurance industry is facing huge changes as AI steps boldly into every aspect of its internal operations and external relationships wearing the bright new clothes of InsurTech.

It has brought new players into the insurance market with some, like Lemonade, the world’s first peer-to-peer insurance carrier powered by AI and behavioural economics, experiencing phenomenal growth over a very short time.

It is estimated that around £1.32 billion was invested globally in the InsurTech arena in 2016, up 32% on the previous year. The lion’s share of this was in the United States but the UK and Europe are increasing their investment (see chart below).

Other innovations, such as fractional insurance where customers buy on a pay-as-you-go basis or peer-to-peer insurance, will have a deeper impact.

For Rutter, one of the key cultural challenges for the insurance industry is going to be its cautious approach to regulation.

he Financial Conduct Authority is the lead regulator in this area and it has been trying to engage the industry, setting up a ‘sandbox’ to encourage insurers to work with it to explore the impact of regulation on technological innovation. In particular, it will be aiming to test the boundaries of legislation such as the Insurance Distribution Directive (IDD).

There will be some InsurTech applications that get it wrong, predicts Rutter, potentially selling large numbers of policies to the very people underwriters don’t want on their books: “Insurers need to understand that once automated decisions have been made, you can’t pull back from them by cancelling policies. That is hardly treating customers fairly”.

Source: Lexology

Peer-to-peer lending: should you be worried about falling returns and the poorly-performing Innovative Finance ISA? (love money), Rated: A

Falling returns, big loans going bad and news that new Innovative Finance ISA has failed to attract investors is leaving questions hanging over the future of peer-to-peer lending.

The bad news began last month when RateSetter, one of the biggest peer-to-peer lenders, was forced to cough up nearly £9 million to stop customers losing money after a big loan went wrong.

It’s not just Ratesetter

At the same time, another peer-to-peer lender is coming under fire from its customers. Zopa is being criticised by customers who are seeing falling returns on their investments.

Paltry take up on the Innovative Finance ISA

Finally, interest in the new Innovative Finance ISA (IFISA) has been disappointing. New stats from HMRC shows that just 2,000 IFISAs were opened in the 2016/17 tax year.

Abundance boss joins government’s Green Finance Taskforce (AltFi), Rated: B

Bruce Davis, co-founder and MD of green energy-focused P2P platform Abundance, has been appointed to the government’s Green Energy Taskforce. The group has been set up to help accelerate the growth of green finance and the UK’s low carbon economy.

Abundance is the UK’s biggest green energy-centric peer-to-peer site, with roughly £50m in finance facilitated for projects to date, according to AltFi Data. Its investors are able to invest in debentures for projects such as wind turbines and solar farms, and can hold those investments in an Innovative Finance ISA.

China

Online lender Qudian set for New York IPO (China Economic Review), Rated: AAA

Online consumer microlender Qudian said it plans to raise up to $750 million in a New York IPO, in the second of two major fintech deals this month which are expected to kick off a wave of similar listings by year-end. But a source with direct knowledge of the situation told Caixin the final fundraising amount is likely to exceed $1 billion, possibly making it the largest IPO by a Chinese company in the US this year.

European Union

German Bank Hands $ 61 Million to U.K. Online Lender Amid Brexit (Bloomberg), Rated: AAA

Uncertainty around Brexit may be mounting as political leaders from the U.K. and the European Union clash on the terms of separation, but that isn’t slowing down foreign investors from betting on Britain’s top peer-to-peer lenders.

Varengold Bank AG, a Hamburg-based private banking firm, will provide 45 million pounds ($61 million) in annual funding for loans to small businesses arranged by MarketInvoice Ltd., the British finance company said in an emailed statement.

28,639 investors have already invested EUR 102 million through Bondora and have received EUR 15 million in interest (Bondora), Rated: AAA

2017

Company reaches cash-flow profitability 100 million euro of loans issued.

Source: Bondora

Pan-European P2P Lender Younited Credit Raises €40 million from Historical Investors & the French Public Investment Bank (Crowdfund Insider), Rated: A

Younited Credit, the Paris-headquartered consumer lender announced a capital increase of €40 million subscribed by a panel of the top of the crop growth investors in France. Next to its historical shareholders, EurazeoCrédit Mutuel Arkema, AG2R La Mondiale and Weber Investissements which are already very active in Fintech and alternative finance financing, the startup now takes on board new major investors: Bpifrance, Matmut Innovation, and Zencap Asset Management.

GoldMint, Provider of Gold-Backed Cryptoassets Launches ICO Today (The Merkle), Rated: A

Today, on the 20th of September, GoldMint is launching its ICO.

GoldMint is celebrating the beginning of its ICO by attending 3 major events on the same day the crowdsale kicks off.  One of these events is BlockchainLive in London  – Europe’s leading Blockchain conference bringing together over 75+ global experts in various fields.

Another one is Moscow’s ICO Event which this time mainly focuses on how legislation will impact the cryptocurrency space.

Today GoldMint is also present at the Global Blockchain Summit in Hong Kong gathering iconic speakers from various industries to discuss about the real-world applications of blockchain technology, as well as its potential benefits, risks, and regulatory concerns.

To spread the word about GoldMint in the USA  – GoldMint’s advisor and business developer Evgeniy Volfman has recently completed the official Northern American road trip representing the project in New York, Los Angeles, San Francisco and Miami.

Simultaneously, GoldMint is opting to expand its campaign globally, with the Middle East & Singapore regions being the current primary focus.

International

Nominations open to global Women in Fintech Powerlist (Disrupt-Africa), Rated: A

Nominations are open to Innovate Finance’s Women in Fintech Powerlist, which recognises women shaping the future of fintech around the world.

UK-based membership organisation Innovate Finance compiles its Powerlist of Women in Fintech each year, with the aim of closing the fintech gender gap by showcasing the women driving the global fintech space.

SegWit2x, NYA Bitcoin Agreement Loses Another Signatory (Cryptocoins News), Rated: A

Bitcoin peer-to-peer lending platform Wayniloans has withdrawn its support for the SegWit2x bitcoin scaling proposal and the New York Agreement (NYA).

Wayniloans joins several other companies in withdrawing support for SegWit2x and the NYA. Banking and payment processor Bitwala announced last month it will only follow the SegWit2x blockchain if it receives support from Bitcoin Core, which does not appear likely.

Australia

FinTech loans and payments (Choice), Rated: A

FinTechs are certainly in competition with other FinTechs, but the real competition is the established financial service industry, epitomised by the big four banks. Consumer banking is where FinTechs aim to cause the most disruption – and many would say it’s an area where disruption is long overdue.

One recent startup, Spriggy, is out to grab its fair share of the kids’ bank accounts market, for instance.

Over the past 10 years, consumers have lost about $5.7 billion to financial advisers and financial services providers who put their own interests first. The scandals have included Opes Prime, Storm Financial, Timbercorp/Great Southern, Bridgecorp, Fincorp, Trio/Astarra, Westpoint and Commonwealth Financial Planning.

The size of the market in Australia has grown substantially year on year. In 2014, $9.45 million changed hands by way of P2P consumer lending platforms, for instance; in 2015, the P2P consumer lending figure stood at $43.15m.

And when it comes to money raised through crowdfunding, the figure jumped from $8.2m to $26m over the same time period.

At the moment, there are at least 86 FinTech tools operating in Australia through which you can borrow money, most of which are P2P lending services.

And there are at least 24 crowdfunding services on offer. It’s no surprise, then, that the biggest external challenge for FinTechs these days is finding customers.

Nine Australian FinTech companies made the 2016 list of the top 100 FinTech innovators around the world, an annual roundup compiled by the FinTech investment firm H2 Ventures and KPMG Fintech.

  • Prospa – Offers small business loans from $5000 to $250,000 with payback terms from three to 12 months, “for any business purpose”
  • Tyro – A payment system technology designed for businesses.
  • Society One – A P2P lender that says it provides “simple, investor funded personal loans with low rates based on your good credit history”.
  • Afterpay – Allows you to pay for goods in instalments direct debited from your credit card or other payment option.
  • Brighte – Offers 0% interest loans to approved homeowners for household energy efficiency improvement, such as solar panels or more efficient windows.
  • Data Republic – A customer data exchange service to help businesses better target their services to customers.
  • Identitii – Allows banks and other financial institutions to get more information about where and when payment transactions occur.
  • HashChing – An online home loan service that connects you with mortgage brokers.
  • Spriggy – Allows parents to manage kids’ bank accounts using digital tools.
India

RBI notifies P2P lending platforms as NBFCs: Agencies (India Times), Rated: AAA

The Reserve Bank of India on Wednesday notified that peer-to-peer (P2P) lending platforms would be treated as non-banking financial companies (NBFCs), an agency reported. This suggests the lending interface will now come under the purview of RBIs regulation under the RBI Act.

Company Name : Rubique (Business Wire India), Rated: B

Rubique, India’s leading FinTech company, is now taking giant strides in enhancing the level of education and training in the FinTech domain in India. In view of the highly lucrative opportunities that await young professionals in the landscape, it is leveraging its expertise to co-certify courses in FinTech at the prestigious SP Jain School of Global Management.

Latin America

Fintech Startups Attract Capital In Latin America (Forbes), Rated: A

Many Latin Americans are hard pressed to obtain credit for their businesses or family needs, as 49% of adults do not have bank accounts.

The region’s fintech industry secured $186 million in venture capital investments last year, according to the Latin America Venture Capital Association (LAVCA) – with more than one-third going to startups. Deal count increased by 81%, with 38 transactions.

In Brazil, 160 million adults have some type of banking relationship, but only 55 million are borrowers, according to the country’s central bank. This, combined with more than 20 million unbanked people, turns Latin America’s largest economy into a fertile ground for fintechs, says Jose Prado, founder of Conexao Fintech, an online hub for fintech entrepreneurs and enthusiasts.

Creditas raised $19 million in a Series B funding round. The Sao Paulo-based firm provides asset-backed debt focused on auto and mortgage loans.

In Mexico, where 55.9% of adults have no access to any form of savings deposits, fintechs are offering digital, user-friendly alternatives to traditional banking products, according to Jorge Ortiz, founding president and CEO of non-profit organization Fintech Mexico.

Ripio Credit Network Announces ICO Pre-Sale, Crowd Sale Starts on October 17 (Crowdfund Insider), Rated: A

Ripio Credit Network, a company that has raised $5 million in funding from VC like Tim Draper, Pantera, DCG, Overstock (Medici Ventures) and others. Has launched their Initial Coin Offering pre-sale as they gear up for the crowd sale scheduled to launch on October 17th. This comes just as Ripio has received a nice recognition, along with a check, from the d10e Pitch competition.

Ripio, a prominent crypto-based company in Latin America, is building a global credit network solution that aims to enhance transparency and reliability in credit and lending. Ripio is designed to enable connections between lenders and borrowers located anywhere in the world, regardless of currency.

Africa

FMO and above & beyond launch Fintech platform for African Banks to accelerate financial inclusion (FMO), Rated: AAA

FMO together with Miami based Fintech and digital transformation strategists above & beyond (a&b),  launched “ FinForward”, a marketplace where Fintech companies, Financial Institutions (FIs) and Mobile Money Providers (MMPs) in Africa are matched.

The objective of the new platform is to accelerate the digitization of the financial industry in Africa by supporting innovation of the core business with digital solutions. The matching and integration tool will make global Fintech companies accessible and top-of-mind to African financial institutions in order to help them to reduce costs, innovate, add services, tap into new revenue streams and work towards open banking platforms. It will also enable them to service difficult to reach segments such as the bottom of the pyramid, women and small entrepreneurs.

The matching and integration tool will make global Fintech companies accessible and top-of-mind to African financial institutions in order to help them to reduce costs, innovate, add services, tap into new revenue streams and work towards open banking platforms. It will also enable them to service difficult to reach segments such as the bottom of the pyramid, women and small entrepreneurs.

How does it work?

  • Outreach  – Banks, Mobile Money Providers and Fintechs are invited to join
  • Fintech Opportunity Scan – Participating banks and mobile money providers define their problems and needs
  • Matching – Pairing of Fintechs based on problem definition
  • Acceleration & Integration – Testing of Fintech solutions in a sandbox and integrating the technology into the bank’s operations
  • Showcase – demonstrate success during showcase days

Authors:

George Popescu
Allen Taylor

Thursday February 9 2017, Daily News Digest

south korea p2p

News Comments Today’s main news: Huge spike in deposits after Lending Works launches IFISA. Public-private partnership forms Online Lending Policy Institute. Today’s main analysis: How private debt/alternative credit boosts income, risk-adjusted returns. Today’s thought-provoking articles: What roll-back of Dodd-Frank means for MPL. An end to P2P wholesale lending. BondMason calls for end to provision funds. United States Private-public […]

south korea p2p

News Comments

United States

  • Private-public partnership forms OLPI. AT: “This is an interesting approach to dialogue concerning MPL innovation, regulation, and growth. Where the Marketplace Lending Association exists primarily for the benefit of lenders, the OLPI seems to have its focus on consumers. Both attempt to influence public policy, but they different paths.”
  • What rollback of Dodd-Frank means for MPL. AT: “I completely agree that regulation legitimizes the industry, but I am concerned that over-regulation can kill innovation. On the other hand, there is a real danger that protectionist policies can lead to banks reverting back to risky lending practices, hurting consumers, and making it difficult for marketplace lenders to compete. I hope we can strike a fine balance that encourages innovation, fosters competition, and provides more options for consumers.”
  • Zoot Enterprises XOR Data Exchange partner on risk mitigation.

United Kingdom

European Union

China

Asia

News Summary

United States

Unique Public and Private Partnership Forms Online Lending Policy Institute (Yahoo! Finance), Rated: AAA

The Online Lending Policy Institute (OLPI) today announced its formation and the appointment of its first Executive Director, Professor Cornelius Hurley. OLPI will provide a one-stop resource for those interested in Fintech generally and marketplace lending specifically. The OLPI will provide research and education to ensure informed policy and best practices.

The OLPI provides policy analysis, in-depth research, broad educational initiatives (like the successful MPL Policy Summit), and relevant and engaged thought leadership to foster responsible growth of online lending (providing a strong bridge between established financial services and technology knowledge). To that end, the OLPI convenes various stakeholders, facilitates industry consensus, and encourages the development of a regulatory framework that protects borrowers while promoting innovation.

Key activities of the OLPI will include:

  • Substantive research that affects the online lending industry
  • Publishing white papers, studies, and reports
  • Engaging policy makers and industry stakeholders in the creation of forward-thinking public policy
  • Commissioning studies to ensure policymakers and those studying the industry have accurate data to rely on
  • Hosting the annual MPL Policy Summit to share, educate, and exchange ideas
  • Acting as the one-stop solution for all who seek to understand legal and regulatory landscape of online lending
  • Providing the tools necessary to ensure responsible innovation in Fintech– OLPI will be a valuable research resource for the various associations that have already formed to advocate for Fintech

To reach its goals, the OLPI knew it was important to be led by an expert in financial services thought leadership that has built a reputation of integrity and innovation with the banking community at large. The OLPI is pleased to announce the appointment of Professor Cornelius Hurley as the first Executive Director of the Institute. Professor Hurley brings more than 35 years of diversified legal, entrepreneurial, and academic experience in the financial sector.

OLPI’s growing roster of members includes founding members Cross River Bank, Boston University’s Center for Finance, Law & Policy, and RocketLoans, among others. OLPI will announce its broader membership, including many leading industry players at LendIt 2017, where OLPI will host a day of legal and regulatory panels.

What Trump’s Rollback of Dodd-Frank Means for Marketplace Lending (Forbes), Rated: AAA

For marketplace lenders, the industry has matured despite a relative lack of federal regulation and uniformity. While it has thrived due to reduced oversight from lending authorities, a wave of deregulation in Washington could be a curse rather than a blessing as it can further erode the legitimacy fintech pioneers have started to garner since the great recession.

While reactionary regulations can hinder economic recovery, Dodd-Frank was structured in a way that made enacting new rules a heavily vetted process.

Bank lending has increased at a rate of 6 percent a year since 2013, reaching a record high of $9.1 trillion in commercial loans in 2016 and JPMorgan increased core loans more than 10 percent across all categories. If the banking sector has struggled under Dodd-Frank, it hasn’t curtailed profits.

Dodd-Frank has made it much more difficult for consumers to gain access to mortgages and other loan products and raised some costs, in turn affecting profitability, particularly among smaller community banks.

Regulation For Marketplace Lenders Creates Legitimacy

Without smart regulation, fintech companies will continue to be at a disadvantage when compared to brick and mortar counterparts, making it more difficult for a still-developing industry to establish itself as a legitimate entity.

Disruptive innovation can often flourish in this vacuum, but there’s a cost. Without the legitimacy that regulation offers, marketplace lending could struggle to be taken seriously as a direct competitor of the established banking system.

The danger lies in overregulation, but we are a long way from that.

Zoot Enterprises, XOR Data Exchange Partner For Risk Mitigation (PR Newswire), Rated: A

Zoot Enterprises has announced that it has formalized an agreement with XOR Data Exchange to provide Zoot clients access to multi-industry data predictive of identity theft and fraud risk. With the rise in online fraud, clients rely on Zoot to identify new ways to support their business strategy and quickly react to new fraud trends.

The partnership will bring a wider variety of predictive data sets and analytics to institutions that rely on Zoot for their platform needs across a wide variety of industries including financial services, merchant services, telecom, insurance, and healthcare. By sharing data through XOR, businesses are reducing credit and fraud losses, while providing additional insight into fraud rings that may target several different industries and establishing the creditworthiness of businesses that may not be identified using traditional providers.

United Kingdom

Huge Spike in Deposits Reported After Lending Works IFISA Launched (P2P-Banking), Rated: AAA

Lending Works CEO Matthew Powells reported an influx of more than 500K GBP deposits within 3 hours after launching the Lending Works Innovative Finance ISA (IFISA). Lending Works’ IFISA product offers 4% (up to 3 years) or 4.7% (up to 5 years term) tax-free for investments on the p2p lending marketplace.

A recent survey of Lending Works’ existing investors found that 88% plan to open an IFISA, with around a third expecting to invest between 10,000 GBP and the maximum threshold of 15,240 GBP of their annual ISA allowance into the IFISA before the end of the tax year in April.

First major peer-to-peer Isa becomes available, offering up to 4.7pc tax-free (The Telegraph), Rated: AAA

Lending Works has become the first large peer-to-peer company to offer an “innovative finance Isa”, beating several better-known rival lenders to the launch.

The new Isas will offer the same rates and terms as Lending Works’ existing accounts. Investors can lend over a three or five-year period. Three-year loans attract interest of 4pc and five-year loans earn 4.7pc. 

Of these only three have launched an Isa. The companies, Abundance, CrowdStacker and Crowd2Fund have lent out less than £100m between them in total.

An end to the nascent P2P wholesale lending market (Financial Times), Rated: AAA

Last weekend, the Mail on Sunday reported that lending money to businesses that in turn lend that money on — aka wholesale lending — is something the regulator reckons doesn’t count as P2P lending. According to the Mail, the FCA thinks P2P lenders doing this “would mimic banking – but without the same protection for individuals or regulations for the firms involved”.

Good news for fans of clarity. Less good news for fans of Ratesetter, a leading P2P lender with a boundary blurring business model and a wholesale lending operation that has historically made up around 15 per cent of its loan originations, as we showed in March last year.

The FCA’s views on wholesale lending in the P2P sector are not entirely clear. One advisor to P2P lenders said “different platforms have been getting different messages”, but suggested the practice might raise the question of whether deposit taking was going on. As they explained it, a lending business borrowing from a P2P lender would, in effect, be borrowing money from ordinary people for the purposes of lending it on, which is not a million miles away from what a bank does. In short, the P2P lender might be viewed as a channel for attracting deposits.

P2P investing firm calls for end to provision funds (P2P Finance News), Rated: AAA

PEER-TO-PEER lenders should not use provision funds, a P2P investment manager has argued in a new report.

BondMason claims the funds, used by platforms such as Zopa and RateSetter, are just a tool to attract lenders.

The investment firm, which aims to get clients a seven per cent return by selecting P2P loans across approved platforms on their behalf, argues that provision funds “do little (nothing) to improve returns for well-diversified investors.”

Looking at the wider market, the BondMason report found lending in the P2P market grew by 39 per cent in 2016 to £3.2bn but warned that this was down from the annual growth of 91 per cent between 2014 and 2015.

19 laptops containing customer information have been stolen from fintech company GoCardless (Business Insider), Rated: A

Fintech business GoCardless is offering some customers free credit monitoring for a year after admitting 19 laptops containing personal information were stolen from its offices.

The stolen laptops contained personal data on an unspecified number of customers, such as email addresses, passport numbers, dates of birth, and names, according to The Register, which first reported the theft. Importantly, no financial data was held on the laptops.

LendInvest unveils refurbishment product (Mortgage Introducer), Rated: A

LendInvest has launched a refurbishment product with interest between 0.92% and 1.1% per month which is rolled up and paid at the end of the term.

The loan is based on gross development value, not loan-to-value – and is available up to 70% GDV.

Customers can take out loans between £100,000 and £2m for terms up to 18 months.

Peer to Peer Lending on “Right Path” as Wealth Managers Seek Quality Investments (Crowdfund Insider), Rate: A

BondMason has published its Market Report 2017 reviewing the trends in the UK peer to peer lending market.  BondMason is a platform that provides investors a method to diversify their investments across many P2P lending platforms.

According to BondMason’s research, P2P lending is beginning to see a flight to quality as the industry matures and weaker platforms exit the market. BondMason’s numbers indicate that the UK direct lending market totaled £3.2 billion of lending in 2016. This is an increase of 39% versus 2015 but a drop in growth as the industry grew by 91% from 2014 to 2015.

BondMason believes there is significant room for growth of the online lending sector. While P2P lending accounted for £3.2 billion during 2016, the total addressable market is between £100 to £120 billion in the UK.

NatWest to offer online investment fund service and ‘robo-advice’ (Financial Times), Rated: B

NatWest is unveiling a service for customers to access investment funds online through the bank for the first time, ahead of plans to launch a “robo-advice” service later this year.

The service, called NatWest Invest launches later this month and will allow bank customers who do not wish to pay for financial advice to choose their own funds and invest with a minimum of £500.

Other banks in the UK are planning to follow suit by offering robo-advice. Santander is among the lenders in the process of developing an automated advice service and has invested in robo-adviser provider SigFig.

FinTech Monthly (Tech City News), Rated: B

Monese, an online banking app, raised a $10m Series A round. The app enables non-native citizens to open a UK bank account.

Seedcamp sold part of its stake in money transfer startup TransferWise. This news came shortly after it was reported that US giant Andreessen Horowitz increased its investment in the London-based startup.

And finally, Mastercard has launched a mobile marketplace for East Africa’s agricultural sector. The digital platform, called 2KUZE, meaning ‘let’s grow together’ in Swahili, will enable farmers to buy, sell and receive payments for agricultural goods via their phones.

European Union

How Private Debt/Alternative Credit Boosts Income and Risk-Adjusted Returns (LinkedIn), Rated: AAA

Quantitative easing has caused a significant distortion of asset prices and market dynamics. It has had an enormous impact on the price of most publicly-traded liquid assets, causing yields to drop below a level any return can historically justify. In this context, investors are looking for alternative solutions and private markets offer significant investment opportunities and value enhancement.

Alternative Investments and Alternative Credit have asset solutions that are very different from each other with very dissimilar drivers. Understanding these asset classes requires specialization and expertise. For example, in banks, sub-asset classes such as shipping, trade and commodity finance, infrastructure finance, leverage loans, and leasing are executed by specialized departments and treated as asset classes on their own merits.

Firstly, the active asset managers and institutional investors are providing the alternative sources of credit either directly or through their clients. This began the growth of a credit market along with the traditional bank lending in some sectors. The shrinking balance sheets of banks presented a tremendous opportunity for investors who were jolted by traditional fixed-income securities and needed options for diversification and higher yields.

Secondly, many new so-called Fintech companies in Alternative Lending have entered the market and established business models which are challenging the traditional status quo. They are still small in size in comparison with incumbent players; however, their business model is addressing many current challenges in the financial sector (inefficiency, information asymmetry, maturity transformation).

The increasing participation of the institutional investor market and new platforms are likely to bring more transparency regarding the actual return contribution of different asset classes in the future.

How Does Alternative Credit Enhance Risk-Adjusted Return and Income?

Currently, most liquid fully “institutionalized” asset classes do not offer the appropriate balance between risk and return. Monetary interventions themselves over the past few years have caused a positive return  on the most liquid public assets solely as a result of artificial demand pressure.

Contrary to public traditional fixed-income markets, Alternative Credit offers a private pricing differential (PPD) of 0.5% to 5% over the fixed income market, which is an attractive level.

In these uncertain times, Alternative Credit offers a plausible answer: “Going for the safest part in the capital structure and going for shorter tenors.”

  • Credit investments currently the highest safety in capital structure.
  • Alternative Credit can enable exposure for shorter tenors to self-liquidating assets (trade finance, factoring, supply chain finance).
  • Alternative Credit offers a floating rate exposure.

The best feature of Alternative Credit is its due diligence.

Alternative Credit offers portfolio construction opportunities to diversify other asset classes traditionally owned by banks (not mark to market) and segments that are not yet on the public market’s radar.

As equities became too volatile after the financial crisis of 2008, Private Debt became a surrogate for high-yield bonds. In addition, there was a contraction of more than 70% in the AAA-rated bonds and many of them lost their triple-A status (Preqin, 2014). This provided the cornerstone for the development of Alternative Credit, which enhanced the return of the portfolios by offering a combination of higher rates of return and lower risk.

Alternative Credit has already become the cornerstone of investments in many institutional portfolios and has become a regular source of income. It can be concluded that Alternative Credit is the new form of asset class that is expanding quite rapidly, in part due to the shortage of credit created by the credit crisis.

What drives the success of crowdfunding campaigns? (Invesdor), Rated: A

The first article, titled “Success drivers of online equity crowdfunding campaigns” addresses the research question that Andrea so aptly formulated. The question is highly relevant, as a large part of crowdfunding campaigns – both on Invesdor and on other platforms – have not reached their funding targets. Could something be done to increase the probability of a campaign succeeding?

Based on sixty campaigns that had been conducted via Invesdor, we found the following:

1.  Campaign characteristics that are pre-determined by the target company – with assistance from Invesdor – are relevant in determining the campaign’s success:

  • The lower the minimum investment requirement, the more investors and funds a campaign can be expected to attract.
  • Campaign duration is negatively associated with the number of investors.
  • Higher funding targets seem to attract larger numbers of investors.
  • The availability of financials in the pitch is positively associated with the number of investors.

2. The use of the entrepreneur’s (and Invesdor’s) networks is important for campaign success.

  • The more money the target company can raise through its and Invesdor’s private networks during the hidden phase, the more investors and more funds it is likely to attract in total.
  • Posting the campaign on social media is a strong predictor of success.

3. The understandability of the target company’s products may play a role in success

  • The results indicate that companies that offer consumer products, rather than products targeted to other businesses, may be more likely to conduct successful campaigns.

The results presented here are based on an aggregate assessment of campaigns and investments.

Fellow Finance Group 1 January – 31 December 2016 (Fellow Finance), Rated: B

2016 was a year of rapid growth for Fellow Finance. The number of platform users grew 220% and the total amount of intermediated consumer and business loans in Finland and Poland was above 50 million euros. This growth resulted in the overall loan volume exceeding 90 million euros which strengthened Fellow Finance’s position as the leader of the crowdfunding platforms in the Nordic countries and with 4,3% market share in continental Europe (source: Liberum Altfi Index). In Finland, Fellow Finance’s market share was over 30% of the whole crowdfunding market (source: Ministry of Finance of Finland). The average of annual yield for investors was 11%.

China

Hong Kong government dismisses report ranking city 5th for fintech (South China Morning Post), Rated: AAA

The government has dismissed a research report ranking Hong Kong only fifth last year among leading fintech hubs, saying the study did not directly compare financial technology development but rather financial and business environments as a whole.

During a Legislative Council meeting on Wednesday, finance sector legislator Chan Chun-ying asked the government why Hong Kong ranked three spots behind rival Singapore – which ranked second – in the report by global accounting firm Deloitte.

Banks should embrace fintech boom (The Straits Times), Rated: A

Fintech complements rather than threatens banking institutions. In my experience, banking has always been about technology, so today’s fintech innovation boom represents evolution rather than revolution for traditional banking. It is supplementing and diversifying the existing financial system – not replacing or disrupting it.

If we look closely, fintech is currently only focusing on a mere fraction of the financial services spectrum. To date, much of the focus of fintech has been on retail banking services – lending and financing along with payments-related products and services, where mobile and e-commerce has led to real demand from consumers.

Similarly, peer-to-peer lenders appear to be more focused on small businesses and higher-credit-risk borrowers than on mainstream banked clients.

Asia

Korean government to tighten watch over P2P lending (Pulse), Rated: AAA

From the second quarter, the government plans to toughen watch and scrutiny on peer-to-peer (P2P) lending service in burgeoning demand in South Korea.

Currently, moneylenders with assets worth at least 12 billion won ($10 million) fall under the broad state regulation. Smaller lenders can run money business upon registering with local governments.

Under a new act that would go into effect in the second quarter, small lenders also would have to comply with state regulation and watch.

Kelvin Teo erases borders with an online lending platform (Asian Review), Rated: A

In January last year, Riza Fansuri was in a quandary. The 37-year-old, who runs a small food supplier in a Jakarta suburb, wanted to develop new products, but that would take money. He tried applying for loans at banks, but they all turned him down because he could not provide sufficient collateral.

Desperate for help, he turned to a website for peer-to-peer lending, a method of debt financing that allows individuals to lend and borrow money directly from each other online instead of borrowing from banks. Half in doubt, he applied for a loan, and a week later, he managed to secure the 100 million rupiah ($7,485) needed to carry out his plan. His company successfully created two new products — instant ice cream and pudding mixes — that now account for 40% of its sales.

The website Fansuri used is run by Funding Societies, a fintech startup that operates in Indonesia, Singapore and soon in Malaysia. The company was founded by Kelvin Teo, a graduate from Harvard Business School, and Reynold Wijaya, an Indonesian classmate from the school. In less than two years, the company has arranged more than 360 loans worth a total of $19 million.

Authors:

George Popescu
Allen Taylor