With several fintech companies reporting earnings disappointments over the last two weeks and with FinTech Unicorn GreenSky, Inc. (GSKY) that IPO’d less than fifteen months ago now considering strategic alternatives, both public market and private equity investors have to consider the longer tail implications for the sector. Is the public market fairly valuing the underlying […]
With several fintech companies reporting earnings disappointments over the last two weeks and with FinTech Unicorn GreenSky, Inc. (GSKY) that IPO’d less than fifteen months ago now considering strategic alternatives, both public market and private equity investors have to consider the longer tail implications for the sector. Is the public market fairly valuing the underlying business fundamentals and growth opportunities being pursued by fintech companies? Should GreenSky have stayed private? And given the GreenSky situation, will other FinTechs be able to gain access to much needed capital (both public and private) for further growth and value creation?
GreenSky has repeatedly under delivered relative to market expectations. The company reported second quarter earnings last week of $0.19 (versus consensus expectations of $0.23) due to weaker-than-expected lending volume. Not only were earnings short of expectations but transaction volumes grew 20% year-over-year when the company had indicated that it would deliver 30% growth. Add to these disappointing performance metrics the fact that one of GreenSky’s bank partners announced it would not renew its asset buying relationship with the company and GreenSky is now looking for alternative funding arrangements. All of this news was eclipsed by management announcing that it is considering “strategic alternatives”. The stock declined 37% on the day the quarter’s results were announced, driving its 21% underperformance for 2019 and adding to its 67% decline since its IPO just last May.
Public companies have nowhere to hide when things do not go as planned. When expectations are repeatedly not met and business models do not deliver the profits that technology-enabled business models suggest should be produced, recently minted public companies are punished severely. Public companies cannot contain the bad news to the board room where private equity investors complain loudly but their complaints lack the echo chamber of the public markets. GSKY cannot do a down round in private and has to take its lumps in public. There was similar news for OnDeck (ONDK) last week when it announced alongside its earnings that JPMorgan Chase (JPM) was ending its loan origination partnership (ONDK shares declined 23% that day and is down 43% YTD, and off 83% since its IPO). The FinTech world was banking on these bell weather companies delivering strong, sustainable business models that would reshape the financial services landscape. So far, this is not what happened.
GSKY’s and ONDK’s woes are only the beginning for private fintech companies. Earlier stage FinTechs look to the public FinTechs as reference points and hope that they can replicate their IPOs and deliver sustainable growth. GreenSky could have been that shining success, but it appears to be example of what can go wrong when a FinTech goes public. Growth stage companies tell their private investors that if they grow fast enough and big enough, they can go public — like public companies GSKY and ONDK. But, when these companies underperform with significant market value erosion and talk about exiting the public market, it sends shudders down the backs of private lenders and the investors who back them.
What are the lessons that private companies can glean from the disappointing news coming from the public FinTechs? Under promising is a winning strategy. Fin-techs have to stop falling into the trap of setting expectations so high that they miss delivering against them. The public market has demonstrated that newly minted public companies will be severely punished for missing performance targets. And while founders want big valuations and private equity investors need big write ups to be viewed as successful, they would both be far better served setting expectations lower by accepting lower initial public valuations and thereby allowing themselves to set lower performance targets for the 12 to 24 months after they IPO. This sort of thinking may seem logical to observers of this market, but when you are neck deep in the FinTech market as an operator, investor or banker, it is hard to avoid overheating expectations and valuation. With each capital raise leading to quantum leaps in valuations, private companies have to set very heady goals for their IPOs and for the year post going public. After all, the IPO buyers need a big return too. And this dynamic has ended recently with a very disillusioned FinTech market. If we wish to see FinTech deliver on the promise of next-generation financial services with transformational value add, better economics, and broad adoption, we have to give these companies the time to grow into world beaters. It cannot happen overnight and promising such only leads to creating a cynical market that will think twice about investing in early-stage and later-stage FinTech innovators.
Andrew Marquardt is a partner at Middlemarch Partners, LLC, a merchant banking firm that advises and invests in financial services companies, with a particular focus on fintech and tech-enabled growth companies.
News Comments Today’s main news: Prosper reports Q2 results. Figure to raise $1B. Funding Circle shares rise. RateSetter to stress test provision fund. LendInvest raises 200M GBP. Two more Chinese P2P firms shut down. N26 eyes IPO. Today’s main analysis: Gen Z’s credit market activity. Today’s thought-provoking articles: Radius Bank’s rebranding to banking as a […]
Prosper, a peer-to-peer lending platform connecting borrowers and investors, today reported financial results for the second quarter of 2019. Personal loan originations increased 27% compared to the first quarter of 2019, and the company has now generated positive adjusted EBITDA in eight out of the last nine quarters.
Total Net Revenue, which includes the non-cash impact related to warrants to purchase preferred stock, increased to $42.9 million in Q2 2019 compared to $31.7 million in Q2 2018.
Core Revenue(1), which excludes the non-cash impact related to warrants to purchase preferred stock, decreased to $50.7 million in Q2 2019 compared to $52.3 million in Q2 2018.
Net Loss decreased to ($0.6) million in Q2 2019 compared to a Net Loss of ($12.6) million in Q2 2018.
Adjusted EBITDA(1) decreased to $5.3 million in Q2 2019 compared to $8.8 million in Q2 2018.
Key Operating and Financial Metrics (Unaudited) (in thousands)
Mike Cagney, the former embattled chief executive officer of Social Finance Inc., is raising more than $100 million for his new startup Figure Technologies Inc. at a $1 billion valuation just less than two years after its founding, according to people familiar with the matter.
San Francisco-based Figure uses blockchain technology to provide home equity loans online in just a few days, with approval happening in minutes. The company made its first loan in 2018, and is on pace to provide more than $80 million in loans this month alone, according to one of these people, who asked not to be named because the details are private.
Gen Z, those individuals born in 1995 or after, increasingly took part in the consumer credit market during the first half of 2019. The newly released Q2 2019 Industry Insights Report from TransUnion (NYSE: TRU) found that growth is coming from the entire Gen Z demographic who are 18 years or older – not just those who became credit eligible for the first time.
Approximately 14 million Gen Z consumers (44% of this group) were carrying a balance as of Q2 2019, up from 11 million in Q2 2018, according to the report. The number of Gen Z consumers who were credit eligible (18 years or older) increased by 4.5 million in the last year, rising to 31.5 million in Q2 2019. Over the next three years, it is anticipated that another 13 million Gen Z consumers will become credit eligible.
Gen Z Consumers Carrying a Balance Rising at High Rates
YOY Growth %
Credit cards are the most popular product among Gen Z consumers, with 55% carrying a balance—though they still only constitute 5% of the U.S. population carrying card debt. Mortgages had the largest year-over-year growth rate spike with Gen Z consumers (112%), but from a low base. Mortgages are still the credit product Gen Z consumers are least likely to have, with only 0.5% of mortgages held by members of this generation.
The Percentage of Gen Z Consumers Carrying a Credit Balance is Growing (Data as of Q2 2019)
If Klarna is a threat to the online payments pioneer Paypal, it’s very much the challenger, with the latter enjoying 30 times greater revenue. Notwithstanding this, Klarna is making impressive gains, increasing transaction volume by 36% in 2018.
According to a recent press release, Klarna is now serving the needs of 60 million consumers and 130,000 merchants. It has achieved transaction rates in the region of 1 million transactions per day and believes it can generate an annual revenue of $1 billion in the foreseeable future.
Lendio Franchising, Lendio’s marketplace lending franchise program, announced on Tuesday it has facilitated $50 million in loans to over 1,800 small businesses around the U.S. According to Lendio, the loans through the franchise provide a boost to small businesses in industries ranging from healthcare to trucking, with an estimated economic impact of $165,505,834 across local economies.
Inc. Magazine today ranked commerce platform LendingPoint No. 17 on its 37th annual Inc. 5000, the most prestigious ranking of the nation’s fastest-growing private companies. LendingPoint joins companies such as Microsoft, Dell, Pandora, Timberland, LinkedIn, Yelp, Zillow, and many other well-known names who gained their first national exposure as honorees on the Inc. 5000. LendingPoint has hit successive funding records year-over-year and is on pace to reach $100 million per month in loan originations by the end of 2019.
OppLoans has been named to Inc. magazine’s prestigious 2019 Inc. 500 list for the fourth year in a row. Only four companies on this year’s list, including OppLoans, have placed on the Inc. 500 at least four or more times. With a three-year annual revenue growth of 1,435%, OppLoans placed #321 on the annual ranking of the fastest-growing companies in the U.S., 19 spots higher than the firm placed in 2018. OppLoans has achieved rankings of #340 (2018), #219 (2017) and #445 (2016).
Finicity, a provider of real-time financial data access and insights, announced today the rollout of its Student Loan Account Verification product, which will simplify employer benefit repayment programs, where employers are looking to contribute to or help repay employee’s student loans.
One firm’s dominance over the credit scores used to vet many U.S. mortgages is getting a shake-up.
Fannie Mae and Freddie Mac, two mortgage-finance firms that back nearly half of U.S. mortgages, will have to consider credit-score alternatives to Fair Isaac Corp.’s FICO score when determining a mortgage applicant’s creditworthiness, under a new rule issued on Tuesday by the mortgage-finance giants’ federal overseer.
HSBC USA partnered with Amount, a tech provider for financial institutions, to launch a digital lending platform that streamlines online personal loan applications. Consumers can evaluate loan options, submit applications online, and receive a credit decision within minutes.
HSBC will initially lend up to $30,000 with terms ranging from two to five years and it says funds will be available as quickly as the next day. The bank will charge fixed monthly payments starting 50 days after customers receive the loan. Amount’s platform — which has cumulatively originated $6 billion in loans to 800,000 customers — has been customized to HSBC’s preferences, including its proprietary risk models.
In the past decade we’ve seen a new financial movement take shape: a focus on giving more investors a seat at the table. More and more people and organizations are realizing that investors of all income levels and backgrounds could (and should) have the opportunity to access more asset classes. In this technology-enabled age of access, data and transparency in investing, there is an opportunity to update our laws to ensure that smaller investors are not excluded from the opportunity to create wealth — opportunities that have emerged under the financial ethos of fintech: crowdfunding, peer-to-peer, financial literacy and inclusion.
Tricolor, the used vehicle retailer focusing on the sale and financing of vehicles to the Hispanic consumer, today unveiled a groundbreaking new affordable auto insurance option for low-income and credit invisible customers through its affiliate company Tricolor Insurance. After testing the product earlier this year, Tricolor will begin rolling out the new insurance offering throughout all of its markets in Texas and California.
To date in 2019, Artivest, a multi-billion-dollar alternative investment platform, has achieved exponential organic growth across nearly every aspect of the business, greater than any previous full calendar year in the company’s history. The firm has attracted more new investors, allocations, investment managers, and—most importantly, in regard to how the wealth management industry gauges the success of digital platforms—has surpassed $1 billion in new investments transacted online by high-net-worth investors into private funds, at low minimums.
Last week, online lender Funding Circle (LSE:FCH) released its 6-month report and the shares have responded positively to the numbers. Six-month Revenue was reported at £81.4 million versus H1 2018 at £63.0 million – up 29%. Loans under management rose 37% to £3.54 billion and originations jumped 14% to £1.19 billion.
RATESETTER is planning to introduce stress testing to its provision fund over the next financial year.
The ‘big three’ peer-to-peer lender’s provision fund is a buffer that protects investors against losses should any of its loans default. Borrowers pay cash into the provision fund in accordance with RateSetter’s assessment of their creditworthiness.
LendInvest has now raised over £1.8 billion of debt and equity from investors, making LendInvest one of the largest non-bank mortgage lenders in the country.
This new funding expands LendInvest’s capacity to lend in the UK Buy-to-Let market. LendInvest launched its first Buy-to-Let mortgage product in late 2017 after agreeing a substantial funding line with Citigroup. LendInvest has already lent more than £370 million in Buy-to-Let loans and is taking market share in the bank dominated market. In June this year, LendInvest also become the UK’s first Fintech business to securitise its own portfolio of assets worth £259 million, which received a AAA rating from Moody’s and Fitch.
The research — conducted across 100 UK SME decision makers at online retailers in 2019 — shows the UK’s SMEs understand the need to embrace flexibility and innovation. Over the next 12 months they plan to prioritise investing in flexible payment options (49%) and e-commerce capabilities (48%) to meet consumer demand for a frictionless shopping experience.
Mobile bank Tandem is developing the UK’s first crowd-designed mortgage for those hoping to get on the property ladder, allowing priced-out consumers to share their personal mortgage must-haves with the digital challenger.
RATESETTER alumni Brian Cartwright has launched new alternative property lender Nexa Finance, with a focus on the East Midlands.
Cartwright (pictured), managing director at Nexa, previously worked as head of business finance at ‘big three’ peer-to-peer lender RateSetter.
His new venture, which bills itself as a regionally-focused business lender, aims to connect East Midlands-based small- and medium-sized enterprise (SME) property developers and house builders with funders.
MEMBERS of the Personal Finance Society (PFS) have been showing an increased interest in peer-to-peer lending, leading the PFS to produce its own ‘good practice’ guide to P2P.
The financial planning trade body has partnered with Octopus Investments to create the guide, which tells advisers that recommending P2P products could help them to increase their own assets under management, adding that “for suitable clients, it could prove a useful vehicle for excess cash holdings which may currently fall outside of the adviser’s view.”
I worked for Wonga.com in 2010, back when you couldn’t even go to the bathroom without hearing their jingle on the radio. Like most offices today, everyone put in £10 to play in the office fantasy league and with Van Persie and Rooney in their prime, this was my year.
After doing some calculations, my £160 owed to me in 2010 would now be worth £2,752. (based on £24 per month for 9 years)
Without the price cap, you have 4 of those years at £30 per month. Making the total figure £3,040.
But again, I am being kind. This does not include default charges of £25 per month for every missed payment.
Zendai Group, a closely held private investment company in Shanghai, abruptly shut down two peer-to-peer lending units valued at 10 billion yuan (US$1.4 billion), as Chinese financial regulators ratchet up measures to clean an industry fraught with frauds and defaults.
Laocaibao, a peer-to-peer (P2P) lending platform ultimately owned by private conglomerate Zendai Group, is the latest casualty of the troubles that have engulfed the scandal-hit industry over the past three years.
Laocaibao has stopped providing loans and Zendai’s investment and consulting arm, which directed clients to the platform, has fired employees, according to statements from the companies and investigations by Caixin.
To protect the interests of all its stakeholders-investors, borrowers, brokers, and employees, Fincera has announced its intent to sell the Kaiyuan Finance Center, which has an estimated valued of over RMB4.0 billion.
Fincera is the largest Hebei-based company operating in the peer-to-peer lending industry, comprising over 90% of the province’s market with approximately RMB9.0 billion in unpaid principal balance.
Fincera Inc. (“Fincera” or the “Company”) (OTCQB:YUANF), a provider of internet-based financing and ecommerce services for small and medium-sized businesses (“SMBs”) and individuals in China, today announced that businesses operating within the P2P (peer-to-peer) lending industry in Hebei province, including the Company, have received requests by the Hebei provincial government to cease P2P business operations. The Company vehemently disagrees with the request and is taking steps to protect its many stakeholders, including initiating the process of moving its business registration to Beijing where local regulators are supportive of the P2P industry.
Senmiao Technology Limited (AIHS) (“Senmiao”), a provider of automobile transaction and related services and an operator of an online lending marketplace connecting Chinese investors with individual and small-to-medium-sized enterprise borrowers in China, today announced its unaudited financial results for the quarter ended June 30, 2019.
First Quarter of Fiscal 2020 Highlights
Total revenues increased by 3,975% year-over-year to $5,094,440 from $125,026
Gross profit increased by 758% year-over-year to $1,072,128 from $125,026
Loss per share decreased by 50% year-over -year to $0.02 from $0.04
N26 today announced the appointment of Thomas Grosse as Chief Banking Officer. The newly introduced role is yet another step towards realizing N26’s ambition to become the first truly global and fully digital retail bank. As Chief Banking Officer, Thomas will oversee the set-up of regulated N26 banks and bank partnerships within the N26 Group, thus ensuring the highest standards in product, processes and customer experience across all markets.
Thomas will begin his new role at N26 this October, reporting directly to N26’s co-founder and CFO, Maximilian Tayenthal.
Its latest fundraising gave Klarna, which facilitates online installment payments, a $5.5 billion valuation. European fintech companies raised $3.3 billion in venture capital in the first half of 2019, up from $1.9 billion in the same period last year, according to data compiled by CB Insights. In contrast, an index of European Union banks has dropped 39% the past 18 months.
Tech.eu Podcast hosted by Natalie Novick and Andrii Degeler is a show in which we discuss some of the most interesting stories from the European technology scene and interview leading entrepreneurs and investors from across the region.
EstateGuru, a crowdfunding platform based in Estonia, is out with a release predicting it will claim €3-5 billion of the European real estate financing by 2025
EstateGuru adds that approximately 70% of SMEs lack access to credit and this is a major constraint to their growth. The company claims that 12% of all loans are set to be financed by alternative providers, including crowdfunding platforms, by 2025 as it appears to be interested in expanding into other financing verticals.
New research released by Barclays has revealed that over half of the UK’s small and medium enterprises (SMEs) have woken up at night with a new business idea (57 per cent), while the most popular time for an idea to be dreamt up is between 2-3 am (28 per cent).
Analysis revealed that almost half (48 per cent) of SMEs said that they are more creative at night, with over two fifths saying they are more productive outside of 9 – 5 working hours and keep a note pad and pen by their bed so they can jot down ideas. Half attributed this to having extra time to think away from daytime pressures.
In a High Street banking first, Barclays has launched £100,000 unsecured lending for SMEs on its award winning app and online banking platform, with thousands of SMEs set to benefit from access to faster finance.
FinLeap, the fintech start-up platform behind Germany’s SolarisBank, announced on Wednesday the launch of its new business unit, FinLeap Connect. According to FinLeap, the fintech platforms finreach solutions and infinitec solutions will become part of this business unit.
Today, more than $15 Tn in sovereign debt trades at a negative yield. In Germany, for instance, bond investors have moved from charging 75 bps last year to a willingness to pay for the privilege of providing < 0% money for 10 years.
GreenSky shares sank ~37% after a strong earnings report was paired with news that the marketplace was exploring a potential sale or merger.
Celsius Network (work/), the industry-leading cryptocurrency platform, announces updated terms for borrowers aiming to provide millions of users with increased accessibility to low-interest crypto-backed loans. In addition, Celsius has reduced its minimum requirement for loan requests to $1,500. Recently Celsius announced it will expand its lending operations throughout Europe.
The latest updates to Celsius Networks lending service include:
Lowered minimum requirement for loan requests from $3,000 to $1,500
Up to 30% discount for CEL token holders paying loan interest in CEL with yearly rates as low as 3.47%
Borrowers can request a loan in USD or supported stablecoins
Loans are issued the same day
Members can apply through the Celsius mobile app or on the Celsius Network website
Ontology (ONT), a project offering linking and bridging solutions for multiple blockchains, has announced five new partnerships with companies operating in various geographical locations within the decentralised finance (DeFi) arena.
The latest handful of businesses to be attracted to Ontology’s framework of compatibility are Hong Kong registered Babel Finance, USA-focused crypto loan specialists SALT Lending, cryptocurrency services provider LendChain, Hong Kong-based Fountain Financial, and Chinese trading platform HOX.
CBA FY19 underlying net profit for the year to end June falls by 5% to A$8.49bn ($5.75bn). The bank’s overall results do not quite match analyst forecasts. But there is a strong argument that in all the circumstances the results represent a resilient full fiscal.
Release of the CBA FY19 earnings also serve to highlight the bank’s success in upping its digital strategy.
Operating income is 2% lower on margin pressure.
Net interest income is down by 1.2% on lower retail mortgages margins and higher funding costs.
Business lending increases by 4% while retail mortgage growth is also strong delivering 4% volume growth for the year.
Faircent.com, a P2P lending company, has recently raised capital in a funding round. The latest funding, led by Singapore-based Das Capital and Gunosy Capital, also saw participation by existing investors Starharbor Asia Pte Ltd, and M&S Partners Pte Ltd (Sin Growth Partner Pte Ltd).
Overspending is a big problem for many. “They buy things they don’t need with money they don’t have to impress people they don’t like. Not passing a judgement here, but money does buy some kind of happiness for many,” said Rachit Chawla, chief executive officer, Finway, a registered non-banking financial company (NBFC).
Payday loans, digital lending platforms, and P2P lending have evolved, so has the penetration of credit card, personal loans, and the like. At a behavioural level, de-linking debt with shame has also made it easy for people to borrow.
Hexindai Inc. (HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, today announced that its invested Indonesian online lending platform, Musketeer Group Inc. (“Musketeer”), has completed registration for its peer-to-peer (P2P) lending platform with the Indonesian Financial Services Authority (OJK).
Musketeer’s P2P platform, PT Technology Indonesia Sentosa, is among the early batch of lending companies in Indonesia that have registered with OJK.
News Comments Today’s main news: DBRS assigns provisional ratings to SoFi Consumer Loan Program 2019-3 Trust. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2019-3. Funding Circle seeds shareholder input on wind-down plans for investment trust. TransferWise valuation doubles to $3.5B. Today’s main analysis: High income, super prime borrowers take bigger share of […]
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Prosper Marketplace Issuance Trust 2019-3 (PMIT 2019-3). This is a $380.99 million consumer loan ABS transaction.
FinTech issuers saw growth in revenues and loans. Pace of loan growth weakened slightly as originations fell at Enova and grew by less than 10% YoY at OnDeck and OneMain. Stock price performance post earnings was mixed. Enova saw its stock price increase by 18% post earnings while OnDeck’s stock price dropped by 16%.
Over the past 10 years, the amount of outstanding personal loan debt has increased by 75%.
The share of personal loan inquiries from those with incomes over $108,000 increased by 77% between the second quarter of 2017 and the first quarter of 2019, while the share of inquiries from people earning over $84,000 increased by 65%.
The share of personal loan inquiries from super prime borrowers (740 and higher) increased by 47% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime and super prime borrowers (680 and higher) rose by 36%.
The share of personal loans closed by borrowers with incomes over $108,000 on the LendingTree marketplace increased by 38% between the second quarter of 2017 and the first quarter of 2019, and the share of borrowers earning over $84,000 increased by 26%.
The share of closed personal loans from super prime borrowers (740 and higher) increased by 37% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime borrowers (680 and higher) rose by 19%.
Borrowers with incomes up to $24,000 decreased their share of closed loans by 22%, and those with incomes up to $48,000 decreased their share by 17%.
The share of loans closed by borrowers with scores below 560 increased by 28%, but the share of closed loans from borrowers with scores between 560 and 619 dropped by 24%.
The share of inquiries from people with incomes up to $24,000 dropped by 27% during the same period, while inquires from those with incomes up to $48,000 dropped by 16%.
The share of loan inquiries by borrowers with scores below 560 decreased by 12%, and the share of closed loans from borrowers with scores below 620 decreased by 9.2%.
For example, in the SoFi Consumer Loan Program 2017-3 LLC, securities show that the average gross income of borrowers as of May 2017, was $141,780, with an average FICO score of 731, and an average VantageScore of 682. The most recent offering, reported in February 2019, showed borrowers had an average income of $151,144, an average 753 FICO score, and a 713 VantageScore.
Job loss and medical expenses are the leading factors causing Americans’ credit scores to drop, according to new research by Elevate’s Center for the New Middle Class (CNMC).
According to the new report, 55% of respondents cited job loss or reduction in work hours as the reason why their credit score dipped below 700. Nearly a quarter (24%) cited medical bills as the primary cause. Following these leading factors, a variety of typical, seemingly innocuous expenses follow, including repairing a car (11%), leaving home for the first time (6%), and putting a child through college (5%).
Non-prime consumers are 86% more likely to experience multiple factors that negatively affect their credit score compared to just one. For example, of the 23% who mention a medical reason, about three-quarters (75%) also experienced an income drop, severely complicating their ability to manage and cover medical expenses.
American debt is at an all-time high. How did we manage to dig ourselves into a steep $13 trillion hole? Credit card debt alone accounts for $1 trillion of this debt, with the average balance over $6,000 per capita.
33% of Americans are going into debt to pay off debt
Generation X is most likely to incur short-term debt to pay down long-term debt
Women who use debt to make other debt payments tend to do so multiple times
Once every few weeks, Myra Haq withdraws $100 or so from Earnin, an app that lets people borrow small sums of money.
The app lets her withdraw up to $100 a day, and never more than what she actually makes in a pay period, and then withdraws the money from her checking account once her direct deposit hits.
Unsurprisingly, payday lenders typically target low-income people — a 2013 Pew report found that 58 percent of people who use payday loans have trouble meeting monthly expenses at least half the time and usually borrow to deal with “persistent cash shortfalls rather than temporary emergencies.”
The average American household with student debt owes almost $48,000, and experts believe that student loan debt has held millennials back from major life milestones like marriage, homeownership, and having children.
Figure Technologies looks to be profiting from increased interest in the cryptocurrency industry. Specifically, in a press release dated May 9, it was announced that the company had secured a $1 billion line of credit on the Provenance.io blockchain. The agreement also involves two other companies, Jefferies and WSFS Institutional Services, which will provide the line of credit.
Vince joins us on the show to talk about his partnership model and the challenges and opportunities of working alongside banks and credit unions, which have deployed more than $2 billion in lending capital on the digital platform.
At a cramped desk on the 22nd floor of a downtown Manhattan office building, Gary Roth spotted a looming disaster.
An urban planner with two master’s degrees, Mr. Roth had a new job in 2010 analyzing taxi policy for the New York City government. But almost immediately, he noticed something disturbing: The price of a taxi medallion — the permit that lets a driver own a cab — had soared to nearly $700,000 from $200,000. In order to buy medallions, drivers were taking out loans they could not afford.
Prodigy Finance today announces it will be supporting international students pursuing Master of Public Health (MPH) and Master of Science in Public Health (MSPH) degrees, Master of Science in Nursing (MSN) degrees, as well as those enrolling in Advanced Standing Dental programs and Select Certificate Dentistry programs in the U.S.
Cryptocurrency lending startup BlockFi is almost halving the interest rates it offers on ether (ETH) deposits, while some bitcoin (BTC) rates will increase slightly.
From June 1, customers with 25–100 ETH balances in a BlockFi Interest Account (BIA) will see the interest rate drop from the current 6.2 percent annual percentage yield (APY) to 3.25 percent, the startup announced Tuesday. Those holding over 100 ETH balances will earn just 0.2 percent APY.
Some BTC balances, on the other hand, will see a slight interest rate increase – up to 2.15 percent from the current 2 percent – for deposits of over 25 BTC. Those holding 0.5–25 BTC will continue to earn 6.2 percent APY, BlockFi said.
In a Nutshell:LoanStart helps consumers in search of a loan find a lender that suits their funding needs within just five minutes after submitting a simple, fee-free loan request form. Working securely with more than 300 trusted lending partners, including conveniently located storefront providers, the service makes finding a suitable lender easy. In today’s connected world where loan options abound, LoanStart cuts through the clutter to connect consumers in need of funds with lenders willing to provide financing.
The Consumer Financial Protection Bureau (CFPB) said Friday (May 17) that it has filed a lawsuit in federal court against a debt-collection agency that, the agency said, violated the Fair Debt Collection Practices Act.
The lawsuit targets Forster & Garbus, LLP, a debt-collection law firm based in New York.
Start-up Plaid, recently valued at $2.7 billion, already connects bank accounts to fintech apps like Venmo, Robinhood, Coinbase and Acorns. It announced “Plaid Direct” on Wednesday, which lets users more easily connect to newer digital banks like Chime.
PeerStreet, a marketplace for investing in real estate backed loans, has announced the appointment of Deepa Salastekar as the Vice President of Institutional Sales. Ms. Salastekar joins PeerStreet to expand the company’s relationship base of institutional partners across all investment types available through PeerStreet.
Funding Circle Holdings PLC clarified its director pay policy Wednesday following “feedback from shareholder advisory bodies”.
The small and medium enterprise loan platform said the amount granted in each year for a three year period under the company’s long-term incentive plan to can now no longer exceed GBP2.0 million and GBP1.1 million for the company’s chief executive and chief financial officer, respectively.
After a recent indicator scan, we have noted that Span A is currently higher than Span B for shares of Funding Circle Sme Income Fund Limited (FCIF.L). Traders may be paying close attention as this signal may indicate a possible bullish move.
Banning borrowers from accessing high-cost credit websites between 11pm and 7am would ease the numbers of people spiralling into debt as activity peaks during these hours, according to researchers at Newcastle University.
Arbuthnot Latham & Co has officially launched its specialist finance division.
Arbuthnot Specialist Finance will offer short-term residential finance up to 70% of market value (MV), with rates from 0.65% per month.
For this product, it will offer loans between £30,000–£3m-plus.
For commercial properties, it will offer up to 65% of MV, including interest and fees (up to 85% of the 90-day MV, or 95% of the purchase price, whichever is the lower), with rates available from 0.75%.
Lendwise plans to offer borrowers loans of up to £100,000, with interest rates ranging from 7.5% to 12%. Pricing will be based on a range of factors, which the peer-to-peer lender said go beyond the applicant’s financial profile and credit record. They include the specific postgraduate or professional qualification course they are taking, the length of study and the repayment period.
The 61 new open APIs (and more than 200 Endpoints) span many of Finastra’s solutions, including retail and corporate banking (both enterprise and North American community markets), consumer lending and mortgage, payments and treasury and capital markets. These are now available in the FusionFabric.cloud API catalog for developers to harness in building financial services applications. Some of these powerful APIs are already enabling:
Tencent posted record quarterly profits and smashed market expectations in Q1 2019, driven largely by surges in its fintech and cloud revenue, per Reuters.
Fintech and business services is now Tencent’s second largest division, responsible for a quarter of its revenue. This was the first time the tech giant broke out earnings for the unit, which brought in revenue of Rmb21.79bn ($3.2 billion), a 44% year-over-year (YoY) spike. Key in driving this growth is its payments wallet for WeChat, whose 1.11 billion users make it the largest social media platform in China, as well as its insurance services, which include a 20% stake in Aviva Hong Kong, and its cloud computing service.
Tencent’s online advertising grew 25% YoY, compared with 55% YoY in the same period last year, suggesting that China’s slowing economy and continued trade tensions with the US are hitting the firm.
Two Indonesian lending platforms regulated under the country’s financial services authority (OJK) have been penalized by the ethics council of AFPI, the industry association for fintech lenders in Indonesia.
The organization revealed that one of the companies in question is P2P lender Do-It, which charged an interest fee rate of 1% per day.
Nigerian digital financial platform, Carbon (formerly Paylater) is taking big steps to introduce its revamped financial services into Ghana. The online lender is looking to hire a new country manager for Ghana and this suggests the company is looking to introduce its new services like PayVest into Ghana.
News Comments Today’s main news: SoFi launches ETF for gig market. LendingClub’s higher fees lead to earnings win. CrowdStreet hits $500M in real estate investments. Funding Circle offers manual lending in foreign markets. Marcus delays German launch. Today’s main analysis: LendingClub, GreenSky, and OnDeck earnings. Today’s thought-provoking articles: GDP growth continues. The pros and cons […]
SoFi launches gig-focused ETF. There are 56.7 million freelance workers in the U.S. The gig market, already huge, is growing. Forbes reported last year that 35 percent of the workforce was made up of gig workers, and that number is expected to increase to 43 percent by 2020.
Today, the company announced a new exchange-traded fund (ETF) product focused on the gig economy. GIGE, which trades on Nasdaq, is an actively managed fund advised by Toroso Investments that allows investors to capitalize on this hot sector of the economy. Toroso offers a range of services around creating and managing ETFs.
The company also announced the creation of an ETF focused on high-growth stocks. That ETF, which trades as SFYF on the NYSE, is designed to identify and capture the growth of the top 50 of the 1,000 largest publicly traded issues.
Online-loan marketplace LendingClub (LC – Get Report) was rising more than 14% Wednesday to $3.70 after reporting a surprise profit in the first quarter, though the company’s guidance was short of expectations.
LendingClub reported a 22% increase in transaction fees that led to a 15% increase in revenue to $174.4 million and adjusted earnings of 2 cents per share. Wall Street was expecting the company to report revenue of $169.4 million and a loss of 3 cents per share.
The marketplace lending platform reported adjusted net loss of $11.25 million, or 3 cents a share — red ink, but less than the 4 cents per share loss analysts were forecasting.
That stronger-than-expected revenue outcome was driven by stronger-than-expected loan originations during the first quarter, which rose 18 percent year-on-year to $2.73 billion. That increase in originations drove an increase in transaction fees, which were up 22 percent to $135.4 million.
For the second quarter, the company expects net revenue between $185 million and $195 million, with the high end slightly below the average analyst estimate of $196.7 million.
Wedbush believes LendingClub’s improving operating efficiency will help it produce an adjusted EBITDA margin of 20% by the end of 2019. The firm also expects LendingClub to grow revenue by 12%-15% annually in the coming years.
LendingClub rounded out 2018 originating the most loans in the company’s history at $10.9 billion. With their Q1 2019 results, the company is off to a great start in 2019. Originations were $2.7 billion, up 18% year over year. The company reported that application growth was 31% over the same period.
Net revenues came in above high end guidance of $172 million at $174.4 million for the quarter, up 15% year over year. GAAP Consolidated Net Loss was $(19.9) million, compared to $(31.2) million in Q1 2018. Finally, the company delivered adjusted EBITDA of $22.6, up 47% year over year and well above their projections of $13-$18 million. LendingClub is on track to become adjusted net income profitable over the second half of 2019.
GreenSky Q1 2019 Earnings
In Q1 2019 GreenSky increased transaction volume on the platform 20% to $1.2 billion. They also grew revenue 22% to $103.7 million form the prior year period. GAAP Net Income in Q1 2019 was $7.4 million. The company had aggregate commitments of $11.8 billion from nine bank partners of which $4.5 billion remain unused. The company ended the quarter with $268 million in cash.
OnDeck Q1 2019 Earnings
Originations fell for the quarter to $636 million compared to $658 million for the previous quarter. This was attributed to OnDeck tightening their credit box during the quarter. The company shared that their line of credit product reached an all time high of $150 million for the quarter.
Strong GDP Growth Continues (PeerIQ Email), Rated: AAA
Unemployment fell to 3.6% – the lowest level since 1969. The last time unemployment levels were this low, the first humans landed on the moon. The inflation rate was 5.5% The DJIA was 800. The average cost of a new home was $15K, and the average salary was $9K. A gallon of gas cost a scorching thirty-five cents.
On the regulatory front, Senator Durbin introduces a bill to create a 36% APR Cap on Consumer Loans. The 36% cap matches a similar rate for loans offered to service members and is superseded by strict state-level caps, and offers no preemption of the patchwork of state laws for digital models.
CrowdStreet, Inc., a technology provider with an online marketplace for direct equity investment in commercial real estate (CRE), announced that in March it crossed the $500 million threshold in total online investments with a record number of new individual investors.
The news accompanies a record quarter with over $75 million invested.
Corporate America has taken on substantially more debt in the aftermath of the Great Recession. Today, the underlying structure of that leverage looks different. Fewer bonds are being issued. Bank loans to indebted companies now match junk bonds in total issue. This article will review the market for leveraged loans – a marketplace that has grown tenfold in the new millennium and has passed the $1 trillion threshold.
In 2017, nearly 70% of levered loans were refinanced at lower interest rates. That creates a lot of turnover.
BlackRock founded a Palo Alto, California-based group called AI Labs last year, directed by the Stanford professor Stephen Boyd. Now, according to job postings reviewed by Business Insider, the 30-member team is tackling projects ranging from next-generation lending platforms to automating human tasks.
Avant LLC, the online lending phenomenon which had previously been hailed as a “breakout financial success story,” has agreed to settle a lawsuit brought by the Federal Trade Commission (FTC) for $3.85 million. Although the lawsuit largely relied on a different federal statute, it shares much of the consumer financial protection zeal of the excessive overdraft fee lawsuits recently leveled against credit unions, banks and payday lenders. But it also reveals shortcomings in federal consumer protection laws.
Consumers who fall behind on credit payments may find an unexpected lifeline—another loan from their lender. A new TransUnion (TRU) study found that, in some instances, both lenders and consumers can benefit when additional loans are extended to customers during difficult times. The findings were released today during the 2019 TransUnion Financial Services Summit, attended by more than 300 executives from across the globe.
In the study, 31% of delinquent borrowers experienced improvement on one or more of their delinquent debts when securing a new personal loan. In addition, 24% of borrowers also performed well on the new loan.
Affirm is a company that provides payday loans online and at points of sale. To receive an approval decision, a potential Affirm client does not have to wait long — the company’s scoring system processes its questionnaire, profiles in social networks and other documents very fast.
Kabbage also provides loans online using an automated system. However, the clients of this company are not ordinary consumers, but owners of SMEs. When the founders of Kabbage decided to launch a new project in 2009, there was a gap between personal loans for consumers and credit lines allocated to small businesses in the lending system.
the initial idea of the company’s founder Shivani SIROYA to start her own business was that “the existing credit system works very poorly”;
to assess the creditworthiness, Tala uses its own scoring system, which examines a set of data about the potential borrower, using machine learning technology and big data;
the intellectual service works in automatic mode: it investigates, makes a decision, issues loans.
Kabbage, Inc., a cash flow technology and automated lending platform for small businesses, has formed a strategic alliance with New York’s largest contractor association, the Building Trades Employers’ Association (BTEA), to provide access to fast and flexible small business funding for BTEA members through the Kabbage platform. The alliance will support women and minority-owned business enterprise (WMBE) contractors who often have difficulty accessing the funding required to procure contracts for New York’s largest construction projects.
The alliance between BTEA and Kabbage provides BTEA’s 1,300 contractor companies, including more than 100 MWBE contractor members, the opportunity to access lines of credit as high as $250,000 and attain greater financial capacity.
Fig, a mission-driven FinTech company that offers credit building alternatives to predatory loans for low-income borrowers, has become the first-ever FinTech company to become both a Certified B Corporation and federally certified Community Development Institution (CDFI). VilCap Investments and Techstars are early Fig Loans investors.
The Consumer Financial Protection Bureau released a plan Tuesday to restrict how often debt collectors can call borrowers about unpaid credit and to allow consumers to opt out of other types of communications.
The proposal to overhaul the debt collection industry would limit phone-based collection attempts for the same consumer to seven calls per week. Debtors could also opt out of allowing collectors to contact them via voice mail, email and text messages.
$250m worth of outstanding loans gives it an estimated 2/3 share of the total outstanding crypto loan pie
Genesis has seen its total USD value of borrows increase 35% QoQ in 1Q19, vs. lending protocols which saw a ~20% decline; Genesis total borrow volumes were almost an order of magnitude greater than all of borrows on lending protocols in 1Q19
Ocrolus today announced a partnership with inFactor, the financing platform that brings clarity and security to small business financing. This partnership combines two powerful technology solutions to drive end-to-end underwriting automation for Merchant Cash Advance (MCA) lenders
Esme Loans, the NatWest backed standalone digital lending platform for SMEs, announced last week it has hit £50 million of lending to UK businesses. The online lender reported that it has seen a continued period of strong growth, following an uplift in lending of 337% between 2017 and 2018.
In the 2016/17 tax year just 5,000 customers opened IFISAs with a total £36m subscriptions (these figures were disputed by some platforms as being too low). In the following 2017/18 tax year this shot up 31,000 investors backing the IFISA with £290m subscribed in the tax year and a total of £366m in outstanding balances in IFISAs at 5 April 2018.
PROVISION FUNDS are designed to cover peer-to-peer investors in the event that a borrower defaults on their loan, but the way they are funded and operated varies widely across platforms. So what should investors be looking for and is there an optimal structure to reduce their chances of losses?
One key difference is whether pay-outs from reserve or provision funds are automatic or discretionary.
RateSetter is credited with the invention of the provision fund concept, which has been part of its business model since it launched in 2010. It is funded by borrowers’ repayments and money is automatically reimbursed to investors if loans go into arrears.
OakNorth – the bank for entrepreneurs, by entrepreneurs – has today announced it is entering the retail mortgage market with lifetime tracker rate products, aimed at affluent individuals with atypical sources of income.
The six largest banks in the UK dominate 77 percent of the mortgage market, but often find it commercially unviable to create bespoke mortgages for these individuals as they lack the appropriate cost base and expertise to cater to them. These individuals therefore require more bespoke lending solutions, and as a lender that has provided over £3bn in bespoke loans to UK entrepreneurs since its launch, OakNorth has the necessary expertise and tailored credit analysis models to cater to this unique market niche.
Jiayin Group (JFIN) has filed to raise $40 million in an IPO of ADSs representing underlying Class A shares, per an amended registration statement.
According to a 2017 Oliver Wyman report on Chinese FinTech firms, outstanding loan balances for online peer-to-peer lending platforms have exploded in recent years, from RMB 31 billion ($467 million) in January 2014 to RMB 856 billion ($129 billion) by January 2017.
Chinese peer-to-peer (P2P) lender Dianrong, once hailed as the “LendingClub of China,” appears to be in crisis following an announcement that it is closing around two-thirds of its offline branches and laying off as many as 2,000 employees. At around the same time, it was accused of falling behind on wages and severance payment. In mid-April, the company reportedly sought $100 million in investment to meet new capital requirements.
Doconomy is launching two versions of the card later this year. One just tracks your carbon footprint as you spend, and the other, called Do Black, takes the additional step of setting a hard limit on your footprint for the year. Initially, the data used to calculate the impact of each purchase will be imprecise—the system pulls the category code of a merchant that classifies it as a particular kind of store, then makes a calculation based on the general carbon footprint of the industry, whether you’re buying something from a fast-food joint, a clothing store, or an airline. The limit is based on a country-specific calculation of how much carbon each citizen can emit to stay on track with the 2030 goal to cut emissions in half.
Put simply, a real estate token is a virtual asset used to represent ownership of land, apartments, homes, and various other real properties. The intent is to eliminate antiquated and outdated methods of dealing with real estate. Instead, buyers and sellers complete transactions with digital tokens.
Currently, it can be a challenge to find the right place to invest in real estate tokens; however, there are a few platforms that can get you started.
The Harbor platform provides users with a way to trade real estate on a blockchain network. Assets available on Harbor include private REITs, real estate funds, building ownership, and land. Using blockchain technology means Harbor provides transparency, efficiency, fractional ownership, and, of course, liquidity.
Additionally, Slice gives users the ability to hold, trade, or liquidate their tokens with its built-in security exchange platforms. The platform is available to anyone who has $10,000 he or she is willing to invest.
Meridio is a platform that gives its users the ability to invest in shares of real estate on the blockchain. Through Meridio, properties are split into digital shares, which gives investors and owners a way to interact with one another seamlessly.
Cryptoasset exchange Bitfinex has confirmed that it is planning to raise $1 billion through an initial exchange offering (IEO).
Dong has also been accepting pre-orders for Bitfinex’s upcoming token sale through his crypto-lending application Renrenbit. The well-known investor had reportedly taken pre-orders from users who wanted to participate in the public phase of Bitfinex’s upcoming $1 billion token sale, even before IFinex published an official whitepaper for it.
Bitcoin.com has announced a partnership with Cred in which Bitcoin.com users will earn interests of up to 10% on their crypto holdings. Cred is a crypto borrowing and lending company whereas Bitcoin.com is an information portal that has over 4 million Bitcoin wallets.
Fvndit, Inc. (“Fvndit”), a California- and Vietnam-based fintech company, today announced the launch of a $10M digital security offering. Proceeds from the raise will be used to further propel Fvndit’s business objectives as the market leading SME-focused crowd-based funding platform in Vietnam.
Its wholly-owned subsidiary, eLoan, JSC (“eLoan”), operates an online Peer-to-Peer (P2P) funding and investing marketplace in Vietnam, its current local market. Today, SMEs account for more than 41% of Vietnam’s GDP (of $241B USD) and 97% of all enterprises but still remain largely neglected by traditional banks with 70% of them do not have access or have difficulty in accessing credit. eLoan was launched in late 2017 with a clear mission – to make credit more simple and investing more rewarding.
Creci, an early stage start-up, with headquarters in Hollywood, Florida and offices in Medellin and Bogota, was selected on April 30, 2019, as the category winner for Peer-to-Peer Lending, Alternative Funding, and SME Lending at the Innovate Finance Global Summit in London.
YOZO is redefining lending for small business by offering a transparent and seamless experience for their borrowing needs. Firstly, by taking the guessing game out of an increasingly frustrating question, “how much can my business borrow?”. YOZO helps small business gauge their borrowing capacity in under a minute. Secondly, by providing an intuitive online experience to apply and receive funds in 48 hours for approved customers.
Fintech continues to be among the biggest topics driving startups and investment in Southeast Asia. The region’s “internet economy” is forecast to grow massively as its 600 million people increasingly come online — already Southeast Asia has more internet users (350 million) than the U.S. has people, but developing a robust payment landscape underpins those heady growth forecasts.
Brankas, an Indonesia-based startup that operates regionally, is one such young company — it operates a platform that gives banks and financial companies the tech to roll out digital products and embrace online services.
Following a successful Series B funding round, SME lending platform Validus Capital is launching in Indonesia. SME lending platform Validus Capital has launched in Indonesia, its first Southeast Asian market outside its home country of Singapore, the firm announced in a media release on Thursday.
Brazilian fintech firm Nubank will open an office in Mexico on Tuesday, an initial step in a potential expansion into other Latin American countries, a company executive said.
Nubank, a six-year-old startup that has raised $400 million from investors such as China’s Tencent Holdings Ltd, Sequoia Capital, Tiger Global Management and Kaszek Ventures, will start Mexican operations with 20 employees, Nubank executive and co-founder Cristina Junqueira said in an interview.
News Comments Today’s main news: FTC makes final decision on SoFi. OnDeck extends two revolving credit facilities. LendingPoint sees drop in debt management loans, increase for new purchases. LendInvest to float 500M GBP. Lufax hits $39.4B valuation. Klarna adds GooglePay as payment option. Today’s main analysis: Unemployment rate and GreenSky’s earnings. Today’s thought-provoking articles: Earnest vs. SoFi for student loan […]
OnDeck, a small business online lending platform, announced on Wednesday extensions to its existing credit facilities with Credit Suisse and Deutsche Bank on improved terms. According to OnDeck, the amended facilities provide an aggregate of $360 million of committed funding capacity and are available to finance OnDeck’s term loans and revolving lines of credit. The scheduled maturity dates for the facilities were extended three years to March 2022.
Earnest and SoFi are two of the best student loan refinancing companiesout there. They both offer fixed as well as variable rate loans, a 0.25% autopay rate discount, and certain unemployment protections to help in the event of involuntary job loss, but they also have their differences.
Here’s a side-by-side comparison of both lenders to help you make an informed decision.
It turns out that, over the past two years, the proportion of our borrowers who say they are earmarking their loans for debt consolidation has decreased markedly, from about 60% in 2017 to about 54% in 2018. The percent using loans to pay for new merchandise or services has grown during those two years. Home improvement jumped from 6% to 8%; loans for medical expenses rose from 2% to 7%.
In 2017, the percent of millennial consolidators was about 61%. In 2018, that dropped a full 10%, down to 51%, a bigger decrease than any other age cohort.
A new affinity banking service developed by Green Dot proposes to tap one of the most potent — and controversial — sources of distribution in the digital economy: social media influencers.
The digital banking and payments provider is developing what it calls Bank OS, a simpler version of its enterprise banking-as-a-service platform already used by the likes of Intuit, Stash, Uber and Walmart. It would enable partners to develop their own financial products just as those brands do, including offering credit cards, debit cards with loyalty programs or even a mobile app.
But while small businesses still struggle with cash flow, how they shop for loans and their level of financial education about their options are changing. On Tearsheet’s recent webinar with leaders at Kabbage, BlueVine, and Intuit’s QuickBooks Capital, we discussed the changing nature of the SMB borrower and how their firms have evolved to keep up.
Everyone knows the Golden Rule of business is to pay yourself first. But more than half of small business owners are going months without pay – if they are taking any at all.
About a quarter of these entrepreneurs go two to six months without pay, and another quarter have gone more than six months without salary, according to a recent survey from Kabbage (), a cash flow optimization platform.
The PayNet Small Business Lending Index (SBLI) rebounded with a 17.2 point jump to 150.7 in January, climbing to its second-highest level ever. On an annual basis, the SBLI increased 4.9%. The SBLI 3-month moving average also rose in January and currently stands 1.5% above its year-ago level.
The PayNet Small Business Delinquency Index (SBDI) 31–90 Days Past Due edged up one basis point to 1.45% in January, and is up six basis points on an annual basis — its 33rd consecutive year-over-year increase. The SBDI 91–180 Days Past Due was unchanged at 0.38% but is three basis points above its year-ago level.
Salt Financial, which currently offers one ETF, has filed plans with regulators to launch a low volatility that would pay investors, but there’s a catch.
“During the first year, holders will receive 50 cents for every $1,000 in a new low-volatility stock ETF — until it grows to $100 million when the cash-back benefit will be capped and shared with all investors,” reports Bloomberg. “The rebate is until at least April 2020, when a $2.90 management fee could kick in.”
Equifax Inc. failed to preserve key internal discussions over its massive 2017 data breach, U.S. senators said Thursday at a hearing where elected officials grilled the credit reporting giant’s CEO and the…
Despite record-high levels,new home equity line of credit (HELOC) originations have been steadily declining as a perfect storm of rising interest rates, new tax laws and growing competition from alternative lenders has crimped traditional HELOC growth. According to the J.D. Power 2019 U.S. Home Equity Line of Credit Satisfaction Study,released today, HELOC customers are more likely than ever to shop for alternative sources of funding and HELOC providers are falling short on digital offerings.
New York-based DDG, Chicago-based Marc Realty and Ruttenberg Gordon announced plans for a 13-story hotelwith 250 rooms in Fulton Market. The developers are raising $55 million to fund the project through Prodigy Network, a New York-based real estate crowdfunding platform. The hotel will be located at 1234 West Randolph Street and will be operated by New York-based Standard Hotels. It’s set to be completed within two years.
PeerStreet has announced the hiring of two executives with extensive experience in the financial services and real estate sectors: Ellen Coleman and Bob Brown. Ms. Coleman joins as Executive Vice President of Finance, and Mr. Brown joins as Executive Vice President of Finance & Corporate Development.
CoreLogic, a global property information, analytics and data-enabled solutions provider, today released an enhanced Verification of Employment and Income(VOE/I) product. The comprehensive new VOE/I product takes time, touch and cost out of traditional employment and income verification through a three-step ‘waterfall workflow’ process, ensuring that every mortgage applicant can be verified.
The enhanced VOE/I product features a three-step ‘waterfall workflow’ that ensures each borrower’s employment and income is verified as efficiently as possible.
Step One: Instant verification via a direct integration to The Work Number (TWN)
Step Two: Automated verification leveraging dozens of third-party data sources
Step Three: Manual verification by a team of dedicated CoreLogic verification experts
CoreLogic today announced the integration of its CondoSafe product with the Ellie Mae Encompass® all-in-one mortgage management solution. CondoSafeis a one-stop condo project review tool that enables lenders to have a single, consistent, standardized review process, allowing them to determine eligibility earlier in the process, resulting in quicker approvals.
ArborCrowd, the first crowdfunding platform launched by a real estate institution, today announced a new offering that allows investors to acquire equity interests in the Sioux Falls Multifamily Portfolio, a collection of class-B apartment communities located in Sioux Falls, S.D. The properties exhibit strong upside potential due to Sioux Falls’ sound multifamily real estate fundamentals and notable lack of professionally managed workforce housing product.
The investment has a targeted internal rate of return (IRR) of 12 to 14 percent over a three- to five-year hold period. Tzadik has budgeted $5.2 million to perform a comprehensive capital improvement plan that will include upgrades to all renovated units, common areas and public spaces.
LendPro’s Female Leaders Celebrated on International Women’s Day (LendPro Email), Rated: B
As the financial technology (fintech) industry continues to grow, innovators are increasingly looking for leadership and expertise to grow their companies and stand out from competitors. LendPro, a Lending-As-A-Service (LaaS) fintech company, prides itself in hiring strong talent. Women make up 50% of staffing at LendPro’s Charlottesville corporate office, versus 37% female staffing at most fintech companies.
The online property finance hub Lendinvest is plotting a £500m stock market flotation that will provide a fresh test of investors’ faith in a fast-growing but volatile area of the non-bank lending market.
Sky News has learnt that Lendinvest, which was set up in 2008 and has so far lent roughly £2bn to help buy, build or renovate British homes, has appointed Lazard, the investment bank, to advise on its strategic options.
Eight out of ten SME loan applications were approved by banks in the third quarter of 2018, according to the latest figures from trade association UK Finance. While this is a far cry from the days of the global financial crisis, when SME lending all but dried up in part due to regulatory pressures to shore up capital, smaller companies are still citing challenges in securing funding from traditional players, according to Stuart Chalmers, commercial banking lead for Accenture UK.
Alternative lenders understand the hunger for a seamless customer experience and have built credit journeys that align to business expectations
Almost 30,000 companies used non-traditional channels over the year, with peer-to-peer lending and equity-based crowdfunding now established investment vehicles for seed, startup, early-stage and fast-growth companies seeking capital. In fact, CCAF estimates that 29 per cent of all new loans issued in 2017 to small businesses with annual turnovers less than £2 million came from alternative finance.
In a letter to chief executives (4 page / 352KB PDF) sent last week, the FCA said a recent supervisory review of firms’ current arrangements against current requirements “strongly suggests” some P2P firms were falling short of the standards required by its rules.
It has been recently revealed that the number of compensation claims made against the failed payday lender Wonga, which filed for administration in August 2018, has ended up increasing four-fold. The initial figure given by the Financial Ombudsman Service in a Treasury Committee in January this year suggested that there were around 10,500 customers who had open complaints with the short-term credit, high-interest company.
Now, it turns out that the number of redress claims that have been made against Wonga is considerably higher, totalling over 40,000. It is potentially the case that these people will not end up getting their money back after having been mis-sold loans.
According to the most recent HMRC statistics, overall ISA savings fell from £79.8bn in 2015/16 to £61.5bn in 2016/17. Meanwhile, Bank of England statistics found that the amount of money that Brits were saving (both within and outside of the ISA wrapper) fell by £7bn in 2018 alone.
Crowdfunding and peer to peer lending grew out of the banking crisis of 2008. According to the European Central Bank, the availability of bank loans to SMEs declined 23 percent immediately following the crash, causing a devastating impact on the economy.
Over 100 Finastra customers were upgraded to the latest compliant versions of its transaction banking software, Fusion Trade Innovation, ahead of the new SWIFT standards deadline of 17 November 2018. The new ‘Standards MT Release’ included significant changes to category 7 messaging standards used in trade finance – the most significant set of changes to the SWIFT trade finance messaging interface in over 30 years.
Chinese peer-to-peer (P2P) lender Lufax is not in a hurry to list on the stock markets, said an executive of its biggest shareholder, Ping An Insurance, during its earnings call, Chinese media reported (in Chinese) on Wednesday.
Ping An Insurance Group deputy CEO Jessica Tan said after Lufax’s latest round of funding, Ping An still holds approximately 41% of its shares.
Today, Klarna, the global payments provider “smoothing” out kinks in the checkout process for retailers, announced a partnership with GooglePay. Available for Klarna customers in Sweden, the intention is to make mobile payments “even easier and more secure.”
CreditEase, a Beijing-based leading FinTech conglomerate in China, announced today that its direct investment arm, CreditEase FinTech Investment Fund (CEFIF), participated in wefox Group’s $125million USD Series B, a fast-growing Berlin-based insurtech firm together with Mubadala’s newly created European Ventures Fund. The investment is the largest Series B round for a European insurtech and Goldman Sachs International is acting as the private placement adviser to wefox Group in connection with the transaction.
The investment will help spearhead the company’s expansion into the European broker market. It also paves the way for wefox Group to accelerate growth and create the world’s most innovative product and engineering team applying advanced data analytics to create an all-in-one insurance platform in which all interactions are personalized. The company, which was founded in 2014, has grown its revenue to around $40million USD, while serving more than 1500 brokers and over 400,000 customers, making it Europe’s number one insurtech platform.
Luna Connect is a new digital lending platform primarily aimed at those lending to SMEs. It is designed to fit into the rapidly evolving financial services ecosystem and its founder, Brian D’Arcy, drew the inspiration for his business from the disruption currently underway in the financial services sector.
The company’s target market are lenders offering loans of under €200,000, whose borrowers typically require a fast decision on their application and want a more transparent lending process. The initial focus will be on Ireland and the UK with Europe and the US to follow. Investment in the project to date has been around €120,000 which was self-funded with support from the NDRC and Enterprise Ireland through the competitive start fund.
The new U.S. ambassador to Australia said Wednesday that he’s concerned about the way China lends money to developing Pacific nations in what he describes as “payday loan diplomacy.”
China categorically rejects accusations that it uses loans, grants and other financial inducements to extend its diplomatic and political reach, saying it is merely acting in the best interests of both sides in such transactions.
As distrust of the nation’s big banks and mortgage brokers swells amongst the wreckage of the banking royal commission, online lenders are emerging as real challengers in the home loan, business loan and personal lending markets.
The CEO of National Australia Bank subsidiary UBank, Lee Hatton, says future retail depositors will want more control over where banks lend their money, prompting it to launch a “green” term deposit targeting environmentally concerned Millennial customers.
However, it’s also true that today’s investors face a risk environment of unprecedented complexity. In 2018, the S&P/ASX200 declined by 6.8%. Residential property values are falling and bank deposit rates fail to match inflation. In the last year, the Australian media landscape was dominated by the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, with its revelations of duplicitous lending practices, improper fees, and general misconduct that, by the banks’ own admission, fell far short of community expectations.
MSMEs play a major role in Economic development of India. There are around 63.4 million units and they contribute to 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities and 33.4% of India’s manufacturing output. They have been able to provide employment to around 120 million persons and contribute around 45% of the overall exports from India. The sector grows at a rate faster than the large ones at more than 10% pa.
About 20% of the MSMEs are based out of rural areas.They provide employment to more than 130 million people and contribute to 45% of exports. MSMEs are also the largest employment generator every year. As of Sep18, the total credit in India was Rs 105.5 Lakh crores and MSMEs had borrowed Rs 24.7 cr. Large and Mid Caps borrowed Rs 44.4 cr. Year on Year the growth of overall commercial credit was at 13.5%.
Micro loans which are less than Rs1 cr grew 22.2% year on year and SME loans between Rs1 cr – Rs 2.5 cr grew at 18.3%.The growth was faster than the overall growth. Share of NBFCs in SME credit increased from 13% in Sep 15 to 17% in Sep 18. The number of NBFCs lending more than Rs 100 cr to MSMEs stood at 77 at the end of Sep 18.
The Investment Alert Task Force has suspended the operation of 168 entities allegedly running peer-to-peer lending services without a legal business license from the Financial Service Authority (OJK).
The task force has also suspended the operation of 47 illegal investment entities which has the potential to harm the public.
“Based on the monitoring on website and application in Google Playstore, the Investment Alert Task Force has stopped the operation of 168 entities that have violated OJK regulation no. 77/POJK.01/2016 on fintech peer-to-peer lending services, which has the potential to harm the public,” head of the task force Tongam L Tobing said in a statement here on Wednesday.
A group of financial technology (fintech) lenders wants to help develop a healthier lending industry and protect consumers by setting out a strict code of conduct for its members.The Indonesian Fintech Lenders Association (AFPI) will help stimulate the industry, which only gained government recognition three years ago, by providing risk management certification, public education campaigns and a compulsory code of conduct, which should be uploaded to the AFPI website soon.AFPI chairman Adrian Gunadi said the association had been established to ease the Indonesian Fintech Association’s (AFTECH) workload in dealing with fintech companies that provide lending services, including peer-to-peer (P2P) lending, crowdsourcing and digital credit cards.Such lenders account for 30 percent of all licensed fintech companies, whereas the remaining 70 percent are companies engaged in, among other thing…
During a recent meeting with relevant ministries and agencies to discuss P2P lending, Hue instructed that during the pilot operation, P2P lending would be restricted to connecting lenders and borrowers as currently being run by most P2P lending companies in Viet Nam. P2P lending companies would not be allowed to mobilise capital, but act as intermediaries to connect lenders (investors) and borrowers.
The development of P2P lending will also create a new capital supply channel. Research conducted by Transparency Market Research showed that P2P lending would surge by 48.2 per cent annually in the 2016-24 period, while Morgan Stanley forecast the business model would reach a growth rate of 53.5 per cent globally by 2020.
News Comments Today’s main news: Kabbage expands into India. GreenSky launches loan product for elective health care. Lending Works hits 150M GBP in loans in five years. Ant Financial’s money market fund shrinks to two-year low. Ant Financial raised close to combined raise of all U.S., Europe fintechs last year. Varo Money raises annual percentage yield on savings accounts to […]
Review of SoFi Money. I, too, signed up for a SoFi Money account, though I haven’t funded it yet even though I’ve been taken off the waiting list. This is an excellent review, and I agree with the conclusion that digital banking is at the earliest stages of mass adoption. There have been several challenger banks in Europe. The U.S. has been reluctant to adopt digital banking alternatives, but SoFi Money is likely one of the contenders to change that.
Kabbage expands into India. Kabbage is the first U.S.-based lender to enter India. This is significant, and given Kabbage’s reputation in the U.S., this move positions the company to do great things in India.
The Atlanta fintech on Tuesday announced the launch of a revolving credit line of up to $25,000. GreenSky previously offered only installment loans; the new product is designed to be a better fit for elective medical providers that rely heavily on repeat business.
There are three main benefits that SoFi touts with the SoFi Money account:
Pay zero account fees.
Earn more interest.
Free ATMs everywhere.
SoFi will pay (as of this writing) 2.25% on balances held in a SoFi Money account. Note about the small print: you will only earn this 2.25% for the first three months and then the interest rate drops to a (still respectable) 1.25% unless you do one of two things. Either setup a salary direct deposit of $3,000 or more a month or do $500 in debit card transactions each month. I am in the process of moving my salary deposit to my SoFi Money account.
The cash balance in SoFi Money Accounts is swept to one or more program banks where it earns a variable rate of interest and is eligible for FDIC insurance. FDIC Insurance is not provided until the funds arrive at partner bank. There are currently six banks available to accept these deposits, making customers eligible for up to $1,500,000 of FDIC insurance (six banks, $250,000 per bank).
Credit card master trust data shows that delinquencies have picked up from their lows but remain significantly below their peaks. Issuers (with the exception of Capital One), have increased loan loss reserves at a rate higher than loan growth as credit renormalization continues.
30 and 90-day delinquency rates from credit card master trust data
In the years after the financial crisis, small businesses that needed credit were stuck. New capital rules discouraged big banks from touching any borrower perceived as risky. The bond and loan markets, where larger businesses flocked for inexpensive debt capital, have little use for sums under $100,000 — which is what most small enterprises need.
A handful of non-bank lenders, payment and e-commerce companies have leapt into the gap. In an environment of easy money and economic expansion, small business lending operations at OnDeck, Kabbage, PayPal, Square and others have grown fast.
Managing existing debt is far and away the most popular reason for a personal loan, representing 61 percent of all loan requests in 2018. Thirty-nine percent of borrowers plan to use their loans to consolidate debt, and 22 percent plan to use it to refinance credit cards.
Consumers seeking personal loans to manage debt also requested the highest origination amounts: $14,107average amount for credit card refinance, and $12,670 for debt consolidation.
Almost 15 percent of loans reasons are categorized as “other” — the third most popular choice. Home renovation and improvement loans are the next-most popular loan purpose, accounting for 7.7 percent of loan requests with an average loan amount of $12,384.
New Englanders are the most likely to use their loans to manage existing debt, taking the top five spots. The residents of Mississippi, Louisiana, and Arkansas are the least likely.
Washington, D.C. is home to the highest rates of a few offbeat loan purposes, with more residents requesting loans here for a move (7.4 percent) or business (2.6 percent). It’s also tied with New York and Louisiana as the place where wedding loans are most requested, with 1.5 percent of loans in these states intended to cover the costs of tying the knot.
West Virginia is the top state for borrowers requesting loans for their home, specifically home improvements (8.6 percent of loans requested in this state) or home buying (4.9 percent).
In Wyoming, residents request personal loans for medical expenses more than anywhere else (6.5 percent). In fact, most of the states where people are more likely to request a loan for medical costs are low-density states with more rural areas.
Cities with shorter housing tenure have greater price appreciation. The top 10 cities had an average tenure of 7.46 years and an average three-year home price appreciation of 12%. The bottom 10, with an average tenure of 6.63 years, have average price appreciation 30%. This suggests that higher housing turnover drives prices upwards, while faster price appreciation could be enticing home owners to sell.
The northeast dominates the list of cities with the longest tenure. The top three cities, Pittsburgh, New York and Buffalo are all in the northeast. An additional three northeastern cities are in the top 10 for a total of six.
Hot and sunny places have the shortest tenures. The three cities with the shortest tenures — Las Vegas, Phoenix and Austin — are all in warm-weather areas. This reflects high migration rates to those cities, something we looked at in a prior study on where Americans are moving. Denver is the only city in the bottom 10 that experiences a significant winter season.
dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01’s board.
Atlanta-based Kabbage Inc. has hired the chief marketing officer at LegalZoom as its new chief revenue officer.
Laura Goldberg‘s appointment is effective immediately, according to a Kabbage spokeswoman. She succeeds Victoria Treyger, who vacated the CRO position at Kabbage in August 2018 to accept a position with Felicis Ventures.
In a move to make high-yield savings available to more Americans, no-fee mobile banking company Varo Money, Inc., announced today that it raised the Annual Percentage Yield (“APY”) on its FDIC-insured Varo Savings Account to 2.80% for customers whose Savings Account balance is $50,000 or less, and who have qualifying direct deposits and debit card purchases from their Varo Bank Account.1 An APY of 2.12%1 will apply if these conditions are not met.
Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that its largest consumer product, RISE, will offer college scholarships in an effort to promote financial literacy.
The RISE scholarship will offer five $5,000 awards each year to students who demonstrate a desire to improve their financial knowledge and educate others on personal finance. To be eligible for the scholarship, students must complete an online financial literacy course that was developed in partnership with digital education expert EVERFI.
As more banks take the often risky step of expanding outside their traditional markets, especially through digital means, some fintechs sense an opportunity to offer them data they need to find new customers and assess risk.
LendingClub, OnDeck Capital and Lending Tree are each online lending platforms that have bet on this trend. CrediFi, a finance data provider, aims to do the same with a focus on one of the largest asset classes around: commercial real estate.
San Francisco-based digital banking service Oxygen has raised $2.3 million in funding to breathe life into its gig economy plans.
In this round it got funding from Digital Horizon Capital; Cynthia Chen, investor, advisor, executive and board member for several US-based fintechs and now co-founder and chief risk officer at Figure; ZMT Capital (China); Locus Ventures; Endure Capital; PioneerFund; Magic City; Light Bridge; Strawberry Creek; Base Ventures; The House Fund and Sam Yam, co-founder of Patreon.
Better Mortgage, one of the leading digital mortgage lenders in the U.S., today announced its closing of $70 million in Series C financing from American Express Ventures and the Healthcare of Ontario Pension Plan (HOOPP), in addition to existing investors Kleiner Perkins, Goldman Sachs, and Pine Brook. The new capital will support continued growth and investment in Better’s technology platform.
On January 25, 2019, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an online lender that extends unsecured payday and installment loans, as well as lines of credit, resolving allegations that the lender had engaged in unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536.
Betterment, a digital wealth manager popular among millennials, has picked Philadelphia for the first office outside its New York home base.
The company, which manages $15 billion in assets, plans to open a Philadelphia office as soon as February, according to founder Jon Stein. Betterment is looking for office space in Center City, with the intent of adding 20 employees in its computer and engineering departments by the end of 2019.
Numerated announces that it will integrate PayNet’s MasterScore v2 within its real-time lending and growth platform. PayNet, a leading commercial lending data and analytics firm, will integrate its proprietary database within Numerated’s customizable rules- and segment-based credit decisioning engine to offer banks additional business scoring criteria for managing risk when lending to businesses in real-time.
Planet Home Lending, LLC opened 26 active distributed retail branches and brought on 165 mortgage loan originators in 2018. Planet Home Lending also enjoyed additional growth in 2018 in its other channels.
Guaranteed Rate is building a winning team to reinvent the mortgage experience through innovation, technology and a relentless focus on providing industry-leading mortgage products and superlative customer service. The Senior Counsel will embrace and support these efforts by working to pursue claims and resolve disputes as appropriate through negotiation, arbitration or litigation, with a particular focus on employment claims and matters.
UNSECURED consumer lending has slowed to its lowest level since 2014, as Brits scale back their spending amid Brexit uncertainty.
The latest Bank of England Money and Credit statistics also found that the total number of mortgage approvals fell from 126,794 to 124,829 in December 2018, indicating an overall lag in the lending market.
Meanwhile, mortgage approvals for house purchase were around 63,800 in December – just slightly less than the 2018 average of 65,200.
Online borrowing should be all about convenience, and Loanski loans have made this aspect their rising pillar for excellence. The only requirement for one to apply for a loan through the platform is they must be United Kingdom residents and have an active bank account. These minimum requirements essentially mean that anyone who uses their bank accounts frequently can have the pleasures of having an instant loan when they need it the most.
The world’s largest money-market mutual fund, Ant Financial’s Tianhong Yu’E Bao, was at its smallest for two years by the end of last year as Chinese regulators pressured it to downsize over concerns about systemic risk.
The shrinkage is a sign that Ant, the financial services business of Alibaba Group, is shifting away from marketing its own financial products to serving as a platform for other groups to access its huge customer base.
Chinese police investigated more than 10,000 cases of illegal fundraising last year, a 22 per cent rise in the caseload, according to China’s top prosecutors.
The total amount involved also rose, more than doubling to about 300 billion yuan (US$44.5 billion), the Supreme People’s Procuratorate said on Wednesday.
Apart from traditional hotbeds such as product marketing, real estate investment, and education, there has been a big rise in fundraising schemes in online lending, wealth management, private equity, cryptocurrency, and elderly care services.
Europe’s fintech companies are getting serious about the possibility of a no-deal Brexit.
As uncertainty looms over the U.K.’s split from the EU, the industry gathered this week at the Paris Fintech Forum. Payments providers, cryptocurrency exchanges and digital banks all said they were taking steps to prepare for the worst-case scenario.
N26 is a Berlin-based digital bank that was recently named one of Europe’s largest fintech start-ups.
Synsam Group has over 50 years of experience in improving people’s eye health and is today Sweden’s largest optician chain with over 190 stores in Sweden, and 500 stores throughout the Nordic region. One of the company’s most popular services is Synsam Lifestyle Contact Lens Subscription, which includes home deliveries and annual contact lens examinations. To create a better and smoother customer experience, Synsam Group and Klarna have developed a new concept that allows customers to subscribe to contact lenses by using their mobile phones instore, while they can manage all the administration around the subscription online.
When it comes to financial technology companies, Ant Financial is in it own league. The affiliate of e-commerce giant Alibaba raised $14 billion in venture capital last year, not far from the $15.9 billion for all fintech investments in the EU and US in the same period. A key question is whether the growth of the world’s most valuable fintech firm is an anomaly or a sign of things to come from China.
Ant Financial accounted for 35% of global venture capital investment in fintech firms last year, according to CB Insights.
Cross River Bank (“Cross River”), a leading innovator and provider of banking services for financial technology companies, and Railsbank Technology Limited (“Railsbank”), a leading UK-based open banking and RegTech technology services platform, today announced that they have entered into a partnership arrangement that will provide Railsbank the opportunity to offer a variety of API-powered, banking and payment processing services across the U.S.
In the last three months of the year, five companies joined the coveted ranks of fintech “unicorns”, or companies valued at more than $1 billion. These include credit card provider Brex, digital bank Monzo and data aggregator Plaid.
The South Australia Home Battery Scheme, launched by the state government, offers a maximum of AU$6,000 assistance per household for the purchase of battery energy storage. Home storage systems are typically, but not always, paired with solar PV, and homeowners can get back between AU$500 and AU$600 per kilowatt hour of battery storage capacity purchased.
As of the end of the last financial year, we have a register user base of more than 107 Mn users and a network of over 3 Mn merchants. We are aiming at 400% growth this fiscal. We are aiming at 400% growth this fiscal. We are adding over 3 Mn new users every month, one of the highest in the industry. We will have close to 200 million users by the end of 2019.
A) Lending is growing by leaps and bounds ever since we started out. The opportunity is huge with less than 10% of Indians having access to credit.
Gurgaon-based StreamSource Technologies, a decentralized marketplace for loans, has raised $1 million in seed funding from Accel India, making it Accel’s first local investment in the blockchain sector.
A group of 11 Indian banks have teamed together to unveil the nation’s first blockchain-linked funding for SMEs.
According to the Economic Times, the participants include ICICI, Axis, HDFC, Kotak Mahindra, Yes Bank, Standard Chartered, RBL, South Indian Bank, IndusInd Bank, State Bank of India and Bank of Baroda.
“Borrowers on our platform are given a score out of 100, which determines their risk profile. A score of 52 to 60 points is high risk while a borrower with more than 60 points will get a lower interest rate,” says Bhavin Patel, Founder & CEO, LenDenClub.
P2P lending or peer-to-peer lending is a mode of direct debt financing that enables individuals to borrow and lend money on mutual terms. Platforms like IndiaMoneyMart (IMM) eliminate the traditional financial institutions and enable businesses to flourish through a people to people contact.
“While a great boost to the P2P industry would be via the regulator easing lending caps, we look forward to a critical role from the finance ministry for better financial inclusion by extending SOPs to retail investors,” says Dhiren Makhija, CEO, Cashkumar.
Digital marketing strategist Abhinav Kumar who shot to fame because of his appearance on television commercials of travel search engine Trivago has joined peer to peer lending platform Paisadukan as a digital marketing and branding advisor and also will be on the company’s advisory board.
The country’s growing peer-to-peer (P2P) lending sector has become one of the most complained about business sectors partly because of high interest rates and aggressive debt collection practices, according to a report.
The report by the Indonesian Consumers Foundation (YLKI) shows online lending platforms are the third most complained about business sector while property and banking rank second and first respectively.
News Comments Today’s main news: SoFi sees $12M loss in Q3. RealtyShares not seeking new deals, lays off employees. Nested raises 120M GBP. Nubank partners with Tencent. LendingClub sets up shop in Lehi. Today’s main analysis: Earnings recap for Enova, GreenSky, LendingClub, OneMain, and OnDeck. Today’s thought-provoking articles: LendingTree personal loan offers report for October 2018. Online lenders gain from […]
SoFi Q3 losses hit $12 million. It may seem that P2P lending has hit a wall with these kinds of numbers coming from several quarters, however, I tend to think of this as growing pains while the industry is standing face to face with maturity.
Earnings recap for online lenders. PeerIQ looks at Enova, GreenSky, LendingClub, OneMain, and OnDeck. Revenues are looking good. OnDeck appears to be recovering nicely. Despite $23 million in losses, LendingClub’s stock price increased, but what happened to GreenSky’s? Was it overvalued?
Online lender Social Finance (SoFi) continues to struggle, recording an adjusted loss of around $12 million during the third quarter before interest, taxes, depreciation and amortization. The FinTech company has now recorded losses for the second consecutive quarter. In August, it posted a second quarter loss of about $200 million.
According to The Wall Street Journal(WSJ), the earnings losses follow an adjusted profit of $56 million in Q3 of 2017. Loan volume has fallen for two straight quarters under Anthony Noto, who took over as CEO in March. In fact, the company revealed in an investor letter that it had extended around $2.5 billion in refinanced student, unsecured consumer and mortgage loans in the third quarter, falling nearly 30 percent from the same period a year ago.
We analyze the earnings of Enova (ENVA), GreenSky (GSKY), LendingClub (LC), OneMain (OMF) and OnDeck (ODK). All lenders delivered high-double digit revenue growth YoY. ENVA’s revenues grew 35% YoY, and GSKY’s revenue grew 29% YoY, albeit from a low base. Originations also grew by double digits YoY, with originations at GSKY growing by 33% YoY.
Lenders have raised their borrowing rates, although well below the rate of Fed Rate increases leading to margin compression. In the last 12 months, LendingClub, for instance, has raised interest rates across the credit spectrum by between 49 bps and 114 bps, while the Fed has raised short-end rates by 100 bps. The flattening yield curve is raising the cost of borrowing on lenders’ credit facilities which are benchmarked to short-term interest rates. Overall, lenders and investors are experiencing margin compression. By contrast, large banks continue to issue deposits at ultra-low rates (< 6 bps for large money center banks) and have benefitted from rising rates.
Stock price performance post earnings has been good in a relatively volatile market. Margin compression at GreenSky disappointed investors and the stock slid by over 35% after earnings. All other stocks gained post earnings with OnDeck up by nearly 33%.
Enova’s revenues grew by 35% YoY to $294 Mn and net income was $15 Mn, compared to a loss in Q3 2017.
Loans grew by 32% to $1 Bn, and originations grew by 23% YoY to $0.7 Bn driven by 28% YoY growth in the US subprime business. 31% of Enova’s new originations in the first nine months of 2018 came from new customers. This was the highest proportion of originations from new customers since 2004, demonstrating a large untapped market as Enova expands.
Loan loss reserves increased by 44% YoY to $0.2 Bn. Enova is seeing charge-off rates increase from near cycle lows. Charge-offs in Q3 were $141 Mn, up by 53% YoY. The company noted that charge-offs on new customers are roughly three times those on recurring customers, and the company evaluates every loan decision based on the lifetime expected value of that customer.
Enova had $164 Mn in cash and equivalents and $951 Mn in debt outstanding at the end of Q3. Enova issued $375 Mn of seven-year notes at 8.5%, which were used to retire existing 9.75% notes and added a new two-year $150 Mn secured facility points to grow the near prime installment product. The company also priced its inaugural $125 Mn NetCredit term securitization at a blended fixed cost of 6%.
GreenSky’s revenues grew by 29% YoY to $114 Mn and net income increased by 20% YoY to $46 Mn. It was GreenSky’s second quarter with more than $100 Mn in revenues and $50 Mn in EBITDA.
GSKY had record originations this quarter of $1.4 Bn, up by 33% YoY. GreenSky’s portfolio is focused on home-improvement borrowers and the company is looking to expand into elective healthcare and e-commerce financing.
30+ day delinquencies decreased marginally to 1.44%.
GreenSky had $294 Mn of cash and cash equivalents and $387 Mn in term loans. Funding commitments from bank partners increased by $3.5 Bn QoQ to $11 Bn. GreenSky’s bank partners are charging higher funding spreads. GreenSky has not been able to completely offset this increase by passing on higher rates to borrowers.
LendingClub delivered another quarter of record revenue of $185 Mn, an increase of 20% YoY. LC’s net loss was $23 Mn, up from $7 Mn YoY.
LendingClub announced a partnership with Intuit to offer loans to TurboTax customers by directly accessing their tax records. It’s a smart deal. The partnership enables LendingClub to keep customer acquisition costs low and also use alternative data to underwrite borrowers.
Originations grew by 18% YoY to $2.9 Bn, the highest quarterly originations at LC. Net interest income was offset by fair value adjustments on loans of $20 Mn while the structured program generated revenues of $6.3 Mn, the highest to-date.
Over the last 12 months LC has continued to tighten credit to reduce portfolio charge-off rates. The table below shows the QoQ change in the return and charge-off estimates across grades. Projected returns for grade A increased by 91 bps QoQ.
LendingClub ended the quarter with $514 Mn of cash and equivalents and no unsecured debt. LendingClub held about $459 Mn in loans on the balance sheet, most of which will be used future securitization programs. The CLUB Certificates program has raised more than $1 Bn in capital. LC issued a $270 Mn prime securitization this quarter.
OneMain reported revenue growth of 15% YoY to $933 Mn and net income more than doubled YoY to $148 Mn.
Originations this quarter were $2.9 Bn, of which 54% were secured, and receivables grew by 10% YoY to $15.8 Bn. OMF generated interest income of $933 Mn, up from $808 Mn YoY. OMF’s receivables portfolio yielded 23.7%, up from 23.4% YoY.
30 to 89-day delinquencies were 2.3% and 90+ delinquencies were 2.0%, near all-time lows. Provisions for loan losses increased by 5% YoY to $0.3 Bn and the total loss reserves increased by 1% to $0.7 Bn. The net charge-off rate dropped to an all-time low of 5.8%.
OMF had $1.2 Bn of cash and cash equivalents and revolving conduit facilities of $5.8 Bn at the end of Q3. 50% of the company’s debt is secured. In 3Q, OMF net issued $700 Mn in unsecured notes and $900 Mn in ABS. Moody’s revised One Main’s outlook to positive.
Revenues at OnDeck grew by 23% YoY to $103 Mn, the first time that quarterly revenue exceeded $100 Mn. OnDeck also delivered net income of $10 Mn.
OnDeck launched ODX, a Software-as-a-Service company, that will provide underwriting services to banks. ODX has already been working with JP Morgan and also announced a partnership with PNC. OnDeck is investing $15 Mn in strategic growth initiatives, two-thirds of which will be in ODX in 2019.
OnDeck’s originations grew by 22% YoY to an all-time high of $0.6 Bn and the loan book grew by 16% to $1.1 Bn. OnDeck has navigated the rise in interest rates well with the Effective Yield on its portfolio rising by 340 bps YoY to 36.5% and the NIM increasing by 400 bps to 33%.
OnDeck’s provision for loan losses decreased by 1% YoY to $40 Mn, while the loss reserve increased by 27% YoY to $134 Mn. Net charge-off rate decreased significantly from 16.9% to 11.1% YoY. The 15+ Day Delinquency Ratio dropped to an all-time low of 6.4% from 7.5% YoY.
ONDK’s total debt was $771 Mn and cash and cash equivalents were $71 Mn at the end of Q3. OnDeck’s cost of funds dropped by 40 bps YoY to 6%. OnDeck closed an additional $175 Mn in credit facilities.
Despite a rising rate environment, offered APRs ticked down for borrowers with lower scores, but are up for those with higher scores. Rate and loan amount offers varied widely among consumers, depending on factors including, but not limited to, credit score, income, and current debt obligations.
When Noah Breslow rang the opening bell at the New York Stock Exchange in the week before Christmas 2014, it was a high point — perhaps the high point — for the fledgling online lending industry.
OnDeck’s peak-to-trough decline in its share price was 86 per cent; Lending Club’s was 90 per cent. However much the companies protested that slower top-line growth was actually a positive — implying that they were being more selective on lending — investors were unpersuaded.
Mr Breslow is happier with the investor mix now and how results are received. In the second quarter, for example, OnDeck reported a slight fall in loan originations, from $591m to $587m. But investors welcomed a relatively low net charge-off rate — a measure of bad debt — of 11.2 per cent, from 18.6 per cent a year earlier.
LendingClub, an online credit marketplace based in San Francisco, announced last week that it will expand outside of California and open a second corporate office in Lehi.
“This area was the clear No. 1 choice,” said Steve Allocca, LendingClub president. He explained that the area’s access to a skilled labor force and tech talent was important. “We love the area for its tech focus, and we’re excited to tap into that talent pool.”
3. P2P Lenders –The term “peer to peer” is exactly what it seems. If you’re looking to apply for a loan completely online, you might want to consider any of the many lending groups available that specifically offer consumer-funded loans to any type of small business or sole proprietorship. Loan amounts vary from $2,000 to $500,00, and while many of the companies require at least two years of sales records, some (like Funding Circle) have low sales revenue requirements.
4. Invoice Financing – New to the business lending game is what is known as “instant invoice payments” or “invoice financing” services.
The Veterans Administration generally requires an annual fee of $100 per third party originator for each entity that sponsors their origination. AFR will now pay this fee on behalf of its brokers and correspondents on AFR-related VA loans.
Elevate Credit, Inc. (NYSE: ELVT) (“Elevate” or the “Company”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it has appointed David Peterson as Chief Credit Officer, effective immediately.
Peterson’s background includes 15 years’ experience in financial services, primarily in credit risk. He joined the company in 2010 and has held a number of roles of increasing responsibility in areas including credit strategy, risk, portfolio management and fraud. Previously he was with Americredit Financial Services. He holds a BBA in Finance and an MBA from the M.J. Neeley School of Business at Texas Christian University.
Unchained Capital, the crypto lending platform, is boosting security for crypto-backed loans. They have partnered with Citadel SPV, who provides governance, administration, and accounting solutions. The solution includes Multisig components. Multi-institution features will add to the security.
Peer-to-peer (P2P) lending market is massive. Cision PR Newswire projects a US $897.85 billion P2P lending market by 2024 in a recent report. Can crypto startups make a splash in this burgeoning market?
Finitive (www.finitive.com), a financial technology platform providing institutional investors with direct access to alternative lending investments, announced today that David Johnson, CEO of First Associates, has joined its advisory board. First Associates is the fastest growing loan servicer in the country and a leader in the application of AI strategies in private credit markets. As an industry leader in the loan servicing and fintech sectors, Johnson will advise Finitive on artificial intelligence, strategic initiatives and operations.
Nested, the London-based “data-driven” estate agency that provides a cash advance to help you buy a new home before you’ve sold your old one, has raised a further £120 million in funding. The new round is a mixture of equity and debt: £20 million and £100 million, respectively. Leading the equity round is Northzone, and Balderton Capital, while the debt finance comes from an unnamed institutional investor.
It is noteworthy that Balderton has only just invested in Nested several rounds into the company’s existence, considering that the London-based venture capital firm typically invests earlier at Series A. Balderton is also a backer of GoCardless, the payments company previously co-founded by Nested founder Matt Robinson. That said, Balderton General Partner Tim Bunting did invest in Nested in a personal capacity very early on.
LendInvest, an online marketplace for mortgages, has published the latest LendInvest Buy-to-Let Index report. The quarterly BTL Indes reviews 105 postcodes in England and Wales ranking four different characteristics: Rental Price Growth, Rental Yield, Transaction Volume, Capital Value Growth.
According to LendInvest, key findings for this most recent report indicate:
Colchester (#1) again tops the charts as number one spot for BTL investment
Stockport (#2) overtakes regional leader Manchester (#3), followed closely by Leeds at #11 signaling the increasing scope of investment opportunity in the North
Midlands and Central England postcodes continue to climb the table as Wolverhampton (#7) and Peterborough (#8) break into the Top 10
South Eastern cities lose momentum as long-term table topper Luton falls to #10 place
Starling Bank, which is now offering Banking-as-a-Service and payment services white label offerings, has partnered with the Post Office to allow Starling current and business account customers to deposit and withdraw cash through the Post Office’s branches.
Starling has been a mobile-only bank so far, and has been renowned for that fact alone, compared to banks like Monzo and Revolut. This move, although still not offering full in-branch services, does set it apart by allowing cash deposits. It had already been announced earlier in the year.
In late 2015, investors in one of China’s largest peer-to-peer lending companies, Ezubao, found themselves unable to retrieve their deposits. By September the next year, 26 Ezubao employees had been sentenced for effectively running a Ponzi scheme and failing to repay as much as Rmb38bn ($5.5bn) to investors.
China’s P2P lending industry recorded transactions valued at $445bn in 2017, according to Online Lending Club, a data company.
Even this gentle regulation has started to take a toll on P2P lending platforms. Numbers have thinned from 2,205 platforms at the beginning of this year to 1,590 platforms as of this August, according to Online Lending Platform, a website that tracks P2P data. Since the beginning of this year, the iOS app store and certain Chinese Android app stores have begun culling the number of P2P platforms available for download.
Chinese fintech Pintec Technology Holdings Limited (PINTEC) announced on Monday it has formed a new partnership with Beijing Evercare, a company that provides medical aesthetic treatments and health management service. Pintec reported that it will provide Beijing Evercare with an efficient and customized installment payment solution, enabling Beijing Evercare to better serve its consumers with installment options.
According to Pintec, Beijing Evercare offers its services to more than 200,000 consumers year, with the majority of its customers are white-collar workers aged 20 to 35, and females aged 36 to 50. Due to the relatively high price of such treatments, many consumers prefer installment payments to lower the financial burden. With Pintec’s customized installment payment solution, consumers of Beijing Evercare can easily apply for installment financing.
A leader in financial services technology in Latin America, Nubank has just raised a $ 90 million investment from Tencent Holdings Limited (“Tencent”), China’s leading Internet services portal.
With this round, the company reaches about $ 420 million raised in seven rounds of investment since it was founded in 2013.
A leader in financial services technology in Latin America, Nubank has just raised a $ 90 million investment from Tencent Holdings Limited (“Tencent”), China’s leading Internet services portal. With this round, the company reaches about $ 420 million raised in seven rounds of investment since it was founded in 2013.
1. Digital attackers – Those in this group consider that the best form of defence is attack. Banks with the most advanced digital strategies, like DBS, have launched their own digital banks to enter new markets or defend their patch.
2. Acquisitions – Hampered by the vast cost and complexity of maintaining their old systems, sometimes banks find it easier to buy or invest in a start-up that has built a digital platform from scratch.
3. Partnerships – Bank bosses complain loudly of an uneven playing field that allows big technology groups to offer financial services without the burdensome regulation that traditional lenders face. That has not stopped some banks teaming up with Big Tech groups.
4. Diversification – While their core payments and lending businesses may be under pressure from digital competitors, some banks are using new technologies to move into new markets.
5. ‘If you can’t beat them, join them’ – Sometimes banks decide that the threat from digital competition is so great that they just have to amend their business models.
An online fintech marketplace, the API Exchange (APIX), will be launched on Wednesday (Nov 14) by the ASEAN Financial innovation Network (AFIN) in a bid to increase financial inclusion in hard-to-reach markets.
The AFIN is spearheaded by the Monetary Authority of Singapore (MAS), the ASEAN Bankers Association and the World Bank’s International Finance Corporation.
There are about 1.7 billion adults globally who are unbanked, and one in three of them come from four countries in Asia – China, India, Pakistan and Indonesia, said the managing director of MAS, Ravi Menon, at the opening of the third Singapore FinTech Festival 2018 on Monday.
Online lender LendingClub Corp (LC.N) reported an adjusted third-quarter profit that edged past analysts’ estimates and raised its full-year earnings forecast on Tuesday, helped by record loan originations and higher transaction fees.
The company said it now expects 2018 adjusted earnings of between $89 million and $94 million, up from a previous range of $75 million to $90 million.
Fifty years ago, if you needed a loan for yourself or your business, you would typically walk into a brick-and-mortar bank, fill out a bunch of paperwork, talk to a loan officer, and wait several days or weeks to find out if you were approved. Today, this story has changed, and it’s going to look even more different in the future.
Borrowers seem to like GreenSky’s new way of obtaining credit. So far, the fintech company has served more than 1.9 million customers, providing them over $13 billion. Perhaps GreenSky’s most promising distinction is that it has also been consistently profitable with its new way of providing loan services. Its transaction volume has grown steadily from $2.1 billion in 2015 to $3.8 billion in 2017. During the same time, it grew its merchant base from 5,000 to nearly 13,000. Clearly, consumers in the 21st century like the new way of borrowing.
GreenSky estimates the home improvement industry, one of its key targets, to be just south of $350 billion annually. At a transaction volume of $3.8 billion, the fintech company has roughly 1% of the market.
The APR’s for GreenSky’s products tend to fall between 5% and 24%, depending on the borrower’s credit profile. Loan terms vary from 42 to 90 months, and customers can borrow up to $55,000. GreenSky does not cater to subprime borrowers.
Late in 2018, GreenSky announced a new partnership with American Express.
OnDeck posted gross revenues of $103 million, up 8% from the previous quarter and 23% from the prior year period. OnDeck is benefiting from higher interest income due to rate increases as well as their origination growth while being able to decrease funding costs. Effective interest yield was 36.5%, up from 33.1% last year.
Net income came in at $9.8 million for the quarter, up from a loss of $4.1 million from the prior year period.
Gross revenue of $392 million to $396 million, up from $380 million to $386 million,
Net income of $20 million to $24 million, up from $10 to $16 million, and
Adjusted Net income of $40 million to $44 million, up from $30 million to $36 million.
GreenSky reported record transaction volume in the third quarter of $1.4 billion, up 33% year over year. Revenue increased 29% to $113.9 million year over year. GAAP net income was $45.7 million.
Net revenues were $184.6 million, up 20% from the prior year period and originations were $2.9 billion, up 18% from last year. Applications also reached their highest levels, up 30% year over year.
In Q3 2018 GAAP Consolidated Net Loss was $22.7 million, or $7.3 million if you exclude $15.5 million of expenses related to outstanding legacy issues.
Total loans issued by the company now stands at over $40 billion.
Net Revenue in the range of $688 million to $698 million.
GAAP Consolidated Net Loss in the range of $129 million to $124 million, reflecting expenses related to outstanding legacy issues through the third quarter partly offset by higher Adjusted EBITDA guidance.
Adjusted EBITDA in the range of $89 million to $94 million.
October’s best mortgage offers for borrowers with the best profiles (the 95th percentile of borrowers) had an average APR of 4.61% for conforming 30-year fixed-rate purchase loans, up from 4.39% in September. The APR on refinance loan offers increased 22 basis points (bps), to 4.62%.
For the average borrower, the purchase APR for conforming 30-year fixed-rate loans offered on LendingTree’s platform was 5.27%, up 18 bps from September. The loan note rate of 5.14% is the highest rate of the year.
Consumers with the highest credit scores (760-plus, representing the 65th percentile of borrowers) received an average APR of 5.12%, versus 5.42% for consumers with scores of 680 to 719. The APR spread of 30 bps between these score ranges is the same as it was in September. For the average purchase loan amount of $233,938, the spread represents over $15,000 in additional costs for borrowers with lower credit scores over 30 years.
For the average borrower, the APR for conforming 30-year fixed-rate refinance loans increased 17 bps from September to 5.26%. The spread between credit score brackets (760-plus and 680 to 719) remained the same as last month, at 24 bps. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $238,447.
LendingTree today released its study on where millennials owe the most on their cars.
Even car loans are bigger in Texas. Metros in the Lone Star State dominate the top of the list: McAllen, Houston, El Paso and San Antonio have the highest median auto loan balances for millennials at $23,704, $20,925, $20,544 and $20,521 respectively.
Car capital of the world has the lowest auto debt. Ironically, Motor City has the lowest levels of millennial auto debt on our list with a median debt of $10,841 as well as the lowest average debt of $14,573.
Great Lakes area metros shine with the least auto debt. After Detroit, millennials in Rochester, N.Y., Grand Rapids, Toledo, Ohio, and Cleveland carry the lowest median auto debts, at $12,165, $12,429, $12,678 and $12,717 respectively.
New York and Ogden, Utah. These metros are on opposite ends of the spectrum when it comes to carrying any auto debt at all — New York has the lowest percentage of millennials with auto debt at 41.5 percent while Ogden, Utah has the highest percentage of millennials with auto debt (64.5 percent).
To prevent the average consumer from being charged more than $1700 in hidden markups on auto loan packages, Outside Financials opens an independent loan marketplace to facilitate transparency in auto lending and auto refinance.
Eugene Ludwig, founder and chief executive officer of IBM’s Promontory Financial Group, said artificial intelligence — already employed to help identify potential anti-money-laundering activity — is getting smarter, and can now be used to identify vulnerable groups of people who have been incorrectly labeled as high risk.
For example, Nerdwallet personal loan product page sorted loans by interest rates.
“All our consumers hated it. They wanted it sorted by monthly payments, which seems odd until you put yourself in their shoes and see what is going on month by month,” Chen said. “We have to meet them where they are. If you start by wagging your finger, that’s a good way to get them to hit the back button on their browser.”
Nerdwallet has three million members and more than 100 million visits each year, Chen said.
Riivos Mortgage, a division of Riivos, Inc., the provider of cloud-based continuous value chain management technology, today announced that NRL Mortgage, an originator serving customers coast to coast, is using the Riivos Mortgage Lending forecasting, planning and reporting application to help them analyze and capitalize on growth opportunities. NRL Mortgage is majority owned by St. Christopher’s Holdings LLC, a privately-owned holding company based in Houston, Texas.
U.S. District Judge Lee Yeakel on Tuesday reversed a previous order from June and granted, in part, the request by acting CFPB Director Mick Mulvaney and two industry trade groups to delay the payday rule’s August 2019 compliance date. They sought a delay to prevent lenders from having to comply with the old rule before the revisions are finalized.
Obtaining a banking license and then launching an actual new retail bank requires capital. A lot of capital. Enter Zopa, the U.K. peer-to-peer lending company that wants to become a bank, which today is announcing that it has closed £60 million in further funding. Only £16 million is actually new new money, having already disclosed £44 million in August, so this is effectively an extension of that earlier fund-raise.
Jaja Finance, the company on a mission to simplify the world of consumer finance, announces that it has already reached its fundraising target of £3m on equity crowdfunding platform Seedrs. The company will use the funds to expand its team and launch its digital credit card, Jaja.
Germany-based challenger bank N26 is bringing its services to Denmark, Norway, Poland, and Sweden.
“N26 passes on these cost benefits to its customers. N26 partners with the most innovative fintech and traditional financial companies to offer its customers best-in-class products such as TransferWise (foreign exchange), Raisin (savings), Clark and Allianz (insurance), auxmoney (credit) and others.”
BBVA and Red Electrica Corporation have become the first businesses in the world to deliver a syndicated loan using blockchain. The €150m deal, granted by BBVA, BNP Paribas and MUFG, was reached in record speed using BBVA’s proprietary platform- which is powered by distributed ledger technology.
In financial services, an industry where trust is a particular issue, Monzo was founded on the idea that there should be an alternative to traditional banking practices. Monzo argues that banks should get rid of punitive fees, do more to ensure customers know exactly what they can expect to pay for an overdraft, and provide greater control over how people spend their money.
Start-up Wagestream has just raised £4.5m for a business it promises will kill off the payday loan sector and the ‘payday poverty cycle’.
Bankers who regard payment technology companies such as fintechs as a problem may be missing opportunities.
Alternatives to payday lending are an example. These fintechs provide credit for nonprime customers, such as a recently divorced woman faced with a slew of new expenses. It is pricey credit, but cheaper than payday lenders. Unlike payday lenders, these companies provide credit reporting and reduced rates as a client pays off the loan. Eventually, a successful client qualifies for bank lending and leaves to take advantage of bank interest rates.
FinTech has revolutionized the way that banks and insurance companies function. Rather than prioritizing themselves and their services as in the past, banks must emphasize client needs in today’s new technological era. This focus on personalized financial services manifests itself in FinTech—a financial infrastructure for consumer enablement. As FinTech applies data and technology to financial services in an effort to address industry challenges, artificial intelligence is essential to FinTech’s existence and usage.
A division of the worldwide accounting and consulting firm PwCis currently working with a new stablecoin project that aims at developing a U.S. Dollar-based coin. The Hong Kong division will be exploring the best practices for issuing new stablecoinsworking with the Loopring Foundation.
A new piece of research, sponsored by Finastraand executed by Mercator Advisory Group, shows that small and midsized financial institutions can derive significant benefits to operational efficiency by pursuing three distinct cost-saving strategies: vendor consolidation, cloud delivery, and artificial intelligence. Based on in-depth interviews with C-level representatives of community banks and credit unions with asset size between $200 million and $5 billion, the research gauges attitudes toward and levels of adoption for each strategy.
Consolidation of vendors ultimately eliminates the need to maintain and manage multiple systems, and can improve operational efficiency by 20-30%.i
Cloud delivery brings numerous benefits including the ability to easily scale system capacity to meet demand.
Artificial intelligence (AI), which is the least adopted of the three strategies to date, promises to make processes smarter, faster and more personalized to the consumer. However, in order to reap these rewards, banks must prioritize their vendor consolidation and cloud delivery road maps.
The white paper, titled Landmark Decisioning: Using Vendor Consolidation, Cloud Computing, and Artificial Intelligence to Improve Operational Efficiency, is available here.
Persona, the blockchain-based solution for identity management,has just announced its partnership with FintruX, the P2P lending ecosystem, to streamline the onboarding process for customers while ensuring they remain in full control over their personal details.
Persona is the first identity management solution developing its own blockchain, as opposed to other projects being developed as ERC20 tokens over Ethereum.
Funding Societies | Modalku (FSMK) is the only peer-to-peer (P2P) lending platform from Southeast Asiato be included in Fintech100, an annual list of the top 100 leading financial technology innovators from around the world.
While the fault lines of the last global financial crisis have been mostly addressed, risks remain and have shifted in three ways over the past 10 years, said the Monetary Authority of Singapore’s (MAS) managing director Ravi Menon on Wednesday (Nov 7).
Meanwhile, the extension of credit has shifted from banks to non-banks – one of the areas that have not been given enough attention, said Mr Menon.
Equifax Canada and Loop today announced the launch of a credit health and monitoring platform for businesses. Launched at the intersection of Small Business Month and Financial Literacy Month, the new platform empowers Canadian small business owners and entrepreneurs alike, to improve their financial and credit health through easy-to-read credit scores, reports and resources.
It is now possible to attain a loan for Canadian Dollars (CAD) using bitcoin as collateral. The ability to use crypto as a form of collateral for fiat is a sign of further legitimacy for the sector. More providers are expected to follow suit and offer crypto loans, with a wider range of fiat currencies for a larger range of acceptable cryptocurrencies used as collateral.
News Comments Today’s main news: SoFi reports $200M loss in Q2. OnDeck jumps 18%. LendingClub sees record net revenues in Q2. Alipay fined for regulation violations. Dianrong raises $40M. Even Financial raises $18.8M. Today’s main analysis: OnDeck’s Q2 2018 earnings presentation. Today’s thought-provoking articles: GreenSky, OnDeck, LendingClub earnings. Where did it go wrong for Wonga? OnDeck’s Q2 earnings presentation. United States SoFi reports […]
OnDeck today announced second quarter 2018 Net income of $5.8 million, Adjusted Net income of $10.0 million and Gross revenue of $95.6 million.
Review of Financial Results for the Second Quarter of 2018
Net income was $5.8 million, or $0.07 per diluted share, improved from the Net loss of $1.5 million, or $0.02 per diluted share, in the year-ago period.
Adjusted Net income was $10.0 million, or $0.13 per diluted share, compared to Adjusted Net income of $4.7 million, or $0.06 per diluted share, in the year-ago period.
Unpaid Principal Balance grew 3% sequentially and 8% from a year ago to $1,027 million. Originations of $587 million were consistent with the prior quarter reflecting an increase in the number of loans funded and decrease in the average loan size. Originations increased 26% from a year ago with growth in both term loans and lines of credit.
Gross revenue increased to $95.6 million, up 6% from the prior quarter and 10% from the year-ago quarter, driven by higher Interest income. The Effective Interest Yield was 36.1%, up from 35.6% in the prior quarter and 33.5% in the year-ago quarter, primarily reflecting increases in average loan pricing.
Guidance for Full Year 2018
OnDeck increased its guidance for the full year ending December 31, 2018:
Gross revenue between $380 million and $386 million, up from between $372 million and $382 million,
Net income between $10 million and $16 million, up from between $0and $10 million, and
Adjusted Net income between $30 million and $36 million, up from between $18 million and $28 million.
See OnDeck’s full Q2 2018 earnings presentation here.
Shares of On Deck Capital(NYSE:ONDK) were soaring by nearly 25% as of 1 p.m. EDT on Tuesday as the company beat consensus earnings expectations in the second quarter and raised its outlook for the remainder of the year.
Now, the top-line numbers are improving. Second-quarter figures released after market close on Tuesday showed record net revenue, up 27 per cent from a year earlier at $177m, from record quarterly loan originations of $2.8bn.
On top of all that, there was a big writedown this quarter of an acquisition made four years ago, during an ill-fated push into supplying loans to medical patients. Over the first six months, total expenses came to $1.28 for every dollar of net revenue.
GreenSky went public just a few months ago on May 24, 2018. Their IPO was significant for a couple of reasons. One was the lack of US based fintech IPOs over the last few years and the second was that GreenSky is a wildly successful business. Last year they reported $139 million in net income on revenues of $326 million.
OnDeck reported net income of $5.8 million for the quarter with gross revenues of $95.6 million, up 10% year over and 6% from the previous quarter. Originations grew to $587 million, up 26% from the prior year period, but down slightly from the previous quarter. The company’s trend of increasing the number of loans funded and decreasing the average loan size continues.
CEO Scott Sanborn noted that LendingClub’s core business is firing on all cylinders with record revenue and originations. The company has seen a 50% increase in applications year over year. Originations were $2.8 billion, up 31% year over year and up from $2.3 billion in the previous quarter. For context, the company originated their last high water mark of $2.75 billion in the first quarter of 2016. Revenues came in at $177 million, up 27% year over year.
Even Financial, a fintech startup that connects the disparate entities of the financial services industry, recently raised a $18.8 million Series A round led by GreatPoint Ventures with participation from Goldman Sachs, Canaan Partners, F-Prime Capital, Lerer Hippeau and others.
Although the OCC emphasizes that it’s holding these special-purpose charters to standards equivalent to those demanded of national banks, this is only sort of true with regard to the named prudential requirements, and it looks to be completely incorrect on critical restrictions on competitive and financial risk. These omissions have significant consumer protection, safety and soundness and structural impacts. Absent egregious violations, a charter granted cannot be revoked. The OCC should be sure it isn’t a shadow-bank enabler before it hands out these high-powered charters.
Rahul Chadha follows peer to peer mobile banking for the research organization eMarketer. His firm says Zelle will overtake Venmo this year. Chadha spoke with Marketplace’s Lizzie O’Leary about the two payment systems.
BankMobile A digital bank created by an established US-based financial services player Customers Bancorp. BankMobile opened for business in early 2015.
It caters mainly for students and offers a low-fee checking account with no monthly fees and no overdraft/non-sufficient funds (NSF) fees. It also provides personal loans.
Chime Founded in 2014, Chime has raised over $100 million funding to date, values the business at around $500 million and has over one million accounts. It employs around 100 people.
Endeavor Bank Endeavor Bank opened its doors for business in San Diego, California in January 2018, following an initial capital raise of $26.6 million and the backing of over 450 investors/owners. It is a brand new bank, with no merger legacy.
Finn Finn is a digital bank account for smartphones created by JP Morgan Chase.
GoBank GoBank was launched in 2013 by Green Dot Corporation, which claims it to be “the first bank account designed from scratch to be opened and used on a mobile device”.
Iam Money Iam Money has its HQ in Chicago and an office in San Francisco. It also has two offices outside the US, in Dublin and London.
It has secured $3 million of funding, and plans to have $20 million when it launches.
Marathon International Bank A start-up bank for the Ethiopian American community, based in the Washington DC area. Its founders are Tekalign Gedamu, a retired economist and former MD of the Development Bank of Ethiopia, and Tesfaye Biftu.
Marcus An online platform launched by Goldman Sachs – named after Marcus Goldman, one of the firm’s founders – offering no-fee personal loans and high-yield savings to consumers.
Moven Launched in 2011 by Brett King, Moven describes itself as “the world’s first real-time mobile money tool”. It is a digital bank account with a mobile app.
N26 A challenger bank from Germany, now working on its US presence, including obtaining a banking licence. It opened early access to users in the US in October 2017 and has an office in New York with eight staff.
PurePoint Financial PurePoint Financial was launched in early 2017 by MUFG Union Bank. It is a “hybrid digital bank” offering savings accounts and certificates of deposit (CDs).
Revolut European banking challenger Revolut opened early access to users in the US in September 2017. It says it aims “to clean up the American banking system”. It provides digital banking services to consumers and businesses.
Simple Digital banking service Simple was founded in 2009 in Portland, Oregon. It describes itself “a tech company, not a bank”.
In early 2014, it was acquired by BBVA Compass for $117 million.
In early 2017, it raised another $500 million, and spent $100 million (in stock) on Zenbanx, a mobile banking start-up. Zenbanx offered a mobile account in the US and Canada that lets people save, send and spend money in multiple currencies. This deal demonstrated SoFi’s interest in branching into other financial services, with a wealth management tool in beta at the time of the acquisition.
In early 2018, Stash raised $37.5 million in Series D funding for product expansion, and shortly afterwards teamed with Green Dot Corporation and its subsidiary bank, Green Dot Bank, to launch mobile-first banking services (underpinned by Green Dot’s Banking-as-a-Service platform).
Studio Bank In 2017, Tennessee-based Studio Bank filed an application to become Nashville’s “first newly chartered de novo bank in nearly a decade”.
Varo Money San Francisco-based mobile banking service Varo Money was founded in 2015. It applied for a national bank charter and federal deposit insurance in mid-2017, to form Varo Bank.
The Treasury Department’s recent report on how to regulate nonbanks drew praise not just from tech startups but also from mortgage industry insiders.
In addition to recommendations for a new federal fintech charter and that regulators pull back from payday lending rules, the report contained a section that might be music to a mortgage banker’s ears, including support for the industry’s automation efforts and another call to soften the use of the False Claims Act against lenders.
Mortgagetech company Blend is venturing into insurance. The San Francisco-based company launched Blend Insurance Agency, an extension of its digital mortgage platform that offers borrowers a range of options for homeowners insurance.
The first property is a 1,242-unit self-storage facility in Fayetteville, NC. It was acquired in December 2013 and sold in January 2018. It was acquired for $6,750,000 and sold for $9,645,000, representing a 43% increase in capital value from acquisition.
The second property is a 40,000-square foot office building in Tamarac, FL. It was acquired in May 2016 and sold in February 2018. It was acquired for $4,150,000 and sold for $4,900,000, representing an 18% increase in capital value from acquisition.
The third property is a 72-unit multifamily apartment building in Ogden, KS. It was acquired in July 2013 and sold in April 2018. It was acquired for $4,000,000 and sold for $4,450,000, representing an 11% increase in capital value from acquisition.
The fourth property is a 208-unit multifamily apartment building in Euless, TX. It was acquired in February 2015 and sold in May 2018. It was acquired for $12,375,000 and sold for $20,900,000 after a value-add renovation program, representing a 69% increase in capital value from acquisition.
DriveWealth Holdings, Inc. (“DriveWealth”), a fintech company providing brokers, digital advisors and mobile online financial services companies seamless access to the U.S. securities market, and Bambu, a global provider of robo-advisory technology, today announced the launch of a white-label, end-to-end robo-advisory platform solution for the wealth management industry.
To be considered for admission, applicants must complete the nine-page application and pay a $500 application fee. Each application must be for an innovative financial product or service as defined by the enabling legislation.
The emergency fundraising is the latest episode in Wonga’s rapid rise and fall. Just six years after the company was touted for a flotation that would have valued it at more than $1bn (£770m), it is reported to be worth just $30m.
WHEN PAYDAY LENDER Wonga launched in 2007, it was tipped to become a £1bn success story. Today, the company is worth just £23m and has only managed to avoid insolvency thanks to a last-minute £10m boost from investors. So what went wrong?
They are winding up their largest survey ever right now. In the past they have produced multiple reports targeting the various regions around the world including: the United Kingdom, Europe, the Americas, Asia and Africa. This year they are combining everything into one big study.
If you have not participated in the survey yet time is running out (while the survey says it closes on July 22nd, they have extended the deadline for another week or so). We need every platform in this country and around the region to participate. To learn more you can read more about this comprehensive piece in
Chinese P2P lending platform Dianrong announced that it has raised $40 million of funding from Dalian Financial Investment Group Co. Ltd. The current round will increase the company’s total funds raised to date to over $500 million. Its previous investors include big titles such as Standard Chartered, GIC Private Limited, Singapore’s sovereign wealth fund, CMIG Leasing, Simone Investment Managers, etc.
Prime Trust, a blockchain driven trust company, announced on Monday it has launched a new technology that enables real estate syndicators and securities issuers to accept funds from investors in the form of Bitcoin and Ethereum, frictionlessly and with zero crypto-market risks to the syndicator or issuer. According to Prime Trust, the technology enables holders of these virtual currencies to invest in real estate, crowdfunding and other private and public securities offerings without having to go through the cumbersome and often confusing process of liquidating tokens and then wiring funds in USD to an escrow account at Prime Trust.
TransUnion TRU, +0.56% announced today it is partnering with global technology and analytics company EXL EXLS, +0.93% to create a seamless technology solution for lenders to comply with the new Current Expected Credit Loss (CECL) accounting rule. Information about the new accounting rule will be highlighted during TransUnion’s webinar, “Major Hurdles to Overcome to be CECL-Ready,” scheduled for 1 p.m. CDT on August 15.
As the revelations from the Royal Commission continue to pour in, the Australian Securities and Investment Commission (ASIC) has revealed that, in total, Australian financial advice institutions will refund customers over $800 million in reparations over fees for no service (FFNS) programs.
Launched in June 2018, the bank is led by former ANZ Japan CEO, Robert Bell, and ex-Cuscal Payments CIO Brian Parker. Joining as incoming chairman is Anthony Thomson, co-founder and former chairman of Atom Bank and Metro Bank.
For its tech, it uses a variety of different vendors. Unifii’s Business Transformation Platform is used for its technical infrastructure. For its small business lending platform, it will use one from Realtime Computing, based in Perth, Australia.
Digital banking start-up Pelikin aims to reshape the way people save, send and spend their money in Australia and while travelling abroad. The company’s slogan is “spend like a local”. The founder is Sam Brown.
Unveiled in 2008 and developed and supported by National Australia Bank (NAB). It operates under NAB’s banking licence, and offers home loans, online savings accounts, and term deposit accounts. UBank has more than 400,000 customers.
News Comments Today’s main news: Square pulls bank license application. Lendio facilitates 5K loans for California small businesses. Crowdfunding.de pass 500M Euro mark. Wisr doubles personal loan originations. Today’s main analysis: Deep dive into GreenSky. Today’s thought-provoking articles: How Kabbage’s president is shaking things up. Online lenders expected to increase exposure to ABS. Interview with PolicyBazaar CEO. United States Square […]
Square withdraws bank license application. There isn’t a solid reason given other than they want to “strengthen some areas” of their FDIC insurance application, and they intend to re-apply in the future. It’s an interesting move, nonetheless. It makes me wonder what they’ll gain.
Though Square has reportedly withdrawn its application to create a deposit-taking bank, the payments processor intends to file the application again in the future. The firm had applied for an “industrial loan company (ILC)” license with the Federal Deposit Insurance Corporation (FDIC), Reuters reported.
The news comes as it was reported in September that Square intended to submit an application to form a wholly owned and operated bank in Utah. That business unit would be called Square Financial Services Inc. and would be designed to offer loans and deposit accounts to small businesses. The bank would be capitalized with around $56 million in cash.
A study by the New York Fed found that online lenders reduced mortgage processing time and experienced lower overall delinquencies. The study found that mortgages offered by fintech companies closed about 20% faster and showed that default rates were 38% lower for purchase loans and 29% lower for refinance loans.
GreenSky Company Profile
GreenSky, headquartered in Atlanta, is led by CEO David Zalik. GreenSky has a $4 Bn market cap, 2017 revenues of $326 MM, and employs ~900 employees.
GreenSky has funded over $12 Bn in loans for over 1.7 Mn customers. The company funded $1 Bn in loans in Q1 2018.
GreenSky has shown impressive growth in its sales YoY. As seen in the charts below, GSKY had net income of $139 Mn in 2017, up from $124 Mn in 2016, while sales grew by 24% YoY to $326 Mn.
Online small business lender Lendio announced on Thursday it has helped facilitate nearly $120 million in growth capital through more than 5,0000 to small businesses in the state of California. The lending platform has reportedly funded more loans in California than in any other state and the funding milestone comes just after a 169% increase in loans originated through Lendio’s platform in California during the last fiscal year.
Lendio also reported that according to a Federal Reserve Bank of Cleveland report, nearly half of small businesses need additional funding each year; however, since 2008, it’s been a challenge for small business owners to access financial capital. The lender noted that continued growth and innovation in online lending platforms is transforming the funding landscape. Lendio helps California small businesses get loans fast, with 70 percent of businesses getting loan offers within three days of submitting an application.
Credit unions love an auto lending boom – what’s not to like? According to one analyst, however, there could be more happening than meets the eye.
Vehicle sales continue to hover around the 17 million mark, according to the latest Credit Union Trends Report from CUNA Mutual Group, and CU auto loans amounted to more than $354 billion as of April 2018 – an increase of nearly $80 billion from just two years prior. Auto lending at credit unions has grown by double digits (as a percentage) for the last two years.
A survey of 57 institutional investors by Managing Partners Group, released on Friday, found 60 per cent expect their exposure to ABS to rise over the next three years.
25 per cent of respondents said strong growth in fintech companies, including alternative lenders that prefer to raise capital via ABS, was a factor driving increased supply.
Rating agencies predicted a boom in P2P securitisations, but the only activity in 2017 was a £208.9m Zopa deal, led by investment trust P2P Global Investments.
Moody’s recently told Peer2Peer Finance News it expects more securitisations this year, while fellow ratings agency S&P Global has predicted a 30 per cent increase in securitisations from marketplace lenders during 2018.
Fintech is changing the financial services landscape. It is improving customer service, increasing financial inclusion and making banking just plain simpler, easier and more accessible.
Traditional banks around the world have been fearing the inevitable for quite a while now – and although some of them are starting to invest and acquire startups, many smaller, agile companies are still stealing a lead on the financial megaliths.
One of the most dynamic and innovative markets for fintech is the UK. And here are six companies that are radically disrupting financial services – and making life easier for us in the process.
China is home to the largest P2P industry in the world – an accomplishment that was aided by the fact that at the beginning, few rules were in place to regulate the online lending industry. But during the past year, Chinese authorities have tightened the rules pertaining to platforms who operate P2P sites.
As recently as last month, two P2P lenders, lianbijr.com and txslicai.com.cn, were investigated by Chinese authorities.
P2P lender Yilongcaifu reportedly collapsed with its parent company Fuxing Group shut down as it fell under a police investigation.
Xzgjf.com, another struggling online lender, promised returns of 8% to 14%. Since June 19, investors have been “finding it hard to withdraw money” as borrowers are not paying back their loans.
Early-days monitor of the German crowdfunding market, Crowdfunding.de announced in its latest quarterly report that Germany passed the half billion-euro mark in cumulated in SME crowdfunding at the end of June 2018.
The report monitors only equity crowdfunding and crowdlending on marketplaces open to German retail investors such as Exporo, Funding Circle and Companisto. It does not include private platforms such as SME lender Creditshelf.
Real estate accounts for more than half of the SME crowdfunding market (53,3%). It is the fastest growing segment, set to more than double in size this year, after having tripled in size in 2017.
Enterprise funding represents 42.6% of the market. Renewable energy project crowdfunding remains small at 3.8%.
Kleros, a new decentralized dispute resolution ‘layer’ for virtually any transaction, has partnered with MARKET Protocol, a company building an open source foundation for decentralized derivatives markets, an industry worth over 500 trillion.
The rankings are featured in a recent report published by Chartis, titled Technology Solutions for Credit Risk 2.0, 2018, which assesses the technologies that are addressing the speed, flexibility and risk profile of the lending market.
According to Chartis, there has been a structural shift in the way that credit is provided, consumed, and analyzed in recent years. Now, following the impact of Basel II on the way financial institutions systemized their credit assessment and analysis, a digital revolution is once again transforming the credit risk market. Chartis is calling this new normal ‘Credit Risk 2.0.’ In the wake of this transformation, new operational issues and challenges are impacting liquidity management. Financial institutions must reassess how vendors are able to meet their needs and demands. Based on specific credit risk capabilities, including data management and stress testing, Finastra earned Category Leader status for both the banking book and the trading book.
Financial inclusion probably won’t narrow the gap between the rich and the poor. In fact, some of the greatest inequalities exist in some of the wealthiest countries. But it can give the poor a means of building a better life and taking advantage of the social and economic benefitsthat access to banking brings.
So how can we accelerate financial inclusion through technology? Here are the top 5 ways.
ASX-listed lender Wisr (formerly known as DirectMoney) has revealed that the overall value of loan originations in the second half of the 2018 financial year increased by 136 per cent compared to the first half, while the number of new customers rose by 118 per cent over the half.
Further, the lender achieved a 66 per cent quarter-on-quarter (QoQ) growth in loan origination value and 40 per cent QoQ growth in loan origination volume in Q4 FY2018. This is up from the 42 per cent QoQ growth in originated loans recorded in Q3 FY2018.
Wisr said that its average loan amount also rose by 17 per cent QoQ to $22,670 by the end of Q4 FY2018.
Lodex, co-founded by Agrinio native Bill Kalpouzanis who is now its co-CEO alongside Mic Phillipou, uses sophisticated technology to get customized quotes for their customers who are looking for a loan.
It was Australia which presented an opportunity to put his model into practice, with banks showing growth for 15 years and the regulatory environment being kind to the kind of business Lodex wanted to become.
However, despite these tailwinds, the take up of digital advice in Australia has been relatively modest. This compares to the United States where a significant proportion of investors are embracing technology-enabled advice solutions, such as Betterment and Wealthfront.
Home-grown Australian providers, such as Clover and Stockspot, have made inroads with their low cost, automated investment offerings. The challenge remains for consumers to create a human connection with digital investment advice. That is what makes the story of former Essendon and Sydney Swans premiership player Ted Richards and his collaboration with robo adviser Six Park so interesting.
With $100 million earmarked for DocPrime for the next two years, Yashish Dahiya, Co-founder and CEO of PolicyBazaar, speaks about the architecture of the new venture and how they plan to cross-leverage product from their existing companies.
And fuelling this ambition was Softbank’s Vision Fund, which along with parent Softbank, has invested overall $8 billion in the Indian internet ecosystem over the last five years. Softbank wasn’t alone in leading this Series F round of $200+ million. The Japanese conglomerate was joined by existing investor InfoEdge, which runs Naukri.com and reportedly invested close to $45 million in the deal.
With traditional investments like savings and fixed deposits she found that returns were just too low. To invest in real estate, she needed upfront and large amount of capital and investment in gold was not yielding returns like it used to. While she dabbled in mutual funds and SIPs (systematic investment plans) she realised that to earn 12-15 per cent returns, she had to be invested for 3-4 years, if not more.
Tokyo-based Maneo Market overlooked misuse of funds that a client collected from investors, according to regulators.
The Securities and Exchange Surveillance Commission recommended on Friday that the Financial Services Agency impose administrative penalties on Maneo Market.
On behalf of a client named Green Infra Lending, Maneo Market raised roughly 13 billion yen ($117 million) from 3,084 investors to finance projects inside and outside Japan, promising annual returns of 11% to 14%.
The Securities Commission Malaysia (SC) is inviting interested parties to apply to operate investment crowdfunding platforms and peer to peer lending sites. SC states that applicants may submit their applications for registration now with a deadline of September 7th, 2018.
Prague-headquartered investment banking firm Benson Oak is setting up a dedicated investment fund for the Israeli market, the firm announced Sunday. The fund, which will focus on blockchain and consumer-facing companies, has already raised $25 million with the intention of raising a total of $100 million by the end of the year.
Benson Oak’s capital comes from private investors, strategic companies, and family offices, and the firm does not partner with institutional investors. The new fund will target seed-stage companies and is expected to announce two portfolio companies in the upcoming days.