Thursday September 26 2019, Weekly News Digest

LendingClub eligibility

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

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

LendingClub eligibility

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

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

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

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

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

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

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

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

Watch the video here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Summary Highlights

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

Read the full report here.

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

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

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

Source: PeerIQ, CitiGroup

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

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

Source: TransUnion

Risk Levels Higher for Traditional and Alternative Loan Borrowers

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

Read the full report here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

European Union

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

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

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

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

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

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

Source: Financial Times
International

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

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

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

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

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

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

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

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

Australia/New Zealand

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

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

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

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


Read the PDF transcript here.

India

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

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

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

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

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

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

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

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

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

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

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

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

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

Bitcoin Daily (PYMNTS), Rated: B

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

MENA

Qatar Boosts FinTech Focus (PYMNTS), Rated: A

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

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

Africa

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

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

Caribbean

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday August 29 2019, Weekly News Digest

VC-backed fintech

News Comments Today’s main news: Funding Circle closes $198M ABS for U.S. SMBs. KBRA assigns preliminary ratings to Consumer Loan Underlying Bond Credit Trust 2019-P2. SoFi to create 300 jobs in Jacksonville, Florida. LendInvest postpones IPO until at least 2020. Binance offers crypto lending. Today’s main analysis: The nonbank and alternative lending industry in 2019. […]

The post Thursday August 29 2019, Weekly News Digest appeared first on Lending Times.

VC-backed fintech

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

Funding Circle Closes $ 198 Million Securitization to Support US Small Businesses (Valdosta Daily Times), Rated: AAA

Funding Circle today closed its first asset-backed securitization (ABS) of US small business loans originated through its platform. The $198 million deal marks the debut of Funding Circle’s US securitization sponsorship capability, and is the fifth securitization of Funding Circle business loans globally.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2019-P2 (Benzinga), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2019-P2 (“CLUB 2019-P2”). This is a $287.80 million consumer loan ABS transaction.

Preliminary Ratings Assigned: Consumer Loan Underlying Bond (CLUB) Credit Trust

2019-P2

Class

Preliminary Rating

Initial Class Principal

A

A+ (sf)

$200,700,000

B

A- (sf)

$37,900,000

C

BB (sf)

$49,200,000

DeSantis says SoFi, SS&C Technologies will create 498 jobs in Jacksonville (Jax Daily Record), Rated: AAA

Florida Gov. Ron DeSantis announced Wednesday that two international information technology companies will create a combined 498 jobs in Jacksonville, disclosing the names of Project Quail and Project Liberty.

SoFi, a California-based online personal finance company, has been seeking $1.5 million in state and city incentives through the Qualified Target Industry Tax Refund program as code-named Project Quail to establish its southeastern operations center and create 300 jobs in Jacksonville.

Court activity on Aug. 27: Sofi Lending Corp. vs Cindy Luu (SE Texas Record), Rated: B

The Harris County Civil Court reported the following activity in the suit brought by Sofi Lending Corp. against Cindy Luu on Aug. 27: ‘Original Petition Citation Issued’.

Swimming Pools Are a Highly Prized Amenity Amid the Summer Heat (LendingTree), Rated: AAA

A new LendingTree study ranks the 50 largest cities by its share of homes with a swimming pool. We found that about 10% of homes have pools, ranging from nearly 33% in Phoenix to 1% in Portland, Ore. We also looked at the values of homes with and without swimming pools to show how much this amenity is worth. Let’s dive in.

Key findings

  • You’ve gotta pay to play: The median home with a pool is valued at $469,187, while the median home without a pool is valued at $305,152 — a 54% premium. The highest premium is in Memphis at a whopping 157%.
  • Go West: It’s no surprise that six of the top 10 cities for swimming pools are in the West — four in California and one each in Arizona and Nevada.
  • Hot, hot, hot: Phoenix, which experiences more than 100 days above 100 degrees a year, leads the way with 32.7% of homes having a swimming pool.
  • Sunshine State: Florida is not far behind California with three cities in the top 10. Miami, Tampa and Orlando rank second, third and fourth, respectively.
  • Rain and water don’t mix: Two of the cities with the least swimming pools are in the rainy Northwest. Portland is in last place with just 1% of homes with pools, while Seattle is not far ahead with 1.3%.
Source: LendingTree

Brex Teams With BigCommerce To Offer Merchant Financing (PYMNTS), Rated: A

Corporate eCommerce card company Brex has announced a partnership with leading SaaS eCommerce platform BigCommerce, according to a release.

Brex’s open credit line, three-month payment terms and interest-free financing are now available to all BigCommerce merchants through the BigCommerce App Store.

German challenger bank N26’s plan to win over Americans (American Banker), Rated: A

N26’s new SoHo office has all the design elements of a tech startup — high ceilings, distressed wood, big windows, a pingpong table, beanbag chairs, community meeting areas.

Digital Banking And Branches Not An Either/Or Proposition (PYMNTS), Rated: A

GOBankingRates found that 25 percent of consumer prefer banking with a mobile app, though nearly half preferred banking in person at a branch or ATM. Yet 76 percent said they wouldn’t open an account with a bank that doesn’t have a mobile app.

According to Fiserv, the preference for digital interactions (online plus mobile) is 58 percent, considerably ahead of the preference for branch interactions (32 percent).

When breaking out online, though, there is a preference for online (37 percent) compared to mobile (17 percent).

Why Fifth Third is raising its bet on alternative power (American Banker), Rated: A

Fifth Third Bancorp is building out its renewable energy banking business, highlighting how the alternative power niche isn’t just for the biggest banks.

The $169 billion-asset Fifth Third recently added three new managing directors to its renewable energy investment banking group. With the additions of Timothy Beach, Ari Citrin and Oliver Janssen, the bank intends to offer more specialized capital markets and M&A advisory services to renewable energy firms, most of which are in solar.

How to Get Your Small Business Ready for a Recession (Successful Meetings), Rated: A

How students are trying to avoid college loans (Marketplace.org), Rated: AAA

Student debt can seem inevitable. Today, more than 44 million Americans owe nearly $1.5 trillion in student loans. This debt has been blamed for many things: Americans’ lack of retirement savingsdeclining rates of home ownership, even the death of marriage.

A look at the nonbank and alternative lending industry in 2019 (Business Insider), Rated: AAA

According to Oracle’s Digital Demand in Retail Banking study of 5,200 consumers from 13 countries, over 40% of customers surveyed think nonbanks can better assist them with personal money management and investment needs, and 30% of respondents who haven’t tried a nonbank platform said they’re open to trying one.

Business Insider Intelligence’s Online Mortgage Lending Report found that the top five US banks – Wells Fargo, Bank of America, and JPMorgan Chase, US Bancorp, and Citigroup – only accounted for 21% of total mortgage originations, which is a huge decline from their 50% combined market share in 2011.

Source: Business Insider

According to a survey from the Federal Reserve Bank of Richmond, in 2016 only 58% of loan requests from small businesses were approved by incumbent banks, compared to 71% approved by alt lenders that same year.

Fund That Flip Raises Another $ 11M to be the Funding Solution for Real Estate Speculators (Alley Watch), Rated: A

AlleyWatch caught up with Matt Rodak to learn more about the company’s success, future growth plans, and recent round of funding, which brings its total funding to $13M across four rounds.

New Tools Help Mortgage Lenders Build Stronger Relationships with Borrowers’ Real Estate Agents (SimpleNexus), Rated: A

SimpleNexus makes it easy for loan originators to create co-branded mobile apps for Realtor partners to share with borrowers. The shared platform enhances the borrower experience by keeping partners up-to-speed on loan progress and putting mortgage calculators and other handy tools at partners’ fingertips.

Pagaya Expands PAID Shelf with Prosper: Closing $ 115 Million Consumer Credit ABS (BusinessWire), Rated: A

Pagaya, a global financial technology company using artificial intelligence (AI) to reshape asset management, today announced the closing of a consumer credit asset-backed security (ABS) at $115 million. Led by structuring agent Cantor Fitzgerald, the ABS will be actively managed by Pagaya’s AI.

Pagaya has been working closely with Prosper to develop innovative financing solutions for consumers, which will be featured in this securitization.

Tech startup Blooma launches out stealth with $ 2.75 million seed funding for its loan origination AI platform (Tech Startups), Rated: A

Blooma, a tech startup that reduces time to revenue for commercial lenders, launches out of stealth with $2.75 million seed funding to transform the lending experience for commercial and private lenders and other organizations. The financing was led by Floodgate, a Palo Alto, Calif.-based investor. Other backers include: Abstract Ventures, Crescent Ridge Partners and Serra Ventures.

Former PayPal executive joins crypto lending startup Cred as CFO (The Block Crypto), Rated: B

Cryptocurrency lending and borrowing startup Cred has hired former PayPal executive as its chief financial officer (CFO), according to an announcement Monday.

iCapital Network expands exec team with four New hires (PE Hub), Rated: B

“STYLE360” Celebrates 15 Years At New York Fashion Week With New Title Sponsor Klarna (PRWeb), Rated: B

Fashion event agency, A-List Communications announces their lineup and new title sponsor Klarna for their 15th year of STYLE360, which will take place during the latter portion of Spring/Summer 2020 New York Fashion Week from September 9 – 11, 2019.

White Oak Commercial Finance Originates a Revolving Credit Facility to The Good Kitchen (Financial Content), Rated: B

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today the origination of a new revolving credit facility to healthy meal service company The Good Kitchen. Originally founded as a meal delivery service, The Good Kitchen will use the proceeds of the credit facility to expand its business into packaged meals sold at 1,500 stores across the United States.

Lenders Moving Away From Small-Dollar Loans to High-Interest Installment Loans (Lexology), Rated: B

California non-bank consumer lenders are moving away from small-dollar short term payday loans and are, instead, embracing longer-term installment…

United Kingdom

LendInvest reportedly shelves IPO plans for now (AltFi), Rated: AAA

Nearly a year after announcing a $39.5m “pre-IPO” funding roundLendInvest has delayed plans to IPO this year in favour of another private cash injection, according to a report by Financial News.

Mobile banking apps in the UK are surging ahead of investment and insurance apps (Business Insider), Rated: A

Over three-quarters of consumers in the UK use a finance app, according to a new study from Speedie Consultants that surveyed 200 people in the country. Twenty-four percent of those surveyed use their finance apps around twice a week, and 23% said they use it daily. The most common finance app users were aged 25-45, in addition to consumers over 65.

Source: Business Insider

Klarna launches VAR campaign created by 72andSunny (Prolific London), Rated: A

Swedish fintech payments firm Klarna has launched a new campaign focused around the introduction of Video Assistant Referee technology in the UK’s Premiere League.

Celsius Network Sees A 20x Increase In Deposits, However, Many Analysts Are Concerned (Bitcoin Exchange Guide), Rated: A

According to the latest press release, leading crypto lending firm Celsius Network has seen an increase of 2,165% growth in deposits. The network has already surpassed 20,000 BTC through mobile app deposits during the first year of operations.

New data reveals rapid growth in Peer-To-Peer lending is cannibalising High st bank market share (ResponseSource), Rated: A

Know Your Money data revealed that:

• Peer to Peer and Challenger lenders comparison searches have more than doubled in 3 years

• 33% of Businesses selected a P2P or challenger lender on  in 2019 – compared to just 15% in 2017

• Alternative lending interest more than doubled in the last 2 years

Revolut Boosts Executive Leadership with New Hires from Traditional Banking (Crowdfund Insider), Rated: B

According to Revolut, the Fintech bank has hired Philip Doyle as Director of Financial Crime Risk, Wolfgang Bardorf as Treasurer and Stefan Wille as Deputy Chief Financial Officer.

European Union

Zurich-based Numbrs is the latest fintech to join the unicorn club (Business Insider), Rated: AAA

The Zurich-based fintech, whose investors include former Deutsche Bank CEO Josef Ackermann, raised $40 million at a valuation of over $1 billion, reports Bloomberg. The latest investment brings Numbrs’ total raise to date to almost $200 million, CEO Martin Saidler told the outlet.

Notably, in contrast to many of its peers, Numbrs has joined the unicorn club not by focusing on venture capital and private equity funding, but instead by relying mostly on individuals and families — 50 have invested in the company thus far. The startup’s app enables users to aggregate their various bank accounts and manage their finances, and offers a marketplace for consumers to purchase various financial products.

Source: Business Insider

P2P Global Investments sells largest position for €250m (AltFi), Rated: A

The £1bn P2P Global Investments has sold one of its largest positions, in Castlehaven Finance, an Irish alternative development and bridging finance lender.

Castlehaven typically provides loans of between €1m – €20m in the property space, an increasingly big proportion of P2P GI’s portfolio.

The investment trust has provided financing in excess of €385m to Castlehaven since 2016.

What is the EU doing to understand if Artificial Intelligence apps are trustworthy? (Open Access Government), Rated: B

The University of Oxford received an immense £150 million donation to create a centre studying the ethics surrounding AI in the modern world, whilst global audiences continue to be fascinated by shows like Black Mirror which explore the worst-case consequences of AI accessing personal data.

The project is composed of three distinct, albeit related, parts, run in sequence from January 2019 to December 2020:

Part 1: Application of AI for risk management in bank and peer to peer lending

Part 2: Application of AI for risk management in financial investments and robot advisory

Part 3: Application of AI for risk management in blockchain payments and crypto assets

International

Binance Launches Crypto Lending Service (CryptoGlobe), Rated: AAA

Binance has launched a lending service allowing its users to earn cryptocurrency without trading, in a passive way. Currently the service is open for only a few tokens – its Binance Coin (BNB), Tether’s USDT stablecoin, and Ethereum Classic (ETC). Annualized interest rates are of 15% for BNB, 10% for USDT, and 7& for ETC.

Alternative Finance is Experiencing an Unprecedented Boom Worldwide (Crowdfund Insider), Rated: A

Ten years after the financial crisis, Alternative Finance continues to exhibit strong growth. The sector is estimated to account for nearly €300 billion of inflows worldwide, a market exhibiting 25% annual growth and largely dominated by the Chinese (75%), which percentage was already recorded in 2015 by a study conducted jointly by KPMG and the University of Cambridge.

The United States takes second place with 19% of the market, while Europe currently represents just 6%, 60% of which comes from the United Kingdom. In France, alternative finance raised €1.4 billion in 2018, a year-on-year increase of 39% according to the annual report of KPMG and the non-profit group Financement Participatif France (FPF).

The latest crowdfunding trend is in real estate (Born2Invest), Rated: A

The global crowdfunding market is estimated to be expanding from 2018 to 2022 to $89.72 billion. From the first recorded successful crowdfunding in 1997, to how the first dedicated crowdfunding platform ArtistShare had come about in the year 2000,  crowdfunding has indeed disrupted many industries in different levels.

How and why the global centre of cryptocurrency moved back to Asia (Finder), Rated: A

The problem of investment scammers is much bigger than cryptocurrency though, Wong pointed out, and much bigger than Invest: Asia.

“I don’t think Invest: Asia is big enough to move the needle if you’re running a scam in China,” he said. “That just speaks to the size of the population in China. In general, I think there’s lots of financial scams in general in China, right? For example, a couple years ago there was a big peer to peer lending scandal.”

“The peer to peer lending was legitimately becoming a hot growth FinTech sector in China, but then people were running these peer to peer scams. Because it was so hot, everyone’s talking about it. It creates the conditions for scammers to launch whatever scheme that they want to launch.”

Australia/New Zealand

Prospa Full Year 2019 Results (Scoop), Rated: AAA

• FY19 loan originations of $501.7 million up 36.6% on the prior year (FY18: $367.3 million), 3.1% ahead of prospectus forecast.
• FY19 revenue of $136.4 million up 31.2% on the prior year (FY18: $104.0 million), in line with prospectus forecast.
• FY19 pro forma EBITDA of $6.8 million, ahead of prospectus forecast by 11.5%.
• Prospa has now delivered approximately $1.2 billion in loans since inception and total customer numbers in Australia and New Zealand grew to over 20,000 in FY19, up 58% on the prior year.
• Customer satisfaction remains consistently high, with Prospa’s annual average Net Promoter Score in excess of +77 in 2019. Prospa also has a rating of 9.8/10 on independent review platform TrustPilot.
• Business expansion has continued with the successful launch of new cash flow products and services and diversification into New Zealand.
• Further investment in executive strength, with new Chief Technology Officer, Chief Commercial Officer and Executive General Manager, Growth Channels appointed.

2019 Finder Awards winners (Finder), Rated: AAA

The 2019 Finder Awards recognise the market’s most competitive offerings across credit cards, home loans, personal loans, car insurance, banking, insurance, technology and superannuation.

Source: Finder
Source: Finder
Source: Finder
Source: Finder
Source: Up Bank
India

What future trends do you foresee in the startup ecosystem? (New India Express), Rated: AAA

P2P lending has also become increasingly popular as an alternative lending route as small businesses find it easier to obtain loans directly from other individuals. Going forward, we can expect more cloud-based services backed by advanced analytics that offer personalized loan limits and payback schedules, based on the borrower’s credit history.

Traditional players will also get into online lending and emulate the strategies of P2P lending companies. More businesses will start adopting work-from-home policies to increase cost savings and productivity. On the tech front, businesses will start investing more in AI and analytics to get a deeper insight into customer behaviour.

– Kewal Kapoor, director and creative strategist of CHAI Kreative and Return of Million Smiles  

Xiaomi is moving into India’s consumer-lending market (Business Insider), Rated: A

The fourth-largest mobile phone vendor plans to launch a consumer-lending business, dubbed Mi Credit, in India in the next few weeks, according to Reuters. It will offer loans of up to 100,000 rupees ($1,451), with interest rates starting at 1.8%.

Xiaomi is positioned as a leading smartphone manufacturer in India, with 70 million mobile phones in use throughout the country. It already launched its payment app, dubbed Mi Pay, in the country in March, which is reportedly “doing well,” per Reuters. For context, in China, Xiaomi’s lending business shows a loan book worth $8 billion.

Source: Business Insider

Furniture rental startup RentoMojo to raise Rs 27.7 Cr led by Samsung VC arm (YourStory), Rated: B

In July 2019, the company secured Rs 1.16 crore from Renaud Laplanche, the Co-founder and CEO of Upgrade, who earlier participated in the startup’s Series C funding round of Rs 77 crore in May, along with Accel Partners, Chiratae Ventures, IDG Ventures, and Bain Capital. At that time, the startup said the funds will be used for accelerating its growth and expansion to new cities.

Canada

IOU Financial Inc. Releases Financial Results for the Three and Six- Month Period Ended June 30, 2019 (PR Newswire), Rated: AAA

  • Loan originations increased 31.8% to US$38.5 million in Q2 2019 compared to Q2 2018.
  • Total loans under management increased 36.4% to $101.0 million as at June 30, 2019 compared to the same period in 2018.
  • Adjusted gross revenue increased 25.1% to $5.5 million in Q2 2019 compared to Q2 2018.
  • Adjusted Operating Expense Ratio decreased to 10.0% in Q2 2019 compared to 11.9% in Q2 2018.
  • Adjusted net earnings amounted to $0.3 million in the second quarter of 2019, representing the sixth consecutive profitable quarter. Adjusted net earnings amounted to $0.8 million year-to-date.
Africa

Why and how peer-to-peer lending had to become market place lending (Business Live), Rated: AAA

The linked dangers of an inverted yield curve and a slowing economy have hammered banks stocks in recent months, and profit margins are already compressing. But the banks’ worries pale in comparison to challenges confronting the peer-to-peer or “market place” lenders — the start-ups that have set out, over the past decade or so, to upturn the banking industry.

Authors:

George Popescu
Allen Taylor

The post Thursday August 29 2019, Weekly News Digest appeared first on Lending Times.

Thursday August 22 2019, Weekly News Digest

Funding Circle loan originations

News Comments Today’s main news: Better.com raises $160M. Funding Circle passes $10B in global small business lending. Numbrs Personal Finance achieves unicorn status. Tala raises $110M, expanding into India. LendingKart raises $2.95M. Today’s main analysis: LendingTree Personal Loan Report–July 2019. Today’s thought-provoking articles: Slack’s direct listing and the future of security tokens. Is Funding Circle […]

The post Thursday August 22 2019, Weekly News Digest appeared first on Lending Times.

Funding Circle loan originations

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Better.com Closes Series C at $ 160 Million (BusinessWire), Rated: AAA

Better.com, one of the fastest-growing homeownership platforms in the country, today closed its Series C fundraise at $160 million, bringing the company’s total funding to $254 million to date. Activant Capital, Ping An Global Voyager Fund, Ally Financial, Citi, AGNC, Healthcare of Ontario Pension Plan (HOOPP) and American Express Ventures joined existing shareholders Goldman Sachs, Pine Brook, and Kleiner Perkins in the round.

The new investment round comes amid a period of tremendous growth for the fin-tech disruptor: Better.com has grown 3x year-over-year and is currently funding $375 million in mortgages a month. This puts the company on track to lend over $4 billion in 2019. Better.com also funded $1 billion of loans in Q2 of this year alone, more than in all of 2016 and 2017 combined.

LendingTree Personal Loan Offers Report – July 2019 (LendingTree), Rated: AAA

The most common reasons for seeking a personal loan are credit card refinancing and debt consolidationThese two categories comprise 67% of loan inquiries in July.

Source: LendingTree

Slack’s Direct Listing: The Non-IPO Threat to Wall Street and its Future in Security Tokens (Global Banking Finance Review), Rated: AAA

Removing the middleman through security tokenization also means democratizing access to investment opportunities. By breaking up large assets into individual tokens, exclusive investment opportunities that would otherwise be reserved for the super-rich are opened up. Essentially, security tokenization is doing to private investments what peer-to-peer lending has done to private lending by removing the lock-up, liquidity, and the lower minimum investment involved in traditional venture capital and private equity investing.

As well as tokenized VC investing, it is also becoming possible for a small investor to buy a stake in luxury assets such as a multi-million dollar Manhattan apartment, or a share in a new blockbuster movie or a hit album.

Elevate Credit Issues Quarterly Earnings Results (Mayfield Recorder), Rated: A

Elevate Credit (NYSE:ELVT) released its quarterly earnings results on Monday, July 29th. The company reported $0.13 earnings per share for the quarter, beating analysts’ consensus estimates of $0.07 by $0.06, Briefing.com reports. The business had revenue of $177.76 million for the quarter, compared to the consensus estimate of $187.48 million. Elevate Credit had a net margin of 2.45% and a return on equity of 19.19%. Elevate Credit’s revenue for the quarter was down 3.6% on a year-over-year basis. During the same quarter last year, the firm earned $0.07 EPS. Elevate Credit updated its FY 2019 guidance to $0.55-0.65 EPS and its FY19 guidance to $0.55-0.65 EPS.

Reliant Funding Celebrates Seven Years on the Inc. 5000 (PR Newswire), Rated: A

Today, Inc. magazine revealed that Reliant Funding is number 3,838 on its annual Inc. 5000 list, the most prestigious ranking of the nation’s fastest-growing private companies. The list represents a unique look at the most successful companies within the American economy’s most dynamic segment—its independent small businesses. This is Reliant Funding’s seventh consecutive year the Inc. 5000.

Eisman slams Zillow; US Consumer Mixed; 30-Yr Hits Record (PeerIQ), Rated: A

A year ago the prevailing view was the era of low rates was over. We find ourselves now testing record low 30-year US Treasury yields, and potential issuance of 50-year and 100-year bonds. Mohammed El-Erian is raising the concern that with the panic headlines we might be talking ourselves into a recession.

Steve Eisman, famed for shorting subprime mortgages, took a direct shot at Zillow’s new business model. We highlight the excerpt of Steve’s comments, particularly as a number of FinTechs are entering the market for intermediating residential homes:

Zillow has one of the most flawed business models I’ve seen in a very, very long time.

The part of it I find the most problematic is what they call, I believe, their iHome business, their internet buying business, where they actually go out and buy homes and flip them. I actually think the company doesn’t understand the real risks of this business, which are massive.

Is Real Estate Crowdfunding a Good Investment? (Lifehacker), Rated: A

Ask a rich person how they got rich, and there’s a good chance they’ll say they invested in real estate. In fact, real estate is generally accepted as one of the most solid ways to build wealth.

“It’s not only about access, but also the size of some of these transactions. The average consumer can’t buy a $10 million building, however they can take on a $100 share of it.”

What it costs to make money with real estate investing

For example, CrowdStreet requires a minimum investment of $10,000 for a minimum 36 months, but doesn’t charge account fees. Fundrise lets you get started with $500, but charges a fee of 1% per year, which is relatively steep compared to fees for roboadvisors, which tend to be around 0.25% to 0.60%.

Joseph Hogue of My Stock Market Basics examined average returns on real estate crowdfunding platforms: Open investments had a return of around 14.7%, with completed deals averaging 14.6%.

Fund That Flip raises $ 11 million in growth financing from Edison Partners (Finextra), Rated: A

Fund That Flip, an award-winning fintech platform and marketplace lender of residential real estate loans, today announced a raise of $11 million from Princeton, NJ.-based growth equity firm Edison Partners.

After origination, Fund That Flip offers accredited and institutional investors the opportunity to purchase fractional shares of the loan and earn an 8%-9% annualized yield.

3G Capital Advisors Facilitates $ 179.2 Million in Freddie Mac Loans Between Greystone and Watermark J&L Partners (Yahoo! Finance), Rated: A

3G Capital Advisors, LLC, a boutique real estate advisory firm focused on developing creative capital solutions for its partners, announced today the closing of $179.2 million in permanent financing for Watermark J&L Partners, LLC originated through Greystone and provided by Freddie Mac. The loans will refinance a portfolio of four multifamily communities with a total of 1,188 units in Arkansas, Colorado and Texas.

The 50 Most Expensive Towns in America (LendingTree), Rated: AAA

To take a look at how expensive town life can get, LendingTree, the nation’s largest online loan marketplace, ranked the 50 towns in the United States with the most expensive median home values. Our study also looks at the median income in these towns to determine how attainable homeownership is for the average person living there. What we found: The towns with the most expensive home prices are unaffordable to median income earners who live in those areas.

Key findings

  • Vineyard Haven, Mass., Summit Park, Utah, and Breckenridge, Colo., are the three most expensive towns in the country. Each of these towns is known for its proximity to natural features like mountain ranges or the ocean. While high levels of wealth tend to pool in these towns, the majority from these areas make an income well under the national household average.
  • The majority of the towns featured in this study are unaffordable for the median income earner living in them. Both renting and owning a home are out of reach for median income earners in 42 of the 50 towns looked at in this study. This suggests that many people who work in the towns featured in these studies don’t necessarily live there, and instead commute.
  • As our study makes clear, living in a small town does not necessarily make the cost of living more affordable. Many people living in the towns featured in our study would have an easier time affording a home in a major metropolitan area than in their current area. That being said, some of these towns are still relatively affordable like Los Alamos, N.M. or Gillette, Wyo.
Source: LendingTree

The Apple Card’s best feature is also its biggest flaw (Business Insider), Rated: A

But that’s also the Apple Card’s biggest hindrance. Sure, having a credit card that lives on your phone in a digital wallet is ideal for convenience and security. Yet it also makes the experience of using the Apple Card more limiting than other options, especially when it comes to paying your balance, managing your card, and the rewards you get.

Silvergate Bank Announces A Crypto Lending Service In IPO Filing (Coin Revolution), Rated: A

Silvergate is the leading financial services provider for top Crypto exchange companies such as Xapo, Bitstamp, and Coinbase. The latest report indicates that the bank intends to roll out Crypto lending services.

Planning for LendIt Fintech USA 2020 is Underway (Lend Academy), Rated: A

LendIt Fintech USA will be held in New York City on May 13-14 next year at the Javits Center.

  • The Small Business Fintech Ecosystem
  • Revolution at the Point of Sale
  • New Approaches to Capital for Growth Businesses
  • Digital Banking Goes Mainstream
  • New Systems for Identity and Trust
  • Applying Fintech to Financial Wellness

Fintech Takeover Spending Hits Record Levels on 2019’s Megadeals (Bloomberg Law), Rated: A

Three blockbuster deals for financial-technology companies pushed takeover spending to a record $120 billion in the first half of the year as bidders targeted payments firms, according to research from consulting firm Hampleton Partners.

Ohio College Graduates Struggle With Rising Student Debt (CityBeat), Rated: A

Welcome to Ohio, where the average student debt is $28,947, according to a new study by LendEDU, an online student loans marketplace. Ohio’s average student loan debt is smack dab in the middle of the state-by-state rankings, with average student debt ranging from $19,742 in Utah to $38,776 in Connecticut.

About 58 percent of all students graduating from a four-year college or university in Ohio and the U.S. received a student loan to finance their education.

Futures Brokerage Capital Trading Group Announces Launch of Managed Futures Podcast (PR Web), Rated: B

Capital Trading Group, LP (“CTG”), an investment firm specializing in execution and account management for commodity trading advisors, has announced the release of its new Managed Futures Podcast hosted by firm principal and alternative investments specialist, Nell Sloane.

United Kingdom

Funding Circle Surpasses $ 10 Billion Lent to Small Businesses Globally (BusinessWire), Rated: AAA

Funding Circle, the leading small business loans platform in the UK, US, Germany and the Netherlands, today announced that investors have lent more than $10 billion to small businesses globally through its platform. Achieving this milestone in less than a decade, Funding Circle has proven that its model has become the preferred option for small business funding that fuels economic growth ⁠— with every $1 lent to a small business through Funding Circle in 2018 contributing $2 to GDP, according to Oxford Economics.

Source: Funding Circle

Is Funding Circle Holdings Using Debt In A Risky Way? (Yahoo! Finance), Rated: AAA

The image below, which you can click on for greater detail, shows that at June 2019 Funding Circle Holdings had debt of UK£146.8m, up from none in one year. But it also has UK£449.9m in cash to offset that, meaning it has UK£303.1m net cash.

Source: Yahoo! Finance

Zooming in on the latest balance sheet data, we can see that Funding Circle Holdings had liabilities of UK£180.2m due within 12 months and liabilities of UK£19.3m due beyond that. On the other hand, it had cash of UK£449.9m and UK£14.9m worth of receivables due within a year. So it actually has UK£265.3m more liquid assets than total liabilities.

ThinCats to lend £400m to growth companies by end-2020 (Growth Business), Rated: A

ThinCats, the growth-business lender, wants to be lending £400m a year to cash-starved scale-up companies by the end of 2020.

Welsh Delio secures £3.3m equity round (Fintech Futures), Rated: A

UK-based private asset infrastructure service, Delio, has secured £3.3 million in an equity investment round led by Maven Capital Partners, which will purport the company into markets across Asia, the Middle East and North America.

UK tech firms attract record £5.5bn in foreign investment (P2P Finance News), Rated: A

THE UK’S tech sector has attracted $6.7bn (£5.5bn) in foreign investment this year so far, which is more than the whole of 2018.

During the second quarter of 2019 more than $1.9bn came via investment deals valued at $100m or more.

Aprao launches development appraisal tool (PlaceTech), Rated: B

London-based startup Aprao has released a beta version of its development appraisal tool to 650 companies.

Aprao currently partners with property marketplace LendInvest, developer Careys New Homes, and design house Fusion to help further develop the technology.

New P2P entrants have a ‘second move advantage’ (P2P Finance News), Rated: A

If an industry as new as P2P can have legacy issues, there’s clearly a ‘second move advantage’ for new potential entrants who have an opportunity to build systems and processes ready for the new Financial Conduct Authority (FCA) rules:

  • SMCR – the new governance rules are not just about assigning responsibility to individuals.
  • Three lines of defence – will you need a dedicated compliance function? risk? internal audit?
  • Recovery and resolution plans – we’re in discussions with a number of potential new entrants who are at the very early stages of their IT planning.
  • Appropriateness tests – whilst incumbent firms are progressing with their plans to comply with the requirements, it is far easier to build the process from scratch – and price it in to the strategy.

Existing players continue to hit new milestones (such as Funding Circle’s $10bn announced this month), and secure increased funding.

How banking-as-a-service (BaaS) works and industry outlook (Business Insider), Rated: A

In the UK, the new revenue potential generated through open banking-enabled small- and medium-sized business and retail customer propositions was £500 million ($700 million) in 2018, per PwC — and Business Insider Intelligence expects that to grow at a 25% compound annual growth rate to reach £1.9 billion ($2 billion) by 2024.

European Union

Swiss Fintech Startup Becomes a $ 1 Billion Unicorn (Bloomberg), Rated: AAA

Numbrs Personal Finance raised $40 million to bring the total capital invested to almost $200 million, Chief Executive Officer Martin Saidler said in an interview. Numbrs offers an app that enables users to manage their existing bank accounts in one place and to buy financial products.

Lendable launches Luxembourg fund with Credit Suisse (AltFi), Rated: A

Lendable has launched its first Luxembourg-based fund initially providing up to £225m of financing into the UK consumer market.

The consumer lender set up the fund alongside Credit Suisse, with the pair raising capital from 10 unnamed investors across seven geographies over a three-year investment period.

Events for every P2P professional’s calendar in 2019 (P2P Finance News), Rated: A

LendIt Fintech Europe 2019

Dates: 26-27 September 2019

et 15 per cent off on your tickets with the discount code P2PFN15%.

Register at www.lendit.com

MoneyLIVE: Lending 2019

Date: 2 October 2019

Open Banking Expo

Date: 13 November 2019

Brocc raises Debt Financing from Goldman Sachs (MyNewsDesk), Rated: B

Brocc, a Swedish company specialized in P2P Consumer Lending, has raised funding from Goldman Sachs Private Capital (“Goldman Sachs”). Brocc intends to use this financing to issue consumer loans, allowing consumers to consolidate existing debts at lower rates.

International

Tala, A Digital Lending Startup, Raises $ 110M, Eyes India For Expansion (Crunchbase), Rated: AAA

To help over three billion underbanked adults have a chance at a loan, Tala has raised $110 million in a Series D round led by RPS.

The company currently has 500 employees across locations in Southern California, Kenya, Mexico, the Philippines, and India. The new money will be used to expand its India presence, as well offer new services. To date, Tala has raised $219.4 million in funding from investors like Revolution, Institutional Venture Partners, and PayPal Ventures.

Australia

Harmoney earmarks new CEO for NZ, Australian growth (NBR), Rated: AAA

Australasia’s largest marketplace lender is meeting a rapid pace of growth by ushering financial services leader David Stevens into the business from September 1, 2019. Stevens steps into the CEO role in early 2020, a transition that will free Harmoney’s founder and current CEO Neil Roberts to focus on strategy and product as the platform continues to innovate and lead across both markets.

India

Lendingkart Secures $ 2.95M From Sistema Asia Fund (PYMNTS), Rated: AAA

Indian startup Lendingkart announced that it has raised $2.95 million in new funding from Sistema Asia Fund.

The investment comes days after the company raised $30 million in a Series D financing round led by existing investors including Fullerton Financial Holdings, Bertelsmann India Investments and India Quotient. The total funds raised by LendkingKart is now at $146 million.

These are the top challenges faced by MSMEs, the growth drivers of Indian economy (Money Control), Rated: A

More than 500 Lakhs MSMEs exist currently and over the last 5 decades in India. This SME sector has grown dynamically contributing 45 percent of India’s GDP according to ‘Micro Merchant Market Sizing and Profiling Report’ which also shows it provides employment to around 46 crores people in India and is growing at a fast rate of 11.5 percent every year.

Business Loan Application Process: Explained (Ziploan), Rated: A

There are many aspects of the business that needs to be handled by a small business owner when he runs a business. As a small business owner, he doesn’t have resources to waste. But he needs to the optimal performance of every resource/department, so that cost of production is kept at a minimal level. And the profits are also enhanced. But when an individual multi-tasks and handles various functions all by himself, there are chances that some aspects of the business may miss his attention.

Asia

A recent study by the Singapore Fintech Association (SFA) and PwC said that 94% of fintech companies are eyeing workforce expansions over the next 12 months, with 28% expecting to double their employee numbers in the next three years.

Notable Singaporean fintech firms include digital insurer Singapore Life, remittance company InstaRem, and peer-to-peer lending platform Validus. The latter two companies are backed by Vertex Ventures, a venture capital firm under Temasek Holdings, Singapore’s sovereign wealth fund.

In order to provide an easy and universal assessment of creditworthiness for small medium enterprises (SMEs), CTOS Data Systems Sdn Bhd recently launched the CTOS SME Score.

CURRENTLY, there are almost a million SMEs in Malaysia contributing 37% to the national GDP. This figure is expected to rise to 41% by 2020.

SMEs also make up 98% of local businesses and create employment for two-thirds of all working Malaysians.

MENA

With 2,000 applications, Israel fintech regulator eyes licensing changes (CoinGeek), Rated: AAA

The Israeli Capital Market Authority is seeking to make changes to its licensing regime in order to encourage competition and grow the financial technology (fintech) industry in the country. According to a report by local daily Calcalist, the regulator has established dedicated teams that will specialize in blockchain and other emerging financial technology.

Authors:

George Popescu
Allen Taylor

The post Thursday August 22 2019, Weekly News Digest appeared first on Lending Times.

Thursday July 25 2019, Weekly News Digest

marketplace lending

News Comments Today’s main news: Equifax to pay up to $700M in data breach settlement. MoneyLion raises $160M. Monzo, Starling win top rankings among banking apps. Harmoney makes maiden profit. Today’s main analysis: Peter Renton’s quarterly MPL results – Q1 2019 (A MUST-READ). Today’s thought-provoking articles: Metro areas with the biggest jump in private million-dollar […]

The post Thursday July 25 2019, Weekly News Digest appeared first on Lending Times.

marketplace lending

News Comments

United States

United Kingdom

Internationnal

European Union

Other

News Summary

United States

Equifax will pay up to $ 700 million to settle data breach lawsuits (CBS News), Rated: AAA

Equifax will pay up to $700 million to settle with the Federal Trade Commission and others over the massive 2017 data breach that exposed the private data of nearly 150 million people. Consumers are eligible to claim as much as $20,000 in cash payments, the FTC said.

The proposed settlement with the Consumer Financial Protection Bureau, if approved by the federal district court Northern District of Georgia, will provide up to $425 million in monetary relief to consumers, a $100 million civil money penalty, and other relief.

MoneyLion Announces $ 160M in Funding  (Finanzen), Rated: AAA

MoneyLion today announced $160 million in funding — $60 million in previously unannounced financing and a $100 million Series C funding round.

The round was co-led by Edison Partners and Greenspring Associates and included strategic investment from Capital One, a diversified bank that offers a broad array of financial products and services to over 45 million consumers. The round also included investment from MetaBank and FinTech Collective. Upon completion of the Series C round, the company will have raised over $200 million in equity financing.

OnDeck Taps Bank Veteran to Lead ODX Sales and Strategy (OnDeck), Rated: A

OnDeck today announced the appointment of Lonnie Hayes as the Head of Sales and Strategy for ODX, a wholly owned subsidiary of OnDeck that assists banks with streamlining and digitizing small business credit origination.

My Quarterly Marketplace Lending Results – Q1 2019 (Lend Academy), Rated: AAA

My overall returns for the twelve months ending March 31, 2019 was 6.09%. This is up from 5.35% that I reported in Q4 and 4.77% in Q3. My original six LendingClub and Prosper accounts had another full percentage point jump. Last quarter I reported the returns on those six accounts had jumped from 3.19% in Q3 to 4.16% in Q4. We see this quarter they are at 5.18%. This is quite a remarkable turnaround and while I still think 5% is not a high enough return for unsecured consumer lending, it is certainly moving in the right direction.

Source: Lend Academy

Metros With the Biggest Jump in Private Million-Dollar Businesses (LendingTree), Rated: AAA

  • Austin, Texas topped the list with a 15.1% increase in privately held companies surpassing $1 million in revenue between 2014 and 2016. The number of Austin firms in that category rose by 1,857.
  • Jacksonville, Fla. and Riverside, Calif. came in a nose behind, with an increase just under 15%. The number of firms rose by 963 and 2,359, respectively.
  • Buffalo, N.Y. was the only metro on our list to lose businesses with seven figure revenues: The city in upstate New York was down by four such firms, a reduction of 0.1%.
  • Baltimore and Oklahoma City made the smallest gains, at just over 1%, or 187 and 117 businesses, respectively.
  • Los Angeles had the largest number of firms to pass the million-dollar mark – 6,664 – followed closely by New York at 6,568. Those large numbers represent increases of almost 8% and 5.2%, respectively, leaving them in the 16th and 29th spots on the list.

Lendio Marries SMB Loan Management With Accounting (PYMNTS), Rated: A

Small business loan marketplace Lendio has announced the acquisition of bookkeeping software provider Billy.

press release Tuesday (July 23) said Lendio is rebranding Billy to Sunrise, a small business bookkeeping solution that integrates accounting, cash flow management, loan management and credit data into a single solution.

How AI can advance the cause of fair lending (American Banker), Rated: A

The rightful prohibition of ZIP codes in underwriting is one example of how financial regulators ensure fairness by protecting against discriminatory lending. But the increasing reliance on artificial intelligence and machine learning, or “automated insights” as I prefer to call it, has made testing a wide variety of inputs for specific outcomes a sophisticated, scientific process carried out by companies. Lawmakers should consider these varied new data options when they evaluate machine learning during a hearing later this week.

Aura Closes $ 28.7 Million Expansion Loan from Angel Island Capital (Business Wire), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, today announced it has closed $28.7 million in residual debt financing from Angel Island Capital (“AIC”) to help the company grow and keep pace with the demand for its loans.

Drip Capital raises $ 25 mn from Accel, Sequoia (IBS Intelligence), Rated:
A

Drip Capital, a technology-enabled cross border trade financier, has raised $25 million in Series B funding from investors led by Accel Partners. Existing investors Sequoia Capital, Wing VC and Y Combinator also participated in the round.

More options to save on student loans at Credible (Credible), Rated: A

With Ascent and MEFA on board, Credible’s student loan marketplace now provides access to eight lenders, including traditional banks, online lenders, and state student loan authorities.

This is how fintech solutions are speeding up mortgage closing times (Housingwire), Rated: A

Financial technology is transforming the mortgage industry by making the origination process more convenient and secure for borrowers.

In 2018, BOK began leveraging Roostify’s digital platform to provide its customers a secure way to upload, send and receive loan documents remotely.

Financial services newcomer Cross River blurs line between fintech, banking (ROI), Rated: A

Few would expect it was a good idea to start a bank right as the recession raged a decade ago.

Fewer still would say any bankers eager to do that, as Cross River Bank did, would go on to become one of the state’s most impressive growth stories.

Fitch Ratings: Questions Increase Around Fringe Players in U.S. ABS (ABL Advisor), Rated: A

While U.S. core ABS performance remains strong due largely to low unemployment, many investors are zeroing in their questions on some of the sector’s non-core assets, according to Fitch Ratings in its 2019 Virtual Investor Video Series for structured finance.

Should fintechs be regulated like banks? (BAI.org), Rated: A

According to the U.S. Treasury report, more than 3,330 new technology-based financial services industry were founded from 2010 to the third quarter of 2017, creating industry investment worth more than $22 billion: a thirteen-fold increase since 2010. Lending by these firms now makes up more than 36 percent of all U.S. personal loans, up from less than 1 percent in 2010.

Examples of Financial Services Business Ideas (Entrepreneur), Rated: A

If you’re financially savvy, you can start your own peer-to-peer lending business. This is when you give small amounts of money to a business or private person, while collecting interest on the returns. Before you start lending out money, here is a successful business you can learn some strategies from:

Business Name: RainFin

Website: 

Established date: 2012

About the business:

RainFin offers an online marketplace that enables borrowers to access affordable debt capital and investors to access new asset classes. RainFin is a registered credit provider and aims to remove traditional costs and barriers for borrowers and investors through innovative technology, designed to create a transparent and fair marketplace.

NASAA Warning on Initial Loan Procurements: “Crowdfunding Meets Blockchain” (Crowdfund Insider), Rated: A

NASAA describes initial loan procurements as a crowdfunding method that allows borrowers and creditors to enter into loan agreements through legally binding smart contracts stored on the blockchain.

To quote NASAA:

“Companies using blockchain technology need to raise capital just like any other company. One way these companies accomplish that is through initial coin offerings (ICOs), which require the new company to create tokens that can be sold to investors and used for the development of new projects. An alternative fundraising method is catching the interest of investors. Initial loan procurements allow companies to raise capital without the added burden of creating tokens.”

Examples of Online Business Ideas (Entrepreneur), Rated: A

Online real estate investing platforms now exist, and they enable anyone to invest a percentage into a property instead of the whole amount. If you have the right skills, you can start your own online business.

Before you launch your business, learn a few strategies from this example of an online business:

Business Name: Real Estate Crowdfunding

Website: 

About the business:

Real Estate Crowdfunding offers its clients lower fees, the option to invest in a development nearby and transparency, which enables their customers to find out more about projects before investing.

Mynd Property Management Acquires HomeUnion, a Real Estate Investing Portal (Yahoo! Finance), Rated: B

Mynd Property Management, a modern property management company powered by on-the-ground experts and technology, has acquired HomeUnion, a company that enables investing in small residential properties in 20 U.S. markets. The acquisition comes on the heels of Mynd’s recent merger with RentVest, which doubled Mynd’s property management footprint to more than 8,000 small residential rental units in a total of 16 markets.

Pennsylvania Attorney General Josh Shapiro announced a settlement with Think Finance, a payday lender that has targeted nearly 80,000 Pennsylvanians.
United Kingdom

Monzo and Starling took first and second place in a ranking of banking apps (Business Insider), Rated: AAA

UK-based Monzo has taken the top spot in a ranking of bank apps by MoneySavingExpert.com, beating out both peers and incumbents, The Irish News reports. Seventy-eight percent of the consumers surveyed said the neobank’s app had plenty of features and strong usability.

Competing neobank Starling picked up second place, with 70% of consumers approving of its app’s features and usability. The rest of the top five was rounded out by Barclays (57%), Lloyds Bank (49%), and NatWest (47%).

Source: Business Insider

Lord Myners heaps further pressure on FCA over Lendy failings (P2P Finance News), Rated: A

FORMER City minister Lord Myners is keeping the pressure on the Financial Conduct Authority over its decision to authorise now-collapsed peer-to-peer lending platform Lendy.

A series of written parliamentary questions show Lord Myners is seeking answers on whether better regulation is needed and the creditor status of Lendy investors.

Lessons from Lendy (Brismo), Rated: A

– History of troubled lender shows the importance of independent verification of credit performance
– This is not a function the regulator can reasonably be expected to undertake
– Marketplace lending will fail to access deep pools of funding until these lessons are learned

Innovate Finance expands national network with three regions added (ComputerWeekly), Rated: A

Last week Innovate Finance announced the addition of Fintech Northern Ireland, Fintech Wales and Fintech West to the national network.

Growth Street pledges £75m overdraft funding for East Anglia (P2P Finance News), Rated: A

GROWTH Street has pledged to commit £75m of overdraft-style financing to small- and medium-sized enterprises (SMEs) in East Anglia.

The peer-to-peer business lender, which provides a revolving credit facility for borrowers, said it is already 10 per cent towards its target having lent £7.5m in the region.

Is Short-Term Financing Right For Your Business? (Nav), Rated: A

If you need a short-term capital boost, there are a number of options available to you. Here are a few short-term financing examples that you may want to consider.

Superdry collaborating with Klarna (Fibre2Fashion), Rated: B

British contemporary fashion brand Superdry and leading payments provider Klarna have entered into a collaboration, enabled by Adyen. Superdry customers can now use the Pay later or Pay in 3 in the UK, and later this month will be able to Pay in 4 in the US. This will make everything from jackets to jeans more accessible to Superdry customers globally.

OakNorth completes £11.4m loan to Ocea for major new residential development in Redhill, Surrey (Fintech Finance), Rated: B

LendInvest boosts business development team with new hires (P2P Finance News), Rated: B

Nigel Robbins has joined LendInvest from specialist mortgage lender Magellan to source deals across the South West of England.

European Union

In-house marketing at Klarna: Interview with Elin Svahn (BannerFlow), Rated: AAA

In-house marketing is transforming the industry. It is a movement rising in popularity year on year, with over 91% of European decision-makers moving operations in-house.

How do you structure your in-house marketing at Klarna?

When I started, Klarna was in the process of a complete restructuring of their in-house operations. The brand was divided into many separate domains, with different teams having different priorities, and ‘issues’ to solve.

Today, we have four marketing domains: Branding, Merchant Aquisition and Growth, Communications and PR, Consumer Growth and Loyalty. Within each of these domains, we have different competencies. So for example, within the Branding domain, we have a mix of marketers, designers, and copywriters.

AdviceRobo has launched an open banking capability for lenders (Business Insider), Rated: A

AdviceRobo focuses on offering credit risk management solutions, and its latest API product enables lenders to categorize transactional data and predict defaults to make sound credit decisions.

The Netherlands-based fintech’s new API, dubbed CatRobo, is powered by PSD2 — a regulation that came into effect in January 2018 forcing banks to open up their data to third-parties.

Here’s what it means: The API will help lenders make better use of their data, better compete with alt lenders, and lend out more cash to underserved consumers.

Source: Business Insider
International

Justin Sun denied reports that he had postponed a charity lunch with the investing guru after attracting regulatory scrutiny. In China, where executives sometimes vanish, such reports are not unusual.

Embedded finance, or why fintech mega VC rounds have become so common (TechCrunch), Rated: A

This morning, it was personalized banking app MoneyLion,  which raised $100 million at a near unicorn valuation. Last week, it was N26, which raised another $170 million on top of its $300 million round earlier this yearBrex raised another $100 million last month on top of its $125 million Series C from late last year. Meanwhile, companies like payments platform Stripesavings and investment platform Raisintraveler lender Uplift, mortgage backers Blend and Better, and savings depositor Acorns have also raised massive new rounds this year.

Cryptocurrency loan site YouHodler exposed unencrypted user credit cards and transactions (TechCrunch), Rated: A

A cryptocurrency loan startup exposed reams of customer credit cards and user transactions for almost a month — because it forgot to protect the server with a password.

Security researchers Noam Rotem and Ran Locar found the database belonging to YouHodler, a lending platform designed for cryptocurrency, which claims to have processed $10 million in loans to more than 3,500 customers.

The database contained 86 million lines of daily updating records of the lending platform, containing streams of logs and computer commands based on users’ interactions on the front-end website. That also included sensitive information such as every time a transaction or a loan went through.

Source: TechCrunch

Crypto Lending Market ‘Continues to Experience Sustained Growth’ (CryptoGlobe), Rated: A

In the Q2 2019 edition of its quarterly ‘Digital Asset Lending Snapshot’ report, Genesis Capital made several interesting observations:

  • At the end of Q2 2019, the total value of “active loans outstanding” was $452 million versus $181 million in Q1 2019, i.e. a quarter-over-quarter (QoQ) increase of 149%.
  • Originations went up 48% QoQ, which means that Genesis Capital has just experienced its fifth straight quarter of “strong growth.”
  • Genesis Capital has originated over $2.3 billion in “loans and borrows” since the business was launched in March 2018.
Source: CryptoGlobe

What Is DeFi? (Bitcoin Market Journal), Rated: A

DeFi platforms leverage smart contract technology to provide decentralized financial solutions, such as digital currency-based peer-to-peer lending, dollar-pegged stablecoins, or investable tokenized asset baskets. The existing DeFi market is still at an early stage so we can expect more decentralized financial services that operate on a permissionless, transparent, and efficient manner on the blockchain to materialize soon.

Decentralised Finance in a centralised world (Business Times), Rated: A

THE growth of global financial markets has created enormous wealth, especially benefitting a few players who are closely connected to the world’s main financial centres.

The centralised nature of the industry has enabled these powerful intermediaries to position themselves in the middle of the system and thus extract rents from other participants.

This oligopolistic structure has stifled competition and decreased efficiency, while increasing the cost of financial services.

Time for a rethink? (Securities Lending Times), Rated: A

David Lewis of FIS discusses the dip in the securities finance industry’s global revenues and explains the factors changing the dynamics of the industry

Finacity Facilitates the Addition of UK Entities to USD $ 115 Million Receivables Securitization (Virtual Strategy Magazine), Rated: A

Finacity Corporation (“Finacity”), a member of the Greensill family of companies, and DZ Bank AG Deutsche Zentral-Genossenschaftsbank (“DZ Bank”) announces the addition of Volt Information Sciences, Inc. (“Volt”) United Kingdom subsidiaries as sellers of receivables to Volt’s existing trade receivables securitization. The 2-year facility supported by Volt’s US and UK receivables allows for up to USD $115 million in funding with a $35 million sublimit for letters of credit.

Australia

Harmoney makes maiden profit (MSN), Rated: AAA

The company, which is partly owned by Heartland Bank (17 percent share) and Trade Me (15 percent), made a net profit of $7.2 million in the year ended in March, compared with a loss of $1.8m the year earlier.

Its revenue was up 25 percent to $32.9m, with net interest income of $728,000 – nearly 10 times more than the year before.

Why bank hybrids are far too expensive (Cuffelinks), Rated: AAA

Yield chasing has spilled into nearly every asset class, with Australian listed bank hybrids no exception. The current average margin of bank bills at +2.40% is close to the lowest level for at least seven years.

Source: Cuffelinks

Alternatives to bank hybrids

2. Marketplace lending

Institutional and retail investors can both access marketplace lending (also known as peer-to-peer lending) via a growing number of online platforms. There’s a mixture of residential and commercial property secured loans available, as well as unsecured business and personal loans. For more conservative investors, loans backed by residential property with an LVR of 60% or less typically yield 5-7%. Commercial property loans, business loans and personal loans usually come with higher yields. Investors in riskier loans should be expecting to lose a portion of their total return when some of the borrowers default and should set their return expectations accordingly.

India

India’s FinTech Cube Wealth expands asset management biz in UK, Hong Kong (IBS Intelligence), Rated: AAA

Cube Wealth, an Indian FinTech start-up for financial planning and wealth management, is entering the global markets in this quarter (July-September) of 2019. The plan is to set up a tech-enabled asset management company in the UK, Hong Kong and Switzerland to start with so that customers in those markets can get an access to some leading fund managers in the emerging markets, including India.

Southeast Asia

Hedge Funds Help Fuel Southeast Asia Consumer Lending Boom (Bloomberg), Rated: AAA

A small but rising number of hedge funds are being established to help finance the boom in online and peer-to-peer lending across Southeast Asia.

Pilgrim Asia Consumer Finance Fund, founded by Brian Yonghui Tan and Paul Sheng, aims to raise up to $20 million in its first year and generate a return for investors of around 8% per annum. It will charge a 2% management fee.

OJK Condemns Fintech Lender over Indecent Post of Debtor (Tempo), Rated: A

The Financial Services Authority (OJK) condemns fintech lender Incash for posting a photo of one of its debtors online, with captions saying she was willing to have sex for money so she could pay her debts to the online lender.

Authors:

George Popescu
Allen Taylor

The post Thursday July 25 2019, Weekly News Digest appeared first on Lending Times.

Monday June 18 2018, Daily News Digest

funding circle

News Comments Today’s main news: Opendoor secures $325M in financing. RateSetter IFISA tops 100M GBP. China Rapid Finance’s earnings call slides. Alior Bank, solarisBank, Raisin, Mastercard partner on European digital bank. Harmoney to lend through its own platform. Amazon launches lending platform in India. Today’s main analysis: Rising interest rates and inflation. Today’s thought-provoking articles: Is P2P lending dying? The economic […]

funding circle

News Comments

United States

United Kingdom

International

Australia/New Zealand

India

Other

News Summary

United States

Opendoor now has $ 325 million more. SoftBank could come next. (Recode) Rated: AAA

Opendoor has already taken out $1.5 billion in loans for home buying. And the company now says it has accepted another $325 million in new financing that values it at more than $2 billion, according to a person familiar with the matter.

Opendoor will expand to 50 cities with the $325 million round. But SoftBank, with its huge $100 billion checkbook, could help Opendoor expand to even more as soon as later this year. The Japanese investor typically invests hundreds of millions of dollars into private companies, and that sort of check would be expected here, though some of the money tends to buy out existing investors.

Rising Rates and Inflation (PeerIQ), Rated: AAA

The Fed raised interest rates for the 2nd time in 2018 and the target Federal Funds Rate now stands at 1.75% – 2%. The committee indicated that it would raise rates twice more in 2018, a departure from the previous stance of 3 rate hikes in 2018.

The Fed summarizes member views using the “dot-plot”. The dot plot consolidates every committee member’s estimates of rates at the end of 2018, 2019, 2020 and the for long-term. The green line shows the median estimate indicating that most Fed members expect rates to be between 2.25% – 2.5% at the end of 2018, and between 3% – 3.25% at the end of 2019.

Source: Federal Reserve, Bloomberg
Source: Bloomberg, PeerIQ

Forward Rates – Where do we go from here?

Source: Bloomberg, PeerIQ

Braviant Holdings Announces $ 50 Million Credit Facility with Keystone National Group (PR Newswire) Rated: A

Braviant Holdings, a provider of tech-enabled credit solutions for underserved Americans, has entered into a $50 million senior secured credit facility with institutional investment firm Keystone National Group.

The Keystone debt facility allows Braviant to expand its newly launched near prime lending platform, Chorus Credit. Chorus is Braviant’s latest offering in support of the company’s mission to promote financial inclusion for 51 million adults considered underbanked by the FDIC. While the FDIC estimates that these adults make up 19.9% of U.S. households, data from the Fair Isaac Corporation, better known as FICO, suggests that 43% of U.S. consumers have below 700 credit scores. In the traditional banking sector, a lower than average FICO score severely limits access to credit for almost half of the nation’s population. Chorus aims to close the credit gap for middle America by offering $2,500 to $10,000 personal loans that are repaid in small, affordable installments.

Is P2PLending Dying? (P2P Lending Expert) Rated: AAA

Seriously. I’m asking. Is p2plending dying? Returns have sucked the last couple of years for all investors, but especially us retail investors since the 2015 and 2016 vintages have performed so poorly. My own returns are 400-500 basis points lower than my returns on my 2013 and 2014 vintage loans were and I know some colleagues and friends who have lost money on these investments.

But can the industry survive?

Source: P2P Lending Expert

How Will the Fed’s Interest Rate Hike Impact the Average Joe? (Dough Roller) Rated: A

On Wednesday, The Federal Reserve decided it was going to increase the federal funds rate by 25 basis points, from 1.75% to 2%. This is the second rate increase already this year. In March, new chairman Jerome Powell and the Fed increased the federal funds rate from 1.5% to 1.75%. The Fed also indicated that they’d be targeting two more increases this year alone.

As I said before, when the Fed increases rates, it usually means something is going well for the economy. And all signs are pointing to that being the case. Unemployment is currently at 3.8%. In the last 50 years, unemployment has only been this low two times. That’s significant, and it means that more people are finding jobs. It may also signify a strengthening job market for you. The Fed projects unemployment will drop to 3.6 percent by the end of the year, too.

Zelle is on track to be more popular than Venmo in 2018 (Business Insider) Rated: A

Zelle is a year-old service that lets you instantly transfer money to someone else, much like Venmo or Square Cash.

But Zelle differs from either service in a major way: because it was built by seven of the largest US banks, it’s often able to integrate more seamlessly with your bank’s mobile app. While other services make you wait a few days for the money you received from friends to show up in your bank account, Zelle can transfer the money almost instantly.

For those reasons, analysts at eMarketer expect Zelle to “leapfrog” other payments services before the end of the year.

Credit Union SMB Loan Approvals Hit Record Lows (PYMNTS) Rated: A

The latest data from the monthly Biz2Credit Small Business Lending Index suggests a slump in small business lending among U.S. credit unions.

press release issued on Wednesday (June 13) detailed the May Index’s latest findings, which found that large banks with more than $10 billion in assets are approving of nearly 30 percent of small business loan applications, a two-tenths of a percent increase from April levels. That figure is also a new high for post-recession big bank lending to small businesses.

Digital-only banks grapple with integrating ‘human’ interaction into their products (Tearsheet) Rated: A

Digital-only banks cater to younger customers who don’t want to talk to bankers at brick-and-mortar branches — or bother visiting a branch at all. Or so they think.

Recent customer surveys indicate otherwise, according to research findings released this month from Celent, commissioned by Samsung. It revealed that customers want some kind of human interaction for complex issues. The study found that about half of U.S. banking customers aged 18 to 44 said they banked digitally, but prefer to resolve some matters in-person. Overall, most customers surveyed preferred dealing with humans on matters like setting up financial goals or getting investment advice. To respond to fraud, a lost or stolen card, or identity theft, a majority of those surveyed across age categories preferred to phone the contact center or address it in a physical branch.

Source: Tearsheet

Real Estate Finance Is Changing, Thanks to ‘Fintech’ Startups (The Bridge) Rated: A

If your student loan debt is larger than your salary, investing in real estate might sound like a joke. But it’s doable, said Dave Conroy of the startup Meridio, a website in beta testing that lets users invest amounts of money that you might have in your wallet right now–even $20–into specific properties. Using blockchain technology keeps each transaction cost low, said Conroy, whose company is an offshoot of Bushwick-based ConsenSys, which is building myriad applications based on the Ethereum platform.

For investors, the service would reduce transactions costs and make a real-estate portfolio more liquid. For owners, it would unlock more capital and streamline transactions. While Meridio won’t provide market intelligence about properties to invest in, prospective investors can call on their own experience, says Conroy, who previously worked for the National Association of Realtors.

Why digital banking and robo advice are pairing up (Financial Planning) Rated: A

Banks and digital wealth startups are headed toward the same goal from different starting points.

Each side is increasingly seeking to package automated investment advice with checking because customers are expressing an interest in getting both services from one provider.

Fifth Third Bancorp’s securities unit teamed up with Fidelity recently to offer automated advice, while the microinvesting app Acorns rolled out a debit card called Spend and opened up 50,000 checking accounts in two days.

Wells Fargo simplifies payments pricing to compete with Square (Payments Source) Rated: A

Wells Fargo will simplify the prices it charges small businesses to accept credit and debit card transactions as the bank responds to pressure from startups such as Jack Dorsey’s Square Inc.

The changes, which are tailored for small businesses that process $100,000 a year or less, eliminate many of the complicated pricing policies that varied from client to client, according to Danny Peltz, who leads treasury management and merchant services at the company. Business customers will also be able to apply online for payment processing capabilities with Wells Fargo, Peltz said.

New Technologies and New Customer Experiences Drive Banking Today (Lend Academy) Rated: A

American Banker’s Penny Crosman sat with Cathy Bessant, Chief Operations and Technology Officer, Bank of America to discuss the bank’s use of AI.  She described how the bank has inventors all over the world in their distributed innovation model.

Peer to Peer Micro-Credit Site Puddle Shuts Down (Crowdfund Insider) Rated: A

Puddle, an online lender that provided micro-credit in a peer to peer platform, is shutting down.

In an email circulated by the company, Puddle founders stated that after five years of operation the businesses model was “unsustainable.”

RealtyMogul, Comunidad Realty Partners Sell Dallas Area Investment Property (Herald Courier) Rated: B

RealtyMogul, a pioneer in providing private real estate to discerning investors, announced that it has sold an investment property in partnership with Comunidad Realty Partners at greater than 1.5 times its purchase price.

The property, Lodge at Main, a 208-unit multifamily apartment complex in the Dallas/Fort Worth, Texas area was acquired in 2015.

California may force online business lenders to disclose rates (American Banker) Rated: AAA

A bill pending in California aims to tame the disorderly, confusing and largely unregulated world of online small-business lending by mandating that borrowers receive standard price disclosures.

The bill, which passed the Senate without a vote to spare and has failed to garner much support from either the online lending industry or its critics, still faces a tough fight in the state Assembly. But if the measure does get enacted in California, it could serve as a blueprint for other states.

The legislation tackles the question of whether commercial lenders should be required to disclose the price of financing in a way that enables borrowers to compare multiple offers. Just as nettlesome is the question of how any such comparison metric should be calculated.

Source: American Banker

The bill would apply to small businesses that borrow $500,000 or less.

United Kingdom

RateSetter Reports IFISA Tops £100 Million in Record Time (Crowdfund Insider) Rated: AAA

UK based peer-to-peer lender RateSetter is reporting that subscriptions to its IFISA have surpassed £100 million. This milestone took four months to reach and, according to RateSetter, faster than any other P2P lender. To date, RateSetter has originated over £2.5 billion in online loans to both businesses and individuals.  RateSetter states that more than 10,000 IFISA accounts have now been opened.  The average annual return received by investors stands at 4.4% with more than £100 million in interest having been paid.

Peer-to-peer lender Ratesetter to raise £30m as London float looms (City A.M.) Rated: A

Peer-to-peer lending business Ratesetter is working on a £30m fundraising which is expected to be a prelude to a London float.

According to Sky News Ra

tesetter is working with investment bank Lazard and broker Peel Hunt to raise £30m from investors.

The funding round would value Ratesetter at about £280m.

The fundraising is expected to be a precursor to a stock market flotation which could take place as early as next year.

THE ECONOMIC IMPACT OF LENDING THROUGH FUNDING CIRCLE (Funding Circle) Rated: AAA

In the UK, where Funding Circle has been established the longest, the platform is now competing directly with banks in the small business lending market – with net lending through the platform exceeding that of the entire UK banking system for two successive quarters at the end of 2017. A survey of Funding Circle’s customers undertaken for the study suggests 89 percent of the platform’s UK small business customers would approach
Funding Circle first again in future, rather than going to a bank.

Source: Funding Circle

Read the full report here.

Funding Circle CEO on the Fintech Frenzy in Europe (Yahoo Finance) Rated: A

How the big three shaped P2P (Peer2Peer Finance) Rated: AAA

ALTHOUGH we still tend to think of peer-to-peer lending as a young sector, it is now 13 years since Zopa became the first lender in the market. It was joined five years later by Funding Circle and RateSetter and since then the big three have dominated the P2P market.

Here are some of the key moments in their journeys.

London Block Exchange To Strike Deal With UK Bank (Crypto Daily) Rated: A

London Block Exchange, a UK based crypto provider is alleged to be pairing up with a new UK based bank, ClearBank.

If this news is indeed true, this will mark the first time a lender has struck a deal with a cryptocurrency-based entity.

The UK proves its tech chops, Google’s massive diversity gap and Brexit cause business tensions (Elite Business) Rated: A

Out of Europe’s 34 unicorns, the UK has produced 13. These have a combined value of $23bn, equal to 38% of the European total. This puts the UK ahead of Germany  and France, which have six and three scaleups valued over $1bn respectively. Given the nation has already spawned success stories like Deliveroo and Funding Circle, it’s hardly surprising that VC investment is also booming in the UK. Last year British startups raised $7.9bn compared to Germany’s $3.2bn and France‘s $2.8bn.

Brexit has made UK SMEs worry about talent

Having polled companies in 11 countries, researchers revealed that UK entrepreneurs were much less confident about the conscious uncoupling than those in the EU. Overall, 57% of respondents felt that their biggest challenge was that they had too little time and that they were doing everything themselves. This was double the 24% who thought hiring the right people were their biggest worry.

Alternative finance funds see mixed success (Peer2Peer Finance) Rated: A

Over the past year, P2P Global Investments (P2PGI), VPC Specialty Lending Investments and Ranger Direct Lending (RDL) have moved away from pure P2P to boost returns and narrow their discounts, while the Funding Circle SME Income Fund (FCIF) has remained true to its roots, all with varying outcomes.

The FCIF investment trust solely backs loans originated via the Funding Circle platform and saw its net asset value (NAV) return 6.9 per cent last year, while trading on a healthy premium.

In comparison, RDL – which has recently announced its intention to close – returned 5.4 per cent, VPC – which has shifted from P2P towards balance sheet lenders – saw its NAV total return grow by 3.07 per cent, while P2PGI – which last year merged its manager MW Eaglewood with Pollen Street Capital and is focusing more on asset-backed alternative lenders – reported a NAV return of 3.03 per cent during 2017. RDL and P2PGI are both trading at double-digit discounts to NAV.

Updated Crowd2Fund app includes IFISA management tools (Peer2Peer Finance) Rated: B

PEER-TO-PEER platform Crowd2Fund has relaunched its app to include Innovative Finance ISA (IFISA) management features via their smartphones.

Digital Challenger Redwood Bank Raises £9.8 Million (Crowdfund Insider) Rated: A

Redwood is targeting the SME market. Products include mortgages for business owners and professional landlords, as well as a range of savings accounts. Redwood seeks to offer British businesses fast, simple, transparent loans and savings accounts, coupled with superlative service. They also promise that money is being invested back into British business and into the communities they are a part of. Warrington Borough Council has a 33% stake in the firm that was pegged at £30 million.

BIS wants tighter rules for funds offering credit, fintech (Reuters) Rated: A

Regulations introduced after the financial crisis a decade ago to smooth out banking booms and busts should be extended to funds that provide credit, or shadow banks, and fintech firms, the Bank for International Settlements (BIS) said on Sunday.

The introduction of “macroprudential” policy requiring banks to build up separate “countercyclical” buffers of capital if credit markets become frothy was a core crisis-era innovation.

The buffers can be released if loans begin turning sour and maintain resilience of the financial system to shocks – a departure from the traditional “microprudential” focus on the stability of individual banks.

China

China Rapid Finance 2018 Q1 – Results – Earnings Call Slides (Seeking Alpha) Rated: AAA

Source: Seeking Alpha
Source: Seeking Alpha

Chinese P2P giant Lufax dodges valuation bullet (Nasdaq) Rated: A

Lufax is wisely trying to grow up in private. The Chinese financial technology giant, which focuses on peer-to-peer lending and wealth management, plans to raise more than $1 billion at a $40 billion valuation ahead of a delayed Hong Kong flotation, says Reuters. That makes sense. Listing now could upset Beijing, and might only be achievable at a discounted price. Abundant venture capital allows the Ping An-backed startup to keep growing without a distracting market debut.

European Union

Alior Bank, solarisBank, Raisin and Mastercard to unveil European digital bank (Fintech Futures) Rated: AAA

Poland’s Alior Bank has teamed with solarisBankRaisin and Mastercard to unleash a pan-European digital bank.

The new offering, which is planned to be launched in the fourth quarter of 2018, will be built on the “strengths of all partners”.

Alior Bank will deliver multicurrency accounts with international transfers and deposits.

solarisBank will add the banking infrastructure with its technological, compliance and regulatory framework.

Raisin through its network of partner banks, is adding various savings and investment possibilities to the offering.

N26 launches a revised metal card (Tech Crunch) Rated: A

Fintech startup N26 is updating its N26  Metal product and launching it tomorrow. You might remember that the company first announced its premium card at TechCrunch Disrupt Berlin in December 2017. Shortly after the conference, the card was available in early access for existing N26 Black customers.

But the company had to go back to the drawing board and update the card design. N26 Metal customers had some complaints about the design of the card in particular.

International

Fintechs are staring down the future of banking (Financial Post) Rated: A

For instance, U.S.-based Lending Club, which has been around since 2007 and which is public, has arranged US$35 billion in consumer loans for its two million borrowers. The average loan — and it originates about US$2.4 billion a quarter — is about US$14,000.

Those themes were on full display this week in Toronto at an event organized by the KiWi Private Credit Fund, which raises capital from investors and purchases unsecured consumer loans and secured small business loans originated by established U.S.-based lending marketplaces.

“But they are not good at pricing a 9 per cent or 12 per cent risk,” he added, all of which allows entities such as his, to meet that need. It has US$27 million in assets; an average loan of almost US$14,000 and targets a return in the six- to eight-per-cent range.

Australia/New Zealand

Harmoney is to begin lending money through its own online platform (Interest) Rated: AAA

Peer to peer lending facilitator Harmoney Corp is making a number of tweaks to its operation, which will include the ability to lend its own money through its own platform.

The company has also renamed its ‘platform fee’ – recently the subject of Commerce Commission court action – as an ‘establishment fee’ and dropped the fee by $50 to $450. The company has also tweaked some of its interest rates higher (see below tables).

Harmoney will now be operating two different markets within its platform; the existing P2P facility and a new ‘wholesale market’ operated through a new subsidiary Harmoney Nominee.

Australian regulator sues Westpac for staffer’s poor financial advice (Reuters) Rated: A

An Australian regulator filed a lawsuit against No. 2 lender Westpac Banking Corp (WBC.AX) over a financial planner it alleges gave poor advice for years, upping its scrutiny of a sector already under fire amid an embarrassing public inquiry.

Australia’s A$5 billion ($3.7 billion) financial planning sector has provided some of the most damning evidence at an inquiry into finance sector misconduct, ordered by the government after a string of banking scandals including fraud.

P2P lender cuts rates (Good Returns) Rated: A

Peer to peer lender Lending Crowd has cut its borrower interest rates for all new business and personal loan applications including vehicle purchases and debt consolidations.

A1 grade personal borrowers will have a market leading rate of 6.89% pa and SME businesses will have rates available from 7.98%. Interest rates across all loan grades will range from a low of 6.89%
to a high of 18.96% (previously 7.90% to 19.75%).

Parents giving $ 10k towards kid’s first car (Finder) Rated: A

Survey shows 60% of parents are giving kids $10,594 to buy their first car.

According to research conducted by RateSetter, parents are stumping up $10k to get their child their first set of wheels.

RateSetter found that among parents who bought their child a car, 15% chose a new model, 71% opted for a used one and 14% donated their own vehicle. The majority of families could afford a car under $10,000, while 26% spent between $10,000 and $20,000. A lucky 12% of kids were gifted over $20,000 towards their ride. Parents in Victoria spend the most on their child, up to $13,386. In NSW, the average outlay was $10,404.

India

P2P lending companies change tack in bid to become NBFCs (Business Standard) Rated: AAA

Peer-to-peer (P2P) lending companies are changing their business model as they migrate to becoming (NBFCs).

RBI had created a special category called NBFC-P2P, in view of the proliferation of entities. While mandating Rs 20 million as minimum net worth, RBI had also imposed a Rs 1-mn cap for individual lending on such platforms.

So far, a couple of these entities have got an NBFC licence from RBI. Faircent says it got the licence about 20 days earlier.

Amazon launches lending platform for sellers (The Economic Times) Rated: AAA

Amazon India has launched a platform for lenders and sellers wherein sellers can choose from competitive rates and loan offers. It will also open its APIs to lenders to plug in and lend to the sellers as part of the new programme, called the seller lending network.

India will be the first geography for Amazon where it has launched such a seller platform.

Fiscal 2015 World Bank Lending Report highlights India as one of the biggest Loan Beneficiary (Digital Journal) Rated: AAA

Fintechs offer loans to individuals with low credit scores as well. For instance, in the case of Qbera, individuals with a minimum credit score of 600 can qualify for personal finance. This is not quite so in the case of private banks – individuals need to have a minimum credit score of 750 to be eligible.

Aye Finance Secures $ 21.5M in Series C Funding (Finsmes) Rated: A

Aye Finance, a Gurgaon, India-based provider of financial services to micro and small businesses, secured $21.5m in Series C funding.

Backers included CapitalG, SAIF Partners and LFT.

The company intends to use the funds to accelerate business growth.

P2P lending: Can India replicate the UK experience to achieve Sabka Saath, Sabka Vikas? (Economic Times) Rated: A

India is still struggling with a huge credit gap that is holding back the economy. Getting a bank loan is an extremely cumbersome and long-drawn process for salaried individuals and small businesses, alike. According to a study conducted jointly by ASSOCHAM and EY, around 19% of India’s population remains unserved by the traditional banking sector.

Several million MSMEs that lack a tangible financial record are thus not eligible for credit from legacy financial institutions who still use traditional credit and financial data to evaluate eligibility. For the Indian economy to achieve the next level of growth, the current gap of nearly $200 billion in credit supply to MSMEs and significant under-banked population of India needs to be addressed immediately.

Asia

FSC reins in P2P firms (Korea Joongang Daily) Rated: AAA

In Korea, P2P firms, which directly connect borrowers with investors through online platforms, are not under the direct supervision or management of financial authorities. The Financial Services Commission (FSC) only indirectly supervises them by requiring registration of P2P firms’ lending subsidiaries, which most P2P firms use to carry out the process of lending money to borrowers.

But this safeguard also has many loopholes. TheHighOneFunding, for example, had uploaded the name of a different person as CEO when it registered its lending subsidiary with government regulators.

With more investors attracted to the idea of making easy money through high interest rates on P2P lending, the cumulative amount of loans on such platforms has dramatically increased, from 37.3 billion won in late 2015 to 3.50 trillion won as of May.

MENA

Where’s the money, honey? (Gulf News) Rated: AAA

According to the Khalifa Fund for Enterprise Development, nearly 50 to 70 per cent of loan applications made by SMEs in the UAE are declined by traditional banks, while loans to SMEs account for around four to five per cent of the outstanding bank credit in the UAE.

Enter peer-to-peer lending.

Over the years, such platforms have become big business: In 2016, the size of the peer-to-peer lending market in the US, UK, the European Union, Australia and New Zealand was estimated to be more than $72 billion, according to AltFi. In China, loan originations in 2015 were estimated at $101 billion.

Authors:

George Popescu
Allen Taylor

Monday May 21 2018 Daily News Digest

ICO red flags

News Comments Today’s main news: Prospa launches $146M IPO. Experian, HSBC UK partner on credit application solution. RateSetter Australia extends green deal. Student Loan Genius raises $3.5M. Australia court rules against Harmoney. Faircent gets certified for NBFC-P2P. Today’s main analysis: WSJ investigates ICO fraud. Today’s thought-provoking articles: One student explains her student loan turmoil. China’s foreign investment restrictions for P2P lending […]

ICO red flags

News Comments

United States

United Kingdom

International

Australia

India

Other

News Summary

United States

 

Wealthfront’s experiment in risk parity has a rocky start (Financial Times) Rated: AAA

Our case here involves Wealthfront, an automated investing service founded by all-star venture capitalist Andy Rachleff. Boasting over $10.5bn under management, the platform offers a wide-range of thoughtful strategies to the casual investor, including indexes optimised to harvest tax-losses and a smart-beta product, overseen by Random Walk proselytiser Burton Malkiel.

Back to Wealthfront’s risk parity offering. In an attempt to lure investors, it backtested its new strategy versus its competitors at AQR and Bridgewater. Here are the results:

Source: Financial Times

I’ve Paid $ 18,000 To A $ 24,000 Student Loan, & I Still Owe $ 24,000 (Bustle) Rated: AAA

The loan, ironically called a “Smart Option” loan, has a variable interest rate that fluctuates based on changes in the financial market — which may have been explained to me at the time (I truly don’t remember), but I know I didn’t fully grasp what that meant.

Source: Bustle

Now, eight years later, that loan — one of nine that left me $95,000 in debt upon graduation (because, yes, interest does accrue while you’re in school) — very clearly marks the exact moment when I lost control of my own financial destiny.

According to a February 2018 study published by the Levy Economic Institute, a nonpartisan policy think tank at Bard College, there are 44.2 million Americans with student loans, which adds up to about $1.4 trillion in debt. There already exists a myriad of research-driven articles that wax on the impact of the student loan crisis on the future of this country (screwed), our economy (broken), and the weight of the loan crisis (crippling)

Student Loan Genius Raises $ 3.5M in Seed Series Prime Financing (Finsmes) Rated: AAA

Student Loan Genius (SLG), an Austin, Texas-based employee benefits platform, raised $3.5m in Seed Series Prime financing.

The round was led by Vestigo Ventures, with participation from CMFG Ventures, Prudential Financial and Rubicon Venture Capital.

The company intends to use the funds to support commercialization of its offering as well as to grow its technology, sales and marketing teams.

Cloudvirga Raises $ 50M in Series C Funding (Finsmes) Rated: A

Cloudvirga, an Irvine, Calif.-based provider of digital mortgage point-of-sale (POS) software provider, closed a $50m Series C funding round.

The round was led by Riverwood Capital with participation from Upfront Ventures. In conjunction with the funding, Riverwood executives Scott Ransenberg and Jay Schneider will join Cloudvirga’s board of directors.

Under-the-radar Wilmington fintech companies burst onto consumer credit scene (Delaware Online) Rated: A

One is Fair Square Financial, which last week snagged a $100 million investment from Vikram Pandit, the former CEO of Citigroup.

It’s an infusion of cash that the online credit card company says will allow it to expand beyond its downtown co-working space this year while doubling its workforce to 100 employees during the next two years.

The expansion decision is the result of surprisingly strong customer demand for its online-serviced, low-fee Ollo cards, Fair Square CEO Rob Habgood said. The credit cards carry a variable interest rate that currently sits at a lofty 24.99 percent.

Fintech is disrupting big banks, but here’s what it still needs to learn from them (The Next Web) Rated: A

Much of the hype around fintech focuses on what traditional banks do wrong: they’re slow to adopt new technology; they don’t center the customer; they’re too big to respond nimbly to change. This narrative is part of why fintech continues to attract massive investment, with $31 billion total flowing into the sector last year, according to KPMG.

The truth is that there’s actually a lot that banks do right — things that fintech startups can struggle to replicate. I mean, there’s a reason why they’ve been successful.

Here are the three areas where I feel fintech’s needs and banks’ expertise overlap.

Will Consumers Take On Too Much Debt In 2018? (PYMNTS) Rated: A

The rate of new delinquencies on credit cards stood at 6.42 percent in Q1, up from 5.9 percent for the same period last year. According to Moody’s, the delinquency trend for the next year is for an “increase.” The Q1 credit card delinquency rate trails the 7.3 percent rate for auto loans but is higher than the 3.4 percent rate for residential mortgages.

Meanwhile, the rate of total new household debt delinquencies was about 4.5 percent in Q1 of 2018, “down slightly from a year ago,” Moody’s said. “Over the next year, we believe delinquencies will rise a bit as lenders modestly loosen underwriting standards.”

Direct Lending Partners Hires Industry Leader as Director of Originations and Capital Markets (PR.com) Rated: B

Dream Live Prosper (DLP), an award-winning family company led by Don Wenner (Founder and CEO), is excited to announce the appointment of Greg E Schecher as Director of Originations and Capital Markets.

Based out of the company’s Southeast headquarters in St. Augustine, Florida, Greg will lead the firm’s CRE bridge loan lending and marketplace lending platform.

United Kingdom

Equifax powers HSBC UK’s first live credit application solution (Fintech Futures) Rated: AAA

HSBC UK has created the “first live” use case of open banking for credit applications using the InterConnect cloud platform from Equifax.

According to Equifax, the solution will help quick affordability assessments by allowing individuals to submit their bank transaction information electronically, in less than five minutes, during an application for credit.

Each submission is presented directly to HSBC UK’s underwriting team in real-time, providing the bank with view of a customer’s affordability and offering faster lending decisions.

Peer-to-peer lending: beware the risks (The Times) Rated: A

About 150,000 Britons have lent nearly £10bn in this way over the past decade, earning around 4.5% interest on average. By contrast, the average interest rate on an easy access savings account is just 0.51%.

The bigger platforms, such as Zopa, Funding Circle and RateSetter, are therefore attractive alternatives for would-be savers.

The market was boosted by the launch in 2016 of innovative finance Isas, which allow people to invest £20,000 a year tax-free in P2P platforms and equity-based crowdfunding, where they buy stakes in companies.

The Disruptive Rise of FinTech (Technative) Rated: A

The fintech industry is one of the fastest growing areas of the British economy and is generating more than £20 billion annually. The sector continues to grow, it currently employs over 60,000 people and has produced more billion pound-valued start-ups than any other British economic sector.

 

P2P lender urges social media firms to allow crypto ads (Peer2Peer Finance) Rated: A

A BAN on cryptocurrency adverts will do more harm than good, a crypto-backed peer-to-peer lender has warned.

Lendingblock, which lets individuals lend in a range of digital currencies such as Bitcoin, Ethereum and Ripple, said rather than Google, Facebook and Twitter pursuing a current ban on cryptocurrency adverts to help clamp down on scams, they should help promote education and awareness.

Lendingblock warned a complete blackout on information may be “the easiest option” but warned that cryptocurrencies aren’t going anywhere so it would be better to partner with the industry and ensure consumers understand the market.

More funding for smes (Manufacturing and Engineering Magazine) Rated: A

The Manufacturer has partnered up with the alternative finance specialist ThinCats to make £100 million of funding available to UK manufacturers, as more and more investors are becoming increasingly keen to help fund SMEs.

The main issue for some SMEs is that they do not have the largest amounts of assets against which the banks are more willing to lend. As a result, many of them can’t invest in their growth, or delay investment until they reach the point they can fund it themselves. The wider knock-on effect of this problem is that the UK’s productivity and growth is being held back.

Crypto world gets most complete and secured crypto exchange with Bitmillex (The Cryptocurrency Analytics) Rated: A

What separates Bitmillex from other crypto exchanges is that the platform was developed out of the long-standing demand of a credible cryptocurrency exchange which will prioritize fund security and also will be able to extend a much wider range of investing and trading options than what is offered by current regular exchanges.  

Speaking further, Mr. Briton highlighted the other state of the art features of Bitmillex which keeps it ahead of other crypto exchanges-

  • Most advanced security and hosting protection through cloud hosted servers that are connected to custom hardware security modules and multiple protective layers to withstand any attack and hack attempts. In addition, 98% of all balances are to be stored in secure offline cold storage.
  • Multiple social trade offerings through Auto-Trade, Peer-to-Peer BTC market and Peer to Peer Lending & Borrowing opportunity. (use the term copy trading)
  • Bitmillex has introduced MTG trading software to ensure a ground-breaking multi-terminal and multi-platform trading experience  (MT4)
  • Traders have the flexibility to hold funds in fiat and trade major forex pairs when the crypto market is bearish
  • Bitmillex is offering its revolutionary Debit Card to users that will be linked to their wallets and will provide them immediate access to their balance at ATMs or POS in fiat currency worldwide

Fintech envoy for Northern Ireland appointed (Open Access Government) Rated: B

Georgina O’Leary, Director of Innovation, Research and Development at Allstate has been appointed as the government’s new fintech envoy for Northern Ireland.

China

Foreign investment restrictions in P2P lending intermediaries (China Business Law Review) Rated: AAA

Current regulations and policies on peer-to-peer lending do not directly restrict or prohibit foreign investment in P2P lending intermediaries.

Relying on a network, a P2P lending intermediary will generally charge a certain consulting fee, service fee, etc., once a lender and borrower that have been brought together establish a lending relationship.

Local financial service office recordal/registration. Article 5 of the measures specifies that, within 10 working days after collecting its business licence, a P2P lending intermediary, or one of its branches, that proposes to launch P2P lending information intermediary services is required to carry out, on the strength of relevant materials, recordal/registration with the local financial regulator of the place where it has its business registration. Once it has completed recordal/registration with the local regulator, the P2P lending intermediary is required to apply for the appropriate telecoms service operating permit in accordance with relevant regulations of the competent telecoms authority before it can launch its services.

European Union

Following the Paypal acquisition: iZettle’s founders are the latest Swedish tech billionaires (Business Insider) Rated: AAA

Mojang founder Markus “Notch” Persson, Skype’s Niklas Zennström and Spotify’s founding duo Daniel Ek and Martin Lorentzon are Sweden’s richest people in tech today – all worth $1 billion or more.

Following Paypal’s announcement that it would buy the Swedish payments company iZettle for $2,2 billion (19 billion SEK), Jacob de Geer and Magnus Nilsson – founders of iZettle – have joined the few dozen Swedish entrepreneurs worth 1 billion krona or more.

International

Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud (Wall Street Journal) Rated: AAA

In a review of documents produced for 1,450 digital coin offerings, The Wall Street Journal has found 271 with red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.

Source: The Wall Street Journal

Data Centers Take Center Stage in Real-Estate Investing (Barron’s) Rated: AAA

“An autonomous car will need 40 times more bandwidth than the cars we use today,” says East. “The demand for data centers is growing 30% per year in the U.S. and 70% in China, but there are only six public companies in the supplier’s market.” They are: Equinix (EQIX), CoreSite Realty (COR), CyrusOne(CONE), Digital Realty Trust (DLR), QTS Realty Trust (QTS), and Switch (SWCH).

Data centers aren’t easy markets to enter. It’s not hard to purchase a piece of land to build the property, but the facility needs to be outfitted in fiber, equipped with interconnected networks, and wired for massive electric power and top-tier security devices. It takes about $1,000 to build one square foot of data center, said East, compared with the average cost of $300 for conventional real estate.

Capgemini And Efma Launch Innovative FinTech Portal (Payment Week) Rated: A

Capgemini and Efma today announced the launch of FinTechVisor, an innovative platform designed to bring FinTechs and financial institutions together to collaborate. The FinTechVisor portal offers a world-wide networking and collaborative community for FinTechs and financial institutions to become game-changers by co-creating the future of the financial services industry.

Launched today at the CCX Forum in London, the portal, which connects financial institutions and FinTechs, will have a feature that allows bankers and insurers to rate FinTechs and comment on their solutions, as well as a “matchmaker-like” personalized function for financial institutions to find a FinTech partner who complements their needs and interests.

InnerScope Hearing Technologies, Inc. Announces Klarna Bank as a Financing Partner (Globe Newswire) Rated: B

Hearing Technologies InnerScopeInc. (OTCQB:INND) announced today the complete integration of www.Klarna.com for a simple and easy one-click payment solutions for its online customers who shop at www.hearingbenefit.com and www.nohasslehearing.com websites.

InnerScope and Klarna have teamed up to offer a frictionless one-click checkout solution which gives customers a choice of 2 simple no-hassle payment options, Pay Now, or Slice It options.

  • The Pay Now option is for customers who want to pay in full at checkout can do it quickly and securely with a credit/debit card.
  • The Slice it option with its instant financing and a quick and simple credit application process allowing the customers to spread the cost of their purchases over a 6 to 24-month period at 0% annual percent rate (“APR”), depending on transaction value, giving them flexibility and increased purchasing power.
Australia

Online lender Prospa launches $ 146m IPO (News) Rated: AAA

Online lender Prospa has launched a $146 million initial public offering, offering shares at $3.64.

Prospa, which lends to small businesses, says the majority of funds raised in the IPO, which includes institutional, retail and employee offers, will be used to grow its existing business, add new products and expand into New Zealand.

RateSetter Australia extends green deal (Peer2Peer Finance) Rated: AAA

RATESETTER Australia has announced an 18-month extension to its green loan marketplace.

The UK peer-to-peer lender’s Australian subsidiary is working with the Australian government’s Clean Energy Finance Corporation (CEFC) to bring clean energy borrowers and investors together.

In its first year it helped more than 1,000 households and small businesses finance green energy products.

 

High Court backs Commerce Commission over Harmoney (Scoop News) Rated: AAA

The High Court has sided with the Commerce Commission on how to interpret peer-to-peer lender Harmoney’s platform fees, deeming them to be credit fees and falling under the regulator’s purview.

The commission, which oversees the Credit Contracts and Consumer Finance Act 2003, claimed Harmoney’s platform fees were an unreasonable credit fee and sought a declaration from the court backing up its interpretation.

Justice Patricia Courtney today backed the commission’s interpretation, saying Harmoney’s documents amounted to a credit contract and that the way the peer-to-peer lender was structured went “beyond mere matchmaking”, providing a nominal creditor to hold loans as a bare trustee for investors and undertaking the full administration of the transactions.

Fintech disruptor will benefit from Banking Royal Commission (Motley Fool) Rated: A

Zip Co Ltd (ASX: Z1P) provides online credit for consumers and businesses at point-of-sale through brands zipMoney and zipPay.

Afterpay Touch Group Ltd (ASX: APT) provides a platform that allows retail merchants to offer consumers to ‘buy now, receive now, pay later’ without having to enter into a traditional loan agreement.

Money3 Corporation Limited (ASX: MNY) started out as a a payday lender, which it plans to exit in the next financial year. The company is predominantly involved in providing secured auto loans, which make up around 80% of its loan book.

Westpac made blind pensioner a guarantor without risk advice, inquiry hears (Reuters) Rated: A

Australia’s Westpac Banking Corp admitted on Monday to signing up a legally blind pensioner as loan guarantor for her daughter’s business without warning her of the risks, then threatened to evict her when the business failed.

The testimony, given to a powerful inquiry into the country’s financial sector, came as Australia’s “big four” lenders all admitted to misconduct in their submissions to a third round of public hearings that focuses on loans to small businesses.

Other transgressions included fraudulent loans and double-charging interest, the inquiry heard, a further hit to the sector’s reputation after previous rounds of hearings uncovered widespread abuses in Australia’s financial planning industry.

FinTech Australia announces new CEO (Fintech Australia) Rated: B

Brad Kitschke has been appointed as CEO of FinTech Australia.

 

India

Faircent Gets RBI Nod For NBFC-P2P Certification (Inc 42) Rated: AAA

Gurugram-based P2P lending startup Faircent has received its non-banking financial companies (NBFC)-Peer-to-Peer (P2P) certification from the RBI (Reserve Bank of India).

The accreditation makes Faircent the first P2P lending platform in the country to receive the certificate of registration as an NBFC-P2P by the national regulator.

FinTech firms assisting banks with customer acquisition (Business Standard News) Rated: A

MoneyTap

People earning more than Rs. 20,000 per month can utilise this app to borrow anywhere between Rs.3,000 to Rs.500,000. Offering flexible payback options, MoneyTap allows borrowers to select their own EMI plans.

CoinTribe

Endeavoring to fill the gaps in SME unsecured loan segment, CoinTribe as a loan marketplace makes it easier for banks to confidently enter the uncharted domains.

Lending on peer-to-peer platforms is fraught with higher risks (Business Standard) Rated: A

Peer-to-peer or P2P lending has emerged as an alternative option for investors who wish to earn higher rates of return than what traditional fixed-income instruments can offer. However, lending on these platforms also entails higher risk, which investors need to be aware of before venturing into this relatively new investment avenue.

6 investments with high return (The Economic Times) Rated: A

Peer-to-peer (P2P) lending is a relatively recent option and is a form of crowd-funding used to raise loans which are paid back with interest by bringing together people who need to borrow, from those who want to invest. For the funds that you invest, the interest rate may be set by the P2P platform or mutual agreement between the borrower and lender.

Risks: Since this is an unsecured loan where there is no face-to-face interaction, a P2P lender, i.e., the investor needs to be aware of the risks involved such as default on the part of the borrowers.

Asia

Finance: RHB plans to win over SMEs with digital agenda (The Edge Markets) Rated: A

Small and medium enterprises (SMEs) can no longer avoid going digital if they want to stay relevant. And RHB Bank Bhd, which has a new five-year strategy, is looking to help them do just that.

Jeffrey Ng, the bank’s head of group business and transaction banking, says the digital economy is the biggest trend impacting SMEs, and many of them will require assistance to adopt the technology. Ng was previously head of RHB’s SME division.

For RHB, this means onboarding SMEs into its electronic financial supply chain platforms. Suppliers and buyers can perform payments for goods entirely on the bank’s platforms and receive payments instantly. SMEs that want to offer cashless payments can also do so with RHB’s solutions.

How Vietnam’s Fintech Market Could Reach Nearly $ 8 Billion By 2020 (Forbes) Rated: A

According to PricewaterhouseCoopers, 

George Popescu
Allen Taylor

Friday January 19 2018, Daily News Digest

data breaches

News Comments Today’s main news: SoFi Professional Loan Program hits $720M on first offering. Roofstock reaches $1B in transactions. When Zopa will open to new investors. PPDai to invest in research. Linked Finance sees profitability. Revolut launches geolocation-powered travel insurance. Harmoney partners with DataRobot. Today’s main analysis: The most and least competitive homebuyer markets. Fundrise or Vanguard: Which is the better investment? […]

data breaches

News Comments

United States

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Australia/New Zealand

India

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United States

SoFi’s Professional Loan Program at $ 720 Million for First Offering (LendEDU), Rated: AAA

Social Finance’s Professional Loan Program 2018-A has reached $720.1 million, which is just a bit lower than the final deal it had in 2017.

In this latest program, three portions of senior Class A notes worth $677.3 million will be issued. Of that figure, one $55 million Class A-1 portion is mostly secured by floating-rate loans, and it has a variable-rate interest rate, which will be calculated based on one-month Intercontinental Exchange London Interbank Offered Rate (LIBOR).

Fixed-rate student loans will mostly back the $358.5 million in Class A-2A notes, as well as the $236.8 million in Class A-2 notes.

Why open banking and cybersecurity need each other (Tearsheet), Rated: AAA

The industry’s desire for greater security and protection of customer data seems at odds with its desire for more open banking; by definition, open banking requires banks to share data with third party service providers.

In the U.S. banks are striving to get ahead of their own regulators by creating data exchange standards. API-based data sharing agreements like the deals Fincity signed with Wells Fargo and Chase last year are evidence of those efforts. But banks need to move beyond those one-on-one agreements if they’re going to create a full suite of financial services to offer customers through a true open banking platform.

Source: Tearsheet

PeerIQ CEO Ram Ahluwalia: 2017 Saw a Resurgence of Growth in Online Lending (Crowdfund Insider), Rated: AAA

Ahluwalia told me;

“2017 has seen a resurgence in investor growth and confidence in online lending. ABS issuance is up about 83%.  Execution spreads have tightened substantially. This performance is all on the ABS loan side but has not translated yet into the equity valuations. “

He added that he expects to see continued attention on credit performance in 2018 as they are still seeing normalization of credit performance.

He expects 30% growth in ABS issuance for next year while adding that PeerIQ underestimated the growth for 2017.

LendingTree Ranks Most Competitive Homebuyer Markets (PR Newswire), Rated: AAA

LendingTree, the nation’s leading online loan marketplace, has released the findings of its study on where homebuyers will face the fiercest competition to achieve their dream of homeownership in 2018.

LendingTree looked at 1.5 million purchase mortgage loan requests that came through the LendingTree marketplace in the 100 largest cities in 2017. The study ranks cities using three criteria:

  • The share of buyers shopping for a mortgage before identifying the house they want. Buyers with financing in place are more appealing to sellers and can compete with cash buyers.
  • Average down payment percentage. Having a higher amount of money saved for a down payment can enable you to borrow more money or be offered a lower interest rate, allowing you to make a stronger offer.
  • Percentage of buyers who have prime credit (above 680). Borrowers with higher scores have more financing options to make more competitive offers. The cities/markets below are ranked for 2018 using the criteria noted above, including the relative data used to determine the ranking along with the market’s overall rank from the prior year.

California markets dominate the top 10.

Six of the top 10 most competitive housing markets are in CaliforniaSan Francisco and San Jose lead the rankings in 2018, with a vast number of credit-worthy and well-heeled borrowers making it one of the most challenging markets for prospective home shoppers.

Real Estate Marketplace Roofstock Hits $ 1 Billion in Transactions (Crowdfund Insider), Rated: AAA

On Thursday, real estate marketplace Roofstock announced it has surpassed $1 billion in property transactions since the launching of its marketplace in 2016.

Roofstock Announces $ 7 Million In Additional Funding (Benzinga), Rated: A

Roofstock announced Thursday that the venture capital arm of Silicon Valley Bank had joined its latest funding round, bringing the property investing startup’s funding total to $42 million.

Gary Beasley, CEO: Roofstock is the first online marketplace created exclusively for buyers and sellers of cash-flowing, single-family rental homes that already have tenants.

Who are your investors, if any?

Roofstock has raised $68,250,000 to date, with a recent $35M Series C investment led by Canvas Ventures in October 2017. Other investors since Roofstock’s launch include Lightspeed Ventures, Bain Capital Ventures, Khosla Ventures, Hone Capital, QED Investors, Nyca Partners, and several angel investors.

Vanguard vs. Fundrise: Which is the Better Investment Option? (Fundrise), Rated: AAA

We often get the question, “What makes a Fundrise eREIT worth investing in over the Vanguard REIT ETF?” It’s a fair question that we expected when we created the eREIT. The short answer is that Fundrise eREIT investments are lower in cost for investors than those of the Vanguard REIT ETF and also come with the potential for better returns — how our costs are lower than Vanguard requires a longer answer.

Source: Fundrise

Some of the largest REITs in which the Vanguard REIT ETF owns shares are Simon Property Group(shopping malls, worth approximately $50 billion), Equinix (office buildings, worth approximately $34 billion), and AvalonBay Communities (apartment buildings, worth $25 billion).

Vanguard charges no brokerage commissions and carries only a low investment advisory fee of 0.30%, which it reports to be lower than the industry standard of 1.02%. In addition to the advisory fee, Vanguard charges its REIT ETF investors an asset management fee of 0.11% as well as reimbursement of “expenses.”

The Fundrise Approach

Where public market investments rely on several financial organizations to perform various services from acquisition and development to offering diversified portfolios of REITs, Fundrise uses technology to consolidate these functions and reduce the number of intermediaries in the value chain.

Source: Fundrise

The real estate investment trust designation of the eREIT does not equate the services or value creation offered by the eREIT with that of a public REIT — it simply allows Fundrise to pass at least 90% of the eREIT’s earned income to investors without paying taxes at the corporate level.

Fundrise investors can invest directly into an eREIT and only pay an 0.85% asset management fee at the eREIT level. Investors who want to diversify across multiple Fundrise investments, including eFunds, can do so through one of the investment portfolios. For example, rather than choosing one eREIT or more, investors can invest in the Starter Portfolio with a minimum investment of $500. For this service, investors are charged an investment advisory fee.

Chase joins AutoFi platform (Asset Finance International), Rated: A

Chase, the US consumer and commercial banking business of JPMorgan Chase & Co, has become the first US national bank to partner with fintech company AutoFi to help customers select and finance vehicles through dealers’ websites.

The move comes after the bank’s research showed that nearly half of consumers would purchase and finance vehicles online if they had the opportunity.

ForUsAll Reaches $ 500m in Assets and Raises $ 21m in Venture Capital (Business Insider), Rated: A

ForUsAll, the technology-driven 401(k) advisor to small and mid-sized businesses, today announced it has reached $500m in retirement assets under management and secured $21 million in second round financing led by Ribbit Capital, a leading global investor in financial technology. Existing investor Foundation Capital joined the round, bringing the company’s total funding to $34 million. ForUsAll will use the funds to grow the company’s customer base, accelerate technology development and hire additional staff.

CFPB Signals Shift by Dropping Payday Lender Lawsuit (Bloomberg), Rated: A

The Consumer Financial Protection Bureau is dropping a lawsuit against a group of payday lenders associated with an American Indian tribe in a sign the regulator is changing direction under Mick Mulvaney, the acting director appointed by the Trump administration.

The agency had accused the lenders of deceiving consumers and failing to disclose the true cost of the loans, which carried interest rates as high as 950 percent a year. The agency asked for the case in federal court in Kansas to be dismissed in a court filing on Thursday, giving no details about its reasoning.

The CFPB lawsuit had targeted four companies owned by the Habematolel Pomo of Upper Lake tribe.

Foreign and Domestic Condo Buyers Tap $ 300 Million Fund To Close On New Condo Purchases (PRWeb), Rated: A

Three leading South Florida real estate-related companies with robust real estate experience, deep capital markets relationships, and a proven track record of originating and servicing end-user loans have joined forces to provide senior mortgage loans to non-traditional real estate buyers. The joint venture, named Pebb Yale Truss Lending, (“PYT Lending”) is comprised of Pebb Capital, GPC Truss, and Yale Mortgage. Already the enterprise has commenced loan closings for approximately 20% of the units at Echo Brickell, a luxury condominium development by Property Markets Group (“PMG”) in Miami, FL.

The First Blockchain ETFs Launched on Nasdaq, NYSE Today (coindesk), Rated: A

Reality Shares Advisors and Amplify Trust ETF launched the first blockchain-based exchange-traded funds (ETFs) on Nasdaq and the New York Stock Exchange Arca today.

Both funds went live on their respective exchanges at 9:30 a.m. EST. Reality Shares’ Nasdaq NextGen Economy ETF (BLCN) opened at $24.20, while Amplify’s Transformational Data Sharing ETF (BLOK) started closer to $20.

What are some of the crowdfunding basics you need to know about? (Born2Invest), Rated: A

Crowdfunding is the opposite approach to business finance.

Crowdfunding is defined as a way of raising capital with the collective effort of friends, family, customers, and individual investors.

While crowdfunding is the umbrella term for this new way of investing and doing business, there are several types of crowdfunding.

  • Reward-based crowdfunding
  • Peer-to-peer lending – People who are risking to lend out money to strangers can create loan portfolios.
  • Donation-based crowdfunding
  • Equity crowdfunding – Equity crowdfunding has the most room for change in terms of how people invest their money.
  • Real estate crowdfunding
  • Human capital – If investors want to put in money on top athletes, there are crowdfunding available for this purpose. For instance, Fantex said it would offer an IPO on investments that track the brand value of top sports stars. Another crowdfunding site named Upstart provides money for college without piling on debt.

AI, blockchain, enhanced encryption: The fintech trends Chicago’s top techies are watching (Built in Chicago), Rated: A

Here’s what Chicago’s fintech leaders are watching in 2018.

Morningstar

Which emerging technologies will have the biggest impact on the industry in 2018?

Security technologies around encryption and voice will start to take shape. Investor and consumer trust in the markets, credit and technology suggest people aren’t satisfied with the norm. There aren’t enough heuristics used to encrypt data at rest and in transit, and the emergence of unique voice pattern activation — led by Amazon and Google — will start to drive changes in the industry.

Enova

Which emerging technologies will have the biggest impact on the industry in 2018?

AI and machine learning continue to grab headlines, and for good reason: they have the potential to improve every aspect of business.

PEAK6 Investments

Which emerging technologies will have the biggest impact on the industry in 2018?

Luke Peeler, software engineer: Blockchain technology.

The Future of Financial Services for the Underbanked: Tradition, Innovation, Regulation (LendIt), Rated: B

Traditional services used by the underbanked include check cashing, cash advance loans, and money transfers. Many view these services as overly expensive and behind the times, and an emerging ecosystem is leveraging fintech innovation to provide improved offerings. However, there’s a strong case made by industry researchers that the traditional, non-bank financial providers remain attractive to their customers, especially compared to the costs of a using a bank account.

  • Joe Coleman, CEO of RiteCheck
  • Rishi Kumar, Founder of Kashable
  • Cathy Mahon, President & CEO of the National Federation of Community Development Credit Unions
  • Lisa Servon, Professor of City Planning at the University of Pennsylvania

Guidewire Partners With Plug and Play to Foster Innovation in P&C Insurance (Business Insider), Rated: B

Guidewire Software, Inc. (NYSE: GWRE), a provider of software products to Property and Casualty (P&C) insurers, today announced it has joined Plug and Play’s ecosystem to advance P&C insurance innovation and collaboration. Plug and Play is a global startup ecosystem and venture fund specializing in the development of early-to-growth stage technology startups in 12 verticals. Guidewire joins as a Corporate Partner focused on the Insurance vertical.

VPC recruits Kushman as principal and capital markets head (PE Hub Network), Rated: B

Victory Park Capital (VPC), an investment firm focused on middle-market debt and equity investments, announced today that Todd Kushman joins as a principal and head of capital markets. Kushman is based in New York.

Kushman will lead the firm’s capital markets initiatives, which includes optimizing and identifying new alternative investment product offerings.

BB&T creates $ 50m fintech investment fund (Retail Banker), Rated: B

BB&T, a US-based bank holding company, has decided to set aside $50m to invest in or buy emerging digital technology firms as part of its strategy to boost its competitive profile and trim operational expenses.

United Kingdom

ZOPA LENDING QUEUE: WHEN WILL ZOPA RE-OPEN TO NEW INVESTORS? (Orca), Rated: AAA

There was extensive media coverage in October of last year surrounding Zopa, the largest consumer-focused peer to peer lender in the UK, and when it will re-open its doors to new investors who have been waiting in the Zopa lending queue – some since early 2017. It’s the turn of 2018, and some members in the queue may be seeing signs of promise.

There are 26,000 people in the Zopa “wait list” (as of 9th January). With approximately 60,000 active customers, this influx will represent a 43% increase in lenders at the platform; impressive, given the time it’s taken the platform which was founded in 2005 to acquire its existing customer-base.

U.K. Fintech Nuvo Launches Facebook Chatbot For Financial Advice on Mortgages (Bank Innovation), Rated: A

AI-powered fintech Nuvo today launched a Facebook chatbot that helps people find the best mortgage deal.

Network ROI completes employee buy-out thanks to ThinCats £1m funding (Insider.co.uk), Rated: A

A Midlothian-based IT firm has completed an employee buy-out after receiving £1m in funding from alternative finance specialist ThinCats.

Founded in 2003 by Sean Elliot, Network ROI employs 32 people providing managed IT and connectivity services to organisations throughout the UK.

Fintech to help first-time buyers with Rent Recognition Challenge for startups (City A.M.), Rated: A

A new competition has been launched to get innovative startups using technology to help renters use this payments history as a record of credit worthiness. The idea is that a tool or service can be used by lenders and credit reference agencies as part of an assessment for a mortgage.

First announced in the Autumn Budget, the Rent Recognition Challenge is now open for entries, with a potential prize of £2m for fintechs working on this idea.

Six proposals will get £100,000 each to get started on a prototype between March and October, after which that will be narrowed down to three by a panel of judges with more cash up for grabs.

 

IFA launches investment service for dormant clients (FT Adviser), Rated: A

IFA firm Symphony is offering a white-label version of provider FinchTech’s non-advised robo-service to allow its clients to invest through its website without having to pay for advice.

For a platform fee of 0.25 per cent, investors are given access to four mainstream investment portfolios and four socially responsible investment portfolios via FinchTech, with equity/non-equity weightings ranging from a ‘cautious’ 35/65 split to the ‘adventurous’ 85/15.

BUSINESS SHOWCASE : IGNITION WEALTH IRELAND (Irish Tech News), Rated: B

Ignition Wealth Ireland is the European subsidiary of Australia’s leading digital financial advice provider Ignition Wealth. We assist large financial institutions integrating new technology into their current processes and systems  and we help them to reimagine how their customers navigate the financial advice experience.

China

PPDai to invest in research institute (Shanghai Daily), Rated: AAA

PPDai, China’s first online P2P (peer-to-peer) lending platform listed in the US market, said yesterday that it will invest 1 billion yuan (US$156 million) within three years to set up a new research institute.

The money invested in the new PPDai Smart Finance Institute will be used to fund artificial intelligence, blockchain, finance cloud and Big Data sectors, said Zhang Jun, co-founder and chief executive of Shanghai-based PPDai.

European Union

Linked Finance eyes profitability as revenue and lending levels jump (The Irish Times), Rated: AAA

Linked Finance, the peer-to-peer (P2P) lending platform which has signed over 1,200 loans for Irish businesses, has said it is on track to be profitable this year.

The company, which is seeking to become the biggest non-bank lender to SMEs in Ireland, recorded a €1.1 million net loss in the 12 months to the end of April 2017, compared to a €1.2 million loss in the previous year.

Shareholders’ deficit amounted to €2.7 million at the end of the reporting period, as against €1.7 million a year earlier as accumulated losses increased from €2.2 million to €3.3 million.

FinTech, Robo Advisers, and the Soul of Swiss Banking (Mises Institute), Rated: AAA

As one Swiss economics journal put it, the most contentious conflicts (and partnerships) will be between “startups that are completely reengineering decades-old practices, traditional power players who are furiously trying to adapt with their own innovations and total disruption of established technology & processes”. That is to say:

  • Traditional Retail Banks vs. Online-Only Banks: Traditional retail banks will always retain the cachet of security and stability. Online-only banks, however, are asserting themselves more aggressively in claiming to offer the same services with higher rates and lower fees.
  • Traditional Lenders vs. Peer-to-Peer Marketplaces: P2P lending marketplaces are growing faster than traditional lenders—only time will tell if the banks strategy of creating their own small loan networks will be successful
  • Traditional Asset Managers vs. Robo-Advisors: Companies like Betterment feature robo-advisors offer lower fees and lower minimums; meanwhile, the larger traditional asset managers are creating their own robo-products while providing the kind of personalized attention for which high net worth clients are willing to pay quite generously.
  • Traditional Wealth Management vs. Automated Advice: a plethora of new software platforms and apps feature digital options, including mobile telephone payment services, automated wealth management advice, price comparison apps, tailored social media groups and crowdfunding systems. On the other side, the exclusivity of one-on-one attention is forever and very possibly will take on even more cachet as the somewhat sterile egalitarianism of digital banking erodes the cultural hierarchy of status.
  • Traditional Clearing Systems vs. Blockchain. This latter can store and distribute crypto-currencies (such as Bitcoin) and digital contracts (such as land deeds) without the need for banks or formal clearing systems. Proponents of Blockchain maintain that it promises “to reduce fees, improve security and bypass the volatility of central bank controlled fiat currencies”. Major technology firms such as Google, Amazon and Alibaba are also joining this trend.

CoinLoan ICO Reaches Major Milestones as it Launches MVP and Enables Direct Fiat Investment (Coin Telegraph), Rated: A

Peer to peer fintech startup, CoinLoan, recently rolled out the first version of their peer-to-peer lending platform. Investors were thrilled with the results (try it for yourself here, and are eagerly awaiting the end of the ICO and listing on exchanges soon after.

CoinLoan has also recently enabled direct fiat investment in their ICO. This unique option enables investments of $5,000 or more in USD or EUR in exchange for CLT tokens.

CoinLoan has created a system of secured peer-to-peer lending, where borrowers deposit various crypto assets for a loan in their preferred fiat currency.

International

Revolut launches geolocation-powered travel insurance (TechCrunch), Rated: AAA

Fintech startup Revolut is launching international medical and dental insurance. You can subscribe using the company’s app for £1 per day or more depending on the options.

By default, insurance coverage costs £1 per day for medical and dental insurance. You can add an option for winter sports and you can also cover your friends and family.

Australia/New Zealand

AI helps Harmoney improve ability to assess credit risk (CIO), Rated: AAA

Harmoney is working with DataRobot to improve the performance of its credit risk assessment process.

“With our deployment of DataRobot, we’re now using artificial intelligence to reduce risk for our lenders,” says Brad Hagstrom, joint-CEO of Harmoney.

Nine launches financial advice website 9Saver.com.au (Mumbrella), Rated: A

9Saver.com.au will aggregate the cost of living and shopping segments run across Nine News, Today, Today Extra, A Current Affair and 60 Minutes every week.

India

Startup eco-system looks forward to the budget for addressing tax dilemma (ET Rise), Rated: A

The Indian startup eco-system is looking forward to the union budget eagerly for addressing the tax dilemma. With high-quality entrepreneurs, good ideas and the very important funding ecosystem, startups have become an integral part of the India’s economic growth and job creation.

Asia

Banks, regulators lack skills to cope with pace of fintech innovation (Nikkei Asian Review), Rated: AAA

Both regulators and industry officials lack the right analytical and data skills to cope with the wave of disruption washing over the financial industry, according to the technology officers at leading financial companies at Thursday’s Nikkei Asia300 Summit in Singapore.

Jonathan Larsen, chief innovation officer of Ping An Insurance (Group) Company of China, said there are “definitely no” people with up-to-date skills among the regulators, which is slowing down the pace of change for traditional institutions.

Authors:

George Popescu
Allen Taylor

Friday December 22 2017, Daily News Digest

LendingClub charge offs

News Comments Today’s main news: DV01 finishes year with $7.9B in consumer unsecured bonds. PayPal invests in Raisin. Affirm CEO affirms its product is a personal loan. LexinFintech share price surges. The state of P2P lending in New Zealand. InvestUp considers cryptocurrency investing. Today’s main analysis: Why bitcoin is a threat to LendingClub. Today’s thought-provoking articles: High-tech lenders go after […]

LendingClub charge offs

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United States

High-tech lenders target the decades-old store credit card (Reuters), Rated: AAA

The once-hot online lending industry has been battered by scandal and losses since last year, but one of the oldest forms of lending – store credit – is increasingly attracting tech companies aiming to supplant a retailer’s credit card.

One such lender, San Francisco startup Affirm, is attracting investment and large customers by using a new approach to underwriting that allows it to approve more borrowers than traditional store credit cards.

Max Levchin, Affirm’s founder who also co-founded one of the earliest digital payments companies, PayPal, boasts that Affirm approves 126 percent more borrowers than Synchrony Financial, the largest issuer of private-label credit cards.

Startup Affirm CEO Clarifies that Product Is a Personal Loan – Not a Credit Card (LendEDU), Rated: AAA

Consumers looking for a personal loan option have another one to consider in Affirm, which is a startup from PayPal co-founder Max Levchin. With Affirm, consumers can access a loan, a form of credit, to buy items at a store, which was originally interpreted to be similar to how a credit card works.

But Levchin has pointed out there are important differences between an Affirm loan and credit cards.

Who Uses Affirm?

Generation X and Millennials are the customers who most frequently use Affirm. Younger consumers have seen how carrying high credit card balances affected their older relatives, and they are less likely to want to have much credit card debt.

The annual percentage rate can be steep, going from as low as 10 percent to as high as 30 percent. But, unlike credit cards, the interest isn’t compounded.

Why Bitcoin Frenzy Is Terrible News For LendingClub (SeekingAlpha), Rated: AAA

LendingClub (LC) has had plenty of troubles over the years. Back in 2015, you could throw a dart at a list of financial stocks and hit a double if you held it through today. LC stock, by contrast, has destroyed shareholder value since its IPO. Even the recent Trump financials rally did next to nothing for LC stock, and now shares are back to near new all-time lows after a downbeat earnings report:

Source: SeekingAlpha

In a booming economy, the G-rated loans did so badly that they jacked up interest rates almost 3% on consumers while also reducing expected returns by more than 3%. This suggests that the G-rated loans were fully 6% short of expectations. This speaks to massive problems with the company’s underwriting, and leaves you to wonder just how badly internet-originated subprime loans will fare when a recession hits and the unemployment rate goes up again.

Source: SeekingAlpha

Bitcoin Losses Ahead?

If you are someone with a low income and a challenging financial position, you have an almost no-lose proposition (if ethics don’t get in the way). You borrow money on a credit card or from LendingClub, “invest” it in Bitcoin or Ethereum, and then hope it keeps going to the moon. If it does, you make many multiples of your interest expense, and have hit the lottery.

Now if the trade goes bad, and Bitcoin plummets, what is your debtor going to do? Since there is little consequence to defaulting on unsecured debt (and LendingClub has a reputation for being a lax debt collector), you simply stop paying on the note. The borrower has a win/win situation – essentially the lender is financing purchase of lottery tickets. I don’t know about you, but I’d need a much higher interest rate than even the 15 or 20% you might get off a low-end LendingClub note to justify that risk.

Source: SeekingAlpha

DV01 to Finish 2017 With $ 7.9 Billion in Consumer Unsecured Bonds (Crowdfund Insider), Rated: AAA

dv01, the data management, reporting, and analytics platform that offers institutional investors transparency and insight into lending markets, announced on Thursday it is set to close 2017 with $7.9 billion of consumer unsecured bonds. This news comes just a few months after the company launched its Cashflows for Securitizations feature.

The company revealed that it has launched a redesigned Securitizations homepage to celebrate the $7.9 billion of consumer unsecured bonds.

SoFi Vs. Earnest Student Loan Product Comparison (StudentLoans.net), Rated: AAA

SoFi offers their clients an option. You can choose variable refinancing rates which currently range 2.75 to 6.84 percent if you enroll in the company’s autopay option. Fixed rates range from 3.25 to 7.24 percent.

Earnest offers their clients both variable and fixed rate options. For the variable option, the rates currently start at 2.57 percent APR while fixed rates start at 3.35 percent APR with their autopay options.

Both SoFi and Earnest do not have a maximum within their loan amounts, but the amount a client owes will affect the interest rates that are offered.

Repayment Options

SoFi offers a number of repayment options for their refinancing product. This includes flexible rates, terms, and an ability to set automatic payments that drop your rate by 0.25 percent. Repayment terms range from 5 to 20 years.

Earnest refinance loans offers the flexibility in the way of terms that range from 5 to 20 years. With their loans, you will be able to increase payments, pay lump sums, provide bi-weekly payments, skip a payment to pay later, and offers an interest break for those who set up automated payments.

American Financial Exchange (AFX) Announces Two-Year Anniversary Highlights (PR Newswire), Rated: A

American Financial Exchange (AFX), an electronic interbank lending market focused on U.S. small and mid-sized banks, announced today the second anniversary of its electronic trading platform. AFX facilitates the determination of Ameribor®, a transaction-based interest rate benchmark for small- to mid-sized banks via its electronic trading platform.

Since opening, more than $100 billion cumulative has been successful transacted. Recently, daily volumes have averaged approximately $350 million with several days of volume highs over $500 million principal traded.

Is Peer to Peer Lending the Best Option for Small Company Financing? (Newswire), Rated: A

If your small company needs a borrowing arrangement but does not have a credit rating that benefits instant endorsement from the banking institutions, you need to sign up for an alternative solution of capital such as peer to peer lending.

Rather than signing up to a recognized traditional bank for a financial loan, you create a proposal to be lent from people who, (if they are interested in your offer), sign up for the loan request in amounts as low as $25.

Unsecured business loans and where to get the best ones if you have bad credit (Las Vegas Informer), Rated: A

Kabbage

Kabbage offers loans that go between $2000 and $150,000, and the APR goes between 24% and 99%. They ask for no minimum credit score but you need to have been in business for at least one year in order to qualify, and have annual revenue of over $50,000.

Fundbox

With Funbox you’re looking at a loan amount of $1000 that can go all the way up to $100,000. The APR goes between 15% and 59%, and they also cater to the needs of people with bad personal credit.

OnDeck

With OnDeck you’re looking at loans that go up to $100,000 and an APR that can go from 14% to 40%. Unlike the other two, here you need good personal credit and also you need to be good at managing your cash flow. You will need a personal credit score of at least 600, not to mention an annual revenue of at least $100,000.

LendingClub

At LendingClub you can get a loan of up to $100,000, from a minimum of $5,000, with an APR that goes between 9.8% and 35.7%.

New Real Estate Investing Resource Platform is Changing the Landscape (Benzinga), Rated: A

Think Realty is a membership-based resource platform developed exclusively for real estate investors. Since launching in 2016, investors across the nation and around the globe have signed up at ThinkRealty.com to become Think Realty Members, with an 81 percent increase in membership in the past six months.

Think Realty’s reach continues to expand with its national talk radio show, Think Realty Radio, which will begin airing January 1, 2018 on Wall Street Radio. Think Realty is presenting four national conferences for investors in 2018, beginning with the Think Realty Conference & Expo in Dallas, Texas, February 24 and 25. The other locations are Baltimore, Maryland, April 14 and 15; Irvine, California, July 14 and 15; and Atlanta, Georgia, September 22 and 23.

The 10 biggest real estate tech deals of 2017 (The Real Deal), Rated: A

WeWork is now worth $20 billion. Compass is valued at $2.2 billion following a December funding round. Have you heard of Placester? Well, investors think it’s worth $202 million. The Jared Kushner-backed real estate crowdfunding startup Cadre now has a $800 million price tag.

  • 1) WeWork, $4.4 billion fundraising round
  • 2 & 3) Compass, $100M and $450M fundraising rounds
  • 4) Cadre, $65 million fundraising round
  • 5) Placester, $50 million fundraising round
  • 6) Common, $40 million fundraising round
  • 7) HomeLight, $40 million fundraising round
  • 8) Roofstock, $35 million fundraising round
  • 9) Knock, $32.5 million fundraising round
  • 10) Opcity, $28.77 million fundraising round

Congress: Hands off new rule protecting families from payday lenders (Herald Sun), Rated: A

Ignoring the voices of families and communities who have worked for many years for relief from the harms of predatory payday lending, a handful of members of Congress have introduced legislation that would nullify the Consumer Financial Protection Bureau’s national rule to rein in payday-lending abuses. Their legislation uses Congressional Review Act authority to repeal the rule and prevent the Consumer Bureau from issuing a similar rule in the future, giving predatory payday and car title lenders a free pass.

Why Amazon won’t buy a bank in 2018 (Tearsheet), Rated: A

Forget the speculation about Amazon buying a bank next year. But don’t count it out from adding banking to its near endless line of offerings.

For Amazon, providing financial services is just a means to an end: making more money by selling more things. Other retailers are still its main competition — not banks.

Why banks want to collaborate now on open banking standards (Tearsheet), Rated: A

Every U.S. banker is watching their European counterparts react to the looming Payment Services Directive, or PSD2, which will come into effect in 2018. When that happens, banks will lose their monopoly on customer data as merchants and retailers like Amazon will be allowed to retrieve customer account data from the banks (with customers’ permission).

Now, U.S. banks want to get ahead of their own regulators when it comes to creating data exchange standards. It can take 18 to 36 months to get a framework in place, Courbe said, but banks know they need to start exchanging data with other companies today.

LendingTree Adopts the RevJet Marketing Creative Platform (Sys-Con Media), Rated: A

RevJet, the first smart marketing creative platform, today announced that LendingTree has adopted RevJet’s system for producing, approving, personalizing, serving and automatically optimizing all formats of digital ad creative. Using RevJet to take a methodical approach to experimentation, LendingTree is able to deliver a higher volume of leads to their business partners while optimizing for revenue.

 

United Kingdom

December’s Lending Impact and Borrower Stories (Funding Circle), Rated: AAA

Whatever the season, small businesses work harder on any given day than Mr Claus on Christmas Eve. To celebrate their hard work and determination, we’ve created our very own Christmas Carol, looking at the past, present and future of small businesses. We begin with the small business past, looking at the history of small businesses, and how they adapted during the industrial revolution. Next up, dive into the small business present and learn about the impact they have on today’s world and the trends that have helped them along the way. Finally, discover what the landscape might look like for businesses in years to come in our small business future.

In our latest case study video, meet David, founder of The Creative Whisky Company.

Peer to Peer Robo-Lending Platform InvestUp Sizes Up Cryptocurrency Investing (Crowdfund Insider), Rated: AAA

FCA authorised crowdfunding aggregation platform InvestUp may be going crypto. The UK based Fintech has so far focused on the peer to peer lending space but management is currently looking at adding algorithm driven cryptocurrency investing.

InvestUp shares that 2017 has been another good year for P2P lending having delivered, on average, 10.74% to investors.

Protecting the future of peer-to-peer lending (Gov.uk), Rated: A

Today the peer-to-peer lending industry was given a boost of confidence as the government began legislating to clarify that no business borrowing through a peer-to-peer platform needs to be regulated as a ‘deposit taker’ (often referred to as a ‘banking licence’) unless that is their core business. The legislation will ensure that the industry can continue to thrive and innovate while still benefiting from the UK’s high quality regulatory standards.

The Committee on Exiting Europe Publishes Sector Reports Including Document on Fintech (Crowdfund Insider), Rated: A

The Exiting the European Union Committee, appointed by the House of Commons to examine the process of the Department for Exiting the European Union , released a grouping of documents from the Department today. As one may expect, the slew of reports addressed certain aspects regarding ramifications of the UK’s departure from Europe.

The Fintech Sector Report highlights the current regulatory regime in the EU and how cross border transactions take place between continental Europe and the UK. The document describes Fintech as covering four different categories:

  • Investment, advice (including Robo-Advisors) and  neo or challenger banks
  • Regtech for compaliance
  • Payments including digital currencies such as Bitcoin
  • Alternative finance including crowdfunding and peer to peer lending

Read the full UK Fintech Report here.

Bank of England approves Tandem’s Harrods Bank takeover (AltFi), Rated: A

Tandem can now end the year on a high note after the Bank of England today gave regulatory approval for the challenger’s purchase of Harrods Bank.

The deal will now give Tandem access to a full banking license and the 10,000 customers attached to Harrods Bank, as well as the bank’s mortgage and savings books. According to Tandem, the purchase will also come with a “significant capital injection”.

UBS and EPAM Win Best Use of IT Private Banking/Wealth Management for SmartWealth App at Banking Technology Awards (NASDAQ), Rated: B

EPAM Systems (NYSE:EPAM), a global provider of digital platform engineering and software development services, and UBS AG, the world’s largest wealth manager, have been awarded for Best Use of IT Private Banking/Wealth Management at the Banking Technology Awards held on December 13, 2017 in London.

China

Chinese online lender LexinFintech surges in U.S. market debut (Reuters), Rated: AAA

Chinese online lender LexinFintech Holdings Ltd’s (LX.O) shares surged in their U.S. market debut on Thursday, brushing aside worries related to Beijing’s recent crackdown on the booming micro-credit industry.

LexinFintech’s shares touched a session high of $14.88, a 53 percent jump from its IPO price that valued the Shenzhen-based company at $4.51 billion.

China online lending IPO meets tepid demand as fintech zeal wanes (Financial Times), Rated: AAA

LexinFintech, the latest Chinese online consumer lender to complete a US initial public offering, has met with muted investor demand amid concerns over Beijing’s regulatory clampdown on dubious lending practices.

Lexin scaled back its planned $500m IPO on Nasdaq to $109m, and final pricing was at the bottom end of the price range initially marketed to investors.

Qudian, which is backed by Alibaba affiliate Ant Financial, raised $900m on the New York Stock Exchange in October — the largest US IPO by a Chinese fintech group. After hitting that high point investor interest quickly slid: last month PPDAI raised $221m in a deal that priced below the initial price range.

Since their IPOs, both Qudian and PPDAI have faced allegations of issuing misleading financial disclosures. Qudian closed at 48 per cent below its IPO price on Thursday, while PPDAI was down 44 per cent.

Source: Financial Times

Is Qudian A Bargain Or A Falling Knife? (SeekingAlpha), Rated: A

QD’s stock price has taken a nosedive, plummeting from its $24 IPO price to $12.9 as of 12/19/2017. Given QD’s strong earnings and fast growth rates in the past, the current price may appear to be a great bargain. Is that true?

QD’s strong past operating performance is mainly driven by its online cash-loan business, which brings in 83.3% of its total revenue.

The regulations can be distilled into three key rules: (1) cap the interest rates at 36% (2) limit the leverage of cash-loan companies at 3 or lower, and (3) forbid commercial banks, insurance companies, P2P, etc from investing in cash loans. These rules will put QD’s extraordinary profits to an end, as discussed below.

  • Rule #1: The interest rate caps may turn QD’s strong profits into negative. While QD may have already compiled to the 36% interest cap by the time of its IPO, QD’s revenue will still take a nearly 1/3 cut, holding all else equal.
  • Rule #2: The leverage limit will bring QD’s entire cash-loan business to a halt. According to QD’s 3Q report (Qudian Inc. Reports Third Quarter 2017 Unaudited Financial Results), as of 09/30/2017, its capital structure consists of Liability: 11.18 billion; Mezzanine equity/convertible preferred shares: 5.94 billion;Total Shareholders’ deficit: 1.78 billion. However, the national regulation limits the maximum leverage at 3, or even at 1 according to some regional regulations (21jingji news). It is clear that with 1.78 billion shareholders’ deficit, QD has to raise literally billions of additional funds to satisfy this rule, which is “mission impossible” given the third rule as discussed below.
  • Rule #3: restricting the financing sources will shut the door for QD to raise additional capital.
QD PPDF
Market Cap 4,243 2,175
Total Transactions 3,938 3,231
Revenue 223 192
Net Income 100 83

Brett Diment: 2018 Will be China Fintech’s Breakout Year (FiNews), Rated: A

Fintech will increasingly be associated with Beijing, Shenzhen and Hangzhou in 2018 instead of Silicon Valley, Aberdeen Standard’s Brett Diment details in a contribution for finews.asia.

The Chinese online-payment industry already accounts for around half of global transactions. Alipay, operated by Alibaba’s financial arm, is the market leader.

But Tencent’s Tenpay has been catching up fast. Tenpay’s stroke of genius was to allow its users to send electronic hongbao – the red envelopes of money traditionally given as a Chinese New Year gift. Some 16 million online hongbao were sent in 2014 – rising to a billion in 2015. This helped Tenpay’s share of the online-payment market to reach around 40 percent in just three years.

The University of Hong Kong Online Fintech Course Now Open for Registration (Crowdfund Insider), Rated: B

The Fintech MOOC is a six-week online course on innovations in finance and is designed to provide a foundational understanding of the global changes impacting all financial services.

European Union

Mayo businesses raise almost €800,000 through Linked Finance (The Connaught Telegraph), Rated: A

LINKED Finance, Ireland’s leading peer-to-peer (P2P) lending company, has raised almost €800,000 for Mayo-based businesses.

Eighteen Mayo businesses, including Doherty for Men, Main Street, Castlebar, and Electric Escapes, based in Westport, have raised funds through Linked Finance’s online lending platform (www.linkedfinance.com) to facilitate business growth.

Electric Escapes has raised €50,000 over two separate funding rounds, facilitated through the platform.

PayPal backs fintech deposit marketplace Raisin (AltFi), Rated: AAA

Raisin has secured an undisclosed sum of investment from digital payments platform PayPal. The money will be used to accelerate the growth of Raisin across its core European geographies.

International

Blockchain is “no longer in proof of concept” phase (Global Trade Review), Rated: AAA

Sin has just helped launch the world’s first cross-border bancassurance distributed ledger technology (DLT) platform, working with China Life Insurance and Guangfa Bank in Macau.

In another sign that the technology may be fit for commercial purpose, SME lending platform ModulTrade has settled its first blockchain-based export transaction out of China.

This transaction was small –  just over US$1,000 – but again shows that the technology is beginning to be used outside of the laboratory.

The company teamed up with Rabobank to complete an inventory financing transaction on the blockchain that resulted in a real-time payment for farmers.

All payments were made in real time, using a Rabobank-backed digital dollar, pegged to the Aussie dollar. The digital dollar was issued and cleared by a central issuing and settlement institution.

BENCHMARKING DISTRIBUTED LEDGER TECHNOLOGY (All About Alpha), Rated: A

Two scholars affiliated with the Cambridge Centre for Alternative Finance, in Great Britain, have prepared a fascinating overview of the present state of blockchain and distributed ledger technology (DLT).

  • The protocol layer of this ecosystem is only slowly maturing, and the limit of this maturation is one of the key challenges for the broader adoption of DLT;
  • Most users experiment with only small-scale, isolated layers, with live applications allowed only as “permissioned” layers;
  • There is an increasing focus on creating common standards of enterprise DLT frameworks that will allow for interoperability, but this effort to overcome fragmentation is itself fragmented into “a variety of consortia”;
  • Ethereum in particular has been tested at 57% of central banks, either via the public network or a permissioned version.

Nearly half of the surveyed DLT start-ups are in North America (47%). The second largest group by continent is that which hails from Europe (28%), then 19% (Asia Pacific).

But employment isn’t precisely aligned with the number of enterprises on each continent. A full 61% of employees working in this field are in North America, and only 13% are in Europe.

RCN ANNOUNCES DECENTRALAND PARTNERSHIP (Bitcoinist), Rated: A

Earlier this week, RCNannounced their new partnership with Decentraland, the blockchain-based virtual reality platform where users can acquire virtual land to create and monetize their content.

Under the new partnership, RCN will be able to integrate its credit protocol with the Decentraland platform. This will enable users who own plots of land, content, or businesses created in the 3D world to issue and receive loans.

The Top FinTech Trends of 2017 … were they? (The Finanser), Rated: B

Rise of InsurTech

True. I’ve seen a lot of InsurTech movement this year with a number of standout start-ups like BackmeupBrollyBuzzmoveCuvvaInmybagLuther and Neos.

Rise of RegTech

Yep, I’ve heard more about RegTech this year than ever before, although that’s unsurprising when most banks have at least two staff checking the work of each employee (Citibank has 40,000 compliance people!). Consultancy picks out 100 of the most innovative firms in this space.

Platforms, APIs and Open Banking are the key

I feel like I’ve been talking platforms all year and, with PSD2 and Open Banking coming into play in January 2018, it is certainly true that platforms, APIs and Open Banking have definitely been the theme of 2017.

China and emerging markets focus

Ah yes, I definitely think this year has been a big year for financial inclusion and discussions of Ant Financial and Tencent.

Australia/New Zealand

Banking without the banks: the state of peer-to-peer lending three years on (The Spinoff), Rated: AAA

In 2014, New Zealand was one of the first countries to legalise peer-to-peer lending.

For the latter, Snowball Effect and PledgeMe led the way with the FMA awarding its first equity crowdfunding licences to the two firms. For the former, the first licence for P2P lending was granted to Auckland-based platform Harmoney, which was founded by Neil Roberts that very same year.

To date, there are eight licensed P2P lending services currently operating in New Zealand with more than 20,000 investors currently registered with P2P lending intermediaries. When it comes to borrowers, there are more than 200,000 individuals currently registered with P2P services.

Source: The Spinoff

Since launching in September 2014, it’s lent more than $655 million via 37,000+ loans and paid more than $87 million interest in total. In the most recent financial year, Harmoney saw over more than 830,000 investments made in loans by almost 5,400 unique investors.

Source: The Spinoff
India

Want Good Financial Advice? Ask a Digital Lending Platform (BW Disrupt), Rated: A

The need for credit can come for a variety of reasons, and can be catered to by a vast plethora of different loan products.

Clearly, if you had to get good financial advice, AI-leveraging algorithms are a better bet than humans. So why not use the same technology to help individuals and SMEs find the right credit options for their needs?

Asia

NewsBTC Interviews the Crowd-genie Team (NewsBTC), Rated: A

NewsBTC: Why is licensing so important? How difficult is it to get in Singapore? 

Crowd-genie: Being registered and licensed are two different stories. As peer to peer lending platform involves enormous monetary transactions, a securities license is crucial for regulated lending activities.

NewsBTC: Can you please explanation of how reputations coin work?

Crowd-genie: For each repayment, from the borrower to lenders, we will incentivise on-time payment by adding CGCOIN “Credits” to the borrowers’ wallets. This will be a spendable asset that will be tracked separately in the Digital Passport. The more CGCOIN Credits earned, the higher their reputation, and that in turn, will increase their chances of getting higher investments from more lenders and/or a lower interest rate.

 

Source: NewsBTC
Cayman Islands

Robot to speak at Cayman Alternative Investment Summit (Cayman Compass), Rated: B

Sophia, the world’s first robot to be granted citizenship of a country, will be one of the speakers at the Cayman Alternative Investment Summit on Feb. 8 to 9, 2018, organizers announced Thursday.

At the Cayman Alternative Investment Summit, Sophia will be interviewed on stage by a representative from event sponsor KPMG.

Organizers say the robot’s appearance complements the theme of the investment conference, “Wired: the rise of alternative investments in a digital age,” which targets opportunities at the intersection of alternative investing and technology.

Authors:

George Popescu
Allen Taylor

Monday December 11 2017, Daily News Digest

Lending Club stress test

News Comments Today’s main news: SoFi completes $769M student loan securitization. Affirm is headed to unicorn status. Funding Circle SME fund to double. Funding Circle SME Income Fund NAV, profit to rise. Zopa investors can move repayments into IFISA automatically. Harmoney says Kiwi SMEs are tapping into P2P for cash flow more. TransUnion launches Mobile Score Card in Africa. Today’s main […]

Lending Club stress test

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

Asia

MENA

Africa

News Summary

United States

SoFi Announces Completion of $ 769 Million Student Loan Securitization, Bringing Total ABS Issuance in 2017 to $ 6.9 billion (PR Newswire), Rated: AAA

SoFi announced today the closing of its $769 million offering of SoFi Private Student Loan notes (SoFi 2017-F).

The closing marked the company’s 12th ABS transaction this year, bringing its total issuance in 2017 to $6.9 billion, up from $4.2 billion in 2016.  The 2017 total includes six Student Loan ReFi and six Consumer Loan transactions.

LendingClub’s Investor Day Highlights (PeerIQ), Rated: AAA

Rep. Patrick McHenry (R-NC) sent a letter to the Cleveland Fed accusing them of using their study on peer-to-peer lending to block bill “Protecting Consumers Access to Credit Act” (H.R. 3299). The bill proposes to overturn a decision in the Madden v. Midland Funding case against the “valid when made” clause which allows sales of legally made loans in one state to parties in other states, even if the loan exceeds the interest rate cap in the state of the borrower.

Positioning and Strategy 

LendingClub doubled-down on the capital-light marketplace lending model, and emphasized the role of technology, data & analytics, and the “virtuous cycle of scale.”  LendingClub also emphasized the new product innovation on the investor side of its business – notably the Exchange Traded Product (ETP) which we think may have been lost in the immediate reaction to revised guidance.

LC sees an addressable market opportunity of $300-350 Bn in the credit card refinance and debt consolidation spaces, and a $38 Tr pool of addressable capital on the investor side of its marketplace.

LC has a two-pronged strategy to attack these markets and meet EBITDA margin goals:

  1. 2018: Focus and Invest
    1. Accelerate personal loans growth while prudently managing credit
    2. Invest in auto and leverage secured capabilities for personal loans
    3. Strengthen Investor franchise by expanding securitization and growing new structures
    4. Address legacy issues
  1. 2019-2020: Expand and Deepen
    1. Expand lead in personal loans through further data, analytics, and product and testing efforts
    2. Expand role in the borrower journey through new products and services
    3. Expand investor universe to lower cost of funds, improve resiliency, capture more value
Source: Lending Club

As seen in the chart below, LendingClub is positioning MPL loans as a new asset class that offers higher risk-adjusted returns as compared to other fixed incomealternatives, while offering lower interest rate risk. LC has delivered historical annualized loss-adjusted returns of 6.7% on its Prime loans portfolio, and 10.9% on its Near-Prime loans portfolio.

Source: LendingClub

The top question on investors’ minds remains the expected performance of MPL loans thru a recessionary scenario in the chart below, LendingClub published estimates of expected annualized charge-offs on Prime loans in a baseline scenario of 5.5%, in a moderate recession scenario of 7.9%, and in a protracted slump scenario of 11.5%.

Source: LendingClub

Why it is easier now for small businesses to go global (Born2Invest), Rated: AAA

It has become significantly easier today to run a multinational business compared to a few years ago. This is down to the increasing adaptation of technological advances to various business operations.

Markets are becoming decentralized and barriers to entry are minimal

The internet is central to the paradigm shift we have witnessed in the business environment over the last couple of decades. For instance, you do not have to live in the U.S. to sell your products or services to the Americans. Even where certain levels of certification are required, these can easily be done online thereby allowing a foreigner to obtain the required credentials for operating a business that targets American citizens. Therefore, market access is global, decentralized and without limits for anyone looking to expand exponentially.

Another thing that is influencing growth strategies among small businesses is the ease of access to financing.

Ideally, most businesses would opt for local lending. However, with the growing popularity of online-based peer-to-peer lending platforms like Lending Club, small businesses can now access financing regardless of whether they have security. But it is not as easy and straightforward as it sounds. According to National Business Capital, the process can be as tasking as trying to apply for a securitized loan with background checks and credit scores playing a crucial role.

Nonetheless, lending institutions are being pressured by the increasing number of peer-to-peer lending platforms. This has forced them to lighten up their lending requirements in a bid to increase their loan portfolios and subsequently interest incomes. In this case, we could say that technological advances and the emergence of alternative lending solutions have forced the hand of the credit market to create a more conducive environment for businesses to thrive.

Max Levchin’s lending startup is heading for unicorn territory (Axios), Rated: AAA

Affirm, the personal credit startup led by PayPal co-founder Max Levchin, has filed a stock authorization form in Delaware that would allow it to raise up to $210 million in new funding at around a $1.4 billion pre-money valuation.

How Max Levchin cofounded and built PayPal into a payments monster after 6 pivots and a bitter rivalry with Elon Musk (Business Insider), Rated: A

He now spends most of his time at Affirm, which offers small loans but doesn’t charge any penalties or fees.

 

PayPal founder talks digital payments, bitcoin (The Seattle Times), Rated: A

Q: Are digital payments progressing as quickly as you hoped since you started PayPal?

A: They are moving at a good pace, adjusted for just how large and complicated the market is. It’s highly regulated and there are a lot of things to be careful about. The elephant in the room for the last seven or eight years has been cryptocurrency.

Q: What are some of the most interesting areas of digital payments?

A: A good example is international remittances, where companies can pop up and do well. They’re the guys who figured out how to do it much cheaper and much more transparently with much lower friction to both the recipient and the sender.

Can I get my pay instantly? New payday apps give workers fast access to wages — for a price (Mic), Rated: AAA

And while many workers typically wait anywhere from once a week to once a month to get the money their company owes them, new apps from financial technology startups like DailyPay, FlexWage and PayActiv are giving workers everywhere — including at Goodwill, McDonald’s and Uber — faster access to wages, and sometimes even on the same day they clocked their hours.

Proponents like Shah say faster access to wages can motivate hourly workers to put in longer hours (since they’ll reap the rewards more quickly) and can reduce their reliance on abusive payday loans with sky-high interest rates that can leave borrowers in an unending debt cycle. Indeed, taking out a single $100 payday loan for two weeks could eat up more than $130 out of your next paycheck, once you factor in interest and fees. Repeat that every two weeks and you are down hundreds of dollars for the year — equivalent to a full month’s rent for many.

With DailyPay — which is used by hourly workers at DoorDash delivery service, the Maids residential cleaning service and Kellermeyer Bergensons Services facilities management firm — employees can access 100% of their accrued and unpaid net wages for a fee of $1 to $3 per transaction. The money can be deposited directly into their bank account or put on a prepaid card or payroll card on the same day.

Another app called Earnin lets workers withdraw up to $100 a day and $500 per pay period in advance of receiving their regular paycheck. While it charges no fees, it does give workers the option of “tipping.” The service then withdraws funds directly from your checking account after you’ve been paid.

FlexWage, for example, only lets workers tap up to 70% of their unpaid wages between regular paychecks (for a $3 to $5 fee per transaction). PayActiv gives them access to 50% of their net pay for every 30 hours worked for a $5 fee.

Instant Financial lets employees withdraw half their daily net pay every day at no cost at all: Instead they charge employers $1 per month per employee enrolled in the program.

Source: Mic

There’s an attractive way to profit from the $ 1.3 trillion student-loan bubble (Business Insider), Rated: A

According to Goldman Sachs, the outstanding student loan balance has reached $1.3 trillion in face value, about the size of the high-yield corporate-bond market. This outstanding debt is not without problems, as it delays homeownership for some millennials and cuts their disposable income.

It’s the $190 billion of outstanding loans that are held within asset-backed securities (ABS) refinanced by private lenders such as SoFi.

“Recent marketplace student loan deals have featured borrower pools with average credit scores above 770 and average borrower incomes above $160k: a very different credit profile than the government guaranteed portfolios.”

Source: Business Insider

Some lenders stand to gain as others leave auto niche (American Banker), Rated: A

The indirect auto business is in a state of transition.

TCF Financial in Wayzata, Minn., surprisingly walked away from the segment on Dec. 1, and others like Regions Financial and Fifth Third Bancorp have tapped the brakes for reasons ranging from competition and credit concerns to regulatory pressure and low yields.

Auto sales are also projected to fall by 7% this year, according to Autodata and the Bureau of Economic Analysis.

Financial Literacy Curricula for Non-Prime Consumers Should Focus on Relevant Topics, Attainable Goals (BusinessWire), Rated: A

America’s financial literacy programs may be failing the very people who need them most, according to newly released research from Elevate’s Center for the New Middle Class (CNMC). Non-prime consumers learn and retain financial education material differently than their prime peers, the research indicated.

To be most effective for a non-prime audience, financial literacy curricula should:

Be trans-media. Use different media types to deliver different messages.

Address the unique challenges of non-prime Americans. A financial wellness program will be more effective for non-prime Americans if it directly addresses their unique challenges – things like income volatility and a lack of available resources. It also needs to identify outcomes that are relevant, attainable, and meaningful to them.

Highlight the next immediate steps.

Focus on building their credit. Non-prime Americans understand that their credit scores affect every part of their financial lives and they are hyper-focused on what they can do to improve them. Anchoring a financial wellness program on credit score management can actually lead non-prime consumers to understand broader financial management principles.

Ken Rees of Elevate (Lend Academy), Rated: A

In this podcast you will learn:

  • The evolution of Ken’s career that led to the founding of Elevate.
  • The different products that Elevate offers today.
  • A profile of the typical Elevate customer.
  • How Elevate’s products help their customers’ financial situation.
  • Their typical loan terms.
  • Ken’s view of the new CFPB rules on small dollar loans.
  • How Elevate’s underwriting process works.
  • The total originations for Elevate in the US and UK.
  • The importance of data analytics in their business.
  • The percentage of customers coming to them through a mobile device.
  • How they can underwrite 95% of their loan applications in an automated way.
  • How their charge-off rates have been trending.
  • The different funding sources they use to fund these loans.
  • What their Center for the New Middle Class does.
  • How their IPO process went and what it is like being a public company.

 

Winners and Losers in the CFPB Mess (Credit Union Times), Rated: A

Winners

Payday Lenders – Like them or not, the payday lending industry was in for a huge takedown under the CFPB’s final rules that will restrict the way they do business.

Still, the industry now has a friend rather than a foe in the director’s office. And that can’t hurt for an industry that just weeks ago appeared to be headed for a major takedown.

Attorneys general call for Consumer Financial Protection Bureau independence (Lake County News), Rated: B

California Attorney General Xavier Becerra on Friday joined attorneys general from 17 other states in calling on the Trump Administration to respect the independence of the Consumer Financial Protection Bureau.

PNC to offer consumer loans through mobile devices (American Banker), Rated: A

PNC Financial Services Group plans to introduce a consumer lending product that it will market through both its mobile wallet and in new branches.

The $375 billion-asset Pittsburgh company intends for the new loan product to be available on a national scale, Chairman and CEO William Demchak said this week.

Kaplan Fox Announces Investigation of Qudian Inc. (Business Insider), Rated: A

Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating Qudian Inc. (“Qudian” or the “Company”) (NYSE:QD) on behalf of investors who purchased Qudian American Depository Shares.

On October 17, 2017, Qudian issued 37.5 million American Depository Shares at $24 per share under a Registration Statement and Prospectus filed with the U.S. Securities and Exchange Commission, for gross proceeds of $900 million.

On November 21, 2017, Chinese media sources began to reveal that the personal information of millions of Qudian customers were allegedly available for sale on the black market. On November 23, 2017Bloomberg reported that “Chinese regulators and police are investigating a potential leak of data from online lender Qudian Inc., according to people with knowledge of the matter.

Meet Tim Russi, President of Auto Finance at Ally Financial (Vator.TV), Rated: A

VatorNews: How is technology influencing and impacting Ally’s auto business? Why is this technology integral to the company’s future in this arena?

Tim Russi: We’re a company that’s 100 years old, and you don’t become a 100 year old company in today’s world if you don’t have the ability to reinvent yourself.

Ally operates in what we in the lending world refer to as an ‘indirect model,’ so dealers originate the loans and leases and then we purchase them from the dealers. The speed and access of the indirect model has changed significantly in the last 15 years. The industry was very disruptive in creating online portals for dealers to be able to submit applications to lenders, so the lender didn’t have to be on site to do the loans.

VN: How have you seen technology in the auto space evolve in that short amount of time? How quickly is the space changing?

TR: You look at a lot of the lending models today and they’re going direct to consumers, and we’ve even got a direct model, because as you look at digital and the consumers doing shopping online, and wanting to buy, there’s no reason they shouldn’t be able to select and purchase the vehicle and obtain financing right at the ‘point of sale.’ If the sale’s going to be online, not in the dealership, we want to make sure we’re there and then fulfillment can occur at the dealership.

VN: How has SmartAuction changed the way dealers sell and buy vehicles? What kind of ROI have you seen?

TR: SmartAuction, we actually developed in 1999 and we’ve done over 5 million transactions. We have 20,000 vehicles that are available for sale or purchase in the marketplace. It’s a wholesale marketplace so dealers can post and buy.

Notable Real Estate Trends To Watch For In 2018 (Forbes), Rated: A

3. Fractional Investing

As peer-to-peer lending and crowdfunding catch mainstream attention, folks looking for greater diversification and passive investment opportunities will engage in factional investing. The last few years have seen some extremely credible startups innovate in this space, and next year could lead to individuals moving away from sole ownership to fractional ownership via crowdfunding. – Sohin ShahInstaLend

7. On-Demand Access For Renters

We often hear from renters that they are too busy to sweat the small stuff. They want immediate tour confirmations, like booking a restaurant on OpenTable, and near-immediate confirmation that they have leased, like booking a hotel. This real-time service expectation from a new generation of renters is exactly what we plan to cater to in 2018. – Anthemos GeorgiadesZumper

Peer-To-Peer Lending : Here Are 5 Things To Know (NDTV), Rated: B

  1. P2P lending is a form of financial innovation but the concept that works behind it is the same as in the case of the banking system.
  2. Any lay investor or lender can lend money to any borrower who is registered with the P2P platform.
  3. Borrowers and lenders enter into a contract according to which they agree to the amount disbursed and the rate of interest.
  4. A borrower can raise loan at the rate of interest, which is inversely proportional to his credit score.
  5. Each P2P lending platform charges a fee for the transactions that are fructified at their platforms.

Trump says fines for Wells Fargo will not be dropped (Des Moines Register), Rated: B

President Donald Trump weighed in on an investigation into scandal-plagued Wells Fargo, tweeting Friday that fines and penalties against the bank would not be dropped, and may actually be “substantially increased.”

Trump’s statement comes a day after Reuters reported that Mick Mulvaney, the president’s budget director and now acting director of the Consumer Financial Protection Bureau, was weighing whether the bank should have to pay tens of millions in fines already levied against it for mortgage lending abuses.

United Kingdom

Funding Circle SME fund size to double following C share merger (P2P Finance News), Rated: AAA

THE FUNDING Circle SME Income Fund (FCIF) is set to double the value of its assets after announcing plans to convert its conversion shares into the ordinary portfolio on 20 December.

The investment trust, which invests in loans on the Funding Circle platform, revealed in its half-year report that the move will increase the fund’s size to around £310m.

Currently the ordinary shares are worth £165.3m and the C shares, launched in April, are worth £142.3m.

Funding Circle SME Income Fund Net Asset Value And Profit Both Rise (Morningstar), Rated: AAA

Net asset value per ordinary share was 100.55 pence per share, representing an increase in the total NAV to GBP167.0 million from GBP165.0 million at the start of the half, which ended September 30. Net asset value total return was 12%.

For the C shares, net asset value was 99.82p, having only been issued in April. These shares are due to convert to ordinary shares on December 20.

Zopa investors can now automatically move repayments into their IFISA (P2P Finance News), Rated: AAA

ZOPA investors can now automatically re-direct their repayments into their Innovative Finance ISA (IFISA).

The peer-to-peer consumer lender confirmed this week that customers can gradually move their Zopa money into the tax wrapper without having to sell loans or pay extra fees.

Moving money into the IFISA will contribute to the investor’s annual tax-free allowance, Zopa said. However, once money is in the IFISA and has been lent out, those repayments will not contribute to the IFISA allowance.

Why banks will share your financial secrets (BBC), Rated: AAA

Customers of nine of the biggest UK banks have received letters and emails in recent weeks informing them that their information can be shared, securely, with other firms. All they need to do is give their permission.

The UK’s competition watchdog says this so-called Open Banking regime will revolutionise many people’s financial lives, helping them get better deals.

Most people stay loyal to their bank. The Competition and Markets Authority (CMA) found that only 3% of personal customers move their accounts each year.The UK’s competition watchdog says this so-called Open Banking regime will revolutionise many people’s financial lives, helping them get better deals.

How will it work?

In practice and in time, customers will probably see a dashboard on their bank’s mobile phone app.

This will show them how much money they have in their different accounts, with different banks, and eventually how much they owe on credit cards and store cards too.

A set of computer programming rules in the UK, called Application Programming Interfaces (APIs), will ensure all these new services and banks to talk to each other.

Applications for mortgages could be dealt with more quickly, as providers and brokers could access spending history, rather than ask for printed copies of the last three months of bank statements.

Anne Boden, of mobile-only Starling Bank, says customers will be able to see exactly what they bought for lunch each day, an app could analyse the calorie levels, and then cross-check it with how much exercise that person is doing.

Customers could be bombarded with invitations to try out a new service, and could quickly lose control of their financial data, according to Mick McAteer, of the UK’s Financial Inclusion Centre.

He describes Open Banking as “a daft idea”, which will lead to more financial exclusion for those already on low incomes.

Unscrupulous individuals would be keen to access this data and use it alongside information revealed on social media to build up a complete set of personal information.

The UK needs its own version of business development companies (Financial Times), Rated: A

The great scramble for yield has seen asset managers hunt down ever more alternative sources of income. Many are starting to move into the world of shadow banking, alternative forms of lending in areas where banks are not competing for business as much as they used to.

But evidence from the US suggests that the biggest opportunity probably lies in what is called direct lending, preferably through a structure that might mimic US business development companies. These BDCs are a large and diverse universe of tax efficient, listed, closed-end funds resident in the US. Collectively they are worth at least $100bn, according to Keefe, Bruyette & Woods, the investment bank, nearly all of which has been lent to mid-market private businesses in the US — capital that has arguably helped to improve the nation’s corporate productivity and profitability. Income-hungry investors have also snapped up these funds, with average yields well over 9 per cent per year.

Direct lending companies will service the mid-market secured lending space for loans above £50m but they, in turn, lack an outlet into the public markets typically afforded by BDCs in the US.

Industry reacts to Cambridge report on alternative finance (AltFi), Rated: A

The Cambridge Centre for Alternative Finance’s report, entitled Entrenching Innovation, found the UK online alternative finance market grew 43 per cent in 2016 to £4.6bn.

“Abundance was particularly pleased to see our category (debt securities) confirmed as the fastest growing of all at 1,147 per cent year on year, with an accompanying 40 per cent increase in average deal size to £1.4m. It was also good to see hard evidence of investors in debt securities conducting their own due diligence and being comfortable with the risk/reward offers they found,” he said.

Anil Stocker, CEO and co-founder of fintech business finance firm MarketInvoice, says as awareness increases, which will be propelled by PSD2, so too will the use of alternative finance platforms.

The UK ranks top of all major developed economies for establishing new businesses (City A.M.), Rated: A

The UK outranked all other major developed economies in terms of the number of businesses established last year, according to figures from accounting group UHY Hacker Young.

It became home to 218,000 more businesses in 2016, a rise of six per cent over year-on-year. Meanwhile, other major developed economies including France, Germany, Italy, Japan and the US saw an average two per cent rise in number of businesses over the year.

FCA to change advice definition in January (FT Adviser), Rated: B

The Financial Conduct Authority has said it will introduce its new definition of advice from Wednesday 3 January.

As part of this it has amended its handbook to change the definition of financial advice, meaning only advice which offers a personal recommendation will be considered regulated.

China

Chinese Banks Face Potential Capital Shortfall, IMF Says (WSJ), Rated: AAA

Chinese banks may have insufficient capital to weather potential losses from the nation’s rapidly mounting credit risks, the International Monetary Fund said, in a broad review of China’s financial system.

With Chinese banking-sector assets, at $34.7 trillion, soaring to three times the size of China’s economic output, at $11.2 trillion, the IMF said that “holding more capital would strengthen the banking system and bolster financial stability,” according to a report on Thursday.

The IMF said China should consider boosting risk-weighted assets at its banks by 0.5% to 1% over the coming 12 months.

Source: The Wall Street Journal

 

WeiyangX Fintech Review (Crowdfund Insider), Rated: A

LexinFintech, China’s online provider of installment-based loans has decided to conduct extra due-diligence investigation for its IPO in the US.

This week, KPMG China announced the 50 leading Fintech companies operating in China and published a related insight report.

(Note: Companies are arranged in alphabetical order based on the first letter of their Chinese name in pinyin.)

  1. Anxindeli
  2. Baidu Finance
  3. BAIFENDIAN
  4. 100credit
  5. ICE KREDIT
  6. TENPAY.COM
  7. Dianrong.com
  8. RQuest
  9. FUTUNN.COM
  10. ChinaPnR
  11. PING ++
  12. 3GOLDEN
  13. JFZ.COM
  14. JD Finance
  15. Juxinli
  16. QUARK FINANCE
  17. 99Bill
  18. Tigerbrokers
  19. QuantGroup
  20. LENGJING INFO
  21. LU.com
  22. Ideacome
  23. MSXF
  24. Ant Financial
  25. PINTEC
  26. QFPAY
  27. Qudian
  28. UCREDIT
  29. Rong360
  30. Wecash
  31. ChinaScope
  32. BBD
  33. Souyidai
  34. Suanhua Credit
  35. Feidee
  36. Taiyiyun
  37. TalkingData
  38. Tcredit
  39. Beagle Data
  40. Tong Dun
  41. Wacai
  42. Wei Zhong Shui Yin
  43. WeBank
  44. WeLab
  45. u51.com
  46. Onchain
  47. Hcspark.com
  48. Zipeiyi
  49. Zhongan Insurance
  50. Zuihuibao

New guidelines for banks to support P2P lending (Taipei Times), Rated: A

The Financial Supervisory Commission on Thursday gave its nod to guidelines on collaborations between peer-to-peer (P2P) lending platforms and commercial banks, in a move to support the development of emerging financial services.

Under the guidelines, banks may provide custodian and trust account services to P2P platforms, as well as transaction processing to meet rules against collection of deposits by non-bank entities, the commission said.

However, banks are barred from making recommendations on decisions about loan approval, interest rates and principal amounts.

The guidelines also regulate the so-called peer-to-bank (P2B) model, where banks participate as lenders on P2P platforms.

CreditEase’s CEO Ning Tang spoke about FinTech and innovation at Fortune Global Forum (Business Insider), Rate: A

Ning Tang, Founder and CEO of CreditEase, attended the 2017 Fortune Global Forum on December 6-8 in Guangzhou. With the theme of “Openness & Innovation: Shaping the Global Economy,” the Global Forum convened world leaders, senior executives and prestigious scholars to discuss the dynamic frontiers of international commerce.

Tang stated that the Chinese FinTech industry still sees great potential in the coming decade represented by development in applications such as microloans for SMEs, crowdfunding, robo-advisory, insurance technology, and blockchain products and services.

India’s FDI climate good for China investment (China Business Law Journal), Rated: A

Mumbai-based fintech start-up Kissht recently raised US$10 million in funding primarily from Fosun International, a Chinese investment consortium. The Krishnamurthy & Co team acted for and represented Kissht and its owner OnEMI Technology Solutions, led by Mumbai-based partner Sanket Sethia and associate Vwastav Ghosh.

European Union

Moody’s highlights improving performance for European SME ABS next year (FTSE Global Markets), Rated: AAA

The performance of small and medium-sized enterprise (SME) asset-backed securities (ABS) will remain stable across all major markets in Europe and issuance volumes will likely increase slightly, according to the 2018 outlook for European SME ABS from Moody’s. However, emerging political risks have created some uncertainty in affected markets, with a limited effect on securitised deals in the United Kingdom (UK), and potentially negative effects in Spain.

Billie Raises €10m Series A (LendIt), Rated: A

Billie is an invoice finance platform that launched earlier this year; the round was led by Creandum with participation from existing investors Speedinvest and Global Founders Capital; the company focuses on complete automation with no human interaction; It was co-founded by Matthias Knecht and Christian Grobe; Billie also secured a refinancing facility from a major German bank.

International

Regulated Crypto Platform Plays By the Rules and Disrupts Trading Model (Coin Telegraph), Rated: A

Trade.io’s solution is to develop an exchange platform for the sharing economy where traders can not only exchange tokens, crypto and fiat currencies and other assets but also share in the risk and revenue of the liquidity pool. To participate in the liquidity pool, members buy 2,500 Trade Tokens secured by financial assets in their trade.io wallets. Crypto and fiat currencies are accepted as collateral.

Trade Token owners share in 50 percent of the gains or losses of the liquidity pool, which are distributed to the wallets of pool participants. Besides trading fees and commissions, revenue is earned from investment banking and P2P lending fees.

Australia/New Zealand

Harmoney Reports Increase in Kiwi SMEs That Are Tapping into P2P Lending for Business Cashflow (Crowdfund Insider), Rated: AAA

Earlier this week, Harmoney announced there has been an increase in Kiwi SMEs that are tapping into peer-to-peer (P2P) lending for business cashflow.

The New Zealand online lender stated it estimates $100 million will be loaned to business accounts through its lending platform within the next six to twelve months. Currently, the average loan amount for business cashflow on its platform is $25,000.

Sydney fintech Avoka raises $ 16m in Roger Allen-led round (Financial Review), Rated: A

Avoka Technologies, a fast-growing Sydney-based provider of customer acquisition services to financial institutions, has raised $16 million from investors, including prominent venture capitalist Roger Allen, as offshore revenue rises above 75 per cent and the headcount moves towards 300.

Avoka offers a software-as-a-service platform called Transact, which claims to enable institutions to launch new digital products in weeks rather than months, and monitors customer interaction with them once established.

BankWest’s mobile banking app was built on Avoka, while Mr Copeland said HSBC was about to launch new credit cards whose customer interface was developed through the platform.

Asia

Crowdcredit, Inc from Japan (Makoto UJIKE Email), Rated: AAA

Crowdcredit is a cross border online lending platform, which raises funds from Japanese investors and finances overseas financial institutions, SMEs, or individuals.

Crowdcredit, Inc. announced its completion of appx. USD3.5mn financing mainly from Femto Partners, one of the most influential venture capitals in Japan.

Crowdcredit track record;

  • – Established in January 2013
  • – Started raising funds since June 2014,
  • – Finances financial institutions, SMEs, or consumers in Peru, Cameroon, Estonia, Finland, Spain, Latvia, Lithuania, Georgia, etc.,
  • – Has registered investment user of 8,000+
  • – Has issued funds in total US$ 45.5mm, and
  • – Issues funds of US$ 4mm monthly with increasing trend.
Source: Crowdcredit
Source: Crowdcredit
Source: Crowdcredit

Learn more about Crowdcredit here.

Crowd-lending platform New Union awarded CMS license (The Edge Markets), Rated: A

Crowd-lending platform New Union has been awarded the full Capital Markets Service license (CMS) by the Monetary Authority of Singapore (MAS), and announced a potential deal flow pipeline of about S$2 million to be launched soon.

P2P lending platform Validus Capital gets licence to deal in securities in Singapore (Business Times), Rated: A

VALIDUS Capital announced on Monday that it has been awarded a full Capital Markets Services (CMS) licence by the Monetary Authority of Singapore (MAS), to deal in securities – a move that may give Singapore’s small and medium-sized enterprises (SMEs) more access to financing opportunities.

Singapore banks can save over 10% from fintech (SBR.com.sg), Rated: A

Moreover, about 41% of banked balance has now abandoned traditional channels.

MAS estimates fintech payments already takes up 20-50% of household consumption if the probability of payments disintermediation is high in the next five years.

A majority of 56% of the banked population is also willing to shift their savings into a pure play digital bank. An average of 41% of total balance has already been shifted.

Equity crowdfunding and peer-to-peer lending (The Star), Rated: B

Equity crowdfunding has become an increasingly popular way for early-stage and early-growth companies to tap investors attracted by the potential for high returns. An investor who has spent the last couple of years lamenting over the lacklustre performance of his stocks sees ECF as an investment channel that claims to offer even better returns.

P2P investing is garnering a lot of interest from would-be investors who are looking for something different and better than banks’ fixed deposits.

ECF means investing in very early stage businesses and as such, there are inherent risks to be aware of such as the likelihood of bankruptcy, in which case, you will not be able to recover your original investment.

With P2P investing, the most obvious risk that comes attached is of course the possibility of the borrower defaulting on the debt. As the reasons for not being able to repay the loan are typically financial, any subsequent attempts to recover your investment may prove futile if the business indeed has gone under.

Key tips to investing

1. Know where ECF and P2P stands in your strategic asset allocation.

2. Ensure you are investing in best of breed by comparing apple to apple when it comes to risk versus returns.

a) Ensure the platform is approved by SC.

b) Research each scheme on the platform as not every one is the same.

c) Read the fine print in the platform operator’s agreement and know the rights and liabilities of each party. Pay particular attention to the risk warnings in the agreement with regards to potential loss of invested capital and the unsecured nature of the investment (for P2P).

3. Diversification is key.

4. Monitor how your investments are performing.

5. Consider the time required before you see your investments come to fruition.

MENA

New Amendment To Address Reward-Based Crowdfunding And What To Expect (Mondaq), Rated: AAA

A new omnibus code that amends, amongst others, the Capital Markets Code (“CMC“) has been enacted by the Turkish parliament and published in the Official Gazette on 5 December 2017.

The CMC amendment primarily refers to reward-based crowdfunding (i.e. receipt of goods, reward or pre-sales in return or investment-based or loan-based crowdfunding) while donation-based crowdfunding where the investor donates the money with no return is still subject to aid and donations legislation. The said amendment limits crowdfunding to project or venture financing and only through crowdfunding platforms that are prior-recognised by the Capital Markets Board (“Board“).

Crowdfunding platforms can only operate in Turkey once they obtain the necessary permission from the Board.

Fintech Is The New Oil In The Middle East And North Africa (Forbes), Rated: AAA

Over the past decade, fintech startups in the region have raised over $100 million in funding, and investment is predicted to double by 2020, according to the State of Fintech report. Disclosed investment infintech had jumped 100% to over $35 million by October 2017 — Paytabs ($20million), Souqalmal ($10 million) and Beehive ($5 million) — compared to $18 million last year. The number of fintech startups also increased from 46 in 2013 to 105 in 2015. It is estimated that it will more than double again to 250 by 2020, according to the report.

Aside from the fact that the sector encompasses every tech startup active within the financial services industry, beyond the ones that specialize in online payments or money transfers, e-commerce in the region is set to quadrupleuntil the end of this decade. Additionally, despite the ubiquity of smartphones and internet connectivity, 86% of the adult population in the region is unbanked, while three in four GCC bank customers are ready to switch banks for a better digital experience.

Boosting financial inclusion is crucial for economic diversity and growth across the region. Moussa Beidas, co-founder of Dubai-based startup Bridg, which allows smartphone-to-smartphone payments using bluetooth, says fintech has become an innovative way to bridge the divide and provide cheaper services to the unbanked.

Significant banking changes due to tech innovation (Gulf News), Rated: A

The rapid advancement in innovation is transforming the financial services industry, especially the banks, as technology has become an integral part of the business strategy — from initially being just an enabler to now actually streamlining operating processes.

The Middle East has amassed more than $100 million (Dh367 million) in FinTech start-up funding in the past ten years, with 105 FinTech start-ups launching in 2016, with hopes to raise $50 million in funding by the end of 2017.

Banks in the UAE remain the trendsetters, although other GCC countries are not lagging far behind, with several banks in the region embracing FinTech in many different ways.

Africa

TransUnion launches Mobile Score Card solution (IT Web Africa), Rated: AAA

Data firm TransUnion has launched Mobile Score Card, a mobile loan information service that enables lending firms to access a loan applicant’s credit status.

Mobile Score Card is a database solution that continually ‘learns’ based on mobile transactional history.

It also provides mobile lenders with customisable and reliable risk view of the mobile loans. The product targets banks with mobile lending solutions, savings and credit cooperative organisation and independent mobile lenders.

Authors:

George Popescu
Allen Taylor

Monday December 11 2017, Daily News Digest

Monday December 11 2017, Daily News Digest

News Comments Today’s main news: SoFi completes $769M student loan securitization. Affirm is headed to unicorn status. Funding Circle SME fund to double. Funding Circle SME Income Fund NAV, profit to rise. Zopa investors can move repayments into IFISA automatically. Harmoney says Kiwi SMEs are tapping into P2P for cash flow more. TransUnion launches Mobile Score Card in Africa. Today’s main […]

Monday December 11 2017, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

Asia

MENA

Africa

News Summary

United States

SoFi Announces Completion of $ 769 Million Student Loan Securitization, Bringing Total ABS Issuance in 2017 to $ 6.9 billion (PR Newswire), Rated: AAA

SoFi announced today the closing of its $769 million offering of SoFi Private Student Loan notes (SoFi 2017-F).

The closing marked the company’s 12th ABS transaction this year, bringing its total issuance in 2017 to $6.9 billion, up from $4.2 billion in 2016.  The 2017 total includes six Student Loan ReFi and six Consumer Loan transactions.

LendingClub’s Investor Day Highlights (PeerIQ), Rated: AAA

Rep. Patrick McHenry (R-NC) sent a letter to the Cleveland Fed accusing them of using their study on peer-to-peer lending to block bill “Protecting Consumers Access to Credit Act” (H.R. 3299). The bill proposes to overturn a decision in the Madden v. Midland Funding case against the “valid when made” clause which allows sales of legally made loans in one state to parties in other states, even if the loan exceeds the interest rate cap in the state of the borrower.

Positioning and Strategy 

LendingClub doubled-down on the capital-light marketplace lending model, and emphasized the role of technology, data & analytics, and the “virtuous cycle of scale.”  LendingClub also emphasized the new product innovation on the investor side of its business – notably the Exchange Traded Product (ETP) which we think may have been lost in the immediate reaction to revised guidance.

LC sees an addressable market opportunity of $300-350 Bn in the credit card refinance and debt consolidation spaces, and a $38 Tr pool of addressable capital on the investor side of its marketplace.

LC has a two-pronged strategy to attack these markets and meet EBITDA margin goals:

  1. 2018: Focus and Invest
    1. Accelerate personal loans growth while prudently managing credit
    2. Invest in auto and leverage secured capabilities for personal loans
    3. Strengthen Investor franchise by expanding securitization and growing new structures
    4. Address legacy issues
  1. 2019-2020: Expand and Deepen
    1. Expand lead in personal loans through further data, analytics, and product and testing efforts
    2. Expand role in the borrower journey through new products and services
    3. Expand investor universe to lower cost of funds, improve resiliency, capture more value
Source: Lending Club

As seen in the chart below, LendingClub is positioning MPL loans as a new asset class that offers higher risk-adjusted returns as compared to other fixed incomealternatives, while offering lower interest rate risk. LC has delivered historical annualized loss-adjusted returns of 6.7% on its Prime loans portfolio, and 10.9% on its Near-Prime loans portfolio.

Source: LendingClub

The top question on investors’ minds remains the expected performance of MPL loans thru a recessionary scenario in the chart below, LendingClub published estimates of expected annualized charge-offs on Prime loans in a baseline scenario of 5.5%, in a moderate recession scenario of 7.9%, and in a protracted slump scenario of 11.5%.

Source: LendingClub

Why it is easier now for small businesses to go global (Born2Invest), Rated: AAA

It has become significantly easier today to run a multinational business compared to a few years ago. This is down to the increasing adaptation of technological advances to various business operations.

Markets are becoming decentralized and barriers to entry are minimal

The internet is central to the paradigm shift we have witnessed in the business environment over the last couple of decades. For instance, you do not have to live in the U.S. to sell your products or services to the Americans. Even where certain levels of certification are required, these can easily be done online thereby allowing a foreigner to obtain the required credentials for operating a business that targets American citizens. Therefore, market access is global, decentralized and without limits for anyone looking to expand exponentially.

Another thing that is influencing growth strategies among small businesses is the ease of access to financing.

Ideally, most businesses would opt for local lending. However, with the growing popularity of online-based peer-to-peer lending platforms like Lending Club, small businesses can now access financing regardless of whether they have security. But it is not as easy and straightforward as it sounds. According to National Business Capital, the process can be as tasking as trying to apply for a securitized loan with background checks and credit scores playing a crucial role.

Nonetheless, lending institutions are being pressured by the increasing number of peer-to-peer lending platforms. This has forced them to lighten up their lending requirements in a bid to increase their loan portfolios and subsequently interest incomes. In this case, we could say that technological advances and the emergence of alternative lending solutions have forced the hand of the credit market to create a more conducive environment for businesses to thrive.

Max Levchin’s lending startup is heading for unicorn territory (Axios), Rated: AAA

Affirm, the personal credit startup led by PayPal co-founder Max Levchin, has filed a stock authorization form in Delaware that would allow it to raise up to $210 million in new funding at around a $1.4 billion pre-money valuation.

How Max Levchin cofounded and built PayPal into a payments monster after 6 pivots and a bitter rivalry with Elon Musk (Business Insider), Rated: A

He now spends most of his time at Affirm, which offers small loans but doesn’t charge any penalties or fees.

 

PayPal founder talks digital payments, bitcoin (The Seattle Times), Rated: A

Q: Are digital payments progressing as quickly as you hoped since you started PayPal?

A: They are moving at a good pace, adjusted for just how large and complicated the market is. It’s highly regulated and there are a lot of things to be careful about. The elephant in the room for the last seven or eight years has been cryptocurrency.

Q: What are some of the most interesting areas of digital payments?

A: A good example is international remittances, where companies can pop up and do well. They’re the guys who figured out how to do it much cheaper and much more transparently with much lower friction to both the recipient and the sender.

Can I get my pay instantly? New payday apps give workers fast access to wages — for a price (Mic), Rated: AAA

And while many workers typically wait anywhere from once a week to once a month to get the money their company owes them, new apps from financial technology startups like DailyPay, FlexWage and PayActiv are giving workers everywhere — including at Goodwill, McDonald’s and Uber — faster access to wages, and sometimes even on the same day they clocked their hours.

Proponents like Shah say faster access to wages can motivate hourly workers to put in longer hours (since they’ll reap the rewards more quickly) and can reduce their reliance on abusive payday loans with sky-high interest rates that can leave borrowers in an unending debt cycle. Indeed, taking out a single $100 payday loan for two weeks could eat up more than $130 out of your next paycheck, once you factor in interest and fees. Repeat that every two weeks and you are down hundreds of dollars for the year — equivalent to a full month’s rent for many.

With DailyPay — which is used by hourly workers at DoorDash delivery service, the Maids residential cleaning service and Kellermeyer Bergensons Services facilities management firm — employees can access 100% of their accrued and unpaid net wages for a fee of $1 to $3 per transaction. The money can be deposited directly into their bank account or put on a prepaid card or payroll card on the same day.

Another app called Earnin lets workers withdraw up to $100 a day and $500 per pay period in advance of receiving their regular paycheck. While it charges no fees, it does give workers the option of “tipping.” The service then withdraws funds directly from your checking account after you’ve been paid.

FlexWage, for example, only lets workers tap up to 70% of their unpaid wages between regular paychecks (for a $3 to $5 fee per transaction). PayActiv gives them access to 50% of their net pay for every 30 hours worked for a $5 fee.

Instant Financial lets employees withdraw half their daily net pay every day at no cost at all: Instead they charge employers $1 per month per employee enrolled in the program.

Source: Mic

There’s an attractive way to profit from the $ 1.3 trillion student-loan bubble (Business Insider), Rated: A

According to Goldman Sachs, the outstanding student loan balance has reached $1.3 trillion in face value, about the size of the high-yield corporate-bond market. This outstanding debt is not without problems, as it delays homeownership for some millennials and cuts their disposable income.

It’s the $190 billion of outstanding loans that are held within asset-backed securities (ABS) refinanced by private lenders such as SoFi.

“Recent marketplace student loan deals have featured borrower pools with average credit scores above 770 and average borrower incomes above $160k: a very different credit profile than the government guaranteed portfolios.”

Source: Business Insider

Some lenders stand to gain as others leave auto niche (American Banker), Rated: A

The indirect auto business is in a state of transition.

TCF Financial in Wayzata, Minn., surprisingly walked away from the segment on Dec. 1, and others like Regions Financial and Fifth Third Bancorp have tapped the brakes for reasons ranging from competition and credit concerns to regulatory pressure and low yields.

Auto sales are also projected to fall by 7% this year, according to Autodata and the Bureau of Economic Analysis.

Financial Literacy Curricula for Non-Prime Consumers Should Focus on Relevant Topics, Attainable Goals (BusinessWire), Rated: A

America’s financial literacy programs may be failing the very people who need them most, according to newly released research from Elevate’s Center for the New Middle Class (CNMC). Non-prime consumers learn and retain financial education material differently than their prime peers, the research indicated.

To be most effective for a non-prime audience, financial literacy curricula should:

Be trans-media. Use different media types to deliver different messages.

Address the unique challenges of non-prime Americans. A financial wellness program will be more effective for non-prime Americans if it directly addresses their unique challenges – things like income volatility and a lack of available resources. It also needs to identify outcomes that are relevant, attainable, and meaningful to them.

Highlight the next immediate steps.

Focus on building their credit. Non-prime Americans understand that their credit scores affect every part of their financial lives and they are hyper-focused on what they can do to improve them. Anchoring a financial wellness program on credit score management can actually lead non-prime consumers to understand broader financial management principles.

Ken Rees of Elevate (Lend Academy), Rated: A

In this podcast you will learn:

  • The evolution of Ken’s career that led to the founding of Elevate.
  • The different products that Elevate offers today.
  • A profile of the typical Elevate customer.
  • How Elevate’s products help their customers’ financial situation.
  • Their typical loan terms.
  • Ken’s view of the new CFPB rules on small dollar loans.
  • How Elevate’s underwriting process works.
  • The total originations for Elevate in the US and UK.
  • The importance of data analytics in their business.
  • The percentage of customers coming to them through a mobile device.
  • How they can underwrite 95% of their loan applications in an automated way.
  • How their charge-off rates have been trending.
  • The different funding sources they use to fund these loans.
  • What their Center for the New Middle Class does.
  • How their IPO process went and what it is like being a public company.

 

Winners and Losers in the CFPB Mess (Credit Union Times), Rated: A

Winners

Payday Lenders – Like them or not, the payday lending industry was in for a huge takedown under the CFPB’s final rules that will restrict the way they do business.

Still, the industry now has a friend rather than a foe in the director’s office. And that can’t hurt for an industry that just weeks ago appeared to be headed for a major takedown.

Attorneys general call for Consumer Financial Protection Bureau independence (Lake County News), Rated: B

California Attorney General Xavier Becerra on Friday joined attorneys general from 17 other states in calling on the Trump Administration to respect the independence of the Consumer Financial Protection Bureau.

PNC to offer consumer loans through mobile devices (American Banker), Rated: A

PNC Financial Services Group plans to introduce a consumer lending product that it will market through both its mobile wallet and in new branches.

The $375 billion-asset Pittsburgh company intends for the new loan product to be available on a national scale, Chairman and CEO William Demchak said this week.

Kaplan Fox Announces Investigation of Qudian Inc. (Business Insider), Rated: A

Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating Qudian Inc. (“Qudian” or the “Company”) (NYSE:QD) on behalf of investors who purchased Qudian American Depository Shares.

On October 17, 2017, Qudian issued 37.5 million American Depository Shares at $24 per share under a Registration Statement and Prospectus filed with the U.S. Securities and Exchange Commission, for gross proceeds of $900 million.

On November 21, 2017, Chinese media sources began to reveal that the personal information of millions of Qudian customers were allegedly available for sale on the black market. On November 23, 2017Bloomberg reported that “Chinese regulators and police are investigating a potential leak of data from online lender Qudian Inc., according to people with knowledge of the matter.

Meet Tim Russi, President of Auto Finance at Ally Financial (Vator.TV), Rated: A

VatorNews: How is technology influencing and impacting Ally’s auto business? Why is this technology integral to the company’s future in this arena?

Tim Russi: We’re a company that’s 100 years old, and you don’t become a 100 year old company in today’s world if you don’t have the ability to reinvent yourself.

Ally operates in what we in the lending world refer to as an ‘indirect model,’ so dealers originate the loans and leases and then we purchase them from the dealers. The speed and access of the indirect model has changed significantly in the last 15 years. The industry was very disruptive in creating online portals for dealers to be able to submit applications to lenders, so the lender didn’t have to be on site to do the loans.

VN: How have you seen technology in the auto space evolve in that short amount of time? How quickly is the space changing?

TR: You look at a lot of the lending models today and they’re going direct to consumers, and we’ve even got a direct model, because as you look at digital and the consumers doing shopping online, and wanting to buy, there’s no reason they shouldn’t be able to select and purchase the vehicle and obtain financing right at the ‘point of sale.’ If the sale’s going to be online, not in the dealership, we want to make sure we’re there and then fulfillment can occur at the dealership.

VN: How has SmartAuction changed the way dealers sell and buy vehicles? What kind of ROI have you seen?

TR: SmartAuction, we actually developed in 1999 and we’ve done over 5 million transactions. We have 20,000 vehicles that are available for sale or purchase in the marketplace. It’s a wholesale marketplace so dealers can post and buy.

Notable Real Estate Trends To Watch For In 2018 (Forbes), Rated: A

3. Fractional Investing

As peer-to-peer lending and crowdfunding catch mainstream attention, folks looking for greater diversification and passive investment opportunities will engage in factional investing. The last few years have seen some extremely credible startups innovate in this space, and next year could lead to individuals moving away from sole ownership to fractional ownership via crowdfunding. – Sohin ShahInstaLend

7. On-Demand Access For Renters

We often hear from renters that they are too busy to sweat the small stuff. They want immediate tour confirmations, like booking a restaurant on OpenTable, and near-immediate confirmation that they have leased, like booking a hotel. This real-time service expectation from a new generation of renters is exactly what we plan to cater to in 2018. – Anthemos GeorgiadesZumper

Peer-To-Peer Lending : Here Are 5 Things To Know (NDTV), Rated: B

  1. P2P lending is a form of financial innovation but the concept that works behind it is the same as in the case of the banking system.
  2. Any lay investor or lender can lend money to any borrower who is registered with the P2P platform.
  3. Borrowers and lenders enter into a contract according to which they agree to the amount disbursed and the rate of interest.
  4. A borrower can raise loan at the rate of interest, which is inversely proportional to his credit score.
  5. Each P2P lending platform charges a fee for the transactions that are fructified at their platforms.

Trump says fines for Wells Fargo will not be dropped (Des Moines Register), Rated: B

President Donald Trump weighed in on an investigation into scandal-plagued Wells Fargo, tweeting Friday that fines and penalties against the bank would not be dropped, and may actually be “substantially increased.”

Trump’s statement comes a day after Reuters reported that Mick Mulvaney, the president’s budget director and now acting director of the Consumer Financial Protection Bureau, was weighing whether the bank should have to pay tens of millions in fines already levied against it for mortgage lending abuses.

United Kingdom

Funding Circle SME fund size to double following C share merger (P2P Finance News), Rated: AAA

THE FUNDING Circle SME Income Fund (FCIF) is set to double the value of its assets after announcing plans to convert its conversion shares into the ordinary portfolio on 20 December.

The investment trust, which invests in loans on the Funding Circle platform, revealed in its half-year report that the move will increase the fund’s size to around £310m.

Currently the ordinary shares are worth £165.3m and the C shares, launched in April, are worth £142.3m.

Funding Circle SME Income Fund Net Asset Value And Profit Both Rise (Morningstar), Rated: AAA

Net asset value per ordinary share was 100.55 pence per share, representing an increase in the total NAV to GBP167.0 million from GBP165.0 million at the start of the half, which ended September 30. Net asset value total return was 12%.

For the C shares, net asset value was 99.82p, having only been issued in April. These shares are due to convert to ordinary shares on December 20.

Zopa investors can now automatically move repayments into their IFISA (P2P Finance News), Rated: AAA

ZOPA investors can now automatically re-direct their repayments into their Innovative Finance ISA (IFISA).

The peer-to-peer consumer lender confirmed this week that customers can gradually move their Zopa money into the tax wrapper without having to sell loans or pay extra fees.

Moving money into the IFISA will contribute to the investor’s annual tax-free allowance, Zopa said. However, once money is in the IFISA and has been lent out, those repayments will not contribute to the IFISA allowance.

Why banks will share your financial secrets (BBC), Rated: AAA

Customers of nine of the biggest UK banks have received letters and emails in recent weeks informing them that their information can be shared, securely, with other firms. All they need to do is give their permission.

The UK’s competition watchdog says this so-called Open Banking regime will revolutionise many people’s financial lives, helping them get better deals.

Most people stay loyal to their bank. The Competition and Markets Authority (CMA) found that only 3% of personal customers move their accounts each year.The UK’s competition watchdog says this so-called Open Banking regime will revolutionise many people’s financial lives, helping them get better deals.

How will it work?

In practice and in time, customers will probably see a dashboard on their bank’s mobile phone app.

This will show them how much money they have in their different accounts, with different banks, and eventually how much they owe on credit cards and store cards too.

A set of computer programming rules in the UK, called Application Programming Interfaces (APIs), will ensure all these new services and banks to talk to each other.

Applications for mortgages could be dealt with more quickly, as providers and brokers could access spending history, rather than ask for printed copies of the last three months of bank statements.

Anne Boden, of mobile-only Starling Bank, says customers will be able to see exactly what they bought for lunch each day, an app could analyse the calorie levels, and then cross-check it with how much exercise that person is doing.

Customers could be bombarded with invitations to try out a new service, and could quickly lose control of their financial data, according to Mick McAteer, of the UK’s Financial Inclusion Centre.

He describes Open Banking as “a daft idea”, which will lead to more financial exclusion for those already on low incomes.

Unscrupulous individuals would be keen to access this data and use it alongside information revealed on social media to build up a complete set of personal information.

The UK needs its own version of business development companies (Financial Times), Rated: A

The great scramble for yield has seen asset managers hunt down ever more alternative sources of income. Many are starting to move into the world of shadow banking, alternative forms of lending in areas where banks are not competing for business as much as they used to.

But evidence from the US suggests that the biggest opportunity probably lies in what is called direct lending, preferably through a structure that might mimic US business development companies. These BDCs are a large and diverse universe of tax efficient, listed, closed-end funds resident in the US. Collectively they are worth at least $100bn, according to Keefe, Bruyette & Woods, the investment bank, nearly all of which has been lent to mid-market private businesses in the US — capital that has arguably helped to improve the nation’s corporate productivity and profitability. Income-hungry investors have also snapped up these funds, with average yields well over 9 per cent per year.

Direct lending companies will service the mid-market secured lending space for loans above £50m but they, in turn, lack an outlet into the public markets typically afforded by BDCs in the US.

Industry reacts to Cambridge report on alternative finance (AltFi), Rated: A

The Cambridge Centre for Alternative Finance’s report, entitled Entrenching Innovation, found the UK online alternative finance market grew 43 per cent in 2016 to £4.6bn.

“Abundance was particularly pleased to see our category (debt securities) confirmed as the fastest growing of all at 1,147 per cent year on year, with an accompanying 40 per cent increase in average deal size to £1.4m. It was also good to see hard evidence of investors in debt securities conducting their own due diligence and being comfortable with the risk/reward offers they found,” he said.

Anil Stocker, CEO and co-founder of fintech business finance firm MarketInvoice, says as awareness increases, which will be propelled by PSD2, so too will the use of alternative finance platforms.

The UK ranks top of all major developed economies for establishing new businesses (City A.M.), Rated: A

The UK outranked all other major developed economies in terms of the number of businesses established last year, according to figures from accounting group UHY Hacker Young.

It became home to 218,000 more businesses in 2016, a rise of six per cent over year-on-year. Meanwhile, other major developed economies including France, Germany, Italy, Japan and the US saw an average two per cent rise in number of businesses over the year.

FCA to change advice definition in January (FT Adviser), Rated: B

The Financial Conduct Authority has said it will introduce its new definition of advice from Wednesday 3 January.

As part of this it has amended its handbook to change the definition of financial advice, meaning only advice which offers a personal recommendation will be considered regulated.

China

Chinese Banks Face Potential Capital Shortfall, IMF Says (WSJ), Rated: AAA

Chinese banks may have insufficient capital to weather potential losses from the nation’s rapidly mounting credit risks, the International Monetary Fund said, in a broad review of China’s financial system.

With Chinese banking-sector assets, at $34.7 trillion, soaring to three times the size of China’s economic output, at $11.2 trillion, the IMF said that “holding more capital would strengthen the banking system and bolster financial stability,” according to a report on Thursday.

The IMF said China should consider boosting risk-weighted assets at its banks by 0.5% to 1% over the coming 12 months.

Source: The Wall Street Journal

 

WeiyangX Fintech Review (Crowdfund Insider), Rated: A

LexinFintech, China’s online provider of installment-based loans has decided to conduct extra due-diligence investigation for its IPO in the US.

This week, KPMG China announced the 50 leading Fintech companies operating in China and published a related insight report.

(Note: Companies are arranged in alphabetical order based on the first letter of their Chinese name in pinyin.)

  1. Anxindeli
  2. Baidu Finance
  3. BAIFENDIAN
  4. 100credit
  5. ICE KREDIT
  6. TENPAY.COM
  7. Dianrong.com
  8. RQuest
  9. FUTUNN.COM
  10. ChinaPnR
  11. PING ++
  12. 3GOLDEN
  13. JFZ.COM
  14. JD Finance
  15. Juxinli
  16. QUARK FINANCE
  17. 99Bill
  18. Tigerbrokers
  19. QuantGroup
  20. LENGJING INFO
  21. LU.com
  22. Ideacome
  23. MSXF
  24. Ant Financial
  25. PINTEC
  26. QFPAY
  27. Qudian
  28. UCREDIT
  29. Rong360
  30. Wecash
  31. ChinaScope
  32. BBD
  33. Souyidai
  34. Suanhua Credit
  35. Feidee
  36. Taiyiyun
  37. TalkingData
  38. Tcredit
  39. Beagle Data
  40. Tong Dun
  41. Wacai
  42. Wei Zhong Shui Yin
  43. WeBank
  44. WeLab
  45. u51.com
  46. Onchain
  47. Hcspark.com
  48. Zipeiyi
  49. Zhongan Insurance
  50. Zuihuibao

New guidelines for banks to support P2P lending (Taipei Times), Rated: A

The Financial Supervisory Commission on Thursday gave its nod to guidelines on collaborations between peer-to-peer (P2P) lending platforms and commercial banks, in a move to support the development of emerging financial services.

Under the guidelines, banks may provide custodian and trust account services to P2P platforms, as well as transaction processing to meet rules against collection of deposits by non-bank entities, the commission said.

However, banks are barred from making recommendations on decisions about loan approval, interest rates and principal amounts.

The guidelines also regulate the so-called peer-to-bank (P2B) model, where banks participate as lenders on P2P platforms.

CreditEase’s CEO Ning Tang spoke about FinTech and innovation at Fortune Global Forum (Business Insider), Rate: A

Ning Tang, Founder and CEO of CreditEase, attended the 2017 Fortune Global Forum on December 6-8 in Guangzhou. With the theme of “Openness & Innovation: Shaping the Global Economy,” the Global Forum convened world leaders, senior executives and prestigious scholars to discuss the dynamic frontiers of international commerce.

Tang stated that the Chinese FinTech industry still sees great potential in the coming decade represented by development in applications such as microloans for SMEs, crowdfunding, robo-advisory, insurance technology, and blockchain products and services.

India’s FDI climate good for China investment (China Business Law Journal), Rated: A

Mumbai-based fintech start-up Kissht recently raised US$10 million in funding primarily from Fosun International, a Chinese investment consortium. The Krishnamurthy & Co team acted for and represented Kissht and its owner OnEMI Technology Solutions, led by Mumbai-based partner Sanket Sethia and associate Vwastav Ghosh.

European Union

Moody’s highlights improving performance for European SME ABS next year (FTSE Global Markets), Rated: AAA

The performance of small and medium-sized enterprise (SME) asset-backed securities (ABS) will remain stable across all major markets in Europe and issuance volumes will likely increase slightly, according to the 2018 outlook for European SME ABS from Moody’s. However, emerging political risks have created some uncertainty in affected markets, with a limited effect on securitised deals in the United Kingdom (UK), and potentially negative effects in Spain.

Billie Raises €10m Series A (LendIt), Rated: A

Billie is an invoice finance platform that launched earlier this year; the round was led by Creandum with participation from existing investors Speedinvest and Global Founders Capital; the company focuses on complete automation with no human interaction; It was co-founded by Matthias Knecht and Christian Grobe; Billie also secured a refinancing facility from a major German bank.

International

Regulated Crypto Platform Plays By the Rules and Disrupts Trading Model (Coin Telegraph), Rated: A

Trade.io’s solution is to develop an exchange platform for the sharing economy where traders can not only exchange tokens, crypto and fiat currencies and other assets but also share in the risk and revenue of the liquidity pool. To participate in the liquidity pool, members buy 2,500 Trade Tokens secured by financial assets in their trade.io wallets. Crypto and fiat currencies are accepted as collateral.

Trade Token owners share in 50 percent of the gains or losses of the liquidity pool, which are distributed to the wallets of pool participants. Besides trading fees and commissions, revenue is earned from investment banking and P2P lending fees.

Australia/New Zealand

Harmoney Reports Increase in Kiwi SMEs That Are Tapping into P2P Lending for Business Cashflow (Crowdfund Insider), Rated: AAA

Earlier this week, Harmoney announced there has been an increase in Kiwi SMEs that are tapping into peer-to-peer (P2P) lending for business cashflow.

The New Zealand online lender stated it estimates $100 million will be loaned to business accounts through its lending platform within the next six to twelve months. Currently, the average loan amount for business cashflow on its platform is $25,000.

Sydney fintech Avoka raises $ 16m in Roger Allen-led round (Financial Review), Rated: A

Avoka Technologies, a fast-growing Sydney-based provider of customer acquisition services to financial institutions, has raised $16 million from investors, including prominent venture capitalist Roger Allen, as offshore revenue rises above 75 per cent and the headcount moves towards 300.

Avoka offers a software-as-a-service platform called Transact, which claims to enable institutions to launch new digital products in weeks rather than months, and monitors customer interaction with them once established.

BankWest’s mobile banking app was built on Avoka, while Mr Copeland said HSBC was about to launch new credit cards whose customer interface was developed through the platform.

Asia

Crowdcredit, Inc from Japan (Makoto UJIKE Email), Rated: AAA

Crowdcredit is a cross border online lending platform, which raises funds from Japanese investors and finances overseas financial institutions, SMEs, or individuals.

Crowdcredit, Inc. announced its completion of appx. USD3.5mn financing mainly from Femto Partners, one of the most influential venture capitals in Japan.

Crowdcredit track record;

  • – Established in January 2013
  • – Started raising funds since June 2014,
  • – Finances financial institutions, SMEs, or consumers in Peru, Cameroon, Estonia, Finland, Spain, Latvia, Lithuania, Georgia, etc.,
  • – Has registered investment user of 8,000+
  • – Has issued funds in total US$ 45.5mm, and
  • – Issues funds of US$ 4mm monthly with increasing trend.
Source: Crowdcredit
Source: Crowdcredit
Source: Crowdcredit

Learn more about Crowdcredit here.

Crowd-lending platform New Union awarded CMS license (The Edge Markets), Rated: A

Crowd-lending platform New Union has been awarded the full Capital Markets Service license (CMS) by the Monetary Authority of Singapore (MAS), and announced a potential deal flow pipeline of about S$2 million to be launched soon.

P2P lending platform Validus Capital gets licence to deal in securities in Singapore (Business Times), Rated: A

VALIDUS Capital announced on Monday that it has been awarded a full Capital Markets Services (CMS) licence by the Monetary Authority of Singapore (MAS), to deal in securities – a move that may give Singapore’s small and medium-sized enterprises (SMEs) more access to financing opportunities.

Singapore banks can save over 10% from fintech (SBR.com.sg), Rated: A

Moreover, about 41% of banked balance has now abandoned traditional channels.

MAS estimates fintech payments already takes up 20-50% of household consumption if the probability of payments disintermediation is high in the next five years.

A majority of 56% of the banked population is also willing to shift their savings into a pure play digital bank. An average of 41% of total balance has already been shifted.

Equity crowdfunding and peer-to-peer lending (The Star), Rated: B

Equity crowdfunding has become an increasingly popular way for early-stage and early-growth companies to tap investors attracted by the potential for high returns. An investor who has spent the last couple of years lamenting over the lacklustre performance of his stocks sees ECF as an investment channel that claims to offer even better returns.

P2P investing is garnering a lot of interest from would-be investors who are looking for something different and better than banks’ fixed deposits.

ECF means investing in very early stage businesses and as such, there are inherent risks to be aware of such as the likelihood of bankruptcy, in which case, you will not be able to recover your original investment.

With P2P investing, the most obvious risk that comes attached is of course the possibility of the borrower defaulting on the debt. As the reasons for not being able to repay the loan are typically financial, any subsequent attempts to recover your investment may prove futile if the business indeed has gone under.

Key tips to investing

1. Know where ECF and P2P stands in your strategic asset allocation.

2. Ensure you are investing in best of breed by comparing apple to apple when it comes to risk versus returns.

a) Ensure the platform is approved by SC.

b) Research each scheme on the platform as not every one is the same.

c) Read the fine print in the platform operator’s agreement and know the rights and liabilities of each party. Pay particular attention to the risk warnings in the agreement with regards to potential loss of invested capital and the unsecured nature of the investment (for P2P).

3. Diversification is key.

4. Monitor how your investments are performing.

5. Consider the time required before you see your investments come to fruition.

MENA

New Amendment To Address Reward-Based Crowdfunding And What To Expect (Mondaq), Rated: AAA

A new omnibus code that amends, amongst others, the Capital Markets Code (“CMC“) has been enacted by the Turkish parliament and published in the Official Gazette on 5 December 2017.

The CMC amendment primarily refers to reward-based crowdfunding (i.e. receipt of goods, reward or pre-sales in return or investment-based or loan-based crowdfunding) while donation-based crowdfunding where the investor donates the money with no return is still subject to aid and donations legislation. The said amendment limits crowdfunding to project or venture financing and only through crowdfunding platforms that are prior-recognised by the Capital Markets Board (“Board“).

Crowdfunding platforms can only operate in Turkey once they obtain the necessary permission from the Board.

Fintech Is The New Oil In The Middle East And North Africa (Forbes), Rated: AAA

Over the past decade, fintech startups in the region have raised over $100 million in funding, and investment is predicted to double by 2020, according to the State of Fintech report. Disclosed investment infintech had jumped 100% to over $35 million by October 2017 — Paytabs ($20million), Souqalmal ($10 million) and Beehive ($5 million) — compared to $18 million last year. The number of fintech startups also increased from 46 in 2013 to 105 in 2015. It is estimated that it will more than double again to 250 by 2020, according to the report.

Aside from the fact that the sector encompasses every tech startup active within the financial services industry, beyond the ones that specialize in online payments or money transfers, e-commerce in the region is set to quadrupleuntil the end of this decade. Additionally, despite the ubiquity of smartphones and internet connectivity, 86% of the adult population in the region is unbanked, while three in four GCC bank customers are ready to switch banks for a better digital experience.

Boosting financial inclusion is crucial for economic diversity and growth across the region. Moussa Beidas, co-founder of Dubai-based startup Bridg, which allows smartphone-to-smartphone payments using bluetooth, says fintech has become an innovative way to bridge the divide and provide cheaper services to the unbanked.

Significant banking changes due to tech innovation (Gulf News), Rated: A

The rapid advancement in innovation is transforming the financial services industry, especially the banks, as technology has become an integral part of the business strategy — from initially being just an enabler to now actually streamlining operating processes.

The Middle East has amassed more than $100 million (Dh367 million) in FinTech start-up funding in the past ten years, with 105 FinTech start-ups launching in 2016, with hopes to raise $50 million in funding by the end of 2017.

Banks in the UAE remain the trendsetters, although other GCC countries are not lagging far behind, with several banks in the region embracing FinTech in many different ways.

Africa

TransUnion launches Mobile Score Card solution (IT Web Africa), Rated: AAA

Data firm TransUnion has launched Mobile Score Card, a mobile loan information service that enables lending firms to access a loan applicant’s credit status.

Mobile Score Card is a database solution that continually ‘learns’ based on mobile transactional history.

It also provides mobile lenders with customisable and reliable risk view of the mobile loans. The product targets banks with mobile lending solutions, savings and credit cooperative organisation and independent mobile lenders.

Authors:

George Popescu
Allen Taylor