Thursday May 31 2018, Daily News Digest

places that owe the most in student debt

News Comments Today’s main news: Online lenders tighten rules against default wave. UK P2P lenders join effort to overturn Brexit. Consumer credit sees the most financial complaints in UK. Today’s main analysis: Where is the most student debt? Today’s thought-provoking articles: How regulations will impact Ant Financial. The 7 most innovative fintech companies. Where is the fintech innovation right […]

places that owe the most in student debt

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Online lenders tighten rules as default wave rattles investors (American Banker) Rated: AAA

It’s gotten a lot harder to borrow money from the raft of fintech firms looking to bring online lending into the mainstream.

Besieged by a wave of defaults after several years of rapid growth, the biggest online lenders have been forced by bond investors to tighten underwriting standards. Social Finance, Prosper, LendingClub and Avant now demand higher average credit scores and offer shorter maturities to boost the quality of loans they repackage into asset-backed securities.

The shift in the $30 billion market comes after a swarm of borrower defaults in the past three years rattled ABS investors. It also marks a coming of age of sorts for the fintech startups that offered cut-rate loans to build a customer base. Now, with rates rising and a potential economic slowdown looming, the move toward higher-quality from the push for quantity has taken on added urgency.

According to Kroll, the weighted average of FICO credit scores of Prosper’s loans packaged in ABS increased to 717 in a March 2018 deal from 704 in a sale two years earlier.

LendingTree Study: Which Places Have the Most Student Debt? (PR Newswire) Rated: AAA

LendingTree today released its study on the places with the most student debt. To determine whether there are geographic variations in student debt, LendingTree analysts looked at a sample of anonymized users who logged into My LendingTree in the first quarter of 2018 and calculated how many had student loans, as well as the other reported statistics related to their balances.

Source: Lending Tree

Wells Fargo Plans to Expand Auto Lending Again (Lend EDU) Rated: A

Wells Fargo & Co. expects to increase its auto lending again. In mid-2017, Wells Fargo decided to reduce car financing and tighten its underwriting standards. In February 2018, the firm said it intended to finish consolidating its regional car loan centers by April, and that lending would expand within two quarters, reported Bloomberg.

For lenders in a $1.2 trillion U.S. auto loan market, they face a landscape with falling vehicle resale prices, making it difficult for them to soften losses from repossessing cars when borrowers default.

Principal Financial acquires digital advice startup RobustWealth (Investment News) Rated: A

Principal Financial Group is acquiring financial technology startup RobustWealth to improve its own technology offering and expand distribution capabilities among the banking, broker-dealer and registered investment adviser channels.

Principal also sees the RobustWealth’s platform — which includes digital advice, goal-based investment tools and client onboarding — as providing the foundation for a direct-to-consumer robo-adviser in the future.

What to Do When You Lend Family Money But They Can’t Pay You Back (Entrepreneur) Rated: A

Like many people, Entrepreneur Network partner Jeff Rose once has convinced himself it was a good idea to loan money to a family member. In reality, the situation can get messy when this close personal connection cannot return the investment. This does not mean Rose has given up on peer-to-peer lending, which is a helpful tool that can streamline the loan process.

OppLoans Named One of the Country’s Best Workplaces by Inc. Magazine (Markets Insider) Rated: A

Online lender and service provider OppLoans has been listed as one of the country’s 2018 Best Workplaces by Inc. Magazine. The award determination was based on employee survey results in areas like benefits, perks, executive leadership and opportunities for career development.

OppLoans enjoys a rating of 4.9 out of 5 stars on Glassdoor as well as a 98 percent retention rate and 99 percent approval rating for CEO Jared Kaplan. Last December, Glassdoor rated the Chicago-based startup as the sixth-best place to work nationally for small-to medium-sized businesses. The firm was named #219 on the 2017 Inc. 500 list of fastest-growing companies and the third-fastest growing technology company in Chicago by Built in Chicago.

Autoloans Company Lendbuzz Secures $ 30 Million in Funding (CTech) Rated: A

Boston-headquartered car financing service Lendbuzz Funding LLC has raised $30 million in financing, the company announced Tuesday. The round was led by BHI, the U.S. division of Israel-based Bank Hapoalim, by Viola credit, the growth and venture lending arm of Israel-based Viola Group, and by U.S.-based ConnectOne Bank.

The company, which currently offers its services in most U.S. states, says it reviews loan requests within 24 hours and transfers money immediately upon approval. Since its establishment, the company raised $43 million in both debt and equity funding.

Fifth Third Bank eBus offers free financial advice (The Blade) Rated: B

For the next week, a large bus operated by Fifth Third Bank will travel throughout Toledo, offering residents free money management advice and job-searching services.

The bus, called the Fifth Third Bank Financial Empowerment Mobile, or eBus, was located at the Lucas Metropolitan Housing Authority on Wednesday, and though it’s operated by Fifth Third, its services can be used by any residents no matter which bank they use, said Loretta Humphrey-Cruz, community development relationship manager.

PLI 23rd Annual Consumer Financial Services Institute (JD Supra) Rated: B

The third location of PLI’s 23rd Annual Consumer Financial Services Institute will take place in PLI’s San Francisco Conference facility and via concurrent live Webcast on June 25-26, 2018.  This will be the first time in many years that the Institute will take place in San Francisco.  Since the first location of this event in NYC on March 26-27 was well-attended, and the second location in Chicago on May 7-8 was sold-out, anyone interested in attending the program in San Francisco is encouraged to act quickly to register.

United Kingdom

Tech Entrepreneurs Launch Campaign to Reverse Brexit Vote (Forbes) Rated: AAA

Could Britain’s leading technology entrepreneurs derail Brexit? More than 80 innovators and investors from across the UK’s tech sector have launched a new group, Tech for UK, which will campaign for a meaningful vote on the final terms of the Brexit agreement that the British Government is currently negotiating with the European Union. Such a vote should give Britons the option to vote for the UK to remain in the EU, Tech for UK argues.

The group boasts a string of high-profile business leaders from the tech sector, including Martha Lane-Fox, best-known as the co-founder of Lastminute.com, Giles Andrews, one of the founders of peer-to-peer lending pioneer Zopa, and George Bevis, the CEO of Tide Bank. It also features leading venture capital and private equity investors, such as Simon Murdoch, the managing partner of Episode 1 Ventures.

Consumer credit made up the bulk of financial complaints last year (Peer2Peer Finance) Rated: AAA

The FOS annual report for 2017/2018 found consumer credit products, which includes some peer-to-peer lending as well as payment protection insurance, accounted for the most complaints at 36,349 last year, up 40 per cent.

The Ombudsman upheld 47 per cent of complaints, up from 45 per cent a year before.

There was also an eight per cent increase in complaints about unsecured loans to 6,909, while credit card complaints were up 15 per cent to 11,073.

How to invest in property without buying a home (City A.M.) Rated: A

Over the past few years, property-oriented investment companies have been coming in thick and fast, bolstered partly by the launch of the Innovative Finance Isa (IFISA).

The minimum investment can be as little as £10, which isn’t a patch on the huge deposits needed to buy a house (the average deposit in London is more than £90,000).

Robo-rumble: Will FCA scrutiny stop digital services moving further towards advice? (Money Marketing) Rated: A

The FCA reviewed seven firms offering online discretionary investment management services and three firms giving automated advice.

It found service and fee-related disclosures at most online discretionary investment management firms in its sample were unclear.

Some firms did not make clear whether their service was advised, non-advised, discretionary or non-discretionary. Others also compared their fee levels with their peers in a “potentially misleading way”. For example, they compared a non-advised, non-discretionary service with a discretionary service solely on a cost basis without explaining the difference in the nature of the service.

FIVE SPEAKERS JOIN ‘FUTURE OF FINTECH’ EVENT LINE-UP (Business Cloud) Rated: B

Five speakers from the world of FinTech have been confirmed for BusinessCloud’s The Future of FinTech event in London on 12 July.

Nicola Horlick, a former investment banker turned high-profile player in the peer-to-peer (P2P) lending market, is the headline speaker for the breakfast event.

China

How Will Ant Financial, China’s Fintech Giant, Be Impacted By New Regulations? (Forbes) Rated: AAA

Regulations are expected to be implemented on money market funds. Ant Financial’s main money market fund, Yu’e Bao, has been rated as much weaker than its 

GXChain (GXS) Review – A Blockchain-based Commercialized Data Marketplace (Chain Bits) Rated: A

With the proliferation of data on the internet, there are many pain points for individuals. Since you do not own your data, someone can sell you information and personal data without sharing profits. In addition, data is often scattered among multiple platforms, making it difficult to manage. Finally, data is difficult, if not impossible, for individuals seeks to monetize and earn from it. They don’t know how the blockchain could be applied in this scenario to better their lives.

GXChain solves these pain points by obtaining user consent before collecting and storing user data on a blockchain.

GXChain wants to be the data trading network that protects user privacy and offers copyright protection and usability at the same time. It has real-world applications in insurance, online lending, consumer loans and banks.

International

7 most innovative Fintech companies right now (Forex News Now) Rated: AAA

Stripe-is one of the most valuable Fintech startups. It was worth over $9 billion in 2016.

Ant Financial-has a market capitalization of $60 billion, which makes it the most valuable Fintech company in the world.

Atom Bank-has raised over $290 million in financing.

Robinhood-Valued at $5.6 billion, offers its customers a mobile wallet that allows trading shares and exchange-traded funds without paying commissions.

Lufax-is an online peer-to-peer lending platform. It matches borrowers with investors for a fee of 4% and is valued at over $18.5 million.

SoFi-is valued at over $4.4 billion.

Coinbase-has over 13 million users and makes more than $1 billion in revenue a year.

Where In the World Is Fintech Innovation? (Bank Innovations) Rated: AAA

China is also at the forefront of innovation. The government is actively cultivating fintech there.

Fintech companies like Qudian, LuFax, and ZhongAn (owned by Ant Financial), China’s first online-only insurer, are now emerging. Investment bank CLSA ranks ZhongAn as the sixth most valuable e-finance company in the world. The Chinese government has also designated development zones, such as Zhongguancun and Shenzhen, for innovation industries.

Source: Bank Innovation
Australia

Banks’ $ 220m bill for dudding customers to rise ‘significantly’ (The Canberra Times) Rated: A

Banks are set to refund “significantly” more than the $220 million already set aside for financial advice clients who were charged for services that were never provided, as institutions search their files for customers who were ripped off.

What you should look for when buying a partially renovated house (Domain) Rated: A

A recent survey by online lender State Custodians found 52 per cent of people would be open to a renovation project for their next purchase but only 19 per cent of people would be keen on tackling a full fixer-upper.

On the other hand, a quarter of respondents would prefer taking on a partially renovated home as a project, with Millennials in particular more open to the idea of buying a half-renovated house.

India

ICICI Bank also wants to be a fintech (The Ken) Rated: A

In mid-2017, B Madhivanan, the chief technology and digital officer of ICICI Bank, met Rohan Angrish, the chief technology officer of online lender Capital Float. Madhivanan had questions about online lenders’ small-ticket loans. Fintechs like Capital Float lend to underserved segments like kirana stores that banks don’t normally touch.

Asia

Funding Societies partners with UOB Malaysia to accelerate small business growth (Deal Street Asia) Rated: AAA

United Overseas Bank (Malaysia) Bhd has partnered with regional peer-to-peer financing platform Modalku Ventures Sdn Bhd (Funding Societies) to connect startups and small businesses with alternative financing solutions.

Through the partnership, startups and UOB Malaysia’s small business customers will be able to raise up to RM500,000 directly from individual and institutional investors using Funding Societies’ platform without the need to pledge collateral.

Fintech firms need support from banks: SBV (Vietnam News) Rated: A

The fintech (financial technology) sector is facing difficulties of capital mobilisation shortage, inadequate legal framework and banks’ hesitance in co-operation, said Lê Minh Hưng, Governor of State Bank of Việt Nam (SBV).

Hưng told the Việt Nam fintech forum 2018 held in Hà Nội on Wednesday that fintech and banks could contribute to expand financial universalisation, and promoting hunger eradication and poverty reduction while enhancing social equality and sustainable economic development.

Japan’s Gumi Games Founder Launches $ 30M Crypto Fund (Blockchain News) Rated: A

Japanese mobile games publisher gumi today launches a fund to invest in promising global cryptocurrency companies. With USD 30 million in initial investment secured, the venture capital fund is moving to open up the Japanese crypto startup market to international investors, honing in on a target that has, up to now, been a struggle to access and understand.

While the Japanese yen accounts for over 56 percent of Bitcoin volume, gumi believes that there is lack of understanding of Japan’s crypto market and the project’s leaders are keen to fill a void in the country that was also the first to legalize bitcoin.

He has helped to raise over USD 250 million to date for companies such as Bee Token, the Decentralized AirBnB and crypto lending platform Celsius Network.

Africa

Fintech in Africa: what investors are looking for (Fin24) Rated: AAA

According to EcoBank, more than 57% of all mobile money accounts globally can be found in sub-Saharan Africa, with the African fintech market set to grow from $200m currently to $3bn by 2020.

A recent study by McKinsey found room for growth in meeting unmet banking needs in Africa. These include borrowing, saving, and investing across the continent. South Africa alone is set to see an increase in banking revenues of $4bn over the next five years.

Kenya calls for regulation of fintech lenders (IT Web) Rated: A

A boom in  by fintech firms in Kenya has led to an increase in predatory lending practices, the country’s central bank governor said yesterday, calling for the sector to be regulated.

Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account.

Canada

One set of borrowers at greater risk are Canada’s 1.14 million small businesses, defined as companies that employ up to 99 workers. Statistics Canada reports that small businesses represented 98 per cent of all businesses, employed 70 per cent of workers, and generated 30 per cent of each province’s GDP on average. This category includes startups and high-growth firms, which represent Canada’s best hope for job creation and economic growth.

Fortunately, small businesses now have an alternative source for loans called peer-to-peer (P2P) lending. These online platforms match borrowers and investors directly and can provide loans cheaper and faster than traditional sources. How can that be? The answer is technology.

Fintech Select Records a Net Profit of $ 986k for Q1 Ending March 31 2018  (GlobeNewswire) Rated: A

Fintech Select Ltd. is pleased to announce that its financial statements for the Q1 ending March 31 2018 have resulted in a net profit of $986k. Q1 2018 Financial Statements and Management Discussion & Analysis (“MD&A”) have been filed on SEDAR.

Authors:

George Popescu
Allen Taylor

Wednesday January 10 2018, Daily News Digest

personal loans LendingTree

News Comments Today’s main news: Citi launches mortgage platform. Credit card debt hits all-time high. The House Crowd receives FCA authorization. Apples for Oranges, an Isa comparison site, launches. Ant Financial dupes users into joining credit system, then apologizes. Ant Financial halts consumer loan sales. P2P lending association launches in India. TD Bank acquires AI company Layer 6. Today’s main analysis: LendingTree’s […]

personal loans LendingTree

News Comments

United States

United Kingdom

China

International

India

Asia

MENA

Africa

Canada

News Summary

United States

LendingClub (NYSE: LC) today announced that on January 2, 2018, its Board of Directors (the ‘Board’) received another letter from IEG Holdings Corporation (‘IEG’), which had previously commenced an unsolicited tender offer for LendingClub’s stock in July 2017 and withdrew the tender offer less than a month later. IEG’s letter states its intention to acquire up to 4.99% of the outstanding common stock of LendingClub on the basis of 13 shares of IEG common stock for each share of LendingClub common stock. On January 5, 2018, IEG announced the commencement of its proposed exchange offer. The Board believes there is no rational economic basis upon which LendingClub stockholders should accept IEG’s proposed exchange offer, which appears intended to mislead investors into mistakenly tendering into a discounted offer. The Board has unanimously concluded the offer is grossly inadequate, is not in the best interests of LendingClub and its stockholders and urges stockholders not to be misled into tendering into the offer.

Citi unleashes single digital platform for mortgages (Banking Tech), Rated: AAA

Citi has made dual agreements to integrate its suite of US mortgage products into a single digital platform for its clients.

A new front-end digital solution, LoanFx, from Digital Risk, a provider of technology platforms and services, will be complemented by a new loan origination system, LoanSphere Empower, from Black Knight.

The bank says this development will enable its mortgage clients to go through the full loan cycle, from research to application, processing, scheduling appraisals, handling title, to closing, “through the channel of their choice – and at their own pace”.

LendingTree Personal Loan Offers Report – December 2017 (LendingTree), Rated: AAA

I wanted to let you know we just released the inaugural monthly 

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.54%, an increase of 17 basis points from the prior month, and a drop of 24 basis points from the same period one year ago.
  • At $24,177, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above was down almost 2% ($451) from November, and up 26% ($6,179) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had APRs of 5.07% on average, and loan amounts of $41,768. A borrower with this APR and loan amount would save $3,407 by consolidating debt with a 10% APR over a three-year term.
  • Good credit (680 – 719 score): Loan offers to consumers with a credit score between 680 and 719 averaged over $15,000 in December.

    • The average best APR for all borrowers with credit scores of 680 – 719 was 15.91%, down 1.5% from last month, but up 2% from a year earlier.
    • At $15,468, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs drop by 4% ($624) in the last month, but rise by 343 basis points ($530) over the last year.
    • The top 10% of offers, presented to the borrowers with the best profiles within the 680 – 719 credit score range, saw an average best APR of 7.37%, offered with an average loan amount of $25,385. A borrower with this APR and loan amount would save $3,306 by consolidating debt from a 15% APR over a three-year term.

    Credit card debt hits all-time high of $ 1.023 trillion (American Banker), Rated: AAA

    U.S. revolving consumer debt reached an all-time high of $1.023 trillion in November, according to Federal Reserve Board data released Monday.

    The card market’s previous peak came in April 2008, when $1.021 trillion in revolving consumer debt was outstanding.

    Will Consumer Lenders Benefit from the Removal of Tax Benefits for HELOCs? (Lend Academy), Rated: AAA

    Since a HELOC is backed by an asset, interest rates are typically lower than an unsecured loan, such as the ones offered by LendingClub and Prosper. There was an added benefit to a HELOC with the ability to deduct the interest, something that differentiated HELOCs from pretty much all other loan products. Now that this benefit is, in many cases, removed with the new tax code, we may see homeowners opt for other loan types. It is important to remember that the interest deduction only benefited individuals who itemize their deductions, which tend to include individuals with higher incomes.

    Unsecured Lenders May Benefit

    As the deduction benefit is removed, other options which offer a pleasant user experience look even better. Platforms like Goldman Sachs’ Marcus charge no origination fee and currently offer fixed rates as low as 6.99% for the best borrowers. Another player in the unsecured consumer lending space called LightStream offers loans as low as 2.49% depending on the use of proceeds. This could lead to the very best borrowers moving to products offered by these companies while borrowers with a less than perfect credit history, who would qualify for a higher rate, may rely on HELOCs.

    Americans Don’t Understand Auto Loans, Millennials Understand Less (instamotor), Rated: A

    In order to find out what people know and don’t know about auto financing, we surveyed 800 Americans who have applied for auto loans about their auto financing knowledge and found:

    Many Americans are qualifying for auto financing, but aren’t sure how.

    • Nearly 4 in 5 (79%) were approved for the last auto loan they applied for
    • More than half (51.9%) can’t name the 3 major credit bureaus
    • An overwhelming majority of respondents (94%) weren’t aware that auto lenders often use a specialty credit score, called an Auto FICO, when evaluating auto loan borrowers
    • Nearly 3 in 5 (60.9%) think lenders consider age and marital status when evaluating loan applicants

    Most Americans don’t know how to properly evaluate an auto loan offer.

    • Nearly 3 in 5 (59.9%) don’t understand the relationship between loan term and interest.

    What Americans Think is the Most Important Factor When Evaluating a Loan

    • All factors considered holistically – 47.9%
    • Interest rate – 21.9%
    • Monthly payment – 14.3%
    • Loan amount (price of car) – 7.9%
    • I don’t know – 2.4%

    Most Americans are unaware of a common, yet deceiving auto dealing practice.

    • 2 in 3 respondents didn’t know dealers can add interest to your loan to make more profit. in fact, more than 2 in 5 (41.3%) believed this practice was illegal

    Other concepts people don’t understand? Being “upside down” and gap insurance.

    • More than 2 in 5 (42.6%) don’t know what it means to be “upside down” or “underwater” on your loan
    • More than 3 in 5 (62.1%) don’t know what gap insurance is

     

    Community Banks Aim To Amplify Competitive Edge With FinTechs (PYMNTS), Rated: A

    Community banks approved 49 percent of SMB loan applications in November, according to the latest data from the Biz2Credit Small Business Lending Index.

    But small business lending is only one part of the banking puzzle. SMBs demand access to robust solutions, from mobile banking to advisory services.

    The Fed released a report, “Community Banking in the 21st Century,” last October, which surveyed more than 600 FIs. While analysts found small business lending dropped by 2.2 percent in 2016, the decline was significantly smaller than that at larger banks, which reduced SMB lending by 5.1 percent.

    Finance Professionals Preparing For Technological Innovation & Disruption (Crowdfund Insider), Rated: A

    On Monday, TD Bank released its 2017 Treasury Management Survey, which revealed that technological innovation and disruption is set to greatly influence the investment priorities and business plans of financial executives.

    The survey noted that disruptive technologies are top of mind for the participants, who also cited that they are preparing for changes in the treasury management industry by:

    • Leveraging solutions from fintech providers (31%)
    • Developing in-house technology for competition (23%)
    • Hiring more tech-savvy employers (15%)

    Meet the First 100 Speakers (LendIt), Rated: A

    Source: LendIt

    Read speaker bios here.

    Payday rule will protect, not harm, vulnerable consumers (American Banker), Rated: A

    Criticism of payday lenders is well-earned. They have devised a system that rolls customers into one 300% annual interest loan after another, until those customers very often reach a point of serious financial desperation — they may lose their bank accounts and are more likely to declare bankruptcy than nonpayday borrowers.

    In 2015, over 83% of Florida payday loans went to borrowers stuck in seven or more loans, based on data from the office of the regulator himself. The average annual interest rate is still 278%, and these unscrupulous lenders drain $311 million out of the economy every year, disproportionately affecting African-American and Latino communities and a growing number of seniors.

    The New York Institute of Credit & Financial Poise Announce BUSINESS BORROWING BASICS (Benzinga), Rated: A

    This webinar series provides a guided tour of the various borrowing options available to businesses, from both a business and legal perspective. Major topics covered include asset-based lending, P/O Finance, Factoring, Merchant Cash Advances, and Market Place Lending / Fintech.

    The first episode of the series, Understanding the Lending Landscape, airs on January 17th at 2:00 PM CST (Register Here) and features Moderator Jonathan Friedland of Sugar Felsenthal Grais & Hammer.

    Future episodes in the series include “Asset-Based Lending,” airing on February 21st, “Purchase Order Finance” airing on March 21st, “Factoring,” airing on April 18th, “Merchant Cash Advances” airing on May 23rd, and “Marketplace Lending/Fintech,” aring on June 20th.

    Marlette Funding Names Mark Elbaum as Chief Financial Officer (BusinessWire), Rated: B

    Marlette Funding, LLC, the parent company of Best Egg, is pleased to announce the appointment of Mark Elbaum as the company’s new chief financial officer (CFO). As CFO, Elbaum will join the executive management team and lead the finance, accounting and capital markets activities from the company’s headquarters in Wilmington, DE.

    Most recently, Mark was the CFO of Merrill Lynch, Bank of America’s Wealth Management business. Prior roles included 18 years in the mortgage industry as CFO of Bank of America’s mortgage lending division, appointed to the position after the company’s acquisition of Countrywide Financial. At Countrywide he held the position of CFO of the Residential Lending Division. After starting his career at Price Waterhouse, Mark worked at Aames Financial Corp, a midsize consumer finance company, where he helped upgrade the finance capabilities to post IPO requirements. Mark has a Masters in Accountancy from University of Southern California and is a CPA and experienced in FP&A as well as capital markets.

    LendingTree, Inc. to Present at the 20th Annual Needham Growth Conference (Business Insider), Rated: B

    LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, today announced that it will participate in Needham & Company’s 20th Annual Growth Conference at the Lotte New York Palace Hotel in New York City.

    The Company is scheduled to present on Wednesday, January 17 at 10:00am ET.

    Enacomm, Advantel Partner on AI Conversational Banking and Next-Generation IVR (GlobeNewswire), Rated: B

    Enacomm, Inc., a provider of intelligent interactions and customer authentication technologies for banks, credit unions and credit card companies, has teamed up with Advantel, a technology solutions provider deploying integrated voice and data solutions for clients around the world. Through the partnership agreement, Advantel will make available to financial institutions both VPA (Virtual Personal Assistant) banking and the Enacomm Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

    United Kingdom

    The House Crowd achieves FCA authorisation (P2P Finance News), Rated: AAA

    THE HOUSE Crowd is looking to unveil a new website and auto-lending option after achieving authorisation from the Financial Conduct Authority (FCA) at the end of last year.

    The property peer-to-peer lending platform had first applied for full permissions in October 2015 and had previously expressed concerns about delays.

    Innovative finance Isa comparison site launches (FT Adviser), Rated: AAA

    A new Isa comparison site, including Innovative Finance Isas, has been launched directly to potential investors.

    Apples for Oranges will allow customers to shop around for Isas and be able to see the different returns from stocks and shares, cash and innovative finance Isas in the same place.

    Figures last Autumn showed that investors had put just £17m into Innovative Finance Isas in their first year in existence, according to data from HM Revenue & Customs, significantly less than both stocks and shares Isas and cash Isas, which had £22bn and £39bn put into them respectively during 2016 to 2017.

    Fintech firm Marqeta has hired its first UK employee as it prepares to launch in Europe (Business Insider), Rated: A

    The 180-employee company has hired Ian Johnson, formerly the European commercial director at payments processing firm Wex, to be Marqeta’s Head of European Growth, and there are plans in the works to open a formal office in London and hire further staff later this year. The company has also appointed a head of international strategy, Renata Caine (who also previously worked at Wex), who will be based in the San Francisco Bay Area.

    UK Direct Lender Goji Nabs Multi-Million Pound Anthemis-Led Round (Crowdfund Insider), Rated: A

    Goji, the UK-based specialist direct lending investment manager and platform, secured an undisclosed multi-million pound funding round from investors including Anthemis’ Venture Fund 1 (AVF1) and AXA Strategic Ventures (ASV).

    Investors in alternative investments driving change in manager behaviour, says SEI survey (hedgeweek), Rated: A

    Released today and based on a survey of 70 alternatives investors, “How to Meet Operational Challenges while Pursuing Opportunities in Alternative Investing” illustrates the alignments and disconnects between those investors and the managers with whom they allocate capital.

    The trend toward greater transparency is well established, but expectations continue to outpace reality, as many investors remain dissatisfied with the level of transparency available to them. While 67 per cent of managers surveyed thought existing levels of transparency surrounding operating expenses were sufficient, only 25 per cent of investors agreed. Additionally, almost nine out of 10 investors say it was important (or extremely important) that they are given the opportunity to negotiate fees, yet this negotiation occurred far more often with the larger investor than with those at lower asset levels: 73 per cent of investors with more than USD25 billion of assets reported they had success negotiating fees compared to only 29 per cent of those with less than USD1 billion of assets.

    China

    Jack Ma’s Ant Apologizes for Baiting Users Into Credit System (Bloomberg), Rated: AAA

    Ant Financial, the internet finance behemoth controlled by billionaire Alibaba founder Jack Ma, has apologized for roping unsuspecting users into its fledgling but fast-growing credit-score system.

    Ant Financial’s Alipay kicked off a free service this week to help users generate a consumption profile based on their shopping history. But buried at the bottom of its landing page was a small box — checked by default — that automatically enrolled users to its Sesame Credit unless they opted out. The subsequent online uproar prompted Ant to change that setting and to call the move “extremely idiotic,” according to a post on its official social media account.

    Jack Ma Debt Giant Grinds to Halt as China Curbs Micro-Loans (Bloomberg), Rated: AAA

    After selling billions of dollars of debt backed by consumer loans last year, Chinese billionaire Jack Ma’s Ant Financial is pausing such fundraising as the government steps up curbs on micro lending.

    The company hasn’t sold any asset-backed securities since early December, according to data compiled by Bloomberg and China Securitization Analytics. That marks an abrupt shift after it issued a record 238 billion yuan ($37 billion) in 2017 of such securities backed by consumer loans.

    Source: Bloomberg

    China moves to shutter bitcoin mines (Financial Times), Rated: A

    China is moving to eradicate the country’s bitcoin mining industry over concerns about excessive electricity consumption and financial risk, reflecting authorities’ judgment that cryptocurrencies are not a strategic industry.

    International

    TransferWise begins private launch of its consumer borderless account and bright green debit card (TechCrunch), Rated: A

    Money transfer company TransferWise has begun a private launch of its “Borderless account” for consumers. It marks the first time the European unicorn has offered a debit card (pictured below), a move that is bound to draw further comparisons with newer fintech upstarts such as Revolut.

    Initially rolling out to a thousand customers, with several thousand more to be invited in the coming weeks and a full public launch pegged for Q1 this year, the online banking account gives you local bank details for the U.K., U.S., Australia and Europe, and lets you hold and convert 28 currencies.

    If, like me, you receive income from abroad and in a different currency to your home bank account (as a contractor for TechCrunch, I’m paid in U.S. dollars), then you are very likely hit by extra bank charges and an uncompetitive exchange rate by your existing bank. This could be avoided if you had a local bank account in the country and currency you are paid in, and could then choose when and how to do the currency exchange.

    100 Most Promising AI Startups Globally (CB Insights), Rated: A

    The companies were selected from a pool of 2,000+ startups based on several criteria, including investor profile, tech innovation, team strength, patent activity, mosaic score, funding history, valuation, and business model.

    Source: Fortune

    See CB Insights’ take on the 100 top artificial intelligence startups.

    Nets Group Announces Partnership with Plug and Play (PR Newswire), Rated: B

    Nets Group, the largest Nordic-based payment service provider, announced its newest strategic partnership with Plug and Play, a global matchmaker for startups, corporations, and investors. They joined Plug and Play FinTech’s innovation platform to engage in both the European and North American startup ecosystem. This collaboration will introduce Nets Group to top tier startups that align with their innovation strategy.

    India

    Peer-to-peer lending companies join hands to form the Association of P2P Lending Platforms (Economic Times), Rated: AAA

    India’s leading peer-to-peer lending companies on Wednesday said they have come together to form the Association of P2P Lending Platforms. The first-of-its-kind association will act as a representative for its members, as well as the country’s P2P lending industry. In addition, the association will work in conjunction with the government and regulatory authorities in matters of compliance, and to further the cause of financial inclusion in the country.

    The association also intends to undertake research and development, collect data and conduct surveys that will further the development of the P2P lending industry in India. The research and its findings will be shared publicly, and exchange of ideas will be encouraged through various conferences, lectures and sponsored events.

    Other founding members include Bhavin Patel, Founder and CEO, LenDenClub and Bhuvan Rustagi, Co-Founder and COO, Lendbox.in who will be the association’s Secretary and Treasurer respectively.P2P lending, Vinay Mathews,Faircent.com,Shankar Vaddadi, i-lend.in, Bhavin Patel, LenDenClub,Bhuvan Rustagi, Lendbox.in

    Ola, ICICI Bank partner (Outlook), Rated: A

    Private sector lender ICICI Bank and ride-sharing app Ola have signed an agreement to offer a range of integrated services to their customers.

    Through this alliance, ICICI Bank customers can book Ola and pay the fare by using the bank’s mobile banking applications, ‘iMobile’ and ‘Pockets’.

    The facility will also help Ola customers to get small ticket digital credit instantaneously from ICICI Bank, on the Ola platform, a statement said, adding it will also enable digital payments to driver partners.

    i2ifunding applies for NBFC-P2P licence

    Peer-to-peer lending platform i2ifunding has applied for registration certificate from RBI to operate as non- banking financial company-peer-to-peer lending (P2P).

    Fintech moves in the new year (livemint), Rated: A

    The other pending issue is completing the formation of a Payments Regulatory Board, which was set up through an amendment to the Payment and Settlement Systems Act.

    Finally, RBI’s guidelines on peer-to-peer (P2P) lending need further refinement to bolster the nation’s growing fintech credentials. The rules have confusing eligibility criteria, are ultra-conservative in lender exposure limits and allocate too much discretionary power to the central bank without spelling out specific trigger points for regulatory action.

    Muthoot Pappachan plans strategic investments in fintech start-ups (livemint), Rated: B

    Muthoot Pappachan Group, a Kerala-based lending and financial services conglomerate, plans to make strategic investments in fintech start-ups as part of a larger digital transformation exercise to drive synergies and profitability among its business units, as it chalks out a plan to list its flagship lending arm Muthoot Fincorp Ltd, a top company executive said.

    The group may look to invest $1-5 million in each deal, he added.

    A key focus is technology solutions that will help the organisation disburse loans faster and conveniently to its target low-income customers. This will be achieved by exploring non-traditional data sources for credit appraisal, innovative repayment models and assistive technology solutions at branches.

    Muthoot Pappachan recently invested in two start-ups: peer-to-peer lending platform Faircent and RemitGuru, that offers online money transfer service to Indians settled abroad.

    Asia

    KK Fund backs founders with an ‘unfair advantage’, says founder Saito (Deal Street Asia), Rated; A

    Koichi Saito, the Founder and Partner of KK Fund, a Singapore-based venture fund with roots in Japan, is bullish on the opportunities that ASEAN offers, with the inflow of Chinese and Japanese capital into the region providing more opportunities for deal flow and exits.

    In terms of the KK Fund, can you discuss the funds it currently manages? 

    We started fund one in early 2015, which has a corpus of a few million dollars, so it was a micro fund. From that fund, we made 13 investments in online marketplaces in the e-commerce space. At the time, we were investing between $50,000 and $200,000. Then we closed a second fund at the end of 2016, a $20-million fund. We’re still focusing on seed-stage startups.

    P2P lending platforms are a proven model in the US, China and Japan, as well as in Southeast Asia. However, there is a lack of credit scoring data, so with the need for alternative financing solutions in the region, there are substantial opportunities.

    Besides the founders, what do you look for in terms of the business concepts?

    Let’s say, in the Philippines, there are a lot of remittances players. Now, I reckon only about 10 per cent of people in the Philippines have a bank account. They need a platform for admittance to a bank. If there is a solution that addresses such an issue not only in the Philippines but across Southeast Asia, then I am impressed.

    MENA

    Egyptian Fintech Startup Moneyfellows Secures Investment (Forbes), Rated: AAA

    Egypt-based fintech startup Moneyfellows has raised a $600,000 investment from a group of investors led by Dubai Angel Investors and 500 Startups, the company’s founder Ahmed Wadi revealed.

    Moneyfellows is a web and mobile-based platform allowing users to create, manage and track money circles online with members of their social networks. The startup makes money by charging users a small fee when they withdraw their payout from their money circle.

    Although rarely recognized by mainstream financial institutions, money circles have long given people who lack access to the formal banking system the ability to save money and take small loans. This type of finance is known by many different names. In Egypt, it’s called gameya while in India, it’s a chit fund. In North America, it would be a rotating credit and savings association, or ROSCA.

    To date, Wadi reports Moneyfellows has had 2,600 paying users and about 240 active circles.

    Africa

    Entrepreneurs and innovators to watch out for (The Nation), Rated: AAA

    So many fintech companies have birthed, including , Startcredits.com, to provide   online loan marketplace for  entrepreneurs to fund their  start-ups, promoting financial inclusion in the bid to fix the access to credit problems. A fintech  to watch  is Social Lender, a  digital   lending solution based on social reputation on mobile, online and social media platforms.  Social Lender is designed to bridge the gap of immediate fund access for people with limited access to formal credit. Social Lender uses its own proprietary algorithm to perform a social audit of the user on social media, online and other related platforms. Loans are guaranteed by the user’s social profile and network allowing users to then borrow from banks and other financial institutions based on their social reputation.

    Flutterwave, a payments platform is  making  it easier for banks and businesses to process payments across Africa. U.S. investors  have  invested  $10 million into it.

    Canada

    TD Bank’s first fintech acquisition is an AI company (Digiday), Rated: AAA

    TD Bank just bought its first technology firm, Toronto-based artificial intelligence startup Layer 6.

    The Canadian banking giant, also based in Toronto, invested an undisclosed amount in Layer 6 to help it “continue to transform itself” in the industry shift from mobile-first to AI-first customer experiences, said Rizwan Khalfan, TD’s chief digital and payments officer. The transaction was completed Tuesday morning.

    Authors:

    Allen Taylor

    Friday November 17 2017, Daily News Digest

    consumer debt

    News Comments Today’s main news: Kabbage secures $200M credit facility from Credit Suisse for AI-based lending expansion. Consumer Financial Protection Bureau (CFPB) files suit against Think Finance. Royal Bank of Scotland to launch robo under NatWest brand. Hexindai names Citi depository bank for American Depository Receipt Program. ICICI Bank, Paytm partner on short-term credit. Today’s main analysis: PeerIQ Lending […]

    consumer debt

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    Australia/New Zealand

    India

    Asia

    Canada

    News Summary

    United States

    Kabbage gets $ 200M from Credit Suisse to expand its AI-based business loans (TechCrunch), Rated: AAA

    After picking up $250 million in equity funding from Softbank earlier this year, the small business loans and finance company Kabbage — which uses only algorithms and machine learning (no humans) to determine an applicant’s eligibility — is announcing another big infusion of money. The company is picking up $200 million from Credit Suisse in a revolving credit facility that it will use for loans.

    Specifically, Kathryn Petralia, who is the COO and co-founded the company with Rob Frohwein, said the funding will help the company increase the number of loans it can make to larger companies in the US. The average size of those loans will grow to “north of $200,000,” she said.

    DBRS Assigns Ratings to Kabbage Asset Funding 2017-A LLC (DBRS), Rated: A

    DBRS, Inc. (DBRS) assigned ratings to the following classes of loans extended by a group of lenders to Kabbage Asset Funding 2017-A, LLC (the Facility):

    — Up to $148,150,000 of Class A Loans rated A (sf)
    — Up to $24,868,000 of Class B Loans rated BBB (sf)

    The Facility is a warehouse financing arranged for the benefit of Kabbage, Inc. (Kabbage) to support originations of small business loan receivables. Kabbage acts as servicer for the Facility.

    Study suggests many borrowers bungle credit card debt consolidation (Credible), Rated: AAA

    Thanks in part to the rise of fintech companies that make loans online, more than 16 million Americans now have personal loans — an increase of 64 percent in the last five years.

    Payoff — a personal lender that specializes in helping consumers tackle credit card debt — says its internal data shows borrowers who paid off at least $5,000 in credit card balances between August 2016 and January 2017 saw a 40-point increase in their FICO score within four months.

    Cleveland Fed study: a cautionary tale

    One year after taking out a P2P loan, borrowers had credit scores that were 16 points lower than those of the non-P2P borrowers they were matched to, on average — an impact that persisted for four years, the authors said in their working paper.

    The study found no evidence that P2P lenders are providing access to credit for “underbanked” consumers — borrowers taking out P2P loans were obtain other credit from traditional banks at rates similar to other consumers.

    But a number of companies on the list, including Lightstream, BestEgg, LendingPoint, Earnest, and RocketLoans weren’t around in 2012, when the most recent loans studied by the Cleveland Fed researchers were made. Several others — including Avant, CommonBond, Pave, and Upstart — were just getting off the ground at the time.

    The growth in fintech lending has been a driver in overall personal loan growth, with 16.1 million consumers owing $106 billion in personal loan debt as of June 30, 2017. That’s up from the 9.8 million borrowers who owed $45 billion in personal loan debt in mid-2012.

    Fed flags online lending as subprime redux, but market hits back (Global Capital), Rated: A

    ABS participants, speaking with GlobalCapital this week, hit back at the report, written by Yuliya Demyanyk, senior research economist, Daniel Kolliner, research analyst, both of the Cleveland Fed; and Elena Loutskina a professor of business administration at the University of Virginia’s Darden School of Business, and contributing author at the Cleveland Fed.

    The authors challenge the belief that peer-to-peer (P2P) loans have expanded credit to borrowers with limited access to debt since the financial crisis.

    A central argument of the Fed’s report was that sector has not done much to expand access to debt for borrowers with low credit scores.

    In securitization, subprime consumer ABS has thinned since the crisis. For the five major credit card issuers, the years 2008-2016 saw revolving credit available to US borrowers with a Fico score of less than 660 reduced by approximately $142bn, according to data published by online lender Elevate earlier this year.

    Even portfolios backing recent marketplace loan ABS have a weighted average Fico score above 680, the level that defines so-called ‘near prime’ credits, despite the notable dip in collateral quality. Marlette, for example, had an average score of 705 for its most recent transaction which was priced in October, while Prosper had a weighted average Fico score of 709, according to data from Kroll Bond Rating Agency.

    PeerIQ Lending Earnings Insights Report (PeerIQ), Rated: AAA

    We are pleased to release our inaugural Lending Earnings Insights report.

    Below are some of the main themes that we explore in this tracker:

    • Large banks continue to retrench.  Wells Fargo’s loan portfolio is down $13 Bn YOY. Loss reserves are down at all major banks except at GS due to the ramp-up in their consumer lending portfolio. Goldman Sachs expects lending initiatives to add $2 Bn in revenue in the coming years. GS loan loss reserve increased 50% and GS had the highest improvement in ROE across its peer group.
    • Credit re-normalization trend continues remains a recurring theme across all major lending groups. Overall, loss-rates on recent vintages are increasing versus prior recent vintages, although performance remains stronger than pre-crisis levels.  Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. Discover and American Express increased loan loss provisions ~50% although loan growth is at 9% and 14% respectively.
    • Consumer installment lenders do not anticipate an increase in loss rates, after having recalibrated loss expectations and increased reserves in 2016. OneMain had the smallest increase in loss reserves at 4%.
    • Consumers now have access to greater supply of credit and credit demand continues to grow. Consumer average debt-to-incomes are below pre-crisis levels.
    • Several lenders cited the shifting competitive landscape and the role of technology in driving innovation and risk management. 
    • Where are we in the credit cycle? 
    Source: PeerIQ

    Goldman Sachs’ lending platform is booming (Business Insider), Rated: A

    Other banks may be tempted to emulate Goldman Sachs’ move into lending, but they should proceed with caution. Although consumer credit demand in the US 

    Source: Business Insider

    LendingTree Holiday Shopping Survey Suggests Bigger Budgets, Selfless Spending and Mobile Shopping Among Parents this Holiday Season (Business Insider), Rated: AAA

    LendingTree, the nation’s leading online loan marketplace, recently conducted its Holiday Shopping Survey among 1,050 Americans aged 25 to 55 with at least one child. The results show that people generally expect to give more than they expect to receive, and although only 55 percent of respondents have a set budget this holiday season, 76 percent plan to spend the same amount or more on holiday shopping compared to last year.

    According to the survey, the average holiday shopping budget across all age groups was $943, although 45 percent of respondents say they don’t have a set budget for holiday shopping this year. LendingTree’s 2016 holiday survey found that 56 percent of respondents planned to shop for the holidays without a pre-set budget.

    Additionally, 29 percent say they plan to spend more on holiday shopping in 2017 than they did in the 2016 holiday season.

    Source: LendingTree

    Parents are setting a low bar for their children’s gift giving abilities in 2017, with 68 percent of parents expecting to receive no gifts from or on behalf of their kids.

    Most parents (80 percent) plan to spend at least $100 per child this year while 37 percent of parents plan to spend at least $250 per child.  Although 62 percent of parents say they try to spend the same amount on each child, younger children have a slight advantage with 12 percent of parents admitting to spending more on younger children and only 6 percent of parents use a child’s behavior to dictate how much money is spent on their gifts.

    A debit card is the primary form of payment for holiday shopping for 46 percent of respondents, as well as the primary form of payment for across all groups. Second to debit cards, 29 percent designated cash as their primary form of payment, and only 21 percent are primarily credit card users – although credit cards are considered more secure than cash or debit cards. A recent CompareCards by LendingTree survey found that 66 percent of Americans think debit cards are as safe or safer than credit cards for payments, when in fact debit cards don’t offer the same consumer protections as credit cards.

    Respondents expect to do 50 percent of their shopping online and 34 percent of their shopping on their mobile phone. Millennials (age 35 and under) expect to do 40 percent of their shopping on their phone, the largest of any other age group.

    LendingTree Inc. (TREE) Breaks into New 52-Week High on November 16 Session (Equities.com), Rated: A

    Shares of LendingTree Inc. (TREE) broke into a new 52-week high yesterday, hitting a peak of $281.80. Shares closed at $279.40 after opening at $271.75 for a move of 2.83%. The company now has a market cap of $3.34 billion.

    Sharestates, America’s Private lender, Launches Their One Click Closing Option (PR Newswire), Rated: A

    Sharestates, an online real estate investment marketplace, announced today the launch of its new One Click Closing tool, a feature that will allow return borrowers to visit a page where they can upload all the details and documents required for a new loan, allowing for a seamless transfer of closing date information without further communications. The launch of this new tool coincides with the company’s overarching goal of providing borrowers with a streamlined funding process, while providing them the opportunity to solely focus on identifying viable real estate investment opportunities.

    Bitcoin Tax Laws Are A Nightmare So People Ignore Them (International Business Times), Rated: A

    A survey of 564 American bitcoin users by the online loan marketplaceLendEDU, revealed more than 35 percent didn’t plan to report bitcoin-related gains or losses on their tax returns. On average, respondents said the current fiat value of their bitcoin holdings were $2,930.85, although that will probably continue to rise along with bitcoin’s market price.

    The Best Personal Loans of 2017 (U.S. News), Rated: AAA

    Some of the most common requirements for a personal loan are:

    • Minimum credit score: Most lenders require that you have at least fair or good credit when applying for a personal loan. Each lender sets its own cutoff for what it considers to be excellent, good, fair or bad credit. In general, fair credit is a FICO score between 580 to 669 and good credit is a score between 670 to 739. Most companies require a score of at least 600, but some have greater requirements. A higher score will increase your ability to be approved, and the higher your score, the lower interest rate you’ll qualify for too.
    • Clean credit history: Lenders don’t like to see defaults, collections or bankruptcies. If you have one or more of these on your credit report, you might not be approved for a personal loan. If you’re approved, you may have to pay an exorbitant interest rate.
    • Stable employment: A lender needs to know that if it lends you money, you’ll have the means to repay it over time. Without a stable job, you could miss payments or default on the loan. Proof of employment validates your loan application.
    • Proof of identification: Lenders usually need to see proof of identification, such as a copy of your driver’s license or passport, before approving your loan. Identity theft is common and they want to prevent thieves from taking out loans under another person’s credit.

    Choosing a Personal Loan Company

    There are two types of lenders you can choose from: banks and peer-to-peer lenders. Banks offering personal loans include SoFi and LightStream and peer-to-peer lenders include Upstart, LendingClub, Prosper and Peerform.

    Marketplace-based lenders usually have less strict credit score requirements than their bank-based counterparts. For example, LendingClub and Peerform only require a FICO score of 600 while bank-based companies such as SoFi and Payoff have minimum FICO scores of 660.

    Every lender has a minimum and maximum loan amount. For example, SoFi will lend up to $100,000 while Payoff lends up to $35,000. If you need to borrow $45,000, then only look at lenders who offer that amount or more.

    Best Personal Loan Companies of 2017

    • Best for very good credit, low APR and no origination fees: LightStream
    • Best for very good credit, low APR, no origination fees and a range of offerings: SoFi
    • Best for very good credit and low APR with merit-based qualifications: Earnest
    • Best marketplace for fair to good credit with merit-based qualifications: Upstart
    • Best bank for fair to good credit with merit-based qualifications: LendingPoint
    • Best for fair to good credit with a co-signer option: LendingClub

    The Best Bad Credit Loans of 2017 (U.S. News), Rated: AAA

    Bad credit usually is a FICO score below 640. FICO is the main scoring system for consumer credit, with credit score rangesdefined as:

    • Exceptional (800 to 850)
    • Very Good (740 to 799)
    • Good (670 to 739)
    • Fair (580 to 669)
    • Very Poor (300 to 579)

    Payday Loans Versus Personal Loans

    Payday Loans Personal Loans for Bad Credit
    Lenders Online, brick-and-mortar Online, brick-and-mortar
    Loan Amounts Typically less than $500 $1,000 to $50,000
    Loan Terms Two to four weeks One to five years
    Interest Rates 200 to 400 percent APR 36 percent APR or less

    (Source)

    Some alternative payday loan companies market themselves as more socially responsible than traditional payday lenders because they offer better terms. They also want to help consumers rebuild their shaky credit and make payments on time. For instance, LendUp provides financial education and rewards existing borrowers who repay their loans to be eligible for loans at larger amounts and lower rates. Fig Loans only charges fees to cover the costs of the loan.

    Choosing a Bad Credit Lender

    Consumers should evaluate lenders based on the following criteria:

    • Type of lending company
    • Credit history and general qualifications
    • Co-signer option
    • Additional eligibility qualifications
    • Employment requirements
    • Interest rates and types
    • Loan terms
    • Fees and penalties
    • Repayment options

    The Best Small Business Loans of 2017 (U.S. News), Rated: AAA

    According to the National Small Business Association, 69 percent of small businesses used financing in 2016, including loans, credit cards, venture capital and crowdfunding. The remaining 31 percent were not able to obtain adequate financing.

    According to data from the U.S. Small Business Administration, small business bank loans totaled nearly $600 billion in 2015. At the same time, lending from alternative sources such as finance companies and peer-to-peer, or P2P, marketplace lenders amounted to $593 billion.

    There are two categories of alternative lenders, direct and peer-to-peer lenders:

    1. Direct lenders: Direct lenders are finance companies that fund your loan with capital other than a bank and without a middleman such as a broker, investment bank or private equity firm. Some direct lenders, such as LiftFund, offer SBA loans. Typically, small to midsize businesses borrow from direct lenders.

    2. Peer-to-peer lenders: Online peer-to-peer lending directly connects you with investors who usually have a diversified loan portfolio made up of small portions of loans. A loan is often divided among several investors.

    Choosing a Small Business Loan

    Eligibility Requirements:

    • Minimum credit score
    • Minimum years in business
    • Minimum annual revenue

    Best Small Business Loans of 2017

    • Best for very small businesses: Kabbage
    • Best for borrowers with low credit scores: OnDeck
    • Best for new businesses: Accion
    • Best for low APR: LendingClub
    • Best for invoice financing: Fundbox

    Square Now Letting Some Users Buy & Sell Bitcoin Through Cash Mobile App (Crowdfund Insider), Rated: A

    Financial service company Square is reportedly now testing out bitcoin on some of its Cash mobile app users. The new feature will allow users to buy and sell the cryptocurrency through the app.

    YieldStreet Surpasses $ 200M in Originations, Bolsters Leadership Team and Launches New Website amid Period of High Growth (BusinessWire), Rated: A

    YieldStreet, the alternative investment platform that is working to change the way wealth is created, announced that it has surpassed $200 million in originations and has added two new executives to its leadership team: Volfi Mizrahi as Managing Director of Originations and Ivor Wolk as General Counsel. Their additions come on the heels of the appointment of Hrishi Dixit as CTO earlier this year.

    $ 15 Million Investment Round Fuels Accelerated Growth at Goji (PR Newswire), Rated: A

    Goji announced a $15 million investment round led by Hudson Structured Capital Management Ltd., doing business as HSCM Bermuda.

    CFPB Guns for Think Finance. Files Suit Alleging Consumer Deception in Repaying Loans Not Legally Owned (Crowdfund Insider), Rated: AAA

    The Consumer Financial Protection Bureau (CFPB) has filed suit in federal court against Think Finance, a Fintech that leverages its technology to power online lending platforms. The CFPB says the suit was filed for its “role in deceiving consumers into repaying loans that were not legally owed.”

    The CFPB alleges that Think Finance illegally collects on loans that are void under state laws governing interest rate caps or the licensing of lenders.

    The actual filing states:

    “From 2011 through at least 2015, Defendant has performed critical functions for three separate lending businesses owned by Native American Tribes: (1) Great Plains Lending, LLC (Great Plains); (2) MobiLoans, LLC (MobiLoans); and (3) Plain Green, LLC (Plain Green) (collectively, the Tribal lenders). Defendant is therefore a “service provider” under CFPA. 12 U.S.C. § 5481(226).”

    Read the filing here.

    Richard Cordray’s CFPB Has Done Its Job Well (Bloomberg), Rated: A

    As recently as a decade ago, the U.S. had no single regulator tasked with looking out for the interests of consumers in financial markets. Fragmented oversight allowed all kinds of bad behavior to fall through the cracks. Mortgage brokers hid the true terms of loans in piles of nearly indecipherable documents. Banks changed the order of transactions to extract the maximum overdraft fees from poor customers. Payday lenders offered products designed to trap people in an unending cycle of debt.

    Cordray has accomplished a lot. The CFPB designed new, simpler mortgage-loan disclosures. It shed light on banks’ overdraftpractices. It created the first federal rules to make payday lending less predatory. It gave the public reams of valuable information, such as a database that allows consumers to compare credit-card agreements. Its practice of publishing complaints pushed financial institutions to be more responsive. Its investigation of Wells Fargo brought national attention to the fake-accounts issue.

    Some of its practices (in particular, preferringdiscretionary enforcement over explicit rule-making) are less than ideal and ought to be revisited; in other areas (such as auto lendingand credit reporting) its authority should be expanded.

    We need a watchdog at Consumer Financial Protection Bureau (Washington Post), Rated: A

    Cordray’s departure gives President Trump an opportunity to appoint a new leader, and I’m concerned that this will derail the watchdog agency’s consumer-first mission.

    In Cordray’s parting statement, he wrote that the agency has recovered $12 billion for nearly 30 million consumers.

    Five opportunities and challenges in digital lending (American Banker), Rated: A

    Despite the rapid growth of online and mobile lending in recent years, many banks are still just getting started.

    Traditional banks should help govern fintech (Reuters), Rated: A

    Traditional lenders should demand that online financial companies protect consumer privacy and money interests, Federal Reserve Governor Lael Brainard said on Thursday.

    Banks often pay tech companies for the information they gather on borrowers. For that reason, Brainard said, those lenders can set high standards in consumer protection and privacy.

    Under Trump, Banking Watchdog Trades Its Bite for a Tamer Stance (The New York Times), Rated: A

    The regulator, the Office of the Comptroller of the Currency, which oversees the nation’s biggest banks, has made it easier for Wall Street to offer high-interest, payday-style loans. It has softened a policy for punishing banks suspected of discriminatory lending. And it has clashed with another federal regulator that pushed to give consumers greater power to sue financial institutions.

    Buffett’s ‘Million-Dollar Bet’ shows how much fees matter (Herald Tribune), Rated: A

    One category of alternative investments includes hedge and private equity funds. I am not in favor of such investments, especially for the average investor, and I am not alone.

    Typically, hedge fund fees are 2 percent plus an incentive, or “carry,” of 20 percent of the profits. The result is billions of dollars for the managers and far less for clients.

    In 2015, Buffett lagged his hedge fund rival for the first time since 2008, gaining 1.4 percent versus Protégé’s 1.7 percent. However, 2016 saw Buffett gain 11.9 percent to Protégé’s 0.9 percent. At the end of 2016, Buffett’s index fund gained 7.1 percent per year, or $854,000 in total, compared with 2.2 percent per year, or $220,000, for Protégé.

    United Kingdom

    Royal Bank of Scotland to launch robo-advice under NatWest brand (Financial Times), Rated: AAA

    Royal Bank of Scotland is launching robo-advice for more than 5m customers as banks return to the investment market after a string of fines and as regulators attempt to plug the UK’s wide “advice gap”.

    The state-backed lender is claiming to be the first in the UK to launch automated online investment advice when it opens on Monday under its NatWest brand. The service is designed for the majority of customers and for people with as little as £500 to invest as a lump sum.

    The process, which costs £10 plus fees for the investment, is aimed at customers who lack the confidence to invest alone but do not wish to pay higher charges for full-blown financial advice, such as tax and inheritance planning.

    Beyond the bank (Prospect Magazine), Rated: AAA

    Five high street banks remain responsible for more than 80 percent of business lending, prompting calls for greater market choice both from challenger banks and from emerging FinTech (financial technology) firms. However, the introduction of new platforms and new players raises questions of integration, innovation and regulation.

    Launched seven years ago, Funding Circle has since hosted 70,000 lenders and is responsible for 2 percent of total UK business lending. While going head-to-head with the banks it is worth noting that Funding Circle is also growing the market.

    So what next for financial services? Will the disruptors get disrupted? Possibly. One attendee suggested that FinTech firms would soon be providing ‘white label’ versions of their services to traditional banks that would then offer those services to customers. Others suggested that the likes of Amazon and Google would provide the biggest future threat not just to banks but to today’s FinTech leaders.

    RateSetter, Funding Circle, Zopa feature in Women in Fintech Powerlist (P2P Finance News), Rated: A

    FEMALE employees at RateSetter, Funding Circle, Zopa and Landbay have all made this year’s Women in Fintech Powerlist, which celebrates the achievements and talent of women across the sector.

    RateSetter’s entrants are: Alexa McAlister, head of partnerships; Angela Yotov, head of legal; Joanna Wright, chief risk officer; Katie Brown, corporate counsel; Laurence Perrin, head of compliance; Lucy Bott, head of customer operations; and Maud Holma, finance counsel.

    Women from Funding Circle who made the list are: Alysha Randall, global finance director; Lisa Jacobs, chief strategy officer; Lucy Vernall, global general counsel and global head of compliance; Maria Weaver, chief people officer; Panni Morshedi, managing director of international; Swati Lay, chief information security officer; and Vittoria Reimers, VP loan operations.

    VPC takes majority stake in online lender Borro (P2P Finance News), Rated: A

    VICTORY Park Capital Specialty Lending (VPC) has continued its expansion into balance sheet lending by upping its investment in online secured lender Borro.

    The alternative finance-focused investment trust now has the largest stake in the firm, which provides loans secured on luxury assets, owning around 49 per cent.

    How does LendInvest’s buy-to-let offering stack up to P2P rivals? (P2P Finance News), Rated: A

    LendInvest said it will be offering buy-to-let loans through intermediaries ranging between £50,000 and £5m, with rates starting at 3.69 per cent depending on whether borrowers take a two, three or five-year fixed rate.

    In comparison, Landbay facilitates fixed rate and tracker buy-to-let loans of between £70,000 and £500,000 from 3.55 per cent.

    And fellow P2P lender LandlordInvest offers loans of between £30,000 and £300,000 from five per cent.

    Crowdproperty Pitches to Raise 600K GBP through Equity Crowdfunding (P2P-Banking), Rated: A

    UK p2p lending marketplace Crowdproperty is currently pitching on Seedrs to raise 600K GBP from the crowd at a pre-money valuation of 5.9M GBP.

    Digital bank Monzo sizes up IPO (AltFi), Rated: A

    In an advertisement for a new Chief Financial Officer, Monzo has let on about its plans for an IPO within three to four years time.

    The posting, published today on Monzo’s job site, says:

    Alongside the CEO, you’ll be heavily involved in future capital raising – pitching to investors and negotiating the best terms. In the next 3-4 years, it’s likely you’ll be responsible for taking the company through an IPO.

    UK FinTech Beats Brexit Blues with New Funding Record (Digit), Rated: A

    The UK fintech sector has enjoyed a record year of investment in 2017 with more than £2 billion invested across 182 deals, according to research body FinTech.Global.

    Additionally, the compound annual growth rate (CAGR) of 10.7% experienced by firms valued below £75 million between 2014 and 2016 was supplemented with a further investment of £1.2 billion for this bracket in 2017. As for companies valued above the £75 million figure, a further £877.1 million has been committed across eight deals.

    Investment in the UK’s top-10 fintech firms accounted for nearly 46.7% of the total investment between Q1 and Q3 2017. The largest of these deals went to Gryphon Insurance in June, valued at £179.6 million. Of the top 10 deals, four went to lending firms – Prodigy Finance1stStop GroupNeyber and Funding Circle, valued at £457.5 million. Of the remaining six deals, two went to challenger banks Tandem and Atom, two went to enterprise software companies Options Technology and Darktrace, and the final two went to insurtech companyies Gryphon Insurance and Revolut.

    Millennials say advisers are inaccessible and too expensive (Financial Times), Rated: A

    Millennials view financial advice as an industry of “exclusivity, inaccessibility and high cost,” according to research carried out by the financial advice trade body.

    The poll of 178 millennials found 78 per cent of them believed they could only receive advice if they had investible wealth in excess of £50,000 but a significant number wanted advice when they had £10,000 or less.

    Online-only options appealed to just 12 per cent of those surveyed.

    Cardiff will host one of the first a new network of tech hubs being set up in a £21m investment (Wales Online), Rate: B

    A new tech hub will be set up in Cardiff as part of a UK-wide network of regional hubs under a £21m investment announced by the UK Government.

    China

    P2P Lender Hexindai Names Citi As Depositary Bank for American Depositary Receipt Program (Crowdfund Insider), Rated: AAA

    On Wednesday, Chinese peer-to-peer (P2P) lending platform Hexindai announced it has appointed Citi’s Issuer Services business as the depositary bank for its American Depositary Receipt (ADR) program. According to the online lender, the program was established through an initial public offering of its American Depositary Shares (ADSs), priced at $10 per ADS, which raised approximately $50 million.

    Unified credit rating system expected soon, say experts (China Daily), Rated: A

    A unified platform for collecting personal financial information and assessing people’s credit ratings is being planned, and it is expected to be launched soon as a part of the central bank’s regulatory framework, experts told China Daily.

    It will complement the existing credit center of the People’s Bank of China, the nation’s central bank.

    China Fintech Companies Dominate Top-10 List of Global Innovators (China Money Network), Rated: B

    Compared with the ranking last year, two more Chinese firms were added to the top 50 list. Online marketplace lending company Dianrong and credit card and online financial service firm U51.com, or 51Xinyongka, rose to top 50. Among the 100 fintech companies, lending and payments focused companies lead in terms of sectors.

    European Union

    Online Lender WeShareBonds Raises €12 Million in Mission to Help Finance French SMEs (Crowdfund Insider), Rated: A

    WeShareBonds, an AMF-registered crowd lending platform, has raised €12 million to continue financing French SMEs. The new funding includes both the closing of WeShareBonds’ second credit fund (Prêtons aux PME 2018) to finance French SMEs for €10 million and an equity increase of €2 million to finance platform growth.

    International

    Peer to Peer (P2P) Lending in India: A positive disruption to traditional financing, albeit cautious approach required (CARE Ratings), Rated: AAA

    The overall size of the NBFC sector in India has grown significantly during the last few years with increasing share of NBFC total assets to bank total assets (approximately around 15 per cent of the total banking assets).

    P2P Lending in UK: In UK, the P2P market has seen active retail investor participation. The outstanding loan book in the UK industry is approximately around £2.9 billion (~Rs.25,000 crore) as on Q3-2017 as compared to £0.75 billion (~Rs.6,500 crore) as on Q4-20142 . Based on the outstanding loan book as on Q3-2017, the key players in the segment are Funding Circle, Zopa, FolktoFolk, Ratesetter and ThinCats capturing majority of the market.

    P2P Lending in USA: P2P industry in USA is around $20 billion (~Rs.1.3 trillion) in 2016 up from $18 billion in 20153 . P2P lending in the USA has seen active participation of institutional investors (approximately 70 per cent of the total investor volumes) lending to borrowers through the platforms. In the USA, three dominant players capture majority of the market which include Lending Club, Prosper and Sofi.

    P2P Lending in China: Globally, China has the largest market size of P2P lending which started in 2006. As of January 2017, there were total 2388 P2P platforms in China4with trading volume in 2015 touching $67 billion (~Rs.4.4 trillion) which is ten times that of UK and four times bigger than USA. However unlike USA and UK, the China P2P market is dominated by large number of small and medium size firms.

    P2P Lending in India: Globally P2P lending has been in existence for more than ten years; however, it has been evolving in India in the last couple of years. Given the recent RBI guidelines, companies will now need to obtain NBFC–P2P license and will come under the purview of the regulator. There are more than 50 P2P online platforms operating in India. I-Lend, LenDenClub, Faircent, Lendbox, i2iFunding, Monexo, India Money Mart, Rupaiya Exchange are some of the leading P2P platforms operating in India. Currently, some of the leading P2P platforms claim to disburse loans amounting to ~Rs.1 to 2 crore a month. Outstanding loans under P2P model is estimated to have reached ~Rs.50-60 crore.

    Source: CARE Ratings

    Read the full report here.

    TAURUS COIN OPENS FOR BUSINESS GLOBALLY (EIN News), Rated: A

    United Kingdom’s leading peer to peer cryptocurrency lender Taurus Coin today launched its online lending marketplace with USD 150M lending capital, bringing the world’s fastest growing form of lending to the South-East Asia, Gulf, Africa, Europe, and India investors.

    Australia/New Zealand

    Sharesies to look at robo-advice once regulator rules on exemptions (The National Business Review), Rated: A

    Start-up fund distribution platform Sharesies will develop a plan to provide personalised, automated financial advice, known as robo-advice, once there is more clarity about regulatory exemptions.

    Last month the Financial Markets Authority decided to grant an exemption to enable the provision of robo-advice services under the current financial advice regime and said it aims to finalise the exemption and be open for applications in early 2018.

    India

    ICICI Bank and Paytm partner for short term credit for users (Medianama), Rated: AAA

    ICICI Bank and Paytm have partnered to offer short-term credit to users. The credit given to customers will be interest-free for 45 days and the bank says that it will give loans up to Rs 20,000. Initially, this will be allowed for select ICICI Bank customers who are on Paytm and will be extended to other bank customers as well who use Paytm.

    Once the credit limit is set up for a customer, a consolidated bill is generated on the first day of the next month, which has to be paid by the 15th day of the same month. Customers can use their Paytm Wallet, debit card or internet banking of any bank for an easy repayment of their dues.

    In August, the bank launched product called Instant Credit Card where certain pre-approved customers of the bank will be able to get a virtual credit card much before the physical card is delivered to them. A physical card will be sent to the customer’s address in 5-7 days.

    Meanwhile, the bank’s rival, HDFC Bank said that it would start offering a virtual credit card for customers through its PayZapp wallet, as indicated by this Financial Express report. HDFC Bank has the maximum number of credit cards in circulation with 9.03 million. Meanwhile, ICICI Bank has 4.34 million credit cards.

    • Paytm’s rival in the wallet space, MobiKwik has partnered with Bajaj Finance to to bring in credit facilities to a wallet business.
    • In April this year, PayU India will be investing $50 million in its product LazyPay over the next few years. The credit facility could extend for amounts from Rs 3,000 and even up to Rs 10,000, depending upon customer behaviour.
    • For the recently concluded festival season, e-commerce player Flipkart started to offer EMIs on debit cards on high-value purchases.

    Narrow banking is an idea whose time has come (livemint), Rated: A

    The most heartening takeaway from last week’s public sector bank executive jamboree was the discussion around differentiated lending structures. The ThinkShop (earlier editions were called Gyan Sangams) suggested that large banks focus on corporate lending, while smaller lenders focus on retail loans or specific geographies.

    Taking differentiated lending to its logical end, the time has come to consider converting the worst performers among state-owned lenders to narrow banks, which won’t lend at all.

    Narrow banks are safe banks. By not lending, and using their deposits to buy government bonds, they carry virtually no credit risk. There is no danger of non-performing loans and frequent injections of equity capital that has to be funded by taxpayers. For the Reserve Bank of India (RBI) too, supervision gets easier. There is no need for deposit insurance.

    RBI likely to issue clarifications on P2P lending norms soon (Money Control), Rated: B

    The Reserve Bank of India is soon likely to issue clarifications on the guidelines for peer-to-peer (P2P) lending platforms relating to the lending limits, trusteeship and other operational norms.

    Asia

    Active.Ai raises over million in Series-A round (India Times), Rated: A

    Singapore-based fintech platform Active-.Ai has raised $8.25 million in a series-A round, which was led by Vertex Ventures, Creditease Holdings and Dream Incubator. Existing investors Kalaari Capital and IDG Ventures also participated.

    Canada

    WEALTHSIMPLE, LEAGUE AMONG KPMG’S TOP 50 FINTECH COMPANIES (Betakit), Rated: B

    Toronto-based WealthsimpleLeague, and SecureKey were among the company recognized in the top 50 category. In the emerging stars category, Toronto-based BorrowellWave, and Sensibill were recognized.

    The list was put together by FinTech investment firm H2 Ventures and KPMG FinTech.

    Authors:

    George Popescu
    Allen Taylor