- Today’s main news: Spreads narrow on SoFi’s SCLP 2018-1 consumer loan ABS. DiversyFund raises $1M. Ranger Direct Lending sees arbitration delay. Klarna partners with Maplin. BNI Europa partners with Funding Circle on German SME lending. Western Union opens tech center in India.
- Today’s main analysis: Banco Popular reboots Eloan.
- Today’s thought-provoking articles: Marketplace Lending Association executive director’s testimony House subcommittee. Is China’s financial risk worse than the U.S.’s before the financial crisis? P2P lending set to explode in 2018.
- Spread narrow’s on SoFi’s first 2018 consumer loan ABS.
- SoFi lays of Healdsburg employees. AT: “Interesting considering they just acquired Clara Lending teams, but the timing of this makes me wonder if it might be the new CEOs doing. Or was this already in the works before Noto arrived?”
- DiversyFund raises $1M. AT: “Spectacular achievement. Congratulations.”
- DiversyFund plans ICO for next fundraising effort. AT: “It costs much less for an ICO than for an IPO. However, that could change if the SEC gets serious about regulations.”
- Testimony of Nathaniel Hoopes. AT: “A 12-page must-read.”
- Goldman acquires Final. AT: “It was probably more cost-effective to purchase an already-experienced team to do what Goldman wants to do rather than build the team in-house. Final’s team is ready to start engineering. Hiring an entire division to build from the ground up would take time and money. In today’s business environment, legacy institutions cannot afford to risk falling behind the innovators. Goldman is consistently showing that it can compete, and will compete, with alternative lenders. They are a contender, and now they’re expanding.”
- The best unsecured business loans. AT: “According to U.S. News.”
- WealthFront intros new home-buying feature to its mobile app.
- RealtyShares links capital and investments. AT: “A basic introduction.”
- Kabbage challenges banks. AT: “More detail on the expansion of their credit lines.”
- Nissan partners with AutoGravity. AT: “It won’t be long before every auto buyer in the nation knows about AutoGravity.”
- Why Congress should fix Madden now.
- More data needed for small business ABS to thrive.
- eSecLending updates best practice guide.
- How AI is creating a new kind of financial advice.
- RiverNorth announces preferred dividend.
- IHMVCU taps QCash for payday lending alternative.
- Virginia lawmaker wants to stifle internet loans.
- Radio station to offer loans.
- NerdWallet names Guaranteed Rate best online mortgage lender, best FHA mortgage lender.
- 6 fintech trends in 2018.
- Ranger Direct Lending arbitration delayed. AT: “Interesting. Just yesterday they were expecting it come to a close by mid-April.”
- Relx buys ThreatMetrix.
- GLI Finance raises 50M GBP from HoneyComb Fund.
- Ezbob raises 15M GBP.
- These lenders need SME money more than SMEs need theirs.
- Augmentum Capital goes public to back up fintech startups.
- Former finance minister says China’s financial risk worse than U.S.’s before the financial crisis.
- Senmiao Technology to IPO for $14M.
- Klarna signs Maplin for pay later. AT: “Klarna’s pay later feature is a hot item for online retailers. Good partnership.”
- BNI Europa using Funding Circle to fund German SEM loans. AT: “Another great partnership. What both the Klarna-Maplin and this partnership signify is that EU and UK alternative lenders and traditional financial institutions can still work together post-Brexit.”
- Banco Popular reboots Eloan.
- Spendesk raises 8M Euro.
- 3 Dutch banks hit with cyberattacks.
- CHECQIT aims to empower the unbanked through the blockchain.
- Rubique partners with Optacredit.
- P2P lending set to explode.
- How to enhance startup growth. AT: “Suggestions for the Reserve Bank of India (RBI).”
- 10 things the RBI can do to boost capital for digital lenders.
- United States
- Spreads narrow on SoFi’s 1st consumer loan ABS of 2018 (Asset Securitization Report), Rated: AAA
- Online lender SoFi orders lays off for Healdsburg employees (The Press Democrat), Rated: A
- DiversyFund Raises $ 1 Million in Series A Funding Round (BusinessWire), Rated: AAA
- Innovative crowd funding platform DiversyFund looks to ICO for next phase of capital raising (TechStartups), Rated: A
- TESTIMONY OF NATHANIEL L. HOOPES: EXECUTIVE DIRECTOR, MARKETPLACE LENDING ASSOCIATION (House.gov), Rated: AAA
- Goldman Sachs Acquires Team Behind Credit Card Startup Final (Fast Company), Rated: AAA
- The Best Unsecured Business Loans of 2018 (U.S. News), Rated: A
- A California investing startup just launched a new feature to show how much home you can afford (Business Insider), Rated: A
- RealtyShares Digitally Links Capital And Real Estate Investments (Benzinga), Rated: B
- Kabbage to further challenge banks with $250,000 credit lines (American Banker), Rated: A
- Nissan Motor Acceptance Corporation Announces New Way to Finance from Your Mobile Device (BusinessWire), Rated: A
- Why Congress Needs to Act Now to Fix the “Madden Issue” (Lend Academy), Rated: A
- More data required for small biz ABS to thrive (GlobalCapital), Rated: A
- eSecLending updates best practice guide (securies lending times), Rated: B
- How artificial intelligence is creating a new kind of financial advice (CUInsight), Rated: A
- RiverNorth Marketplace Lending Corporation Announces Preferred Dividend (BusinessWire), Rated: B
- IHMVCU taps QCash Financial to provide payday loan alternative (BusinessWire), Rated: A
- Lawmakers Look To Put Limits On Internet Loans (WVTF), Rated: B
- February: Briefly in the News (Columbia Business Times), Rated: A
- Guaranteed Rate Named a Best Overall Online Mortgage Lender and a Best FHA Mortgage Lender for Refinance by NerdWallet (GlobeNewswire), Rated: B
- 6 FinTech trends expected in 2018 (Networkers), Rated: B
- United Kingdom
- Ranger Direct hit by arbitration delay and manager uncertainty (Citywire), Rated: AAA
- Relx pays £580m for digital identity company (Financial Times), Rated: A
- GLI Finance scores £50m funding line from HoneyComb fund (AltFi), Rated: A
- Ezbob Raises £15M in Expansion Capital (Finsmes), Rated: A
- Meet The Lenders That Need Your SME’s Money More Than You Need Theirs (Forbes), Rated: A
- Augmentum Capital to seek public listing to back fintech start-ups (Financial Times), Rated: B
- China’s financial risk worse than in US before financial crisis, says former finance minister (Today Online), Rated: AAA
- Chinese P2P lending platform Senmiao Technology sets terms for $ 14 million US IPO (NASDAQ), Rated: A
- European Union
- Klarna signs Maplin for online pay-later (Finextra), Rated: AAA
- BNI Europa to fund German SME loans via Funding Circle (Finextra), Rated: AAA
- Banco Popular reboots Eloan for new era in online lending (American Banker), Rated: AAA
- Spendesk Raises €8 Million to Expand Its Platform for All Company Purchases (Payments Journal), Rated: A
- ABN Amro, ING and Rabobank hit by cyberattacks (Fintech Futures), Rated: B
- CHECQIT, the P2P Lending Platform Aiming to Empower the Unbanked (The Merkle), Rated: A
- Finastra acquires Olfa Soft SA (Realwire), Rated: B
- Western Union Opens Tech Center In India (Bank Innovation), Rated: AAA
- Rubique announces strategic partnership with Optacredit (Outlook), Rated: AAA
- P2P Lending Set to Explode in 2018 (PR Newswire), Rated: AAA
- Budget 2018: how can we enhance the growth of startups in India? (YourStory), Rated: A
- 10 things FM Arun Jaitley can do to boost access to capital via digital lenders (Financial Express), Rated: A
- Lancers raises $ 9.2m venture round (Deal Street Asia), Rated: AAA
- Crowd Realty closes $ 5.2m Series A (Deal Street Asia), Rated: A
- SSC warns against investing in cryptocurrencies (Viet Nam News), Rated: B
Spreads narrow on SoFi’s 1st consumer loan ABS of 2018 (Asset Securitization Report), Rated: AAA
Strong demand and higher credit enhancement allowed Social Finance to offer lower spreads on its first consumer loan securitization of the year, even after upsizing the deal to $850 million from $650 million originally.
Four tranches of rated were issued, resulting in an advance rate of 91%, according to a person familiar with the transaction. The amount of overcollateralization in the deal will gradually build from 9% to 16%.
Two senior tranches of notes rated AA + by KBRA were issued. The Class A-1 tranche, which has a shorter expected life, pays 50 basis points over the Eurodollar synthetic forward curve, in from 57 basis points on the comparable tranche of the previous transaction. The Class A-2 tranche pays 75 basis points over the interpolated swaps curve, in from 90 basis points on the previous deal.
Online lender SoFi orders lays off for Healdsburg employees (The Press Democrat), Rated: A
The company, more commonly known by its acronym SoFi, laid off a “small percentage of our employment base” at the office next to the Healdsburg Plaza, said spokesman Jim Prosser. He declined to state an exact number.
DiversyFund Raises $ 1 Million in Series A Funding Round (BusinessWire), Rated: AAA
DiversyFund, the only vertically-integrated crowdfunding platform for alternative investments such as private market real estate, announces today that it has surpassed its $1 million Series A financing goal, as investors flock to the innovative platform that is using technology to disrupt alternative investing.
Innovative crowd funding platform DiversyFund looks to ICO for next phase of capital raising (TechStartups), Rated: A
DiversyFund also plans on entering the crypto-currency space by launching an Initial Coin Offering (ICO) as part of its financing plan. An ICO will make it easier for crypto-currency users to invest in DiversyFund and own a crypto-currency that is uniquely backed by institutional-grade real estate assets.
TESTIMONY OF NATHANIEL L. HOOPES: EXECUTIVE DIRECTOR, MARKETPLACE LENDING ASSOCIATION (House.gov), Rated: AAA
As the Chairman and Ranking Member know, fintech – and marketplace lending in particular – is no longer just an idea or a possibility, it is now a proven solution to a long-standing problem – the lack of access to a wide range of affordable credit options for tens of millions of working Americans, recent graduates, and millions of small businesses. This industry is effectively serving the broad American “middle class” that remains our engine for economic growth and prosperity. It is also bringing greater democracy to investment in credit – providing investment opportunities once only available to the wealthiest or largest institutional investors in society. MPPs are delivering new, beneficial products to consumers, in locations that many banks no longer can serve; and increasing needed competition in key markets.
This Subcommittee and the full Committee can build on its previous work to make that happen with the following:
- Awareness: Hearings like this one are pivotal to making more Americans aware of the financial services MPPs have to offer.
- Reaching the Underserved: MPPs are reaching communities that have traditionally been unbanked and underbanked.
- Opportunities for Congress: There are a series of bipartisan bills that MLA encourages Congress to take up and pass as soon as possible, including the Protecting Consumers’ Access to Credit Act of 2017 and the IRS Data Verification Modernization Act of 2017.
Read the full 12-page testimony here.
Goldman Sachs Acquires Team Behind Credit Card Startup Final (Fast Company), Rated: AAA
Goldman Sachs has agreed acquire Final, an Oakland-based credit card startup, the bank confirmed to Fast Company on Monday. The new talent will help fuel the big bank’s expanding consumer efforts.
With Final, Goldman gains about a dozen engineers and product managers with experience building a consumer finance product from scratch. When they arrive at Goldman in the spring, they will join a growing roster of consumer-oriented employees, all part of the bank’s new Consumer and Commercial Banking division.
The Best Unsecured Business Loans of 2018 (U.S. News), Rated: A
In fact, 69 percent of small firms used some form of financing in 2016, according to the National Small Business Association.
- Best for term loans: OnDeck
- Best for lines of credit: Kabbage
- Best for invoice financing: Fundbox
- Best for equipment financing: Direct Capital
- Best for merchant cash advances: Rapid Advance
A California investing startup just launched a new feature to show how much home you can afford (Business Insider), Rated: A
Wealthfront, the California investing startup with $10.5 billion under management, announced Monday a new feature to help users with the home-buying process.
Drawing on data from real estate database Redfin, the feature allows people to explore housing costs in neighborhoods across the US. It also shows them whether or not a certain home purchase is affordable and how it might impact other financial goals.
RealtyShares Digitally Links Capital And Real Estate Investments (Benzinga), Rated: B
RealtyShares is a middle market real estate investment platform that uses technology to more efficiently source and underwrite real estate transactions within the $250 billion per annum middle market segment. RealtyShares provides an online capital-opportunity link between its network of individual and institutional investors and pre-vetted real estate operators.
Kabbage to further challenge banks with 0,000 credit lines (American Banker), Rated: A
Petralia said existing customers have been asking for larger credit lines.
The small-business lender has been growing quickly: In three years revenue growth has jumped 979%. It provided 250,000 loans in 2017 and has lent out $4 billion overall.
Kabbage worked with its partner, Celtic Bank, to develop the bigger line of credit.
The lending process for the new line will still take 10 minutes, with no human intervention, she said. The lowest loan rate will be 6% of the loan amount in a six month period or 12% in a 12-month period.
Nissan Motor Acceptance Corporation Announces New Way to Finance from Your Mobile Device (BusinessWire), Rated: A
Consumers looking to purchase a Nissan can now access personalized retail and lease preapproval offers through digital credit shopping on their smartphones. Nissan Motor Acceptance Corporation (NMAC) today announced it is joining the mobile-first AutoGravity automotive shopping and financing platform. Through this collaboration, consumers will be able to select any Nissan vehicle and see finance offers from NMAC within minutes on their mobile device.
The AutoGravity app guides automotive shoppers through an intuitive four-step digital retail process:
- Select any make and model of any new or used car available in the United States.
- Browse thousands of cars by trim, color, body type and other attributes. The platform shows the closest dealers and inventory based on vehicle preference and geo-location.
- Search for financing with smartphone simplicity. Users can scan their driver’s license and connect to social media to quickly pre-fill the application.
- Receive up to four personalized preapproval finance offers in minutes and complete the purchase or lease at the dealership selected by the consumer.
Why Congress Needs to Act Now to Fix the “Madden Issue” (Lend Academy), Rated: A
Courts are distorting credit markets in a way that hurts Main Street small businesses, and Congress now has an opportunity to fix it.
The Madden decision undermined the legal doctrine known as “valid when made,” which has been a cornerstone of banking law for over 100 years.
In fact, a joint study by professors from Columbia, Fordham and Stanford Law schools found that “after Madden, loans to borrowers with FICO scores below 644 virtually disappeared.”
More data required for small biz ABS to thrive (GlobalCapital), Rated: A
Despite the uptick in online loan securitizations, only a small handful of deals have been backed by small business loans due to the fragmented nature of the industry. This makes it challenging to aggregate data for securitizations, speakers said at the conference on Tuesday.
eSecLending updates best practice guide (securies lending times), Rated: B
eSecLending has updated its securities lending best practice guide to reflect the rise of US non-cash collateral, term trading, and peer-to-peer lending, along with the rising costs of indemnification.
The financial services provider’s third edition, available from today, aims to help market stay current on developments in order to optimise their programmes for both risk and return in the modern market landscape.
The guide outlines the fact that non-cash collateral is becoming more prevalent for US-domiciled lenders as some borrowers prefer to offer non-cash for balance sheet reasons.
How artificial intelligence is creating a new kind of financial advice (CUInsight), Rated: A
As digitization has revolutionized financial services, new online and mobile tools have made financial advice and planning services more accessible to everyone. Now, advances in artificial intelligence (AI) promise to deliver a second big bang to the wealth management universe, making it even easier for consumers to assess their financial health, make investing decisions and plan for long-term goals – on their own and in their own time.
RiverNorth Marketplace Lending Corporation Announces Preferred Dividend (BusinessWire), Rated: B
In accordance with the terms of RiverNorth Marketplace Lending Corporation’s 5.875% Series A Term Preferred Stock (“Series A Preferred Stock”) (NYSE: RMPL), the Board of Directors of RiverNorth Capital Marketplace Lending Corporation has declared a Series A Preferred Stock cash dividend for the first quarter of 2018 of $0.4488 per share of Series A Preferred Stock.
The following dates apply to the dividend declared:
|Ex Date||Record Date||Payable Date|
|January 31, 2018||February 1, 2018||February 15, 2018|
IHMVCU taps QCash Financial to provide payday loan alternative (BusinessWire), Rated: A
QCash Financial, a provider of automated, cloud-based, small-dollar lending technology, today announced that it is partnering with I.H. Mississippi Valley Credit Union (IHMVCU) to offer short-term, small-dollar pay loan alternatives to credit union members through its QCash product.
Using QCash Financial’s product suite, IHMVCU can offer an affordable lending option to members who otherwise might rely on costly services like traditional payday loans to cover unexpected expenses.
Lawmakers Look To Put Limits On Internet Loans (WVTF), Rated: B
That’s why Senator Scott Surovell, a Democrat from Fairfax County, wants to limit consumer finance loans to a 36 percent annual interest rate.
That’s why Senator Scott Surovell, a Democrat from Fairfax County, wants to limit consumer finance loans to a 36 percent annual interest rate.
February: Briefly in the News (Columbia Business Times), Rated: A
Community radio station KOPN announced the station will use profits from its online store to make loans to entrepreneurs in the developing world. The station will utilize a technology platform from online lender Kiva.org, a nonprofit founded in 2005 and based out of San Francisco. Items in the online store include mugs, sweatshirts, hats, and tote bags.
Guaranteed Rate Named a Best Overall Online Mortgage Lender and a Best FHA Mortgage Lender for Refinance by NerdWallet (GlobeNewswire), Rated: B
Guaranteed Rate, one of the largest retail mortgage lenders in the nation, was named a Best Overall Online Lender and a Best FHA Mortgage Lender for Refinance by the popular personal finance news site NerdWallet. NerdWallet’s Best-of Awards Program recognizes industry-leading options for consumers across a variety of financial products. As part of providing consumers with clear and objective recommendations for all their financial decisions, NerdWallet evaluated dozens of financial products across multiple product categories to identify the best options of the year.
6 FinTech trends expected in 2018 (Networkers), Rated: B
- FinTech will drive the finance industry – In fact, around 40% of Americans haven’t stepped foot in a bank or credit union in the last six months (Bankrate Financial Security Index survey), which isn’t surprising since the number of actual branches has dropped considerably in the past 10-15 years.
- Blockchain technology will become mainstream
- More mobile technology – The trend in mobile usage within banking is expected to continue to rise over the next year– it’s predicted that by 2019, mobile banking and payments will reach a staggering $92 billion.
- Challenges around security, privacy and trust
Ranger Direct hit by arbitration delay and manager uncertainty (Citywire), Rated: AAA
The New Year rally in Ranger Direct Lending (RDL) shares has come to an abrupt halt after the listed loan fund, which is backed by fund manager Mark Barnett, said arbitration to settle the legal dispute between it and Princeton Alternative Finance had been extended by around two months.
The £119 million investment trust has been locked in an argument with Princeton, a New Jersey-based investment fund in which it is the leading investor, over its exposure to Argon Credit, a US peer-to-peer lending platform that collapsed in December 2016.
Uncertainty over the exposure to Argon – which represents 14% of its £217 million net assets – and doubts over the due diligence by its adviser Ranger Alternative Management (RAM) have hobbled the shares. They fell over 23% last year but had rallied since the end of December when they hit a record low discount of 32% below net asset value. From 704p at the start of the year they recovered to 767p last week but have dropped 4% or 31p today after yesterday’s announcement. Although still wide, the discount has narrowed to just under 13%.
Relx pays £580m for digital identity company (Financial Times), Rated: A
Relx, the UK-listed information and analytics group formerly known as Reed Elsevier, has struck its biggest deal in a decade with the £580m purchase of ThreatMetrix, an online identify verification business.
ThreatMetrix has one of “largest repositories of online digital identities”, according to UBS analysts, and has built a database containing 1.4bn unique online digital identities from 4.5bn devices in 185 countries.
GLI Finance scores £50m funding line from HoneyComb fund (AltFi), Rated: A
The funding line has a term of 3 years and comprises a £50m revolving credit facility, of which £20m will be drawn and deployed immediately.
Ezbob Raises £15M in Expansion Capital (Finsmes), Rated: A
Ezbob, a London, UK-based E-lending company, raised £15M in funding.
Da Vinci Capital Management Ltd. reportedly made the investment at a post money valuation of £100m.
Meet The Lenders That Need Your SME’s Money More Than You Need Theirs (Forbes), Rated: A
in particular, the UK’s peer-to-peer lending platforms are now crying out for new customers.
Today, however, more than 30 lending platforms, including all the large small business lenders, offer their own IFISA or are on the verge of launching a product. For investors, moreover, the returns available from these schemes looks very attractive: annual yields of 10 per cent or more in some cases look phenomenal when set against the backdrop of bank and building society accounts typically paying less than 0.5 per cent a year, even if there is a risk of losses on IFISAs if borrowers default.
Augmentum Capital to seek public listing to back fintech start-ups (Financial Times), Rated: B
Augmentum Capital, the venture group backed by Lord Rothschild, is planning to list a financial technology investment fund in what would be one of the sector’s biggest initial public offerings in a decade.
It is understood to be applying for admission to London’s main market in March and will seek to raise up to £125m with the sale of new shares.
China’s financial risk worse than in US before financial crisis, says former finance minister (Today Online), Rated: AAA
The level of risk facing China’s financial system could be higher than was seen in the United States before the global crash, according to a former Chinese finance minister.
“China’s ratio of M2 [a broad measure of money supply] to gross domestic product has surpassed 200 per cent, which is more than twice that of the United States, yet the average Shanghai interbank offered rate is 4.09 per cent, far higher than the 1.1 per cent in the US.”
According to official figures, the M2 money supply at the end of December was 167.68 trillion yuan (S$34.75 trillion), or 203 per cent of China’s nominal GDP in 2017.
Chinese P2P lending platform Senmiao Technology sets terms for $ 14 million US IPO (NASDAQ), Rated: A
Senmiao Technology, an early-stage Chinese marketplace for peer-to-peer lending, announced terms for its IPO on Tuesday.
The Chengdu, China-based company plans to raise $14 million by offering 3.3 million shares at a price range of $4.00 to $4.50. At the midpoint of the proposed range, Senmiao Technology would command a market value of $109 million.
Klarna signs Maplin for online pay-later (Finextra), Rated: AAA
Today, leading payments provider Klarna has announced a partnership with Maplin – the UK’s number one specialist technology retailer. Maplin customers will now be able to use Klarna’s Pay later and Slice It services, allowing them to order online and receive the very latest Smart Home tech, security/CCTV products, top quality drones and so on, and then pay for them either at a later date or spread the cost over time.
Pay later enables online and mobile Maplin customers making purchases of £200 or less to receive their products and pay for them 30 days later, with no interest or fees.
BNI Europa to fund German SME loans via Funding Circle (Finextra), Rated: AAA
The Portuguese online bank Banco BNI Europa and Funding Circle have entered into a strategic partnership to support the growth of small and medium-sized businesses in Germany.
Banco Popular reboots Eloan for new era in online lending (American Banker), Rated: AAA
Banco Popular is relaunching E-loan (it dropped the hyphen from the name) to serve as its “fintech arm,” a stand-alone brand offering solely digital products.
Launched in 1997, Eloan re-enters a market where fintechs now account for over 30% of personal loan originations, according to TransUnion. The brand will compete for clients alongside well-financed upstarts like LendingClub as well as new offerings from banks such as Marcus from Goldman Sachs.
Spendesk Raises €8 Million to Expand Its Platform for All Company Purchases (Payments Journal), Rated: A
Spendesk, a fintech solution that helps businesses manage their spending, has raised an €8 million Series A round led by Index Ventures, with participation from existing investors. The funds will be used to accelerate product development and expand across Europe.
ABN Amro, ING and Rabobank hit by cyberattacks (Fintech Futures), Rated: B
During the attack, internet banking, mobile banking, its website and Ideal were unavailable or extremely slow on 27 January from around 8pm to 12.15am CET and on 28 January from 12pm to 2pm CET and after 7pm CET.
CHECQIT, the P2P Lending Platform Aiming to Empower the Unbanked (The Merkle), Rated: A
According to the World Bank’s Global Findex report, nearly 2 billion adults and 160 million small businesses from all over the world do not have bank accounts. Efforts to approach them to traditional financial institutions have not been enough, limiting their economic growth potential.
Only 14% of adults living in the Middle East hold a bank account, opposed to the 94% of citizens from first world western countries that do. Developing regions with underserved communities such as India and sub-Saharan Africa comprise, when combined, nearly 32% of the world’s unbanked and underbanked population.
As a response to this issue, Nassim Benzekri and his team developed CHECQIT, an Ethereum-based, decentralized, peer-to-peer lending platform that allows users to grow their collaterals against a fast-guaranteed loan.
Finastra acquires Olfa Soft SA (Realwire), Rated: B
Finastra has acquired Olfa Soft SA and its cutting edge FX e-trading platform for banks and financial institutions. The move enables Finastra to deliver a unique end-to-end real-time eFX trading solution for banks’ treasury departments, covering distribution, position-keeping, post-trade and payments.
Western Union Opens Tech Center In India (Bank Innovation), Rated: AAA
Cross-border payments company Western Union is opening a technology center in India, which will focus on biometrics, machine learning, and robotics, the company announced yesterday.
The center, located in Pune, Maharashtra, will have over 1,000 employees all focused on building these “innovative digital and retail customer experiences globally,” the company said in a press release.
Rubique announces strategic partnership with Optacredit (Outlook), Rated: AAA
Rubique, a marketplace lending platform for individuals and SMBs, entered into a strategic partnership with OptaCredit, an Artificial Intelligence-powered, data-driven online lending platform focused on providing unsecured credit to salaried professionals across India.
With its Online PLUS technology led model and proprietary matchmaking algorithm, Rubique will enlist the company on its online marketplace for applicants to avail viable loan products from OptaCredit’s offerings.
P2P Lending Set to Explode in 2018 (PR Newswire), Rated: AAA
RBI’s much awaited official guidelines for Peer to Peer (P2P) lending platforms to bring them into the ambit of non-banking financial companies (NBFCs) is set to boost online lending. It is fast emerging as an investment option for retail lenders. The NBFC-P2Ps will act as an intermediary to provide an online platform to lenders and borrowers to transact on mutually agreeable terms. RBI has defined P2P lending as a form of crowdfunding that entails issuing unsecured loans to borrowers via an online portal in its 2016, ‘Consultation Paper on Peer to Peer Lending’. However, P2P lending is different from other crowdfunding activities in being a purely debt product, in which multiple lenders fund borrowers as personal loans or small business loans. Most of the P2P platforms in India such as IndiaMoneyMart curate their borrowers after conducting KYC checks, credit assessment, and due diligence before listing them on their loan exchanges.
On the positives, the regulation has made P2P lending platforms accountable to furnish credit repayment/non-repayment information to all 4 credit bureaus, thereby increasing transparency in the credit rating system. The credit rating agencies have records on about 150 million population but P2P lending platforms are also going to bring customers hitherto relying on private money lenders. This presents a huge opportunity to close the credit information gap. It will also reward sub-prime borrowers with a better credit score for showing improvement in loan repayment behaviour.
As many first time or retail borrowers take loans from money lenders or payday companies which charge interest as high as 5% to 20% per month, P2P platforms like IndiaMoneyMart are bridging the gap by making credit not only accessible but affordable. Bangalore-based IT consultant, Tanmay Thorat* (name changed) was paying over 300% interest to payday loan companies and approached IndiaMoneyMart for a small ticket size loan of INR 1 Lakh secured at rate of 13% annualized interest in March 2016required to settle his credit card debt and pay rent deposit.
The expectation from the Union Budget 2018 is immense in the BFSI segment, especially after RBI regulation. Experts hope that essential financial services will have GST rates revised from 18% to 5% or nil.
Budget 2018: how can we enhance the growth of startups in India? (YourStory), Rated: A
Most importantly, the fund of funds for startups (FFS) has begun to take shape with as much as Rs 1,100 crore being disbursed to SIDBI for allocation to venture funds. As of September 15, 2017, 17 venture funds have raised Rs 605 crore from SIDBI and as many as 72 startups have received about Rs 318 crore funds. The Department of Industrial Policy and Promotion (DIPP) has also recently announced that this number will be increased to Rs 2,400 crore by the end of the next fiscal.
For instance, the startup space has reportedly seen a decline of 53 percent in seed funding and 25 percent in venture funds in 2017.
Listed below are four suggestions for Budget 2018.
- Abolish angel tax
- Encourage Indians to fund India
- Extend tax holiday
- Standardise and simplify
10 things FM Arun Jaitley can do to boost access to capital via digital lenders (Financial Express), Rated: A
- Allow a lower MHP for servicing short-term needs of MSMEs
- Raise rate caps under MUDRA scheme: The RBI currently has capped the final rate that can be charged above the refinance rate offered by MUDRA at 3% for banks, 6% for NBFCs and 10%-12% for MFIs, depending on portfolio size. Since most of the new lenders incur high opex, this cap should be increased in the Budget 2018 to 10-12% in line with MFIs, for loans up to Rs 5 lakhs, and 8-10% for loans from Rs 5-25 lakh value.
- Extend the SIDBI net
- Make P2P platforms more attractive: A cap of 5% of net worth for lenders and a maximum individual loan amount of Rs 25 lakh for the borrowers would make these platforms attractive for both lender and borrower.
- Expand access to MSMEs
- Introduce PSU Banks turndown program
- Raise eKYC-based lending limit: The cap for lending through OTP based eKYC should be increased from Rs 60,000 to Rs 5 lakh.
- Promote eSign
- Mandate eMandate
- Increase the flow of data for lending
Lancers raises $ 9.2m venture round (Deal Street Asia), Rated: AAA
Tokyo-based Lancers, which operates a crowdsourcing platform under the same name, has closed a JPY 1 billion ($9.2 million) round from Tokyo-listed enterprises Persol Holdings and Shinsei Bank.
The investment sees Lancers concluding business partnership contracts with both companies concurrently and will also see it commence its new financing business targeting freelance workers, which the company claims comprise 17 per cent, or 11.22 million workers of Japan’s entire working population.
The addition of Shinsei Bank as an investor will see Lancers, Persol and Shinsei collaborate to develop and provide a new loan service to individual workers who need equipment investment or education/training upon starting a new business.
Crowd Realty closes $ 5.2m Series A (Deal Street Asia), Rated: A
Tokyo-based property crowdfunding portal Crowd Realty has closed its Series A round at JPY 580 million ($5.2 million) from Tokyo-listed Mitsubishi Estate, Shinsei Corporate Investment, Shinsei Bank, and Mizuho Capital, based on an account from The Bridge.
The Series A round saw two tranches: a follow-on investment of JPY 230 million subsequent to a JPY 350 million investment from Mitsubishi Tokyo UFJ Bank, Mitsubishi UFJ Capital, and Kabu.com Securities.
SSC warns against investing in cryptocurrencies (Viet Nam News), Rated: B
In a notice issued on its website on Monday, SSC said that the market now had companies operating in fintech, including cryptocurrency, initial coin offering, crowdfunding, peer-to-peer lending and blockchain. These were new products that had not been regulated, SSC said, thus posing high risks.