- Today’s main news: Yirendai reports Q1 results. Desai steps down from Funding Circle P2P fund. Yirendai reports Q1 results. Klarna is changing its name. Uncertainty looms over SoFi’s bank charter.
- Today’s main analysis: Quarterly marketplace lending results.
- Today’s thought-provoking articles: What’s in Ron Suber’s portfolio. China Rapid Finance quiet period coming to an end. Online lenders dominate Mozo awards. Over 90% P2P lenders earn 18%-26% gross returns.
- KBRA assigns prelim ratings to Oportun Funding VI, LLC, Series 2017-A. GP:”The flurry of bond sales continues.”
- What’s in Ron Suber’s portfolio. GP:”Most angel investors lose money and they do it for the fun. A few have made it a carreer. I have always been very curious what Ron Suber invested in. Finally we get some very interesting insights. The real question is: why he said yes to these and no to probably 100x more companies.”AT: “Payments, online lending, and financial inclusion. None of this is surprising. I’d expect the leader of a disruptive finance industry to back financial inclusion. It’s not just decent humanity, it’s good business sense, especially if you believe in the technology doing the disrupting.”
- Quarterly MPL results. GP:”The take away: An average ROI of 7.73%. A great number to remember.”AT: “Interesting portfolio mix, but it doesn’t seem very diversified.”
- Uncertainty looms over SoFi’s plan to obtain bank charter. GP:”Of course uncertainty rules in any interaction with a regulator, judge, client. The take away from this article: the chart showing the number of industrial banks over time. “AT: “Obey this rule: Don’t believe it until you see it.”
- U.S. startups fail to attract crowd of small investors. AT: “This is a misleading headline. There are any number of reasons why non-accredited investors may not be flocking to crowdfunding opportunities, one of which is they may not know about them. Most opportunities are still open only to accredited investors. The investment for the platforms to get in front of these investors is huge, and the potential ROI on the short term is thin, so long-term business sense is undoubtedly driving the current focus on accredited investors until cash flows reach a point to do otherwise. In time, the cost of meeting regulatory demands and marketing will decrease allowing platforms to built a real business model around the non-accredited investors. Plus, small investors themselves tend to be more cautious with their money simply because a loss can be much more devastating than an equal loss to a larger investor. The market will come around–in time.”
- Goldman, Cohen bet on Nav. GP:”A few companies are always attracting a lot of attention from the public: Apple, Goldman, Google, Facebook due to their reputation of smart strategic visionaries who have made surprising bets in the past that paid off incredibly well. Is Nav such a bet?”
- Thousands flock to Build credit card for credit repair. GP:”Beyond the sensational title: a few startups , and now banks, are selling the “improvide your FICO” by using our product. Some of them in fact even allow you to lend money to yourself in order to achieve this via a complex locked account structure. “
- How fintech’s are beating credit unions. AT: “Credit unions typically are not innovators. They too will come around, eventually. It will take time.”
- Podcast: Raul Vazquez of Oportun.
- Why Wells Fargo is engaging fintech partnerships right now.
- Lender expansion.
- The top 10 players in Bay Area fintech. GP:”The interesting story here given the share of the finance industry in the world and local economy: Why isn’t New York the hot bed of Fintech? A possible answer: because people experience in finance always see all the reasons why an idea won’t work and don’t even want to try. Young inexperienced people don’t know better and try, and sometimes they find a pocket of opportunity.”AT: “San Francisco is a hotbed for fintech companies.”
- Fintech marketer on why you should simplify your message. AT: “Simplifying your marketing message is important, but clarifying your messaging is just as important. How you say what you say is as important as saying it.”
- Funding Circle’s Desai steps down from P2P fund.
- WiseAlpha exceeds 627K GBP during second Crowdfund raise.
- RateSetter appoints Joanna Wright as new CRO.
- HSBC voice recognition system duped by customer’s twin brother.
- Lenders look to alternative asset classes and areas.
- Fears grow over P2P trusts.
- Is there still an advice gap?
- Five things to know about P2P lending.
- Yirendai releases Q1 2017 results. GP:”Take away: Loan volume grew 100%, revenu 83%, EBITDA 93%. Net Income: 166%. Impressive numbers.”
- China Rapid Finance ends quiet period today.
- Zhongan Financial Holding raises 220M yuan, Alipay to launch facial ID payment.
- Klarna is changing its name to include ‘Bank’. AT: “This is very interesting. If Klarna can entice consumers to open up digital bank accounts and fund their retail purchases through those accounts, the company should be able to corner the market on e-commerce payments. This would be a huge boon.”
- Should real estate investors go global? GP:”A very interesting discussion as real estate is fundamentally local and it is all about location.”
- Online lenders dominate Mozo awards.
- InvestmentLink launches goals-based advice platform.
- Wellington ranks #2 worldwide for sharing economy.
- Over 90% P2P lenders earn 18%-26% gross returns per annum.
- Interview with head of analytics and data science at Kabbage India.
- Fintech will slaughter banks.
- United States
- KBRA Assigns Preliminary Ratings to Oportun Funding VI, LLC, Series 2017-A (BusinessWire), Rated: AAA
- Here’s what’s in Ron Suber’s portfolio (Biz Journals), Rated: AAA
- My Quarterly Marketplace Lending Results – Q1 2017 (Lend Academy), Rated: AAA
- Uncertainty looms over SoFi’s plan to obtain bank charter (SNL), Rated: AAA
- U.S. Startups Fail to Attract Crowd of Small Investors (Bloomberg), Rated: A
- Goldman, Cohen Bet on Nav (deBanked), Rated: AAA
- Thousands are flocking to a credit card that helps repair their bad FICO scores and avoid payday loans (Business Insider), Rated: A
- How fintech is beating credit unions at their own game (Credit Union Journal), Rated: A
- Podcast 101: Raul Vazquez of Oportun (Lend Academy), Rated: A
- Why Wells Fargo is stepping up fintech partnerships now (American Banker), Rated: A
- Lender Expansion; FHA, VA; Households Moving Toward Buying (Mortgage News Daily), Rated: A
- The top 10 players in fintech in the Bay Area (Biz Journals), Rated: A
- Fintech Marketer Tom Roberts On Why Simplifying Your Company’s Message Is Key (Hypepotamus), Rated: A
- United Kingdom
- Funding Circle boss steps down from P2P fund (Citywire), Rated: AAA
- UK Online Lender WiseAlpha Exceeds £627K During Second Crowdcube Run (Crowdfund Insider), Rated: AAA
- UK P2P Lender RateSetter Announces Joanna Wright as New CRO (Crowdfund Insider), Rated: AAA
- HSBC voice recognition security system duped by customer’s twin brother (IB Times), Rated: A
- Lenders look to alternative asset classes and areas (Bridging&Commercial), Rated: A
- Fears grow over P2P trusts (FT Adviser), Rated: A
- Is There Still an Advice Gap? (Morningstar), Rated: A
- Tinder for businesses: Five things you need to know about Peer-to-Peer lending (Independent.ie), Rated: B
- Yirendai Reports First Quarter 2017 Financial Results (PR Newswire), Rated: AAA
- A Quick Buy For China Rapid Finance At Upcoming Quiet Period Expiration (Seeking Alpha), Rated: AAA
- P2P Industry News (Xing Ping She Email), Rated: A
- European Union
- Klarna is changing its name — revealing a bold challenge to incumbent banks (Business Insider), Rated: AAA
- Should Real Estate Investors Go Global? (ETF Daily News), Rated: B
- Australia/New Zealand
- Online lenders dominate 2017 Mozo Experts Choice Home Loan Awards (Mozo), Rated: AAA
- InvestmentLink launches goals-based advice platform (Financial Standard), Rated: A
- Wellington ranks #2 in the world for sharing economy (IT Brief), Rated: A
- Over 90% lenders in P2P lending earn gross returns of 18-26% per annum (India Times), Rated: AAA
- Meet the Analytics & Data Science Head at Kabbage, one of the hottest fintech companies (Analytics India Mag), Rated: A
- At this rate, Fintech will slaughter India’s banks (India Times), Rated: A
- SoftBank’s massive Vision Fund raises $ 93 billion in its first close (TechCrunch), Rated: AAA
KBRA Assigns Preliminary Ratings to Oportun Funding VI, LLC, Series 2017-A (BusinessWire), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of Oportun Funding VI, LLC, Series 2017-A (“Oportun 2017-A”), a consumer loan asset-backed securities transaction.
The collateral in the Oportun 2017-A deal includes approximately $188.24 million of loans, as of the April 12, 2017 statistical calculation date. The transaction includes a three year revolving period during which additional collateral may be funded in the transaction so long as it complies with certain eligibility criteria. The preliminary ratings reflect the initial credit enhancement levels ranging from 30.0% for the Class A notes and 15.0% for the Class B notes.
Preliminary Ratings Assigned: Oportun Funding VI, LLC, Series 2017-A
|Class||Preliminary Rating||Expected Initial Class Principal|
Here’s what’s in Ron Suber’s portfolio (Biz Journals), Rated: AAA
Digital signature company DocuSign and online lender SoFi, which have been valued at $3 billion and $4.3 billion respectively. His involvement with Prosper itself started out as an investment in the company back in 2013.Digital signature company DocuSign and online lender SoFi, which have been valued at $3 billion and $4.3 billion respectively.
He added that he focuses on five themes in his personal fintech investing: digital transactions, the payment rails of fintech, online lending, unlocking cash for assets and financial inclusion.
My Quarterly Marketplace Lending Results – Q1 2017 (Lend Academy), Rated: AAA
Overall Marketplace Lending Return at 7.73%
I complained last quarter that the annualized return, based just on the latest quarterly numbers, on my main Lending Club account had dropped to 2.1% in Q4. Well, this quarter it dipped further. The balance on this account on December 31, 2016 was $39,733, the balance on March 31, 2017 was $39,472 for a -2.6% annualized return according to Lending Club’s own statements.
When I look at where the recent defaults have been coming from the majority are in the D and E grade 36-month loans issued in 2015.
My TTM return according to my own calculations is 2.56% and Lending Club says my return is 8.32%.
Last month marked four years since I invested in the Direct Lending Investments fund. It has been my best performing investment by far over this time period. While yields have come down slightly from the initial 13-15% to 10-12% today I am still very happy with this investment. As the fund has grown, today it is closing in on $1 billion, it has changed focus from investing in high yield short-term small business loans to providing funding lines for a variety of consumer, small business and real estate lenders.
Peerstreet focuses on short term loans – typically 6-24 months with yield to investors in the mid to high single digits. I like the $1,000 minimum per investment at Peerstreet which has enabled me to feel comfortable starting with a relatively small investment. I have already almost cycled through my initial investment as 11 of my first 12 properties have already paid off in full.
Uncertainty looms over SoFi’s plan to obtain bank charter (SNL), Rated: AAA
Social Finance Inc. executives say the company is ready to be regulated more like a bank, but it is unclear how feasible it will be for SoFi to obtain the industrial bank charter it wants.
In his comments to TechCrunch, Cagney said that the goal of the charter is not to use deposits to fund loans.
SoFi has yet to submit an application for an industrial bank charter in Utah, according to Utah Department of Financial Institutions supervisor of industrial banks Shaun Berrett. As of May 19, the online lender had 28 job openings in its Cottonwood Heights location.
U.S. Startups Fail to Attract Crowd of Small Investors (Bloomberg), Rated: A
Investors sprinkled about $38 million across 142 companies since May 2016 when Title III of the JOBS Act allowed equity crowdfunding for non-accredited investors, according to data from industry tracker NextGen Crowdfunding LLC.
Swat said the practice is still in its infancy. Wefunder, StartEngine and SeedInvest are the primary crowdfunding platforms, and many founders aren’t aware that equity fundraising is an option. Of those who explore it, many decide it’s not worth the hassle and expense.
NextGen data show companies typically spend from $20,000 to $50,000 on legal, accounting and marketing — a serious outlay for a startup that’s only looking to raise a couple hundred thousand dollars.
Technology startups, quite understandably, have largely ignored the new fundraising option because they benefit more from the existing system.
Goldman, Cohen Bet on Nav (deBanked), Rated: AAA
Nav recently lifted the size of a Series B round by $13 million for lead investor Goldman Sachs Principal Strategic Investments as well as Cohen’s Point72 Ventures and others, bringing the tally for this round to $38 million.
King points out that bringing the startup’s vision to reality is a gamble. For instance, Nav’s current customer count is 215,000 and they aspire to have 28 million.
Also part of the vision is international expansion.
Thousands are flocking to a credit card that helps repair their bad FICO scores and avoid payday loans (Business Insider), Rated: A
Marla Blow thinks she can help. A card industry veteran who spent nearly a decade at Capital One and helped run the credit card and payments division at the Consumer Financial Protection Bureau, Blow recently helped launch a startup called FS Card, whose sole product at the moment is a credit card targeted toward those with tarnished credit histories.
The card, which is called “Build” and has MasterCard branding, enables customers to avoid the local payday lender’s sky-high rates and gradually mend their standing in the eyes of the almighty FICO.
FS Card’s strategy is to target “deep subprime customers” in the 550 to 600 credit score range, a group that’s largely been overlooked and forgotten by the big banks, according to Blow, the company’s CEO. By offering transparent rates and fees and low spending limits to start, Blow thinks she can carve out a profitable business that also helps people repair their financial bedrock.
There’s some evidence from the Federal Reserve Bank of New York that lending is returning for subprime borrowers with credit scores below 660.
The payday loan industry — wherein people take out a two-week loan for several hundred dollars that comes with a fee that amounts to a 400% interest rate on average — now serves 19 million households out of some 20,600 locations across the country, according to industry group the Community Financial Services Association of America.
The Build card, on the other hand, is unsecured and requires no deposit, providing a more flexible line of credit from the get-go.
The Build card comes with a $75 annual fee and a starting credit limit of about $500 — not incidentally, the same as the maximum payday loan amount in many states — which grows as the borrower proves responsible over time. The interest rate percentage starts in the upper 20s, on the high end for most credit cards. All the terms are laid out plainly to avoid any surprises.
In a year and a half on the market, the Build card has extended $25 million in credit to nearly 50,000 customers, according to Blow.
How fintech is beating credit unions at their own game (Credit Union Journal), Rated: A
One of the leaders in that effort is Acorns, an app that connects to a user’s credit or debit cards and rounds up purchases to the next dollar, holding the accumulated difference in escrow and investing it with a risk portfolio determined by the user. The service costs just $1 per month for balances of less than $5,000 and users can withdraw their funds at any time.
The bigger issue, said Habib, is that CUs are once again being cut out of the relationship with their members’ money. Saving a nickel here and a dime there may not seem like a significant threat, but if Acorns or similar fintechs eventually enter the lending space then credit unions could really begin to feel the pinch.
While most CUs don’t have a round-up offering, one credit union that has embraced the idea is Tampa’s GTE Financial, which in 2015 launched Future Change, an app that allows members to round up purchases and set aside money to pay off their loans at the credit union more quickly.
In the two years since GTE began offering Future Change, $1.3 million per year has been moved to roundup savings accounts, with members making more than 3,500 principal payments on their loans. The app has been downloaded more than 15,000 times and Burney said members log in about 14,000 times per month.
Podcast 101: Raul Vazquez of Oportun (Lend Academy), Rated: A
The CFPB estimates there are 45 million adults in the US today who have little or no credit history.
In this podcast you will learn:
- What Raul did before he came to Oportun.
- The three criteria Raul needed to consider when moving from Walmart to Oportun.
- The core market of borrowers served by Oportun.
- The percentage of Oportun borrowers who do not have a credit score.
- The total loan volume they have done to date.
- The typical loan terms they offer.
- Why they base their interest rates on the size of the loan.
- The marketing channels they use to find their customers.
- Why they use physical locations in most of the states where they operate.
- How they are able to do 100% automated underwriting.
- What being a CDFI means and why it is important for Oportun.
- The three ways Oportun gets the funding they need.
- The work that Raul does with the CFPB Consumer Advisory Board.
- How long Oportun has been profitable.
- What they are working on for the future.
Why Wells Fargo is stepping up fintech partnerships now (American Banker), Rated: A
Wells Fargo is putting more focus and effort into its partnerships with tech companies — from giants like Apple, Samsung and PayPal to the smallest startups.
Lender Expansion; FHA, VA; Households Moving Toward Buying (Mortgage News Daily), Rated: A
Some originators will say that the FHA program is the “new” subprime channel – certainly the program appeals to lenders who like the profit margins, and it appeals to borrowers new to home ownership and who may not have the necessary down payment for other programs. Good LOs have a sense of demographics & population trends, and as it turns out, for the first time in a decade, more new U.S. households in the first quarter chose to buy homes than to rent, suggesting a long-term decline in home-ownership rates might be coming to an end.
Speaking of SoFi and other lenders that use computers (is there a definitive definition of “fintech?”), the WSJ discusses how investors are returning to bonds backed by online lending securitizations.
The top 10 players in fintech in the Bay Area (Biz Journals), Rated: A
Fintech Marketer Tom Roberts On Why Simplifying Your Company’s Message Is Key (Hypepotamus), Rated: A
Regardless of how complex your product may seem, your company’s marketing message should be simple and straight-forward. A complicated, dense message could alienate customers unfamiliar with the technology and reduce your leads. Crafting a narrative around your company’s solution should translate to all sides of your target market — potential customers, investors and users.
You’ve worked on simplifying the PrimeRevenue brand and presenting the company in a more digestible way. How did you approach this?
But every marketing person should be so lucky to find a great story that is not being effectively told. That’s exactly what I discovered with PrimeRevenue. We work with some of the world’s largest brands to help them optimize their working capital, and we support their suppliers by giving them more visibility and control over what their customers owe them. I crafted the narrative around the immense ROI we deliver into a simple core messaging for both buyers and suppliers.
How did you approach the company when talking about the new brand message?
I’ve done a lot of work to simplify complicated messages for B2B audiences in the past. I find the key is putting together a logical story about what you are trying to achieve and how it will accelerate sales. Then you’ve got to be a great collaborative, internal seller of both your approach and your progress. I say collaborative since one mistake marketers seem to make is huddling with their team and then popping new “stuff” on an executive team. Unless you’re lucky, that can backfire.
Why was simplifying the brand so important for the marketing strategy?
A simplified brand message was key for us putting in place a sophisticated, multi-channel digital lead and demand generation program. Frankly, the company didn’t have much in the way of lead gen other than some field marketing at very small niche conferences.
Funding Circle boss steps down from P2P fund (Citywire), Rated: AAA
Samir Desai, the founder and chief executive of Funding Circle, the peer-to-peer (P2P) lender to small businesses, has stepped down from the platform’s investment company.
FCIF is listed on the London Stock Exchange and invests in loans originated by Funding Circle. It is unusual in not levying a management fee, with the fund’s shareholders only paying the platform’s 1% annual charge. Last month it nearly doubled in size by raising £142 million from investors in a C-share issue.
Stepping back from FCIF allows Desai to concentrate on Funding Circle, whose backers include Baillie Gifford, manager of Scottish Mortgage Trust (SMT), which holds an investment in the private company in its unquoted portfolio. Funding Circle has lent over £2.2 billion in the UK having and attracted 61,000 private investors who the company estimates have made an average return f 7.2% lending through the platform.
UK Online Lender WiseAlpha Exceeds £627K During Second Crowdcube Run (Crowdfund Insider), Rated: AAA
WiseAlpha, a UK online lending platform that gives everyday investors access to high yield institutional bond and loan investments, has raised over £627,000 on its Crowdcube return in just 7 days, coming in at 125% over its original target. More than 433 investors have invested in return for 8.92% equity. The highest amount by a single investor was £150,000 for the platform pre-valued at £6,402,630.
UK P2P Lender RateSetter Announces Joanna Wright as New CRO (Crowdfund Insider), Rated: AAA
Peer-to-peer lending platform RateSetter has appointed Joanna Wright as Chief Risk Officer. Wright joins RateSetter from GE Capital where she was Chief Risk Officer for GE Capital Bank in the UK, leading a team of over 200 risk professionals with responsibility for prudential and enterprise risks across the bank.
HSBC voice recognition security system duped by customer’s twin brother (IB Times), Rated: A
HSBC’s much-touted voice recognition software, used by half a million customers to verify their identity and secure their bank accounts, has successfully been duped by the brother of one of its customers. In an investigation carried out by BBC Click reporter Dan Simmons and his non-identical twin, Joe, the brothers revealed that it was possible to breach an HSBC customer’s account by mimicking their voice.
After Dan Simmons set up his own HSBC voice-ID authenticated account, his twin Joe attempted to access the account by providing his account details, date of birth and saying the simple phrase. After seven repeated attempts to mimic his brother’s voice print, the bank granted him access on his eighth try.
Although Joe was not able to withdraw any money from the account, he was able to access balances, recent transactions and even transfer money between accounts, the BBC reports.
Lenders look to alternative asset classes and areas (Bridging&Commercial), Rated: A
Last week saw a mix of property developers and finance providers come together to discuss the state of the property market.
In the afternoon, the focus shifted towards the future of the property market with a look at new types of finance, such as crowdfunding, challenger banks and peer-to-peer lending.
Even though he admitted that banks and challenger banks still dominated the space, Ashley pointed out that the alternative finance sector was continuing to grow.
As a result of new lenders entering into the development finance space, Ashley added that some lenders have been looking to move away from ‘safer’ geographical areas, such as the South East, and are targeting places further north, including Scotland.
Fears grow over P2P trusts (FT Adviser), Rated: A
Recent months have seen problems return to the fore in the £2bn trust sub-sector, which has attracted investor interest in part because of yields well in excess of 5 per cent.
Winterflood also criticised certain P2P investment trusts over disclosure levels in its latest monthly report. Analyst Simon Elliott said Ranger Direct’s partial writedown of a 20 per cent exposure to the struggling Princeton Alternative Income fund was a “disheartening episode”. Princeton had previously said its NAV would not be affected by problems at firms in which it had invested.
Of the six funds in Winterflood’s P2P trust sector, three are trading on double-digit discounts, although one – Honeycomb – trades on a premium of 12.2 per cent.
Is There Still an Advice Gap? (Morningstar), Rated: A
Four years ago, sweeping reforms were introduced to the financial advice market, aiming to improve free transparency and professionalism.
However, one of the biggest unintended consequences has been what many describe as an ‘advice gap’. This has been caused by high street banks, investment management firms and financial advisers withdrawing services for those with less than £100,000 to invest. They argue the cost of servicing these clients has become too high.
A number of advisers also used the RDR as an opportunity to leave the industry, leaving many ‘orphaned’ clients behind.
Stephen Kavanagh, chief executive of financial advice firm Chase de Vere, believes the advice gap was not caused by the RDR, but rather the regulation exacerbated existing inefficiencies in the market.
According to AXA Wealth, there is only one adviser for every 2,700 people in the UK who require help with their finances. This compares to ratios of one adviser per 1,400 people in Australia and one per 156 savers in Hong Kong.
The good news is that the advice gap is on the agenda for the Financial Conduct Authority, the regulator, alongside the Treasury. The two organisations have launched the Financial Advice Market Review, which is ongoing and aims to ensure that affordable advice and guidance is available to everyone.
Since the RDR was introduced, robo-advisers have sought to address the issue, with new entrants and established firms offering online services for those with smaller sums to invest. Some deliver investment management online, while others provide automated financial advice. They are typically powered by computer models, known as algorithms, and involve little or no human interaction.
Although Kavanagh recognises that technology has the potential to plug the advice gap by offering lower-cost services to a wider range of people, he believes the robo-advice market still has much further to go before it reaches this point.
Tinder for businesses: Five things you need to know about Peer-to-Peer lending (Independent.ie), Rated: B
One – It was invented in Ireland!
Two – As the whole process is run online, overheads are lower and lending can therefore be provided more cheaply than in more traditional financial institutions.
Three – According to Linked Finance, lenders can earn between 8.5pc and 15pc interest on the loans that they issue, however any income earned on the lending will be subject to income tax.
Four – P2P is currently not regulated in Ireland, as a result of this certain protections do not apply to consumers of P2P products.
Five – Figures for the first three months of 2017, show that the Irish P2P platform increased lending activity by more than 326pc on the same period in 2016, according to Linked Finance, and the platform has now facilitated more than €25m in loans to Irish SMEs.
Yirendai Reports First Quarter 2017 Financial Results (PR Newswire), Rated: AAA
Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading online consumer finance marketplace in China, today announced its unaudited financial results for the quarter ended March 31, 2017.
Starting from the second quarter of 2016, the Company changed its reporting currency from the U.S. dollar (“US$”) to the Renminbi (“RMB”), to reduce the impact of increased volatility of the RMB to US$ exchange rate on the Company’s reported operating results. The aligning of the reporting currency with the underlying operations will better depict the Company’s results of operations for each period. This release contains translations of certain RMB amounts into US$ for convenience. Prior period numbers have been recast into the new reporting currency.
For Three Months Ended
in RMB million
Amount of Loans Facilitated
Total Net Revenue
Total Fees Billed (non-GAAP)
Adjusted EBITDA (non-GAAP)
A Quick Buy For China Rapid Finance At Upcoming Quiet Period Expiration (Seeking Alpha), Rated: AAA
The 25-day quiet period on China Rapid Finance Ltd (NYSE: XRF) will end on May 23, allowing the firm’s IPO underwriters to publish reports and recommendations after this time.
China Rapid Finance acquires consumers through multiple channels, such as online travel agencies, social networks, e-commerce platforms, and payment service providers. Its business model offers smaller, shorter-term loans through its platform. The proprietary technology then analyzes the data and identifies borrowers who may qualify for larger, longer-term loans. In 2016, 89% of its total loan volume originated through this platform, and the borrowers were prime and near-prime consumers with creditworthiness closely comparable to FICO scores ranging from 660 to 720.
XRF’s principal loan amounts range from RMB500 (US$72) to RMB6,000 (US$865). Longer-term loans range from three months to three years, with principal amounts from RMB6,000 (US$865) to RMB100,000 (US$14,400).
The total number of loans has grown from 63,251 in 2014 to 6.0 million in 2016. The number of borrowers has increased from 101,384 in 2014 to 1.4 million in 2016. However, net losses reached US$131,000, US$(30.0) million and US$(33.4) million in 2014, 2015 and 2016, respectively.
The average annual investment return for investors in lifestyle loans was 11.9% in 2014, 11.5% in 2015, and 11.3% in 2016.
P2P Industry News (Xing Ping She Email), Rated: A
Zhongan Financial Holding Raised ￥220M in A Round
Zhongan Financial Holding (ZFH), an auto consumer financial services provider, announced that it has raised 220 million RMB in A round of financing at the end of 2016. This capital was led by Haitong Capital, followed by Huaxin Capital, YinDuhui, Promising Capital and the listed company Sunyard.
Founded in 2014, ZFH is focused in personal car consumer financial services across the country. It provides lifecycle service of car transactions for consumers and dealers, including marketing, customer acquiring, car sourcing, trading and financing.
In addition, ZFH cooperated with banks to use the way of interbank (credit card stage) for the car consumer finance business. In this way, the cooperative bank originates credit card loans to customers, and customers mortgage the vehicle to the bank, then after the loans are issued, customers will pay the monthly payment.
Alipay to launch ““Face Identifying Payment”
Alipay has recently tested for “Face Identifying Payment” inside. In this new way of paying, the process of face identifying takes only one second, if succeed, the customer should further input the last four digits of his phone number. After the two-step verification, the payment can be completed.
Shortly after that, Alipay confirmed the news, and announced they have finished the last step of bringing “Face Identifying Payment” from laboratory to commercial use, it will soon be available on the stores of partners.
Klarna is changing its name — revealing a bold challenge to incumbent banks (Business Insider), Rated: AAA
Swedish e-commerce company Klarna wants to change its name to Klarna Bank, reveals application documents received by the Swedish Companies Registration Office.
This implies that Klarna could soon be receiving its Swedish banking license, which it applied for in October 2015.
Should Real Estate Investors Go Global? (ETF Daily News), Rated: B
The FlexShares Global Quality Real Estate Index Fund (NYSE:GQRE) was trading at $59.44 per share on Monday afternoon, up $0.15 (+0.25%). Year-to-date, GQRE has gained 5.45%, versus a 7.10% rise in the benchmark S&P 500 index during the same period.
Online lenders dominate 2017 Mozo Experts Choice Home Loan Awards (Mozo), Rated: AAA
The awards compared 504 home loans from 89 providers, and awarded the top 10% in each of the 8 categories.
This year, Mozo found that online lenders took out more awards for great value mortgage products than in previous years, accounting for approximately 41% of the winners overall, up from just over 25% last year.
InvestmentLink launches goals-based advice platform (Financial Standard), Rated: A
Financial data feed provider InvestmentLink is launching a new cloud-based platform targeted at financial planners looking to provide outcomes-oriented advice to clients.
CashDeck uses InvestmentLink’s data repository to allow clients to manage all their financial information, while advisers can use the information to generate projections and insights around client goals.
Wellington ranks #2 in the world for sharing economy (IT Brief), Rated: A
Peer-to-peer motorhome rental platform SHAREaCAMPER recently released the 2017 Return on Investment Index. The study aims to identify which cities offer the highest return on asset investment via rental peer-to-peer (P2P) platforms.
The application Airbnb was used to collect data alongside a collection of other rental platforms.
Taking into account all five of the markets researched, Wellington is ranked in second place. Auckland placed in the fifth position in the ranking.
Over 90% lenders in P2P lending earn gross returns of 18-26% per annum (India Times), Rated: AAA
Promise of higher returns and faster adoption of digital disruption has pulled a large number of millennials towards P2P lending, according to a report by online P2P lending platform Faircent.com. In fact as per the report, nearly 60% of the lenders on the platform are less than 35 years old.
Meet the Analytics & Data Science Head at Kabbage, one of the hottest fintech companies (Analytics India Mag), Rated: A
This week we bring you a closer look at Kabbage, a Fintech company headquartered at Atlanta USA, through an interaction with Ratnakar Pandey. RP, as he is popularly known, heads the Analytics and Data Science portfolio at Kabbage India.
RP has more than 15 years of experience in analytics and data science fields. At Kabbage, RP is leading the machine and deep learning models development activity across customer lifecycle, from acquisition to customer engagement to fraud prevention to risk based underwriting policy development.
Analytics India Magazine- Could you tell us more about Kabbage and your data and analytics platform?
Most of the heavy lifting that happens in Kabbage is done by technology and data, which is one of the key differentiators. We like to call ourselves a data company rather than a typical finance company. So, data is the core competency of the company and we use that in our decision making every day.
AIM- Would you like to share some of the analytics solutions you have worked on?
We use several programming and data management tools for providing both tactical and strategic analytical solutions, some noteworthy tools are Python, R, SQL, Spark, Hadoop and Scala. In terms of statistical techniques for machine learning, we routinely use regression techniques (linear, logistics) and classifiers such as Gradient Boosting Machines (GBM), Elastic Net Regression, Support Vector Machine (SVM), Ensemble Learning etc. For forecasting and anomaly detection we use ARIMA/X, k-NN and other similar techniques. We also heavily use Natural Language Processing (NLP) for drawing insights from text and unstructured data.
AIM- What kind of knowledge and skill-sets do you look for, while recruiting your workforce?
For the positions that we are currently hiring, we are looking for 8+ years of work experience in data science, preferably in the banking and lending industry. We are keen on hiring people who can lead a project from start to finish and take the full accountability and ownership of it. We generally hire from the premiere institutes, 90% of people we have right now are from tier 1 institutes.
AIM- What are the most significant challenges you face being at the forefront in analytics space?
Lack of machine learning and deep learning talent is the biggest challenge in the Indian market.
AIM- How do you think ‘Analytics’ as an industry is evolving today? Could you tell us the most important contemporary trends that you see emerging in the present analytics space across the globe?
We are generating more data than ever before- 90% of the data that we have today is generated in last 2 years alone. This data is coming from a variety of different sources such as voice, text, transaction, sensor, chat, images, videos etc.
At this rate, Fintech will slaughter India’s banks (India Times), Rated: A
India’s banks, which still dominate the country’s financial landscape, appear to have hardly a kick left in them. Stressed assets without any loan-loss cover now exceed $96 billion, McKinsey & Co. said last week. An overwhelming 91 percent, or $87 billion, of the provisioning gap is at state-run lenders, whose net worth would be wiped out if they took the hit on their capital.
Even as McKinsey was delivering this sobering reality check, fintech was running a victory lap of sorts. Paytm, a digital payments company announced a $1.4 billion investment by Masayoshi Son’s SoftBank Group Corp. on Thursday, the largest funding round by a single investor in an Indian startup.
Capital First’s retail assets have grown 24-fold in six years to about $3 billion. Its bad-loan ratio of less than 1 percent compares with almost 10 percent for banks. And the latter figure is an official estimate; the reality is probably a lot worse.
SoftBank’s massive Vision Fund raises $ 93 billion in its first close (TechCrunch), Rated: AAA
SoftBank’s huge $100 billion investment fund — the largest tech fund in history — announced its first close today… and it’s huge.
The Japanese telecom giant revealed that its VisionFund has closed an initial commitment of $93 billion from a bevy of high profile backers. They include Apple, Qualcomm, UAE-based Mubadala Investment Company, Saudi Arabia’s PID public fund, Foxconn, and Foxconn-owned Sharp. The plan is for the fund to reach its $100 billion target within the next six months through commitments from other investors.
Recent deals include Indian fintech unicorn Paytm, virtual reality Improbable Worlds, China’s Uber killer Didi Chuxing, and global connectivity company OneWeb. Beyond that, there’s been a steady flow of unconfirmed investments linking the fund to companies like WeWork.