Introduction In 2008, when Satoshi Nakamoto first introduced Bitcoin to the world, nobody would have thought the “virtual currency” will become such a big phenomenon in less than a decade. From being a decentralized source of sending and receiving money to any part of the world, it has transformed into a lucrative investment avenue. It […]
In 2008, when Satoshi Nakamoto first introduced Bitcoin to the world, nobody would have thought the “virtual currency” will become such a big phenomenon in less than a decade. From being a decentralized source of sending and receiving money to any part of the world, it has transformed into a lucrative investment avenue. It was trading in the single digit range in 2012 and now recently touched $5,000 for one single bitcoin. Now, startups are issuing their own currencies/tokens via initial coin offerings (ICO) to raise funds.
ICO is an unregulated channel of crowdfunding that uses tokens/coins to raise capital for the issuer. In an ICO, investors buy the coins, which can appreciate in value depending upon how successful the business is. The first ICO was by Mastercoin in 2013. It raised approximately $600,000.
The rise of ICOs can be gauged from the fact that almost $1.3 billion has been raised via ICOs by startups this year.
ICO and Equity: Similar or Different?
There are two schools of thought when it comes to ICOs. Many cryptocurrency enthusiasts feel that ICO is similar to an IPO. It sells coins/tokens instead of shares to investors and has the ability to generate lucrative returns if the business takes off. Also, just like IPOs, ICOs are restricted by the number of tokens and the duration during which the company can sell these tokens.
Many lawyers and general investors feel it is a different breed from an IPO. The main difference being an IPO gives investors a right of ownership in the company when they buy the shares whereas, in the case of an ICO, the buyer gets the right to participate and profit from the business’s ecosystem. Tokens only appreciate in value if the project takes off, but tokens do provide other additional benefits. For example, the tokens issued by Storj — a decentralized storage solution — can be exchanged for storage space on the platform. Any ICO that gives the right of ownership to investors is technically offering securities and would thus need to register with the Securities and Exchange Commission (SEC).
When it comes to regulations, ICOs basically enjoy a free run as compared to the heavily regulated IPOs. IPOs require a ton of paperwork, millions of dollars in fees, and months of preparation to ensure they are compliant with all relevant laws. Any company can launch an ICO at any stage of its life, which means investors are open to risk with regards to the legitimacy of the company.
What does the SEC Have to Say About ICOs?
So far, the SEC has not taken any serious stance against cryptocurrencies, but the growing popularity of ICOs has prompted the commission to form regulatory guidelines. In July this year, the SEC issued the results of an investigation into the ICO of DAO – a decentralized venture fund. DAO raised $150 million worth of ether from 11,000 investors and then got hacked out of $50 million worth of virtual currency. More importantly, the DAO tokens were structured as a security.
On July 25th, 2017, the SEC declared that some ICOs will come under the same regulations that are applicable to other similar investments like stocks. The critical thing to note is the ruling did not include “all” type of ICO offerings but it did include those ICOs which are structured like a security. The SEC believes “ICO may provide fair and lawful investment opportunities,” however, they can also be “used improperly to entice investors with the promise of high returns in a new investment space.”
Market Size Comparison: Bonds, Equity, and Cryptocurrency
Fixed income solutions (bonds, treasury) using traditional currency is a fully developed and functional market and has been around for many decades. The size of the U.S. fixed market is almost $40 trillion, and the U.S. corporate bond market in 2016 stood at $8.5 trillion. The U.S. equity market stood at over $25 trillion in February 2017. In comparison, the cryptocurrency market, though growing rapidly, is still a fair bit behind other developed security markets. Cryptocurrency market capitalization as of June 2017 stood at $103.9 billion with Bitcoin being the major player.
Lack of fixed income solutions
The ICO world has always been focused on valuation gains. But the real maturity of this nascent market will be judged by its depth of fixed income solutions for investors. Though many HYIPs (high yield investment programs) like GlobalBid, CryptomineHolding, and Laser were floated in the cryptocurrency market, there are still doubts over their legality. They come across more like a Ponzi scheme versus a safe investment option. The best example could be Bitcoin-Trader HYIP, which disappeared overnight.
This is where the opportunity lies for an entrepreneur who is willing to take the risk and come up with an innovative yet safe fixed income solution that will help in tying both the worlds together (fixed income solutions and the cryptocurrency market). Investors will gladly accept a solution that provides stability and security of fixed income investment solution alongside the higher returns and blockchain benefits of the cryptocurrency market.
Lending Platforms in Fixed Income
The first real breakthrough has been the emergence of peer-to-peer lending platforms using bitcoins. The technology which has revolutionized consumer and small business finance is being utilized by startups in conjunction with cryptocurrencies to offer fixed income solutions to cryptocurrency investors. Though there are not many lending platforms that use cryptocurrency, the few notable ones are mentioned below:
Bitbond – Headquartered in Berlin, Bitbond is the first global marketplace lending platform for small business loans. Investors simply need to sign up with the platform and deposit bitcoins in their bitcoin wallet, then browse through the available investing opportunities. Once the project is fully funded, the investor starts to receive monthly repayments with interest until the loan matures. The repayments go straight to their bitcoin wallet. The investor can either reinvest or send the coins to a bitcoin exchange to trade it for fiat currency. Higher Returns – The average APR is 13%, which is pretty high as compared to returns offered by generic P2P lenders.
Nebeus – Nebeus is an online lending platform based out of the UK and was launched in 2015. It offers services in lending, trading, and remittances. Loans offered by Nebeus have a term of micro (30 days) to standard (360 days). The loan size is determined according to the borrower rating. Returns – Investors can expect a yield up to 12.5%.
Getline – Based out of Warsaw, Poland, Getline was established in 2015. It uses a third party platform Esteemify for account verification. Borrowers and investors need to add social accounts as well personal verification details such as bank account, proof of income, etc. Total amount funded so far is 178.86 BTC and the platform usually deals in credit line loans. Fees – 30% of any profit obtained by the lender.
BTCPOP – Headquartered in the United Kingdom, BTCPOP was founded in 2014. It is an online lending platform that also has an altcoin exchange and a share market, and it also supports IPOs, bond funding, and trading. It deals in various types of loans like custom personal loans, personal loans with collateral, instant loans, business loans, IPOs, bonds, and instant collateral loans.
Returns – Lenders can expect an APR of 10% or more.
Cryptocurrencies and ICOs are redefining the concept of money and fund raising. But for a jump to the mainstream, fixed income options need to be developed for the wider investor base. P2P lending using virtual currency is a good start, and it seems a major shake up with a fixed income offering is just round the corner.
News Comments Today’s main news: China Rapid Finance goes public at $350M valuation, down from C round valuation of $1bil. VPC Specialty Lending Investments annual results continues to disappoint Morty launches fully-automated mortgage marketplace. Barclay’s opens Europe’s largest fintech site in London. Airwallex wins $17M funding. India to see fintech regulations soon. Today’s main analysis: National survey shows instant […]
PayPal partners with WooCommerce, Xero for ‘Business in a Box’. GP:”A very interesting approach. Square is built on making taking credit card payment easily. PayPal is falling behind on innovation.” AT: I would argue that PayPal was the world’s first digital bank. Many online entrepreneurs, including myself, have been using it as a bank account for years even if the service hasn’t acted like a traditional bank. Now, it looks like PayPal is trying to become an actual bank as well as a small business tool box. Think Quicken + CRB.”
Morty launches fully-automated mortgage marketplace. GP:”The interesting part here is not comparing mortgage prices, Lending Tree does that. It is instead if you can close via the website as well. I am curious to see traction and volume numbers here. I think it is all about customer experience. “
Elevate Credit, Inc. (“Elevate”) announced today that Elastic SPV, which purchases loan participations in the Elastic line of credit product originated by Republic Bank & Trust Company (“Republic Bank”), increased its debt facility with Victory Park Capital from $150 million to $250 million. This is the first step in a two-step process to further increase and diversify the funding capacity for the Elastic line of credit product.
During the second quarter of 2017, an additional SPV will be created as another funding source for the Elastic line of credit product. This additional SPV for Elastic would provide additional funding, diversified funding sources and further lower the cost of funds.
Starting May 15, SoFi staffers will participate in an online series that will offer users tips on communicating their value in the workplace and tell inspirational stories. The company will hold workshops in eight U.S. cities including New York, Chicago, Seattle, San Francisco, and Washington, DC, on negotiating pay raises, non-monetary benefits, and other topics. Career expert Nicole Lapin will appear at the New York event.
The average SoFi student loan customer is about 33 years old and has a student loan balance of about $75,000, more than twice the national average. A SoFi survey also found 50% of young, college-educated professionals had not negotiated their own salaries, and 54% said they don’t know their “market value.”
PayPal today launched a new service, called Business in Box, aimed at bringing more U.S. small business owners to its payments platform. The service, which was developed in partnership with WooCommerce and Xero, offers merchants a suite of tools for running their online businesses, including an online storefront, accounting tools, the ability to apply for working capital from PayPal and, of course, support for taking payments either online or offline, via PayPal.
Business in a Box is largely aimed at first-time business owners who already know what they want to sell and have a roadmap in mind, as well as at established offline businesses that want to make the move online.
Often, these business owners would otherwise turn to an e-commerce platform, like Shopify, Magento, BigCommerce or WooCommerce, to establish their online presence and take advantage of other add-ons that can help them with other aspects of their business, like running promotions, marketing, order management, shipping, social media and more.
The company also noted today that PayPal Working Capital has now helped more than 115,000 businesses worldwide access more than $3 billion in loans and cash advances since the service launched in 2013.
American consumers appear to be warming up to instant financing options when purchasing goods and services online. According to a new national survey, three quarters (75 percent) of consumers indicate they would be likely to select an online retailer that offered instant financing compared to another that did not; 28 percent would be very likely to change merchants in order to use instant financing.
Instant financing is an easy-to-use, revolving line of credit that consumers apply for within a merchant’s online checkout. It allows consumers to spread purchases over time with low APR financing offers, and provides an alternative to credit and debit cards when paying for an online purchase.
The online study was fielded between April 10 and 13, 2017 by Researchscape International on behalf of Klarna North America (www.klarna.com). The survey of 2,024 consumers, ages 18 and older, was designed to better understand the behaviors and attitudes of consumers towards instant financing. Consumers were quota-sampled using 32 different cells (gender by age by region) to closely match the overall national population.
In terms of how instant financing might impact their spending while shopping online, 39 percent of consumers indicated they would spend more money on a purchase if they had the option of instant financing compared to 42 percent who would not and 19 percent who did not know if they would spend more money.
Smartphone owners, 88 percent of consumers who responded, were asked about the ease and willingness to enter certain types of personal information when applying for instant financing. Among the information seen to be “too much trouble” to enter were Social Security number and bank account numbers (51 percent each), and credit card numbers (40 percent). On the other hand, just over a tenth of consumers found it to be too much trouble to enter an email address (11 percent), birthday (12 percent) or spouse’s name (12 percent).
Other key findings of the survey include:
Nearly half of respondents (47 percent) would like to be presented with an instant financing option while shopping online
Just over a quarter of consumers surveyed (28 percent) have used instant financing while 68 percent have not and 4 percent were not sure if they had
Beyond probing consumers’ thoughts regarding availability, the survey also asked about the convenience and ease-of-use factors of instant financing. For instance, a majority of consumers (52 percent) expect to wait three or more minutes to be approved for instant financing. Twenty-eight percent would expect to wait two minutes and just 20 percent would expect to wait under a minute. Klarna’s approval process typically provides an approval in under a minute with only simple, top-of-mind information required.
Focused on empowering homeowners to make smarter decisions about their mortgages, today Morty (www.himorty.com) launches its fully-automated mortgage marketplace, where homebuyers can shop, compare — and close — any loan option from among its network of lenders. Morty is initially rolling out with 10 major lenders across 10 markets in the United States, with plans to expand nationally by the end of 2017.
Leveraging the founding team’s diverse experience and learning first-hand from homebuyers during its initial pilot, Morty was able to identify pain points from start to finish and prove the benefits of a marketplace model. In the over one thousand real-life loan scenarios it has run for homebuyers, Morty has observed rate and fee variances across lenders that can add up to tens of thousands of dollars in fees and monthly payments.
Morty is creating an entirely new model: access to any lender or mortgage product within a single, unified mortgage process from first click to closing day.
Here’s how it works:
Homebuyers create a simple financial profile by linking their income, assets, employment, and property information and describing their homeownership goals.
Morty’s pricing engine algorithmically matches the homebuyer’s profile with each lender’s eligibility and pricing guidelines to show accurate, customized quotes, inclusive of all lender fees and closing costs.
Borrowers see their loan options in full transparency and compare across lenders and products.
Never once leaving the Morty platform, the homebuyer chooses a loan and Morty automates the process all the way to the closing table.
In addition to its launch, Morty also announces that it has raised $3 million in funding led by Thrive Capital with participation from SV Angel, FJ Labs, Corigin Ventures, MetaProp, Techstars and several angel investors.
RealtyeVest, Formerly IHT Realty Group, officially unveiled their new brand and optimized website. Destined to become one of the largest real estate crowdfunding platforms in the US, the new RealtyeVest website () provides a simple, secure and transparent platform for accredited investors, real estate developers and owner-operators.
“Our decision to rebrand from IHT Realty Group to RealtyeVest was a result of listening to feedback from our strategic partners and observing best practices in the industry,” said Daniel Summers, CEO. “We believe our new name better represents the essence of our business, and we are excited about the innovative technology that powers our new online marketplace. We spared no expense in the new build, providing a win-win to our investors and Sponsors.”
RealtyeVest is an online marketplace that connects investors and Sponsors (real estate owner-operators) to crowdfund exclusive real estate investments. Their platform allows its members to browse, research and make informed investment decisions on these exclusive properties.
China Rapid Finance Ltd. on Friday became just the second consumer lender this year to list in the U.S., following Elevate Credit Inc. earlier in April. Although they do business on opposite sides of the world, the duo has much in common: Both face investor questions about the reliability of their borrowers, both begin trading amid a particularly iffy time in the credit cycle and — perhaps consequently — both slashed their IPO price days before going public.
When LendingClub Corp. went public in 2014, some hailed the event as the dawn of a new era for finance. Shares have since fallen 60 percent from the IPO price.
“China Rapid Finance is coming to the market during a turbulent time in the China peer-to-peer industry as regulators roll out more controls to clean up what has so far been chaotic growth in the past few years,” MCM Partners analyst Ryan Roberts wrote in a note on the stock’s first initiation, a buy rating. “The company reduced the pricing range by about 40 percent, which we suspect reflected tepid demand from backers,” the note said.
Both recent IPOs are now trading up from their reduced offering prices by nearly 25 percent. MCM says the IPO valued China Rapid Finance at 4.7 times its book ratio. William Blair on Monday said that Elevate Credit is trading at 7.5 times its 2018 estimated earnings per share.
Even so, the 29-year-old Williams is a force, as is his company. Since launching, Cadre has generated nearly $1 billion worth of deals, raising close to $70 million in funding from high-profile investors such as Peter Thiel, Goldman Sachs, and Jack Ma.
So Williams set up a website where he could analyze these homes using a tax parcel ID–which tracks the value of a property over time–and measured this against what they were selling for. Using the data, and bolstered by the cash of wealthy Harvard alums including the Kushners, he started buying dozens of properties and flipping them for three times their original price. “By the time I graduated, I was at a crossroads: Do I scale this business nationally, or do I do tech banking at Goldman Sachs?” he recalls thinking.
Williams decided to do both. He pulled 18-hour days as an investment banker–and then would quietly work on his startup from the comfort of a supply-closet-size room by night. Real estate, he figured, was a valuable asset that ought to be made available to more (and more average) investors.
Cadre is an e-commerce site for investing in real estate. It connects customers–primarily wealthy individuals, referred to as “qualified purchasers”–to property deals across the U.S. (Cadre requires a minimum investment of a few hundred thousand dollars; that’s somewhat less than what a traditional fund requires, but likely more than what you’d pay to buy into a real estate investment trust, or REIT, which trades like common stock.) Williams declined to comment on what exactly the company charges its investors–it asks for an upfront fee and a recurring subscription rate–though notes that it’s in the range of a “couple hundred basis points.” A fund, by contrast, will typically take 2 percent of the investment, and then 20 percent of profits over time.
Although Cadre faces competition mainly from the traditional brokers, a growing number of startups have emerged in the real estate leasing space, such as 42Floors, a San Francisco website that lists commercial real estate and office rentals, and Rofo, an online marketplace for property listings and potential tenants that can facilitate lease deals without broker intervention.
NCAP Notice to Clients regarding Public Record Standards (Experian Email), Rated: A
In 2015, Equifax, Experian, and TransUnion announced the National Consumer Assistance Plan (NCAP), a set of initiatives designed to improve the accuracy of credit report information, as well as to provide consumers with a better experience interacting with the nationwide Credit Reporting Agencies (CRAs).
In June 2016, the CRAs announced enhanced public record data standards for the collection and timely updating of public record data reported on consumer credit reports. The enhanced standards require: (i) minimum consumer identifying information (name, address, social security number and/or date of birth) (“PII”) and (ii) minimum collection frequency for public records (at least every 90 days). These enhanced standards will apply to new and existing public record data on the CRAs’ respective consumer credit reporting databases. As previously announced, these enhanced standards are effective July 1, 2017.
Based on information provided by our public record vendor about the data available from courts and recorders’ offices, we expect bankruptcy public record data will continue to meet the enhanced collection and reporting standards. However, civil judgments and approximately half of tax lien data are not expected to meet the enhanced standards.
During the week of July 10, 2017, the CRAs will remove from their databases previously collected public record data that does not meet the enhanced PII standards. This includes the removal of all judgment public records and the portion of tax liens not meeting the enhanced standard. Public record data will also be monitored for adherence to the enhanced PII and collection frequency standards after July 1, 2017.
Despite the anticipated loss of significant volume of public record data from credit files, impact analysis conducted by the CRAs, as well as leading scoring model companies using CRA data, show a modest risk scoring impact and minimal loss in predictive performance as a result of these changes.
Please contact any member of your Account teams with questions you may have or forward questions to:
The proliferation of Robo-Advisors bringing low priced financial services out into the market has received significant buzz over the past few years.
When it comes to managing your money, minimal human intervention can be good or bad. The good comes when the algorithms and mathematical rules produce an asset allocation that is sensible for the purpose for which it is intended. The good also comes when the “human advisor” interjects personal preferences and judgments that are in the clients’ best interest.
Now, let’s analyze the downside, which can be a very deep and chasm. How we consider money, how we use money, how we value money, and what we believe about money is very human, indeed, and cannot be solved by mathematical equations.
For those who are looking for an asset allocation and a low-cost entry into investing, Robo advice can be a great place to start.
Alternative investments constitute a growing $7 trillion industry and more than 10,000 hedge funds have money in alternative platforms. Yet, most retail investors are just learning about these lucrative asset classes.
To illustrate the difference for clients who may not be familiar with alternative investments, ask them to imagine this scenario. A successful real estate flipper has bought and sold 25 properties in five years. After finding a great deal on a house in foreclosure, he applies for a bank loan to purchase it. The bank declines, spooked by four open mortgages he holds on current projects.
He’s never defaulted, but the bank still judges him as overleveraged because his loan-to-value ratio is 50 percent. It doesn’t fit into the bank’s rigid evaluation box, which has become even more stringent after the 2008 financial crisis. The perceived risk is much higher than the actual risk.
Then, he approaches an alternative lender who sees he’s willing to put his own money into a property in a desirable neighborhood and to offer a personal guarantee. The decision comes down to actual risk. Can this property fall in value by 50 percent in nine months? Will the borrower flip it in nine months for a handsome profit? By understanding the data and the flipper’s borrowing track record, the lender concludes that he will flip the house and fronts the capital.
FLEETCOR Technologies, Inc. (NYSE: FLT), a global provider of fuel cards and workforce payment products to businesses, announced today that it has signed a definitive agreement to acquire Cambridge Global Payments (“Cambridge”), a B2B international payments provider.
Lantern Credit, a financial technology company working to solve systematic inefficiencies in the consumer credit industry, adds Ricardo Gomez-Acebo to its Board of Managers. He joins Chairman John Mack, Vice Chairman John Sculley, James Held, Seth Johnson, Kevin Knight and Chad Swensen on the Lantern Board.
Gomez-Acebo has more than 30 years of experience in the Spanish and International Retail Banking sector, holding various executive roles at Spanish banks Banesto and Banco Santander including General Manager of Europe for Banesto. Gomez-Acebo led business development with strategic financial partners at Banco Santander and most recently is heading risk management for the bank.
Incumbent financial services’ millennial strategy (The New Yorker via CB Insights Email), Rated: B
Radix Law’s principal attorney, Jonathan Frutkin, will be a featured speaker at the “Fourth Annual Conference and Workshop for Crowdfunding USA” scheduled for May 4 to 5 at the National Press Club in Washington D.C. Frutkin is the author of the book Equity Crowdfunding: Transforming Customers into Loyal Owners.
RATESETTER’S upgraded data disclosure on its loan book and expected losses has brought its transparency to a top-tier level, according to peer-to-peer lending research firm 4th Way.
Based on the amended methodology, expected cumulative losses now stand at £18.06m, which paired with the current £22.44m provision fund buffer result in a 124 per cent coverage ratio – six per cent higher than last reported.
RateSetter’s data table now provides a clear estimate of the losses expected over the lifetime of its loan book, spelling out the losses that have already materialised and future expected losses for each year of origination, as well as a detailed breakdown of different types of arrears, provision fund adequacy levels, and investors’ expected returns.
What we discovered is that small businesses are going for growth, unfazed by the uncertainty caused by last year’s referendum result and the snap election. Nearly 70% of UK small businesses expect their turnover to increase within the next 12 months – half of whom expect a steady increase of between 6 and 20%, and only 6% expect turnover to decrease.
Small businesses, who already account for 60% of private sector employment, will continue to drive much needed job creation this year. More than half of the businesses we spoke to are planning to hire at least one new full-time member of staff over the next year. With more than 5 million small businesses across the country – this could mean the creation of millions of new jobs in the next 12 months!
When asked what their one policy priority is in the run up to the election, tax was by far the most important issue. With business rates mentioned specifically nearly 300 times, 40% said that they want the new Government to focus on this area after the election. The second most important policy area, according to a quarter of businesses, was of course Brexit.
To date investors have lent £2.2 billion to more than 23,000 UK small businesses.
A vast majority of the 2,300 firms interviewed by the country’s third largest small- and medium-sized enterprises (SME) lender are poised to throw their weight behind Theresa May’s party as the best positioned to deliver Brexit, despite half of them opposing the separation from the 28-nation bloc in the referendum last year.
The research also confirmed that UK SMEs have quickly shrugged off Brexit-induced economic worries, as seven in 10 firms expect to deliver stronger profits in the next 12 months and only six per cent forecast a drop in turnover over the same period.
Peer-to-peer friends and family lender, Flender announced it has now received its full authorisation from the FCA and has also launched operations in Ireland.
The platform says it has funded loans of over €900,000 since its soft-launch, without any marketing or advertising. It has seen demand from companies in a wide range of industry sectors including construction, F&B, energy companies, retailers and more. It reports that it has attracted over 750 registered users, 138 campaigns submitted with 11 currently live on the platform.
RateSetter previously provided financing to George Banco. RateSetter will now lend directly to George Banco’s growing customer base with George Banco generating the leads.der George Banco. RateSetter has also acquired an equity stake in the George Banco company.
Additionally, RateSetter has acquired specialist motor finance providers Vehicle Stocking Limited and Vehicle Credit Limited out of their parent company’s administration. RateSetter will rebrand both businesses and invest in them to build on its current motor finance capabilities. RateSetter previously provided wholesale finance to these businesses.
Growth Street’s marketplace rate dropped on Monday from 6.5% AER to 6.4% AER, rewarding borrowers with a 10bps drop in their costs of funds. The UK P2P lender attributes the drop to the momentum it has built on its platform, welcoming over 700 investors to date since the launch of its investment offering in November.
Loans are split into a minimum of £20 chunks or loan parts allowing investors to achieve a high level of diversification when investing relatively low amounts. Funding Circle suggests lending to a minimum of 100 businesses to achieve a 1% exposure to any one business. When investing a minimum of £2,000, Funding Circle’s auto-bid function will achieve this level of diversification automatically.
Borrowers across Funding Circle are all small to medium sized businesses (SMEs), borrowing between £5,000- £1million for loan terms of 6 months to 5 years.
Funding Circle is the only peer-to-peer lending platform of scale which operates across multiple geographies. The P2P platform has expanded from the UK to the USA, Germany and Spain. 74% of Funding Circle’s group (Funding Circle Holding Limited) revenue in the period ending the 31st December 2015 came from its UK business (Funding Circle UK Limited).
VPC Specialty Lending Investments PLC (LSE:VSL.L) released 2016 annual results last week and according to Chairman Andrew Adcock, results continue to disappoint. Shares in the fund that invests in various online lending assets continue to trade at a significant discount to the net asset value per share. As of December 31, 2016, VPC had deployed 87% of its NAV (with its cash holding of 13% temporarily elevated due to the recent sale of the Funding Circle U.K. portfolio). During 2016, VPC generated an NAV return of 0.85% for the Ordinary Shares and distributed dividends of 6.00 pence per Ordinary Share relating to the income earned during the year.
The recent news that peer-to-peer lending platform Funding Circle plans to stop all property development lending by mid-2018 came as something of a surprise.
Risk is always a factor in construction, but it is how that risk is managed that is important. Funding Circle’s withdrawal could allow other lenders to enter this space, and increased competition will be no bad thing in giving developers greater choice.
While we appreciate that there are always certain areas of the market that give cause for concern, many of our clients have a clear appetite for further growth. While demand is strong, and developers continue to be starved of funds by traditional lenders, the market for alternative finance – and peer-to-peer lending particularly – will come to the fore.
At time of writing shares were trading around $7.10 per share.
The fact that China Rapid Finance and Yirendai before them chose to go public in the US is significant. In a recent Lend Academy podcast with Yirendai CEO Yihan Fang, she stated that they felt the US was more educated on marketplace lending. This coupled with the fact that Ning Tang (Founder of parent company CreditEase) and other management members had experience in the US and were more comfortable with the US capital markets led to their decision to list in the US.
Today, FuMi Tech, MI’s related eco-chain company, announced it has finished A round of financing and raised 100 million RMB. This round of financing led by Buddhism Capital, with MoBai Capital and the previous investor ShunWei Capital participated. The fund will be continuously used to improve users’ experience.
WeBull, one of the products of FuMi Tech, providing trading services of US and HK stocks, and supporting real-time quotes of global stock, foreign exchange, funds and derivatives markets of over 20 countries. In fact, FuMi Tech has previously raised a joint investment of 50 million RMB from MI and ShunWei Capital.
Recently, China Construction Bank(Guangdong Branch) has launched its P2P funding depository product “Dragon depository”, and currently the bank has reached agreements with several P2P lending platforms.
According to an insider of CCB, the two critical measurements for their P2P cooperators are: bad debts and overall strength of the platform.The participation of CCB will promote the compliance process and bring a sustainable development of P2P lending industry.
The first Asia Credit Rating Agencies CEO Fair & Systemic Risk International Seminar was held in Beijing recently. Hongwan Chen, the deputy director of the financial department of National Development and Reform Commission, said that the regional cooperation across Asia is important for it could accelerate the Construction of Credit System in the area. He also advise to build credit record for local companies incorporated overseas and foreign investors, and set up a “blacklist” about those seriously illegal enterprises.
Dr. Wang completed his Ph.D in statistics at the University of Chicago in 1995 before moving on to Sears Credit where as head of analytics he developed models employing credit bureau data while also overseeing the creation of a credit data warehouse. He returned to China, where in 2001 he founded China Rapid Finance which began by developing credit scoring and decisioning models that helped companies issue more than 100 million credit cards.
In 2010 they made the move into marketplace lending, where they teamed up with more than 100 Chinese internet companies to analyze and score data that allowed them to preselect customers.
Seven years later China Rapid Finance has become China’s leading online consumer credit marketplace after facilitating 15 million loans to two million borrowers, beginning with small amounts for short durations and growing into longer-term loans for larger amounts.
EMMAs total 500 million and have been underserved by traditional credit providers, who focus on the 300 million super prime people who work for government or large institutions, Dr. Wang explained. He estimates China’s consumer credit coverage at roughly one-fourth that of the United States. While roughly 60 per cent of Americans have credit coverage, that rate is 16 per cent in China.
EMMAs are prime and near-prime consumers who are educated and have stable employment in the services and with startups and SMEs, but they have little credit history and cannot obtain bank credit. They also largely stayed away from the notorious shadow banks, a large (no one knows precisely how large) opaque industry which helped fuel both real estate and small consumer loans.
Barclays has today opened its flagship open innovation site, Rise London, in Shoreditch. It is Europe’s largest co-working space dedicated to financial technologies (FinTech).
Rise, created by Barclays, brings together from across the world a carefully curated community of FinTech startups, along with our corporate clients and other experts, to work on Barclays’ customer and business opportunities and together help to create the future of financial services.
Rise London will house more than 40 FinTech companies, along with Banking and Technology teams from Barclays, and will serve as a gathering place for leaders in the FinTech and venture capital communities. Rise London will play host to more than 200 hours of learning, workshops, hackathons and networking on a monthly basis.
Australian cross-border payment startup Airwallex has secured US$13 million ($17.4 million) in a funding round to continue its expansion overseas.
For Sequoia — the 45-year-old firm famous for investing in famous tech brands such as Apple, Google and AirBnB – the deal represents its Chinese arm’s first investment in an Australian startup.
Airwallex founder and chief executive Jack Zhang told Business Insider that the company, which already can make payments to 100 countries, will use the cash injection to expand its physical presence in locations such as London, Shanghai, Hong Kong, Indonesia, Malaysia and Taiwan.
SoftBank Group Corp. is in talks to invest about $1.4 billion in India’s One97 Communications Ltd. in a deal that would value the owner of the country’s largest digital-payments provider at about $7 billion, according to people familiar with the matter.
The deal is not yet finalized and the terms may yet change, said the people, asking not to be identified because the matter is private. One97 Communications, whose Paytm unit has seen business surge as India took most of its paper bills from circulation, has also had discussions with two other investors, one of the people said. The company was last valued at $4.2 billion, according to research firm CB Insights.
Traditional banks have left quite a few gaping holes when it comes to unsecured loans, especially for salaried people who are not employed in companies that they classify as A/A+ category.
Quick Personal Loans
Customers, it appears, are warming up to online alternative lending portals, and it is predominantly due to the speed with which the loan application is processed, verified and approved. Tedious documentation, in addition to ambiguous rules and non-transparency in the whole process that a customer faces with banks, has made entrepreneurs reinvent lending for salaried employees. The ease and convenience of digital (and painless) transactions are considered priceless. There are lenders such as Qbera, which disburses personal loans up to INR 5 Lakhs in 24 hours.
Alternative Fixed Income Products Become More Popular
2016 saw RBI releasing a set of directives regarding P2P loans in India. The paper recommends NBFCs status for P2P lenders, which is almost consistent with what the P2P sector has been demanding. This liberal approach helps to protect the interest of all stakeholders without choking innovative ideas. P2P lenders are hoping for these recommendations to become regulations after the budget announcement, which will give the arena a facelift.
Short-Term Payday Loans
You don’t get instant cash from banks and online payday loan providers often save the day. As they are offered for shorter tenures compared to online personal loans, it gets repaid more quickly, which is a definite plus. You can even opt for monthly, fortnightly, weekly or daily loans.