Thursday October 17 2019, Weekly News Digest

LendingClub

News Comments Today’s main news: Zopa launches tool to compete with credit bureaus. KBRA assigns preliminary ratings to Marlette Funding Trust 2019-4. OnDeck Capital financial results. ID Finance raises 1.7M euro on Crowdcube in minutes. Canada’s fintech adoption rate has doubled since 2017. Today’s main analysis: LendingClub account performance (A MUST-READ). LendingTree’s Personal Loan Offers Report […]

The post Thursday October 17 2019, Weekly News Digest appeared first on Lending Times.

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News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2019-4 (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Marlette Funding Trust 2019-4 (MFT 2019-4). This is a $326.27 million consumer loan ABS transaction.

Preliminary Ratings Assigned: Marlette Funding Trust 2019-4

Class

Preliminary Rating

Initial Class Principal

A

AA (sf)

$260,298,000

B

A (sf)

$30,117,000

C

BBB- (sf)

$35,854,000

On Deck Capital Inc. Financial Results Comparing With Consumer Portfolio Services Inc. (Mesa Weekly), Rated: AAA

On Deck Capital Inc.’s volatility measures that it’s 85.00% more volatile than S&P 500 due to its 1.85 beta. Consumer Portfolio Services Inc. on the other hand, has 1.53 beta which makes it 53.00% more volatile compared to S&P 500.

Earnings & Valuation

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
On Deck Capital Inc. 3 0.12 45.93M 0.45 7.99
Consumer Portfolio Services Inc. 4 0.55 13.97M 0.50 7.37

Profitability

Net Margins Return on Equity Return on Assets
On Deck Capital Inc. 1,349,850,114.62% 12.2% 3.1%
Consumer Portfolio Services Inc. 396,042,410.84% 7.6% 0.6%

Global cooling; Upgrade Card (PeerIQ), Rated: AAA

In industry news, Upgrade led by CEO Renaud Laplanche released the “Upgrade Card”. The product is a cross between credit card and an installment loan. How does it work? Every month any new charges on the card transition into an installment loan of 12, 24, or 36 months. Customers can select the default payback period when applying for the card and they have the option to change the term for new charges at any time. Upgrade Card offers true risk-based pricing with a range of 6.49% to 29.99%. LendIt Co-Founder Peter Renton has a nice summary here.

In macro news, the Fed is expected to cut rates for a third time later this month to a range of 1.5% to 1.75%.

Source: OECD Interim Outlook Projections, Blackstone, PeerIQ
Source: WSJ, Cantor Fitzgerald, PeerIQ

New LendingClub Account Performance (Lend Academy), Rated: AAA

In April 2018, LendingClub provided us with $5,000 to open a brand new account. Since then we have been chronicling the status of the account on a quarterly basis. Below are links to the full series of blog posts in chronological order:

Source: Lend Academy
Source: Lend Academy

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

At 1,270 basis points, the spread between the highest and lowest offered APRs offered to the same consumers were especially stark for high-score borrowers.

  • The average spread for those with scores of 760 or higher was 1,270 basis points, amounting to a difference of 58.5% on the average loan amount offered for a three-year personal loan.
  • Consumers with scores between 720 and 759 saw an average offer spread of 1,145 basis points, representing a 49.9% difference in interest paid.
  • For those with scores between 680 and 719, the average spread was 971 basis points, representing a 37.3% difference in interest paid.
  • Borrowers with scores between 640 and 679 had an average spread of 860 basis points, representing a 28.2% difference in interest paid over the three years of the loan.
Source: LendingTree

Kiva Lending Team: Lendio Gives (Kiva), Rated: A

Lendio has provided over 10,000 Kiva microloans through its

Source: Kiva

There’s Never Been a Better Time to Consolidate Credit Card Debt (Credible), Rated: AAA

According to data collected by the Federal Reserve, borrowers who were assessed interest on their credit card accounts paid 16.97% on average during the three-month period ending Sept. 31. But the average rate on personal loans was only 10.07%.

That’s a spread of 6.9 percentage points — an all-time high in Federal Reserve records dating back to 1998.

Apple and Goldman Sachs aren’t reporting Apple Card information to credit bureaus (MarketWatch), Rated: A

Apple and Goldman Sachs have yet to start reporting consumers’ payment information for the Apple Card to the major credit bureaus, a source close to Goldman Sachs confirmed to MarketWatch on Monday. The source later said that the companies will begin reporting to the credit bureaus later this quarter.

Goldman Sachs CEO says Apple Card is the most successful credit card launch ever (CNBC), Rated: B

“In three short years, we have raised $55 billion in deposits on the Marcus platform, generated $5 billion in loans, and built a new credit-card platform and launched Apple Card,” Solomon said, adding “which we believe is the most successful credit card launch ever.”

Rise of fintech weakens law to prevent lending discrimination (Roll Call), Rated: AAA

As online banking threatens to make in-person banking at brick-and-mortar branches as archaic as video rental stores, it may do the same to a 1977 law created to counteract decades of underinvestment in minority neighborhoods.

Fewer branches, more online

While that includes some wholesale banks or limited purpose institutions, like credit card banks, online banking is driving the sector’s growth.

At the same time, the number of bank branches with an obligation under the CRA to provide loans and other services is falling. Branches have declined every year since a peak in 2010, at 99,550, according to data from the Federal Deposit Insurance Corporation. Banks closed 1,700 branches in 2018, dropping the total number to 86,375.

After steadily rising to a peak of $505 billion in 2016, the number of CRA-compliant loans that banks issued dropped in 2017 to $482 billion, according to the Office of the Comptroller of the Currency.

CNB Bank Moves to Revolutionize its Retail Lending with nCino (PR Newswire), Rated: A

nCino, the worldwide leader in cloud banking, today announced that Pennsylvania-based CNB Bank will utilize nCino’s Bank Operating System to digitize its retail lending process from end-to-end to enrich the customer experience.

California has reformed consumer loan interest rates. But will lenders find loopholes? (Cal Matters), Rated: A

Gov. Gavin Newsom has signed into law Assembly Bill 539 by Assemblywoman Monique Limón, Santa Barbara Democrat. The measure sets an annual interest rate cap of roughly 36% on consumer loans from $2,500 to $10,000 made by non-bank lenders.

For the prior 34 years, under state law, the sky was the limit on rates charged for such loans. Last year, 333,416 non-bank consumer loans in the $2,500 to $10,000 range had annual percentage rates of 100% or higher. That represented 40.7% of such loans. In the $2,500-$4,999 range, the triple-digit APR ratio was 55.5%.

DrawBridge Lending CEO Discusses Risk and Compliance for Lending Capital to Bitcoin Holders (Crowdfund Insider), Rated: A

Earlier this month, DrawBridge Lending (DBL Digital), a digital asset lending, borrowing and investment management firm, partnered with Kingdom Trust, a qualified custodian providing a self-directed IRA incorporating several digital assets with property and traditional asset investments.

To be eligible to invest, investors must be eligible contract participants (ECPs), which means they should have a minimum net worth of $1 million. The minimum investment in Drawbridge Lending’s series fund is $1 million, which can be met with the contributions of multiple investors.

There are more than 600,000 millennial millionaires in the US, according to report (CNBC), Rated: A

There are 618,000 millennial millionaires in the U.S. and their wealth is only expected to grow.

Currently, 93% of millennial millionaires have a net wealth between approximately $1 million and $2.5 million, according to the report. Nearly 60% live in either California or New York and they are investing more in real estate than their elder-millionaire counterparts.

The Pros and Cons of Using Peer-to-Peer Lending When Investing in Real Estate (The Motley Fool), Rated: A

Today’s real estate investors have many financing options at their disposal. There are traditional options like government-backed loans, home equity lines of credit (HELOCs), and investment property mortgages. But on top of those, you also have new-age choices like crowdfunding and peer-to-peer (P2P) lending platforms.

Real Estate Earnings: What To Watch For This Quarter (Seeking Alpha), Rated: A

The “REIT Rejuvenation” of 2019 has restored the coveted NAV premium for most sectors, giving these REITs the currency to re-open the acquisition pipeline. This valuation premium has allowed REITs to kick-start external growth, which has historically been responsible for more than half of FFO per share growth across the REIT sector. REITs were net buyers again in 2Q19, buying $12.5 billion in assets while disposing of $6.6 billion. The $5.9 billion in net acquisitions was the largest quarterly “buy” since 4Q17, and we expect this trend to continue into 2020 given the favorable valuation environment. We break down the acquisition activity for each of the REIT sectors later in this report.

Source: Seeking Alpha

AMERICAN FINANCIAL RESOURCES AND FINICITY PARTNER TO SIMPLIFY THE MORTGAGE EXPERIENCE (Finicity), Rated: B

American Financial Resources, Inc. (AFR) announced today it is working together with Finicity—a provider of real-time financial data access and insights, to provide its business partners and their borrowers with a faster, simpler and more secure way to verify assets and income while originating loans.

Roofstock Accelerates Innovation with New Chief Product Officer at the Helm (Yahoo! Finance), Rated: B

Roofstock, the marketplace for investing in real estate, announced the addition of Ketan Babaria to the fintech’s leadership team as Chief Product Officer. Formerly the Head of Product for LifeLock and Capital One’s D3 incubation unit, Babaria will enhance Roofstock’s current offerings and introduce new, creative ideas to accelerate the fintech’s growth and make real estate investing radically accessible.

Director of Operations Joins Fintech Startup LenderClose (DS News), Rated: B

Des Moines fintech startup company LenderClose has welcomed Andrew Deignan as Director of Operations. Deignan will manage the Operations and Vendor Relationships group, ensuring LenderClose delivers the highest level of service to its credit union and community bank lender users.

United Kingdom

Zopa launches tool to dispel “mystery” of credit worthiness (AltFi), Rated: AAA

Zopa, the first ever peer-to-peer lending platform, is launching the tool, called Borrowing Power, as it says that lending decisions and credit worthiness have been “shrouded in mystery” for too long.

The tool, which is free of charge, works by giving Zopa customers a borrowing score between one and ten. Customers are shown why they are given the score and how they can help improve the score.

In the Spotlight with Mario Lupori, RateSetter (Financial Reporter), Rated: AAA

We spoke to Mario Lupori, chief investments officer at RateSetter, about whether there is more consolidation to come in the peer-to-peer market and whether forthcoming regulatory changes will hinder the sector.

Samsung.com partners with Klarna to offer pay later payment plans (IBS Intelligence), Rated: A

Samsung.com has partnered with payment provider Klarna in the UK to provide customers service to make purchases from its website and pay later. The customers will get a convenient and hassle-free way to pay later at Samsung.com.

Klarna: too good to be true for students? (Mancunion), Rated: A

Klarna is perfect in those situations, giving you a ‘try before you buy option’. You can get as many items as you wish, in as many sizes, returning all the items you don’t need before a penny leaves your bank account. There’s no waiting around for refunds to reach your depleted bank account – you only pay for what you actually keep.

Octopus Choice’s P2P loans now available within a SIPP (AltFi), Rated: A

The firm has announced that its P2P investment platform is now accessible within a SIPP wrapper.

Could banks become redundant in the future? (Finextra), Rated: A

P2P lending as it right now stands absolutely no chance in competing with traditional banking, as it requires a bit too much time from the lender’s side.

However, should technology such as Artificial Intelligence be successfully implemented on these platforms, it’s likely that P2P lending will occupy a large percentage of the financial market share.

Starling launches TV ad campaign after reaching 900,000 customers (AltFi), Rated: A

Today Starling Bank will premiere its first TV ad on ITV and Channel 4 during England’s UEFA Euro 2020 qualifier against Bulgaria, and Jamie’s Meat Free Meals.

Celsius Now Offers up to 10% Return on TrueUSD Lending Service (Finance Magnates), Rated: A

Celsius Network, a cryptocurrency lending and borrowing platform, has partnered with TrustToken, the team behind dollar-pegged TrueUSD (TUSD), to offer up to 10 percent interest on four new stablecoins.

Casa Italia to expand its restaurant in Liverpool following £650k loan from OakNorth Bank (Fintech Finance), Rated: B

China

PayPal wants to help Chinese online shoppers buy from overseas (Business Telegraph), Rated: AAA

By the end of this year, Chinese online shoppers will have a new way to buy things from abroad: PayPal.

Despite the tensions between Beijing and Washington, China’s central bank has allowed the US company to take a toehold in the country’s valuable payments market by buying a majority stake of Chinese payments group Gopay.

European Union

Barcelona-based fintech ID Finance secures €1.7 million within minutes on Crowdcube (EU-Startups), Rated: AAA

Barcelona–based ID Finance, a fintech that operates in Europe and Latin America, has raised over €1.7 million in crowdfunding within minutes of its campaign going live on Crowdcube, amidst strong demand from investors. The data science, credit scoring and digital finance company has a target of €2.3 million.

The company has a well established global team and over 3 million users, with over 40,000 new users joining each week. It is on track to double revenues this year to €90 million – up from €13 million in 2017 – and is targeting over €267 million in revenue by 2021, with the goal of becoming the number one digital lending platform in Hispanic and Latino markets.

Fintech exits have raked in €83bn since 2013 amid European funding boom (sifted), Rated: AAA

The sale of European fintechs via initial public offerings or acquisitions has pulled in €83bn over the past six years, according to a new report by Dealroom.co and Finch Capital. This is twice as much as the next biggest category, enterprise software, and highlights the scale of opportunity for investors as well as the growing maturity of the fintech market.

Some of the biggest exits were the €7.1bn flotation of Dutch payments company Adyen and the sale of Swedish start-up iZettle to Paypal for $2.2bn last year.

The same report also estimates that the continent’s remaining private fintechs have an “unrealised” value of €43bn combined, including companies such as N26 and Starling Bank.

Source: sifted
Source: sifted

Which P2P Lending Marketplaces in Europe Accept American Investors? (P2P-Banking), Rated: A

European p2p lending services are growing. And yields of 10+% are achievable on some of the platforms. This attracts international investors.

Here is an overview of 5 services (sorted aplphabetically) that do allow US investors.

Assetz Capital is a marketplace for UK SME and property development loans. The liquid ‘access’ products offer 4.1% to 5.75% interest.

Bondora is an Estonian p2p lending marketplace for consumer loans. The highly liquid Go&Grow product offer yields 6.75%. With other products higher yields of 10+% are achievable.

Estateguru is an Estonian marketplace for property loans. Typical interest rates are 10-12%.

Flender is an Irish marketplace for SME loans. Typical interest rates are around 10%.

Mintos is a Latvian p2p lending market place. A wide range of loan types is offered. The fairly liquid ‘Invest&Access’ product currently promotes around 8% rate. Yields of 10+% are possible with manual and autoinvest.

Europe’s top tech startups to know (sifted), Rated: A

Europe’s startup scene is often overshadowed by Silicon Valley, but the continent is gaining ground with more than 160 tech firms valued at over €1bn.

Klarna
Founded 2005 — Stockholm, Sweden — Unicorn

In 2019 it launched a new $460m fundraising round, giving the company a post-money valuation of $5.5bn and making it the highest-valued private fintech company in Europe. That was a 250% increase on its last valuation at the beginning of the year.

Starling Bank
Founded 2014 – London, UK – Rising Star & Female Led

Led by Anne Boden, Starling has made a dent in the UK’s thriving fintech ecosystem. As of August 2019 the bank has just shy of 800,000 customers, including around 60,000 business accounts. The company says it’s on track to pass a million this year and already has £1bn in deposits.

These numbers are not quite as impressive as Monzo, which boasts 3m customers, or Germany’s N26 with 3.5m.

Greensill
Founded 2011 — London, UK — Unicorn

Former British Prime Minister David Cameron is an advisor to the firm, which is backed by Softbank’s vision fund. The most recent funding round of $800m valued the company at $3.5bn — firm unicorn territory.

Its working finance solution is funded through issuing its own bonds, making it one of the largest bond issuers of the world, with an average of 47 bonds a day.

Nigerian SME Digital Lender Lidya Expands to Europe (Forbes), Rated: A

In an increasing trend where African technology companies are finding a global audience, Nigerian digital SME lending platform Lidya has expanded to Poland and the Czech Republic.

International

London-based finance platform Divido inks deal with US payment company Splitit offering point-of-sale finance (AltFi), Rated: A

Divido, the London-based consumer finance platform which lets consumers take out credit at the point of purchase to help spread the cost of purchases, has signed a deal with US payment company Splitit to offer a monthly instalment option to customers.

4+ INTERNET BANKING OPTIONS FOR GAMING (One Vale Fan), Rated: B

Klarna has become famous among the players in many countries since its creation in 2005. This virtual bank is seductive for its fast transactions and its privacy. The gamblers will remain anonymous when they deposit or withdraw funds utilizing Klarna as a method. In fact, this Swedish company does not ask any personal details or private information. What’s more, Klarna is also an excellent service to the mobile casino allowing the users to move funds at their convenience.

India

How Can Neobanks Potentially Transform SME Lending? (Inc42), Rated: AAA

Neobanking is a relatively newer concept in India as compared to the West, and is still on a take-off mode. However, market experts observe the gradual and steady adoption of Neobanks and credit their fast growth to its lender and SME-friendly characteristics.

IN CONVERSATION WITH CRIF’S ATRIDEB BASU & HOW HE SCALED DATA & ANALYTICS PRACTICE IN INDIA (Analytics India Mag), Rated: A

CRIF is an Italian company, based out of Bologna and caters to more than 6K banks and financial institutions across 30+ countries globally. In India, CRIF has two broad arms – one is the 100% subsidiary (called CRIF Solutions India) – which focuses on consulting, analytics and products and the other is the credit bureau where it has major ownership (CRIF Highmark) – which focuses on multiple services on retail and commercial side.

Asia

Investors Pour Record $ 735 Million Into Singapore Fintech Deals (Bloomberg), Rated: AAA

Investors poured a record $735 million into financial-technology ventures in Singapore in the first nine months of this year, according to research from Accenture Plc, which analyzed data from CB Insights, Pitchbook and Tracxn.

That’s up 69% from the same period a year earlier and exceeds the $642 million raised in all of 2018, the study found. Investments in payments startups and those in lending made up the bulk of fintech fundraising, accounting for 34% and 20% of the total, respectively. Insurance technology deals comprised 17%.

MENA

Region’s P2P lending platform Beehive funds first SME in Bahrain (Statup MGZN), Rated: A

Beehive, the region’s first regulated peer-to-peer lending platform announces that it has funded its first SME in Bahrain.

The funding was granted to Bahrain-based Mira Packaging Factory, which manufactures disposable cups in addition to other food packaging solutions for the GCC, and the African F&B industry.

Canada

FinTech adoption in Canada has increased from 18% to 50% since 2017, according to the EY Global FinTech Adoption Index 2019. Among the reasons driving consumers to FinTech services are better rates and fees (42%), ease of setting up an account (19%) and more innovative products and services (10%).

Authors:

George Popescu
Allen Taylor

The post Thursday October 17 2019, Weekly News Digest appeared first on Lending Times.

Thursday September 12 2019, Weekly News Digest

bank technology

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-4 Trust. Stripe debuts corporate credit cards. College Ave completes $300M securitization of private student loans. Yirendai issues earnings results. Today’s main analysis: Deregulating Fannie and Freddie (A MUST-READ REPORT FROM THE U.S. TREASURY). Today’s thought-provoking articles: Average FICO scores hit […]

The post Thursday September 12 2019, Weekly News Digest appeared first on Lending Times.

bank technology

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-4 Trust (Yahoo! Finance), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-4 Trust (“SCLP 2019-4”). This is a $465 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-4

Class

Preliminary Rating

Class Principal

A

AAA (sf)

$360,000,000

B

AA+ (sf)

$29,500,000

C

A+ (sf)

$47,500,000

D

BBB+ (sf)

$28,000,000

OnDeck CEO Noah Breslow to Deliver Keynote Address at 2019 LEND360 Conference (GuruFocus), Rated: A

OnDeck today announced that Chairman and CEO Noah Breslow will be a keynote speaker at the LEND360 Conference in Dallas, Texas on Thursday, September 26, 2019. Mr. Breslow will discuss industry trends in alternative data and how they are improving many aspects of online lending to small businesses.

Case activity for On Deck Capital, Inc. vs Beautyshea, LLC on Sept. 9 (Pennsylvania Record), Rated: B

‘Judgment Entered For $6,593.50 On 09-09-2019 236 Notice Of Judgment Sent 09-09-2019’

Payments giant Stripe debuts a credit card in its latest step into the financing fray (TechCrunch), Rated: AAA

Last week, when the popular payments startup Stripe made some waves with its first move into money lending through the launch of Stripe Capital, we reported that the company was also soon going to be launching a credit card. Now, that news is official. Today, the company is doubling down on financing with the launch of corporate cards for business customers.

College Ave Student Loans Completes $ 300 Million Securitization of Private Student Loans (Crowdfund Insider), Rated: AAA

Student loan marketplace, College Ave Student Loans, announced on Tuesday it has completed a $300 million securitization of private student loans, its third securitization and largest to date. According to College Ave, the transaction was oversubscribed attracting a broad and diverse group of repeat investors and new participants. Barclays and Goldman Sachs were joint lead underwriters on the transaction with Barclays serving as structuring agent and sole bookrunner.

The Deregulation of Fannie and Freddie; Rate Cuts; “Full Stack” Banks (PeerIQ), Rated: AAA

This week, the Trump administration released their long awaited housing finance plan that will privatize Fannie Mae and Freddie Mac.

The plan would require a significant recapitalization – up to $180 Bn.

Read the full report here.

Source: Federal Reserve, PeerIQ

Average FICO score hits all-time high (CNBC), Rated: AAA

For the first time, the average national credit score has reached 706, according to FICO, the developer of one of the most commonly used scores by lenders.

Source: CNBC

U.S. Consumer Debt Surges on Jump in Credit-Card Balances (Bloomberg), Rated: A

U.S. consumer borrowing swelled in July by the most since late 2017 as Americans carried larger credit-card balances to fund both everyday and online purchases.

Total credit rose by $23.3 billion from the prior month, exceeding all estimates in a Bloomberg survey of economists, Federal Reserve figures showed Monday. Revolving debt outstanding increased by $10 billion, also the most since November 2017, while the growth of non-revolving credit was little changed from a month earlier.

Kabbage Launches New Small Business Revenue Index (Crowdfund Insider), Rated: A

Global financial service platform Kabbage announced this week the launch of its new Small Business Revenue Index. According to Kabbage, the index has two million live data connections the platform maintains across its customer base of more than 200,000 small businesses.

The Current State of the Small Business Lending Sector (Lend Academy), Rated: AAA

The companies that I view as pioneers in this space are Kabbage and OnDeck.

Although Kabbage and OnDeck were early to small business lending there are many other names in this space with varying models and scale including Funding CircleStreetsharesFundboxBlueVineBiz2CreditFundation and Credibly to name a few. LendingClub also has a small business lending operation but they primarily work with partners Funding Circle and Opportunity Fund today to originate these loans.

The Challengers of Small Business Lending

Probably the most recognizable name is PayPal and the Working Capital product which, according to deBanked, has surpassed OnDeck in small business lending volume.

Patriot Financial leads $ 15 million round for Numerated (American Banker), Rated: A

Numerated, the loan technology company that incubated inside Eastern Bank and spun off on its own in May 2017, has raised $15 million from bank investment fund Patriot Financial Partners. Existing investors Venrock, Fintop Capital and Hyperplane also joined the round.

TBF Financial Buys $ 60 Million in Commercial Debt from Major Online Lender (PR Newswire), Rated: A

TBF Financial purchased nearly $60 million in non-performing loans from a major online small business lender in recent transactions, CEO Brett Boehm announced today.

TBF bought the pools of post-charge-off loans as the highest bidder in transactions arranged through multiple brokers. In most cases, the company purchases directly from alternative lenders, equipment leasing companies and banks.

LendingTree Ranks the 50 Most Expensive Towns in America (NewKerala), Rated: A

No. 1 Vineyard Haven, Mass.

Total population 17,321
Median individual income $39,045
Median home value $674,600
Affordable housing costs for a median income earner $911
Calculated mortgage payment for a median priced home $2,767
Median rent payment $1,441
Home affordability deficit -$1,856
Rent affordability deficit -$530

The DeFi trend is accelerating and gaining acceptance, with Coinbase joining the fray. The leading brokerage has created the Coinbase Bootstrap Fund, to boost DeFi projects. Coinbase will invest in two projects, the Compound crypto lending scheme, and the dy/dx crypto derivative exchange.

The 30-somethings guide to creating passive income (Ladders), Rated: A

You might not have $30,000 saved up to buy a rental property right now, but do you have $500? The beauty of REITs like DiversyFund is you can start investing for the amount of money you might drop on a new pair of shoes.

There are public and private REITS as well as funds classified as real estate crowdfunding. Compare your options and find the best one that works for you.

PeerStreet Named CRETech 2019 Real Estate Tech Award Winner (Crowdfund Insider), Rated: B

Real estate investment platform PeerStreet announced on Tuesday it won first place in CRETech’s 2019 Real Estate Tech Awards (RETAs for the Information & Intelligence – Crowdfunding category.

Zillow chooses Impac Mortgage COO Rian Furey to lead mortgage expansion (Housingwire), Rated: B

Zillow announced Monday that it is naming Rian Furey president of Zillow Home Loans.

Balboa Capital Continues Accelerated Growth, Adds 125 New Employees in First Half of 2019 (Yahoo! Finance), Raated: A

Balboa Capital, an online lender that specializes in equipment financing and small business loans, hired 125 new employees during the first six months of 2019 to accommodate the company’s rapid increase in new business and acquisition of several new strategic partners.

United Kingdom

Why crowdfunding may not be the great democratising force in investment after all (The Conversation), Rated: AAA

The digital revolution has had a huge impact on the way new and small companies are financed – and crowdfunding has been at the forefront.

Initially, crowdfunding brought great optimism that it would have a “democratising effect” on finance. On the one hand it would enable entrepreneurs excluded from traditional sources of finance to attract funding. And, on the other, it would provide new opportunities for people with even relatively modest amounts of money to invest. For example, private investors looking for higher returns than those available with high street banks have been attracted to various lending platforms – also known as peer-to-peer (P2P) platforms.

Sonovate raises £110m to drive invoice finance (Fintech Futures), Rated: A

Finance tech provider Sonovate is looking to expand internationally and deploy more working capital to SMEs and mid-market businesses after raising £110 million, reports Jane Connolly.

Spotcap find 77% of SME brokers are upbeat about Brexit (AltFi), Rated: A

Over three-quarters of commercial finance intermediaries in the UK expect the number of loans they broker to increase after Brexit, with more than half saying the number will rise “by a lot”.

In July Berlin-based online lender Spotcap asked 132 UK brokers, accountants and advisers about the future of SME finance in the UK, the results of which it published today as part of a report entitled The State of Commercial Finance in the UK.

FCA urges firms to prepare for no-deal Brexit and launches helpline (P2P Finance News), Rated: A

FIRMS should prepare for the possibility of a no-deal Brexit, says the Financial Conduct Authority (FCA), as it launches a dedicated helpline for businesses.

The City watchdog, which oversees the peer-to-peer lending market as well as the rest of the financial servcies sector, says firms who have not prepared appropriately for the UK leaving the EU without a deal may see an impact on their business.

Foreign firms eyeing P2P market entry (P2P Finance News), Rated: A

REGULATORY consultancy Bovill has reported a steady stream of interest from new entrants to the peer-to-peer lending market, particularly from overseas firms.

Brown attributed the slowdown to the fact that P2P is a more mature market, meaning there was “less of a gold rush” for new players.

H&M extends Klarna ‘buy now, pay later’ service to the UK (Fashion United), Rated: B

Swedish fast-fashion giant H&M has extended its partnership with payment provider Klarna to the UK market, offering Brit shoppers the option to ‘buy now, pay later’.

New SME services added to Starling Bank’s marketplace (AltFi), Rated: B

Digital Risks is an insurance provider for small and medium-sized digital businesses, including cover for specific threats like commercial legal protection, cyber security, management liability, employers liability, public liability and professional indemnity.

While CyberSmart is a platform for SMEs to identify digital weaknesses and achieve their Cyber Essentials Certification, the government-backed accreditation for companies looking to protect against cyber threats.

China

Yirendai (NYSE:YRD) Issues Earnings Results (Mayfield Recorder), Rated: AAA

Yirendai posted its earnings results on Tuesday, September 3rd. The technology company reported $0.24 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.48 by ($0.24), Morningstar.com reports. Yirendai had a return on equity of 32.93% and a net margin of 15.30%. The firm had revenue of $322.89 million for the quarter.

LexinFintech Secures $ 300 Million Private Placement of Convertible Notes with PAG (Crowdfund Insider), Rated: A

Chinese consumer financing platform LexinFintech announced on Wednesday it has entered into a convertible note purchase agreement with PAG issue and sell convertible notes in an aggregate principal amount of $300 million through a private placement. 

IceKredit Raises $ 47M in Pre-Series C Funding (FINSMES), Rated: A

IceKredit, Inc., a Los Angeles, CA and China-based credit risk and credit management company, raised $47m in pre-Series C funding.

These Chinese Online Lenders Are Not For the Weak at Heart (GuruFocus), Rated: A

Beijing-based online lender Yirendai (NYSE:YRD) and Shanghai-based Paipaidai, or PPDAI Group (NYSE:PPDF), shares have been pummeled down to their lowest levels in the past year. Yet aside from receiving credit lines from large Chinese institutions amid China’s crackdown on fraud lending in their industry, both lenders appear to remain in a healthy state.

PPDAI — the older and bigger of the two lenders — came out strong in its recent quarter, beating earnings expectations. The $1.2 billion online lender reported it had 29% year-over-year growth in loan origination volume to $3 billion, compared to just 1.6% growth a year earlier.

Hexindai Announces Support For Regulators’ Decision to Include P2P Platforms in Central Bank’s Credit System (Crowdfund Insider), Rated: B

Chinese peer-to-peer lending platform Hexindai (NASDAQ: HX) announced on Tuesday its support for the decision by industry regulators to include the country’s P2P platforms in the central bank’s credit system. The online lender reported that it believes this as a positive move for the P2P industry.

Sequoia-Backed P2P Lender Huobank Collapses As Beijing Mops Up Online Finance Risks (China Money Network), Rated: A

European Union

Banks raise concerns ahead of ECB meeting (Irish Examiner), Rated: A

The president of Germany’s powerful savings banks association, community lenders that dominate the country’s shopping streets, joined Dutch bank ING yesterday in criticising the ECB’s loose monetary policy.

Its 50 million customers have increased their savings by almost 5% since last year to €965bn which is roughly the size of the Dutch economy. With lending amounting to about €860bn, the banks are left with a chunky unused surplus.

Fintech Europe Selects Eight Startups for its Fourth Batch (Yahoo! Finance), Rated: B

Fintech Europe, Plug and Play’s fintech-focused innovation platform based out of Frankfurt, Germany, announced today the eight startups selected for its fourth batch. The platform has grown its partner base to 11 Financial Institutions since its inception in May 2018. Together with Deutsche Bank, TechQuartier, BNP Paribas, Nets Group, UniCredit, Aareal Bank, Abanca, Danske Bank, DZ Bank, Elo, and Finablr, it runs two 12-week innovation programs a year.

CashDirector 

CashDirector SA is a technology company providing SMEs and banks with a Digital CFO integrated with on-line banking, helping with SMEs manage cash flow and accessing financing.

Credit Kudos

Credit Kudos is a credit bureau that uses financial behaviour to measure creditworthiness.

International

Technology Is Banks’ New Battleground (WSJ), Rated: AAA

European banks are spending vast sums on technology—but it may not be enough to defend against the incursions of bigger, richer American rivals.

U.S. lenders already dominate investment banking in Europe. The big risk for the continent’s banks is that slicker tech could give their American rivals a platform to make gains in lending to companies—the Europeans’ traditional stronghold.

This year, Europe’s banks plan to make technology investments worth in aggregate $77 billion, according to consulting firm Celent. That compares with $105 billion for their U.S. rivals. Faster, more seamless trading systems have long been a priority, but tech spending has shifted across business lines and from back office to front office. It can cover everything from maintaining decades-old systems to cutting-edge artificial intelligence.

Source: Celent

Wirecard Teams Up With Credibly to Digitalize Funding Disbursements (Crowdfund Insider), Rated: A

Germany-based global provider of digital payments and commerce solutions Wirecard announced on Wednesday it is partnering with U.S. business funding fintech Credibly to digitalize funding disbursement. Wirecard claims to be one of the largest issuers of payout cards in the U.S. and is now offering fully digitalize solutions.

PwC to AM industry: disrupt yourself or face extinction (City Wire Selector), Rated: A

The European financial services industry is facing an ‘Amazonisation’ moment, in which those offering consumer-first solutions underpinned by sustainable finance will survive and the others will cease to compete.

That is the headline finding of 52-page report co-authored by PwC Luxembourg and Luxembourg for Finance, which investigated underlying industry trends and indicated that the European market is losing ground on its US and Asian peers when it comes to innovation and assets.

State of the Chain: Five Winning Use Cases for Blockchain in 2019 (U.today), Rated: A

Predictably it was Binance that stole the limelight, with the surprise launch of its eponymous lending platform, which was unveiled on Monday, August 26, and then proceeded to fill its initial lending quota of 200,000 BNB and 10 million USDT in a matter of seconds two days later.

Dharma and Compound have announced new products, while Coinbase has hinted that this will be the next vertical it expands into.

Lenders can enjoy annualized interest of up to 15%, which is significantly better than the negative rates they are currently offered on fiat savings and on negatively yielding government bonds.

Australia

Hopes fintech inquiry will ‘validate’ bank competitors (The Sydney Morning Herald), Rated: A

On Wednesday New South Wales senator Andrew Bragg successfully moved to secure a senate committee inquiry into the fintech and regulatory technology spaces, paving the way for a year-long review into how competitive Australia is in these sectors.

Chief executive of small business lender Lumi, Yanir Yakutiel, said the inquiry should focus on expanding the regulatory sandbox program, which is designed to help early stage fintechs test their ideas.

India

Five Ways Artificial Intelligence Is Instigating Paradigm Shift In Online Lending Space (Via.news), Rated: AAA

Currently, digital lending accounts for around 15% to 20% of the total lending market and could surpass 50% in coming years.

Asia

Chinese P2P Lending Companies Ventures to Vietnam (LearnBonds), Rated: AAA

This business model boomed in China, but following a regulatory clampdown by authorities on risky financial practices, the number of fintech and peer-to-peer (P2P) lending platforms in the country dropped from about 1,900 a year ago to just 900 in May.

It now appears that some of these Chinese P2P lending companies have not necessarily disappeared. They simple ventured into new markets and in particular Vietnam.

According to the State Bank of Vietnam (SBV), there were 40 peer-to-peer lending companies operating in Vietnam as of March. Of these, 10 companies are from China.

MENA

The opportunity of peer-to-peer lending in Lebanon (Executive Magazine), Rated: AAA

Through conversations with Lebanese entrepreneurs, business owners, bankers, and politicians, I have had a number of eye-opening discussions into the challenges and opportunities faced by Lebanon’s SME ecosystem. Given the country’s long-standing tradition in financial services and its large banking sector, I believe fintech—with solutions such as peer-to-peer lending, machine learning to personalize insurance solutions, and the use of artificial intelligence for wealth management—stands as a serious contender to unlock the funding challenges faced by Lebanon’s SMEs.

Latin America

SoftBank in talks to invest in Latam venture capital funds (Reuters), Rated: AAA

Japan’s SoftBank Group Corp (9984.T) is in talks with venture capital firms in Latin America to invest hundreds of millions of dollars in their funds, a move likely to speed up spending of a $5 billion regional venture capital fund, three sources with knowledge of the matter said.

So far, SoftBank has only announced direct investments using the fund’s resources, injecting capital into Colombian delivery app Rappi, Brazilian lender Creditas, gym membership app Gympass and Mexican payments firm Clip, for instance.

Proptech Flat raises US$ 4.5 million pre-seed round led by ALLVP (Contxto), Rated: A

Contxto – Not only is the Mexican real estate industry huge but also outdated with many inefficient processes. Counteracting this, a new Mexican startup, Flat, recently raised US$4.5 million in one of Mexico’s largest pre-seed rounds ever.

Africa

Nigerian online-only bank startup Kuda raises $ 1.6M (TechCrunch), Rated: AAA

Nigerian fintech startup Kuda — a digital-only retail bank — has raised $1.6 million in pre-seed funding.

Canada

Peer to Peer Lender Lending Loop Tops $ 50 Million in Loans (Crowdfund Insider), Rated: AAA

Canada’s first peer to peer lending platform for SMEs, Lending Loop, has topped CDN $50 million in loans, according to a post by Brendon Vlaar, co-founder and CTO of the company. Lending Loop provides investment opportunities in debt-based securities to both accredited and non-accredited investors.

PayBright Raises $ 34M in Growth Equity Financing (FINSMES), Rated: A

PayBright, a Toronto, Canada-based fintech company, received a $34m equity investment from goeasy.

Authors:

George Popescu
Allen Taylor

The post Thursday September 12 2019, Weekly News Digest appeared first on Lending Times.

Thursday August 29 2019, Weekly News Digest

VC-backed fintech

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

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

VC-backed fintech

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

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

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

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

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

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

2019-P2

Class

Preliminary Rating

Initial Class Principal

A

A+ (sf)

$200,700,000

B

A- (sf)

$37,900,000

C

BB (sf)

$49,200,000

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

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

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

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

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

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

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

Key findings

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Business Insider

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

Source: Business Insider

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

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

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

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

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

Know Your Money data revealed that:

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

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

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

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

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

European Union

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

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

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

Source: Business Insider

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

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

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

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

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

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

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

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

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

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

International

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

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

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

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

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

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

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

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

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

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

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

Australia/New Zealand

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

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

2019 Finder Awards winners (Finder), Rated: AAA

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

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

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

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

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

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

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

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

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

Source: Business Insider

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

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

Canada

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

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

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday August 1 2019, Weekly News Digest

Consumption loans

News Comments Today’s main news: OnDeck, Chase divorce; OnDeck to pursue bank charter. DBRS assigns provisional ratings to Upstart Securitization Trust 2019-2. RateSetter ISA passes 250M GBP in subscriptions. Iwoca doubles lending, turns first annual profit. Nubank raises $400M. Elevate Credit CEO resigns. Today’s main analysis: What the Fed rate cut means. Today’s thought-provoking articles: […]

The post Thursday August 1 2019, Weekly News Digest appeared first on Lending Times.

Consumption loans

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

OnDeck Pursuing Bank Charter, Loses Chase (Lend Academy), Rated: AAA

OnDeck had some pretty interesting updates in their earnings release which took place earlier today (Editor: July 29).

Probably the biggest shock was that Chase is concluding their partnership with OnDeck.

Chase will stop originating loans through OnDeck and OnDeck will continue to service the loans for two years.

You can view OnDeck’s Q2 earnings press release here.

Source: Lend Academy

What’s next for OnDeck after breakup with JPMorgan? (American Banker), Rated: A

In retrospect, Jamie Dimon’s comment that his bank could duplicate the capabilities of online lenders might have served as a warning.

“Can we do something like that? Of course we can,” the JPMorgan Chase Chairman CEO 

OnDeck shares slide 22% (Biz2Credit Email), Rated: B

Shares of OnDeck (According to industry expert Biz2Credit CEO Rohit Arora, OnDeck spent a lot of money marketing when they should have focused more on managing risk and developing technology – the two most important things in today’s small business lending environment.

“Their gross write-offs were 15%… and that is in an economy that is doing very well,” Arora said.

DBRS Assigns Provisional Ratings to Upstart Securitization Trust 2019-2 (DBRS Email), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes (collectively, the Notes) to be issued by Upstart Securitization Trust 2019-2 (UPST 2019-2):

— $230,208,000 Class A Notes at A (low) (sf)
— $61,558,000 Class B Notes at BBB (low) (sf)

Source: DBRS

Read the DBRS Presale Report here.

KBRA Assigns Preliminary Ratings to Upstart Securitization Trust 2019-2 (BusinessWire), Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Upstart Securitization Trust 2019-2 (“UPST 2019-2”). This is a $358.4 million consumer loan ABS transaction that is expected to close on August 7, 2019.

Preliminary Ratings Assigned: Upstart Securitization Trust 2019-2

Class

Preliminary Rating

Expected Initial
Class Principal

A

A- (sf)

$230,208,000

B

BBB- (sf)

$61,558,000

C

BB- (sf)

$66,617,000

Europe’s startup banks are coming to America. Can they succeed? (CNN), Rated: AAA

Two of Europe’s most popular online banks are making a big push into the United States. But they may struggle to win over consumers.

Berlin-based N26 and its UK rival Monzo have signed up millions of young professionals in Europe by offering free accounts that can be opened in minutes via smartphones.
Critics say the startup European banks remind them of American online-only banks that sprang up and then disappeared during the dot-com boom.

Netflix for banking; Equifax settles (PeerIQ), Rated: AAA

But first, in industry news, Equifax settled $700 million with state and federal authorities due to the 2017 security breach. Investors are looking past the incident. Equifax’s stock price is within earshot of an all-time high.

“Netflix” Model for Banking

MoneyLion’s “all-you-can-eat” membership pricing model has distinguished itself from the pack. MoneyLion provides customers access to financial advice, loans, and other banking service. Customer’s can enjoy the lion’s share of offerings all at a bundled rate $20/month.

The near-Unicorn FinTech announced a roaring $100 M funding round led by Edison Partners and Greenspring Associates, bringing PIC to ~$200M. MoneyLion is looking to invest in broker dealer, training, and stock-investing capabilities and further distance itself from potential copycats.

Series Money Raised Valuation Services Provided
MoneyLion C $200M ~$1B Financial advice, loans, integration of other bank accounts
Chime D $309M $1.5B Debit, checking, and savings accounts with no fees
Acorn E $270M $860M Rounds up purchases and invests the change, financial education
Betterment E $275M $800M Robo-advising, savings, checking (soon), debit cards

Source: PeerIQ

Here’s what that Fed rate cut means for you (CNBC), Rated: AAA

The Federal Reserve’s decision to cut interest rates 25 basis points for the first time in over a decade marked a dramatic shift in monetary policy.

Now, interest rates are historically low, which leaves the central bank with little wiggle room in the event of a recession or if the economy stumbles. The current target range for its overnight lending rate is 2% to 2.25%.

In the past five years, the average interest rate charged on credit card debt has increased 35%.

Considering that the average household currently owes $8,390, credit card users would save roughly $1.5 billion in interest as a result of a quarter-point rate cut, a separate report by WalletHub found.

Elevate Credit CEO Resigns as Q2 Revenue Misses, Guidance Cut (Crowdfund Insider), Rated: AAA

Elevate Credit (NYSE: ELVT) announced the exit of CEO Ken Rees today a Q2 earnings release missed on top-line numbers and the Fintech lowered guidance for Q3. Current COO Jason Harvison was selected to be interim CEO as the firm seeks a full-time replacement. Rees will remain on the Board of Directors.

Japanese Online Retailer Rakuten Seeks U.S. Bank Charter (WSJ), Rated: A

Japanese online merchant Rakuten Inc. wants to open a bank in Utah to offer loans, credit cards and other financial services to customers of its existing U.S. cashback-shopping business, the company said Friday.

“We’re going to focus on that customer base we already have,” said Lee Carter, the new head of banking development at Rakuten and a former UBS Group AG executive. “That’s really the community that we want to extend additional financial services to.”

My Company Surpassed $ 7 Billion in Business By Investing in This 1 Thing (Inc.),Rated: A

In the early days of my company, Kabbage, we struggled against requests from some potential partners. They wanted customers to be able to upload traditional loan paperwork like bank statements and tax returns.

By insisting on data connections, which in 2008 was usual, we lost some potential upfront revenue but prioritized a unique customer relationship and experience that would make us a more than $7 billion lending platform just a few years later.

Online bank Green Dot reveals savings account with a rate 30 times the national average (CNBC), Rated: A

Branchless bank Green Dot is launching the highest yielding bank account in the industry.

The Pasadena, California-based bank, which gained traction with prepaid cards in the dot-com era, launched a new bank account Tuesday with 3% annual interest on savings, and 3% cash back on all online debit card purchases. The average rate for savings accounts, according to Bankrate.com, is 0.1%.

The 3% rate on a savings account is the highest for any bank in the country, according to Bankrate.

The Story of Rocket Loans and the Rebirth of Detroit (Lend Academy), Rated: A

I was in Detroit recently at the invitation of Rocket Loans CEO, Bill Parker. I do visits to fintech companies quite regularly but usually in the big hubs of New York, San Francisco or London. This was my first visit to Detroit for a couple of decades so I was excited to see how the city had changed. And you can’t really tell the story of Rocket Loans without also talking about the city of Detroit.

Quicken Loans is the crown jewel of the financial component of Rock Ventures. It is now the largest mortgage lender in the country, bigger than even the largest banks. They seem to be slowly moving away from that brand, though, and moving to Rocket Mortgage which has a much more modern and innovative feel.

BofA terminates First Data partnership (Finextra), Rated: A

Bank of America is to terminate its merchant services partnership with First Data when the ten-year contract expires in June 2020.

The news came within hours of Fiserv acquiring control of First Data, sending its shares downward.

BofA says it expects to incur an impairment charge of about $1.7 billion to $2.1 billion in Q3 2019 due to the termination of the partnership, which started in 2009.

Open Banking Takes On Bad Rap Of Merchant Cash Advance (PYMNTS), Rated: A

The merchant cash advance is considered the payday loan for many in the small business lending market — and that’s not necessarily a good thing. While designed to connect small business owners to quick capital for a boost to their cash flow, the MCA has earned a reputation for some predatory behavior, like sky-high interest rates and fees.

Man Repeller and Klarna Collab on “Dream Closet” Pop-Up at Showfields (Sourcing Journal), Rated: A

Fashion and lifestyle blog Man Repeller is taking operations offline through a pop-up retail collaboration with Klarna. Opening at Showfields in New York on Monday, the “highly instagrammable” retail space was crafted to represent a shopper’s “dream closet,” Man Repeller said in a statement. Curated by the Man Repeller team, the temporary store includes offerings…

Visa pitches a program offering fintechs faster market access through an ecosystem of partners (TechCrunch), Rated: A

Visa is pitching a new way for startups in the fintech space to get to market faster by using its rails and a group of pre-approved partners.

Chiefly, the process makes it easier to integrate with Visa. It’s an attempt to put the payment processor’s network, VisaNet, at the center of a vast array of services ranging from payroll to business to business payments and online banking, online lending and even digital wallets.

The Most Exciting Piece Of Opportunity Zone Investing Is Still Being Defined (Benzinga), Rated: A

Despite the enthusiasm they have received from the private equity world and the billionaire hedge fund set, a majority of investors have been mostly shut out of the conversation surrounding the Opportunity Zones initiative included in the 2017 Tax Cuts and Jobs Act.

Although there is already a flood of capital being funneled into qualified funds (upward of $40 billion according to the National Council of State Housing Agencies’ Opportunity Zone Fund Directory) Opportunity Zones remain an ongoing experiment in maximizing the benefit to both investors and the communities in which they invest.

According to Thomas McDonald, Investment Product and Portfolio Manager of the online real estate investing platform CrowdStreet, the new language is a critical move for the program.

Real estate lending platform Groundfloor raises $ 3 million through crowdfunding (Housingwire), Rated: A

Groundfloor, a real estate lending platform that raises its loan funds via crowdfunding from the public, announced Wednesday it raised $3 million from 1,580 investors, while also doubling its annual revenue in the second quarter of 2019.

Groundfloor is taking private real estate lending public (Groundfloor Email), Rated: B

As we close out the first half of the year, we’re excited to report accelerating growth and strong financial results for the quarter. Once again, GROUNDFLOOR more than doubled its year-over-year revenue for the quarter to $1.6 million, 1H revenue to $2.6 million and trailing 12-month revenue to $4.4 million.

OCC’s innovation pilot gets little love from banks (American Banker), Rated: A

The OCC received 19 comment letters on a pilot program announced in April meant to provide supervisory clarity as national banks pursue “novel activities” in which regulatory uncertainty is perceived to be a barrier to development.

Melissa Koide of FinRegLab (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is Melissa Koide, the founder and CEO of FinRegLab. They have just published their first research report this week on the use of cash flow data in underwriting. It is the first independent research done on this topic and it is milestone for both FinRegLab and the fintech community.

Zerocard aims to reduce overspending with “debit-style” credit card and rewards (CNBC), Rated: A

Fin-tech company Zero announced on Tuesday, July 30, the public release of Zerocard, a credit card providing a “debit-style experience” issued by WebBank and backed by Mastercard.

Zerocard aims to be an alternative to credit cards from big banks that make money off cardholders who fall into debt.

Genesis Reports $ 746 in Crypto Lending/Borrowing Originations in Q2: Best Quarter Ever (Crowdfund Insider), Rated: A

Genesis, a digital asset trading and lending platform that is also a broker-dealer registered with FINRA, and a BitLicense holder with the New York State Department of Financial Services, reports that its services are booming.

According to a release from last week, Genesis’ Q2 performance was the best over as it topped $746 million in loans/borrowing – a 48% quarter over quarter increase.

Genesis states that total active loans increased to $454 million – a 149% increase over Q1.

Northwest Community Credit Union Short-Term Loans, Powered by QCash Financial’s Platform  (Yahoo! Finance), Rated: A

Headquartered in Eugene, Oregon, Northwest Community Credit Union (NWCU) launched two new products earlier this year called Northwest Cash and Northwest Cash Plus, offering short-term loans from $150 to $700 and $701 to $4,000, respectively. Both products are designed to help their members deal with unexpected cash needs with an easy to use application process.

Using QCash Financial’s white-label, digital lending platform, NWCU automated the loan process using the member’s credit union relationship to make the lending decision rather than credit history.

Kony Secures $ 37 Million in Financing from BMO (Finovate), Rated: B

An infusion of $37 million in debt financing from BMO will help cloud-based digital banking and low-code platform company Kony “accelerate growth” in its two signature solutions: Kony DBX, the company’s digital banking technology, and Kony Quantum, its low-code development platform. The financing, courtesy of BMO’s Technology and Innovation Banking Group, adds to the more than $115 million in funding Kony has raised to date.

White Oak Commercial Finance Responds to Increasing ABL Demand with New Key Hires (GlobeNewswire), Rated: B

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today the addition of two new professional underwriters, further increasing the company’s originations presence across the United States. Mr. Sudhir Chaudhry joins White Oak’s Los Angeles office bringing nearly 25 years of structured finance and underwriting experience. Mr. Kevin Maitland joins White Oak in Boca Raton with over 14 years of asset-based lending and commercial banking experience.

FINICITY INTEGRATION WITH ELLIE MAE ENCOMPASS DIGITAL LENDING PLATFORM NOW LIVE  (Finicity), Rated: B

Finicity, a provider of real-time financial data access and insights, and Ellie Mae, the leading cloud-based platform provider for the mortgage finance industry, today announced that Finicity’s digital Verification of Assets (VoA) solution is now available through Ellie Mae’s Encompass Digital Lending Platform.

United Kingdom

RateSetter ISA passes £250m in subscriptions (LoveMoney), Rated: AAA

But by investing within a large, diverse portfolio of loans (RateSetter’s portfolio is currently £875 million with 250,000+ loans) investors get the stability of scale and this makes for steady and predictable returns.

And putting this inside the ISA tax-free wrapper, it’s no wonder that in less than 18 months since launch, RateSetter’s Innovative Finance ISA has attracted more than £250 million of investments from people looking to put their money to work.

Platforms may be forced to favour high net worths due to incoming 10pc rule (P2P Finance News), Rated: AAA

RETAIL investors are at risk of being shut out of the peer-to-peer lending sector due to the so-called 10 per cent rule that will come into force this December.

However, a number of P2P lending platforms have a minimum investment of £1,000, which would mean that individuals must have at least £10,000 in total to invest across a variety of asset classes. Official statistics indicate that most UK adults do not have this amount of money to invest, which could effectively bar them from certain platforms.

P2P lenders such as Zopa, Funding Circle and ThinCats require a minimum investment of £1,000, but the FCA’s latest financial lives survey shows that 49 per cent of UK adults, equating to 25 million people, either have no such assets or have less than £10,000 in value.

Iwoca doubles lending, turns first annual profit (AltFi), Rated: AAA

Iwoca almost doubled its loans last year, leading to its first annual profit since the small business platform was founded eight years ago.

The London-based fintech, started by chief executive Christoph Rieche (pictured, centre) and James Dear in 2012, said loan originations jumped by 91 per cent to £325m, as its lending hit the equivalent of 12 per cent of the UK’s small business overdraft market over the last year.

Former RateSetter executive to launch new P2P platform (P2P Finance News), Rated: A

RATESETTER’S former chief technology officer John Gillespie is preparing to launch a “next generation” peer-to-peer consumer lending platform.

After raising money from family and friends, SquareDeal.Finance has opened pre-registration for a funding round on equity crowdfunding platform Seedrs.

Gillespie has described the platform as “the next generation P2P consumer lender”, although he said there would be scope to expand into other types of finance in the future.

Digital asset lending platform outlines new framework in a bid to resemble securities market (The Trade Crypto), Rated: A

A digital asset lending platform is looking to set new industry standards with the launch of a framework using master agreements typically seen from incumbent capital markets bodies.

The Global Digital Assets Lending Agreement (GDALA) was developed by Lendingblock, with legal counsel and support from Norton Rose Fulbright.

The platform, targeting institutional investors, will use master agreements framework similar to ISLA’s Global Master Securities Lending Agreements, ICMA/SIFMA’s Global Master Repurchase Agreements and ISDA’s Master Agreements.

What to Know About Alternative Lending (Nav), Rated: A

Alternative lending includes business lenders that exist outside of the traditional lending space. The different types of alternative lending these lenders provide include short-term business loans, medium-term business loans, lines of credit, invoice financing, equipment financing, merchant cash advances and more. They don’t typically include bank loans or SBA loans.

ARBUTHNOT SPECIALIST FINANCE STRENGTHENS TEAM WITH TWO NEW APPOINTMENTS (Arbuthnot Latham), Rated: B

Arbuthnot Specialist Finance (ASFL) announces the appointment of Chloe Skae and Molly Markey to the relationship management team.

OakNorth completes loan to Kexgill for latest student accommodation development at the University of Hull (Fintech Finance), Rated: B

Fintechs invited to enter £2m affordable credit challenge (P2P Finance News), Rated: B

THE TREASURY and innovation foundation Nesta Challenges are offering £2m in prize money to encourage fintechs and community lenders to work together on affordable credit solutions.

Over 5.4 million high-cost short-term credit loans were made in the year to 30 June 2018, according to the Financial Conduct Authority’s consumer credit data.

China

China’s Generation Z Is Hooked on Credit (Bloomberg Businessweek), Rated: AAA

At one point in June last year, Zeng Jinpeng was more than 10,000 yuan ($1,500) in debt to a smartphone app.

Formal household borrowing rose to 54% of gross domestic product in the first quarter, up more than 4 percentage points in a year. China’s ratio is still lower than that of the U.S. (66%), Hong Kong (72%), or South Korea (100%), according to S&P Global.

Source: People’s Bank of China

Regulators last year launched a crackdown on peer-to-peer lending, which besides being a source of easy credit had also become a popular investment vehicle. The sector has shrunk to less than half its peak size as a result of forced shutdowns. Official data showed that almost 70% of China’s 50 million P2P investors were younger than 40.

New era of technological finance faces spectrum of challenges (Global Times), Rated: A

Online attacks against China’s peer-to-peer (P2P) platforms have been rising. An industry report released on Wednesday shows that more than 10 million malicious attacks were encountered by the online financial sector in the first half of 2019, and gambling-related attacks accounted for over 56 percent.

China Lending Arranges Partnership With Zhong Lian in Consumer Financing (CapitalWatch), Rated: A

China Lending Corp. (Nasdaq: CLDC) announced Monday its five-year strategic partnership with Zhong Lian Jin An Insurance Brokers Co. Ltd. in the development of consumer financing and litigation guarantee business, sending its shares up 4 percent intraday to 88 cents apiece.

European Union

Is ‘Hodling’ the Future of Cryptocurrency Lending? (150sec), Rated: AAA

The nascent cryptocurrency sector is renowned for its volatility.  It’s very early days in the development of the industry and with that, various niches are emerging within its overall purview.  DeFi or decentralised financing is one such area.  Over many years, the world of retail and business sector lending has seen little in the way of disruption.  However, that may be in the process of changing.

Firms like Ripio Credit Network (RCN), Salt Lending, EthLend, and WeTrust are emerging, providing their unique twists on financing with blockchain as a basis to their respective propositions.  Within Europe too, the market is innovating. Hodl Finance is one such entity – which is harnessing this newly emerging economy to provide its unique take on financing.

Engaging shoppers is hard. Keeping them is harder. (Candy Industry), Rated: A

New research from Klarna, a Swedish firm that offers interest-free installment payments among other payment solutions, suggests shoppers will only tolerate such aggravations for so long.

Through a survey of 2,065 shoppers conducted in May and June, Klarna found 55 percent of consumers say one bad retail experience would stop them from returning to a brand. Nearly 30 percent of consumers said they don’t find shopping as fun as it used to be.

Klarna also noted 39 percent of the 250 retailers surveyed realize shopper loyalty isn’t just driven by rewards programs. Nearly 70 percent understand they have to do more to retain customers, but just over a third of retailers are struggling to keep up with changing consumer expectations because of outdated technology and a short-term emphasis on sales.

International

The Fintech Revolution: Who Are The New Competitors In Banking? (Forbes), Rated: AAA

In Asia, Africa and Latin America, the percentage of unbanked people exceed 60% in all cases. However, people in this segment of the population do own a mobile device.

The massive use of mobile phones has allowed great successes, such as that of M-Pesa in Kenya and ten other African countries, which over the past decade has enabled more than 30 million users to transfer money, take out loans and make deposits using mobile phones, from the remotest rural areas.

The Pulse of Fintech H1 2019 (KPMG), Rated: A

Both the number of global fintech deals and the total global investment in fintech dropped in H1’19, raising $37.9 billion across 962 deals, driven by the lack of  mega deals seen in 2018.

Source: KPMG

Catching attention in marketing (Business Daily Africa), Rated: A

Kiva, with its African headquarters in Nairobi, thrives as a peer-to-peer lending website whereby millions of US dollars get lent from around the world at zero percent interest rates. In 2009, dozens of competitors of Kiva emerged based largely off their business model: get generous individuals to lend their money for a few months up to a few years all while earning no interest return as long as the funds go towards helping entrepreneurs.

Australia

4 small business tips to kickstart the 2019/20 financial year (Mozo), Rated: A

And Australian businesses have access to a number business loan sources including traditional banks and online lenders, although according to online lender OnDeck, some small businesses can have trouble securing funding from traditional sources.

New research from the lender found that nearly 25% of small to medium enterprises (SME’s) that have applied for business finance with a bank have been rejected – a figure that rises to 37% of SMEs which have been operating for less than five years.

India

P2P Lender Rupeecircle launches Affordable Credit Products for Rural Tamil Nadu (IndianWeb2), Rated: AAA

Digital lending marketplace RupeeCircle has set up a segment-wise model of credit disbursement through its P2P platform. Deserving Individuals and families belonging to certain communities who were hitherto declined loans from banks and NBFCs due to lack of sufficient credit history or lack of a proper bank account can now avail loans on the P2P platform.

Asia

Vietnam tech company NextTech pledges US$ 10M fund for early-stage startups (e27), Rated: AAA

Vietnam-based tech company NextTech announces a total of US$10 million injected into Next100, a fund dedicated for backing early-stage startups.

Recently, Next100 invested in VayMuon.vn, a P2P lending platform based in Vietnam, Heyu.asia, a startup that provides order consolidation and shipper services, and Teky.edu.vn, a tech academy for kids.

Latin America

Fintech decacorn Nubank raises $ 400M led by TCV (TechCrunch), Rated: AAA

Brazil-based Nubank, which offers a suite of banking and financial services for Brazilian consumers, announced today that it has raised a $400 million Series F round of venture capital led by Woody Marshall of TCV. The growth-stage fund is best known for its investment in Netflix but has also made fintech a high priority, with over $1.5 billion in investments in the space. According to Nubank, the company has now raised $820 million across seven venture rounds.

Shares in Brazil’s Banco Inter surge as it lures SoftBank (Business Recorder), Rated: A

Shares in Banco Inter SA surged more than 20% on Tuesday as the Brazilian online lender raised 1.25 billion reais ($329.73 million) in an offering largely sold to Japan’s SoftBank Group Corp, boosting pressure on traditional banks.

Africa

Reaching the unbanked — MTN to shake up Nigeria’s fintech sector (the africa report), Rated: AAA

In the latest bullish development, OPay, founded by Norwegian browser company Opera and which includes lead investors such as Sequoia China, raised $50m to partly fund its expansion in Nigeria.

While sub-Saharan Africa’s number of adults with a bank or other financial account increased to 43% in 2017, up 9% from 2014, Nigeria’s banked population dropped to 40%, down 4% from 2014. Over half of Nigerian adults — 60 million people — lack access to financial services.

Under the new mobile-money framework, MTN will drive user acquisition with its large existing subscriber base and powerful agent network. With a 42% market share of Nigeria’s 163m active voice subscriber accounts, MTN has a huge pool of untapped demand as each voice subscriber represents a potential new mobile money account.

Authors:

George Popescu
Allen Taylor

The post Thursday August 1 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 23 2019, Weekly News Digest

young credit card delinquents

News Comments Today’s main news: DBRS assigns provisional ratings to SoFi Consumer Loan Program 2019-3 Trust. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2019-3. Funding Circle seeds shareholder input on wind-down plans for investment trust. TransferWise valuation doubles to $3.5B. Today’s main analysis: High income, super prime borrowers take bigger share of […]

The post Thursday May 23 2019, Weekly News Digest appeared first on Lending Times.

young credit card delinquents

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

DBRS Assigns Provisional Ratings to SoFi Consumer Loan Program 2019-3 Trust (DBRS Email), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes (collectively, the Notes) to be issued by SoFi Consumer Loan Program 2019-3 Trust (SCLP 2019-3):

— $420,000,000 Class A Notes at AAA (sf)
— $31,100,000 Class B Notes at AA (sf)
— $62,500,000 Class C Notes at A (sf)
— $35,600,000 Class D Notes at BBB (sf)

View the full report here.

KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2019-3 (Yahoo! Finance), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Prosper Marketplace Issuance Trust 2019-3 (PMIT 2019-3). This is a $380.99 million consumer loan ABS transaction.

Class Rating Initial Class Principal
A A- (sf) $270,750,000
B BBB- (sf) $51,470,000
C BB- (sf) $39,720,000
D B- (sf) $19,050,000

Millennial DQs on the rise; GreenSky earnings; OCC on a fix for Madden? (PeerIQ), Rated: AAA

US consumer debt rose by 0.9% QoQ in 1Q to $13.7 Tn.

Source: Bloomberg, PeerIQ

Mixed FinTech Earnings

FinTech issuers saw growth in revenues and loans. Pace of loan growth weakened slightly as originations fell at Enova and grew by less than 10% YoY at OnDeck and OneMain. Stock price performance post earnings was mixed. Enova saw its stock price increase by 18% post earnings while OnDeck’s stock price dropped by 16%.

Source: Bloomberg, PeerIQ

High Income and Super Prime Borrowers Taking Bigger Share of Personal Loans on LendingTree Marketplace (Lending Tree), Rated: AAA

Over the past 10 years, the amount of outstanding personal loan debt has increased by 75%.

Key findings

  • The share of personal loan inquiries from those with incomes over $108,000 increased by 77% between the second quarter of 2017 and the first quarter of 2019, while the share of inquiries from people earning over $84,000 increased by 65%.
  • The share of personal loan inquiries from super prime borrowers (740 and higher) increased by 47% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime and super prime borrowers (680 and higher) rose by 36%.
  • The share of personal loans closed by borrowers with incomes over $108,000 on the LendingTree marketplace increased by 38% between the second quarter of 2017 and the first quarter of 2019, and the share of borrowers earning over $84,000 increased by 26%.
  • The share of closed personal loans from super prime borrowers (740 and higher) increased by 37% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime borrowers (680 and higher) rose by 19%.
  • Borrowers with incomes up to $24,000 decreased their share of closed loans by 22%, and those with incomes up to $48,000 decreased their share by 17%.
  • The share of loans closed by borrowers with scores below 560 increased by 28%, but the share of closed loans from borrowers with scores between 560 and 619 dropped by 24%.
  • The share of inquiries from people with incomes up to $24,000 dropped by 27% during the same period, while inquires from those with incomes up to $48,000 dropped by 16%.
  • The share of loan inquiries by borrowers with scores below 560 decreased by 12%, and the share of closed loans from borrowers with scores below 620 decreased by 9.2%.

For example, in the SoFi Consumer Loan Program 2017-3 LLC, securities show that the average gross income of borrowers as of May 2017, was $141,780, with an average FICO score of 731, and an average VantageScore of 682. The most recent offering, reported in February 2019, showed borrowers had an average income of $151,144, an average 753 FICO score, and a 713 VantageScore.

Job Loss and Medical Expenses Leading Causes of Bad Credit (Yahoo! Finance), Rated: AAA

Job loss and medical expenses are the leading factors causing Americans’ credit scores to drop, according to new research by Elevate’s Center for the New Middle Class (CNMC).

According to the new report, 55% of respondents cited job loss or reduction in work hours as the reason why their credit score dipped below 700. Nearly a quarter (24%) cited medical bills as the primary cause. Following these leading factors, a variety of typical, seemingly innocuous expenses follow, including repairing a car (11%), leaving home for the first time (6%), and putting a child through college (5%).

Non-prime consumers are 86% more likely to experience multiple factors that negatively affect their credit score compared to just one. For example, of the 23% who mention a medical reason, about three-quarters (75%) also experienced an income drop, severely complicating their ability to manage and cover medical expenses.

Americans Use Short-Term Loans to Pay Off Debt (Lexington Law), Rated: A

American debt is at an all-time high. How did we manage to dig ourselves into a steep $13 trillion hole? Credit card debt alone accounts for $1 trillion of this debt, with the average balance over $6,000 per capita.

  • 33% of Americans are going into debt to pay off debt
  • Generation X is most likely to incur short-term debt to pay down long-term debt
  • Women who use debt to make other debt payments tend to do so multiple times

Bernardo Martinez of Funding Circle USA (Lend Academy), Rated: A

In this podcast you will learn:

  • The knowledge that Bernardo brought with him from PayPal.
  • What he has learned in his first year on the job at Funding Circle.
  • The range of terms for their small business loans.
  • The types of investors they have on their platform today.
  • How and why 72% of their customers came to Funding Circle first.
  • How their offering compares to what is offered at banks today.
  • Who Bernardo sees as their biggest competitors.
  • How they view the SBA and their loan guarantee program.
  • How the LendingClub partnership came together.
  • Why no other online platform has reached significant scale in term loans for small business.
  • How they expanding their business into Canada.
  • Who they are hiring for their new Denver office.
  • How they are approaching their relationships with regulators in DC these days.
  • How they helped get SB-1235 passed in California.
  • How Funding Circle is monitoring their risk as it pertains to the economic cycle.
  • What is most exciting for Bernardo today at Funding Circle.

How a Silicon Valley startup is trying to rebrand payday loans (Vox), Rated: AAA

Once every few weeks, Myra Haq withdraws $100 or so from Earnin, an app that lets people borrow small sums of money.

The app lets her withdraw up to $100 a day, and never more than what she actually makes in a pay period, and then withdraws the money from her checking account once her direct deposit hits.

Unsurprisingly, payday lenders typically target low-income people — a 2013 Pew report found that 58 percent of people who use payday loans have trouble meeting monthly expenses at least half the time and usually borrow to deal with “persistent cash shortfalls rather than temporary emergencies.”

The average American household with student debt owes almost $48,000, and experts believe that student loan debt has held millennials back from major life milestones like marriage, homeownership, and having children.

How One Company Wants to Reduce or Even Eliminate Your Unpaid Medical Bills (Forbes), Rated: A

Relying on personal savings or insurance may not even be enough to pay off expensive medical bills. As a result, .

Earnin invited some community members to try HealthAid and was able to find savings for about 90% of people.

In one case, Earnin was able to get a patient’s $48,000 bill fully forgiven.

Figure Technologies loan platform secures $ 1B financing facility (CoinGeek), Rated: A

Figure Technologies looks to be profiting from increased interest in the cryptocurrency industry. Specifically, in a press release dated May 9, it was announced that the company had secured a $1 billion line of credit on the Provenance.io blockchain. The agreement also involves two other companies, Jefferies and WSFS Institutional Services, which will provide the line of credit.

LendKey’s Vince Passione on partnering with banks and credit unions and the future of lending as a service (Tearsheet), Rated: A

Vince joins us on the show to talk about his partnership model and the challenges and opportunities of working alongside banks and credit unions, which have deployed more than $2 billion in lending capital on the digital platform.

Small-business fintech launches lending platform for banks (American Banker), Rated: A

Spurred by bank interest, small-business lending platform Biz2Credit has unveiled a software-as-a-service version of its loan management, servicing and risk analytics product.

After HSBC and New York-based Popular Bank contracted with Biz2Credit to use the software, the company decided to launch the platform for all banks to use.

At a cramped desk on the 22nd floor of a downtown Manhattan office building, Gary Roth spotted a looming disaster.

An urban planner with two master’s degrees, Mr. Roth had a new job in 2010 analyzing taxi policy for the New York City government. But almost immediately, he noticed something disturbing: The price of a taxi medallion — the permit that lets a driver own a cab — had soared to nearly $700,000 from $200,000. In order to buy medallions, drivers were taking out loans they could not afford.

Prodigy Finance Aims to Bridge Healthcare Gap with New Loan Offering (University Business), Rated: A

Prodigy Finance today announces it will be supporting international students pursuing Master of Public Health (MPH) and Master of Science in Public Health (MSPH) degrees, Master of Science in Nursing (MSN) degrees, as well as those enrolling in Advanced Standing Dental programs and Select Certificate Dentistry programs in the U.S.

Crypto Lending Startup BlockFi Slashing Interest Rates on Ether Deposits (CoinDesk), Rated: A

Cryptocurrency lending startup BlockFi is almost halving the interest rates it offers on ether (ETH) deposits, while some bitcoin (BTC) rates will increase slightly.

From June 1, customers with 25–100 ETH balances in a BlockFi Interest Account (BIA) will see the interest rate drop from the current 6.2 percent annual percentage yield (APY) to 3.25 percent, the startup announced Tuesday. Those holding over 100 ETH balances will earn just 0.2 percent APY.

Some BTC balances, on the other hand, will see a slight interest rate increase – up to 2.15 percent from the current 2 percent – for deposits of over 25 BTC. Those holding 0.5–25 BTC will continue to earn 6.2 percent APY, BlockFi said.

Find the Right Loan Among 300+ Lending Partners for Credit Card Consolidation and More (CardRates), Rated: A

In a Nutshell: LoanStart helps consumers in search of a loan find a lender that suits their funding needs within just five minutes after submitting a simple, fee-free loan request form. Working securely with more than 300 trusted lending partners, including conveniently located storefront providers, the service makes finding a suitable lender easy. In today’s connected world where loan options abound, LoanStart cuts through the clutter to connect consumers in need of funds with lenders willing to provide financing.

Maxex Closes Series B Funding (FinSMEs), Rated: A

Maxex, LLC, an Atlanta, GA-based residential mortgage loan exchange, closed a Series B funding round of undisclosed amount.

CFPB Sues Debt-Collection Agency Over Deception Allegations (PYMNTS), Rated: A

The Consumer Financial Protection Bureau (CFPB) said Friday (May 17) that it has filed a lawsuit in federal court against a debt-collection agency that, the agency said, violated the Fair Debt Collection Practices Act.

The lawsuit targets Forster & Garbus, LLP, a debt-collection law firm based in New York.

Plaid gives digital banks and fintech a new tool to bypass traditional finance (CNBC), Rated: A

Start-up Plaid, recently valued at $2.7 billion, already connects bank accounts to fintech apps like Venmo, Robinhood, Coinbase and Acorns. It announced “Plaid Direct” on Wednesday, which lets users more easily connect to newer digital banks like Chime.

Capital Markets Veteran Joins PeerStreet to Manage Institutional Sales (BusinessWire), Rated: A

PeerStreet, a marketplace for investing in real estate backed loans, has announced the appointment of Deepa Salastekar as the Vice President of Institutional Sales. Ms. Salastekar joins PeerStreet to expand the company’s relationship base of institutional partners across all investment types available through PeerStreet.

Dharma now supports peer-to-peer lending in USDC to attract mainstream investors to DeFi (The Block Crypto), Rated: B

Defi startup Dharma announced Wednesday that it will start to support peer-to-peer lending of USDC, in a push to engage mainstream investors.

United Kingdom

Funding Circle investment trust asks shareholders to approve wind-down plans (P2P Finance News), Rated: AAA

FUNDING Circle is set to begin a managed wind-down of its dedicated investment trust, the Funding Circle SME Income Fund (FCIF), once it gets the green light from shareholders.

The FTSE 250-listed peer-to-peer business lender said last month that shareholders had backed plans to stop investing in new assets and begin the process of returning capital to investors.

Funding Circle Sets Hard Limit To Incentive Pay For Senior Executives (Morningstar), Rated: A

Funding Circle Holdings PLC clarified its director pay policy Wednesday following “feedback from shareholder advisory bodies”.

The small and medium enterprise loan platform said the amount granted in each year for a three year period under the company’s long-term incentive plan to can now no longer exceed GBP2.0 million and GBP1.1 million for the company’s chief executive and chief financial officer, respectively.

Span A Higher Than Span B for Funding Circle Sme Income Fund Limited (FCIF.L) (Williams Business Review), Rated: B

After a recent indicator scan, we have noted that Span A is currently higher than Span B for shares of Funding Circle Sme Income Fund Limited (FCIF.L). Traders may be paying close attention as this signal may indicate a possible bullish move.

TransferWise doubles its valuation to $ 3.5bn (Fintech Futures), Rated: AAA

UK-based international payments fintech TransferWise has doubled its value to $3.5 billion after raising $292 million in secondary funding, Jane Connolly writes.

Call for ‘credit curfew’ to help late-night borrowers (The Times), Rated: A

Banning borrowers from accessing high-cost credit websites between 11pm and 7am would ease the numbers of people spiralling into debt as activity peaks during these hours, according to researchers at Newcastle University.

Monzo hits 2m customers, adding 1m in eight months (AltFi), Rated: A

Monzo has hit 2 million current account customers in just two years since getting a banking license, and just eight months after it hit 1 million accounts.

It launched its current accounts less than 18 months ago with customers having spent £10.7bn through Monzo so far.

Arbuthnot Specialist Finance reveals offering (Bridging and Commercial), Rated: A

Arbuthnot Latham & Co has officially launched its specialist finance division.

Arbuthnot Specialist Finance will offer short-term residential finance up to 70% of market value (MV), with rates from 0.65% per month.

For this product, it will offer loans between £30,000–£3m-plus.

For commercial properties, it will offer up to 65% of MV, including interest and fees (up to 85% of the 90-day MV, or 95% of the purchase price, whichever is the lower), with rates available from 0.75%.

New peer-to-peer lender targets 7.5% return with education loans (Your Money), Rated: A

Lendwise plans to offer borrowers loans of up to £100,000, with interest rates ranging from 7.5% to 12%. Pricing will be based on a range of factors, which the peer-to-peer lender said go beyond the applicant’s financial profile and credit record. They include the specific postgraduate or professional qualification course they are taking, the length of study and the repayment period.

Finastra’s open cloud platform drives collaboration and innovation in financial services (Fintech Finance), Rated: A

Today ahead of its FusionONE developer conference, co-hosted with Microsoft, Finastra unveiled the latest developments to its FusionFabric.cloudopen platform for innovation.

The 61 new open APIs (and more than 200 Endpoints) span many of Finastra’s solutions, including retail and corporate banking (both enterprise and North American community markets), consumer lending and mortgage, payments and treasury and capital markets. These are now available in the FusionFabric.cloud API catalog for developers to harness in building financial services applications. Some of these powerful APIs are already enabling:

China

A fintech revenue surge helped Tencent smash quarterly expectations (Business Insider), Rated: AAA

Tencent posted record quarterly profits and smashed market expectations in Q1 2019, driven largely by surges in its fintech and cloud revenue, per Reuters.

Fintech and business services is now Tencent’s second largest division, responsible for a quarter of its revenue. This was the first time the tech giant broke out earnings for the unit, which brought in revenue of Rmb21.79bn ($3.2 billion), a 44% year-over-year (YoY) spike. Key in driving this growth is its payments wallet for WeChat, whose 1.11 billion users make it the largest social media platform in China, as well as its insurance services, which include a 20% stake in Aviva Hong Kong, and its cloud computing service.

Tencent’s online advertising grew 25% YoY, compared with 55% YoY in the same period last year, suggesting that China’s slowing economy and continued trade tensions with the US are hitting the firm.

Source: Business Insider Intelligence

DBS Bank Expects a Boost in Chinese P2P Lending Market from the Greater Bay Area (LearnBonds), Rated: A

Greater Bay Area could be the key to reviving the struggling P2P lending market in China, according to DBS Bank.

The Singaporean bank estimates that P2P lending will experience a 17% annual growth rate by 2030.

European Union

Identity technology and Dublin’s draw for fintech firms post-Brexit (Forbes), Rated: AAA

According to 

1 in 10 European banks to vanish by 2023 (AltFi), Rated: A

Bumper banking profits disguise an underlying weakness in traditional banks, as their per customer income has tumbled over the past decade.

That’s the finding of a report by consultants A.T. Kearney, which found data across 92 European banks revealed income per client had fallen 11% since 2008.

Australia/New Zealand

Commerce Commission’s court case against payday lender Ferratum scheduled for next year (Interest), Rated: AAA

A backlog of cases in the Auckland High Court means the next hearing in the Commerce Commission’s legal action against online payday lender Ferratum New Zealand won’t be held until June next year.

Asia

Indonesian fintech association sanctions lending platform that sets high interest rate (KrAsia), Rated: AAA

Two Indonesian lending platforms regulated under the country’s financial services authority (OJK) have been penalized by the ethics council of AFPI, the industry association for fintech lenders in Indonesia.

The organization revealed that one of the companies in question is P2P lender Do-It, which charged an interest fee rate of 1% per day.

Africa

Onefi is Expanding Carbon’s Digital Banking Services to Ghana (Technext), Rated: AAA

Nigerian digital financial platform, Carbon (formerly Paylater) is taking big steps to introduce its revamped financial services into Ghana. The online lender is looking to hire a new country manager for Ghana and this suggests the company is looking to introduce its new services like PayVest into Ghana.

Authors:

George Popescu
Allen Taylor

The post Thursday May 23 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 7 2019, Weekly News Digest

chinese p2p lenders

News Comments Today’s main news: Funding Circle US small biz loan portfolio surpasses $2B. JPMorgan Chase to compete with Affirm, Klarna on POS financing. Funding Circle expands into Canada. Funding Circle financial highlights. Revolut fights new allegations. Dianrong lays off 2,000. Today’s main analysis: U.S. credit card debt hits record $870B IN 2018. International P2P lending volumes for February 2019. Today’s thought-provoking […]

The post Thursday March 7 2019, Weekly News Digest appeared first on Lending Times.

chinese p2p lenders

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Funding Circle US Small Business Loan Portfolio Surpasses Most Banks with $ 2 Billion Lent Through Platform (PR Newswire), Rated: AAA

Funding Circle, the global small business loans platform, today announced that investors have lent more than $2 billion through its platform to small businesses in the United States. With this milestone, Funding Circle now has more US small business loans outstanding than almost 98% of FDIC-insured banks1.

Funding Circle now has more than $1 billion of small business loans in its portfolio, which means that if it were a bank it would be among the 50 largest small business commercial & industrial loan portfolios in the United States, according to the latest FDIC data available1. However, unlike a bank, Funding Circle provides a single financial product. Its fully amortizing business loans, powered by sophisticated technology and proprietary credit models, enable business owners to access financing with speed and efficiency, allowing them to devote more time to delivering their product or service to the market and ultimately create more jobs and vitalize their communities.

JPMorgan Chase Enters A Hot Fintech Space: Point-Of-Sale (POS) Financing (Forbes), Rated: AAA

JPMorgan Chase announced that it is moving into the point-of-sale (POS) financing market.

POS financing certainly isn’t new. In 2016, merchants in nine different retail categories saw more than 160 million POS loan applications—only 53% of which were approved, however.

Source: Forbes

Filene Research Institute 

Source: CORNERSTONE ADVISORS

Shopping at Discount Stores Could Help Get You a Loan (WSJ), Rated: A

Discount-store shoppers may soon get an unexpected benefit: better odds when applying for personal loans from Discover Financial Services.

Discover, best known for its credit cards, plans to use artificial intelligence to assess hundreds of unusual characteristics about personal-loan applicants in an attempt to get its rising losses under control.

U.S. Credit Card Debt Closed 2018 at a Record $ 870 Billion (Bloomberg), Rated: AAA

U.S. credit card debt hit $870 billion — the largest amount ever — as of December 2018, according to the data from the Federal Reserve. Credit card balances rose by $26 billion from the prior quarter.

Source: New York Federal Reserve

Nearly 480 million credit cards are now in circulation — up by more than 100 million since hitting bottom after the recession a decade ago.

At the end of last year, credit cards were the fourth-largest portion of consumer debt in the U.S. after mortgage, student loan and auto debt. But the quarterly increase in credit card debt was faster than the other categories. Overall debt reached a record $13.5 trillion.

Source: New York Federal Reserve

LendingTree Compares Renting and Owning a Home in the 50 Largest Metropolitan Areas in the U.S. (LendingTree), Rated: AAA

Louisville, Milwaukee and Oklahoma City are the metros where median rents are cheapest when compared to median mortgages. In these areas, median rent costs are an average of $310 cheaper than median mortgage costs.

Source: LendingTree

Miami and Orlando, Fla.; and Virginia are the metros where rent payments are the most expensive when compared to mortgage payments. Median mortgage payments are an average of $215 cheaper than median rent payments in these metros.

Four of the top 10 metros where monthly rents are higher than monthly mortgage payments are in Florida. According to a recent housing study from Harvard University, low wages and too few rental units are key factors that have caused Florida’s rental affordability crisis to become the worst in the nation.

Source: LendingTree

‘Stop pitting misery against misery’: How TrueAccord is turning debt collections into a financial service (Tearsheet), Rated: AAA

Ohad Samet has spent his career working on lending analytics — first, at a firm called FraudSciences, which got bought by eBay. He ran analytics at Analyzd, which was acquired by Klarna. As the chief risk officer at the pay later lender, he became aware of how antiquated the debt collections industry was. Call centers, dialing for dollars, it just hadn’t kept pace with the front end of the business.

So, in 2013, he left and with two co-founders started TrueAccord, which is essentially a nearly-automated marketing and sales campaign for debt collection. Based on consumer data and data from the lender, it can determine who to call, what time to call, what communications channel — phone, text, email, chat — and what message to use. It purports to be a much better experience for consumers.

KBRA Assigns Preliminary Ratings to Kabbage Asset Securitization LLC, Series 2019-1 (BusinessWire), Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes (the “Notes”) issued by Kabbage Asset Securitization LLC, Series 2019-1 (“Kabbage 2019-1”).

This transaction is Kabbage, Inc.’s (“Kabbage” or the “Company”) third securitization and it is expected that the proceeds of the sale of the Notes will be used to refinance the Company’s existing $610 million outstanding Kabbage Asset Securitization LLC Series 2017-1 Notes and provide extra funding capacity for Kabbage.

Notes Preliminary Rating Initial Principal Balance
Class A AA (sf) $421,221,000
Class B A (sf) $59,715,000
Class C BBB (sf) $69,348,000
Class D BB (sf) $35,316,000
Class E B (sf) $24,400,000

Peer to Peer Lending Platform Beehive Raises $ 4 Million (Crowdfund Insider), Rated: A

Beehive, a peer to peer lending platform servicing SMEs in the MENA region, has closed on $4 million Series B funding round, according to a release from the platform. This most recent funding brings the Fintech’s total raised to $15.5 million since platform launch.

Loan officers cast serious doubt on latest loanDepot, Chase mortgage promises (HousingWire), Rated: A

In recent LendingLife news, loanDepot announced its new digital mortgage, which it says can identify significant time and cost-savings for borrowers in seven minutes.

AI Foundry Unveils Next-Generation Artificial Intelligence Platform and Mortgage Automation Solution (PR Newswire), Rated: A

AI Foundry, an artificial intelligence (AI) platform company, today announced the launch of its next-generation Cognitive Business Automation Platform along with a new Agile Mortgages solution. This patent-pending technology incorporates the latest in AI, machine learning and machine vision to deliver a higher level of problem solving and decision making for enterprises. The new Agile Mortgages solution, which is built on top of the platform, automates manual, labor-intensive mortgage processes, enabling lenders to dramatically accelerate the lending lifecycle.

Could A Selfie Put An End To False Identities? (Forbes), Rated: A

Earlier this year, 

Auto Loan Statistics (LendingTree), Rated: A

Key facts

  • Americans originated a record 2.5 million auto loans in July 2018, the most recent month for which data is available.
  • Americans owed more than $1.14 trillion in auto loans as of September 2018, 23% more than 2013.
  • Outstanding auto loan balances are rising about 3.1% a year in dollar amounts.
  • Auto loans accounted for about 8% of outstanding consumer debt in 2018, including mortgages, about 2 percentage points higher than a decade earlier.
  • Gen Xers carry the highest auto loan balances with a median of $18,741 and are the most likely of other age groups to have a car loan.
  • The average new car loan originated by a finance company is $29,921.27, an increase of more than $5,000 from 10 years earlier.
  • Average monthly payments are rising, too:
    • $530 for new vehicles, up 5% year over year
    • $381 for used vehicles, up 4%
    • $430 for a new vehicle lease, up 4%

For many Americans, car loans are their largest debt burden, a weight which threatens to become overwhelming as they stretch loan terms to buy increasingly expensive vehicles — new and used. To get the full picture of auto loan debt in the U.S., we looked at auto loan originations, prices and term lengths. Here are the numbers.

Online bank Chime now valued at $ 1.5 billion after new funding round (CNBC), Rated: A

Digital bank Chime has tripled its valuation, officially passing the $1 billion-mark this week.

The San Francisco-based company announced a $200 million Series D financing round that brings its new valuation to $1.5 billion. Investors were led by DST Global, which also participated in earlier fundraising rounds, and new investors Coatue, General Atlantic, Iconiq Capital and Dragoneer Investment Group, Chime said Tuesday.

Jason Gross of Petal (Lend Academy), Rated: A

In this podcast you will learn:

  • The personal experience that led to the founding of Petal.
  • Their core product and how it is different to what else is out there.
  • A profile of their typical customer.
  • How they are approaching underwriting.
  • The typical APRs and credit limits they offer on their card.
  • How they are protecting their company against fraud.
  • How Petal is getting the word out about their credit card.
  • The large waiting list they had when they launched last year.
  • The early signals they are seeing with credit performance.
  • How they are generating income.
  • The primary funding sources they use in providing the credit lines.
  • What they mean on their website when they say “a credit card with a conscience”.
  • Their biggest challenge as they grow their company today.
  • The goals the Petal team has for 2019.

FINRA Approves Circle’s Acquisition of SeedInvest, Continues Mission of Tokenization (Crowdfund Insider), Rated: A

FINRA has given their stamp of approval to the acquisition of SeedInvest by Circle. The crypto focused company announced the purchase of SeedInvest in October of 2018.  The acquisition of a regulated securities crowdfunding platform by the blockchain based Circle represented a seminal turning point in the crypto industry.

Virginians say online lender uses tribal immunity to get around state laws (Pilot Online), Rated: A

Virginians are taking a lead attacking what they say is a legal loophole that has left thousands of people stuck with debt they can’t escape.

The case involves loans at interest rates approaching 650 percent from an online lender, Big Picture Loans, associated with a small Indian tribe on Michigan’s Upper Peninsula.

Lula Williams of Richmond, the lead plaintiff in one case, still owes $1,100 on the $1,600 she borrowed from Big Picture Loans — debt that she’s already paid $1,930 to retire. One of her loan documents reports the annual percentage rate for her debt at 649.8 percent, calling for her to pay $6,200 on an $800 debt. Her first three installments on that loan, each for $400, would have yielded Big Picture a 50 percent profit on the loan after just three months, court records suggest.

How to Invest in Real Estate without Buying Property (Realty Biz News), Rated: B

Lastly if you love jumping on the latest trends, then jumping on one of these companies services that how recently cropped up will help you get involved in real estate investing. You are able to invest in commercial and residential real estate investments and receive cash flow distributions in return, and just like the other options on this list, someone else is doing the heavy lifting whilst you reap the rewards.

Whilst there is no one standout company that we can confidently recommend, since they all havent been around long enough for us to make a property judgement, Fundrise returned an average of 11.4% on the invested dollars in 2017 and a further 9.11% in 2019.

The best part is you don’t even need to be an accredited investor to open an account, meaning if you’re new to the market, then this is your chance to get in on something thats shiny and new and that could potentially give you a place to invest your cash and reap the rewards of owning physical property.

Elevate Appoints Kathleen Vanderkolk as Head of Enterprise Risk Management (BusinessWire), Rated: B

Elevate Credit, Inc. (NYSE: ELVT) (“Elevate” or the “Company”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it has promoted Kathleen Vanderkolk to Chief Risk Officer.

Vemanti Group Engages With Securitize And DSLG To Launch Digital Security Offering For eLoan, JSC (GlobeNewswire), Rated: B

Vemanti Group, Inc. (OTC PINK:VMNT), a technology-driven holding company, today announced that it has engaged with Securitize, Inc. (“Securitize”) and Digital Securities Law Group (“DSLG”) to launch a Digital Security Offering (“DSO”) to fund and propel the business objectives for eLoan, JSC (“eLoan”), its portfolio company. The Company recently announced that it has completed its investment in eLoan, a fintech company based in Vietnam.

The offering will be conducted by the Company on behalf of Fvndit, Inc. (“Fvndit” – formerly Directus Holdings, Inc.), eLoan’s US-based parent company, as the issuer. The issuance will be managed by Securitize’s platform and DS Protocol. Details of the offering will be announced at a later date.

United Kingdom

Funding Circle Announces Expansion to Canada (PR Newswire), Rated: AAA

Funding Circle, the leading small business loans platform in the UK, US, Germany and the Netherlands, today announced its plans to enter the Canadian market and expand access to fast, affordable and transparent financing for Canadian small businesses.

Funding Circle will establish operations in Canada in the second half of 2019 with an office located in Toronto. The business will be led by Tom Eilon, who previously led the commercial strategy for Funding Circle in the United Kingdom.

Funding Circle Holdings plc (Funding Circle), Rated: AAA

Financial Highlights:

  • Strong Group performance delivering IPO guidance whilst continuing our strategy of investing for growth
  • Revenue of £141.9 million (2017: £94.5 million). Year-on-year growth of 55%1 (excluding property2) exceeding c.50% guidance stated at IPO
  • Segment adjusted EBITDA3 of £7.0 million (2017 loss: £3.9 million) with margin of 5% (2017: negative 4%)
  • Adjusted EBITDA4 loss of £28.5 million (2017 loss: £25.1 million) with margin improving to negative 20% (2017: negative 27%)
  • Basic loss per share of 18.2 pence (2017 loss: 14.0 pence)
  • Loss before tax £50.7 million (2017 loss: £36.3 million)
  • Free cash outflow5 of £42.0 million (2017 outflow: £35.3 million)
  • Cash of £333.0 million, £244.1 million higher than at the end of 2017 (£88.9 million), including IPO proceeds of £300.0 million, before expenses of £15.0 million

UK Peer to Peer Lending: Loans top £800 Million in Q4 as Industry Matures (Crowdfund Insider), Rated: AAA

The UK Peer-to-Peer Finance Association(P2PFA) has published fourth quarter numbers for member platforms. According to their data, cumulative lending now tops £9.5 billion with over £800 million originated during the period.

The P2PFA states that platforms facilitated loans worth nearly £3 billion during 2018.

In Q4, P2PFA platforms originnated £527 million to businesses and £282 million to almost a quarter-of-a-million consumers. Cumulative lending among P2PFA platforms has now exceeded £5.5 billion for business lending and £4 billion for consumer lending.

Revolut is fighting back after yet more allegations were made against the $ 1.7 billion fintech unicorn after a week from hell (Business Insider), Rated: AAA

The Financial Times on Tuesday alleged that the UK National Fraud Intelligence Bureau (NFIB) is examining a complaint from a customer, adding to Revolut’s issues after a difficult week for the fintech.

However, the allegations were denied by Revolut and the Financial Times article was subsequently taken down.

The FT, citing emails, reported on an incident in which £70,000 was incorrectly paid into a Revolut customer’s account.

Is the Innovative Finance Isa worth it? We look at the pros and cons (City A.M.), Rated: A

At barely three years old, the Innovative Finance Isa still has some proving to do. And for some savers, it’s a product that is deemed too risky. But how risky is it really?

Of course, the IFISA is merely a tax-free wrapper, so the risk actually depends on the underlying investments held within.

And while investments can vary wildly, most IFISAs are invested in the peer-to-peer (P2P) lending market, where lenders are grouped together to invest capital through an online platform which distributes funds to borrowers.

How savers can use an Innovative Finance Isa to reap the rewards from the property market (City A.M.), Rated: A

Investors can open one IFISA per tax year, and have an annual subscription allowance of £20,000, with substantial tax-free returns.

There are also several different opportunities available when it comes to property IFISAs, including buy-to-let and development.

Wealth management firm urges greater awareness in investments (Wealth Adviser), Rated: B

Last year, the National Trust was criticised for investing in a fund with holdings in fossil fuel companies, while the Church of England was shown to have ploughed funds into Wonga, despite having publicly criticised the payday lender.

Provident fights back in bitter £1.3bn bid battle as it accuses former boss of destroying shareholder value and failing to grasp modern technology (This is Money), Rated: B

A war of words has erupted between the doorstep lender Provident Financial and its former boss John van Kuffeler as he mounts a £1.3billion hostile takeover bid.

The Provvy has accused van Kuffeler of destroying shareholder value and failing to grasp modern technology.

China

Dianrong has laid off as many as 2,000 employees amid a regulatory crackdown (Business Insider), Rated: AAA

China-based peer-to-peer (P2P) lender Dianrong has laid off as many as 2,000 employees and will shut down 60 of its 90 brick-and-mortar outlets, which helped verify the identities and qualifications of users, according to Bloomberg, citing people familiar with the matter.

Additionally, the company has been accused of falling behind on wages and severance pay, per a Chinese media outlet cited by TechNode . The company reportedly started shrinking its business around 10 months ago, despite securinga $70 million funding round in January to expand its services, including SMB lending.

Source: Business Insider
European Union

How PSD2 Will Change Lending (PYMNTS), Rated: AAA

Merchants and customers are now transacting under PSD2 and GDPR in the European Union (EU) — regulations that allow a greater window into how customer data is being used. While these regulations are aimed at increasing consumer trust by allowing them more transparency, many consumers in the region are still adjusting.

French regulatory body, the Commission nationale de l’informatique et des libertés (CNIL), has fined Googlethe equivalent of $56 million for noncompliance with GDPR within the region, alleging that the information services company was using EU customer data for advertising purposes without obtaining clear consent from those customers.

For third-party providers, such as P2P lending and investment provider Zopa, PSD2’s data transparency rules provide an opportunity to “level the playing field” when it comes to gaining that consumer trust.

International

10 Fintechs Have Already Raised Monster Rounds in 2019 (Lend Academy), Rated: AAA

We came into 2019 after a strong year of fintech investments with about $40 billion invested globally according to CB Insights.

Acorns

  • $105 million round led by NBCUniversal and venture arm of its parent company Comcast. NBCUniversal is now their largest shareholder.

Better

  • $70 million Series C from American Express Ventures and the Healthcare of Ontario Pension Plan (HOOPP). The company originated $1.3B in mortgages in 2018.

Figure

  • The $65 million Series B round was led by RPM Ventures as CEO Mike Cagney continues to show his fundraising prowess. Their valuation is said to be $365 million today about double the valuation from last year. Read our coverage here.

International P2P Lending Volumes February 2019 (P2P-Banking), Rated: AAA

The total volume for the reported marketplaces in the table adds up to 531 million Euro.

This month I added Bondster (use Bondster Promotion Code 5506 to get 1% cashback).

Source: P2P-Banking

Omidyar Network spins out its fintech investment arm as Flourish, with up to $ 300 million (TechCrunch), Rated: A

After twelve years spent investing in impact-oriented financial services startups around the globe, the Omidyar Network,  which serves as the family investment office for eBay founder Pierre Omidyar, is spinning off its financial inclusion investment arm as Flourish Ventures.

Equipped with up to $300 million in capital for operations and investments, the new Flourish will continue to invest around the Network’s core mission of backing companies with a dual focus on making a social impact and achieving quality financial returns.

List of Multi-Crypto Wallets To Consider For Your Portfolio (Cryptomorrow), Rated: A

Everus

Everus is a multi crypto wallet that allows for payment of bills and for mobile top-ups in multiple crypto and management of multiple crypto. The wallet, which is part of an ecosystem featuring bill payment, marketplace, peer-to-peer lending and micro-finance; allows customers to send, receive, store and withdraw multiple cryptocurrencies (more than 50 currently).

Peer-to-peer lending will allow people to offer and accept microloans affordably, which will be more targeted to the un-banked.

Infinito Wallet

Other features to be added soon include crypto lending where users can lend crypto and earn profits, exchange integration to allow users to exchange crypto from the wallet, fiat gateway to let users purchase crypto with fiat, digital identity and KYC where users can register their digital identity and use it everywhere else without needing to create another one, news portal to furnish users with happenings in the crypto space, and App Square for browsing dApps.

Quppy Wallet

It links to other parts of the company’s product ecosystem including decentralized exchange to allow users to buy and sell crypto, a licensed crypto bank, Prepaid co-brand bank cards, a decentralized peer-to-peer lending for borrowers as well as merchants, individuals, corporate, financial and non-financial institutions as well as crypto-fiat payments for merchants and 100% legal fiat-crypto-fiat transactions regardless of region and legislation.

India

P2P lenders develop new ways to build trust (India Times), Rated: AAA

Monexo ensures less risk for lenders by keeping a lender’s contribution to a loan to only Rs 1,000. So if a Monexo customer lends Rs 1 lakh on the platform, it gets split across 100 loans.

Faircent also has a similar strategy. It does not allow lenders to lend more than 20% of a single borrower’s requirement. So for an average loan of Rs 1 lakh, there will be on average 43 lenders funding that. They also advice lenders not to lend beyond Rs 5,000-7,000 for one loan.

Scaling small businesses with alternative finance (India Times), Rated: A

Lack of access to finance is the most widely cited constraint by SMEs for growth and scaling up business. Generally commercial banks perceive SMEs fall in the category of high default risk due to limited collaterals, smaller in asset size and limited historical track record.

Asia

Tightened supervision needed for P2P lending services: Deputy PM (Nhan Dan), Rated: AAA

Deputy Prime Minister Vuong Dinh Hue has asked competent ministries and sector to enhance inspections, supervision and settlement of violations related to peer-to-peer (P2P) lending model which has been springing up in Vietnam in recent two years.

E-Money, P2P Lending The Hotspots (Fitch Solutions), Rated: A

  • The e-money and payments segment continues to show strong growth, and consolidation within the sector is positive to improve services and ease competitive pressures.
  • P2P lending is emerging as a bright spot, and regulation remains lax enough for lenders to thrive.
  • Cryptocurrencies show little potential for growth as the regulator remains apprehensive towards crypto-based assets.

FINTERRA Calls for All Thought Leaders and Regulators to Envision A Global Waqf Bank (Salaam Gateway), Rated: B

Malaysia has the potential to become the first nation in the world to set up a global “Waqf” bank using blockchain technology, expounded Hamid Rashid, the Founder of FINTERRA.

The platform is a blockchain-based solution to crowdfund Waqf charity, Islamic investments, and peer-to-peer lending.

Canada

Klarna And PayBright Partner To Give More Shoppers The Ability To Pay Over Time (PR Newswire), Rated: A

Today, Klarna, a global payment provider, announces a partnership with Canadian instant financing provider, PayBright. Klarna and PayBright are joining forces to give Klarna’s 100,000 global retailers the ability to turn on a consumer finance solution for their Canadian shoppers quickly and easily.

Authors:

George Popescu
Allen Taylor

The post Thursday March 7 2019, Weekly News Digest appeared first on Lending Times.

Thursday February 7 2019, Weekly News Digest

origination costs

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-1 Trust. LendingPoint increases mezzanine financing. UK publishes Open Banking operational guidelines. Raisin raises $114M. Today’s main analysis: International P2P lending volumes for January 2019. Today’s thought-provoking articles: Where are we in the credit cycle? Marketplace lending associations respond to FDIC small dollar lending rule request. […]

The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.

origination costs

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-1 Trust (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-1 (“SCLP 2019-1”). This is a $480.7 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1

Class Preliminary Rating Class Principal
A AAA (sf) $351,800,000
B AA+ (sf) $39,400,000
C A+ (sf) $51,500,000
D BBB (sf) $38,000,000

Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA

This week’s big funding news was that digital savings and investing platform Acorns raised $105 million in its Series E round, bringing its total valuation to $860 million.

The US economy generated 304 k jobs in January, marking a record 100 months of job growth. Average hourly earnings rose by 3.2% and the unemployment rate rose slightly to 4%.

Marlette CEO Jeff Meiler discussed profitability and loan performance with Peter Renton (transcript and podcast here).  Marlette announced another year of profitability in 2018.

Prosper’s December Performance Update showed that Prosper is focusing on making higher grade loans with 62% of December originations rated AA-B.

Overall, lenders view the US consumer as healthy and the US economic growth as solid.

The Industry Responds to FDIC Small Dollar Lending Rule Request (Lend Academy), Rated: AAA

So, back in November the FDIC issued a Request for Information on Small Dollar Lending. They received more than 60 responses from banks, industry associations, non-profit groups, fintech companies and individuals. While the FDIC did not define exactly what they meant by a small dollar loan the respondents, for the most part, took it to mean loans of less than $5,000.

There are many mainstream online lenders offering personal loans down to $1,000 and there are also many fintech companies offering loans under $1,000. Companies like Oportun, Insikt, LendUp, Elevate, Opploans and many others offer these sub-$1,000 loans using the latest technology tools to make this process more efficient.

The Marketplace Lending Association (MLA) provided a detailed 10-page response where they urged the FDIC (and other regulators) to do more to support banks and foster closer working relationships with fintech providers:

The Online Lenders Alliance is a trade group that contains many small dollar lenders who operate online. Not surprisingly they are against the 36% rate cap but they also have a lot in common with their sub-36% brethren such as promoting partnerships between banks and fintech companies.

Source: Online Lenders Alliance

The Center for Responsible Lending gave one of the most detailed responses to the RFI, a full 38 pages.

Read the full Online Lenders Alliance response here.

LendingPoint Again Upsizes Its Mezzanine Financing, Bringing It to More Than $ 67.5 Million (Business Wire), Rated: AAA

LendingPoint, the consumer lending platform, announced it closed an increase of its mezzanine financing, bringing the total of the facility to $67.5 million. A Paragon co-investor joined the facility as a lender.

Today’s announcement is the latest in a string of financing transactions LendingPoint has closed in the past 15 months. The company secured an up to $500 million Senior Credit Facility in August 2017 and an up to $600 million Senior Credit Facilityin May 2018, both arranged by Guggenheim Securities.

Eight Challenger Banks Traditional Institutions Should Worry About (The Financial Brand), Rated: AAA

1. BankMobile — Hooked Up With T-Mobile

Parent Company: Customers Bank
Websitewww.bankmobile.com
Launched: 2015
Category: Mobile bank

The creation of father-daughter team of Jay and Luvleen Sidhu (CEO and President respectively), BankMobile is an evolving banking-as-a-service platform.

2. Chime — Super Slick App

Websitewww.chimebank.com
Launched: 2013
Category: Mobile banking and money management app (in partnership with the The Bancorp Bank)
Notable Milestone: 2 million account relationships

3. Finn — Chase Bank’s Millennial Play

Parent Company: JPMorgan Chase
Websitewww.chase.com/personal/finnbank
Launched: 2017
Category: Mobile bank

Chase is offering a $100 for opening a new Finn account (as long as you make ten qualifying transactions in the first 60 days).

4. Marcus — Sucking Up Your Customers

Parent Company: Goldman Sachs
Websitewww.marcus.com
Launched: 2016
Category: Online bank
Notable Milestones: 2+ million customers and $35 billion in deposits.

Marcus’ loans range from $3,500 to $40,000 at rates of 6.99% to 25%. The average loan in 2018 was $15,000 over four years with a 12% interest rate, according to Bloomberg BusinessWeek. That leaves plenty of margin room even with its online savings rate up at 2.25% (as of January 2019).

5. N26 — Platform Maestro

Websiten26.com
Launched: 2015
Category: Mobile bank
Notable Milestones: 2.3 million users and $1 billion in deposits.

6. Revolut — The Amazon of Banking

Website:www.revolut.com:
Launched: 2015
Category: Mobile financial provider

Notable Milestones: 3 million customers — both consumers and businesses. Opening about 8,000 accounts per day. 1.2 million monthly active users. Monthly transaction volume $3 billion. Received European banking license in December 2018. More than 60,000 U.S. customers on Revolut’s waiting list.

7. SoFi Money — Join The ‘Waitlist’

Parent Company: Social Finance, Inc.
Websitewww.sofi.com
Founded: 2011 (Sofi Money Beta Launch, June 2018)
Category: No-fee Mobile banking account

8. Varo Money — Almost OCC Approved

Websitewww.varomoney.com
Founded: 2015
Category: Mobile banking/money management app in partnership with the The Bancorp Bank.
Notable Milestones: First mobile-only bank to get preliminary approval for a national bank charter.

Walsh feels Varo Money is particularly suitable for the 70% of the people they initially surveyed who are “hands-off creditworthy Millennials.”

P2P Global sells US loans and chases ‘less volatile returns’ (AltFi), Rated: A

It said its net asset value (NAV) rose by 0.78 per cent in the final month of the year, amounting to a total 5.2 per cent return in 2018, as the fund sold off a number of poorly performing loans, according to its December newsletter published today.

15 Minute Mortgages? Meet Molo – The New Fintech Aiming To Shake Up The Market (Forbes), Rated: A

Francesca Carlesi is the Co-Founder and CEO of Molo, a new, super exciting fintech start-up, aiming to reimagine how people get mortgages forever. She was originally a University professor, envisioning pursuing an academic career, before quickly joining McKinsey & Co., immediately after finishing her Ph.D. Molo is her first experience as a start-up entrepreneur after a long career in the finance and banking world. Here she discusses how she made the transition and found the journey so far.

Building a bank designed for freelancers and solopreneurs with Joust’s George Kurtyka (Tearsheet), Rated: A

57 million people in the US freelance and 30 million or so of those are micro and small businesses. Small businesses use approximately a dozen apps and pieces of software to manage their finances. From a bank account to payments to QuickBooks to factoring, microbusinesses spend 365 hours a year reconciling the data between all their financial tools.

1 IN 4 SAYS MONEY IS THE BIGGEST HURDLE TO RUNNING A BUSINESS (Valpak), Rated: A

Key Findings

  • 1 in 4 Americans considers funding to be the biggest obstacle.
  • More women say not knowing how to run a business is a challenge than men.
  • Millennials ages 25 to 34 are the most afraid of failure.
  • 1 in 3 Americans lacks a strong business idea to begin with.
Source: Valpak

Plaid And Quovo Just Scratching The Surface With Data Aggregation (Forbes), Rated: A

The fintech consolidation is starting, at least in the financial data side of the business, with Plaid recently announcing an 

Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system (Business Insider), Rated: A

United Kingdom

Due diligence on P2P platforms (FT Adviser), Rated: AAA

In the immediate aftermath of the credit crunch, politicians enthused about the new crop of peer-to-peer providers and even created the Innovative Finance Isa.

UK financial institutions will receive more clarity on Open Banking (Business Insider), Rated: AAA

The Open Banking Implementation Entity (OBIE) has published its Operational Guidelines and accompanying checklist to help financial institutions (FIs) better navigate Open Banking, per a press release.

With the guidelines, the OBIE aims to clarify the regulatory requirements for a dedicated interface, as set out in the revised Payment Services Directive (PSD2), RTS, EBA Guidelines, and Financial Conduct Authority (FCA) Approach documents.

Source: Business Insider Intelligence

Read the full report here.

Starling launches euro account as UK prepares for Brexit (AltFi), Rated: A

The digital-only bank, which expects to top one million customers this year, said the new account is a simple was to ‘send and receive euros for free’.

Alt Credit Scorer Aire Scoops Up $ 11 Million in Growth Funding (Finovate), Rated: A

Alternative credit assessment innovator Aire has picked up $11 million in new funding. The London-based company, which demonstrated its Aire Credit API at FinovateEurope 2015, said the new capital will support the continued development of its credit insight engine, as well as support expansion in the U.S.

AccountScore uses Open Banking to offer real-time debt advice with Insolvency Panel (AltFi), Rated: A

A new service has been set up for people in debt, giving them the power to let advisors see their bank accounts in order to offer quick and accurate advice.

The service is a tie-up between fintech bank transactions firm AccountScore and The Insolvency Panel launched this month.

Why are SMEs declining external investment, and is it a barrier to scale? (Vox Markets), Rated: A

Small businesses accounted for 22 per cent of the UK’s economic growth in 2017 according to Octopus Investments High Growth Small Business Report. These SMEs, which comprise less than one per cent of UK companies, created one in five jobs in 2017 and hold a wealth of potential for our economy. When it comes to the future of the UK business landscape, it seems that the best things do come in smaller packages.

SME finance app ANNA gets £8.5m funding (Fintech Futures), Rated: A

SME business account Anna has received an investment of £8.5 million from Kinetik as it prepares to launch new tools and products.

What Winter? Crypto Lending Firm Has Issued over $ 630M in Just Six Months (NullTx), Rated: A

The cryptocurrency winter has been one of many contrasts. While some firms have gone out of business and shut down, some have thrived. Celsius Networks belongs to the latter.

Based in London, the firm launched just six months ago, but it has grown by leaps and bounds. It has lent over $630 million in loans, predominantly in cryptocurrencies.

Aave Launches Bitcoin on Its Ethereum-based Crypto Lending Marketplace ETHLend (PR Newswire), Rated: A

AAVE, a UK-based FinTech Startup, today announced a new release for its crypto lending marketplace ETHLend. The release introduces the capability for the ETHLend users to use their Bitcoin holdings as a collateral to borrow funds for spending.

Exclusive: P2P firm shuts platform (AltFi), Rated: B

The UK Bond Network, a p2p platform for corporate bonds, is closing as of today Monday 4 February 2019, according to the firm.

China

From private bank client to farmer: a Chinese model of social lending (Euromoney), Rated: AAA

Financial services group CreditEase runs an app through which its private banking clients can be connected to needy women farmers in China’s rural interior. It’s a remarkable initiative taken up by 200,000 farmers and shows what can be done with low-level credit. But how does the risk management work?

European Union

PayPal backed fintech Raisin raises $ 114m (Financial Times), Rated: AAA

German financial technology group Raisin has raised $114m in new funding from high-profile backers including Index Ventures and PayPal, in one of the largest fundraisings to date in Europe’s emerging “wealth tech” space.

ING Bridges Dutch SMBs To Funding Options (PYMNTS), Rated: A

Dutch bank ING is linking its small business (SMB) customers to alternative lending marketplace Funding Options, the firms said on Monday (Feb. 4).

The partnership means Funding Options has launched services in the Netherlands, expanding beyond the U.K. for the first time, said reports in Crowdfund Insider. Approximately 1.8 million SMBs in the Netherlands will gain access to Funding Options via ING Bank.

The Irish fintech startups disrupting their industries (Irish Times), Rated: A

Also based at NOVA is Initiative Ireland which aims to give cautious investors lower-risk access to the Irish property market. With poor interest rates, investors face the perennial problem of what to do with their money. Risk takers will always have options, cautious investors less so, and this is Initiative Ireland’s sweet spot. It is offering returns in the order of six to eight per cent to those investing in its novel peer-to-peer lending platform for developers building social and affordable housing.

Banco BNI Europa, NDGIT accelerate PSD2 and Open Banking in Europe (The Paypers), Rated: A

The European challenger bank in Portugal, Banco BNI Europa, has become a customer of NDGIT, provider of the API platform for banking and insurance in Europe.

BNI Europa implements “PSD2 Ready”, NDGIT’s smart standardized software solution following the Berlin Group RTS standard, to fulfil all PSD2 requirements. This cooperation is a milestone for the future development of Open Banking in Europe and for BNI Europa the next step in their company’s development.

International

International P2P Lending Volumes January 2019 (P2P-Banking), Rated: AAA

Milestones achieved this month (total volume since launch):

Source: P2P-Banking

Global regulators are struggling to define fintech credit (Business Insider), Rated: AAA

While many jurisdictions have highlighted fintech credit as a key development in the nonbank financial space over the last year, they struggle to define exactly what fintech credit is, per findings of the Financial Stability Board’s (FSB’s) Global Monitoring Report on Non-Bank Financial Intermediation 2018.

Source: Business Insider Intelligence

Why VC Is The Answer To Falling Returns (Forbes), Rated: A

In uncertain times, VC offers the advantage that its performance is completely uncorrelated with public equity markets. Last year, both the US and Europe saw record VC investment, reaching over 

Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? (Tearsheet), Rated: A

Those of us who work in finance can’t imagine life without a bank account. But for the world’s 1.7 billion unbanked adults, this is a reality. In the U.S., 33.5 million households are either unbanked or underbanked and lack the ability, criteria, or financial literacy to access banking services. Without access to savings and credit, these people often live — and remain — in a cycle of poverty.

In the U.S., nearly 95 percent of adults have a mobile phone and 80 percent of those are smartphones. And since they’re not tied to traditional banking norms such as branches, ATMs, and credit cards, the unbanked are more likely to adopt digital banking via their phones.

TymeBank in South Africa uses AI to help people learn about their money and how to save. It teaches people about credit scores and rewards them for good financial behavior — TymeBank offers an amazing 10 percent interest rate on savings accounts for customers who can define specific financial goals they want to hit, and then contribute to them.

Sancus to start accepting euros and dollars to fund loans (P2P Finance News), Rated: A

SANCUS will start accepting euro-denominated loans within the next few months, to help it expand its investor base.

The alternative business finance provider is also planning to establish a new base in the Cayman Islands by the end of 2019, a move which would allow it to accept dollar-denominated investments as well.

Revolut team ups with WeWork (AltFi), Rated: B

The new partnership will provide Revolut for Business customers with 3 months free of hot-desk space at a WeWork co-working space.

Australia

Australia’s getting wiser says Wisr in new campaign targeting disillusioned big bank customers (Mumbrella), Rated: A

Peer to peer lending service provider Wisr has targeted disillusioned big bank customers in its new ad campaign.

APAC

Diversify investments in P2P lending, youths urged (The Star), Rated: AAA

Technology-driven peer-to-peer (P2P) lending is becoming a popular investment choice among young investors, but the anticipated slowdown in the economy this year also raises the risk of losing money.

To protect their investment, a P2P financing platform operator said that investors should spread their investment into as many deals as possible.

Africa

DexAge – A Versatile Crypto-Trading Solution (Blockmanity), Rated: AAA

The P2P Crypto loan services allow users to retain their assets in case they predict the concerned cryptocurrency value might appreciate in the future. DexAge enables users to stake their crypto assets as collateral and acquire a loan of the same value to expand their investment profile.

Canada

Vancouver’s First P2P OTC Digital Trading Platform Officially Launched and Supported by Huobi Cloud Technology (Digital Journal), Rated: AAA

iBank Digital Asset L.P. (“iBank Digital”, “iBankEx” or the “Company”) has officially launched Vancouver’s first peer-to-peer (P2P) OTC digital currency trading platform on iBankEx. (www.ibankex.io) This launch is supported by Huobi Cloud (“Huobi Cloud”) technology, which has officially entered the Canadian market in 2019 with 120 exchanges around the world.

iBank Products & Services:

Fiat Lending – A decentralized global lending network connecting financial institutions worldwide by offering crypto backed loan business.

Crypto Lending – iBank provides crypto loans collateralized by your crypto assets in BTC/USDT with security and confidentiality.

Authors:

George Popescu
Allen Taylor

The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.

Thursday December 6 2018, Daily News Digest

Consumer Spending

News Comments Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018. Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019. Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest […]

Consumer Spending

News Comments

United States

United Kingdom

International

Southeast Asia

Other

News Summary

United States

SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA

Late Friday Bloomberg reported that SoFi was cutting 7% of its staff, or around 100 jobs, in the company’s mortgage department. This is due to a change in strategy as to how they underwrite mortgage loans. Rather than underwrite loans themselves, as they have done since launching their mortgage business back in 2014, they will outsource the underwriting to a partner.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (“CLUB 2018-P3”). This is a $272.40 million consumer loan ABS transaction that is expected to close December 13, 2018.

The transaction has initial credit enhancement levels of 30.87%, 22.80% and 9.70% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.

This transaction is LendingClub Corporation’s eighth rated sponsored securitization, fourth of 2018 and the fifth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com.

Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA

Real estate marketplace lender Money360 announced on Monday it has surpassed $1 billion in loans originated and closed since inception. The announcement comes just 11 months after the lending platform revealed it had hit $500 million.

Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA

US Q3 GDP showed 3.5% annualized growth, well above potential growth of 2%. Growth slowed from the blistering 4.2% pace in Q2 due to rising inventories and lower consumer spending:

Source: WSJ, PeerIQ
Source: VantageScore, PeerIQ

LendingTree Debt Report November 2018 (LendingTree), Rated: AAA

Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.

In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.

43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A

For the week ending Dec. 2, 2018, the share of borrowers with rates under 5% was the highest in two months, which may lend some support to a weakening housing market.

Source: LendingTree
Source: LendingTree

LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A

LendingTree today released its State Migration Study on where Americans are interested in moving. The study looked at where people moving out of state are going and discovered that of the 12.1 percent of homebuyers across the country who change states, most plan to head south.

Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states.

Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state.

Source: LendingTree

October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA

October was a big month for Reg CF campaigns, according to the StartEngine Index. In fact, October booked the most money raised using the crowdfunding exemption since the rule became actionable in May of 2016.

According to StartEngine, $10.9 million in funding was raised. Until October came along, this past July held the top spot at $10.7 million. The Index indicates that Reg CF has now raised $151.7 million since inception. The Food & Beverage industry remains the most popular sector to use Reg CF followed by Tech.

Source: Crowdfund Insider

Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA

Installment payments have been around for seemingly forever but a new crop of fintechs are offering it with a twist: the ability to pay off smaller purchases in installment payments that in many cases are interest-free.

And it appears to be resonating with scores of U.S. consumers judging from the brisk business installment payment services like QuadPay.com enjoyed during the kick off to holiday shopping season this past Thanksgiving weekend. David Sykes, chief operating officer at QuadPay.com said 35% of online Black Friday sales for one large merchant customer came via QuadPay. On average Sykes said its service accounts for around 20% of all the online transaction from its roughly 500 e-commerce partners.

QuadPay.com makes money via the merchant, getting a cut of the sales generated by its service. That enables it to offer interest-free loans to consumers wanting to purchase everything from Uggs to underwear. Sykes said the average value of the orders on the platform is $150. QuadPay takes 25% of that on day one and then spreads out the remaining payments every two weeks. Because the average installment payment is around $37 there isn’t too much risk of customers defaulting on the loan.  To prevent default it won’t let a customer use the service again if they were ever late with a payment. The executive noted QuadPay approves 92% of all applicants.

How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A

In Business Insider Intelligence’s second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank’s mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.

Source: Business Insider

Why Wealthfront is offering free financial planning (Financial Planning), Rated: A

Wealthfront is offering its planning services for free, effectively unbundling its software, and giving millions of Americans access to a financial roadmap.

The second largest independent robo is betting the firm can steer users into fee-based accounts after they interact with its software to come up with a financial plan. The freemium software uses the firm’s automated advice engine, Path, according to the firm.

Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A

Building a great service is hard but not impossible. But building a great service and making it available for free — that’s really hard.

Credit Karma seems to have figured out a way to do both. The company, with 85 million members in the U.S. and Canada, continues to roll out free, innovative financial products to its user base. It all began 11 years ago with a simple premise: to provide users with free access to their credit scores. From there, the company has rolled out a bunch of new products, including ID monitoring, tax preparation, a financial chatbot, auto finance, and unclaimed money.

Betterment launches tool to optimize cash savings (Tearsheet), Rated: A

Automated investment advisor, Betterment is rolling out “Two-Way Sweep”, a tool that can automatically “sweep” excess money from customers’ bank accounts into a Betterment account optimized to provide better returns for cash.

What’s behind this new product: Studies show that only one in three millennials is investing in the stock market. That means they’re holding a high percentage of cash. In fact, Betterment sees 30 percent of customers with cash balances of $20,000 on average. This excess in savings earns little to no interest. Betterment’s Two-Way Sweep is intended to take the hesitation out of deploying more money into investments by automating the process.

CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A

CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.

OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A

Chicago-based fintech firm OppLoans has been honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2019. This marks the second year in a row that the personal lender has been named to this prestigious list in the Small & Medium Business category. The Employees’ Choice Awards program, now in its 11th year, is based solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies on Glassdoor, one of the world’s largest job and recruiting sites.

Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A

According to 2017 statistics from the FDIC, 16 percent of households in Mississippi are unbanked, choosing instead to use “predatory services” like corner store check cashing in their neighborhoods.

Allen founded her first startup, an app development shop, while still in college. After moving to Silicon Valley, Allen realized it wasn’t just rural communities that were underserved by banks. Inner city areas across the country, most of which are home to majority Hispanic and African-American populations, are also affected. An FDIC survey found that more than 15 million adults in the U.S. go unbanked.

In 2016, Allen founded CapWay with co-founder and fellow Mississippian Timothy Lampkin. The mobile-first platform is aimed at younger generations (think older millennials and Gen Z) in those unbanked communities to help them break out of the predatory economy cycle.

Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B

Finicity, a provider of real-time financial data aggregation and insights, announced today it is working with mortgage banker Princeton Mortgage to automate borrower asset verification for lenders. The agreement will provide Princeton Mortgage loan officers and borrowers with a faster, simpler loan origination experience that reduces both paper chase and headache.

NBKC Bank fintech accelerator participant wins $ 1M (Biz Journals), Rated: B

Onward Financial Inc., a member of the first cohort in NBKC Bank’s Fountain City Fintech accelerator program, won a $1 million award from the Communities Thrive Challenge, which is put on by The Rockefeller Foundation and the Chan Zuckerberg Initiative.

United Kingdom

P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA

Back in 2005 Zopa quietly launched their P2P lending platform in the UK, the world’s first. It was the start of a lending revolution that has moved on to all corners of the globe. Today, a new chapter begins as the company announced that regulators have approved Zopa’s banking license. With that Zopa achieves another first: becoming the world’s first combined peer to peer lending platform and digital bank.

Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA

Zopa explained that this is called the “mobilisation’ phase” as regulators put some restrictions in place. A full licence will be granted once it meets the conditions set by the regulators.

Zopa said it will begin its new service next year. The digital bank will include options such as a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), credit card and a money management app.

Pointing to a statement by the FCA that just “40% of UK adults have confidence in the financial services industry,” Zopa sees opportunity in becoming a digital bank unencumbered by green-screen legacy tech and unnecessary brick and mortar branches.

Zopa explained it would redefine banking with the following services:

  • Giving customers a fair deal as standard – with no catches like sign-up offers that aren’t available to existing customers or hidden fees and charges.
  • Making sure money management is simple and a real person is available to discuss
  • Going beyond ‘good enough’

Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A

ZOPA has insisted its peer-to-peer lending rates will not be dictated by the savings products on offer when its bank launched.

It currently offers target returns of 4.5 per cent on its Zopa Core product and 5.2 per cent on Zopa Plus.

Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A

Other companies expected to be promoted to the FTSE 250 are peer-to-peer lending platform Funding Circle, the retirement housebuilder McCarthy & Stone and the investment trusts Smithson and Woodford Patient Capital.

Funding the future of the UK PLC (Business Leader), Rated: A

Looking at 2017, we saw some encouraging trends and one of them is in terms of diversity and choice. We saw peer-to-peer lending grow at over 50%. It’s obviously coming from a smaller base as it’s a reasonably new form of lending, but 50% growth is a very strong outcome.

Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A

Tandem Bank has announced its Journey Card has assisted nearly three-quarters (72 per cent) of its users to first-time credit or is helping individuals with poor credit history get back on track.

Due to the higher risk users it targets, the credit card carries a reasonably expensive representative APR of 24.9 per cent.

Tandem says it hopes to help the 43 per cent of Journey Card holders who have poor credit history, some of whom have defaulted with other providers.

CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A

Peer to peer property lender CrowdProperty is now disclosing their performance metrics using Brismo’s (formerly known as AltFi) standardized reporting methodology. CrowdPropert states that it is the first property development platform to incorporate the Brismo process which is described as an independent standard.

UK housebuilders back new online property listing start-up (Financial Times), Rated: A

Some of the UK’s largest housebuilders are backing a new property portal that will launch next year in the latest attempt to challenge the two dominant market leaders, Rightmove and Zoopla.

Barratt Developments, Bovis, Persimmon and Redrow have signed up to list their homes with the start-up Rummage4Property, as have Countrywide and about 30 other estate agency groups.

ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending (ABL) has supported a highly experienced Management Buy In (MBI) team, led by Paul Hampton, with a £2m invoice discounting facility to support Premier House Investment’s acquisition of Ralph Coleman International Ltd (RCI) and provide ongoing working capital, paving the way for the company’s exciting expansion plans.

KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A

KAMBO is expanding beyond desktops to become accessible on our most coveted devices, our smartphones. With the introduction of two native apps, KAMBO’s lending platform will become one of the most flexible and diverse of its kind.

The KAMBO app is now available on iOS and Android, making it the first crypto-lending platform to have an app in the App store.

LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B

Ingard, a compliance network, brokerage, and lending packager specialist, announced on Tuesday online lending platform LendInvest has joined its buy to let panel. According to Ingard, members may now access the lender’s buy to let range direct by registering through LendInvest’s online portal

China

Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA

Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”) is pleased to announce that OneConnect, a subsidiary of the Group, ranked first in one of the world’s most authoritative machine-reading comprehension challenges — the Stanford Question Answering Dataset 2.0 (SQuAD). GammaLab Institute of Artificial Intelligence (GammaLab), owned by OneConnect, scored 83.435, close to the human performance level of 86.831, way ahead of other companies in the challenge.

Another scenario is internet arbitration in universal financial inclusion. Small loan companies tend to turn to online arbitration, which is expensive and takes time to resolve, under the current peer-to-peer lending market. With the reading comprehension skill of GammaLab, the arbitrator will finish a case quicker, reducing the cost for arbitration.

International

International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA

Mintosleads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 473 million Euro.

I removed Unilend, as the platform has closed and the company has gone into receivership.

Source: P2P Banking

CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, announced today the introduction of its Total Home Value for Originations AVM solution.

The new Total Home Value for Originations solution is specifically calibrated and packaged to improve efficiencies when performing property valuations during the purchase and refinance loan underwriting process.

Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A

According to EY study, fintech startups have raised $41.7 billion in the first half of 2018 across the globe. So, what fintech strategies need to be implemented to transform the consumer experience on the market?

  • Consumers first
  • Rebuilding trust
  • Lack of credibility
  • Partnership instead of competition
  • Improving the quality of lives

Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B

Nasdaq has acquired Quandl, a Toronto-based provider of alternative and core financial data. Terms of the deal were not disclosed.

Australia

Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA

Helio Lending is the first independent crypto lending company to launch on Australian shores according to reports.

The company claims to be in the position to offer 50% more spending power to clients than they would have by holding on to their crypto assets.

Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A

Lodex, Australia’s first auction-style loans and deposits marketplace leader, today announced it has secured capital investment from Lakeba Group, an established Australian technology innovator.

India

India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA

India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%, which also throws a huge opportunity for India to not only make best out of financial services sector but also to disrupt it.

Southeast Asia

How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA

UberWeWorkSaudi Arabia. The biggest startup stories in 2018 shared one long and influential thread: Japanese conglomerate SoftBank, its $100 billion tech investment fund, and founder Masayoshi Son.

The Vision Fund is backed by several prominent investors, including Apple and the government of Abu Dhabi, but its largest financial partner is Saudi Arabia’s sovereign wealth fund. The country’s government, under crown prince and de facto ruler Mohammed bin Salman, contributed 45 percent of the $100 billion, and in October announced plans to put another $45 billion into a second Vision Fund.

P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA

Peer-to-peer (P2P) lending has emerged as a popular alternative financing option for small and medium enterprises (SMEs) in Southeast Asia. In 2016, P2P lending generated US$115.01 million, which accounted for more than half of total market share of Southeast Asia’s alternative financing market. In an evolving financing landscape, P2P lending complements the services banks provide and support the region in realising its growth and development potential. The very fact that investment in the region’s startups tripled from US$2.52 billion in 2016 to US$7.86 billion in 2017 is a testament of the vast potential in Southeast Asia’s FinTech startups.

Businesses, largely SMEs, benefited from such platforms too. According to a Deloitte report, SMEs contribute to 40% of Southeast Asia’s gross domestic product (GDP) and hiring 70% of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, especially in terms of financing. This is due to strict banking regulations imposed after the 2008 global financial crisis, which have made banks and most financial institutions increasingly risk-averse. This is evidenced by McKinsey Global Institute’s report stating that 39 million Southeast Asian SMEs (or 51%) lack access to credit.

Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA

Malaysia’s securities regulator may license more operators of equity crowdfunding (ECF) and peer-to-peer (P2P) lending platforms next year, after current operators raised more than 200 million ringgit (US$48.25 million) for small firms since the industry was legislated in 2015, according to its chairman.

Singapore’s Milieu Insight raises US$ 730K to enhance market research platforms (e27), Rated: A

Singapore- and Thailand-based marketing software startup Milieu Insight has announced that it has raised S$1 million (US$730,000) from a group of private investors including former Rippledot Capital Director, Ravi Ravulaparthi.

Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A

HonestFund (CEO: Sanghoon Seo) has announced that the company, one of the largest marketplace lending players in South Korea, has successfully raised $12 million Series B investment.

Investment was led by Korea’s leading VCs and investment companies, such as Dunamu & Partners, MurexPartners, KB Investment, TL Asset Management, Bass Investment and HB Investment. This brings HonestFund’s total investment to $21 million, making it one of the most valuable Fintech companies in South Korea.

Canada

How experimental tech drives TD Bank’s mobile app (American Banker), Rated: AAA

While many banks have sought to employ experimental technologies when dealing with customers, including predictive virtual assistants, geolocation and advanced data analytics, few have brought all those pieces together to the degree used by TD Bank.

The bank has used such technologies live in production and won significant customer adoption, with its mobile app becoming No. 1 in the finance category in Canada for both iOS and Android. Mobile customers use the app 17 times a month on average, a figure that is growing.

OnDeck to merge Canadian operations with Evolocity Financial Group (Seeking Alpha), Rated: A

OnDeck (NYSE:ONDK) will combine its Canadian lending operations with Evolocity Financial Group, a private, Montreal-based online small business lender, to create OnDeck Canada.

Africa

Peer-to-Peer Lending as a Means of Propelling Startup Growth (Modern Ghana), Rated: AAA

Capital is the livewire of any business, especially for startups and established small businesses. Hence, they are always seeking for some additional funding that is too small for an angel investor to get a return for their effort. Banks also think it’s not worth their time. That’s where peer-to-peer (P2P) lending is working to fill that lending gap. This model may be a solution for many small businesses that are struggling with just tapping smaller funding amounts.

Authors:

George Popescu
Allen Taylor

Thursday November 1 2018, Daily News Digest

student loans sofi

News Comments Today’s main news: Upgrade completes $282M securitization. KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-4 Trust. Funding Circle backs Just a Card. Monzo raises 85M GBP. Lendix changes name to October. Today’s main analysis: Which cities are spending within their means? Today’s thought-provoking articles: Total student loan balances by age group. Which cities are spending within […]

student loans sofi

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Upgrade, Inc. Completes $ 282 Million Securitization (PR Newswire) Rated: A

Upgrade, Inc., a consumer credit platform that offers affordable personal loans and personal credit lines with credit monitoring and education tools that help consumers better understand their credit, announced today it closed its inaugural securitization of personal loans. Upgrade Receivables Trust 2018-1 (“UPGR 2018-1”) issued approximately $282 million in notes to nearly 20 banks and asset managers.

This transaction marks the inauguration of Upgrade’s securitization program, designed as a quarterly issuance program. Credit Suisse and Jefferies acted as joint lead underwriters, and Upgrade served as sponsor, servicer and administrator for the transaction.

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-4 Trust (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-4 (“SCLP 2018-4”). This is a $549.00 million consumer loan ABS transaction.

Initial credit enhancement levels are 37.29% for the Class A Notes, 29.29% for the Class B Notes. 17.96% for the Class C Notes and 8.96% for the Class D Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A Notes, Class B Notes and Class C Notes), excess spread and a reserve account funded at closing.

Source: BusinessWire

This company advertised student loan savings of more than $ 20,000. That promise was misleading (CNBC) Rated: AAA

SoFi’s ads boasted that its products led to people saving more than $20,000 on average. But, in its calculations, the company excluded student loan borrowers for whom refinancing resulted in a longer, and sometimes more expensive, repayment timeline than they had held prior, according to the FTC.

Source: CNBC

Spending Within Their Means: Some Cities Do It Better Than Others (PR Newswire) Rated: AAA

LendingTree today released its study on where Americans are spending within (and beyond) their means across the U.S.

To determine where people can afford their financial obligations, LendingTree analysts combed through anonymized credit report data of My LendingTree users from August 2018 and compared it to the average household income from the latest U.S. Census Bureau data. The ranking of the 50 largest metro areas factored in data such as the number of credit inquiries from the past two years, the use of revolving credit lines, non-housing debt and mortgage balances.

Key findings:

  • It may come as a surprise, but some of the most expensive U.S. cities have residents living within their budgets, suggesting that higher education and greater income may be the most salient factors for living within your means.
  • San Jose, Calif. (Silicon Valley), San Francisco and Raleigh, N.C., top the list for cities in which people are living within their means. High incomes help residents of San Jose and San Francisco pay their bills (despite exceptionally high housing costs), while a modest mortgage-to-income ratio gives Raleigh a big boost.
  • Residents of San AntonioRiverside, Calif., and Las Vegas are struggling to meet their bills. Previous studies have shown that people spend a lot on vehicles in San Antonio, incomes are very low in Riverside and unemployment runs high in Las Vegas.

New Study Reveals Entrepreneurs Need More Mentoring (Forbes) Rated: A

It is common wisdom that 

Popular Bank’s bid to streamline small-business lending (American Banker) Rated: A

Popular Bank in New York has contracted with Biz2Credit to use its software for automating commercial loan approvals and to outsource the underwriting of certain small-business loans — a move that is part of a broader effort among banks to better compete with online lenders.

The $9.5 billion-asset Popular Bank started using the loan software earlier this month, said Rohit Arora, the CEO of Biz2Credit, an online marketplace that connects lenders and small businesses seeking credit.

Financial terms of the contract were not disclosed.

Judge tosses RICO claims against Montel Williams, payday loan site (Reuters) Rated: A

TV personality Montel Williams and a payday loan website he endorsed do not have to face racketeering charges for allegedly marketing illegal payday loans, a federal judge in California ruled on Tuesday.

U.S. District Judge Jeffrey White in Oakland granted a judgment in favor of Williams and online firm MoneyMutual, saying borrowers suing them failed to show that they participated in coordinated activity to commit fraud, as required for claims under the U.S. Racketeer Influenced and Corrupt Organizations Act.

What challenger banks get about small businesses that banks don’t (American Banker) Rated: A

The ranks of challenger banks offering financial products and services to small businesses are growing.

But what do these firms offer that banks don’t or won’t?

In interviews, several executives argue that they make the process easier and more user-friendly. Loans can be approved quickly and digitally and challenger banks say they can provide a better customer service experience than traditional institutions.

Source: American Banker

Strong mobile apps

Only 52% consider their bank’s mobile banking solution to be satisfactory, according to Javelin surveys.

Even Financial acquires Birch Finance, a credit card rewards startup (Tech Crunch) Rated: B

On the heels of a funding round to the tune of $18.8 million, Even Financial has acquired Birch Finance for an undisclosed sum.

Cred Adds PayPal, Goldman Sachs, Tradeshift Executives to Global Leadership Team (Business Wire) Rated: B

Cred, the leading provider of crypto-backed lending with over $250 million in credit facilities, today announced the addition of three executive team members. Maxim Rohkline joins as Chief Product Officer, James Alexander joins as Chief Capital Officer, and Richard Oh joins as GM of Asia. Each executive brings a 20+ year proven track record of financial technology innovation, spanning capital markets, online lending, payment systems, risk management, and analytics.

Factual Data Announces Integration with LendingPad (Business Wire) Rated: B

Factual Data, one of the nation’s premier providers of credit and data verification services to lenders nationwide, today announced an integration of its credit reporting capabilities with LendingPad (www.lendingpad.com), a leading provider of loan origination software headquartered in McLean, VA.

This integration allows clients to order tri-merged credit reports directly from Factual Data. Credit reports are merged in LendingPad’s document management system and liabilities data is updated in real time. The integration is available to all LendingPad users and will automatically populate credit information into the platform.

White Oak Commercial Finance Hires New Talent to Meet Growing Client Demand (AP News) Rated: B

White Oak Commercial Finance, a division of White Oak Global Advisors, today announced the appointment of Robert Dean to Managing Director of Risk Management for ABL and Factoring. Mr. Dean joins from Wells Fargo Capital Finance, where he served as Senior Vice President and Regional Sales Manager responsible for sourcing and structuring asset-based financing for middle-market companies with credit needs ranging from $5 million to $40 million.

United Kingdom

Funding Circle backs independent alternative to Black Friday (Peer2Peer Finance News) Rated: AAA

FUNDING Circle has teamed up with small business campaign group Just A Card to provide an alternative to the annual Black Friday shopping event.

The peer-to-peer business lending giant will help promote the Just A Card campaign – run by artists, designers and small business owners – to encourage people to shop locally in the run up to Christmas.

The joint campaign will take place during Just A Card Indie Week on 19 November, the week before Black Friday where bigger retailers hold sales.

Monzo, the UK challenger bank, raises £85M Series E at a £1B pre-money valuation (Tech Crunch) Rated: AAA

Monzo, the U.K. challenger bank that now boasts more than a million customers, has raised £85 million in Series E funding. The round is led by U.S. venture capital firm General Catalyst and Accel. Existing backers Passion Capital, Goodwater, Thrive Capital, Orange Digital Ventures and Stripe also participated.

The latest funding was at a pre-money valuation of £1 billion (~$1.27b), meaning that Monzo is now a bona-fide member of the U.K. fintech unicorn club, joining recent entrant Revolut.

Meanwhile, the bank upstart is also planning to launch a large crowdfunding round later this year. Like a lot of other fintechs — and before it was fashionable — Monzo has historically opened up its fundraising to its passionate community and other armchair investors.

iwoca becomes first business lender to connect to UK bank via Open Banking (Fintech Finance) Rated: A

iwoca, one of Europe’s fastest growing small business lenders, has today successfully released Open Banking for all new customers with a Lloyds Bank account. The company becomes the first ever business lender to connect with any of the UK’s nine largest banks under the Open Banking initiative, launched in January 2018.

By securely linking their Lloyds Bank data, business owners can now provide iwoca up to five years of transaction history with a few quick clicks of a mouse. This speeds up the lender’s already swift application process even further for Lloyds customers, reducing the time they spend submitting bank information to less than 60 seconds.

P2P platforms reassure investors over risks of borrower litigation (Peer2Peer Finance) Rated: A

A property developer who borrowed money from Lendy is threatening to sue the P2P property platform and its investors for £10m, after Lendy put the developer’s loans in default.

Lendy has described the threat as “vexatious” and with “little prospect of victory.”

This has prompted Lendy investors who are on other platforms to seek clarification on the risks involved in the wider sector.

OakNorth: How AI Can Fuel Banks’ Return To SMB Lending (PYMNTS) Rated: A

Small businesses (SMBs) left behind by their banks, thanks to tightening risk and capital requirements post-financial crisis, certainly left a gap in the SMB lending market that alternative and marketplace lenders rushed to fill. In the U.K., support for FinTech, as well as challenger banks, to boost competition in the small business lending market is driven by the oft-repeated conundrum for this industry: small businesses are more complex than a consumer, yet not as lucrative as a large enterprise, and are, therefore, unattractive borrowers to traditional, large lenders.

With a growing community of alternative finance (AltFin) players, banks have taken to either letting AltFin handle filling the small business lending gap or partnering with and acquiring those FinTech firms to retain their SMB customers. Yet, a gap remains. While the Goldilocks Conundrum offers a simple explanation as to why, a deeper dive into the issue of small business bank lending reveals a far more complex issue.

According to OakNorth Analytical Intelligence, both large banks and alternative FinTech firms are struggling to overcome the challenges of SMB lending, and it often comes down to data. Amir Nooriala, COO of OakNorth, said that to underwrite an SMB loan, financiers have to take in and analyze unstructured data.

China

X Financial’s Kevin Zhang Is Long-Term Bullish For China’s P2P Sector (China Money Network) Rated: AAA

China’s online peer-to-peer (P2P) lending industry will grow at an estimated annual growth rate of 30% to 40% after the government’s tightened regulations weeding out bad and small players in the following two to three years. That’s the projection of Kevin Zhang, chief financial officer of X Financial, a Chinese P2P lender that completed a listing in New York two months ago.

European Union

European Marketplace Lender Lendix Changes its Name to October (Crowdfund Insider) Rated: AAA

The news was leaked last week. Now it’s official. From its Paris headquarters, Olivier Goy, founder and CEO, announced that the European lending marketplace formerly known as Lendix is changing its name into October. With this name change the company reasserts its ambition to expand both into new geographies and new products.

Why October? Among other things, the name celebrates the 4th anniversary of the company founded in October 2014. But more importantly, it is better suited to support the company’s international ambitions. Earlier this year, Lendix / October raised €32 million to fuel its international expansion. The marketplace already operates in four countries: France, Spain, Italy and the Netherlands where it has helped finance more than €230 million worth of SME loans. October as a name is easy to understand, to remember and to spell in most languages.

Another important reason behind the name change is that October as a name frees the company from an exclusive association with the lending category. We can expect more announcements soon. A banking license? Bonds retail? An equity platform? We can expect the unexpected from October.

New peer-to-peer property lending platform seeking investments as low as €500 (RTE) Rated: A

Ireland’s first online peer-to-peer lending platform for property investors went live yesterday.

Property Bridges is targeting investors who are finding it difficult to secure a loan from a bank, or who need funding relatively quickly, with people able to invest in projects with as little as €500.

Marc Rafferty – who was also an investor in the SME peer-to-peer lending platform Linked Finance – is one of the Co-founders of Property Bridges.

International

These are the 25 most innovative FinTech startups in the world, according to KPMG (Business Insider) Rated: AAA

KPMG, a global network of professional firms providing audit, tax and advisory services, has just published its ranking of the 100 most innovative fintech start-ups.

Several factors were taken into account to establish this ranking, including the amount raised on average over a year or the degree of innovation of their products or services.

24. N26 – Offering a mobile banking app that operates without a single physical branch, N26 is expecting to enter the US market in the first quarter of 2019 — the company is a new entry in this year’s ranking.

22. Monzo – Monzo, a new entry to the list, is a digital bank focused on building the best current account in the world.

19. Klarna – Klarna is a leading European provider of e-commerce payment options that distinguishes payers from buyers — the company came 14th in last year’s ranking.

5. SoFi – Social Finance Inc. is an online finance company that provides lending products, such as student loan refinancing, mortgages, and personal loans — SoFi came 11th in last year’s ranking.

1. Ant Financial – Ant Financial Services Group is dedicated to using technology to bring the world equal opportunities.

Their technologies, from blockchain and artificial intelligence to security, the Internet of Things and computing, have helped Ant Financial to “serve the unbanked and underbanked”.

BlockFi Blockchain Crypto Lending Platform Expands Services to the International Stage (Bitcoin Exchange Guide) Rated: A

BlockFi, a blockchain-based platform backed by Galaxy Capital, is taking its lending services to the global market.

The primary objective of BlockFi is to provide incremental liquidity for clients in the cryptocurrency space. Recently, the company expanded its customer service team to onboard Spanish and Mandarin speakers. In Q3 2018, half of the traffic on the BlockFiwebsite came from users residing outside the US. These foreigners were also responsible for 33% of loan applications on the platform.

Australia

Peer-to-peer lending group puts in AU$ 100m funding for South Australia home battery scheme (Energy Storage News) Rated: AAA

An extra AU$100 million (US$70.76 million) of funding could be put into a rebate scheme for households buying energy storage systems in South Australia, after a peer-to-peer lending group stepped in.

Peer-to-peer lending company RateSetter has agreed to finance the sum as part of the South Australian government Home Battery Scheme, which has committed to granting 40,000 households in the state up to AU$6,000 each in subsidies towards the purchase of batteries for use in home solar-plus-storage solutions. The Home Battery Scheme also allows households to finance the unsubsidised remainder of the cost, as well as rooftop solar. Launched in September, the scheme is partly motivated by the need to help manage peaks in energy demand on the state’s grid network.

Australian neo-bank Xinja hires Brett King as Advisor (FinExtra) Rated: A

Xinja, which is building a 100% independent digital bank, or ‘neobank’ for mobile, (subject to it receiving a banking licence) is adding significant global expertise to its organisation with the announcement that Brett King will act as a permanent advisor to the Board, and help guide Xinja’s strategic direction.

Brett King founded neobank Moven in 2011, which launched the world’s first mobile, downloadable bank account. He is widely considered the most influential expert on retail banking innovation globally.

India

How do P2P companies handle defaults? (The Economic Times) Rated: AAA

Many investors get excited the moment they hear that P2P lending can earn them higher double-digit returns. However, the very next moment they would ask: what happens if the borrower defaults? How do P2P companies handle such defaults.

To begin with, P2P companies assess the financial footprints of the borrower through different sources as per their own credit evaluation system. “We try to ensure that loans are advanced to genuine customers with a structured credit evaluation process. Usage of alternate data also helps in refining the process to gauge the intent of a customer,” says Dhiren Makhija, co-founder and CEO, Cashkumar.

Pramod Akhramka elected President of the association of NBFC P2P Platforms (News Barons) Rated: B

Pramod Akhramka, Founder and Managing Director of OML P2P has been elected as the President of the newly formed association of NBFC P2P Platforms. Rajiv Ranjan, Founder of PaisaDukan has been appointed as the Secretary and Mukesh Bubna, Founder of Monexo has been elected as the Treasurer of the association.

To represent the NBFC-P2P lending industry at international forums, existing and new players in the industry has formed an association of NBFC P2P Platforms.

Asia

New tech and FinTech: opportunity and risk in Singapore case study (The Nation) Rated: AAA

DISRUPTIVE technology evolution has made a wide impact to global economies, the very first forefront business that feel this in both positive and negative way is financial service industry.

Due to the nature of business has been digitised and operated both locally and internationally when conduct business transaction and service. In this “global-digitisation” context, financial service firm must excel how to harness these technologies to improve efficiency and enhance customer experiences. New tech and fin tech in particular, have been increasing adopted by not only financial industry but also other businesses as well. This promote the collaboration and interdependency within and outside of the industry.

Authors:

George Popescu
Allen Taylor

Thursday October 18 2018, Daily News Digest

Major US Banks Active Mobile Banking Users

News Comments Today’s main news: Upgrade to debut ABS bond. KBRA assigns preliminary ratings to Upgrade Receivables Trust 2018-1. Funding Circle launches free iPad incentive. China’s P2P lending is in trouble. Today’s main analysis: State laws put installment loan borrowers at risk. (A MUST-READ) Today’s thought-provoking articles: SoFi’s data science head on machine learning and non-traditional lending. LendingClub’s Bill Walsh says […]

Major US Banks Active Mobile Banking Users

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Online lender Upgrade prepares debut ABS bond  (International Financing Review) Rated: AAA

Upgrade, an online lending company started by former LendingClub founder Renaud Laplanche, is looking to sell a debut asset-backed bond deal, four people with knowledge of the deal told IFR on Wednesday.

KBRA Assigns Preliminary Ratings to Upgrade Receivables Trust 2018-1 (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Upgrade Receivables Trust 2018-1 (“UPGR 2018-1”). This is a $286.390 million consumer loan ABS transaction that is expected to close October 30, 2018.

This transaction represents the first ABS securitization collateralized by unsecured consumer loans originated through the online marketplace lending platform operated by Upgrade, Inc. (“Upgrade”) and the first from the Upgrade Receivables Trust (“UPGR”) shelf. Upgrade Receivables Trust 2018-1 (“UPGR 2018-1” or the “Issuer”) will issue four classes of notes totaling $286.390 million. The proceeds from the sale of the notes will be used to purchase the loans and related rights from Upgrade Receivables Depositor LLC (the “Depositor”), who purchased the loans from the unaffiliated transferors, to fund the reserve account and to pay transaction expenses. The Depositor will in turn sell the loans to the Issuer.

Preliminary Ratings Assigned: Upgrade Receivables Trust 2018-1

Class Preliminary Rating Expected Initial Class Principal
A A (sf) $187,308,000
B BBB (sf) $32,569,000
C BB (sf) $28,440,000
D B (sf) $38,073,000

SoFi’s data science head: Opening the funnel to non-traditional borrowers with machine learning (Thomson Reuters) Rated: AAA

ANSWERS: What are some of the issues in machine learning that you are working to solve for right now?

WU: I think where machine learning plays the biggest role is in datasets that have extremely high numbers of dimensions, very low signal ratios and very sparsely populated values. For example, people in lending use data from the bureau. There are millions and millions of rows, there are thousands and thousands of columns. Each specific field has very little to no signal and each person has very few things that are actually populated. Those are opportunities where machine learning, particularly deep learning, has an extremely high potential.

ANSWERS: How can machine learning assist with lending decisions, and how does one keep bias from creeping into that?

WU: When making a decision on creditworthiness, machine learning can help lenders look at metrics beyond FICO and income. Whether it’s adding more information to traditional metrics versus determining creditworthiness of applicants without a full credit history, machine learning can drive tighter risk management while assessing borrower’s creditworthiness where traditional models cannot.

LendingClub’s Bill Walsh: ‘At its core, marketing is a data problem’ (Tearsheet) Rated: AAA

Today’s marketer on the hot seat is Bill Walsh, LendingClub’s general manager and head of marketing for personal loans. Bill brings an engineer’s approach to marketing. The MIT grad began his tenure at Lending Club in an operations role, where rigorous problem solving was used to solve some of the biggest problems in the business. Now that he’s leading marketing on the consumer side, he brings a similar approach.

We talk about how LendingClub defines marketing and approaches channels. We pay particular attention to a recent TV campaign you might have seen over the summer of 2018. Measuring and responding to the signal is core to LendingClub’s approach and in the course of this four week broadcast campaign, Bill’s team iterated twice. This puts ad agencies on notice — this is the new data-driven fintech marketing world.

Mobile banking is reaching a saturation point in the US (Business Insider) Rated: AAA

JPMorgan Chase counted32.5 million active mobile banking customers in Q3 2018 — an 11% year-over-year (YoY) increase from 29.3 million in Q3 2017.

That’s up from the 31.7 million active mobile customers in Q2 2018, but is also a slight deceleration from the 12% YoY growth in Q3 2017— following several quarters of decelerating growth: Chase has been adding around 800,000 mobile users on a quarterly basis.

Wells Fargo counts 29 million total active digital customers — 22.5 million of which use mobile banking. This marks an 8% annual increase in mobile banking customers, but a 4% YoY increase in total digital customers, demonstrating that most of its new customers are coming from mobile channels.

Source: Business Insider

State Laws Put Installment Loan Borrowers at Risk (PEW) Rated: AAA

Pew’s analysis found that although these lenders’ prices are lower than those charged by payday lenders and the monthly payments are usually affordable, major weaknesses in state laws lead to practices that obscure the true cost of borrowing and put customers at financial risk. Among the key findings:

  • Monthly payments are usually affordable, with approximately 85 percent of loans having installments that consume 5 percent or less of borrowers’ monthly income.Previous research shows that monthly payments of this size that are amortized—that is, the amount owed is reduced—fit into typical borrowers’ budgets and create a pathway out of debt.
  • Prices are far lower than those for payday and auto title loans. For example, borrowing $500 for several months from a consumer finance company typically is three to four times less expensive than using credit from payday, auto title, or similar lenders.
  • Installment lending can enable both lenders and borrowers to benefit. If borrowers repay as scheduled, they can get out of debt within a manageable period and at a reasonable cost, and lenders can earn a profit. This differs dramatically from the payday and auto title loan markets, in which lender profitability hinges on unaffordable payments that drive frequent reborrowing. However, to realize this potential, states would need to address substantial weaknesses in laws that lead to problems in installment loan markets.
  • State laws allow two harmful practices in the installment lending market: the sale of ancillary products, particularly credit insurance but also some club memberships (see Key Terms below), and the charging of origination or acquisition fees. Some costs, such as nonrefundable origination fees, are paid every time consumers refinance loans, raising the cost of credit for customers who repay early or refinance.
    Source: PEW

Read the full report here.

Bank Of America’s Zelle Boosts P2P Transactions 138 Pct In Q3 (PYMNTS) Rated: A

Bank of America cut expenses and reduced its provision for credit losses as the financial institution also beat analysts’ revenue and earnings expectations. Bank of America, in reporting its latest financials on Monday, also said that Zelle P2P payment transactions increased 138 percent year over year.

Revenue increased about 4 percent year over year, hitting $22.8 billion, higher than analyst expectations of $22.67 billion. The financial institution reported earnings per share of 66 cents, which represents a 43 percent year-over-year increase and is above analyst expectationsof 62 cents. Net income grew 32 percent to $7.2 billion.

Bank of America said its provision for credit losses decreased $118 million during the third quarter of 2018, to $716 million. “The net reserve release was $216 million, driven by continued improvement in consumer real estate and energy portfolios,” the bank said in its Q3 financial report.

As digital banks proliferate, so do risks (American Banker) Rated: A

Facing intense deposit competition from online-only banks such as Ally Financial and Goldman Sachs’ Marcus, many traditional banks are looking to turbocharge their deposit gathering by launching — or considering launching — digital banks of their own.

PNC Financial Services Group is the latest big bank to join the fray, recently rolling out a digital-only bank in markets where it lacks a brick-and-mortar presence. Like JPMorgan Chase, Citizens Financial Group and a number of other regional and community banks, PNC is counting on its digital bank to attract low-cost deposits to fuel loan growth while also helping it reach new demographic groups.

Early results have been promising — PNC CEO William Demchak said Friday that he’s been “pleasantly surprised” by the response in the Kansas City, Mo., market — but with the space becoming so crowded, industry watchers are beginning to question if the U.S. marketplace can reasonably support so many new digital banks.

Source: American Banker

Outside Financial Launches to Help Consumers Save up to $ 3,000 on Auto Loan Packages (PR Newswire) Rated: A

Outside Financial, an independent auto loan marketplace, launched its consumer-first platform today to bring transparency to auto finance. The company is the first to offer full auto loan packages outside of the dealership, which can save customers $1,000 to $3,000, along with time and hassle. Outside Financial also arranges refinances for existing borrowers.

In 2017, Americans racked up $568.6 billion in auto loans1, yet 60 percent of buyers don’t know they can bring their own financing to the dealership. The company’s new Outside Financial (OF) Markup Index* reveals that, on average, new car buyers are charged $1,717 in hidden markups when arranging their loans through a dealer.

Individual Investors Can Now One-Click Invest in Commercial Real Estate with CrowdStreet’s “Blended Portfolio” Offering (Benzinga) Rated: A

CrowdStreet, which operates the largest and most diversified online marketplace for direct equity investment in U.S. commercial real estate, is now raising $25 million for the company’s first CrowdStreet Blended Portfolio investment offering. To provide individual investors and registered investment advisors another way to diversify their investments with commercial real estate, the company plans a series of diversified and specialty portfolio investment options that will collectively raise and invest up to $170 million.

The first CrowdStreet Blended Portfolio’s proceeds will be deployed across 30-50 pre-vetted projects on the CrowdStreet marketplace, representing a broad range of commercial and multifamily asset types, risk profiles and geographies.

Credible.com Unveils First Truly Consumer-Centric Mortgage Marketplace (Business Wire) Rated: A

Credible.com, the leading online loan marketplace, announces the launch of its first-of-its-kind mortgage marketplace. Credible.com is the only mortgage marketplace that provides actual rates from top lenders in 3 minutes (without affecting a borrower’s credit score), and a streamlined digital origination process. The platform is designed to save borrowers frustration, time and money.

The Credible.com mortgage marketplace builds on the success of the company’s marketplaces for student loans, student loan refinancing, and personal loans, which have facilitated more than $1.6 billion in loans to date. The first product offered through the mortgage marketplace is mortgage refinancing, which went live today in 20 states that collectively represent 65 percent of mortgage originations.

Talking Regulation at the Online Lending Policy Summit (Lend Academy) Rated: A

The big topic of the day was the OCC’s Special Purpose National Bank Charter also known as the Fintech Charter. The topic was laid out for the audience by the first keynote speaker, Grovetta Gardineer, the Senior Deputy Comptroller for Compliance and Community Affairs at the OCC. She talked about the history of the OCC going back to 1863, with the National Banking Act, when the dollar supplanted state currencies as the sole currency of the United States, a revolutionary idea back then. Ms. Gardineer reaffirmed the authority of the OCC to introduce a national fintech charter and talked about how companies should proceed if they are interested. While she would not comment on specifics she did say that the OCC is currently having preliminary conversations with fintech companies but no formal application has been received yet.

The new head of the CFPB’s Office of Innovation, Paul Watkins, talked about the importance of the regulatory sandbox concept. He was one of the architects of the Arizona fintech sandbox and he is bringing that knowledge with him to Washington. He talked about the two main tools to help facilitate innovation at the CFPB: their trial disclosure program and the no action letter.

How Dealstruck Arrived, “Disrupted,” and Died – A Cautionary Online Lending Tale (deBanked) Rated: A

A self-described member of the “lucky sperm club,” a not-even 30-years-old Senturia went on to successfully raise $30 million of investor capital to fund his business, enough to fuel his rise and price-shame his competitors for years. But it wouldn’t last, as he detailed in book, Unwound, about the behind-the-scenes chaos that ravaged Dealstruck until the company closed for good in late 2016.

AFR Wholesale announces partnership with Floify (Housingwire) Rated: B

AFR Wholesale and Floify shook hands on a partnership, and AFR will now use Floify’s point-of-sale technology.

AFR’s goal in partnering with Floify, a 2018 HW Tech100 winner, is to reduce origination time and increase broker productivity. According to the release, Floify’s POS platform can save up to 15 hours of processing time per loan.

This is only one of an ever-increasing number of companies partnering with software companies or developing their own tech solutions in hopes of increasing productivity and getting some breathing room in the margin department in this tough mortgage market.

iintoo Launches Principal-Protection Product for Retail Investors Supported by Insurance Provided by Everest (iintoo Email) Rated: B

Online Real Estate Investment Management Company iintoo Investments Ltd. (“iintoo”) launched Epiic (Equity Protection Investment Community), the first-of-its-kind real estate investment product that provides principal protection for private accredited investors. Supported by insurance provided by an affiliate of Everest Re Group, Ltd. (NYSE:RE), a leading international reinsurance and insurance organization with operations that span the globe, and a social community pool, Epiic offers two layers of protection for investors’ principal.

iintoo opens up access to real estate investments that were once exclusive to professional funders and high-net-worth individuals. Starting at $25,000, accredited investors can invest in ownership shares in projected high yield, premium real estate projects.  Each project undergoes a rigorous due-diligence and approval process provided by iintoo.  In order to assess the risk factors in real estate investing, iintoo also conducted a thorough analysis of the real estate market in the United States, taking into consideration all sectors in all 50 states over the past 30 years.

TRANSACT Tech San Francisco to Examine the Impact of Software Providers on the Payments Industry (PR Newswire) Rated: B

The Electronic Transactions Association (ETA) will bring together executives from leading banking, payments and FinTech companies on November 1, 2018 for TRANSACT Tech San Francisco at the Wells Fargo Connections Center. The event will explore how software services are changing the way key ecosystems players – processors, banks and hardware manufactures – serve merchants and channel partners.

The day-long conference will kick-off with a fireside chat with Secil Watson, Executive Vice President and Head of Digital Solutions for Business at Wells Fargo. “Customer expectations are changing rapidly, and pace of change in technology is accelerating.” said Watson. “Yet we still have cash and checks. What can we learn from today’s customer experiences to build a better payments ecosystem for tomorrow?

Finicity Partners with Freddie Mac to Provide Industry-Leading Automated Income and Asset Assessment Solution (Finicity Corp) Rated: B

Finicity, a leading provider of real-time financial data aggregation and insights, announced today it has been selected as a third-party service provider for the new Freddie MacLoan AdvisorSM automated income and asset assessment capabilities, which provide a faster, easier way for lenders to verify loan application data upfront. Finicity’s digital verification reports greatly improve efficiency and accuracy, while also providing a simpler, more pleasant borrower experience.

Freddie Mac announced its new income and asset assessment capabilities at the Mortgage Bankers Association Annual Convention & Expo earlier today. Finicity’s verification reports are integrated within Freddie Mac Loan Product Advisor®, the cornerstone of Loan Advisor Suite.  When the capability goes live later this quarter, asset verification will be generally available and income verification will be available as a limited release.

United Kingdom

Funding Circle launches ‘free iPad’ incentive (Peer2Peer Finance) Rated: AAA

LISTED peer-to-peer platform Funding Circle is enticing new investors by offering a free iPads. But there’s a catch – they have to add at least £30,000 to their Funding Circle accounts before 16 November.

The P2P platform is also offering a number of other cashback and ‘giftback’ incentives to lenders who invest lower amounts of money.

Investors who add £20,000 to their Funding Circle accounts will receive £200 in John Lewis vouchers, while those adding £15,000 will get an Amazon Echo.

LendInvest Update: Accelerates BTL Production Application Volume Thanks to Rate Reductions (Crowdfund Insider) Rated: A

UK-based online lender LendInvest announced last week it has reduced rates and product fees across its Buy-to-Let product range. According to LendInvest, the pay rate for its five year fixed rate product has dropped to 3.60%, with the ICR calculation at a pay rate of 3.60%. Meanwhile, product fees for all BTL mortgages on standard property and HMO cases have been reduced to 1%, with borrowers who prioritize leverage in mind.

The lending platform also reported that for a limited time, valuation fees have been reduced to £100 for all standard property cases. LendInvest will now cover the borrower’s legal fee scale costs for standard property, standard conveyance cases, where dual representation is selected.

You think it’s going to be easy challenging the big banks? Think again (The Times) Rated: A

here has never been a more opportune moment for the pack of digital upstarts looking to topple the institutions that dominate the financial industry. Rarely does a week go by when a big bank does not suffer an IT meltdown, spewing sensitive data into the ether or freezing customers out of their accounts.

A decade after the collapse of Lehman Brothers, public distaste for the high street banks remains at elevated levels. Two thirds of Britons do not trust big banks to act in the best interests of society, according to a recent YouGov poll. The advent of smartphones, meanwhile, has fundamentally altered consumers’ expectations of their relationship with service providers.

Amex brings SME financing to UK with ezbob (Banking Tech) Rated: A

American Express (Amex) has partnered with online financing platform ezbob to offer UK SMEs competitive access to finance.

Through this partnership, eligible Amex business clients will receive a referral to apply for up to £300,000 in finance from ezbob at a fixed annual interest rate from 3%.

Carlos Carriedo, senior vice-president of global commercial services at Amex, says: “We know agility is crucial for smaller businesses to help retain a competitive advantage but accessing the finance needed to react swiftly to changing customer demands, or seize an opportunity, can be a challenge.”

Amex customers taking out a loan with ezbob will also benefit from a 40,000 Membership Reward points offer, the company adds.

Connect for Intermediaries announces new panel (Mortage Strategy) Rated: A

Connect for Intermediaries has announced the launch of a new unsecured lending panel.

Comprising Funding Circle, iwoca, Whitoak and Fleximise, the panel will be open to all of Connect’s AR members, and Connect will be able to obtain terms on behalf of other brokers as referrals.

Loans from £5,000 to £250,000 for up to five years will be available from 1.5 per cent.

Connect sales director Kevin Thomson says: “We have seen an increased demand for unsecured loans for trading businesses, as increasingly, brokers are coming to us with business clients who are looking to ease cashflow or expand their businesses.

P2P Lending Investment Returns Outstrip Many Market Competitors (CL News) Rated: A

P2P lending arrived in the UK back in 2010 with the launch of Funding Circle. The idea was simple. In the wake of the financial crisis, banks were – and still are – paying abysmally low rates of interest to savers. P2P platforms allowed savers to collectively lend money to businesses and individuals, usually over relatively short periods of time. By cutting out the middleman (or to be more precise, banks and other traditional lenders), P2P lenders were able to offer competitive rates to borrowers and superior returns to investors.

The market has evolved over the years. AltFi – which provides specialist news for the alternative investment industry along with a range of analytics services – says the market is growing rapidly. For instance, in 2015, P2P lending platforms brokered around £1.1bn in loans. In the first half of 2018 alone, the figure was £3bn. Separate figures from the Peer to Peer Finance Association reveal that its members have, to date, originated loans to a value of £9bn.

11:FS Foundry’s launch brings digital to banks (Banking Tech) Rated: A

Consultancy firm 11:FS has launched 11:FS Foundry, an approach to delivering digital banking services through a modular core banking architecture. It kicks off with the partnership with DNB, Norway’s financial services group, which has also become an investment partner.

DNB has invested £3 million for a 5% stake in 11:FS Foundry. This investment represents the long-term commitment between 11:FS and DNB to change how banks deliver digital banking services, the two companies say.

Watchdog warns payday lenders over customer complaints (Financial Times) Rated: A

The UK’s Financial Conduct Authority encouraged payday lenders to proactively compensate past customers; the industry has come under a lot of heat in recent months after a surge of complaints; companies say a lot of these complaints are bogus and a pushed by professional claims management companies (CMCs)

Wonga was forced to shut down a few months ago after they saw a significant rise in complaints, complaints now cost companies more than $725 per complaint after the first 25 complaints; the rise in complaints has come after new rules were put in place in 2015 where high cost lenders we ordered to drop fees and adhere to stricter standards; a new survey by Kantar TNS showed that 60 percent of payday loan customers still pay more than anticipated.

Fintech offers fresh ways to finance an MBA (Financial Times) Rated: A

According to David Simpson, admissions director at London Business School, MBA students spend just as much time trying to find funding as they do trying to find the right program; while struggling to find his own financing Prodigy Finance CEO Cameron Stevens though there had to be a better way so he started Prodigy with two former classmates.

The company is now growing fast by offering a service few others do, while also collecting credit records from across the globe; “You have talented people who have proved their potential in receiving offers to business school,” says Mr Stevens to the FT. “The only barrier for them is funding, because the banks are still incredibly localised, as they were in the 1500s.”

Arbuthnot Banking Group PLC Third Quarter Trading Update (Arbuthnot Group) Rated: A

Customer Lending balances are 28% higher than at the same time in the prior year and originations of new loans are 18% higher. However, as previously stated, the Group remains committed to maintaining its discipline in both credit underwriting decisions and return on capital when extending credit.

The newly launched Asset Based Lending division continues to develop ahead of the original business plan and has a strong pipeline of new opportunities. The Specialist Finance division has now completed the hiring of its core team of six employees and is currently setting up its operations based in Manchester. It is expected that it will write its first deals toward the end of the fourth quarter or early 2019.

OakNorth appoints form PRA director to board (Finextra) Rated: B

OakNorth – the bank for entrepreneurs, by entrepreneurs – today announces the appointment of Martin Stewart, the former Director of Banks, Building Societies & Credit Unions at the Bank of England, as an Independent Adviser on its advisory board.

Stewart joined the Bank of England in April 2013 and spent five and a half years there. In addition to supervising UK banks, building societies, credit unions and new entrants into UK banking, he was a Member of the PRA’s Executive Team responsible for PRA regulatory policy. His regulatory experience also includes spending three years at the FSA between 2010-2013, where he was a member of the leadership team that defined and implemented the UK’s post financial crisis prudential regulatory regime that now underpins the work of the Prudential Regulation Authority. In addition to this, he has almost two decades’ board-level experience having been Managing Director of a group of European subsidiary companies of the IFG Group PLC for almost four years, and as Chairman of the International Credit Union Regulators’ Network for the last six years.
China

China’s P2P Lending Sector Is in Serious Trouble (Money Makers) Rated: AAA

P2P lending has been lucrative in China with little constraining regulation. The industry is worth as much as $120 billion and has been high-risk, but high return.

Chinese regulators have been clamping down on debt and financial risk, the number of loan defaults is rising, capital investments are running out of the sector, and Chinese citizens are losing money. And getting pretty angry about it.

In July 2018, 114 P2P lending platforms in China were shut down or had funds suspended, without warning, by China’s regulators over liquidity concerns. Since June 2018, 243 online P2P lending platforms have gone bust.

Several Chinese Peer-to-Peer Lending Companies Have Submitted Self-Inspection Reports (Capital Watch) Rated: A

With hundreds of peer-to-peer (P2P) lending platforms having collapsed at the beginning of this year, different district-level financial bureaus recently rolled out a tougher reform on all P2P platforms’ risk compliance to ease a growing panic among investors.

This industry reform involves three major steps. First, all platforms have to complete a P2P Compliance Self-Inspection Report and submit it to the bureau by the end of October. Then, companies will be inspected by its local Internet Finance Industry Association, a non-state association. This will be followed by verification of inspection results by district-level Municipal Bureau of Financial Work with field inspection and a possible final check by higher-level government organizations.

New York-listed Hexindai Inc. (Nasdaq: HX) and PPDAI Group Inc. (NYSE: PPDF) both announced that they have completed and submitted the report.

European Union

A risky investment (Euro Weekly News) Rated: AAA

MANY UK nationals living part of the year in Spain, or visiting often, might spend months here but still retain tax residency in their home country.

This means those looking for investment opportunities can still take advantage of UK tax efficient products such as Finance ISAs – ones which use peer-to-peer lending to offer high rates of return. They may be nothing new but one legal justice firm has upped the ante offering returns of up to 8 per cent a year.

International

Advantages of P2B platforms in lending to SMEs (Lendit Conference Blog) Rated: AAA

In the EU and Australia, SMEs comprise 99.8% of all the firms and employ about 67% of the workforce. To tell the truth, SMEs might be rightfully called the economy, not just the backbone of it. A few other facts that follow are paradoxical. 2 years ago, International Finance Corporation (under World Bank) presented statistics that the gap for underfinanced SMEs around the world stood at 2.6 trillion $. One might expect, the situation got better in recent years with the global economy picking up and showing better and better numbers. On the contrary, most recent statistics from the same institution shows that the gap has widened to 5.2 trillion $.

P2P platforms make lending process global

P2B platforms can connect a business on one side of the world with an investor from another side of the world, and with a third party providing a service from yet another part of the world. All applications for loans can be made online, processed, assessed and the decision made within a matter of a few hours. Compare it to a similar process with the banks and the difference, that of speed and efficiency becomes clear. As an asset (loan) is put on the platform, investors can start investing within a matter of seconds. In such a way, a local business, somewhere in Eastern Europe can get funds from someone (or institutional investors) in UK or Germany and be able to use the collected amount for business operations within a couple of days.

4 developments that will shape the future of fintech (Business Matters) Rated: A

Within the past decade, we’ve seen the landscape of fintech move from a few disruptive start-ups to an industry that’s changing the landscape of business altogether. Consumers are becoming more and more accepting of technology as part of their day-to-day finance, a factor that has stretched the services sector and levelled the playing field with traditional institutions.

For instance, there has been a monumental shift in the way that consumers are managing their money. PwC’s Global Fintech Survey 2017 found that 84% of incumbent financial services providers believed their customers were already making payments with fintech companies, 68% thought customers were conducting fund transfers, and 60% said their clients were using fintech for their personal finances.

Quona Capital leads $ 5 million round for Brazilian small business lender BizCapital (Impact Alpha) Rated: A

Brazilian fintech firm BizCapital launched operations in January to help Brazil’s small business owners secure capital necessary for the day-to-day and growth needs of their businesses. Quona Capital, a financial tech investment firm that spun out of Accion, has led the company’s R$20 million ($5 million) investment round. Two existing investors, Monashees and Chromo Invest, both based in Brazil, also participated.

Roughly 70% of Brazil’s micro and small business owners are shut out of mainstream bank lending and instead resort to taking personal loans, which can carry interest rates as high as 200%. BizCapital offers short-term loans for up to R$150,000 ($40,000) at annual rates in the mid-double digits. The company hasn’t disclosed the size of its loan book but says it’s received more than 100,000 credit requests and serves customers in all 26 Brazilian states.

Australia

Global corporate lending platform, Trade Ledger has warned the Federal Government of substantial weaknesses in its proposed Open Banking implementation plan, when compared to the global best-practice model.

These primarily include the lack of an independent implementation and governance organisation, and limited consumer and small to medium-sized enterprise representation in the development of industry standards.

According to Trade Ledger, these omissions “risk a scaremongering campaign around data security that could stall progress and reduce the scope of the changes, leaving the door open for overseas financial markets to take over our local markets in the new era of Open Banking”.

India

UIDAI Asks Non-Banking Fintech Companies To Stop Aadhaar-Based Services (Inc 42) Rated: AAA

After getting telecom companies to submit their exit plans from Aadhaar-based services, the Unique Identification Authority of India (UIDAI), the Aadhaar regulatory body, has now asked digital payment companies to stop offering any sort of Aadhaar-based service on their platforms.

In a letter, the UIDAI also directed digital payment companies to submit confirmation of closure of Aadhaar-related authentication and their alternative plans to exit from the Aadhaar-based ecosystem.

According to reports, the UIDAI has sent the letter only to non-banking companies such as PayPoint, Eko India Financial Services, and Oxigen Services, among others.

Citing unnamed sources, an ET report stated that banks and payment companies such as Paytm, which have obtained banking licences, have not received the notice.

Africa

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

Now, a proliferation of lenders are using the same technology to extend credit to the banked and unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up.

This week, the finance ministry published a draft bill on financial regulation which covers digital lenders for the first time. A key aim is to ensure that providers treat retail customers fairly, it said.

Authors:

George Popescu
Allen Taylor