Thursday June 7 2019, Weekly News Digest

economic downturn

News Comments Today’s main news: SoFi completes first rated pass-through certificates offering. Y Combinator backs Monzo for U.S. expansion. Funding Circle set for largest securitization. Dianrong shifts strategy. Funding Circle inks 50M Euro deal with Avida Finans. Open raises $30M. Today’s main analysis: Chance for recession is rising (A MUST-READ PeerIQ analysis). Today’s thought-provoking articles: […]

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

economic downturn

News Comments

United States

United Kingdom

International

China

APAC

News Summary

United States

SoFi Completes First Offering of Rated Pass-Through Certificates (PR Newswire), Rated: AAA

SoFi announced today that it completed a $200 million offering of post-graduate student loan asset-backed certificates issued by SoFi Alternative Trust 2019-C (SAT 2019-C). The Certificates are rated single-A by DBRS and mark the first rated pass-through certificate transaction issued by SoFi and the first publicly rated student loan pass-through transaction in the securitization market.

Unlike traditional student loan ABS transactions, SAT 2019-C does not use overcollateralization or bond subordination as forms of credit enhancement.  The A rating assigned to the certificates by DBRS reflects the strong credit attributes of the borrowers. The portfolio has a weighted average credit score of 783 and a weighted average annual income of $175,746.

Y Combinator says Monzo’s community will help it succeed in the US where others have failed (AltFi), Rated: AAA

Leading US startup backer Y Combinator has become the latest high-profile backer of Monzo, on the eve of the bank’s American expansion.

Today Monzo confirmed it had raised £113m in a round led by Y Combinator’s Continuity fund, along with Latitude, General Catalyst, Stripe, Passion Capital and others.

Recession Risks; OCC Charter + Big Tech (PeerIQ), Rated: AAA

Weak economic data continue – inflation expectations tumble, manufacturing has moved into recession, and the 10y/3m yield curve remains mildly inverted. Although the FOMC took no rate action this week, dovish signaling has led market participants to expect a 70% chance of 3 or more rate cuts in 2019.

Source: WSJ, PeerIQ

CPI Since 1879 During Business Cycles

Source: Deutsche Bank, PeerIQ

How A Former J.Crew And Pillsbury Exec Is Applying His CFO Expertise At A Financial Unicorn (Forbes), Rated: AAA

Scott Rosenberg: Kabbage represented a great opportunity for me to apply my prior experiences and help architect the future vision of a fast-growing company. Every role in my career has allowed me to lead or influence multiple divisions within a company, which makes my operational approach similar to that of a COO or General Manager. Beyond leading the CFO office in previous roles, I led Marketing at J. Crew, Operations at Pillsbury and most recently was the President of Purchasing Power. This broad vantage point lets me ensure financial growth as the CFO, but also identify opportunities to establish operational efficiencies more broadly across the organization. I take the same approach at Kabbage as I lead multiple disciplines, including Capital Markets and Legal. It encourages transparency across teams which allows us to move faster. With more than 175,000 customers accessing over $7.0 billion to-date, it’s an exciting role to drive hyper growth and deliver the best products and experiences for U.S. small businesses.

According to a survey released today by Kabbage that polled more than 500 companies across multiple industries, 80% of American entrepreneurs said they felt confident in their readiness to weather another economic crisis.

H&M and Klarna Grow Partnership to US (Yahoo! Finance), Rated: A

H&M and Klarna announced that they have expanded their current partnership agreement to also include the US market, in the development of an unrivalled payments and shopping experience across touchpoints. Together, H&M and Klarna are aiming at further integrating H&M’s digital and physical stores to give customers a seamless, personalised and engaging shopping experience no matter where, when and how they shop.

This Commercial Real Estate Marketplace Provides Direct Investment Opportunities (TheStreet), Rated: A

CrowdStreet, which launched in 2014, is the leading player in the fast-growing field of online commercial real estate investing. The company’s online Marketplace allows individual investors to reap the rewards of investing in the $6 trillion commercial real estate sector, investing in everything from multifamily apartment buildings to self-storage facilities and senior-living centers.

The average return on the first 14 deals financed on CrowdStreet’s platform — those which have fully wrapped up, yielding final returns to investors — is 31.7%, with a 1.6x equity multiple and a holding period of two years.*

MassMutual, CommonBond Team Up to Tackle Student Debt in the U.S. (Mass Mutual), Rated: A

Total student loan debt in the U.S. is now over $1.5 trillion, which prevents many people from passing financial milestones and saving for the future.

Massachusetts Mutual Life Insurance Company (MassMutual) has teamed up with CommonBond to offer a new student loan refinancing program through CommonBond with a rate advantage to help people take control of their student debt. This program – available online to all individuals with student debt today — is among the first of its kind in the student lending and insurance industries. The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual’s network of financial advisors, currently 9,000 strong.

Ocrolus Raises $ 24M to Modernize Workflows with a Human Touch (PR Newswire), Rated: A

Ocrolus today announced $24M in Series B funding led by Oak HC/FT, a premier venture growth equity fund with deep fintech expertise. Ocrolus is powered by an elegant blend of artificial intelligence and crowdsourced human quality control, enabling firms across the financial sector to automate high-stakes business processes with precision. The company will use its new funding to automate underwriting workflows for lenders and banks, and expand into new verticals.

How Citizens Bank is rethinking mobile and online banking (American Banker), Rated: A


Robos are getting political. Will Wall Street follow? (FinancialPlanning), Rated: A

Forged in the wake of the financial crisis and political movements like Occupy Wall Street, digital advisory firms have become decidedly open about their political agendas. By advocating for the democratization of financial advice and stronger consumer protections, digital investment platforms have become the face of progressive politics in the market. That’s attractive to young investors — assets managed on digital platforms are expected to soar to $1.26 trillion by 2023, according to a report by Aite Group.

Cross River gets onboarding system it coveted in fintech deal (American Banker), Rated: A

The $1.5 billion-asset bank agreed on Monday to buy Seed for an undisclosed amount. The 5-year-old fintech offers a mobile account for small businesses, complete with bill payment, remote deposit and an attached debit card.

“It’s About Time” Documentary Sheds Light on Earned Wage Access (PR Newswire), Rated: A

Today, PayActiv, Inc., the leader in employer-sponsored, holistic financial wellness service for employees, unveiled its documentary made in collaboration with Early Light Media and Roundtable Companies about the direct benefits of timely earned wage access. Now available at ItsAboutTimeTheFilm.com, the documentary, titled It’s About Time, looks at pay timing and its correlation with epidemic financial stress being experienced by millions of working Americans.

Fintech MX gets $ 100 million in funding to expand operations (American Banker), Rated: B

The data company MX is set to announce Tuesday an infusion of $100 million from a host of partners, including National Bank of Canada and Washington Federal.

Neighborhood Ventures Closes on Third Investment Property Near Old Town Scottsdale (Yahoo! Finance), Rated: B

Arizona’s first real estate crowdfunding company, Neighborhood Ventures, recently closed on its third investment property, an eight-unit apartment building in Old Town Scottsdale. Ninety Arizona residents invested a total of $550,000 into the purchase of the property, which will be renovated with a plan to operate it as an Airbnb.

United Kingdom

Funding Circle set for its largest ever securitisation (P2P Finance News), Rated: AAA

DEUTSCHE Bank has unveiled more details on Funding Circle’s fourth securitisation, revealing it will be the highest-value package of loans it has offered so far.

The investment bank, which has been mandated as sole arranger and lead manager, said the deal will comprise 3,030 loans, with an aggregate balance of £244m and an average interest rate of 9.91 per cent.

FTSE 250 movers: Funding Circle falters (ShareCast), Rated: A

London’s FTSE 250 fell 0.14% lower to 19,260.07 in afternoon trade on Wednesday, with Funding Circle leading the index lower.

The peer-to-peer lending marketplace was accompanied by fellow financial stocks, with Amigo HoldingsCharter Court Financial ServicesPlus500 and Onesavings Bank all featuring among the top fallers.

OakNorth completes £60m facility for three new retirement schemes (Development Finance Today), Rated: A

OakNorth has completed a £60m loan to Affordable Housing & Healthcare Group (AHH) for the development of three new affordable retirement living schemes.

He said that in retirement he will continue to be a school governor, and that he intended to devote more time to the two charities he is involved with (the other one being Lendwithcare – peer to peer lending to entrepreneurs in a number of Third World countries).

China

Top Chinese peer-to-peer lender to shift strategy after latest fundraising (ETPrime), Rated: AAA

Wu Yujian and Liu Jiefei Dianrong, one of China’s largest peer-to-peer (P2P) lending platforms, said it’s planning a shift in strategy to focus on cooperating with traditional financial institutions as China’s regulators continue to tighten their grip over the industry. The move was revealed on Thursday as the Shanghai-based company confirmed (link in Chinese) it had completed a new

Government Asks Victims of P2P Fraud Case to Register for Compensation (Caixin Global), Rated: A

An intermediate court in Beijing overseeing the Ezubo case said on Wednesday that victims could detail their cases to authorities at local registration sites between July 2 and Aug. 30.

European Union

A very Nordic fintech revolution (Pitchbook), Rated: AAA

Europe is a hotbed of activity when it comes to fintech investments, as the sector continues to mature. Year after year, billions of euros are plowed into promising startups, with last year seeing more than €2.8 billion raised across 438 deals, per the PitchBook Platform.

Below is a list of some of the most innovative fintech companies founded in the Nordics, together with noteworthy investments and backers.

EU Moves Closer To New Bloc-Wide Crowdfunding Rules (Law360), Rated: A

European lawmakers floated new rules on Wednesday to make it easier for businesses and investors to ask the public to fund their projects, bringing the European Union a step closer to forging a common set of rules for national regulators overseeing crowdfunding.

International

Funding Circle strikes €50m loans deal with Sweden’s Avida Finans (AltFi), Rated: AAA

Funding Circle has struck a deal with Swedish finance house Avida Finans to lend an initial €50m to small firms in Germany and the Netherlands this year.

How DeFi startups are providing an alternative to traditional lending (Sociable), Rated: AAA

DeFi lending startups are leveraging blockchain to shake-up the traditional money lending industry.

Digital Assets Kept as Collateral

Salt is one company which has been borne out of the cryptocurrency sector.  Through its platform, digital assets are kept as collateral but returned upon repayment of the loan.

Automated P2P Lending Agreements on Blockchain

ETHLend is another DeFi platform built on top of the Ethereum network.  It creates a means for lenders and borrowers from around the world to establish peer to peer lending agreements over blockchain.

Blockchain Catering to the Unbanked in Latin America

A Blockchain-Driven Lending Circle

A completely different approach is being taken by startup, WeTrust.

When it comes to lending, users can establish a ‘lending circle’ on the platform.

Australia

P2P lender expands presence in third-party space (TheAdviser), Rated: AAA

Peer-to-peer lender RateSetter has announced its new partnership with Choice Aggregation Services (Choice), providing accredited brokers with access to the lender’s personal loan offerings.

P2P lender joins aggregator panel (Broker News), Rated: A

The partnership will make RateSetter’s unsecured personal loan product available to Choice Aggregation Service’s network of more than 1,600 brokers, in line with the trend towards servicing a more diverse array of client needs.

Recognising SMEs’ contribution to the economy (AustralianBroker), Rated: A

Prospa research has highlighted how lending to small business positively affects the economy through contributing to GDP and creating and supporting jobs.

Data released this week by accounting software firm Xero, analysed invoices from 150,000 Australian SMEs and concluded that 53% of trade credit invoices are paid late by big business suppliers and customers – on average 23 days after their due date. Squeezing SMEs, Xero calculates these late payments are worth $115bn.

Technology boosting financial literacy (Financial Review), Rated: A

Technology will need to play a bigger role in boosting the financial literacy of Australians as a large number of financial planners leave the profession, says Bronny Speed, financial advice leader at Chartered Accountants Australia New Zealand.

Speed says as increased educational and licensing standards for Australia’s 29,000 financial advisors will push some out of the market, it will leave a gap in the profession’s ability to provide financial advice and boost literacy.

India

India’s Open ‘neo-bank’ raises $ 30 million to help businesses automate their finances (TechCrunch), Rated: AAA

Open, a Bangalore-based startup that operates a “neo-bank” to help businesses automate and run their finances, has bagged $30 million in a new funding round as investors look to replicate a globally tried and tested business idea in emerging markets.

Open Banking is Disrupting the Traditional Banking System and Indian Neo Banks are Gearing up for it (Entrepreneur), Rated: A

In today’s age of digitisation, it is all about the customer and improving his/her experience. To achieve this goal, banks and fintech companies have to support each other. This change in the ecosystem has invented the concept of neo banking which can be rightly dubbed as the new era of the banking industry.

Govt should look at alternative financing option like P2P lending to solve MSMEs’ credit woes (MENAFN), Rated: A

As Budget is about to come in few weeks, it’s time for the government to look at alternative financing option like P2P lending to solve the credit crisis in Micro Small and Medium Enterprises (MSME) sector, said Rajiv M Ranjan, Founder & CMD, Paisa Dukan.

While sharing the budget expectations, he said, ‘Getting access to institutional credit has been one of the major problems of the MSMEs and to maintain the wealth of the Indian middle class, P2P lending can turn a milestone.

Is fintech reeling under new challenges? (DNA India), Rated: A

The super exciting fintech segment in the start-up ecosystem has been encountering a host of challenges in the recent past. Following a move by the Reserve Bank of India (RBI) to start a regulatory sandbox for the beta-testing of new fintech products in a controlled environment prior to their release, comes the issue of a liquidity crunch in the non-banking finance companies (NBFC) space.

STEADY GAINS

  • Over 1,300 new fintech ventures had cropped up in the sector between 2015 to 2018, according to a data
  • Fintech is a broad sector. It is wrong to connect the NBFC crisis to the whole fintech space
  • For a peer-to-peer (P2P) lending player who is dependent on retail investors for funding loans, maintaining trust is the key challenge
Asia

Singapore is ‘actively studying’ virtual banking licences, says country’s prime minister (SCMP), Rated: AAA

Singapore is actively studying whether to allow companies with no banking parentage to set up virtual banks, paving the way for start-ups like on-demand services operator Grab to potentially enter the formal financial services industry.

KoinWorks Closes $ 12M In Series B Funding Round (PYMNTS), Rated: A

KoinWorks announced that it has raised $12 million in a Series B funding round. The round was co-led by EV Growth and Quona Capital, with participation from existing investors. The funding will be used to expand the KoinWorks team and partnerships, as well as further develop the company’s systems and technology.

Business environment needs strong Gov’t actions: VBF 2019 (Vietnam News), Rated: A

The American Chamber of Commerce in Việt Nam (AmCham) expressed its desire for a highly standardised, transparent and stable business environment so all investors are treated equally.

Concerns were also raised by the Korea Chamber of Commerce in Việt Nam (Kocham) and the Japanese Chamber of Commerce and Industry in Việt Nam (JCCI).

The limit of foreign ownership in local financial firms has also prevented fintech and P2P firms from calling for foreign capital, making them unable to hire talent and keeping their businesses less competitive.

PT ALAMI Fintek Sharia (Alami) came in as the runner-up position in the TaqwaTech Pitch Pit organised by Gobi Partners Venture Capital.

Three companies from Indonesia qualified for the top ten, namely Alami, as well as two marketplace startups for pilgrimage services PergiUmroh.com and Umroh.com.

Authors:

George Popescu
Allen Taylor

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

Thursday June 7 2019, Weekly News Digest

economic downturn

News Comments Today’s main news: SoFi completes first rated pass-through certificates offering. Y Combinator backs Monzo for U.S. expansion. Funding Circle set for largest securitization. Dianrong shifts strategy. Funding Circle inks 50M Euro deal with Avida Finans. Open raises $30M. Today’s main analysis: Chance for recession is rising (A MUST-READ PeerIQ analysis). Today’s thought-provoking articles: […]

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

economic downturn

News Comments

United States

United Kingdom

International

China

APAC

News Summary

United States

SoFi Completes First Offering of Rated Pass-Through Certificates (PR Newswire), Rated: AAA

SoFi announced today that it completed a $200 million offering of post-graduate student loan asset-backed certificates issued by SoFi Alternative Trust 2019-C (SAT 2019-C). The Certificates are rated single-A by DBRS and mark the first rated pass-through certificate transaction issued by SoFi and the first publicly rated student loan pass-through transaction in the securitization market.

Unlike traditional student loan ABS transactions, SAT 2019-C does not use overcollateralization or bond subordination as forms of credit enhancement.  The A rating assigned to the certificates by DBRS reflects the strong credit attributes of the borrowers. The portfolio has a weighted average credit score of 783 and a weighted average annual income of $175,746.

Y Combinator says Monzo’s community will help it succeed in the US where others have failed (AltFi), Rated: AAA

Leading US startup backer Y Combinator has become the latest high-profile backer of Monzo, on the eve of the bank’s American expansion.

Today Monzo confirmed it had raised £113m in a round led by Y Combinator’s Continuity fund, along with Latitude, General Catalyst, Stripe, Passion Capital and others.

Recession Risks; OCC Charter + Big Tech (PeerIQ), Rated: AAA

Weak economic data continue – inflation expectations tumble, manufacturing has moved into recession, and the 10y/3m yield curve remains mildly inverted. Although the FOMC took no rate action this week, dovish signaling has led market participants to expect a 70% chance of 3 or more rate cuts in 2019.

Source: WSJ, PeerIQ

CPI Since 1879 During Business Cycles

Source: Deutsche Bank, PeerIQ

How A Former J.Crew And Pillsbury Exec Is Applying His CFO Expertise At A Financial Unicorn (Forbes), Rated: AAA

Scott Rosenberg: Kabbage represented a great opportunity for me to apply my prior experiences and help architect the future vision of a fast-growing company. Every role in my career has allowed me to lead or influence multiple divisions within a company, which makes my operational approach similar to that of a COO or General Manager. Beyond leading the CFO office in previous roles, I led Marketing at J. Crew, Operations at Pillsbury and most recently was the President of Purchasing Power. This broad vantage point lets me ensure financial growth as the CFO, but also identify opportunities to establish operational efficiencies more broadly across the organization. I take the same approach at Kabbage as I lead multiple disciplines, including Capital Markets and Legal. It encourages transparency across teams which allows us to move faster. With more than 175,000 customers accessing over $7.0 billion to-date, it’s an exciting role to drive hyper growth and deliver the best products and experiences for U.S. small businesses.

According to a survey released today by Kabbage that polled more than 500 companies across multiple industries, 80% of American entrepreneurs said they felt confident in their readiness to weather another economic crisis.

H&M and Klarna Grow Partnership to US (Yahoo! Finance), Rated: A

H&M and Klarna announced that they have expanded their current partnership agreement to also include the US market, in the development of an unrivalled payments and shopping experience across touchpoints. Together, H&M and Klarna are aiming at further integrating H&M’s digital and physical stores to give customers a seamless, personalised and engaging shopping experience no matter where, when and how they shop.

This Commercial Real Estate Marketplace Provides Direct Investment Opportunities (TheStreet), Rated: A

CrowdStreet, which launched in 2014, is the leading player in the fast-growing field of online commercial real estate investing. The company’s online Marketplace allows individual investors to reap the rewards of investing in the $6 trillion commercial real estate sector, investing in everything from multifamily apartment buildings to self-storage facilities and senior-living centers.

The average return on the first 14 deals financed on CrowdStreet’s platform — those which have fully wrapped up, yielding final returns to investors — is 31.7%, with a 1.6x equity multiple and a holding period of two years.*

MassMutual, CommonBond Team Up to Tackle Student Debt in the U.S. (Mass Mutual), Rated: A

Total student loan debt in the U.S. is now over $1.5 trillion, which prevents many people from passing financial milestones and saving for the future.

Massachusetts Mutual Life Insurance Company (MassMutual) has teamed up with CommonBond to offer a new student loan refinancing program through CommonBond with a rate advantage to help people take control of their student debt. This program – available online to all individuals with student debt today — is among the first of its kind in the student lending and insurance industries. The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual’s network of financial advisors, currently 9,000 strong.

Ocrolus Raises $ 24M to Modernize Workflows with a Human Touch (PR Newswire), Rated: A

Ocrolus today announced $24M in Series B funding led by Oak HC/FT, a premier venture growth equity fund with deep fintech expertise. Ocrolus is powered by an elegant blend of artificial intelligence and crowdsourced human quality control, enabling firms across the financial sector to automate high-stakes business processes with precision. The company will use its new funding to automate underwriting workflows for lenders and banks, and expand into new verticals.

How Citizens Bank is rethinking mobile and online banking (American Banker), Rated: A


Robos are getting political. Will Wall Street follow? (FinancialPlanning), Rated: A

Forged in the wake of the financial crisis and political movements like Occupy Wall Street, digital advisory firms have become decidedly open about their political agendas. By advocating for the democratization of financial advice and stronger consumer protections, digital investment platforms have become the face of progressive politics in the market. That’s attractive to young investors — assets managed on digital platforms are expected to soar to $1.26 trillion by 2023, according to a report by Aite Group.

Cross River gets onboarding system it coveted in fintech deal (American Banker), Rated: A

The $1.5 billion-asset bank agreed on Monday to buy Seed for an undisclosed amount. The 5-year-old fintech offers a mobile account for small businesses, complete with bill payment, remote deposit and an attached debit card.

“It’s About Time” Documentary Sheds Light on Earned Wage Access (PR Newswire), Rated: A

Today, PayActiv, Inc., the leader in employer-sponsored, holistic financial wellness service for employees, unveiled its documentary made in collaboration with Early Light Media and Roundtable Companies about the direct benefits of timely earned wage access. Now available at ItsAboutTimeTheFilm.com, the documentary, titled It’s About Time, looks at pay timing and its correlation with epidemic financial stress being experienced by millions of working Americans.

Fintech MX gets $ 100 million in funding to expand operations (American Banker), Rated: B

The data company MX is set to announce Tuesday an infusion of $100 million from a host of partners, including National Bank of Canada and Washington Federal.

Neighborhood Ventures Closes on Third Investment Property Near Old Town Scottsdale (Yahoo! Finance), Rated: B

Arizona’s first real estate crowdfunding company, Neighborhood Ventures, recently closed on its third investment property, an eight-unit apartment building in Old Town Scottsdale. Ninety Arizona residents invested a total of $550,000 into the purchase of the property, which will be renovated with a plan to operate it as an Airbnb.

United Kingdom

Funding Circle set for its largest ever securitisation (P2P Finance News), Rated: AAA

DEUTSCHE Bank has unveiled more details on Funding Circle’s fourth securitisation, revealing it will be the highest-value package of loans it has offered so far.

The investment bank, which has been mandated as sole arranger and lead manager, said the deal will comprise 3,030 loans, with an aggregate balance of £244m and an average interest rate of 9.91 per cent.

FTSE 250 movers: Funding Circle falters (ShareCast), Rated: A

London’s FTSE 250 fell 0.14% lower to 19,260.07 in afternoon trade on Wednesday, with Funding Circle leading the index lower.

The peer-to-peer lending marketplace was accompanied by fellow financial stocks, with Amigo HoldingsCharter Court Financial ServicesPlus500 and Onesavings Bank all featuring among the top fallers.

OakNorth completes £60m facility for three new retirement schemes (Development Finance Today), Rated: A

OakNorth has completed a £60m loan to Affordable Housing & Healthcare Group (AHH) for the development of three new affordable retirement living schemes.

He said that in retirement he will continue to be a school governor, and that he intended to devote more time to the two charities he is involved with (the other one being Lendwithcare – peer to peer lending to entrepreneurs in a number of Third World countries).

China

Top Chinese peer-to-peer lender to shift strategy after latest fundraising (ETPrime), Rated: AAA

Wu Yujian and Liu Jiefei Dianrong, one of China’s largest peer-to-peer (P2P) lending platforms, said it’s planning a shift in strategy to focus on cooperating with traditional financial institutions as China’s regulators continue to tighten their grip over the industry. The move was revealed on Thursday as the Shanghai-based company confirmed (link in Chinese) it had completed a new

Government Asks Victims of P2P Fraud Case to Register for Compensation (Caixin Global), Rated: A

An intermediate court in Beijing overseeing the Ezubo case said on Wednesday that victims could detail their cases to authorities at local registration sites between July 2 and Aug. 30.

European Union

A very Nordic fintech revolution (Pitchbook), Rated: AAA

Europe is a hotbed of activity when it comes to fintech investments, as the sector continues to mature. Year after year, billions of euros are plowed into promising startups, with last year seeing more than €2.8 billion raised across 438 deals, per the PitchBook Platform.

Below is a list of some of the most innovative fintech companies founded in the Nordics, together with noteworthy investments and backers.

EU Moves Closer To New Bloc-Wide Crowdfunding Rules (Law360), Rated: A

European lawmakers floated new rules on Wednesday to make it easier for businesses and investors to ask the public to fund their projects, bringing the European Union a step closer to forging a common set of rules for national regulators overseeing crowdfunding.

International

Funding Circle strikes €50m loans deal with Sweden’s Avida Finans (AltFi), Rated: AAA

Funding Circle has struck a deal with Swedish finance house Avida Finans to lend an initial €50m to small firms in Germany and the Netherlands this year.

How DeFi startups are providing an alternative to traditional lending (Sociable), Rated: AAA

DeFi lending startups are leveraging blockchain to shake-up the traditional money lending industry.

Digital Assets Kept as Collateral

Salt is one company which has been borne out of the cryptocurrency sector.  Through its platform, digital assets are kept as collateral but returned upon repayment of the loan.

Automated P2P Lending Agreements on Blockchain

ETHLend is another DeFi platform built on top of the Ethereum network.  It creates a means for lenders and borrowers from around the world to establish peer to peer lending agreements over blockchain.

Blockchain Catering to the Unbanked in Latin America

A Blockchain-Driven Lending Circle

A completely different approach is being taken by startup, WeTrust.

When it comes to lending, users can establish a ‘lending circle’ on the platform.

Australia

P2P lender expands presence in third-party space (TheAdviser), Rated: AAA

Peer-to-peer lender RateSetter has announced its new partnership with Choice Aggregation Services (Choice), providing accredited brokers with access to the lender’s personal loan offerings.

P2P lender joins aggregator panel (Broker News), Rated: A

The partnership will make RateSetter’s unsecured personal loan product available to Choice Aggregation Service’s network of more than 1,600 brokers, in line with the trend towards servicing a more diverse array of client needs.

Recognising SMEs’ contribution to the economy (AustralianBroker), Rated: A

Prospa research has highlighted how lending to small business positively affects the economy through contributing to GDP and creating and supporting jobs.

Data released this week by accounting software firm Xero, analysed invoices from 150,000 Australian SMEs and concluded that 53% of trade credit invoices are paid late by big business suppliers and customers – on average 23 days after their due date. Squeezing SMEs, Xero calculates these late payments are worth $115bn.

Technology boosting financial literacy (Financial Review), Rated: A

Technology will need to play a bigger role in boosting the financial literacy of Australians as a large number of financial planners leave the profession, says Bronny Speed, financial advice leader at Chartered Accountants Australia New Zealand.

Speed says as increased educational and licensing standards for Australia’s 29,000 financial advisors will push some out of the market, it will leave a gap in the profession’s ability to provide financial advice and boost literacy.

India

India’s Open ‘neo-bank’ raises $ 30 million to help businesses automate their finances (TechCrunch), Rated: AAA

Open, a Bangalore-based startup that operates a “neo-bank” to help businesses automate and run their finances, has bagged $30 million in a new funding round as investors look to replicate a globally tried and tested business idea in emerging markets.

Open Banking is Disrupting the Traditional Banking System and Indian Neo Banks are Gearing up for it (Entrepreneur), Rated: A

In today’s age of digitisation, it is all about the customer and improving his/her experience. To achieve this goal, banks and fintech companies have to support each other. This change in the ecosystem has invented the concept of neo banking which can be rightly dubbed as the new era of the banking industry.

Govt should look at alternative financing option like P2P lending to solve MSMEs’ credit woes (MENAFN), Rated: A

As Budget is about to come in few weeks, it’s time for the government to look at alternative financing option like P2P lending to solve the credit crisis in Micro Small and Medium Enterprises (MSME) sector, said Rajiv M Ranjan, Founder & CMD, Paisa Dukan.

While sharing the budget expectations, he said, ‘Getting access to institutional credit has been one of the major problems of the MSMEs and to maintain the wealth of the Indian middle class, P2P lending can turn a milestone.

Is fintech reeling under new challenges? (DNA India), Rated: A

The super exciting fintech segment in the start-up ecosystem has been encountering a host of challenges in the recent past. Following a move by the Reserve Bank of India (RBI) to start a regulatory sandbox for the beta-testing of new fintech products in a controlled environment prior to their release, comes the issue of a liquidity crunch in the non-banking finance companies (NBFC) space.

STEADY GAINS

  • Over 1,300 new fintech ventures had cropped up in the sector between 2015 to 2018, according to a data
  • Fintech is a broad sector. It is wrong to connect the NBFC crisis to the whole fintech space
  • For a peer-to-peer (P2P) lending player who is dependent on retail investors for funding loans, maintaining trust is the key challenge
Asia

Singapore is ‘actively studying’ virtual banking licences, says country’s prime minister (SCMP), Rated: AAA

Singapore is actively studying whether to allow companies with no banking parentage to set up virtual banks, paving the way for start-ups like on-demand services operator Grab to potentially enter the formal financial services industry.

KoinWorks Closes $ 12M In Series B Funding Round (PYMNTS), Rated: A

KoinWorks announced that it has raised $12 million in a Series B funding round. The round was co-led by EV Growth and Quona Capital, with participation from existing investors. The funding will be used to expand the KoinWorks team and partnerships, as well as further develop the company’s systems and technology.

Business environment needs strong Gov’t actions: VBF 2019 (Vietnam News), Rated: A

The American Chamber of Commerce in Việt Nam (AmCham) expressed its desire for a highly standardised, transparent and stable business environment so all investors are treated equally.

Concerns were also raised by the Korea Chamber of Commerce in Việt Nam (Kocham) and the Japanese Chamber of Commerce and Industry in Việt Nam (JCCI).

The limit of foreign ownership in local financial firms has also prevented fintech and P2P firms from calling for foreign capital, making them unable to hire talent and keeping their businesses less competitive.

PT ALAMI Fintek Sharia (Alami) came in as the runner-up position in the TaqwaTech Pitch Pit organised by Gobi Partners Venture Capital.

Three companies from Indonesia qualified for the top ten, namely Alami, as well as two marketplace startups for pilgrimage services PergiUmroh.com and Umroh.com.

Authors:

George Popescu
Allen Taylor

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

Friday March 30 2018, Daily News Digest

Friday March 30 2018, Daily News Digest

News Comments Today’s main news: LendingClub grows short interest. Larry Summers resigns from LendingClub board. RealtyShares intros gap financing for projects under $20M. Mark Davies steps down from RateSetter board. Today’s main analysis: Heap’s behavior attribution platform. Today’s thought-provoking articles: Can Noto sell mortgages at his new SoFi post? China banks report drop in bad loans. Chinese families rack up […]

Friday March 30 2018, Daily News Digest

News Comments

United States

United Kingdom

China

Other

News Summary

United States

LendingClub Corp (LC) Sees Significant Growth in Short Interest (the Ledger Gazette), Rated: AAA

LendingClub Corp (NYSE:LC) was the recipient of a large increase in short interest during the month of February. As of February 28th, there was short interest totalling 31,244,316 shares, an increase of 11.0% from the February 15th total of 28,142,392 shares. Based on an average daily volume of 9,132,224 shares, the days-to-cover ratio is presently 3.4 days. Currently, 11.3% of the company’s stock are short sold.

Larry Summers Has Resigned From the LendingClub Board (Lend Academy), Rated: AAA

Yesterday, we learned that after nearly six years Mr. Summers will be leaving the board of LendingClub. He is being replaced by leading economist and Stanford professor Susan Athey. While she is not nearly as well known as Larry Summers she still brings serious economics clout to the board.

Heap launches behavioral attribution platform (Venture Beat), Rated: AAA

Source Heap

Heap is aiming to automate insights and is starting today with the launch of Heap Behavior Attribution. The new product is the industry’s first attribution product that measures behavior and does so in a way that requires no data science or engineering resources, the company said.

The Heap Behavioral Attribution measures standard marketing channels (i.e. Google and Facebook), and also ties in a set of broad user behavior, including email, customer relationship management (CRM), shopping cart, customer success, and either-or testing platforms. Examples include user behaviors stored in Salesforce, Marketo, Shopify, Autopilot, Optimizely, Oracle, and more.

Source Heap

It has more than 100 employees and 6,000 customers, including Twilio, Lending Club, App Annie, Morningstar, Monotype, and Casper.

 

RealtyShares Introduces Gap Financing Program For Projects Under $ 20 Million (Business Wire), Rated: AAA

RealtyShares today announced a gap financing program that delivers subordinated financing solutions to commercial real estate owners seeking higher leverage on the financing of projects under $20 million. The suite of solutions, which includes preferred equity, mezzanine debt, and second lien loans, helps commercial real estate operators get the capital they need to buy, refinance, or renovate commercial properties.

He Can Fix Your Student Debt, but Can He Sell You a Mortgage? (Bloomberg), Rated: AAA

As chief operating officer of Twitter Inc., Anthony Noto did a lot to calm the company’s perpetually anxious shareholders. On Feb. 26, however, Noto took over as chief executive officer of a financial technology startup, Social Finance Inc., or SoFi.

He’ll be facing increasingly tough competition. SoFi sees Marcus, the consumer-lending business started by Goldman Sachs Group Inc. in 2016, as the biggest threat, according to people familiar with SoFi’s thinking.

One question Noto will have to navigate is how much SoFi should use its own balance sheet—that is, hold on to the loans it originates as opposed to selling them to other investors. It currently keeps a slice of loans but sells off most of them. Holding loans allows a company to earn a stream of interest income, but investors generally put a lower value on financial firms than tech platforms.

SoFi says it plans to hold 500 events in 2018, up from 41 in 2015.

The wealth management unit, fully launched in May 2017, had $42.3 million in assets under management as of Jan. 18, according to Prosser.

 

Instant Financing Offers Drive Sales, Decrease Cart Abandonment (Retail Touchpoints), Rated: AAA

E-Commerce retailers in the U.S. recognize the value of instant financing offers, and 64% believe providing financing options through their online store is important to driving new and increased sales, according to a survey from Klarna. Another 46% believe such services decrease cart abandonment, which is a pressing concern for retailers.

Instant financing is a revolving line of credit that shoppers can apply for during online checkout, letting them spread payments out over time with low annual percentage rate (APR) offers. The option is particularly appealing to Millennials, as fewer than 33% of them carry credit cards, according to a 2016 Bankrate survey.

Retailers’ enthusiasm for online financing is shared by shoppers, and a 2017 Researchscape International survey conducted on behalf of Klarna found that consumers:

  • Prefer online merchants that offer instant financing (75%);
  • Want to be presented with an instant financing option when shopping online (47%);
  • Would spend more if given instant credit options when making a purchase (39%); and
  • Are very or completely likely to change retailers to use instant financing (28%).

FINANCE THEORY, LISTED EQUITIES, AND LIQUIDITY (AllAboutAlpha), Rated: A

A recent paper from Robeco discusses whether a liquidity premium exists in the stock market. The authors, David Blitz, Jean-Paul van Brakel, and Milan Vidojevic, conclude that “the evidence for such a premium is, at best, weak.”

Less politely, these authors refer to the whole notion of a liquidity premium as having been “challenged and debunked in various studies.”

Theory and Practice

In a sense there “should” be a liquidity premium. The more illiquid a stock, the more difficult it is to trade it, which on some models means that illiquid stocks are less attractive than liquid stocks, and should command a premium. One should have to be bribed to hold an illiquid stock just as one has to be bribed to hold a risky one.

BLACK ENTREPRENEURS, SMALL BUSINESS OWNERS NOT TAKING ADVANTAGE OF SBA OFFERINGS (Black Enterprise), Rated: A

Here is a surprising statistic: Over 80% of small business owners have never visited their local U.S. Small Business Administration office.

The finding was revealed as part of a random survey of 409 owners and senior leadership at small businesses by national online lender Fundera and online research firm Qualtrics.

Fundera also offers a list of other resources black entrepreneurs can tap into to help them get help with everything from how to run a small business to becoming a certified minority business.

Marketplace Lending Update #2: Another Rocky Mountain Remand (The National Law Review), Rated: A

In our prior Clients & Friends Memo “Who’s My Lender?” published on March 14, 2018, we analyzed two actions brought against marketplace lenders, one against Kabbage Inc. (“Kabbage”) in federal court in Massachusetts1 and the other against Avant in federal court in Colorado.2 In that memo, we noted that the Massachusetts action against Kabbage is proceeding to arbitration, while the action against Avant was remanded to state court.

Last week, Colorado courts issued several new rulings related to marketplace lending. First, the federal court in Colorado remanded another enforcement action brought by the Administrator of the Colorado Consumer Credit Code against Marlette Funding (“Marlette”),3 which had been doing business as a marketplace lender in Colorado under the name Best Egg. Following the reasoning in the Avant decision discussed in our prior memo, the court rejected the marketplace lender’s argument that Colorado’s usury laws were subject to complete preemption under federal law and therefore the court granted plaintiff’s motion to remand. As a result, Avant and Marlette will be forced to make their arguments that a bank is the “true lender” and that the Colorado Administrator’s usury claims are therefore preempted by federal law, and any other defenses, in Colorado state court.

KBRA Comments on Cross River Bank’s Settlement with the FDIC (Business Wire), Rated: A

The FDIC announced yesterday that it had reached settlements with Cross River Bank (“Cross River”) and Freedom Financial Asset Management (FFAM). Kroll Bond Rating Agency (KBRA) believes that the settlement and related consent order have a low likelihood of adverse impact upon the credit profile of Cross River and that of its parent, CRB Group, Inc. (CRB). While FFAM represents a very small portion of Cross River’s customer base, KBRA believes any adverse regulatory action draws heightened scrutiny to Cross River and the MPL industry, a factor already considered in the current ratings. Furthermore, KBRA believes that the matters cited by the FDIC were isolated instances and is not representative of pervasive issues with Cross River’s Compliance Management System (CMS). Nonetheless, we believe that has Cross River has since adopted enhanced compliance and reporting requirements consistent with FDIC guidance and incorporated enhancements to their CMS.

Enacomm and VOX Network Solutions to Provide Financial Institutions with Data-Driven Phone and Digital Assistant Banking (Global Newswire), Rated: B

VOX Network Solutions (VOX) has announced a partnership with Enacomm, Inc. (Enacomm) to bring Enacomm’s self-service solutions to VOX clients.  Through the reseller agreement, financial institutions will be equipped with VPA (Virtual Personal Assistant) banking and the Enacomm Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

Crypto Asset Expert David Drake Joins Advisory Board of Digits (Nothing in Particular Blog), Rated: B

Digits, a leading crypto company using technology aimed to combine the convenience of credit and debit card payments with the utility of cryptocurrency payments and to easily allow the consumer the ability to effortlessly pay for goods and services with crypto via their existing credit or debit card, announced today the addition of a highly respected crypto expert, David Drake, to its advisory board team.

United Kingdom

Betfair founder Mark Davies steps down from RateSetter board (Peer2Peer Finance), Rated: AAA

MARK Davies has stepped down from the board of RateSetter after more than six years.

Davies, who was part of the founding management team at e-gaming company Betfair, joined the board of the peer-to-peer lender as a non-executive director in November 2011 – just 13 months after the company’s launch.

Data gatherers should be regulated like financial advisers (Financial Times), Rated: A

There was a time in the UK when most people were under the impression that financial advice was free. They went to see an adviser. He gave them advice. They handed over their money to him to be looked after. They never got a bill.

Only when the government changed the laws in 2012 did they realise they were paying. A lot. They just hadn’t noticed for the simple reason that they did not physically pay it to the adviser.

Deal maker Numis on the front foot after M&A numbers surge (Evening Standard), Rated: A

The City broker, which worked on the Trinity Mirror takeover of the Daily Express, and the sale of cocktail bar Revolution, said sales would be “significantly ahead” of £53 million recorded last year.

Since September, the company has worked on big deals like  the Mirror-Express takeover, the £600 million float  of car insurer Sabre and  the Aveva tie-up with Schneider’s electrical business.

Numis is also lined up to work on AJ Bell’s £500 million float and Funding Circle’s £1.5 billion float later in the year.

Shares rose 1.5%, gaining 5.5p to 365p.

One year to Brexit: How to protect you finances (Money Observer), Rated: A

Brexit is officially one year away and the impact it is having, and will continue to have, on our financial lives is filling the pages of our newspapers and TV screens daily.

Foreign currency

Since the Brexit vote in June 2016, sterling has fallen significantly in value against the euro. The pound reached a high of €1.42 in October 2015, but at the time of writing on 20 March 2018, it was worth 21 per cent less at €1.14, according to currency specialist Moneycorp.

Typical transaction costs for using your card abroad are between 2.75 and 2.99 per cent, and you will be charged a non-sterling purchase fee of up to 1.25 per cent on top.

Each time you use an ATM abroad, you can also be charged anything from £1.50 to £2 a time, so it is wise to withdraw larger sums in one go or to get a specialist overseas card that allows fee-free spending and cash withdrawals, according to Nick England, chief executive of travel money firm EasyFX.

Where are the current UK BTL hot spots? (Property Reporter), Rated: B

The latest UK buy-to-let index from property finance experts, LendInvest, has shown that the Midlands appears unaffected by the UK’s current house price growth slowdown, sending three of its largest cities into the top 5 places to invest – but where came out top?

  1. 1.  Colchester
  2. 2.  Northampton
  3. 3.  Leicester
  4. 4.  Luton
  5. 5.  Birmingham
  6. 6.  Manchester
  7. 7.  Ipswich
  8. 8.  Brighton
  9. 9.  Rochester
  10. 10.  Norwich

Together appoints new regional development director (Bridging & Commercial), Rated: B

Together has expanded its professional sector team with the appointment of Mel Fourie as its new regional development director.

Mel joins the specialist lender from RateSetter, where she was its strategic partnership manager covering the North of England.

China

Big four China banks report first drop in bad loans in 6 years (Asian Review), Rated: AAA

Industrial and Commercial Bank of ChinaChina Construction BankAgricultural Bank of China and Bank of China had a total of 765.7 billion yuan ($122 billion) in non-performing loans on their books at the end of 2017, marking a 0.2% drop on the year.

Non-performing loans ratios — a gauge of asset quality — averaged 1.57% at the four state-owned lenders, 0.15 percentage point less than at the end of 2016. “Special mention” loans with an elevated potential for default decreased 0.9% to 1.59 trillion yuan. All four banks had reported 2017 results as of Thursday.

Famous for hoarding cash, Chinese families are now racking up debt on an unprecedented scale (South China Morning Post), Rated: AAA

Chinese families with their long tradition of saving money are now accumulating debt at a rate never been seen before, according to data compiled by a state-backed think tank in Beijing.

The country’s household leverage ratio – or the ratio between debt incurred by families and gross domestic product – surged to 49 per cent at the end of last year from 17.9 per cent at the end of 2008, going up about 3.5 percentage points annually, the think tank said in a report released on Thursday.

So in the period from 1993, when the data became available, to 2008, the household debt ratio went from 8.3 per cent to 17.9 per cent, with an annual rise of 0.65 percentage points.

According to its report, average disposable income could cover standard loan interest and mortgage repayments, while households were still sitting on 70 trillion yuan (US$11.13 trillion) worth of bank deposits and cash overall – enough to offset the 40 trillion yuan in outstanding bank debt.

Dianrong and Sino Guarantee Announce Lenders Protection Plan (PR Newswire), Rated: A

Dianrong and China United SME Guarantee Corporation, known as Sino Guarantee, one of China’s leading guarantee companies, today announced a new lenders protection plan for Dianrong customers. The plan, which went into effect at the beginning of 2018, is designed to provide third-party protection in the event of a loan default.

Dianrong’s borrowers now have the option to purchase the Sino Guarantee lenders protection plan, which further improves the borrower’s risk and credit profile. Sino Guarantee will then use a dedicated fund account to pay lenders the loan principal and any outstanding interest in the event of a loan default covered by the plan.

European Union

Spotcap Roundtable: Customers Expect More as Fintech Boosts User Expectations (Crowdfund Insider), Rated: A

Spotcap, an SME focused online lender based in Berlin, recently held a roundtable on the future of finance. Individuals from prominent firms joined with the Fintech lender to assess progress made so far. Representatives from Deutsche Bank, Figo, GP Bullhound, McKinsey along with Spotcap debated how the financial ecosystem model will evolve, the implications for the customer, and the challenges and opportunities for Fintechs and more traditional financial service firms.

International

Alt.Estate To Become an Industry Standard for Blockchain-Based Real Estate Transactions (the Merkle), Rated: A

Using the blockchain technology to disrupt the real estate market, Alt.Estate has a strong potential to become an industry standard for the blockchain-based real estate transactions. A strong technology stack, a go-to-market strategy with 10X leverage, a working prototype with three tokenized apartments in key geographies, strong community support, and a solid pipeline of enterprise deals all position Alt.Estate as a win-win solution for real estate developers and investors.

Estimated at $217 trillion, the real estate market is worth nearly 2.7 times the global GDP.

“ERC-20” FOR REAL ESTATE

Developed two years ago, ERC-20 has quickly become a significant industry standard for all the tokens on Ethereum. Inspired by the approach of ERC-20 developers, Alt.Estate’s Protocol aims to become an industry standard for the tokenized real estate.

 

Asia

This Startup Combines FinTech And Traditional Lending Circles To Empower Women (Forbes), Rated: AAA

When Fonta Gilliam joined the foreign service out of school, she didn’t expect it would lead her to entrepreneurship. But after seeing community lending in practice throughout her work in East Asia and Africa, Gilliam wondered what would happen if she combined these traditional practices with new financial technology.

It all started when Gilliam was working in the visa department at the embassy in South Korea.

The practice of a lending circle is a kind of informal savings program. Say you have 10 members who each put $100 into the lending club each month. One member collects the full 1,000 each month and each month the total amount rotates until 10 months has passed and the circle starts back at the beginning.

Proptech – the emerging disruption in real estate (The Business Times), Rated: A

In proptech, three forms of technologies are particularly pertinent and pervasive: blockchain, augmented reality (AR) and artificial intelligence (AI). In Singapore, these technologies are already making their impact felt in the real estate industry with their adoption by startups, global corporations and the government.

Blockchain: facilitating real estate transactions

A form of distributed ledger, the blockchain is distributed across nodes, locations and even countries. Being decentralised, it eliminates the need for an intermediary to process, validate or authenticate transactions.

Artificial intelligence: extracting insights from data

The most valuable tech companies (Facebook, Amazon, Netflix, Google) are where they are today because of the trove of consumer data they possess and continue to accumulate. In the realm of technology, data is wealth, and AI is the key to unlocking this wealth. AI, as the name suggests, is teaching the computer to think like a human, making sense of the data fed to it.

Proptech: transforming real estate in Singapore

Cognisant of the need to keep up with change, the Singapore government has introduced an Industry Transformation Map (ITM) for the real estate industry. The ITM is focused on using automation, digitised contract templates, and predictive systems to streamline processes for property transactions and facilities management.

MENA

How GISC LoanCoin Network (GIS) is democratizing Credit with its Blockchain P2P, B2B & Altcoin Lending Platform (MenaFn), Rated: AAA

GISC uses a strict proprietary model composed of a fundamental and technical analysis strategy. So when their analysts suggested that cryptocurrency are poised to outperform in developing nations for some years to come, the company dedicated to coming up with a solution that would basically democratize lending of blockchain digital assets on a global scale.

GISC LoanCoin Network platform is designed with an aim of bridging traditional lending services to the blockchain and opening access to the non-banked. GISC LoanCoin Network is a Ethereum blockchain utility token based lending platform that will support P2P and B2B lending by eliminating intermediaries like banks and other financial institutes. It’s a platform where borrowers can interact and deal directly with the lender and GIS token holders can earn income by becoming Lenders or Guarantors.

GISC differs from other lending platforms like ETHLend and SALT in a way that GLN lends against Altcoins and this feature is yet to be introduced by any other lending platform. The platform usually takes a low, around 2% transaction fee for credit assessment/KYC-AML/ ID verification and connection through the network.

Authors:

George Popescu
Allen Taylor