Wednesday May 16 2018, Daily News Digest

Lending Tree Stock price

News Comments Today’s main news: Auto loan delinquency rate hits 5.8%. RateSetter reaches 100M GBP in investor returns. Marcus may expand to Germany. OurCrowd surpasses $1B AUM. liwwa lends $11M to SMEs. Today’s main analysis: LendingTree among the 5 worst finance sector stocks, according to Nasdaq. Today’s thought-provoking articles: 3 ways technology shifts consumer approach to debt. New reporting rules […]

Lending Tree Stock price

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United States

Anthony Noto’s first shareholder letter as SoFi CEO outlines company values, growth areas (CNBC) Rated: AAA

But it’s the growth of new products at SoFi that will most likely attract the attention of investors, as the company tries to justify its $4.4 billionprivate market valuation.

In the letter, Noto said the SoFi at Work program, which partners with companies to help their employees pay off student loans and other debt, expanded its funded loan volume by 118 percent from a year earlier. The program, used by over 700 businesses, was launched in September 2016, so the growth is coming off a small base from last year at this time.

SoFi CEO Noto on 3 things his fintech company must do from CNBC.

Auto Loan Delinquency Rate Reaches High of 5.8 Percent (PYMNTS) Rated: AAA

Borrowers in the U.S. are defaulting on subprime auto loans at a higher rate than during the financial crisis in 2008.

Data from Fitch Ratings shows that the delinquency rate for subprime auto loans more than 60 days past due reached the highest since 1996 at 5.8 percent.

The default rate during the 2008 financial crisis was around 5 percent.

 

5 Worst-Performing Finance Sector Stocks to Steer Clear Of (Nasdaq) Rated: AAA

Based in Charlotte, NC, LendingTree, Inc. TREE operates as an online loan marketplace for consumers seeking loans and other credit-based offerings. This Zacks Rank #5 stock has a VGM Score of D. Shares of the company have lost 18% so far this year. The 2018 earnings estimates have been revised 5.7% down over the last 30 days.

Source: Nasdaq

3 Ways Technology Is Shifting Consumers’ Approach to Debt (Newsmax) Rated: AAA

The emergence of fintech and blockchain are making the loan experience streamlined and accessible to ordinary consumers, as well as to people who have issues with their credit score, businesses interested in alternative interest plans and people who are hesitant about taking loans from banks for whatever reason.

Peers Over Institutions

P2P lenders pool together smaller amounts contributed by investors and lend the money out to consumers through digital platforms. Recently, P2P platforms like Lending Club and Prosper are making available loanable amounts of around $30,000 to $40,000 at competitive interest rates and with easier application processes.

Credit Scores Matter Less

As of 2017, those aged 18-29 have an average score of just 652 which is lower than previous generations and has become an issue as they start settling down and are in need of loans for mortgages.

Fintech and blockchain, however, are starting to minimize the overall impact of credit scores in an effort to bring more financial inclusion. They can include factors such as: salary, purchasing history, educational attainment, and even social media activity.

The Drive to Decentralize

The centralized approach of financial institutions controlling the people using their systems financial activities is also being challenged.

Decentralization has been key to blockchain’s growing appeal.

 

 

Earnest vs. SoFi: Which Personal Loan Is Best for You? (Student Loan Hero) Rated: A

It’s possible to get up to $100,000 from SoFi. With Earnest, you’re limited to a maximum of $75,000.

Source: Student Loan Hero

Because you can borrow more with SoFi, you also get access to longer loan terms — up to seven years. The longest term with an Earnest loan is five years.

Finally, SoFi doesn’t have a minimum credit score requirement, while you need a score of at least 680 to qualify for a loan with Earnest.

Even though Earnest has a minimum credit score of 680, the lender also takes into account your education, job history, and other data to help determine an interest rate.

Private Equity’s Plan to Beat the Low-Cost Investing Robots (Bloomberg) Rated: A

Private equity firms smell money in the financial advice business. Last month, Hellman & Friedman LLC paid $3 billion to buy Financial Engines Inc., an online retirement planning service. Thomas H. Lee Partners LP in October took a stake in HighTower, a Chicago-based wealth adviser with $50 billion under management at the time. And in April 2017, private equity giant KKR & Co. and Stone Point Capital LLC bought a majority share of Focus Financial Partners LLC in a deal that valued the wealth manager at $2 billion.

 

Ex-Citi, Comcast execs raise $ 100M more for Fair Square credit cards (The Enquirer) Rated: A

Fair Square Financial LLC, the two-year-old, 50-worker Wilmington company that markets the Ollo credit card, says it has raised $100 million more from Orogen Group, the New York investment firm headed by former Citigroup CEO Vikram Pandit; Atairos Group, headed by former Comcast chief financial officer Michael Angelakis; and others.

Fair Square, which has lent MasterCard holders about $400 million since early last year (using the Bank of Missouri’s lending powers), is one of a string of software-intensive lenders and financial service firms that have sprung up in Wilmington in recent years, capitalizing on the area’s concentration of credit card managers and workers.

Cracking 2 Myths Of Online Lending (Benzinga) Rated: A

Of the many informative and innovative sessions powering the 2018 Benzinga Global Fintech Awards, none may be as important to the future of lending as the fireside chat between Cornelius Hurley, Executive Director at Online Lending Policy Institute, Colin Darke, General Counsel at Rocket Loans, and Jeremy Potter, Associate Counsel at Quicken Loans.

One of the main catalysts of the chat was a discussion about Hurley’s two main myths surrounding the future of lending:

  • Online lending is unregulated and is a shadow banking component.
  • There is a nexus between payday lending and online lending.

AlphaPoint Launches Framework for Real Estate Blockchain Tokens (CoinDesk) Rated: A

A longstanding real estate and private equity firm, Muirfield Investment Partners, has joined with AlphaPoint in an effort to offer its investors a more easily tradeable way to participate in the property market.

The idea is to use blockchain as a conduit for introducing more liquidity into the real estate market.

AlphaPoint’s plan is to see everything go on the blockchain. The actual asset won’t be on paper and tokenized, but that documentation will be stored using the tech. Further, it can use software to pay out dividends, if those are part of the deal, and to ensure that assets aren’t transferred to people they shouldn’t be.

Need to attract millennials? Offer student loan benefits (HR Morning) Rated: A

If you want to attract and retain millennials, it’s all about the benefits. And no perks are more sought after among this group than studen loan benefits. In this post, guest author Alyssa Schaefer, the chief marketing officer of Laurel Road, a national online lender, explains why employers can’t wait to roll out student loan benefits if they’re serious about hiring the best and brightest millennials.

BorrowersFirst Shut Down: What This Means for Current and Prospective Borrowers (Student Loan Hero) Rated: A

That’s why it’s so frustrating when the company you borrowed from sells your loan to another lender or stops servicing loans altogether.

Unfortunately, if you have BorrowersFirst personal loans, that’s exactly the position you’re in. BorrowersFirst no longer offers personal loans or manages loans for people who borrowed from it in the past.

Market Guide for Identity Proofing and Corroboration (Whitepages PRO) Rated: A

In the new guide, Gartner discusses these key findings:

  • Data breaches have led to rampant compromise of personally identifiable information (PII). As a result, correctly reciting PII is worthless as a stand-alone method of corroborating a person’s claimed identity.
  • Onerous “identity proofing” methods for new-account opening and as part of step-up or multifactor authentication use cases increase customer abandonment. This creates a competitive liability when customer attrition and market share loss exceed the potential fraud loss.
  • Many technologies used in online fraud detection use cases, such as device reputation, can be used in identity proofing and substantiation use cases. In addition, these technologies can be invoked to elevate trust during subsequent interactions.

How Peer-To-Peer Financing Could Open Up the Property Market to Millennials (Leap Rate) Rated: A

Peer-to-peer (P2P) lending has increased in popularity over recent decades, spurred on by the age of connectivity. Blockchain startups have been quick to recognize the benefits that the new technology can bring to P2P finance, directly connecting individuals who wish to exchange value without the need of any intermediaries such as banks.

Now, one startup plans to use artificial intelligence (AI) and machine learning in combination with blockchain technology to create a P2P lending platform for home loans. This could prove to be an ideal solution for frustrated millennials, who may be more open to using new technology to achieve their property ownership goals.

Beyond bitcoin: Blockchain firms look to provide social good (BizWest) Rated: B

Possible social good applications include peer to peer lending, digital identities (ideal for refugees), protection against runaway inflation, campaign finance reform, direct democratic votes, solar energy trading and freedom of speech free from censorship.

United Kingdom

RateSetter Milestone: £100 Million in Investor Returns (Crowdfund Insider) Rated: AAA

UK Peer-to-peer lending platform RateSetter has topped the milestone of returning £100 million in pre-tax interest payments to its investors. RateSetter reports accomplishing this without any individual investor losing a penny.

 

New reporting rules push down Funding Circle fund’s returns (Peer2Peer Finance) Rated: AAA

THE Funding Circle SME Income Fund (FCIF) has reported its first drop in net asset value since 2016 after adopting new IFRS 9 reporting standards.

The new accountancy standards mean funds have to include potential losses in their portfolio. The fund, which invests in loans originated by peer-to-peer lender Funding Circle, revealed its returns were down 0.6 per cent in April after allowing for a 1.1 per cent provision.

This was the first drop in NAV since the fund’s first monthly update in November 2015 when it was down 0.1 per cent. The NAV had been consistently positive up until last month.

European Union

Goldman Sachs eyes Germany for expansion of Marcus (Financial Times) Rated: AAA

As Marcus looks to launch a UK savings product soon the bank is already eyeing additional European markets; they plan to make Germany the next stop, though it might be looking at 2019 or beyond; Marcus is slowly becoming an important part of the overall Goldman strategy as they look to diversify; their consumer brand has a goal to boost Goldmans’ revenues by 5 percent in three years.

 

Azbit ICO (AZS Token): Crypto Exchange And Investment Platform? (Bitcoin Exchange) Rated: A

Azbit, found online at Azbit.com, is an online trading platform that comes with built-in margin trading and algorithmic trading tools.

A pre-ICO Azbit tokens begins on July 1, 2018.

Azbit has an electronic payment system that will provide support and processing for all online and cryptocurrency payments, then offer additional services like instant exchange, a P2P debt platform, and P2P lending backed by your crypto portfolio.

Lithuania central bank welcomes Chinese FinTech companies (English News) Rated: B

Lithuania invites Chinese companies and investors to take advantage of a friendly and flexible FinTech environment in the country which offers broad development possibilities, chairman of the Board of the Bank of Lithuania, said on Tuesday ahead of his trip to Beijing.

It is estimated that by 2024 the annual growth of the global peer-to-peer lending market will amount to almost 50 percent in the country.

MENA

OurCrowd Surpasses $ 1 Billion AUM (Finovate) Rated: AAA

Equity crowdfunding platform OurCrowd recently reached a major milestone. The Israel-based company has surpassed $1 billion in assets under management.

OurCrowd is currently backing 150 startups across the globe and has previously helped 20 startups successfully exit from funding since its launch in 2013. One of OurCrowd’s most notable investments is Hyperloop, which it backed before Virgin Group invested in the company last year.

Jordanian fintech start-up lends over $ 11 million to SMEs (CPI Financial) Rated: AAA

liwwa, an Amman-based fintech startup and a peer-to-peer lending platform, announced the issuance of over $11 million in debt to small businesses across more than 300 loans since its inception.

Africa

Cellulant Raises $ 47.5M in Series C Funding (Finsmes) Rated: AAA

Cellulant, a Nairobi & Lagos–based digital payments provider, raised $47.5M in Series C funding.

The round was led by TPG Growth’s The Rise Fund, with participation from Endeavor Catalyst, Satya Capital, Velocity Capital & Progression Africa.

Led by Ken Njoroge, co-founder and Group CEO, and Bolaji Akinboro, co-founder and CEO, Cellulant Nigeria, Cellulant provides a digital payments platform that delivers connected, flexible payment options for consumers and businesses, and works with financial institutions, governments and mobile network operators to increase transparency and expand their reach in Africa.

 

Authors:

George Popescu
Allen Taylor

Wednesday April 18 2018, Daily News Digest

Wednesday April 18 2018, Daily News Digest

News Comments Today’s main news: OnDeck prices $225M securitization. Prosper is looking for new whole loan contributors for securitizations. Funding Circle lends 123M GBP to businesses in March. Funding Circle SME considers new equity raise. Ant Financial to raise $9B. Today’s main analysis: Competition among lenders worth $27K to borrowers last week. The grad degrees that deliver more debt than […]

Wednesday April 18 2018, Daily News Digest

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United States

On Deck Capital (ONDK) Prices $ 225 Million Securitization (Street Insider) Rated: AAA

OnDeck announced today that it has priced $225 million initial principal amount of Series 2018-1 Fixed Rate Asset-Backed Notes (the “Notes”) in a private securitization transaction. The Notes, which will be issued in four classes, were priced with a weighted average fixed interest rate of 3.75% per annum. It is expected that DBRS, Inc., in satisfaction of one of the closing conditions, will rate the Notes at closing. The anticipated DBRS rating for the Class A Notes would be the highest rating ever for a class of notes in an asset-backed securitization of small business loans in the online lending industry.

The Notes will be issued by OnDeck Asset Securitization Trust II LLC (the “Issuer”), a wholly-owned subsidiary of OnDeck. The Notes will be secured by and payable from a revolving pool of OnDeck small business loans. The Issuer will be the sole obligor of the Notes; the Notes will not be obligations of or guaranteed by OnDeck or any of its other subsidiaries. OnDeck will act as the servicer of the loans securing the Notes.

The net proceeds from the Notes offering will be used by the Issuer together with other available funds to optionally prepay in full a prior notes issuance (the “Old Notes”) that had a weighted average interest rate of 4.7% at December 31, 2017.

Prosper to keep PMIT shelf, but seeks new blood as loan agreement winds down (GlobalCapital) Rated:AAA

Prosper will continue to issue ABS from its long standing PMIT shelf, but is looking for new whole loan contributors for its securitizations as it eyes the end of a loan consortium agreement inked last February.

Prosper’s securitizations will retain the multi-seller deal format, in which whole loan investors contribute collateral to the securitizations, said three people speaking with GlobalCapital on the sidelines at the LendIt Fintech USA 2018 event in San Francisco.

Anthony Noto on leaving Twitter for SoFi, and what comes next (Axios) Rated: AAA

Former Twitter chief operating officer Anthony Noto just finished his first month on the job as CEO of SoFi, the “unicorn” financial services company whose former CEO was booted late last year after allegations of sexual misconduct.

Axios spoke to Noto about the new job, growth plans, recruitment and that long-rumored IPO. The quick read:

  • He had always wanted to be a CEO, and felt he had accomplished what he set out to do at Twitter.
  • He believes SoFi is a cultural reclamation project, but that the core business is strong.
  • SoFi wants to launch a membership-type credit card.
  • The firm has no plans to either IPO or fundraise in 2018.
On joining SoFi as CEO, after stops at Twitter and Goldman Sachs:

“This opportunity leverages all of my professional background as a tech person, as a consumer-facing person and from a financial industry perspective.

Heard at LendIt Fintech 2018 (Crowdfund Insider) Rated: AAA

Scott Sanborn, CEO of LendingClub:

“A reckoning is coming. The US is ground zero.There is a 37 trillion dollar shortfall in the retirement sector. This is coming and we cant just think we have 32 years to solve this problem.”

Omer Ismail, Chief Commercial Officer of Marcus:

“Since we launched 18 months ago we have done $3 billion in loans and we have $20 billion in deposits and about 500,000 in customers.”

Max Levchin, CEO and founder of Affirm:

“There are 10 to 15 million people in this country who need money and can probably borrow responsibly yet they end up at payday lending.”

Jay Farner, CEO of Quicken Loans:

“If a mortgage can be done in 10 [days] a personal loan can be done in 1 [day]”

In a Bad Month for Public Equity Markets, Local Isn’t Spared (Street Fight) Rated: AAA

Source: Street Fight

Coming off one of the worst months in recent memory, March saw big declines in the public equity markets. The SCP SMB Index was the least impacted, retreating 4.1% compared to all other major indices, which declined more than 5% during the month.

The SCP SMB Index declined 4.1% in March. The S&P 500, Nasdaq, and Dow Jones all experienced losses during the month of 5.1%, 5.2%, and 6.1%, respectively.

Returns since inception (indexed at Jan 4, 2016)

Since the inception of the SCP SMB Index in January 4, 2016 (where 100% is no change), here are the returns through March 29, 2018:

  • SCP SMB Index : 144.47%
  • S&P 500: 129.43%
  • Nasdaq : 141.73%
  • Dow Jones : 139.07%

Competition Among Lenders Worth Over $ 27,000 to Borrowers Last Week (Lending Tree) Rated: AAA

We calculate the Mortgage Rate Competition Index weekly as the median spread between the lowest and highest APR offered by lenders in our marketplace. By calculating this spread, we hope to show consumers how much they stand to save by comparing rates during the lending shopping process.

Purchase loans

  • Across all purchase loan applications on LendingTree for the week ending April 8, the index was 0.59, up 0.03 from the previous week.
  • How big of a deal is it to nab a mortgage rate that’s 0.59% lower than the competition? Over 30 years, that could translate to $27,339 in savings on a $300,000 loan (see Mortgage Savings Tracker graphic below).

Refinances

  • The index was wider in the refinance market at 0.65, up from 0.63 the prior week.
  • Borrowers shopping for refi loans could have saved $30,329 by shopping for the lowest rate.

Which Graduate Degrees Deliver More Debt than Income? (Credible) Rated: AAA

Credible’s analysis of student loan debt levels and salaries across 16 graduate school majors shows that the most important consideration isn’t how much debt you’ll take on to obtain an advanced degree — or how much you’ll earn after graduation — but achieving the right balance between the two.

Key highlights

  • A Credible analysis of more than 91,000 graduate degree holders with student loans found significant debt and income differences across 16 graduate degree majors.
  • Dentists, optometrists, and veterinarians tend to have student loan debt that’s the most out of balance with their earnings soon after graduation.
  • Even years out of school, optometrists, veterinarians, physician assistants, dentists and pharmacists devote more than 10 percent of their monthly income to their student loan payments.
  • Computer scientists, MBA holders, people with masters in finance degrees (not MBA) and nurses allocate the smallest proportion of their monthly earnings to pay down their student loan debt (between 6.4 and 7.1 percent).

AUTOGRAVITY EXPANDS VEHICLE FINANCING OPTIONS TO INTERNATIONAL STUDENTS THROUGH A NEW PARTNERSHIP WITH WESTBON (Lendit) Rated: A

AutoGravity, a FinTech pioneer that empowers car shoppers to buy and finance any new or used car in minutes from their smartphone, today announced a partnership with Westbon, the first lending platform for international students in the U.S. Through this unique partnership, Westbon financing options are now accessible to international students who use AutoGravity to finance their vehicle in the United States.

FINITIVE LAUNCHES ALTERNATIVE LENDING INVESTMENT PLATFORM WITH $ 1.3 BILLION OF INITIAL TRANSACTION VOLUME (Lendit) Rated: A

​Finitive LLC (www.finitive.com), a financial technology platform providing institutional investors with direct access to alternative lending investments, announced today the launch of its zero-fee platform.

Finitive, which commenced operations in August 2017, has received commitments for transactions with an aggregate capacity of $1.3 billion. Several asset managers and banks have committed capital for transactions in the consumer, renewable energy and commercial real estate lending sectors.

NSR Invest secures growth financing with FinSight Ventures (Lendit) Rated: A

Lend Core Inc., parent company to NSR Invest and LendingRobot, announced today the close of its first external financing round with FinSight Ventures. The investment will help the company expand its investor outreach, accelerate product development and strategic partnerships. FinSight Ventures General Partner, Alexey Garyunov, and Investment Director, Maxim Nazarov, will join Lend Core’s Board of Directors.

The company’s core technologies drive innovation through interactive analytics, custom modeling, algorithmic investing, order execution, portfolio management, and transparency through blockchain application.

Alchemy Peer-to-Peer Lending Will Help Millennials Dominate the Future of Finance (TechBullion) Rated: A

One blockchain startup, Alchemy, is using the technology to create a peer-to-peer (P2P) lending system that ensures transparency and guarantees security to its participants.

Alchemy works by matching lenders and borrowers for the requested amount of capital. Because of the instant, global, and secure peer-to-peer interactions that blockchain facilitates, costs of service are kept incredibly low. Interest rates are kept as close to a free market determination as possible, ensuring a fair consumer experience that often eludes customers of big banks.

Quovo Launches New Products to Improve Lending Value Chain (Lendit) Rated: A

Quovo, a data platform that provides connectivity to consumer financial accounts, announced today at LendIt Fintech USA, new products that equip lenders with insights to streamline and improve key processes in the lending value chain, adding to Quovo’s ability to assist with underwriting, funding, and ongoing servicing workflows.

Income + Expense analyzes and summarizes recurring and irregular income and expense streams, creating a fuller picture of cash flow in linked accounts. Balance Estimator uses historical cash flows to predict future account balances up to 30 days in advance, giving loan servicers a key perspective on when customers can most
effectively meet their payment obligations.

Income + Expense and Balance Estimator provide valuable cash-flow-based insights that can be combined with Quovo’s core data products—such as Aggregation and Authentication—to create end-to-end solutions for lending, from the first loan application to the last servicing event.

MoneyLion Announces the Big Alternative to the Big Bank (Business Wire) Rated: A

MoneyLion today announced that it will be expanding its popular MoneyLion Plus membership with a full suite of checking and savings capabilities. With these additions, the new MoneyLion Plus membership will provide a comprehensive banking option for anyone with access to a smartphone, becoming the one and only financial membership consumers need to build wealth, improve credit and manage day-to-day spending.

DebtBench Consolidates The Business-to-business Loan Marketplace Into One Place (Benzinga) Rated: A

DebtBench: We are creating an Open Banking marketplace structure where business borrowers can connect and gain access to capital at lower rates, in far less time, than they would by going to a brick-and mortar institution. According to our estimates, banks, credit cards and other lending institutions generate $870B+ each year in fees and interest from over $3.2 trillion in lending activity. The interest rate spreads gained by financial institutions can be minimized.

Intrinio to Release API v2, Making Financial Data Even More Accessible (Lendit) Rated: B

Intrinio, a fintech company providing access to over 200 financial data feeds, will be releasing their API v2 this quarter.

Intrinio’s API v2 is built on the OpenAPI specification, which is a community-driven, open source, standardized API spec within the OpenAPI Initiative (OAI), a Linux Foundation Collaborative Project. This allows both humans and computers to discover and understand the capabilities of a service without requiring access to source code, additional documentation, or inspection of network traffic.

OCC Gearing Up To Publish Position On FinTech Charter (PYMNTS) Rated: B

The Office of the Comptroller of the Currency (OCC) is getting ready to release its position on a proposed charter for online lenders and other FinTech companies in the next three months.

AI and the next step in financial management tools (Venture Beat) Rated: B

An Aite Group study finding has the answer. More than 75 percent of 22- to 49-year-old consumers are interested in this kind of advice and guidance around reducing debt, achieving savings goals, and tracking their finances, as well as optimizing their overall financial health.

Funding Your Dream: Financial Tips for Startups (Axcess News) Rated: B

 

Small Business Loans

Companies like the Lending Club, make it easy for you to apply for small business loans online. You can receive several thousand dollars towards your business expenses.

 

Building a Strong Credit History Without Using Credit Cards (Analyst of Finance) Rated: B

Although many people turn to credit cards to help them build credit, there are other tools individuals can use to improve their credit scores. Since some people have trouble managing credit card debt and do not want to pay high-interest rates, they often turn to alternatives to help them build a solid credit history. Here are a few of those alternatives.

Loans to Help Build Credit
Some banks and credit unions will offer their members what are known as credit builder loans. The goal is to pay off the loan before the maturity date.

Peer-to-Peer Lending
Instead of going through a traditional financial institution, borrowers can apply for loans offered by individual investors. Known as peer-to-peer loans, consumers can apply using a reputable P2P lending website or service. The loans typically offer reasonable interest rates, and this type of financing is completely legitimate.

United Kingdom

Funding Circle lends £123m to businesses in March (Bridging & Commercial) Rated: AAA

The figure represented an increase on the £113m lent in February.

The company announced in its monthly review that in March it provided 1,831 businesses with access to finance and created 4,670 jobs (directly and indirectly) via its platform.

Funding Circle lent over £701m from September 2017 to March 2018 and more than 10,500 small businesses accessed finance through the platform in the same period.

Funding Circle SME fund considers new equity raise (Peer2Peer Finance) Rated: AAA

THE FUNDING Circle SME Income Fund is considering a potential equity raise as it assesses its growth options.

Any issue of shares or sale from treasury would be priced at NAV plus a premium to cover all issue costs, the fund said in a stock exchange announcement on Monday.

MarketInvoice joins NatWest Capital Connections panel (Finextra) Rated: A

NatWest has added invoice finance platform MarketInvoice to its Capital Connections panel, which helps SMEs unable to borrow from banks get access to alternative sources of money.

Liberis raises £57.5M to offer finance for small businesses paid back via customer card transactions (TechCrunch) Rated: A

Liberis, the London-based fintech that provides finance for small businesses, has raised £57.5 million in new funding to help support the company’s growth. The alternative finance provider makes loans against a company’s future credit and debit card sales.

The majority of the new capital being raised by Liberis  is debt, which in turn will enable it to issue more loans. The facility is being provided by British Business Investments (the commercial arm of the tax payer-funded British Business Bank), Paragon Bank, and BCI Finance.

In addition, Blenheim Chalcot has made an equity investment into Liberis. The so-called “digital venture builder” also previously backed Clearscore, the credit scoring startup recently acquired by Experian.

As good as it ap(peer)s? (Metro) Rated: A

■ Peer-to-peer lending is becoming popular in low interest times, but it’s controversial

Peer-to-peer remains controversial, especially since the government approved a new type of Isa, the Innovative Finance Isa (Ifisa), in April 2016 that allows customers to receive income from the peer-to-peer loans they make free of tax.

There are many questions you will need to ask before lending your cash. Here are some of the most important:

What returns can I really get?

When faced with the best-buy rate on an instant access current account (around 1.3 per cent according to Moneyfacts), or on a five-year, fixed- rate bond (2.75 per cent), it’s hard not to find the headline rate you would receive from a peer-to-peer lending site very attractive.

Is the platform a member of a reputable association?

The Peer-to-Peer Finance Association is the main trade body, though not all companies involved are members. Check membership at p2pfa.org.uk. Robert Pettigrew, director of the association, says: ‘Investors should understand the nature and level of risk to which they are exposed, so that they can ensure that it is commensurate with their individual risk appetite.

 

China

Jack Ma’s Ant Financial to Raise $ 9 Billion, Become World’s Biggest Unicorn (Wall Street Journal) Rated: AAA

Ant Financial Services Group, carved out of his e-commerce giant Alibaba Group HoldingLtd. BABA -0.52% seven years ago, is preparing to raise $9 billion in a private funding round, according to people familiar with the matter. That ups a previous fundraising target of $5 billion.

Ant, which owns popular mobile payments network Alipay and is one of China’s largest non-bank lenders, is currently in talks with potential investors and demand for its shares has so far been strong, the people familiar said.

The latest funding round could value Ant at close to $150 billion, according to the people, making it by far the world’s largest unicorn—a term used to describe private companies valued at over $1 billion.

X Financial Provides a Chinese Fintech Perspective at LendIt USA (Markets Insider) Rated: A

“Fintech is playing animportant role in China. Given the demands for consumer finance are not yet fully satisfied and credit system is not perfect, financial technology has a golden development opportunity in Chinawhich leads the world in data mining and processing capabilities in the mobile Internet market.” said Simon Cheng, President of X Financial, a leading fintech company in China at LendIt USA recently.

International

Is the Banking System Up for Disruption? (GURUFocus) Rated: A

The popularity of blockchain technology has grown over the last several years as the hype surrounding the cryptocurrency market has thrived. Nearly every industry is currently exploring options on how they can use this disruptive technology to make a difference in the market. Its impact on various sectors has attracted big technology companies like Microsoft Corp. (NASDAQ:MSFT) and International Business Machines Corp. (NYSE:IBM). They ventured into distributed ledger technology architecture to augment their existing businesses while simultaneously trying to exploit emerging opportunities in the industry.

Over the last two decades, the financial services sector has experienced a major technological shake-up, with emerging industries like fintech playing a vital role. PayPal Inc. (NASDAQ:PYPL) disrupted the payments industry by introducing online methods of payment. While some said credit cards and checks would be phased out in due time, they are still crucial products. It remains to be seen how long they will last, though.

On the other hand, peer-to-peer lending platforms like LendingClub Corp. (NYSE:LC) and Zorpa reinvented lending and, in the process, sparked debates on whether they could eventually overtake traditional lending in the credit market. Nothing of the sort has come to pass, yet. In fact, after peaking in the first half of the current decade, peer-to-peer lending may have started to experience a slowdown in growth.

RESPONDING TO TECHNOLOGY DISRUPTION IN WHOLESALE BANKING (International Banker) Rated: A

In this article, we explore two areas that have attracted significant interest by FinTech innovators:

  • Marketplace lenders (MPLs) that are disrupting traditional credit-underwriting models with lower overhead, higher transparency, faster loan approval and higher returns on capital.
  • Blockchain-based supply chains with the potential to disrupt entrenched payments and credit processes by managing the physical and financial flows associated with commerce. In addition, we discuss approaches to IT spending and innovation that banks can take in response.

Ezira – The distributed social media and business platform (AMBCrypto) Rated: A

Ezira will utilize the delegated proof of stake decentralized consensus algorithm used by Bitshares, EOS, and Steem. Ezira will operate on a new public blockchain, will provide a flagship user application, and a multi-token circular economic model. It will have a fairer token distribution and will share drop 10% of the EZIRA asset onto the cryptocurrency community.

The Ezira network will offer users access to a suite of cryptocurrency and social media features during its release.

Content Rewards

Users will receive content rewards for posting according to the number of votes and views that each post receives. Once per day, a content reward payment will be distributed according to the stake weight of the accounts that upvoted and viewed the content.

Ezira Cryptocurrencies

Payments using Ezira currencies will have zero transaction fees and will receive confirmation within the 3 second block time. Users send EziraCoin to a stealth address and send payments using a ring signature, and use ring confidential transactions to conceal the payment amount.

Decentralized Exchange

Users will be able to use peer to peer lending to earn interest by lending their funds to other users, based on collateral, independent verification processes, and established creditworthiness.

Australia

Online lender Prospa challenges Australia’s big banks (Financial Times) Rated: AAA

Last year Prospa passed a milestone of providing more than A$500m ($385m) in loans to 12,000 businesses.

The company offers loans of between A$5,000 and A$250,000, over a term of three to 24 months, with no security required for amounts of up to A$100,000. Its platform enables business owners to apply within 10 minutes, receive approval on the same day and funding within 24 hours.

Annual interest rates on Prospa loans vary depending on risk but typically start at roughly 12 per cent and stretch into the mid-20s.

Prospa’s growth has been supported by venture capital backers, with AirTree leading a A$25m funding round last year that valued Prospa at A$235m. The funds enabled the lender to boost its staff to 165, build a direct distribution channel and sign up 7,000 intermediary partners.

Australia lags on digital banking revolution: Oracle survey (The Sydney Morning Herald) Rated: A

New survey results from US technology firm Oracle suggest Australians are less open, compared with consumers in other large economies, to engaging with the fintech revolution.

The survey, released on Wednesday, shows only 6.25 per cent of Australians regularly use a “fintech” bank, compared with 10 per cent in the United States, 12 per cent in Britain, and 40.5 per cent in India.

Despite a growing number of digital “robo advisers”, 9.75 per cent of local respondents said they used fintech wealth advisers services frequently, compared with 16 per cent in Britain and 21.5 per cent in United States.

India

P2P lending company Faircent.com launches its open API platform (ETRise) Rated: AAA

P2P lending firm Faircent.com will soon be opening its API platform for developers. The move will enable new fintech entrants and offline businesses to leverage the company’s technological infrastructure to build new digital lending products, as well as to integrate existing solutions into their offerings.

Faircent.com’s technology stack offers a wide range of solutions pertaining to online lending such as borrower and lender verification, credit evaluation and underwriting, and payment collection and recovery, among others.

Kae Capital infuses funds in P2P digital lending startup Loanzen (ENTracker) Rated: A

Loanzen, a peer to peer business loan marketplace startup, has raised an undisclosed amount of sum from Kae Capital. The Bengaluru-based digital lending platform had earlier raised an undisclosed seed funding from Angels through TracxnSyndicate.

The fintech firm will deploy fresh funds to expand operations. It also holds NBFC licence by RBI.

Asia

How is Fintech Making Credit Cards and Personal Loans Easier to Get? (TechWorm), Rated: AAA

Fintech firms have exploded onto the financial scene in Singapore and other mature markets in Asia in recent times. Focusing on disruptive technologies like peer-to-peer lending, affordable digital payment solutions, and more accurate risk analysis among other things, these startups are winning over customers by replacing the service delivery model used by traditional banks with user-friendly technologies.

Fintech Companies Are Changing the Process of Loan Offtake

Have you ever heard about Crowdo, Capital Springboard, FundedHere, or MoolahSense? These are peer-to-peer online lending sites through which you can raise funds by sharing your story. These crowdfunding sites are revolutionising the alternative lending space through disintermediation, cost optimisation, quicker delivery, and technology modernisation.

Players like Skolafund provide deserving students a chance to get funded by potential funders for pursuing education in an affordable manner. They can match profiles and ensure that the right student meets the right funder.

SMEs, often ignored by traditional banking channels, have found their go-to source for funds. Crowd Genie, which started in 2016, is helping SMEs get loans through crowdfunding.

MENA

Start-up crowdfunding: Window of opportunity (Arabian Business) Rated: A

After witnessing the 2011 Egyptian revolution, former journalist Ahmed Moor decided to launch Liwwa, a peer-to-peer funding platform that would address the MENA region’s $240bn SME funding gap by lending money to growing businesses.

Together with co-founder and CTO Samer Atiani (former senior software developer at New York-based online retailer Etsy), Moor has managed to lend over $8m to SMEs across the region since the establishment of the Amman-based firm in 2013.

Authors:

George Popescu
Allen Taylor

Tuesday March 27 2018, Daily News Digest

bankruptcy

News Comments Today’s main news: Ron Suber joins MoneyLion board. Prosper reports full year results. Orca launches P2P investment platform. Santander, Ripple partner on money transfer app. Cash Suvidha raises $1M. China opens payment market to foreign companies. Today’s main analysis: The cost of bankruptcy. Today’s thought-provoking articles: LendingTree studies the cost of bankruptcy. Liwwa creates big impact in MENA. The lowdown […]

bankruptcy

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United States

United Kingdom

China

European Union

International

India

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United States

Ron Suber Joins Board of Fintech MoneyLion (Crowdfund Insider), Rated: AAA

Ron Suber, President Emeritus of Prosper and a prominent Fintech advocate, has joined the board of directors of MoneyLion.

Prosper Reports Full Year Results (Business Wire), Rated: AAA

Prosper today reported full year results for 2017. Loan originations and transaction fee revenue were up 31% and 37% year-over-year to $2.9 billion and $130 million, respectively. Prosper also generated cash from operations for three consecutive quarters, starting in Q2 2017.

Source: Prosper

Summary of Key 2017 Financial Highlights:

  • Surpassed $11 billion in cumulative personal loan originations through the platform since inception
  • Increased loan originations 31% and transaction fee revenue 37% year-over-year
  • Net loss of $115 million included $89 million of non-cash charges related to warrants to purchase preferred stock that were issued to a consortium of investors and a third party in connection with a settlement agreement
  • Adjusted EBITDA(1) of $5 million increased $43 million year-over-year
  • Generated cash from operations for three consecutive quarters, starting in Q2 2017
  • Closed $50 million Series G funding, ending 2017 with approximately $100 million of liquidity

Citigroup to Again Be a Nationwide Bank, but in Digital Form (Wall Street Journal), Rated: AAA

After years of Citigroup Inc. shrinking its U.S. retail banking franchise to focus on affluent customers and a handful of big cities, the global bank is ready to become a national player once again.

This time, however, it doesn’t plan on gobbling up rivals or opening any new branches. Instead, Citigroup says it will use an expanded mobile app to fully serve new customers.

LendingTree Study: The Cost of Bankruptcy (PR Newswire), Rated: AAA

LendingTree today released the findings of its study on the cost of bankruptcy. The findings show that while a prior bankruptcy can make it more expensive to borrow, it’s certainly not impossible to qualify for credit. If borrowers wait to apply for new loans even just a few years after bankruptcy, they may find rates that aren’t too far off from what other borrowers are being offered.

Key findings:

  • Forty-three percent of people with a bankruptcy on their credit file have a credit score of 640 or higher within a year of the bankruptcy. Within two years of bankruptcy, 65 percent have a credit score above 640.
  • A typical $15,000 auto loan incurs an extra $2,171 in borrowing costs for those seeking offers less than a year after bankruptcy, but just $799 for those who wait at least two years after bankruptcy.
  • Borrowers who have a 3-year-old bankruptcy and apply for a mortgage see an offered APR that is 19 basis points higher than those without a bankruptcy. The higher the APR, the higher borrowing costs will be.
  • Mortgage borrowers with scores between 720 and 739 three years after bankruptcy were offered similar APRs to those without bankruptcy, indicating a strong credit score can counteract the effects of a prior bankruptcy.

With Marcus, Goldman Sachs takes on consumer banking (Bankrate), Rated: A

Despite becoming a bank holding company, Goldman’s business remained focused on corporations and the wealthy. That changed a few years ago as it began plotting new strategies, says Omer Ismail, chief commercial officer for Marcus. The Wall Street Journal recently published an in-depth account of the creation of Marcus, including juicy tidbits like conversations over lunch in the Hamptons.

Goldman decided to tackle the unsecured personal loan space first.

Marcus has found its particular angle in making its loans highly customizable. Rather than setting traditional loan terms, like three years or five years, it asks you how much you can afford to pay each month in addition to asking you how much you need to borrow. So, you might end up with a 31-month installment loan, which is not a conventional loan term.

Rod Buscher of Blinker (Lend Academy), Rated: A

In this podcast you will learn:

  • How Rod first made a name for himself in the car business.
  • The idea behind Blinker and why Rod decided to start the company.
  • How the buying and selling process works at Blinker.
  • The patents they have received to help identify any car in the U.S.
  • How they are able to make a safe environment for conducting a car transaction.
  • The percentage of car buyers at Blinker who opt for financing instead of paying cash.
  • How their financing process works.
  • The limits on the kinds of cars they finance.
  • The data they are using to make an underwriting decision.
  • The spectrum of the different credit profiles of their car buyers.
  • How they are getting the word out to find these buyers and sellers.
  • How they are funding their loans today.
  • Their move into auto refinancing and how they have built this business.
  • How they approach licensing in the states they operate.
  • The total number of transactions that have taken place on Blinker to date.
  • The other services they are providing to Blinker customers.
  • Rod’s vision for the future of Blinker.

Synthetic Identity Fraud: The Perfect Crime (Lendit), Rated: AAA

Synthetic identity fraud usually involves creating an entirely new identity composed of information with no ties to a known consumer. This identity is then used to apply for credit and services. Synthetic identities are one of the most difficult fraud threats institutions face today and their prevalence has exploded over the past several years. Synthetic identity fraud is arguably the perfect crime because there is no consumer victim.

Put yourself in the shoes of a fraudster. As you consider your many nefarious options for committing a crime and getting away with it, you decide that the best crime is one where there is no clear victim. Sure, robbing a bank using a synthetic identity victimizes the enterprise, its shareholders, its employees and taxes its customers. However, no one individual is intentionally, directly hurt. Therefore, the non-existent victim does not alert authorities and the fact that a crime has been committed is lost to history. There is a “credit loss” and the debtholder is impossible to locate. The debt is written off, or sold, and the fraud is perpetuated yet again. Like I said, the perfect crime.

Candex Raises $ 3.5M in Seed Funding (Finsmes), Rated: A

Candex, a San Francisco, CA-based fintech startup, raised $3.5m in seed funding.

Backers included Edenred Capital Partners, Partech Ventures, Advisors.Fund, Camp One Ventures, NFX, Tekton Ventures, Big Sur Ventures and fintech angel Mark Goines.

Hawaii is state with highest average debt-to-income ratio, study says (Pacific Business News), Rated: A

The average borrower in Hawaii spends 36.2 percent of their monthly paycheck on credit card, student loan, and housing payments, according to a study by Credible.com, making Hawaii the state with the highest average debt-to-income ratio.

According to the online lender marketplace, the average monthly credit card payment for a Hawaii resident is $238, the average monthly student loan payment is $385, and the average monthly housing payment is $1,091, for a total of $1,714.

With average annual income in Hawaii at $56,889, the state’s average debt-to-income ratio is 43 percent more than residents of Michigan, the state with the lowest debt-to-income ratio.

On average, Michigan residents in the dataset spent 25.3 percent of their monthly income on credit card, student loan and housing payments.

Nationwide, the study found the average American in the dataset paid $207 on credit card debt, $370 on student loans and $906 on housing each month, while taking home an average salary of $60,671.

Transparency Can Help Position a Fund for Growth (Lendit), Rated: A

When fund managers choose  experienced service providers, including custodians, auditors, accountants, attorneys and administrators, they can increase transparency in the fund, which can in turn promote investor confidence. Service providers can be much more than just an added expense;  they can be  valuable partners that can help position the fund for success.

United Kingdom

Orca Launches Investment Platform to Drive Mainstream Adoption of P2P Investing (Crowdfund Insider), Rated: AAA

Orca, an independent data, research and analysis provider targeting the the UK peer-to-peer (P2P) lending market, has launched its premier investment platform. The new platform will allow investors to easily diversify across multiple P2P lending platforms from a single P2P investment portfolio.

Orca seeks to provide their new service to the retail investor market.

Total cumulative lending is £13 billion since the asset class was created in 2005. Orca’s secondary service, Orca Analytics, has 2016 to 2017 growth at 18%, with £4 billion lent in 2017 alone. The estimated customer-base stands at approximately 200,000-250,000 retail investors.

The Orca Investment Platform Features include exposure to both consumer, business and property lenders. Investors may expect a return of 5% net of Orca’s cut which is a 0.65% fee.

UK digital bank that beat peers to an annual profit ‘will go into’ China — eventually (CNBC), Rated: A

OakNorth, a start-up bank based in London, recorded a pre-tax profit of £10.6 million ($15 million) in 2017 and is considered to be the first U.K. digital-orientated bank to reach such a milestone.

Khosla said his firm is already in “open conversations” with multiple countries about its global expansion plans, including the U.S., Canada, Spain, Italy, Germany, Singapore, South Africa and Australia. The company has already established offices in some of those countries, he added.

OakNorth is expanding abroad by licensing its technology platform, ACORN, to banks in other countries. The platform uses big data and machine learning to optimize credit for small-to-medium sized enterprises (SMEs).

OakNorth offers loans between £500 and £30 million to SMEs. It was granted a banking license by U.K. regulators in 2015.

‘No firm views’ on IPO

OakNorth is currently valued at $1.4 billion, which puts it in the ranks of the U.K.’s “unicorn” companies — firms valued at $1 billion or more.

It raised a total of £244 million last year in a combination of investments — the “largest U.K. fintech financing to date,” according CEO Khosla. Singaporean sovereign wealth fund GIC took a 10 percent equity stake in the firm.

Look to the Innovative Finance Isa for market-beating returns on your tax- free savings (City a.m.), Rated: A

IFISAs are also a way for investors to do something interesting with their savings. For example, Oaksmore has recently launched an Isa which allows investors to capitalise on historic renovation.

This particular IFISA, specialising in historical building renovation, offers a tax-free return of up to 7.5 per cent each year.

Another lender trying to do some- thing different is Folk2Folk, a peer-to- peer platform for rural and local businesses. It is offering an IFISA which gives lenders the opportunity to earn 6.5 per cent interest a year, while supporting British businesses within their local area.

China

China opens its payments market to foreign companies (The Paypers), Rated: AAA

China has decided to open up its payments market, allowing companies to apply for a payments license.

The People’s Bank of China said in a statement that foreign players who apply for payment licenses will receive the same treatment as local companies.

Applicants must set up local units, establish payment infrastructure — including disaster recovery systems — and store client information domestically, the central bank added.

European Union

Banco BNI Europa launches online account opening system through videoconference (Fintech Finance), Rated: AAA

Banco BNI Europa launched an online account opening process through videoconference. This new process also introduces an innovative system of documents signature with a qualified digital certificate and is available for Portuguese citizens who want to open an individual current account. The process is simple, fast and intuitive, without the usual bureaucracies associated with account opening.

This product is offered in partnership with DigitalSign, a Portuguese Certifying Entity specialized in the issuance of qualified digital certificates, registered in the National Security Office as an accredited entity. The partnership with Digital Sign allows, in addition to the online account opening, the issue of a digital certificate, with similar strength to a physical signature, which may be used by the client in the context of other contractual relations with the Bank.

International

Santander is set to launch an international money transfer app with Ripple (Business Insider), Rated: AAA

Santander is on track to launch an international money transfer app in partnership with fintech startup Ripple in the next few months, the bank’s UK CEO has confirmed.

Nathan Bostock told the International Fintech conference in London on Thursday: “This spring, if not one beats us to it, we will be the first large retail bank to carry out cross-border payments at scale with blockchain technology.”

 

Peoples Trust Company selects Finastra to fulfill end-to-end lending vision (PR Newswire), Rated: A

Peoples Trust Company of Saint Albans has selected Finastra to provide a single, end-to-end lending solution for commercial and consumer lending. Using Finastra’s Total Lending solution, which packages the power of the Fusion LaserPro, Fusion DecisionPro and Fusion CreditQuest products, the bank will be able to manage its lending process from origination through to booking and thus increase efficiency and customer service.

FintruX raises $ 25 million in their token sale to build P2P lending platform for small businesses and startups (Tech Startups), Rated: A

FintruXNetwork is a global P2P lending blockchain-based ecosystem,  powered by Ethereum. FintruX Network aims to connect borrowers, lenders, and rated service agencies. FintruX facilitates marketplace lending in a true peer-to-peer network to ease the cash-flow issues of small businesses and startups. The startup announced today it has successfully raised over 22,000 ETH  ($25 million) in token sale from contributors around the world. The proceeds of the sale will be used to build an Ethereum-based platform that will fundamentally enhance the P2P loan experience for small businesses and startups.

 

 

 

India

Lending platform Cash Suvidha raises $ 1 million in pre-series A (Financial Express), Rated: AAA

Delhi-based fintech startup, Cash Suvidha, has raised $1 million in its pre-series A round of investment from Initia Holdings Ltd., Vipin Agarwal, Partner in India Industrial Growth Fund and others. The company plans to use the newly secured funds to increase customer base and to further strengthen its technological infrastructure.

The company claims to receive 15,000 loan applications every month and disbursement of loans in another 2 working days. The company has raised a total of $5.2 million and claims to have disbursed over Rs 152 crore.

Further, Cash Suvidha has disbursed loans to over 35,000 borrowers with an average ticket size between Rs 20,000 – Rs 5,00,000.

SBI To Create Blockchain-Based Exchange For Recovering NPA’s (Inc42), Rated: A

Reportedly, India’s largest public sector bank, State Bank of India is looking to create a blockchain-based exchange for Non-Performing Assets (NPA’s).

To be launched in association with 30 banks, this platform will assist the banks in data-driven price discovery.

SBI is said to have assets over $460 Bn and offers services in areas such as retail, corporate banking, financing, and insurance. The Indian banks are said to have to battle with NPA’s worth $210 Bn of which $30 Bn resides with SBI alone.

Digital lending venture success secrets for the new-age CIOs (CIOL), Rated: AAA

Velocity

Broadly, there are three types of software systems that enterprises employ. These include:

a)Systems that help in running a business process

b)Those that help companies to grow their businesses

c)Systems that transform businesses

In the year 2013, China reported an eight-fold rise in the total number of borrowers that touched 1,49,300. The growth continued through 2014, with total borrowers reaching 630,000 by the year’s end.

Quality

Traditionally, lenders considered credit score as the key parameter in defining a borrower’s creditworthiness. In case of digital lending, a borrower’s risk profile is defined based on aspects such as Aadhaar for identification, salary slips for working professionals, and the applicant’s financial behavioral patterns determined based on information curated from online sources such as social media channels.

User Experience

Boston Consulting Group estimates that by 2020, 48% of India’s internet users will be rural and of that, 21% will be women.

Asia

Facing regulatory bar at home, QARASoft robo adviser heads overseas (Korean Herald), Rated: A

QARASoft’s now-defunct platform, called “QARA,” connected individual asset managers with funds pooled — or borrowed — from peer-to-peer investors, in part by making use of the venture firm’s artificial intelligence-powered robo adviser.

The “decentralized” platform collected some 100 retail investor loans in the first two weeks. But they were retrieved after the Financial Supervisory Service banned its operation, despite a patent earned the previous year for the pooling scheme of the fund and the platform’s three-year operation of its beta version.

The service will primarily target retail investors in overseas markets in the United States, the United Kingdom and Singapore, and the English version will be launched prior to a Korean version.

Continuous learning for SME executives (The Star Online), Rated: B

SMALL business executives who took part in the AmBank BizRACE gained a new perspective in managing their operations, allowing them to bring the business further.

The top 15 finalists in the programme recently completed two, out of four, executive development programmes at Menara AmBank.

Peoplender Sdn Bhd chief executive officer Kristine Ng, a participant in the programme, said she was inspired with a new structure for her business after the first day itself. Ng recalled one of the trainers talking about constraints that one would face in growing businesses – if it doesn’t fit the business model, then change must occur.

 

MENA

Creating big impact with a small help (Khaleej Times), Rated: AAA

According to the World Bank, 63 per cent of Mena SMEs do not have access to capital.

In Jordan, SMEs represent 97 per cent of companies and create 70 per cent of new jobs in the kingdom, according to Oxford Business Group, Jordan: Finding Financing for SMEs.

Liwwa is a peer-to-peer lending platform in the Mena region that provides SMEs with trade and asset financing. Liwwa’s target audience is divided into borrowers and investors, also referred to as lenders. To date, liwwa has maintained a solid portfolio and delivered annual returns of 10.6 per cent.

The liwwa index delivered 9.45 per cent over the last 12 months, which is attractive.

Liwwa has raised $5.55 million from investors and $6 million in debt to date. Their investors include Silicon Badia, Bank Al Etihad, DASH Ventures and Mena Venture Investments. Their debt partners include Bank Al Etihad, Capital Bank, Arab Bank and the Dutch Good Growth Fund.

Source Khaleej Times

Authors:

George Popescu
Allen Taylor

Tuesday March 20, 2018, Daily News Digest

fintechs

News Comments Today’s main news: Affirm intros in-store capabilities. SoFi prices first student loan ABS with medical residency refis. Experian targets non-prime borrowers with new credit score. RateSetter CEO warns of collaboration risk. Today’s main analysis: Hui Ying Financial Holdings’ 2017 financial results. Today’s thought-provoking articles: What the Senate Banking Committee bill means. Key Chinese technology players. What Europe’s investors […]

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United Kingdom

China

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International

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United States

Affirm Introduces In-Store Capabilities (Business Wire), Rated: AAA

Affirm will partner with merchants to make Affirm financing available in-store. Now shoppers can use Affirm InStore in brick-and-mortar locations, securing credit in just seconds before they even get to the cash register, and can pay for their purchase over time in simple, fixed monthly installments. Additionally, the company announced that consumers will have the ability to instantly add a newly issued Affirm virtual card to Apple Pay, the easy, secure and private way to pay, via the Affirm mobile app.

Affirm InStore brings the same easy experience shoppers and retailers have come to expect online to the point-of-sale in brick-and-mortar locations. Affirm gives merchants two flexible options: they can integrate the Affirm InStore API (application programming interface) with their Point Of Sale (POS) system or use Affirm’s expanded virtual card experience.

According to a survey conducted by Affirm, this can impact a retailer’s brand even if the financing product is offered by a third party. Fifty-five percent of respondents said they would think less favorably of a brand that offers a financial product that can be harmful to consumers.

Affirm’s platform makes it possible for shoppers to pay for purchases over multiple-month terms with simple interest loans that don’t charge compounding interest or late fees. And, unlike most credit lenders that base loan decisions on a consumer’s credit score and income alone, Affirm takes a more sophisticated approach, using data science in credit-scoring algorithms that combine credit history and other relevant factors to assess creditworthiness.

Affirm, a startup founded by PayPal co-founder, just launched Apple Pay Credit Card without the plastic (Tech Startups), Rated: A

Affirm now has more than 1,000 merchants using its service.

The company is going after the millennials with a new type of credit card, without plastic and only available online. The company announced today the launch of Affirm virtual card to Apple Pay Credit Card without the plastic. With Affirm Virtual Card, consumers will have the ability to instantly add a newly issued Affirm virtual card to Apple Pay, via the Affirm mobile app. With the virtual card, Affirm is reinventing credit with alternative to traditional credit cards and making its micro-lending program available through Apple Pay and letting customers use their iPhones to pay in brick-and-mortar stores.

SoFi prices 1st student loan ABS with medical residency refis (American Banker), Rated: AAA

Social Finance’s second private student loan securitization of the year, which priced Friday, is also its first to include loans refinancing the debt of medical residents.

Loans refinancing the debt of medical residents and fellows account for approximately 5% of the collateral for the original collateral for the transaction, SoFi Professional Loan Program 2018-B Trust, according to rating agency presale reports. The collateral for the deal was upsized, to $900 million from $700 million originally, in response to strong demand, though investors demanded slightly higher spreads on the senior notes compared to SoFi’s previous student loan securitization, completed in January.

Experian Releases a New Credit Score Aimed at Non-Prime Borrowers (Lend Academy), Rated: AAA

The ranks of thin file consumers continues to grow in this country. According to Experian these consumers now number 25% of the total U.S. population. These are people with five or fewer items in their traditional credit history.

Since the acquisition they have worked with the Clarity Services team to build a new score specifically for the non-prime segment. They are calling it the Clear Early Risk Score. As the name implies this new score is designed to give lenders a clearer view of the risk of these thin file consumers, many of whom should not be categorized as subprime.

When I asked Alex how this new score will be used in conjunction with their traditional FICO score he said it will be used in two ways:
1. When the consumer has no traditional file and therefore no credit score it will be used as an independent score.
2. The consumer may be originally scored as subprime and this new score could provide new  information that may lead to a different conclusion regarding risk.

 

 

 

Here’s what the latest Senate bill means for US fintech (Business Insider), Rated: AAA

A bill that the Senate Banking Committee has been drafting for several years, designed to reduce the regulatory burden for small- and mid-sized US lenders, received bipartisan approval in the Senate on Wednesday with a 61-38 vote.

The bill’s proposals include raising the threshold for the Dodd-Frank definition of a “systemically important” lender from $50 billion in assets to $250 billion, thus absolving smaller banks from strictures like annual stress tests; absolving banks with under $10 billion in assets from the Volcker Rule; and allowing small banks and credit unions to report less of their mortgage loan data, among other things.

Source: Business Insider

U.S. Online Merchants Believe Instant Financing Will Drive Increased Sales (PR Newswire), Rated: A

Online merchants in the U.S. are increasingly recognizing the importance of offering instant financing to shoppers, according to a new online e-commerce survey. Nearly two-thirds of retailers polled (64 percent) believe providing online financing options through their store is important to driving new and increased sales. Forty-six percent indicate it would decrease cart abandonment – still one of the most critical challenges for online retailers today.

The merchant survey, which recognizes the importance of instant financing among online retailers, corresponds with consumer attitudes as revealed in a Klarna-sponsored survey last year that showed:

  • Three quarters of consumers (75 percent) indicate preference for online merchants offering instant financing
  • 39 percent said they would spend more money if given instant credit options when purchasing goods and services online
  • 28 percent would be very likely or completely likely to change merchants in order to use instant financing
  • Nearly half of respondents (47 percent) would like to be presented with an instant financing option while shopping online

THE QUANTS, THE ALGORITHMS, AND THE PERFORMANCE (All About Alpha), Rated: A

In the forthcoming paper he contends that with only “a tiny handful of exceptions” (read “Renaissance”) such trading doesn’t produce exceptional results. The problem goes far beyond what one addresses by saying that the field is new and still developing, that machine learning will get better, that Big Data will get even bigger, and so forth.

Heaton asks us to contemplate Citadel LLC. This huge hedge fund “returned only about 13 percent in 2017,” which was short of the S&P 500 gain. Yet the S&P gain would have been “available quite inexpensively to anyone with the money to open an account at Vanguard Group.”

Does Citadel compensate for underperformance in bull markets by preserving capital in bear markets? Heaton says that it does not, “Citadel fell nearly 60 percent in 2008, far more than the S&P 500 index.”

Composing Architecture for Growth (Lendit), Rated: A

The same technology that is influencing this change is also making it possible to deliver that experience at a fraction of the time and cost it would take with older technology.

This ‘right’ technology means embracing cloud-based services and an API-enabled composable architecture.  Today, building an architecture is quick and cost effective, particularly through the use of cloud technology.  Rather than having to buy, build, and maintain a collection of poorly-connected systems, an API-enabled composable architecture lets institutions leverage services built on a flexible yet secure infrastructure.

A composable API-driven architecture is necessary to tap into the full potential of cloud technology. The traditional approach is all or nothing, build an end-to-end solution which relies on a single vendor which would be responsible for the implementation.  But the composable approach embraces thinking that one company cannot focus on everything and be the best at it.  The architecture can be divided in small pieces and managed through life cycles separately and tested, removed or replaced without risk.

Everlasting Capital Grows from a Basement to Inc.’s 500 List (deBanked), Rated: A

“I was making $267 a week at the pawn shop and I was having to ask friends to help me pay my rent for a room,” Feinberg said. “So at that point, I realized that something needed to change.”

That question prompted Feinberg to present to his brother and Murphy the idea to start a finance company. Feinberg said he drew up a business plan in a day and a half and his brother and Murphy agreed to give him $3,000 to start the company. That was November of 2012.

And it did. After a year, Feinberg’s company, Everlasting Capital, made $110,000 in commissions and $3.5 million in volume. Within that first year, he also hired three people and moved from the basement of the pawn shop in Rochester, NH to a 600 square foot office in the same town.

This lightning fast trajectory is by no means common. That’s why Everlasting Capital made it onto 2017’s Inc. 500 list, the iconic list of America’s fastest growing private companies. By year two, Everlasting Capital earned $640,000 in commissions, generating $14 million in volume, and by year three it earned $1.6 million in commissions with $18 million in volume.

A Conversation with Lendup’s CEO Sasha Orloff and Vice President Jotaka Eaddy (The Financial Revolutionist), Rated: A

We were happy to connect with LendUp’s co-founder and CEO Sasha Orloff and Jotaka Eaddy, the company’s vice president of policy, strategic engagement and impact. Orloff, Eaddy and the rest of the LendUp team are clearly mission-driven professionals who want to put borrowers on the pathway to better financial health.

The Financial Revolutionist: Sasha and Jotaka, it’s great to see you again. Sasha, I know you started the company in 2011 with your step brother, Jake. When did you start making loans?

Sasha Orloff:    Thanks Gregg. We recently hit our six-year anniversary of our first loan. Although Jake and I “started” the company in 2011, LendUp was really born after coming out of Y Combinator’s Winter 2012 class.

FR:     Is access to credit a civil rights issue that needs more attention?

JE:    Absolutely. It’s just that some of the blatant racism that’s confronting our nation these days takes center stage on TV and social media. But historically, race has played a major role in accessing credit and how people are marginalized when trying to access it. Plus, when you look at the predatory products across this country, they are heavily marketed to poor communities. So yes, safe access to credit is an important issue for me — and should be for everyone — and LendUp is on the right side of it.

OCC once wanted payday lenders to ‘stay the hell away’ from banks. No longer (American Banker), Rated: A

More than a decade has passed since federal regulators cracked down on partnerships between payday lenders and banks that had been designed to circumvent state interest rate caps.

Now the Office of the Comptroller of the Currency, operating under newly installed leadership, has taken a notable step in the opposite direction.

The agency said Friday that it has terminated a 2002 consent order with Ace Cash Express.

South Dakota is an example of a state that could be impacted. Sixteen months ago, the state’s voters approved a 36% interest rate cap. Critics of payday lending worry that federal banking regulators may effectively overturn such laws, and that last week’s decision by the OCC is a step down that path.

Goldman Sachs Adds LPL Financial to Its Securities-Lending Business (US News), Rated: A

Goldman Sachs Group Inc has signed LPL Financial Holdings, the largest U.S. independent broker-dealer by revenue, to its securities-based lending platform, the bank said on Tuesday.

Called GS Select, the platform was launched last year as a way for the Wall Street bank to target borrowers who have less than $10 million in investable assets. GS Select issues loans worth $75,000 to $25 million that are collateralized by the borrowers’ investment portfolios.

Goldman’s typical wealth clients have at least $50 million in assets.

Questions raised as robo advisers hire humans (FT Advisor), Rated: A

Robo-advice firms offering automated financial advice have begun incorporating human advisers into their service, raising questions about how this will impact their business models.

Schroders-backed Nutmeg is currently looking at introducing human advisers into its service, while rival Scalable Capital, in which Blackrock has a large minority stake, has recently done just that.

Cerberus completes Cyanco acquisition (PE Hub Network), Rated: B

Cerberus Capital Management, L.P. today announced the completion of the previously announced acquisition of Cyanco Holding Corp. by a Cerberus affiliate from funds managed by Oaktree Capital Management, L.P. The transaction closed on March 16, 2018.

Cyanco will continue to be led by its current management team. As part of its investment, Cerberus will be putting in place a new board of directors for Cyanco. The new board will be chaired by Daniel Ajamian, an executive who has been Chairman of several other Cerberus portfolio companies.

Here Are 7 Atlanta Startups That Have Raised More Than $ 100 Million in Funding (Atlanta Inno), Rated: B

Kabbage, a FinTech company that connects small businesses with capital they need, is sitting pretty at $1.6 billion in total funding acquired since its debut on the Atlanta credit scene in 2009. Kabbage was recently in the news after the lending startup announced that, in the wake of the Parkland shooting, it would stop processing loans to assault-style weapons manufacturers.

Greensky, a consumer lending company which offers paperless solutions and financial services to businesses, secured a total of $350 million in funding in just two rounds.

 

United Kingdom

RateSetter CEO warns of ‘risk’ of collaboration over competition (Peer2Peer Finance), Rated: AAA

At the Innovate Finance Global Summit at London’s Guildhall, Lewis warned that if the two cohorts solely collaborate, there would be little visible change from the viewpoint of the consumer.

“The technological advances being made are unstoppable; the question is who is going to take them to market,” he said on Monday.

There have been an increasing number of partnerships between fintech firms and the very incumbents that they are trying to disrupt. US investment bank Goldman Sachs has acquired a number of innovative start-ups through its online lending platform Marcus.

report released last month from consulting firm Capgemini and corporate networking website LinkedIn found that more than 75 per cent of fintech firms cite collaborating with incumbent firms as their primary business objective.

 

The state-backed Royal Bank of Scotland (RBS) is working on secret plans to create a standalone digital bank to compete with emerging British fintech champions including Monzo and Revolut.

Sky News has learnt that RBS has assigned one of its top executives to the project, which is so confidential that few people inside the company are aware of its existence.

RBS has already struck agreements with a number of leading fintech companies such as Funding Circle, with which it works to direct customers to peer-to-peer and other providers of alternative finance.

 

LendInvest launches second retail bond offer (Bridging & Commercial), Rated: A

The online platform for property finance has issued a five-and-a-half year 5.375% fixed rate retail bond due October 2023.

Payments under the bond will be guaranteed by LendInvest and the bond will be secured by way of a floating charge over the whole of the undertaking and all property, assets and rights, both present and future, of the issuer.

LendInvest’s first retail bond – which trades on the London Stock Exchange – raised £50m from a broad base of retail and institutional investors.

As of 31st December 2017, the bond was 99.6% utilised, with an interest coverage ratio of 192% and a weighted average LTV ratio of 57%.

Letter: Build a brighter future (Watford Observer), Rated: A

My suggestion was Funding Circle, which enables businesses to access finance independent of their banks and allows them to receive funds within a couple of weeks, compared to up to three months with a traditional bank loan.

It’s been a tried and tested investment since August 2010 and there are currently 18 councils investing through the Funding Circle platform, and the amounts invested vary from £1,000 to £2 million.

The Funding Circle minimum a council could lend to a business is £20, so Funding Circle suggests lending £2,000 would allow a council to lend to at least 100 businesses, lend no more than 1 per cent of the portfolio to each business.

What recent IPOs reveal about the state of fintech (AltFiNews), Rated: A

Over the last week or so we’ve seen not one but two fintech focused venture capital style listed funds list on the London market: Augmentum Fintech raised £94m while TruFin hit the market with a £70m valuation. Both of these funds have their own unique characteristics although perhaps the most interesting information from the listings is what they reveal about the likely worth of the alternative finance space in the UK.

The fund’s 15 per cent stake in Zopa, by contrast, seems a little more tangential though it’s also the single most valuable asset in the fund.

City of London and Innovate Finance Launch Fintech Strategy Group (Crowdfund Insider), Rated: B

The City of London Corporation and Innovate Finance have jointly announced the launch of the Fintech Strategy Group (FSG) to help continue the success of the UK Fintech sector. According to Innovate Finance, the group will combine senior industry leaders across the sector including banks, regulators, and innovative Fintech startups.

The purpose of the FSG is to foster a collaborative dialogue on the future of UK Fintech – a vital issue as Brexit weighs on the financial services industry.

 

 

China

Chinese Tech Major Key Players – Tencent, Vipshop, Weibo, and Yirendai Market Analysis & Forecast 2017 to 2022 (Digital Journal), Rated: AAA

China’s government is intent on upgrading its manufacturing sector and leading the world in a range of advanced technologies. Implicit in its “Made in China 2025” 10-year plan is the notion that China will displace the US as the world’s dominant technological power.

The US is likely to remain a leader in all major advanced technologies over the next decade, with Baidu the only Chinese player equipped to challenge the US’s lead in next generation technologies such as AI. There are signs though, that China is closing the overall gap faster than we expected.

This report researches the state and thrust of Chinese technology over the next two to five years and what it implies for global technology investors.

Hui Ying Financial Holdings Corp. Reports Fiscal Year 2017 Financial Results (Markets Insider), Rated: AAA

Revenues increased by 88.4% to $46.5 million and loans facilitated through platform increased 59.9% to over $1.3 Billion

Source: Markets insider
  • Total loans facilitated through our platform increased by 59.9% to $1,308.7 million for the year ended 2017 from $818.5 million in 2016, as China’s online peer-to-peer lending platform industry continued to grow significantly during 2017, coupled with an increased marketing campaign, promotion activities on our platform as well as increased brand awareness of our online marketplace. This led to accumulated value of loans facilitated through our platform in the aggregate amount of $2.87 billion since the launch of our marketplace in December 2013 through the end of 2017.
  • We had 8,047 borrowers and 69,232 investors participated in an aggregate of 23,263 loans during 2017, compared to 1,067 borrowers, 39,999 investors and 8,739 loans during 2016. As of the end of 2017, we had 367, 893 registered investors and 24 cooperative partners who frequently serve as guarantors of loans on our platform.
  • Total revenues increased by 88.4% to $46.50 million for the year ended 2017 from $24.68 million in 2016, as a result of an increase in loans facilitated through our platform and the contribution from the newly launched entrusted loan business. Revenues from loan origination service fees, loan repayment management fees and financing income from entrusted loans were $26.70 million$18.21 million and $1.58 million, respectively, for the year ended 2017 compared to $17.49 million$7.19 million and nil, respectively, in 2016.
  • Net income increased by 344.1% to $15.27 million for the year ended 2017 from $3.44 million in 2016. Diluted earnings per share was $0.21 for the year ended 2017, compared to $0.05 for 2016.

Blockchain startups are overvalued: Q&A with Anju Patwardhan, Managing Director at CreditEase China (Technode), Rated: B

Blockchain technology is in full swing. Baidu, Alibaba, and Tencent are all vigorously investing in blockchain technology and Chinese VCs are fishing for blockchain tech companies. What’s more, the Chinese government is also poised to educate Chinese people about this booming technology. However, that doesn’t mean that all blockchain projects are viable.

With a $500 million fund and another RMB fund with the same amount, CreditEase Fintech Investment Fund is investing in fintech companies, mostly participating in B and C rounds.

European Union

Here’s what investors in France, Spain and Italy are up to (GooRuf), Rated: AAA

Lendix is one of the leading European players in the crowdlending sector for SMEs and although it is not yet active in the UK or outside of Europe, it sure is expanding fast.

So what are investors’ preferences?

– The French investor prefers grade A projects with a duration of 37 to 48 months.
– Spaniards are the most risk-averse and tend to invest more in projects with A and A + grades, but are not opposed to longer durations.
– Italian investors are the most risk-prone: they prefer B rated projects but with shorter durations (0-24 months).

This data shows that the Lendix community invests 11% more on A, A + and B + projects than on B or C ratings. Moreover, the duration seems to have a relative impact in terms of amounts invested, even if investors are more attentive to this parameter in the case of small projects (amounts up to 100,000 euros). In general, the community invests 32% more in long-term projects.

These 2 brothers just declared a mortgage price war – and Sweden is going nuts (Business Insider), Rated: A

Sweden’s mortgage industry is today worth around 3 trillion krona ($370 bn), according to Statistics Sweden, and most of the interest on these loans end up in the pockets of big banks.

A new fintech venture called enkla.com has today launched a potentially game-changing service. The Swedish online lender offers consumers a 0.95% fixed mortgage rate for three years, which is considerably less than the 1,6% average for similar loans among Sweden’s major banks, according to Di Digital.

Enkla’s self-stated goal is to borrow 100 billion SEK ($12,2 billion) worth of mortgages in the next 18 months by issuing mortgage bonds on the international markets, Di Digital writes. If the target is met, Enkla.com would be looking at a 3 percent share of the Swedish mortgage market.

The service enters a market where Sweden’s household debt has exploded from 66 percent to 87 percent of GDP in the past decade, driven by soaring housing prices. Consumers are evidently hungry for a cheaper deal than what banks can offer. Currently, Sweden’s four biggest banks – Swedbank, Nordea, Handelsbanken and SEB – have 75 percent of the country’s mortgage market, Breakit reports.

Enkla.com takes a 0,35% cut on the mortgages.

Beyond data sharing, open banking boosts omnichannel payments (PaymentsSource), Rated: A

In Europe the move to open banking has been driven by regulations such as the revised Payment Services Directive PSD2 and General Data Protection Regulation (GDPR), which compel banks to open their core systems to allow customers to control and release their data to third parties delivering added value services.

In other territories with no regulatory imperative, the drive towards open banking is led by the desire to provide the best customer experience, with added value services, new business models and connected marketplace products from third parties and vice versa. To do this, the application programming interfaces (APIs) of the bank will need to be open and connected to external providers. And cloud technologies will be fundamental in enabling this to become a reality.

International

Tech and Global Money Transfers: Why We Need Each Other (Canstar), Rated: AAA

Digital disruptors such as peer-to-peer lending services, mobile apps and blockchain have shifted the market, offering borderless accounts combined with speed and transparency.

Powering these disruptors are new technologies like artificial intelligence, big data and robotics, which are changing the customer experience; providing unprecedented insights into customer behaviour that help deliver a more seamless money transfer experience.

The World Bank predicts the value of global remittances will grow by 3.4% to USD$616 billion in 2018. In order for the industry to continue to thrive, businesses will be better served by coming together to redefine the future of money transfers.

A bitcoin trading firm just opened up a lending business — and it’s going gangbusters (Business Insider), Rated: A

Bitcoin might be in a bit of a slump, but one brand new bitcoin business is going gangbusters.

Genesis Capital, the recently launched subsidiary of market making firm Genesis Trading, has close to $100 million in loans outstanding, a person familiar with the company’s operations told Business Insider. That’s a striking milestone, considering the business was launched two weeks ago.

It gives out loans worth $100,000 or more in cryptocurrencies including bitcoin, ether, and bitcoin cash. BlockTower Capital, a cryptocurrency hedge fund, and DV Chain, a crypto trading firm, are some of Genesis’ clients, according to people familiar with the matter.

Autonomous NEXT estimates the number of crypto funds has increased to 226. That’s up from approximately 50 at the end of August 2017. In total, they manage approximately $3.5 to $5 billion, a tiny fraction of the $3.2 trillion managed by traditional hedge funds.

What are the technology trends to look out for in 2018? (Investment Week), Rated: A

One key trend at the forefront of the digital space is artificial intelligence (AI). Some estimates predict that the AI market could grow from $5bn to $120bn by 2025.

A report from digital consultancy Juniper Research, has found that annual cost savings derived from the adoption of ‘chatbots’ in healthcare will reach $3.6bn globally by 2022, up from an estimated $2.8m in 2017.

The UK is leading the way when it comes to peer-to-peer lending, and is one of Europe’s largest alternative finance markets at £4.9bn, according to the University of Cambridge’s Judge Business School.

 

Fintech: partner, build, or buy? (Banking Exchange), Rated: A

“Fintech” covers many things, but is often used to refer to nonbank firms that leverage cutting-edge technology to deliver financial services directly to consumers and businesses. In that sense, banks initially viewed fintechs as competition, as they compete for lending, personal finance, payments, and other consumer services.

1. What’s the problem to be solved?

Sounds like common sense, but a fintech partnership should necessitate an extensive evaluation of the underlying need, such as filling in product or service gaps, or, in this bank example, offering borrowers a digital channel for applying and getting to closing quicker on a commercial loan as their primary competitors offered. Clear objectives help the bank and fintech determine if the match is on solid ground from the start.

A fintech partnership should offer the bank an upside—quantitative and qualitative—that simply isn’t available at more favorable cost, risk, and performance measures under the build or buy options.

2. What’s the difference between buying vs. partnering with a fintech?

Is it a shared risk and shared reward? Does the reward justify the risk? Or is it just the innovation culture of the third party? The definition is critical as the process of evaluating a fintech’s performance, costs, and risks entails unique considerations from a typical vendor evaluation.

Many partnerships are really just vendor relationships. That’s okay. In many cases, banks with extremely low risk appetites prefer the typically lower risk of a vendor relationship. One fintech exec noted how impossible it is to run many banks’ risk gauntlets because they don’t understand what they are getting into.

Asia

Indonesia eyes banking boom (Asean Economist), Rating: A

Indonesian banks will enjoy “more than 12 per cent” loan growth this year due to a recovering global economy and rising commodity prices, according to Jakarta’s financial regulator.

Loan growth in Indonesia has fallen below 10 per cent since early 2016, compared with more than 20 per cent during the preceding commodity boom.

MENA

Interview with Ahmed Moor, CEO of Liwwa (P2P Banking), Rated: A

What is Liwwa about?

liwwa is a marketplace lending platform that provides funding to small and medium businesses in Jordan. Our mission is to support job and income growth in the region. To date we have underwritten about 10 million USD in loans. This has helped to create 475 jobs in Jordan, 1.77 million USD in income, and 13.05 million USD in economic output.

What are the three main advantages for investors?

The type of investors we target are financially-savvy professionals who already have a portfolio of investments. They are attracted to our service because it is a way for them to further diversify their existing portfolio. The other advantage is that there are no big barriers to testing out the platform – provided he meets certain basic criteria, anyone can register and there is no minimum amount required in order to start lending.

What are the three main advantages for borrowers?

There is a 240 billion USD capital access gap in the MENA region. For borrowers, we provide a much-needed alternative to bank financing.

Canada

BMO launches banking chatbot with Finn.ai (Fintech Futures), Rated: A

The chatbot – called BMO Bolt – is available via Facebook Messenger, which is Canada’s “top messaging platform”, according to Finn.ai.

84% of the country’s population uses a smartphone to access Facebook and 38% performs mobile banking tasks via mobile phones, the vendor adds.

Authors:

George Popescu
Allen Taylor