Thursday December 28 2017, Daily News Digest

china IPO

News Comments Today’s main news: VPC Specialty Lending Drops Prosper Loans.Best Egg to broaden services in 2018.Faircent raises $4M.RoboCash updates loan origination process.Tyro to launch new SME solutions. Today’s main analysis: China leads Asia’s IPO boom. Today’s thought-provoking articles: Can Lending Club grow by 20% in 2018?Blockchain could transform these major industries.APAC online lending is […]

china IPO

News Comments

United States

United Kingdom

China

  • China leads Asia in IPO boom. AT: Not really news, but it’s interesting to see where Chinese companies are going public. The big winner is the New York Stock Exchange. But Shanghai and NASDAQ are also looking good with Hong Kong hanging in there.”

European Union

International

Australia/New Zealand

India

Asia

Africa

News Summary

United States

Reversal of fortune (Breaking Views), Rated: AAA

Most new entrants have also found it hard to build scale. Lending Club’s top line may grow by 20 percent in 2018, according to Reuters data, but that will take it only to $800 million. Even online student lender Earnest, which largely avoided industry potholes, has struggled. In October it sold itself to old-school servicer Navient for $155 million – less than half its value in a 2015 funding round.

Best Egg Will Broaden to Financing Purchases in 2018 (Banking Innovation), Rated: AAA

Marketplace lender Best Egg will move towards financing consumer purchases, including homes, as it looks to expand in 2018, the company told Bank Innovation.

If I can know my monthly cost for Amazon Prime before I sign a contract, why can’t I know my monthly cost for a car payment before going to the dealership? If I can see movie options before I go to the theater, why can’t I see my financing options before I sign a 5-year loan contract? Being empowered with concrete choices would make both budgeting and buying a car that much easier and help to save hours on the financing process. So, using my personal experiences from childhood to fuel my passion, I co-founded AutoGravity in October of 2015.

Our goal at AutoGravity was to make car financing as easy as watching a movie on Netflix, streaming an album off Spotify or buying a book from Amazon. So, we demystified the process by making it accessible to everyone – empowering them through our app on their smartphone.

Tax cuts, softened regulatory tone likely to help banks in 2018 (Central Penn Business Journal), Rated: A

Financial institutions also could face challenges in the near future as a result of technology-driven competition and long-term impacts from the recently approved tax reforms.

Marsico expects banks to increase automation of certain support-center processes over the next year. Artificial intelligence, for example, could handle some of the work that goes into processing loans, as well as tasks like verifying the authenticity of checks submitted through mobile deposit apps.

One study predicts banks throughout the world will increase their tech budgets by 4.1 percent in 2018.

Consumers still not benefiting from bank overdraft programs (Consumer Affairs), Rated: A

Most consumers still don’t know they are not required to accept their bank’s overdraft protection service, according to the Pew Charitable Trusts’ latest consumer finance project.

Before the law was changed in 2010, banks automatically enrolled consumers in overdraft protection. If consumers made purchases that overdrew their accounts, the banks covered the expense and then assessed an overdraft fee, which often cost as much as $35.

Since the law changed, consumers must opt-in to this coverage — banks cannot automatically enroll them. Thaddeus King, officer of The Pew Charitable Trusts’ consumer finance project, says it’s clear consumers don’t understand that overdraft protection is not only costly, but unnecessary.

In September a survey found that an estimated eight million consumers have opted-in, primarily because they thought they had to. Two-thirds of consumers who agreed to pay the overdraft fees were unaware it was optional.

Banks actively headhunting, but they want specific skill (CNBC), Rated: B

The rising influence of digital and banking-specific technology — so-called fintech — is “really changing how banks themselves will organize their own recruitment functions,” O’Sullivan told CNBC.

United Kingdom

VPC Specialty Lending Sells Prosper Marketplace Loans (London South East), Rated: AAA

VPC Specialty Lending Investments PLC on Wednesday said it sold its Prosper marketplace loans and was able to immediately reinvest substantially all of the proceeds into new investments.

The loans sold represented around 4.1% of VPC’s net asset value as at the end of October, and it expects the hit to net asset value from the sale to be around 0.56%.

China

China bourses behind Asia’s lead in global IPO boom (Nikkei Asian Review), Rated: AAA

Asian companies raised $79.14 billion through initial public offerings as of Dec. 18, up 10% from 2016, data from Dealogic shows. The sum represents 42% of the global tally, which surged 41% on the year to $194.8 billion.

Shanghai, the world’s second largest economy saw a total of 409 companies tapping $31.61 billion from the market, up 30% compared with last year. Of the country’s total funds raised, 56% was from Shanghai, making it Asia’s top IPO destination.

Source: Nikkei Asian Review

Hong Kong saw total funds raised fall 34% to $14.08 billion this year, despite a 24% jump in volume.

Alibaba-backed online lender Qudian, for instance, saw its New York-listed shares tumble 55% after it debuted in October. Its peer LexinFintech Holdings, backed by JD.com, on Dec. 14 slashed its fundraising target by 76% to $120 million.

European Union

P2P Lender RoboCash Updates on 2017 Progress (Crowdfund Insider), Rated: AAA

Latvia-based European peer to peer lender Robo.Cash, a young platform that is less than a year old, has provided an update on loan origination progress.  According to the P2P lender, RoboCash attracted € 2.5 million of investments in pay day lending (PDL) loans in 2017. Robo.Cash launched its platform in Latvia in February 2017.

Robo.cash said the current average sum of investments is € 2.900 per investor with over 1,500 investors from 28 EU-countries have joined Robo.cash in 10 months. The site says investors may be separated as follows:Germany (50,5%), Spain (7,2%), the Czech Republic (6,1%), Austria (4,6%), Latvia (3,9%), Portugal (3,6%), the United Kingdom (3,3%), Netherlands (2,7%), Lithuania (2,3%), Estonia (1,6%).

More retailers’ customers using Klarna’s buy-now, pay-later plan (The Columbus Dispatch), Rated: AAA

The Swedish e-commerce company signed 500 online retailers for its new service, which allows consumers to buy products now and pay for them later.

And the company’s North American operations signed on a new CEO, Jim Lofgren, replacing central Ohio native Brian Billingsley, who recently was named chief revenue officer for Dallas-based payment-service company Modo.

“We serve more than 70,000 merchants over 18 markets, and our data in the U.S. market is really very similar to other markets,” Lofgren said recently. “We’re making a very significant impact for our merchants.”

Brussels moves to boost Europe’s fintech sector (Financial Times), Rated: A

The European Commission is to present draft legislation early next year to remove administrative hurdles to the cross-border operation of crowdfunding sites and online peer-to-peer lending services. It says the initiative will ensure that EU companies can grow and compete.

European fintech successes include TransferWise, the Estonian-developed foreign exchange company, and France’s PayPlug, which makes it easier for sole traders to accept credit card payments.

LoanBook Shares Latest Milestone (Crowdfund Insider), Rated: A

LoanBook, a Spanish marketplace lending platform, having easily surpassed its initial £650,000 last week is, is heading toward the home stretch having raised over £721,200 for 6.40% equity with the help of more than 253 Crowdcubeinvestors. £340,000 of this investment sum comes from current shareholders, local Business Angels and Family Offices. Funding will be used to continue LoanBook’s platform growth and development.

Crowdfunding saves tumbling down French chateau (The Business Times), Rated: B

It’s a modern story of an ancient fairytale castle: a crowdfunding effort online has raised 1.6 million euros (S$2.55 million) to restore a chateau in western France.

Around 25,000 people from 115 countries have become shareholders in the chateau de La Mothe-Chandeniers which has turrets, a moat and an elderly owner who had not maintained it.

International

30 Big Industries Blockchain Could Transform (CB Insights), Rated: AAA

1. BANKING

Swiss bank UBS and UK-based Barclays are both experimenting with blockchain as a way to expedite back office functions and settlement, which some in the banking industry say could cut up to $20B in middleman costs.

2. PAYMENTS AND MONEY TRANSFERS

Abra, another blockchain-enabled mobile wallet and payments startup, was recently integrated into the payments ecosystem of American Express: through a new feature, customers will be able to fund their Abra wallets using an eligible American Express Card.

3. CYBERSECURITY

Other potential applications include using blockchain to provide massive scale data authentication: for example, using its blockchain-enabled KSI (Keyless Signature Infrastructure), cybersecurity startup Guardtime tags and verifies data transactions for cryptographic assurance of their integrity and authenticity.

11. STOCK TRADING

Partnerships with existing trading networks and exchanges will help blockchain take off in the space. Blockchain startup Chain (which is also mentioned below) is a leader on that front: the company helped orchestrate a live blockchain integration that successfully connected Nasdaq’s stock exchange and Citi’s banking infrastructure.

12. REAL ESTATE

Tech startup Ubitquity offers a Software-as-a-Service (SaaS) blockchain platform for financial, title, and mortgage companies. The company is currently working with Land Records Bureau in Brazil, among other stealth clients, to input property information and record documents through the blockchain.

13. INSURANCE 

LenderBot is a micro-insurance proof of concept for the sharing economy that demonstrates the potential for blockchain applications and services in the industry. LenderBot, which allows people to enroll in customized micro-insurance by chatting through Facebook Messenger, enables blockchain to serve as the third-party in the contract between individuals as they exchange high-value items through the sharing economy.

28. CREDIT HISTORIES

Lenders minimize the risk posed by loans or lines of credit to small businesses by evaluating their histories using business credit reports. These third-party reports — issued companies such as Dun & Bradstreet — are inaccessible to the small business owners (beyond the basic profile information they provide to the credit bureau). This can make business owners feel like credit bureaus have all the power over loan terms, even though the credit bureau may be assessing outdated or inaccurate information to determine their reports.

Lumeno.us is one startup using blockchain technology to make business credit reports more accurate, transparent, and shareable. Lumeno.us normalizes semi-structured financial data using a proprietary application of collaborative tagging and advanced analytics. From there, it provides business owners the tools to share their data in order to get a loan, find trusted partners, or manage a portfolio or network.

30. CROWDFUNDING

Initial Coin Offerings (ICOs), in which companies sell cryptocurrency-backed tokens in their companies in the same manner as a publicly-traded company sells stock, are another example of blockchain-powered crowdfunding — startups such as OpenLedgermake that possible. Individuals may soon invest in real estate using “crypto crowdfunding,” as well: Singapore-based Real Estate Asset Ledger (REAL) intends to use blockchain technology to inject greater liquidity and transparency into real estate investing.

How telepresence can revolutionize financial services industry (Born2Invest), Rated: A

Imagine, you are trying to make an investment somewhere in the World and you want to be face to face with your investment advisor without leaving your own office or room?

What is different about telepresence is that you can be telepresent through someone else instead of being even present through video conferencing or other methods.

I the financial sector, companies are using telepresence to connect their customers with their loan officers, investment advisors, and other employees to discuss all the requirements and provide solutions without actually the presence of the customer as well as the financial organization at the same place.

Australia/New Zealand

Challenger Bank Tyro to Launch New Financial Solutions for SME (Crowdfund Insider), Rated: AAA

Australian fintech and challenger bank Tyro is set to launch a new set of financial solutions for small to medium enterprises (SMEs). Founded in 2001, Tyro describes itself as Australia’s largest independent EFTPOS provider, focusing on smaller to medium enterprises. The company states it is now has a license from APRA to offer banking products and deposits with its platform are government guaranteed. The company currently has 20,000 customers and has $42.2 billion in transaction.

Online Financing Down Under: A Rapidly Evolving Market (TG Daily), Rated: AAA

The research paints a clear picture of trends currently taking place in Australia and New Zealand, where $348.37 million and $267.77 million respectively has been issued through online financing options (through 2015). These statistics are notable since 2012, with a growth rate of 653% between 2013 – 2015.

Various small business loans lenders currently offer funding to Australian clients from $5,000-$400,000 (depending on the industry lender). Australian small business loans lenders such as prospa, Capify, Sail, and Spotcap dominate the market.

India

Online Peer-To-Peer Lending Startup Faircent Raises $ 4 Million (Bloomberg), Rated: AAA

Faircent raised $4 million (Rs 25 crore) in early-stage funding led a Belgium-based impact investor Incofin Investment Management, Rajat Gandhi, co-founder of Faircent, told BloombergQuint over the phone.

P2P lending marketplace platform launched (The Hindu Business Line), Rated: AAA

Rajiv Ranjan, a former Infoscion along with Ambar Kasliwal, a Mumbai-based Chartered Accountant, has launched a fully-owned P2P lending marketplace platform.

Called PaisaDukan.com, it is a part of BigWin Infotech, a government recognised start-up and it aims to start operations from January 2018, company officials said. The startup is among a few who have applied for an NBFC ((non-banking financial company)-peer-to-peer (P2P) licence after RBI’s revised guidelines.

Fin-tech gains from innovations, digital push (VC Circle), Rated: AAA

Private equity and venture capital firms, which sat on huge money piles and waited on the side lines looking for the right opportunities, caught on to the excitement and loosened their purse strings to record a four-fold jump in investments to $1.84 billion in 2017 from $447 million, showed provisional data from VCCEdge, the data and analysis platform of News Corp VCCircle.

While seed and angel investments accounted for 43% of the total number of deals at 32, growth- and late-stage deals, besides private transactions and venture debt accounted for the rest.

Besides, Paytm’s $1.4 billion infusion from Softbank, Policybazaar’s $77-million Series-E round, SME Lending platform Capital Float’s $45 million Series-C funding, MSwipe’s $41 million funding from UC-RNTand Eduardo Saverin’s B Capital, and Mobikwik’s $35 million round from Bajaj Finance also made the headlines during the year.

Source: VC Circle

RBL Bank to go stronger on fintech partnerships (Economic Times), Rated: A

While banks are fighting a bitter turf war with fintech startups to retain their share of business, private sector lender RBL Bank has seen value in strategic partnerships. The bank is growing its advances book by almost half annually, driven largely by partnerships with non-banking finance companies (NBFC) and tech startups.

While startups such as MoneyTap, BookMyShow are helping the bank acquire customers for its credit products, even its tie-up with one of the most prominent NBFCs Bajaj FinservBSE -0.14 % is helping the bank get customers who were never eligible for a credit card previously.

Rein in your exuberance as you step into 2018 (Business Standard), Rated: A

Investors need to position their personal finances in a manner that will enable them to gain from developments in the future.  Book profits in the mid- and small-cap space: Mid- and small-cap funds’ strong performance streak continued in 2017 (category average return: 47.19 per cent year-to-date). As valuations of growth stocks shot up, investors turned to value picks. …

Asia

Robo-advisory and its role in capital management (Fintech Innovation), Rated: AAA

Africa

Robots versus financial advisors (Moneyweb), Rated: A

With the advent of robo-advisors, where advice is provided at low- or no cost over the internet, questions are being raised as to the future of qualified financial advisors. Is my job becoming obsolete?

A qualified and trusted advisor is able to spot potentially poor financial decisions and gently advise against this course of action. A robo-advisor could never be such a friend in need.

Authors:

George Popescu
Allen Taylor

Thursday December 21 2017, Daily News Digest

PBC interest rates

News Comments Today’s main news: SoftBank leads $120M funding round for Lemonade. Shareholders file class action against Qudian. RateSetter looks to cautious growth in car financing. LoanBook rakes in 650K GBP on Crowdcube. Prospa planning a 2018 IPO. Today’s main analysis: Muddy Waters goes cold on China Internet Nationwide Financial Services Inc. (CIFS). Today’s thought-provoking articles: Two big banks […]

PBC interest rates

News Comments

United States

United Kingdom

China

European Union

Australia

India

Asia

Canada

News Summary

United States

SoftBank leads a $ 120 million round for insurance startup Lemonade (TechCrunch), Rated: AAA

The SoftBank Group has finally made a good tech investment around real estate.

After investing $4.4 billion in what is essentially a bespoke office space rental business (WeWork) and another $450 million in Zillow for rich people (Compass), the gargantuan Japanese tech investor is leading a $120 million round of funding for Lemonade, a startup providing renters and homeowners insurance.

Additional investors in the round include previous backers Alphabet’s investment firm, GV, General Catalyst and Sequoia Capital.

Shareholder Class Action Filed Against Qudian Inc. – QD (GuruFocus), Rated: AAA

The law firm of Kessler Topaz Meltzer & Check, LLP announces that a shareholder class action lawsuit has been filed against Qudian Inc. (NYSE: QD) (“Qudian” or the “Company) on behalf of investors who purchased the Company’s securities between October 18, 2017 and November 20, 2017, inclusive (the “Class Period”).

Qudian shareholders may, no later than February 12, 2018, petition the Court to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel, or may choose to do nothing and remain an absent class member.

Two Big Banks Set to Launch Their Own Online Lending Platforms (Lend Academy), Rated: AAA

A little over a year ago Goldman Sachs launched their consumer lending platform Marcus as part of a digital strategy to move into the retail banking segment. They have since grown faster than any online lending platform with originations approaching $2 billion. Goldman Sachs now believes revenues from online loans will equal that of trading in the near future.

U.K. based Barclays has been increasing their footprint in the U.S. the last few years through the Barclaycard brand. They are now one of the top 10 credit card issuers in the US.  News broke last month that Barclays would be launching a digital bank in 2018 and rebranding from Barclaycard to Barclays in the US.

Pittsburgh based PNC Financial Services Group is one of the top 10 largest banks in the US with $371 billion in assets. They are looking to launch their online consumer lending product in new branches and through their mobile wallet product.

From On Fire To Under Fire: Marketplace Lending Enters 2018 Taking On Flak (ValueWalk), Rated: A

After a meteoric rise, marketplace lending has had its share of challenges and scrutiny, but the future should still be bright for such an industry on the forward edge of technology and consumer needs. Yet marketplace lending seems to be ending 2017 under an unwarranted attack from regulators and commentators determined to find similarities in marketplace lending to the subprime mortgage market in the years leading up to the financial crisis.

EquityMultiple CEO Charles Clinton Highlights Real Estate Opportunities & Disruption, Predictions for 2018 (Crowdfund Insider), Rated: A

CEO Charles Clinton and CIO Marious Sjulsen co-founded EquityMultiple with a shared vision of transforming real estate investing through tech and by providing new access to private transactions while streamlining the investment process.

Erin: Please share EquityMultiple’s latest stats.

Charles: We’ve funded 32 investments to date and are expecting to hit around 100% year-over-year growth in dollars invested. For investments that have fully repaid or are currently cash-flowing to investors, we’re averaging around a net 9% annualized dividend.

Erin: What sets EquityMultiple apart from its industry peers? How will EquityMultiple continue to differentiate itself?

Charles: We’ve taken a different path from most of our direct competitors and I suspect that will continue. This started at the very beginning – rather than look for venture capital financing, we sought out a real estate firm to partner with and found that in Mission Capital, a national capital markets firm that has done over $70 billion of business in its 15-year history.

Erin: Earlier this year you stated that individuals made up 100% of EquityMultiple’s investments. Has institutional money entered into this investment flow?  Why or why not? What are your methods of tapping into new investors?

Charles: We are still 100% focused on individual investors by design. We feel that individual investors are the customers that we provide the most value to. For institutional investors, there often is no real accessibility issue for getting into commercial real estate. Individual investors, on the other hand, are significantly under-allocated into real estate by comparison.

Krawcheck expands Ellevest robo to three service levels with more human advice (InvestmentNews), Rated: A

Investors can access the robo-adviser by itself for 25 basis points (formerly 50 basis points), which includes algorithmic portfolio construction, tax minimization strategies, and now support from human advisers via email and text.

For 50 basis points and an account minimum of $50,000, investors can access Ellevest Premium, which includes the technology platform as well as personalized goals-based planning from an adviser with certified financial planner credentials.

Why Employers Need To Help Workers Deal With Income Volatility (Forbes), Rated: A

Roughly a quarter of American families suffer a major disruption to their income each year, according to the Urban Institute. Nearly one in five of those families suffer an income drop of 50% or more: a potentially catastrophic shock for low-income families.

But it’s not just these one-time shocks that affect families’ ability to plan and save — it’s the month-to-month fluctuations, as well. The JP Morgan Chase Institute foundthat, between 2012 and 2015, 55% of the bank’s customers regularly experienced more than a 30% change in income — up or down — from one month to the next.

BankMobile deploys AI, alternative data to lend to FICO-poor students (American Banker), Rated: A

BankMobile has become the first bank to start using online lending software developed by Upstart, which is designed to use artificial intelligence and alternative data to determine the creditworthiness of consumers with thin or no credit files.

BankMobile, the digital-only subsidiary of Customers Bank in Wyomissing, Pa., which is due to be spun off and merged with Flagship Community Bank in mid-2018, is planning to use the software to offer its first credit product to the students it reaches through relationships with 800 universities.

 

Merrill Lynch Fined $ 1.4M Over Supervisory Failures (Financial Advisor IQ), Rated: A

Finra has fined Merrill Lynch $1.4 million for alleged supervisory failures related to extended settlement transactions, the industry’s self-regulator says in a press release.

From April 2013 through June 2015, the wirehouse allegedly didn’t collect enough margin to offset credit, market and exposure risk presented by the longer time period between trades and settlements inherent in such trades, Finra says.

‘Banks can’t attract the talent they want or need’ (Tearsheet), Rated: A

Banks have always proclaimed themselves as technology companies with banking licenses. But culturally, banks are still banks: conservative. Innovation teams can only innovate so much before someone in legal or compliance tells them no; they can only move so fast before someone tells them to slow down.

In this installment of Confessions, in which we trade anonymity in exchange for honesty, we spoke with an analyst at a startup attached to a large bank about internal innovation, attracting strong talent and why alternative bank service companies should get serious about becoming or partnering with a bank.

10 who had a rough year in 2017 (American Banker), Rated: A

Move over Wells Fargo, another prominent financial firm has taken your place as the poster child for bad behavior.

Equifax, the credit reporting agency whose primary responsibility is to protect consumers’ personal information, became public enemy No. 1 this year when it revealed that thieves hacked into its database and stole the personal information — birth dates, credit card data, Social Security numbers — of some 145 million consumers.

Runway Growth Credit Fund Successfully Closes $ 275 Million Equity Offering with Increased Investment from Oaktree Funds (BusinessWire), Rated: A

Runway Growth Credit Fund Inc. (“Runway Growth Credit”), a provider of term debt to fast-growing companies seeking an alternative to raising equity, today announced the successful closing of its $275 million initial equity capital raise with an increased commitment to $139 million from OCM Growth Holdings, LLC, an entity owned by certain investment funds managed by Oaktree Capital Management, L.P. (“Oaktree”), along with commitments from other investors.

Investors Commit 0 Million to tZERO ICO (Coindesk), Rated: A

As reported by CoinDesk, the first leg of the sale – in which the firm is selling Simple Agreements for Future Equity (SAFEs) that will later be redeemed for tokens by accredited investors – began yesterday, albeit a bit laterthan planned. Hiccups aside, Byrne told CoinDesk the sale ultimately attracted a big crowd – some 2,000 accredited investors.

As such, he indicated the company may move to shorten the initial two-month timeframe for the token sale.

Some of the offers, he said, were as high as $5 million or more for single token allocations.

OCC’s Otting sees future for fintech charter, CRA reform (American Banker), Rated: A

Comptroller of the Currency Joseph Otting said in a press conference Wednesday morning that there is a place in the banking world for some kind of fintech charter, though the exact parameters of such a charter are still unclear and have to be worked out.

“I’m not sure what it looks like, and how it’s funded, but I do think there’s a space there that a technology solution can solve,” Otting said when asked whether he sees a future for the Office of the Comptroller of the Currency’s nascent fintech charter.

BLACKSTONE LOOKS AT THE SECONDARY PRIVATE EQUITY MARKET (All About Alpha), Rated: A

An October paper put out by Strategic Partners Fund Solutions, of Blackstone, argues that (despite risks and drawbacks) investing in the secondary private equity market  can still be a smart play, offering “accelerated returns with lower volatility, lower loss rates, and greater downside protection” than the primary market.

How the digital community is supporting small business (Rapid Growth Media), Rated: A

The 2016 Small Business Credit Survey, published by the Federal Reserve Bank of New York, reports that startups are more likely than their mature counterparts to be undergoing growth and planning to add jobs. The report shows 70 percent of startup applicants are in need of funding to support this growth, versus 60 percent of mature applicants. Additionally, in 2016, 52 percent of startups applied for financing.

The Credit Survey highlights that only “31 percent of startup applicants were approved for the full amount of financing sought”.

Debt crowdfunding: Peer-to-Peer lending

Lending Tree was a revolutionary option for individuals to secure financing when they simply wanted to compare options or if they may not have been bankable. Kiva, for example, allows lenders to contribute small amounts, sometimes as little as $25, to help fund requests.

As of October 2017, Kiva reports funding over 1M loans resulting in $1 billion being lent.

Equity crowdfunding

Now, instead of searching for affluent individuals looking to invest in a business, entrepreneurs can turn to sites like MicroVentures. MicroVentures is a public, online venture capital investment bank. Investors have the opportunity to invest as little as $100, which opens up the market to a much larger pool of potential investors. This option is best suited for established companies with strong historical performance and larger financial needs. Since their launch in 2011, MicroVentures reports facilitating over 160 investments, resulting in over $100M in capital investment to date.

Mayor Kasim Reed Announces Bank on Atlanta Initiative (AJC.com), Rated: B

Bank on Atlanta, a financial access program that will focus on providing free or low-cost banking products, along with financial education and financial counseling, to unbanked and underbanked residents in the city of Atlanta has been created.

Research shows that relying on alternative financial service providers such as check-cashing or payday lending establishments makes it hard for residents to rise out of poverty in our city.

9 Holiday Gift Cards That Give You Something for Nothing (TheStreet), Rated: A

Online student loan marketplace LendEDU.com studied the most sought-after gift cards and listed them in descending order: Amazon (AMZN – Get Report) , Walmart (WMT – Get Report) , Target (TGT – Get Report, Best Buy (BBY – Get Report) , and Subway. But these cards sold for only 2% to 5% less than face value, compared with 1-800-Flowers (FLWS – Get Report) , H&M or Dress Barn gift cards which offered, on average, 30% off face value on their sites. Even Dunkin’ Donuts (DNKN – Get Report) and Godiva mark down their gift cards by 25%.

RealtyMogul Hires New Chief People Officer (BusinessWire), Rated: B

RealtyMogul, a unique commercial real estate private markets investing platform, today announced the addition of Soley Van Lokeren as Chief People Officer.

Credit Karma adds Gannesh Bharadhwaj as General Manager, Credit Cards (Credit Karma), Rated: B

Credit Karma, the leading personal finance technology company in North America, today announced it has appointed Gannesh Bharadhwaj as general manager of credit cards. Previously president of Renew Financial, Bharadhwaj brings a strong background in financial institutions as Credit Karma remains focused on using innovative technology to bridge the gap between banks and consumers.

The Small Business Benefits of Being Charitable (Business2Community), Rated: B

Entrepreneurs can make charity a part of their approach to business, and in a variety of ways. A survey by Funding Circle revealed some interesting figures, as reported by Joshua Sophy last December for smallbiztrends.com.

  • Of 1,400 small business owners polled, 52 percent said they were donating or had already donated to charity.
  • 46 percent planned to donate “up to $1,000.”
  • 44 percent preferred to donate cash.
United Kingdom

RateSetter plans ‘cautious growth’ in car finance market (P2P Finance News), Rated: AAA

RATESETTER is planning to grow its motor finance division to take advantage of the huge opportunities it sees in the market.

The peer-to-peer lender entered the consumer hire purchase industry in May when it acquired Vehicle Credit Limited out of its parent company’s administration as part of its wholesale lending “interventions”. Vehicle Credit Limited has now been integrated into the group as part of RateSetter Motor Finance.

Chip, the chatbot savings app, raises over £1M in crowdfunding with plans to apply for a banking license (TechCrunch), Rated: A

Chip, the chatbot app that plugs into your bank account and lets you automatically save for a rainy day, has raised nearly £1.1 million on equity crowdfunding platform Crowdcube.

The fund raise, which is part of a larger £2.4 million funding round, forms part of plans for the London-based startup to apply for a banking license so that it has more flexibility regarding the kinds of products it can offer in the future. The app currently claims 30,000 active users “who are collectively saving millions a month”.

China

Muddy Waters Is Short China Internet Nationwide Fncl Srvcs Inc (CIFS) (ValueWalk), Rated: AAA

We conclude that China Internet Financial Services Inc. (NASDAQ:CIFS) is a King Zero – just another worthless China fraud, says Muddy Waters Research.

  • Every one of the purported borrowers to which CIFS disclosed having made loans (accounting for 84.2% of loan balances) appears to be a sham counterparty.  (The purported borrowers of the remaining 15.8% of reported loan balances were not disclosed; however, we strongly suspect that most – if not all – of these loans and associated income are also fabrications.)
  • CIFS’s recently announced “big data” company purchase also appears to be a lie.
  • 47.3% of CIFS’s reported 2016 net income purportedly was generated by its Kashgar subsidiary; however, that subsidiary existed for only two days in 2016.
  • CIFS is too good to be true – claiming to turn a seeming commoditized business model into an overnight juggernaut with purported gross margins over 97% and net margins over 70%.
Source: ValueWalk

Read “The Farce Awakens: CIFS” in full here.

China Ripe for Auto Finance Boom as Consumer Penetration Rate Rises (Auto Finance News), Rated: AAA

Since 2009, China has surpassed the United States as the largest market for new-vehicle sales, according to Deloitte Consulting LLC. And now, auto finance is starting to catch up.

For many years, the Chinese automotive market has been propped up by government incentives like tax breaks, which encouraged customers to purchase cars. So far, this incentive has led to more than 2 million cars being sold a month, with growth running up 15% last year, the Wall Street Journal reported in March. But as the tax breaks are expected to wind down, auto lenders have a greater opportunity to step in and capture marketshare in China, where penetration rates remain lower than other developed nations.

In the U.S., for instance, 84% of new cars in the U.S. were financed in 2014 compared with 20% in China, according to Experian. The Chinese auto finance rate rose to 38% in 2016, and is expected to rise steadily in the next few years; reaching an estimated 55% in 2021, according to ReportLinker.

Debtors in China are placed on a blacklist that prohibits them from flying, buying train tickets, and staying at luxury hotels (Business Insider), Rated: A

China maintains a public blacklist of debtors that effectively restricts their movements and their spending habits.

The country’s highest court publishes the names and ID numbers of “dishonest people” on its website and restricts those people from flying domestically, using high-speed trains, or enrolling their children at expensive private schools.

Defaulters are also prevented from staying at hotels with three-stars or more. They also face tougher exams if they want to join the civil service, and are charged higher fees for booking cars. The bans work by linking to a person’s ID number. Some people used their passport when travelling to circumvent the ban, but that loophole now appears to be closed.

European Union

Spanish Marketplace Lending Platform LoanBook Secures £650,000 Funding Target on Crowdcube (Crowdfund Insider), Rated: AAA

LoanBook, a Spanish marketplace lending platform, has successfully secured its initial £650,000 funding target from more than 200 investors through equity crowdfunding platform Crowdcube. Founded in 2013, LoanBook claims to be Spain’s largest marketplace lending platform, with a 4-year track record of working capital lending to Spanish SMEs and 40% market share.

Two Additional Ways to Improve API Security for Fintech startups (Finextra), Rate: AAA

It’s simple: the probability of being under cyber attack is 100%.

With high probability and high impact, the risk is very high that API’s in the PSD2 era will enable a New Normal in Bank Robberies. Not IF, rather WHEN and WHO.

1. Consider new AI-based approaches in vulnerability scanning.

2. Know what’s under the hood

Think of the Infineon-developed RSA Library version v1.02.013, which lead to Estonia having to reissue over 750,000 certificates, part of their National ID scheme. Or the 2014 GnuTLC bugwhich allowed a Man-in-the-Middle attack due wrong behavior during a TLS handshake.

My advice is to keep track of all dependencies and track vulnerabilities in all underlying components. OWASP has a project calledDependency-Check aimed to do just that.

5 hugely successful Nordic entrepreneurs share their advice to young people (Business Insider), Rated: A

iZettle CEO Jacob de Geer says you should team up with peers – and experiment.

“Apart from getting the business started, is to experiment with whatever idea you have. Most of your trials will fail, but one in 100 will work. If you view problem solving as a way of increasing the value of the company that you are building, then you are off to a good start.”

Klarna co-founder Sebastian Siemiatkowski thinks it’s important to have a holistic approach to problem solving.

When I advise young entrepreneurs, I tell them, “It’s not about figuring out the best business ideas, and it’s not about solving problems theoretically, but it’s about testing your ideas. It’s about coming up with an idea, and then trying it and learning from it.”

A small fintech company surges 250% after launching a blockchain-focused business unit (Business Insider), Rated: A

Australia

Online lender Prospa joins the 2018 IPO pipeline (Financial Review), Rated: AAA

Investment bankers lining up for a stronger 2018 pipeline of initial public offerings have online business lender Prospa in their sights.

Street Talk understands a handful of banks have pitched their wares to Prospa’s chief executives Greg Moshal and Beau Bertoli in recent weeks ahead of a planned run at the local bourse some time next year.

India

“Five best alternative investment strategies to consider in 2018” (Business Today), Rated: AAA

Alternative investing is as much a mindset, as it is about specific investments. Here are some alternative investments approaches culled from our members around the world that are applicable to any investment decisions.

Invest in markets or assets that your analysis leads you to believe will do well; don’t invest in a product just because it’s likely to (or, worse, has in the past) “outperform the market”.

Understand that returns are one-dimensional, risk is multi-dimensional

You should constantly revisit your assumptions of the return drivers of the investment (much more so than its price performance), in case they change and you need to rethink your investment.

When we’re asked to define alternatives, we often end up saying “well, anything that’s not traditional”. Actually that’s not quite such a lame definition; alternative investment practitioners know that the best opportunities are usually those that are yet well known or exploited, and hence the field of “alternative investment” is one populated by investment ideas that may not be immediately obvious.

Diversification is the only free lunch – make sure you are diversified

Alternative asset classes: P2P lending emerges as viable option in India (Financial Express), Rated: A

India has a unique problem of too much money chasing too few customers. So at one end, we have traditional salaried class getting loan offers and at the other end, people are left at the mercy of hawkish money lenders ever-more resembling Shakespeare’s Shylock. Clearly, P2P lending and borrowing is the disruption that was waiting to happen as banks and NBFCs have successfully struggled at twin accounts of making credit affordable and accessible in a credit-hungry nation.

Regulations helped fintech mature in 2017; yet 2018 may prove challenging for cos to navigate (Economic Times), Rated: A

If 2016 saw demonetisation change India’s fintech ecosystem forever, this year will be remembered for the Reserve Bank of India’s (RBI) multiple regulations aimed at organising the sector. Recognition of peer-to-peer lending startups, revised guidelines for digital wallets, finalising charges for digital payments—the second half of the year saw it all, setting the template for a more mature yet challenging 2018.

Meet The Top 20 Finalists Of The 5th Edition Of Wharton India Startup Challenge (Inc42), Rated: B

The 22nd Wharton India Economic Forum (WIEF) has announced the finalists of the Yes Bank – Wharton India Startup challenge.

Perpule: Perpule’s 1Pay is a self -checkout app for express checkouts and easy payments in Perpule’s partnered stores like Hypercity, Spar etc.

Capzest: Capzest is a digital lending platform focused on providing unsecured credit to individuals for income generation purposes. It secures partnerships with income generation service platforms and provides short term capital to their various stakeholders. It was founded in October 2015 in Mumbai by Rohan Adlakha andSayantan Sarkar.

Luharia Technologies Pvt. Ltd: Based in Hyderabad, Luharia Technologies owns and operates peer-to-peer platforms for businesses and individuals. Founded by ISB alumni Keerthi Kumar Jain, Luharia’s flagship solution is Vote4Edu, which is an online peer-to-peer lending platform for K-12 education loans. The company also runs Vote4Cash, a P2P marketplace where borrowers can avail cash loans. Machine Bank, an infrastructure ecommerce platform, and P2P lending platform SMEBank are also owned by Luharia Group.

Asia

Cyberattack brings a cryptocurrency exchange to its knees (Business Insider), Rated: A

A South Korea-based cryptocurrency exchange was brought to its knees by a cybersecurity attack.

Yapian, the operator of crypto-exchange Youbit, halted trading of cryptocurrencies on its venue Tuesday and filed for bankruptcy after a hack, according to reporting by The Wall Street Journal.

The Journal reported the exchange had 17% of its digital currency holdings stolen.

How to get a personal loan without a credit score? (Asianet Newsable), Rated: B

Your credit score reflects how well you have treated your credit in the past. It is one of the most important factors that lenders consider while evaluating a loan or credit card application. But what if you don’t have a credit score?

  1. NBFCs

If your bank has rejected your personal loan application, approach NBFCs. Since they usually target customers with low or no credit score, they are more flexible with credit scores than banks.

  1. Peer to Peer Lending

Since P2P platforms connect borrowers and investors online, they run with lower overheads and resultantly offer services cheaper than what traditional financial institutions have to offer. There are over 40 peer-to-peer lending platforms in India that are helping a large section of people who have been failed to qualify for loans from banks.

Canada

RATEHUB REPORTS GENERATIONAL DIVIDE WHEN IT COMES TO TRUST IN FINTECH (Betakit), Rated: A

A RateHub report examining FinTech trends in 2017 found that there is a generational divide when it comes to trust in the emerging technology.

Nearly twice as many millennials (44 percent) and Generation Xers (42 percent) said they trust robo-advisors, compared to baby boomers (23 percent).

Forty-seven percent of millennials and forty-eight percent of Gen Xers trust marketplace lenders, compared to 23 percent of boomers.

Online banking and contactless payments were the two most trusted FinTech offerings this year, capturing the trust of 85 percent and 62 percent of Canadians on average.

Access the full report here.

Authors:

George Popescu
Allen Taylor