Thursday October 10 2019, Weekly News Digest

Lend Academy

News Comments Today’s main news: Affirm debuts shopping app. Zopa profits tick upward. RateSetter recovering from loan scandal. PPDAI stock rises 7% with lift in institutional-funded loans. Oportun ends Nasdaq debut with 8% gain. Australia: RBA cuts interest rates, online lenders follow. Today’s main analysis: The Future of Finance: Marcus, Neobank, and fintech. (A MUST-READ) […]

The post Thursday October 10 2019, Weekly News Digest appeared first on Lending Times.

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News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

OnDeck Survey: Economy is Top Concern for Small Businesses Ahead of 2020 Election (New Kerala), Rated: AAA

OnDeck today announced the results of a national survey of U.S. small business owners that finds economic issues are the most important factors in determining their choice for president in 2020.

  • Economic concerns arise in several dimensions, including tax policy, job growth, support for small businesses, government spending and the overall economic climate. These issues were cited as the top concerns of more than 33% of those surveyed;
  • Immigration was an issue of interest for 11.3% of small business owners surveyed, ranking second behind the economy as a concern.
  • 57% of small businesses surveyed said they were either Very Optimistic or Somewhat Optimistic about the economic outlook for their businesses;
  • 93% of those surveyed said they plan to vote in the 2020 election.
  • 60% of small business owners surveyed said they already know who they plan to vote for in the 2020 presidential election.

Affirm debuted a new app encouraging customers to start their shopping journeys with it (Business Insider), Rated: AAA

The point-of-sale (POS) financing provider 

Source: Business Insider

Affirm ships new shopping and bill splitting app (Finextra), Rated: A

Affirm’s app also allows consumers to pay at any brick-and-mortar store that accepts Apple Pay or Google Pay, which is increasingly important as 24% of consumers want the flexibility to look online and shop in-store.

Those with Apple Pay or Google Pay enabled have also seen up to 14% of transactions driven in-store, making the Affirm app a rare omnichannel solution for customer acquisition.

Max Levchin On The Future-Present Of Everywhere POS Lending (PYMNTS), Rated: A

Since Affirm’s launch, the landscape in the POS space is radically different than it was when Affirm entered. It is, first and foremost, a much bigger and more populated space than it once was. Other startups have come to the field — AfterpayUplift and Sezzle for example — but also bigger and more established names in financial services. In the last 12 months alone SquareMastercardPayPal and Chase have all rolled out POS installment lending products or enhancements as the market continues to pick up popularity among consumers, particularly younger ones.

Latest Macro; latest from Marcus; Oportun goes IPO (PeerIQ), Rated: AAA

Q4 is off to a brisk start. The jobs report released this past Friday shows 114K in net new jobs (vs expectations of 120K), generally flat wages, and a drop in the unemployment rate to 3.5%.

On the one hand, the US economy is near ‘stall speed’ – around 1 to 1.5% growth rate.

Source: PeerIQ, The Daily Shot, Conference Board

House prices are expected to rise 5.8% over the next year due to low mortgage rates.

Two major financing announcements this week. FinTech lender, Oportun, led by CEO Raul Vazquez, ends its Nasdaq debut with an 8% gain. The debut is notable as it represents a positive shift in the sentiment to the reception of lenders to the IPO market.

My Quarterly Marketplace Lending Results – Q2 2019 (Lend Academy), Rated: AAA

The upward trend in my returns continued in Q2, making it the fifth quarter in a row with increasing returns. My preliminary return for the 12 months ending June 30, 2019 is 6.20% (one investment is still not final), the best I have achieved since Q3 2017.

Source: Lend Academy

The Maybe-Dubious Rise of the Loans-for-Sneaker Business (GQ), Rated: AAA

Afterpay is one of a number of platforms that have sprouted up over the past couple years that are willing to float customers a couple hundred or thousand dollars to shop. In addition to it, there are Affirm, Sezzle, Klarna, and Quadpay. They are positioned as a more consumer-friendly option than credit cards, a whole host of services bent on—because this is 2019—disrupting the powers that be.

Globally, Afterpay, which launched in Australia, has over 4.6 million customers and 35,000 retail partners. In the U.S., where Afterpay only launched in May of last year, it has two million customers and is available at 6,500 retailers. Over three million people use Affirm, while another 500,000 have shopped with Sezzle.

Silicon Valley promises aside, Afterpay is, at best, a platform that allows you to take out what amounts to a small loan on an item. After an approval process—Afterpay does not check a credit score; others like Affirm do—the customer pays a fourth of the price upfront and the rest is paid off in three equal installments every two weeks.

Also new is the $1,500 limit, up from $500, that Afterpay raised after Hyde-McCormick proved himself a responsible shopper and the $87.50 payments currently due every two weeks.

What Happened to Borro? (deBanked), Rated: A

In 2013, Borro, an innovative online lending company that was poised to disrupt pawn shop lending forever, invited me to their stylish offices at 767 Third Avenue in Manhattan.

Borro made $50 million worth of such loans in 2013 and doubled that number in 2014.

Auto, home equity are soft spots in consumer lending (American Banker), Rated: A

In its quarterly report that tracks consumer delinquency trends, the American Bankers Association said that 30-day past-due rates ticked up in eight of 11 categories in the second quarter when compared with the first quarter, but stressed that delinquencies remain well below historic norms.

Finally! Maker Offers Multi-Collateral DAI Lending (Cryptovest), Rated: A

Maker DAO, the most active decentralized finance app on the Ethereum network, has announced a date for its long-awaited multi-collateral DAI generation. According to observers, November 18 may be the date MKR starts accepting other assets as collateral.

Multi-collateral DAI creation has the potential to be riskier in comparison to ETH-based models. Currently, Maker is deliberately over-collateralized at above 300%, with the minimum at 150%, due to the high volatility of crypto assets.

A $ 40 Billion Pile of Leveraged Loans Is Battered by Big Losses (Bloomberg), Rated: A

Loans tied to more than 50 companies have lost at least 10 percentage points of face value in just three months, according to data compiled by Bloomberg. Some have dropped a lot more, with lenders lucky to get back just two-thirds of their investment if they tried to sell.

It’s hardly a full-blown apocalypse for the junk-rated leveraged loan market, which totals $1.2 trillion.

Energy is the hardest-hit sector on the list, with more than $12 billion of loans falling more than 10 cents on the dollar. Consumer and health care follow, comprising around $8 billion and $5 billion of loans outstanding, respectively.

Source: Bloomberg

Ruling cuts short debt collectors’ victory lap over CFPB proposal (American Banker), Rated: B

Under the CFPB’s May proposal, debt collectors could have unlimited contact with debtors through email and text messages, though consumers could opt out of such communications. Additionally, collectors could satisfy disclosure requirements with a hyperlink embedded in an email that takes consumers to a description about how they can dispute a debt.

The SEC is hiring a chief data officer (Business Insider), Rated: B

The Securities and Exchange Commission is hiring its first chief data officer, according to a job posting for the role.

Voyager Selects Celsius Network to Manage Certain Assets (AP News), Rated: B

Voyager Digital, LLC, a subsidiary of publicly-traded Voyager Digital (Canada) Ltd (Ticker VYGR.CN), an industry-leading best execution crypto asset broker, today announced a partnership with Celsius Network, in which Celsius will manage a portion of Voyager’s digital assets.

United Kingdom

Zopa’s P2P profits tick up but group losses widen due to heavy investment in bank (P2P Finance News), Rated: AAA

Zopa Group – which incorporates the P2P platform and upcoming digital bank – reported a pre-tax loss of £18.295m for the year ended 31 December 2018, compared to a pre-tax loss of £5.536m the previous year.

Zopa: nine in 10 shoppers confused by car finance options (Verdict), Rated: A

In a survey of 2,000 consumers, 47% of people who had recently bought a car with finance are unable to identify which type of finance deal they signed up for. Zopa estimates that the average car buyer could save up to £11,000 over the course of their lifetime by working out the best finance deal available.

Ratesetter recovering from loan scandal (The Times), Rated: AAA

One of Britain’s largest peer-to-peer lenders appears to be recovering from a toxic loan scandal after its latest results showed it edging towards breaking even.

Accounts for Ratesetter, which links 56,000 ordinary investors with consumer and business borrowers, show that pre-tax losses narrowed by 69 per cent in the year to March.

Wonga customers’ average compensation payout may be just £118 (The Guardian), Rated: A

Customers who were mis-sold loans by the collapsed payday lender Wonga are expected to receive less than 10% of what they are owed in compensation after administrators revealed that only £41m will be put aside for claimants.

Payday loan alternative Savvy secures £20 million funding facility (Finextra), Rated: A

Stockport and Wilmslow based fintech company Savvy.co.uk is to create 25 jobs after securing a £20 million investment.

The funding, from London-based Cairn Capital, will increase lending capacity for the company who provide an ethical alternative to pay-day loans.

MEET THE FRENCHMAN WHO WANTS TO SOLVE THE UK’S HOUSING CRISIS (Business Leader), Rated: A

WHY DID YOU START BLEND NETWORK?

I started working in the financial industry as an FX trader before moving to trading gold and copper, both much more inefficient markets than FX. I realised that the UK property market was a hugely inefficient market in the sense that lenders and borrowers are not meeting. On the one hand, you have very experienced property developers across the country who are trying to access funds to build homes but traditional lenders are no longer active in providing development finance.

Instead, we lend in places such as Coventry, East Anglia, Doncaster, Northern Ireland. Northern Ireland is a very good example of our strategic approach to lending. Last year, we did around 80-85% of our business in Northern Ireland.

Crowdfunding a start up options explained for businesses and investors (What Investment), Rated: A

Crowdfunding a start up brings to mind the statement ‘Nothing worth having comes easy’, never truer than in the case of launching a start-up. Getting a new business off the ground will often require capital. Something which a lot of people don’t know how to go about getting.

These are:

  • Reward based crowdfunding;
  • Equity based crowdfunding;
  • Debt based crowdfunding, and
  • Donation based crowdfunding.

Landlords wary of tax changes (Money International), Rated: A

Half of the 200 landlords approached agreed tax changes and tougher mortgage borrowing criteria have thwarted their plans to buy more properties, while 15% admitted they had been put off buying homes to rent.

A third who still wanted to invest are considering a switch from buy to let to peer-to-peer lending secured against property, while 8% have already done so.

China

PPDAI Stock Soars 7% on Increase in Institutionally-Funded Loans (Capital Watch), Rated: AAA

The stock in PPDAI Group Inc (NYSE: PPDF) closed 7% higher on Wednesday, at $2.83 per American depositary share, after it announced a positive trend in funding of loans by its institutional partners and increased loan origination volume.

For the third quarter, the Shanghai-based company, which operates an online consumer finance marketplace, said in a statement on Wednesday that the volume of loans facilitated by its institutional funding partners jumped to $2.64 billion, up 91% from the second quarter. Total loan origination volume was above PPDAI’s guidance, it said, as it reached $3.51 billion, up 14% from the previous quarter.

European Union

What we learned at this year’s LendIt Fintech Europe (Business Insider), Rated: AAA

At the conference, Business Insider Intelligence identified four emerging themes that we expect to set the tone for the space for the next year: further proliferation of partnerships between banks and fintechs, increased focus on digital banks’ sustainability, accelerated innovation and disruption from small- and medium-sized business (SMB) lenders, and more challenges ahead for the UK’s P2P lenders.

  • CYBG bank and price comparison site GoCompare recently partnered to offer an energy compare and switch service for all of CYBG’s B customers.
  • Barclays bank partnered with SMB finance fintech MarketInvoice last year to give Barclays’ SMB clients access to MarkeInvoice’s solutions. 
  • French Banking-as-a-Service platform Treezor was acquired by Société Générale last year, as the bank looked to enhance its ability to innovate and decrease time to market.
Source: Business Insider

Linked Finance launches ‘Beyond Brexit’ business loans (Bridging and Commercial), Rated: A

The new 18-month loan period will allow borrowers to access working capital facilities of up to €300,000 (approximately £265,194) in just 24 hours.

ID on track to double revenues as it eyes €300m+ of revenue within 2 years (Fintech Finance), Rated: A

ID Finance, the fintech operating in Europe and Latin America, saw revenue growth of over 100% in the first 9 months of 2019 and is on track to double its revenues to €90m revenue this year. The data science, credit scoring and digital finance company is now planning its first equity crowdfunding round via Crowdcube as it targets €300m+ of revenue within 2 years.

Binance Launches New Lending Program Phase (CoinCodex), Rated: A

The Binance cryptocurrency exchange has launched the latest phase of its relatively new lending program. For the program’s eighth installment, Binance is sticking with the model of short-term loans, as users only have to commit their crypto for 14 days.

International

A Guide to What’s Happening in the Fintech Revolution (Bloomberg), Rated: AAA

These underbanked markets, led by countries in Asia and Africa, have inspired fintech innovation that’s leapfrogging the technology available in the developed world. Ant Financial Services Group’s Alipay and Tencent Holdings’ WeChat Pay in China, Paytm in India, and Safaricom’s M-Pesa in Kenya are some well-known examples.

Source: Bloomberg

Take Facebook Inc.’s plan to launch a digital currency called Libra in 2020. The social network’s gigantic reach—more than 2.4 billion active monthly users—could draw a much wider audience to Libra than has used previous cryptocurrencies. For instance, global remittances by migrants reached a record $689 billion last year, according to the World Bank.

Source: Bloomberg

San Francisco-based 500 Startups staked 43 such companies in the 12 months ended June 30.

Goldman’s $ 1.3B Marcus burn, Neobank £200MM loss; plus 14 short takes on top developments (Lex), Rated: AAA

Goldman is losing $1.3 billion on Marcus, trying to build a Fintech leader. Etrade is going to lose $75 million from cutting trading fees to $0 to keep up with Robinhood. Revolut is losing £35 million on £60 million in revenue, with another £140 million burned by Atom, Monzo, Tandem, and the rest.

Source FT Research and Future of Finance

Generally speaking, from a deposit point of view, these are still all small businesses at £1 billion in assets (e.g., Betterment manages $20 billion).

Source: ARK Invest and Future of Finance

The first is that the Robinhoods and Monzos of the world are 10x overpriced relative to the payments apps. I can sort of buy this — though money in motion is way easier to capture than money at rest. The second is that venture investors think a finance user is worth $1,500 in a digital bank.

Source: Future of Finance

Blockchain: the future of finance (Financier Worldwide), Rated: A

Recent examples of blockchain’s impact on financial markets go well beyond these initial applications or P2P lending or crowdfunding.

The first wave of applications in finance and banking is being driven by easily achievable gains in actively traded assets.

MasterCard incorporated a blockchain payment system providing vendors real time, lower cost settlements on cross-border transactions. Representing a consortium of more than 40 of the world’s largest banks, fintech firm R3 launched a payment system built on DLT platform Corda, to expedite intra-bank transfers.

St. Regis Aspen, a Colorado resort, is a partnership formed with a crowdfunding site, Indiegogo, that in lieu of a traditional IPO completed a private placement via DLT financing real estate. This sale of ‘tokens’ – fractional interests in the underlying property – raised $18m, compliant with securities laws.

Australia

Hot home loan rates starting with a 2 (mozo), Rated: AAA

The RBA has cut official interest rates for the third time this year, and already a handful of lenders have responded by slashing rates across their range of variable rate home loans. Right now, if your home loan doesn’t have a ‘2’ in front of it, you’re missing out.

loans.com.au jumps on October RBA home loan rate cut party (mozo), Rated: AAA

The online lender has announced its response to the 0.25% drop in the official cash rate though, with loans.com.au taking 0.15% off a number of variable rate home loan offers for both owner occupiers and investors.

The changes, which come into effect on October 17, will have an impact on a number of  loans.com.au home loan offers including:

• Essentials Variable loan – reduced by 0.15% with rates now as low as 3.04% (3.06% comparison rate*).

• Smart Home Loan – reduced by 0.15% with rates now as low as 2.88% (2.90% comparison rate*).

• ZIP Home Loan – reduced by 0.15% with rates now as low as 3.08% (3.10% comparison rate*).

• Offset Variable loan – reduced by 0.15% with rates now as low as 3.12% (3.14% comparison rate*).

OnDeck appoints Robbie Fidler as new national broker chief (IT Wire), Rated: B

Online SME lender OnDeck Australia has appointed experienced commercial lending operator Robbie Fidler as its national broker channel manager.

Asia

SPV 2030: Sharing of risks and reward (The Malaysian Reserve), Rated: A

The growth and success of peer-to-peer (P2P) lending is a testament of the viability of risk-sharing contracts, where the investors take on some risks (for higher return) from the ventures they are financing. This way, finance will be grounded in the real economy, which is another core principle of Islamic finance.

MENA

Beehive funds first SME in Bahrain (Arabian Business), Rated: AAA

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

Canada

BFS Capital Opens New Data Science and Engineering Hub in Toronto (Financial Post), Rated: B

BFS Capital, a leader in small business lending, has officially launched a data science and engineering hub in Toronto as the company accelerates its plans to develop best-in-class digital financial products for small businesses across the globe.

Authors:

George Popescu
Allen Taylor

The post Thursday October 10 2019, Weekly News Digest appeared first on Lending Times.

Thursday August 29 2019, Weekly News Digest

VC-backed fintech

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

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

VC-backed fintech

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

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

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

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

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

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

2019-P2

Class

Preliminary Rating

Initial Class Principal

A

A+ (sf)

$200,700,000

B

A- (sf)

$37,900,000

C

BB (sf)

$49,200,000

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

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

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

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

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

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

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

Key findings

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Business Insider

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

Source: Business Insider

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

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

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

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

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

Know Your Money data revealed that:

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

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

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

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

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

European Union

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

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

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

Source: Business Insider

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

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

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

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

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

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

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

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

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

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

International

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

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

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

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

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

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

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

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

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

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

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

Australia/New Zealand

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

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

2019 Finder Awards winners (Finder), Rated: AAA

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

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

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

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

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

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

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

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

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

Source: Business Insider

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

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

Canada

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

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

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

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

Authors:

George Popescu
Allen Taylor

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

Friday July 5 2019, Weekly News Digest

Friday July 5 2019, Weekly News Digest

News Comments Today’s main news: Kabbage secures $200M. Funding Circle plummets 20%. Zopa to raise 200M GBP pre-IPO. RateSetter Isa attracts over 250M GBP in subscriptions. OakNorth doubles staff. Funding Societies tied up in SME financing. Today’s main analysis: Recession talk, global easing, and SoFi rated pass-thru innovation. Today’s thought-provoking articles: 10 years of marketplace […]

The post Friday July 5 2019, Weekly News Digest appeared first on Lending Times.

Friday July 5 2019, Weekly News Digest

News Comments

United States

United Kingdom

International

Southeast Asia

Other

News Summary

United States

Kabbage secures 0M to fuel its AI-based loans platform for small businesses (Tech Crunch) Rated: AAA

Kabbage, the AI-based small business loans platform backed by SoftBank and others, is adding more firepower to its lending machine: the Atlanta-based startup has secured an additional $200 million in the form of a revolving credit facility from an unnamed subsidiary of a large life insurance company, managed and administered by 20 Gates Management, and Atalaya Capital Management.

The money comes on the heels of a $700 million securitization Kabbage secured just three months ago and it is notable not just for its size but its terms: it’s a four-year facility, a length of time that underscores a level of confidence in the company’s performance.

Recession Talk and Global Easing; SoFi Rated Pass-Thru Innovation (PeerIQ), Rated: AAA

In FinTech financing news, Ocrolus, led by CEO Sam Bobley, successfully raised $24 million in their Series B led by Oak HC/FT.

Source: PeerIQ, Goldman Sachs

SoFi Pass Thru Security

SoFi this week secured a provisional A-rating from DBRS on a $200 MM pass-thru security consisting of student refi loans [ PSR and announcement ]. Notably, the structure is the first CUSIP that does not rely on over-collateralization or subordination to provide credit enhancement for investors. This is a promising innovation from the first FinTech to crack open the securitization market for student refi loans.

Ten Years of Investing in Marketplace Lending (Lending Academy) Rated: AAA

This month marks ten years since I made my first investment in what was then called peer to peer lending.

Ten Ways Marketplace Lending Has Changed Since 2009

  1. Scale
  2. The Rise of Institutional Investors
  3. The Rise of Automation

Home Affordability in the “13 Original Colonies” (DS News) Rated: A

To celebrate the Fourth of July, LendingTree, the nation’s largest online loan marketplace, has taken a look at the states that were present at the birth of the country,” said LendingTree Chief Economist Tendayi Kapfidze.

New Hampshire is the most affordable of the original 13 states, with a median home value of $244,900 and a median salary of $71,305. New Hampshire capital Concord is also the most affordable capital, with a median home value of $212,600, and a median salary of $61,310.

The least affordable state is New York, with a median home value of $293,000, which is less than Massachuset’s median value of $352,600, but New York’s median income is slightly less, at $62,765, plus an affordability surplus of just $292.

Embracing The Digital Lending Revolution (Monja Blog) Rated: A

A recent report by McKinsey & Company pointed out that in the traditional lending process of most banks, the “time to decision” for small business loans is usually from three to five weeks, while the “time to cash” can take up to three months. Personal loans usually have shorter processing times but still, take days or even weeks.

Digital lending helps banks retain individual and business customers by making the process more convenient and faster. According to an extensive survey by the American Bankers Association in 2018, an overwhelming majority of banks agree that some level of digitalization is vital to keeping their loan customers from going elsewhere.

Funds raised for direct lending hit a fresh high this year, raising concerns the market could be running a little hot amid the deluge.

Capital One keeps closing branches, even as rivals open them (American Banker) Rated: A

The McLean, Va., company, with roughly $373 billion of assets, has shuttered more than half of its branches over the past decade, including nearly 50 in the second quarter alone, according to a recent analysis by Sandler O’Neill & Partners. It now has fewer than 500 branches in eight states and the District of Columbia.

Policing The Internet Is Critical To Protecting Online Lending Consumers (Forbes) Rated: A

In May, the United States Federal Reserve issued its “

How Two College Dropouts Made $ 860 Million by the Time They Were 23 (Fortune) Rated: A

They are the founders and top executives of Brex Inc. a fintech startup recently valued at $2.6 billion, with an unlikely origin story.

Brex, which launched its first product last year, has become a fintech darling, catapulting its founders into the ranks of the richest entrepreneurs — on paper at least. Today their stakes in the company are worth an estimated $430 million each, according to an analysis by EquityZen, a marketplace for shares of tech firms that haven’t yet gone public.

A ‘turtle bank’ plays catch-up in small-business lending (American Banker) Rated: B

Provident Financial in Iselin, N.J., has partnered with a fintech to become a stronger small-business lender.

The $9.8 billion-asset company is working with Fundation to offer unsecured small-dollar loans to commercial clients. While available in Provident’s more than 80 branches, applications for loans as big as $250,000 are also being accepted online.

United Kingdom

Funding Circle shocks the City, plummeting 20% after slashing growth forecasts thanks to Brexit (Evening Standard) Rated: AAA

The FTSE 250 company now expects 20% revenue growth this year, half its previous guidance of 40%, amid slumping demand for loans from small businesses.

The latest miserable update sent its shares down 20%, or 34p, to 129.6p and piles more pain on investors after a torrid nine months on the stock market. Since going public the shares have fallen 70% amid wider concerns about the peer-to-peer lending model.

Funding Circle bins the boasts as Brexit bites (Brinkwire) Rated: A

As if to show what’s possible, the online lending platform had itself valued at a remarkable £1.5bn in the flotation last year. Investors were invited to ignore current losses and feel the growth in revenues – up 55% to £142m in 2018, it turned out.

Few businesses, even fintech operators with smart kit and a big marketing budget, can sustain that pace, but Funding Circle still reckoned 40% was on the cards this year.

Companies & Markets show: Fintech’s big bang (Investors Chronicle) Rated: A

Digital editor Graeme Davies in discussion with James Norrington and Alex Newman on the latest problems for Funding Circle, Jupiter’s fund manager departure and the massive opportunities in the fin tech space both now and in the future.

Is Funding Circle the barometer for SME opinions on Brexit? (Daily Fintech) Rated: AAA

Loans under management on the platform are up 37% for the first half of 2019 compared to the same period in 2018, currently sitting at £3.5 billion. Originations are up 14% on the prior corresponding period, at £1.2 billion. All healthy figures in their own right.

separate study by academics at St Andrew’s University found that in 2016, 25% of businesses viewed Brexit as a major obstacle to their success. This number had jumped from 16% in the year prior, when they were surveyed right after the referendum.

Zopa plans £200m fundraise ahead of bank launch and IPO (P2P Finance) Rated: AAA

ZOPA is reportedly looking to raise up to £200m as it gears up for its bank launch and a possible stockmarket flotation.

The peer-to-peer consumer lender is in talks with private equity firms and sovereign wealth funds about the fresh funding, which could be secured in the next few months, chief executive Jaidev Janardana (pictured) told Bloomberg.

RateSetter’s Isa attracts more than £250m in subscriptions (Bridging & Commercial) Rated: AAA

RateSetter has revealed that its Isa has attracted over £250m in subscriptions by the end of June.

The P2P lender’s RateSetter Isa — which was launched in February 2018 — received £50m of Isa inflows in the last three months alone.

More than 600,000 customers have used RateSetter to invest or borrow and it has originated £3.3bn of loans, which has generated over £135m in returns for investors to date.

FINTECH UNICORN OAKNORTH DOUBLES STAFF (Business Cloud) Rated: AAA

Challenger bank OakNorth has doubled its staff after securing more than $1 billion in funding.

The London-based unicorn has also signed a five-year deal to provide its technology platform, OakNorth Analytical Intelligence, to Dutch lender NIBC Bank.

With a valuation of $2.8bn, it has rapidly grown to become one of Europe’s most valuable companies, having raised more than $1bn, a record for a European FinTech, from the likes of Japan’s SoftBank Group.

Moneybox launches ISA partnership with OakNorth Bank (AltFi News) Rated: A

OakNorth’s growing role as the go-to ISA partner to the digital disruptors of UK fintech has been further cemented. The bank, which was briefly Europe’s most valuable fintech earlier this year, has today joined forces with Moneybox to offer the latter’s 200k-strong, and growing, user base a Cash Lifetime ISA.

The Moneybox Cash Lifetime ISA, with an interest rate of 1.4 per cent, is designed to help customers who are saving for their first home with its government-backed 25 per cent bonus up to £1,000 per year. Users can open an account with £1.

Nutmeg is another fintech offering the Lifetime ISA while, Skipton – the UK’s fourth largest building society – says it has had over 130,000 accounts opened to date.

OakNorth also powered tax-wrapped savings accounts for Monzo’s c.2m customers in March, although they were not Lifetime ISAs. OakNorth reported a 220 per cent increase in profits last year to £33.9m.

FIBA to publish default rates of lenders (Bridging & Commercial) Rated: A

Adam Tyler, executive chairman at FIBA, said the move followed concerns about the transparency of default rates in the industry, which was raised by members and lender partners.

Mark Posniak, managing director at Octane Capital, initiated the conversation about default interest last week via LinkedIn.

Growth Street rockets past £500m of matched loans (Business Love London) Rated: A

Growth Street, which is reinventing the business overdraft, has hit a big milestones in June. It has now matched over £500m worth of investor funds on its platform since launch in 2014.

LendingCrowd partners with Brismo for verified returns data (Fintech Finance) Rated: A

LendingCrowd, Scotland’s only fintech lending platform, has today announced that it is the latest leading marketplace to partner with Brismo to provide sophisticated and independently verified performance metrics for investors.

Brismo is a London-based provider of lending performance data that uses detailed loan information to analyse and verify returns, allowing investors to perform like-for-like analysis.

Purplebricks $ 5m US retreat shows startups need to slow down (Sifted) Rated: A

Britain’s online estate agent Purplebricks this week said it would pull out of the US to focus on its hometurf.

The peer-to-peer industry isn’t doing enough to protect investors (City AM) Rated: A

Many peer-to-peer lenders target unsophisticated retail investors, who can invest as little as £100. And yet, there is a relatively high cost to on-board small investors, because platforms have to handle customer calls, and anti-money laundering requirements.

There have been dozens of failures, but the closure of Lendy has shocked the industry. The high-profile peer-to-peer lender accrued more than £160m on its loan book, and by the time the administrators were called, £90m was believed to be in default.

Lendingblock partners with institutional crypto platform Caspian (Institutional Asset Manager), Rated: B

Lendingblock, a regulated, open exchange for institutional borrowing and lending of digital assets, has partnered with Caspian, the institutional crypto trading platform. 

This partnership enables essential market infrastructure for borrowing and lending digital assets to be scaled to institutions globally.

China

Breakneck growth in China’s credit-card debt since 2012 raises worries about a potential bust (South China Morning Post) Rated: AAA

Credit-card debt has grown more than sixfold in China since 2012, mirroring booms in other Asian markets that ended badly and raising concerns about the potential risks to Chinese banks, according to a new report from S&P Global Ratings.

The credit rating agency said that unsecured consumer lending in the mainland is expected to increase at a rate of 20 per cent annually for the next two years, a slight slowdown, but reminiscent of problematic booms in Hong Kong, South Korea and Taiwan.

Source: South China Morning Post

It is rash to expect a rerun of past stock market booms in China (Financial Times) Rated: A

One way to profit from Chinese equities is to play a familiar paradox. Market participants know that when economic growth ebbs significantly, Shanghai share prices tend to rally.

The key to this incongruity might be called the “Communist party put”. In the same way that Alan Greenspan, former chairman of the US Federal Reserve, used to relax US monetary policy when dynamism stalled, a tactic known as the “Greenspan put”, China’s ruling party often steps in when commerce starts to wilt.

Regulators curb market irregularities (Ecna) Rated: A

China has spared no efforts to carry out supply-side reform and fight against financial market irregularities by better regulating high-risk institutions to make overall risk manageable, officials of the China Banking and Insurance Regulatory Commission said on Thursday.

In the past two years, China reduced high-risk assets worth 13.74 trillion yuan ($2 trillion), restraining the flow of resources from the real economy — the part of the economy that produces goods and services — to the virtual economy, said Zhou Liang, vice-chairman of the CBIRC, at a news conference.

European Union

Fintech Lender creditshelf Doubles Loan Volume in First Half of 2019 (Crowdfund Insider) Rated: AAA

creditshelf Aktiengesellschaft, a Germany based online lender, says it lending volume has more than doubled in volume during the first 6 months of 2019. In comparing the first half of 2019 versus the first six months of 2018,  creditshelf reports that the volume of arranged loans was  € 35.8 million or 132 % higher year-on-year (prior at € 15.4 million).

June 2019 was the strongest month in creditshelf’s history with arranged loans of € 12.2 million.

The company says the pipeline for the second half of the year is well filled.

PropertyBridges attracts first tranche of peer-to-peer loans for Limerick housing project in record time (Irish Examiner) Rated: A

A project to develop 16 houses in Pallaskenry, Co Limerick, is well on track to raise the €2.4m in funding that it pitched out to peer-to-peer investors just a few weeks ago, having very quickly raised the first tranche of €665,000.

PropertyBridges.com, who are leading the financial management of the project, will raise the remainder in three further tranches when the development progresses over the next 12 months.

International

International P2P Lending Volumes June 2019 (P2P Banking) Rated: AAA

Arboribus is listed for the last time, as the platform will cease to originate new loans.

Generic Looks to Launch Tokenized Peer to Peer Lending Platform (Crowdfund Insider) Rated: A

Blockchain startup Generic wants to create a tokenized bridge for peer to peer lending/merchant cash advanced credit, according to a note from the company. While not live yet, Generic claims it will “create a direct bridge between users and companies looking for funds, without an intermediary.”

FinTech is ‘new normal’ as majority are regular users (FS Tech) Rated: B

A global survey of 883 consumers from the UK, Europe, Asia, Africa, Latin America and Australasia, by financial advisory company deVere Group found that 55 per cent were using FinTech services online or via mobile on a regular basis to access and manage their money.

Australia

Loans.com.au passes on the full rate cut, now offers mortgage rates as low as 3.03% (Mozo) Rated: AAA

This afternoon, however, loans.com.au will be bucking the trend. The online lender announced it will be passing on the cut in full to its variable home loan customers, effective immediately.

The changes will apply to both new and existing customers, and will see owner occupiers looking at rates as low as 3.03% (3.05% p.a. comparison rate*) – among the more impressive on the market. Below, we’ve compiled some stellar loans.com.au home loans for you to check out.

India

Expectations of the Fintech Industry From the Union Budget of 2019 (Entrepreneur) Rated: AAA

The online lending industry has emerged as a massive relief for both individuals and small businesses that have historically been facing a lack of funds and were rendered underserved by traditional financial institutions. But for the digital model to truly thrive, fintech lenders need to have ready access to the credit guarantee schemes being initiated by the government to build a supportive financial structure. For instance, recent government initiatives like that of SIDBI wherein loans can be provided in under an hour, or its subsidiary MUDRA have only been supporting banks, NBFCs, and micro-finance institutions. But their penetration levels are relatively low, because of which a substantial portion of these funds remain unutilized. Therefore, the fintech industry expects the government to extend credit and allow the players to participate in these recent initiatives and other measures being undertaken.

‘P2P model is a solution for many small businesses’ (Deccan Herald) Rated: A

P2P model is a solution for many small businesses that are struggling for funds. Digital lending has changed the face of many developing countries’ economies because of the transparent environment and paperless approvals.

So, from the perspective of Peer-to-Peer (P2P) industry in India, it has tremendous opportunities because this industry is still at a nascent stage and requires encouragement through tax benefits.

Canada

BMO LAUNCHES DIGITAL-ONLY LINE OF CREDIT SERVICE (Betakit) Rated: AAA

Bank of Montreal is launching a new digital-only lending solution, allowing customers to apply for a personal line of credit directly from their mobile devices.

Through the new solution, BMO said customers can apply for credit by taking a short application, receiving a decision on their loan within minutes. Customers will get a real-time decision on their application, as well as faster access to credit, allowing them to tap into their loans within 48 hours of approval.

Asia

Funding Societies in SME Financing Tie-Up (Finews) Rated: AAA

Funding Societies has entered into a partnership with Lazada Malaysia to offers merchants on the e-commerce marketplace short-term financing, Malaysian newspaper «The Star» reported on Thursday.

As part of the tie-up, the peer-to-peer lending platform will leverage alternative data from Lazada as part of its risk assessment, which will provide more opportunities for online businesses to get tailor-made financing products conveniently, the firm said in a joint press statement.

Helios P2P Sri Lanka’s First Peer-To-Peer Lending Platform Secures Second Round Funding (Daily Mirror) Rated: A

Helios P2P – Sri Lanka’s First Peer-To-Peer Lending Platform secured their second round of funding from John Keells X which is the corporate accelerator of John Keells Holdings PLC. Helios P2P were winners of the 2017 John Keells X accelerator programme and the first startup to receive funding for the second stage of the accelerator.

The peer-to –peer lending industry, valued globally at $64 billion in 2015, is growing at a compound annual growth rate of approximately 50%.

Budget Expectations 2019: P2P lending hopes for these policy changes (Banking & Finance) Rated: A

So what will it be – fiscal consolidation or a focus on growth? Getting the balance right is the key here. The top priority according to Abhishek Gandhi, Co-Founder & CFO, RupeeCircle from this budget is to tackle consumption slowdown and boost it by cutting taxes which will increase the spending power of the people, especially in rural areas and the lower income groups. The subliminal effect of this step will boost investments as well. This will especially be a shot in the arm for the Peer-to-peer (P2P) the lending landscape which has been affected by the sluggish pace of policy changes in the past several months (understandably due to the impending general elections of 2019).

Visa Indonesia opens applications for fintech innovation competition (Jakarta Post) Rated: B

Visa Indonesia, a subsidiary of California-based payment systems provider Visa, opened on Wednesday applications for its Visa Everywhere Initiative competition, which is designed to crowdsource financial inclusion solutions from local financial technology (fintech) start-ups.

Authors:

George Popescu
Allen Taylor

The post Friday July 5 2019, Weekly News Digest appeared first on Lending Times.

Tuesday June 5 2018, Daily News Digest

Delinquency and cumulative loss on 60 month loans

News Comments Today’s main news: Revolut to seek U.S. banking license. SoFi former venture head to raise $150M fintech fund. BBVA invests 85.4M GBP in Atom Bank. China Rapid Finance receives SO27001 certification. Lendix raises $37M. Today’s main analysis: U.S. economic outlook, according to TransUnion. Today’s thought-provoking articles: Millennials are set to be next wave of single family rental […]

Delinquency and cumulative loss on 60 month loans

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

British fintech startup Revolut to seek U.S. banking license (Reuters) Rated: AAA

British financial technology startup Revolut plans to apply for a banking license in the United States, Chief Executive Officer Nikolay Storonsky said on Monday.

The company, launched in 2015, could apply by the end of the year in California, Storonsky told Reuters in an interview at the sidelines of a fintech conference in Amsterdam.

Debate on Consumer Credit Health, TransUnion Summit (Peer IQ) Rated: AAA

Source: Peer IQ

US Economic Outlook from TransUnion Financial Services Summit 2018

  1. Short-run GDP growth rate will be around 3%, driven by consumer spending and stimulus from the tax reform act. However, over the long-term, GDP growth will be hampered as the economy’s resources are approaching full employment, low trend productivity growth, and fading (and reversing stimulus) effects of tax reform.
    Source: Peer IQ
  2. Long-range inflation expectation is ~2% which would put a natural ceiling on the neutral Federal Funds Rate and the number of Fed hikes.
  3. As the Fed raises rates and tapers the reinvestment of its balance sheet, the 1-5 year part of the treasury curve will be most affected, as that’s where the majority of the Fed’s holdings lie. This should lead to a flatter yield curve and put pressure on refinancing of corporate debt, most of which is benchmarked to the less than 5-year part of the yield curve. Rising rates will also cause the debt-laden US consumer to slow down spending as a larger portion of income goes towards debt service.
  4. Tight lending standards and economic strength have brought down the delinquency rates in all asset classes except auto loans. Delinquencies in auto loans have picked up recently to 4.3%, with subprime auto doing worse.
    Source: Peer IQ
  5. US GDP growth has been aided by strong tailwinds in the form of stimulus from tax reform, low interest rates, and strong credit growth. As interest rates rise and consumer credit growth slows, investors need to keep an eye on economic fundamentals before making investment decisions.

SoFi’s Ex-Venture Head to Raise $ 150 Million Fintech Fund (Bloomberg) Rated: AAA

Social Finance Inc.’s former head of ventures and corporate development, Logan Allin, is raising a $150 million fund to invest in early stage financial technology firms in the U.S. and abroad, including Asia, Europe and Israel, according to people familiar with the matter.

Fin Venture Capital plans to invest in companies that will spin out of top fintech firms, like SoFi, Affirm Inc. and Stripe Inc. and sectors like real-estate technology, insurance technology and alternative lending. The venture firm will also look for corporate blockchain applications, but not investments in cryptocurrencies, the people said.

How student loan companies pretend to be your friend (The Guardian) Rated: A

This month, banking company Laurel Road announced that if you refinance your student loan with them, they will give you a year’s membership to MoviePass, the movie theater subscription service.

The partnership shines a light on the growing market for private student loans. Private lenders currently hold less than 10% of the $1.4tn in outstanding student loan debt but have been aggressively lobbying for legislation that would loosen the government’s monopoly.

Social Finance Inc (SoFi), one of the most high-profile private financial startups in the US, has led the charge in this regard.

Education Loan Finance Launches $ 50,000 Contest to Pay Off Student Loans (Digital Journal) Rated: A

Education Loan Finance (ELFI), a division of SouthEast Bank, focusing on student loan debt refinancing and consolidation, announces the launch of a video contest where the winner will receive a $50,000 cash prize towards their student loan debt.

According to the Brookings Institute, more than 44 million Americans have student loans that total nearly $1.4 trillion. Student loan debt is now the second-largest source of household debt in the U.S. after home mortgages.

Eloan Personal Loans Review: Fast Loans in As Little As a Day (Student Loan Hero) Rated: A

According to TransUnion, fintechs, or online lenders that use financial technology to streamline the lending process, originated 32% of personal loans in the first six months of 2017.

The rates on your loan will depend on your creditworthiness, as well as your loan amount and repayment terms. Here are the ranges you can expect depending on your credit score:

  • Excellent: 5.49% to 10.49%
  • Very good: 10.49% to 13.49%
  • Good: 13.49% to 16.49%
  • Pretty good: 16.49% to 19.49%
  • Fair: 19.49% to 35.99%

Eloan looks beyond your credit score

Your credit score isn’t the only factor at play when Eloan reviews your application. The lender also looks at your debt-to-income ratio, length of credit, and debt repayment history before making a final decision.

Tom Burnside of LendingPoint (Lend Academy) Rated: A

In this podcast you will learn:

  • Tom’s background building databases and credit systems.
  • The founding story of LendingPoint.
  • The loans terms that LendingPoint offers for their loans.
  • The kinds of data they use for underwriting.
  • How they are using technology to run their underwriting and elsewhere in their business.
  • What was behind their decision to acquire LoanHero, the point of sale platform.
  • How they have integrated LoanHero into their company.
  • How they closed the additional $600m credit facility from Guggenheim.
  • Tom’s thoughts on what we are doing well and what are we doing poorly as an industry.
  • What they are working on at LendingPoint for the future.

Fintech startup SpotOn almost tripling staff this year as it squares off against Square (San Francisco Business Times) Rated: A

SpotOn, which started the year with 150 employees, now has a workforce of about 250 people, working at the company’s Financial District headquarters or in a Chicago office. SpotOn said it expects to have 400 employees by year-end.

SpotOn offers credit card processing services and a range of other services to small and mid-sized merchants, pitting the upstart against Square (NYSE: SQ).

Retail Banking Company Chime Raises $ 70M in Series C Funding (Finsmes) Rated: A

Chime, a San Francisco, CA-based retail banking company, raised $70m in Series C funding.

The round, which has valued the company at about $500m, was led by Menlo Ventures, with participation from Forerunner Ventures, Aspect Ventures, Cathay Innovation, Northwestern Mutual, Crosslink Capital, and Omidyar Network.

Fifth Third adds new fintech partner to enhance service for corporate clients (American Banker) Rated: B

Fifth Third has struck a strategic partnership with Intellect Global Transaction Banking, a unit of Intellect Design Arena that has its U.S. headquarters in New Jersey.

Why Millennials Are Poised To Be The Next Wave Of Single Family Rental Investors (Forbes) Rated: AAA

While it may be a surprise given the stereotypes surrounding the millennial generation, research from the National Association of Realtors found that millennials continue to be the largest group of homebuyers, representing 65% of all first-time homebuyers last year. According to TD Bank, 

TD Ready Challenge launches (Finextra) Rated: B

TD today launched the TD Ready Challenge, an annual North American initiative that has ten $1 million (CDN) grants available to help catalyze innovative solutions for a changing world.

United Kingdom

BBVA Announces Completion of £85.4 Million Investment in UK-Based Atom Bank (Crowdfund Insider) Rated: AAA

On Friday, BBVA announced it has completed the £85.4 million investment into Atom, which was announced in March of this year. According to the firm, With this transaction, it increases its stake in UK’s first bank built exclusively for smartphone or tablet to 39%. Atom also secured capital from some other shareholders, bringing the total capital raised to £149 million.

BBVA added that the new investment will allow Atom to continue its impressive growth, and support the uptake of new clients and build core capabilities.

P2P lenders prepared for new data rules (Peer2Peer Finance) Rated: AAA

PEER-TO-PEER lending platforms have welcomed the new General Data Protection Regulation (GDPR) and confirmed that their processes meet with the new EU standard.

A RateSetter spokesperson told Peer2Peer Finance News that the firm “has implemented a comprehensive cross-departmental project to ensure [we are] compliant with new data protection legislation,” while Landbay chief executive and co-founder John Goodall said that “we view GDPR as an opportunity to further build customer trust and confidence and continue to offer quality information to our customers.”

Light at the end of the tunnel for green energy P2P lenders (Peer2Peer Finance) Rated: A

RENEWABLE energy is in the midst of a “turnaround”, according to Trillion Fund’s chief executive, which could benefit the peer-to-peer lending sector.

Theresa Burton heads up the wound-down green energy P2P platform, which closed to new investment in 2015 after government subsidies for the sector were cut.

P2P lenders show there’s life outside London (Peer2Peer Finance) Rated: A

P2P lenders headquartered around the UK’s regions are demonstrating impressive growth, while helping create employment in other parts of the country.

One example is Manchester-based Assetz Capital, which recently passed the £500m lending milestone.

Meanwhile, Edinburgh-based P2P lender LendingCrowd recorded its best-ever month for completed loan deals in May.

Businesses should mind the scale-up gap (Spear’s) Rated: A

While some £8.27 billion was poured into SMEs last year versus £3.9 billion in 2016, 81 per cent of these deals took place at the seed and start-up stages. Of the 35,210 ‘scale ups’ – defined as companies posting annual growth above 20 per cent (across three years) with turnover between £1-20 million and ten or more employees – a mere 1,505 received investment. Furthermore the number of investment deals has plateaued over the last five years for these firms, at around the 20 per cent of investment.

The report from the Supper Club, an entrepreneurial network and advocacy group, shows that over the last five years the number of SME investment deals has risen from 1,010 in 2013 to 1,500 — a 50 per cent rise. The corresponding increase in the ‘scale up segment, however, was under 20 per cent, with the number of deals going from 260 to 280.

China

China Rapid Finance Receives ISO27001 Certification (PR Newswire) Rated: AAA

 China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE:XRF), operator of one of China’s largest consumer lending marketplaces, today announced that it achieved ISO/IEC 27001:2013 Certification (“ISO 27001”), the international standard that describes best practices for an information security management system (ISMS). Certification to ISO 27001 demonstrates that the company has adopted internationally-recognized standards to ensure borrowers and investors on its marketplace benefit from the highest level of data protection.

China’s debt collectors focus in on $ 200bn P2P debt pile (Financial Times) Rated: A

An estimated Rmb1.3tn in outstanding P2P debt as of May, according to online lending intelligence firm Wdzj.com, and a rising number of defaults have opened the door to a wave of start-ups using new technologies to try to recover tardy loans.

Ziyitong, which has sought to recover Rmb150bn since it was set up in 2016, recently launched an AI platform to help recover delinquent loans for some 600 debt collection agencies, and more than 200 lenders including Alibaba Group and Postal Savings Bank of China, Ms Sheng said.

European Union

Lendix raises $ 37 million for its lending marketplace (Tech Crunch) Rated: AAA

French startup Lendix has raised a new funding round of $37 million (€32 million). With this new influx of cash, the startup has one goal in mind. It wants to become the leading lending marketplace of Continental Europe.

Idinvest and Allianz are leading the round, with CIR SpA (De Benedetti’s holding firm) also participating. Existing investors Partech, CNP Assurances, Decaux Frères Investissements and Matmut are also participating once again.

Next year, Lendix  plans to operate in 7 countries.

BBVA teams up with Fintonic on loan marketplace (Finextra) Rated: A

Today the Spanish Fintech announced at the Money20/20 Europe event that BBVA has signed up to be part of the Fintonic loans platform, that processed the entire loan procedure for amounts of up to 30,000 euros without you having to leave the app, regardless of the institution providing the loan.

In addition to BBVA, other large banks and financial companies such as EVO Finance, Wanna, WiZink or Zaplo have partnered with the Fintonic loan platform. To date, the platform has processed over 7,500 loans for users, with a total volume of over 30 million euros and an average of 3,850 euros per contract.

First nine startups selected for EBAday2018 Fintech Zone (Finextra) Rated: B

Now in its thirteenth year, EBAday, a conference built by bankers for bankers, is expected to attract 1500 banking professionals and 70 exhibitors to the Munich, Germany conference on 12-13 June.

With interest in digital banking and fintech at an all-time high, the EBAday Fintech Zone will provide a dedicated space for innovative startups to network with and demonstrate their products to payment heads from across the European banking industry.

The first nine firms selected for this year’s Fintech Zone touch on many of the critical elements currently driving the digital agenda of banking and payments, from P2P payments to marketplace lending, Open APIs and artificial intelligence.

International

Personetics Accommodates Digital-Only and Challenger Banks (Finovate) Rated: A

Cognitive analytics company Personetics has traditionally served large banks, including six of the top 12 banks in North America and Europe. Today, however, the company launched a new offering that makes its solutions more accessible for smaller digital-only and challenger banks.

  • Pre-built banking content: The offering includes hundreds of pre-built insights, financial tips, and personalized advice that the bank can easily modify and control
  • API-first approach: Personetics uses open APIs to integrate AI functionality into a bank’s digital banking experience and allows banks to create their own brand identity and customer engagement strategy.
  • Editing tools: These tools allow the bank to retain control over the content and develop new capabilities to support its own business goals.
  • Fast time-to-market: Personetics delivers a production-level solution in just three months.
Australia

Online lenders challenging the big banks (Rate City) Rated: AAA

As the RBA leaves the cash rate on hold, new research has revealed the average home loan customer could save $82K by switching from a big four bank, to a low rate online lender.

New calculations show a family with a $350K loan looking for a fully-featured mortgage, could save up to $82,118 over the life of their loan, by going with the lowest comparable online lender, instead of a major bank.

Online lenders facts

  • Around 30% of lenders in the RateCity database are online.
  • Australia’s fifth largest home loan lender is online only (ING).
  • Nine of the 10 lowest rate lenders in our database are online lenders.

5 killer EOFY home loan deals (Mozo) Rated: A

loans.com.au Essentials Variable 80

  • 3.64% variable rate (3.66% comparison rate*)
  • No application or annual fees
  • Free extra repayments and redraw facility

Looking for a no fuss mortgage option offering up superb value? Look no further than the  Essentials Variable home loan from popular Aussie online lender loans.com.au. With a super low rate, no upfront or ongoing fees and the option to choose weekly, fortnightly or monthly repayments, this loan is easy on the hip pocket. You can also opt to split your loan between fixed and variable rates to find the perfect balance between certainty and flexibility.

India

CoinTribe, a MSME Lending Marketplace, Raises $ 10M from Sabre Partners and Existing Investors (Disrupt) Rated: AAA

CoinTribe, Gurugram headquartered credit based lending marketplace for MSMEs, has raised over $10 million equity capital in Series-B round led by Sabre Partners along with participation from existing investor, Puneet Dalmia.

With this round of funding, total equity capital raised by CoinTribe has increased to over $15 million. CoinTribe plans to use this additional capital to further enhance capabilities of its proprietary online credit algorithm, expand to new markets and further develop technology to enable faster and nimble product and credit model innovation.

Asia

How can new crowdfunder GlobalSadaqah improve transparency, impact of Islamic social finance? (Salaam Gateway) Rated: A

Umar and Ethis Ventures are behind Ethis Crowd, the world’s first Islamic real estate crowdfunding platform that raises funds for social housing development projects in Indonesia. These projects are backed by the Indonesian government. Ethis Crowd began with retail crowdfunding and moved into the institutional space when it started working with Islamic banks and large investors.

Ethis is also behind Kapital Boost, which crowdfunds financing for small and medium-sized enterprises.

In Southeast Asia, The Fintech Era Is Just Starting (Thailand Business News) Rated: A

In Indonesia, for example, Go-Pay and a number of other apps target the 51 percent of folks without bank accounts by providing cash transfers. Meanwhile, a bank called Mandiri allows people to avoid having a bank account entirely, instead letting them link their e-wallet to a mobile phone number. The wallet is topped up at kiosks and stores around the country. You can even withdraw money from your e-wallet via a Mandiri ATM.

For Indonesia’s Investree, it works like this: a small business is waiting to be paid by a client, but that won’t happen until the end of the month. So Investree lenders immediately pay the business owner the invoice amount.

Latin America

Brazil online lender Agibank says IPO may raise around 2.5 bln reais -filing (Reuters) Rated: AAA

Brazil’s online lender Banco Agibank SA set on Monday the price range for its initial public offering between 13.87 reais ($3.70) and 16.96 reais per share, according to a securities filing.

Agibank’s shareholders and the bank may raise around 2.5 billion reais in the offering, considering the mid-point of the price range, 15.41 reais. The pricing is scheduled for June 21. ($1 = 3.7447 reais) (Reporting by Carolina Mandl; Editing by David Gregorio)

Authors:

George Popescu
Allen Taylor

Tuesday February 20 2018, Daily News Digest

Loan Charge Rates

News Comments Today’s main news: Cross River Bank, PeerIQ partner on loan data.Coinbase to offer crypto payments service to compete with PayPal.Better Mortgage hits $1B in mortgage loan funding.LendingClub updates Truth in Lending Statement.Zopa to launch a credit card.Funding Circle plans IPO at $2.1B valuation.Prospa ranked #1 among high-growth firms in APAC. Today’s main analysis: […]

Loan Charge Rates

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

APAC

Other

News Summary

United States

Fintech-friendly Cross River Bank partners with PeerIQ on loan data (American Banker), Rated: AAA

Cross River Bank in Fort Lee, N.J., has entered into a partnership with PeerIQ, a provider of consumer loan data analytics, in an effort to streamline capital sourcing between online lenders and institutional loan buyers such as small banks.

Coinbase Now Powering Payments in Digital Currency (Crowdfund Insider), Rated: AAA

Coinbase, one of the largest cryptocurrency exchanges in the world, has launched Coinbbase Commerce, a payments platform that allows merchants to accept digital currency anywhere, anytime.

Millennials SME Owners Prefer Online Alternative Lenders to Tradtional Ones (Bank Innovation), Rated: AAA

According to Mercator’s report, Business Banking Services: Keeping Up with Millennial Owners, 27% of total U.S. SMEs have used online alternative lenders (P2P lenders or marketplace lending platforms) in 2017.

Of this number, 48% of millennial owners (aged 18–34), currently have a loan from an alternative lender compared to 25% of SMEs run by owners over 35 years of age. Further, these millennial owners said they are twice as likely to use alternative lenders than their older counterparts.

Source: Bank Innovation

P2P lending soars but SMEs generally wary of finance (P2P Finance News), Rated: A

The 2018 Small Business Finance Markets report, released on Tuesday, found that P2P business lending rose by 51 per cent in 2017. In contrast, bank lending to UK small- and medium-sized enterprises (SMEs) fell to £700m in 2017 from £3bn the previous year.

Despite increased demand for alternative finance, the report found that 70 per cent of smaller businesses would rather forego growth than borrow. The BBB’s analysis found that only 1.7 per cent of small firms sought new loans over the last 10 quarters – a record low since its index began in 2011.

Less than half (43 per cent) of businesses surveyed were confident they would get a loan if they applied, even though most new loan applications (72 per cent) are approved.

Better Mortgage Hits $ 1 Billion Dollars in Mortgage Loans Funded after Launch in January 2016 (BusinessWire), Rated: AAA

Better Mortgage, a digital mortgage company focused on improving access to home financing for a new generation of homeowners, announced that it has funded over $1 billion dollars in mortgage loans to date. Better launched in January 2016, making it the third fastest online lender to reach this $1B milestone — per research published by Lend Academy in July 2017.

The Case for M&A (Why Banks Should Buy Online Lenders) (PeerIQ), Rated: AAA

Tech firms have already demonstrated they can open these markets. The largest money market fund in the world, Ant Financial’s four-year-old Yu’e Bao, was built on a sweep from the AliPay payments product. Intuit can utilize proprietary accounting and tax data to underwrite (and acquire) borrowers in novel ways. Amazon can underwrite small businesses using inventory turnover and reams of customer data.

“Big Tech” firms also have proprietary platforms and channels – in-home (think ‘Alexa’), apps, in-car, and mobile to name a few.  However, in the US – at least for now – Big Tech firms lack a regulatory “swimlane” to compete with banks in lending and payments on a national scale. Their non-bank and commercial status confines their activities to narrow forms of lending, affinity partnerships, and lead generation. Until that impediment is dissolved, “Big Tech” firms need to partner with national banks with unsecured lending capabilities to fully unlock these markets.

Our argument is that banks without an unsecured lending capability risk losing long-term customer relevance. Banks that do not have an unsecured lending business do not have a seat at the table.

Source: PeerIQ

Which Banks are the logical buyers?

Banks that have the following characteristics would make a short-list of likely acquirers:

  • Are active in lending, but have a gap in unsecured consumer loans
  • Banks with asset management or structured products arms that can package loans into new products (e.g., ABS offerings, investment vehicles, etc.). Also, banks that have aspirations to develop a robo-advisor
  • Banks that have a demonstrated history of partnering with FinTechs
Source: PeerIQ, SEC filings, bank corporate websites

We assume underwriting and loan terms similar to those today (e.g. ~700 credit score, 15% coupon, $15k principal, 3 to 5 year term). We assume annual charge-off rates of 5%. We assume a 1.5% deposit funding charge and a leverage ratio of 15%.

We find that a bank can generate 10% NIM, 2 to 3.5% ROA, 15 to 20% marginal-ROE during good times.

Update to Truth in Lending Disclosure Statement (Lending Club), Rated: AAA

As of Friday, February 23, 2018, recent updates made to the Truth in Lending disclosure statement for unsecured consumer loans will take effect. The forthcoming Truth in Lending disclosure statement is available here.

Will LendingClub Turn a Corner in 2018? (Guru Focus), Rated: A

LendingClub has a market cap of about $1.6 billion, which makes it one of the biggest players in the peer-to-peer lending market.

The company’s stock price has plunged nearly 40% over the last four months and this could continue unless the upcoming earnings call changes investor sentiment. LendingClub was valued at about $9 billion in late 2014 but it has dropped to about $1.6 billion.

Source: Guru Focus

Pricey personal loans would be outlawed by bill that would reshape state lending industry (Los Angeles Times), Rated: AAA

A bill introduced Thursday by Assemblyman Ash Kalra (D-San Jose) could dramatically reshape California’s lending industry by capping interest rates at roughly 20% for consumer loans between $2,500 and $10,000. Since rate caps were removed by the Legislature in the 1980s, there’s been no limit to the amount of interest lenders can charge on those loans.

That has led to startling growth in the market. In 2016, more than half of the loans between $2,500 and $5,000 and about 21% of larger loans charged interest rates of 100% or higher. In all, Californians in 2016 — the most recent year for which state data are available — borrowed $1.1 billion at triple-digit interest rates.

But Kalra’s bill would do much more than ban lenders’ priciest offerings. The bill would extend an existing set of rate caps that now apply to loans of less than $2,500 to all loans of up to $10,000. That would cap interest rates at roughly 19% for loans up to $10,000.

Had the caps been in effect in 2016, 98% of loans between $2,500 and $5,000 and 95% of loans up to $10,000 would have been outlawed. Only about $91 million of the $2.7 billion in loans made in those sizes in 2016 had rates below 20%.

BFS Capital Announces New 5 Million Credit Line (BFS Capital Email), Rated: A

BFS Capital, a leading small business financing platform, today announced it is has received a new $175 million revolving credit line provided by funds managed by Ares Management, L.P. BFS Capital will use the new facility to accelerate the growth of its lending business, following a record year where the company generated more than $300 million in originations, a new annual high.

Braviant Holdings Announces $ 7 Million Equity Raise (Braviant Email), Rated: A

Braviant Holdings, a leading fintech startup that uses advanced analytics and proprietary technology to make smarter lending decisions, has raised $5 million common equity from Loom Capital, LLC. Alongside the equity investment, Braviant has entered into an exclusive partnership with a subsidiary of Trend Capital, a tech-enabled digital marketing platform affiliated with Loom.

VPC’s portfolio sales drag on performance (P2P Finance News), Rated: A

VPC Specialty Lending Investments has reported a total net asset value (NAV) return of 3.07 per cent for 2017 – below its target return levels.

PeerStreet Review (Benzinga), Rated: A

In addition, “accredited investors” need only apply. Investors must have a net worth greater than $1 million in liquid assets (meaning the equity in your home doesn’t count) or you need to earn more than $200,000 per year or make $300,000 jointly.

PeerStreet’s minimum investment is $1,000 and account fees range from 0.25% to a 1% setup fee. The investment length ranges from six to 24 months.

Marla Blow of FS Card (Lend Academy), Rated: A

In this podcast you will learn:

  • How Marla’s time at the CFPB indirectly led to the founding of FS Card.
  • Why creating a new credit card company is so complicated and challenging.
  • What their Build card is and who is their target market.
  • How they are able to offer an secured credit card to people that banks reject.
  • The types of data they use to find stable customers in the subprime segment.
  • The typical size of the credit line they provide to these customers.
  • The profile of their target customer and how they are using the credit card.
  • How they are providing financial education to these people.
  • How FS Card is acquiring these credit card customers.
  • The percentage of their customers who have qualified for credit line increases.
  • Why improving credit scores of their customers is a key metric.
  • How they are able to issue these cards through their partner bank.
  • How FS Card makes money.
  • What regulators could be doing to help subprime consumers get more access to responsible credit.
  • What more should fintech companies be doing to help these underserved people.
  • The biggest challenges that FS Card has to overcome to become a large and successful credit card company.

How does real estate investing benefit from technology (Realty Biz), Rated: A

Buying and selling property has already become much more accessible due to technology, and this trend is only going to speed up. While historically, real estate professionals, investors, and landlords have been reluctant to pay for technology, and the data available has been spotty, the tide is turning as more wake up to the opportunities. Investment values are shooting up in many places due in a large part to technological advances, including the ability to market real estate to audiences beyond the immediate community and to close deals securely, quickly, and remotely with investors.

BBVA taps digital start-up Azlo to target US freelance market (Fintech Futures), Rated: A

BBVA has partnered with digital business account provider Azlo to target the freelance market in the US.

According to BBVA, by 2020 in the US alone, 43% of workers will be employed in freelance capacities – a trend that is expected to continue to grow.

Goldman Sachs and rivals home in on risky consumer banking (Financial Times), Rated: A

Lloyd Blankfein was a breezy opening act at a big industry event this week in Key Biscayne, Florida. On stage at the Ritz-Carlton the chairman and chief executive of Goldman Sachs was talking about Marcus, the bank’s new online savings and lending platform, which is targeting borrowers with scores as low as 660 on the 300-850 Fico scale. Goldman calls such people “creditworthy”; others call them subprime.

Banks Urged to Take On Payday Lenders With Small, Lower-Cost Loans (WRAL), Rated: A

Those who find themselves pinched for cash often turn to high-cost payday lenders. But traditional banks and credit unions could serve that role for borrowers and do it at much lower rates, according to a new proposal from the Pew Charitable Trusts.

B of A’s Moynihan: Big banks are ‘fine’ with Dodd-Frank (American Banker), Rated: A

While small and regional banks are pushing for a rollback of the Dodd-Frank Act, big banks are largely supportive of the 2010 financial reform law, Bank of America CEO Brian Moynihan said Thursday.

African-American Entrepreneur Launches Innovative Mobile Tax Refund Loan App to Revolutionize the Tax Industry (Black News), Rated: B

Good news for Americans struggling with income tax returns given the recent changes in the tax laws with the enactment of The PATH ACT. A visionary African-American entrepreneur, Marshawn Govan, has come up with an innovative mobile tax refund loan app that is all set to revolutionize the tax industry and make tax returns simpler for Americans.

Titled as MKG Tax Refund, the state of the art program is a patent pending mobile tax refund Collateral Driven Interest & Investment (SaaS) Software-as-a-Service (FOF) Fund-Of-Fund multi-manager investment application.

Add Another Bank to Fintech Roostify’s Roster of Investors (Bank Innovation), Rated: B

If there’s any question that digital mortgage firms are gaining attention from larger fintech players and investors, then look no further than venture capital firm Santander InnoVentures‘ investment in Roostify, a startup that digitalizes the mortgage application process.

French asset manager signs record deal in the Meatpacking District (The Real Deal), Rated: B

Tikehau Capital, a Paris-based firm with $15.6 billion in assets under management, signed a lease for the top two floors at Rockpoint Group’s new development at 412 West 15th Street, sources told The Real Deal.

The 11-year lease covers nearly 10,000 square feet on the top two floors of the 18-story building, which offer sweeping views of the Hudson River.

Lawmakers highlighted that H.R. 3299 — the Protecting Consumers’ Access to Credit Act of 2017 — clarifies current law to ensure innovative marketplace lending remains in-tact while simultaneously providing safe consumer protections.

H.R. 3299 passed through the House by a vote of 245-171 and went on over to the Senate, which received it, read the measure twice and referred to the Committee on Banking, Housing and Urban Affairs.

United Kingdom

Zopa on hiring drive to support credit card launch in 2018 (P2P Finance News), Rated: AAA

ZOPA is recruiting staff to develop its new credit card, which it plans to launch later this year as a feature of its digital bank.

Temasek-backed Funding Circle plans IPO at .1b valuation (Deal Street Asia), Rated: AAA

Funding Circle, the largest peer-to-peer (P2P) lender in the UK, is planning to list on the London Stock Exchange (LSE) that will see it float at an estimated valuation of £1.5 billion ($2.1 billion), according to a report by Britain’s Sky News.

Funding Circle set to hire Morgan Stanley to lead London flotation (P2P Finance News), Rated: A

FUNDING Circle is reportedly poised to hire Morgan Stanley to lead a flotation on the London Stock Exchange in the second half of this year.

The largest P2P platform by loan book size in the UK is expected to hire the US bank in the coming weeks, according to Sky News.

Lendy reports 224% turnover increase (Bridging&Commercial), Rated: AAA

Lendy has revealed a 224% turnover increase in 2016 (to £29.2m), compared with the previous year (2015: £9m).

The P2P lending platform has published its audited accounts for 2016, which also showed that profits before tax increased to £3.3m, compared with the £53,000 reported in 2015.

Lending Works chooses Credit Kudos to power new Open Banking initiative (Finextra), Rated: A

Credit Kudos, a challenger credit bureau, and Lending Works, a fast-growing peer-to-peer (P2P)  lending platform, are partnering to enable customers to benefit from the UK’s Open Banking  initiative, a secure way for banking customers to take control of their financial data. Credit Kudos  and Lending Works’ partnership is one of the first initiatives to use Open Banking to improve  customer experience in the finance industry.

Currently, approximately 60% of Lending Works’ borrowers are provided with  instant and automated credit decisions, whereas the remaining 40% require some manual  processes. Within the new world of Open Banking, Lending Works expects to increase that figure  to up to 90% of credit decisions being fully automated.

Small businesses look to specialist lenders for loans (Financial Times), Rated: A

British small businesses are diversifying their sources of funding away from big banks, as a growing number turn to specialist asset-backed lenders, peer-to-peer finance sites, private equity and venture capital investors.

Fewer small businesses are applying for loans than in the past five years and more of them fear that if they did they would be rejected, according to the latest report into small business finance by the British Business Bank, a government-backed development bank.

Out of the UK’s total of 5.7m small businesses, only 1.7 per cent applied for a loan or overdraft last year, the fifth consecutive year of decline since 2012.

There’s never been a better time to seek alternative finance (Belfast Telegraph), Rated: A

There are also several privately funded lenders (with a local presence in the province through brokerages) such as Atom Bank, Relendex, Thin Cats and Dunluce Capital which have all completed a number of deals in Northern Ireland from cash flow loans to property development finance.

The Access to Finance initiative supported by Invest Northern Ireland offers a variety of support including start-up funding, loans and equity investment.

WhiteRock Capital Partners manages the £50m NI Growth Loan Fund (Access to Finance) which offers loans from £50k to £1.25m to local SMEs. With an extensive network of funding partners, we work hard to deliver the most appropriate support for local businesses.

ArchOver readies for IFISA launch (P2P Finance News), Rated: A

ARCHOVER is planning to launch its Innovative Finance ISA (IFISA) in the next few weeks.

Crowdfunding Comes of Age (moneyexpert), Rated: A

Crowdfunding is gaining serious traction in the UK market, with the sector pushing past the £10 billion milestone in 2016. While, most people will probably still associate the idea of ‘crowdfunding’ with websites like Kickstarter or early stage equity investments, the reality is that 97% of the market is debt-based – either P2P lending or Crowd Bonds.

Both P2P lending and Crowd Bonds are also making big strides into the mainstream thanks to their inclusion in the new(ish) Innovative Finance ISA (IFISA), which allows investors to earn interest tax free on their investments.

It’s time to get clear on the Innovative Finance ISA (moneyexpert), Rated: A

With the birth of the Lifetime ISA (LISA) for 18-39 year olds on 6 April 2017, the Innovative Finance ISA (IFISA) is no longer the baby of the ISA family. But it is perhaps still the least well understood.

The peer-to-peer lending industry celebrates its 13th birthday this year. Has it finally grown up? (Verdict), Rated: B

Whether that’s Paypal in the US or the start of the peer-to-peer lending industry (P2P) in the UK, financial services were changing long before the global recession hit.

The P2P industry is celebrating its 13thbirthday this year. With big changes afoot in its major players such as Zopa, as well as Funding Circle, what is next for P2P lending?

China

China Gets Pushback on New Rules to Curb Lending Practices (WSJ), Rated: AAA

Chinese regulators and commercial banks are butting heads over new rules Beijing is rolling out to tackle off-the-books lending that’s compounding China’s debt woes.

Particularly targeted are practices banks use to move loans off their books by repackaging them as investments. Banks transfer the loans—mostly corporate and local government borrowings—to brokerages and other types of shadow lenders, which then peddle the rebundled investments to investors. Such maneuvers accounted for $3.5 trillion in off-balance lending as of last year.

European Union

Online Lending Market Growth Continues With Spanish Purchase (Prague Post), Rated: AAA

Wonga’s latest acquisition is Spanish company Credito Pocket, who was a lending company based in Barcelona. This is aimed to boost the visibility of their Wonga.es domain.

BinckBank and Raisin double up for Dutch savings market (Fintech Futures), Rated: A

BinckBank says it will be the first in the Dutch banking sector to offer its clients access to European savings products via its cooperation with Raisin.

Augmentum Fintech to raise £100mln to cash in on Europe’s financial disruption (Proactive Investor), Rated: A

A new trust aimed at Europe’s fast-growing fintech sector is looking to raise £100mln ahead of a float in London.

Augmentum Fintech PLC said the financial services sector is ‘ripe for disruption and disintermediation’ but, unlike other sectors such as retail and travel, this has yet to happen.

ING Diba Buys Lendico (P2P Banking), Rated: A

Bank ING Diba acquires p2p lending marketplace Lendico. According to Finanz-Szene.de the transaction was reported to the German Federal Cartel Authority last week. The bank has confirmed the acquisition.

International

Digital Identity Pioneer IdentityMind Global Lands $ 10M (Coverager), Rated: AAA

IdentityMind Global, the leader in Digital Identities You Can Trust, today announced that it has closed a $10M Series C round of financing. In addition to all existing investors, the round was co-led by Benhamou Global Ventures and Eastern Link Capital and included Hanna Ventures, Overstock.com, and Zanadu Capital Partners.

Coin-backed P2P platforms shrug off crypto volatility (P2P Finance News), Rated: A

Digital currencies such as Bitcoin and Ethereum suffered from price falls in January but many firms are still seeing the benefits of creating their own cryptocurrency to use for P2P lending. One provider, SOFIN, is currently looking to raise up to $1m (£720,000) to create a token that can be used as a tool to bypass high exchange rates so loans can be funded internationally.

FintruX’s whitelist closes in 11 days (AMBCrypto), Rated: B

The global P2P lending ecosystem, FintruX backed by Ethereum and No-Code development has reopened the Token Sale, FTX which is used to power the FintruX network and is set-up as a mean to reward or get rewarded for participating in the marketplace. The token’s minimum per transaction at present is 0.1 ETH.

Harnessing the Full Potential of the $ 600 Billion Crypto Network (NewsBTC), Rated: B

Gluwa and Aella Credit are the two fintech companies that have come together to create a blockchain based protocol that will allow investors to lend in any crypto.

These two companies plan to launch Creditcoin, which will operate across blockchains in the P2P lending market.

The Gluwa platform, to be powered by Creditcoin, will address the issues of accessibility of the crypto market by those in the fiat world by seamlessly connecting them with cryptocurrencies.

GISC LoanCoin Network (NewsBTC), Rated: B

GISC LoanCoin Network is a utility token based lending and borrowing platform that allows users to leverage their blockchain assets to secure cash loans. The network is optimal for P2P and B2B credit financing on a global scale.

iP2PGlobal Announces Its Pre-ICO Crowdsales For Its TWQ Token On Feb 19 (CoinTelegraph), Rated: B

The TWQ (Tawarruq) is an ERC20 token that confer the right to the token holder to submit an application for a personal financing based on a Commodity Tawarruq Trading program, through the iP2PGlobal platform and have it listed in the platform for prospective lenders to view and choose to finance.

10TWQs are needed to apply for a personal financing of up to 5ETH.

Australia

Australian Online Lender Prospa Ranks #1 in List of High Growth Firms in Asia Pacific (Crowdfund Insider), Rated: AAA

Prospa, a Sydney based online lender servicing the SME market, has received a nice recognition as it took the top spot for a high growth firm in Asia Pacific. According to a recent ranking of the top 1000 firms in Asia-Pacific by the FT, Prospa ranked number one having experienced revenue growth of 1600% during the time period of 2103 to 2016.

Payday lender Nimble Money up for sale, bids due this week (Financial Review), Rated: A

Privately owned personal loans company Nimble Money is on the block, with its two founders believed to be seeking an exit.

Street Talk can reveal Melbourne-based Baillieu Holst has been hired to find a buyer for the business and has been marketing the short term loans provider to financial services industry players and private equity firms in recent weeks.

Interested parties have been told Nimble Money is on track to make about $15 million in earnings this year, following significant growth in its loan book over the past 12-months.

It’s expected to be worth about $100 million.

Loans.com.au slashes variable rates for home buyers (Canstar), Rated: B

Online lender loans.com.au has cut interest rates on its variable rate home loan to just 3.52% (3.56%* comparison rate).

Comparatively, the next lowest variable home loan for owner-occpupiers at the time of writing sits at 3.54% (3.55%* comparison rate).

Over $ 11.5 million lent by payday loan alternative (finder), Rated: B

BaptistCare has approved 16 loans per week to some of Australia’s most financially vulnerable people.

The No Interest Loan Scheme (NILs), a microfinance program aimed at providing small no- and low-interest loans to financially vulnerable people, has this week announced it has surpassed $11.5 million lent in NSW. The loans are designed to help people on lower incomes purchase essential goods and services.

The loans are provided through BaptistCare with the scheme run under Good Shepherd Microfinance in partnership with NAB and the NSW Office of Fair Trading.

India

Financial services execs invest in fin-tech startup Fincash (VC Circle), Rated: AAA

Mumbai-based personal finance startup Fincash.com has raised Rs 1 crore ($150,000) in a fresh funding round from a group of angel investors from the financial services sector, a company statement said.

The startup will use this money to build its team, expand its product line, acquire customers and make its services available across more cities and towns, the statement added.

Fintech startup Aye Finance raises Rs 25 cr from Vivriti Capital (Economic Times), Rated: B

Fintech company focussed on the MSME sector Aye Finance has raised Rs 25 crore through a securitisation deal facilitated by Vivriti Capital.

APAC

Lendit’s accumulated volume of loan tops W100b (The Korea Herald), Rated: AAA

Lendit, a peer-to-peer lending platform operator in South Korea, has extended a combined 101.8 billion won ($95.4 million) in nearly 7,300 consumer loans as of Monday to midrange borrowers seeking lower interest rates, according to the fintech startup Monday.

How VC Firm Magma Partners is Tapping Into the Untapped Chilean Fintech Market (Bank Innovation), Rated: A

With government-backed initiatives and a finite business of copper export, Nathan Lustig, co-founder and managing partner at Magma Partners, saw huge potential in the Chilean fintech market.

Lustig points out that only 30% of Chileans have credit cards, while only 50% have bank accounts, “and that’s the more advanced population,” he said. Additionally, consumer experience is “pretty horrible for about 80% of this population,” he said.

One area within the fintech space that Magma has been particularly interested in is invoice-based lending, also known as factoring. In its portfolio is Portal Finance, a startup that provides SaaS for the factoring industry.

Portal Finance earns between 0.5% to 1% for every deal the bank accepts.

Talad platform offers SME loans based on invoice collateral (The Nation), Rated: B

Talad Invoice, a lending platform initiated by a fintech startup, is expected to grow at an exponential rate this year, following two years of peer-to-peer lending using invoices as loans collateral, said Watewiboon Pumipue, chief executive officer of D90 Capital Co, which operates the financial platform.

Finda envisions online financial marketplace (The Korea Herald), Rated: B

Finda operates an eponymous web portal that provides information about over 7,000 financial products — ranging from personal and mortgage loans, investment instruments, credit cards to insurance products — standardized in Finda‘s own format. Users can be offered easy-to-understand and up-to-date information about products online, she said.

Finda gathers information primarily from an open API by the Financial Supervisory Service, but since the FSS’ database provides data, including interest rates, of the previous months, Finda reflects updates directly from sellers — banks, insurers, credit card firms and peer-to-peer lending platforms.

Africa

Global Startups Boot Camp Coming To Rwanda (KTPress), Rated: A

Rwanda will next month host a continental Startup boot camp (SBC) that will source innovative and top startup talents in the country and across the globe.

SBC is a global family of industry-focused accelerators, which last year launched its first-ever Africa-based programme.

Canada

KiWi’s marketplace loans set for imminent Canadian debut (Financial Post), Rated: A

The next stage in the development of Canada’s first credit fund that invests in marketplace loans — unsecured consumer and small business loans provided by online lending companies — is set to play out over the next month.

The gang behind KiWi Private Credit Fund — formed last summer with $30 million of contributions from institutional and high-net-worth investors — is planning to meet the Canadian platforms.

Russia

Microfinancers warn Central Bank of return to 90s (Realnoe Vremya), Rated: A

The regulator has been fighting against expensive and very risky loans for several years already. Last July it tightened reserve requirements for MFO again: they must add 100% interest for payday loans with a delay of more than 90 days.

Firstly, the regulator is going to restrict the size of payday loans to 10,000 rubles, secondly, to reduce the biggest term of such loans to 15 days, thirdly, to reduce interest rates to 1,5% in 2018, to 1% in July 2019 a day. Now the largest payday loan is 45,000 rubles. The maximum term is 2 months, while extra payment on such loans is limited to a threefold size of a loan.

Payday loans account for 57,6% of all loans that MFOs granted in the second quarter of the last year.

Authors:

George Popescu
Allen Taylor

Monday February 12 2018, Daily News Digest

credit immigrants

News Comments Today’s main news: SoFi loan performance suffers, earnings projections missed. Ant Financial to pursue equity fundraising at potential $100B valuation. Elevate publishes FY 2017 results. Symphony, OpenFin join forces. Openwrks, Zopa, TrueLayer get into open banking. Rupeek raises $6.8M. Today’s main analysis: MPL securitizations comparison (SoFi 2018-A, MFT 2018-1, SCLP 2018-1). Today’s thought-provoking articles: Silicon Valley investors fund […]

credit immigrants

News Comments

United States

United Kingdom

China

Australia

India

APAC

News Summary

United States

SoFi Reports Disappointing Earnings as Loan Performance Suffers (WSJ), Rated: AAA

Customers of online lender Social Finance Inc. are missing their loan payments at an unexpectedly high rate, a misstep for a company that has boasted that its focus on high-earning individuals would yield better borrowers.

The privately held San Francisco-based company said it missed its internal fourth-quarter earnings projections, due in part to a markdown in the “value of certain personal loan assets due to lower-than-expected credit performance,” according to a letter to investors that was reviewed by The Wall Street Journal. The company also cited increased hiring costs and expenses related to recent management changes.

You won’t believe how much grads from these top business schools rake in (Moneyish), Rated: A

SoFi examined 60,000 student loan refinancing applications to determine which MBA programs churn out the highest earners, and which produce grads who are mired in student debt.

According to SoFi, these are the top 10 business schools, ranked by average salary three years after graduation:

1. University of Pennsylvania (Wharton School of Business): $224,034
2. Columbia University: $189,295
3. Stanford University: $186,534
4. Harvard University: $184,463
5. University of California, Berkeley: $171,270
6. Dartmouth College: $169,498
7. Northwestern University: $167,770
8. Cornell University: $167,544
9. University of Chicago: $166,215
10. Massachusetts Institute of Technology: $165,666

These 10 programs have the best salary-to-debt ratio in the US:

1. University of Wisconsin-Madison: Avg. salary = $122,532; avg. debt = $52,568
2. Brigham Young University: Avg. salary = $114,559; avg. debt = $50,224
3. Harvard University: Avg. salary = $184,463; avg. debt = $83,337
4. Stanford University: Avg. salary = $186,534; avg. debt = $85,443
5. Villanova University: Avg. salary = $136,464; avg. debt = $63,014
6. University of Pittsburgh: Avg. salary = $149,157; avg. debt = $71,471
7. Loyola University, Maryland: Avg. salary = $122,915; avg. debt = $59,029
8. North Carolina State University: Avg. salary = $92,184; avg. debt = $46,140
9. University of Florida: Avg. salary = $110,942; avg. debt = $56,035
10. University of Houston: Avg. salary = $105,476; avg. debt = $54,308

Elevate Announces Full Year 2017 Results (Crowdfund Insider), Rated: AAA

Elevate’s  Fourth Quarter 2017 Financial Highlights are the following:
  • Fourth quarter GAAP net loss due to federal tax law charge, but fourth consecutive quarter of net income on an adjusted basis: Fourth quarter 2017 net loss totaled $12.2 million, or $(0.29) per diluted share, reflecting a one-time $12.5 million charge associated with the change in the federal tax law resulting from the tax reform in 2017. Excluding the impact from the tax law change, net income for the fourth quarter of 2017 would have been $0.3 million, or $0.01 per diluted share, versus a net loss of $4.4 million, or $(0.34) per diluted share, for the fourth quarter of 2016. The net loss for full-year 2017 totaled $6.9 million, or $(0.20) per diluted share. Excluding the impact of the federal tax law, net income for full year 2017 would have been $5.5 million, or $0.16 per diluted share, compared to a net loss of $22.4 million, or $(1.74) per diluted share, for full-year 2016.
  • 16% year-over-year revenue growth: Revenues for the fourth quarter of 2017 increased 14.5% from the fourth quarter of 2016 and were up 16.0% for full-year 2017 versus 2016. Revenues totaled $193.4 million in the fourth quarter of 2017 compared to $169.0 million for the prior-year period. Full-year 2017 revenues totaled $673.1 million compared to $580.4 million for full-year 2016.
  • More than 28% year-over-year growth in combined loans receivable – principal: Combined loans receivable – principal totaled $618.4 million, a 28.5% increase from $481.2 million for the prior-year period. The Rise installment loan and Elastic line of credit combined loans receivable – principal balances as of December 31, 2017 were up 19.6% and 47.4% over the prior year-end balances, respectively.
  • Adjusted EBITDA up 45% compared to prior year: 2017 Adjusted EBITDA totaled $87.5 million, up 44.7% from $60.4 million in 2016. Adjusted EBITDA margin was 13% for both the fourth quarter of 2017 and full-year 2017.
  • The ending combined loan loss reserve as a percentage of combined loans receivable was 14.3%, lower than the 16.1% reported for the prior-year period due to the improved credit quality and the continued maturation of the loan portfolio. Charge-offs as a percentage of originations for full-year 2017 continued to trend below previous years at less than 25% of principal originations.
  • The total number of new customers acquired during the fourth quarter of 2017 was approximately 95,000 with an average customer acquisition cost of $231, below the targeted range of $250-$300. This represented a 34.6% increase over the approximately 70,000 new customers acquired in the fourth quarter of 2016.

Equity Market Volatility, GS Dialing Up M&A (PeerIQ), Rated: AAA

Volatility made an abrupt return to capital markets after a nearly 18 month hiatus. Equity markets dropped almost 10% from their peaks, as investors focused on rising US treasury yields. 10-year yields touched 2.88% – nearly a four-year high. Corporate bonds (CDX.IG spreads) widened 5bps this week to 60bps, while high-yield widened 16bps to 353bps.

US consumer credit grew by $18.4 Bn in December 2017, at an annualized growth rate of 7.7%. Revolving credit card debt increased by $5.1 Bn to $1.03 Tn, the highest on record. Consumer spending has boosted US GDP, although the increasing cost of leverage and rising rates could create a drag on growth.

GS M&A Accelerating

Source: PeerIQ

 

Source: PeerIQ

Taking a cut of student’s future paychecks has Silicon Valley investors funding education (Quartz), Rated: AAA

The model is attracting a new generation of startups, as well as investors, eager to bail out American students drowning in $1.3 trillion in student debt. The Brookings Institute estimates as much as 40% of students who entered college in the early 2000s may default on their loans by 2023, based on historical trends.

One of the first firms to enter the US market was the Chilean firm Lumni founded in 2002 (although it only came to the US in 2009) followed by 13th Avenue (2009), Cumulus Funding (2011), Upstart (2012), Pave (2012), and Vemo (2015). Not all are still signing ISAs, but current interest seems to be based on growing demand.

Are income-sharing arrangements a good deal for students?

The federal government already provides more than $200 billion (paywall) in grants, loans, and work-study assistance for students’ post-secondary education each year. Private lenders hand out about $8 billion in student loans annually, estimates the Consumer Financial Protection Bureau. Parents and family contribute still more.

Almost 60% of college graduates in the US carry student debt, and about 57% of Americans regard it as a major problem, reports the Harvard Kennedy School of Government. Yet many are not even confident their college educations are still the golden ticket they once were. A 2017 survey of 32,000 college students revealed only one-third felt prepared to enter the job market, while only half said their major will lead to a good job.

Four-year universities like Purdue are using them as a way to show their commitment to students as much as reduce their financial burden. The school’s program, Back a Boiler (an abbreviation of the nickname for the student body known as Boilermakers), is offering 175 students almost $2 million in ISA funding. Graduates with high income never pay more than 2.5 times their original ISA amount, while those earning less than $20,000 a year see their payments go to $0.

MissionU, a one-year training program in data analytics and business intelligence, offers students a blended online (80%) and in-person curriculum (20%), and work experience. It charges no tuition. After graduates earn at least $50,000, they pay back 15% of their income for the first three years.

 

2 startups are joining forces — and together they could pose a threat to Bloomberg (Business Insider), Rated: AAA

Symphony, a messaging service that has gained some traction among Wall Street firms, has been integrated into OpenFin, an operating system built for financial-services, the two companies announced Thursday.

OpenFin hosts more than a hundred applications on its platform, and the integration means Symphony will be “interoperable” with those apps, the same way social media apps on your phone are able to talk with one another.

In total, Symphony has 230,000 users across 200 firms, whereas OpenFin can be found on more than 100,000 desktops across the Street.Symphony, a unicorn, announced a $63 million fundraise in May, bringing the total amount the company has raised to $234 million. OpenFin finished a $15 million round of venture funding backed by JPMorgan in February 2017. It has raised $22 million in total funding.

For new immigrants, buying a home or getting a cellphone is complicated and expensive. Even if they have financial identities and wealth in their home countries, they have no credit history in the U.S.

It’s a challenge for millions of people, and a handful of fintechs, including Nova Credit, CreditStacks, and Petal, see an opportunity to help with some creative solutions.

Others, like Deserve (formerly SelfScore) and Petal have been hoping to woo immigrants and other thin files with their own credit products, while still others like eCredable are crunching alternative data to help people build up their credit history.

And in January, CreditStacks announced a credit card product aimed at immigrant professionals who want to have a U.S. credit card in hand when they arrive in America.

San Francisco mortgage fintech Lenda expects growth spurt in 2018 (San Francisco Business Times), Rate: A

San Francisco mortgage fintech Lenda, which offers mortgages faster and at lower cost than traditional rivals, expects growth to accelerate this year as it expands into a dozen states and puts to work the $5.25 million it raised in its first venture round.

New Retail P2P Investment: The Worthy Bond (P2P Lending Expert), Rated: A

When I wrote my book on P2P Lending for the retail investor, P2P Investing 101 (the paperback version here), that came out in November, there were only 7 options for retail investors.  Those options were Lending Club and Prosper, as well as 5 options that take advantage of the adjustment to SEC Regulation A known as Reg A+.

We now have an 8th investment option.  The Worthy Bond, which uses Reg A+ and comes from Worthy Financial. By using Reg A+, the Worthy Bond is available to retail investors as a proxy savings account within the p2p lending landscape.

Prices up for January, Subaru 0-percent financing (Kelley Blue Book), Rated: A

While the average transaction price (ATP) for light vehicles hit $36,270 in January, a whopping $1,360 or 3.9-percent gain over a year earlier, the ATP declined from December’s record, dropping $486 or 1.3 percent month over month.

Subaru 0-percent financing

Subaru, which has been setting sales records, typically runs tight inventories and keeps a close rein on incentives. However, through the rest of February it is offering 0-percent financing for 63 months on select models along with a couple of enticing fleet deals.

The 0-percent deal for 63 months is being extended on 2017/18 Legacy models, 2017/18 Outbacks and 2017 Foresters. On the 2018 Legacy, there’s also a $185 per month lease for three years with $2,595 down. The 2018 Outback is being offered on a 3-year lease deal for $239 per month with $1,739 down, while the 2018 Forester can be leased for 36 months at just $219 with $1,719 down.

Interest rates climb

According to Bankrate.com, the average 60-month new car loan is averaging 4.51 percent interest, a two-basis point increase over rates being offered at the end of November. Shorter 48-month loans are slightly cheaper, averaging 4.44 percent, again, two basis points higher than two months ago. On the used car side of the ledger, rates are closing in on the 5 percent level, averaging 4.97 percent on 3-year loans. That’s up from an average of 4.78 percent at the end of November.

Eyeing robo advisors, IBDs to launch new client portals (FinancialPlanning), Rated: A

Independent broker-dealers are rebuilding their online presences for a digital investing era, ushering in new client portals and offering automated investing for smaller accounts.

Advisors have pushed the firms to mimic the speed and look of digital investment platforms. Digital advice clients of all kinds will soar 844% to more than 17 million by 2021, according to a September study by Aite Group. In a nod to incumbents’ services, robos have also started offering human advisors to clients.

Narmi integrates top fintech companies into digital banking platform for credit unions (CUInsight), Rated: A

Narmi, a financial technology company, showcases two of its remarkable fintech integrations – Billshark and Lemonade.

Billshark – Helping Reduce Monthly Bills for Millions of Americans

Billshark helps consumers reduce monthly bills on cable, satellite TV, wireless phone, internet and many other categories. There are currently approximately 375 million monthly bills in America and roughly 80% can be negotiated. The average amount saved per bill is $280-300.

Lemonade – Reinventing Insurance Through Artificial Intelligence

Lemonade provides a mobile-first, artificial intelligence-infused way to obtain a home insurance policy. The company’s focus is on homeowners and renters insurance, and policies start at $25 a month and $5 a month, respectively.

When fintech lite is the right small-business lending strategy (American Banker), Rated: A

Adding a community touch to automation has proved a profitable lending strategy for one bank.

Marquette Bank in Chicago has been able to digitize its lending processes and improve its credit memo creation time by upwards of 25% using technology from the cloud-based loan origination software firm Baker Hill.

Small-business lending has long been a staple of community banking, but in recent years customers have turned to online lenders and other fintechs for credit, in large part due to the speed and digital aspect of the experience.

Zelle’s next phase takes shape at BNY Mellon (American Banker), Rated: A

The banks behind the Zelle network had more in mind than P-to-P payments between consumers, and BNY Mellon is beginning the network’s evolution by targeting the business payments market.

Zelle will help support tokenized digital payments for institutional and corporate clients in a market that is notoriously resistant to automation. BNY Mellon hopes corporates will see the Zelle network’s ability to increase control over cash flow through near-instant processing.

Webster Bank Offers Customers An Automated Digital Investment Platform (PR Newswire), Rated: A

Webster Investments, a division of Webster Bank, N.A., now offers Guided Wealth Portfolios (GWP), an advisor-enhanced, digital investment platform designed to enhance customer experience by providing an additional option to manage their investments. The online investment platform was designed as an innovative option for clients seeking a technology-enabled investment solution combined with the opportunity to have a relationship with a financial advisor.

We’re partnering with SURE to bring you Small Business Insurance (Inc Authority Email), Rated: B

Small Business Insurance is an all-in-one policy that protects you and your growing business from critical risks. Your policy will cover:

  •   General liability
    • Get up to $2 Million of coverage in legal and litigation issues tied to 3rd party claims of property damage, and bodily injury and associated medical costs.
  •   Business personal property
    • Replace lost or damaged property owned by your business, such as computers, furniture, and machinery.
  •   Lost business income
    • Receive up to $250,000 in lost income if your business has to close due to a covered loss.
  •   And other coverage
    • Includes coverage for data breaches, litigious employees, non-business automobiles, and more.
United Kingdom

Openwrks, Zopa and TrueLayer get into Open Banking groove (Finextra), Rated: AAA

The UK’s major banks are being shown a clean pair of heels by non-bank competitors in the Open Banking space, with new announcements by TrueLayer in tandem with Zopa, and Openwrks demonstrating the determination of third party providers to open up access to consumer account data.

Zopa has worked with TrueLayer to create an income verification product which removes the need to manually upload documents to verify income – replacing it with Open Banking data.
Separately, Openwrks – which likewise enables providers of consumer and small business products and services to access consumer’s financial data – has become the first third party provider to successfully connect to all of the banks currently providing functional APIs (Lloyds, RBS, AIB, HSBC and Danske).

Elliott takes majority stake in new Welsh online bank (The Times), Rated: A

China

China’s Ant plans equity fundraising at potential $ 100 billion valuation – sources (Reuters), Rated: AAA

China’s Ant Financial Services Group is planning to raise up to $5 billion in fresh equity that could value the online payments giant at more than $100 billion, people familiar with the move told Reuters.

The new round should start with a valuation of between $80 billion to $100 billion, the people said.

China Fintech Watchdog to Step Up ICO Oversight (CoinDesk), Rated: A

A self-regulatory association that draws support from China’s banking and securities sectors is vowing to increase its oversight over cryptocurrency and initial coin offerings (ICO) in 2018.

In its annual meeting held on Feb. 9, China’s National Internet Finance Association (NIFA) revealed that while it has put special efforts into overseeing the sector in 2017, it expects this work to become a regular part of its 2018 agenda.
Australia

Loans.com.au slashes home loan rates for owner-occupiers, investors (mozo), Rated: AAA

Online lender, loans.com.au has today slashed rates for both owner-occupiers and investors on certain home loans, and is now offering some of the lowest mortgage rates in the market.

One of the changes was to cut the Essentials Variable 80 rate for owner-occupiers looking to make principal and interest repayments by 12 basis points, bringing it to a red hot 3.52% – the lowest rate for a loan of its kind in the Mozo database.

The rate on loans.com.au’s Offset Variable 80 for owner-occupiers making principal and interest repayments was also slashed by 12 basis points, bringing it down to a competitive 3.60%.

India

Online gold loan platform Rupeek gets $ 6.8 mn from Accel, Sequoia (VC Circle), Rated: AAA

Bengaluru-based Rupeek, which operates an online marketplace for gold loans, has raised $6.83 million (Rs 44 crore) in a fresh funding round led by Accel Partners.

Eduvanz Financing raises funds from Blinc Advisors (livemint), Rated: A

Eduvanz Financing Pvt. Ltd, an education technology start-up that provides loans for skill development to students, has raised $500,000 in a round of funding led by Blinc Advisors, a venture capital fund, a senior executive at the start-up said.

Fintech start-up EarlySalary is making emergency loans more affordable (Business-Standard), Rated: A

Neha Kumari needed a new phone urgently after her old one was damaged during a Saturday night party. To add to her difficulties, it was the beginning of the last week of the month and the salary day was 10 days away. Missing client calls for more than a couple of days was out of the question and the weekend was expensive anyway.

Neha, who did not have a credit card, could have borrowed from friends, but most of them were as broke as she was then. And borrowing from the family was ruled out. The last time she had borrowed Rs 10,000 from a friend to book emergency tickets was three …

Preventive measures (The Hindu Business Line), Rated: A

This is with reference to reports on market volatility. Regulators must ensure that this trend does not end up promoting alternative investment avenues of an uncertain nature. Investor interests demand that risk-based P2P lending via online/social marketplaces be regulated. Peer lending has significantly grown and enabled borrowers with a sub-par credit history. P2P lending is highly prone to performance risks on account of a higher probability of a borrower-default, credit risks owing to poor loan-sanctioning decisions & lack of fund-monitoring post disbursal, cash drag risks because of a larger borrower-population than the available lenders, platform Risks driven by borrower insolvency or frauds or technology risks/cybersecurity breaches and market risks owing to interest rate fluctuations and unemployment risks leading to non-payments.

What’s Driving India’s Fintech Boom? (Wharton), Rated: A

With more than 200 million active users in India — the largest anywhere in the world — WhatsApp is expected to drive large volumes on peer-to-peer (P2P) payments and also become a popular platform for merchant payments. India is slated to be the first country globally to get the payments facility from WhatsApp.

Other global giants, too, are zeroing in on this space. For instance, Google has already launched its payments app Google Tez (“Tez” in Hindi means fast), while Samsung has launched Samsung Pay and Amazon has introduced Amazon Pay.

Paytm, India’s largest online payments and mobile wallet company, has invested Rs. 5,000 crore ($786 million) in mobile payments to date.

This was 13% less than $14.6 billion in 2015. On the other hand, fintech investments in Asia increased to $5.4 billion in 2016, up 12.5% from $4.8 billion in 2015.

Fintech Will Change How We Bank (Business-Standard), Rated: A

In the not too distant future, there may come a time, where we cease to interact with the as we know it. which were monolithic organization who created the products, sold it directly and owned the customers are being slowly ceding ground to so called new breed companies chipping away at the edges. While regulations and strict KYC/AML regulations still enable to continue to be in business, the power they once wielded is diminishing. As Niti Aayog Chairman, Amitabh Kant said “Debit cards, credit cards and ATMs might lose relevance in the next four years”.

Peer to peer lending picks pace (Telengana Today), Rated: B

According to the latest annual report of RBI, during Q1 of FY18, as against negative incremental rise in bank credit, the non-bank sources gained space in lending. The total flow of funds to the commercial sector from non-bank sources during the period increased to Rs 1,16,600 crore while the formal banking system trailed behind.

In terms of financial assets, NBFCs recorded a healthy growth — a compound annual growth rate (CAGR) of 19% in the past few years — comprising 13% of the total credit and are expected to reach nearly 18% by 2018-19.

APAC

Asia-Pacific Fintech Market to reach US$ 72 billion by 2020, finds Frost & Sullivan (Business Insider), Rated: AAA

Active support and initiatives by financial regulators such as the Monetary Authority of Singapore, Bank Negara Malaysia and Bank Indonesia has enabled the Asia-Pacific Fintech ecosystem to grow significantly in 2017.

The Fintech industry in the Asia-Pacific region is expected to grow at a CAGR of 72.5% from 2015 to 2020, reaching US$72 billion.

Future of Cashless Payments in Singapore

According to Ms Quah Mei Lee, Industry Principal, ICT, Asia-Pacific, the mobile payments market in Singapore was estimated to be worth US$1.4 billion in 2017. The market is still small but is growing fast. There are many supportive regional and local regulations and initiatives that will help Singapore move towards a cashless Society.

Fintech in Singapore’s SME Landscape

In the wake of the global Fintech boom, disruptive market innovations have forced a radical shift of business models in the Financial Services industry, notably within the P2P Lending segment. Frost & Sullivan believes that leading banks and financial institutions are driven to be lean and agile on multiple fronts, including but not limited to new digital services, elevated customer experiences and innovative technological solutions.

Online loan providers have recently begun targeting young adults here in their 20s and 30s in Korea in the name of “providing pocket money.” Other peer-to-peer lending platforms promote their services as an investment fund or shared wallet to relax young people’s vigilance toward the money lenders.

Blockchain spending surges in China and Asia (Shine), Rated: B

Blockchain spending in Asia Pacific excluding Japan will jump 91 percent in the five years until 2021, thanks to applications in finance and supply chain industries, said IDC in a report today.

China will see a five-year annual growth rate of 95 percent, compared with about 81 percent growth worldwide, said IDC in the report, the first blockchain report released by the company.

For example, PPDai, China’s first online P2P (peer-to-peer) lending platform listed in the US market, said in January it would invest 1 billion yuan (US$156 million) within three years to set up a new research institute.

Authors:

George Popescu
Allen Taylor