Thursday February 28 2019, Weekly News Digest

Annual fintech financing Singapore

News Comments Today’s main news: SoFi to roll out crypto trading with Coinbase. Walmart now offers Affirm loans. Funding Circle fund ups the ante on buyback strategy. Orca launches IFISA. LendDenClub cross 1 million borrowers, lenders milestone. Today’s main analysis: 2019 securitization update. How marketplace lending is a growing and dynamic global market. (A MUST-READ) Today’s thought-provoking articles: The 2009 […]

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Annual fintech financing Singapore

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United States

Fintech Startup SoFi to Roll Out Crypto Trading Via Partnership With Coinbase (CoinTelegraph), Rated: AAA

Fintech startup SoFi — known for its online lending services — is partnering with major United States-based crypto exchange Coinbase to roll out crypto trading support, according to a CNBC report Feb. 26.

Millennial online lender SoFi to offer zero-fee ETFs, an unexpected rival for index fund giants Vanguard, iShares (CNBC), Rated: A

The race to zero-fee exchange-traded funds has found an unlikely competitor: Online lending and personal finance platform SoFi, which has filed for two index ETFs that will waive management fees for the first year. In making the move to zero-fee ETFs, the online lender is crashing an ETF party dominated by Vanguard and BlackRock‘s iShares.

FTC orders SoFi to stop misleading consumers (MPA Mag), Rated: B

The Federal Trade Commission has ordered online lender SoFi to stop lying about how much borrowers can save by refinancing with the company.

Digital lender founded by ex-SoFi CEO raises $ 65M to fuel expansion (American Banker), Rated: A

The new company founded by Mike Cagney, the former embattled chief executive of Social Finance, plans to announce a $65 million funding round on Wednesday, bolstering firm’s expansion into other financial services, including wealth management.

With the new venture, Cagney is using some of the strategies from his tenure at SoFi — like diversification into areas typically only occupied by traditional banks. However, the new company, Figure, is focusing on different customers, and it’s taking steps to avoid scandals similar to the ones that saw Cagney step down from the SoFi helm.

Walmart teams with Affirm to offer point-of-sale loans (American Banker), Rated: AAA

Walmart will offer its customers point-of-sale loans for the first time — both on its website and in nearly 4,000 U.S. stores — under a partnership with the Silicon Valley lender Affirm.

Under the deal, Walmart shoppers will be able to get Affirm loans of three, six or 12 months to finance purchases ranging from $150 to $2,000. The loans are already being offered in Walmart stores, and they will be available to Walmart’s online shoppers in the coming weeks.

Affirm’s latest partnership brings its alternative financing to Walmart’s US stores and website (TechCrunch), Rated: A

The companies announced this morning that Affirm’s financing options would be made available in more than 4,000 Walmart Supercenters across the U.S., and will roll out to Walmart.com in the weeks ahead.

The offering will go live across Walmart Supercenters nationwide, except in Iowa, West Virginia and Puerto Rico, and will be soon available on Walmart.com.

Loan app Affirm CEO breaks down new Walmart partnership (CNBC), Rated: A

Loan app Affirm CEO breaks down new Walmart partnership from CNBC.

ABS Vegas – 2019 Securitization Update; Square Charter Status (PeerIQ), Rated: AAA

In regulatory news, Square’s ILC charter application has received opposition from 37 community groups. The groups are concerned about Square’s CRA activities and have asked the FDIC to bolster Square’s CRA requirements. Before this letter from community advocates, nearly all of the 15 letters the FDIC received were in favor of Square’s bid. Square is the furthest along the path to getting an ILC charter and its experience will determine whether other FinTechs follow its lead.

Structured Credit Investor magazine explores the challenges facing the maturing marketplace lending sector. Issuers need to distinguish between the borrower experience that they provide and manage liquidity. The article also makes the point that the sector is ripe for consolidation, although we haven’t seen any M&A yet.

2019 Securitization Update

The first two months of 2019 saw 5 securitization deals totaling $1.7 Bn in new issuance. The issuance volume represents a 23% drop over that seen in the first two months of 2018, as the market recovers from the volatility in equity and credit markets seen at the end of 2018. Total securitization issuance now stands at $46.2 Bn, with 147 deals issued to date.

Source: PeerIQ

The Housing Market’s 10 Year Challenge — Comparing The Housing Market of 2009 to Today (LendingTree), Rated: AAA

When the real estate bubble burst in late 2008, many Americans saw their home values fall drastically, but a lot has changed in the 10 years since — housing prices have rebounded from their lows during the Great Recession. And though prices are now starting to cool, in many cases, home values have even exceeded their 2006 highs.

On average, median home values have increased by nearly $50,000 across the 50 largest metros in the United States since 2009.

Metros where housing prices have recovered the most since 2009

San Jose, Calif.

Median home value 2009: $638,300
Median home value 2017: $957,700
Median home value change: $319,400
Median unemployment rate change: -6.4%
Median household income change: $32,991

San Francisco

Median home value 2009: $591,600
Median home value 2017: $849,500
Median home value change: $257,900
Median unemployment rate change: -5.4%
Median household income change: $27,889

Los Angeles

Median home value 2009: $463,600
Median home value 2017: $617,100
Median home value change: $153,500
Median unemployment rate change: -5.0%
Median household income change: $11,467

Source: LendingTree
Source: LendingTree

Gen Xers Carry the Biggest Auto Loan Burden; Study Finds (One World Herald), Rated: A

According to the loan comparison website, the median balance of Gen Xers who have auto loans is $18,741 is higher than other age groups. It is 9% more than baby boomers’ $17,185 median balance. This is higher than millennials’ $16,200 and 37 percent more than the lowest median balance of $13,666 held by Gen Z.

Personal Loan Interest Rates for February 2019 (Nerdwallet), Rated: AAA

Personal loan interest rates, whether you’re considering a loan from a bank, credit union or online lender, generally range from about 6% to 36%. The actual rate you receive depends on factors such as your credit score and history, annual income, existing debt and where you get the loan.

Online lenders offer the lowest starting interest rates on personal loans to borrowers with good to excellent credit.

Source: Nerdwallet

LightStream and Marcus both require a minimum credit score of 660. LightStream accepts joint applications, and one applicant can have a credit score lower than its minimum. SoFi has a slightly higher credit score requirement and requires at least $45,000 in annual income.

Elevate Credit (ELVT) Posts Earnings Results, Meets Expectations (Fairfield Current), Rated: A

Elevate Credit (NYSE:ELVT) announced its quarterly earnings results on Monday, February 11th. The company reported $0.09 earnings per share (EPS) for the quarter, meeting the Zacks’ consensus estimate of $0.09, Bloomberg Earnings reports. The business had revenue of $207.29 million for the quarter, compared to the consensus estimate of $212.42 million. Elevate Credit had a return on equity of 15.72% and a net margin of 1.59%. Elevate Credit updated its FY 2019 guidance to $0.55-0.65 EPS.

Source: Fairfield Current

Hunt Real Estate Capital buys RealtyMogul’s proprietary loan underwriting program (Housing Wire), Rated: A

Hunt Real Estate Capital, which offers financing for all types of commercial real estate, will soon have a new underwriting system to help it originate those loans, as the company is buying a proprietary loan underwriting system from RealtyMogul.

Elevate’s Joan Kuehl Named Dallas ORBIE CIO of the Year (The Progress), Rated: B

Elevate Credit, Inc. (“Elevate”) today announced that Executive Vice President and Chief Information Officer Joan Kuehl has been named the Large Enterprise CIO of the Year by the Dallas ORBIE CIO of the Year Awards. The award honors chief information officers who have demonstrated excellence in technology leadership.

A Recession Coming? Small Business Lending Platform Kabbage Says It’s Prepared (Forbes), Rated: A

The world is bracing for a recession, with the latest data showing  in the U.S. expect it to occur by the end of 2021

If those predictions prove true, it will be the first major economic downturn for some of the nation’s leading fintechs. Born out of the ruins of the recession, these startups have enjoyed nearly a decade of success buoyed by strong economic growth, a bull run in the stock market and low unemployment.

Here’s more on the  AJC Top Workplaces midsize companies (AJC.com), Rated: B

Kabbage has been named to the list for five consecutive years and this is its first year in the top five. The private financial technology company, founded in 2009, has 489 global employes and 367 at its U.S. headquarters in Atlanta. Flexibility at work and perks, such as a daily catered lunch and snacks, are among reasons employees appreciate working for Kabbage. Wellness benefits include fitness classes, health equipment onsite, biweekly meditation classes, CPR training, an annual flu shot clinic and sponsoring sports clubs. It also fully pays health benefits for individuals and provides annual bonuses and a 401(k) match. Through its sabbatical program, employees of five years can receive six weeks of paid time off and an additional $6,000. In 2018, Kabbage participated in the Atlanta PRIDE parade and also took a stand against gun violence after the mass shooting at Stoneman Douglas High School. Workers in 2019 will build a Habitat for Humanity home as part of its Kabbage Kares program, which also has supported PAWS Atlanta, Easter Seals and the Epilepsy Foundation.

Diversifying a Self-Directed IRA Made Simple with New Offering from CrowdStreet (The Progress), Rated: A

CrowdStreet, an online marketplace for direct equity investment in commercial real estate (CRE), today launched a streamlined, investor-friendly approach to investing qualified retirement account funds into commercial real estate offerings. This new option makes it easier than ever for individuals to access CRE investments with their self-directed IRAs (SDIRA), thus reducing their investment exposure to a volatile stock market and achieving more independence in managing their investments.

Liquid P2P and Interest Radar Announce Strategic Partnership (Liquid P2P), Rated: A

Liquid P2P and Interest Radar are pleased to announce that they have entered into a strategic partnership. The two third-party investing services for online peer-lending giant Lending Club will combine strengths under a single platform to deliver a more comprehensive automated tool with a patent-pending liquidity solution.

Direct Lending Investments Suspends Investor Withdrawals (Lend Academy), Rated: A

Earlier this month Brendan Ross, the CEO of Direct Lending Investments, Inc., sent a letter to investors notifying them that they have suspended withdrawals and redemptions effective February 8, 2019. Lend Academy was able to obtain a copy of this investor letter, dated February 11, that provides some color into what happened. The reason given was the delinquency of a large holding, VOIP Guardian, a telecom receivables factoring company.

Fintech deal will provide access to midsize businesses in U.S. (American Banker), Rated: A

Add HSBC to the list of banks partnering with commercial online lenders.

The bank on Tuesday announced a partnership with Neptune Financial, a San Francisco online lender that focuses on businesses with $10 million to $100 million in assets. The bank estimates that, with the access it will get to Neptune customers, the deal represents a $1.5 trillion opportunity.

Venmo debuted a limited-edition rainbow-colored card (Business Insider), Rated: A

Venmo, the PayPal-owned peer-to-peer (P2P) giant, debuted a limited-edition rainbow-colored version of its physical card product. The card will function the same as regular Venmo cards, allowing customers to pay wherever Mastercard is accepted, split costs and tips, withdraw funds from select ATMs, and manage their Venmo balance, but it will only be available for as long as supplies last, according to Venmo.

Source: Business Insider

Why digital identities will be so important in the next few years, according to Mastercard’s vice chairman (CNBC), Rated: A

The pace with which we are moving toward the internet of things is “very rapid” but we “can’t have the internet of everyone without the inclusion of everyone,” according to the vice chairman of payments giant Mastercard.

“You have to start focusing on how does the human get involved, and that’s going to be through having a digital identity,” Ann Cairns told CNBC’s Karen Tso on Monday at the Mobile World Congress in Barcelona.

Credit Karma’s Dana Marineau: ‘We want users to think of us as more than just free credit scores’ (Tearsheet), Rated: A

Today’s marketer on the hot seat is Dana Marineau, Credit Karma’s vice president of brand, creative and communications. People love Credit Karma for its free credit scores, but the company provides so many other free tools. Dana’s team is tasked with elevating the brand beyond just free credit scores, as a place to get help with financial decisions and achieve financial progress. She brings a 15 year experience at EA, working on many of the top sports games in the business.

Why this small bank created a separate, digital-first brand (American Banker), Rated: AAA

When Midwest BankCentre, a community bank in St. Louis, launched the digital-first Rising Bank in February, it joined the ranks of other financial companies —generally large players such as JPMorgan Chase, Wells Fargo and MUFG Union Bank — that have created separate, digital-only brands. Unlike them, the $1.9 billion-asset Midwest hopes to keep a community bank feel at the internet-only unit.

The Future Is Plastic: Fintech Unicorn Brex Launches New Credit Card For E-Commerce Merchants (Forbes), Rated: A

Brex, a San Francisco credit card startup that reached a valuation of $1.1 billion late last year, 22 months after its founding, is launching its second product, a physical credit card for e-commerce companies. Its first card, targeted to venture-backed tech startups, has attracted more than 3,000 customers by providing higher spending limits and simplifying the application process.

YieldStreet raises $ 62M to democratise alternative investments in shipping, real estate and more (TechCrunch), Rated: A

YieldStreet — which provides a platform for making alternative investments in areas like real estate, marine/shipping, legal finance, commercial loans and other opportunities that in the past were only open to institutional investors — is today announcing that it has raised $62 million in a Series B round of funding.

Guaranteed Rate Leads Mortgage Executive Magazine’s List of Top Loan Originators in America (GlobeNewswire), Rated: A

For the seventh consecutive year, Guaranteed Rate has the most loan originators of any lender on Mortgage Executive Magazine’s annual list of the “Top 200 Mortgage Originators in America,” including the number one originator.

Guaranteed Rate led the way with 36 originators ranking within Mortgage Executive Magazine’s Top 200, including three of the top five. Shant Banosian of Boston, Mass., was named the nation’s 2018 Top Originator by funding $536 Million in total loan volume.

Americans Focus On Debt Management But Lose Focus On Retirement Savings (Forbes), Rated: A

Our minds are wired to prioritize the near-term over the long-term. We shouldn’t be surprised that a new survey by 

U.S. banking regulator fights NY lawsuit over fintech charters (Reuters), Rated: A

The U.S. Office of the Comptroller of the Currency has asked a Manhattan federal court to dismiss a lawsuit by a New York financial regulator over its plan to issue banking charters to fintech companies, saying the lawsuit is premature.

Blockchain and data protection: the main concerns (JDSupra), Rated: A

Blockchain’s usage is no longer limited to digital crypto currencies, as blockchain databases may be deployed in innumerable circumstances and scenarios, including, for instance, within the financial services and insurance sectors for money transfer, peer-to-peer lending and transfer of securities, as well as automatic execution of contracts.

LoanStreet positions for growth with new hires (LoanStreet Email), Rated: B

After the launch of LoanStreet’s commercial lending product and the announcement of their $6.5 million funding round, LoanStreet – the first fully-integrated platform that streamlines the process of sharing, managing, and originating loans – has appointed three credit union industry veterans to support LoanStreet’s aggressive growth.

These new hires include Mike Doherty, Managing Director and Head of Credit Union Sales; Tony Harter, Business Development Director; and Joe Parvin, Business Development Director.

White Oak Business Capital Hires Carol Bader Apicella to Expand Northeast and Mid-Atlantic Markets (GlobeNewswire), Rated: B

White Oak Business Capital, Inc. (“WOBC”), an affiliate of White Oak Global Advisors, LLC, has announced that Carol Apicella has joined the firm as Senior Vice President and Senior Business Development Officer. Apicella will be responsible for expanding the firm’s markets in the Northeast and Mid-Atlantic.

United Kingdom

Funding Circle fund adds firepower for buyback strategy (AltFi), Rated: AAA

The portfolio, an investment trust, of loans originated by Funding Circle lowered its dividend expectations amid lower projected returns last year prompting a discount to its net asset value.

Following a move to a more than 10 per cent discount last year it started share buybacks in a bid to narrow its discount. It has now made additional capital available from its free cash flow to be deployed into share buybacks, the fund said yesterday.

Orca Innovative Finance ISA Launches, Enables Diversified P2P Investment (Crowdfund Insider), Rated: AAA

Orca Money is finally launching its long-anticipated Innovative Finance ISA (IFISA). Orca’s spin on the savings vehicle allows investors to spread their money across multiple peer-to-peer lenders (P2P) thus providing a heightened degree of diversification. Additionally, Orca Money conducts due diligence on behalf of IFISA investors.

Currently, the Orca IFISA allows access to 5 P2P platforms: Lending Works, Assetz Capital, Landbay, Octopus Choice and Lending Crowd.

Experian, ClearScore scrap merger plans (Reuters), Rated: A

Experian Plc, the world’s biggest credit data firm, said on Wednesday that it had agreed with rival ClearScore to abandon their proposed merger, after Britain’s competition watchdog indicated that it may block the deal.

NatWest launches account aggregation as Open Banking takes hold (AltFi), Rated: A

It’s been a long time coming, but Open Banking is finally spreading through the traditional banking industry, this week with the launch of account aggregation for NatWest customers.

The RBS subsidiary becomes the UK’s 4th bank to let customers connect rival current accounts.

Will Open Banking boom in 2019? (AltFi), Rated: A

It has been over a year since the Open Banking UK initiative under the Competition and Markets Authority order and Second Payment Services Directive (PSD2) was launched and has become one of the industry’s biggest technology and regulatory shake ups in recent years. It is no surprise that the initiative’s first year has seen a relatively low consumer uptake. This has been coupled with reports that consumers’ knowledge of the scheme appears to be markedly low.

Aave Launches Platform to Pay Bills Using Crypto (Finance Magnates), Rated: A

In an attempt to bring crypto closer to the mainstream, the London-based fintech startup has announced the launch of Aave Pay.

The app will allow its users to pay their utility bills using digital coins by converting crypto into fiat in real-time using bank transfer facility. The company is claiming that the platform can be used to business expenses as well including employee salaries, income taxes, and other commercial or corporate expenses.

Investing in crowdfunded development projects – what you need to know (Property Investor Today), Rated: A

You can invest in peer to peer development loans for the short term or in an Innovative Finance ISA for a longer commitment period, but with the potential to earn tax free returns.

By comparison, a peer to peer lending platform with its own development company will have much more control over its projects and be able to give you more detailed and trustworthy updates.

Failed Lender Reaching ‘From Beyond The Grave,’ MPs Warn (Law360), Rated: A

Failed payday lender Wonga is damaging the finances of thousands of customers “from beyond the grave” because they cannot seek redress for allegedly missold loans as the company was not covered…

International

Some Bankers Are Doing Even Worse Than in 2009 (The Washington Post), Rated: AAA

It may not feel like it, but some corners of banking are suffering as badly as they did during the depths of the financial crisis. Global volumes of initial public offerings and share placings in January and February have been nearly 60 percent lower than in the same period last year. The numbers are worse than the first two months of 2009. If activity doesn’t pick up soon, it would be worrying evidence of the fragility of investor sentiment.

The hope is that the lull is temporary, and technical. The government shutdown in Washington has gummed up U.S. IPOs. Uncertainty over the U.K.’s future relationship with Europe just drags on. And the December stock-market wobble probably killed off deals that were being planned for the window that traditionally opens between January and the start of the full-year earnings season in late February.

Marketplace Lending – A Growing and Dynamic Global Market (DBRS Email), Rated: AAA

I wanted to share with you a new joint report from our U.S. and European structured finance teams. The new report, attached to this email, analyzes the growth of the marketplace lending market around the globe.

The commentary includes the following topics:

— The evolution in finance, from traditional banking to FinTech.
— FinTech’s influence on marketplace lending around the globe.
— Growth hurdles.
— Securitization considerations.

Bank on it: How Enova’s software expands credit access worldwide (Built in Chicago), Rated: A

Not all credit histories are created equal.

That’s the case for a large part of the world’s population who can’t get access to a loan from a traditional credit provider — like a bank — creating a world in which the hardest working people don’t always get access to the credit they need. Enova, however, believes it has a solution. The fintech company draws on the power of machine learning and data to offer products that expand access to credit for consumers and small businesses.

Blossom Capital scores $ 85m from Robinhood and Funding Circle backers (AltFi), Rated: A

Blossom Capital, which has already backed five startups including rental marketplace Fat Lama, today raised $85m which it will use to lead Series A rounds of between $5m and $10m in Europe.

Eight Simple Ways to Earn Bitcoin Online Legally (The Crypto Updates), Rated: B

Earn Bitcoins as the interest payments: If you have earned some Bitcoins already, you can put the Bitcoins to earn for you. Lend them out at particular interest rate. You can lend the Bitcoins directly to someone known at a greed interest rate and repayment period. You need to assess trustworthiness of borrower. Peer to peer Bitcoin lending is another way to let the earned Bitcoins earn for you. There are many peer-to-peer lending websites where the borrowers post the borrowing requests. Over these websites, you can act as a lender. It is also possible to fund the small portion of numbers of loans to reduce the risk.

European Union

Grid Finance suspends taking investments below € 100,000 (Irish Times), Rated: AAA

One of the largest providers of peer-to-peer loans in the State has shut down a key part of its business aimed at smaller investors, blaming an absence of regulation in the crowdfunding space.

Grid Finance, which is backed by Enterprise Ireland, wrote to holders of its “Brick” accounts – that facilitate the investment of up to €100,000 – in recent days stating that it would withdraw the offering from the marketplace.

China

Dragon Victory International: Exposure To The Chinese Crowdfunding Market At A Regulatory-Driven Discount (Seeking Alpha), Rated: AAA

In recent years as China winds down its industrial and manufacturing powerhouse growth, it’s looking to other developed nations to determine which platforms it should invest in and pave the way to sustained economic growth. As most other major developed nations have done over the past century, financial services and engineering have been a very profitable platform and companies in China are quick to launch their own services to capitalize on the triple-digit growth in online financial services exhibited since 2003.

Similar to Hexindai (HX), which I’ve previously covered as a leading online lender which is capitalizing on the middle class appetite for debt to finance their lives and vacations, Dragon Victory International Limited (LYL) is taking on the crowdfunding segment in the People’s Republic of China. Similar to countless other platforms around the world, the company’s services are around financing new companies and capitalizing entrepreneurs through public funding and they already have over 4.5M users who use their services, a number nearly doubling each year.

Source: Dragon Victory International F-1 filings

China Fintech Today: The P2P Boom Is Truly Over (SupChina), Rated: A

This year, the government has continued to lead a reorganization of the industry:

  • More companies will die: As of February 17, only 60 percent of online lending institutions had disclosed their operational information for January 2019, including five problematic platforms.
  • However, the current asset quality of the online lending industry has improved significantly according the data from firms that did report.
  • As of the end of January 2019, the accumulated amount of the online P2P online loan industry was about 7.78 trillion yuan ($1.16 trillion). The total loan amount in January was 91.4 billion yuan ($13.61 billion), down 55.1 percent year-on-year and down 1.3 percent from the previous month.
  • Further consolidation of industry players is certain. Some experts quoted in media reports predict that the scale of future online loans will continue to shrink because of regulation.
  • Some listed companies, such as Aoma Electric and Panda Financial Companies, have abandoned their P2P businesses.
  • Aoma Electric issued a letter of concern to the Shenzhen Stock Exchange on February 14, attributing the decision to the broader economic slowdown, and a high number of overdue loans.
  • Panda Gold Control in 2018 was also dragged down by its P2P business, and expects a net loss of 41.16 million ($6.13 million) to 57.63 million yuan ($8.58  million) in 2018. Faced with the uncertainty of the P2P sector, Panda Gold Control chose to divest.

A Crypto Project That Raised $ 20 Million Is Caught Faking Its Founding Team (CoinDesk), Rated: A

Launched on Dec. 2, BHB claims to offer an ethereum-based solution for peer-to-peer lending, but by Jan. 18, local media reports were already accusing the project of operating an illegal pyramid scheme. Now, CoinDesk is able to reveal inconsistencies in the information provided about its founding team that further suggest something may be amiss at the China-based project.

However, the image of Bobby White used in BHB’s marketing materials is identical to that of an economics professor at China’s Tsinghua University named Alexander White. Meanwhile, the image of Gregory Moss is the same as one used by a philosophy professor at The Chinese University of Hong Kong, who is also named Gregory Moss.

Tencent-backed brokerage firm downsizes US IPO amid weak market demand (Technode), Rated: A

Tencent-backed online brokerage firm Futu Securities has set the terms for its US initial public offering (IPO) to raise up to $130 million, which will value the company at more than $1 billion. The company previously set its target at as high as $300 million when it filed for the US listing in December.

Chinese tech behemoth, Tencent, owns over 38% of the company, has shown interest in purchasing up to 25% of the new shares issued.

Australia

How should accountants talk to clients about fintechs? (In the Black), Rated: A

Like the ombudsman’s office, ASIC has also made information available to educate consumers and advisers, including on its MoneySmart Borrowing Basics and Peer-to-Peer Lending sites.

Is any flexibility possible, Shiel wonders, with a peer-to-peer lending model in which the borrower likely doesn’t know who is providing the funds?

India

LenDenClub crosses 1,00,000 borrowers and lenders milestone (News Barons), Rated: AAA

LenDenClub, one of India’s fastest growing peer-to-peer (P2P) lending platforms, recently crossed an important landmark with more than 1,00,000 borrowers and lenders on its platform. The breakdown of borrowers to lenders is 83,300 and 16700, respectively. The company crossed this milestone by keeping up with latest market trends, and saw an increase in the use of its product InstaMoney, which was launched in June 2018.

Why Do Fintech Startups and Investors See a Huge Potential in Lending? (Entrepreneur), Rated: AAA

Today, thanks to the ongoing digitization, borrowing has become as easy as it can get in India. For contrast, all it takes now is the touch of a few buttons, answers to a few verification-related questions, and anyone can receive a loan in a matter of hours or days, if not minutes. And all of this is without any collateral and while enjoying the comfort of your home. Now, compare this with taking a day off to go to the bank, doing extensive paperwork, visiting frequently to check the progress of your loan application, and ultimately, getting your application rejected because of the loan officer’s misjudgement. All while wasting two months of time in the constant to and fro and taking multiple days off from your office.

It is beyond doubt that the advent of fintech startups has altered the game of lending in India. It has become both simpler and convenient to borrow using their revolutionary approaches driven by state-of-the-art technologies. Currently, more than 1,500 fintech startups (of all shapes and sizes) are catering to the Indian market, and more than half of these startups have been launched over the last 3 years. This gives us a clear picture of how lucrative the sector is becoming for our startup ecosystem. But what is essentially fuelling this trend? Let’s find out.

Banning of UDS to benefit P2P Lending Industry (Inventiva), Rated: A

The latest ordinance of the Banning of Unregulated Deposits (UDS) 2019, was passed by the government to provide a comprehensive mechanism to ban UDS as well as to protect the interest of depositors. This is in line with the Reserve Bank of India’s guidelines on the NBFC-P2P sector, issued in October 2017 to regulate the unorganized lending business in the country.

Asia

Singapore fintech investments rose two-fold to US$ 365m in 2018 (SBR.com.sg), Rated: AAA

US$102.2m of the total funds raised went to lending fintech companies such as the homegrown Funding Societies.

Fintech investments in Singapore more than doubled to US$365m in 2018 from US$180m in 2017, putting the country amongst the top five fintech markets by funds raised last year in Asia Pacific, behind China, India, Australia and Japan, according to Accenture’s analysis of CB Insights data. The number of deals in the country rose to 71 from 61 in 2017, making it the third busiest market in the region, behind only China and India.

Source:

Validus Capital raises $ 15m for SME financing (Fintech Futures), Rated: A

Validus Capital, a Singapore-based SME financing platform, has raised SGD 20.5 million ($15.2 million) in a Series B funding round, led by FMO, a Dutch public-private development bank.

Latin America

PayPal expands its small business loans initiative to Mexico (Leaprate), Rated: AAA

Online payment giant PayPal launched its Working Capital initiative in 2013 as an alternative method for business to access working capital much faster than through traditional means. Many small and medium-sized business (SMB) clients embraced the program and since then the company has advanced more than $6 billion in loans to over 170,000 businesses in the UK, US, Germany and Australia.

PayPal also recently revealed that it has partnered with Konfio, a Mexican online lender that utilizes unconventional data sources to facilitate fast credit assessments, in a deal that will allow PayPal to extend its Business loan and working capital programs to Mexican businesses.

ID Finance eyes ‘pivotal moment’ for Latam fintech as revenue in region climbs 403% (Fintech Finance), Rated: A

ID Finance, the fintech company operating in Europe and Latin America, saw revenue of $49m in 2018. This represents growth of 236% for the business, which was formally separated from its operations in Russia and CIS region last year.

The company is enjoying particularly strong growth in Latam, one of the world’s fastest growing markets for fintech adoption thanks to high mobile penetration and a sizeable underbanked population – according to the World Bank 61% of Mexico’s population is excluded from the traditional banking system, while 40% of Brazil’s 207m population are blacklisted. The company now has 141 employees in Latam and saw revenue growth of 403% in the region last year.

Challenger bank N26 expands to Brazil (Fintech Futures), Rated: A

Germany-based mobile challenger bank N26 is powering on yet again as it has revealed its plans to expand to Brazil.

Africa

How FinTech Companies Inspire Africa With Mobile Technology (PYMNTS), Rated: AAA

With the potential for rapid growth and job creation, FinTech firms in Africa have caught the attention of global investors. According to the London Stock Exchange Group’s 2019 “Companies to Inspire Africa” report, which highlights these firms, the FinTech sector has the second highest growth rate representation of technology and telecoms as well as financial services. As it stands, companies in this space represent more than a quarter of 360 featured firms from 32 different countries. Pan-African payments firm Cellulant is among the companies that appeared in the first and second editions of the report.

Authors:

George Popescu
Allen Taylor

The post Thursday February 28 2019, Weekly News Digest appeared first on Lending Times.

Thursday February 21 2019, Weekly News Digest

household debt

News Comments Today’s main news: SoFi launches SoFi Invest. LendingClub forecasts bigger-than-expected Q1 loss. RateSetter ISA exceeds first-year expectations. Zopa report reveals 1 in 3 brits don’t understand Cash ISA Rate. October surpasses 100M GBP in loan repayments. Today’s main analysis: LendingClub 2018 results and 2019 guidance. Today’s thought-provoking articles: The highest seriously delinquent auto loans ever. Personal loans could […]

The post Thursday February 21 2019, Weekly News Digest appeared first on Lending Times.

household debt

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi launches SoFi Invest and eyes additional lending products (Business Insider), Rated: AAA

US-based online personal money management startup Social Finance (SoFi) has launched an investment product, dubbed SoFi Invest, offering both active and automated investing options at no fees, while it plans to offer additional lending products, perBloomberg, citing a company letter to investors.

SoFi Invest is already live, but the company aims to further grow and develop its related offerings this year.

Source: Business Insider Intelligence

SoFi Now Offering No-Fee Brokerage for Stock and ETF Trades (Think Advisor), Rated: A

According to Bloomberg, which obtained a copy of a letter CEO Anthony Noto wrote investors in the fourth quarter, SoFi Invest had “released an alpha version” of its new brokerage platform inviting employees and select members to “buy and sell individual stocks and ETFs with the tap of a button.”  That brokerage platform is now available to anyone using the app, for no fee.

Investors can currently trade only individual stocks and ETFs on the platform; individual bonds and mutual funds are expected to be added in the future.

LendingClub forecasts bigger-than-expected first-quarter loss (WSAU), Rated: AAA

Online lender LendingClub Corp forecast a bigger-than-expected first-quarter loss on Tuesday, and revenue that missed Wall Street estimates, sending its shares down 5 percent in after-market trading.

For the first quarter, the company expects net revenue between $162 million and $172 million, below analysts’ estimates of $181.2 million, according to IBES data from Refinitiv.

LendingClub also forecast a first-quarter loss between $20 million and $15 million, compared to Wall Street estimates of a loss of $5.14 million.

LendingClub Reports 2018 Results and Guidance for 2019 (Lend Academy), Rated: AAA

Earnings season is in full swing and today LendingClub announced their results for the 2018 year. The numbers were quite strong in most areas with the company originating $10.9 billion in new loans in 2018, up 21% year over year and a new high water work in yearly originations. For Q4 loan originations were $2.87 billion down slightly from the previous quarter but up 18% year over year.

Source: LendingClub

They lost $128 million in 2018 with a $13 million loss in Q4.

Source: LendingClub

Brismo partners with LendingClub to create ‘industry standard’ performance metrics (PR Newswire), Rated: A

Brismo, the leading international provider of lending performance data, has today announced that standardized performance metrics are available representing the performance of loans made available through LendingClub*.

Lending Performance Analytics

Brismo’s analysis includes a complete historic track record in a format that is free from distortions relating to inconsistent facilitation growth rates or default profiles.

Functions available include:

  • Gross facilitation, net lending, change in outstanding principal
  • Outbound lending rates and loan term
  • Late payments including transition matrices, defaults, recoveries, recovery performance, and net loss
  • Historic PDs and LGDs
  • Net return, loss coverage and risk adjusted return
  • Cohort analysis including return projections
  • All analysis can be segmented by facilitator, risk band, asset type etc.

Highest Auto Delinquencies (PeerIQ), Rated: AAA

The Fed’s latest report on Household Debt and Credit showed that total household debt increased by $32 Bn (0.2%) to $13.54 Tn in 4Q2018, marking the 18th consecutive quarter of growth. Total debt is now $869 Bn higher than its previous peak, although it remains below its peak on a per-capita basis.

The report also showed that more than 7 Mn auto loans are delinquent for more than 90 days. This is the highest number of seriously delinquent auto loans ever and is driven mainly by subprime borrowers. Over 8% of subprime borrowers are seriously delinquent on their auto loans, but this percentage is still well below its peak of 9.7% seen in 2010.

Source: PeerIQ

In FinTech financing news, Nav a small-business lending marketplace, raised $45 Mn from GS Principal Strategic Investments among others. Nav will use the funds to expand its platform and to support more funding partners.

CommonBond, an online student loan refinancer, has raised a $750 Mn credit line from GS, Citi among others. CommonBond will use this credit facility to expand its lending operations.

Personal Loans May Increase Credit Scores of Most Borrowers (LendingTree), Rated: AAA

Americans are increasingly turning to personal loans as another option for their ongoing debt and credit needs. There are many uses for personal loans, and the most prominent are to consolidate existing debt and pay down credit cards, which often carry higher interest rates.

Key findings

  • About 62% of borrowers see their credit scores go up the month after they take out a personal loan.
  • After 12 months, around 45% of borrowers still have higher scores than they did in the month of loan origination.
  • People with lower scores are more likely to see a credit score bump: 68% of those who started with scores under 620 saw their scores increase in one month, 71% had higher scores after three and six months, and 58% had higher scores after a year.
  • People with scores under 620 saw a 20 point, or 3.4%, boost after one month. They also saw a 10 point, or 1.8%, boost after 12 months, on average.
  • On the other end of the spectrum, borrowers who started with higher scores are less likely to see a credit score bump. 57% of people with scores of 750 or higher see their scores increase after a month, and about 39% have higher scores after a year.

FinTechs Continue to Drive Personal Loan Growth (GlobeNewswire), Rated: AAA

The FinTech revolution has propelled unsecured personal loans to another record-breaking quarter. TransUnion’s (NYSE: TRU) Q4 2018 Industry Insights Reportfound that personal loan balances increased $21 billion in the last year to close 2018 at a record high of $138 billion. Much of this growth was driven by online loans originated by FinTechs.

FinTech loans now comprise 38% of all unsecured personal loan balances, the largest market share compared to banks, credit unions and traditional finance companies. Five years ago, FinTechs accounted for just 5% of outstanding balances. As a result of FinTech entry to the market, bank balance share decreased to 28% from 40% in 2013, while credit union share has declined from 31% to 21% during this time.

TransUnion also found that FinTechs are competitive with banks, with both lenders issuing loans averaging in the $10,000 range, compared to $5,300 for credit unions. Across all risk tiers and lender types, the average unsecured personal loan debt per borrower was $8,402 as of Q4 2018.

Source: TransUnion

Personal loan originations increased 22% during Q3 2018, marking the fourth consecutive quarter of 20%+ annual origination increases. While the subprime risk tier grew the fastest, prime and above originations (those with a VantageScore 3.0 of 661 or higher) represented 36% of all originations. More than 19 million consumers now have a personal loan ­product, an increase of two million from a year earlier in Q4 2017 and the highest level ever observed.

Source: TransUnion

LoanStreet’s New Commercial Lending Solution Combines Automation and Networking for Financial Institutions (PR Newswire), Rated: A

LoanStreet Inc., the first fully integrated platform that streamlines the process of sharing, managing and originating loans, now offers a new, powerful commercial loan origination and administration solution for any size financial institution, loan or deal volume. LoanStreet uniquely combines the power of networking financial institutions together with world-class lending technology that automates administrative tasks to drive growth, diversify risk, and enable lenders to better serve their customers.

Leading Small Business Lending into a Digital and Data Driven Age (LendIt), Rated: A

Small business lending contributed to 24% of the loans originated by US Banks in 2018, accounting for 600 billion last year. Small business lending by large banks remains in legacy mode with deeply entrenched manual processes, a siloed experience and a lack of customization to help meet the unique needs of small business owners.

How a $ 1.3 Billion Institution Launched Its Own Digital Bank (The Financial Brand), Rated: AAA

When IncredibleBank, the online banking division of Wisconsin-based River Valley Bank, made the list of “Top 10 Online Banks”  at GoBankingRates.com, it found itself in good company, right alongside Ally Bank, CIT Bank, Discover Bank, and Synchrony.

While not the only community bank on the list, it’s a significant accomplishment for an institution with only $1.3 billion in assets. And equally noteworthy, IncredibleBank is the only digital-first bank offering loans for luxury RVs. These motor coaches — the ones the size of a tour bus with slide-outs that turn them into 1,200 square foot homes — run upwards of $2 million.

The challenger banks catering to gig-economy workers (American Banker), Rated: AAA

Qwil

Reinsch’s startup, Qwil, focuses on providing working capital for the freelancer who has trouble, like he did, getting paid on time.

Source: American Banker

Qwil’s underwriting technology assesses the payor’s likelihood of paying. It captures information about the approval status of the invoice: Is it definitively approved, is it likely to be approved or is it simply booked and not approved? It conducts identity verification and fraud checks on each freelancer. Qwil charges a flat fee for the advance, such as 1% of the amount. No interest rate or late fees are charged. And it never goes after the freelancer or small- business person to collect.

Oxygen

Online lenders like OnDeck, Kabbage, Fundbox and Bluevine all look at accounting software data and bank account data to analyze the cash flow of and qualify small business applicants. But the freelancer graphic designer working in a Starbucks or contract copy writer can’t get this type of loan, Ahmed said.

Oxygen’s banking and lending services are bundled into a membership with a flat monthly fee of $29.99.

Ahmed wouldn’t say how many users Oxygen has. The company, which started in a Y Combinator incubator, has been in production since September has been growing users at an 80% monthly rate.

Cogni

Cogni will offer a checking account and debit card, as well as up to 12% cash back at restaurants and retailers. It will provide “curated financial and lifestyle services” in an app designed for millennials, freelancers and side hustlers.

Joust

This month, Joust started a partnership with the Freelancers Union, which has 425,000 members. In a survey, the union found that 71% of its members have trouble getting paid. It also announced an Android version of its app (it had only iOS before).

For a 1% fee it offers a guarantee the payment will be made within 30 days. For a 6% fee it will instantly fund the invoice. Users can also take out PayArmour loans when they are out of work. Eventually Joust plans to provide gap financing for those in-between times.

When Considering Banks, New Survey Finds That Millennials Prefer Technology To Human Touch (Marqeta Email), Rated: A

Millennials are unattached to traditional banks, with only 17% of them expressing firm commitment to their current banking provider,  according to new survey data from Marqeta, whose advanced payments infrastructure and open-API platform has pioneered a new standard for modern card issuing. In this research, Millennials (18-34 year olds) were 50% less likely than Baby Boomers (50-65 years old) to say that they couldn’t ever imagine wanting to change their banks.

Marqeta’s research found:

  • Only 1-in-6 Millennials said they couldn’t imagine ever wanting to change from their current bank.
  • 58% of Millennials would consider banking with Amazon, Facebook or Google if these tech giants enter the banking space.
  • 48% of Millennials said they’d consider moving to an independent digital-only bank.

Millennials Are Digital Banking Early Adopters

More than half of Americans aged 18-34 (53%) have used mobile wallets to complete a purchase in-store or on their mobile phone. That’s higher than Americans aged 35-50 (39%) and more than double those aged 51-65 (22%).

It’s also noteworthy that:

  • More than half of Millennials (52%) said they were comfortable using TouchID and FaceID to authorize mobile wallet payments — almost double the number of Baby Boomers (29%) who said the same.
  • More than twice as many Millennials (57%) than Baby Boomers (27%) said that they have used peer-to-peer banking apps like Square Cash or Venmo.
  • Millennials (49%) were twice as likely as Baby Boomers (20%) to pay someone back using a peer-to-peer banking app than a physical currency like cash or check.

Banking Apps Are More Valuable Than Tellers to Millennials

When asked about what the most important service their bank provided was, Millennials reflected much different attitudes than older Americans: Millennials were twice as likely as Baby Boomers to list a mobile app as most important (27% v 14 %), while Baby Boomers were twice as likely to list in person presence (20% v 11%).

Millennials are also abandoning old-fashioned payment methods like checks en masse, with almost half (48%) saying that they couldn’t remember the last time they wrote a check for something other than utilities and rent.

Banks Set To Invest In Legacy Systems To Combat Challenger Bank Threat (Fintech Finance), Rated: A

More than three-quarters (80%) of bankers believe challenger banks are an increased threat to their business, while almost one-third (30%) believe they will be the single most disruptive threat in 2019. The survey, commissioned by fintech provider Fraedom, found that in response the challenger bank threat, bankers expect their organisations to invest heavily in updating legacy systems (44%) and new technology (26%) in 2019.

With investing in new technology high on the agenda for commercial banks, the survey found that over half (53%) of respondents believe AI and Machine Learning will be the technologies to have the biggest impact on commercial banking in 2019.

Atlantic Capital Bank Launches Fintech Partnership with Self Lender (Nasdaq), Rated: A

Atlantic Capital (NASDAQ:ACBI) announces its partnership with Self Lender, a leading Fintech company offering consumers a way to build their credit while saving money. Atlantic Capital provides innovative financial technology companies a banking partner that has significant operational expertise and processing scale to meet the demands of a rapidly growing national client base.  The Self Lender and Atlantic Capital partnership helps efficiently deliver the credit builder account to thousands of consumers across the United States.

Impact of Intelligent Technologies on the Finance Industry (CIO Applications), Rated: A

Source: CIO Applications

Consolidated Analytics Taps Industry Finance Leader Mike Jones as Chief Financial Officer to Facilitate Aggressive Growth and Transformation (PR Newswire), Rated: B

Consolidated Analytics, a one-stop provider of property valuation, asset management, due diligence, fulfillment and advisory services for the real estate finance industry, today announced the appointment of Mike Jones as Chief Financial Officer (CFO). In this role, Jones will be responsible for developing and implementing financial strategies that will support the company’s overarching M&A integration strategy and drive corporate transformation initiatives.

United Kingdom

RateSetter Reported ISA Exceeded Expectation in First Year By Attracting £175 Million of Subscriptions (Crowdfund Insider), Rated: AAA

UK-based peer-to-peer lender RateSetter recently announced its ISA has exceeded expectations in its first year, having attracted £175 million of subscriptions, and currently accounts for one-fifth of the platform’s £830 million funds under management. RateSetter unveiled its ISA in February 2018. It allows investments in peer-to-peer loans to be included in a tax-free ISA wrapper up to an investor’s £20,000 annual ISA allowance.

Zopa’s Latest Report Reveals 1 in 3 Brits in the Dark on Cash ISA Rate (Crowdfund Insider), Rated: AAA

According to Zopa, the research revealed that 1 in 3 British savers (30%) had no idea what interest they’re earning on their Cash ISA and there is a vast difference of knowledge by age with an alarming 42% of people aged between 25 to 44 being in the dark over the rate of interest they were earning on their Cash ISA, in contrast to 21% of over 55s. The research then noted that Generation Z’s were only slightly more aware than Millennials with 39% not knowing their rate of interest.

Is your money safe in an IFISA? (P2P Finance News), Rated: A

THE INNOVATIVE Finance ISA (IFISA) is starting to take off after a slow start – in the last tax year, subscriptions rose more than 700 per cent – but potential investors may still be unsure about the risks involved.

Money put into peer-to-peer loans – with or without the IFISA wrapper – is not covered by the Financial Services Compensation Scheme (FSCS).

Revolut Launches New Business Mobile App (Crowdfund Insider), Rated: A

Digital bank Revolut announced on Tuesday the launch of its new business mobile app. This news comes nearly one year after Revolut debuted its Revolut for Business. Revolut reported that through the mobile app, users may do the following:

  • Track corporate card spending in real-time
  • View card details and PIN on the go
  • Freeze or unfreeze card if it’s misplaced
  • Receive instant spending notifications after every card payment

Should bank-style stress tests for P2P lenders reassure investors? (P2P Finance News), Rated: A

Trade body the Peer-to-Peer Finance Association (P2PFA) requires its platform members to carry out bank-style stress tests on their loan portfolios, but how much confidence should P2P investors  have in these models if  the cycle turns?

P2PFA member Funding Circle has claimed its loanbook would hold up in a recession, after subjecting itself to the toughest Bank of England stress tests. The P2P business lender has said it could still deliver a three to five per cent return to investors in a downturn.

Leasing Foundation to host asset finance technology debates (Verdict), Rated: B

The newly formed Innovation Initiative from the Leasing Foundation is holding a series of breakfast debates this year to explore the asset finance industry’s relationship to technology.

The first event will feature James Alexander, co-founder of P2P lending company Zopa, as keynote speaker and will take place on 13 March from 8am to 10am at Metro Bank in Holborn, London.

Strabane firm funding 55 new homes with £7m from peer-to-peer lender (Belfast Telegraph), Rated: B

The N&R Devine Group is in the process of building the properties, which will go on the market at prices between £105,000 and £189,000.

Twenty of the homes will be built in Cookstown, 25 in Coalisland and the remainder in Sion Mills.

The Strabane-based builder secured the funding for the developments from peer-to-peer lender Assetz Capital.

China

China’s online P2P lending industry is undergoing a massive shake out (technode), Rated: AAA

China’s peer-to-peer (P2P) lending industry is in turmoil. In recent months, authorities have ramped up regulatory oversight of the world’s largest P2P lending industry. Investors are losing confidence at their stakes and pulling their funds, diminishing operators’ liquidity; many of them are facing insolvency.

This week, Chinese police froze RMB 10 billion worth of assets owned by over 380 lenders in a large-scale investigation spanning 16 countries. Dubbed Operation Fox Hunt, the investigation has led to the arrest of 62 suspects implicated in P2P fraud since last June.

The total value of the loans managed by online crowdlenders has fallen to RMB 1 trillion. Prior to the clampdown, in 2015, the total P2P loan amount was RMB 1.25 trillion, according to Chinese media (in Chinese).

Source: wdzj.com

China’s Recession-Proof Economy Heads to a Stress Test (Bloomberg), Rated: A

The reason for the slowdown isn’t clear. Uncertainty over trade with the U.S. — including tariffs, but also export controls and investment restrictions –— could be a factor, especially as other countries show signs of wariness toward Chinese technology companies. Bad investments in real estate and infrastructure could be coming back to bite. A crash in the peer-to-peer lending industry might be contributing.

Source: Bloomberg
European Union

European Marketplace Lender October Surpasses €100 Million in Loan Repayment (Crowdfund Insider), Rated: AAA

October, the European lending marketplace formerly known as Lendix, announced on Wednesday it has surpassed €100 million in loan repayment.

The online lender reported that since its launch more than €250 million has been lent to European companies and nearly 40% of this amount has already been paid into the accounts of both individual and institutional lenders through monthly repayments. October then revealed that the lenders have already supported 570 projects for an average amount of €460,000.

Machine learning: Part of Europe’s consumer loans business (AltFi), Rated: A

Machine learning technologies are widely used to establish consumer credit scores in Europe, a new report confirmed.

Around 70 per cent of financial institutions across the continent say they already use these data technologies to build consumer score cards, which dictate lending, said a survey called, Credit Risk Management 2019 – How Do You Stack Up?

The average coverage rate of non-performing loans in Europe was 46 per cent in 2018, according to the survey.

5 Fashion E-commerce Trends Helping Retailers Build a Cult Following (Klarna), Rated: A

How can you get consumers as psyched about your brand as you are? Get inspired by these five fashion e-commerce trends that are powering more meaningful engagement.
International

UK-based GBG Acquires IDology in $ 300 Million All-Cash Deal (Finovate), Rated: AAA

Identity verification and fraud prevention specialist IDology has been acquired by U.K.-based identity data intelligence firm, GBG, for $300 million (£233 million) in cash.

The deal will give GBG broader reach into the North American market; in a statement, the company said 99% of IDology’s revenues come from the United States.

Are Peer-to-Peer Loans (P2P Loans) the Best Option for a Small Business? (ForexTV), Rated: A

One of the biggest issues that every entrepreneur will have to face at some point is finding financial backing. Money is going to be essential for your business launch, and there are a variety of methods for obtaining that much-needed financial support. One of the most popular solutions is Peer-to-Peer lending (P2P). This is a useful way of getting the money you need without going through the traditional route of obtaining interest only bank loans. Those banks loans can be slow and expensive, so does P2P offer a viable alternative option? Here’s the rundown of everything you need to know about P2P loans.

Australia

Payday loans increase as households pushed into risky credit from non-bank lenders (ABC.net), Rated: AAA

Debt-stressed home owners and renters are increasingly turning to alternative lenders offering so-called “payday” loans and consumer leases, as falling property prices plunge more households into negative equity and banks crack down on credit.

Asia

5 of Vietnam’s Top Funded Fintechs (Fintech News), Rated: AAA

Fintech development is accelerating in Vietnam with companies in the sector attracting US$117 million last year, the maximum funding in Vietnamese startups in 2018. Fintech surpassed e-commerce at US$104 million and other sectors, according to funding data by local accelerator Topica Founder Institute, showcasing the eagerness of investors to take part in Vietnam’s fintech opportunity.

Source: topicafi via Facebook

Tima – US$3M

Founded in 2015, Tima is a consumer financial marketplace and peer-to-peer (P2P) lending platform. The company has signed partnerships with financial institutions, including VietinBank and Nam A Bank, and claims to have disbursed about US$1.7 billion in loans to 2.8 million borrowers and over 30,000 lenders on its platform.

Tima claims to have raised a US$3 million Series B funding round in October at a near US$20 million valuation and recently began the process of raising a Series C investment round after hiring former LendingClub COO John Donovan to its board of directors.

Short Term Loans: For Your Quick Financial Concerns (US Updates), Rated: A

In such a case, availing instant Short Term loans from an online lender may help you in different ways.

No fear of bad credit scores – These loans are available irrespective of credit score status. The Short Term poor credit loans are in possible reach of the bad credit borrowers. You do not have to face rejections due to bad credits.

Authors:

George Popescu
Allen Taylor

The post Thursday February 21 2019, Weekly News Digest appeared first on Lending Times.

Thursday February 14 2019, Weekly News Digest

OnDeck revenues

News Comments Today’s main news: SoFi invests in Apex Clearing. Zopa chairman steps down. Ratesetter ISA tops 17M GBP in first year. Assetz Capital surpasses 700M GBP in lending. Revolut denies getting Lithuanian bank license to influence politics. Today’s main analysis: OnDeck’s Q4 earnings review. Today’s thought-provoking articles: What’s happening with auto loans. How Amazon controls small businesses with lending. Banks […]

The post Thursday February 14 2019, Weekly News Digest appeared first on Lending Times.

OnDeck revenues

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi held talks to acquire a fintech company backing some of the hottest robo advisors as it eyes expansion beyond its lending roots (Business Insider), Rated: AAA

OnDeck Q4 2018 Earnings Review (Lend Academy), Rated: AAA

The company achieved much of what they set to do in 2018 and posted another solid quarter as they rounded out the year. Q4 2018 net income came in at $14 million on gross revenues of $109.5 million. The company ended the year with a total of $27.7 million in net income. Below is a snapshot of their Q4 and 2018 full year highlights.

As of Q4 2018 the company still had $246 million of excess debt capacity.

BB&T and SunTrust merger; Tech in Bank Earnings (PeerIQ), Rated: AAA

The Fed’s January 2019 Senior Loan Officer Survey showed that banks tightened standards for commercial real estate (CRE) loans. Overall, banks tightened standards for credit card borrowers. However, lending standards for most categories of consumer loans and C&I loans remained unchanged. Banks also reported weaker demand for both business and household loans.

Source: Federal Reserve, PeerIQ

BB&T agreed to buy SunTrust for $28.2 Bn – the first major mega-bank deal in a decade. This deal will create the sixth-largest US retail bank. The M&A is supported by a constructive regulatory environment fostered by the OCC and CFPB, among others. The previous large acquisition was the JP Morgan acquisition of Bank One in 2004.

A major motivation for the deal was the ability of both banks to pool resources to build better digital offerings. SunTrust has a FinTech focused fund and has partnered with FinTech lenders to provide home improvement and small business loans. Banks are investing billions in digital tech spend to maintain relevance with customers that are increasingly eschewing bank branches for a seamless, online, full-service banking and wealth management customer experience.

Auto Loans in High Gear (Liberty Street Economics), Rated: AAA

Total household debt increased modestly, by $32 billion, in the fourth quarter of 2018, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Although household debt balances have been rising since mid-2013, their sluggish growth in the fourth quarter was mainly due to a flattening in the growth of mortgage balances. Auto loans, which have been climbing at a steady clip since 2011, increased by $9 billion, boosted by historically strong levels of newly originated loans. In fact, 2018 marked the highest level in the nineteen-year history of the loan origination data, with $584 billion in new auto loans and leases appearing on credit reports, up in nominal terms from 2017’s $569 billion. In this post, we take a closer look at the composition and performance of outstanding auto loan debt using the New York Fed’s Consumer Credit Panel (CCP), which is based on anonymized Equifax credit data and also the source for the Quarterly Report.

Amazon’s lending perpetuates the tech giant’s control over small businesses (Tearsheet), Rated: AAA

Amazon runs a marketplace with 2.5 million sellers, 24,000 of which had more than $1 million in sales on the platform in 2018. These sellers represent the potential customer base for the company’s lending model.

From this base of borrowers, Amazon has been able to reportedly lend over $1 billion in 2017, exceeding  $3 billion in total lending volume from its inception in 2011 to 2017. As for 2018, in its annual report, the company reported receivables outstanding from their lending program of $710 million, up from $692 million a year prior.

With access to detailed information and data on each seller, Amazon is able to mitigate lending risk substantially. Seller metrics only available to Amazon are utilized to determine a small business’s creditworthiness. Sales history, product offerings, customer service feedback, and shipping metrics enable Amazon’s lending business to have better insight into how to accurately issue loans. This allows Amazon to have an understanding of the health of each small business on its seller marketplace.

Goldman Sachs, Point72 and others invest $ 44 million in business credit startup Nav (Reuters), Rated: A

Nav, a startup that gives small businesses free access to their credit reports, said on Monday that it had raised $44 million from investors including Goldman Sachs Group Inc (GS.N), Point72 Ventures and Experian Ventures (EXPN.L).

Well Fargo Outage Points to Opportunity in Digital Banking (Lend Academy), Rated: A

Wells Fargo is still digging out from a PR disaster last week when the bank went offline for a large segment of customers due to a fire alarm triggered in a server facility in Minnesota. Customers could not access the mobile app, the website or ATMs. The incident has been used to highlight how big an opportunity there is for fintech firms or more nimble banks.

What the outage shows is that bank infrastructure is still stuck in the past, analysts rightly askedwhy Wells Fargo did not have the bank running on a cloud based system.

Digital bank Chime seemed to benefit from the news with more than 10,000 accounts being opened, a record 24 hour period for the startup.

new survey by Fraedom says 80 percent of banks believe challengers have impacted their business and 30 percent say they are their biggest threat.

Susan Ehrlich of Earnest (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is Susan Ehrlich, the CEO of Earnest. They are one of the largest student loan refinancers in the country and they also offer personal loans. Back in 2017 Earnest was acquired by the student loan servicer Navient which was itself spun out from Sallie Mae in 2014.

Government Shutdown Slows SBA Lending Volume, Approval Percentage Dipped Slightly in January (GlobeNewswire), Rated: A

Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals dropped a full percentage point from 49.9% in December 2018 to 48.9% in January.

Small business loan approval rates for big banks remained at a record high 27% in January 2019, according to the Biz2Credit Small Business Lending Index, which examines more than 1,000 small business credit applications made via its online lending platform.

Goldberg added that since reopening on January 28, her office has guaranteed more than 200 SBA loans worth $59.3 million.

Institutional lenders climbed up to 65.1 %, a jump of three-tenths of a percent from December’s mark of 64.8%.

Loan approval rates among alternative lenders rose from 56.6% in December to 57.3% in January, a jump of seven-tenths of a percent.

Citi rolls out new personal loan, online savings account (American Banker), Rated: A

Citigroup has launched a new consumer loan product and a new high-yielding savings-account as part of its rollout of its new digital bank.

The New York bank recently introduced Citi Flex Loan, which allows select existing Citi credit card customers to convert part of their credit lines to a loan with a fixed annual percentage rate, Mark Mason, Citigroup’s incoming chief financial officer, said Tuesday at an investor conference.

Square’s banking bid avoids backlash that doomed Walmart’s (American Banker), Rated: A

As Square seeks federal approval for a Utah industrial loan company, the fintech’s bid has so far avoided the kind of loud, public opposition that marred past ILC bids by higher-profile nonbanks.

Community banks still criticize the ILC charter as a banking loophole for non-financial firms, and the Independent Community Bankers of America opposes Square’s application.

Almost 60% of small business owners launch with less than $ 25,000 (CNBC), Rated: A

At least that’s according to entrepreneurs polled recently by Kabbage, a financial services and data platform serving small businesses. More than half of those polled, or 58 percent, started their businesses with less than $25,000. A third started with less than $5,000.

These numbers track with the latest data from the U.S. Census Bureau, which found that the median cost to start or acquire a company is about $25,000. It did find fewer businesses that begin with less than $25,000, only 46 percent, though that could be due to its inclusion of new owners who purchase existing operations as well owner starting from scratch.

LoanStreet Adds Commercial Lending Features for Financial Institutions (Crowdfund Insider), Rated: A

LoanStreet, an online platform that enables traditional finance like banks credit unions and other direct lenders to streamline the process of sharing, managing, and originating loans, has added new features. The SaaS platform now offers commercial loan origination and administration solution for any size financial institution, loan or deal volume.

LoanStreet’s new lending features include:

  • Built-in collaboration tools offering the flexibility to originate the loan best suited to your borrowers’ needs without sacrificing the ability to invite other financial institutions into the deal.
  • Single access point allowing all parties, including borrowers, lenders, attorneys and auditors, continuous and secure access to the same information.
  • Integrated platform from origination to maturity avoids re-keying, duplication of efforts and eliminates transfer errors and other critical information loss that occurs over time.
  • Efficient process management enabling online, borrower self-service of key administrative tasks — including online payment acceptance — while improving internal controls and information flow.
  • Automated reporting facilitating completion of all applicable regulatory and financial entries for you and every investor.

Velocity Investments sues woman for breach of contract, seeks ,500 in damages (Louisiana Record), Rated: A

Velocity Investments LLC, assignee of Lending Club Corporation, filed a complaint against Heather Darling on Feb. 12 in the 24th Judicial District Court. According to the lawsuit, the plaintiff states that the defendant has failed to pay off the balance of $22,495.23 plus interest on a contract between the parties. The defendant is accused of sums due on an open account and breach of contract.

Online Loan Companies Are No Easy Fix for Desperate Borrowers (Real Daily), Rated: A

Lending Club is currently the largest online lender in the world. By some estimates, Lending Club, which launched in 2007, facilitated anywhere between $35 billion and $55 billion in online loans in 2018.

Now as more financial institutions are beginning to extend loans, Americans are falling even deeper into debt again. Americans, as individuals and households, owed over $13 trillion dollars, collectively, in 2018.

Best News We’ve Heard All Day: More Single Women Own Homes Than Single Men (Pure Wow), Rated: A

Online loan marketplace LendingTree reports that on average, single women own around 22 percent of homes, while single men own less than 13 percent. The study states that the gender gap in housing across the country is particularly interesting “given the average woman in the U.S. only makes 80 percent of what the average man does.” Interesting, indeed. (We can think of another word for it.)

Thoma Bravo Is Buying Digital-Focused Mortgage Company (WSJ), Rated: A

Thoma Bravo LLC has agreed to buy mortgage software firm Ellie Mae Inc. for $3.7 billion, the latest indication that challenges in the home-lending market are spurring consolidation across the industry.

The transaction will give the private-equity firm control of a company whose technology has been used to help automate the closing of millions of home loans. Based in Pleasanton, Calif., Ellie Mae handles the technology that underpins the entire home-loan origination process, and its services are used in

INSIKT Changes Name to Aura (Business Wire), Rated: B

INSIKT, a mission-driven financial technology company that offers affordable loans to hard-working families, today announced that it has changed its name to Aura to expand its focus on creating greater financial health, independence and economic stability for millions in America.

Roostify Expands Advisory Board with Investment Virtuoso (Roostify), Rated: B

Roostify, the San Francisco-based digital lending platform provider, announced today the addition of financial services consultant Marshall Lux to its advisory board. Lux, a distinguished consultant, advisor and educator, brings more than 30 years’ experience in private equity to the rapidly expanding business and reflects Roostify’s commitment to perfecting a scalable operational model and further developing an ecosystem of technology partners and strategic alliances.

LendIt Fintech USA 2019 (LendIt), Rated: B

April 8-9
Moscone West
San Francisco

HIGHLIGHTED KEYNOTES

Sallie Krawcheck
CEO & Co-Founder
Ellevest

Rob Frohwein
CEO & Co-Founder
Kabbage

Steven Streit
CEO
Green Dot

Mike Cagney
Co-Founder
Figure

United Kingdom

Zopa chairman Giles Andrew to step down after 15 years (Independent), Rated: AAA

Zopa’s co-founder Giles Andrew is to step down as chairman after 15 years at Britain’s oldest peer-to-peer lender.

Zopa appoints Virgin veteran McCallum as chairman (Finextra), Rated: A

P2P lender Zopa has appointed former Virgin Management CEO Gordon McCallum as chairman as it gears up for the forthcoming launch of its new banking venture.

Ratesetter ISA tops £175m in first year (AltFi), Rated: AAA

The peer-to-peer lending platform said its ISA accounts for one-fifth of its £830m of funds under management.

Peer-to-peer lending platform Ratesetter said it has been “blown away” by the popularity of its first ISA product, which has hit £175m of subscriptions a year after launch.

Assetz Capital surpasses £700m lending mark (Bridging and Commercial), Rated: AAA

Assetz Capital has now lent over £700m to SMEs and property developers since launching in 2013.

The P2P lending platform has enjoyed significant progression, providing over £200m of funding in the eight months since it surpassed the £500m lending milestone in June 2018.

Former Assetz Capital founder launches fintech consultancy (AltFi), Rated: A

The co-founder of one of Europe’s largest peer-to-peer lenders has launched a fintech consultancy to help young firms “avoid some of the mistakes made by the early incumbents of the industry”.

Former Assetz Capital chief credit officer Andrew Holgate will lead a team of City veterans at consultancy Equitivo, which will help growing fintech firms raise cash, focus on strategy, trim operations and boost performance.

‘There is no magic bullet, people will get P2P over time’ (FT Adviser), Rated: A

The chief operating officer of peer-to-peer platform Relendex, Max Lehrain, has concerns about the Financial Conduct Authority’s crack down on P2P lenders and crowdfunding platforms.

UK challenger bank Starling secures £75m for European expansion (Fintech Futures), Rated: A

Life is sweet for UK challenger bank Starling as it has raised £75 million in funding for its expansion plans in Europe.

It got £60 million in a Series C round led by Merian Global Investors, including the Merian Chrysalis Investment Company.

Monzo Launches First 100 Business Accounts (Crowdfund Insider), Rated: A

UK challenger bank Monzo announced on Monday the launch of its first 100 business accounts. This news comes just a few months after Monzo revealed it was considered business banking, with Founder and CEO, Tom Blomfield, stating 2019 plans included business accounts. Speaking about the new accounts, Monzo reported:

Main Street banks say fintechs like Monzo, N26 and Chime pose the biggest disruptive threat to their businesses (Business Insider), Rated: A

Main Street banks believe upstarts like Monzo, N26 and Chime, known as challenger banks, pose a significant threat to their business, according to a recent survey.

Fraedom, a credit card specialist who works with companies like Visa, SunTrust, and Bank of Montreal, surveyed bankers on what some of the biggest impacts to their business will be in 2019. The vast majority (80%) believe challenger banks have an increased impact to their business, and 30% pegged the new competitors as the biggest disruptive threat to their business in 2019.

Tandem Bank boss calls for rate cut to kick-start UK economy (AltFi), Rated: A

Ricky Knox, chief executive of app-only lender Tandem Bank called on the central bank to cut rates to kick-start growth, as currently savers are locking away cash in specialist higher interest accounts.

Peer-to-Peer Lending and Brexit (4th Way email), Rated: A

Shares plunged and the pound plummeted to a 31-year low when the UK voted to leave the EU. More recently chaotic Brexit negotiations indicate a disorderly exit that could see investors avoid traditional investments in the UK, but what does this mean for peer-for-peer lending and should lenders be worried?

Bank and P2P lending is far less volatile than equity investing, because:

  • It is short-term orientated.
  • Lenders easily diversify widely across thousands of investments – loans – as opposed to a typical stock investor who diversifies across hundreds of shares through share funds.
  • In P2P lending, buy/sell price swings, often fuelled by uncertainty, are usually irrelevant, since lenders hold loans for the full term.
  • Lenders are usually in a better place in the queue compared to equity investors when recovering losses is involved, which can mean smaller losses on individual investments (loans) that go wrong.
  • With lending being data driven, recession conditions are easier to plan for. A turbulent P2P Brexit would mean a tripling of defaulting loans in some kinds of lending and cut-price sales of borrowers’ assets. Interest rates and reserve funds are prepped for most disasters, leaving a very low chance of a sizeable overall loss on a well-diversified, low-risk lending portfolio.

Most investors in peer-to-peer lending are using platforms that are run by people with relevant banking experience. The banks, when we look at their bread-and-butter lending, have found it easy to maintain net profits even during multiple downturns over the past 20 years, which includes the Great Recession. This is across the spectrum of lending, from buy-to-let mortgages to personal loans and credit cards. Perhaps surprisingly, retail and small business lending combined was still profitable for the UK’s high street banks during the 2008 and 2009 crash.

Learn more about 4th Way here.

Mojo Mortgages secures £7million to revolutionise the UK mortgage experience (Manchester Digital), Rated: A

Mojo Mortgages, a fintech start up based in the North West has secured £7million in Series A funding to transform the mortgage experience.

Mortgage Brain boosts user numbers (Mortgage Introducer), Rated: A

Mortgage Brain welcomed over 2,000 new customers during 2018 with a host of national networks, corporate firms and individual adviser firms choosing to use one or more of its products and services.

A number of new customers – including Censeo, Intelligence Mortgage Solutions, Your Expert Group, Affinity Mortgages and Your Mortgage Solutions – as well as a number of contract renewals and user license increases, have all contributed to Mortgage Brain’s growth throughout 2018.

UK inflation below official target for first time in 2 years (Miami Herald), Rated: A

Lower energy costs as well as a waning impact from the pound’s sharp fall in the aftermath of the country’s Brexit vote have helped consumer price inflation in Britain fall below the Bank of England’s target of 2 percent for the first time in two years.

The Office for National Statistics said Wednesday that consumer prices rose by 1.8 percent in the year to January, down from the 2.1 percent recorded in the previous month. Inflation has been consistently falling since August as the effects of the pound’s decline drop out of annual comparisons. The latest decline was further accentuated by a fall in the price of electricity, gas and other fuels.

Inflation is now at its lowest since January 2017, when inflation was also 1.8 percent.

Arbuthnot Commercial ABL delivers £12m refinancing facility (Bridging Loan Directory), Rated: B

Arbuthnot Commercial Asset Based Lending Ltd. is delighted to announce it has completed a £12m refinancing for L&C Limited, trading under Red 7 Marine (“R7M”), provider of nearshore access solutions to the UK marine construction and maintenance industry, and an investee company of Perwyn Private Equity (“Perwyn”).

European Union

UK fintech unicorn Revolut forced to deny links to Russia (Business Insider), Rated: AAA

Unicorn challenger bank Revolut has strongly denied claims that its activities in securing a banking license in Lithuania are attempts to interfere in the country’s politics.

Revolut was granted a European Banking License in Lithuania in December but has since faced claims of interfering in the country’s political processes by Lithuanian Member of Parliament Stasys Jakeliūnas, chair of the Lithuanian parliament’s budget and finance committee.

German Lending Marketplace auxmoney Overtakes Midsize Banks in Consumer Loan Origination (Crowdfund Insider), Rated: AAA

Düsseldorf-based Fintech auxmoney has surpassed its targets in 2018. Loan volume increased by 74 percent compared to 2017. Raffael Johnen, Founder and CEO of auxmoney, commented:

“While the major German banks are in crisis mode, the leading German fintechs are always setting new records. With our continuously strong growth, we managed to be the first credit marketplace to catch up with medium-sized banks in Germany.”

It issued new loans totaling €551 million last year.

Auxmoney Now Stands for 0.5% of the Market of German Consumer Loans (P2P-Banking), Rated: A

German p2p lending marketplace Auxmoney announced that it has facilitated 551M EUR in consumer loans in the year 2018. Up 74% compared to 2017. Approximately 73,000 loans were financed. That would mean Auxmoney now stands for a market share of roughly 0.5% of the market.

Gymshark teams up with Klarna to announce pay later service (RLI), Rated: B

Fitness wear brand Gymshark has announced the launch of a pay later service in the UK, Sweden, Norway, Finland and Denmark. The company is now in a partnership with Klarna, a payments provider which will offer Gymshark the new payment option. The payment service will allow online shoppers to try on items at home before paying for the order.

Instantor releases report on how machine learning is revolutionising credit risk management in Europe (Fintech Finance), Rated: B

Instantor, the 3rd. fastest growing Swedish FinTech who makes tough calls easy within credit risk management presents “Credit Risk Management 2019 – How Do You Stack Up?”, a report based on a survey conducted by Instantor across Europe among top executives within leading financial organisations. The report reveals that two-thirds of these players are well underway to implementing machine learning (ML) and the majority benefits from its implementation within credit risk management.

International

30 Under 30 Europe: The Young Money Merchants Shaping Financial Markets In 2019 (Forbes), Rated: AAA

Finance is hardly known for its youthfulness, yet this year’s Finance 30 Under 30s are proving that an old industry can learn new tricks. These young venture capitalists, fintech entrepreneurs, crypto enthusiasts and Millennial bankers, with an average age of just 27, are reshaping the sector and transforming our relationship with money.

The Next Global Financial Meltdown Is Just Around the Corner (Equities.com), Rated: AAA

As Bloomberg reported last year:

Shadow banking in China has ballooned into a $10 trillion ecosystem which connects thousands of financial institutions with companies, local governments and hundreds of millions of households. The practice is now at the center of a Chinese government-led regulatory crackdown aimed at defusing financial risks that threaten the wider economy. Unlike in the U.S., traditional commercial banks drive shadow banking, or unregulated lending, in China. That’s because the banks have been able to keep shadow-banking assets off their balance sheets, thereby sidestepping regulatory constraints on lending.

About 169 million Chinese, or about 12 per cent of the population, have invested in wealth management products online, a rise of 66 per cent from two years ago, according to a Moody’s report published this month. Essentially, they are putting money into the shadow banking system.

“The picture is different in the European Union. Here, the shadow sector now accounts for perhaps 30–40% of total financial intermediation. But it is growing. Between 2012 and 2016, shadow banking as broadly measured expanded by almost 40% in the eurozone.

Atlanta-based IDology to Be Acquired by GBG for $ 300m (PR Newswire), Rated: A

GBG, the UK-headquartered Identity Data Intelligence specialist, today announces that it has conditionally agreed to acquire the entire issued share capital of IDology, a US-based provider of identity verification and fraud prevention services, for $300m (£233m) in an all-cash transaction.

Nexo lending to offer crypto-backed loans with Blockport exchange (Bankless Times), Rated: B

Blockport users will be able to use the Nexo platform to get crypto loans, offering them another alternative to selling their cryptocurrencies for fiat currencies. Instead of selling they cryptocurrency assets, Blockport users can now keep their crypto, with all potential upsides, and leverage them to get instant access to cash.

Australia

Next Growth Wave: Fintech (Seeking Alpha), Rated: AAA

In this article we look at some fintech companies, beyond investor’s normal horizon of the United States. In Australia there is a small cluster of listed fintech companies that have started to explode. Some have made gains of 400% in a year and more than 1,000% on the back of strong revenue and turnover growth. Moreover because Australian companies lack access to large scale V.C. investments, technology companies often need to capital raise through a public listing.

Zip Co. (ASX: Z1P)

Zip Co. is quite similar to Afterpay and in some ways its closest competitor with an established market position. However in addition to payment splitting, it also offers interest based loans and is different in other ways.

  • Zip Co. is smaller with a market capitalization of $380 M AUD (about $266 M USD), but still has 12,600 retail partners including most of Australia’s largest retailers, however it hasn’t yet entered the U.S. or the U.K.
  • Zip Co. has Zip Pay, which provides a payment splitting application with no interest, but with more flexibility in length of time or repayment amount than Afterpay’s solution.
  • Zip Co. also has Zip Money also provides loans for purchases above $1,000 AUD, with a 3 month interest free period, but with an establishment fee of up to $99.
  • Source: Seeking Alpha

Labor’s negative gearing policies could hurt first-home buyers (Your Mortgage), Rated: A

“Despite Australia’s tight regulations on foreign investment, other overseas property markets are tighter – including China, Canada and New Zealand,” Driscoll said. “Unlike in Australia, the Chinese lack many appealing alternative investments at home and, due to government crackdowns on peer-to-peer lending, private equity funds and with the majority of their property being leasehold, many investors are forced to look elsewhere.”

India

India’s fintech future looks bright, but it needs to find its raison d’être (India Times), Rated: AAA

Yet there is more room for growth. The market in India is still small; far more deals are being done in China, and for far higher valuations. Last year alone, venture capital investments into Chinese fintechs were more than 10 times larger than those in India, with 75 percent more deals.

Although the value of investments in India declined by 21 percent in 2018 over the previous year, the number of deals actually rose 12 percent, making 2018 the most active year on record for fintech financing.

RBI may change Rs 10 lakh lending cap on P2P platforms, say P2P players (India Times), Rated: A

Peer to Peer or P2P players are hopeful that the comprehensive financial data sought by the Reserve Bank of India might help the regulator to take some major policy decisions concerning the industry.

Asia

Hundreds of unlicensed P2P lenders still operating in Indonesia (The Jakarta Post), Rated: AAA

The Financial Services Authority (OJK) has found that 231 illegal peer-to-peer lending (P2P) providers, including those from other countries, have been operating in the country since January.

An Overview on Peer-To-Peer Lending in Indonesia (Legal Business Online), Rated: A

Two years following the enactment of Financial Service Authority (Otoritas Jasa Keuangan/”OJK) Regulation No. 77/POJK.01/2016 of 2016 (POJK 77/2016), Peer-to-Peer Lending (P2P Lending) has grown popular in Indonesia. Based on data from OJK per Oct. 2018, a total of 15,990,143,141,355 rupiah has been distributed to the borrowers in P2P Lending. It has grown 432.5% from Jan. 2018 until Oct. 2018. Until Dec. 2018, the number of P2P Lending Platform which has been registered and supervised by OJK has reached 88 companies, one of them has been given a license.

Canada

Finastra announces Siobhan Byron as new Head of Technology Enabled Managed Services (Finastra), Rated: A

Finastra has appointed Siobhan Byron as Senior Vice President and Head of Technology Enabled Managed Services (TEMS). In this role, she oversees planning and execution, sales and marketing, research and development and product management across four lines of business including Checks, Enhanced Services, Student Lending and Canadian Mortgage Technology, all in the Canadian market. She oversees more than 1,300 employees that make up Finastra’s TEMS business.

Authors:

George Popescu
Allen Taylor

The post Thursday February 14 2019, Weekly News Digest appeared first on Lending Times.

Thursday December 20 2018, Daily News Digest

US Yield Curve

News Comments Today’s main news: OnDeck to enter equipment financing. SoFi releases video to destigmatize debt. RateSetter sees 47% revenue growth. Funding Circle fund expects lower returns. 360 Finance financials. Today’s main analysis: U.S. yield curve inverts. Today’s thought-provoking articles: Why did OnDeck file suit in Arlington? Fewer Americans rely on cash. More than half of Americans can’t cover a $1,000 […]

The post Thursday December 20 2018, Daily News Digest appeared first on Lending Times.

US Yield Curve

News Comments

United States

United Kingdom

China/Hong Kong

Southeast Asia

Other

News Summary

United States

OnDeck (ONDK) to Enter Equipment Financing Market (StreetInsider), Rated: AAA

OnDeck announced today that it will begin offering equipment finance loans to select U.S. small businesses next year, bringing its heralded technology and digital lending expertise to what has traditionally been a slow-moving, opaque, and complicated process.

Who’s On Deck? And why are they in Arlington? We explain. (Biz Journals), Rated: AAA

At 2 p.m. on a Friday in mid-October, it’s judgment day for 13 small companies from across the country.

The plaintiff is On Deck Capital Inc., a publicly traded online small business lender based in New York that has sued each of the 13 companies for not repaying loans. Its choice of setting: the Arlington General District Courthouse.

New SoFi Campaign Aims To Destigmatize Debt and Financial Insecurity In Powerful “Money Talks” Video (PR Newswire), Rated: AAA

SoFi today launched a campaign showcasing some of its members’ most intimate stories around their personal struggles with money. Produced in collaboration with director Tatia Pilieva, the filmmaker most notably known for her sensational short film ‘First Kiss,’ the video captures twelve SoFi members, strangers to each other, meeting for the first time to have open-ended, unfiltered conversations about their lives, their money, and their views for their futures.

The video, along with more about the members featured in the video, are now live at 

US Yield Curve Inverts; Spreads Widening on New FinTech Deals (PeerIQ), Rated: AAA

Core CPI rose by 2.2% keeping the Fed on track to raise interest rates next week for the fourth time this year. The market-implied probability of a rate hike next week is ~77%, although the rate hike path in 2019 remains uncertain. The US yield curve saw its first post-crisis flatteningwhich we will look at in greater detail below.

US Yield Curve Inverts for the First Time Post-Crisis

The US yield-curve saw its first inversion post-crisis as the spreads between the yields on 3-year and 5-year Treasuries fell to -1 bps. The spread between the yields on 3-month and 10-year treasuries has been an accurate predictor of past recessions. As the chart below shows, there have been 6 recessions since 1970 after the 3-month – 10-year curve inverted. Currently, the 3-month – 10-year curve is 49 bps away from inversion, but markets are watching every part of the yield curve closely.

Source: Federal Reserve, PeerIQ

Spreads are Widening on New FinTech Deals

LendingClub and CommonBond are out with new securitizations. KBRA has rated the tranches on LendingClub’s latest $272 Mn deal CLUB 2018-P3 A-, BBB, and BB. The $300 Mn collateral pool consists of 17,825 Prime loans with an average balance of $16.8 k, a weighted average coupon of 14.58%, and a weighted average remaining term of 48 months. The weighted average FICO score of the borrowers is 703. The deal has an initial O/C of 9.2% and an excess spread of 9.1%. Both the O/C and excess spread are the lowest for LC’s 2018 prime deals. This deal priced 27-50bps wider than LC’s prior deal in September due to market volatility and widening structured products spreads, according to DebtWire.

More Americans are making no weekly purchases with cash (Pew Research), Rated: AAA

Entegra Bank Chooses Velocity Solutions to Power Its Small Business Digital Lending (deBanked), Rated: A

Velocity Solutions announced today that its Akouba digital lending platform was selected by Entegra Bank to power the bank’s digital lending for its small and medium-sized business customers. Akouba provides community and regional banks with origination and underwriting services.

LoanStreet Signs Up Workers Credit Union to Use Fintech Loan Participation Platform (Crowdfund Insider), Rated: B

LoanStreet, a Fintech “loan participation platform,” has signed up Massachusetts-based Workers Credit Union to its growing network.

Lending Express Appoints Former Maple Founder Ofer Ariel to Chief Product Officer; Promotes Daniel Katz to Chief Operating Officer (PR Newswire), Rated: B

Lending Express, the technology company dedicated to increasing access to funding for small businesses, today announced the promotions of Ofer Ariel and Daniel Katz to Chief Product Officer and Chief Operating Officer, respectively. This announcement follows a period of impressive growth for the company, and is indicative of its commitment to provide best-in-class service to both its customers and partners.

United Kingdom

RateSetter Announces 2017-18 Revenue Growth of 47% (Crowdfund Insider), Rated: AAA

UK based peer-to-peer lender RateSetter announced last week the results of its 2017-2018 financial year, which ended on March 31, 2018. The lending platform reported that revenues were up by 47% (which was £34.3 million) from the previous year (£23.4 million). The company noted that the year-end, there were 44,441 active investors on the platform with loans under management of £700 million.

Funding Circle fund expecting lower returns (AltFi), Rated: AAA

A hit from its European Investment Bank transaction as well as higher UK loss rates have prompted a fall in expected returns for the Funding Circle SME Income fund.

The £332m Funding Circle SME Income Fund saw a fall in its net asset value (NAV) of 1.4 per cent in November as the investment trust’s board said it expected returns for the full year would be lower than previously anticipated owing to a higher expected rate of defaults among certain loan pools.

Orca opens waiting list ahead of 2019 IFISA launch (P2P Finance News), Rated: A

ORCA has opened a waiting list for investors interested in its self-select portfolio and Innovative Finance ISA (IFISA), with plans to launch both products in the first quarter of 2019.

The peer-to-peer lending analysis and investment platform, which first revealed its plans to launch a tax wrapper to Peer2Peer Finance News in October, said the Orca ISA will allow investors to hold multiple P2P loans from different providers in one tax wrapper.

It will offer interest of up to 6.5 per cent.

Transferwise – the power of partnerships (Fintech Futures), Rated: A

Cross-border payments were ripe for disruption and doing more than most to shake up things is peer-to-peer (P2P) specialist, Transferwise. Its number of partnerships with banks is multiplying while, in parallel, it is adding settlement options, most recently for direct access to the euro payment infrastructure through a euro settlement account with the Bank of Lithuania.

At present, with one notable exception, the partner banks that have been announced are challenger or other low-end players. However, it now claims over four million people around the world using its service to transfer over £3 billion each month. In the UK, global head of partnerships, Stuart Gregory, says its share of consumer international transfers is around 15%, putting in on or close to a par with some of the largest UK banks.

P2P property lending platform completes £10m investment round (AltFi), Rated: A

Peer-to-peer property lending platform BLEND Network has completed a £10m late-seed round of investing.

N26 Metal Now Available in the UK (coverageR), Rated: A

N26, the provider of mobile banking services which launched in the UK last month with a free account, is now offering N26 Metal – its first premium membership for UK customers.

For the price of £14.90 per month, Metal members get access to an exclusive partner program, dedicated customer service, and worldwide travel insurance provided by Allianz. In addition, members benefit from free ATM withdrawals in pounds, free payments in any currency, free withdrawals worldwide, and LoungeKey airport access in over 1k destinations.

This ex-Googler wants to help high street banks be more like Monzo (Yahoo! Finance), Rated: A

The head of innovation at one of Britain’s big high street banks told me earlier this year that he has a mantra when approaching a new problem: “What would Monzo do?”

Traditional banks are struggling to keep pace as Monzo pushes the boundaries. The startup sends smartphone push alerts when you spend money, knows when you’re abroad, lets you freeze your debit card if lost, and offers chatbot customer service — all through the app.

Onfido Sees 342 Pct Sales Growth In 2018 (PYMNTS), Rated: A

Onfido, the global identity verification company, announced Tuesday (Dec. 18) that it achieved 342 percent sales growth in 2018 compared with 2017 and that it has a four-year growth rate of 3,857 percent.

Starling Bank’s Megan Caywood jumps to Barclays’ ship (Fintech Futures), Rated: B

Megan Caywood, Starling Bank’s chief platform officer, is joining Barclays, as she handed in her notice a couple of weeks ago, according to TechCrunch.

China/Hong Kong

How a Chinese anti-virus software maker builds a fintech firm to wrestle with giants (TechCrunch), Rated: AAA

360 Finance,  an online consumer loan platform that spun off from China’s anti-virus service giant 360 Group, has joined a raft of Chinese fintech companies to go public in the U.S. over the last two years.

The company priced its initial public offering at $16.50 per share last Friday, raising $51 million by selling 3.1 million American depositary shares.

Source: TechCrunch

You’ve applied for a Virtual Bank license, what’s next? (Hubbis), Rated: AAA

Hong Kong is preparing for the arrival of virtual banks (VB) — pure digital players that offer banking services solely through digital channels without bricks-and-mortar branches. In an exclusive article from Synpulse we discover the challenges associated with virtual banking.

What is your differentiating proposition?

With HKMA’s recent announcement of receiving 29 applications for VB, competition is expected to be intense.

Focus on Customer Needs

Basic banking services are about fulfilling three main needs of the customer:

  • How do I pay or get paid?
  • How can I borrow?
  • How do I grow or protect my savings?

Capitalize on strong partnerships

FinTechs have traditionally excelled in one particular area (e.g.p2p lending, remittance and FX conversion).

Avoid a Pure Discount Model

VBs can leverage their lower operating costs to provide lower fees, higher deposit rates or other price incentives to attract customers. However, without a clear differentiating proposition, a pure low-cost play will not be sustainable.

Jiayin, a Top Player in P2P Lending Business, Files for $ 57.5 Million IPO on Nasdaq (Capital Watch), Rated: A

A leading individual financial marketplace, Jiayin Group Inc., is seeking to raise up to $57.5 million in an initial public offering on the Nasdaq Global Select Market in New York.

ByteDance registers fintech trademarks (Technode), Rated: A

In July, Jinri Toutiao launched a fintech product named Safe Lending. Up to 20,000 users were permitted to borrow up to RMB 200,000 (around $30,000) per person per day. The company claimed the Bank of Nanjing was one of its loan partners.

The product became the subject of investigations by the media in September. ByteDance later shuttered the online money lending service, while thousands of Chinese P2P lending companies shut down in the second half of the year.

PINTEC Partners with China National Investment & Guaranty Corporation to Develop Digital Lending Technologies (Markets Insider), Rated: B

Pintec Technology Holdings Ltd. (“PINTEC”) (NASDAQ: PT) today signed a strategic cooperation agreement with China National Investment & Guaranty Corporation (“I&G”), a leading enterprise in China’s guarantee industry. The two sides will jointly develop the next generation digital lending technologies and nurture a dynamic credit financing ecosystem for small and micro-sized enterprises in China.

European Union

Online Lender Creditshelf Partners with CrossLend to Offer First Digital Securitization of Loans (Crowdfund Insider), Rated: AAA

Germany based Fintech creditshelf Aktiengesellschaft, an SME financing platform, is launching a new partnership with CrossLend to offer the first digital securitization of SME loans in Germany.

A Visit to Crowdestor in Riga (P2P Banking), Rated: A

On invitation of Crowdestor I travelled to Riga and met the founders of Crowdestor Janis Timma and Gunars Udris. Crowdestor is a Latvian p2p lending platform for SME loans. They launched a year ago. Loans are typically for terms of up to 18 months and interest rates are quite high – the current loan offer by a transportation company seeking expansion capital carries 17% interest rate. The Crowdestor website is available in English, German and Portuguese language. Currently most investors on the platform are Germans, followed by Spanish investors.

Funding Options: From Fintech Petting Zoos To SME Lending Sanctuaries (Forbes), Rated: A

Both financial institutions and fintech startups have made serving SMEs a priority in 2018. However, despite business current accounts like Mettle being created this year, online comparison marketplace Funding Options has helped millions of firms across Europe, especially those that cannot get traditional bank lending because they are early-stage, high-growth or in difficulty, since its launch in 2012.

International

Finastra announces Eric Duffaut as President and Global Head of Field Operations (RealWire), Rated: A

Finastra has appointed Eric Duffaut as President and Global Head of Field Operations. Based at Finastra’s London Headquarters, Duffaut will take responsibility for the company’s entire go-to-market organization including global sales, services and consultancy, as well as overseeing the Finastra partner ecosystem.

Strengthening the Spread: ETHOS Now Live on Nitrogen Network (CoinTelegraph), Rated: A

Token of Ethos.io, a leading cryptocurrency wallet provider and Blockchain Financial Services (BFS) platform, has been officially listed on Nitrogen Network, a new decentralized peer-to-peer crypto lending network.

Nitrogen Network enables market participants to lend and borrow cryptocurrencies on their own terms, all while maintaining control of their holdings and private keys. This supports effective portfolio management and a diverse range of investment views across a wide variety of crypto assets.

Australia

As banks become stricter with lending, could your HELP debt get in the way of getting a home loan? (ABC.net.au), Rated: AAA

As banks rein in lending in the wake of the banking royal commission which revealed “irresponsible lending is endemic in Australia”, those who might have easily secured a home loan a few years ago now face much more stringent criteria.

Banks are looking more carefully at expenses and debts which, for 2.7 million Australians, will include a HELP (formerly HECS) debt.

India

NBFC Vivriti Capital secures Rs 200 Cr from Creation Investments in Series-A equity funding (Your Story), Rated: AAA

Vivriti Capital, a Chennai-based lending platform for corporate entities, has raised Series A equity funding of Rs 200 crores from Creation Investments, an investment management company focused on financial services.

Crowdfunding – A Brief Overview Of The Regulatory Framework (Mondaq), Rated: A

3. Peer-to-Peer Lending or Debt Crowdfunding: Peer-to-Peer Lending (P2P lending) is a form of crowdfunding used to raise loans which are re-paid along with interest. It can be defined as the use of an online platform that matches lenders with borrowers in order to provide unsecured loans. The borrower can either be an individual or a legal person requiring a loan. The interest rate may be set by the platform or by mutual agreement between the borrower and the lender. Fees are paid to the platform by both the lender as well as the borrower.2

4. Equity Crowdfunding:

The SEBI Consultation Paper furnishes proposals for a regulatory framework governing procedure of Security based Crowdfunding methods for Start-ups and Small and Medium Enterprises (SMEs).

The Directions define a “Non-banking financial company – Peer to Peer Lending Platform”4(NBFC-P2P) as a non-banking institution which carries on the business of a Peer-to-Peer Lending Platform. Peer-to- Peer Lending Platform5 has been defined as an intermediary providing the services of loan facilitation via online medium or otherwise, to the participants6(a person who has entered into an arrangement with an NBFC-P2P to lend on it or to avail of loan facilitation services provided by it). Non-banking institutions other than companies have been prohibited from undertaking the business of Peer-to-Peer Lending platform.7 The Directions provide the scope of activities, prudential norms (the aggregate loans taken by a borrower at any point of time, across all P2Ps, is subject to a cap of Rs.10,00,000/-), operational guidelines, inter alia other regulations.

Southeast Asia

Why the ASEAN P2P lending market will avoid the Chinese pitfalls (ASEAN Today), Rated: AAA

To say that 2018 was a rough year for peer-to-peer (P2P) lending businesses in China would be a gross understatement. It was nothing short of a bloodbath, mirroring in many ways the US sub-prime mortgage crisis of 2008-09.

China, despite its economic power, shares the following crucial features with smaller markets in South and Southeast Asia:

  • A large percentage of small-to-medium enterprises (SMEs) and individuals without access to traditional banking services
  • High mobile penetration among the population
  • Easy access to investor funds, both domestic as well as international

The Southeast Asian approach to P2P lending regulation is more proactive than the Chinese model

In the heydays of P2P platforms in China, the authorities pursued more of a “wait and watch” approach. In marked contrast, the regulatory bodies of Southeast Asian economies have adopted more pro-active steps to regulation.

Korea’s digital banks have two speeds: fast and faster (Asia Money), Rated: A

The average internet speed in South Korea is 26.7 megabits per second, faster than anywhere else in the world, according to French virtual private network developer Le VPN.

No Korean bank has ever been in the mix for this much-coveted prize. Nor did a single Korean firm appear in the latest Forbes rankings of the world’s 50 most innovative fintech companies. Indeed, it’s hard to identify a single well-known and home-grown fintech brand. There’s no Korean answer to, say, China’s Ant Financial, or Singapore-based ride-sharing-to-food-delivery service Grab.

OJK Pledges to Announce Names of Illegal Fintech Firm (Tempo), Rated: A

The Financial Services Authority (OJK) committed to monitoring legal and registered financial technology (fintech) companies of peer-to-peer lending or online loan as an effort to maintain the security for consumers.

Eurasia

Russia Is A Top Five Leader Of Digital Banking In Europe (Forbes), Rated: AAA

Because of the lack of legacy IT infrastructure within banks in Russia, the country has been listed in the top five leaders of digital banking in Europe, according to a new Deloitte and ID Finance report.

Latin America

Vitacon innovates again and launches an investment opportunity starting at USD250 with return of up to 12,8% per year (PR Newswire), Rated: AAA

Vitacon, a leading construction company that is revolutionizing the way people live in São Paulo, is launching one more investment opportunity for people seeking new options for earning income and diversifying their portfolios. The company, which for the past nine years has been incentivizing the shared economy in its residential developments, is launching the possibility for any investor to invest directly USD250 in a CD, a fixed income security issued by Banco Topázio, with a 24-month maturity, which allows for annual yields of up to 12.8%.

This new method, P2P Lending, is similar to one introduced in 2015, when Vitacon launched the first real estate crowdfunding, which surpassed expectations and created an international benchmark in the field, raising 28% above what was expected for the construction of the VN Cardoso de Melo building in a very prime location of São Paulo, scheduled for delivery next year.

Authors:

George Popescu
Allen Taylor

The post Thursday December 20 2018, Daily News Digest appeared first on Lending Times.