Thursday March 28 2019, Weekly News Digest

structured debt

News Comments Today’s main news: Klarna launches open banking platform. SoFi re-engineers home loans. Apple’s new credit card. OakNorth secures guarantee of $133M. Qupital raises $15M to bumrush China. Today’s main analysis: Arbuthnot Banking Group audited final results for 2018. Today’s thought-provoking articles: U.S. yield curve, new fintech products. Cities with most overleveraged mortgage debtors. Household debt. Expanding access to credit […]

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

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United States

United Kingdom

International

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News Summary

United States

SoFi Refreshes Home Loans, Making Home Buying Painless and Paperless (PR Newswire), Rated: AAA

Today, SoFi announced the refresh of its mortgage offering as SoFi Home Loans, complete with a reengineered process that helps people buy or refinance a home with an online application, no hidden fees, or prepayment penalties.

SoFi Home Loans offer competitive rates including affordable down payments, with as little as 10% down on loans up to $3MM, with no hidden fees or prepayment penalties. SoFi allows applicants to choose between four different loan terms and fixed or adjustable rates. Those interested in refinancing can choose between traditional mortgage refinancing, cash-out refinancing, and student loan cash-out refinancing. If SoFi Home Loans isn’t able to handle a loan request, SoFi provides an easy option to digitally transfer member information to its affiliate partner who may be able to help.

Apple’s new credit card keeps advisors guessing (Financial Planning), Rated: AAA

The Apple credit card is the latest offering by a Silicon Valley tech giant looking for a ready-made avenue into the financial services’ sector. While the new card mostly benefits loyal users of Apple products, it’s also an unwelcome reminder of an ever present question on the minds of wealth managers: Will the FAANG companies like Facebook, Amazon, Apple, Netflix and Alphabet continue their land grab of services historically provided by the financial services industry — and at what cost to traditional RIAs?

Ominously, a majority of investors considering switching financial services providers said they would consider banking with a tech company like Facebook, Google or Amazon if they could, according to a recent survey by Novantis.

US Yield Curve Inverts; New Products from FinTechs (PeerIQ), Rated: AAA

For the first time in 3,000 days, and with much anticipation, the 3-month and 10-year treasury curve inverted. The median time to a recession after this curve inverts is between 1 to 1.5 years. However, unprecedented interventions such as QE (and higher central bank holdings globally) make it difficult to draw hard and fast conclusions. Market participants are pricing in a 41% probability of an interest rate cut in the September meeting.

Source: PeerIQ; Bianco Research

New Products from FinTechs

FinTech innovation continues with new products from PeerStreet and Figure. PeerStreet has launched a 30-year loan to enable private investors to buy rental properties. Residential for Rent loans are targeted towards rental home operators. The rental market in the US has grown exponentially post-crisis people struggle to buy homes. The number of rental homes has grown from 36 Mn in 2006 to 43 Mn in 2017.

Source: FactTank, PeerIQ

2019’s Cities with the Most Overleveraged Mortgage Debtors (WalletHub), Rated: AAA

Buying a home represents an important milestone for most consumers. But for those who dive in to the deep end of real estate without a financial safety net, the decision could lead to buyer’s remorse in the long run. Mortgage rates are slowly falling after reaching their latest peak in November 2018, and are close to the lowest they’ve been in the past 3 decades. This makes 2019 a tempting time to buy a home. Some industry experts believe 2019 is friendlier toward buyers than sellers because of the lower rates.

Source: WalletHub

Household Debt – Mixed Signals (DBRS), Rated: AAA

The most recent Quarterly Report on Household Debt and Credit issued by the Federal Reserve Bank of New York (the Fed) and Equifax Inc. (Equifax) showed that household debt rose for the 18th consecutive period during Q4 2018 to $13.5 trillion, $869 billion higher than the peak reached in 2008. This represented the third-smallest increase (0.24%) over the 18 consecutive periods of growth, partly because of decreasing mortgage loan debt during Q4 2018 to $9.2 trillion from $9.4 trillion at the end of Q3 2018 and flat levels of auto loan debt at $1.3 trillion for both Q3 and Q4 2018.

Expanding Access to Credit in the Land of New “Halves” (Lend Academy), Rated: AAA

Credit is one of the largest, most powerful, lucrative and important industries in the world. It also is one of the best tools for wealth creation – home ownership, small business ownership and growth, and, leveraged investing.  This is readily accessible for prime consumers with more options now than ever before. But for the other half of the country that is non-prime, options are still limited and in many cases non-existent.

Early pioneers of securitizations like SoFi, the scaling of marketplace lending like Lending ClubProsper and Best Egg, and new distribution models like Greensky and Affirm have contributed towards increasing comfort of these “new asset classes” that were mostly locked up in bank’s balance sheets.

There are a lot of new “halves” in today’s world.

Amount Delivers Seamless Digital and Mobile Lending Platform to TD Bank (PR Newswire), Rated: A

Amount, a technology provider for financial institutions, today announced a strategic partnership with TD Bank. TD Bank, a top ten U.S. bank, is leveraging Amount’s platform to power the bank’s TD Fit Loan, which launched in August 2018. This initial offering allows consumers to consolidate higher-interest debt, while helping TD meet growing consumer demand for a seamless digital and mobile lending experience. Through this partnership, TD and Amount will roll out additional offerings, as well as standalone tools addressing fraud, verifications and decisioning.

5 Freebies With Your Student Loans (NerdWallet), Rated: A

1. Career coaching

Who offers it: SoFi.

SoFi members have received over 15,000 coaching sessions to date.

4. Referral bonuses

Who offers it: Multiple refinance lenders.

  • Education Loan Finance offers $400 for each successful referral, as well as $100 for the loan applicant.
  • Laurel Road lets you split its $400 bonus however you and your referral see fit.
  • Splash Financial provides $250 apiece for both parties.

5. Charitable work

Who offers it: CommonBond.

If you prefer freebies that help others, CommonBond has a one-for-one social impact mission. For each loan the lender issues, it donates an amount based on a formula that funds a child’s education in a developing country through the nonprofit Pencils of Promise. Those donations have totaled over $1 million to date.

CNote Launches Wisdom Fund to Close Lending Gap for Women (PR Newswire), Rated: A

Women are the fastest-growing group of entrepreneurs in the U.S. Yet less than 5 percent of small business lending—only $1 in $23—goes to women. CNote aims to fix this disparity with the Wisdom Fund, a new impact investment opportunity launching today.

Investors in the Wisdom Fund will earn an estimated 4 percent annual return, over a 60-month term, on a loan portfolio that’s diversified across established CDFIs. Email wisdomfund@mycnote.com to learn how you can help fund more women-owned businesses today.

Women seeking loans should contact a participating CDFI. Partners in the Wisdom Fund’s first phase include:

  • Carolina Small Business Development Fund, which provides small business loans and financial training to startups, existing businesses and community organizations in North Carolina.
  • LiftFund, a Texas-based organization that empowers underserved entrepreneurs with capital and support services in 13 states.
  • TruFund, a national nonprofit organization that provides affordable capital to small businesses and nonprofits in AlabamaLouisiana and New York.

Study Finds 70% of Americans Would Share More Personal Data for Fairer Credit Decisions (PR Newswire), Rated: A

More than half (54%) of loan applicants don’t even have a clear understanding of why they receive the interest rate they do from a lender, while a majority (70%) say it is difficult finding lenders who will look at them as something other than their credit score.

  • 7 in 10 American adults (71%) wish there was another way to prove themselves to credit lenders outside of the standard credit score.
    • Hispanics (82%) and African Americans (81%) are more likely than Whites (67%) to want lenders to look at additional factors in lending decisions.
  • 77% believe more data is better when evaluating potential borrowers’ credit.
  • 71% would be willing to share more personal data with a lender if it resulted in a fairer credit decision. The motivation is even higher among middle-class earners. 79% of people making $50,000 to $75,000 would share more personal data to prove their creditworthiness, compared to 66% of people making over $100,000.
  • 84% think their bank should use modern technology to assess their creditworthiness.
    • Specifically, about half of loan applicants (53%) would like their ideal lender to use machine learning to make fairer credit decisions.
    • More than 2 in 5 (42%) would like their ideal lender to use machine learning to make the credit for homeownership more accessible to everyone.
    • Surprisingly, older generations want newer technology even more. Baby boomers and seniors (83% and 87%, respectively) wanted their banks to use new technologies to score them, compared to 79% for Millennials and Gen Zers.

Survey: Alternative Data Sharing (Urjanet), Rated: B

Urjanet surveyed more than 300 U.S.-based adults to assess consumer sentiment around alternative data sharing in the lending process. Key findings include:

  • A majority of consumers have multiple alternative sources of payment history
  • Alternative data sharing represents a huge opportunity for lenders to drive financial inclusion
  • Most consumers (59%) are willing to share utility and telecom data to boost chances of approval

SigFig launches platform to help retail banks sell financial products (Investment News), Rated: A

SigFig, the financial technology firm that developed digital advice platforms for several large financial institutions, wants to help banks automate more than investment management.

Technology to Play Crucial Role in Preparing ABS Professionals for Next Economic Cycle (ABL Advisor), Rated: A

An overwhelming majority (90 percent) of asset-backed securities (ABS) professionals feel that adopting new technologies will be important to preparing their businesses for the next economic cycle, according to Capital One’s sixth annual survey at SFIG Vegas 2019.

The survey also revealed that ABS professionals believe the biggest risks to their businesses are uncertainty around regulatory risk and increased credit risk, both at 29 percent. However, despite regulatory risk being a top concern, the industry’s apprehension has nearly cut in half over the last two years. In 2018, 48 percent noted regulations were the biggest risk to their businesses while 58 percent thought so in 2017. Additional top-of-mind concerns for 2019 include increases in interest rates (18 percent) and increased competition (17 percent).

TrustToken’s Stablecoin Now Available On Cred’s Crypto Earning Platform (BlockTribune), Rated: A

Asset tokenization platform TrustToken has announced a strategic partnership with crypto lending platform Cred.

Founded by former PayPal financial technology veterans, Cred is a decentralized global lending and borrowing platform that allows stablecoin issuers, exchanges and wallets to provide valuable earn and lending services worldwide.

Fintech in Brief: Update on Legal Challenges to OCC Fintech Charter (JDSupra), Rated: A

On March 19, 2019, the New York State Department of Financial Services (“NYDFS”) filed a brief in opposition to the Office of the Comptroller of the Currency’s (“OCC”) motion to dismiss the NYDFS’ lawsuit challenging the OCC’s statutory authority to grant special purpose national bank charters to Fintechs (the “Fintech Charter”). The brief in opposition signals that the NYDFS will continue its opposition to the Fintech Charter under the leadership of Acting Superintendent Linda Lacewell, who replaced outgoing Superintendent Mari Vullo in February. In opposing the OCC’s motion to dismiss, the NYDFS argued that it has standing to challenge the Fintech Charter, the matter is ripe for judicial review, and its claims are not time-barred. The NYDFS also argued that the OCC’s interpretation of the “business of banking” is not entitled to Chevron deference and “should be invalidated in its entirety.”

Mortech Partners with Roostify for Enhanced Online Mortgage Experience (Business Wire), Rated: A

Today, Mortech, a Zillow Group business providing mortgage technology solutions for mortgage lenders and secondary market teams, announced a new partnership between Mortech’s product and pricing engine (PPE) and Roostify, a digital lending platform that gives customers more control of their home buying process while allowing loan officers to utilize the latest technology to more easily process loans. The strategic partnership will integrate two proven mortgage technology solutions to improve the digital mortgage experience for many industry-leading lenders.

Finastra brings community banking services outside the branch with the launch of Fusion Digital Front Office (Finastra), Rated: A

Finastra has launched Fusion Digital Front Office, an innovative tablet-based banking platform that enables community banks and credit unions to take services directly to the consumer, outside of the branch. The solution provides a simple gateway to manage account origination, sales and service, and transaction processing from any remote location.

Huobi’s US Arm Launches Institutional Group for OTC Crypto Trading (CoinDesk), Rated: A

“We’re entering the market now with a real institutional offering, we’re definitely going to be offering some new products and services,” such as token lending and over-the-counter (OTC) trading, in the coming months, he added.

Elevate Named as a Finalist for LendIt Fintech 2019’s Financial Inclusion Award (AP News), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, has been named as one of six finalists in the “Excellence in Financial Inclusion” category for the LendIt Fintech Industry Awards 2019. This award is given to the company that has made the biggest impact in expanding access to financial services in new and innovative ways.

J.D. Power ranks Regions among top alternative lenders for personal loans (Biz Journals), Rated: B

Birmingham’s largest bank has ranked among the top alternative lenders in the U.S. for providing personal loan satisfaction through digital applications.

United Kingdom

ARBUTHNOT BANKING GROUP (“Arbuthnot”, “the Group” or “ABG”) Audited Final Results for the year to 31 December 2018 (Morningstar), Rated: AAA

FINANCIAL HIGHLIGHTS

·      Profit Before Tax £6.8m (2017: £2.5m)

·      Underlying profit before tax £7.4m (2017: £3.2m)

·      Operating income increased by 24% to £67.9m (2017: £54.6m)

·      Negative earnings per share 134.5p (2017: positive 43.9p)*

·      Continuing earnings per share 38.0p (2017: 14.0p)

·      Underlying earnings per share 40.3p (2017: 17.6p)

·      Final dividend per share 20p (2017: 19p), an increase of 5%

·      Total full year dividend per share 35p (2017: 33p)

·      Bonus share issue to create new class of non-voting shares

·      Net assets £196m (2017: £236m)

·      Net assets per share 1283p (2017: 1547p)

·      Underlying return on deployed equity 5.6% (2017: 4.2%)

Consolidated statement of financial position

 

At 31 December

2018

2017

Note

£000

£000

ASSETS

Cash and balances at central banks

17

405,325

313,101

Loans and advances to banks

18

54,173

70,679

Debt securities at amortised cost / held-to-maturity

19

342,691

227,019

Assets classified as held for sale

20

8,002

2,915

Derivative financial instruments

21

1,846

2,551

Loans and advances to customers

22

1,224,656

1,049,269

Other assets

24

12,716

20,624

Financial investments

25

35,351

2,347

Deferred tax asset

26

1,490

1,527

Interests in associates

27

– 

83,804

Intangible assets

28

16,538

15,995

Property, plant and equipment

30

5,304

3,962

Investment property

31

67,081

59,439

Total assets

2,175,173

1,853,232

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital

37

153

153

Retained earnings

38

209,083

237,171

Other reserves

38

(13,280)

(949)

Total equity

195,956

236,375

LIABILITIES

Deposits from banks

32

232,675

195,097

Derivative financial instruments

21

188

931

Deposits from customers

33

1,714,286

1,390,781

Current tax liability

236

705

Other liabilities

34

18,549

16,239

Debt securities in issue

35

13,283

13,104

Total liabilities

1,979,217

1,616,857

Total equity and liabilities

2,175,173

1,853,232

Read the full report here.

Tech Nation Lists 10 Fintech Pioneers In Future Fifty 2019 Cohort (Forbes), Rated: AAA

Revolut, Monzo, Starling Bank, Currencycloud, Aire, Blockchain, MarketInvoice, Quantexa, Nested and Salary Finance were revealed to be among the 24 most dynamic and fast-growing late-stage technology companies to be chosen to join Future Fifty’s 2019 cohort.

Tech Nation and Dealroom data has also revealed that the U.K. has attracted a whopping $7.9 billion in funding in 2018 and closed the gap for exits of venture-backed companies with the U.S. As well as this U.K. sales, IPOs and mergers were worth $40 billion – ahead of every other European country – which points to the success of the tech sector as a whole in the country.

OAKNORTH ANNOUNCES BRITISH BUSINESS BANK ENABLE GUARANTEE OF £133M (Business Leader), Rated: AAA

OakNorth has today announced its participation in the ENABLE Guarantee programme, securing a guarantee of £133m from the British Business Bank, the UK government’s economic development bank. OakNorth will use the guarantee to strengthen further its lending support to fast-growth businesses and established property developers and investors.

The ENABLE Guarantee programme is designed to encourage banks to increase their lending to smaller businesses by reducing the amount of capital required to be held against such lending. Under an ENABLE Guarantee, the UK Government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.

Inside OakNorth’s plan to take its lending technology global (Tearsheet), Rated: A

As a challenger bank, OakNorth charts a different course. While Revolut, Monzo, and N26 focus on putting their digital current accounts in the hands of millions, OakNorth doesn’t even offer a current account. While other challengers are racing to acquire banking licenses all over the world, OakNorth is happy with just a UK license.

OakNorth is also posting profits while other challengers aren’t.  The bank announced a £33.9m profit for 2018, up 220 percent from 2017.

OakNorth provides debt financing to entrepreneurs in growing businesses, lending £0.5M to £40M to profitable, scale-up, British businesses. To fund its underwriting, OakNorth offers digital savings accounts. It currently has 40,000 customers with digital savings accounts and has lend £3 billion in under four years.

Successful UK Payday Lender Western Circle Limited Begins Offering Personal Loans Online (Finger Lakes Times), Rated: A

Western Circle Limited has made a name for itself by offering responsible payday loans online. Their decision to branch out into the personal loans market through the new brand PersonalLoansNow.co.uk was well received by their customers.

Five last-minute IFISA ideas (P2P Finance News), Rated: A

THE END of the tax year is fast approaching, so if you haven’t yet taken full advantage of your £20,000 ISA allowance to make tax-free returns, now is the time. The peer-to-peer lending industry is expecting to see an uptick in inflows into Innovative Finance ISAs (IFISA) this year now that there is a much wider choice of products available and the potential for higher returns than cash with lower volatility than the stock market.

FINTECH LAUNCHES AI LOAN COMPARISON SERVICE (Business Cloud), Rated: A

Loan marketplace Monevo has launched a new platform to give consumers comparisons of pre-approved loans.

Based in Macclesfield, the business is a licensed credit broker for personal and business loans and is Europe’s largest personal loan marketplace.

An Alternative Approach (IFA Magazine), Rated: A

When it comes to asset allocation, advisers constantly face the challenge of finding real diversification in client portfolios. Sue Whitbread met with Matthew Ardron and Benedict Yung of Basset & Gold Group, to talk about their approach of offering fixed rate bonds that invest in alternative lending.

Half of Brits running out of cash before payday – pushing them to rogue lenders (Mirror), Rated: A

Exclusive research for Mirror Money shows by the end of this month, those turning to payday loans will have shelled out more than £214million – that works out at £28 per second

P2P to have strong presence at Innovate Finance Global Summit (P2P Finance News), Rated: B

FOUNDERS of the ‘big three’ peer-to-peer lenders are among the confirmed speakers at Innovate Finance Global Summit (IFGS), which takes place next month at London’s Guildhall.

Giles Andrews of Zopa, Samir Desai of Funding Circle and Rhydian Lewis of RateSetter are all participating in various sessions at the fintech industry trade body’s flagship conference on 29-30 April 2019, which marks the start of UK Fintech Week.

Other confirmed speakers from the P2P world include Zopa chief executive Jaidev Janardana, ArchOver’s Angus Dent, Ali Celiker from British Pearl and Roxana Mohammadian-Molina from Blend Network.

China/Hong Kong

Hong Kong SME financing platform raises $ 15m for China push (Finextra), Rated: AAA

Hong Kong-based online SME trade financing platform Qupital is targeting the mainland after closing a $15 million Series A funding round led by CreditEase FinTech Investment Fund.

Consumers hunger for loans, lenders popping up everywhere (Shine), Rated: AAA

Qin Shuifeng, 30, who lives in the suburban district of Jiading, went to a branch of the Postal Savings Bank of China in 2016 to seek a loan for home improvements.

The lender granted her and her husband a credit line of 1 million yuan (US$148,600), of which they drew 600,000 yuan, with an interest rate 10 percent higher than the benchmark rate.

Competition 

The central government has issued a series of policies favorable to consumer lending since the second half of 2018.

Still, risks remain. To realize sustainable development, players need to build strong operational and risk control capabilities, either by themselves or in partnership with financial technologies firms.

European Union

Klarna Launches Open Banking Platform (PR Newswire), Rated: AAA

Today, Klarna, one of Europe’s leading payment providers and the global market leader in payment initiation services, announces the launch of its own Open Banking Platform. This platform will enable access to more than 4,300 European banks through a single Access to Account (XS2A) API in line with Payment Services Directive (PSD2). Klarna’s XS2A API is the most established and proven solution that has been developed at scale across markets for almost 15 years through the Klarna Group company Sofort.

This platform provides a fully proven and mature infrastructure, superior market coverage and connectivity, with access to 99% of online banking consumers currently across 14 European markets. By opening up its own advanced technology and capabilities, Klarna is simplifying and democratising access to APIs securely. Both established and newer banks and fintechs as well as other licensed businesses, will be able to build smart and personalised offerings that meet the evolving needs of consumers across Europe. Klarna has been one of the leading proponents of the PSD2 legislation and believes high-quality APIs will drive innovation and competition but most importantly will empower consumers across Europe with increased choice, control and clarity on their finances, and ability to access better products.

International

Has Alternative Lending Seen Its VC Peak? (PYMNTS), Rated: AAA

U.S. FinTech funding reached its highest level in five years in 2018, according to CB Insights data published last month, hitting $11.89 billion. Yet at a time when analysts say VCs are focusing more on late-stage investment, alternative lenders are having a tougher time securing funding, particularly market newcomers in a crowded market.

But there is evidence that investors’ appetite for alternative lending startups is on the wane, even as overall FinTech funding continues to climb — and as the success of the alternative lending market grows, too.

eToro buys blockchain company Firmo (Fintech Futures), Rated: A

Just weeks after launching in the US, trading and investment platform eToro announced plans to purchase Copenhagen-based blockchain firm Firmo, reports Julie Muhn  at Finovate

Founded in 2017, Firmo offers a programming language called FirmoLang that runs on a sidechain. Exchanges can leverage FirmoLang to create financial instruments such as P2P lending platforms or cryptocurrency derivatives with tokens. And Firmo is versatile, allowing the tokens to be run on any blockchain.

Battlestar Capital Earns 30% Returns For Holding Crypto (ChainBits), Rated: B

Battlestar Capital, which is a blockchain staking-as-a-service company, revealed that customers could potentially earn up to 30 percent on a yearly basis when it comes to their idle crypto holdings. Here is everything about the startup’s claims in a nutshell.

In an interview, the company said that it has teamed up with crypto lending startup called Celsius Network in an attempt to launch a large-scale service capable of offering potentially high returns.

Australia

APRA Proposes Stricter Credit Risk Management Standards (Regulation Asia), Rated: AAA

The revised prudential standard enhances board oversight of credit risk and requires more intensive credit checks on borrowers. APRA also highlights the risks of P2P originated loans.

India

New modes of lending, fund raising on cards (The Asian), Rated: AAA

In a bid to change the market dynamics of the banking and financial sectors, the Reserve Bank of India (RBI) will soon come up with alternative models of lending and capital raising for the sectors.

Asia

Bukalapak partners three P2P lenders to provide loans for offline businesses (Tech in Asia), Rated: AAA

Bukalapak is teaming up with Indonesian P2P lending startups Amartha, Modalku, and PohonDana to provide loan facilities in a program called Modal Mitra. The loans are available to offline vendors who are part of the company’s Mitra Bukalapak program.

The financing offered through Modal Mitra ranges between US$70 and US$700 and can be paid back in up to six months, with weekly installments starting from US$6. It can only be used for purchases in the Mitra Bukalapak app.

Eurasia

Russian fintech launches digital bank 131 (Finextra), Rated: AAA

Bank 131, a new digital bank focused on Russian companies and entrepreneurs that work for global internet companies and/or buy from global ecommerce companies with a Russia presence, announced today they have received their banking license from authorities – the first and only new bank to do so in four years.

Canada

Shadow banking has grown, but risks to financial systems are modest (Advisor’s Edge), Rated: AAA

Canada’s shadow banking sector has grown substantially in recent years, but the overall financial system has grown even faster, keeping risks in check, suggests a new report from the Bank of Canada.

In the report, the central bank details the results of its monitoring of so-called “non-bank financial intermediation” (NBFI), also known as shadow banking. Among other things, the report finds the Canadian NBFI sector has grown by 1.7 times since 2006, driven by strong growth in investment funds, securities financing transactions and private lending.

Authors:

George Popescu
Allen Taylor

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

Thursday January 24 2019, Weekly News Digest

millennials loan money

News Comments Today’s main news: Funding Circle, Stripe partner on small business expansion. Goldman, Citi drop Chinese P2P lenders. RateSetter attracts 75K investors. MarketInvoice gets 56M GBP in equity, debt funding. Hexindai shares credit data with Baihang Credit. Today’s main analysis: PeerIQ on bank earnings. Today’s thought-provoking articles: The link between marketplace lending and personal bankruptcy. 10 best places to […]

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

millennials loan money

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Goldman, Citi Drop Chinese Peer-to-Peer Lenders After Crackdown (Bloomberg), Rated: AAA

First came a sweeping government crackdown and a surge in defaults and failures at thousands of China’s peer-to-peer lenders. Now, in another troubling sign for the industry, some of the biggest investment banks have stopped taking them public.

Wall Street firms including Goldman Sachs Group Inc. and Citigroup Inc. walked away from U.S. initial public offerings of Chinese P2P lenders in recent months, people with knowledge of the matter said. Their concerns mainly stemmed from the timing of the deals, with an uncertain outlook for P2P companies and a slumping market knocking down valuations. In each case, the businesses went ahead with their offerings after finding new underwriters.

Marketplace Lending & Personal Bankruptcy: Cause and Effect (Lend Academy), Rated: AAA

A national wave of personal bankruptcies that began in 2008 reached a peak in the year ending September 2010, when nearly 1.6 million bankruptcies were filed.

Filings fell by 1.8 percent for the 12-month period ending March 31, 2018, compared with the year ending March 31, 2017. The data continues a national trend of declining bankruptcy filings since 2010-2011.

An interesting white paper (The Real Effects of Financial Technology: Marketplace Lending and Personal Bankruptcy) co-authored by Dr. Piotr Danisewicz, University of Bristol and Ilaf Elard, Assistant Professor of Finance at Shanghai University of International Business and Economics was released last summer.

Among the many additional conclusions Danisewicz and Elard reach in the white paper are:

  • The Madden win triggered Lending Club and Prosper, the two largest U.S. marketplace lenders, to reduce lending in the states affected by the verdict.
  • The co-authors attribute the increase in the incidence of personal bankruptcy following Madden to the reduction in marketplace lending. This hypothesis is supported by a number of further results.
  • The consequences of Madden are limited to the enforceability of marketplace loans and suggest that the increase in bankruptcy rates following Madden arises predominantly from changes in marketplace lending.
  • Danisewicz and Elard also rule out that the rise in bankruptcy following the verdict could be the result of an increase in defaults by marketplace borrowers in the affected states. This may occur if marketplace borrowers are over-indebted and default after being unable to obtain additional marketplace loans in the affected states.

Strong Bank Earnings (PeerIQ), Rated: AAA

Banks had a rough quarter for trading revenues. FICC revenues at MS dropped by 30% YoY and by 18% YoY at GSBank of America’s 15% YoY drop in trading revenues was offset by a 10% increase in consumer banking revenuesRevenues at Wells Fargo dropped by 5% YoY driven by lower consumer loan balances. WFC faces a regulatory asset cap until the end of 2019 which is hampering loan growth. JPM was the only bank where the provision for credit losses increased, driven by a reserve build for credit cards due to loan growth.

Source: PeerIQ

10 Best Places to Pay Down Debt (LendingTree), Rated: AAA

Americans’ debt balances continued climbing in 2018, with total consumer debt tracking to top $4 trillion by the end of that year. With balances climbing high, many borrowers will want to use the new year to take their debt down a peg. For those who do so, prioritizing paying off debt can bring major rewards both in the near and long distance future.

86 Million Americans Fear Maxing Out Plastic on Large Purchases (WalletHub), Rated: AAA

The holiday shopping season is over now, and many Americans are seeing the impact on their credit card bills and bank statements. During the holidays, people often make a lot of large purchases, and sometimes max out their cards in order to do so. In a nationally representative survey conducted by WalletHub, 34 percent of respondents say they worry about maxing out their card with a large purchase.

Source: WalletHub

Credit Line Increases Drive Consumer Engagement and are Most Likely to Happen at the Beginning of the Year (AP News), Rated: A

According to a new study from TransUnion (NYSE: TRU), consumers are 50% more likely to receive a credit line increase (CLI) between the months of January and May. However, credit line decreases (CLD) occur at twice the normal rate during the month of January.

Lendio Provides More Than 5,000 Kiva Loans to Support Women-Owned Businesses Around the World (Lendio), Rated: A

Lendio announced today that through continued efforts to support business growth around the world, the Lendio Gives program has funded more than 5,000 Kiva microloans. To-date, Lendio’s employee contribution and employer matching program has provided more than $130,000 in loans to underserved business owners in 78 countries.

Lendio Franchising Named No. 1 Financial Services Brand in Entrepreneur’s Franchise 500 (Lendio), Rated: B

Lendio Franchising recently ranked in Entrepreneur magazine’s Franchise 500, the world’s first, best and most comprehensive franchise ranking. Named #1 in the Business Financial Services category for the second year running, Lendio Franchising was recognized for its outstanding performance in areas including unit growth, financial strength and stability, and brand power. Placement in the Franchise 500 is a highly sought-after honor in the franchise industry; Entrepreneur received more than 1,000 applications this year, making it one of the company’s most competitive rankings ever.

Commercial Real Estate Finance Platform CrediFi Milestone: Total Capital Raised Has Surpassed $ 29 Million (Crowdfund Insider), Rated: A

CrediFi, a fintech and commercial real estate finance platform, on Wednesday it has raised an additional $6 million in funding. This funding comes on the heels of the $13 million previously raised in Series B funding. The company reported that the total amount it has raised has surpassed $29 million.

Lending Express Celebrates $ 100M Lending Milestone & California’s Golden Opportunities (Crowdfund Insider), Rated: A

Lending Express, an Israeli tech company dedicated to creating a better world of funding for SMBs, has surpassed $100 million in financing facilitated between small and medium business owners and online lenders. Lending Express also obtained state permission to open for business in California.

Fundation Launches Digital Lending Capability with Banc of California for Small Business Customers (OAOA), Rated: A

Fundation announced that it has recently launched a digital lending solution in partnership with Banc of California, enabling the California-based bank to offer a new, streamlined end-to-end solution for small businesses seeking a business loan or line of credit. The solution enables small businesses to apply for loans and lines of credit through a simple online application at Bancofcal.com and receive funds in a little as one business day.

Entrepreneurs Take Note: Success Is Within Reach (WWD), Rated: A

With insight from 600 “thriving” U.S. small business owners, a study by global financial services platform Kabbage, Inc. reveals one-third of small businesses started with less than $5,000 in start-up capital.

According to the report, particularly scrappy or thrifty entrepreneurs may want to consider starting a business in one of the three categories costing $5,000 or less “during the first six months.” Accounting; at 45 percent, online retail; at 44 percent and construction and landscaping; at 39 percent represented the least amount of start-up capital, or lowest entry barriers.

Officials caution federal workers of predatory online payday lenders during federal shutdown (News 8), Rated: A

Attorney General William Tong and Department of Banking Commissioner Jorge Perez cautioned federal workers on Wednesday to avoid predatory online payday lenders who may seek to exploit the struggling workers during the partial government shutdown.

Most People Would Not Loan Their Loved Ones Money to Start a Business (Fundera), Rated: A

The time and effort it takes to raise the funds for your startup can quickly get out of hand, which may be the reason that 29% of new small businesses run out of cash and fail.

In fact, 38% of startups are funded by friends and family members.

We surveyed 1,000 Americans on whether or not they would loan a friend or family member money to start their business and found that 82% of people would not loan a friend or family member money to start a business.

Source: Fundera

No Pay Stub? No Problem. Unconventional Mortgages Make a Comeback (WSJ), Rated: A

Lenders issued $34 billion of these unconventional mortgages in the first three quarters of 2018, a 24% increase from the same period a year earlier, according to Inside Mortgage Finance, an industry research group. While that makes up less than 3% of the $1.3 trillion of mortgage originations over that period, the growth is notable because it came as traditional home loans declined. Those originations fell 1.2% over the same period and were on track for a second down year in 2018.

North Capital Launches REITless Impact Income Strategies (PR Newswire), Rated: A

North Capital Investment Technology Inc. recently launched a new investment vehicle, REITless Impact Income Strategies (REITless), focused on lending and strategic debt investments to primarily single- and multi-family real estate development and redevelopment projects that aim to produce positive social impact in communities nationwide. The impact initiatives targeted by the company are energy efficiency, employment generation, affordable housing, and green-housing improvements that promote environmental sustainability. REITless is managed by North Capital Inc., an SEC-registered investment advisor (RIA).

BFS Capital Achieves $ 2 Billion in Financing (BusinessWire), Rated: A

BFS Capital, a leading small business financing platform, today announced it has now issued more than $2 billion in financing to over 22,000 small businesses across the United States, Canada and, through its United Kingdom subsidiary, Boost Capital.

KeyBank To Acquire Online Lending Business Laurel Road (PR Newswire), Rated: A

KeyBank National Association today announced that KeyBank and Laurel Road Bank have entered into a definitive agreement for the acquisition by Key of Laurel Road’s digital lending business; Laurel Road’s three bank branches located in southeast Connecticut are not part of this transaction. Through the acquisition, Key will enhance its digital capabilities with state-of-the-art, customer-centric technology and will leverage Laurel Road’s proven ability to attract and serve professional millennial clients.

GROUNDFLOOR Launches Real Estate Investments Specific To Georgia Residents During Federal Shutdown (PR Newswire), Rated: A

Today, Atlanta-based GROUNDFLOOR is launching new investment opportunities specific to Georgia residents. The crowdsourced real estate investing and lending platform regularly offers investment opportunities to accredited and non-accredited investors throughout the country. Due to the federal shutdown and furloughs at the Securities and Exchange Commission, GROUNDFLOOR is now resurfacing state-by-state securities to continue to offer investors the opportunity to invest on a fractional, self-directed basis in Georgia real estate.

Is community banks’ loan growth too much of a good thing? (American Banker), Rated: A

Total loans at publicly traded banks with assets of less than $20 billion rose 9.2% in the fourth quarter from a year earlier, based on Jan. 18 data compiled by FIG Partners. Publicly traded banks above that threshold have reported a 2.7% increase in loans.

Breakout Capital Finance expands Board of Directors, appoints Neil Gurvitch and Firoze Lafeer (PR Newswire), Rated: B

Breakout Capital Finance, a leading fintech innovator, announces the expansion of its Board of Directors by appointing Firoze Lafeer, company CTO, and Neil Gurvitch as an independent director.  In making the appointments, Carl Fairbank, Breakout’s Founder and CEO, said, “We continue to see rapid growth in our lending- and technology-focused endeavors.  Adding more seasoned leadership continues our expansion and growth plans.”

Samsung NEXT, NBKC Executives and Ellie Mae Veteran Join ProPair Advisory Board (BusinessWire), Rated: B

ProPair, a Silicon Valley innovator using machine learning and predictive decision-making to change how mortgage lenders are assigning and prioritizing their leads, today announced the additions of Leo Chang, Chad Cronk and Nick Hedges to its advisory board.

United Kingdom

RateSetter attracts over 75,000 investors (Bridging and Commercial), Rated: AAA

RateSetter has announced that over 75,000 investors have put money into its platform.

Since its launch in 2010, investors have earned £120m through the P2P lending platform at an average interest rate of 4.4% per year.

RateSetter currently has £830m of investment under management, including £170m invested through its Isa.

MarketInvoice secures £56m equity and debt funding (MarketInvoice), Rated: AAA

Fintech business MarketInvoice today announced it has raised £26m in new equity funding. This Series-B funding round was led by Barclays and Fintech fund, Santander InnoVentures with significant participation from European venture fund Northzone, an existing investor in the company. Technology credit fund Viola Credit, who also participated in the equity round, will provide a debt facility of up to £30m. The facility will help scale the MarketInvoice business loans offering that sits alongside their core invoice finance solutions.

Goldman Sachs’ Marcus platform reveals AUM (AltFi), Rated: A

The US investment giant said its digital bank attracted has more than £5bn in UK savings just three months after its launch.

The US investment giant debuted its online lending and deposit platform, Marcus, in the UK at the end of last summer, and pulled in 100,000 customers and £5.4bn in the final quarter of the year.

Metro Bank shares crash after loans blunder revealed (The Guardian), Rated: A

Metro Bank has revealed a major blunder in how it classifies its loan book, an admission that drove its share price down by nearly 40% on Wednesday, wiping £800m off the value of the company.

The bank, which has been opening new branches as established rivals cut back, revealed that hundreds of millions of pounds of commercial property loans and loans to commercial buy-to-let operators had been wrongly classified in risk terms, and should have been among its “risk-weighted assets” (RWAs).

Glenhawk grows team with LendInvest hire following strong start to 2019 (Property Funds World), Rated: B

Having originated GBP28.4 million of potential loans since the start of the year, and completed on just over GBP4 million, early indications are that 2019 will see accelerated demand for Glenhawk’s fast and flexible short term property finance. Wareham joins Glenhawk’s 20-strong team of real estate professionals, supporting an increasingly diverse range of borrowers across the South of England and Midlands.

China

Hexindai Begins Sharing Credit Data with Baihang Credit (PR Newswire), Rated: AAA

Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, announced today that it has connected its systems and begun sharing credit data with Baihang Zhengxin (“Baihang Credit”).

China crackdown aims to push peer-to-peer lenders out of the industry (Australian Financial Review), Rated: A

Chinese authorities have further tightened controls on the peer-to-peer lending industry, aiming to clear out as many P2P platforms as possible, according to an official document seen by Caixin.

Microlenders need to obtain licences from the regulators and meet certain minimal capital requirements. For instance, a microlender in Shanghai needs to register its business with more than 200 million yuan ($41.2 million). P2P platforms usually don’t have to meet such requirements.

Chinese investors try to storm company after P2P lender failure (Business Times), Rated: A

In the latest sign of turmoil in China’s once booming peer-to-peer (P2P) lending sector, around 80 investors in failed lender Xinhehui protested outside the Hangzhou headquarters of a related company on Tuesday, demanding a US$330 million bailout.

Mrs Xue, who would only provide a surname for fear of retaliation, said she arrived at 8am with around 80 other investors from Zhejiang and neighboring provinces, demanding payment for 2.26 billion yuan (S$452 million) of products that Xinhehui had sold, including 860 million yuan (S$172 million) worth that were due for repayment on Jan 6.

Xi Tells Cadres to ‘Prevent and Control’ Risks as China’s Economic Woes Mount (The Epoch Times), Rated: B

At a high-level meeting of senior Chinese Communist Party officials held in Beijing, Chinese leader Xi Jinping gave an opening speech on Jan. 21 that hinted at the severity of China’s economic downturn.

European Union

Fellow Finance Launches Peer to Peer Lending in Denmark (Crowdfund Insider), Rated: AAA

Finland based peer to peer lender Fellow Finance is now operating in Denmark. The company says it will offer Danish consumers access to credit while Fellow Finance investors will be able to fund Danish loans. Currently, Fellow Finance provides consumer loans in Finland, Germany, Poland, and Sweden.

Note to Irish and US parents: college not the only path for your cherished offspring (Irish Central), Rated: A

According to the student loan marketplace www.lendEDU.com, the average debt per borrower at a public college is $26,872. This rises to $31,710 if you’re inclined to a private college experience. For graduate school students – whose parents have by now presumably said, “Time to pay your own way, sunshine” – the average debt is a staggering $57,600.

International

Funding Circle partners with Stripe to help small businesses expand (PR Newswire), Rated: AAA

Funding Circle, the global small business loans platform, today announced that it has joined the Stripe Partner Program, providing businesses using Stripe with access to affordable business financing through Funding Circle. As a verified extension partner, Funding Circle now enables Stripe users to import their data directly and securely to apply for a business loan up to $500,000 — making the process faster and easier so they can get back to running their businesses.

Boost Capital ups firepower as US parent hits $ 2bn lending milestone (AltFi), Rated: A

Small business lender Boost Capital has refinanced its credit facility lifting its funding capacity to $60m, as its US parent targets European growth.

The Chelmsford-based platform, which provides business loans and merchant cash advances, said it upped its credit firepower from $40m after signing a deal with New York-based investment firm Atalaya Capital Management.

India

Matrix Partners invests in P2P lending platform LiquiLoans (Techstory), Rated: AAA

Mumbai based peer to peer lending platform LiquiLoans, one of the few players to have secured a P2P license, has now secured an undisclosed amount of funding from some of the existing investor that is Matrix partners India.

Fintech startup floated by ex-Lendingkart execs MoneyOnClick raises funding (VC Circle), Rated: A

Two former executives from online lending platform Lendingkart have quit the firm to set up a new venture in the alternative lending space, catering to consumers.

According to their respective LinkedIn accounts, the startup, which has been operational since October 2018, has already raised $2.25 million (Rs 16.02 crore at current exchange rates) as part of its first institutional funding round from undisclosed investors.

Women, non-metros topping up on credit, says BankBazaar survey (MoneyControl), Rated: A

Non-metro cities have emerged as the bigger market for unsecured credit in terms of volume than the metros in 2018, according to BankBazaar Moneymood 2019 report.

The average personal loan ticket size in non-metros is Rs 2.80 lakh compared to Rs 2.55 lakh in metros. The unsecured credit portfolio includes personal loans and credit cards which are used more for consumption activities than secured loans.

Online rental marketplace Sacorooms Rises fresh funding Pre-Series A (Times of India), Rated: A

Sacorooms, a start-up that is building co-living spaces, has closed a pre-Series A round of funding for an undisclosed amount from Mr. Broadway. The investment comes after a strategic round led by Incubate Fund and a group of investors from the real estate industry this year.

Asia

OJK Zero Down Payment Policy Drives Multifinance Growth (Tempo.co), Rated: AAA

The recent policy of zero percent down payment for vehicle credit issued by the Financial Services Authority (OJK) believed to be able to drive the performance of the multifinance industry. Businesses are confident that multi-finance companies will perform better with the new regulation.

Chairman of the Indonesian Financing Company Association (APPI) Soewandi Wiranto, said that the business expansion stated in the new regulation can increase financing industry growth. Based on APPI’s calculation, industrial asset growth for 2019 can reach up to 9 percent while the growth rate of receivables is predicted to be in a range of 6 to 7 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

Thursday November 22 2018, Daily News Digest

Major European Neobanks Customers

News Comments Today’s main news: Prosper to introduce HELOCs. Affirm to rebrand, get into travel. Elevate Credit misses earnings estimates. Zopa says parents borrow from children’s piggy banks. Revolut wants to raise $500M through SoftBank. LexinFintech shares jump 8% on 363% earnings increase. Fintonic, Amazon partner in Spain. Today’s main analysis: Are we in an online lending bubble? Today’s thought-provoking articles: […]

Major European Neobanks Customers

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Prosper Announces HELOCs, Releases Q3 2018 Earnings (Lend Academy) Rated: AAA

Prosper noted that according to a 2017 TransUnion Study an estimated 10 million consumers will take out HELOCs between 2018 and 2022 which would be more than double the number originated from 2012-2016.

The new HELOC product will launch officially in early 2019.

Prosper also reported their Q3 2018 results today. Originations were $640.3 million, down 22% over the prior year period. Prosper attributed the decrease to credit tightening as well as the increase of interest rates to borrowers. The company has now originated $13.4 billion since inception. Net revenues also decreased as a result of decreased originations, with net revenue falling from $28.8 million in Q3 2017 to 20.6 million in Q3 2018. Below is a summary of Prosper’s other financial highlights that are availing in the company’s 10-Q.

Source: Lend Academy

Funding Circle US: Consumers will eschew Amazon to support small firms (Peer2Peer Finance) Rated: AAA

FUNDING Circle US has found that the majority of US consumers still make the effort to shop at independent small businesses and would be willing to pay more for the same item than it costs at e-commerce giant Amazon.

The peer-to-peer business lender, which recently floated on the London Stock Exchange, published the results of a survey on US consumers’ support for small businesses.

It found that 77 per cent of 2,171 US adults surveyed said they were willing to pay more for items at small businesses in order to keep money within their communities and support local jobs.

60 per cent of respondents said they would pay a 10 per cent premium or more on Amazon prices.

PayPal co-founder’s installments firm, Affirm, rebrands, gets into travel (Payments Source) Rated: AAA

PayPal co-founder Max Levchin has built a $1.8 billion business offering installment plans to American consumers. The problem: most shoppers have no idea they’re using his company, Affirm, when they choose how to pay at checkout.

Now, in an effort to make its name synonymous with online installment plans, Affirm is rebranding. Besides a new logo, the firm will list all the retailers it works with on its website. Affirm will also focus on travel, letting consumers pay for vacations over time.

Levchin Says Crypto Not a Good Currency But He Likes the Tech (Bloomberg) Rated: A

Elevate Credit (ELVT) Releases Earnings Results, Misses Estimates By

Elevate Credit (ELVT) Releases Earnings Results, Misses Estimates By $0.23 EPS (Fairfield Current) Rated: AAA

.23 EPS (Fairfield Current) Rated: AAA

Elevate Credit (NYSE:ELVT) announced its earnings results on Monday, October 29th. The company reported ($0.10) earnings per share for the quarter, missing the consensus estimate of $0.13 by ($0.23), MarketWatch Earnings reports. Elevate Credit had a positive return on equity of 12.69% and a negative net margin of 0.49%. The business had revenue of $201.48 million for the quarter, compared to analyst estimates of $201.71 million. During the same quarter last year, the company posted $0.01 EPS. Elevate Credit’s quarterly revenue was up 16.6% on a year-over-year basis. Elevate Credit updated its FY18 guidance to $0.23-0.32 EPS.

Source: Fairfield Current

Amazon: Fundrise Allows You to Invest in Property Near Amazon’s DC Headquarters with New eFund (Crowdfund Insider) Rated: A

Real estate investment platform Fundrise says it has been quietly accumulating property near the area Amazon (NASDAQ:AMZN) has just announced they will be establishing a new headquarters. Amazon’s east coast headquarters will create a huge economic impact for the DC/Northern Virginia market, not to mention increased demand for housing and apartments. Fundrise says it has invested in 30 different buildings in expectation of rising demand. Fundrise is offering a new investment fund for this purpose: HQ2 DC eFund.

According to Fundrise, the fund already features residential properties – ranging from houses, townhomes and condominiums – with plans to invest as much as $50 million in the area. This eFund, issued under Reg A+,  allows any investor the opportunity to capitalize on expected local real estate growth in the wake of Amazon’s announcement.

RealtyShares starting to crumble after lack of venture capital (Born2Invest) Rated: A

The website started out strong. From 2014 to 2016, venture capital was pouring in from crowdfunding firms. However, investors became less interested in the portal as the investment minimum started to ramp up steadily. Company founder Nav Athwal, who had left the company’s board earlier this year, is still a minority shareholder. He also has no idea what happened to the company he helped found.

He, however, has a few words for startups. “Don’t let your burn rates get really large, strive for cash-efficiency or profitability sooner rather than later. Build a resilient business that can continue growing, regardless of where the venture capital markets are.” He adds that a startup should understand its investors and its growth limit as well.

Are we in an online lending bubble? (Tearsheet) Rated: AAA

We’re in an interesting time in online lending. After years of fits and starts and boatloads of money flowing into the sector, record originations are being set all over the industry. We recently explored online lending trends going into 2019 and what participants in the sector are expecting in the near future.

Both consumer and business lenders are tracking strongly:

While personal loans have surged to a record as the fastest-growing U.S. consumer-lending category, according to data from credit bureau TransUnion, it’s fintech firms that are driving a lot of that growth.

Source: Tearsheet

Amalgamated Bank joins $ 26 million closing of Insikt social bond securitization (Impact Alpha) Rated: A

The fintech firm packages up the loans the into securities, which it then issues as bonds to financial institutions, foundations and private investors. Its latest $26 million securitizationattracted Amalgamated Bank, a B-corp-certified commercial bank that went public on the NASDAQ stock exchange in June.

The issuance marks Insikt’s fifth securitization this year, backed by 21,000 loans. INSIKT’s total securitization volume across 16 issuances reached $273 million.

If Recession Comes in 2020, What Will Innovation Look Like? (Bank Innovation) Rated: A

JPMorgan Chase last month predicted a 60% chance of recession by 2020, and that increases to an 80% chance by 2021. It’s not clear how traumatic an event it would be for the U.S. economy, but considering all the new players that have jumped onto the financial scene since the last downturn a decade ago.

CrowdOut Funds More “Eatertainment” (Business Wire) Rated: A

CrowdOut Capital announced the completion of a $20 million facility to Punch Bowl Social, the L Catterton–backed restaurant group that is defining the evolving category of experiential dining. The proceeds will enable the leader in the “eatertainment movement” to open multiple new locations throughout the U.S. This marks the second time Punch Bowl Social has worked with CrowdOut, choosing its flexible debt over traditional loans from financial institutions.

Sell Your House Without Making a Move – Figure Introduces a Smart Alternative for Baby Boomers to Secure Their Retirement (Corp Magazine) Rated: A

Figure Technologies, Inc. (Figure), a FinTech company creating innovative products and tools that empower homeowners to improve their finances, announced today Figure Home Advantage, a smart sell-and-leaseback alternative to reverse mortgages for retirees and a new way for Baby Boomers to lock in record housing prices as they plan their retirement. With Figure Home Advantage, homeowners convert their home equity into cash they can put to use now while continuing to enjoy life at home without the ongoing burden of property taxes, repairs, and maintenance.

Roughly 10,000 Baby Boomers turn 65 years old in the U.S. every day. A study by the National Conference of State Legislators and AARP found that 90 percent of people over age 65 want to stay in their home for as long as absolutely possible. Yet, most older Americans don’t have enough savings to cover retirement expenses or realize the lifestyle they’d imagined. According to a survey by the Insured Research Institute (IRI), only 25 percent of Baby Boomers believe they will have enough money in retirement.

Lenders Extending More Loans to Subprime Consumers as Credit Market Continues to Exhibit Signs of Strength (AP News) Rated: A

Auto loans, credit cards and personal loans all saw year-over-year growth in subprime originations this past quarter, a sign that lenders are returning to this space following several consecutive quarters of declining originations. The latest TransUnion (NYSE: TRU) Industry Insights Report includes insights into consumer credit trends around personal loans, auto loans, credit cards and mortgage loans through the third quarter of 2018.

TransUnion’s report found that origination growth in the subprime risk tier grew at a significant rate across auto, personal loans and credit cards following declines in 2017. Subprime originations in the personal loan category grew 28% between Q2 2017 and Q2 2018 (originations are viewed one quarter in arrears to account for reporting lag), compared to a yearly decline of 7.1% over the prior year. Auto showcased a similar trend, as independent lenders began issuing new loans to subprime consumers following industry pullback in 2016 and 2017. Subprime auto originations increased 7.3% year-over-year, after falling 7.8% year-over-year in Q2 2017.

Are you a minority borrower? You might want to think twice about using an online lender. (The Washington Post) Rated: A

It’s not just bank loan officers with racial biases who discriminate against black and Latino borrowers. Computer algorithms do, too.

That is the groundbreaking conclusion of University of California at Berkeley researchers who found that algorithmic credit scoring using big data is no better than humans at evening the playing field when it comes to determining home mortgage interest rates.

Both online and human lenders earn 11 to 17 percent higher profits off minority borrowers by charging African Americans and Latinos steeper rates, the study said. Black and Latino consumers pay 5.6 to 8.6 basis points higher interest on home purchase loans than their white or Asian counterparts with similar credit profiles — no matter whether they obtained their loans through a face-to-face process or online. The effect is smaller when it comes to refinancing, with black and Latino borrowers paying 3 basis points more.

Read the full report here.

AI-Driven Lead Distribution for Mortgage Lending Helps Loan Officers Deliver Faster Results (Verb Factory Email) Rated: A

ProPair, an innovative mortgage-industry technology start-up based in Silicon Valley, today launched an AI-based lead distribution solution that eliminates the uncertainty of the lead assignment process while optimizing results and ensuring fairness in the assignment process. Using artificial intelligence to correlate lead data with information about individual loan officers, ProPair facilitates the lead assignment process to allow lenders to distribute leads to maximize the performance of the entire loan team.

White Oak Healthcare Finance Provides $ 190 Million Financing for BM Eagle’s 17 SNF Portfolio (Business Wire) Rated: B

White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as administrative agent and lead lender on the funding of a $190 million senior credit facility of 17 skilled nursing facilities for BM Eagle Holdings, LLC (“BM Eagle”), a joint venture led by affiliates of BlueMountain Capital Management, LLC (“BlueMountain”). The facilities are located in Northern California and New England.

United Kingdom

Zopa: Parents borrowing from children’s piggy banks (Peer2Peer Finance) Rated: AAA

ZOPA research has found that two fifths of parents have admitted to raiding their children’s piggy banks to borrow cash.

Parents surveyed by the peer-to-peer consumer lender confessed to borrowing money from their kids with a fifth taking over £250 a year.

However, 80 per cent of parents said they will also be giving their children cash as a Christmas present this year.

Nearly a quarter of children can look forward to a gift of up to £100, whilst a lucky three per cent will be receiving more than £500 in cash.

Revolut is in talks with Softbank to raise $ 500 million (Business Insider) Rated: AAA

UK neobank Revolut is currently in talks with the Softbank fund, which is worth $92 billion, for its next funding round, according to City AM. The talks are still early on, but the funding round could be as high as $500 million. It’s not clear whether existing investors, including Draper Esprit and Index Ventures, would participate in the next round.

Source: Business Insider

Monzo to offer cash deposits via PayPoint (FinExtra) Rated: A

PayPoint has announced today that challenger bank, Monzo, has chosen PayPoint’s cash payments solution for its current account holders. Beginning Wednesday 21 November, customers will be able to deposit up to £300 cash directly into their Monzo account in a single transaction at any of PayPoint’s 28,000 convenience stores nationwide.

Starling Bank’s £10m funding helps it make a stand to Monzo (Fintech Future) Rated: A

Starling Bank, the mobile-only bank, has secured £10 million of new capital from Bahamas-based hedge fund manager Harald McPike.

According to the Daily Telegraph, the funding is in preparation for a £80 million round to keep up, or perhaps surpass, other mobile challengers like Monzo, which recently raised £85 millionto reach a £1.5 billion valuation, and getting over 1.1 million customers.

Why data scientists solve irrelevant problems (Bobs Guide) Rated: A

In today’s challenging financial market businesses need to utilize every available resource and technology to reduce risk when processing payments and credit applications. One area in particular that is often talked about, but still either under or incorrectly utilized, is data science.

While many financial institutions are working towards implementing data science within their risk decisioning processes many are still working on creating an environment and culture that allows data scientists to be fully effective.

In a recent webinar Ken Schultz, VP of data science at Elevate Credit – better known under their brand Sunny in the UK -discussed the benefits data science can bring to a financial services organization, including the opportunity to increase accuracy, expand your market, and reduce fraud, all of which can be used to drive business growth.

Lending Works Appoints Three New Board Members, Targets P2P Growth (Crowdfund Insider) Rated: B

Peer to peer lender Lending Works has selected three new members for their Board of Directors. The online lender has appointed; Simon Waugh, former Chairman of CMC Markets, Deputy CEO of British Gas, Paul Noble, CEO of Honeycomb Finance, a Pollen Street Capital business, and Melanie Goward, Investment Director of Maven Capital Partners.

Barclays partners with MarketInvoice (The MarketInvoice Blog) Rated: B

MarketInvoice and Barclays today announced a partnership deal that is set to transform the way small and medium enterprises (SMEs) in the UK manage cash flow and accelerate growth.

The bank has committed to a significant minority stake in MarketInvoice to give Barclays’ SME clients seamless access to innovative forms of finance. The new partnership is a key part of Barclays’ plans to invest in new business models for growth, and MarketInvoice’s ambition to broaden its reach across the UK.

China

Shares of LexinFintech Jump 8% In Early Trading as Earnings Soar 363% (Capital Watch) Rated: AAA

LexinFintech Holdings Ltd. (Nasdaq: LX) saw its shares jump more than 8 percent in early trading Wednesday after the company, an online peer-to-peer lending platform in China, posted better-than-expected earnings for the third quarter with net income increasing more than fourfold.

Despite recent market uncertainty, the Shenzhen-based lender said its operating revenue for the third three months increased more than 13 percent year-over-year to $246.7 million thanks to a 404 percent jump in income from its loan facilitation and servicing fees.

Net income for the quarter was $46 million, or 25 cents per fully diluted ADS, up from $9.93 million a year ago.

Source: Capital Watch

Tencent reboots profits as growth picks up beyond games (Nikkei Asian Review) Rated: AAA

China’s Tencent Holdings handed investors a much-needed profit recovery in the third quarter as revenue rose beyond online games, but the company warned that stricter regulation by Beijing on online advertising could sap growth.

The social media and online game group, which has lost about 40% of its market value since March as China has stalled approval of new games, beat market forecasts thanks to contributions from ads and cloud computing.

Source: Nikkei

China Rapid Finance to Announce Third Quarter 2018 Financial Results on November 20, 2018 (Acrofan) Rated: A

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF), operator of one of China’s largest consumer lending marketplaces, today announced that it plans to release its third quarter 2018 financial results on Tuesday, November 20, 2018, after U.S. market closes.

China Rapid Finance’s management will host an earnings conference call at 8:00 p.m. Eastern Time on November 20, 2018, (9:00 a.m. Beijing/Hong Kong Time on November 21, 2018).

Why China’s online lending crisis makes liberalisation of bank interest rates more urgent (South China Morning Post) Rated: A

How big is China’s fintech sector? I would say, Britain’s peer-to-peer (P2P) lender Funding Circle plus payday lender Wonga times 100. In addition to giants such as Alibaba’s Ant Financial, Pingan’s Lufax and Tencent’s WeBank, a dozen mid-size operators have gone public in the US and Hong Kong in the past 18 months alone. There are also 40 to 50 serious players that are waiting in the wings to go public. However, as the year-long official clampdown has revealed, there are far too many also-ran operators and Ponzi schemes about.

In just five to six years, fintech has surged to levels over US$200 billion in terms of total assets.

Cash-Strapped Online Lenders Ordered to Repay Investors (Caixin Global) Rated: A

Some local governments have ordered cash-strapped peer-to-peer (P2P) lending platforms to begin repaying their investors to head off growing turmoil in the industry.

Hangzhou-based P2P lending platform Yucaiyuan recently announced that the company “did not meet regulatory requirements and was ordered to start repaying (investors),” according to a post on the lender’s website (link in Chinese). The firm will have to repay the principal and interest on all outstanding loans until investors are fully repaid. It has 12 months to do so.

Regulators in the eastern city want to rein in what had once been runaway growth in the industry. They plan to do this by clearing out small and midsize platforms one step at a time, a P2P lender told Caixin.

European Union

Fintonic Links Up with Amazon (Finovate) Rated: AAA

Personal finance app Fintonic announced today it will collaborate with Amazon in Spain. Starting next week, Fintonic customers in Spain will be able to finance their Amazon.es purchases ranging from $225 to $1,100 (€200 to €1,000) at a rate of 0% interest for up to four months.

Mintos to Provide Debit Cards and IBAN Accounts to Investors (P2P Banking) Rated: AAA

P2P lending marketplace Mintos has raised 5 million EUR in a Series A. The money is earmarked to provide new features for investors.

Crowdlending campaign raises total of €1.5 million for the first time (The Brussels Times) Rated: A

A crowdlending campaign has, for the first time, raised a total of €1.5 million in Belgium.

The announcement came on Wednesday from the platform Look&Fin, which specialises in such participative finance loans. The company, Carimat Matériaux, based in Braine-le-Château and active in construction, has raised this record amount.

In total, 483 individuals have invested in Carimat Matériaux, for a global total of €1.5 million. The group, which has specialised in construction since 1988, recorded a turnover of €56 million in 2017 and employs more than 170 people.

Berlin-based fintech startup Bonify raises funding to provide free credit scores and financial advice (EU Startups) Rated: A

Want to apply for a loan, but you’re unsure about your credit score? The Berlin-based startup Bonify provides free, easy-to-read credit reports. Users can use the startup’s platform or app to check and correct their scores, monitor changes, and receive tips on personal finance and how to optimise their scores.

Bonify evaluates consumers real-time creditworthiness, enabling them to improve their financial wellbeing through tailored financial and non-financial recommendations. The app delivers recommendations for how consumers can save money, for instance by switching to a different loan or energy provider. Bonify is also able to predict six to eight weeks in advance when its users might go into their overdraft, and provide personalised suggestions for how to avoid this.

Italian lendtech Credimi feeling dreamy with €10m funding (Fintech Futures) Rated: A

The investment funds came via United Ventures and Vertis, as well as some of the (unnamed) investors who took part in the first round of €8.5 million in September 2015.

Ignazio Rocco di Torrepadula, Credimi founder and CEO, and cool name winner, says: “Credimi’s initial start-up phase has been exhilarating, with results that have far exceeded our expectations.

SME Online Lender Creditshelf Names Fabian Brügmann New CFO (Crowdfund Insider) Rated: B

Creditshelf Aktiengesellschaft, a Germany based online lender, announced on Wednesday it has appointed Fabian Brügmann as its new CFO, effective on January 15, 2019. The lender reported that this appointment continues its planned expansion of its management team and in the newly formed position, Brügmann will be responsible for Finance and Investor Relations and directly report to Dr. Tim Thabe, Chairman of the Management Board and CEO of Creditshelf. He will not serve as a member of the Management Board himself.

According to Creditshelf, Brügmann previously worked as Director of Investor Relations at Commerzbank AG, where he was the contact for shareholders, fixed-income investors, and sell-side analysts. He joined the bank’s Corporate Development and Corporate Finance team in 2012. As IR Manager, Brügmann worked on the capital market communication for the “Commerzbank 4.0” strategy. He previously spent six years with the U.S. bank Goldman Sachs in Frankfurt and London.

Small Business Lender iwoca Appoints Seema Desai as COO (Crowdfund Insider) Rated: B

Online lender iwoca has selected Seema Desai as their new Chief Operations Officer (COO). iwoca provides loans of up to £200,000 to small and micro businesses across the UK, Germany, and Poland via its website and through partner integrations using its proprietary Lending API.

Desai joined iwoca in January 2017 as Head of People, developing the company’s organizational capabilities. Prior to joining iwoca, Seema led the development of the Innovative Finance ISA at peer-to-peer lender Zopa as Head of Product.

As COO, Desai is expected to help scale customer service that has helped propel iwoca to become one of the fastest growing business lender in the UK.

International

Prodigy Finance Launches Refinance Product for International Working Graduates Looking to Reduce Financial Costs (PR Newswire) Rated: A

Prodigy Finance, the pioneer in cross-border finance, announces the launch of a loan refinance product for international working graduates looking to reduce their student debt. The product will allow these alumni, who previously had limited options available to them, to save at least US$20,0001 over the life of the loan, by accessing lower rates and choices of terms.

The edge a serial entrepreneur sees in challenger banks (American Banker) Rated: A

Challenger bank entrepreneur Anthony Thomson has had several lives in banking and fintech.

In 2010, with Commerce Bank founder Vernon Hill, he co-founded Metro Bank, which started with one location in London and now has more than 56 branches and 2,800 employees. Thomson founded a second challenger bank in 2014 called Atom Bank, the first mobile-only bank in the U.K. As of March, it had 1.3 billion pounds of deposits and lent 1.2 billion pounds in mortgages and small-business loans.

Thomson is currently working on his third institution, called 86,400, a mobile-first challenger bank slated to launch in Australia in early 2019.

So it’s fair to say Thomson has learned a lot about what it takes to raise money and how to make it as a neobank entrepreneur.

The Ripple Effect: Crypto Backed Lending Platform Exploring XRP-Powered xRapid (The Daily Hodl) Rated: A

The crypto lending platform Nexo says it’s exploring Ripple’s xRapid, which uses XRP to boost the speed and lower the cost of cross-border payments. The announcement comes from Antoni Trenchev, the co-founder and managing partner of Nexo.

The company is backed by TechCrunch founder Michael Arrington and calls itself a “decentralized lending ecosystem that facilitates open access to credit anywhere and anytime.” It uses a long list of banking and exchange partners to deliver loans.

Nexo follows the payment company and Ripple partner TransferGo, which also revealed its interest in xRapid this week. Nexo recently added XRP to its platform, becoming one of the first lenders to use XRP as collateral.

MSTS Makes B2B Commerce Effortless for SMBs with Credit as a Service (Globe Newswire) Rated: B

MSTS, a global B2B payment and credit solutions provider, today announced that its innovative Credit as a Service solution is now available to mid-market and small businesses.

The original enterprise product, with a record of accelerating sales growth for companies by as much as 500 percent, has been optimized to meet the needs of businesses with simpler payment and credit processes. The cloud-based Credit as a Service solution for mid-market businesses can issue credit lines in less than a minute, automate the customer onboarding process and apply unique B2B customer invoicing, accounts payable and payment term requirements – providing customers flexibility and an enhanced experience.

MSTS works with B2B companies across transportation, manufacturing, retail and eCommerce.

Australia

Advice demand soaring in Australia despite trust issues (International Investment) Rated: AAA

The 2018 Financial Advice Report from Investment Trends found that an estimated 2.1 million adults intend to turn to a financial planner for advice, up from 1.6 million in 2017.

However, trust levels in banks and financial planners fell severely over that same period. On a scale of 0 to 10, banks fell from a trust rating of 5.5 to 4.8, while financial planners fell from 5.1 to 4.8.

The report found more than 40% of Australians do not believe the financial services and banking industries are meeting their obligations to everyday citizens.

Big banks welcome government competition for small end of town (Sidney Morning Herald) Rated: A

Australia’s biggest banks insist they welcome the prospect of looming lending competition from the federal government’s proposed $2 billion small business loan plan.

Under the policy unveiled by Treasurer Josh Frydenberg on Wednesday the government will establish a $2 billion securitisation fund which it will use to buy pools of small business loans from smaller banks and non-bank lenders.

Small business cheer $ 2b end to funding drought (Australian Financial Review) Rated: A

Small business and non-bank lenders have endorsed the Morrison government’s plans to inject $2 billion into the small and medium enterprise loan market.

But regulatory experts warned the government must avoid taking too much financial risk and not weaken bank rules in its quest to stimulate SME funding via a separate proposed bank-financed Australian Business Growth Fund.

Piper Alderman brings in financial services team (Australasian Lawyer) Rated: B

A national firm has added a financial services team, including a new partner in Sydney.

Andrea Beatty has commenced at Piper Alderman as a partner. She brought to the firm two other lawyers and an administrative assistant from NewLaw outfit Keypoint Law, where she was a consulting principal since 2016.

With more than 20 years’ experience in financial services regulation and corporate finance, Beatty is a former partner at legacy Mallesons Stephen Jaques and then at K&L Gates.

Asia

New securities law sparks concerns from expert (Vietnam News) Rated: AAA

Under the revised draft Law on Securities, the foreign ownership ratio in a public company is expanded up to 100 per cent. Previous regulations had capped foreign ownership at 49 per cent. However, this ratio in commercial banks, which is a much-concerned issue recently, was not mentioned in the draft. Why?

The draft has removed limits on how many voting shares foreign investors can buy in public Vietnamese companies. This indicates that the Government has sped up the equitisation process in State-owned enterprises, especially in non-essential sectors that are not too sensitive to the economy. However, under the draft, some conditional business lines, such as commercial banks, would retain their existing 30 per cent limit. I agree with this provision of the drafting agency.

How Standard Chartered Bank is tackling digital disruption (Tech in Asia) Rated: A

While banks have not been immune to the technology bug that has spread in the last few decades, digitization in the industry has only largely been implemented “for purpose in the back end,” according to Michael Gorriz, group chief information officer at Standard Chartered Bank.

“Fifty years ago, we introduced mainframes. We took paper ledgers and put them into computers,” the CIO explains.

But the emergence of a tech-savvy millennial generation is bringing about “the first real massive change in banks since the inception of banking,” he says. As such, banks like Standard Chartered have to digitize front-facing processes or risk losing their customers.

Eurasia

Russian Online Lender MFC Zaymer Joins Robo.cash (Crowdfund Insider) Rated: AAA

Automated peer to peer platform Robo.cash has issued a note saying Russian microfinance company MFC Zaymer is joining their platform. The company operates Zaymer.ru that offers short-term (payday) loans with interest rates for investors of 14% in Euros and up to 18% for loans originated in Rubles.

Africa

Nigeria dials up mobile banking revolution (Financial Times) Rated: AAA

Nigeria’s central bank is looking to increase access to millions of people by opening up the banking system to non-financial companies for the first time; South African telecom operator MTN is set to be the biggest beneficiary with more than 50 million customers located in Nigeria; MTN is planning to apply for a banking license soon with the hopes of having their Mobile Money product available in country by Q2 2019; more than 60 million people in Nigeria do not have bank accounts, showing there is an enormous opportunity for telcos to expand the banking footprint.

Authors:

George Popescu
Allen Taylor

Monday August 6 2018, Daily News Digest

China alternative assets

News Comments Today’s main news: Barclays buys stake in MarketInvoice. N26, Revolut are coming to America. Zopa raises 44M GBP for new bank. China private equity funds suffer. Linked Finance ink 10M Euro in loans in Q2. Today’s main analysis: The states where payday lending charges almost 700 percent interest. Today’s thought-provoking articles: PeerIQ’s MPL Securitization Tracker. Debut of the […]

China alternative assets

News Comments

United States

United Kingdom

China

European Union

Other

News Summary

United States

Will Europe’s fintech banks conquer North America? (AltFi), Rated: AAA

Revolut and N26 will be launching in the US soon, but what sort of market will they be entering? How are local banks adapting their offerings to suit younger users? And what will be the impact of the newly-announced bank charters for fintechs?

PeerIQ’s MPL Securitization Tracker for 2Q2018 (PeerIQ), Rated: AAA

  • Twelve marketplace lending securitizations priced this quarter totaling $5.0 Bn, the highest level of quarterly issuance, representing 36% growth YoY.  To date, cumulative issuance equals $38.4 Bn across 126 deals.
  • We observed spreads widening and yields rising on new issuance. Weighted average all-in yields on consumer deals increased from 2.9% to 4.2% QoQ, and on student deals from 3.0% to 4.5% QoQ.
  • All deals issued this quarter except SoFi’s student loan passthrough securitizations were rated.   
  • Tranches continue to get upgraded. So far, ratings’ agencies have upgraded 51 consumer MPL tranches and 67 student MPL tranches that are outstanding.
  • Citigroup, Deutsche Bank, and Credit Suisse continue to top the issuance league tables with 54% of MPL ABS transaction volume.
  • Freedom Financial issued its inaugural deal and OnDeck returned to the market. SoFi issued over $2 Bn in student loan passthrough securitizations.
Source: PeerIQ

Debut of the OCC’s FinTech Charter + Supervisory Standards (PeerIQ), Rated: AAA

The US economy added 157k jobs in July and the unemployment rate dropped to 3.9%. Wage growth came in strong at 2.7%, potentially fueling inflation down the road and keeping the Fed on its stated rate hike path.

OCC Asserts its Authority and is Open to Accepting SPNB Charters

Immediately following the report, Joseph Otting, Comptroller of the Currency, announced that the OCC would start accepting applications from “fintech companies that are engaged in the business of banking but do not take deposits.”

An SPNB can engage in a limited range of banking or fiduciary activities like credit card operations, taking deposits, paying checks, lending money, community development, or cash management activities. The policy is a significant development as companies with the Fintech charter would be able to perform banking activities like lending and payment processing nationally.

Who are the Likely Winners and Losers?

The long-term winner of the charter is the US consumer who will benefit from greater competition, innovation, and access to credit. Payments companies that seek to compete with Visa/Mastercard also stand to benefit. Lenders that qualify for the charter may also have a competitive advantage. Payments arms of firms like Google, Apple, Amazon and PayPal would fit the profile, as well as large non-bank lenders that can demonstrate sustainable profitability de-risked their business models. Fintechs that have liquidity, funding, or going-concern risks will struggle to obtain charters.

Less is more for OCC’s fintech financial inclusion plans (American Banker), Rated: A

The Office of the Comptroller of the Currency is threading a tricky needle.

It has affirmed that it plans to evaluate fintech charter applicants based on their fair lending efforts, but it’s pulled back on specifics for how that process might work. That has made some consumer groups nervous.

The OCC published an updated version of its licensing manual supplement for fintechs on July 31, in connection with an announcement that it’s begun accepting applications for fintech charters.

Fintech charter: Be wary of innovating into another crisis (The Hill), Rated: A

But before we allow fintech firms to bound over the regulatory mound, it’s important to take a hard look at why we regulate the financial services sector so thoroughly to begin with.

Many also claim that fintech will bank the unbanked and lead to financial inclusion. The only thing standing in the way of all of this change and disruption, many claim, is overbearing government regulation.

With OCC’s door officially open, will fintechs enter? (American Banker), Rated: A

Fintech companies now have the federal option they have long sought after the Office of the Comptroller of the Currency green-lighted firms to apply for a special-purpose bank charter. But winning OCC approval on charter bids will not be a walk in the park.

One day after the OCC announcement, some fintech firms signaled clear interest in the charter. But the agency’s decision also prompted a slew of additional questions, including whether firms would be able to meet the regulator’s tough criteria, and whether state regulators would continue to fight

Does a Bank Charter for Square Still Make Sense? CEO Jack Dorsey Thinks So (Bank Innovation), Rated: A

POS payments provider Square is still interested in pursuing a bank charter, but how? It may be more challenging given that the company will be paying more attention to its customer-facing prepaid products like Square Cash and its Cash Card, according to CEO Jack Dorsey in the company’s earnings call yesterday.

This map shows the states where payday loans charge nearly 700 percent interest (CNBC), Rated: AAA

Some short-term loans cost over 20 times more in interest than the average credit card. And yet one in 10 Americans have used them.

In the U.S. today, these loans are a $9 billion business. In the past two years, 11 percent of U.S. adults say they’ve taken out a payday loan, according to a recent survey of approximately 3,700 Americans that CNBC Make Itperformed in conjunction with Morning Consult.

Source: CNBC

This Rebrand Is Not Barking Up The Wrong Tree (Forbes), Rated: AAA

For 

$ 203.49 Million in Sales Expected for Elevate Credit Inc (ELVT) This Quarter (Fairfield Current), Rated: A

Equities analysts expect Elevate Credit Inc (NYSE:ELVT) to announce sales of $203.49 million for the current fiscal quarter, according to Zacks. Two analysts have made estimates for Elevate Credit’s earnings, with the lowest sales estimate coming in at $201.00 million and the highest estimate coming in at $205.97 million. Elevate Credit reported sales of $172.85 million in the same quarter last year, which indicates a positive year-over-year growth rate of 17.7%. The business is scheduled to announce its next earnings report on Monday, October 29th.

NCUA’s Proposed Payday Alternative Loans Unattractive to CUs: Trades (CU Times), Rated: A

A new payday alternative program proposed by the NCUA is unlikely to convince many more credit unions to offer short-term loans because the loan terms are too prescriptive, credit union trade groups said.

Why Real Estate Deals, Not Startups are the Big Success Story of Equity Crowdfunding (Crowdfund Insider), Rated: A

In the year after Title III went into effect, startups received only $38 million in equity crowdfunding, according to Bloomberg—an amount that amounted to “a rounding error” in the larger system.

Before the JOBS Act, there were three formidable barriers to widespread individual investment in commercial real estate.

  1. Limited access to deal flow
  2. Inconvenience
  3. High minimums

Online crowdfunding has eliminated all three barriers

To begin with, the process is far more transparent and accessible, with minimum investments dropping to as low as $10,000.

ICBA calls for a new FDIC moratorium on industrial loan charter applications (American Banker), Rated: A

Renewing longstanding opposition to industrial loan charters, the Independent Community Bankers of America urged the Federal Deposit Insurance Corp. to impose a two-year moratorium on such applications.

The trade group also pressed the FDIC to reject an application from the student loan servicer Nelnet for an industrial loan charter.

Lenders One Names Michael Kuentz as Chief Executive Officer (Altisource), Rated: A

Lenders One Cooperative, a national alliance of independent  mortgage bankers, announced that Michael Kuentz has been promoted to the role of Chief Executive Officer of Lenders One by its Board of Directors. Mr. Kuentz previously held the title of President. In his new role, he will assume responsibility for Lenders One’s day-to-day operations and strategic execution as well as continue to lead and manage the cooperative’s sales effort.

United Kingdom

Barclays takes stake in SME lender MarketInvoice (Banking Tech), Rated: AAA

Barclays has taken a “significant” minority stake in UK-based SME lending platform MarketInvoice.

Details were not disclosed, because we live in the age of secrecy, but the bank says the deal is a key part of its plans to invest in new business models for growth, and MarketInvoice’s ambition to broaden its reach across the UK.

P2P lender Zopa raises £44m to fund new bank (Financial Times), Rated: AAA

Zopa has raised £44m in a new funding round to aid its expansion into traditional banking as its traditional peer to peer business comes under pressure from regulators.

Wonga investors inject £10M so cash-strapped payday lender can fund claims (TechCrunch), Rated: A

Yesterday Sky News reported that those same two, Accel Partners and Balderton Capital, are among a group of Wonga investors that have agreed to inject a further £10M (~$13M) into the business to help fund compensation claims related to its past censured practices.

Can this new breed of robo-advisers help you take control of your money? (The Telegraph), Rated: A

Savers have historically been forced to choose between picking and managing their own investments, paying for financial advice, or, recently, handing their money over to a “robo adviser” to do it for them.

China

China private equity funds suffer wave of closures (Financial Times), Rated: AAA

Chinese alternative asset managers have become the latest casualty of the country’s crackdown on debt and financial risk, with a record number of private equity and hedge funds dissolving in recent months as new regulations limit their fundraising.

In the first six months of this year, the Asset Management Association of China (Amac) — a government-controlled industry body — “lost contact” with 163 private fund institutions, more than 70 per cent of the total for which contact was lost for 2017.

Source: Financial Times

Chinese P2P chief Yao Kunjie makes the Forbes high achievers list while under investigation (SCMP), Rated: A

Yao Kunjie, 28, is the CEO of peer-to-peer lending platform Beimi Wallet and was named on the financial sector list on Thursday.

Forbes magazine puts out regional lists of high achievers born after January 1, 1988, in 20 sectors every year.

The announcement came just a week after Shanghai police said Yao had been detained on July 13 on suspicion of “illegally absorbing public funds”, without elaborating, in a statement last Saturday.

Qudian Tries to Distance Itself from Other P2P Lenders (Capital Watch), Rated: A

Qudian Inc. (NYSE: QD) defended its business model Friday, saying that it is not undergoing the same “[volatility] and uncertainty” suffered by China’s broader peer-to-peer industry.

The announcement sent the company’s stock up nearly 5 percent mid-afternoon to $7.59 per American depositary share.

Source: Capital Watch

China lends trillions to SMEs, farmers as part of inclusive finance push (Global Times), Rated: A

For example, banks’ balance of loans to farmers stood at 30.95 trillion yuan ($4.53 trillion) as of the end of 2017, up 48.2 percent from 2013. The balance of lending to small and micro-sized businesses stood at 34.74 trillion yuan in 2017, up 73.1 percent from 2013, according to Feng.

European Union

€10m loans mark record quarter for Linked Finance (Independent), Rated: AAA

Linked Finance, an Irish peer-to-peer (P2P) lending platform, recorded its strongest quarter to date in the three months to the end of June, facilitating over €10.1m to Irish SMEs.

This followed on from a strong start to 2018, with total lending for the year now more than €18.7m, up 65pc on the same period in the previous year.

The increase in lending is down to both the volume and size of loans. The number of loans that went live on the platform rose by 39pc in the period to 335, with average loan size up 19pc to almost €56,000.

BANCO BNI EUROPA LAUNCHES EQUITY RELEASE IN SPAIN WITH ÓPTIMA MAYORES (Fintech.Finance), Rated: A

Banco BNI Europa launches equity release in Spain in partnership with Óptima Mayores, the Spain’s leading financial advisor specialized in this segment.

Altisource Names Justin Vedder as Chief Operating Officer of Origination Solutions (Altisource), Rated: B

Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”) (NASDAQ: ASPS), a leading provider of services and technologies to the mortgage and real estate industries, today announced the appointment of Justin Vedder as Chief Operating Officer, Origination Solutions.

International

How Fintex Capital Enabled the $ 30M Banco BNI Europa Investment in Upgrade Loans (Lend Academy), Rated: AAA

Last month we learned about the new $30 million investment received by Upgrade from the Portuguese digital bank Banco BNI Europa.

In reality BNI Europa did not actually purchase Upgrade loans, they invested in a privately placed bond that was backed by Upgrade loans. This bond was issued by Fintex Capital.

India

Regulations Shrink India’s Peer-To-Peer Lending Industry (Bloomberg Quint), Rated: AAA

When the Reserve Bank of India first brought out a discussion paper on peer-to-peer lending in April 2016, it said that there were 30 such start-ups in the country. It then proceeded to fashion a set of rules for the nascent but fast growing sector and came out with regulations in October 2017. Key among them was a requirement that peer-to-peer lenders register with the RBI.

Nine months since, only five of these lenders are registered in the ‘NBFC-P2P’ category, according to RBI data available until June 30, 2018.

This includes:

  • Fairassets Technologies India Pvt. Ltd.
  • Fincquare Fintech Pvt. Ltd.
  • Bridge Fintech Solutions Pvt. Ltd.
  • Bigwin Infotech Pvt. Ltd.
  • OHMY Technologies Pvt. Ltd.

Cashkumar foresees huge potential in online lending for short-term credit (The Hindu Business Line), Rated: A

Peer-to-peer (P2P) lending company Cashkumar, which offers short-term credit to borrowers, foresees huge potential to lend in the online space.

At present, the company services around 200 loans a month . It is targeting to service about 80 loans a day in the next six months, besides expanding operations to 20 cities by next year.

Asia

Japan’s Samurai Asset Finance Offers Loans Collateralized by Digital Assets (Bitcoin Exchange Guide), Rated: A

A Japanese firm listed on the Tokyo Stock Exchange recently unveiled loans that can be collateralized by three digital assets, namely BitcoinBitcoin Cash and Ethereum. As of now, the maximum amount borrowable is capped at 300 million yen (approximately $2.7 million).

Currently, the loan limits range from a minimum of 20 million yen ($180,000) to a maximum of 300 million yen ($2.7 million). The default repayment period is twelve months, although there are provision for extensions. The interest rates for these loans start from 7% to 155 annually, inclusive of commissions and extensions charges. If a lender fails to repay the loan in time, they will liable to a delinquency charge of 20% per year.

Crypto for real estate (Business Times), Rated: A

WE believe, in time, all real estate assets will reside on the blockchain – this is the grand vision of real estate entrepreneurs Julian Kwan and Alice Chen. The married couple – who co-founded Singapore-based real estate crowdfunding platform InvestaCrowd – has created a new product: RealFuel,

IMDEX ICO (IMDX Token): Decentralized Exchange & Crypto Banking Platform? (Bitcoin Exchange Guide), Rated: B

It’s difficult to ascertain much information about the people behind IMDEX. The company appears to have some connection to a Korean company called Techton Soft that was established in 2016. The Techton Soft website indicates that the company specializes in investment trading solutions, peer-to-peer lending, artificial intelligence, and cryptocurrency exchange. The Techton site states that the company has 10 employees, making it a rather small operation, and lists a man named SangHyun Kim as the CEO.

Authors:

George Popescu
Allen Taylor

Monday July 23 2018, Daily News Digest

securitization

News Comments Today’s main news: OnDeck completes two international credit facilities. Elevate launches prime credit card for non-prime customers. RateSetter backtracks on Rolling Market rate changes. China’s P2P lender are falling like dominoes. Banco BNI Europa invests in US consumer loans. Today’s main analysis: Deloitte’s survey on fintech lenders. Today’s thought-provoking articles: An inside look at SoFi-Promontory Interfinancial Network […]

securitization

News Comments

United States

United Kingdom

China/Hong Kong

International

India

Other

News Summary

United States

Elevate launches prime credit card for non-prime consumers (Bankless Times) Rated: AAA

Elevate and Capital Community Bank of Utah announced the launch of Today Card powered by Mastercard. As the first non-prime credit card with a full suite of prime features, Today Card will be issued by Capital Community Bank of Utah and will specifically help expand access to credit for members of the New Middle Class, the nearly 160 million non-prime Americans who are too often overlooked by mainstream financial institutions.

An Inside Look at Bank/Fintech Partnerships: Promontory Interfinancial Network and SoFi (Lend Academy) Rated: AAA

The recent surge in financial innovation has caused many community banks to rethink how they are serving their customers and what they can do to improve that experience. I recently spoke with two community banks about their decision to buy SoFi loans using Promontory Interfinancial Network’s service.

I spoke with Brian Plum, CEO of Blue Ridge Bank, which is a Virginia based community bank with mortgage offices in North Carolina, and Nicole Austin, Chief Lending Officer of Pioneer Bank, which is a New Mexico-based community bank.

Both banks had experience in looking at fintech partnerships before moving ahead with their decision on the SoFi program. They both said that as lending and banking changed, they needed to better understand how new technology could help their businesses.

Lowest Jobless Claims since 1969, Strong Bank and Card Issuer Earnings (PeerIQ), Rated: AAA

Blackstone is launching a $10 Bn direct lending fund focused on middle-market corporate credit opportunities. The search for yield has pushed investors into higher-yielding middle-market lending, with direct lending funds raised $54 Bn in 2017. Consumer, small-business and middle-market lending have been a consistent theme among investors starved for yield by low global interest rates.

Deloitte’s Survey on Fintech Lenders

The main take-aways from the study:

1. 7% of respondents listed cost of funding as one of the top 3 concerns, with liquidity and an inability to diversify rounding out the top 3.

Source: Deloitte, PeerIQ

PeerIQ view: Securitization remains the cheapest source of large-scale financing. MPL bonds continue to go mainstream as credit spreads tighten vs comparable consumer credit issuers. Emerging issuers continue to take efforts to build a brand in the ABS markets via repeat issuance.

Source: Deloitte, PeerIQ

3. Investors remain interested in the online lending space with $11 Bn in equity capital expected to flow into the sector in 2018. The number of startups has decreased, suggesting a maturing market and some consolidation.

Why You Should Bank Without a Branch (US News) Rated: AAA

The first online banks hit the U.S. market more than 20 years ago, attracting customers with higher interest rates and lower fees. While some early innovators are no longer operating, others have evolved. Take ING Direct, for example, which was acquired by Capital One and transformed into Capital One 360 in 2012, or Ally Bank, which is one of the most dominant names in the online banking market.

Today, however, these banking institutions face competition from new direct banks as well as traditional banks that are looking to expand using the online-only model. For instance, Finn by Chase and Marcus by Goldman Sachs bring digital banking to areas in which the companies have no physical presence.

Long-Term Business Loans Available Today (LendEDU) Rated: A

Fortunately, some lenders offer long-term small business loans, which give borrowers the opportunity to repay the loan over a longer period of time (typically up to 25 years).

Long-term business loans certainly do exist but if you’re hoping to score one, you’ll need to have an established business (i.e., no startups or new businesses) and have good business credit.

There are a variety of lending institutions, both traditional and non-traditional, that offer long-term financing, so it’s always best to review all your options, including those offered by your chosen banking institution. However, there are a few lenders that consistently top the charts, and those that follow are known to offer competitive rates, flexible terms, quick access to funds, and positive customer feedback.

Compare Long-Term Business Loans

Loan Amounts

$5,000 – $300,000

$25,000 – $500,000

Term Lengths

Up to 60 months

Up to 60 months

APR Range

10% – 35.5%

4.99% – 26.99%

Walmart’s pay-advance app Even used by 200,000 employees (American Banker) Rated: A

Walmart’s experiment with offering Even.com’s money management and pay-advance app to employees appears to be off to a good start.

The retailer launched the app to employees in December. On Thursday, Walmart and its fintech partner announced that 200,000 Walmart employees are now using it. (The retailer employs 1.5 million people in the U.S.)

About 75% of associates use the app every week and 46% use it every day.

DFS Report Indicates Increased Level Of Online Lending In New York (Mondaq) Rated: A

The New York State Department of Financial Services (“DFS”) found that online marketplace lending has increased dramatically since 2015. In the newly published report, DFS analyzed responses from a “New York Marketplace Lending Survey” along with comments from relevant stakeholders.

Based on data from 2017, DFS found that:

  • the total number of loans increased approximately 118% and the total dollar amount of all loans increased approximately 42% as compared to 2015 levels;
  • many more individuals were being served in this market than small businesses;
  • lenders generally charge a variety of fees (e.g. origination fees, closing fees, processing fees, maintenance fees, transactional fees, and penalty fees), with origination fees being the most common;
  • delinquent loans (both to individuals and businesses) represent approximately 11% of the total number of loans outstanding as of the end of 2017; and
  • respondents used “internal models with various inputs provided by the applicant such as employment history, business history, bank statements and tax records” to determine whether a borrower qualifies for a loan.

LendKey, Gradifi Help U.S. Employers Offer a Student Loan Refinance Benefit to Employees (Business Wire) Rated: A

Gradifi today said it is now offering access to LendKey’s nationwide network of lenders through Gradifi Refi, a student refinance program for employers seeking to help their employees save money or reduce the monthly payment on their student loans.

Gradifi Refi is one of three employee benefit solutions from Gradifi that enable employers to positively impact their employees’ financial well-being. Gradifi’s SLP Plan (Student Loan PayDown) benefit helps employees pay off their student loans faster through employer-sponsored contributions to their student loan provider. The College SaveUp benefit helps employees save for their children’s education and avoid further student debt through employer contributions to an employee’s 529 college savings plan account.

LendingTree Announces Top Customer-Rated Lenders by Loan Product for Q2 2018 (Markets Insider) Rated: B

Mortgage Category

#1 Winner:
loanDepot, LLC

Personal Loans Category

#1 Winner:
LendingClub

Home Equity Loans Category

#1 Winner:
First MidWest

P2Bi partners with Amalgamated Bank (Bankless Times) Rated: B

P2Binvestor (P2Bi), a marketplace lending platform offering crowdsourced, asset-secured lines of credit to growing companies, today announced a partnership with Amalgamated Bank, a socially responsible bank based in New York.

The P2Bi bank partnership program gives growing businesses a way to quickly access capital while allowing banks to increase their addressable market and improve their conversion rates. This particular alliance will enable Amalgamated Bank to continue to help fund emerging socially responsible businesses.

Colonial Partners with Roostify for Superior Online Mortgage Experience (PR Newswire) Rated: B

Starting today, Roostify’s online, mobile-friendly application and loan collaboration tools will be available to all of Colonial retail mortgage branches and its Home Loan Center national call center.

United Kingdom

RateSetter backtracks on Rolling Market rate changes (Peer2Peer Finance) Rated: AAA

RATESETTER has reversed its decision to stop investors setting their own rate for capital reinvesting on its Rolling Market.

The peer-to-peer lender implemented an overhaulof its popular Rolling Market product on 6 June, no longer allowing investors to set their own rate on reinvested money.

In an email to customers, the lender said feedback demonstrated how much investors valued the option to set their own rate for capital reinvesting.

Some challenger banks are challenging (The Finanser) Rated: AAA

The UK’s challenger banks are busy getting on with it. They’ve got their licences, they’ve deployed their services, they’re partnering with third parties and creating marketplaces. Much of this was cited in a report by CBInsights, comparing the features of the five most notable new ones: Atom, Starling, Monzo, Revolut and Tandem.

N26 were also included, but is not a UK start-up and their report builds on the one I blogged about last month from Optima. The thing I took from the CBInsights report is the massive numbers of users that Revolut and Monzo have already gained. At that time, it was 1.5 million for Revolut and 500,000 for Monzo.

Starling marketplace grows with Growth Street addition (FinTech Futures) Rated: A

Growth Street will be the first SME finance provider on Starling Bank’s in-app marketplace, giving users access to services like pensions, insurance and loyalty schemes.

This partnership is Growth Street’s first marketplace integration, and represents the first live use of its third-party API. The firm is a P2P platform that matches investors’ funds with growing SMEs.

MarketInvoice looks to bolster its financial crime prevention (Peer2Peer Finance) Rated: A

MARKETINVOICE is looking to bolster its financial crime prevention with the appointment of dedicated anti-money laundering (AML) officer.

All regulated firms have to have someone in the business with responsibility for AML monitoring, with some choosing existing staff and others making it a dedicated role.

The peer-to-peer business finance platform is advertising for a AML/financial crime officer to sit within its legal unit.

The IFISA Phenomenon – The New Way to Invest (Dispatch Weekly) Rated: A

There are different types of ISAs including Cash ISAs and Stock & Shares ISAs but the Innovative Finance ISA (IFISA) is fast becoming the new trend in the ISA market.

Source: The Weekly Dispatch

Home loans turned us into a hot property, says Christian Faes, founder of lendinvest (The Sunday Times) Rated: A

Christian Faes could hardly have picked a worse time to get into mortgage lending. It was 2008, financial markets were in free fall and most people were more concerned about putting food on the table than buying a house.

That did not deter Faes, a former lawyer who had moved to London from Australia’s Gold Coast 10 years earlier. He co-founded Montello Bridging Finance in a “windowless serviced office” in the City and set about cold-calling potential investors. “The idea was really sound, but it wasn’t the best moment to be setting up a mortgage lending company,” said Faes, 41.

China/Hong Kong

China’s Peer-to-Peer Lenders Are Falling Like Dominoes as Panic Spreads (Bloomberg) Rated: AAA

The shakeout in China’s $192 billion peer-to-peer lending industry is accelerating at a rapid clip.

At least 118 platforms have failed this month through early Friday, according to Shanghai-based Yingcan Group, whose tally for July stood at 57 just three days ago. The number of failures, which includes platforms that have halted operations or come under police investigation, is already the highest in two years with more than a week left in the month.

China’s clampdown on financial risk has weighed on P2P platforms for the past two years, but the pressure has intensified in recent months after the country’s credit markets tightened and the banking regulator issued an unusual warning to savers that they should be prepared to lose all their money in high-yield products. While that has triggered bouts of panic among users of smaller P2P platforms, there’s little evidence that the turmoil has spread to more systemically important parts of China’s financial sector.
Source: Bloomberg

Chinese Investors Reel as Internet Lenders Close (Wall Street Journal) Rated: AAA

A string of Chinese internet lenders have shut their doors in recent weeks, stranding investors as the economy slows and regulators tighten controls over an unruly side of the fintech sector.

Across China, more than 200 internet-based fund managers since late June have either shut down, closed parts of their operations or are reeling from cash crunches, missing executives and other problems, according to industry tracker Wangdaizhijia.

The tide began to turn against the sector as an end-of-June deadline for new stringent registration regulations approached. With a slowing economy making it difficult for some companies to pay back loans, some lenders decided to shut down, analysts said. Investors, already souring on the sector, began pulling out funds, further pinching the lending platforms.

Source: Wall Street Journal

Distributed Credit Chain wants to use blockchain to prevent the next financial crash (Tech World) Rated: A

Figures from Bloomberg Economics based on data from the People’s Bank of China indicated that three major assets of shadow banking – trust lending, entrusted loans and banks’ acceptances – increased by $555 million in 2017. Entrusted loans, for example, are when businesses loan money to each other, using banks as intermediaries. Meaning that larger (state owned) companies may lend money to smaller companies and make a profit from the differences in interest.

Micro-lending is another phenomenon that has ballooned in recent years, with a proliferation of online lending or peer-to-peer lending platforms springing up. Outstanding debts on these sites increased by 256 percent between October 2015 and October 2017, topping 1.2 trillion yuan (over $179 million).

These issues have been acknowledged by the Chinese government, with China’s top banking regulator, Guo Shuqing, promising the shadow banking industry will be ‘dismantled’.

Shanghai vows to ramp up enforcement of P2P lending platform regulations (Global Times) Rated: A

The Shanghai municipal government has announced it will soon launch a campaign to enforce compliance of financial regulations on the city’s peer-to-peer (P2P) online lending platforms, according to a report by domestic website the Shanghai Observer, in a sign that local authorities will put order into China’s troubled fintech sector.

The Shanghai Office of the Leading Group for the Special Campaign against Internet Financial Risks said that it will  investigate the local online lending industry and severely punish those committing illegal fundraising and financial fraud, as well as fugitive owners. The authorities have reasserted their support of law-abiding firms in a bid to promote a more orderly internet finance industry.

In the last 50 days, up to 163 P2P lending platforms have essentially gone out of business, stopping cash withdrawals from customers, and many have seen their owners run away and declared fugitives,  chinanews.com reported.

Jim Rogers-backed ITF to miss August deadline for virtual bank licence in Hong Kong (South China Morning Post) Rated: B

ITF, a fintech company backed by US veteran investor Jim Rogers, plans to apply for a virtual bank licence in Hong Kong, but will not rush to meet the first application deadline on August 31.

The fintech firm would prefer to wait for more details about regulations, according to its adviser Ignious Yong.

European Union

Creditshelf raises €16.5m through landmark IPO (AltFI News) Rated: AAA

German mid-market lending platform Creditshelf has successfully closed its IPO, raising €16.5m at the fixed price €80.00 per share.

In the end, the company had no need of its €15m backstop order, provided by Hevella Capital GmbH & Co. KGaA, part of a group controlled by Rolf Elgeti. But Obotritia Capital KGaA, which is also part of the group, subscribed for an additional amount of €1.5m, underlining its support for the firm.

International

OnDeck Completes Two New International Credit Facilities (PR Newswire) Rated: AAA

OnDeck (NYSE:ONDK) announced today the closing of an AUD75 million asset-backed revolving credit facility with Credit Suisse, and the closing of a CAD50 million asset-backed revolving credit facility with Crédit Agricole, to finance OnDeck originations in Australia and Canada, respectively.

The new Credit Suisse facility will be used to refinance OnDeck Australia’s current loan book at a significantly lower cost, as well as to fund future originations. The Crédit Agricole facility is the first for OnDeck Canada and provides the business with access to CAD25 million of committed capacity and an additional CAD25 million of capacity available at the discretion of the lenders.  Both facilities are floating rate and have an initial weighted average interest rate of approximately 5.6%. The Credit Suisse facility and Crédit Agricole facility are scheduled to mature in June 2020 and June 2021, respectively.

Banco BNI Europa invests in US consumer loans via Fintex and Upgrade, Inc (Fintech Finance) Rated: AAA

European challenger bank Banco BNI Europa and Fintex have entered into a strategic partnership to invest in Upgrade’s consumer loans and expand access to affordable credit to consumers in the United States. Banco BNI Europa, which is active across Europe, now invests in US consumer loans through Upgrade, one of the fastest growing platforms in the US. This loan purchase programme was implemented by Fintex Capital, which issued a bond to Banco BNI Europa backed by the portfolio and Fintex acts as asset manager for the underlying loans.

As part of the agreement, Banco BNI Europa committed an initial sum of USD 30 million. Banco BNI Europa has already invested in US consumer loans originated on platforms like Lending Club and Prosper through a third-party fund.

How the Blockchain is Helping Redefine Business Financing (Equities) Rated: A

In fact, one report by CB Insights found that about 29 percent of startups failed because they ran out of working capital, which speaks volumes about the morbid state of business financing for startups and budding businesses.

Consequently, business financing has become one of the many areas of fintech that could benefit immensely from blockchain, the decentralized ledger that has been disrupting industries for over a decade.

Here are a few ways that showcase why blockchain could change the way enterprises access funding.

Credit Rating Firm Backs $ 8 Million Fundraise for Crypto Alternative (CoinDesk) Rated: A

A startup looking to build a credit scoring protocol on top of the recently-launched Ontology blockchain has raised $8 million in seed funding.POINTS, founded in 2017, said it drew funding from a mix of traditional venture capitalists including Danhua Capital and Ceyuan Ventures, a backer of OKCoin. Other participants in the seed round include the Ontology Foundation as well as Zhong Cheng Xin Credit Technology, China’s first nationwide credit rating agency.The new capital will be used to expand the company’s engineering team in an effort to speed up its development of blockchain-based know-your-customer (KYC) and credit scoring applications. The idea is to build its protocol on top of a decentralized network and empower apps that can eliminate repetitive processes around identity.

Bitcoin Holds the Line, Salt Slumps, Dash Drives Onward (Blockonomi) Rated: A

The crypto lending platform Salt Lending just got a dose of some strange news when the company suddenly released an announcement stating the appointing of what they call an interim CEO. The former CEO ,who was essentially the face of the company and one of the cofounders, Shawn Owen, appears to have left the company.

But the circumstances under which he left are unclear.

Salt tokens (that run on Ethereum) have been on a strong downward slide for the last few months, and are currently sitting at just over one dollar each. The tokens entered the market at the three dollar range and so are down by more than 66% post ICO. It is also unclear as to whether or not Salt Lending is still operating or giving out new crypto-to-cash loans.

RAD Lending: The Future of Crypto-Assets Backed Lending (News BTC) Rated: A

The growing user base of cryptocurrency and related products has skyrocketed, with the highest number originating from countries like New Zealand, Denmark and Belgium. The community growth is expected to follow the upward trajectory to hit 100 million users soon.

RAD Lending platform might just be the push the market needs to fill the gap between crypto holdings and real-life fiat spending. The P2P lending platform from RAD will act as a matchmaker between loan requests and funding proposals.

India

Digital lending to become $ 1 tn opportunity in India over next 5 years (Money Control) Rated: AAA

A Boston Consulting Group (BCG) report suggests that digital lending in India will become a $1 trillion opportunity in the next five years.

According to the report, four fundamental drivers that pushed the space are internet giants that changed the way consumers behave, rapid growth in technological advances including the proliferation of smartphones and consequent increase in the consumption of data. Also the digital market lending prospered under supportive regulatory conditions across the globe.

Funding in Indian startups this week (16 July-21 July) (EnTrackr) Rated: AAA

This week 16 startups received funding, of which 10 received a total sum of about $228.5 million. Among them, BookMyShow raised the highest investment of $100 million, followed by Cars24 which raised about $50 million.

Meanwhile, funding for six of the total funded startups remained undisclosed.

Source: EnTrackr

Lending platform LenDenClub gets NBFC-P2P certification from RBI (MediaNama) Rated: A

P2P lending platform LenDenClub has received its NBFC-P2P certification from the Reserve Bank of India (RBI), the Economic Times said. The RBI issued those guidelines last October, to register and accredit P2P lending firms that resell loans from individuals who have money to invest.

RBI’s registry will help solve problem of credit shortage: iSpirt’s Sharad Sharma (Livemint) Rated: A

Out of the 8.8 million businesses in India that file taxes, at least 6.6 million businesses do not have access to the credit sources such as banks, non-banking financial companies (NBFCs), and upcoming online lenders. This is a problematic situation for both lenders, and for businesses (especially small businesses), looking for capital loans.

The problem of credit shortage for small businesses is daunting, but the regulators in India have already set things in motion to address the issue. According to Sharma, the revamped goods and services tax (GST) structure, the Reserve Bank of India’s (RBI’s) new public credit registry (PCR) initiative, and UPI (Unified Payments Interface) 2.0 will solve the shortage of data for lenders.

Here’s a look at some brands that are making India artificially intelligent (Business Standard) Rated: A

The rise of promising tech-startups has been successful in ushering India into a dawn of technology.

While AI is believed to revolutionize the current modus operandi and bring about fast-paced automation and efficiencies, it still remains an abstract topic, palled by a lack of nuanced understanding amongst the general public.

Here are some enterprises that are integrating AI in everyday tasks:

Faircent: Making Lending more conducive with AI & Machine Learning

If you think AI is only limited to the IT industry, think once again. Faircent, India’s largest P2P (peer-to-peer) lending platform, has been utilizing the technology to provide users with money during your financial crunch. Doing away with methodologies of conventional lenders (which can often prevent a creditworthy applicant from securing a loan,) the platform leverages Machine Learning and Artificial Intelligence to enhance the effectiveness of its credit profiling and assessment.

Ebix acquires enterprise lending software company Indus for $ 29 M (Your Story) Rated: A

Global on-demand software provider Ebix Inc on Friday announced the acquisition of Indus Software Technologies Pvt. Ltd. (Indus), a global provider of enterprise lending software solutions to financial institutions, captive auto finance and telecom companies, for approximately $29 million, including $5 million of contingent earn-out.

Further to this acquisition, key Indus business executives will become a part of the combined EbixCash senior leadership. The acquisition will increase the employee strength of Ebix in India by 900, to approximately 7,200 employees.

Canada

Fintech OnDeck Canada lines up $ 50-million credit facility from Crédit Agricole (Financial Post) Rated: AAA

OnDeck Canada, the local online arm of the U.S. headquartered OnDeck now has a $50-million asset-backed credit facility, provided by Crédit Agricole, to fund its loans. According to a recent ranking of assets, the French bank is the world’s ninth largest. Its Montreal office offers commercial and investment banking services.This is the first time that OnDeck Canada — which has originated $180 million in small business loans since 2014, all made using a “wide spectrum of data, technology and analytics” — has arranged funding from a source other than its parent.There are two parts to the three-year facility that will finance loan originations created by OnDeck Canada: a $25-million committed facility and an extra $25 million that can be drawn if needed. OnDeck provides term loans up to $250,000 and revolving lines of credit of up to $50,000 to small business.

Authors:

George Popescu
Allen Taylor

Loan Amounts

$5,000 – $300,000

$25,000 – $500,000

Term Lengths

Up to 60 months

Up to 60 months

APR Range

10% – 35.5%

4.99% – 26.99%

on LendingClub’s secure website

on Funding Circle’s secure website

Monday June 11 2018, Daily News Digest

credit card issuers

News Comments Today’s main news: How to invest in the sharing economy. Elevate expected to report $184.82M in sales. Funding Circle scraps downloadable loanbook. Ant Financial valued at $150B. Standard Chartered to apply for virtual bank license in Hong Kong. Today’s main analysis: Marcus update. Today’s thought-provoking articles: PeerIQ lending earnings insights. Alternative uses of fixed-income markets. LendingTree Personal Loan Offers […]

credit card issuers

News Comments

United States

United Kingdom

China/Hong Kong

International

Other

News Summary

United States

3 Ways to Invest in the Sharing Economy (Motley Fool) Rated: A

While not a hard asset like a home or car, lending services have also come into the crosshairs of the sharing economy. Lending Club, the nation’s largest peer-to-peer lender, gets borrowers lower interest rates and smaller fees than a credit card or other traditional lending source typically offers by connecting them with investors on its online platform.

Since becoming a public company in December 2014, Lending Club revenue has soared more than 50% as seeking out alternative means of funding has increased in popularity. That sounds like a great investment, but Lending Club has actually fallen on hard times. The stock is down 75% from its 2014 debut as a result.

Other concerns, like increased competition, have surfaced: Goldman Sachs‘ online-only bank Marcus is just one of them. But there is some hope for this “sharing” company as first-quarter 2018 revenue increased 22% on an 18% increase in lending origination.

Lending Earnings Insights: 2Q2018 (PeerIQ) Rated: AAA

Where are we in the credit cycle? Most lenders see the US consumer in a good place with high consumer confidence, home prices, and higher take-home pay from tax cuts. The economy is at or near full employment with low wage and productivity growth. GDP gains are driven by consumer spending, fueled in term by consumer credit (8% YOY growth – well ahead of GDP and wage growth). Over the next few quarters due to stimulus and short-term effects there may be robust GDP prints, however, 16 to 24 months out we expect a lower pace of growth and heightened recession risk.

Credit re-normalization continues across all major lending groups. Credit performance this quarter is generally in-line with expectations. We see some of the lowest charge-offs and delinquencies at near-prime and retail lenders such as Enova and OneMain. Online lenders such as LendingClub have increased their charge-off estimates by ~50 bps.

Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions by 35% although loan growth was only 16% and Discover increased loan loss provisions by 26% on loan growth of 9%. Capital One saw a drop in loans outstanding.

Read the full report here.

Marcus Update (PeerIQ), Rated: AAA

GS Marcus Update

Personal loans are just the start, with possible expansion opportunities for Marcus into mortgages, credit cards, auto loans and insurance. There are 4 key product areas – Borrow, Spend, Save, Protect with 12 separate products listed with a focus on Clarity Money. Since its launch Marcus has served ~1.5 Mn customers with $3+ Bn loans originated and $20+ Bn in online deposits.

GS views their lack of legacy banking software as a competitive advantage and has invested heavily in building their platform. GS has invested, through capital spending and operating losses, $600 Mn, including reserves, up by $100 Mn.

GS is building Marcus as a business “for the next 50 years” but is expanding the personal loan program cautiously as the credit cycle may turn. GS wants to integrate the consumer platform with its wealth management business.

Source: Goldman Sachs

PeerIQ Webinar: Lending Earnings Insights Report – 2Q2018 (PeerIQ) Rated: B

PeerIQ is hosting a webinar by CEO Ram Ahluwalia on “Lending Earnings Insights 2Q2018” on Wednesday 6/13 at 3 p.m. EDT. We look forward to hosting you! Click to register and to add the invitation to your calendar.

$ 184.82 Million in Sales Expected for Elevate Credit (ELVT) This Quarter (StockNews Times) Rated: AAA

Equities analysts expect that Elevate Credit (NYSE:ELVT) will report $184.82 million in sales for the current quarter, Zacksreports. Two analysts have issued estimates for Elevate Credit’s earnings, with estimates ranging from $182.44 million to $187.20 million. Elevate Credit posted sales of $150.47 million during the same quarter last year, which suggests a positive year over year growth rate of 22.8%. The business is scheduled to issue its next earnings results on Monday, July 30th.

According to Zacks, analysts expect that Elevate Credit will report full-year sales of $803.08 million for the current fiscal year, with estimates ranging from $801.06 million to $805.10 million. For the next financial year, analysts expect that the firm will report sales of $930.53 million per share, with estimates ranging from $920.75 million to $940.30 million. Zacks’ sales averages are an average based on a survey of analysts that follow Elevate Credit.

Mulvaney Fires All 25 Members of CFPB Advisory Board (PJ Media) Rated: A

Mick Mulvaney, acting director of a controversial consumer finance bureau, fired an advisory board after the members criticized the new leadership for not taking their advice.

The Consumer Financial Protection Bureau (CFPB) announced Wednesday that the 25 current Consumer Advisory Board members will be replaced, and will be ineligible to reapply to the board, the Washington Post reports.

Eleven advisory board members held a news conference Monday calling out Mulvaney for canceling several meetings — which are required to take place under the Dodd-Frank Act which created the agency.

ALTERNATIVE USES OF THE FIXED-INCOME MARKETS (All About Alpha) Rated: AAA

The report, called “Building Resilience into Portfolios,” explains that the traditional use of fixed income in a portfolio is quite straightforward. That use generally involves a long position on debt of various sorts (sovereign, corporate, developed or emerging markets), that is relied upon to reap premiums from duration and credit risk.

But there are alternative uses of these instruments, and given the “rapid pace of change within fixed-income markets” in recent years they have become more available than ever, with the goal of securing absolute return, “steady positive returns above cash.”

These strategies include the exploitation of relative valuation differentials and/or the taking of short positions in order to profit from rising yields.

One obvious problem is that the central banks are about to start (in some jurisdictions have started) raising rates, reversing the tailwind that has benefitted the traditional use of FI in recent years.

Alternative investors in FX, though, have the flexibility to avoid such problems. They can “avoid issues, sectors, or sub-categories of assets altogether, as they see fit, investing solely in their highest conviction views.”

LendingTree Personal Loan Offers Report – May 2018 (Lending Tree) Rated: AAA

Offered APRs continue to rise for all borrowers, while lenders offer slightly lower loan amounts. Rate and loan amount offers varied widely among consumers, depending on factors including, but not limited to, credit score, income, and current debt obligations.

The most common reasons for seeking a personal loan are credit card refinancing and debt consolidation. These two categories comprise 63% of all loan inquiries.

Source: Lending Tree

Use Technology To Play The Real Estate Investment Market (Forbes) Rated: A

In Chicago, a new startup has introduced a tool that builds algorithms based on questions completed by the investor to establish the baselines. The tool then finds both on- and off-market deals that suit the preferences of the investor.

PayPal is launching a pop-up art exhibit in New York City (Tearsheet) Rated: A

PayPal wants its customers to get a tangible experience of what cash-back rewards look like, adding a physical and emotional association with the digital financial-services company.

PayPal is hosting a live walk-through pop-up exhibit in New York City on June 8 and June 9, the first time the company has hosted an experiential event of this kind. Anyone can attend the free event with music and refreshments. PayPal is the latest financial company to add realness to what many consumers see as abstract, transactional products.

Real Estate Crowdfunding Earns $ 10 Million in First Week (DS News) Rated: A

Atlanta-based real estate mogul Jay Morrison recently launched a new real estate crowdfundingprogram, and it’s finding some strong early success, having raised nearly $10 million in its first week.

The Tulsa Real Estate Fund is described as “the first African-American owned Regulation A+ Tier II crowdfund designed to revitalize urban communities across the U.S.” According to the group’s press release, the Tulsa Real Estate Fund “allows both accredited and non-accredited investors to collectively invest and own real estate projects around the country that are unique, diversified, and yield a reasonable rate of return.”

Ironhorse Funding Raises $ 30M of Capital from Crestline Investors (FinSmes) Rated: A

Ironhorse Funding, LLC, a Beverly, MA-based financing platform that provides operational and capital support for dealers and distributors in the motorcycle and powersports market, raised $30M strategic financing.

Crestline Investors made the investment through the firm’s Opportunity Fund III platform, which seeks to deploy capital where Crestline finds inefficiencies in the primary credit markets in North America and Europe.

The funding will be used to provide alternative financing solutions for consumers in the motorcycle and powersports market.

SBI HOLDINGS INC ORDINARY SHARES (OTCMKTS:SBHGF) on Focus After Report of Less Shorts (Fricisco Fastball) Rated: A

The stock of SBI HOLDINGS INC ORDINARY SHARES (OTCMKTS:SBHGF) registered a decrease of 3.53% in short interest. SBHGF’s total short interest was 3.16M shares in June as published by FINRA. Its down 3.53% from 3.28M shares, reported previously. With 11,600 shares average volume, it will take short sellers 273 days to cover their SBHGF’s short positions. The short interest to SBI HOLDINGS INC ORDINARY SHARES’s float is 1.59%.

The stock decreased 1.20% or $0.32 during the last trading session, reaching $26.41. About 3,352 shares traded. SBI Holdings, Inc. (OTCMKTS:SBHGF) has 0.00% since June 8, 2017 and is . It has underperformed by 12.57% the S&P500.

How two fintech entrepreneurs are rising from the ashes (San Francisco Business Times) Rated: A

Renaud Laplanche at Lending Club and Mike Cagney at SoFi were high-profile fintech founders, but each left under a cloud. Now they are seeking quick comebacks — and a measure of vindication.

Debt restructuring company Lendstreet receives $ 7m funding (Fintech Futures) Rated: A

US-based Lendstreet has just closed a $7 million series A equity round, led by Prudential Financial and Radicle Impact.

Prudential and Radicle join Lendstreet’s existing investors Accion, the Centre for Financial Services Innovation (CFSI), Serious Change, Crunchfund, Kapor Capital, and Cross Culture Ventures in participating in the round.

Knowledge Gap Contributing To Housing Market And Affordability Concerns, Cautiousness (PR Newswire) Rated: A

Ten years after the 2008 housing crisis, Americans eye the housing market with caution, as more than half (53%) of Americans who have or plan to buy a home admit they’re concerned about their ability to afford a home in the current market, according to a recent study of college-educated adults. The findings, release today by national online lender and FDIC-insured bank Laurel Road, also reveal that Americans on average believe a similar housing crash will occur in the next five years, and nearly one-fifth of respondents anticipate a crash in less than one year.

The survey found that women in particular are potentially underestimating affordability, as they are significantly less likely than men (49% vs. 59%) to be familiar with the alternatives.

This lack of knowledge around alternative options potentially contributes to the fact that more than one-third (35%) of respondents – and 46% of millennials – do not feel confident that they could currently afford a 20% down payment. Women (45%) feel particularly less confident than men (24%), while more than two-fifths (42%) of student loan carriers do not feel confident.

United Kingdom

Funding Circle scraps downloadable loanbook (Peer2Peer Finance) Rated: AAA

FUNDING Circle has withdrawn its downloadable loanbook and stopped publishing loan performance data on a daily basis.

The peer-to-peer business lender announced on Thursday that it has launched a new statistics page which will be updated every three months.

The platform also announced that it has partnered with analytics firm AltFi Data who will provide independent verification of its quarterly loan information.

Foreign investment in UK technology firms doubles in just one year (The Telegraph) Rated: AAA

British tech businesses attracted $7.8bn of funding last year, which was almost double the amount received in 2016. Research by Dealroom and Tech Nation showed that the UK’s venture capital investment last year was higher than Germany’s total of $3.2bn and France, which brought in $2.8bn.

According to a report by EY, there was a 22pc increase in digital investment into the UK, which helped to offset a decline in investment to sectors such as a financial services and logistics, due to investor concerns over Brexit.

New SME funding hub will boost awareness of P2P (P2P Finance News), Rated: A

PEER-TO-PEER finance resources will be included in a new funding hub for high-growth businesses looking to scale up in the UK.

The state-backed development bank has partnered with 12 industry bodies to provide information on 17 types of finance, including P2P lending.

Silicon Valley CTO joins UK fintech MarketInvoice (PCR), Rated: A

Fintech start-up MarketInvoice has appointed Rija Javed as its chief technology officer (CTO) as the company looks to invest heavily into its technology. Rija Javed joins from Wealthfront, a leading Silicon Valley based start-up.

P2P fund boss Simon Champ exits Pollen Street Capital (AltFi News) Rated: B

P2P fund pioneer Simon Champ has left his role as head of the investment manager of the £735m P2P Global Investments trust, AltFi can exclusively reveal.

Champ was a founding partner of P2P Capital Solutions which later became MW Eaglewood Europe and was the driving force behind the launch of the P2P Global Investments trust (P2P GI), raising a large seed portfolio for the investment trust from respected fund managers such as Neil Woodford and Mark Barnett.

BNP Paribas Asset Management launches SME alternative lending platform, completes first UK loan (AltFi News) Rated: A

BNP Paribas Asset Management has completed its first UK loan on its new SME lending platform.

The loan, a six year senior unsecured amortising loan, was made to a specialist recruitment services company based in the West of England.

Leading the way (Peer2Peer Finance) Rated: A

SINCE its fifteen minutes of fame back around ‘OB Day’ on 13 January, when excited media reports promised the dawn of a new era of high-tech banking, Open Banking has slipped back into the fintech background, accompanied from some quarters by accusations of having been something of a damp squib.

But such claims misunderstand the nature of the beast, says Imran Gulamhuseinwala, implementation trustee of the snappily-named Open Banking Implementation Entity (OBIE) which develops and tests the APIs on which the  system is built.

There are a handful of peer-to-peer lending platforms already active in Open Banking, including Zopa and Lending Works.

LendInvest’s Buy to Let Product Propels Boom in Hiring as Demand Surges (Crowdfund Insider) Rated: B

Online mortgage lender LendInvest reports it is scrambling to hire new employees due to the demand of its Buy-to-Let (BTL) product. The LendInvest team has now grown to 15 people in the short period since the  BTL product was launched in November 2017.

Pike, joined the team from Fleet Mortgages.

LendInvest has also hired field-based Business Development Manager, Shane Wallace to cover the East of England. Shane brings over 10 years’ experience from Aldermore, where he was most recently employed as a Commercial Mortgage Manager.

China

Jack Ma’s Ant Financial Valued Around $ 150 Billion After Funding Round (Wall Street Journal) Rated: AAA

China’s Ant Small and Micro Financial Services Group Co. on Friday said it raised around $14 billion from domestic and global investors in one of the largest private-capital raises on record.

Standard Chartered says it will apply to operate a virtual bank in Hong Kong (SCMP), Rated: AAA

Hong Kong and London-listed Standard Chartered plans to apply for a virtual bank licence, making it the first traditional bank seeking a licence locally to operate purely online without physical branches.

European Union

The race to build Europe’s Robinhood: Invstr, Freetrade, Revolut, Dabbl and more (Business Insider) Rated: AAA

Startups across Europe are racing to try and replicate the success of Robinhood, the hot US stock trading app. San Francisco-based Robinhood offers a zero-fee trading app that has taken off with young Americans. Founded in 2013, it claims to have 4 million customers and in May hit a valuation of $5.6 billion. This success has not gone unnoticed. Fast-growing UK fintech startup Revolut on Thursday announced plans to build a commission-free stock trading platform, similar to the way Robinhood works.

Brokers are charging people as much as £5.00 ($6.70) per trade and the user interfaces are typically clunky, slow and confusing for consumers. The pain points are clear for us and the room for improvement is massive. We’ve just done some research and found 94% of millennials don’t actually invest but do want to, Ackred said. There are 16 million millennials just in the UK and 100 million more in Europe who are new to investing and have no good options to start.

International

The Center for Financial Inclusion Digs Into the Global Findex 2017 Numbers (Lend Academy) Rated: AAA

Source: Lend Academy

The Center for Financial Inclusion, part of Accion, have released a follow up report digging into the Findex data and the picture is less rosy than what was highlighted in the World Bank’s initial report.

On the surface it looks like the world is making good progress towards financial inclusion with the Findex report showing that 68% of adults globally having some kind of bank account versus 61% in 2014 and 51% in 2011. That is rapid progress.

But CFI found a different story when just focusing on active accounts, those accounts that had some kind of transaction in the past 12 months. This takes the percentage down to 55% and what is worse the gap is widening between total accounts and active accounts indicating a growing number of people who open an account but never use it. This is true for both developing and high income countries but the gap is getting much wider in developing countries as shown in the graphic below.

Source: Lend Academy

SuperMoney Launches No-fee Financing Platform (DeBanked) Rated: A

At the Finovate Spring 2018 conference, CEO Miron Lulic and CFO Jesse Stockwell presented the company’s new SuperMoney No-fee Financing platform, which allows merchants to obtain point of sale financing from online lenders and banks.

The new platform allows a small business merchant, like a furniture store, to create a free profile that is co-branded with SuperMoney. With the profile, the merchant can easily see when a customer has applied for financing and follow up.

According to a Forrester Consulting study on SuperMoney’s website, businesses that offer point of sale financing enjoy an average increase in sales of 17 percent and an average increase in order value of 15 percent.

Spotting a Scamcoin: Ethconnect (Coin Clarity) Rated: B

While the term “lending platform” might sound harmless and even beneficial to society, it was never disclosed outright to whom the coins were being lent or for what exact purpose they were being lent (though they did have the courtesy to mention “volatility software” – a trading bot concept directly plagiarized from Bitconnect). They were in fact being “lent” to Ethconnect themselves. This lack of detail did not stop hundreds of people, blinded by the prospects of huge profits, from throwing thousands of dollars at the project. But also unlike Bitconnect, none of them would ever see another penny of it again.

Australia

Prospa founders admit float lost ‘vital momentum’ (Sidney Morning Herald) Rated: AAA

The co-founders of small business lender Prospa maintain the company can return to the public markets for a future float, after a last-minute regulatory query this week created “confusion” that sapped the listing of vital “momentum.”

India

Digital SME Lenders Bank On Co-Lending To Make Their Presence Felt (Bloomberg Quint), Rated: AAA

If corporate lending was the flavour of the season at the turn of the decade, then retail lending has captured the attention of financiers over the last few years. Now, it is lending to the country’s small and medium enterprises, which is attracting increased focus from both traditional and new-age financial sector entities.

Capital Float, ranked among the country’s largest digital lending platforms, disbursed Rs 1,500 crore to MSMEs in 2017-18 out of a total portfolio of Rs 2,500 crore, according to information provided by the company. The ticket size of loans ranged from Rs 50,000 given to small local businesses to Rs 8-10 lakh loaned to larger SMEs.

Latin America

Fintech Regulation Promotes Invocation In Brazil (Mondaq) Rated: AAA

Resolution no. 4.656/2.018 published by the Brazilian Central Bank on 26 April,  which regulated credit fintechs in Brazil, opens the door of the highly concentrated banking sector in Brazil, so that financial technology companies can offer products and financial services in the credit market. Today, credit fintechs already operate in the financial market, but always through a financial institution duly regulated by the Brazilian Central Bank (CB).

With this new regulation, two types of financial institutions with different business models were created. They are: the “Sociedade de Crédito Direto” (SCD) (“Direct Credit Company”), which will carry out credit operations only using its own financial resources, and the “Sociedade de Emprésimo entre Pessoas” (SEP), (Peer-to-Peer Loan Company), which will carry out credit operations only as a financial intermediary without retaining risks or using their own resources, known in the market as “peer-to-peer lending”. Both institutions, after approval by the Central Bank (CB), will be authorized to operate, only, through an electronic platform.

Asia

China’s fintech companies are exporting AI and big data to Asia’s ‘laggard’ banking markets (SCMP), Rated: AAA

Chinese fintech companies have made headway in expanding their business to Southeast Asian markets, as they increasingly find their know-how in big data and artificial intelligence being sought after by Asian financial institutions in risk management and compliance.

Online consumer finance platform Weshare, which offers consumer loans through its mobile app, says it is applying for a P2P licence from Indonesia’s central bank.

Korean web harvesting giant is ready to scrape data around the world (Korea Joongang Daily) Rated: A

We also have smaller fintech start-ups as our clients. One of them is Bomapp, an insurance service application that is designed to offer insurance advice and find redundant coverage of registered insurance. For a start-up like Bomapp, we don’t charge per piece of data because we acknowledge that start-ups lack funds. Instead, we agreed to take equity from Bomapp.

As P2P start-ups become more active, we also provide user data for them. Among our clients are Lendit and 8percent. They use the data to assess credit ratings and get information about individual asset size. They try to use the online data because the P2P companies pursue a different credit rating approach to banks. We see there is a great opportunity in the fintech industry because they are keen to venture into new businesses.

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

How fintech gave this SBA lender an edge (American Banker) Rated: A

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

How fintech gave this SBA lender an edge (American Banker) Rated: A

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Wednesday April 18 2018, Daily News Digest

Wednesday April 18 2018, Daily News Digest

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

Wednesday April 18 2018, Daily News Digest

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United States

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

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

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

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

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

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

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

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

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

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

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

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

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

Scott Sanborn, CEO of LendingClub:

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

Omer Ismail, Chief Commercial Officer of Marcus:

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

Max Levchin, CEO and founder of Affirm:

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

Jay Farner, CEO of Quicken Loans:

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

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

Source: Street Fight

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

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

Returns since inception (indexed at Jan 4, 2016)

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

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

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

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

Purchase loans

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

Refinances

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

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

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

Key highlights

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Small Business Loans

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

 

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What returns can I really get?

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

Is the platform a member of a reputable association?

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

 

China

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

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

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

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

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

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

International

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

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

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

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

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

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

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

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

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

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

Content Rewards

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

Ezira Cryptocurrencies

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

Decentralized Exchange

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

Australia

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

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

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

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

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

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

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

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

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

India

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

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

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

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

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

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

Asia

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

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

Fintech Companies Are Changing the Process of Loan Offtake

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

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

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

MENA

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

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

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

Authors:

George Popescu
Allen Taylor

Monday March 26 2018, Daily News Digest

Monday March 26 2018, Daily News Digest

News Comments Today’s main news: Prosper broadens its capital stack. MarketInvoice nabs 135M GBP from two European banks. Klarna hit by fraudsters. Square intros instant deposits in the UK. Hong Kong-China commuters now have a dual-currency prepaid credit card. Today’s main analysis: PeerIQ’s lending earnings insights. How 6 digital banking startups are challenging the retail banks (A MUST-READ). Today’s thought-provoking […]

Monday March 26 2018, Daily News Digest

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United States

Prosper brings deeper capital stack with latest ABS (Global Capital), Rated: AAA

This year, Prosper broadened its capital stack for the first time, including a ‘D’ class of bonds on its $647.5m offering, which was priced on Wednesday. Credit Suisse and Jefferies led the deal, with the $387.8m ‘A’ notes pricing at 70bp over euro dollar spot forwards. The $112m ‘B’ notes were priced at 125bp over EDSF, while the $79.45m ‘C’ notes were priced at 220bp over interpolated swaps. The $68.25m ‘D’ notes were priced at 300bp over IS.

In contrast to last year, Prosper also strenghtened the collateral mix on its 2018 offering. According to a presale from Kroll Bond Rating Agency, loans from Prosper’s higher quality credit tiers made up 54% of the deal, compared to 38% on its November 2017 transaction. The proportion of lower quality credit tiers also fell to 46% in this deal, compared to 62% on its last deal.

Do Fintech Lenders Penetrate Areas That Are Underserved by Traditional Banks? (Federal Reserve Bank of Philadelphia), Rated: AAA

Fintech has been playing an increasing role in shaping financial and banking landscapes. In this paper, we use account-level data from LendingClub and Y-14M data reported by U.S. banks with assets over $50 billion to examine whether the fintech lending platform could expand credit access to consumers. We find that LendingClub’s consumer lending activities have penetrated areas that may be underserved by traditional banks, such as in highly concentrated markets and in areas that have fewer bank branches per capita. We also find that the portion of LendingClub loans increases in areas where the local economy is not performing well.

TransUnion (2017) reported that, as of 2017:Q3, the personal unsecured loan market had reached nearly $112 billion.

Credit cards account for the lion’s share of unsecuredconsumer debt ($731 billion in 2017:Q3).3 Interestingly, there is evidence that credit card lending is related to geographic location. Carbo-Valverde and Perez-Saiz (2016) find that the probability of obtaining a credit card or line of credit from a bank increases 60 percent when the bank has a branch within 10 km of the household.

Source: Consumer Finance Institute

Read the full Report here.

Amazon vs Costco, PeerIQ’s Lending Earnings Insights (PeerIQ), Rated: AAA

Continuing our theme of technology lenders like Amazon branching into providing financial services, the obvious question is who might be next. Main street retailers like Walmart, Target and Costco could be likely candidates.

Source: PeerIQ

PeerIQ’s Lending Earnings Insights

Where are we in the credit cycle? Earnings calls indicate CEOs/CFOs are constructive on the health of the US consumer and see a tax reform as improving consumers’ disposable income.

Credit re-normalization continues across all major lending groups. Credit performance this quarter is mixed. We observe improvements, and record low delinquencies from ONDK, OMF, and FinTechs in particular. LendingClub expects 31 bps lower charge-offs going forward due to tighter credit standards. At Discover – a bellwether for personal loan performance – the net charge off rate jumped 92 bps YOY to 3.62% – the largest increase in several years.

Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions 33% although loan growth was only 14%.

Source: Discover Investor Relations

Behavior-tracking security tech gaining traction at banks (American Banker), Rated: AAA

Source: American Banker

Banks have started to implement behavioral biometrics more and more as it is seamless for customers and helps to better detect fraud; behavioral biometrics firms like BioCatch has provided banks with the type of security they like, customers cannot see if but it also is harder for criminals to spoof; BioCatch reviews more than 5 billion transactions per month and has about 60 million users in their system; another reason banks love this type of security is the privacy regulations are not as strict, the data is not personally identifiable and is based on type of actions.

 

Americans Are Misguided on Emergency Savings, and It’s Going to Cost Them (Madison), Rated: A

That’s because 38% of college-educated adults think an emergency fund of $5,000 or less is sufficient. That’s the latest from online lender Laurel Road, which also found that women — particularly younger ones — are generally more conservative when it comes to building their safety nets. Specifically, millennial women think people should have an average of $9,727 in an emergency fund, compared to millennial men who think an average of $8,040 works just fine.

The majority of working U.S. adults are nowhere close to having three months’ worth of living expenses in the bank. A good 57% have less than $1,000 in savings, according to data released by GOBankingRates last year, while 39% have no savings at all. If you’re part of either statistic, it means your finances aren’t in great shape — and that you need to make changes immediately.

Lendr Partners with MidCap Financial Trust to Close $ 25 Million Senior Credit Facility (PR Newswire), Rated: A

Lendr, a provider of flexible working capital to small- and medium-sized businesses, specializing in business finance and factoring solutions, announced today the closing of a $25 millionsenior credit facility. MidCap Financial Trust served as the Administrative Agent for the transaction. The deal agreement provides Lendr with increased financing power and the expansion of the facility to $50 million.

First RealFund Raises $ 600,000 of Preferred Equity for Brooklyn Apartment Building (Business Wire), Rated: A

First RealFund (“FRF”) has raised $600,000 of preferred equity financing for an apartment building undergoing a renovation and upgrade in Brooklyn’s Clinton Hill neighborhood.

The Sponsor, Duke Properties, owns a portfolio totaling more than 400 rental units with a geographic focus centered around New York City. “We target value-add properties in emerging neighborhoods and we apply innovative and effective renovation strategies based on our 15+ years of experience,” observed Albert Dweck, CEO of Duke Properties. “Our goal is to increase the value of our buildings while contributing to each neighborhood.”

 

THIS CHART SHOWS THE UNEQUAL STATE OF ACCESS TO FINTECH SERVICES IN AMERICA (Pacific Standard), Rated: A

According to a 2015 survey by the Federal Deposit Insurance Corporation, approximately 7 percent of American households are unbanked (meaning they have no checking or savings account), and an additional 19.9 percent are “underbanked.” The percentages are higher—approximately 50 percent—among both low-income and minority households.

New America Report

While approximately 22 percent of adults in high-poverty African-American communities have used online banking services in the past year, a significantly higher percentage (39 percent) of adults in wealthier black communities have used the technology.

Community bank launches digital account targeting the unbanked (American Banker), Rated: A

AxiomGo is a paperless checking account for customers who want an alternative to prepaid cards and traditional checking, the bank said.

The $560 million-asset Axiom partnered with the fintech firm Malauzai to design and deploy a mobile app that “meets the unique needs of a traditionally underbanked community, providing users a dynamic, bilingual, mobile banking experience,” it said Thursday.

Source FDIC, American banker

The app, which had a soft launch in December, has a Spanish-language option and enables users to open and fund an account and set up direct deposit via a mobile device. Other features include the ability to pay bills by snapping a photo; check deposit; fund transfer and peer-to-peer payments; and access to built-in budgeting and personal finance management tools.

Something I Wish I’d Had 20 Years Ago When I Started: Nontraditional Financing (Entrepreneur), Rated: A

Whether they were unable to secure credit because of bad (or nonexistent) credit history, sluggish cash flow or a lack of collateral, these growth-oriented businesses often find they’re not considered a good fit for traditional loans or lines of credit. There are, however, unexpected outlets available to them. I wish they’d been available to me when I started out 20 years ago.

What Student Loan Borrowers Can Expect from the Fed’s Rate Hike (Lend EDU), Rated: A

The short answer: Some student loan borrowers will pay more interest.

Most student loan borrowers depend on federal student loans, which have had a fixed interest rate since 2006. Although 1.4 million people yearly also depend on private student loans, which can have either a fixed rate or a variable rate that’s connected to either the LIBOR, prime or T-bill rates.

When the Fed increases these variable rates, borrowers with variable-rate loans will likely pay more interest. However, it will depend on the benchmark, according to CNBC.

How to Buy a Car with Bad Credit in 2018 (Auto Credit Express), Rated: B

Tips for Buying a Car with Bad Credit in 2018

With the right plan in place, you can prepare for success when financing a vehicle with poor credit. These tips can start you off on the right foot:

  • Check Your Credit 
  • Set Your Budget  
  • Have a Down Payment – Subprime lenders often require that you have a down payment, but it’s in your best interest to have one anyway.

 

AGORA Announces Partnership With Ignite Consulting Partners (Markets Insider), Rated: B

Agora Data, Inc. (“AGORA”), a Texas-based provider of technology solutions for the financial services industry, announces its partnership with industry leader Ignite Consulting Partners (“Ignite”) to provide increased transparency and security to the consumer finance marketplace through the development of a “Certified Seller Program.”

FIC Network Partners with Civic Technologies (Medium), Rated: B

Factury Inc., the company behind FIC Network, today announced a strategic partnership with Civic Technologies Inc. The partnership brings trusted, secure identity services to the token sales participants identification and enables FIC Network to streamline the identification and KYC process, enhancing the token sales privacy and security.

Arizona Becomes First U.S. State To Launch Regulatory Sandbox For Fintech (Forbes), Rated: B

Arizona has become the first state in the U.S. to adopt a “regulatory sandbox” to shepherd the development of new emerging industries like fintech, blockchain and cryptocurrencies within its borders.

The law will grant regulatory relief for innovators in these sectors who desire to bring new products to market within the state.

 

United Kingdom

MarketInvoice secures £135m for businesses from two European banks (Bdaily News), Rated: AAA

Business finance firm MarketInvoice has today (March 26) announced new agreements with two European banks, boosting its platform by £135m.

The London-based firm struck a deal with Portuguese bank Banco BNI Europa (BNI) to add £90m to its platform and another, with German bank Varengold Bank AG, worth £45m.

Banco BNI Europa initially invested £28.3m in 2016, following it up with £45m in May 2017 and a further £90m this month.

Square brings Instant Deposits to the UK (Finextra), Rated: AAA

Square Co-Founder and CEO Jack Dorsey announced the launch of a new Instant Deposit service for UK businesses at an event at London’s British Library last night.

The new product helps to solve one of the biggest challenges small businesses face: managing cash flow.
With the launch of Instant Deposit, sellers can now click a button in the Square App to get their funds into their bank account in around 20 minutes. All they need to do is link their bank account to their Square account. Square offers competitive, flat fees of 1.75% fee when taking in-person payments, and 2.5% for payments made over the phone, online or via digital invoice. Sellers using Instant Deposit will be charged an additional 1%.

Who wants to be a millionaire? Invest in Zopa’s IFISA for 26 years (Peer2Peer Finance), Rated: AAA

IT WOULD take 26 years to become a Zopa Innovative Finance ISA (IFISA) millionaire, the peer-to-peer lender has calculated.

Individuals would need to invest the full ISA allowance – which is £20,000 this tax year – into Zopa’s ISA Plus at today’s target return of 4.6 per cent to hit the million pound mark in 26 years.

This would result in an IFISA total of £1,009,509, with interest earned in that year of £44,395, Zopa said in a blog post on its website on Friday.

Innovations to utilise your tax allowance (City a.m.), Rated: A

These peer-to-peer investments broad- ly fall into three sectors: Consumer, SME and Property Lending.

There are two ways to invest in an IFISA. Customers can either invest manually or defer to the platform’s auto- invest function and let this do the hard work. Notably the ‘big three’ lenders – RateSetter, Funding Circle and Zopa – purely offer auto-invest options.

Another peer-to-peer consumer lender with an IFISA on the market is Lending Works. Launched in February 2017 it offers an annual return of six per cent for five-year loans or 4.5 per cent for three-year loans. This is an auto-invest product with a minimum investment of £10.

Proplend are also offering peer-to-peer investment within an IFISA, secured against first charges on commercial property. Investors can expect returns of between five per cent and 12 per cent.

Lloyds is ‘the largest digital bank in the UK,’ CEO says, and it wants to work with fintech startups (Business Insider), Rated: A

The CEO of Lloyds Bank told a conference in London on Thursday that his company is the biggest digital bank in the UK, eclipsing the wave of digital startups that have sprung up in the last few years.

António Horta Osório told the UK Treasury’s International Finance conference that Lloyds is “the largest digital bank in the UK, with a 22% share of new business.”

From Subprime Star to Losses, U.K.’s Provident Tries to Reboot (Bloomberg), Rated: A

If the FCA does reform the home credit market, its past moves could indicate what’s in store for Provident’s door-to-door lending. The FCA’s caps on payday lenders lowered the average cost of a typical payday loan to 60 pounds from 100 pounds and slashed default rates by a third. Leading player Wonga Group Ltd. saw its sales plunge 64 percent in 2015.

Source: Provident Annual Report

Fintech firms embracing Open Banking (London School Of Business & Finance), Rated: A

A report from professional services and Big Four firm EY has shown that fintech businesses in the UK are embracing Open Banking, with 59% seeing the initiative as an opportunity to reconsider their collaborations. 

The study, which surveyed more than 30 UK fintech businesses, found that more than 80% of businesses are getting ready for Open Banking, whilst 29% said that they are fully prepared for the initiative.

The study showed that businesses have started to prepare for the scheme by increasing the amount of staff they have working on Open Banking-related propositions, with 30% of businesses with 50 to 250 employees saying that they had teams of ten working on the changes.

An alternative moneymaker from property (Money Week), Rated: A

Investors looking for a higher yield from property should consider this bond from LendInvest.

Nearly every recent issue over the last few years has been at a rate of between 4% and 6%, which is well above the rate on offer from the government (via gilts) and investment-grade corporate bonds.

The platform is focused on short term, bridging and development loans rather than buy-to-let loans. In total, its initial £50m fundraising has been invested in 89 different loans (implying an average of around £560,000 per loan), with an average loan-to-value (LTV) ratio of about 57% – so the average loan looks to be backing a project worth around £1m.

Of those 89 loans, nearly all are first charge, and at least 19 (of the 87 first-charge loans) have a LTV ratio of under 50%. That means that if there were a sharp property recession, a good proportion of the book should have plenty of equity in case of default. By contrast, 17 of the loans have a LTV of 70% or more, which might seem a slightly more worrying state of affairs in a downturn – you’d only have an equity buffer of around 25% to 30% at most. It’s also worth noting that 63% of the loans are in the Greater London area, which is arguably more vulnerable in a downturn.

Financial services for good: ‘Data Nations’ team wins 24-hour Deloitte datathon (Future Scot), Rated: B

The overall winner of the second annual Datathon, hosted by business advisory firm Deloitte, was ‘Data Nations’, a team of data experts who developed FinTastic; a digital tool to help people make better financial decisions at key moments in their life.

 

China

Dual-currency prepaid credit card for Hong Kong-China commuters (Fintech Innovations), Rated: AAA

HKT and UnionPay International have launched a new Tap & Go UnionPay Prepaid Card for payments across mainland China.

The new card allows customers to instantaneously convert Hong Kong dollars into yuan using their Tap & Go mobile wallets when they are traveling in mainland China.

Customers can settle payments using their cards in mainland China as well as 168 countries and regions worldwide and for online transactions.

Report: China to Have Dynamic Approach to Fintech Innovation (Crowdfund Insider), Rated: A

A recent report in ECNS indicates China wants to have a “dynamic approach” regarding Fintech or internet finance. The report was referencing a press conference following the 13th National People’s Congress that was held earlier this month that involved the Zhou Xiaochuan, Governor of the People’s Bank of China.

In many respects, China is the largest  Fintech market in the world. It has the largest online lending (peer to peer lending) market by far and benefits from a population that is widely connected to the internet by mobile devices. A combination of demand from both consumers and businesses has fueled innovations in finance.

 

European Union

Buy-now-pay-later firm Klarna rings changes following fraud reports (Which?), Rated: AAA

Which? received reports that in some cases thieves had entered other people’s names and addresses then intercepted the package. A few weeks later, the victims received a letter from Klarna chasing up the payment, warning the debt will impact their credit rating.

A spokesperson for Klarna said that it takes fraud seriously, and when this issue arose it immediately looked at ways to combat it. Klarna said that anyone affected by fraud should contact the company to dispute the order, and that this will in not affect a customer’s credit rating.

The Challenger Bank Playbook: How 6 Digital Banking Startups Are Taking On Retail Banking (CBInsights), Rated: AAA

Europe has seen the first cohort of challenger banks (Atom BankTandem BankMonzoStarling Bank, Revolut, and N26) break out, collectively attracting $1B in funding and over 2.5M customers since 2014.

How challenger banks have leveraged regulation

Traditional approach: Atom BankTandem Bank, and Starling Bank prioritized having a bank charter prior to launch and built a suite of services that required a charter, believing it would create a moat around the platform. Atom Bank, for example, launched a savings account and SMB lending after regulatory approval. They also plan to launch current accounts but that roll out has so far been delayed.

Semi-traditional bank: Monzo and Germany-based N26 wanted to get customers onto the platform. To do so, Monzo launched a prepaid card instead of a full account product.

Monzo was going through a period of rapid growth, adding a reported 60K users a month when the company was granted a charter. In December 2017, they stopped adding new customers and announced plans to focus on transitioning the 500K existing customers off of prepaid cards and onto Monzo’s own current accounts.

As of February 2018, the company has a waitlist for new current account registrations, which means it’s missing out on roughly 180K potential new customers (at the peak growth rate of 60K per month) as it focuses on transitioning its existing customers off of the prepaid cards.

Fast-lane approach: Revolut challenged the conventional go-to market strategy by applying for an easier-to-acquire e-money license and targeting currency exchange rather than current accounts. Revolut initially focused on frequent travelers, a niche they believed was underserved. It built a digital currency exchange app, which allowed people to exchange money more frequently across countries without establishing multiple bank accounts.

Source CBInsights
Source CB Insights

Mobile adoption has driven uptake

Source: CB Insights

 

Fintech lending platform Loanboox eyes French expansion (Swiss Info), Rated: A

Award-winning Swiss fintech firm Loanboox is planning further expansion into Europe having obtained a foothold in Germany. The digital portal for matching institutions with investors plans a move into France and is also looking at other European markets.

Since its inception, Loanboox has now played a part in connecting around 1,000 clients and facilitating requests of some CHF9 billion ($9.5 billion) in public sector loan deals.

International

Millennials Are Driving One Of The Biggest Trends In Wealth Tech (CBInsights), Rated: AAA

Millennial investors stand to inherit $30T of potential assets from baby boomers. To attract and retain this next-generation of investors, advisors need to offer sustainability, clean energy, and social impact investing strategies.

Source: CBInsights

Why now?

There are massive demographic shifts underway in wealth management. Millennials are now the largest generation in the workforce and 2x more likely than the average investor to make a sustainable investment.

Social issues like climate change and gun-control are top of mind for the next-generation, and 75% of millennial investors believe their investments can influence change, according to one survey conducted by Morgan Stanley.

Source: CB Insights

Further, impact investing is a growing part of the wealth management market. In 2016, it’s estimated that sustainable investment assets grew to $22.89T globally, up 25% from 2014 according to the Global Sustainable Investment Alliance (GSIA).

Source: CB Insider

Australia and UK set up FinTech Bridge to deepen collaboration between governments, regulators, and industry bodies (OpenGovAsia), Rated: A

The Australian Treasurer, the Hon Scott Morrison MP, and UK Chancellor of the Exchequer, the Rt Hon Philip Hammond MP, signed an agreement in London on 22 March, 2018 to establish a FinTech bridge.

The UK-Australia FinTech Bridge will deepen collaboration between governments, regulators, and industry bodies in the two countries. It will also support improved access for Australian FinTech firms to the UK market.

The FinTech Bridge includes collaboration between Australian and UK governments to identify emerging FinTech trends and policy issues, enabling better policy positions.

How Can Fintech Boost the Micro-loan Scene? (Finextra), Rated: A

While the citizens of Norway, Finland, and Denmark all have at least one bank account, there are developing countries like the Central African Republic, Niger, and Madagascar, where the percentage of the unbanked population rises well above 85%. The poverty rates in such places are quite high, and is part of a vicious circle, since the inability to get a loan or to make deposits keeps people living day to day. The only available financial resource is social borrowing from friends and family. Yet, rapid technological advancements could turn this situation around.

Micro-financial institutions (MFIs) have developed a particular product, the microcredit, as a way to grant individuals the necessary money to expand a small business or to cover some surging costs, like healthcare.

Yet, the current model for these products is far from efficient, with high operational fees which translate to interest rates around 35-40%. It has even been said that micro-loans promote poverty.

 

WHERE DO CHIEF INVESTMENT OFFICERS COME FROM? (AllAboutAlpha), Rated: A

PwC forecasts a near doubling in global AUM over nine years, from $84.9 trillion in 2016 to $145.4 trillion in 2025, and predicts the 

Alternative credit scoring partnerships help fintech companies lend better (Business Standard), Rated: A

Financial technology have partnered with scoring to enable faster and more efficient lending. Online lending marketplaces and said their partnerships with information and CIBIL, respectively, to offer free reports to customers, made their lending more efficient.

The entire process is digitized to reduce the cost of operations and to bring speed and scale in the lending process”, said Rajiv Raj, Co-founder and director, is able to provide alternate data using technology we have not developed so far. We can use this data to further refine our existing scoring model,” said RBL Bank’s Toor.

Both and said that alternate data is most beneficial for assesement of new – to-customers for whom centralized or structured data is not available.

Cerberus Capital taps Nicastro as senior adviser (The PE Hub), Rated: B

Cerberus Capital Management, L.P. and its affiliates (“Cerberus”), a global leader in alternative investing, announced today that Roberto Nicastro has become a Senior Advisor to the firm. In this role, Mr. Nicastro will consult with Cerberus as it continues its focus on investment opportunities and strategic partnerships in the European financial services sector.

Australia

Why seller experience is the new battleground in today’s competitive gig economy (Australian Anthill), Rated: A

The battle between taxis and ride-sharing services might be old news already, but today, peer-to-peer lending platforms and other emerging tech-driven financial products are continuing to ruffle the feathers of our stalwart financial institutions.

According to studies, the gig economy could contribute around $2.7 trillion to global GDP by 2025.

India

Top PayU India execs invest in blockchain startup Nuo Bank (VCCircle), Rated: AAA

Mumbai-based blockchain startup Nuo Bank has raised $250,000 (Rs 1.6 crore) from payment gateway firm PayU India’s chief executive officer Amrish Rau and managing director Jitendra Gupta, a top executive has told VCCircle.

Savings are stored on the blockchain and instead of interest on savings, customers gets a virtual share in the revenue of the bank. Nuo Bank will offer around 20% of its 1 billion tokens – Nuo Coins – to customers.

These contracts will stipulate that up to 25% of the bank’s revenue should be reserved for these tokens.

With KYC norms kicking in, mobile wallet customers using gift cards to get around it (Money Control), Rated: A

Even as mobile wallets companies are struggling to ensure that the customers comply with KYC norms in order to load money to their wallets, customers are able to circumvent the process with the use of digital gift cards.

For instance, customers can add money to their Amazon Pay wallet by purchasing gift cards of Amazon. The gift card offers a code that once added to the wallet loads the money.

Users of prepaid payment instruments (PPI) such as mobile wallets were asked to complete the KYC requirements by February 28 by the Reserve Bank of India (RBI). The regulation bars customers from loading money into their wallets if they haven’t complied with the KYC norms. It also restricts them from carrying out remittance-based transactions. They will also not be allowed to transfer the cash in the wallet to their bank accounts.

SmartOwner: FinTech firm pioneering real-estate crowdfunding in India (Realty Fact), Rated: A

SmartOwner, India’s first and largest online marketplace for real estate investors, aims to make the process of investing in real estate a seamless and streamlined process. It was founded by Silicon Valley entrepreneurs having a considerable amount of experience in the technology and real-estate sectors. In fact, SmartOwner wants to make property investing as simple as investing in Mutual Funds and the Stock Market.

Asia

Long Blockchain Corp. Announces Minority Investment in TSLC with a Strategic Ownership Position in CASHe (Nasdaq), Rated: A

Long Blockchain Corp. (Nasdaq: LBCC) (the “Company” or “Long Blockchain”) today announced that it has closed on a strategic investment in TSLC Pte Ltd. (“TSLC”). TSLC is the parent company of CASHe, a provider of digital money and short-term financial products to young millennials across India.

Latin America

Watchdog Eyes Brazil’s Credit Card Industry On Nubank Complaint (PYMNTS), Rated: AAA

In Brazil, the antitrust watchdog, Cade, is looking into the credit card industry, with an eye on possible anticompetitive practices.

The investigation comes, Reuters reports, after a complaint by Nubank, a Goldman Sachs-funded FinTech. The company offers credit cards and checking accounts to 3 million people in Brazil. Nubank also has approval in place to become a bank. Earlier this month, the company raised $150 million in a financing round that was led by DST Global Investment Partners. Last year, the company was granted a credit line of 455 million reais, or about $137.71 million.

Authors:

George Popescu
Allen Taylor