Thursday November 21 2019, Weekly News Digest

LexinFintech Vintage Curve

News Comments Today’s main news: SoFi helps Pro.com make home improvement loans. BlueVine raises $102.5M. OCC, FDIC propose Madden fixes. Zopa gets banking license. Twino CEO stands down, platform hits 1B euro in loans issued. Today’s main analysis: LexinFintech lending business analysis (A MUST-READ). Today’s thought-provoking articles: Fed rate inversion. 10 cities that cost money […]

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

LexinFintech Vintage Curve

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Pro.Com Partners with SoFi to Make Home Improvements Even Easier (PR Newswire), Rated: AAA

Pro.com, the premier digital platform focused exclusively on building custom homes and major remodels from start to finish, announced a new partnership Tuesday with online personal finance company SoFi, aimed at revolutionizing how homeowners finance and complete their remodels, renovations and upgrades.

BlueVine raises $ 102.5M more for banking services that target small businesses (TechCrunch), Rated: AAA

The startup, which offers financing and other banking services to SMBs, today is announcing that it has raised $102.5 million, a Series F round of equity funding that is coming from a mix of financial and notable strategic investors.

Led by ION Crossover Partners, the round also includes existing investors Lightspeed Venture Partners, Menlo Ventures, 83North, SVB Capital, Nationwide (a major financial services player in the UK), Citi Ventures, Microsoft’s venture fund M12, and private investors; as well as new investors MUFG Innovation Partners Co., Ltd, O.G. Tech (the VC connected to Israeli billionaire and property magnate Eyal Ofer), Vintage Investment Partners, ION Group, Maor Investments and additional private investors.

FT Partners Advises BlueVine on its $ 102,500,000 Series F Financing (FT Partners), Rated: B

FT Partners served as exclusive financial advisor to BlueVine and its board of directors on its $102.5 million Series F financing

The OCC and FDIC Both Propose a Madden Fix (Lend Academy), Rated: AAA

There is finally some real light at the end of the tunnel. In the last two days we have heard from both the OCC and the FDIC on the Madden issue, something they called unfathomable in a joint amicus brief in Colorado a couple of months ago. They have each given notice of their proposal that would clarify the “valid when made” doctrine once and for all.

At the core of the issue is the ambiguity created by the Madden decision. A loan can be valid when it is made but if it is sold or transferred can suddenly become invalid in the Second Circuit states of NY, CT and VT. This has led to reduced consumer lending to these states and also concern that, given no regulatory clarity, this could expand to other states.

Here are links to the OCC and FDIC proposals. There will be a 60-day comment period where interested parties can weigh in.

Big Tech Race to Own Digital Wallet; GS Robo-advisor on Launchpad (PeerIQ), Rated: AAA

Refinance demand increased by 13% from the previous week and was 188% higher than a year ago, when rates were 114 basis points higher.

First-time inversion driven by the long-end…

Source: PeerIQ, Blackstone, St. Louis Federal Reserve

In regulatory news, lawmakers are taking aim at payday loan rates. Congress members plan to introduce federal legislation that would cap interest rates at 36%.

The next move for Facebook would be to offer lending products most likely indirectly (e.g., via POS partnerships or via co-brand products such as Amazon Chase Visa, etc.).

Insurance startup Vouch tacks on growth funding to serve startups (Pitchbook), Rated: A

Just two months ago, the ink was barely dry on a more than $24 million Series A that Sam Hodges raised for his startup Vouch Insurance. Now he is back with an even larger funding, led by Y Combinator‘s Continuity Fund, as the company seeks to join a crop of startups that cater to the needs of other startups.

Fireblocks Is Now Securing The Biggest Crypto Lending Company In The US (PR Newswire), Rated: A

Fireblocks (www.fireblocks.com), an enterprise platform for securing digital assets in transit, announced today, Celsius Network, the largest provider of interest income and digital asset loans in over 150 jurisdictions worldwide is enlisting Fireblocks to help protect over $400 million assets and 53,000 active wallets, securing both retail and institutional divisions.

5 Ways to Invest in Real Estate Online (The Motley Fool), Rated: A

The primary difference between using a crowdfunding site versus flying solo on your investment journey is that your investment is managed by a team of real estate professionals. Of course, that is also the biggest risk as you are completely dependent on the project developer to deliver what they promised.

If you are not an accredited investor but want to be involved in real estate crowdfunding, companies such as Fundrise, stREITwise, and RealtyMogul are a great place to start.

ArborCrowd Investors Receive Strong Returns on the Sale of Quarry Station Apartments (BusinessWire), Rated: A

ArborCrowd (the “Company”), the first crowdfunding platform launched by a real estate institution, announced today that its Quarry Station Apartments investment (“Quarry Station”) has been realized in under two years, providing investors with returns quicker and higher than initial projections. The property’s $49.35 million sale price generated an internal rate of return (IRR) of 20.31%, surpassing the original return target of 16% to 19%.

How Crowdfunding Has Changed the Game for Real Estate Investing (The Motley Fool), Rated: A

Through real estate crowdfunding, the developer can utilize an online platform that enables a large group of people to invest small dollar amounts in the project. If the development company chooses to follow the crowdfunding option, here’s how that could work:

  • First, the developer identifies an online platform that is suited to the company or mixed-use development. Each platform is different and most real estate crowdfunding sites receive significantly more project applications than they select.
  • If the investment passes all the legal, physical, and financial due diligence requirements the platform requires, that platform will then allow the developer to solicit funds using their site.
  • An investor can then use that platform to contribute financially to the development.
  • The funds are then tied up until the investor delivers on the project.

The 10 worst US cities for commutes that cost you time and money (Business Insider), Rated: AAA

Online loan marketplace Lending Tree published a report on the most expensive commutes in the 100 largest cities in the US in October.

Consider a resident in New York, which Lending Tree ranked as the city with the fifth most expensive commute. Using Lending Tree’s findings via 2017 Census Bureau data, the median annual earnings for a full-time employee in New York is $51,573; their hourly wage is $26. Now, consider the mean time of commuting one way, 41.8 minutes. If you make $26 per hour at your job, and you spend 83.6 minutes daily on your round-trip commute, then your time wasted commuting is worth $37 of time you would have been working.

Five cities in California – Oakland, San Jose, Irvine, San Francisco, and Fremont – took top 10 spots in the ranking, with four of those cities being in the increasingly expensive San Francisco Bay Area.

Read the full report here.

Fintech: The Fourth Platform – Part One (Forbes), Rated: A

While the first generation of fintech companies created billions of dollars of value, because of new enablers like Plaid, Cross River Bank, Finix and Wisetack, we’re now moving past that phase to one where fintech moves from being a business model unto itself, to being the fourth layer in the stack or the “fourth platform,” wherein financial functions like payments, lending and insurance join connectivity, intelligence and ubiquity as layers of the stack upon which new companies can be built.

Source: Forbes

Balboa Survey: Small Business Owners Anticipate Robust Black Friday (Monitor Daily), Rated: A

Online lender Balboa Capital released the results of its 2019 Black Friday Survey, which was conducted to examine how small business owners are preparing for this historically busy shopping day, and to find out what their Black Friday sales expectations are.

The survey reveals that 70% of small business owners are preparing for Black Friday early, and 83% anticipate meeting or exceeding their Black Friday sales goals. Balboa Capital’s survey was sent to a sample of small business owners in a wide variety of industries during the first week of November 2019.

American Financial Exchange, LLC (AFX) Announces AMERIBOR on the Blockchain (Mondovisione), Rated: A

American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced today the launch of its AMERIBOR on the blockchain. AFX now mints two ERC-721 non-fungible tokens for each AMERIBOR transaction on the AFX platform (for each counterparty to the transaction).  The pair of tokens is automatically minted when the transaction is repaid by the borrowing counterparty to the lending counterparty. Each token contains encrypted transaction data and encrypted counterparty data. The counterparty data is normalized prior to encryption to further preserve counterparty anonymity.

5 Best Alternatives to Traditional Savings Accounts (Nerdwallet), Rated: B

The pros. Peer-to-peer lending tends to be a win-win: Investors get a higher rate of return on their money than a lot of banking products offer, and borrowers get an interest rate on their loan that’s usually less than bank-offered loans and credit cards.

The cons. Peer-to-peer lending won’t give you quick access to your cash if you need liquidity.

Alchemy Partners with Plaid to Enhance Loan Decisioning and Fraud Detection Capabilities (PRWeb), Rated: B

Alchemy, one of the SaaS fintech lending infrastructure companies, has partnered with Plaid to support businesses in account and asset verification for improved lending decisioning.

United Kingdom

UK peer-to-peer lender Zopa gets banking license as it looks to compete with industry giants (Stock Daily Dish), Rated: AAA

British peer-to-peer lender Zopa has obtained a U.K. banking license, clearing a key hurdle in its bid to launch a digital bank and compete with industry giants.

Business Loans Marketplace Funding Xchange Raises $ 10.4 Million via Round Led By Downing Ventures, Gresham House Ventures (Crowdfund Insider), Rated: A

Funding Xchange (FXE), a company that helps people and organizations find suitable business loans and funding options from its marketplace of more than 45 established lenders, has raised £8 million (appr. $10.4 million) through an investment round.

London-based mobile credit card company Tymit secures £4m in funding (AltFi), Rated: A

Tymit, the London-based mobile-enabled credit card company, has secured £4m in a funding round, which it will use to develop its customer service offering.

Arbuthnot Commercial ABL supports EA-RS Fire Engineering’s acquisition of Circum with £2m facility (Business-Money), Rated: A

Arbuthnot Commercial ABL, the specialist asset based lending arm of Arbuthnot Latham, has completed a £2m asset based lending (ABL) transaction in support of the strategic acquisition of Circum Ltd, a fire protection services specialist, by EA-RS Fire Engineering Ltd. (“EA-RS”). The facility comprises a flexible confidential invoice discounting line and a term loan.

Crowd2Fund’s first EIS-approved funding round goes live (P2P Finance News), Rated: A

CROWD2FUND has launched its first funding round since being granted Enterprise Investment Scheme (EIS) approval from HMRC.

The platform has already raised 19 per cent of its target from current shareholders and has now opened the £1.2m fundraise to private investors.

Buzzy finance startup Starling Bank has lost another senior employee amid an exodus of executives (Business Insider), Rated: A

Starling’s head of banking compliance Rachel Coote has quit to join startup Paybase. Coote is the sixth senior employee to leave the buzzy finance company in 2019.The company’s chief financial officer Tony Ellingham has confirmed he will also depart within the next year.

Trading giant Robinhood makes its UK debut in Revolut challenge (City A.M.), Rated: A

US fintech Robinhood, a commission-free trading startup valued at $7.6bn (£5.9bn), has today arrived in the UK.

Users will be able to invest in more than 3,500 US-denominated stocks, including Apple, Amazon and Tesla. They will also be able to access foreign stocks that are available to trade in dollars through depository receipts, such as Barclays and Burberry.

OakNorth Bank completes GBP3.54m loan to fund aparthotel development in London (Property Funds World), Rated: B

The finance will be used to fund the acquisition of a mixed-use property at 68‐86 Clapham Road in Oval, and in its place, develop an aparthotel with between 120-175 units, subject to receiving planning permission. The site is located within walking distance of several Zone 1 underground stations – Oval, Stockwell and Vauxhall – as well as the South Western railway line, providing services to Clapham, Waterloo, Guildford, etc.

Crypto Lending Platform Nexo Joins FIO, As Usability Remains Top Priority (Chipin), Rated: B

Nexo, the dominant player in the crypto lending space, is joining the Foundation for Wallet Interoperability (FIO), the industry consortia bringing together leading companies in the blockchain ecosystem to solve the biggest problem faced by the industry — usability.

China

LexinFintech: A Rare Quality (Seeking Alpha), Rated: AAA

LexinFintech (LX) reported a solid set of Q3 results with loan origination growing 170% y/y that resulted in a beat on both revenue and EPS. More importantly, loan origination guidance was increased to RMB115-125b vs. the prior forecast of RMB115b.

Source: Seeking Alpha

Overall, asset quality remains stable at the end of Q3 with delinquency rate declining 9bps to 1.4% and the 6-month charge-off rate maintained at just above 2%.

Source: LexinFintech

Institutional funding has reached 75% of the total loan balance. In terms of origination, institutional accounts for 94% of the total loans originated, meaning that LX’s own P2P platform Juzi Licai is becoming less relevant going forward.

Source: LexinFintech
European Union

Twino CEO stands down, as Latvian lender swings into black (AltFi), Rated: AAA

Twino founder Armands Broks is to standing down as CEO and will now focus on new business opportunities and bringing talent on board.

The management change comes as Twino, which offers European investors investment opportunities in unsecured European consumer loans, reports pre-tax profits of €13m  (£11m) for 2018, compared to a €7.2m (£6.2m) loss the year previous.

Twino has also disclosed that it has also issued loans to the value of €1bn (£860m), since it was set up 10 years ago, half of the value of which have been issued in the past three years.

The Best Crowdlending Platforms (The African Exponent), Rated: A

Smart Lenders AM Launches New Investment Fund Specialized in Marketplace Lending (Crowdfund Insider), Rated: A

Smart Lenders AM announces the upcoming launch of a new fund dedicated to financing loans to European SMEs issued through marketplace lending platforms (crowdlending).

Real Estate Crowdfunding Platform EstateGuru Partners with Ober-Haus on Market Research (Crowdfund Insider), Rated: A

Real estate crowdfunding platform EstateGuru and OberHaus, real estate agency operating across the Baltic region, have joined together to produce shared real estate market research and analysis with a specialized focus on the needs of the crowdfunding platform.

International

Profits and Losses of P2P Lending Marketplaces 2017 and 2018 (P2P-Banking), Rated: AAA

Source: P2P-Banking
Australia

What does a competitive mortgage rate look like in November 2019? (finder), Rated: A

The lowest fixed rate in Finder’s database right now is 2.68%, a single basis point lower than the lowest variable. This is unusual (the lowest three year fixed rate this time last year was 3.74%).

Another online lender I spoke to was fine with apartments in the same suburb but didn’t offer pre-approval. This meant I would have to start a full application with them even before I had found a place to buy. For some borrowers, this can be a significant turn-off.

Asia

Ant Financial eyeing S’pore digital bank licence (The Straits Times), Rated: AAA

Billionaire Jack Ma’s Ant Financial Services Group said it may apply for a virtual banking licence in Singapore, a move that would add a heavyweight contender to the race.

OneConnect leads Southeast Asia’s sustainable financing with two smart lending platforms (Yahoo! Finance), Rated: A

OneConnect Financial Technology Co. Ltd. (OneConnect), today announced it is leading Southeast Asia’s sustainable financing with the launch of two smart lending platforms – SeekCap, the Philippines’ first lending platform that helps the underserved micro, small and medium enterprises (MSMEs) manage cashflow and grow their business, as well as a multi-finance platform that will empower millions of unbanked and underbanked Indonesians with easy access to loans to finance their purchase of vehicles essential for their daily transportation so as to improve mobility and their lives.

MSMEs form the backbone of any economy. In the Philippines, more than 99% of all businesses are MSMEs and they contribute to almost 63% of total employment. Yet, at present, only 9% of loans and financing from the country’s major banks go to MSMEs.

Latin America

Brazilian Digital Bank Neon Raises $ 95 Million (Crowdfund Insider), Rated: AAA

Brazilian Digital bank Neon has reportedly raised $95.27 million in a funding round led by Banco Votorantim and the General Atlantic fund. This is according to a write up in Estado.

Neon claims a customer base of 2 million users. The additional funding will help the digital bank grow with expectations to triple that number by 2020.

How Brazil is leading Latin America’s fintech revolution (Business Insider), Rated: A

There were 380 fintechs operating in the country in May 2019, per Finnovista, and around two-thirds (64%) of Brazilian consumers are defined as fintech adopters by EY — a rate that’s level with the global average and higher than the majority of G7 countries’.

  • Smartphone and internet penetration: Three-quarters of Brazilians used smartphones in 2017, which is expected to tick up to 86% by 2025 — and both figures are the highest across the region.
  • High fees charged by incumbentsBrazil’s four largest banks control almost 80% of the country’s deposits, with similar concentrations in credit and assets.
  • A large underserved population: Around 45 million people in the country don’t have access to or have not used a bank account in the past six months.

Why Mexico’s Fintech Sector Will Be One to Watch in 2020 (Next Billion), Rated: A

The economy in Mexico remains largely informal and cash dependent. An estimated 44% of the adult population in Mexico owns no financial products. This largely unbanked population, coupled with the new fintech legislation, has created immense opportunities for Mexico’s fintech sector to grow. In fact, roughly 100 new Mexican fintechs were established in 2018 alone, representing 52% growth for the industry. Mexico has become a regional leader with more than 273 fintech ventures operating in the country. When combined with Brazil’s 380 fintech ventures, the two countries make up 56% of the region’s total fintech activity.

Authors:

George Popescu
Allen Taylor

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

Thursday October 17 2019, Weekly News Digest

LendingClub

News Comments Today’s main news: Zopa launches tool to compete with credit bureaus. KBRA assigns preliminary ratings to Marlette Funding Trust 2019-4. OnDeck Capital financial results. ID Finance raises 1.7M euro on Crowdcube in minutes. Canada’s fintech adoption rate has doubled since 2017. Today’s main analysis: LendingClub account performance (A MUST-READ). LendingTree’s Personal Loan Offers Report […]

The post Thursday October 17 2019, Weekly News Digest appeared first on Lending Times.

LendingClub

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2019-4 (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Marlette Funding Trust 2019-4 (MFT 2019-4). This is a $326.27 million consumer loan ABS transaction.

Preliminary Ratings Assigned: Marlette Funding Trust 2019-4

Class

Preliminary Rating

Initial Class Principal

A

AA (sf)

$260,298,000

B

A (sf)

$30,117,000

C

BBB- (sf)

$35,854,000

On Deck Capital Inc. Financial Results Comparing With Consumer Portfolio Services Inc. (Mesa Weekly), Rated: AAA

On Deck Capital Inc.’s volatility measures that it’s 85.00% more volatile than S&P 500 due to its 1.85 beta. Consumer Portfolio Services Inc. on the other hand, has 1.53 beta which makes it 53.00% more volatile compared to S&P 500.

Earnings & Valuation

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
On Deck Capital Inc. 3 0.12 45.93M 0.45 7.99
Consumer Portfolio Services Inc. 4 0.55 13.97M 0.50 7.37

Profitability

Net Margins Return on Equity Return on Assets
On Deck Capital Inc. 1,349,850,114.62% 12.2% 3.1%
Consumer Portfolio Services Inc. 396,042,410.84% 7.6% 0.6%

Global cooling; Upgrade Card (PeerIQ), Rated: AAA

In industry news, Upgrade led by CEO Renaud Laplanche released the “Upgrade Card”. The product is a cross between credit card and an installment loan. How does it work? Every month any new charges on the card transition into an installment loan of 12, 24, or 36 months. Customers can select the default payback period when applying for the card and they have the option to change the term for new charges at any time. Upgrade Card offers true risk-based pricing with a range of 6.49% to 29.99%. LendIt Co-Founder Peter Renton has a nice summary here.

In macro news, the Fed is expected to cut rates for a third time later this month to a range of 1.5% to 1.75%.

Source: OECD Interim Outlook Projections, Blackstone, PeerIQ
Source: WSJ, Cantor Fitzgerald, PeerIQ

New LendingClub Account Performance (Lend Academy), Rated: AAA

In April 2018, LendingClub provided us with $5,000 to open a brand new account. Since then we have been chronicling the status of the account on a quarterly basis. Below are links to the full series of blog posts in chronological order:

Source: Lend Academy
Source: Lend Academy

Personal Loan Offers Report – September 2019 (LendingTree), Rated: AAA

At 1,270 basis points, the spread between the highest and lowest offered APRs offered to the same consumers were especially stark for high-score borrowers.

  • The average spread for those with scores of 760 or higher was 1,270 basis points, amounting to a difference of 58.5% on the average loan amount offered for a three-year personal loan.
  • Consumers with scores between 720 and 759 saw an average offer spread of 1,145 basis points, representing a 49.9% difference in interest paid.
  • For those with scores between 680 and 719, the average spread was 971 basis points, representing a 37.3% difference in interest paid.
  • Borrowers with scores between 640 and 679 had an average spread of 860 basis points, representing a 28.2% difference in interest paid over the three years of the loan.
Source: LendingTree

Kiva Lending Team: Lendio Gives (Kiva), Rated: A

Lendio has provided over 10,000 Kiva microloans through its

Source: Kiva

There’s Never Been a Better Time to Consolidate Credit Card Debt (Credible), Rated: AAA

According to data collected by the Federal Reserve, borrowers who were assessed interest on their credit card accounts paid 16.97% on average during the three-month period ending Sept. 31. But the average rate on personal loans was only 10.07%.

That’s a spread of 6.9 percentage points — an all-time high in Federal Reserve records dating back to 1998.

Apple and Goldman Sachs aren’t reporting Apple Card information to credit bureaus (MarketWatch), Rated: A

Apple and Goldman Sachs have yet to start reporting consumers’ payment information for the Apple Card to the major credit bureaus, a source close to Goldman Sachs confirmed to MarketWatch on Monday. The source later said that the companies will begin reporting to the credit bureaus later this quarter.

Goldman Sachs CEO says Apple Card is the most successful credit card launch ever (CNBC), Rated: B

“In three short years, we have raised $55 billion in deposits on the Marcus platform, generated $5 billion in loans, and built a new credit-card platform and launched Apple Card,” Solomon said, adding “which we believe is the most successful credit card launch ever.”

Rise of fintech weakens law to prevent lending discrimination (Roll Call), Rated: AAA

As online banking threatens to make in-person banking at brick-and-mortar branches as archaic as video rental stores, it may do the same to a 1977 law created to counteract decades of underinvestment in minority neighborhoods.

Fewer branches, more online

While that includes some wholesale banks or limited purpose institutions, like credit card banks, online banking is driving the sector’s growth.

At the same time, the number of bank branches with an obligation under the CRA to provide loans and other services is falling. Branches have declined every year since a peak in 2010, at 99,550, according to data from the Federal Deposit Insurance Corporation. Banks closed 1,700 branches in 2018, dropping the total number to 86,375.

After steadily rising to a peak of $505 billion in 2016, the number of CRA-compliant loans that banks issued dropped in 2017 to $482 billion, according to the Office of the Comptroller of the Currency.

CNB Bank Moves to Revolutionize its Retail Lending with nCino (PR Newswire), Rated: A

nCino, the worldwide leader in cloud banking, today announced that Pennsylvania-based CNB Bank will utilize nCino’s Bank Operating System to digitize its retail lending process from end-to-end to enrich the customer experience.

California has reformed consumer loan interest rates. But will lenders find loopholes? (Cal Matters), Rated: A

Gov. Gavin Newsom has signed into law Assembly Bill 539 by Assemblywoman Monique Limón, Santa Barbara Democrat. The measure sets an annual interest rate cap of roughly 36% on consumer loans from $2,500 to $10,000 made by non-bank lenders.

For the prior 34 years, under state law, the sky was the limit on rates charged for such loans. Last year, 333,416 non-bank consumer loans in the $2,500 to $10,000 range had annual percentage rates of 100% or higher. That represented 40.7% of such loans. In the $2,500-$4,999 range, the triple-digit APR ratio was 55.5%.

DrawBridge Lending CEO Discusses Risk and Compliance for Lending Capital to Bitcoin Holders (Crowdfund Insider), Rated: A

Earlier this month, DrawBridge Lending (DBL Digital), a digital asset lending, borrowing and investment management firm, partnered with Kingdom Trust, a qualified custodian providing a self-directed IRA incorporating several digital assets with property and traditional asset investments.

To be eligible to invest, investors must be eligible contract participants (ECPs), which means they should have a minimum net worth of $1 million. The minimum investment in Drawbridge Lending’s series fund is $1 million, which can be met with the contributions of multiple investors.

There are more than 600,000 millennial millionaires in the US, according to report (CNBC), Rated: A

There are 618,000 millennial millionaires in the U.S. and their wealth is only expected to grow.

Currently, 93% of millennial millionaires have a net wealth between approximately $1 million and $2.5 million, according to the report. Nearly 60% live in either California or New York and they are investing more in real estate than their elder-millionaire counterparts.

The Pros and Cons of Using Peer-to-Peer Lending When Investing in Real Estate (The Motley Fool), Rated: A

Today’s real estate investors have many financing options at their disposal. There are traditional options like government-backed loans, home equity lines of credit (HELOCs), and investment property mortgages. But on top of those, you also have new-age choices like crowdfunding and peer-to-peer (P2P) lending platforms.

Real Estate Earnings: What To Watch For This Quarter (Seeking Alpha), Rated: A

The “REIT Rejuvenation” of 2019 has restored the coveted NAV premium for most sectors, giving these REITs the currency to re-open the acquisition pipeline. This valuation premium has allowed REITs to kick-start external growth, which has historically been responsible for more than half of FFO per share growth across the REIT sector. REITs were net buyers again in 2Q19, buying $12.5 billion in assets while disposing of $6.6 billion. The $5.9 billion in net acquisitions was the largest quarterly “buy” since 4Q17, and we expect this trend to continue into 2020 given the favorable valuation environment. We break down the acquisition activity for each of the REIT sectors later in this report.

Source: Seeking Alpha

AMERICAN FINANCIAL RESOURCES AND FINICITY PARTNER TO SIMPLIFY THE MORTGAGE EXPERIENCE (Finicity), Rated: B

American Financial Resources, Inc. (AFR) announced today it is working together with Finicity—a provider of real-time financial data access and insights, to provide its business partners and their borrowers with a faster, simpler and more secure way to verify assets and income while originating loans.

Roofstock Accelerates Innovation with New Chief Product Officer at the Helm (Yahoo! Finance), Rated: B

Roofstock, the marketplace for investing in real estate, announced the addition of Ketan Babaria to the fintech’s leadership team as Chief Product Officer. Formerly the Head of Product for LifeLock and Capital One’s D3 incubation unit, Babaria will enhance Roofstock’s current offerings and introduce new, creative ideas to accelerate the fintech’s growth and make real estate investing radically accessible.

Director of Operations Joins Fintech Startup LenderClose (DS News), Rated: B

Des Moines fintech startup company LenderClose has welcomed Andrew Deignan as Director of Operations. Deignan will manage the Operations and Vendor Relationships group, ensuring LenderClose delivers the highest level of service to its credit union and community bank lender users.

United Kingdom

Zopa launches tool to dispel “mystery” of credit worthiness (AltFi), Rated: AAA

Zopa, the first ever peer-to-peer lending platform, is launching the tool, called Borrowing Power, as it says that lending decisions and credit worthiness have been “shrouded in mystery” for too long.

The tool, which is free of charge, works by giving Zopa customers a borrowing score between one and ten. Customers are shown why they are given the score and how they can help improve the score.

In the Spotlight with Mario Lupori, RateSetter (Financial Reporter), Rated: AAA

We spoke to Mario Lupori, chief investments officer at RateSetter, about whether there is more consolidation to come in the peer-to-peer market and whether forthcoming regulatory changes will hinder the sector.

Samsung.com partners with Klarna to offer pay later payment plans (IBS Intelligence), Rated: A

Samsung.com has partnered with payment provider Klarna in the UK to provide customers service to make purchases from its website and pay later. The customers will get a convenient and hassle-free way to pay later at Samsung.com.

Klarna: too good to be true for students? (Mancunion), Rated: A

Klarna is perfect in those situations, giving you a ‘try before you buy option’. You can get as many items as you wish, in as many sizes, returning all the items you don’t need before a penny leaves your bank account. There’s no waiting around for refunds to reach your depleted bank account – you only pay for what you actually keep.

Octopus Choice’s P2P loans now available within a SIPP (AltFi), Rated: A

The firm has announced that its P2P investment platform is now accessible within a SIPP wrapper.

Could banks become redundant in the future? (Finextra), Rated: A

P2P lending as it right now stands absolutely no chance in competing with traditional banking, as it requires a bit too much time from the lender’s side.

However, should technology such as Artificial Intelligence be successfully implemented on these platforms, it’s likely that P2P lending will occupy a large percentage of the financial market share.

Starling launches TV ad campaign after reaching 900,000 customers (AltFi), Rated: A

Today Starling Bank will premiere its first TV ad on ITV and Channel 4 during England’s UEFA Euro 2020 qualifier against Bulgaria, and Jamie’s Meat Free Meals.

Celsius Now Offers up to 10% Return on TrueUSD Lending Service (Finance Magnates), Rated: A

Celsius Network, a cryptocurrency lending and borrowing platform, has partnered with TrustToken, the team behind dollar-pegged TrueUSD (TUSD), to offer up to 10 percent interest on four new stablecoins.

Casa Italia to expand its restaurant in Liverpool following £650k loan from OakNorth Bank (Fintech Finance), Rated: B

China

PayPal wants to help Chinese online shoppers buy from overseas (Business Telegraph), Rated: AAA

By the end of this year, Chinese online shoppers will have a new way to buy things from abroad: PayPal.

Despite the tensions between Beijing and Washington, China’s central bank has allowed the US company to take a toehold in the country’s valuable payments market by buying a majority stake of Chinese payments group Gopay.

European Union

Barcelona-based fintech ID Finance secures €1.7 million within minutes on Crowdcube (EU-Startups), Rated: AAA

Barcelona–based ID Finance, a fintech that operates in Europe and Latin America, has raised over €1.7 million in crowdfunding within minutes of its campaign going live on Crowdcube, amidst strong demand from investors. The data science, credit scoring and digital finance company has a target of €2.3 million.

The company has a well established global team and over 3 million users, with over 40,000 new users joining each week. It is on track to double revenues this year to €90 million – up from €13 million in 2017 – and is targeting over €267 million in revenue by 2021, with the goal of becoming the number one digital lending platform in Hispanic and Latino markets.

Fintech exits have raked in €83bn since 2013 amid European funding boom (sifted), Rated: AAA

The sale of European fintechs via initial public offerings or acquisitions has pulled in €83bn over the past six years, according to a new report by Dealroom.co and Finch Capital. This is twice as much as the next biggest category, enterprise software, and highlights the scale of opportunity for investors as well as the growing maturity of the fintech market.

Some of the biggest exits were the €7.1bn flotation of Dutch payments company Adyen and the sale of Swedish start-up iZettle to Paypal for $2.2bn last year.

The same report also estimates that the continent’s remaining private fintechs have an “unrealised” value of €43bn combined, including companies such as N26 and Starling Bank.

Source: sifted
Source: sifted

Which P2P Lending Marketplaces in Europe Accept American Investors? (P2P-Banking), Rated: A

European p2p lending services are growing. And yields of 10+% are achievable on some of the platforms. This attracts international investors.

Here is an overview of 5 services (sorted aplphabetically) that do allow US investors.

Assetz Capital is a marketplace for UK SME and property development loans. The liquid ‘access’ products offer 4.1% to 5.75% interest.

Bondora is an Estonian p2p lending marketplace for consumer loans. The highly liquid Go&Grow product offer yields 6.75%. With other products higher yields of 10+% are achievable.

Estateguru is an Estonian marketplace for property loans. Typical interest rates are 10-12%.

Flender is an Irish marketplace for SME loans. Typical interest rates are around 10%.

Mintos is a Latvian p2p lending market place. A wide range of loan types is offered. The fairly liquid ‘Invest&Access’ product currently promotes around 8% rate. Yields of 10+% are possible with manual and autoinvest.

Europe’s top tech startups to know (sifted), Rated: A

Europe’s startup scene is often overshadowed by Silicon Valley, but the continent is gaining ground with more than 160 tech firms valued at over €1bn.

Klarna
Founded 2005 — Stockholm, Sweden — Unicorn

In 2019 it launched a new $460m fundraising round, giving the company a post-money valuation of $5.5bn and making it the highest-valued private fintech company in Europe. That was a 250% increase on its last valuation at the beginning of the year.

Starling Bank
Founded 2014 – London, UK – Rising Star & Female Led

Led by Anne Boden, Starling has made a dent in the UK’s thriving fintech ecosystem. As of August 2019 the bank has just shy of 800,000 customers, including around 60,000 business accounts. The company says it’s on track to pass a million this year and already has £1bn in deposits.

These numbers are not quite as impressive as Monzo, which boasts 3m customers, or Germany’s N26 with 3.5m.

Greensill
Founded 2011 — London, UK — Unicorn

Former British Prime Minister David Cameron is an advisor to the firm, which is backed by Softbank’s vision fund. The most recent funding round of $800m valued the company at $3.5bn — firm unicorn territory.

Its working finance solution is funded through issuing its own bonds, making it one of the largest bond issuers of the world, with an average of 47 bonds a day.

Nigerian SME Digital Lender Lidya Expands to Europe (Forbes), Rated: A

In an increasing trend where African technology companies are finding a global audience, Nigerian digital SME lending platform Lidya has expanded to Poland and the Czech Republic.

International

London-based finance platform Divido inks deal with US payment company Splitit offering point-of-sale finance (AltFi), Rated: A

Divido, the London-based consumer finance platform which lets consumers take out credit at the point of purchase to help spread the cost of purchases, has signed a deal with US payment company Splitit to offer a monthly instalment option to customers.

4+ INTERNET BANKING OPTIONS FOR GAMING (One Vale Fan), Rated: B

Klarna has become famous among the players in many countries since its creation in 2005. This virtual bank is seductive for its fast transactions and its privacy. The gamblers will remain anonymous when they deposit or withdraw funds utilizing Klarna as a method. In fact, this Swedish company does not ask any personal details or private information. What’s more, Klarna is also an excellent service to the mobile casino allowing the users to move funds at their convenience.

India

How Can Neobanks Potentially Transform SME Lending? (Inc42), Rated: AAA

Neobanking is a relatively newer concept in India as compared to the West, and is still on a take-off mode. However, market experts observe the gradual and steady adoption of Neobanks and credit their fast growth to its lender and SME-friendly characteristics.

IN CONVERSATION WITH CRIF’S ATRIDEB BASU & HOW HE SCALED DATA & ANALYTICS PRACTICE IN INDIA (Analytics India Mag), Rated: A

CRIF is an Italian company, based out of Bologna and caters to more than 6K banks and financial institutions across 30+ countries globally. In India, CRIF has two broad arms – one is the 100% subsidiary (called CRIF Solutions India) – which focuses on consulting, analytics and products and the other is the credit bureau where it has major ownership (CRIF Highmark) – which focuses on multiple services on retail and commercial side.

Asia

Investors Pour Record $ 735 Million Into Singapore Fintech Deals (Bloomberg), Rated: AAA

Investors poured a record $735 million into financial-technology ventures in Singapore in the first nine months of this year, according to research from Accenture Plc, which analyzed data from CB Insights, Pitchbook and Tracxn.

That’s up 69% from the same period a year earlier and exceeds the $642 million raised in all of 2018, the study found. Investments in payments startups and those in lending made up the bulk of fintech fundraising, accounting for 34% and 20% of the total, respectively. Insurance technology deals comprised 17%.

MENA

Region’s P2P lending platform Beehive funds first SME in Bahrain (Statup MGZN), Rated: A

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

The funding was granted to Bahrain-based Mira Packaging Factory, which manufactures disposable cups in addition to other food packaging solutions for the GCC, and the African F&B industry.

Canada

FinTech adoption in Canada has increased from 18% to 50% since 2017, according to the EY Global FinTech Adoption Index 2019. Among the reasons driving consumers to FinTech services are better rates and fees (42%), ease of setting up an account (19%) and more innovative products and services (10%).

Authors:

George Popescu
Allen Taylor

The post Thursday October 17 2019, Weekly News Digest appeared first on Lending Times.

Thursday October 3 2019, Weekly News Digest

banks mortgage

News Comments Today’s main news: Morningstar to rate blockchain securities. nCino raises $80M. RateSetter rolls out Access, Plus, Max. Revolut losses double. Today’s main analysis: Race and homeownership. Today’s thought-provoking articles: Big banks are losing mortgage share. Race and homeownership. LendIt Fintech Europe highlights. International P2P lending volumes for September 2019. United States Morningstar to offer […]

The post Thursday October 3 2019, Weekly News Digest appeared first on Lending Times.

banks mortgage

News Comments

United States

United Kingdom

International

European Union

Other

News Summary

United States

Morningstar Inc. will offer ratings to blockchain based securities (Ripple Coin News), Rated: AAA

Chicago-based financial service provider, Morningstar Credit Ratings announced plans to diversify its business operation by providing ratings for debt securities issued on public blockchains, also known as crypto-assets. Morningstar Inc, the parent company of the rating agency is valued at $6.4 billion. Last year it generated $1.7 billion in revenue. The company is well known for rating mutual funds from giants of the financial world like Prudential and  Morgan Stanley among others.

North Carolina-based Fintech Startup nCino Raises $ 80M (Crunchbase), Rated: AAA

North Carolina-based nCino, which has developed a cloud-based operating system for financial institutions, has raised $80 million in a round of funding led by T. Rowe Price Associates Inc.

Bank Wars; ABS East + Blockchain; Housing (PeerIQ), Rated: AAA

In U.S Housing, borrower home equity is hitting all time highs. Homeowners with a mortgage saw equity increase by 4.8% since 2Q2018. This equates to $4,900 gained per American homeowner and a strengthening of the US consumer balance sheet.

Over the past ten years, the largest American banks – Wells Fargo, JPMorgan, and Bank of America – have seem their share of home loan originations fall 30% as digital customer friendly non-banks such as Quicken Loans take share.

Source: PeerIQ, Financial Times

White Americans Have the Highest Homeownership Rates but There Are Large Differences Among Cities (LendingTree), Rated: AAA

Americans who identify as white own a disproportionately large percentage of homes in all of the nation’s 50 largest metros. White Americans make up an average of 59% of people in the metros featured in our study, but they own around 73% of owner-occupied homes.

Where white Americans own the most homes relative to their overall population

New York

% of the population – White alone: 46.99%
Median household income – White alone: $91,806
% of owner-occupied homes – White alone: 68.65%
Difference between % of owner-occupied homes and % of population: 21.66%

San Diego

% of the population – White alone: 46.20%
Median household income – White alone: $80,276
% of owner-occupied homes – White alone: 65.37%
Difference between % of owner-occupied homes and % of population: 19.17%

Phoenix

% of the population – White alone: 56.41%
Median household income – White alone: $64,423
% of owner-occupied homes – White alone: 75.17%
Difference between % of owner-occupied homes and % of population: 18.76%

Source: LendingTree

Where white Americans own the least homes relative to their overall population

Pittsburgh

% of the population – White alone: 85.82%
Median household income – White alone: $59,089
% of owner-occupied homes – White alone: 93.29%
Difference between % of owner-occupied homes and % of population: 7.47%

Source: LendingTree

BFS Capital Eliminates Upfront Fees to Simplify Financing for Small Business Owners (Yahoo! Finance), Rated: A

BFS Capital today announced it has eliminated all upfront fees on its financing solutions, including loans and business advances, as it simplifies pricing for small business owners.

BFS Capital customers can now apply for and receive up to $500,000 in financing with no origination fees, no processing fees and no upfront costs.

Self Announces The Self Visa Credit Card, A First-Of-Its-Kind Secured Credit Card That Does Not Require A Credit Check (Globe Newswire), Rated: A

Self, a leading fintech startup offering people a way to build their credit while also saving money, today announced the release of the Self Visa® Credit Card. This first-of-its-kind secured card uses a unique funding model to provide customers with a line of credit without the need for a significant upfront investment or a credit check – two areas that perennially sideline subprime consumers who are looking to build their credit scores.

The Crowdfunding Revolution Might Never Come To CRE (Bisnow), Rated: A

Crowdfunding has not coalesced into the influential force in commercial real estate some may have expected, and is at risk of being decimated by the next economic downturn.

RiverNorth Marketplace Lending Announces Monthly Distribution of

RiverNorth Marketplace Lending Announces Monthly Distribution of $0.18 Per Share (Crowdfund Insider), Rated: A

.18 Per Share (Crowdfund Insider), Rated: A

RiverNorth Marketplace Lending Corporation, an established and currently operating as a closed-end interval fund dedicated to the marketplace lending asset class, announced on Tuesday its monthly distribution of $0.18 per common share for the months of October, November, and December 2019.

The Robot Revolution Will Wipe Out 200,000 U.S. Banking Jobs in the Next Decade (Fortune), Rated: A

Technological efficiencies will result in the biggest reduction in headcount across the U.S. banking industry in its history, with an estimated 200,000 job cuts over the next decade, Wells Fargo & Co. said in a report.

The $150 billion annually that the country’s finance firms are spending on tech — more than any other industry — will lead to lower costs, with employee compensation accounting for half of all bank expenses, said Mike Mayo, a senior analyst at Wells Fargo Securities LLC.

Goldman Sachs Tries Banking for the Masses. It’s Been a Struggle. (WSJ), Rated: A

Two dozen of Goldman Sachs Group Inc.’s most profitable traders were kicked off their desk last year to make room for the swelling ranks of the firm’s Main Street lending arm.

Small bank’s big digital goal: Launch 3 niche banks (American Banker), Rated: A

The first one, introduced this summer, is called “booyah” and is aimed at college students and young graduates. The $122 million-asset bank sees it as a way to target a specific audience outside the central Florida area and boost deposits in order to ward off competitive threats from fintechs.

The Seven-Year Auto Loan: America’s Middle Class Can’t Afford Its Cars (WSJ), Rated: A

Walk into an auto dealership these days and you might walk out with a seven-year car loan.

That means monthly payments that last well past when the brake pads give out and potentially beyond when the car gets traded in for a new one. About a third of auto loans for new vehicles taken in the first half of 2019 had terms of longer than six years, according to credit-reporting firm Experian PLC. A decade ago, that number was less than 10%.

Naborly Raises $ 7.5M in Seed Funding (FINSMES), Rated: A

Naborly, a San Francisco, CA-based credit bureau for the rental industry, closed its $7.5m seed funding round.

How Much Money Can I Get From a Business Loan? (All Business), Rated: A

It’s rare for two loan offers from two lenders to come out to exactly the same number. Different lenders (traditional banks, online lenders, alternative lenders) evaluate a variety of factors, have different algorithms, and may place more emphasis on different aspects of your business history.

Coinbase Announces 1.25% APY on USDC Holdings (DeFi Rate), Rated: A

Today, Coinbase announced the launch of USDC rewards. US Coinbase customers are now eligible to earn 1.25% APY rewards on all USD Coin ($USDC) held on Coinbase.

This announcement comes amid the DeFi boom in 2019. While 1.25% APY is substantially higher than traditional savings rates at banks, it’s still lagging behind the broader DeFi lending market. As of writing, Compound currently offers 5.34% APY on USDC holdings while dYdX offers 3.85% APY – View current USDC lending rates. This doesn’t account for other stablecoins, such as Dai, where holders can earn upwards of 8%.

Investors Say Curo’s Bid To Nix Their Suit Misses The Point (Law360), Rated: A

Investors on Tuesday said their stock-drop suit against online lender Curo is
about misrepresentations regarding transition away from its most profitable product, not simple failure to meet financial goals, as the company suggests. The online lender said in an August dismissal bid that investors were trying to plead “fraud by hindsight” case in alleging Curo misled them about transition away from offering lucrative single-pay loans in Canada, which had drawn the scrutiny of regulators there, and into longer-term open-end loans. 

eOriginal Chief Product Officer Honored as a 2019 HousingWire Tech Trendsetter (PR Web), Rated: B

eOriginal, a digital lending technology pioneer, is proud to announce that Simon Moir, Chief Product Officer, has been named to HousingWire’s Tech Trendsetters list for 2019. HousingWire’s inaugural award recognizes the impactful and innovative technology leaders serving the housing and mortgage finance industry. This is on the heels of eOriginal’s second consecutive listing as one of HousingWire’s HW Tech 100TM in April 2019.

OYO Announces Partnership With Biz2Credit to Provide Small Business Financing Options to Hotel Owners (Globe Newswire), Rated: B

OYO, the world’s third-largest and fastest-growing chain of hotels, homes and spaces*, has partnered with Biz2Credit to provide working capital and commercial real estate loans to existing and potential hotel partners across the United States.

Finastra Launches Fusion Mortgagebot Data Insights to Help Financial Institutions Optimize their Mortgage Business (Financial Content), Rated: B

Finastra has launched Fusion Mortgagebot Data Insights – a powerful new tool that benchmarks mortgage borrower behavior and demographics for banks and credit unions against that of more than 1,400 other Fusion MortgagebotPOS users. The solution leveraged Big Data and machine learning to provide users with new insights into consumer behavior to drive a better borrower experience.

Seattle Bank expands relationship with Finastra to drive innovation (Finastra), Rated: B

Seattle Bank, a single branch boutique bank with $650 million in assets, has selected Fusion Phoenix from Finastra to be the open, modern core to run its banking operations, enabling the bank to better serve clients. The core banking system will be integrated with additional Finastra solutions, including Fusion Mortgagebot, Fusion Card Payments, Fusion Analytics, Fusion Item Processing Services, Fusion LaserPro, and Fusion Digital Banking.

United Kingdom

Welcome to Access, Plus and Max! (RateSetter), Rated: AAA

I am delighted to say that our three new investment products – Access, Plus and Max – launched today and are ready for you to enjoy.

Fintech unicorn Revolut’s losses double as it pushes for global expansion (CNBC), Rated: AAA

British financial technology start-up Revolut’s losses doubled in 2018, the firm said Tuesday, as the company embarks on an aggressive global expansion.

The London-headquartered firm recorded a £32.8 million ($40.3 million) net loss on revenues of £58.2 million for 2018. That was more than double the £14.8 million loss it posted a year earlier, while revenue climbed 354%.

Visa Expands Alliance with Revolut to Grow in Fintech Space (Zacks), Rated: A

Visa Inc. (V – Free Report) has expanded its partnership with fintech company Revolut. This London based company will be assisted by Visa to expand its business globally.

LandlordInvest staff asked to avoid EU travel as P2P lenders prepare for Brexit deadline (P2P Finance News), Rated: A

LANDLORDINVEST has asked staff to avoid travelling outside the UK after 31 October as peer-to-peer lending platforms prepare for the latest Brexit deadline.

Small business owners should beware when backing their business debt (Money Week), Rated: A

After all, one argument for setting up a business as a limited company, rather than operating as a sole trader, is that you separate your affairs from the company’s.

However, while this is true in theory, it may not pan out in practice. If your business needs to borrow, lenders often expect owners to stand behind the loan. They ask for a personal guarantee that the debt will be repaid. These guarantees aren’t secured – they’re not tied to a particular asset, such as your home – but they do give lenders a legal right to come after your personal wealth in the event your business defaults.

The future of finance is fintech (Raconteur), Rated: A

When Innovate Finance was formed five years ago, with a mandate to represent an emerging UK fintech community, the picture was different to today. The focus was on models challenging traditional approaches to banking, disrupting the incumbents’ model that had stood for decades.

In the years since, peer-to-peer lending became simpler, management of personal finances became more accessible, and remittance processes became faster and more affordable.

Brokers should be Open Banking advocates (Bridging and Commercial), Rated: A

It’s now more than a year and a half since the introduction of Open Banking, which allows people to securely share data about how they spend their money with other parties.

Drapers and Klarna launch Next Generation Entrepreneurs (Drapers), Rated: A

Drapers’ Next Generation Entrepreneurs are the founders and chief executives that we think are changing fashion. The list shines a light on the new wave of game-changers, innovators and boundary-breakers that are making their mark on the UK fashion industry, as well as emerging businesses that exhibit innovative, entrepreneurial spirit.

Dutch app-only bank Bunq to launch in UK this week (AltFi), Rated: A

The Dutch app-only bank bunq is to launch in the UK this week, saying there are “too many traditional banks” in the UK.

10 Respected Entrepreneurs Reveal How Failures and Triumphs Shaped Who They Are Today (Digital Journal), Rated: A

– Courtney Nichols Gould, Founder& co-CEO, SmartyPants Vitamins
– Annie Jackson, co-founder & COO, Credo Beauty
– Sarah Kauss, Founder & CEO, S’well
– Stephen Kuhl, co-founder & CEO, Burrow
– Renaud LaPlanche, co-founder & CEO, Upgrade, Founder of Lending Club (NYSE: LC)
– Jody Levy, Founder, CEO & Creative Director, World Waters (Maker of WTRMLN WTR)
– Betty Liu, Founder of Radiate, Executive Vice Chairman of The New York Stock Exchange (NYSE)
– Ben McKean, Founder, Hungry Root
– Sasha Plavsic, Founder & CCO, ILIA Beauty
– Nat Turner, co-founder & CEO, Flatiron Health

Ex-City minister shines spotlight on P2P lending secondary markets (P2P Finance News), Rated: B

The former City minister, who has already tabled several parliamentary questions regarding the role of the Financial Conduct Authority (FCA) in the collapse of Lendy and Collateral, has widened the scope of his P2P queries.

He has tabled two parliamentary written questions in the past week.

European Union

How Linked Finance is Linking Irish SMEs With Quick Loans (deBanked), Rated: AAA

The nation’s Central Statistics Office puts the number of active enterprises in the private business economy at over 250,000. As of June, Linked Finance had made more than 2,100 loans for a grand total of more than €100 million.

LendIt Fintech Europe 2019 Conference Highlights (Lend Academy), Rated: AAA

We have just wrapped up what I think has been the most successful European conference LendIt has ever had.

We kicked off the show with Rishi Khosla, CEO and Co-Founder of OakNorth. Their approach to underwriting is super interesting. While they have very much a digital approach, they are originating loans typically for £5 million to £10 million to fast growth companies.

Bnext raises $ 25 million for its mobile banking alternative (TechCrunch), Rated: A

Fintech startup Bnext has raised a $25 million funding round. The Spanish company is building a banking product and has managed to attract 300,000 active users.

You can lend money to small and medium businesses and earn interest through October, you can save money using Raisin, you can get a loan, a mortgage, an insurance product, etc. Bnext generates revenue from those partnerships.

International

International P2P Lending Volumes September 2019 (P2P-Banking), Rated: AAA

Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 639 million Euro.

Milestones in culumulative volume lent crossed this month:

Source: P2P-Banking
Australia

P2P lender partners with aggregator (Broker News), Rated: AAA

Peer-to-peer lender RateSetter has announced a partnership with PLAN Australia that will make its unsecured personal loan and car loan products available to the group’s 1,700 brokers and their clients.

National Australia Bank to provide $ 57m warehouse funding facility to Symple Loans (AltFi), Rated: A

Australia’s biggest business bank is furnishing a $57m (£46m) warehouse funding facility to personal lender Symple Loans, as part of its $2bn (£1.63bn) commitment to fund technology startups.

Which banks have cut home loan rates already? (mozo), Rated: A

It’s been two days since the Reserve Bank board made the call to lower the official cash rate from 1.00% to 0.75% – an historically low rate in Australia.

Athena and Homestar raced out of the blocks following Tuesday’s RBA announcement – both delivering full 0.25% cuts to their respective variable rate home loans before the ink on RBA Governor Philip Lowe’s monetary policy statement was dry.

Fellow online lender UBank wasn’t far behind after announcing a 0.25% rate cut of its own across a number of variable rate offers.

Asia

Indonesia’s State-Owned Pawnshop PT Pegadaian to Invest $ 35 Million in Local Fintech Firms (Crowdfund Insider), Rated: AAA

The state-owned pawnshop PT Pegadaian in Indonesia is reportedly planning to invest Rp 500 billion (appr. $35.26 million) in several local Fintech firms this year.

Another Milestone Comes True: INLOCK Is Listed on One of the Largest Crypto Exchanges (NewsBTC), Rated: A

On September 30, 2019, after nearly six months of preparation, the INLOCK project, a peer-to-peer lending solution, was listed on the Liquid by Quoine exchange, one of the largest Japanese crypto exchanges in the Asian region, with a daily turnover of $150-200 million.

INLOCK is a peer-to-peer lending platform; its customers can lend or borrow using their cryptocurrencies as a collateral.

40 Innovative Solutions Shortlisted for 2019 FinTech Awards (MAS), Rated: A

The Monetary Authority of Singapore (MAS) and The Association of Banks in Singapore (ABS) announced today that 40 finalists have been shortlisted for the FinTech Awards  to be presented at this year’s Singapore FinTech Festival x Singapore Week of Innovation and Technology (SFF x SWITCH).

Africa

CredoLab set to drive financial inclusion in South Africa (Next Billion), Rated: AAA

Credit scoring fintech company, CredoLab announced on Tuesday, 1 October 2019, that it has officially launched in Africa. Starting in South Africa, CredoLab is aiming to drive financial inclusion in emerging economies on the continent by credit scoring more people, especially those who are new to banking or credit.

Canada

Stability’s important, but Canada needs to take more chances with fintech (Financial Post), Rated: A

According to Ernst & Young’s 2019 Global Fintech Adoption Index, Canada is 14 points, and the U.S. 18 points, behind the global average of 64 per cent consumer fintech adoption, and we trail world leaders like China, India and Russia by even more. The two countries’ approaches to regulating fintech, which in many ways reflect enduring national stereotypes, almost certainly have contributed to our continent’s fintech lag.

Authors:

George Popescu
Allen Taylor

The post Thursday October 3 2019, Weekly News Digest appeared first on Lending Times.

Thursday September 5 2019, Weekly News Digest

neobanks

News Comments Today’s main news: LendingPoint closes $178M personal loans securitization. OnDeck hits $879M in online financing in Texas alone. RateSetter adds three products. Funding Circle lenders face longer cash out waits. Yirendai files Form 6-K. Today’s main analysis: International P2P lending volumes for August 2019. Today’s thought-provoking articles: Silicon Valley is building a social […]

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

neobanks

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

LendingPoint : Closes $ 178 Million Personal Loans Securitization (MarketScreener), Rated: AAA

LendingPoint, the company revolutionizing and democratizing commerce, announced today that it closed its inaugural securitization of consumer loans. LendingPoint Receivables Trust 2019-1 (“LDPT 2019-1”) issued $177.85 million of notes backed by a pool of $187.22 million of direct-to-consumer loans originated on the LendingPoint platform.

The LendingPoint Receivables Trust securitization was rated by Kroll Bond Rating Agency, Inc. and includes $117.76 million of Class A notes rated “A-“, $24.74 million of Class B notes rated “BBB-“, $23.68 million of Class C notes rated “BB-” and $10.67 million of Class D notes rated “B-.” The notes priced at a blended yield of 4.05% per annum and provided for a 95% advance rate. The transaction has a 5% overcollateralization Deposit and a 5% overcollateralization Target. The risk adjusted yield of the receivables securing the notes is expected to be 13.14% per annum.

TyMac Electric Powers Business Success with Online Financing from OnDeck (PR Newswire), Rated: AAA

OnDeck today announced that TyMac Electric of Plano, Texas is its Small Business of the Month for August, 2019.  The 30-person company serves the Dallas-Fort Worth area with high-quality, professionally managed electrical services.

Over the last two years, OnDeck has provided additional financing to TyMac Electric as the business grew to meet demand in the Dallas-Fort Worth commercial marketplace.

Overall, OnDeck has provided more than $879 million in financing online to small business owners in the State of Texas.

2019’s Best & Worst Places to Retire (WalletHub), Rated: AAA

Best Retirement Cities

Overall Rank
(1 = Best)
City Total Score ‘Affordability’ Rank ‘Activities’ Rank ‘Quality of Life’ Rank ‘Health Care’ Rank
1 Orlando, FL 60.87 9 11 68 48
2 Tampa, FL 59.06 10 19 45 95
3 Scottsdale, AZ 58.35 98 22 3 58
4 Charleston, SC 58.30 42 21 56 51
5 Miami, FL 57.21 51 5 105 74
6 Denver, CO 57.08 113 17 43 17
7 Fort Lauderdale, FL 56.58 65 18 82 56
8 Cape Coral, FL 56.50 19 51 15 109
9 Minneapolis, MN 56.46 145 3 58 5
10 Cheyenne, WY 56.06 2 142 50 33

Source: WalletHub

Silicon Valley is building a Chinese-style social credit system (Fast Company), Rated: AAA

Have you heard about China’s social credit system? It’s a technology-enabled, surveillance-based nationwide program designed to nudge citizens toward better behavior. The ultimate goal is to “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step,” according to the Chinese government.

Many Westerners are disturbed by what they read about China’s social credit system. But such systems, it turns out, are not unique to China. A parallel system is developing in the United States, in part as the result of Silicon Valley and technology-industry user policies, and in part by surveillance of social media activity by private companies.

Fundrise Opportunity Zone Fund Has Raised Over $ 22 Million (Crowdfund Insider), Rated: A

Real estate investment platform Fundrise has raised over $22 million for their Opportunity Fund. The information was revealed in a recent Form D 5o6c filing with the Securities and Exchange Commission (SEC).

Kabbage acquires Radius Intelligence, the marketing tech firm with a database of 20M small businesses (TechCrunch), Rated: A

Data is the new oil, as the saying goes, and today Kabbage — a fintech startup backed by SoftBank that has built a business around lending up to $250,000 to small and medium enterprises, using AI-based algorithms to help determine the terms of the loan — is picking up an asset to expand its own data trove as it looks to expand into further SMB financial services. The company has acquired Radius Intelligence, the marketing technology firm that has built a database of information on some 20 million small and medium businesses in the U.S.

Here is a list of the top nonbank and alternative lenders in 2019 (Business Insider), Rated: A

Nonbanks and alternative lenders have garnered attention in the banking industry due to their ability to partner with legacy banks and utilize technology to make financial transactions more efficient and convenient for users.

Source: Business Insider

Chime now has 5 million customers and introduces overdraft alternative (TechCrunch), Rated: A

Challenger bank Chime has reached 5 million customers in the U.S. The San Francisco-based startup is creating an FDIC-insured mobile bank without any physical branch. The company also promises fewer fees.

Back in March, Chime  said it had 3 million customers when it announced its $200 million Series D round. So that’s 2 million additional customers in roughly 5 months.

Zac Prince of BlockFi (Lend Academy), Rated: A

Even Financial raises $ 25 million to connect banks with channel partners (VentureBeat), Rated: A

Even Financial, a four-year-old New York-based provider of APIs for financial services search, acquisition, and monetization, today announced that it’s raised $25 million in a strategic round of investment co-led by Citi Ventures and MassMutual Ventures, with additional participation from LendingClub. Existing backers American Express Ventures, Canaan Partners, F-Prime Capital, GreatPoint Ventures, and Goldman Sachs also participated in the round, which brings the company’s total raised to $50 million.

Credit Sesame, a platform for managing loans and credit scores, picks up $ 43M en route to IPO (TechCrunch), Rated: A

Credit Sesame — which lets consumers check their credit scores and evaluate options to rebalance existing debts and loans to improve that score and thus their overall “financial health,” in the words of CEO and founder Adrian Nazari — has raised $43 million. With the company already profitable and growing revenues 90% each year for the last five, Nazari said that this round is likely to be the last round the company raises before it goes public.

Household debt in the U.S. continues to rise and as of this year now stands at nearly $14 trillion.

Fintech startup CrowdBureau closes $ 1.1 million Series A equity funding with $ 9.7M valuation (Tech Startups), Rated: A

CrowdBureau Corporation, a fintech startup and index provider, has closed $1.1 million Series A equity funding to expand its series of benchmarks and launch a pilot program for its patent-pending regulatory technology product. The round, which values the company at $9.7 million, was led by Clydagh Limited, Estuary Holdings Ltd. and Alpama Limited along with existing investors.

Some Companies Offer a New Benefit: Payroll Advances and Loans (WSJ), Rated: A

A growing number of companies are helping workers gain access to payroll advances and loans, reflecting concern over the impact money problems are having on productivity levels and worker retention.

Employers including Walmart Inc. and Pima County, Ariz., have recently added these services. The aim is to help cash-strapped employees, many with damaged credit, cover unexpected expenses without resorting to high-cost debt.

Lendingblock Launches Institutional Crypto Lending Platform (Lendingblock), Rated: A

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the launch of its institutional lending platform on September 3, 2019. The lending product, which is a reinvented version of securities lending from traditional capital markets, is the first exchange fully dedicated to pure crypto lending and aims to support the needs of the broader cryptocurrency market by providing a secure and liquid venue for lending and borrowing needs of institutional market participants.

Upon launch, Lendingblock platform users will be able to borrow and lend BTC, ETH, PAX and USDT on a fully collateralized basis, for loan terms of 1, 7, 14 and 30 days, with a minimum trade size of $100,000 equivalent of a specified digital asset.

How American Express uses machine learning to detect fraud (American Banker), Rated: A


A financial planner says there’s a ‘huge opportunity’ to build wealth during a recession (Business Insider), Rated: A

As long as you have a cash safety net to fall back on should you lose your job or face an unexpected expense, there’s little reason to panic, says Lauren Anastasio, a certified financial planner at SoFi, a personal-finance company.

Are P2P Loans A Viable Investment for Your Portfolio? (Yahoo! Finance), Rated: A

Peer to peer (P2P) loans allow you to act as a bank, providing loans directly to other individuals or businesses in exchange for a return on your investment via interest payments. Investing in P2P loans, which are typically smaller than a traditional bank loan, has proven to be reliable no matter the economic climate.

Judge Rejects States’ Fintech Charter Challenge, Again (Bloomberg Law), Rated: A

The Office of the Comptroller of the Currency was able to beat back a challenge by state regulators to its proposed charter for financial technology firms for a second time, but the charter remains in limbo due to other litigation.

White Oak Global Advisors Announces Commercial Property Assessed Clean Energy (PACE) Financing Program (GlobeNewswire), Rated: B

White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the California Statewide Communities Development Authority (“CSCDA”) has named White Oak as a commercial PACE Program Administrator for the CSCDA’s Open PACE Program.  As a Program Administrator, White Oak will provide up to 100% financing for energy efficiency, renewable energy, water conservation, and seismic retrofit projects on commercial real estate.

White Oak is seeking to fund projects ranging in size from $500,000 to $150 million.

United Kingdom

RateSetter revamps investment products (P2P Finance News), Rated: AAA

RATESETTER is rejigging its investment products, to boost liquidity and give the peer-to-peer lender more control over market rates.

The three new products, which will be available on 3 October, will be called Access, Plus and Max. Access will offer three per cent interest and no fees to access money; Plus will offer four per cent interest and cost 30 days’ interest to access money; and Max will offer a five per cent interest rate, with a fee of 90 days’ interest to access money.

Funding Circle Amateur Lenders Facing Longer Waits To Cash Out (Morningstar), Rated: AAA

Amateur lenders on peer-to-peer lending platform Funding Circle Holdings PLC are facing waits of 100 days to cash out of their loans, it has emerged.

Investors who provide funding for small businesses through the platform can list old loans for resale to other investors if they wish to withdraw all their money.

But the PA news agency understands that the amount of time taken to re-sell the loan parts has risen from just a few days in January to up to three months in recent transactions.

Funding Circle reveals inclusion in FTSE4Good Index Series (Funding Circle), Rated: A

Funding Circle today reveals its inclusion in the FTSE4Good Index Series, which recognises companies that demonstrate the highest standards of corporate governance and sustainability.

Woodford trust is on the FTSE 250 casualty list (The Times), Rated: B

The investment trust, which focuses on early-stage companies, was one of six companies to be relegated from the second tier of quoted stocks.

Among them is Funding Circle, the online peer-to-peer lender aimed at small and medium-sized companies, which floated at 440p a year ago. Last night its shares closed at 110¼p.

P2PGI blames writedowns and Funding Circle bad debts for poor July (P2P Finance News), Rated: A

P2P GLOBAL Investments has blamed writedowns in the value of two equity stakes and bad debts from Funding Circle for a “disappointing” performance in July.

The alternative finance-focused investment trust delivered a 0.33 per cent NAV return for the month of July, down from 0.48 per cent the previous month. This brought the trust’s year to date return to 2.88 per cent, and 23.93 per cent since inception.

Investors ‘nearly’ double IFISA holdings (AltFi), Rated: A

Small investors have parked £588m across 40,400 accounts by the end of the second quarter of this year, according to trade body the Peer-to-Peer Finance Association (P2PFA).

The compares with around £300m invested in this product 12 months ago across major platforms such as Funding Circle, Ratesetter, Zopa, said the trade body.

Lending Works targets profitability and £10m turnover in 2019 (P2P Finance News), Rated: A

The peer-to-peer consumer lender reported a loss of just over £2.1m for the year ended 31 December 2018, up from £1.41m the previous year, which chief executive Nick Harding (pictured) attributed to a larger wage bill.

There is no requirement for businesses to report revenues in small company accounts, but Harding revealed that the firm saw revenues rise to £6.2m last year and is targeting £10m this year.

Peer to Peer Lender Folk2Folk Tops £300 Million in Lending (Crowdfund Insider), Rated: A

Folk2Folk, a peer-to-peer lender for local, rural and SME businesses, has now surpassed £300 million in lending, according to a company release. Folk2Folk notes that it is the 3rd largest P2P Lender to UK businesses in terms of money lent.

P2PFA boss Paul Smee: ‘Lendy was an outlier that should not have been authorised’ (AltFi), Rated: A

The collapse of Portsmouth-based property peer-to-peer firm Lendy, with outstanding loans of more than £160m, and some £90m in default, prompted the new rules from the FCA. The watchdog is also carrying out an in-depth report into the firm’s failure, which affected with some 21,500 investors. Critics argue that Lendy under competitive pressure wrote poor quality loans to swell its balance sheet, which then turned bad.

However, the Lendy crash, taken together with the poor float of the sector’s biggest firm Funding Circle last October, which languishes 75 per cent below its 440p float price at around 112p this week, has tarnished the sector.

UK Fintech Curve fastest startup ever to reach £4m Crowdfunding on Crowdcube (Fintech Finance), Rated: B

Last month, Curve announced plans to launch a seven figure crowdfunding campaign for early September, with plans to raise £1million. However, just 42 Minutes after launching to pre-registered customers, Curve had raised four times that figure, breaking records in the process. The current overfunding amount stands at £5million.

China

Form 6-K Yirendai Ltd. For: Sep 30 (Street Insider), Rated: AAA

  • Cumulative number of investors served reached 2,185,513, representing an increase of 1% from 2,159,490 in the first quarter of 2019 and compared to 1,974,984 in the second quarter of 2018.
  • Number of active investors in the second quarter of 2019 was 671,957, representing a decrease of 13% from 768,514 in the first quarter of 2019 and compared to 928,251 in the second quarter of 2018.
  • Total assets under management (“AUM”) for Yiren Wealth was RMB 43,604.2 million (US$ 6,351.7 million) as of June 30, 2019, representing a decrease of 7% from RMB 46,663.1 million as of March 31, 2019. Average AUM per investor reached RMB 149,480 (US$ 21,774) as of June 30, 2019, representing an increase of 7% from RMB 139,473 as of March 31, 2019.
  • AUM of non-P2P products amounted to RMB 354.3 million (US$ 51.6 million) in the second quarter of 2019, representing a decrease of 23% from RMB 457.7 million in the first quarter of 2019 and compared to RMB 951.0 million in the second quarter of 2018. Non-P2P products include money market funds, mutual funds and insurance.

Consumer Credit—Yiren Credit

  • Total loan originations in the second quarter of 2019 reached RMB 9.7 billion (US$1.4 billion), representing a decrease of 12% from RMB 10.9 billion in the first quarter of 2019 and compared to RMB 18.2 billion in the second quarter of 2018.
  • Cumulative number of borrowers served reached 4,491,466, representing an increase of 2% from 4,404,812 in the first quarter of 2019 and compared to 4,027,254 in the second quarter of 2018.
  • Number of borrowers in the second quarter of 2019 was 135,246, representing a decrease of 10% from 149,715 in the first quarter of 2019 and compared to 267,628 in the second quarter of 2018.
  • The percentage of loan volume generated by repeat borrowers was 35.9% in the second quarter of 2019.
  • 52.5% of loan originations were generated online in the second quarter of 2019.
  • Remaining principal of performing loans reached RMB 58,071.3 million (US$8,459.0 million) as of June 30, 2019, representing a decrease of 8% from RMB 63,213.8 million as of March 31, 2019.

Yirendai Ltd. (YRD) Q2 2019 Earnings Call Transcript (The Motley Fool), Rated: AAA

As of September 2019, the line of credit we have obtained from our institutional partners has increased from RMB19 billion in Q1 2019 to close to RMB30 billion. We are now working with approximately 10 partners, including leading joint stock and city commercial banks. We expect loan origination funded by institutional partners to reach approximately 30% by the end of this year.

China Rapid Finance Retains China Merchants Bank New York and Pangaea Finance as Co-Financial Advisors for Recapitalization and Restructuring (Yahoo! Finance), Rated: AAA

China Rapid Finance Limited (XRF) (the “Company”) today announced that its Board of Directors has retained China Merchants Bank Co., Ltd., New York Branch (CMBNY), and Pangaea Finance as separate Co-Financial Advisors, and Pangaea Finance as Structuring Agent, to advise it for strategic alternatives, including but not limited to potential strategic partnerships, recapitalization of certain operating companies, and for a related reconfiguration of the Cayman company as a listed investment vehicle for China credit.

Central bank to include troubled P2P lending industry in credit system (Technode), Rated: A

China’s central bank will include the country’s troubled online peer-to-peer (P2P) lending platforms in its credit reference system as the clampdown on illegal financial services continues, Chinese state-run media reported on Wednesday.

China’s credit system to cover P2P lending in tightening regulation (Xinhua), Rated: A

P2P lending platforms in operation will provide certain information such as online lending interest rates to credit reference agencies such as operators of financial credit information basic databases and Baihang Credit, China’s only licensed and market-oriented personal credit agency, according to an official guideline.

China Central Bank’s Credit System to include P2P Lending Platforms amidst tightening regulations (China Knowledge), Rated: A

Credit information of P2P lending platforms will be collected, regardless of their operational status. New penalties will also be imposed on defaulting borrowers of P2P online lending. Some of the penalties include higher loan interest rates and restriction limits to loan and insurance services.

Chinese entrepreneur among 41 arrested over illegal P2P platform (CGTN), Rated: A

Property mogul and founder of a leading Shanghai contemporary art museum Dai Zhikang has turned himself into police following the collapse of a peer-to-peer lending platform, as China continues to crackdown on illegal online lending.

Shanghai police confirmed Monday that Dai, the founder and head of Zendai Group, was among 41 people being investigated over illegal fundraising through an online P2P platform called Laocaibao.

European Union

Revolut is looking to hire 400 customer support staff following compliance complaints (Business Insider), Rated: AAA

Revolut is looking to hire up to 400 staff at a new base in Portugal, a move that will increase its employee headcount by almost a third.

Source: Business Insider

German online bank N26 expands to Switzerland (Verdict), Rated: A

German online bank N26 has launched its services in Switzerland, as it continues to build up its footprint across the globe.

Binance Crypto Lending Program expansion – a bad idea for traders (FX Street), Rated: A

Binance is one of the latest entries in launching its crypto lending platform on August 28. In the first phase, it began with a short period fixed return on Binance (BNB), USDT (Tether) and Ethereum Classic (ETC). It provides an annual return of 15%, 10%, and 7% respectively, beginning with a 14-Day fixed period. Binance starts with about $30 million in crypto-lending. Moreover, the annual interest offered is higher than the return from banks.

International

International P2P Lending Volumes August 2019 (P2P-Banking), Rated: AAA

Milestones in culumulative volume lent crossed this month:

  • Bondora: 250M EUR
  • Fellow Finance: 500M EUR
  • Mintos: 3000M EUR
  • Thincats: 500M GBP

The total volume for the reported marketplaces in the table adds up to 634 million Euro. I track the development of p2p lending volumes for many markets.

Source: P2P-Banking

Fall Conference Season for Fintech Kicks Into Gear This Month (Lend Academy), Rated: AAA

ABS East

When: Sept 22-24, 2019
Where: Miami, FL
Link:  /> Discount code: LEND10

Lend360

When: Sept 25-27, 2019
Where: Dallas, TX
Link: 

LendIt Fintech Europe

When: Sept 26-27, 2019
Where: London, UK
Link: 
/> Discount code: LENDACADEMYVIP

Moneyconf

When: Nov 4-7, 2019
Where: Lisbon, Portugal
Link: 

Money2020 China

When: Dec 4-6, 2019
Where: Hangzhou, China
Link: 

I WISH I’D BOUGHT IT WITH KLARNA (The Drum), Rated: B

The Swedish ‘pay later’ service, Klarna has launched its first international campaign – ‘I wish I’d bought it with Klarna’ – with the internet sensation Celesta Barber as its leading lady.

Australia

Ethereum lossless lottery PoolTogether is still innately flawed despite updates (finder), Rated: A

How do you encourage people to practice responsible saving? Easy. You shake it up with a dose of randomness and call it a lottery instead. This is the basic principle behind Pool Together, a lossless lottery designed in such a way that there are no losers. The idea is that everyone always gets back the price of their ticket, but one lucky person walks away with a lot more than that.

Pool Together is built on Ethereum, and utilises the Dai stablecoin in combination with the Compound crypto lending system.

India

Online lender Namaste Credit launches digital-only bank (Finextra), Rated: AAA

Online lending marketplace Namaste Credit today said that it is launching its Neobanking solutions for MSMEs, becoming a full-fledged “Digital-Only Bank” with a foundational SaaS play.

IndiaMoneyMart opens the first East-India branch for NBFC-P2P Lending (United News of India), Rated: A

Making sense of regulatory sandbox for Fintech startups (Vantage Asia), Rated: A

Over the past few years India has seen rapid development in the financial technology sector and it has the second highest number of Fintech startups in the world. According to certain estimates, India’s Fintech sector added about 1,300 startups from 2015 to 2018. According to the National Association of Software and Services Companies, India’s Fintech market is expected to be worth US$2.4 billion by 2020.

India Government Panel Pushes for Fintech, Regtech Adoption (Regulation Asia), Rated: A

The panel has also proposed the development of a marketplace model for P2P lending, and the introduction of virtual banking in India.

Why fintech panel believes P2P platforms can ease credit supply (India Times), Rated: A

While the importance of P2P lending sector in India is understood by all stakeholders, and a lot has been done over the last few years to encourage the sector, a lot more needs to be done to accelerate its growth.

APAC

Leading Southeast Asian Peer to Peer Lender Funding Societies Revamps with New Executive Team (Crowdfund Insider), Rated: AAA

Funding Societies, one of the largest peer-to-peer (P2P) lending platforms in Southeast Asia, has revamped its executive team with new hires.

Matt Lambie joins as the Chief Technical Officer, Dheeraj Chowdhry as the Chief Executive Officer and Jared Goldberg as the Chief Data Officer.

Top 10 APAC Startups Reigning the Future Finance Industry (Banking CIO Outlook), Rated: A

Africa

AlphaCode of South Africa Invests $ 1.5 Million in Three Domestic Fintech Startups (CryptoNewsZ), Rated: AAA

AlphaCode is the incubation and investment arm of Rand Merchant Investment Holdings, and in a new development, the company has decided to invest a combined $1.5 million in three separate Fintech startups in South Africa. The companies in question are Zande Africa, which is a platform meant for merchant finance, while the others are Bright On Capital, a peer to peer lending firm and Livestock Wealth, an agricultural investment startup. AlphaCode invested $655,000 each on Bright On Capital and Zande Africa, while Livestock Wealth got an injection of $131, 000.

Authors:

George Popescu
Allen Taylor

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

Thursday August 8 2019, Weekly News Digest

LendingClub

News Comments Today’s main news: Funding Circle debuts U.S. ABS platform for small biz loans. LendingClub to pursue national bank charter, reports Q2 losses. SoFi sues unnamed defendants over Consumer Loan Program 2015 Trust. DigiFi launches first open-source loan origination system. BlockFi raises $18.3M for crypto lending. Funding Circle posts higher revenues, bigger pre-tax losses. […]

The post Thursday August 8 2019, Weekly News Digest appeared first on Lending Times.

LendingClub

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

Funding Circle debuts ABS platform for U.S. small-business loans (Asset Securitization Report), Rated: AAA

Funding Circle is securitizing its first pool of U.S.-based small business loans.

According to Kroll Bond Rating Agency, the online business-loan lender is marketing $198.45 million in notes backed by loans made to small- and medium-sized businesses in the U.S. Funding Circle has previously issued notes for asset-backed pools of small-business loans in its native UK.

The transaction consists of four classes of notes, including a $142.8 million Class A tranche with an initial A- rating from Kroll, and benefiting from 32.5% credit enhancement.

LendingClub Discusses National Bank Charter, GreenSky Exploring Sale (Lend Academy), Rated: AAA

A topic that has been coming up more often is the potential of a national bank charter. Last week we learned that small business lender OnDeck was pursuing a charter and LendingClub is doing the same.

Today LendingClub reported their Q2 2019 earnings. Highlights include record loan originations of $3.1 billion, up 11% from the prior year period and record net revenue of $190.8 million, up 8% year over year.

Source: LendingClub and LendAcademy

GreenSky Q2 2019 Earnings

David Zalik, GreenSky Chairman and CEO included this statement in the press release:

Notwithstanding the Company’s solid operating results, in light of the complexity of the Company’s operating model, we do not believe that the Company’s current market value is reflective of the Company’s strong record of cash flow generation and intrinsic value. Accordingly, GreenSky’s Board of Directors, working together with its senior management team and legal and financial advisors, has commenced a process to explore, review and evaluate a range of potential strategic alternatives focused on maximizing stockholder value. In connection with this review, GreenSky has retained FTP Securities LLC (“FT Partners”) and J.P. Morgan Securities LLC as its financial advisors, and Cravath, Swaine & Moore LLP and Troutman Sanders LLP as its legal advisors.

The news sparked Christopher Donat, an analyst Sandler O’Neill to speculate that Square or Goldman Sachs could be potential buyers according to this article in American Banker.

LendingClub envisions a ‘marketplace bank,’ seeks charter (Bank Innovation), Rated: A

Peer-to-peer lending platform LendingClub is exploring the possibility of obtaining a national bank charter as it adjusts its strategy following a $10.6 million loss in the second quarter.

Digital Banking: LendingClub Gets Some Fintech Love as it Pursues National Bank Charter (Crowdfund Insider), Rated: A

Shares in LendingClub (NYSE:LC) are rising during another down market day as the trade war with China has no end in sight and political tempers flare. Shares are currently trading over 10% higher following yesterday’s Q2 earnings report where LendingClub said it expected to finally report a positive net incoming in Q3 following years of losses.

Second, LendingClub has hardened its lending model with years of fine-tuning. Unlike some other digital-only banks, LendingClub has been providing credit to consumers for more than a decade having originated over $50 billion in loans.

LendingClub Logs Lower-Than-Expected Losses (PYMNTS), Rated: A

By the numbers, net loss came in at $10.66 million or $0.12 per share — a lower loss than last year when Lending Club reported a loss of $60.86 million or $0.72 per share. Adjusted loss per share narrowed to $0.01 from $0.08 a year earlier.

Net revenue increased 8 percent from year-ago revenues of $176.98 million in 2018 to $190.8 million in 2019, driven by the higher volume of loan originations Sanborn mentioned.  Loan originations during the quarter were at $3.1 billion, up 11 percent year over year. While the revenue number is an improvement, it came in very, very slightly below analysts’ estimates.

LendingClub posts smaller-than-expected loss on loan originations (Nasdaq), Rated: A

LendingClub said it now expects smaller loss for the year than it had previously forecast. Adjusted net loss is expected to be between $5 million and $20 million, from $9 million to $29 million.

P2P lender LendingClub increases credit access with Select Plus Platform (Verdict), Rated: B

LendingClub, a US-based P2P lending platform, has introduced the Select Plus Platform to offer borrowers access to sophisticated investors.

LendingClub: America Does Not Need Another Credit Card, Apple Card Spells Disaster for Consumers (Crowdfund Insider), Rated: A

Apple Card, a “new kind of credit card” launched by Apple (NASDAQ:AAPL) in partnership with Goldman Sachs (NYSE:GS) is expected to be made available to the public within the next few days. In fact, it has been reported that invitation emails have already gone out to a small group of iPhone owners. More will follow during August.

One detractor is LendingClub.

Anuj Nayar: Americans don’t need another credit card. They need the right tools to help them build their financial futures and pay down debt without the opportunity to accumulate more at high-interest rates. Goldman Sachs tried to pursue building a helpful consumer tool with Marcus but now has slipped back into its old ways, looking to make money by getting consumers hooked on revolving, high-interest debt on Apple’s credit card.

Court activity on July 12: Sofi Lending Corp. vs Jaime Daric (Northern California Record), Rated: AAA

The Superior Court of California for San Francisco County reported the following activity in the suit brought by Sofi Lending Corp. against Jaime Daric and other unnamed defendants on July 12: ‘Declaration Of Non Service (transaction Id # 63543270) Filed By Plaintiff Sofi Lending Corp., As Attorney In Fact For Deutsche Bank National Trust Company, Trustee Of Sofi Consumer Loan Program 2015 Trust’

Rate cuts (PeerIQ), Rated: AAA

This week, we discuss the Fed rate cut to the 2 to 2.5% target range, and provide market color on OnDeck earnings.

Fun fact #1: It has been 3,878 days (10.5+ years) since the FOMC last cut rates.

This is the second longest streak on record behind the 4,115 days that passed between cuts in the discount rate since 1954. Markets are speculating on additional rate cuts before year-end although Fed Chair Powell positioned the rate cut as an “adjustment” rather than a change in trend.

Source: Chicago Fed PeerIQ

DigiFi Launches the World’s First Open-Source Loan Origination System (Markets Insider), Rated: AAA

DigiFi, an enterprise SaaS company building the future of lending technology, announced today the launch of its open-source loan origination system (LOS). The free-to-use platform, which was built over 45,000+ development hours and has been operating in-market with top lenders since late 2018, provides an end-to-end suite of modular capabilities that can be used individually or together to drive digital transformation.

DigiFi’s open source release underscores the lending industry’s dissatisfaction with the closed-loop systems available from existing LOS providers, which force lenders into onerous long-term contracts for inflexible systems.

Bitcoin and Ether Lender BlockFi Raises $ 18.3 Million Series A (CoinDesk), Rated: AAA

Crypto lending startup BlockFi received $18.3 million in a Series A funding round led by Valar Ventures, the company announced Tuesday.

Valar, which was founded in part by PayPal co-founder Peter Thiel, was joined by Winklevoss Capital, Galaxy DigitalConsenSys, Akuna Capital, Susquehanna, CMT Digital, Morgan Creek, Avon Ventures and PJC. Valar’s investment was its first in the cryptocurrency industry following prior investments in other fintech firms like Transferwise, a press release said.

Want to Hire Millennials? Better Help Repay Student Debt (Bloomberg), Rated: AAA

Like millions of her peers, Nicole Read graduated with thousands of dollars of debt. Unlike most of them, she’s getting direct help from her employer to pay it back.

In Read’s case, it’s $100 a month.
Such plans are spreading. They were on offer to staff at about 8% of U.S. employers in 2019, more than double the 2015 level, according to an April survey by the Society for Human Resource Management.

Another study by business adviser Willis Towers Watson found that 32% of firms are considering introducing a similar benefit by 2021.

Source: Bloomberg

Verishop Inc. is excited to announce a partnership with financial technology company Affirm Inc., giving customers more choice at checkout to pay for their purchases over time.

To see if they qualify, customers only need to provide five simple pieces of information2 and a credit decision is made within seconds. Monthly payments are shown in real dollars instead of hard-to-calculate percentages so customers will know exactly what they owe with no hidden or late fees. Customers never pay a dollar more than they agree to at checkout. The pay-over-time option is available for purchases ranging from $50 to $17,500 with a 30-day payment deferral available for smaller amounts.

Klarna offers payment installments to Toms, Asos US customers (Retail Dive), Rated: B

  • Klarna, an alternative payment platform, announced Monday that Asos shoppers in the United States will now be able to use its services, according to a press release. The announcement comes after Klarna also publicized its partnership with Toms on Thursday.

Lendio Surpasses $ 1.5 Billion in Small Business Loans Facilitated (Lendio), Rated: A

Lendio today announced it has facilitated more than $1.5 billion in financing to small businesses across the U.S.

According to the Federal Reserve Banks’ 2019 Small Business Credit Survey, “applications to online lenders continued to trend upward” last year, with 32% of applicants turning to online lenders, up from 24% the previous year.

Lendio’s 15-minute online application gives business owners access to multiple lenders with offers suited to meet their capital and business needs.

Behind the growth of PayPal’s SMB lending business (Tearsheet), Rated: A

In just a few years, PayPal’s business financing solutions has serviced over 225,000 small businesses around the world with funding. Between PayPal Working Capital and PayPal Business Loans, the company has recently surpassed $10 billion of capital it’s leant out to SMBs

Online lender backed by Nas says it was hit by security breach (New York Post), Rated: A

Earnin, which is also backed by tech investor Andreesen Horowitz, discovered in February that a third-party security firm had accessed customers’ bank transactions — including all their debit card purchases and payment statements going back for months, the company confirmed to The Post.

Small Business Loan Approvals at Banks Hit Record Highs (GlobeNewswire), Rated: A

Approval rates for small business loan applications rose to another post-recession record (27.7%) at big banks ($10 billion+ in assets), while also climbing above 50% at small banks in July, according to the Biz2Credit Small Business Lending Index released today.

Small bank approvals of small business loan applications inched up one-tenth of a percent to 50.1% from 50% in June.

Small business loan approval rates among alternative lenders dropped three-tenths of a percent to 56.8% from 57.1% in June.

What business does a crowdfunding fintech have with banks? (American Banker), Rated: A

Krista Morgan, the founder and CEO of the crowdfunding fintech P2Binvestor, always understood that funding small-business loans through investors would be challenging. But when the firm launched in 2014, she quickly recognized it wasn’t lining up the investors or capital that was the difficulty.

“Finding capital through our investor platform has been relatively straightforward,” she said. “Finding businesses and winning the business and being competitive in market and building the technology that supports the lending has been the harder side of the marketplace.”

Fox Corp. Buys 67% Stake In Consumer Loan Marketplace Credible Labs (Stock News Press), Rated: A

Citing reports, as per the terms of the deal, the shareholders of Credible Labs will reportedly receive A$ 2.21 in cash per CHESS depository interest (CDI), representing A$55.25 per share of common stock of the company.

Fox says it will commit up to $USD 75 million ($AUD110.8 million) of growth capital to Credible over the next two years.

Cross River — A Regional Bank Providing Specialized BaaS Services (Tearsheet), Rated: A

  • Who we spoke to: Gilles Gade (Founder and CEO) and Phil Goldfeder (SVP and Communications)
  • Establishment year: 2008
  • Bank license: Yes
  • API documentation

Al Goldstein of Avant and Amount (Lend Academy), Rated: A

We last had Al Goldstein, the CEO and Chairman of Avant and Amount, on the show back in 2015. So much has changed since then not just in the personal loan space but in the banking space as well. And Avant has evolved to meet those challenges.

Mall landlords weigh becoming lenders to blunt retail crash (American Banker), Rated: A

Mall landlords accustomed to offering rent reductions to ailing retailers are mulling a new strategy to forestall the industry’s collapse: positioning themselves as lenders to tenants struggling to stay afloat.

The boutique bank PJ Solomon has organized discussions with several mall owners about pursuing such a strategy with the troubled retailer Forever 21, according to people with knowledge of the matter, in what could serve as a model for future transactions within the sector.

This woman paid off ,000 in credit-card debt with a personal loan, but her first attempt landed her in the red again (MarketWatch), Rated: A

Rogers is far from the only person to have used this debt-consolidation strategy with success. At the end of 2018, nearly 11% of adults in the U.S. held a personal loan, according to data from ExperianEXPN, +1.84%.   The number of personal loans has risen 42% since 2015, making them the fastest-growing category of debt in the country.

Around 61% of personal loans are used for debt consolidation, said Ezra Becker, senior vice president of research and consulting at TransUnion.

An update on credit access and the Bureau’s first No-Action Letter (CFPB), Rated: AAA

For some consumers, the use of unconventional sources of information, or “alternative data,” to evaluate creditworthiness may be a way to increase access to credit or decrease the cost of credit. Alternative data includes information not typically found in core credit files of nationwide consumer reporting agencies and may indicate a likelihood of meeting obligations on time that a traditional credit history may not reflect.

The Bureau remains committed to using all of the tools at its disposal under the Dodd-Frank Act to help address these important issues around access to credit.  Toward that goal, the Bureau is currently reviewing comments to its proposed No-Action Letter, Trial Disclosure, and Product Sandbox policies.

Don’t let AI trigger a fair-lending violation (American Banker), Rated: A

The use of artificial intelligence and machine learning poses both opportunities and risks for financial institutions.

While using such predictive techniques may mitigate consumer lending credit risk, financial institutions should be cognizant of the potential impacts of bias and its implications on fairness.

Peer-to-peer crypto lending startup Dharma pauses new deposits and loans (The Block Crypto), Rated: A

Dharma, the San Francisco-based crypto lending startup behind the open-source protocol of the same name, has announced via Twitter that it is “pausing new deposits and loans” on its platform.

I quit my job at 34 with $ 3 million—here are my 5 biggest regrets about early retirement (CNBC), Rated: AAA

And in 2012, I finally retired at 34. By the time I quit my job, I had amassed a net worth of about $3 million that generated roughly $80,000 in investment income per year.

If I worked a few extra years before retiring, I would have had the financial confidence to buy more real estate in 2012, right before prices began to take off. (A rental property in San Francisco that cost $900,000 in 2012 would be worth roughly $1.6 million today.)

Source: Bay Area Market Reports, Compass

I also could have leveraged my interests in real estate and technology to start a real estate crowdfunding company — or, at the very least, join one. I still believe that real estate is one of the most straightforward ways most Americans can build wealth over the long term.

OppLoans Review: Installment Loans for Borrowers with Bad Credit (Money Check), Rated: A

One such lender that is looking to capitalize on this space is OppLoans. The US-based lender offers loans to those with poor credit, ranging from $500 up to $5,000.

Galaxy Digital Makes Its Next Move in Crypto Lending Markets (Bitcoin Magazine), Rated: B

DrawBridge Lending (DBL), a digital asset loaning, borrowing and investing company, has received an investment from merchant bank Galaxy Digital with the aim to greatly expand DBL’s institutional investment and lending capacity.

Minneapolis-based Digital Finance Startup DeFiner.org Wins 2019 Detroit Fintech Challenge (Yahoo! Finance), Rated: B

Less than two years after being conceptualized, Minneapolis-based digital lending & borrowing platform DeFiner.org has beat out 17 other Fintech startups to win one of the industry’s most coveted prizes.

United Kingdom

Funding Circle adds to August ABS supply with first US deal (GlobalCapital), Rated: AAA

UK-based marketplace lender Funding Circle is set to issue its first US securitization, a $198.45m deal backed by loans made to small and medium-sized enterprises (SMEs).

Funding Circle posts higher revenues but pre-tax losses widen (P2P Finance News), Rated: AAA

FUNDING Circle has increased its revenues but widened its pre-tax losses, according to a half-year report which echoed last month’s results preview.

The FTSE 250-quoted firm posted a 29 per cent jump in revenue to £81.4m but pre-tax losses widened to £30.8m from £27.1m in the first half of 2018.

Adjusted core earnings fell year-on-year to £1.2m from £3.3m.

Tide, Starling Ramp Up Rivalry Over SMB Customers (PYMNTS), Rated: A

The rivalry between U.K. challenger banks Tide and Starling continues to heat up as Tide signs on its 100,000th small business customer.

Reports in The Telegraph on Monday (Aug. 5) said the companies continue to compete for the small business customer base. Tide has on-boarded 100,000 small business customers, described by the firm’s chief executive Oliver Prill as a “very significant milestone.”

Young SMEs and companies that have recently switched banks are prime UK neobank targets (Business Insider), Rated: A

1 in 4 UK robo-advisors shuttered in two years (AltFi), Rated: A

Digital wealth management, or robo advice as it used to be called, has been around for more than a decade and launched into the UK in 2011 with the arrival of Nutmeg. Things started to get really interesting around 2016 and 2017 when a flurry of companies were founded to attack the space dominated by traditional wealth management, an industry looking after £1trn of investors’ assets.

OakNorth strengthening leadership team with appointment of Jackson Hull as CTO and COO (Fintech Finance), Rated: B

OakNorth has today announced the appointment of Jackson Hull as its Chief Technology Officer (CTO) and Chief Operating Officer (COO). With over 15 year’s C-suite experience in London and San Francisco, Jackson is a leading expert in building high-volume eCommerce applications, global SaaS platforms, mobile and IoT platforms, as well as award-winning products and services in finance, fintech, travel, accommodation and retail.

China

Jiayin Closes Cases Against 12,000 Debtors Online (CapitalWatch), Rated: AAA

Jiayin Group Inc. (Nasdaq: JFIN), China’s online lending platform, announced it has solved more than 12,000 cases of overdue payments and attempts to escape debt as of May.

Shanghai-based Jiayin runs a peer-to-peer lending marketplace, known as Niwodai, which connects borrowers and investors. The company has established a tailored legal department for post-loan management to handle online arbitration. As it reported on its website, as of the end of May, it has closed more than 12,000 cases in more than 30 provinces in China.

European Union

Swedish fintech Klarna valued at $ 5.5 billion in funding round (Reuters), Rated: AAA

Online payments firm Klarna, which has attracted a growing following with its “buy now, pay later” service for shoppers, said on Tuesday it had raised $460 million in a funding round that makes it Europe’s most valuable fintech startup.

Investors led by San Francisco-based Dragoneer Investment Group put new money into the Swedish company, giving it a valuation of $5.5 billion and additional financial firepower to expand in the United States.

Video: What’s next for Klarna, the most valuable EU fintech (Yahoo! Finance), Rated: A

Yahoo Finance’s Adam Shapiro, Julie Hyman, Rick Newman, and Scott Gamm join Klarna Co-Founder and CEO Sebastian Siemiatkowski.

Penta, the German business banking startup, raises €8M additional funding (TechCrunch), Rated: A

Penta, the business banking provider for small and medium-sized enterprises (SMEs) that was recently acquired by fintech company builder Finleap, has raised “over” €8 million in new funding.

The startup raised a €7 million Series A round in late 2018, and is thought to have had more than €18 million investment since being founded in 2016.

Two Issues Currently Evolving on P2P Lending Marketplaces (P2P-Banking), Rated: A

This week some investors on the p2p lending marketplaces ViventorGrupeer and Mintos are affected by issues that hinder the normal procedures on these marketplaces.

(Screenshot from Viventor.com)

Update 14:02: Apparently Mintos has now suspended trading of Aforti loans on the secondary market.

EstateGuru, a Marketplace for Short-Term, Property Backed Loans, Launches in Portugal (Crowdfund Insider), Rated: A

EstateGuru, an online marketplace for secured, short term loans, has launched in Portugal, according to a note from the company. EstateGuru is now providing crowdfunding services in six different countries including Estonia, Latvia, Lithuania, Finland, and Spain. EstateGuru said by opening in the Portuguese market the company had achieved its next milestone in its long term strategy.

International

International P2P Lending Volumes July 2019 (P2P-Banking), Rated: AAA

Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 611 million Euro.

Source: P2P-Banking

Ethereum’s Latest Milestone — 200,000 Smart Contracts (Crypto.IQ), Rated: A

DeFi protocols such as Compound, Dharma, and Uniswap are among the most advanced tools of Ethereum-based P2P lending solutions. Another interesting use case built on Ethereum is the decentralized prediction market platform Augur (REP).

Crowdfunding: alternative ways to find a community of impact investors (Specialist Banking), Rated: B

At the same time, there’s been a remarkable increase in the impact investment market — investments made with the intention to generate positive social and environmental impact alongside a financial return — with the Global Impact Investing Network valuing the global market at $502bn.

Australia/New Zealand

CommBank Invests US$ 100 Million In Fintech Klarna As Digital Transactions Continue To Grow (Which-50), Rated: AAA

Commonwealth Bank has invested in Klarna, a Swedish rival to Afterpay, and will bring the European buy now, pay later provider to Australia. The deal accompanies the bank’s continued investment in its digital capabilities.

CommBank invested US$100 million in the fintech’s US$460 million funding round, announced yesterday, which values the company at $5.5 billion. The bank will also become Klarna’s exclusive partner in Australia and New Zealand.

Prospa Establish NZ Warehouse Facility, Shares Rise on ASX (Crowdfund Insider), Rated: AAA

Online lender Prospa Group Limited (ASX: PGL) has established its first warehouse facility specifically to fund New Zealand small business loans. According to a note from Prospa, the 3-year facility has an initial capacity of NZ $45 million.

Judo bank breaks Aussie record with $ 400m round (Fintech Futures), Rated: A

Australian challenger, Judo Bank, has completed the biggest single funding round in the country’s history by raising $400 million, writes Jane Connolly.

StartupSmart reports that the finance – which is double Judo’s original target for the round – came from new institutional investors, including Bain Capital Credit and Tikehau Capital, along with existing investors.

India

India’s Indifi raises $ 21M to expand its online lending platform (TechCrunch), Rated: AAA

Indifi, a Gurgaon-based startup that offers loans to small and medium-sized businesses and also operates an online lending marketplace, has raised 1,450 million Indian rupees ($21 million) in a new financing round to expand its business in the country.

Indifi, which has raised about $34 million in venture capital to date, has also relied on debt to grow and finance loans on its platform. Currently, it’s in about $21 million in debt, Alok Mittal, co-founder and managing director of Indifi, told TechCrunch in an interview.

A typical loan processed by Indifi is of about $7,000 in size. Overall, the startup offers between $1,400 to  $70,000 in capital to businesses.

Asia

65% of Singapore Customers Interested in Digital Banking (Crowdfund Insider), Rated: AAA

According to a recent survey, in Singapore digital banking has some pent up demand. JD Power has published a brief retail banking satisfaction study and, according to their numbers, 65% of consumers are interested in opening digital bank accounts. This is an increase from the year prior where 52% of surveyed individuals expressed similar digital banking interest.

Authors:

George Popescu
Allen Taylor

The post Thursday August 8 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

Tuesday October 9 2018, Daily News Digest

LendingClub

News Comments Today’s main news: China Rapid Finance issues regulatory report, board change. H&M invests in Klarna. Tencent drops $180M into Nubank. KKR, Tencent lead $175M investment into Voyager. Today’s main analysis: Gen Z is more optimistic than millennials about home ownership. Today’s thought-provoking articles: The cities in America with the biggest houses. Inside Ameritrade’s integration with WeChat. Unemployment rate […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Startup Credit Kit; 48-year Low Unemployment Rate (PeerIQ), Rated: AAA

The US economy added 134k jobs in September and the unemployment rate dropped to a low of 3.7%  – a level not seeing since the Beatles broke up in 1970. Wage growth came in strong at 2.8%, and raises the specter of inflation down the road.

Point-of-Sale lending continues to grow, with Square now providing instalment loans of up to $10,000 to shoppers who purchase big-ticket items from Square’s merchants. Borrowers can repay in fixed monthly payments over a period of 3, 6, and 12 months with interest rates ranging from0% to 24%. The move puts Square in direct competition with other POS lending services – Affirm, Klarna, Greensky and more.

In regulatory news, the FDIC has received 21 banking applications this year, over twice the number for last year. The FDIC however has approved only 4 of these applications to date.

PeerIQ’s Learning of the Week

This week we look at the performance of LendingClub’s 36-month loans. Over the life of the loans, borrowers with verified income have 140 bps higher losses. This is due to a “selection effect” – namely, LendingClub applies an extra layer of income verification high credit risk borrowers.

Source: PeerIQ

LendingTree Reveals the Cities with the Biggest Houses in America (LendingTree), Rated: AAA

LendingTree compared home sizes across the country, but first, let’s look at some national data. The Census Bureau reports that the median size of new homes completed in the second quarter was 2,412 square feet. Home sizes have leveled off the past few years from a peak of 2,488 square feet in the third quarter of 2015, though homes sizes are generally larger today than they were for previous generations.  Because only a small proportion of the housing stock is new each year, the median size of all homes is lower given a median house age of 37 years.

Key findings

  • Everything is bigger in Texas. Whoever coined this phrase must have been thinking about real estate. Houston leads the list, with Austin and Dallas also in the top five. Besides having a lot of space, Texas has been adding new residents at a steady pace, with the nation’s largest annual population growth between 2010 and 2016. More new homes means larger homes.
  • South equals size. Other Southern cities dominate the top 10, with Atlanta, known for its sprawl, at No. 2.
  • Money talks. The Washington, D.C., area, whose suburbs includes the three wealthiest counties in the country, comes in third. Boston, another wealthy city, shows up at ninth.
  • Show me? The Midwest lives up to its unpretentious reputation by having the most cities with the smallest houses. Missouri’s Show Me State nickname clearly does not refer to houses, with its two largest cities both in the bottom 10.
  • Older is smaller. Cities with older housing stock have smaller houses, including Detroit at  No. 45 on our list.
Source: LendingTree
Source: LendingTree

More Optimistic Than Millennials, Gen Z Is Here to Revolutionize the Housing Market (Property Shark), Rated: AAA

Key takeaways:

  • Gen Z has its eye on homeownership, with 83% planning on buying a home within the next 5 years
  • College debt is the #1 obstacle towards homeownership for Millennials and Gen Z
  • Gen X chooses intergenerational living to care for relatives more often than any other generation
  • Gen Z is willing to compromise on almost anything to keep costs down – but dreams of lots of space and amenities
  • Gen Z to pose serious competition to Millennials on the real estate market
  • Millennials are more realistic about their means, and the most pessimistic about the prospect of homeownership
Source: PropertyShark

Whatever they may see as the most significant hurdle towards homeownership, more than 80% of respondents from all three generations expect to buy a home in the next 5 years. Part of more established family units and with stabilized careers, Gen Xers are the least likely to buy homes in the near future, while Millennials are the most likely – 87% of Millennial respondents expect to enter homeownership within 5 years.

Considering that the oldest of Gen Z are barely 23, it is noteworthy that a whopping 83% see themselves entering the real estate market within 5 years.

Source: PropertyShark

B+E announces sale of Darien TD Bank property for $ 6.9 million (Patch), Rated: A

B+E (Brokers+Engineers), the first brokerage firm and trading platform for net lease (NNN) real estate, today announced the sale of property that is leased long-term to TD Bank in Darien, Connecticut.

Located at 55 Boston Post Road, the +/- 4,380SF location was sold for $6,900,000 at a 5.1% cap rate. The property has +/- 7 years remaining on the lease and was sold to a 1031 exchanger. B+E represented the seller, Chimblo Family Real Estate, LLC.

Real Estate Startup Landis Raises $ 2M in Funding (Finsmes), Rated: A

Landis, a NYC-based marketplace for institutional real estate investing, raised $2M in funding.

The round was led by Signia Venture Partners with participation from Red Swan Ventures, Graph Ventures, and Kima Ventures, as well as the founders of RealtyShares (Nav Athwal), Compass, Floored, Tango, Rypple, and Stanford professor and JetBlue Chairman Joel Peterson.

Fintech firm Curve looking to raise $ 50 million to become the ‘Amazon of banking’ (CNBC), Rated: A

Fintech firm Curve is aiming to raise $50 million in funding, its CEO told CNBC in an exclusive interview, as it looks to get some cash to boost its aim to become the “Amazon of banking.”

Smartphone brand can reflect creditworthiness: FDIC study (American Banker), Rated: A

A new study released Thursday bolsters the case for lenders to use borrowers’ digital footprints in assessing their creditworthiness.

The paper, released by the Federal Deposit Insurance Corp.’s Center for Financial Research, said the data trails people leave online — even down to what brand of smartphone they use — are useful at predicting default rates.

Fed studies rural branch closings (American Banker), Rated: A

For a regulator grappling with what is the right balance in big-bank supervision, the Federal Reserve is also trying to drill down on industry trends at the most micro levels.

The Fed’s top regulatory official, Vice Chairman of Supervision Randal Quarles, gave wide-ranging remarks Thursday on the central bank’s efforts to gather and understand data about the community banking sector.

AFR Promotes Brandao to President and Packer to COO (Business Insider), Rated: B

American Financial Resources, Inc. (AFR) is pleased to announce two key executive promotions. Laura Brandao has been promoted to President and Bill Packer is now Chief Operating Officer of the NJ-based leading niche lender.

United Kingdom

Are there too many property investment platforms? (Development Finance Today), Rated: A

A recent poll conducted by Development Finance Today revealed that 65% of industry professionals believed that there were too many property investment platforms in the market.
Source: Development Finance Today

I’m Stephen Moss, the founder and managing director of Sourced (Property Investor Today), Rated: A

Established to match UK and overseas investors with hand-selected investment opportunities, we offer UK-wide investment advice and property sourcing through our 34-strong network of franchises.  This guarantees the same level of local knowledge and off-market opportunities, anywhere in the country.

Since we started in October 2017 our network has grown from one to 34 offices, we have launched a new peer-to-peer (P2P) lending platform and we’re building on our current position as the country’s largest property investment platform and network of property sourcers.  We’re also the first company to provide a free online training platform that gives investors of all levels of experience, the skills, knowledge and support they need to grow their portfolios.

Multiply: the new app that wants to put a financial adviser in everyone’s pocket (Evening Standard), Rated: B

Multiply is the latest fintech app launching on the Apple App Store, which wants to be your own personalised financial adviser so you can understand your money and the best things to do with it.

How Manchester entrepreneurs should begin investing (About Manchester), Rated: B

  • Peer to peer lending – you may have heard of popular companies in this investment sector such as Funding Circle. With peer to peer lending, you lend money to business start-ups to help them become established. When they are profitable you get your money back with any agreed interest.
China

China Rapid Finance Announces Regulatory Report & Board Change (Crowdfund Insider), Rated: AAA

China Rapid Finance Limited (NYSE: XRF) announced last week that it submitted its P2P Compliance Self-Inspection Report to its local P2P regulatory office. According to the online lender, this new report is considered the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.

China Rapid Finance then explained it is focused on the next two process steps:

  • A self-disciplinary inspection conducted by NIFA and regional regulatory authorities
  • verification of inspection results by the regional P2P Rectification Office to conduct on field inspections

China Looks to Foreign Investors and Pensioners as Distressed-Debt Saviors (The Epoch Times), Rated: A

According to data from Bloomberg, China’s total balance of non-performing loans (NPLs) reached 1.96 trillion yuan ($285 billion) at the end of June 2018. To help lower this figure, China has been pawning off toxic loans onto foreign investors and unsuspecting pensioners.

Oaktree Capital Management in September acquired 115 NPLs for 2.4 billion yuan ($350 million) from one of China’s “bad banks” China Huarong Asset Management Co., according to Bloomberg.

The digital divide: inclusion must not create exclusion (The Finanser), Rated: A

There’s a legitimate concern that the change that’s happened in Chinese society since 2014 with regard to rapid conversion from cash and cards to mobile payments has been too fast for some. What happens to those left behind in the digital economy?

European Union

H&M buys $ 20 million stake in Swedish fintech firm Klarna (Reuters), Rated: AAA

Fashion chain H&M (HMb.ST) is acquiring a small stake in Klarna in what will be the Swedish online payments services firm’s largest partnership so far.

H&M is paying around $20 million for a stake of less than 1 percent, a Klarna spokeswoman said, confirming a Financial Times report on Monday.

Mintos partners with Trustly to offer real-time transfers (P2P Finance News), Rated: A

MINTOS, Europe’s largest peer-to-peer marketplace, has partnered with payments company Trustly to offer its customers the option to transfer funds in real-time from bank accounts across Europe.

Mintos said the collaboration with Swedish e-payments company Trustly will allow investors using its platform to transfer money in real-time from bank accounts across 29 European countries. This strips out the usual waiting time that is associated with conventional clearing systems.

Money laundering and backlogs dent ING’s image as tech leader (American Banker), Rated: A

Since taking charge of ING Group in 2013, Chief Executive Officer Ralph Hamers has labored to make it the most digitally advanced lender in Europe. His motto: disrupt yourself before a competitor does it first.

It’s safe to say the tumult at ING during the last few weeks isn’t what Hamers had in mind.

Equity Crowdfunding Platform Anaxago Launches Asset Management Firm Anaxago Capital (Crowdfund Insider), Rated: B

Anaxago is launching an asset management firm, Anaxago Capital, to attract more institutional investors and ready itself to fund larger projects. With this, Anaxago expects to double its outstanding investments by 2020.

International

China’s Tencent invests $ 180 million in Brazil fintech Nubank (Reuters), Rated: AAA

Chinese gaming and social media firm Tencent Holdings Ltd (0700.HK) paid $180 million for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.

Inside TD Ameritrade’s integration with WeChat (Tearsheet), Rated: AAA

TD Ameritrade continues to explore how to connect with its clients over different platforms.

The company, which has already launched experiences on Messenger, Twitter DM, Amazon Alexa devices and Apple Business Chat, has launched a chatbot for WeChat.

TD Ameritrade’s chatbot allows retail investors in Hong Kong to do their research, access market information, and get support through one of the most popular social and messaging platforms in Asia.

Celsius, Pays Interest To Crypto Depositors (CoinTrust), Rated: A

Celsius, a recently established cryptocurrency lending firm, has announced that it offers interest to thousands of users who deposit Bitcoin and Ether with its wallet application. Celsius claims to have won over 10,000 users since its mobile app was launched on June 29, with an average deposit of 0.5 BTC or 5.50 Ether earning as much as 6.7% per annum. Celsius generates the interest income by lending the crypto to hedge funds which open short position in the crypto market.

APAC

KKR and Tencent lead $ 175m investment in Philippines’ Voyager Innovations (Banking Tech), Rated: AAA

Telco PLDT, investment firm KKR and Tencent are part of a $175 million investment in Philippine digital tech company Voyager Innovations.

MENA

UAE-based startup Smart Crowd just got funded by Shorooq Investments (Startup MGZN), Rated: AAA

Smart Crowd, a new real estate crowd investing platform is just closed a Seed Funding round with $600,000 from Shorooq Investments, followed by Abaxx Technologies500 Startups, and other high-level strategic individual investors.

Authors:

George Popescu
Allen Taylor

Wednesday August 15 2018, Daily News Digest

financial assistance

News Comments Today’s main news: Square expands Bitcoin service to all 50 states. Funding Circle says higher rates will help them. Zopa says UK investors likely to hate Marmite. Preview of China Rapid Finance Q2 earnings. Funding Societies hits SGD200M in SME crowdfunding. Today’s main analysis: How non-prime families cover college tuition. Today’s thought-provoking articles: How Goldman Sachs created […]

financial assistance

News Comments

United States

United Kingdom

China

Other

News Summary

United States

Square Expands Cash App Bitcoin Service to All 50 US States (CoinDesk) Rated: AAA

The company – which was co-founded by Twitter chief executive Jack Dorsey – announced the service expansion through a Tweet on Monday, months after the firm initially rolled out the bitcoin service to investors in the country.

As reported by CoinDesk, Square officially launched the bitcoin purchasing option on its Cash App in January following a testing phase started last year. However, the service was not offered in the states of New York, Georgia, Hawaii and Wyoming due to their more restrictive regulations regarding bitcoin transactions.

How Non-prime families cover college tuition (Center for the New Middle Class) Rated: AAA

Students from non-prime households are more likely to attend public, community, or junior colleges compared to students from prime households.

  • Consequently, they are more likely to live at home.
  • The majority of these students come from single-parent or homes with a stepparent.
  • Compared to prime parents, non-prime parents are significantly more likely to say that financial aid affected their choice of schools.
  • Non-prime parents are slightly more sensitive to schools welcoming students from diverse economic backgrounds.
  • Students from non-prime families are extremely reliant on financial aid as nine out of ten will use some form of financial assistance to cover college expenses in the Fall 2018, compared to three-quarters of prime students.
  • Access to financial aid is critical for these students because most of them come from single-income households with fluctuating incomes where their parent’s financial situation is precarious and burdened with high levels of debt.

Almost twice as many nonprime students, 42%, attend public/community/jr colleges compared to prime students, 23%.

Source: The Center for the New Middle Class
Source: The Center for the New Middle Class
Source: The Center for the New Middle Class

Read the full report here.

How Goldman Sachs Created Marcus To Be a Dominant Force in Consumer Banking (Lend Academy) Rated: AAA

First, there was the launch of GS Bank in April 2016. Six months later Goldman Sachs introducedthe world to their Marcus brand. They began as an online lending platform offering unsecured consumer loans up to $30,000 with interest rates ranging from 5.99% to 22.99% (they now offer loans up to $40,000 and rates range from 6.99% to 24.99% as of August 2018). Their big differentiator was offering no fees. There was no origination fee for the borrower, no prepayment fees and no late fees.

They gained traction very quickly. They crossed $1 billion in total originations within eight month of launch. At the end of their first year they were at $1.7 billion. At that time they brought their deposit business under the Marcus brand, it was formerly branded under GS Bank. Now when you go to the Marcus website you are presented with two options: personal loans and savings accounts (which includes certificates of deposits).

We learned in Goldman Sachs Q2 earnings call in July that Marcus had originated more than $4 billon in total loans since launch and they had 1.5 million customers. Their deposit base is now $23 billion.

Lenmo, the Venmo for Lenders, Set to Launch for IOS (Bank Innovation) Rated: A

Whether it’s a consumer lender like Goldman Sachs’s Marcus or a point-of-sale lender like Affirm or even SMB lenders like BlueVine, there is a lot of perceived opportunity in the lending market.  Add a P2P dimension to that, and you have Lenmo.

The new app is launching in the next few weeks in Apple’s app store, Bank Innovation has learned. Lenmo, founded less than a year ago, is a peer-to-peer app in which the lender can select a borrower as well as set their own interest rate, “which will be higher than most alternative options,” Margaret Cipparone, a Lenmo spokesperson, told Bank Innovation. These individual lenders will facilitate small, unsecured loans ranging from as low as $50 to as high as $5,000, she said.

For borrowers, they can choose the various lenders available on the app and select the one they find most suitable. The goal behind this type of P2P lending service is to cater to the vast underserved market.

Transforming The Small-Business Lending Customer Experience: Kabbage CEO Rob Frohwein (Forbes) Rated: A

In the intervening years since Frohwein and his friends, Marc Gorlin and Kathryn Petralia, started Kabbage “with an idea and a misspelling of cabbage” (a slang term for money), it’s gone on to fund more than 150,000 small businesses, representing a wide variety of industries, with over $5 billion of working capital. And in that time, the goal has evolved, says Frohwein, to “never allowing you to go below zero.” What he means by this is “to keep entrepreneurs away from that pit-of-the-stomach feeling, which I know as a former small business owner myself: Deciding whether to pay vendors first, or make payroll, or invest in marketing, and knowing you need to do all three but it’s going to kill you because your cash flow just isn’t working out. It’s here that Kabbage can step up and help.”

Micah Solomon, Forbes:  I’m interested in how you went about pushing back against the traditional customer experience norms in lending.

Rob Frohwein, Co-Founder and CEO, Kabbage, Inc.: Everyone knows that banks have been underserving small business customers, but our transformational moment came from asking “why?”. It turns out that a large part of the reason is the costly, manual processes that make underwriting small business loans time-intensive and unprofitable. Kabbage’s technology quickly analyzes the live business data of a small business and fully automates the underwriting process, so businesses get an answer and access to capital in minutes, not weeks or months.

And for Kabbage? What’s next for you.  

Another internal saying here is “Let the bakers bake.” A baker didn’t start their business to deal with back-office financing all day long. They want to serve their customers and perfect their craft. We’re in the business of giving small businesses back more time in their day and to remove unneeded friction.

Startup’s mission: Help cash-strapped students finish college (American Banker) Rated: A

Harvard MBAs who want to refinance their student debt have numerous options, including the online lenders SoFi and CommonBond. Ivy Leaguers who need a loan to get through college also have choices, including Discover and Wells Fargo.

But low- or moderate-income students who do not have relatives with sound credit who can co-sign have few options for obtaining the financial help they need to complete college. Many of them are women, who hold nearly two-thirds of outstanding student debt in the U.S. — almost $900 billion as of mid-2018.

Fintech Crowd Dives Into Subprime Credit-Card Lending (The Wall Street Journal) Rated: A

Facing rising loan losses, especially among the riskiest borrowers, banks are reining in their growth in this sector. Subprime credit-card balances at seven large U.S. banks rose 3% in the first half of the year from a year prior, down from a 13% increase in the year-earlier period, according to Autonomous Research. Capital One Financial Corp.’ssubprime balances accounted for 32% of its domestic credit-card balances in the first half of 2018 compared with 36% in the same period a year earlier

Capital One has around $32 billion in subprime credit-card balances on its books.

The new entrants say their use of machine learning and artificial intelligence for underwriting helps them manage the risk. They also mostly extend small credit lines, often ranging between $500 and $2,000, limiting the scale of potential losses.

Around 60 million U.S. adults have credit scores lower than 650, according to Fair IsaacCorp. , roughly the threshold where banks focused on prime borrowers stop lending. Some 53 million U.S. adults don’t have credit scores at all because they have little or no borrowing history.

Q2 Holdings To Acquire Cloud Lending For Lending And Leasing Platform (Seeking Alpha) Rated: B

Q2 Holdings (QTWO) has announced it has agreed to acquire Cloud Lending for $105 million plus contingent earn-outs.

Cloud Lending has developed cloud-based software for the financial lending and leasing industry.

QTWO is acquiring Cloud Lending for its next generation web-based system and complementary capabilities and geographic customer base.

The San Mateo, California-based Cloud Lending was founded in 2012 to develop and operate a cloud-based peer to peer lending and leasing platform.

Roostify Announces Roostify Adapt Functionality to Extend Branding and Customization Options for Enterprise Lenders (Business Wire) Rated: B

Roostify today announced the release of Roostify Adapt. An easily configurable feature for lenders with complex workflows, Roostify Adapt allows for real-world process management while maintaining the power of primary and secondary (“parent/child”) accounts within the Roostify digital lending environment.

United Kingdom

Higher rates will help us, says Funding Circle after divi cut (Citywire) Rated: AAA

Peer-to-peer lending lending investment trust Funding Circle(FCIF) is expecting rising interest rates to help boost its yield after hedging costs forced a dividend cut.

After launching in 2015, the peer-to-peer fund had offered a 6.5p annual payout but in June it was forced to cut its target dividend range to between 5p and 6p for the next 12 months.

That equates to a forward yield of between 4.9% and 5.8% based on the current 102.8p share price.

ZOPA: UK investors more likely to hate Marmite (Peer2Peer Finance) Rated: AAA

INVESTORS in the UK are more likely to hate Marmite than average, according to new research.

A survey commissioned by peer-to-peer consumer lender Zopa showed that 50 per cent of UK investors dislike Marmite, compared to the national average of 33 per cent.

The research, which polled 2,000 people with an investment of at least £2,000, found a number of other quirky traits.

This included a preference for blue cars, which are owned by 20 per cent of investors, and a love of listening to Radio 2.

Here Are The U.K. Companies That Will Be Unicorns In 2019 (Forbes) Rated: AAA

There are 

Wonga investors raise £10 million to save company (Isreal National News) Rated: A

Payday loan giant Wonga.com has received a £10 million cash injection from its investors to avoid going into administration. The controversial company was once hailed as the fastest growing company in Europe and had plans for a £1 billion flotation. However, the firm has faced difficulties after a surge in compensation claims and a regulatory clamp-down on the high-cost loans industry.

The company had a variety of backers including Israeli investors – but emergency fundraising in the last few weeks caused their original investors of Accel Partners and Balderton Capital to offer a bailout solution.

P2P Lender Welendus Returns to Seedrs to Raise £850,000 (Crowdfund Insider) Rated: A

Short-term peer-to-peer lending platform Welendus has returned to equity crowdfunding platform Seedrs to raise £850,000 in funding. The lender’s latest initiative comes less than one year after it secured £208,898 through the funding portal.  

Welendus also reported that for investors its enables them to invest in short-term loans, offering higher returns with the short-term investment flexibility and the benefit of a Provision Fund.

Exploring the effect of the FCA crackdown on P2P and crowdfunding (AltFi News) Rated: A

The growth of P2P lending and its positive effect on the UK economy cannot be disputed. Initially starting out as a curiosity during the depths of the financial crisis in 2008, P2P lending has grown from £300 million in funds being lent in 2011 to a huge £4.6 billion in 2016.

China

Preview: China Rapid Finance Q2 Earnings (Benzinga) Rated: AAA

On Wednesday, China Rapid Finance XRF 4.86% will release its latest earnings report. Decipher the announcement with Benzinga’s help.

Earnings and Revenue

Wall Street analysts see China Rapid Finance reporting a loss of 13 cents per share on revenue of $30.88 million.

China Rapid Finance EPS in the same period a year ago came in at a loss of 29 cents. Revenue was $15.16 million. Revenue would be up 103.67 percent on a year-over-year basis.

Victims of P2P Lending Crisis in China Speak Out About Misfortunes (The Epoch Times) Rated: AAA

Yindou had a loan balance of 4.4 billion yuan (about $640 million) as of the end of June, according to Yicai, a major Chinese business newspaper. After Yindo suspended its operations in July, the company’s investors were left without the ability to withdraw their investments.

Since the platform closed, Yindou investors have turned to the bank in hopes of collecting their investments back.

Recently, victims of another financial product apparently gone wrong have taken to the streets. This year, a total of 170 private funds, 70 percent of which are private-equity or venture-capital funds, have failed or closed without explanation. This has led to many protests, most notably in Beijing on Aug. 7, where local police turned away protestors before they could make their case to China’s bank regulator, the Banking Regulatory Commission (CBRC).

Meanwhile, China’s M2 money supply, or the total savings of companies and residents, increased more than a hundredfold from 1990 to 2017, according to He, at a rate faster than the growth of GDP. While a steady money supply, or credit, can fuel an economy’s growth, such excessive credit, in relation to the GDP, can fuel bubbles and cause inflation.

Regulatory Reorganization Crucial to Health of Financial System (Caixin Global) Rated: A

The merging of the China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission into the China Banking and Insurance Regulatory Commission (CBIRC) naturally has attracted a lot of attention outside of China as it involves major changes across two important areas of finance.

Yet perhaps the most important thing is how this will change the relationship between regulators and the central bank, the People’s Bank of China.

Fifteen years ago, responsibility for supervising and regulating banking institutions was taken from the central bank and given to the then-newly formed CBRC. This development had far-reaching consequences, and led to the rebuilding of the previously inefficient financial regulatory model into a comprehensive and professional banking system that is in line with international standards. State-owned banks were also commercialized around this time.

Protests Mark China’s Ruptured P2P Lending Landscape (PYMNTS) Rated: A

China’s peer-to-peer (P2P) lending crisis has caused widespread anger from citizens who are demanding that the government bail out hundreds of collapsed P2P companies. Last week, it was reported that China ordered a lockdown of Beijing’s financial district to prevent individuals from protesting a crisis in the P2P lending marketplace.

The size of China’s P2P industry is bigger than in the rest of the world combined, with outstanding loans of 1.49 trillion yuan ($217.96 billion USD). The industry was nearly unregulated and at its peak in 2015, when there were about 3,500 P2P businesses in the country. However, a combination of regulatory failures, fraud and the declining debt is being blamed for the shuttering of 243 online lending platforms since June.

China’s multi-front economic war dulls direction (Asia Times) Rated: A

Chinese stocks were at the bottom of the Emerging Asia pack into August, down 20% in local-index terms, as the so-called “trade war” with Washington added another 25% mutual tariff blow on tens of billions of dollars’ worth of goods.

The International Monetary Fund urged a negotiated settlement as it predicted only “limited direct impact” on the Chinese economy, shaving growth by half a percentage point under a medium-case scenario, while holding to this year’s 6.6% forecast. However, the IMF also warned that credit expansion was unsustainable and that tighter global financing conditions posed “downside risk,” as the renminbi continued its 10% slide since April.

However, the US-China exchange-rate and trade regimes now closely overlap as an overhang on “A” share consideration, despite China’s 30% slice on the benchmark MSCI Index, with a clean resolution of cross-cutting issues unlikely to offer recovery prospects in the coming months.

European Union

Lower Interest Rates on Mintos – How do Investors React? (P2P Banking) Rated: AAA

Compared to the beginning of July the interest rates for newly issued EUR loans on Mintos are much lower now. While investor enjoyed interest rates of up to 13-14% for loans issued in the first half of the year, typical rates are 8-11% now, with a 12-13% for more exotic loans mixed in.

To find out how investors reacted to the situation P2P-Kredite.com conducted a survey among German speaking Mintos investors. Here are the preliminary results (48 respondents):

  • 35% say they withdraw univested cash and invest it on other p2p lending platforms
  • 21% say they continue to invest on Mintos primary market
  • 17% say they just wait, the interest rates will rise again
  • 15% say they withdraw unimvested cash and invest it in other asset classes (e.g stock)
  • 12% say they buy on the Mintos secondary market now, instead of using the primary market
International

Banks and Retailers Are Tracking How You Type, Swipe and Tap (The New York Times) Rated: AAA

The way you press, scroll and type on a phone screen or keyboard can be as unique as your fingerprints or facial features. To fight fraud, a growing number of banks and merchants are tracking visitors’ physical movements as they use websites and apps.

Some use the technology only to weed out automated attacks and suspicious transactions, but others are going significantly further, amassing tens of millions of profiles that can identify customers by how they touch, hold and tap their devices.

The data collection is invisible to those being watched. Using sensors in your phone or code on websites, companies can gather thousands of data points, known as “behavioral biometrics,” to help prove whether a digital user is actually the person she claims to be.

When clients log in to their Royal Bank of Scotland accounts, software begins recording more than 2,000 different interactive gestures. On phones, it measures the angle at which people hold their devices, the fingers they use to swipe and tap, the pressure they apply and how quickly they scroll. On a computer, the software records the rhythm of their keystrokes and the way they wiggle their mouse.

Asia

Funding Societies Hits SGD200 Million in SME Crowdfunding (Funding Societies) Rated: AAA

Funding Societies surpassed the SGD 200 million mark in total crowdfunded SME loans. This achievement came just 6 months after crossing SGD 100 million in January this year. In the same period, its investor base has also increased from about 40,000 to 75,000, indicating strong demand from investors to support local SMEs while diversifying their investment portfolio.

Chinese P2P Lender Hexindai Announces Equity Stake Acquisition in Indonesian Online Lending Platform Musketeer (Crowdfund Insider) Rated: A

Chinese peer-to-peer lending platform Hexindai (NASDAQ:HX) announced on Tuesday it has entered into definitive agreements to acquire a 20% equity stake in Musketeer Group Inc., an Indonesian online lending platform that offers consumption installment loans, for approximately $1.6 million, and simultaneously completed the acquisition. 

MENA

The Impact Of The Middle East’s Fintech Boom On Economic Inequality In The Region (Entrepreneur) Rated: AAA

The past decade has shown that fintech can be a powerful force for equality. Blockchain, data analytics, and mobile phone technology are evolving at breakneck speed and have shown potential to bridge the gap between the rich and the poor. Safaricom’s mobile-money platform, M-Pesa, reaches an estimated 96% of households in Kenya, and is credited with lifting at least 200,000 Kenyan households out of poverty. The Indian mobile wallet, PayTM, has nearly 200 million users, including women and rural families that can now participate in the digital economy. Will the Middle East produce companies of the same caliber and social impact? There is certainly an opportunity, thanks to three factors.

The first factor is necessity. The Middle East is in dire need of ideas to bridge the massive gulf between the rich and the poor. The region leads the world in economic inequality, where the top 10% of the population enjoy about 60-66% of the region’s income. 86% of the adult population is underbanked, which means they don’t have access to services at formal financial institutions. This provides a tremendous market opportunity.

Square And MetLife Watch Out: Two Fintech Startups Target T Markets (Forbes) Rated: A

Lending Express, a Tel Aviv-based platform founded in 2016 that connects small businesses with lenders, is hoping to expand the market for small business loans. As CEO Eden Amirav explained in an August 13 interview, Lending Express — which has raised $2.7 million in seed capital — has grown from under 10 people in October 2016 to 25 — mostly in Tel Aviv with a business development office in San Francisco.

Lending Express did not disclose its revenues but it seems to be growing. As Amirav said, “We currently work with more than 30 leading lenders and FinTech partners, and have facilitated $65 million in SMB loans funded through our platform. Since we began operations in the US in the last quarter of 2017, and thereafter almost every quarter, we have doubled the number of loans we facilitated the previous quarter and 46% of all loans we’ve helped close happened in the second quarter of 2018.”

Lending Express sees tremendous potential for SMB lending outside of traditional banks. Amirav estimates that a mere 1% of the $1 trillion in total SMB loans — or $10 billion — is offered by alternative lenders like Lending Club and On Deck.

Authors:

George Popescu
Allen Taylor

Tuesday May 15 2018, Daily News Digest

McKinsey Asia Personal Financial Services Survey Customers and Digital only Banks

News Comments Today’s main news: Prosper loan originations up 27% year-over-year, over $2B co-sponsored securitizations closed. Funding Circle launches new borrower referral incentive. Renren investors seek to block asset sales. PayMate acquires Z2P Technologies. Today’s main analysis: Singapore’s biggest bank vs. China’s tech giants. Today’s thought-provoking articles: 80% of startup money goes to three states. The Sharestates story: $1B […]

McKinsey Asia Personal Financial Services Survey Customers and Digital only Banks

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Prosper Loan Originations up 27% Year-over-Year; Over $ 2 Billion of Co-Sponsored Securitizations Closed (Business Wire) Rated: AAA

Prosper today reported financial results for the first quarter of 2018. Loan originations increased 27% year-over-year to $744 million, driven by strong demand for the company’s personal loan product and stable funding.

Financial highlights include:

  • Total Net Revenue, which includes the non-cash impact related to warrants to purchase preferred stock, was flat year-over-year at $30.5 million in Q1 2018 compared to $30.8 million in Q1 2017.
  • Core Revenue(1), which excludes the non-cash impact related to warrants to purchase preferred stock, increased $11.6 million or 34% year-over-year to $45.7 million in Q1 2018 compared to $34.2 million in Q1 2017.
  • Net Loss decreased by $12.6 million to ($11.4) million in Q1 2018 compared to a Net Loss of ($24.0) million in Q1 2017.
  • Adjusted EBITDA(1) increased $13.6 million to $4.5 million in Q1 2018 compared to ($9.0) million in Q1 2017, the fourth consecutive quarter of positive Adjusted EBITDA(1) generated by Prosper.
Key Operating and Financial Metrics (Unaudited)
(in thousands)
Three Months Ended March 31,
2018 2017
Loan Originations $ 744,127 $ 585,590
Transaction Fees, Net 31,354 26,869
Servicing Fees, Net 7,184 6,154
Total Net Revenue 30,450 30,845
Core Revenue (1) 45,729 34,152
Net Loss (11,401 ) (24,021 )
Adjusted EBITDA(1) 4,520 (9,039 )

80% of start-up money goes to three states — here’s what one visionary is doing to help spread the wealth (Business Insider) Rated: AAA

Baird: And the microfinance industry is — $30 billion a year around the world is lent in $500 chunks to small businesses, near a 100% repayment rate.

Microfinance is a tool. All investing is a tool. Every microfinance bank, every bank is neither good nor bad, they’re amoral. It’s just what are people trying to do with it. I’ve seen microfinance banks that act in extractive ways and their primary goal is extract as much profit out of poor communities as possible. I’ve seen payday lenders do the same thing. I’ve also seen microfinance banks that are very good and say, “Our core goal is building wealth for the community and we’ve structured our business in a way that works for us.”

One percent of start-up investment goes to African-Americans. Two percent of start-up investment goes to women. There are a lot of people who are overlooked.  So roughly 80% of start-up investment goes to three states: New York, Massachusetts, California. If you’re in Ohio or Florida or Nairobi or Mumbai, it’s really hard to get your idea into the system.

The Story of Sharestates: From Startup to $ 1 Billion in 3 Years (Lend Academy) Rated: AAA

Now, just over a year later, they have announced they recently crossed the $1 billion mark in originations. The company did so in just over 3 years, having officially launched in February 2015, just before LendIt USA that year. They are the second company in the real estate crowdfunding space to do so and are on our list as one of the ten options available for accredited investors in the marketplace lending space.

Originations in the lending space is only one metric. Any lending company’s survival depends on the quality of the loans they are making. According to the Sharestates’ website, investors have earned an average 10.54 percent annualized return. They also report 0% loss of principal for their investors. As of last year when we checked in the company was profitable which sets them up for continued success going forward. We’ve seen very few companies in the marketplace lending space broadly achieve this goal.

BuildDirect Partners With Affirm (Globe Newswire) Rated: A

BuildDirect, the first technology platform for the home improvement industry, today announced its partnership with Affirm Inc., a financial technology company that provides transparent payment alternatives to traditional credit. Now, U.S.-based BuildDirect customers have easy access to flexible and transparent financing options to pay for home improvement and renovation materials over time. At the point of sale, shoppers will see exactly how much they’ll pay in fixed monthly installments over the term they choose.

Banks struggle to combat the cyber crime bad guys (Financial Times) Rated: A

Digital banking has been a big positive for the financial services industry, though it has opened companies to greater cyber risk; cyber criminals now have a lot more entry points when it comes to getting access to funds illicitly; banks have increased their spending on defense but it isn’t enough as they also need to construct better, more secure systems; the CEO of Standard Chartered writes in the FT that banks can better utilize the data they collect, design tech better and work more closely with governments to catch bad actors.

Blockchains Could Be the Answer to Fairer Lending Systems (Nasdaq) Rated: A

The advancement of blockchain technology, this is poised to change. Through the technology, anyone anywhere in the world can raise financing from peers without having to rely on the traditional credit scores and the often heavily bureaucratic conventional mortgage processes.

Blockchain solutions such as Homelend  are making it possible for borrowers to directly reach lenders without depending on any intermediary and with no paperwork. The whole process is safeguarded by smart contracts to ensure that all parties in the deal adhere to their part of the bargain. According to Aneeza Haleem , a senior account manager at Cognizant Technology Solutions, blockchain-powered peer-to-peer mortgage financing significantly reduces the costs involved in the mortgage process.

Will Wells Fargo hurt Zelle by improving on it? (Payments Source) Rated: A

The irony of the explosive growth of mobile P2P is this: As consumers get more comfortable with paying one another through mobile devices, they’re thinking of P2P less as a service that one should find within a bank’s app.

This is a problem for Early Warning’s Zelle, the bank-run P2P network whose main selling point is its integration with banks. It’s a sharp contrast to rivals such as Venmo, which styled itself on a social media app; and Facebook and Apple, which took their own messaging platforms and blended P2P payments into the interface.

Capital One buys digital identity start-up Confyrm (Fintech Futures) Rated: A

Capital One has acquired San Francisco-based digital identity start-up Confyrm as it seeks to capture the market for consumer identity services.

Financial details were not disclosed, but as part of the deal Andrew Nash, founder and CEO of Confyrm, has become managing vice-president of Capital One’s consumer identity services. No word on what happens to the rest of the staff.

Confyrm was founded five years ago and offers help against online fraud.

Where Bank of America uses AI, and where its worries lie (American Banker) Rated: A

Bank of America spends $3 billion developing and buying technology every year, and about three times that on keeping its existing IT infrastructure going, says David Reilly, global banking and markets technology chief information officer.

As you might expect, some of that goes to artificial intelligence technology. The bank does not disclose how much.

An old-school fraud analytics program might see a customer using a card in a place they have never used a card before and block the transaction.

AI can do better.

The one area where banks and fintechs want more regulation (American Banker) Rated: A

Banks, fintech firms and data aggregators are asking regulators to provide more clarity on how to handle consumer data and who is responsible for leaks when it is shared between firms — a request that’s seemingly a reversal from the deregulatory approach the industry often takes.

The potential liability stemming from consumer data has become a critical concern for the financial industry as more data aggregators and fintech firms rapidly enter the space, seeking access to customers’ bank account information in order to offer loans and other products.

Could US Post Offices Become Banks? Here’s How The Plan Would Work (10 News) Rated: A

Now, there are a couple different ways Congress could build banking into the U.S. Postal Service. The first approach would just cover the basics.

That means offering low-dollar checking accounts and debit cards to low-income earners. That would at least offer basic financial services to all Americans, regardless of wealth. And it probably wouldn’t be too tough politically because the big banks typically aren’t interested in these customers.

But Gillibrand’s proposal would go further, allowing the postal service to also make loans of up to $1,000 with a super low interest rate around 2 percent, even to the poorest Americans. Because many of those loans would be at risk of not being paid back, some experts say the interest rate will have to be higher, maybe 25 percent. But that would still be a lot lower than rates from payday lenders, which often have people pay back three or four times what they borrowed.

Citizens Financial To Launch Online Consumer Bank (PYMNTS) Rated: A

Citizens Financial Group announced on Monday (May 14) plans to launch Citizens Access, a nationwide direct-to-consumer online bank.

In a press release, Citizens Financial said the digital platform will offer FDIC-insured deposits products aimed at serving people who want to save and want the flexibility of an online banking service. The company said it will provide digital deposit services at attractive rates and lower costs to help consumers save more for the future. The platform will be launched in the third quarter and will be available throughout the U.S.

 

Now Is the Time to Refinance Student Loans (Pharmacy Times) Rated: B

Refinancing your student loans from pharmacy school can potentially save you a significant amount of money while providing the convenience of making one payment a month. Keep in mind refinancing may not be for everyone. Individuals with a poor credit history, low salary from a pharmacy residency or fellowship, or those who want to keep the provisions in federal loans may want to closely consider their options before jumping right into refinancing their loans.

United Kingdom

Funding Circle launches new borrower referral incentive (Peer2Peer Finance) Rated: AAA

FUNDING Circle is offering £1,500 in Amazon vouchers to anyone who refers a business that takes out a loan of £25,000 or more with the peer-to-peer lending platform.

The UK’s third-largest lender to small businesses said the borrowers may need the cash to grow, refurbish, buy stock or equipment, hire more staff or simply boost their cash flow.

HMRC updates crypto investors on tax confusion (Peer2Peer Finance) Rated: A

However, a HMRC representative has told Peer2Peer Finance News that the tax office will deal with cryptocurrency related tax bills “on a case-by-case basis”.

The 2017-18 tax year saw huge volatility across the cryptocurrency sector, with Bitcoin reaching a high of £13,840 in mid-December before ending the tax year at approximately £4,750 per coin. This has led to confusion among retail investors regarding their tax liability, particularly if they sold out of the market at a high, then reinvested the profits only to see any gains wiped out.

Frederic Nze of Oakam (Lend Academy) Rated: A

In this podcast you will learn:

  • What was the catalyst that led to the founding of Oakam.
  • The loan products that Oakam offers.
  • The difference between small dollar loans in the US and the UK.
  • How Oakam is able to find their customers.
  • What percentage of their customers apply for a loan on a smartphone.
  • Why they still have physical stores where people can apply for loans in person.
  • How they have refined their underwriting models over the years.
  • How they are dealing with increased fraud via their online channels.
  • The interest rates they charge.
  • How their customers are able to reduce these rates for future loans.

Technology not size is key to banking success (Financial Times) Rated: A

Antony Jenkins, former CEO of Barclays and now head of 10x Future Technologies, writes in the FT that technology is key to the battle with banks; having technology that is more nimble and focused on the customer will help to better position challengers; UK challengers banks have found it hard to compete against the big names, even with recent consolidation; understanding what the customer needs most and allowing them to access services anytime and anywhere is what firms should focus on.

Fintech most popular sector for HNW investors (Investment International) Rated: B

Capitama’s current registered investors have a total annual investment capacity of £7.6bn. Of this total capacity, investors have expressed an annual investment capacity of £5bn into private equity opportunities, with £2.3bn total annual investment in Debt and Income opportunities. The interest of the registered investors in Philanthropic and Social Impact opportunities currently stands at £300m per year. This is an additional theme on Capitama given the rise in interest in these organisations from wealthy individuals and organisations.

69% of Capitama investors are interested in fintech investment opportunities and 67% want to see software and technology deals. Of the nine different investment types available on Capitama, Growth funding is the most popular, with 83% of Capitama registered Investors interested in this area, followed by Early stage investments (72%), Buy-outs (63%), and Real Estate (47%).

 

 

China

Renren Investors Seek to Block Asset Sales to Chief, SoftBank (Bloomberg) Rated: AAA

A group of Renren Inc. investors are trying to block the private sale of company-owned assets to a consortium that includes its own top executive and major shareholder SoftBank Group Corp.

Renren announced the complex deal in April, which it said was necessary to address concerns that the SEC might deem it an investment company — forcing its delisting if it failed to obtain relevant licenses.

The letter accused management of trying to transfer the assets at values equal to or lower than their book value, neglecting their duty to smaller shareholders and misrepresenting certain financial statements. For example, it says the shares in SoFi — one of America’s biggest student loan refinancers — are being sold at a valuation of $269 million when they could be worth double that amount.

US online lending model is unproven, Eisman of The Big Short fame says in Hong Kong (South China Morning Post) Rated: AAA

Steven Eisman, famous for successfully shorting the US subprime market before the onset of the 2008 financial crisis, has said the online lending business model used in the United States is unsustainable, and that losses from Canadian mortgages could widen.

The one pocket of financial market anomaly in the US was online lending, where, he said, the underwriting of peer-to-peer credit was unproven, as selling a loan to investors such as hedge funds and other financial institutions was an unsustainable business model.

“The problem [with P2P lending] is that selling a loan [online] is not the same as selling a book. You buy a book on Amazon and that’s the end of the transaction. When you make a loan, that’s the beginning of a relationship. The question is how you manage that relationship,” said Eisman.

Soft Chinese Tech IPOs Test Next Wave of Listings (Wall Street Journal) Rated: A

More than a dozen technology companies from China are rushing to go public abroad, in an enticing opportunity for investors but one that has generated poor returns recently.

Shares of most Asian tech companies that have listed in New York and Hong Kong since the start of 2017 have notched lackluster performances, with the bulk trading below their initial public offering prices after strong early gains.

European Union

Bondora Go & Grow – Bondora Rolling Out New Product (P2P Banking) Rated: AAA

Go & Grow is designed for the passive investors as hands off p2p lending. One of the main advantages is that Bondora says it is tax optimised.

The Bondora Go & Grow product features a target interest rate of 6.75% which will accrue daily. It runs completly on autoinvest. The investor just needs to join it and pay money into the Go & Grow account (or transfer it from the normal Bondora account). The Go & Grow account promises daily liquidity. There is a 1 EUR withdrawal fee making small withdrawals expensive but for portfolios of 1000 EUR or more and usual investment horizons this fee is negligible.

Three Year Old Fintech Mintos is Profitable (Crowdfund Insider) Rated: A

Latvian Fintech Mintos is reporting a profit in its brief three year old history. According to the company, the global online marketplace for loans has seen their revenue increase more than four-fold in 2017 to € 2.1 million generating a net profit for the year of € 197,000. Mintos says it has experienced significant growth, making it the “peer-to-peer lending market leader for continental Europe” with a 38% market share.

In aggregate, Mintos has topped € 660 million in investments by investors and the company expects the amount of loans funded to reach EUR 1 billion before the end of this year. As of May 2018, Mintos claims more than 58,000 investors using the platform and this number is expected to surpass 100,000 at some point in 2017. Currently, investors may expect an average 12.1% rate of return.

International

The 30 most valuable VC-backed companies in the world (Pitch Book) Rated: AAA

Ridehailing giants Uber and Didi Chuxing, based in San Francisco and Beijing, respectively, lead the list of most valuable private companies around the globe. And moving down the rankings, the pattern set at the top continues. A total of five of the companies are in the ridehailing industry, and 26 of the 30 are based in either the US or China.

 

Source: Pitch Book

What is Libra Credit: Digital Assets as the Future for International Credit (Coin Central) Rated: AAA

Libra Credit is offering a decentralized lending Ethereum-based ecosystem that helps users get open access to credit anywhere and anytime.

As long as a user has digital assets, they will be able to borrow money from Libra Credit by using those digital assets as collateral. Additionally, these users will be able to build an international credit history – a concept that Libra Credit and its partners plan to push to be recognized globally.

Source: Coin Central

Libra Credit plans to charge a fixed 8% annual interest rate charged by Libra Credit, which is party enabled by its partnerships with traditional finance institutions. The rate is competitive with that of other peer-to-peer lending platforms such as Lending Club and Salt, but isn’t tied to the availability of a peer match.

Source: Coin Central

How Misbehaving Australian Banks Are Causing Global Pain (Bloomberg) Rated: AAA

Australia’s four biggest banks — Commonwealth Bank of Australia, Westpac Banking Corp.National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd. — have been plagued by a string of scandals. The accusations run the gamut from giving misleading financial advice to trying to manipulate a benchmark interest rate. Simmering public resentment — stoked by a sense banks were gouging fees to fuel record profits and executive pay — boiled over last year when Commonwealth Bank was sued for systemically breaching anti-money laundering rules.

The government has announced tough new penalties for corporate wrongdoing and beefed up the regulator’s powers; analysts have trimmed earnings forecasts and speculate future legislation could force the biggest banks to sell off advice businesses.  All this comes at a time when bank profits are under pressure from a slowing housing market, rising costs and increased competition. Most of the banks are trying to simplify their operations and sell non-core operations.

Citi Inks $ 100 Million Trade Finance Deal With Asian Development Bank (PYMNTS) Rated: A

Global financial institution Citi is expanding its existing partnership with the Asian Development Bank (ADB) to share risk in trade finance transactions, reports in The Financial said Friday (May 11).

The ADB’s Trade Finance Program reached a deal worth $100 million with Citi that sees the financial institutions (FIs) sharing risk on trade finance transactions in an effort to bolster support for trade and access to finance across Asia.

 

Australia/New Zealand

FINNIES 2018: Here are all the finalists for Australia’s fintech industry awards (Business Insider) Rated: A

89 companies and individuals were chosen for Australia’s only industry-backed fintech awards, from a record field of more than 200 entries.

Excellence in Business Lending
● Finstro
● Prospa
● Spotcap Australia
● The Invoice Market – tim
● Trade Ledger

Excellence in Consumer Lending
● HashChing
● MoneyMe
● MoneyPlace
● RateSetter Australia
● SocietyOne

Robot financial adviser granted FMA exemption (Radio New Zealand News) Rated: A

The country has its first robot financial adviser after KiwiWealth was given an exemption by the Financial Markets Authority from the current law which requires humans to give financial and investment advice.

But Mr Bishop said it would still have human advisors offer detailed advice and have control of the robot.

India

PayMate Acquires Digital Lending Platform Z2P Technologies to Benefit SMEs (BW Disrupt) Rated: AAA

PayMate, an early pioneer in India’s payments industry and a leading player in electronic Business-to-Business (B2B) payments space, announced today the acquisition of Z2P (Zaitech Technology Pvt. Ltd.), a digital lending platform which provides hassle-free and real-time credit using social and banking data along with proprietary analytics and AI.

The acquisition is expected to be completed by May 2018 and it follows the announcement in February of this year by PayMate of its B2B partnership agreement with Visa.

As a result of the acquisition, PayMate acquires an innovative and proven lending solution in Z2P, which when combined with PayMate’s proprietary B2B payments platform will revolutionize the way businesses manage their payment operations, cashflow, and access to growth capital. PayMate plans to partner with banks and NBFCs to improve the flow of credit to SMEs.

Canada

Last week, Power Financial CEO Jeff Orr told reporters he plans to invest more money in fintech startups as the company looks to find technologies that can be incorporated into its business model and avoid disruptions that have hurt other sectors.

Widely known on the Street for its empire of financial advisers and investment products, Power Financial has spent $320-million in the fintech sector – with more than half the funds being allocated toward online robo-adviser Wealthsimple.

Asia

Singapore’s Biggest Bank Takes on China Giants in Fintech Battle (Bloomberg) Rated: AAA

 

Almost 55% of customers say they would consider branchless digital-only bank

Source Bloomberg

Gupta credits his early recognition of the threat to his early days in Citigroup’s transaction banking division, unusual for a bank CEO, who tend to hail from the retail or investment banking arms of their institutions. That background taught him both the nuts and bolts of banking and the importance of technology, Gupta said. He also dabbled briefly but unsuccessfully in the startup world, when he quit Citigroup in 2001 to found an Internet portal in India, around the time the dotcom bubble was bursting.

Latin America

Morgan Stanley Goes After Brazilian FinTech Market (PYMNTS) Rated: AAA

Bloomberg, citing four people with direct knowledge of the matter, reported that Morgan Stanley purchased $14 million in local subordinated bonds from online consumer lender Geru Tecnologia e Servicos. The Geru bonds, which the company issued in December of 2017, have a four-year maturity and pay about 11.2 percent each year, noted the report.

The company is also reportedly in talks with international investors about raising $50 million via an equity round that QMS Capital is handling. QMS has a 10 percent stake in Geru. General Atlantic could also be an investor in the round of fundraising, noted the report.

Authors:

George Popescu
Allen Taylor

Wednesday May 9 2018, Daily News Digest

Gross Revenue and Net interest

News Comments Today’s main news: SoFi is planning a credit card. LendingClub reports Q1 results. OnDeck reports Q1 results. Kabbage closes Orchard acquisition. Cross River passes $600M in monthly originations. Mintos achieves profitability. iZettle to pursue $1.1B valuation through IPO. TransferWise moves into Canada. Today’s main analysis: Review of OnDeck earnings. Today’s thought-provoking articles: Review of Marcus. Cities where borrowers save the most […]

Gross Revenue and Net interest

News Comments

United States

European Union

International

India

Other

News Summary

United States

SoFi Is Said to Plan Credit Card With Help From Former Citi Executive (Bloomberg) Rated: AAA

Social Finance Inc., a startup looking to offer a range of banking services to millennials, is working on a credit card and is bringing in a former Citigroup Inc. executive to help oversee the initiative, said people familiar with the matter.

The San Francisco-based company hopes to offer credit cards within the next year, said the people, who asked not to be identified because the plans are private. In preparation, SoFi is hiring Richard Garside to help lead the company’s operations, the people said.

Financial highlights for the first quarter include:

  • Delivered revenue of $151.7 million, up 22% year-over-year
  • Achieved 18% year-over-year growth in originations to over $2.3 billion
  • Improved Contribution Margin to 49.1% from 42.7% in the same quarter last year
  • Delivered Adjusted EBITDA of $15.3 million, or a 10.1% Adjusted EBITDA margin, compared to an Adjusted EBITDA of $0.2 million, or a 0.1% Adjusted EBITDA margin, in the same quarter last year
  • GAAP Consolidated Net Loss was ($31.2) million, including $17 million of expenses related to outstanding legacy issues disclosed by the Company in 2016, related to ongoing legal costs from government investigations, as well indemnification costs for the previous management.

Operational highlights for the first quarter include:

  • In the first quarter of 2018, LendingClub continued to execute on its mission to make credit more affordable and investing more rewarding, now having served over 2.4 million borrowers.
  • For Borrowers: LendingClub saw strong adoption of a new feature called Direct Payoff that allows borrowers to seamlessly pay off their credit card balances in exchange for a better rate – thereby improving their financial profile and lowering their monthly payments.
  • For Investors: LendingClub’s recently launched innovation, CLUB Certificates, attracted over $160 million in funding from several of the top names in asset management. The new CLUB Certificates give investors easy access to consumer credit and provide a single security that offers greater flexibility and liquidity.
  • Scott Sanborn, LendingClub CEO said, ‘We feel good about how we’ve kicked off the year and the fundamentals of our business continue to be strong. Our strategic initiatives are working on both sides of our marketplace and we’ll keep innovating to help more Americans on their journey to financial success.’.

 

OnDeck Reports First Quarter 2018 Financial Results (PR Newswire) Rated: AAA

OnDeck (NYSE: ONDK) today announced first quarter 2018 Gross revenue of $90 million, Net loss of $1.9 million, and Adjusted Net income of $6.4 million.

“Our first quarter results reflect a strong start to 2018 as we continue to execute on our strategic priorities to position our business for future success,” said Noah Breslow, chief executive officer, OnDeck. “We delivered 8% sequential loan growth while managing our sales and marketing costs, and had positive credit performance, as the 15+ Day Delinquency Ratio and Net Charge-off rate both improved significantly from a year ago.”

Review of OnDeck Q1 2018 Earnings Results (Lend Academy) Rated: AAA

While the company posted a net loss of $1.9 million for the quarter, this was within guidance. Gross revenues were $90 million, coming in at the top end of projections for the quarter. The increase in revenue was attributable to higher interest income or the company’s effective interest yield, or EIY which came in at 35.6%, compared to 34.8% in the previous quarter. OnDeck also beat on adjusted income which came in at $6.4 million (Q1 2018 guidance was between $1 and $5 million).

Source: Lend Academy

Originations were up 8% from the previous quarter at $591 million.

Source: Lend Academy

OnDeck swings to loss, but loan demand surges (American Banker) Rated: A

The New York company recorded a net loss of $2 million, or 3 cents per share, versus a loss of $11 million in the same period a year ago.

OnDeck earned $5.1 in fourth quarter, its first quarterly profit in two years. In a news release Tuesday, the company said that it would have earned $6.4 million in the quarter that ended March 31 if not for charges it took to cover the costs of leases terminations New York and Denver, severance for laid-off workers and other one-time expenses. The lease terminations are expected to save the company $2 million over the next eight years.

 

Kabbage’s Acquisition of Orchard Officially Closes (Crowdfund Insider) Rated: AAA

Orchard co-founder Matt Burton has emailed industry members stating the previously announced acquisition of his company by SME lender Kabbage has formally closed. The purchase had been rumored for weeks with an official announcement hitting the press at the end of April.

Burton, and co-founder and Chief Analytics Officer David Snitkof, have both joined Kabbage in leadership roles. In total, Kabbage will add more than twenty Orchard employees who are predominantly focused on advanced analytics, data science and engineering to its New York City office.

 

We tried Goldman’s Marcus, here’s our conclusion (Business Insider) Rated: AAA

Goldman Sachs’ consumer lending platform, Marcus, appears well on its way to becoming a full-scale digital banking offering. The platform has originated some $2.5 billion in loans since launching in October 2016, and now offers savings accounts with a minimum threshold of $1.

Source: Business Insider

Here’s why FIs should be worried about Marcus:

  • It’s backed by Goldman’s reputation, and deep pockets.
  • The interface is sleek and consumer friendly.
  • Its offerings are extremely competitive.

LendingTree Reveals Cities Where Borrowers Save the Most by Shopping Around for Mortgage Loans (PR Newswire) Rated: AAA

LendingTree today released its Mortgage Rate Competition Indexes for the 50 largest cities in the U.S. to assess how different markets behave across the country.

Source: LendingTree

Cross River Passes $ 600 Million in Monthly Loan Originations (The Public Opinion) Rated: AAA

Continuing its strong record of growth, Cross River, a leader in the emerging Fintech industry, announced today that it has set a new monthly loan origination record of more than $600 million in April.

Cross River’s April 2018 volume represents approximately 60% growth in loan origination from April 2017, and keeps Cross River on pace to exceed $7 billion in loan originations for 2018.

MoneyGram Seeks More Digital Gains In 2018 (PYMNTS) Rated: A

MoneyGram revenue declined 2 percent year over year in the first quarter, to $380 million. That was lower than analyst expectations of about $386 million. Net income declined 19 percent, to $7.1 million, with earnings per share at $0.15 per share — below analyst expectations of $0.26.

Moneygram.com, the digital business, posted a year-over-year revenue gain of 21 percent in the first quarter, with most credit going to customer acquisitions, the company said in its financial release. Digital revenue accounted for 16 percent of all money transfer revenue in the first quarter.

Credit Karma Partners with SpyCloud to Add Dark Web Data Monitoring (Finovate) Rated: A

Credit Karma has expanded its identity theft monitoring offering to include data from the dark web. Courtesy of a partnership with fellow Finovate alum – and Best of Show winner – SpyCloud, Credit Karma will dramatically increase the number of data breaches it is able to review for its 80 million users. Currently searching 4.5 billion public breaches, the new service will boost the total number of data breaches searched to 13 billion.

Data Sheet—Zillow’s Audacious House Flipping Plan Scares Wall Street (Fortune) Rated: A

Looking merely at the numbers, Zillow reported a fine quarter Monday. The Seattle company doesn’t make money. But it does grow quickly on top of a billion-dollar-plus annual-revenue clip. It is worth more than $10 billion and is the winner of its category, having absorbed competitor Trulia and outlasted others.

Yet Zillow isn’t satisfied. It is starting a new home-flipping business using its own balance sheet to buy, touch up, and sell homes. Wall Street hates the idea, wondering why a perfectly respectable online business would wade into the messy and highly variable world of investing real money in actual houses.

Fintech Companies Should Move On From The Millennials (Forbes) Rated: A

These days, for consumer fintech companies in wealth management (we will call them fintechs for short), it is, to paraphrase Meghan Trainor, all about the millennials. Fintech unicorns are courting millennials and garnering billion-dollar valuations for succeeding at it. The Robinhood is 28, and 78% are under 35. The average age of a Betterment customer is 35 and .  With three million accounts, Acorns has primarily a millennial customer base as well. However, if these companies and their millennial-chasing brethren are hoping to raise meaningful assets under management, it is time for them to move on from the millennials.

According to the , millennials today have just 4% of the nation’s wealth, compared to 50% for Baby Boomers and 33% for the Silent Generation.

3 Strategies To Help You Say “Bye, Felicia” To Student Loan Debt (Forbes) Rated: A

Goldman, Wells Fargo Look to Credit Cards for Bigger Returns (Bloomberg) Rated: A

Two of the biggest U.S. banks, Goldman Sachs Group Inc. and Wells Fargo & Co., are on the brink of piling into credit-card lending, seeking a share of the $183 billion in fees and interest tied to the product.

Making the Ask, Part 1: The Key to Entrepreneurial Success (Newswise) Rated: A

Professor Saras Sarasvathy, a renowned scholar of entrepreneurship at the University of Virginia Darden School of Business, has discovered that successful entrepreneurs are not only relentless “askers,” but they also have a repertoire of asks for different startup scenarios.

Rather than develop business plans to raise money, experienced entrepreneurs start with their means at hand — who they are, what they know and whom they know — exploring what they could do with those means. At the same time, they enlist others who want to work with them. Together, they iteratively co-create new products, ventures and markets. As more stakeholders self-select, committing their resources to the emergent ideas, the goals start to coalesce.

In the early stages of venture creation, effectual asks start as open-ended conversations.

SmartBiz Loans Adds Seacoast Bank to Technology Ecosystem (Business Wire) Rated: B

SmartBiz Loans today announced the addition of Seacoast Bank ( to the company’s unique technology ecosystem, taking the total number of banks on their platform to nine. SmartBiz Loans’ intelligent technology platform matches Florida-based Seacoast Bank to the right loan customers in a fraction of the time a referral typically can take, allowing the bank to originate SBA loans more efficiently while increasing the likelihood that small business owners get approved for funding.

 

With student debt levels reaching crisis proportions in the United States, Fidelity Investments announces significant response to its Student Debt Employer Contribution benefit, with 25 employers making plans to offer the Fidelity program and nearly 9,000 of their eligible employees expected to be enrolled in the program by the end of June.

 

 

 

 

 

 

 

 

 

 

United Kingdom

What are the benefits of IFIsas? (Bridging & Commercial) Rated: A

Over a third of UK savers (36%) would place their money in an IFIsa if they had the available funds, a new study has found.

The Next Gen: Investors and Savers report from P2P lending platform ArchOver found that 61% of respondents acknowledged the prospect of higher returns and better interest rates from an IFIsa.

However, over half (57%) claimed that they still didn’t fully understand the service.

China

Chinese Rural Fintech Firm Shenma Completes $ 47.3M Series C Round (Chinese Money Network) Rated: A

Shanghai-based Shenma Finance, a fintech company focused on rural mobility, has raised a RMB300 million (US$47.25 million) series C round led by China Growth Capital, Hina Group and Chinese fintech firm Tongbanjie Group.

Existing investors Credit Ease Financial Industry Investment Fund and ChinaEquity Group also participated in the round, the firm announced on its official WeChat account.

European Union

Riga-based fintech startup Mintos reaches profitability as it eyes global expansion (EU Startups) Rated: AAA

Three years after launch, the Riga-based fintech startup Mintos has turned an annual profit for the first time. The company’s revenue increased more than four-fold in 2017 to over €2.1 million and net profit for 2017 was €197K.

In more than three years since its establishment, Mintos has exceeded €660 million in cumulative investments by investors and the company expects the amount of loans funded to reach €1 billion by the end of the year.

Swedish fintech group iZettle to seek $ 1.1bn valuation in IPO (Financial Times) Rated: AAA

Some of the biggest names in payments, including Mastercard, American Express and Santander, have invested in iZettle, as have venture capital firms including Index Ventures and Dawn Capital.

International

ArthaCoin ICO (ATH Token): Long Term Crypto Lending Program? (Bitcoin Exchange Guide) Rated: A

Arthacoin is a sustainable investment-lending platform that aims at providing prosperity and guaranteed returns to its investors. Arthacoin is viewed as an alternative investment, which uses different investment methods to ensure investors get active returns using their collected funds. The platform purposes to create returns by use of derivatives and leverage in cryptocurrencies.

Besides, it is a self-managed financial system, which supports peer-to-peer transactions with a basis on the open-source platform. Arthacoin is built with a vision of creating a regular passive and sustainable income in the end for its investors.

What’s The Difference Between Trading Crypto VS. Lending Crypto (Finsmes) Rated: A

When it comes to investing in cryptocurrencies, the most common way to invest is by trading. Cryptocurrencies have revolutionized how we do business, make investments and raise funds. Some would even call blockchain technology the invention that would shape the 21st century. Trading cryptocurrencies is a fast and easy way to profit and can be interesting too.

But there is also another way to earn profits from cryptocurrencies and make your money work for you – crypto lending.

Let’s take a look at both crypto trading and crypto lending.

Crypto lending is a relatively newer way to earn profits. It revolves around the concept of shorting.

Australia

Do You Still Only Have One Bank Account? Here’s How Many You Should Have By Now (MyDomaine) Rated: A

If you’re living from pay cheque to pay cheque and can’t seem to break the cycle, chances are you’re not alone, dear millennial. In fact, it may not have even been bad shopping habits that landed you here. Whether it’s an underpaying job, or a weekly rent payment that is far from sensible, in the words of financial adviser, from Honest Money, Jacqui Park: “There’s no time like the present” to stop spending frivolously and start saving. But before you downsize, start a side-hustle, or, cut up the credit cards; it’s worth noting the basics of saving, so when you do decide to forgo life’s little luxuries you are able to make the most of it.

India

BigWin Infotech gets P2P lending licence (The Economic Times) Rated: AAA

Online lending platform BigWin Infotech has received an in-principle approval from RBI to start peer-to-peer lending operation as a non-banking finance company.

The company claims to be the first among all the P2P applicants to have received the licence and is planning to commence operations under the brand name of Paisadukaan.

The Future Of Credit Is Here (Businessworld) Rated: AAA

Fintech companies have netted the lower-middle income consumers who have, until now, been ill-served by banks as far as credit is concerned and have had to resort to gold loans or source other types of collateral. The lending landscape has transformed in the recent times with a host of startups that provide direct and simple credit for consumers. These companies broadly offer two types of products: Cash credit from companies such as Walnut & PaySense, that can be used for any purpose.

EMI loans to purchase electronics or white goods from companies like Zest Money or Kissht competing against industry giants such as Bajaj Finance. Then there are companies like MoneyTap that provide a flexible hybrid product that is an app-based credit line.

Fintech startups that provide credit to SMEs include CapitalFloat, KredX, LendingKart, NeoGrowth, Indifi and others.

P2P loan marketplace Finzy wants to change how India sees lending (Your Story) Rated: A

The rules of investment have changed over the years. First it was traditional methods like saving with fixed deposits, and then came insurance and stock markets.

However, the rules have changed yet again, and peer-to-peer lending is being viewed as an investment avenue that is expected to give returns to the tune of 18-22 percent, according to industry estimates.

According to the company, the rate of return for investing in Finzy is 15.5 percent for investors.

 

Latin America

Ripio CEO: Reinventing P2P Lending With The Blockchain (PTMNTS) Rated: A

Ripio has had more than one name in its evolution as a firm – but only a single goal. Originally known as BitPagos at launch, and then rebranding to Ripio in advance of its late 2017 ICO – the Argentina-based firm wants to use the blockchain to unlock the power of P2P lendingon a global scale.

The problem with traditional credit systems, according to Ripio, is that when it comes to access, geography is more or less destiny in many cases.

Canada

Fintech company TransferWise to launch borderless debit card in Canada in 2019 (Financial Post) Rated: AAA

European financial technology company TransferWise is planning a Canadian launch next year for its borderless debit MasterCard, which allows users to hold and spend a balance in multiple currencies with lower fees than traditional banks.

Kaarmann says there would be no transaction fees for people making purchases on the borderless debit card in the currency a balance is held in.

Authors:

George Popescu
Allen Taylor