- Today’s main news: Microloans for SMBs are becoming big business. RateSetter offers IFISA transfers. Funding Circle opens IFISA to transfers. Funding Circle SME Income Fund issues more shares. BNP Paribas Asset Management launches SME lending fund.
- Today’s main analysis: Lendio’s top 10 best states for small business lending.
- Today’s thought-provoking articles: The missing benefit in employee financial wellness. U.S., UK banks vulnerable to SMBs switching. Ontario government invests in Lending Loop to boost SMB lending.
- Microloans are a growing segment of MPL. AT: “Banks have all but abandoned this sector. Funding Circle has a grip on it, as do other other alternative lenders. I don’t think the market is saturated – yet.”
- Lendio lits 10 best states for small business lending. AT: “As you’d expect, the largest states make the list. But No. 1 is Utah, which is surprising. Of course, it’s tied with California, which is not a surprise.”
- The missing benefit in employee financial wellness. AT: “There is still plenty of room for alternative lenders to partner with large employers to include student loan payoff benefits to their employees.”
- RealtyMogul offers commercial real estate opportunities online.
- Fannie, Freddie approve thousands of no-appraisal loans.
- Banks adopt fast-follower approach to alternative data.
- Bank of America wants to adopt technology for small business lending.
- First RealFund raises $500K for Brooklyn property renovation.
- Morgan Stanley talks about tech strategy.
- RateSetter opens IFISA to transfers.
- RateSetter intros bonus scheme.
- Funding Circle opens IFISA to transfers.
- Funding Circle SME Income Fund issues more shares.
- Starling Bank partners with Samsung for mobile payments.
- Nucleus issues new loan type for startups.
- High-cost lending offers socially valuable function.
- How to become an IFISA millionaire in 25 years.
- Rip-off debts soar after payday lending crackdown.
- Large U.S., UK banks vulnerable to losing SMB customers. AT: “To me, this spells a huge opportunity for challenger banks, neobanks, and other digital-only banks to focus a product specifically aimed at small- to medium-sized businesses. Huge opportunity, I think.”
- Banks treat customers like developers.
- Rad Card survey reveals interesting things about crypto users.
- The sharing economy.
- ZPER uses Trustonic security in mobile wallet with P2P lending capabilities.
- BNP Paribas Asset Management launches SME lending fund.
- Estateguru gets credit line from Varengold Bank.
- China: Niwodai looks for partners for Southeast Asia expansion.
- Australia: Wisr sees 42% growth.
- New Zealand: Financial regulator issues P2P lending guidance.
- Australia: ME appoints group executive of customer banking.
- India: OpenTap raises RS 3 Crore.
- India: MyLoanCare raises funding.
- Singapore: Ex-minister invests in Helicap.
- Brazil: Neon raises $22 million.
- Canada: Ontario government invests in Lending Loop.
- United States
- Microloans a glimmer of hope for small businesses in need (USA Today) Rated: AAA
- Lendio Announces Annual List of Top 10 Best States for Small Business Lending (Lendio) Rated: AAA
- CommonBond’s Latest Study Reveals the Missing Benefit in Employee Financial Wellness (Crowdfund Insider) Rated: AAA
- RealtyMogul Brings Fintech Solutions To Commercial Real Estate Investment (Benzinga) Rated: A
- Fannie and Freddie approve thousands of loans with no formal appraisals (The Washington Post) Rated: A
- Banks Adopt a Fast-Follower Approach to Alternative Data, But Pitfalls Remain, says Auriemma Consulting Group (PR Web) Rated: A
- Inside Bank of America’s big plans for small businesses (TearSheet) Rated: A
- First RealFund Raises $ 500,000 of Preferred Equity for Brooklyn Property Renovation (Citizen Tribune) Rated: B
- Morgan Stanley kicks new tech strategy into gear (American Banker) Rated: B
- United Kingdom
- RateSetter opens IFISA to transfers (Peer2Peer Finace) Rated: AAA
- RateSetter introduces bonus scheme (Bridging & Commercial) Rated: B
- Funding Circle opens IFISA to transfers (Peer2Peer Finance) Rated: AAA
- 6%-yielding Funding Circle fund issues more shares (Citywire) Rated: AAA
- Starling Bank partners with Samsung for mobile payments (AltFiNews) Rated: A
- Nucleus targets start-ups with new type of loan (Peer2Peer Finance) Rated: A
- High-cost lending provides “a socially valuable function”, says regulator boss Bailey (City A.M.) Rated: A
- How to become an IFISA millionaire in 25 years (Peer2Peer Finance) Rated: B
- Rip-off debts soar as rent-to-own, catalogue credit and doorstep lending surge after payday loan crackdown (The Telegraph) Rated: B
- Niwodai Seeks Partners for Fintech-driven Expansion into Southeast Asia (PR Newswire) Rated: AAA
- European Union
- BNP Paribas Asset Management launches SME lending fund (AltFiNews) Rated: AAA
- German Varengold Bank Provides Credit Line to Estateguru (P2P Banking) Rated: B
- New FIS Study Finds Larger U.S. and U.K. Banks Are Vulnerable to Losing Critical Small-Midsized Business Customers (Fintech Finance) Rated: AAA
- Banks are treating customers like product developers (TearSheet) Rated: A
- Rad Card Great HODL Survey Reveals Average Crypto User 25-34, Male (Bitcoin Exchange Guide) Rated: A
- Fintech and the Sharing Economy (TLE) Rated: B
- ZPER Embeds Trustonic in New Mobile Wallet for Optimized Security (Blockchain News) Rated: B
- Australia/New Zealand
- Online lender continues huge loan growth (Australian Broker) Rated: AAA
- The FMA Makes A Guidance Note For Peer – To – Peer Lending Services & Crowdfunding Services (Mondaq) Rated: A
- Bank names new group executive (Mortgage Business) Rated: B
- Fintech Startup OpenTap Raises ₹3 Crore from HNIs (IndianWeb2) Rated: AAA
- India Dealbook: MyLoanCare raise funding (Deal Steet Asia) Rated: B
- Startup bags funds from Singapore ex-minister to get ultra-wealthy into crowdlending (Tech in Asia) Rated: AAA
- Latin America
- Neon Raises $ 22M in Series A Funding (Finsmes) Rated: AAA
- Ontario government invests in fintech to boost small-business lending (The Globe and Mail) Rated: AAA
Microloans a glimmer of hope for small businesses in need (USA Today) Rated: AAA
The microloan market has evolved in the last five years, says Antara Dutta, a social entrepreneur and mentor with the Delaware chapter of SCORE, a volunteer network of small business advisers. Many nonprofit organizations, foundations and peer-to-peer lending networks have also entered the microloan market.
One such company is Funding Circle, a San Francisco-based lending platform that connects investors with small business owners. “Banks have really pulled back from doing small business loans over the past decade,” says Sarina Siddhanti, Funding Circle’s U.S. Head of Commercial. “We fill that gap.”
While Funding Circle awards business loans up to $500,000, they also offer microloans to entrepreneurs who need less.
Lendio Announces Annual List of Top 10 Best States for Small Business Lending (Lendio) Rated: AAA
In honor of National Small Business Week, Lendio, the nation’s leading marketplace for small business loans, today announced its third annual list of top 10 states for small business lending, based on lending data from the Lendio platform, which matches businesses with more than 75 lenders.
CommonBond’s Latest Study Reveals the Missing Benefit in Employee Financial Wellness (Crowdfund Insider) Rated: AAA
On Tuesday, CommonBond, an online lending platform servicing the student loan market, released the results of one of the most comprehensive employee financial wellness benefits studies to date. According to the lender, the research revealed the extent to which student debt affects employees’ financial wellness, as well as how companies are meeting, or not meeting, the financial wellness needs of their employees.
- Student debt cuts across all age groups, including parents who are taking out loans for their children: Nearly 75% of all workers have taken out loans to fund their own education, while 21 percent of workers expect to take out a loan for a child or other family member’s education in the next five years.
- Human resources executives prioritize benefits for employees without student debt: For employees with student debt, student loan repayment is the most-requested financial wellness benefit; however, human resources teams rank student loan repayment as their third priority.
- Employees do not think their benefits are as innovative as human resources executives believe: 71% of human resources executives see their benefits offering as innovative, compared with 50 percent of employees.
- Student loan benefits attract talent, retain employees, and improve work performance: 78% of employees with current or future student loan debt want their employer to offer this benefit, and 65% of employees over age 55 in these categories want the same.
RealtyMogul Brings Fintech Solutions To Commercial Real Estate Investment (Benzinga) Rated: A
What does your company do? What unique problem does it solve?
RealtyMogul is a unique commercial real estate private markets investing platform that provides discerning investors exclusive access to thoroughly vetted opportunities, rigorous underwriting, and high-touch customer service through licensed investment professionals. We strive to build wealth through sound principles and data insights, serving real people who want a smart alternative investing strategy.
Fannie and Freddie approve thousands of loans with no formal appraisals (The Washington Post) Rated: A
For homeowners and buyers, it’s been a windfall: relief from having to pay for a traditional mortgage appraisal that usually costs between $400 and $600. The savings nationwide to consumers in just the past year alone may total tens of millions of dollars.
Last year, the two largest sources of American mortgage financing — federally backed Fannie Mae and Freddie Mac — began accepting home-purchase loans that carried no formal property appraisal.
Ryan Lundquist, an appraiser in Sacramento, noted that computer programs “cannot smell 20 cats living at the property.”
Pat Turner, a Richmond appraiser, says that, worse yet, the “savings” from Fannie and Freddie may not always flow to buyers. He cited a recent case in his area where a major online lender allegedly charged a buyer $600 on a loan with an appraisal-fee waiver.
After ceding a key competitive advantage to fintech companies in recent years, several mass market and regional banks are testing alternative data for use in marketing, pre-screening, and underwriting consumer loan products like credit cards and personal loans, and exploring emerging use cases in fraud prevention and other areas.
While most lender decisions still use traditional sources, such as credit file data managed by the consumer reporting agencies, the potential for alternative data to transform lending is clear. Rent and utility payments, employment information, and behavioral data paint a clearer picture of a consumer’s creditworthiness and could allow lenders to reach underserved populations. In fact, alternative data has allowed Lending Club, a marketplace lender, to extend lower-priced credit to borrowers that would otherwise be classified as subprime, according to the Federal Reserve.
Inside Bank of America’s big plans for small businesses (TearSheet) Rated: A
What about branch transformation on the small business side? How is B of A marrying its physical and digital strategies?
We know in certain pockets of towns and cities you’ll have more business owners coming in and out than in others; in those centers with high traffic of business owners we add more capabilities so we’re there for them and have more people who understand small business.
What’s an example of technology you’re investing in?
Three weeks ago we launched our relationship rewards program, which is our version of the Preferred Rewards, where when you bring more to us — more deposits or lending — you get more benefits. It’s a very straightforward way to bank with us that encompasses lending, merchants and operating accounts. That’s a technology investment in itself because we have to on the back-end tie everything together and understand the full picture of the relationship; it comes from updating our products and solutions in the backend to streamlining the underwriting and fulfillment processes.
First RealFund Raises $ 500,000 of Preferred Equity for Brooklyn Property Renovation (Citizen Tribune) Rated: B
First RealFund (“FRF”) has raised $500,000 of preferred equity financing for the renovation of a 4-story brownstone in Brooklyn’s Bedford Stuyvesant neighborhood.
Morgan Stanley kicks new tech strategy into gear (American Banker) Rated: B
Morgan Stanley CEO James Gorman has asked Rob Rooney, the investment bank’s technology chief and leader of its international unit, to return to New York to focus solely on the tech part of his job.
“We have enormous, staggering amounts of data for risk management, [anti-money-laundering], regulatory and other purposes,” Rooney said. “The use cases here are enormous. The job in our technology organization is to make sure we build a strategy we can leverage across the firm, otherwise it’s not efficient.”
The bank is increasing its investments in innovation and cybersecurity, he said.
RateSetter opens IFISA to transfers (Peer2Peer Finace) Rated: AAA
RATESETTER has opened its Innovative Finance ISA (IFISA) to transfers from other providers.
RateSetter will accept full and partial transfers and there is no limit on the number of existing ISAs that can be transferred.
RateSetter introduces bonus scheme (Bridging & Commercial) Rated: B
Investors will receive a £50 bonus if they recommend the platform to a family member or friend who then invests £1,000.
The referred person can also receive a £100 bonus if they keep the £1,000 invested in RateSetter for a year.
Funding Circle opens IFISA to transfers (Peer2Peer Finance) Rated: AAA
FUNDING Circle has opened its Innovative Finance ISA (IFISA) to transfers, meaning that all of the ‘big three’ peer-to-peer lenders now offer this capability.
“Since last November more than £90m has been lent directly to businesses through the Funding Circle ISA, and we’re pleased to see so many of you taking advantage of the opportunity to earn attractive, stable returns tax-free,” the company said on a blog post on its website.
6%-yielding Funding Circle fund issues more shares (Citywire) Rated: AAA
The 6% yielding lender to small businesses, plans to sell up to 24.9 million shares it holds in treasury having bought them back when they briefly traded at a discount two years ago.
The shares are being offered to ‘qualified’ experienced investors at 102.2p, which is 2.2% less than the share price at Monday’s close and a 2%-3% premium to their net asset value.
Starling Bank partners with Samsung for mobile payments (AltFiNews) Rated: A
Announced today, digital bank Starling has partnered with Samsung to offer mobile payments method Samsung Pay to all Starling customers, creating the bank’s fourth partnership for making purchases via a mobile phone.
Starling users will now be able to make contactless payments at the point of sale using nothing but their Samsung phone, using iris, fingerprint or PIN recognition to prove their identity.
Nucleus targets start-ups with new type of loan (Peer2Peer Finance) Rated: A
The alternative business finance provider announced the launch of Start-up Finance on Wednesday, which is tailored to help start-ups get their business off the ground.
Young companies can borrow between £25,000 and £20m, with a secured interest-only loan, over a period of up to five years.
High-cost lending provides “a socially valuable function”, says regulator boss Bailey (City A.M.) Rated: A
The boss of the UK’s top financial regulator believes access to controversial high-cost loans is an “important feature” for many Britons to fund everyday living.
Andrew Bailey, the chief executive of the Financial Conduct Authority, today indicated a clampdown on the sector would not be forthcoming.
How to become an IFISA millionaire in 25 years (Peer2Peer Finance) Rated: B
Figures from P2P analyst 4th Way suggest if a lender invests £10,000 each year across several platforms and aims for nine per cent interest after bad debts, they could be a millionaire within two-and-a-half decades.
Rip-off debts soar as rent-to-own, catalogue credit and doorstep lending surge after payday loan crackdown (The Telegraph) Rated: B
Debts from catalogue credit, doorstep lending and rent-to-own have all more than doubled in recent years even as regulators cracked down on payday loans.
Lenders now face a crackdown as the City watchdog wants to make sure high-cost loans are only used by borrowers who can afford the debt and are helped by it.
Niwodai Seeks Partners for Fintech-driven Expansion into Southeast Asia (PR Newswire) Rated: AAA
Niwodai, one of the largest Chinese P2P lending companies, is said to be seeking a path into Southeast Asia, according to sources. The company is in frequent contact with potential partners, looking to map out a proper route to advancing their business, of which financial technology is the most powerful tool. Considering the challenges that most Chinese fintech companies have faced, proper cooperation with a local partner should be a win-win situation.
BNP Paribas Asset Management launches SME lending fund (AltFiNews) Rated: AAA
BNP Paribas Asset Management has launched a new SME lending fund for institutional investors.
The BNP Paribas Novo 2018 business loan fund follows on from its Novo 1 fund, launched in 2013. The new fund has the backing of the FF and the CDC and aims to provide new sources of financing to help French medium-sized companies expand.
BNP Paribas Novo 2018 could invest €264m over the next three years, the firm said in a statement.
German Varengold Bank Provides Credit Line to Estateguru (P2P Banking) Rated: B
Estonian property p2p lending marketplace Estateguru announced that it has secured its first institutional investor.
In March 2018, Estateguru signed the firm’s first institutional credit line to be invested in loans originated in the Baltic market with Germany based Varengold Bank AG.
New FIS Study Finds Larger U.S. and U.K. Banks Are Vulnerable to Losing Critical Small-Midsized Business Customers (Fintech Finance) Rated: AAA
The study found that more than 80% of surveyed SMB customers in the U.S., and 70% of SMB customers in the U.K., are satisfied with their primary banking providers. However:
- In the U.S., SMBs report higher satisfaction with services from community banks over larger banks.
- In the U.K., nearly one in four SMBs – most of which use larger banking providers – are planning to switch banking providers in the next 12 months
- Common reasons cited by SMBs in both countries for switching banks are uncompetitive fees, dissatisfaction with services/products provided, outdated bank processes, or being declined for a business loan/line of credit.
- SMBs in both countries report difficulty in obtaining reliable and accurate information from their banks, especially larger institutions, without visiting a physical bank branch.
Growing Adoption of Digital Tools
- About 60% of SMBs in both countries have increased the number of transactions done digitally over the past year.
- More than 40% of financial transactions were completed digitally by SMBs in both countries.
- Acceptance of online, mobile app and person-to-person payments increased 38% over the last year for U.S. SMBs.
Banks are treating customers like product developers (TearSheet) Rated: A
Banks’ race to meet the customers “where they are” has taken on a new twist: customers are now product developers — not just end users.
Digital-only challenger banks like Monzo are emphasizing customer involvement to build a human connection with customers — a move others like Tandem, Revolut and Chime are also emulating. Chime, for instance, recently launched a chat feature within its mobile app that lets customers provide real-time feedback, a tool that’s used by around 50,000 users every month, according head of product Zachary Smith.
Three-year-old Monzo, which has 650,000 customers, has been active on various fronts in seeking feedback from customers on products while they’re in development — both through in-person “Testing Tuesdays” at Monzo offices and an exchange of views and polls on its online forums.
Rad Card Great HODL Survey Reveals Average Crypto User 25-34, Male (Bitcoin Exchange Guide) Rated: A
The team at Rad Card, found online at RadLending.com, just completed something called “The Great HODL Survey”.
- The average cryptocurrency user is a male between the ages of 25 and 34
- That person holds a bachelor’s degree
- The average cryptocurrency users “hodls” between $1,000 and $10,000 worth of tokens, but has never used cryptocurrency for payment of goods and services
- Crypto investors, overall, “prefer not to use their assets in real life as much as business owners”, according to the study, as well as freelancers or service providers that accept cryptocurrencies in exchange for their work, products, or services
Core features of the RAD platform include a P2P lending platform, crypto-secured lending, and a digital credit score. The company will offer its services to miners, small crypto businesses, post-ICO companies, exchanges and traders, and traditional fiat investors, all of whom can benefit from crypto-backed loans.
Fintech and the Sharing Economy (TLE) Rated: B
One of the phenomena this has supported is a surge in partnerships forged online, to provide peer to peer services.
The prediction is that the sharing economy will be worth over $335 billion by 2025. Fintech is pivotal in this, as it’s responsible for developing the accessible and efficient systems to carry out these digital “barter and buy” opportunities.
Peer to peer lending using Fintech also requires less cost to facilitate and therefore provides greater equality of opportunity.
ZPER Embeds Trustonic in New Mobile Wallet for Optimized Security (Blockchain News) Rated: B
Decentralized peer-to-peer (P2P) Lending Platform ZPER is using features from digital security semiconductor group Trustonic in its new mobile cryptocurrency wallet, claiming that it will be the most secure available.
The wallet will also be able to store and exchange multiple cryptocurrencies, thus enabling P2P cross-border value exchanges.
Online lender continues huge loan growth (Australian Broker) Rated: AAA
Neo-lender Wisr Limited saw a 42% growth in its origination of personal loans in the latest financial quarter.
This was the company’s largest quarter in loan originations since Wisr, formerly known as DirectMoney, began in 2014.
Loan originations have continued to grow over the financial year, growing by 20% in the first quarter and by 79% in the second quarter.
The FMA Makes A Guidance Note For Peer – To – Peer Lending Services & Crowdfunding Services (Mondaq) Rated: A
The Financial Markets Authority (FMA), New Zealand’s regulator for financial services, has released a guidance note to licensed peer-to-peer (P2P) lending services, licensed crowdfunding services for fair dealing in advertising and communicating offers of financial products or services.
Who is this guidance for?
- The FMA addressed the guidance note to P2P lending services and crowdfunding services, but it is useful for anyone who is promoting or advising others about these services (i.e marketing teams, investment bankers, lawyers).
- The fair dealing expectations stretch beyond New Zealand’s borders, so they apply to people overseas. Anyone who acts in relation to, or makes an offer of financial products or services in New Zealand should take note.
- The guidance note is applicable to any media channel that businesses use to communicate and advertise their financial products and services (be it snail-mail or social media).
Bank names new group executive (Mortgage Business) Rated: B
Online lender ME has appointed Craig Ralston as group executive of customer banking, effective as of 1 May. He will be responsible for ME’s product and service delivery, with a focus on improving the design, simplicity and fairness of the bank’s offerings.
Mr Ralston joined ME in February 2015 as head of strategy to enhance the bank’s strategic and business planning cycle.
Fintech Startup OpenTap Raises ₹3 Crore from HNIs (IndianWeb2) Rated: AAA
Chennai-based OpenTap, a fintech startup focusing on the alternate lending segment, has raised about ₹3 crore funding from HNIs (high networth individuals). The capital raised will be used by the startup to strengthen its technology infrastructure and widen the reach of its financial services network across the country. The startup had earlier raised undisclosed amount in seed funding, in May 2015.
India Dealbook: MyLoanCare raise funding (Deal Steet Asia) Rated: B
Fintech startup MyLoanCare raises $975k in Series A round Online loans marketplace MyLoanCare, operated by My Finance Care Advisors Pvt. Ltd, has raised Rs 6.5 crore ($975,000) from Ncubate Capital Partners, the venture capital arm of Gurugram-based SAR Group.
Startup bags funds from Singapore ex-minister to get ultra-wealthy into crowdlending (Tech in Asia) Rated: AAA
Singapore-based Helicap is a new fintech platform that aims to bring a fund management angle in the peer-to-peer (P2P) lending space. To make this happen, it has raised US$1.5 million in seed funding.
The round was led by Teo Ser Luck, the former Minister of State for Manpower who last year decided to trade politics for the startup sector. Fintech company Nufin Data, where Teo serves as chairman, also invested.
Neon Raises $ 22M in Series A Funding (Finsmes) Rated: AAA
Neon, a São Paulo, Brazil-based fully-digital Brazilian bank, raised $22m in Series A funding.
Propel Venture Partners, Monashees, Quona Capital, Omidyar Network, Tera, and Yellow Ventures participated in the funding round. As part of the investment agreement, Neon Pagamentos SA transferred its controlling interest to a holding company in the United Kingdom. In addition, as part of the new round, Jay Reinemann of Propel Venture Partners, and Marcelo Lima of Monashees, are joining Neon’s board of directors.
The company intends to use the funds for product expansion, investment in technology and innovation on customer experience.
Ontario government invests in fintech to boost small-business lending (The Globe and Mail) Rated: AAA
On Wednesday, Lending Loop, a peer-to-peer online lending platform for small-business loans, announced a pilot project in partnership with Ontario that will provide $3-million of loans over the next two years. The government will boost Lending Loop’s loans by 10 per cent, which will help fund more than $30-million of loans to businesses across Ontario. The government will receive a full re-payment of the loan plus interest at the end of the loan terms.