Thursday September 19 2019, Weekly News Digest

MAS Singapore

News Comments Today’s main news: SoFi to get its name on a football stadium. Petal raises $300M. Funding Circle closing in on 1-year anniversary of float. Zopa sends warning of imitation scams. Cumulative UK alt lending hits 11.3B GBP. Companies to get social credit in China. Today’s main analysis: Student loan refinancing rates are down. […]

The post Thursday September 19 2019, Weekly News Digest appeared first on Lending Times.

MAS Singapore

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United States

United Kingdom

China/Hong Kong

International

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News Summary

United States

Sundays at SoFi: NFL Stadium in Inglewood Lands a Corporate Name (Commercial Observer), Rated: AAA

Online lender SoFi Lending Corp. has secured the naming rights and a 20-year deal with the Rams and Chargers, according to the Los Angeles Business Journal. The firm agreed to pay around $20 million per year, reports say.

SoFi Stadium, which will be the largest in the NFL, is the centerpiece to the much larger $5-billion Hollywood Park project developed by Rams Owner/Chairman E. Stanley Kroenke. Construction is 75 percent complete, and the stadium is expected to open next summer for other events before the NFL preseason begins in August.

Taylor Swift to Open SoFi Stadium Next Summer (KFI AM 640), Rated: B

The opening of the $2.6 billion SoFi Stadium will happen next summer on July 25th. However it’s not for a Rams or Chargers game. Swift announced that she will play two shows (July 25th and July 26th) at the stadium as a part in her much-anticipated 2020 world tour.

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

Key Findings from the OnDeck Small Business Survey:

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

President Donald Trump was the choice of 37% of small businesses surveyed, followed by Joe Biden at 18%. When combined, the top five Democratic candidates were the preference of 44% of respondents.

Student Loan Refinancing Rates Down Sharply (Credible), Rated: AAA

During August:

  • Rates on 10-year fixed-rate loans averaged 4.70%, down 22% from a July 2018 peak of 6.05%
  • Rates on 5-year variable-rate loans averaged 4.03%, down 14% from September

A borrower repaying the average graduate school debt of $84,300 over 10 years at 6.36% interest — the average rate for grad school loans in recent years — could save:

  • $20,927 by refinancing into a 5-year variable rate loan
  • $8,327 by refinancing into a 10-year fixed-rate loan

Credit card start-up Petal raises $ 300 million debt round from Jefferies (CNBC), Rated: AAA

The New York City-based company announced a $300 million debt round from Jefferies on Tuesday, adding to existing venture capital investments from names like Peter Thiel’s Valar Ventures.

Plaid adds credit card data to Liabilities product (Tearsheet), Rated: A

In July, Plaid launched its Liabilities product that gives developers access to real time information about what consumers owe. Expanding beyond student loan data, the company has added support for credit card information, so firms can build better debt management solutions.

GoCardless launches US debit payments solution and opens San Francisco office (TechCrunch), Rated: A

GoCardless, the London fintech that aims to become the one-stop shop globally for businesses that want to let customers pay via recurring bank payments, has launched a U.S. debit solution.

Specifically, GoCardless’  new U.S. product supports debit payments on the ACH (Automated Clearing House) network.

The company has also opened an office across the pond in San Francisco’s financial district, headed up by Andrew Gilboy, general manager, North America, who was previously the company’s chief revenue officer.

Nav Launches New Feature to Help Business Owners Boost Business Credit (PR Newswire), Rated: A

Today Nav, a fintech company that matches business owners with their best financing options for free, announced new offerings to help small business owners boost their business credit scores, giving an easy solution to developing a strong business credit profile that alternative and traditional lenders can trust and finance.

Why would HUD gut its own disparate impact rule? (The Times Weekly), Rated: AAA

Since 2013, the disparate impact rule has objectively examined the effects of business practices with lenders, landlords, insurers, and real estate professionals against the provisions of the 1968 Fair Housing Act. The rule required that first a plaintiff must establish a discriminatory effect in policies and/or practices, before the defendant(s) would bear the responsibility of proving their own practices were nondiscriminatory.

During delivery of Capitol Hill testimony earlier this spring, Nikitra Bailey, an EVP with the Center for Responsible Lending (CRL) also underscored the importance of disparate impact in fair housing.

“Disparate impact analysis encourages creative approaches that both increase effectiveness and inclusion,” testified Bailey. “This process and the value of disparate impact analysis was recently pointed out and endorsed by the largest personal loan company in the country, Lending Club.”

BlueVine Appoints Dosh & PayPal Vet Brad Brodigan As New Chief Commercial Officer (Crowdfund Insider), Rated: A

Online lender BlueVine announced on Wednesday it has appointed Brad Brodigan as its new Chief Commercial Officer. BlueVine reported that through this role, Brodigan will be responsible for overseeing revenue-generating functions including sales, customer service, and partner management.

Money360 Closes $ 170 Million in Commercial Real Estate Loans in July and August (GlobeNewswire), Rated: A

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, announced today it closed approximately $170 million in loans during July and August. This benchmark brings Money360 close to $500 million in loans closed this year.

Groundfloor Now Allows Real Estate Developers to Gain Pre Approval on Loans (Crowdfund Insider), Rated: A

Groundfloor, a real estate lending and investing platform that allows anyone to participate directly in real estate investments, has launched a new product to make the lending process more easier for real estate investors. Groundfloor now allows certain developers to gain pre-approval on loans with a new program called “QC Maxx.”

ABS East; Stripe’s Lending Arm; Madden Decision (PeerIQ), Rated: A

In financing news, student loan fintech “College Ave” locked down a $300MM securitization and a AAA rating this week. The securitization was co-led by both Barclays and Goldman Sachs. Affirm, led by Max Levchin, is reportedly close to wrapping up a $1.5 Bn debt and equity financing with Thrive Capital and Spark Capital leading.

Stripe is mirroring other payments companies that have since built lending capabilities – notably, Square and PayPal. Stripe believes it can compete in an already crowded small business lending market (OnDeck, Kabbage, Fundera, Funding Circle, etc.) due to its data & channel advantages stemming from its payments business.

Fintech Firm OppLoans Announces Its First Bank-Led Credit Facility (GlobeNewswire), Rated: A

OppLoans, a growing fintech and top rated direct-to-consumer online lending platform, announced today that it has secured its first bank-led asset-backed revolving credit facility. This facility structure will enable OppLoans to further its mission by broadening access to online personal lending products for more middle-income consumers with credit challenges.

Aura Completes Three Social Bond Issuances Totaling 5 million Over Last 4 Months (Yahoo! Finance), Rated: A

M&G Investments and Community Capital Management, a mutual fund that specializes in impact and Community Reinvestment Act (CRA) related investments, have joined with U.S. and international banks to invest $145 million in Aura’s social bonds to finance the origination of affordable, small dollar installment loans to working families in the United States.

Challenger banks insist they’re equal to the task of lending (American Banker), Rated: A

Almost all U.S. challenger banks offer no-fee checking, savings accounts and enhanced personal financial management tools. Now some of the most popular have taken, or are poised to take, their next step: making loans.

Personal loans and credit cards are lucrative but inherently risky, and these young companies — like MoneyLion, Varo and others — will have to prove to regulators, investors and the public that they have the wherewithal to weather downturns in the credit cycle.

Cash-flow data shows promise as predictor of credit risk (American Banker), Rated: A

Melissa Koide, co-founder and CEO of FinRegLab, analyzed loan data from six lenders that use cash-flow data in their underwriting. She shares what she found.

Prevu Raises $ 2 Million in Seed Funding to Grow its Digital Home Buying Platform (Digital Journal), Rated: A

Prevu, a customer-focused digital home buying platform delivering industry-leading efficiency and savings, announced today the closing of its $2 million seed funding round. The round was led by Corigin Ventures, a prominent seed-stage venture capital firm with expertise in the real estate technology and consumer industries as well as a history of backing startups disrupting residential brokerage business models.

Embattled Prodigy Network CEO Rodrigo Niño to step down (The Real Deal), Rated: A

Prodigy Network founder Rodrigo Niño is stepping down from his position as CEO amid mounting financial and legal issues, The Real Deal has learned.

Prodigy, a real estate crowdfunding platform, has faced criticism from investors in recent months over underperforming investment properties and unpaid distributions. On Monday, an investor in one of Prodigy’s newest projects — the 13-story Standard Hotel in Chicago — filed a lawsuit alleging the firm was “insolvent” and had used investments “for purposes other than those relating to the project.”

EquityMultiple Provides Investors with Options to Take Advantage of Unique Tax Benefits (Crowdfund Insider), Rated: A

Opportunity Zones are new, tax-advantaged vehicles for investors to earn more on their money. Created by the Tax Cuts and Jobs Act of 2017, the first qualified opportunity zones (QOZs) first hit the market in early 2018. Designated by state authorities, there are now thousands of QOZs in the US designed to boost development in selected communities. Investors receive a break on capital gains taxes which can be significant. Local officials can spur economic development which leads to more jobs. Online investment platforms immediately saw the opportunity intrinsic to QOZs with multiple platforms now offering investments in developments that benefit from these tax breaks.

Why are your Opportunity Zone Offerings better than some others available on competing investment platforms?

Soren Godbersen: There are a number of firms out there now marketing Opportunity Zone offerings to investors. We’re proud of what we have been able to offer to our investor network and there are a few things about our Opportunity Zone investments that are unique:

How to Recession-Proof Your Investments (U.S. News), Rated: A

AFTER A DECADE OF steady growth, the economic cycle is due for a reversal, with concerns of a recession.

  • Consider other types of investments outside of stocks and bonds.
  • Know that timing the market is difficult.

What to Invest in During a Recession?

Other less correlated assets include the real estate niche. With real estate crowdfunding, hypermarket segmentation is available. Investors can choose their property type and geographic region when investing in real estate. Two real estate crowdfunding platforms for accredited investors are CrowdFund and EquityMultiple. Fundrise and Groundfloor open targeted real estate investing to nonaccredited investors as well.

Litecoin Non-Profit to Hold Undisclosed Treasury Sum with Crypto Lender (CoinDesk), Rated: A

The Litecoin Foundation is putting its capital to work, lending at interest through another cryptocurrency program.

The Foundation has tapped the Celsius Network, a blockchain-based crypto lending program, to become its preferred crypto wallet, Celsius Network CEO Alex Mashinsky told CoinDesk.

As part of the deal, the Foundation will allocate an undisclosed portion of its treasury to the Network. LTC holders can receive up to 10.53% annually back on their crypto holdings and dollar loans as low as 4.95 percent as well.

Fintechs give small business more choice for credit than just banks (PaymentsSource), Rated: AAA

It’s no secret working capital is the lifeblood of all small businesses. It’s the fuel that keeps them running, helps them grow and take on new opportunities.

And yet, so many small businesses struggle with cash flow. In fact, according to a recent study from Intuit QuickBooks, 61% of small businesses have had cash flow issues in the past year.

Source: FIS

Walmart’s New Credit Cards Have One Big Goal: Boost E-Commerce (Bloomberg), Rated: A

In a sign of how much Walmart Inc. is betting on e-commerce, the retailer’s revamped credit-card program with Capital One Financial Corp. offers better rewards for online shopping and checking out with its mobile app.

The new options, which become available Sept. 24 and use Mastercard Inc.’s network, offer 5% cash back for purchases made at Walmart’s website, including groceries. At the chain’s physical stores, shoppers only get that rate for a year and have to check out with Walmart Pay at the cashier. Otherwise, store customers get 2% back.

Finicity Releases New Verification of Income and Employment Solution for Lenders (PR Web), Rated: B

Finicity, a provider of real-time financial data access and insights, announced today the release of its new Verification of Income and Employment (VOIE) solution using patent-pending TXVerify technology that will speed up borrower verifications and further advance the industry shift toward a fully digital experience.

The Finicity VOIE solution digitally extracts a borrower’s pay statement data from the paystub and then cross-verifies that key data with their income transactions from their financial institutions. Enabled by its TXVerify technology, this detailed vetting process creates a real-time picture of an applicant’s income and employment for fast, accurate reports. The solution does this by leveraging the highest value data – direct from banks – along with a scan, photo or PDF of a borrower’s paystubs. This process significantly shifts the current paradigm from a mostly manual process to one that is fully digital, all while reducing fraud and increasing confidence in the underwriting process.

Sallie Krawcheck: Why ‘don’t buy daily coffee’ is terrible advice (CNBC), Rated: B

“Don’t buy daily coffee” is the go-to financial advice. Co-founder and CEO of Ellevest, Sallie Krawcheck, says that advice is misleading and just enjoy your latte.

Ethereum Development Studio ConsenSys Announces Codefi, A New DeFi Software Suite (Crowdfund Insider), Rated: A

ConsenSys founder Joseph Lubin announced at the Ethereal Tel Aviv press conference (on September 15) that his New York-based venture studio is launching a new product, Codefi, for the emerging decentralized finance (DeFi) ecosystem.

Despite not having invested in emerging DeFi platforms, Lubin described P2P lending systems such as Uniswap and MakerDAO as some of the blockchain industry’s most promising projects.

ApplePie Capital Partners with LSQ Funding on A/R Franchise Financing (Monitor Daily), Rated: B

Online lender ApplePie Capital entered into a new strategic partnership with LSQ Funding Group, a technology-enabled provider of accounts receivable financing for small and mid-sized businesses.

United Kingdom

Funding Circle nears one-year anniversary of London float (P2P Finance News), Rated: AAA

The peer-to-peer business lender began conditional dealings on the London Stock Exchange on 28 September before being officially admitted to the bourse on 3 October. It launched with an offer price of 440p per share, giving the firm a valuation of £1.5bn.

However, its market capitalisation as of 17 September has since dropped to £348.7m, with its shares now trading at just over 100p.

Zopa warns over imitation scam firms (P2P Finance News), Rated: AAA

ZOPA has warned over a growing number of scam operators targeting UK customers using the peer-to-peer lender’s name to dupe investors.

They include: asking customers directly for their Zopa login details; claiming to work with companies investing money in Bitcoin or other cryptocurrencies; or working with companies who would ask them to take out a Zopa loan to fund an investment.

Record numbers of investors and borrowers as cumulative lending hits £11.3bn (P2P Finance News), Rated: AAA

MORE than 150,000 lenders were invested in 321,483 loans facilitated by Peer-to-Peer Finance Association (P2PFA) platforms at the end of the second quarter, which the trade body deemed “a record level of involvement in the sector”.

Funding Circle is the largest P2P lender among the P2PFA platform members, having lent out a cumulative total of £5.4bn as of the end of the second quarter. It is followed by Zopa at £4.5bn, with ThinCats in third place with just over £491m.

£814m of new loans were made in the second quarter, compared to £866m in the first three months of 2019.

Monzo halts cash referrals as it hits three million users (AltFi), Rated: A

Monzo has ended its cash incentivised referral system as the firm continues to grow users at a rapid pace.

Monzo now has passed the 3 million ‘users’ number, hitting the milestone late on yesterday and is now onboarding 55,000 people to Monzo every week.

Transferwise Books Its Third Consecutive Year of Profits (Lendit), Rated: A

European fintech company Transferwise has recorded its third year in a row of profits; the company reported its net profit after tax climbed to £10.3 million in the fiscal year ending March 2019, up 66% from the previous year on revenue of £179 million;

Payment provider Klarna appearing at London Fashion Week has everybody talking (MyLondon), Rated: A

UK fashion Designer Henry Holland decided to take things up a notch in Saturdays catwalk show with a T Shirt design in collaboration with Klarna.

Klarna expands partnership with Mothercare (The Paypers), Rated: B

Klarna and Mothercare have announced an extension to their partnership, which will see Klarna’s Pay later, Pay in 3, and Slice it products available online and in-store across the UK.

OakNorth Bank provides £3.7m loan to Clearview Developments (London Loves Property), Rated: A

OakNorth Bank the UK bank powered by OakNorth has provided a £3.7m loan to Clearview Developments for a new residential development in Royal Tunbridge Wells.

Smarterly and OakNorth Bank partner to offer new Notice Cash ISA range to Smarterly customers (Fintech Finance), Rated: B

The product range includes five Cash ISA Notice accounts, exclusive to Smarterly, ranging from 35 days at 1.05% to one year at 1.25%; Customers will not be able to apply for these products with OakNorth directly;

These five Cash ISAs Notice Accounts are:

  • 35 days – 1.05%
  • Three months – 1.10%
  • Six months – 1.15%
  • Nine months – 1.20%
  • One year – 1.25%
China/Hong Kong

Coming Soon: ‘Social Credit’ for Companies, Too (WSJ), Rated: AAA

A key target of China’s coming “social credit” system, which among Westerners usually triggers visions of “1984”-style monitoring of people, is actually misbehaving businesses.

Corporate America needs to prepare.

About 80% of information on the main data-sharing platform relates to companies rather than individuals, according to China consulting…

Hexindai Reports Unaudited First Quarter of Fiscal Year 2020 Financial Results (PR Newswire), Rated: A

First Quarter of Fiscal Year 2020 Operational Highlights

  • Total loan volume facilitated[1] was US$ 28.2 million (RMB192.3 million) during the first quarter of fiscal year 2020, a decrease of 93.5% from the first quarter of fiscal year 2019.
  • Gross billing amount (net of VAT)[2] was US$4.7 million during the first quarter of fiscal year 2020, a decrease of 90.7% from the first quarter of fiscal year 2019.
  • Gross billing ratio (net of VAT)[3] for credit loans was 16.7% during the first quarter of fiscal year 2020, an increase from 11.7% during the first quarter of fiscal year 2019.
  • Number of borrowers[4] was 18,546 during the first quarter of fiscal year 2020, a decrease of 36.0% from the first quarter of fiscal year 2019.
  • Number of investors[5] was 9,534 during the first quarter of fiscal year 2020, a decrease of 85.9% from the first quarter of fiscal year 2019.

First Quarter of Fiscal Year 2020 Unaudited Financial Highlights

  • Net revenue was US$4.9 million during the first quarter of fiscal year 2020, a decrease of 90.5% from the first quarter of fiscal year 2019.
  • Operating costs and expenses were US$12.6 million during the first quarter of fiscal year 2020, a decrease of 18.9% from the first quarter of fiscal year 2019.
  • Net loss was US$7.2 million during the first quarter of fiscal year 2020, compared to net income of US$29.7 million in first quarter of fiscal year 2019.
  • Basic loss per ordinary shares in the first quarter of fiscal year 2020 was US$0.15, compared to basic earnings per ordinary shares (“EPS”) of US$0.62 in first quarter of fiscal year 2019.
  • Diluted loss per ordinary shares in the first quarter of fiscal year 2020 was US$0.15, compared to diluted EPS of US$0.56 in first quarter of fiscal year 2019.
  • Adjusted net loss attributable to Hexindai Inc.’s shareholders (Non-GAAP) in the first quarter of fiscal year 2020 was US$7.0 million, compared to adjusted net income attributable to Hexindai Inc.’s shareholders (Non-GAAP) of US$29.9 million in the first quarter of fiscal year 2019.
  • Adjusted EBIT (Non-GAAP) in the first quarter of fiscal year 2020 was (US$5.8) million, compared to US$36.6 million in the first quarter of fiscal year 2019.

Zhang Yue, senior vice president at CreditEase, discusses the demand for credit in China, write downs in her portfolio, P2P lending, their wealth management business and their expansion plans.

Securing privacy concerns in FinTech in Hong Kong (Lexology), Rated: A

Hong Kong has built a strong environment for fostering innovation and financial technology or FinTech. With its large financial sector and its strategic role with Mainland China and gateway to the rest of Asia and the world, Hong Kong has the potential to take on an important role in being a leader in FinTech. In March 2019, for example, Hong Kong issued its first virtual banking licences, which will likely increase adoption of FinTech in the financial services sector.

Emerging technologies used in Fintech services and operations come in different forms, and include:

  • data analytics that support the operations of financial institutions (for example, credit scoring, loan processing);
  • peer-to-peer (P2P) financing (such as P2P lending and crowdfunding platforms);
  • distributed ledger technology, such as cryptocurrency, bitcoin transactions and smart contract applications, as well as blockchain services to help reduce fraud by keeping provenance data on the blockchain; and
  • financial investments, such as stock trading apps, robo-advisors and algorithmic trading and budgeting apps.
European Union

Binance Announces Phase Five of Crypto Lending Featuring Privacy Coins XMR, ZEC, and DASH (Crypto-Economy), Rated: AAA

Leading cryptocurrency exchange Binance has announced its launch of the fifth phase of its cryptocurrency lending product in which it customers subscribe to an allocation to lend other users their funds for interest rates as high as 15% Apr.

the 15% interest rate was only available to Binance’s native coin lenders in the first phase. On Tuesday, the exchange revealed three coins that will be included in the crypto lending product including only privacy-centric coins Monero [XMR], Zcash [ZEC] and Dash [DASH]. Their annualized interest rates will be a constant 3.5% but the lending period is only two weeks starting from this Friday September 20th through October 4th.

P2P Lender creditshelf to Acquire SME Finance Provider Valendo (Crowdfund Insider), Rated: A

creditshelf Aktiengesellschaft has signed a purchase agreement for the acquisition of all shares in Valendo – part of the finleap Fintech ecosystem.

According to a company release, the purchase price was in the “low seven-digit amount.” Payment will take place in two separate tranches. creditshelf has the option of settling both tranches in the course of two capital increases via a contribution in kind.

International

How MAS propelled Singapore to the top of the class (Euromoney), Rated: AAA

Today, Singapore sits proudly atop the Euromoney Country Risk (ECR) rankings. Based on ECR’s blend of financial and economic data, combined with the views of leading economists, no country in the world today has a stronger financial position.

When MAS said in July 2019 that it planned to issue five new digital banking licences, analysts soon spotted that three of them were wholesale licences, open to banks and non-banks alike.

Winners will be encouraged to lend, using digital means, to small and medium-sized enterprises and other non-retail segments – further evidence that corporate banking will be the next segment to feel the hot breath of disruption on its neck.

Source: Euromoney County Risk

Goldman Leads Trulioo’s $ 70M Raise To Expand Global Digital ID (PYMNTS), Rated: A

Trulioo, the global identity verification provider, has raised $70 million in new funding, eyeing growth in its core digital identification efforts, the company announced Tuesday (Sept. 17).

The company said in a release that the funding includes $60 million in a Series C round that was led by Goldman Sachs Growth Equity. Other participants included Citi VenturesSantander InnoVentures and existing investor American Express Ventures. The remaining $10 million came as unannounced follow-on financing from early investors, including BDC Capital and Blumberg Capital.

Equifax Continues Leadership In Alternative Data With Worldwide Urjanet Partnership (PR Newswire), Rated: A

Equifax Inc. (NYSE: EFX) and Urjanet today announced a global partnership that empowers consumers and businesses to share their payment data from thousands of utility, telecom and cable providers worldwide for a more complete picture of individual payment history, easier identity verification and the potential for better access to credit. This partnership builds on Equifax’s leadership in alternative data, using the Urjanet Utility Data Platform to incorporate consumer-permissioned data into the Equifax differentiated data approach.

5 Reasons Investors Should Consider Tokenized Assets (Benzinga), Rated: A

According to Deloitte, we shouldn’t view DLT as just a new type of “database ” but rather as a new way to organize the security value chain from issuance to custody. But what exactly can be transmitted through this chain?

Fractional ownership – take as much as you want

Digitizing shares makes them highly divisible, meaning that investors can buy very small percentages of tokenized assets.

So long, intermediaries! 

Security tokens have a simpler investment structure and lower fees.

On the way to maximum liquidity

Cherry on top

A security token is basically a digital signature connected with a smart contract responsible for facilitation and verification of ownership rights transactions.

India

Ribbit leads Series B funding in online investment platform Groww (VC Circle), Rated: AAA

Groww, an online investment platform that sells mutual fund products, has raised $21.4 million (Rs 152.5 crore at current exchange rate) in a Series B funding round led by Silicon Valley-based venture capital firm Ribbit Capital.

Groww said existing investors Sequoia India and Y Combinator also participated in the funding round.

RBI looking at how NBFCs, HFCs set their lending rates (livemint), Rated: AAA

The Reserve Bank of India (RBI) is studying how non-bank lenders and home financiers price their loans, close on the heels of directing commercial banks to link their loan rates to external benchmarks.

Source: livemint

RBI restricts access to credit data of consumers (Economic Times), Rated: A

The Reserve Bank of India has ordered commercial banks and non-banking lenders to stop providing unregulated entities access to consumer data held by credit bureaus, dealing a blow to scores of fintech startups that have based their business models on such information.

Source: India Times

RBI not in favour of ‘teaser’ loans, examines rate-setting mechanism of NBFCs, HFCs (CNBCTV18), Rated: B

The banking regulator is not in favour of hybrid loan products or ‘teaser loans’, a senior Reserve Bank of India (RBI) official today clarified. The remark gains significance in the light of State Bank of India chairman Rajnish Kumar’s recent comment that SBI would seek the regulator’s view on whether banks can introduce fixed-cum-floating rate products.

No dearth of demand on credit side, disbursed credit worth INR 5 billion: Flexiloans Co-founder (IBS Intelligence), Rated: A

FlexiLoans.com, an online lender for MSMEs in India, said that it has crossed a milestone number of disbursing over INR 5 billion of unsecured business loans across the country with its unique digital-only model. The Mumbai-based company, which has disbursed over 16000 loans across 1000 cities and towns in the country, says that there is no dearth of demand on the credit side. The company caters primarily to micro, small and medium-sized businesses.

How has the online lending market shaped up in the last few years?

Digital Lending market is currently at about USD 2 billion, up from about USD 1 billion in 2016. Significant traction and market niches discovered by various FinTech startups across the country have made this space very exciting, holistic and game-changing.

Online SME lender Cash Suvidha plans to raise upto $ 10 million (IBS Intelligence), Rated: B

The online lender for business and personal loans, Cash Suvidha, is planning to raise $5 million -$10 million equity funds in the next six months.

Asia

Terafunding Closes US$ 18M Series B Financing Round (FINSMES), Rated: AAA

Terafunding, a Seoul, South Korea-based Peer-to-Peer (P2P) lending platform, raised US$18M in Series B funding.

Backers included KB Investment, Hana Ventures, IBK Industrial Bank and Woomi Construction.

Julo raises $ 10M to expand its P2P lending platform (TechCrunch), Rated: A

Julo, a peer-to-peer lending platform in Indonesia, said on Wednesday it has extended its $5 million Series A raise to $15 million as it looks to scale its business in the key Southeast Asian market.

The $10 million Series A2 round for the Jakarta-headquartered startup was led by Quona Capital,  with Skystar, East Ventures,  Provident, Gobi Partners and Convergence participating.

Chinese P2P Firms Seeks Business in Vietnamese Market (W7 News), Rated: A

The declining demand for peer-to-peer (P2P) lending in China has prompted firms to find business elsewhere. LearnBonds report that Chinese P2P companies are eyeing Vietnam, which alarmed local lending companies.

MENA

Now Money offers alternative for Gulf’s unbanked expats (Financial Times), Rated: AAA

About 70 per cent of the population in the Middle East and north Africa do not have access to banking services, says Ian Dillon, co-founder of Now Money, a Dubai-based financial technology group.

The GCC recorded outbound remittances of $120bn in 2017, according to World Bank data. However, Gulf banks tend to exclude workers earning less than $1,400 a month, leaving most of them reliant on exchange houses to remit cash home.

Authors:

George Popescu
Allen Taylor

The post Thursday September 19 2019, Weekly News Digest appeared first on Lending Times.

Thursday April 11 2019, Weekly News Digest

china p2p lending

News Comments Today’s main news: Lending Club loans $159M in the past week. OnDeck offers same-day funding. Kabbage secures $700M in funding. RateSetter ISA passes 200M GBP in subscriptions. Funding Circle CEO pocketed 4M GBP last year. Klarna launches global customer authentication platform. Today’s main analysis: Drivers of global growth in FSB’s shadow banking. (A […]

The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

china p2p lending

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

Need a loan for Tax Day? According to Lending Club data, you’re not aloan… er, alone (Thinknum), Rated: AAA

As seen in data from Lending Club ($NYSE:LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.

RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.

Lending Club Total Principal Loaned (Weekly)

ONDECK OFFERS SAME DAY FUNDING TO EMPOWER SMALL BUSINESS (OnDeck), Rated: AAA

OnDeck today announced that it will offer to fund and debit customer bank accounts with Same Day ACH transfers, eliminating a decades long pain point for small business owners accustomed to the traditional ACH transfer process, which can take multiple days and lacks certainty on when the transactions will hit bank accounts.

Same Day ACH transfers from OnDeck provide qualified OnDeck Term Loan and Line of Credit customers with funds up to the National Automated Clearing House Association (NACHA) cap of $25,000 by 5:00 pm local time on the same business day the customer books or makes a draw on their line of credit.* Qualified customers are also debited via the same day ACH service, providing them additional predictability in transaction clearing times and offering better clarity around day-to-day cash flow management.

Highlights from Jamie Dimon’s Annual Letter (PeerIQ), Rated: AAA

US payrolls rose by 196 k in March and the unemployment rate remained at 3.8%.

Source: Bloomberg, PeerIQ

Highlights from Jamie Dimon’s Letter to Shareholders

Jamie Dimon published his annual letter to shareholders. We look at some highlights below:

  • The banking system, and JPM in particular, is over-capitalized – Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks.
Source: JPM, PeerIQ

PM is investing billions in technology to compete – the cloud, AI, ML and digital banking

  • JPM customers can now open a bank account online in under 5 minutes and can reduce their mortgage closing times to 3 weeks.
  • The bank now has 49 Mn active digital customers, including 33 Mn active mobile customers
  • JPM is looking at fintechs in the US and in China as not just opportunities but also looming competition.

Online lender Kabbage rakes in 0m funding (Verdict), Rated: AAA

Kabbage, an online lender for small businesses, has fetched $700m in asset-backed securitisation (ABS) funding.

With the securitisation, the company’s debt funding increases to $940m.

Real-time data was Kabbage’s secret sauce, its first investor says (American Banker), Rated: A

The firm started life as a small, scrappy fintech startup in Atlanta in 2008, but has grown rapidly. It made $2 billion worth of loans in 2018 and more than $600 million in the first quarter of 2019. It also recently agreed to provide financing at the point of sale on Alibaba.com as part of a program called Pay Later.

Upstart Raises $ 50 Million and Announces New Bank Partners (Lend Academy), Rated: A

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

PeerStreet Lowers Minimum Real Estate Investment to $ 100 (Think Reality), Rated: A

The burgeoning peer-to-peer lending platform PeerStreet has unveiled product updates that enable investments of only $100.

The company recently announced it’s lowered the minimum investment to $100 for “small balance reinvestments” when using its automated investing product. The upgrade also expands the investment types available for automated investing to include cash offer loans and 30-day notes, which offer shorter terms than typical bridge loan investment options, the company said.

Sharestates Wins Top Real Estate Platform Award at LendIt Fintech USA 2019 (PR Newswire), Rated: A

Sharestates, a marketplace lending platform that connects real estate developers with investors, was crowned Top Real Estate Platform at LendIt Fintech USA2019 in San Francisco, California on April 9, 2019. The Top Real Estate Platform award is based on performance, volume, growth, product diversity, and responsiveness to stakeholders.

Now operating in 46 states, Sharestates offers diversified asset classes including residential, multi-family, mixed-use, commercial properties, and land acquisitions.

Since launching in 2015, Sharestates has closed on over $1.7 billion in total loan volume and returned over $675 million in principal to investors. Average annualized returns have exceeded 10% every year. As a result of its strong performance and valued relationships, 82% of Sharestates loan volume has come from repeat borrowers and 81% of its investors are repeat investors.

The stREITwise Platform Brings Real Estate Investment to All (Realty Biz News), Rated: B

The company has just announced a new acquisition to its investment portfolio, a $32 million mixed-use building in Carmel, Indiana, one of the most affluent suburbs of Indianapolis. The 140,000-square foot Allied Solutions Building, already around 87 percent leased, stands poised to increase dramatically in value thanks to its location in the heart of downtown Carmel in the heart of a busy mixed-use development surrounded by restaurants, coffee shops, fast-casual dining, service-oriented retail, and the locally renownedSun King distillery and food hall right next door.

13 cities where renting is cheaper than buying a home (AOL), Rated: A

Americans’ homeownership rate is 64.8%, according to the latest U.S. Census data.

Following are the 13 metros where renting is cheaper by more than $150 a month, beginning with cities with a smaller advantage for renters.

BlueVine Adds Term Loan to Suite of Online Working Capital Solutions to Fuel Small Business Growth (GlobeNewswire), Rated: A

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced that it is making term loan financing available for business owners through its suite of online financing solutions. The BlueVine Term Loan provides small- and medium-sized business owners with fast and simple access to financing to grow their businesses through BlueVine’s advanced online platform. More than 59 percent of businesses are looking for funds to grow their business, according to the 2017 Federal Reserve Small Business Credit Survey Report on Employer Firms. With a BlueVine Term Loan, business owners can quickly pursue larger projects and investments to bring their businesses to new heights.

Aura Approves 350,000th Affordable Loan (Bakersfield.com), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, this week approved its 350,000 th loan.

Since its launch in 2014, Aura has provided more than $437 million in credit-building loans to borrowers at approximately 1,200 partner locations using technology that enables local businesses to administer loan applications. Currently, Aura’s average loan size is around $1,600.

In total, Aura has raised over $403 million in social bonds across 21 bond issuances. The most recent issuance was in March for $50 million.

What Kind of Collateral Do I Need for a Business Loan? (Nav), Rated: A

Before you can qualify for a commercial loan, you’ll need to prove that doing business with your company is a good risk. This means you’ll need to pass successfully through a lender’s qualification process.

Next Wave of Personal Loan Growth May be Driven by Prime and Above Consumers (MarketWatch), Rated: A

The prime and above risk tiers have become a greater focus for lenders in recent years. Nearly two-thirds of unsecured personal loan balances originated in the first three quarters of 2018 were lent to prime and above consumers. FinTechs drove this shift as originations for prime and above grew to 62% in 2018, up from 52% in 2013. While still less conservative than banks, FinTechs’ overall risk profile for originations now aligns tightly with credit unions. At the end of 2018, FinTechs held the majority share of personal loan balances with 39%, while banks and credit unions followed with 28% and 21%, respectively.

Student Debt Isn’t Just An Employee Problem — It’s Also An Employer Problem (Killer Startups), Rated: A

The Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit for the fourth quarter of 2018 that outstanding student loan debt increased to $1.46 trillion, which is $15 billion more than the previous quarter. It also reported that student loan debt rose by $79 billion in 2018.

The student debt load isn’t just impacting the individual students who enter the workforce, hoping they can find a job that enables them to make those monthly payments. I’s also slowing economic growth. A January 2019 Federal Reserve paper noted that young adults report their student loan debt is the reason they’re unable to buy a home. The same report also cited other research concluding that 20 percent of the decline in homeownership among young adults relates to student loan debt that’s been rising since 2005.

Amount Announces Cloud-Based Account Verification Platform (Kake), Rated: A

Amount today announced AmountVerify, a cloud-based platform for risk management across financial products. AmountVerify marks the first time industry leading fintech provider Avant is making a component of its cutting edge online lending platform available to financial service companies as a standalone product through Amount.

Onfido raises $ 50M to create the Identity Verification Standard for Businesses Globally (Markets Insider), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M. The round was led by SBI Investment and Salesforce Ventures, with support from M12 (formerly Microsoft Ventures), FinVC and others, including existing investors.

Forward Financing Expands Capital Base with $ 90 Million Credit Facility (Yahoo! Finance), Rated: A

Forward Financing has closed on a $90 million credit facility, consisting of a $60 million senior revolving credit facility and a $30 million junior term loan. AloStar Capital Finance (“AloStar”), a division of Cadence Bank, N.A., served as the Agent on the senior facility.

Credibly Announces Investment Grade Senior Debt Offering (Yahoo! Finance), Rated: A

Today, Credibly announces the next phase in its balance sheet growth strategy with a $10 million Investment Grade-rated senior debt offering. The transaction closed on March 28, 2019.

Mitek Expands Auto-Capture User Experience Across All Digital Channels with the Addition of Desktop (GlobeNewswire), Rated: A

Mitek today announced it has upgraded its desktop browser experience to support auto-capture so customers can rapidly verify the identity of applicants across all digital channels: desktop browsers, mobile web and native applications.

According to Javelin Research, today only one third of users (34 percent) still complete the entire account opening process on their desktop.

MiSnap delivers a superior auto-capture experience for desktop and across mobile devices through:

  • Guided commands:  Real-time commands such as where to place a document in relation to the camera or detection of glare on the ID document are some of the conditions evaluated in order to help the user capture an optimal image, which improves image acceptance rates and reduces capture retries.
  • Advanced image analysis: Once MiSnap has achieved an optimal capture of the ID document, the software then further analyzes the image and makes the necessary adjustments in order to process all images consistently and accurately.
  • Modern architecture: Because MiSnap uses WebAssembly, it can perform at native speeds and is easy to integrate into customers’ web-based apps and requires minimal footprint.

58% of lenders will use AI in next two years (AI Foundry Email), Rated: A

Fannie Mae recently put out a 

  • Nearly two-thirds of lenders are familiar with AI
  • But, only 27% are using it in their businesses now, and…
  • Only half of that group are currently using it with customers (the rest are doing trials)
  • However, looking ahead two years – 58% of lenders expect to use AI/ML in their mortgage business.
  • Of the rest:
      • 22% predict they’ll be investigating AI
      • 19% foresee being in a “wait and see” mode

    These data points show us that “prime time” is coming soon for AI/ML in mortgages. 

    Fintech alone won’t be enough to boost credit union mortgage volumes (Credit Union Journal), Rated: A

    How can credit unions, especially small institutions, compete with Quicken Loans’ Rocket Mortgage “Push button, get mortgage” campaign?

    They can’t – and, sources said, they shouldn’t try.

    GROUNDFLOOR Wins 2 FinTech Awards (Groundfloor Email), Rated: B

    GROUNDFLOOR was named Best Crowdfunding Platform by the 

    Pulte Mortgage and Finicity Partner to Combat the Home Loan Paper Chase (MarketWatch), Rated: B

    Pulte Mortgage announced today it is partnering with Finicity — a leading provider of real-time financial data access and insights, to provide its borrowers with a faster, simpler and more secure way to navigate the home financing process.

    Hudson Data and LendingPoint partner to prevent Synthetic ID fraud (Finanzen), Rated: B

    Hudson Data and LendingPoint announced that they are partnering to create an industry solution to prevent synthetic identity fraud using powerful graph machine learning.

    Dharma crypto lending platform officially goes live (CoinGeek), Rated: B

    Dharma Labs completed a Series A funding round earlier this year to support its cryptocurrency lending platform project. The San Francisco-based company raised $7 million from companies such as Polychain Capital, Coinbase Ventures and others and, if there was any concern about the platform not going live, those concerns are now extinguished. Dharma announced this past Monday in a Medium post that the platform is now live.

    United Kingdom

    RateSetter ISA Milestone: Passes £200 Million in Subscriptions (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender RateSetter recently announced its ISA has now passed the milestone of attracting £200 million in subscriptions.

    “Investors have enjoyed an average annualised return of 4.5%, tax-free of course, since the RateSetter ISA launched in February 2018. The average RateSetter ISA balance stands at £11,000.”

    Funding Circle boss pocketed more than £4m last year (P2P Finance News), Rated: AAA

    FUNDING Circle founder Samir Desai (pictured) earned more than £4m last year, having cashed in some of his shares at the time of the peer-to-peer lender’s stock market flotation.

    Desai took home a salary of £210,000 last year, according to Funding Circle’s annual report, a four per cent increase from his salary of £202,000 in 2017.

    The majority of his total remuneration of £4.081m came from cashing in share options.

    Zopa rewrites outdated money idioms (The London Economic), Rated: AAA

    Each future-looking idiom challenges the status quo. For example, according to Zopa, the ‘signing for the bill’ gesture will be redundant soon. Instead, when people have finished their meal, people will be more likely to signal facial or iris recognition to the waiter. Jonesy gives his take and takes it one step further by illustrating a customer displaying his eyeball to request the bill.

    Source: The London Economic

    Fintech unicorns are leading job creation in London (Business Insider), Rated: AAA

    In 2018, there was a 61% increase in fintech job creation within London from the previous year, per a new report by Robert Walters, making it the fastest growing sector for vacancies in the city.

    The UK houses 25% of all fintech unicorns and their growth plans call for more talent. There are 29 fintech unicorns worldwide, seven of which are based in the UK, making the UK second only to San Francisco, which is home to nine.

    Over 30% of jobs in the UK’s fintech industry are for IT-related roles, compared with 24% in 2017. And fintech unicorns’ hiring for IT professionals increased 74% year-over-year (YoY).

    Source: Business Insider

    London to take San Francisco’s fintech unicorn crown (The Innovation Enterprise), Rated: A

    However, the report has predicted that London could take the lead as early as this year, as the city receives 39% of European fintech venture capital funding, with the runner-up, Berlin, taking just 21% of the total investment.

    With 50% against a global average of 33%, the UK also enjoys the highest rate of consumer fintech adoption of any Western country, only beaten by India and China, the report found.

    LendInvest gains £200m HSBC funding as it seeks home loan market entry (Verdict), Rated: A

    LendInvest, which operates an online marketplace for mortgages, has received an investment of £200m ($261m) from HSBC UK to support its foray into the regulated home loan sector.

    Peer-to-peer scheme for first-time buyers launches (FT Advisor), Rated: A

    Start-up company Stepladder is promoting a new way for first-time buyers to save for a house deposit.

    Arbuthnot Latham launches Arbuthnot Direct for those seeking long-term interest returns (Arbuthnot Email), Rated: B

    Arbuthnot Latham & Co., Limited (“Arbuthnot Latham”) is pleased to announce the launch of its new platform under the trading name of Arbuthnot Direct. Arbuthnot Direct offers fixed term deposits online, targeting retail customers who are seeking interest returns on their money over the longer term. The platform held a successful soft launch in February 2019 and has already met with a positive reception.

    China

    The rise and fall of P2P lending in China (Finextra), Rated: AAA

    It is worth mentioning that the size of China’s P2P industry is larger than that of the rest of the world combined, with outstanding loans of US$217.96BN.

    China’s online P2P lending industry grew rapidly between 2011 to 2015, with the number of P2P lenders growing from 50 to nearly 3,500 respectively.

    Trouble started brewing in China back in 2016, when statistics released by the Chinese Banking Regulatory Commission showed that about 40% of P2P lending platforms were in fact Ponzi schemes.

    This triggered the shutdown of P2P lending platforms; over 900 closed by the end of 2016. For 2018, only 1,021 providers remained in place.

    Source: Bloomberg News

    Shenzhen police arrest Zhang Wei, calling China Create Capital a ‘mafia-like gang’ (SCMP), Rated: A

    China Create Capital Limited, the investment holding company headed by the 46-year-old Heilongjiang native is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms, the Shenzhen police said in a notice. The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

    The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country’s financial system and capital markets, where 1,129 “mafia-like” syndicates were broken up across 10 provinces last year, with 4.94 billion yuan (US$737 million) of assets seized, according to the police. A number of Chinese oligarchs including Anbang Group’s

    former chairman Wu Xiaohui

    , CEFC Group’s founder Ye Jianming and financier Xiao Jianhua had fallen from grace since 2017.

    $ 60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market (CoinDesk), Rated: A

    These new crypto lenders include such notable names as Bixin Capital, FBG Capital and DGroup, founded by Dong Zhao, who made a name by operating one of the longest-running over-the-counter (OTC) trading desks in China. Along with a startup called Babelbank, these investors have originated a combined $60 million worth of loans over the last five months, denominated in cryptocurrencies or, in one firm’s case, Chinese yuan.

    European Union

    Klarna launches global customer authentication platform (Klarna), Rated: AAA

    Klarna today announced the launch of its global authentication platform — an aggregator with multiple global and local authentication solutions. The platform allows multinational businesses, including merchants and other banks, to provide a simple, secure and personalised customer authentication experience irrespective of market, through a one-time integration.

    Klarna Sees Payments as Evolving From Function to Engagement (WWD), Rated: A

    Klarna’s Hannah Bravo says customers chose brands based on payment options.

    This New Tool Is Helping Retailers Build Consumer Trust During Online Checkouts (Footwear News), Rated: B

    The Klarna platform enables businesses to choose from a range of global and local authentication methods so that they can find one that works best for their customer. Whether using SMS verification or emailed one-time passwords, brands and retailers can verify their customers’ identities with minimal interruption to the consumer’s shopping journey.

    International

    Drivers of Global Growth in FSB’s Shadow Banking (DBRS Email), Rated: AAA

    DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010, according to the FSB. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster.

    Summary highlights of the commentary include:

    • Shadow banking is still growing. This narrow, but rapidly growing, subset of nonbanks had assets of $52 trillion in 2017, up 75% from $30 trillion in 2010.
    • Since 2010, assets of nonbanks are also growing, up 61% to $185 trillion. That is 49% of the $378 trillion in total global assets in all financial institutions at the end of 2017, up significantly from 44% in 2010.
    • The key driver of this growth in nonbank assets is the expansion of OFIs. These OFIs are defined as all financial institutions that are NOT central banks, banks, insurance companies, pension funds, public financial institutions, or financial auxiliaries. Assets at these OFIs grew 71% since 2010 to a record $117 trillion in 2017, or just over 30% of assets in financial institutions globally.
    • By far, the largest segment of shadow banking globally is collective investment vehicles, which are subject to runs. These include fixed income funds, mixed funds, MMFs and hedge funds. Since 2010, this segment has grown by 130% to $36.7 trillion in assets. By contrast, growth in other segments has been less than $1 trillion, or even negative.

    Read the full report here.

    Crypto Lending Platform Salt Adds Support for Dash as Collateral (Crypto-Economy), Rated: A

    Cryptocurrency lending platform Salt will now be allowing its users to collateralize their Dash holdings including their Masternode staking coins to access loan facilities.

    India

    RentoMojo in talks to raise $ 40 million from GMO, others (livemint), Rated: A

    For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.

    Asia

    Housing sector remains major source of complaints: BPKN (The Jakarta Post), Rated: A

    The BPKN received 154 complaints in the first quarter, most originating from the housing sector. BPKN communications and education coordinator Arief Safari said the agency had received 129 complaints on the housing sector in the first quarter, followed by six complaints on online peer-to-peer (P2P) lending, three on banking and the remainder on various sectors, including travel and e-commerce.

    Batumbu to help finance SMEs (The Jakarta Post), Rated: A

    PT Berdayakan Usaha Indonesia has announced that it aims to help small and medium enterprises (SME) access financial capital through a partnership program with its digital platform Batumbu.

    MENA

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

    Thursday February 14 2019, Weekly News Digest

    OnDeck revenues

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

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

    OnDeck revenues

    News Comments

    United States

    United Kingdom

    European Union

    International

    Other

    News Summary

    United States

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

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

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

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

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

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

    Source: Federal Reserve, PeerIQ

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    LoanStreet’s new lending features include:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    LendIt Fintech USA 2019 (LendIt), Rated: B

    April 8-9
    Moscone West
    San Francisco

    HIGHLIGHTED KEYNOTES

    Sallie Krawcheck
    CEO & Co-Founder
    Ellevest

    Rob Frohwein
    CEO & Co-Founder
    Kabbage

    Steven Streit
    CEO
    Green Dot

    Mike Cagney
    Co-Founder
    Figure

    United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Learn more about 4th Way here.

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

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

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

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

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

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

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

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

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

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

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

    European Union

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

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

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

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

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

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

    It issued new loans totaling €551 million last year.

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

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

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

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

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

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

    International

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

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

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

    As Bloomberg reported last year:

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

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

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

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

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

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

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

    Australia

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

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

    Zip Co. (ASX: Z1P)

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

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

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

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

    India

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

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

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

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

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

    Asia

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

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

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

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

    Canada

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

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

    Authors:

    George Popescu
    Allen Taylor

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

    Thursday October 25 2018, Daily News Digest

    Funding Circle Holdings PLC

    News Comments Today’s main news: SoFi CEO explains how market volatility, rising interest rates create opportunities. Amazon debuts no-fee AmEx card for small businesses. Funding Circle broker channel hits 1B GBP lending. China Rapid Finance is expected to break even. Today’s main analysis: Funding Circle’s short-lived rally. Today’s thought-provoking articles: Is student loan debt creating a millennial class […]

    Funding Circle Holdings PLC

    News Comments

    United States

    United Kingdom

    European Union

    International

    Other

    News Summary

    United States

    SoFi CEO Anthony Noto: Market volatility, rising rates create ‘opportunity for us’ (CNBC) Rated: A

    Rising interest rates and market volatility, while feared on the Street, create an opportunity for online lending platform SoFi to gain new customers, according to CEO Anthony Noto.

    “When the markets pull back, people evaluate: ‘Where am I putting my money from an investment standpoint?'” Noto said on CNBC’s “Closing Bell” on Tuesday.

    Made conscious decision to focus on quality, not quantity of loans: SoFi CEO Anthony Noto from CNBC.

    Amazon Debuts No-Fee AmEx Card to Lure Small-Business Spending (Bloomberg) Rated: AAA

    Amazon.com Inc. and American Express Co. are upping the ante in their bid for small-business spending.

    The two companies unveiled a new co-branded card for small businesses on Tuesday. Cardholders with an Amazon Prime membership will be able to choose between an interest-free loan for 90 days or 5 percent back on purchases made at Amazon.com, Amazon Business, Amazon Web Services and Whole Foods Market, the companies said in a statement. The no-fee metal card will also offer 2 percent back on purchases at U.S. restaurants and gas stations and on mobile-phone services.

    Student-Loan Debt Is Bringing on Millennial Class War (Vice) Rated: AAA

    MagnifyMoney, an independent service that compares financial products and is affiliated with the loan marketplace LendingTree, recently analyzed 2016 data from the Federal Reserve and estimated the average millennial with student debt had 75 percent less net worth than their debt-free peers. Though many of the stats they calculated might have been skewed by extremes—think people with debt loads of $200,000 and trust-fund kids worth seven figures—they were able to reach some pretty startling conclusions. For instance, the median net bank account balance (checking and savings) of all grads under 35 who had loans, they found, was $5,500, while it was some $10,180 for those who didn’t.

    So what’s the most meaningful difference between those with loans and without?
    The one that’s really most costly is when you look at the retirement savings. On that side, the average grad under 35 with debt has around $21,000 in retirement savings. Someone who doesn’t have student loans has an average of almost $40,000.

    Credit Card Stats & Studies (Hub Wallet) Rated: AAA

    Source: Hub Wallet

    Building Loyalty with Gen Z and Millennials Starts with a Better Experience (Globe Newswire) Rated: AAA

    In particular, changes in the credit card market have been heavily influenced by the youngest generations. While TransUnion studies have found that consumers generally have a much higher propensity of opening their next credit product with a lender with whom they already have multiple relationships, this doesn’t appear to hold true for Gen Z. Younger consumers are engaging with new lenders rather than going to existing lenders for new products. In the report, Gen Z respondents indicated that they were the least likely to open a new credit product with a financial institution as a result of an existing relationship with that lender.

    While consumers are carrying more credit cards in their wallets today than in 2010, the industry has seen five straight quarters of declining year-over-year origination growth. The study also found that the average duration for which a credit card remains open has shortened across the majority of age groups, which would indicate shifting loyalty.

    Source: Trans Union

    The Fintech 250: The Top Fintech Startups Of 2018 (CB Insights) Rated: AAA

    The financial services industry is being transformed by insurgent startups. From capital markets to insurance and digital banking to wealth management, the Fintech 250 are among the most promising of these companies globally.

    The entire 

    Lendio Named to the 2018 CB Insights Fintech 250 List of Fastest-Growing Fintech Startups (PR Newswire) Rated: A

    CB Insights today named Lendio to the second annual Fintech 250 list, a prestigious group of emerging private companies working on groundbreaking financial technology.

    “It’s an honor for Lendio to be listed among the innovative companies driving the fintech industry forward,” said Brock Blake, Lendio CEO and founder. “Lendio is doing its part to power the economy by bridging the financing gap for small businesses. We are committed to shaping the future of marketplace lending to help business owners unlock their financial potential.”

    Lendio, the nation’s leading marketplace for small business loans, recently announced it has facilitated over $1 billion in financing to more than 51,000 small businesses across the U.S. Through access to this growth capital, Lendio’s small business customers have generated an estimated $3.8 billion in gross economic output and created more than 25,000 jobs nationwide. Lendio’s milestone comes after an 80 percent increase in loans funded through its platform in the last year.

    As Rates Rise and Recession Threatens, Alternative Lenders Batten Down the Hatches (Bank Innovation) Rated: A

    The CEOs of Prosper Marketplace, Lending Club, and Social Finance Inc. all spoke to a common theme – preparing for the coming storm and choosing loans for quality, not quantity. JPMorgan Chase has predicted a 60% chance of recession by 2020, and it’s not clear how traumatic an event it will be.

    JPMorgan signed a deal with Plaid for customer data sharing (Business Insider) Rated: A

    JPMorgan on Monday signed an agreement with Plaid, a technology company that connects bank accounts with fintech apps like Robinhood, Venmo, and Acorns, that will give its customers better control over their personal data.

    Plaid will access JPMorgan’s customer data through a secure application programming interface or API, allowing customers to share their financial information more easily and safely. Banks including JPMorgan have pushed back against so-called screen scraping, another way for fintech apps to companies to access customer data that generally is viewed as less secure.

    Goldman shifts Marcus digital bank to its wealth unit (American Banker) Rated: A

    Goldman Sachs Group is shifting a heavily touted business line into its wealth management unit as the bank eyes expansion through products that can be pitched to the division’s customers.

    The firm is handing oversight of the Marcus business — its retail-banking effort, which offers personal loans online — to its $1.5 trillion investment management division, according to a memo seen by Bloomberg. The move is aimed at starting new business offerings under the Marcus brand that can be sold to the unit’s expanding roster of clients.

    A spokesman for Goldman Sachs confirmed the contents of the memo.

    U.S. ‘Unbanked’ Population Continues to Fall (Wall Street Journal) Rated: A

    The number of U.S. households without a bank account fell to 6.5% in 2017, according to a federal government survey, as the improved economy helped bring mainstream banking services to more people.

    The Federal Deposit Insurance Corp. said Tuesday the number of ”unbanked” households reached its lowest level last year since the regulator began the biennial survey in 2009. The share of households without an account at a federally insured financial institution was down half a percentage point from 7% in 2015.

    We’re Closer Than you Think to Autonomous Finance (Lend Academy) Rated: A

    Autonomous finance isn’t a well known term within fintech, but it may be the biggest innovation in the consumer finance space in recent years. Ken Lin, the CEO and Co-Founder of Credit Karma talked with us recently on the Lend Academy podcast about this concept of autonomous finance, a concept that is slowly turning into reality.

    Credit Karma is in the unique position to capitalize on this idea, particularly when it comes to the lending business, which still relies heavily on credit scores. The company has built a platform in which users can track their credit score over time and get suggestions on products based on their financial life. From my perspective Credit Karma has a monopoly of sorts on this business with no other serious competitors at scale. Due to their sheer size and the engagement with their members, Credit Karma is a significant lead generator for the major online lenders that exist today.

    New UltraFICO score stokes concerns about data privacy (American Banker) Rated: A

    A new credit score that includes a consumer’s cash flow alongside their credit score — dubbed UltraFICO — is winning praise for its potential to help expand access to credit but also stoking concerns about its data privacy implications.

    FICO announced this week that it is testing a new credit score with Experian and data aggregator Finicity that draws on several months’ worth of data from consumers’ bank accounts. The idea, according to FICO, is to create a “second chance” score that could allow consumers who’ve been denied credit due to the traditional model another shot at obtaining it.

    Short on Cash? Use Your Employer as a ‘Payday Lender’ (Nerd Wallet) Rated: A

    In recent years, startups from Silicon Valley and beyond have stepped up to offer payday alternatives through the workplace. Some, including Earnin and PayActiv, have put a new twist on the two-week pay cycle to give people access to their wages as soon as they’ve earned them. Others, such as HoneyBee, SalaryFinance and TrueConnect, allow employers to offer low-cost emergency loans as an employee benefit.

    Paycheck advances in the modern workplace

    What technology companies like Earnin and PayActiv say they offer is a streamlined approach for employees that retains the employer’s traditional two-week pay cycle.

    Navient eyes end of non-compete with Sallie Mae in January (Asset Securitization Report) Rated: A

    Navient Corp. has been ramping up origination of refinance student loans even as rising interest rates reduce the potential savings for borrowers. Earnest, the online lender it acquired late in 2017, originated $903 million of refinance loans in the third quarter, bringing year-to-date originations $2 billion. But so far, the servicing giant’s ability to expand has been limited because of a non-compete agreement with the largest private student-lender, SLM Corp., better known as Sallie Mae.

    Under the terms of their split in 2014, Navient is unable to refinance either private student loans made by Sallie Mae or any federally guaranteed student loans held by Sallie Mae.

    The non-compete clause expires in January, and Navient CEO Jack Remondi doesn’t plan to waste any time. On a third quarter conference call Wednesday, Remondi made it clear that he sees plenty of potential to refinance loans made or held by Sallie Mae.

    Kabbage Extends Access Of Small Business Lending (Benzinga) Rated: A

    Kabbage is now lending over $10 million per day to small businesses, in congruence with the company’s recent addition of 30,000 customers in 2018. The company reported its first $500 million quarter this year, according to the press release.

    The lender serves up to 1,400 businesses daily and has demonstrated a 68 percent increase of working capital accessed by Kabbage on mobile devices, as well as a 283 percent growth in use of the Kabbage Card since 2017.

    “It was a great growth quarter for the company, and is a direct result of developing flexible and convenient solutions that simplify accessing capital for small businesses,” Kabbage CFO Scott Rosenberg told Benzinga.

    Beyond Kickstarter: 10 Niche Crowdfunding Platforms for Startups (Entrepreneur) Rated: A

    1. CrowdStreet

    If you’re building a real-estate investment business — or developing real-estate projects — check out the online crowdfunding opportunities on CrowdStreet.

    4. FundThatFlip

    If your business is remodeling and reselling homes, FundThatFlip offers a place to get quick cash to fix up and resell. Investors put in a minimum of $5,000.

    Guaranteed Rate Ranks as the Best Mortgage Lender for Online Mortgage Service by U.S. News & World Report (Bankless Times) Rated: A

    Guaranteed Rate, an industry leader in technological innovation, tops the list of the Best Mortgage Lenders of 2018, according to U.S. News and World Report. The Chicago-based retail mortgage lender was named the Best Lender for Online Service with its groundbreaking advances to make the mortgage experience fast, simple and secure with its digital platform.

    US News & World Report recommended the Guaranteed Rate mortgage process as best for borrowers who:

    • Want to complete most of the mortgage process online
    • Want help figuring out the right product for their situation
    • Want access to a variety of home loan options

    Bought Mega Millions Tickets? Here’s What You Could Have Made If You Invested That Money Instead (Time) Rated: A

    Americans spend a lot of money playing the lottery. Approximately 370 million lottery tickets were sold between Saturday and Tuesday before the Mega Millions drawing, according to a lottery official. The U.S. generated nearly $73 billion in lottery sales in 2016 and CNN reports that in 2017, U.S. residents spent about $73.5 billion on tickets. The average American spends about $223.04 per year on lottery tickets, loan marketplace LendEDU found in a report that calculated its average by dividing the 2016 lottery revenue by the U.S. population (325.7 million).

    Milwaukee, Cincinnati and Minneapolis Are the Most Promising Places to Open a Restaurant (PR Newswire) Rated: A

    LendingTree, the nation’s leading online loan marketplace, today released its study on the best cities to open a restaurant. The study found that while traditional foodie destinations like New York and San Francisco are saturated with restaurants, up-and-comers have room to grow. The restaurant population in cities like MilwaukeeCincinnati and Minneapolis cities is less dense than in other areas, and labor costs are lower.

    LendingTree analyzed the 50 largest U.S. cities to see which offer prospective restaurateurs the best shot at success. Many top spots are in once-overlooked Midwestern cities now experiencing urban renewal. The least promising cities have historically been the restaurant industry’s most competitive.

    Nav and Clover Partnership Streamlines Access to Business Credit Scores & Financing (PR Newswire) Rated: A

    Today, Nav and Clover, a subsidiary of First Data, formally announced an integrated, multi-year partnership to deliver U.S.-based Clover users access to their free business credit scores, as well as custom-tailored business financing and credit card options.

    The Federal Reserve Bank and other surveys consistently report around 70 percent of small business loan applicants are denied by their bank. As credit data is a primary way that banks and other financial institutions evaluate business loan applicants, the integration of business credit scores and insights directly into Clover’s dashboard enables these merchants to manage this important data.

    Memorial Healthcare System Taps ezCarePoint to Provide Instant Online Financing for Patients’ Out-of-Pocket Medical Costs (AP News) Rated: A

    Patients at facilities run by South Florida’s Memorial Healthcare System (MHS), one of the nation’s largest public healthcare systems, can now easily and quickly finance their out-of-pocket medical fees online, thanks to a new program powered by ezCarePoint, a next generation medical financing technology platform created by ezVerify, a Sunrise, Fla. based company and LendingPoint, a Kennesaw, Ga. based company.

    RealtyFolio Updates Its Platform for a Big 2019 (PR Newswire) Rated: B

    RealtyFolio, the online real estate investing platform has updated its interface, including a redesign, rebrand, and upgraded features. The upgrade was meant to “make it even more comfortable for clients to navigate the platform and for clients to be able to invest in real estate projects, quickly and easily,” according to the company’s CEO, Jonathan Klein. He went on to say that they “expect a very big year in 2019, with many projects in the works, and a lot of demand from clients.”

    RealtyFolio is ushering in the future of real estate investing by allowing you to build a real estate portfolio online. With over 30 years of real estate investing and management experience on its team and a vast network of strategic partners across the United States, in cities such as New YorkMiami and Los AngelesRealtyFolio gives everyone a chance to swim with the sharks.

    Tamarack Hires Seven and Expands Headquarters (ELFA) Rated: B

    Tamarack, a leader in providing independent software solutions in the equipment finance and commercial lending industry, has moved to a new headquarters in the North Loop, doubling their space, and added seven new positions over the past three months to meet the growing demand.

    With over 25 years of Leasing and Lending experience and an expert in InfoLease®, Tamarack hires on George Burke. Burke adds extensive experience to Tamarack’s back office software engineering team.

    White Oak ABL Appoints Griffith to Managing Director (ABL Advisor) Rated: B

    White Oak ABL, LLC, an affiliate of White Oak Global Advisors, LLC, announced the appointment of Clark D. Griffith to Managing Director, based in San Francisco. Griffith joins from Encina Business Credit where he held the position of Senior Managing Director in charge of West Coast originations, offering lines of credit and term loans from $5 million to $50 million.

    PNC to offer online business loan option in 2019 (Delaware Business Now) Rated: B

    PNC announced that in 2019 it plans to begin offering fully digital business lines of credit, up to$100,000.

    PNC will partner withOnDeck and use its Platform-as-a-Service to simplify and accelerate the conventional lending originations processes for PNC Bank’s small and medium-sized business customers.

    PNC will combine its expertise with ODX’s online origination technology and professional services to create PNC Small Business Lending.

    TickPick Announces Affirm Partnership, Expands Payment Options at Checkout (PR Newswire) Rated: B

    TickPick, the no-fee ticket marketplace that is transforming the industry, announced today a partnership with Affirm, the company founded by entrepreneur Max Levchin to provide fair and honest alternatives to traditional credit. This new payment option makes TickPick the first and only secondary marketplace to offer Affirm, which allows customers the ability to spread out the cost of their purchase over time through simple monthly payments.

    United Kingdom

    Funding Circle’s broker channel reaches £1bn lending milestone (Bridging and Commercial) Rated: AAA

    After four consecutive record-breaking quarters, the in-house broker team has supported the growth of 9,600 British businesses.

    Prior to the lending milestone, the P2P platform promoted Tom Shave to head of broker.

    Tom has assisted in developing a diverse network of introducers, big and small, across the country.

    UK regions come to the fore in producing $ 1bn tech companies (London Loves Business) Rated: A

    The UK’s leading tech clusters are competing head to head with European capitals, according to new analysis of company growth, in a sign that the success of the UK tech sector is pushing far beyond its London heartland.

    Following the IPOs of Farfetch and Funding Circle, the UK is now home to 15 unicorns and six cities have produced so-called unicorns – $1bn tech companies – according to research prepared for Tech Nation and the Government’s Digital Economy Council by venture capital analytics company Dealroom.co. This latest research is published ahead of the Secretary of State for Digital, Culture, Media and Sport’s first meeting with the Digital Economy Council on 24 October 2018.

    Looking at the creation of $1bn tech companies, Oxford and Cambridge combined have produced more fast-growing tech companies than both Paris and Berlin.

    China

    Loss-Making China Rapid Finance Limited (NYSE:XRF) Expected To Breakeven (Simply Wall St News) Rated: AAA

    China Rapid Finance Limited’s (NYSE:XRF): China Rapid Finance Limited, through its subsidiaries, provides a consumer lending marketplace for lenders and borrowers in the People’s Republic of China. The US$156m market-cap posted a loss in its most recent financial year of -US$122m and a latest trailing-twelve-month loss of -US$49m shrinking the gap between loss and breakeven. As path to profitability is the topic on XRF’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for XRF.

    European Union

    Klarna Talks Split Payments at Money2020 Conference (Cheddar) Rated: A

    Klarna is launching a new ‘Slice it in 4’ product, allowing users to split up payments. Michael Rouse, chief commercial officer of Klarna, explains how it works.

    INDOCHINO Chooses Klarna to Give Consumers the Power to Pay Over Time (PR Newswire) Rated: B

    INDOCHINO shoppers can now Slice it at the checkout by using Klarna’s online consumer financing to easily spread the cost of their purchase over 6-36 months. Slice it has a simple 4-step credit application process, real-time decisioning and is offered within the merchant’s own website – no re-directs – for a frictionless and fast purchase experience.

    By taking the premium made-to-measure experience direct to the consumer, INDOCHINO has created a superior alternative to off-the-rack clothing at ready-to-wear prices. Their immersive multi-channel experience enables customers to order their custom garments with ease online or in-person at one of 30+ showrooms across North America

    German fintech poster child N26’s major security gap (Handelsblatt) Rated: A

    Germany’s fintech darling N26 is potentially vulnerable to money laundering and terrorism financing, according to research by Handelsblatt’s sister magazine WirtschaftsWoche, which exposed a security gap at the online banking startup.

    The apple of discord is how easily someone can open an account with a fake ID. A WirtschaftsWoche correspondent saw first hand how a man, Milo T., scanned a friend’s ID, added his own passport photo to the ID, printed it out and stuck it atop of a white plastic card that was the same size as the office ID card in his country. He cut the edges to make them round and voilà: a new identification card.

    It took five minutes and the result is so blatantly a forgery that it would fail to convince even the laxest of nightclub doormen. None of the holograms or other security features found on original IDs can be seen on the fake. Regardless, Milo effortlessly used this ID to set up an N26 account, and this wasn’t a one-off occurrence. WirtschaftsWoche documented how several people opened N26 accounts using forged papers.

    Robo.cash welcomes new loan originator (Peer2Peer Finance  News) Rated: B

    LATVIAN peer-to-peer payday lender Robo.cash has added a loan originator from Kazakhstan to its platform.

    Z-FINANCE provides short-term private lending in Kazakhstan with an average loan size equivalent to €60 (£52).

    Investors on the Robo.cash site can now invest in these loans, which have a repayment period up to 30 days and an expected interest rate up to 12 per cent per annum.

    Z-FINANCE was launched in July this year and currently lends through a network of 102 sales branches in Kazakhstan.

    International

    ID Finance Group reports 61% revenue growth for the nine months of 2018 (Fintech Finance) Rated: AAA

    ID Finance Group has reported 61 per cent revenue growth and revenues of $141.3 million for nine months of 2018 following strong growth in Europe and Latam. The data science, credit scoring and digital finance company issued $215.7m in loans in the first nine months of the year, a 64 per cent increase on the same period last year.

    Its European and LatAm operations comprising Spain, Poland, Brazil and Mexico demonstrated exceptional growth experiencing a 197 per cent revenue growth and revenues of $32.6 million for the nine months of 2018. It issued $63.8 million in loans, a 142 per cent increase on the same period last year, and has also grown its customer base to over one million registered users with 20,000 new users joining weekly.The Group has now separated its European and LatAm operations from its CIS businesses (comprising Russia, Kazakhstan and Georgia) and it is functioning as a separate entity under the ID Finance name.

    Moven Enterprise Expands Availability of AI Smart-Banking Solution with Global Launch (Business Wire) Rated: A

    Moven Enterprise, the smart-banking solutions division of Movencorp, Inc, today announced that it has expanded its footprint globally to help banks deepen their digital customer engagement and drive new revenue streams while significantly reducing attrition and acquisition costs.

    After working successfully with TD Bank (TD) in Canada, Westpac in New Zealand, and others, Moven is now bringing its AI-driven digital banking platform to banks across LatAm, APAC, Africa, the Middle East and Europe. The global expansion is well-positioned as Moven Enterprise received investment from SBI Group to enhance Moven’s footprint in Asia earlier this year. This included the formation of a joint venture, SBI Moven Asia. The company’s innovative platform leverages a bank’s data and uses proprietary algorithms to create contextual, individualized smart-banking experiences for consumers; providing them the right advice at the right time with the right offer and helping them move towards a better financial lifestyle.

    The Complete Beginner’s Guide to Becoming a Private Lender—Pros & Cons (NuWire Investor) Rated: A

    Private lending has picked up the pace in recent years. This is despite high-interest rates charged by private lenders. Many reasons have pushed lenders into this space including tightened requirements by banks.

    In addition, banks tend to shy away from lending money to small businesses and startups. As a result, many borrowers look for other ways of funding, and such opportunities provide opportunities to private lenders.

    However, starting out as a private lender is no easy walk in the park. Numerous risks lurk in the business, and you need to tread with caution. In this article, you’ll learn how to become a private lender and some of the pros and cons involved, so if you have an interest in becoming “a bank,” read on.

    Fintech Streamlines Socially Responsible Impact Investing Via Robo-Advisors (Investor Place) Rated: A

    What makes an investment socially responsible? There are several criteria. For instance, SRI investing avoids tobacco companies as their products cause health problems and death. Typically, a company’s social responsibility rating is based on its performance in three categories: environmental, social and governance (ESG). Positive practices across one or more of these spheres can land a company in the socially responsible category.

    At the same time, robo-advisors are digital investment managers designed to grow your wealth through investing with models are based on sophisticated computerized algorithms, including ESG consideration. These fintech darlings have answered the call for socially responsible robo-advisors with a host of diverse options. Of course, you could choose a socially responsible mutual fund or ETF on your own. But, for the busy investor, let one of the many robo-advisors take charge of your investing, in line with your personal values.

    Uphold Joins Crypto Lending Platform Cred for New Lending and Earning Solutions (Coin Speaker) Rated: A

    In today’s business community, partnership has become one of the most promising tools on the way to new amazing developments and interesting projects that are aimed at offering customers really unique experience and opening new opportunities for them.

    News about recently established collaborations regularly appears here and there. This time the headlines are made by Uphold which is a major global digital money platform, that has conducted transactions worth over $4.0 billion across 184 countries, and Cred that is a crypto-backed lending provider with over $250 million in credit facilities.

    Joint Projects

    Having announced their partnership Uphold and Cred have revealed their plans to launch two cutting edge blockchain-based consumer finance products: Uphold Earn and Uphold Borrow. Both products are aimed at helping customers to earn interest from stablecoin holdings and borrow money against the cryptocurrencies they have.

    India

    Indian P2P Lending Operators forms Association to Make P2P Industry More Credible (Indian Web2) Rated: AAA

    After the Reserve Bank of India unveiled guidelines last October recognizing the need for peer-to-peer lending platforms as NBFC-P2P in the country, the regulatory authority had issued first license in May 2018 and since then 9 players have been recognized as NBFC-P2P companies. More than 12 companies are in the process of getting approval from the regulatory authority. Some of them are at advance to mid-level stage.

    To represent the NBFC-P2P industry at various front as well as to represent country’s P2P lending industry at international forums, most of existing & new players have teamed-up and formed a registered body – Association of NBFC P2P Platforms.

    The association has been registered under The Society Registration Act, 1860. Mr. Pramod Akhramka has been elected as President, Mr. Rajiv Ranjan as Secretary and Mr. Mukesh Bubna as Treasurer of the association.

    Choose bank or online lender based on nature of loan (DNA Online) Rated: A

    Unexpected expenditures often come knocking on your door when you want them the least. The reasons could range from maintenance for your vehicle to your old washing machine that needs to be replaced. The plus point of such expenses cropping up during the festive season is that you can always get a good bargain online (or at the store nearby). The fact still remains that these are expenses nevertheless. And that too when your festive expenditure is already lined up, leaving no financial bandwidth.

    At times like these, loans bring a sigh of relief. But with so many options available in the market, whom should you approach with your loan requirement- banks or digital lending platforms?

    Today, Indian consumers are benefitting from a range of financial products and financial institutions (FI) such as banks, non-banking finance companies, online lending platforms, etc, available at their disposal. If you are planning to take a loan or feel like there’s a possibility of availing the same in the near future, you must primarily understand that every lender has its own unique pros and cons. Some are quick in terms of loan approval and disbursal, some are cost-effective, some offer greater flexibility to their customers, while some offer innovative products that are more relevant for an applicant.

    Authors:

    George Popescu
    Allen Taylor

    Tuesday April 10 2018, Daily News Digest

    Tuesday April 10 2018, Daily News Digest

    News Comments Today’s main news: Prime Meridian announces new opportunities fund. TransUnion launches startup credit kit. SoFi hires Goldman head of mortgage securitization as CFO. Upgrade intros new personal credit line. The Axiom Group ready to invest $50M into charge-off portfolios. S. Korean P2P loans increase 10.3% in March. Today’s main analysis: The highs and lows of Bank Negara’s 2017 […]

    Tuesday April 10 2018, Daily News Digest

    News Comments

    United States

    United Kingdom

    International

    Other

    News Summary

    United States

    Prime Meridian Capital Management Announces New Fund Launch: The Prime Meridian Special Opportunities Fund (Benzinga), Rated: AAA

    Prime Meridian Capital Management (PMCM) a Registered Investment Advisor (RIA) specializing in marketplace lending strategies across three alternative credit verticals in four funds, today introduced the Special Opportunities Fund.

    The new fund, due to launch in the second quarter 2018, will invest in multiple high yielding alternative credit verticals including litigation finance, life settlements, targeted high yielding, niche real estate, small business, and consumer loans.

    TransUnion Boosts Entrepreneurial Innovation with New Startup Credit Kit (Investors Hub), Rated: AAA

    To meet the needs of startups and their investors, TransUnion (NYSE:TRU) today launched the Startup Credit Kit at LendIt Fintech USA 2018, giving new companies faster access to cutting-edge alternative and trended credit and fraud prevention data.

    With TransUnion’s Startup Credit Kit, new businesses can more quickly gain access to depersonalized consumer credit data to better explore the market for untapped opportunities. It also helps new businesses determine the viability of their products by analyzing real-world depersonalized consumer credit data. This allows startups to focus their resources on high-potential market segments and product opportunities while allowing them to prove their concept to raise funding in the early stages of the startup lifecycle.

    SoFi hires former Goldman Sachs head of mortgage securitization as new CFO (Housing Wire), Rated: AAA

    Now, it looks like SoFi may be making a bigger move into securitizations by hiring the former head of mortgage securitization at Goldman Sachs as its new chief financial officer.

    SoFi announced Monday that it named Michelle Gill as the company’s new CFO.

    Gill comes to SoFi from TPG Sixth Street Partners, a credit firm. Gill joined TPG last yearafter a lengthy term at Goldman Sachs.

    Gill spent 14 years at Goldman Sachs, eventually serving as a partner and co-heading the firm’s structured finance business.

    Lending Club Ex-CEO Is Staging A Comeback With New Fintech Startup (Forbes), Rated: AAA

    Online lending startup Upgrade, led by cofounder and CEO Renaud Laplanche, announced that it’s now initiating $100 million in personal loans a month, with an average loan size of about $10,000. The one-year-old company has reached $60 million in annualized revenue, Laplanche says, and by the end of 2018, he expects to hit a $100 million revenue run-rate and become profitable.

    Upgrade also announced a new product called Personal Credit Line, a hybrid of a personal loan and credit card. Consumers can get approved for up to $50,000 in credit, and they can draw down on the line as needed, paying interest only on what they’ve borrowed. The credit line has a fixed length of 12 to 60 months and a fixed interest rate, and it forces consumers to pay part of the loan principal every month.

    Online lender touts new personal credit line as HELOC alternative (American Banker), Rated: A

    The first online lending firm Renaud Laplanche founded, LendingClub, targeted consumers with hefty credit card balances, offering them the opportunity to refinance at a lower interest rate.

    In his latest venture, Laplanche hopes to lure customers before they rack up big credit card bills. Upgrade, the San Francisco-based online lender that he founded in August 2016, is rolling out a new product that is designed for folks who are anticipating big expenses but are not sure exactly how much they will need to spend or when.

    THE AXIOM GROUP ANNOUNCES $ 50M IN FUNDING AVAILABLE TO PURCHASE CHARGE OFF PORTFOLIOS (Lendit), Rated: AAA

    The Axiom Group announced today at LendIt Fintech USA that it has obtained $50M in capital to finance the purchase of charge off portfolios with a focus on consumer loans and credit cards, specifically in the FinTech lending space.

    This increase in capital will allow The Axiom Group to pursue large portfolios and monetize those portfolios immediately for the lender/seller partners. By selling bad debt portfolios, FinTech companies can utilize the income for further lending, as well as reduce their risk associated with the challenges of collecting on charged off accounts.

    Fintech lenders will struggle to regain mojo alone (Nasdaq), Rated: A

    Some 13 months later LendingClub, which Sanborn has run since a mis-selling scandal cost predecessor Renaud Laplanche his job in 2016, remains just a lender. Its stock has lost around a third of its value in the past year.

    On Deck’s shares are effectively flat over the same period. But boss Noah Breslow had to slash costs last year after credit losses. He now plans to boost revenue by expanding into portfolio management and loss mitigation, and finding more bank partnerships.

    Privately held Social Finance has done the most to diversify, adding consumer and mortgage loans as well wealth management to student-loan refinancing.

    SoFi is now the biggest player. It extended $12 billion of new loans last year, 50 percent more than erstwhile leader LendingClub, and its adjusted EBITDA is two-thirds higher at $126 million, according to the Wall Street Journal. Yet each pales in comparison to JPMorgan’s retail unit, which lends around 10 times as much and enjoys lower funding costs thanks to customer deposits.

    Consumer Lending Platform Best Egg Exceeds $ 5 billion & Celebrates Fourth Birthday (Crowdfund Insider), Rated: A

    Marlette Funding, LLC, the owner of consumer lending platform Best Egg, announced on Monday the year-end results and key accomplishments for first quarter 2017. According to Marlette Funding, during the past year, Best Egg experienced origination growth of 66%, significantly reduced its customer acquisition costs, and ended 2017 with three straight quarters of net income positive on a GAAP basis. Best Egg has reportedly exceeded $5 billion of prime loans and celebrated its fourth birthday. 

    Launched in 2014, Marlette Funding, through its consumer brand Best Egg, describes itself as a financial technology provider on a mission to find better ways to make money accessible to allow people to “enjoy life.”

    Elevate to Release First Quarter 2018 Earnings on Monday, April 30, 2018 (Business Wire), Rated: B

    Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it will release its first quarter 2018 financial results after the market closes on Monday, April 30, 2018. Ken Rees, Chief Executive Officer, and Chris Lutes, Chief Financial Officer, will also host a conference call on the day of the release (April 30, 2018) at 5:00 pm ET to discuss Elevate’s financial results.

     

    How Blockchain is Changing the Mortgage Game (Investopedia), Rated: A

    While blockchain doesn’t offer a perfect remedy to the problems afflicting the industry, it does provide a model that minimizes some of them. The first major improvement the technology brings is transparency. Blockchain’s distributed ledger technology (DLT) provides two major upgrades to the current model—it decentralizes the storage of information, and it makes all transactions immediately available across all nodes of the chain. The first upgrade means that companies and lenders can no longer manipulate information or engage in shadowy practices with data, as it is shared across an entire network and not under their exclusive supervision.

    Nav Launches First-of-Its-Kind Cash Flow Analysis Tool for Small Business Owners (Lendit), Rated: A

    Nav, a free platform that helps small business owners build, protect and leverage their financial data, announced the launch of Business Banking Health Check, a feature to help small business owners make more informed decisions on their cash flow. Nav is the only place entrepreneurs can access their personal and business credit scores, along with cash flow insights to provide greater transparency into how lenders view their
    creditworthiness and enable greater access to capital.

    According to Pepperdine’s Capital Markets Report, insufficient credit profiles and cash flow are two of the primary reasons banks reject business loan applications. Nav’s platform uses these data sets to help business owners manage their fundability, while also doing legwork for lenders by matching its small business customers to their most-qualified funding options.

    LENDIO ANNOUNCES LENDER TURNDOWN PROGRAM (Lendit), Rated: A

    Lendio announced today at LendIt Fintech USA that it has facilitated nearly $60 million in loans through its lender turndown program.

    Lendio’s lender turndown program allows lending partners to offer a marketplace of loan options to customers that do not fit the lender’s credit box; this allows lenders to turn a decline response into a potential loan offer for the small business owner.

    LENDR ANNOUNCES THE LAUNCH OF ITS BUSINESS DEBIT CARD (Lendit), Rated: A

    Lendr Online, LLC. announced today at LendIt Fintech USA that it is has launched a new business debit card product to service its growing client base. The ability to fund business owners in real-time via an instant access virtual Mastercard followed up with a traditional plastic card utilizing the latest in EMV chip security, will further enhance its brand and solidify Lendr’s position as a premier financial services firm.

    Ocrolus Secures $ 4M in Series A Funding (Finsmes), Rated: A

    Ocrolus, a New York City-based provider of solutions to analyze financial documents, raised $4m in Series A funding.

    The round was led by Bullpen Capital with participation from QED Investors, Laconia Capital Group, ValueStream Ventures, RiverPark Ventures, Sam Hodges (co-founder, Funding Circle), Vince Passione (CEO, LendKey), Ram Ahluwalia (CEO, PeerIQ), Bill King (former head of securitization, JP Morgan), Hugh Nguyen (CEO, ClearServe) and Tanya Barnes (managing director, Golden Seeds), among others. In conjunction with the funding, David Arcara of Laconia Capital Group and Nick Adams of Differential Ventures will be joining Ocrolus as board members. Paul Martino of Bullpen Capital, Amias Gerety of QED Investors and Karl Antle of ValueStream Ventures will be board observers.

     

    THINK WALLET REVEALS SCALABLE SOLUTION TO REDUCE FUNDING COST OF PERSONAL LOANS (Lendit), Rated: A

    ThinkWallet.com announced today at LendIt Fintech USA that it has solved the problem many lenders currently face: Overspending to attract leads that can’t qualify for their personal loan products.

    Nelnet Expands Loan Servicing Offerings To Meet Demands Of Fintech Lenders (PR Newswire), Rated: A

    Nelnet (NYSE: NNI) is bringing a new servicing option to Fintech lending platforms. Nelnet Loan Servicing will leverage the experience, scale, and personnel of its existing servicing business with technology enhancements to meet the unique needs of Fintech companies with primary and backup servicing.

     

    General Atlantic in talks on a deal with Brazil’s online lender Geru (Reuters), Rated: B

    U.S. investment firm General Atlantic is in talks to buy a minority stake in closely held Brazilian online lending startup Geru Tecnologia e Serviços SA, according to two sources with knowledge of the matter.

    Other investors may join General Atlantic, the sources said, adding that Geru’s partners have spent the last few weeks visiting funds in San Francisco and New York to raise about $50 million.

     

     

     

     

    IDVALIDATION SHOWCASES GOVERNMENTAL VERIFICATION SOLUTIONS FOR LENDERS AT LENDIT FINTECH USA – 2018 (Lendit), Rated: B

    IDValidation will be showcasing their governmental verification solutions to the lending community and Stops 100% of Synthetic Identity Theft.

    IDValidation’s Consent Based SSN Verification Allows Financial Institutions Direct Access to the Main Frame Database of the Social Security Administration to Accurately Verify the Validity of a Social Security Number and Stop Synthetic Identity Theft. Toyota Financial Services has conducted a successful pilot. IDValidation has become the forerunner in providing this vital tool to the Financial World helping mitigate
    Fraud & ID Theft.

     

     

     

    LendingPoint To Accept Loan Payments and Disburse Loans via Debit Cards (Business Wire), Rated: A

    Bringing a new layer of convenience to financial transactions with its customers, LendingPoint, the company working to revolutionize access to consumer credit, announced today it has entered into an agreement with TabaPay that will integrate debit cards into LendingPoint’s financing platform.

    Beginning immediately, LendingPoint will allow borrowers to use debit cards for loan payments they make online or over the phone. LendingPoint will be able to verify account ownership and balance of its applicants through the TabaPay platform. Then later this year, LendingPoint will also be able to instantly disburse loans to approved borrower accounts through their debit cards, 24/7/365, or credit card payoffs. Those inbound and outbound debit-card disbursements and collections will happen instantaneously and are free for the borrower.

    HARVESTING INC LAUNCHES AI BACKED CREDIT RISK SYSTEM FOR AGRICULTURE LENDERS (Lendit), Rated: A

    Silicon Valley-based FinTech Social Enterprise Harvesting Inc, launches its innovative credit scoring system for financial institutions to assess farmers creditworthiness and facilitate agriculture financing .

    Harvesting’s Credit Risk System is an Artificial Intelligence (AI) powered platform which leverages on traditional & alternative data sets and allows financial institutions to build, deploy and monitor credit business in the cloud, within a fraction of time & resources it takes today. It’s easy to use interface with advanced feature engineering flexibility allows credit risk manager to create best of the breed custom credit risk model for the organization on a cloud infrastructure. It allows credit risk manager of any size of financial institutions to leverage the power of AI and increase acceptance rate and reduce defaults.

    FUTUREBANK DIGITAL AND API BANKING PLATFORM INTEGRATES ENTERSEKT’S SECURE CONNEKT PAYMENT FUNCTIONALITY (Lendit), Rated: B

    Global Kinetic announced today at LendIt Fintech USA, that it will be integrating Entersekt’s Connekt functionality into the FutureBank platform. FutureBank’s unique ability to abstract the complexities in legacy core banking systems and customize digital channels through its technology platform helps banks and disruptive FinTech companies work together more efficiently. The growing digital banking market in the US has become vulnerable as consumers are frustrated by poorly designed mobile apps that often have weak security implementations and limited payment functionality. The FutureBank platform can now offer converged payment acceptance through Connekt.

    PENSCO Launches Custodian Connect (Lendit), Rated: B

    PENSCO Trust Company (“PENSCO”) announced today at LendIt Fintech USA, the launch of Custodian Connect, an API-driven capability that seamlessly connects investment platforms to PENSCO enabling uninterrupted opening and funding of an IRA from within the platform.

     

    Spring Labs Announces World Class Industry Advisory Board to Help Build Decentralized Credit and Identity Validation Network (Lendit), Rated: B

    Spring Labs, which is building the Spring Network, a blockchain-based network being designed to allow lenders, banks, and data providers to securely and efficiently exchange data with one another, today announced its founding industry advisory board. The industry advisory board comprises a group of industry leaders in finance, credit, and compliance, with members including Sheila Bair, the former Chair of the U.S. Federal Deposit Insurance Corporation (FDIC); and Nigel Morris, Co-Founder and former long-time President of Capital One, and co-founder of QED Investors, a leading investor in global financial technology companies.

    This news of the industry advisory board comes on the heels of Spring Labs announcing a $14.75 million seed fundraising round, one of the largest initial venture rounds to-date for a blockchain startup.

    CoinVantage Announces Release of Flagship Portfolio Accounting & Reporting System for Digital Assets (Lendit), Rated: B

    Alternative Investment fund administrator MG Stover & Co. (MG Stover) announced today a partnership with software technology firm CoinVantage as part of its strategy to grow its digital asset fund administration business and deliver world class solutions to its clients.

    Cross River Bank Demonstrates Key Growth, Makes Significant Personnel Hires (Lendit), Rated: B

    As Cross River Bank approaches its 10th anniversary, the leader in the emerging FinTech market is demonstrating a surge in growth and surpassing significant milestones as it grows its customer base, offerings and strategic partnerships designed to revolutionize the banking infrastructure.

     

    United Kingdom

    VPC’s revenue dips in February after record January performance (Peer2Peer Finance News), Rated: AAA

    VICTORY Park Capital (VPC) Specialty Lending Investments saw its total net revenue return dip to 0.81 per cent in the month of February, after reporting a record return of 1.08 per cent in January.

    In its monthly market commentary, VPC said that the fall in revenue was due to a combination of factors including a “one-time fee earned in January and a shorter day count”. Capital losses were attributed to VPC’s exposure to Elevate Credit – a US-based provider of short-term loans, and securitisation residuals.

     

    International

    The P2P Lending Alternative – Crowdvouching – Will Now Run in Test Mode (Coin Telegraph), Rated: AAA

    In 2017, Suretly token-holders were inspired by the idea of a crowdvouching platform – an international exchange for micro-guarantees, where people can make money by helping others borrow. In the beginning of 2018, the project made something that many other ICOs were not able to deliver: the demo version of its product. To become a guarantor (or a ‘voucher’, in the crowdvouching terminology), an individual needs to download the Suretly mobile application, where he can find borrowers’ loan orders, vouch, and get receive a sum of money in return (a fee).

    On April 9, Suretly releases the first version of the new app, available to all users registered for its testing period. The borrowers’ behavior is based on the real data of past periods, and, therefore, users can learn different vouching strategies and practice them in future.

    Unlike p2p lending, Suretly does not lend money directly, but rather serves as an intermediary between financial institutions, borrowers, and co-signers. Suretly users vouch for a small part of a loan sum and guarantee that the loan will be repaid in the case of a borrower’s default. Liability for each loan is divided among all vouchers and each voucher’s approval serves as an insurance of the loan. In order for the loan to be approved, the entire amount must be guaranteed by the vouchers.

    RCN AT LENDIT FINTECH USA 2018 (Lendit), Rated: B

    RCN announced today at LendIt Fintech USA that it will showcase how global lending through peer-to-peer technology is possible using blockchain technology and cosigned smart contracts.

    With billions of people all over the world excluded from traditional banking & financial services, Sebastian Serrano (CEO), will explain the company’s successful history in Latin America since it was funded and how RCN can contribute to the world’s economy by providing credit and financial inclusion through blockchain technology and cosigned smart contracts.

    Scienaptic releases significant product enhancements to its credit underwriting product ‘Ether Underwrite’ (Lendit), Rated: B

    Scienaptic Systems Inc. announced today at LendIt Fintech USA that it has released an advanced version of its Credit Underwriting product, Ether Underwrite.

    European Union

    Can Europe cash in on the fintech revolution? (Silicon Republic), Rated: AAA

    Technologies such as blockchain underpin the fintech revolution, paving the way for a whole groundswell of new start-ups that have targeted markets underserved by banks through better user interfaces and user experience (UX) as well as through digital marketing and branding.

    A case in point is Revolut, a London-headquartered start-up with offices in Dublin. It turns out that cash-savvy young workers have no time for bank fees and are less forgiving of banks than older generations, and are flocking to these challenger banks.

    Examples include: Zurich’s Advanon, an online platform for invoice financing for SMEs; Dublin’s CurrencyFair, which allows individuals and businesses to send funds to bank accounts worldwide; Stockholm’s Klarna, which provides online payments for e-commerce sites; and London’s Monzo, a start-up bank that has amassed more than 20,000 current-account holders and more than 500,000 people using its distinctive ‘hot coral’ cards.

    Latin America

    Creditas publishes report on the Brazilian lending market (Lendit), Rated: B

    Creditas, the leading digital lending platform for secured loans in Latin America, has published the updated report “The disruptors paradise: Understanding the Brazilian lending space” at the Lendit USA 2018 conference.

    With roughly US$ 150 billion in net interest margin, Brazilian consumer debt represents a unique opportunity to significantly increase debt availability and reduce the 30%+ banking spread. The report summarizes the reasons behind the high spread of the Brazilian ecosystem and the evolution during the last decade.

    Canada

    Nova Credit Partners with Transunion Canada to Expand Immigrant Financial Access across North America (Lendit), Rated: AAA

    Nova Credit announced today at LendIt Fintech USA that it partnered with Transunion to serve creditworthy newcomers to Canada who may otherwise miss out on credit opportunities due to a lack of Canadian credit history.

    The new product—TransUnion Global Credit Connect powered by Nova Credit—provides newcomers to Canada with a platform to import their historical credit information and have their international credit reports delivered to end-users such as banks, in a streamlined, standardized format. The foreign credit score is mapped to a Canadian equivalent score so that it can be consistently applied.

    MENA

    Dubai SME Expands Agreement With Finance Solutions Provider ‘Beehive’ (Albawaba Business), Rated: A

    The Mohammed bin Rashid Fund (MBRF) for SME – the financial arm of Dubai SME, itself an affiliate of Dubai’s Department of Economic Development (DED) – has expanded the partnership agreement with Beehive, the MENA region’s first regulated peer-to-peer lending platform, which will cross the $50 million mark of total funding for SMEs across the platform this month.

    Following a successful initial launch, MBRF and Beehive have broadened the scope of the agreement to increase the credit guarantee to AED750k and also offer Sharia Compliant Invoice Finance, a short-term finance option for businesses wishing to improve cash flow.

    Asia

    South Korea’s P2P loans jump 10.3% on month in March (Pulse News), Rated: AAA

    The combined loans of peer-to-peer (P2P) lenders in South Korea reached almost 2.3 trillion won ($2.1 billion) last month amid burgeoning demand for the debt financing service that allows individuals to borrow or lend money online without going through an official financial institution.

    According to Korea P2P Finance Association on Monday, the accumulated loans of its 65 members reached 2.296 trillion won as of end of March, up 213.6 billion won or 10.26 percent from a month ago. By sector, total loans on real estate project financing reached 768.5 billion won, real estate mortgage 611.5 billion won, and other mortgages 472.4 billion won, and credit loans 443.2 billion won. The members’ average loan interest rate was 14.32 percent.

    The State Of The Nation: The highs and lows in Bank Negara’s 2017 annual report (The Edge Markets), Rated: AAA

    Source: The Edge Markets

    THERE is a chance the economy will grow as much as 6% this year, according to Bank Negara Malaysia’s 2017 annual report, which was released on March 28. Not only is that ahead of 2017’s stronger-than-expected 5.9% gross domestic product growth, the central bank’s baseline projection of 5.5% growth for this year is at the higher end of the official 5% to 5.5% projected in the Economic Report 2017/2018, which was released just five months ago.

    In fact, working numbers in the annual report indicate 5.67% growth for 2018 — exceeding the government’s projection last October, although just short of 2017’s spectacular 5.9% reading.
    Source: the Edge Markets

    While last year’s growth beat everyone’s expectations (including the central bank’s working number of 4.57%), it is worth noting that 2016’s actual GDP growth of 4.2% was very close to the central bank’s working number of 4.1% when official projections were between 4% and 5%.

     

    Authors:

    George Popescu
    Allen Taylor

    Monday February 5 2018, Daily News Digest

    Nav financing

    News Comments Today’s main news: Banco BNI starts lending through Fellow Finance. eBay drops PayPal for Adyen. Aviva exec backs robos. OneConnect secures $650M funding. Stripe sets up engineering hub in Dublin. EBANX gets $30M in funding from FTV Capital. Today’s main analysis: FT Partners’ Alternative Lending Market Analysis for January, and an interview with Nav CEO. Today’s thought-provoking articles: […]

    Nav financing

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    India

    APAC

    MENA

    Latin America

    News Summary

    United States

    eBay ditches PayPal for Adyen (Fintech Futures), Rated: AAA

    What the good fintech can giveth, it can taketh away. eBay has given PayPal the boot and turned to Dutch firm Adyen as its primary processing partner.

    Looking to sweeten this bitter pill, eBay says PayPal, a “long-time” partner, will be an option at the checkout for its buyers.

    PayPal powers BofA Merrill digital payments (Fintech Futures), Rated: A

    Bank of America Merrill Lynch’s (BofA Merrill) US-based commercial clients can now make payments in local currencies to payees who hold PayPal accounts.

    Strong Job Gains, Marcus Acquihires, MLA Testimony (PeerIQ), Rated: AAA

    Janet Yellen chaired her last Fed meeting as the committee kept interest rates on hold in January. Futures are pricing in a 93% probability of a rate hike in March and 3 rate hikes for 2018. The recent sell off on the long end of the curve has seen 10-year treasury yields edge past 2.85%, providing respite to banks who were seeing their loan margins compress as the curve flattened.

    In securitization news, Marlette completed its largest securitization to date, with MFT 2018-1 coming in at $464 Mn. The deal was significantly over subscribed and eventually upsized continuing the trend of larger deal size that we pointed out in ourQ4 securitization trackerThe senior tranches were rated AA by Kroll. The collateral pool has 40,303 loans with an average loan balance of $12k, weighted average coupon of 14.3% and a FICO score of 703. All the loans were originated by Cross River Bank.

    CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA

    This month’s report features an exclusive interview with Levi King, Co-founder and CEO of Nav, which is a data aggregation platform and marketplace that bridges the gap between small businesses and financial institutions. In the interview, Levi discusses the motivation behind founding Nav and how the company solves the challenges small businesses face managing their credit and securing financing solutions, among other topics.

    Source: FT Partners

    Download and read the full report here.

    Open banking’s early adopters bet on ‘tremendous gains in value’ (American Banker), Rated: AAA

    Only a few banks have embraced open banking and offer APIs to almost anyone. But they are betting on having a head start on competitors, as trends in the industry, such as increased bank-fintech partnership and evolving regulation, will push the banking-as-a-platform movement toward reality.

    Operating as BBVA Compass in the U.S. in Birmingham, Ala., in 2016 it named a head of open APIs, and has engaged in several data-sharing agreements with fintechs. It is one of a handful of U.S. banks engaged in open banking — Capital One, Silicon Valley Bank, Citi and CBW Bank in Weir, Kan., also have such programs.

    Last May, BBVA opened up its API Marketplace and made commercially available eight APIs so companies, startups and developers would be able to build new products and services by accessing and integrating customer’s banking data — with their permission — into their applications.

    Source: American Banker

    Fiserv Has Largest U.S. Marketshare of Top Bank Core Processors (Bank Innovation), Rated: A

    According to data gathered by FedFis.com, the top processor is Brookfield, Wis.-based Fiserv. With more than 37% of the market share, Fiserv is well ahead of its competitors. The second, Monett, Mo.-based Jack Henry & Associates, has just half Fiserv’s market share with 17.6%. Close behind JHA is Fidelity National Information Services Inc., better known as FIS.

    Enova Reports Fourth Quarter and Full Year 2017 Results (PR Newswire), Rated: A

    Enova International (NYSE: ENVA), a financial technology company offering consumer and small business loans and financing, today announced financial results for the quarter and year ended December 31, 2017.

    Fourth Quarter 2017 Summary

    • Total revenue of $243.7 million in the fourth quarter of 2017 increased 20.4% from $202.4 million in the fourth quarter of 2016.
    • Gross profit margin was 47.7% in the fourth quarter of 2017 compared to 51.8% in the fourth quarter of 2016, driven by growth in the installment loan and receivables purchase agreement segment as well as a higher mix of new customers, which requires higher loan loss provisions.
    • Net income was $6.9 million, or $0.20 per diluted share, in the fourth quarter of 2017 compared to net income of $8.7 million, or $0.26 per diluted share, in the fourth quarter of 2016.
    • Fourth quarter 2017 adjusted EBITDA of $38.1 million, a non-GAAP measure, increased from $35.1 million in the fourth quarter of 2016.
    • Adjusted net income of $8.9 million, or $0.26 per diluted share, a non-GAAP measure, in the fourth quarter of 2017 increased from adjusted net income of $8.5 million, or $0.25 per diluted share, in the fourth quarter of 2016.

    Full Year 2017 Summary

    • Total revenue of $843.7 million in 2017 increased 13.2% from $745.6 million in 2016.
    • Gross profit margin was 53.0% in 2017 compared to 56.0% in 2016.
    • Net income was $29.2 million, or $0.86 per diluted share, in 2017 compared to net income of $34.6 million, or $1.03per diluted share, in 2016.
    • Full year 2017 adjusted EBITDA of $157.8 million, a non-GAAP measure, increased from $142.3 million in 2016.
    • Adjusted net income of $46.9 million, or $1.37 per diluted share, a non-GAAP measure, in 2017 increased from adjusted net income of $37.5 million, or $1.12 per diluted share in 2016.

    No Credit? No Problem! Microlender for Women Uses Novel Approach (WSJ), Rated: A

    Daniela Morales’s lender is demanding. Every Friday morning, at 9:45 sharp, she has to visit a small apartment in Woodside, Queens, to make her weekly payment—currently $293 plus $17 interest on a $6,900 balance.

    Ms. Morales’s lender is Grameen America, a nonprofit microlender for women entrepreneurs. To get a Grameen loan, you don’t need any collateral or credit history, just the support of a small group of Grameen loan recipients who can vouch for you. It is, essentially, a reputation-based loan.

    There are other nonprofit microlenders operating in the city, including Accion and BOC Capital Corp. But Grameen America, modeled on a Bangladeshi microlender, is unique in its peer support and loan-approval model.

    The loans, which start at $500 and command an interest rate of 18% on a declining balance, must be repaid in six months. The interest rate falls as the loan is repaid. Members who establish a good track record qualify for larger sums.

    How This Founder Is Using Fintech To Give Women More Financial Control (Benzinga), Rated: A

    Morty is an online mortgage broker. Our mission is to empower homebuyers to make smarter home financing decisions. With a modern tech stack and a marketplace of lenders, we offer customers the most options, great rates, and a transparent process.

    What surprised you the most in the fintech industry in 2017?

    That there wasn’t more innovation in the mortgage space. It’s the only lending vertical that hasn’t moved online- credit cards, student loans, small business loans, personal loans- all have a big online presence. There is still so much to be done in mortgage, it’s exciting.

    Hackers Targeting Payroll Direct Deposit (PYMNTS), Rated: A

    In an article penned for JD Supra by law firm Ogletree, Deakins, Nash, Smoak & Stewart, P.C., experts warned of a type of payroll scam that sees fraudsters diverting direct deposits from employee accounts to criminal accounts.

    According to the firm, fraudsters use a phishing scam by sending an email from an address similar to a legitimate company account.

    Ogletree Deakins warned that not only does this scam result in lost funds, but it is ultimately a data breach, with scammers gaining access to corporate systems and data. The report also noted that scammers are targeting all types of businesses using all types of payroll providers.

    Will Markets Ever Live Up to Our Expectations (Guru Focus), Rated: A

    The fintech industry is the powerhouse behind the meteoric rise of the peer-to-peer lending market. After several platforms launched online payments, it was only a matter of time before new ones emerged offering lending services that are offered by and to registered members.

    LendingClub Corp (NYSE:LC) has been one of the most notable players in this space and its popularity pushed it public in 2014. However, since then, the company has struggled to live up to expectations, reflecting the actual picture of the status of the peer-to-peer lending.

    According to critics, while peer-to-peer lending is an attractive option for borrowers looking for alternative financing solutions, it appears to have growth limitations due to lack of funding for new products. Peer-to-peer lending platforms do not take deposits and this is a limiting factor, but analysts suggest that if they are to grow to the point of rivaling the mainstream lending market, then they may have to start taking customer deposits.

    How to Win Man vs. Machine Advice Game (ThinkAdvisor), Rated: A

    TD Ameritrade put the competitive pressures tied to robo-advisors and other technology left, right and center at its LINC 2018 RIA conference this week in Orlando. Industry leaders highlighted the power and threat of technology and how to address these trends in the advice business.

    The dealmakers financing top adviser technology (InvestmentNews), Rated: A

    It’s impossible to look at the landscape of modern adviser technology without seeing Steve Lockshin’s footprints.

    As an early investor in Betterment, Mr. Lockshin, 41, was instrumental in encouraging the robo-adviser to pivot from competing against advisers to partnering with them.

    Brad Bernstein could see the role of advisers was changing.

    What was once an industry of investment managers and salespeople was shifting to financial planning. Driving the change was technology — automating and commoditizing many of the ways advisers traditionally added value for clients. Mr. Bernstein, 51, managing partner at growth equity firm FTV Capital, believed there was a demand for products that helped advisers better articulate their value to clients.

    That’s what attracted Brooks Gibbins, 45, to the industry when he founded FinTech Collective with his partner, Gareth Jones, in 2012. The venture capital firm has been one of the most active early-stage fintech investors over the past five years, seeding some of the biggest names on the adviser fintech scene.

    Seeing the opportunity for adviser fintech startups to get acquired by, or partner with, financial institutions, Ian Sheridan decided to draw on his more than 25 years of experience in the financial services industry — working in wealth, retirement and investing in startups — to identify which technology would be part of the next wave of innovation.

    Fidelity rocked the adviser fintech world in 2015 when it acquired eMoney, one of the most popular financial planning and client portal tools among independent advisers. The reported $250 million price tag proved there was money to be made in adviser fintech.

    “Prior to that, there was good technology out there, but there wasn’t this stream of new business models, this new equity flowing in,” said Mike Durbin, 50, the president of Fidelity Institutional who spearheaded the deal. “The pace has clearly quickened.”

    After a career that took him from E.F. Hutton to founding the Lockwood family of companies, Len Reinhart turned toward private investing in retirement.

    American Association of Private Lenders Opposes Florida Mortgage Licensing Bills (PR Newswire), Rated: A

    The Florida legislature kicked off its legislative session by introducing Florida Senate Bill 894 and House Bill 935, legislation that could cover private mortgage lenders. The bills, introduced by Sen. Rene Garcia (R-Miami) and Rep. Jeanette Nunes (R-Miami), would eliminate a longstanding business purpose exemption for loans secured by a Dwelling.

    On January 18, the bill passed the House Insurance and Banking Subcommittee with a 13-1 vote. On January 24, the House Commerce Committee passed the bill on a unanimous vote. The Senate similarly passed the bill on a unanimous vote in the Senate Banking and Insurance committee on January 23.

    American Association of Private Lenders’ (AAPL) position is that the proposed regulation would harm Florida residents, business and the state’s economic growth by consolidating power to a few licensed parties. Private lenders provide much needed capital to a marketplace which is underserved by large financial institutions. Professional business parties need to be able to work with each other without significant regulatory intervention. The proposed regulation would result in less market competition, translating to higher interest rates, a higher cost of credit and would force business out of Florida and into neighboring states including Alabama, Georgia, Tennessee, North and South Carolina, all of which exempt business purpose loans from licensing requirements.

    Amy Johnson Named as Chief Operating Officer at dv01 (PR Newswire), Rated: B

    dv01, the data management, reporting, and analytics platform that provides institutional investors insight into lending markets, today announced the appointment of Amy Johnson as Chief Operating Officer. Johnson will report to dv01 founder and CEO, Perry Rahbar.

    As COO, Johnson will be responsible for dv01’s finance, legal, and sales efforts, including helping execute the company’s vision and scale its operations.

    The 10 D.C. Area Startups That Raised Capital in January (DC Inno), Rated: B

    Reston, Va.-based online lender StreetShares closed $23 million in equity funding on Jan. 24. The lender focuses on veteran-owned small businesses and relies on a peer-to-peer lending model. About $20 million of the new round is from Bethesda, Md.-based firm Rotunda Capital Partners. Previously, StreetShares had raised $8.3 million between three rounds.

    United Kingdom

    Aviva executive backs robo-advisers in call for financial advice shake-up (New World News), Rated: AAA

    An Aviva executive has backed the rise of robo-advisers and called for a shake-up of financial advice to help open up the industry to the mass market.

    Andy Briggs, chief executive of Aviva UK Insurance, said the current regime is freezing out large swathes of the population because only the upper echelons can afford the hefty fees.

    Mr Briggs said robo-advisers could also be more powerful and beneficial to customers if the artificial intelligence did not have to carry out full financial assessments.

    Treasury begins SME finance inquiry (Bridging&Commercial), Rated: A

    The Treasury committee has launched an inquiry into SME finance to look at the state of the market and the lessons to be learned from RBS’s Global Restructuring Group (GRG).
    The Treasury’s inquiry will look at the extent of competition in the market, the various sources of funding available to SMEs – including P2P lending and crowdfunding – and whether the current regulatory framework provides enough protection to SMEs when they borrow money.

    The committee will also consider the regulation of SME lending and whether banks should be bound by a broader set of duties when dealing with SMEs.

    The pros and cons of each of the six types of ISA on the market (Your Money), Rated: A

    6) Innovative Finance ISA

    An Innovative Finance ISA (IFISA) is a peer-to-peer lending or crowdfunding product. In some instances, you can generate returns of around 8 – 9% by lending to private borrowers or by taking stakes in ‘crowdfunded’ investments. The IFISA is also subject to the same £20,000 annual ISA allowance so you can split your money between this ISA, as well as cash and stocks and shares.

    While this is regulated by the FCA, peer-to-peer lending is not covered by the FSCS meaning your capital is at risk.

    Things can only get better, says Christie & Co (The Caterer), Rated: B

    Easily available debt from banks, financial institutions, peer-to-peer lending and even crowdfunding, together with forecasts of revpar growth of 2.4% in London and 2.3% in the regions, will help drive investments. Strong leisure business enjoyed by hotels last year – up 20% – is expected to continue to grow, depending on a continued weak pound.

    Sainsbury’s and British Land chairmen join late payments start-up (Financial Times), Rated: B

    A UK start-up that is aiming to end the culture of late payment that plagues British business has recruited two FTSE 100 chairmen as investors and advisers.

    David Tyler, chairman of supermarket chain J Sainsbury, and John Gildersleeve, chairman of property group British Land, have joined the advisory board of Previse.

    The London-based business pays supplier invoices instantly and collects the money from customers later. By analysing years of payment data it uses artificial intelligence to calculate the likelihood it can collect from the big customer. It has pilots running with two large corporations and is in talks with dozens more, Mr Gildersleeve told the Financial Times.

    China

    Ping An OneConnect fintech subsidiary raises $ 650 million in financing (Finextra), Rated: A

    OneConnect is the only one-stop FinTech-empowered solutions provider in China. Financing of the three subsidiaries received positive responses, particularly from international institutional investors, including the SoftBank Vision Fund (which invested in Ping An Good Doctor and Ping An Healthcare Technology), International Digital Group (IDG) and SBI Group etc., proving that the capital market fully recognizes Ping An’s technological innovation, the business model for its technology as well as the growth potential and business value of the Group.

    European Union

    Banco BNI Europe Starts to Lend on Multiple P2P Lending Platforms (P2P-Banking), Rated: AAA

    Today Banco BNI Europe announced it will start lending on Fellow Finance.

    ‘Investing via Fellow Finance in consumer and SME loans offers us a great opportunity to easily expand our operations and we are very satisfied with the analytical and professional approach of Fellow Finance in credit intermediation’ echoes Pedro Pinto Coelho, Executive Chairman of Banco BNI Europa.

    U.S. Fintech Stripe Picks Dublin for New Engineering Hub (U.S. News), Rated: AAA

    U.S. payments firm Stripe said on Monday it would place its first engineering center outside its home market in the Irish capital Dublin, attracted by the city’s growing technology workforce and global outlook.

    Robo Advisers Start to Take Hold in Europe (WSJ), Rated: AAA

    Estimates differ, but according to TechFluence, a technology research firm with offices in Frankfurt and London, the European market had assets under management of about $3.5 billion at the end of 2017. That compares with an estimated $200 billion to $250 billion in the U.S., according to Burnmark, a fintech research firm. Estimates of the number of services range from 98 to 126 in Europe, compared with about 200 in the U.S.

    The cost of entry is also much lower: generally €5,000 to €10,000 (about $6,200 to $12,400), versus hundreds of thousands at least for a discretionary service through a bank, says Timo Pfeiffer, head of research and business development at Solactive AG, an index provider that has researched the growth of robo advisers in Europe.

    Popular with banks

    This has led to a number of banking groups preparing robo-adviser offerings, Mr. Mellinghoff says. One example is Comdirect, a subsidiary of Commerzbank , CRZBY -3.17% which launched a robo-advisory platform in May. This service, called Cominvest, had gained assets of more than €200 million as of end of December and is expected to grow rapidly in the coming years, says Sabine Schoon, head of corporate strategy and consulting at Comdirect.

    The European market has also attracted interest from major U.S. providers; BlackRock Inc. BLK -2.98% announced in June 2017 that it was taking a minority stake in Scalable Capital, a robo-adviser specialist that operates mainly in the German and British markets.

    BBVA’s digital push helps drive 20% profit rise (Financial Times), Rated: A

    Spanish bank BBVA’s dash to get customers to buy products digitally rather than in branches helped it report a 20 per cent rise in underlying full-year profits, with results boosted by lower costs as well as higher revenues.

    Top P2P Cryptocurrency Token Etherecash Gets Listed on QRYPTOS, Following Successful Crowdsale (The Daily Telescope), Rated: A

    Top P2P cryptocurrency startup Etherecash has announced that its ECH token will be listed on popular cryptocurrency exchange QRYPTOS on 6th of February 2018, following a successful crowdsale in which the company raised over 40 million USD. This news comes as The Estonian-based lending startup saw a very successful Q4 to 2017 as it gears up for its token distribution in early 2018.

    Crypto-lending ICO Etherecash recorded contributions of over 40 million USD and over 46000 new registrations.

    GN Compass Creating More Liquidity for its Token, GNCT (PR Web), Rated: B

    GN Compass is the first peer-to- peer lending platform for Cryptocurrency-Backed Loans.

    All transactions are verified and distributed on the Ethereum Blockchain. GN Compass is joining an expanding group of pioneering projects integrating the Bancor Protocol to maximize the trading liquidity of GN Compass tokens.

    Mifid tips balance against active funds in favour of ETFs (Financial Times), Rated: B

    New business inflows almost doubled for Europe’s exchange traded fund industry in 2017, in the run-up to the EU’s introduction of rules designed to improve market transparency and strengthen investor protection.

    Net inflows into European-listed ETFs reached a record $108bn last year, up from $55.7bn in 2016, according to ETFGI, a London-based consultancy.

    International

    Disruptive innovation in equity crowdfunding (Deloitte), Rated: AAA

    A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” studies the disruptive forces shaping the future of equity crowdfunding.

    View the infographic here.

    Disruptive innovation in digital banking (Deloitte), Rated: AAA

    A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” examines disruptive innovation in digital banking.

    View the infographic here.

    IdentityMind Global Introduces KYC and Anti-Money Laundering Plug-in for ICOs (Crowdfund Insider), Rated: A

    IdentityMind Global, Digital Identities You Can Trust, an SaaS platform that builds, maintains and analyzes digital identities worldwide, allowing companies to perform identity proofing, risk-based authentication, regulatory identification, and to detect and prevent identity fraud, announced the immediate availability of its KYC Plug-in for ICOs which provides a turnkey solution for customer onboarding functionality and user experience to walk ICO participants through the know your customer (KYC) process to meet regulations worldwide.

    BFB partners with US real estate fintech start-up (Trade Arabia), Rate: A

    Bahrain FinTech Bay (BFB) and the Fintech Consortium (FTC) have announced a strategic partnership with OffrBox, a New York City-based Fintech start-up that has developed an end-to-end real estate transaction platform on which one can buy and sell residential properties online.

    India

    How early-stage startups raise money (Times of India), Rated: A

    The first ’round of funding’ Abhishek Latthe got when he was setting up his wearable device startup SenseGiz in 2013 was from his family and friends. The next year, he set up a crowdfunding page on Kickstarter and raised $47,000. Late in 2014, he took out a bank loan. It was only two years later in 2015, that he could convince Karnataka Semiconductor Venture Capital Fund to back him with Rs 3 crore.

    Banks do not back companies without collateral and since the business model is unproven, other investors too hesitate. So, funding options include getting help from friends and family, crowdfunding, or dipping into one’s savings, but how do founders decide on the path to take?

    Gadkari says peer-to-peer lending and bridge funding, which fulfil a company’s short-term working capital needs, have also become popular. Choosing the best funding option depends on the company’s need. The next step for an entrepreneur is to negotiate the company’s valuation.

    FinTech will revolutionise lending in India, says Faircent CEO (money control), Rated: A

    Lending is one of the oldest professions in the world and is one of the pivotal reasons for the banking system to take shape.

    There is evidence of lending activities dating back to 2,000 BC between merchants, farmers and traders.

    However, up till now, lending as an activity has been largely limited to financial institutes such as banks and Non-banking Financial Companies (NBFCs).

    For instance, lenders on Faircent.com usually avail average gross returns of 18% to 26% per annum. This makes online P2P loans a lucrative alternative investment avenue for them.

    What makes online P2P lending even more lucrative as an asset class for potential investors is the fact that it offers lenders the opportunity to diversify their investments across multiple risk buckets and loan requirements.

    Source: money control

    Everything you need to know as pressure mounts on cryptocurrencies (GK Men), Rated: B

    Sapan Gupta a Practice-Head at Shardul Amarchand Mangaldas said, “capitalising on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors”.

    APAC

    After a Successful Crowdsale Campaign, Karma (KRM) Begins Trading With Blockchain (Coin Idol), Rated: AAA

    Decentralized p2p lending platform Karma has just announced trading as well as access to its platform and blockchain solutions. The project has now been backed by Danish fintech startup OpenLedger. Karma’s p2p lending platform can be used on the OpenLedger DEX platform and the Korean exchange CoinLink.

    Why Blockchain’s Growing Pains Could Benefit Underbanked SMBs (PYMNTS), Rated: AAA

    According to a report released earlier this month by EY, 21 percent of people in the world — about 1.6 billion people — are underbanked. More than 200 million micro and SMBs fall into the underbanked category, too, with access to finance the largest hurdle for many of these firms.

    EY pinpointed the APAC region as a particularly wide opportunity for financial services players to address this gap: Bank revenue in this market, researchers said, could reach $88 billion by 2020. If traditional banks don’t step in, alternative financial services firms will.

    “A lot of smaller, private small businesses are under-funded,” Tran noted. “It’s not like here [in the U.S.], where we have an established financial and banking system. If you implement something like a decentralized blockchain, a P2P lending system, that would enable [SMBs] to get funded a lot easier than going through the normal banking system. With blockchain technology, you can put a platform together that is smart contract-based, allowing individual investors to participate in a growing economy. On the other hand, you allow [SMBs] to get funded very quickly.”

    MENA

    Top 20 Fintech Startups In The Middle East (Forbes), Rated: AAA

    1 PayTabs
    Online payment processing solutions

    2 Souqalmal.com
    Financial products comparison site

    4 Beehive
    SME focused peer2peer lending platform

    5 Yallacompare
    Financial products comparison site

    8 liwwa
    Peer-to-peer lending platform

    StartAD launches on February 18 for fintech startups (Arabian Business), Rated: A

    Innovation platform startAD will host a ten-day entrepreneurship programme, Venture Launchpad, at New York University Abu Dhabi (NYUAD), from February 18-27.

    It will see ten fintech startups pitch their business ideas to investors. UAE-based early-stage startups are encouraged to apply by February 12, 2018, the application deadline.

    The programme will equip them with the tools and knowledge to develop a scalable and capital efficient scheme. These include insights into crowdfunding, peer-to-peer lending, blockchain, algorithmic trading, credit scoring, cryptocurrency, payments, insurance tech and money transferrals.

    Latin America

    Brazilian Fintech EBANX Secures $ 30 Million Investment From FTV Capital (Crowdfund Insider), Rated: AAA

    Brazilian fintech EBANX announced on Wednesday it has secured a $30 million investment from FTV Capital.

    EBANX also processes payments for major merchants from 50 different countries, including the U.S. and China. The company reported that just last year it processed $1.2 billion in cross-border transactions and achieved the milestone of helping more than 30 million users from the region gain full access to major international e-commerce merchants.

    Authors:

    George Popescu
    Allen Taylor

    Friday January 12 2018, Daily News Digest

    bitcoin debt

    News Comments Today’s main news: More LendingClub-IEG drama.Black Fish raises $145M.Moneygram partners with Ripple.Kreditech expands into India with Mambu. Today’s main analysis: JP Morgan Chase’s investments into digital technology.Is Yirendai undervalued? Today’s thought-provoking articles: Investors go into debt to buy bitcoin.Small business financing trends.How open banking could change how people manage money.Banks, trade finance, and […]

    bitcoin debt

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    India

    APAC

    Africa

    News Summary

    United States

    Lending Club has a bitcoin pivoting suitor (Financial Times), Rated: AAA

    Lending Club has all kinds of problems: a history of profit warnings, faint traces of scandal after a management upheaval almost two years ago, and a share price still more than 80 per cent adrift from its peak.

    Add to that list: a bizarre, crypto-fuelled activist campaign waged by a Las Vegas-based payday lender called Paul Mathieson, who told authorities in his native Australia that he fled to America in 2008 because he feared being killed by a mobster.

    Mathieson’s case for change at Lending Club, laid out in a letter to the company’s board on 2 January, is not a terrible one, on the face of it. He argues that the cost structure at the loss-making company, a pioneer in peer-to-peer lending, is “excessive,” noting fancy headquarters in San Francisco and “hundreds” of “excess” developers. He says that the board should consider a pivot to using its own balance sheet to lend, rather than acting as a broker, taking fees for matching borrowers with lenders. Underwriting has been sloppy, he says, resulting in sub-par returns to investors.

    Mathieson is offering 13 shares in his own penny-stock company, IEG Holdings, for every share in Lending Club. At the time of the offer on Monday morning, that was a premium of 19 cents, or about 5 per cent.

    Source: Financial Times

    SeeThruEquity Issues Update on IEG Holdings Corporation (Bay Street), Rated: A

    IEG Holdings Corporation (OTCQB: IEGH) provides online unsecured consumer loans under the brand name “Mr. Amazing Loans” via its website, www.mramazingloans.com, in 20 US states. The company offers $5,000 and $10,000 personal loans over a five-year term at rates ranging from 19.9% to 29.9% APR. IEG Holdings plans future expansion to a total of 25 US states, which would cover 240mn people and represent approximately 75% of the US population.

    Since 2013, IEGH has obtained additional state lending licenses, and they are licensed and originating direct consumer loans in 20 states including: Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. The Company was founded in 2010 and is headquartered in Las Vegas, Nevada.

    IEG Holdings Plans to Create its own IEGH Crypto/Blockchain Currency Backed by Gold Metal and SEC Registration as a Security

    IEGH announced that its wholly owned subsidiary, Investment Evolution Crypto, LLC (“Crypto”), is negotiating to purchase a gold project with gold metal in the ground and prospecting licenses. IEG Holdings plans to utilize a gold resource to investigate creating, through Crypto, and a joint venture with Investment Evolution Corporation, also a wholly owned subsidiary of IEG Holdings, its own gold metal-backed crypto/blockchain currency, and potentially offer loans and accept loan repayments in its own crypto/blockchain currency.

    IEGH increases loan originations

    The company stated that it provided $960,000 in new consumer loans through its online property mramazingloans.com, from the October 2017 to December 2017 period. This represented a 12.3% increase over its July to September 2017 operating period, during which the company’s new loan originations were $855,000.

    Desperate to get into bitcoin, investors slip into debt (CNBC), Rated: AAA

    Roughly 18 percent of people who buy bitcoin use a credit card to do so, according to a new survey by loan marketplace LendEDU. Of those, 20 percent have not paid off their balance. The phrase “buy bitcoin with credit” has been trending on Google for weeks.

    Another problem with going into debt for cryptocurrencies is that people will have to pay back their debt before they see sufficient returns, said Erika Safran, founder of Safran Wealth Advisors. That may require tapping other resources, potentially creating further financial trouble.

    Credit card debt from CNBC.

    Small Business Financing Trends To Stay Abreast Of (CXO Today), Rated: AAA

    • Traditional bank loan rejections are notoriously high in all markets
    • Small Business Administration (and equivalent agencies) are nefarious for overextending the time-to-credit tolerances of small businesses
    • Volatility of markets, and exposure of almost all markets to disruption by startups could pose urgent cash needs for businesses, which are generally not considered for loan applications by traditional lenders.

    Online Lending And Its Deepening Hold Over The Small Business Finance Market

    In 2014, a Federal Reserve (US) survey concluded that one in five small business owners opted for loans from online lenders. Since then, the proliferation of online lending platforms has been on the surge, to the extent that traditional brick and mortar lending institutions have also had to move base to the online domain. In the coming years, multiple factors will result in the success and sustainability of online lending platforms. These include:

    • Growing confidence among small business owners to trust online lending platforms
    • Availability of cheaper, quicker, and more convenient loans
    • Options to truly personalize and customize the loan repayment terms to suit the business’ interests

    The Call for Transparency in the Online Lending Market

    Though the online lending market has been growing year on year, this doesn’t detract from the concerns around lack of transparency in the way some of these platforms operate. Some of the key concerns are around undisclosed APRs and hidden fees. In fact, some online lenders have been castigated for charging significantly high rates of interests from borrowers, often with service quality issues post-approval. Thankfully, there’s already some progress towards bringing a degree of regulation in place for online lending platforms to be at par with traditional lending regulations.

    JPMorgan Chase Competitive Strategy Teardown: How The Bank Stacks Up On Fintech & Innovation (CB Insights), Rated: AAA

    JPMorgan is making a bigger push into payments technology as digital banking becomes a strategic priority.

    In 2016, the bank spent $9.5B on technology and Dimon has committed $300M alone to improve JPMorgan’s technology for its asset management products. Relative to its peer group, JPM claims the highest number of mobile banking customers and its Chase Mobile app currently sports a 4.7 (out of 5) rating in the App Store.

    Earnings call analysis – Barclays, Bank of America, Morgan Stanley talking up digitization

    • JPM discussed continued digital consumer banking growth, which grew 6% in Q3’17.
    • Bank of America spent portions of its Q1’17 and Q3’17 talking about digital banking initiatives and technology investment. Specifically, CEO Brian Moynihan mentioned the bank spent $2.25B on technology initiatives in the first three quarters of 2017. The bank also now sees mobile devices account for 1 of every 5 deposit transactions.
    • On Morgan Stanley’s Q3’17 earnings call, Morgan Stanley CFO Jonathan Pruzan mentioned the bank is beta testing new customer-facing digital products it plans to launch, potentially in the robo-advisory space. Specifically, Pruzan noted: “When we think about our wealth business, it’s a business that’s built on scale. And it’s built on the fact that people with wealth want personal advice. So it’s going to be both a mix of technology and digital with the personal element of the advice channel. And we think that’s the winning formula going forward.”

    Based on the data, JPMorgan ranks ahead of most bulge bracket banks when it comes to overall fintech investment since 2013, but behind its peers Goldman Sachs and Citi.

    Online Marketplace Lender Nav Facilitated More Than 20,000 Small Business credit Approvals in 2017 (Crowdfund Insider), Rated: A

    Nav, a small business marketplace lending platform, announced this week it has facilitated more than 20,000 small business credit approvals in 2017.

    The company currently has more than 327,000 entrepreneurs now using its platform to manage their data and access capital.

    Bono’s Fund Makes Its First Fintech Investment, Backing Acorns (Bloomberg), Rated: A

    The Rise Fund, a private investment firm co-founded by the U2 lead singer, is making its first known bet on a fintech business by backing Acorns Grow Inc., said people familiar with the matter, who asked not to be identified because the details are private.

    Georgia Company Acquires S.D. Fintech Startup LoanHero (San Diego Business Journal), Rated: A

    LoanHero, one of San Diego’s few financial technology startups, has been acquired by Georgia-based company LendingPoint.

    Terms of the deal, announced Jan. 11, were not disclosed.

    Small-dollar lender Oportun to open 20 offices in Florida (American Banker), Rated: A

    Oportun, a community development financial institution that provides small loans to individuals with little or no credit history, is planning to open 20 lending offices in Florida.

    The Redwood City, Calif.-based lender said this week that it has already opened four offices in Miami and Hialeah and that it expects to add 16 more in the Sunshine State, primarily in South Florida, by the end of the year.

    6 Key Trends in Fintech to Watch in 2018 (Lend Academy), Rated: A

    1. Convergence of Software and Financial Products  One of the important lessons that Square taught the market is that bundles of software solutions (loyalty, POS, analytics, scheduling and many others) and lending are essential drivers in advancing growth of payment processing.
    2. InsureTech
    3. The Power of the Machines  Companies like LendingClub are using machines to discover new relationships and patterns to introduce more tailored financial offers to their customers.
    4. Emerging Economies  Many growing companies in Africa, Asia, and Latin America are developing and adopting financial solutions, often faster and with more innovation than in developed economies.
    5. Wealth Management
    6. Rise of Crypto and Blockchain

    Google Pay brings payment tools under a single brand (Tearsheet), Rated: A

    The Internet giant is finally putting its many payments capabilities — Google Wallet, Android Pay and Pay with Google — under a single name, Google Pay, after lagging for years behind Apple Pay and Samsung Pay.

    Ladder Secures $ 30M Series B Led by RRE Ventures (coverager), Rated: A

    CA-based life insurance MGA Ladder announced it has raised $30M in a Series B round led by RRE Ventures, with participation from Thomvest Ventures, as well as Ladder’s existing investors: Canaan Partners, Lightspeed Venture Partners and Nyca Partners . Ladder launched its fully-digital life insurance solution in California on January 10, 2017, and has since expanded to nearly every state across the country.

    Fifth Third regains top CRA grade, an entree to M&A (American Banker), Rated: A

    Fifth Third Bancorp has received top marks from the Federal Reserve on its most recent Community Reinvestment Act examination as expected.

    Fifth Third announced the results on Wednesday, saying in a press release that the Fed gave it an “outstanding” rating on its most recent exam. The Cincinnati company had said in a regulatory filing last month that it expected to ace the test, which covered the period between Jan. 1, 2014, and June 30, 2016.

    A Beginner’s Guide to Applying for College Loans (Student Loan Hero), Rated: A

    Student loan debt statistics show that more than 70 percent of students graduating from four-year colleges have debt, so you aren’t alone if you need to borrow to cover educational costs.

    Step 1: Understand your options

    • Federal loans for students
    • Federal loans for parents
    • Private loans for students
    • Private loans for parents
    Source: Federal Student Aid

    Step 7: Determine if you’ll need to apply for private loans

    • Family contributions if parents or other family members are willing and able to pay
    • Savings
    • Scholarships or grants from community groups or other sources
    • Parent PLUS Loans
    • Private student loans

    Step 8: Learn how to apply for private student loans

    Because there are many private student loan lenders, it’s a good idea to shop around. You should consider:

    • Loan eligibility requirements: What do you need to qualify?
    • Loan terms: How long do you have to repay the loan?
    • Repayment terms: When do you need to start repaying, and is there a prepayment penalty?
    • Fees: Is there a cost to apply for the loan or a loan origination fee?
    • Interest rates: Is the rate fixed or variable? How much will you pay to borrow?

    You can visit our private student loan marketplace to find private student loan lenders offering loans to parents and students.

    Here are the top 6 lenders of 2018!

    LENDER RATES (APR) ELIGIBLE DEGREES
    CHECK OUT THE TESTIMONIALS AND OUR IN-DEPTH REVIEWS!
    2.58% – 7.25% Undergrad
    & Graduate
    VISIT SOFI
    2.57% – 6.39% Undergrad
    & Graduate
    VISIT EARNEST
    2.76% – 7.25% Undergrad
    & Graduate
    VISIT COMMONBOND
    2.99% – 5.15% Undergrad
    & Graduate
    VISIT LAUREL ROAD
    2.74% – 7.26% Undergrad
    & Graduate
    VISIT LENDKEY
    3.11% – 8.46% Undergrad
    & Graduate

     

     

    Roostify adds tech veteran Adnan Habib as vice president of engineering (Housingwire), Rated: B

    Roostify announced Thursday that it hired Adnan Habib as the company’s new vice president of engineering.

    In this role, Habib will lead Roostify’s growing product delivery team and will be responsible for making improvements to the Roostify’s digital lending platform.

    Roofstock Appoints Suresh Srinivasan as Chief Marketing Officer (BusinessWire), Rated: B

    Roofstock (www.roofstock.com), the leading online marketplace for buying and selling leased single-family rental homes, today announced the strategic hire of Suresh Srinivasan as chief marketing officer. Srinivasan has 20 years’ experience leading marketing, product, and e-commerce functions at Fortune 500 and high-growth tech startups. Most recently serving as the SVP of Marketing for Xome, Srinivasan brings a deep understanding of the fast-growing real estate technology sector to Roofstock where he will be responsible for accelerating growth of Roofstock’s marketplace for single-family rental homes and developing the company’s partnership network.

    United Kingdom

    An invisible banking reform that ‘could fundamentally change how we manage our money’ is days away (Business Insider), Rated: AAA

    Regulators in Europe and the UK are ordering banks and credit card companies to share customer data with other companies if their customers agree. The companies will also be able to carry out payments on a customers’ behalf.

    Open Banking forces lenders to offer a digital “fire hose” of data that any third party can use to get standardised access — provided the startup is registered with the UK Financial Conduct Authority (FCA) and the customer agrees to share their data. They won’t have to negotiate deals with banks, just plug into their digital systems and go.

    The aim of Opening Banking is to give customers greater control over their data and to encourage account switching.

    An investigation by the UK Competition and Markets Authority in 2015 found just 3% of customers switched their banks in the last year, meaning many were left with accounts that were not right for them.

     

    ThinCats Says 2018 is Poised for Growth in SME Lending (Crowdfund Insider), Rated: A

    ThinCats says 2018 is poised for growth. The online lender reports that December was a record month booking £12 million of funding listed on the platform followed the biggest-ever ThinCats-listed loan of £6.7 million to the Chelsea Yacht & Boat Company at the end of September.

    Loan Store Reveals to Reduce Interest Rates on Instant Cash Loans for the UK People (MENAFN), Rated: A

    Loan Store is the responsible lending hub that reveals to reduce the interest rates on instant cash loans for the UK people.

    Hennery Dicosta, a senior adviser of Loan Store, has offered the complete details about this announcement. This is what he said- In a recent scenario, people usually try to borrow a small loan amount. That is why we have decided to provide the loans for bad credit people with no guarantor and no fees on an instant decision to resolve their short term emergencies. We never charge any processing fee and we are now providing these loans on quite low rates of interest. Besides, we do not judge the creditworthiness of the borrowers with their credit rating and give an instant decision on their loan request.

    Crowdstacker joins the Peer-to-Peer Finance Association (P2P Finance News), Rated: B

    CROWDSTACKER has joined the Peer-to-Peer Finance Association (P2PFA), becoming the self-regulated trade body’s eighth member.

    The business lending P2P platform will be represented by chief executive Karteek Patel.

    China

    3 Growth Stocks at Deep-Value Prices (The Motley Fool), Rated: AAA

    With that in mind, we asked three Motley Fool investors to each profile a company that has a low valuation now compared to its earnings-growth potential. They identified Yirendai (NYSE:YRD)Criteo S.A.(NASDAQ:CRTO), and Changyou.com (NASDAQ:CYOU) as strong contenders trading at attractive discounts.

    China’s first P2P online lending platform

    The Chinese P2P lending market blossomed in the late 2000s, catering to  customers who were underserved by traditional banks, and is worth about $60 billion today.

    Analysts expect Yirendai’s revenue and earnings to rise 74% and 14% respectively this year, followed by 43% revenue growth and 41% earnings growth next year. Yet the stock trades at just 14 times earnings, compared to an industry average of 26 for credit service providers. Based on those numbers, Yirendai looks likely an undervalued growth stock.

    But there are some obvious reasons why investors are discounting it.

    First, Yirendai is a subprime lender. Just 1.7% of its loans were rated as prime “Grade A” last quarter. Another 8.7% were Grade B, and 14.1% were Grade C — but 75.5% were rated Grade D. Yirendai collects higher fees from lower rated borrowers, but its business could collapse if its delinquency rates rise.

    The company only discloses delinquency rates for loans past due by 15 to 89 days, and that rate came in at a low 1.8% last quarter. But it doesn’t report any data on loans delinquent for over 90 days.

    Chinese finance platform Black Fish raises $ 145m from Gobi, Lightspeed, others (Deal Street Asia), Rated: AAA

    Black Fish, a consumer finance platform based in China’s Nanjing region, has received $145 million in a series A round from a cluster of firms  including Lightspeed China Partners and Shanghai and Kuala Lumpur based Gobi Partners.

    Others who participated in the round include Morningside Venture Capital, JAFCO Asia, Fullcent Capital and Zhang Tao, founder of Dianping.com.

    At this point, the average annual growth rate of consumer finance is 16.4 percent.

    China’s Renren Is Poised To Unlock Value From Its Investment Portfolio And Grow With Blockchain (Seeking Alpha), Rated: A

    Renren holds a significant investment portfolio that is easily worth $12 per share.  This value will likely be realized in the near term due to multiple catalysts.

    The company has started to get involved with blockchain-related businesses, which potentially turns them into a “blockchain play”.

    This situation leads to an asymmetrical payoff structure in which there is very little downside and significant upside. My target price is $18.

    Renren was an early VC investor in Sofi, taking part in its seed round of financing as well as a later follow-on round. They currently hold a 13% stake in SoFi, having sold 14.1% of their holdings (representing 2% of SoFi) in April 2017 for $92 million.

    Source: Seeking Alpha

    Dianrong Signs Strategic Agreement with Dalian Finance Development Bureau & Dalian Finance Industry Investment Group (PR Newswire), Rated: A

    Dianrong and the Dalian Finance Development Bureau and Dalian Finance Industry Investment Group (DFIIG) recently signed a strategic cooperation agreement to drive financial innovation in Dalian and across China. According to the agreement, Dianrong will develop a series of specific projects in partnership with the Dalian government, including:

    • Assist the Dalian Finance Development Bureau in creating a financial technology (fintech) cloud platform to provide fintech capabilities for small loan and guarantee companies, and other small and medium-sized financial institutions in the region and at large. Tools and services will include sophisticated fraud detection, big-data risk management tools, payment channel integration, and compliance reporting. The fintech cloud platform will also provide regulators with easier monitoring of local lending activities and trends in an ongoing and comprehensive way, helping them provide timely policy guidance and support on risk management.
    • Work with DFIIG to establish a special Internet finance investment fund for Dalian. The fund will focus on investment in fintech projects and startups with the potential to strengthen Dalian’s new economy and financial services industry.
    • Develop a supply-chain trading platform in Dalian utilizing advanced fintech and blockchain capabilities to help more small and medium-sized suppliers secure needed funding. Last year, Dianrong created the first blockchain platform for supply-chain finance with FoxConn Group, a global leader in consumer electronics.

    Shanghai tightens financial sector supervision (Ecns), Rated: B

    Shanghai is one of China’s largest financial markets by market trading volume. In 2017, its trading volume was 1,438 trillion yuan ($220.9 trillion).

    Shanghai has already launched a campaign against fraud and illegal behavior in financial consumer markets, such as internet-based peer-to-peer lending, cash loans to college students, and pay-day loans.

    European Union

    Rocket Internet CEO says ready to pounce with cash pile (Business Insider), Rated: AAA

    Germany’s Rocket Internet needs to hold on to its mountain of cash so it can compete with rivals from the United States and China and pounce when investment opportunities arise, the chief executive said in an interview.

    CAUTIOUS MARKET

    Rocket is invested in more than 100 start-ups, including in financial and property tech, logistics and travel sites, with its stakes in the five biggest of them potentially worth more than 1 billion euros to Rocket, according to Berenberg bank.

    International

    MoneyGram Signs Deal to Work With Currency Startup Ripple (WSJ), Rated: AAA

    MoneyGram International Inc. MGI +2.63% signed on to run a pilot program testing XRP, a digital currency created by San Francisco startup Ripple, in its payments network, the companies said Thursday.

    The Dallas-based company agreed to test XRP as a tool for reducing money-transfer costs and settlement times.

    How Banks Can Use Trade Finance Services and Data to Increase Share of Wallet (Traxpay), Rated: AAA

    While global trade presents tremendous growth opportunities, businesses of all sizes are none-the-less finding it difficult to access much needed credit, resulting in a global trade finance gap. According to an Asian Development Bank’s (ADB) 2017 Trade Finance Gaps, Growth, And Jobs Survey, that gap was $1.5 trillion in 2016.

    Non-financial institution competitors are aggressively targeting this market, using innovations such as blockchain to develop products and tools that not only replace outdated paper and manual-based processes, but also deliver unprecedented levels of cybersecurity that are critical in today’s digital transaction space. The same ADB survey revealed more than $13 billion in venture capital was invested in FinTech trade finance in 2016 alone.

    The recent Simmons & Simmons Hyperfinance studyof the world’s leading trade banks found that only 7% believe they are at the forefront of digital innovation in spite of the fact that 80% of innovation leaders report digitally-driven products and services introduced over the past three years have expanded revenue growth. This illustrates the reality that financial institutions recognize the importance of developing a digital strategy, but few are moving aggressively enough to take advantage of these new technologies.

    PRINCIPLES, ESG, AND CREDIT RISK (All About Alpha), Rated: AAA

    The question before the house right now, though, is: what about the credit rating agencies? The question comes in three parts: there are the global CRAs; the smaller/regional CRAs in most of the world, and regional CRAs in the special case of China.

    First, the global CRAs [there are just two of them, Moody’s and S&P] are making “strong efforts” to incorporate an understanding of ESG issues. They are hiring staff with ESG backgrounds, equipping their existing analysts with the relevant expertise, and drawing on third party providers.

    Then there is China. Its CRAs include Dagong Global, China Chengxin, and Golden Credit Ratings. The idea of integrating ESG into their analyses is thus far limited to the issue of green bonds, that is, bonds issued for the development of brownfield sites. Government policy in China encourages green bonds and the CRAs have responded. The resulting assessments are focused on the “E,” not so much the “S” or the “G.” And their environmental assessments rely on measuring the impact of the project the bond aims to finance.

    • Research very generally supports the hypothesis that there exists a causal link between ESG factors and the credit worthiness of a borrower;
    • Academic research in limited in that it is too exclusively content to measure credit risk by credit ratings, rather than testing the ratings themselves against alternative measures;
    • But some research does employ the spread of credit default swaps as an independent measure of risk;
    • Anecdotal observation indicates a clear link between G and defaults, although the linkage between E and S and defaults is more difficult to pin down;
    • There is much evidence in the linkage of ESG to macroeconomic factors and potential growth, which in turn are important to sovereign risk in particular.

    ABS braces for more auto deals after strong start to year (IFR), Rated: A

    The asset-backed bond market is braced for a slew of new issues next week, with deal flow expected to be dominated by auto issuers including BMW and Mercedes.

    Just two issuers sold deals this week – GM Financial and Consumer Portfolio Services – and both auto trades were met with strong demand from investors. One banker on the GM deal said the deal was over-subscribed across the capital stack.

    The biggest tightening though was seen on the smallest and lower rated tranches. The 3.58-year Class B, rated Aa3/AA by Moody’s and Fitch, priced at 30bp over interpolated swaps versus guidance of 35-40bp and whispers of 45bp area.

    The 3.58-year Class C, rated A1/A, priced at 50bp over interpolated swaps versus guidance of 55-60bp and whispers of 65bp area.

    FROM BANKING TO BITCOIN, FINTECH IS POISED TO CHANGE THE WORLD (Tech Genix), Rated: A

    Currently, it represents only 1 percent of the global financial industry. By comparison, digital media accounts for 40 percent while eCommerce accounts for around 10 percent.

    Source: Tech Genix

    To give you a perspective, venture capitalists invested more than $13 billion across 840 different fintech holdings in 2016, according to a report by KPMG. This is 7 percent more than they invested in 2015.

    According to the McKinsey report, five areas will see high growth over the next decade. They are consumer finance, mortgage, lending, retail payment, and wealth management.

    Online payments

    PayPal handled $1.73 billion worth of transactions in the first quarter of 2017 alone, representing a 30 percent increase year-on-year.

    Borrowing and lending

    However, the delinquency rates have been increasingover the last few years. These rates have increased from 0.56 percent in January 2015 to 0.75 percent in December of the same year.

    Overstock.com’s 2017 Highlights: Innovation, Expansion, and Recognition (Business Insider), Rated: A

    Overstock’s blockchain-focused subsidiary, Medici Ventures, named its board of directors in 2017, and also saw a number of its portfolio companies continue to use blockchain to revolutionize industries including capital markets, money and banking, property registry, voting, identity, and underlying blockchain technology, including:

    • tZERO, the world’s first SEC approved, blockchain-based alternative trading system, launched its initial coin offering (ICO), which attracted over 10,000 subscribers and raised $100M in commitments in the first 12 hours of its pre-sale. A significant portion of the tZERO security tokens issued will be available to accredited investors in the public sale beginning in January, 2018.
    • DeSoto Inc., a joint venture between Overstock.com founder and CEO Patrick Byrne and world-renowned economist Hernando de Soto, was created to develop a global property registry system to surface the property rights of billions of people in the developing world.
    • Bitt, a Barbados-based financial technology company using blockchain to create central banking tools and mobile money applications, named Rawdon Adams, son of former Barbadian Prime Minister Tom Adams, as its CEO. Bitt also fully launched its new mMoney digital payment product, bringing to market a blockchain-based mobile wallet that allows users to participate in digital transactions on their smartphones without the need for a traditional bank account, helping to foster financial inclusion in the region.
    • South-American based Ripio (formally known as BitPagos), participated in an ICO that raised $37M to fund its Ethereum-based peer-to-peer lending platform, Ripio Credit Network.
    • Belgium-based SettleMint launched a token sale for its DataBroker DAO, a peer-to-peer marketplace created to provide Internet of Things (IoT) sensor-owners with a clear path to data monetization, and data consumers with a decentralized marketplace in order to buy IoT sensor data. SettleMint also signed an agreement with The Islamic Research and Training Institute, the research arm of the Islamic Development Bank Group, to work with local partner Ateon on developing blockchain-based financial products that can be used to support development and inclusion in IsDB member countries.

    Global lender selects Aussie fintech, Trade Ledger, as worldwide technology partner (PR Newswire), Rated: A

    Zürich-based lender, TradePlus24, has selected Australian deep tech startup, Trade Ledger, as its global technology partner to roll out its new trade insurance wrapped lending product across their European lending network, and enter the Australian market.

    Bankers fear they will get Amazon-ed in tech disruption (Financial Times), Rated: A

    According to IDC, only about a quarter of US bank technology budgets is spent on digital transformation, as opposed to business as usual. They expect this to grow to nearer 40 per cent in 2020.

    Secondly, this spending could substantially boost banks’ productivity, and profits.

    Banks will drive up the cost of customer acquisition for start-ups who will increasingly struggle unless they build network effects and scale very quickly. Roboadvisers and peer-to-peer lenders will be on heightened alert. Some start-ups will need to rethink their plans to disrupt and look to form partnerships instead.

    Changes in financial regulation, such as a lighter touch fintech charter being examined in the US or the second payment services directive in Europe, could potentially make this more likely. The tech giants have the brands, customer reach, digital processes and flair to develop good products, and to take swift advantage of any regulatory changes.

    Karma token trading opens after successful million ICO campaign (Crypto Ninjas), Rated: B

    India

    German Online Lender Kreditech Heads to India (Bank Innovation), Rated: AAA

    German online lender Kreditech is making its way to India, Bank Innovation has learned.

    For this expedition, the fintech has teamed up with SaaS banking platform Mambu for providing short-term lending products specifically tailored to local consumers.

    Kreditech selects Mambu’s SaaS banking engine for its passage to India (Finextra), Rated: A

    Kreditech currently operates in Europe and Latin America and will expand into India in early 2018, together with its partner PayU, a global online payments provider and Mambu client in Latin America.

    The loan product is expected to go live in the first quarter of 2018, all data will be hosted by AWS India.

    NiYO Solutions Raises $ 13.2M in Series A Funding (FINSSMES), Rated: A

    NiYO Solutions Inc., a Bangalore, India-based fintech startup for salaried employees, raised $13.2m (85 crore) in Series A funding.

    APAC

    Myanmar takes small steps towards providing greater liquidity for SMEs (Myanmar Times), Rated: AAA

    A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

    A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

    Currently, local banks extend loans at interest rates ranging between 8.5 percent and 13pc. The local banks began offering SME loans at8.5pc interest in 2015. Since then, the Japan International Cooperation Agency (JICA) and KfW Development Bank from Germany have also launched SME loans.

    P2P lending

    To get around the financial constraints, borrowing from family members and peers is common.

    In fact, a rising number of businesses have resorted to P2P lending for funds to build up their businesses. Without any guarantees of success though, many entrepreneurs ultimately end up in debt. Others fall prey to fraud. Last year, The Myanmar Times reported at least three cases of fraud involving fake promises of repayments with up to 30pc interest.

    Cloud Lending Solutions Recognized as a Top 25 FinTech Company of 2017 (BusinessWire), Rated: B

    Cloud Lending Solutions was recognized as a “Top 25 FinTech Company for 2017” by APAC CIO Outlook Magazine. A panel of industrial experts and executives collaborated with the editorial board to curate the list with an aim to provide clarity into the ideal FinTech partners.

    Africa

    Local digital currency eyes real estate disruption (ITWeb), Rated: AAA

    Cape Town-based fintech company, Wealth Migrate, has launched a global   – WEALTHE Coin.

    According to Wealth Migrate, while almost half of the world’s wealth is held in real estate, fewer than 13% of people have access or the resources to invest in and  from this lucrative market.

    Authors:

    George Popescu
    Allen Taylor

    8 Key Reasons Small Businesses Are Denied Loans

    life insurance sba loans

    There’s no doubt about it: growing a small business is no small challenge. No matter how amazing your idea or product, you’re bound to encounter some serious mountains. According to a TD bank 2017 Business Survey, some of the key challenges that small US-based businesses face today are rising interest rates and rising healthcare costs, both […]

    life insurance sba loans

    There’s no doubt about it: growing a small business is no small challenge. No matter how amazing your idea or product, you’re bound to encounter some serious mountains.

    According to a TD bank 2017 Business Survey, some of the key challenges that small US-based businesses face today are rising interest rates and rising healthcare costs, both of which can be at least partly attributed to uncertainty surrounding the state of political leadership.

    And these days, more and more small businesses like startups are turning to credit cards and other forms of financing over bank loans than ever before. This is partly because some one in four businesses applying for credit were denied, and the ones who received financing did not get as much as they needed.

    According to the Federal Reserve Bank of New York:

    “… although many employer small businesses were profitable and optimistic, a significant majority faced financial challenges, experienced funding gaps and relied on personal finances. These issues were even more pronounced for the smallest firms, which were less likely to receive necessary funding and more likely to rely on personal finances to operate.”

    Despite the fact that the vast majority of businesses in the United States are classified as small businesses – that is, they have employee bases of 500 or less – approximately half of all businesses fail in the first 5 years.

    Many of these fail due to lack of funds and a lack of finances.

    On top of that, even the businesses that succeed don’t even break even for 2 or 3 years, making financing at the outset crucial. The tricky part is that securing financing is also the most difficult part, which is why so many small businesses are denied financing. And owners are understandably frustrated.

    Here are a few key reasons why small businesses are often denied funding.

    An Uncertain Economic Climate

    Uncertainty behind the local and regional economy is a basic stressor and reason behind the struggle many small businesses encounter. This very uncertainty is why so many businesses are likely to seek financing.

    Unfortunately, this problem is also a reason why banks are less likely to give loans. When times are tight, lending is too. Banks aren’t inclined to lend when it’s possible the economy will take a dive, tanking many small businesses.

    Because of this, many people are turning to personal savings, lines of credit, and even loans from family and friends.

    Lack of Collateral

    Collateral is some type of asset which secures the loan. This collateral can be some type of equipment, real estate, or anything else a bank could repossess and sell if the business fails to repay the loan.

    It’s crucial for small businesses to list collateral on loan applications for the obvious reason of showing that they can pay it back in the case of default. The problem is that most startups don’t have much collateral like vehicles or business equipment. The result is the small business is denied a loan.

    Gender and/or Ethnic Bias

    Unfortunately, there appears to still be a major gap here, even though lenders are not supposed to be biased in this way. In fact, loan approval rates are much higher for white males than they are for women and minorities.

    According to gudcapital.com:

    “… small businesses that were more than 50 percent owned by a woman only received 15 percent of all SBA 7(a) loan approvals; American Indian owned businesses received 1 percent; Asian owned businesses received 24 percent; African American owned businesses received 2 percent; Hispanic owned businesses received 6 percent; White owned businesses received 53 percent; and male owned businesses received 70 percent of all SBA 7(a) loan approvals.”

    The sexism can be so bad that some female founder resort to extreme measures, like creating an imaginary male founder to dispel the bias.

    Bad Credit History

    If a business owner has a terrible credit score, there’s a really good chance they’ll be denied funding. No surprise here.

    This is why it’s so important that business owners get to know their credit score before they apply for a loan. Additionally, they should focus on building a solid credit score from the get go, even if they think they won’t need a big loan.

    Understanding your business credit score makes you more likely to be approved for a loan and more prepared to grow your business.

    What many don’t realize is that if you’re a small business owner, you need to have both a strong personal and business credit score to secure a significant amount of financing from major banks. There’s no way around this.

    According to nav.com, the ideal credit score is 680 to 720. It also helps if a business owner understands how to demonstrate a solid history of responsible money management.

    If you your credit score is low, you’ll need to spend time improving it before applying for a loan.

    High Operating Expenses and Slow Growth

    If a business can’t adequately demonstrate growth and growth projections, they may have trouble securing adequate financing for further growth—another catch-22 situation.

    According to a Small Business American Dream Gap Report, 3 of 10 small businesses face challenges covering operating expenses. This trend is often due to the challenges of incorporating new employees as well as expanding or building inventory. Unfortunately, if they can’t cover their expenses, they’ll have difficulty securing funding

    According to Entrepreneur.com, some 26 % of business owners don’t hire or expand because they don’t have the funds to do so. In turn, they resort to personal savings or loans from friends and family, despite the significant risks and high interest rates involved in these actions.

    Lack of Cash Flow

    In the past year or so, about 45% of businesses sought out financing, namely to cover operating expenses and expansion. This need for funding indicates a severe need for extra cash flow, which can be a huge red flag to banks.

    Cash flow is not only one of the main reasons that existing businesses fail, it’s also a top reason why financing applications get denied. The reason behind this is simple: expenses come first before loans. This makes sense if you think about it on a personal financing level as well: you’re going to pay your rent and bills before you pay your loan payments. It’s simply a matter of priority.

    Type of Business

    According to nav.com, business owners are more likely to be denied financing if they are sole proprietors, brand new businesses, or state-approved businesses. In addition, businesses are liable to be rejected based on the type of industry they’re in.

    In this game, size matters, and unfortunately the very nature of most small businesses makes them a bigger risk, especially if they are new. According to the Federal Reserve Website, smaller firms are “notably less successful at obtaining financing at large banks (45% success) than larger firms … (72% success).”

    Part of the way a bank assesses a loan application is by assessing the customer base. If they’re looking at an application from a business in an industry that has a stable customer base, they are more likely to approve the application. Showing diversity in your client base is a key way to show secure projections.

    Unclear Understanding of the Financing Process or Options

    According to nav.com, there are at least 44 of different options for small business financing in the U.S. Depending on your area and/or industry, there may even be specialized grant options that are not widely advertised. Entrepreneur.com reports that some 20% of businesses applying for loans in the past 5 years had experienced multiple rejections and a quarter of these did not have a clear reason for the denial.

    Researching and applying for these can be extremely time-consuming, which is why it’s recommended that small businesses ask the local business association for tips pertaining to their specific situation and/or industry.

    All this points to a serious lack of understanding and transparency around what makes a business credit worthy. If people simply aren’t aware from the get go, or they’re asking questions but not getting clear answers, there’s obviously a problem.

    Conclusion

    To better prepare for loan applications, small business entrepreneurs need to have a clear picture of their current status, both in terms of financing and in terms of future projections.

    They need to understand the context of securing funding to build accurate projections, and they can then send these projections with the loan applications to hopefully create a positive feedback loop.

    But beyond that, small business owners need to thoroughly demonstrate their financial responsibility in order to have the best chance of securing crucial funding.

    When you have business self-awareness, you are much more likely to succeed and to get the financing you so desperately need.

    This article originally appeared at Life Insurance for SBA Loans.

    Author:

    Written by Life Insurance for SBA Loans.

    Tuesday November 19 2017, Daily News Digest

    Moody's wage growth

    News Comments Today’s main news: Clarity Services integrates with Experian. Octopus Choice passes 100M GBP AUM. Funding Circle hits 100M Euro in German lending. Younited Credit tops 100K loans. Square Peg invests $8M in Airwallex. Silver Bullion hits $50M in loans. Today’s main analysis: The deteriorating auto loan quality. Today’s thought-provoking articles: China’s startup investors are a bunch of “cashed-up […]

    Moody's wage growth

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    India

    Asia

    Canada

    Africa

    News Summary

    United States

    Integration of Clarity Services by Experian (Clarity Services Email), Rated: AAA

    As a supplier to Clarity Services Inc, we are writing to formally notify you that as of October 6, 2017, Clarity Services Inc has been purchased by Experian Holdings, Inc.

    Effective January 1, 2018, purchases and invoice payments will be processed by Experian’s centralized Procurement and Accounting departments.

    Source: Clarity Services

    PayPal Co-Founder Max Levchin Gave a Remarkably Honest Response to Accusations About His New Startup (Inc.), Rated: AAA

    To its critics, though, Affirm, which recently raised $200 million in a growth round, is engaged in something sinister, luring people into a financial trap by enticing them to buy things they can’t afford. CEO Max Levchindoesn’t agree with that interpretation at all, but he does accept some of the blame for not creating a more accurate perception.

    Here’s how Affirm works: You can borrow money to make a purchase at any store that integrates with Affirm (or any store at all if you use the mobile “virtual card”). If Affirm’s proprietary credit model judges that you’ll be able to pay back the sum, then you’re offered a loan. During the next several months — up to a year — you’re expected to make monthly payments, which include interest. The APRs range from 10 to 30 percent.

    The key things that differentiate Affirm from other credit options are that you get all of the information up front, stated plainly, and the interest charged by the startup is simple rather than compounding. When you make the initial purchasing decision, you know exactly how much extra you will end up paying to buy the product right now, instead of saving up over several months. There are no additional fees.

    Moodys Warns Of Deteriorating Auto Loan Quality (ValueWalk), Rated: AAA

    The economy is expected to expand in 2018, with projections for stock market performance clocking in at 8% basis Goldman Sachs. But not all is well –  a Moody’s report notes that specific asset sectors are struggling, particularly when it comes to  car loan quality worsening.

    ValueWalk

    Moody’s anticipates that US GDP growth will strengthen slightly to 2.3% in 2018 from 2.2% in 2017, with unemployment also continuing to move lower to 4.0% from 4.4%.

    Auto loan quality is worst, but pockets of “challenged” loans exist across the board

    Auto loan ABS issuers will likely securitize pools with attributes broadly similar overall to those in the pools backing their 2017 securitizations, even as a further decline in US auto sales pressures lenders to loosen underwriting to support volumes. We project sales will slip another 0.6% after an estimated 3.6% drop in 2017, following eight consecutive years of annual increases.

    Auto loans appear to be on the front-lines of credit issues. Household debt, for instance, has increased to $13 trillion, with a significant part of that increase in auto loans. Sub-prime auto loans, in particular, are showing signs of weakness.

    When looking at investment in asset-backed securities, the originator makes a difference. ABS backed by loans from online lenders such as SoFi, Lending Club Corporation, Prosper Marketplace Inc. and Marlette Funding have correlated with “prime credit quality.” But that is not the case across the board.

    Source: ValueWalk

    Square to small banks: Don’t lump us in with Amazon and Facebook (American Banker), Rated: A

    Square, the Silicon Valley payment processor that is at the center of the fight over the tech industry’s ambitions in banking, is firing back at its small-bank critics, while also taking steps to placate community activists.

    Advocacy groups that once expressed concern about the adequacy of Square’s plan to satisfy its obligations to low- and middle-income customers are now sounding more supportive of the fintech’s bid to open a bank.

    Levi King of Nav (Lend Academy), Rated: A

    In this podcast you will learn:

    • Levi’s background that led to the founding of Nav.
    • The products that Nav offers today.
    • How their business model works.
    • How they get small business owners interested in finance.
    • How Nav saves their customers money.
    • Why Levi thinks that small business owners may not need to be educated on finances in the future.
    • Their approach to producing content on their site.
    • The marketing channels they use to attract small business owners.
    • Levi’s thoughts on the entry on Amazon, PayPal and Square into small business lending.
    • Why proprietary data sets are going to be so important going forward.
    • The story behind the Nav brand and why they rebranded a couple of years ago.
    • The big name equity investors they have and how they closed their funding rounds.
    • What the future holds for Nav.

    Traditional FAs Shouldn’t Fear AI (Financial Advisor IQ), Rated: A

    Traditional wealth managers are convinced the advent of robo-advisors and artificial intelligence threatens the jobs of financial services professionals, Wendy Spires writes on WealthBriefing. But the reality is that the high-touch business of financial advice stands to benefit from AI, as do its traditional practitioners, she writes.

    For example, while 71% of wealth managers believe financial advice clients are prepared to accept advice from robo-advisors, the reality is different, she writes. Self-directed investing, for example, dropped from 45% in 2010 to 38% in 2016 — during a time when the number of robos and the services they offer expanded significantly, according to Spires.

     

    Working in America’s gig economy (Multibriefs), Rated: A

    “The gig economy … is now estimated to be about 34 percent of the workforce and is expected to be 43 percent by the year 2020,” notes Intuit CEO Brad Smith. “We think this points to a lot of growth as we look ahead.”

    Based on the most recent demographic data available from the Bureau of Labor Statistics, it appears the gig workforce is fairly evenly distributed across the age spectrum, but the highest percentages are seen at opposite ends of the scale. Individuals 65 years and older had the highest level of self-employment at 24.1 percent, while those under 35 (the so-called millennial generation) made up 18 percent.

    BLS data reveals a few more interesting statistics concerning the gig workforce:

    • Men are almost twice as likely as women to be self-employed.
    • More than 30 percent of gig workers possess professional or advanced degrees.
    • Whites and Asians are marginally more engaged in gig work than are other racial or ethic groups.

    In fact, data crunched by online lender Earnest and reported by Priceonomics indicates that about 85 percent of gig workers make less than $500 per month.

    Consumer board seeks $ 287 million in restitution over CashCall case (Northern California Record), Rated: A

    A Nov. 20 hearing featured the Consumer Financial Protection Bureau calling CashCall a purveyor of “financial snake oil” and arguing the online lender should pay as much as $287 million because they deceived customers.

    How To Build The Best B2B Customer Experience (Forbes), Rated: A

    In order to build the best B2B customer experience, companies should focus their effort on four principles:

    1. Invest in digital systems. Financial technology start-up Kabbage leverages new technology to approve small business loans in just seven minutes—a huge improvement over the 20 days it takes a typical bank. By simplifying the loan application process for web and mobile, Kabbage allows customers to apply for loans within minutes from anywhere in the world, which relieves a huge pain point for small businesses.
    2. Leverage data.
    3. Customize the experience.
    4. Use omnichannel to see the big picture. In fact, the average B2B customer uses six different channels as they make a decision. Customer experience happens in many places, which means companies need to create a consistent omnichannel experience.

    Interesting Investments: Peer-to-Peer Lending (Equities.com), Rated: A

    Peer-to-peer (P2P) lending, also known as peer lending, crowdlending, or social lending, is essentially what it says on the tin: lending money to another in an unsecured loan.

    Prosper, one of the bigger companies managing P2P lending, has seen a fairly consistent return of about 9 percent through 2014, with a dip to 6.6 percent in 2012. Lending Club has seen a rise from 4.9 percent in 2009 to about 8 percent in 2014. All told, not bad ROIs.

    First, you must be at least 18 years old, with a Social Security number, and live in an eligible state to even consider investing. Then, some states require that you have a minimum $70,000 gross income ($85,000 for California), and a minimum net worth of $70,000. You may not be able to invest more than 10 percent of your net worth. However, if your net worth is at least $250,000, there is no minimum income requirement.

    Prosper, for example, has an annual default rate 3 to 4 percent higher across all grades. Lending Club has a 6 to 7 percent default rate.

    Boston Fintech Company Cayan Is Getting Acquired for $ 1.05B (Bostinno), Rated: B

    Cayan, a payment processing company that has been around the Boston fintech scene for the last 19 years, is in the process of getting acquired by Total System Services in an all-cash transaction valued at approximately $1.05 billion. The transaction is expected to close in the first quarter of 2018.

    United Kingdom

    Octopus Choice passes £100m AUM (AltFi), Rated: AAA

    Octopus Choice has passed £100m of assets under management, following on from the launch of its Innovative Finance ISA in the summer.

    Assetz Capital Makes Changes to the Great British Business & Green Energy Accounts (Crowdfund Insider), Rated: A

    On Monday, online lending platform Assetz Capital announced it is doing away with the Great British Business Account (GBBA) and the Green Energy Account (GEA).

    Ranger Direct Lending makes further $ 9.1m provision for Argon Credit (AltFi), Rated: A

    The £232m Ranger Direct Lending fund has made a further $9.1m provision against its indirect investment in the collapsed Argon Credit lending platform.

    ThinCats Reveals New Branding, Launches Updated Website (Crowdfund Insider), Rated: B

    SME peer to peer lender ThinCats has launched a new website and branding designed to position itself for its next phase of growth in 2018.

    Goji – Empowering Direct Lending (LinkedIn), Rated: B

    Paul McMahon, former group marketing director of Aegon and UK CEO of FNZ, and Vincent Bordes, Founding Partner of Vestigo, the credit risk consultancy, will comprise the advisory board. Elizabeth McCallum joins as Goji’s Head of Marketing,  David Beacham as our Head of Distribution, and Rehan Islam as Head of Investments.

    China

    China’s Wild Bunch: Startup Investors Are Cashed-Up Cowboys (WSJ), Rated: AAA

    In the first 11 months of this year, 3,418 new venture-capital and private-equity funds in China raised 1.6 trillion yuan ($241.76 billion), more than double the amount of 2015 and more than 10 times that of 2006, according to consultancy Zero2IPO Group. It estimates about 12,000 investment firms manage 8.5 trillion yuan in capital, an increase from 8,000 firms managing 5 trillion yuan in 2015.

    Out of 221 unicorns in the world, 59 are in China, according to CB Insights. While that may lag behind the 127 from the U.S., it’s ahead of the U.K.’s 12 and India’s nine. Many Chinese investors want to invest in Silicon Valley because they think the valuations there are more reasonable.

    Government agencies and local governments have announced 1,040 venture funds since 2015 aiming to raise about 8 trillion yuan, according to Zero2IPO. Much of the money is used to lure businesses to set up local offices, to help boost employment and tax revenues. The Hubei Province’s 200 billion yuan fund is believed to the largest of its kind.

    Source: The Wall Street Journal

    Borrowing From Multiple Online Lenders Remains Prevalent (Caixin), Rated: AAA

    In China, online lenders or peer-to-peer (P2P) platforms that only facilitate lending do not have full access to borrowers’ credit information as there is no such centralized platform that shares the data.

    Some borrowers take advantage of this information asymmetry to apply for loans from multiple lenders so they can roll over previous debts elsewhere, or to take out cheaper loans to repay the ones that charge higher interest rates and profit from the difference, or even become lenders on other P2P platforms themselves, according to a study by the Beijing Internet Finance Industry Association.

    The association’s recent report found that among the 61 online lenders surveyed, 44% of their customers on average had borrowed from multiple sources.

    The survey found that nearly 500,000 borrowers tried to profit from arbitrage by taking advantage of the different interest rates charged by different online lenders. On average, each of them borrowed from 2.36 online lenders, the survey said.

    China’s war on risk hands US$ 121b loan market to big firms (The Malay Mail Online), Rated: AAA

    China’s whac-a-mole approach to risk — hit it everywhere it pops up — is set to hand control of the surging US$121 billion technology-driven lending market to a small group of leaders such as Lufax Holding and the finance affiliate of Jack Ma’s Alibaba Group Holding Ltd.

    Macquarie estimates credit extended by China’s fintech firms will jump more than seven-fold by 2022 to 6.2 trillion yuan (RM3.8 trillion) to pay for things like luxury and household goods or training and education. About half that market is micro-lending — typically small, short-term loans with high interest rates, Macquarie says.

    China’s 10 biggest fintech companies account for 36 percent of all loans, said Dexter Hsu, a Taipeh-based Macquarie analyst. Tighter regulation could erode China’s more than 2,000 online micro-lenders and so-called P2P platforms, which directly match borrowers with investors, to less than 200, he said.

    Chinese FinTech IPOs Don’t Dazzle Wall Street (PYMNTS), Rated: A

    Newly listed Chinese FinTech companies in the U.S. are struggling on Wall Street, leaving investors with unexpected losses and posing as a setback to other Chinese firms hoping to go public.

    “The quality of the businesses were either too early [to go public], untested or just poor,” said Anh Lu, an equities portfolio manager at T. Rowe Price in Hong Kong. “And they were asking for very high valuations on top of that.”

    European Union

    Funding Circle hits €100m lending milestone in Germany (P2P Finance News), Rated: AAA

    FUNDING Circle has hit the €100m (£88.2m) loans milestone in Germany just two years after launch in the country.

    The business lending platform says 3,000 investors have backed 1,100 German businesses and created more than 2,000 jobs since 2015.

    The platform entered the European market following its acquisition of German platform Zencap in 2015. It now has operations in the UK, US, Germany and the Netherlands.

    Earlier this month it said it had passed £3bn of lending in the UK and $5bn globally across all its platforms.

    C’est Génial! Younited CREDIT Tops 100,000 Loans (Crowdfund Insider), Rated: AAA

    Younited Credit has just surpassed 100,000 in loans since platform inception. The Paris based online lender (formerly named Pret d’Union) reported an accelerating rate of loan originations as the number has doubled since September 2016 when total loans stood at 50,000. The platform provides loans from €1000 to € 40,000. To date, Younited Credit has originated over € 650 million in loans.

    BorsadelCredito.it Raises €1.6M in Funding (FinsSMEs), Rated: A

    BorsadelCredito.it, a Milan, Italy-based fintech startup, raised €1.6m in funding.

    The round was led by P101 Ventures, with participation from Azimut Enterprises Holding, GC Holding, Banca Popolare di Fondi and private investors.

    DreamQuark wins the 2017 Fintech of the Year (Digital Journal), Rated: B

    A startup company called DreamQuark, which produces Artificial Intelligence applications for financial services, has been awarded the Finance Innovation ‘Fintech of the Year’ prize.

    National Personal Credit Platform Appoints Chairman (Caixin), Rated: B

    The chairman of a wholly-owned central bank subsidiary, Zhu Huanqi, has been appointed chairman of a planned national personal credit-information platform, Caixin has learned from sources familiar with the matter.

    International

    Online Banking and Payments: Innovative Solutions on the Horizon (FinsSMEs), Rated: AAA

    In the near future, online banking and payments will go through some fascinating changes beyond what has already happened over the past several years.

    Advanced Mobile Payments

    Today, there is increasing demand for biometric authentication apps. To ensure that consumers get what they want, MasterCard is going a step further by developing facial identification, voice recognition, and even cardiac rhythm programs. These innovative solutions will enhance the mobile payment experience for customers and retailers alike.

    Growing Opportunities for Mobile Wallets

    Back in 2014, Apple was the only real contender for mobile wallets. Within just one year, others followed their lead, including Samsung and Google. Then, in just a short amount of time, more big-name players joined in, such as Chase, Amazon, and Walmart. However, that was not the end. Even social media platforms started offering online payment options. With sites like Facebook that have mobile wallet solutions, people can send money and make payments.

    Another prediction is that by 2025, 75 percent of all transactions will be made using mobile wallets rather than actual cash.

    Greater Demand for Digital Remittances

    For instance, a San Francisco-based company founded in 2001 called Xoom has experienced amazing growth because of digital remittances. In fact, it passed up MoneyGram, which speaks volumes.

    Growth Potential with Peer-to-Peer Lending

    For instance, having originated loans over $20 million since being founded, Lending Club ranks as one of the fiercest competitors in this arena.

    How Banks Are Leveraging Chatbots for Customer Service (Crowdfund Insider), Rated: A

    Bank of America: Erica

    In October of 2016, Bank of America unveiled Erica, their new AI chatbot. Available in the bank’s mobile app, Erica can work with voice and text commands.

    Erica uses machine learning and specially-designed algorithms to provide Bank of America services that were typically reserved for the bank’s top-tier customers. As an example, it could recommend a way to pay down more on your credit card debt to save on interest payments. Or if your checking account is close to being overdrawn, it could contact you to recommend a transfer from your savings account.

    Swedbank: Nina

    Customers can access Nina from the bank’s website, and it can understand a wide range of text requests using specially designed Natural Language Understanding technology.

    In the first three months after Nina’s release, the software was handling an average of 30,000 customer interactions per month.  Of those early interactions, Nina was able to provide a resolution rate of 78%.

    Capital One: Eno

    Eno from Capital One is a chatbot program that works through SMS messaging.

    You can use this AI chatbot to check the balance on your accounts, see your available credit, track recent transactions, pay bills, and more.

    Wells Fargo

    The Wells Fargo virtual assistant is a chatbot that the bank recently released for use with Facebook Messenger. Once a customer enrolls their account, they can then use Messenger to contact the virtual assistant for basic tasks like tracking recent transactions, balance inquiries, and finding the nearest ATM.

    Digital investments: Modern ways to invest in the digital age (Bankless Times), Rated: A

    The internet has brought about all kinds of new ways to invest one’s money.

    • Bitcoin
    • Peer-to-peer lending – You’re best off using a well-established site such as Ratesetter.
    • Micro-investment apps – Some apps round up all of your expenses to the nearest dollar and then put the leftover change into an account (for example, if a cup of coffee costs $3.14, this will be rounded up to $4 and the $0.86 extra change will be put into the account).
    • Social media shares
    Australia/New Zealand

    Australian Fintech Airwallex Secures $ 8 Million Investment From Square Peg (Crowdfund Insider), Rated: AAA

    Less than one year after securing $13 million during its Series A funding round, Aussie fintech startup Airwallex announced it has received an $8 million investment from Paul Bassat’s Square Peg.

    Testing a chatbot’s home loan advice gives a range of outcomes (Stuff), Rated: A

    A mortgage broking firm is offering an AI chatbot to help first-home buyers understand some of the basics – but an experiment shows you shouldn’t put too much faith in any online calculators’ estimates of how much you might be able to borrow.

    Squirrel has launched Alan, an online tool that answers questions like “how much deposit do I need”, “what’s an auction” and “how much can I borrow?”

    Regulatory Pathway for Challenger Banks Just OK, Could be Improved (Crowdfund Insider), Rated: A

    FinTech Australia has provided a comment onthe consultation paper published in August regarding authorising new entrants into the banking industry. The creation of digital challenger banks in Australia is a welcomed move but, according to FinTech Australia, needs some improvement.

    India

    5 Consumer Lending Trends To Look Forward To In 2018 (Inc42), Rated: AAA

    This amendment to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 is a step towards standardisation and providing a visible digital identity, thereby promoting transparency in financial transactions. Another factor that is pushing financial transparency is the rise of Fintech and the subsequent new-age companies that are offering digital avenues for finance such as payment platforms, blockchain companies, alternative financers like P2P lenders and so on.

    Consumer Lending Trends To Look Forward To In 2018

    Alternative Lending Boom

    New service providers will serve the underserved and unserved, meeting the unmet demand. We will continue to see the rise of direct lending as well as P2P lending, marketplaces, crowdfunding platforms etc.

    Ease Of Access To Credit

    Credit will continue to grow, thanks to the alternative lending boom. One such burgeoning space is the Line of Credit. It has gained momentum in 2017 with the metros being early adopters and is expected to expand into tier 2 & tier 3 cities in 2018.

    The Rise Of InsurTech

    Investment In Emerging Technologies

    Blockchain will expand in putting together smart contracts, and digital identification. Already, FinTech investments in Asia increased to $5.4 billion in 2016, up 12.5% from $4.8 billion in 2015, driven mainly by China and India.

    Government And Regulatory Push For Fintech

    Asia

    Unique Secured P2P Lender Silver Bullion Reaches $ 50 Million in Loans (Crowdfund Insider), Rated: AAA

    Silver Bullion, a peer to peer lending platform based in Singapore, has reached $50 million in loan originations. The unique platform that provides secured lending based off of bullion saw more than double the lending volume in 2017 versus year prior.

    Amartha Powers Micro Peer to Peer Lending in Indonesia, Focuses on Women Entrepreneurs (Crowdfund Insider), Rated: A

    Amartha Founder & CEO, Garuda Typhoon Andi Putra recently commented;

    “Since its establishment, Amartha has been committed to connecting the unbanked micro entrepreneurs, and investors who want to add this asset investment in a sector that is more profitable and socially valuable. The uniqueness lies in the micro-entrepreneurs or Amartha Partners, all of which are women. Today, more than 72,000 women micro entrepreneurs throughout Indonesia have enjoyed our services, with a total fund distributed more than 200 billion rupiah (US $ 15 million). “

    Affin Islamic Bank lists latest sponsored venture on IAP (New Straits Times), Rated: A

    KUALA LUMPUR: Affin Bank Bhd’s wholly owned subsidiary, Affin Islamic Bank Bhd, has today listed its latest sponsored venture with Segi Seri Sdn Bhd on Investment Account Platform (IAP), a shariah-compliant platform similar to crowdfunding and peer-to-peer lending platforms.

    Affin Islamic said the venture plans to raise RM3.3 million on IAP to part-finance contract awarded to them recently, which is related to preparation and serving of dietetic food to an established government hospital in Malaysia for a duration of three years.

     

    Canada

    Another challenge is the new technology. Instant Financial Inc., a Vancouver-based startup, released an app this year that lets workers paid by the hour get their day’s earnings after a shift. It’s free for employees. Employers pay a fee. The focus so far is the hospitality industry, and includes companies such as McDonald’s and Outback Steakhouse in the United States. Instant has about 175,000 people on the service in the United States and about 5,000 in Canada. Wal-Mart has a similar product, which it sourced from another company.

    Africa

    A mobile banking service is transforming how the poor transfer money — here’s how it works (Business Insider), Rated: AAA

    In 11 countries around the world, some 30 million people use a mobile money service that is transforming how people handle their finances.

    It’s called M-Pesa, and it has lifted hundreds of thousands of people out of poverty in Kenya.

    Krispo, 40, is enrolled in GiveDirectly’s experiment in basic income, a system of wealth distribution in which people receive a standard salary just for being alive.

    The money comes with no strings attached. Krispo and the other villagers have received $22 a month since October 2016, and they’ll continue getting it until October 2028.

    Scattered around town are M-Pesa stands, outfitted with live agents who can dispense money — essentially an ATM with a human teller.

    There is a small fee for each transaction. For the amount given to GiveDirectly recipients, this fee is 30 shillings. (GiveDirectly actually wires 2,280 shillings each month — 30 shillings above the 2,250 recipients can spend — to cover the cost.)

    Authors:

    George Popescu
    Allen Taylor

    May 23 2017, Daily News Digest

    industrial bank charters declining

    News Comments Today’s main news:  Yirendai reports Q1 results. Desai steps down from Funding Circle P2P fund. Yirendai reports Q1 results.  Klarna is changing its name. Uncertainty looms over SoFi’s bank charter. Today’s main analysis: Quarterly marketplace lending results. Today’s thought-provoking articles: What’s in Ron Suber’s portfolio. China Rapid Finance quiet period coming to an end. Online lenders dominate Mozo awards. Over […]

    industrial bank charters declining

    News Comments

    United States

    • KBRA assigns prelim ratings to Oportun Funding VI, LLC, Series 2017-A. GP:”The flurry of bond sales continues.”
    • What’s in Ron Suber’s portfolio. GP:”Most angel investors lose money and they do it for the fun. A few have made it a carreer. I have always been very curious what Ron Suber invested in. Finally we get some very interesting insights. The real question is: why he said yes to these and no to probably 100x more companies.”AT: “Payments, online lending, and financial inclusion. None of this is surprising. I’d expect the leader of a disruptive finance industry to back financial inclusion. It’s not just decent humanity, it’s good business sense, especially if you believe in the technology doing the disrupting.”
    • Quarterly MPL results. GP:”The take away: An average ROI of 7.73%. A great number to remember.”AT: “Interesting portfolio mix, but it doesn’t seem very diversified.”
    • Uncertainty looms over SoFi’s plan to obtain bank charter. GP:”Of course uncertainty rules in any interaction with a regulator, judge, client. The take away from this article: the chart showing the number of industrial banks over time. “AT: “Obey this rule: Don’t believe it until you see it.”
    • U.S. startups fail to attract crowd of small investors. AT: “This is a misleading headline. There are any number of reasons why non-accredited investors may not be flocking to crowdfunding opportunities, one of which is they may not know about them. Most opportunities are still open only to accredited investors. The investment for the platforms to get in front of these investors is huge, and the potential ROI on the short term is thin, so long-term business sense is undoubtedly driving the current focus on accredited investors until cash flows reach a point to do otherwise. In time, the cost of meeting regulatory demands and marketing will decrease allowing platforms to built a real business model around the non-accredited investors. Plus, small investors themselves tend to be more cautious with their money simply because a loss can be much more devastating than an equal loss to a larger investor. The market will come around–in time.”
    • Goldman, Cohen bet on Nav. GP:”A few companies are always attracting a lot of attention from the public: Apple, Goldman, Google, Facebook due to their reputation of smart strategic visionaries who have made surprising bets in the past that paid off incredibly well. Is Nav such a bet?”
    • Thousands flock to Build credit card for credit repair. GP:”Beyond the sensational title: a few startups , and now banks, are selling the “improvide your FICO” by using our product. Some of them in fact even allow you to lend money to yourself in order to achieve this via a complex locked account structure. “
    • How fintech’s are beating credit unions. AT: “Credit unions typically are not innovators. They too will come around, eventually. It will take time.”
    • Podcast: Raul Vazquez of Oportun.
    • Why Wells Fargo is engaging fintech partnerships right now.
    • Lender expansion.
    • The top 10 players in Bay Area fintech.  GP:”The interesting story here given the share of the finance industry in the world and local economy: Why isn’t New York the hot bed of Fintech? A possible answer: because people experience in finance always see all the reasons why an idea won’t work and don’t even want to try. Young inexperienced people don’t know better and try, and sometimes they find a pocket of opportunity.”AT: “San Francisco is a hotbed for fintech companies.”
    • Fintech marketer on why you should simplify your message. AT: “Simplifying your marketing message is important, but clarifying your messaging is just as important. How you say what you say is as important as saying it.”

    United Kingdom

    China

    European Union

    • Klarna is changing its name to include ‘Bank’. AT: “This is very interesting. If Klarna can entice consumers to open up digital bank accounts and fund their retail purchases through those accounts, the company should be able to corner the market on e-commerce payments. This would be a huge boon.”

    International

    Australian/New Zealand

    India

    Asia

    News Summary

    United States

    KBRA Assigns Preliminary Ratings to Oportun Funding VI, LLC, Series 2017-A (BusinessWire), Rated: AAA

    Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of Oportun Funding VI, LLC, Series 2017-A (“Oportun 2017-A”), a consumer loan asset-backed securities transaction.

    The collateral in the Oportun 2017-A deal includes approximately $188.24 million of loans, as of the April 12, 2017 statistical calculation date. The transaction includes a three year revolving period during which additional collateral may be funded in the transaction so long as it complies with certain eligibility criteria. The preliminary ratings reflect the initial credit enhancement levels ranging from 30.0% for the Class A notes and 15.0% for the Class B notes.

    Preliminary Ratings Assigned: Oportun Funding VI, LLC, Series 2017-A

    Class Preliminary Rating Expected Initial Class Principal
    A A (sf) $131,766,000
    B BBB (sf) $28,235,000

    Here’s what’s in Ron Suber’s portfolio (Biz Journals), Rated: AAA

    Digital signature company DocuSign and online lender SoFi, which have been valued at $3 billion and $4.3 billion respectively. His involvement with Prosper itself started out as an investment in the company back in 2013.Digital signature company DocuSign and online lender SoFi, which have been valued at $3 billion and $4.3 billion respectively.

    He added that he focuses on five themes in his personal fintech investing: digital transactions, the payment rails of fintech, online lending, unlocking cash for assets and financial inclusion.

    My Quarterly Marketplace Lending Results – Q1 2017 (Lend Academy), Rated: AAA

    Overall Marketplace Lending Return at 7.73%

    I complained last quarter that the annualized return, based just on the latest quarterly numbers, on my main Lending Club account had dropped to 2.1% in Q4. Well, this quarter it dipped further. The balance on this account on December 31, 2016 was $39,733, the balance on March 31, 2017 was $39,472 for a -2.6% annualized return according to Lending Club’s own statements.

    When I look at where the recent defaults have been coming from the majority are in the D and E grade 36-month loans issued in 2015.

    My TTM return according to my own calculations is 2.56% and Lending Club says my return is 8.32%.

    Last month marked four years since I invested in the Direct Lending Investments fund. It has been my best performing investment by far over this time period. While yields have come down slightly from the initial 13-15% to 10-12% today I am still very happy with this investment. As the fund has grown, today it is closing in on $1 billion, it has changed focus from investing in high yield short-term small business loans to providing funding lines for a variety of consumer, small business and real estate lenders.

    Peerstreet focuses on short term loans – typically 6-24 months with yield to investors in the mid to high single digits. I like the $1,000 minimum per investment at Peerstreet which has enabled me to feel comfortable starting with a relatively small investment. I have already almost cycled through my initial investment as 11 of my first 12 properties have already paid off in full.

    Uncertainty looms over SoFi’s plan to obtain bank charter (SNL), Rated: AAA

    Social Finance Inc. executives say the company is ready to be regulated more like a bank, but it is unclear how feasible it will be for SoFi to obtain the industrial bank charter it wants.

    In his comments to TechCrunch, Cagney said that the goal of the charter is not to use deposits to fund loans.

    SoFi has yet to submit an application for an industrial bank charter in Utah, according to Utah Department of Financial Institutions supervisor of industrial banks Shaun Berrett. As of May 19, the online lender had 28 job openings in its Cottonwood Heights location.

    U.S. Startups Fail to Attract Crowd of Small Investors (Bloomberg), Rated: A

    Investors sprinkled about $38 million across 142 companies since May 2016 when Title III of the JOBS Act allowed equity crowdfunding for non-accredited investors, according to data from industry tracker NextGen Crowdfunding LLC.

    Swat said the practice is still in its infancy. Wefunder, StartEngine and SeedInvest are the primary crowdfunding platforms, and many founders aren’t aware that equity fundraising is an option. Of those who explore it, many decide it’s not worth the hassle and expense.

    NextGen data show companies typically spend from $20,000 to $50,000 on legal, accounting and marketing — a serious outlay for a startup that’s only looking to raise a couple hundred thousand dollars.

    Technology startups, quite understandably, have largely ignored the new fundraising option because they benefit more from the existing system.

    Goldman, Cohen Bet on Nav (deBanked), Rated: AAA

    Nav recently lifted the size of a Series B round by $13 million for lead investor Goldman Sachs Principal Strategic Investments as well as Cohen’s Point72 Ventures and others, bringing the tally for this round to $38 million.

    King points out that bringing the startup’s vision to reality is a gamble. For instance, Nav’s current customer count is 215,000 and they aspire to have 28 million.

    Also part of the vision is international expansion.

    Thousands are flocking to a credit card that helps repair their bad FICO scores and avoid payday loans (Business Insider), Rated: A

    Marla Blow thinks she can help. A card industry veteran who spent nearly a decade at Capital One and helped run the credit card and payments division at the Consumer Financial Protection Bureau, Blow recently helped launch a startup called FS Card, whose sole product at the moment is a credit card targeted toward those with tarnished credit histories.

    The card, which is called “Build” and has MasterCard branding, enables customers to avoid the local payday lender’s sky-high rates and gradually mend their standing in the eyes of the almighty FICO.

    FS Card’s strategy is to target “deep subprime customers” in the 550 to 600 credit score range, a group that’s largely been overlooked and forgotten by the big banks, according to Blow, the company’s CEO. By offering transparent rates and fees and low spending limits to start, Blow thinks she can carve out a profitable business that also helps people repair their financial bedrock.

    There’s some evidence from the Federal Reserve Bank of New York that lending is returning for subprime borrowers with credit scores below 660.

    The payday loan industry — wherein people take out a two-week loan for several hundred dollars that comes with a fee that amounts to a 400% interest rate on average — now serves 19 million households out of some 20,600 locations across the country, according to industry group the Community Financial Services Association of America.

    The Build card, on the other hand, is unsecured and requires no deposit, providing a more flexible line of credit from the get-go.

    The Build card comes with a $75 annual fee and a starting credit limit of about $500 — not incidentally, the same as the maximum payday loan amount in many states — which grows as the borrower proves responsible over time. The interest rate percentage starts in the upper 20s, on the high end for most credit cards. All the terms are laid out plainly to avoid any surprises.

    In a year and a half on the market, the Build card has extended $25 million in credit to nearly 50,000 customers, according to Blow.

    How fintech is beating credit unions at their own game (Credit Union Journal), Rated: A

    One of the leaders in that effort is Acorns, an app that connects to a user’s credit or debit cards and rounds up purchases to the next dollar, holding the accumulated difference in escrow and investing it with a risk portfolio determined by the user. The service costs just $1 per month for balances of less than $5,000 and users can withdraw their funds at any time.

    The bigger issue, said Habib, is that CUs are once again being cut out of the relationship with their members’ money. Saving a nickel here and a dime there may not seem like a significant threat, but if Acorns or similar fintechs eventually enter the lending space then credit unions could really begin to feel the pinch.

    While most CUs don’t have a round-up offering, one credit union that has embraced the idea is Tampa’s GTE Financial, which in 2015 launched Future Change, an app that allows members to round up purchases and set aside money to pay off their loans at the credit union more quickly.

    In the two years since GTE began offering Future Change, $1.3 million per year has been moved to roundup savings accounts, with members making more than 3,500 principal payments on their loans. The app has been downloaded more than 15,000 times and Burney said members log in about 14,000 times per month.

    Podcast 101: Raul Vazquez of Oportun (Lend Academy), Rated: A

    The CFPB estimates there are 45 million adults in the US today who have little or no credit history.

    In this podcast you will learn:

    • What Raul did before he came to Oportun.
    • The three criteria Raul needed to consider when moving from Walmart to Oportun.
    • The core market of borrowers served by Oportun.
    • The percentage of Oportun borrowers who do not have a credit score.
    • The total loan volume they have done to date.
    • The typical loan terms they offer.
    • Why they base their interest rates on the size of the loan.
    • The marketing channels they use to find their customers.
    • Why they use physical locations in most of the states where they operate.
    • How they are able to do 100% automated underwriting.
    • What being a CDFI means and why it is important for Oportun.
    • The three ways Oportun gets the funding they need.
    • The work that Raul does with the CFPB Consumer Advisory Board.
    • How long Oportun has been profitable.
    • What they are working on for the future.

    Why Wells Fargo is stepping up fintech partnerships now (American Banker), Rated: A

    Wells Fargo is putting more focus and effort into its partnerships with tech companies — from giants like Apple, Samsung and PayPal to the smallest startups.

    Lender Expansion; FHA, VA; Households Moving Toward Buying (Mortgage News Daily), Rated: A

    Some originators will say that the FHA program is the “new” subprime channel – certainly the program appeals to lenders who like the profit margins, and it appeals to borrowers new to home ownership and who may not have the necessary down payment for other programs. Good LOs have a sense of demographics & population trends, and as it turns out, for the first time in a decade, more new U.S. households in the first quarter chose to buy homes than to rent, suggesting a long-term decline in home-ownership rates might be coming to an end.

    Speaking of SoFi and other lenders that use computers (is there a definitive definition of “fintech?”), the WSJ discusses how investors are returning to bonds backed by online lending securitizations.

    The top 10 players in fintech in the Bay Area (Biz Journals), Rated: A






    See the entire presentation.

    Fintech Marketer Tom Roberts On Why Simplifying Your Company’s Message Is Key (Hypepotamus), Rated: A

    Regardless of how complex your product may seem, your company’s marketing message should be simple and straight-forward. A complicated, dense message could alienate customers unfamiliar with the technology and reduce your leads. Crafting a narrative around your company’s solution should translate to all sides of your target market — potential customers, investors and users.

    You’ve worked on simplifying the PrimeRevenue brand and presenting the company in a more digestible way. How did you approach this?

    But every marketing person should be so lucky to find a great story that is not being effectively told. That’s exactly what I discovered with PrimeRevenue. We work with some of the world’s largest brands to help them optimize their working capital, and we support their suppliers by giving them more visibility and control over what their customers owe them. I crafted the narrative around the immense ROI we deliver into a simple core messaging for both buyers and suppliers.

    How did you approach the company when talking about the new brand message?

    I’ve done a lot of work to simplify complicated messages for B2B audiences in the past. I find the key is putting together a logical story about what you are trying to achieve and how it will accelerate sales. Then you’ve got to be a great collaborative, internal seller of both your approach and your progress. I say collaborative since one mistake marketers seem to make is huddling with their team and then popping new “stuff” on an executive team. Unless you’re lucky, that can backfire.

    Why was simplifying the brand so important for the marketing strategy?

    A simplified brand message was key for us putting in place a sophisticated, multi-channel digital lead and demand generation program. Frankly, the company didn’t have much in the way of lead gen other than some field marketing at very small niche conferences.

    United Kingdom

    Funding Circle boss steps down from P2P fund (Citywire), Rated: AAA

    Samir Desai, the founder and chief executive of Funding Circle, the peer-to-peer (P2P) lender to small businesses, has stepped down from the platform’s investment company.

    FCIF is listed on the London Stock Exchange and invests in loans originated by Funding Circle. It is unusual in not levying a management fee, with the fund’s shareholders only paying the platform’s 1% annual charge. Last month it nearly doubled in size by raising £142 million from investors in a C-share issue.

    Stepping back from FCIF allows Desai to concentrate on Funding Circle, whose backers include Baillie Gifford, manager of Scottish Mortgage Trust (SMT), which holds an investment in the private company in its unquoted portfolio. Funding Circle has lent over £2.2 billion in the UK having and attracted 61,000 private investors who the company estimates have made an average return f 7.2% lending through the platform.

    UK Online Lender WiseAlpha Exceeds £627K During Second Crowdcube Run (Crowdfund Insider), Rated: AAA

    WiseAlpha, a UK online lending platform that gives everyday investors access to high yield institutional bond and loan investments, has raised over £627,000 on its Crowdcube return in just 7 days, coming in at 125% over its original target. More than 433 investors have invested in return for 8.92% equity. The highest amount by a single investor was £150,000 for the platform pre-valued at £6,402,630.

    UK P2P Lender RateSetter Announces Joanna Wright as New CRO (Crowdfund Insider), Rated: AAA

    Peer-to-peer lending platform RateSetter has appointed Joanna Wright as Chief Risk Officer. Wright joins RateSetter from GE Capital where she was Chief Risk Officer for GE Capital Bank in the UK, leading a team of over 200 risk professionals with responsibility for prudential and enterprise risks across the bank.

    HSBC voice recognition security system duped by customer’s twin brother (IB Times), Rated: A

    HSBC’s much-touted voice recognition software, used by half a million customers to verify their identity and secure their bank accounts, has successfully been duped by the brother of one of its customers. In an investigation carried out by BBC Click reporter Dan Simmons and his non-identical twin, Joe, the brothers revealed that it was possible to breach an HSBC customer’s account by mimicking their voice.

    After Dan Simmons set up his own HSBC voice-ID authenticated account, his twin Joe attempted to access the account by providing his account details, date of birth and saying the simple phrase. After seven repeated attempts to mimic his brother’s voice print, the bank granted him access on his eighth try.

    Although Joe was not able to withdraw any money from the account, he was able to access balances, recent transactions and even transfer money between accounts, the BBC reports.

    Lenders look to alternative asset classes and areas (Bridging&Commercial), Rated: A

    Last week saw a mix of property developers and finance providers come together to discuss the state of the property market.

    In the afternoon, the focus shifted towards the future of the property market with a look at new types of finance, such as crowdfunding, challenger banks and peer-to-peer lending.

    Even though he admitted that banks and challenger banks still dominated the space, Ashley pointed out that the alternative finance sector was continuing to grow.

    As a result of new lenders entering into the development finance space, Ashley added that some lenders have been looking to move away from ‘safer’ geographical areas, such as the South East, and are targeting places further north, including Scotland.

    Fears grow over P2P trusts (FT Adviser), Rated: A

    Recent months have seen problems return to the fore in the £2bn trust sub-sector, which has attracted investor interest in part because of yields well in excess of 5 per cent.

    Winterflood also criticised certain P2P investment trusts over disclosure levels in its latest monthly report. Analyst Simon Elliott said Ranger Direct’s partial writedown of a 20 per cent exposure to the struggling Princeton Alternative Income fund was a “disheartening episode”. Princeton had previously said its NAV would not be affected by problems at firms in which it had invested.

    Of the six funds in Winterflood’s P2P trust sector, three are trading on double-digit discounts, although one – Honeycomb – trades on a premium of 12.2 per cent.

    Is There Still an Advice Gap? (Morningstar), Rated: A

    Four years ago, sweeping reforms were introduced to the financial advice market, aiming to improve free transparency and professionalism.

    However, one of the biggest unintended consequences has been what many describe as an ‘advice gap’. This has been caused by high street banks, investment management firms and financial advisers withdrawing services for those with less than £100,000 to invest. They argue the cost of servicing these clients has become too high.

    A number of advisers also used the RDR as an opportunity to leave the industry, leaving many ‘orphaned’ clients behind.

    Stephen Kavanagh, chief executive of financial advice firm Chase de Vere, believes the advice gap was not caused by the RDR, but rather the regulation exacerbated existing inefficiencies in the market.

    According to AXA Wealth, there is only one adviser for every 2,700 people in the UK who require help with their finances. This compares to ratios of one adviser per 1,400 people in Australia and one per 156 savers in Hong Kong.

    The good news is that the advice gap is on the agenda for the Financial Conduct Authority, the regulator, alongside the Treasury. The two organisations have launched the Financial Advice Market Review, which is ongoing and aims to ensure that affordable advice and guidance is available to everyone.

    Since the RDR was introduced, robo-advisers have sought to address the issue, with new entrants and established firms offering online services for those with smaller sums to invest. Some deliver investment management online, while others provide automated financial advice. They are typically powered by computer models, known as algorithms, and involve little or no human interaction.

    Although Kavanagh recognises that technology has the potential to plug the advice gap by offering lower-cost services to a wider range of people, he believes the robo-advice market still has much further to go before it reaches this point.

    Tinder for businesses: Five things you need to know about Peer-to-Peer lending (Independent.ie), Rated: B

    One – It was invented in Ireland!

    Two – As the whole process is run online, overheads are lower and lending can therefore be provided more cheaply than in more traditional financial institutions.

    Three – According to Linked Finance, lenders can earn between 8.5pc and 15pc interest on the loans that they issue, however any income earned on the lending will be subject to income tax.

    Four – P2P is currently not regulated in Ireland, as a result of this certain protections do not apply to consumers of P2P products.

    Five – Figures for the first three months of 2017, show that the Irish P2P platform increased lending activity by more than 326pc on the same period in 2016, according to Linked Finance, and the platform has now facilitated more than €25m in loans to Irish SMEs.

    China

    Yirendai Reports First Quarter 2017 Financial Results (PR Newswire), Rated: AAA

    Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading online consumer finance marketplace in China, today announced its unaudited financial results for the quarter ended March 31, 2017.

    Starting from the second quarter of 2016, the Company changed its reporting currency from the U.S. dollar (“US$”) to the Renminbi (“RMB”), to reduce the impact of increased volatility of the RMB to US$ exchange rate on the Company’s reported operating results. The aligning of the reporting currency with the underlying operations will better depict the Company’s results of operations for each period. This release contains translations of certain RMB amounts into US$ for convenience. Prior period numbers have been recast into the new reporting currency.

    For Three Months Ended

    in RMB million

    March 31,
    2017

    December 31,
    2016

    March 31,
    2016

    QoQ
    Change

    YoY

    Change

    Amount of Loans Facilitated

    6,922.7

    6,675.2

    3,446.5

    3.7%

    100.9%

    Total Net Revenue

    1,021.6

    1,071.1

    556.4

    -4.6%

    83.6%

    Total Fees Billed (non-GAAP)

    1,583.5

    1,630.4

    847.4

    -2.9%

    86.9%

    Net Income

    350.9

    379.8

    131.7

    -7.6%

    166.4%

    Adjusted EBITDA (non-GAAP)

    400.3

    401.1

    206.6

    -0.2%

    93.7%


    A Quick Buy For China Rapid Finance At Upcoming Quiet Period Expiration (Seeking Alpha), Rated: AAA

    The 25-day quiet period on China Rapid Finance Ltd (NYSE: XRF) will end on May 23, allowing the firm’s IPO underwriters to publish reports and recommendations after this time.

    China Rapid Finance acquires consumers through multiple channels, such as online travel agencies, social networks, e-commerce platforms, and payment service providers. Its business model offers smaller, shorter-term loans through its platform. The proprietary technology then analyzes the data and identifies borrowers who may qualify for larger, longer-term loans. In 2016, 89% of its total loan volume originated through this platform, and the borrowers were prime and near-prime consumers with creditworthiness closely comparable to FICO scores ranging from 660 to 720.

    XRF’s principal loan amounts range from RMB500 (US$72) to RMB6,000 (US$865). Longer-term loans range from three months to three years, with principal amounts from RMB6,000 (US$865) to RMB100,000 (US$14,400).

    The total number of loans has grown from 63,251 in 2014 to 6.0 million in 2016. The number of borrowers has increased from 101,384 in 2014 to 1.4 million in 2016. However, net losses reached US$131,000, US$(30.0) million and US$(33.4) million in 2014, 2015 and 2016, respectively.

    The average annual investment return for investors in lifestyle loans was 11.9% in 2014, 11.5% in 2015, and 11.3% in 2016.

    With a market cap of $1.475M, net income of $1.116M, and a P/E of 9.1; YRD appears to be more reasonably priced in general than XRF.

    P2P Industry News (Xing Ping She Email), Rated: A

    Zhongan Financial Holding Raised ¥220M in A Round
    Zhongan Financial Holding (ZFH), an auto consumer financial services provider, announced that it has raised 220 million RMB in A round of financing at the end of 2016. This capital was led by Haitong Capital, followed by Huaxin Capital, YinDuhui, Promising Capital and the listed company Sunyard.

    Founded in 2014, ZFH is focused in personal car consumer financial services across the country. It provides lifecycle service of car transactions for consumers and dealers, including marketing, customer acquiring, car sourcing, trading and financing.

    In addition, ZFH cooperated with banks to use the way of interbank (credit card stage) for the car consumer finance business. In this way, the cooperative bank originates credit card loans to customers, and customers mortgage the vehicle to the bank, then after the loans are issued, customers will pay the monthly payment.

    Alipay to launch ““Face Identifying Payment”
    Alipay has recently tested for “Face Identifying Payment” inside. In this new way of paying, the process of face identifying takes only one second, if succeed, the customer should further input the last four digits of his phone number. After the two-step verification, the payment can be completed.

    Shortly after that, Alipay confirmed the news, and announced they have finished the last step of bringing “Face Identifying Payment” from laboratory to commercial use, it will soon be available on the stores of partners.

    European Union

    Klarna is changing its name — revealing a bold challenge to incumbent banks (Business Insider), Rated: AAA

    Swedish e-commerce company Klarna wants to change its name to Klarna Bank, reveals application documents received by the Swedish Companies Registration Office.

    This implies that Klarna could soon be receiving its Swedish banking license, which it applied for in October 2015.

    International

    Should Real Estate Investors Go Global? (ETF Daily News), Rated: B

    The FlexShares Global Quality Real Estate Index Fund (NYSE:GQRE) was trading at $59.44 per share on Monday afternoon, up $0.15 (+0.25%). Year-to-date, GQRE has gained 5.45%, versus a 7.10% rise in the benchmark S&P 500 index during the same period.

    GQRE currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #5 of 11 ETFs in the Global Real Estate ETFs category.

    Australia/New Zealand

    Online lenders dominate 2017 Mozo Experts Choice Home Loan Awards (Mozo), Rated: AAA

    The awards compared 504 home loans from 89 providers, and awarded the top 10% in each of the 8 categories.

    This year, Mozo found that online lenders took out more awards for great value mortgage products than in previous years, accounting for approximately 41% of the winners overall, up from just over 25% last year.

    Some of the major online bank winners included Non-Bank Home Loan Lender of the Year, Homestar, which took out awards across 5 of the 8 categories and Reduce Home Loans.

    InvestmentLink launches goals-based advice platform (Financial Standard), Rated: A

    Financial data feed provider InvestmentLink is launching a new cloud-based platform targeted at financial planners looking to provide outcomes-oriented advice to clients.

    CashDeck uses InvestmentLink’s data repository to allow clients to manage all their financial information, while advisers can use the information to generate projections and insights around client goals.

    Wellington ranks #2 in the world for sharing economy (IT Brief), Rated: A

    Peer-to-peer motorhome rental platform SHAREaCAMPER recently released the 2017 Return on Investment Index. The study aims to identify which cities offer the highest return on asset investment via rental peer-to-peer (P2P) platforms.

    The application Airbnb was used to collect data alongside a collection of other rental platforms.

    Taking into account all five of the markets researched, Wellington is ranked in second place. Auckland placed in the fifth position in the ranking.

    India

    Over 90% lenders in P2P lending earn gross returns of 18-26% per annum (India Times), Rated: AAA

    Promise of higher returns and faster adoption of digital disruption has pulled a large number of millennials towards P2P lending, according to a report by online P2P lending platform Faircent.com. In fact as per the report, nearly 60% of the lenders on the platform are less than 35 years old.

    According to the report, lenders are investing more and those with investments worth more than Rs 5 lakh are earning gross returns upwards of 22% per annum with the lowest volatility of returns. Furthermore, it states that significant increase in timely repayment has led to increase in reinvestment of returns back on to the platform, leading to further increase in returns.

    Meet the Analytics & Data Science Head at Kabbage, one of the hottest fintech companies (Analytics India Mag), Rated: A

    This week we bring you a closer look at Kabbage, a Fintech company headquartered at Atlanta USA, through an interaction with Ratnakar Pandey. RP, as he is popularly known, heads the Analytics and Data Science portfolio at Kabbage India.

    RP has more than 15 years of experience in analytics and data science fields. At Kabbage, RP is leading the machine and deep learning models development activity across customer lifecycle, from acquisition to customer engagement to fraud prevention to risk based underwriting policy development.

    Analytics India Magazine- Could you tell us more about Kabbage and your data and analytics platform?

    Most of the heavy lifting that happens in Kabbage is done by technology and data, which is one of the key differentiators. We like to call ourselves a data company rather than a typical finance company. So, data is the core competency of the company and we use that in our decision making every day.

    AIM- Would you like to share some of the analytics solutions you have worked on?

    We use several programming and data management tools for providing both tactical and strategic analytical solutions, some noteworthy tools are Python, R, SQL, Spark, Hadoop and Scala.  In terms of statistical techniques for machine learning, we routinely use regression techniques (linear, logistics) and classifiers such as Gradient Boosting Machines (GBM), Elastic Net Regression, Support Vector Machine (SVM), Ensemble Learning etc. For forecasting and anomaly detection we use ARIMA/X, k-NN and other similar techniques. We also heavily use Natural Language Processing (NLP) for drawing insights from text and unstructured data.

    AIM- What kind of knowledge and skill-sets do you look for, while recruiting your workforce?

    For the positions that we are currently hiring, we are looking for 8+ years of work experience in data science, preferably in the banking and lending industry. We are keen on hiring people who can lead a project from start to finish and take the full accountability and ownership of it. We generally hire from the premiere institutes, 90% of people we have right now are from tier 1 institutes.

    AIM- What are the most significant challenges you face being at the forefront in analytics space?

    Lack of machine learning and deep learning talent is the biggest challenge in the Indian market.

    AIM- How do you think ‘Analytics’ as an industry is evolving today? Could you tell us the most important contemporary trends that you see emerging in the present analytics space across the globe?

    We are generating more data than ever before- 90% of the data that we have today is generated in last 2 years alone. This data is coming from a variety of different sources such as voice, text, transaction, sensor, chat, images, videos etc.

    At this rate, Fintech will slaughter India’s banks (India Times), Rated: A

    India’s banks, which still dominate the country’s financial landscape, appear to have hardly a kick left in them. Stressed assets without any loan-loss cover now exceed $96 billion, McKinsey & Co. said last week. An overwhelming 91 percent, or $87 billion, of the provisioning gap is at state-run lenders, whose net worth would be wiped out if they took the hit on their capital.

    Even as McKinsey was delivering this sobering reality check, fintech was running a victory lap of sorts. Paytm, a digital payments company announced a $1.4 billion investment by Masayoshi Son’s SoftBank Group Corp. on Thursday, the largest funding round by a single investor in an Indian startup.

    Capital First’s retail assets have grown 24-fold in six years to about $3 billion. Its bad-loan ratio of less than 1 percent compares with almost 10 percent for banks. And the latter figure is an official estimate; the reality is probably a lot worse.

    McKinsey has several suggestions on how Indian banks can deal with the mess: by quarantining assets that would eventually find their footing, liquidating those that won’t, and working with professional asset managers to turn around debtors that lie in between. But even if the delicate surgery is successful, banks — especially state-run ones — will end up ceding a lot of ground to fintech.
    Asia

    SoftBank’s massive Vision Fund raises $ 93 billion in its first close (TechCrunch), Rated: AAA

    SoftBank’s huge $100 billion investment fund — the largest tech fund in history — announced its first close today… and it’s huge.

    The Japanese telecom giant revealed that its VisionFund has closed an initial commitment of $93 billion from a bevy of high profile backers. They include Apple, Qualcomm, UAE-based Mubadala Investment Company, Saudi Arabia’s PID public fund, Foxconn, and Foxconn-owned Sharp. The plan is for the fund to reach its $100 billion target within the next six months through commitments from other investors.

    Recent deals include Indian fintech unicorn Paytm, virtual reality Improbable Worlds, China’s Uber killer Didi Chuxing, and global connectivity company OneWeb. Beyond that, there’s been a steady flow of unconfirmed investments linking the fund to companies like WeWork.

    Authors:

    George Popescu
    Allen Taylor