- Today’s main news: P2P investors outperformed FTSE 100 in 2018. U.S. government shut down hurts SBA lending at banks. Monzo, Funding Circle put UK in tech investment lead. Robinhood closes in on UK launch. N26 valuation at $2.7B.
- Today’s main analysis: Mortgage offer report for December 2018.
- Today’s thought-provoking articles: New bank credit fell below 1%. Nexo publishes interim report. Minority entrepreneurs thrive in 10 U.S. coastal cities.
- SBA lending at banks hurt by government shutdown. This is not too surprising, but it spells opportunity for alternative lenders to step in and fill the gap. This window will not be open for long.
- New bank credit falls below 1%. PeerIQ analysis.
- LendingTree’s monthly mortgage offer report for December 2018. Average APR was 4.35% for conforming 30-year, fixed-rate purchase loans. Refinance loan APRs also declined.
- Minority entrepreneurs thrive in these 10 cities. An interesting LendingTree report.
- Affirm to test high-interest savings accounts.
- Kabbage vs. Fundbox.
- LendingFront raises $4 million.
- Cross River, Stripe partner.
- Plaid buys Quovo.
- Top 7 short-term investment ideas for beginners.
- YieldStreet’s alternative investment marketplace thrives.
- CAN Capital hires new CEO.
- SS&C releases integrated loan servicing and accounting platform.
- P2P investors outperform FTSE 100 in 2018.
- Monzo, Funding Circle put UK in tech investment lead.
- Monzo hires new chairman.
- Robinhood closer to UK launch.
- Apps more popular than online banking.
- LendInvest partners with Mortgage Brain.
- Tech sector runs up 2.5 billion GBP in new investment in 2018.
- International: Nexo publishes interim report.
- China: HNA Group to sell Dianrong.
- India: IndiaMoneyMart gets NBFC-P2P certification.
- Indonesia: KinerjaPay gets $200 million investment.
- Australia: Helio Lending launches regulated investment fund.
- China: New negative list targets unified market access.
- International: Crypto lenders thrive despite ongoing bear market.
- Africa: Trends in fintech and regulation.
- United States
- Government Shutdown Hurts SBA Lending at Banks in December (AP News), Rated: AAA
- Strong Employment Report; PeerIQ’s Benchmarking Application (PeerIQ), Rated: AAA
- LendingTree Releases Monthly Mortgage Offer Report for December (PR Newswire), Rated: AAA
- Minority Entrepreneurs Are Thriving in These 10 (Mostly Coastal) U.S. Cities (Inc), Rated: AAA
- Lending Startup Affirm to Test High-Interest Savings Accounts (Cheddar), Rated: A
- Kabbage Data Reveals One-Third of Successful Small Businesses Started with Less Than $ 5,000 (PRWeb), Rated: A
- Kabbage vs. Fundbox: Which Line of Credit is Best For Your Business? (Nav.com), Rated: A
- LendingFront Raises $ 4 Million to Help Lenders Modernize Small Business Lending Operations (PR Web), Rated: A
- Cross River, Stripe partnership targets marketplace economy (Bankless Times), Rated: A
- Fintech APIs Consolidate As Plaid Buys Quovo In $ 200M Deal (Benzinga), Rated: A
- Top 7 Short Term Investment Ideas For Beginners (FX Daily Report), Rated: A
- YieldStreet’s Alternative Investment Marketplace Booms In Times Of Volatility (Forbes), Rated: B
- CAN Capital Has New CEO, Hires Edward Siciliano to Lead Online Lender (Crowdfund Insider), Rated: B
- SS&C Releases Precision LM, Integrated Loan Servicing and Accounting Platform (SS&C), Rated: B
- United Kingdom
- Zopa: P2P investors outperformed the FTSE 100 in 2018 (P2P Finance Newes), Rated: AAA
- Monzo and Funding Circle help put UK in lead for tech investment (Independent), Rated: AAA
- UK online bank Monzo hires financial market veteran as chairman – source (Reuters), Rated: A
- Robinhood is getting closer to a UK launch (Business Insider), Rated: AAA
- Apps more popular than online banking in UK (Finextra), Rated: A
- LendInvest partners with Mortgage Brain to bring BTL loans to wider market (Property Funds World), Rated: A
- Britain’s tech sector clocks up £2.5billion worth of new investment in 2018 as it comfortably tops the table of European countries (This is Money), Rated: A
- China’s HNA touts assets for sale as funding crunch intensifies (Reuters), Rated: AAA
- China’s New Negative List Targets Unified Market Access (China Briefing), Rated: A
- European Union
- German mobile bank N26 joins Europe’s unicorn club with $ 2.7 billion valuation (CNBC), Rated: AAA
- TrueLayer launches data API in Germany (Fintech Futures), Rated: A
- Nexo, the World’s Largest Crypto Lender, Publishes Interim Report (Sociable.co), Rated: AAA
- Crypto Lenders Thriving Despite The Ongoing Bear Market (Use the Bitcoin), Rated: A
- Crypto-Lending Business Helio Lending Launches Regulated Investment Fund (Investment Revolution), Rated: AAA
- IndiaMoneyMart Receives NBFC-P2P Certification From RBI (The Week), Rated: AAA
- Southeast Asia
- Indonesia’s KinerjaPay gets US$ 200 million investment deal from local conglomerate (KrAsia), Rated: AAA
- #BizTrends2019: 6 trends in fintech and its regulation (Biz Community), Rated: AAA
Government Shutdown Hurts SBA Lending at Banks in December (AP News), Rated: AAA
With the U.S. Small Business Administration (SBA) closed for the past two weeks because of the partial government shutdown, SBA loan approvals dropped in December 2018 at banks and other institutions. Despite this setback, small business loan approval rates for big banks reached another record high (27%) in December 2018, according to the Biz2Credit Small Business Lending Index released today.
Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals slipped below the half-way mark to 49.9% following the month of November when 50.2% were approved.
Loan approval rates among alternative lenders dropped from 56.7% in November to 56.6% in December.
Strong Employment Report; PeerIQ’s Benchmarking Application (PeerIQ), Rated: AAA
Real new bank credit fell below 1% at the end of 2018. This is a mixed indicator of a recession as there have been 9 recessions since the 1950s after real new bank credit has fallen below 1%, but also about 6 false signals as well.
LendingTree Releases Monthly Mortgage Offer Report for December (PR Newswire), Rated: AAA
- December’s best mortgage offers for borrowers with the best profiles had an average APR of 4.35% for conforming 30-year, fixed-rate purchase loans, down from 4.66% in November. The APR on refinance loan offers also decreased from 4.63% in November to 4.34%. We consider people with the best credit profiles to be those in the 95th percentile of borrowers who received the best mortgage offers through the LendingTree marketplace, which allows users to compare offers from multiple mortgage lenders.
- Mortgage rates vary depending upon parameters including credit score, loan-to-value ratio, income and property type.
- For the average borrower, the purchase APR for conforming 30-year, fixed-rate purchase loans offered on LendingTree’s platform was 5.17%, down 18 basis points from November. The loan note rate of 5.05% was down 19 basis points from November. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.
- Consumers with the highest credit scores (760+, representing the 65th percentile of borrowers) received an average APR of 4.98%, versus 5.33% for consumers with scores of 680 to 719. The APR spread of 65 basis points between these score ranges is higher than it was in November. For the average purchase loan amount of $224,609, the spread represents over $17,000 in additional costs for borrowers with lower credit scores over 30 years. The additional costs result from higher interest rates, larger fees or a combination of the two.
- For the average borrower, the APR for conforming 30-year, fixed-rate refinance loans decreased 24 basis points from November to 5.09%. At 4.93% and 5.21%, respectively, the spread between credit score brackets (760+ and 680-719) was 28 basis points. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $239,329.
- Average proposed purchase down payments fell to $54,217, a decline of nearly $6,000.
To view the Mortgage Offers Report, visit: www.lendingtree.com/home/mortgage-offers-report-december-2018.
Minority Entrepreneurs Are Thriving in These 10 (Mostly Coastal) U.S. Cities (Inc), Rated: AAA
Over 42 percent of all minority-owned companies in these cities make at least $500,000 in annual revenue and more than half have been in business for six years or more, according to a new report released Tuesday by LendingTree, an online loan marketplace based in Charlotte, North Carolina. The study uses Census data to gauge how minority business owners with employees fare in the 50 largest metro areas in the U.S. It measures performance based on metrics including a company’s longevity, revenue, and whether a city’s minority population is proportionally represented in business ownership demographics, dubbed the “parity index.”
Lending Startup Affirm to Test High-Interest Savings Accounts (Cheddar), Rated: A
Affirm is making good on its commitment to become a full-service bank. The lending startup led by PayPal co-founder Max Levchin is introducing no-free savings accounts through a bank partner, initially with a 2 percent annual interest rate and no minimum balance, Cheddar has learned.
Kabbage Data Reveals One-Third of Successful Small Businesses Started with Less Than $ 5,000 (PRWeb), Rated: A
New data released today by Kabbage, Inc., a global financial services, technology and data platform serving small businesses, shows that the majority of successful entrepreneurs began their businesses with little cash flow and short run rates. Polling 600 thriving U.S. small business owners, the Kabbage survey found 58 percent of small businesses started with less than $25,000 and one-third started with less than $5,000.
Kabbage vs. Fundbox: Which Line of Credit is Best For Your Business? (Nav.com), Rated: A
Kabbage Pricing Example
Let’s say you borrow $25,000 and are approved for a 6 month loan with a fee of 3% (fees range from 1.5% to 10%). Using Kabbage’s calculator, you will pay $2750 in total fees if you repay the loan on schedule.
To translate that cost into an APR, you can use Nav’s free calculator and enter the loan amount plus the amount of the first two payments ($4917 each) and the amount of payments 3-6 ($4479 each). This results in an APR of 37.5%.
Let’s say you borrow $25,000 for 24 weeks and you are approved at their lowest fee of $4.66%. Using Fundbox’s calculator, your weekly payments will be $1135.31 and you’ll pay a total of $2247.50 in fees. This results in an APR of 39%.
LendingFront Raises $ 4 Million to Help Lenders Modernize Small Business Lending Operations (PR Web), Rated: A
LendingFront, a small business lending software provider, today announced it has raised a $4 million Series A funding round led by Information Venture Partners with participation from Newark Venture Partners, Revel Partners, Contour Venture Partners and existing investors Struck Capital, ValueStream Ventures and Las Olas VC.
The funding will be used to help deliver LendingFront’s end-to-end white label software platform to more banks and financial institutions, giving them access to the most sophisticated technology in the market for originating, underwriting and servicing small business credit – a $600b+ market, according to the U.S. Small Business Administration.
Cross River, Stripe partnership targets marketplace economy (Bankless Times), Rated: A
Cross River, a provider of banking services for fintech companies, today announced a partnership with Stripe to help those in the marketplace economy—such as workers in ride sharing, food delivery, and other freelance occupations real-time access to earnings using push-to-card payments.
Fintech APIs Consolidate As Plaid Buys Quovo In $ 200M Deal (Benzinga), Rated: A
Fintech startup Plaid is negotiating a $200 million acquisition of rival Quovo, according to a Tuesday announcement. The merger would unite similar application programming interfaces connecting bank accounts to other fintech apps, such as Venmo, Coinbase and Robinhood.
The deal not only expands Plaid’s reach beyond its present 25 percent of U.S. financial accounts, but also positions the firm to penetrate the brokerage and wealth management spaces. Quovo’s traditional customers include Vanguard, Stifel Financial Corp SF 0.02%, John Hancock, Betterment and Wealthfront.
Top 7 Short Term Investment Ideas For Beginners (FX Daily Report), Rated: A
Often touted as direct lending, peer-to-peer (P2P) lending has taken the financial industry by storm. Although this short term investment option has only been for the last one decade, it has already managed to create a reputation of its own with the flexibility and diversification options it brings for lenders. The idea of P2P lending is simple: it is a simple investment option that is designed to bring investors and borrowers together on a single lending platform. These platforms offer relatively higher returns because of their low operating costs. Additionally, they also get to make some profits every time a borrower makes their repayment.
When YieldStreet launched a $6.45 million offering on its marketplace, it expected a lot of investors to get in on the deal. After all, they had about seventy-two hours to digest all the important aspects of the company and the offering.
CAN Capital Has New CEO, Hires Edward Siciliano to Lead Online Lender (Crowdfund Insider), Rated: B
CAN Capital, an online lender providing financing to SMEs, has a new Chief Executive Officer. Announced in a release yesterday, the Atlanta based Fintech has appointed Edward J. Siciliano as CEO.
SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), today announced the release of Precision LM 4.0, the newest version of the company’s commercial/multifamily loan servicing solution.
Zopa: P2P investors outperformed the FTSE 100 in 2018 (P2P Finance Newes), Rated: AAA
The consumer lending platform compared the returns from investing £15,000 equally across a FTSE 100 exchange traded fund (ETF), a cash ISA or a Zopa Plus account last year.
By investing £5,000 in Zopa Plus, investors could have grown their money by up to 5.2 per cent or £260 in 2018, 13.5 per cent more than if they’d invested in a product tracking the stock market, Zopa said.
Monzo and Funding Circle help put UK in lead for tech investment (Independent), Rated: AAA
Britain’s tech sector saw more venture capital investment and stock market flotations in 2018 than any other European country, as the likes of Monzo and Funding Circle took centre stage.
UK tech companies attracted £2.49 billion in venture capital investment last year – far more than Germany in second place with £1.38 billion and France in third place with £1.03 billion, according to data from London & Partners and PitchBook.
The figures also showed London was by far the UK hub for investment, accounting for £1.8 billion or 72% of the country’s venture capital raised in 2018.
UK online bank Monzo hires financial market veteran as chairman – source (Reuters), Rated: A
Robinhood is getting closer to a UK launch (Business Insider), Rated: AAA
US-based commission free trading app Robinhood has quietly begun recruiting for a new office in London in preparation for an eventual launch in the UK, reports TechCrunch.
The $5.6 billion fintech is hiring for multiple positions in the city, including recruitment, operations, and marketing, according to sources familiar with the matter cited by the outlet. It’s also reportedly seeking to fill compliance and product positions, suggesting the fintech’s strategy is focused on significant localization and product market fit for its UK expansion.
Apps more popular than online banking in UK (Finextra), Rated: A
According to the study, which was commissioned by financial services review website Smart Money People, 39.2% of customers stated that their preferred means of dealing with banks is via apps, up from 30% in 2017.
In contrast, the preference for online banking has fallen from 45% in 2017 to 38.6% putting it below that of banking apps for the first time.
The survey also shows that the preference for digital channels (both mobile apps and online services) has grown slightly from 75% to 78% in the last year.
LendInvest partners with Mortgage Brain to bring BTL loans to wider market (Property Funds World), Rated: A
LendInvest, a specialist property finance lender, has partnered with mortgage technology expert, Mortgage Brain, to bring its Buy-to-Let (BTL) product to a wider audience of intermediaries.
This partnership follows recent changes to LendInvest’s BTL product in which it dropped its headline five-year fixed rate to 3.60 per cent with the ICR being assessed at the product pay rate, of 3.60 per cent. The lender also reduced its product fees to 1 per cent for all standard property and HMO mortgages.
Britain’s tech sector clocks up £2.5billion worth of new investment in 2018 as it comfortably tops the table of European countries (This is Money), Rated: A
UK based tech companies attracted £2.49billion in venture capital investment last year, according to data compiled by London & Partners and PitchBook.
This comfortably topped Germany in second place with £1.38billion and more than doubled third place France’s £1.03billion.
The data shows investment into the UK’s AI sector peaked at £736million in 2018, up a chunky 47 per cent on 2017.
China’s HNA touts assets for sale as funding crunch intensifies (Reuters), Rated: AAA
China’s indebted HNA Group met bankers on Tuesday to tout the latest assets that the sprawling conglomerate is putting on the block as it looks to raise funds and stave off an intensifying cash crunch.
The range of assets, spanning a hotel project in frozen Harbin and stakes in struggling online lender Dianrong, insurer Bohai Life and brokerage HNA Futures, underscores how the group is shedding almost all non-core businesses as it pares back an empire that once spread from Deutsche Bank to Hilton Worldwide.
China’s New Negative List Targets Unified Market Access (China Briefing), Rated: A
For example, ride hailing operations are under the ‘restricted’ category. Many claim that this is an official response to the 2018 Didi scandals, while illegal financial activities and internet-related business activities are likely designed to target the problems in peer-to-peer lending platforms that emerged earlier in 2018.
German fintech firm N26 said Thursday it has raised $300 million from investors in a round of funding — valuing the online lender at $2.7 billion.
That not only puts the company among the ranks of Europe’s unicorns — or private start-ups valued at more than $1 billion. It also makes it one of the most valuable unicorns in the continent.
TrueLayer launches data API in Germany (Fintech Futures), Rated: A
Ahead of the one-year anniversary of open banking (it was unleashed on 13 January 2018), TrueLayer says its data API will mean that businesses, especially fintechs, will be able to avoid “costly and time-consuming integrations of the dozens of fragmented banking APIs in Germany and across Europe”.
Nexo, the World’s Largest Crypto Lender, Publishes Interim Report (Sociable.co), Rated: AAA
In just six months, Nexo’s crypto lending model has generated a net profit of $3,040,239.
Read the full report here.
Crypto Lenders Thriving Despite The Ongoing Bear Market (Use the Bitcoin), Rated: A
The ongoing crypto winter has meant that many businesses are struggling for funding. Some have resulted in shutting down while others lay off staff. However, one section of the industry is thriving; crypto lenders.
Crypto lenders that are focused on the crypto industry say that they are finding strong demand for their services from individuals that are not willing to sell their crypto coins at depressed prices. Also, there is demand from big investors that are eager to borrow coins for short selling.
Crypto-Lending Business Helio Lending Launches Regulated Investment Fund (Investment Revolution), Rated: AAA
Australian-based, government-regulated cryptocurrency lender, Helio Lending today confidently launched a new arm of its business, the Helio Secured Income Fund — a regulated Managed Investment Scheme with an Australian Financial Services Licence — investors are now able to indirectly invest in cryptocurrency assets while targeting a return of 9.75% a year, net of all fees.
IndiaMoneyMart Receives NBFC-P2P Certification From RBI (The Week), Rated: AAA
The accreditation will enable IndiaMoneyMart to expand operations and target loan disbursals worth INR 100 Cr by FY 2018-19. It is an encouraging milestone to enable IndiaMoneyMart (IMM) gain traction among investors seeking for alternative asset class and boost their sentiments. The product offers an opportunity to earn steady cash flow every month to the lenders as well as compound their earnings by reinvesting.
Indonesia’s KinerjaPay gets US$ 200 million investment deal from local conglomerate (KrAsia), Rated: AAA
Indonesian mobile payments app KinerjaPay raised US$200 million investment from Wahana Group, a Surabaya-based conglomerate. The investment consists of a subscription of $100 million worth of shares in KinerjaPay’s Series F round and an additional $100 million in shares of the company’s Series G Convertible Preferred Stock. The company is listed on the US OTC market under the ticker KPAY.
#BizTrends2019: 6 trends in fintech and its regulation (Biz Community), Rated: AAA
In peer-to-peer lending, I think we will see growth beyond remittances and micro-donations to much larger-scale crowdfunding and insurance-type products, including short-term risk insurance products and co-investment structures (like mobile stokvels) on digital platforms. These types of products hold the promise (and risks) of consumers of financial services developing and administering such platforms themselves rather than the big, established players. Similarly, consumer development of payment systems is receiving a lot of attention in the international market and, increasingly, in South Africa. This is something to watch in 2019.