Thursday October 5 2017, Daily News Digest

roboadvisors aum

News Comments Today’s main news: Aspire Fintech is closing. Navient buys Earnest for $155M. Schwab creates robo-advisor, hires ex-Betterment GM to run it. Atom Bank nears 1B GPB in deposits. SoFi’s plan to become a bank isn’t going so well. Rubique has issued 50K credit cards. Reserve Bank of India (RBI) issues P2P lending platform directions. Today’s main analysis: Nutmeg sees […]

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United States

United Kingdom

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International

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News Summary

United States

SoFi’s Plan to Become the Bank of the Future Isn’t Going So Well (Bloomberg), Rated: AAA

Now, with Cagney felled by a flurry of sexual harassment allegations, the question is whether SoFi has any chance of building the financial supermarket he envisioned. This was always going to be a tall order given the intense competition from entrenched players and fintech startups alike, but now the SoFi brand has been tarnished as well.

“There are a lot of question marks,” says Alois Pirker, research director at advisory firm Aite Group. “The new CEO will need to find his or her bearings there and that will tell which direction they’ll be going.”

Some members of the board consider the moves into life insurance and wealth management Cagney “pet projects,” according to a person familiar with their thinking. Directors prefer to focus on more mature businesses such as personal loans and mortgages that are more predictable and established, said the person, who requested anonymity to discuss a private matter.

The firm reported revenue of $134 million in the second quarter, according to an email from Cagney to investors in August. It had adjusted earnings before interest, taxes, depreciation and amortization of $61.6 million and extended over $3.1 billion in student loans, personal loans and mortgages during that time frame. Personal loans are the most profitable, the person said, followed by student loans and then mortgages.

The wealth management unit had just $12 million in assets under management as of early September, according to a filing. This is far short of the more than $100 million the firm had set as an internal goal, people familiar with the matter have said.

SoFi readies 1st student loan bond post-management shakeup (Asset Securitization Report), Rated: A

Social Finance is returning to the securitization market with $626.4 million of bonds backed by loans used to refinance the student debt of borrowers with advanced degrees and high incomes.

The transaction, SoFi Professional Loan Program 2017-E (internal link; not in original source article), comes just weeks after the marketplace lender experienced a management shakeup; its chief executive officer and chief financial officer both resigned.

SoFi hosts party at Front & Palmer (Metro), Rated: B

Most people are not fans of student loan debt, but last week, SoFihosted a party at Front & Palmer in Philadelphia to celebrate it as a means of opening doors to education and more opportunities.

Recent college grads were invited to attend for free and to gain admittance, only needed to bring a proof of their student loan debt.

Source: Metro.com

Earnest, An Online Student Lender, Bought By Navient For $ 155 Million (Forbes), Rated: AAA

Financial technology start-up Earnest has agreed to be acquired by student loan servicing giant Navient for $155 million in cash, the companies said on Wednesday.

Earnest, an online lender that has focused on refinancing student loans, will remain a distinct brand and will continue to be led by its current management team, including founder and CEO Louis Beryl.

The acquisition will be a launching pad for Navient to begin originating its own student loans.

Schwab creates robo-exec slot and fills it with ex-Betterment unit chief (RIABiz), Rated: AAA

As its robo-assets soar to seemingly effortless heights, Charles Schwab & Co. is hiring an intriguing ex-Betterment talent to ensure that its good fortune holds.

The San Francisco-based investments giant, with $24 billion* of assets under automated management in Schwab Intelligent Portfolios and Schwab Intelligent Advisor, hired Cynthia Loh, the ex-general manager of Betterment for Business, the division that oversees the New York-based robo‘s 401(k) unit.

The Schwab robo-launch’s differentiators were its “zero” fee, its 24/7 access to service personnel and its national advertising. Yet the look and offering of the Schwab Intelligent offering are considered plain-vanilla in scope.

How tough can Schwab get with digital upstarts? (FinancialPlanning), Rated: AAA

Outlining his firm’s strategy for battling digital disruption, Schwab CEO Walt Bettinger envisioned it would push client asset revenues lower, while relying on its brand and established market share to grow.

Reacting to his statement, industry observers expect an uphill slog for independents as the largest firms gear up for a price war on three fronts: financial advice, online trading and ETFs.

An early study by A.T. Kearney predicted incumbents would slash prices to compete with robo advice upstarts. While that never came to pass, the 2015 study still predicted industry revenues would drop by as much as $12 billion by 2020.

“[Schwab has] $3 trillion in client assets. They have very positive brand recognition and customer satisfaction scores that are the envy of most of the industry. They have demonstrated a willingness to cut price to gain market share, as seen with their recent commission cuts in online trading. So yes, they can throw their weight around.”

The wisdom of possessing a trifurcated digital advice offering — Schwab Intelligent Portfolios, a digital-only service, an institutional platform for RIAs, and the hybrid robo advisor Schwab Intelligent Advisory — also becomes clearer, McDermott notes. (Schwab’s robo now has $20 billion in AUM).

Robo advice is expected to collectively top $1 trillion in assets under management in fewer than five years, according to Boston-based consulting firm Aite Group. But micro-investing will partly feed such growth, it predicts, noting over 60% of millennials already are subscribed to such apps.

FinTech Lenders and Banks Take Note (VedderPrice), Rated: AAA

While Upstart’s No-Action Letter has narrow applicability, it may serve as a tool for other FinTech lenders in implementing innovative products and services and establishing relationships with banks.

According to Upstart, its underwriting technology uses traditional underwriting methodologies in combination with other variables that are correlated with financial capacity and “repayment propensity.” Upstart states that its model understands and quantifies risk associated with all borrowers—both those with credit histories and those without credit histories. As a result, the Upstart loan program is able to offer credit to segments of the population with limited credit or work histories at more favorable rates. In other words, it appears Upstart is underwriting consumer loans without reliance upon traditional criteria, such as credit scores and length of employment history.

  • The No-Action Letter is only applicable to Upstart’s automated model for underwriting applicants for unsecured non-revolving credit, as described in Upstart’s original Request.
  • The No-Action Letter will expire three (3) years after its issuance, at which time Upstart may seek to renew the No-Action Letter.
  • The No-Action Letter is subject to modification or revocation at any time at the discretion of the CFPB staff for any reason, including where the CFPB’s staff determines that such modification or revocation is appropriate to protect consumers or is otherwise in the public interest.

On one hand, a no-action letter may be particularly useful for a FinTech company, utilizing innovative technology and operations, to obtain guidance concerning the permissibility of its business model under specific regulatory constructs. A no-action letter may also be useful for a FinTech company seeking to establish joint ventures with banks.

On the other hand, a CFPB-issued No-Action Letter has narrow applicability as it is only applicable to the requesting applicant, a specific regulatory issue and the facts and circumstances identified by the applicant in its request submitted to the CFPB. Should a fact or circumstance fail to be conveyed accurately, or should a fact or circumstance change, the No-Action Letter may be rendered useless.

Online housing investment platform Roofstock raises $ 35M in Series C (The Real Deal), Rated: A

Housing investment platform Roofstock raised $35 million in a Series C funding round as it looks to cash in on growing interest in single-family rental housing.

Roofstock CEO Gary Beasley said the firm will use the money to hire and to expand into new markets. The company has raised a total of $68 million from investors, according to Beasley.

From Shopping to Close, LendingTree Study Finds Mortgage Process is Getting Faster (Business Insider), Rated: A

LendingTree, an online loan marketplace, has released the findings of its study on shopping timelines for purchase mortgages. The study analyzed data from a sampling of more than 5,000 closed loans from March 2016 through May 2017 and reviews the timeline for the entire mortgage shopping experience – from first submitting a loan request and being matched with a lender to the date of the mortgage loan closing. The study revealed that the median time from early rate shopping to closing on a purchase mortgage declined 7 days from 2016 to 2017.

From 2016 to 2017, LendingTree has seen a 19% increase in the number of loans closed within 30 days and a 27% increase in loans closed in 60 days.

Congress is Trying to Get the IRS to Modernize (Lend Academy), Rated: A

Back in December 2013 Renaud Laplanche testified on Capitol Hill on small business lending. He was CEO of Lending Club back then and when a Congressman asked Laplanche a question as to how the government can best help he said to make IRS data more easily accessible to online lenders.

Fast forward four years and there appears to finally be some movement on this. Last week Congressman Patrick McHenry (R-NC) along with Senator Cory Booker (D-NJ) introduced a billthat would help the IRS move into the modern age and allow the automated retrieval of tax information through an API.

The IRS Data Verification Modernization Act of 2017 as it is called will require the IRS to create an API that will allow lenders to verify income in real time.

RealtyShares – New Small Balance Multifamily Program (RealtyShares), Rated: A

RealtyShares is now financing Small & Large Balance Commercial Multifamily, Apartment, Retail, & Hotel Assets.

Typical dwellings/ deal structure:

  • Class A, B & C+ dwellings
  • Typically like properties within a 30 mile radius of a popular MSA (but not necessarily a deal breaker as long as the project looks good)
  • The minimum loan financed needs to meet 1MM (Acquisition w/ renovation)
  • Asset Based Lender but having an experienced client who has done deals in the particular area is a great compensating factor

Project Summary

Loan Information

  1. Loan Amount
  2. Duration (term)
  3. Closing deadline
  4. Reason for deadline

Lien Information

  1. Amount of existing first lien
  2. Amount of other liens

Collateral Information

  1. Collateral Type
  2. Number of Units
  3. Total Square Footage
  4. Street Address
  5. Purchase Price and Purchase Date (if refi)
  6. “As Is” Real Estate Value
  7. Date of “as is” Appraisal/BPO
  8. Net Operating Income (NOI)
  9. Capital Expenditures since Purchase ($)
  10. Vacancy (%)

Guarantor(s) Information

  1. Net Worth of Guarantor(s)
  2. Estimated liquid assets of Guarantor(s)
  3. FICO Score of Guarantor(s)
  4. Guarantor(s) investment in collateral – current or proposed
  5. Sponsor’s Website

Use of Proceeds:
Please provide a concise description, a few sentences, on the Use of Proceeds (i.e., discuss: acquisition, refinance, site improvement, tenant improvements, planning, design/permitting, carry costs and etc.)

Exit Strategy:
Please provide a concise description, a few sentences on the Exit Strategy (e.g. discuss prospective buyer, prospective permanent financing).

What to Watch for When It Comes to Alternative Investing Opportunities (Madison.com), Rated: A

When you are working in the equity crowdfunding space, particularly as a company that is private, you certainly don’t have the liquidity that you would for a publicly traded stock that’s on the exchange.

On this episode of Industry Focus: Technology, host Dylan Lewis is joined by Motley Fool contributing writer Daniel Kline to talk about the dangers of this type of investing. They break down all the risks associated with purchasing shares in a company that does not have to report as much financial data as a traditional publicly traded company.

Watch the full video discussion here.

Elevate to Release Third Quarter 2017 Earnings on Monday, October 30, 2017 (Financial Times), Rated: B

Elevate Credit, Inc. today announced that it will release its third quarter 2017 financial results after the market closes on Monday, October 30, 2017. Ken Rees, Chief Executive Officer, and Chris Lutes, Chief Financial Officer, will also host a conference call on the day of the release (October 30, 2017) at 5:00 pm ET to discuss Elevate’s financial results.

Interested parties may access the conference call live over the phone by dialing 1-877-407-0792 (domestic) or 1-201-689-8263 (international) and requesting the Elevate Third Quarter 2017 Earnings Conference Call. Participants are asked to dial in a few minutes prior to the call to register for the event. The conference call will also be webcast live through Elevate’s website at 

An audio replay of the conference call will be available approximately three hours after the conference call until 11:59 pm ET on November 13, 2017, and can be accessed by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international), and providing the passcode 13671832, or by accessing Elevate’s website.

Citi FinTech’s Customer-Driven Journey: Our Latest Mobile Enhancements (Citi), Rated: B

These new mobile investment features include a dividend reinvestment plan (DRIP), fund screener, consolidated search functionality and enhanced visualization. Through the Citi Mobile App for iPhone, any Citi client with a brokerage account now enjoys one-touch access to their financial advisors and the ability to manage their investments personally, without switching to another channel.

Dividend Reinvestment Plan: Now clients can enroll eligible securities in a dividend reinvestment plan (DRIP) right within the app. Once a customer has opted in, this feature helps our clients put their cash dividends to work, instead of idling in their accounts.

Investment Search: This consolidated search function makes investing easier for clients interested in managing their portfolios themselves.

Performance Visualization: An enhanced visualization enables clients to track their portfolio’s performance and make adjustments right within the app.

United Kingdom

App-only bank Atom nears £1 billion in deposits (Business Insider), Rated: AAA

Startup, app-only bank Atom has passed £900 million in deposits less than two years after launching its first savings product.

The disclosure comes as Atom’s annual accounts show that the startup had £538 million in deposits from over 17,000 customers at the end of March. It means the app-only bank has attracted around £400 million in four months.

The bank’s accounts, filed with Companies House this week, show Atom has received over £300 million of small business loan applications and lent out close to £100 million in loans and mortgages by March this year.

Atom had a net interest loss of £1 million for the year, due to paying out interest on its 1.95% and 2.5% fixed savings accounts, at the time market-leading interest rates, before the launch of its lending products.

UK’s biggest robo-advisor Nutmeg sees losses widen (Business Insider), Rated: AAA

Nutmeg, the UK’s biggest automated investment fintech in terms of assets under management (AUM), released 

Source: Business Insider

P2P lending on course for 20 per cent jump (FT Adviser), Rated: A

Lending across all of the peer-to-peer platforms in 2017 to date is already higher than in the whole of 2016, according to data from research agency 4thWay.

According to the data, total lending across all peer-to-peer platforms is likely to be at least 20 per cent higher this year than last with the largest platforms, Funding Circle and Zopa, leading the way.

Funding Circle has lent £865m in 2017 to date, compared with £825m in the whole of 2016.

European Union

The 8 Biggest Startups in Europe by Funding (Nanalyze), Rated: AAA

Zee Germans are leading the pack with 4 unicorns and we also see that fintech and ecommerce make up half of all the sector allocations.

Company Name Funding Country Sector
Spotify $8.53 Sweden Internet Software & Services
Otto Bock HealthCare $3.50 Germany Healthcare
Auto1 Group $2.80 Germany eCommerce/Marketplace
Klarna $2.50 Sweden Fintech
VistaJet $2.50 Malta On-demand
Adyen $2.30 Netherlands Fintech
Hellofresh $2.09 Germany eCommerce/Marketplace
CureVac $1.65 Germany Healthcare
BlaBlaCar $1.60 France On-Demand
Saxo Bank $1.45 Denmark Fintech
Global Fashion Group $1.10 Luxembourg eCommerce/Marketplace
OVH $1.10 France Big Data
Avaloq Group $1.01 Switzerland Fintech
AVAST Software $1 Czech Republic Cybersecurity
letgo $1 Netherlands eCommerce/Marketplace
MindMaze $1 Switzerland VR/AR

Big Brand Payments, Part 1

Another big player from Sweden is Klarna, founded in 2005 and now valued at $2.5 billion. With $521.44 million in funding from investors like Sequoia and Visa, Klarna is one of the most popular e-commerce payment solutions in Europe, used by Burberry, Overstock.com, J.Crew, Nike, Lenovo, and hundreds more.

Adlibris, one of Europe’s largest booksellers, used Klarna to improve its mobile checkout solution, resulting in an 80% conversion increase.

Big Brand Payments, Part 2

With a valuation just shy of its Swedish colleague Klarna, Netherlands-based Adyen (valued at $2.3 billion), has established a firm foothold in the world of merchant payments by providing a “friction-less payment experience”. Founded in 2006 and funded with $266 million to date, Adyen has some huge customers in its corner, including Netflix, Uber, Etsy, Spotify, Groupon, and LinkedIn. The secret is in its platform, which features support for a wide variety of payment options (250 worldwide, to be exact) in a single system, including Apple and Android Pay, all major credit cards, direct debit for recurring payments, in-app purchases, and much more. The Cambridge Satchel, a UK handbag company, saw its Black Friday sales rocket by 124% after switching to Adyen’s platform. In addition to one-time purchases, the platform also facilitates subscriptions and recurring payments more seamlessly.

Trelix Approved as a Third-Party Due Diligence Provider by DBRS (Business Insider), Rated: A

Trelix, a provider of due diligence, quality control, licensed fulfillment and non-licensed fulfillment products and services across the origination and securitization lifecycle, today announced that it has been approved as a third-party due diligence provider for DBRS-rated transactions. DBRS is a full-service credit rating agency respected for its independent, third-party evaluations of corporate and government issues. DBRS’s approval process, before adding a company as an accepted provider, includes an on-site review to assess companies’ staffing, infrastructure and capabilities relevant to securitization-related services.

As part of Altisource’s Origination Solutions platform, Trelix offers clients a unique combination of technology and risk management tools that position it to have a meaningful impact on the securitization market.

Dutch fintech company InvoiceFinance raises €6 million in funding (Tech.eu), Rated: A

InvoiceFinance, a fintech startup based in Amsterdam, has raised €6 million from Peak Capital.

The new funds will be invested in marketing purposes and hiring for the sales and development team.

New10 Partners With Mambu To Redefine Dutch SME Lending (Bob’s Guide), Rated: A

Mambu today announced that New10, ABN AMRO’s newly launched FinTech, has selected the SaaS engine to power a range of small and medium enterprise (SME) lending products in the Netherlands. New10, which aims to provide credit decisions within 15 minutes, went from concept to launch within 10 months, in line with ABN AMRO’s vision of digitisation and innovation.

Mambu took a collaborative approach working with the New10 team in order to complete implementation within four months. In a highly regulated environment, Mambu’s partnership with Amazon Web Services (AWS) which has received Dutch regulatory approval, helped smooth the path to market. New10 launched on 21 September 2017 with a fully digital SME lending platform with plans to broaden the portfolio and potentially expand into new markets.

collectAI manages 25m Euro in Receivables (Otto Group), Rated: A

collectAI, the service for digital receivables, has processed receivables at a volume of 25m Euro since its foundation in 2016. collectAI automates and digitises invoices, dunning and debt collection processes and is the first digital end-to-end provider in receivables management.

Examples of successful KPIs on the clients’ side include: Introducing digital communication channels lead to an increase of the collection rate of 33 percent, while processing costs have been reduced by up to 41 percent.

While 23 percent of invoices are overdue Europe-wide (EHI 2016 – online retail only), the invoice remains the most popular payment method in Germany with a market share of 30,5 percent (EOS 2016). Even though returns from receivables and debt collection are essential for revenue and thus liquidity, only 18 percent of companies have digitised their receivables to date (EOS/Kantar 2017).

Papering Over the Cracks (LendIt), Rated: A

In 2016 there were a reported 5.4 million SMEs in operation in the UK alone and our economy depends heavily on the success of these “little guys”.

Fintechs and banks are now lending faster than the speed of light, but when it comes to uncovering fraudulent activity, are they actually left standing in the dark?

Invoice finance lenders have to be particularly vigilant when it comes to a different type of fraud: fresh air invoicing.

One way to avoid being stung by paper fraud is to lend against accurate financial data extracted directly from a company’s accounting package, rather than lending against a PDF or excel file that can be amended. Advances in technology means lenders are now able to access this level of data directly, securely and efficiently, so they can be sure they’re providing fair financial support to loan applicants.

International

BitProperty Announces Upcoming Token Sale, Beta Release of Real Estate Investment Platform (Bitcoinist), Rated: AAA

BitProperty, the blockchain-powered real estate investment platform, has announced that it will launch a closed beta release on October 5, 2017. Ten days later, on October 15, it will kick off a token sale to raise funds for further development of the platform.

The BitProperty platform is built on the Ethereum blockchain and uses two different types of tokens. The first type is an asset token that represents a share of a particular asset. When a real estate owner lists a property on the platform, the number of asset tokens issued against the property represents its value. Investors can purchase these asset tokens and will then receive income based on the performance of the asset (property) and the size of the stake that each investor holds.

The second type of token is the BTP token, which represents the inherent value of the platform backed by the pool of the company’s managed assets.

India

Rubique crosses over 50,000 credit cards customers (India.com), Rated: AAA

Mumbai-based FinTech startup Rubique continues to embark upon its fast-paced growth across sectors, including Retail and SME financing.

Rubique has till date successfully crossed over 50,000 Credit Cards customers.

RBI issues directions for peer-to-peer lending platforms (India Times), Rated: AAA

The Reserve Bank of India (RBI), on October 4, issued directions for non-banking financial companies (NBFC) that operate peer-to-peer (P2P) lending platforms. According to the directions, from now on no NBFC can start or carry on the business of a P2P lending platform without obtaining a Certificate of Registration. Every company seeking registration with the bank as an NBFC-P2P shall have a net owned funds of not less than Rs 20 million or such higher amount as the bank may specify.

They have been asked to apply for registration as NBFC-P2Ps within 3 months.

NOTIFICATIONS (Reserve Bank of India), Rated: AAA

3. Scope

These Directions provide a framework for the registration and operation of NBFC-P2Ps in India.

(2) Process of Registration

(i) Every existing and prospective NBFC-P2P shall make an application for registration to the Department of Non-Banking Regulation, Mumbai of the Bank, in the form which will be specified by the Bank for the purpose. Existing NBFC-P2Ps shall apply within three months from the issuance of these Directions.

(ii) The Bank, for the purpose of considering the application for registration, shall require the following conditions, among others, to be fulfilled:

  1. The company is incorporated in India;
  2. The company has the necessary technological, entrepreneurial and managerial resources to offer such services to the participants;
  3. The company has the adequate capital structure to undertake the business of Peer to Peer Lending Platform;
  4. The promoters and the Directors of the company are fit and proper;
  5. The general character of the management of the company is not prejudicial to the public interest;
  6. The company has submitted a plan for, or implemented, a robust and secure Information Technology system;
  7. The company has submitted a viable business plan for conducting the business of Peer to Peer Lending Platform;
  8. Public interest shall be served by the grant of CoR;

Any other condition as may be specified by the Bank, fulfillment of which, in the opinion of the Bank, is necessary to ensure that the commencement of or carrying on the business in India shall not be prejudicial to the public interest.

6. Scope of Activities

(1) An NBFC-P2P shall-

  1. act as an intermediary providing an online marketplace or platform to the participants involved in Peer to Peer lending;
  2. not raise deposits as defined by or under Section 45I(bb) of the Act or the Companies Act, 2013;
  3. not lend on its own;
  4. not provide or arrange any credit enhancement or credit guarantee;
  5. not facilitate or permit any secured lending linked to its platform; i.e. only clean loans will be permitted;
  6. not hold, on its own balance sheet, funds received from lenders for lending, or funds received from borrowers for servicing loans; or such funds as stipulated in paragraph 9;
  7. not cross sell any product except for loan specific insurance products;
  8. not permit international flow of funds;
  9. ensure adherence to legal requirements applicable to the participants as prescribed under relevant laws.
  10. store and process all data relating to its activities and participants on hardware located within India.

(2) Further, NBFC-P2P shall-

  1. undertake due diligence on the participants;
  2. undertake credit assessment and risk profiling of the borrowers and disclose the same to their prospective lenders;
  3. require prior and explicit consent of the participant to access its credit information;
  4. undertake documentation of loan agreements and other related documents;
  5. provide assistance in disbursement and repayments of loan amount;
  6. render services for recovery of loans originated on the platform.

(3) NBFC-P2P shall not undertake any activity other than those stated in paras 6(1) and 6(2) of these Directions. Deployment of investible funds by an NBFC-P2P in instruments specified by the Bank, not for trading, shall however be permitted.

11. Transparency and Disclosure Requirements

(1) An NBFC-P2P shall be required to disclose the following:

(i) to the lender

  1. details about the borrower/s including personal identity, required amount, interest rate sought and credit score as arrived by the NBFC-P2P.
  2. details about all the terms and conditions of the loan, including likely return, fees and taxes;

(ii) to the borrower – details about the lender/s including proposed amount, interest rate offered but excluding personal identity and contact details;

(iii) publicly disclose on its website:

  1. overview of credit assessment/score methodology and factors considered;
  2. disclosures on usage/protection of data;
  3. grievance redressal mechanism;
  4. portfolio performance including share of non-performing assets on a monthly basis and segregation by age; and
  5. its broad business model.

(2) NBFC-P2P shall ensure that the providing of services to a participant, who has applied for availing of such services, is backed by appropriate agreements between the participants and the NBFC-P2P. The agreements shall categorically specify all the terms and conditions among the borrower, the lender and the NBFC-P2P.

(3) The interest rates displayed on the platform shall be in Annualized Percentage Rate (APR) format.

Finance Ministry Welcomes RBI Move On P2P Lending (Bloomberg Quint), Rated: A

The finance ministry today welcomed the central bank’s move to treat peer-to-peer, also known as P2P, lending platforms as non banking financial companies, saying it would improve financing for smaller firms.

RBI To Observe P2P Lenders As Well As Invest in Security Frameworks (Industry Daily News), Rated: A

The government has declared RBI (Reserve Bank of India) as the watchdog for P2P (peer to peer) lending marketplaces that have been segmented as NBFCs (non-banking finance companies). While this might elevate prices for online lenders via compliance needs, most have greeted the decision claiming that it provides them identification.

RBI To Allow Funds Transfer Among Mobile Wallets (Bloomberg Quint), Rated: A

The Reserve Bank of India will make prepaid payment instruments like e-wallets, gift cards and meal coupons interoperable for customers complying with the central bank’s know your customer guidelines.

Inter-operability among KYC compliant prepaid instruments will be implemented in six months after the RBI issues its revised norms within a week by October 11, the central bank said as part of its developmental and regulatory policies.

What startup entrepreneurs should learn from sports (MoneyControl), Rated: B

The so-called unicorn startups and their founders have become role models for the millennials. Hardly any town or city in India is left untouched by the startup fever and its multi-million funding stories.

1. Sport helps build character: Sanjay Darbha, the founder of Peerlend, a peer-to-peer lending platform and a sports enthusiast who competes in Senior Men’s circuit tournaments of the International Tennis Federation (ITF), explains, that sports inculcates attributes such as discipline, focus, and patience.

2. Sports lets you, be yourself: If entrepreneurs want to know the better or bitter side of their team members – make them play a sport.

3. Sport is a medium to connect beyond business: Ecosystem players should find innovative ways to connect with each other to get a better understanding of other’s needs and challenges.

4. Sport helps in building lasting bonds: A playground in an excellent incubator that helps in the construction of robust and long-lasting relationships.

Startups could use games to let their team members explore possible synergies between them.

Canada

Aspire FinTech is closing down (Aspire Email), Rated: AAA

Hey all,

I wanted to share the news today that Aspire Financial Technologies will be officially shutting down this week.  Sadly, the search for a strategic partner we started in the summer wasn’t successful, and our funding has now run out.  As a result, we no longer have the resources to continue the build of our loan data and analytics infrastructure solutions.

I’ll be running a sale process of Aspire’s IP (Aspire Gateway and ALD Explorer solutions) over the next month or so, looking for a quick outcome.  Feel free to contact me to discuss.

Thanks to all that have supported Aspire over the past two years.  Despite the odds, we made it this far, with your help.  Unfortunately, expensive and complex build requirements, with long institutional sales cycles, combined with a lack of scalable professional seed-stage funding in Canada, have been our undoing.  Any one of these being different would likely have yielded a better outcome, but all three together have proved to be terminal.

Mark and I have had a great team to work with.  We thank them for all the hard work and long hours, and wish them well as they move on to their next challenges (and hopefully a bit more stability!).

For me personally, I’ve made and consumed a great deal of  “FinTech Kool-Aid” over the past two years, which has permanently altered by view of the future, and the role that technology will play in the delivery of financial services to consumers, small businesses and corporations going forward.  I’m excited to see this play out, and the role I can play in making it happen.

Best regards,

David A. Fry, MBA, CFA
Co-Founder and CEO
Aspire Financial Technologies Inc.

Authors:

George Popescu
Allen Taylor

Tuesday September 26 2017, Daily News Digest

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News Comments Today’s main news: SoFi’s CTO leaving the company. World Business Lenders buys BizFi assets. Zopa improves loan sale processing times. Fintech startups, banks face off on new European payments rules, data access. Klarna wins international ANDY award. Today’s main analysis: How MoneyTap is tackling the unbanked problem in India. Today’s thought-provoking articles: Fundrise, Wealthfront spar over real […]

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United States

United Kingdom

China

European Union

India

APAC

Africa

News Summary

United States

SoFi’s chief technology officer to step down (Daily Mail), Rated: AAA

June Ou, chief technology officer of online lender Social Finance Inc and wife of its former CEO Mike Cagney, plans to leave the company, according to a source familiar with the situation.

The exact date of her departure from SoFi, has yet to be decided, according to the source. Ou did not immediately respond to requests for comment.

Ou, who joined SoFi in 2012 and is also the company’s vice president of engineering, is the latest senior executive to depart the embattled financial technology firm.

A pair of investing startups are in a public spat about the future of real-estate investing (Business Insider), Rated: AAA

It all started when Andy Rachleff, the CEO of Wealthfront, a California-based roboadviser with nearly $8 billion under management, went after the business model of Fundrise, a Washington DC-based real-estate crowdfunding company. , Rachleff said professionals who run managed real-estate funds fare poorly compared with low-cost index-tracking ETFs, such as Vanguard REIT Index Fund.

Fundrise’s CEO Benjamin Miller says this is a misrepresentation of how Fundrise works. “Amateur investors” on the platform aren’t picking individual projects, but rather strategies managed by the company.

“We operate like a Blackstone, but we democratize it and lower costs,” Miller told Business Insider.

Miller points to the recent initial public offering of Invitation Homes (INVH) to illustrate how expensive the public markets can be. INVH priced 215% higher in the public markets than in the private markets, according to data from Google Finance.

Source: Business Insider

Bizfi Survives, Thanks to World Business Lenders Asset Purchase Deal (deBanked), Rated: AAA

The Bizfi marketplace is slated to live on, according to Stephen Sheinbaum who joined World Business Lenders (WBL) as a managing director in July. On Wednesday, WBL purchased several assets from Bizfi including the brand, the marketplace, the Next Level Funding renewal book, and other related pieces of the company, he says. Sheinbaum founded Bizfi (then Merchant Cash and Capital) in 2005.

WBL, a Jersey City-headquartered small business lender will also be a lender on the platform.

The Tech Revolution Has Arrived For Alternative Lending (Bisnow), Rated: A

The growth of alternative sources of capital has opened a door for online and marketplace lenders, combining the availability and flexibility of capital with speed and transparency.

“Upward of $100B in loans are coming due and there is a gap,” Money360 President Gary Bechtel said. “The banks, life insurance companies, agency lenders, can only provide so much capital, and this is the void that nonbank lenders like Money360 are filling. And many of these firms have a technology component to them.”

Marketplace lending has become a popular alternative for student loans, credit card and small-business debt, but the commercial real estate industry has yet to fully participate. For Bechtel, it is a missed opportunity.

Money360 lifts those constraints. Because it does not have the same balance sheet requirements and regulations as traditional lenders, borrowers seeking financing for any asset class can apply for a loan on the platform. The platform offers loans between $1M and $20M on both bridge and permanent loans, with competitive terms and features similar to traditional lenders. Bridge loans are interest-only, and like banks, permanent loans utilize 25- to 30-year amortization schedules.

Worthy Financial Announces the Closing of Its Seed Financing Round (BusinessWire), Rated: A

Worthy, a digital investment app that redefines how Americans access investment products, diversify their portfolios and save for retirement, announced the successful closing of its seed financing round. The funds will be used for the full-scale roll-out of the Worthy mobile app, and will enable Worthy to expand its growing user base as well as to broaden the array of investment product options it offers retail investors.

Although yield-starved sophisticated investors have been increasingly allocating more and more of their capital to alternative asset classes such as real estate and private company debt, most retail investors are still unaware that modern technology and a new regulatory regime allows them to access these products online in very small aggregates.

Acting Comptroller of the Currency Keith Noreika Addresses Online Lending & Fintech Innovation (Crowdfund Insider), Rated: A

Speaking at the Online Lending Policy Summit in Washington, DC, Acting Comptroller of the Currency Keith Noreika discussed the online lending industry and his perspective on responsible innovation. Noreika told the conference participants;

“I see the growth of online lending and marketplace lenders as the natural evolution of banking itself. Your industry demonstrates a certain entrepreneurial spirit to seize economic opportunity that begins with your new idea. The idea may be leveraging the lending power of groups or using new data to assess creditworthiness. Or, the idea may be a way to make decisions faster or to give consumers more control of their financial lives.”

Noting that US marketplace lenders have originated about $40 billion in consumer and small business loans in the past ten years, Noreika said that online lending represents a substantial portion of all consumer unsecured credit in the US.  Some prognosticators expect that online lending will top $1 trillion by 2020.

What’s Hot and What’s Not in U.S. Fintech (Finovate), Rated: A

Here are the rules– we shouted out a list of 20 fintech trends and our cocktail-fueled audience shouted their opinion on whether the trend is hot or not*.

The hottest

  • Regtech
    I was fairly surprised to hear the audience react so strongly to this trend, since the U.S. is lagging in regtech startups and adoption.

What’s hot

  • AI  As we close out 2017, players in the fintech sector seem to be in all out hype mode on the subject.
  • Open Banking  Though the U.S. doesn’t have any pending open banking regulation, folks still seemed quite optimistic about this trend.
  • Mobile account opening  Certainly a necessity for mobile-centric onboarding, mobile account opening has been around for awhile. It seems to have received new life with many enabling technology developments and IoT device launches throughout the years.
  • Challenger banks  With the lack of challenger bank launches in the U.S. (that is, compared to the U.K.), it was surprising to see the group cheer on challenger banks so vociferously. Perhaps a sign that more challenger banks are coming to the U.S.?
  • Insurtech – The audience seemed to heavily favor this trend over others, despite the relative lack of insurtechs in the U.S.

Not hot

  • Chatbots
  • Roboadvisory
  • ICO’s
  • Alternative credit scoring
  • Voice banking
  • Mobile wallets
  • Biometric authentication
  • Alternative lending

Payday lender operators forced to forgive $ 12M in loans (New York Post), Rated: A

New York on Monday announced a settlement with two payday lender operators — barring them from working in the state and forcing them to forgive roughly 20,000 loans worth roughly $12 million.

While payday lending is illegal in New York, state residents can fall prey to the predatory loans through out-of-state lenders trolling online.

Vullo called out E-Finance for making “unlawful misrepresentations” to New Yorkers when requesting payments and negotiating payment agreements.

TAR, headed by Jeremy Schaffer, and E-Finance, headed by Joshua Mitchem, according to court papers, will pay a $45,000 penalty plus as much as $15,000 to cover the cost of sending notices to consumers whose loans were forgiven.

After ending payday lending, group looks for alternatives (Argus Leader), Rated: A

South Dakotans for Responsible Lending will hold a meeting Thursday aimed at creating a nonprofit to help South Dakotans get small-dollar loans without taking on debt.

The effort comes months after South Dakota voters opted to cap interest rates on payday lenders, crippling the industry in the state.

The grant and donation-funded Minneapolis group helps participants pay back loans over a 12-month period with no fees or interest. Since 2015, the group has helped 131 loan participants refinance $90,072 and save $355,042 in interest.

Sara Nelson-Pallmeyer, the group’s executive director, said South Dakota voters have already taken a significant step in reducing payday loan debt by eliminating the industry. In its place, banks and credit unions should look to offer additional loans, she said.

The Great “Sexism in FinTech” Debate (FintekNews), Rated: A

Although I would never diminish it or deny its existence, I just don’t see sexism as an escalating problem in FinTech – or anywhere in the developed world for that matter. In fact, what I see trending is the exact opposite.

Extraordinary women in FinTech are all around us. I read about them every single day – not only in leading industry rags like FintekNews, Bankless Times and Crowdfund Insider, but also in long-established financial periodicals. In fact, FintekNews, which is published by Cindy Taylor, an accomplished FinTech visionary in her own right, devotes an entire section just to 

Breaking Banks: How men can support women in fintech (American Banker), Rated: A

Brett King is back on the show, talking about diversity in fintech with Anouska Streets, head of engineering at Finkit, a unit of digital banking software company Monitise, which was recently bought by Fiserv; and Colleen Wilson, founder and CEO of consulting firm Collaborate Chicago.


Women in Banking: The Most Powerful in 2017 (American Banker), Rated: B

The Most Powerful Women in Banking

1. Cathy Bessant, Bank of America
2. Marianne Lake, JPMorgan Chase
3. Ellen Alemany, CIT Group
4. Nandita Bakhshi, Bank of the West
5. Diane Reyes, HSBC

16. Hannah Grove, State Street

23. Teresa Tanner, Fifth Third Bancorp

The Women to Watch

1. Mary Mack, Wells Fargo
2. Thasunda Duckett, JPMorgan Chase
3. Heather Cox, USAA
4. Yolande Piazza, Citigroup
5. Ellen Patterson, TD Bank

19. Jane Russell, TD Bank

Andy Hinrichs of AutoGravity (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is the CEO and co-founder of AutoGravity, Andy Hinrichs. After spending two decades in auto finance Andy decided he wanted to do something to finally bring the car buying experience into the 21st century. He started AutoGravity less than two years ago but they are already seeing great traction.

First Associates Broadens Service Offerings to Offer Additional Client Support (Benzinga), Rated: B

First Associates Loan Servicing announced a new lineup of loan support and lending solutions today to better serve the expanding needs of their industry–leading clients.

New solutions include:

Primary Loan Servicing

  • Reduced delinquencies & defaults
  • Low-risk, cost-effective
  • Omnichannel communication to maximize reach
  • Top-notch investor, credit bureau & regulatory reporting
  • Secure fund flow & control

Capital Markets Support
Backup servicing, Contract Verification, Borrowing Base Calculation or Validation, Custodial Services & Treasury Services (Collateral & Payment Agent)

Pre-Funding Support
To help ensure loans are properly originated and funded: Applications by Phone, Customer Service Call Support, Borrower Verification Calls & Document Verification

Post-Funding Support
Customer Service Call Support, Multi-channel Collections Support & Borrower Verification Calls

Futurist Jack Uldrich to Speak on the Future of Wealth Management and Banking in Four Cities in Four Days (Life Pulse Health), Rated: B

Starting tomorrow, acclaimed financial futurist and best-selling author Jack Uldrich will begin a series of four separate presentations on the future of finance in four consecutive days. His first presentation will be for leaders with Atlantic Trust in Denver, Colorado, followed by presentations in Chicago, Washington D.C., and ending in Toronto on Sept. 29th.

Uldrich is a prolific speaker on future trends in wealth management, finance, and banking, speaking to dozens of finance groups globally each year, including some of the biggest names in these industries.

United Kingdom

Zopa improves loan sale processing times (P2P Finance News), Rated: AAA

ZOPA investors are now able to sell their loans within a few days on the secondary market, after the peer-to-peer lender made improvements to speed up processing times.

Earlier this month, Zopa promised a “large change” to address investor concerns about the time it is taking to sell loans.

UK peer-to-peer lending is about to face its toughest test since the sector was born (Business Insider), Rated: AAA

GLI Finance, a listed investment company that backs fintech businesses, on Monday wrote down the value of its investments in eight peer-to-peer lending platforms by £12.6 million to £28.9 million, citing “concerns over the collectability of some platform loans.”

The disclosure came after concerns were raised above fast-growing peer-to-peer lender Lendy Finance over the weekend.

Meanwhile, Zopa, the UK’s oldest peer-to-peer lender, last month wrote to investors telling them to expect higher-than-forecast losses as a result of deteriorating credit conditions. And peer-to-peer platform Wellesley & Co. last year raised £2.5 million to “absorb impairment losses that would otherwise have been passed on to peer-to-peer investors.”

The backdrop to all these disclosures is a surge in unsecured consumer borrowing and rising inflation in 2017, factors which are combining to fuel fears people may be unable to pay back all they have borrowed. Unsecured consumer borrowing hit £202 billion in July, the highest level since 2008. Meanwhile, inflation is running at 2.9%, well above wage growth.

Can’t afford to buy a property? You can now borrow your deposit (The Sun), Rated: A

Property Pact aims to help those who are struggling to get together a deposit for their first home.

To apply for a loan with Property Pact, you must meet the following:

  • Have a good or excellent credit rating
  • An annual salary of £30,000 or more
  • No County Court Judgements (CCJs) against you
  • Have at at least one year of continuous employment with the same employer
  • Must be employed in a profession or managerial role or a key job leading to a professional qualification or managerial role.

To register your profile on the site, you’ll need to pay £150.

Investors can then browse your profile and decide if they want to lend the money to you.

If an investor then agrees to lend, you’ll pay a 5 per cent arrangement fee – on a loan of £30,000 that would be £1,500.

The loan will be repaid at a rate of 5.5 per cent above base rate – so currently 5.75 per cent.

Britain’s first Small Business Commissioner is needed now more than ever (SME Web), Rated: A

With this in mind, let’s look at the three main challenges that the Small Business Commissioner will need to address in the coming year:

  1. Late payments: Time and time again we are reminded of the late payments crisis damaging small businesses, who are owed a collective £26.3 billion. Research from the FSB shows that poor payment practices are on the rise, causing 50,000 business deaths each year.
  2. Funding: SMEs bring a combined turnover of £1.8 trillion to the UK economy and we must encourage people to follow their dream of running their own business. In addition, some will need educating about using alternative finance methods, such as P2P lending, invoice financing and crowd funding.
  3. Rising costs
China

A Missing Piece in China’s Economy: Consumer Credit Ratings (WSJ), Rated: AAA

The world’s second-largest economy doesn’t have a widely accepted system to gauge creditworthiness among a fast-expanding middle class with growing paychecks, a hunger for consumer products and little or no credit history.

Chinese household debt is growing rapidly, outpacing broad credit growth every year since 2013 and reaching 38 trillion yuan ($5.7 trillion) by the end of the second quarter of this year. But household debt remains relatively low by global standards, at about 44% of gross domestic product, and the absence of a widely used standard of creditworthiness is keeping consumer borrowing from growing even faster, hampering access to credit for some 500 million potential borrowers.

China’s central bank has sought for nearly three years to put in place an answer to the FICO credit-scoring system predominant in the U.S., created in 1989 by data firm Fair Isaac Corp.

Technology giants Ant Financial Services Group and Tencent Holdings Ltd., along with several smaller companies, are developing competing credit-rating systems. Tencent began testing its system in August, two years after Ant, an affiliate of e-commerce giant Alibaba Group Holding Ltd. , launched its Sesame Credit personal scores.

But none of these projects has emerged as a single standard that’s widely used and trusted by lenders nationwide.

Paving the way?

Regulators in March set up a new clearinghouse, Wanglian, to centralize the processing of online payments.

Meanwhile, Ant’s Sesame Credit has a head start on its competition. Launched in 2015, Sesame derives a person’s credit score—which the individual can view on Ant’s popular Alipay payment platform—by mining data on the consumer’s e-commerce activity and other online behavior. Higher ratings confer perks such as waived deposits at some hotels and faster security screening at Beijing’s airport.

There are small credit bureaus in major cities including Beijing and Shanghai, but they have never gained traction and often lack access to borrowers’ financial data. Such bureaus reach only a third of Chinese borrowers, compared with 90% of borrowers in the U.S. reached by credit bureaus there, according to consulting firm Oliver Wyman.

Source: The Wall Street Journal

Hong Kong ‘falling behind’ in race to build up automated financial adviser platforms (South China Morning Post), Rated: A

Operators of automated, algorithm-driven financial planning services, or so-called robo-advisers, in Hong Kong need to significantly step up their game if they are to compete with Chinese and US institutions, according to Freeman Tsang, head of China and Hong Kong for asset management firm Legg Mason.

Only a few securities brokerages have entered Hong Kong’s robo-advisory market, which unlike the one in the US, lacks an open, computer interface that allows access to investors’ portfolios across different companies to develop an overall view of their financial status.

Such a foundation is vital for robo-advisers to be able to offer more customisable financial advice and support transactions across different investment tools and firms.

European Union

Fintech startups and banks face off on new rules over European payments and data access (Tech.eu), Rated: AAA

A large group of over 70 European fintech companies are warning that new EU rules on payments processing could unfairly pit them against large banks and decimate the industry if they are passed into law.

The rules are part of the European Union’s Payment Services Directive (PSD) and would ban the practice of “screen scraping,” a common practice used by fintech companies to “scrape” display data from one application (like an online banking service) and display it on their own.

In their manifesto, the 71 fintech firms argue that the ban on scraping is unreasonable and a backdoor method for traditional banks to claw back control as the Fintech revolution threatens to upend their business models.

Revised payment services directive

The European Union’s Payment Services Directive (PSD), originally passed in 2007, built a single market for cashless payments in Europe, making cross-border payments as easy and efficient for European consumers and businesses as domestic transfers.

Most importantly, the revised PSD (also known as PSD2) mandated that banks loosen their grip over customer account data and allow third parties to be able to access it with customers’ permission.

Klarna “Smoooth” Ad Campaign Wins International ANDY Award from Ad Club of New York (PR Newswire), Rated: AAA

Klarna, a global payments provider, has been honored with an International ANDY Award by the ADVERTISING Club of New York for its 2016 “Smoooth” campaign that illustrates how ‘smoooth’ payments can be for consumers and online merchants using its platform.

The award was presented at the 14th annual “Stars of Madison Avenue” luncheon.

The AD Club’s International ANDY Awards jury chose this year’s six honorees for making an impact on marketing, commerce, culture and social responsibility through brave and creative advertising and marketing campaigns.

Klarna’s “Smoooth” campaign kicked off with a series of critically acclaimed ad spots. Samples of the campaign are available here and here.

Europe’s top venture capital investors by country (Banking Technology), Rated: A

 

At the top of the list, High-Tech Grunderfonds has made nearly 200 deals to 150+ German companies since 2012, making it the top investor in European tech VC by a long shot. Notable recent deals include a $3.4 million seed round to POSpulse (shopper intelligence platform) and participation in a $2 million seed round to MoBerries (HR and workforce management company). Since 2012, German tech companies have seen more than 1,600 deals worth over $10 billion.

The UK has seen the highest number of deals and total funding deployed to tech companies, at more than 3,200 deals worth nearly $20 billion since 2012, according to CB Insights.

Top investors in European tech by country (as of 30 August 2017), according to CB Insights:

  • Austria – SpeedInvest
  • Belgium – PMV
  • Cyprus – SingulariTeam
  • Czech Republic – Credo Ventures
  • Denmark – SEED Capital
  • Estonia – SmartCap
  • Finland – Lifeline Ventures
  • France – Alven Capital
  • Germany – High-Tech Grunderfonds
  • Greece – PJ Tech Catalyst
  • Iceland – Frumtak Ventures
  • Ireland – AIB Seed Capital Fund
  • Italy – LVenture Group
  • Latvia – Imprimatur Capital
  • Lithuania – Practica Capital
  • Luxembourg – Mangrove Capital Partners
  • Netherlands – Newion Investments
  • Norway – Investinor
  • Poland – SpeedUp Venture Capital Group
  • Portugal – Portugal Ventures
  • Romania – GECAD Group
  • Slovakia – Neulogy Ventures
  • Spain – Caixa Capital Risc
  • Sweden – Almi Invest
  • Switzerland – Swisscom Ventures
  • Turkey – Aslanoba Capital
  • UK – LocalGlobe

 

New10 open for business! (ABN-AMRO), Rated: B

Starting today, SMEs looking for a loan online can go to New10, an initiative of ABN AMRO. New10 lets them know within 15 minutes whether they qualify for a loan and under what terms and conditions. New10 meets the needs of this group of SMEs that want to take out a loan entirely online.

New10 provides loans ranging between EUR 20,000 and EUR 1 million.

India

Consumer Lending Startup MoneyTap Is Shooting For The Stars (Inc42), Rated: AAA

Ensnared by the allure of entrepreneurship, Bala ventured into the promising world of fintech with MoneyTap, a consumer lending startup that was launched last September.

Touted as India’s first app-based credit line, the fintech startup is working to democratise credit in a country where 19% of the total population is still unbanked.

“The reason we started MoneyTap was that we wanted to solve the problem of consumer credit. Clearly, India is very credit starved. Less than 1% of Indian consumers have access to any form of unsecured credit from a bank or any financial institution. Most people, whether it’s from middle class or lower middle class, need credit, but they have to use informal methods,” explains Bala.

Based on his interactions, he concluded that there are four main reasons behind this pervasive inadequacy of consumer credit in the country:

  1. Historical baggage/legacy
  2. Lack of data
  3. High overhead in small-ticket loans
  4. Finally, the emergence of a new class of demanding consumers

Between 2003 and 2007, a number of banks in India were issuing loans without doing any detailed checked. At the time, there was no credit bureaus or Aadhaar. Even PAN was not widely used. When the subprime crisis hit in 2008, all these banks got burned. In the period prior to that, around 24 Mn credit cards were sanctioned in India, of which nearly 10 Mn crashed.

In a country with a population of over 1.31 Bn, only 220 Mn people have PAN cards. Other forms of KYC (know your customer), including voter ID, Aadhaar and ration cards are not considered as the sole identity proof, especially when it comes to financial activities. Credit information companies (CIC) – such as TransUnion Credit Information Bureau Ltd. (CIBIL), Experian India and Equifax India – still do not have records of a large section of the country’s banked populace.

As per Bala Parthasarathy, the cost of evaluating and issuing a credit line/loan/credit card for a bank is extremely high and thus they prefer to give big-ticket loans to few people rather than small ticket loans for a large group of people. The average loan ticket size in this country is between $4,629 – $7,715 (INR 3 Lakh-INR 5 Lakh).

If you think of India as a pyramid in terms of the net worth of people, all these banks focus on only around 12 to 15 Mn customers at the top of the pyramid because they are capable of applying for a loan worth $4,629 to $7,715. The problem, according to him, arises when someone wants a $463 (INR 30,000) loan because the overhead, in this case, is too high for the bank to make any profit.

The consumer lending startup claims to currently cater to customers with monthly income ranging between $308-$1,080 (INR 20,000-INR 70,000).

On the MoneyTap platform, consumers can borrow anywhere between $46-$7,715 (INR 3,000 to INR 5 Lakh) with an option to choose the repayment duration from as little as two months up to three years.

At present, MoneyTap charges a one-time setup and origination fee of $7.7 (INR 499) plus tax.

Source: Inc42
APAC

Fintech experts to discuss the future of finance in Phnom Penh (Southeast Asia Globe), Rated: AAA

Inspire Asean is back on 29 September at Sofitel Phnom Penh Phokeethra for an afternoon of presentations, exchanges and networking. One of our larger events, this edition will have six engaging presentations from top Fintech startups, infrastructure providers and international banks to discuss digital wallets, big data, blockchain technology, cryptocurrencies and alternative lending models.

The speaker lineup includes:

  • Brad Jones, chief executive officer of Wave Money in Myanmar and previously CEO of Wing in Cambodia.
  • Hong Samarkkeenich, regional sales director at Lenddo, is responsible for bringing the company’s technology to new and underserved market segments in Indochina.
  • Sim Chankiriroth is the founder and CEO of BanhJi, a free and localized online accounting software, built for Asean MSMEs.
  • Vincent Ling, deputy general manager of UnionPay International SEA, is responsible for regional brand and communications as well as the Core Products portfolio.
  • Steve Miller is the founder of CryptoAsia, a growing Bitcoin startup based in Phnom Penh.
  • Tomas Pokorny is the CEO of PiPay, a Cambodia-based fintech company that combines payment and lifestyle (social) application solutions.

Big Data, a Key Factor in Decision-Making (FiNews), Rated: A

A survey conducted by Deloitte showed that the respondents feel that analytics will become more important to their organizations in the next three years and that its greatest benefit is a key factor in making better decisions, and Singaporean companies are picking up on this.

This trend is great news for the local data analytics sector. In Singapore, the industry is expected to contribute at least $1 billion to the economy this year alone according to the Economic Development Board.

However, being in the service industry, these firms often lack significant physical collateral and assets, leaving them unable to turn to banks and similar financial institutions for financing. This results in cash flow issues that could limit the growth of these companies, if not hamstring them completely.

How Can Data Analytics Persevere?

  • P2P Financing
  • Equity Crowdfunding
  • Receivables Financing

10 Fast Growing Fintechs in Philippines (Fintech News), Rated: A

Acudeen

 

Acudeen is an organization opens its business to small and medium enterprises (SMEs) looking to boost cash flows, thereby answering an unsolved business need.

Ayannah

Ayannah is a leading provider of digital financial services to the world’s emerging middle class, most of whom are migrants or unbanked coming from the base of the pyramid.

BloomSolutions

Bloom makes money smarter by combining modern technologies like cryptocurrency with traditional infrastructure such as SWIFT and SMS.

Lendr

Lendr is an end-to-end loans origination and loans management platform that you can access via your desktop or mobile device.

LoanSolutions.ph

Loansolutions provides loans via our network of partner banks and lending companies.

Mynt

Mynt is a leader in mobile financial services focused on accelerating financial inclusion through mobile money, micro-loans, and technology.

PawnHero

PawnHero now lets you pawn online, anytime and anywhere.

PayMaya

PayMaya Philippines, Inc. (formerly Smart eMoney, Inc.) is the pioneer in mobile money and payments, having established brands such as PayMaya, the first prepaid online payment app that enables the financially underserved to pay online without a credit card; PayMaya Business, the company’s system solutions provider that allows businesses to receive online and card payments anytime, anywhere; Smart Money, the world’s first e-wallet linked to a mobile phone; and Smart Padala, the leading remittance network in the Philippines with over 15,000 agents across the country.

Ripple Supports Singapore’s Fintech Hub Aspirations With New Office (Ripple), Rated: B

Singapore has publicly stated ambitions to be the world’s leading fintech and innovation hub. It is also one of the biggest and busiest global trade centers with many large, multinational companies basing their regional treasury offices in the country. For these reasons, and to support our rapidly-growing customer base across Asia-Pacific markets – including Standard Chartered, a Ripple investor, member of the RippleNet Advisory Board, and early adopter of blockchain technology to power payments – we are excited to announce we have opened a new office in Singapore.

Africa

Riby aims to transform the way over 20 million West Africans use co-operatives (Techpoint), Rated: AAA

Mr. Lanre used to be hesitant about loaning his colleagues at work money, having suffered from bad debts. Luckily for him, his organisation launched a co-operative scheme to manage employees’ finance. Among other things, the co-operative allows anyone with an urgent financial need to easily request and get assistance.

It is estimated that 63% of Kenyans derive their livelihoods from co-operatives, while in New Zealand, 22% of the gross domestic product (GDP) is generated by co-operative enterprise. And while 50% of sugar-cane planters are grouped into co-operatives in Mauritius, the co-operative movement in Columbia accounts for as much as 697,006 jobs in the country.

Nonetheless, as CEO of a financial management service platform, Salami Abolore reveals that over a million co-operative bodies exist in Nigeria.

He says this with confidence because his company, Riby, helps co-operatives and their members remotely control both their finance and financial operations.

Riby happens to provide the technology that helps Mr Lanre’s company to manage their (employee) co-operative scheme.

The Riby peer-to-peer lending module allows companies to run internal co-operatives within their fold. A case in point is a savings rotation mechanism that auto-debits employees and credits whoever is due to receive money for the month. For both modules, Riby charges a per-user fee of ₦200 upfront, amounting to ₦2000 per annum and ₦500 on a quarterly basis.

The agent management platform, Riby’s third module, is another exciting proposition that raises an innocent suspicion as to whether Riby is taking the competition to the commercial banks. This is apparent in their overall quest to include everyone in the system.

About 40% of Nigerians are yet to register with any financial institution in the country, according to the Central Bank of Nigeria. Statistics from the Nigeria Inter-Bank Settlement System (NIBSS) further show that there are only about 40 million registered bank accounts across the country. These accounts are enrolled by just 20.8 million customers, some having more than one account. It is therefore apparent that co-operatives can be used to reach the unbanked.

Fintech startup MaTontine wins Seedstars Senegal (Disrupt-Africa), Rated: A

Fintech startup MaTontine was named winner of the Senegal round of the global Seedstars World competition over the weekend, earning the chance to represent the country at the global final in Switzerland next year to compete for up to US$1 million in equity investment.

MaTontine emerged the overall winner for its solution that provides access to small loans and related financial services like microinsurance by digitising traditional savings circles.

Authors:

George Popescu
Allen Taylor