Thursday September 26 2019, Weekly News Digest

LendingClub eligibility

News Comments Today’s main news: SoFi intros crypto trading. Investors locked out of LendingClub in 4 states. Funding Circle asks US regulators to folow UK’s model. Fundbox raises $176M. Klarna surpasses 12M transactions per year. Today’s main analysis: U.S. subprime auto loan ABS recession scenarios (A MUST-READ). Today’s thought-provoking articles: Recession talk cooling. Consumers with […]

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

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United States

United Kingdom

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News Summary

United States

SoFi Introduces Crypto Trading With SoFi Invest (PR Newswire), Rated: AAA

SoFi announced today that it has added crypto trading to its fast-growing SoFi Invest platform, as a response to demand from its over 800,000 members. SoFi Invest is now the first platform to offer automated and active investing with stocks, ETFs, and crypto through a single app.

SoFi Adds Bitcoin, Litecoin, and Ethereum to Invest Platform (Cheddar), Rated: A

SoFi goes live with crypto trading service for its over 800K users (The Block), Rated: B

SoFi users can initially buy and sell three cryptocurrencies – bitcoin (BTC), ether (ETH) and litecoin (LTC). The Block first reported the story last week, saying that the firm is beta testing the service in partnership with Coinbase.

SoFi CEO on what’s next for the company (Yahoo! Finance), Rated: A

Sofi CEO Anthony Noto joins The First Trade to discuss what’s next for the company.

Watch the video here.

Charlie Lee {LTC} praises SoFi as crypto-investing with Litecoin kicks-off (Our Bitcoin News), Rated: A

Litecoin is ranked at #6 underneath Tether, as well as Bitcoin Cash, in the market. The price jumped up at a rate of 0.60% in the course of the past 24-hours. This led to LTC scaling all the way up to $57.03 where it presently rests. The trading volume recorded stands at roughly $2.957 billion, whereas the supply has 63,337,479 LTC coins included as part of circulation. The total market cap of Litecoin amounts to $3.612 billion which depicts a massive decline compared to the value attained a week back.

SoFi CEO: Start investing in your 20s (Yahoo! Finance), Rated: A

SoFi CEO Anthony Noto discusses how his company’s consumers can now buy and sell Bitcoin, Ethereum and Litecoin.

SoFi Refunds Investors Hit By Capital Gains from Proprietary ETFs (ETF Trends), Rated: A

Financial technology company SoFi is offering refunds to investors hit by capital gains taxes following the change of replacing Vanguard funds with their proprietary ETFs in certain portfolios managed by their robo-adviser.

Some Investors Locked Out of Investing in LendingClub Loans (Lend Academy), Rated: AAA

Over the last 24 hours we’ve received several messages from Lend Academy readers alerting us that they have received information that they are no longer able to invest in LendingClub notes. There is is also an active discussion on the Lend Academy forum.

LendingClub state eligibility as of 9/24/2019. Source: Lend Academy

Funding Circle urges US regulators to follow UK model (P2p Financ News), Rated: AAA

FUNDING Circle’s US division is urging the Securities and Exchange Commission (SEC) to amend its restrictions on peer-to-peer retail investment.

The US financial regulator limits annual investment to five per cent of an investor’s annual income if their yearly income or net worth is under $107,000 (£86,075), rising to 10 per cent if the investor earns more than that.

Two Franchise Trends Aspiring Franchisees Should Look Out For (Forbes), Rated: A

Over the past 14 years, I’ve coached more than 1,500 people who were searching for the best franchise for their situation. I recently read the 2019 Small Business Trends 

Fintech Fundbox raises $ 176M to lend to business using AI (Information Management), Rated: AAA

Fintech Fundbox Inc. has raised $176 million in a new funding round from investors including Allianz SE and General Catalyst. The company planned to announce the funding along with a new $150 million credit facility.

A Fundbox spokesman said the new round valued the company at between $500 million and $1 billion, but would not disclose the exact valuation.

U.S. Subprime Auto Loan ABS: Evaluating Recession Scenarios (DBRS), Rated: AAA

Summary Highlights

  • Under the hypothetical Recession Scenarios, DBRS found that credit enhancement (excluding excess spread) coverage of remaining expected losses, as determined by a multiple calculation, decreased at the inception of the hypothetical recession for all of the Sample Transactions. The senior debt tranches experienced a swift deleveraging whereas some of the subordinated debt tranches could be at risk for a potential downgrade during the hypothetical Recession Scenarios.
  • After the initial decline in the multiple calculations at inception of the hypothetical Recession Scenarios, the deleveraging nature of the sequential pay structures of the transactions resulted in the calculated multiples for the analyzed debt tranches to move into the multiple range corresponding to the original rating of the debt tranche over varying lengths of time. The multiples for some of the debt tranches originally rated BB were weaker and moved into the BB range at a slower pace. As a result, those tranches would be more likely to be considered for a potential downgrade as compared to the more senior debt tranches where the structures delevered more quickly and the multiples reached the range corresponding to the original rating over a generally shorter period.
  • Over the life of the Sample Transactions, the credit enhancement multiples for all of the debt tranches analyzed, some on a delayed basis, ultimately moved into the AAA rating multiple range.
  • In each of the Recession Scenarios, the structure of each of the transactions provided sufficient credit enhancement for timely payment of interest and ultimate payment of principal of all debt tranches.
Source: DBRS

Read the full report here.

A Cooling in Recession Talk, Heat Up in Housing (PeerIQ), Rated: AAA

Lower rates, improved credit scores, and tighter housing inventory are improving the outlook for housing. Housing market achieved an 18-month high in housing starts and a record high in FICO scores.

The Citigroup Economic Surprise Index – a measure of actuals vs economist’s expectations – has also registered readings above the neutral baseline suggesting slowdown fears may be exaggerated.

Source: PeerIQ, CitiGroup

Consumers with Significant Liquidity Needs Often Access Alternative and Traditional Credit Markets Concurrently (GlobeNewswire), Rated: AAA

Many lenders believe that consumers who turn to the alternative credit market for liquidity do so because they have no other options. However, a TransUnion study presented today at the Lend360 conference found that these borrowers are frequently applying for and receiving traditional credit at the same time. While traditional subprime installment lenders and alternative lenders are competing over the same consumers, the study finds that the liquidity need is often not fully met in either market.

Source: TransUnion

Risk Levels Higher for Traditional and Alternative Loan Borrowers

Controlling for risk score, 8.5% of the alternative credit-active consumers had a serious delinquency in the first 12 months, vs. just over 2% for the control group. Bankcard performance was also worse. While these borrowers exhibited a preference for unsecured personal loans under $1,500 within 12 months of the alternative credit origination, they also originated auto and bankcard credit during that time.

Read the full report here.

Lendio to Double Sales Force, Expand Loan Product Offerings (Benzinga), Rated: A

Lendio today announced plans to double the sales force at its Lehi, Utah, and Woodbury, New York, offices. The company has hired 80 employees in 2019, and intends to add another 40 sales representatives by the end of the year, with plans to bring on another 40 in the first quarter of 2020. In addition to the expanding workforce, Lendio plans to bolster its selection of loan products for small businesses, with a 10% increase in the number of product offerings in the coming year.

Fintech lenders taking more market share from banks, survey finds (American Banker), Rated: A

Fintechs are continuing to siphon away customers for unsecured personal loans from traditional lenders, according to a study released Wednesday by Experian.

The study found that digital lenders more than doubled their market share in the past four years, with consumers across the credit spectrum increasingly turning to fintechs like Lending Club and Social Finance.

Fintechs now provide 49.4% of unsecured personal loans as of March compared to 22.4% in 2015, according to Experian.

Fintech Lenders Could Hold the Keys to Recession Recovery (Salon), Rated: A

Born out of the last recession, young fintech lenders have not yet been tested by a significant economic storm, and many in the industry are wrapped up in a dialogue of speculation about the industry’s ability to ride out an impending recession. It’s time to turn the conversation instead to focus on how fintech lenders can position themselves to play a critical role in recovery from the next downturn, whenever it may happen.

WeWork should ask SoFi CEO for advice on how to save the company (Yahoo! Finance), Rated: A

The two new guys running the slowly sinking ship known as once hot tech startup WeWork should give SoFi CEO Anthony Noto a holla on his Apple iPhone. Trust me, Noto has some good, timely advice for Artie Minson and Sebastian Gunningham.

Because the former Goldman Sachs banker and Twitter chief financial officer, now SoFi chief clearly gets how to rebuild a promising tech startup after a high-profile challenge or two. And then possibly, take it down the path of a successful initial public offering.

Generation Z’ers want more financial education – and innovative tools to help them learn (PR Newswire), Rated: A

As high school students return to school, they may see the benefits of new state laws across the country that require curriculums to offer a class about personal finance. This is great news for young adults as 76% of recent high school graduates agree it should be required, according to a national survey by Experian.

Many Gen Z’ers surveyed say innovative tools are the way to go when it comes to learning about credit (45%) and almost half (48%) would prefer to use tech-driven tools versus textbooks to learn more.

Survey respondents also say they are currently learning about finances mostly through their friends (28%), YouTube (27%) and some form of social media (24%).

D.C. Court Dismisses Challenge to OCC’s Fintech Charter (Manatt), Rated: A

In the latest battle over the Office of the Comptroller of the Currency’s (OCC’s) plan to issue special purpose national bank (SPNB) charters, a D.C. federal judge has for a second time dismissed a lawsuit brought by the Conference of State Bank Supervisors (CSBS).

The decision creates the potential for circuit split, as a New York federal court reached the opposite conclusion in a nearly identical action filed by the state’s Department of Financial Services (DFS).

9 Ways To Build an Empire Without Lifting a Finger (Yahoo! Finance), Rated: A

Another way to build your real estate empire is through real estate crowdfunding. As with investing in a REIT, real estate crowdfunding allows you to pool your money with other investors to invest in real estate. This could include multifamily units, commercial properties and bundles of single-family homes.

According to U.S. News & World Report, the top real estate crowdfunding platforms are ArborCrowd, RealCrowd, Groundfloor, CrowdStreet, PeerStreet, Small Change and RealtyMogul.

If you can afford the minimum investment — which is usually $25,000 — you can make big returns. Groundfloor boasts 10% returns for individual investors and CrowdStreet’s is even higher with 25.5% total average annual returns across all fully realized deals.

RealCrowd offers a breakdown of average annual income on a $1 million investment based on the property type: $78,000 for a suburban office, $72,000 for a retail space, $59,000 for a downtown office and $58,000 for a multifamily unit.

The Best And Worst MA Towns For Young Families (Patch), Rated: A

The online mortgage broker Lending Tree has tried to take some of the guess work out of that decision by ranking every community in Massachusetts with 5,000 or more residents based on their appeal to families with school-age children.

Hingham, under Lending Tree’s methodology, received a score of 72.5. Last-place Webster’s score was 31.9. Other towns in the top 10 included Winchester, Needham, Milton, Longmeadow, Wellesley, Cochituate, Pinehurst, Lexington and Nantucket.

JPMorgan donates $ 25M to get fintech in hands of underbanked (American Banker), Rated: A

JPMorgan Chase announced Tuesday a $25 million commitment to the Financial Health Network’s Financial Solutions Lab, a program meant to focus on the creation of fintech tools to help consumers better manage their finances.

The Financial Health Network (formerly The Center for Financial Services Innovation) previously received a $30 million philanthropic donation from the bank that spanned the last five years.

Bitcoin and Ethereum dive deep, is Bakkt to blame? (Mashable), Rated: A

“The disappointing BAKKT opening signals to the crypto community that institutions are less ready to invest in BTC at scale than was supposed, which means the price was probably too high and due for a correction. What we’ve just seen is short sellers and momentum traders piling on to make things worse, and now here we are back at support,” Alex Mashinsky, CEO at crypto lending and depository company Celsius Network, told Mashable in an emailed statement.

STRATA Trust Company Reaches $ 2 Billion AUC Milestone (PR Newswire), Rated: A

STRATA Trust Company (“STRATA”), a custodian dedicated to the complexity of holding alternative investments in tax-advantaged, self-directed retirement accounts, announced today that the firm has surpassed $2 billion in assets under custody. STRATA offers access to a range of asset classes that include private equity, private debt, real estate, crowdfunding, structured settlements and more. Since 2008, STRATA has been committed to empowering investors and the investment community with wider diversification and alternative asset custody solutions in retirement portfolios by delivering industry-leading service, education and support.

Online Pawn Lending Goes Back Offline (Business Wire), Rated: A

Prominent online lender Borro Private Finance unexpectedly ceased its collateral-based lending program this summer after nearly ten years of business. The UK-US-based establishment specialized in online pawn loans against valuable assets, including fine art, jewelry, and watches. Borro’s discontinuation of its operations comes nearly two years after the company’s withdrawal from the bridge loan market in July 2017.

Eleventh Circuit Tosses Online Lender’s Forum Selection, Class Waiver Clauses (Lexology), Rated: A

Siding with six consumers who filed suit asserting violations of state usury laws against online lenders, the U.S. Court of Appeals for the Eleventh…

Marqeta Hires Vidya Peters As First Chief Marketing Officer, as Company Continues to Build Out Expansive Global Vision (Business Wire), Rated: B

Marqeta, the first global modern card issuing platform, today announced the addition of Chief Marketing Officer Vidya Peters to its executive team.

White Oak Commercial Finance Acquires Veritas Financial Partners’ Asset-Based Loan Portfolio (ABL Advisor), Rated: A

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today it has purchased a portfolio of asset-based loans from Veritas Financial Partners, a Boca Raton, FL based specialty finance company.

Alchemy Technology And Equifax Partner To Drive FinTech Innovation (PR Newswire), Rated: B

Alchemy Technology Inc. and  Equifax Inc. (NYSE: EFX) today announced a new partnership to drive FinTech innovation. The relationship is designed to help banks, specialty financing firms and FinTech startups accelerate their time to market with easily deployable white labeled lending solutions. The two companies will make the “tech” in FinTech available to organizations of all sizes with a powerful combination of the Alchemy Lending Operating System and Equifax data analytics, credit, identity and income verification solutions.

Ex-Goldman Sachs Managing Director Joins Lendingblock as Strategic Advisor (Lendingblock), Rated: B

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the appointment of John Macpherson as a strategic advisor.

CoreLogic Credco Integrates its Three-Bureau PreQual Solution with eLEND Solutions (CoreLogic), Rated: B

CoreLogic, a global provider of property information, insight, analytics and data-enabled solutions, today announced that CoreLogic Credco integrated its Three-Bureau PreQual credit report and score solution on eLEND Solutions, an automotive technology company specializing in online and in-store credit and finance solutions. The integration of the prequalification solution gives CoreLogic Credco customers who use eLEND instant, single-source access to a consumer’s credit report and FICO score from all three national credit bureaus – Experian, TransUnion or Equifax.

Tavant Named to 2019 IDC FinTech Rankings (Business Wire), Rated: B

Tavant, a Silicon Valley-based provider of AI-powered digital lending technologies, announced today it has been named to the 2019 IDC FinTech Rankings, the most comprehensive vendor ranking within the financial services industry.

United Kingdom

Klarna Surpasses 12M Transactions This Year (PYMNTS), Rated: AAA

FinTech payments disruptor Klarna has announced the start of its “No drama, just Klarna” retail campaign in partnership with 13 brands in the U.K., the company said in a press release on Wednesday (Sept. 25).

Klarna offers “pay later” payment options and attracts 50,000 new users each week. The startup said that in the past year, it has processed 12 million transactions. In August, more than 100,000 U.K. shoppers downloaded the Klarna app.

Klarna reports surge in payments, merchant growth during first half of 2019 (Mobile Payments Today), Rated: A

Klarna, a London based installment financing provider and challenger bank, said it surpassed 3 million active users in the U.K. and 170,000 retail merchants worldwide.

Brits hit financial maturity at 31 (P2P Finance News), Rated: A

THE age at which UK men and women finally feel secure in their finances is 31, according to Zopa.

The survey showed a clear split between age groups, with 21 to 25 year-olds believing 32 would be the age when they finally felt good about their finances, while those age 26 to 30 were less optimistic about the future, saying they would reach money maturity at 38.

OakNorth Bank completes £20m loan to specialist lending fund (London Loves Property), Rated: A

OakNorth Bank, the UK bank powered by OakNorth, has provided a £20m loan to the RAW Mortgage Fund, a specialist fund providing buy-to-let property loans against residential real estate in the UK.

Wonga borrowers have less than a week to submit payday loan reclaims (The Sun), Rated: A

Anyone who believes they have been mis-sold a Wonga loan is allowed to apply for compensation, but its administrators set a deadline of 11.59pm on September 30.

If you miss the deadline, you won’t be able to apply anymore and you won’t get any compensation for mis-selling.

Nexo Now Accepts Tokenized Gold for Instant Credit Lines and Will Offer Interest-Bearing Accounts on Gold (Covington Journal), Rated: A

Nexo is adding the NYDFS-regulated PAX Gold as a collateral option for its signature , bringing gold-backed lending to the blockchain.

With PAX Gold, now offers gold investors instant access to their gold wealth in over 45 fiat currencies via same/next day transfers and across 200+ jurisdictions.

European Union

Kreditech Eyes Expansion After Securing EUR 20 Million in Equity Financing (Yahoo! Finance), Rated: AAA

Kreditech is ready to scale globally in the near-prime customer segment – declares David Chan, Kreditech CEO. The Germany-based online direct lender and Point-of-Sale (POS) financing provider estimates its global target market at ca. EUR 300 bn in consumer credit issuance. It aims to reach EUR 1 bn in revenue by 2025, which will be driven by growth in existing markets where Kreditech is present, as well as expansion into new geographies. Kreditech currently operates in IndiaPolandRussia and Spain, and serves over one million customers. The company has raised EUR 20 million in its latest equity financing round.

You’ve heard of challenger banks, now meet the challenger lenders (sifted), Rated: AAA

For better or worse, it was Wonga that first put “challenger lenders” on the map. The UK payday lender’s meteoric rise saw it become a household name before its collapse last year after a string of irresponsible, inflated loans.

This month alone, large funding rounds were announced by Sweden’s Capcito and Lendify, as well as by UK’s Sonovate, an invoice lender for SMEs with over 750 active clients. Banks are also watching closely, with Goldman Sach’s equity arm being a notable funder in Lendable, recently ranked the UK’s sixth fastest-growing private tech company.

In the UK, the challenger-lender industry grew to £6.1 billion in 2017, according to a study by the Cambridge Centre for Alternative Finance (CCAF). The CCAF also estimated that 29% of all new loans issued to SMEs came from challenger lenders in 2017. PwC predicts that figure will rise to nearly 40% in the next decade.

Source: Financial Times
International

Marketplace Lenders Navigate The Choppy Waters Of Compliance (PYMNTS), Rated: AAA

Regulators the world over are beginning to take a closer look at the alternative and marketplace lending business model.

In June, the U.K.’s Financial Conduct Authority announced plans to impose stricter restrictions on marketplace and peer-to-peer (P2P) lenders beginning this December following the watchdog’s decision to place P2P lending platform Lendy into administration — a result, the FCA said, of the industry’s lenient requirements to disclose governance arrangements and controls.

Also, in China, analysts at Yingcan Group pointed to the government’s P2P and marketplace lending crackdown as being likely to shrink the industry by as much as 70 percent this year.

This Fintech Safari Could Be a Wild Ride (The Washington Post), Rated: AAA

From ATMs to credit cards and PayPal, the West’s dominance of innovation in consumer finance appears to have exhausted itself.

At the top of the emergent new order is the fintech duo from China — Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Next in line are Alphabet Inc. and Walmart Inc., whose highly localized smartphone payment rivalry is playing out between Google Pay and PhonePe in India. In Southeast Asia, two homegrown ride-hailing giants are aspiring to dominate commerce.

The rise of African mobile money is associated with M-Pesa, Kenya’s digital-wallet revolution. Now traditional lenders like Standard Chartered Plc, with a presence on the continent going back more than a century, are discovering that online banking can help them mobilize low-cost current and savings accounts more profitably than acquiring customers via physical branches.

Australia/New Zealand

Harmoney says the P2P lender has been ‘slowly moving to lending our own money’ since 2015 (interest), Rated: AAA

The founder of Harmoney, New Zealand’s biggest licensed peer-to-peer (P2P) lender, says he can’t see a viable P2P lending model in New Zealand which is why Harmoney has started lending its own money.

Neil Roberts and David Stevens of Harmoney (Lend Academy), Rated: A

Harmoney, the first peer to peer lender to be licensed in New Zealand, has originated more than NZ$1 billion in loans since launching five years ago.


Read the PDF transcript here.

India

Kreditech targets India after EUR20m funding boost (Finextra), Rated: AAA

Kreditech, a German-based online lender and POS financing provider focused on “near prime” borrowers, is looking to the Indian market after raising EUR20 million in funding.

The round was co-led by Runa Capital and unnamed German private investors, with participation from existing shareholders HPE Growth and Amadeus Capital Partners.
Southeast Asia

Accumulated P2P lending exceeds W6tr (The Investor), Rated: AAA

Accumulated peer-to-peer loans in South Korea have surpassed 6 trillion won ($5 billion), data showed on Sept. 26.

Outstanding P2P loans extended by 220 companies stood at 6.2 trillion won in June, compared with 4.7 trillion won at the end of last year, according to the data compiled by the Financial Supervisory Service.

Indonesia’s Investree in talks to raise series C funding for regional expansion (Tech in Asia), Rated: A

Indonesia’s fintech peer-to-peer lending startup PT Investree Radhika Jaya is in talks with several investors to raise a series C funding as the firm looks to boost its expansion in Southeast Asia.

The Securities Commission Malaysia Approves EdgeProp as First Property Crowdfunding Platform in Malaysia (Crowdfund Insider), Rated: A

The Securities Commission Malaysia (SC) has registered EdgeProp Sdn Bhd as the first “Recognised Market Operator” to establish and operate a property crowdfunding platform in Malaysia. EdgeProp was granted an approval in principle in September 2019.

FINTECH COMPANIES FACE TALENT SHORTAGE (StaffingIndustry.com), Rated: A

The majority, or 94%, of fintech companies in Singapore, say the country requires fintech talent, according to survey data from Michael Page Singapore.

The number of Singapore consumers adopting fintech products and services has drastically risen in the last two years, tripling from 23% in 2017 to 67% in 2019, according to Michael Page.

Bitcoin Daily (PYMNTS), Rated: B

And Singapore-based exchange Bitrue has announced the launch of a low-interest crypto lending platform, which goes live on September 30.

MENA

Qatar Boosts FinTech Focus (PYMNTS), Rated: A

As reported by Crowdfund Insider, the Qatar Financial Centre (QFC) has expanded the number FinTech-related activities that will be awarded licenses. The additional support will come from the QFC platform.

The seven firms include DecisionLogic, which focuses on advanced bank verification that lets lenders qualify borrowers.

Africa

Proven ways you can make money in real estate (Daily Monitor), Rated: A

You can utilise a variety of methods that includes any of the following:
•Seller financing through lease options
•Trading fixed assets such as cars, jewellery and more
•Taking over someone else’s mortgage payments who might be in a distressed situation
•Bringing in an investment partner with cash
•Borrowing from a bank or getting a hard money loan
•Taking out a home equity line of credit
•Utilising a peer-to-peer lending network

Caribbean

Victoria Mutual acquires shares in Barbados-based FinTech Carilend (Jamaica Observer), Rated: AAA

Victoria Mutual Investment Limited (VMIL) has acquired a 30 per cent stake in Carilend, a Barbados-based financial technologies (FinTech) company, that is said to have revolutionised borrowing and lending in the Caribbean.

Authors:

George Popescu
Allen Taylor

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 30 2019, Weekly News Digest

financial hub

News Comments Today’s main news: SoFi has raised $500M. Morningstar accelerates acquisition of DBRS. PayPal hits $10B in small business loans milestone. Lendy goes into administration. Klarna launches installment loan app for all retailers. New York overtakes London as financial hub of the world. Today’s main analysis: LendingClub’s advance shareholder meeting presentation (A MUST-READ). Today’s […]

The post Thursday May 30 2019, Weekly News Digest appeared first on Lending Times.

financial hub

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United States

United Kingdom

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United States

Online lender SoFi has quietly raised $ 500 million in funding, led by Qatar (TechCrunch), Rated: AAA

Online lending startup Social Finance, better known as SoFi, took another tack this morning, quietly announcing in a press release that it has closed half a billion dollars in a single funding round led by Qatar Investment Authority, a Doha, Qatar-based private equity and sovereign wealth fund.

SoFi Raises $ 500M, Valuation Remains $ 4.3B (PYMNTS), Rated: A

The company said it will use the capital to invest in growth and add some muscle to its $2.3 billion balance sheet. The company’s valuation will stay about the same as with the last funding round two years ago, which was led by Silver Lake.

SoFi Is Close to a Deal Putting Its Name on L.A. Football Stadium (Bloomberg), Rated: A

Social Finance Inc., a financial technology startup, is close to signing a deal that would put its name on a new NFL stadium under construction in Inglewood, California, according to two people familiar with the matter.

The deal for the stadium, which would be home to the Los Angeles Rams and Chargers, hasn’t been signed so figures could change. But currently the agreement would have SoFi pay $20 million a year for 20 years, these people added.

Morningstar to Accelerate Credit Ratings Business with DBRS Acquisition (Morningstar), Rated: AAA

Morningstar, Inc. today announced it has entered into a definitive agreement to acquire DBRS, the world’s fourth-largest credit ratings agency, for a purchase price of $669 million. The combination of DBRS with Morningstar Credit Ratings’ U.S. business will expand global asset class coverage and provide an enhanced platform for providing investors with leading fixed-income analysis and research.

PayPal’s Latest Milestone: $ 10 Billion In Small Business Loans (Forbes), Rated: AAA

The small business lending market is booming and it’s not the traditional banks that are benefiting. Fintechs are leading the way. Case in point: PayPal.  It hit a milestone, announcing it has provided more than $10 billion in loans to more than 225,000 small businesses around the globe.

The $10 billion mark comes a little more than five years after PayPal made its first loan. Today it has issued more than 650,000 loans through financing programs in the U.S., UK, Australia, Germany, and Mexico.

PayPal Crosses $ 10 Billion In Small Business Loans (Lend Academy), Rated: AAA

Now they are hitting some impressive quarterly milestones, originating $1 billion per quarter, so their next $10 billion is surely to happen even quicker.

deBanked recently highlighted the leading small business originators which showed that PayPal is solidly the leader when it comes to originations in the US. OnDeck which is second to PayPal reported originations of $636 million in Q1 2019. According to data provided by Funding Circle on their website, which includes their lending globally, they have originated $9.5 billion in loans.

Source: deBanked.com

LendingClub Posts Presentation in Advance of Shareholder Meeting (Crowdfund Insider), Rated: AAA

Borrowers can save over $ 2,000 by shopping for lenders who offer low mortgage fees (LendingTree), Rated: AAA

Key findings

  • Mortgage fees in the first quarter had a median of $2,059 for purchase loans and $1,807 for refinancing.
  • The more offers a borrower receives, the greater the potential for savings. For people receiving five offers, the median spread between the highest and lowest fees offered was $2,045.
  • 7% of new purchase borrowers and 8% of refinance borrowers were offered $0 in fees.
  • 15% of new purchase borrowers and 19% of refinance borrowers paid less than $500 in fees.
  • 28% of purchase borrowers paid less than $1,000 in mortgage fees, with 35% of refinance borrowers also paying less than $1,000 in fees.
  • At the high end, 13% of purchase borrowers were hit with fees over $5,000, 3% over $10,000 and 0.21% over $20,000.
  • For refinance loans, 12% were offered upfront fees over $5,000, 1% over $10,000 and 0.02% over $20,000.

Home Loan Provider Earns Top 5-Star Rating from TopConsumerReviews.com (PRWeb), Rated: A

TopConsumerReviews.com recently gave their highest rating to LendingTree, an industry leader among providers of Home Loans, for another consecutive year.

Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA

First, a quick summary of headlines. The Fed agreed to keep interest rates on hold for longer according to the minutes of the April meeting. The decision is expected to help inflation pick up towards the Fed’s 2% target. The Fed’s latest ‘dot plot’, shown below, indicates Fed governors on the margin expect lower rates in the 2019 to 2021 timeframe suggesting lower growth expectations.

Source: PeerIQ, US Federal Reserve, Bloomberg

“…what we see is right now the fundamentals of the economy in the U.S. on a global basis and the fundamentals of consumers and unemployment being low as you mentioned, means that credit is in good shape and we just don’t see that changing a lot.”

Brian Moynihan, CEO of Bank of America

Kroll also released a report on the Evolution of the Consumer Loan Marketplace Sector to lay out how the sector has matured over time. The report comes on the heels of a Fitch report that said that declining credit enhancements in MPL deals is unwarranted.

Prevent attrition and win new relationships with loan options (Bankless Times), Rated: AAA

Small business clients are increasingly looking to alternative lenders for financing. There are numerous draws for SMB clients: a fast and easy application process, quick funding, and a higher chance of being approved for a loan.

According to the Federal Reserve’s Small Business Credit Survey, the main reason clients applied for funding from an online lender was the speed of decision / funding (63 percent) followed by a better chance of being funded (61 percent).

The number of small business owners who turn to alternative lenders for funding has increased steadily since 2016.

Source: Bankless Times

RedWeek Teams Up with Affirm to Help Travelers Vacation Now and Pay Later (Yahoo! Finance), Rated: A

RedWeek.com, the largest online community for timeshare rentals and resales, announced a new partnership with Affirm that will give travelers the flexibility to pay for their vacation rentals in simple, monthly installments.

Travelers can check eligibility for a loan online before booking their next trip and, after entering five simple pieces of information, receive a real-time decision without impacting their credit scores.

3 Alternative Lending Options to Help Build Your Business Credit (Nav.com), Rated: A

1. Online Business Loans

Once upon a time, if you wanted to borrow money for your business you had to make a trip down to your local bank branch or credit union to see if you could qualify for funding. However, a new generation of business lenders has since emerged to offer business owners an alternative way to secure capital.

2. Invoice Financing

Is your business structured in a way so that it gets paid after delivering services or goods to customers? If so, invoice financing is an alternative lending option that might work for you.

3. Microloans

Microloans are issued through non-profit organizations aptly named microlenders. Although the maximum loan size is generally $50,000, the average microloan issued to a small business or startup is a much smaller $6,000.

CoreLogic Teletrack launches a new platform for lenders and credit issuers (Automotive News), Rated: A

CoreLogic today launched the new CoreLogic Teletrack platform, offering lenders and credit issuers superior access and greater insight into alternative credit data through one of the industry’s largest alternative credit databases. The new platform and solution combine upgraded services, data, products and an analytics engine to help users discover new market segments, make smarter risk decisions and grow their business throughout the credit lifecycle.

What Intuit knows about you (AXIOS), Rated: A

Intuit said Tuesday it had agreed to buy analytics company Origami Logic, effectively doubling down on the use of customer data to enhance its marketing.

The company can cross-sell its own products as well as products and services from third parties — like a Capital One Platinum Credit Card or a loan from Lending Club — based on what it knows about you.

Kabbage And Azlo Collaborate To Make Small Business Lending Easier (eSellerCafe), Rated: A

US online banking platform Azlo and online small business lender announced the launch of Mission Street Capital, a new program that provides small businesses banking with Azlo access to loans through Kabbage up to $250,000.

BitX Funding Strikes Equipment Finance Alliance (PYMNTS), Rated: A

Small business lending marketplace BitX Funding has struck an alliance with transportation equipment finance company Pelagic Capital, the companies said in a press release Tuesday (May 28).

On the Dark Web, your social security number is only worth (CB Insights Email), Rated: A

5 Home Loan Apps To Test-Drive (Spokes-Recorder), Rated: B

Not many know this discount bulk retail giant also provides a loan marketplace to shop for the best mortgage rate. While open to all, Costco members can access discounts on lending services. Loan options include home equity, fixed and adjustable rate, FHA, VA, USDA, and jumbo. Note, this lender’s services are strictly digital so you will not be able to meet up with someone face-to-face.

Top 5 ways to start Investing With Little Money!! (EconoTimes), Rated: B

Though P2P lendings are not low investment choices; with Fast invest, it is possible. You can start investing here with just 1 pound to accelerate cash flow. The website allows investors to deposit amounts and based on that suggests loans. After you choose the loan pack as an investor, the site assigns borrowers. Once the borrower takes the loan from you, the site starts increasing your invested amount with the applied interest rate of up to 14% till the payback period. It also comes with buyback guarantee if the borrower fails to return your loan in the payback period.

Real estate crowdfunding sites provide you the opportunity to invest in third-party properties. Fundrise is the best crowdfunding platform to go for that lets you start investing with only $500. With a year’s saving, you can start investing in this crowdfunding site and gain 8.7 to 12.4% annual returns based on your deposited amount.

BFS Capital Appoints Fred Kauber as Chief Technology Officer and Chief Product Officer (Yahoo! Finance), Rated: B

BFS Capital today announced the appointment of Fred Kauber as Chief Technology Officer and Chief Product Officer. As a member of the management team reporting to CEO Mark Ruddock, Kauber will be responsible for leading a customer-focused product and technology organization whose mission is to help BFS re-imagine financial services for small businesses.

United Kingdom

Peer-to-peer lending provider Lendy enters administration (Credit Strategy), Rated: AAA

Damian Webb, Phillip Sykes and Mark Wilson of RSM Restructuring Advisory have been appointed as joint administrators of three companies within the Lendy Group: Lendy Limited, Saving Stream Security Holdings Limited and Lendy Provision Reserve Limited.

Does Lendy Collapse Hint the Failure of P2P Loans Industry? (LearnBonds), Rated: A

Before administration, over £90 million of loans defaulted out of £160 million of outstanding loans. The collapse of Lendy means investors had lost millions of pounds.

BondMason Reportedly Is Shutting Down P2P Business (Crowdfund Insider), Rated: A

BondMason, an online savings and investments platform that sources investments from across the peer-to-peer (P2P) market for its clients, has reportedly announced it is officially shutting down its P2P lending business.

Combating The Payday Loan With On-Demand Wages (PYMNTS), Rated: A

Peter Briffett, CEO of U.K. FinTech Wagestream, told PYMNTS in a recent interview that the cash flow constraints of having to wait for a single day to receive wages every month can be dangerous to the financial wellness of professionals. A single, expensive incident can force these professionals into debt via bank overdrafts or credit cards — or worse, Briffett said, into the payday loan cycle.

The company recently announced a $51 million funding round for its solution — led by Balderton Capital and Northzone, which provided equity, and Shawbrook, which provided debt.

Microfinance Trends and Size of the Market (Cryptopolitan), Rated: A

And that is where microfinance is moving – to an era where individuals and businesses can get financial services from other individuals and business entities. Technology is providing tools for matching borrowers and lenders. And even more important – the tools for creating contracts that execute accordingly.

European Union

Klarna Launches a Direct-to-Consumer App With Installment Payments Built in (Digital Transactions), Rated: AAA

Announced Tuesday, the Klarna app presents the retailer’s site with a footer containing a Pay with Klarna button. When selecting that option, the shopper can pay for purchases in four equal installments with no interest or fees. The app is open to any merchant, not just those already affiliated with Klarna, the company says. These could include retailers without an alternative-payment option or that use a competitor’s program.

10 more big retail tech plays in 2019 (Retail Innovation Hub), Rated: A

PayTech venture Klarna is launching its first UK “all-immersive store” in London’s Covent Garden, with a private VIP party on 4th June.

Becoming a mortgage lender (IPE), Rated: A

Stabelo’s model is to pool capital from institutional investors in exchange for fixed-income securities and uses the money raised to lend mortgages directly to homebuyers. The firm offers mortgages in conjunction with Avanza Bank, which is the biggest online lender in Sweden, and owns just under 20% of Stabelo.

International

London toppled by New York as world’s financial hub (Tech HQ), Rated: AAA

A survey by consultancy and advisory firm Duff & Phelps, involving 180 executives in asset management, private equity, hedge funds, banking and brokerage, found that confidence in the UK capital has plummetted in the last year.

Just 36 percent ranked London as the foremost global financial hub— a year-on-year drop of 17 percent. With New York rising 10 percent, ranked by more than half (52 percent) as the world’s new financial powerhouse, the two cities have “switched places”.

Source: Duff & Phelps

Crypto Lending Platform Cred to Migrate Tokens to Binance Mainnet in New Partnership (CoinTelegraph), Rated: A

Major crypto exchange Binance has partnered with decentralized crypto lending platform Cred to bring its services to the Binance ecosystem, according to a press release publishedon May 29.

As part of the agreement, Cred will migrate some of its ERC-20 LBA tokens to Binance’s mainnet, Binance Chain, and become the official lending and borrowing platform for the decentralized financial ecosystem.

Crypto Lending Startup BlockFi Launches Gemini Dollar Accounts (CoinTelegraph), Rated: A

Cryptocurrency asset management company BlockFi announced that its interest-bearing accounts now support the gemini dollar (GUSD) in a post published on May 29.

Per the announcement, GUSD deposits will see a yearly yield of 6.2%, paid in the stablecoinin question. BlockFi notes that it also offers GUSD as a U.S. dollar funding option and as collateral from institutional cryptocurrency borrowers.

Top 5 emerging fintech hubs (World Finance), Rated: A

São Paulo
Brazil has more fintech start-ups than any other Latin American country, and most of them are consolidated in the country’s financial centre, São Paulo.

Lithuania
One country poised to see an explosion of opportunities after Brexit is Lithuania. In February of this year, the country saw around 100 British financial companies apply for a licence in the country.

Estonia
Estonia has one of the highest rates of start-ups per capita in Europe. According to Startup Genome, 29 percent of all jobs created by these start-ups are within the country’s fintech industry.

Frankfurt
Home to the European Central Bank and more than 200 banks – most of which are foreign – Frankfurt plays an important role in the EU’s financial system.

Bengaluru
Bengaluru (previously Bangalore) is anticipated to become one of the next big tech hubs. One of Asia’s fastest growing start-up ecosystems, the city is home to 438 fintech start-ups and has been dubbed the ‘Silicon Valley of India’.

Nexo Releases Crypto Lending Update Clarifying Misconceptions and Future Outlook (Bitcoin Exchange Guide), Rated: B

Nexo claims their key business model “is unchanged” but that the company is:

“actively exploring new avenues to maximize token utility and investor value.” The company also claims their ultimate goal is to become “a multi-billion dollar financial institution.”

These are the world’s 100 most influential people in gender policy this year (CNBC), Rated: B

Apolitical, a peer-to-peer lending platform for governments, unveiled its list of the world’s 100 most influential individuals on gender equality on Wednesday. It recognized politicians, activists and academics, among others, who were shaping gender policy in 2019.

Australia/New Zealand

Advice beyond mortgages: “the opportunity is huge” (NZ Adviser Online), Rated: AAA

According to Adrienne Church, General Manager at small business lender Prospa, venturing into an unfamiliar type of lending may be worrying – but it is also necessary as the lending market expands, and the property market remains as unpredictable as it inevitably always is.

Asia

TaniGroup Secures US$ 10 Million in Series A Funding to Re-Imagine Agriculture in Indonesia (Global Banking and Finance), Rated: AAA

Agritech startup TaniGroup, which operates agriculture e-commerce TaniHub and peer-to-peer lending provider TaniFund, today announced it raised a US$10 million Series A round of financing led by Openspace Ventures with participation from Intudo Ventures, Golden Gate Ventures, and The DFS Lab.

Peer-To-Peer Lending In Indonesia: A Regulatory Update (Mondaq), Rated: A

In February of this year, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan  or “OJK”) issued an updated checklist for peer-to-peer lending (“P2P lending”) platform providers (“Checklist”) registering with the OJK or applying to the body for a business license or change of ownership. The new Checklist introduces several changes to the previous checklist issued in October 2018. We highlight the key material changes and new requirements introduced by the Checklist.

MENA

Qatar Investment Authority invests more than $ 500M in SoFi (Mobile Payments Today), Rated: AAA

Qatar Investment Authority has led an investment of more than $500 million in SoFi, a mobile-first personal finance firm. The investment values the company at $4.3 billion on a pre-money basis, according to a release from the fund.

East Africa

Kenya Is Also Setting The Standard For Mobile Lending (Forbes), Rated: AAA

We all know that Kenya revolutionized mobile payments for the developing world and brands like M-Pesa continue to lead the market, but what about mobile lending? According to Creditinfo Kenya, 93 percent of all mobile loans originate from regulated financial institutions, and there are around five million borrowers and each has an average of 5.89 loans.

Canada

This Alternative Lending Company Offers Investors a Huge Margin of Safety (The Motley Fool), Rated: AAA

Home Capital is a specialty finance company that primarily deals in mortgages. The company typically deals with borrowers who don’t meet normal bank requirements. It offers traditional mortgages and consumer lending as well as securitizing insured mortgages and offering home equity lines of credit.

Authors:

George Popescu
Allen Taylor

The post Thursday May 30 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 10 2019, Daily News Digest

Purchase APR

News Comments 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 […]

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Purchase APR

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

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.

Source: Federal Reserve, BEA, PeerIQ

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.
Source: LendingTree
Source: LendingTree

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

San Francisco and San Jose, California, are not only home to Big Tech’s all-stars, they’re also the top two spots where minority entrepreneurs are thriving.

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.”

Source: LendingTree

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%.

Fundbox

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 PartnersRevel PartnersContour Venture Partners and existing investors Struck CapitalValueStream 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.

YieldStreet’s Alternative Investment Marketplace Booms In Times Of Volatility (Forbes), Rated: B

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 Releases Precision LM, Integrated Loan Servicing and Accounting Platform (SS&C), Rated: B

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.

United Kingdom

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.

Source: Business Insider

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

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.

European Union

German mobile bank N26 joins Europe’s unicorn club with $ 2.7 billion valuation (CNBC), Rated: AAA

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”.

International

Nexo, the World’s Largest Crypto Lender, Publishes Interim Report (Sociable.co), Rated: AAA

Nexo is sharing the interim report detailing the dividend distribution of $912,071.00 to eligible NEXO Token Holders that occurred on December 15, 2018.

In just six months, Nexo’s crypto lending model has generated a net profit of $3,040,239.

Source: Nexo

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.

Australia

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.

India

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.

Southeast Asia

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.

Africa

#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.

Authors:

George Popescu
Allen Taylor

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Thursday January 10 2019, Daily News Digest

Purchase APR

News Comments 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 […]

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Purchase APR

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

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.

Source: Federal Reserve, BEA, PeerIQ

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.
Source: LendingTree
Source: LendingTree

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

San Francisco and San Jose, California, are not only home to Big Tech’s all-stars, they’re also the top two spots where minority entrepreneurs are thriving.

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.”

Source: LendingTree

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%.

Fundbox

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 PartnersRevel PartnersContour Venture Partners and existing investors Struck CapitalValueStream 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.

YieldStreet’s Alternative Investment Marketplace Booms In Times Of Volatility (Forbes), Rated: B

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 Releases Precision LM, Integrated Loan Servicing and Accounting Platform (SS&C), Rated: B

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.

United Kingdom

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.

Source: Business Insider

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

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.

European Union

German mobile bank N26 joins Europe’s unicorn club with $ 2.7 billion valuation (CNBC), Rated: AAA

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”.

International

Nexo, the World’s Largest Crypto Lender, Publishes Interim Report (Sociable.co), Rated: AAA

Nexo is sharing the interim report detailing the dividend distribution of $912,071.00 to eligible NEXO Token Holders that occurred on December 15, 2018.

In just six months, Nexo’s crypto lending model has generated a net profit of $3,040,239.

Source: Nexo

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.

Australia

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.

India

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.

Southeast Asia

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.

Africa

#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.

Authors:

George Popescu
Allen Taylor

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Thursday January 3 2019, Daily News Digest

china p2p lending

News Comments Today’s main news: RateSetter passes 500M GBP in secondary market lending. U.S. economy fuels boom in consumer debt. Seedrs tops 500M GBP in crowdfund securities. Today’s main analysis: China P2P lending crackdown could see 70% firms closed. Today’s thought-provoking articles: Peter Renton’s Q3 2018 MPL results. 2018 was a standout year for fintech funding. 9 big ideas […]

The post Thursday January 3 2019, Daily News Digest appeared first on Lending Times.

china p2p lending

News Comments

United States

United Kingdom

China

International

India

News Summary

United States

U.S. Economy Fuels Boom in Consumer Debt (WSJ), Rated: AAA

Consumer debt, including credit cards, auto and student loans and personal loans, is on pace to top $4 trillion in 2019.

Consumer spending has increased 2.7% on average in the four quarters through September compared with the same period a year earlier, as disposable income rose 2.7% on average, according to Moody’s Investors Service. Meanwhile, personal savings as a percentage of disposable income was 6.3% in the third quarter, above a 20-year average of 5.9%, according to Bureau of Economic Analysis data.

My Quarterly Marketplace Lending Results – Q3 2018 (Lend Academy), Rated: AAA

My trailing 12 month returns for the year ended September 30, 2018 across all my accounts was 4.77% up from 4.46% in my last update. My original six accounts, all with Lending Club and Prosper, also improved over last quarter but are still at a paltry 3.19%.

Source: Lend Academy

How Betterment Stayed on Top in 2018 (and How they Plan to Stay There in 2019) (Financial Advisor IQ), Rated: A

Robo advisor Betterment currently manages $15 billion in assets for its more than 400,000 customers, firm CEO Jon Stein tells FA-IQ. But at the start of 2016, Betterment’s AUM was just a little over $6 billion, Stein says. The firm has cemented its place on the 2018 Financial Times’ 300 Top RIAs list.

Q: How has Betterment’s client base evolved?

A: When Betterment was first launched, our customer base was mainly young folks in their twenties who were depositing $100-$500 to invest at a time. That client demographic has shifted dramatically over the years. Today, more than one-third of our business comes from customers who are at least 50 years old.

2018 – Volatile Equity and Credit Markets (PeerIQ), Rated: A

2018 was a volatile year for equity and credit markets, particularly in the fourth quarter. The S&P500 is down ~7.5% for the year, and cyclical stocks are down more. CDX IG spreads have widened ~40 bps and CDX HY spreads have widened ~150bps.

ABS markets enjoyed record issuance. However, spreads widened, and all-in yields were higher leading to rate increases for borrowers and tighter margins for lenders. 2019 is shaping up to be a pivotal year in this late economic cycle. Synchronized global growth could turn into a synchronized slowdown. The risk of policy error is heightened as the Fed navigates record low unemployment and a slowdown in growth. The US yield curve has partially inverted and the all-important 3-month – 10-year yield spread is at ~37 bps.

Kevin Tweddle of Independent Community Bankers of America (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is Kevin Tweddle. His official title is the Group EVP for Innovation and Financial Technology at the Independent Community Bankers of America (ICBA), the leading trade organization representing community banks. He is completely focused on fintech and helping community banks use technology to thrive in the future.

Online Loan Marketplaces: Benefits, Challenges, and Enormous Growth (Small Biz Trends), Rated: A

Financial technology (Fintech) and the internet have enabled the creation of online loan marketplaces. Marketplace lending is made possible by technology platforms that use scoring algorithms to determine the borrowers’ ability to repay.

Fintech online loan platforms have started creating partnerships with banks and credit unions to reach small businesses who aren’t as comfortable dealing entirely online. Traditional lenders are eager to jump on the Fintech bandwagon to avoid being made obsolete.

As a small business owner, will you consider online lenders to finance your business? The convenience of banking online is attractive to many who want to bank from anywhere. Online lender Kabbage says 17% of their loans have been accessed through mobile.

Equifax Faces Scrutiny As Dems Take Over The House (PYMNTS), Rated: A

A report in the Wall Street Journal, citing analysts, reported that legislative response to the massive Equifax data breach of 2017 is at the top of the agenda for 2019. The Wall Street Journal noted that existing proposals, some bipartisan, provide a glimpse into how changes can be made to the industry. The paper noted the changes would pertain to how the firms handle consumer information and could include tougher cybersecurity standards and making it easier for consumers to fix mistakes on their credit reports.

White Oak Healthcare Finance Provides $ 161 Million to Support Allegiant Healthcare’s SNF Acquisition (AP News), Rated: B

White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as sole lender and administrative agent on the funding of a $161 million senior credit facility for Allegiant Healthcare (“Allegiant”) and Hillstone Healthcare, Inc. (“Hillstone”). The funds were used to acquire and provide working capital for a portfolio of 17 skilled nursing facilities in Ohio.

Five reasons Bitcoin could enter a more extreme death spiral (The Conversation), Rated: B

The one upside to all this is that, although cryptocurrencies may have entered a death spiral, the blockchain economy is here to stay. As well as allowing safe peer-to-peer lending and transactions, it is being used to build more efficient supply chains and in the evolution of the internet of things – to name just a few of its applications.

United Kingdom

RateSetter passes £500m in lending on secondary market (P2P Finance News), Rated: AAA

RATESETTER has passed £500m in lending on its secondary market, marking a major liquidity milestone for the platform.

At the end of December 2018, the peer-to-peer platform revealed that a cumulative total of £500m in liquidity had been provided to investors via its secondary market. According to the platform, in the majority of cases investors were able to access these funds within one working day.

Seedrs Tops £500 Million in Crowdfunded Securities (Crowdfund Insider), Rated: AAA

In a blog post, UK crowdfunding platform Seedrs shared that it has now topped £500 million in investment crowdfunding. The money has been raised for 720 deals that have been successfully funded since the platform launched.

P2P set for fundraising boom in 2019 (P2P Finance News), Rated: A

P2P lenders raised more than £10m through crowdfunding platforms last year to boost their technology and operations, while almost £2bn was ploughed into the wider fintech sector.

“39 fintech companies have used crowdfunding platforms to raise capital. This is a record level of crowdfunding investment into fintech companies and we expect to see more of this in 2019.”

Robo-advice app for self-employed launches (FT Adviser), Rated: A

A new robo-advice service designed especially for the self-employed and freelancers is expected to launch in the first quarter of 2019.

The start-up, which received £1.5m after a funding round in late 2017, is currently in the Financial Conduct Authority (FCA) Sandbox, and hoping to receive authorisation in the next couple of months.

iwoca adds Barclays and HSBC to Open Banking connections (Fintech Finance), Rated: B

iwoca,the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking. This expands the number of Open Banking connections offered by iwoca to three, including Lloyds Bank, and will enable more than 60 percent of the lender’s customers to take advantage of the Open Banking service.

Arbuthnot Commercial ABL provides £6.5m facility to Fluorocarbon Group (Specialist Banking), Rated: B

Arbuthnot Commercial Asset Based Lending (ABL) has agreed to provide a £6.5m refinancing facility to fluoropolymer processor the Fluorocarbon Group.

China

China P2P Lending Crackdown May See 70% of Firms Close (Bloomberg), Rated: AAA

The number of Chinese peer-to-peer lenders may drop by 70 percent this year, a research firm that tracks the industry says, as the nation intensifies a crackdown on riskier forms of financing.

As few as 300 companies will remain by the end of the year, according to an estimate from Shanghai-based Yingcan Group. The number of operators dropped by more than 50 percent to 1,021 during 2018, it said, adding that there’s been no new entrants into the market since August.

Tighter Reg Shrinks China’s P2P Lending Mkt By 50 Pct In 2018 (PYMNTS), Rated: A

According to Yingcan Group, by the end of 2019, there will only be 300 P2P lenders remaining. During 2018, the market research firm said the number of P2P lenders declined by 50 percent to 1,021. What’s more, no new companies have entered the market since August.

Yidai shuts shop as China intensifies crackdown on P2P lenders (Banking & Finance), Rated: A

Yidai, an online peer-to-peer (P2P) lending intermediary, is the latest to exit the business as China reins in its US$176 billion experiment with this riskier form of financing.

The company set up a committee to start refunding its lenders after “months” of losses, Yidai said in statements over the extended holiday weekend. It has about 32,000 lenders with an outstanding principal balance of four billion yuan (S$795.4 million), and expects to repay them in three-to-five years.

International

2018 was a standout year for fintech funding (Business Insider), Rated: AAA

In the first half of 2018 alone, fintechs secured $57.9 billion, nearing the previous annual record of $62.5 billion set in 2015.

Fintechs including UK neobank Revolut, US insurtech Root, US fintech for gig economy workersEarnin, Hong Kong-based alt lender Oriente, and US crypto exchange operator Coinbase all raised funding rounds of over $100 million this year.

9 big ideas for 2019 (American Banker), Rated: AAA

JPMorgan Chase collected more than $1.8 billion in revenue from overdraft fees in 2017, according to an analysis of regulatory data by the Center for Responsible Lending. Bank of America and Wells Fargo both raked in more than $1.6 billion. Big banks typically charge around $35 per overdraft. Many other institutions also rely on such fees.

Give customers some control of their financial data

For decades, banks, credit card networks and credit bureaus have been sharing and selling consumers’ financial data without their knowledge or consent while data aggregators have screen-scraped that information without the full cooperation of financial services providers.

But there are signs that is beginning to change.

Fintech Predictions for 2019 (Crowdfund Insider), Rated: A

10. New Asset Class – New Asset Backed Lending for Crypto

The likes of Nexo, SALT, CoinLoans & Unchained Capital have emerged in the recent months unlocking the value of your cryptocurrency. There is a list of crypto lending sites here.

8. Banks will rule again

We have seen big banks leveraging Fintech platforms from OnDeck and Avant in 2018. More of it will come in 2019 as banks begins to decentralize banking again.

7. Everyone will be rich (unlocking home equity value)

I attend a talk by Mike Cagney of Figure at 2018’s Lendit China conference. He’s creating something completely different to unlock the potential of the entire “supply chain” process from home equity lines of credit to bundling and tracking this asset class utilizing smart contracts and blockchain. He wants to eliminate the hurdles and ambiguity for the secondary market.

As home equity value rises and interest rates increase, home equity products will need a ton of tech. It has become a forgotten art since the great depression. I am predicting that a lot more of Fintech companies will come to light in 2019 working with the banks to unlock consumers’ home equity value

India

Top 30 Fintech Influencers in India 2019 by Digital Fifth (Fintech News), Rated: AAA

Amrish Rau : CEO at PayU India

Amrish Rau is the CEO of PayU India, the country’s leading digital payment solution provider valued at around USD 2.5 billion. Previously, he had founded Citrus Pay, which was acquired by Naspers (PayU) in one of the largest startup acquisitions in India. PayU’s digital lending platform Lazypay has done extremely well with nearly 4.5 lakh customers already using it. He has also invested in multiple startups like Signzy, Elemential, Nuo and Open.

Harshil Mathur : CEO & Co-Founder at Razorpay

Harshil runs one of India’s most innovative Fintechs, Razorpay, which is morphing from a B2B Payment Gateway into a Financial Conglomerate. They have entered the lending business with Razorpay Capital, which has already reached an annual loan disbursal rate of USD 30 million.

Manish Khera : CEO at Happy

Manish is the founder of Happy Loans – one of the fastest growing MSME lending platform in the country.

Naveen Kukreja : Co-Founder & CEO at Paisabazaar.com; CMO at Policybazaar

Naveen is the co-founder and CEO of Paisabazaar.com. Under Naveen’s leadership, Paisabazaar.com has become one of the largest marketplace platforms for lending and banking products. Paisabazaar.com currently disburses annualized loans worth USD 1 billion to more than 1000 towns and cities across India.

Red tape grounds P2P startups as investors stay clear of space (India Times), Rated: A

The latest entrants into the digital lending sector, peer-to-peer lending platforms, are facing an uphill task attracting investors with regulatory restrictions limiting their growth potential.
OMLP2P is a Mumbai-based lending platform and disburses around Rs 20 lakh per month. Another Mumbai-based P2P lending startup Paisadukaan’s founder Rajiv Ranjan also said that VCs have been shying away from this sector because of the limitation imposed by the RBI.
Authors:
George Popescu
Allen Taylor

The post Thursday January 3 2019, Daily News Digest appeared first on Lending Times.

Thursday November 22 2018, Daily News Digest

Major European Neobanks Customers

News Comments Today’s main news: Prosper to introduce HELOCs. Affirm to rebrand, get into travel. Elevate Credit misses earnings estimates. Zopa says parents borrow from children’s piggy banks. Revolut wants to raise $500M through SoftBank. LexinFintech shares jump 8% on 363% earnings increase. Fintonic, Amazon partner in Spain. Today’s main analysis: Are we in an online lending bubble? Today’s thought-provoking articles: […]

Major European Neobanks Customers

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Prosper Announces HELOCs, Releases Q3 2018 Earnings (Lend Academy) Rated: AAA

Prosper noted that according to a 2017 TransUnion Study an estimated 10 million consumers will take out HELOCs between 2018 and 2022 which would be more than double the number originated from 2012-2016.

The new HELOC product will launch officially in early 2019.

Prosper also reported their Q3 2018 results today. Originations were $640.3 million, down 22% over the prior year period. Prosper attributed the decrease to credit tightening as well as the increase of interest rates to borrowers. The company has now originated $13.4 billion since inception. Net revenues also decreased as a result of decreased originations, with net revenue falling from $28.8 million in Q3 2017 to 20.6 million in Q3 2018. Below is a summary of Prosper’s other financial highlights that are availing in the company’s 10-Q.

Source: Lend Academy

Funding Circle US: Consumers will eschew Amazon to support small firms (Peer2Peer Finance) Rated: AAA

FUNDING Circle US has found that the majority of US consumers still make the effort to shop at independent small businesses and would be willing to pay more for the same item than it costs at e-commerce giant Amazon.

The peer-to-peer business lender, which recently floated on the London Stock Exchange, published the results of a survey on US consumers’ support for small businesses.

It found that 77 per cent of 2,171 US adults surveyed said they were willing to pay more for items at small businesses in order to keep money within their communities and support local jobs.

60 per cent of respondents said they would pay a 10 per cent premium or more on Amazon prices.

PayPal co-founder’s installments firm, Affirm, rebrands, gets into travel (Payments Source) Rated: AAA

PayPal co-founder Max Levchin has built a $1.8 billion business offering installment plans to American consumers. The problem: most shoppers have no idea they’re using his company, Affirm, when they choose how to pay at checkout.

Now, in an effort to make its name synonymous with online installment plans, Affirm is rebranding. Besides a new logo, the firm will list all the retailers it works with on its website. Affirm will also focus on travel, letting consumers pay for vacations over time.

Levchin Says Crypto Not a Good Currency But He Likes the Tech (Bloomberg) Rated: A

Elevate Credit (ELVT) Releases Earnings Results, Misses Estimates By

Elevate Credit (ELVT) Releases Earnings Results, Misses Estimates By $0.23 EPS (Fairfield Current) Rated: AAA

.23 EPS (Fairfield Current) Rated: AAA

Elevate Credit (NYSE:ELVT) announced its earnings results on Monday, October 29th. The company reported ($0.10) earnings per share for the quarter, missing the consensus estimate of $0.13 by ($0.23), MarketWatch Earnings reports. Elevate Credit had a positive return on equity of 12.69% and a negative net margin of 0.49%. The business had revenue of $201.48 million for the quarter, compared to analyst estimates of $201.71 million. During the same quarter last year, the company posted $0.01 EPS. Elevate Credit’s quarterly revenue was up 16.6% on a year-over-year basis. Elevate Credit updated its FY18 guidance to $0.23-0.32 EPS.

Source: Fairfield Current

Amazon: Fundrise Allows You to Invest in Property Near Amazon’s DC Headquarters with New eFund (Crowdfund Insider) Rated: A

Real estate investment platform Fundrise says it has been quietly accumulating property near the area Amazon (NASDAQ:AMZN) has just announced they will be establishing a new headquarters. Amazon’s east coast headquarters will create a huge economic impact for the DC/Northern Virginia market, not to mention increased demand for housing and apartments. Fundrise says it has invested in 30 different buildings in expectation of rising demand. Fundrise is offering a new investment fund for this purpose: HQ2 DC eFund.

According to Fundrise, the fund already features residential properties – ranging from houses, townhomes and condominiums – with plans to invest as much as $50 million in the area. This eFund, issued under Reg A+,  allows any investor the opportunity to capitalize on expected local real estate growth in the wake of Amazon’s announcement.

RealtyShares starting to crumble after lack of venture capital (Born2Invest) Rated: A

The website started out strong. From 2014 to 2016, venture capital was pouring in from crowdfunding firms. However, investors became less interested in the portal as the investment minimum started to ramp up steadily. Company founder Nav Athwal, who had left the company’s board earlier this year, is still a minority shareholder. He also has no idea what happened to the company he helped found.

He, however, has a few words for startups. “Don’t let your burn rates get really large, strive for cash-efficiency or profitability sooner rather than later. Build a resilient business that can continue growing, regardless of where the venture capital markets are.” He adds that a startup should understand its investors and its growth limit as well.

Are we in an online lending bubble? (Tearsheet) Rated: AAA

We’re in an interesting time in online lending. After years of fits and starts and boatloads of money flowing into the sector, record originations are being set all over the industry. We recently explored online lending trends going into 2019 and what participants in the sector are expecting in the near future.

Both consumer and business lenders are tracking strongly:

While personal loans have surged to a record as the fastest-growing U.S. consumer-lending category, according to data from credit bureau TransUnion, it’s fintech firms that are driving a lot of that growth.

Source: Tearsheet

Amalgamated Bank joins $ 26 million closing of Insikt social bond securitization (Impact Alpha) Rated: A

The fintech firm packages up the loans the into securities, which it then issues as bonds to financial institutions, foundations and private investors. Its latest $26 million securitizationattracted Amalgamated Bank, a B-corp-certified commercial bank that went public on the NASDAQ stock exchange in June.

The issuance marks Insikt’s fifth securitization this year, backed by 21,000 loans. INSIKT’s total securitization volume across 16 issuances reached $273 million.

If Recession Comes in 2020, What Will Innovation Look Like? (Bank Innovation) Rated: A

JPMorgan Chase last month predicted a 60% chance of recession by 2020, and that increases to an 80% chance by 2021. It’s not clear how traumatic an event it would be for the U.S. economy, but considering all the new players that have jumped onto the financial scene since the last downturn a decade ago.

CrowdOut Funds More “Eatertainment” (Business Wire) Rated: A

CrowdOut Capital announced the completion of a $20 million facility to Punch Bowl Social, the L Catterton–backed restaurant group that is defining the evolving category of experiential dining. The proceeds will enable the leader in the “eatertainment movement” to open multiple new locations throughout the U.S. This marks the second time Punch Bowl Social has worked with CrowdOut, choosing its flexible debt over traditional loans from financial institutions.

Sell Your House Without Making a Move – Figure Introduces a Smart Alternative for Baby Boomers to Secure Their Retirement (Corp Magazine) Rated: A

Figure Technologies, Inc. (Figure), a FinTech company creating innovative products and tools that empower homeowners to improve their finances, announced today Figure Home Advantage, a smart sell-and-leaseback alternative to reverse mortgages for retirees and a new way for Baby Boomers to lock in record housing prices as they plan their retirement. With Figure Home Advantage, homeowners convert their home equity into cash they can put to use now while continuing to enjoy life at home without the ongoing burden of property taxes, repairs, and maintenance.

Roughly 10,000 Baby Boomers turn 65 years old in the U.S. every day. A study by the National Conference of State Legislators and AARP found that 90 percent of people over age 65 want to stay in their home for as long as absolutely possible. Yet, most older Americans don’t have enough savings to cover retirement expenses or realize the lifestyle they’d imagined. According to a survey by the Insured Research Institute (IRI), only 25 percent of Baby Boomers believe they will have enough money in retirement.

Lenders Extending More Loans to Subprime Consumers as Credit Market Continues to Exhibit Signs of Strength (AP News) Rated: A

Auto loans, credit cards and personal loans all saw year-over-year growth in subprime originations this past quarter, a sign that lenders are returning to this space following several consecutive quarters of declining originations. The latest TransUnion (NYSE: TRU) Industry Insights Report includes insights into consumer credit trends around personal loans, auto loans, credit cards and mortgage loans through the third quarter of 2018.

TransUnion’s report found that origination growth in the subprime risk tier grew at a significant rate across auto, personal loans and credit cards following declines in 2017. Subprime originations in the personal loan category grew 28% between Q2 2017 and Q2 2018 (originations are viewed one quarter in arrears to account for reporting lag), compared to a yearly decline of 7.1% over the prior year. Auto showcased a similar trend, as independent lenders began issuing new loans to subprime consumers following industry pullback in 2016 and 2017. Subprime auto originations increased 7.3% year-over-year, after falling 7.8% year-over-year in Q2 2017.

Are you a minority borrower? You might want to think twice about using an online lender. (The Washington Post) Rated: A

It’s not just bank loan officers with racial biases who discriminate against black and Latino borrowers. Computer algorithms do, too.

That is the groundbreaking conclusion of University of California at Berkeley researchers who found that algorithmic credit scoring using big data is no better than humans at evening the playing field when it comes to determining home mortgage interest rates.

Both online and human lenders earn 11 to 17 percent higher profits off minority borrowers by charging African Americans and Latinos steeper rates, the study said. Black and Latino consumers pay 5.6 to 8.6 basis points higher interest on home purchase loans than their white or Asian counterparts with similar credit profiles — no matter whether they obtained their loans through a face-to-face process or online. The effect is smaller when it comes to refinancing, with black and Latino borrowers paying 3 basis points more.

Read the full report here.

AI-Driven Lead Distribution for Mortgage Lending Helps Loan Officers Deliver Faster Results (Verb Factory Email) Rated: A

ProPair, an innovative mortgage-industry technology start-up based in Silicon Valley, today launched an AI-based lead distribution solution that eliminates the uncertainty of the lead assignment process while optimizing results and ensuring fairness in the assignment process. Using artificial intelligence to correlate lead data with information about individual loan officers, ProPair facilitates the lead assignment process to allow lenders to distribute leads to maximize the performance of the entire loan team.

White Oak Healthcare Finance Provides $ 190 Million Financing for BM Eagle’s 17 SNF Portfolio (Business Wire) Rated: B

White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as administrative agent and lead lender on the funding of a $190 million senior credit facility of 17 skilled nursing facilities for BM Eagle Holdings, LLC (“BM Eagle”), a joint venture led by affiliates of BlueMountain Capital Management, LLC (“BlueMountain”). The facilities are located in Northern California and New England.

United Kingdom

Zopa: Parents borrowing from children’s piggy banks (Peer2Peer Finance) Rated: AAA

ZOPA research has found that two fifths of parents have admitted to raiding their children’s piggy banks to borrow cash.

Parents surveyed by the peer-to-peer consumer lender confessed to borrowing money from their kids with a fifth taking over £250 a year.

However, 80 per cent of parents said they will also be giving their children cash as a Christmas present this year.

Nearly a quarter of children can look forward to a gift of up to £100, whilst a lucky three per cent will be receiving more than £500 in cash.

Revolut is in talks with Softbank to raise $ 500 million (Business Insider) Rated: AAA

UK neobank Revolut is currently in talks with the Softbank fund, which is worth $92 billion, for its next funding round, according to City AM. The talks are still early on, but the funding round could be as high as $500 million. It’s not clear whether existing investors, including Draper Esprit and Index Ventures, would participate in the next round.

Source: Business Insider

Monzo to offer cash deposits via PayPoint (FinExtra) Rated: A

PayPoint has announced today that challenger bank, Monzo, has chosen PayPoint’s cash payments solution for its current account holders. Beginning Wednesday 21 November, customers will be able to deposit up to £300 cash directly into their Monzo account in a single transaction at any of PayPoint’s 28,000 convenience stores nationwide.

Starling Bank’s £10m funding helps it make a stand to Monzo (Fintech Future) Rated: A

Starling Bank, the mobile-only bank, has secured £10 million of new capital from Bahamas-based hedge fund manager Harald McPike.

According to the Daily Telegraph, the funding is in preparation for a £80 million round to keep up, or perhaps surpass, other mobile challengers like Monzo, which recently raised £85 millionto reach a £1.5 billion valuation, and getting over 1.1 million customers.

Why data scientists solve irrelevant problems (Bobs Guide) Rated: A

In today’s challenging financial market businesses need to utilize every available resource and technology to reduce risk when processing payments and credit applications. One area in particular that is often talked about, but still either under or incorrectly utilized, is data science.

While many financial institutions are working towards implementing data science within their risk decisioning processes many are still working on creating an environment and culture that allows data scientists to be fully effective.

In a recent webinar Ken Schultz, VP of data science at Elevate Credit – better known under their brand Sunny in the UK -discussed the benefits data science can bring to a financial services organization, including the opportunity to increase accuracy, expand your market, and reduce fraud, all of which can be used to drive business growth.

Lending Works Appoints Three New Board Members, Targets P2P Growth (Crowdfund Insider) Rated: B

Peer to peer lender Lending Works has selected three new members for their Board of Directors. The online lender has appointed; Simon Waugh, former Chairman of CMC Markets, Deputy CEO of British Gas, Paul Noble, CEO of Honeycomb Finance, a Pollen Street Capital business, and Melanie Goward, Investment Director of Maven Capital Partners.

Barclays partners with MarketInvoice (The MarketInvoice Blog) Rated: B

MarketInvoice and Barclays today announced a partnership deal that is set to transform the way small and medium enterprises (SMEs) in the UK manage cash flow and accelerate growth.

The bank has committed to a significant minority stake in MarketInvoice to give Barclays’ SME clients seamless access to innovative forms of finance. The new partnership is a key part of Barclays’ plans to invest in new business models for growth, and MarketInvoice’s ambition to broaden its reach across the UK.

China

Shares of LexinFintech Jump 8% In Early Trading as Earnings Soar 363% (Capital Watch) Rated: AAA

LexinFintech Holdings Ltd. (Nasdaq: LX) saw its shares jump more than 8 percent in early trading Wednesday after the company, an online peer-to-peer lending platform in China, posted better-than-expected earnings for the third quarter with net income increasing more than fourfold.

Despite recent market uncertainty, the Shenzhen-based lender said its operating revenue for the third three months increased more than 13 percent year-over-year to $246.7 million thanks to a 404 percent jump in income from its loan facilitation and servicing fees.

Net income for the quarter was $46 million, or 25 cents per fully diluted ADS, up from $9.93 million a year ago.

Source: Capital Watch

Tencent reboots profits as growth picks up beyond games (Nikkei Asian Review) Rated: AAA

China’s Tencent Holdings handed investors a much-needed profit recovery in the third quarter as revenue rose beyond online games, but the company warned that stricter regulation by Beijing on online advertising could sap growth.

The social media and online game group, which has lost about 40% of its market value since March as China has stalled approval of new games, beat market forecasts thanks to contributions from ads and cloud computing.

Source: Nikkei

China Rapid Finance to Announce Third Quarter 2018 Financial Results on November 20, 2018 (Acrofan) Rated: A

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF), operator of one of China’s largest consumer lending marketplaces, today announced that it plans to release its third quarter 2018 financial results on Tuesday, November 20, 2018, after U.S. market closes.

China Rapid Finance’s management will host an earnings conference call at 8:00 p.m. Eastern Time on November 20, 2018, (9:00 a.m. Beijing/Hong Kong Time on November 21, 2018).

Why China’s online lending crisis makes liberalisation of bank interest rates more urgent (South China Morning Post) Rated: A

How big is China’s fintech sector? I would say, Britain’s peer-to-peer (P2P) lender Funding Circle plus payday lender Wonga times 100. In addition to giants such as Alibaba’s Ant Financial, Pingan’s Lufax and Tencent’s WeBank, a dozen mid-size operators have gone public in the US and Hong Kong in the past 18 months alone. There are also 40 to 50 serious players that are waiting in the wings to go public. However, as the year-long official clampdown has revealed, there are far too many also-ran operators and Ponzi schemes about.

In just five to six years, fintech has surged to levels over US$200 billion in terms of total assets.

Cash-Strapped Online Lenders Ordered to Repay Investors (Caixin Global) Rated: A

Some local governments have ordered cash-strapped peer-to-peer (P2P) lending platforms to begin repaying their investors to head off growing turmoil in the industry.

Hangzhou-based P2P lending platform Yucaiyuan recently announced that the company “did not meet regulatory requirements and was ordered to start repaying (investors),” according to a post on the lender’s website (link in Chinese). The firm will have to repay the principal and interest on all outstanding loans until investors are fully repaid. It has 12 months to do so.

Regulators in the eastern city want to rein in what had once been runaway growth in the industry. They plan to do this by clearing out small and midsize platforms one step at a time, a P2P lender told Caixin.

European Union

Fintonic Links Up with Amazon (Finovate) Rated: AAA

Personal finance app Fintonic announced today it will collaborate with Amazon in Spain. Starting next week, Fintonic customers in Spain will be able to finance their Amazon.es purchases ranging from $225 to $1,100 (€200 to €1,000) at a rate of 0% interest for up to four months.

Mintos to Provide Debit Cards and IBAN Accounts to Investors (P2P Banking) Rated: AAA

P2P lending marketplace Mintos has raised 5 million EUR in a Series A. The money is earmarked to provide new features for investors.

Crowdlending campaign raises total of €1.5 million for the first time (The Brussels Times) Rated: A

A crowdlending campaign has, for the first time, raised a total of €1.5 million in Belgium.

The announcement came on Wednesday from the platform Look&Fin, which specialises in such participative finance loans. The company, Carimat Matériaux, based in Braine-le-Château and active in construction, has raised this record amount.

In total, 483 individuals have invested in Carimat Matériaux, for a global total of €1.5 million. The group, which has specialised in construction since 1988, recorded a turnover of €56 million in 2017 and employs more than 170 people.

Berlin-based fintech startup Bonify raises funding to provide free credit scores and financial advice (EU Startups) Rated: A

Want to apply for a loan, but you’re unsure about your credit score? The Berlin-based startup Bonify provides free, easy-to-read credit reports. Users can use the startup’s platform or app to check and correct their scores, monitor changes, and receive tips on personal finance and how to optimise their scores.

Bonify evaluates consumers real-time creditworthiness, enabling them to improve their financial wellbeing through tailored financial and non-financial recommendations. The app delivers recommendations for how consumers can save money, for instance by switching to a different loan or energy provider. Bonify is also able to predict six to eight weeks in advance when its users might go into their overdraft, and provide personalised suggestions for how to avoid this.

Italian lendtech Credimi feeling dreamy with €10m funding (Fintech Futures) Rated: A

The investment funds came via United Ventures and Vertis, as well as some of the (unnamed) investors who took part in the first round of €8.5 million in September 2015.

Ignazio Rocco di Torrepadula, Credimi founder and CEO, and cool name winner, says: “Credimi’s initial start-up phase has been exhilarating, with results that have far exceeded our expectations.

SME Online Lender Creditshelf Names Fabian Brügmann New CFO (Crowdfund Insider) Rated: B

Creditshelf Aktiengesellschaft, a Germany based online lender, announced on Wednesday it has appointed Fabian Brügmann as its new CFO, effective on January 15, 2019. The lender reported that this appointment continues its planned expansion of its management team and in the newly formed position, Brügmann will be responsible for Finance and Investor Relations and directly report to Dr. Tim Thabe, Chairman of the Management Board and CEO of Creditshelf. He will not serve as a member of the Management Board himself.

According to Creditshelf, Brügmann previously worked as Director of Investor Relations at Commerzbank AG, where he was the contact for shareholders, fixed-income investors, and sell-side analysts. He joined the bank’s Corporate Development and Corporate Finance team in 2012. As IR Manager, Brügmann worked on the capital market communication for the “Commerzbank 4.0” strategy. He previously spent six years with the U.S. bank Goldman Sachs in Frankfurt and London.

Small Business Lender iwoca Appoints Seema Desai as COO (Crowdfund Insider) Rated: B

Online lender iwoca has selected Seema Desai as their new Chief Operations Officer (COO). iwoca provides loans of up to £200,000 to small and micro businesses across the UK, Germany, and Poland via its website and through partner integrations using its proprietary Lending API.

Desai joined iwoca in January 2017 as Head of People, developing the company’s organizational capabilities. Prior to joining iwoca, Seema led the development of the Innovative Finance ISA at peer-to-peer lender Zopa as Head of Product.

As COO, Desai is expected to help scale customer service that has helped propel iwoca to become one of the fastest growing business lender in the UK.

International

Prodigy Finance Launches Refinance Product for International Working Graduates Looking to Reduce Financial Costs (PR Newswire) Rated: A

Prodigy Finance, the pioneer in cross-border finance, announces the launch of a loan refinance product for international working graduates looking to reduce their student debt. The product will allow these alumni, who previously had limited options available to them, to save at least US$20,0001 over the life of the loan, by accessing lower rates and choices of terms.

The edge a serial entrepreneur sees in challenger banks (American Banker) Rated: A

Challenger bank entrepreneur Anthony Thomson has had several lives in banking and fintech.

In 2010, with Commerce Bank founder Vernon Hill, he co-founded Metro Bank, which started with one location in London and now has more than 56 branches and 2,800 employees. Thomson founded a second challenger bank in 2014 called Atom Bank, the first mobile-only bank in the U.K. As of March, it had 1.3 billion pounds of deposits and lent 1.2 billion pounds in mortgages and small-business loans.

Thomson is currently working on his third institution, called 86,400, a mobile-first challenger bank slated to launch in Australia in early 2019.

So it’s fair to say Thomson has learned a lot about what it takes to raise money and how to make it as a neobank entrepreneur.

The Ripple Effect: Crypto Backed Lending Platform Exploring XRP-Powered xRapid (The Daily Hodl) Rated: A

The crypto lending platform Nexo says it’s exploring Ripple’s xRapid, which uses XRP to boost the speed and lower the cost of cross-border payments. The announcement comes from Antoni Trenchev, the co-founder and managing partner of Nexo.

The company is backed by TechCrunch founder Michael Arrington and calls itself a “decentralized lending ecosystem that facilitates open access to credit anywhere and anytime.” It uses a long list of banking and exchange partners to deliver loans.

Nexo follows the payment company and Ripple partner TransferGo, which also revealed its interest in xRapid this week. Nexo recently added XRP to its platform, becoming one of the first lenders to use XRP as collateral.

MSTS Makes B2B Commerce Effortless for SMBs with Credit as a Service (Globe Newswire) Rated: B

MSTS, a global B2B payment and credit solutions provider, today announced that its innovative Credit as a Service solution is now available to mid-market and small businesses.

The original enterprise product, with a record of accelerating sales growth for companies by as much as 500 percent, has been optimized to meet the needs of businesses with simpler payment and credit processes. The cloud-based Credit as a Service solution for mid-market businesses can issue credit lines in less than a minute, automate the customer onboarding process and apply unique B2B customer invoicing, accounts payable and payment term requirements – providing customers flexibility and an enhanced experience.

MSTS works with B2B companies across transportation, manufacturing, retail and eCommerce.

Australia

Advice demand soaring in Australia despite trust issues (International Investment) Rated: AAA

The 2018 Financial Advice Report from Investment Trends found that an estimated 2.1 million adults intend to turn to a financial planner for advice, up from 1.6 million in 2017.

However, trust levels in banks and financial planners fell severely over that same period. On a scale of 0 to 10, banks fell from a trust rating of 5.5 to 4.8, while financial planners fell from 5.1 to 4.8.

The report found more than 40% of Australians do not believe the financial services and banking industries are meeting their obligations to everyday citizens.

Big banks welcome government competition for small end of town (Sidney Morning Herald) Rated: A

Australia’s biggest banks insist they welcome the prospect of looming lending competition from the federal government’s proposed $2 billion small business loan plan.

Under the policy unveiled by Treasurer Josh Frydenberg on Wednesday the government will establish a $2 billion securitisation fund which it will use to buy pools of small business loans from smaller banks and non-bank lenders.

Small business cheer $ 2b end to funding drought (Australian Financial Review) Rated: A

Small business and non-bank lenders have endorsed the Morrison government’s plans to inject $2 billion into the small and medium enterprise loan market.

But regulatory experts warned the government must avoid taking too much financial risk and not weaken bank rules in its quest to stimulate SME funding via a separate proposed bank-financed Australian Business Growth Fund.

Piper Alderman brings in financial services team (Australasian Lawyer) Rated: B

A national firm has added a financial services team, including a new partner in Sydney.

Andrea Beatty has commenced at Piper Alderman as a partner. She brought to the firm two other lawyers and an administrative assistant from NewLaw outfit Keypoint Law, where she was a consulting principal since 2016.

With more than 20 years’ experience in financial services regulation and corporate finance, Beatty is a former partner at legacy Mallesons Stephen Jaques and then at K&L Gates.

Asia

New securities law sparks concerns from expert (Vietnam News) Rated: AAA

Under the revised draft Law on Securities, the foreign ownership ratio in a public company is expanded up to 100 per cent. Previous regulations had capped foreign ownership at 49 per cent. However, this ratio in commercial banks, which is a much-concerned issue recently, was not mentioned in the draft. Why?

The draft has removed limits on how many voting shares foreign investors can buy in public Vietnamese companies. This indicates that the Government has sped up the equitisation process in State-owned enterprises, especially in non-essential sectors that are not too sensitive to the economy. However, under the draft, some conditional business lines, such as commercial banks, would retain their existing 30 per cent limit. I agree with this provision of the drafting agency.

How Standard Chartered Bank is tackling digital disruption (Tech in Asia) Rated: A

While banks have not been immune to the technology bug that has spread in the last few decades, digitization in the industry has only largely been implemented “for purpose in the back end,” according to Michael Gorriz, group chief information officer at Standard Chartered Bank.

“Fifty years ago, we introduced mainframes. We took paper ledgers and put them into computers,” the CIO explains.

But the emergence of a tech-savvy millennial generation is bringing about “the first real massive change in banks since the inception of banking,” he says. As such, banks like Standard Chartered have to digitize front-facing processes or risk losing their customers.

Eurasia

Russian Online Lender MFC Zaymer Joins Robo.cash (Crowdfund Insider) Rated: AAA

Automated peer to peer platform Robo.cash has issued a note saying Russian microfinance company MFC Zaymer is joining their platform. The company operates Zaymer.ru that offers short-term (payday) loans with interest rates for investors of 14% in Euros and up to 18% for loans originated in Rubles.

Africa

Nigeria dials up mobile banking revolution (Financial Times) Rated: AAA

Nigeria’s central bank is looking to increase access to millions of people by opening up the banking system to non-financial companies for the first time; South African telecom operator MTN is set to be the biggest beneficiary with more than 50 million customers located in Nigeria; MTN is planning to apply for a banking license soon with the hopes of having their Mobile Money product available in country by Q2 2019; more than 60 million people in Nigeria do not have bank accounts, showing there is an enormous opportunity for telcos to expand the banking footprint.

Authors:

George Popescu
Allen Taylor

The Rise of Crypto Lending, a Natural Progression of Peer-to-Peer Financing

Nexo

The rise of new technologies often give rise to new business models. The peer-to-peer lending space is just over a decade old and still have much to grow into. However, not long after the first P2P lender–Zopa in 2005–opened its doors, a new technology that promises to challenge traditional ways to deliver financial services emerged. […]

Nexo

The rise of new technologies often give rise to new business models. The peer-to-peer lending space is just over a decade old and still have much to grow into. However, not long after the first P2P lender–Zopa in 2005–opened its doors, a new technology that promises to challenge traditional ways to deliver financial services emerged. That technology was the blockchain, a distributed ledger that underlies the cryptocurrency Bitcoin. Since then, other blockchains have been created along with new business models to suit. As it stands in 2018, crypto lending has not made a big dent in P2P lending services, but the potential is there. This article will highlight some of the more significant blockchain-based P2P lenders, which we hope will inspire a new look at technological innovation in this space.

Think of crypto lending like you would the banking industry: Even if Capital One provided perfect products at every turn, there would still be plenty of room for JPMorgan Chase, Citigroup, and Bank of America. There would still be room for the hundreds of other banks that compete for customers.

The companies listed here are not ranked in any manner. Rather, they=se are just some of the choices available for consumers in the market for cryptocurrency loans.

1. SALT (Secured Automated Lending Technology) Lending

One of the best benefits crypto-based lending has to offer is that a lessened importance on traditional credit scores as a factor for risk assessment. SALT Lending touts blockchain-based assets as “the perfect form of collateral.” The company is using this fact to “dramatically reduce the complexity and cost of the loan process.” SALT operates under Regulation D and, in lieu of credit checks, the company does AML and KYC verifications.

Offering three tiers of product, SALT’s loans start at $5,000 and go as high as $250 million. Loan percentages run between 12 and 22 percent APR, but the borrower retains the value of the collateral currency claiming any gains and losses that happen over the life of the loan. SALT accepts Bitcoin, Ethereum, Litecoin, and Dogecoin as collateral, and funds loans in USD.

One fact that could be a significant factor when deciding to use the SALT Lending platform is that loans are not transferable on the blockchain, but through existing financial channels. Thus, they become securities.

It’s not foolish to base a good bit of faith in a company that has proven players on its team. Founder Erik Voorhees was also involved in founding several other crypto websites prior to starting SALT Lending. Among these include Satoshi Dice, which he later sold, Coinapult, and ShapeShift.

2. ETHlend

Unlike SALT Lending, Estonia-based ETHlend is a fully decentralized P2P platform built on the Ethereum blockchain for lending Ether as tokens for collateral. Some insiders fear that platforms that allow their loans to become securities might run the risk of being swallowed up by banks.

ETHlend lends Ethereum, Bitcoin, their own LEND tokens, and DAI tokens, as well as 180+ other Ethereum-based tokens. The company offers address-to-address loans that are sent within minutes, with no middle men, assuring that no one, not even Ethlend, can stop one’s lending or borrowing. The company plans to expand beyond Ethereum to other distributed ledger platforms in Q3 of 2019.

The company’s interest rates range from .25 to five percent MPR, and all transactions are carried out on digital wallets. Borrowers that transact in the LEND token can get a no-fee loan.

Announced earlier this week, Aave is a tech-based company designed to expand on the offerings of centralized fintech companies like PayPal and Coinbase. Aave Pocket, Aave Gaming, and Aave Lending (SaaS) are among the offerings this expansion adds to the platform.

Unfortunately, the service is not yet available everywhere including a block to U.S. citizens.

3. Nexo

A new kid on this block is Nexo, and being a new kid means that they are doing things in a new manner. Founded in Zug, Switzerland—even more of an “EF Hutton” mention than Estonia—in 2017, Nexo promises the world’s first instant crypto-backed loans. Available worldwide, Nexo loans start at $1,000 and top out at $2 million.

The process is an easy one.

  • Log on to the website.
  • Verify your account
  • Deposit crypto assets into Nexo wallet
  • Withdraw loan to your bank account

There will be brief pauses while the borrower is verified—the company complies with the highest AML and KYC (provided by Onfido) standards—and while your deposit is confirmed on the blockchain. Overall, the Nexo process reads like a rather quick and seamless process.

The platform loans Euros, USD, and Tether while accepting Ether, bitcoin, Bincance coin (BNB), and Nexo as collateral currency. The interest rate is eight percent if the collateral currency is Nexo and 16 percent for all others. Nexo assets are stored in multi-signature wallets, more than one multiple cryptographic keys are necessary to gain access, and cold storage (wallets not connected to the Internet) at BitGo and PrimeTrust.

4. LendingBlock

LendingBlock predicts that, as digital assets grow as an asset class, demand for hedging, swaps, repurchases, and short selling will increase. The currency crypto market has more than $500 billion in assets circulating with less than one percent used as collateral. That leaves lots of room for growth.

Touted as the first cross-chain lending platform for the crypto economy, the company promises a product that will help its customers access secure, transparent, and fair crypto-to-crypto loans. Not a lender itself, LendingBlock provides the platform upon which parties can enter P2P contracts. The company acts as agent for both lender and borrower, as well as security trustee of the collateral. This ensures that the borrower doesn’t face any uncovered credit risk to the lender.

All collateral deposits are held in cold storage. Those who think regulation will be necessary before the crypto market can fully mature can take comfort in the fact that the company is focused on becoming a regulated business. They have submitted the full regulatory application to the country of Gibraltar and await the regulator’s response. They have also begun regulatory processes with the Financial Conduct Authority in the UK, and the Securities and Exchange Commission and Commodities Futures Trading Commission in the United States.

Basing the platform on its own token (LND), which is used to make payments and receive interest on loans, allows the company to reduce the cost of exchange fees and makes it easier to manage interest payments. The use of smart contracts reduces expenses, risks, and complexity, which makes for lower costs for borrowers and higher returns for the lenders.

5. BlockFi

New York-based BlockFi might be the ideal platform for Americans who want to secure USD loans with Bitcoin and Ethereum, provided that said Americans live in any of the 44 states where the company is currently conducting business.

The attractive thing about the BlockFi platform is that it seems easy enough for a lay person to understand without any kind of financial advice. A borrower needs to meet only two requirements to qualify for a loan: They can have no liens or bankruptcies on their record, and they must have at least $15,000 of crypto assets between their Bitcoin and Ethereum portfolios.

If those criteria are met, the customer can borrow up to 35 percent of their crypto asset value, with loans ranging from $2,000 to $10 million. Interest rates go from 12 to 14 percent APR, and there is an added fee of one to four percent of the loan value. Borrowers can take a loan in Bitcoin, Ethereum, or Litecoin.

Unlike other crypto-based lenders on this list, BlockFi does not have its own coin or token.

6. Unchained Capital

Texas-based Unchained Capital could very well be the platform of choice for those who want to liquidate their Bitcoin while maintaining it and seeing it go to work in the world.

Not only is the team at Unchained Capital in the market to make money as a lender, they have an idealistic side as well. Noting that 60 percent of Bitcoin sits around and does nothing, they have a goal to circulate it and use it to strengthen the platform. The company was founded by people who believe cryptocurrencies can change the world only if they’re useful.

The Unchained Capital team has designed its personal loans to be ideal for people who are looking to make large purchases, who hope to avoid tax events, and who want to invest. Their commercial loans are geared to companies that want to free up capital, expand their businesses, buy expensive equipment, and balance their portfolios.

Unchained Capital does not have its own cryptocurrency.

7. Other Companies to Consider

The crypto lending space is expanding. New lenders seem to be popping up quite often, which means that some people in the cryptocurrency space, at least, see a market for crypto-backed lending. Despite the market having taken a downturn in 2018, rebounding from the bull run last year that catapulted Bitcoin to $20,000 in December, this space is expanding. Lately, Bitcoin has been holding around the $6,500 mark. Since the majority altcoins tend to follow Bitcoin’s price, that means the market as  whole is down, yet more crypto lenders are ambling to get in the door.

Some of the other companies in the crypto lending space that might be worth checking out include BitBond, Credible Friends, Bitfinex (a crypto exchange that facilitates crypto financing transactions between parties), Celsius, Poloniex (another cryptocurrency exchange that allows traders to lend to other users), CoinLoan, Nebeus, GetLine, and BTCpop.

Authors:

Written by Paul Keenan and Allen Taylor.

Allen Taylor

Tuesday October 30 2018, Daily News Digest

Synchrony Q3 Earnings

News Comments Today’s main news: SoFi caught with alleged misleading ads. The Motley Fool recommends LendingClub. Prosper performance update. Australia’s fintechs are beginning to make profits. Elevate Credit plunges from record low. Today’s main analysis: Loan growth at credit card issuers. Today’s thought-provoking articles: Down payment affordability by state. Crypto lending and the turbulent 2018 market. Do banks or fintechs do […]

Synchrony Q3 Earnings

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News Summary

United States

FTC puts student lenders on notice by citing misleading ads at SoFi (American Banker) Rated: AAA

SoFi has agreed to settle federal charges that it misled borrowers about how much they could save by refinancing their student loans. The charges were issued by the Federal Trade Commission, which warned other student lenders to steer clear of similar violations.

The commission voted 5-0 on Monday to issue the administrative complaint and accept the agreement with SoFi. The company, which agreed to stop exaggerating potential savings, was not required to pay a civil penalty.

According to the FTC, SoFi over the past two years has inflated — at times doubling — estimates of the average borrower’s savings from student loan refis. The San Francisco company, which in one ad claimed that SoFi customers save an average of $22,359, did so, in part, by excluding from its calculations borrowers who refinance their loans with longer terms and pay more over the lifetime of their loans, the agency said.

Online Student Loan Refinance Company SoFi Settles FTC Charges, Agrees to Stop Making False Claims About Loan Refinancing Savings (FTC) Rated: A

Online student loan refinancer SoFi has agreed to stop misrepresenting how much money student loan borrowers have saved or will save from refinancing their loans with the company, in order to settle Federal Trade Commission charges that it deceptively advertised inflated figures for more than two years.

According to the FTC, one online SoFi ad claimed, “Refinancing student loans saves $22,359 on average,” while another ad told readers to “Start saving on your student loans. Average monthly savings $292.”

6 Great Stocks Under $ 6 (The Motley Fool) Rated: AAA

LendingClub — $3.13

Peer-to-peer lending doesn’t get a lot of love on Wall Street, but it’s a win-win for folks looking to borrow money and risk-tolerant income investors willing to lend out their money in the chase for higher yields. LendingClub has had a rough first few years as a public company, and it wasn’t until just a few weeks ago that it settled up on Federal Trade Commission and SEC complaints stemming from company disclosures that ultimately cost its CEO his job.

The platform’s popularity continues to grow. Revenue rose 27% in LendingClub’s latest quarter, and loan originations rose 31% to hit a record $2.8 billion. Guidance wasn’t great. Profitability remains a challenge. The depressed stock has some serious upside as demand for peer-to-peer lending gains — pun intended — interest.

Prosper Performance Update: September 2018 (Prosper Blog) Rated: AAA

Highlights from the September report include:

  • In September, 61% of originations were rated AA-B as Prosper continues to reduce the risk profile of originations on the platform.
  • Dollar WA FICO for the month of September was 717, remaining flat month-over-month and increasing 10 points since Q3 2017.
  • Average loan size on the platform is approximately $13,300, approximately $280 lower since 2018H1. This decrease is driven by our continued focus on limiting loan amounts based on a borrower’s income and ability to pay.
  • WA Borrower Rate for September originations on the platform increased by 10 bps compared to August as the portion of originations rated AA-B decreased slightly.

Loan Growth at Credit Card Issuers (Peer IQ) Rated: AAA

American Express Q3 Earnings

Revenues at AXP grew by 9% YoY to $10.1 Bn to achieve record levels. Earnings grew by 22% YoY to $1.7 Bn. NII also grew 17% YoY to $2 Bn. AXP’s premium customer base saw record-low delinquency rates while the net charge-off rate increased slightly YoY to 1.7%.

Source: Peer IQ

Capital One Q3 Earnings

COF’s revenues were flat YoY at $7 Bn, but earnings grew by 36% YoY to $1.5 Bn. Growth in NII was modest at 2% YoY to $5.8 Bn. COF was the only issuer who saw a drop in the net charge-off rate by 20 bps YoY to 2.4%. COF also saw its provisions for loan losses decrease by 31% YoY driven by improving credit quality of the credit card and auto loan portfolios. This release in provisions consequently led to a 3% YoY drop in allowance for loan losses to $7.2 Bn on loan growth of 1% YoY.

Source: PeerIQ

Synchrony Q3 Earnings

SYF’s revenues grew by 9% YoY to $3.3 Bn. Earnings grew by 21% YoY to $0.7 Bn. NII grew by 9% YoY to $4.2 Bn. SYF had the highest net charge-off rate of 5% among all issuers, which stayed flat YoY. Loans grew by 14% YoY to $88 Bn. Provision for loan losses grew by 11% YoY and the total allowance for loan losses increased by 16% YoY to $2.9 Bn, slightly outpacing loan growth.

Source: PeerIQ

LendingTree Ranks Down Payment Affordability by State (Lending Tree) Rated: AAA

Key findings

  • Average down payment percentages for conventional 30-year, fixed-rate purchase mortgage offers stayed about the same from the second quarter to the third quarter, rising 0.03 percentage points (18.02% to 18.05%).
  • At the same time, average down payment amounts decreased nearly 10% in the third quarter, falling from $52,480 to $47,265.
  • The average loan amount offered to potential homebuyers fell around $28,000 from $285,903 in Q2 to $257,749 in Q3.
Source: Lending Tree

 

Source: Lending Tree

Average mortgage down payments drop in Q3 (Mortage Professional America) Rated: A

Average down payment amounts for conventional 30-year, fixed-rate purchase mortgage offers declined during the third quarter, while down payments as a percentage of the price stayed about the same, according to an analysis by LendingTree.

Average amounts fell by almost 10% during the third quarter, decreasing to $47,265 from $52,480. At the same time, average down payment percentages were steady from the second quarter, rising 0.03 percentage points to 18.05% from 18.02%.

The Credit Junction Secures $ 23 Million Equity Investment from Century Equity Partners (New York Business Journal) Rated: A

The Credit Junction, the first data-driven, asset-based lender for small and mid-sized businesses, has secured a $23 million growth equity investment from Century Equity Partners (“Century”). Century focuses on making investments in lower middle market companies that have demonstrated value propositions to the financial services industry. This investment provides The Credit Junction with growth capital to expand its ability to provide financing solutions to Supply Chain America, as well as commercialize its proprietary data and risk analytics platform.

This marks the second meaningful financing announcement for The Credit Junction in recent months, as the company secured a $150 million credit facility from MidCap Financial in March 2018.

Surge in Mobile Fraud and Phishing, Balancing Customer Friction and Fraud Prevention Are Biggest Challenges for Businesses (PR Newswire) Rated: A

IDology today released its Sixth Annual Fraud Report, confirming the growing importance of balancing customer friction and fraud prevention, cited by businesses this year as the number one challenge in fighting fraud. The report reveals a surge in mobile and phishing fraud schemes, a focus on artificial intelligence and machine learning as the growing trends in identity verification, and the strategic role identity verification plays in the quest to gain a competitive edge, retain and attract customers, and increase revenue.

Phishing and Mobile Fraud Surge

Credit card fraud and account takeovers remain the most widespread forms of fraud, but phishing schemes and mobile fraud have surged.

  • The prevalence of mobile fraud surged dramatically with an increase of 117% over the previous year (one of the highest year-over-year increases among the fraud vectors measured this year in the survey). The number of businesses that feel their industry is least prepared to detect and prevent mobile device attacks increased 167% compared to a year ago.
  • Businesses reported a 63% increase in mobile fraud. All types, including porting, spoofing, hacking and fraudulent change events, are on the rise. Caller ID spoofing increased by 74%, porting by 69% and SMS interception by 50% compared to 2017.
  • Phishing, which can be linked to 93% of last year’s security breaches and has steadily risen each year, increased in prevalence by 66%.
Source: IDology

ABS Professionals Demonstrate Enthusiasm Despite Rising Interest Rates, Survey Finds (ABL Advisor) Rated: A

Capital One survey conducted at ABS East 2018—a conference convening professionals from across the asset-backed securities (ABS) industry—found that most respondents (94 percent) expect buy-side interest in ABS to increase or remain the same in the coming year while only 6 percent expect it to decrease.

Of the challenges facing the industry, only 15 percent of ABS professionals elected increases in interest rates. For the majority of respondents, uncertainty around regulatory requirements (30 percent), increased credit risk (25 percent) and increased competition (24 percent) pose the greater challenges for their businesses over the next 12 months.

State Regulators File Second Lawsuit Opposing OCC Fintech Charter (National Law Review) Rated: A

The Conference of State Bank Supervisors (CSBS) has filed a second lawsuit in D.C. federal district court to stop the Office of the Comptroller of the Currency (OCC) from issuing special purpose national bank (SPNB) charters to fintech companies.  A similar lawsuit was filed last month in a New York federal district court by the New York Department of Financial Services.

Stephanie Klein of Braviant Holdings (Lend Academy) Rated: A

While the non-prime consumer lending space is less competitive than prime there are many companies doing interesting things. We heard the recent news of US Bank entering the space and just today I read that the CFPB intends to change the rules for payday lenders in the new year. It is certainly a dynamic space that will be going through lots of changes in the near future.

Our next guest on the Lend Academy Podcast is Stephanie Klein. She is the CEO of Braviant Holdings, a non-prime lender that has been around since 2014. Stephanie actually has quite a long history in the non-prime space going back more than a decade to her time with Al Goldstein’s (the CEO of Avant) first lending company, CashNetUSA.

Online subprime lender Elevate Credit plunges from record low after earnings (Market Watch) Rated: AAA

Elevate Credit Inc. ELVT, -32.13% closed at a record low Monday, then plunged more than 20% in after-hours trading following an earnings report that included lowered annual guidance and myriad concerns that cropped up in the quarter. Chief Executive Ken Rees called the quarter “unexpectedly challenging” in the announcement, and then ticked off the reasons for the performance.

Elevate, which offers loans online to subprime customers through different products, reported a third-quarter loss of $4.2 million, or 10 cents a share, on revenue of $201.5 million, after reporting a profit of a penny a share on sales of $172.9 million a year ago. Analysts on average expected earnings of 13 cents a share on sales of $200.2 million, according to FactSet.

The company chopped its annual forecast, which previously called for earnings of 55 cents to 90 cents a share on sales of $790 million to $810 million. Now, Elevate expects earnings of 23 cents to 32 cents a share on sales of $790 million to $795 million in 2018. After shares closed at an all-time low of $6.35 Monday, they fell to about $5 in after-hours trading.

Equifax launches real-time Open Banking ID checks (Peer2Peer Finance) Rated: A

CREDIT referencing agency Equifax has teamed up with Open Banking technology provider consents.online to allow it to match customer data and transactions in real time.

It will be used within Equifax’s bank account verifier system that lets lenders compare sort codes and account numbers to its own database.

Users will be able to match identity information such as the consumer’s name, address and date of birth with transaction data provided through Open Banking, helping them verify who someone is faster and help avoid fraud.

5 Ways Online Loan Lenders are Changing the Financial Landscape (The Libertarian Republic) Rated: A

Perhaps you didn’t know that about 80 percent of American households are in some form of financial debt.

  1. Fast Access to Credit

Traditional banks have a bad reputation for playing hardball with loan applicants. Borrowers have to fill out more than a couple of forms and wait for days, weeks even, to get an approval. Never mind a simpler clerical error can get your request turned down.

  1. Credit Process Automation

One of the reasons traditional lenders take ages to approve and disburse credit is that they have to manually verify borrowers’ details.

  1. Introduction of New Lending Models

You don’t just walk into any bank or credit union and apply for a loan.

  1. Bad Credit? No Problem

The only other thing that is certain besides death and taxes is a traditional lender turning down a borrower with poor credit.

  1. Millennials Are Having Their Way

Being a millennial is a full-time job – with no paid overtime. From having people label them needy and entitled to being the objects of hate for older generations, it’s tough being a millennial.

Money20/20 Las Vegas: Wealthfront’s Freemium Tool Shows How Robo-Advisors Can Capture Market Share from Incumbents (The Fintech Times) Rated: A

At Money 20/20 in Las Vegas, Wealthfront announced it is opening up its financial planning service to anyone for free. The freemium service is currently in beta and will be available by the end of this year.

Heike van den Hoevel, Senior Wealth Management Analyst at 

The U.S. Financial Industry Could Be More Innovative. But Should It? (Barrons) Rated: A

American banking is apparently just a bit too boring, the Federal Deposit Insurance Corp. has concluded. Its chairwoman, Jelena McWilliams, told the American Bankers Association conference that the agency will open an innovation office.

This is related to, but slightly different from, the tack taken in July’s report from the Treasury Department that laid out more than 80 recommendations to help nonbank financial firms. The idea then was that nonbank financial firms, which get called fintechs for marketing reasons, don’t get a fair shot because of the regulatory advantages enjoyed by regular old banks.

The message was that regulation was stifling innovation by not regulating nonbank financial firms. Companies like Square, for instance, should be able to get banking charters if they want. (Which they do.)

McWilliams seems to see the problem from the perspective of banks rather than from nonbanks and comes to what looks like a contradictory position: Nonbank fintechs are innovating like crazy and banks aren’t keeping up. But there’s nothing exactly contradictory about saying nonbanks could be doing more things under a more accommodating regulatory regime and that banks aren’t innovating as fast nonbanks.

Walker & Dunlop Selects SS&C to Support $ 78 Billion Loan Portfolio (SS&C) Rated: B

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that Walker & Dunlop has selected SS&C as a technology and services partner to deliver a highly-automated solution for loan servicing, asset management, insurance compliance, document management and investor reporting. This partnership reinforces SS&C’s commitment to the agency/multifamily market.

SS&C will provide cloud-based software and outsourcing services including Precision LM for loan servicing, and AWD, an enterprise business process management system, which combines automation, workforce optimization and digital transformation for insurance compliance and renewals. SS&C’s integrated solution supports a broad range of commercial/multifamily loan programs, such as Freddie Mac (including Freddie K securitizations), Fannie Mae, HUD, Bridge, Life Company and more.

Commerce Bank Supports FinTech Startups through Partnership with SixThirty (Business Wire) Rated: B

Commerce Bank announced today a multi-year partnership with SixThirty, a St. Louis-based venture fund that invests in financial technology (FinTech) startup companies. SixThirty targets investments in late-seed stage startups that have a product and market traction and are starting to earn revenue. Its portfolio and pipeline represent some of the most innovative and promising FinTech ideas from around the world.

Through its strategic relationship with SixThirty, Commerce will provide hands-on training and mentoring to the companies selected to take part in SixThirty’s business development program. Commerce team members will also participate in networking opportunities with leading technology and financial services institutions and some of the brightest and most innovative minds in the country. Additionally, Commerce will have the ability to make direct investments in ideas that present strategic, long-term opportunity to the business and the needs of our customers.

The Schall Law Firm Announces the Filing of a Class Action Lawsuit Against Jianpu Technology Inc. (Business Wire) Rated: B

The Schall Law Firm, a national shareholder rights litigation firm, announces the filing of a class action lawsuit against Jianpu Technology Inc. (“Jianpu” or “the Company”) (NYSE: JT) for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.

Investors who purchased the Company’s shares pursuant to and/or traceable to the Registration Statement and Prospectus issued in connection with Jianpu’s initial public offering on or about November 16, 2017, are encouraged to contact the firm before December 24, 2018.

United Kingdom

The House Crowd opens £15m property development project to investors (Development Finance) Rated: AAA

A£15m crowdfunding property development project in Altrincham from the House Crowd has opened for investment.
The property crowdfunding and P2P lending platform is scheduled to complete the land purchase in November and start the build in January.

The House Crowd gives retail investors the chance to make an investment – starting from £1,000 – in property developments and builds the properties itself.

The site is in Altrincham town centre and will result in a total of 40 units comprising 31 apartments, eight townhouses and one commercial unit (pictured above).

P2P sector queries data used to justify tabled investor restrictions (Peer2Peer Finance) Rated: A

The industry gathered at a Peer-to-Peer Finance Association (P2PFA) event held in London last Wednesday, to discuss the Financial Conduct Authority’s (FCA’s) review of the sector ahead of the 27 October deadline for feedback.

The most contentious element of the FCA review was its proposals to introduce categorisation and appropriateness tests for P2P investors. Under the proposed changes, platforms would be restricted to marketing to those who are certified as sophisticated or high-net-worth investors or those that certify that they will not invest more than 10 per cent of their net portfolio in P2P.

At the P2PFA event, which was held under Chatham House rules, stakeholders suggested that the FCA had misinterpreted the findings of a 2016 survey conducted by the Cambridge Centre for Alternative Finance, which collected responses from investors. It was suggested that the FCA had used these findings as justification for the proposed marketing restrictions.

nCino to Present at Upcoming Fintech Industry Conferences (PR Newswire) Rated: B

nCino, the worldwide leader in cloud banking, today announced that members of the company’s leadership and market development teams will speak at two upcoming fintech industry conferences.

Nathaniel Ward, nCino’s regional vice president of market development for EMEA, will be speaking at MoneyLive Nordic Banking 2018 in a session titled: New Models in Banking: The Impact of Digitalisation. This session will explore the benefits and opportunities of cloud banking, and how to enable a workforce through digital transformation. This session will take place on 8 November at 09.45 at the Copenhagen Marriot Hotel.

Later in November, nCino’s chief innovation officer, Nathan Snell, will participate in a fireside chat at LendIt FinTech Europe 2018. In a session titled: The Rapid Pace of Product Launches in the Digital Age, Snell will discuss AI’s potential impact on the future of banking.

International

Crypto Lending Platforms Navigate Turbulent 2018 Market (Forbes) Rated: AAA

The surge of cryptocurrencies and “hodling” investment strategies of 2017 precipitated a flood of crypto asset-backed lending platforms coming to market.

The idea is a simple – take the concepts and models of traditional asset-backed lending and implement them with new “crypto assets” like Bitcoin and Ether. So if cryptocurrency miners or hodlers need short term access to fiat currency to pay expenses but don’t want to liquidate their positions, they can take out loans against the value of their crypto assets.

As such, platforms like ETHLend, SALT Lending, Nuo Lend and a plethora of others provide an alternative vehicle for investors who want to simultaneously hold and use their cryptocurrency.

Nexo Shares Positive Testimonials From XRP Users One Week After Launching Lending Service (Blokt) Rated: A

Nexo writes that it has received a huge inflow of corporate as well as individual XRP users who sought Nexo loans by keeping their crypto holdings as collateral. The loans ranged between $1,000 to $2,000,000. The service provider goes on to suggest that it is humbled as well as thrilled by the recognition it has received from the XRP community. The firm went on to share some testimonials by clients.

Australia

Australia’s fintech startups are starting to make profits (Business Insider) Rated: AAA

Australian fintech revenues are up 2.25 times and more of the startups have hit profitability as the local sector matures, according to the latest EY Census released at the FinTech Australia Intersekt conference.

Almost one in five (19%) fintech companies are now profitable with those aged three years or older now making up 43% of the local industry, up from 31% last year and just 20% in 2016.

The 2018 EY FinTech Australia Census, now in its third year, paints a picture of a sector now established and coming into its own as an alternative within the financial services landscape.

Forget flower crowns, personal loans are the latest wedding trend, says RateSetter (Mozo) Rated: A

From eco friendly decor to cupcake tiers, there’s always a new wedding trend on the rise. But according to recent research by peer-to-peer lender (P2P), RateSetter, low rate personal loans are also becoming many couples’ wedding essential.

A big reason loved up couples are opting for personal loans to help pay for their big day is to minimise credit card debt – 40% of RateSetter customers admitted to have taken out a personal loan to avoid using their plastic.

Contrary to the popular belief that men are not as involved in wedding planning, the data revealed that men were 66% more likely to take out a personal loan, compared to women (34%).

India

Banks or FinTechs – Who Does a Better Job for Business Loans? (Entrepreneur) Rated: AAA

Budding entrepreneurs with revolutionary business ideas (usually) need financing to keep their operations running. Banks have encouraged the growth of small-scale industries with access to credit, but the supply cannot keep up with the demand. Enter: Financial technology companies, aka FinTechs.

The global FinTech industry is maturing rapidly – with over $41.7bn invested in just the first half of 2018. Part of those deals was for FinTech lenders, who have supported the trend of industrialisation by granting business financing to those who were denied from traditional banks.

Asia

In brief: P2P lender PeopleFund raises $ 11m from Kakao, 500 Startups, more (Tech In Asia) Rated: AAA

PeopleFund, Korea’s fast-growing financial technology platform that connects borrowers and investors, has secured US$11M in series B funding.

The funding was led by KakaoPay, a subsidiary of Kakao that allows payments within Korea’s popular chatting app, KakaoTalk.

Returning investors included Dayli Financial Group, 500 Startups, and D3 Jubilee.

Authors:

George Popescu
Allen Taylor

Thursday October 11 2018, Daily News Digest

marketplace lending securitization

News Comments Today’s main news: Marcus may reign in new loans, but not SoFi, LendingClub. Fellow Finance goes public. Aereal Bank invests in BrickVest. Aussie borrowers dump banks for P2P lenders. Figure launches HELOCs on blockchain. Today’s main analysis: PeerIQ’s Q3 2018 marketplace lending securitization tracker. Today’s thought-provoking articles: How every day can be payday. Older Americans are most creditworthy. Corporate […]

marketplace lending securitization

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United States

United Kingdom

European Union

International

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News Summary

United States

Goldman’s Marcus May Rein In New Loans Next Year But Rivals Aren’t Worried (Forbes), Rated: AAA

Nearly two years after exploding on the online personal lending market scene, Marcus, the unit of Goldman Sachs, is reportedly retreating, reigning in its loan origination target for 2019.

That’s according to 

PeerIQ’s Q3 2018 Marketplace Lending Securitization Tracker (Lend Academy), Rated: AAA

A total of eight marketplace lending securitizations were issued in the third quarter, totaling $3.5 billion. This is the fifth highest level of quarterly issuance which is noteworthy given that the summer is typically a slower period for issuance. This is an increase of 35% from the prior year period.  It’s hard to believe that total marketplace lending issuance to date stands at $41.9 billion across 134 deals.

There has been a shift with spreads tightening and yields falling on new deals, a reversal from prior quarters. PeerIQ noted that all-in yields on consumer deals decreased 2 basis points from 3.72% to 3.7% and student deals decreased 100 basis points from 4.5% to 3.5% over the previous quarter.

Economic Growth is Solid, Lending Securitization Strong, but are Storm Clouds Gathering? (Crowdfund Insider), Rated: A

PeerIQ states:

“Citigroup, Deutsche Bank, and Credit Suisse continue to top the issuance league tables with 57% of MPL ABS transaction volume. Citi and CS are increasing their activity in the Fintech space, with CS also offering risk retention solutions on securitizations.”

The end of the two-week pay cycle: How every day can be payday (MarketWatch), Rated: AAA

Teresa Long, an assistant manager at a Walmart near Dallas, is like many Americans: She sometimes struggles to pay her monthly bills on time, especially when her biweekly paycheck fluctuates.

Occasionally, when she was not able to budget correctly for the month, she would default on a bill, miss a payment or send in a check late. Sometimes Long would take out a payday loan, but the fees were crippling. “You’re taking a $300 loan, and, by the time you pay it off, it’s probably $1,000 or $1,500,” said the 40-year-old mother of four. “It’s extra money you could have been saving.”

So when she saw information on an internal Walmart website about a new service from an Oakland, Calif.-based company called Even, Long was intrigued. It promised to pay her up to half her wages in advance, on demand, for an average $6 monthly subscription fee.

Sources: Pew Charitable Trusts, Center for Financial Services Innovation

LendingTree Study Finds Older Generations Most Creditworthy (PR Newswire), Rated: AAA

LendingTree today released its study on Americans’ credit scores by generation that found that the older someone is, the better their credit tends to be. On average, members of the silent generation (the oldest cohort) have credit scores 100 points higher than those of millennials.

Key takeaways

  • Millennials and Gen Xers have, on average, “fair” credit scores.
  • Baby boomers have “good” scores.
  • Members of the silent generation have “very good” scores.
Source: PR Newswire

Why older people have higher credit scores

One possible reason for higher scores among older people is cultural. In general, they may use credit less and may be more disciplined savers and spenders, said Kali McFadden, senior research analyst at LendingTree.

Another reason is that older Americans are more settled financially, with lower monthly costs. In general, the older someone is, the lower their mortgage payments and student loan debts are (or they don’t have such payments at all). Older Americans may also not need new furniture or have child care costs. That means they are less likely to have urgent financial costs that can result in delinquencies, which can hurt credit scores.

Millennials and Gen Xers may have to pay more for loans

Banks, credit card issuers and other lenders make lending decisions based on a borrower’s creditworthiness. They offer much better rates to borrowers with higher scores.

Source: PR Newswire

Boomers aren’t much better off

While the higher credit score of baby boomers (average credit score: 696) is a sign of better financial stability than the younger generations, there’s still room for improvement. The average boomer score trails that of the elder generation by 38 points.

The CEO of Robinhood sets out his vision after announcing another move to compete with major brokerages (Markets Insider), Rated: A

Robinhood, the zero-fee stock trading app that helped kickstart a race to the bottom in brokerage fees, has a new weapon in its arsenal as it fights to become the Amazon of personal finance: an in-house clearing system.

The $5.6 billion startup announced Wednesday that it has completed a two-year effort to build and launch its own in-house clearing provider that will allow it to save money and improve trading for its 6 million customers, cofounder and CEO Vlad Tenev told Business Insider.

Mike Cagney’s Figure Launches Blockchain-Powered Online Home Equity Loans (PYMNTS), Rated: AAA

Figure rolled out the first of those products yesterday: a digitally processed home equity loan that it claims can cut approval time to five minutes. According to Cagney, those Figure loans can range between $15,000 and $100,000, with funds made available to users in five days — down from the 45 days that such products usually take.

Learn more about Figure’s business model here.

Online Investing in Real Estate through Crowdfunding Expected to Grow (Urban Land Institute), Rated: A

Crowdfunding has captured the imagination—and money—of investors throughout the United States. While it is used for everything from charitable campaigns to launching startup businesses or paying legal fees, commercial real estate may be the largest online investment opportunity for crowdfunding to date, according to a panel at the 2018 ULI Fall Meeting in Boston.

“This $14 trillion market is the nation’s third-largest investment asset class behind stocks and bonds. Crowdfunding allows real estate firms to reach beyond friends and family to investors anywhere,” he said.

Toward a more inclusive fintech industry (American Banker), Rated: A

I worked for seven years in a company run exclusively by men — no women on the leadership team at all. The executive suite was physically walled off, a literal boys’ club, and no matter how valuable my performance, I wasn’t going to be a “cultural fit” for the all-male back room. Even now, 84% of venture-backed companies lack even a single female founder.

Significantrigorous research proves women in leadership make companies more profitable, and diverse leadership teams make better business decisions.

Direct lending platform Goji hits £100m in assets (AltFi), Rated: A

Goji has reached over £100 million in assets under management on its platform, the firm has said.

This latest milestone coincides with Goji becoming a partner of adviser-support network SimplyBiz.

Jake Wombwell-Povey, CEO of Goji says the firm has doubled the assets on the platform in a little over six months.

Roostify Announces Bidirectional Integration with Ellie Mae’s Encompass Digital Mortgage Solution (BusinessWire), Rated: B

Roostify, a digital lending solution, announced that its platform now offers a bidirectional integration with Ellie Mae’s Encompass digital mortgage lending platform. The seamless integration allows lenders to easily pass information between the two systems, driving quality and efficiency in the loan origination process.

States’ response to OCC fintech charter ‘disappointing,’ top Treasury official says (American Banker), Rated: B

A senior Treasury Department official said he was disheartened by state regulators’ negative response to its fintech report, which supported the Office of the Comptroller of the Currency’s plans to create a national fintech charter.

United Kingdom

Fintech startup Wagestream wants to tackle Britain’s ‘poverty premium’ (TechWorld), Rated: AAA

The UK’s Financial Ombudsman Service claims to have received 10,979 complaints about payday loans between April and June 2018, according to figures from its annual review for 2017/18.

The figures came just weeks after what was the UK’s biggest payday lender, Wonga, went into administration.

But London-based Fintech startup, Wagestream, has emerged to put an end to the misery of ‘poverty premium’ as it makes a stand to ‘destroy payday loans’.

Savers Offered 8% By ISA Bond That Fights for Justice (OA Online), Rated: A

INVESTORS seeking a higher rate of return – and who want to use their money to help victims of things like professional negligence – will be interested in a new bond by Just, held through an Innovative Finance ISA called Just ISA.

Launched in summer 2018, the Just ISA offers tax-free returns of 8% by investing in a bond that is ultimately used to fund legal cases on behalf of people who are seeking redress from things such as professional negligence by individuals and corporations.

London’s most influential people 2018 (Evening Standard), Rated: B

Tom Blomfield   – Chief executive of Monzo

The Oxford graduate has made carrying the ubiquitous orange payment card a mark of cool as its cult status continues to grow.

Samir Desai – Chief executive and co-founder of Funding Circle

The former management consultant has been at the helm for eight years of the leading peer-to-peer lender to small businesses.

Jaidev Janardana – Chief executive of Zopa

The former Capital One man is boss of the world’s first peer-to-peer lending company which is launching a bank.

China

Overheard in the Long Room: corporate China (FT Alphaville), Rated: AAA

Two diverging trends here. China, on a national level, is requiring more and more cash to service its debts. Not good news for those concerned about the Republic’s burgeoning debt burden, estimated to be anywhere between 300 to 350 per cent of GDP, depending on who you ask and what mood they’re in.

Source: Financial Times

This hasn’t deterred bond buyers however, as the IMF recorded a circa $40bn flow into yuan-denominated bonds over the second quarter of this year, according to Brad Setser at the CFR:

Source Financial Times
European Union

Fellow Finance goes public (AltFi), Rated: AAA

The platform is expected to raise approximately €10m. With a valuation of €55m at the close of the IPO on Tuesday, the platform anticipates rapid growth. The IPO saw 1.3 million new shares in the company on offer for an 18.3 per cent stake in the company. The offer was 2.2 times oversubscribed.

In addition to the new shares on offer, just under 1.3 million in existing shares in the company will go on sale too.

Nasdaq Helsinki welcomes Fellow Finance to Nasdaq First North Finland (Nasdaq), Rated: A

Nasdaq (Nasdaq: NDAQ) announce that trading in Fellow Finance Plc shares (short name: FELLOW) commence today on Nasdaq First North Finland. The company belongs to the Financials sector. Fellow Finance is the 61st company to be admitted to trading on Nasdaq’s Nordic markets* in 2018, and it represents the 9th listing on Nasdaq Helsinki in 2018.

German Blockchain Banking Group Bitwala Teams Up With solarisBank to launch Cryptobank Services (Crowdfund Insider), Rated: A

On Tuesday, German blockchain banking group Bitwala announced it has teamed up with solarisBank to launch its new cryptobanking services. According to Bitwala, nearly 35,000 customers have already pre-registered to be among the first to get access to new service, which helps customers to manage cryptocurrencies with unprecedented convenience and benefit from the high level of security and deposit protection commanded by German banking laws.

International

Germany’s Aareal Bank invests in UK real estate platform BrickVest (Banking Tech), Rated: AAA

Germany’s Aareal Bank says it plans to acquire a stake in BrickVest, the London-based online platform for commercial real estate investments.

SALT Coin Hits Retracement Target After 55% Gains (Global Coin Report), Rated: A

The announcement by SALT coin to accept Litecoin (LTC)as collateral in their blockchain lending platform led to an explosion in the price of their ERC-20 token. In a 24 hour shake-up that rocked the altcoin market just before the weekend, this crypto-lending favorite rose over US $0.82 on Friday morning. SALT (SALT) shot up 55% overnight while the rest of the market stagnated in a prolonged malaise.

The platform now offers USD loans at a 5.99% interest rate(for loans less than US$75,000) and has removed the cap on maximum loan amounts.

Nexo (NEXO) Overview: We might have gotten the first legit crypto lending platform (Captain Altcoin), Rated: A

After a prolonged period of sideways movement throughout the month of September, staying just below $0.050, the currency started growing around 21st. The slow rise lasted until 30th, when the daily trade volume sharply dropped off from $984,935 to $230,742. The same way it dropped, the volume soared back up on October 1st. NEXO price followed suit and grew to$0.0933 on a daily trade volume of $1,765,517. After a short correction of both parameters, the price and volume spiked up once again on the 5th, this time reaching $0.1143 and $1,936,530 respectively.

Source: Captain Altcoin

Crowdfunding firm aims for rapid global growth (BusinessDay), Rated: A

Finnish crowdfunding platform Fellow Finance is targeting fast international growth after a successful initial public offering (IPO) in Helsinki, its CEO says.

Founded back in 2013, the company was valued at €55m by the IPO, which closed on Tuesday and was more than two times oversubscribed.

Australia

More Aussie borrowers are dumping banks for peer-to-peer lenders, CommSec reveals (mozo), Rated: AAA

According a recent CommSec Economic Insights Report, the number of Aussies borrowing from non-bank financial institutions rose by 10.3% over the year to August.

“Banks are facing greater competition from non-banks. At the same time bank deposits are only lifting at a 2.5% annual rate, putting greater reliance on external funding. It is clearly a competitive and challenging environment for financial institutions,” said CommSec chief economist, Craig James.

Latin America

Goldman Sachs has joined George Soros and Steve Cohen in backing an Argentinian mobile banking startup (Business Insider), Rated: AAA

Ualá, the one-year-old mobile banking startup, raised $34 million in its series B round led by Goldman Sachs Investment Partners, along with existing investors including a private fund managed by Soros Fund Management, Jefferies, the venture arm of Steve Cohen’s Point72, and entrepreneur Kevin Ryan, according to an announcement seen by Business Insider.

Over 50% of people in Argentina had never had a card before and are only operating in cash, so the company aims to provide these people financial inclusion by giving them access to financial system, he added.

What’s happening with crypto in Latin America? (Crypto Insider), Rated: A

Latin America is undergoing somewhat of a transformation in the world of global finance. With the state of the banking industry in many countries in the region, people are turning to one another to solve their problems. From neighborhood initiatives to cross-border peer-to-peer lending platforms and online-only independent banking solutions, Latin America is exploring new ways to approach their personal finances.

APAC

Borrowers and Lenders Discover a Reputable Financial Conduit with FundKo (Digital Journal), Rated: AAA

As the world becomes ever more interconnected, as does the financial system. Borrowers and lenders are no longer confined by the parameters of a localized system. In fact, many lenders are branching out to the internet, through online companies such as FundKo.

FundKo is a peer to peer lending company in the Philippines.

No customer may invest 100% of their money on a single loan: in fact, the largest sum of money they may invest is 10% of a loan. This guideline ensures that lenders never suffer a catastrophic loss.

Authors:

George Popescu
Allen Taylor

Monday July 30 2018, Daily News Digest

TransUnion

News Comments Today’s main news: Prosper tops 1 million loans. KBRA assigns preliminary ratings to SoFi Consumer Loan Program (2018-3) Trust. Elevate Credit earnings preview. Zopa CEO on FCA regulatory review. 60 firms apply for Hong Kong banking license. Today’s main analysis: Credit bureau earnings. Today’s thought-provoking articles: FCA to crack down on UK P2P lenders. What to expect in […]

TransUnion

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

Marketplace Lender Prosper Tops One Million Loans (Crowdfund Insider) Rated: AAA

Online lender Prosper announced a new milestone yesterday. The marketplace lending platform topped one million loans this past week representing over $13 billion in originations.

In May, Prosper announced strong loan originations saying the platform experienced a 27% year-over-year increase in the first quarter to $744 million.

The net loss for Q1 decreased by $12.6 million to ($24) million but EBITDA was positive for the fourth consecutive quarter.

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-3 Trust (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-3 (“SCLP 2018-3”). This is a $546.00 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-3

Class Preliminary Rating Class Principal
A-1 AA+ (sf) $278,000,000
A-2 AA+ (sf) $136,000,000
B A (sf) $69,000,000
C BBB (sf) $63,000,000

In Second Act, a Silicon Valley CEO Opens Up About Affairs (Wall Street Journal) Rated: A

Seeking a fresh start in Silicon Valley, former Social Finance Inc. chief and co-founder Mike Cagney now admits that an affair with a subordinate was a reason for his abrupt departure last year from the firm.

Now, Mr. Cagney is adding another reason for deciding to leave a startup he led for six years. In an interview with The Wall Street Journal, he said that he had consensual sexual relationships with female subordinates, something he had previously denied publicly. He also said he had misled SoFi’s board of directors about one of the affairs.

Sex Scandal Toppled a Silicon Valley Chief. Investors Say, So What? (The New York Times) Rated: A

Yet just months after Mr. Cagney departed SoFi, two venture capitalists who had been on the company’s board and knew many details of his actions invested $17 million in his new start-up, called Figure. Since then, Mr. Cagney has raised another $41 million from others for the lending start-up, which will open soon.

Mr. Cagney’s swift comeback — from ouster to new company took four months — provides one of the starkest illustrations of the speed with which the technology industry is moving past the sexual harassment allegations that swept Silicon Valley and many other industries over the last year.

Highest GDP Growth since 2014, Credit Bureau Earnings (PeerIQ), Rated: AAA

The US economy grew at a blistering 4.1% pace, the highest GDP growth reading since 2014, driven by consumer spending. Consumer spending grew by 4%, higher than economists’ estimates. Consumer spending has been driving US economic growth and outstanding consumer debt has reached all-time highs, although consumer debt per capita is still well below its pre-crisis peak.

Credit Bureau Earnings

PeerIQ’s partner TransUnion released its 2Q earnings this week, along with Equifax. TransUnion’s earnings beat market expectations with revenue of $563 Mn, up by 19% YoY. TU’s revenue growth was driven by Online Data Services, where revenue grew by 23% YoY.

Source: TransUnion and PeerIQ

Equifax’s revenue increased by 2% YoY to $877 Mn in 2Q, while net income decreased by 12% YoY to $145 Mn. Below we compare the latest earnings of the 3 credit bureaus – TransUnion, Equifax and Experian. Note that Experian’s earnings are for the 6 months ending 3/31/18.

Source: Bloomberg and PeerIQ

Elevate Credit earnings preview: what Wall Street is expecting (Markets Insider) Rated: AAA

  • Elevate Credit is reporting earnings from Q2 on July 30.
  • Analysts predict earnings per share of $0.073.

Elevate Credit releases earnings for the most recent quarter on July 30.

9 analysts are estimating earnings of $0.073 per share as opposed to earnings of $0.080 per share in the same quarter of the previous year.

Analysts are expecting the company to report $186.8 million, an increase of 24.13% over the prior year quarter.

5 Ways to Earn a Truly Passive Income (Zing Blog) Rated: A

In recent years, investors have started putting their money into peer-to-peer lending companies. By lending out your own money to peers in the form of personal loans, you are able to earn interest – similar to the way that banks and other lenders produce income. On sites such as Lending Club and Prosper, you can open an account and begin investing in this passive income venture.

Like all investments, the ROI varies, but Lending Club and Prosper boast an average investment return of about 5 – 10%. Both of these platforms also give opportunities for users to make their investment semiautomatic, meaning you wouldn’t need to constantly monitor your investments or reinvest returns. But there would still be some work involved. If you want this to be a completely passive income stream, Lending Club offers a PRIME account, in which you’ll have a fully managed account. You’ll need to have a minimum investment of $5,000, though, and it will be subject to a one-time .8% fee.

85% of Small Business Owners Say They’re Living the Dream (Small Business Trends) Rated: A

According to recent findings from Kabbage, a financial services and data platform, 85 percent of small business owners believe that being your own boss and owning a business is achieving the American Dream. In addition, 84 percent said they hope their children will also one day become small business owners.

The survey, which consists of responses from more than 1,000 small business owners, found that 38 percent of those who hope their children become entrepreneurs feel that way because they want them to turn their passion into a career. 24 percent appreciate that being their own boss allows them to create a flexible schedule. And 22 percent feel that building a small business is rewarding, and they want their kids to feel that sense of pride.

ArborCrowd Wants HNW Investors to Understand the Appeal of Workforce Housing (National Real Estate Investor) Rated: A

ArborCrowd targets IRRs from 12 percent to 15 percent in top-tier markets and IRRs in the mid-teens or low 20s in secondary and tertiary markets, according to Adam Kaufman, co-founder and managing director of the online crowdfunding platform.

MILLENNIUM TRUST COMPANY REFRESHES ALTERNATIVE INVESTMENT PLATFORM (STL News) Rated: B

Millennium Trust Company, LLC, (“Millennium Trust”) a leading retirement and custody services provider to advisors, financial institutions, businesses and individuals, announced today the launch of its enhanced education platform on the Millennium Alternative Investment Network (MAIN). MAIN is a free research, education and alternative investment resource to help investors and advisors increase their understanding of alternative assets, and invest through simplified and streamlined investment processes.

United Kingdom

Zopa CEO Jaidev Janardana Welcomes FCA Regulatory Review of P2P Lending (Crowdfund Insider) Rated: AAA

This past Friday, the UK Financial Conduct Authority (FCA) finally released their reviewof the crowdfunding industry regulations. While the investment crowdfunding sector (equity crowdfunding) came away mostly unscathed the loan based sector (or peer to peer lending) took a bit of a lashing.

The FCA said the peer to peer lending had become “increasingly complex” and sited occurrences of operations that lacked transparency and instances where interest rates were not matched with the appropriate level of risk. The FCA subsequently announced a new consultation as it looks to firm up compliance for UK online lenders. Gillian Roche-Saunders, a partner at the law firm of Bates, Wells & Braithwaite – and Fintech expert, said this will be “the foundation of a much more sophisticated and targeted supervisory approach from the regulator.“

Zopa CEO Jaidev Janardana welcomed the reappraisal and added scrutiny of P2P operations calling it a positive step. Janardana said they “wholeheartedly agree” with the FCA assessment;

Crackdown is looming for peer-to-peer lenders (The Times) Rated: AAA

The City watchdog is to crack down on peer-to-peer lending and the crowdfunding industry amid fears that consumers are being exposed to risks they do not understand.

The popularity of peer-to-peer lending, where individuals or small businesses borrow from members of the public and institutions on the internet, has soared in recent years.

About 150,000 Britons have handed over nearly £10 billion in the past decade through these forums, earning an attractive average of 4.5 per cent interest.

U.K. Watchdog Proposes New Regulations On Lending Platforms (PYMNTS) Rated: A

The Financial Conduct Authority is looking to tighten up oversight over crowdfunding platforms, which provide short-term lending for small businesses and consumers, in part to make sure customers have clear information about the rules, terms and conditions.

A 156-page report by the watchdog found that some customers were subject to poor practices by certain online platforms and that they were provided with unsuitable products and poor treatment.

The reform measures have been backed by platforms like Funding Circle, a leading crowdfunding lender, as a way to gain more legitimacy as competition heats up with traditional banks. RateSetter, one of the three-largest P2P lenders in the U.K., has also sought clarity on regulations as a means to better compete against established banks.

We would remain in EU now, say small companies (The Times) Rated: A

The majority of small companies would vote to stay in the European Union if there were to be a re-run of the Brexit referendum, a survey shows.

A poll of 965 small businesses found that 56 per cent now want to stay in the EU and 32 per cent wish to leave. The remainder were undecided or declined to state their preference.

The survey, which was conducted by Funding Circle, a peer-to-peer lending platform, highlighted a 7 per cent swing towards remaining since April last year.

Tougher P2P lending rules proposed over poor practice concerns (Your Money) Rated: A

The Financial Conduct Authority (FCA) has opened a consultation on loan-based crowdfunding platforms (peer-to-peer) following its original review of the sector in 2016.

It said since then, it’s observed that the new and growing area has become increasingly complex and has found evidence of “poor business practices” that could cause actual or potential harm to investors.

For example, P2P platforms have a much more active role by taking decisions on behalf of investors, structuring the loans they’re exposed to, and splitting loans across a number of investors (lenders) in order to receive a target rate of return.

Here’s what the industry thinks of the FCA review (Peer2Peer) Rated: A

THE FINANCIAL Conduct Authority released its long-awaited review into the peer-to-peer lending sectoron Friday. Here are some of the industry reactions so far…

Rhydian Lewis, chief executive, RateSetter-“I believe peer-to-peer lending will become a part of every investor’s diversified portfolio and the proposals from the FCA do not change that belief.”

James Meekings, co-founder and UK managing director of Funding Circle-“Funding Circle has consistently campaigned for proportionate regulation that protects consumers, whilst allowing innovation to boost choice and competition in the lending and investment markets.”

Stuart Law, chief executive at Assetz Capital-“While we have just received this latest FCA consultation document, and therefore have not as yet fully digested it, we will always be supportive of any regulation that ultimately benefits our investors, borrowers and the wider peer-to-peer industry. Proposals that advocate greater transparency, appropriate investor remuneration and good corporate governance are very much welcome.”

China

Hong Kong prepares to usher in virtual banks, as 60 firms apply to be pioneers in financial revolution (South China Morning Post) Rated: AAA

When SagaDigits, a HK$2 million (US$254,820) start-up, wanted to add post-merger shareholders and signatories to its corporate bank account, its chief executive approached a Hong Kong bank for help.

What happened next turned into many months of back-and-forth paperwork and arguments with the lender, said the company’s chief executive officer, Arthur Chan. He even spent a month tracking down his bank relationship manager after the staff was relocated to another branch.

Good news may be at hand for him, as the Hong Kong Monetary Authority (HKMA) is poised to issue the city’s first virtual banking licence by year’s end to promote fintech and offer customers “a new kind of experience.”

Ning Tang, founder and chief executive officer of CreditEase, a Chinese wealth-management firm and the majority owner of U.S.-listed peer-to-peer lending platform Yirendai, talks about China’s P2P lending industry. He speaks with Tom Mackenzie on “Bloomberg Daybreak: Asia.”

European Union

What Can FinTech Expect In The Next 24 Months In The Central And Eastern Europe (Forbes) Rated: AAA

Trend #1: Further development of payment and money transfer solutions., FinTech incumbents started historically with niches that were on the one hand abandoned by traditional banks and, on the other hand, not as strictly regulated. That is why there has been more transaction service providers originating in the region, compared to different types of FinTech companies.

Trend #2: Business-to-business. Retail banking requires relatively more effort and brings in lower returns in exchange than servicing Small and Medium Enterprises (SME’s), not to mention large enterprises, which has been one of the remaining strongholds for banks (aside from trading, mortgages and services for corporations). Therefore, FinTech startups began offering their products to individuals but are slowly entering the corporate sector.

One of the examples is

Trend #3: Growth in complexity. From single service providers with excellent client experience, FinTech incumbents have evolved into mature companies with the high tech background.

Trend #4: Blockchain.  

FinLeap moves into the fintech platform-as-a-service space (FinExtra) Rated: A

Berlin-based fintech factory FinLeap is positioning as a provider of bundled solutions for startups and banks, melding stand-alone products across a common platform.

The company is rolling out two platform-based products to connect disparate applications in the consumer markets – FinReach – and in business process management – Infinitec.

10 Irish startups to look out for in 2018 and beyond (EU Startups) Rated: A

This week we took a closer look at the Irish startup scene with the goal to introduce you to some of the most promising startups from there. Below you’ll find 10 Irish startups to look out for in 2018 and beyond.

Flender: Successfully funded through the Seedrs equity crowdfunding platform, Dublin’s Flender is a peer-to-peer (P2P) lending platform for businesses and consumers to borrow and lend money through their existing networks. Flender was launched in early 2017, offering a combination of social network, low-interest rates and an excellent mobile experience. They have so far raised €2 million from investors to formalise the social lending market among friends, family and business connections.

International

Libra Credit Receives Investment from Binance Labs (Crowdfund Insider) Rated: A

Libra Credit, an online lender in the cryptocurrency space, has received an investment from Binance Labs – the tech incubator and VC portion of Binance – one of the largest cryptocurrency exchanges in the world.

According to a post on Medium, the agreement enables BNB holders to receive loans collateralized by the crypto. So Libra Credit will lend fiat and digital assets to users who pledge BNB.

Nexo Crypto Lending Platform Offers to Acquire SALT Lending’s Qualifying Assets (Bitcoin Exchange Guide) Rated: A

Known for being the first-ever instant, cryptocurrency-backed loans provider, Nexo took to Twitter to express its offering to acquire what remains of SALT Lending, a membership-based lending and borrowing network and a worthwhile competitor.

The tweet made on July 27, 2018, made it seem as if the Nexo was doing a favor or “lends a helping hand” to its competition, while sharing its willingness to “provide instant liquidity to its community, up to $2,000,000 per client without “proof-of-access” requirements.” To add to this public announcement, the firm also shared what appears to be its letter of intent to SALT Lending.

Global Debt Registry Bolsters Executive Team To Help Transform Structured Credit Market (Payment Week) Rated: B

Global Debt Registry (“GDR”), today announced two new executive hires from the banking industry. Evan Psaropoulos, formerly of Credit Suisse, has joined GDR as CFO, and Patrick Dietz, formerly of BNY Mellon, has joined the organization as Product Director. This follows Charlie Moore assuming the role of Chief Executive Officer, in addition to President, in recognition of his leadership and vision.

In his role as CFO, Evan will oversee the finance function within GDR, including overseeing equity financing and commercial strategy. He will lead investor relations for GDR across the capital markets space leveraging his investment banking and corporate development experience.

Australia

Online Lender Prospa Receives Recognition as Top Fintech (Crowdfund Insider) Rated: AAA

Prospa, a leading online lender for Australian SMEs, has received a nice recognition being named National Fintech Lender of the Year in the 2018 MFAA Excellence Awards.

The Mortgage & Finance Association of Australia  or “MFAA” is the national body representing finance brokers, mortgage managers, lenders, aggregator/broking groups and other industry participants, in the mortgage and finance industry in Australia.

The MFA also recognised Prospa’s Roberto Sanz as the National Winner of Business Development Manager in the Lender and Support Service Provider category for 2018.

Strong First Half for Fintech Lending (Livewire) Rated: A

It has been a very active half year in the Australian Alternative Finance (AltFi) market. Since my previous wire on the key themes expected for 2018, the market has continued to grow and evolve. The themes were: 1) Continued Growth, 2) Consolidation of Lenders; and 3) Transparency via Listings.

These themes have been present in the first half, however we have seen two other themes present that will accelerate the development of the Australian Fintech lending market. One being the participation of banks in funding the AltFi lenders, the other, Government support for SME lending.

India

i2i Funding Helps Break Away from Traditional Banking (The Tech Panda) Rated: AAA

The Peer to Peer or P2P lending market has doubled in China. Though it might be at a nascent stage in India, according to co-founder of P2P lending platform i2i Funding Raghavendra Pratap Singh, it has a lot of potential. In a chat with The Tech Panda, Singh explained the intricate process and i2i Funding’s plans for the future.

I2i Funding had started with loan amounts of INR 10-15 lakhs per month, and now are doing INR 1.5 crore. Currently, they have around 30,000 registrations for borrowers and around 4000 for investors.  They add around 200-300 new investors per month. So far, the company has disbursed over 500 loans of over INR 8 crores.

How to earn money by investing (Economic Times) Rated: A

Many individuals still consider keeping money in their bank savings accounts akin to investing. Yes, it earns an interest rate but over a longer period of time, the earnings heavily fall short of negating the impact of inflation.

Currently, most banks offer 4 percent or even lower return on their savings accounts. It, therefore, becomes important to look out for other better alternatives and investment options to make your money earn you money.

Asia

Economy in brief: Half of unlicensed P2P lending from China (The Jakarta Press) Rated: AAA

The Financial Services Authority (OJK) has discovered that more than 100 unlicensed peer-to-peer (P2P) lending providers in the country had been developed by Chinese firms.

The OJK reported its findings on Friday, pointing out that out of 227 unlicensed P2P lenders it had listed, at least half originated from China.

What Imran Khan’s Election Win Means For Pakistani Fintech (Forbes) Rated: A

Imran Khan has claimed victory in the 2018 Pakistani election for his PTI party after a campaign that has been marred by violence and allegations of vote rigging. Although Khan’s party is expected to fall short of an overall majority and would have to form a coalition, his economic policies have been questioned.

As per his 

MENA

Thinking outside the (financing) box (CPI) Rated: AAA

Can you describe the development of peer-to-peer lending in MENA?
Marketplace lending is still a relatively new phenomenon in the MENA region. A big part of what we do is to educate investors in the potential for diversifying their existing portfolios with a different type of investment. It offers them a wide-range of choice as investors are able to browse through campaigns and select the ones that match their criteria best.

Liwwa only lends to small and medium enterprises (SMEs), and we continue to scale up that lending activity. As our underwriting activity grew from $2.3 million in 2016 to $5.2 million in 2017, the level of funding from retail investors nearly doubled. Retail lenders want to see a credible company, a solid portfolio and a low default rate. As long as Liwwa continues to deliver on those three criteria, we can build trust in the platform and hopefully build an ongoing relationship with new and existing investors.

Over the last 18 months banks have significantly scaled back lending activity to the SME sector. How as this affected P2P lending activity in the region?
IFRS 9, with its provisioning rules, is one of the main drivers of banks’ reticence to lend to SMEs. The market demand for loans hasn’t appreciably changed, and one could argue that market risk has stabilised in many MENA economies—so the accounting rule change is having an outsized impact. Alternative financing structures such as these are poised to fill a need because much of the debt is treated on an off-balance sheet basis. Retail lenders and non-bank institutions can contribute to filling the SME lending gap given a difference in risk appetites and a more generous perspective on solvency ratios.

Africa

Peer to peer lending: from Nigerians, to Nigerians (Stears Business) Rated: AAA

When societies were small and closed-off, people lent freely among themselves based on trust. At worst, the lender believed that he could take up his case with the local community. But as globalisation and technology came, people began to migrate, and personal lending became inefficient. The solution? Banks.

At the centre of this story is FINT, a Nigerian online peer-to-peer lender founded in early 2017. The idea is simple. Emeka signs up to the FINT platform and requests for a loan. Chinyere signs up, funds her account, and chooses which loan(s) she wants to finance from a pool of anonymous borrowers. In its simplest form, Emeka wants ₦120,000 for six months, and Chinyere lends it to him and gets monthly payments of the principal (₦120,000) and interest (e.g. 10%) every month – or ₦13,200 each month.

FINT has been pioneering this simple form of lending in Nigeria. Its aim to “empower Nigerians by making loans more accessible and affordable; and lending more rewarding” speaks to the core idea of peer-to-peer lending.

Latin America

New rules for credit fintech companies (Lexology) Rated: AAA

The Central Bank also issued Circular 3,898 in May 2018, which set out the procedural rules for establishing such entities.

The Central Bank has introduced these rules in order to continue the modernisation of Brazil’s financial sector – something which has been ongoing since 2013, with more intensive actions being taken since 2016. The main goals of the rules are to:

  • incentivise innovation;
  • increase legal certainty;
  • enable the entrance of new players in the market;
  • increase competition; and
  • reduce interest rates.

Authors:

George Popescu
Allen Taylor