Thursday June 7 2019, Weekly News Digest

economic downturn

News Comments Today’s main news: SoFi completes first rated pass-through certificates offering. Y Combinator backs Monzo for U.S. expansion. Funding Circle set for largest securitization. Dianrong shifts strategy. Funding Circle inks 50M Euro deal with Avida Finans. Open raises $30M. Today’s main analysis: Chance for recession is rising (A MUST-READ PeerIQ analysis). Today’s thought-provoking articles: […]

The post Thursday June 7 2019, Weekly News Digest appeared first on Lending Times.

economic downturn

News Comments

United States

United Kingdom

International

China

APAC

News Summary

United States

SoFi Completes First Offering of Rated Pass-Through Certificates (PR Newswire), Rated: AAA

SoFi announced today that it completed a $200 million offering of post-graduate student loan asset-backed certificates issued by SoFi Alternative Trust 2019-C (SAT 2019-C). The Certificates are rated single-A by DBRS and mark the first rated pass-through certificate transaction issued by SoFi and the first publicly rated student loan pass-through transaction in the securitization market.

Unlike traditional student loan ABS transactions, SAT 2019-C does not use overcollateralization or bond subordination as forms of credit enhancement.  The A rating assigned to the certificates by DBRS reflects the strong credit attributes of the borrowers. The portfolio has a weighted average credit score of 783 and a weighted average annual income of $175,746.

Y Combinator says Monzo’s community will help it succeed in the US where others have failed (AltFi), Rated: AAA

Leading US startup backer Y Combinator has become the latest high-profile backer of Monzo, on the eve of the bank’s American expansion.

Today Monzo confirmed it had raised £113m in a round led by Y Combinator’s Continuity fund, along with Latitude, General Catalyst, Stripe, Passion Capital and others.

Recession Risks; OCC Charter + Big Tech (PeerIQ), Rated: AAA

Weak economic data continue – inflation expectations tumble, manufacturing has moved into recession, and the 10y/3m yield curve remains mildly inverted. Although the FOMC took no rate action this week, dovish signaling has led market participants to expect a 70% chance of 3 or more rate cuts in 2019.

Source: WSJ, PeerIQ

CPI Since 1879 During Business Cycles

Source: Deutsche Bank, PeerIQ

How A Former J.Crew And Pillsbury Exec Is Applying His CFO Expertise At A Financial Unicorn (Forbes), Rated: AAA

Scott Rosenberg: Kabbage represented a great opportunity for me to apply my prior experiences and help architect the future vision of a fast-growing company. Every role in my career has allowed me to lead or influence multiple divisions within a company, which makes my operational approach similar to that of a COO or General Manager. Beyond leading the CFO office in previous roles, I led Marketing at J. Crew, Operations at Pillsbury and most recently was the President of Purchasing Power. This broad vantage point lets me ensure financial growth as the CFO, but also identify opportunities to establish operational efficiencies more broadly across the organization. I take the same approach at Kabbage as I lead multiple disciplines, including Capital Markets and Legal. It encourages transparency across teams which allows us to move faster. With more than 175,000 customers accessing over $7.0 billion to-date, it’s an exciting role to drive hyper growth and deliver the best products and experiences for U.S. small businesses.

According to a survey released today by Kabbage that polled more than 500 companies across multiple industries, 80% of American entrepreneurs said they felt confident in their readiness to weather another economic crisis.

H&M and Klarna Grow Partnership to US (Yahoo! Finance), Rated: A

H&M and Klarna announced that they have expanded their current partnership agreement to also include the US market, in the development of an unrivalled payments and shopping experience across touchpoints. Together, H&M and Klarna are aiming at further integrating H&M’s digital and physical stores to give customers a seamless, personalised and engaging shopping experience no matter where, when and how they shop.

This Commercial Real Estate Marketplace Provides Direct Investment Opportunities (TheStreet), Rated: A

CrowdStreet, which launched in 2014, is the leading player in the fast-growing field of online commercial real estate investing. The company’s online Marketplace allows individual investors to reap the rewards of investing in the $6 trillion commercial real estate sector, investing in everything from multifamily apartment buildings to self-storage facilities and senior-living centers.

The average return on the first 14 deals financed on CrowdStreet’s platform — those which have fully wrapped up, yielding final returns to investors — is 31.7%, with a 1.6x equity multiple and a holding period of two years.*

MassMutual, CommonBond Team Up to Tackle Student Debt in the U.S. (Mass Mutual), Rated: A

Total student loan debt in the U.S. is now over $1.5 trillion, which prevents many people from passing financial milestones and saving for the future.

Massachusetts Mutual Life Insurance Company (MassMutual) has teamed up with CommonBond to offer a new student loan refinancing program through CommonBond with a rate advantage to help people take control of their student debt. This program – available online to all individuals with student debt today — is among the first of its kind in the student lending and insurance industries. The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual’s network of financial advisors, currently 9,000 strong.

Ocrolus Raises $ 24M to Modernize Workflows with a Human Touch (PR Newswire), Rated: A

Ocrolus today announced $24M in Series B funding led by Oak HC/FT, a premier venture growth equity fund with deep fintech expertise. Ocrolus is powered by an elegant blend of artificial intelligence and crowdsourced human quality control, enabling firms across the financial sector to automate high-stakes business processes with precision. The company will use its new funding to automate underwriting workflows for lenders and banks, and expand into new verticals.

How Citizens Bank is rethinking mobile and online banking (American Banker), Rated: A


Robos are getting political. Will Wall Street follow? (FinancialPlanning), Rated: A

Forged in the wake of the financial crisis and political movements like Occupy Wall Street, digital advisory firms have become decidedly open about their political agendas. By advocating for the democratization of financial advice and stronger consumer protections, digital investment platforms have become the face of progressive politics in the market. That’s attractive to young investors — assets managed on digital platforms are expected to soar to $1.26 trillion by 2023, according to a report by Aite Group.

Cross River gets onboarding system it coveted in fintech deal (American Banker), Rated: A

The $1.5 billion-asset bank agreed on Monday to buy Seed for an undisclosed amount. The 5-year-old fintech offers a mobile account for small businesses, complete with bill payment, remote deposit and an attached debit card.

“It’s About Time” Documentary Sheds Light on Earned Wage Access (PR Newswire), Rated: A

Today, PayActiv, Inc., the leader in employer-sponsored, holistic financial wellness service for employees, unveiled its documentary made in collaboration with Early Light Media and Roundtable Companies about the direct benefits of timely earned wage access. Now available at ItsAboutTimeTheFilm.com, the documentary, titled It’s About Time, looks at pay timing and its correlation with epidemic financial stress being experienced by millions of working Americans.

Fintech MX gets $ 100 million in funding to expand operations (American Banker), Rated: B

The data company MX is set to announce Tuesday an infusion of $100 million from a host of partners, including National Bank of Canada and Washington Federal.

Neighborhood Ventures Closes on Third Investment Property Near Old Town Scottsdale (Yahoo! Finance), Rated: B

Arizona’s first real estate crowdfunding company, Neighborhood Ventures, recently closed on its third investment property, an eight-unit apartment building in Old Town Scottsdale. Ninety Arizona residents invested a total of $550,000 into the purchase of the property, which will be renovated with a plan to operate it as an Airbnb.

United Kingdom

Funding Circle set for its largest ever securitisation (P2P Finance News), Rated: AAA

DEUTSCHE Bank has unveiled more details on Funding Circle’s fourth securitisation, revealing it will be the highest-value package of loans it has offered so far.

The investment bank, which has been mandated as sole arranger and lead manager, said the deal will comprise 3,030 loans, with an aggregate balance of £244m and an average interest rate of 9.91 per cent.

FTSE 250 movers: Funding Circle falters (ShareCast), Rated: A

London’s FTSE 250 fell 0.14% lower to 19,260.07 in afternoon trade on Wednesday, with Funding Circle leading the index lower.

The peer-to-peer lending marketplace was accompanied by fellow financial stocks, with Amigo HoldingsCharter Court Financial ServicesPlus500 and Onesavings Bank all featuring among the top fallers.

OakNorth completes £60m facility for three new retirement schemes (Development Finance Today), Rated: A

OakNorth has completed a £60m loan to Affordable Housing & Healthcare Group (AHH) for the development of three new affordable retirement living schemes.

He said that in retirement he will continue to be a school governor, and that he intended to devote more time to the two charities he is involved with (the other one being Lendwithcare – peer to peer lending to entrepreneurs in a number of Third World countries).

China

Top Chinese peer-to-peer lender to shift strategy after latest fundraising (ETPrime), Rated: AAA

Wu Yujian and Liu Jiefei Dianrong, one of China’s largest peer-to-peer (P2P) lending platforms, said it’s planning a shift in strategy to focus on cooperating with traditional financial institutions as China’s regulators continue to tighten their grip over the industry. The move was revealed on Thursday as the Shanghai-based company confirmed (link in Chinese) it had completed a new

Government Asks Victims of P2P Fraud Case to Register for Compensation (Caixin Global), Rated: A

An intermediate court in Beijing overseeing the Ezubo case said on Wednesday that victims could detail their cases to authorities at local registration sites between July 2 and Aug. 30.

European Union

A very Nordic fintech revolution (Pitchbook), Rated: AAA

Europe is a hotbed of activity when it comes to fintech investments, as the sector continues to mature. Year after year, billions of euros are plowed into promising startups, with last year seeing more than €2.8 billion raised across 438 deals, per the PitchBook Platform.

Below is a list of some of the most innovative fintech companies founded in the Nordics, together with noteworthy investments and backers.

EU Moves Closer To New Bloc-Wide Crowdfunding Rules (Law360), Rated: A

European lawmakers floated new rules on Wednesday to make it easier for businesses and investors to ask the public to fund their projects, bringing the European Union a step closer to forging a common set of rules for national regulators overseeing crowdfunding.

International

Funding Circle strikes €50m loans deal with Sweden’s Avida Finans (AltFi), Rated: AAA

Funding Circle has struck a deal with Swedish finance house Avida Finans to lend an initial €50m to small firms in Germany and the Netherlands this year.

How DeFi startups are providing an alternative to traditional lending (Sociable), Rated: AAA

DeFi lending startups are leveraging blockchain to shake-up the traditional money lending industry.

Digital Assets Kept as Collateral

Salt is one company which has been borne out of the cryptocurrency sector.  Through its platform, digital assets are kept as collateral but returned upon repayment of the loan.

Automated P2P Lending Agreements on Blockchain

ETHLend is another DeFi platform built on top of the Ethereum network.  It creates a means for lenders and borrowers from around the world to establish peer to peer lending agreements over blockchain.

Blockchain Catering to the Unbanked in Latin America

A Blockchain-Driven Lending Circle

A completely different approach is being taken by startup, WeTrust.

When it comes to lending, users can establish a ‘lending circle’ on the platform.

Australia

P2P lender expands presence in third-party space (TheAdviser), Rated: AAA

Peer-to-peer lender RateSetter has announced its new partnership with Choice Aggregation Services (Choice), providing accredited brokers with access to the lender’s personal loan offerings.

P2P lender joins aggregator panel (Broker News), Rated: A

The partnership will make RateSetter’s unsecured personal loan product available to Choice Aggregation Service’s network of more than 1,600 brokers, in line with the trend towards servicing a more diverse array of client needs.

Recognising SMEs’ contribution to the economy (AustralianBroker), Rated: A

Prospa research has highlighted how lending to small business positively affects the economy through contributing to GDP and creating and supporting jobs.

Data released this week by accounting software firm Xero, analysed invoices from 150,000 Australian SMEs and concluded that 53% of trade credit invoices are paid late by big business suppliers and customers – on average 23 days after their due date. Squeezing SMEs, Xero calculates these late payments are worth $115bn.

Technology boosting financial literacy (Financial Review), Rated: A

Technology will need to play a bigger role in boosting the financial literacy of Australians as a large number of financial planners leave the profession, says Bronny Speed, financial advice leader at Chartered Accountants Australia New Zealand.

Speed says as increased educational and licensing standards for Australia’s 29,000 financial advisors will push some out of the market, it will leave a gap in the profession’s ability to provide financial advice and boost literacy.

India

India’s Open ‘neo-bank’ raises $ 30 million to help businesses automate their finances (TechCrunch), Rated: AAA

Open, a Bangalore-based startup that operates a “neo-bank” to help businesses automate and run their finances, has bagged $30 million in a new funding round as investors look to replicate a globally tried and tested business idea in emerging markets.

Open Banking is Disrupting the Traditional Banking System and Indian Neo Banks are Gearing up for it (Entrepreneur), Rated: A

In today’s age of digitisation, it is all about the customer and improving his/her experience. To achieve this goal, banks and fintech companies have to support each other. This change in the ecosystem has invented the concept of neo banking which can be rightly dubbed as the new era of the banking industry.

Govt should look at alternative financing option like P2P lending to solve MSMEs’ credit woes (MENAFN), Rated: A

As Budget is about to come in few weeks, it’s time for the government to look at alternative financing option like P2P lending to solve the credit crisis in Micro Small and Medium Enterprises (MSME) sector, said Rajiv M Ranjan, Founder & CMD, Paisa Dukan.

While sharing the budget expectations, he said, ‘Getting access to institutional credit has been one of the major problems of the MSMEs and to maintain the wealth of the Indian middle class, P2P lending can turn a milestone.

Is fintech reeling under new challenges? (DNA India), Rated: A

The super exciting fintech segment in the start-up ecosystem has been encountering a host of challenges in the recent past. Following a move by the Reserve Bank of India (RBI) to start a regulatory sandbox for the beta-testing of new fintech products in a controlled environment prior to their release, comes the issue of a liquidity crunch in the non-banking finance companies (NBFC) space.

STEADY GAINS

  • Over 1,300 new fintech ventures had cropped up in the sector between 2015 to 2018, according to a data
  • Fintech is a broad sector. It is wrong to connect the NBFC crisis to the whole fintech space
  • For a peer-to-peer (P2P) lending player who is dependent on retail investors for funding loans, maintaining trust is the key challenge
Asia

Singapore is ‘actively studying’ virtual banking licences, says country’s prime minister (SCMP), Rated: AAA

Singapore is actively studying whether to allow companies with no banking parentage to set up virtual banks, paving the way for start-ups like on-demand services operator Grab to potentially enter the formal financial services industry.

KoinWorks Closes $ 12M In Series B Funding Round (PYMNTS), Rated: A

KoinWorks announced that it has raised $12 million in a Series B funding round. The round was co-led by EV Growth and Quona Capital, with participation from existing investors. The funding will be used to expand the KoinWorks team and partnerships, as well as further develop the company’s systems and technology.

Business environment needs strong Gov’t actions: VBF 2019 (Vietnam News), Rated: A

The American Chamber of Commerce in Việt Nam (AmCham) expressed its desire for a highly standardised, transparent and stable business environment so all investors are treated equally.

Concerns were also raised by the Korea Chamber of Commerce in Việt Nam (Kocham) and the Japanese Chamber of Commerce and Industry in Việt Nam (JCCI).

The limit of foreign ownership in local financial firms has also prevented fintech and P2P firms from calling for foreign capital, making them unable to hire talent and keeping their businesses less competitive.

PT ALAMI Fintek Sharia (Alami) came in as the runner-up position in the TaqwaTech Pitch Pit organised by Gobi Partners Venture Capital.

Three companies from Indonesia qualified for the top ten, namely Alami, as well as two marketplace startups for pilgrimage services PergiUmroh.com and Umroh.com.

Authors:

George Popescu
Allen Taylor

The post Thursday June 7 2019, Weekly News Digest appeared first on Lending Times.

Thursday June 7 2019, Weekly News Digest

economic downturn

News Comments Today’s main news: SoFi completes first rated pass-through certificates offering. Y Combinator backs Monzo for U.S. expansion. Funding Circle set for largest securitization. Dianrong shifts strategy. Funding Circle inks 50M Euro deal with Avida Finans. Open raises $30M. Today’s main analysis: Chance for recession is rising (A MUST-READ PeerIQ analysis). Today’s thought-provoking articles: […]

The post Thursday June 7 2019, Weekly News Digest appeared first on Lending Times.

economic downturn

News Comments

United States

United Kingdom

International

China

APAC

News Summary

United States

SoFi Completes First Offering of Rated Pass-Through Certificates (PR Newswire), Rated: AAA

SoFi announced today that it completed a $200 million offering of post-graduate student loan asset-backed certificates issued by SoFi Alternative Trust 2019-C (SAT 2019-C). The Certificates are rated single-A by DBRS and mark the first rated pass-through certificate transaction issued by SoFi and the first publicly rated student loan pass-through transaction in the securitization market.

Unlike traditional student loan ABS transactions, SAT 2019-C does not use overcollateralization or bond subordination as forms of credit enhancement.  The A rating assigned to the certificates by DBRS reflects the strong credit attributes of the borrowers. The portfolio has a weighted average credit score of 783 and a weighted average annual income of $175,746.

Y Combinator says Monzo’s community will help it succeed in the US where others have failed (AltFi), Rated: AAA

Leading US startup backer Y Combinator has become the latest high-profile backer of Monzo, on the eve of the bank’s American expansion.

Today Monzo confirmed it had raised £113m in a round led by Y Combinator’s Continuity fund, along with Latitude, General Catalyst, Stripe, Passion Capital and others.

Recession Risks; OCC Charter + Big Tech (PeerIQ), Rated: AAA

Weak economic data continue – inflation expectations tumble, manufacturing has moved into recession, and the 10y/3m yield curve remains mildly inverted. Although the FOMC took no rate action this week, dovish signaling has led market participants to expect a 70% chance of 3 or more rate cuts in 2019.

Source: WSJ, PeerIQ

CPI Since 1879 During Business Cycles

Source: Deutsche Bank, PeerIQ

How A Former J.Crew And Pillsbury Exec Is Applying His CFO Expertise At A Financial Unicorn (Forbes), Rated: AAA

Scott Rosenberg: Kabbage represented a great opportunity for me to apply my prior experiences and help architect the future vision of a fast-growing company. Every role in my career has allowed me to lead or influence multiple divisions within a company, which makes my operational approach similar to that of a COO or General Manager. Beyond leading the CFO office in previous roles, I led Marketing at J. Crew, Operations at Pillsbury and most recently was the President of Purchasing Power. This broad vantage point lets me ensure financial growth as the CFO, but also identify opportunities to establish operational efficiencies more broadly across the organization. I take the same approach at Kabbage as I lead multiple disciplines, including Capital Markets and Legal. It encourages transparency across teams which allows us to move faster. With more than 175,000 customers accessing over $7.0 billion to-date, it’s an exciting role to drive hyper growth and deliver the best products and experiences for U.S. small businesses.

According to a survey released today by Kabbage that polled more than 500 companies across multiple industries, 80% of American entrepreneurs said they felt confident in their readiness to weather another economic crisis.

H&M and Klarna Grow Partnership to US (Yahoo! Finance), Rated: A

H&M and Klarna announced that they have expanded their current partnership agreement to also include the US market, in the development of an unrivalled payments and shopping experience across touchpoints. Together, H&M and Klarna are aiming at further integrating H&M’s digital and physical stores to give customers a seamless, personalised and engaging shopping experience no matter where, when and how they shop.

This Commercial Real Estate Marketplace Provides Direct Investment Opportunities (TheStreet), Rated: A

CrowdStreet, which launched in 2014, is the leading player in the fast-growing field of online commercial real estate investing. The company’s online Marketplace allows individual investors to reap the rewards of investing in the $6 trillion commercial real estate sector, investing in everything from multifamily apartment buildings to self-storage facilities and senior-living centers.

The average return on the first 14 deals financed on CrowdStreet’s platform — those which have fully wrapped up, yielding final returns to investors — is 31.7%, with a 1.6x equity multiple and a holding period of two years.*

MassMutual, CommonBond Team Up to Tackle Student Debt in the U.S. (Mass Mutual), Rated: A

Total student loan debt in the U.S. is now over $1.5 trillion, which prevents many people from passing financial milestones and saving for the future.

Massachusetts Mutual Life Insurance Company (MassMutual) has teamed up with CommonBond to offer a new student loan refinancing program through CommonBond with a rate advantage to help people take control of their student debt. This program – available online to all individuals with student debt today — is among the first of its kind in the student lending and insurance industries. The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual’s network of financial advisors, currently 9,000 strong.

Ocrolus Raises $ 24M to Modernize Workflows with a Human Touch (PR Newswire), Rated: A

Ocrolus today announced $24M in Series B funding led by Oak HC/FT, a premier venture growth equity fund with deep fintech expertise. Ocrolus is powered by an elegant blend of artificial intelligence and crowdsourced human quality control, enabling firms across the financial sector to automate high-stakes business processes with precision. The company will use its new funding to automate underwriting workflows for lenders and banks, and expand into new verticals.

How Citizens Bank is rethinking mobile and online banking (American Banker), Rated: A


Robos are getting political. Will Wall Street follow? (FinancialPlanning), Rated: A

Forged in the wake of the financial crisis and political movements like Occupy Wall Street, digital advisory firms have become decidedly open about their political agendas. By advocating for the democratization of financial advice and stronger consumer protections, digital investment platforms have become the face of progressive politics in the market. That’s attractive to young investors — assets managed on digital platforms are expected to soar to $1.26 trillion by 2023, according to a report by Aite Group.

Cross River gets onboarding system it coveted in fintech deal (American Banker), Rated: A

The $1.5 billion-asset bank agreed on Monday to buy Seed for an undisclosed amount. The 5-year-old fintech offers a mobile account for small businesses, complete with bill payment, remote deposit and an attached debit card.

“It’s About Time” Documentary Sheds Light on Earned Wage Access (PR Newswire), Rated: A

Today, PayActiv, Inc., the leader in employer-sponsored, holistic financial wellness service for employees, unveiled its documentary made in collaboration with Early Light Media and Roundtable Companies about the direct benefits of timely earned wage access. Now available at ItsAboutTimeTheFilm.com, the documentary, titled It’s About Time, looks at pay timing and its correlation with epidemic financial stress being experienced by millions of working Americans.

Fintech MX gets $ 100 million in funding to expand operations (American Banker), Rated: B

The data company MX is set to announce Tuesday an infusion of $100 million from a host of partners, including National Bank of Canada and Washington Federal.

Neighborhood Ventures Closes on Third Investment Property Near Old Town Scottsdale (Yahoo! Finance), Rated: B

Arizona’s first real estate crowdfunding company, Neighborhood Ventures, recently closed on its third investment property, an eight-unit apartment building in Old Town Scottsdale. Ninety Arizona residents invested a total of $550,000 into the purchase of the property, which will be renovated with a plan to operate it as an Airbnb.

United Kingdom

Funding Circle set for its largest ever securitisation (P2P Finance News), Rated: AAA

DEUTSCHE Bank has unveiled more details on Funding Circle’s fourth securitisation, revealing it will be the highest-value package of loans it has offered so far.

The investment bank, which has been mandated as sole arranger and lead manager, said the deal will comprise 3,030 loans, with an aggregate balance of £244m and an average interest rate of 9.91 per cent.

FTSE 250 movers: Funding Circle falters (ShareCast), Rated: A

London’s FTSE 250 fell 0.14% lower to 19,260.07 in afternoon trade on Wednesday, with Funding Circle leading the index lower.

The peer-to-peer lending marketplace was accompanied by fellow financial stocks, with Amigo HoldingsCharter Court Financial ServicesPlus500 and Onesavings Bank all featuring among the top fallers.

OakNorth completes £60m facility for three new retirement schemes (Development Finance Today), Rated: A

OakNorth has completed a £60m loan to Affordable Housing & Healthcare Group (AHH) for the development of three new affordable retirement living schemes.

He said that in retirement he will continue to be a school governor, and that he intended to devote more time to the two charities he is involved with (the other one being Lendwithcare – peer to peer lending to entrepreneurs in a number of Third World countries).

China

Top Chinese peer-to-peer lender to shift strategy after latest fundraising (ETPrime), Rated: AAA

Wu Yujian and Liu Jiefei Dianrong, one of China’s largest peer-to-peer (P2P) lending platforms, said it’s planning a shift in strategy to focus on cooperating with traditional financial institutions as China’s regulators continue to tighten their grip over the industry. The move was revealed on Thursday as the Shanghai-based company confirmed (link in Chinese) it had completed a new

Government Asks Victims of P2P Fraud Case to Register for Compensation (Caixin Global), Rated: A

An intermediate court in Beijing overseeing the Ezubo case said on Wednesday that victims could detail their cases to authorities at local registration sites between July 2 and Aug. 30.

European Union

A very Nordic fintech revolution (Pitchbook), Rated: AAA

Europe is a hotbed of activity when it comes to fintech investments, as the sector continues to mature. Year after year, billions of euros are plowed into promising startups, with last year seeing more than €2.8 billion raised across 438 deals, per the PitchBook Platform.

Below is a list of some of the most innovative fintech companies founded in the Nordics, together with noteworthy investments and backers.

EU Moves Closer To New Bloc-Wide Crowdfunding Rules (Law360), Rated: A

European lawmakers floated new rules on Wednesday to make it easier for businesses and investors to ask the public to fund their projects, bringing the European Union a step closer to forging a common set of rules for national regulators overseeing crowdfunding.

International

Funding Circle strikes €50m loans deal with Sweden’s Avida Finans (AltFi), Rated: AAA

Funding Circle has struck a deal with Swedish finance house Avida Finans to lend an initial €50m to small firms in Germany and the Netherlands this year.

How DeFi startups are providing an alternative to traditional lending (Sociable), Rated: AAA

DeFi lending startups are leveraging blockchain to shake-up the traditional money lending industry.

Digital Assets Kept as Collateral

Salt is one company which has been borne out of the cryptocurrency sector.  Through its platform, digital assets are kept as collateral but returned upon repayment of the loan.

Automated P2P Lending Agreements on Blockchain

ETHLend is another DeFi platform built on top of the Ethereum network.  It creates a means for lenders and borrowers from around the world to establish peer to peer lending agreements over blockchain.

Blockchain Catering to the Unbanked in Latin America

A Blockchain-Driven Lending Circle

A completely different approach is being taken by startup, WeTrust.

When it comes to lending, users can establish a ‘lending circle’ on the platform.

Australia

P2P lender expands presence in third-party space (TheAdviser), Rated: AAA

Peer-to-peer lender RateSetter has announced its new partnership with Choice Aggregation Services (Choice), providing accredited brokers with access to the lender’s personal loan offerings.

P2P lender joins aggregator panel (Broker News), Rated: A

The partnership will make RateSetter’s unsecured personal loan product available to Choice Aggregation Service’s network of more than 1,600 brokers, in line with the trend towards servicing a more diverse array of client needs.

Recognising SMEs’ contribution to the economy (AustralianBroker), Rated: A

Prospa research has highlighted how lending to small business positively affects the economy through contributing to GDP and creating and supporting jobs.

Data released this week by accounting software firm Xero, analysed invoices from 150,000 Australian SMEs and concluded that 53% of trade credit invoices are paid late by big business suppliers and customers – on average 23 days after their due date. Squeezing SMEs, Xero calculates these late payments are worth $115bn.

Technology boosting financial literacy (Financial Review), Rated: A

Technology will need to play a bigger role in boosting the financial literacy of Australians as a large number of financial planners leave the profession, says Bronny Speed, financial advice leader at Chartered Accountants Australia New Zealand.

Speed says as increased educational and licensing standards for Australia’s 29,000 financial advisors will push some out of the market, it will leave a gap in the profession’s ability to provide financial advice and boost literacy.

India

India’s Open ‘neo-bank’ raises $ 30 million to help businesses automate their finances (TechCrunch), Rated: AAA

Open, a Bangalore-based startup that operates a “neo-bank” to help businesses automate and run their finances, has bagged $30 million in a new funding round as investors look to replicate a globally tried and tested business idea in emerging markets.

Open Banking is Disrupting the Traditional Banking System and Indian Neo Banks are Gearing up for it (Entrepreneur), Rated: A

In today’s age of digitisation, it is all about the customer and improving his/her experience. To achieve this goal, banks and fintech companies have to support each other. This change in the ecosystem has invented the concept of neo banking which can be rightly dubbed as the new era of the banking industry.

Govt should look at alternative financing option like P2P lending to solve MSMEs’ credit woes (MENAFN), Rated: A

As Budget is about to come in few weeks, it’s time for the government to look at alternative financing option like P2P lending to solve the credit crisis in Micro Small and Medium Enterprises (MSME) sector, said Rajiv M Ranjan, Founder & CMD, Paisa Dukan.

While sharing the budget expectations, he said, ‘Getting access to institutional credit has been one of the major problems of the MSMEs and to maintain the wealth of the Indian middle class, P2P lending can turn a milestone.

Is fintech reeling under new challenges? (DNA India), Rated: A

The super exciting fintech segment in the start-up ecosystem has been encountering a host of challenges in the recent past. Following a move by the Reserve Bank of India (RBI) to start a regulatory sandbox for the beta-testing of new fintech products in a controlled environment prior to their release, comes the issue of a liquidity crunch in the non-banking finance companies (NBFC) space.

STEADY GAINS

  • Over 1,300 new fintech ventures had cropped up in the sector between 2015 to 2018, according to a data
  • Fintech is a broad sector. It is wrong to connect the NBFC crisis to the whole fintech space
  • For a peer-to-peer (P2P) lending player who is dependent on retail investors for funding loans, maintaining trust is the key challenge
Asia

Singapore is ‘actively studying’ virtual banking licences, says country’s prime minister (SCMP), Rated: AAA

Singapore is actively studying whether to allow companies with no banking parentage to set up virtual banks, paving the way for start-ups like on-demand services operator Grab to potentially enter the formal financial services industry.

KoinWorks Closes $ 12M In Series B Funding Round (PYMNTS), Rated: A

KoinWorks announced that it has raised $12 million in a Series B funding round. The round was co-led by EV Growth and Quona Capital, with participation from existing investors. The funding will be used to expand the KoinWorks team and partnerships, as well as further develop the company’s systems and technology.

Business environment needs strong Gov’t actions: VBF 2019 (Vietnam News), Rated: A

The American Chamber of Commerce in Việt Nam (AmCham) expressed its desire for a highly standardised, transparent and stable business environment so all investors are treated equally.

Concerns were also raised by the Korea Chamber of Commerce in Việt Nam (Kocham) and the Japanese Chamber of Commerce and Industry in Việt Nam (JCCI).

The limit of foreign ownership in local financial firms has also prevented fintech and P2P firms from calling for foreign capital, making them unable to hire talent and keeping their businesses less competitive.

PT ALAMI Fintek Sharia (Alami) came in as the runner-up position in the TaqwaTech Pitch Pit organised by Gobi Partners Venture Capital.

Three companies from Indonesia qualified for the top ten, namely Alami, as well as two marketplace startups for pilgrimage services PergiUmroh.com and Umroh.com.

Authors:

George Popescu
Allen Taylor

The post Thursday June 7 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 9 2019, Weekly News Digest

leveraged loans

News Comments Today’s main news: SoFi launches ETF for gig market. LendingClub’s higher fees lead to earnings win. CrowdStreet hits $500M in real estate investments. Funding Circle offers manual lending in foreign markets. Marcus delays German launch. Today’s main analysis: LendingClub, GreenSky, and OnDeck earnings. Today’s thought-provoking articles: GDP growth continues. The pros and cons […]

The post Thursday May 9 2019, Weekly News Digest appeared first on Lending Times.

leveraged loans

News Comments

United States

United Kingdom

International

Other

News Summary

United States

SoFi launches gig-focused ETF (TechCrunch), Rated: AAA

Today, the company announced a new exchange-traded fund (ETF) product focused on the gig economy. GIGE, which trades on Nasdaq, is an actively managed fund advised by Toroso Investments that allows investors to capitalize on this hot sector of the economy. Toroso offers a range of services around creating and managing ETFs.

The company also announced the creation of an ETF focused on high-growth stocks. That ETF, which trades as SFYF on the NYSE, is designed to identify and capture the growth of the top 50 of the 1,000 largest publicly traded issues.

LendingClub Records Higher Transaction Fees on the Way to Earnings Beat (TheStreet), Rated: AAA

Online-loan marketplace LendingClub (LC – Get Report) was rising more than 14% Wednesday to $3.70 after reporting a surprise profit in the first quarter, though the company’s guidance was short of expectations.

LendingClub reported a 22% increase in transaction fees that led to a 15% increase in revenue to $174.4 million and adjusted earnings of 2 cents per share. Wall Street was expecting the company to report revenue of $169.4 million and a loss of 3 cents per share.

Higher Fees Drive LendingClub’s Earnings Beat (PYMNTS), Rated: A

The marketplace lending platform reported adjusted net loss of $11.25 million, or 3 cents a share — red ink, but less than the 4 cents per share loss analysts were forecasting.

That stronger-than-expected revenue outcome was driven by stronger-than-expected loan originations during the first quarter, which rose 18 percent year-on-year to $2.73 billion. That increase in originations drove an increase in transaction fees, which were up 22 percent to $135.4 million.

For the second quarter, the company expects net revenue between $185 million and $195 million, with the high end slightly below the average analyst estimate of $196.7 million.

Why LendingClub Stock Leapt 12.4% Today (The Motley Fool), Rated: B

Wedbush believes LendingClub’s improving operating efficiency will help it produce an adjusted EBITDA margin of 20% by the end of 2019. The firm also expects LendingClub to grow revenue by 12%-15% annually in the coming years.

LendingClub, GreenSky and OnDeck Q1 2019 Earnings Results (Lend Academy), Rated: AAA

LendingClub

LendingClub rounded out 2018 originating the most loans in the company’s history at $10.9 billion. With their Q1 2019 results, the company is off to a great start in 2019. Originations were $2.7 billion, up 18% year over year. The company reported that application growth was 31% over the same period.

Source: Lend Academy

Net revenues came in above high end guidance of $172 million at $174.4 million for the quarter, up 15% year over year. GAAP Consolidated Net Loss was $(19.9) million, compared to $(31.2) million in Q1 2018. Finally, the company delivered adjusted EBITDA of $22.6, up 47% year over year and well above their projections of $13-$18 million. LendingClub is on track to become adjusted net income profitable over the second half of 2019.

GreenSky Q1 2019 Earnings

In Q1 2019 GreenSky increased transaction volume on the platform 20% to $1.2 billion. They also grew revenue 22% to $103.7 million form the prior year period. GAAP Net Income in Q1 2019 was $7.4 million. The company had aggregate commitments of $11.8 billion from nine bank partners of which $4.5 billion remain unused. The company ended the quarter with $268 million in cash.

Source: Lend Academy

OnDeck Q1 2019 Earnings

Originations fell for the quarter to $636 million compared to $658 million for the previous quarter. This was attributed to OnDeck tightening their credit box during the quarter. The company shared that their line of credit product reached an all time high of $150 million for the quarter.

Strong GDP Growth Continues (PeerIQ Email), Rated: AAA

Unemployment fell to 3.6% – the lowest level since 1969. The last time unemployment levels were this low, the first humans landed on the moon. The inflation rate was 5.5% The DJIA was 800. The average cost of a new home was $15K, and the average salary was $9K. A gallon of gas cost a scorching thirty-five cents.

Source: PeerIQ

On the regulatory front, Senator Durbin introduces a bill to create a 36% APR Cap on Consumer Loans. The 36% cap matches a similar rate for loans offered to service members and is superseded by strict state-level caps, and offers no preemption of the patchwork of state laws for digital models.

Online marketplace reaches $ 500M in online real estate investments (Real Estate Weekly), Rated: AAA

CrowdStreet, Inc., a technology provider with an online marketplace for direct equity investment in commercial real estate (CRE), announced that in March it crossed the $500 million threshold in total online investments with a record number of new individual investors.

The news accompanies a record quarter with over $75 million invested.

The Pros And Cons Of Leveraged Loans (Seeking Alpha), Rated: AAA

Corporate America has taken on substantially more debt in the aftermath of the Great Recession. Today, the underlying structure of that leverage looks different. Fewer bonds are being issued. Bank loans to indebted companies now match junk bonds in total issue. This article will review the market for leveraged loans – a marketplace that has grown tenfold in the new millennium and has passed the $1 trillion threshold.

In 2017, nearly 70% of levered loans were refinanced at lower interest rates. That creates a lot of turnover.

BlackRock is building a team of 30 data scientists to create a next-generation stock-lending platform (Business Insider), Rated: A

BlackRock founded a Palo Alto, California-based group called AI Labs last year, directed by the Stanford professor Stephen Boyd. Now, according to job postings reviewed by Business Insider, the 30-member team is tackling projects ranging from next-generation lending platforms to automating human tasks.

ONLINE LENDER SETTLES WITH FTC FOR .85 MILLION (Lawyers and Settlements), Rated: A

Avant LLC, the online lending phenomenon which had previously been hailed as a “breakout financial success story,” has agreed to settle a lawsuit brought by the Federal Trade Commission (FTC) for $3.85 million. Although the lawsuit largely relied on a different federal statute, it shares much of the consumer financial protection zeal of the excessive overdraft fee lawsuits recently leveled against credit unions, banks and payday lenders. But it also reveals shortcomings in federal consumer protection laws.

Providing Additional Liquidity to Some Delinquent Borrowers Can Actually be a Win-Win (Yahoo! Finance), Rated: A

Consumers who fall behind on credit payments may find an unexpected lifeline—another loan from their lender. A new TransUnion (TRU) study found that, in some instances, both lenders and consumers can benefit when additional loans are extended to customers during difficult times. The findings were released today during the 2019 TransUnion Financial Services Summit, attended by more than 300 executives from across the globe.

In the study, 31% of delinquent borrowers experienced improvement on one or more of their delinquent debts when securing a new personal loan. In addition, 24% of borrowers also performed well on the new loan.

Monzo plots US launch as soon as this summer (The Telegraph), Rated: A

Monzo, the mobile banking app known for its coral coloured debit cards, is planning to launch in America as soon as this summer, The Daily Telegraph has learnt.

The £1bn start-up challenger bank is in the process of hiring executives to lead its product and marketing arms in the US. It is expected that the company will choose Los Angeles as its base.

Affirm, Kabbage, Tala — The Big Three of Online Loans (Bitnews Today), Rated: AAA

Affirm is a company that provides payday loans online and at points of sale. To receive an approval decision, a potential Affirm client does not have to wait long — the company’s scoring system processes its questionnaire, profiles in social networks and other documents very fast.

Source: Bitnews Today

KABBAGE

Kabbage also provides loans online using an automated system. However, the clients of this company are not ordinary consumers, but owners of SMEs. When the founders of Kabbage decided to launch a new project in 2009, there was a gap between personal loans for consumers and credit lines allocated to small businesses in the lending system.

Source: Bitnews Today

TALA

  • the initial idea of the company’s founder Shivani SIROYA to start her own business was that “the existing credit system works very poorly”;
  • to assess the creditworthiness, Tala uses its own scoring system, which examines a set of data about the potential borrower, using machine learning technology and big data;
  • the intellectual service works in automatic mode: it investigates, makes a decision, issues loans.
Source: Bitnews Today

Resolve launches as a B2B online financing service (Digital Commerce 360), Rated: A

Financial technology company Affirm is betting that what works for online retailers will also work for B2B merchants who want to offer online financing to customers.

Affirm has launched Resolve as a B2B version of an online financing service that Affirm provides to retailers.

Kabbage Teams with BTEA to Fuel Access to Funding for Women- and Minority-Owned Businesses (Finanzen), Rated: B

Kabbage, Inc., a cash flow technology and automated lending platform for small businesses, has formed a strategic alliance with New York’s largest contractor association, the Building Trades Employers’ Association (BTEA), to provide access to fast and flexible small business funding for BTEA members through the Kabbage platform. The alliance will support women and minority-owned business enterprise (WMBE) contractors who often have difficulty accessing the funding required to procure contracts for New York’s largest construction projects.

The alliance between BTEA and Kabbage provides BTEA’s 1,300 contractor companies, including more than 100 MWBE contractor members, the opportunity to access lines of credit as high as $250,000 and attain greater financial capacity.

In The Face Of Growing Fraud Threats, Finance Firms Should Look At Managed Security (Forbes), Rated: AAA

Financial institutions face a complex array of threats — from the immediate such as synthetic identities which have been used to defraud individual firms multiple times.

In 2018, more than 43,000 breaches across all industries involved the use of customer credentials stolen from botnet-infected clients, the Accenture report said.

Read the full report here.

Fig Loans Becomes First-Ever FinTech to Receive CDFI Certification (Yahoo! Finance), Rated: A

Fig, a mission-driven FinTech company that offers credit building alternatives to predatory loans for low-income borrowers, has become the first-ever FinTech company to become both a Certified B Corporation and federally certified Community Development Institution (CDFI). VilCap Investments and Techstars are early Fig Loans investors.

CFPB plan a mixed bag for debt collectors (American Banker), Rated: A

The Consumer Financial Protection Bureau released a plan Tuesday to restrict how often debt collectors can call borrowers about unpaid credit and to allow consumers to opt out of other types of communications.

The proposal to overhaul the debt collection industry would limit phone-based collection attempts for the same consumer to seven calls per week. Debtors could also opt out of allowing collectors to contact them via voice mail, email and text messages.

Read the full text of the proposed rule here.

Behind The Scoop: An inside look at Genesis’ lending business (The Block Crypto), Rated: A

  • $250m worth of outstanding loans gives it an estimated 2/3 share of the total outstanding crypto loan pie
  • Genesis has seen its total USD value of borrows increase 35% QoQ in 1Q19, vs. lending protocols which saw a ~20% decline; Genesis total borrow volumes were almost an order of magnitude greater than all of borrows on lending protocols in 1Q19

Ocrolus, inFactor Partner on End-to-End Automation for Merchant Cash Advance Lenders (Ocrolus), Rated: B

Ocrolus today announced a partnership with inFactor, the financing platform that brings clarity and security to small business financing. This partnership combines two powerful technology solutions to drive end-to-end underwriting automation for Merchant Cash Advance (MCA) lenders

United Kingdom

Funding Circle still offers manual lending in other markets (P2P Finance News), Rated: AAA

FUNDING Circle is still offering investors the option to self-select their loans in its three overseas markets, its annual report revealed last month.

The peer-to-peer business lender scrapped its manual lending option in the UK in 2017, saying that its auto-invest product ensures better diversification.

Digital Lending Platform Esme Loans Hits £50 Million of Lending to UK Businesses (Crowdfund Insider), Rated: A

Esme Loans, the NatWest backed standalone digital lending platform for SMEs, announced last week it has hit £50 million of lending to UK businesses. The online lender reported that it has seen a continued period of strong growth, following an uplift in lending of 337% between 2017 and 2018.

Goldman Sachs’ digital savings account Marcus just reached a UK milestone (AltFi), Rated: A

Just eight months since launching in the UK, Goldman Sachs’ digital savings account has attracted a quarter of a million customers.

Investors are getting more comfortable with the P2P ISA (AltFi), Rated: A

In the 2016/17 tax year just 5,000 customers opened IFISAs with a total £36m subscriptions (these figures were disputed by some platforms as being too low). In the following 2017/18 tax year this shot up 31,000 investors backing the IFISA with £290m subscribed in the tax year and a total of £366m in outstanding balances in IFISAs at 5 April 2018.

What is the best provision fund structure? (P2P Finance News), Rated: A

PROVISION FUNDS are designed to cover peer-to-peer investors in the event that a borrower defaults on their loan, but the way they are funded and operated varies widely across platforms. So what should investors be looking for and is there an optimal structure to reduce their chances of losses?

One key difference is whether pay-outs from reserve or provision funds are automatic or discretionary.

RateSetter is credited with the invention of the provision fund concept, which has been part of its business model since it launched in 2010. It is funded by borrowers’ repayments and money is automatically reimbursed to investors if loans go into arrears.

Tandem Recognized as Best New Digital Bank (Crowdfund Insider), Rated: B

Challenger bank Tandem has been recognized by CFI.co (Capital Finance International) as the “Best Neo Bank UK 2019.”

OakNorth launches mortgages for HNWIs, SMEs, and clients with atypical income streams (Fintech Finance), Rated: B

OakNorth – the bank for entrepreneurs, by entrepreneurs – has today announced it is entering the retail mortgage market with lifetime tracker rate products, aimed at affluent individuals with atypical sources of income.

The six largest banks in the UK dominate 77 percent of the mortgage market, but often find it commercially unviable to create bespoke mortgages for these individuals as they lack the appropriate cost base and expertise to cater to them. These individuals therefore require more bespoke lending solutions, and as a lender that has provided over £3bn in bespoke loans to UK entrepreneurs since its launch, OakNorth has the necessary expertise and tailored credit analysis models to cater to this unique market niche.

China

Jiayin Group Readies $ 40 Million U.S. IPO (Seeking Alpha), Rated: AAA

Jiayin Group (JFIN) has filed to raise $40 million in an IPO of ADSs representing underlying Class A shares, per an amended registration statement.

According to a 2017 Oliver Wyman report on Chinese FinTech firms, outstanding loan balances for online peer-to-peer lending platforms have exploded in recent years, from RMB 31 billion ($467 million) in January 2014 to RMB 856 billion ($129 billion) by January 2017.

P2P lending in crisis as regulatory bubble pops (Technode), Rated: A

Chinese peer-to-peer (P2P) lender Dianrong, once hailed as the “LendingClub of China,” appears to be in crisis following an announcement that it is closing around two-thirds of its offline branches and laying off as many as 2,000 employees. At around the same time, it was accused of falling behind on wages and severance payment. In mid-April, the company reportedly sought $100 million in investment to meet new capital requirements.

European Union

Goldman Delays Marcus’ Germany Launch (PYMNTS), Rated: AAA

Goldman Sachs has decided to delay the German launch of its consumer bank Marcus until 2020.

International

International P2P Lending Volumes April 2019 (P2P-Banking), Rated: AAA

The total volume for the reported marketplaces in the table adds up to 571 million Euro.

Milestones achieved this month (total volume since launch):

  • Mintos crossed 2 billion EUR
Source: P2P-Banking

This credit card won’t let you buy anything else after you’ve hit your annual carbon limit (Fast Company), Rated: A

Doconomy is launching two versions of the card later this year. One just tracks your carbon footprint as you spend, and the other, called Do Black, takes the additional step of setting a hard limit on your footprint for the year. Initially, the data used to calculate the impact of each purchase will be imprecise—the system pulls the category code of a merchant that classifies it as a particular kind of store, then makes a calculation based on the general carbon footprint of the industry, whether you’re buying something from a fast-food joint, a clothing store, or an airline. The limit is based on a country-specific calculation of how much carbon each citizen can emit to stay on track with the 2030 goal to cut emissions in half.

Others are working on similar solutions; a startup nonprofit called Poseidon Foundation is beginning to work with retailers to track the impact of specific purchases and let customers instantly buy a carbon offset equal to their emissions. Ben and Jerry’s tested the concept at an ice cream shop in London last year.

Over 50 Banks, Firms Trial Trade Finance App Built With R3’s Corda Blockchain (CoinDesk), Rated: A

ABN Amro, Standard Chartered, ING and around 50 other banks and companies have participated in tests of a trade finance application called Voltron.

The tests saw firms across 27 countries use Voltron, which was developed by R3 using its Corda platform, to make simulated letter of credit transactions.

Real Estate Tokens: What They Are and How to Invest (Bitcoin Market Journal), Rated: A

Put simply, a real estate token is a virtual asset used to represent ownership of land, apartments, homes, and various other real properties. The intent is to eliminate antiquated and outdated methods of dealing with real estate. Instead, buyers and sellers complete transactions with digital tokens.

Currently, it can be a challenge to find the right place to invest in real estate tokens; however, there are a few platforms that can get you started.

Harbor

The Harbor platform provides users with a way to trade real estate on a blockchain network. Assets available on Harbor include private REITs, real estate funds, building ownership, and land. Using blockchain technology means Harbor provides transparency, efficiency, fractional ownership, and, of course, liquidity.

Slice

Additionally, Slice gives users the ability to hold, trade, or liquidate their tokens with its built-in security exchange platforms. The platform is available to anyone who has $10,000 he or she is willing to invest.

Meridio

Meridio is a platform that gives its users the ability to invest in shares of real estate on the blockchain. Through Meridio, properties are split into digital shares, which gives investors and owners a way to interact with one another seamlessly.

Bitfinex Releases Whitepaper to Confirm $ 1 Billion Initial Exchange Offering (CryptoGlobe), Rated: A

Cryptoasset exchange Bitfinex has confirmed that it is planning to raise $1 billion through an initial exchange offering (IEO).

Dong has also been accepting pre-orders for Bitfinex’s upcoming token sale through his crypto-lending application Renrenbit. The well-known investor had reportedly taken pre-orders from users who wanted to participate in the public phase of Bitfinex’s upcoming $1 billion token sale, even before IFinex published an official whitepaper for it.

Cred Partners with Tron and Bitcoin.com to Provide Crypto Lending and Borrowing Services (Bitcoin Exchange Guide), Rated: A

Bitcoin.com has announced a partnership with Cred in which Bitcoin.com users will earn interests of up to 10% on their crypto holdings. Cred is a crypto borrowing and lending company whereas Bitcoin.com is an information portal that has over 4 million Bitcoin wallets.

Fvndit Launches $ 10M Equity-Back Digital Security Offering (Financial Buzz), Rated: A

Fvndit, Inc. (“Fvndit”), a California- and Vietnam-based fintech company, today announced the launch of a $10M digital security offering. Proceeds from the raise will be used to further propel Fvndit’s business objectives as the market leading SME-focused crowd-based funding platform in Vietnam.

Its wholly-owned subsidiary, eLoan, JSC (“eLoan”), operates an online Peer-to-Peer (P2P) funding and investing marketplace in Vietnam, its current local market. Today, SMEs account for more than 41% of Vietnam’s GDP (of $241B USD) and 97% of all enterprises but still remain largely neglected by traditional banks with 70% of them do not have access or have difficulty in accessing credit. eLoan was launched in late 2017 with a clear mission – to make credit more simple and investing more rewarding.

TomoChain teams up with Constant to bring first stablecoin to its platform (Cryptoninjas), Rated: B

Creci Wins its Category at the Innovate Finance Global Summit (PR Web), Rated: B

Creci, an early stage start-up, with headquarters in Hollywood, Florida and offices in Medellin and Bogota, was selected on April 30, 2019, as the category winner for Peer-to-Peer Lending, Alternative Funding, and SME Lending at the Innovate Finance Global Summit in London.

Australia

YOZO a quick and open answer to business lending maze (Mirage News), Rated: A

YOZO is redefining lending for small business by offering a transparent and seamless experience for their borrowing needs. Firstly, by taking the guessing game out of an increasingly frustrating question, “how much can my business borrow?”. YOZO helps small business gauge their borrowing capacity in under a minute. Secondly, by providing an intuitive online experience to apply and receive funds in 48 hours for approved customers.

Southeast Asia

Brankas wants to bring Southeast Asia’s banks and e-commerce into the digital era (TechCrunch), Rated: AAA

Fintech continues to be among the biggest topics driving startups and investment in Southeast Asia. The region’s “internet economy” is forecast to grow massively as its 600 million people increasingly come online — already Southeast Asia has more internet users (350 million) than the U.S. has people, but developing a robust payment landscape underpins those heady growth forecasts.

Brankas,  an Indonesia-based startup that operates regionally, is one such young company — it operates a platform that gives banks and financial companies the tech to roll out digital products and embrace online services.

Singapore Fintech Firm Heading into Indonesia (Retail News), Rated: A

Following a successful Series B funding round, SME lending platform Validus Capital is launching in Indonesia. SME lending platform Validus Capital has launched in Indonesia, its first Southeast Asian market outside its home country of Singapore, the firm announced in a media release on Thursday.

Latin America

Brazil fintech Nubank opens Mexico office as it seeks Latam expansion (Reuters), Rated: AAA

Brazilian fintech firm Nubank will open an office in Mexico on Tuesday, an initial step in a potential expansion into other Latin American countries, a company executive said.

Nubank, a six-year-old startup that has raised $400 million from investors such as China’s Tencent Holdings Ltd, Sequoia Capital, Tiger Global Management and Kaszek Ventures, will start Mexican operations with 20 employees, Nubank executive and co-founder Cristina Junqueira said in an interview.

Authors:

George Popescu
Allen Taylor

The post Thursday May 9 2019, Weekly News Digest appeared first on Lending Times.

Thursday April 18 2019, Weekly News Digest

digital banking

News Comments Today’s main news: Funding Circle sets new high on loans under management. SoFi partners with Lemonade, Root. Salary Finance hires SoFi co-founder, raises $32.8M. Dianrong to raise $100M. Klarna may be headed to the stock market. Linked Finance sees record quarter. Today’s main analysis: European online alternative finance grows 36%. (A MUST-READ REPORT […]

The post Thursday April 18 2019, Weekly News Digest appeared first on Lending Times.

digital banking

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

SoFi has announced two new partnerships in the insurance space. The partnerships expand SoFi’s portfolio of offerings to include homeowners’ and renters’ insurance through Lemonade and auto insurance through Root.

LendIt Fintech USA 2019 Slide Presentations Now Live (LendIt Fintech), Rated: AAA

Keynote Presentations

Advancements in Credit, Underwriting and Identity

Small Business Lending Innovation

Niche Lending: Looking for Yield

Are Crypto-Tracking Stocks Viable Alternatives to a Bitcoin ETF? (Finance Magnates), Rated: AAA

As the world continues to wait for the US SEC’s decision on the Bitcoin ETF applications that are still being processed months after a decision was expected, some investors may find themselves seeking alternative methods of entering into the Bitcoin market without actually having to do the dirty deed of investing in Bitcoin itself.

Crypto lending serviceshave recently reported record profits; crypto futures exchanges are also reporting higher-than-ever trading volumes.

Source: @CMEGroup on Twitter

Nearly 1 in 4 Millennial Homebuyers Want to Buy a Home Before They’re Married (LendingTree), Rated: AAA

Young adults are getting married later than previous generations. In 1980, the median age for men and women at their first marriage was 24.7 and 22, respectively. In 2018, the ages increased to 29.8 and 27.8, for men and women, respectively.

Millennials make up the largest share of homebuyers at 37%, according to a report from the National Association of Realtors.

Nearly a quarter (24%) of millennial first-time homebuyers want to own a home before getting married.

On the flip side, this means just over 3 in 4 millennial buyers (76%) want a marriage before a mortgage. Additionally, 27% of millennial buyers are postponing parenthood until they’ve achieved homeownership. Among homebuyers of all ages, nearly 2 in 5 are waiting to get a pet until after purchasing a house.

More than a quarter (26%) of first-time buyers have poor credit.

Just 15% of first-time buyers have a score of 740 or higher. Nearly 2 in 5 (38%) aren’t satisfied with their credit score, yet more than a quarter of those who are dissatisfied haven’t taken steps to improve their score. By contrast, more than 70% of repeat homebuyers are satisfied with their credit score.

GROUNDFLOOR Doubles Year Over Year Revenue (PR Newswire), Rated: A

GROUNDFLOOR, an investing and lending platform that allows anyone to invest fractionally in real estate, is today announcing its Q1 results and momentum. Despite the government shutdown of the U.S. Securities and Exchange Commission for 35 days, GROUNDFLOOR still experienced 123% percent non-GAAP Q1 revenue growth compared to the prior year Q1.

Additional Q1 momentum for GROUNDFLOOR includes:

  • Achieving a 166% increase in unit volume for loans closed in Q1 ’19 vs. Q1 ’18
  • More than doubling loan application volume for Q1 ’19 vs. Q1 ’18 (121% increase)
  • Selling more than $14.5M in real estate investments to retail investors on the platform
  • Surpassing more than 60,000 registered users
  • Eclipsing $100MM in loans to real estate developers to-date in more than two dozen states
  • Expanding product offerings, such as new construction loans and a fixed annualized notes product returning 5 percent on a 90-day term
  • Launching a second online public offering to purchase stock in GROUNDFLOOR directly

Real estate startup Reali acquires online lender Lenda, expands into mortgages (Housingwire), Rated: A

Reali announced Wednesday that it acquired Lenda, an online mortgage lender that launched in 2013 and currently operates in 12 states.

And with the acquisition, Reali is launching Reali Loans, a mortgage lending operation of its own.

Avant to pay $ 3.85M to settle allegations of deceiving borrowers (American Banker), Rated: A

The online lender Avant will pay $3.85 million to settle Federal Trade Commission allegations that it misled customers who were seeking to repay their loans.

The FTC said Monday that its commissioners approved the settlement by a 5-0 vote.

A Max Levchin-Backed Startup Raises $ 19 Million To Tackle Online Returns (Forbes), Rated: A

A San Francisco-based startup called Returnly is seeking to solve at least a portion of the headache—namely, the payment delay—by issuing instant store credit when you decide you don’t want an item. The company says that by assessing a shopper’s risk, it can offer store credit to 85% of customers on the spot, without first requiring that the item has been received or even put in the mail.

Returnly announced on Wednesday that it has raised $19 million in a Series B funding round, led by venture capital firm Craft Ventures and with participation from Max Levchin, the PayPal cofounder who currently runs Affirm.

Small businesses turning far more often to online lenders (American Banker), Rated: A

Last year 32% of credit-seeking small businesses applied to an online lender, up from 19% in 2016, according to the survey, which was released Tuesday. Over the same period, large banks, small banks and credit unions all saw either steady application rates or a slight decline in interest from those same small businesses, which typically had fewer than 10 employees.

Mastercard Redefines Choice at Checkout with Acquisition of Vyze (Business Wire), Rated: A

Mastercard (NYSE: MA) today announced it has acquired Vyze, a technology platform that delivers more choice – and purchasing power – to people who want their point-of-sale payment options to match the flexibility and convenience of today’s shopping experiences.

Increasingly, consumers are seeking alternative financing options,1 leaving merchants and financial institutions with a need to deliver these services at the point of sale. In the U.S. alone, these solutions represent a more than $1.8 trillion opportunity, according to Accenture.

Earnest Launches Private Student Loans (PR Newswire), Rated: A

Earnest today announced that it’s modernizing student loans with a new in-school student lending offering.

Built based on feedback from students and people with student debt, an Earnest student loan incorporates four unique differentiators:

  • Innovative eligibility check – A quick two-minute eligibility check requires only basic personal information, school details, and an estimated credit score.
  • Cosigner invite – Earnest’s application makes it simple and easy to invite a cosigner to the process.
  • Checkout  Clients can customize their loan according to their individual financial needs with easy-to-understand terms and a clear understanding of their monthly payments after graduation.
  • 9-Month grace period – Earnest found through talking with recent graduates that they wanted the flexibility of a longer grace period after graduation to get settled. Earnest offers a 9-month grace period after graduation compared to the 6-month industry standard.

Banks turn to a former rival to jump-start digital platforms (American Banker), Rated: A

In the “If you can’t beat ‘em, join ‘em” world of bank-fintech relations these days, TD Bank’s recent agreement with the online lender Avant fits right in.

Avant is expanding its efforts to license technology to traditional banks, and TD Bank in March announced it will use the Chicago company’s technology platform, called Amount, to power the bank’s unsecured loan product, TD Fit Loan. HSBC, Regions Banks and Banco Popular also use Amount.

Digital Lending Companies Considering Stricter Credit Approvals (Investing News), Rated: A

Over the past decade, the digital-lending industry has evolved to become more sophisticated. For example, companies are integrating big data and proprietary algorithms to analyze a borrower’s credit risk score in a matter of seconds, according to Juniper Research.

According to the firm, MPLs are projected to generate US$588 billion in loan origination value annually by 2023. This is estimated to account for 41 percent of SME funding around the world.

The research firm further reports that revenue from MPLs are predicted to grow at a 48 percent CAGR. This brings MPL platform revenue to US$137 billion annually by 2023, a 400 percent return from the estimated US$30 billion in revenue in 2019.

7 Smart Ways To Invest $ 1,000 (Forbes), Rated: A

2. Lend to those in need and earn some interest.

Lending Club is one such peer-to-peer lending service I tried out, and I found it to be very easy to use and reliable (see my 

Nearly 60% Of Millennials Look To Lottery For Retirement, Survey Says (FA-Mag), Rated: A

The odds of winning the $654 million Mega Million prize last year were put at one in 302 million, while the $345 million Powerball offered one chance in 292 million. But those astronomical odds apparently haven’t deterred the many Americans who are banking on using a lottery jackpot for their retirement nest egg.

Thirty-one percent of Americans don’t invest because they think it’s risky, but 39 percent, including 59 percent of millennials, feel it’s reasonable to think of the lottery jackpot as a potential means of retirement, according to the survey.

Miillennial men in particular (66 percent) believe the lottery is a reasonable retirement plan, compared to 58 percent of millennial women. However, if they did win the lottery, more millennial men (61 percent) than women (42 percent ) would save or invest the entire amount.

Direct Lending Investments Had Over 950 Investors (deBanked), Rated: A

Documents filed in a New York Supreme Court case by the receiver managing Direct Lending Investments (DLI), revealed that DLI had more than 950 investors worldwide with collective investments on the books totaling over $780 million.

No-income, no-asset mortgages are back (at one lender, at least) (Housingwire), Rated: A

And now, NINA loans are back, as 360 Mortgage Group announced this week that it is launching a no-income, no-asset mortgage pilot program.

Some online lenders charge 900% interest and ignore Virginia law. So borrowers are suing. (Pilot Online), Rated: A

A loose-knit group of Virginians, stung by triple-digit interest rates on payday and other loans, is trying to do what the General Assembly won’t — make sure all lenders, including online ones, follow Virginia laws.

The latest lawsuit, filed last week, alleges that four web sites — Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial and Majestic Lake Financial — set up in the name of the Habematolel Pomo of Upper Lake tribe in northern California were actually operated by non-tribal members in a Kansas City suburb, including the son of a payday loan executive convicted of fraud and racketeering.

Lendio Franchise Opens in Phoenix to Expand Access to Capital for Local Businesses (Lendio), Rated: B

Lendio has announced the opening of a new Lendio franchise in Phoenix. Through the Lendio Franchising program, Sam Foreman will help local businesses apply for loans, review their options and secure funding, easing the financial hurdles for area small business owners.

BlueVine Partners with Ocrolus for Faster Processing of Financing Applications (Ocrolus), Rated: B

Ocrolus today announced a partnership with BlueVine. BlueVine leverages Ocrolus technology to accelerate growth and scale operations efficiently, creating a faster and more seamless experience for its customers.

United Kingdom

Peer-to-peer lender Funding Circle’s loans under management soar to record highs (City A.M.), Rated: AAA

Loans under management grew 44 per cent to £3.4bn compared to £2.3bn in the first quarter of the previous year, and revenue growth soared by 40 per cent.

The firm reported that loan originations were up 23 per cent from £525m in the first quarter of 2018 to £644m between January and March this year.

Salary Finance raises $ 32.8m, hires SoFi co-founder for US push (Finextra), Rated: AAA

Salary Finance, a UK-based startup focused on salary-linked savings and loans for employees, has raised $32.8 million and hired SoFi co-founder Dan Macklin for a US expansion.

Welendus closes funding round as it prepares for India expansion (P2P Finance News), Rated: A

WELENDUS, the peer-to-peer lender focused on short-term loans, has closed its last seed funding round, as it prepares to expand into India.

City watchdog readies new rules for cryptoassets and P2P (FN London), Rated: B

The Financial Conduct Authority is prepping new rules for cryptoassets and peer-to-peer lending, two rapidly growing areas of fintech.

China

China’s P2P lending platform Dianrong raising $ 100m (Deal Street Asia), Rated: AAA

Shanghai-based peer-to-peer lending platform Dianrong is looking to raise $100 million in fresh funding, according to a Financial Times report, a move that should give it enough buffer to meet China’s strict capital requirement for P2P players.

The GIC-backed firm has not made any official statement about its fundraising plan but analysts said the move is part of the firm’s efforts to meet Beijing’s proposed Rm500 million ($74.5 million) capital requirement for P2P operators nationwide.

National Rules on Online Lending Still Far From Sight (Caixin Global), Rated: A

It will not be soon for China’s commercial banks, consumer finance service firms and other institutions to see a national regulation governing internet-based lending activities, despite recent progress on specific rules for online peer-to-peer lending and microloans, Caixin learned.

Large P2P lenders ordered to ready disclosures for regulators (technode), Rated: A

Large platforms with loan balances of more than RMB 5 billion ($750 million) must register with the information disclosure database by the end of May.

European Union

Tech unicorn Klarna could quickly be prepared to contemplate bourse itemizing (Infosurhoy), Rated: AAA

Swedish tech unicorn Klarna is nearing the point where it could seek a stock market listing, but it’s unlikely to be this year, the CEO and co-founder of the fast-growing online payments services firm said.

Klarna Expands Relationship with Acne Studios (Business Wire), Rated: B

The Stockholm-based fashion house Acne Studios has expanded their existing European partnership with Klarna. Showing at Paris Fashion Week, Acne Studios encompasses women’s and men’s ready-to-wear, shoes, accessories and denim, but also moves across the borders of fashion, art and design. With Klarna now available in Acne Studios’ online store, shoppers in the U.S. can choose to checkout with four equal payments – with no interest or fees.

Linked Finance marks record quarter (Tech Central), Rated: AAA

The first quarter of 2019 saw the platform provide more than €11.3 million in loans to Irish SMEs, an increase of 32% over the same period last year.

Since its establishment in 2013, Linked Finance has helped provide more than 2,000 loans and €92 million in funding to businesses across Ireland. Lenders who have supported SMEs through the platform have earned more than €7.1 million in interest and received more than €50.4 million in repaid principal since the business launched in 2013.

Linked Finance issued its largest loans ever in the quarter with a number of €300,000 loans provided. The average loan increased to €70,000.

Total Online Alternative Finance Grows 36% Topping €10 Billion (Crowdfund Insider), Rated: AAA

According to CCAF, in 2017 the alternative finance market grew by 36% to € 10.44  billion – dominated by the UK.

Excluding the UK, European online alternative finance industry grew 63% from €2.06 billion to €3.37 billion in 2017.

The top three European markets following the UK, include:

  • France at €661 million
  • Germany at €595 million
  • The Netherlands at €280 million
  • The Nordic countries collectively generated €449 million, making them the third-largest regional market in Europe following France and Germany.
Source: Cambridge Centre for Alternative Finance

Read the full report here.

Top 5 Real Estate Stocks To Invest In (Prague Post), Rated: A

But before I share these top real estate crowdfunding companies, I would first want to tell you about the characteristics which a best performing real estate should have. Well, they must have:

  • Pricing power
  • High usage rates
  • Regular dividend
International

Challenger banks overtake traditional banks in customer satisfaction, in 4 charts (Tearsheet), Rated: AAA

Challenger banks have leapfrogged to the forefront in overall customer satisfaction, according to a new study from FIS.

63 percent of direct bank customers report being “extremely satisfied”, compared to 52 percent of credit union customers and just 19 percent of customers of the top 50 global banks.

73 percent of all consumer interactions with banks in the US are done digitally.

Nearly two-thirds (65 percent) of younger millennials (between ages of 18 and 26) reported that they have not used any branches at all in the prior month.

Source: Tearsheet
Australia

April holidays to negatively impact 1 in 4 SMEs (My Business), Rated: AAA

According to new research commissioned by SME lender OnDeck, Australia’s small to medium enterprises (SMEs) are bracing for “a double whammy” of disruption from the back-to-back Easter/Anzac Day public holidays.

Over one in four (27 per cent) of SMEs expect the Easter/Anzac Day period to disrupt normal trading.

LET’S TALK: THE BIG 4 BANKS (Dynamic Business), Rated: A

Leo Tyndall, CEO and Founder Marketlend

In the wake of the Royal Commission we’re seeing a tightening of finance for SMEs with even long time customers being turned away for loans. For years, banks have taken too long and required too much, like property collateral, from SMEs. Innovations like marketplace lending are giving SMEs transparent and prompt access to.capital when they need it.

Stephen BarnesPrincipal at Byronvale Advisors Pty Ltd

I would say that the term ‘redundant’ may not be so appropriate but certainly through a number of factors the ‘Big 4’ may be less able to meet the needs or timeliness requirements of small business. A large number of small business owners need to use personal assets, usually the family home, as security for loans.

India

P2P firms seek RBI relaxation on lending limit (Business Standard), Rated: AAA

A little more than a year after the (RBI) came out with guidelines for peer-to-peer (P2P) lending companies to convert into non-banking companies (NBFCs), micro and small enterprises (SME) lending has turned out to be the focus area for these companies.

However, the current regulation does not allow a single lender to lend more than Rs 10 lakh across at a time. This is hampering growth prospects, say P2P players. The association of P2P lenders has sought relaxation in the norm, and requested the to raise the limit to Rs one crore, according to sources in the industry.

Fintech startups spot a lucrative space in ‘open banking’ (Economic Times), Rated: A

Fintech startups have started offering a broader set of banking services beyond payments and lending, pointing to a deep integration with lenders that has the potential to change the way customers access banking products.
Asia

Riding the Korea FinTech Wave (Finextra), Rated: AAA

South Korean Financial Services Commission (FSC) has identified three sectors — payments, data, and lending — to protect consumers, foster fintech innovation, and ultimately remove uncertainties that may restrict investments into Korea.

Legal Framework Around Marketplace Lending

South Korea is a country that has gone through two economic crises which has made banks extremely conservative especially in terms of lending. As such, 40% of the population cannot receive loans from tier one banks and must resort to secondary markets such as savings banks with extremely high interest rates above 20% and shady underground loan sharks.

Cambodia, Singapore In X-Border FinTech Pact (Cambodia Daily), Rated: A

Deputy Managing Director of MAS Jacqueline Loh said the relationship demonstrates a FinTech that may extend to other countries in the ASEAN region.

MENA

A ROADMAP FOR FINTECH FIRMS ENTERING FAST-GROWING EMERGING MARKETS (LendIt Fintech), Rated: AAA

This paper provides case studies and market analysis from the Arab Middle East and Africa as examples of fast-growing economies, open to best-in-class solutions, with both wealthy and underbanked populations. Key go-to-market findings serve to inform fintech firms, investors and others about participating in the region.

Download the report here.

Canada

TORONTO FINTECH, LENDIFIED, RAISES $ 15 MILLION CAD SERIES A (Betakit), Rated: AAA

Lendified, a Toronto-based FinTech, announced today that it has closed a $15 million CAD Series A funding round, in order to continue its growth within Canada.

The round was co-led by WD Capital Markets and INFOR Financial, and saw funding from CI Financial Corp., Windsor Private Capital, FirePower Capital, and a group of investors including Glenn Murphy, founder of FIS Holdings and former CEO of Gap Inc. and Shoppers Drug Mart.

Latin America

How sky-high interest rates are choking economic growth in Brazil (The Brazilian Report), Rated: AAA


Brazilian Credit Card Interest Rates: Enough to Choke a Horse or Risk Based Pricing? (Payments Journal), Rated: A

Bank accounts for consumers is still relatively low, with only 68%, compared to 79% in China.  Debit cards, however, outpaced credit by 2:1.

While you may see a slight uplift in the U.S. and U.K markets, consider this:

  • Annual consumer rates for credit cards topped 270 percent for unpaid balances.
  • As Brazil suffered its worst economic crisis in history, the banks raised credit card rates to a stunning 500 percent per annum on unpaid bills.
  • With Brazilians relying on credit an paying for everything from everyday goods to luxury items in installments, massive interest rates are being embedded into these payments.

Authors:

George Popescu
Allen Taylor

The post Thursday April 18 2019, Weekly News Digest appeared first on Lending Times.

Tuesday April 10 2018, Daily News Digest

Tuesday April 10 2018, Daily News Digest

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

Tuesday April 10 2018, Daily News Digest

News Comments

United States

United Kingdom

International

Other

News Summary

United States

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

 

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

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

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

 

 

 

 

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

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

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

 

 

 

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

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

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

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

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

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

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

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

PENSCO Launches Custodian Connect (Lendit), Rated: B

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

 

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

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

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

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

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

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

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

 

United Kingdom

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

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

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

 

International

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

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

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

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

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

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

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

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

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

European Union

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

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

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

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

Latin America

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

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

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

Canada

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

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

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

MENA

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

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

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

Asia

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

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

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

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

Source: The Edge Markets

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

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

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

 

Authors:

George Popescu
Allen Taylor

Monday September 18 2017, Daily News Digest

LendingClub

News Comments Today’s main news: 400K UK consumers may have been affected by Equifax breach. Independent Community Bankers of America letter opposing ILCs. RateSetter launches consumer hire-purchase product. Klarna partners with Wacom. Google enters digital payments in India. Payday type loans come to e-tailers in India. Today’s main analysis: Analysis of SoFi deal SCLP 2017-5 and Lending Club deal CLUB 2017-P1. […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Africa

News Summary

United States

Independent Community Bankers of America Letter (ICBA), Rated: AAA

As you may be aware, ICBA recently filed a comment letter with the FDIC objecting to the deposit insurance application of SoFi Bank, an industrial loan corporation to be chartered by the state of Utah. In our letter, we urged FDIC, for safety and soundness reasons and to maintain the separation of banking and commerce, to not only deny SoFi Bank’s application but also impose a moratorium on ILC deposit insurance applications. Furthermore, we said that Congress should close the ILC loophole because it not only threatens the financial system but creates an uneven playing field for community banks.

The news that Square also intends to apply to the FDIC for deposit insurance as an industrial loan corporation has significantly increased our concerns and made it even more urgent that the FDIC immediately impose a moratorium on approving deposit insurance applications for ILCs. As we noted in our SoFi Bank letter, the ILC charter is nothing more than a loophole in the law to circumvent the legal prohibitions and restrictions under the Bank Holding Company Act.

SoFi Bank and Square are applying as ILCs and not as commercial banks because their parent companies and their affiliates do not want to be subject to the legal restrictions and supervision attendant to the BHCA. Square, for instance, already owns a point-of-sale hardware appliance business and a food delivery service and therefore could not own a commercial bank without divesting its commercial activities. For safety and soundness 2 reasons and to maintain the separation of banking and commerce, the FDIC should deny SoFi Bank’s application and impose a moratorium for at least two years on future ILC deposit insurance applications, including any application by Square. 

Read the entire letter here.

Did Lending Just Change for Good? (Crowdfund Insider), Rated: AAA

Bank lending regulations have rarely been thought of as dynamic or exciting but last night’s ruling by the Consumer Financial Protection Bureau (CFPB) to allow a lender to begin using alternative data in their underwriting could herald the beginning of a new era in lending and how banks work.

Why is this significant?

US banks have traditionally been guided by three key pieces of legislation, the Truth in Lending Act of 1968, the Equal Credit Opportunity Act of 1974 and the Community Reinvestment Act of 1977.  These three acts were created before the era of personal computers yet still guide bank lending today.  Since the rise of marketplace lending, which began in 2006, where borrowers go through a platform and investors fund those loans, it is becoming increasingly apparent that many of these regulations are in need of updating.

In an overly simplistic interpretation (and I am not an attorney), the regulator is giving an online consumer lender the right to underwrite loans using ‘alternative data’ which before was not in line with how the Equal Opportunity Act is interpreted by lenders.  It is not clear what data will be allowed but in a CNBC interview, Upstart co-founder Paul Gu suggested that SAT scores, college grades and even college majors are data points which are helpful in predicting loan defaults. 

So assuming the change stands, what is next?

As alternative lenders have more scope to use alternative data, machine learning complex data analysis is opening up an entirely new space for investors.  Gone are the days where banks only competed against each other with marketplace lenders now allowing investors to allocate capital in a similar way to banks, choosing loans to fund based on their own ideas and risk profile.   For now, this is mostly impacting consumer credit, but in the years to come, look for marketplace lending to impact all areas of lending as investors get more comfortable investing in this space regulations start to adapt.

Scandal costs Sofi chance to become a bank, says ex-SEC head (Financial Times), Rated: AAA

SoFi’s application to become a bank has almost no chance of approval in the wake of a sex scandal that forced out its chief executive, says a close adviser and former chairman of the Securities and Exchange Commission.

But last week’s departure of Mike Cagney, the co-founder, chairman and chief executive, has effectively killed the application, said Arthur Levitt, a former chairman of the SEC, who began advising the company two years ago.

“This departure of Mike makes that a very questionable attainment,” Mr Levitt said, referring to the charter.

He noted that the FDIC had turned down this type of application “many times” before.

Equity podcast: SoFi loses its CEO, big rounds for unicorns, and will this VC buy the iPhone X? (TechCrunch), Rated: A

We turned first to SoFi, a consumer-finance unicorn that has raised more than a billion in equity, and over $2 billion in total. The company is now down a CEO after allegations of misconduct brought censure upon its CEO, Michael Cagney, and the company’s culture.

Listen to the podcast here.

Fat cat frat boys ape the worst of banking and tech (Financial Times), Rated: A

The article also described employee concerns about lending practices and alleged that investors had been misled over a 2012 financing.

SoFi complained in a public blog about “inaccuracies” in the Times report, but focused on defending its lending practices.

If the allegations are true, SoFi and LendingClub have many of banking’s worst attributes with Silicon Valley’s warts layered on top.

Meanwhile, the allegations of doctored loans and conflicts of interest at LendingClub were reminiscent of some of the excesses of the bankers who fed the subprime mortgage market.

Goldman Sachs thinks fintech has as much potential as trading (Quartz), Rated: AAA

Goldman Sachs has been pilloried for lackluster results from its trading division (paywall), so this week the bank gave investors a peek into its plans (pdf) for making more money. Surprisingly, the Wall Street powerhouse thinks it can generate as much revenue from online consumer loans—a market targeted by many fintech startups—as from buying and selling securities.

Specifically, Goldman thinks it can make $1 billion in extra revenue from its consumer lending business over the next three years, as much as it expects for its trading operations. Combined with new lending for the wealthy and companies, the bank expects to bring in $2 billion in additional sales from loans. Goldman co-chief operating officer Harvey Schwartz said it’s one of the fastest-growing lending platforms ever launched, even though he says the bank is taking its time with the nascent business. The bank’s digital consumer-lending arm called Marcus is expected to have lent out $2 billion by the end of the year.

Meanwhile, big banks have access to cheaper funds than peer-to-peer lenders like Lending Club or Zopa. With consumer deposits and the billions of dollars they routinely borrow in credit markets, banks can undercut the loan rates offered by smaller companies.

That said, Schwartz acknowledged that consumer lending isn’t immune to economic downturns, and analysts cited by Bloomberg were skeptical about Goldman jumping into a market outside its core expertise.

Source: Quartz

The Bank of Google or Amazon? Don’t count on it (American Banker), Rated: AAA

It might seem like it is only a matter of time before the tech giants knock on banking’s door. In fact, a recent World Economic Forum report posited that big tech companies present a greater challenge to banks than fintech startups. The report notes that regulators will accept a more “oligopolistic distribution of financial services products by tech firms.” Already, the fintech providers Social Finance and Square have applied for FDIC-insured banking charters, just as the Office of the Comptroller of the Currency continues work to develop its limited-purpose fintech charter. Are the largest tech firms next in line?

Incumbents still hold the upper hand. The risk of an Amazon or Google or Apple dominating the traditional banking sector is nowhere near a slam dunk.

In every scenario, the tech giants would need to persuade regulators to grant them some kind of charter access in order to effectively compete and level the playing field on funding costs. This would involve easing traditional limits on commercial firms owning banks, and potentially navigating opposition from members of Congress.

But more fundamentally, tech giants have had mixed experiences in rolling out financial services such as Google Wallet and Apple Pay. And despite the reported consumer skepticism of legacy institutions, banks still continue to maintain a high volume of customer relationships.

SoFi CEO Resigns; Goldman & Mosaic Ink Deal; SoFi & Lending Club Deal Analysis (PeerIQ), Rated: AAA

In the fallout of the Equifax breach, the leading credit bureaus are dealing with an overwhelming volume of credit freeze requests from consumers. While it is still too early to tell, it seems that the genie is out of the bottle. The breach is sparking additional focus on FinTech innovation to protect consumers (e.g., digital identity verification, disposable card numbers, etc.).

Beyond the headlines, SoFi’s growth engine continues. In Q2 2017 alone, SoFi funded $3.1 Bn in loans with $134 Mn in revenue and $61.6 Mn in adjusted EBITDA. Revenue and adjusted EBITDA were up 67% and 60% year over year respectively.  The news of Cagney’s resignation coincided with SoFi marketing its latest personal loan deal which priced this Friday. Interest in SCLP 2017-5 was initially strong, however the bond priced somewhat wider than guidance.

SoFi’s Latest Consumer Lending Deal: SCLP 2017-5

After Mike Cagney’s resignation on Friday, the lead underwriter re-launched SCLP 2017-5. Since guidance was released before the critical NY Times article on Tuesday, we have a close (but imperfect) control to study the consequences of management upheaval on deal execution.

ABS investors reacted negatively to the news; the bonds priced 10 to 15 bps wider than guidance on Monday.

Source: PeerIQ, Company Filings, S&P, Kroll Bond Rating Agency

LendingClub’s Self-Sponsored Prime Consumer Deal: CLUB 2017-P1

This is the second self-sponsored deal from LendingClub, and it follows the success of CLUB 2017-NP1. LendingClub expects to alternate between prime and near-prime securitizations at least once a year going forward. Of the $363 Mn outstanding, approximately $100 Mn came from LendingClub’s balance sheet (a shift from prior management’s business practice); the remaining loans were contributed from investors.

The CLUB 2017-NP1 and CLUB 2017-P1 deals total to approximately $628 Mn in loans, yet LendingClub has facilitated almost $29 Bn in loans on its platform as of Q2 2017 making it a small part of LendingClub by dollars loaned but a meaningful portion of EBITDA.

Source: PeerIQ, Company Filings, Kroll Bond Ratings Agency

The FinTech Investor Podcast Series: Interview With Ron Suber (SoundCloud), Rated: A

DiversyFund Sells Pre-IPO Shares in Accredited Offer (Crowdfund Insider), Rated: A

DiversyFund, a real estate crowdfunding marketplace, is selling pre-IPO shares in a Series A crowdfunding round through a Reg D 506(c) offering.

The Form D filed with the Securities and Exchange Commission (SEC) indicated that Diversyfund had sold $200,000 of a $6 million funding round as of August 31st. Minimum investments of $100,000 are being accepted from accredited investors only.

Misha Esipov of Nova Credit (Lend Academy), Rated: A

In this podcast you will learn:

  • How talking with international students at Stanford led to the idea for Nova Credit.
  • The big problem that Nova Credit is trying to solve.
  • How they began their journey in trying to solve this problem.
  • Details of their Credit Passport product, the international credit report.
  • How they were able to convince international credit bureaus to share their data.
  • Why the big three U.S. credit bureaus have not developed an international credit report.
  • How Nova Credit is able to standardize data from very different countries.
  • Nova Credit’s business model and their similarity to a traditional credit bureau.
  • How they can report back credit data to international bureaus.
  • The other vertical they focus on beyond lending.
  • The kinds of lending platforms they are working with today.
  • The progress they have made since LendIt USA 2017.
  • When they first started making revenue.
  • Who has been backing Nova Credit.
  • What is on their road map for the next 6-12 months.
  • How they view expanding into new markets to help immigrants other countries.

The SoFi Sex Scandal Highlights How Hard It Is For Women In Fintech (Fast Company), Rated: A

Fintech has become a major force over the decade since the financial crisis, with $12.8 billion in venture capital flowing into the sector in 2016 alone. But of the nearly 500 deals that took place in the U.S. last year, less than a dozen went to companies founded by women.

“It’s lonely to be a woman in fintech, especially as a CEO,” says Rachel Mayer, cofounder and CEO of Trigger, an automated tool for investing alerts.

At Anthemis, based in London, 56% of employees are women, a remarkably equitable gender breakdown that is consistent at every level.

Former banking executive Sallie Krawcheck is following a similar playbook with her female-focused investing service, Ellevest. Since founding the company three years ago she has raised over $50 million in venture funding.

A survey of U.K.-based fintech firms published last week revealed that women represented just 3 in 10 employees. Of fintech board directors globally, just 8% are women.

Good news for fintech seen in CFPB’s ‘no-action’ move (American Banker), Rated: A

In an interview Friday, Upstart co-founder and CEO Dave Girouard explained why the fintech applied for the letter and how it works.

Is it fair to think of a no-action letter as a stay-out-of-jail-free card?

DAVE GIROUARD: We’re careful about not trying to interpret it in any way that is different than what the CFPB says it is. The letter makes it clear that they have reviewed what we do and how we do what we do and that they don’t find issue with it.

How do you feel about the agreement?

We’re pleased that the CFPB recognized the consumer advantage of alternative data and machine learning, the fact that it could make affordable credit more broadly available to more people.

So it’s not just about Upstart for sure — it’s the acceptance of these more modern techniques because they can and will benefit consumers broadly over time.

Sharestates Appoints New Chief Operating Officer, Adds SOC 2 Type 2 Certification (Crowdfund Insider), Rated: A

Sharestates, an online real estate crowdfunding marketplace, has announced that Nicole Joseph has joined the executive team as the new Chief Operating Officer.

The new hire is accompanied by the completion of the company’s SOC 2 Type 2 Certification, which affirms that Sharestates now meets the security requirements and parameters for storing information on the cloud as laid out by The American Institute of CPAs (AICPA).

ReliaMax Announces New Whole Loan Portfolio Placement Service (BusinessWire), Rated: A

ReliaMax®, the complete private student lending solutions provider for banks, credit unions and alternative lenders, today announced at the 23rd Annual ABS East 2017 Conference a new whole loan trading service, ReliaMax Portfolio Placement, as an extension of its existing capital markets and liquidity programs. The ReliaMax Portfolio Placement service will facilitate qualified existing private student whole loan portfolios for sellers and buyers.

The ReliaMax Portfolio Placement service provides unique value to the private student lending marketplace in multiple ways including insurance, default prevention, credit analysis, and servicing. Some benefits include:

  • State-of-the-art servicing through ReliaMax helps buyers maximize the value of their portfolio, providing compliance and regulatory support and staffing to manage student loan-specific servicing requirements.
  • Loan insurance through ReliaMax Surety Company covers 100% principal and interest and mitigates risks, reduces defaults, and provides better cash flow.
  • Portfolio review and credit analysis provides guidance around the price at which the portfolio might transact.

ReliaMax has been involved in many third-party portfolio transactions. For example, in December 2106, MetaBank acquired a $151 million student loan portfolio which ReliaMax Surety Company now insures. The transaction also included the conversion of the portfolio servicing onto the ReliaMax Platform. Over the last three years, ReliaMax has provided insurance and/or servicing on 12 portfolio placement transactions.

The Top Small Business Funders By Revenue (deBanked), Rated: A

Square $1,700,000,000 $1,267,000,000 Went public November 2015
OnDeck $291,300,000 $254,700,000 Went public December 2014
Kabbage $171,800,000 $97,500,000 Received $1.25B+ valuation in Aug 2017

Lendio Partners with Ocrolus to Automate Bank Statement Analysis (PR Newswire), Rated: A

Lendio, the nation’s leading marketplace for small business loans,today announced a partnership with Ocrolus, the emerging leader in bank statement review automation. The PerfectAudit API, powered by Ocrolus, analyzes uploaded bank statements with 99+% accuracy, replacing manual review with automation. Ocrolus technology allows lenders, for the first time, to review every potential borrower’s bank statement data automatically, regardless of whether or not the borrower provides sensitive bank login credentials.

In April, Lendio became the first lending marketplace to integrate with Ocrolus, whose clients include banks, alternative lenders, accounting firms, law firms, and government entities. The PerfectAudit API gives Lendio the ability to systematically combat bank statement fraud and conduct a hyper-accurate review for every potential borrower.

Outsiders and Insiders Are Behind the Fintech Revolution (JD Supra), Rated: A

From peer-to-peer lending to online banking, the fintech industry is a rapidly growing area for technology investment. In the first quarter of 2017 alone, U.S. venture capital-backed fintech start-ups raised $1.1 billion across 90 deals, according to CBInsights Global Fintech Report. The only region to outdo the U.S. during this same period was Asia, which reported for the same group investment of $2.7 billion across 226 deals.

There exists a wide range of technologies that fall under the definition of fintech, and each is seeing significant growth. One such technology is artificial intelligence, which, according to the PricewaterhouseCoopers 2017 Global Fintech Report, 30 percent of large financial institutions are investing in. For example, another factoid from a separate PricewaterhouseCoopers report, projects that, by 2020, AI will automate a considerable amount of underwriting.

Mobile payments are another rapidly growing area of fintech, with TechCrunch reporting that there will be an estimated $60 billion worth of payments made on mobile platforms in 2017. The site also predicts that, by 2020, 90 percent of smartphone users will have made a mobile payment, which serves to underscore just how commonplace this fintech will be within a very short time.

AON: ALTERNATIVE RISK PREMIA VIABLE FOR MANY (AllAboutAlpha), Rated: A

A new report from Aon discusses the contemporary market for alternative risk premia: where it is, how it got here; where it may be headed.

The authors, Matthew Towsey and Chris Walvoord, begin with some very basic considerations of what ‘risk premia’ are. They are, on the one hand, the payments one receives for taking on a risk that others do not wish to hold (providing insurance), or they are on the other the winnings one pockets on strategies that take advantage of market anomalies.

A Q&A With NerdWallet CEO Tim Chen: ‘We’re Making An Impact’ (Benzinga), Rated: B

How does NerdWallet create its content and recommendations? Do data and algorithms play a role in your platform? I’m curious about the company from a fintech perspective.

It’s actually a mixture of both — algorithms and incredibly smart, financially savvy humans power our recommendations, reviews and expert advice.

The company seems to simplify financial information for everyday consumers. Do you think NerdWallet has helped to democratize the space?

That’s the goal! I truly believe that a person that has spent no time at all thinking about personal finance and can’t afford a financial advisor, should be able to make the same quality of choice as the most financially savvy person in the country

SDIRA TV Offers New Strategies Amidst Massive Equifax Hack (PR Web), Rated: A

Experts deliver new alternative investment advice and resources for individuals being impacted by the giant 2017 Equifax data breach. This includes all new episodes of SDIRA TV with national finance experts and investment advisors, as well as a side by side comparison white paper on retirement investing options.

Deeper concerns have surfaced as it was discovered three Equifax executives sold off substantial amounts of personally held stock before making the breach known.

20 Places You Can Raise Funding for Your Business (TechBullion), Rated: B

  1. Crowdfunding

There are several platforms where you can create your crowdfunding campaign. Examples include KickstarterIndiegogoand Go Get Funding.

  1. Peer-to-Peer Lending

Peer-to-peer lending involves a group of people coming together to lend money to each other. You can look for an entrepreneur peer who is willing to fund ideas similar to yours.

  1. Online Lending

There are several online lending service providers. Good examples are Kabbageand OnDeck.These online lenders will process your application within hours as opposed to traditional lenders.

 

My Take On Real Estate Crowdfunding (ValueWalk), Rated: B

Many of these platforms seem to market to investors, showcasing high dividend yields in the 8% – 10%/year range.

I read the following two articles in my research:

In general, those are new untested platforms, which may or may not do well for you over time. These investments have not been time tested during a recession. In addition, I do not understand very well how investment assets are segregated in those platforms, and how things would work out if a project you invested in fails miserably.

As Financial Processes Go Digital, Detroit Looks To Siphon Talent From New York, Chicago (Benzinga), Rated: B

He’s talking about fintech, which has leveled the playing field for non-New Yorks to flourish in financial services. Inspired by emerging tech trends, Raznick and Benzinga are taking stakes in Michigan’s future by spearheading the new Detroit Fintech Association.

The nonprofit trade organization will enhance the community’s exposure, connect startups with national leaders and mentors, support talent recruitment and magnify the Detroit voice in U.S. regulatory discussions. The DFA also aims to improve financial literacy in the city through work with Detroit high schools and higher education institutions.

FHA Loan Originations Expected to Generate Servicing Portfolio Growth Leading to Servicers Taking on Greater Non-Performing Loans and REO (Marketwired), Rated: A

Altisource Portfolio Solutions S.A. (“Altisource”) (NASDAQ: ASPS), a provider of real estate, mortgage and technology services, today issued the results of its inaugural Default Servicing Survey, a survey of over 200 mortgage default servicing professionals. According to the study, nearly three-quarters (71 percent) of servicing professionals surveyed predicted FHA/VA loan volumes would increase within their organizations in the next 12 to 24 months; 41 percent believed FHA loans will offer their organizations the most portfolio growth over the same time period.

According to the U.S. Department for Housing and Urban Development, FHA loans accounted for over 17 percent of newly originated mortgages in 20161 and currently constitute 35 percent of all loans delinquent for 30 or more days2. As the issuance of FHA loans grows, so does the potential increase in volume of default assets. Thus, it is not surprising that 93 percent of servicing professionals surveyed stated that foreclosure/trustee and Claims Without Conveyance of Title (CWCOT) capabilities are important factors to consider when evaluating a vendor to manage growing default portfolios.

Servicing Professionals Cite Challenges Stemming from Costs of FHA Conveyance and Managing CWCOT Programs

Servicing professionals (29 percent) cited remitting fees, costs and financial obligations associated with FHA conveyance as the greatest challenge for effective CWCOT programs. For servicing professionals working with third-party vendors to manage CWCOT portfolios, 15 percent said overall vendor management is a challenge associated with managing CWCOT programs while another 15 percent pointed to timeline delays and increased costs due to attorney oversight; 11 percent cited not having enough in-house personnel on staff to effectively manage the program.

Third-Party Expertise and Central Coordination are Critical to Successful CWCOT Program Administration

In order to overcome the financial, regulatory and oversight challenges associated with their vendors’ CWCOT programs, servicers must carefully evaluate their third-party vendor strategy to ensure vendors possess the right expertise and resources to execute the program. Most servicing professionals surveyed (97 percent) said they are exploring options including a single-vendor approach to help achieve their objectives; 91 percent identified FHA asset management experience as an important criterion for vendors. When specifically evaluating single vendors, 72 percent of servicing professionals surveyed said consistency and efficiency in managing REO properties is a very important consideration; 69 percent also pointed to compliance management.

United Kingdom

Equifax says as many as 400,000 UK consumers may be affected by data breach (Financial Times), Rated: AAA

Equifax, the US credit-reporting company at the heart of a cyber-security scandal, has admitted that as many as 400,000 UK consumers may have had their personal information stolen.

The company said that while its UK systems were not affected by the massive cyber raid that targeted information for as many as 143m Americans, UK customer data “may potentially have been accessed”, because it was stored on US systems between 2011 and 2016.

If Equifax’s forecast is borne out, the data breach will be the biggest in UK cyber history, bypassing that of payday lender Wonga, which affected more than 250,000 customers.

RateSetter launches consumer hire-purchase product (P2P Finance News), Rated: AAA

RATESETTER has launched a hire-purchase (HP) product for individuals looking to buy vehicles.

Consumers will be able to borrow up to £25,000, but the peer-to-peer lender expects the agreements typically to be around £6,000. The terms range between 12 and 60 months, with APRs going from 19.9 per cent to 49.9 per cent depending on the customer’s creditworthiness.

Assetz Capital Reports “Development Funding Boom” with 175% Increase (Crowdfund Insider), Rated: A

Peer to peer lender Assetz Capital is reporting it has seen a year-on-year increase of 175% in the number of property development projects funded around the UK. The online lender says this rise comes following sustained growth in the funding pool for property developments, as investors hunt for a piece of the development market.

There are two new types of Isa – should you switch to them? (The Telegraph), Rated: A

But as new types of Isa have emerged and new rules have been introduced, the situation has become more complicated.

And some Isa features – notably “flexibility”, which allows account holders to make withdrawals and then pay the money back in during the same tax year while keeping the tax benefits – have not been introduced by all providers, which has further muddied the waters.

A Help to Buy Isa, a type of cash Isa, is also an option. First-time buyers can deposit £1,200 in the first month and £200 a month thereafter to put towards a home purchase. The Government then tops up savers’ money by 25pc.

However, you can’t pay into a normal cash Isa and Help to Buy Isa in the same year, unless you choose a provider that allows you to split the cash. Nationwide and Aldermore both offer this option; they pay 2pc and 1.75pc respectively.

Lifetime Isas 

The Lifetime Isa is the newest addition to the Isa family.

Consumers between the ages of 18 and 40 can use the accounts to save towards their first home or retirement. Up to £4,000 can be put away each year into either a cash Lisa or a stocks and shares version. Eligible savers can continue to contribute until the age of 50.

Hargreaves Lansdown, Britain’s biggest fund shop, and rivals including AJ Bell, The Share Centre and Nutmeg, an online wealth manager, offer investment Lisas.

Innovative Finance Isas 

These Isas shield peer-to-peer investments, which allow consumers to offer unsecured loans to individuals and businesses through online platforms such as Zopa and Ratesetter, and certain “crowdfunding” investments, from tax.

Lending Works was the first to offer the new Isa, paying the same return as the firm’s existing accounts.

Zopa allows existing customers to sell their loans and buy them back within the Isa. They can also transfer their Isas with other providers to Zopa.

Networks are the new corporations (Inside Bitcoins), Rated: A

There are a lot more people in the world that can collectively lend micro loans on a regular basis than there are corporations that can regularly distribute loans above the value of a thousand dollars.

“A network of independent lenders committed to distributing micro loans could potentially rival long established financial organisations in terms of the combined value of peer to peer loans serviced to borrowers on a world wide scale” says Richard Ochieze, Managing Director at Ledgermark, LTD.

The case for Digital Collateral

The internet makes non repayment of loans a marvellously simple task for borrowers and as such; organisations like the Funding Circle, a peer to peer lending firm, are left wide open to have the profits of their retail investors depleted due to this lingering risk.

Traditional financial institutions have been able to maintain a fortress of checks and balances such as strict collateral requirements for both business and personal loans in order to provide themselves with a means of recourse should a borrower fail to repay his debt.

In this digital age in which peer to peer transactions are becoming the norm, this same form of protection must be made available to the average individual who wishes to loan his money out to borrowers in return for profit.

However, the question must be asked: how can a borrower pledge his house or farm as collateral via an online loans application?

Prior to the invention of the Blockchain such an asset did not exist and now that it does, the door has been opened to allow individuals based anywhere in the world to distribute and/or become the recipient of a secured micro-loan.

Can a robot help you invest for retirement? (AOL), Rated: A

Robo-adviser Wealth Wizards, for example, typically charges £65 for advice on investments of up to £30,000, and 0.30%, or £300, for guidance on what to do with a £100,000 retirement savings pot.

A typical financial adviser, meanwhile, charges about £580 for telling you how to invest a £200-a-month pension contribution, or between £1,000 and £2,000 for at-retirement advice on your £100,000 pot, according to figures from UK adviser network Unbiased.

JustGiving targeted by criminals for money laundering (BBC), Rated: B

Fundraising website JustGiving has said criminals are attempting to use its site to launder money.

The website told the BBC it had shut down nearly 100 of its appeal pages in the past 18 months because it believed they were fraudulent.

When discovered, no payments were processed, he said.

China

China will step up supervision of overseas investment risks – insurance regulator (Reuters), Rated: A

China will strengthen its supervision of overseas investment risks and capital flows from insurance funds, the insurance regulator said on Monday, adding that it will urge companies to improve their risk monitoring systems.

The China Insurance Regulatory Commission (CIRC) will step up supervision over the use of insurance funds, with focus on “chaos” such as irrational stock market fundraising and overseas acquisitions, said Guo Jing, vice head of the finance and accounting department of the CIRC.

China: WeiyangX Fintech Review (Crowdfund Insider), Rated: B

Shanghai-based BTCC is the largest and first domestic bitcoin exchange in China. On September 14th, BTCC announced that it would immediately stop new user registration and close operation in China on September 30th.

The 2nd China Fintech Conference (2017) will be held on September 17th, 2017 in Beijing.
IDC Financial Insights announced the 2017 Fintech Rankings and Real Results at Finovate Fall New York 2017. This year, 4 Chinese companies won the honor to be named in the 2017 IDC Fintech Rankings. They are Ping An Technology (38), Hundsun Technologies Inc. (54), Pactera Technology International, Ltd. (55) and ECCOM Network System, Ltd. (64).
Last week, China’s financial and educational regulators announced to ban online lenders from offering loans to college students, and encouraged commercial banks to offer micro-credit products for the campus market. As a response to the call, Industrial and Commercial Bank of China (ICBC) has launched its own student loan product Rong e Loan this week.
European Union

Order not going to “Pending” with Klarna (Drupal), Rated: A

Project:  SOFORT Banking for Ubercart
Version:  7.x-3.1

Sofort has been bought by Klarna. Although everything should function as normal according to Klarna, since the switch the order is not going into “pending” after checkout — order status is “in checkout”.

commented 

This is a good place trying to get this sorted. My questions are:

  • Is this a new shop or one that runs for a while and worked OK before?
  • From the screenshot it looks like Sofort sends notifications pretty often, is that true?
  • The expectation is that the first of those notifications should switch the status to pending and confirming that to Sofort so that they know you got it and then they wouldn’t notify you again, right?

commented 

That’s exactly why this is failing. The Ubercart payment module wants to write into its table the value Aus sofort-Überweisung wird Klarna into the field method.

You should notify Sofort AG about this problem and I will do the same.

International

Klarna partners with global technology company Wacom (Klarna), Rated: AAA

Today we are proud to announce a new partnership with global technology company Wacom® that further accelerates Klarna’s expansion in the U.S. Wacom is now bringing our simple retail financing solution to the world of creative interface technology and software.

Financing a purchase over time has historically been optimized for brick and mortar stores. But the online equivalent can often be an ordeal, with redirects, lengthy forms and unclear information. Our process only requires a few fields of information, and lets consumers know instantly if they qualify for the financing solution.

How Incumbents Can Take on FinTech Challengers (LendIt), Rated: A

Digital technology has changed financial services. It has facilitated innovation, increased competition and made the mobile customer experience the key differentiator.

This embodies a strategic threat with McKinsey estimating that legacy financial institutions will see profits decline by up to 60% by 2025 if they fail to evolve, a figure which should be motivating incumbents to look outside of traditional practices for growth and sustainability.

Millennials and digital natives have turned away from traditional banks in search of mobile alternatives. They are drawn to the best products and experience, and banks with the right level of service can win over this large market. Mobile-only banks like N26 are leading the way.

SME lending also offers a significant opportunity for growth. The European Commission’s SME Performance Review estimated just under 23 million small and medium enterprises generated €3.9 trillion in value add and employed 90 million people in 2016-2016, and McKinsey has identified a $350 billion untapped lending opportunity within this sector.

One path is acquisition, which banks like BBVA have followed by acquiring companies like Finland’s Holvi and neobank Simple. This is an expensive option complicated by having to find a company with the right fit for the business.

Given the technology available, a cleaner option would be to build a digital banking spinoff which can operate like a FinTech.

Meridian Proposes to Bring Peer to Peer Lending into the Age of the Blockchain (Crypto Insider), Rated: A

The far reaching nature of the internet has allowed the myriad of local economies that exist in the world to become merged into one, global, interwoven marketplace.

Despite this, it is still incredibly difficult for people to get a loan from an international organisation – without offering some form of collateral and/or proving credit worthiness.

The average size of deposit needed to get a mortgage is 62% of annual income, and in London, it’s 131%.

As a result, only 20% of 25-year-olds own their home today compared with 46% 20 years ago – less than half.

If you have a bad (or no) credit history, it is virtually impossible to borrow from a mainstream lender.

Banks and building societies advertise temptingly low rates, but they only need to apply to 51% of successful applicants, so almost half of all borrowers pay a different rate – probably higher.

Director of Ledgermark LTD, Richard Ochieze, explains:

An alternative should be offered to people who are being let down by the traditional banking system. We believe that the Meridian system can do a lot to alleviate some of the problems that exist in today’s online lending market.

The Meridian service offers users the opportunity to procure a loan of up to one Bitcoin at a time.

To qualify for a loan users must pledge a certain amount of Meridian tokens as collateral.

Meridian tokens can be purchased during the ICO on 12 October 2017 and will then become tradable on all alternative currency exchanges.

India

Google gets into digital payments fray in India (Banking Technology), Rated: AAA

Google is expected to launch a mobile payments app in India next week, according to several news reports. Google Tez, which means “fast” in Hindi is the anticipated name of the payments service, which Indian news outlet The Ken says is “largely fashioned on the company’s global product – Android Pay“.

As TechCrunch notes, “this is a big deal because Google hasn’t made a big push into payments outside of the US.”

ICICI plans payday-type loans in pact with e-tailers (India Times), Rated: AAA

In a first of its kind for India, ICICI Bank will partner with e-commercefirms to provide automated payday loan-type credit to customers at the bottom of the digital pyramid. Unlike other software-based loans, the digital credit planned by the bank will be available to non-customers and new-to-credit borrowers.

Speaking to TOI, Anup Bagchi, executive director, ICICI Bank, said that the bank would price these loans similar to credit card advances. In the West, payday loans are advances that fund the low-income individuals to make up for cash shortfalls until their salary. The difference in the ICICI Bank loan is that for the first month, the buyer will get free credit for up to 45 days. It is only if they do not pay on the due date that borrowers will be charged interest at close to credit card rates.

The bank will lend to new-to-credit customers based on their track record with the e-commerce provider.

Here’s why RBI wants to regulate online P2P lending (VC Circle), Rated: A

“The RBI is concerned that this can go big and get out of control,” says Harish.

Faircent—which is backed by financial institutions like JM Financial, venture fund Aarin Capital and Mohandas Pai-promoted 3one4 Capital—is seen as the largest online P2P lender in India. Other names include Lendbox, Rupaiya Exchange and LenDen Club.

There are typically three models through which such lenders operate, says Aditya Kumar, founder and chief executive officer at Qbera.com, an online lender that began operations in February this year and claims to have a Rs 10 crore loan book. “While there are at least 30-40 P2P players, who connect lenders to borrowers, 15-20 do marketplace lending (where money is raised from banks and other financial institutions) and then there are loan aggregators who have been around for longer,” says Kumar.

While Kumar says the total P2P lending market size would be around Rs 25 crore, Rajat Gandhi, founder and CEO at Faircent, puts the figure at Rs 50-70 crore on an annualised basis.

Figures available with Peer2Peer Finance Association (P2PFA) suggest that the global P2P lending market saw cumulative lending of £8.5 billion during the first quarter of 2017, against £5.8 billion three quarters before. In the same period, the number of lenders grew by a fifth from 1.5 lakh to just over 1.8 lakh.

How to boost your retirement income with P2P Lending (India Times), Rated: A

The discourse around P2P lending has always been centered around what it means for borrowers and the advantages they can derive. However, what gets missed is that P2P lending has the potential to be a great source of investment for the lenders contributing to their retirement fund.

P2P lending is an investment delivering multiple benefits when building a retirement plan:

1. Add Lending to your Portfolio Mix: The adage that talks of not putting all your eggs in one basket still holds true. An investor should not limit his portfolio to only a few asset class, but focus on investing across investment opportunities so that market fluctuations do not have a huge negative impact on their retirement funds.

2. Steady and high returns not Linked to Stock Markets: P2P lending adds to building such a diversified investment portfolio while delivering returns that are not merely comparable, but often preferable to returns from other investment instruments such as mutual funds, stocks, and SIPs.

Lenders on Faircent.com are earning gross returns to the tune of 18% to 24% per annum on an average by building a diversified loans portfolio.

3. Income Generation & Power of Compounding: Another reason that P2P investment does well is because investors can compound their earnings. Lenders are earning back part of their investment, both principal and return, every month.

Asia

Get Me My Wedding Present: How We Run a Micro-Lending Business in Cambodia (Cointelegraph), Rated: AAA

MicroMoney co-founder and CEO Anton Dzyatkovsky on attracting new customers, recruitment issues and risks in greenfield countries.

Now that we’ve opened new offices in Myanmar, Thailand and Sri-Lanka, our decision to start with Cambodia can be seen as a definitive step which enabled us to embrace the largest community of unbanked people in the region, bringing the advantages of Blockchain as the key technology for global financial inclusion.

Cambodia is all about banks

For us as Europeans, the first surprise was the population’s absolute trust in local banks.

The US dollar is as used in Cambodia as the local currency is, and the exchange rate has remained stable for over 20 years. State regulators do not exercise particular pressure on the financial industry, and by the time we stepped into the game, 50 organizations had been involved in the consumer loan industry, each with an average capital of $1.5 mln and an ARPU of $5,000.

30-day overdue loans in Cambodia account for only 0.9 percent of the total, so the PAR ratio (portfolio at risk) is quite profitable (according to the local Central Bank).

Our Cambodian lessons

  • A growing share of the middle class due to the growth of GDP. For instance, Cambodian GDP grew six percent in 2016.
  • A market capable of generating cheap leads. We discovered all Cambodians belonging to the target audience have at least one active Facebook account, and for them Facebook often equals Internet in general: every national mobile operator provides free access to Facebook.
  • Dormant or non-existent competition. in Cambodia there were no paperless lending services without an escrow of land or real estate property.
  • Eager audience in need of a product. when we were checking out the market, we found only five percent of the population had a credit record. According to McKinsey, the number of ‘unbanked’ people in Asian region overall ranges from 65 to 80 percent of the adult population.
  • Collaboration at the local level. It helped us understand local customers and comply with local regulations (in this case you must be ready to assign 51 percent of your newly established company to a local partner).

Peer lending for small businesses (The Star), Rated: A

Funding Societies, which started in Singapore in 2015, is one of the first peer-to-peer (P2P) financing companies to open its doors here in Malaysia in February this year. It is also present in Indonesia.

Wong, who learned about alternative financing while studying at Harvard Business School, says P2P is well-suited for the Malaysian and South-East Asian markets where there is a big gap in SME financing. He estimates financing needs for small businesses in Malaysia to be at RM80bil.

According to Research and Markets, the global P2P lending market was valued at US$26bil in 2015 and is projected to reach US$460bil by 2022, growing at a compound annual growth rate of 51.5% from 2016 to 2022.

Funding Societies has made it to the Fintech 250 list, which is recognised and regulated by Securities Commission Malaysia, to provide financing to SMEs. The company also provides flexible investment opportunities with rigorous risk assessment and returns of up to 14% per year for investors, says Wong.

So far, the company has done more than 800 deals and disbursed more than RM180mil in financing to SMEs in Malaysia, Singapore and Indonesia.

Default rate in the region is low at about 2%.

Bank approves online accounts in foreign currencies (Taipei Times), Rated: A

Taiwanese could soon be able to open bank accounts denominated in foreign currencies on the Internet after the central bank on Thursday gave its go-ahead to the plan.

Local banks could seek approval for the new accounts by the end of this year, or 60 days after the introduction of the new regulations, the central bank said in a statement.

Taishin, the banking arm of Taishin Financial Holding Co (台新金控) and the nation’s largest online lender by the number of accounts, told reporters that it aims to be the first applicant when the notification period begins.

Africa

Outsurance buys CoreShares stake as it launches robo-adviser (BusinessDay), Rated: AAA

Outsurance is to acquire a 25% stake in passive investment manager CoreShares, as the insurance company’s robo-adviser, Outvest, goes live.

The acquisition complemented Outvest, an online, automated advice business, the companies said in a statement on Monday.

In SA, financial advisers, to more effectively service their clients, are predominantly using these platforms, although there are platforms available to retail investors.

 

Authors:

George Popescu
Allen Taylor

How AI is Used to Audit Bank & Credit Card Statements

ai bank statements

Artificial intelligence has been immensely advantageous to the financial sector. The lengthy tedious work which took hours for humans to perform was reduced to seconds by computer software. The use of papers, pens, and abacuses for conventional accounting systems have been transformed into the computerized system of accounting and auditing. Innovation in this field is so […]

ai bank statements

Artificial intelligence has been immensely advantageous to the financial sector. The lengthy tedious work which took hours for humans to perform was reduced to seconds by computer software. The use of papers, pens, and abacuses for conventional accounting systems have been transformed into the computerized system of accounting and auditing. Innovation in this field is so powerful that it has elevated the financial auditing process to a higher plane.

Ocrolus is a financial service provider with two powerful AI products: “PerfectAudit” and “MedicaidGenius.” These products eliminate the need to audit bank and credit card statements manually.

The company was founded in 2014 and is headquartered on Wall Street in New York. After testing and polishing, Ocrolus launched officially in January 2016. Its team consists of four executive members–Sam Bobley, Victoria Meakin, Vikas Dua, and Zoheb Sait. There are an additional 15 employees working on the technology and operations side of the business.

Victoria Meakin serves as president of the company. She was also the co-founder and president of PhoneCharge, an electronic payment processing company that sold to CheckFree for around $100 million. CEO Sam Bobley is a young technology entrepreneur who graduated from the University of South Carolina-Columbia. COO Vikas Dua was previously associated with on-demand Series-C startup Handy.

What Information PerfectAudit Analyzes

PerfectAudit has been described as a fintech platform with artificial intelligence built into an audit methodology in order to perform complex processes. It collects bank and credit card statements for previous years in any format including PDF, e-statements, fax, scanned originals, and photocopy. The platform promptly extracts and filters all the data by accounts, date, description, and dollar amounts for an easy approach. If any data is not automatically ratified, then it is snipped into small images for the precise value. Taking it a step ahead for advanced accuracy, data is crowdsourced to pre-qualified workers for manual data validation simultaneously to ensure that any personal information is not shared. The beginning and end balances of account statements are reconciled with the sum of transactions through an algorithmic reconciliation process. The data is exported in the encrypted form and stored with Amazon Web Services. The combination of Optical Character Recognition (OCR) transaction detection, crowd-sourced data validation, and algorithmic reconciliation has proved to be a winner with more than 99% accuracy.

The platform does industry-specific analysis in computing series of results such as average daily balance, list of the day’s negative balance, list of interbank transactions, list of deposits from outside sources, average deposit by month, max deposit by month, minimum deposit by month, average transaction size, list of NSF transactions, list of alternative lender transactions, list of transactions ending in three zeros or more (0.00), and check to ensure previous month balance is the same as beginning balance of next month. This helps the client to conclude whether the decision to lend should be made or not.

The digitalized financial outcome is made conveniently accessible to clients through a user-friendly interface where all the desired and relevant information can be searched at a click of the mouse. It requires no installations or upgrades as everything is uploaded to the cloud, which is much more reliable and secure than downloaded files.

How Ocrolus Products Facilitate Good Lender Decisioning

PerfectAudit helps control the risk of bad debts and frauds by meticulous decision-making process and with quick automated data validation. Lenders are able to scale loan volume with reduced human intervention. The solution furnished consists of a unique standardized process for every lender. It provides a single platform with processes starting from data collection, filtration, and validation till financial determinations are made. This cycle is incessantly performed, which requires consistent accuracy every time it is done. AI excels in performing these repetitive tasks.

This platform ensures quality, effectiveness, efficiency, and insights in providing complex data reports. It replaces prolonged tiresome manual work with incredibly fast, inexpensive, and reliable solutions. It gives a very high rate of accuracy even when the records are suspicious and fuzzy. Auditors generally use a sampling method in the auditing process while PerfectAudit analyzes 100% of documents and leverages ready-to-use material, which gives an opportunity to the auditors to have in-depth insight into advanced queries to reach improved judgments.

The company’s proprietary technology also allows for regulatory compliance. It helps document the process of credit decision making, and every decision can thus be built backward onto the central algorithm.

The company’ s second product, MedicaidGenius, is targeted towards the Medicaid processors facing the same issue.

Ocrolus is Positioning Itself to Lead the Fintech Niche

The company initially focused on working with family lawyers and now works for auditors, accounting firms, and government departments. dealing with overwhelming documentation work. The company is now prioritizing the lending industry, and fintech lenders are on its radar.

Ocrolus has successfully provided services to more than 100 clients. The biggest is Strategic Funding Source, and other major clients include LendStreet Financial, Lendified, Oscher Consulting Inc., the law office of Gold and Gold, Nolan Stewart PC, Mercer Capital, and Largo Police Department. The company offers customized payment models to fulfill clients’ requirements. Most of the lender clients prefer monthly or quarterly bases, but a few prefer payments-on-time and per-page bases.

The cost-effective tool of Ocrolus has cut short the page-by-page examination into a streamlined, hyper-accurate process. The technology combines the best processes of previous solutions like OCR and combining them with its patent pending IP-in-transaction detection. It also leverages crowdsourcing and revalidation to ensure further accuracy. The automation of data validation saves time and money and eliminates the possibilities of human error.

Author:

Written by Heena Dhir.