Thursday October 4 2018, Daily News Digest

Wealthfront clients who engage with Path save 28% more

News Comments Today’s main news: Funding Circle tumbles. SoFi partners with Kukun. Petal raises $34M on launch day. China is losing its grip on P2P lending risks. ID Finance Mexico profitable after 8 months. Today’s main analysis: Wealthfront: Clients who engage with automated financial advisors save more. Today’s thought-provoking articles: The difference between LendingClub’s, Funding Circle’s valuations. Venture capital investment […]

Wealthfront clients who engage with Path save 28% more

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United Kingdom

International

India

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News Summary

United States

Lending Club weighs in on Funding Circle’s float (Altfi News) Rated: AAA

Funding Circle’s landmark float is done. Its shares are now trading on the main market of the London Stock Exchange.

The stock closed at 364p yesterday, down almost 20 per cent. This was the result of trading during the period between its float last Friday and the stock’s official market debut yesterday.

Having first narrowed its share price to 440-460p per share, Funding Circle ultimately raised £300m at a valuation of around £1.5bn, approximately 15 times its 2017 revenues of £95m.

In an interview, Lending Club’s communications lead Anuj Nayar pointed to what he sees as an ‘incredible difference’ in the way that Funding Circle and Lending Club are currently valued.

SoFi Forms New Partnership With Kukun to Help Homeowners Understand the Remodeling Cost (Crowdfund Insider) Rated: AAA

On Tuesday, online lending platform SoFi announced it has formed a new partnership with home improvement platform Kukun to offer advanced new tools to help homeowners gain a greater understanding of how much their home improvement project could cost and how it can affect the resale value of their home.

SoFi reported that the tools will help homeowners estimate costs and returns on investment for over 28 project types that range in price from $10,000 to $300,000, including renovations and expansions. These are notably the first tools SoFi is offering related to its home improvement loans. Financial calculators that are built by Kukun are notably based on highly normalized and granular property condition marketplace data, in addition to normalized construction permit data (fresh and historic), as well as customer intent from the Kukun marketplace

Petal Card Announces $ 34 Million Round on Launch Day (Lend Academy) Rated: AAA

Petal, a startup aims to deliver on what we’ve often called the real promise of fintech: financial inclusion. The company describes itself as “credit with a conscience” and announced a new fundraising round of $34 million on the same day that they officially launched their credit card product to the public. Backing the vision is Jefferies and Silicon Valley Bank.

The funding will aid the roll-out to a waitlist which includes 100,000 people. The card is aimed at the tens of millions of Americans who have no credit score at all or a short credit history.

Wealthfront Research Shows Clients Who Regularly Engage With Automated Financial Advice Save More (PR Newswire) Rated: AAA

Today, Wealthfront released the 2018 Savings Report detailing the impact their automated advice engine, Path, has on their clients’ savings patterns. In the last year, the company has observed that consistent engagement with Path correlates with a 28% increase in a client’s savings rate. For a 32-year-old client with a $130,000 income and $100,000 in savings, this could mean an additional $1.25 million dollars at retirement.

Source: Wealthfront

Wealthfront’s goal is to fully automate financial decisions to what some people have called, “self-driving money.” Clients will be able to automatically deposit their paycheck into their Wealthfront account and the company will route their money appropriately based on the lifestyle and goals they’ve set. Bills will be automatically paid, emergency funds and 401(k)s will be topped off and Wealthfront will invest the rest in the most tax efficient way. To date the company offers a suite of automated financial planning, investment management and banking related services. To read the full report visit  to start saving and investing today download the app on iOS or Android.

Worldwide Business with kathy ireland Discusses Blockchain Empowered Real Estate Lending with Lending Coin (Digital Journal) Rated: A

Worldwide Business with kathy ireland is pleased to announce an exclusive interview with The Lending Coin’s CEO Sam Warren and CMO Mindy Ngo to discuss their new real estate blockchain program.

“We provide peer-to-peer lending around the world,” says Ngo. “By using the blockchain, we don’t have high overhead costs or errors like traditional financing. That’s why we are able to offer such low interest rates.”

Backed by Popular Bank, the platform is fully operational. With Highly experienced private banking professionals and dedicated office suites in each of its principal New York and Miami markets, the Popular private client program is well-positioned to cater to current and prospective clients.

U.S. Small Business Lending Keeps Rolling in August, According to PayNet (Business Wire) Rated: A

Small business lending continued its blistering pace in August, according to the latest Strategic Insights Report from PayNet, the leading provider of small business credit data and analysis. The Thomson Reuters / PayNet Small Business Lending Index (SBLI) seasonally adjusted originations increased 7% from 145.1 in July 2018 to 154.7 in August 2018, its second-highest reading ever. Year-over-year, the index is up 16%, marking its 11th consecutive increase over the prior year and the fourth double-digit year-over-year gain in the last five months. The rolling three-month index at 148.3 is relatively flat compared to July 2018 but is up 12% on the year.

The SBLI remained above 140 for the eighth consecutive month. The majority of industries experienced lending growth on an annual basis in August, led by Transportation & Warehousing (+20.4% Y/Y) and Mining (+9.7% Y/Y). Lending in Arts & Entertainment (+4.6% Y/Y) climbed to an all-time high in August, and more than half of industries achieved index readings in the top 25th percentile of all readings since 2005. Construction (+8.0% Y/Y) saw its strongest annual growth since November 2016 (despite weakening residential investment) due to strong investment in commercial and industrial structures. Regionally, lending increased across all ten of the largest states in August, continuing the widespread expansion seen in July. On an annual basis, regional growth was led by Texas (+15.3% Y/Y), Illinois (+12.3% Y/Y), North Carolina (+9.9% Y/Y) and Michigan (+9.4% Y/Y) — each of which saw lending reach record highs in August. Meanwhile, Pennsylvania (+7.9% Y/Y) and New York (+6.2% Y/Y) experienced their fastest year-over-year growth since mid-2015.

Making business analytics as easy to use as a smartphone (American Banker) Rated: A

A constant drumbeat in banking is that businesses require ever more data analytics to remain informed and competitive. Yet Envestnet|Yodlee acknowledged its data offerings were out of tune with customer expectations.

Its Envestnet Envision IQ platform, launched in May, offered up a variety of information concerning a bank’s customers and products, but it had no focus, according to a top executive at the data aggregator.

Branch managers will be able to create their own “playlist” of questions to be answered daily, he said, and the system will record and categorize questions asked into favorited questions and most-asked questions.

Source: American Banker

NetSuite angles for speed-to-market advantage over fintechs (American Banker) Rated: A

The biggest bank technology providers are revamping their most popular platforms to offer new features and reach more financial service sectors — all in the name of protecting market share from insurgent fintechs and pivoting peers.

Oracle joined the fray last week, announcing it was adding banking as a service to NetSuite, the venerable cloud-based enterprise resource planning platform it acquired for $9.3 billion in 2016.

San Jose, San Francisco and Boston are the Best Places for Boomer Entrepreneurs (PR Newswire) Rated: A

Key findings

  • San Jose – the seat of the Silicon Valley – is by far the best place for boomer entrepreneurs, with a final score of 93.6. In addition to representing high business income, San Jose boasts the largest share of boomer business founders.
  • San Francisco comes in second with a score of 86.5, thanks to remarkable earnings potential, relative to the other metros on the list, indicating that boomers are sharing in the general prosperity of self-employed entrepreneurs there.
  • Boston earned the third place on the list, with a score of 74.1.
  • New OrleansMiami and Orlando ranked last on the list, with scores of 16.4, 20.5 and 21.1, respectively.

See the full study here.

U.S. Bank Simple Loan 2018 Review (Nerdwallet) Rated: A

Cost: The Simple Loan costs $12 for every $100 borrowed, which translates into an annual percentage rate of 71%. That’s much cheaper than typical payday loans, where the average rate is 391%, and it’s due after three months, not the two-week cycle that is common of payday loans.

Auto-pay discount: U.S. Bank allows both auto-payments and manual payments. Manual payments cost extra, $15 per $100 borrowed, which is equal to 88% APR.

Payments are reported to the credit bureaus, so your score can increase if you make on-time payments.

RPA: the new tech transforming banking (Kyron Systems email) Rated: A

The number of U.S. banks has almost halved since 2007, from 8,400 to about 5,500 in 2017, and the reason is that it costs more. Rising AML and KYC compliance costs combined with regulatory fines are continuously putting banks out of business, especially small banks; U.S. Fed research indicates that adding just two new employees to a small bank’s compliance team would make a third of these banks unprofitable.

In response, banks are turning to a new field of virtual assistants: RPA, which stands for ‘robotic process automation’ but there are no actual, physical robots, rather virtual bots that run in the background on employee computers, learning what processes the bots can do instead, and then doing exactly that. Although RPA is being implemented in almost every industry, it dovetails particularly well with banking because there are so many repetitive processes that can be automated, everything from risk exposure calculations to compliance reports.

More information on RPA can be found here.

White Oak Healthcare Finance Closes Subsequent SNF Portfolio Financing for Granite Investment Group (Business Wire) Rated: B

White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as sole lender and administrative agent on the funding of a $28 million senior credit facility for Granite Investment Group (“Granite”). Secured by three skilled nursing facilities in Texas, the funds refinanced existing debt and provided a dividend for investors. White Oak recently announced it financed a separate portfolio of four skilled nursing facilities in Texas for Granite.

“We are happy to have had another opportunity to work with Granite. This transaction materialized as an opportunity to provide a bridge-to-HUD financing for an under-levered portfolio. As an active lender in the space, we can optimize our offerings to meet each company’s unique business needs,” said Isaac Soleimani, Managing Director and Partner at White Oak.

Granite Investment Group is a privately held, real estate investment firm focused on multi-family, senior housing, and post-acute care.

Volunteer Organization Tackling the Crippling Student Debt Facing Americans (Crazy Good Turns email) Rated: B

A new non-profit, Shared Harvest Fund has created an impactful way to pay down student debt.  Shared Harvest Fund has created a program that partners non-profit organizations in need of workers, with students looking to not only pay down their debt, but do something with purpose as well.  Once the connection is made, students volunteer a set amount of hours per month, and the non-profit organization in turn sends a check directly to the lender of the student’s choice.

The founders of Shared Harvest Fund; Dr. Briana DeCuir, Dr. Joanne Moreau and Dr. NanaEfua B.A.M,  will be featured on the October 17th Crazy Good Turns podcast, a non-profit podcast that shines a light on people and organizations making a positive impact in the world, to share the in’s and out’s of their platform and discuss in detail how students looking to pay down debt—or non-profits looking for volunteers—can be a part of the Shared Harvest Fund community.

Podcast Topics Include:

  • The founders discuss how and why they created the platform
  • The negative physical and mental consequences that carrying debt has on borrowers and the positive effects of volunteering to help others.
  • How unaware most students are about the length of time it takes to pay off student loans.
  • How corporations can increase their corporate responsibilities goals by supporting the Shared Harvest Fund.

Early-Stage Financial Technology Firms to Benefit from TransUnion and FinTech Sandbox Partnership (Business Wire) Rated: B

FinTech Sandbox today announced it has entered into a partnership with TransUnion to help early-stage financial technology firms launch in the marketplace. As part of the partnership, TransUnion’s Startup Credit Kit will enable startups to test business model concepts and refine their go-to-market strategies.

United Kingdom

Funding Circle rallies as it makes official market debut (The Telegraph) Rated: AAA

Shares in Funding Circle rallied as it made its official market debut on the London Stock Exchange today, in a move likely to quell fears over market uncertainty.

The peer-to-peer lender tumbled as much as 8pc in the company’s first official day of trading, falling well below the 440p per share it had floated at last week, before later jumping back up.

Around 20pc had been wiped off their value during conditional trading, which began last Friday and ran through to Tuesday evening. Shares dropped as low as 340p on Wednesday, before later rising to 390p.

Intrust Bank driving small business opportunities with Funding Circle partnership (Witchita Business Journal) Rated: A

The original partnership was announced in January. It expanded in June and Intrust increased its commitment to more than 500 loans.

Brian Heinrichs, CFO at Intrust, says the bank is now at around 400 of those commitments, though he declined to say what amount of lending that represented for the bank.

Heinrichs says Intrust is the only bank partnered in such a way with U.K.-based Funding Circle.

Funding Circle’s Desai makes top 10 of ‘Tech 100’ list (Peer2Peer Finance) Rated: B

FUNDING Circle’s chief executive Samir Desai has been named as one of the top 10 most influential people in the British tech industry.

The peer-to-peer pioneer appears alongside fellow fintech leaders such as Starling Bank chief executive Anne Boden, and Tom Blomfield, chief executive of Monzo.

The Tech 100 list is compiled by Business Insider and aims to celebrate “the 100 coolest and most ground-breaking people in the UK tech industry over the past 12 months”.

British banks shudder at Goldman Marcus launch (financial Times) Rated: A

Marcus by Goldman Sachs recently launched in the UK and the biggest high street banks are only beginning to grapple with what the new competitor means for the market.  Marcus has seen significant success in the U.S. market and is hoping to bring that to the UK, they currently have a savings rate offer 3 times the traditional powers and have plans to launch more products soon.

The news is not all bad for high street powers as data has shown customers thus far have stayed loyal to their bank and regulations around use of deposits make it a bit trickier for Marcus to repeat their U.S. model.

Keith Horowitz, analyst at Citigroup, tells the FT where the biggest opportunity could exist, “The big key for Goldman ultimately is customer data, that’s the holy grail for banking, creating an open financial marketplace platform that can also utilise their huge balance sheet.”

Orca Money opening up the peer-to-peer lending market to investors (Proactive Investors) Rated: A

LendInvest announce new bridging rate cuts (Property Reporter) Rated: A

Online property finance platform, LendInvest, has announced that it has cut rates across its Bridging product range and introduced a new Bridge to Term transition service.

The lender has cut rates on its Residential and Commercial Bridging, Development Exit and Auction Finance products. Monthly interest rates now start from 0.55% for Residential Bridging, Auction and Development Exit and 0.79% for Commercial Bridging.

A new Bridge to Term service has also been introduced that offers borrowers looking to purchase residential property at auction, undertake refurbishment or carry out minor development the opportunity to then switch to one of LendInvest’s Buy-to-Let mortgages.

Property Fintech LendInvest Adds CFO to Board of Directors (Crowdfund Insider) Rated: B

LendInvest, an online lending platform for property finance, has announced the addition of Chief Financial Officer, Angelie Panteli, to the board of directors.

China

China doesn’t yet have a grip on P2P lending risks (East Asia Forum) Rated: AAA

China’s online peer-to-peer (P2P) lending platforms have been falling like dominos. This has sparked investor panic, exposing deeper risks long hidden in China’s shadow finance sector. It is yet to be seen if Chinese regulators will be able to manage the risks and effectively regulate P2P in the same way they have done in other areas of shadow banking.

Shadow banking from institutions supervised by empowered central regulators is shrinking. One of the best ways to measure shadow credit funded by banks is through their lending to non-bank financial institutions. It rose 80 per cent year-on-year in February 2016, but over the last year has shrunk by 4 per cent.

The number of surviving P2P platforms has been on a gradual decline since November 2015, but regulators were caught off guard when failures suddenly accelerated in mid-June 2018. Investors began to panic and tried to pull their money out, sparking yet more failures. Many protested for government help when they found that their savings had been stolen or sunk into bad loans.

Outstanding loans then plummeted by 300 billion RMB (US$44 billion), from 1.3 trillion RMB (US$190 billion) to just under 1 trillion RMB (US$146 billion). They fell again in August, but the outflows and failures moderated. The storm may have passed, leaving most platforms intact for now.

European Union

German Challenger Bank Kontist Secures Series A Investment (Crowdfund Insider) Rated: A

Kontist, a Berlin-based challenger bank, announced on Tuesday it secured a Series A investment to expand the financial services available to freelancers, small businesses, and entrepreneurs. The round was led by Haufe Group, one of Germany’s providers of digital workplace solutions and services with participation from existing investor Danish company builder, Founders.

International

VC Investment in Blockchain Startups Is Up 280% So Far This Year (CoinDesk) Rated: AAA

As the crypto industry sees a decline in initial coin offerings (ICOs) amid regulatory concerns and major losses across token markets, traditional VC investment is once more on the rise.

In its latest report, blockchain research group Diar reports that blockchain and cryptocurrency-focused startups have raised nearly $3.9 billion through VC investments in the first three quarters of the year – that up 280 percent when compared to the whole of 2017, it says.

Based on data from Pitchbook, the report indicates that number of deals also nearly doubled this year.

Source: CoinDesk

Alongside the increase in VC deals, the average size of crypto and blockchain investments has increased by over $1 million in 2018. Ten of the largest blockchain and crypto investments in 2018 saw the recipient companies raise more than $1.3 billion in total venture capital. While one of the firms has a native token (DFINITY), the rest represent equity investment, says Diar.

Source: CoinDesk

Tencent-backed mobile bank N26 launches in the UK and plans US expansion by early 2019 (CNBC) Rated: A

German app-only bank N26 has launched in the U.K. and is eyeing another expansion to the U.S. in the first quarter of 2019.

The Berlin-based firm, which is backed by Chinese tech giant Tencent, German insurer Allianz and PayPal co-founder Peter Thiel, said on Thursday that its services are now available in Britain, on a limited basis.

Initially, a select number of “early adopters” will be given access to the app in the U.K. More than 50,000 people who have signed up to a waiting list for the U.K. launch will be on-boarded on a phased basis, and a broader launch is planned for next month.

India

Here is Why Flipkart is Keen to Enter the Financial Services Sector (Entrepreneur) Rated: AAA

Looks the Indian startup’s ecosystem is smitten by the opportunities fintech industry is benefiting of. No wonder, we have unicorn startup companies such as the Flipkart looking into tap the market.

Market buzz says that Flipkart is in the middle applying for an NBFC license to extend the line of credit to its sellers and customers. With time, it would expand its financial services offerings beyond its e-commerce platform.

The credit problem in India is beyond surreal. For example, the small and medium enterprises sector (SMEs), which contributes between 30-40 per cent in the country’s GDP, suffers majorly because of its unattended financing need and the gap is as big as around USD 650 billion.

Giving an example of the consumer lending space, Gaurav Chopra, Founder & CEO, IndiaLends says this segment is expected to be a USD 1.2 trillion opportunity for the organised lenders, implying a 22 per cent compound annual growth rate over the next three years.

Credit Card EMI vs P2P Loan: Which one should you opt for? (Economic Times) Rated: A

Credit cards can be extremely handy when it comes to making an impulsive high-ticket purchase. All you have to do is to flash the card and walk away with your purchase. Many credit card companies would immediately offer you an option to pay back the money in equated monthly instalments or EMIs.

Compared to credit cards, personal loans can be cheaper. “Credit cards can charge somewhere around 0.1% every day. Making the annual charges go up to 36% in some cases,” says Tanwir Alam, Founder & CEO, Fincart.

P2P loans, unlike the usual bank loans, offer short-term tenures starting 3-36 months and can be looked as an alternative to credit cards, depending on the requirement of the borrower. The interest rates are anywhere between 12 and 28%.

Aadhaar verdict sends fintech players back to the drawing board (The Week) Rated: A

The recent Supreme Court verdict on Aadhaar may bring in tough times for the fintech companies who used to conduct eKYC (electronic Know Your Customer) via Aadhaar. Not mandating Aadhaar for the verification process has sent some fintech players back to the drawing board to work out strategies for physical verification, which is usually a time-consuming and expensive process. Experts and industry representatives with whom THE WEEK spoke to feel that verification of customers will eventually move to a traditional mode of verifying individuals through physical ID proof.

Bhavin Patel, CEO and co-founder of LenDenClub, a P2P digital lending platform, says that a physical KYC check takes around 24 hours or more now in an ideal scenario and this change in processing will result in longer disbursal time and higher cost for the consumer.

Asia

VN Central Bank working on framework for P2P lending (Vietnam Net) Rated: AAA

Anh spoke at a recent workshop on international experiences in P2P lending held in Ha Noi with the participation of more than 100 representatives, including financial management authorities from China, Singapore, Thailand and Indonesia.

With the rapid proliferation of mobile devices, artificial intelligence and big data, P2P lending—the practice of lending money to individuals or businesses through online services that match lenders with borrowers—has developed rapidly around the world in recent years.

Although P2P can create enormous socio-economic benefits, it also contains potential risks for the relevant parties, he said, adding that it is necessary to strictly monitor this field to mitigate the risks and improve awareness of the relevant parties.

Through this model, lenders can earn higher returns than they can get from banks while borrowers, especially individuals and micro businesses, can get money at lower rates. But the lending is also fertile ground for high-tech crimes. China had to eliminate some 160 online lending companies as they were in fact high-tech criminals working to cheat investors.

Latin America

ID Finance Mexico operations reaches profitability within eight months of launch (Finextra) Rated: AAA

The Mexico operations of ID Finance, the emerging markets fintech company, has reached profitability in just eight months since launching in the region.

The announcement represents a key milestone for the business as it continues its rapid expansion across Latin America. It currently operates in Mexico and Brazil.

Authors:

George Popescu
Allen Taylor

Tuesday September 18 2018, Daily News Digest

Student Loan Balance by Servicer and Loan Status

News Comments Today’s main news: Funding Circle U.S. sees loan defaults go up. OnDeck sales expectations. LendInvest raises $39.5M. Zopa boosts target interest rates on all products. UnionPay launches European expansion. Qatar Investment Authority could invest in Lufax. Today’s main analysis: Navient, Nelnet and the student loan market. Today’s thought-provoking articles: This former Googler, Facebook employee is running with SoFi. What’s […]

Student Loan Balance by Servicer and Loan Status

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United States

Funding Circle Fund Sees US Loan Defaults Rise (PYMNTS) Rated: AAA

In August, more corporate borrowers defaulted on their loans issued by Funding Circle‘s U.S. operations than they did previously in 2018. According to Peer2Peer (P2P) Finance News reports on Friday (Sept. 14), the Funding Circle SME Income Fund (FCIF) revealed there were seven corporate loan defaults in during the month, up from the year’s average so far of six per month.

Still, the company noted, the value of those defaults has inched higher, too. Reports said the FCIF’s net asset value return for August dropped to 0.1 percent from 0.4 percent a month prior, with analysts citing rising impairment charges as a result of the U.S. loan defaults.

How This Former Google And Facebook Employee Is Helping People Reach Their Financial Goals (Forbes) Rated: AAA

Libby Leffler, vice president of membership at Social Finance (SoFi), negotiated with the tooth fairy as a child. “Looking back, I think this lighthearted family story speaks volumes about the way I think about negotiating or knowing one’s worth. Throughout my entire career, I’ve never been shy to ask for a raise or promotion – or both,” she says.

As an adult, Leffler continues to “lean in” and was even business lead to Sheryl Sandberg, the woman who started the Lean In movement. Leffler worked at Google and Facebook before attending Harvard Business School and working at SoFi, a San Francisco-based lending and wealth management company founded in 2011. Now the 

Brokerages Expect On Deck Capital Inc (ONDK) Will Announce Quarterly Sales of $ 94.63 Million (Baseball Daily) Rated: AAA

Equities research analysts expect On Deck Capital Inc (NYSE:ONDK) to announce sales of $94.63 million for the current quarter, Zacks Investment Research reports. Four analysts have made estimates for On Deck Capital’s earnings, with the lowest sales estimate coming in at $83.41 million and the highest estimate coming in at $98.74 million. On Deck Capital reported sales of $83.67 million during the same quarter last year, which indicates a positive year over year growth rate of 13.1%. The firm is scheduled to report its next quarterly earnings results on Monday, November 5th.

On average, analysts expect that On Deck Capital will report full year sales of $373.98 million for the current year, with estimates ranging from $331.20 million to $385.61 million. For the next year, analysts forecast that the firm will post sales of $417.35 million per share, with estimates ranging from $361.41 million to $435.88 million. Zacks Investment Research’s sales averages are an average based on a survey of research analysts that that provide coverage for On Deck Capital.

Navient & Nelnet and the Student Loan Market, OnDeck milestone (Peer IQ) Rated: AAA

As discussed in a recent piece in American Banker, Navient and Nelnet are increasing their role in the private student loan market. Both companies are big players in the market for servicing federally funded student loans. Together, they service $405 Bn with approximately 38% of the market share as of March 31, 2018. Nelnet, which currently focuses on servicing student loans, recently applied to for an industrial bank charter.

Source: Peer IQ

In April 2014, Navient was spun out of Sallie Mae, splitting the business in two. Sallie Mae continued its consumer banking business as well as origination of private student loans. Navient continued with loan management, servicing, and asset recovery. After the split, Navient kept 99% of the legacy company’s FFELP loans and 83% of the legacy company’s private loans. In October of last year, Navient acquired Earnest, a student, and personal loan lender, for $155 Mn in cash. The acquisition allowed Navient to begin originating student loans under the Earnest brand (as they were previously not allowed to make loans under any brand due to a non-compete with Sallie Mae). Starting in 2019, Navient will be allowed to compete directly with Sallie Mae under the Navient brand.

Lehman Brothers – What It Can Teach The Cryptocurrency Business About Lending (Block Tribune) Rated: A

It was all thanks to a niche security asset that had exploded in popularity: collateralized debt obligations (CDO), which packaged individual loans, such as credit card debt and mortgages, into a secondary market product for investors. In just six years, from 2000 to 2006, the CDO market exploded with sales multiplying from $69B to $500B.

Lehman Brothers, the fourth largest investment bank in the US, invested heavily into these securities, and enjoyed incredible profits as a result. In 2007, Lehman reported net income of $4.2B on $19.3B revenue.

The majority of CDOs were comprised of subprime mortgages. Rated triple-B, at the bottom of investment-grade bonds, these mortgages had been distributed to borrowers with higher-than-average credit risk. Computer models had packaged these CDOs into “tranches” based on interest rate and risk, making CDOs incredibly opaque and complex. These models also assumed that the housing market would continue its upward trajectory.

Property Genius Harnesses Big Data to Help Investors Capitalize on (oaoa) Rated: A

Property Genius announces the launch of its proprietary, end-to-end research and marketing platform which harnesses big data to streamline the entire process of finding and investing in Off-market and Wholesale real estate. Built specifically with the real estate professional and investor in mind, Property Genius aims to solve a long-standing problem for the industry by organizing extensive amounts of assessor data from numerous sources into one convenient and customizable dashboard to improve investment opportunities. The company’s initial launch utilizes property data in Colorado – with more states soon to follow – helping investors find, purchase, and reap the rewards on opportunistic properties including foreclosures, absentee owners, and other distressed properties.

The founder of LendingClub, ousted two years ago, pledges not to make the same mistakes with his new company (CNBC) Rated: A

More than two years after his ouster from LendingClub, Renaud Laplanche still owns millions of dollars worth of stock in the company he created, even though he’s since started a rival online lender that’s rapidly growing.

For his second act in financial services, Laplanche is focused on avoiding past mistakes. He was forced to resign suddenly from LendingClub in May 2016 for a convoluted set of events involving the questionable sale of certain loans by the company and a lack of transparency with the board.

Laplanche started his new company, Upgrade, in August 2016, three months after leaving LendingClub. His start-up passed $100 million in monthly loan originations in April. By way of comparison, LendingClub, founded in 2006, averaged almost $1 billion in monthly originations in the second quarter.

Charles Anderson of Currency (Lend Academy) Rated: A

One of the largest verticals in all of lending is equipment finance. There is $1.1 trillion worth of equipment financed each year and yet only a tiny fraction of this number is financed in an all digital process.

Our next guest on the Lend Academy Podcast has made it his mission to change that. Charles Anderson is the CEO and Co-Founder of Currency, the world’s first digital equipment finance platform. They are applying technology, often for the first time, to all phases of the equipment buying process.

CoreLogic Launches AutomatIQ Borrower (Corelogic) Rated: B

CoreLogic (NYSE: CLGX) today announced AutomatIQ Borrower, phase one of a comprehensive new underwriting solution designed to help lenders streamline their current mortgage workflows by digitizing, standardizing and automating borrower analysis and verification. By pulling all of the disparate borrower verification tools together into one integrated solution delivered from one provider, AutomatIQ Borrower will help lenders:

  • Reduce underwriting costs and time to close
  • Improve overall loan quality and user experience
  • Increase trust at each step of the borrower underwriting workflow

Hurricane Florence / Lendr (Lendr Email) Rated: B

“All of our clients have been contacted or we will continue to try and get in contact with them and support them in any way we can. We will suspend payments for the rest of September for any client that is affected by Hurricane Florence. Most clients will come back on a reduced payment schedule for a short period of time. In the past we have provided additional funding for clients in need to help get their business back on track due to these types of natural disasters.”  – Tim Roach, CEO of Lendr. 

United Kingdom

LendInvest raises $ 39.5M to grow its P2P property finance platform (TechCrunch) Rated: AAA

Today, LendInvest, a peer-to-peer platform that connects property buyers in the UK with people willing to finance those purchases (bypassing traditional mortgage lending infrastructure in the process), announced that it has raised around $39.5 million (around £30.5 million) in a Series C round of funding led by existing investor Atomico, which participation also from GP Bullhound and Tiger Management (founded by hedge fund investor Julian Robertson).

The plan will be to use this funding to continue to develop its technology and grow business into more the traditional (and bigger) mortgage business. A spokesperson for the company says there are no plans to extend beyond the UK market for now.

LendInvest Is Gearing Up To Be London’s Second Peer-To-Peer IPO (Forbes) Rated: A

Just weeks after Funding Circle launched its $2 billion IPO plans, London’s next peer-to-peer lender is gearing up to follow suit.

LendInvest, the online platform, which matches investors and institutions with borrowers looking for property finance, today announced a “pre-IPO” funding round of $39.5 million.

Since launching in 2008, LendInvest has facilitated over $1.9 billion in loans to buy, build or renovate some 5,000 homes across the U.K., turning a profit consecutively over the last four years.

With fresh capital raised from existing backer Atomico, along with new investors GP Bullhound and Tiger Management, its management seems to be signaling that they’re finally ready to float the business.

Zopa boosts target interest rates across all products (Peer2Peer Finance) Rated: AAA

ZOPA has boosted its lender returns in response to the recent Bank of England interest rate rise.

The peer-to-peer lender is now offering target returns of 4.5 per cent on its Core product and 5.2 per cent for its Plus account, both of which can be held in an Innovative Finance ISA (IFISA) wrapper.

Target returns were previously four per cent and 4.6 per cent respectively.

Church of England considers Wonga rescue (Charity Finance Week) Rated: A

The Church of England is considering bringing together a group of interested parties to buy the £400m loan book of collapsed company Wonga.

Payday loan company Wonga entered administration at the end of August, with Grant Thornton appointed to conduct an “orderly wind down” of the business and sale of assets.

In response to this announcement, Labour MP Frank Field wrote to the Archbishop of Canterbury Justin Welby, urging him to build a consortium of “people of good will” to buy the loan book “in a way which protects poorer people”.

Orca Money to Raise 500K via Equity Crowdfunding – Interview with CEO Iain Niblock (P2P Banking) Rated: A

Orca Money is currently running an equity crowdfunding campaign on Seedrs to raise 500K GBP at a premoney valuation of 1.7M GBP. Anybody can invest in Orca Money shares with a minimum investment amount of 10 GBP applicable. I interviewed the Orca CEO Iain Niblock

You are currently raising money. Who are you raising from and what do you plan to use the capital for?

Our investment is open to the public on the Seedrs equity crowdfunding platform. Investors across the EU can register and invest in the Orca business. The proceeds will allow us to expand our userbase, integrate with more lenders and to further develop the functionality of our platform.

Prior to launching the crowdfunding campaign, we secured a portion of this investment from two institutional funds based in Northern Ireland and a number of leading angel investors. It’s great to be combining these investors with crowd investors.

CTO on our doorstep: David Genn, CTO at Goji, on bridging the gap between the technology team and stakeholders (Information Age) Rated: A

When the regulator comes knocking, companies had better be ready. So it is with the peer-to-peer lending sector which was recently the subject of a 156-page review on the part of the Financial Conduct Authority (FCA) which has proposed a new set of rules for the still formative P2P lending sector.

The issues being addressed by the FCA are as much a technology challenge as they are a regulatory one, particularly when the companies involved are very young and the technology they are utilising is quite new and innovative.

Lenders flock to Scotland as P2P sector takes off (Peer 2 Peer Finance) Rated: A

SCOTLAND looks set to become a peer-to-peer lending hotspot despite fears about the potential impact of Brexit and another independence referendum.

This year has seen lenders such as Assetz Capitaland The House Crowd expanding their presence in the country, while professional services firms Pinsent Masons and Deloitte have formed partnerships with Fintech Scotland to drive the financial technology sector’s growth. LendingCrowd already has its headquarters in Edinburgh, as does ShareIn, which provides a white label crowdfunding technology solution.

China

Platform registers 94 mln online loans (CGTN) Rated: AAA

Online loans worth 116 billion yuan (16.97 billion US dollars) had been registered by the end of August on a unified platform operated by an industry association in China, amid a nationwide campaign to reduce financial risks.

The volume was up 18 percent from a month ago, the National Internet Finance Association (NIFA) has said.

The platform, established in June 2017 had recorded 94.31 million lending deals submitted by 66 online agents, which involved a total of 3.6 million borrowers.

Online registration starts for victims of illegal fundraising cases (Infosurhoy) Rated: A

China’s Ministry of Public Security has started registering investors of 50 illegal fundraising cases involving online peer-to-peer lending platforms to better protect their legitimate interests.

Investors of these platforms can register their information and obtain the latest development of related cases at .

Public security authorities will ensure utmost transparency in their investigation and do their best to recover the losses of investors, an official with the ministry’s economic crime department said.

Registration will open for investors of more cases, the official added.

European Union

China UnionPay kicks off European expansion with UK launch (Financial Times) Rated: AAA

China UnionPay is the biggest payment card issuer in the world and is now launching their cards in the UK, the move will challenge Visa and MasterCard and is the first step in a planned European expansion. The company has struggled to compete with Alipay and WeChat Pay in China

Klarna Bank to acquire UK’s Close Brothers Retail Finance (Compelo) Rated: A

Payment provider Klarna Bank has agreed to acquire Close Brothers Retail Finance (CBRF) from UK merchant banking group Close Brothers Group for an undisclosed sum.

Klarna said that the acquisition of CBRF will enable the payments firm to expand its retail financing services for customers in the UK market.

Banks jump on to the fintech bandwagon (Financial Times) Rated: A

The Treasury Report on fintech released a few weeks ago talks about the promise of data sharing between big bank and technology. The author in the FT questions this enthusiasm, wondering if these tech companies can be trusted with financial data. The article points out that while the EU started allowing data sharing earlier this year it comes with several provisions to protect consumers.

International

Qatar Fund Is Near Investment in China’s Top Online Lender (Bloomberg) Rated: AAA

The Qatar Investment Authority is in advanced talks about an investment in Lufax, China’s biggest online lender, as the sovereign wealth fund seeks to tap into the world’s second-largest economy, people familiar with the matter said.

QIA has been negotiating the potential purchase of a minority stake in Lufax, which is an arm of China’s Ping An Insurance (Group) Co., according to the people. It could spend about $500 million to $1 billion, the people said, asking not to be identified because the matter is private.

A deal could be announced as soon as the next few weeks, the people said. Shanghai-based Lufax, which became profitable for the first time last year, completed a fundraising in 2016 that valued it at $18.5 billion.

What is happening in the IPO market? (Alpha Street) Rated: AAA

The IPO market is abuzz as usual, with many companies inching closer to public listing, while a few have backtracked from their plans. Let’s take a quick look at what you can expect in the coming days.

Cloud-based financial planning company Anaplan Inc. intends to raise up to $100 million through an IPO to meet the working capital and fund operations. The company has roped in former Tesla (TSLA) CAO David Morton as its CFO. It is currently working with an exchange to list the shares under the “PLAN” ticker. It was founded in 2006 as a cloud-based business planning and performance management platform based on a single hub.

Funding Circle Holdings is inching closer to a public listing as the company plans to raise gross proceeds of about 300 million pounds. Shares will be listed on the London Stock Exchange. Funding Circle is a small and medium enterprise loans platform with operations in the UK, US, Germany, and the Netherlands.

Australia

ASIC warns all fintech business lenders over contracts (AFR) Rated: AAA

The corporate regulator wants all online business lenders to remove unfair terms from their contracts just like Prospa has done, indicating start-ups that want to compete against banks will be held to similar regulatory standards as community expectations lift following the royal commission.

In a letter sent last week to Brad Kitschke, CEO of industry lobby group FinTech Australia, the Australian Securities and Investments Commission declared “action [is] required”.

Why this small business owner used a peer-to-peer personal loan for funds (Finder) Rated: A

One of these owners is Mel Flannagan, owner of software and design company Nook Studios. Flannagan’s work is project based and primarily with government departments, so cash flow needs to be managed carefully.

“Sometimes contracts just take a little bit of time to come through,” Flannagan says. But while Nook Studios is a unique business, she says their cash-flow situation is quite common, with the cyclical nature of waiting for invoices to be paid just being “the nature of having a small business”.

To ensure she had the funds to keep her business going, Flannagan didn’t even consider a traditional business loan because she knew she wouldn’t qualify.

Asia

Going international is nice on PowerPoint but difficult to execute, says Grab president Ming Maa (Deal Street Asia) Rated: AAA

“I suspect going international is a nice thing on PowerPoint, but the actual execution of that is very difficult,” Grab president Ming Maa said in a fireside chat at DEALSTREETASIA‘s Asia PE-VC Summit 2018 last week.

Drawing parallels with Meituan-Dianping’s tumultuous ride-sharing journey, Maa said, “We saw that Meituan spent somewhere around $500 million in two different cities in China. In that process, they spent a tremendous amount of capital on subsidies. What that tells me is – for a company to spend so much on subsidies means there are natural barriers to entry for this business.”

E-Commerce Platform KinerjaPay Launches P2P Lending Platform “KFUND” (Crowdfund Insider) Rated: A

KinerjaPay Corp., (OTCQB: KPAY), a digital payment and e-commerce platform, announced on the launch of its new peer-to-peer (P2P) lending platform, KFUND. According to Kinerjapay, PT. Kinerja Simpan Pinjam has been officially registered and will manage KFUND brand as an online lender that focuses on micro-lending activities.

Kinerjapay reported that KFUND will mainly target consumer sectors to provide micro-lending facilities in the range of $100 to $1,000 on biweekly or monthly term loans.

Africa

The Digital Transformation of Banking – Driving Constructive Economic Outcomes from the FinTech Ecosystem in Africa (Global Banking and Finance) Rated: AAA

The hugely successful events in our Finnovation Africa Series in Uganda, Ethiopia, Kenya and South Africa saw more than 800 thought leaders, FinTech pioneers and bankers representing the foremost financial institutions from across the continent gather to address how FinTech can contribute to the positive and profitable transformation of financial services in Africa. From banking powerhouses to start-up FinTech disruptors, Finnovation World sets the stage for the positive and profitable transformation of financial services –and Ethico Live! is now excited to announce the expansion of the conversation to Finnovation Ethiopia 2018for the 2nd year at the Radisson Blu Addis Ababa on the 1st of November 2018. The event will seek to harness the FinTech revolution to boost strategic economic priorities such as financial inclusion and deepening – and how FinTech can make a positive and profitable difference in Africa.

With a focus on the most significant technologies driving the financial services paradigm shift, including Blockchain & Cryptocurrencies, Open Banking & APIs, Payments innovation and Mobile Money, Finnovation Africa: Ethiopia 2018 also features a number of innovative sessions such as The Wolves’ Den, Sheba Valley: Harnessing Ethiopia’s FinTech boom, Inside the Investor’s Mind,and live-on-stage interviews with international Finnovators and African FinTech pioneers.

Authors:

George Popescu
Allen Taylor

Monday June 25 2018, Daily News Digest

FREED 2018-1 collateral characteristics

News Comments Today’s main news: SoFi launches SoFi Money. Robinhood in talks with regulators about bank products. Orca Money plans to double in size this year. Monzo, TransferWise partner. Banco BNI Europa drops 50M Euro into Linked Finance. Today’s main analysis: FREED 2018-1 Deep Dive. Today’s thought-provoking articles: What financial service firms can learn from direct-to-consumer companies. Graduate degrees with […]

FREED 2018-1 collateral characteristics

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi’s Latest Product Called “SoFi Money” is Here (Lend Academy) Rated: AAA

At time of writing, SoFi is paying 1.1% on their account which is a competitive rate when you consider that it is a hybrid account. Other banks who continuously offer the highest rates available on the market such as Goldman Sachs’ Marcus are currently paying around 1.7% on savings accounts. The largest banks in the US such as Bank of America, Citi and JP Morgan Chase pay between 0.01% and 0.1% on savings accounts which varies depending on deposit amounts and current promotions.

Source: Lend Academy

Continued Yield Curve Flattening, FREED 2018-1 Deep Dive (PeerIQ), Rated: AAA

The yield curve continued its unrelenting flattening after last week’s Fed meeting. The spread between 10-year and 2-year treasury yields now stands at 36 bps (about 1 to 2 rate hikes from inversion). An inverted yield curve and lower-long term yields have presaged economic slowdown or recessions in the past. You can read our analysis of the Fed’s interest rate decision here.

FREED 2018-1 Deep Dive

FREED 2018-1’s collateral pool consists of 2 types of loans – 61.6% Freedom Plus (F+) and 38.4% Consolidation Plus (C+).

F+ Loans: F+ loans are unsecured consumer loans to near prime and prime borrowers. F+ collateral has a WA age of 8 months and WA remaining term of 41 months. The WA current FICO score of the pool is 723 and the WA interest rate is 14.8%.

C+ Loans: C+ loans are offered to select qualified debt settlement clients as an option to shorten the duration of their debt settlement program by making funds immediately available to fund settlements reached by Freedom Debt Relief. C+ collateral has a WA age of 8 months and WA remaining term of 44 months. The WA current FICO score of the pool is 654 and the WA interest rate is 22.9%.

Source: Source: PeerIQ, KBRA, DBRS
Source: PeerIQ
Source: PeerIQ

There’s plenty more. See the rest of the charts here.

Robinhood is said to discuss bank products with regulators (American Banker) Rated: AAA

Robinhood Markets has more than 4 million U.S. consumers using its free stock-trading platform. Now, it’s in talks to offer them other banking services like savings accounts, according to people familiar with the matter.

KeyBank Acquires Digital Lending Platform For Small Businesses Bolstr (Crowdfund Insider) Rated: A

On Wednesday, KeyBank announced it has acquired digital lending platform for small businesses Bolstr. According to Key, the fintech software, which is expected to be implemented later this year, will enable the banking group to provide faster and easier access both to SBA loans and to traditional capital for business owners. The acquisition comes just after the OCC recently called on banks to issue more SME loans. 

Capital One Co-Founder Is Making a Bet on Risky Borrowers (Bloomberg) Rated: A

The co-founder of Capital One Financial Corp. is betting now’s a good time to lend to the riskiest borrowers.

Nigel Morris, Richard Fairbank’s partner in creating the company that became Capital One, is joining the board of LendUp Global Inc. and boosting his investment in the firm, which uses machine learning to look beyond traditional credit scores in the subprime market.

What Financial Services Can Learn from Direct-to-Consumer Companies (Crowdfund Insider) Rated: AAA

2016 Bain study found that nearly a third of customers globally would change their bank if they could do so easily. With dissatisfaction that high, traditional financial institutions should look to emulate the branding strategies of direct-to-consumer retailers, rather than leaning on their well-established names, to engage with millennial and Gen Z consumers.

Research from BCG found that brands that create personalized customer experiences with technology and data can increase revenue by six to ten percent, and direct-to-consumer brands have capitalized on the benefits of personalization.

Many fintech companies’ value proposition is to leverage technology to provide less expensive financial advice, lower interest rates on student loans, or more fair and reflective insurance rates. For example, robo-advisor Betterment charges only 25 basis points for wealth management services and no minimum to enroll, as opposed to traditional financial advisors that charge one to two percent on assets under management and often require high minimum investments to qualify for on-boarding.

A recent PricewaterhouseCoopers study found that 75 percent of bank customers base their purchasing decisions on whether or not they’ve had a positive customer experience at the bank.

Which Graduate Degrees Deliver More Debt than Income? (Credible) Rated: AAA

Credible’s analysis of student loan debt levels and salaries across 16 graduate school majors shows that the most important consideration isn’t how much debt you’ll take on to obtain an advanced degree — or how much you’ll earn after graduation — but achieving the right balance between the two.

Source: Credible
United Kingdom

Scottish fintech Orca Money hopes to double in size (Insider), Rated: AAA

Scottish fintech firm Orca Money hopes to double its staff to ten over the next year following its second funding round.

The Edinburgh-based company raised £280,000 seed capital last January and is now talking to investors about follow-on funding.

P2PFA accused of reducing transparency after loanbook changes (Peer2Peer Finance) Rated: A

THE PEER-TO-PEER Finance Association (P2PFA) has been accused of reducing transparency and hindering efforts to enhance investor protection after changing the rules governing how firms publish their loanbook.

Previously, members of the self-regulated trade body were obliged to publish their full loanbook, showing information about all the loans on their platform.

But at the start of June, the P2PFA announced that members now have the option to “either continue to publish their entire loan book, or provide a detailed breakdown of loans in their overall loan book to enable a consumer to be informed about the nature and number of loans of different descriptions presently originated through the platform according to standards to be approved by the P2PFA board.”

Asset management giant warns on ‘exotic’ peer-to-peer lending pension investing (AltFi News) Rated: A

Pension investors should avoid high yielding assets such as peer-to-peer loans, according to new research by UK-based Royal London Asset Management.

The firm, which manages £114bn of assets, says investors looking generate income in retirement should beware for high risk, higher yielding investments.

How I invest: Ayo Adesina, a software engineer with £32,000 in peer-to-peer (iNews), Rated: A

Ayo Adesina, 34, was lucky enough to come into a £50,000 windfall when he won series two of Channel 4’s TV programme Hunted in 2016.

Mr Adesina, who describes himself as a novice investor, put the majority of the money – £32,000 – into a peer-to-peer property lending platform. He says his investment has grown 7 per cent, or £3,000, since he opened an account a year ago.

Who’s switching jobs at BWB Compliance (City A.M.), Rated: B

BWB Compliance has recruited Dena Chadderton as a senior adviser. With wide-ranging experience both as a regulatory consultant and across the financial services industry, Dena will primarily be advising firms in the fintech and asset management space. In particular, Dena will continue to specialise in the regulation of P2P lending and crowdfunding platforms, a growing part of the current team’s client-base.

China

Online lender seeks small-scale borrowers (The Standard) Rated: AAA

China’s FinUp Finance Technology Group, which operates a technology-enabled finance platform with a focus on marketplace lending, aims to widen its market in the country by going public in Hong Kong.

The fintech firm also provides a variety of other personal credit services including point of sale instalment services to automobile financing services.

Chinese Fintech PINTEC Launches Installment Financing on E-Commerce Platforms (Crowdfund Insider) Rated: A

Chinese fintech Pintec Technology Holdings Limited (PINTEC) announced on Wednesday it has launched installment financing on its e-commerce platforms. This news comes just a couple of weeks after PINTEC secured $103 million through its latest financing round, which as led by Mandra Capital and SINA Corp.

European Union

Monzo partners with TransferWise for international payments (TechCrunch) Rated: AAA

The partnership, which TechCrunch outed nearly three weeks ago, will see TransferWise power international payments for the U.K. challenger bank’s 750,000 customers. It is the second new bank partnership that TransferWise has unveiled this month, after the fintech unicorn announced that it has begun working with France’s second largest bank BPCE Groupe.

Asked why Monzo  has chosen to work with TransferWise, Blomfield reiterates the challenger bank’s goal of becoming a “hub or control centre” for your money. This won’t necessarily all be done by Monzo, he says, “but with partner organisations who plug into this hub”. TransferWise is the first of these.

LINKED FINANCE SECURES €50M FUNDING FOR IRISH SMES FROM BANCO BNI EUROPA (Irish Tech News) Rated: AAA

Linked Finance, Ireland’s leading peer-to-peer (P2P) lending platform, has secured backing from Portugal’s fastest growing digital bank, Banco BNI Europa, who will deploy up to €50m over a 2-year period, to lend to Irish SMEs.

As part of a wider strategy to identify the best P2P lending platforms in key European markets, Banco BNI Europa will deploy its capital alongside Linked Finance’s existing lenders. Linked Finance, connects Irish SMEs who need loans with an online lending community of more than 19,000 users.

HAVE YOUR CAKE AND ‘HODL’ TOO: TAKING OUT A LOAN WITH BITCOIN (Bitcoinist), Rated: A

P2P lending platform InLock wants to change this by enabling cryptocurrency to be used as collateral for a loan in fiat — effectively solving the short-term spendability problem. At the same time, borrowers can remain ‘hodlers‘ with the option to get their cryptocurrency back in full after the loan is paid off, regardless of any changes in price.

Csaba: When we looked at the Bitcoin blockchain, we found that 40% of all bitcoins existing today had not been moved at all in the past year. Looking back at 2017, there were plenty of reasons to move them: hard forks, the mempool crisis, regulation problems, an amazing bull run, followed by a 70% correction.

The FinTech50 2018 (The FinTech 50) Rated: B

Listings include:

  • Monzo
  • N26
  • OakNorth
  • Raisin
  • Revolut
  • Seedrs
  • SolarisBank
  • Starling Bank
International

34 Fintech and Insurtech Unicorns (Inside Bitcoins), Rated: AAA

According to data compiled from CB Insights and Crunchbase, they are currently 34 fintech unicorns, or startups valued at over $1 billion.

32. Funding Circle — $1 billion

Value: $1 billion | Raised: $413 million

Founded: 2009 |  | HQ: London

What it does: Peer-to-peer marketplace for business loans.

Why it’s hot:Over £3 billion has been lent across the platform and the company is tipped for a blockbuster European float later this year.

31. Kabbage — $1 billion

Value: $1 billion | Raised: $500 million

Founded: 2009 |  | HQ: Atlanta

What it does: Fast online small business loans.

Why it’s hot: The company has written over $4 billion-worth of loans and has partnered with Spanish bank Santander.

24. ACORN OakNorth — $1.2 billion

Value: $1.2 billion | Raised: $486 million

Founded: 2015 |  | HQ: London

What it does: A fintech firm focused on unlocking the potential in bespoke SME lending globally using its data and technology platform, ACORN machine.

Why it’s hot: ACORN machine is a fintech platform that helps automate the way banks penetrate this underserved and underestimated market. It does this by leveraging process excellence, machine learning and technology to fuel data-driven decision making across the loan lifecycle.

22. Tuandaiwang — $1.46 billion

Value: $1.46 billion | Raised: $380 million

Founded: 2012 | HQ: Dongguan

What it does: Peer-to-peer lending platform.

Why it’s hot: The company has helped individuals and companies borrow $11.4 billion and helped lenders make $335 million in returns.

17. NuBank — $2 billion

Value: $2 billion | Raised: $527 million

Founded: 2013 |  | HQ: Sao Paulo

What it does: Brazilian app-only bank.

Why it’s hot: The bank has 3 million customers and has raised money from Sequoia Capital, Goldman Sachs, Tiger Global, and more.

16. Affirm — $2 billion

Value: $2 billion | Raised: $720 million

Founded: 2012 |  | HQ: San Francisco

What it does: A hire-purchase provider, letting people buy products and pay them off in installments.

Why it’s hot: The company works with over 1,200 retailers in the US and its technology helps retailers increase average order sizes by 51%. Morgan Stanley and Singapore’s GIC are both investors.

15. Avant — $2 billion

Value: $2 billion | Raised: $1.8 billion

Founded: 2012 |  | HQ: Chicago

What it does: Online personal loans.

Why it’s hot: The company has lent over $1 billion and is backed by the likes of Tiger Global, KKR, and Jefferies.

13. Klarna — $2.5 billion

Value: $2.5 billion | Raised: $636 million

Founded: 2005 |  | HQ: Stockholm

What it does: User-friendly payment systems for mobile and web that lets people buy now and pay later.

Why it’s hot: The company processes 800,000 transactions a day and has been used by 60 million people globally. Sequoia Capital, the Silicon Valley fund that backed PayPal, is an investor.

9. GreenSky — $3.6 billion

Value: $3.6 billion | Raised: $350 million

Founded: 2006 |  | HQ: Atlanta

What it does: Provides technology to banks that is used in processing loan applications.

Why it’s hot: Steven McLaughlin, a former Goldman Sachs banker whose firm advised GreenSky on a funding deal, told Bloomberg in 2016 that GreenSky “is the single best fintech company created in the last 10 years, by far.”

8. Credit Karma — $3.5 billion

Value: $3.5 billion | Raised: $868 million

Founded: 2007 |  | HQ: SanFrancisco

What it does: Provides free online credit reports, offsetting the cost of paying for them with targeted advertising of financial products.

Why it’s hot: Over 75 million people in the US and Canada have used the service. Google Capital is an investor.

7. SoFi — $4 billion

Value: $4 billion | Raised: $2.1 billion

Founded: 2011 |  | HQ: San Francisco

What it does: Peer-to-peer student loan refinancing, mortgages, and other types of personal loans.

Why it’s hot: Like Zenefits, SoFi struggled with a slew of setbacks in 2017. Allegations of sexual misconduct and loan misstatements forced out founder Mike Cagney. Former Twitter CFO and ex-Goldman banker Anthony Noto is now leading a turnaround of the business.

3. Lu.com — $18.5 billion

Value: $18.5 billion | Raised: $1.7 billion

Founded: 2011 | HQ: Shanghai

What it does: Chinese peer-to-peer loans and financing platform.

Why it’s hot: Lu.com, also known as Lufax, is one of China’s largest online lenders and is tipped for an IPO this year.

ETHLend Blockchain Lending Platform Adds MyBit Token (MYB) in Partnership (Bitcoin Exchange Guide) Rated: B

MyBit is an Ethereum-powered ecosystem that aims to connect the global Internet of Things (IoT) industry. ETHLend works with the Ethereum blockchain as well and is a marketplace for peer-to-peer lending services that use smart contracts. The company provides low interest rates and a transparent technology for processing transactions.

Currently, it allows users to lend with Ethereum, but it may be ready to introduce new altcoins at the end of this year, including MYB.

Australia

RateSetter to ‘accelerate’ broker strategy with new appointment (The Adviser) Rated: A

Last week, The Adviser broke the story that Mark Woolnough had left his role at ING after 18 years at the lender to join the fintech RateSetter.

It has now been confirmed by RateSetter that Mr Woolnough has joined its ranks as head of third-party distribution.

India

P2P lending marketplace ‘PaisaDukan’ to open branches in Noida and Bangalore (Knowledge & News Network) Rated: AAA

PaisaDukan, a P2P lending platform fully owned by Mumbai based fintech startup BigWin Infotech, has decided to launch 2 branches in Noida & Bangalore as a part of its PAN India expansion and growth plans by the end of next month.

This will enable the company to have better control over their operations and widen its reach.

Asia

Bills on P2P lending, cryptocurrency pending in National Assembly (The Korea Herald) Rated: AAA

Rep. Min Byung-doo of the ruling Democratic Party and Rep. Kim Su-min of the minor opposition Bareunmirae Party filed two separate bills to regulate P2P lending firms in July last year and in February, respectively.

With the bills still pending in the National Assembly, financial authorities have been struggling to tackle abusive and deceptive P2P lending practices.

Open Banking: no leisurely walk in the DX park (Enterprise Innovation) Rated: A

The 2018 Global Payments Insight Survey: Retail Banking report by ACI Worldwide and OVUM  claimed that 86% of banks in Asia are developing their open banking strategy.

Ovum’s 2017 Payments Insight Survey said 87% of surveyed banks report having a clear strategy for developing open APIs, up from 59% in 2017.

Africa

FINT is changing the narratives in the Nigerian lending space (Nairametrics), Rated: AAA

In a recent report by the International Finance Corporation (IFC) and the Central Bank of Nigeria (CBN), less than a third of MSMEs have successfully obtained loans from financial institutions, and that is not for a lack of trying.

Nigeria currently has over 35 million MSMEs and if approximately only 10 million MSMEs have been able to get loans from financial institutions, hence, a credit gap of about 25 million in the country.

What exactly is FINT?

FINT is an online lending marketplace, basically we connect verifiable income borrowers looking for access to affordable credit with lenders who are looking to fund the loans for attractive returns. We have consumer loans i.e. loans between N60,000 and N2 million at rates as low as 8% for 3 – 12  months, with retail and institutional lenders (banks and asset managers).

For lenders, they can lend in the multiples of N20,000 grows at 26-39% for one-year loan tenures, for 6 months 15-22% for 3 months it is 8-14%.

Authors:

George Popescu
Allen Taylor

Wednesday July 5 2017, Daily News Digest

abs market overview

News Comments Today’s main news: SoFi to shut down Zenbanx. Red Ventures to buy Bankrate website for $1.24B. BofE to get tough on consumer lending. UK P2P lending surpasses 10B GBP. China re-thinks social credit. Korean P2P lending passes 300B won. LendInvest out of P2P lending. Today’s main analysis: US ABS market overview. Traditional wealth management challenged by robo boom. Today’s thought-provoking […]

abs market overview

News Comments

United States

  • SoFi to shut down Zenbanx. GP:”We do not know the details of the acquisition but we assume part of the due diligence SoFi was aware of this issue and therefore they didn’t purchase Zenbank for their customers or services, but perhaps for their team and know how?”AT: “I suspected this would happen. If they have the technology and the talent, what else do they need?”
  • US ABS market overview. GP:”steady growth in all segments except maybe auto”
  • How the market pushed Realty Mogul out of residential fix and flips. GP:”I continue to believe that fix and flip is highly correlated with the economic cycle and if a company relies on it there will be years with no origination in that market at some point.”AT: “Markets, and market conditions, change. This looks like a smart move for Realty Mogul. A good rationale, at least.”
  • Ally Bank online savings APY increases to 1.15%. GP:”Goldman Sachs online Bank increased it, Ally increased it… perhaps the FED rate adjustment is having an impact or perhaps the competition for savings dollars is increasing. Or both.  “AT: “If consumers can get better savings interest rates at online banks, why wouldn’t they?”
  • Inside the arms race between banks and startups. AT: “Focuses on negatives for banks. Seems a bit one sided. I don’t believe banks are out of the picture just yet, but we will likely see a steady decline soon. The survivors will be those banks that adapt and adopt the technology of online lenders.”
  • LendingTree, LeadsCon unveil first $25K startup innovation spotlight.
  • Tide raises $14M. GP:”Congratulations!”
  • Lifshitz&Miller investigate LendingClub. GP:”All public companies have an ongoing litany of lawsuits as soon as their stock does something un-usual. This is normal life for a public company in the US.” AT: “I don’t understand why now, a full year after the Renaud Laplanche issues.”
  • Red Ventures to buy Bankrate website for $1.24B. GP:”This is big news, and an amazing valuation. There is money in customer acquisition for fintech.”
  • Goldman raises $1B for real estate fund. GP:”Goldman has been in the real estate funding business for long time. focused on large commercial properties. Perhaps a good usage of the savings capital from Goldman Sachs bank could be real estate crowdfunding as well in the same way as Marcus works for unsecured personal lending? $1B for Goldman is not much money, this is not big news anyway. “
  • Suretly launched initial chocolate offering. GP:”Very amusing, but looks a little desperate.”

United Kingdom

China

European Union

Australia/New Zealand

India

Asia

News Summary

United States

Six months after acquisition, SoFi is shutting down Zenbanx (TechCrunch), Rated: AAA

Online lending company SoFi is closing down Zenbanx, the online banking provider it bought earlier this year. In an email sent to Zenbanx customers, the company announced that it will close all accounts at the end of next month.

According to a SoFi spokesperson, Zenbanx had a partnership with Wilmington Savings Fund Society (WSFS) that expired this month and, rather than renew it or find another partner, the company decided to just close existing accounts.

US ABS Market Overview (Finsight.com), Rated: AAA

Recent New Issue

The Market Pushed Us Out of Residential Fix and Flip (Realty Mogul), Rated: AAA

If you are like many investors, you loved our residential loan product. Short term investments with high yield (9-12%) and monthly distributions, what’s not to love? And as much as our investors love them, you will no longer find them on RealtyMogul.com. We stopped originating them.

The purely local nature of fix and flip lending changed with online lenders having nationwide reach and access to tremendous amounts of capital, either from retail or institutional investors. At one point, RealtyMogul.com had in hand nearly $1 billion in capital commitments to purchase fix and flip loans from institutional buyers – that’s a lot of homes!

In late 2015 we started to notice a market shift. Fix and flip loan pricing started to drop. First it was 11%, then 10%, then 9%, and in many major markets it dropped to 8%. Throw in the cost of servicing these loans and on an 8% loan, investors’ estimated return is 7%.

At 8%, there should be a relatively lower risk profile to a loan. But in fact, the opposite was true. The dramatic increase in capital in the market meant that riskier loans were demanding lower and lower rates. Borrowers with great experience, credit and lower leverage were able to get rates in the 4-5% range from banks, whereas the 9-12% loans were only available in markets where there were no alternatives and the risk was fairly high.

Ally Bank online savings APY increases to 1.15% (Reddit), Rated: A

Chat rep said that my account should reflect the new rate by the end of today.

Peek Inside The Fintech Arms Race Between Banks And Startups (International Business Times), Rated: A

Capital One is opening Capital One Cafes in major cities across the U.S., with hip decor and more laidback consulting vibes than traditional branches. JPMorgan is trying the same idea with its Manhattan technology hub. Bloomberg reportedthe bank’s $9.6 billion technology budget coincided with new startup-style offices featuring foosball tables, open workspaces and snacks. But it might be too little, too late.

While, money transfer apps like Apple Pay, Venmo and WorldRemit garner widespread adoption, some experts predict banks could also lose well over half their retail profits to fintech startups. Flashy offices won’t change the fact that the days of traditional banking are over.

Nubank looks beyond traditional credit scores, using cellphone data and driver’s license information to find creditworthy customers who would never meet the requirements of a traditional bank. Like SoFi mortgages in the U.S., Nubank interest rates are flexible and can change as the customer’s financial security increases. Combine that with a lack of fees plus a smooth mobile experience, and traditional credit cards seem very outdated by comparison.

According to a Gallup poll, the amount of Americans who feel confident in U.S. banks dropped from 49 percent in 2006 to just 27 percent by 2016.

A nationwide survey of 500 chief financial officers byWEX Virtual Payments found 55 percent consider mobile payment options very important, in addition to 54 percent who say to same of blockchain solutions.

53 million Americans aren’t served by the current credit score market,  but have great cash flow,” Thomas told IBT. Nubank in Brazil and the fintech startup Tala, which has distributed around 2 million micro-loans in places like in Kenya and Tanzania, prove there’s no need to restrict loan eligibility to traditional metrics.

LendingTree, LeadsCon Unveil First-Ever $ 25,000 Startup Innovation Spotlight (IT Business Net), Rated: A

LendingTree, the online loan marketplace, and Access Intelligence, a business information and marketing company, today announced a new initiative to showcase the top startup companies in financial technology (fintech) lead generation at LeadsCon this summer.

The “LendingTree Startup Innovation Spotlight” at LeadsCon’s Connect to Convert will recognize the most innovative fintech startups across the consumer lead generation, call center and customer experience sectors. Startups around the world can apply today at  a chance to receive exposure, bragging rights and $25,000 in cash. Finalists will be announced in August and selected live on stage amid 1,000 industry executives at LeadsCon’s Connect to Convert industry conference and expo, August 21-23 at the New York Hilton Midtown.

Banking startup Tide raises $ 14 million to ‘give small businesses back their time (Business Insider), Rated: A

Banking startup Tide raised $14 million in one of the largest Series A funding rounds closed by a fintech company this year.

Tide, a digital-only banking app aimed at small businesses, has also partnered with online lender iwoca, in a move to allow small companies access to loans of up to £100,000.

The funding round was led by specialist fintech investor Anthemis, along with Passion Capital, LocalGlobe and Creandum, the company that backed Spotify.

Lifshitz&Miller LLP Announces Investigation of LendingClub Corporation (PR Newswire), Rated: A

Lifshitz & Miller announces investigation on behalf of LC investors concerning whether LC’s former CEO, Renaud Laplanche, engaged in improper loan transactions and personal investments as a result of material weaknesses in LC’s internal controls.

If you are an LC investor, and would like additional information about our investigation, please complete the Information Request Form or contact Joshua Lifshitz, Esq. by telephone at (516)493-9780 or e-mail atinfo@jlclasslaw.com.

Bankrate website to be bought by Red Ventures for $ 1.24bn (Financial Times), Rated: A

Bankrate, the US personal finance website, is to be bought for $1.24bn by Red Ventures, a digital marketing company which is expanding its footprint in financial services.

Private equity-backed Red Ventures has agreed to pay $14 per share in cash for Bankrate, which produces online content focused on financial advice and research, such as mortgage and savings calculators and credit card and insurance comparison tools.

Goldman Raised $ 1B For A Real Estate Fund (Bisnow), Rated: B

Documents filed with the Securities and Exchange Commission show that the investment bank has raised $1B for a new real estate fund, Broad Street Real Estate Credit Partners III. Further documents show it is on the road looking to raise more capital for the fund, with a source indicating to Bisnow that it is looking to pull in the same amount again over the coming months.

Around $600M came from U.S. investors and the rest from overseas, the documents show. Goldman typically puts around 20% of the equity into the funds it manages.

Suretly launched an Initial Chocolate Offering (Newsbtc), Rated: B

NYC-based startup Suretly, which raised $350K during preICO round this May, launched an Initial Chocolate Offering.

The event took place in Copenhagen, Denmark during Money2020 conference. All guests, who has visited Suretly’s booth, were gifted with a chocolate souvenirs shaped in SUR-token. Each token was packed in the individual memorable wrapping with the future Suretly ICO information.

United Kingdom

The Bank of England is preparing to get tough on consumer lending (Business Insider), Rated: AAA

The Bank of England ordered British banks and other lenders on Tuesday to prove by September that they are not taking on too much risk with their increased lending to consumers.

The BoE’s Prudential Regulation Authority did not set out any new rules on Tuesday but its move was the first time it has ordered firms it supervises to apply consumer credit rule more conservatively.

The PRA said it was “requesting evidence from all firms with material exposures to consumer credit of how they will – across consumer credit portfolios- ensure” they are not taking too much risk after years of low interest rates.

Lenders will have until September to respond and could then be asked to fix any specific areas of weakness by the PRA.

ORCA celebrates peer to peer lending uk surpassing £10 billion mark (Orca Money), Rated: AAA

Peer-to-peer lending has reached a significant milestone since Zopa launched the world’s first P2P platform in 2005. Over £10 billion has been cumulatively lent across 23 UK P2P platforms. In the first half of 2017 alone, over £2 bn was invested through P2P.

Take a look at the UK alternative lending ecosystem.

Traditional wealth management challenged by robo-adviser boom (Raconteur), Rated: AAA

Survey after survey shows that millennials, and indeed most potential investors aged under the age of 60, are happy to entrust their savings to a digital platform or mobile app, so long as it’s credible, secure, trustworthy, capable of offering them a range of low-cost funds and some personal investment advice.

Of the robo-advisers in the UK, the largest is Nutmeg. Launched in 2012, it has so far raised £71 million in five funding rounds from venture capitalists and others. Nutmeg has more than £600 million under management, though it remains loss making, and escalating marketing and advertising costs meant that in 2015 its losses widened from 2014.

Other UK players include Wealthify, launched in 2015; MoneyFarm, launched in Italy in 2012, and in the UK in 2016; and Scalable Capital, launched in 2016.

Brewin Dolphin has launched a robo-adviser that allows customers with between £10,000 and £200,000 to invest in one of six model portfolios at a cost of 0.7 per cent of invested assets, plus underlying charges of between 0.11 per cent and 0.16 per cent.

 

LendInvest out of P2P sticks to managing funds (Anonymous Email), Rated: A

Our sources reported that LendInvest cancelled their FCA application due to their decision to completely exit the p2p lending space.

As can be seen on the FCA website:

Firm name: Lendinvest Limited
Interim Permissions reference number: 658890

 

Permission Description Status Limitation Against Permission Permission End Date
Consumer credit business Entering into a regulated credit agreement as lender; and exercising, or having the right to exercise, the lender’s rights and duties under a regulated credit agreement. Inactive 02/06/2017
Credit brokerage Credit broking
Or
Credit broking limited to credit intermediation
Inactive 02/06/2017
No right to canvass off trade premises

It appears that this decision was due to the 36(H) legal rules around peer top peer in the UK . It has apparently become “more difficul to stay within the new 36(H) rules without becoming a bank or fund manager”. As LendInvest was already a fund manager, the company has decided to remain a fund manager and focus on that structure as opposed to applying for FCA p2p regulation.

In a similar fashion the online lender Wellesley has taken a similar approach having ‘paused’ P2P yet still shows as active.

This change makes Assetz Capital the 2nd largest business and property lender who is P2P in Europe. See

Of £295m lent, c £290m is P2P retail investors.

Kuflink Debuts Property-Backed Innovative Finance ISA & New Investment Options (Crowdfund Insider), Rated: A

UK-based peer-to-peer lending platform Kuflink has launched its Innovative Finance ISA (IFISA) and also two investment options. This news comes just a few months after the online lender received full authorization from the Financial Conduct Authority (FCA).

Assetz Capital bids to lend £300m after profitable year (Bridging&Commercial), Rated: A

Assetz Capital has revealed that it made a seven-figure pre-tax profit during the 2016/17 financial year, while revenues have now reached over £10m pa.
The peer-to-peer lending platform saw a total of £126m lent through it to SMEs between April 2016 and March 2017 with £38m of that total being achieved in the final quarter.

Assetz Capital claimed it would lend over £60m during the first quarter of this current financial year as it bids to reach £300m of lending for the whole of the year.

It’s time to bring ghost houses back to the land of the living – Lendinvest (Mortgage Solutions), Rated: A

As the Council of Mortgage Lenders has previously pointed out, even if the government managed to push the building industry into producing 300,000 homes across the UK each year, 90% of the housing stock that will exist by 2025 has already been built. If we are to tackle the housing issues we face, it’s not just down to increasing the rate at which new developments spring up – we need to make far better use of the houses we already have, too.

An obvious problem with some of these ‘ghost homes’ is that in their current condition nobody would want to live in them. They may have been ignored for years, falling into disrepair to the extent that they may actually be unlivable.

But these are exactly the sorts of properties that savvy investors may be looking for, the worst house on the street which can be done up, turned into a nice, respectable home and then sold on at a profit.

Londoners Borrowed £17B in New Mortgages in 2016, Wimbledon & Wandsworth Top Borrowers (Crowdfund Insider), Rated: A

Londoners borrowed another £17 billion in new mortgages last year as the affluent southwest London neighbourhoods of Wimbledon and Wandsworth topped the borrowing league table and and 17 of the top 20 areas for new mortgage lending last year are in London, reported European P2P lending platform Lendy.

The highest non-London area among for new mortgages is Maidenhead, which placed 11th out of the 2,717 postcode areas in the study.

AI savings platform launches £700,000 crowdfunding campaign (P2P Finance News), Rated: A

AN ARTIFICIAL intelligence platform that has partnered with RateSetter to help people save and invest is looking to raise £700,000 through crowdfunding.

The fintech firm, Plum, has launched a crowdfunding campaign on Seedrs, to build its team and platform.

NatWest trials AI compliance tool to ensure financial advice is spot on (Internet of Business), Rated: A

The UK bank will use the Recordsure compliance tool based on artificial intelligence (AI) from regulatory risk specialist TCC Group in order to record face-to-face and telephone conversations between the bank and its customers – with those customers’ consent, naturally.

The AI technology is able to analyze an interaction and then classify sections of the conversation, according to Recordsure’s creators. For example, it could determine which aspects of the conversation were general chitchat, which involved financial advice, and what topics were discussed.

P2PFA Announces New Associate Membership, Publishes Names of First New Members (Crowdfund Insider), Rated: A

The Peer-to-Peer Finance Association (P2PFA) has created a new category of membership to boost its ranks and add perspective to the association that represents the UK’s top online lenders.

These new members include:

  • Alterest – Provides non-bank lending markets with loan intelligence infrastructure that enables: seamless exchange of lending data in a secure and timely manner, and flexible analysis of performance and risk of any loan pool or exposure.
  • Altus Consulting: A specialist provider of consultancy services to the financial services sector.
  • Equifax: A global information solutions company that uses data, analytics, technology and industry expertise to power organisations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions.
  • Fox Williams LLP: A City law firm with one of the leading Fintech practices in the UK, acting for over fifteen P2P lending platforms.
  • Grant Thornton UK LLP: A global consultancy that is part of a network of over forty-thousand people in 130 countries. In the UK they are led by 185 partners and more than 4,500 people.
  • Orca Money: A platform that is driving the mainstream adoption of peer-to-peer lending by providing research, analysis and tools to empower investors.
  • Simmons & Simmons: An international law firm with a Fintech team that comprises a range of multi-disciplinary lawyers from across their European, Middle Eastern and Asian offices.
  • TLT LLP: Supports large corporates, public institutions and high-growth businesses on their strategic and day-to-day legal needs.

Hive Project Launches Blockchain-Based Invoice Financing Platform, Targets SMEs (Finance Magnates), Rated: A

Despite being the backbone of every economy, small and medium-sized businesses have traditionally faced challenges in securing access to short-term financing from traditional lenders. To resolve this issue, the Hive Project today announced the development of a cryptocurrency invoice financing platform to help SMEs overcome the hurdles they face when trying to get the financing they need.

WiseAlpha Founder & CEO Rezaah Ahmad Comments on Successful Crowdcube Round (Crowdfund Insider), Rated: B

WiseAlpha, a UK first online lending platform that gives investors access to high yield institutional bond and loan investments, has overfunded its £500k target on Crowdcube by 258%, raising £1.29 million.

The largest single investment was £150K.

“We’re thrilled to have overfunded our original target and glad that the 1452 people who have invested in us so far are backing our vision of a fairer investment world where everyday investors aren’t shut out from accessing the biggest and best investments.”

UK P2P Lender RateSetter Update: Targets New Business Borrowers (Crowdfund Insider), Rated: B

Now the lender is planning to boost its direct marketing methods to diversify its new business borrowers sources, according to Peer2Peer Finance News.

Lewis appointed on b2b brief for p2p lending platform (PR Week), Rated: B

Lewis has been appointed by ArchOver, a peer-to-peer lending platform for UK SMEs, to run a campaign aimed at business audiences.

China

China changes tack on ‘social credit’ scheme plan (Financial Times), Rated: AAA

Beijing has pulled back on plans to license big technology companies to develop “social credit” scores for consumers, based mainly on their online activity, because of concern over conflicts of interest, industry analysts said on Tuesday.

The People’s Bank of China, the central bank, selected eight tech companies in 2015 — including e-commerce group Alibaba’s Ant Financial and game developer Tencent — to develop pilot programmes to give consumers credit scores.

The pilots, which monitored spending patterns but also personal behaviour and social media activity, initially raised concerns about consumer privacy. Some of their metrics were seen as irrelevant, including proposals to factor in exercise routines or what time of day people went online. Others were considered more sinister, such as efforts to rate “honesty” or “trustworthiness” by linking credit scores to friends’ social media posts.

Beijing has now decided not to award any licences this year after regulators expressed increasing concern about the potential for conflicts of interest.

MYbank Deepens Push for Business Big Banks Won’t Touch (Bloomberg), Rated: AAA

MYbank, the two-year-old Chinese online lender that already has 3.5 million small-business customers, plans to push deeper into a segment that’s long been shunned by the country’s largest banks.

MYbank wants to capitalize on its links to billionaire Jack Ma’s Alibaba Group Holding Ltd. by offering loans to the more than 10 million smaller merchants that use the company’s e-commerce platforms, MYbank President Huang Hao said in a June 29 interview. Ant Financial, Alibaba’s financial affiliate, owns 30 percent of the online lender.

Formally known as Zhejiang E-Commerce Bank Co., MYbank was able to more than quadruple its lending through 2016, taking its outstanding loans to 33 billion yuan ($4.9 billion).

Its nonperforming-loan ratio was around 1 percent, Huang said, lower than the national average of 1.74 percent. The bank’s technology, which runs loan applications through more than 3,000 computerized risk-control strategies, has kept delinquencies in check, he said.

Still, last year’s lending explosion came at a cost, dragging its capital adequacy ratio down to 11.07 percent by December from 18.51 percent a year earlier.

Chinese tourists are driving mobile payments across the globe (IBS Intelligence), Rated: A

The number of Chinese tourists abroad hit 122 million in 2016, with a vast majority of them paying via their mobile phones. That’s according to a new study from Kapronasia and CANCAN. The survey pool contained 1,000 Chinese consumers abroad and 60 global merchants.

While 67% of respondents reported that they use Alipay or WeChat Pay for overseas purchases. This represents about 41% of overseas consumption and tourists used mobile payments for more than 10% of total transactions.

The report also highlights how Chinese tourists are spending more and more in retail ($900 on average in 2016), instead of luxury items. Only 5.7% spent more than $6,288, with a total amount of $109.8 billion throughout 2016.

80% of merchant respondents cited consumer demand as one of the main reasons for adopting mobile payments, with 70% adding that mainland Chinese consumers were their largest source of global revenue. Clothing, makeup, skincare, food and beverages top the list of goods purchased with mobiles, with travel and accommodation not far behind.

UAV Startup Clobotics Raised its First Round of Financing from GGV Capital (Xing Ping She), Rated: A

Recently, a Shanghai-based Unmanned Aerial Vehicle (UAV) startup—— Clobotics finished its first round of financing from GGV Capital, the amount was not disclosed. According to George Yan, the founder and CEO of Clobotics, this round of financing will focus on developing and iterating their products and technology, expanding the marketing layout, and accelerating the development of Clobotics in the key vertical field.

Set up in November 2016, Clobotics is a provider of business intelligence (BI) and visualizing data, focus on the research of UAV machine vision, industrial big data acquisition, and cloud big data processing and analysis. Unlike many of the domestic manufacturers that focus on hardware plane, Clobotics is good at using leading software, technology and platforms to embed advanced technologies in the field of artificial intelligence, so as to fully explore the value of UAV-collected data.

Police Arrest 32 Employees of Company Behind ‘Straddling Bus’ (Sixth Tone), Rated: B

The test site of China’s fantastical traffic-straddling bus was dismantled in June, and now the peer-to-peer financing company that backed the project is being investigated for illegal fundraising.

Following reports of unlawful conduct, a total of 32 suspects at Beijing-based Huaying Kailai Asset Management Co. Ltd. have been arrested, according to an announcement Sunday by Beijing police on their Weibo microblog.

European Union

Investor protection vs Access to Finance: The Growth of Alternative Finance (Crowdfund Insider), Rated: AAA

Clearly in Europe (Brexit aside) the UK has led sector growth. A combination of a culture of entrepreneurship and risk taking has combined with a supportive government and a regulatory body tasked with a mission of fostering competition – perhaps to the frustration of traditional financial firms. The rise of internet finance in the UK has engendered few occurrences of fraud to date. Growth has been sustained. Perhaps the Brits have gotten the balance right so far?

But which country has the largest alternative finance market in the world? China, of course.

Kleverlaan points to Italy as a country that has stumbled out of the gate. Something the country is attempting to rectify with recent rule changes specifically targeting equity crowdfunding.

View the full report on alternative finance here.

The European Investment Bank Pledges €18.5 million to Finance Continental European SMEs through Lendix (Crowdfund Insider), Rated: A

The European Investment Bank Group (EIB) through the European Investment Fund (EIF) has announced that it will provide €18.5 million to back a joint investment fund designed to lend money to SMEs through crowdlending platform Lendix.

Swedish tech elite’s darling startup Karma just bagged $ 4 million for its hyper-growing food waste app (Business Insider), Rated: A

Swedish startup Karma has built an app that helps restaurants, grocers and cafés reduce their food waste by selling their surplus to consumers at reduced prices.

The company has now raised between 30 and 40 million SEK ($3,5 – $4,7m) to take on Europe after a booming start in its Swedish home market.

The seed round comes from Swedish investor Eequity and global VC fund e.ventures, which has also backed the hyped Swedish fertility app Natural Cycles.

P2P Lender VIAINVEST Hits €10 Million in Funded Loans (Crowdfund Insider), Rated: A

Newly launched peer to peer lending platform VIAINVEST has announced topping €10 million in loans. The 7 month old Latvian platform said consumer loans issued by VIA SMS Group, came from the Czech Republic, Poland, Latvia and Spain.

Australia/New Zealand

Xpress Super and Australian P2P lender RateSetter announce partnership (Finder.com), Rated: A

RateSetter, Australia’s largest peer-to-peer lender, and self-managed-superannuation-fund (SMSF) administrator Xpress Super have today announced a partnership.

Through the partnership, SMSF investors will now have direct access to their RateSetter account via the Xpress Super platform, making it easier for SMSF investors to lend to creditworthy borrowers.

Introducing HashChing – an online marketplace for home loan deals (sa real estate news), Rated: A

Based in the heart of Sydney, HashChing is Australia’s first online home loans marketplace for broker-negotiated home loan deals.

All mortgage brokers are verified and rated through the website Artificial Intelligence Algorithm, selecting the brokers who offer the best services and then recommending them to borrowers in their area. Similar companies that had paved the way before HashChing had simply listed rates to the consumer through the bank or lender’s website.

Home loan rates on HashChing start from 3.59% p.a. and consumers can browse through the home loan deals page to see what offers are available.

Currently the company has helped over 14,500 borrowers with their home loan enquiries, all worth more than $7 billion dollars combined. Of which, $6 billion has come in the last 12 months alone, and the company also currently lists more than 600 verified mortgage brokers – including 30 mortgage brokers from SA.

Colliers’ alternative to bank funding (True Commercial), Rated: B

A new Colliers International service is providing an alternative to traditional bank funding by matching commercial property investors to development and investment opportunities.

The Capital Sourcing unit was established by Tim Lichtenstein, who has a track record in capital raising for commercial real estate assets.

India

UrbanClap Raises $ 21M in Series C (BW Disrupt), Rated: A

Home services start-up firm UrbanClap has raised $21 million in a series C funding round led by Internet investment fund Vy Capital. Led by Alexander Tamas, Dubai-based Vy Capital is a major investor in Zomato.

Early investors SAIF Partners, Accel Partners and series B investor Bessemer Venture Partners also participated in the round. Existing investors also spent approximately $1 million more to buy shares held by some employees and a part of stakes of angel investors Kunal Bahl and Rohit Bansal, the founders of Snapdeal, UrbanClap co-founder Abhiraj Bhal told LiveMint.

Reliance Capital arm invests $ 1 mn in P2P lending platform Billionloans (VC Circle), Rated: A

Billionloans Financial Services Pvt. Ltd, a Bengaluru-based fintech startup that operates a peer-to-peer (P2P) lending platform, has raised $1 million (around Rs 7 crore) in seed funding from Reliance Corporate Advisory Services Ltd, a wholly owned subsidiary of Reliance Capital Ltd.

Asia

Peer-to-peer loans pass 300 billion won for first time (Korea JoongAng Daily), Rated: AAA

The number of peer-to-peer loans more than doubled in just six months, going from 96.9 billion won ($84.5 million) in June last year to over 300 billion won in December.

The change represents a 220.5 percent increase, according to data provided by the Financial Supervisory Service and Financial Services Commission.

The number of users also surged 116.6 percent to 6,632 in June compared to December’s 3,062.

Singapore fintech startup Instarem raises $ 13 mn to expand payment infra (VC Circle), Rated: A

Instarem, a Singapore-headquartered cross-border payments company founded by Indian-origin entrepreneur Prajit Nanu, has raised $13 million in a Series B funding round led by Chinese venture capital firm GSR Ventures, a company statement said.

Singapore fintech startup Validus Capital raises US$ 2.9M to grow SME lending platform (e27), Rated: A

Singapore-based fintech startup Validus Capital has raised S$4 million (US$2.9 million) from Vertex Ventures.

It will use the newly-raised round to expand regionally and grow its online lending platform.

Chinese investors eye Indonesia’s P2P lending marketplace Investree for Series B (udaipur kiran), Rated: A

Indonesian peer-to-peer lending marketplace Investree announced recently that Chinese investors have initiated discussions for an investment in the company for its next Series B round.

If successful, the deal will become one of the first international investments in Indonesia’s fintech space. Previously, the startup has raised an undisclosed Series A round in 2016 from local venture capital Kejora which typically invest US$2 to US$5 million in their portfolio firms.

Authors:

George Popescu
Allen Taylor

Tuesday January 31 2017, Daily News Digest

p2p consumer credit applications

News Comments Today’s main news: Nyca Partners raises $125M for second FinTech VC fund Today’s main analysis: P2P lenders lead increase in personal loans. Corporate bond ratings. Today’s thought-provoking articles: Will the UK retain the FinTech crown? United States Nyca Partners raises $125M for second FinTech VC fund. GP:” We are curious to see in which […]

p2p consumer credit applications

News Comments

United States

United Kingdom

Australia

Middle East

United States

Most Consumers Open to Robo-Only Retirement Advice (Financial Advisor IQ), Rated: AAA

Most people are willing to trust robo-advisors for retirement planning and investment advice, but the majority also want human interaction when it comes to more complex tasks, according to a new survey from consulting firm Accenture.

Sixty-eight percent of people are open to robo-only advice for retirement planning and 78% say they’d welcome it for investing advice, according to a survey of close to 33,000 consumers, of which close to 10,000 were working with a professional wealth or asset manager, in 18 countries and regions conducted in May and June by Accenture.

Nonetheless, Accenture also found that 38% of consumers would switch to Google, Amazon or Facebook for financial advice services, while only 31% would go to one of the tech giants for banking and 29% for insurance.

Morningstar Corporate Credit Research Highlights (Morningstar), Rated: AAA

The levels in the corporate bond markets are the tightest that credit spreads have registered since the fall of 2014 and are significantly tighter than their long-term averages. The average spread of the Morningstar Corporate Bond Index is 42 basis points tighter than its long-term average of +168 since the end of 1998. The average spread of the Bank of America Merrill Lynch High Yield Master Index is currently 187 basis points tighter than its long-term average of +580 basis points since the end of 1996.

Currency Capital grabs funding from Lovell Minnick Partners (PE Hub), Rated: A

Lovell Minnick Partners, a private equity firm specializing in financial and related business services companies, today announced that it has made a growth capital investment in Currency Capital, LLC, an online equipment financing exchange serving owners of small- and medium-sized companies. The investment will support Currency Capital’s growth strategies. Financial terms of the private transaction were not disclosed.

With Currency Capital, borrowers are provided with unparalleled, instant access to financing options from hundreds of lenders with “one click,” making the entire application, selection, approval and funding process simple and transparent.

Currency Capital provided approximately $150 million in loans to customers in 2016. Equipment buyers are also able to purchase equipment for sale by the Company’s industry-leading partners: eBay, Big Tex Trailers, IronPlanet and Proxibid.

Nyca Partners Raises $ 125M For Second FinTech VC Fund (PYMNTS.com), Rated: B

Nyca Partners, the venture capital firm focused on the FinTech market, raised $125 million for a second fund. According to a report, Hans Morris, the former Visa president turned venture capitalist, created Nyca Partners in 2014, launching a $30 million fund. The fund invested in a slew of FinTech startups, including Lending Club, SigFig and Orchard. The new fund, which includes 10 institutional investors and 29 limited partner advisors, has made investments in about a dozen startups, including Embroker and Ladder, two insurance FinTechs.

United Kingdom

Will the UK Retain the Fintech Crown? (Crowdfund Insider), Rated: AAA

The change in government, and the ramifications of the Brexit decision, has clearly stressed the UK’s prominence in innovative finance. Continental Europe is attempting to take advantage of the decision to depart Europe and Asian business centers, like Singapore and Hong Kong, are seeking to claim the Fintech crown.

Roche-Saunders is a partner at the firm of Bates, Wells & Braithwaite in London, where she manages their financial services regulatory consultancy.

Crowdfund Insider: 2016 was a choppy year for some Fintech/Crowdfunding platforms.

Gillian Roche-Saunders: 2016 was a year of highs and lows, and I think it’s fair to say the lows have received more press.

One of my key takeaways from the year is how crowdfunding now feels established as an alternative source of capital.

Crowdfund Insider: What about Peer to Peer lending platforms? You predicted last year there would be more robust rules for online lenders like the handling of client money, vetting, and wind downs. Is that still going to occur?

Gillian Roche-Saunders: What I didn’t predict was that there could be such a disconnect over the definition of peer-to-peer lending activity.  The Treasury drafted article 36H specifically to capture the peer-to-peer lending industry’s activities, yet we’ve spent much of the year debating with the FCA whether the industry is actually undertaking that same activity.  It could sound like quite a dull and technical debate until you realise that only article 36H loan agreements can go into the Innovative Finance ISA.  The knock-on effects of the FCA and Treasury not being joined up on this point are significant for consumers and platforms.   

Crowdfund Insider: How is the current political environment for Fintech? Does the government embrace the strategic importance of Fintech for the UK innovation economy?

Gillian Roche-Saunders: If you’d asked me a year ago I would have said that political support was beyond dispute.  We had the best ecosystem for Fintech with a regulator and government behind it 100%.  I still think we’re heading in the right direction, and let’s not forget it’s been quite a year for the UK, but it does seem as if the government has taken their foot off the Fintech pedal.

Crowdfund Insider: Are you seeing additional Brexit driven concern for Fintech firms? Anyone moving to Paris or Berlin?

Gillian Roche-Saunders: There continues to be a lot of chatter about the Brexit risk, and comments that we will see our talent and companies move abroad.  Anecdotally, we have seen the opposite.  

As for UK companies, the impact of Brexit will vary depending on the client base.  Institutionally focused players, like enterprise tech and Regtech firms, may find their client base moving overseas and need to follow. The challenges in operating in a truly cross-border way have meant that crowdfunding hasn’t been reliant on Europe and that is likely to insulate the industry now.

Crowdfund Insider: What are your predictions for 2017 regarding alternative finance? Another year of growth & innovation or consolidation?

Gillian Roche-Saunders: It’s stating the obvious but 2017 will be the year of the Innovative Finance ISA.  Many firms have been laying the groundwork on that for quite some time but we’ve seen a real spike in activity since autumn.

We can certainly expect more innovation generally.  As platforms continue to compete for profile and customers, new opportunities to differentiate will be taken up.  It will be interesting to see if there is more cross fertilisation between the lending and investment models. We’ve advised clients to focus on one route or another initially – the FCA may treat both sectors under the broad church of crowdfunding but the models are very different – but this year may be the first time when bringing together both under one roof makes sense.

I would expect moves towards consolidation too.

Crowd2Fund to offer P2P white label product (P2P Finance News), Rated: A

CROWD2FUND is rolling out a white label solution for institutions wishing to expand into peer-to-peer lending.

The platform, which is one of only four P2P lenders to offer the Innovative Finance ISA, is already in talks with potential partners.

Institutions – such as investment firms – will be able to use Crowd2Fund’s “Powered by” feature to operate as a P2P platform under their own brand. Crowd2Fund says it has already seen “significant demand” from institutions looking to leverage their customer base, although it declined to name which ones.

Financial technology firm Orca in £280,000 seed funding boost (The Irish News), Rated: A

BELAST-based fintech company Orca Money has raised £280,000 seed capital which it will use to build on it peer-to-peer lending focused financial media site Orca Retail, launched a year ago.

The alternative finance market has continued to flourish in the UK, with the peer-to-peer lending market growing to £3.13 billion last year and featuring more than 177,000 investors.

A third product, Orca Investments, will be launched early 2018 allowing retail investors and IFAs to invest in a diversified fund, comprised of peer-to-peer investments.

Australia

Peer-to-peer lenders lead increase in personal loans (The Sydney Morning Herald), Rated: AAA

The latest Quarterly Consumer Credit Demand Index from credit agency Veda shows the number of personal loan applications for the December 2016 quarter was 12.4 per cent higher than the December 2015 quarter.

There was a significant pick-up in the growth of personal loan applications in all states and territories, led by NSW and the Northern Territory with an increase of 14.5 per cent, Queensland with 13.1 per cent and Victoria with 12.5 per cent.

Overall consumer credit applications are up 7.7 per cent, with credit card applications rising 3 per cent and mortgage applications up 6.6 per cent.

However, the Veda figures reveal wide geographic variations with mortgage applications.

They were 14.9 per cent higher in the Australian Capital Territory, 11.2 per cent higher in Tasmania, 10.6 per cent higher in Victoria and 9.6 per cent higher in NSW.

However, in Western Australia, applications were 10.6 per cent lower and 10.8 per cent lower in the Northern Territory.

Middle East

Treasury plans law on peer-to-peer lending (Haaretz), Rated: A

Israel’s Finance Ministry released a draft version of a proposed law Monday that would encourage online peer-to-peer lending by creating a regulatory framework for it. The new law will also create protections for the people lending money through P2P websites, as well as for the borrowers – a move the treasury hopes will give the nascent industry more legitimacy and enable it to become a more serious competitor to the banks and credit card companies.

The Capital Markets Authority will be responsible for enforcing the proposed regulations.
read more:

Authors:

George Popescu
Allen Taylor

Wednesday January 18 2017, Daily News Digest

Morningstar

News Comments Today’s main news: PRA resets FSCS limit at 85K BP. SoFi double downs on mortgages. Today’s main analysis: High-yield bonds outperform investment grade. Today’s thought-provoking articles: ApplePie podcast on franchise financing in MPL. Dianrong hits year-on-year increase of 148%. FinTech lending opening opps for SMEs in Indonesia. United States Mortgages take center stage at SoFi. AT: “It’s unclear […]

Morningstar

News Comments

United States

United Kingdom

China

Asia

News Summary

United States

Mortgages Taking Center Stage at Online Lender SoFi (National Mortgage News), Rated: AAA

Social Finance, the online lender that made its name refinancing student loans for high-earning millennials, is doubling down on mortgages as rising interest rates are expected to make originations scarcer.

The company says it has endured by eschewing the strategy of some of its competitors in favor of product diversification and building up capital.

With interest rates expected to rise in 2017, loans to purchase homes will find stronger demand than mortgage refinancings. SoFi says it’s well suited to compete in such an environment — roughly two-thirds of its mortgage originations are purchase loans.

Beyond product offerings, SoFi is exploring the potential applications in mortgages of new technologies such as blockchains — the distributed, auditable, cryptographically secured ledgers that underpin bitcoin and other digital currencies. The company is among several groups studying whether these systems offer a better way to track ownership of real-world assets — in this case, real estate.

SoFi will seek growth in mortgages partly by entering new markets. It began marketing to consumers in San Francisco, where its earliest student loan product customers were.

Now, it is picking new markets based on demand for its primary jumbo product.

So far, SoFi has received licenses in 27 states with the addition of New York.

Next on its list is Massachusetts — eventually the company wants to be licensed in all 50 states.

Morningstar Corporate Credit Research Highlights (Morningstar Email), Rated: AAA

Since the beginning of the year, the average corporate credit spread of the Morningstar Corporate Bond Index, our proxy for the investment-grade bond market, has tightened 1 basis point, whereas in the high-yield market, the credit spread of the Bank of America Merrill Lynch High Yield Master Index has tightened 19 basis points. Between tightening credit spreads and a slight rebound in Treasury bonds, fixed-income securities have performed well. Year to date, the Morningstar Corporate Bond Index has risen 0.53% and the high-yield index has risen 1.08%. However, risk assets with higher betas have risen even higher; for example, the S&P 500 has risen 1.6% over the same period.

At these levels, both investment-grade and high-yield corporate bonds are trading much tighter than their long-term averages, and the S&P 500 is only slightly below its all-time high. Currently, the average spread of the Morningstar Corporate Bond Index is +127, which is 41 basis points tighter than its longterm average of +168 since the end of 1998. The average spread of the Bank of America Merrill Lynch High Yield Master Index is currently +402, which is 178 basis points tighter than its long-term average of +580 basis points since the end of 1996. As a point of reference, the tightest that the Morningstar Corporate Bond Index has ever traded was +80 in February 2007, and the tightest the high-yield index registered was +241 in June 2007.

Denise Thomas of ApplePie Capital (Lend Academy), Rated: AAA

So it’s very important that the brand know how to select operators.

The second is that they know how to select and carve out the United States’ for territories because if you think about the number of people that need to support and purchase goods and services in an area, you have to know that that business is located in a spot where that’s going to be a positive unit economic situation because that’s how franchisees make money. When the franchisee makes money so does the parent franchisor because they’re paid in royalty fees off of the revenues of those units. So it’s very, very important that they get those two things right and there’s aligned incentives in that.

The third thing they have to do is franchisors have to support their franchisees in many ways; training, the blueprint for how to start that business, how to market in the area, advertising dollars for national marketing or local marketing. They have to provide a lot of ongoing support to make that franchisee successful and so we interview, we have a very multi-dimensional screening process for the franchisor and then they in turn screen their potential operators and many franchise businesses like to have an operator that opens more than one unit because they’re not training someone twice and they’re really getting leverage. We like those too because they’ve already shown that they can succeed in one location. So it’s a very interesting model because of the leverage points you get all the way through the system.

Listen to the full podcast.

SoFi officially licensed to lend in New York (Housingwire), Rated: A

State estimated to be future No. 2 market for SoFi

After roughly a year to get finalized, SoFi officially received its license to lend in New York, which is one of the most difficult states to acquire a license in, Michael Tannenbaum, SoFi’s chief revenue officer, said in an interview.

After roughly a year to get finalized, SoFi officially received its license to lend in New York, which is one of the most difficult states to acquire a license in, Michael Tannenbaum, SoFi’s chief revenue officer, said in an interview.

However, he noted that there are a lot of nuances to New York licensing and not too many out of state lenders receive approval.

It’s a very concentrated market that already has an awareness of SoFi and will likely be as large as California in business, which is SoFi’s No. 1 market, he noted. Washington State is slated as SoFi’s No. 2 market right now. SoFi is currently licensed in 29 states, also jumping into Montana recently.

From here, Tannenbaum said Massachusetts would be the last remaining big state that SoFi needs to jump into, pointing out the potential Boston could bring, especially since SoFi already has a solid student loan base there.

Rust Belt City Gets Rated Highest Yield for Single Family Rental Market (Crowdfund Insider), Rated: A

HomeUnion, a new online real estate management platform that helps landlords invest in property and then rent it out, has published their list of top Single Family Rental (SFR) markets in terms of yield. Cleveland is the best market, according to HomeUnion with yields of 10.9%. Meanwhile, hot metropolitan markets like San Francisco and Los Angeles are at the bottom of the yield barrel (Orange County is at the very bottom).

Alternatives firms get gobbled up (Pensions & Investments), Rated: A

Alternative investment consultant acquisitions in the past 12 months include:

nGeneral consulting firm Pavilion Financial Corp. acquired alternative investment consulting firm Altius Holdings Ltd. in September. Pavilion already purchased Sacramento, Calif.-based private equity consultant LP Capital in 2014. Pavilion now has $60 billion in alternative assets under advisement.

nSeattle-based consultant Verus Advisory Inc. closed its acquisition of San Francisco-based private equity consulting firm Strategic Investment Solutions on Dec. 31, 2015. The combined firm has responsibility for more than $380 billion in assets under advisement. Eight months earlier, Verus started bulking up its alternative investment capability when it contracted with hedge fund and private credit consulting firm Aksia LLC to gain access to its hedge fund investment team and due diligence reviews.

OnDeck strikes agreement with WEX to offer financing to small business customers (SNL), Rated: B

Online lender On Deck Capital will provide business financing to small business customers of payment solutions provider WEX.

2017 Cloud Lending Summit & Expo to Feature Larry Chiavaro (Benzinga), Rated: B

Larry Chiavaro, Executive Vice President of First Associates Loan Servicing will be moderating two panels at the iiBIG Marketplace Cloud Lending Summit and Expo on Thursday, January 19th.

The Funding & Liquidity in Marketplace Cloud Lending session will feature Chiavaro and other industry leaders, providing insights into securitization, working with institutional investors, crowdfunding, secondary markets and more. The Loan Origination, Servicing & Collection Solutions for Cloud-based Marketplace Lenders session will delve into the latest developments and best practices to increase efficiency and maximize portfolio performance.

United Kingdom

FSCS limit reset to £85k, but what’s the impact for P2P? (altfi), Rated: AAA

The Prudential Regulation Authority (PRA) has announced its intention to raise the level of coverage provided by the Financial Services Compensation Scheme. In a newly published policy statement, after factoring in feedback from interest parties, the PRA has proposed to reset the deposit protection limit to £85k as of 30 January 2017.

When the scheme’s limit was lowered to £75k in July, RateSetter CEO Rhydian Lewis said that it only strengthened the case to “refresh the FSCS”. But is the resetting of the limit to £85k bad news for peer-to-peer lending?

The Bank of England dropped the base rate to the historic low of 0.25 per cent in August. The peer-to-peer lending industry was overwhelmingly positive in reacting to the move, however a number have since been forced to adjust their own rates in the context of increasingly competitive credit markets in the UK.

Meet the P2P lender that wants to take the awkwardness out of lending money to your mates (BDaily), Rated: A

Flender has been in development for the last two years and is built around harnessing the power of social networks, both online and offline, to help individuals and businesses raise capital.

He said: “We were really shocked to discover how big that was. We surveyed the size of the friends lending market across the UK and when you translate that into value, we almost fell off our chairs.”

Using the example of someone trying to fund an MBA, Cavanagh explained that while people could theoretically do a whip around of friends and family, asking to borrow £500 to £1000 from 10 to 15 people, no one does due to the inherent complications and awkwardness associated with such lending.

Using the example of someone trying to fund an MBA, Cavanagh explained that while people could theoretically do a whip around of friends and family, asking to borrow £500 to £1000 from 10 to 15 people, no one does due to the inherent complications and awkwardness associated with such lending.

Cavanagh disagrees and argues that by making it both more formal and so easy to do, Flender’s solution is actually a lot less awkward than lending £500 to a mate, which is then never paid back.

“It’s going to maintain friendships more than anything,” he argued. “[Informal lending] is already going on to the value of £2.9bn a year, and that’s creating problems because it’s not formalised.

“It’s going to maintain friendships more than anything,” he argued. “[Informal lending] is already going on to the value of £2.9bn a year, and that’s creating problems because it’s not formalised.

P2P lender Saving Stream reaches £250m milestone (Mortgage Introducer), Rated: A

Peer-to-peer lending platform Saving Stream has raised £250m in capital from property investors since its launch in 2012.

The platform, which is owned by bridging and development finance provider Lendy Finance, provides loans up to 70% loan-to-value and has attracted 13,000 registered users.

The amount invested has increased by £150m to £250m in the last 12 months, with investors making an annual return of up to 12%.

Orca Money is one of the leading research and comparison facilities for P2P lending in the UK (Invezz), Rated: B

With the Orca Money comparison engine, IFISA investors are encouraged to research and compare thoroughly before they invest, as the rules are different to other ISA products. Orca research materials translate the guidelines governing the Innovative Finance ISA into simple, consumable and easy-to-understand content. Retail investors can get a quick overview of IFISA providers or dig into greater detail about the IFISA and/or the P2P lending platforms who offer them.

China

Dianrong Announces a Year-on-Year Increase of 148% (Yahoo! Finance), Rated: AAA

Dianrong, a Chinese P2P lending pioneer and technology leader announces that 2016 loan originations reached approximately 16.23 Billion RMB, representing a 148% increase over 2015. Growth in loans issued was funded by an astonishing 3.62 million investors, illustrating the breadth and scope of Dianrong’s business model.

During the year, Dianrong was named one of China’s top three online lenders by the renowned rating website, Wdzj.com, and Yingcan Consulting Company in their “Development Index Rating of the Top 100 Online Lending Platforms for October 2016”.

Last year marked the fourth consecutive year of strong growth in origination for Dianrong, hitting approximately RMB 60 million, RMB 790 million, RMB 6.55 billion and RMB 16.23 billion in 2013, 2014, 2015 and 2016 respectively.

Harneys wins two Deal of the Year awards in China (Cayman Compass), Rated: A

Offshore law firm Harneys has won two Deal of the Year awards from China Business Law Journal for its work on the Kaisa Group’s debt restructuring and HengXinLi’s launch of the first global real estate crowdfunding platform in China. Award winners were announced on Jan. 13.

The first global real estate crowdfunding platform in China is designed to provide Chinese investors with access to real estate in major international cities. The platform is aimed at middle-class Chinese nationals who want to invest in real estate in countries such as the U.K. and the U.S.

Innovation economy is next for China: Sky9 Capital founder (Asia Times), Rated: A

How many investment projects do you usually review, and how many do you typically invest in?

We look at over 1,000 opportunities a year, of which we typically do something like five to six projects. I am pretty sure that China will have the world’s biggest companies in fintech, robotics, and areas like cloud computing and software.

If you have to pick one, which start-up in China looks the most promising to you?

Hard to pick a winner, but in my portfolio, I am very excited about the prospects of Tujia, the Airbnb of China; FangDD, the largest online/offline real estate transaction platform; and PPDai, the largest pure-play peer-to-peer lending platform. These all have the opportunities to become decacorns.

LendIt China Launches LendIt News on WeChat (Yahoo! Finance), Rated: B

LendIt, the world’s biggest show in lending and fintech, made several major announcements today related to China.  First, LendIt announced the official launch of Lang Di Fintech 2017, its 2nd annual Chinese fintech conference held on July 15-16 at the Kerry Hotel, Pudong, Shanghai. Second, LendIt announced its partnership with JadeValue Fintech, a leading Chinese fintech incubator, to co-host the 2nd annual Chinese edition of the PitchIt@LendIt startup competition.  Finally, LendIt officially launched its daily fintech news channel called LendIt News on its brand new Lang Di WeChat channel.

This daily news brief is curated by the LendIt content staff to highlight the most important fintech news stories from around the world. This is the first launch of LendIt News, which rolls out in the U.S. in the coming months.  You can find LendIt News at or at WeChat account langdifintech.

Asia

Fintech lending opens up opportunities for SMEs (The Jakarta Post), Rated: AAA

According to the World Bank, only 36 percent of Indonesians have access to banking services and merely 13 percent borrow from formal financial institutions. While there are almost 60 million MSMEs, which provide over 100 million jobs in the country. Most of them cannot get the financing they need to expand.

Fintech-based lending can potentially fill the country’s existing financing gap of almost Rp 1 quadrillion (US$75 billion). In addition, peer-to-peer lending and crowdfunding fintech particularly can tap into the MSMEs, of which only 20 percent are currently bankable. Giving them access to initial or additional funding will definitely enable them to launch or to expand their business.

OJK issues regulations to regulate peer-to-peer lending (Lexology), Rated: B

The IT-Based Lending Regulation is the most developed articulation we have seen of a set of basic rules for the conduct of marketplace lending in Indonesia, although the regulation provides that further details regarding many detailed operational aspects will be regulated in further OJK Circular Letters.

Authors:

George Popescu
Allen Taylor