Tuesday April 3 2018, Daily News Digest

FT Partners

News Comments Today’s main news: SoFi issues $2.6B in ABS notes in Q1 2018. GreenSky files for IPO. China’s P2P lenders brace for more regulations. FinanZero raises $3.6M. Today’s main analysis: FT Partners’ CEO alternative lending market analysis. Today’s thought-provoking articles: Cities with highest share of cash-out refinance borrowers. Retailers grow financial services capabilities. India’s unsecured instant loan interest rates […]

FT Partners

News Comments

United States

United Kingdom

China

International

Australia

India

Other

News Summary

United States

SoFi Issues a Record $ 2.6 Billion in ABS Notes in the First Quarter of 2018 (PR Newswire), Rated: AAA

SoFi announced today that it completed $2.6 billion in loan securitizations in the first quarter of 2018, a 35% increase over the prior-year period and its largest-ever quarterly ABS issuance volume.

In Q1 2018, SoFi completed a total of three securitization transactions: two student loan ABS offerings ($960 million SOFI 2018-A Notes and $869 million SOFI 2018-B Notes) and one consumer loan ABS offering ($774 million SCLP 2018-1 Notes). The SoFi 2018-B Notes marked the first time SoFi included medical residency loans as a part of the collateral.

LendingTree Ranks Cities with the Highest Share of Cash-Out Refinance Borrowers (PR Newswire), Rated: AAA

LendingTree today released the findings of its study on where cash-out refinancing was most prevalent in the past year.

Cities with the highest share of cash-out borrowers

Source Lending Tree

Cities with the highest cash-out loan amounts

Source Lending Tree

Fintech Firm GreenSky Files Confidentially for IPO (Wall Street Journal), Rated: AAA

Financial-technology firm GreenSky LLC has confidentially filed paperwork with the Securities and Exchange Commission for a sizable initial public offering that could come as soon as this summer, according to people familiar with the matter.

The Atlanta company, which operates a lending platform that enables retailers, health-care providers and home contractors to offer loans to their customers, could seek to raise $1 billion at a valuation of roughly $5 billion, some of the people said.

FT Partners’ CEO Monthly Alternative Lending Market Analysis  (FT Partners), Rated: AAA

This month’s report features an exclusive interview with Manu Smadja, co-founder and CEO of MPOWER Financing, an alternative lender that enables high-potential international students to finance their education. In our conversation with Manu, he discusses the inception of MPOWER, along with the unique opportunities and challenges of lending to this market.

M&A

Source: FT Partners

Read the full report here.

Max Levchin To Participate In A Keynote Fireside Chat At LendIt Fintech USA 2018 (PR Newswire), Rated: A

LendIt Fintech announced today that Max Levchin, Co-founder and Chief Executive Officer of Affirm, a financial services technology company that is reimagining consumer credit and banking, will be featured in a keynote fireside chat on April 9. The world’s most prominent and emerging fintech CEOs from Wall Street to Main Street will gather April 9-11 at Moscone Center in San Francisco to focus on the hot-button topics and issues exploring the future of finance.

In a session titled The future of credit: Reimagining the financing ecosystem, Levchin’s keynote fireside chat will delve into how the retail industry has evolved and how retail experiences are continuing to grow beyond the capabilities of traditional credit and lending. Levchin will share his thoughts on why the industry needs to reimagine the financing ecosystem from the ground up in order to unlock the future of credit. Levchin will also discuss why Affirm is committed to reinventing credit, starting with the belief that it should help improve consumers’ financial lives in addition to financing their purchases.

Kabbage: Small Businesses Turning To Mobile Lending In Big Numbers (Payment Week), Rated: A

Sometimes, businesses need ready cash to get from “the latest bills” to “the next paid invoice,” and that’s where lenders are coming in. A new report from Kabbage says that small businesses are turning to mobile devices to get in on that lender funding in increasing numbers.

Kabbage surveyed almost 150,000 small businesses, and found that loans accessed by mobile device had increased better than three-fold, over 360 percent, of what they were back in April 2014. While the total numbers went through the roof, the value of the loans accessed went through the roof and over the treetops, having increased over 1,220 percent.

Why Marcus Has Changed Everything (Orchard Platform), Rated: A

Fast forward almost 18 months and Marcus is the fastest growing online lender in history. They have lent $2.5 billion in this time to 350,000 customers and have 700 employees spread across three offices. Not only that, but they have grand ambitions in the space. Goldman Sachs CEO Lloyd Blankfein has repeatedly talked about the importance of Marcus to the future of Goldman Sachs.

According to a recent article in the Wall Street Journal the consumer banking business of Goldman Sachs is expected to generate $1 billion in revenue for the firm by 2020. That is significantly more revenue than LendingClub is expected to generate in 2018 as an 11-year- old business.

We have heard that Barclays and PNC Financial will be launching their own lending platforms in 2018 and there are rumors that many other large banks are going to do the same.

Most people probably don’t know Goldman Sachs offers a savings account with excellent perks — and anyone can use it with just $ 1 (Business Insider), Rated: A

Marcus— named after the Goldman Sachs founder Marcus Goldman — allows any adult (except in Maryland, where Marcus is not yet available) to create a savings account.

The big selling point for Marcus is the 1.5% annual percentage yield offered. Whereas interest rates for many banks have plummeted to as low as 0.01%, Goldman Sachs’ savings accounts create significant interest.

There is also no minimum amount needed to open an account with Marcus, and a deposit of even $1 allows users to earn the 1.5% APY.

Ohio Insurtech Root Insurance Completes Series C Round With $ 51 Million in Funding (Crowdfund Insider), Rated:A

Root Insurance, an Ohio-based car insurtech company, announced last week it secured $51 million in funding through its Series C round, which was led by Redpoint Ventures, with Scale Venture Partners and existing partners Ribbit Capital and Silicon Valley Bank Capital Partners. 

Root will use the new funding to expand into additional states and continue to invest in technology that significantly improves the customer experience.

That Fast Online Loan Could Have Super-high Interest Rates and Hidden Fees That Bankrupt Your Business (Entrepreneur), Rated: A

recent lawsuit against fintech small-business lender Kabbage Inc., charging that it partnered with a bank in order to offer interest rates that exceeded the legal limit, highlights the need for more regulatory oversight of the growing number of online lenders signing deals with small businesses.

Online lenders are getting more scrutiny.

The recent Massachusetts federal case brought by a small business against Kabbage (and its partner Celtic Bank) highlights why non-bank fintech lenders should be regulated. The suit alleges that Kabbage used its relationship with Celtic — which “rented” its balance sheet to Kabbage — as a basis to charge interest rates that violated usury laws.

How Credit Karma is using data to become a central finance hub (Tearsheet), Rated: A

It’s not a bank, but it uses customer data to help banks find customers.

Currently valued at $4 billion, Credit Karma has 80 million customers — half of whom are millennials. The company joins a growing number of financial startups like Clarity Money, SoFi, Chime and Varo Money that are aiming to become one-stop shops for customers’ finances. The field is growing increasingly competitive. Meanwhile, banks are bundling personal finance advice into their mobile apps. But Credit Karma has two advantages its competitors often struggle with — scale and data — and it’s using a chatbot to lock in the relationship with the customer.

A Chase Sapphire experiment is getting revived and expanded after the trial run blew away expectations with millennials last year (Business Insider), Rated: B

Last year, ahead of the spring homebuying season — the busiest of the year — JPMorgan Chase engineered an experiment to gain an edge in the mortgage-lending competition.

So the bank targeted its Sapphire customers, offering another 100,000 in rewards points if they closed a mortgage with the bank — a bonus worth as much as $1,500.

HNW Clients Warming Up To Digital Advice (Financial Adviser), Rated: A

In its report, “The Cerulli Edge—U.S. Retail Investor Edition, 1Q 2018 Issue,” the researcher found that more than one-quarter of investors over 70 who have $2 million to $5 million in investable assets said they would consider online-only engagement. Beyond that, high-net-worth investors in general seemingly are more receptive to digital advice platforms.

In 2015, Cerulli found that 38% of investors with investable assets of $2 million to $5 million said they were willing to engage with digital providers. Last year, that number jumped to 46%. And among investors with $5 million-plus in investable assets, those numbers went from 30% in 2015 to 38% last year.

Why borrower experience will be the principal driver of bank revenue in the lending market (Lendit), Rated: A

Tech giants such as Google and Amazon have rewritten the rulebook for consumers when it comes to what they can reasonably expect from their service providers. Consequently, bank offerings are being judged to the same standard as the most innovative digitally native products in the world.

The benefits of improved customer experience

More generally, banks must focus on improving user experience to remain competitive as digitally native fintech products flood the marketplace. Focusing especially, the motivations for improving customer experience can be described as:

  •  Differentiation Financial services can no longer lean on long-standing relationships and brand positioning to generate new customer business.
  • Positive brand response in addition to research, some customers will also emphasize the emotive impression they receive from a product when making purchasing decisions.
  • Coping with an economic downturn During a recession or other global economic hardship businesses are placed under increased financial strain. Services viewed positively by their existing clients will stand a better chance of retaining their clients as well as growing their client base during the downturn.

Pindrop Introduces New Biometric Solution: Tongueprinting (Finovate), Rated: A

Banking Technology’s Anthony Peyton reports that the Atlanta-based anti-fraud and authentication specialist has unveiled Tongueprinting, a technology that analyses every person’s unique tongue as its newest biometric engine. Banking Technology is Finovate’s sister publication.

The idea is for Tongueprinting to stop fraudsters from taking over legitimate accounts by spoofing the call centre with automated bots, social engineering, and knowledge-based authentication questions.  

HomeUnion Launches Crowdfunding Platform for Individual Investors (Business Wire), Rated: A

HomeUnion, the leader in online residential real estate investing, has launched a crowdfunding platform that allows investors to purchase stakes in funds of single-family rental (SFR) properties on its website. Starting with a minimum investment of $10,000, retail investors now have the ability to acquire interest in the HomeUnion Fix-and-Flip Fund. The fund enables consumers to invest in SFR assets acquired for fix-and-flip purposes in seven HomeUnion markets: Atlanta, Austin, Charlotte, Chicago, Dallas, Raleigh and Tampa.

Upstart tests buyer appetite with riskier loans, more sub notes (Global Capital), Rated: A

Online lender Upstart is the latest marketplace loan company to broaden the risk profile of its ABS, announcing a deal this week offering more subordinate bonds and backed by a higher proportion of longer term loans.

The California-based lender, founded by ex-Google employees, uses an underwriting model which incorporates data points beyond borrowers’ FICO scores, utilizing other factors such as schools attended, areas of study, academic performance and work history.

Is low pay hurting banks in the battle for tech talent? (American Banker), Rated: A

Conversations about pay in the banking industry typically focus on whether executives at the top are paid too much or workers at the bottom are paid too little.

But new data available as a result of the Dodd-Frank Act is drawing rare attention to the compensation of employees in the middle. In what will become an annual exercise, publicly traded U.S. companies are now required to disclose annually the median pay of their employees.

Information and Data Integrity: A Two-Way Street (Lendit), Rated: A

For many businesses, data is an important aspect of decision management. When you are choosing with whom to do business, you rely on the validity of data to guide you. If it proves faulty, you may be steered into accepting bad customers or rejecting good ones, which can seriously affect your bottom line. For consumers, inaccurate data can be equally harmful—leading to the appearance of having bad credit, denials of services or products or worse, flagged as potentially fraudulent.

Spanning both digital and real worlds, and encompassing data about identity, financial characteristics, behaviors and more, an integrated view is the foundation of enhanced insights that can ultimately improve financial outcomes. TransUnion understands the importance of current, accurate data and gives its customers access to information—including both highly-regulated and publicly available forms of alternative data—that creates powerful, comprehensive views of consumers.

Here’s Why Millennials Are Choosing Personal Loans (Lendit), Rated: A

When it comes to millennial spending habits, it looks as though they’re rounding a corner to a new kind of credit. With the vast treasure trove of accumulated data available, credit bureaus like TransUnion are seeing spikes in personal loans compared to Generation X’s spending habits in the early 2000s. It’s a tremendous opportunity for marketers to capture a demographic that expects more from their lender.

The Overarching Trends

The newly minted adults of Generation Z are at the very beginning of their financial journey, but millennials are at the age where they’re expected to make major purchases. As they struggle with the economy and student debt, they’re making different financial choices along the way.

Adopting New Technology

Lenders are turning to financial technology (fintech) to help peddle their products, which millennials are all too happy to use. Ironically, applying for a personal loan without the face-to-face connection can be far more attractive than the traditional application process.

A Decline in Credit Card Usage

Right or wrong, credit cards have long been linked to perpetual debt in many people’s minds. In 2009, the CARD Act was introduced to place stricter limits on the marketing of credit cards at college campuses. Debit cards have become more of the rule as opposed to the exception, leaping from 8 billion transactions in 2000 to 60 billion in 2015.

Small Business Confidence Is Up, What Does that Mean? (Lendit), Rated: A

The year 2017 saw small business owners across the United States grow more optimistic about the future than they’ve ever been—at least since the creation of the Optimism Index by the NFIB in the 70s.  “2017 was the most remarkable year in the 45-year history of the NFIB Optimism Index,” said NFIB President and CEO Juanita Duggan.

The Tax Bill Could be a Boon for Small Businesses

Sole proprietorships, partnerships, and S corporations are all examples of what are called pass-through businesses; and make up roughly 95 percent of all U.S. businesses. They also happen to be many of our customers at OnDeck, and other online small business lenders. One of the main components of the new tax bill is a 20 percent tax deduction for those businesses, where business owners can “shield” 20 percent of their business income from flowing through to their personal income tax returns.

Cincinnati-based financial tech startup raises $ 1.2 million (Cincinnati Business Courier), Rated: B

A Cincinnati-based financial tech startup that aims to help users secure low-dollar loans without having to resort to a payday lender raised $1.2 million in venture capital.

Mayor proposes employee loans to offset predatory lenders (Santa Fe New Mexican), Rated: B

A few months after a new annual 175 percent cap on small-loan interest rates in New Mexico went into effect, Mayor Alan Webber is proposing a short-term loan program to help municipal workers avoid payday lending businesses viewed as predatory by consumer advocates.

BlockFi Gives Hodlers Another Option to Borrow Against Crypto Assets (BitcoinMagazine), Rated: B

Options for borrowing and lending with cryptocurrencies are on the rise. One of the latest start-ups to join the likes of SALT and Unchained Capital is BlockFi, a New York City–based startup that issues loans backed by bitcoin and ether to individuals, companies and institutions in 35 U.S. states.

BlockFi takes cryptocurrency as collateral, offering interest rates on loans of around 12 percent. This is generally lower than unsecured loans and higher than loans secured with traditional assets such as securities or real estate.

eBus to offer visitors financial advice, credit reports (The Repository), Rated: B

The eBus is a mobile classroom which is equipped with 14 personal computers and satellite technology staffed by Fifth Third bankers and representatives from nonprofit community organizations. On the bus, visitors can request a credit report and review it with a professional; receive a personalized evaluation of finances; receive internet banking and bill pay demonstrations; speak with nonprofits about housing, money management and business advice; receive consultation on foreclosure prevention; and conduct online job searches.

United Kingdom

Scots ‘side businesses’ generate £1.7bn a year (The Scotsman), Rated: A

More than 500,000 people living in Scotland have started a side business, generating a collective £1.7 billion a year out of more than £33bn UK-wide, according to new research.

Online lender Sunny said many of those north of the Border turning to side businesses are doing so to help with the cost of bills, savings and debts, and bring in an average of £272 a month on top of their main income.

That represents a 20 per cent increase from when they first started their business.

China

China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated: AAA

China will soon be rolling out new licensing requirements for p2p lenders; The system will kick off in April with approvals slated to come at the end of this month, but many lenders aren’t aware of the filing process; in 2016 and 2017 many p2p lenders shut down and according to data there are around 2,000 remaining; it is expected that many of the 2,000 will not pass the new requirements; the new rules won’t allow platforms to guarantee loan payments and also limit loans to individuals and businesses; it will also require that platforms use custodian banks.

China Rapid Finance Executives Selected to Speak at LendIt Fintech USA 2018 (PR Newswire), Rated: A

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF) announced today that the Company will participate as a sponsor and exhibitor at the upcoming LendIt Fintech USA 2018, to be held between Apr 9th and 11th in San Francisco, California.

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

On March 28th, cross-border payment company iPayLinks announced that it had completed, at the beginning of this year, a hundreds of million-yuan B1 round of financing led by Tencent and followed by Legend Capital.

NIFA Issues a Self-Discipline Convention for Debt-Collection Practitioners

The five-chapter convention is mainly applying to regulate the behavior of overdue debt collection within the Internet Finance industry by establishing several basic principles (e.g. observing laws and regulations, prudential regulations, protecting privacy, and strict self-discipline). In other words, the document outlines a framework of debt-collection regulation in terms of discredited punishment, business management, personnel management, information management, outsourcing management, and complaints.

China’s internet lenders fall foul of data privacy rules (Financial Times), Rated: A

More than half of Chinese internet finance lenders are failing to comply with data privacy regulations, research has found, raising risks for investors as China steps up the implementation of laws to protect consumer data.

The breaches include collecting phone numbers from users’ contact lists, which can be used to mount harassment campaigns and shame users into repaying debts.

The survey of 200 finance apps by Renmin University and Nandu Personal Data Protection Research Centre, a Beijing think-tank, ranked 111 apps as having “low” compliance.

It found that almost half — 95 apps — wanted to read users’ text messages, while 97 of them wanted access to users’ contact lists, despite such access not being necessary for the app’s functioning.

International

How retailers are growing their financial services capabilities (Tearsheet), Rated: AAA

Amazon isn’t the only retailer encroaching on the financial services space. It may be the scariest — just the rumor of it entering a company’s space will send its stock price down — but ultimately, Amazon only cares about getting more buyers and more sellers to join its platform.

Overstock’s Raj Karkara, vp of loyalty and financial services, echoed that sentiment earlier this year, saying that offering financial services or connecting customers with financial services providers is a natural extension of its retail function of buying and selling consumer goods.

Rakuten
Rakuten is Japan’s largest e-commerce site and has slowly been growing outside of the country. It has a footprint in media, video-on-demand, mobile messaging, e-books, travel, fashion, marketing and even sports. It also operates the largest online bank in the country.

Overstock
For the past few months, e-commerce company Overstock.com has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing; and, most recently, a discounted trading platform.

Sainsbury (and Tesco)
Amazon may not be interested in becoming a bank but that doesn’t mean it can’t succeed in stealing customer attention from them. The U.K.’s largest grocers have all opened banks attached to their brands —  Sainsbury’s and Tesco.

ETHLend (LEND) Token – Will It Go Down After Kyber Network Partnership? (Hot Stocked), Rated: A

ETHLend has recently partnered up with Kyber Network. The ETHLend (LEND) Token has reached a market capitalization of 45.69 Million US dollars in the last 24 hours. The token traded 9.50%higher against the U.S. dollar during the last 24 hours ending at 10:30 AM EDTon April 2nd. That rise might be as a result of the partnership. ETHLend aims to become another decentralized and secure financial marketplace, but targeting peer to peer lending agreements via Blockchain and Smart Contracts.

Source CoinMarketCap

 

Australia

SMALL BUSINESS LOANS IN AUSTRALIA: SHOULD YOU SEEK FINANCE FROM A BANK OR AN ONLINE LENDER? (Dynamic Business), Rated: A

Considering the small business sector employs nearly half the national workforce and contributes around $380 billion to Australia’s GDP [1], it’s easy to see why it’s frequently referred to as the ‘engine room’ of the economy.

Like all engine rooms, the sector requires sufficient fuel – in this case, working and growth capital – to not only keep running but also accelerate. However, poor access to capital remains a significant barrier to small businesses, accounting for a majority of failures in the sector.

Part of the reason is that banks are reluctant to lend to small businesses in circumstances where the borrower doesn’t have bricks-and-mortar security – especially if a short-term loan is sought.

APRA rejected CBA home loan data as inaccurate and incomplete (Financial Review), Rated: B

Commonwealth Bank was being pressured by the prudential regulator to appoint external consultants and fix its flawed home lending data almost 2½ years before the Hayne royal commission began exposing the big four for sloppy administrative errors and irresponsible lending.

The Australian Prudential Regulation Authority’s frustration with the failure of Australia’s biggest home lender to accurately identify what proportion of its loans were taken out by property investors and its level of exposure to big borrowers has been revealed in evidence tendered to the banking royal commission and published in a massive dump of more than 100 documents late last week.

India

Interest rates on unsecured instant loans are high (LiveMint), Rated: AAA

Financial institutions and fintech companies have launched multiple small credit products in India in the past 1-3 years. It is now possible to get loans even on your mobile phone. But how do you pay for this convenience?

P2P lending platform

Peer-to-peer lending companies such as Faircent, i2ifunding and Lendbox connect lenders and borrowers on their platforms. Usually, the lender is an individual and not a financial institution. The interest rates are between 15% and 36% per annum and the loan amount can range from Rs50,000 to Rs5 lakh. The interest rate is decided based on the credit profile of the customer. Usually, the P2P lending companies take into account your Cibil credit score. The loan tenure is 3 months to 24 months.

Fintech eco-system is moving to blockchain and AI: Rajat Gandhi, Faircent (Economic Times), Rated: A

A lot of players have come into the fintech space. There are wallet players, then there are PPI, P2B, crowdsourcing and other payment players as well. So, regulation is one of the key challenges the private players are going through. What is your take on it?

Surprisingly, the Indian regulators, I would say, are strict. You can see the example of NBFC P2P licences regulation. It is a good rule-based model. In fact, the players themselves were pushing for some kind of regulation because financial markets need them. It’s not like e-commerce or running a taxi where the risks are not that high.

India’s Finzy Raises $ 1.3 Mln At Pre Series A Funding (Reuters), Rated: A

Finzy, India’s fastest growing peer to peer lending platform, has raised USD 1.3 million in first round of Pre Series A from investors in the industry. A second round of fundraising is expected to close with pre-identified set of investors within the next 60 days.

Latin American

Brazilian Loan Marketplace FinanZero raises USD 3.6 million in Series A Funding Round (PR Newwire), Rated: AAA

FinanZero is a leading marketplace for consumer loans in Brazil. The business is an independent broker for loans, negotiating the customer’s loan application with several banks and credit institutions, to find the loan with the best interest rate and terms for the consumer. FinanZero handles the lending process from start to finish.

The Series A round was led by Swedish publicly listed investment company, Vostok Emerging Finance, with participation by other Swedish investors, including Webrock Ventures and Zentro Founders.

Africa

Fintech is central to Nigeria’s future success (Financial Times), Rated: A

Central to this opportunity is an acceleration in the development of a modern banking and financial services sector. We are already seeing huge breakthroughs in digital banking and the adoption of fintech-based services by Nigerian consumers — be they retail or business customers. But this expansion must be encouraged by policies that will see greater inclusion of women and rural communities into mainstream banking activity.

Asia

Meet the most disruptive fintech startup in South Korea (Forbes), Rated: AAA

Viva Republica is the most disruptive fintech startup in South Korea. Since the 2015 launch of its simple peer-to-peer payments app Toss, banks are finally revamping their user experiences and customers have easier access to financial products. South Korea’s mobile payments have more than quadrupled in that time to $4.6 billion, according to Bank of Korea data.

The startup, funded at $76 million, hasn’t stopped there. After PayPal joined a $48 million investment in Toss in March, Toss has grown from a simple money-transfer app to a diverse consumer-finance platform generating Viva Republica’s $20 million in expected revenue in 2017. Toss thus joins Asia’s ranks of fast-growing mobile P2P payment services, reaching a $12 billion transaction volume in 2017.

Authors:

George Popescu
Allen Taylor

Tuesday April 3 2018, Daily News Digest

FT Partners

News Comments Today’s main news: SoFi issues $2.6B in ABS notes in Q1 2018. GreenSky files for IPO. China’s P2P lenders brace for more regulations. FinanZero raises $3.6M. Today’s main analysis: FT Partners’ CEO alternative lending market analysis. Today’s thought-provoking articles: Cities with highest share of cash-out refinance borrowers. Retailers grow financial services capabilities. India’s unsecured instant loan interest rates […]

FT Partners

News Comments

United States

United Kingdom

China

International

Australia

India

Other

News Summary

United States

SoFi Issues a Record $ 2.6 Billion in ABS Notes in the First Quarter of 2018 (PR Newswire), Rated: AAA

SoFi announced today that it completed $2.6 billion in loan securitizations in the first quarter of 2018, a 35% increase over the prior-year period and its largest-ever quarterly ABS issuance volume.

In Q1 2018, SoFi completed a total of three securitization transactions: two student loan ABS offerings ($960 million SOFI 2018-A Notes and $869 million SOFI 2018-B Notes) and one consumer loan ABS offering ($774 million SCLP 2018-1 Notes). The SoFi 2018-B Notes marked the first time SoFi included medical residency loans as a part of the collateral.

LendingTree Ranks Cities with the Highest Share of Cash-Out Refinance Borrowers (PR Newswire), Rated: AAA

LendingTree today released the findings of its study on where cash-out refinancing was most prevalent in the past year.

Cities with the highest share of cash-out borrowers

Source Lending Tree

Cities with the highest cash-out loan amounts

Source Lending Tree

Fintech Firm GreenSky Files Confidentially for IPO (Wall Street Journal), Rated: AAA

Financial-technology firm GreenSky LLC has confidentially filed paperwork with the Securities and Exchange Commission for a sizable initial public offering that could come as soon as this summer, according to people familiar with the matter.

The Atlanta company, which operates a lending platform that enables retailers, health-care providers and home contractors to offer loans to their customers, could seek to raise $1 billion at a valuation of roughly $5 billion, some of the people said.

FT Partners’ CEO Monthly Alternative Lending Market Analysis  (FT Partners), Rated: AAA

This month’s report features an exclusive interview with Manu Smadja, co-founder and CEO of MPOWER Financing, an alternative lender that enables high-potential international students to finance their education. In our conversation with Manu, he discusses the inception of MPOWER, along with the unique opportunities and challenges of lending to this market.

M&A

Source: FT Partners

Read the full report here.

Max Levchin To Participate In A Keynote Fireside Chat At LendIt Fintech USA 2018 (PR Newswire), Rated: A

LendIt Fintech announced today that Max Levchin, Co-founder and Chief Executive Officer of Affirm, a financial services technology company that is reimagining consumer credit and banking, will be featured in a keynote fireside chat on April 9. The world’s most prominent and emerging fintech CEOs from Wall Street to Main Street will gather April 9-11 at Moscone Center in San Francisco to focus on the hot-button topics and issues exploring the future of finance.

In a session titled The future of credit: Reimagining the financing ecosystem, Levchin’s keynote fireside chat will delve into how the retail industry has evolved and how retail experiences are continuing to grow beyond the capabilities of traditional credit and lending. Levchin will share his thoughts on why the industry needs to reimagine the financing ecosystem from the ground up in order to unlock the future of credit. Levchin will also discuss why Affirm is committed to reinventing credit, starting with the belief that it should help improve consumers’ financial lives in addition to financing their purchases.

Kabbage: Small Businesses Turning To Mobile Lending In Big Numbers (Payment Week), Rated: A

Sometimes, businesses need ready cash to get from “the latest bills” to “the next paid invoice,” and that’s where lenders are coming in. A new report from Kabbage says that small businesses are turning to mobile devices to get in on that lender funding in increasing numbers.

Kabbage surveyed almost 150,000 small businesses, and found that loans accessed by mobile device had increased better than three-fold, over 360 percent, of what they were back in April 2014. While the total numbers went through the roof, the value of the loans accessed went through the roof and over the treetops, having increased over 1,220 percent.

Why Marcus Has Changed Everything (Orchard Platform), Rated: A

Fast forward almost 18 months and Marcus is the fastest growing online lender in history. They have lent $2.5 billion in this time to 350,000 customers and have 700 employees spread across three offices. Not only that, but they have grand ambitions in the space. Goldman Sachs CEO Lloyd Blankfein has repeatedly talked about the importance of Marcus to the future of Goldman Sachs.

According to a recent article in the Wall Street Journal the consumer banking business of Goldman Sachs is expected to generate $1 billion in revenue for the firm by 2020. That is significantly more revenue than LendingClub is expected to generate in 2018 as an 11-year- old business.

We have heard that Barclays and PNC Financial will be launching their own lending platforms in 2018 and there are rumors that many other large banks are going to do the same.

Most people probably don’t know Goldman Sachs offers a savings account with excellent perks — and anyone can use it with just $ 1 (Business Insider), Rated: A

Marcus— named after the Goldman Sachs founder Marcus Goldman — allows any adult (except in Maryland, where Marcus is not yet available) to create a savings account.

The big selling point for Marcus is the 1.5% annual percentage yield offered. Whereas interest rates for many banks have plummeted to as low as 0.01%, Goldman Sachs’ savings accounts create significant interest.

There is also no minimum amount needed to open an account with Marcus, and a deposit of even $1 allows users to earn the 1.5% APY.

Ohio Insurtech Root Insurance Completes Series C Round With $ 51 Million in Funding (Crowdfund Insider), Rated:A

Root Insurance, an Ohio-based car insurtech company, announced last week it secured $51 million in funding through its Series C round, which was led by Redpoint Ventures, with Scale Venture Partners and existing partners Ribbit Capital and Silicon Valley Bank Capital Partners. 

Root will use the new funding to expand into additional states and continue to invest in technology that significantly improves the customer experience.

That Fast Online Loan Could Have Super-high Interest Rates and Hidden Fees That Bankrupt Your Business (Entrepreneur), Rated: A

recent lawsuit against fintech small-business lender Kabbage Inc., charging that it partnered with a bank in order to offer interest rates that exceeded the legal limit, highlights the need for more regulatory oversight of the growing number of online lenders signing deals with small businesses.

Online lenders are getting more scrutiny.

The recent Massachusetts federal case brought by a small business against Kabbage (and its partner Celtic Bank) highlights why non-bank fintech lenders should be regulated. The suit alleges that Kabbage used its relationship with Celtic — which “rented” its balance sheet to Kabbage — as a basis to charge interest rates that violated usury laws.

How Credit Karma is using data to become a central finance hub (Tearsheet), Rated: A

It’s not a bank, but it uses customer data to help banks find customers.

Currently valued at $4 billion, Credit Karma has 80 million customers — half of whom are millennials. The company joins a growing number of financial startups like Clarity Money, SoFi, Chime and Varo Money that are aiming to become one-stop shops for customers’ finances. The field is growing increasingly competitive. Meanwhile, banks are bundling personal finance advice into their mobile apps. But Credit Karma has two advantages its competitors often struggle with — scale and data — and it’s using a chatbot to lock in the relationship with the customer.

A Chase Sapphire experiment is getting revived and expanded after the trial run blew away expectations with millennials last year (Business Insider), Rated: B

Last year, ahead of the spring homebuying season — the busiest of the year — JPMorgan Chase engineered an experiment to gain an edge in the mortgage-lending competition.

So the bank targeted its Sapphire customers, offering another 100,000 in rewards points if they closed a mortgage with the bank — a bonus worth as much as $1,500.

HNW Clients Warming Up To Digital Advice (Financial Adviser), Rated: A

In its report, “The Cerulli Edge—U.S. Retail Investor Edition, 1Q 2018 Issue,” the researcher found that more than one-quarter of investors over 70 who have $2 million to $5 million in investable assets said they would consider online-only engagement. Beyond that, high-net-worth investors in general seemingly are more receptive to digital advice platforms.

In 2015, Cerulli found that 38% of investors with investable assets of $2 million to $5 million said they were willing to engage with digital providers. Last year, that number jumped to 46%. And among investors with $5 million-plus in investable assets, those numbers went from 30% in 2015 to 38% last year.

Why borrower experience will be the principal driver of bank revenue in the lending market (Lendit), Rated: A

Tech giants such as Google and Amazon have rewritten the rulebook for consumers when it comes to what they can reasonably expect from their service providers. Consequently, bank offerings are being judged to the same standard as the most innovative digitally native products in the world.

The benefits of improved customer experience

More generally, banks must focus on improving user experience to remain competitive as digitally native fintech products flood the marketplace. Focusing especially, the motivations for improving customer experience can be described as:

  •  Differentiation Financial services can no longer lean on long-standing relationships and brand positioning to generate new customer business.
  • Positive brand response in addition to research, some customers will also emphasize the emotive impression they receive from a product when making purchasing decisions.
  • Coping with an economic downturn During a recession or other global economic hardship businesses are placed under increased financial strain. Services viewed positively by their existing clients will stand a better chance of retaining their clients as well as growing their client base during the downturn.

Pindrop Introduces New Biometric Solution: Tongueprinting (Finovate), Rated: A

Banking Technology’s Anthony Peyton reports that the Atlanta-based anti-fraud and authentication specialist has unveiled Tongueprinting, a technology that analyses every person’s unique tongue as its newest biometric engine. Banking Technology is Finovate’s sister publication.

The idea is for Tongueprinting to stop fraudsters from taking over legitimate accounts by spoofing the call centre with automated bots, social engineering, and knowledge-based authentication questions.  

HomeUnion Launches Crowdfunding Platform for Individual Investors (Business Wire), Rated: A

HomeUnion, the leader in online residential real estate investing, has launched a crowdfunding platform that allows investors to purchase stakes in funds of single-family rental (SFR) properties on its website. Starting with a minimum investment of $10,000, retail investors now have the ability to acquire interest in the HomeUnion Fix-and-Flip Fund. The fund enables consumers to invest in SFR assets acquired for fix-and-flip purposes in seven HomeUnion markets: Atlanta, Austin, Charlotte, Chicago, Dallas, Raleigh and Tampa.

Upstart tests buyer appetite with riskier loans, more sub notes (Global Capital), Rated: A

Online lender Upstart is the latest marketplace loan company to broaden the risk profile of its ABS, announcing a deal this week offering more subordinate bonds and backed by a higher proportion of longer term loans.

The California-based lender, founded by ex-Google employees, uses an underwriting model which incorporates data points beyond borrowers’ FICO scores, utilizing other factors such as schools attended, areas of study, academic performance and work history.

Is low pay hurting banks in the battle for tech talent? (American Banker), Rated: A

Conversations about pay in the banking industry typically focus on whether executives at the top are paid too much or workers at the bottom are paid too little.

But new data available as a result of the Dodd-Frank Act is drawing rare attention to the compensation of employees in the middle. In what will become an annual exercise, publicly traded U.S. companies are now required to disclose annually the median pay of their employees.

Information and Data Integrity: A Two-Way Street (Lendit), Rated: A

For many businesses, data is an important aspect of decision management. When you are choosing with whom to do business, you rely on the validity of data to guide you. If it proves faulty, you may be steered into accepting bad customers or rejecting good ones, which can seriously affect your bottom line. For consumers, inaccurate data can be equally harmful—leading to the appearance of having bad credit, denials of services or products or worse, flagged as potentially fraudulent.

Spanning both digital and real worlds, and encompassing data about identity, financial characteristics, behaviors and more, an integrated view is the foundation of enhanced insights that can ultimately improve financial outcomes. TransUnion understands the importance of current, accurate data and gives its customers access to information—including both highly-regulated and publicly available forms of alternative data—that creates powerful, comprehensive views of consumers.

Here’s Why Millennials Are Choosing Personal Loans (Lendit), Rated: A

When it comes to millennial spending habits, it looks as though they’re rounding a corner to a new kind of credit. With the vast treasure trove of accumulated data available, credit bureaus like TransUnion are seeing spikes in personal loans compared to Generation X’s spending habits in the early 2000s. It’s a tremendous opportunity for marketers to capture a demographic that expects more from their lender.

The Overarching Trends

The newly minted adults of Generation Z are at the very beginning of their financial journey, but millennials are at the age where they’re expected to make major purchases. As they struggle with the economy and student debt, they’re making different financial choices along the way.

Adopting New Technology

Lenders are turning to financial technology (fintech) to help peddle their products, which millennials are all too happy to use. Ironically, applying for a personal loan without the face-to-face connection can be far more attractive than the traditional application process.

A Decline in Credit Card Usage

Right or wrong, credit cards have long been linked to perpetual debt in many people’s minds. In 2009, the CARD Act was introduced to place stricter limits on the marketing of credit cards at college campuses. Debit cards have become more of the rule as opposed to the exception, leaping from 8 billion transactions in 2000 to 60 billion in 2015.

Small Business Confidence Is Up, What Does that Mean? (Lendit), Rated: A

The year 2017 saw small business owners across the United States grow more optimistic about the future than they’ve ever been—at least since the creation of the Optimism Index by the NFIB in the 70s.  “2017 was the most remarkable year in the 45-year history of the NFIB Optimism Index,” said NFIB President and CEO Juanita Duggan.

The Tax Bill Could be a Boon for Small Businesses

Sole proprietorships, partnerships, and S corporations are all examples of what are called pass-through businesses; and make up roughly 95 percent of all U.S. businesses. They also happen to be many of our customers at OnDeck, and other online small business lenders. One of the main components of the new tax bill is a 20 percent tax deduction for those businesses, where business owners can “shield” 20 percent of their business income from flowing through to their personal income tax returns.

Cincinnati-based financial tech startup raises $ 1.2 million (Cincinnati Business Courier), Rated: B

A Cincinnati-based financial tech startup that aims to help users secure low-dollar loans without having to resort to a payday lender raised $1.2 million in venture capital.

Mayor proposes employee loans to offset predatory lenders (Santa Fe New Mexican), Rated: B

A few months after a new annual 175 percent cap on small-loan interest rates in New Mexico went into effect, Mayor Alan Webber is proposing a short-term loan program to help municipal workers avoid payday lending businesses viewed as predatory by consumer advocates.

BlockFi Gives Hodlers Another Option to Borrow Against Crypto Assets (BitcoinMagazine), Rated: B

Options for borrowing and lending with cryptocurrencies are on the rise. One of the latest start-ups to join the likes of SALT and Unchained Capital is BlockFi, a New York City–based startup that issues loans backed by bitcoin and ether to individuals, companies and institutions in 35 U.S. states.

BlockFi takes cryptocurrency as collateral, offering interest rates on loans of around 12 percent. This is generally lower than unsecured loans and higher than loans secured with traditional assets such as securities or real estate.

eBus to offer visitors financial advice, credit reports (The Repository), Rated: B

The eBus is a mobile classroom which is equipped with 14 personal computers and satellite technology staffed by Fifth Third bankers and representatives from nonprofit community organizations. On the bus, visitors can request a credit report and review it with a professional; receive a personalized evaluation of finances; receive internet banking and bill pay demonstrations; speak with nonprofits about housing, money management and business advice; receive consultation on foreclosure prevention; and conduct online job searches.

United Kingdom

Scots ‘side businesses’ generate £1.7bn a year (The Scotsman), Rated: A

More than 500,000 people living in Scotland have started a side business, generating a collective £1.7 billion a year out of more than £33bn UK-wide, according to new research.

Online lender Sunny said many of those north of the Border turning to side businesses are doing so to help with the cost of bills, savings and debts, and bring in an average of £272 a month on top of their main income.

That represents a 20 per cent increase from when they first started their business.

China

China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated: AAA

China will soon be rolling out new licensing requirements for p2p lenders; The system will kick off in April with approvals slated to come at the end of this month, but many lenders aren’t aware of the filing process; in 2016 and 2017 many p2p lenders shut down and according to data there are around 2,000 remaining; it is expected that many of the 2,000 will not pass the new requirements; the new rules won’t allow platforms to guarantee loan payments and also limit loans to individuals and businesses; it will also require that platforms use custodian banks.

China Rapid Finance Executives Selected to Speak at LendIt Fintech USA 2018 (PR Newswire), Rated: A

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF) announced today that the Company will participate as a sponsor and exhibitor at the upcoming LendIt Fintech USA 2018, to be held between Apr 9th and 11th in San Francisco, California.

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

On March 28th, cross-border payment company iPayLinks announced that it had completed, at the beginning of this year, a hundreds of million-yuan B1 round of financing led by Tencent and followed by Legend Capital.

NIFA Issues a Self-Discipline Convention for Debt-Collection Practitioners

The five-chapter convention is mainly applying to regulate the behavior of overdue debt collection within the Internet Finance industry by establishing several basic principles (e.g. observing laws and regulations, prudential regulations, protecting privacy, and strict self-discipline). In other words, the document outlines a framework of debt-collection regulation in terms of discredited punishment, business management, personnel management, information management, outsourcing management, and complaints.

China’s internet lenders fall foul of data privacy rules (Financial Times), Rated: A

More than half of Chinese internet finance lenders are failing to comply with data privacy regulations, research has found, raising risks for investors as China steps up the implementation of laws to protect consumer data.

The breaches include collecting phone numbers from users’ contact lists, which can be used to mount harassment campaigns and shame users into repaying debts.

The survey of 200 finance apps by Renmin University and Nandu Personal Data Protection Research Centre, a Beijing think-tank, ranked 111 apps as having “low” compliance.

It found that almost half — 95 apps — wanted to read users’ text messages, while 97 of them wanted access to users’ contact lists, despite such access not being necessary for the app’s functioning.

International

How retailers are growing their financial services capabilities (Tearsheet), Rated: AAA

Amazon isn’t the only retailer encroaching on the financial services space. It may be the scariest — just the rumor of it entering a company’s space will send its stock price down — but ultimately, Amazon only cares about getting more buyers and more sellers to join its platform.

Overstock’s Raj Karkara, vp of loyalty and financial services, echoed that sentiment earlier this year, saying that offering financial services or connecting customers with financial services providers is a natural extension of its retail function of buying and selling consumer goods.

Rakuten
Rakuten is Japan’s largest e-commerce site and has slowly been growing outside of the country. It has a footprint in media, video-on-demand, mobile messaging, e-books, travel, fashion, marketing and even sports. It also operates the largest online bank in the country.

Overstock
For the past few months, e-commerce company Overstock.com has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing; and, most recently, a discounted trading platform.

Sainsbury (and Tesco)
Amazon may not be interested in becoming a bank but that doesn’t mean it can’t succeed in stealing customer attention from them. The U.K.’s largest grocers have all opened banks attached to their brands —  Sainsbury’s and Tesco.

ETHLend (LEND) Token – Will It Go Down After Kyber Network Partnership? (Hot Stocked), Rated: A

ETHLend has recently partnered up with Kyber Network. The ETHLend (LEND) Token has reached a market capitalization of 45.69 Million US dollars in the last 24 hours. The token traded 9.50%higher against the U.S. dollar during the last 24 hours ending at 10:30 AM EDTon April 2nd. That rise might be as a result of the partnership. ETHLend aims to become another decentralized and secure financial marketplace, but targeting peer to peer lending agreements via Blockchain and Smart Contracts.

Source CoinMarketCap

 

Australia

SMALL BUSINESS LOANS IN AUSTRALIA: SHOULD YOU SEEK FINANCE FROM A BANK OR AN ONLINE LENDER? (Dynamic Business), Rated: A

Considering the small business sector employs nearly half the national workforce and contributes around $380 billion to Australia’s GDP [1], it’s easy to see why it’s frequently referred to as the ‘engine room’ of the economy.

Like all engine rooms, the sector requires sufficient fuel – in this case, working and growth capital – to not only keep running but also accelerate. However, poor access to capital remains a significant barrier to small businesses, accounting for a majority of failures in the sector.

Part of the reason is that banks are reluctant to lend to small businesses in circumstances where the borrower doesn’t have bricks-and-mortar security – especially if a short-term loan is sought.

APRA rejected CBA home loan data as inaccurate and incomplete (Financial Review), Rated: B

Commonwealth Bank was being pressured by the prudential regulator to appoint external consultants and fix its flawed home lending data almost 2½ years before the Hayne royal commission began exposing the big four for sloppy administrative errors and irresponsible lending.

The Australian Prudential Regulation Authority’s frustration with the failure of Australia’s biggest home lender to accurately identify what proportion of its loans were taken out by property investors and its level of exposure to big borrowers has been revealed in evidence tendered to the banking royal commission and published in a massive dump of more than 100 documents late last week.

India

Interest rates on unsecured instant loans are high (LiveMint), Rated: AAA

Financial institutions and fintech companies have launched multiple small credit products in India in the past 1-3 years. It is now possible to get loans even on your mobile phone. But how do you pay for this convenience?

P2P lending platform

Peer-to-peer lending companies such as Faircent, i2ifunding and Lendbox connect lenders and borrowers on their platforms. Usually, the lender is an individual and not a financial institution. The interest rates are between 15% and 36% per annum and the loan amount can range from Rs50,000 to Rs5 lakh. The interest rate is decided based on the credit profile of the customer. Usually, the P2P lending companies take into account your Cibil credit score. The loan tenure is 3 months to 24 months.

Fintech eco-system is moving to blockchain and AI: Rajat Gandhi, Faircent (Economic Times), Rated: A

A lot of players have come into the fintech space. There are wallet players, then there are PPI, P2B, crowdsourcing and other payment players as well. So, regulation is one of the key challenges the private players are going through. What is your take on it?

Surprisingly, the Indian regulators, I would say, are strict. You can see the example of NBFC P2P licences regulation. It is a good rule-based model. In fact, the players themselves were pushing for some kind of regulation because financial markets need them. It’s not like e-commerce or running a taxi where the risks are not that high.

India’s Finzy Raises $ 1.3 Mln At Pre Series A Funding (Reuters), Rated: A

Finzy, India’s fastest growing peer to peer lending platform, has raised USD 1.3 million in first round of Pre Series A from investors in the industry. A second round of fundraising is expected to close with pre-identified set of investors within the next 60 days.

Latin American

Brazilian Loan Marketplace FinanZero raises USD 3.6 million in Series A Funding Round (PR Newwire), Rated: AAA

FinanZero is a leading marketplace for consumer loans in Brazil. The business is an independent broker for loans, negotiating the customer’s loan application with several banks and credit institutions, to find the loan with the best interest rate and terms for the consumer. FinanZero handles the lending process from start to finish.

The Series A round was led by Swedish publicly listed investment company, Vostok Emerging Finance, with participation by other Swedish investors, including Webrock Ventures and Zentro Founders.

Africa

Fintech is central to Nigeria’s future success (Financial Times), Rated: A

Central to this opportunity is an acceleration in the development of a modern banking and financial services sector. We are already seeing huge breakthroughs in digital banking and the adoption of fintech-based services by Nigerian consumers — be they retail or business customers. But this expansion must be encouraged by policies that will see greater inclusion of women and rural communities into mainstream banking activity.

Asia

Meet the most disruptive fintech startup in South Korea (Forbes), Rated: AAA

Viva Republica is the most disruptive fintech startup in South Korea. Since the 2015 launch of its simple peer-to-peer payments app Toss, banks are finally revamping their user experiences and customers have easier access to financial products. South Korea’s mobile payments have more than quadrupled in that time to $4.6 billion, according to Bank of Korea data.

The startup, funded at $76 million, hasn’t stopped there. After PayPal joined a $48 million investment in Toss in March, Toss has grown from a simple money-transfer app to a diverse consumer-finance platform generating Viva Republica’s $20 million in expected revenue in 2017. Toss thus joins Asia’s ranks of fast-growing mobile P2P payment services, reaching a $12 billion transaction volume in 2017.

Authors:

George Popescu
Allen Taylor

Friday February 9 2018, Daily News Digest

personal loans

News Comments Today’s main news: SoFi brightens startup scene in Helena, Montana. LendingTree rates Upgrade #1 personal loan. UK P2PFA gets a new head. India considering digital payments tax rebate for P2P lenders. Today’s main analysis: Why point-of-sale lending is hot. Today’s thought-provoking articles: Industrial loan company (ILC) applications may soon be seen in a positive light. P2P lending […]

personal loans

News Comments

United States

United Kingdom

European Union

International

India

Canada

Africa

News Summary

United States

Startup Fever is Catching on Everywhere (Even in this Little Montana Town) (Inc.), Rated: AAA

There is a new millennial-friendly mixed-use development with a high-end steakhouse, movie theater, and hotel. And yes, even a town of 30,000 located more than 500 miles from the closest major metropolitan areas (Salt Lake and Seattle) has an entrepreneurial ecosystem. In fact, in some ways Helena has a startup scene larger cities would be jealous of. A few years ago, SoFi, the online student loan servicer that also provides personal loans and mortgages, contracted with two local programmers to help build their platform.

One of those programmers, David Thompson, is a graduate of the University of Montana-Western, Montana Tech, and the University of Montana. David had no interest in moving to the Bay Area, and successfully convinced SoFi to locate a substantial portion of its engineering team in Helena. Today SoFi is multi-billion-dollar startup, and David is the VP of Engineering, managing more than 100 programmers and engineers out of two locations in Helena.

For the last several decades–and especially over the last few years–we’ve heard a lot about the death of small towns and middle America. However, the success of SoFi and the emerging startup scene in Helena shows the potential for tech companies to be agents of economic revitalization in small towns and cities outside of the coasts.

LendingClub Schedules Fourth Quarter 2017 Earnings Release and Conference Call (PR Newswire), Rated: AAA

LendingClub (NYSE: LC), America’s largest online marketplace connecting borrowers and investors, announced that it will report earnings for the fourth quarter of 2017 on Tuesday, February 20, 2018, after market hours. LendingClub will host a conference call to discuss the fourth quarter financial results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on the same day.

A live webcast of the call will be available at  under the Events & Presentations menu. To access the call please dial +1 (888) 317-6003 or outside the U.S. +1 (412) 317-6061 with conference ID 8062913 ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time).

Elevate Credit Fourth Quarter and Full Year 2017 Earnings Release Available on Its Investor Relations Website (BusinessWire), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced financial results for the fourth quarter and full year 2017. Elevate has posted its fourth quarter and full year earnings release to its Investor Relations webpage at 

The Company will host a conference call to discuss its fourth quarter and full year financial results on Thursday, February 8th at 4:00 p.m. Central Time / 5:00 p.m. Eastern Time. Interested parties may access the conference call live over the phone by dialing 1-877-407-0792 (domestic) or 1-201-689-8263 (international) and requesting the Elevate Fourth Quarter and Full Year 2018 Earnings Conference Call. Participants are asked to dial in a few minutes prior to the call to register for the event. The conference call will also be webcast live through Elevate’s website at 

Upgrade, Inc. Rated #1 Personal Loan by LendingTree (PR Newswire), Rated: AAA

Upgrade, Inc. (), a consumer credit platform that combines personal loans with tools that help consumers understand and monitor their credit, announced that it has been named #1 in the personal loans category for the fourth quarter of 2017 by LendingTree.

Why point-of-sale lending is hot right now (American Banker), Rated: AAA

But research conducted by banks and fintechs has found that many younger Americans are uncomfortable carrying credit card balances, partly because they saw their parents struggle with debt during the financial crisis and prefer the more certain repayment terms of installment loans.

Personal loans issued by banks — these exclude credit cards and auto and home equity loans — hit a record $807 billion at Sept. 30, according to data from the Federal Deposit Insurance Corp., up 9% from two years earlier and nearly 30% since 2012. That’s not even including the many billions of dollars of loans made by upstart online lenders that don’t end up on banks’ balance sheets.

San Francisco-based Affirm originated more than $1 billion in point-of-sale loans last year — and, increasingly, regional banks that are funding the loans, either directly or behind the scenes.

Source: American Banker

Inside Overstock.com’s financial services strategy (Tearsheet), Rated: A

For the past few months, the 19-year-old e-commerce company has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing, as of last week — and as of Tuesday morning, a discounted trading platform.

Fintech Firms Look to Enter Banking Via Century-Old Tactic (WSJ), Rated: AAA

Financial-technology firms eager to offer banking products are eyeing a century-old model that fell out of favor during the financial crisis but could see a revival under the Trump administration.

The industrial loan company charter, available in a handful of states and particularly popular in Utah, allows nonfinancial companies to enter the banking sector without being subject to many of its restrictions, including oversight by the Federal Reserve. Companies seeking the charters must still obtain deposit insurance from the Federal Deposit Insurance Corp., which last approved insurance for an industrial loan company in 2008.

That could soon change. President Donald Trump’s pick to head the FDIC, Jelena McWilliams, suggested during Senate testimony last month that she would look favorably on new applications.

Source: The Wall Street Journal

Who Is Chris Larsen? Founder Of Ripple Tops Forbes Cryptocurrency List (International Business Times), Rated: A

According to Forbes, Larsen’s net worth is between $7.5 billion and $8 billion in cryptocurrency, in large part thanks to his massive holding of Ripple—the cryptocurrency he co-founded in 2012.

Larsen, a Stanford M.B.A. and veteran Silicon Valley player, is no stranger to the world of digital finance. Prior to his involvement in cryptocurrency, he co-founded the online mortgage lender E-Loan. The company was valued at $1 billion in 2000. In 2006, he co-founded Prosper Marketplace—the first peer-to-peer lending marketplace in the United States.

Goldman Sachs is trying to build the ultimate financial destination for the masses (Business Insider), Rated: A

Individuals looking to saddle up with the prestigious bank needed to fork over a minimum investment of $10 million for wealth management services. The typical client had more than $50 million in investable assets.

Personal Capital Launches Socially Responsible Investing (Finovate), Rated: A

Wealth tech company Personal Capital is making it easier for investors to put their money in causes that are important to them with the launch of its Socially Responsible Personal Strategy today.

Autobooks Raises $ 10M in Series A1 Funding Round (Finsmes), Rated: A

Autobooks, a Detroit, MI-based fintech startup, raised $10M in Series A1 funding.

Toyota partners with AI firm Aire to spot finance delinquency (Motor Finance), Rated: A

Toyota Financial Services (TFS) has launched an evaluation of AI software from Aire to spot customers with higher risks of delinquency.

Aire’s machine learning technology will identify which lessees have entered customer delinquency by skipping a payment, and will give TFS an estimate on how likely they are to default on further instalments.

Aire’s software has already been used by lenders, including p2p lender Zopa, in the initial credit application phase.

Confluent Continues Momentum in 2017 with 4X Subscription Growth (Digital Journal), Rated: A

Confluent, provider of the streaming platform based on Apache Kafka, today announced 2017 results, which include 4X subscription growth year over year and 98 percent customer satisfaction.

In the 2017 Apache Kafka Report, many companies reported using the distributed streaming platform for more accurate and faster decision making, reduced operating costs, improved customer experiences and reduced risk. 1 in 4 respondents work for organizations with more than $1 billion in annual sales, illustrating how quickly this technology has gained traction across large enterprises. In addition, more than 15% of respondents are processing more than a billion messages a day.

Other 2017 highlights include:

  • Raised $30 million from Sequoia, Index Ventures and Benchmark to meet global demand for streaming platforms.
  • Expanded employee base by 120 percent, added numerous offices throughout the US and extended its footprint to six additional countries.
  • Added new customers around the globe, including Alight Solutions, Capital One, Funding Circle, HomeAway and Nordea Bank.
  • Announced the general availability of Confluent Cloud, an Apache Kafka as a Service offering that empowers enterprises and developers to move faster with streaming data.
  • Surpassed 200 partners, including some of the largest Systems Integrators and Platform partners in the industry.

Fintech partnerships can work (American Banker), Rated: A

That Radius Bank in Boston would strike another fintech partnership — it announced one Wednesday with the startup Mantl, which is trying to cut down online-account openings to four minutes — is less revealing than its part in Radius’ evolving MO.

When Nathaniel Harley, CEO of Mantl, first visited Radius, he was seeking feedback on a personal financial management technology the company was working on. But he was quickly talked into changing the direction of his company.

The two companies started building an account-opening system for all digital channels in March 2017. They worked to reduce manual entry and other hassles from the account-opening process. Mantl brought in one of its own fintech partners, Alloy, to handle much of the decisions, including anti-money-laundering checks, identity verification and fraud detection. Radius and Mantl used Alloy’s workflow management tool to configure the decision-making process.

Source: The American Banker

Mulvaney can’t just kill CFPB payday rule, but here’s what he can do (American Banker), Rated: A

Banking rules cannot be rewritten overnight, and so acting Consumer Financial Protection Bureau Director Mick Mulvaney has a tall order remaking the payday loan regulation crafted under his predecessor. But observers say Mulvaney has options for altering the rule to the industry’s favor.

One option would be to refocus the rule on disclosure requirements, which would be several steps short of a repeal but more amenable to lenders than the current CFPB regulation.

Democratic senators demand answers on CFPB’s stalled Equifax data breach investigation (Housingwire), Rated: A

Did the Consumer Financial Protection Bureau kill its investigation into Equifax’s data breach that exposed the personal information of 145.5 million U.S. consumers to hackers?

On Thursday, a group of 32 Democratic senators sent a letter to the CFPB, demanding answers on the state of the bureau’s investigation into the Equifax breach.

CFPB Seeks Comment on its Enforcement Processes (The National Law Review), Rated: A

The CFPB has issued a request for information that seeks comment on how the agency can best achieve meaningful burden reduction or other improvement in the processes it uses to enforce federal consumer financial law while continuing to meet the CFPB’s statutory objectives and ensuring a fair and transparent process.  Comments on the RFI must be received no later than 60 days after the date it is published in the Federal Register, which the CFPB expects to be February 12, 2018.

In the new RFI, the CFPB now seek comment on all aspects of its enforcement processes but lists the following seven topics:

  • Communication between the CFPB and subjects of investigations, including timing and frequency of such communications and information provided by the CFPB on the status of an investigation
  • Length of CFPB investigations
  • Notice and Opportunity to Respond and Advise (NORA) process, including whether the NORA process should be mandatory rather than discretionary and the information contained in letters the CFPB may send to potential subjects of investigations pursuant to the NORA process
  • Whether subjects of potential enforcement actions should have the right to make an in-person presentation to the CFPB before the CFPB decides whether to initiate legal proceedings
  • Calculation of civil money penalties, including whether the CFPB should adopt a civil penalty matrix
  • Standard provisions in CFPB consent orders
  • Manner and extent to which the CFPB can and should coordinate enforcement activity with other federal and/or state agencies with overlapping jurisdiction

Altegris To Merge With Artivest (PR Newswire), Rated: A

Altegris, an alternative investment research and management firm, and Artivest, an alternative investment technology firm, announced today that they plan to merge under the name Artivest, pending customary corporate and regulatory conditions to closing. The joint 100-person team will service over $3 billion in client capital—immediately becoming the largest independent alternative investment technology and solutions firm for wealth managers, fund managers, and independent advisors.

SharesPost Launches Unit Focused On Initial Coin Offerings; Hedge Fund Executive John Wu To Lead Group (BusinessWire), Rated: A

Taking a next step in its mission to provide liquidity to private growth companies,SharesPost today announced the launch of its Digital Securities Group.

The Digital Securities Group will bring security token issuers and investors into the SharesPost private marketplace. Token issuers and investors will use SharesPost’s existing Alternative Trading System to invest in ICO’s and trade in digital securities in compliance with U.S. securities laws.

Lenders to allow Airbnb income on mortgage forms (MarketWatch), Rated: A

Homeowners soon will be able to count income they earn from Airbnb Inc. rentals on applications for refinance loans.

A new program — expected to be announced on Thursday by Airbnb, mortgage giant Fannie Mae and three big lenders — will allow anyone who has rented out property on Airbnb for a year or longer to count some or all of that money as income.

SEC Exams to Focus on Disclosures, Robos, Cryptocurrencies (Financial Advisor IQ), Rated: B

In 2018 the SEC’s Office of Compliance Inspections and Examinations plans to pay closer attention to matters involving retail investors, particularly when it comes to disclosures, and zero in on cryptocurrencies, initial coin offerings and secondary market trading, the regulator says in a press release.

The regulator will also continue monitoring digital advice platforms, with a special focus on their compliance programs, including algorithm oversight, investor data protection and disclosures of conflicts of interest, according to the exam priorities. The SEC has made progress in the ratio of investment advisors it examines each year, from just 8% five years ago to 15% in fiscal year 2017, the regulator says. In 2018, the SEC plans to target those advisors it has never examined before, according to the regulator.

Former Keller Williams CEO Chris Heller joins loanDepot brand family as CEO of mello Home (loanDepot), Rated: B

LD Holdings Group, LLC, parent company of loanDepot, the nation’s fifth largest retail lender, today appointed top real estate executive Chris Heller to head its recently-launched mello Home business. Combining digital simplicity and smart local advice, mello Home seamlessly connects home buying, financing, and improvement services into a single consumer experience.

Fintech looks to the future of financial advice at T3 (InvestmentNews), Rated: B

If the theme of the 2017 T3 Conference was the fiduciary rule, 2018 was all about the future of financial advice.

Quovo launched Cue, a new alerts engine that leverages Quovo’s aggregation technology to notify financial advisers about account activity and client milestones.

MoneyGuidePro announced a new partnership with MX, a data aggregation provider, that lets advisers bring held-away assets into the financial planning software.

 

United Kingdom

UK P2P Finance Association Announces a New Leader (Lend Academy), Rated: AAA

It was through the work of the P2PFA, led by Christine Farnish, that these regulations were sensible and promoted the growth of the industry there. And while this initial regulatory framework is currently being reviewed by the FCA, today, the UK is one of the most competitive markets in the world in no small part because of these initial regulations.

Paul Smee brings more than 17 years experience in leading trade bodies in the UK. Previously, he was Director General of the Council of Mortgage Lenders for six years so he comes with experience leading finance trade bodies. He looks like a great choice to take over from Christine.

City Moves for 9 February 2018 – who’s switching jobs at Lendy, RegTek.Solutions and M&G? (City A.M.), Rated: B

Lendy, one of Europe’s leading P2P secured property platforms, is pleased to announce the appointment of Andrew Wawrzyniak as its new head of finance. Andrew was previously head of finance at Fund Partners, a leading fund manager, which specialises in the operation of collective investment schemes.

RegTek.Solutions, the market-leading control and compliance software provider for global trade and transaction reporting, has appointed Rob Bernstein as chief financial officer (CFO).

Rebuildingsociety partners with Leeds Council to support local businesses (P2P Finance News), Rated: A

PEER-TO-PEER business lender Rebuildingsociety has secured an agreement with Leeds City Council whereby the local authority funds loans through its platform.

The council will review business loan requests from companies with an LS postcode prefix, consider the industry and location of the company, and contribute to the loan amounts required by suitable applicants.

European Union

P2P Lending Is Becoming A Significant Income Source For Young Investors (Crowdfund Insider), Rated: AAA

According to Robo.cash, P2P lending is turning to a significant source of additional income for the growing number of the European investors.

The online lending platform also confirmed:

“The majority of investors are in the age groups: 25-34 years — 40%, 35-44 years — 31%, 45-60 years — 20%. The less number is the age of 18-24 years (6%) and 61 plus (3%). These figures are supported by the employment of investors: employees — 72%, entrepreneurs — 15%, students — 6%, retiree — 2%. At the same time, the most investors are just getting acquainted with P2P-services (52%) and the comparable number already has at least one-year practice: 1-3 years — 34% and over 4 years — 13%.”

Is Lithuania the most fintech-friendly destination in Europe? (Finextra), Rated: A

The country has been actively promoting itself as gateway destination to the European marketplace for non-EU firms and British startups fleeing Brexit. Registering a company takes merely three days, while getting a Payment Institution or Electronic Money Institution license takes only three months, two-to-three times faster than in other EU jurisdictions. Other perks include remote Know Your Customer (KYC) procedures, low profit tax, startup visa options and a sandbox regime for fintech startups in their first year.

The country also boasts a growing talent pool of up to 31,000 trained IT professionals with a further 8000 in the pipeline.

Lithuania Registered 35 New Fintech Companies in 2017 (Crowdfund Insider), Rated: B

This week, Invest Lithuania released the Lithuania Fintech Report 2017, which revealed that a total of 117 fintech companies were operating in the country in 2017, with 35 of them being registered last year.

International

IOU financial partners with goEBT to offer funding to network of 25,000 convenience store owners (Business Insider), Rated: AAA

IOU FINANCIAL INC. (“IOU” or “the Company”; TSX-V:IOU), an online lender to small businesses (IOUFinancial.com), is pleased to announce a strategic partnership with Marietta, GA-based c-store solutions provider goEBT (goEBT.com).  Through this strategic partnership, goEBT’s network of 25,000 convenience store owners nationwide will be able to access IOU’s fast, convenient, non-collateral funding solutions.

LENDDO AND EFL TEAM UP FOR FINANCIAL INCLUSION (#Include1Billion), Rated: A

Our companies come together united by the common vision of providing financial inclusion for more than one billion new and underserved individuals across the globe. We will together provide a suite of credit scoring and identity verification products to more than 20 emerging markets.

Our companies have individually facilitated over 5 million credit assessments since inception, allowing more than 50 financial institutions to disburse over $2 billion USD in credit to people with limited information.

The first joint product offering is already live in Asia and Latin America, with additional products and features scheduled for release in the coming months.

From #Include1Billion

Fuse Business Loans from Mynt began working with LenddoEFL to assess credit risk for its clients that were 80% unbanked.

Foxconn’s Gou said to invest in US crypto merchant bank venture (EJ Insight), Rated: A

Terry Gou, the billionaire chief of Taiwanese electronics giant Foxconn, is said to have invested in a cryptocurrency merchant bank being set up by Mike Novogratz, a former Wall Street macro hedge fund manager.

Citing a source familiar with the matter, Bloomberg reported that Novogratz has raised about US$250 million for his cryptocurrency merchant bank venture through a private placement.

India

Google search bias fine, Swiggy funding, Digital payments tax rebate & more (ET Tech), Rated: AAA

The government might consider giving tax rebates to merchants accepting payments digitally in order to promote the overall fintech sector, which is at its infancy at present but growing at a rapid pace, suggested the Reserve Bank of India.

Talking about the fintech sector the RBI has identified tech startups working in the space of peer-to-peer lending, blockchain, big data, smart contracts, robo advisors and online aggregators.

Read more.

HOW TO FUND YOUR HIGHER STUDIES (Money Today), Rated: AAA

Traditionally, one’s option was limited to getting an education loan from a public sector bank. Now that the demographics are favourable and the education loan market has the potential to grow, non-banking finance companies (NBFCs), fintech players and peer-to-peer (P2P) lenders are jockeying for a piece of the market.

Seek more funding: Education loans are part of the priority lending category, but unlike the US, there is no provision for student loan waiver in India. It means your loan will not go away until you pay it off. Try and find out if there is any other source of funding available, including financial aid, bursary and scholarship or upfront savings, which will bring down the loan amount.

What Banks Offer

Most of them offer education loans for studying medicine, engineering or management at graduate and post-graduate levels or for pursuing further studies in India and abroad. Some also provide categorised loans. For instance, State Bank of India (SBI) offers Scholar Loan for students who get admitted to premier institutions like IITs, IIMs, NITs and AIIMS, and a Global Ed-Vantage loan for studying in global counterparts. Bank of Baroda offers Baroda Scholar loan for studying abroad and Baroda Gyan loan for higher studies in India while separate schemes are available for courses conducted by the country’s top institutions.

Source: Money Today

Fintech/P2P Players

Landing an education loan may not be easy anymore, given the spurt in defaults. And that is where the new-age fintech firms and P2P lenders see a lucrative opportunity. “For those who fail to qualify for education loans from banks and NBFCs, P2P lending platforms can be an alternative way to borrow,” says Gaurav Aggarwal, Associate Director, Unsecured Loans, at Paisabazaar. In other words, aspiring students can raise personal loans from banks or fintech players like MoneyTap and LoanTap, or P2P lenders like Faircent and CreditMantri to cover their educational expenses.

What Lies Ahead For India’s Fintech Sector? (CXO Today), Rated: A

To understand what lies ahead for India’s fintech sector, it makes sense to understand the fintech growth is expected to boom in the Asia Pacific region. A Frost & Sullivan report predicts that the region is expected to grow at a CAGR of 72.5% from 2015 to 2020, reaching US$72 billion.

According to Quah Mei Lee, Industry Principal, ICT, Asia-Pacific, the mobile payments market in Singapore was estimated to be worth US$1.4 billion in 2017. The market is still small but is growing fast.

Indian digital payments industry is expected to reach $700 billion by 2022 in terms of value of transactions.

It is expected that more than 80% of the urban population in India will adopt digital payments as a part of their routine by 2022, and 70% of the retail chains will adopt the same.

Canada

A Canadian Way to Access US Small Business Lending (Stockhouse), Rated: AAA

Enter IOU Financial.  As “online lending” has become a 21st century reality, a financial niche has sprung up with online lending institutions that are prepared to cater to small businesses and provide badly needed capital, efficiently and affordably.

Compared to the above, IOU Financial provides easily manageable, working capital term loans for small business, and does so:

  • Quickly
  • Efficiently
  • Affordably

The speed of IOU’s loan application process is a big draw for small business owners.  IOU’s application generally takes roughly three to five minutes to complete.

Source: Stockhouse

 

Grounded Kitchen & Coffeehouse is OnDeck’s Small Business of the Month (PR Newswire), Rated: A

OnDeck (NYSE: ONDK), the online lender to small businesses, today announced that Grounded Kitchen & Coffeehouse, owned by Amir Rahim, has been selected as the OnDeck Small Business of the Month for February, 2018. The Ottawa-based restaurant is the first small business in Canada to earn the OnDeck spotlight award.

Africa

Glaring Ponzi Schemes In Ghana Now (Modern Ghana), Rated: A

So assuming I have $1000.00 I have no use for and would want to make a little interest on, All I have to do is go unto one of these platforms to match me with someone in need of $1000.00. These platforms because of the high risk they take (borrowers don’t provide tangible collaterals) usually charge higher interest and in return given higher interest to lenders than Treasury Bills will normally do. This idea is supposed to be easy and help people financially as there is gap between loans needed and financial institutions willing to give (“The two largest peer-to-peer (P2P) lending platforms, Prosper and LendingClub founded in 2005 and 2006 respectively, have originated over $6 Billion in loans to date. Although they have only begun to scratch the surface of the $3 trillion consumer debt market” Nav Athwal Cofounder and CEO of RealtyShares, a crowdfunding for real estate platform). Yet like most good things miscreants, hooligans and hoodlums find a way to make the system corrupt.

These swindlers promise up to a 100% interest rates within 5 working days. So they lure greedy but naïve people to roll in cash through mobile money. With a Minimal amount of GHC100.00 you get registered and paired with another person. You’re required to send the money to this person who they claim registered 5 days ago and the said day is the day of maturity.

Ways to spot financial scams and Ponzi schemes
1. If your interest is too good to be true, then its probably a lie. When you’re being offered an interest bigger than the T Bills in lending you should be wary and do due diligence.

2. They usually don’t tell the project in which your money will be invested.

3. Pressurised to respond quickly? 4. Are the contact details vague?

Authors:

George Popescu
Allen Taylor

Friday February 2 2018, Daily News Digest

Groundfloor repayment timelines

News Comments Today’s main news: Alibaba acquires 33% stake in Ant Financial. MPL issuance grew by 100% year-over-year in Q4 2017. RateSetter prepares investors for IFISA launch. Bitbond launches alt investment fund with 1741 Fund Management. Today’s main analysis: An empirical analysis of Groundfloor’s loan vintages. International P2P lending volumes for January 2018. Today’s thought-provoking articles: The effect of […]

Groundfloor repayment timelines

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Africa

News Summary

United States

PeerIQ 4Q17 securitization tracker shows growth of marketplace lending industry (Bankless Times), Rated: AAA

Ten marketplace lending securitizations priced this quarter totaled $4.4 billion, a record for quarterly issuance, head of research Ashish Dole said. That is 100 per cent growth in issuance over the same quarter in 2016. Cumulative issuance is now $28.2 billion from 106 deals.

THE EFFECT OF ORIGINATION GROWTH ON QUALITY: AN EMPIRICAL ANALYSIS OF LOAN VINTAGES (Groundfloor), Rated: AAA

As we addressed those limitations by qualifying our offering with the SEC and raising our first round of venture capital funding in 2015, new critics emerged to say that while we might be able to lend in a local market at a small scale, we could never lend nationwide in very large numbers without compromising loan quality. In 2016, we set out to build a lending operations team (including risk management, underwriting, and asset management) with the professional expertise, policies, tools and processes to do just that. Our aim was to improve loan quality and volume simultaneously, well beyond our home market.

How have we done?

Vintages

Vintage A is composed of 88 relatively small, mostly local Atlanta-area loans originated during Groundfloor’s formative years, a period of 30 months (2.5 years).

Vintage B, by contrast, is composed of 222 loans that were originated following our addition and application of greater lending expertise. This vintage is more than 2.5X larger, and was originated over the course of 24 months (two years, a 20% shorter period of time).

Source: Groundfloor

Performance Measure #2: Timeliness of Repayment

For each vintage, we analyzed when loans repaid in relation to their maturity dates. Here is a comparison of the timeliness of repayment for Vintage A and Vintage B, with percentages provided to break down the share of repaid loans.

Source: Groundfloor

Here is a snapshot of the situation as of December 31, 2017:

Source: Groundfloor

Juniper Square raises $ 6M for its real estate investment platform (TechCrunch), Rated: A

Juniper Square, which today announced it has raised a $6 million Series A round led by Felicis Ventures, is tackling the real estate investment side by helping investment managers raise and manage outside capital for their projects.

Today’s funding round brings the company’s total funding to date to $8 million; the company plans to use the new influx of capital to accelerate its product development and grow its team to better service its user base.

Overstock Introduces Robo-Advising Investment Platform tZERO Advisors (Crowdfund Insider), Rated: A

Overstock.com, Inc. (NASDAQ:OSTK) has introduced a digitally-driven investment platform (aka robo-advising), presented by tZERO Advisors. The service is accessible to investors through the online retailer’s FinanceHub. For a monthly fee of $9.95, investors can either select from a group of pre-established Adaptive Dynamic Portfolios matched to their investment profiles, or create a customized blend of these portfolios.

States mull loosening of laws in response to CFPB payday rule (American Banker), Rated: A

The Consumer Financial Protection Bureau’s payday loan rule was supposed to reduce the number of Americans who get mired in debt they can’t afford.

But in an ironic twist, the 4-month-old rule is being used in state legislatures to justify the creation of a new category of loans that would be even costlier for many borrowers.

One such bill in Florida has zipped through three legislative committees in recent weeks. The Indiana House of Representatives voted to pass a similar measure Wednesday.

Bradley Strock, PayPal CIO, Joins Elevate’s Board of Directors (BusinessWire), Rated: A

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that Bradley Strock has joined its Board of Directors, effective immediately.

Mr. Strock joined PayPal in 2011 and since 2014 has been its Chief Information Officer.

Chase is using memes and GIFs to bring millennials to QuickPay (Tearsheet), Rated: A

JPMorgan is focusing its Zelle efforts on millennials, despite the platform outwardly claiming it’s not targeting that age group.

Chase will soon roll out an animated GIF campaign on social media as the second part of its Quick Pay with Zelle campaign.

With Chase QuickPay with Zelle, they can set recurring payments so you never wait for rent again. The best part? It’s already in your Chase Mobile app.  href="https://t.co/tQyDUm75Hf">pic.twitter.com/tQyDUm75Hf

In 2017 Chase saw a nearly 50 percent increase in p-to-p transactions — which includes all transactions before and after it joined the Zelle network — and a 15 percent increase in enrollments.

On Monday Zelle reported it transacted $75 billion across its member banks in 2017. Venmo processed $30 billion in the same period.

Subcommittee hearing looks at challenges, opportunities with fintech (Financial Regulation News), Rated: A

The House Subcommittee on Financial Institutions and Consumer Credit convened this week to discuss opportunities and challenges in the financial technology, or fintech, market.

“From online lending and payment companies to blockchain and cryptocurrencies, advances in financial technology are changing the way financial markets work and how consumers access credit,” Subcommittee Chairman Blaine Luetkemeyer (R-MO) said.

“Fintech lenders present an opportunity to expand credit access and quality. Although such lenders should be subject to appropriate regulation, the regulation must work with the fundamental economic reality of the market,” said Brian Knight, director of the program on financial regulation and senior research fellow at Mercatus Center, George Mason University. “Ensuring that regulations do not burden fintech lenders more heavily than their bank competitors are burdened and that the validity of their loans is not in doubt are important steps toward helping realize the promises of innovation.”

EquityBuild Launches New Website Showcasing Their New Revolutionary Hybrid Capital Fund (PR Web), Rated: A

EquityBuild announces the launch of their completely new website and newest investment product EquityBuild Fund.This site is dedicated to the company’s new revolutionary hybrid capital fund only available on their platform.

How to boost your monthly income: The easy way (Augusta Free Press), Rated: A

Safe investments are a real thing, and there cannot be a more secure way of investing in interest rates at a lending club. However, the alternative for which you must search is a peer-to-peer lending platform, where investors finance loans and then get interest rates as high as 10% on a yearly basis.  For instance, you could start with an initial deposit of $2,500, as the starting investment rate is 25%.

Cryptocurrency passive income is a thing – And you should try it

  • Decred – Decred is a self-funded crypto platform, where investors have a share of the platform’s currency even at the very beginning.
  • AKR – is a mining platform which offers each investor, even at the beginning of their journey a “delegated proof of work”. It works literally all around the clock and you virtually have to put NO EFFORTS.
  • NEO – another passive crypto income for those searching to round a bit their monthly income. The network works on “Gas” – this is the name of this small cryptocurrency.

Square shares climb after the payments company launches bitcoin trading for most users (CNBC), Rated: B

Nearly all users of Square‘s Cash payments app can now buy and sell bitcoin on the platform, CEO Jack Dorsey announced Wednesday.

The service will not be available for customers in New York state, Georgia, Wyoming and Hawaii, according to Square’s website.

LendingPoint Names Antonio Martino as New Chief Financial Officer (BusinessWire), Rated: B

LendingPoint, the online balance sheet lender and provider of the LoanHero point of sale financing platform, today announced that Antonio Martino has joined the company as its Chief Financial Officer (CFO).

Martino is a financial industry leader with more than 25 years of experience spanning 10 countries. Most recently he was Director, Citi Corporate Treasury, where he had global oversight roles within the asset liability management and balance sheet management processes for Citibank, N.A. Previously, Martino served as CFO of Citibank in Turkey and across Central Europe, with roles in Istanbul and Budapest, Hungary. In addition, Martino was Finance Director of Citibank Poland’s consumer banking division in Poland and Vice President of Finance within Citibank credit card business in Canada. Martino started his career in public accounting with Ernst & Young.

United Kingdom

RateSetter starts preparing investors for IFISA launch (P2P Finance News), Rated: AAA

RATESETTER has begun emailing existing investors to get them ready for the launch of its Innovative Finance ISA (IFISA) this month.

The peer-to-peer lender sent messages to its customers on Thursday revealing that the IFISA would be made available to investors in the order they opened accounts.

Innovative Isas finally take off (MoneyWeek), Rated: A

The new innovative finance individual savings accounts (IF Isas) raised just £17m in the 2016-2017 tax year, their first year of operation, but the figure for 2017-2018 looks set to be a lot higher, says HM Revenue & Customs. IF Isas enable savers to use their annual Isa allowance to invest through peer-to-peer (P2P) lending platforms, which match investors looking for income with borrowers who need a loan.

In all, more than 30 platforms now offer the product, and providers report high demand – so much so that the market’s potential size in 2017/2018 may be limited only by the platforms’ ability to source enough borrowers who want to take out loans from investors wanting to lend.

Folk2Folk launches local lending movement (Bridging&Commercial), Rated: A

The local lending movement has been created by the peer-to-peer lending platform to build and sustain socially and financially successful rural communities.

Folk2Folk intends to incorporate this ethos into its behaviour and activity.

The movement involves the participation and support of the platform’s lenders and borrowers, legal and accountancy partners, local authorities, MPs, chambers of commerce, local enterprise partnerships, surveyors, land agents, local cooperatives, leisure and tourism platforms, interest groups, community associations, charities, business groups and banks.

Novae GC joins payday lender Wonga after company takeover (The Lawyer), Rated: A

Payday loan company Wonga has hired a new general counsel following the departure of Bill Flynn after nearly three years.

Goji celebrates first year of investment bond (Bridging&Commercial), Rated: B

Goji has reported a strong first year for its diversified lending bond, which has yielded a net return of 6% to investors.

The Business Funding Show closes the funding knowledge gap (KCW Today), Rated: B

The only funding exhibition in the UK and EU is returning to London for its third year. The Business Funding Show will be held on 22nd February 2018 at East Wintergarden and will connect entrepreneurs to top funders and service providers through conference talks,  an exhibitor showcase, and one-to-one investment clinics.

BFS aims to bring awareness to entrepreneurs about alternative funding options, from crowdfunding and peer-to-peer lending to business angels and venture capital. The event saw a 33% increase in attendance in 2017, a figure the organisers aim to surpass this year.

China

Alibaba nabs 33% stake in Alipay operator A (IT Brief), Rated: AAA

With Alipay and Alipay Wallet under its umbrella, the company also runs 4 other major businesses: Yu’e Bao, Zhao Cai Bao, Ant Credit, and MYbank, a cloud based online lender the company was in the middle of establishing at the time of the name change.

Now, Alibaba Group Holdings has announced it will strengthen its strategic relationship with Ant Financial by acquiring a 33% equity stake in the company. The parties have agreed to certain amendments to their 2014 transaction agreements to facilitate the transaction.

Under the terms of the amended agreements, Alibaba will acquire newly-issued equity from Ant Financial in exchange for certain intellectual property rights owned by Alibaba exclusively related to Ant Financial.

Alibaba-backed online lender MYbank owes cost-savings to home-made tech (The Star), Rated: A

MYbank, a Chinese online lender that is an offshoot of Alibaba Group Holding Ltd, has built its business on doing things cheaply.

The bank says it can deliver loans to borrowers across China at lightning speeds for up to 1,000 times less than it would cost brick-and-mortar banks to do so.

MYbank employs about 300 people, half of whom are technicians.

As a result, the cost of approving a small business loan can be as little as 2 yuan (RM1.24), compared to at least 2,000 yuan (RM1,239) at a traditional bank, according to data provided by the bank. MYbank has built its technological infrastructure with Chinese-made technology, avoiding more expensive products from companies like IBM Corp, Oracle Corp and Dell EMC, which form the network backbone for much of China’s finance sector, Huang said.

MYbank is one of a handful of Chinese lenders – along with Tencent Holdings Ltd’s WeBank – that are founded completely with private investment. Since mid-2015, MYbank has served more than 7 million small business owners, Huang said. The bank is seeking to expand its network to include China’s 70 million to 100 million small businesses under-served by traditional financial institutions.

The bank’s net interest margin – around 3% to 5% – is higher than those for China’s major banks, which target large state companies, Huang said.

 

European Union

Bitbond Launches Alternative Investment Fund in Partnership with 1741 Fund Management (Finovate), Rated: AAA

Peer-to-peer small business financing platform Bitbond has entered into a partnership with 1741 Fund Management to launch an alternative investment fund.

European Alternative Finance Market Expanded by 41% in 2016, P2P Consumer Lending Leads (Crowdfund Insider), Rated: AAA

The European online alternative finance market grew by 41 per cent to 7.7 billion euros in 2016, according to the 3rd annual European Alternative Finance Industry Benchmarking Report by the Cambridge Centre for Alternative Finance. The report entitled “Expanding Horizons” indicates that online alternative finance showed growth in new areas across Europe.

For country-specific numbers, click here.

Among other findings of the report:

• Institutionalization grew considerably from 2015 to 2016, with 45 per cent of peer-to-peer consumer lending and 29 per cent of peer-to-peer business lending funded by institutions such as banks, pension funds and asset management firms.

• Online alternative finance for business continued to grow, providing 1.14 billion euros to more than 14,000 businesses throughout Europe. Debt models including peer-to-peer business lending accounted for 67 per cent of business finance, while equity models accounted for 27 per cent.

• Estonia ranked first for alternative finance volume per capita for the second year in a row, at 63 euros, followed by Monaco (51 euros) and Georgia (28 euros).

• Countries in which platforms believe that existing regulations are adequate are more likely to show higher levels of alternative finance per capita and a larger share of business funding.

• While overall perceptions of regulatory adequacy are divided, the greatest discontent concerns laws governing equity-based crowdfunding

• Two types of risk are of greatest concern to European alternative finance platforms: a potential collapse of a well-known platform due to malpractice, and fraud involving one or more high-profile transactions.

Bob Diamond to join board of Corrado Passera acquisition vehicle (Financial Times), Rated: A

Bob Diamond plans to join the board of a €600m acquisition vehicle chaired by Corrado Passera, which listed on Thursday, bringing together two of Europe’s best known ex-bankers to buy an Italian lender to small businesses.

After the cash shell’s initial public offering on Thursday, Mr Passera told reporters in Milan that it had shortlisted five small Italian lenders and would complete the acquisition of one of them for up to €60m — allowing it to become a bank.

The plan is to turn the small bank into an online lender to small businesses and a merchant bank, which will buy non-performing loans from other banks and parcel them up before selling them on to institutional investors.

 

Italy’s SPAXS shortlists five banks in acquisition hunt (Reuters), Rated: A

Saddled with one quarter of Europe’s nearly $1 trillion debt pile, which has rattled investor confidence in them, Italian banks have become more selective in their lending and compete to lend to low-risk firms, squeezing profit margins, while many small businesses find it hard to access funds.

Shares in SPAXS, which will use up to 10 percent of the amount raised in the IPO for the acquisition, were 4.04 percent higher at 1038 GMT on their market debut on the alternative investment segment of the Milan bourse.

Google and Facebook set off a second wave of fintech talent (Financial Times), Rated: A

One cloud on the horizon, however, is Brexit. The UK’s departure from the EU could make it harder for Irish fintechs to scale up quickly through expansion into the neighbouring British market, which many of them use as an early testing ground.

A good example of this is Plynk, a payment and messaging app aimed at young people, which was co-founded by Charles Dowd and Clive Foley in 2015, a year after Mr Dowd left Facebook. Based in the Camden Street area, Plynk last year raised €25m from investors led by Swiss Privée.

Another start-up that aims to build a global presence from its Irish base is TransferMate, which has handled more than $10bn of cross-border payments for businesses since it set up in 2010. Last year it raised €30m from Allied Irish Banks, with plans to offer the fintech’s software to all the bank’s clients.

By the end of this year, TransferMate expects to derive as much as half its revenue coming from clients in the US, where it has been approved by all 50 states. A third of its revenue is expected to come from European clients and a fifth from the rest of the world.

The most successful product of Ireland’s fintech scene is actually based in San Francisco. Stripe, which provides payment services to businesses, was founded by Irish brothers Patrick and John Collison, who have become paper billionaires thanks to its rapid growth.

Stripe has its European headquarters in Ireland, where it employs about 10 per cent of its 1,000 global staff. Iain McDougall, the company’s head of UK and Ireland, says the country’s fintech growth is being driven by “a second wave of talent in Ireland, spawned by the massive investment of Google, Apple, Facebook and Amazon in Silicon Docks”. A former Google employee himself, Mr McDougall says: “We’re starting to see some of that talent come through, not just college graduates with a couple of years experience . . . there’s now significant depth to it.”

International

International P2P Lending Volumes January 2018 (P2P-Banking), Rated: AAA

This month I added Linked Finance.

Zopa crossed the milestone of 3 billion GBP originated since launch.

Source: P2P-Banking

Moven To Buy US Bank, Create Joint Venture In Japan With SBI (PYMNTS), Rated: A

According to a report in the American Banker, SBI will receive one seat on Moven’s six-member board and the companies will create a joint venture in Japan.

Of the funding the company will receive from SBI Group, some will go toward the joint venture to sell customized Moven software for Asian banks.

Salesforce boosts nCino global expansion plans (American Banker), Rated: A

NCino, a vendor of cloud-based banking technology, announced a new round of funding led by Salesforce Ventures to help fund its global expansion strategy.

The funding round led by Salesforce Ventures, the corporate investment group of Salesforce, also featured participation from another existing nCino shareholder. The amount of investment was not disclosed.

Several countries investigating Japanese virtual coin heist (e27), Rated: B

Takao Asayama, who is a member of the Singapore-based NEM Foundation that is behind the cryptocurrency, told reporters in Tokyo that it is working with exchanges to block the hackers from cashing out the stolen cryptocurrency. He did not name the countries involved in investigations.

India

Jaitley extends avenue for SME financing, bad loans in the sector now on radar (Economic Times), Rated: AAA

As bank credit to micro, small and medium enterprises shrink, the government has decided to get innovative by getting Non-Bank Finance Companies (NBFCs) and the burgeoning fintech industry to play a larger role in financing. However, NPAs in the MSME sector would also now undergo greater scrutiny.

“Non-Bank Finance Companies (NBFCs) stepped up financing of MSMEs after demonetization. NBFCs can be a very powerful vehicle for delivering loans under MUDRA. Refinancing policy and eligibility criteria set by MUDRA will be reviewed for better refinancing of NBFCs,” said Finance Minister Arun Jaitley while presenting the Union Budget for 2018-19.

If we look at the NBFC segment first, it specialises in catering to sector specific financial needs covering retail; consumer and vehicle loans; micro, small and medium enterprises (MSMEs) and micro finance among others.

Source: Economic Times

Tech play
Jaitly also laid out a roadmap to use data generated by the Goods and Services Tax (GST) to enhance credit availability to the SME sector.

“It is proposed to onboard public sector banks and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link this with GSTN. Online loan sanctioning facility for MSMEs will be revamped for prompt decision making by the banks. Government will soon announce measures for effectively addressing non-performing assets and stressed accounts of MSMEs. This will enable larger financing of MSMEs and also considerably ease cash flow challenges faced by them,” said Jaitley.

Source: Economic Times

At end-March 2017, there were 11,522 NBFCs registered with the Reserve Bank, a number that is only bound to increase with fintech sectors like P2P being clubbed in the segment. The Economic Survey has revealed that the amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was cornered by large enterprises.

For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.

Indian Budget 2018: A Push for Blockchin and Cyber Tech (Bank Info Security), Rated: A

In a move to push adoption and development of new technologies, such as machine learning, artificial intelligence and the internet of things, the finance minister announced allocation of Rs 3,073 crore for the Department of Science and Technology.

Meanwhile, the finance minister’ pledge to encourage use of blockchain, the distributed ledger technology that supports cryptocurrencies, in payment systems has earned him accolades from some security practitioners.

“Blockchain can be effectively used to process banking transactions. I see blockchain-enabled wallets and blockchain-enabled cards as next big thing in the payment systems,” Jyoti says. “Blockchain can provide an extra layer of cybersecurity to the payment systems, which could have led to this decision.”

Why Blockchain?

Blockchain has been popular among the banking industry in India. In fact, banks in India have formed a “bank chain,” an association of more than 20 banks where they discuss some typical use cases of blockchain.

Sapan Gupta, national practice head – banking and finance, at the law firm Shardul Amarchand Mangaldas, notes: “Capitalizing on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors. Segregating the use of blockchain from crypto-currencies reflects the government’s intention to use the technology in a gradual and safe manner.”

What do Ola, ShopClues, Practo, and Paytm feel about the budget? (Yourstory), Rated: A

Rajat Gandhi, Founder & CEO, Faircent.com 

“The finance minister’s budget speech reflects the government’s intent to increase the credit access for the MSME sector and women entrepreneurs under MUDRA scheme. P2P lending is using technology and new-age data, and diligently working towards taking organised credit to the non and under-banked segments of the Indian economy. This is an opportunity for the government to directly invest or co-fund through registered P2P Lending Platforms and ensure credit access for MSMEs, New-To-Credit as well as female entrepreneurs. P2P lending is an asset class ensuring flow of investments from those with surplus to those in need. Hence it’s important that the lenders are supported through tax incentives. We look forward to working with the government towards the common goal of financial inclusion.

 

Bipin Preet Singh, Co-founder, MobiKwik 

“A reformist budget for startups and digital India. The government’s impetus on digitising the rural hinterlands, focus on smart cities, and commitment to blockchain technology will encourage the promotion of digital payments across the country, thereby making India truly digital. Further, disallowing cash payments beyond Rs 10,000 by trusts and institutions will boost digital payments. I commend the government’s decision to reduce corporate tax to 25 percent and improve the ease of doing business by providing a unique ID for every company on lines of Aadhaar. These initiatives will benefit startups and MSMEs immensely and lay a strong foundation for a progressive India. However, the government should consider regulating cryptocurrencies than curbing their use entirely.”

Budget 2018: 10% Long Term Capital Gain tax to benefit P2P lending players (moneycontrol), Rated: B

Imposing 10% long-term capital gain tax on equity investments may create some level playing field for the P2P lending industry. So far, the favourable tax treatment on long-term gains on equity investments made them a preferred choice for the investors. Now, those who are ready to take higher risk for earning better returns may also think of investing in P2P lending projects which have a better risk profile as compared to equity-oriented investments.

Asia

Ulema council, OJK to issue fatwa on sharia-based fintech lenders (The Jakarta Post), Rated: AAA

The Indonesia Ulema Council’s (MUI) sharia division and the Financial Services Authority (OJK) are preparing a fatwa to serve as a legal basis for the operation of sharia-based financial technology (fintech) lending institutions.

“Many non-Muslims are also interested in sharia-based fintech financing. So it has a very large potential market,” Adiwarman said as reported by kontan.co.id.

Since a trial run in November 2017, Investree has disbursed Rp 2.7 billion (US$189,000) in sharia-based financing.

Africa

Five ways to finance your dream (Standard Digital), Rated: AAA

It found that in 2015, Kenya and South Africa raised $16.7 million (Sh1.7 billion) and $15 million (Sh1.5 billion), respectively, in financing from various online channels. However, unlike in South Africa, most of the money raised using these alternative financing platforms in Kenya came from foreigners.

Overall, a total of $62.2 million (Sh6.4 billion) was raised across Africa, with more than 75 per cent of this money going towards funding start-ups and SMEs.

  1. Equity-based crowdfunding
  2. Peer-to-peer business lending
  3. Debt-based securities
  4. Donation-based crowdfunding
  5. Reward-based crowdfunding

Authors:

George Popescu
Allen Taylor

Friday January 12 2018, Daily News Digest

bitcoin debt

News Comments Today’s main news: More LendingClub-IEG drama.Black Fish raises $145M.Moneygram partners with Ripple.Kreditech expands into India with Mambu. Today’s main analysis: JP Morgan Chase’s investments into digital technology.Is Yirendai undervalued? Today’s thought-provoking articles: Investors go into debt to buy bitcoin.Small business financing trends.How open banking could change how people manage money.Banks, trade finance, and […]

bitcoin debt

News Comments

United States

United Kingdom

China

European Union

International

India

APAC

Africa

News Summary

United States

Lending Club has a bitcoin pivoting suitor (Financial Times), Rated: AAA

Lending Club has all kinds of problems: a history of profit warnings, faint traces of scandal after a management upheaval almost two years ago, and a share price still more than 80 per cent adrift from its peak.

Add to that list: a bizarre, crypto-fuelled activist campaign waged by a Las Vegas-based payday lender called Paul Mathieson, who told authorities in his native Australia that he fled to America in 2008 because he feared being killed by a mobster.

Mathieson’s case for change at Lending Club, laid out in a letter to the company’s board on 2 January, is not a terrible one, on the face of it. He argues that the cost structure at the loss-making company, a pioneer in peer-to-peer lending, is “excessive,” noting fancy headquarters in San Francisco and “hundreds” of “excess” developers. He says that the board should consider a pivot to using its own balance sheet to lend, rather than acting as a broker, taking fees for matching borrowers with lenders. Underwriting has been sloppy, he says, resulting in sub-par returns to investors.

Mathieson is offering 13 shares in his own penny-stock company, IEG Holdings, for every share in Lending Club. At the time of the offer on Monday morning, that was a premium of 19 cents, or about 5 per cent.

Source: Financial Times

SeeThruEquity Issues Update on IEG Holdings Corporation (Bay Street), Rated: A

IEG Holdings Corporation (OTCQB: IEGH) provides online unsecured consumer loans under the brand name “Mr. Amazing Loans” via its website, www.mramazingloans.com, in 20 US states. The company offers $5,000 and $10,000 personal loans over a five-year term at rates ranging from 19.9% to 29.9% APR. IEG Holdings plans future expansion to a total of 25 US states, which would cover 240mn people and represent approximately 75% of the US population.

Since 2013, IEGH has obtained additional state lending licenses, and they are licensed and originating direct consumer loans in 20 states including: Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. The Company was founded in 2010 and is headquartered in Las Vegas, Nevada.

IEG Holdings Plans to Create its own IEGH Crypto/Blockchain Currency Backed by Gold Metal and SEC Registration as a Security

IEGH announced that its wholly owned subsidiary, Investment Evolution Crypto, LLC (“Crypto”), is negotiating to purchase a gold project with gold metal in the ground and prospecting licenses. IEG Holdings plans to utilize a gold resource to investigate creating, through Crypto, and a joint venture with Investment Evolution Corporation, also a wholly owned subsidiary of IEG Holdings, its own gold metal-backed crypto/blockchain currency, and potentially offer loans and accept loan repayments in its own crypto/blockchain currency.

IEGH increases loan originations

The company stated that it provided $960,000 in new consumer loans through its online property mramazingloans.com, from the October 2017 to December 2017 period. This represented a 12.3% increase over its July to September 2017 operating period, during which the company’s new loan originations were $855,000.

Desperate to get into bitcoin, investors slip into debt (CNBC), Rated: AAA

Roughly 18 percent of people who buy bitcoin use a credit card to do so, according to a new survey by loan marketplace LendEDU. Of those, 20 percent have not paid off their balance. The phrase “buy bitcoin with credit” has been trending on Google for weeks.

Another problem with going into debt for cryptocurrencies is that people will have to pay back their debt before they see sufficient returns, said Erika Safran, founder of Safran Wealth Advisors. That may require tapping other resources, potentially creating further financial trouble.

Credit card debt from CNBC.

Small Business Financing Trends To Stay Abreast Of (CXO Today), Rated: AAA

  • Traditional bank loan rejections are notoriously high in all markets
  • Small Business Administration (and equivalent agencies) are nefarious for overextending the time-to-credit tolerances of small businesses
  • Volatility of markets, and exposure of almost all markets to disruption by startups could pose urgent cash needs for businesses, which are generally not considered for loan applications by traditional lenders.

Online Lending And Its Deepening Hold Over The Small Business Finance Market

In 2014, a Federal Reserve (US) survey concluded that one in five small business owners opted for loans from online lenders. Since then, the proliferation of online lending platforms has been on the surge, to the extent that traditional brick and mortar lending institutions have also had to move base to the online domain. In the coming years, multiple factors will result in the success and sustainability of online lending platforms. These include:

  • Growing confidence among small business owners to trust online lending platforms
  • Availability of cheaper, quicker, and more convenient loans
  • Options to truly personalize and customize the loan repayment terms to suit the business’ interests

The Call for Transparency in the Online Lending Market

Though the online lending market has been growing year on year, this doesn’t detract from the concerns around lack of transparency in the way some of these platforms operate. Some of the key concerns are around undisclosed APRs and hidden fees. In fact, some online lenders have been castigated for charging significantly high rates of interests from borrowers, often with service quality issues post-approval. Thankfully, there’s already some progress towards bringing a degree of regulation in place for online lending platforms to be at par with traditional lending regulations.

JPMorgan Chase Competitive Strategy Teardown: How The Bank Stacks Up On Fintech & Innovation (CB Insights), Rated: AAA

JPMorgan is making a bigger push into payments technology as digital banking becomes a strategic priority.

In 2016, the bank spent $9.5B on technology and Dimon has committed $300M alone to improve JPMorgan’s technology for its asset management products. Relative to its peer group, JPM claims the highest number of mobile banking customers and its Chase Mobile app currently sports a 4.7 (out of 5) rating in the App Store.

Earnings call analysis – Barclays, Bank of America, Morgan Stanley talking up digitization

  • JPM discussed continued digital consumer banking growth, which grew 6% in Q3’17.
  • Bank of America spent portions of its Q1’17 and Q3’17 talking about digital banking initiatives and technology investment. Specifically, CEO Brian Moynihan mentioned the bank spent $2.25B on technology initiatives in the first three quarters of 2017. The bank also now sees mobile devices account for 1 of every 5 deposit transactions.
  • On Morgan Stanley’s Q3’17 earnings call, Morgan Stanley CFO Jonathan Pruzan mentioned the bank is beta testing new customer-facing digital products it plans to launch, potentially in the robo-advisory space. Specifically, Pruzan noted: “When we think about our wealth business, it’s a business that’s built on scale. And it’s built on the fact that people with wealth want personal advice. So it’s going to be both a mix of technology and digital with the personal element of the advice channel. And we think that’s the winning formula going forward.”

Based on the data, JPMorgan ranks ahead of most bulge bracket banks when it comes to overall fintech investment since 2013, but behind its peers Goldman Sachs and Citi.

Online Marketplace Lender Nav Facilitated More Than 20,000 Small Business credit Approvals in 2017 (Crowdfund Insider), Rated: A

Nav, a small business marketplace lending platform, announced this week it has facilitated more than 20,000 small business credit approvals in 2017.

The company currently has more than 327,000 entrepreneurs now using its platform to manage their data and access capital.

Bono’s Fund Makes Its First Fintech Investment, Backing Acorns (Bloomberg), Rated: A

The Rise Fund, a private investment firm co-founded by the U2 lead singer, is making its first known bet on a fintech business by backing Acorns Grow Inc., said people familiar with the matter, who asked not to be identified because the details are private.

Georgia Company Acquires S.D. Fintech Startup LoanHero (San Diego Business Journal), Rated: A

LoanHero, one of San Diego’s few financial technology startups, has been acquired by Georgia-based company LendingPoint.

Terms of the deal, announced Jan. 11, were not disclosed.

Small-dollar lender Oportun to open 20 offices in Florida (American Banker), Rated: A

Oportun, a community development financial institution that provides small loans to individuals with little or no credit history, is planning to open 20 lending offices in Florida.

The Redwood City, Calif.-based lender said this week that it has already opened four offices in Miami and Hialeah and that it expects to add 16 more in the Sunshine State, primarily in South Florida, by the end of the year.

6 Key Trends in Fintech to Watch in 2018 (Lend Academy), Rated: A

  1. Convergence of Software and Financial Products  One of the important lessons that Square taught the market is that bundles of software solutions (loyalty, POS, analytics, scheduling and many others) and lending are essential drivers in advancing growth of payment processing.
  2. InsureTech
  3. The Power of the Machines  Companies like LendingClub are using machines to discover new relationships and patterns to introduce more tailored financial offers to their customers.
  4. Emerging Economies  Many growing companies in Africa, Asia, and Latin America are developing and adopting financial solutions, often faster and with more innovation than in developed economies.
  5. Wealth Management
  6. Rise of Crypto and Blockchain

Google Pay brings payment tools under a single brand (Tearsheet), Rated: A

The Internet giant is finally putting its many payments capabilities — Google Wallet, Android Pay and Pay with Google — under a single name, Google Pay, after lagging for years behind Apple Pay and Samsung Pay.

Ladder Secures $ 30M Series B Led by RRE Ventures (coverager), Rated: A

CA-based life insurance MGA Ladder announced it has raised $30M in a Series B round led by RRE Ventures, with participation from Thomvest Ventures, as well as Ladder’s existing investors: Canaan Partners, Lightspeed Venture Partners and Nyca Partners . Ladder launched its fully-digital life insurance solution in California on January 10, 2017, and has since expanded to nearly every state across the country.

Fifth Third regains top CRA grade, an entree to M&A (American Banker), Rated: A

Fifth Third Bancorp has received top marks from the Federal Reserve on its most recent Community Reinvestment Act examination as expected.

Fifth Third announced the results on Wednesday, saying in a press release that the Fed gave it an “outstanding” rating on its most recent exam. The Cincinnati company had said in a regulatory filing last month that it expected to ace the test, which covered the period between Jan. 1, 2014, and June 30, 2016.

A Beginner’s Guide to Applying for College Loans (Student Loan Hero), Rated: A

Student loan debt statistics show that more than 70 percent of students graduating from four-year colleges have debt, so you aren’t alone if you need to borrow to cover educational costs.

Step 1: Understand your options

  • Federal loans for students
  • Federal loans for parents
  • Private loans for students
  • Private loans for parents
Source: Federal Student Aid

Step 7: Determine if you’ll need to apply for private loans

  • Family contributions if parents or other family members are willing and able to pay
  • Savings
  • Scholarships or grants from community groups or other sources
  • Parent PLUS Loans
  • Private student loans

Step 8: Learn how to apply for private student loans

Because there are many private student loan lenders, it’s a good idea to shop around. You should consider:

  • Loan eligibility requirements: What do you need to qualify?
  • Loan terms: How long do you have to repay the loan?
  • Repayment terms: When do you need to start repaying, and is there a prepayment penalty?
  • Fees: Is there a cost to apply for the loan or a loan origination fee?
  • Interest rates: Is the rate fixed or variable? How much will you pay to borrow?

You can visit our private student loan marketplace to find private student loan lenders offering loans to parents and students.

Here are the top 6 lenders of 2018!

LENDER RATES (APR) ELIGIBLE DEGREES
CHECK OUT THE TESTIMONIALS AND OUR IN-DEPTH REVIEWS!
2.58% – 7.25% Undergrad
& Graduate
VISIT SOFI
2.57% – 6.39% Undergrad
& Graduate
VISIT EARNEST
2.76% – 7.25% Undergrad
& Graduate
VISIT COMMONBOND
2.99% – 5.15% Undergrad
& Graduate
VISIT LAUREL ROAD
2.74% – 7.26% Undergrad
& Graduate
VISIT LENDKEY
3.11% – 8.46% Undergrad
& Graduate

 

 

Roostify adds tech veteran Adnan Habib as vice president of engineering (Housingwire), Rated: B

Roostify announced Thursday that it hired Adnan Habib as the company’s new vice president of engineering.

In this role, Habib will lead Roostify’s growing product delivery team and will be responsible for making improvements to the Roostify’s digital lending platform.

Roofstock Appoints Suresh Srinivasan as Chief Marketing Officer (BusinessWire), Rated: B

Roofstock (www.roofstock.com), the leading online marketplace for buying and selling leased single-family rental homes, today announced the strategic hire of Suresh Srinivasan as chief marketing officer. Srinivasan has 20 years’ experience leading marketing, product, and e-commerce functions at Fortune 500 and high-growth tech startups. Most recently serving as the SVP of Marketing for Xome, Srinivasan brings a deep understanding of the fast-growing real estate technology sector to Roofstock where he will be responsible for accelerating growth of Roofstock’s marketplace for single-family rental homes and developing the company’s partnership network.

United Kingdom

An invisible banking reform that ‘could fundamentally change how we manage our money’ is days away (Business Insider), Rated: AAA

Regulators in Europe and the UK are ordering banks and credit card companies to share customer data with other companies if their customers agree. The companies will also be able to carry out payments on a customers’ behalf.

Open Banking forces lenders to offer a digital “fire hose” of data that any third party can use to get standardised access — provided the startup is registered with the UK Financial Conduct Authority (FCA) and the customer agrees to share their data. They won’t have to negotiate deals with banks, just plug into their digital systems and go.

The aim of Opening Banking is to give customers greater control over their data and to encourage account switching.

An investigation by the UK Competition and Markets Authority in 2015 found just 3% of customers switched their banks in the last year, meaning many were left with accounts that were not right for them.

 

ThinCats Says 2018 is Poised for Growth in SME Lending (Crowdfund Insider), Rated: A

ThinCats says 2018 is poised for growth. The online lender reports that December was a record month booking £12 million of funding listed on the platform followed the biggest-ever ThinCats-listed loan of £6.7 million to the Chelsea Yacht & Boat Company at the end of September.

Loan Store Reveals to Reduce Interest Rates on Instant Cash Loans for the UK People (MENAFN), Rated: A

Loan Store is the responsible lending hub that reveals to reduce the interest rates on instant cash loans for the UK people.

Hennery Dicosta, a senior adviser of Loan Store, has offered the complete details about this announcement. This is what he said- In a recent scenario, people usually try to borrow a small loan amount. That is why we have decided to provide the loans for bad credit people with no guarantor and no fees on an instant decision to resolve their short term emergencies. We never charge any processing fee and we are now providing these loans on quite low rates of interest. Besides, we do not judge the creditworthiness of the borrowers with their credit rating and give an instant decision on their loan request.

Crowdstacker joins the Peer-to-Peer Finance Association (P2P Finance News), Rated: B

CROWDSTACKER has joined the Peer-to-Peer Finance Association (P2PFA), becoming the self-regulated trade body’s eighth member.

The business lending P2P platform will be represented by chief executive Karteek Patel.

China

3 Growth Stocks at Deep-Value Prices (The Motley Fool), Rated: AAA

With that in mind, we asked three Motley Fool investors to each profile a company that has a low valuation now compared to its earnings-growth potential. They identified Yirendai (NYSE:YRD)Criteo S.A.(NASDAQ:CRTO), and Changyou.com (NASDAQ:CYOU) as strong contenders trading at attractive discounts.

China’s first P2P online lending platform

The Chinese P2P lending market blossomed in the late 2000s, catering to  customers who were underserved by traditional banks, and is worth about $60 billion today.

Analysts expect Yirendai’s revenue and earnings to rise 74% and 14% respectively this year, followed by 43% revenue growth and 41% earnings growth next year. Yet the stock trades at just 14 times earnings, compared to an industry average of 26 for credit service providers. Based on those numbers, Yirendai looks likely an undervalued growth stock.

But there are some obvious reasons why investors are discounting it.

First, Yirendai is a subprime lender. Just 1.7% of its loans were rated as prime “Grade A” last quarter. Another 8.7% were Grade B, and 14.1% were Grade C — but 75.5% were rated Grade D. Yirendai collects higher fees from lower rated borrowers, but its business could collapse if its delinquency rates rise.

The company only discloses delinquency rates for loans past due by 15 to 89 days, and that rate came in at a low 1.8% last quarter. But it doesn’t report any data on loans delinquent for over 90 days.

Chinese finance platform Black Fish raises $ 145m from Gobi, Lightspeed, others (Deal Street Asia), Rated: AAA

Black Fish, a consumer finance platform based in China’s Nanjing region, has received $145 million in a series A round from a cluster of firms  including Lightspeed China Partners and Shanghai and Kuala Lumpur based Gobi Partners.

Others who participated in the round include Morningside Venture Capital, JAFCO Asia, Fullcent Capital and Zhang Tao, founder of Dianping.com.

At this point, the average annual growth rate of consumer finance is 16.4 percent.

China’s Renren Is Poised To Unlock Value From Its Investment Portfolio And Grow With Blockchain (Seeking Alpha), Rated: A

Renren holds a significant investment portfolio that is easily worth $12 per share.  This value will likely be realized in the near term due to multiple catalysts.

The company has started to get involved with blockchain-related businesses, which potentially turns them into a “blockchain play”.

This situation leads to an asymmetrical payoff structure in which there is very little downside and significant upside. My target price is $18.

Renren was an early VC investor in Sofi, taking part in its seed round of financing as well as a later follow-on round. They currently hold a 13% stake in SoFi, having sold 14.1% of their holdings (representing 2% of SoFi) in April 2017 for $92 million.

Source: Seeking Alpha

Dianrong Signs Strategic Agreement with Dalian Finance Development Bureau & Dalian Finance Industry Investment Group (PR Newswire), Rated: A

Dianrong and the Dalian Finance Development Bureau and Dalian Finance Industry Investment Group (DFIIG) recently signed a strategic cooperation agreement to drive financial innovation in Dalian and across China. According to the agreement, Dianrong will develop a series of specific projects in partnership with the Dalian government, including:

  • Assist the Dalian Finance Development Bureau in creating a financial technology (fintech) cloud platform to provide fintech capabilities for small loan and guarantee companies, and other small and medium-sized financial institutions in the region and at large. Tools and services will include sophisticated fraud detection, big-data risk management tools, payment channel integration, and compliance reporting. The fintech cloud platform will also provide regulators with easier monitoring of local lending activities and trends in an ongoing and comprehensive way, helping them provide timely policy guidance and support on risk management.
  • Work with DFIIG to establish a special Internet finance investment fund for Dalian. The fund will focus on investment in fintech projects and startups with the potential to strengthen Dalian’s new economy and financial services industry.
  • Develop a supply-chain trading platform in Dalian utilizing advanced fintech and blockchain capabilities to help more small and medium-sized suppliers secure needed funding. Last year, Dianrong created the first blockchain platform for supply-chain finance with FoxConn Group, a global leader in consumer electronics.

Shanghai tightens financial sector supervision (Ecns), Rated: B

Shanghai is one of China’s largest financial markets by market trading volume. In 2017, its trading volume was 1,438 trillion yuan ($220.9 trillion).

Shanghai has already launched a campaign against fraud and illegal behavior in financial consumer markets, such as internet-based peer-to-peer lending, cash loans to college students, and pay-day loans.

European Union

Rocket Internet CEO says ready to pounce with cash pile (Business Insider), Rated: AAA

Germany’s Rocket Internet needs to hold on to its mountain of cash so it can compete with rivals from the United States and China and pounce when investment opportunities arise, the chief executive said in an interview.

CAUTIOUS MARKET

Rocket is invested in more than 100 start-ups, including in financial and property tech, logistics and travel sites, with its stakes in the five biggest of them potentially worth more than 1 billion euros to Rocket, according to Berenberg bank.

International

MoneyGram Signs Deal to Work With Currency Startup Ripple (WSJ), Rated: AAA

MoneyGram International Inc. MGI +2.63% signed on to run a pilot program testing XRP, a digital currency created by San Francisco startup Ripple, in its payments network, the companies said Thursday.

The Dallas-based company agreed to test XRP as a tool for reducing money-transfer costs and settlement times.

How Banks Can Use Trade Finance Services and Data to Increase Share of Wallet (Traxpay), Rated: AAA

While global trade presents tremendous growth opportunities, businesses of all sizes are none-the-less finding it difficult to access much needed credit, resulting in a global trade finance gap. According to an Asian Development Bank’s (ADB) 2017 Trade Finance Gaps, Growth, And Jobs Survey, that gap was $1.5 trillion in 2016.

Non-financial institution competitors are aggressively targeting this market, using innovations such as blockchain to develop products and tools that not only replace outdated paper and manual-based processes, but also deliver unprecedented levels of cybersecurity that are critical in today’s digital transaction space. The same ADB survey revealed more than $13 billion in venture capital was invested in FinTech trade finance in 2016 alone.

The recent Simmons & Simmons Hyperfinance studyof the world’s leading trade banks found that only 7% believe they are at the forefront of digital innovation in spite of the fact that 80% of innovation leaders report digitally-driven products and services introduced over the past three years have expanded revenue growth. This illustrates the reality that financial institutions recognize the importance of developing a digital strategy, but few are moving aggressively enough to take advantage of these new technologies.

PRINCIPLES, ESG, AND CREDIT RISK (All About Alpha), Rated: AAA

The question before the house right now, though, is: what about the credit rating agencies? The question comes in three parts: there are the global CRAs; the smaller/regional CRAs in most of the world, and regional CRAs in the special case of China.

First, the global CRAs [there are just two of them, Moody’s and S&P] are making “strong efforts” to incorporate an understanding of ESG issues. They are hiring staff with ESG backgrounds, equipping their existing analysts with the relevant expertise, and drawing on third party providers.

Then there is China. Its CRAs include Dagong Global, China Chengxin, and Golden Credit Ratings. The idea of integrating ESG into their analyses is thus far limited to the issue of green bonds, that is, bonds issued for the development of brownfield sites. Government policy in China encourages green bonds and the CRAs have responded. The resulting assessments are focused on the “E,” not so much the “S” or the “G.” And their environmental assessments rely on measuring the impact of the project the bond aims to finance.

  • Research very generally supports the hypothesis that there exists a causal link between ESG factors and the credit worthiness of a borrower;
  • Academic research in limited in that it is too exclusively content to measure credit risk by credit ratings, rather than testing the ratings themselves against alternative measures;
  • But some research does employ the spread of credit default swaps as an independent measure of risk;
  • Anecdotal observation indicates a clear link between G and defaults, although the linkage between E and S and defaults is more difficult to pin down;
  • There is much evidence in the linkage of ESG to macroeconomic factors and potential growth, which in turn are important to sovereign risk in particular.

ABS braces for more auto deals after strong start to year (IFR), Rated: A

The asset-backed bond market is braced for a slew of new issues next week, with deal flow expected to be dominated by auto issuers including BMW and Mercedes.

Just two issuers sold deals this week – GM Financial and Consumer Portfolio Services – and both auto trades were met with strong demand from investors. One banker on the GM deal said the deal was over-subscribed across the capital stack.

The biggest tightening though was seen on the smallest and lower rated tranches. The 3.58-year Class B, rated Aa3/AA by Moody’s and Fitch, priced at 30bp over interpolated swaps versus guidance of 35-40bp and whispers of 45bp area.

The 3.58-year Class C, rated A1/A, priced at 50bp over interpolated swaps versus guidance of 55-60bp and whispers of 65bp area.

FROM BANKING TO BITCOIN, FINTECH IS POISED TO CHANGE THE WORLD (Tech Genix), Rated: A

Currently, it represents only 1 percent of the global financial industry. By comparison, digital media accounts for 40 percent while eCommerce accounts for around 10 percent.

Source: Tech Genix

To give you a perspective, venture capitalists invested more than $13 billion across 840 different fintech holdings in 2016, according to a report by KPMG. This is 7 percent more than they invested in 2015.

According to the McKinsey report, five areas will see high growth over the next decade. They are consumer finance, mortgage, lending, retail payment, and wealth management.

Online payments

PayPal handled $1.73 billion worth of transactions in the first quarter of 2017 alone, representing a 30 percent increase year-on-year.

Borrowing and lending

However, the delinquency rates have been increasingover the last few years. These rates have increased from 0.56 percent in January 2015 to 0.75 percent in December of the same year.

Overstock.com’s 2017 Highlights: Innovation, Expansion, and Recognition (Business Insider), Rated: A

Overstock’s blockchain-focused subsidiary, Medici Ventures, named its board of directors in 2017, and also saw a number of its portfolio companies continue to use blockchain to revolutionize industries including capital markets, money and banking, property registry, voting, identity, and underlying blockchain technology, including:

  • tZERO, the world’s first SEC approved, blockchain-based alternative trading system, launched its initial coin offering (ICO), which attracted over 10,000 subscribers and raised $100M in commitments in the first 12 hours of its pre-sale. A significant portion of the tZERO security tokens issued will be available to accredited investors in the public sale beginning in January, 2018.
  • DeSoto Inc., a joint venture between Overstock.com founder and CEO Patrick Byrne and world-renowned economist Hernando de Soto, was created to develop a global property registry system to surface the property rights of billions of people in the developing world.
  • Bitt, a Barbados-based financial technology company using blockchain to create central banking tools and mobile money applications, named Rawdon Adams, son of former Barbadian Prime Minister Tom Adams, as its CEO. Bitt also fully launched its new mMoney digital payment product, bringing to market a blockchain-based mobile wallet that allows users to participate in digital transactions on their smartphones without the need for a traditional bank account, helping to foster financial inclusion in the region.
  • South-American based Ripio (formally known as BitPagos), participated in an ICO that raised $37M to fund its Ethereum-based peer-to-peer lending platform, Ripio Credit Network.
  • Belgium-based SettleMint launched a token sale for its DataBroker DAO, a peer-to-peer marketplace created to provide Internet of Things (IoT) sensor-owners with a clear path to data monetization, and data consumers with a decentralized marketplace in order to buy IoT sensor data. SettleMint also signed an agreement with The Islamic Research and Training Institute, the research arm of the Islamic Development Bank Group, to work with local partner Ateon on developing blockchain-based financial products that can be used to support development and inclusion in IsDB member countries.

Global lender selects Aussie fintech, Trade Ledger, as worldwide technology partner (PR Newswire), Rated: A

Zürich-based lender, TradePlus24, has selected Australian deep tech startup, Trade Ledger, as its global technology partner to roll out its new trade insurance wrapped lending product across their European lending network, and enter the Australian market.

Bankers fear they will get Amazon-ed in tech disruption (Financial Times), Rated: A

According to IDC, only about a quarter of US bank technology budgets is spent on digital transformation, as opposed to business as usual. They expect this to grow to nearer 40 per cent in 2020.

Secondly, this spending could substantially boost banks’ productivity, and profits.

Banks will drive up the cost of customer acquisition for start-ups who will increasingly struggle unless they build network effects and scale very quickly. Roboadvisers and peer-to-peer lenders will be on heightened alert. Some start-ups will need to rethink their plans to disrupt and look to form partnerships instead.

Changes in financial regulation, such as a lighter touch fintech charter being examined in the US or the second payment services directive in Europe, could potentially make this more likely. The tech giants have the brands, customer reach, digital processes and flair to develop good products, and to take swift advantage of any regulatory changes.

Karma token trading opens after successful million ICO campaign (Crypto Ninjas), Rated: B

India

German Online Lender Kreditech Heads to India (Bank Innovation), Rated: AAA

German online lender Kreditech is making its way to India, Bank Innovation has learned.

For this expedition, the fintech has teamed up with SaaS banking platform Mambu for providing short-term lending products specifically tailored to local consumers.

Kreditech selects Mambu’s SaaS banking engine for its passage to India (Finextra), Rated: A

Kreditech currently operates in Europe and Latin America and will expand into India in early 2018, together with its partner PayU, a global online payments provider and Mambu client in Latin America.

The loan product is expected to go live in the first quarter of 2018, all data will be hosted by AWS India.

NiYO Solutions Raises $ 13.2M in Series A Funding (FINSSMES), Rated: A

NiYO Solutions Inc., a Bangalore, India-based fintech startup for salaried employees, raised $13.2m (85 crore) in Series A funding.

APAC

Myanmar takes small steps towards providing greater liquidity for SMEs (Myanmar Times), Rated: AAA

A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

Currently, local banks extend loans at interest rates ranging between 8.5 percent and 13pc. The local banks began offering SME loans at8.5pc interest in 2015. Since then, the Japan International Cooperation Agency (JICA) and KfW Development Bank from Germany have also launched SME loans.

P2P lending

To get around the financial constraints, borrowing from family members and peers is common.

In fact, a rising number of businesses have resorted to P2P lending for funds to build up their businesses. Without any guarantees of success though, many entrepreneurs ultimately end up in debt. Others fall prey to fraud. Last year, The Myanmar Times reported at least three cases of fraud involving fake promises of repayments with up to 30pc interest.

Cloud Lending Solutions Recognized as a Top 25 FinTech Company of 2017 (BusinessWire), Rated: B

Cloud Lending Solutions was recognized as a “Top 25 FinTech Company for 2017” by APAC CIO Outlook Magazine. A panel of industrial experts and executives collaborated with the editorial board to curate the list with an aim to provide clarity into the ideal FinTech partners.

Africa

Local digital currency eyes real estate disruption (ITWeb), Rated: AAA

Cape Town-based fintech company, Wealth Migrate, has launched a global   – WEALTHE Coin.

According to Wealth Migrate, while almost half of the world’s wealth is held in real estate, fewer than 13% of people have access or the resources to invest in and  from this lucrative market.

Authors:

George Popescu
Allen Taylor

Wednesday October 11 2017, Daily News Digest

alternative lending and payday lenders

News Comments Today’s main news: College Ave completes $161M securitization of private student loans.Marlette Funding prepares new deal.SoFi’s latest student loan securitization sees strong demand.Zopa closing in on completing the opening of new bank.Mintos exceeds 35K investors.JD Finance launches bank deposit product with yield rate up to 5%.SocietyOne hits $350M in total loan originations.Crisil withdraws […]

alternative lending and payday lenders

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Africa

News Summary

United States

College Ave Secures Securitization at $ 161 million in Private Student Loans (The Student Loan Report), Rated: AAA

Only three years after its inception, a major student loan marketplace lender, College Ave Student Loans, announced the completion of its first securitization of private student loans. The $161 million transaction got an ”A” rating from DBRS and a ”BBB” rating from S&P according to College Ave. The sole underwriter of the deal completed earlier in the summer was Barclays.

Marlette Funding preps deal as industry heads for “critical quarter” (Global Capital), Rated: AAA

Online lender Marlette Funding is marketing a securitization this week, as the wider marketplace lending industry gears up for an important fourth quarter.

Goldman Sachs, Deutsche Bank and Citi are joint lead managers on the $312m deal, according to a source briefed on the matter. The deal is backed by unsecured consumer loans, which the company originates through Cross River Bank (CRB), and then repurchases before selling to third party loan ….

SoFi’s latest student loan securitization met with strong demand (American Banker), Rated: AAA

Credit rating agencies aren’t overly concerned about recent management changes at Social Finance, and it appears that investors feel the same way. The company’s latest student loan securitization attracted strong interest, and priced at levels similar to or better to its previous transaction, completed in July.

Why the Next Phase for Fintech Is Collaboration, Not Just Competition (Wharton), Rated: AAA

Fintech is growing up: Financial institutions are increasingly viewing these disruptors as partners while startups are learning that they need the scale and regulatory expertise of the incumbents. Both sides have a lot to learn, and benefit, from each other, according to speakers at the recent “Fintech: The Impact on Consumers, Banking, and Regulatory Policy” conference at the Federal Reserve Bank of Philadelphia.

“We are actively seeking startups for our members to partner with,” said Robert Nichols, president of the nearly 6,000-member American Banking Association (ABA).

Capital One has integrated its services with Amazon’s Alexa digital assistant and its video-enabled device, Echo Show. Consumers can ask Alexa for their account balance, request that it track their spending or even make a payment. Bank of America is set to debut its chatbot Erica on the bank’s mobile app to help customers with personal finance decisions. Also, more than 30 banks are using Zelle, a service that lets people send money to each other in minutes. It started in 2011 as a collaboration among Bank of America, Wells Fargo and JPMorgan Chase.

The Federal Reserve Bank of San Francisco launched a fintech portal in May to help companies navigate the regulatory system and show them where to go for further assistance, said Tracy Basinger, its director of financial institution supervision and credit.

One example of alternative data used by online lender the LendingClub is the internet footprint of a customer. It doesn’t use social media information due to privacy concerns. Rather, the company uses things like a geocode IP address for fraud detection.

Overstock’s Regulated Token Exchange Will Launch with Own ICO (Coindesk), Rated: A

Retail giant Overstock.com is to launch its new regulated token exchange with its own initial coin offering (ICO), according to a news report.

The token sale will be the inaugural event for the new exchange, which is set to be the first marketplace specifically for trading tokens classed as securities in the U.S. The service is being launched under the umbrella of Overstock’s capital markets arm, tØ.

The company expects to raise $200 million to $500 million “easily” via the ICO, Byrne said.

Celsius Puts Heat On Credit Card Providers With Blockchain-Based P2P Lending Service (Forbes), Rated: A

This system created a culture of ‘buy now, pay later’, something that came to a grinding halt with the financial crash of 2008. Suddenly, credit was not so easy to come by and the world stopped turning.

Of all disruptions often mentioned in the tech world, the financial crisis was the greatest of them all.

Cash is dying out, digital money and remittances have been completely disrupted and even credit card providers are losing business.

So, step forward, Celsius, an ethereum-member based lending platform that wants to disrupt the consumer credit industry by enabling quick and easy peer-to-peer loans.

These loans will pay higher interest to lenders and charge lower interest to borrowers by splitting the bank profits between the members of the community.

In the US, an astonishing $ 1 trillion, more than 50% of all the consumer credit issued worldwide,is currently controlled by six of the largest US banks. Centralized financial institutions like to offer credit to many of their richest clients – those who have well-established and pristine credit histories, but ignore ‘riskier’ millennials.

Celsius Is Creating A Peer-to-Peer Lending Service That Will Give Millennials Broader Access to Consumer Credit (Coinspeaker), Rated: A

In the U.S., $1.1 trillion, one-half of all the consumer credit issued, is currently controlled by six of the largest banks.

Celsius, an ethereum-based lending platform, announces today its plans to disrupt the consumer credit industry by enabling quick and easy peer-to-peer loans, swapping out big banks and their exorbitant fees for colleagues, friends or other Ethereum token holders. Celsius will focus its efforts on supporting millennials, the generation that often suffers the most at the hands of credit lending  services—a phenomenon we’ve seen recently with the rise of the student and consumer debt in the U.S. Celsius is building the future of consumer credit by migrating credit scores and legacy data to the blockchain and incentivizing millennials to build a new digital identity and credit score that includes their social and digital footprint. This process encourages the creation of a community of lenders and borrowers with lower loss factors and higher on-time payments, enabling greater credit limits at lower interest rates.

Celsius will hold an ICO for its Degree token in January, but the company just initiated its presale of $30 million from accredited investors. Celsius has added many notable names to its advisory, partner and investor groups including serial entrepreneur Jeff Pulver, co-founder of Vonage and VoIP Pioneer; Chris Dannen, founder and partner of Iterative Capital Management; Ismail Malik, founder of BlockchainLabs; Lou Kerner, top blogger on Medium; and Miko Matsumura, founder of Evercoin.

Celsius offers its users a variety of features, including:

  • Peer-to-peer lending
  • Digital credit score: Celsius will issue each user a credit score based on their digital identity and any other user uploaded data including FICO credit scores and past transaction history on websites such as Amazon and eBay.
  • Global Network
  • Insuring the credit: Celsius provides insurance so that if the borrower defaults, Celsius covers the portion of the principal loan amount for the lender and is responsible to recover the money owed to the lenders.

Need Personal Loans? Blockchain Is Here (Cointelegraph), Rated: A

Companies that offer personal loans (even enterprise-level banking institutions) charge exorbitant fees, and often require you to ‘sign in blood’ for the loan. In fact, much of the consumer credit market is held by just a few major banking institutions.

Nowhere is this situation more critical than among millennials.

According to a recent article in Forbes, the answer for this system seems to be coming from Blockchain technology.

Marketplace lenders should seek to be boring (Global Capital), Rated: A

The marketplace lending industry, particularly in the US, has always sat in a transient grey area between banking and tech firm, providing lending services while also preaching ‘disruption’, as Silicon Valley firms are fond of doing.

While the industry’s image as the ethical and trendy alternative to banking was a great route to publicity in the industry’s infancy, marketplace lending ought to be well enough established for platforms to sell themselves on their core lending business.

Ken Rees, CEO of Elevate, to Keynote at LEND360 Conference (BusinessWire), Rated: A

Ken Rees, Chief Executive Officer at Elevate, a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, will keynote at the LEND360 conference on October 11, sharing his insights on innovation and the needs of non-prime Americans. Rees will highlight Elevate’s Center for the New Middle Class, its mission, and the company’s commitment to innovating for their customers. His talk will shed light on the realities of being non-prime in America, and help audience members discover new ways to serve this group. Elevate is an online lender that has originated $4.5 billion in credit to more than 1.7 million non-prime consumers.

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

The mortgage process is speeding up. The study revealed that the median time from early rate shopping to closing on a purchase mortgage declined 7 days from 2016 to 2017.

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

LendingTree, Inc. to Report Third Quarter 2017 Earnings on October 26, 2017 (Business Insider), Rated: B

LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, today announced that it will release its fiscal third quarter 2017 results on Thursday, October 26, 2017, and the company will hold a conference call at 9:00am ET.

Conference call
Toll free #:  877-606-1416
707-287-9313 outside the United States/Canada

To listen to a replay of the call 
Toll free #: 855-859-2056
404-537-3406 outside the United States/Canada
Replay Passcode: 98763739

Closer Look at Credit Enhancements in Subprime Auto ABS Market Show Signs of Vulnerability (BusinessWire), Rated: A

Davis & Gilbert partner Joseph Cioffi, a widely-respected authority on loan and securitization markets, has found that credit enhancements supporting subprime auto asset-backed securities (ABS) do not necessarily provide the same level of protection as credit enhancements supporting pre-financial crisis era subprime residential mortgage-backed securities (RMBS), leaving them more vulnerable to market shifts and shocks than many realize.

These observations were made on a newly launched blog, the Credit Chronometer, in which Mr. Cioffi and team will be analyzing economic, market and political events that shape the legal landscape, and impact loan and structured credit markets, including those for auto loans, marketplace lending (peer-to-peer), student loans, mortgage loans and Property Assessed Clean Energy (PACE) financing.

Based on the indicators of crisis that foretold the subprime mortgage crisis – within the areas of lending practices, ABS practices and the underlying market for autos – the Credit Chronometer presents the “Subprime Auto Loan Crisis Chronometer” to depict the risk of a crisis, which Mr. Cioffi defines as a “battle over loss allocation.” As events impact the subprime auto market, the Subprime Auto Loan Crisis Chronometer’s bright yellow gauges will show the current level of risk. As of today, the Subprime Auto Loan Crisis Chronometer is set at:

  • Lending practices: Moderate-High
  • ABS Practices: Moderate
  • Auto Market: High
  • Risk of Loss Allocation Battles: Moderate

Austin credit union launches fintech-backed loan to up digital game (American Banker), Rated: A

The $125 million-asset Capitol Credit Union became the first financial institution last month to offer customers the product, Kasasa Loans.

Lending company has Rx for doctors with student loans (Cleveland Jewish News), Rated: A

Splash Financial in Cleveland has focused on relieving the burden of student debt since the company was founded in 2013. But according to founder and CEO Steven Muszynski, it wasn’t until recently the company turned its sights to the medical community.

“We’re an online lender that helps doctors refinance their student loans,” he said. “The majority of people financing their student loans graduate with an average of $200,000 in debt. We’re the only company in the country that allows lenders to pay only $1 a month for trainees.”

Congress Should Roll Back New Payday Loan Rule (Competitive Enterprise Institute), Rate: A

The hysteria in Washington around the release of the Consumer Financial Protection Bureau’s final short-term, small-dollar loan rule has been immense as of late. With the final rule issued late last week, it largely lived up to the hype.

The content of a federal rulemaking, while devastating for the payday loan industry, wasn’t all that was at stake. The CFPB’s Director Richard Cordray has long been expected to run for Governor of Ohio once the rule was finalized. With reports flowing in that Cordray plans to make the announcement any day now, the speculation is well-founded.

But the crux of the final rule remains the same. It will force lenders to conduct an “ability to repay” assessment of customers to ensure that borrowers can repay the loans and fees within two weeks, it will cap the amount of times a customer can roll over a loan at three, and it will prevent lenders from charging a customer’s checking account after two unsuccessful attempts.

This makes the impact of the rule devastating. The CFPB’s own impact analysis found that the rule would reduce industry revenue by approximately 75 percent. This is in essence a death warrant to at least three-quarters of the 20,000 payday loan shops that service some 12 million Americans annually.

There are multiple surveys confirming that the users of payday loans widely approve of the option.

Republicans should waste no time in using the Congressional Review Act to overturn this devastating regulation.

Payday lending rule may lure in lurking loan sharks (The Hill), Rated: A

The Consumer Financial Protection Bureau (CFPB) published its final rule addressing so-called payday loans as well as certain other extensions of credit to consumers on Thursday. These loans are usually small, very short-term (often just a few weeks) and carry a very high effective interest rate after all fees are taken into account.

The rule applies to three types of “covered short-term loans:”

  • Short-term loans maturing in 45 days or less
  • Longer-term (more than 45 days) balloon-payment loans; that is, the loan is paid in full when it comes due or the loan agreement requires at least one substantial down payment of the loan.
  • Longer-term loans with a cost of credit exceeding 36 percent that either have a balloon-payment feature or the lender is authorized to obtain repayment by initiating a transfer of funds from the borrower’s bank account.

3 ways the new rules curtailing payday loans will help consumers (WPXI), Rated: A

Of course, everyone is not happy about the changes, which won’t take effect until July 2019.

Here are three ways the new payday lending rules will help consumers

  1. Prevent overborrowing: Once a consumer has borrowed three times in a 30-day period, a mandatory 30-day “cooling off period” kicks in. During this time, the consumer won’t be allowed to borrow unless at least a third of the previous outstanding loan has been satisfied.
  2. Mandate income verification: Believe it or not, many payday lenders don’t check to see what a borrower’s monthly income is — they don’t have an incentive to. If you don’t pay up, your collateral — in many cases, your car — will become theirs. With the new rules, lenders must verify the consumer’s net monthly income and the amount of payments required for the consumer’s debt to be paid.
  3. Control payment withdrawals: Gone will be the days when a lender can continue to hit up your zero-balance account, triggering those insufficient funds charges. The new rules state that lenders must provide a written notice before a first attempt to withdraw payments for a loan from a consumer’s account. When two consecutive withdrawal attempts fail, the lender must get permission again from the borrower to attempt another withdrawal from the same account.

Ohio must reform payday lending (Record-Courier), Rated: B

Lenders avoided the law’s 28 percent interest rate cap by registering as mortgage lenders or credit-service organizations. That has allowed them to charge an average 591 percent annual interest rate on the short-term loans, watchdogs contend.

According to Pew Charitable Trust, Ohioans who borrow $300 from a payday lender are charged, on average, $680 in interest and fees over a five-month period — the typical payoff for what is supposed to be a two-week loan.

A bill awaiting action in the Ohio House would allow lenders to charge interest rates up to 28 percent plus a monthly 5 percent fee on the first $400 loaned — a $20 maximum rate.

OCC Gives Deposit Advance Programs New Life (PYMNTS), Rated: A

By the CFPB’s own estimates, the regulations will reduce the number of short-term loans in the U.S. by more than half.

Industry estimates project a drop in loan volume that will close the doors of more than 80 percent of short-term lenders in the U.S., most of which are smaller “mom and pop” operations.

A Brief History of Small Banks, DAPs, the CFPB and the OCC

Until around 2013, DAPs were offered as a mainstream banking competitor to payday loans. Their main competitive advantage was twofold: They were faster, and one’s bank could instantly verify those direct deposits. But in 2013, the CFPB released a whitepaper that said DAP loans were so similar to their payday cousins as to have all of the flaws normally associated with such lending products.

The CFPB Has a Change of Heart about DAP

A funny thing happened to the CFPB on its way to publishing those draft regulations on short-term lending: It seems to have had a change of heart about bank-based, short-term lending. In fact, when announcing the short-term lending rules, CFPB executive director Richard Cordray called out a special carve-out for community banks and credit unions, provided they make fewer than 2,500 short-term loans each year and collectively account for less than 10 percent of total lending revenue.

Follow the bouncing regs. The new CFPB rules, released last week, have a carve-out for small banks to pick up some of the short-term lending needs of consumers.

Atty Eyed For Payday Loan Fraud Says Tribe Strategy Is Legit (Law360), Rated: A

An attorney defending himself against charges he helped operate a $2 billion criminal payday-loan empire told a Manhattan federal jury Tuesday that he viewed tribal involvement in the enterprise as a legitimate legal shield and asserted that he had “panicked” when he faked a signature on a legal document.

5 Rules Digital Marketers at J&J, SoFi, J.P. Morgan, and IBM Swear By (Fortune), Rated: A

In May, when an Australian real estate mogul suggested posited the somewhat insulting theory that millennials aren’t able to buy homes because they’re spending too much on discretionary items like avocado toast, SoFi COO Joanne Bradford tapped into that controversy as a way to connect with the company’s millennial customer base: the online lender offered a month of free avocado toast to everyone who got a mortgage through the company. More than a hundred a media outlets jumped on the story and SoFi had three of its greatest months ever.

RealtyShares Wins LendingTree Fintech Innovation Challenge, $ 10K At Benzinga Fintech Summit (Benzinga), Rated: B

RealtyShares, the real estate marketplace that’s funded more than $500 million in developments, took home the Fintech Innovation Challenge presented by Lendingtree Inc TREE 0.04% at the Benzinga Fintech Summit.

CleanCapital Expands Team with Former Managing Director of Global Environmental Fund (Fox 8 Live), Rated: B

CleanCapital announced that Matt Eastwick has joined the company to structure and execute capital markets transactions. As Head of Capital Markets, Eastwick will bring an innovative approach to securing the optimal structures and investors for CleanCapital’s various and growing capital needs. Eastwick’s hire comes after a successful Series A equity raise this past summer, as CleanCapital continues to scale operations, while expanding opportunities for clean energy investing.

Chicago Mayor Cuts Ribbon at New Headquarters of Rising FinTech Firm OppLoans (PR Newswire), Rated: B

Chicago Mayor Rahm Emanuel cut the ribbon at the new OppLoansheadquarters in downtown Chicago this week. OppLoans, the nation’s leading socially responsible online lender, has more than tripled its employee-count in the past two years and expanded their operations in One Prudential Plaza. In 2017, the firm was named the 14th fastest-growing company in Illinois and the 219th nationally.

Real Estate Provides Opportunities for Retirees Looking to Protect and Grow Their Nest Egg (Equities.com), Rated: B

A growing number of investors are starting to take a closer look at the real estate market as a practical way to help fund their retirement. These retirees are getting into real estate investing through real estate crowdfunding platforms that allow them to pool their money for real-life real estate investments.

Last year, real estate crowdfunding sites topped the $3 billion mark and crowdfunding overall is expected to grow into a $300 billion industry in less than a decade. Fewer than 10% of Americans are accredited investors yet make up 70% of the wealthiest individuals in the U.S. Many retirees qualify as accredited, and we can expect many more crowdfunding sites to embrace the average individual investor by lowering the barrier to entry.

United Kingdom

Zopa is ‘pretty close to finishing’ building its new bank (Business Insider), Rated: AAA

Online lender Zopa is close to finishing building the tech it needs to launch a full bank, according to its CEO.

Janardana said he couldn’t comment on Zopa’s progress in getting fully regulated as a bank but said the shortest time it has taken a new bank to be regulated is around two years, suggesting Zopa is still a way off from launch.

‘We’re in close communication with Monzo, Starling, Tandem’

Janardana, who was speaking to BI at LendIt Europe conference in London, said Zopa is working closely with other startup banks in Britain.

During his presentation at LendIt Europe, Janardana said Zopa’s new bank initially plans to launch savings and credit cards. He said the bank will take a customer-focused approach, shunning 0% balance transfers on credit cards in favour of consistent low rates and rejecting teaser rates on savings accounts.

Open banking is an “exciting opportunity” for alternative lenders (P2P Finance News), Rated: A

ZOPA’S chief product officer Andrew Lawson has heralded the move towards open banking as “a really exciting opportunity” that could potentially broaden the peer-to-peer lender’s product offering.

Late last year, Zopa unveiled plans to launch a digital bank that would sit alongside its P2P operations. Lawson re-affirmed that this would enable Zopa to service a wider set of customers with a wider set of products. Revolving credit, credit cards and longer mortgages would not be possible with P2P, he argued.

Zopa CEO: banking must no longer be a “zero-sum game” (AltFi), Rated: A

Speaking at the LendIt Europe conference this morning, Zopa CEO Jaidev Janardana (pictured) issued a stinging critique of the traditional banking model, which he says is set up to “take advantage of customer inertia”. He went further, describing old school banking as a zero-sum game, in which wins for the bank will always be to the detriment of customers, and vice versa.

Mintos marketplace exceeds 35 000 investors (LendIt), Rated: AAA

Mintos marketplace for loans has reached a new milestone – 35 000 registered investors from 64 countries.

About 2 000 new investors join Mintos each month. This has allowed for loans worth more than EUR 325 million to be funded through Mintos in two years since its establishment. More than EUR 200 million has been funded in 2017 alone, making Mints a clear market leader in continental Europe with a 40% market share, according to AltFi Data.

As of September 2017, about EUR 1 million is invested in loans through Mintos daily, which is three times more than just a year ago.

On the supply side of the marketplace, there are 27 loan originators from 13 countries.

Oakam Accelerates Financial Inclusion in the UK with Alternative Data (LendIt), Rated: A

Digital micro-lender, Oakam has provided over 420,000 loans totalling over £320 million to consumers overlooked by mainstream financial institutions since 2006. Alternative data is enabling Oakam to employ new methods in underwriting and risk management to expand credit access for financially excluded consumers in the U.K., while maintaining robust lending standards.

Data from FICO shows that 60-75% of traditionally un-scorable consumers could be assigned a more meaningful credit score using alternative data. For Oakam, supplementing traditional methods of underwriting, such as the analysis of credit bureau data with alternative approaches has enabled Oakam to evaluate a high volume of applications since inception.

Oakam’s use of alternative data has also yielded positive repayment behaviour among customers. 70% of new customers made on-time repayments, despite previous challenges accessing credit due to their income levels; court judgements on prior loan defaults; status as a new resident of the UK; the absence of credit history or low credit scores; or some combination thereof. This is according to a study of 15,000 first-time Oakam customers between January 2015 and July 2016.

Oakam uses the following alternative sources for its underwriting:

  • Network associations: Similar to the use of relationship mapping on LinkedIn, Oakam assesses the connections between borrowers and applicants, based on social network data, geographic proximity, and referrals to study patterns that detect fraud or surface certain risk attributes. Data from Oakam showed that customers who were referred by other customers were 20% less likely to default than customers outside of any network.
  • Reaction data from nudges: In addition to predicting risk, Oakam uses gamification to influence it. Through its gamified mobile app, customers are financially incentivised to repay their loans. Oakam has seen a 25% improvement in on-time repayment since April 2017 as a result. Gamification also provides access to behavioural data to strengthen Oakam’s future underwriting decisions.
  • Unstructured data from online conversations: Oakam uses natural language processing and machine learning to analyse the conversations between potential customers and Oakam Digital Agents via its website, and to detect default risk or fraudulent intent.

Is RBS’s online lender a “massive corporate fudge”? (AltFi), Rated: A

Funding Circle boss takes shot at RBS’s online lending pilot Esme.

Esme, RBS’s online lending pilot for small businesses, went live in February of this year. 30-year RBS veteran Richard Kerton leads the project. This morning, he told the LendIt audience that Esme could approve and fund business loans in as little as 25 minutes, with broader risk parameters than its parent bank.

Desai dismissed the idea that P2P lenders are overly-reliant on brokers as a “myth”, pointing out that 75 per cent of Funding Circle’s borrowers come directly to the platform, and highlighting the simplicity of the platform as a big part of the reason.

You can soon buy and store bitcoin directly with this British “neobank” (Quartz), Rated: A

A British “neobank” called Revolut is working on letting its customers convert and hold bitcoin and other cryptocurrencies directly in their accounts.

The firm will let users buy, sell, and hold three cryptocurrencies: bitcoin, litecoin, and ethereum. Users will also be able to transfer cryptocurrencies to other Revolut account holders. The big thing here is Revolut’s promise to allow “instant” conversion of fiat money to cryptocurrencies within its app, potentially removing the currently troublesome process of signing up on crypto exchanges, or peer-to-peer platforms, or going to a bitcoin ATM, to acquire or dispose of funds.

China

JD Finance Launched Bank Deposit Product, with Yield Rate up to 5% (Xing Ping She), Rated: AAA

JD Finance, a third-party finance platform in China, recently launched several BaoShang Bank deposit products. The one-year yield of the product is as high as 5%, rising by as much as 230% compared with the benchmark interest rate for Banks.

The product description shows that the maturity of this series including 1 year, 6 months and 3 months, correspond the savings deposit rate of 5 %, 3.5% and 3.3%, and the minimum deposit amount of 50000, 100 and 100 RMB. In terms of security, as deposits, the product series guaranteed income. As for liquidity, it can be taken at any time. In procedures, it can be purchased directly without evaluation.

A number of bank retails said that the deposits on individuals always have been conducted through their own channels, and they have never take deposits through a third party platform. It also reflects that the competition of bank deposit market becomes more and more fierce.

However, JD Finance explained that they just play the role of information display platform for the bank deposit product, rather than commission sale. Both product and service are supplied by the bank itself.

Zhongan Insurance Shares Ride the Roller Coaster (Xing Ping She), Rated: A

Zhongan Insurance (06060.HK) has been known as The First Stock in Fintech. After three days of rising in a row, its stock price hit a new high of HK $97.8 and closed at HK $90.8 on October 9th. So far, the market value of Zhongan Insurance reached to HK $130.7 billion.

WIND data shows that the stock has risen 52.09% in six trading days since listed, with a turnover rate of 59. 62%, and the interval volume is 2.62 billion shares, the transaction amount reached to 20 billion RMB.

“Now there is no other pure insurance technology company in Hong Kong stock market. The listing of Zhongan Insurance brings the opportunity for investors to participate in the field of insurance technology. In addition to foreign investment in the stock, mainland funds are also very fond of the unit”, a Hong Kong investment analyst said.

CreditEase Hosted FinTech Themed 2017 Silicon Valley – Beijing Dialogue Conference in San Francisco (Business Insider), Rated: A

CreditEase, a Beijing-based financial technology conglomerate with a robust online platform and a broad offline network, announced it recently hosted a FinTech conference, “2017 Silicon Valley – Beijing Dialogue” themed “The Power of Innovation: Driving Forces behind the FinTech Age 3.0″, in San Francisco.

Hong Kong needs to unlock the potential of the sharing economy, or risk falling behind (SCMP), Rated: B

The city’s ranking in the Global Innovation Index has fallen in the last two years. And this slide has been accompanied by another trend: the rise of China in the table.

With more than 600 million people in China participating in the sharing economy, it’s expected that it will account for 10 per cent of China’s gross domestic product by 2020, according to their State Information Centre.

European Union

CREDITSHELF ANNOUNCES RESULTS OF NEW SME-STUDY AT LENDIT EUROPE 2017 CONFERENCE (LendIt), Rated: A

today at the Lendit Europe gathering of over 1,000 fintech and lending executives in London, creditshelf announced that, according to the study “Industrial SMEs and Financing 4.0”, nine out of ten medium-sized industrial enterprises in Germany would provide lenders with real-time production data to either convince them of the value of making an investment, or to enable them – during the credit term – to check on the performance of a facility already arranged.

European marketplace lenders tap private ABS market (Global Capital), Rated: A

Panellists at LendIt Europe on Monday said that there may be more to Europe’s marketplace loan ABS market than meets the eye, with a number of platforms issuing deals under the radar.

Citi’s Sebastian Walf said that the two public ABS deals, which were sold last year from Funding Circle and Zopa, were just the “tip of the iceberg”, with a number of other online lending platforms issuing private securitizations to meet their funding needs.

Trustly partners with Emric, part of Tieto (Trustly), Rated: B

Trustly, the European payments company, and Nordic software provider Emric, part of Tieto, are delighted to announce a new strategic partnership which will provide Emric’s business customers access to Trustly’s online banking payments technology across Europe.

International

Crowdvouching service Suretly, raised .8 mln in August, is launching beta version in 6 weeks (LendIt), Rated: A

During the ICO last month, Suretly secured its minimum funding requirements in just a few hours. It raised $2.8m. Before the ICO, the first version of the Suretly app was successfully tested. A beta version of it will be released on the market within several weeks from the ICO. Upon release of the app, the system will already be populated with borrowers.

Suretly is an international project. The company has legally set up in the following initial countries: Russia, Kazakhstan, and the USA.

CFTE Launches Online Fintech Foundation Course in Collaboration with 20 CEOs and Senior Leaders (PR Newswire), Rated: A

CFTE is pleased to announce the worldwide release of Around Fintech in 8 Hours. The Fintech foundation course has been designed to give professionals working in the finance industry a solid understanding of how technology is redefining the provision of financial services.

4 senior lecturers and 16 industry experts who are Fintech CEOs, investors and heads of innovation will provide participants with a 360 perspective on Fintech disruption.

16 guest experts such as Rob Frohwein, CEO of Kabbage and Anne Boden, CEO of Starling Bank, will support the lecturers by providing first hand insights into how the structure of the FS industry is being transformed by technology and what this means for professionals.

The Centre for Finance, Technology & Entrepreneurship Preps Online Fintech Course (Crowdfund Insider), Rated: A

The Centre for Finance, Technology and Entrepreneurship (CFTE) is launching their first online Fintech course which will open to the public soon. If you are interested, you may enroll here. The course is described as “Around Fintech in Eight Hours.”

The CFTE has partnered with several accelerators including the Supercharger Fintech Accelerator and LATTIC80. Both are based in Asia (Hong Kong & Singapore) with the CFTE operating out of London.

India sets sights on UAE’s technology sector (AMEinfo), Rated: A

A statement released by ESC says that it is participating at GITEX 2017 to provide Indian IT companies opportunities to exploit the burgeoning Middle East ICT market.  It is the largest participation by India, under the Council’s banner.

Meanwhile ESC Chairman Prasad Garapathi said that Indian IT exporters will continue to look into the whole Middle East and MENA region through this important gateway of Dubai.

Export of software and related services to the Middle East has reached $2bn in 2016-17 while India’s total export of electronics hardware during 2016-17 is estimated at $5.685bn.

The Middle East nation is keen to elevate disruptive Indian fintech startups by providing them an international platform and financial support.

The two sides also signed 14 agreements whereby the UAE vowed it would invest $75 billion in India.

The two countries also set a target of 60 percent increase in bilateral trade in the next five years.

Australia/New Zealand

SocietyOne Achieves $ 350 Million in Total Loan Originations (Crowdfund Insider), Rated: AAA

Australia-based online lender SocietyOne announced on Tuesday it has secured $350 million in total originations. This news comes less than two months after the lending platform celebrated its fifth birthday. According to SocietyOne, the company topping $350 million as the current loan book also reached $200 million for the first time in the lender’s history.

10 Fast Growing Fintechs in Australia and New Zealand (Fintech News), Rated: A

Pay Later, better known as Afterpay, is an easy-to-use payment process allows shoppers to buy their product today and pay it off in 4 equal fortnightly instalments.

Airwallex was founded in 2015 by a team of entrepreneurs who developed a technology that uses machine learning to determine the most cost-effective way of settling every payment that comes through the platform.

CoinJar provides simple tools to manage digital currencies.

Data Republic was founded to empower the liquidity of data by delivering technology which offers best-practice security, privacy compliance and governance controls for organizations looking to safely exchange data.

Harmoney is NZ’s leading peer-to-peer money marketplace – where everyday people borrow money from (and lend money to) other everyday people. Hence the term ‘peer’ to ‘peer.’

HashChing is Australia’s first online marketplace allowing consumers to access great home loan deals without having to shop around.

identitii allows banks to move away from customer level information to detailed information about each and every transaction.

Prospa is Australia’s online small business lender committed to helping small businesses access the funds they need to grow.

SocietyOne is radically changing the landscape of financial services in Australia. Since our foundation almost five years ago, we have gone from a standing start to providing more than $300 million in loans to customers.

Xero is one of the fastest growing software as a service companies globally.

BOQ still worst for home loan disputes (The Australian), Rated: A

Bank of Queensland has topped the list as Australia’s worst ­offender for disputes with home loan customers, according to the financial ombudsman.

It is the fourth year in a row the bank has headed the list, with the number of disputes per 100,000 customers barely improving in the past two years, although the numbers have trended downward since 2014.

For every 100,000 home loan customers, BoQ was involved in 79 disputes during the year. Of those, 40 per cent were resolved by agreement, with 29 per cent in BoQ’s favour, according to the Financial Ombudsman Service.

Home loans accounted for 10 per cent of all disputes FOS accepted in the year, while credit cards accounted for 14 per cent and personal loans 8 per cent.

India

Crisil withdraws proposal to enter peer-to-peer lending business (Business Standard), Rated: AAA

Ratings agency has withdrawn proposal to enter into peer-to-peer lending platform business while the has approved Rs 85.45 crore foreign direct investment (FDI) proposals in September from four companies, the Ministry said on Tuesday.

Crisil’s majority shareholder is international ratings agency Standard and Poor’s, an American corporation.

P2P players seek RBI clarification on permissibility of institutional lenders (Financial Express), Rated: A

After the Reserve Bank of India (RBI) released guidelines for entities engaged in peer-to-peer (P2P) lending last week, an association of such entities is planning to ask the central bank to clarify whether institutions will be allowed to lend through P2P platforms.

A top executive with one of the five P2P lending platforms told FE that the industry is unsure of whether ‘participant’ covers only individuals or institutions as well.

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

BankBazaar is the world’s first neutral online marketplace that helps people compare and choose financial products such as loans, insurance, credit cards, fixed deposits, saving accounts, mutual funds etc., – over a highly secure, user friendly, and intuitive platform.

Capital Float is an online platform that provides working capital finance to SMEs in India.

FreeCharge is India’s No.1 payments app.

Lendingkart Technologies Private Limited is a fin-tech startup in the working capital space.

MobiKwik is India’s largest independent mobile payments network connecting 55 million users with more than 1,500,000 retailers.

Mswipe is India’s largest independent mobile POS merchant acquirer & network provider.

Paytm is India’s largest mobile payments and commerce platform.

Policybazaar is an Indian online life insurance and general insurance comparison portal.

Razorpay aims to revolutionize online payments by providing clean, developer-friendly APIs and hassle-free integration.

Rubique (Rubik + Unique) aims to mine every possibilty to offer a unique solution to our customers’ complex financing problems through advanced technologies and data science.

India Money Mart launches P2P lending platform (India Times), Rated: B

India Money Mart (IMM), a digital lending marketplace, has launched its app to allow lenders and borrowers to carry out Peer-to-Peer (P2P) lending a week after the RBI released detailed guidelines for this platform.

The app is useful for people seeking alternative sources of funding to meet emergency requirements, not serviced by banks and other traditional lenders, it said.

Asia

Mongolia’s Untapped Lending Market Has Earned This Japanese-Backed Fintech Startup A $ 30M Valuation (Forbes), Rated: AAA

In Mongolia, where the average monthly income is $390, informal loans between friends or family members are commonplace as credit and small bank loans are hard to get. On the other hand, small informal loans are almost expected to not be paid back.

“There is no leverage system for people to repay, so in the worst case they lose their friends,” says Anar Chinbaatar, 35, CEO of fintech startup AND Global.

His startup, which launched the mobile app LendMN, introduced mobile-based microlending to the North Asian country where borrowers are blacklisted from significant financial services such as mortgages if they default on a small loan from the bank.

After raising $1 million in seed funding in April 2016, the company received another $4 million with a $30.8 million valuation in August from influential backers in Mongolia and Japan including former Japanese parliament member Takami Yuichi, investor Satoshi Matsumoto and his wife Yasuyo Matsumoto. It is also advised by Oko Davaasuren, an influential Mongolian investor from TechStars.

The company, which has issued over $1.9 million in loans as of this month, plans to use the new investment to fuel expansion into the Philippines and Japan and develop new technology such as a blockchain project while preparing for an initial coin offering in December.

Crowdfunding Creates New Opportunities In Malaysia (TMF Group), Rated: A

Malaysia was the first country to regulate the growing industry to support new ideas by providing a funding mechanism. Its Securities Commission (SC) has approved a total of 12 crowdfunding platforms – six equity-based and six peer-to-peer (P2P) lending – and, though there are strict guidelines for operation, the market is creating new avenues for entrepreneurs.

Growing regulation of the crowdfunding industry is not putting off investors; Malaysia as a whole is one of the least complex jurisdictions in Asia, according to TMF Group’s inaugural Financial Complexity Index.

The ranking of 94 jurisdictions across the world resulted in three top-10 spots for Asia Pacific: Vietnam ranked 5th most complex for compliance, followed by China at 7 and India at 10.

But there was a large chunk of southeast Asia which ranked on the less complex side of the table, including Malaysia (59), the first country in Asia to regulate crowdfunding.

Africa

Inspeer Announces Crowd Sale for Its ‘Inspiration Through Peer to Peer’ Lending Service (Digital Journal), Rated: AAA

Inspeer, one of the few players to recognize the need for revolutionary technology in the financial services industry has opted to introduce additional utilities backed by cryptocurrencies and their underlying blockchain technology. The platform, designed to use cryptocurrency alongside fiat currency for the purpose of peer to peer lending has announced the launch of its upcoming crowdsale campaign.

With their primary operations located in Russia under the LightFin.ru brand, more than 200,000 loans applications were processed within the first year of platform deployment.

Inspeer’s platform uses loan pipelines and scoring algorithms which consist of the InsCore system and OLAF algorithms. Together, these two components help to effectively execute an assessment of the borrower’s likelihood of repayment as based on more than 20,000 predictors.

ICO will start on Nov. 6 and continue for Dec 6.

Authors:

George Popescu
Allen Taylor

Wednesday October 4 2017, Daily News Digest

ICO funding by month

News Comments Today’s main news: Elevate customers save more than $2B. Overstock launches SEC-compliant ICO alternative. RateSetter trims secondary market fees. PeerStreet funds over $500M in loans with zero investor losses. Qudian leads 2 IPO launches totaling $869. Kabbage on the road to $161M raise. Today’s main analysis: International P2P lending volumes. Today’s thought-provoking articles: Renren’s Joe Chen’s sneaky SoFi share grab. Hedge […]

ICO funding by month

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Caribbean

News Summary

United States

Elevate Customers Save More Than $ 2 Billion Thanks to Advanced Tech-Enabled Underwriting (BusinessWire), Rated: AAA

Elevate Credit, Inc. (“Elevate” or “the company”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced their customers have saved more than $2 billion, versus what they would have paid for payday loans. $613 million of these cumulative savings were incurred in the first half of 2017 alone.

Joe Chen’s Sneaky SoFi Share Snatch (Forbes), Rated: AAA

But in Silicon Valley Renren’s founder and CEO, Joseph “Joe” Chen, is no outcast. He is a well-connected guru and mentor who sits on the boards of companies in which Renren has invested, like LendingHome, Fundrise, and Motif Investing. Chen also sits on the board of Social Finance, known as SoFi, which has been under fire due to a mounting sexual harassment scandal that recently saw Mike Cagney resign as SoFi’s CEO and chairman.

Chen is cooking up a deal that will allow shareholders of Renren who are “qualified purchasers” and “accredited investors,” to exchange their shares in the company for ownership in a spinoff entity consisting of its investment portfolio, including Renren’s stake in SoFi. Other shareholders who do not qualify would instead get a cash payment reviewed by a special committee of Renren’s board.

Under the spinout plan, Chen, who owns 31% of Renren’s stock, SoftBank, which owns 39% of Renren, and DCM, which owns 8.6%, will likely increase their SoFi holdings. Most of the shareholders owning the remaining 20% of Renren would lose their exposure to SoFi given that they appear to largely be individual retail investors, Securities & Exchange Commission filings show. This would leave them with a yet-to-be determined dividend, and a holding in a declining, money-losing Chinese internet company.

Renren still has its stake in SoFi, which together with some other Renren investments is worth more than Renren’s market capitalization of $630 million.

Overstock.com launches SEC-compliant ICO alternative (Bankless Times), Rated: AAA

Online retail giant Overstock.com is currently not only offering custom jewelry or discount mattresses but has been delving into cryptocurrency through Overstock.com, its subsidiary focused on Blockchain ventures.

In their Overstock.com, they are now in a joint venture together with RenGen and Argon Group to launch an Automated Trading System (ATS) for trading tokens issued via ICOs.

According to reports, $2 billion has been raised in token sales this year alone.

Hedge Funds Flip ICOs, Leaving Other Investors Holding the Bag (Bloomberg), Rated: A

Hedge funds are proving to be first among equals when it comes to digital token sales by technology startups, receiving preferential discounts and terms and then often cashing out. While legal, the maneuver is drawing comparisons to some of the eyebrow-raising practices that took place during the IPO heyday of the 1990s, when many preferred investors would quickly resell shares for big profits.

“It’s not healthy for the ecosystem, and it’s pretty abusive,” said Kyle Samani, a managing partner at Austin, Texas-based Multicoin Capital, which invests in ICOs. “They are getting a discount because they are a big name, and they think it’s going to draw the retail investor. It’s the greater fools theory –- I’ll buy it if there’s someone who’s more of a fool than me.”

Source: Bloomberg

Startups often announce, with much fanfare, that such-and-such funds and big-name investors have participated in the presale. What isn’t as well publicized is that the early investors — and, possibly, even the startup’s founders — can often cash out right after the ICO.

Source: Bloomberg

More than 80 percent of ICOs are doing presales, according to Lex Sokolin, global director of fintech strategy at Autonomous NEXT.

PeerStreet funds over half a billion in loans, maintains zero losses to investors (PeerStreet Email), Rated: AAA

PeerStreet, the real estate investing platform for real estate debt, has just hit the milestone of having funded half a billion in loans and with zero losses to investors since the company launched in 2015.

Platforms in the P2P and crowdfunding space are seeing increasing competition and scrutiny, but PeerStreet has continued to offer investors access to quality loans and high yields, earning the public testimonial of some high-profile users, such as 

Kabbage is Raising $ 161 Million (Crowdfund Insider), Rated: AAA

Online SME lender Kabbage is raising $161 million, according to a filing with the Securities and Exchange Commission. The Fintech firm filed the Form D last week indicating it had already received $80,573,040 with the same amount remaining to be raised.

Atlanta fintech ‘unicorn’ Kabbage raising $ 161 million (Biz Journals), Rated: B

Kabbage, which is mulling an IPO, has raised about $80 million on the planned raise, according to a Securities & Exchange Commission filing. The fintech, valued at more than $1 billion, announced a $250 million investment from SoftBank last year.

Kabbage’s Petralia Talks Big Tech, Fintech and Lending (deBanked), Rated: A

It’s only been a few weeks since the blockbuster announcement that SoftBank is investing $250 million into Kabbage, which thrust the small business lender into the spotlight for a few reasons, not the least of which was the more than $1 billion valuation that has been speculated for Kabbage.

This valuation, of course, is in stark contrast to that of OnDeck, which also lends to small businesses.

“All of our bank partnerships are technology integrations where our technology sits in their systems. They use our technology to deliver the customer experience. And I think what SoftBank saw in us was that potential. Whatever the valuation was I can assure you it was a result of a lot of due diligence on the part of SoftBank,” she said.

Rethinking Credit Scores in the Age of Fintech (Huffington Post), Rated: AAA

What value do the three big ratings bureaus, Equifax, Experian and TransUnion, provide today in our emerging digital economy?

Increasingly in a world where payments may involve a peer to peer exchange, a global transfer, and more and more often a mobile phone transaction, the definition of good credit is going to change and widen.

Today, Experian maintains credit information on 215 million American consumers [Experian]. That’s over two-thirds of the total U.S. population [U.S. Census]. Roughly half of the population in the US has a FICO credit score that is less than 650, meaning that nearly half of people in the US cannot get credit from banks today.

The Equifax debacle turned up the volume on the call for change. We’re about to see more innovative ways of looking at credit, most of them built by mobile-first fintech companies.

Companies like PayPalKabbageSmartBizSquare, and others have stepped in to look at new ways to determine creditworthiness. Rather than depend solely on a single score like FICO, they are looking at a more holistic picture of a credit applicant.

SoFi, another lending startup, is using AI to analyze data from sources other than credit card information. And ShoCard, a blockchain-identity management system (IMS), teamed up with Creditinfo to let a customer claim their identity and manage who it gets shared with.

Chad Swenson of Lantern Credit believes your credit should be under your control. “Companies,” he says, “now have the ability to work with multiple alternative data streams outside of the traditional data delivered from the bureaus.”

Evan Singer, CEO of SmartBiz, a company devoted to helping small businesses secure loans, says that other metrics like your bank rating (how you use your bank rather than your credit) is another important piece of the puzzle often ignored.

CrowdStreet Debuts First Direct Commercial Real Estate Investing Platform for Financial Advisors (CrowdStreet), Rated: A

CrowdStreet, provider of the leading commercial real estate investment platform for investor acquisition and relationship management, today announced several enhancements to its flagship Sponsor Direct white-label software platform designed to address the needs of modern investment firms. With these new features, Sponsor Direct is now the only software offering that combines support for financial advisor accounts with a suite of tools specifically developed to help them engage, communicate with and service their investors. Hines Securities Inc. is the first firm to leverage these new capabilities, relying on Sponsor Direct to provide easy-to-use online real estate capital fundraising functionality to financial advisors.

CrowdStreet’s proven software solutions currently support more than 53,000 investors, managing more than 1,000 offerings and $3.7 billion in invested capital. Since its launch, the CrowdStreet software platform has been used to raise more than $260 million and distribute more than $684 million to investors.

New Yorkers pay the second highest ATM fees in the country (NY Daily News), Rated: A

ATM fees have reached an 11-year record high, and New Yorkers are paying the second highest rates, says Bankrate’s annual Checking Account Survey for 2017.

The national average ATM fee is $4.69, equaling the average ATM surcharge of $2.97 plus the average out-of-network fee your main bank charges of $1.72.

Cities whose fees top over $5 include Pittsburgh ($5.19), New York ($5.14), Washington, D.C. ($5.11), Cleveland ($5.11) and Atlanta ($5.05).

Even the lowest fees still don’t drop below $4 with Milwaukee at $4.19 and Dallas at $4.07.

Overall, ATM withdrawal fees have risen by 55% over the last ten years and there is little to curb this growth.

1031 Crowdfunding Moves Up Rankings to #4 Among Top Real Estate Crowdfunding Sites (PR Newswire), Rated: A

1031 Crowdfunding, LLC announced today that the Company moved up in the rankings for the 2017-2018 Top 100+ Real Estate Crowdfunding Sites to #4 overall and maintained its position as #1 ranked Real Estate Crowdfunding site for 1031 Exchanges.

The Real-Estate Crowdfunding Review conducted in-depth research of over 100 real estate crowdfunding sites to form the reviews and rankings provided in the Top 100+ Real Estate Crowdfunding Sites. Site features most highly-valued included: pre-funding, low investor fees, low investors minimums, bankruptcy protection, velocity, positive investor feedback, co-investment by the company, and venture capital funding in the company.

Top 100+ Real Estate Crowdfunding Sites (The Real Estate Crowdfunding Review), Rated: A

13 sites in the former top 25 have fallen completely out of the rankings due to abandoning their business model or challenges. 5 sites have improved tremendously with substantially increased volume, and a few of these that were lower ranked have leaped up the charts as well.

Tier 1: Best of the Best

These sites have it all: High transparency, co-investment,  pre-funding, high-volume, average to low fees, excellent bankruptcy protection, strong administration and customer service, and strong financial backing.

None. No site has all these features yet, but we hope that will change by the time of our next review.

Tier 2: All-Stars

These sites are all extremely strong in the majority of the fundamentals that are most important to investors.

Tier 4: Up-And-Coming + On-probation

There are 2 types of sites in this category. The 1st are up-and-coming sites that may not be as polished as competitors but have some sort of promise or potential for the future. The 2nd are sites that did well in last year’s rankings, but since then have had substantial investor complaints, decreasing volume or other challenges.

Justice Department gives big banks green light on real-time payments (American Banker), Rated: A

Following an antitrust review that lasted almost a year, the Department of Justice has greenlighted a real-time payments network being developed jointly by the nation’s largest banks.

The government’s approval may boost the prospects of a system that is being built by The Clearing House, the payments firm co-owned by JPMorgan Chase, Citigroup, Bank of America, Wells Fargo and a host of other banks.

Fintech players assess post-disruption environment (Banking Exchange), Rated: A

Has the state of consumer credit changed post-crisis? Lending Club Chief Executive Scott Sanborn said he believes that the “new normal” in consumer lending is riskier.

Wages are stagnant, Sanborn said, and a greater portion of many consumers’ income now goes toward repayment of debt. Credit cards, student loans, and auto loans are among the major drains on the consumer wallet today, he noted.

A common use of marketplace lenders’ credit is debt consolidation loans, undertaken by consumers to bring down their overall borrowing rates.

Lending Club is not alone among nonbank digital lenders in going beyond traditional credit criteria. A co-panelist with Sanborn, Sarah Friar, chief financial officer at Square, said that her company—which recently applied for an industrial bank charter in Utah—doesn’t use FICO ratings at all. Friar said Square—which began as a payments mechanism and has expanded into small business credit—looks at financial accounts, number of employees, and status versus other players, among other factors.

Spending Within Their Means: Some Cities Do It Better Than Others (Business Insider), Rated: A

LendingTree®, the nation’s leading online loan marketplace, has released the findings of its study on how well residents in the top 50 U.S. metropolitan areas are spending within their means – or aren’t.

Among the 50 ranked metro areas, residents are, on average, using 30 percent of their revolving credit lines — such as credit cards and home equity lines of credit, or HELOCs. They also have mortgage balances averaging 79 percent of their annual income and non-housing debt balances averaging 44 percent of annual income, and have had five credit inquiries in the last two years.

Greenville, SC takes the top score, despite having the second-lowest average income among the 50 cities ranked at $65,503 per household.

Source: LendingTree

Rank

Metro

Spending Within Their Means Score

Inquiries (last 2 years)

Revolving Credit Utilization

Non-Housing Debt % of Income

Mortgage Debt % of Income

1

Greenville, SC

71

4.0

27.6%

47.3%

61.6%

2

Greensboro, NC

65

3.8

28.9%

48.5%

63.9%

3

Kansas City, MO

64

5.9

28.4%

42.8%

65.0%

4

Buffalo, NY

64

4.0

29.0%

50.5%

55.2%

5

Charlotte, NC

64

3.8

28.2%

43.2%

84.9%

6

Milwaukee, WI

64

7.1

28.4%

39.7%

65.8%

7

San Francisco, CA

63

3.9

28.9%

28.4%

109.1%

8

Boston, MA

62

4.6

29.0%

35.7%

86.9%

9

New York, NY

62

4.4

30.5%

34.7%

77.6%

10

Raleigh, NC

61

3.8

27.6%

45.2%

85.6%

11

Pittsburgh, PA

60

5.1

28.0%

51.2%

49.3%

12

Nashville, TN

59

4.4

27.8%

43.9%

80.4%

13

Hartford, CT

58

5.5

30.0%

38.1%

76.8%

14

Oklahoma City, OK

58

6.0

28.3%

47.8%

60.7%

15

Portland

56

3.5

30.0%

40.2%

90.8%

16

Grand Rapids, MI

56

6.8

29.4%

43.3%

59.8%

17

Detroit, MI

56

5.9

30.1%

41.0%

65.0%

18

Louisville, KY

56

6.8

28.3%

43.0%

68.4%

19

Washington, DC

55

4.0

30.1%

37.1%

102.8%

20

Richmond, VA

55

4.0

29.8%

41.2%

87.5%

21

Denver, CO

55

3.1

29.2%

39.9%

108.0%

22

St. Louis, MO

53

7.7

29.0%

42.8%

67.0%

23

Philadelphia, PA

53

5.6

28.9%

43.0%

79.4%

24

Minneapolis, MN

53

4.3

30.5%

39.5%

83.6%

25

Birmingham, AL

53

5.6

29.2%

47.3%

62.5%

26

Cincinnati, OH

53

5.7

29.1%

44.9%

68.0%

27

Cleveland, OH

52

6.6

28.9%

49.4%

58.9%

28

Austin, TX

52

4.9

30.0%

42.5%

78.2%

29

Dallas – Fort Worth, TX

52

5.1

29.5%

44.3%

69.9%

30

Indianapolis, IN

51

6.6

28.4%

46.1%

68.3%

31

Atlanta, GA

51

4.3

29.2%

45.0%

81.2%

32

Columbus, OH

49

6.2

30.6%

45.9%

57.4%

33

Salt Lake City, UT

48

4.2

30.2%

39.7%

98.2%

34

Chicago, IL

46

7.2

30.1%

39.5%

80.1%

35

Seattle, WA

46

4.6

30.6%

37.6%

98.7%

36

Memphis, TN

45

5.1

29.7%

51.2%

64.9%

37

New Orleans, LA

43

4.2

30.8%

50.8%

66.9%

38

Miami, FL

43

4.1

29.0%

48.7%

89.5%

39

Harrisburg, PA

42

6.2

29.1%

47.8%

70.1%

40

Sacramento, CA

42

4.4

32.0%

38.5%

103.2%

41

San Diego, CA

41

4.3

32.8%

37.2%

118.2%

42

Los Angeles, CA

39

4.6

32.0%

38.6%

108.3%

43

Houston, TX

39

5.3

31.4%

46.8%

70.3%

44

Tampa, FL

38

4.2

29.9%

51.6%

80.7%

45

Virginia Beach, VA

36

3.8

33.2%

46.8%

95.4%

46

Orlando, FL

31

4.3

30.7%

51.0%

82.1%

47

Jacksonville, FL

25

4.1

32.3%

51.8%

87.9%

48

Phoenix, AZ

25

5.1

30.4%

48.1%

102.7%

49

Las Vegas, NV

20

5.1

31.8%

50.6%

96.6%

50

San Antonio, TX

19

7.3

32.1%

54.7%

72.2%

Goldman Sachs Explores a New World: Trading Bitcoin (WSJ), Rated: B

Goldman Sachs Group Inc. GS 0.40% is weighing a new trading operation dedicated to bitcoin and other digital currencies, the first blue-chip Wall Street firm preparing to deal directly in this burgeoning yet controversial market, according to people familiar with the matter.

Goldman’s effort is in its early stages and may not proceed, the people said.

United Kingdom

RateSetter streamlines secondary market fees (P2P Finance News), Rated: AAA

RATESETTER has announced that it is simplifying the way investors can access their money, with one single “transfer fee” when selling loans on the secondary market.

Lenders are currently charged two fees when selling out existing RateSetter loans, but from 2 November this is being streamlined into a single charge. The fee will be a percentage of the capital being withdrawn, and will be fixed for each market.

P2P Finance News

LendInvest urges government to back SME builders (Mortgage Solutions), Rated: AAA

Property finance platform LendInvest has called on government to do more to support small builders after discussing the subject with a group of influential MPs.

The event follows the publication of a report by LendInvest earlier this year on the challenges faced by property SMEs. These include constrained access to finance and distorted policy around regulation, taxation and access to land.

At the time of the report LendInvest said only 12.5% of new homes built today are constructed by small builders, down from 37.5% before 1990.

A canary in the P2P coal mine? (Financial Times), Rated: A

How are British “peer-to-peer” lenders doing?

Employee lenders are one of the fastest-growing areas of UK fintech (Financial Times), Rated: A

Online lenders that are repaid from people’s salaries have raised more than £175m in recent months, marking out the nascent sector as one of the hottest areas of the UK financial technology market.

Legal & General, the insurer, will on Wednesday announce that it is leading the latest £40m investment in SalaryFinance, which provides loans to employees of 50 groups in the UK and plans to expand in the US.

Founded by three former executives from Google, PA Consulting and Royal Bank of Scotland, SalaryFinance combines with companies to offer their employees loans at lower rates than credit cards or payday lenders.

The company has an unusually low default rate of 0.5 per cent because of the security of deducting repayments directly from a borrower’s salary, and the extra information it gains about its customers by tapping into their employer’s payroll systems.

Fintech awareness is surprisingly low in the UK (Business Insider), Rated: A

Despite the high number of UK consumers who use financial products and the extent of financial services penetration in the country — 91% of people across the UK have a current account, and 67% use contactless payments at least once a month — awareness of fintech services in the UK remains low, according to a 

Source: Business Insider

Luton is still the best place for buy-to-let investors (What Mortgage), Rated: B

According to the latest Buy-to-Let Index from online mortgage lender LendInvest, Luton has managed to hold on to the top spot as the best place for buy-to-let investment.

Luton has seen a 4.51% increase in rental price growth and an average yield of 4.51%.

China

Chinese Lender Qudian Leads 2 IPO Launches Totaling $ 869M (Law360), Rated: AAA

Chinese online lender Qudian Inc. launched an estimated $769 million initial public offering on Tuesday, adding to a growing IPO pipeline along with private equity-backed medical device company OptiNose Inc., which set terms on a projected $100 million offering.

Beijing-based Qudian plans to offer 37.5 million Class A shares priced between $19 and $22, raising $768.8 million if shares price at midrange. Qudian, represented by Simpson Thacher & Bartlett LLP, is directly offering 35.6 million shares in the IPO while various existing shareholders are selling 1.9….

European Union

Robo.cash Founder Sergey Sedov Comments on Recent Milestone (Crowdfund Insider), Rated: AAA

Robo.cash, an automated P2P lending platform that includes a buyback guarantee, recently celebrated its own steady growth during 2017 Q2, noting that its total amount of investments now exceeds €1.8 million. In addition, nearly €400,000 in loans were added in August alone, while the  average invested amount per investor gained 2.2% to the previous month at €3,270 in August. More than 900 investors have joined the platform in the first six months of operation.

The Ultimate List of LendIt Europe 2017 Speakers to Follow on Twitter (LendIt), Rated: B

If you follow them, we guarantee that your news feed will be filled with industry news, trends, thoughts, opinions and more!

Source: LendIt

 

International

International P2P Lending Volumes September 2017 (P2P-Banking), Rated: AAA

This month I added Raize, a marketplace in Portugal.

Source: P2P-banking

GoldMint Partnership Signals Strategic Advancement (NASDAQ), Rated: A

GoldMint, a blockchain-based startup that helps gold owners profit from digital assets backed 100 percent by physical gold, recently announced an innovative collaboration with the mineral production company Eurasia Mining .

Through this agreement, GoldMint is establishing a method for applying blockchain-based technology to the development of resource industry projects.

India

GET YOUR FINANCES RIGHT (Daily Pioneer), Rated: A

Last year, State Bank of India (SBI) announced that the ceiling limit for its foreign educational loans would be raised from Rs 30 lakh to Rs 1.5 crore.

According to statistics, about45 per cent of international students in US alone comprise of Chinese or Indian students.

Here’s a quick look at the financial loan options other than SBI:

  • The Indian Government has installed the portal ‘Vidya Lakshmi’ that allows students to check out various loan options and fund providers. Loans are provided in four slabs — Below Rs 4 lakhs, between Rs 4 lakhs and Rs 7.5 lakhs; and above Rs 7.5 lakhs with differing interest rates for each slab.
  • Credila, an HDFC Ltd. Company, India’s first dedicated educational loan company, offers loan approvals before you secure admission. You can get loans up to Rs 2.5 crores.
  • Prodigy Finance offers competitive loans which does not need a co-signer or collateral. Students can start repaying six months after graduation, and there are no penalties for early repayment. You can also avail of their $10,000 scholarships, which is being given away this year to mark their decade of business.
  • GyanDhan, India’s first educational loans marketplace, offers 100 per cent financing for top B-Schools and engineering schools. They offer loans with collateral starting as low as 9.1 per cent.
  • Avanse Educational Loan covers 100 per cent of study abroad expenses on a floating interest of 12 per cent to 17 per cent.
  • Nationalised banks are offering a comparatively lower rate of interest between 9 per cent to 13 per cent on an average.
Asia

Seasoned Japanese startup puts fintech on the map with $ 500m IPO (Tech in Asia), Rated: AAA

Money Forward, a well-established financial tech startup, has launched its IPO, marking a watershed moment for Japan’s burgeoning fintech scene.

The firm, started in 2012, is now worth US$505 million after listing on the Mothers Index Futures section of the Tokyo Stock Exchange, which is designed for high-growth and emerging stocks.

The IPO raised approximately US$25 million.

MENA

Payday Loan Ranger Is Helping People Cover Gaps In Between Their Paychecks (MENAFN.com), Rated: A

Payday Loan Ranger is a loan service that specializes in providing loans from $50 to $1000.

Payday Loan Ranger’s popularity rises from the fact that it completely simplifies the process and never makes it as hectic and difficult as similar services. Their entire service is reduced down to three simple steps, applying online, searching for the best lenders, and then receiving the cash as early in the first 24 hours.

With over 2,000,000 applications already processed, it has become one of the most popular services used for such transactions and continues to rise in usage as it seems people are truly in need of such a novel service.

Caribbean

Why Bitcoin Will Not Solve the Caribbean’s Financial Inclusion Woes (CircleID), Rated: AAA

The issue of financial exclusion can be summarized into two categories: unbanked and underbanked. Unbanked individuals do not have an account at a regulated financial institution, while underbanked individuals have accounts, but frequently use alternative or unregulated financial services.

Unbanked individuals are faced with a heavy economic burden when conducting even the most basic financial transactions. For example, cashing a cheque can cost the average person with full-time employment as much as USD$20,000 over his/her lifetime. Western Union, as an example, charges as much as USD$42 to send a USD$500 remittance to Barbados. ‘Underground’ alternative financial service providers levy as much as USD$10 on every USD$100 transferred.

Another reason for unbanked individuals is attitudinal and behavioral; they really do not trust banks. This sentiment may not be all that unfounded, as a number of the banks across the Caribbean region have been reducing the teller services that unbanked individuals are familiar with and prefer, forcing more (non-technical) customers to online channels, regularly increasing service fees, and even worse, looking to divest their retail operations in favor of corporate banking and wealth management business units.

To obtain Bitcoin, you must already be “economically included” — both in terms of Internet and financial access.

Predatory businesses are convenient where the unbanked live. Rural areas like Trelawny, Jamaica or Mayaro, Trinidad are home to large swathes of unbanked households. Traditional banks don’t see a viable business cases for locating a branch or satellite office in such districts. This means that check cashing and money changing businesses that charge exorbitant rates are the only real means of conducting transactions. Kenya’s M-PESA succeeded because it leveraged an existing network of agents and vendors.

Globally, mobile banking is overtaking branch-centered activity more and more — for example, in Norway, 91% of the population use online banking channels. The explosion of fintech companies that are ‘unbundling’ traditional banking functions, added to the maturity of the first generation of Internet banking solutions, are hastening this trend. Consequently, the amalgamation of omni-channel banking, fintech platforms, and open APIs are obscuring the lines between traditional and alternative finance.

Moreover, besides remittances, financial inclusion also includes micro-credit, micro-insurance, cooperatives, peer-to-peer lending, rural/agricultural credit, mobile money, mobile vouchers, and a number of other alternative financial services. Financial inclusion is multi-faceted, and Bitcoin has yet to distinguish itself in any of the aforementioned categories.

The Caribbean region has serious online trust issues. In 2016, OAS and IDB published a report titled, ‘Cybersecurity: Are We Ready in Latin America and the Caribbean?’ Researchers conducted assessments of 13 Caribbean nations, including Bahamas, Barbados, Jamaica, and Trinidad & Tobago. The methodological framework covered ‘Culture & Society’, and one of the key findings was the extremely low levels of online trust in the region. Caribbean people do not trust that their online activities aren’t being monitored, they do not trust their service providers, they do not trust social networks, they do not trust their search engine provider, they do not trust companies to keep their personal data safe and secure, and most relevant — they do not trust online and mobile banking platforms.

Authors:

George Popescu
Allen Taylor