Friday January 13 2017, Daily News Digest

consumer credit

News Comments Today’s main news: dv01 – Experian enter partnership. Today’s main analysis: Equifax: 1.5M consumers to gain more credit access. Today’s thought-provoking articles: MLA tells Congress not to be an obstacle to FinTech. Chinese P2P platforms see decrease in overall risk. United States dv01, Experian collaborate on transparency in MPL. AT: “This looks like a […]

consumer credit

News Comments

United States

United Kingdom

China

India

Asia

Canada

United States

dv01 and Experian collaborate to bring additional transparency to marketplace lending (Yahoo! Finance), Rated: AAA

dv01, the reporting and analytics platform that brings transparency to lending markets, and Experian, the leading global information services company, today announced a strategic collaboration that will provide dv01 clients—including leading hedge funds, banks and asset managers—access to richer borrower credit attributes as they conduct performance analysis using dv01’s suite of built-in tools.

dv01 is in the process of mapping millions of borrower attributes from Experian’s database to installment loans in client portfolios. The Experian data is anonymized. which will allow dv01 clients to begin to isolate external trends that might affect their portfolios’ future performance or explain past behavior. Additionally, dv01 is acting as a data warehouse for select data sets that Experian offers investors for modeling purposes. By standardizing, streamlining and integrating these data sets into its platform, dv01 makes it easy for investors to model performance, as well as find fast answers around origination trends.

dv01 has aggregated performance data for more than $40 billion of loans from marketplace lenders including SoFi, Lending Club, Prosper, Marlette Funding, Avant, and CommonBond.

Equifax sees 1.5M consumers gaining more credit access (SubPrime), Rated: AAA

In what the credit bureau thinks can be positive for the auto finance space, Equifax highlighted that its December 2016 Consumer Credit Impact analysis found that trended credit data used alongside a consumer’s traditional credit report could improve access to credit and/or contract terms for up to 1.5 million consumers on an annual basis.

Analysts projected auto loans are expected to see the most significant impact with an anticipated 1.1 million more auto loans either being issued or receiving more favorable terms.

Equifax expects an increasing reliance on credit data insights like trended credit data particularly as some industries — like the auto finance sector — settle into what some analysts view as more of a post-recession norm.  For these finance companies, it will be vital to leverage as many insights about consumer debt behavior as possible to more confidently assess risk for a stable portfolio performance in support of a healthy loan marketplace, according to the credit bureau.

MLA to Congress: Please Ensure Fintech Can Flourish & Government is Not an Obstacle (Crowdfund Insider), Rated: A

The Marketplace Lending Association has called on Congress, and the incoming Trump Administration, to become a catalyst for Fintech innovation and not an obstacle.

In a letter addressed to House and Senate leaders, Nathaniel Hoopes, Executive Director of the MLA, asked Congress to move  away from an obstructionist approach and become a catalyst for financial innovation which benefits both consumers and businesses – most importantly smaller ones;

“…ensuring that America is a place where new ideas in finance can flourish and the federal government is a partner, rather than an obstacle, in promoting the innovation that will bring better products and services to all our citizens and businesses.”

The missive lists a serious (sic) of potential reforms including;

  • Reducing the burden of state and federal securities laws on retail investors who want to invest in small business loans. Creating a new category of security, a “crowdfunding debt security” or “marketplace debt security”.
  • Revisiting the current accredited investor requirements. Existing laws largely prohibit non-accredited investors from investing in a range of innovative financial products. Greater democracy in investing can help level the playing field at a time when inequality of opportunity in America remains a significant concern.
  • Recommending tax incentives to reduce the burden of student loans

Read the letter here.

LendingTree Launches $ 50,000 Small Business Grant Contest (Salem-News), Rated: A

Small business owners face a long list of challenges, and for many, the obstacle of securing financial resources needed to grow a business claims the top spot on the list.

That’s the driving force behind LendingTree’s inaugural $50,000 Small Business Grant Contest, where LendingTree will present the winning small business a $50,000 grant to help fund future growth.

Once the registration submission period closes (5:00pm EST on January 13, 2017), LendingTree’s team of small business experts will evaluate, select and notify the winning small business.

CSI Kick Start opens applications for fintech startup funding (Finextra), Rated: A

CSI Kick Start, Inc., a FinTech startup incubator founded by leading global payments innovator CSI globalVCard, today announced that its second annual application process for FinTech startup funding is now open.

Aspiring entrepreneurs seeking to radically transform key areas of B2B payments including virtual cards, FX, ACH, checks or security concerns may apply online. CSI Kick Start will be offering portfolio companies investments starting at $500,000, mentorship from an advisory board of industry experts, cross-selling opportunities and a host of additional resources.
Since CSI Kick Start first launched a year ago, all three of its funded startups have achieved significant success. Companies benefitting from CSI’s resources and mentorship include:
  • Yoke Payments is transforming the self-checkout and inventory management process and was awarded the Best POS Innovation by leading payments influencer PYMNTS.com earlier this year.
  • Delicious Nutritious Markets has installed its health-conscious markets in 75 business locations in 15 states since partnering with CSI.
  • Front Runner Films now has a full production crew and an impressive portfolio of award-winning corporate videos.
  • Spend Secure LLC makes controlling your mobile payments, travel expenses and accounts payable easy.

Marketplace Lending Association Announces 11 New Members (Yahoo! Finance), Rated: B

The Marketplace Lending Association (MLA) today announced the addition of eleven new companies to the Association. The new members join as the MLA works to expand its presence in Washington. The MLA was formed in 2016 by founding members Funding Circle, Lending Club, and Prosper Marketplace with the goal of promoting a transparent, efficient and customer-friendly financial system.

New Members include: Affirm, Upstart, CommonBond, Avant, PeerStreet, Marlette Funding, Sharestates, Able, and StreetShares. New Associate Members of the MLA include dv01 and LendIt.

This expansion represents a new chapter for the MLA, as it extends the group beyond consumer and small business lending to include platforms focused on student loan refinancing and real estate, as well as greater diversity of funding models, including lending platforms that hold loans on balance sheet.

United Kingdom

LendingCrowd prepares to launch IFISA (P2P Finance News), Rated: AAA

LENDINGCROWD has become the latest peer-to-peer lending platform preparing to offer an Innovative Finance ISA (IFISA) to investors.

Stuart Lunn (pictured), chief executive of LendingCrowd, said it plans to launch the tax-free wrapper around P2P investments during the first quarter of 2017.

Once approved, the LendingCrowd IFISA will work differently to the rest of the platform, so rather than investors selecting their own loans, the product will automatically allocate, invest and diversify a minimum of £1,000 and aim for a target rate of 6.5 per cent.

Buy-siders weigh virtues of P2P repo (Risk.net), Rated: A

  • Buy-siders are looking closely at peer-to-peer repo trading platforms as an alternative to bank-facilitated repo, which has come under strain in recent years due to regulation.
  • Elixium, the first peer-to-peer repo trading platform, is live and gaining interest from buy-side firms concerned about rising costs and shrinking capacity in repo markets. BNY Mellon is working towards launching a similar platform.
  • Doubts remain, though, about the long-term role of P2P given differences in the periods over which different buy-side firms typically wish to trade.

Inside The Daily Fitness Routines Of Branson, Zuckerberg And Other Time-Starved Founders (Forbes), Rated: B

A recent Funding Circle survey found that lots of entrepreneurs continue to struggle with getting exercise while maintaining an entrepreneur’s schedule.

  • More than 25% of small business owners say they don’t have time to do regular exercise.
  • Nearly 45 percent of respondents said they felt less stressed after a workout while 60 percent said that they generally felt better about themselves after exercising.
  • Over a four-week period, only 12.97 percent completed all of their planned workouts.
  • Two-thirds missed some or all of their planned workouts.
China

Chinese P2P platforms seeing decrease in overall risk (The Asset), Rated: AAA

Chinese P2P lenders are improving in quality as fewer platforms defaulted in 2016. According to a recent report from Diyiwangdai, a Chinese P2P company, 938 P2P platforms defaulted in 2016, 218 fewer than in 2015.

The Chinese P2P market is one of the largest in the world. The total transaction through Chinese P2P platforms in 2016 was 2.8 trillion yuan, 137.6% up from 2015. Ezubao, one of China’s highest-profile P2P lending sites, was involved in a $7.6 billion Ponzi scheme in early 2016.

China gets record bln in venture capital investment in 2016 despite global woes (Daily Mail), Rated: A

Megadeals in China helped bring a record $31 billion in venture capital investment into the country in 2016 despite a sluggish global economy and a sharp drop in the number of new deals, a report showed on Friday.

Venture capital investment in China rose 19 percent to account for around a quarter of the global total of $127 billion last year, even though the number of deals declined 42 percent to just 300, according to KPMG’s quarterly report on global VC trends.

China saw its two biggest deals for the year in the first half of 2016: $1.2 billion in funding for peer-to-peer lending platform Lufax and Apple’s $1 billion investment in taxi-hailing app Didi Chuxing.

Despite cautious investor sentiment shown in a 9.4 percent drop in global investment value and a 24 percent slide in deal count in 2016, average investments in China are getting bigger and bigger.

India

Loan Frame raises Rs 15 crore in seed round (India Times), Rated: A

Small and medium enterprise-focused online lending platform Loan Frame Technologies has raised a seed round of $2.25 million (about Rs 15 crore), the latest venture-backed transaction in the country’s web-based lending space.

The investors in the round include Parag Saxena, co-founder of Vedanta Capital, William Campbell, former chairman of Visa International and Toos Daruvala, co-chief executive of MIO Partners, an internal investment arm of global consultancy McKinsey and Co.

Asia

Indonesia issues new fintech law for lending firms (banking technology), Rated: A

The financial services authority (Otoritas Jasa Keuangan or OJK) of Indonesia has issued a new law affecting all fintech P2P lending firms in the country.

The new law stipulates that such business units must be registered and have the right licence to continue to do business.

Canada

Toronto ranks fourth in leading fintech centre of future (EconoTimes), Rated: AAA

The Toronto Financial Services Alliance (TFSA) and a leading U.K. think tank Z/Yen conducted a global survey on trends and innovations in financial services that ranked Toronto as one of the leading fintech centres in the world.

The survey titled ‘Trends and Innovations in Financial Services’ has listed the current leading fintech centres worldwide where London tops, followed by San Francisco, New York, Singapore, and Toronto. While in the list of leading fintech centres of the future, Toronto stands fourth after San Francisco, New York, and London.

The factors that make Toronto a leading fintech centre include very strong government support, low cost of accommodation, great cultural diversity and plenty of available capital.

Canadian Small Business Owners Enter the New Year with Optimism (The Province), Rated: A

A significant majority of Canadian small business owners (81%) are optimistic about growth opportunities heading into the new year, citing key resolutions for 2017 as increasing profitability (29%), acquiring more customers (26%), and increasing cash flow (24%), according to a survey* conducted by Leger, The Research Intelligence Group on behalf of OnDeck Canada, a leading online lender to small businesses in Canada.

The new survey results reveal that small business owners are savvy and specific about evaluating and obtaining capital in 2017.  49% of small business owners consider the total cost of the loan over time, 48% consider the annual interest rates, and 46% consider flexible repayment options as the main determining factors when selecting a lending option for their business. The majority expect a 2:1 return on investment.

Authors:

George Popescu
Allen Taylor