Thursday September 5 2019, Weekly News Digest

neobanks

News Comments Today’s main news: LendingPoint closes $178M personal loans securitization. OnDeck hits $879M in online financing in Texas alone. RateSetter adds three products. Funding Circle lenders face longer cash out waits. Yirendai files Form 6-K. Today’s main analysis: International P2P lending volumes for August 2019. Today’s thought-provoking articles: Silicon Valley is building a social […]

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

neobanks

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

LendingPoint : Closes $ 178 Million Personal Loans Securitization (MarketScreener), Rated: AAA

LendingPoint, the company revolutionizing and democratizing commerce, announced today that it closed its inaugural securitization of consumer loans. LendingPoint Receivables Trust 2019-1 (“LDPT 2019-1”) issued $177.85 million of notes backed by a pool of $187.22 million of direct-to-consumer loans originated on the LendingPoint platform.

The LendingPoint Receivables Trust securitization was rated by Kroll Bond Rating Agency, Inc. and includes $117.76 million of Class A notes rated “A-“, $24.74 million of Class B notes rated “BBB-“, $23.68 million of Class C notes rated “BB-” and $10.67 million of Class D notes rated “B-.” The notes priced at a blended yield of 4.05% per annum and provided for a 95% advance rate. The transaction has a 5% overcollateralization Deposit and a 5% overcollateralization Target. The risk adjusted yield of the receivables securing the notes is expected to be 13.14% per annum.

TyMac Electric Powers Business Success with Online Financing from OnDeck (PR Newswire), Rated: AAA

OnDeck today announced that TyMac Electric of Plano, Texas is its Small Business of the Month for August, 2019.  The 30-person company serves the Dallas-Fort Worth area with high-quality, professionally managed electrical services.

Over the last two years, OnDeck has provided additional financing to TyMac Electric as the business grew to meet demand in the Dallas-Fort Worth commercial marketplace.

Overall, OnDeck has provided more than $879 million in financing online to small business owners in the State of Texas.

2019’s Best & Worst Places to Retire (WalletHub), Rated: AAA

Best Retirement Cities

Overall Rank
(1 = Best)
City Total Score ‘Affordability’ Rank ‘Activities’ Rank ‘Quality of Life’ Rank ‘Health Care’ Rank
1 Orlando, FL 60.87 9 11 68 48
2 Tampa, FL 59.06 10 19 45 95
3 Scottsdale, AZ 58.35 98 22 3 58
4 Charleston, SC 58.30 42 21 56 51
5 Miami, FL 57.21 51 5 105 74
6 Denver, CO 57.08 113 17 43 17
7 Fort Lauderdale, FL 56.58 65 18 82 56
8 Cape Coral, FL 56.50 19 51 15 109
9 Minneapolis, MN 56.46 145 3 58 5
10 Cheyenne, WY 56.06 2 142 50 33

Source: WalletHub

Silicon Valley is building a Chinese-style social credit system (Fast Company), Rated: AAA

Have you heard about China’s social credit system? It’s a technology-enabled, surveillance-based nationwide program designed to nudge citizens toward better behavior. The ultimate goal is to “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step,” according to the Chinese government.

Many Westerners are disturbed by what they read about China’s social credit system. But such systems, it turns out, are not unique to China. A parallel system is developing in the United States, in part as the result of Silicon Valley and technology-industry user policies, and in part by surveillance of social media activity by private companies.

Fundrise Opportunity Zone Fund Has Raised Over $ 22 Million (Crowdfund Insider), Rated: A

Real estate investment platform Fundrise has raised over $22 million for their Opportunity Fund. The information was revealed in a recent Form D 5o6c filing with the Securities and Exchange Commission (SEC).

Kabbage acquires Radius Intelligence, the marketing tech firm with a database of 20M small businesses (TechCrunch), Rated: A

Data is the new oil, as the saying goes, and today Kabbage — a fintech startup backed by SoftBank that has built a business around lending up to $250,000 to small and medium enterprises, using AI-based algorithms to help determine the terms of the loan — is picking up an asset to expand its own data trove as it looks to expand into further SMB financial services. The company has acquired Radius Intelligence, the marketing technology firm that has built a database of information on some 20 million small and medium businesses in the U.S.

Here is a list of the top nonbank and alternative lenders in 2019 (Business Insider), Rated: A

Nonbanks and alternative lenders have garnered attention in the banking industry due to their ability to partner with legacy banks and utilize technology to make financial transactions more efficient and convenient for users.

Source: Business Insider

Chime now has 5 million customers and introduces overdraft alternative (TechCrunch), Rated: A

Challenger bank Chime has reached 5 million customers in the U.S. The San Francisco-based startup is creating an FDIC-insured mobile bank without any physical branch. The company also promises fewer fees.

Back in March, Chime  said it had 3 million customers when it announced its $200 million Series D round. So that’s 2 million additional customers in roughly 5 months.

Zac Prince of BlockFi (Lend Academy), Rated: A

Even Financial raises $ 25 million to connect banks with channel partners (VentureBeat), Rated: A

Even Financial, a four-year-old New York-based provider of APIs for financial services search, acquisition, and monetization, today announced that it’s raised $25 million in a strategic round of investment co-led by Citi Ventures and MassMutual Ventures, with additional participation from LendingClub. Existing backers American Express Ventures, Canaan Partners, F-Prime Capital, GreatPoint Ventures, and Goldman Sachs also participated in the round, which brings the company’s total raised to $50 million.

Credit Sesame, a platform for managing loans and credit scores, picks up $ 43M en route to IPO (TechCrunch), Rated: A

Credit Sesame — which lets consumers check their credit scores and evaluate options to rebalance existing debts and loans to improve that score and thus their overall “financial health,” in the words of CEO and founder Adrian Nazari — has raised $43 million. With the company already profitable and growing revenues 90% each year for the last five, Nazari said that this round is likely to be the last round the company raises before it goes public.

Household debt in the U.S. continues to rise and as of this year now stands at nearly $14 trillion.

Fintech startup CrowdBureau closes $ 1.1 million Series A equity funding with $ 9.7M valuation (Tech Startups), Rated: A

CrowdBureau Corporation, a fintech startup and index provider, has closed $1.1 million Series A equity funding to expand its series of benchmarks and launch a pilot program for its patent-pending regulatory technology product. The round, which values the company at $9.7 million, was led by Clydagh Limited, Estuary Holdings Ltd. and Alpama Limited along with existing investors.

Some Companies Offer a New Benefit: Payroll Advances and Loans (WSJ), Rated: A

A growing number of companies are helping workers gain access to payroll advances and loans, reflecting concern over the impact money problems are having on productivity levels and worker retention.

Employers including Walmart Inc. and Pima County, Ariz., have recently added these services. The aim is to help cash-strapped employees, many with damaged credit, cover unexpected expenses without resorting to high-cost debt.

Lendingblock Launches Institutional Crypto Lending Platform (Lendingblock), Rated: A

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the launch of its institutional lending platform on September 3, 2019. The lending product, which is a reinvented version of securities lending from traditional capital markets, is the first exchange fully dedicated to pure crypto lending and aims to support the needs of the broader cryptocurrency market by providing a secure and liquid venue for lending and borrowing needs of institutional market participants.

Upon launch, Lendingblock platform users will be able to borrow and lend BTC, ETH, PAX and USDT on a fully collateralized basis, for loan terms of 1, 7, 14 and 30 days, with a minimum trade size of $100,000 equivalent of a specified digital asset.

How American Express uses machine learning to detect fraud (American Banker), Rated: A


A financial planner says there’s a ‘huge opportunity’ to build wealth during a recession (Business Insider), Rated: A

As long as you have a cash safety net to fall back on should you lose your job or face an unexpected expense, there’s little reason to panic, says Lauren Anastasio, a certified financial planner at SoFi, a personal-finance company.

Are P2P Loans A Viable Investment for Your Portfolio? (Yahoo! Finance), Rated: A

Peer to peer (P2P) loans allow you to act as a bank, providing loans directly to other individuals or businesses in exchange for a return on your investment via interest payments. Investing in P2P loans, which are typically smaller than a traditional bank loan, has proven to be reliable no matter the economic climate.

Judge Rejects States’ Fintech Charter Challenge, Again (Bloomberg Law), Rated: A

The Office of the Comptroller of the Currency was able to beat back a challenge by state regulators to its proposed charter for financial technology firms for a second time, but the charter remains in limbo due to other litigation.

White Oak Global Advisors Announces Commercial Property Assessed Clean Energy (PACE) Financing Program (GlobeNewswire), Rated: B

White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the California Statewide Communities Development Authority (“CSCDA”) has named White Oak as a commercial PACE Program Administrator for the CSCDA’s Open PACE Program.  As a Program Administrator, White Oak will provide up to 100% financing for energy efficiency, renewable energy, water conservation, and seismic retrofit projects on commercial real estate.

White Oak is seeking to fund projects ranging in size from $500,000 to $150 million.

United Kingdom

RateSetter revamps investment products (P2P Finance News), Rated: AAA

RATESETTER is rejigging its investment products, to boost liquidity and give the peer-to-peer lender more control over market rates.

The three new products, which will be available on 3 October, will be called Access, Plus and Max. Access will offer three per cent interest and no fees to access money; Plus will offer four per cent interest and cost 30 days’ interest to access money; and Max will offer a five per cent interest rate, with a fee of 90 days’ interest to access money.

Funding Circle Amateur Lenders Facing Longer Waits To Cash Out (Morningstar), Rated: AAA

Amateur lenders on peer-to-peer lending platform Funding Circle Holdings PLC are facing waits of 100 days to cash out of their loans, it has emerged.

Investors who provide funding for small businesses through the platform can list old loans for resale to other investors if they wish to withdraw all their money.

But the PA news agency understands that the amount of time taken to re-sell the loan parts has risen from just a few days in January to up to three months in recent transactions.

Funding Circle reveals inclusion in FTSE4Good Index Series (Funding Circle), Rated: A

Funding Circle today reveals its inclusion in the FTSE4Good Index Series, which recognises companies that demonstrate the highest standards of corporate governance and sustainability.

Woodford trust is on the FTSE 250 casualty list (The Times), Rated: B

The investment trust, which focuses on early-stage companies, was one of six companies to be relegated from the second tier of quoted stocks.

Among them is Funding Circle, the online peer-to-peer lender aimed at small and medium-sized companies, which floated at 440p a year ago. Last night its shares closed at 110¼p.

P2PGI blames writedowns and Funding Circle bad debts for poor July (P2P Finance News), Rated: A

P2P GLOBAL Investments has blamed writedowns in the value of two equity stakes and bad debts from Funding Circle for a “disappointing” performance in July.

The alternative finance-focused investment trust delivered a 0.33 per cent NAV return for the month of July, down from 0.48 per cent the previous month. This brought the trust’s year to date return to 2.88 per cent, and 23.93 per cent since inception.

Investors ‘nearly’ double IFISA holdings (AltFi), Rated: A

Small investors have parked £588m across 40,400 accounts by the end of the second quarter of this year, according to trade body the Peer-to-Peer Finance Association (P2PFA).

The compares with around £300m invested in this product 12 months ago across major platforms such as Funding Circle, Ratesetter, Zopa, said the trade body.

Lending Works targets profitability and £10m turnover in 2019 (P2P Finance News), Rated: A

The peer-to-peer consumer lender reported a loss of just over £2.1m for the year ended 31 December 2018, up from £1.41m the previous year, which chief executive Nick Harding (pictured) attributed to a larger wage bill.

There is no requirement for businesses to report revenues in small company accounts, but Harding revealed that the firm saw revenues rise to £6.2m last year and is targeting £10m this year.

Peer to Peer Lender Folk2Folk Tops £300 Million in Lending (Crowdfund Insider), Rated: A

Folk2Folk, a peer-to-peer lender for local, rural and SME businesses, has now surpassed £300 million in lending, according to a company release. Folk2Folk notes that it is the 3rd largest P2P Lender to UK businesses in terms of money lent.

P2PFA boss Paul Smee: ‘Lendy was an outlier that should not have been authorised’ (AltFi), Rated: A

The collapse of Portsmouth-based property peer-to-peer firm Lendy, with outstanding loans of more than £160m, and some £90m in default, prompted the new rules from the FCA. The watchdog is also carrying out an in-depth report into the firm’s failure, which affected with some 21,500 investors. Critics argue that Lendy under competitive pressure wrote poor quality loans to swell its balance sheet, which then turned bad.

However, the Lendy crash, taken together with the poor float of the sector’s biggest firm Funding Circle last October, which languishes 75 per cent below its 440p float price at around 112p this week, has tarnished the sector.

UK Fintech Curve fastest startup ever to reach £4m Crowdfunding on Crowdcube (Fintech Finance), Rated: B

Last month, Curve announced plans to launch a seven figure crowdfunding campaign for early September, with plans to raise £1million. However, just 42 Minutes after launching to pre-registered customers, Curve had raised four times that figure, breaking records in the process. The current overfunding amount stands at £5million.

China

Form 6-K Yirendai Ltd. For: Sep 30 (Street Insider), Rated: AAA

  • Cumulative number of investors served reached 2,185,513, representing an increase of 1% from 2,159,490 in the first quarter of 2019 and compared to 1,974,984 in the second quarter of 2018.
  • Number of active investors in the second quarter of 2019 was 671,957, representing a decrease of 13% from 768,514 in the first quarter of 2019 and compared to 928,251 in the second quarter of 2018.
  • Total assets under management (“AUM”) for Yiren Wealth was RMB 43,604.2 million (US$ 6,351.7 million) as of June 30, 2019, representing a decrease of 7% from RMB 46,663.1 million as of March 31, 2019. Average AUM per investor reached RMB 149,480 (US$ 21,774) as of June 30, 2019, representing an increase of 7% from RMB 139,473 as of March 31, 2019.
  • AUM of non-P2P products amounted to RMB 354.3 million (US$ 51.6 million) in the second quarter of 2019, representing a decrease of 23% from RMB 457.7 million in the first quarter of 2019 and compared to RMB 951.0 million in the second quarter of 2018. Non-P2P products include money market funds, mutual funds and insurance.

Consumer Credit—Yiren Credit

  • Total loan originations in the second quarter of 2019 reached RMB 9.7 billion (US$1.4 billion), representing a decrease of 12% from RMB 10.9 billion in the first quarter of 2019 and compared to RMB 18.2 billion in the second quarter of 2018.
  • Cumulative number of borrowers served reached 4,491,466, representing an increase of 2% from 4,404,812 in the first quarter of 2019 and compared to 4,027,254 in the second quarter of 2018.
  • Number of borrowers in the second quarter of 2019 was 135,246, representing a decrease of 10% from 149,715 in the first quarter of 2019 and compared to 267,628 in the second quarter of 2018.
  • The percentage of loan volume generated by repeat borrowers was 35.9% in the second quarter of 2019.
  • 52.5% of loan originations were generated online in the second quarter of 2019.
  • Remaining principal of performing loans reached RMB 58,071.3 million (US$8,459.0 million) as of June 30, 2019, representing a decrease of 8% from RMB 63,213.8 million as of March 31, 2019.

Yirendai Ltd. (YRD) Q2 2019 Earnings Call Transcript (The Motley Fool), Rated: AAA

As of September 2019, the line of credit we have obtained from our institutional partners has increased from RMB19 billion in Q1 2019 to close to RMB30 billion. We are now working with approximately 10 partners, including leading joint stock and city commercial banks. We expect loan origination funded by institutional partners to reach approximately 30% by the end of this year.

China Rapid Finance Retains China Merchants Bank New York and Pangaea Finance as Co-Financial Advisors for Recapitalization and Restructuring (Yahoo! Finance), Rated: AAA

China Rapid Finance Limited (XRF) (the “Company”) today announced that its Board of Directors has retained China Merchants Bank Co., Ltd., New York Branch (CMBNY), and Pangaea Finance as separate Co-Financial Advisors, and Pangaea Finance as Structuring Agent, to advise it for strategic alternatives, including but not limited to potential strategic partnerships, recapitalization of certain operating companies, and for a related reconfiguration of the Cayman company as a listed investment vehicle for China credit.

Central bank to include troubled P2P lending industry in credit system (Technode), Rated: A

China’s central bank will include the country’s troubled online peer-to-peer (P2P) lending platforms in its credit reference system as the clampdown on illegal financial services continues, Chinese state-run media reported on Wednesday.

China’s credit system to cover P2P lending in tightening regulation (Xinhua), Rated: A

P2P lending platforms in operation will provide certain information such as online lending interest rates to credit reference agencies such as operators of financial credit information basic databases and Baihang Credit, China’s only licensed and market-oriented personal credit agency, according to an official guideline.

China Central Bank’s Credit System to include P2P Lending Platforms amidst tightening regulations (China Knowledge), Rated: A

Credit information of P2P lending platforms will be collected, regardless of their operational status. New penalties will also be imposed on defaulting borrowers of P2P online lending. Some of the penalties include higher loan interest rates and restriction limits to loan and insurance services.

Chinese entrepreneur among 41 arrested over illegal P2P platform (CGTN), Rated: A

Property mogul and founder of a leading Shanghai contemporary art museum Dai Zhikang has turned himself into police following the collapse of a peer-to-peer lending platform, as China continues to crackdown on illegal online lending.

Shanghai police confirmed Monday that Dai, the founder and head of Zendai Group, was among 41 people being investigated over illegal fundraising through an online P2P platform called Laocaibao.

European Union

Revolut is looking to hire 400 customer support staff following compliance complaints (Business Insider), Rated: AAA

Revolut is looking to hire up to 400 staff at a new base in Portugal, a move that will increase its employee headcount by almost a third.

Source: Business Insider

German online bank N26 expands to Switzerland (Verdict), Rated: A

German online bank N26 has launched its services in Switzerland, as it continues to build up its footprint across the globe.

Binance Crypto Lending Program expansion – a bad idea for traders (FX Street), Rated: A

Binance is one of the latest entries in launching its crypto lending platform on August 28. In the first phase, it began with a short period fixed return on Binance (BNB), USDT (Tether) and Ethereum Classic (ETC). It provides an annual return of 15%, 10%, and 7% respectively, beginning with a 14-Day fixed period. Binance starts with about $30 million in crypto-lending. Moreover, the annual interest offered is higher than the return from banks.

International

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

Milestones in culumulative volume lent crossed this month:

  • Bondora: 250M EUR
  • Fellow Finance: 500M EUR
  • Mintos: 3000M EUR
  • Thincats: 500M GBP

The total volume for the reported marketplaces in the table adds up to 634 million Euro. I track the development of p2p lending volumes for many markets.

Source: P2P-Banking

Fall Conference Season for Fintech Kicks Into Gear This Month (Lend Academy), Rated: AAA

ABS East

When: Sept 22-24, 2019
Where: Miami, FL
Link:  /> Discount code: LEND10

Lend360

When: Sept 25-27, 2019
Where: Dallas, TX
Link: 

LendIt Fintech Europe

When: Sept 26-27, 2019
Where: London, UK
Link: 
/> Discount code: LENDACADEMYVIP

Moneyconf

When: Nov 4-7, 2019
Where: Lisbon, Portugal
Link: 

Money2020 China

When: Dec 4-6, 2019
Where: Hangzhou, China
Link: 

I WISH I’D BOUGHT IT WITH KLARNA (The Drum), Rated: B

The Swedish ‘pay later’ service, Klarna has launched its first international campaign – ‘I wish I’d bought it with Klarna’ – with the internet sensation Celesta Barber as its leading lady.

Australia

Ethereum lossless lottery PoolTogether is still innately flawed despite updates (finder), Rated: A

How do you encourage people to practice responsible saving? Easy. You shake it up with a dose of randomness and call it a lottery instead. This is the basic principle behind Pool Together, a lossless lottery designed in such a way that there are no losers. The idea is that everyone always gets back the price of their ticket, but one lucky person walks away with a lot more than that.

Pool Together is built on Ethereum, and utilises the Dai stablecoin in combination with the Compound crypto lending system.

India

Online lender Namaste Credit launches digital-only bank (Finextra), Rated: AAA

Online lending marketplace Namaste Credit today said that it is launching its Neobanking solutions for MSMEs, becoming a full-fledged “Digital-Only Bank” with a foundational SaaS play.

IndiaMoneyMart opens the first East-India branch for NBFC-P2P Lending (United News of India), Rated: A

Making sense of regulatory sandbox for Fintech startups (Vantage Asia), Rated: A

Over the past few years India has seen rapid development in the financial technology sector and it has the second highest number of Fintech startups in the world. According to certain estimates, India’s Fintech sector added about 1,300 startups from 2015 to 2018. According to the National Association of Software and Services Companies, India’s Fintech market is expected to be worth US$2.4 billion by 2020.

India Government Panel Pushes for Fintech, Regtech Adoption (Regulation Asia), Rated: A

The panel has also proposed the development of a marketplace model for P2P lending, and the introduction of virtual banking in India.

Why fintech panel believes P2P platforms can ease credit supply (India Times), Rated: A

While the importance of P2P lending sector in India is understood by all stakeholders, and a lot has been done over the last few years to encourage the sector, a lot more needs to be done to accelerate its growth.

APAC

Leading Southeast Asian Peer to Peer Lender Funding Societies Revamps with New Executive Team (Crowdfund Insider), Rated: AAA

Funding Societies, one of the largest peer-to-peer (P2P) lending platforms in Southeast Asia, has revamped its executive team with new hires.

Matt Lambie joins as the Chief Technical Officer, Dheeraj Chowdhry as the Chief Executive Officer and Jared Goldberg as the Chief Data Officer.

Top 10 APAC Startups Reigning the Future Finance Industry (Banking CIO Outlook), Rated: A

Africa

AlphaCode of South Africa Invests $ 1.5 Million in Three Domestic Fintech Startups (CryptoNewsZ), Rated: AAA

AlphaCode is the incubation and investment arm of Rand Merchant Investment Holdings, and in a new development, the company has decided to invest a combined $1.5 million in three separate Fintech startups in South Africa. The companies in question are Zande Africa, which is a platform meant for merchant finance, while the others are Bright On Capital, a peer to peer lending firm and Livestock Wealth, an agricultural investment startup. AlphaCode invested $655,000 each on Bright On Capital and Zande Africa, while Livestock Wealth got an injection of $131, 000.

Authors:

George Popescu
Allen Taylor

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

Thursday July 18 2019, Weekly News Digest

Digital-only banks U.S.

News Comments Today’s main news: N26 raises $170M at $3.5B valuation for U.S. launch. OnDeck, Upserve partner on restaurant financing. Quicken Loans has best quarter in history. Curve raises $55M at $25M valuation. Lufax to bow out of P2P lending. Goldman funds Lendable. Today’s main analysis: Is America ready for challenger banks? (A MUST-READ) Today’s […]

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

Digital-only banks U.S.

News Comments

United States

United Kingdom

China

Other

News Summary

United States

Thiel-Backed Bank Valued at $ 3.5 Billion Amid U.S. Launch (Bloomberg), Rated: AAA

A German smartphone bank backed by billionaires Peter Thiel and Li Ka-shing has raised new funds at a valuation of $3.5 billion, making the company one of Europe’s highest valued non-listed fintech firms.

N26 GmbH extended its Series D funding round by $170 million to a total $470 million, the Berlin-based company said on Thursday.

OnDeck And Upserve Partner To Speed Financing To Restaurants (Yahoo! Finance), Rated: AAA

OnDeck (ONDK) and Upserve today announced a partnership to provide Upserve’s restaurant customers with online financing options from OnDeck. Over 10,000 restaurants currently use Upserve’s restaurant management platform and Point of Sales (POS) software to manage relationships with more than 57 million active diners.

Quicken Loans Has Best Quarter in Company’s 34-Year History (PR Newswire), Rated: AAA

Detroit-based Quicken Loans, America’s largest mortgage lender, today announced that the second quarter of 2019 was the best in the 34-year-old company’s history.

The second quarter of the year was the first three times the company has originated more than $10 billion in a single month, with each month setting a new record for the highest closed loan volume – culminating in June being the best month in Quicken Loans history. In June, the company closed nearly $11 billion in mortgage volume, contributing to the $32 billionoriginated for the quarter.

Over 57% of Purchase Borrowers Received Mortgage Rates Under 4.25% Last Week (LendingTree), Rated: AAA

Mortgage Rate Distribution

  • For 30-year, fixed-rate mortgages, approximately 56.8% of purchase borrowers received offers of 4.25% or less. That is down from 60.1% of borrowers the previous week. A year ago, 0.07% of offers were under 4.25%.
  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, 4.0% was the most common interest rate. This rate was offered to 15.4% of borrowers.
  • Of 30-year, fixed-rate mortgage refinance borrowers, 70.6% received offers of 4.25% or less, which is down from 72.8% the previous week. A year ago, no refinance offers were under 4.25%.
  • Across all 30-year, fixed-rate mortgage refinance applications, the most common interest rate was 4.0%, offered to 17.95% of borrowers.

Mortgage Rate Competition Index

  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, the index was 0.99, down from 1.19 the previous week.
  • How big of a deal is it to get a mortgage APR that’s 0.99 percentage points lower than the competition? Over 30 years, that could translate to $47,073 in savings on a $300,000 loan (see Mortgage Savings Tracker graphic below).
  • The index was wider in the refinance market at 1.10, down from 1.35 the previous week. Refinance borrowers could have saved $52,554 by shopping for the lowest rate.

Rate Cuts; Digital Banks (PeerIQ), Rated: AAA

Source: PeerIQ, WSJ

Digital Banks – The Future of FinTech Lending?

FinTechs lenders meanwhile are white-labelling banking services to complete the customer product roadmap while awaiting a charter. SoFi Money, WSFS, Radius Bank and its deposit partnerships with FinTechs are great examples of this.

This week, Boston-based Radius Bank is looking to adopt the user-friendly style set forth by the aforementioned European banks.

European Challenger Banks Launch U.S. Invasion – Is America Ready? (The Financial Brand), Rated: AAA

At a time when U.S. consumers are increasingly becoming comfortable with branchless banking and alternative financial providers, is there room for alternative digital-only banks with zero name recognition? Recent announcements by Germany-based N26 and U.K.-based Monzo that they will be entering the highly competitive U.S. in the next few months will provide a good test of the viability of foreign-based banking competition.

N26 Invites 100,000 Wait-Listed U.S. Consumers To Open Accounts

According to N26, there will be a staged rollout beginning immediately, with the 100,000 people on the U.S. wait list being invited to sign up and have full access to the product.

Is Monzo the ‘Bank of the Future’?

Referring to itself as the “bank of the future,” Monzo has also begun marketing efforts in the U.S., hoping to disrupt the traditional banks and credit unions in a way similar to what they have done in the U.K. Valued at more than $1 billion, Monzo has a mobile-only customer base in the U.K. of 2.2 million customers.

Varo files application for bank charter that will differentiate it (Business Insider), Rated: A

Challenger bank Varo, which has raised $179 million from Warburg Pincus and TPG, just took a big step that might separate it from competitors like Chime and Monzo.

In the past year Varo has tripled its customer base and is expected to reach 750,000 registered customers this month, Walsh said.

Moven’s Plan B after buyout bid stalls: Expansion into lending (American Banker), Rated: A

Obstacles remain in Moven’s path to a charter in the U.S., even as its private-label banking offering expands across Africa and Asia.

JPMorgan Chase’s Dimon: Finn app was not a failure (bank innovation), Rated: A

Specifically, Dimon said the bank learned how to conduct digital account openings through Finn and that the process was shaved down to just a few minutes. CFO Jennifer Piepszak added that 25% of new account openings at Chase are now digital signups rather than through a bank branch. The bank reported it has opened 2 million accounts digitally.

The bank had pulled the plug on the digital-only offering in June, just a year after its launch, and rolled some of Finn’s most popular features into Chase’s main mobile banking app.

JPMorgan warns that lending income will fall in the second half (American Banker), Rated: A

The largest U.S. bank on Tuesday reported a drop in bond trading and cut its full-year outlook for net interest income — revenue from customers’ loan payments minus what the bank pays depositors — by $500 million. NII accounted for about half the New York-based company’s revenue last year.

Navient plans full-Earnest loan pool in $ 535.2M student-loan ABS (Asset Securitization Report), Rated: A

Navient Solution’s next securitization of private student-loan refinancing will involve only loans primarily issued to advanced-degree professionals by online lender Earnest – which Navient acquired in 2017.

The $535.2 million Navient Private Education Refi Loan Trust 2019-E will include two tranches of Class A notes with preliminary triple-A ratings from DBRS and S&P Global Ratings. The Class A-1 fixed-rate notes total $263 million, while the $228 million in Class A-2 notes will be divided into fixed- and variable-rate tranches.

Technology’s Inescapable Impact on Real Estate Investments – (MarketCurrents Wealth Management), Rated: A

Research-driven, professional investments in real estate have traditionally been reserved for family offices and institutional investors. Now, a swathe of new technology platforms and consumer products are revolutionizing the industry, opening up access and shifting valuations.

Millennials say real estate investing is one of the best ways to build wealth (Business Insider), Rated: A

According to a new survey from Bankrate, over one-third of millennials say real estate is the best way to invest money they won’t need for at least 10 years, more than the share of millennials surveyed who prefer stocks, savings accounts and certificates of deposit (CDs), gold, bonds, and cryptocurrency.

Real Estate Investing in a “1-Click” World (Propmodo), Rated: A

The plain truth is that there will never been such a thing as “Amazon 1-Click for real estate.” The end-to-end logistics solution for buying and managing property has not yet been perfected. Whilst there are a lot of great technology solutions being developed for the property industry they typically tackle just one or two specific pain points in a broader transaction. In isolation, these solutions have less impact on the overall customer experience because their piece is just one of a much larger puzzle. As an example, there’s not much point streamlining the purchase itself if the legal documents and mortgage approval take weeks of frustrating back-and-forth, duplicating much of the same process and paperwork.

Krista Morgan of P2Binvestor Overcomes Naysayers To Fund Growing Small Businesses (Forbes), Rated: A

With all the attention given to angel and venture capital, you might think that these financing options are the most likely to be used. To the contrary, debt is by far the dominant form of outside funding used: for example, 86% of $1 — $10 million companies seeking outside financing applied for a loan compared to 5% seeking equity financing, according to The 2018 Small Business Credit Survey.

However, since the late 1990s, as banks have consolidated and sought out more profitable sectors of the credit market, they have been shifting activity away from the small business credit market, according to Why Small Business Lending Isn’t What It Used to Be.

Lendbuzz, AI Auto Startup That Steps in When FICO Fails, Raises $ 150M (Xconomy), Rated: A

The Boston-based software company announced Monday it has raised $150 million in new funding to expand its team and issue more financing backed by its machine learning algorithms.

Most of the cash—$130 million—for Lendbuzz is in the form of debt financing from four banks and an insurance company to fund car loans through the startup’s platform. The rest is an equity investment led by venture capital investor 83North.

Soros, Innovation Endeavors Provide Fresh Funding for AlphaSense (Institutional Investor), Rated: A

AlphaSense has attracted $50 million from investors including Soros Fund Management and Innovation Endeavors, in a fresh round of funding that will help the company expand its artificial-intelligence-powered offering for asset managers.

House Democrats draft bill to keep big tech out of financial services (Yahoo! Finance), Rated: A

According to the draft bill, titled “Keep Big Tech Out Of Finance Act,” companies in violation would face a $1 million daily fine.

The legislation would apply to companies with $25 billion or more in annual revenue.

As the draft stands now, it would prohibit Facebook (FB) and other tech companies with at least $25 billion in revenue from becoming a financial institution or issuing a cryptocurrency.

San Jose payday-advance startup faces racial discrimination, retaliation lawsuit (The Mercury News), Rated: A

A former manager at PayActiv, a San Jose startup that provides payday advances, is accusing the company of racial discrimination and questionable business practices.

Ibarra said in his lawsuit that he was the only Hispanic employee when he was hired in 2014, the year the company was founded. The co-founders are of Pakistani descent, the suit said.

Pedro Ibarra said he was fired because he complained about being harassed by the company’s founders over his ethnicity, and because he raised concerns about PayActiv’s handling of user data and whether the company is acting like a regular payday lender and therefore should be classified as a creditor.

New apps competing for your money can have hidden costs (ABC Action News), Rated: A

A new crop of digital wallets, apps and financial tech companies are fighting for customers’ banking business. The push comes as federal data shows the Tampa Bay region hit a six-year high for the number of people living without banking accounts or easy access to credit.

CrediVia Brings New Experience to Multifamily Financing (BusinessWire), Rated: A

CrediVia launched last fall as a hospitality financing marketplace intent on driving smarter decisions and stronger engagement in the loan process. Today the company has announced expanded platform capabilities to execute multifamilydeals as well, part of its ongoing mission to become the preferred source for more effective and transparent commercial real estate lending.

SEC Posts Final Judgement in Enforcement Action Against Founders of iFunding (Crowdfund Insider), Rated: A

The Securities and Exchange Commission (SEC) has posted final judgments in the case of real estate crowdfunding platform iFunding and co-founders William Skelley and Sohin Shah.  The two founders were charged last year by the SEC Enforcement Division regarding allegations of fraud in the misappropriation of over $1.17 million from investors. The final judgments against Skelley and Shah were obtained this month.

Lending Express evolves into Become (Become email), Rated: B

Lending Express has rebranded to This transition comes at a pivotal point in the company’s growth and highlights its dedication to providing businesses withopportunities to improvfundabilitysecure funding, and ultimately become more.

Cross River Names Global Finance Veteran Melissa Ballenger As CFO (Yahoo! Finance), Rated: B

Cross River Bank (“Cross River”) today announced that it has appointed Melissa Ballenger as its Executive Vice President and Chief Financial Officer, effective immediately.

SecurCapital Acquires Breakout Capital Finance’s Lending Business (PR Newswire), Rated: B

SecurCapital Corp, an expanding supply chain and financial services provider headquartered in California, today announced the acquisition of the lending business of Breakout Capital Finance, a fintech company and nationwide small business lender. SecurCapital is also providing additional equity capital to drive growth in Breakout Capital Finance’s two primary lending products: its highly regarded and innovative term-loan product and its FactorAdvantage lending solution for small businesses that utilize factoring to finance their business. The acquired lending business assets will be operated by a subsidiary of SecurCapital that will conduct business as Breakout Capital.

CheapAir.com Expands “Travel Now, Pay Later” Option (Yahoo! Finance), Rated: B

Online travel agency CheapAir.com today announced an expansion of its travel budgeting tool in partnership with Affirm, giving customers the opportunity to prequalify for a travel budget and then book and pay for all elements of their trip over time.

Sokolov-Miller Family Center again recognized as leader in financial education (PSU), Rated: B

Each year the online loan marketplace LendEDU ranks programs based on its 50-point scale. This year, the Sokolov-Miller Family Center moved up two positions, tying for 13th place.

Community Capital Appoints New Board Member, Camden R. Fine (Yahoo! Finance), Rated: B

Community Capital Technology Inc. (“CCT”), a digital loan transaction marketplace for community banks, regional banks, and other non-bank originators and credit investors, today announced the appointment of Camden (“Cam”) R. Fine, former President & CEO of the Independent Community Bankers Association (ICBA), to its Board of Directors.

United Kingdom

Curve raises $ 55M at a $ 250M valuation (TechCrunch), Rated: AAA

Curve, the London-based “over-the-top banking platform,” has raised $55 million in new funding. The startup lets you consolidate all of your bank cards into a single Curve  card and app to make it easier to manage your spending and access other benefits.

Curve’s Series B round is led by Gauss Ventures, the London-HQ’d fintech investor, alongside Creditease, IDC Ventures and previous backer Outward VC (formerly Investec’s INVC fund).

What will the appropriateness test actually look like? (P2P Finance News), Rated: AAA

IT’S OFFICIAL – the Financial Conduct Authority (FCA) will soon make it mandatory for all peer-to-peer platforms to introduce an “appropriateness test” for new investors.

The purpose of the test will be to weed out any unsuitable lenders, and any potential lenders who do not fully understand the risks associated with P2P.

Uber, Lyft share prices: as tech IPOs disappoint, how can investors spot winners? (CMC Markets), Rated: AAA

Funding Circle [FCH], an online lending platform that enables individuals and companies to lend to small businesses, is the latest example of a hyped IPO from a business yet to turn a profit. A few lacklustre earnings announcements later, it appears the stock was indeed overvalued.

What metrics can traders look out for when weighing up a stock amid such an increasing amount of cash-burning companies looking to go public?

Lendy administrator outlines the state of collapsed P2P lender’s loanbook (P2P Finance News), Rated: A

LENDY investors are likely to receive an average of 57p on the pound for development finance and 58p for every pound from bridging loans funded on the collapsed peer-to-peer lending platform.

The document shows that 22 of the 29 bridging loans made via the platform are in insolvency proceedings, with 14 out of 25 development loans in the same situation.

The document reveals the outstanding value of the bridging loans is £36m, secured against assets historically valued at £81m.

Rishi Khosla of OakNorth (Lend Academy), Rated: A

In this podcast you will learn:

  • The incident that was the seed of the idea for OakNorth.
  • Why fast growth companies have trouble raising debt capital.
  • The range of loan sizes, terms and interest rates that OakNorth offers.
  • Why they started with building a tech platform first.
  • How their underwriting process works and what they have automated.
  • Rishi’s thoughts on defaults and his famous “zero defaults to date” quote.
  • How they are funding their loans in the UK.
  • Why the US is a core market for OakNorth’s international expansion.
  • Who they are offering the platform to in the US.
  • Why the “ai” in Oaknorth.ai stands for analytical intelligence.
  • The geographies where they are live today.
  • Why they will not be getting a banking license in markets outside the UK.
  • Why OakNorth launched a mortgage product for UK entrepreneurs.
  • How SoftBank is helping OakNorth beyond providing capital.
  • How OakNorth is attacking the Chinese market.
  • How Rishi is spending his time these days.

OAKNORTH LENDS £19.5M TO CARE CONCERN GROUP TO SUPPORT ALPHA REAL CAPITAL OPERATING CARE HOMES (Business Leader), Rated: B

OakNorth Bank has provided a £19.5m loan to Care Concern Group, a UK-based care home operator.

$ 2.9 Billion in Deals in 2019 on Track to Top Year Prior (Crowdfund Insider), Rated: A

Innovate Finance has just published its Q2 UK Fintech investment report tallying activity for the first half of 2019.

The most recent report from Innovate Finance, covering Q1 of 2019, indicated that overall investment into Fintech, including venture capital, angel investing, private equity etc., topped $1 billion. In brief, Fintech boomed in Q1 as the industry experienced a 41% growth versus the prior quarter (Q4). Comparing to Q1 of 2018 it quadrupled.

Latest UK fintech investment figures reflect the evolution of the sector (ComputerWeekly), Rated: A

Investment in UK fintechs in the first half of this year was £2.9bn, which is 85% of the total invested in 2018, according to figures from fintech industry body Innovate Finance. It is also 45% higher than the same six month period last year. London based companies took 90% of this.

For example challenger banks including OakNorth ($440m), Monzo ($147m) and Starling Bank ($98m) got the most significant investments. In payments and foreign exchange sectors Checkout.com ($230m), WorldRemit ($175m) and GoCardless ($76m) were major recipients.

Could ‘bad credit’ credit cards be more expensive than a payday loan? (Which?), Rated: A

Around four million people in the UK have subprime credit cards, charging interest ranging from 30% to 70% – compared to the average 20% APR on mainstream deals.

P2PFA looks to woo intermediaries (P2P Finance News), Rated: A

THE PEER-TO-PEER Finance Association (P2PFA) is looking at ways of boosting distribution for members.

LendIt Fintech Europe 2019 Preview (Lend Academy), Rated: A

LendIt is returning to London again for the sixth annual LendIt Fintech Europe event. It will be held on 26 – 27 September at the same location as last year, the Business Design Centre. We are expecting well over 1,000 people at the event this year.

Some of the featured keynote speakers this year will be:

  • Rishi Khosla – CEO, OakNorth
  • Jaidev Janardana – CEO, Zopa
  • Anne Boden – CEO, Starling Bank
  • Rhydian Lewis – CEO, Ratesetter
  • Husayn Kassai – CEO, Onfido
  • Tamaz Georgadze – CEO, Raisin

How Jules B uses tech to stay ahead online (Essential Retail), Rated: B

Independent luxury fashion retailer Jules B has six stores across the Lake District an Newcastle, as well as a strong online presence.

To that end it has been working with fintech company Klarna to provide more payment options, which he says allows it to “compete in that marketplace for the younger generation.”

China

Ping An-backed Lufax to ditch P2P lending on regulatory woes (Reuters), Rated: AAA

Lufax, one of China’s largest online wealth management platforms that is backed by financial giant Ping An Insurance (601318.SS), plans to exit its once-core peer-to-peer lending (P2P) business, three sources with direct knowledge of the matter told Reuters.

China slowdown, trade dispute hurt global carmakers (DW.com), Rated: A

The Chinese auto sector has been under a lot of pressure over the past 18 months, hurt by an economic slowdown that has dented consumer confidence, the ongoing trade dispute between Beijing and Washington, and the government’s crackdown on peer-to-peer lending. Looming stricter emissions rules are also causing Chinese buyers to wait to buy new cars.

China rich with opportunity for fintech talent (China Daily), Rated: A

China is on the cutting edge of the fintech industry and promises great opportunities for fintech talent, fuelled by a rising demand for financial services and technology professionals, according to Hays plc, a global professional recruiting group.

European Union

Bitcoin Suisse Applies for Banking License with Swiss Regulators (BTC Manager), Rated: A

As stated in its press release, the leading Swiss-based regulated cryptocurrency broker and financial services provider, has applied for a banking license with FINMA, following the Swiss Banking Act Art. 1a.

The firm claims it has also achieved several significant milestones in recent months, including the expansion the number of tradable digital assets, with more than 6,000 trading pairs, as well as the provision of a large scale collateralized crypto lending service to its institutional clients.

International

Goldman, UK’s Lendable Strike £200M Deal (PYMNTS), Rated: AAA

Goldman Sachs and personal loan startup Lendable from the U.K. have reached a £200m deal, in a sign of Goldman’s confidence in the startup, according to a report by the Financial Times.

A conversation with Zac Prince, Founder, CEO, BlockFi (The Block Crypto), Rated: A

Zac Prince is CEO of BlockFi, which helps crypto investors manage digital assets and grow their net worth through services such as Bitcoin loans. Frank Chaparro and Ryan Todd discuss the complexity of crypto loans and the future of the industry.

Australia

P2P lender joins another aggregator’s panel (Australian Broker), Rated: AAA

RateSetter’s personal loans and secured automotive offering will be made available to Australian Finance Group’s (AFG) broker network of over 2,900 from 22 July.

The P2P lender provides risk-based pricing for its personal loans, with interest rates starting at 5.49%. The loans range from $2,001 to $45,000 for terms between six months to five years. Creditworthy borrowers typically gain access to finance within 24 hours of filling out the five-minute application.

SME lender expands presence within Australia (Australian Broker), Rated: A

OnDeck Australia has joined the lending panel at Finance & Systems Technology (FAST), in an arrangement that will help facilitate more opportunities for FAST brokers interested in expanding into the SME lending channel.

X factor mortgages: The lenders offering more than just hot rates (Mozo), Rated: A

With the official cash rate sitting at just 1.00% following two RBA rate cuts, you may have noticed a flurry of home loan rate drops, with some lenders slashing rates towards the 3.00% mark and below.

Asia

Smaller Banks in Singapore Are at Risk As Fintechs Eye Digital Banking License (Fintech News), Rated: AAA

Competition is heating up in Singapore’s digital banking landscape as an increasing number of fintechs including e-wallet operators and payment services providers are looking to apply for when applications open in August.

Strong contenders for the Singapore’s digital bank licenses

Liquid Group, Xfers, MatchMove Pay, FOMO Pay, Razer and Singtel would be competing against the likes of Grab, Southeast Asia’s ride-hailing giant and the region’s first “decacorn,” Validus Capital, a peer-to-peer lending platform, and InstaReM, a remittance startup, which are also eyeing a digital bank license.

In June, the Monetary Authority of Singapore (MAS) said that it will issue up to five new digital bank licenses, comprising up to two digital full bank licenses and up to three digital wholesale bank licenses.

Accountants have critical role in helping businesses fight cybercrime (Channel News Asia), Rated: A

Finally, accountants should also focus on financial crime compliance, which must evolve to keep up with new business models such as peer-to-peer lending, the minister said.

Canada

Give your BBQ the royal treatment (The Daily Courier), Rated: AAA

Ramsey will also introduce HousingHub, a new initiative for B.C. Housing to provide more affordable rental and ownership housing for middle-income individuals and families.

Small businesses can apply for a short-term loan of up to $250,000 online, and if they qualify, the funds can be delivered electronically to the business in as little as one business day.

The agreement will use OnDeck’s data analytics and digital technology to make real-time lending decisions and Coast Capital Savings to provide the financing.

Authors:

George Popescu
Allen Taylor

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

Thursday December 13 2018, Daily News Digest

unsecured personal loan balances

News Comments Today’s main news: FDIC opens comments on Special Purpose National Bank charters. Plaid raises $250M. P2PFA member lending exceeds 10B GBP. ThinCats raise 200M GBP. Bondora originates almost 8M euro in loans in November. Klarna joins Shopify Plus Partner Program. Nubank launches debit card. Today’s main analysis: Trends in credit card debt. Today’s thought-provoking articles: Consumer credit market poised […]

unsecured personal loan balances

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

FDIC Embraces FinTech (PeerIQ), Rated: AAA

Formation of new banks post-crisis is historically low. More banks have failed since 2009 than have new banks opened.This trend could leave some communities severely underbanked.

The FDIC wants to encourage new banks to startup and wants innovative FinTech firms to be part of that process. The agency wants to streamline its application process and is seeking comments on how that can be done.

The OCC’s Special Purpose National Bank (SPNB) charter allows FinTechs to operate as banks.

Fintech startup Plaid raises $ 250M at a $ 2.65B valuation (TechCrunch), Rated: AAA

The company is today announcing a $250 million Series C investment led by famed venture capitalist and the author of the Internet Trends reportMary Meeker, who will join its board of directors as part of the deal. The funds were raised at a valuation of $2.65 billion, according to sources close to the company. Capital from Meeker’s investment came from Kleiner Perkins’ growth fund — where Meeker has been a partner since 2010 — not from the reported billion-dollar-plus solo fund she’s in the process of raising.

New investors Andreessen Horowitz, Index Ventures, Norwest Venture Partners and Coatue Management also participated, as did existing investors Goldman Sachs, NEA and Spark Capital.

U.S. Consumer Credit Market Poised for More Growth in 2019 (TransUnion), Rated: AAA

Low unemployment rates and continued positive growth in both GDP and real disposable income are among the key drivers that will propel the U.S. consumer credit market in 2019. Partly due to the strong performance of these economic indicators, TransUnion’s (NYSE: TRU) 2019 consumer credit forecast found that originations and consumer balances are expected to increase for most credit products, while serious delinquency rates will likely decline or remain steady.

Source: Globe News Wire

A few outliers in the forecast come by way of serious credit card delinquency rates and originations as well as mortgage originations. Credit card delinquency rates are expected to rise from 1.94% in Q4 2018 to 2.04% in Q4 2019 as a shift toward more non-prime consumers with access to credit cards will likely negatively impact originations and consequently the serious delinquency rate.

Source: Globe News Wire

TransUnion Forecast: Top Consumer Credit Trends for ‘19

Trend #1: There’s Room for Growth in Personal Loans

Personal loans continue to display signs of strength, and total balances are expected to climb 20% to an all-time high of 156.3 billion by the end of 2019.

Trend #2: Affordability May Impact the Auto Industry

It’s also worth noting that the number of auto loan originations is expected to end 2018 at 28.5 million and grow to 29.4 million in 2019. This is a significant increase from recent years (27.5 million in 2017, 28.3 million in 2016, 28.0 million in 2015). This growth is expected to be driven from both ends of the risk spectrum. Yet as the growth continues, the serious delinquency rate is anticipated to remain muted, ticking up to 1.44% in Q4 2019, an increase from the expected 1.43% in Q4 2018 and the 1.43% mark observed in Q4 2017.

Trend #3: Homes Becoming More Expensive, but Home Equity Increases Could Be a Boon to Consumers

Mortgage originations have declined the past several quarters, a trend that is expected to continue into 2019.  Rising interest rates, increasing home prices, and supply constraints are driving lower origination numbers.  Average balances will continue to trend upward in 2019, growing from an anticipated $208,831 at the end of Q4 of this year to $218,490 by the end of Q4 2019, a 4.6% increase.

Trend #4: More Near Prime Consumers will Carry a Credit Card

Near prime consumers are expected to increase their origination share to 19.1% in 2019, up from 18.3% in 2018.

Credit Card Debt Study: Trends & Insights (Wallet Hub), Rated: AAA

Americans repaid $40.8 billion in credit card debt during Q1 2018 – the second-largest quarterly payoff ever. But we added almost $38 billion back to our tab in Q3 and Q2 2018. We also began the year owing more than $1 trillion in credit card debt for the first time ever, after adding $87.3 billion to our tab in 2017.

Source: WalletHub

The $38 billion in credit card debt added during Q2 and Q3 2018 has nearly wiped out consumers’ large first quarter pay-down.

We ended 2017 with $87.3 billion in new credit card debt, and WalletHub projects a $70 billion increase in 2018 by the end of the year.

Source: WalletHub

Americans started 2018 with more than $1 trillion in outstanding credit card balances for the first time ever, and we are on pace to begin 2019 in even worse shape.

Cities with the Highest & Lowest Credit Card Debts

Percentile* City Median Credit Card Debt Cost to Pay off Months & Days Until Payoff
99 Colleyville, TX $5,593 $880 24 months and 28 days
99 Darien, CT $7,935 $1,167 23 months and 8 days
99 Park City, UT $5,376 $720 21 months and 5 days
99 Fairbanks, AK $4,655 $620 21 months and 2 days
99 Summit, NJ $4,953 $655 20 months and 29 days
99 Leawood, KS $4,857 $642 20 months and 29 days
99 The Woodlands, TX $5,088 $670 20 months and 27 days
99 Mill Valley, CA $5,110 $672 20 months and 26 days
99 Needham, MA $4,393 $577 20 months and 25 days
99 Sammamish, WA $4,386 $575 20 months and 24 days
99 Durango, CO $3,583 $466 20 months and 17 days
99 Lafayette, CO $3,600 $467 20 months and 16 days
99 Juneau, AK $4,166 $540 20 months and 16 days
99 Southlake, TX $5,988 $775 20 months and 14 days
99 Ridgewood, NJ $5,625 $727 20 months and 14 days
99 Hoboken, NJ $3,570 $456 20 months and 6 days
99 Westport, CT $6,112 $770 19 months and 30 days
99 Winchester, MA $4,618 $580 19 months and 28 days
99 Highland Park, IL $5,379 $672 19 months and 24 days
99 Bethesda, MD $4,599 $573 19 months and 22 days
99 Wasilla, AK $4,693 $584 19 months and 22 days
99 Monument, CO $4,157 $514 19 months and 17 days
99 Newton, MA $4,014 $494 19 months and 15 days
99 Lafayette, CA $5,028 $618 19 months and 13 days
99 Scarsdale, NY $5,231 $641 19 months and 11 days
99 Bloomfield Hills, MI $4,552 $557 19 months and 11 days
99 Deerfield, IL $4,698 $575 19 months and 10 days
99 Woodinville, WA $4,331 $528 19 months and 8 days
99 Brookhaven, GA $4,221 $513 19 months and 6 days
99 Hingham, MA $4,571 $554 19 months and 4 days
*99th Percentile = Least Sustainable Credit Card Debt

A Different Kind of Gender Gap: Homeownership Is More Common Among Single Women Than Single Men (LendingTree), Rated: AAA

  • Single women own considerably more homes than single men do. On average, single women own around 22% of homes, while single men own less than 13% of homes.
  • Oklahoma City was the metropolitan area where single men own the largest share of owner-occupied homes, at 16%. Even though single men own a greater proportion of homes in Oklahoma City than they do elsewhere in the country, they still own fewer homes than single women, who own 24% of residential properties in the area.
  • New Orleans was the metropolitan area where single women own the largest share of owner-occupied homes. In this area, single women own nearly twice as many homes than single men do: 27% compared with 15%.

OCC sees sharp drop in mortgages serviced by large banks (American Banker), Rated: A

The OCC’s quarterly metrics report, released Tuesday, showed continued improvements in credit quality of mortgage loans at banks. But it also noted that the report is based on $3.26 trillion in principal balances, representing 32% of all mortgages in the U.S. Ten years ago, that figure was $6.1 trillion in mortgage balances, representing 60% of all outstanding mortgages.

How Do Underwriters View Mortgage Lending? (Progress in Lending), Rated: A

Subprime personal loans will flourish in 2019 thanks to startups and Donald Trump (Quartz), Rated: AAA

Subprime personal loan balances have been climbing since 2014 and are forecast to increase 20% next year, to a record $156.3 billion, according to credit-scoring firm TransUnion. The last three months of this year will be the biggest quarter ever for origination, accounting for some 5 million loans.

San Francisco-based Affirm, founded by PayPal co-founder Max Levchin, is one of the leaders in point-of-sale loans and is available at more than 1,200 US retailers. The company says its lending process allows it to approve far more applicants across the credit spectrum than traditional lenders.

Payday lending has also increased. These days, this type of high-interest, short-term debt often takes place online through installment loans. San Francisco-based LendUp is an example of the new breed of payday lenders, charging annual percentage rates that can range from 30% to more than 1,300% depending on the type of loan, according to a report by NerdWallet.

Galaxy Digital Leads $ 30 Million Funding for Social-Crypto Startup Good Money (CoinDesk), Rated: A

Digital banking platform Good Money just raised $30 million in a Series A funding round to continue developing its app.

Led by Michael Novogratz’s Galaxy Digital (via its Galaxy EOS VC Fund), participants in the funding round included Breyer Capital, Blocktower Capital, Boost VC, Ken Howery, BlockChange Ventures, Cross Culture Capital, Troy Carter, Mitch Kapor, Peter Diamandis Blake Mycoskie and Justin Rosenstein, among others.

Half of Americans think using sharing services is risky (Biz Journals), Rated: A

Personal safety is a real concern Americans have about the sharing economy, according to a new survey commissioned by insurance company Lloyd’s.

The sharing economy includes companies that use data and develop platforms to connect people, including ride-sharing services like Uber and Lyft, apartment and home lending sites like Airbnb and VRBO, as well as peer-to-peer lending, reselling, co-working, and freelancing sites, per Forbes.

The analysis showed that 60 percent of American consumers believe they are putting their personal safety at risk by using sharing services because it means interacting with strangers, and 58 percent think that the risks outweigh the benefits.

Investors’ Harbour Launches New Fund That Will Finance the Development of Hawaii’s Newest Master-Planned Community (Investors’ Harbour), Rated: B

Admiral Realty Capital’s new private placement, Fund V, is engaged in providing financing to Puainako Heights Land Investment, the master-developer of a subdivision on the Big Island with over 330 single-family homesites. The offering is featured on the Boston-based crowdfunding platform Investors’ Harbour.

Different than most existing crowdfunding platforms, Investors’ Harbour does not feature an avalanche of small “fix-and-flip” projects handled by real estate enthusiasts. With a very low acceptance rate, Harbour only hosts larger-scale construction programs, conducted by commercial development firms with admirable track record.

Dharma-based Crypto Lending Platform Bloqboard Launches New Feature to Empower Lenders (Crypto Coin Spy), Rated: B

Bloqboard – a non-custodial digital asset lending platform for collateralized loans originated, settled, serviced, and managed on the Ethereum network and powered by Dharma and Compound – has today announced the release of a new feature they call ‘Offers to Lend’. This provides lenders with the ability to offer prospective borrowers their cryptoassets for peer-to-peer loans issued on the Dharma protocol.

Wyre partners with bZx, the protocol that powers decentralized margin lending (Cryptoninjas), Rated: B

Blockchain enabled payments company Wyre today announced a partnership with bZx, the protocol that powers decentralized margin lending. bZx will incorporate Wyre’s KYC/AML solution for DEXs to offer compliant trading.

United Kingdom

P2PFA member lending exceeds £10bn (P2P Finance News), Rated: AAA

PEER-TO-PEER Finance Association (P2PFA) platforms have cumulatively lent out more than £10bn, according to the trade body’s latest data.

Peer-to-peer platform ThinCats secures £200m funding deal (AltFi), Rated: AAA

The money comes from BAE Systems Pensions and is the second significant loan funding deal struck by ThinCats in the last few months.

Iwoca adds Barclays and HSBC to Open Banking connections (Finextra), Rated: A

iwoca, the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking.

Tide accounts for 1 per cent of UK’s SME banking market (AltFi), Rated: A

Digital business bank Tide has reached 56,000 SME customers, accounting for one per cent the UK’s 5.6m SMEs. The bank has more than doubled the number of customers using its services in the last 12 months.

UK recruiters say challenger banks and fintech businesses are now more appealing to candidates than traditional banks (Onrec), Rated: A

  • 55% of recruiters and HR managers have seen an increase in hiring rates over the last five years
  • Half of UK recruiters and HR managers have seen an increase in demand for AI, cryptocurrency and blockchain skills
  • 55% say the number of roles requiring these emerging tech skills has outstripped the number of available candidates
  • 32% of recruiters say traditional banks are the least appealing FS organisations to candidates, whilst cryptocurrency businesses are top

Sancus tightens credit processes amid no-deal Brexit fears (P2P Finance News), Rated: A

SANCUS BMS has prepared itself for a no-deal Brexit and tightened its credit processes to protect itself from a market slowdown, its chief executive has said.

Sancus BMS, which comprises the peer-to-peer lenders Sancus Finance and Sancus Funding, sent out an email to its community on Wednesday.

Starling Bank Adds Onedox to Its Marketplace (coverageR), Rated: B

Founded in 2015 with £1m in funding, Onedox helps people manage household bills and expenses by allowing them to connect their different accounts including gas, electric, internet, mobile, and insurance. The service – which is free of charge – allows users to stay on top of their bills while receiving personalized recommendations for saving money by switching to new providers.

China

China Lending Expands B2B Offerings With Supply Chain Service (PYMNTS), Rated: AAA

China Lending Corporation has announced the launch of its new supply chain financing services, which include a business factoring program.

In addition, China Lending has acquired 98.04 percent equity interest in Hangzhou Zeshi Investment Partners, which will enable China Lending to launch its new supply chain financing services in the near future, including financing products design, related corporate financing solutions, investments and asset management, and more.

Best/Worst Bets In Chinese Fintech (Seeking Alpha), Rated: A

China’s financial technology, or fintech, sector, has suffered this year due to a slowing economy and stricter financial regulation. In the peer to peer lending sector, hundreds of firms have shut down due to inability to comply with regulations or insolvency. So, what can we expect from this industry in the near future?

European Union

P2P Lender Bondora Reports Almost €8 Million in Originations for November (Crowdfund Insider), Rated: AAA

Peer to peer lending platform Bondora says loan originations almost hit €8 million during the month of November. This follows a record-breaking month of October

In November, Bondora issued €7,894,070 of new loans, just ahead of the record set for originations in the previous month of €7,802,163.

LendIt Fintech Europe 2018 Slide Presentations Now Live (LendIt.com), Rated: A

Thanks to everyone who joined us at LendIt Fintech Europe 2018. Below you will find all of the presentations from the event. You can also view the photos from LendIt Fintech Europe 2018.

Keynotes

  • Joel Perlman, OakNorth Holdings – The OakNorth Growth Story – from Startup to Profitable Unicorn
  • June Ou, Figure – Blockchain: Creating the Future of Financial Services
  • John Goodall, Landbay – Misconceptions of the UK Buy-to-Let Market Today

Get the full schedule here.

Spotcap increases credit lines to EUR 300M (Spotcap email), Rated: A

It’s been a busy and rewarding 12 months for us here at 

YouHodler – Top Crypto Lending Platform on the Market (NewsBTC), Rated: A

YouHodler is a crypto-backed loan service provider. This established blockchain platform allows users to acquire loans instantly, by leveraging their cryptocurrencies for EUR or USD.

The company offers the highest loan-to-value ratio in the entire industry – up to 80%. And, unlike its competitors, it accepts five of the top cryptocurrencies as collateral, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ripple. Short-term loans are available at a low interest rate of just 2.5%.

Alternative finance ‘becoming vital’ for SMEs in north (The Irish News), Rated: A

THE ability for small businesses in Northern Ireland to access alternative forms of finance has become a vital factor in their successful growth, the head of a Belfast accountancy firm insists.

Since the financial crash and credit crunch, the funding void left by traditional lenders has been filled by boutique funders and alternative finance, which can allow SMEs to access finance for a variety of different needs, from long term investment through to funding for short term working capital.

International

Klarna Joins Shopify Plus Partner Program To Power High-Growth Merchants (PR Newswire), Rated: AAA

Klarna announced today that they are among the first payment service providers to join the Shopify Plus Technology Partner Program, focusing on high-growth and high-volume merchants. This integration will allow merchants in Germany, the UK and the US to easily implement Klarna’s smoooth payment suite and offer a superior customer experience and thereby unlock additional growth potential.

Cred Opens Crypto Corporate Lending Platform To Developers (PYMNTS), Rated: A

In a press release on Tuesday (Dec. 11), Cred revealed the rollout of its developer platform CredX (not to be confused with the new credit card accounts payable solution recently launched by Finexio). The Crypto-Lending-as-a-Service (CLaaS) solution enables other crypto companies — including exchanges, crypto wallets or mining services — to integrate Cred’s lending functionality into their own solutions. Its set of application program interfaces (APIs) enable businesses to use crypto as collateral to access corporate financing products.

Australia

Payday loan applicants asked to hand over bank passwords, inquiry hears (The Guardian), Rated: AAA

A new parliamentary inquiry has begun scrutinising the behaviour of payday lenders, buy-now-pay-later firms, and credit repair agencies.

Vulnerable Australians are agreeing to share their internet banking passwords so payday lenders can see their transaction history before lending them money, an inquiry has heard.

Asia

400 Online Lending Sites, Fintech Platforms Being Shut Down (Tempo.co), Rated: AAA

Communication and Informatics (Kominfo) Minister Rudiantara said the ministry had shut down 400 financial technologies (fintech), consisted of sites and applications, related to fraud cases on online loan services that are recently rampant in Indonesia.

LBH Urged to Expose Identities of Violating Online Loan Services (Tempo.co), Rated: B

The Indonesian Fintech Joint Funding Association (AFPI) asked the Jakarta Legal Aid Institute (LBH) to open the identities of 25 peer to peer (P2P) lending organizers or registered online loan services that are said to have made violation.

South Korea is getting its first fintech unicorn (Business Insider), Rated: A

South Korean fintech Toss has raised an $80 million funding round led by US-based firms Kleiner Perkins and Ribbit Capital, with participation from Altos Ventures, Bessemer Venture Partners, PayPal, and Qualcomm Ventures, among others. This brings Toss’ valuation to $1.2 billion, making it the latest fintech unicorn globally, and Korea’s first.

Toss started out offering peer-to-peer (P2P) payments, but has since added other services —including insurance, investments, savings accounts, credit score management, and a financial dashboard that allows users to see all of their finances in one place — by partnering with third parties. Toss already has 10 million registered users, meaning it reaches around 20% of Korea’s population with its services.

Source: Business Insider

How these Amazon and Xiaomi alums are helping the unbanked with blockchain (Tech in Asia), Rated: A

“A lot of the traditional models are not applicable to onboard those people into financial systems,” says Sarah Zhang, co-founder of Singapore-based Points.

That’s where Points – also called PTS – picks up the slack. Founded last year, the blockchain-powered startup uses AI and big data to assess factors like an individual’s occupation, bill payments, and shopping activities to calculate a credit score.

Latin America

Brazilian Fintech Nubank Launches Debit Card To Reach 120M Clients (Forbes), Rated: AAA

Brazilian fintech Nubank has launched a debit function for its card offering as well as the ability to withdraw cash from ATMs, in a move that aims to extend its reach to as many as 120 million customers.

The startup created in 2013 and valued at over $4 billion 

Africa

Experian to acquire African credit info firm Compuscan for $ 263m (Fintech Futures), Rated: AAA

Experian is buying African credit information and analytics services firm Compuscan for ZAR 3.72 billion ($263 million) from markets investor Actis.

Authors:

George Popescu
Allen Taylor

Wednesday August 1, 2018 Daily News Digest

Global Banking Executives Biggest Challenges

News Comments Today’s main news: OCC approves fintech charter. Microsoft, Nationwide invest in BlueVine. UK overtakes US in fintech investment. P2PFA members take in over 300M GBP from IFISAs. Today’s main analysis: Trump Administration hugs fintech. Today’s thought-provoking articles: Online lenders, payment companies can act more like banks. How Revolut reduced fraud by 30%. Chinese P2P lending under severe challenges. Fintechs […]

Global Banking Executives Biggest Challenges

News Comments

United States

United Kingdom

International

Other

News Summary

United States

After years of debate, OCC to offer fintech charter (American Banker) Rated: AAA

The Office of the Comptroller of the Currency announced Tuesday that it would move ahead to consider special-purpose charter applications from fintech firms, ending the guessing game over whether the agency was serious about giving fintechs a federal option.

The decision, unveiled just hours after the Treasury Department released a report endorsing a national fintech charter, means fintech firms that opt for the charter could soon be regulated more like banks on a national scale.

Fintech Gets a Hug From the Trump Administration (Barron’s) Rated: AAA

The Treasury Department released a report today with more than 80 recommendations that are aimed at tailoring regulations for nonbank financial institutions and encouraging the development of financial technology.

Source: U.S. Treasury Department
Source: U.S. Treasury Department

Read the full report here.

Securitizations swell as marketplace lending matures (GlobalCapital) Rated: A

A report out of the Department of the Treasury on Tuesday notes that the growth of marketplace lending has fueled ABS deals in the sector.

Marketplace lenders have originated some $100bn in loans since 2014, with unsecured consumer debt accounting for 50% of total volume.

The strong pace of originations has fueled consumer securitization issuance, with the number of marketplace loan ABS deals ballooning every year since 2013.

Online Lenders and Payment Companies Get a Way to Act More Like Banks (The New York Times) Rated: AAA

Online lenders and other so-called fintech firms — including the payment processor Square, the online lender Lending Club and the cryptocurrency exchange Coinbase — have pressed for regulatory routes that would let them cut through the thicket of state and federal laws that govern financial businesses.

Heeding those requests, the Treasury Department released a 222-page report laying out the Trump administration’s view on how nonbank financial companies should be regulated. Hours later, the Office of the Comptroller of the Currency, a national bank regulator, announced a new kind of charter that would potentially free such companies from the state-by-state approvals they currently need to offer loans and other financial products.

Source: Treasury.gov

Read the complete report here.

CSBS Responds to Treasury, OCC Fintech Announcements (CSBS) Rated: A

We appreciate the Treasury’s recognition of the vital role performed by state regulators in overseeing nonbank financial service providers. And we are pleased that Treasury noted the substantial progress states have made towards harmonizing the multistate experience for industry.

At the same time, we disagree with certain Treasury recommendations. We do not support creation of new federal rules or unauthorized federal charters that would seek to compromise the ability of state officials to apply and enforce state laws. And so, we disagree with Treasury’s recommended changes to the valid-when-made doctrine and the true-lender doctrine, and the creation of an OCC special purpose bank charter for fintech companies.

An OCC fintech charter is a regulatory train wreck in the making.

Microsoft’s M12 joins $ 12 million funding extension for fintech startup BlueVine (Venture Beat) Rated: AAA

Fintech startup BlueVine has added $12 million to its recently announced series E round of funding, bringing Microsoft’s venture capital (VC) unit M12 onboard alongside the VC arm of finance giant Nationwide.

The additional funding brings BlueVine’s total series E round to $72 million, after the company announced an initial $60 million cash injection just two months ago.

BlueVine has now raised around $590 million in funding since its inception, though it’s worth noting that around three-quarters of that came in the past year via debt financing.

Small-Biz Talks: StreetShares on Small Business Lending (Value Penguin) Rated: A

On average, veterans are getting, through us, about 2% to 3%lower interest rates than nonveterans. That’s an internal discount that we give. Comparing us to an OnDeck or a Kabbage, we are probably half the average APR of OnDeck and probably a quarter of Kabbage. They may disagree with that, but that’s our numbers.

Online Lending Needs More Regulation: New York Regulator (BNA) Rated: A

Notably, a group of lenders that is currently not subject to licensing – those making loans between 7 and 16 percent – would have to become Licensed Lenders. As a result, those lenders would have to complete the licensing process, pay the associated fees, and would then be subject to supervision and examinations by the NYDFS.

Additionally, any nonbank that lends to a New York borrower, either directly or through a partnership, would have to comply with New York’s usury limit. This rule is already in effect for servicers that acquire loans originated by banks, due to the Second Circuit’s decision in Madden v. Midland Funding. However, the NYDFS recommendation would potentially expand that rule to loans originated by lending companies organized by Native American tribes, among other situations.

Gusto raises $ 140 million to go after small business payroll and benefits with more gusto (TechCrunch) Rated: A

Gusto, which sells payroll, benefits and human resources management and monitoring services to small businesses, has raised $140 million in its latest round of funding.

The company said it will use the money to add new services to increase payment flexibility for employees. The company launched a new service called Flexible Pay, which gives employees a way to get paid no matter when a company’s pay schedule dictates. It seems sort of like a payday loan, where a percentage of the salary is taken by Gusto  for providing money upfront.

Elevate Credit, Inc. (ELVT) CEO Kenneth Rees on Q2 2018 Results – Earnings Call Transcript (Seeking Alpha) Rated: A

Before I catch on the specific highlights for Q2, I’d like to restate, as I usually do, our commitment to use technology and advanced analytics to be the most responsible lender in our space and to make a positive impact in the lives of our customers. As Slide 3 shows, we’ve now extended more than $5.9 billion in credit to more than 2 million nonprime consumers. We’ve come to call the 170 million consumers in the U.S. and U.K. who are credit constrained, the new middle class. And we’re proud to announce on this call that Elevate products have now saved our customers more than $4 billion over what they would’ve paid for legacy products like payday loans.

Elevate Credit (ELVT) Issues FY18 Earnings Guidance (Press Oracle) Rated: A

Elevate Credit (NYSE:ELVT) updated its FY18 earnings guidance on Monday. The company provided EPS guidance of $0.55-0.90 for the period, compared to the Thomson Reuters consensus EPS estimate of $0.72. The company issued revenue guidance of $790-810 million, compared to the consensus revenue estimate of $803.81 million.

Several brokerages have recently weighed in on ELVT. Zacks Investment Research upgraded shares of Elevate Credit from a hold rating to a buy rating and set a $11.00 price objective on the stock in a report on Tuesday, July 24th.

Nobody Says ‘Zelle Me’: Banks Struggle to Catch Up to Venmo (Wall Street Journal) Rated: A

A year in, Zelle’s reviews are mixed. Usage is up, but most banks haven’t signed on, meaning many consumers can’t use it without downloading a separate app. It also fell short of its goal to have 33 banks on the network by its first anniversary, and behind the scenes, it runs on plumbing that’s more than 40 years old.

Zelle’s rocky debut shows the challenges of trying to make alterations to an industry often slow to change and still weighed down by old infrastructure.

Go Midwest, young fintechs (American Banker) Rated: A

For startups, they are not the obvious places to settle down. While fintech is flush with venture capital, three states — California, Massachusetts and New York — gobble up 75% of all VC funds. Yet if there is a good time to go against the odds, it might be now. These days, it has become fashionable for venture capitalists to say they are scouting for opportunities beyond the coasts.

Most visibly, Revolution’s Rise of the Rest seed fund, co-founded by AOL co-founder Steve Case, continues to make a splash by investing in all kinds of startups across America to promote growth and increase investment capital. As Case blogged, “People know that the future of America is tied to more than just three cities, and there is an eagerness, now more than ever, to address the investment gap.”

Bill to enhance poor credit scores will backfire, critics say (American Banker) Rated: A

Legislation to enhance credit scores by allowing consumers to include data about their monthly bills has broad bipartisan support, but some consumer advocates and others question whether the legislation may backfire on those it is meant to help.

The measure, which passed the House earlier this month and is authored by Rep. Keith Ellison, D-Minn., is intended to allow consumers to benefit from positive information about lease, telecommunications and utility payments in their credit reports. An identical version has been introduced by Sens. Tim Scott, R-S.C., and Joe Manchin, D-W.Va., in the upper chamber.

A CEO used to think student loans were predatory, but he’s changed his mind (Business Insider) Rated: A

Last week, LendingTree acquired Student Loan Hero for $60 million. In an interview with Business Insider, Josuweit reflected on how his view of the student-loan industry had changed since launching his business.

Today, Student Loan Hero offers users financial-comparison tools and personalized advice for paying off student loans, rather than taking a one-size-fits-all approach.

Josuweit said he had also softened his stance on student loans in general. Where he once saw them as predatory, he now considers them a valuable tool when used wisely.

Kroger stops accepting Visa credit cards at some stores (Cincinnati Business Courier) Rated: A

Kroger Co. has quit accepting Visa credit cards at some of its stores in a battle against rising fees charged by the credit card giant.

Blockchain’s Spring Labs Appoints Peter Tapling Chief Commercial Officer (Block Tribune) Rated: B

Blockchain’s Spring Labs names Peter Tapling, an identity and payments expert, as chief commercial officer and head of industry relations. He will be responsible for overseeing Spring Lab’s network development, industry awareness, partnerships and commercialization. He will report directly to CEO and Founder of Spring Labs, Adam Jiwan, and will be based in Spring Labs’ Chicago office.
United Kingdom

UK overtakes US on Fintech investment for first half of 2018 (Business Matters) Rated: AAA

The UK has overtaken the US in terms of fintech investment for the first half of the year, and taken the top spot in Europe to attract $16.1bn (£12.3bn) out of the EUs $26bn total.

Four of Europe’s top 10 fintech deals happened in the UK, which included a $250m raise by Revolut, $100m by eToro, $60m by Flender and $54m by Moneyfarm. Data provided by KPMG’s pulse of fintech report has allayed fears that Brexit would hurt the UK’s startup scene, as venture capital firms have cemented the UK’s position as a funding hot spot.

Fintech investment across the world reached record levels over the last six months, taking in $57.9bn across 875 deals. This was an increase of 34.2 per cent compared to the whole of 2017, which recorded just $38.1bn overall.

P2PFA member platforms secure over £300m from IFIsa investments (Bridging & Commercial) Rated: AAA

Members of the Peer-to-Peer Finance Association (P2PFA) have seen 28,000 Innovate Finance Isas (IFIsas) opened, with more than £300m of funds already under management, according to the latest figures.

The six P2PFA member platforms which offer an IFIsa are: 

• Crowdstacker
• Folk2Folk
• Funding Circle
• Landbay
• Lending Works
• Zopa

UK neobank Revolut has reduced fraud by 30% – here’s how (Business Insider) Rated: AAA

UK-based neobank Revolut launched disposable virtual cards in March , and has now reported that they resulted in a 30% reduction in card fraud cases.

Disposable virtual cards provide users with card details that get destroyed right after making an online purchase, and new details are made seconds after the previous ones are scrapped. This way, a merchant can’t charge the customer again, as they don’t have the person’s actual card information.

This fraud reduction announcement comes at the right time for Revolut. Earlier in July, we reported that the neobank had discovered potential money laundering activity on its digital payments system a few months back. It informed the National Crime Agency (NCA) and the Financial Conduct Authority (FCA), suggesting that the severity of the issue was high, as conventionally companies just inform the NCA.

Source: Business Insider

FCA regulation sees an increase in consumer confidence for loans (Financial News) Rated: A

It’s an industry that has often come under intense scrutiny, but the high cost short term loans sector has seen a significant increase in consumer confidence. This comes as a result of the FCA facilitating dramatic changes and the enforcement of new regulations. In fact, a recent review by the FCA has stated that the noticeable improvements in the payday loan industry means that it will now not be reviewing this sector again until 2020. We take a look at the reasons why the FCA has successfully increased consumer confidence in the high-cost short term loan industry.

UK Regulators Taking Very Close Look At P2P Lending (PYMNTS) Rated: A

According to the U.K. Peer-to-Peer Finance Association (P2PFA), a self-regulating P2P industry group that includes most of the biggest names in U.K. marketplace lending, the country’s P2P lending industry had hit £9 billion in loan originations from the group’s members as of Q1 2018.

The figures also reflected having provided finance for approximately 50,000 businesses and 221,000 individuals overall, with a total investor count of about 150,000. According to the The Times of London, those figures are even higher – though they agree on the 150,000 investor count, they think about £10 billion in total loans have been underwritten.

Will New P2P Rules Hit SME Funding? (Forbes) Rated: A

The Financial Conduct Authority, the UK’s chief financial watchdog, has just spent months investigating the sector, where it has already intervened with new rules once to safeguard investors. Now the FCA says the sector has further problems that must be addressed, including poor standards of disclosure, opaque pricing structures, over-optimistic marketing claims and poor record-keeping. It is consulting on a series of potential reforms and has also warned individual businesses in the industry could be investigated for compliance failures.

Much of the regulator’s ire is reserved for the peer-to-peer lending sector, where online platforms facilitate loans from investors to consumers or small businesses. While defaults have been relatively rare – though the regulator points out most platforms have not been tested through a complete economic cycle – the FCA is worried that investors are sometimes being given false expectations about the returns they should expect.

QuickISA Launches Free Search Engine to Discover Profitable Savings and P2P Finance Schemes (Perfect Investor) Rated: A

Past economic turbulence, the recession, and the uncertainty over Brexit and its impact on future investments, has made it imperative for every investor to keep an eye on their investments.  Individual Saving Accounts (ISAs) are a great way to earn tax-free interest on your investment. But which ISA is the most profitable? This question can now be easily answered with the new online service offered by QuickISA.

Legal & General invests £3m in lendtech Smartr365 (FinTech Futures) Rated: A

Legal & General’s (LG) fintech business has made a £3 million investment in Smartr365, a Software-as-a-Service firm which supplies systems to the UK mortgage intermediary market.

Conor Murphy, director, Smartr365, says the new funding will be used for product development – such as its LendrConnect, a mortgage API service that allows brokers to submit mortgages.

China

The Chinese P2P Lending Sector Facing Severe Challenges Right Now (Lend Academy) Rated: AAA

Back then new platforms were launching pretty much every day as p2p lending became the hot new investment. The number of platforms grew to well over 3,000, a number that everyone agreed was not sustainable. But new platforms kept on launching, attracting both investors and borrowers with relative ease.

We all knew the party was going to end at some point and it looks like 2018 will be the year of reckoning. According to industry data provider, Wangdaizhijia (loosely translated as Online Lending House), platforms are failing at a rate of around five a day with 114 platforms shutting down between July 1 and July 24.

Xiaomi’s risky play with P2P lenders: another reason to be bearish (Kr-ASIA) Rated: A

But in the lead up to the company’s IPO earlier this month – which continues to be a rocky one – its founder LEI Jun went all in to deliver his bigger vision: Xiaomi isn’t a gadget maker, it’s an internet company. One that gathers data from a network of smartphones and other internet-enabled devices, and sells additional “online services” – things like utility apps and content, created by partners. In other words, a platform business built around the Xiaomi brand and gadgets ecosystem.

Well, large parts of China’s P2P sector were crumbling after a government crackdown. For some, it came too late – they had trusted sites with their savings in hopes of getting the promised returns.

Xiaomi had an explanation: It doesn’t have anything to do with those lenders. It only let them use its platform for advertising purposes.

European Union

Big Red Cloud becomes the latest SME to raise funds through Flender (Silicon Republic) Rated: AAA

Irish accountancy firm Big Red Cloud raises thousands in partnership with alternative-lending firm Flender.

Alternative-lending platform Flender has added another successful SME funding partnership to the pile, with Irish accountancy software company Big Red Cloud raising €31,500 in just 24 hours.

SMEs benefit from different lending models

O’Dwyer said it was encouraging to see the normalisation of alternative-lending models such as Flender as a credit option for SMEs and a novel opportunity for investors.

DGAP-News: Varengold Bank AG: Preliminary figures for first half of 2018 (Markets Insider) Rated: A

In the first half of 2018, the total assets increased significantly from EUR 445.2 million to nearly EUR 665.5 million. Customer deposits continue to be the dominant amount on the liabilities side with EUR 599.3 million and therefore 90%.

The company’s interest result increased due to the expanded lending volume from TEUR 2,047 in the first half of 2017 to TEUR 3,429 in the first half of 2018. The commission result remained almost constant at TEUR 8,108 in the first half of 2018 (30th June 2017: TEUR 5,818).

International

Fintech vendors keep reinventing themselves, and banks struggle to keep up (American Banker) Rated: AAA

There were 70 mergers and acquisitions among fintechs in the U.S., Canada and South America in the first quarter, and those deals were worth a combined $3.4 billion, according to a fintech investment report issued by KPMG on Tuesday.

The number of deals fell to 60 in the second quarter, but the total value rose to $5.8 billion. M&A activity in this field is expected to remain “very healthy [in] 2018 on the whole,” the report said.

The investment flow is also breeding new companies looking for bank clients. American fintechs, the report noted, attracted $14.2 billion in overall funding in the first half of 2018.

What that means for all banks is when it comes to tech, there’s plenty to ponder: more options for their front- and back-office operations; more retail and commercial service improvements to consider; more new vendors that will be seeking their business; and more fintech investment opportunities to pursue.

Source: American Banker

UK fintech scores the global top spot for investment in the first half of 2018 (City A.M.) Rated: A

China came in second place with $15.1bn, followed by the US with $14.2bn.

Four of Europe’s top 10 fintech deals happened in the UK, which included a $250m raise by Revolut, $100m by eToro, $60m by Flender and $54m by Moneyfarm. Data provided by KPMG’s pulse of fintech report has allayed fears that Brexit would hurt the UK’s startup scene, as venture capital firms have cemented the UK’s position as a funding hot spot.

Fintech investment across the world reached record levels over the last six months, taking in $57.9bn across 875 deals. This was an increase of 34.2 per cent compared to the whole of 2017, which recorded just $38.1bn overall.

Interval Funds: A New Approach To Alternative Investing (Seeking Alpha) Rated: A

The way I view it is that interval funds are a great blend of the traditional closed-end fund that Tortoise is used to managing, along with the traditional mutual fund that we also have managed in the past and still do. Compared to other registered fund structures, they’re obviously less liquid than a mutual fund and a traditional closed-end fund, but they’re great for more long-term investors that aren’t looking to need liquidity quite as often. From our fund’s perspective, you can subscribe daily. You only have the option to redeem at certain periods, and that’s typically between 5 and 25 percent on a quarterly basis. From a liquidity standpoint, obviously, this is nice for folks that aren’t qualified purchasers that aren’t getting exposure to traditional private funds in the limited partnership structure.

Crypto Lending Platform Launched By CoinLoan (Block Tribune) Rated: A

Estonia-based startup CoinLoan has officially launched its crypto-to-fiat lending platform that allow users to HODL crypto and borrow fiat money.

For borrowers, the platform allows them to create an application for receiving a loan in the amount that does not exceed 70 percent of the current market value of the crypto collateral. This limitation has been created for preserving the crypto assets of the borrower and reducing risk related to the high volatility of the crypto asset market.

The platform currently supports bitcoin, ethereum, Litecoin, Dash, ZCash, and Ripple. Users can borrow a loan in the following fiat currencies: USD, EUR, GBP, CNY, JPY, RUB, CHF, PLN and CZK.

A blockchain solution for global peer-to-peer lending (Global Banking and Finance Review) Rated: A

A blockchain solution for global peer-to-peer lending is on the horizon, adding an exciting layer to an already booming sector which is expected to reach the $1 trillion mark by 2025.

The problem is, some aren’t excited by blockchain’s arrival. Experiencing Déjà vu? It’s easy to be transported back to the 1990s when the Internet was dismissed as just a “wasteland of unfiltered data”.

FintruX Network welcomes Bob Rinaldi to its Board of Directors (Leap Rate) Rated: B

FintruX Network, the global P2P lending ecosystem, has just announced a new addition to its Board of Directors, Bob Rinaldi, a serial entrepreneur and business director. FintruX Network is an online ecosystem that facilitates the lending and borrowing of finances to small businesses in a peer-to-peer marketplace powered by blockchain and no-code development.

Australia/New Zealand

Fintech startup Tic:Toc raises $ 11.5 million to take hassle out of home loan approvals (Smart Company) Rated: AAA

Aussie fintech startup Tic:Toc has raised $11.5 million in Series B funding in its bid to improve the customer service around home-loan approvals.

The funding round was led by Genworth Mortgage Insurance Australia and La Trobe Financial, and also included some existing shareholders.

Heartland Bank unveils restructure plans (Interest) Rated: A

Heartland Bank says it’s planning a corporate restructure that will remove business growth constraints stemming from Reserve Bank regulation, and see it list on the Australian sharemarket.

The proposal is for a restructure of the Heartland Bank Ltd group of companies via a court approved scheme of arrangement under Part 15 of the Companies Act. The purpose of the restructure is to more clearly define the separation between Heartland Bank Ltd’s New Zealand and Australian businesses, and to enable it to access the most efficient forms of equity and debt funding, according to an NZX filing.

India

How RBI Is Solving P2P Lending Issues And India’s Credit Woes (Inc42) Rated: AAA

Over the past couple of years, non-banking financial companies (NBFCs) in India have undergone major transformations to keep up with the growing demand in the country’s credit market.

Subsequent to the ease in regulations, a number of new NBFCs were established to supply credit to consumers. However, access to financial services was only restricted to a small segment of consumers/ borrowers with existing credit histories and profiles.

On the other hand, the unbanked sections of the population, or those with limited exposure to institutional credit were not affected much with these developments, finding themselves in more or less the same situation as before.

Latin America

Uruguay: Peer To Peer Lending In Uruguay (Mondaq) Rated: AAA

As the peer to peer lending market is quite embryonic, processional expertise is recommended to make sure the transactions are compliant and in keeping with existing and developing regulations.

Any new lending schemes in this field must be registered with the Central Bank of Uruguay, and payments must be legitimate and in line with existing regulations for the Prevention of Money Laundering.

Asia

Indonesian P2P lender Investree raises Series B round led by SBI Holdings (Deal Street Asia) Rated: AAA

Indonesian P2P firm Investree has announced the closing of a Series B investment in a round led by SBI Holdings and joined by Mandiri Capital Indonesia, Persada Capital, Endeavor Catalyst, 9F Fintech Holdings Group and previous backer Kejora Ventures.

The financial details of the round were not disclosed.

Authors:

George Popescu
Allen Taylor

Monday June 25 2018, Daily News Digest

FREED 2018-1 collateral characteristics

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

FREED 2018-1 collateral characteristics

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

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

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

Source: Lend Academy

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

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

FREED 2018-1 Deep Dive

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Credible
United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

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

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

European Union

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

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

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

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

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

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

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

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

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

The FinTech50 2018 (The FinTech 50) Rated: B

Listings include:

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

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

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

32. Funding Circle — $1 billion

Value: $1 billion | Raised: $413 million

Founded: 2009 |  | HQ: London

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

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

31. Kabbage — $1 billion

Value: $1 billion | Raised: $500 million

Founded: 2009 |  | HQ: Atlanta

What it does: Fast online small business loans.

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

24. ACORN OakNorth — $1.2 billion

Value: $1.2 billion | Raised: $486 million

Founded: 2015 |  | HQ: London

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

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

22. Tuandaiwang — $1.46 billion

Value: $1.46 billion | Raised: $380 million

Founded: 2012 | HQ: Dongguan

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

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

17. NuBank — $2 billion

Value: $2 billion | Raised: $527 million

Founded: 2013 |  | HQ: Sao Paulo

What it does: Brazilian app-only bank.

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

16. Affirm — $2 billion

Value: $2 billion | Raised: $720 million

Founded: 2012 |  | HQ: San Francisco

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

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

15. Avant — $2 billion

Value: $2 billion | Raised: $1.8 billion

Founded: 2012 |  | HQ: Chicago

What it does: Online personal loans.

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

13. Klarna — $2.5 billion

Value: $2.5 billion | Raised: $636 million

Founded: 2005 |  | HQ: Stockholm

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

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

9. GreenSky — $3.6 billion

Value: $3.6 billion | Raised: $350 million

Founded: 2006 |  | HQ: Atlanta

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

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

8. Credit Karma — $3.5 billion

Value: $3.5 billion | Raised: $868 million

Founded: 2007 |  | HQ: SanFrancisco

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

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

7. SoFi — $4 billion

Value: $4 billion | Raised: $2.1 billion

Founded: 2011 |  | HQ: San Francisco

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

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

3. Lu.com — $18.5 billion

Value: $18.5 billion | Raised: $1.7 billion

Founded: 2011 | HQ: Shanghai

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

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

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

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

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

Australia

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

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

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

India

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

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

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

Asia

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

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

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

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

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

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

Africa

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

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

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

What exactly is FINT?

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

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

Authors:

George Popescu
Allen Taylor

Monday April 16 2018 Daily News Digest

yield curve

News Comments Today’s main news: Goldman buys Clarity Services. Zopa to receive 400M GBP valuation. Lending Works surpasses 100M GBP in online lending. ETHLend expands into fiat lending. Today’s main analysis: PeerIQ’s valuation report. Today’s thought-provoking articles: Why you’re not making much on your bank account. The impact of Brexit. Adjusting to new digital demands. UK venture funding takes a breather. […]

yield curve

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

Goldman Sachs Comes to the App Store (The Wall Street Journal) Rated: AAA

Goldman Sachs Group Inc. bought personal-finance app Clarity Money, acquiring a mobile storefront for its growing consumer bank.

The deal closed on Friday for Clarity Money, whose backers include Soros Capital and Citigroup Inc.’s venture-capital arm. Adam Dell—brother of Michael Dell, the personal-computer pioneer—founded Clarity Money and will join Goldman as a partner, a title rarely given to outsiders.

Strong Bank Earnings, LendIt Update, PeerIQ’s Valuation Report (PeerIQ), Rated: AAA

Wells Fargo’s earnings also beat analyst expectations, but the bank cautioned that these results could change due to the ongoing CFPB investigations. Consumer loans decreased $9.5 Bn QoQ – more than LendingClub or SoFi originate in a year – driven by a $3.8 Bn decline in auto loans, $1.9 Bn seasonal decline in credit card balances, and a $1.8 Bn decline in the junior lien mortgage portfolio.

 

Source: PeerIQ

PeerIQ’s Valuation Report 

Source: PeerIQ
Source: PeerIQ

Why You’re Still Not Making Much on Your Bank Account (The New York Times), Rated: AAA

After a decade of being near zero, short-term interest rates have risen sharply in recent months. Typically, these rates — three-month T-billsLiborcommercial paper — move together because they reflect the same basic economic reality.

Source: The New York Times

Slow but solid growth in the United States since the Great Recession has finally altered the balance between borrowers and lenders. Higher rates mean those with cash to spare now have the upper hand and can demand a higher price to part with it.

That’s how it’s supposed to work. But as any saver can tell you, some short-term rates have barely budged.

Adjusting to new digital demands goes beyond technology (American Banker) Rated: AAA

One of the dominant themes at the recent Oracle Industry Connect conference was that banking customers are not in a state of transition to digital anymore — they are all digital now.

But whether an institution is drawing up plans on how to respond to big tech firms entering the banking market, or engaged in an effort to overhaul legacy systems, Suber said, the guiding emotion shouldn’t be fear. Instead, he said, bankers should embrace a “golden age of fintech.”

Key’s goal is to use digital to enable self-service when appropriate, while gearing the branch towards serving customers with issues best suited for a one-on-one request.

Regions Bank Announces Partnership With Fintech Mortgage & Consumer Digital Lending Tech Platform Lender Price (Crowdfund Insider) Rated: A

Regions Bank announced on Thursday it has invested in and formed a partnership with fintech mortgage and consumer digital lending technology platform provider, Lender Price. According to the bank, the duo will focus on streamlining Regions’ digital process and simplify interaction between banks, borrowers, and bank.

LendingTree considers moving headquarters to Pineville (WBTV Chorlotte) Rated: A

Online loan marketplace LendingTree is considering moving its headquarters from SouthPark in Charlotte to the Cone Mill site in Pineville.

The company released a statement Thursday concerning the possible move.

In the statement the company said that given its considerable growth since the 2016 purchase of two buildings in SouthPark, their headcount projections have expanded significantly, so they are evaluating alternatives, including Pineville.

Wells Fargo could face $ 1 billion penalty for auto and mortgage abuses (CNN) Rated: A

The beleaguered bank warned on Friday that it may revise its first quarter earnings results because of the fine. The bank says that the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency have offered to resolve their investigations for that amount.

Wells Fargo (WFC) apologized last year for charging as many as 570,000 clients for car insurance they didn’t need.

An internal review by Wells Fargo found that about 20,000 of those customers may have defaulted on their car loans and had their vehicles repossessed in part because of those unnecessary insurance costs.

DiversyFund Launches New $ 50 Million Growth Fund for Multifamily and Commercial Real Estate Deals (PR Newswire) Rated: A

DiversyFund, a crowdfunding platform that is revolutionizing real estate investing, has launched its Commercial and Multifamily Real Estate Growth Fund. Investors in this fund will own shares of a variety of real estate investments, with 80% of the fund dedicated to commercial and multifamily properties.

Projected returns are between 15% and 20% per year. The minimum investment is $5,000.

Nonprofit Credit Unions Provide Alternatives to Payday Loans (Nonprofit Quarterly) Rated: A

According to the latest factsheet by the Center For Responsible Lending, over four out of every five payday loans are taken out within the same month of the borrower’s prior loan. In other words, the impetus behind making unaffordable loans is to create demand for additional loans based on deceitful lending practices. As the market for payday lending has grown to $40 billion, the profits from these businesses are directly stripped from low-income consumers with few alternatives. While some legislative efforts have reduced the growth of this market, there are still 12 million US households that use payday loans annually, spending an average of $520 on fees to borrow $375, according to a report from the Pew Charitable Trusts in 2017.

Senate Banking Committee Probes Mulvaney’s Leadership at the CFPB (National Law Review) Rated: A

On April 12, 2018, Mick Mulvaney, the Acting Director of the Consumer Financial Protection Bureau (Bureau) testified before the Senate Committee on Banking, Housing, and Urban Affairs regarding the Bureau’s Semi-Annual Report to Congress.  The Senate Hearing comes the day after Democrats in the House Financial Services Committee questioned Mulvaney about his leadership at the Bureau.  A copy of his written testimony is here.

  • Increased Congressional Oversight. Throughout the hearing, Mulvaney stressed his recommendations for greater oversight to hold the Bureau accountable.
  • Payday Lending. Mulvaney noted, however, that he has the discretion to reach a different conclusion about the payday lending rules than his predecessor, Richard Cordray.
  • Data Security.  While data security was an issue that spanned both sides of the aisle, Republican senators focused on the Bureau’s handling of consumer data while their Democratic colleagues focused on Mulvaney’s position on the Equifax data breach.

As to the Bureau’s handling of data, Mulvaney explained that he has instituted a data freeze and commissioned a report about the Bureau’s data collection and protection.  While the data freeze does not apply to enforcement actions, the Bureau plans “to limit data that we take possession of.  . . . instead of having them send it to us electronically, we are going to look at it.”  Mulvaney acknowledged that “everything that we keep is subject to being lost.”  When Sen. David Perdue (R-GA) asked what data had been lost, Mulvaney declined to publicly comment.

 

Some companies are turning their noses up at Softbank’s huge cash offers (CNBC) Rated: A

SoftBank’s massive Vision Fund said in 2017 that its minimum check size is $100 million. But in the financial-technology market, the number appears to be twice as big.

Executives at a half-dozen fintech companies said the Vision Fund has told them it’s looking to do deals where it can put at least $200 million to work over one or multiple investment rounds. These people asked not to be named because their talks with SoftBank are confidential.

Young Consumers Want Financial Advice (Credit Union Times) Rated: A

Analysts from LIMRA and Life Happens have reported that finding in summaries of results from a joint online survey of 2,082 US. adults

Only 7% of the boomers said they were looking for financial advisors; 41% said they already had advisors and were happy with their advisors.

But 18% of the millennials polled, and 19% of the members of Generation X, said they would like to have advisors and were searching.

Fintechs aiming AI at advisers (Investment News) Rated: B

Dream Forward deploys AI chatbots in its automated 401(k) platform, and is now beta testing a mobile-only version that can answer client questions via text message without requiring customers to log into their accounts.

Laserfiche develops automated workflows for advisers and later this year plans to go one step further with “robotic processes” that will automate even more of advisers’ manual, repetitive front- and back-office tasks.

United Kingdom

Zopa to receive GBP 400mn valuation in new fundraising plans: Sky News (Zephyre) Rated: AAA

UK-based peer-to-peer lender Zopa is in advanced negotiations with potential investors to seek around GBP 50.00 million in funding, helping advance the company to one of the largest financial technology (fintech) businesses in the country, Sky News reported.

Citing sources close to the matter, the broadcaster observed the simple loans and smart investment firm could be valued at GBP 400.00 million as a result of the deal, expected to be led by existing shareholders Wadhawan Global Capital.

In the loop: the continuous woes of traditional retailers (Elite Business) Rated: A

Lender Zopa reportedly targets £400m valuation with new fundraising round

Zopa, the peer-to-peer lender, is planning to raise a £125m round, according to Sky News. This will push the company’s valuation to a soaring £400m and is rumoured to serve as a pre-IPO funding round.

UK VC investment dropped in Q1

Worryingly, it seems as if Brexit has left investors clutching their chequebooks tighter in the first quarter of 2018, according to KPMG Enterprise.

Former P2PFA chair joins Zopa (Bridging & Commercial) Rated: B

Zopa has appointed the former Peer to Peer Finance Association (P2PFA) chair Christine Farnish (pictured above) as chair of its P2P board.

Lending Works Surpasses £100 Million in Online Lending (Crowdfund Insider) Rated: AAA

UK-based peer-to-peer lender Lending Works announced this week it surpassed £100 million in online lending. According to Lending Works, the milestone comes just a little over a year after the platform surpassed £50 million. The lender also reported that 20,000 customers (over 16,000 borrowers and nearly 4,000 lenders) have used its platform.

2018 Venture Capital investment in UK takes a breather after a bumper 2017 (Business East Midlands) Rated: AAA

Following a blockbuster year of over 8 billion USD invested within the UK bolstered significantly by multiple mega-rounds, – 2018 still managed to achieve a healthy start, with one $100 million round pushing the nation’s tally over 1 billion USD. The UK played host to seven of the top 10 European deals in the last quarter of 2017, but managed to scrape just one of the 10 in the first quarter of 2018. Four of the ten biggest European deals done in the first three months of 2018 were located in Germany.

What happens when fintech valuations come back down to Earth? (Financial Times) Rated: A

No tech subsector has reached stratospheric valuations as consistently as financial technology, or fintech. The heady combination of huge markets, a radical platform shift to mobile, and newly vulnerable incumbent dinosaurs (be they banks, wealth managers, or insurers) has attracted over $30bn of annual investment. After a decade of evolution, 2018 looks set to be the first year we’ll see a herd of fintech firms go public. At least ten have filed or talked about an impending listing this year, including TransferWise, Credit Karma, Adyen and Funding Circle.

 

 

‘YOU KICK IT’ AND THE ALTERNATIVE INVESTMENT INDUSTRY (All About Alpha) Rated: AAA

The Alternative Investment Management Association, the London-based organization representing the interests of the world’s alternative investment industry, has issued a new whitepaper about the impact of the exit of the United Kingdom from the European Union.

The United Kingdom has the largest alternative assets industry in Europe, so AIMA is unsurprisingly interested in the consequences of such an exit.

Read the full report here.

Fintech recruits ahead of open banking ‘tsunami’ (Insider) Rated: A

Scottish fintech business The ID Co is on a recruitment drive ahead of an expected ‘tsunami’ with the advent of so-called open banking.

The Edinburgh-based company helps banks make lending decisions by analysing live financial data including online bank statements, cashflow and credit agency records – and was one of the first agitators for open banking.

 

 

 

Time to think outside the bank? (Love Money) Rated: A

Savers subscribed to 8.5 million Cash ISAs in the tax year ending 5 April 2017, down from 10.1 million the previous year, while the total amount saved tumbled by a third to £39.2 billion.

LendingCrowd’s original IFISA product, the Growth ISA, is designed for those who want a quick and simple way of creating a diversified portfolio of secured business loans.

By automatically reinvesting their interest and capital repayments, the Growth ISA has actually delivered an average return for investors of 8.5% – more than three times the rate of inflation – as shown in the chart below.

Source: Love Money

 

China

 

 

Technology and eCommerce Are Now Driving China’s Small Businesses’ to Success (eSeller Cafe) Rated: B

According to the recent survey, Mainland China’s small businesses are the top users of fintech application and in digital payment technologies. More than 84 percent of the survey’s respondents say that at least 10 percent of their overall revenue came via these platforms. Businesses also use fintech to access funds from crowd-sourced funding and peer-to-peer lending.

 

European Union

EU Banks Losing Profits, Lending Ability Because Of Reforms, Report Says (PYMNTS) Rated: A

The Association for Financial Markets (AFME) in Europe wants regulators to curb the development of aggressive bank regulation, according to Reuters reports on Thursday (April 12).

The bank lobby has released a study aimed at reducing regulators’ heavy hand in the financial services market that the group said has made it more difficult for banks in Europe to support the broader economy in the wake of the financial crisis.

The AFME released a report along with PwC which surveyed 13 international banks, accounting for a combined 70 percent of capital market activity around the world, reports said. Analysis found the annual cost of regulation costs $37 billion for 13 banks combined, amounting to 39 percent of total capital markets expenses in 2016.

International

ETHLend Expands to FIAT Lending, Initiating Licensing Process (Finance Magnates) Rated: AAA

ETHLend, a crypto-to-crypto lending platform, has started a process to obtain a license on lending activities in over thirty countries in the European Economic Area (EEA). ETHlend’s initiative will also include other countries as well with its helping expand its current business model (crypto-to-crypto lending) to provide financing in FIAT currencies such as EUR, USD, and GBP against cryptocurrency holdings.

 

Everything You Need To Know About What’s Coming ‘Round The Corner (PYMNTS) Rated: A

In payments and commerce, it’s an eternity. Too long, according to ZestFinance, a company that believes credit needs a machine learning upgrade. Trulioo thinks verification needs to step up so financial institutions can actually “know their customer.” Global cross-border payments between businesses need a major boost to support the trillion dollars worth of transactions they’ve have to support in five years.

Source: PYMNTS

12 Selected Finalists at the 2017 Seedstars World Prize (Tech in Africa) Rated: B

RedCapital from Chile is a crowdfunding P2P lending startup. It offers a platform through which investors get attractive returns at low risk. Furthermore, the SMEs acquire loans at favorable rates. The startup has a risk predictor that allows its investors to realize zero default.

Australia

 

Latitude Financial pledges to grow lending responsibly and profitably (Australia Financial Review) Rated: AAA

Unsecured personal lender and ASX-aspirant Latitude Financial is targeting up to $5 billion of new loans over the next few years as its chief executive Sean Morrissey insists it can grow responsibly amid heightened scrutiny on lending standards.

During a “non-deal roadshow” over the past month, Latitude has met with around 100 fund managers ahead of what is expected to be the biggest ASX initial public offering since Medibank Private in 2014. Latitude’s three shareholders, KKR & Co, Varde Partners and Deutsche Bank, have not yet made a decision on timing for the float, which could value the equity in the group at around $5 billion.

N2N Connect expanding into P2P lending (The Edge Markets) Rated: A

Maintain outperform with an unchanged target price (TP) of RM1.53: N2N announced plans to acquire a 28% interest in Australian-based OurMoneyMarket Holdings Pty Ltd (OMM) through a subscription of new shares for a cash consideration of A$2.8 million (RM8.43 million).

India

Aye Finance receives 30 cr debt funding from Swiss investor (Business Line) Rated: AAA

Online lender from micro businesses Aye Finance said that it has received Rs 30 crore debt funding from from Swiss-based impact investor, BlueOrchard Finance Ltd. The funds would help the MSME lender to further diversify its lending portfolio, reaching out to the long trail of MSMEs in India.

Fintech company Cash Suvidhakeen to enter microfinance biz (Business Line) Rated: A

Cash Suvidha, a start-up fintech company that extends business loans to small and medium enterprises (SMEs) and start-ups, is looking to foray into microfinance business.

According to Rajesh Gupta, founder, Cash Suvidha, the company is exploring the possibility of either acquiring an existing microfinance institution (MFI) or setting up a separate vertical for its MFI business in the next two-to-three years.

“Rural lending is one area which excites me the most,” Gupta told BusinessLine.

Asia

After rounding off 2017 at a remarkable high bolstered by megadeals, Asia continued to see large deals in Q1 2018. These include two US$1 billion+ megadeals which were struck outside China, with Singapore-based Grab’s Series G financing and Go-Jek in Indonesia’s Series E round.

“Singapore saw a record US$2.68 billion of VC investment in Q1 2018, despite a relatively muted level of activity. It is testament to the maturing of Singapore’s ecosystem that a business such as Grab could be built here to tackle the regional market. In addition, the top deals in Singapore also span across diverse sectors, from logistics, internet retail to biotechnology,” said Chia Tek Yew, head of Financial Services Advisory, KPMG in Singapore.

UOB, China fintech Pintec team up to offer credit services in South-east Asia (Straits Times) Rated: A

United Overseas Bank (UOB) has entered into an agreement with Beijing-based financial technology firm Pintec Technology Holdings to set up a joint venture company, Avatec.ai.

UOB will have a 60 per cent stake in the joint venture, the bank said in a regulatory filing on Monday (April 16).

Avatec will have an issued and paid-up capital of up to S$10 million and will be a subsidiary of UOB.

Alternative finance the option for millennials (Financial Standard) Rated: A

Speaking at the AltFi Australasia Summit in Sydney today, OnDeck chief executive Noah Breslow said he can see the Australian alternative finance industry working with $2 billion in new loan volumes by 2020. He expects the industry to oversee about $700 million in new loans this year.

“Compared to five years ago, 70% of small business owners perceive there are more small business lending options today than there were in 2013. It shows how mainstream this type of financing is becoming,” Breslow said.

Equifax group managing director Asia Pacific, Mike Cutter, said 54% of online lending enquiries come from Australians 35-years-old and under. And Queensland is leading the charge, he said.

Singapore Weary Of Forcing Open Banking On FinServ Market (Pymnts) Rated: A

Singapore is ready for open banking, but regulators don’t want to force it on the financial services market, according to reports in Bloomberg.

Bloomberg highlighted how Singapore’s approach differs from open banking initiatives in Europe and Japan, where regulators have imposed requirements for banks and other financial institutions to support the movement of data between their systems and those of third-party financial service providers. Such was the aim of PSD2 in Europe and Open Banking in the U.K.

Singapore fintech startup Silot raises almost US$ 3m in pre-Series A funding (Business Times) Rated: A

SINGAPORE-headquartered fintech company Silot has raised some US$2.87 million from investors Arbor Ventures and Eight Roads Ventures with the completion of its pre-series A funding.

Arbor Ventures is a global early-stage venture capital firm, while Eight Roads Ventures is the proprietary investment arm of Fidelity International.

OJK to relax muscles in next fintech regulation (The Jakarta Post) Rated: B

The Financial Services Authority (OJK) has adopted a more relaxed view toward the financial technology (fintech) industry, believing that rigid policies may only make them obsolete in the face of fast-growing businesses in the digital sector.The financial regulator already has a policy, called OJK Regulation (POJK) No. 77/2016, which governs peer-to-peer (P2P) lending fintech companies.

Flat loan growth positive for banks (The Edge Markets) Rated: A

After missing loan growth targets in 2017, several Malaysian banks have kept expectations more conservative this year, even as Bank Negara Malaysia (BNM) data indicated a moderation in the total outstanding financing growth of 4.1% in 2017 compared with 5.6% in 2016.

 

 

Almost 50 peer-to-peer lending businesses licensed with OJK (The Jakarta Post) Rated: A

OJK deputy commissioner Sukarela Batunanggar said as of April, there were 44 P2P lending businesses that had been granted operational permits by the authority. This figure, he said, was a considerable increase from just 30 P2P lending businesses in January, indicating robust growth in the industry.

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 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

Monday October 30 2017, Daily News Digest

third-party collections

News Comments Today’s main news: Lending Club closes 5 investment funds, rebrands LC Advisors. CommonBond closes $248M securitization, receives AA S&P rating. LendingTree Q3 results. LandlordInvest expects to double IFISA intake. Ant Financial puts off IPO. Renredai volume surpasses 37.8B RMB. New Zealand prepares for open banking. SMART Box to debut in Canada. Today’s main analysis: Don’t forget about loan recoveries. Today’s […]

third-party collections

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Africa

Canada

News Summary

United States

Lending Club Closes Five Investment Funds, Rebrands LC Advisors (Lend Academy), Rated: AAA

Yesterday, Lending Club announced the closure of several funds. The funds were part of what was previously known as LC Advisors, an investment management company dedicated to investing in notes originated by the platform.

Since each fund is a separate legal entity there were many different buyers that participated. While we don’t know the terms of the deals or who purchased these loans, Suri did share with us that there were over 40 bids for the assets and 5 of the 6 funds have been sold at fair value or a slight premium.

 

What happens next?

Lending Club is rebranding its asset management business. Now called LendingClub Asset Management or LCAM for short.

When we asked Suri about positioning the new offerings to investors he stated that their biggest flagship fund under LC Advisors had delivered slightly over 6% annualized since 2011.

CommonBond Closes $ 248 Million Securitization, Secures Inaugural S&P Rating of AA (CommonBond), Rated: AAA

CommonBond, a leading financial technology company that helps students and graduates pay for higher education, today announces the close of a $248 million securitization of refinanced student loans. The offering’s most senior notes achieved AA ratings from Moody’s, S&P, and DBRS – Aa2, AA, and AA (high), respectively – the company’s highest ratings to date.

The transaction was CommonBond’s fifth and largest to date. Investors submitted $1 billion in orders, making the deal more than four times oversubscribed. Goldman Sachs served as structuring agent, co-lead manager, book-runner, and co-sponsor. Barclays and Citi also served as co-lead managers and book-runners on the transaction, while Guggenheim Securities served as co-manager.

The transaction was the first of CommonBond’s to be rated by S&P, who assigned AA ratings to the transaction, alongside similar ratings from Moody’s and DBRS. Moody’s and DBRS also recently upgraded CommonBond’s ratings on previous deals in recognition of the company’s strong credit performance.

Don’t Forget about Loan Recoveries (Orchard Platform), Rated: AAA

To showcase the significance of the third-party debt collection industry in America, the New York Fed publishes in their Quarterly Report on Household Debt and Credit a ‘Third-Party Collections’ chart (below). As of 2017-Q1, between 12-13% of consumers with debt have debt being collected by third-party agencies (blue line). Of those, the average amount of debt in collections is ~$1,400 (red line).

Source: Orchard Platform

The 2015-2016 roll rate matrix is experiencing a higher percentage of loans going from non-performing (60-89 DPD & 90-119 DPD) to current when compared to the 2013-2014 roll rate matrix. This 100 bps difference for 60-89 DPD and 200 bps for 90-119 DPD can be attributed to the improvement of servicers’ collection and outreach programs for delinquent loans.

Source: Orchard Platform

Consumer loans have experienced a monthly recovery rate between 5% to 15% within different portfolios on our platform. Based on this table, a $100M pool of loans would have a $1M valuation difference between a 5% and 15% recovery rate input.

LendingTree Reports Record 3Q 2017 Results; Increasing Full-Year 2017 Guidance (Business Insider), Rated: AAA

LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, today announced results for the quarter ended September 30, 2017.

Third Quarter 2017 Business Highlights

  • Record revenue from mortgage products of $73.8 million represents an increase of 38% over third quarter 2016 driven by strong growth in both purchase and refinance revenues at 87% and 24%, respectively. According to Mortgage Bankers Association, originations industry-wide were down 16% in the comparable period.
  • Record revenue from non-mortgage products of $97.7 million in the third quarter represents an increase of 138% over the third quarter 2016 and increased to 57% of total revenue compared to 43% one year ago.
  • Home equity revenue growth accelerated, increasing $9.0 million, or 176% over third quarter 2016, and marked the eighth consecutive quarter of year-over-year growth exceeding 100%.
  • Personal loans revenue of $25.4 million grew 44% over third quarter 2016 and grew 24% sequentially.
  • Revenue from our credit card offerings grew to $39.4 million in 3Q compared to just $6.6 million in 3Q 2016. On a proforma basis, giving effect to the CompareCards and MagnifyMoney acquisitions as if they had occurred on January 1, 2016, credit cards revenue grew 43%.
  • More than 6.5 million consumers have now signed up for free credit scores and savings alerts through My LendingTree, and the volume of new enrollments accelerated. Revenue contribution from MyLendingTree grew 96% in the third quarter compared to the prior year period as new features and smarter savings alerts are driving increased engagement.

Third Quarter 2017 Financial Highlights

  • Record consolidated revenue of $171.5 million represents an increase of $76.9 million, or 81%, over revenue in the third quarter 2016.
  • GAAP net income from continuing operations of $10.1 million, or $0.74per diluted share.
  • Record Variable Marketing Margin of $59.1 million represents an increase of $22.8 million, or 63%, over third quarter 2016.
  • Record Adjusted EBITDA of $34.7 million increased $16.2 million, or 88%, over third quarter 2016.
  • Adjusted Net Income per share of $1.17 represents growth of 65% over third quarter 2016.
  • During the quarter, the company repurchased 42 thousand shares of its stock at a weighted-average price per share of $237 for aggregate consideration of $10.0 million. As of September 30, 2017, the company has $38.7 million in repurchase authorization remaining.

Business Outlook – 2017

LendingTree is revising Revenue, Variable Marketing Margin and Adjusted EBITDA guidance for full-year 2017, as follows:

  • Revenue is anticipated to be in the range of $603 – $608 million, representing growth of 57% – 58% over full-year 2016 and an increase from prior guidance of $580 – $590 million.
  • Variable Marketing Margin is anticipated to be $202 – $205 millioncompared to prior guidance of $190 – $195 million.
  • Adjusted EBITDA is anticipated to be in the range of $111 – $113 million, up 59% – 62% over full-year 2016 and an increase from prior guidance of $103 – $106 million.

McKinsey Report on Financial Services Big Tech vs. The Big Banks (PeerIQ), Rated: AAA

A recent report from McKinsey on the global banking industry addressed the threat banks face from technology firms. Amazon stock jumped 13% on earnings and reporting that Amazon is increasing its lending footprint. Tune into Bloomberg Radio archive to hear more about this topic as PeerIQ’s CEO discusses the threats and opportunities of big technology with Bloomberg’s Lisa Abramowicz and Pimm Fox.

Summary of Amazon’s Lending Business
Amazon finances small businesses that sell products through the Amazon marketplace on an invitation-only basis. Interest rates range from 6 to 15%, tenor ranges from 4 to 6 months, and loan size is up to $750K.

Although there is no segment-level P&L reporting for the lending unit, loss-rates according to Amazon’s Peeyush Nahar have been “very, very small.” Amazon’s lending makes up a small part of their business (e.g., $3 Bn in loans to date vs. Amazon’s $136 Bn annual revenue). Amazon is also not directly financing the consumers indicating substantial opportunity to grow.

Owning the Customer
The most compelling advantage big tech has outside of data and customer acquisition are the creation of entirely new channels that banks cannot easily replicate.

A few examples:

  • In-Home: Large consumer tech firms occupy the most intimate space of consumer through services such as Amazon’s Echo, Google’s Home, or Apple’s Siri. These platforms represent a trojan horse for delivering new products and services in a highly personal and exclusive manner.
  • Personal assistants that are increasingly anticipatory and have access to the calendars, preferences, and daily lives of consumers.
  • Mobile and virtual wallets which shift the battleground from legacy “share of wallet” and “primary card” concepts to mobile platforms and virtual wallets
  • Virtual spaces created via social media including Facebook or services such as Lyft or Uber which enable unobstructed access to the consumer.

Anticipation For Amazon’s SMB Lending Disruption Grows (PYMNTS), Rated: A

Technology giants like Google and Amazon, which gained their market muscle from non-finance-related ventures, are slowly stepping into the space. Their next target could be small business lending, and according to some experts, it’s fast approaching the market.

Amazon in particular is positioned to dominate. The company has already lent more than $1 billion to merchants selling on its platform, and, just as alternative lenders put the pressure on traditional FIs with their quick surge into the market, the Amazons of the world will do the same, Mills predicted.

Chatter Picks Up Steam

Karen Mills’ statements have found new backing in the latest banking report released by McKinsey & Co. this week. New reports in Bloomberg on Wednesday (Oct. 25) said the report identifies Amazon as the newest, biggest threat to the small business lending status quo.

The report points to sagging return on equities for the banks, which have not been able to surpass 10 percent since the 2007/2008 global financial crisis. The FIs that collaborate with those FinTechs could boost their return on equities to 14 percent and even higher if they develop their own solutions in-house.

Amazon, Tech Companies, Are Challenging Big Banks (Bloomberg), Rated: A

GUEST: Ram Ahluwalia, CEO and co-founder of Peer IQ, on how Amazon and other big tech companies are challenging big banks.


Why Student Loan Companies Like SoFi Are Becoming Useless (Fortune), Rated: A

In fact, starting this year the entire business model of private student loan refinancing may prove to be less viable.

First, only a tiny percentage of all student loan borrowers can reap significant savings from private loan refinancing. And second, the private refinance boom was created by a historically large spread between federal and private rates. As today’s federal student loan rates fall and private loan rates rise, that gap is shrinking.

SoFi, for example, claims the average lifetime savings of borrowers who have refinanced with them is $22,359. I tried using SoFi’s own calculator to arrive at such a figure, and found that a borrower paying 8% on $100,000 in loans with 10 years remaining could refinance down to 4.5%, saving up to $177 a month or $21,285 over the life of the loan.

Consumer finance site NerdWallet indicates that the average approved borrower at SoFi has an annual income of $130,000 and an average credit score of 766. From this we can infer what kind of borrowers fit SoFi’s profile: lawyers, doctors, MBAs, and other professionals who are high earners.

It turns out that private lenders are targeting a very small slice of student loan borrowers. To put things in perspective, as of September 2017, only 6.9% of all working professionals make $130,000 or more per year.

Credit Sesame Raises $ 42 Million in Growth Funding (PR Newswire), Rated: A

Credit Sesame, a fast-growing, personalized credit service and financial wellness company, announced today it has raised over $42 million in equity and venture debt. The funding comes from existing and new investors including Menlo Ventures, Inventus Capital, Globespan Capital, IA Capital, SF Capital, among others, along with a strategic investor. The funds will be used to accelerate the company’s growth, hiring, and member acquisition, and to advance its analytics, robo-advisor and machine learning technologies.

There’s something broken in small-business lending (American Banker), Rated: A

Banks often tout the strength of their small-business loan programs. So why are their small-business customers so hacked off?

It’s hardly an enigma, according to J.D. Power. The thing that sticks in the craw of most small-business owners is that their banks have not assigned account representatives to take care of their needs, the market research firm said in its latest Small Business Banking Satisfaction Study.

McDonald’s Owners Settle PA Payroll Card Class Action (PYMNTS), Rated: A

McDonald’s franchise owners in Pennsylvania have settled a lawsuit filed in 2015 over their use of payroll cards, news reports on Wednesday (Oct. 25) said.

Owners of 16 McDonald’s locations across the state have agreed to pay nearly $3 million to hourly employees that joined a class action lawsuit against the fast food restaurant owners’ use of payroll cards they said were riddled with unfair fees. Employees were forced to pay fees whenever they went to an ATM to withdraw funds from their payroll cards, as well as when they made online bill payments.

The class action named the McDonald’s franchisees as well as the card-issuing banks, JPMorgan Chase & Co. and JPMorgan Chase Bank N.A., as defendants.

BankMobile’s long road to profitability (American Banker), Rated: A

What will BankMobile’s future look like once it is spun off from Customers Bancorp?

Customers launched the digital-only bank, designed to target millennials and technophiles, in January 2015. Since then, BankMobile has adapted an app for Apple Watch, formed an innovation unit and created a financial literacy and self-help podcast series.

Overview of US real estate platforms (online lenders) (MonJa), Rated: A

Having said that, the real estate construction sector is showing no signs of slowing down and in 2015 it reached a size of $1.113 trillion as per the U.S. Census Bureau. There was an evident demand-supply mismatch in the market that led to the rise of alternative online lenders.

Source:
  • LendingHome () – It has raised over $166 million in various rounds of funding and has originated loans in excess of $1.75 billion.
  • Fundrise () – This incredibly efficient new model enables access to a diversified portfolio of private real estate assets with as little as $500. It has raised over $55 million and has invested $1.4 billion in real estate so far.
  • Sharestates (www.sharestates.com) – It has so far funded $656 million.
  • RealtyShares (www.realtyshares.com– It has raised over $100 million in various rounds of funding and over $500 million has been invested through its platform.
  • Patch of Land (patchofland.com– It has raised almost $25 million in different rounds of funding and has done over $366 million in loan origination.
  • RealtyMogul.com (www.realtymogul.com– It has raised over $46 million in funding and over $300 million has been invested through its platform.
  • GroundFloor () – In 2015, GroundFloor became the first issuer to be qualified by SEC for selling private real estate debt investments to non-accredited investors.
  • Allrise Financial Group Inc () – It has originated $ 162 million in loans so far and has a network of 169 borrowers in four different countries.
  • CrowdStreet (www.crowdstreet.com) – It has raised over $5.5 million so far and has done $155 million in equity loan funding.
  • Money360 (– The company’s total loan origination stood at $70 millionin 2015. It has raised almost $165 million in debt financing from multiple investors.
  • Wealth Migrate (www.wealthmigrate.com– It has raised $5.6 million so far and over $64 million has been invested through its platform.
  • Roofstock (www.roofstock.com– It has raised over $68 million in funding.
  • PeerStreet () – It has raised over $ 21 million in various rounds of funding.
  • AssetAvenue (www.assetavenue.com– It has raised over $19 million so far.
  • AlphaFlow (www.alphaflow.com) – It is the first and the fastest growing automated real estate investment service. It managed to raise $6.4 million as seed funding from various investors notably Y Combinator, FundersClub and Red Swan Ventures.
  • Acquire Real Estate (www.acquirerealestate.com– It has raised $6 million in various rounds of funding.
  • EarlyShares (www.earlyshares.com)  It has raised over $5.8 million in funding.
  • Fundthatflip (www.fundthatflip.com– It has raised over $2 million so far.
  • RealCrowd (www.realcrowd.com) – It has raised $1.6 million.
  • DiversyFund () – It has raised over $1.2 million so far.

PayNet Provides Expert Testimony to U.S. Congress on The State of Fintech (BusinessWire), Rated: A

PayNet, Inc., the nation’s provider of credit assessments on privately held commercial lending businesses, addressed The Congress of the United States, U.S. House of Representatives, Committee on Small Business to testify on online lending’s role in improving small business capital access.

New mobile application designed to reinvent personal credit (Muskogee Phoenix), Rated: A

A recent study conducted by Affirm, a company intent on reinventing personal credit, found that 67 percent of 1,600 U.S. adults surveyed expressed personal fears about debt. Almost a third — 32 percent — are fearful because they don’t know how long it would take to pay off that debt, and 72 percent of those who have carried a credit card balance worried about how much their purchases would end up costing after interest was included.

Findings like those and other factors prompted PayPal co-founder and serial entrepreneur Max Levchin to develop and roll out a new mobile application designed to reinvent personal credit. The Affirm app — rolled out this week and available for download from the App Store and Google Play — allows customers to split big online purchases into smaller, fixed payments with a virtual card.

Braviant Holdings Announces $ 40 Million Credit Facility with Redpoint Capital Group (PR Web), Rated: A

Braviant Holdings, a leading fintech startup that offers analytics and technology-driven credit solutions for underserved Americans, has entered into a $40 million Senior Secured Credit Facility with Redpoint Capital Groupfor its wholly-owned subsidiary, Balance Credit.

SBA Approves a Record $ 869 Million in Loans to NJ Small Business (Cap May County Herald), Rated: A

The U.S. Small Business Administration approved a record $869 million in loans to New Jersey small business owners during the agency’s fiscal year 2017(the period from Oct. 1, 2016 thru Sept. 30, 2017). Nationally SBA approved over 68,000 loans for over $30 billion, during the past year.

This past year, SBA has launched its online lender referral tool Lender Match. “The idea is to always be thinking of streamlining and simplifying whenever possible, when it comes to giving entrepreneurs access to capital,” said Titone. “In 2017, SBA loans have helped New Jersey companies to create 8,666 jobs and retain another 10,671 jobs. When you look at it that way, our programs are having significant impact on our local economy.”

Genesis Financial Solutions, Inc. agrees to service Signet Jewelers’ non-prime consumer accounts (Genesis Email), Rated: A

Online lenders can get needed credit to small businesses (The Hill), Rated: A

This challenge has resulted in a global small-business financing gap, estimated by the International Finance Corporation (IFC) to be between $2.1-$2.6 trillion in developing countries.

Four leading trades — Electronic Transactions Association, Innovative Lending Platform Association, the Marketplace Lending Association and the Small Business Finance Association — commissioned a comprehensive survey of U.S. small business owners from Edelman Intelligence.

The survey found that a large majority (70 percent) of small business owners believe there are more credit options today compared to five years ago, and 97 percent of those feel that the growing number of financing options is a good thing.

The Kauffman Foundation has found that even in the depths of the U.S. financial crisis, young and small firms (fewer than five years old and with less than 20 employees) 

State of Small Business Lending: 2017 Spotlight on Women Entrepreneurs (Fudera), Rated: A

After reading stats like women entrepreneurs receive only 16% of all traditional small business loans, we wanted to know: do these same stats also ring true in online business lending?

Our 2016 report, which can be revisited here, found that women entrepreneurs who applied for financing through Fundera were applying less, getting approved less often, receiving smaller loan amounts, and paying more for financing than their male counterparts.

In our 2017 report, you’ll find some things have remained lamentably the same as last year. But, we’re excited to say that in some of the most important areas, there have been positive and significant shifts since 2016.

  • Women are now being approved for larger loan amounts than their male counterparts in certain product categories.
  • Women are receiving offers with lower APR than men in certain product categories.
  • Women business owners still apply for business financing less frequently than male business owners do, and when they do apply for financing, women still ask for less than their male counterparts.

A startlingly low 28% of applicants at Fundera are women. However, since our last report, this number has gone up from 25%. Additionally, our last report showed that female entrepreneurs ask for roughly $35,000 less in business financing than men. Since then, the number has decreased only slightly to less than $33,000.

In The Battle For Low-Fee Financial Advice, DIY Beats The Robos (FA-Mag), Rated: A

When customers open an account at one of these automated investing firms, they’re put into funds from companies like Charles Schwab Corp. and Vanguard Group and charged a fee of anywhere from 25 to 50 basis points. In return, they get some extra benefits, like tax loss harvesting, which can result in a lower tax bill, and automatic re-balancing at no extra cost.

But there’s a catch, the funds that customers buy through these advisors are all available on free trading platforms such as Robinhood Financial, where there’s no added cost.

SelfScore rebrands as Deserve, raises $ 12m funding (Banking Technology), Rated: A

Consumer analytics company SelfScore has rebranded as Deserve, writes Julie Muhn at Finovate (Banking Technology‘s sister company).

The California-based company continues to be committed to providing underbanked Americans with access to credit, and to fuel that mission, Deserve has received $12 million in funding. The round was led by Accel, with participation from Aspect Ventures, Pelion Ventures, Mission Holdings, Alumni Venture Group, and GDP Venture, and brings Deserve’s total funding to $27 million.

Mortgage lenders: Here’s your blockchain primer (Housingwire), Rated: A

Blockchain is particularly relevant to the lending market. Lending is a contract-intensive process with an extensive lifecycle; it carries significant risk and limited trust across its value chain – from origination to funding through to the fulfillment and servicing of the loan.

Moreover, the integration of blockchain with digital lending ensures transactions are tracked in an open and transparent way. Banks and lenders get direct visibility into exactly what happened during the lending process – who was involved, who had control over the authoritative copy of the digital assets and ultimately, who owns the value of those assets, as required by law.

Jiko Raises $ 7.7m in Series A Funding (FINSMEs), Rated: A

Jiko, an Oakland, Calif.-based personal bank startup, raised $7.7m in Series A funding.

The round was led by Upfront Ventures and Radicle Impact with participation from Social Capital, 500 Fintech, Digital Currency Group, Core Innovation, Embark Ventures and Story Ventures.

Templum Raises $ 2.7M in Seed Funding (FINSMEs), Rated: A

Templum, LLC, a NYC-based fintech startup facilitating regulatory compliant ICOs as securities and secondary trading of digital assets, closed a $2.7m seed funding round.

The round was led by Raptor Group, Galaxy Investment Partners, Blockchain Capital and firstminute.capital.

Digital bank for teenagers raises $ 5m in Series A investment round (AltFi), Rated: A

Current, a new mobile-only banking platform for parents and teenagers, has raised $5m in a Series A funding round led by QED Investors.

 

10 Takeaways from the ULI Fall Conference 2017 (National Real Estate Investor), Rated: A

Touching on the recent boom in real estate crowdfunding firms, John McNellis, co-founder of Palo Alto, Calif.-based development firm McNellis Partners, divided the crowdfunding sector into two groups: firms that simply connect investors with developers and firms that invest in projects themselves. The first concept should work in the long term, he noted. But when it comes to crowdfunding firms underwriting real estate deals, McNellis pointed out that it takes at least a decade in the business to become a reliable underwriter. “To expect these 20-year-olds who are good at tech to be good at underwriting” is unrealistic, he said. McNellis added that established developers normally already have financial partners that they prefer to work with. The developers most in need of crowdfunding dollars would be either those just starting out in the business or developers with a spotty track record.

Appetite grows for riskier MPL collateral and deeper sub notes (Global Capital), Rated: A

The decline in underlying collateral quality — a theme across wider consumer ABS sectors — has been playing out in marketplace loan ABS, with recent deals from Prosper, Marlette Funding and Avant featuring a growing proportion of loans taken by borrowers with credit scores of less than 680.

Local veterans get help launching businesses through crowd lending (WFLA), Rated: A

There is now a way anyone can help veterans launch their new life through a concept called StreetShares.

You can invest just a few dollars or thousands to the fund. Investors can earn 5 percent on their money.

For Shane and Melissa Underwood, a $20,000 loan allowed them to purchase a piece of equipment that launched their small business Driveshaft Specialists.

3 Places Women-Owned Businesses Turn for Financing (NAV.com), Rated: A

Crowdfunding

A 2017 crowdfunding reportby the National Women’s Business Council, for example, found that 47% of successful campaigns on the popular crowdfunding platform Indiegogo were run by women.

Online Lenders

Keep in mind that online business loan shopping sites may operate in a variety of ways:

  • Lead generation sites will simply gather your information then sell it to various lenders, which may then call or email you with information or offers.
  • Online lenders may offer a specific set of loan products aimed at specific types of borrowers (for example, those with significant credit card sales). Remember: just because you can’t qualify with one lender doesn’t mean you can’t quality with others.
  • Online brokers may try to help get you funding with various lenders with whom they have a relationship. They may charge a significant fee for this service, so be sure to ask.
  • Online marketplaces will present you with options and allow you to choose which ones seem right for your needs. Ideally, you’ll also see which loans are best matched to your qualifications. (Disclosure: Nav’s small business loan marketplace operates this way.)

Zeus CrowdFunding Year-End Hard Money Offer Helps Real Estate Investors Finish 2017 Strong (PR.com), Rated: B

Zeus CrowdFunding once again offers borrowers what other lenders won’t – low rates designed specifically for the real estate investor and their year-end needs. For a limited time, qualified applicants will pay only six percent interest for the first six months of the loan term.

The company loans up to 100 percent of a project’s cost to qualified applicants in as little as four days.

On Deck Capital, Inc. (ONDK) Set to Announce Quarterly Earnings on Wednesday (Ledger Gazette), Rated: B

On Deck Capital, Inc. (NYSE:ONDK) is scheduled to be issuing its quarterly earnings data before the market opens on Wednesday, November 1st. Analysts expect the company to announce earnings of $0.03 per share for the quarter.

MākuSafe Raises $ 1.25m Convertible Funding Round (FINSMEs), Rated: B

MākuSafe, a West Des Moines, Iowa-based Insurtech startup, raised $1.25m convertible note round of funding.

Wells Fargo Adds Smart Beta to FA Platform (Financial Advisor IQ), Rated: B

As banks rush to catch a wave of robo technologies, Wells Fargo Advisors is rolling out a factor-based approach designed for advisors and their clients.

The wirehouse has launched an expansion to its electronic model portfolio services platform, according to Patty Loepker, WFA’s head of research directed advisory programs. The new managed accounts program features allocations built around smart beta ETFs.

Newable Business Finance partners with Open Risk Exchange (Fintech Finance), Rated: B

Litigation Finance Specialist Pravati Launches Third Fund (FINAlternatives), Rated: B

Litigation finance specialist Pravati Capital has launched its third fund vehicle to capitalize on opportunities in the burgeoning litigation finance sector.

The new fund, named Pravati Credit Fund III, will invest in mature stage, high-probability, high-value cases or case portfolios where there is established liability and precedent for settlement, according to a statement.

United Kingdom

LandlordInvest expects to double IFISA intake this tax year (P2P Finance News), Rated: AAA

LANDLORDINVEST is expecting its Innovative Finance ISA (IFISA) intake to double this tax year.

The property peer-to-peer platform, which launched its IFISA in January, said it attracted £419,385 in the previous tax year and was hoping to see that double to nearer £1m.

Could this platform satiate investor appetite for manual lending? (P2P Finance News), Rated: A

LENDINGCROWD has been ranked as an alternative to Funding Circle for investors looking to continue with manual lending, as they both offer similar interest rates and borrower profiles.

Peer-to-peer analyst Orca said that before Funding Circle shifted to manual lending last month, 27 per cent of investors used the manual option, suggesting there is demand for this functionality.

UK Treasury: Cryptocurrencies Pose Low Terrorist Financing Risk (Coindesk), Rated: A

The U.K. government’s economic and finance ministry has released a new policy document stating that cryptocurrencies like bitcoin pose a “low risk” for terrorist financing.

The paper further cited the peer-to-peer lending industry, which it said has the potential to be used as a “terrorist financing tool,” though no incidences have been observed in the U.K. to date.

Regtech and financial inclusion: “For Millennials opening a bank account online is a no-brainer” (Bob’s Guide), Rated: A

How did you find your way to founding Onfido?

Initially, my co-founders and I had experience verifying identity documents meant for an offline world. The current way of verifying documentation for a standard current account requires hours and hours of face-to-face in-branch and still not getting approved; it’s no wonder there’s a 40% drop-off.

Of the 7 billion people in the world, Facebook has brought their social identity online, LinkedIn has brought their professional identity online and now we’re looking to bring their legal identity online.

How exactly are Onfido providing something that mainstream banks should take notice of?

Very simply, we help business verify the identity of the people they are onboarding digitally. That can be with a photo of their government issued ID that the user can send with a smartphone. We cover 600 IDs globally and use machine learning to verify whether the ID is genuine or not. There are three steps to our core technology. The first, we extract the details, see if the patterns are consistent and compare them to the millions of historically computed IDs. The second step is asking the user to take a photo or short video of their face, which we compare to the photo on their identity document for similarity. The third step is to check that their details – name, date of birth and address – are consistent with records on multiple databases. Altogether this verifies the person is who they claim to be and, end-to-end, takes two minutes.

We use a hybrid machine/human approach – the technology is able to automatically process the vast majority of documents, and the small number of outliers are passed to our expert human team for review. It means that human resource can be put to more effective use, and would heavily cut down on the 30,000 people employed by Citibank, for example, who just work on onboarding and compliance checks.

As a Millennial yourself, how much of a role do you think generations play on attitudes to banking?

Millennials are just so used to doing absolutely everything on their phone.

Fintechs have really monopolised the millennial market and they’re building the models to ensure they keep that market for the next 15-20 years. That’s where PSD2 becomes very relevant as a leveller of the playing field for the market – it’ll increase healthy competition.

Silicon Valley investors double funding for UK tech after Brexit (The Telegraph), Rated: A

Silicon Valley investors have more than doubled funding for UK technology companies this year, in a sign of strengthening links with the world’s biggest tech hub after the Brexit vote.

British start-ups received £884.8m from venture capital backers based in San Francisco and the Bay Area in the first nine months of this year, compared to £342m in the whole of 2016, according to London & Partners, the London mayor’s promotional agency.

London fintech firms set for record investment despite Brexit (Descrier), Rated: A

According to the latest figures from London & Partners (L&P), the Mayor of London’s official promotional firm, investors from around the world have backed London-based fintech firms to the tune of £825m so far this year. This is a positive sign for the industry after UK fintech investment plummeted by more than a third in 2016 as investors put off decisions in the wake of the Brexit vote.

One of the biggest London fintech success stories, currency exchange platform Transferwise, is reported to be in discussions with investors to raise a further £77m, which would value the company at more than £1.2bn.

What the peer-to-peer lending industry learnt from Lego (City A.M.), Rated: A

Strange as it may seem, using the analogy of Lego may be the best way to demonstrate why we believe the peer-to-peer (P2P) industry also isn’t – and can’t be – a one trick pony. While some see the industry as a fad that is set to become redundant, there are many reasons why this isn’t the case.

P2P platforms are exploring a range of new and old ways, and their aim is to create something which is more equitable, satisfactory and useful for everyone.

Homelyfe Raises £2.4M in Seed Funding (FINSMEs), Rated: B

Homelyfe, a London, UK-based insurtech startup, raised £2.4m in seed funding.

Uber appoints former Bank of England senior adviser as non-executive UK chair (Independent), Rated: B

Uber has appointed a former senior adviser to the Bank of England as non-executive chair in the UK, as it endeavours to clean up its image and “make things right” after Transport for London last month revoked the ride hailing company’s licence to operate in the city.

Laurel Powers-Freeling, who will take up the newly created position, is currently senior independent director at online lender Atom Bank.

Quantuma Joins UK Peer to Peer Finance Association (Crowdfund Insider), Rated: B

Quantuma, a corporate recovery and business advisory firm that works with several peer-to-peer lending platforms, has joined the UK Peer to Peer Finance Association(P2PFA). Earlier this year, the P2PFA announced the creation of Associate Membersto broaden its membership beyond strict lending platforms.

China

Alibaba-Affiliate Ant Financial Isn’t Itching to Go Public (WSJ), Rated: AAA

Flush with cash, Chinese financial-technology giant Ant Financial Services Group is putting on hold plans for an initial public offering while it steps up investments in everything from startups to artificial intelligence, according to a senior company executive.

Investors and analysts have been expecting Ant to go public sometime in 2018. The Hangzhou-based company last raised $4.5 billion from private investors in April 2016 in a deal that gave it a $60 billion valuation—and its business has since expanded significantly.

WeiyangX Fintech Review (Crowdfund Insider), Rated: A

51 CreditCard (u51.com), an online platform for credit card bill management, is reported to be listed on Hong Kong Exchanges and Clearing Limited (HKEX) in 2018, aiming to raise at least 500 million dollars.

According to a report of China Daily, the credit database of PBOC has collected credit information of more than 840 million individuals as well as more than 19 million companies and organizations by the end of April. Among these agencies, only 255 licensed micro loan companies have been connected to the company credit information system and 156 to the individual credit information system.

From November 1st, customers will be able to pay their train tickets by using WeChat Pay through the official booking website 12306.com or in the train station (booking office/self-service ticket machine).

On October 26thBihubao.com reached cooperation with France’s No.1 mutual insurance provider VYV.

On October 18th, Trustdata released the long-awaited “Trustdata: China Consumer Finance Analysis Report (2017)”. The document presents a comprehensive review of consumer finance development in China, makes a deep analysis of payday loan, installment credit and consumer behaviors, and proposes a new concept called “Consumer Finance Development Index”.  Statistics from the research notes that, by the end of last month, the credit scale of consumer finance in China has reached more than 110 billion yuan with 3.7 million registered users.

Chinese fintech firms set for flurry of IPOs in US, HK (China Daily), Rated: A

The phenomenon of “Chinese companies lining up for an IPO in the United States or Hong Kong” has re-surfaced recently, Tiger Brokers, an online brokerage helping Chinese investors trade US- or HK-listed stocks, told chinadaily.com.cn Thursday.

Beijing-based Jianpu Technology Inc, which is 100 percent controlled by RONG360 Inc filed its preliminary prospectus with the US Securities and Exchange Commission, without the estimated IPO price range, on Oct 20.

Prior to Jianpu, Chinese online small consumer credit provider Qudian Inc made its debut on the New York Stock Exchange on Oct 18. Qudian priced its IPO of 37,500,000 American depositary shares (ADSs) at $24.00 per ADS for a total offering size of about $900 million, according to Xinhua News Agency. Qudian closed at $26.39 Wednesday after diving 7.24 percent, still above its IPO price.

Total Volume of Renrendai Surpass 37.8 Billion RMB (Xing Ping She), Rated: AAA

Recently, Renrendai issued its performance report for the third quarter of 2017.According to the report, the cumulative turnover of the platform surpass 37.88 billion RMB, with 524 thousand transactions in total.

More details, Renrendai remained steady growth in the third quarter. The volume on the platform reached 6.51 billion RMB this quarter, a 109% increase over the same period last year, and the amount of money that investors earn is up 55% from the same period last year. In addition, the per capita borrowing amount on the platform is 80.8 thousand RMB, which represents the capital requirements of small business owners and self-employed people in the class, and always below the national regulations of loan balance ceiling of $200000.

Qudian Stock Fell Below its Offer Price (Xing Ping She), Rated: A

On 27th October, the shares of Qudian tumbled again, closing down $3.59 to $22.8, down 13.6% below the offering price of $24 a share.

The company has fall into constant questioning just after it landed in the SEC. Luo Min, the CEO of Qudian, responded several questions through an interview Qudian’s Luo Min Respond To All, but this move has raised more query. Many media and media outlets gathered to lambast Luo Min for “lying” in her response.

On 23th October, Luo Min avoided all the media interviews again. Since then, the shares of Qudian began to slump, which closed at $26.39 on 26th Oct, down nearly 20 percent from the opening price of $31.89 on Wednesday.

Chinese fintech Rong360 targets 0m US IPO for subsidiary Jianpu (Deal Street Asia), Rated: A

Jianpu Technology Inc, a wholly-owned subsidiary of Chinese fintech firm Rong360, has filed for a $200 million IPO in the US. Goldman Sachs, Morgan Stanley and JP Morgan are bookrunners for the deal, according to a stock exchange filing.

Read more at:

China to tighten regulation of fintech consumer loans (Financial Times), Rated: A

China is preparing to tighten regulation of online consumer lending as part of a campaign against financial risks, dealing a possible setback to Chinese fintech groups that hope to sell shares in the US.

Household debt in China remains low as a share of GDP, and authorities have encouraged growth of consumer credit as a way to rebalance the economy towards consumer spending, but now concerns are rising about irresponsible lending practices online.

Online consumer lending has replaced peer-to-peer lending as the trendy new area in Chinese fintech, as a regulatory crackdown on P2P reduced that sector’s profitability. Short-term consumer loans outstanding in China grew by Rmb1.49tn ($225bn) through the first nine months of this year, compared to an increase of Rmb830bn for all of 2016, according to PBoC data.

China a fast learner when it comes to artificial intelligence-powered fintech, experts say (SCMP), Rated: A

Chan also said the rapid growth of new fintech services, such as peer-to-peer lending marketplaces and online money market funds, was made possible by a lack of innovation by the country’s traditional banks in addressing the needs of not only the average consumer, but also many small and medium-sized enterprises.

High-flying start-up Ant Financial Services Group, which runs online payments service Alipay and money market fund Yu’ebao, has made AI a key driver for expanding its businesses and improving customer service.

China was the world’s second-biggest investor in AI enterprises last year, injecting US$2.6 billion into the sector, according to the state-run think tank, Wuzhen Institute. The United States topped the list with US$17.9 billion in investments.

Source: South China Morning Post

Sesame Credit, fintech and social credit scores in China (Technode), Rated: AAA

What would your reaction be if you wanted to get a loan and your bank asks to go through your Facebook profile? In China, this is already happening on a large scale, but it’s not banks that are doing the rating—it’s the country’s burgeoning fintech companies. And it’s not Facebook they are looking at—its social platform WeChat and shopping website Taobao.

Social credit scoring analyses data from non-traditional sources: social media, online shopping, payment apps, cell phone accounts, and more. This type of scoring is meant to fill a gap for people who want a loan but don’t have any way of proving they can repay one. In order to gauge whether you are creditworthy or not, the score can take into account a number of variables: who your friends are, what you buy, whether pay your bills on time or even how much time you spend reading the user agreement. It’s like FICO but decidedly more creepy.

Alibaba was once a kind of shadow lender too. The company first started building its own credit scoring model to provide loans to Taobao vendors. For this, it relied solely on the platform’s ability to gather big data—transactions, user ratings, market positioning, and others.

Sesame Score (screenshot above) tracks five areas: identity information, such as information on users’ education and work, ability to keep financial obligations, credit history, behavioral preferences like shopping, money transfers, and connections with other people. In return, it offers deposit-free bike and power bank rentals as well as other benefits.

Source: Technode

China’s Social Credit System And P2P Lending: An Opportunity For Yirendai (Seeking Alpha), Rated: A

Yirendai (YRD) is a Chinese fintec company focused on facilitating unsecured loans. Leveraging the experience of its parent company, CreditEase, Yirendai has facilitated more than RMB 47 billion (US$7 billion) of loans since commencing operations in March 2012.

Financials and performance

Yirendai’s core business has seen rapid growth, facilitating over RMB 20 billion(US$3 billion) in loans in 2016, up 112% from 2015. The most recent forecastfrom the company expects loan volume to continue to grow through 2017, with RMB 35-37 billion (US$5.3-5.6 billion) this year. Earnings have been strong and growing as well, with net income for the six months ending June 30, 2017, rising from RMB 392 million to 620 million (US$58.9 million to 93.2 million) over the same prior-year period, translating to diluted earnings per ADS of RMB 6.71 to 10.26 (US$1.01 to 1.54) for the same periods.

China’s upcoming Social Credit System

Presently, eight companies have been licensed to develop algorithmic SCS scoring systems, including China Rapid Finance, a partner of social network TenCent (OTCPK:TCEHY) and Sesame Credit, which is run by Ant Financial, an Alibaba (BABA) affiliate.

European Union

 

Italian peer-to-peer lender launches its own fund, targets €100m raise (AltFi), Rated: A

Italian P2P firm BorsadelCredito.it has followed in the footsteps of its UK antecedent Funding Circle by launching a closed-end fund. The unlisted fund, which is called Colombo, hopes to raise €100m to invest across a 5 year timespan, and is managed by BorsadelCredito.it (through a vehicle named ART SGR SpA). The fund’s custodian bank is Caceis Bank.

By investing in Italian SME loans, originated exclusively by BorsadelCredito.it, the fund will target a yield of 5 per cent (5.5 per cent pre-tax).

Europe’s fintech lenders don’t want to become banks (yet) (AltFi), Rated: A

To be or not to be a bank? That was the question asked by Funding Circle boss Samir Desai at the AltFi Europe Summit in London earlier this year (video below).

Desai left the audience in no doubt that Funding Circle has “no plans” to launch a bank. Later that same day, Zopa CEO Jaidev Janardana delivered his keynote: “Why we’re launching a bank”.

José Rego, who runs Portuguese P2P firm Raize, sees the issue as black-and-white.

“By definition, if you become a bank, you stop being an alternative lender,” he said. “Becoming a bank is an extremely complex and very expensive strategic decision which typically takes into consideration other elements besides the equity value generated by the alternative lending. Only a select number of platforms are likely to have the opportunity to become banks (if they wish so). So, in reality, I don’t think it should be something we’re thinking about within the industry.”

CLP Initial Coin Offering Announcement (Cointelegraph), Rated: B

Crypto Lending Project (CLP) announces its crowdsale campaign.

Name: CLP coin

Start Date: 1st November, 2017

End Date: 30th November, 2017

International

Global Assets under Management set to rise to $ 145.4 trillion by 2025 (Finchannel), Rated: AAA

In a new report ‘Asset & Wealth Management Revolution: Embracing Exponential Change’, PwC anticipates that global Assets under Management (AuM) will almost double in size by 2025, from US$84.9 trillion in 2016 to US$111.2 trillion by 2020, and then again to US$145.4 trillion by 2025.

By 2025, AuM will have almost doubled – rising by 6.2% a year, from US$84.9 trillion in 2016 to US$145.4 trillion in 2025, with the fastest growth seen in the developing markets of Latin America and Asia Pacific.

While active management will continue to grow and play an important role, reaching $87.6 trillion by 2025 (60% of global AuM), PwC predicts growth in passive management to reach $36.6 trillion by 2025 (25% of global AuM).

If current growth is sustained, the industry’s penetration rate (managed assets, as a proportion of total assets) will expand from 39.6% in 2016 to 42.1% by 2025.

PwC anticipates assets growing at 5.7% a year in North America from 2016 to 2020, slowing to 4.0% per annum from 2020 to 2025, lifting assets from US$46.9 trillion to US$71.2 trillion over the nine years. Similarly, Europe is projected to grow at 8.4% and 3.4% per annum respectively over the two periods, with assets rising from US$21.9 trillion to US$35.7 trillion.

Banks need to fear Amazon’s finance ambitions: McKinsey report (American Banker), Rated: AAA

McKinsey said that the industry needs to continue its digital makeover to protect the up to 40 percent of revenues at risk by 2025 and prepare for competition from so-called platform companies like Bezos’s Amazon.com Inc.

As he extends Amazon’s reach, the Seattle-based company has had discussions with banking regulators about financial innovation, according to lobbying disclosures reviewed by American Banker. And it already has a small-business lending arm that has doled out more than $3 billion to more than 20,000 of the merchants on its e-commerce platform.

The global banking industry, which had an 8.6 percent return on equity last year, could offset the loss of profits from price competition by partnering with platform companies and generating more revenue from their data. Banks that go further by creating their own platforms could elevate their ROE to 14 percent, according to the report. ROE is a measure of profitability.

How Mobile Phones and the Internet are Changing Banking (The Merkle), Rated: A

Furthermore with smartphone prices of $30 to $50, Asian markets maintain a robust mobile market. 76% of Taiwan is connected to mobile, and 70% of Myanmar is connected.

Experts estimate Asia as the region to become the fastest growing Internet region by 2020. And while their internet industry is flourishing, only 27% of Southeast Asians have a bank account. In 2017, China has 731 million internet users. That is only 53.1% of the population. China represents internet development at a fast pace, but it still has 21% unbanked. Internet traffic growth in Myanmar is at 58%, yet Myanmar is one of the lowest banking rates in Asia with over 70% of adults (aged 15+ years) unbanked.

P2P Lending Will Change the Way Credit Is Dispensed Globally (Crytocoins News), Rated: A

As an example OECD research points out that financial sector works constitute 19% of the top 1% earners but the share of finance in the overall employment is only 4%.

In developed world, there are huge reserves of money lying in banks at sub zero, zero or miniscule interest rates. On the other hand in the developing world where there is a dearth of credit, loans can only be had at rates as high as 20-30%.

According to Eurostat, SMEs represent around 99% of all enterprises. In OECDcountries alone SMEs are responsible for job creation to the tune of 60-70%.

Source: Cryptocoins News

Karma plans to use the blockchain in such a way that individuals as well as legal entities can make the most of profitable relationships with each other. This will entail creating a community of participants, who will be able to lend money, borrow money, insure against default, Score loans and carry out assessments and even collections. All of this will be fuelled by the Karma token that will be at the centre of this new ecosystem.

The sale of Karma tokens is legal in all jurisdictions including the United States and China. Qualified US investors can participate. The basic price of Karma Token is US$ 0.01. Early investors can get discounts of 50% till US$ 1 mln is collected, thereafter 30% discount is available till US$3 mln is collected and 15% till US$ 8 mln is collected. There is a hard cap of US$ 10 mln on the token sale.

Click, pay, study – how fintech is impacting international education (The PIE News), Rated: AAA

Though fintech can take many forms, “I think the disruption is really in the payer experience,” says Sharon Butler, EVP, education at Flywire, a global payment solutions company. “Essentially we are leveraging banking infrastructure. I think really what fintech is, is sort of the blend of the old and the new.”

Preceding the growth in cross-border tuition fee payment services, which track the money and file it instantly with minimum costs involved, were more staff resources sifting through multiple transactions and matching them to the student, coupled with uncertainty from the student’s side about when or whether the money would actually have arrived.

Improvements in payment services is one of the biggest ways fintech has benefitted students, agrees Devie Mohan, founder of fintech research company, Burnmark.

Fertile ground in China
Financial technology as an industry has grown globally at an unprecedented scale. Last year, fintech reaped $17.4 billion of venture capital investment – a colossal increase on the $2.5 billion it received just four years ago.

And $7.7 billion of this investment went to China, seeing it overtake the US as the top investment market for fintech companies for the first time.

A platform targeting the Chinese market has recently struck a deal to partner with ChinaPay, the online payment subsidiary of China UnionPay, one of the world’s payment giants.

The mobile payment industry is one which has grown particularly quickly in China in comparison with other countries around the world, predominantly led by Alipay and WeChat Pay. These two platforms combined saw $2.9 trillion in transactions overall last year.

Modernising student loans

But it was Prodigy Finance that entered the loan market specifically to serve international students. Since its inception in 2007, the platform has lent over $310 million to international students all around the world to study overseas, and is expanding its services.

 

Ethercash Aims to Revolutionise Three Core Functions of Finance (Coinidol), Rated: B

Financial services startup Ethercash has proudly announced its Pre-ICO Campaign, which will raise funds to develop its blockchain-backed financial platform. The Ethercash platform aims to revolutionise three core functions of finance to bring greater transparency and security in the way we lend, send and spend. The Etherecash platform will allow its users to leverage their cryptocurrency holdings to acquire fiat currency loans without the need for credit history, through the application of lawyer-backed smart contracts. The Etherecash Pre-ICO campaign will run from October 25th, 2017 until November 7th, 2017 and ICO campaign will begin November 15th, 2017 and finish on  December 19th, 2017.

Australia/New Zealand

NZ prepares to join the ‘open banking’ revolution (Stuff), Rate: AAA

Andrew Sieprath is among the first people in the Europe to embrace “open banking” as a customer.

His chosen banking provider is Revolut, which isn’t even a bank.

Revolut is just one of three “open banking” services due to launch here in the next few months. They will lead New Zealand into something of a banking revolution which threatens to do to banks what Uber is doing to taxi firms, and ultimately put more pressure on them to cut staff or close branches.

There are many emerging open banking models, but as a starting point, think internet banking that’s slicker, more intuitive, and allows users to see and manage accounts from multiple banks in a single place.

Robo-advice raises alarm (Financial Standard), Rated: A

While the technology behind robo-advice is making it cheaper to invest, it doesn’t mean it is actually providing advice let alone the right advice, says the Association of Real Return Investment Advisers general manager Rebecca Jacques.

She told a recent Calastone forum that she put a few global and domestic robo-advisers to the test by giving each the same simplistic target: to pay her young children’s private school fees.

Every robo asked for a country of origin; only one asked for a tax bracket – but what was “scary” was that not one asked if the funds would be used for private school tuition, she notes.

COBA conference 2017: small banks need to work together on tech (The Courier Mail), Rated: A

IN the competitive fight against the big banks, smaller lenders such as credit unions find themselves hopelessly outgunned in terms of technology budgets.

But the chairwoman of the Customer Owned Banking Association said smaller lenders were taking opportunities to collaborate on budgets and spruce up their technological offering.

3 apps helping Australians buy real estate in ways that traditional banks can’t (Business Insider), Rated: A

But the report found property transactions made up a very small part of that alternative financing industry, making up just $49 million, or 8%, of the $609 million dealt out in 2016.

Australia lags behind the Asia-Pacific average (excluding China) of 17% of alternative financing going towards real estate. The popularity of peer-to-peer property financing in South Korea is a big contributor to the high average.

The $49 million alternative lending spent on real estate in Australia is made up of $36 million in peer-to-peer lending and $13 million in crowdfunding. In the US, peer-to-peer is worth $1 billion and crowdfunding $800 million.

  • CrowdfundUP –  The startup has so far allowed 2,000 people invest in 17 projects, with individual investments typically ranging from $5,000 to $2 million.
  • BrickX – BrickX, as previously reported by Business Insider, allows everyday folk to invest in fractions of a residential property through units called “bricks”, which can cost as little as $66.
  • CoVESTA – The real estate on offer includes residential, commercial and even agricultural properties, with investors requiring to contribute at least 5% of the purchase price if they wish to be a tenant in the property. For passive ownership, just 1% ownership is required.
India

RBI Regulations For P2P Lending Industry: A Win Win Situation For Both Platforms And Consumers (Inc42), Rated: AAA

It has been observed that, when the P2P lending industry or any other industry is prudently regulated, it attracts more participation. In terms of P2P, the regulation will increase entry of investors as well as borrowers. This is a reason why RBI regulating the NBFC-P2Ps is a long-term positive for the Indian P2P lendingindustry.

RBI regulating the sector means dead-end for players that are looking only to generate money without adding any value.

P2P regulations: A missed opportunity (Livemint), Rated: A

However, the potential social benefits of P2P lending are contingent on a facilitative and proportionate regulatory ecosystem. A review of the P2P regulations issued by the RBI leaves much to be desired in that sense. Saliently, the P2P regulations delegate potentially arbitrary discretion to RBI in gatekeeping, impose high market-access barriers that would inhibit innovation in a technology-intensive sector, and lack clarity around critical issues like leverage ratio.

A. Excessive regulatory discretion: One of the principal governance issues of a modern state is injecting accountability into regulatory discretion.

B. Disproportionate minimum capital requirements: The RBI has prescribed a mandate that would require a minimum net-owned fund (NOF) of Rs2 crore.

C. Lack of clarity around critical issues like leverage ratio: Leverage ratio is defined as “total outside liabilities divided by owned funds, of the non-banking financial corporation in P2P (NBFC-P2P)”. This leverage ratio has been capped at 2.

Online Lending Platforms Rewriting Traditional Lending Habits in SME and MSME Financing in India (BW Disrupt), Rated: A

The current marketplace for financial products in India is still highly inefficient, time-consuming & uncertain for customers – especially the SMEs and the MSMEs. When they require loans as working capital or for expenditures like purchase of raw materials, payment towards wages etc. to achieve scale and growth, approaching a bank directly or even visiting loan aggregator websites becomes challenging in terms of time & information. Also, due to varied risk appetite of traditional financial institutions, many SME and MSME entrepreneurs are often puzzled in terms of documentation requirements; different banks and lenders have their own set of risk parameters which they assess while sanctioning a lending facility. This results in high rejection rates within the loan ecosystem.

Why online lending is emerging as an enabler for India’s MSME industry

New-age fintech lending marketplaces endeavor to revolutionize the country’s financial lending patterns by changing the way it works. They are enabling easy access to loans by connecting these small businesses to financial institutions on a consolidated platform for quicker sanctions. Such neutral platforms, with customer-centric features offering a wide range of loan products and end-to-end loan fulfillment, enable MSMEs to concentrate on building their businesses rather than worrying about finances to fulfill the gap in their cash flows or fund their expansion and growth.

I2I Funding cofounder Neha Agarwal: Saw significant business growth post-demonetisation (Financial Express), Rated: A

While the Reserve Bank of India’s (RBI) guidelines for lenders and borrowers on peer to peer (P2P) lending platforms are important cautionary moves, caps on lending should ideally be linked to lenders’ incomes, Neha Agarwal, co-founder of i2ifunding, told Shritama Bose. The company has disbursed more than Rs 3 crore so far in FY18 and has a full-year target of Rs 10 crore, she added.

We have had more than 30,000 registrations on our platform so far, of which around 25,000 people are registered as borrowers and around 5,000 as lenders. Since launch, around 500 loans have been disbursed and we have around 2,000 active lenders.

The average loan size is about Rs 1.5 lakh.

Almost 90% of the lenders have invested more than once. Around 40% of lenders are lending regularly on our platform.

Five platforms which were a boon during demonetization (Business-Standard), Rated: A

  • Paytm
  • Faircent
  • Rubique
  • LoanTap
  • BankBazaar
Asia

P2P Gold Lending, Bullion, and Physical Crypto Storage (Palisade-Research), Rated: A

Gregor has a company in Singapore where individuals can securely store their gold and silver.

Using peer to peer lending you can withdraw up to half of your holdings in loans at low-interest rates. For example, if you have $100k worth of gold you can deposit and take out a loan for 50k at around 3.5% interest per year.

Here are some emerging bright spots in fintech innovation in Asia (e27), Rated: A

The fast growing Fintech industry is another feather in the cap of rising Asia. According to EY FinTech Adoption Index 2017, there is a palpable global shift of fintech activities from the UK and the US to Asia.

Source: e27

Another report provided by KPMG and CB Insights says in 2016, investments in Fintech companies in Asia hit $8.6 billion across 181 deals.

Source: e27

In light of this, fintech innovation labs and fintech accelerator/incubator spaces are rapidly growing throughout Asia, especially in Hong Kong. The FinTech Innovation Lab Asia-Pacific is collaboration between Accenture and leading financial institutions including Bank of America, Merrill Lynch, Goldman Sachs, HSBC, J.P. Morgan, and Standard Chartered, etc.

A bout of high-profile mega-rounds in the Chinese market has also played a vital role in uplifting Fintech investment. One such activity was a whopping US$4.5 billion funding round by Ant Financial, an affiliate of Alibaba group. The other smaller but successful funding rounds in China during 2016 were: US$73 million to Quant Group, and US$30.4 million to China Rapid Finance.

According to a recent research conducted by Startupbootcamp FinTech Mumbai and PwC, it was found that more than 95% of financial service companies are seeking partnership with Fintech startups through collaboration rather than competing with them.

Another report regarding Indian Fintech ecosystem is more interesting. It says Indian Fintech market is expected to double from current US$1.2 billion to US$2.4 billion in 2020.

VCs call on startups to set sights on SE Asia (The Investor), Rated: A

Tan, who formerly partnered with Sequoia Capital Asia, said his Singapore-based fund is looking for ambitious, strong Korean tech startups to invest in what could become the next unicorn.

He believes Asian-based VCs have a competitive advantage over established VCs from Europe or the US in the region as they can effectively tackle the needs of startups.

Fintech and software as a service, especially targeting small and midsized businesses, are the buzzword in Southeast Asia, according to Yoo Jung-ho, investment manager at Korea Investment Partners.

“In many of these countries, payment, banking abd finance, are still in a nascent stage with only 10 percent of the population utilizing credit and banking services,” said Yoo. “There is a great demand for firms that provides peer-to-peer lending and payment services. “So companies that target small and medium enterprises that make up the majority in Southeast Asia, will have a fighting chance.

 

Africa

The Credit Crisis in Malawi (Maravipost), Rated: A

According to recent reports, only 12 percent of households in Malawi have access to credit. With 65 percent of the population living under the poverty line, the rural population is especially vulnerable to the limitations of credit.

In today’s modern age, a physical bank is no longer needed to conduct financial services. Virtual and automated banking is expected to replace 30 percent of bank roles in the next ten years. These virtual banks even the playing field for Malawians by allowing consolidated rates, 24/7 access to services, and a location for information about other services. Some of these alternative, virtual services include:

  • Personal Loans: To find a personal loan, Malawians can use search sites such as this example from Finland.
  • Peer to Peer Loans:Rather than receiving a loan from a financial institution, peer to peer loans allow people to receive a loan directly from an individual financer. In order to apply for a loan, you must visit a peer to peer lending platform such as Prosper or Perform, and the online marketplace will match borrowers and lenders. Although the site still uses credit scores, individuals may have more sympathy towards you and your situation as opposed to a national bank.
  • Crowdfunding:Another way to finance an opportunity is through crowdfunding. Crowdfunding is a fairly recent innovation that utilizes crowdsourcing as a way to raise funds for a project or business.

The change in financial technologies in the coming years will have a great impact in Malawi, and create more access to services for the entire population.

Canada

CANADIAN LENDERS ASSOCIATION & INNOVATIVE LENDING PLATFORM ASSOCIATION LAUNCH SMART BOX IN CANADA (Canadian Lenders Association), Rated: AAA

The Canadian Lenders Association (CLA) and the Innovative Lending Platform Association (ILPA) today announced the introduction of the SMART Box™ into Canada – a model pricing disclosure and comparison tool that will enable Canadian small businesses to better assess and compare their finance options. Top small business lenders in the country, including Company CapitalEvolocity Financial GroupIOU FinancialLendifiedMerchant Advance CapitalOnDeck and Thinking Capital, have committed to adopt the tool for use by their customers.

Canadian Small Business Lender Lendified Secures $ 60 Million Credit Facility From ClearFlow (Crowdfund Insider), Rated: A

Lendified, a Canada-based lender who provides small business loans online has entered into an agreement with ClearFlow Commercial Finance to increase its lending capacity. According to the lending platform, through the agreement, ClearFlow is providing it with a $60 million credit facility to fund loans delivered through its website.

Finn.ai Raises $ 3 Million in Institutional Financing Round (Finn.ai), Rated: A

Finn.ai, the award-winning, AI-powered virtual assistant built for banking and personal finance, today announced it has raised $3 million in its recent institutional financing round.

Authors:

George Popescu
Allen Taylor