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 […]

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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 April 25 2019, Weekly News Digest

fintechs

News Comments Today’s main news: LendingClub restructures SME lending. Funding Circle lowers return projections. RateSetter receives Queen’s Award for Enterprise. SoFi could get $500M funding from Qatar. Today’s main analysis: How personal loans impact credit scores a year into repayment. Today’s thought-provoking articles: Employer payday loans and continuous billing using today’s technology. Interview with Deserve’s […]

The post Thursday April 25 2019, Weekly News Digest appeared first on Lending Times.

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News Comments

United States

United Kingdom

European Union

International

India

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News Summary

United States

LendingClub shuts down SME lending arm (Banking Tech), Rated: AAA

US peer-to-peer lending pioneer Lending Club has closed the doors on its in-house small business lending operation, reports Julie Muhn at Finovate.

Opportunity Fund, a non-profit small business lender; Funding Circle, one of the largest alternative small business lending platforms in the US; and Lending Club have teamed up to offer Lending Club’s small business clients’ access to credit. Businesses can now borrow up to $300,000 for rates as low as 5%.

How Personal Loans Impact Debt and Credit Scores a Year Into Repayment (LendingTree), Rated: AAA

Key findings

  • One year after taking on a personal loan, 52% of borrowers owed less overall on credit cards and personal loans. These borrowers’ balances — the sum credit card and personal loan balances — fell $811 on average.
  • Among baby boomers who took out personal loans, 56% lowered their overall balances after their first year of repayment, compared with 52% of Generation X and 48% of millennials.
  • Boomers also lowered their balances by much larger amounts, owing an average $2,048 less after a year. Balance reductions of younger borrowers were more modest: Generation X lowered their overall balance by $338, and millennials reduced their overall balance $250.
  • A year into repaying a personal loan, credit scores declined slightly for all age groups. Boomers’ credit scores declined the least, with the median falling just 1 point from 669 to 668. The median score of Generation X personal loan borrowers fell 7 points, from 659 to 652. Millennial credit scores fell 10 points, dropping from 661 to 651.
  • Credit utilization rates — the ratio of the sum of credit card balances to the sum of credit card limits — show a similar trajectory. One month after taking a personal loan, the median utilization rate fell from 35% to 26%. But after the first month, utilization increased. The median utilization rate one year after taking a loan increases to 44%.

How To Get Your Paycheck Early (Forbes), Rated: AAA

Speaking of Walmart, the retailer has partnerships with two fintech startups–Even Responsible Finance and PayActiv–that enable its US workers get part of their salary paid before payday.

Employees can get up to eight drawdowns (called Instapays) on their salary ahead of scheduled payouts. The first eight drawdowns are free to the employees, and then in subsequent use, fees are levied across a personal finance app available through Even.

Continuous Billing

There’s no reason why billers can’t provide continuous information about what a customer owes, in real time, online or through mobile apps.

Deserve’s Kalpesh Kapadia: ‘We promise the best credit card for our customer’s profile and life stage’ (Tearsheet), Rated: AAA

The financial system has always struggled with young people. Because the system uses credit history, young people were frequently excluded from credit products because they’re new to the system. If you’re an immigrant or foreign student studying in the US, it’s way worse. Kalpesh Kapadia set out to change a system that was skewed against young people. He’s the co- founder and CEO of Deserve, which offers credit cards to college students at 2500 universities in the US.

To do this, he’s created an analytics-based lending platform that’s also branching out into powering credit cards as a service. We talk about how Deserve is able to underwrite credit-thin files and why he thinks his firm is at an advantage when it comes to competing against Marcus’s credit products and Apple’s new credit card.

Resolve Accelerates Shift to B2B eCommerce with Automated Net Payment Terms (GlobeNewswire), Rated: A

According to Forrester Research, business-to-business (B2B) eCommerce is poised to reach over $1.8 trillion by 2023. To help power this explosive growth, Resolve today announced that it has formally spun out of Affirm to launch an automated payments platform offering extended net terms. Early customers using Resolve’s payment automation technology have realized significant increases in B2B sales, growth in order size, and faster sales cycles.

Online Auto Loans: The Pros and Cons (U.S. News), Rated: A

Things are different now. Almost every financial institution has an online presence, and most offer information about car loans on their site. Most also provide an opportunity to apply for financing online, with a growing number able to take car buyers through the entire auto loan process without ever having to visit a bank or credit union branch.

It’s Not Easy Solving For $ 1.5 Trillion In Student Debt (PYMNTS), Rated: A

There is $1.5 trillion worth of student loan debt outstanding in the U.S. and it is creating problems.

Admittedly the plan is quite a bit more complex than that, as detailed by Sen. Warren in a Medium post that went live yesterday (April 22). In broad strokes, for students from families with less than $100,000 a year in annual income, $50,000 in student loan forgiveness would be available. The post also calls for “substantial debt cancellation for every person with household income between $100,000 and $250,000.” The Warren plan also calls for the elimination of tuition at all two-year and four-year public institutions of higher learning, and would create a fund of at least $50 billion specifically for historically black colleges and universities. Federals subsidies for for-profit colleges would be banned.

Would You Take a Job Just for the Fertility Insurance? (Glamour), Rated: AAA

The cost, however, put it out of reach. A single round of IVF rings in at about 

dv01 Launches Credit Risk Transfer Market Surveillance Offering (dv01 Email), Rated: A

dv01 today announces the launch of its Credit Risk Transfer (CRT) Market Surveillance offering, which will be showcased on April 25 at the 4th Annual Credit Risk Transfer Symposium in New York.

dv01’s latest offering adds $1.8 trillion of Freddie Mac (STACR) and Fannie Mae (CAS) CRT securitizations to dv01’s modern web-based data analytics platform, furthering their goal of bringing greater transparency to capital markets. Building on the success of dv01’s Market Surveillance offering for consumer loans (launched in 2017), the CRT offering will allow investors to analyze historical performance of CRT deals both individually or as combined deals, perform whole market analysis, and run cash flow scenarios.

Let’s give post offices another job (The Student Life), Rated: A

As of 2017, approximately 6.5% of households in the U.S., totaling more than eight million, don’t have an account open at an insured bank, according to the Federal Deposit Insurance Corporation. An additional 24.2 million households utilize non-traditional financial services that often make them vulnerable to usurious lending rates.

Americans utilizing alternative forms of credit spend nearly 10% of their salaries on fees alone. For a family making the average salary of $25,500 in 2012, those fees average out to $2,412.

The USPS has 59% of its locations in zip codes that have one or fewer banks, according to a 2011 government report. This could help people to overcome a geographic boundary.

Equifax acquires PayNet to help expand access to capital for small and mid-sized businesses (PR Newswire), Rated: A

Equifax Inc., a global data, analytics and technology company has acquired PayNet, a company that provides commercial credit risk underwriting and management solutions to online and alternative finance lenders, and commercial finance and leasing companies in the U.S. and Canadian markets.

Marketplace Lending Update #5: The Very Long Arm of Colorado Law (The National Law Review), Rated: A

Recently a state court in Colorado ruled that securitization trusts that acquire marketplace lender loans originated to Colorado consumers are subject to Colorado jurisdiction. The court’s ruling derailed the attempt by the securitization trusts to escape the ongoing battle between the State of Colorado and marketplace lenders over rates and fees that can be charged to Colorado residents.

Berman Tabacco Announces Major Win for Victims of Plain Green Online Lending Scheme (BusinessWire), Rated: A

In a long-awaited opinion, the U.S. Court of Appeals for the Second Circuit today ruled that borrowers who took out loans from the Native American-affiliated online lender Plain Green can proceed with their nationwide RICO class action in Vermont federal court. The Second Circuit affirmed a May 2016 ruling by District Judge Geoffrey W. Crawford and comes nearly two years after oral argument on Defendants’ appeals. Berman Tabacco and Gravel & Shea PC are Lead Counsel in the case, Gingras, et al. v. Rosette, et al., No. 5:15-cv-00101-gwc (D. Vt.).

2nd Circ. Says Tribal Officers Not Immune In Payday Loan Suit (Law360), Rated: B

The Second Circuit on Wednesday rejected a bid by officers of tribe-owned lending company Plain Green LLC to escape a suit claiming they charged exorbitant interest rates on so-called payday loans,…

White Oak Global Advisors Completes $ 30M Loan for Danimer Scientific Holdings (AP News), Rated: B

White Oak Global Advisors, LLC (“White Oak”) today announced it acted as sole lender and administrative agent to provide a $30 million senior credit facility to Danimer Scientific Holdings, LLC (“Danimer”), a manufacturer of specialty compostable and biodegradable plastics. This transaction expands on White Oak’s ESG-lending platform, which aims to finance small and medium-sized enterprises (“SMEs”) that are developing solutions to help address environmental and social issues around the world.

Online Lender Upgrade Recognized as Top Place to Work in San Francisco (Crowdfund Insider), Rated: B

Online Lender Upgrade, a Fintech serving the consumer credit market, has been named a “Best Place to Work in the Bay Area’”by the San Francisco Business Times and Silicon Valley Business Journal. Upgrade is the creation of  CEO Renaud Laplanche, the founder of publicly traded marketplace lending platform LendingClub. This is the second time Upgrade has been recognized as a nice place to work in the notoriously work focused bay area.

United Kingdom

Funding Circle lowers return projections (P2P Finance News), Rated: AAA

FUNDING Circle has revised down its annual return projections in the face of a weaker environment for consumer credit.

The peer-to-peer business lender now predicts investors in its Balanced portfolio will achieve a return of 4.5 to 6.5 per cent a year.

Investors in its Conservative portfolio, meanwhile, could achieve 4.3 to 4.7 per cent a year.

Peer to Peer Lender RateSetter Receives Queen’s Award for Enterprise (Crowdfund Insider), Rated: AAA

Peer-to-peer investment platform RateSetter has been recognized with a prestigious Queen’s Award for Enterprise for excellence in innovation.

Challenger bank Tandem to double headcount as CEO warns of Brexit brain drain (Yahoo! Finance), Rated: A

Tandem Bank said on Tuesday it had moved into a new 16,000 square foot office in London as part of plans to double headcount this year to 230 and grow to 300 people by the end of 2020.

“Last year we hit 500,000 customers when we had an expectation for 150,000,” Knox told Yahoo Finance UK.

Consumer P2P loans weigh on P2PGI fund returns (P2P Finance News), Rated: A

P2P Global Investments (P2PGI) has warned that its legacy peer-to-peer lending portfolio continues to be more volatile than expected despite posting an improved net asset value (NAV) return for 2018.

P2PGI – the world’s first P2P-focused investment trust – revealed in its annual report that its NAV for 2018 was 5.2 per cent, up from three per cent in 2017.

China

How Leverage Turns Market Corrections into Crashes (Yale Insights), Rated: AAA

Q: Is shadow borrowing unique to China?

It’s difficult to study the phenomenon very precisely. We do observe shadow lending in various forms growing throughout the world, including in the U.S., and, if left unregulated, this type of lending could mean that household and financial institution leverage keeps rising in a way that is both unregulated and undocumented.

Because the Chinese government believed that the shadow sector was partly responsible for the crash, it seized the data from some shadow lending platforms and allowed us to analyze it.

Q: Who’s providing the financing in these situations?

The exact sources of financing are not well known. Some of it could be other stock investors that have put up their own holdings as collateral and borrowed against it and then lend out the proceeds on the shadow market. It could also be peer-to-peer lending platforms. It’s also believed that some of the financial institutions and brokerage firms within China may have also lent out within the shadow sector.

Trade war with US could lead to economic ‘cold war’ for China, Beijing researchers say (SCMP), Rated: A

The tit-for-tat tariff war with the US and the broad hostility is seen as a major risk endangering China’s “economic security”, along with a property bubble, local debt, unemployment and online financing including peer-to-peer lending, according to the latest edition of China’s Economic Security Outlook.

European Union

French Lender Societe Generale Issues $ 112 Million Bond on Ethereum (CoinDesk), Rated: AAA

French financial services giant Societe Generale Group has issued about $112 million worth of bonds in the form of a security token on the public ethereum blockchain.

Announced today, a subsidiary called Societe Generale SFH used the OFH token (obligations de financement de l’habitat, or home financing obligations) to represent 100 million euros of covered bonds, a type of security that is backed by specific assets but remains on the issuer’s balance sheet.

The bond has a five-year maturity with a 12-month extension period, Moody’s said.

N26 opens tech hub in Vienna with a focus on security (TechCrunch), Rated: A

Fintech startup N26 is opening an office, its fourth, in Vienna. Eventually, the company plans to hire 300 software engineers, product managers and IT specialists.

API card platform Marqeta signs up three customers in Europe (Verdict), Rated: B

The platform has been signed up by French digital bank Morning, Swiss digital bank Yapeal, and Spanish POS lender Aplazame.

CoinLoan Plans IEO and Seeks Partners (Digital Journal), Rated: B

CoinLoan crypto-backed lending platform declares its intention to launch an Initial Exchange Offering and invites discussion with major crypto exchanges interested in the listing.

International

SoFi Is in Talks With Qatar for $ 500 Million Funding Round (Bloomberg), Rated: AAA

Fintech startup Social Finance Inc. is in the final stages of closing a funding round from the Qatar Investment Authority and others, according to four people familiar with the matter.

The new round, which could close as soon as this week, is said to value the startup at an amount similar to the $4.3 billion valuation of its 2017 funding round, led by Silver Lake. Two of the people said that in order to achieve the same valuation, investors were asking for more protections should the company raise money or sell itself for a lower price tag in the future. The terms of the deal have not been finalized and could still change, the people said. All of the people asked not to be identified because the discussions are private.

These are the top 10 hottest fintech startups and companies in the world (Business Insider), Rated: AAA

Fintech industry funding has already reached new highs globally in 2018, with overall funding hitting $32.6 billion at the end of Q3.

Brex

What it does: Brex is a US-based corporate credit card provider, which initially focused on serving startups.

Raisin

Why it’s hot in 2019: Raisin became a fintech unicorn after raising $114 million in January, and has since then formed partnerships with Commerzbank and ClearScore. Additionally, the startup partnered with Starling Bank in 2018 to launch bank accounts in the UK

SoFi

Why it’s hot in 2019: While the company previously focused on loans, including student loans, in 2019 it has made some significant moves into the wealth management space, and launched both free ETFs and an investment product, dubbed SoFi Invest. As it becomes a more rounded financial product, SoFi will be worth watching in the next few years.

Lending Express

What it does: Lending Express is a US-based lending platform, which focuses on SMBs, and helps them gain access to more funding by providing them with advice.

Volt Bank

Why it’s hot in 2019: In January, Volt became Australia’s first fully licensed neobank. The challenger bank will first offer a suite of retail banking products, as well as budgeting and account aggregation tools, and plans to enter the SMB banking sector in 2020.

U.K. fintech now has war chest to push stateside (American Banker), Rated: A

Fresh off a $100 million funding round last year, the British startup OakNorth is preparing to license its business lending technology to U.S. banks and beyond.

The 3-year-old small-business lender is entering the U.S. at a time when fintechs and banks have stepped up their digital business lending efforts. Though OakNorth has not announced any official partnerships in the U.S., CEO Rishi Khosla said there’s appetite for what the firm is offering.

BlockFi Is Now Paying Interest on $ 53 Million of Crypto Deposits (CoinDesk), Rated: A

Crypto lending startup BlockFi has gathered another $18 million of bitcoin and ether deposits since last month, bringing its total interest-earning accounts to $53 million.

The company also lowered its minimum balance to earn interest on bitcoin from 1 BTC to 0.5 BTC and expanded its operations to India, meaning its service is now available globally, except for territories sanctioned by the U.S., U.K. and E.U.

No crypto winter for BlockFi as client base reaches 50% (CoinGeek), Rated: B

Crypto lending startup BlockFi has been growing, and now claimed that it has grown its client base by 50% in just one month.

Funds at your disposal: Digital lending making inroads into traditional lending (Finextra), Rated: A

The penetration of the internet of things and devices such as smartphones has brought in many advancements. This has made economic activities available at the touch of a button. Among the various sectors, the digital world has evolved the way traditional banking processes are being carried out. A growing number of businesses and individuals are filling applications online for taking loans rather than getting into the lengthy lending process.

Microsoft Will Pay You To Develop… Ethereum? (CryptoBriefing), Rated: B

“[ConsenSys Labs] has put up a few bounties in the vein of rethinking the lending market, and thinking about a peer-to-peer lending and a decentralized credit score system,” explains ConsenSys’ Operations Lead Vivek Singh. Instead of relying on centralized credit agencies, such a system—if successful—could allow borrowers to leverage their social connections into a sort of decentralized credit score.

India

Indian lendtech ZestMoney raises $ 20m (Banking Tech), Rated: AAA

ZestMoney, a start-up that helps consumers with no credit history get loans to buy online, has raised a $20 million Series B.

‘Money Loji’ launches App that offers loans to salaried professionals within 5 Minutes (Business Standard), Rated: A

Money Loji, a modern money ending platform, has launched its App, which offers quickest and the most secure loans to salaried professionals for an immediate requirement with flexible repayment options starting from 7 days to a maximum of 90 days. They follow a unique three-step process – application, approval, disbursement which is carried out within 3-4 minutes. The eligibility criterion is a minimum in-hand of Rs 20,000/month and a minimum age of 23 years. The application requires the users to upload an identity proof, an address proof, last 3 alongside the slips.

Blockfi Launches High-Interest Crypto Lending Program in India (Bitcoin.com), Rated: A

New Jersey-based crypto startup Blockfi announced Tuesday that it has expanded service to users in India. Its flagship Blockfi Interest Account (BIA) for BTC and ETH is now available in 65 countries.

Asia

Nuo Network Crypto Lending Platform Becomes Asia’s Biggest with $ 2 Million in Reserves (Bitcoin Exchange Guide), Rated: AAA

ConsenSys ventures backed Nuo.Network, which is a non-custodial lending platform recently made it to the top 5, dollar Defi (Decentralized Finance) projects and it presently the largest lending platform based in Asia. In the past month, the value of loans given has doubled, this is partly due to the growth of DAI reserves, which is now about 500,000 USD and the surge in Maker stability fees.

Why China’s Ping An OneConnect picks Indonesia for expansion (The Asset), Rated: A

The archipelago is viewed as an ideal market to benefit from the services offered by the enterprise. According to the Ping An Group, Indonesia, at around US$27 billion in 2018, is the largest and fastest-growing internet economy in Southeast Asia.

MENA

Banks use fintech to make up for lost time on financial inclusion (Financial Times), Rated: AAA

It fell to a mobile phone company more than a decade ago to financially empower tens of millions of Africans who found themselves passed over by the traditional banking sector. Now, some 12 years after Vodafone co-founded M-Pesa, the mobile payments venture that took east Africa by storm, banks are upping their game to improve financial inclusion rates across Africa and the Middle East, as technology widens their ability to deliver banking services at lower costs.

Source: Financial Times

In east Africa, the Catalyst Fund has backed Sokowatch, a three-year-old Kenya-based fintech that enables small retailers to order goods from suppliers registered on the mobile-focused platform and receive same-day deliveries. It also offers access to credit. The platform has already expanded into Tanzania and Rwanda.

In the Middle East, Citigroup has given $5m to a microloans fund in Jordan that helps give women access to credit. The financial support will help provide loans to around 10,000 additional women.

Iraq’s financial inclusion drive boosted by homegrown fintech (Financial Times), Rated: A

Around 7m Iraqis are now receiving welfare benefits or public sector salaries electronically, as the government replaces cumbersome cash dispersals with biometric debit cards that can be used at ATMs and in shops.

Only 23 per cent of Iraqis aged 15 and over held an account with a financial institution in 2017, according to the World Bank — although that figure has doubled since 2011.

Source: Financial Times

YouHodler Cryptocurrency Lending Platform Adds Dash (Dash News), Rated: A

Users will now be able to borrow in EUR, USD, or Stablecoin against their Dash as well as use the site to covert Dash to any crypto or fiat on the platform and withdraw to their crypto or fiat wallet. If a user enters their credit/debit card on the platform then they can “convert DASH to fiat and instantly withdraw that amount onto their personal cards, adding a unique “real world” utility for crypto”.

Canada

7 ways emerging fintech hubs are taking on the giants (PaymentsSource), Rated: AAA

Toronto is another significant fintech force in North America, and the leading fintech zone in Canada, because of the high concentration of financial organizations and technology development in Ontario. Last year Toronto accounted for CA$221 million (US$165 million) in total fintech investments across 25 deals, according to a recent report from Toronto Financial International (TFI).

Toronto ranks ninth out of the top 15 global fintech hubs, according to TFI. Currently the region has more than 190 fintech companies and 20 incubator/accelerators in operation. Payments represent the single leading category of fintech investment in the Toronto area, and combined with lending and digital currencies/FX firms it accounts for half of all local fintech activity, according to TFI.
Source: PaymentsSource
Latin America

Brazilian Credit Marketplace FinanZero raises USD 11 Million in Series B Round (Yahoo! Finance), Rated: AAA

FinanZero, a Brazilian fintech that operates as a consumer loan broker, received a new round of investment, raising USD 11 millionfrom Atlant Fonder, Dunross & Co and Vostok Emerging Finance, among other investors.

Authors:

George Popescu
Allen Taylor

The post Thursday April 25 2019, Weekly News Digest appeared first on Lending Times.

Monday January 8 2018, Daily News Digest

marketplace banking

News Comments Today’s main news: Texas regulator sends cease & desist order to BitConnect. UK wins race for tech investment. Tencent licensed to sell mutual funds to WeChat users. Wishfin to raise $50M. FINTQ goes beyond lending. Today’s main analysis: Strategies banks, credit unions must implement this year (a must-read). Today’s thought-provoking articles: How the tech giants are going […]

marketplace banking

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

APAC

News Summary

United States

Securities Regulator Issues C&D to UK Based Cryptocurrency Marketplace BitConnect & Planned ICO (Crowdfund Insider), Rated: AAA

The Texas State Securities Boardhas issued an Emergency Cease and Desist Order targeting BiConnect, a UK based cryptocurrency platform. BitConnect is planning a new initial coin offering (ICO) later this month and Texas is stating the tokens are unregistered securities.

The Texas regulators say BitConnecthas placed 9.4 million of the coins into the online cryptocurrency marketplace, representing a market value of $4.1 billion as of Jan. 3 and expects to issue a maximum of 28 million coins.

The tech giants are coming for your customers (American Banker), Rated: AAA

Lost in all this was an inescapable fact: Big tech firms like Amazon don’t need a charter to disrupt the banking industry. Indeed, they are already changing it.

Amazon has done more than $1 billion in small-business lending since it first started offering loans. In 2017, it launched Amazon Cash, which effectively allows it to take cash deposits from customers via ubiquitous convenience stores like 7-Eleven and Sheetz. Other tech firms, including Apple and Samsung, offer their own payment apps.

If banks effectively end up as utilities to larger tech firms, they will lose out. McKinsey forecasts manufacturing will produce only 35% of profits in finance, a return on equity of 4.4%. Distribution, meanwhile, will produce 65% of profits, with a return on equity of 20%.

It’s not clear what tech giants have in store next, but they will likely push the limits of traditional finance. It’s not hard to imagine the Bank of Alexa, enabling customers to move money and pay bills just by shouting at the Amazon Echo in their living rooms.

The year of digital is upon us (Business Insider), Rated: AAA

With that, these are our top 10 market structure trends to watch in 2018:

MiFID II soft launches

You’re probably thinking, “It’s not a soft launch—MiFID II is the law of the land now!” That is technically true, of course. And for better or worse, even though the SEC has provided U.S. firms with “no-action relief” from some European rules, Europe’s regulators don’t have the no-action relief lever that U.S. regulators became so fond of using as they implemented Dodd-Frank. However, MiFID II is so wide-reaching and impactful, it is unreasonable to think European regulators can or will crack down on imperfect compliance as the year gets underway.

Active investing is still huge, but passive keeps growing

However, Greenwich Associates research in 2017 found that most portfolio managers see 40% of assets in passive as the limit, compared to today’s 22%—that is a huge opportunity for growth.

Alternative data becomes less alternative

Ninety percent of investors using alternative data today tell Greenwich Associates they’ve see a positive return on their investment.

And while the alpha to be captured via alternative data is set to grow, the sheer quantity of data available to drive investment decisions is growing exponentially faster.

Data matters more than trading

But even in these and other cases where some data is made public, individual market participants can only find real value when also examining trades that failed, RFQs that were lost and orders that never left the blotter. Even equity exchanges will need to up their game, as the Consolidated Audit Trail (CAT) reporting requirements finally become a reality and MiFID II makes the market more transparent than ever before. Selling data is great, but helping clients to understand what it really means to them is even better. Inject the growing focus on indices (following several notable acquisitions in 2017) as passive investing grows, and things really start to get interesting.

Wealth management comes out of retirement

Robo-advisors are an opportunity, not a threat.

The move to fee-based accounts couldn’t have come at a better time, with this never-ending bull market generating wealth for investors that, in turn, generate fees for their managers. However, if the market decides to correct, as baby boomers pull out more money than millennials put in, this party might not last forever.

Podcast 133: Rosemary Kelley of Kroll Bond Rating Agency (Lend Academy), Rated: A

In this podcast you will learn:

  • How KBRA got started and how their focus has evolved.
  • When marketplace lending first got on Rosemary’s radar.
  • What made KBRA comfortable enough to be able to provide their first rating in the space.
  • How KBRA has become the leader in rating unsecured consumer lending deals.
  • What has been driving the growth of securitization in marketplace lending.
  • What does the tightening of spreads tell us about investor appetite.
  • How platforms creating their own shelf has changed how these deals get done.
  • Why the deals that have breached their triggers have not tempered investor demand.
  • Some best practices for a platform doing their first securitization.
  • What leads to KBRA deciding to upgrade a deal.
  • Rosemary’s thoughts on the macro environment and how it will impact consumer credit.
  • What platforms can do to mitigate a slow down in securitization markets.
  • What Rosemary thinks about the competitive environment in marketplace lending.

Roostify’s Rajesh Bhat: ‘We’re still in the first quarter of the online mortgage game’ (Tearsheet), Rated: A

Why did you enter the digital mortgage space?
That first year, we spent the entire year looking for a home to buy and it was an entirely painful and traumatic experience. Born out of that was the idea behind Roostify. That’s where we began building out the solution we have today.

Why are mortgages so hard to digitize?
The eligibility aspect is complex. Once eligibility is determined, the fulfillment process is equally complex — if not more. Those two things coupled with the fact that on a normal year over half the mortgages issued have a real estate transaction integrally tied to the mortgage transaction make it very complex.

Where are we in the evolution of the digital mortgage?
If this is a four quarter game, we’re still in the first quarter. The evolution has been, and will continue to be, driven by the consumer. Banks recognize that consumers are willing to do certain tasks themselves to drive this process. Companies are launching now that really understand the consumer pain points and they’re delivering to that as opposed to banks’ pain points.

YieldStreet brings new opportunities to smaller investors (Bankless Times), Rated: A

Rather than cut a $20,000 check to access one opportunity, what if you could use that amount to diversify across 30 deals? Mr. Mehere asked himself that question back in 2014 when consumer P2Ps, small business financing platforms and real estate companies were gaining footholds online.

YieldStreet launched in April 2015 with 80 investments across various asset classes. The idea has proven attractive to retail investors, from whom they have raised $240 million.

They have returned more than 100,000 individual payments and in excess of $80 million in principal and interest to investors. 15 of the original 80 investments have fully matured without a loss.

Wells Fargo’s 2017 Silver Lining Is Drop in CFPB Complaints (Bloomberg), Rated: A

Complaints lodged against the lender with the Consumer Financial Protection Bureau through Dec. 15 dropped 18 percent from the same period of 2016, the steepest decline among major banks, federal figures show. Still, it remained first among that group in total complaints.

Source: Bloomberg

Seven of the 10 biggest banks by U.S. deposits experienced a drop in CFPB complaints compared with the 2016 period, including Citigroup Inc., JPMorgan Chase & Co., and Bank of America Corp.

10 Answers to Frequently Asked Questions About Personal Loans (Quicken Loans), Rated: A

You might have a million questions running through your head. Luckily, we reached out to the experts at RocketLoans to answer these 10 frequently asked questions about personal loans.

What Is a Personal Loan?

Also known as an “unsecured loan,” a personal loan isn’t backed by collateral like a mortgage or car loan.

What Is a Personal Loan with Collateral?

If you don’t have a credit score that’s between the 600 and 700+ range that most personal lenders look for, some lenders might offer you a secured personal loan, also known as a collateral loan.

How Much Can I Borrow and How Long Can I Borrow?

Depending on the lender and your personal financial situation, personal loans can average between $5,000 and $15,000, with a maximum of $35,000 and terms between 24 and 60 months.

What Is an Origination Fee, and How Much Is It?

An origination fee can range from 1% to 6% depending on the lender and, like your interest rate, is based on your credit and length of the loan. Like the interest rate, the higher the credit score, the lower the origination fee.

Chord of Confidence: Making Real Estate Agents Look Like Rock Stars (RISMedia), Rated: A

Quicken Loans is the largest online mortgage lender and the second-largest retail mortgage lender in the United States, according to Inside Mortgage Finance.

Putting Agents at the Center of the Transaction
To make the mortgage process better for consumers, Quicken Loans executives turned their attention to working hand-in-hand with real estate agents, their most powerful ally, says Tom Dempsey, divisional vice president of Business Development with Quicken Loans.

The centerpiece of this effort: MyQL Agent Insight, a custom back-end platform that increases loan visibility by letting agents see exactly where their client stands in the loan approval process.

Service, Technology Part of a Broader Culture
What exactly makes Quicken Loans different from its competitors? It starts with the company’s culture of service and the many “ISMs,” or ideals, the company strives to work and live by, Dempsey says.

Some of the standout ISMs include “Do the right thing,” “Every second counts,” and “Simplicity is genius.”

Q-text
A texting service that allows agents to receive text updates on the status of their clients’ loans, keeping agents up-to-date on each step in the process while they’re on-the-go.

Elevating the Consumer Experience
Quicken Loans has evolved in its 33-year history as a direct lender.

In its first full year of operation, Rocket Mortgage funded more than $7 billion of the record $96 billion in total closed loan volume in 2016 for Quicken Loans.

Rocket Mortgage clients have gone from application to closing in as little as eight days on refinance loans, and 16 days on the purchase side, according to internal data. In contrast, the industry’s average closing time on new purchase loans is about 45 days.

President of the Jason Mitchell Group at My Home Group Real Estate in Scottsdale, Ariz., Mitchell has closed more than 900 transactions and over $215 million in sales volume since 2012. More than 65 percent of that business came from clients who used Quicken Loans, Mitchell says.

Source: RISMedia

FormFree’s AccountChek Asset Report Meets Underwriting Guidelines for VA Loans (PR Newswire), Rated: A

FormFree today announced that asset reports generated by its AccountChek® automated asset verification service meet all underwriting guidelines established by the U.S. Department of Veterans Affairs (VA) for loans guaranteed by its Loan Guaranty Service. The announcement follows the VA’s December 29, 2017 release of Circular 26-17-43, which was issued in response to increasing lender interest in automated verification of borrower assets for VA loans.

AccountChek eliminates the burden of gathering asset documents for loans by letting consumers easily and securely transmit their online banking, retirement and investment account data for automated analysis. In just minutes, AccountChek delivers asset data to lenders in a standardized report along with a ReIssueKey that enables secure and streamlined sharing with the secondary market. The result is an easier, safer and more accurate process that closes loans up to 20 days faster, provides a better borrower experience and circumvents a host of common “hiccups” that plague manual asset verification.

4 Best Investments To Make In 2018 (Forbes), Rated: A

#1: The Stock Market

One company I always suggest is Betterment. With Betterment, your money can be invested in ETFs and they don’t charge a fee for managing these for you. Plus, they actually pick the ETFs you invest in based on your appetite for risk, investing goals, and other factors.

Plus, there are a multitude of other “robo-advisors” to choose from.

#2: Peer-to-Peer Lending

A second place to stash some of your excess cash this year is in peer-to-peer lending platforms like Lending Club and Prosper. With these companies, you’re able to loan money to individuals in small increments as if you were the bank. The best part is, you get to earn a pretty decent rate of return – usually upward of 6% or more.

#3: Real Estate

One option I’m really excited about is a company called Fundrise. Fundriseoffers an investing scenario similar to the one above. They buy commercial properties and allow investors to invest small sums of money. Obviously, this is yet another hands-off investment. You may own part of a commercial real estate project, but you don’t even see or deal with the property itself.

Like Lending Club, Fundrise requires an upfront sum of around $1,000 to get started.

Fundrise claims its returns have averaged between 8.76% up to 12.42% over the last five years.

Payday Loan Mogul Trades Ferrari-Racing Life for Prison Term (Bloomberg), Rated: A

Scott Tucker says he’s a pioneering self-made man who, without a college degree, founded successful businesses in a variety of fields and contributed billions of dollars to the U.S. economy. A judge says he’s an unrepentant fraud and sentenced him to almost 17 years in prison.

Jurors found the men guilty of collecting unlawful debts, using misleading contracts and falsely stating that the businesses were owned and operated by Native American tribes. That bogus claim helped them get around state laws that prohibited the business practices, the U.S. said. The scam ran from 1997 to 2013, Castel said.

From 2008 to 2012 alone, Tucker victimized 4.65 million people, according to prosecutors, collecting $1.3 billion in illegal interest payments as some people paid a total of almost $1,000 to settle a $300 loan.

Ad Valorem! The Future of Niche Reserve Based Value Investing and Lending is Here (Huffington Post), Rated: A

Valorem Foundation, the community peer-to-peer platform for multi-party transactions, is launching soon. It is a new blockchain-based platform that allows users to exchange value via smart contracts. Once on the platform, users can borrow, lend, invest, transfer, and exchange money between each other, creating a trust-based platform that removes the need for 3rd-party services or external vendors.

One of Valorem’s products, the Microloan, has been quite successful because of the platform’s risk distribution system and foundation on smart contract-based functionality. Its feature of spreading loan default risk over multiple people forces people in the Valorem community to make smarter choices about buying products like cars, student loans, and insurance.

Marine Corps Vet Earns OnDeck Small Business Spotlight (Guru Focus), Rated: B

OnDeck (NYSE: ONDK), the leader in online lending to small business, today announced that digital agency Majestyk Apps, led by Marine Corps veteran Donald Coolidge, has been selected as the OnDeck Small Business of the Month for January 2018.

United Kingdom

UK shrugs off Brexit worries by winning race for technology investment (Express.co.uk), Rated: AAA

Venture capital funding in UK technology firms was nearly £3billion, more than double the amount invested in Germany and France combined.

London technology drew the most. Its £2.45billion was more than the other top 10 cities put together, according to funding database Pitchbook for London & Partners figures.

Fintech, or financial technology, attracted £1.34billion in venture capital funding, with TransferWise and Funding Circle investment, while artificial intelligence companies raised a record £488million, more than double 2016.

Brexit cynics were wrong about London’s fintech companies (Quartz), Rated: A

Below the surface there are reasons to be concerned, but the data so far looks positive. UK companies raised $7.7 billion last year, more than double that of 2016, according to Dealroom. Fintech companies raked in $2.9 billion, the biggest share. TransferWise raised £211 million ($286 million) while Funding Circle took in £81.9 million, according to lobby group London & Partners.

Source: Quartz

Attitudes across Europe are diverging. While the UK is the No. 1 destination for investment, entrepreneurs in France, Belgium, the Netherlands, and Luxembourg (Benelux) are substantially more positive about the future of Europe’s tech scene than their peers in Britain: 70% of the former are more optimistic than they were 12 months ago, compared with 42% in the UK and Ireland, according to a survey by venture capital firm Atomico.

Olivier Goy, founder of crowd-lending platform Lendix, says he’s even more positive about France’s potential than he was after the poll.

A risky P2P opportunity for 2018 (MoneyWeek), Rated: A

Returns from investing directly in the biggest platforms, including Zopa, Ratesetter and Funding Circle, averaged 5.4% including losses from defaults, according to analytics firm AltFi Data.

For example, P2PGI moved from a premium of 15% to a discount of 15% – ie, the share price now trades at 15% below the net asset value (NAV) of the fund’s investments.

Funding Circle’s SME Income fund trades at a small premium (around 2%) to NAV, and has delivered returns equivalent to a 5.6% yield on the current share price.

As for bonds, Lendinvest – a property lending platform – issued the first listed retail bond from a P2P platform, raising £50m at a yield of 5.25%. This was well received and is now trading at a small premium of 2%.

China

Tencent gets a licence to sell mutual funds to WeChat’s 1 billion users in China (SCMP), Rated: AAA

The Shenzhen Bureau of the China Securities Regulatory Commission, the nation’s top securities watchdog, has given Tencent subsidiary Tengan Funds Sales (Shenzhen) the licence to sell funds directly.

Before gaining the licence, the tech giant was only able to act as a platform for fund houses and third-party fund sales companies to sell their products through qian.qq.com, its online wealth managing platform and its popular instant messaging tool, WeChat. Qian.qq.com is for users to access the service on PC, while a similar service on WeChat is for mobile users.

Also on Thursday, the tech giant launched the promotion of a new service that will allow users to pay their credit card bills via using the money-market funds available on Licaitong, or WeChat’s wealth management app.

Users will avoid having to pay a 0.1 per cent charge on a credit card payment of more than 5,000 yuan (US$770) monthly. Tencent is also offering users cash incentives, capped at 88.88 yuan, for those who use the promotal service until February.

Chinese social network’s stock jumps 47% after it says it’s raising money through cryptocurrency (CNBC), Rated: A

The share price of Chinese social network Renren has almost doubled after the company said it was raising money through a digital currency sale.

The company, headquartered in China and listed on the New York Stock Exchange, saw its stock climb 47.39 percent to $18.32 a share by the close of the U.S. trading session Wednesday.

Renren is looking to raise funds through an initial coin offering (ICO), according to a white paper released Tuesday.

WeiyangX Fintech Review (Crowdfund Insider), Rated: A

On January 2, 2018, the Shenzhen Securities Regulatory Bureau issued this year’s first fund sales license to internet giant Tencent Holdings, or more specifically Teng An Information Technology (Shenzhen) Co., Ltd.

The Nansha District Government Affairs Service Center in Guangzhou introduced “WeChat Police Certified” face recognition technology and issued China’s first WeChat ID card on December 26, 2017.

According to Bloomberg News, insiders said some loans on HNA’s P2P platform Jbh.com have been faced with deferred payment since last November. Jbh.com offers products like fixed income, P2P lending, insurance and funds on its app.

European Union

20 of Europe’s hottest fintech start-ups to watch in 2018 (The Finanser), Rated: AAA

Advanon is an online platform for invoice-financing SMEs. The platform enables SMEs to better manage their cash flows and focus on their core business. Founded in 2015 by Philip Kornmann, Phil Lojacono and Stijn Pieper, Advanon has raised $3.9m in funding so far, including a $3.5m Series A round from Btov Partners, VI Partners and Swisscom Ventures.


Circle is a P2P payments platform founded by Sean Neville and Jeremy Allaire. Using the technology – available as an app on iOS and Android devices or even through a Circle app for iMessage – users can send and receive P2P payments with native euro support. Circle also claims to be the first and only cross-border payments platform in the world to make it possible to beam cash from an app into a US bank account at no cost.

Founded by Marc Murphy, Fenergo offers solutions for client life-cycle management, anti-money laundering, regulatory compliance and client data management.

A fast-growing fintech company, ID Finance specialises in online lending in emerging and growing markets.

Regarded as one of Europe’s most valuable fintech firms, Klarnaprovides online payment services for e-commerce sites in order to eliminate the risk for buyer and seller.

Monzo has more than 20,000 current-account holders and the start-up bank has amassed something of a cult-like following in the UK, with almost 500,000 people using its distinctive hot coral cards and thousands more on the waiting list. It was founded in 2015 by Gary Dolman, Tom Blomfield, Jason Bates, Jonas Huckestein and Paul Rippon. Stripe, the payments company founded by Irish brothers Patrick and John Collison in San Francisco, joined Goodwater Capital and investor Michael Moritz (through his charitable investment vehicles) in a recent £71m investment round, joining existing investors Eileen Burbidge’s Passion Capital as well as Orange Digital Ventures and Joshua Kushner’s Thrive Capital in the round.

Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, Revolut is an app-based banking alternative with a multi-currency card.

TransferMate was founded in 2010 to reduce international payments costs for business customers and has since developed a wide regulatory footprint in Europe. So far, more than $10bn has been sent to more than 100 countries over the TransferMate platform.

TransferWise was founded in 2011 by Taavet Hinrikus and Kristo Käärmann, and provides international money transfer.

Wefox, also known as FinanceFox, is a next-generation insurance app built entirely on the Salesforce platform.

Younited Credit wants to build the biggest crowd-lending platform in continental Europe. Currently live in Spain, France and Italy, consumers can borrow between $1,200 and $48,000 without the need to talk to a bank. So far, it has managed more than $600m in loans. Founded by Charles Egly, Geoffroy Guigou and Thomas Beylot, Younited recently raised $47.8m in a Series F funding round led by Zencap Asset Management.

International

33 Strategies Banks and Credit Unions Must Implement in 2018 (The Financial Brand), Rated: AAA

Below are the top 10 trends identified in the Digital Banking Report entitled, “2018 Retail Banking Trends and Predictions,” sponsored by Kony, Inc.. The comprehensive 106-page report is now available here.

1. Improve the Consumer Experience

2. Expand Use of Data and Analytics

Immediate Strategies:

  1. Break down the barriers within your organization that perpetuate data silos. Only after silos are eliminated can advanced analytics be the most effective.
  2. Establish a data analytics function or partner with an outside organization to provide help in improving the actionability of your data.
  3. Replace timed marketing ‘programs’ with ongoing marketing ‘processes,’ leveraging real-time data to take advantage of immediate opportunities.
  4. Test the use of artificial intelligence (AI) and machine learning (ML) beyond risk and fraud analysis, including offer generation and bundling of services.

4. Embrace Open Banking

Immediate Strategies:

  1. Review existing data privacy mandates and potential changes, determining the risk/benefit appetite for new marketplace opportunities.
  2. Explore data-sharing possibility with fintech and non-financial services firms to be prepared for imminent changes.
  3. Build an API strategy for both third-party data access and potential service offerings outside traditional banking ecosystem.

5. Build Fintech Partnerships

Immediate Strategies:

  1. Foster a top-down culture of innovation, testing and understanding the digital consumer.
  2. Investigate partnerships and/or collaboration with fintech firms for products and processes not currently possible within the banking organization.
  3. Replace all or a portion of legacy systems, integrating new technologies while embracing an agile IT culture. This action step has been put on the back burner for years which is hurting many organizations.
  4. Consider having an online lender power the organization’s online loan application, to using an online lender’s credit model to better underwrite and service bank loan applications.

Marketplace Lending News Roundup – January 6 (Lend Academy), Rated: A

Funding Circle poised for £1bn float from Peer2Peer Finance News – We begin the year with news that Funding Circle is preparing to go public, possibly in Q3.

The Tech Majors are coming? Really? from AltFi – Interesting take from David Stevenson on why Amazon and Google may not come to dominate finance.

How Blockchain Will Revolutionize Invoice-Backed Financing from Let’s Talk Payments – We’re going to hear a lot about blockchain disrupting industries in 2018, here is a take on invoice finance.

Can blockchain technology revive peer-to-peer lending? from American Banker – Blockchain has given rise to a new breed of online lending platforms. Penny Crosman delves into this phenomenon.

VPC continues shift away from P2P with sale of Prosper loans from P2P Finance News – The publicly traded Victory Park fund in the UK has divested its portfolio of Prosper loans.

Finastra bolsters global capital markets team (Asset Servicing Times), Rated: B

Finastra has appointed Pedro Porfirio as global head of capital markets.

Pedro will be responsible for driving the growth of Finastra’s capital markets business line, focusing on treasury, capital markets, and investment management.

Australia/New Zealand

Would you take money advice from a computer? (NZ Herald), Rated: A

Kiwis are set to start getting financial “robo-advice” this year — a move tipped to help those on lower incomes but which some are warning comes with risks.

Investment watchdog the Financial Markets Authority is expected to open applications for exemptions to provide digital advice around KiwiSaver, insurance and mortgages early this year.

Research by the FMA has found most of those who get financial advice in New Zealand have assets of more than $200,000, raising concerns that people with lower incomes and assets are missing out.

India

Consumer loans marketplace Wishfin looks to raise up to $ 50m (Deal Street Asia), Rated: AAA

Online marketplace for consumer loans and other financial products Wishfin will raise up to $50 million in its next round of funding as it looks to make acquisitions in niche segments, a top company official said.

The company claims to have 9 million customers and $3 billion worth of disbursals to date.

Plan to save in 2018? Refer to these new age investment options (siasat.com), Rated: B

The quick returns that one gets through investments in cryptocurrencies have caught everyone’s attention.

Peer-to-peer (P2P) lending in India currently gives a net return of 18-22 percent to lenders.

People are becoming investors and expanding investment portfolio by investing small ticket size in different startups. Venture Catalysts, India’s first integrated incubator, emerging as largest investor of the year with closing 33 investment in this year.

APAC

PLDT’s fintech unit going beyond lending (Inquirer.net), Rated: AAA

FINTQ, the financial technology (fintech) arm of PLDT and Smart’s Voyager Innovations, disbursed more than P12 billion in new loans through its digital lending platform, Lendr, last year or nearly a third higher than the year-ago level.

With more than the P12 billion disbursed last year, total disbursement has reached about P27 billion since Lendr came to market in 2015, Villanueva said.

With Fintech, Pakistan set to dismantle barriers to branchless banking (Tribune), Rated: A

In an effort to promote fintech, the Pakistan Telecommunication Authority (PTA) – the telecom regulator – has decided to award Third Party Service Providers’ licences by June or July 2018, which will pave way for inter-operability between cellular mobile operators and ramp up financial inclusion all over the country.

At present, Telenor’s Easypaisa, Jazz’s Mobicash and United Bank Limited’s Omni are providing mobile-based branchless banking services. However, their customers cannot transfer money from one service to another.

The new platform will help dismantle existing barriers that prevent digital wallets (branchless bank account-holders) from sending money to different bank accounts. Users will be able to make transactions from wallet to wallet or wallet to the bank account.

Fintech firm Avaloq’s chairman streamlines his role to focus on China expansion and possible listing (SCMP), Rated: B

The chairman of Switzerland-based financial technology company Avaloq will focus on expanding business in China and Asia as well as preparing for a possible stock exchange listing, after handing over his chief executive duties.

Authors:

George Popescu
Allen Taylor

Wednesday November 15 2017, Daily News Digest

credit spreads

News Comments Today’s main news: PayPal launches P2P funding platform.True Accord lands $22M in funding.Lendable hits 100M GBP lending milestone.P2P Global Investments fund sees huge reduction in U.S. consumer loan exposure.Yirendai’s Q3 results.Klarna, PPRO partner on credit payment across Europe. Today’s main analysis: The latest trends in consumer credit.The corporate bond market suffers indigestion. Today’s […]

credit spreads

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Canada

MENA

News Summary

United States

New Q3 2017 TransUnion Industry Insights Report reveals latest consumer credit trends (TransUnion Email), Rated: AAA

With the holiday shopping season officially kicking off during Black Friday next week, TransUnion’s (NYSE: TRU) just released  

Credit Card Lending Metric Q3 2017 Q3 2016 Q3 2015 Q3 2014  

Number of Credit Card Loans  

414.3 million  

398.5 million  

374.2 million  

361.2 million Borrower-Level Delinquency Rate (90+ DPD)  

1.68%  

1.53%  

1.44%  

1.35%  

Average Debt Per Borrower $5,483 $5,323 $5,229 $5,251 Prior Quarter Originations* 15.5 million 17.6 million 15.3 million  

13.7 million Average New Account Credit Lines*  

$5,307  

$5,252  

$5,047  

$4,920

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Q3 2017 Credit Card Loan Performance by Age Group

Age/Variable 90+ DPD Annual Pct. Change Average Loan Balances Per Consumer Annual Pct. Change
Gen Z (1995 – present) 2.55% 15.5% $1,101 28.5%
Millennials (1980-1994) 2.48% 5.6% $4,028 12.0%
Gen X (1965-1979) 2.10% 7.7% $6,997 4.9%
Baby Boomers (1946-1964) 1.11% 8.8% $6,351 0.8%
Silent (Until 1945) 0.74% 10.2% $3,928 0.2%

 

Q3 2017 Auto Loan Trends

 

Auto Lending Metric

Q3 2017 Q3 2016 Q3 2015 Q3 2014
 

Number of Auto Loans

 

78.6 million

 

74.8 million

 

69.8 million

 

64.6 million

Borrower-Level Delinquency Rate (60+ DPD)  

1.40%

 

1.33%

 

1.19%

 

1.20%

 

Average Debt Per Borrower

$18,567 $18,361 $17,946 $17,351
Prior Quarter Originations* 7.1 million 7.3 million 7.2 million 6.8 million
Average Balance

of New Auto Loans*

 

$20,653

 

$20,436

 

$20,097

 

$19,524

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Mortgage Delinquency Rates Continue Extended Decline

Q3 2017 Mortgage Loan Trends

 

Mortgage Lending Metric

Q3 2017 Q3 2016 Q3 2015 Q3 2014
 

Number of Mortgage Loans

 

52.7 million

 

52.3 million

 

52.9 million

 

53.6 million

Borrower-Level Delinquency Rate (60+ DPD)  

1.91%

 

2.29%

 

2.50%

 

3.51%

 

Average Debt Per Borrower

$199,417 $193,489 $189,428 $186,577
Prior Quarter Originations* 1.9 million 2.0 million 1.9 million 1.4 million
Average Balance

of New Mortgage Loans*

 

$224,502

 

$230,120

 

$221,753

 

$195,514

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

 Personal Loan Balances Reach All-Time High as Delinquency Rates Decline

Q3 2017 Unsecured Personal Loan Trends

 

Personal Loan Metric

Q3 2017 Q3 2016 Q3 2015 Q3 2014
Total Balances $112 billion $100 billion $83 billion $66 billion
Number of Unsecured Personal Loans  

17.5 million

 

16.2 million

 

14.3 million

 

12.5 million

Borrower-Level Delinquency Rate (60+ DPD)  

3.13%

 

3.53%%

 

3.51%

 

3.61%

 

Average Debt Per Borrower

$8,017 $7,755 $7,258 $6,673
Prior Quarter Originations* 3.6 million 3.6 million 3.6 million 3.2 million
Average Balance of New Unsecured Personal Loans*  

$6,140

 

$5,475

 

$5,520

 

$4,847

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Corporate bond market suffers bout of indigestion (Morningstar), Rated: AAA

The corporate bond market suffered a bout of indigestion last week. Between absorbing a healthy amount of new issues and profit-taking from early year-end window-dressing, corporate credit spreads widened, albeit from levels that are still near multiyear lows. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade bond market) widened 5 basis points to +104. In the high-yield market, the BofA Merrill Lynch High Yield Master Index widened 24 basis points to end the week at +376.

Source: Morningstar

Energy Companies’ Credit Quality Expected to Continue to Improve;
2018 Oil Forecast $55-$60

A confluence of global events recently drove the crude oil futures price curve into backwardation, a condition in which a commodity’s market price today (or spot price) is higher than the price for further-out month contracts. As of this writing, the spot price for West Texas Intermediate crude is $56.90/barrel and the December 2018 contract is priced at $55.70/barrel. Typically, the oil market trades in contango, which is the opposite of backwardation. In contango, a commodity’s spot price is below the price for further-out month contracts.

Source: Morningstar

See the full Morningstar report here.

Goldman Sachs’ Marcus is winning the personal loans arms race (Tearsheet), Rated: AAA

Marcus by Goldman Sachs said it was going to lend $2 billion to customers by the end of this year. As of late Monday, it had already done that.

Lending Club has reported losses exceeding $200 million over the last six quarters; Prosper has lost $210 million since the start of 2016, despite various cost-cutting measures, and lost its unicorn status. Even OnDeck Capital, which focuses on small businesses, is struggling to become profitable, having reported losses over eight consecutive quarters.

Goldman sees a $13 billion lending opportunity with Marcus over three years, CFO Marty Chavez said Tuesday in remarks at the Bank of America Merrill Lynch Future of Financials Conference.

TrueAccord Nabs $ 22M Series B To Bring Machine Learning To Debt Collections (Forbes), Rated: AAA

San Francisco based TrueAccord, announced today that is has closed $22M in additional funding led by Arbor Ventures, with participation from existing and new investors. The Series B funding follows a period of sustained and rapid growth for the company.

Why customer acquisition is so difficult for financial startups (Tearsheet), Rated: AAA

Customer acquisition is expensive. For a large bank it could cost between $1,500 and $2,000 to acquire a retail banking customer, according to Ciaran Rogers, director of marketing at StratiFi, an early stage startup that helps advisors manage portfolio risk. In credit cards the cost could be in the hundreds, not thousands — according to David True, a partner at PayGility Advisors. An expensive customer could be as high as about $800, which would include the cost of teasers and bonus loyalty points. At startups it could be between $5 to about $300 for one customer. Fintechs want to spend less money on that — Wealthfront, for example, decreases its marketing budget year after year.

Partnerships with bigger brands have been one way to bring that cost down. For example, Canada’s fifth largest bank, CIBC, is reportedly in talks with robo-adviser Wealthsimple over a referral deal in which the bank would send some of its customers to the digital investment startup.

At MoneyLion, the cost of customer acquisition is about $5 or less, said chief marketing officer Tim Hong. MoneyLion launched in 2013 and now touts about 1.5 million customers. Earlier this year, Luvleen Sidhu, president and chief strategy officer of the all-digital BankMobile, said it spends about $10 to acquire an account.

Solar Finance Pioneer CleanCapital Closes 3.7M Investment Round to Help Investors Tap Solar Market (EIN Presswire), Rated: A

CleanCapital, an online marketplace for clean energy investing, announced today that it closed its Series A with a total investment of $3.7 million. This investment came through 50 investors to include FinTech and cleantech leaders as well as SeedInvest’s Selections Fund in this latest round.

Over the past five years, the solar market grew an average rate of 72% per year, fueled by regulatory stability and reduced install costs.

As Black Friday Nears, a Record 196 Million Consumers Now Have Access to Various Forms of Credit Cards and Other Revolving Lines of Credit (TransUnion Email), Rated: A

With the holiday shopping season officially kicking off during Black Friday next week, TransUnion’s (NYSE: TRU) just released Q3 2017 Industry Insights Report found that 195.9 million consumers now have access to revolving credit such as bank-issued and private label credit cards. According to the report, this is the highest level of revolving credit access since TransUnion began measuring the variable and is greater than the 192.6 million consumers who had access to such credit products in Q3 2016.

TransUnion’s analysis found that average private label card originations in the holiday season (defined as November and December) for 2016 was 148% of the average originations for the January through October timeframe. This is tracking in line with recent rises observed in 2015 (156%) and 2014 (164%).

Other Consumer Credit Headlines from the Industry Insights Report:

  • Total Credit Balances Rise despite Slowdown in New Credit Card Accounts
  • Auto Loan Market Shifting Toward Less Risky Consumers
  • Mortgage Delinquency Rates Continue Extended Decline
  • Personal Loan Balances Reach All-Time High as Delinquency Rates Decline

Online Lending And A Tale Of Two Fed Studies (PYMNTS), Rated: A

In 2010, digital lenders originated $249 million in unsecured personal loans, and by 2016 that number had grown ninety-fold.

Cleveland’s Dark Outlook

That detail alone isn’t necessarily bad news – after all, having more debt doesn’t necessarily mean the online lending customers are doing worse. But paired with other data, the news looks pretty grim. According to the Cleveland Fed survey, the online lending customers also showed lower credit scores on average, more delinquent debt and more total debt outstanding.

The findings further suggest that in some cases, the three- to five-year installment loans of up to $30,000 to $40,000 often offered by online lending sites are not being used for their intended purpose of consolidating credit card debt into a single, lower-interest loan. Instead, customers were using those loans to rack up more debt and maxing out the cards they used to pay off the loans.

Philly, Chicago And A Very Different Result

The earlier report did note that outcomes varied depending on the specific borrower profile and their precise lending requirements. However, because of the expanded and more inclusive credit ranking criteria, consumers who might otherwise be “credit invisible” or appear to have a sub-prime score are able to get a more complete evaluation that considers a wider array of factors.

The lack of regulatory clarity raises concerns, they said, over whether customers are treated fairly, have “equal access to credit, and receive offers that can be easily compared and understood,” suggesting that alt lenders need to compete on a level playing field with their regulated bank counterparts.

Why The Discrepancy?

The Cleveland Fed study examined data from TransUnion for consumers who had been identified as having taken out “online bank-based loans.” That includes a much wider set of businesses and lenders than is technically defined by the more traditional online lenders.

The Philly-Chicago study focused entirely on data from Lending Club, a marketplace lender.

Fintech critics call it predatory lending (CBS News), Rated: A

The Cleveland Fed study goes even further. It claims that P2P lending is a ticking time bomb in which loose lending and cascading defaults could lead to another crash like the one the US suffered in 2008 when the subprime lending bust took down major banks and insurers, disabling the housing market for years.

Astrada points specifically to the high interest rates that prospective borrowers with poor credit could have to pay. Many websites offering P2P loans advertise 5 percent loans with terms of one to five years. This may look good to those who would like to roll their credit card debt of 25 percent into a P2P loan.

But the reality is that for many borrowers, the interest rate is much higher. He emphasizes that one up and coming P2P lender about to go public claims that its average loan portfolio across its business model is nearly 150 percent.

While Killing The Check, Kill The (Airline) Voucher, Too (PYMNTS), Rated: A

In the seventh installment of the “Kill the Check” series, PYMNTS’ Karen Webster sat down with Ingo Money CEO Drew Edwards to get a sense of how airlines can use push payments to quell misfires and compensate passengers for their troubles when things go awry.

The digital nature of push payments also helps airlines as they can better control when, where and how such monies are spent. In addition, Edwards noted, push payments are instantly reconciled with the airline’s own accounting functions as they are being used.

Real Estate Fintech Firm Unison Announces 2018 Expansion Plans (Crowdfund Insider), Rated: A

On Monday, home ownership investment platform Unison announced 2018 expansion plans.

The platform reported that in 2017 alone it has expanded into five additional states including IllinoisNew YorkArizonaNew Jersey and Pennsylvania, bringing its total footprint to twelve states plus Washington D.C.

In addition to announcing 2018 expansion plans, Unison also revealed multiple promotions and additions to its management team. These are the following:

  • Jim Riccitelli assumed the role of President focusing on facilitating Unison’s rapid expansion and supporting Unison’s trademark focus on consumer education and financial literacy.
  • Bill Walker and Brian Elbogen, former Managing Directors, have been promoted to Chief Revenue Officer and Chief Strategy Officer
  • Laura Wensley has been brought on as Director of Finance
  • Rayan Rafay has been promoted to Chief Operating Officer of Unison’s investment management business
  • John Arens, who is General Counsel at Unison, has taken on additional responsibilities as Managing Director of Business Operations
  • Heather Phillips has joined as Associate General Counsel

CFPB requests information on free access to credit scores (American Banker), Rated: A

The Consumer Financial Protection Bureau is seeking more information about consumers’ experience with free access to credit scores.

In two separate notices published in the Federal Register on Monday, the CFPB said it wants more data on which companies consumers are using to obtain their free scores. The bureau also said it is updating a public list of companies that offer free access to a credit score.

Dave Wilson’s Chart of the Day for Nov. 14 (Bloomberg), Rated: A

GUESTS: David Wilson Stocks Editor Bloomberg News Discussing his Chart of the Day “Here’s a ‘secret’ about tech stocks from Rich Bernstein.”

Julie Verhage Reporter Bloomberg Editorial Discussing the Cleveland Federal Reserve Bank slamming the peer-to-peer lending business, calling it predatory and asking for more regulation.

Listen to the podcast here.

Lend360: A New Era in Online Lending (Crowdfund Insider), Rated: A

I can sense that most of the folks attending the conference that got hurt by Operation Chokepoint feels a bit vindicated by the latest roll back of many new proposals laid out by the CFPB, Consumer Finance Protection Bureau. Just recently the United State senate overruled the CFPB’s arbitration rule. The overruling by CFPB and essentially a no-confidence vote happened about a week after Lend360 concluded in Dallas, Texas.

I attended Dan Quan’s “The Regulator’s View of Fintech” session on the last day of the conference. Dan manages the small dollar lender desk at the Consumer Financial Protection Bureau, at his panel, Dama Brown from FTC and Shamoil Shipchandler from SEC all spoke about an era of collaboration with lenders. The tones from all three regulatory representative is vastly different than that of five years ago where mass regulation and penalties were the topic of discussion.

I feel like the industry has finally evolved from a cat and mouse game with the regulators to a more collaborative marketing participants as this industry continues to mature.

2017 Holiday Budgets by City (WalletHub), Rated: A

The National Retail Federation predicts the average per-person tab this holiday season will reach $967, up nearly 3.4 percent since 2016.

Americans are on track to end 2017 with more than $60 billion in additional credit-card balances, according to WalletHub’s projections. That figure puts us perilously close to the nearly $1 trillion grand total recorded at the height of the Great Recession.

Holiday Budget by City

Overall Rank* City Holiday Budget
1 Naperville, IL $2,381
2 Sugar Land, TX $2,368
3 Bellevue, WA $2,367
4 Sunnyvale, CA $2,360
5 Carmel, IN $2,330
6 Milpitas, CA $2,262
7 League City, TX $2,225
8 Maple Grove, MN $2,221
9 Allen, TX $2,163
10 Columbia, MD $2,032

In order to determine the cities with the biggest holiday budgets, WalletHub’s analysts compared 570 cities across five key metrics: 1) Income, 2) Age, 3) Debt-to-Income Ratio, 4) Monthly Income-to-Monthly Expenses Ratio and 5) Savings-to-Monthly Expenses Ratio.

National Real Estate Investor Ranks Magilla Loans a Top Financial Intermediary with $ 1B in Commercial Loans (PR Newswire), Rated: B

Magilla Loans, a search engine for loans which connects borrowers to banks without requesting personal information, has been recognized by National Real Estate Investor (NREI), a leading authority on trends in the commercial real estate market, as one of the 2017 Top Financial Intermediaries for commercial real estate loans arranged within the last calendar year. The ranking identifies Magilla Loans as a reliable and efficient service which satisfies the needs of commercial real estate developers and executives.

Read our featured analysis on Magilla Loans.

Värde Partners Acquires CreditShop (PR Newswire), Rated: B

CreditShop and Värde Partners today announced that Värde will acquire Austin-based CreditShop.  CreditShop is a specialty finance company focused on providing consumer friendly credit products and personal loans to prime and near-prime consumers.  CreditShop is the 25th largest MasterCard and Visa credit card issuer in the United States.

In March 2017, CreditShop acquired a $1.6 billion MasterCard credit card portfolio from Barclaycard.  The company expects to launch its own credit card products in 2018.

United Kingdom

Lendable hits £100m lending landmark (P2P Finance News), Rated: AAA

LENDABLE has announced that it has hit the £100m cumulative lending milestone in less than four years since launch.

The peer-to-peer consumer lender said on Monday that it is the third UK consumer lender after Zopa and RateSetter to reach this milestone and that it reached it in the fastest time.

P2P Global Investments fund sees large reduction in US consumer loan exposure (AltFi), Rated: AAA

The £798m P2P Global Investments fund has entered into an agreement to sell a significant proportion of its exposure to US consumer loans.

The transaction represents a reduction of £36.9m net exposure or 4.56 per cent of the fund’s net asset value (NAV) and £167.1m in gross exposure.

Demands of millennial borrowers underline need for digitisation in lending (AltFi), Rated: A

A new report from Equiniti finds that 30 per cent of consumers aged 18-25 have borrowed more than £1,000 over the past year. This equates to approximately 2 million people, according to estimates: the highest proportion of any generational group.

The report draws on data from a survey of 2,001 UK consumers in August 2017. 32 per cent were classified millennials, 34 per cent generation-x and 34 per cent baby boomers. 52 per cent were women, 48 per cent were men.

Since 2015, borrowing (of over £1,000) has increased by 17 per cent among millennials, 9 per cent for generation-x and just 1 per cent for baby boomers.

Fintech sector needs a meaningful investment fund says challenger bank boss (Yorkshire Post), Rated: A

Speaking at a fintech summit in Leeds, Mr Letts also questioned whether the challenger banks were radically different from mainstream banking, positing that some had simply “put new clothes on the emperor”.

“On other the other side are what I call the ‘neobanks’, people coming in with much hurrah and hysteria and telling everyone that the big banks are finished and that they are going to take over the world .

“If you set up a fund, from Government, that invested in fintechs and you had a billion pound fund where do you think businesses will come to? It is very simple.”

More than one in 20 nurses have taken out a payday loan to pay bills, survey claims (ChronicleLive), Rated: A

The Royal College of Nursing’s (RCN) workforce survey found that 6% of nurses have been forced to take out one of the high interest rate loans in the last year to meet their daily bills and living expenses.

Meanwhile, one in four has borrowed money from friends, family or their bank, 23% have taken on an additional paid job and half did overtime to cover their bills and expenses, according to the poll of 7,720 nurses from across the UK.

China

Yirendai Reports Third Quarter 2017 Financial Results (PR Newswire), Rated: AAA

Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”) today announced its unaudited financial results for the quarter ended September 30, 2017

For Three Months Ended

in RMB million

September
30, 2017

June
30, 2017

September
30, 2016

QoQ
Change

YoY
Change

Amount of Loans Facilitated

12,185.4

8,536.1

5,617.5

43%

117%

Total Net Revenue

1,513.9

1,183.1

876.7

28%

73%

Total Fees Billed (non-GAAP)

2,475.3

1,862.5

1,322.6

33%

87%

Net Income

303.0

269.1

344.3

13%

-12%

Adjusted EBITDA(1) (non-GAAP)

422.4

378.4

220.7

12%

91%

Adjusted Net Income (2) (non-GAAP)

303.0

269.1

192.6

13%

57%

In the third quarter of 2017, Yirendai facilitated RMB 12,185.4 million (US$1,831.5 million) of loans to 192,725 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 117%; 75.7% of the borrowers were acquired from online channels; 57.2% of the loan volume was originated from online channels and nearly 100% of the online volume was facilitated through mobile.

In the third quarter of 2017, Yirendai facilitated 214,967 investors with total investment amount of RMB 13,510.0 million(US$2,030.6 million), 100% of which was facilitated through its online platform and 92% of which was facilitated through its mobile application.

For the third quarter of 2017, total net revenue was RMB 1,513.9 million (US$227.5 million), an increase of 28% from the previous quarter and 73% year-over-year; net income was RMB 303.0 million (US$45.5 million), and increase of 13% from the previous quarter and a decrease of 12% year-over-year. The decrease of net income is mainly because that, in the third quarter of 2016, the Company recognized a tax credit of RMB 151.7 million because one of its subsidiaries became qualified as a software enterprise which makes it eligible for an exemption of enterprise income tax for 2015 and 2016. Excluding the impact of the tax credit, adjusted net income in the third quarter of 2016 was RMB 192.6 million.

Have phone will borrow: Here’s the latest tech play on China’s spendthrift youth (SCMP), Rated: A

An online lender targeting spendthrift 24 to 36 year olds is the latest fintech firm from China to bet on the willingness of Chinese youth to go into debt for the newest smartphone – and on the willingness of US investors to bid up its shares.

Shenzhen-based Lexin Fintech Holdings, which operates an online e-commerce platform offering instalment shopping, is following in the footsteps of Chinese microcredit providers Qudian and Hexindai which raised US$900 million and US$50 million in their US IPOs in October and November, respectively.

They were also out in force for the recent Singles’ Day shopping festival, which saw sales on Alibaba’s e-commerce platforms reach 168 billion yuan (US$25.3 billion). During the first hour of the 24 hour shopping spree the number and value of orders on the Fenqile platform rose three and six times respectively compared with the same period last year.

Hui Ying Financial Holdings Corp. Reports Unaudited Third Quarter 2017 Financial Results (PR Newswire), Rated: A

Hui Ying Financial Holdings Corp. (OTCQB: SFHD) (“Hui Ying” or the “Company”), a leading online financial credit facility solution provider servicing Small-to-Medium Enterprises (“SMEs”) and individual borrowers in China, today announced its financial results for the three and nine months ended September 30, 2017.

Third Quarter 2017 Highlights

For the Three Months Ended September 30,

($ millions, except per share data)

2017

2016

% Change

Revenues

$           14.28

$            7.07

101.9%

Loan origination service fee

$             8.39

$            5.11

64.3%

Loan repayment management fee

$             5.25

$            1.97

167.0%

Financing income from entrusted loans

$             0.64

$                  –

NM

Operating income

$             6.41

$            1.92

233.2%

Other income (expenses)

$           (0.24)

$            0.04

-717.6%

Net income

$             4.76

$            1.46

226.3%

EPS – diluted

$             0.06

$            0.02

179.0%

  • Total loans facilitated through our platform increased by 73.3% to RMB 2.6 billion for the third quarter of 2017, from RMB 1.5 billion for the same period of last year, as China’s online peer-to-peer lending platform industry continued to grow significantly during the third quarter, coupled with the increased marketing campaign, promotion activities on our platform as well as increased brand awareness of our online marketplace.
  • Total revenues more than doubled to $14.28 million for the third quarter of 2017 from $7.07 million for the same period of last year, as a result of increase in loans facilitated through our platform and the contribution from the newly launched entrusted loan business. Revenues from loan origination service fee, loan repayment management fee and financing income from entrusted loans were $8.39 million$5.25 million and $0.64 million, respectively, for the third quarter of 2017 compared to $5.11 million$1.97 million and nil, respectively, for the same period of last year.
  • Net income was $4.76 million, or $0.06 per diluted share, for the third quarter of 2017, compared to $1.46 million, or $0.02 per diluted share, for the same period of last year.
European Union

PPRO, Klarna team up for credit payment methods across Europe (The Paypers), Rated: AAA

PPRO Group and Klarna have announced an agreement aimed at enabling PSPs to offer credit-based payments through PPRO`s payment hub to European merchants.

The partnership will be marketed to PPRO’s payment service providers customer base and will provide access to Klarna’s services and consumers across Sweden, Norway, Finland, Denmark, the Netherlands, Germany, Austria, and the UK.

Banco BNI Europa and Belgian Fintech EDEBEX celebrate a partnership to support Portuguese SMEs (BNI Europa Email), Rated: A

Banco BNI Europa and Edebex have announced today the celebration of a new partnership for immediate availability of an online platform for the purchase and sale of invoices to Portuguese companies with cash requirements, offering an innovative alternative to financial credit and traditional factoring.

Swiss Fintech Goes Germany (FiNews), Rated: A

CreditGate24 is opening its first branch outside Switzerland in Berlin, seeking to develop the German market for digital financing and investment, the company said in a statement today.

Fintech putting power in hands of the customer (Belfast Telegraph), Rated: A

A number of areas have been established or significantly impacted by FinTech; Peer-to-Peer (P2P) lending, mobile payments, and instant payment notifications, to name a few.

The ongoing bank branch closures across Ireland and the UK demonstrates the changing climate.

With a reduction in branches, banks are investing heavily in technology to reduce costs, to improve their customer experience and to increase customer self-service in an attempt to ward off the threat of FinTech start-ups.

The blockchain is another example of FinTech and one which has been a hot topic across multiple industries for a number of years.

A Digital Future: Financial Services and the Generation Game (EIU.com), Rated: B

A digital future: financial services and the generation game is a report sponsored by Banco Santander for presentation at the Tenth Santander International Banking Conference, written by The Economist Intelligence Unit.

It assesses how people’s expectations of their financial services providers are changing and how technology must be deployed to meet them. The report is based on extensive desk research and in-depth interviews, conducted in August-October 2017 with 14 representatives of financial institutions and companies.

International

PayPal launches P2P funding platform (Business Insider), Rated: AAA

PayPal has launched Money Pools, a service that allows its users to create fundraising pages where their contacts can contribute money for a shared item or event, like a group gift or trip, 

Source: Business Insider

Bringing Cash Into The Digital World – On A Global Stage (PYMNTS), Rated: A

In the latest Data Drivers installment, Steve Villegas, vice president of Partner Management at PPRO Group, told PYMNTS’ Karen Webster that “alternative payments are going to drive the future of eCommerce.” But between the promise and the reality, some connectivity is on order, bringing consumers payment options – and merchants toward better conversion rates when it comes to online commerce.

Data Point One: 17.6 Percent

This is the percentage of credit card penetration worldwide – a lot of cards, but not a lot of penetration on a global stage.

Alternative payments may capture 50 percent of transactions this year, globally speaking, he said.

As has been widely reported, Alibaba grabbed as much as $25 billion in sales to 225 countries and regions. Roughly 90 percent of transactions were completed on mobile devices.

Data Point Two: Three Billion

This is the number of people estimated worldwide to be without a bank account – and yet, armed with mobile devices, can be brought into the world of digital transactions and can participate fully in the global economy.

Data Point Three: 38 Percent

This is the average rate of eCommerce growth of the 11 fastest growing countries globally. That far outpaces the 12 percent a year eCommerce growth seen in the U.S.

China provides a stark reminder of the explosive boost to eCommerce, at 64 percent year over year. Other areas that have high eCommerce growth rates include Indonesia and Malaysia. Growth is high both in bank payment-related transactions and with eWallet. Russia is also showing growth, Villegas stated.

TRANSFORMATION IN CAPITAL MARKETS DEMANDS EVOLUTIONARY APPROACH, FIND CELENT AND FINASTRA (Global Banking and Finance), Rated: A

New research from Celent (commissioned by Finastra) which examines the future transformation of capital markets, identifies six key drivers of change over the next five years to 2022:

  • Digitalization of the trade and client lifecycle
  • The Fintech revolution
  • The need to integrate with an evolving ecosystem
  • The trend for banks to focus on core capabilities and outsourcing of non-core functions
  • Advances in big data, machine learning and data analytics
  • The rise of open APIs and micro-services in helping banks deliver increased agility

The report, The Great Transformation in Capital Markets – Revolution to Evolution’, examines the changes that have already taken place in capital markets since the 2008 crisis, the wave of big transformation projects undertaken since 2011-12 designed to optimize operations and reduce costs, and expected trends in the transformation journey over the next five years. It incorporates the findings of detailed discussions conducted with 17 tier one and two global capital markets institutions, predominantly in the US and Europe but also across Asia and Latin America.

Australia/New Zealand

David Chaston reviews the effective cost of credit, being interest plus standard fees, of taking out a payday loan (Interest.co.nz), Rated: A

In this table we have set out what each lender says you must repay for borrowing $500. (We targeted 30 days but not every lender offers that.) Then we calculated the effective annual interest rate for entering into that deal. This is different to the interest rate the lender discloses because we bundle up that interest rate with any set-up loan fees into an effective rate. But we haven’t included any fees if you default; this analysis assumes the borrower meets all payments on time.

making one repayment (except as noted) Borrow Repay in (days) % daily % pa
in random order … $ $ # effective effective
Ferratum $500 $748 30 1.352% 493.4%
Save My Bacon $500 $828 30 1.696% 618.9%
Need Cash Today $500 $640 28 (4 wp) 1.458% 532.1%
Moola $500 $640 28 (4 wp) 1.458% 532.1%
Zebra Loans $500 $835 30 1.724% 629.3%
Payday Advance $500 $932 30 2.097% 765.6%
Payday Loan $500 $932 30 2.097% 765.6%
Can’twait $500 $731 30 1.274% 465.0%
Cash Relief $500 $748 30 1.352% 493.4%
Smart Cash $500 $691 30 1.084% 395.8%
Just Cash $500 $748 30 1.352% 493.4%
Little Loan Shop $500 $748 30 1.352% 493.4%
Seed Cash – 3 monthly pymts $500 $950 91 (3 mp) 1.128% 411.8%
Cash Burst – 2 monthly pymts $500 $1189 61 (2 mp) 2.029% 740.6%
Real Finance $500 $665 30 0.956% 348.9%
Easy Cash $500 $605 30 0.537% 232.5%
Cash till Payday $500 $647 30 1.700% 620.5%
Money Shop $500
Easy Financing $500
Instant Cash Online $500 $637 30 0.812% 296.3%
India

How FinMomenta plans to change the way financial loans are disbursed (Money Control), Rated: A

Ex-bankers Brahma Mahesh, Naveen Madgula, and a techie for 17 years at Hexaware – Praveen Krishnam founded FinMomenta last year, launching its loans platform Tachyloans in May.

The startup borrows from the emerging trend of servicing small-ticket loans online for individuals and SMEs.

“The loan approval process in banks is very subjective. It is dependent on a human perception of the loans officer. It kills the whole idea of credit scoring. That’s the reason banks are able to service just about 2%-5% of the huge working class of about 60 crore population. Others just depend on money lenders. Banks don’t touch these people because they don’t have a credit history,” says FinMomenta co-founder Brahma Mahesh.

The interest rates on Tachyloans range from 11.5% to 25% depending on the FinMomenta credit rating – the better the credit score, the lower the interest rate.

By the end of 2018, the company is targeting to service 1,500 loans and 34,000 loans in next 5 years, which will increase its loan portfolio to about Rs 500 crore.

Canada

Forget iris scans, Canadians to use Blockchain for digital IDs (Information Management), Rated: A

Consumers will be able to sign up for new digital-identity system developed by SecureKey Technologies Inc. and underpinned by IBM Corp.’s blockchain technology in the first half of 2018. They’ll be able to instantly prove who they are to banks, telecom providers and governments using apps on their phones and Windows devices, according to Greg Wolfond, chief executive officer of Toronto-based SecureKey.

Canada’s six-largest lenders, including Toronto-Dominion Bank and Royal Bank of Canada invested C$30 million ($24 million) in the project.

MENA

DIFC unveils $ 100 million fintech investment fund (The National), Rated: B

The Dubai International Financial Center (DIFC) it has established a $100 million fund to invest in fintech start-ups, the latest move in the freezone’s bid to position itself as the regional centre for the fast-growing and disruptive sector.

Authors:

George Popescu
Allen Taylor

Thursday September 7th 2016, Daily News Digest

Thursday September 7th 2016, Daily News Digest

News Comments Today’s interesting articles: for entrepreneurs the reasons not to become a unicorn before you are self-sufficient; and 2 articles on emerging bank’s user strategy vs established bank’s user strategy. And for analysis: a great article on Europe’s Fintech data and trends, a must read to understand the ongoing results of all the local various […]

Thursday September 7th 2016, Daily News Digest

News Comments

United States

United Kingdom

European Union

 

United States

Why Fintech Startups Might Not Want to Become Unicorns, (Bloomberg), Rated: AAA

Striving to achieve a valuation of $1 billion or more may no longer be in a start-up’s best interest, according to recent valuation trends and the venture capitalists who invest in the space.

“What you don’t want to do is get into sort of this half pregnant phase when you’re past where you’re digestible but not clearly on the trajectory for long term, self sufficiency,” said Sean Park, co-founder of venture capital firm Anthemis Group.

CB Insights showing second-quarter funding to venture capital-backed finch companies dropping 49 percent on a quarterly basis.

To date, CB Insights’ data also shows that the biggest acquisitions in the space have been Monsanto Co.’s 2013 purchase of agricultural insurance startup The Climate Corp. for $1.1 billion, Singapore Telecommunications’ 2015 acquisition of payment security startup Trustwave and EBay Inc.’s deal to buy global payments platform Braintree for $800 million in 2013.

Another such deal was Northwestern Mutual’s 2015 acquisition of LearnVest, an online financial planner, for what sources say was over $250 million but less than the $1 billion unicorn mark.

Online lending platforms Social Finance Inc. and Lu.com now have valuations topping $4 billion and $18 billion, respectively, and JD.com’s finance subsidiary has a $7.1 billion valuation.

Robo advisors Betterment LLC and Wealthfront Inc. are each sitting at $700 million, and online money transfer startup WorldRemit has a valuation of $500 million.

That may leave the unattractive option of being sold for a lower valuation, which has happened in a number of other industries. Gilt Groupe Holdings Inc., for instance, was once valued at about $1 billion, but later agreed to be acquired by Hudson’s Bay Co.for $250 million.

Going public also isn’t as attractive as it used to be. Of three prominent IPOs in the space, only one is trading above its initial offering price. LendingClub and On Deck Capital Inc. are both significantly below where they debuted, while shares of Square Inc. are now above that price despite a volatile few months.

Nauiokas of Anthemis said that while a number of startups may already be in that “half pregnant” phase, they might be fine with staying in . “I think for a lot of these companies that are in that in-between phase, there’s a lot of runway to go it alone.”

Ruling Boosts CFPB, Raises Marketplace Lending Questions, (BNA), Rated: A

Commentary: Lending Times covered these news on Sept 4th, however many readers being on vacation may have missed this important piece of news.

In an Aug. 31 decision, Judge John F. Walter of the U.S. District Court for the Central District of California said Orange, Calif.-based CashCall Inc. and others engaged in deceptive practices by servicing and seeking full payment on loans rendered uncollectible or partially void by state usury and licensing laws.

He also said CashCall was the “true lender” on loans issued and sold to CashCall by Western Sky Financial, a South Dakota limited liability company licensed to do business by the Cheyenne River Sioux Tribe (CRST) in South Dakota.

According to Walter, “true lender” status depends on the substance of a transaction, not its form.

Using the “totality of the circumstances” test to determine which transaction party has the “predominant economic interest” in a transaction might also affect marketplace lenders that rely on loans made and funded by bank partners, they said.

(Kroll Bond Rating Agency), Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of SpringCastle Funding Asset-Backed Notes 2016-A (“SCFT 2016-A”), a personal loan asset-backed securities transaction.

The collateral in the SCFT 2016-A deal includes approximately $1,744.5 million of loans, as of July 31, 2016. The preliminary ratings reflect the initial credit enhancement levels of 19.55% for the Class A, 7.20% for the Class B notes, and 0.50% for the Class C notes, as well as the target enhancement levels of 20.55%, 8.20%, and 1.50% for the Class A notes, Class B notes, and Class C notes, respectively. Credit enhancement is comprised of over collateralization, subordination of junior note classes, a cash reserve account, and excess spread.

Aspire Financial Technologies Announces Four Initial Data Partnerships for the Aspire Gateway Platform, (Newswire), Rated: A

MaRS FinTech venture Aspire Financial Technologies (“Aspire”), announced today that it has formed new Data Partnerships with US-based marketplace lenders Marlette Funding, Pave, and Prosper Marketplace, along with Canadian Alternative Lending Originator, Progressa.

Aspire’s inaugural product, the Gateway platform, is designed to provide better data, analytics and communications infrastructure to Alternative and Online Lending Originators and Institutional Investors.  The platform uses proprietary software developed by the Aspire team providing a workflow, data, analytics, funding and reporting infrastructure solution for these two distinct user groups.

Kabbage Launches “Elevator Pitch,” a Nationwide Campaign with Lori Greiner, (Benzinga), Rated: A

Kabbage, today announced a nationwide campaign for small business owners. In early October, five finalists will have the opportunity to deliver an “Elevator Pitch” directly to entrepreneur and investor Lori Greiner. One finalist will win $10, 000 and a private, one-hour business consultation with Ms. Greiner. Contestsubmissions are open beginning today until midnight on September 20, 2016.
Since launching in 2011, Kabbage has served more than 80,000 small businesses across the U.S. with over two billion dollars in capital.

Business owners must create a short video of their best business growth idea. After contestants upload the video to Kabbage’s Facebook page, a panel of judges will select the qualifying finalists to deliver their best “Elevator Pitch” in person to Lori Greiner. Limit one entry per small business.

How emerging banks are changing the banking experience, (Banking Technology), Rated: A

Modelling products around user experience

Monzo has taken this to a whole different level. The business has identified UX as not only one of the most important drivers towards success, but as THE most important driver. This is why it has not only created its mobile app with the user at the forefront of its design, but is allowing early adopters to use features within the app already.

Customers using these features can offer feedback on their experiences and any UX improvements they feel would be beneficial. This directly influences the development team’s decision making, as offering the highest quality, most innovative UX on the market is the main driving force behind the project.

Modelling user experience around products

Atom Bank is arguably the highest profile business using this approach. All products will be built on Unity, a game-design platform which offers the type of view on development traditional banks wouldn’t even consider.

Both of these approaches are viable and clearly working in the digital age – there is enough buzz around emerging banks that it’s clear people are disillusioned with traditional banks and looking for an alternative.

To retain customers, banks are empowering them, (Tradestreaming), Rated:AAA

Only 55.1 percent of bank clients said they are likely to stay with their bank in the next 6 weeks, according to the 2016 retail banking survey. Less than 40 percent said they will refer a friend to their bank.

In North America, 68 percent of customers aged 18-34 say they would welcome receiving Personal Finance Management offerings like a “safe-to-spend” analysis from their bank, according to Accenture.

Deutsche Bank, for example, launched its PFM FinanzPlaner, developed by financial software company Strands.

ING recently launched a slew of digital money management products. The bank added a forecasting feature to its mobile banking app in the Netherlands. ING in Spain launched a digital financial advisor called My Money Coach and a similar one was launched in France.

Barclays’ PFM solution is open even to non-customers, highlighting the importance of such an offering for customer retention and acquisition.

4 best ads for loans during the Summer of 2016, (Tradestreaming), Rated: A

Australian home lender and mortgage broker Aussie’s September 2016 ad has a family applying for a loan in an airy, bright room, among dozens of service providers eager to assist and a jovial boss helping Mom and Dad choose the very best home loan option for them.

State Farm’s June 2016 car loan/insurance commercial cleverly parallels a young woman getting a car and an older businessman discovering that his car has been jacked. Though they each say the exact same sentences, “I cannot believe this” and“what a day”, they each benefit from a different financial service from the insurance provider.

Rocket Mortgage’s $5 million Super Bowl ad riled consumers, who believed that Rocket Mortgage spelled the housing apocalypse 2.0. The firm’s 2016 summer ads have avoided any major controversy so far, and tap into the renewed Star Trek franchise, with Vulcans discussing and explaining how Rocket Mortgage works.

Ok, so this video from Sainsbury’s Bank was actually posted back in May, before summer kicked off, but it snuck onto the list thanks to its really funky cinematography, which intersperses the loan applicants’ narrative with wacky short clips that enact what the family is talking about. The bank has a number of 2016 YouTube shorts that follow the same template, advertising other products, like travel money and credit cards.

 

United Kingdom

P2P Global Investments and VPC Speciality Lending among hardest hits trusts since Brexit, (Alt Fi Credit), Rating: A

The two largest p2p and marketplace lending focused closed-ended funds are among the worst performers of all investment trusts listed on the London markets since market fallout from the Brexit vote, according to research by Numis Securities.

The best performing funds have been in Asia/EM, benefitting from both strong local markets (the MSCI Asia ex Japan is up 10% since 23 June in local currency terms) and the weakness of Sterling, down 10 per cent versus the US dollar. Technology and biotech has also rallied after a weak start to the year.

“Concerns have been expressed about the quality of loan books, the effectiveness of credit analysis, growing delinquencies, slowing growth, funding shortfalls and the prospect of greater regulatory scrutiny, while the Lending Club debacle has cast a long shadow. Against this challenging backdrop, full disclosure and transparency are critical to address growing investor concerns. “

Alan Brierley, director of investment company research at Canaccord Genuity says for P2P Global Investments – the largest fund in the space – a significant hit was from an impairment charge of £7.7m.

The £414m BlackRock Income Strategies Trust also makes it into the list of worst performers. It also is a big investor in P2P, holding one of the largest stakes in the Funding Circle SME Income fund, another listed vehicle, albeit a stronger performer since Brexit.

Pariti taps into Zopa API to help millennials pay off card debt, (Finextra), Rated: A

UK money management app Pariti has formed a referral partnership with P2P financing outfit Zopa to help users swap out their credit card debt for a consolidation loan.

The startup, which claims 70,000 users, says the agreement with Zopa is the first of a number of bundled relationships aimed at creating a ‘marketplace bank’ for millennial consumers.

Pariti is using Zopa’s recently-released loan application service API to draw down rates from the peer-to-peer funder.

European Union

European Alternative Finance Jumps to €5.4 billion in 2015, (Crowdfund Insider), Rated: AAA

The report can be found here.

The Cambridge Centre for Alternative Finance (CCAF) has published its 2nd report on the rapid growth of alternative finance across Europe. Entitled “Sustaining Momentum“, the CCAF research has quickly become the definitive report quantifying the growth and documenting the evolution of alternative finance around the world. CCAF has previously published research on new forms of finance covering both the Americas and Asia Pacific.

According to CCAF, as one would expect, the UK continues to dominate the continent at €4.4 billion in aggregate funding. France and Germany are second and third with €319 million and €249 million. The Netherlands had a solid showing at  €111 million. If you remove the UK, European alternative finance increased by 72% year over year going from €594 million in 2014 to €1.019 billion in 2015. While the overall rate of growth slowed, the industry is sustaining momentum as new regulations kick in and platforms mature.

Other interesting facts highlighted in the research:

  • Estonia is 1st in Europe in alternative finance volume per capita at €24, followed by Finland at €12 and Monaco at €10 (outside of the UK).
  • UK per capita volume stood at over €65
  • Balance Sheet lending was very small at just € 2 million, excluding the UK
  • About 38% of surveyed platforms felt their national regulations for crowdfunding and peer-to-peer lending were adequate and appropriate, 28% perceived their national regulations to be excessive, and a further 10% said current regulations were too relaxed.
  • The biggest risks cited were increasing loan defaults or business failure rates, fraudulent activities or the collapse of platforms due to malpractice.
  • The UK had the most platforms (94) followed by France (49), Germany (35) & Italy (30)
  • Just shy of 50% of firms indicated no in flow of funding from outside their country, while 72% of platforms indicated no out flow of funds to other countries

Finnovista: Spanish Fintech Sector Has Quadrupled in Three Years, (Crowdfund Insider), Rated: A

When Finnovista first covered Spanish fintech in 2013, the site recorded only 50 startups in the sector; now, three years later, in its first edition of Fintech Radar Spain, the site identified 207 Spanish fintech startups, indicating the sector had quadrupled in three years, stats largely in line with fintech’s global trend.

Finnovista predicts that over the next five years fintech startups will compete to overtake 20% the traditional Spanish banking market creating a more significant presence in all categories of financial services including Payments, Loans, Management Corporate Finance and Personal, Insurance, Investment Management, Trading, and Savings.

In addition, Finnovista cited that Spain’s 207 fintech startups make Spain the largest market for innovation compared to Latin America, ranking significantly above Brazil’s 130 startups, Mexico’s 128 startups, Colombia’s 77 startups and and Chile’s 56 startups. Not surprisingly given these statistics, Spanish Fintech leads in number of startups in 12 of the 13 categories that Finnovista monitors through its initiative Fintech Radar for Latin American countries.

Author:

George Popescu