PeerIQ is hosting a webinar by CEO Ram Ahluwalia on “What’s Happening with Personal Loan Losses” on Wednesday 5/2 at 2 p.m. EDT. Ram will talk about the trends in personal loan losses and their main drivers. Joining him will be PeerIQ Chief Commercial Officer Kevin Walsh. Register here.
PeerIQ is hosting a webinar by CEO Ram Ahluwalia on “What’s Happening with Personal Loan Losses” on Wednesday 5/2 at 2 p.m. EDT. Ram will talk about the trends in personal loan losses and their main drivers. Joining him will be PeerIQ Chief Commercial Officer Kevin Walsh.
Amazon customers would use e-tailer for banking services. AT: “Interestingly, almost half of surveyed Amazon customers would use the e-tailer for banking services, and about half would use Amazon to obtain a personal loan. If that doesn’t give Amazon incentive to encroach upon the space of consumer lending, then what bigger invitation do they need? Maybe a more substantive poll.”
Meet this year’s LendIt presenters. AT: “The exciting thing about this year’s conference is the conference-within-a-conference setup on blockchain and financial services.”
Will JPMorgan’s tech investment pay off? AT: “Just because they’ve got financial clout and spot an opportunity doesn’t mean they know how to capitalize on the opportunity. JPMorgan is really coming to this party late, and they’re not Goldman Sachs.”
Among other findings, the survey (which questioned consumers, including some Amazon Prime members, that made purchases on Amazon within the previous 30 days) found that 44.5% said they would also keep their primary bank account with Amazon if the e-commerce giant offered such a service.
Furthermore, about half of respondents said they would seek personal loans from Amazon if they were available, and roughly 45% said they would use an auto loan offering from the company. Another 30% claimed they would be ready to take out an Amazon-created mortgage.
“Retail distribution is like a muscle,” Chief Financial Officer Marianne Lake said in discussing the company’s recently announced plan to open 400 branches in up to 20 new markets. “You have to exercise it or it goes to waste.”
Nonetheless, the New York megabank raised eyebrows when it said it would invest an additional $1.4 billion in technology in 2018 — the driving factor in projections for noninterest expenses to rise 6% in the year ahead.
Current, the fintech platform that allows teens to connect their money with the people, brands and experiences they value, announced on Tuesday that Fifth Third Capital, a direct equity investment subsidiary of Fifth Third Bancorp (NASDAQ: FITB), has joined the recently announced Series A funding, led by QED Investors.
Leasing App Honcker Plans Expansion With $ 23M Funding From IAC (Auto Finance News), Rated: A
Vehicle leasing startup Honcker secured $23 million in series A funding this week and is using the capital injection to expand nationwide and bring some added features to its app, founder and Chief Executive Nathan Hecht told Auto Finance News today.
InterActive Corp. (IAC) — the media investor behind Investopedia, Tinder, Vimeo, and many others — is making its foray into the vehicle marketplace with this funding round to take a minority stake in the company. Honcker partners with dealers and plugs into their existing lender network to provide an online leasing marketplace.
The ability to raise capital online and reach new accredited investors through online portals is still in its infancy.
5. Data Analysis To Drive Investment Decisions
Really use data analysis to drive your investment decisions, don’t just look at the headlines. Utilize big data and predictive analytics to dig into what is responsible for the migration of renters, and what those renters are seeking in their new apartment.
7. Reduced Friction In Buying, Owning And Selling
We are constantly pushing to incorporate or develop technologies to improve our business and customer experience by reducing cost, friction and time, as well as improve transparency and security. Some of these we develop ourselves, like application of machine learning and AI to develop a national neighborhood rating system. Others we adopt, like animated 3D visualization software. –
Rising LA startup InvestFar; recently launched its signature mobile app to help aspiring investors with informed investment decisions. Titled as “InvestFar”, the app is the first platform to boast all the tools and resources needed for successful investments in long-distance or local markets nationwide.
Built in LA, this real estate tech startup is on a path to innovating how real estate and investors in this industry scale and manage their investments beyond local markets, especially in markets like Los Angeles, San Francisco and New York – where we often see inflated housing prices and shrunken inventory given increasing foreign investment.
A recent customer survey from small business funding siteKabbage revealed that fewer than 35% of small construction companies planned to make investments at some level this year in technologies that could help their businesses and further bring them into the digital age.
More than 65% of contractors who responded to the study did not have a plan to invest in tools like big data solutions or mobile technologies, and the same percentage was either neutral, against or not likely to spend more than 20% on social media advertising.
Kabbage also found that even with well-publicized cyber attacks and other computer-related crimes, not even 40% of small construction firms planned to invest in cybersecurity.
Last week, the American Civil Liberties Union (ACLU) released a misguided and heavily misleading report accusing private debt collectors of using the criminal justice system to “punish” and “terrorize” consumers. This is absolutely false and undermines the commitment and integrity of the professional debt collection industry.
Legitimate debt collectors work with consumers to help recover outstanding debt on behalf of businesses, nonprofit organizations and governmental entities.
Nbkc bank in Overland Park, Kan., is comfortable sitting at the same table as many of the banking industry’s biggest innovators.
The $632 million-asset bank, a unit of Ameri-National Corp., recently participated in a $16 million investment in Greenlight Financial Technology, which offers debit cards for kids that parents can control from their phones. Other investors included the Amazon Alexa Fund, SunTrust Bank and Ally Financial.
RATESETTER is opening up its Innovative Finance ISA (IFISA) to new investors on Thursday, meaning that two out of the ‘big three’ lenders will be offering the tax wrapper outside of their existing customer base.
Industry onlookers argue that the IFISA will only begin to move into the mainstream once the largest P2P platforms offer the product to new investors.
A FINTECH venture capital firm that has a stake in Zopa has surpassed a £500,000 fundraising target for a new investment company in the first 24 hours.
Augmentum Capital, which has a 7.4 per cent holding in peer-to-peer lender Zopa worth £18.5m, is looking to raise £100m through an initial public offering (IPO) alongside a crowdfunding listing on Seedrs.
A question concerned investors have been speculating on for over 36 hours now, since the website of UK p2p lending platform Collateral went down around 7pm two days ago and is showing a maintenance message. Investors criticize that there was no pre-announcement of this maintenance and worse that Collateral seemed to have ceased all communications to investors and did not react to any phone or email messages.
With no communications from the platform whatsoever investors wondered what to do. Some investors reported the incident to ActionFraud squad of the police while another contacted the FCA to voice his concern and seek advice.
1) How should a p2p lending platform communicate in a crisis?
In my view not communicating at all is the worst choice.
2) What can concerned investors actually do to react, if the platform is seemingly unreachable/unresponding over a longer period of time?
Meanwhile, it emerged that the three limited companies listed on the Financial Services Register that have traded under the name of Collateral have not had regulatory permission to operate as a consumer credit business for at least 11 months and have all now been dissolved.
Cash4Assets, which traded under the name Collateral, had cancelled its interim permissions with the Financial Conduct Authority (FCA). A permission end date is given of 23 March 2015.
Regal Pawnbroker, which also listed Collateral as one of its trading names, saw its interim permissions lapse on 31 March 2016.
And Goldmann and Sons saw its interim authorisation lapse on 31 March 2016.
Major fundraisings in the UK last year included digital insurance distributor BGL Group getting $900m, while payments venture TransferWise got $280m. Elsewhere Monzo raised £93m in two separate rounds, while Revolut got $66m.
Britain’s two biggest lenders, Lloyds and RBS, announced £5.5bn worth of investment programmes between them last week, with online banking a primary focus of their spending plans.
Open banking, as this particular revolution is known, was introduced on the second weekend of January, forcing Britain’s biggest banks to provide third parties with access to the accounts of any customers who authorise it.
A Citigroup analysis published last week finds three reasons why disintermediation of the established order is likely to be delayed. One is slow consumer adoption. A second is the fragmentation of the market for new “open banking” services in early stages of the regime. The final one is the ability of established payment providers to adapt to the new rules.
July – December 2017
● Compared to last year, total sales volume grew by 43%
● Total operating revenues increased 32% to SEK 2,474m (1,868)
● Operating income for the period was SEK 203m (35)
● Net income for the period amounted to SEK 117m (17)
January – December 2017 ● Year over year growth in total sales volumes was 42%
● Total operating revenues increased 27% to SEK 4,526m (3,561)
● Operating income amounted to SEK 524m (168)
● Net income for the year amounted to SEK 346m (113)
● 26,000 new merchants, Group total now 89,000
● 19 million new consumers used Klarna this year
Highlights from the year
● Bank license was obtained in June
● BillPay GmbH was acquired in September
● Additional tier 1 capital was raised in May and a senior unsecured bond was issued in September
Its origination volumes rose by 75 per cent during the course of the year, with over 40,000 loans and €316 million funded. Auxmoney has now disbursed more than 100,000 loans in its history, with a cumulative funding total of around €700m.
The Group has closed the reporting period with a net turnover of EUR 20 141 087 that shows 21,5% increase in comparison with the same period in 2016. The largest net turnover was reached in Spain where the net turnover has increased by 63%; the second largest turnover was reached in Sweden – by 55%, the third – in Poland where net turnover increased by 17% in comparison with data reported to December 31, 2016. Company’s EBITDA in 2017 has reached EUR 2 779 456 and has ensured the net profit of EUR 835 542.
Cerberus Capital Management, L.P. today announced that one of its affiliates has entered into an agreement with Bluestone Group, the international financial services business based in the U.K., to acquire its Australasian mortgage lending and portfolio servicing operations (“Bluestone Holdings Australia”).
The online lender secured the funding from Y Combinator, Khosla Ventures, and Vy Capital, in addition to several Silicon Valley-based angel investors. It will use the capital to expand its loan book, build partnerships with institutional lenders, enhance its underwriting technology, and hire new team members.
Total fintech funding in Asia was US$3.85 billion in 2017—a massive drop-off from the more than US$10 billion invested in 2016 while the amount in Q4 2017 declined to US$748 million across 38 deals after a solid US$1 billion+ in Q3, said KPMG.
Decreased fintech investment in China accounted for much of the decrease in investment in Asia, KPMG explained. According to the firm, China saw just US$45.8 million in investment in Q4’17, while total investment in 2017 was US$1.33 billion.
The top five fintech deals in the region in Q4 are as follows:
WeLab (lending firm in Hong Kong): US$220 million, Series B
GoSwiff (payments/transactions firm in Singapore): US$100 million, M&A
BiWang Group (Institutional/B2B firm in Shenzhen, China): US$100 million, M&A
PolicyBazaar (Insurtech firm in Gurugram, India): US$77 million, Series E
Onlyou (Institutional/B2B firm in Shenzhen, China): US$45 million, late-stage VC
Katipult Technology Corp. (TSXV:FUND) is honoured to announce that it has been nominated, alongside Polymath Inc., for the Most Promising Partnership Award at the second annual Lendit Fintech Industry awards in April. The Katipult-Polymath partnership will be competing against some of the world’s finance and fintech giants including partnerships involving Goldman Sachs, Macquarie Group, Swedbank, and Lending Club.
The chief executive of National Bank of Canada said Wednesday that the federal government’s latest budget included “a big step forward” on cybersecurity.
The federal budget tabled on Tuesday proposed various cybersecurity-related commitments, including $155.2 million over five years so that the Communications Security Establishment could create a new “Canadian Centre for Cyber Security.”
Crypto KABN Holdings Inc. (‘Crypto KABN’ or the ‘Company’) an innovator in financial services, technologies and products for the blockchain industry, is pleased to announce that it is launching a revolutionary Blockchain-enabled biometric validation platform, called ID KABN, as the first component of its suite of financial and technology services, at the FFCON18: Velocity Conference in Toronto on March 5, 2018.
News Comments Today’s main news: LendingClub increases interest rates. LendingTree plunges 8.13%. P2P default forecasts are on the rise. 29% of Australian consumers believe comprehensive credit reporting changes how they manage finances. Today’s main analysis: LendingTree’s Q4 and full year 2017 results. Today’s thought-provoking articles: Peter Renton shares personal quarterly marketplace lending results. 6 online personal loan lenders that […]
LendingClub increases interest rates. AT: “Given that LendingClub has gone through a rough patch in the last couple of years, this is not surprising. Recent earnings results show they are still below the line, though originations are up. This is likely a move to help them pay off the lawsuits they recently settled on more quickly and move into profitability sooner.”
LendingTree Inc. (TREE) had a rough trading day for Thursday February 22 as shares tumbled 8.13%, or a loss of $-30.2 per share, to close at $341.05. After opening the day at $343.05, shares of LendingTree Inc. traded as high as $358.80 and as low as $326.61. Volume was 688,145 shares over 9,300 trades, against an average daily volume of 221,877 shares and a total float of 11.97 million.
Revenue from mortgage products of $67.7 million represents an increase of 22% over fourth quarter 2016.
Revenue from non-mortgage products of $93.3 million in the fourth quarter represents an increase of 106% over the fourth quarter 2016 and comprised 58% of total revenue.
Credit card revenue of $36.9 million. On a proforma basis, giving effect to the CompareCards and MagnifyMoney acquisitions as if they had occurred on January 1, 2016, credit cards revenue grew 35% over fourth quarter 2016.
Personal loan revenue of $25.3 million represents accelerated growth of 74% over fourth quarter 2016.
Home equity revenue continued its strong momentum, increasing 138% over fourth quarter 2016, and marking the ninth consecutive quarter of year-over-year growth exceeding 100%.
More than 7.4 million consumers have now signed up for free credit scores and savings alerts through My LendingTree, and the revenue contribution from My LendingTree grew 109% in the fourth quarter compared to the prior year period.
Fourth Quarter 2017 Financial Highlights
Consolidated revenue of $161.0 million represents an increase of $60.2 million, or 60%, over revenue in the fourth quarter 2016.
GAAP Net Loss from Continuing Operations of $6.5 million, or $0.54 per share, was impacted by a $9.1 millioncharge related to the revaluation of deferred tax assets as a result of U.S. tax law changes and a one-time $10 million commitment to establish a charitable foundation.
Variable Marketing Margin of $56.1 million represents an increase of $19.3 million, or 52%, over fourth quarter 2016.
Adjusted EBITDA of $29.6 million increased $10.7 million, or 57%, over fourth quarter 2016.
Adjusted Net Income per share of $0.84 represents an increase of $0.07, or 9%, over fourth quarter 2016.
On November 21, 2017, our wholly-owned subsidiary LendingTree, LLC entered into an amended and restated $250.0 million five-year senior secured revolving credit facility which matures on November 21, 2022. Borrowings under the revolving credit facility can be used to finance working capital needs, capital expenditures, and general corporate purposes, including permitted acquisitions. We do not currently have any borrowings outstanding under the revolving credit facility.
During fourth quarter 2017, the company repurchased 33 thousand shares of its stock at a weighted-average price per share of $331 for aggregate consideration of $11.0 million. In the first quarter 2018 to-date, the company has repurchased 30 thousand shares at a weighted-average price per share of $362 for aggregate consideration of $11.0 million.
On February 21, 2018, the Company’s Board of Directors approved an additional $100 million in share repurchase authorization. As of that date, $116.7 million in share repurchase authorization remained available.
Full-Year 2017 Financial Highlights
Record consolidated revenue of $617.7 million, an increase of $233.3 million or 61%, over revenue in full-year 2016.
Net Income from Continuing Operations of $19.4 million, or $1.42 per diluted share.
Record Variable Marketing Margin of $207 million, an increase of $65.8 million or 47%, over full-year 2016.
Record Adjusted EBITDA of $115.1 million, an increase of $45.3 million or 65%, over full-year 2016.
Adjusted Net Income per share of $3.78 increased $0.80, or 27%, over full-year 2016.
The long decline in my returns has continued with 2017 by far my worst year since I began investing with LendingClub back in 2009. My overall TTM return in Q4 2017 was 5.01% compared to 6.64% in Q3 2017 and 8.07% one year ago.
My main Prosper taxable account has had $50,000 of investments starting in 2010 and continuing until 2013. Since then I have just been reinvesting all earnings.
Lend Academy P2P Fund
While 5.04% is down considerably from where the fund has been it is still significantly better than the 2.77% I received at my six original marketplace lending accounts.
What I like about AlphaFlow is that you can quickly build a diversified portfolio of 75-100 properties.
The main advantage of SoFi is the fact that it’s the only personal loan company on this list that allows you to borrow up to $100,000 for debt consolidation. Additionally, SoFi doesn’t have a minimum FICO requirement, which makes it the best way to consolidate debt with bad credit. The minimum annual income is on the high side to make up for it, however.
Payoff is a personal loan company that offers loans specifically aimed at consolidating or refinancing your credit card balances. However, the maximum loan amount is on the low end for our list. If you have a smaller amount of debt to consolidate, Payoff might work for you.
It’s been more than a week since TD Bank first revealed that its long-planned update to its online and mobile banking systems had run into technical difficulties, and many customer are still unable to access their accounts.
A bank spokesman said Tuesday that while the company is making progress on fixing the glitch, he acknowledged that a number of its customers are still unable to use mobile or online platforms to check their accounts, transfer funds or pay bills.
LendIt Fintech, the world’s leading event in financial services innovation, announced today that Scott Sanborn, LendingClub (NYSE: LC) CEO, will open this year’s conference in San Francisco, the home of technology innovation, with a plea to refocus industry efforts on solving the financial problems of everyday Americans in an increasingly divided nation. From April 9-11, the world’s most prominent and emerging fintech CEOs will gather at Moscone Center to focus on the hot-button topics and issues exploring the future of finance.
SunTrust Banks, Ally Ventures — the strategic investment arm of Ally Financial — the Amazon Alexa Fund and others have raised $16 million in a new round of funding for Greenlight Financial Technology, which makes “smart” debit cards aimed at instilling sound financial habits in kids, teens and college students, the parties announced Wednesday.
PROSPECT MARKETPLACE :
LENDING CORPORATION :
10 East 40th Street, 42d Floor :
New York, New York 10016
Above named applicant filed an application on January 4, 2018, and an amendment filed January11, 2018, requesting an order under section 8(f) of the Act declaring that it has ceased to be an investment company.
The matter has been considered and it is found, on the basis of the information set forth in the
application, as amended, that applicant has ceased to be an investment company.
CrowdStreet, provider of the leading commercial real estate investment platform for investor acquisition and relationship management, today announced KBS, one of the largest and most respected commercial real estate companies in the United States, has launched a new $1 billion “no load” and no upfront commission growth and income properties fund on the CrowdStreet Marketplace. KBS is offering its new fund, the KBS Growth & Income Fund, through both the CrowdStreet Marketplace and its own direct-to-investor platform at KBSDirect.com, which is powered by CrowdStreet technology. KBS is taking this unique omnichannel marketing approach to provide access and engage a wider array of accredited investors seeking institutional-quality investment opportunities managed by leading professionals.
ArborCrowd, an online commercial real estate crowdfunding company, announced the opportunity for investors to own equity interest in a multifamily property with tremendous upside potential. Tower on Ryan Park (the Property) is a 141-unit, high-rise property located in downtown Mobile, AL.
The total capitalization of the deal is $12.7 million, and ArborCrowd is raising $2.6 million of equity. The Property has a targeted 16 percent to 18 percent Internal Rate of Return (IRR) and a projected hold period of three to five years.
With the launch of StraightUp, access to high-potential, curated New York residential development projects is available to investors – those who are neither the well-connected and super-rich elite, nor large institutional investors – for the first time. The platform gives investors a new level of access, transparency and opportunity in the unbeatable, but previously unreachable world of New York City development.
Mortgage lenders that exclusively use online applications approve loans quicker, experience fewer defaults, encourage more refinancing and respond to demand shifts better than brick-and-mortar rivals, according to a New York Federal Reserve report released Thursday.
Fintech lending has grown annually by 30 percent from $34 billion to $161 billion, 8 percent of the market, in that time, it reported.
If you’re looking for an angel investment firm that focuses on women, consider Golden Seeds, one of the largest and most active early-stage investment firms for women. They focus on B2B and B2C firms in tech, health care, consumer products, and service industries. They look for companies that have a scalable business model and at least one woman in the C-suite.
This early-state angel investment fund focuses on companies in underserved markets. Belle Capital requires that you have at least one female founder in order to qualify and/or that you’re willing to recruit top female talent to your C-suite. They fund digital, mobile, internet, life sciences, medical devices, health IT, CleanTech, and other sectors.
3.Female Founders Fund
As an early-stage investment fund, Female Founders Fund aims to help companies founded by women. The companies must be based on innovative solutions that will better serve customers. The organization focuses on technology that connects buyers and sellers, e-commerce, web-enabled services, and disruptive communities.
4.Women’s Venture Capital Fund II
The Women’s VC Fund II looks to help boost women in business, making investments in early-stage, revenue-generating companies that have the potential for significant growth. It requires that companies are inclusive of women. It focuses on funding companies based on the West Coast that are working on enterprise SaaS, educational technology, and consumer internet solutions.
5.Women’s Startup Lab
If you’re looking for an accelerator to help you succeed, the Women’s Startup Lab can connect you to a group of mentors who are looking to help female-led businesses. The lab boasts a stellar track record with 90 alumnae and $50 million raised for their companies. In return for their assistance, they ask for 3 percent in equity to pay it forward.
A bill passed the lower chamber that would render useless state laws in the majority of states, including the 15 states and the District of Columbia where state interest rate limits prevent payday lending. HR 3299, titled the Protecting Consumers’ Access to Credit Act, passed the House on a 245-171 floor vote.
If passed in the Senate and signed into law by President Donald Trump, the measure will preempt state interest rate caps that now limit the annual percentage rates (APRs) on loans to no more than 36 percent. These respective rate caps now save consumers an estimated $2.2 billion in fees every year.
Payday lenders charge Coloradans an average of $119 in fees and interest to borrow $392, with an average annual percentage rate of 129 percent. This removes $50 million per year from the Colorado economy, according a new report released this week by the Center for Responsible Lending.
David Sykes rejoined Chapman and Cutler earlier this month as a partner in the San Francisco office, adding to the firm’s renewable energy and securitization practices.
Sykes represents lenders, lessors, issuers and investors in renewable energy and fintech transactions. He has experience in matters involving debt and equity finance transactions (including tax equity transactions), securitizations, joint ventures, asset acquisitions and divestments.
Boggs regularly interacts with U.S. financial regulators on matters pertaining to global and mobile payments, marketplace lending, crowdfunding and cryptocurrency. He also represents technology and innovation companies in their public sector outreach relating to data privacy and cybersecurity, e-government, public policy and regulatory compliance.
Zopa figures show its expected default rate is now higher than at the start of the financial crisis in 2007, at 4.52 per cent for loans granted in 2017 against 2.74 a decade previously, but other platforms have similarly high forecasts.
Lending Works predicted default rates of 3.4 per cent for loans made in 2017, which is more than double the rate when it first started lending in 2014, and up from 3.2 per cent in 2016.
RateSetter (which originates consumer loans as well as business and property loans) indicated that its expected default rate is 3.18 per cent for 2018, the same as last year. This is down from 3.43 per cent in 2016 but its default rate was 1.4 per cent when it first started lending in 2011. It increased to 1.54 per cent in 2013 and 2.43 per cent in 2014 before hitting 3.02 per cent in 2015.
Buy-to-let mortgage lender Landbay first launched its ISA just in time for ISA season last year. Now, one year on, CEO John Goodall (pictured) has put forward five reasons for investing in the wrapper.
Those reasons are: it’s tax-free, it offers high interest rates, it offers an alternative means of investing, it offers access to a variety of asset classes, and it’s a source of regular income.
It’s for this reason that more or less every adult in the UK is forced to bin three or four letters a month from their bank offering them a loan or overdraft. In this day and age, users of online banking are just as likely to find themselves having to hide a not-so-surreptitious offer of a pre-approved loan of £20,000, wedged in among the payments on their online statement.
In the new world of digital banking, the want (/the need?) to lend is a source of great embarrassment. Credit is treated as a kind of dirty, best hushed up necessity. Nowhere is this more evident than in the launch of Tandem’s first major product: a credit card.
That card – available in four vibrant colours – carries an APR of 18.9 per cent.
And it’s not just Tandem. Monzo, Starling, Revolut, N26 – they’ve all launched or are thinking about launching a suite of loan options. Revolut partnered with peer-to-peer lender Lending Works to power its consumer credit offering. N26 has teamed up with auxmoney and Younited Credit. They’re all gearing up to lend money but they’re stuck in this weird position where they can’t speak plainly about wanting to lend.
Rate of growth in consumer credit gross advances, which picked up in 2015, has slowed and year-end figures for 2017 are expected to show growth of around 4.6%. Growth will remain moderate throughout the rest of the forecast period, meaning that gross advances are expected to total of around £329bn by 2021. On the supply side, high incidences of bad debt, tighter lending criteria, and a cautious approach towards unsecured lending among providers and regulators will check the rate of growth of credit supply over the forecast period.
Critical success factors include in this report –
– Retail finance specialists should identify which retail sectors offer the best opportunities for growth, whether due to rising levels of spending or lack of current finance options. Innovation from fintech companies will soon provide small retailers with new financing options, increasing competition in the market. Hence, they should tailor their propositions to meet the needs of customers.
– Partnerships with established firms that have a longstanding reputation will help achieve the much needed scale for P2P platforms to compete.
Moreover, these report offers insight into –
– The key macroeconomic, regulatory, and other factors that will drive the demand for, and supply of, consumer credit over the next five years.
– The outlook for total consumer credit including overdrafts, P2P, motor finance, payday lending, home credit, credit cards, and retail finance.
– Peer-to-peer (P2P) lending will see double-digit growth up to 2021. The sector will continue to enjoy rapid expansion due to increased consumer awareness and partnerships with other related sectors.
– The motor finance boom has started to decline, with growth falling to a lower level of 3.4% in 2017. New car sales are falling, and the excess of vehicles that will enter the used car market over the next few years will drive down prices. Both trends will dampen demand for credit.
– Payday lending has been severely curtailed by tougher regulation, including strict price caps and comprehensive affordability checks. These measures have significantly reduced the supply of credit and will depress gross lending.
Brexit and Scottish Business, from former MPs Michelle Thomson and Roger Mullin of consultancy firm Momentous Change, reveals the concerns of 236 of Scotland’s senior business figures about leaving the EU. The report comes against a backdrop of a collapse in bank net lending. In the final two quarters of 2017, net lending to SMEs across 30 UK banks – 75 per cent of the UK lending market – was dwarfed by that from peer-to-peer lender Funding Circle.
Deustche Bank recently released its Alternative Investment Survey, the 16th annual. This year the questionnaires received replies from 436 global hedge fund investors, with assets under management of $2.1 trillion, who shared their insights, sentiments, and allocation plans.
Over the year, the HF industry grew by 6.4%; assets under management reached the record figure $3.21 trillion at year’s end. In last year’s survey, investors’ predictions had fallen a bit short, holding that the year’s end figure would be $3.14 trillion.
For the year to come, respondents are predicting further expansion, and a year’s end AUM of $3.42 trillion.
Half of the respondents expect to increase their own allocation. Another 39% said they will maintain their allocation where it is, so that only 11% plan to reduce it. Last year, only 37% of survey respondents were saying they expected to enhance this sliced of their portfolio, 41% expected to hold to the status quo, and 22% planned to reduce.
RateSetter surveyed 1,000 Australian consumers earlier this year and found that 29 per cent of people believe that the comprehensive credit reporting (CCR) changes will affect the way they approach and manage their finances by way of positive behavioural changes such as making payments on time and paying more than the minimum amount on their credit card.
The Organisation for Economic Co-operation and Development (OECD) released a new report which found that, although banks still dominate in funding small businesses, new bank lending is declining in a number of countries.
The Scoreboard found a median year-on-year drop of 6.5 per cent in bankruptcies in 2016, following a drop of 6.9 per cent in 2014 and 9.1 per cent in 2015.
The OECD report noted that SMEs accounted for 99.8 per cent of all enterprises in Australia, at just over 2.1 million in 2015/16.
It found that SME loans accounted for around 30 per cent of all outstanding business loans in Australia in 2016 and added that the average interest rate charged to SMEs in Australia between 2013 and 2016 were between 5.1 to 6.5 per cent – nearer the higher end of rates when compared to other OECD countries.
Peer-to-peer lender RateSetter called on brokers to help combat misunderstanding and fear about changes to credit reporting. It said yesterday that its research found that only one-third of people have any knowledge of the impending changes to how credit records are shared.
The lender’s research shows that to achieve positive outcomes under comprehensive credit reporting, consumer awareness needs to be significantly improved, given that two-thirds of people (67%) are unaware of these changes.
Online lender Xinja is set to target mortgage borrowers in Australia’s capital cities after receiving its Australian credit licence.
The neobank, which launched its equity crowdfunding offer in January 2018, has been granted an Australian credit licence (ACL) from the Australian Securities and Investments Commission (ASIC), which will allow it to use its digital portal to offer home loans to borrowers.
The traditional bank with limited financial products has given way to a financial supermarket where consumers are spoilt for choice. But hundreds of options also leave them feeling clueless. When it comes to financial decisions, it becomes imperative to have in-depth knowledge about the pros and cons of all the products that are available in […]
The traditional bank with limited financial products has given way to a financial supermarket where consumers are spoilt for choice. But hundreds of options also leave them feeling clueless. When it comes to financial decisions, it becomes imperative to have in-depth knowledge about the pros and cons of all the products that are available in the market. Though there are many platforms focused on selling financial services and products, few concentrate on truly helping people make better financial choices. Sensing the opportunity, Miron Lulic launched SuperMoney with the goal of helping “people make smart financial decisions.”
SuperMoney was launched in 2013 in Santa Ana, California. Lulic, founder and CEO, is a serial entrepreneur who is passionate about technological innovation. Prior to this, he founded LoanNow and Swagsy and worked as VP at a tax resolution firm. SuperMoney has no outside investors. Lulic himself has pumped almost $1 million into the business. He does not want to raise capital until the company achieves meaningful scale.
SuperMoney’s Humble Beginnings
When Lulic started SuperMoney, it was nothing but a small personal finance blog. Taking a cue from the Yelp business model, he built a similar platform for personal finance. Using an advanced algorithm, it ranked financial products and companies on multiple parameters. But by 2016, the platform started generating serious traffic, especially for personal loans. Then, in 2017, SuperMoney launched a loan offering engine.
The underlying principle behind SuperMoney is to provide financial transparency and help people make better financial decisions. It has partnered with a handful of lenders, and by using real-time APIs the company scores and rank products offered by those lenders on various parameters, such as origination fees, repayment costs, APR, and more.
SuperMoney’s Technology and Business Model
Since startup, SuperMoney has diversified into several verticals including personal lending, auto loans, student loans, and business lending. It sells clicks as well as leads, but it’s mainly focused on a performance-based advertising model. As such, it only gets paid when advertising partners are successful. The company charges by the loan.
The underlying technology is developed in-house and uses a proprietary segmentation system. SuperMoney has built its own weighted sorting algorithm based on attributes such as user review score, average revenue, and more. This means it is able to store tons of attributes from different lenders and help narrow the target audience for each loan offer. Its partners do not influence ratings and offering decisions. Rather, SuperMoney provides data that helps consumers make better financial decisions for their situation.
With the help of a soft credit pull that does not affect the consumer rating in any way, SuperMoney pre-approves the consumer for multiple offers they can then compare, and pick the best one.
What Differentiates SuperMoney From the Competition
Most consumer finance platforms providing similar services make a profit selling leads to the highest bidder. SuperMoney is more transparent. Instead, it calculates the total repayment cost, interest expense, origination fees, and other lending parameters for the consumer. It directly integrates with all its partners via APIs, which helps give consumers a better perspective in terms of cost associated with each product. This ability to offer apples-to-apples comparison in a clear and transparent manner is the hallmark of the marketplace.
The platform has tasted major success in recent years, and its organic search results have grown exponentially. SuperMoney currently witnesses nearly 1 million visitors per month.
Last April, it launched its personal loan engine and has received financing requests topping $400 million, with close to 1,000 personal loan applications per day. The personal loan has quickly become its biggest vertical. In August 2017, SuperMoney ventured into auto loans. It is also looking at the mortgage space and other niche verticals for future expansion.
Comparison to LendingTree
LendingTree is SuperMoney’s biggest competitor. An online lending exchange that connects consumers with multiple lenders, banks, and credit partners, it is not a direct supplier of loans, but a broker. Their core business model is selling leads to lenders. Lulic believes this is bad for consumers as they are deluged with dozens of tele-callers hawking their products.
SuperMoney is different. It does not let lenders contact the borrower unless the borrower has moved ahead with an offer. Its performance-based model enables them to align interest with end users and partners in a more fruitful manner. Even its marketing strategy is different from other platforms; SuperMoney concentrates on content marketing believing in “quality over quantity.”
Future Trends in Consumer Lending
Lulic believes the industry will witness a prolonged consolidation phase in order for market dynamics to settle. Strong performance of platforms like Golman Sachs’ Marcus will give the banking community self-belief to bring their own direct ventures into this space.
Moving forward, the big solution will be focusing on underserved niches. One such initiative is a dealer financing solution. Lately, a lot of traction has been witnessed in home improvement loans. SuperMoney wants to focus on individual contractors like roof installers, pool installers, and other service providers who do not have good financial solutions at their disposal.
Specialty financers available in the consumer lending space charge high discount rates from contractors, and that has had a ripple effect on contractor’s charges inching higher. To tackle this problem, SuperMoney tweaked its loan offering engine framework to launch a dealer-financing solution with a co-branded landing page. This will help contractors receive multiple competitive offers. It has tested the prototype with 100 dealers and further plans to move into other verticals like elective medical, funeral homes, legal service providers, and more.
SuperMoney also wants to strike additional partnership with banks, add more partners to its marketplace platform, and include dealers for the home improvement space. It is looking to collaborate with a wide variety of financial institutions and financial service providers. If everything goes according to plan, it will raise fresh capital in 2018 to fuel its growth.
The company has laid the blueprint to become one of the leading financial service research tool providers. By venturing into a variety of verticals, SuperMoney has made clear it has big ambitions and wants to become the premier go-to-resource for personal and business finance decisions.
News Comments Today’s main news: Cross River Bank, PeerIQ partner on loan data.Coinbase to offer crypto payments service to compete with PayPal.Better Mortgage hits $1B in mortgage loan funding.LendingClub updates Truth in Lending Statement.Zopa to launch a credit card.Funding Circle plans IPO at $2.1B valuation.Prospa ranked #1 among high-growth firms in APAC. Today’s main analysis: […]
Why banks should buy online lenders. AT: “A must-read analysis from PeerIQ. There’s more to it, however, than mere numbers. As financial technology rises, if banks do not find a way to make use of technology to remain competitive, they will become obsolete. That’s why they need a presence at the table.”
Cross River Bank in Fort Lee, N.J., has entered into a partnership with PeerIQ, a provider of consumer loan data analytics, in an effort to streamline capital sourcing between online lenders and institutional loan buyers such as small banks.
According to Mercator’s report, Business Banking Services: Keeping Up with Millennial Owners, 27% of total U.S. SMEs have used online alternative lenders (P2P lenders or marketplace lending platforms) in 2017.
Of this number, 48% of millennial owners (aged 18–34), currently have a loan from an alternative lender compared to 25% of SMEs run by owners over 35 years of age. Further, these millennial owners said they are twice as likely to use alternative lenders than their older counterparts.
The 2018 Small Business Finance Markets report, released on Tuesday, found that P2P business lending rose by 51 per cent in 2017. In contrast, bank lending to UK small- and medium-sized enterprises (SMEs) fell to £700m in 2017 from £3bn the previous year.
Despite increased demand for alternative finance, the report found that 70 per cent of smaller businesses would rather forego growth than borrow. The BBB’s analysis found that only 1.7 per cent of small firms sought new loans over the last 10 quarters – a record low since its index began in 2011.
Less than half (43 per cent) of businesses surveyed were confident they would get a loan if they applied, even though most new loan applications (72 per cent) are approved.
Better Mortgage, a digital mortgage company focused on improving access to home financing for a new generation of homeowners, announced that it has funded over $1 billion dollars in mortgage loans to date. Better launched in January 2016, making it the third fastest online lender to reach this $1B milestone — per research published by Lend Academy in July 2017.
Tech firms have already demonstrated they can open these markets. The largest money market fund in the world, Ant Financial’s four-year-old Yu’e Bao, was built on a sweep from the AliPay payments product. Intuit can utilize proprietary accounting and tax data to underwrite (and acquire) borrowers in novel ways. Amazon can underwrite small businesses using inventory turnover and reams of customer data.
“Big Tech” firms also have proprietary platforms and channels – in-home (think ‘Alexa’), apps, in-car, and mobile to name a few. However, in the US – at least for now – Big Tech firms lack a regulatory “swimlane” to compete with banks in lending and payments on a national scale. Their non-bank and commercial status confines their activities to narrow forms of lending, affinity partnerships, and lead generation. Until that impediment is dissolved, “Big Tech” firms need to partner with national banks with unsecured lending capabilities to fully unlock these markets.
Our argument is that banks without an unsecured lending capability risk losing long-term customer relevance. Banks that do not have an unsecured lending business do not have a seat at the table.
Which Banks are the logical buyers?
Banks that have the following characteristics would make a short-list of likely acquirers:
Are active in lending, but have a gap in unsecured consumer loans
Banks with asset management or structured products arms that can package loans into new products (e.g., ABS offerings, investment vehicles, etc.). Also, banks that have aspirations to develop a robo-advisor
Banks that have a demonstrated history of partnering with FinTechs
We assume underwriting and loan terms similar to those today (e.g. ~700 credit score, 15% coupon, $15k principal, 3 to 5 year term). We assume annual charge-off rates of 5%. We assume a 1.5% deposit funding charge and a leverage ratio of 15%.
We find that a bank can generate 10% NIM, 2 to 3.5% ROA, 15 to 20% marginal-ROE during good times.
As of Friday, February 23, 2018, recent updates made to the Truth in Lending disclosure statement for unsecured consumer loans will take effect. The forthcoming Truth in Lending disclosure statement is available here.
LendingClub has a market cap of about $1.6 billion, which makes it one of the biggest players in the peer-to-peer lending market.
The company’s stock price has plunged nearly 40% over the last four months and this could continue unless the upcoming earnings call changes investor sentiment. LendingClub was valued at about $9 billion in late 2014 but it has dropped to about $1.6 billion.
A bill introduced Thursday by Assemblyman Ash Kalra (D-San Jose) could dramatically reshape California’s lending industry by capping interest rates at roughly 20% for consumer loans between $2,500 and $10,000. Since rate caps were removed by the Legislature in the 1980s, there’s been no limit to the amount of interest lenders can charge on those loans.
That has led to startling growth in the market. In 2016, more than half of the loans between $2,500 and $5,000 and about 21% of larger loans charged interest rates of 100% or higher. In all, Californians in 2016 — the most recent year for which state data are available — borrowed $1.1 billion at triple-digit interest rates.
But Kalra’s bill would do much more than ban lenders’ priciest offerings. The bill would extend an existing set of rate caps that now apply to loans of less than $2,500 to all loans of up to $10,000. That would cap interest rates at roughly 19% for loans up to $10,000.
Had the caps been in effect in 2016, 98% of loans between $2,500 and $5,000 and 95% of loans up to $10,000 would have been outlawed. Only about $91 million of the $2.7 billion in loans made in those sizes in 2016 had rates below 20%.
BFS Capital Announces New 5 Million Credit Line (BFS Capital Email), Rated: A
BFS Capital, a leading small business financing platform, today announced it is has received a new $175 million revolving credit line provided by funds managed by Ares Management, L.P. BFS Capital will use the new facility to accelerate the growth of its lending business, following a record year where the company generated more than $300 million in originations, a new annual high.
Braviant Holdings Announces $ 7 Million Equity Raise (Braviant Email), Rated: A
Braviant Holdings, a leading fintech startup that uses advanced analytics and proprietary technology to make smarter lending decisions, has raised $5 million common equity from Loom Capital, LLC. Alongside the equity investment, Braviant has entered into an exclusive partnership with a subsidiary of Trend Capital, a tech-enabled digital marketing platform affiliated with Loom.
In addition, “accredited investors” need only apply. Investors must have a net worth greater than $1 million in liquid assets (meaning the equity in your home doesn’t count) or you need to earn more than $200,000 per year or make $300,000 jointly.
PeerStreet’s minimum investment is $1,000 and account fees range from 0.25% to a 1% setup fee. The investment length ranges from six to 24 months.
Buying and selling property has already become much more accessible due to technology, and this trend is only going to speed up. While historically, real estate professionals, investors, and landlords have been reluctant to pay for technology, and the data available has been spotty, the tide is turning as more wake up to the opportunities. Investment values are shooting up in many places due in a large part to technological advances, including the ability to market real estate to audiences beyond the immediate community and to close deals securely, quickly, and remotely with investors.
Lloyd Blankfein was a breezy opening act at a big industry event this week in Key Biscayne, Florida. On stage at the Ritz-Carlton the chairman and chief executive of Goldman Sachs was talking about Marcus, the bank’s new online savings and lending platform, which is targeting borrowers with scores as low as 660 on the 300-850 Fico scale. Goldman calls such people “creditworthy”; others call them subprime.
Those who find themselves pinched for cash often turn to high-cost payday lenders. But traditional banks and credit unions could serve that role for borrowers and do it at much lower rates, according to a new proposal from the Pew Charitable Trusts.
Good news for Americans struggling with income tax returns given the recent changes in the tax laws with the enactment of The PATH ACT. A visionary African-American entrepreneur, Marshawn Govan, has come up with an innovative mobile tax refund loan app that is all set to revolutionize the tax industry and make tax returns simpler for Americans.
Titled as MKG Tax Refund, the state of the art program is a patent pending mobile tax refund Collateral Driven Interest & Investment (SaaS) Software-as-a-Service (FOF) Fund-Of-Fund multi-manager investment application.
If there’s any question that digital mortgage firms are gaining attention from larger fintech players and investors, then look no further than venture capital firm Santander InnoVentures‘ investment in Roostify, a startup that digitalizes the mortgage application process.
Tikehau Capital, a Paris-based firm with $15.6 billion in assets under management, signed a lease for the top two floors at Rockpoint Group’s new development at 412 West 15th Street, sources told The Real Deal.
The 11-year lease covers nearly 10,000 square feet on the top two floors of the 18-story building, which offer sweeping views of the Hudson River.
Lawmakers highlighted that H.R. 3299 — the Protecting Consumers’ Access to Credit Act of 2017 — clarifies current law to ensure innovative marketplace lending remains in-tact while simultaneously providing safe consumer protections.
H.R. 3299 passed through the House by a vote of 245-171 and went on over to the Senate, which received it, read the measure twice and referred to the Committee on Banking, Housing and Urban Affairs.
Funding Circle, the largest peer-to-peer (P2P) lender in the UK, is planning to list on the London Stock Exchange (LSE) that will see it float at an estimated valuation of £1.5 billion ($2.1 billion), according to a report by Britain’s Sky News.
Credit Kudos, a challenger credit bureau, and Lending Works, a fast-growing peer-to-peer (P2P) lending platform, are partnering to enable customers to benefit from the UK’s Open Banking initiative, a secure way for banking customers to take control of their financial data. Credit Kudos and Lending Works’ partnership is one of the first initiatives to use Open Banking to improve customer experience in the finance industry.
Currently, approximately 60% of Lending Works’ borrowers are provided with instant and automated credit decisions, whereas the remaining 40% require some manual processes. Within the new world of Open Banking, Lending Works expects to increase that figure to up to 90% of credit decisions being fully automated.
British small businesses are diversifying their sources of funding away from big banks, as a growing number turn to specialist asset-backed lenders, peer-to-peer finance sites, private equity and venture capital investors.
Fewer small businesses are applying for loans than in the past five years and more of them fear that if they did they would be rejected, according to the latest report into small business finance by the British Business Bank, a government-backed development bank.
Out of the UK’s total of 5.7m small businesses, only 1.7 per cent applied for a loan or overdraft last year, the fifth consecutive year of decline since 2012.
There are also several privately funded lenders (with a local presence in the province through brokerages) such as Atom Bank, Relendex, Thin Cats and Dunluce Capital which have all completed a number of deals in Northern Ireland from cash flow loans to property development finance.
The Access to Finance initiative supported by Invest Northern Ireland offers a variety of support including start-up funding, loans and equity investment.
WhiteRock Capital Partners manages the £50m NI Growth Loan Fund (Access to Finance) which offers loans from £50k to £1.25m to local SMEs. With an extensive network of funding partners, we work hard to deliver the most appropriate support for local businesses.
Crowdfunding is gaining serious traction in the UK market, with the sector pushing past the £10 billion milestone in 2016. While, most people will probably still associate the idea of ‘crowdfunding’ with websites like Kickstarter or early stage equity investments, the reality is that 97% of the market is debt-based – either P2P lending or Crowd Bonds.
Both P2P lending and Crowd Bonds are also making big strides into the mainstream thanks to their inclusion in the new(ish) Innovative Finance ISA (IFISA), which allows investors to earn interest tax free on their investments.
With the birth of the Lifetime ISA (LISA) for 18-39 year olds on 6 April 2017, the Innovative Finance ISA (IFISA) is no longer the baby of the ISA family. But it is perhaps still the least well understood.
Chinese regulators and commercial banks are butting heads over new rules Beijing is rolling out to tackle off-the-books lending that’s compounding China’s debt woes.
Particularly targeted are practices banks use to move loans off their books by repackaging them as investments. Banks transfer the loans—mostly corporate and local government borrowings—to brokerages and other types of shadow lenders, which then peddle the rebundled investments to investors. Such maneuvers accounted for $3.5 trillion in off-balance lending as of last year.
Bank ING Diba acquires p2p lending marketplace Lendico. According to Finanz-Szene.de the transaction was reported to the German Federal Cartel Authority last week. The bank has confirmed the acquisition.
IdentityMind Global, the leader in Digital Identities You Can Trust, today announced that it has closed a $10M Series C round of financing. In addition to all existing investors, the round was co-led by Benhamou Global Ventures and Eastern Link Capital and included Hanna Ventures, Overstock.com, and Zanadu Capital Partners.
Digital currencies such as Bitcoin and Ethereum suffered from price falls in January but many firms are still seeing the benefits of creating their own cryptocurrency to use for P2P lending. One provider, SOFIN, is currently looking to raise up to $1m (£720,000) to create a token that can be used as a tool to bypass high exchange rates so loans can be funded internationally.
The global P2P lending ecosystem, FintruX backed by Ethereum and No-Code development has reopened the Token Sale, FTX which is used to power the FintruX network and is set-up as a mean to reward or get rewarded for participating in the marketplace. The token’s minimum per transaction at present is 0.1 ETH.
GISC LoanCoin Network is a utility token based lending and borrowing platform that allows users to leverage their blockchain assets to secure cash loans. The network is optimal for P2P and B2B credit financing on a global scale.
The TWQ (Tawarruq) is an ERC20 token that confer the right to the token holder to submit an application for a personal financing based on a Commodity Tawarruq Trading program, through the iP2PGlobal platform and have it listed in the platform for prospective lenders to view and choose to finance.
10TWQs are needed to apply for a personal financing of up to 5ETH.
Prospa, a Sydney based online lender servicing the SME market, has received a nice recognition as it took the top spot for a high growth firm in Asia Pacific. According to a recent ranking of the top 1000 firms in Asia-Pacific by the FT, Prospa ranked number one having experienced revenue growth of 1600% during the time period of 2103 to 2016.
Privately owned personal loans company Nimble Money is on the block, with its two founders believed to be seeking an exit.
Street Talk can reveal Melbourne-based Baillieu Holst has been hired to find a buyer for the business and has been marketing the short term loans provider to financial services industry players and private equity firms in recent weeks.
Interested parties have been told Nimble Money is on track to make about $15 million in earnings this year, following significant growth in its loan book over the past 12-months.
BaptistCare has approved 16 loans per week to some of Australia’s most financially vulnerable people.
The No Interest Loan Scheme (NILs), a microfinance program aimed at providing small no- and low-interest loans to financially vulnerable people, has this week announced it has surpassed $11.5 million lent in NSW. The loans are designed to help people on lower incomes purchase essential goods and services.
The loans are provided through BaptistCare with the scheme run under Good Shepherd Microfinance in partnership with NAB and the NSW Office of Fair Trading.
Mumbai-based personal finance startup Fincash.com has raised Rs 1 crore ($150,000) in a fresh funding round from a group of angel investors from the financial services sector, a company statement said.
The startup will use this money to build its team, expand its product line, acquire customers and make its services available across more cities and towns, the statement added.
Lendit, a peer-to-peer lending platform operator in South Korea, has extended a combined 101.8 billion won ($95.4 million) in nearly 7,300 consumer loans as of Monday to midrange borrowers seeking lower interest rates, according to the fintech startup Monday.
With government-backed initiatives and a finite business of copper export, Nathan Lustig, co-founder and managing partner at Magma Partners, saw huge potential in the Chilean fintech market.
Lustig points out that only 30% of Chileans have credit cards, while only 50% have bank accounts, “and that’s the more advanced population,” he said. Additionally, consumer experience is “pretty horrible for about 80% of this population,” he said.
One area within the fintech space that Magma has been particularly interested in is invoice-based lending, also known as factoring. In its portfolio is Portal Finance, a startup that provides SaaS for the factoring industry.
Portal Finance earns between 0.5% to 1% for every deal the bank accepts.
Talad Invoice, a lending platform initiated by a fintech startup, is expected to grow at an exponential rate this year, following two years of peer-to-peer lending using invoices as loans collateral, said Watewiboon Pumipue, chief executive officer of D90 Capital Co, which operates the financial platform.
Finda operates an eponymous web portal that provides information about over 7,000 financial products — ranging from personal and mortgage loans, investment instruments, credit cards to insurance products — standardized in Finda‘s own format. Users can be offered easy-to-understand and up-to-date information about products online, she said.
Finda gathers information primarily from an open API by the Financial Supervisory Service, but since the FSS’ database provides data, including interest rates, of the previous months, Finda reflects updates directly from sellers — banks, insurers, credit card firms and peer-to-peer lending platforms.
The next stage in the development of Canada’s first credit fund that invests in marketplace loans — unsecured consumer and small business loans provided by online lending companies — is set to play out over the next month.
The gang behind KiWi Private Credit Fund — formed last summer with $30 million of contributions from institutional and high-net-worth investors — is planning to meet the Canadian platforms.
The regulator has been fighting against expensive and very risky loans for several years already. Last July it tightened reserve requirements for MFO again: they must add 100% interest for payday loans with a delay of more than 90 days.
Firstly, the regulator is going to restrict the size of payday loans to 10,000 rubles, secondly, to reduce the biggest term of such loans to 15 days, thirdly, to reduce interest rates to 1,5% in 2018, to 1% in July 2019 a day. Now the largest payday loan is 45,000 rubles. The maximum term is 2 months, while extra payment on such loans is limited to a threefold size of a loan.
Payday loans account for 57,6% of all loans that MFOs granted in the second quarter of the last year.
News Comments Today’s main news: RateSetter’s IFISA finally arrives. Renaud Laplanche to keynote at LendItFintech USA 2018. LendingClub makes changes to IRA product. Goldman could be buying Clarity. Today’s main analysis: LendingTree January 2018 Personal Loan Offers Report. LendingTree January 2018 Mortgage Offers Report. Today’s thought-provoking articles: Amsterdam gaining ground on London as Europe’s fintech capital. Senmiao Technologies sets terms […]
LendItFintech, the world’s leading event in financial services innovation, today announced that Renaud Laplanche, founder and CEO of Upgrade, Inc., will join the keynote speaker roster for LendItFintech USA 2018. For three days, the world’s most prominent and emerging fintech CEO’s will gather at the Moscone Center to focus on the hot button topics and issues exploring the future of finance.
Laplanche’s keynote speech will focus on his vision for Online Lending 2.0 and in particular how new technology, blockchain, enhanced processes and the combined learnings of the past 10 years have helped make online lending better for consumers and investors alike.
Laplanche will also unveil Upgrade’s next major consumer credit product that industry observers are already touting “the biggest innovation in financial services since the credit card. Also, to illustrate how the Online Lending 2.0 principles help create more value for consumers and enable faster growth while achieving better risk management, compliance and credit performance, Laplanche for the first time, will release metrics about Upgrade exactly one year after its public launch.
Tax rates for 2018 start at 10% and go up to 37% for the highest wage earners. It’s important to understand how this ordinary income affects taxes compared to other asset classes like equities.
Let’s assume you decide to invest through a taxable LendingClub account. In a given tax year, you are only allowed to deduct $3,000 in losses against your ordinary income unless you have capital gains to offset the losses.
If you have a sizable investment in LendingClub and have no capital gains you’ll have to carry forward any losses beyond the $3,000 to future years.
LendingClub Offering a Bonus for IRA Investors
After understanding the benefits of investing through an IRA it’s worth mentioning that LendingClub offers bonuses for new accounts. The bonuses range from $25 all of the way up to $3,000 and are available on Traditional IRAs, Roth IRAs, SEP IRAs or SIMPLE IRAs. Below are the bonus amounts in place for 2018.
TaxSlayer, a leading online and professional tax and financial technology company, today announced a strategic partnership with Kabbage, Inc., a global technology and data platform powering small business lending. The collaboration offers qualified small business customers hassle-free access to lines of credit up to $250,000 from Kabbage, and exclusive tax resources, including tips, promotions and discounts from TaxSlayer.
TaxSlayer customers will have access to:
Lines of credit from Kabbage up to $250,000 for qualified borrowers
Promotions from Kabbage, including a $100 gift card after qualification
Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.41% in January.
The average best APR offered to all borrowers with credit scores of 760 or above was 7.41%, a decrease of 13 basis points from the prior month, and 47 basis points from the same period one year ago.
At $24,218, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above, was down up 17 basis points ($41) from December, but up over 23% ($5,607) from the same period one year ago.
The top 10% of offers, presented to borrowers with the best profiles within this group, had APRs of 4.98% on average, and loan amounts of $34,892. A borrower with this APR and loan amount would save $2,896 by consolidating debt with a 10% APR over a three-year term.
Good credit (680 – 719 score): Offered APRs to consumers with a credit score between 680 and 719 averaged 15.79% in January.
The average best APR for all borrowers with credit scores of 680 – 719 was 15.79%, down 12 basis points from last month, but up almost 200 basis points from a year earlier.
At $15,628, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs increase by 1% ($160) in the last month, but drop by 1.72% ($268) from January 2017.
The top 10% of offers, presented to borrowers with the best profiles within the 680 – 719 credit score range, had an average best APR of 7.19%, offered with an average loan amount of $24,130. A borrower with this APR and loan amount would save $3,215 by consolidating debt from a 15% APR over a three-year term.
January’s best offers for borrowers with the best profiles had an average APR of 3.93% for conforming 30-year fixed purchase loans, up from 3.80% in December. Refinance loan offers were up 5 bps to 3.75%.
For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 13 bps to 4.55%. The loan note rate hit the highest since March 2016 at 4.45% and was also up 13 bps from December.
Consumers with the highest credit scores (760+) saw offered APRs of 4.41% in January, vs 4.70% for consumers with scores of 680-719. The APR spread of 29 bps between these score ranges was 1 bps narrower than in December but still near the widest since this data series began in April 2016. The spread represents nearly $15,000 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $238,518.
Refinance APRs for conforming 30-yr fixed loans were up 15 bps to 4.46%. The credit score bracket spread widened to 25 from 24 bps, amounting to $13,000 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $244,540.
Average proposed purchase down payments fell for the first time in 8 months to $63,411.
Indicative of this systemic trend is a report this week in WSJ.com saying Apple may be cutting a deal with Marcus – Goldman Sachs’ vision of the future on online lending.
According to the WSJ report, Goldman may provide Apple with point of sale credit at interest rates far lower than the typical credit card.
“By offering a lower-cost loan, Goldman hopes to siphon off some of that business. Goldman charges 12% interest on its average Marcus loans. Credit cards can charge upward of 20% and carry late fees and other charges. Partnerships with big retailers like Apple are key. They can deliver millions of customers that Goldman would struggle to find on its own.”
On Monday, the US stock market witnessed its largest point decline ever. The Dow Jones industrial average dropped as much as 1,600 points during Monday trade before closing down 1,175 points. Still, a spokesperson for Robinhood, the California-based brokerage, told Business Insider its users ramped up deposits on its zero-commission stock trading platform.
The 2018 Identity Fraud Study released by Javelin Strategy & Research, revealed that the number of identity fraud victims increased by 8% (rising to 16.7 million US consumers) in the last year, a record high since Javelin began tracking identity fraud in 2003.
The study found that despite industry efforts to prevent identity fraud, fraudsters successfully adapted to net 1.3 million more victims in 2017, with the amount stolen rising to $16.8 billion.
The 2018Identity Fraud Study found four significant trends:
Record high incidence of identity fraud –In 2017, 6.64% of consumers became victims of identity fraud, an increase of almost 1 million victims from the previous year.
Account takeover grew significantly – Account takeover tripled over the past year, reaching a four-year high. Total ATO losses reached $5.1 billion, a 120% increase from 2016.
Online shopping presents the greatest fraud opportunity – Card Not Present Fraud is now 81% more likely than point of sale fraud, the greatest gap Javelin has observed.
Half of all U.S. small businesses were breached in 2016, according to 2016 State of SMB Cybersecurity Report. Disruption to normal operating expenses costs an average of $955K, which can be devastating to small business owners.
As part of Kabbage’s ongoing effort to help small businesses to be successful, Kabbage recently surveyed more than 800 customers and nearly half (47 percent) plan to invest in cybersecurity products and services in 2018.
Hackers find value in obtaining employee and customer data, bank account information and/or intellectual property, no matter the size of the business. Today, more than 70 percent of attacks are targeted toward small businesses, largely due to the their beliefs that they won’t be hacked (mostly due to their size).
Attorney General Mark R. Herring announced today that more than $2.7 million in relief will be provided to Virginia consumers who took out loans with Internet lender MoneyLion of Virginia LLC-an affiliate of New York based Internet lender MoneyLion, Inc. Attorney General Herring’s settlement with MoneyLion will provide refunds and debt forgiveness to 3,800 consumers as a result of the company’s alleged violations of the Virginia Consumer Protection Act. Since creating a Predatory Lending Unit in his Consumer Protection Section, Attorney General Herring’s Office has recovered more than $25 million in restitution and debt forgiveness for Virginia consumers from online lenders.
The settlement includes the following key terms relating to loans made by MoneyLion during the period in question:
• MoneyLion agrees to provide $359,811.50 in refunds to 1,161 Virginia consumers who paid more than their loan principal plus 12% APR;
• MoneyLion agrees to give up the collection of $2,354,097.05 in illegal interest it charged on loans with 2,639 Virginia consumers;
• A payment to the Commonwealth of $10,000 as a civil penalty for MoneyLion’s alleged violations of the VCPA;
• A payment to the Commonwealth of $20,000 for its costs and fees in investigating MoneyLion’s alleged violations of the VCPA;
• Permanent injunctions preventing MoneyLion from misrepresenting its license status, allowable interest rates, and allowable fees.
A Montana federal judge refused to transfer a CFPB action alleging Think Finance duped borrowers and used sham tribal payday lenders to collect money it was not owed, finding Tuesday the case need not be moved to where the financial technology company’s Texas bankruptcy is.
U.S. District Judge Brian M. Morris said the state of Montana has a “substantial interest” in hearing the Consumer Financial Protection Bureau’s case since Think Finance LLC’s loans were voided under the state’s law.
LBA Ware, a leading provider of automated compensation software and systems integration solutions for mortgage lending and retail banking, announced that South Carolina-based Movement Mortgage has implemented CompenSafe to automatically calculate commissions for its loan originators (LOs) located in 700 branches across 49 states.
Cerberus Capital Management, L.P. today announced that an affiliate has entered into an agreement to acquire Cyanco Holding Corp. from funds managed by Oaktree Capital Management, L.P. (“Oaktree”). Cyanco is the largest global producer of sodium cyanide, a critical input in the gold and silver mining industry. Terms of the transaction, which is subject to customary conditions to closing, were not disclosed.
After a 45-minute meeting on Tuesday (Feb. 6), Comptroller of the Currency Joseph Otting had nothing but praise for acting Consumer Financial Protection Bureau (CFPB) Director Mick Mulvaney.
“Acting Director Mulvaney has helped reduce the burden on the banking system by delaying implementation of his agency’s Home Mortgage Disclosure Act rule, committing to reconsidering its payday lending rule, and deferring action on additional regulations until completing a more thorough review of those matters,” Otting said in the release. “I also applaud him for realigning his agency’s mission to the current needs of the nation, making its processes more transparent and fair.”
Peer-to-peer lending platform RateSetter has shared that is Innovative Finance ISA (IFISA) will launch tomorrow (February 8th). RateSetter said the IFISA will initially be available to existing customers, then to new customers on 1 March and to inward transfers from other ISAs in April.
Crowdstacker’s CEO Karteek Patel reveals why investors have opted for the Innovative Finance ISA over the past two years.
When the first types of ISA launched in 1999 the country was still in the first flush of a much feted Blair Government, the economy was buoyant, and the outlook rosy.
It was the end of a decade that saw average base rates of around 8%. Inflation meanwhile may have started at 9.5% in 1990, but it rapidly fell to a more manageable 1.5% by 1999.
2016-17 average ISA subscriptions were £5,558. Average subscriptions for our Innovative Finance ISA were above £11,000 – probably indicating early adopters of the IFISA are more seasoned investors, who are investing larger sums. Of course, as we know from other innovations such as smartphones and social media, where early adopters lead, the masses will follow, as long as the proposition is attractive.
Monzo asks customers for feedback on product launches and fees, allows them to invest in the company through equity crowdfunding rounds and holds community events across the U.K., either at Monzo offices or customer suggested venues. Its approach is based on the principle that customers will stay loyal and will refer others if they’ve got some kind of stake in it. Banks have traditionally relied on large-scale ad campaigns and promotions to get customers to change their providers. But U.K. customers still aren’t changing their banks in droves; according to U.K. nonprofit Bacs only 4.45 million successful switches have taken place since 2013. Plus, they’ll have less and less motivation to switch bank providers as more non-bank entities begin offering comparable services.
The company’s biggest growth driver is loyalty, with word-of-mouth referrals being the source of 80 percent of new customer growth, according to the company. The remaining 20 percent is based on a limited amount of sponsored ads on Facebook and Twitter. More than 30,000 customers participate in an online feedback forum for new products.
Separately, Monzo holds eight to 12 events per year around the U.K.
Esme Loans, the digital lending platform that allows small and medium sized businesses to quickly obtain unsecured loans of up to £150,000, will join a select group of leading alternative finance firms on NatWest’s Capital Connections panel.
RANGER Direct Lending (RDL) saw its net asset value (NAV) slide 2.95 per cent over 2017 due to its ongoing Princeton legal arbitration.
The investment trust’s December update showed its NAV return was 4.53 per cent in 2017 but the ongoing legal dispute with its Princeton investment over bankrupt lender Argon pushed it into negative territory.
On a monthly basis, RDL’s NAV was actually at a six-month high to 0.48 per cent.
TruFin has published a document announcing its intention to float on the AIM market of the London Stock Exchange in late February.
TruFin has offices in London and Birmingham and currently operates under three separate businesses: Distribution Finance Capital (DFC), Satago and Oxygen Finance.
The group also owns a 15 per cent stake in technology-led peer-to-peer lender Zopa. The platform was launched in 2005 and has since originated over £2.6bn of unsecured loans, connecting more than 320,000 customers to 70,000 investors.
The central bank is now reining in “social credit” scoring models by companies like Tencent and Alibaba that use consumer data from purchases and social behavior, as of the past weekend. These programs are designed to make up for the lack of institutional records of individuals’ creditworthiness in China’s financial system — something the central bank itself has tried to address with its own solution. Now the government is worried e-commerce-turned-fintech giants could use social scoring as marketing to sell their financial products.
China is a mobile-first nation. Mobile e-commerce took off there because its retail landscape was weaker and less efficient 15 years ago compared to that of the U.S.
Despite Brexit, London has managed to hang onto its status as Europe’s leading fintech hub, at least for now. According to the Nesta 2016 European Digital City Index, “London leads for both start-ups and scale-ups.” However, Stockholm and Amsterdam, which rank second and third respectively out of 60 cities, are leading the pack nipping at London’s heels, according to the index, which looks at how European cities support “digital entrepreneurship.”
Amsterdam has many claims to fame, but one of its lesser-known features is its concentration of 350 fintech companies, more notably in the payments (Adyen, Payvision, GlobalCollect), trading (BinckBank, Flow Traders) and alternative finance (Funding Circle, Spotcap) spaces.
The asset management firm Eiffel Investment Group which manages the €100 million marketplace lending fund “Prêtons Ensemble” (meaning “Let’s Lend Together”) for institutional investors Aviva France, AG2R LA MONDIALE, MAIF, MGEN and Klesia awarded European Digital Lending Awards at a gathering held in Paris on February 1st. The awards recognized SME projects presented on the lending platforms backed by the fund.
Nominated platforms included leaders such as Funding Circle and Lendix. The prizes however went to smaller marketplaces, a good opportunity to put the spotlight on these up-and-coming fintechs:
Green Economy award: Générale du Solaire, a project presented on Lendosphere, France.
Innovation award: Selfstock on ClubFunding, France.
Quality of Life award: All About Healthcare on Linked Finance, Ireland. Linked Finance is Ireland’s largest P2P lending platform with more than 16,000 registered lenders who have lent over €32 million to Irish businesses
Inclusive Economy: Mujeres y CIA on Finanzarel, Spain, and
Nou verd and Nou set on Loanbook, Spain.
According to a 2017 research report by the World Federation of Direct Selling Associations, the global direct selling volume increased by 1.9% in 2016, reaching $183 billion in sales between 107 million direct sellers.
In 2014, 45% of direct selling volume came from the Asia Pacific region and grew to 46% in 2015 – 2016, as the chart below shows:
According to management, ‘there are approximately 40 lending platforms in Sichuan province.’ Major competitive vendors that provide similar services include:
Sichuan Jinding Wealth Information Technology
Koudai Network Services
Chengdu Hongxue Jinxin Business Consulting
Chengdu Zhongke E-Commerce Co
Six months ended Sept 30, 2017: $182,960
FYE March 31, 2017: $73,237
Operating Loss ($)
Six months ended Sept 30, 2017: ($671,729)
FYE March 31, 2017: ($185,535)
Operating Margin (%)
Six months ended Sept 30, 2017: Negative
FYE March 31, 2017: Negative
Cash Flow from Operations ($)
Six months ended Sept 30, 2017: $302,568 cash flow used in operations
FYE March 31, 2017: $1,324,449 cash flow from operations
As of Sept 30, 2017, the company had $76,863 in cash and $736,246 in total liabilities.
FintruX is an established online lending platform that is introducing blockchain into its financial network to better serve both kinds of customers.
Nelson. Thanks for joining us today. Can you tell us more about yourself and FintruX?
I am the founder and CEO of FintruX and also Robocoder. Robocoder provides the technology behind Fintrux.
FintruX is a global peer-to-peer (P2P) lending platform on the Ethereum blockchain network for providing unsecured loans. It connects small businesses who need money for cash flow issues, with lenders who want to earn a better return on their money.
In some ways, tokenized P2P lending platforms is a “killer app” for the blockchain technology. We are pretty sure you would agree, but can you elaborate and in the context of what you are trying to do.
All the current monetary transactions require too many intermediaries to facilitate a simple transaction from end-to-end and the process itself is also inefficient and time-consuming. Furthermore, most of the systems are fragmented, inconsistent and usually require extensive human intervention. Finally, such transactions require numerous touch-points to handle and manage the “trust” between all of the parties involved. Our mission is to make trustless financing a no-brainer for both borrower and lender.
What is the biggest problem within the industry or do you think there is a gap in the market for FintruX to fill?
The biggest problem is that small and startup businesses do not have sufficient credit history or access to capital for their short-term cash flow needs. Furthermore, the traditional systems are inadequate, fragmented, inconsistent, labor intensive and involve lots of intermediaries. There are many P2P lending platforms in existence but they do not talk to each other.
The $14 billion in taxes the federal government receives each year from the banking sector could be eroded by global technology companies including Apple capitalising on policies designed to boost competition in the sector, the chief executive of the Australian Bankers’ Association, Anna Bligh, will warn on Thursday.
Emerging as an alternative to mainstream banking, NBFCs have also been playing an important role in bridging the credit gaps, i.e. in meeting the increasing financial needs of the underserved and unbanked areas in the corporate sector, unorganized sector and also for the local borrowers.
According to the Reserve Bank of India, in January 2017, a total of 28.8 million credit cards were in operation. Credit cards, also known as revolving credit, have been the preferred choice of masses as it enables repetitive use for daily purchases that can be paid back in instalments on a monthly basis.
According to PwC research, over 95% of financial services incumbents seek to explore FinTech partnerships.
Peer-to-Peer Lending: Business funding can also be availed through the peer-to-peer lending network. Loans are easily available and the interest rates are also comparatively lower. There are quite a few advantages of peer-to-peer lending.
In the UAE, we are seeing some significant strides, where one technology-driven real estate crowdfunding platform, Smart Crowd, recently received approval from the Dubai Financial Services Authority to establish the region’s first regulated real estate crowdfunding platform. This will enable any individual to invest and own a piece of UAE property for as little as Dh5,000 and will most likely stimulate sales in the secondary market.
Camilo Concha’s experiences in building specialized online platforms taught him that there was a need to place potential clients and patients with the right professional for their situation, but there was also the need to help them finance their legal and medical bills. That’s when he started the two specialty companies mylegalloan.com and medicalfinancing.com. His […]
Camilo Concha’s experiences in building specialized online platforms taught him that there was a need to place potential clients and patients with the right professional for their situation, but there was also the need to help them finance their legal and medical bills. That’s when he started the two specialty companies mylegalloan.com and medicalfinancing.com.
His ability to diagnose market needs and find viable, simple solutions brought about his latest, largest, and boldest venture yet, LendingUSA.
Prior to the 2015 founding LendingUSA, Concha attended a LendIt conference where he learned how to build a better platform. He connected with Cross River Bank, which now does all of the company’s loan licensing, and First Associates, who services the loans. He also connected with Howard Freedland. Freedland, in turn, brought Brandon Ross, CEO and founder of Direct Lending Investments, and the two partnered with online lenders to add $55M USD in debt capital to the $5M Concha had raised in equity funding. That $60M is the only funding the company has seen to date, and Concha says that it was possible to raise that amount due to the company’s $1B in loan application flows.
LendingUSA Continues Concha’s Successful Run
Simplicity is evident when we look at how LendingUSA got off the ground. “We basically built an underwriting model and started lending,” Concha said. Working with doctors and merchants at the point of sale (POS), the company has developed a strong vantage point, being able to offer their product to consumers who can’t or don’t want to do longer term financing.
Much of the client base is comprised of people who want to get elective medical procedures, such as liposuction, which are not covered by insurance. LendingUSA makes a loan to the customer but pays the amount straight to the doctor.
Loan pricing is set into the business model, and it is based on a credit profile, which includes credit score, debt-to-income ratio, and credit sought in the last six months. FICO scores are also a factor, but just one of the important things, with the company also assessing whether customers are maxed out on their credit and if they’re paying their bills. Risk assessment is measured by an algorithm, a process that allows the customer to be approved or declined on the spot.
Being a POS lender provides many benefits to the LendingUSA business model. Beginning the process with the provider, rather than the borrower, referrals come from the providers themselves, whether through an advisory role or by way of brochures available in providers’ offices. Providing loans at this point allows LendingUSA to offer financing in installment loans where other companies tend to deal in lines of credit. This allows the company to go higher on the credit scale than would be possible with lines of credit and to also go a little lower on the credit spectrum, as far as 620. Installment loans also prove more beneficial to the borrower as risk goes down every month.
The company charges a fee at the POS depending on their risk evaluation, and the merchant fee for these services usually runs about five to six percent.
During LendingUSA’s growth, the company has also acquired 30 branded websites including bridalloans.com, surgeryloans.com, petloans.com, and dentalloans.com. In all, the company currently does business with 3,700 different medical providers.
Working with customers who have an average credit rating of 682, the company currently has a loan volume in the neighborhood $225M. The average loan is $6K with an average interest rate of 22% and an annualized charge off rate of about 8-10%.
Choosing to focus on “life’s important moments,” LendingUSA focuses on “niche markets we think we can win in,” counting elective medical, dental, cosmetic surgery, chiropractic, pet loans, and funeral loans among the diverse group of industries it works in.
Competition and Customers
Concerning the competition, Concha shows another reason why he has proven successful in that he doesn’t worry himself with concerns about what other companies are doing, choosing to focus on what his is doing. “I don’t like to call it competition,” he said. “There are great companies like Care Credit, Affirm, and Green Sky that do similar things, but they work in other niche markets or do it differently by providing revolving lines of credit. We have our little niche and are a better fit for some people, [especially in that] installment loans are better for large amounts of revenue, and lines of credit better for smaller amounts.”
The typical LendingUSA customer is someone in their 40s and 50s who makes $60K to $80K a year. “We believe that a lot of people want to improve their lives,” Concha said. “Our customers are gainfully employed, but they don’t have the means to get the product they want. We make it available to them.” In doing so, the company provides a great service for their merchant partners by helping them to capture more clients and generate more revenue.
LendingUSA’s Goals and the Direction of the Industry
“Our initial goal was to reach $1B in sales in the next three to four years,” Concha said. “We’re looking to price loans better, securitize loans, and find new capital partners.”
Concha is positive about these goals as the cosmetic surgery and elective medical fields are growing every year. The growth is underscored by the fact that men are now gravitating toward cosmetic surgery, when the thought was taboo in the past. These procedures are now more generally accepted for men. He also says that fears of economic downturns, which might stunt growth in other industries, are less of a concern. “People still want to feel good about themselves; they might not buy a new house or car, but they want to look good,” Concha said.
LendingUSA’s Team and The Future
Concha considers himself fortunate enough to have built a strong team. This includes Mike Testa, the company president and the former president of Care Credit, who built a POS business in the medical industry from $80M to $6B; Sharad Shankar, the former chief risk officer of Lending Point, who now holds that title with LendingUSA; and
Jenann Shemisa, LendingUSA’s chief compliance officer, who served as a senior attorney for the enforcement division of the FDIC.
Understandably pleased with what he has built in less than three years since founding LendingUSA, Concha says the company is now focused on loan performance. “Because we’re at the POS, we’re able to compete more on service than on price. This means we can charge a little more, which allows our portfolio to perform at 500 basis points better on yield than most marketplace lenders. Everybody that advertises on LendingTree and online comparison sites is competing on price, which doesn’t help portfolio performance. By working at the POS, we get better yields because we’re not competing on price.” With this focus, the company has a goal of being number one in the markets it services.
Concha’s Past Comes Back to Reward Him
Concha came to the U.S. from Colombia with his family when he was 14. It only took him seven years to go from being a school boy who spoke little English to starting his first business, which he ran while he studied at California State University, Northridge and worked as a Spanish interpreter at the San Fernando Bar Association.
Seeing the desperate need for an attorney referral service, he founded the Attorney Search Network (ASN), which he ran out of his apartment until he could afford to pay for his first office space, a converted janitor’s closet that was so small he had to speak with clients in the hallway.
Concha then saw that he could create other companies to fulfill similar voids in different fields. This brought about the founding of 1800mysurgeon.com, created to help assist individuals who are looking for a board-certified and reputable cosmetic surgeon.
Concha now works out of one of the tallest buildings in the San Fernando Valley, employs dozens, and the two companies together have extensive databases with hundreds of doctors and lawyers from every legal and medical field. Add to that the lending businesses he has founded and he has quite the legacy. All of them are still growing strong. There’s nothing her to suggest that LendingUSA won’t maintain a similar trajectory.
News Comments Today’s main news: SoFi to roll out checking accounts. Zopa re-opens to new customers. Roostify integrates with LendingTree. China regulator says credit market should adopt blockchain. ETHLend hits 1M GBP in P2P crypto loans. Borrowell launches free Equifax credit report monitoring. Brazilian payments company sets post-Snap IPO record. Today’s main analysis: Blockchain equity funding vs. ICOs. Today’s thought-provoking articles: […]
SoFi is rolling out checking accounts without a banking license, demonstrating the new reality that a company doesn’t have to be a bank in order to bank customers.
By partnering with the Wilmington, Delaware-based WSFS Financial, SoFi will roll out a fee-free checking account and debit card this spring in a bundle it’s calling SoFi Money, designed to address the pain points customers have with day-to-day banking products, like high fees and clunky digital interfaces, executives said at a media gathering in New York Tuesday morning. SoFi Money will include peer-to-peer transfers between SoFi customers, mobile check deposit and high yield interest rates on deposits (0.75 to 0.85 percent). It will be available first to current SoFi members before the broader rollout.
Determining when to go public. SoFi has a number of key shareholders who might like to access wealth that is tied up in the company’s shares. That list includes the Japanese conglomerate SoftBank, which led a $1 billion equity financing round in 2015, and the venture capital firm Silver Lake Partners, which led last year’s $500 million round. That round reportedly valued the privately held company at more than $4 billion.
Deciding how to grow. But while student loan refinancing proved to be an excellent way to find new customers during a period of low interest rates, that opportunity is now shrinking, as rising interest rates reduce the spread between what borrowers pay the federal government and what SoFi can offer.
Yes or no on a bank charter?
Proving that he has the right background. Noto does not appear to have any experience in consumer financial services, which could be viewed as a weakness.
Roostify, a provider of automated mortgage transaction technology, today announced that it has integrated its online mortgage platform with LendingTree (NASDAQ: TREE), the online loan marketplace. The new integration makes it easier than ever for consumers to locate and apply with the right lender.
Lenders can utilize the new integration to create a seamless path for consumers to search, select, apply for, and close a loan online. Consumers selecting an offer on LendingTree from a lender using Roostify will be able to authenticate into the lender’s Roostify-powered online experience, with all information securely pre-populated. The consumer can move from shopping around to getting their loan in just a few clicks, streamlining the experience and improving lead quality for lenders.
The integration will enter general availability in Q1 2018 for all joint clients of Roostify and LendingTree.
More than 6 in 10 people don’t realize that online-only banks offer better rates and lower fees than their counterparts with branch access, according to WalletHub’s 2018 Banking Survey. But it’s true. What online-only accounts lack in terms of face-to-face interaction, they make up for with superior terms. For example, the average online checking account costs 47% less than its branch-based counterpart, according to WalletHub’s latest Banking Landscape Report. And the average online savings account pays 457% more interest than the branch alternative.
RealtyMogul, a leading real estate crowdfunding platform offering Reg D (accredited) and Reg A+ (both accreds and non-accreds) investment opportunities in commercial and residential property, has hired a new President to help lead the firm. Aaron Halfacre, a 20 year real estate executive, has joined RealtyMogul bringing in institutional expertise including in the hot REIT sector.
A former Campus Crest president and chief investment officer, Halfacre took a year and a half break after the publicly traded student housing REIT was acquired by Harrison Street Real Estate Capital in a $1.9B deal.
As president of RealtyMogul, Halfacre will be responsible for creating a strategy, growing assets and augmenting business growth. He will serve as a voting member of the firm’s investment committee, which has invested in more than $1.4B of real estate since 2013, the company reports.
Mobile identity company Juvo has received an investment from Samsung NEXT, an off-shoot of Samsung that launched in 2013 to create new software and foster a startup culture at Samsung. The amount of the investment was undisclosed and adds to the San Francisco-based company’s $54 million in equity funding.
The bigger story here is that the investment is a strategic one. Samsung will bring Juvo access to billions of underbanked prepaid users across the globe. This will help Juvo enable MNOs to increase smartphone adoption among prepaid mobile subscribers.
Chime, a mobile-only neobank for millennials, said Tuesday that it has opened 750,000 accounts to date and is signing up users at a brisk pace this month.
The growth is extraordinary. While there are many other mobile-only challenger banks in the U.S. — including Qapital, Digit and, more recently, Varo and Douugh — few have racked up large numbers yet. Chime touts a low-fee checking and savings account with a debit card and an app that provides automated savings and real-time notifications; there are no monthly or overdraft fees nor minimum-balance requirements. The Bancorp Bank holds the federally-insured accounts.
LendEDU, a marketplace for loans and financial products, just released data showing that 76% of people who apply for a personal loan are declined. One of the main reasons for rejection? A low credit score. The average American has a credit score of 687. Meanwhile, the average FICO credit score of an approved applicant was 741.
Of those who do get approved, LendEDU predicts that just 35% went on to accept the personal loan.
Currently, 16 million consumers have an unsecured personal loan. According to a TransUnion, personal lending balances grew a steady 10.8% in the second quarter of 2017, totaling $108 billion.
Back in 2010, fintech only made up 3% of personal loan lenders. In 2015, Transunion says that number jumped to 30%.
But of the many things that banks do, lending to small and medium sized companies (‘SME’ lending) is one of the more complex areas to emulate. It is also politically charged. As such, there is some evidence that the disruption attempted in the area of lending is itself being disrupted by the practicalities of a complex area of finance.
While observing that there will be times when “dramatic action” is needed to protect consumers and that, at such times, he expected the CFPB “to be vigorous in [its] enforcement of the law,” Mr. Mulvaney stated that “bringing the full weight of the federal government down on the necks of the people we serve should be something that we do only reluctantly, and only when all other attempts at resolution have failed.”
In using its enforcement authority, the CFPB will focus on “quantifiable and unavoidable harm to the consumer” and when such harm does not exist, the CFPB “won’t go looking for excuses to bring lawsuits.” In addition, there will be “more formal rule making and less regulation by enforcement” because “the people we regulate should have the right to know what the rules are before being charged with breaking them.”
CFPB priorities should be guided by data such as 2016 complaint data which showed that “almost a third of the complaints” received by the CFPB related to debt collection and “[o]nly 0.9% related to prepaid cards and 2% to payday lending.”
In light of the Dodd-Frank Act requirement for the CFPB to “consider the potential costs and benefits to consumers and covered persons,” CFPB decisions should be driven by quantitative analysis. Although qualitative analysis can play a role, it should not be to the exclusion of measurable “costs and benefits.”
Last month’s “Making it in Grand Rapids” article focused on the ever-expanding alternative financing options for entrepreneurs, such as: impact investment funds, peer-to-peer lending solutions and crowdfunding platforms. Grand Rapids entrepreneur Don Rhoads is Owner/Inventor of At Last Industries (At Last), which created the BedBud Alarm. He is also Head of Development at Cut Through Creative. Rhoads shares his progression from having an idea through the development and launch of his Kickstarter campaign—and the insights he learned along the way.
RG: A recent Small Business Credit Survey reported that “70 percent of startup applicants are in need of funding to support [their growth]” and that “52 percent of startups [have] applied for financing.” Did you pursue any avenues before deciding on crowdfunding?
DR: Yes. I actually applied for and presented at a 5×5 Night. Unfortunately, I didn’t win that one, but as much as I was disheartened, I was still [determined to] fulfill the product. Also, through traditional bank loans, I applied through my current bank. It was a little bit difficult. In a startup, it is difficult to put a value on a business. [Banks] want capital behind it because most startups fail anyway, so they want some substance behind you so they can get their money back. I was told I would need to be a little bit further down the line to get additional funding.
Technology arrives in waves and is embraced over an adoption curve. These waves are growing stronger – in large part because technology is becoming ever more powerful. Over time, we have seen these waves play out in financial planning, too.
It is worth looking at two of the challenges faced by the industry now. The first is demographics. Clients have grown older and wealthier, but they are not being replaced within the market for traditional advice services. This is creating an advice gap for firms who need to replenish their client bases.
The second big issue is that consumer engagement is challenging. Long-term thinking hurts. As Daniel Kahneman articulated in Thinking, Fast and Slow, human beings do not easily think about the future in an analytical way and there remains room for improvement in financial literacy among the public. Add to that the low levels of customer trust for the industry and many consumers are not switched on to the benefits of financial advice.
Zopa, the UK’s first peer-to-peer lender, has reopened its platform to new customers after having to close to new money last year amid high demand for its new Innovative finance Isa (Ifisa) product and a long-running imbalance between lenders and borrowers.
Financial technology firms were supposed to start breaking into mainstream banking this month when new rules forced Britain’s nine big banks to loosen their grip on the industry.
But many fintech companies are still waiting with frustration on the sidelines after the banks delayed making the changes.
Financial technology firms were supposed to start breaking into mainstream banking this month when new rules forced Britain’s nine big banks to loosen their grip on the industry.
But six of the nine banks have asked Britain’s regulator for an extension to the January 13 deadline for putting in place the ‘open banking’ regulation, which overlaps with a new European Union directive known as PSD2.
The gender balance has been particularly notable in the finance sector this year, as Forbes named Starling Bank’s Chief Platform Officer, Megan Caywood, and Lendable co-founder Victoria van Lennep alongside her business partner Martin Kissinger, as ones to watch.
In the technology category, Monzo co-founder Jonas Huckestein and the co-founders of digital receipts startup Flux all found themselves highlighted by Forbes.
Blockchain technology should be adopted as part of a plan to boost development of China’s secondary loan market, according to a paper by the China Banking Regulatory Commission (CBRC).
Published on Jan. 19, the paper, drafted by a special committee, covers a variety of topics around developing and regulating financial technologies. In a section on the future development of China’s credit market, it suggests the country should double down its adoption of blockchain technology.
Download and read the report yourself here (in Chinese).
Ant Financial, an affiliate of Alibaba, is one clear example of a company using fintech to encourage a greener world.
Ant Forest is the world’s first largescale, bottom-up pilot in greening citizens’ consumption behavior through the use digital technology and social media. It is an app that Ant users can voluntarily engage with to reduce their carbon footprint and encourage their social networks to do the same. Users that perform carbon-reducing activities, such as paying bills online or walking to work, relative to a predetermined benchmark, are rewarded “green energy” points. As users accumulate enough points virtually, a real tree is planted. To date, Ant Forest has planted saxauls, willows, and Scots pine trees in Inner Mongolia and Gansu.
Studies have shown that users tend to quickly switch products and services. This also concerns banks as the competition and the number of Open Banking services increase due to the implementation of the European Directive PSD2.
Onboarding becomes particularly important in digital era. It can be a productive introduction to a new service or a challenging obstacle that deters customers. The banks of the future should provide a full digital onboarding.
Log in difficulties or problems shouldn’t create obstacles for the customer. After all, no one would go to a restaurant with a locked door.
Users should be able to fully control their banking. It is crucial for them to find a certain transaction and download a payment slip. View transaction history is among the TOP 3 customer scenarios. This function should be simple and understandable. Users want to filter their transactions to find specific items, view detailed information, report a violation, check payment status, export and save them, etc.
We are pleased to see that bank payment interfaces are becoming simpler each year. Digital technologies allow us to move complex banking procedures to the background. Challenger Banks ar a good example here.
The purpose of payment limits is to ensure the user’s security. The user should have online access to a flexible configuration of any financial transaction.
There shouldn’t be too many notifications, only relevant ones.
Being in the users’ shoes and finding pain points in products and services will be a crucial competitive advantage. Companies recognising this issue will take a leading position in the future financial market.
In Q1’17, 19 ICOs closed for about $21M. Three quarters later, in Q4’17, over 500 ICOs closed for almost $3B. According to CB Insights, 2017 saw over 5x more capital deployed in ICOs than in equity financings to blockchain startups. Q4’17 alone saw that number jump to 7x.
In total, ICOs raised over $5B across nearly 800 deals in 2017. To put those numbers into context, equity investors deployed $1B in 215 deals to the sector.
GDS Link Acquires Fraudscreen, the UK’s Leading Provider of Analytics to Predict Payment Intent (GDS Link Email), Rated: A
GDS Link, a global provider of risk management solutions and consulting for multiple verticals within the financial services industry including marketplace lending, retail finance, alternative financial services, credit card, auto, and business lending and leasing, today announced that it has finalized the acquisition of
Finastra sees accelerating FusionFabric.cloud adoption (Finastra Email), Rated: A
At its regional flagship thought leadership event, Finastra Universe Paris,Finastratoday welcomed new companies to the FusionFabric.cloudopen architecture. Among the early adopter Fintechs, consultants, banks and academics using the platform to develop and deploy innovative apps are Efficiency MC, Conpend and BankBI. In addition, Thomson Reuters joins Finastra’s innovation ecosystem as a data provider.
Thomson Reuters is currently embedding its instrument reference data into FusionFabric.cloud.
Paris-based system integrator, Efficiency MC, is using the platform to develop an interest rate derivatives pricing model app.
European Fintech, Conpend, is using FusionFabric.cloud to develop apps for corporate banking.
Cloud focused Fintech, BankBI, has a Performance Management and Analytics application for FusionFabric.cloud to complement the Finastra retail banking solutions, including C-suite dashboards.
ASIC’s second marketplace lending survey revealed that $300 million worth of personal and business loans were written by peer to peer lenders during the last financial year – almost double the amount commissioned during the 2015/2016 financial year.
The snowballing popularity of these types of loans is measured by the fact that, as of June 2017, the industry had 7,768 investors and a further 18,746 borrowers – numbers that had doubled over the preceding 12 months and are only set to grow in the new year.
Comparatively, at the lowest peer to peer rate in the Mozo database of 6.99% (on offer from Harmoney), the average Aussie borrower would pay just $5,634 in interest on the same loan – saving more than $4,000 in the process.
2.2 Electronic platforms connecting banks and NBFCs to borrowers
The RBI has clarified that electronic platforms that assist only banks, non-banking financial companies (“NBFCs”) and other regulated All India Financial Institutions (“AIFls”) to identify borrowers will not be considered peer to peer lending platforms (“P2P Lending Platforms”). However, in cases where, apart from banks, NBFCs and AIFls, or other retail lenders use the electronic platform for lending, the platform will have to register separately as a non-banking financial platform – peer to peer lending platform (an “NBFC-P2P”).
2.3 Leverage ratio and investible funds for an NBFC-P2P
The RBI has clarified that for an NBFC-P2P, customers’ funds lent or borrowed by using the platform is not reckoned as an outside liability of the NBFC-P2P, for the purpose of determining the leverage ratio of the NBFC-P2P.
(a) Do the P2P Lending Platforms have to fulfil the 50-50 test issued by the RBI to fall within the purview of the P2P Directions?
The RBI, with its clarification that an existing NBFC cannot operate as an NBFC-P2P, has clarified that the 50-50 test set out by the RBI to qualify as a non-banking financial company is not applicable to an NBFC-P2P.
With closed commitments for $39 Mn, the 3one4 Capital team will look to enhance its deep involvement model across its investment domains. The fund will invest early stage startups with ticket sizes of $250K to $2 Mn.
For a Western comparison, Tryb aspires to be like LendingClub with a focus on digitizing the predominantly analog systems of financial services and banking in Southeast Asia, a region of over 600 million consumers.
“There’s strong demand to start buying ASEAN credit, with Japanese, Chinese, American and other investors looking to buy up $50-100 million worth. But they don’t know where to start since it’s all on paper,” he said.
Currently, the Tryb business doesn’t make direct revenue. It holds stakes in a number of businesses — including MC Payment which is in the process of going public in Singapore — but Gnirck said it has two acquisitions that he expects to finalize in the coming months.
Joining the Crowd Genie advisory board is David Drake, Founder and Chairman of LDJ Capital, who is also a global pioneer in the cryptocurrency industry and has written for more than 100 publications on innovative investing. Also joining the board is serial entrepreneur Petter Sehlin, who is a Founding Partner of global angel fund True Global Ventures and founder of the Polarchain blockchain. The founders of one of the world’s most comprehensive online cryptocurrency databases and information resources, AllCoinWiki, Anders Larsson and Joakim Holmer have also joined the board.
According to figures shared with Wamda by the World Bank Global Findex database, only 14 percent of adults in Egypt have an account as of 2014, and eight percent use an account to make digital financial payments. The Findex said that about 86 percent of adults in the country do not have an account and are therefore considered unbanked.
The model of Fawry, has demonstrated the validity of such business models, and has driven several concepts to launch.” Fawry, which was launched in 2008, provides payment solutions through ATM machines, mobile wallets, and retail points.
Egypt-based fintech startup Moneyfellows raised $600,000 from a group of investors led by Dubai Angel Investors and 500 Startups. This web and mobile-based platform founded in December 2014, allows users to create, manage, and track money circles (group money lending) online with members of their social networks. The startup makes money by charging users a small fee when they withdraw their payout from their money circle. So far, the startup has around 2,600 paying users and about 240 active circles.
Vapulus, which launched in December 2017, partners so far with 400 retail and F&B merchants in the country, and aims to reach 16,000 within one year of operation. The startup is a mobile app and mobile POS service for both individuals and sellers.
Borrowell today announced that it is providing Canadians with free access to their Equifax credit reports. For the first time, Canadians will be able to monitor important information in their Equifax credit report on a monthly basis, including credit utilization, inquiries and credit account history, for free online.
To date, Borrowell has provided credit information to nearly half a million Canadians.
PagSeguro Digital LTD, a payments company owned by Brazilian media group Universo Online SA, raised about $2.27 billion in an initial public offering on the New York Stock Exchange, according to Bloomberg data.
The company, which has a similar model to Jack Dorsey’s Square, sold shares at $21.50 each, above the top of the price range of $17.50 to $20.50 in the offering prospectus, with demand higher than underwriters expected. The equity offering is the largest on the New York Stock Exchange since Snap Inc in March 2017. Investors warmed to the stock, which rose as much as 36 percent to $29.25 in early trading.
In many ways, Canada has long lived under the shadow of the U.S. The alternative lending industry has proven to be no exception. The last few years, however, have seen Canada turn the corner on marketplace lending (MPL). With MPL markets around the world (especially Europe, U.S., and UK) maturing, startups around the world are […]
In many ways, Canada has long lived under the shadow of the U.S. The alternative lending industry has proven to be no exception. The last few years, however, have seen Canada turn the corner on marketplace lending (MPL).
With MPL markets around the world (especially Europe, U.S., and UK) maturing, startups around the world are scampering to find new locations and new opportunities to tap. Though it is not fair to term Canada as a new entrant to the fintech ecosystem, it has finally garnered the attention as one of the most promising alt-lending hubs.
Canadian Alternative Lending Numbers
As the above image indicates, the Canadian alternative finance industry is on a strong growth momentum. All segments of alt-lending (consumer, SMB, real estate) have shown multiple times growth albeit on a very low base. With a GDP of over 1.5 trillion dollars, it is a massive market for lenders. The current size of the market does not even reach a billion dollars, a paltry sum for a country with household debt over 2 trillion dollars.
A Supportive Regulatory Framework
Ontario Securities Commission (OSC), the fintech regulatory body of Canada, has been very supportive of the industry and is one of the major tailwinds for alternative lending in Canada. In October 2016, OSC started LaunchPad with an aim to support and guide fintech startups with compliance. This initiative was followed by the establishment of a Fintech Advisory Committee in January 2017, which helps apprise the regulator on fintech-related developments as well as regulatory challenges faced by businesses. Feedback from the committee will be used by OSC to frame future regulatory guidelines.
Lending startups will still have to comply with different regulatory compliance obligations depending on what kind of financial services are offered by them. Also, depending on which province they are operating in, they will be subject to different regulation and licensing requirements.
Leading P2P Lenders in Canada
Lendified was founded in 2015 by Troy Wright and is headquartered in Toronto, Ontario. It raised $80 million in a couple of funding rounds. Small business owners can apply online in under 10 minutes, receive an instant quote, and get funded in as fast as 48 hours. It offers loans ranging from CAD $5,000 to CAD$150,000 with APR ranging from 8%-18% and terms ranging from 6-24 months.
Borrowellwas founded in 2014 by Andrew Graham and Eva Wong. It’s also headquartered in Toronto. It recently raised over $57 million in funding for aggressive expansion and offers free credit score monitoring, personal loans, and product recommendations. It has lent over $10 million to over 10,000 customers. Borrowell offers loans ranging from $1,000-$35,000 and offers two terms–36 months or 60 months–with APRs ranging from 5.6%-25%.
Financeit was founded in 2011 by Casper Wong, Michael Garrity, and Paul Sehr. Headquartered in Toronto, it has managed from inception to raise over $38 million and recently was acquired by Goldman Sachs for an undisclosed amount. Over the years, Financeit has worked with over 7,000 merchants and processed over $2.5 billion in loan applications. Financeit offers a platform that allows businesses to offer consumer financing to their customers from various devices in Canada. It works with multiple lending partners and automates the banking role for its partner financial institutions, entirely managing loan origination, credit adjudication, regulatory reporting, loan servicing, and collections.
FundThroughwas founded in 2014 by Steven Uster. Its headquarters is in Toronto, and it has raised over CAD $26 million in multiple funding rounds. FundThrough is an innovative technology company helping American and Canadian small business owners improve their cash flow through invoice factoring and financing. It charges 0.5% fees on the top of the funding amount and the borrower has to repay within a period of 12 weeks. The average invoice ranges from $1000 to $100,000 while the average outstanding loan is around $50,000-100,000.
Lendful Financial was founded in 2015 by Alex Benjamin and is located in Vancouver, British Columbia. It has raised $15 million in multiple funding rounds and offers three-to-five-year, fixed-term loans to credit-worthy borrowers with a credit score of 650 and over. It offers loans up to CAD $35,000 with APRs starting from as low as 7.9%. Loan terms range from 3 to 5 years.
Lending Loop was founded in 2014 by Brandon Vlaar and Cato Pastoll. Headquartered in Toronto, it has raised $12 million in debt and equity. Lending Loop is Canada’s first and only regulated peer-to-peer lending marketplace focused on small businesses. Its core focus is on providing businesses with accessible capital at a fair rate of interest through a simple online process. Loans range from $5,000- $250,000 with rates starting as low as 5.9% and terms from 3-60 months.
Progressa was founded in 2013 by Ali Pourdad, David Gens, and Michael Jover. Since inception, it has raised over $11 million. Progressa is a direct-pay lending platform that helps Canadian individuals who are in debt pay back their due bills. It pays its users’ bills directly so they are able to manage debt, interest payments, and collections. The platform provides users with partial payment loans between $1,000 and $15,000 with payback terms ranging from 6 to 60 months. It enables its users to get access to automated interest rate reductions every six months helping them cut down borrowing costs with good payment behavior.
From a global point of view, Canada is a relatively small market and still at a nascent stage. But the supportive regulatory framework coupled with growing interest of VCs and investors in the Canadian market says that major expansion is just around the corner. The Canadian market would also be conducive for U.S. players looking to expand their geographical ambitions.
News Comments Today’s main news: Consumer Financial Protection Bureau (CFPB) to sue Santander. Welendus surpasses 150K GBP fundraising target. Klarna’s profits increase. The CFPB leadership fight migrates to email. Chinese regulator looks at online lender custodian banks. ETHLend, Brickblock partner on blockchain lending. Today’s main analysis: Everything you need to know about the P2P lending market in New Zealand. Today’s […]
Workers get almost instant access to wages with payday apps. AT: “This is interesting. The future labor market could become more competitive based on how quickly employers can promise to pay their employees. Will we see the day where employees get paid by the hour on the hour for work accomplished. How about by the minute, or real-time payments?”
Mulvaney, English both take charge of CFPB by email. AT: “This is a silly little feud that no one can win. It would be better if the Dems cede the fight to the Trump Administration, since ultimately he will get to choose Cordray’s successor anyway. Take it up in the next election battle.”
Open Banking to unlock the door for digita-only banks. AT: “This is a wait-and-see. Open Banking is scheduled to go into effect in January. I don’t think we’ll see a wave of digital-only banks right away. I can see a long-term trend of growing interest in them by consumers as they learn about them.”
The Consumer Financial Protection Bureau (CFPB) is gearing up to sue Spain-based Santander Bank, claiming the bank has overcharged its car loan customers.
Citing sources familiar with the CFPB’s plans, Reuters reported that the CFPB suit could happen as soon as Monday (Nov. 27). The lawsuit is focused on Santander’s guaranteed auto protection financial product that protects car buyers from a portion of the cost if there is a serious crash.
Auto lending is big business for Santander, representing $38.5 billion of the bank holding company’s $137 billion in assets.
New reports from Biz2Credit, Reliant Funding and Mercator take a look at how small businesses are accessing external financing towards the end of the year as the holiday rush descends.
25 percent of SMB loan applications at large banks were approved in October, according to the latest research from Biz2Credit. That means large banks (with $10 billion-plus in assets) have boosted their SMB loan approval rates to a new post-recession high, researchers said.
56.8 percent of SMB loan applications were approved by alternative lenders, according to Biz2Credit.
12 percent of SMB owners told Reliant Funding they are aware of alternative lending and have used it. Nearly half said they are at least familiar with alternative lending. 39 percent of SMB owners told Reliant that they have never even heard of alternative lending.
42 percent of SMBs that use alternative finance say they use it to buy inventory, while more than one-fifth said they use it to replace or buy new equipment. One-fifth also said they use it for marketing initiatives, Reliant Funding found.
Uber Technologies Inc., McDonald’s Corp. and Bloomin’ BrandsInc.’sOutback Steakhouse are among a growing group of employers giving workers near-instant access to their wages through payday apps.
New tools that allow people to spend the money they just earned have provided some workers an alternative to short-term, high-interest loans, say the technology startups offering the services. The payment plan also can boost employee attendance and tenure, managers say.
Daily payments could help some workers smooth out the financial volatility of fluctuating work schedules and income, economists say.
President Trump’s pick to lead the consumer watchdog, Mick Mulvaney, arrived at the office early Monday morning with a bag of Dunkin’ Donuts in hand. Mulvaney, the director of the Office of Management and Budget, is the acting director of the group until Trump can get a permanent leader through the Senate confirmation process — at least, according to the Trump administration.
But the former head of the CFPB, Richard Cordray, appointed Leandra English to lead the group following his departure. English has since filed a complaint in U.S. district court in Washington, D.C., to block the Trump administration’s rival appointment.
On Monday morning, English was communicating with CFPB staff through an all-staff email — a Thanksgiving message expressing gratitude and saying it was an “honor” to work with her colleagues.
Mulvaney, meanwhile, sent a competing all-staff, advising staff to “please disregard” messages from English in her “presumed capacity as Acting Director.”
Online student loan marketplace LendEDU has ranked the best gift cards, pointing out the attributes that make one gift card a better choice than another.
According to LendEDU, roughly $1 billion in gift cards sold last year were not redeemed.
“The most important question to consider when buying a gift card is this: Is it versatile?” he told ConsumerAffairs.
Another important consideration, Brown says, is a gift card’s resale value. The recipient might rather sell the card for cash on one of the many gift card exchanges. The most popular gift cards often sell for 80 to 90 cents on the dollar, while less popular cards can go for half their face value or less.
A LendEDU poll of consumers found that 78.7 percent of consumers plan on giving at least one gift card this holiday season and 75.6 percent of consumers would rather receive a gift card than an actual gift.
When Chinese immigrants in Brooklyn’s Sunset Park have problems — legal, financial, marital — they come to see John Chan.
Lately, they’ve been coming to John Chan about money — specifically the collapse of informal lending clubs known as “biao hui.”
Biao hui are essentially informal banks made up of immigrants lending money to each other. A group — in China, this would traditionally be a group of close friends or relatives —gets together and throws money in the pot. One person acts as the organizer or banker and the money is then lent out on a rotating basis, with varying interest rates depending on how much money is needed, and when a person needs it.
But in New York City this year, two biao hui worth a combined $22 million collapsed.
Less than a week after launching its latest equity crowdfunding campaign on Seedrs, short-term peer-to-peer lending platform Welendus has successfully secured its initial 150,000 funding target from more than 100 investors.
More than one in five are saving or investing less because they cannot access advice on how to handle their money, research for the Nottingham Building Society has suggested.
The study found 21 per cent of adults believe they are not saving as much as they could and would be able to put away an extra £134 a month on average if they could get financial advice – the equivalent of more than £1,600 or three weeks’ average earnings before tax.
The research showed younger savers and investors were affected most by this, with nearly one in three (30 per cent) of under-35s believing they were not saving enough because of a lack of advice compared with just 12 per cent of over-55s.
Three senior City bankers are masterminding the launch of a new digital bank focused on shaking up the UK savings market.
The trio is led by Huy Nguyen Trieu, a fintech entrepreneur who led a capital markets team at US bank Citi in London until quitting last summer. He is working on the project with his former colleague Lionel Durix, who remains in a senior Citi role, and Paul Hanks, the former chief technology officer of UK digital bank Atom.
They plan to launch a mobile savings app that uses artificial intelligence to give savers tailored advice and offers “risk-free” products such as Isas and high interest rate savings accounts to help them reach their financial goals.
Yet in parallel to this, there is a growing cohort of digital-only banks that are bucking the trend – the most famous of which include Monzo, Atom Bank and Starling Bank. Not only do they have different client service delivery models, they have cultivated a customer base that is highly supportive and engaged.
But while Monzo has acquired over 400,000 customers for its pre-paid card since 2015, as Barclays has seen over 142,000 customers switch from its current account over a similar period – digital-only banks still remain relatively unknown.
Yet Open Banking – set to launch on January 13th – stands to change this.
Last September we launched our first LendInvest Property Development Academy. A year on, it’s fair to say that the response has been overwhelming.
For too long, the housebuilding crisis has been someone else’s problem. It’s been up to the big builders to get on with, or whichever ambitious politician has been handed the housing brief this week. And let’s be honest, that strategy has been an abject failure, lacking in direction and impetus.
No, if we are going to tackle the shortage of homes across the UK, we need to recognise that it is something we can all play a part in. So if the big builders on their own are unable to build the homes the nation needs, we must do more to cultivate a generation of smaller builders, taking on more modest but no less meaningful projects. A wider source of housing developers will inevitably mean more homes are built.
For all of the cheer and hip-hop thumping throughout the hall, there was an unmistakable undercurrent of anxiety this year as London’s tech community reckoned with the coming of Brexit.
“It isn’t just that we’re at risk of losing our engineering talent,” Meekings said, half-joking. “We might lose our ping-pong stars as well.”
More than 30percent of Funding Circle’s London employees are non-British EU nationals. Ever since the company was founded in 2010, many have gravitated to the ping-pong table that co-founder Samir Desai set up in its lobby, next to a cabinet that has steadily filled up with trophies. Funding Circle is one of four companies Bloomberg is following through the Brexit process.
The deals showed that even as Brexit dents the U.K. economy, the fledgling online-lending industry continues to grow. In the third quarter, Funding Circle arranged 114 million pounds in net lending to its borrowers. That surpassed comparable loans by U.K. banks, on a combined basis, for the first time.
A national inspection team, led by the China Banking Regulatory Commission (CBRC), has recently asked local authorities that supervise online lending to assess commercial banks appointed by P2P platforms to provide custodian services for investors’ funds, multiple bank employees told Caixin.
The National Internet Finance Association of China recently passed a resolution to jointly launch a personal credit information platform with eight third-party credit service agencies.
The NIFA will hold a 36 percent stake in the forthcoming platform, which is expected to have registered capital of 1 billion yuan ($152 million), and it will invest no more than 360 million yuan in the platform within five years.
The platform will mainly serve online personal lending institutions, in addition to other market players including traditional commercial banks, regulators and third-party credit service agencies.
LexinFintech Holdings Ltd., operator of China’s leading online lender Fenqile, was slated to meet with advisers over the weekend to decide if it will go ahead with a proposed initial public offering (IPO) in the U.S.
According to Bloomberg reports, the company is expected to decide soon if it should launch a roadshow for its IPO or wait until a later time to go public.
The European Commission approved rules on Monday to increase competition and toughen up security in how people pay for goods and services across the European Union, pitting banks against financial technology firms.
The rules flesh out an update to the bloc’s payment services law and are among the most disputed in recent financial regulation, sparking intense lobbying as banks and fintech firms clashed over access to customer data.
The revised law comes into force on 13 January, though some of the security elements approved on Monday won’t be binding until September 2019 to give banks and fintech firms time to adjust.
Irish peer-to-peer lender Flender has reported attracted close to more than €2 million through its latest funding round. This news comes less than a year after the lending platform secured £501,700 through its equity crowdfunding campaign on Seedrs.
ETHLend and Brickblock are announcing a strategic partnership to explore the possibilities of lending with Blockchain technology.
A primary focus will be on the tokenization of assets to simplify lending and bring secure real-world assets into the lending procedure as collateral.
The application is ideal for token holders who are in need for liquidity and those who want to participate in a free lending market. Instead of selling and closing a token position, a borrower can easily pledge digital tokens to receive Ether. Moreover, ETHLend is introducing token lending, which enables profiting from down market by enabling short selling market.
Tokenizing real-world assets such as real estate achieves three disruptive objectives:
A strong collateral that can be expected to keep its value for a short-medium time period.
An opportunity for people to collateralise their property with Brickblock, and then using it to secure their loan.
New investment opportunities for downside market by enabling short selling for tokenized real assets.
Nearly nine in every 100 loans written through New Zealand’s peer-to-peer (P2P) lending platforms are in arrears, according to the Financial Markets Authority (FMA).
Borrowers responsible for 1,469 loans, worth more than $20 million, are overdue on their loan repayments.
While the bulk of lenders are investing smaller amounts of money (IE under $5,000), 48 have lent an average of $1.54 million each. Totalling $73.84 million, this is equivalent to a quarter of the $289.10 million of loans outstanding (loans that were still within their specified term at the end of the reporting period).
Harmoney – the first P2P lender to launch in New Zealand in 2014 – is also the largest, with 83% of outstanding loans in the market written through its platform.
The FMA’s data also shows there are 207,230 borrowers registered with P2P platforms, 843 of which are repeat borrowers, who have repaid their loans and taken out new ones.
The figures show individuals took out $121 million of new loans in the year ended June 30 through P2P platforms and businesses borrowed $31.5 million with total loans outstanding at $259.6 million and $29.6 million respectively as at June 30. Meanwhile, crowdfunding platforms raised $74.2 million from retail and wholesale investors, with 34 successful offers out of 50 in the year.
The data show peer-to-peer lending still pales in significance to the established lending channels, with $10.89 billion personal consumer loans with banks as at Sept. 30 and a further $6.88 billion with non-bank lenders. Business loans with banks totalled $101.61 billion as at Sept. 30 and$4.59 billion with non-banks. Peer-to-peer lenders had 16,977 outstanding personal loans and 92 business loans as at June 30. In terms of asset quality, 1,469 P2P loans worth $20.4 million were in arrears, or 8.61 percent of total loans outstanding, while 833 loans worth $8.5 million were written off.
Fintech firm Valuiza will conduct an Australia-wide study of the state of financial planning by gathering feedback from existing clients of practices to measure their experience and intentions. It is currently inviting advice practices to participate in the study.
The data for the report will be collected during January and February next year with practices able to review the results in real time, he said. The results for individual practices will be confidential.
Peer-to-peer lending platforms RateSetter and Bigstone both called for better disclosure of rates and fees, which are currently expressed in a variety of different ways by industry players. RateSetter chief executive Daniel Foggo said borrowers should be told the cost of the loan expressed as an annual …
Indian banks have started mining data on customers’ smartphones for fast loan approval, testing out cutting-edge but controversial technology in what is potentially a huge market for such products.
Long hampered from lending to the hundreds of millions of Indians without credit histories, banks are hoping to slash risk-assessment costs and trigger a new wave of consumer lending with apps that look at everything from Facebook connections to online shopping habits to rate potential borrowers.
India’s most sophisticated banks are working with local and international fintech startups to develop, test and launch a version of a technology used by microlenders in Africa, China and elsewhere.
Commercial banks had around $1.09 trillion of loans outstanding in September, according to the Reserve Bank of India. Of that, about $270 billion were personal loans, a portion whose growth is outpacing the overall loan market.
But about 40% of HDFC’s 8 million and 12 million loan applications a month are from people without credit histories. Most Indians have never had a credit card or taken a home loan.
Before she co-started one of India’s few digital EMI startups, Lizzie served as the India head for Wonga, the British payday loan company. She then joined Development Bank of Singapore to help launch ‘digibank’, the new mobile-only virtual bank of India. Very recently, the India FinTech Awards 2017 named her Woman Leader in the Fintech category.
“I think fintech, especially in India, is one of the most exciting and biggest opportunities in the world. The opportunity here is not just to build huge valuable businesses, but also make a real impact on people’s lives and the economy. I think fintech is taking off in such a big way because the timing is right. It’s such a HUGE problem to solve, and we finally have all the pieces of the puzzle in place – whether it is KYC, mobile adoption or digital payments,” she added.
“I am biased of course, but I expect to see a lot more focus on payments coupled with credit in the form of ‘Paylater’ solutions, EMI solutions and all things related to transactional credit. This is such a great solution for this market where credit cards don’t make sense but consumers are keen to shop,” Lizzie said.
Property-and-casualty insurer Sompo Holdings Inc (8630.T) has set up a fintech hub in Israel, becoming the first Japanese insurer to do so in a country where it hopes to tap local expertise in digital and cyber-security technologies.
Ovamba, a fintech firm that uses blockchain and other new technologies to connect investors with African SMEs, has facilitated a €30mn deal for the purchase and export of cocoa for Cameroonian commodity marketing company Producam.