Thursday November 21 2019, Weekly News Digest

LexinFintech Vintage Curve

News Comments Today’s main news: SoFi helps Pro.com make home improvement loans. BlueVine raises $102.5M. OCC, FDIC propose Madden fixes. Zopa gets banking license. Twino CEO stands down, platform hits 1B euro in loans issued. Today’s main analysis: LexinFintech lending business analysis (A MUST-READ). Today’s thought-provoking articles: Fed rate inversion. 10 cities that cost money […]

The post Thursday November 21 2019, Weekly News Digest appeared first on Lending Times.

LexinFintech Vintage Curve

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Pro.Com Partners with SoFi to Make Home Improvements Even Easier (PR Newswire), Rated: AAA

Pro.com, the premier digital platform focused exclusively on building custom homes and major remodels from start to finish, announced a new partnership Tuesday with online personal finance company SoFi, aimed at revolutionizing how homeowners finance and complete their remodels, renovations and upgrades.

BlueVine raises $ 102.5M more for banking services that target small businesses (TechCrunch), Rated: AAA

The startup, which offers financing and other banking services to SMBs, today is announcing that it has raised $102.5 million, a Series F round of equity funding that is coming from a mix of financial and notable strategic investors.

Led by ION Crossover Partners, the round also includes existing investors Lightspeed Venture Partners, Menlo Ventures, 83North, SVB Capital, Nationwide (a major financial services player in the UK), Citi Ventures, Microsoft’s venture fund M12, and private investors; as well as new investors MUFG Innovation Partners Co., Ltd, O.G. Tech (the VC connected to Israeli billionaire and property magnate Eyal Ofer), Vintage Investment Partners, ION Group, Maor Investments and additional private investors.

FT Partners Advises BlueVine on its $ 102,500,000 Series F Financing (FT Partners), Rated: B

FT Partners served as exclusive financial advisor to BlueVine and its board of directors on its $102.5 million Series F financing

The OCC and FDIC Both Propose a Madden Fix (Lend Academy), Rated: AAA

There is finally some real light at the end of the tunnel. In the last two days we have heard from both the OCC and the FDIC on the Madden issue, something they called unfathomable in a joint amicus brief in Colorado a couple of months ago. They have each given notice of their proposal that would clarify the “valid when made” doctrine once and for all.

At the core of the issue is the ambiguity created by the Madden decision. A loan can be valid when it is made but if it is sold or transferred can suddenly become invalid in the Second Circuit states of NY, CT and VT. This has led to reduced consumer lending to these states and also concern that, given no regulatory clarity, this could expand to other states.

Here are links to the OCC and FDIC proposals. There will be a 60-day comment period where interested parties can weigh in.

Big Tech Race to Own Digital Wallet; GS Robo-advisor on Launchpad (PeerIQ), Rated: AAA

Refinance demand increased by 13% from the previous week and was 188% higher than a year ago, when rates were 114 basis points higher.

First-time inversion driven by the long-end…

Source: PeerIQ, Blackstone, St. Louis Federal Reserve

In regulatory news, lawmakers are taking aim at payday loan rates. Congress members plan to introduce federal legislation that would cap interest rates at 36%.

The next move for Facebook would be to offer lending products most likely indirectly (e.g., via POS partnerships or via co-brand products such as Amazon Chase Visa, etc.).

Insurance startup Vouch tacks on growth funding to serve startups (Pitchbook), Rated: A

Just two months ago, the ink was barely dry on a more than $24 million Series A that Sam Hodges raised for his startup Vouch Insurance. Now he is back with an even larger funding, led by Y Combinator‘s Continuity Fund, as the company seeks to join a crop of startups that cater to the needs of other startups.

Fireblocks Is Now Securing The Biggest Crypto Lending Company In The US (PR Newswire), Rated: A

Fireblocks (www.fireblocks.com), an enterprise platform for securing digital assets in transit, announced today, Celsius Network, the largest provider of interest income and digital asset loans in over 150 jurisdictions worldwide is enlisting Fireblocks to help protect over $400 million assets and 53,000 active wallets, securing both retail and institutional divisions.

5 Ways to Invest in Real Estate Online (The Motley Fool), Rated: A

The primary difference between using a crowdfunding site versus flying solo on your investment journey is that your investment is managed by a team of real estate professionals. Of course, that is also the biggest risk as you are completely dependent on the project developer to deliver what they promised.

If you are not an accredited investor but want to be involved in real estate crowdfunding, companies such as Fundrise, stREITwise, and RealtyMogul are a great place to start.

ArborCrowd Investors Receive Strong Returns on the Sale of Quarry Station Apartments (BusinessWire), Rated: A

ArborCrowd (the “Company”), the first crowdfunding platform launched by a real estate institution, announced today that its Quarry Station Apartments investment (“Quarry Station”) has been realized in under two years, providing investors with returns quicker and higher than initial projections. The property’s $49.35 million sale price generated an internal rate of return (IRR) of 20.31%, surpassing the original return target of 16% to 19%.

How Crowdfunding Has Changed the Game for Real Estate Investing (The Motley Fool), Rated: A

Through real estate crowdfunding, the developer can utilize an online platform that enables a large group of people to invest small dollar amounts in the project. If the development company chooses to follow the crowdfunding option, here’s how that could work:

  • First, the developer identifies an online platform that is suited to the company or mixed-use development. Each platform is different and most real estate crowdfunding sites receive significantly more project applications than they select.
  • If the investment passes all the legal, physical, and financial due diligence requirements the platform requires, that platform will then allow the developer to solicit funds using their site.
  • An investor can then use that platform to contribute financially to the development.
  • The funds are then tied up until the investor delivers on the project.

The 10 worst US cities for commutes that cost you time and money (Business Insider), Rated: AAA

Online loan marketplace Lending Tree published a report on the most expensive commutes in the 100 largest cities in the US in October.

Consider a resident in New York, which Lending Tree ranked as the city with the fifth most expensive commute. Using Lending Tree’s findings via 2017 Census Bureau data, the median annual earnings for a full-time employee in New York is $51,573; their hourly wage is $26. Now, consider the mean time of commuting one way, 41.8 minutes. If you make $26 per hour at your job, and you spend 83.6 minutes daily on your round-trip commute, then your time wasted commuting is worth $37 of time you would have been working.

Five cities in California – Oakland, San Jose, Irvine, San Francisco, and Fremont – took top 10 spots in the ranking, with four of those cities being in the increasingly expensive San Francisco Bay Area.

Read the full report here.

Fintech: The Fourth Platform – Part One (Forbes), Rated: A

While the first generation of fintech companies created billions of dollars of value, because of new enablers like Plaid, Cross River Bank, Finix and Wisetack, we’re now moving past that phase to one where fintech moves from being a business model unto itself, to being the fourth layer in the stack or the “fourth platform,” wherein financial functions like payments, lending and insurance join connectivity, intelligence and ubiquity as layers of the stack upon which new companies can be built.

Source: Forbes

Balboa Survey: Small Business Owners Anticipate Robust Black Friday (Monitor Daily), Rated: A

Online lender Balboa Capital released the results of its 2019 Black Friday Survey, which was conducted to examine how small business owners are preparing for this historically busy shopping day, and to find out what their Black Friday sales expectations are.

The survey reveals that 70% of small business owners are preparing for Black Friday early, and 83% anticipate meeting or exceeding their Black Friday sales goals. Balboa Capital’s survey was sent to a sample of small business owners in a wide variety of industries during the first week of November 2019.

American Financial Exchange, LLC (AFX) Announces AMERIBOR on the Blockchain (Mondovisione), Rated: A

American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced today the launch of its AMERIBOR on the blockchain. AFX now mints two ERC-721 non-fungible tokens for each AMERIBOR transaction on the AFX platform (for each counterparty to the transaction).  The pair of tokens is automatically minted when the transaction is repaid by the borrowing counterparty to the lending counterparty. Each token contains encrypted transaction data and encrypted counterparty data. The counterparty data is normalized prior to encryption to further preserve counterparty anonymity.

5 Best Alternatives to Traditional Savings Accounts (Nerdwallet), Rated: B

The pros. Peer-to-peer lending tends to be a win-win: Investors get a higher rate of return on their money than a lot of banking products offer, and borrowers get an interest rate on their loan that’s usually less than bank-offered loans and credit cards.

The cons. Peer-to-peer lending won’t give you quick access to your cash if you need liquidity.

Alchemy Partners with Plaid to Enhance Loan Decisioning and Fraud Detection Capabilities (PRWeb), Rated: B

Alchemy, one of the SaaS fintech lending infrastructure companies, has partnered with Plaid to support businesses in account and asset verification for improved lending decisioning.

United Kingdom

UK peer-to-peer lender Zopa gets banking license as it looks to compete with industry giants (Stock Daily Dish), Rated: AAA

British peer-to-peer lender Zopa has obtained a U.K. banking license, clearing a key hurdle in its bid to launch a digital bank and compete with industry giants.

Business Loans Marketplace Funding Xchange Raises $ 10.4 Million via Round Led By Downing Ventures, Gresham House Ventures (Crowdfund Insider), Rated: A

Funding Xchange (FXE), a company that helps people and organizations find suitable business loans and funding options from its marketplace of more than 45 established lenders, has raised £8 million (appr. $10.4 million) through an investment round.

London-based mobile credit card company Tymit secures £4m in funding (AltFi), Rated: A

Tymit, the London-based mobile-enabled credit card company, has secured £4m in a funding round, which it will use to develop its customer service offering.

Arbuthnot Commercial ABL supports EA-RS Fire Engineering’s acquisition of Circum with £2m facility (Business-Money), Rated: A

Arbuthnot Commercial ABL, the specialist asset based lending arm of Arbuthnot Latham, has completed a £2m asset based lending (ABL) transaction in support of the strategic acquisition of Circum Ltd, a fire protection services specialist, by EA-RS Fire Engineering Ltd. (“EA-RS”). The facility comprises a flexible confidential invoice discounting line and a term loan.

Crowd2Fund’s first EIS-approved funding round goes live (P2P Finance News), Rated: A

CROWD2FUND has launched its first funding round since being granted Enterprise Investment Scheme (EIS) approval from HMRC.

The platform has already raised 19 per cent of its target from current shareholders and has now opened the £1.2m fundraise to private investors.

Buzzy finance startup Starling Bank has lost another senior employee amid an exodus of executives (Business Insider), Rated: A

Starling’s head of banking compliance Rachel Coote has quit to join startup Paybase. Coote is the sixth senior employee to leave the buzzy finance company in 2019.The company’s chief financial officer Tony Ellingham has confirmed he will also depart within the next year.

Trading giant Robinhood makes its UK debut in Revolut challenge (City A.M.), Rated: A

US fintech Robinhood, a commission-free trading startup valued at $7.6bn (£5.9bn), has today arrived in the UK.

Users will be able to invest in more than 3,500 US-denominated stocks, including Apple, Amazon and Tesla. They will also be able to access foreign stocks that are available to trade in dollars through depository receipts, such as Barclays and Burberry.

OakNorth Bank completes GBP3.54m loan to fund aparthotel development in London (Property Funds World), Rated: B

The finance will be used to fund the acquisition of a mixed-use property at 68‐86 Clapham Road in Oval, and in its place, develop an aparthotel with between 120-175 units, subject to receiving planning permission. The site is located within walking distance of several Zone 1 underground stations – Oval, Stockwell and Vauxhall – as well as the South Western railway line, providing services to Clapham, Waterloo, Guildford, etc.

Crypto Lending Platform Nexo Joins FIO, As Usability Remains Top Priority (Chipin), Rated: B

Nexo, the dominant player in the crypto lending space, is joining the Foundation for Wallet Interoperability (FIO), the industry consortia bringing together leading companies in the blockchain ecosystem to solve the biggest problem faced by the industry — usability.

China

LexinFintech: A Rare Quality (Seeking Alpha), Rated: AAA

LexinFintech (LX) reported a solid set of Q3 results with loan origination growing 170% y/y that resulted in a beat on both revenue and EPS. More importantly, loan origination guidance was increased to RMB115-125b vs. the prior forecast of RMB115b.

Source: Seeking Alpha

Overall, asset quality remains stable at the end of Q3 with delinquency rate declining 9bps to 1.4% and the 6-month charge-off rate maintained at just above 2%.

Source: LexinFintech

Institutional funding has reached 75% of the total loan balance. In terms of origination, institutional accounts for 94% of the total loans originated, meaning that LX’s own P2P platform Juzi Licai is becoming less relevant going forward.

Source: LexinFintech
European Union

Twino CEO stands down, as Latvian lender swings into black (AltFi), Rated: AAA

Twino founder Armands Broks is to standing down as CEO and will now focus on new business opportunities and bringing talent on board.

The management change comes as Twino, which offers European investors investment opportunities in unsecured European consumer loans, reports pre-tax profits of €13m  (£11m) for 2018, compared to a €7.2m (£6.2m) loss the year previous.

Twino has also disclosed that it has also issued loans to the value of €1bn (£860m), since it was set up 10 years ago, half of the value of which have been issued in the past three years.

The Best Crowdlending Platforms (The African Exponent), Rated: A

Smart Lenders AM Launches New Investment Fund Specialized in Marketplace Lending (Crowdfund Insider), Rated: A

Smart Lenders AM announces the upcoming launch of a new fund dedicated to financing loans to European SMEs issued through marketplace lending platforms (crowdlending).

Real Estate Crowdfunding Platform EstateGuru Partners with Ober-Haus on Market Research (Crowdfund Insider), Rated: A

Real estate crowdfunding platform EstateGuru and OberHaus, real estate agency operating across the Baltic region, have joined together to produce shared real estate market research and analysis with a specialized focus on the needs of the crowdfunding platform.

International

Profits and Losses of P2P Lending Marketplaces 2017 and 2018 (P2P-Banking), Rated: AAA

Source: P2P-Banking
Australia

What does a competitive mortgage rate look like in November 2019? (finder), Rated: A

The lowest fixed rate in Finder’s database right now is 2.68%, a single basis point lower than the lowest variable. This is unusual (the lowest three year fixed rate this time last year was 3.74%).

Another online lender I spoke to was fine with apartments in the same suburb but didn’t offer pre-approval. This meant I would have to start a full application with them even before I had found a place to buy. For some borrowers, this can be a significant turn-off.

Asia

Ant Financial eyeing S’pore digital bank licence (The Straits Times), Rated: AAA

Billionaire Jack Ma’s Ant Financial Services Group said it may apply for a virtual banking licence in Singapore, a move that would add a heavyweight contender to the race.

OneConnect leads Southeast Asia’s sustainable financing with two smart lending platforms (Yahoo! Finance), Rated: A

OneConnect Financial Technology Co. Ltd. (OneConnect), today announced it is leading Southeast Asia’s sustainable financing with the launch of two smart lending platforms – SeekCap, the Philippines’ first lending platform that helps the underserved micro, small and medium enterprises (MSMEs) manage cashflow and grow their business, as well as a multi-finance platform that will empower millions of unbanked and underbanked Indonesians with easy access to loans to finance their purchase of vehicles essential for their daily transportation so as to improve mobility and their lives.

MSMEs form the backbone of any economy. In the Philippines, more than 99% of all businesses are MSMEs and they contribute to almost 63% of total employment. Yet, at present, only 9% of loans and financing from the country’s major banks go to MSMEs.

Latin America

Brazilian Digital Bank Neon Raises $ 95 Million (Crowdfund Insider), Rated: AAA

Brazilian Digital bank Neon has reportedly raised $95.27 million in a funding round led by Banco Votorantim and the General Atlantic fund. This is according to a write up in Estado.

Neon claims a customer base of 2 million users. The additional funding will help the digital bank grow with expectations to triple that number by 2020.

How Brazil is leading Latin America’s fintech revolution (Business Insider), Rated: A

There were 380 fintechs operating in the country in May 2019, per Finnovista, and around two-thirds (64%) of Brazilian consumers are defined as fintech adopters by EY — a rate that’s level with the global average and higher than the majority of G7 countries’.

  • Smartphone and internet penetration: Three-quarters of Brazilians used smartphones in 2017, which is expected to tick up to 86% by 2025 — and both figures are the highest across the region.
  • High fees charged by incumbentsBrazil’s four largest banks control almost 80% of the country’s deposits, with similar concentrations in credit and assets.
  • A large underserved population: Around 45 million people in the country don’t have access to or have not used a bank account in the past six months.

Why Mexico’s Fintech Sector Will Be One to Watch in 2020 (Next Billion), Rated: A

The economy in Mexico remains largely informal and cash dependent. An estimated 44% of the adult population in Mexico owns no financial products. This largely unbanked population, coupled with the new fintech legislation, has created immense opportunities for Mexico’s fintech sector to grow. In fact, roughly 100 new Mexican fintechs were established in 2018 alone, representing 52% growth for the industry. Mexico has become a regional leader with more than 273 fintech ventures operating in the country. When combined with Brazil’s 380 fintech ventures, the two countries make up 56% of the region’s total fintech activity.

Authors:

George Popescu
Allen Taylor

The post Thursday November 21 2019, Weekly News Digest appeared first on Lending Times.

Thursday September 26 2019, Weekly News Digest

LendingClub eligibility

News Comments Today’s main news: SoFi intros crypto trading. Investors locked out of LendingClub in 4 states. Funding Circle asks US regulators to folow UK’s model. Fundbox raises $176M. Klarna surpasses 12M transactions per year. Today’s main analysis: U.S. subprime auto loan ABS recession scenarios (A MUST-READ). Today’s thought-provoking articles: Recession talk cooling. Consumers with […]

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

LendingClub eligibility

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi Introduces Crypto Trading With SoFi Invest (PR Newswire), Rated: AAA

SoFi announced today that it has added crypto trading to its fast-growing SoFi Invest platform, as a response to demand from its over 800,000 members. SoFi Invest is now the first platform to offer automated and active investing with stocks, ETFs, and crypto through a single app.

SoFi Adds Bitcoin, Litecoin, and Ethereum to Invest Platform (Cheddar), Rated: A

SoFi goes live with crypto trading service for its over 800K users (The Block), Rated: B

SoFi users can initially buy and sell three cryptocurrencies – bitcoin (BTC), ether (ETH) and litecoin (LTC). The Block first reported the story last week, saying that the firm is beta testing the service in partnership with Coinbase.

SoFi CEO on what’s next for the company (Yahoo! Finance), Rated: A

Sofi CEO Anthony Noto joins The First Trade to discuss what’s next for the company.

Watch the video here.

Charlie Lee {LTC} praises SoFi as crypto-investing with Litecoin kicks-off (Our Bitcoin News), Rated: A

Litecoin is ranked at #6 underneath Tether, as well as Bitcoin Cash, in the market. The price jumped up at a rate of 0.60% in the course of the past 24-hours. This led to LTC scaling all the way up to $57.03 where it presently rests. The trading volume recorded stands at roughly $2.957 billion, whereas the supply has 63,337,479 LTC coins included as part of circulation. The total market cap of Litecoin amounts to $3.612 billion which depicts a massive decline compared to the value attained a week back.

SoFi CEO: Start investing in your 20s (Yahoo! Finance), Rated: A

SoFi CEO Anthony Noto discusses how his company’s consumers can now buy and sell Bitcoin, Ethereum and Litecoin.

SoFi Refunds Investors Hit By Capital Gains from Proprietary ETFs (ETF Trends), Rated: A

Financial technology company SoFi is offering refunds to investors hit by capital gains taxes following the change of replacing Vanguard funds with their proprietary ETFs in certain portfolios managed by their robo-adviser.

Some Investors Locked Out of Investing in LendingClub Loans (Lend Academy), Rated: AAA

Over the last 24 hours we’ve received several messages from Lend Academy readers alerting us that they have received information that they are no longer able to invest in LendingClub notes. There is is also an active discussion on the Lend Academy forum.

LendingClub state eligibility as of 9/24/2019. Source: Lend Academy

Funding Circle urges US regulators to follow UK model (P2p Financ News), Rated: AAA

FUNDING Circle’s US division is urging the Securities and Exchange Commission (SEC) to amend its restrictions on peer-to-peer retail investment.

The US financial regulator limits annual investment to five per cent of an investor’s annual income if their yearly income or net worth is under $107,000 (£86,075), rising to 10 per cent if the investor earns more than that.

Two Franchise Trends Aspiring Franchisees Should Look Out For (Forbes), Rated: A

Over the past 14 years, I’ve coached more than 1,500 people who were searching for the best franchise for their situation. I recently read the 2019 Small Business Trends 

Fintech Fundbox raises $ 176M to lend to business using AI (Information Management), Rated: AAA

Fintech Fundbox Inc. has raised $176 million in a new funding round from investors including Allianz SE and General Catalyst. The company planned to announce the funding along with a new $150 million credit facility.

A Fundbox spokesman said the new round valued the company at between $500 million and $1 billion, but would not disclose the exact valuation.

U.S. Subprime Auto Loan ABS: Evaluating Recession Scenarios (DBRS), Rated: AAA

Summary Highlights

  • Under the hypothetical Recession Scenarios, DBRS found that credit enhancement (excluding excess spread) coverage of remaining expected losses, as determined by a multiple calculation, decreased at the inception of the hypothetical recession for all of the Sample Transactions. The senior debt tranches experienced a swift deleveraging whereas some of the subordinated debt tranches could be at risk for a potential downgrade during the hypothetical Recession Scenarios.
  • After the initial decline in the multiple calculations at inception of the hypothetical Recession Scenarios, the deleveraging nature of the sequential pay structures of the transactions resulted in the calculated multiples for the analyzed debt tranches to move into the multiple range corresponding to the original rating of the debt tranche over varying lengths of time. The multiples for some of the debt tranches originally rated BB were weaker and moved into the BB range at a slower pace. As a result, those tranches would be more likely to be considered for a potential downgrade as compared to the more senior debt tranches where the structures delevered more quickly and the multiples reached the range corresponding to the original rating over a generally shorter period.
  • Over the life of the Sample Transactions, the credit enhancement multiples for all of the debt tranches analyzed, some on a delayed basis, ultimately moved into the AAA rating multiple range.
  • In each of the Recession Scenarios, the structure of each of the transactions provided sufficient credit enhancement for timely payment of interest and ultimate payment of principal of all debt tranches.
Source: DBRS

Read the full report here.

A Cooling in Recession Talk, Heat Up in Housing (PeerIQ), Rated: AAA

Lower rates, improved credit scores, and tighter housing inventory are improving the outlook for housing. Housing market achieved an 18-month high in housing starts and a record high in FICO scores.

The Citigroup Economic Surprise Index – a measure of actuals vs economist’s expectations – has also registered readings above the neutral baseline suggesting slowdown fears may be exaggerated.

Source: PeerIQ, CitiGroup

Consumers with Significant Liquidity Needs Often Access Alternative and Traditional Credit Markets Concurrently (GlobeNewswire), Rated: AAA

Many lenders believe that consumers who turn to the alternative credit market for liquidity do so because they have no other options. However, a TransUnion study presented today at the Lend360 conference found that these borrowers are frequently applying for and receiving traditional credit at the same time. While traditional subprime installment lenders and alternative lenders are competing over the same consumers, the study finds that the liquidity need is often not fully met in either market.

Source: TransUnion

Risk Levels Higher for Traditional and Alternative Loan Borrowers

Controlling for risk score, 8.5% of the alternative credit-active consumers had a serious delinquency in the first 12 months, vs. just over 2% for the control group. Bankcard performance was also worse. While these borrowers exhibited a preference for unsecured personal loans under $1,500 within 12 months of the alternative credit origination, they also originated auto and bankcard credit during that time.

Read the full report here.

Lendio to Double Sales Force, Expand Loan Product Offerings (Benzinga), Rated: A

Lendio today announced plans to double the sales force at its Lehi, Utah, and Woodbury, New York, offices. The company has hired 80 employees in 2019, and intends to add another 40 sales representatives by the end of the year, with plans to bring on another 40 in the first quarter of 2020. In addition to the expanding workforce, Lendio plans to bolster its selection of loan products for small businesses, with a 10% increase in the number of product offerings in the coming year.

Fintech lenders taking more market share from banks, survey finds (American Banker), Rated: A

Fintechs are continuing to siphon away customers for unsecured personal loans from traditional lenders, according to a study released Wednesday by Experian.

The study found that digital lenders more than doubled their market share in the past four years, with consumers across the credit spectrum increasingly turning to fintechs like Lending Club and Social Finance.

Fintechs now provide 49.4% of unsecured personal loans as of March compared to 22.4% in 2015, according to Experian.

Fintech Lenders Could Hold the Keys to Recession Recovery (Salon), Rated: A

Born out of the last recession, young fintech lenders have not yet been tested by a significant economic storm, and many in the industry are wrapped up in a dialogue of speculation about the industry’s ability to ride out an impending recession. It’s time to turn the conversation instead to focus on how fintech lenders can position themselves to play a critical role in recovery from the next downturn, whenever it may happen.

WeWork should ask SoFi CEO for advice on how to save the company (Yahoo! Finance), Rated: A

The two new guys running the slowly sinking ship known as once hot tech startup WeWork should give SoFi CEO Anthony Noto a holla on his Apple iPhone. Trust me, Noto has some good, timely advice for Artie Minson and Sebastian Gunningham.

Because the former Goldman Sachs banker and Twitter chief financial officer, now SoFi chief clearly gets how to rebuild a promising tech startup after a high-profile challenge or two. And then possibly, take it down the path of a successful initial public offering.

Generation Z’ers want more financial education – and innovative tools to help them learn (PR Newswire), Rated: A

As high school students return to school, they may see the benefits of new state laws across the country that require curriculums to offer a class about personal finance. This is great news for young adults as 76% of recent high school graduates agree it should be required, according to a national survey by Experian.

Many Gen Z’ers surveyed say innovative tools are the way to go when it comes to learning about credit (45%) and almost half (48%) would prefer to use tech-driven tools versus textbooks to learn more.

Survey respondents also say they are currently learning about finances mostly through their friends (28%), YouTube (27%) and some form of social media (24%).

D.C. Court Dismisses Challenge to OCC’s Fintech Charter (Manatt), Rated: A

In the latest battle over the Office of the Comptroller of the Currency’s (OCC’s) plan to issue special purpose national bank (SPNB) charters, a D.C. federal judge has for a second time dismissed a lawsuit brought by the Conference of State Bank Supervisors (CSBS).

The decision creates the potential for circuit split, as a New York federal court reached the opposite conclusion in a nearly identical action filed by the state’s Department of Financial Services (DFS).

9 Ways To Build an Empire Without Lifting a Finger (Yahoo! Finance), Rated: A

Another way to build your real estate empire is through real estate crowdfunding. As with investing in a REIT, real estate crowdfunding allows you to pool your money with other investors to invest in real estate. This could include multifamily units, commercial properties and bundles of single-family homes.

According to U.S. News & World Report, the top real estate crowdfunding platforms are ArborCrowd, RealCrowd, Groundfloor, CrowdStreet, PeerStreet, Small Change and RealtyMogul.

If you can afford the minimum investment — which is usually $25,000 — you can make big returns. Groundfloor boasts 10% returns for individual investors and CrowdStreet’s is even higher with 25.5% total average annual returns across all fully realized deals.

RealCrowd offers a breakdown of average annual income on a $1 million investment based on the property type: $78,000 for a suburban office, $72,000 for a retail space, $59,000 for a downtown office and $58,000 for a multifamily unit.

The Best And Worst MA Towns For Young Families (Patch), Rated: A

The online mortgage broker Lending Tree has tried to take some of the guess work out of that decision by ranking every community in Massachusetts with 5,000 or more residents based on their appeal to families with school-age children.

Hingham, under Lending Tree’s methodology, received a score of 72.5. Last-place Webster’s score was 31.9. Other towns in the top 10 included Winchester, Needham, Milton, Longmeadow, Wellesley, Cochituate, Pinehurst, Lexington and Nantucket.

JPMorgan donates $ 25M to get fintech in hands of underbanked (American Banker), Rated: A

JPMorgan Chase announced Tuesday a $25 million commitment to the Financial Health Network’s Financial Solutions Lab, a program meant to focus on the creation of fintech tools to help consumers better manage their finances.

The Financial Health Network (formerly The Center for Financial Services Innovation) previously received a $30 million philanthropic donation from the bank that spanned the last five years.

Bitcoin and Ethereum dive deep, is Bakkt to blame? (Mashable), Rated: A

“The disappointing BAKKT opening signals to the crypto community that institutions are less ready to invest in BTC at scale than was supposed, which means the price was probably too high and due for a correction. What we’ve just seen is short sellers and momentum traders piling on to make things worse, and now here we are back at support,” Alex Mashinsky, CEO at crypto lending and depository company Celsius Network, told Mashable in an emailed statement.

STRATA Trust Company Reaches $ 2 Billion AUC Milestone (PR Newswire), Rated: A

STRATA Trust Company (“STRATA”), a custodian dedicated to the complexity of holding alternative investments in tax-advantaged, self-directed retirement accounts, announced today that the firm has surpassed $2 billion in assets under custody. STRATA offers access to a range of asset classes that include private equity, private debt, real estate, crowdfunding, structured settlements and more. Since 2008, STRATA has been committed to empowering investors and the investment community with wider diversification and alternative asset custody solutions in retirement portfolios by delivering industry-leading service, education and support.

Online Pawn Lending Goes Back Offline (Business Wire), Rated: A

Prominent online lender Borro Private Finance unexpectedly ceased its collateral-based lending program this summer after nearly ten years of business. The UK-US-based establishment specialized in online pawn loans against valuable assets, including fine art, jewelry, and watches. Borro’s discontinuation of its operations comes nearly two years after the company’s withdrawal from the bridge loan market in July 2017.

Eleventh Circuit Tosses Online Lender’s Forum Selection, Class Waiver Clauses (Lexology), Rated: A

Siding with six consumers who filed suit asserting violations of state usury laws against online lenders, the U.S. Court of Appeals for the Eleventh…

Marqeta Hires Vidya Peters As First Chief Marketing Officer, as Company Continues to Build Out Expansive Global Vision (Business Wire), Rated: B

Marqeta, the first global modern card issuing platform, today announced the addition of Chief Marketing Officer Vidya Peters to its executive team.

White Oak Commercial Finance Acquires Veritas Financial Partners’ Asset-Based Loan Portfolio (ABL Advisor), Rated: A

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today it has purchased a portfolio of asset-based loans from Veritas Financial Partners, a Boca Raton, FL based specialty finance company.

Alchemy Technology And Equifax Partner To Drive FinTech Innovation (PR Newswire), Rated: B

Alchemy Technology Inc. and  Equifax Inc. (NYSE: EFX) today announced a new partnership to drive FinTech innovation. The relationship is designed to help banks, specialty financing firms and FinTech startups accelerate their time to market with easily deployable white labeled lending solutions. The two companies will make the “tech” in FinTech available to organizations of all sizes with a powerful combination of the Alchemy Lending Operating System and Equifax data analytics, credit, identity and income verification solutions.

Ex-Goldman Sachs Managing Director Joins Lendingblock as Strategic Advisor (Lendingblock), Rated: B

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the appointment of John Macpherson as a strategic advisor.

CoreLogic Credco Integrates its Three-Bureau PreQual Solution with eLEND Solutions (CoreLogic), Rated: B

CoreLogic, a global provider of property information, insight, analytics and data-enabled solutions, today announced that CoreLogic Credco integrated its Three-Bureau PreQual credit report and score solution on eLEND Solutions, an automotive technology company specializing in online and in-store credit and finance solutions. The integration of the prequalification solution gives CoreLogic Credco customers who use eLEND instant, single-source access to a consumer’s credit report and FICO score from all three national credit bureaus – Experian, TransUnion or Equifax.

Tavant Named to 2019 IDC FinTech Rankings (Business Wire), Rated: B

Tavant, a Silicon Valley-based provider of AI-powered digital lending technologies, announced today it has been named to the 2019 IDC FinTech Rankings, the most comprehensive vendor ranking within the financial services industry.

United Kingdom

Klarna Surpasses 12M Transactions This Year (PYMNTS), Rated: AAA

FinTech payments disruptor Klarna has announced the start of its “No drama, just Klarna” retail campaign in partnership with 13 brands in the U.K., the company said in a press release on Wednesday (Sept. 25).

Klarna offers “pay later” payment options and attracts 50,000 new users each week. The startup said that in the past year, it has processed 12 million transactions. In August, more than 100,000 U.K. shoppers downloaded the Klarna app.

Klarna reports surge in payments, merchant growth during first half of 2019 (Mobile Payments Today), Rated: A

Klarna, a London based installment financing provider and challenger bank, said it surpassed 3 million active users in the U.K. and 170,000 retail merchants worldwide.

Brits hit financial maturity at 31 (P2P Finance News), Rated: A

THE age at which UK men and women finally feel secure in their finances is 31, according to Zopa.

The survey showed a clear split between age groups, with 21 to 25 year-olds believing 32 would be the age when they finally felt good about their finances, while those age 26 to 30 were less optimistic about the future, saying they would reach money maturity at 38.

OakNorth Bank completes £20m loan to specialist lending fund (London Loves Property), Rated: A

OakNorth Bank, the UK bank powered by OakNorth, has provided a £20m loan to the RAW Mortgage Fund, a specialist fund providing buy-to-let property loans against residential real estate in the UK.

Wonga borrowers have less than a week to submit payday loan reclaims (The Sun), Rated: A

Anyone who believes they have been mis-sold a Wonga loan is allowed to apply for compensation, but its administrators set a deadline of 11.59pm on September 30.

If you miss the deadline, you won’t be able to apply anymore and you won’t get any compensation for mis-selling.

Nexo Now Accepts Tokenized Gold for Instant Credit Lines and Will Offer Interest-Bearing Accounts on Gold (Covington Journal), Rated: A

Nexo is adding the NYDFS-regulated PAX Gold as a collateral option for its signature , bringing gold-backed lending to the blockchain.

With PAX Gold, now offers gold investors instant access to their gold wealth in over 45 fiat currencies via same/next day transfers and across 200+ jurisdictions.

European Union

Kreditech Eyes Expansion After Securing EUR 20 Million in Equity Financing (Yahoo! Finance), Rated: AAA

Kreditech is ready to scale globally in the near-prime customer segment – declares David Chan, Kreditech CEO. The Germany-based online direct lender and Point-of-Sale (POS) financing provider estimates its global target market at ca. EUR 300 bn in consumer credit issuance. It aims to reach EUR 1 bn in revenue by 2025, which will be driven by growth in existing markets where Kreditech is present, as well as expansion into new geographies. Kreditech currently operates in IndiaPolandRussia and Spain, and serves over one million customers. The company has raised EUR 20 million in its latest equity financing round.

You’ve heard of challenger banks, now meet the challenger lenders (sifted), Rated: AAA

For better or worse, it was Wonga that first put “challenger lenders” on the map. The UK payday lender’s meteoric rise saw it become a household name before its collapse last year after a string of irresponsible, inflated loans.

This month alone, large funding rounds were announced by Sweden’s Capcito and Lendify, as well as by UK’s Sonovate, an invoice lender for SMEs with over 750 active clients. Banks are also watching closely, with Goldman Sach’s equity arm being a notable funder in Lendable, recently ranked the UK’s sixth fastest-growing private tech company.

In the UK, the challenger-lender industry grew to £6.1 billion in 2017, according to a study by the Cambridge Centre for Alternative Finance (CCAF). The CCAF also estimated that 29% of all new loans issued to SMEs came from challenger lenders in 2017. PwC predicts that figure will rise to nearly 40% in the next decade.

Source: Financial Times
International

Marketplace Lenders Navigate The Choppy Waters Of Compliance (PYMNTS), Rated: AAA

Regulators the world over are beginning to take a closer look at the alternative and marketplace lending business model.

In June, the U.K.’s Financial Conduct Authority announced plans to impose stricter restrictions on marketplace and peer-to-peer (P2P) lenders beginning this December following the watchdog’s decision to place P2P lending platform Lendy into administration — a result, the FCA said, of the industry’s lenient requirements to disclose governance arrangements and controls.

Also, in China, analysts at Yingcan Group pointed to the government’s P2P and marketplace lending crackdown as being likely to shrink the industry by as much as 70 percent this year.

This Fintech Safari Could Be a Wild Ride (The Washington Post), Rated: AAA

From ATMs to credit cards and PayPal, the West’s dominance of innovation in consumer finance appears to have exhausted itself.

At the top of the emergent new order is the fintech duo from China — Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Next in line are Alphabet Inc. and Walmart Inc., whose highly localized smartphone payment rivalry is playing out between Google Pay and PhonePe in India. In Southeast Asia, two homegrown ride-hailing giants are aspiring to dominate commerce.

The rise of African mobile money is associated with M-Pesa, Kenya’s digital-wallet revolution. Now traditional lenders like Standard Chartered Plc, with a presence on the continent going back more than a century, are discovering that online banking can help them mobilize low-cost current and savings accounts more profitably than acquiring customers via physical branches.

Australia/New Zealand

Harmoney says the P2P lender has been ‘slowly moving to lending our own money’ since 2015 (interest), Rated: AAA

The founder of Harmoney, New Zealand’s biggest licensed peer-to-peer (P2P) lender, says he can’t see a viable P2P lending model in New Zealand which is why Harmoney has started lending its own money.

Neil Roberts and David Stevens of Harmoney (Lend Academy), Rated: A

Harmoney, the first peer to peer lender to be licensed in New Zealand, has originated more than NZ$1 billion in loans since launching five years ago.


Read the PDF transcript here.

India

Kreditech targets India after EUR20m funding boost (Finextra), Rated: AAA

Kreditech, a German-based online lender and POS financing provider focused on “near prime” borrowers, is looking to the Indian market after raising EUR20 million in funding.

The round was co-led by Runa Capital and unnamed German private investors, with participation from existing shareholders HPE Growth and Amadeus Capital Partners.
Southeast Asia

Accumulated P2P lending exceeds W6tr (The Investor), Rated: AAA

Accumulated peer-to-peer loans in South Korea have surpassed 6 trillion won ($5 billion), data showed on Sept. 26.

Outstanding P2P loans extended by 220 companies stood at 6.2 trillion won in June, compared with 4.7 trillion won at the end of last year, according to the data compiled by the Financial Supervisory Service.

Indonesia’s Investree in talks to raise series C funding for regional expansion (Tech in Asia), Rated: A

Indonesia’s fintech peer-to-peer lending startup PT Investree Radhika Jaya is in talks with several investors to raise a series C funding as the firm looks to boost its expansion in Southeast Asia.

The Securities Commission Malaysia Approves EdgeProp as First Property Crowdfunding Platform in Malaysia (Crowdfund Insider), Rated: A

The Securities Commission Malaysia (SC) has registered EdgeProp Sdn Bhd as the first “Recognised Market Operator” to establish and operate a property crowdfunding platform in Malaysia. EdgeProp was granted an approval in principle in September 2019.

FINTECH COMPANIES FACE TALENT SHORTAGE (StaffingIndustry.com), Rated: A

The majority, or 94%, of fintech companies in Singapore, say the country requires fintech talent, according to survey data from Michael Page Singapore.

The number of Singapore consumers adopting fintech products and services has drastically risen in the last two years, tripling from 23% in 2017 to 67% in 2019, according to Michael Page.

Bitcoin Daily (PYMNTS), Rated: B

And Singapore-based exchange Bitrue has announced the launch of a low-interest crypto lending platform, which goes live on September 30.

MENA

Qatar Boosts FinTech Focus (PYMNTS), Rated: A

As reported by Crowdfund Insider, the Qatar Financial Centre (QFC) has expanded the number FinTech-related activities that will be awarded licenses. The additional support will come from the QFC platform.

The seven firms include DecisionLogic, which focuses on advanced bank verification that lets lenders qualify borrowers.

Africa

Proven ways you can make money in real estate (Daily Monitor), Rated: A

You can utilise a variety of methods that includes any of the following:
•Seller financing through lease options
•Trading fixed assets such as cars, jewellery and more
•Taking over someone else’s mortgage payments who might be in a distressed situation
•Bringing in an investment partner with cash
•Borrowing from a bank or getting a hard money loan
•Taking out a home equity line of credit
•Utilising a peer-to-peer lending network

Caribbean

Victoria Mutual acquires shares in Barbados-based FinTech Carilend (Jamaica Observer), Rated: AAA

Victoria Mutual Investment Limited (VMIL) has acquired a 30 per cent stake in Carilend, a Barbados-based financial technologies (FinTech) company, that is said to have revolutionised borrowing and lending in the Caribbean.

Authors:

George Popescu
Allen Taylor

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

Thursday July 25 2019, Weekly News Digest

marketplace lending

News Comments Today’s main news: Equifax to pay up to $700M in data breach settlement. MoneyLion raises $160M. Monzo, Starling win top rankings among banking apps. Harmoney makes maiden profit. Today’s main analysis: Peter Renton’s quarterly MPL results – Q1 2019 (A MUST-READ). Today’s thought-provoking articles: Metro areas with the biggest jump in private million-dollar […]

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

marketplace lending

News Comments

United States

United Kingdom

Internationnal

European Union

Other

News Summary

United States

Equifax will pay up to $ 700 million to settle data breach lawsuits (CBS News), Rated: AAA

Equifax will pay up to $700 million to settle with the Federal Trade Commission and others over the massive 2017 data breach that exposed the private data of nearly 150 million people. Consumers are eligible to claim as much as $20,000 in cash payments, the FTC said.

The proposed settlement with the Consumer Financial Protection Bureau, if approved by the federal district court Northern District of Georgia, will provide up to $425 million in monetary relief to consumers, a $100 million civil money penalty, and other relief.

MoneyLion Announces $ 160M in Funding  (Finanzen), Rated: AAA

MoneyLion today announced $160 million in funding — $60 million in previously unannounced financing and a $100 million Series C funding round.

The round was co-led by Edison Partners and Greenspring Associates and included strategic investment from Capital One, a diversified bank that offers a broad array of financial products and services to over 45 million consumers. The round also included investment from MetaBank and FinTech Collective. Upon completion of the Series C round, the company will have raised over $200 million in equity financing.

OnDeck Taps Bank Veteran to Lead ODX Sales and Strategy (OnDeck), Rated: A

OnDeck today announced the appointment of Lonnie Hayes as the Head of Sales and Strategy for ODX, a wholly owned subsidiary of OnDeck that assists banks with streamlining and digitizing small business credit origination.

My Quarterly Marketplace Lending Results – Q1 2019 (Lend Academy), Rated: AAA

My overall returns for the twelve months ending March 31, 2019 was 6.09%. This is up from 5.35% that I reported in Q4 and 4.77% in Q3. My original six LendingClub and Prosper accounts had another full percentage point jump. Last quarter I reported the returns on those six accounts had jumped from 3.19% in Q3 to 4.16% in Q4. We see this quarter they are at 5.18%. This is quite a remarkable turnaround and while I still think 5% is not a high enough return for unsecured consumer lending, it is certainly moving in the right direction.

Source: Lend Academy

Metros With the Biggest Jump in Private Million-Dollar Businesses (LendingTree), Rated: AAA

  • Austin, Texas topped the list with a 15.1% increase in privately held companies surpassing $1 million in revenue between 2014 and 2016. The number of Austin firms in that category rose by 1,857.
  • Jacksonville, Fla. and Riverside, Calif. came in a nose behind, with an increase just under 15%. The number of firms rose by 963 and 2,359, respectively.
  • Buffalo, N.Y. was the only metro on our list to lose businesses with seven figure revenues: The city in upstate New York was down by four such firms, a reduction of 0.1%.
  • Baltimore and Oklahoma City made the smallest gains, at just over 1%, or 187 and 117 businesses, respectively.
  • Los Angeles had the largest number of firms to pass the million-dollar mark – 6,664 – followed closely by New York at 6,568. Those large numbers represent increases of almost 8% and 5.2%, respectively, leaving them in the 16th and 29th spots on the list.

Lendio Marries SMB Loan Management With Accounting (PYMNTS), Rated: A

Small business loan marketplace Lendio has announced the acquisition of bookkeeping software provider Billy.

press release Tuesday (July 23) said Lendio is rebranding Billy to Sunrise, a small business bookkeeping solution that integrates accounting, cash flow management, loan management and credit data into a single solution.

How AI can advance the cause of fair lending (American Banker), Rated: A

The rightful prohibition of ZIP codes in underwriting is one example of how financial regulators ensure fairness by protecting against discriminatory lending. But the increasing reliance on artificial intelligence and machine learning, or “automated insights” as I prefer to call it, has made testing a wide variety of inputs for specific outcomes a sophisticated, scientific process carried out by companies. Lawmakers should consider these varied new data options when they evaluate machine learning during a hearing later this week.

Aura Closes $ 28.7 Million Expansion Loan from Angel Island Capital (Business Wire), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, today announced it has closed $28.7 million in residual debt financing from Angel Island Capital (“AIC”) to help the company grow and keep pace with the demand for its loans.

Drip Capital raises $ 25 mn from Accel, Sequoia (IBS Intelligence), Rated:
A

Drip Capital, a technology-enabled cross border trade financier, has raised $25 million in Series B funding from investors led by Accel Partners. Existing investors Sequoia Capital, Wing VC and Y Combinator also participated in the round.

More options to save on student loans at Credible (Credible), Rated: A

With Ascent and MEFA on board, Credible’s student loan marketplace now provides access to eight lenders, including traditional banks, online lenders, and state student loan authorities.

This is how fintech solutions are speeding up mortgage closing times (Housingwire), Rated: A

Financial technology is transforming the mortgage industry by making the origination process more convenient and secure for borrowers.

In 2018, BOK began leveraging Roostify’s digital platform to provide its customers a secure way to upload, send and receive loan documents remotely.

Financial services newcomer Cross River blurs line between fintech, banking (ROI), Rated: A

Few would expect it was a good idea to start a bank right as the recession raged a decade ago.

Fewer still would say any bankers eager to do that, as Cross River Bank did, would go on to become one of the state’s most impressive growth stories.

Fitch Ratings: Questions Increase Around Fringe Players in U.S. ABS (ABL Advisor), Rated: A

While U.S. core ABS performance remains strong due largely to low unemployment, many investors are zeroing in their questions on some of the sector’s non-core assets, according to Fitch Ratings in its 2019 Virtual Investor Video Series for structured finance.

Should fintechs be regulated like banks? (BAI.org), Rated: A

According to the U.S. Treasury report, more than 3,330 new technology-based financial services industry were founded from 2010 to the third quarter of 2017, creating industry investment worth more than $22 billion: a thirteen-fold increase since 2010. Lending by these firms now makes up more than 36 percent of all U.S. personal loans, up from less than 1 percent in 2010.

Examples of Financial Services Business Ideas (Entrepreneur), Rated: A

If you’re financially savvy, you can start your own peer-to-peer lending business. This is when you give small amounts of money to a business or private person, while collecting interest on the returns. Before you start lending out money, here is a successful business you can learn some strategies from:

Business Name: RainFin

Website: 

Established date: 2012

About the business:

RainFin offers an online marketplace that enables borrowers to access affordable debt capital and investors to access new asset classes. RainFin is a registered credit provider and aims to remove traditional costs and barriers for borrowers and investors through innovative technology, designed to create a transparent and fair marketplace.

NASAA Warning on Initial Loan Procurements: “Crowdfunding Meets Blockchain” (Crowdfund Insider), Rated: A

NASAA describes initial loan procurements as a crowdfunding method that allows borrowers and creditors to enter into loan agreements through legally binding smart contracts stored on the blockchain.

To quote NASAA:

“Companies using blockchain technology need to raise capital just like any other company. One way these companies accomplish that is through initial coin offerings (ICOs), which require the new company to create tokens that can be sold to investors and used for the development of new projects. An alternative fundraising method is catching the interest of investors. Initial loan procurements allow companies to raise capital without the added burden of creating tokens.”

Examples of Online Business Ideas (Entrepreneur), Rated: A

Online real estate investing platforms now exist, and they enable anyone to invest a percentage into a property instead of the whole amount. If you have the right skills, you can start your own online business.

Before you launch your business, learn a few strategies from this example of an online business:

Business Name: Real Estate Crowdfunding

Website: 

About the business:

Real Estate Crowdfunding offers its clients lower fees, the option to invest in a development nearby and transparency, which enables their customers to find out more about projects before investing.

Mynd Property Management Acquires HomeUnion, a Real Estate Investing Portal (Yahoo! Finance), Rated: B

Mynd Property Management, a modern property management company powered by on-the-ground experts and technology, has acquired HomeUnion, a company that enables investing in small residential properties in 20 U.S. markets. The acquisition comes on the heels of Mynd’s recent merger with RentVest, which doubled Mynd’s property management footprint to more than 8,000 small residential rental units in a total of 16 markets.

Pennsylvania Attorney General Josh Shapiro announced a settlement with Think Finance, a payday lender that has targeted nearly 80,000 Pennsylvanians.
United Kingdom

Monzo and Starling took first and second place in a ranking of banking apps (Business Insider), Rated: AAA

UK-based Monzo has taken the top spot in a ranking of bank apps by MoneySavingExpert.com, beating out both peers and incumbents, The Irish News reports. Seventy-eight percent of the consumers surveyed said the neobank’s app had plenty of features and strong usability.

Competing neobank Starling picked up second place, with 70% of consumers approving of its app’s features and usability. The rest of the top five was rounded out by Barclays (57%), Lloyds Bank (49%), and NatWest (47%).

Source: Business Insider

Lord Myners heaps further pressure on FCA over Lendy failings (P2P Finance News), Rated: A

FORMER City minister Lord Myners is keeping the pressure on the Financial Conduct Authority over its decision to authorise now-collapsed peer-to-peer lending platform Lendy.

A series of written parliamentary questions show Lord Myners is seeking answers on whether better regulation is needed and the creditor status of Lendy investors.

Lessons from Lendy (Brismo), Rated: A

– History of troubled lender shows the importance of independent verification of credit performance
– This is not a function the regulator can reasonably be expected to undertake
– Marketplace lending will fail to access deep pools of funding until these lessons are learned

Innovate Finance expands national network with three regions added (ComputerWeekly), Rated: A

Last week Innovate Finance announced the addition of Fintech Northern Ireland, Fintech Wales and Fintech West to the national network.

Growth Street pledges £75m overdraft funding for East Anglia (P2P Finance News), Rated: A

GROWTH Street has pledged to commit £75m of overdraft-style financing to small- and medium-sized enterprises (SMEs) in East Anglia.

The peer-to-peer business lender, which provides a revolving credit facility for borrowers, said it is already 10 per cent towards its target having lent £7.5m in the region.

Is Short-Term Financing Right For Your Business? (Nav), Rated: A

If you need a short-term capital boost, there are a number of options available to you. Here are a few short-term financing examples that you may want to consider.

Superdry collaborating with Klarna (Fibre2Fashion), Rated: B

British contemporary fashion brand Superdry and leading payments provider Klarna have entered into a collaboration, enabled by Adyen. Superdry customers can now use the Pay later or Pay in 3 in the UK, and later this month will be able to Pay in 4 in the US. This will make everything from jackets to jeans more accessible to Superdry customers globally.

OakNorth completes £11.4m loan to Ocea for major new residential development in Redhill, Surrey (Fintech Finance), Rated: B

LendInvest boosts business development team with new hires (P2P Finance News), Rated: B

Nigel Robbins has joined LendInvest from specialist mortgage lender Magellan to source deals across the South West of England.

European Union

In-house marketing at Klarna: Interview with Elin Svahn (BannerFlow), Rated: AAA

In-house marketing is transforming the industry. It is a movement rising in popularity year on year, with over 91% of European decision-makers moving operations in-house.

How do you structure your in-house marketing at Klarna?

When I started, Klarna was in the process of a complete restructuring of their in-house operations. The brand was divided into many separate domains, with different teams having different priorities, and ‘issues’ to solve.

Today, we have four marketing domains: Branding, Merchant Aquisition and Growth, Communications and PR, Consumer Growth and Loyalty. Within each of these domains, we have different competencies. So for example, within the Branding domain, we have a mix of marketers, designers, and copywriters.

AdviceRobo has launched an open banking capability for lenders (Business Insider), Rated: A

AdviceRobo focuses on offering credit risk management solutions, and its latest API product enables lenders to categorize transactional data and predict defaults to make sound credit decisions.

The Netherlands-based fintech’s new API, dubbed CatRobo, is powered by PSD2 — a regulation that came into effect in January 2018 forcing banks to open up their data to third-parties.

Here’s what it means: The API will help lenders make better use of their data, better compete with alt lenders, and lend out more cash to underserved consumers.

Source: Business Insider
International

Justin Sun denied reports that he had postponed a charity lunch with the investing guru after attracting regulatory scrutiny. In China, where executives sometimes vanish, such reports are not unusual.

Embedded finance, or why fintech mega VC rounds have become so common (TechCrunch), Rated: A

This morning, it was personalized banking app MoneyLion,  which raised $100 million at a near unicorn valuation. Last week, it was N26, which raised another $170 million on top of its $300 million round earlier this yearBrex raised another $100 million last month on top of its $125 million Series C from late last year. Meanwhile, companies like payments platform Stripesavings and investment platform Raisintraveler lender Uplift, mortgage backers Blend and Better, and savings depositor Acorns have also raised massive new rounds this year.

Cryptocurrency loan site YouHodler exposed unencrypted user credit cards and transactions (TechCrunch), Rated: A

A cryptocurrency loan startup exposed reams of customer credit cards and user transactions for almost a month — because it forgot to protect the server with a password.

Security researchers Noam Rotem and Ran Locar found the database belonging to YouHodler, a lending platform designed for cryptocurrency, which claims to have processed $10 million in loans to more than 3,500 customers.

The database contained 86 million lines of daily updating records of the lending platform, containing streams of logs and computer commands based on users’ interactions on the front-end website. That also included sensitive information such as every time a transaction or a loan went through.

Source: TechCrunch

Crypto Lending Market ‘Continues to Experience Sustained Growth’ (CryptoGlobe), Rated: A

In the Q2 2019 edition of its quarterly ‘Digital Asset Lending Snapshot’ report, Genesis Capital made several interesting observations:

  • At the end of Q2 2019, the total value of “active loans outstanding” was $452 million versus $181 million in Q1 2019, i.e. a quarter-over-quarter (QoQ) increase of 149%.
  • Originations went up 48% QoQ, which means that Genesis Capital has just experienced its fifth straight quarter of “strong growth.”
  • Genesis Capital has originated over $2.3 billion in “loans and borrows” since the business was launched in March 2018.
Source: CryptoGlobe

What Is DeFi? (Bitcoin Market Journal), Rated: A

DeFi platforms leverage smart contract technology to provide decentralized financial solutions, such as digital currency-based peer-to-peer lending, dollar-pegged stablecoins, or investable tokenized asset baskets. The existing DeFi market is still at an early stage so we can expect more decentralized financial services that operate on a permissionless, transparent, and efficient manner on the blockchain to materialize soon.

Decentralised Finance in a centralised world (Business Times), Rated: A

THE growth of global financial markets has created enormous wealth, especially benefitting a few players who are closely connected to the world’s main financial centres.

The centralised nature of the industry has enabled these powerful intermediaries to position themselves in the middle of the system and thus extract rents from other participants.

This oligopolistic structure has stifled competition and decreased efficiency, while increasing the cost of financial services.

Time for a rethink? (Securities Lending Times), Rated: A

David Lewis of FIS discusses the dip in the securities finance industry’s global revenues and explains the factors changing the dynamics of the industry

Finacity Facilitates the Addition of UK Entities to USD $ 115 Million Receivables Securitization (Virtual Strategy Magazine), Rated: A

Finacity Corporation (“Finacity”), a member of the Greensill family of companies, and DZ Bank AG Deutsche Zentral-Genossenschaftsbank (“DZ Bank”) announces the addition of Volt Information Sciences, Inc. (“Volt”) United Kingdom subsidiaries as sellers of receivables to Volt’s existing trade receivables securitization. The 2-year facility supported by Volt’s US and UK receivables allows for up to USD $115 million in funding with a $35 million sublimit for letters of credit.

Australia

Harmoney makes maiden profit (MSN), Rated: AAA

The company, which is partly owned by Heartland Bank (17 percent share) and Trade Me (15 percent), made a net profit of $7.2 million in the year ended in March, compared with a loss of $1.8m the year earlier.

Its revenue was up 25 percent to $32.9m, with net interest income of $728,000 – nearly 10 times more than the year before.

Why bank hybrids are far too expensive (Cuffelinks), Rated: AAA

Yield chasing has spilled into nearly every asset class, with Australian listed bank hybrids no exception. The current average margin of bank bills at +2.40% is close to the lowest level for at least seven years.

Source: Cuffelinks

Alternatives to bank hybrids

2. Marketplace lending

Institutional and retail investors can both access marketplace lending (also known as peer-to-peer lending) via a growing number of online platforms. There’s a mixture of residential and commercial property secured loans available, as well as unsecured business and personal loans. For more conservative investors, loans backed by residential property with an LVR of 60% or less typically yield 5-7%. Commercial property loans, business loans and personal loans usually come with higher yields. Investors in riskier loans should be expecting to lose a portion of their total return when some of the borrowers default and should set their return expectations accordingly.

India

India’s FinTech Cube Wealth expands asset management biz in UK, Hong Kong (IBS Intelligence), Rated: AAA

Cube Wealth, an Indian FinTech start-up for financial planning and wealth management, is entering the global markets in this quarter (July-September) of 2019. The plan is to set up a tech-enabled asset management company in the UK, Hong Kong and Switzerland to start with so that customers in those markets can get an access to some leading fund managers in the emerging markets, including India.

Southeast Asia

Hedge Funds Help Fuel Southeast Asia Consumer Lending Boom (Bloomberg), Rated: AAA

A small but rising number of hedge funds are being established to help finance the boom in online and peer-to-peer lending across Southeast Asia.

Pilgrim Asia Consumer Finance Fund, founded by Brian Yonghui Tan and Paul Sheng, aims to raise up to $20 million in its first year and generate a return for investors of around 8% per annum. It will charge a 2% management fee.

OJK Condemns Fintech Lender over Indecent Post of Debtor (Tempo), Rated: A

The Financial Services Authority (OJK) condemns fintech lender Incash for posting a photo of one of its debtors online, with captions saying she was willing to have sex for money so she could pay her debts to the online lender.

Authors:

George Popescu
Allen Taylor

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

Thursday July 18 2019, Weekly News Digest

Digital-only banks U.S.

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

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

Digital-only banks U.S.

News Comments

United States

United Kingdom

China

Other

News Summary

United States

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

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

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

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

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

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

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

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

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

Mortgage Rate Distribution

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

Mortgage Rate Competition Index

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

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

Source: PeerIQ, WSJ

Digital Banks – The Future of FinTech Lending?

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

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

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

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

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

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

Is Monzo the ‘Bank of the Future’?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In this podcast you will learn:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Some of the featured keynote speakers this year will be:

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

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

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

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

China

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

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

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

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

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

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

European Union

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

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

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

International

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

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

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

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

Australia

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

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

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

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

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

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

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

Asia

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

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

Strong contenders for the Singapore’s digital bank licenses

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

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

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

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

Canada

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

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

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday July 11 2019, Weekly News Digest

Asset-backed securities

News Comments Today’s main news: Morningstar completes DBRS purchase. Figure issues $85M in loans per month. Zopa chief says banks are trying to put fintech lenders in a box. DBRS praises Funding Circle. Yirendai’s Q1 results. Octopus expands into Germany. Today’s main analysis: Over 60% of purchase borrowers received mortgage rates under 4.5% last week (A […]

The post Thursday July 11 2019, Weekly News Digest appeared first on Lending Times.

Asset-backed securities

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United States

United Kingdom

China/Hong Kong

European Union

International

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United States

Former SoFi CEO Mike Cagney’s New Blockchain Startup Is Issuing $ 85 Million In Loans A Month (Forbes), Rated: AAA

Since the streamlined HELOC Mike Cagney, the co-founder and former CEO of fintech unicorn Social Finance (SoFi), knows that it is essential to focus on customer experience to build a loyal client base. Today, he is using that knowledge to create a platform aimed at driving mainstream adoption of blockchain technology in the financial sector.

Over 60% of Purchase Borrowers Received Mortgage Rates Under 4.25% Last Week (LendingTree), Rated: AAA

Mortgage Rate Distribution

  • For 30-year, fixed-rate mortgages, approximately 60.1% of purchase borrowers received offers of 4.25% or less. That is up from 57% of borrowers the previous week. A year ago, 0.06% of offers were under 4.25%.
  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, 4.125% was the most common interest rate. This rate was offered to 14.3% of borrowers.
  • Of 30-year, fixed-rate mortgage refinance borrowers, 72.8% received offers of 4.25% or less, which is up from 70.4% the previous week. A year ago, no refinance offers were under 4.25%.
  • Across all 30-year, fixed-rate mortgage refinance applications, the most common interest rate was 3.875%, offered to 18.9% of borrowers.

Mortgage Rate Competition Index

  • Across all 30-year, fixed-rate mortgage purchase applications on LendingTree, the index was 1.19, down from 1.22 the previous week.
  • How big of a deal is it to get a mortgage APR that’s 1.19 percentage points lower than the competition? Over 30 years, that could translate to $56,826 in savings on a $300,000 loan (see Mortgage Savings Tracker graphic below).
  • The index was wider in the refinance market at 1.35, up from 1.34 the previous week. Refinance borrowers could have saved $65,108 by shopping for the lowest rate.
Source: LendingTree

It’s Taking Less Time to Close on a Mortgage in 2019 (LendingTree), Rated: AAA

  • The time to close in new purchase transactions has been steadily declining, from 74 days in 2017 to 51 days in 2018 and just 40 days thus far in 2019.
  • For refinances, the decline has been less dramatic: from 55 days in 2017 to 43 days in 2018 and just 38 days so far in 2019.
  • Some of the decline can be attributed to lower mortgage volumes, as refinancings have been on a downward trend. But increased digitization is also playing a major role.
  • Closing times vary based on the characteristics of the mortgage type and borrower. Having a higher credit score can knock a few days off: Purchase borrowers with scores above 760 averaged 38 days in 2019 compared with 45 days for those below 720. Refinancings did not show much variation by credit score.
  • Loan-to-value ratios below 80% had shorter closing times for refinances, at 37 days compared with 42 days on mortgages with a ratio above 95% in 2019.
  • Loan amounts also affect closing times, with lower amounts, perhaps surprisingly, taking the most time. Loans under $150,000 averaged 47 days compared with 39 days for those above the conforming limit ($484,350 in 2019). Why? Higher loan amounts are typically being made to more credit-worthy borrowers. Lower-priced homes may be in some form of distress or have some type of damage; lenders thus may require more extensive appraisals to better estimate the home’s value and this adds time to the process.

Mortgage Fintech Innovation (PeerIQ), Rated: AAA

In broad-brush strokes, mortgage innovation centers on:

  • Customer experience (Better, Roostify, Blend, HomeCaptain) solutions are re-inventing the onerous mortgage with a digital experience, speeding decision times and opening up the lending buy box in the process.
  • Intermediation (OpenDoor, HomeLight, Zillow) – Some platforms are stepping in between buyers and sellers to provide liquidity, capturing transaction fees in the process
  • Data (House Canary, Zillow, Atom Data) – are amassing large data sets to providing accurate, standardized pricing models for investment decisioning
  • Banking 2.0 (SoFi, ZeroDown) – seek to provide a range of banking or investing services to consumers
Source: PeerIQ

Guaranteed Rate Companies Breaks 15 Company Records with Exceptional June Production Volume (Yahoo! Finance), Rated: A

Guaranteed Rate Companies, one of the largest retail mortgage lenders in the nation, announces 15 new company milestones—breaking its monthly total locked volume for the fourth consecutive month in June.

Breaks its record of total locked volume with $5.31 Billion earned across more than 15,000 units

Can Commercial Real Estate Investment Truly Be Democratized? (Commercial Observer), Rated: AAA

Most real estate crowdfunding sites continue to highlight the equalizing benefits of the model. Fundrise provides “access to a once-unattainable investment class,” and Rich Uncles, which has a minimum of $5, wants to “level the playing field” for the average investor. The sites offer investments in funds that focus on income-producing assets, like single-tenant office, multifamily housing and convenience centers nationwide.

Jeff Holzmann, the former COO of crowdfunding site iintoo, says the definition of an accredited investor is very divisive: “You can have an economics degree, and if you make $199,000 a year, you can’t invest, but Kim Kardashian can walk right on up and buy a multifamily building for $200 million. Should our bar be set by how much money you make?”

Ryan Williams Is Bringing the ‘Proptech’ Revolution to Real Estate Investing (Fortune), Rated: A

Real estate is an industry notoriously stuck in its ways and slow to change. Cash-generating, bricks-and-mortar assets are at the very heart of the enterprise, and in many ways, business is conducted the same way it was 100 years ago. Until recently, real estate owners, investors and brokers had little patience for the kinds of technological advances that have swept through myriad other industries.

But that’s all changing now. Just as there’s fintech, medtech, edtech and regtech, so is there proptech—and there are few companies in the realm of real estate technology as closely watched as Cadre, led by a 31-year-old Blackstone Group and Goldman Sachs alum named Ryan Williams.

7 Reasons Why Long Distance Investing Isn’t As Risky As You Think (Forbes), Rated: A

In 2019 we have many ways we can verify the information we are provided when we invest outside of our own market. These methods will be the focus of this article. By the time you’re done with this, I think you’ll have a much better understanding of how to conduct due diligence, why out out state investing isn’t as risky as you thought, and why I’m such a big proponent of it

1.The Internet

There is very little you can’t find out with a little online searching.

2. You Can Find Rent Estimates Easily

Websites like Rentometer and Craigslist make a preliminary rent search fast and easy.

7. You Can Find Comps Yourself Online

BlueVine Reaches $ 2 Billion In Total Funded Volume (Bluevine), Rated: A

This past month, BlueVine achieved a major milestone, having provided access to more than $2 billion in total working capital to businesses across the nation.

Finitive Announces $ 100 Million Credit Facility For Platinum Auto (Crowdfund Insider), Rated: A

Finitive announced on Monday its client Platinum Auto of Tampa Bay secured a $100 million credit facility through its platform. Platinum notably purchases auto loan contracts from a network of over 300 auto dealers in the southeast region of the U.S.

Affirm lets you pay off a large online purchase over time — here are 35 stores that accept it (Business Insider), Rated: A

You can apply for a loan as you’re shopping at one of many Affirm’s partner stores, which include women’s and men’s fashion, furniture, sports and fitness, electronics, jewelry, and watch brands.

You can see which online retailers accept Affirm below.

They’re divided by category and we’ve also designated which ones offer loans starting at 0% APR with an asterisk.

Will Abercrombie & Fitch’s “Buy Now, Pay Later” Plan Lock in Gen Z Shoppers? (The Motley Fool), Rated: AAA

Abercrombie & Fitch (NYSE:ANF) recently partnered with payment solutions provider Klarna to let U.S. shoppers split purchases into up to four interest-free payments over two months. A&F is aiming this “buy now, pay later” system — which its rival Urban Outfitters (NASDAQ:URBN) has also adopted — at younger shoppers with less spending power.

But will “buy now, pay later” work?

Only a third of millennials have credit cards according to Bankrate. The average millennial in the U.S. also has a net worth of just $8,000 according to Deloitte, which gives them significantly less spending power than previous generations. Most Gen Z shoppers don’t have credit cards yet. They mostly use debit cards or linked payment apps, which restrict purchases to the amount of cash in their bank accounts.

rue21 is Totally on Trend with the Addition of Klarna (Yahoo! Finance), Rated: A

Klarna, the global alternative payments provider, is getting trendy with the Millennial favorite fashion brand rue21. Customers can choose to pay with four equal payments collected bi-weekly – with no interest or fees. With Klarna, these cool customers get the ability to stay ahead of trends even faster with a smooth checkout and a payment option that boosts flexibility and purchase power.

The necessity for businesses to keep up with the customer is increasingly important considering that U.S. shoppers admit to buying clothes and accessories online an average of 10 times a year. For Gen Z shoppers, aged 16-24, this number increases to 18 times per year, with nearly a quarter (23%) of them admitting to shopping online 1-3 times per month. Millennials are shown to shop online 14 times per year and the 55+ age group, 8 times per year. Considering these Millennial and Gen Z demographics are credit card averse and debt conscious, Klarna delivers an appealing and accessible method for shoppers to take control of their finances in a manageable way.

Metro Denver businesses mostly seeing green, not red (Denver Post), Rated: A

Of 42,610 businesses in metro Denver, 29,560 or 69.4 percent reported turning a profit, according to an analysis from online lender LendingTree.

That placed fifth out of the 50 metro areas that LendingTree ranked based on Census Bureau data. Seattle had a business profitability rate of 70.9 percent, making it the leader nationally. The only other cities ahead of Denver were Louisville, Ky.; Indianapolis and Portland, Ore.

U.S. Consumer Borrowing Climbs on Bigger Credit Card Balances (Bloomberg), Rated: A

U.S. consumer debt climbed in May at about the same pace as a month earlier, led by the largest advance in revolving debt outstanding since October, suggesting Americans’ favorable economic outlook is underpinning continued spending.

Total credit rose $17.1 billion from the prior month, in line with the median estimate of economists, following a $17.5 billion gain in April, Federal Reserve figures showed Monday. While credit card and other revolving debt outstanding increased at a faster rate, non-revolving credit posted the smallest increase in almost a year.

Small Business Loan Approvals at Big Banks Hit Record Highs (Yahoo! Finance), Rated: A

Approval rates for small business loan applications inched up to yet another record high of 27.6% at big banks ($10 billion+ in assets) in June, while the approval percentage also climbed at small banks, hitting 50% for the first time in 2019, according to the Biz2Credit Small Business Lending Indexreleased today.

Small bank approvals of small business loan applications climbed one-tenth of a percent from 49.9% in May to 50% in June.

Small business loan approval rates among alternative lenders dropped one-tenth of a percent to 57.0% in June, down a notch from 57.1% in May.

LendingTree Survey Finds 45% of Newlyweds Went into Debt for Their Wedding (PR Newswire), Rated: A

Approximately 45% of newlyweds between the ages of 18 and 53 went into debt to pay for their wedding. And once married, nearly half of the newlyweds who obtained wedding-related debt said money has caused them to consider divorce. On the flip side, only 9% of couples without wedding-related debt contemplate divorce.

LendingTree released its study on newlyweds and wedding expenses.

How Using Fintech Can Help Pay Off Student Loans (Yahoo! Finance), Rated: A

Companies like SoFi, Laurel Road and Splash Financial are just a few of the fintech industry names that have made their way into the student lending world.

Credible. This is a platform that allows you to compare student loan refinance rates from eight different lenders.

LendKey. Similar to Credible, Lendkey is a platform that allows the borrower to compare refinance rates side by side.

CommonBond. CommonBond for Business offers a flex contribution program that includes an option to directly contribute to paying down employee student loans, or to work with employees on financial literacy techniques for reducing their debt.

Gradifi. Gradifi is another fintech offering refinance options, bundled with employee benefits packages called SLP, or “student loan paydown”.

Earnest. This fintech offers refinance options to individuals with a more limited credit history that may not qualify for other traditional options.

FutureFuel. FutureFuel uses behavioral economics, which is the study of human behavior to explain economic decisions people make.

3 Alternative Financing Options for Small Businesses in 2019 (Digital Journal), Rated: B

Online finance is a very popular option to emerge of late. A few click on the website can bring about quick processing and loan approval.

Another alternative financing option is that of merchant cash advance.

Crowdfunding is an innovative and extremely popular way to raise money for new ideas, concepts, prototypes and creative products.

New Study on Digital Identity Shows Changing Consumer Behaviors (Lend Academy), Rated: A

Today, according to Pew Research Center more than 50 million American adults are mobile-only consumers.

Each year, IDology publishes a Consumer Digital Identity Study aimed at giving businesses visibility into how consumer preferences and opinions related to identity and fraud are shifting. This year’s study confirms the continued movement toward mobile, finding that in the last 12 months, for the first time, consumers opened more new accounts online with their mobile devices than on computers. A closer look at the data shows that 50 million American consumers (20% of all online adults) registered for new accounts exclusively on a mobile phone, up 10% from last year. This growing number has implications for financial service providers as they strive to keep fraud out while giving consumers a seamless digital experience.

Online Lending Startup Tries To Push Usury Suit To Arbitration (Law360), Rated: B

Online lending startup MoneyLion told a North Carolina federal court Tuesday that a suit over alleged unlicensed payday lending belongs in arbitration, arguing the proposed class of borrowers had signed valid arbitration agreements when taking out their loans.

United Kingdom

Zopa boss Jaidev Janardana: big banks are trying to ‘put fintech lenders in a box’ (The Telegraph), Rated: AAA

In just a few months, a string of Zopa’s rivals in peer-to-peer lending have collapsed. Others have exited the sector altogether.

The latest company to fall into administration, Lendy, resulted in £165m of customer cash being put on the line and affected more than 20,000 investors.

Zopa survey finds Brits are more open about bank balance than Netflix password (P2P Finance News), Rated: A

A survey of 2,000 adults by the peer-to-peer lender found that 47 per cent of respondents felt more comfortable revealing details about their bank accounts with their partner than their most intimate secret, while the same percentage would prefer to give an insight into their finances over their Netflix password.

Zopa looks to grow secured car finance offering (P2P Finance News), Rated: B

ZOPA is readying to launch its secured car finance product as a direct offer on its website, as it looks to expand this segment of the business.

Ratings agency backs Funding Circle strategy to tighten lending (AltFi), Rated: AAA

SME focused peer-to-peer lender Funding Circle was correct to proactively take the decision to tighten its lending criteria in pulling back from higher-yielding lower-quality loans, according to ratings agency DBRS.

Investor fintech demand drives record six months for Crowdcube (AltFi), Rated: A

Crowdcube saw revenues soar 39 per cent to £3.72m in the first half of 2019, compared to the same period in 2018, with £103.4m pledged to companies through the platform.

NatWest-backed Esme hits £60m lending milestone (AltFi), Rated: A

Esme Loans said it has hit over £60m of lending to UK small businesses just two years after its launch.

The small business lender unit said its loans have leapt 20 per cent since the end of April.

Habito launches buy-to-let mortgages (Which), Rated: A

Online mortgage broker Habito has launched a comprehensive range of buy-to-let mortgages, as it makes its first foray into lending.

The brokers offers a range of two and five-year loans for landlords, as well as more niche three, seven and 10-year fixed terms.

FCA misconduct probes into retail financial services firms increase by a third (P2P Finance News), Rated: A

THE NUMBER of Financial Conduct Authority (FCA) cases opened into misconduct in retail financial services has increased by 29 per cent in the past year.

The number of cases has increased to 101 for the 12 months ended 31 March, up from 78 the previous year, the FCA said in its annual report on Tuesday.

The regulator also said that the overall number of enforcement cases it is undertaking is up by 31 per cent over the past year – rising to 650 from 496 at the beginning of the year.

OakNorth lends £19.5m to Care Concern Group (Fintech Finance), Rated: B

Klarna teams up with UK festival We Out Here (Retail Tech Innovation Hub), Rated: B

PayTech venture Klarna has announced a partnership with new jazz and electric festival We Out Here.

It will unveil a ‘Smoooth Sanctuary’ at the event, which will be held in Cambridgeshire in August.

China/Hong Kong

Yirendai Reports First Quarter 2019 Financial Results, Closing of Business Realignment Transactions with CreditEase (GlobeNewswire), Rated: AAA

First Quarter 2019 Operational Highlights

Consumer Credit—Yiren Credit

  • Total loan originations in the first quarter of 2019 reached RMB 10.9 billion (US$1.6 billion), representing a decrease of 45% from RMB 19.8 billion in the first quarter of 2018.
  • Cumulative number of borrowers served reached 4,404,812, representing an increase of 15% from 3,824,341 in the first quarter of 2018.
  • Number of borrowers in the first quarter of 2019 was 149,715, representing a decrease of 48% from 287,166 in the first quarter of 2018.
  • The percentage of loan volume generated by repeat borrowers was 38.8% in the first quarter of 2019.
  • Total outstanding principal balance of loans reached RMB 63,213.8 million (US$9,419.2 million) as of March 31, 2019, representing a decrease of 16% from RMB 75,271.5 million March 31, 2018.

Reviewing China Rapid Finance Limited (XRF)’s and X Financial (NYSE:XYF)’s results (NBO News), Rated: A

This is a contrast between China Rapid Finance Limited (NYSE:XRF) and X Financial (NYSE:XYF) based on their analyst recommendations, profitability, institutional ownership, risk, dividends, earnings and valuation. The two companies are Credit Services and they also compete with each other.

Earnings & Valuation

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Rapid Finance Limited 1 0.27 N/A -0.85 0.00
X Financial 5 0.00 N/A 0.85 6.34

Table 1 shows the top-line revenue, earnings per share (EPS) and valuation for China Rapid Finance Limited and X Financial.

Court Upholds Ruling That Sent Two Peer-to-Peer Lending Executives to Prison for Life (Caixin Global), Rated: AAA

Shanghai Kuailu Investment Group Co. Ltd., along with two affiliated companies, and 15 defendants were convicted of fraudulent fundraising or illegal fundraising or both, according to the final ruling (link in Chinese) made by the Shanghai High People’s Court on Tuesday.

Kuailu, along with its affiliates, illegally raised more than 43.4 billion yuan ($6.3 billion) from the public, causing 40,000 people to take financial losses, the court said.

Foreign Investment Restrictions in P2P Lending Intermediaries (Lexology), Rated: A

The Interim Administrative Measures for the Business Activities of Peer-to-Peer Lending Information Intermediaries define “peer-to-peer lending” as direct lending/borrowing realized between peers on an internet platform. Peers include natural persons, legal persons and other organizations.

Bitmain’s Affluent Co-Founder Establishes the New Crypto Startup Matrixport (All Stocks), Rated: A

With the hope of capitalizing on the recent rise of the Bitcoin price, the co-founder of the mining giant Bitmain, Wu Jihan, has organized a group to develop “Matrixport,” a financial services startup for cryptocurrencies. According to its CEO Ge Yuesheng, Matrixport will function as a one-stop-shop for not just safekeeping of digital assets but also for crypto lending and over-the-counter trading.

European Union

Online Lender October Pushes into Germany as it Continues Expansion (Crowdfund Insider), Rated: AAA

Marketplace lending platform October, which is based in France, has expanded in Germany, according to a blog post by CEO and founder Oliver Goy.

October has selected Thorsten Seeger, a Funding Circle veteran, as CEO of October Deutschland as its plots its ongoing expansion across Europe. October currently operates in France, Spain, Italy, and the Netherlands.

Investors are putting £9bn to work in P2P Lending across Europe, UK still dominating (AltFi), Rated: A

The peer-to-peer lending market is now funding more than £9bn of loans across Europe each year with two thirds (67 per cent) of this funding coming through UK platforms.

Revolut brings the fintech battle to Berlin with a new hub (Yahoo! Finance), Rated: A

British fintech startup Revolut is opening a new European tech centre in Berlin, the home turf of its online-banking rival N26.

Lagan Investments takes 10% stake in Property Bridges (Irish Times), Rated: A

Lagan Investments, a fund founded by the North’s biggest house-builder, Kevin Lagan, has taken a 10 per cent stake in peer-to-peer lender Property Bridges and is to supply it with €5 million in lending capital.

International

Morningstar Names Detlef Scholz President of Expanded Credit Ratings Organization (Morningstar), Rated: AAA

Morningstar, Inc. (Nasdaq: MORN) has named Detlef Scholz as president of its expanded, global ratings organization. The leadership announcement comes as Morningstar today completes its previously announced acquisition of DBRS, the world’s fourth largest credit ratings agency, for a purchase price of US$669 million.

Scholz will assume his new role Aug. 1, 2019 and report to Morningstar Chief Executive Officer Kunal Kapoor.

Source: Morningstar

View the Morningstar/DBRS overlapping ratings.

Deutsche Bank in partnership talks with SoftBank-backed OakNorth (Reuters), Rated: A

Deutsche Bank (DBKGn.DE) is in talks with SoftBank-backed (9984.T) British fintech firm OakNorth to use the latter’s credit analysis and monitoring platform, a source with knowledge of the discussions told Reuters.

CoVEX Exchange — A Single Platform to Complete the Entire Crypto Lifecycle (Coinfomania), Rated: B

P2P loan: The CoVEX platform also implementing a decentralized p2p lending service. This allows users across the world to receive loans in lesser time and even reduces the repayment fee while at the same time protecting the interests of the lender.

Australia/New Zealand

An alternative loan scheme could help 2.1 million Australians in financial distress (UNSW Sydney), Rated: AAA

A social lending scheme could help bridge the gap between traditional lenders and government welfare for the 2.1 million Australians under high levels of financial stress.

Alexa Chung partners with Klarna challenger Laybuy (AltFi), Rated: A

Payments platform Laybuy has struck a new retail partnership with fashion brand of Alex Chung  – called ALEXACHUNG – allowing customers to spread the cost of purchases over six equal weekly payments.

New Zealand’s largest digital buy now, pay later app launched in March with its first partnership with Footasylum.

The true role of the SME broker (Australian Broker), Rated: A

Yet SMEs are being stiffed by traditional lending practices: 44% of small businesses have been knocked back for finance in the last 12 months. Put simply, SMEs are being underserved and ignored by the banks.

India

‘NiYO’ Raises US$ 35 Mn in Series B Round led by Horizons Ventures & Tencent (Yahoo! Finance), Rated: AAA

Indian new-age digital banking start-up NiYO Solutions has raised US$ 35 million in Series B funding round from Horizons Ventures, Tencent and existing investor, JS Capital. NiYO is founded by banking veteran Vinay Bagri and technology veteran Virender Bisht. NiYO had previously raised US$ 14 million in funding rounds led by Prime Venture Partners. With the current round the total fund raised by NiYO is US$ 49 million.
Authors:

George Popescu
Allen Taylor

The post Thursday July 11 2019, Weekly News Digest appeared first on Lending Times.

Thursday July 6 2019, Weekly News Digest

PayPal

News Comments Today’s main news: 3 top execs exit SoFi. Zopa proclaims end of monogamous banking. LendInvest earnings hit the roof. Financial Conduct Authority sets new rules for UK P2P lending. Quarter of global small firms are significant fintech users. Biz2Credit raises $52M. Today’s main analysis: Alternative lenders steal business from banks. P2P lending will be […]

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

PayPal

News Comments

United States

United Kingdom

China/Hong Kong

International

Other

News Summary

United States

SoFi Loses Three Top Executives (WSJ), Rated: AAA

Three top executives of Social Finance Inc. are leaving the financial-tech startup in the coming weeks, adding to the challenges the company faces as it moves through a tough environment for online lenders.

Marketing chief Joanne Bradford, head of risk Kevin Moss and Ashish Jain, the lender’s top capital markets executive, recently told Chief Executive Anthony Noto about their plans to step down from their roles. All three had been at the company prior to Mr. Noto taking the reins in early 2018.

Tech Driving Bank Earnings Growth (PeerIQ), Rated: AAA

US first quarter GDP growth was revised lower to 3.1%. There is fear that the economy is slowing due to the ongoing trade war and the length of this economic expansion. The 3 month-10 year yield curve fell to its most inverted since 2007 to -12.3 bps. Recessions have usually followed within 18 months of this curve inverting. The market is looking to the Fed to bolster economic growth with the odds of a rate cut at the September meeting now at 54%.

Source: CME, PeerIQ

Technology Driving Earnings Growth

Banks and lenders are reaping the benefits of their technology investments now. Banks like Citi have been able to offer new products and grow their deposit base, while Capital One has improved its efficiency ratio by 400 bps. Banks and lenders continue to make large technology investments for faster growth at lower cost.

Alternative Lenders Continue to Steal Business From Banks (The Financial Brand), Rated: AAA

What is less well known is the rapid growth of PayPal as a digital lending alternative. It may be time for banks and credit unions to wake up, however, as the company announced that they had crossed $10 billion in small business lending in only 5 years.

Amazon Joins PayPal as Top 5 Small Business Digital Lender

Amazon has joined PayPal, OnDeck, Kabbage, and Square as a top 5 digital small business lender. In fact, Amazon revealed that it had made more than $1 billion in small business loans to US-based merchants in 2018.

The peer-to-peer business lender, Funding Circle, also revealed its first-quarter trading update, showing that loans under management rose by 44% compared to the first quarter of 2018, while originations grew by 23% (they have originated $9.5 billion in loans).

Consumer Financial Protection Bureau Releases Rules for Comprehensive Reform of Debt Collection Industry (Debevoise & Plimpton), Rated: AAA

On May 7, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) released a Notice of Proposed Rulemaking (“NPRM” or “Notice”) to increase regulation of the debt collection industry.1 The much-anticipated Notice is the outgrowth of the CFPB’s 2016 Outline of Proposals (the “Outline” or the “2016 Outline”), which was a cornerstone of the Obama Administration’s efforts to protect consumers and overhaul all aspects of consumer finance (see our August 10, 2016 client alert on the Outline here). One presidential election and two CFPB Directors later, CFPB Director Kathleen Kraninger announced a more limited plan to put in place substantial protections, but which rejects some of the 2016 Outline’s more ambitious proposals. The NPRM would overhaul the industry by, for example, requiring that debt collectors make no more than seven attempts by telephone per week to reach consumers about specific debts, and allow debtors to opt out of allowing collectors to contact them via e-mail, text messages, or other media. However, the proposal fails to address many of the Outline’s calls for increased regulation of substantiation of debt, decedent debt, and transfer of information to subsequent collectors (among other things).

See the full report here.

Biz2Credit Raises $ 52M In Funding To Expand (PYMNTS), Rated: AAA

Biz2Credit, the online lending platform that helps banks and other financial institutions manage small and medium-sized business (SMB) lending processes, announced Tuesday (June 4) that it raised $52 million in venture funding.

Biz2Credit said the Series B funding round was led by WestBridge Capital.

Jared Kaplan of OppLoans (Lend Academy), Rated: A

The next guest on the Lend Academy Podcast is Jared Kaplan, the CEO of OppLoans.

Lighter Capital Introduces Suite of Alternative Financing Solutions to Fund More Startups up to $ 3 Million (Yahoo! Finance), Rated: A

Lighter Capital announced today that it has launched new financing products to better match the capital needs of growing startups. To date, Lighter Capital has provided over $150 million in more than 500 rounds of financing to over 300 startups. The company has historically provided Revenue-Based Financing and has now broadened its portfolio to include lines of credit and term loans, designed to provide startups capital over time as they need it. Unlike most venture debt, startups do not need to have raised Venture Capital to qualify for funding.

1. Lighter Line of Credit – Startups have fluctuations in capital needs, to make essential payments like payroll or wait for a big customer payment. The Lighter Line of Credit is a revolving working capital line. It enables startups to draw and return capital numerous times, to even out their cash needs.

2. Lighter Term Loan – Provides startups growth capital in a traditional structure with predictable payments. Lighter Capital will also make forward commitments, giving startups the right to get additional capital for a period of time. For example, a startup could get a $500,000 loan today and a commitment from Lighter Capital to provide an additional $500,000 over the following six months.

LendPro Unveils Dynamic Routing Capability to Streamline POS Financing (LendPro Email), Rated: A

LendPro LLC, a provider of Lending-As-A-Service (LaaS) products and platforms for retailers, today unveiled Dynamic Routing —an innovative POS financing solution that automatically matches consumer credit applications with the best-available lending option.

While alternative lending software moves credit applications through a pre-defined, inflexible process, Dynamic Routing by LendPro dynamically guides borrower application data to lenders in the merchant’s financing portfolio based on the attributes of the sale. For example, if the total price for a specific purchase is too large (or small) for a lender’s target loan size, LendPro’s Dynamic Routing system can route the applicant to a different lender. This technological innovation saves time, increases simplicity, and may help the borrower avoid an unwanted credit application.

Why it’s Time to Ask Your Wealth Manager About P2P Lending (Crowdfund Insider), Rated: A

Using a crowdfunding platform, however, 5,000 individuals might each invest $1,000 into the company. Each of those individual investors is exposed to a very small amount of risk, and the company is able to raise the funds without surrendering ownership.

Possible Finance lands $ 10.5 million to provide consumers softer, kinder short-term loans (TechCrunch), Rated: A

It’s one reason that venture capitalist Rebecca Lynn, a managing partner with Canvas Ventures  and an early investor in the online lending company LendingClub, has largely steered clear of the numerous startups crowding into the industry in recent years. It’s also why she just led a $10.5 million investment in Possible Finance, a two-year-old, Seattle-based outfit that’s doing what she “thought was impossible,” she says. The startup is “helping people on the lower end of the credit spectrum improve their financial outlook without being predatory.”

Santa Clarita Ranked Second Highest ‘Debt-Ridden’ City In California (Home Town Station), Rated: A

LendingTree, an online loan marketplace, released a report this week detailing the accrued debt of all California cities with a population of at least 50,000.

Santa Clarita ranked the second highest in auto loan debt with an average of about $21,000, and second in the state for personal loan debt, excluding mortgages, with an average of just over $6,000.

Source: Home Town Station

Cities With the Highest Percentage of Black Homeowners (Black Enterprise), Rated: A

Even though housing discrimination has been outlawed for 50 years, studies show that the U.S. black homeownership rate isn’t any higher than when the Fair Housing Act initially passed in 1968. In fact, the racial gap between white and black homeowners today is significant. According to the U.S. Census Bureau, the homeownership rate among white Americans is 73.2%, while the black homeownership rate stands at 41.1%. In comparison, 42% of black households owned their homes back in 1970, two years after housing discrimination based on race, color, religion, and national origin was outlawed.

According to the report, the U.S. cities that have the highest percentage of black homeowners are San Jose, Los Angeles, Salt Lake City, San Antonio, and Portland. On the other hand, the cities where black homeownership is lowest relative to overall population are Memphis, New Orleans, Baltimore, Virginia Beach, and Milwaukee, where the median household income for black residents is a mere $28,928.

See LendingTree’s report here.

Real Crowd Says HNW Investors Poised to Boost Real Estate Investments in 2019 (Crowdfund Insider), Rated: A

Real estate crowdfunding platform RealCrowd reports that High Net Worth (HNW) investors are looking to increase their portfolio of real estate investments during 2019. According to a survey by the Fintech platform, 53% of surveyed HNW individuals expect to make “two-to-four direct real estate investments in 2019.” Specific details on the survey process were not revealed.

This is a big improvement over year prior when just 33% planned to do the same thus an increase of around 20%.

The survey also stated that 47% of respondents’ desire to allocate more than 25 percent of their investment portfolio to commercial real estate.

WealthStone – Democratizing Access to Commercial Real Estate (PR Newswire), Rated: A

WealthStone LLC announces the launch of its new website, WealthStoneLLC.com, where technology brings increased access to institutional-quality commercial real estate investments to a wider audience, while delivering the best customer experience possible for its growing global investor base.

3 Investments That Lead to Passive Income (Realty Biz News), Rated: B

Peer-to-peer lending is a relative newcomer to the world of investments. Lending Club and Prosper were the first institutions to offer P2P loans beginning in mid-2000, and they’ve changed the way countless loans are handled. Instead of going to the bank, borrowers apply for loans from other people. People who have been denied loans from financial institutions are often approved for P2P loans at rates that are lower than those of larger financial institutions.

Sagent Lending Technologies to Transform the Lending Experience, Powered by Microsoft Azure (BusinessWire), Rated: A

Sagent Lending Technologies announced today a strategic initiative to transform the borrower and the lender experience through Microsoft Azure. Sagent will leverage the potential of artificial intelligence, machine learning, data science, and cognitive services available on Azure that will provide a reimagined experience for Sagent clients and their consumer borrowers.

BofA, Longtime Leader in Leveraged Loans, Warns of `Carnage’ (Bloomberg), Rated: A

The U.S. economy is on solid footing except for one potential trouble spot, according to Bank of America Corp.’sChief Executive Officer Brian Moynihan: leveraged loans — a business the bank has dominated for a decade.

Bank of America was bookrunner on some $317 billion of leveraged loans this year, accounting for 10.8 percent of the market share, the Bloomberg data show, which captures all leveraged term loans and revolver facilities that are either new or have been amended.

Moody’s Investors Service said covenant quality for 2018’s last quarter was close to a record low, and the rating company sees no signs of improvement this year. Federal Reserve Chairman Jerome Powell said last month that the market looks a lot like the mortgage industry in the run-up to the subprime crisis.

Digital Banks Look to Attract Older Generations (LendIt), Rated: A

One of the challenges for the challenger banks like Monzo, Starling and Revolut is to go beyond the young demographic they’ve been successful at attracting to their products; not surprisingly, less than 5% of Monzo’s customers over 60; as more bank branch close they are looking to bring in older customers who are no longer being served by traditional banks; Monzo and Starling have both added the ability to make cash deposits; Starling recently partnered with the post office and Monzo partnered with a payments service which is in 30,000 shops in the UK; these digital banks and their competitors are experimenting in how they can have more physical points of contact with customers; Revolut recently shared a plain English customer contract in a move to help their customers better understand the product.

The tech banks are using to boost deposit growth (American Banker), Rated: A

First Arkansas & Trust, for example, is using Plinqit, a goal-oriented savings app from a fintech called HTMA Holdings, in the hopes of boosting deposits.

And some banks have begun to specialize in the banking-as-a-service model to increase deposits.

Following is a look at how regional and community banks are employing tech to help in the race for deposit growth:

Wharton just released an online fintech course for the masses (Technical.ly), Rated: A

On Thursday, the University of Pennsylvania’s Wharton Online announced its new virtual fintech specialization program, “FinTech: Foundations and Applications of Financial Technologies,” for students and professionals who want to learn about the rapidly changing tech.

The four-course financial program is available via online education platform Coursera, and will detail the use of cryptocurrency, robo-advising, crowdfunding and modern investing.

BlueVine Appoints Silicon Valley Veteran Herman Man to Chief Product Officer (BlueVine), Rated: B

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced today that it has named Silicon Valley technology and engineering veteran, Herman Man, its Chief Product Officer. In this role, Man will focus on developing the next generation of BlueVine products and oversee the company’s product vision, strategy, design and execution to deliver on its mission to provide fast, fair and easy financing solutions every small business needs to thrive.

Lendio Announces New Senior Vice President of Lender & Partner Strategy (Lendio), Rated: B

Lendio announced today that Denada Ramnishta has been promoted to Senior Vice President of Lender & Partner Strategy.

Thomas M. Affolter Joins White Oak as Managing Director to Bolster Origination Efforts (Yahoo! Finance), Rated: B

White Oak Global Advisors, LLC (White Oak) is pleased to announce that Thomas (Tom) M. Affolter has joined White Oak as a Managing Director based in Chicago. Mr. Affolter will focus on originating new investment opportunities and expanding the coverage network for White Oak’s private debt funds.

United Kingdom

Zopa says fintech revolution has killed off monogamous banking (P2P Finance News), Rated: AAA

ZOPA has declared that “monogamous banking is a thing of the past”, as new research reveals that the average UK adult has a relationship with seven different financial providers.

The peer-to-peer consumer lender, which is launching a digital bank, said that the fintech revolution has changed the shape of financial services for consumers.

It cited a survey that found 71 per cent of UK adults said they do not need a relationship with their main bank, while two thirds are actively using products from banks and financial providers other than their main current account provider.

LendInvest earnings soar as it looks to disrupt ‘slow moving’ banks (P2P Finance News), Rated: AAA

ONLINE property lender LendInvest has reported an 82 per cent jump in core earnings, as it looks to disrupt the UK mortgage market.

LendInvest, which used to be a peer-to-peer lender before it shut its platform to retail investors, posted core earnings of £4m for the year ended 31 March 2019, up from £2.2m the previous year.

The firm, which is considering a stock market flotation, said that platform assets rose by 69 per cent to £788.3m over the same period, while revenue rose by 36 per cent to £72.7m.

FCA Announces New Rules For UK P2P Lending Platforms (Lend Academy), Rated: AAA

The long awaited changes to P2P lending regulations in the UK are finally here. Today, the Financial Conduct Authority (FCA) announced that the new rules for peer to peer lending platforms have been set and will come into effect on December 9, 2019.

  • Introducing more explicit requirements to clarify what governance arrangements, systems and controls platforms need to have in place to support the outcomes they advertise. These new rules focus particularly on credit risk assessment, risk management and fair valuation practices, especially for platforms with more complex business models.
  • Strengthening rules on plans for the wind-down of P2P platforms.
  • Applying marketing restrictions to P2P platforms, designed to protect new or less experienced investors. We have also clarified the practical implication of these new rules as they apply to P2P agreements.
  • Introducing a requirement that an appropriateness assessment (to assess an investor’s knowledge and experience of P2P investments) be undertaken, where no advice has been given to the investor. We have also provided guidance on what the assessment should include.
  • Setting out the minimum information that P2P platforms need to provide to investors

Assetz Capital hits bridging loans and small business lending milestones (AltFi), Rated: A

Peer-to-peer lender Assetz Capital said it has hit a double milestone, providing over £100m in bridging loans and a further £50m in small business funding, “as the appetite for alternative forms of finance continues to rise across the UK”.

The Manchester-based fintech adds that since it was founded six years ago it has lent over £780m to small firms and property developers, helping build 3,700 homes in Britain.

UK P2P sector poised for “significant further growth” (P2P Finance News), Rated: A

THE UK’S peer-to-peer lending sector is set to experience “significant further growth”, according to Standard & Poor’s.

A report released by the ratings agency this week said that the growing involvement of institutional funds and increased securitisation issuance are set to boost the industry.

Santander and eBay team up on UK loans app (Techradar), Rated: A

In an effort to fend off tech giants and newer digital rivals, Santander and eBay have announced a new lending partnership for small businesses.

The Spanish bank will begin offering loans to over 200,000 small and medium-sized businesses that sell products on eBay in the UK through its financial technology app Astro.

As £165m Lendy collapses, experts warn ‘a dozen more peer-to-peer firms will follow’ (The Telegraph), Rated: A

While investments of varying risk are available, some platforms have tempted consumers with returns of more than 12pc on high-risk projects. But the collapse of one large platform, Lendy, which offered loans on property developments, has concerned investors across the sector.

Wagestream Says One Complaint Against PayDay Lenders is Resolved for Every Three Received (Crowdfund Insider), Rated: A

Payday loan alternative Wagestream has issued a release stating the Financial Ombudsman Service (FOS) has received 47,220 complaints against payday lenders since 2018. Yet while many complaints have been received only a fraction have been resolved. Wagestream states that only one out of three are resolved or just under 17,000.

Welendus unveils rebrand as Fund Ourselves (P2P Finance News), Rated: B

WELENDUS, the peer-to-peer payday lender, has rebranded as Fund Ourselves.

ARBUTHNOT SPECIALIST FINANCE CONCLUDES FIRST LOAN COMPLETION SINCE LAUNCHING THE BUSINESS (Arbuthnot Latham), Rated: B

Arbuthnot Specialist Finance (ASFL) is pleased to announce it has concluded its first loan completion since announcing its launch in late May. The deal is a 70% LTV residential product loan on a property located less than half a mile from the University of Central Lancashire campus in Preston.

China/Hong Kong

The Escalating US-China Trade War, Part 1 (In Homeland Security), Rated: AAA

China is in debt, significantly. Part of the problem is that it is difficult, if not impossible, to assign a figure to the debt. There are Chinese statistics for official debt, but following the 2008 economic crisis, China implemented new restrictions on lending. Over the past decade, those restrictions have shifted from one type of loan to another so Chinese citizens get creative with how they borrow money for business purposes or to purchase property.

Furthermore, the economic crisis took “shadow lending” to new heights. Shadow lending can include everything from organized crime to banks obfuscating the purpose of a loan or peer-to-peer lending. China cracked down on this lending practice too, but the debt amount is significant and official numbers do not typically include shadow lending.

New US Tariffs Spell Doomsday for China’s Economy (The Epoch Times), Rated: AAA

The additional 25 percent tariff imposed by the United States on $200 billion worth of Chinese goods will trigger a new round of factory closures in China, driving economic collapse.

In the context of the blow-up of the P2P (peer-to-peer lending) and other usury, the 8.4 trillion will cause most medium and small-sized banks to fall into bankruptcy crisis.

HSBC Rolls Out Digital Wallet To Hong Kong Businesses (PYMNTS), Rated: A

HSBC has reportedly expanded its PayMe digital wallet to startups and small businesses, marking its first foray into the business payments marketplace.

European Union

ING pushes for open banking with SME financing platform and Yolt expansion (Fintech Futures), Rated: A

ING is keen to maximise the possibilities of open banking and is working with Yolt and Funding Options on bringing new features to customers across Europe.

Firstly, ING is launching a marketplace for SME financing in the Netherlands, which will open to other external financing providers, becoming the first Dutch bank in doing so.

International

We are “very close” to peak fintech, with more than 10,000 startups jumping into the boom (Quartz), Rated: AAA

According to Curve’s Shachar Bialick, the founder and CEO, an app that lets customers to link all their credit and debit cards to just one card, says there are more than 10,000 fintech startups around the world, and even he can’t keep track of them all. Some, or even most, aren’t going to make it.

Quartz: It’s been about four months since Amex blocked Curve. What are your plans now?

Bialick: Amex was never a critical part of Curve. It was always an opportunity to solve a big problem Amex has in the UK and Europe, which is access.

Curve has continued to grow in Europe without Amex.

Have we reached the peak in terms of new fintech startups?

I don’t know if we reached the peak, but we definitely are very close, because today there are over 10,000 fintechs globally. I don’t know over 90% of them.

Peer To Peer Lending To Be The Next $ 1 Trillion Industry (ValueWalk), Rated: AAA

By eliminating the need for banks, peer to peer lending allows investors to invest in individual and company debt with 5-10% returns – a far cry from the the lowly 1.5% that you’ll received in a regular CD account.

And it works better for borrowers too. Borrowers are able to take out loans with greater ease and lower interest rates, typically offered in the region of 3-4%.

The average default rate at Lending Works is only 3.2% over the last six years. And many P2P lenders allow you to choose secured loans for additional protection.

Transparency Market Research estimates the industry be worth $900 billion by the end of 2024, with an annual growth rate of 48%, up from $26 billion in 2015.

Source: ValueWalk

One quarter of world’s small firms are ‘significant’ fintech users, says report (AltFi), Rated: AAA

Fintechs are becoming the ‘new normal’ in financial services, said a survey by professional services firm EY.

Fintech adoption is by far the highest in China, where 61 per cent of small businesses use their services, followed by the US, 23 per cent, the UK, 18 per cent, South Africa, 16 per cent, Mexico, 11 per cent, with the average set at 25 per cent.

Source: Ernst & Young

See the full report here.

Tencent, Temasek Invest $ 35 Million in U.K. Open-Banking Startup (Bloomberg), Rated: A

Chinese technology giant Tencent Holdings Ltd. and Singapore government-owned fund Temasek is to invest $35 million in London-based TrueLayer.

The Fintech Bubble Floats Toward a $ 64 Billion Pin (The Washington Post), Rated: A

Trendy U.S. online payments company Stripe, worth some $22.5 billion according to private-market valuations, is joining Amazon.com Inc. and Apple Inc. in warning about the impact of EU rules aimed at getting customers to double-check payments going out from their accounts.

Adyen trades at a gob-smacking 110 times this year’s earnings, with a market value of 20.8 billion euros. That’s almost twice the worth of Deutsche Bank AG, even though the Dutch fintech only employs the equivalent of 1% of the German lender’s staff. Stripe is the sixth most expensive private company in the world, according to researchers at CBInsights.

Australia

RBA Boss Warns Banks On Undermining The Economy (SB Dirty South Soccer), Rated: A

THE Reserve Bank of Australia (RBA) has cut the cash rate to a new record low.

The online lender announced a new headline variable rate for owner-occupiers at 3.34 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 21 2019, Weekly News Digest

fintechs and personal loans

News Comments Today’s main news: BlockFi hits $25M in deposits in 2 weeks. Cash-back ETF injects trouble into ETF market. PeerStreet expands product line. Funding Circle fund higher impairments drag returns. Dianrong blames Chinese regime for troubles. Today’s main analysis: New home equity loans do not significantly alter credit scores. Today’s thought-provoking articles: SoFi Money review. Can Citi, JPMorgan beat […]

The post Thursday March 21 2019, Weekly News Digest appeared first on Lending Times.

fintechs and personal loans

News Comments

United States

United Kingdom

China/Hong Kong

Other

News Summary

United States

BlockFi Receives $ 25 Million in Crypto Deposits in Just 2 Weeks After Launching Lending Products (CryptoGlobe), Rated: AAA

BlockFi Lending LLC, a New York-based “secured non-bank lender” that provides cryptocurrency-backed loans in USD to digital asset investors, has revealed that its interest-generating deposit accounts have received over $25 million in cryptocurrency.

SoFi Money Review: Online Checking (Nerdwallet), Rated: AAA

SoFi Money is an online checking account by SoFi, a company best known for its student loan refinance loans. SoFi’s account has a top-of-the-line interest rate and no monthly or overdraft fees. There’s no free ATM network, but SoFi reimburses many third-party ATM fees and doesn’t charge its own. SoFi also boasts unique perks: free career counseling and financial planning sessions.

Can Citi and JPM beat FinTech Personal Loans? (PeerIQ Email), Rated: AAA

The personal loan market has grown rapidly since 2010 and the growth has been driven by FinTechs. 

Source: TransUnion, PeerIQ

“My Chase Plan” and “My Chase Loans” – a point-of-sale financing alternative and a personal loan product respectively – that will be offered to its existing credit card customers.

LendingTree Study Finds New Home Equity Loans Do Not Significantly Alter Credit Scores (LendingTree), Rated: AAA

Home prices in the United States have rebounded to new highs since the financial crisis. As a result, American homeowners are sitting on the largest amount of home equity in history — at just over $15 trillion dollars, according to the Federal Reserve.

  • The decline in scores averaged just 13 points. At the high end, scores declined by 24 in San Jose,Calif. The smallest decline was 5 points in San Diego. Borrowers had an average score of 735 to start, so the declines are quite negligible in terms of access to credit and may have marginal impacts on the cost of credit. The highest starting credit score was 752 in San Francisco, while the lowest was 712 in Indianapolis.
  • The decline took an average of 158 days to reach bottom, which is just over five months. St. Louis homeowners saw their credit scores reach their lowest points in an average time of 101 days (3 months), while the longest decline was for homeowners in Dallas at 211 days (7 months). Loans do not appear on credit reports immediately after closing. Typically, the lender starts reporting to the credit bureaus after your first payment, depending on the lender’s reporting cycle. Thus it may take about 60 days after closing or even longer for it show up and start affecting a score.
  • Scores recovered over an average of 163 days. This is also just over five months, so the time to fall and recover are about equal. The quickest time to recover was 102 days, or slightly over 3 months, in Cincinnati. Borrowers in Chicago had the longest recovery time of 243 days, just over 8 months.
  • Scores recover within a year and begin to move higher. The complete cycle to return to the credit score prior to the home equity loan takes 321 days, less than 11 months. The shortest cycle was in St. Louis at 211 days and the longest in Chicago at 443 days, about 15 months.

As Cash-Back ETF Hits Market, Signs of Trouble Start to Mount (Bloomberg), Rated: AAA

Last week, one ETF upstart created a minor splash by doing what was once unthinkable — offering to pay investors to buy into its exchange-traded fund. That comes on the heels of eight fund providers — including JPMorgan Chase, Vanguard and BlackRock to name a few — all slashing fees in one of the industry’s most aggressive rounds of price cuts to date.

The sub-zero fee giveaway by Salt Financial, which previously ran a single $11 million ETF, is widely seen as a marketing gimmick to drum up a little PR, get customers in the door and increase its assets under management. During the first year, investors will receive 50 cents for every $1,000 in a new low-volatility stock ETF — until it grows to $100 million. After a year, a management fee of 0.29 percent, or $2.90 per $1,000, could kick in.

The race to zero, however, is very real. Fidelity Investments jump-started the no-fee push in August by offering index funds for free. In February, SoFi said it would waive charges on two planned ETFs for the first year. Last week, JPMorgan started selling America’s cheapest-ever ETF for the princely sum of 20 cents for every $1,000 invested. And BlackRock unveiled plans Wednesday to cut fees for large clients in one of its S&P 500 indexed mutual funds.

PeerStreet Expands Product Line with Residential for Rent Loans (BusinessWire), Rated: AAA

PeerStreet, a platform for investing in real estate backed loans, today announced the launch of a new loan product for private lenders: Residential for Rent loans. Residential for Rent loans have a 30-year term so borrowers can secure long-term financing for residential rental properties. This launch is in response to key market conditions: as more people struggle to finance buying a home, the rental market has continued to grow.

3 Big Reasons To Fill Out The FAFSA (Even If You Think You Earn Too Much) (Huffington Post), Rated: A

One-quarter of families don’t complete the FAFSA, according to Sallie Mae’s 2018 How America Pays for College survey. Of those that don’t fill it out, 48 percent say it’s because they don’t believe they’ll qualify for financial aid.

But they’re often wrong: An analysis by NerdWallet found that in 2017, students left an estimated $2.3 billion in federal financial aid on the table by not filling out the FAFSA.

According to Elaine Rubin, senior contributor and communications specialist at private student loan marketplace Edvisors, most Americans are eligible for some type of federal aid. In fact, it’s available to anyone with a household income below $250,000 per year, CNBC reported.

Madden lawsuit nears end, but online lenders still seek fix from regulators (American Banker), Rated: A

An 8-year-old class action that wreaked havoc on the online lending industry is finally winding down, but the lobbying push in Washington to undo its impact shows no signs of abating.

Lawyers in the case have filed a proposed settlement that would provide $9.8 million in cash and debt relief to as many as 58,000 consumers, setting up the final chapter in a lawsuit that is likely to be remembered best for the legal precedent it established.

The State of Digital Engagement for Online Lending (LendIt), Rated: A

A recent trend report by Clarity Services, a credit reporting provider, showed that online funded loan volumes grew by almost 500% between 2013 and 2017.

How Far are Most in their Digital Transformation Strategy?

  • 54% of financial institutions have developed a digital strategy, but have not yet implemented it
  • 29% of financial institutions are currently developing a digital transformation strategy
  • Only 14% of financial institutions are in the process of implementing a digital transformation strategy

How Much Will They Be Investing In Digital Transformation in the Next 12-18 Months?:

  • 65% are planning to increase spending by 10%
  • 26% are planning to increase spending by 1-9%
  • 6% have no plans to change spending

What will They be investing in over the next 12-18 Months?

  • Replace or upgrade legacy IT systems — 88%
  • Reduce operational inefficiency — 76%
  • Improve customer experience — 74%

X Financial’s Fourth Quarter Results Take Stock 5% Higher (Capital Watch), Rated: A

The stock of X Financial (NYSE: XYF) jumped more than 5 percent Tuesday morning, to $6.55 per American depositary share, after the peer-to-peer lending marketplace announced improved revenue and profit for the fourth quarter, as well as a dividend for 2018.

The Shenzhen-based company, which connects borrowers and investors on its platform, reported in a statement Monday evening that its revenue grew 18 percent year-over-year to $125.5 million during the three months through December.

Its net income, X Financial said, was $35.2 million, or 22 cents per share, at a 53 percent increase from the same period of 2017.

Why Corporates Cant Fund Early Pay Programs (Dynamic Discounting + SCF) (Spend Matters), Rated: A

If you look at the graph below, 5% of S&P 500 companies hold more than half the overall cash; the other 95% of corporations have cash-to-debt levels that are the lowest in data going back to 2004, according to Wells Fargo research. We know who those 5% are — they are the GAFA companies: Google, Amazon, Facebook and Apple.

Source:

ZestFinance Using AI To Bring Fairness To Mortgage Lending (Forbes), Rated: A

Discrimination in lending has long been a problem, shutting minority groups out of the home buying process.

ZestFinance, the artificial intelligence software company focused on the credit market is trying to change that with ZAML Fair, a new software tool that aims to reduce the instances of biases and discrimination in lending.

CoreLogic Launches PanoramIQ to Provide More Accurate and Complete Property Insights (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, today announced PanoramIQ, an intelligent property solution that delivers a more complete view of property data with more current and reliable sources than public-record data alone. Utilizing a combination of public and proprietary property datasets, a unique property ID, machine learning and advanced analytics, PanoramIQ provides lenders, mortgage industry professionals and government entities with deeper, more accurate and complete property insights, allowing clients to make better decisions in a timely and efficient manner.

White Oak Healthcare Finance Launches Real Estate Investment Vehicle with New Hires (ABL Advisor), Rated: A

White Oak Healthcare Finance, LLC announced it will broaden its product offering and enter the healthcare real estate investment market.  White Oak hired Jeff Erhardt, Paul Nevala, Mike Treiber and John Brussard to build out the vehicle, which will initially invest up to $500MM and will focus on investments in seniors housing and skilled nursing properties using triple net leases and joint-venture RIDEA structures.

Banks seek Congress’ help to block fintech path to ‘industrial’ charters  (Roll Call), Rated: A

A bank industry group is lobbying Congress to block financial technology firms, such as online lender Social Finance Inc. and payment processor Square Inc., from obtaining an obscure form of a state bank charter that would let them operate nationally with little federal supervision.

The Independent Community Bankers of America last week distributed a policy paper around Washington calling for an immediate moratorium on providing federal deposit insurance to industrial loan companies, or ILCs, which are chartered by only a few states — most notably Utah.

Form S-3 Senmiao Technology Ltd (Street Insider), Rated: A

Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.

Debt Securities. We may offer debt securities, which may be secured or unsecured, senior, senior subordinated or subordinated, may be guaranteed by our subsidiaries, and may be convertible into shares of our common stock. We may issue debt securities separately or together with, upon conversion of or in exchange for other securities. It is likely that any debt securities issued will not be issued under an indenture.

Figure Technologies, Inc. Expands Leadership Team as It Builds Out Financial Empowerment and Wealth Offerings (PR Newswire), Rated: B

Figure Technologies, Inc., a fintech company in both the home equity and blockchain space, announces that John Sweeney has joined the company as the head of Wealth and Asset Management, along with Dr. Michael Dooley, who joined as chief economist. These hires reflect Figure’s commitment to empowering consumers and building out products to improve their financial well-being.

LendPro Hires Belinda Kelton as Vice President of Sales (LendPro Email), Rated: B

LendPro LLC, a provider of Lending-as-a-Service (LaaS) products and platforms for retailers, has hired retail industry veteran Belinda Kelton as its Vice President of Sales, the company announced today. Kelton is the latest of many new hires for the fast-growing fintech company, which recently moved to a new location to accommodate new staff members and provide the best service possible to customers.

Corporate Counsel, Commercial (Go In House), Rated: B

Affirm is looking for a business-minded Corporate Counsel, Commercial with broad expertise in complex commercial transactions. This role will report to Affirm’s Associate General Counsel.
United Kingdom

Funding Circle fund sees higher impairments continue to drag returns (AltFi), Rated: AAA

The Funding Circle SME Income fund saw just a marginally positive performance in February with Net Asset Value growth of just 0.05 per cent as impairments continued to hurt performance.

Impairments reduced NAV returns by 0.7 per cent in February, said analysts at Liberum, in line with the average monthly impairment rate of recent months.

Revolut Is Testing the Limits of Finance (Bloomberg), Rated: AAA

Storonsky is getting a taste of the scrutiny that lies ahead as he tries to upend the world of banking with Revolut, his 3-1/2 year-old startup. The U.K.’s financial regulator is examining why the digital bank last summer temporarily turned off a system designed to automatically block suspicious transactions.

It was valued at $1.7 billion at its last fundraising and now has over 4 million customers after new accounts tripled in 2018. That’s about three times more than the two lenders combined and the same number of customers as foreign-exchange business TransferWise, which is four years older.

Source: Innovate Finance

CrowdProperty launches equity sale after increasing loan book by £100m (PlaceTech), Rated: AAA

The specialist peer-to-peer lender has secured £100m of loan capital as it launches a public crowdfunding campaign, already oversubscribed, that values the business at more than £15m.

Having raised £100m from an unnamed “major institution”, CrowdProperty will use the funds to expand the number of property projects it backs over the next 12-24 months.

OakNorth reports £33.9m profit for 2018 and commits to donating 1% of all future net profit to charitable causes and social entrepreneurship (OakNorth Email), Rated: A

IFISA Guide: SME loans (P2P Finance News), Rated: A

Ablrate’s IFISA offers returns ranging between 10 and 15 per cent, enabling investors to fund asset-backed loans to UK businesses.

ArchOver’s IFISA enables investors to fund secured business loans and enjoy tax-free returns of up to 10 per cent per year.

MoneyThing’s IFISA is one of the highest-paying tax wrappers that invests in secured business loans, offering annual returns of up to  13 per cent.

Assetz Capital

Returns vary depending on the account, going from 4.1 per cent to 6.25 per cent on its auto-invest products, and up to 15.5 per cent with its manual lending option.

Funding Circle

The minimum investment in this flexible IFISA is £1,000.

LendingCrowd

The Growth and Income ISAs automatically spread investors’ money across a range of loans and have variable target rates of six per cent and 5.6 per cent, respectively.

Specialist lender funding will be the key issue for 2019 – LendInvest (Mortgage Solutions), Rated: A

The situation is a big reminder to lenders that it is crucial to concentrate on building a diverse range of funding sources, rather than just one single route.

It’s something that we have put a lot of work into at LendInvest, as it allows us to lend with confidence, knowing that the funds we have promised to a borrower will be there.

The firm sent out an email on 24 January 2019 suggesting that recipients should have a “stockpile ready” as some believe Brexit “could affect the amount of food available,” while offering a £5 promotional discount on a loan.

Why investors are fleeing the ‘fear and greed’ of stock markets for peer-to-peer loans (The Telegraph), Rated: A

Investors are ditching the stock market in favour of bundled loans sold by fledgling platforms that are yet to be tested by a financial crisis.

The top 20 UK places for high net worth earners (Citywire), Rated: B

Nearly two fifths of the UK’s top earners now live in London, according to research from peer to peer lending platform easyMoney.

China/Hong Kong

China’s Online Lender Dianrong Blames Chinese Regime for its Woes (NTD), Rated: AAA

Dianrong, one of China’s biggest peer-to-peer (P2P) lenders, is laying off staff and shutting stores. The company blamed the Chinese regime for its troubles and said the absence of clear-cut policies was proving to be a heavy burden.

Dianrong shut down 60 of its 90 offline stores and laid off an estimated 2,000 employees, Reuters reported in early March.

Pintec’s Stock Rises on Steady Results During Quarter of IPO (Capital Watch), Rated: A

Pintec Technology Holdings Ltd. (Nasdaq: PT) gained 15 cents in trading by midday after reporting a slight increase in revenue and narrowed losses for the fourth quarter.

The Beijing-based tech platform facilitating financial services said on Wednesday that its revenue in the three months through December was $32.9 million, 2 percent higher year-over-year. Its net loss was $1.2 million, a 10 percent decrease from the same period of 2017. Loss per share was 1 cent.

For the full year, Pintec reported revenue of $153.1 million, 85 percent higher from the preceding 12 months, and profit of $1.1 million in contrast to a loss in 2017.

KKR Raising First Asia Real Estate Fund, Targeting $ 1.5 Billion (U.S. News), Rated: A

Global investment powerhouse KKR & Co Inc is raising its first Asia-focused real estate fund, targeting $1.5 billion as it looks to deepen its real estate portfolio in the region, said people with knowledge of the matter.

Investment firms raised $18.6 billion in 26 Asia-focused real estate funds last year, the highest since 2008, according to data provider Preqin. KKR’s U.S.-based rival Blackstone Group raised the region’s biggest real estate fund last year at $7.1 billion.

China and distressed debt top DB’s hedge funds tastes test (City Wire Selector), Rated: A

Alternative investors are increasingly drawn to Asian hedge funds and distressed strategies, according to the latest Alternative Investment Survey from Deutsche Bank.

The 2019 survey canvassed the views of 425 asset allocators running $1.7 trillion of hedge fund assets in 28 countries.

European Union

Finnest and Invesdor Merge to Combine Debt and Equity Operations in Europe (Crowdfund Insider), Rated: AAA

Finnest, an Austria based Fintech that provides debt capital to small and medium-sized firms, has announced a planned merger with Finland based Invesdor Oy. The newly formed company will see the combination of a leading Nordic equity crowdfunding platform and a top online lender serving the DACH region (Deutschland, Austria, Switzerland). The two companies will now be able to offer a full stack of debt and equity services and investments across Northern Europe as well as more numerous options for investors.

Invesdor claims over 50,000 registered users as well as a MiFID II license for 28 European countries – the first crowdfunding platform to receive approval. Invesdor reports investors, both institutional and individual, from over 150 different countries. Invesdor currently offers a unique financing portfolio in the market, from equity to loans and bonds to IPOs.

Bitbond to Work with BitGo for Germany’s First Security Token Offering (Bitbond), Rated: A

Bitbond has launched Germany’s first Security Token Offering with a BaFin approved Prospectus and will be using  BitGo’s Business Wallet. The STO has a hard cap of EUR 100 million (~USD 113 million) and will conclude in May. Thousands of investors have already joined to take advantage of early bird discounts.

The STO marks a significant milestone for the crypto asset industry, not only because it has an approved prospectus, but also because it offers tokenized debt with a predetermined maturity. Bitbond Token (BB1) holders will receive quarterly and annual payments for 10 years, after which Bitbond will buy back the token at its original value of EUR 1 per token.

India

Top 5 sectors that need upskilling: How to stay relevant in age of disruption? (Indian Express), Rated: A

The banking sector is witnessing a massive growth owing to the launch of connected products and services, business innovation and the rise of the middle class along with the emergence of new fintech areas of mobile payments, digital wallets and P2P lending. Technologies such as chatbots, blockchains and automation through robotics powered by AI are transforming the sector.

CRYPTO EXCHANGE COINDCX RAISES SEED FUNDING FROM BAIN CAPITAL VENTURES (Coin News Span), Rated: B

Bengaluru-based client leasing startup RentoMojo has raised $10 Mn serial B funding from Bain Capital Ventures and Renaud Laplanche.

Asia

Look out for 2019’s top 7 lending startups (e27), Rated: AAA

As of 2019, there are still 2.45 billion underbanked and unbanked people in the world. The more innovative lending companies there are, the faster this market will be covered and served.

October.eu (formerly Lendix) is an innovative, easy-to-use, and intuitive peer-to-peer platform for lending and investing.

The Dharma team works on a platform that lets businesses build lending products on the Ethereum blockchain.

The governing idea of Kabbage is that funding shouldn’t be complicated for businesses. So, the company makes an effort to provide entrepreneurs with up to US$250,000 in loans for which you can allegedly qualify for in just 10 minutes or at most, a day.

Founded in 2014, TurnKey Lender has already become the market’s leading intelligent all-in-one lending automation platform.

The name SoFi comes from social finance and it’s another great example of a successful peer-to-peer lending operation. Founded in 2011, the company is already a huge market player with US$30 billion worth of funded loans and 600 thousand members.

Affirm goes a different route than most alternative lenders. The idea behind it is enabling in-house financing for retail businesses. So, the store’s customers get an instant loan with zero to 30 per cent interest rates.

With quite a unique approach, Lendio offers small business an opportunity to get services and credit products from lenders with the best conditions. It’s a marketplace with more than 75 lenders on board.

Vietnam is the region’s fintech hub (The ASEAN Post), Rated: AAA

Vietnam’s strong economic growth in recent years has led to the flourishing of the nation’s digital economy. The country’s economy in 2017 was deemed to be one of the best performing in the region. Its economy saw a 6.8 percent increase in gross domestic product (GDP) – higher than the government’s initial target of 6.7 percent – making it one of the fastest growing economies in Southeast Asia.

Vietnam currently has 54 percent of its population on the internet and the number is expected to grow further in the coming years.

Data from Vietnam Briefing shows that 39,580 start-ups entered the Vietnamese market in just the first four months of 2017, a 14 percent increase from the first quarter of 2016. Within the start-up scene, the fintech sector has become the most attractive for investments, receiving US$129 million in 2016.

Travelstop Targets Fintech SMEs with Business Travel Management Platform (Fintech News), Rated: A

Co-founded by former Expedia employees, Singapore-based Travelstop is a modern, artificial intelligence (AI) powered SaaS platform that simplifies business travel, automates expense reporting for businesses in Asia, and offers insights to business owners.

The platform is quickly gaining traction from the region’s startups and fintech community, helping small and medium-sized enterprises (SMEs) and high-growth organizations including Funding Societies, Fintech News Network, RedDoorz, S P Jain School of Global Management and Dot Property better to manage their business travels.

Asia has the largest share of mobile internet traffic, with 61% of its population using mobile devices to go online.

How Ovo Has Grown to be Indonesia’s Largest Digital Payments Platform (Entrepreneur), Rated: A

After online stores, Indonesia’s leading digital payments platform Ovo has been making strides into offline stores, increasing the number of merchants that accept the payment method.

OVO has reportedly acquired local peer-to-peer lending company Taralite, a move that will pave the way for OVO to branch out into the lending business which is seen to be a potential profit-generator for the company.

TurnKey Lender Opens a New Office in Kuala Lumpur (Digital Journal), Rated: A

TurnKey Lender, a provider of intelligent lending automation, decision management, and risk mitigation solutions, announces the opening of a new office in the capital of Malaysia, Kuala Lumpur. Its main goal will be to physically represent TurnKey Lender and support the company’s operations in Asia.

With internet penetration at 85.7% in 2018, the country is perfectly positioned for the rapid growth of alternative lending initiatives in areas like peer-to-peer lending and in-house financing.

Golden Gate Ventures ties up with Hanwha to invest in Asian startups (SDF-KH), Rated: B

Golden Gate and Hanwha will focus on startups that are raising fund for ‘Series B’ stage.

Singapore-based Golden Gate Ventures confirmed on Tuesday that it has teamed up with South Korea-based Hanwha Asset Management to invest in Southeast Asian technology startups.

Authors:

George Popescu
Allen Taylor

The post Thursday March 21 2019, Weekly News Digest appeared first on Lending Times.

Thursday October 18 2018, Daily News Digest

Major US Banks Active Mobile Banking Users

News Comments Today’s main news: Upgrade to debut ABS bond. KBRA assigns preliminary ratings to Upgrade Receivables Trust 2018-1. Funding Circle launches free iPad incentive. China’s P2P lending is in trouble. Today’s main analysis: State laws put installment loan borrowers at risk. (A MUST-READ) Today’s thought-provoking articles: SoFi’s data science head on machine learning and non-traditional lending. LendingClub’s Bill Walsh says […]

Major US Banks Active Mobile Banking Users

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Online lender Upgrade prepares debut ABS bond  (International Financing Review) Rated: AAA

Upgrade, an online lending company started by former LendingClub founder Renaud Laplanche, is looking to sell a debut asset-backed bond deal, four people with knowledge of the deal told IFR on Wednesday.

KBRA Assigns Preliminary Ratings to Upgrade Receivables Trust 2018-1 (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Upgrade Receivables Trust 2018-1 (“UPGR 2018-1”). This is a $286.390 million consumer loan ABS transaction that is expected to close October 30, 2018.

This transaction represents the first ABS securitization collateralized by unsecured consumer loans originated through the online marketplace lending platform operated by Upgrade, Inc. (“Upgrade”) and the first from the Upgrade Receivables Trust (“UPGR”) shelf. Upgrade Receivables Trust 2018-1 (“UPGR 2018-1” or the “Issuer”) will issue four classes of notes totaling $286.390 million. The proceeds from the sale of the notes will be used to purchase the loans and related rights from Upgrade Receivables Depositor LLC (the “Depositor”), who purchased the loans from the unaffiliated transferors, to fund the reserve account and to pay transaction expenses. The Depositor will in turn sell the loans to the Issuer.

Preliminary Ratings Assigned: Upgrade Receivables Trust 2018-1

Class Preliminary Rating Expected Initial Class Principal
A A (sf) $187,308,000
B BBB (sf) $32,569,000
C BB (sf) $28,440,000
D B (sf) $38,073,000

SoFi’s data science head: Opening the funnel to non-traditional borrowers with machine learning (Thomson Reuters) Rated: AAA

ANSWERS: What are some of the issues in machine learning that you are working to solve for right now?

WU: I think where machine learning plays the biggest role is in datasets that have extremely high numbers of dimensions, very low signal ratios and very sparsely populated values. For example, people in lending use data from the bureau. There are millions and millions of rows, there are thousands and thousands of columns. Each specific field has very little to no signal and each person has very few things that are actually populated. Those are opportunities where machine learning, particularly deep learning, has an extremely high potential.

ANSWERS: How can machine learning assist with lending decisions, and how does one keep bias from creeping into that?

WU: When making a decision on creditworthiness, machine learning can help lenders look at metrics beyond FICO and income. Whether it’s adding more information to traditional metrics versus determining creditworthiness of applicants without a full credit history, machine learning can drive tighter risk management while assessing borrower’s creditworthiness where traditional models cannot.

LendingClub’s Bill Walsh: ‘At its core, marketing is a data problem’ (Tearsheet) Rated: AAA

Today’s marketer on the hot seat is Bill Walsh, LendingClub’s general manager and head of marketing for personal loans. Bill brings an engineer’s approach to marketing. The MIT grad began his tenure at Lending Club in an operations role, where rigorous problem solving was used to solve some of the biggest problems in the business. Now that he’s leading marketing on the consumer side, he brings a similar approach.

We talk about how LendingClub defines marketing and approaches channels. We pay particular attention to a recent TV campaign you might have seen over the summer of 2018. Measuring and responding to the signal is core to LendingClub’s approach and in the course of this four week broadcast campaign, Bill’s team iterated twice. This puts ad agencies on notice — this is the new data-driven fintech marketing world.

Mobile banking is reaching a saturation point in the US (Business Insider) Rated: AAA

JPMorgan Chase counted32.5 million active mobile banking customers in Q3 2018 — an 11% year-over-year (YoY) increase from 29.3 million in Q3 2017.

That’s up from the 31.7 million active mobile customers in Q2 2018, but is also a slight deceleration from the 12% YoY growth in Q3 2017— following several quarters of decelerating growth: Chase has been adding around 800,000 mobile users on a quarterly basis.

Wells Fargo counts 29 million total active digital customers — 22.5 million of which use mobile banking. This marks an 8% annual increase in mobile banking customers, but a 4% YoY increase in total digital customers, demonstrating that most of its new customers are coming from mobile channels.

Source: Business Insider

State Laws Put Installment Loan Borrowers at Risk (PEW) Rated: AAA

Pew’s analysis found that although these lenders’ prices are lower than those charged by payday lenders and the monthly payments are usually affordable, major weaknesses in state laws lead to practices that obscure the true cost of borrowing and put customers at financial risk. Among the key findings:

  • Monthly payments are usually affordable, with approximately 85 percent of loans having installments that consume 5 percent or less of borrowers’ monthly income.Previous research shows that monthly payments of this size that are amortized—that is, the amount owed is reduced—fit into typical borrowers’ budgets and create a pathway out of debt.
  • Prices are far lower than those for payday and auto title loans. For example, borrowing $500 for several months from a consumer finance company typically is three to four times less expensive than using credit from payday, auto title, or similar lenders.
  • Installment lending can enable both lenders and borrowers to benefit. If borrowers repay as scheduled, they can get out of debt within a manageable period and at a reasonable cost, and lenders can earn a profit. This differs dramatically from the payday and auto title loan markets, in which lender profitability hinges on unaffordable payments that drive frequent reborrowing. However, to realize this potential, states would need to address substantial weaknesses in laws that lead to problems in installment loan markets.
  • State laws allow two harmful practices in the installment lending market: the sale of ancillary products, particularly credit insurance but also some club memberships (see Key Terms below), and the charging of origination or acquisition fees. Some costs, such as nonrefundable origination fees, are paid every time consumers refinance loans, raising the cost of credit for customers who repay early or refinance.
    Source: PEW

Read the full report here.

Bank Of America’s Zelle Boosts P2P Transactions 138 Pct In Q3 (PYMNTS) Rated: A

Bank of America cut expenses and reduced its provision for credit losses as the financial institution also beat analysts’ revenue and earnings expectations. Bank of America, in reporting its latest financials on Monday, also said that Zelle P2P payment transactions increased 138 percent year over year.

Revenue increased about 4 percent year over year, hitting $22.8 billion, higher than analyst expectations of $22.67 billion. The financial institution reported earnings per share of 66 cents, which represents a 43 percent year-over-year increase and is above analyst expectationsof 62 cents. Net income grew 32 percent to $7.2 billion.

Bank of America said its provision for credit losses decreased $118 million during the third quarter of 2018, to $716 million. “The net reserve release was $216 million, driven by continued improvement in consumer real estate and energy portfolios,” the bank said in its Q3 financial report.

As digital banks proliferate, so do risks (American Banker) Rated: A

Facing intense deposit competition from online-only banks such as Ally Financial and Goldman Sachs’ Marcus, many traditional banks are looking to turbocharge their deposit gathering by launching — or considering launching — digital banks of their own.

PNC Financial Services Group is the latest big bank to join the fray, recently rolling out a digital-only bank in markets where it lacks a brick-and-mortar presence. Like JPMorgan Chase, Citizens Financial Group and a number of other regional and community banks, PNC is counting on its digital bank to attract low-cost deposits to fuel loan growth while also helping it reach new demographic groups.

Early results have been promising — PNC CEO William Demchak said Friday that he’s been “pleasantly surprised” by the response in the Kansas City, Mo., market — but with the space becoming so crowded, industry watchers are beginning to question if the U.S. marketplace can reasonably support so many new digital banks.

Source: American Banker

Outside Financial Launches to Help Consumers Save up to $ 3,000 on Auto Loan Packages (PR Newswire) Rated: A

Outside Financial, an independent auto loan marketplace, launched its consumer-first platform today to bring transparency to auto finance. The company is the first to offer full auto loan packages outside of the dealership, which can save customers $1,000 to $3,000, along with time and hassle. Outside Financial also arranges refinances for existing borrowers.

In 2017, Americans racked up $568.6 billion in auto loans1, yet 60 percent of buyers don’t know they can bring their own financing to the dealership. The company’s new Outside Financial (OF) Markup Index* reveals that, on average, new car buyers are charged $1,717 in hidden markups when arranging their loans through a dealer.

Individual Investors Can Now One-Click Invest in Commercial Real Estate with CrowdStreet’s “Blended Portfolio” Offering (Benzinga) Rated: A

CrowdStreet, which operates the largest and most diversified online marketplace for direct equity investment in U.S. commercial real estate, is now raising $25 million for the company’s first CrowdStreet Blended Portfolio investment offering. To provide individual investors and registered investment advisors another way to diversify their investments with commercial real estate, the company plans a series of diversified and specialty portfolio investment options that will collectively raise and invest up to $170 million.

The first CrowdStreet Blended Portfolio’s proceeds will be deployed across 30-50 pre-vetted projects on the CrowdStreet marketplace, representing a broad range of commercial and multifamily asset types, risk profiles and geographies.

Credible.com Unveils First Truly Consumer-Centric Mortgage Marketplace (Business Wire) Rated: A

Credible.com, the leading online loan marketplace, announces the launch of its first-of-its-kind mortgage marketplace. Credible.com is the only mortgage marketplace that provides actual rates from top lenders in 3 minutes (without affecting a borrower’s credit score), and a streamlined digital origination process. The platform is designed to save borrowers frustration, time and money.

The Credible.com mortgage marketplace builds on the success of the company’s marketplaces for student loans, student loan refinancing, and personal loans, which have facilitated more than $1.6 billion in loans to date. The first product offered through the mortgage marketplace is mortgage refinancing, which went live today in 20 states that collectively represent 65 percent of mortgage originations.

Talking Regulation at the Online Lending Policy Summit (Lend Academy) Rated: A

The big topic of the day was the OCC’s Special Purpose National Bank Charter also known as the Fintech Charter. The topic was laid out for the audience by the first keynote speaker, Grovetta Gardineer, the Senior Deputy Comptroller for Compliance and Community Affairs at the OCC. She talked about the history of the OCC going back to 1863, with the National Banking Act, when the dollar supplanted state currencies as the sole currency of the United States, a revolutionary idea back then. Ms. Gardineer reaffirmed the authority of the OCC to introduce a national fintech charter and talked about how companies should proceed if they are interested. While she would not comment on specifics she did say that the OCC is currently having preliminary conversations with fintech companies but no formal application has been received yet.

The new head of the CFPB’s Office of Innovation, Paul Watkins, talked about the importance of the regulatory sandbox concept. He was one of the architects of the Arizona fintech sandbox and he is bringing that knowledge with him to Washington. He talked about the two main tools to help facilitate innovation at the CFPB: their trial disclosure program and the no action letter.

How Dealstruck Arrived, “Disrupted,” and Died – A Cautionary Online Lending Tale (deBanked) Rated: A

A self-described member of the “lucky sperm club,” a not-even 30-years-old Senturia went on to successfully raise $30 million of investor capital to fund his business, enough to fuel his rise and price-shame his competitors for years. But it wouldn’t last, as he detailed in book, Unwound, about the behind-the-scenes chaos that ravaged Dealstruck until the company closed for good in late 2016.

AFR Wholesale announces partnership with Floify (Housingwire) Rated: B

AFR Wholesale and Floify shook hands on a partnership, and AFR will now use Floify’s point-of-sale technology.

AFR’s goal in partnering with Floify, a 2018 HW Tech100 winner, is to reduce origination time and increase broker productivity. According to the release, Floify’s POS platform can save up to 15 hours of processing time per loan.

This is only one of an ever-increasing number of companies partnering with software companies or developing their own tech solutions in hopes of increasing productivity and getting some breathing room in the margin department in this tough mortgage market.

iintoo Launches Principal-Protection Product for Retail Investors Supported by Insurance Provided by Everest (iintoo Email) Rated: B

Online Real Estate Investment Management Company iintoo Investments Ltd. (“iintoo”) launched Epiic (Equity Protection Investment Community), the first-of-its-kind real estate investment product that provides principal protection for private accredited investors. Supported by insurance provided by an affiliate of Everest Re Group, Ltd. (NYSE:RE), a leading international reinsurance and insurance organization with operations that span the globe, and a social community pool, Epiic offers two layers of protection for investors’ principal.

iintoo opens up access to real estate investments that were once exclusive to professional funders and high-net-worth individuals. Starting at $25,000, accredited investors can invest in ownership shares in projected high yield, premium real estate projects.  Each project undergoes a rigorous due-diligence and approval process provided by iintoo.  In order to assess the risk factors in real estate investing, iintoo also conducted a thorough analysis of the real estate market in the United States, taking into consideration all sectors in all 50 states over the past 30 years.

TRANSACT Tech San Francisco to Examine the Impact of Software Providers on the Payments Industry (PR Newswire) Rated: B

The Electronic Transactions Association (ETA) will bring together executives from leading banking, payments and FinTech companies on November 1, 2018 for TRANSACT Tech San Francisco at the Wells Fargo Connections Center. The event will explore how software services are changing the way key ecosystems players – processors, banks and hardware manufactures – serve merchants and channel partners.

The day-long conference will kick-off with a fireside chat with Secil Watson, Executive Vice President and Head of Digital Solutions for Business at Wells Fargo. “Customer expectations are changing rapidly, and pace of change in technology is accelerating.” said Watson. “Yet we still have cash and checks. What can we learn from today’s customer experiences to build a better payments ecosystem for tomorrow?

Finicity Partners with Freddie Mac to Provide Industry-Leading Automated Income and Asset Assessment Solution (Finicity Corp) Rated: B

Finicity, a leading provider of real-time financial data aggregation and insights, announced today it has been selected as a third-party service provider for the new Freddie MacLoan AdvisorSM automated income and asset assessment capabilities, which provide a faster, easier way for lenders to verify loan application data upfront. Finicity’s digital verification reports greatly improve efficiency and accuracy, while also providing a simpler, more pleasant borrower experience.

Freddie Mac announced its new income and asset assessment capabilities at the Mortgage Bankers Association Annual Convention & Expo earlier today. Finicity’s verification reports are integrated within Freddie Mac Loan Product Advisor®, the cornerstone of Loan Advisor Suite.  When the capability goes live later this quarter, asset verification will be generally available and income verification will be available as a limited release.

United Kingdom

Funding Circle launches ‘free iPad’ incentive (Peer2Peer Finance) Rated: AAA

LISTED peer-to-peer platform Funding Circle is enticing new investors by offering a free iPads. But there’s a catch – they have to add at least £30,000 to their Funding Circle accounts before 16 November.

The P2P platform is also offering a number of other cashback and ‘giftback’ incentives to lenders who invest lower amounts of money.

Investors who add £20,000 to their Funding Circle accounts will receive £200 in John Lewis vouchers, while those adding £15,000 will get an Amazon Echo.

LendInvest Update: Accelerates BTL Production Application Volume Thanks to Rate Reductions (Crowdfund Insider) Rated: A

UK-based online lender LendInvest announced last week it has reduced rates and product fees across its Buy-to-Let product range. According to LendInvest, the pay rate for its five year fixed rate product has dropped to 3.60%, with the ICR calculation at a pay rate of 3.60%. Meanwhile, product fees for all BTL mortgages on standard property and HMO cases have been reduced to 1%, with borrowers who prioritize leverage in mind.

The lending platform also reported that for a limited time, valuation fees have been reduced to £100 for all standard property cases. LendInvest will now cover the borrower’s legal fee scale costs for standard property, standard conveyance cases, where dual representation is selected.

You think it’s going to be easy challenging the big banks? Think again (The Times) Rated: A

here has never been a more opportune moment for the pack of digital upstarts looking to topple the institutions that dominate the financial industry. Rarely does a week go by when a big bank does not suffer an IT meltdown, spewing sensitive data into the ether or freezing customers out of their accounts.

A decade after the collapse of Lehman Brothers, public distaste for the high street banks remains at elevated levels. Two thirds of Britons do not trust big banks to act in the best interests of society, according to a recent YouGov poll. The advent of smartphones, meanwhile, has fundamentally altered consumers’ expectations of their relationship with service providers.

Amex brings SME financing to UK with ezbob (Banking Tech) Rated: A

American Express (Amex) has partnered with online financing platform ezbob to offer UK SMEs competitive access to finance.

Through this partnership, eligible Amex business clients will receive a referral to apply for up to £300,000 in finance from ezbob at a fixed annual interest rate from 3%.

Carlos Carriedo, senior vice-president of global commercial services at Amex, says: “We know agility is crucial for smaller businesses to help retain a competitive advantage but accessing the finance needed to react swiftly to changing customer demands, or seize an opportunity, can be a challenge.”

Amex customers taking out a loan with ezbob will also benefit from a 40,000 Membership Reward points offer, the company adds.

Connect for Intermediaries announces new panel (Mortage Strategy) Rated: A

Connect for Intermediaries has announced the launch of a new unsecured lending panel.

Comprising Funding Circle, iwoca, Whitoak and Fleximise, the panel will be open to all of Connect’s AR members, and Connect will be able to obtain terms on behalf of other brokers as referrals.

Loans from £5,000 to £250,000 for up to five years will be available from 1.5 per cent.

Connect sales director Kevin Thomson says: “We have seen an increased demand for unsecured loans for trading businesses, as increasingly, brokers are coming to us with business clients who are looking to ease cashflow or expand their businesses.

P2P Lending Investment Returns Outstrip Many Market Competitors (CL News) Rated: A

P2P lending arrived in the UK back in 2010 with the launch of Funding Circle. The idea was simple. In the wake of the financial crisis, banks were – and still are – paying abysmally low rates of interest to savers. P2P platforms allowed savers to collectively lend money to businesses and individuals, usually over relatively short periods of time. By cutting out the middleman (or to be more precise, banks and other traditional lenders), P2P lenders were able to offer competitive rates to borrowers and superior returns to investors.

The market has evolved over the years. AltFi – which provides specialist news for the alternative investment industry along with a range of analytics services – says the market is growing rapidly. For instance, in 2015, P2P lending platforms brokered around £1.1bn in loans. In the first half of 2018 alone, the figure was £3bn. Separate figures from the Peer to Peer Finance Association reveal that its members have, to date, originated loans to a value of £9bn.

11:FS Foundry’s launch brings digital to banks (Banking Tech) Rated: A

Consultancy firm 11:FS has launched 11:FS Foundry, an approach to delivering digital banking services through a modular core banking architecture. It kicks off with the partnership with DNB, Norway’s financial services group, which has also become an investment partner.

DNB has invested £3 million for a 5% stake in 11:FS Foundry. This investment represents the long-term commitment between 11:FS and DNB to change how banks deliver digital banking services, the two companies say.

Watchdog warns payday lenders over customer complaints (Financial Times) Rated: A

The UK’s Financial Conduct Authority encouraged payday lenders to proactively compensate past customers; the industry has come under a lot of heat in recent months after a surge of complaints; companies say a lot of these complaints are bogus and a pushed by professional claims management companies (CMCs)

Wonga was forced to shut down a few months ago after they saw a significant rise in complaints, complaints now cost companies more than $725 per complaint after the first 25 complaints; the rise in complaints has come after new rules were put in place in 2015 where high cost lenders we ordered to drop fees and adhere to stricter standards; a new survey by Kantar TNS showed that 60 percent of payday loan customers still pay more than anticipated.

Fintech offers fresh ways to finance an MBA (Financial Times) Rated: A

According to David Simpson, admissions director at London Business School, MBA students spend just as much time trying to find funding as they do trying to find the right program; while struggling to find his own financing Prodigy Finance CEO Cameron Stevens though there had to be a better way so he started Prodigy with two former classmates.

The company is now growing fast by offering a service few others do, while also collecting credit records from across the globe; “You have talented people who have proved their potential in receiving offers to business school,” says Mr Stevens to the FT. “The only barrier for them is funding, because the banks are still incredibly localised, as they were in the 1500s.”

Arbuthnot Banking Group PLC Third Quarter Trading Update (Arbuthnot Group) Rated: A

Customer Lending balances are 28% higher than at the same time in the prior year and originations of new loans are 18% higher. However, as previously stated, the Group remains committed to maintaining its discipline in both credit underwriting decisions and return on capital when extending credit.

The newly launched Asset Based Lending division continues to develop ahead of the original business plan and has a strong pipeline of new opportunities. The Specialist Finance division has now completed the hiring of its core team of six employees and is currently setting up its operations based in Manchester. It is expected that it will write its first deals toward the end of the fourth quarter or early 2019.

OakNorth appoints form PRA director to board (Finextra) Rated: B

OakNorth – the bank for entrepreneurs, by entrepreneurs – today announces the appointment of Martin Stewart, the former Director of Banks, Building Societies & Credit Unions at the Bank of England, as an Independent Adviser on its advisory board.

Stewart joined the Bank of England in April 2013 and spent five and a half years there. In addition to supervising UK banks, building societies, credit unions and new entrants into UK banking, he was a Member of the PRA’s Executive Team responsible for PRA regulatory policy. His regulatory experience also includes spending three years at the FSA between 2010-2013, where he was a member of the leadership team that defined and implemented the UK’s post financial crisis prudential regulatory regime that now underpins the work of the Prudential Regulation Authority. In addition to this, he has almost two decades’ board-level experience having been Managing Director of a group of European subsidiary companies of the IFG Group PLC for almost four years, and as Chairman of the International Credit Union Regulators’ Network for the last six years.
China

China’s P2P Lending Sector Is in Serious Trouble (Money Makers) Rated: AAA

P2P lending has been lucrative in China with little constraining regulation. The industry is worth as much as $120 billion and has been high-risk, but high return.

Chinese regulators have been clamping down on debt and financial risk, the number of loan defaults is rising, capital investments are running out of the sector, and Chinese citizens are losing money. And getting pretty angry about it.

In July 2018, 114 P2P lending platforms in China were shut down or had funds suspended, without warning, by China’s regulators over liquidity concerns. Since June 2018, 243 online P2P lending platforms have gone bust.

Several Chinese Peer-to-Peer Lending Companies Have Submitted Self-Inspection Reports (Capital Watch) Rated: A

With hundreds of peer-to-peer (P2P) lending platforms having collapsed at the beginning of this year, different district-level financial bureaus recently rolled out a tougher reform on all P2P platforms’ risk compliance to ease a growing panic among investors.

This industry reform involves three major steps. First, all platforms have to complete a P2P Compliance Self-Inspection Report and submit it to the bureau by the end of October. Then, companies will be inspected by its local Internet Finance Industry Association, a non-state association. This will be followed by verification of inspection results by district-level Municipal Bureau of Financial Work with field inspection and a possible final check by higher-level government organizations.

New York-listed Hexindai Inc. (Nasdaq: HX) and PPDAI Group Inc. (NYSE: PPDF) both announced that they have completed and submitted the report.

European Union

A risky investment (Euro Weekly News) Rated: AAA

MANY UK nationals living part of the year in Spain, or visiting often, might spend months here but still retain tax residency in their home country.

This means those looking for investment opportunities can still take advantage of UK tax efficient products such as Finance ISAs – ones which use peer-to-peer lending to offer high rates of return. They may be nothing new but one legal justice firm has upped the ante offering returns of up to 8 per cent a year.

International

Advantages of P2B platforms in lending to SMEs (Lendit Conference Blog) Rated: AAA

In the EU and Australia, SMEs comprise 99.8% of all the firms and employ about 67% of the workforce. To tell the truth, SMEs might be rightfully called the economy, not just the backbone of it. A few other facts that follow are paradoxical. 2 years ago, International Finance Corporation (under World Bank) presented statistics that the gap for underfinanced SMEs around the world stood at 2.6 trillion $. One might expect, the situation got better in recent years with the global economy picking up and showing better and better numbers. On the contrary, most recent statistics from the same institution shows that the gap has widened to 5.2 trillion $.

P2P platforms make lending process global

P2B platforms can connect a business on one side of the world with an investor from another side of the world, and with a third party providing a service from yet another part of the world. All applications for loans can be made online, processed, assessed and the decision made within a matter of a few hours. Compare it to a similar process with the banks and the difference, that of speed and efficiency becomes clear. As an asset (loan) is put on the platform, investors can start investing within a matter of seconds. In such a way, a local business, somewhere in Eastern Europe can get funds from someone (or institutional investors) in UK or Germany and be able to use the collected amount for business operations within a couple of days.

4 developments that will shape the future of fintech (Business Matters) Rated: A

Within the past decade, we’ve seen the landscape of fintech move from a few disruptive start-ups to an industry that’s changing the landscape of business altogether. Consumers are becoming more and more accepting of technology as part of their day-to-day finance, a factor that has stretched the services sector and levelled the playing field with traditional institutions.

For instance, there has been a monumental shift in the way that consumers are managing their money. PwC’s Global Fintech Survey 2017 found that 84% of incumbent financial services providers believed their customers were already making payments with fintech companies, 68% thought customers were conducting fund transfers, and 60% said their clients were using fintech for their personal finances.

Quona Capital leads $ 5 million round for Brazilian small business lender BizCapital (Impact Alpha) Rated: A

Brazilian fintech firm BizCapital launched operations in January to help Brazil’s small business owners secure capital necessary for the day-to-day and growth needs of their businesses. Quona Capital, a financial tech investment firm that spun out of Accion, has led the company’s R$20 million ($5 million) investment round. Two existing investors, Monashees and Chromo Invest, both based in Brazil, also participated.

Roughly 70% of Brazil’s micro and small business owners are shut out of mainstream bank lending and instead resort to taking personal loans, which can carry interest rates as high as 200%. BizCapital offers short-term loans for up to R$150,000 ($40,000) at annual rates in the mid-double digits. The company hasn’t disclosed the size of its loan book but says it’s received more than 100,000 credit requests and serves customers in all 26 Brazilian states.

Australia

Global corporate lending platform, Trade Ledger has warned the Federal Government of substantial weaknesses in its proposed Open Banking implementation plan, when compared to the global best-practice model.

These primarily include the lack of an independent implementation and governance organisation, and limited consumer and small to medium-sized enterprise representation in the development of industry standards.

According to Trade Ledger, these omissions “risk a scaremongering campaign around data security that could stall progress and reduce the scope of the changes, leaving the door open for overseas financial markets to take over our local markets in the new era of Open Banking”.

India

UIDAI Asks Non-Banking Fintech Companies To Stop Aadhaar-Based Services (Inc 42) Rated: AAA

After getting telecom companies to submit their exit plans from Aadhaar-based services, the Unique Identification Authority of India (UIDAI), the Aadhaar regulatory body, has now asked digital payment companies to stop offering any sort of Aadhaar-based service on their platforms.

In a letter, the UIDAI also directed digital payment companies to submit confirmation of closure of Aadhaar-related authentication and their alternative plans to exit from the Aadhaar-based ecosystem.

According to reports, the UIDAI has sent the letter only to non-banking companies such as PayPoint, Eko India Financial Services, and Oxigen Services, among others.

Citing unnamed sources, an ET report stated that banks and payment companies such as Paytm, which have obtained banking licences, have not received the notice.

Africa

Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account.

Now, a proliferation of lenders are using the same technology to extend credit to the banked and unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up.

This week, the finance ministry published a draft bill on financial regulation which covers digital lenders for the first time. A key aim is to ensure that providers treat retail customers fairly, it said.

Authors:

George Popescu
Allen Taylor

Monday August 13 2018, Daily News Digest

Reasons for Personal Loan Inquiries July 2018

News Comments Today’s main news: OnDeck CEO says online lending is the future of SMB lending. SALT Lending now in 35 states. LendInvest debuts exclusive 5-year fix product through buy-to-let club. Weidai files $100M IPO in New York. Wonga says $3M African loans are unaffected by UK woes. Today’s main analysis: LendingTree Personal Loan Offers Report for July 2018. […]

Reasons for Personal Loan Inquiries July 2018

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

OnDeck Capital CEO says online lending is the future for small businesses, talks strong earnings (Proactive Investors) Rated: AAA

CEO Noah Breslow tells Proactive Investors the small business lending company has provided over US$9bln to small businesses, crossing the US$10bln mark this fall, saying online lending is the future for small businesses and consumers.

U.S. Cryptocurrency-Backed Lending Platform Now Available in 35 States After Passing Stringent Regulations (Crypto Disrupt) Rated: AAA

The cryptocurrency-backed lending firm, SALT, has released details that it is now operational across 35 states in lieu of passing crypto regulations and will be expanding its network to 20 new locations.

SALT is based in Colorado and is one of the few companies that allows borrowers to leverage their held crypto as collateral for loans. As more people than ever before hold crypto, it is important that cryptocurrency-backed lending firms pass regulatory checks to offer more competition to potential crypto borrowers in the safest possible manner.

SALT is planning to move into 20 new states, which will include North Carolina, Oklahoma, Florida, and Virginia. Crypto users in all but 15 states can now leverage their crypto to receive personal cryptocurrency-backed lending packages.

Tesla and Spotify say public markets have major flaws. Do they have a point? (Quartz) Rated: AAA

According to two prominent executives this week, the stock market isn’t all that it’s cracked up to be. Initial public offerings are broken, according to Spotify CFO Barry McCarthy (paywall). Tesla CEO Elon Musk says stock investors are too focused on the short-term, and his threat to take the company private sent tradersbankersfans, and government watchdogs into a tizzy.

McCarthy and Musk aren’t alone in their worries. The number of IPOs and listed companies in the US is shrinking: There were an average of 310 public offerings annually from 1980 to 2000, according to an analysis by Jay Ritter, a finance professor at the University of Florida. The average has slipped to 108 since then.

A common complaint is that public markets are too demanding. It’s expensive to comply with regulations, and these days there’s ample private money available for companies to tap without all the hassles of dealing with analysts, short sellers, quarterly reporting, and the rest of it.

Source Quartz

LendingTree Personal Loan Offers Report – July 2018 (Lending Tree) Rated: AAA

Offered loan amounts are down about 3.5% for all borrowers, while offered APRs inched up. Rate and loan amount offers varied widely among consumers, depending on factors including, but not limited to, credit score, income, and current debt obligations.

The most common reasons for seeking a personal loan are credit card refinancing and debt consolidation. These two categories comprise 64% of all loan inquiries.

Source Lending Tree

WV ranked 24th in US for student loan debt (Herald Dispatch) Rated: B

West Virginia schools rank 24th in the nation for the amount of debt its students graduate with, with Marshall University coming in sixth out of the schools tallied in a recent LendEDU report.

By licensing data collected from the annual Peterson’s voluntary financial aid survey, LendEDU, an online loan marketplace, completed its annual Student Loan Debt by School by State Report, a comprehensive analysis of student loan debt statistics for over 1,000 colleges and universities throughout the United States.

The total outstanding student loan debt now stands at $1.52 trillion, making it the second largest form of consumer debt behind only mortgages.

Average individual student loan debt up $ 313 in 2017 (UPI) Rated: AAA

The average amount of individual student loan debt owned by U.S. college students increased by more than $300 in 2017, according to a study by LendEDU.

The New Jersey-based online loan marketplace’s annual Student Loan Debt by School by State Report found the average debt per borrower for the class of 2017 was $28,288, up $313 from $27,975 in 2016.

“Student loan debt in the U.S. continues to be an issue of the utmost importance. The total outstanding student loan debt now stands at to $1.52 trillion, making it the second largest form of consumer debt behind only mortgages,” LendEDU said Wednesday.

The annual report uses data from the Peterson’s financial aid survey, which collects responses from 1,080 four-year public and private institutions to determine average individual student loan debt figures and rank states and colleges in terms of debt per borrower.

Who’s Departed, Who’s Left and Who’s Leading Among Robo-Advisors (Think Advisor) Rated: A

The second quarter of 2018 was a busy one for robo-advisors. Hedgeable announced its impending closure, WorthFM became history and LearnVest notified customers it was discontinuing its planning and online investment services.

During the same quarter, US Bank and Fifth Third Bank launched their robo-advisor platforms and SoFi, a fintech lender with a robo product, introduced checking accounts with debit cards, further blurring the lines between banking and digital advice. And U.K.-based Wealth Wizards, an independent digital advisor with AI capabilities, is exploring a talking robo-advisor.

What you need to know on Wall Street today (Business Insider) Rated: A

The crypto bear market has been a blessing for this bitcoin trading firm’s booming new business

Genesis Global Trading, a crypto trading shop based in New York,launched a crypto lending unit, Genesis Capital, earlier this year.That business originated $30 million in crypto loans on Tuesday, its largest amount ever, according to chief executive officer Michael Moro. The company typically lends out around $2 million per day on average.

In a sense, it could be a bearish indicator for the market. Many of the people who are borrowing crypto from the firm are doing so in order to take a short position on a given coin.

What happens when the government stops doing its job? (The Washington Post) Rated: A

It took almost two years for two dozen officials at the Consumer Financial Protection Bureau to pull together a case against Golden Valley Lending. The online lender was making small short-term loans at interest rates as high as 950 percent, violating laws in at least 17 states that cap interest rates.  Last October, the agency finalized a rule to stop “payday debt traps” by requiring lenders to determine whether people can afford to repay their loans.

Yet a few months later, it unceremoniously dropped the case, telling a federal judge in Kansas that it would “continue to investigate the transactions that were at issue.” Golden Valley is still doing business; its Web site says: “Get the money you need. It’s easy!”

Mulvaney has all but halted the enforcement of certain government regulations. He stripped the bureau’s fair-lending unit of enforcement power and redefined it as an advocacy office.

RealtyShares Launches New Brand Identity and Online Learning Center (SC Now) Rated: A

RealtyShares announced today the launch of its new corporate brand identity and online learning center. The brand changes come at a time when the company is continuing its focus on the commercial middle market, commercial transaction values under $50 million.

As part of the rebrand, RealtyShares is launching a new online learning center where investors can learn more about diversifying investments and the role that commercial real estate can play in an investment portfolio. This learning center includes guided learning paths and educational articles created and curated by RealtyShares’ expert professionals. The content is designed to help investors with a range of investing experience better understand the risks and rewards of investing in commercial real estate.

Kirill Bensonoff: 5 ways real estate can be transformed with a blockchain approach (Augusta Free Press) Rated: A

The real estate market has seen steady growth the past few years, and is showing no signs of slowing down. The commercial real estate industry alone is expected to reach $414 billion in commercial transactions next year.

This isn’t the biggest news in the real estate industry though.

According to real estate and cryptocurrency expert, Kirill Bensonoff, the most significant growth for real estate in the next few years will be how blockchain technology is applied to the market.

U.S. Fintech Even Opens New East Coast Headquarters In North Carolina After Securing More Than $ 40 Million in Series B Funding (Crowdfund Insider) Rated: B

Holistic financial health platform Even announced on Friday it has opened its new office in Raleigh, North Carolina. This news follows the company securing $40 million through its Series B funding round. Founded in 2014, Even describes itself as a mission-driven technology company working to help Americans escape the paycheck-to-paycheck cycle.

Even also reported that its mobile apps instantly budget so that users know how much is “okay to spend,” safely address cash flow issues with Instapay (on-demand access to wages), and help employees automatically save money out of their paycheck before it ever hits their bank balance.

Buy The Block: First Black-Owned Real Estate Investment Platform Allows Communities to Fight Gentrification (Digital Journal) Rated: A

Buy the Block founder Lynn P and her team have struck gold in the hills of Colorado for a second time in as many years with the release of their new app now available on Android and iOS platform. This app will expand the already extensive number of BlockVestor enthusiasts that populate the first Black-female owned FINRA and SEC regulated real estate crowd investing platform in the United States. The addition of the new app will rapidly expand a brand that is on the cutting-edge in alternative financing. This unique and innovative platform allows many inner-city residents a never-before available opportunity to invest with their peers and their communities.

Lowe’s Ventures backs Moved, a startup that makes moving less stressful (Tech Crunch) Rated: A

Moving can also be expensive, so the company has announced a partnership with Affirm, where Affirm’s financing will allow you to break up the moving costs into monthly payments.

To be clear, Moved isn’t doing the moving itself — instead, it’s basically connecting you to a marketplace of movers and other service providers. Pittenger said the company is “very strict about the suppliers and the vendors” and will remove them if customers aren’t happy with their experience.

Moved is managing all of this through a real, human assistant who can help you figure out what you need, handle the scheduling and serve as a “consumer advocate” who ensures that you’re not getting ripped off.

Take a Crash Course in Student Housing Investments (US News) Rated: A

As the back-to-school season gets under way, you may be shopping around for new investments for your portfolio. Real estate is a solid diversification tool and student housing is an under-the-radar sector to consider this fall.

“The student housing real estate investment market is virtually untapped,” says Jay Morrison, CEO of the Tulsa Real Estate Fund. An aura of exclusivity surrounds student housing investments but it’s a sector that’s far from fully realized, “which means there’s plenty of room for opportunity for new investors in this market.”

As a smaller niche within the commercial real estate market, student housing has long been the domain of institutional investors and people with a high net worth.

United Kingdom

LendInvest Debuts Exclusive Five-Year Fix Product Through Buy to Let Club (Crowdfund Insider) Rated: AAA

Following the recent changes on its marketplace lending platform, UK-based LendInvest announced the launch of an exclusive five-year fix product through the lender’s Buy to Let Club. The lender reported that the product is Designed for landlords who wish to utilize a higher fee, lower interest rate loan, and allows the borrower to leverage their cash flow.

According to LendInvest, the five year fixed rate of 2.75% is available up to 75% LTV through the distributor, with a product fee of 4.99% which can be added to the loan. Affordability is then calculated at an Interest Cover Ratio (ICR) of 140% for higher rate taxpayers; 125% for limited companies and basic rate taxpayers, at an assessment rate of 4.19% against the total gross loan amount. The mortgage is available on loans up to £500,000 for purchase and remortgages, and suitable for standard property types and HMO’s.

Business funding options – what choices do you have? (Estate Agent Today) Rated: A

When you are starting up a new business, it is unlikely that you will already have enough capital to invest. Taking out a business loan is the best option as this will give you the chance to get set up.

But which loan type is best for your business idea?

Peer to Peer Lending

As banks are increasingly wary about giving out business loans, peer to peer lending has become a more popular method for matching people who wish to invest their money and those who need to borrow. Though this method can be quite expensive and may be risky, it is quite easy to raise substantial funds this way.

Crowdfunding

There are two types of crowdfunding: equity-based and reward-based. Equity-based crowdfunding is where people contribute money to receive equity in your business; reward-based crowdfunding is where people contribute money for a reward.

Competition from alternative lenders driving growth in business lending (London School of Business and Finance) Rated: A

Competition from alternative lenders is driving banks to boost lending amounts for businesses, according to Conrad Ford, Chief Executive of SME finance aggregator Funding Options.

Barclays and NatWest/Royal Bank of Scotland are among the banks that are boosting access to finance for SMEs.

Growing competition

Competition from alternative lenders is thought to have been the driving force behind Barclays’ decision to increase its lending amount to £100,000.

Commenting on the trend, Ford stated that there is growing competition in this sector, adding that Barclays is not the only bank that is taking action, with RBS/NatWest launching their Esme loans service, a digital lending platform that enables SMES to access unsecured loans of up to £150,000.

The pros and cons of alternative property investment and crowdfunding (Buy Association) Rated: A

With tax changes and stricter lending rules making it harder for some to finance a property purchase, investors are increasingly looking to navigate the challenges in the buy-to-let sector.

It’s why setting up a limited company through which to buy and operate rental properties is growing in popularity.

Peer to peer lending has exploded in popularity because it offers investors high interest rates paid over relatively short time periods.

There is obviously a level of risk involved – the property is used as security, and if house prices drop suddenly then you risk losing some capital. That’s why it’s important to consider the loan to value ratio (LTV) – for example, if this is 75%, the borrower can borrow three quarters of the value of their property. This means house prices would need to fall 25% before the investor made a loss.

China

How peer-to-peer lending turned middle-class Chinese dreamers into angry protesters (Quartz) Rated: AAA

In recent years, many in China’s middle classes poured their savings into peer-to-peer lending platforms, known as P2P for short, drawn in by promises of high returns. But amid a larger effort to curb financial risk to China’s economy, financial regulators tightened rules for these platforms, leading many of them to collapse without returning investor money. In Li’s case, the main stakeholders of Yonglibao, which he had put his money into, suddenly disappeared in mid-July (link in Chinese), he told the South China Morning Post. By the time its founders abandoned its offices, the platform had amassed a transaction volume of 7.6 billion yuan ($1.1 billion). The other protester told Quartz he had lost the equivalent of $50,000 on a platform called iqianjin.com—its name is Love Money, though it can also be understood as “Get Ahead” or “Money Coming.”

Both hoped a protest in Beijing would compel the government to help people recover their money from the dozens of P2P platforms that stopped allowing fund withdrawals last month. Instead, they were foiled by hundreds of uniformed police who locked down the area, patrolling corners near the offices of the central bank and securities regulators, and checking identity cards. More than 120 buses were brought to the area to take the stealth protesters away, according to a reporter with AFP.

Chinese Peer-to-Peer Lender Weidai Files to Raise Up to 0 Million in New York (Capital Watch) Rated: AAA

Hangzhou-based peer-to-peer lending platform Weidai, which translates as “micro-lending,” filed its preliminary prospectus Friday seeking to raise up to $100 million in an initial public offering in New York.

The proposed IPO size shrinked significantly since the company first announced its plans in April. According to Bloomberg citing sources, Weidai was previously planning to raise nearly $400 million.

Launched in 2011, the online micro-lending platform has attracted multiple high-profile investments, including a $159 million series C funding in 2016 led by Vision Knight Capital. Among other key investors were Chinese billionaire Chen Tianqiao’s Shanda Group and Shenzhen-listed software developer Hakim Unique Internet Co.

HK is running out of runway (The Edge Markets) Rated: AAA

BRACE, brace. Hong Kong’s initial public offering (IPO) take-off is going to come to a screeching halt.

Source: The Edge Markets

Ascletis Pharma Inc, a Hangzhou-based maker of HIV drugs, has slumped 20% since making its entrance at the end of July (1).

Even the online insurer that sparked a revival of Hong Kong’s IPO frenzy is in the red. ZhongAn Online P&C Insurance Co, a company backed by Internet behemoths Tencent Holdings Ltd and Alibaba Group Holding Ltd, surged on its debut in September, but now stands 42% below its price on listing.

Two-thirds of IPOs that raised more than US$1 billion in the two years ended July 2017 were below their offer prices after six months; three-quarters had dropped after a year, data compiled by Bloomberg show. Ironically, the cause of the pain can be traced partly to measures Hong Kong Exchanges & Clearing Ltd has taken to fight back against a US market that was luring away China’s new-economy stars.

Hexindai Further Strengthens Risk Control to Better Protect Investors (Crowdfund Insider) Rated: A

Hexindai (NASDAQ:HX), a China-based peer to peer lender, announced on Friday it has further strengthened its risk control system to better protect investors throughout the entire process of borrower acquisition, risk-based pricing, post-loan management, and default risk coverage through its new comprehensive, stable and efficient asset security system, HX-CORE. Hexindai reported it established the system based on advanced risk control technologies that leverage risk control models and enormous volumes of credit data from cooperating partners and business data accumulated by the online lending platform.

According to Hexindai, the risk-based pricing is conducted by the Company’s proprietary risk control system, called Hurricane, which was developed by the lender and operates in cooperation with a number of credit information organizations and third-party Big Data risk management companies.

Ning Tang, CEO of CreditEase, Shares Insight into P2P Lending in China (Crowdfun Insider) Rated: A

Ning Tang, founder and CEO of CreditEase – a huge Chinese Fintech that started as just a peer to peer lending platform, recently spoke to Bloomberg in Asia. CreditEase is also the majority shareholder of US listed online lender Yirendai (NYSE:YRD)

Tang provided an interesting update on the Chinese P2P sector as it has been going through a transformational process. In July alone, it has been reported that over 100 peer to peer lenders shut down in China as regulatory authorities tighten operational standards to curb rampant fraud. The actions are to ensure a robust and sustainable sector of online lending.

Tang shared that revenues have not been impacted much by the regulatory actions as CreditEase has become more diversified with inclusive finance, alternative asset management, and wealth management.

China reduces risks of peer-to-peer lending (CGTN) Rated: A

Chinese authorities are taking immediate actions to reduce risks in the peer-to-peer (P2P) lending business and better protect the interests of private investors.

The latest moves by Chinese financial regulators include urging leading internet platforms to undergo self-inspection and fix problems. They will also guide unqualified P2P lending platforms in exiting the market and dealing with their assets and debts in a market-oriented way based on legal principles.

European Union

Sweden’s Largest Loan Marketplace (Killer Startups) Rated: A

Thanks to rapid technological development around the world, it’s now possible for consumers to sidestep banks and other unnecessary intermediaries and secure private loans more efficiently.

One nation where this hasn’t been an issue is Sweden.  Look no further than Lendify – the country’s largest peer-to-peer lending platform – for proof.

“Lendify is a marketplace platform that connects borrowers with investors, without the involvement of banks or credit card companies,” said Erik Wikander, the company’s Founder.  “Some of Sweden’s foremost entrepreneurs are a big part of the platform – and we’ve been granted full approval from Finansinspektionen (the government’s financial regulation agency).”

Schwarmfinanzierung: Deloitte Study on “Crowdlending” in Germany says Banks Win (Crowdfund Insider) Rated: A

Deloitte Germany has published research on the crowdfunding sector and when it comes to comparing new forms of online capital formation and old banks – banks win. That is, at least in the eyes of the Deloitte research.

Deloitte states that when it comes to providing finance to medium sized firms, the fabled Mittelstand, these companies have “little interest” in using this new form of finance. Simply put, their relationships with banks is too strong of a bond.

The research published by Deloitte was done in partnership with EFAM (Europäisches Forschungsfeld für Angewandte Mittelstandsforschung) at the University of Bamberg, the document said that the threat to traditional banks by crowdfunding or crowdlending has not panned out. This more recent study follows a similar one back in 2015 which stated that crowdlending was relatively unknown among company executives. Three years later, their survey of 250 medium size German firms appears to indicate little has change.

International

CreditRiskMonitor Announces Licensing Agreement with DBRS (Credit Risk Monitor) Rated: AAA

CreditRiskMonitor (OTCQX: CRMZ) today announced a new licensing agreement with DBRS, an independent, privately-held, globally recognized credit agency. DBRS is the fourth-largest ratings agency globally, with ratings on more than 2,400 issuer families and nearly 50,000 securities worldwide.

CreditRiskMonitor has also invested in cutting-edge technologies to improve the accuracy of its predictive scoring methods. The FRISK® score, a measure of bankruptcy risk in public companies, uses crowdsourced click patterns of risk professionals who subscribe to CreditRiskMonitor’s service. The PAYCE score, used for private company financial risk assessment, is formulated with deep neural network technology, a type of artificial intelligence.

Can Blockchain Revolutionize The Traditional Lending System? (Crypto Coin News) Rated: A

With the introduction of blockchain technology, there have been lots of projects built on blockchain that have attempted to improve the traditional banking system. This brings us back to the question; Can blockchain revolutionize the traditional lending system? The answer is unequivocally YES since there are projects already on the brink of achieving this. Also, the below features of blockchain technology is naturally what is needed to revolutionize the traditional lending system.

Ways blockchain technology edge the traditional lending system:

  • Accessibility
  • Time
  • Removal of intermediaries
  • Reduced risk

Assuring the future of financial services (Network World) Rated: A

The financial services industry is experiencing a period of dramatic change as a result of the growth in digitalization and its effect on customer behavior. In an emerging landscape made up of cryptocurrencies, frictionless trading, and consolidated marketplace lending, traditional banks have found themselves shaken by the introduction of new, disruptive, digitally-native and mobile-first brands.

With a reputation as being somewhat conservative and slow to innovate, many financial service providers are now modernizing and improving their systems, transforming their new business models and technologies in an effort to stay ahead of the more agile challengers snapping at their heels.

However, while this digital transformation brings significant opportunities, implementing these new technologies also presents challenges.

Australia

Blockchain P2P lender secures $ 1.35m to fund growth (Mortgage Business) Rated: A

BLOCKLOAN, a new blockchain-based marketplace lender headquartered in Sydney, has announced that venture capital fund Xplora Capital has purchased $1.35 million in tokens, as it continues its mission to provide “transparent, easy to understand, [and] real-time” access to personal finance on a global scale at more competitive rates than the banks.

The fintech said that by using cryptocurrency-backed loans on a global P2P lending marketplace, it aims to eliminate the “unnecessary” fees associated with traditional lending, while promising end-to-end loan origination, matching and management through the use of pooled smart contracts and an automated KYC and credit risk engine.

India

Are Digital Platforms Transforming Lending Decisions? (Entrepreneur) Rated: AAA

The effects of technology and the disruptions technology make, manifests itself in clearly perceivable ways. This is very evident in many sectors – in a short span (just eighteen months after its release) Google Maps had knocked out GPS navigation device makers and Amazon and Taobao (Alibaba) have disrupted how consumers shop for goods by moving them to online from offline (O2O). Enterprises are worried about being Uber-ed or Airbnb-ed as new age companies are challenging traditional ways of doing business.

Banking and Lending space have also gone through an amazing level of rapid innovation and disruption starting at the turn on the new millennium. Traditional banking monoliths can no longer feel impervious as they were protected by a myriad of government regulations which used to make it hard for fintech start-ups. Fintech start-ups don’t have to deal with the large legacy systems that drag down big banks and are nimbler and more suited to adapt to global trends and changing regulations. Internet only online banks with meagre to no brick and mortar branch presence have come up and have shaken up the large banks by offering better interest rates for deposits and borrowing than traditional banks. As an added benefit with the ubiquity of eKYC systems and adoption by fintech industry, accounts can now be opened in a matter of minutes and can be ready to transact than days and after an insane amount of paperwork that needed to be filled in earlier days.

Africa

Wonga faced collapse in the UK, but says its 3 million loans in South Africa are unaffected (Business Insider) Rated: AAA

An emergency cash injection of R178 million has saved microlender Wonga from collapse – for now.

The UK firm, which has operations in South Africa, is currently facing immense pressure after the British authorities forced it to write off loans worth R4 billion because Wonga failed to properly check whether customers could afford them.

Wonga’s shareholders, two venture capital funds, have pledged the money to prop up Wonga.

Mobile banking inevitable but ATM card will remain useful (The New Times) Rated: A

During a wide-ranging interview with The New Times at a recent GSMA M360 Africa Series in Kigali, Mr Akinwale Goodluck, Head of the Global Mobile Operators’ organisation in sub-Saharan, sought to dispel the myth that mobile money would cannibalise banks.

He pointed to the fintech synergy between telcos and banks, noting how the significant numbers of people across the region are using “phones to do proper mobile banking.”

This is true, and perhaps more pronounced in East Africa. The sub-region has the largest mobile money market on the continent, accounting for 56.4 per cent of total users in sub-Saharan Africa, according to GSMA.

East Africa is, however, only leading the way, but not for long.

Asia

Indonesian startups Akseleran, Pomona confirm recent funding (Deal Street Asia) Rated: AAA

Two Indonesian startups have confirmed raising a funding round earlier this year.

P2P lending startup Akseleran said it raised a pre-Series A funding round of $1.85 million, while adtech startup Pomona said it secured an undisclosed Series A funding round.

P2P lending startup Akseleran raises $1.85 pre-Series A funding Peer-to-peer lending startup Akseleran has confirmed raising a $1.85-million pre-Series A funding round backed by a New York-based family office, the parent company of PT Bintraco Dharma Tbk and several angel investors.

According to a press release, the startup plans to use the fresh funding for expansion by recruiting representatives in a number of cities in Java such as Yogyakarta, Solo, Surabaya and Semarang. It also plans to step up its marketing campaigns through various advertisements.

Authors:

George Popescu
Allen Taylor

Wednesday August 8 2018, Daily News Digest

OnDeck KPIs

News Comments Today’s main news: SoFi reports $200M loss in Q2. OnDeck jumps 18%. LendingClub sees record net revenues in Q2. Alipay fined for regulation violations. Dianrong raises $40M. Even Financial raises $18.8M. Today’s main analysis: OnDeck’s Q2 2018 earnings presentation. Today’s thought-provoking articles: GreenSky, OnDeck, LendingClub earnings. Where did it go wrong for Wonga? OnDeck’s Q2 earnings presentation. United States SoFi reports […]

OnDeck KPIs

News Comments

United States

United Kingdom

China

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News Summary

United States

SoFi Is Said to Report Second-Quarter Loss of $ 200 Million (Bloomberg), Rated: AAA

Writedowns of underperforming loans drove Social Finance Inc. to a second-quarter adjusted loss of about $200 million, according to people familiar with the matter.

OnDeck jumps 18% after Q2 beat and raise (Seeking Alpha), Rated: A

OnDeck (NYSE:ONDK) surges 18% in early trading after reporting Q2 adjusted EPS that beat consensus by 8 cents and boosting year adjusted net income guidance to $30M-$36M.

OnDeck Reports Second Quarter 2018 Financial Results (Markets Insider), Rated: AAA

OnDeck today announced second quarter 2018 Net income of $5.8 million, Adjusted Net income of $10.0 million and Gross revenue of $95.6 million.

Source: OnDeck Earnings Presentation

Review of Financial Results for the Second Quarter of 2018

Net income was $5.8 million, or $0.07 per diluted share, improved from the Net loss of $1.5 million, or $0.02 per diluted share, in the year-ago period.

Adjusted Net income was $10.0 million, or $0.13 per diluted share, compared to Adjusted Net income of $4.7 million, or $0.06 per diluted share, in the year-ago period.

Unpaid Principal Balance grew 3% sequentially and 8% from a year ago to $1,027 million. Originations of $587 million were consistent with the prior quarter reflecting an increase in the number of loans funded and decrease in the average loan size.  Originations increased 26% from a year ago with growth in both term loans and lines of credit.

Gross revenue increased to $95.6 million, up 6% from the prior quarter and 10% from the year-ago quarter, driven by higher Interest income. The Effective Interest Yield was 36.1%, up from 35.6% in the prior quarter and 33.5% in the year-ago quarter, primarily reflecting increases in average loan pricing.

Source: OnDeck Earnings Presentation

Guidance for Full Year 2018

OnDeck increased its guidance for the full year ending December 31, 2018:

  • Gross revenue between $380 million and $386 million, up from between $372 million and $382 million,
  • Net income between $10 million and $16 million, up from between $0and $10 million, and
  • Adjusted Net income between $30 million and $36 million, up from between $18 million and $28 million.
Source: OnDeck Earnings Presentation

See OnDeck’s full Q2 2018 earnings presentation here.

Why On Deck Capital Stock Is Soaring Today (The Motley Fool), Rated: A

Shares of On Deck Capital (NYSE:ONDK) were soaring by nearly 25% as of 1 p.m. EDT on Tuesday as the company beat consensus earnings expectations in the second quarter and raised its outlook for the remainder of the year.

Lending Club: bob and weave (Financial Times), Rated: AAA

Now, the top-line numbers are improving. Second-quarter figures released after market close on Tuesday showed record net revenue, up 27 per cent from a year earlier at $177m, from record quarterly loan originations of $2.8bn.

On top of all that, there was a big writedown this quarter of an acquisition made four years ago, during an ill-fated push into supplying loans to medical patients. Over the first six months, total expenses came to $1.28 for every dollar of net revenue.

Roundup of Q2 2018 Earnings: GreenSky, OnDeck, LendingClub (Lend Academy), Rated: AAA

GreenSky went public just a few months ago on May 24, 2018. Their IPO was significant for a couple of reasons. One was the lack of US based fintech IPOs over the last few years and the second was that GreenSky is a wildly successful business. Last year they reported $139 million in net income on revenues of $326 million.

Source: Lend Academy

OnDeck reported net income of $5.8 million for the quarter with gross revenues of $95.6 million, up 10% year over and 6% from the previous quarter. Originations grew to $587 million, up 26% from the prior year period, but down slightly from the previous quarter. The company’s trend of increasing the number of loans funded and decreasing the average loan size continues.

Source: Lend Academy

CEO Scott Sanborn noted that LendingClub’s core business is firing on all cylinders with record revenue and originations. The company has seen a 50% increase in applications year over year. Originations were $2.8 billion, up 31% year over year and up from $2.3 billion in the previous quarter. For context, the company originated their last high water mark of $2.75 billion in the first quarter of 2016. Revenues came in at $177 million, up 27% year over year.

Source: Lend Academy

Even Financial raises $ 18.8 million from GreatPoint Ventures, Goldman Sachs and others (TechCrunch), Rated: AAA

Even Financial, a fintech startup that connects the disparate entities of the financial services industry, recently raised a $18.8 million Series A round led by GreatPoint Ventures with participation from Goldman Sachs, Canaan Partners, F-Prime Capital, Lerer Hippeau and others.

What’s missing from the OCC’s fintech charter (American Banker), Rated: A

Although the OCC emphasizes that it’s holding these special-purpose charters to standards equivalent to those demanded of national banks, this is only sort of true with regard to the named prudential requirements, and it looks to be completely incorrect on critical restrictions on competitive and financial risk. These omissions have significant consumer protection, safety and soundness and structural impacts. Absent egregious violations, a charter granted cannot be revoked. The OCC should be sure it isn’t a shadow-bank enabler before it hands out these high-powered charters.

Is the backing of the banks enough for Zelle to beat Venmo? (Marketplace.org), Rated: A

Rahul Chadha follows peer to peer mobile banking for the research organization eMarketer. His firm says Zelle will overtake Venmo this year.  Chadha spoke with Marketplace’s Lizzie O’Leary about the two payment systems.

US challenger banks: who’s who and what’s their tech (Banking Tech), Rated: A

BankMobile
A digital bank created by an established US-based financial services player Customers Bancorp. BankMobile opened for business in early 2015.

It caters mainly for students and offers a low-fee checking account with no monthly fees and no overdraft/non-sufficient funds (NSF) fees. It also provides personal loans.

Chime
Founded in 2014, Chime has raised over $100 million funding to date, values the business at around $500 million and has over one million accounts. It employs around 100 people.

Endeavor Bank
Endeavor Bank opened its doors for business in San Diego, California in January 2018, following an initial capital raise of $26.6 million and the backing of over 450 investors/owners. It is a brand new bank, with no merger legacy.

Finn
Finn is a digital bank account for smartphones created by JP Morgan Chase.

GoBank
GoBank was launched in 2013 by Green Dot Corporation, which claims it to be “the first bank account designed from scratch to be opened and used on a mobile device”.

Iam Money
Iam Money has its HQ in Chicago and an office in San Francisco. It also has two offices outside the US, in Dublin and London.

It has secured $3 million of funding, and plans to have $20 million when it launches.

Marathon International Bank
A start-up bank for the Ethiopian American community, based in the Washington DC area. Its founders are Tekalign Gedamu, a retired economist and former MD of the Development Bank of Ethiopia, and Tesfaye Biftu.

Marcus
An online platform launched by Goldman Sachs – named after Marcus Goldman, one of the firm’s founders – offering no-fee personal loans and high-yield savings to consumers.

Moven
Launched in 2011 by Brett King, Moven describes itself as “the world’s first real-time mobile money tool”. It is a digital bank account with a mobile app.

N26
A challenger bank from Germany, now working on its US presence, including obtaining a banking licence. It opened early access to users in the US in October 2017 and has an office in New York with eight staff.

PurePoint Financial
PurePoint Financial was launched in early 2017 by MUFG Union Bank. It is a “hybrid digital bank” offering savings accounts and certificates of deposit (CDs).

Revolut
European banking challenger Revolut opened early access to users in the US in September 2017. It says it aims “to clean up the American banking system”. It provides digital banking services to consumers and businesses.

Simple
Digital banking service Simple was founded in 2009 in Portland, Oregon. It describes itself “a tech company, not a bank”.

In early 2014, it was acquired by BBVA Compass for $117 million.

SoFi

In early 2017, it raised another $500 million, and spent $100 million (in stock) on Zenbanx, a mobile banking start-up. Zenbanx offered a mobile account in the US and Canada that lets people save, send and spend money in multiple currencies. This deal demonstrated SoFi’s interest in branching into other financial services, with a wealth management tool in beta at the time of the acquisition.

Stash

In early 2018, Stash raised $37.5 million in Series D funding for product expansion, and shortly afterwards teamed with Green Dot Corporation and its subsidiary bank, Green Dot Bank, to launch mobile-first banking services (underpinned by Green Dot’s Banking-as-a-Service platform).

Studio Bank
In 2017, Tennessee-based Studio Bank filed an application to become Nashville’s “first newly chartered de novo bank in nearly a decade”.

Varo Money
San Francisco-based mobile banking service Varo Money was founded in 2015. It applied for a national bank charter and federal deposit insurance in mid-2017, to form Varo Bank.

Treasury urges mortgage sector to embrace digital tech (National Mortgage News), Rated: A

The Treasury Department’s recent report on how to regulate nonbanks drew praise not just from tech startups but also from mortgage industry insiders.

In addition to recommendations for a new federal fintech charter and that regulators pull back from payday lending rules, the report contained a section that might be music to a mortgage banker’s ears, including support for the industry’s automation efforts and another call to soften the use of the False Claims Act against lenders.

Blend Launches Insurance Agency (Finovate), Rated: A

Mortgagetech company Blend is venturing into insurance. The San Francisco-based company launched Blend Insurance Agency, an extension of its digital mortgage platform that offers borrowers a range of options for homeowners insurance.

RealtyMogul Sells Four Real Estate Properties on Behalf of Digital Investors (Citizen Tribune), Rated: B

The first property is a 1,242-unit self-storage facility in Fayetteville, NC. It was acquired in December 2013 and sold in January 2018. It was acquired for $6,750,000 and sold for $9,645,000, representing a 43% increase in capital value from acquisition.

The second property is a 40,000-square foot office building in Tamarac, FL. It was acquired in May 2016 and sold in February 2018. It was acquired for $4,150,000 and sold for $4,900,000, representing an 18% increase in capital value from acquisition.

The third property is a 72-unit multifamily apartment building in Ogden, KS. It was acquired in July 2013 and sold in April 2018. It was acquired for $4,000,000 and sold for $4,450,000, representing an 11% increase in capital value from acquisition.

The fourth property is a 208-unit multifamily apartment building in Euless, TX. It was acquired in February 2015 and sold in May 2018. It was acquired for $12,375,000 and sold for $20,900,000 after a value-add renovation program, representing a 69% increase in capital value from acquisition.

Zillow gets into the mortgage business, acquires Mortgage Lenders of America (TechCrunch), Rated: B

Zillow, the publicly traded real estate portal and lead generation service, has acquired Mortgage Lenders of America. This is Zillow’s first move into originating mortgages.

DriveWealth and Bambu Launch Robo Platform for Registered Investment Advisors (BusinessWire), Rated: A

DriveWealth Holdings, Inc. (“DriveWealth”), a fintech company providing brokers, digital advisors and mobile online financial services companies seamless access to the U.S. securities market, and Bambu, a global provider of robo-advisory technology, today announced the launch of a white-label, end-to-end robo-advisory platform solution for the wealth management industry.

Arizona’s Regulatory Sandbox Is Open for Play (The National Law Review), Rated: B

To be considered for admission, applicants must complete the nine-page application and pay a $500 application fee.  Each application must be for an innovative financial product or service as defined by the enabling legislation.

United Kingdom

RateSetter: FCA marketing restrictions are “disproportionate” (P2P Finance News), Rated: AAA

RATESETTER has hit back at proposed marketing restrictions for peer-to-peer lenders, stating that they are “disproportionate” and “clunky”.

Where did it all go wrong for Wonga? (The Guardian), Rated: AAA

Just when things were meant to be getting better for Wonga, it emerged at the weekend that the payday lender’s investors had to rescue it with a £10m capital injection.

The emergency fundraising is the latest episode in Wonga’s rapid rise and fall. Just six years after the company was touted for a flotation that would have valued it at more than $1bn (£770m), it is reported to be worth just $30m.

Regulation didn’t wipe out Wonga – losing its reputation did (City A.M.), Rated: A

WHEN PAYDAY LENDER Wonga launched in 2007, it was tipped to become a £1bn success story. Today, the company is worth just £23m and has only managed to avoid insolvency thanks to a last-minute £10m boost from investors. So what went wrong?

Rothschild’s Augmentum receives £3.5m Zopa boost (Citywire), Rated: A

Augmentum Fintech (AUGM), the venture capital fund spun off from RIT Capital Partners (RCP) earlier this year, has received a £3.5 million boost from the revaluation of peer-to-peer lender Zopa.

LendInvest makes a series of changes to BTL product (Bridging and Commercial), Rated: A

The specialist lender has removed its requirement for a debenture or floating charge on limited company applications.

It has also reduced its ICR assessment rate to 5% across all products with the exception of the five-year fixed interest product, which remains at 4.19%.

Why brokers should be allowed to speak to decision makers (Bridging and Commercial), Rated: A

Roy Armitage, head of credit at LendInvest (pictured above), is clear that, for a specialist lender, a good working dialogue between the underwriters and the brokers placing the business is crucial.

Participate in the Cambridge Centre for Alternative Finance Research Study (Lend Academy), Rated: B

They are winding up their largest survey ever right now. In the past they have produced multiple reports targeting the various regions around the world including: the United Kingdom, Europe, the Americas, Asia and Africa. This year they are combining everything into one big study.

If you have not participated in the survey yet time is running out (while the survey says it closes on July 22nd, they have extended the deadline for another week or so). We need every platform in this country and around the region to participate. To learn more you can read more about this comprehensive piece  in 

China

China’s Central Bank Fines Alipay (PYMNTS), Rated: AAA

Alipay, a payment affiliate of Alibaba, has been hit with a $601,846 fine by the Shanghai head office for the People’s Bank of China.

According to a report in Reuters, citing the central bank, the fine was for payment services regulations violations. The regulator didn’t provide any other details.

Dianrong pockets $ 40 million funding amid mounting P2P defaults in China (Technode), Rated: AAA

Chinese P2P lending platform Dianrong announced that it has raised $40 million of funding from Dalian Financial Investment Group Co. Ltd. The current round will increase the company’s total funds raised to date to over $500 million. Its previous investors include big titles such as Standard Chartered, GIC Private Limited, Singapore’s sovereign wealth fund, CMIG Leasing, Simone Investment Managers, etc.

China’s P2P lending meltdown (CNBC), Rated: A

China’s P2P lending meltdown from CNBC.

International

Prime Trust to Enable Real Estate Syndicators & Securities Issuers to Accept Funds in Bitcoin & Ethereum (Crowdfund Insider), Rated: A

Prime Trust, a blockchain driven trust company, announced on Monday it has launched a new technology that enables real estate syndicators and securities issuers to accept funds from investors in the form of Bitcoin and Ethereum, frictionlessly and with zero crypto-market risks to the syndicator or issuer. According to Prime Trust, the technology enables holders of these virtual currencies to invest in real estate, crowdfunding and other private and public securities offerings without having to go through the cumbersome and often confusing process of liquidating tokens and then wiring funds in USD to an escrow account at Prime Trust.

TransUnion Partners with EXL to Create Turnkey Current Expected Credit Loss (CECL) Solution (MarketWatch), Rated: B

TransUnion TRU, +0.56% announced today it is partnering with global technology and analytics company EXL EXLS, +0.93% to create a seamless technology solution for lenders to comply with the new Current Expected Credit Loss (CECL) accounting rule. Information about the new accounting rule will be highlighted during TransUnion’s webinar, “Major Hurdles to Overcome to be CECL-Ready,” scheduled for 1 p.m. CDT on August 15.

Australia

Financial advice institutions to refund over $ 800 million (Business News Australia), Rated: AAA

As the revelations from the Royal Commission continue to pour in, the Australian Securities and Investment Commission (ASIC) has revealed that, in total, Australian financial advice institutions will refund customers over $800 million in reparations over fees for no service (FFNS) programs.

Australian challenger banks: who’s who (and what’s their tech) (Banking Tech), Rated: A

86 400

Launched in June 2018, the bank is led by former ANZ Japan CEO, Robert Bell, and ex-Cuscal Payments CIO Brian Parker. Joining as incoming chairman is Anthony Thomson, co-founder and former chairman of Atom Bank and Metro Bank.

Judo Capital

For its tech, it uses a variety of different vendors. Unifii’s Business Transformation Platform is used for its technical infrastructure. For its small business lending platform, it will use one from Realtime Computing, based in Perth, Australia.

Pelikin

Digital banking start-up Pelikin aims to reshape the way people save, send and spend their money in Australia and while travelling abroad. The company’s slogan is “spend like a local”. The founder is Sam Brown.

UBank

Unveiled in 2008 and developed and supported by National Australia Bank (NAB). It operates under NAB’s banking licence, and offers home loans, online savings accounts, and term deposit accounts. UBank has more than 400,000 customers.

Volt Bank

Sydney-based Volt Bank was given Australia’s first new restricted banking licence and is now working towards becoming a fully licensed bank.

Xinja

The neobank emerged from the shadows to unveil its plans for a mobile-only digital bank in 2017. It will have no bricks and mortar branches.

MENA

Visa Invests In Israeli Start-up Behalf (RTT News), Rated: AAA

Visa, Inc. (V) on Tuesday announced an investment and partnership with Israeli start-up, Behalf, to support small business growth through easy-to-access capital and financing.

Authors:

George Popescu
Allen Taylor