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

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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 May 23 2019, Weekly News Digest

young credit card delinquents

News Comments Today’s main news: DBRS assigns provisional ratings to SoFi Consumer Loan Program 2019-3 Trust. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2019-3. Funding Circle seeds shareholder input on wind-down plans for investment trust. TransferWise valuation doubles to $3.5B. Today’s main analysis: High income, super prime borrowers take bigger share of […]

The post Thursday May 23 2019, Weekly News Digest appeared first on Lending Times.

young credit card delinquents

News Comments

United States

United Kingdom

European Union

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News Summary

United States

DBRS Assigns Provisional Ratings to SoFi Consumer Loan Program 2019-3 Trust (DBRS Email), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes (collectively, the Notes) to be issued by SoFi Consumer Loan Program 2019-3 Trust (SCLP 2019-3):

— $420,000,000 Class A Notes at AAA (sf)
— $31,100,000 Class B Notes at AA (sf)
— $62,500,000 Class C Notes at A (sf)
— $35,600,000 Class D Notes at BBB (sf)

View the full report here.

KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2019-3 (Yahoo! Finance), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Prosper Marketplace Issuance Trust 2019-3 (PMIT 2019-3). This is a $380.99 million consumer loan ABS transaction.

Class Rating Initial Class Principal
A A- (sf) $270,750,000
B BBB- (sf) $51,470,000
C BB- (sf) $39,720,000
D B- (sf) $19,050,000

Millennial DQs on the rise; GreenSky earnings; OCC on a fix for Madden? (PeerIQ), Rated: AAA

US consumer debt rose by 0.9% QoQ in 1Q to $13.7 Tn.

Source: Bloomberg, PeerIQ

Mixed FinTech Earnings

FinTech issuers saw growth in revenues and loans. Pace of loan growth weakened slightly as originations fell at Enova and grew by less than 10% YoY at OnDeck and OneMain. Stock price performance post earnings was mixed. Enova saw its stock price increase by 18% post earnings while OnDeck’s stock price dropped by 16%.

Source: Bloomberg, PeerIQ

High Income and Super Prime Borrowers Taking Bigger Share of Personal Loans on LendingTree Marketplace (Lending Tree), Rated: AAA

Over the past 10 years, the amount of outstanding personal loan debt has increased by 75%.

Key findings

  • The share of personal loan inquiries from those with incomes over $108,000 increased by 77% between the second quarter of 2017 and the first quarter of 2019, while the share of inquiries from people earning over $84,000 increased by 65%.
  • The share of personal loan inquiries from super prime borrowers (740 and higher) increased by 47% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime and super prime borrowers (680 and higher) rose by 36%.
  • The share of personal loans closed by borrowers with incomes over $108,000 on the LendingTree marketplace increased by 38% between the second quarter of 2017 and the first quarter of 2019, and the share of borrowers earning over $84,000 increased by 26%.
  • The share of closed personal loans from super prime borrowers (740 and higher) increased by 37% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime borrowers (680 and higher) rose by 19%.
  • Borrowers with incomes up to $24,000 decreased their share of closed loans by 22%, and those with incomes up to $48,000 decreased their share by 17%.
  • The share of loans closed by borrowers with scores below 560 increased by 28%, but the share of closed loans from borrowers with scores between 560 and 619 dropped by 24%.
  • The share of inquiries from people with incomes up to $24,000 dropped by 27% during the same period, while inquires from those with incomes up to $48,000 dropped by 16%.
  • The share of loan inquiries by borrowers with scores below 560 decreased by 12%, and the share of closed loans from borrowers with scores below 620 decreased by 9.2%.

For example, in the SoFi Consumer Loan Program 2017-3 LLC, securities show that the average gross income of borrowers as of May 2017, was $141,780, with an average FICO score of 731, and an average VantageScore of 682. The most recent offering, reported in February 2019, showed borrowers had an average income of $151,144, an average 753 FICO score, and a 713 VantageScore.

Job Loss and Medical Expenses Leading Causes of Bad Credit (Yahoo! Finance), Rated: AAA

Job loss and medical expenses are the leading factors causing Americans’ credit scores to drop, according to new research by Elevate’s Center for the New Middle Class (CNMC).

According to the new report, 55% of respondents cited job loss or reduction in work hours as the reason why their credit score dipped below 700. Nearly a quarter (24%) cited medical bills as the primary cause. Following these leading factors, a variety of typical, seemingly innocuous expenses follow, including repairing a car (11%), leaving home for the first time (6%), and putting a child through college (5%).

Non-prime consumers are 86% more likely to experience multiple factors that negatively affect their credit score compared to just one. For example, of the 23% who mention a medical reason, about three-quarters (75%) also experienced an income drop, severely complicating their ability to manage and cover medical expenses.

Americans Use Short-Term Loans to Pay Off Debt (Lexington Law), Rated: A

American debt is at an all-time high. How did we manage to dig ourselves into a steep $13 trillion hole? Credit card debt alone accounts for $1 trillion of this debt, with the average balance over $6,000 per capita.

  • 33% of Americans are going into debt to pay off debt
  • Generation X is most likely to incur short-term debt to pay down long-term debt
  • Women who use debt to make other debt payments tend to do so multiple times

Bernardo Martinez of Funding Circle USA (Lend Academy), Rated: A

In this podcast you will learn:

  • The knowledge that Bernardo brought with him from PayPal.
  • What he has learned in his first year on the job at Funding Circle.
  • The range of terms for their small business loans.
  • The types of investors they have on their platform today.
  • How and why 72% of their customers came to Funding Circle first.
  • How their offering compares to what is offered at banks today.
  • Who Bernardo sees as their biggest competitors.
  • How they view the SBA and their loan guarantee program.
  • How the LendingClub partnership came together.
  • Why no other online platform has reached significant scale in term loans for small business.
  • How they expanding their business into Canada.
  • Who they are hiring for their new Denver office.
  • How they are approaching their relationships with regulators in DC these days.
  • How they helped get SB-1235 passed in California.
  • How Funding Circle is monitoring their risk as it pertains to the economic cycle.
  • What is most exciting for Bernardo today at Funding Circle.

How a Silicon Valley startup is trying to rebrand payday loans (Vox), Rated: AAA

Once every few weeks, Myra Haq withdraws $100 or so from Earnin, an app that lets people borrow small sums of money.

The app lets her withdraw up to $100 a day, and never more than what she actually makes in a pay period, and then withdraws the money from her checking account once her direct deposit hits.

Unsurprisingly, payday lenders typically target low-income people — a 2013 Pew report found that 58 percent of people who use payday loans have trouble meeting monthly expenses at least half the time and usually borrow to deal with “persistent cash shortfalls rather than temporary emergencies.”

The average American household with student debt owes almost $48,000, and experts believe that student loan debt has held millennials back from major life milestones like marriage, homeownership, and having children.

How One Company Wants to Reduce or Even Eliminate Your Unpaid Medical Bills (Forbes), Rated: A

Relying on personal savings or insurance may not even be enough to pay off expensive medical bills. As a result, .

Earnin invited some community members to try HealthAid and was able to find savings for about 90% of people.

In one case, Earnin was able to get a patient’s $48,000 bill fully forgiven.

Figure Technologies loan platform secures $ 1B financing facility (CoinGeek), Rated: A

Figure Technologies looks to be profiting from increased interest in the cryptocurrency industry. Specifically, in a press release dated May 9, it was announced that the company had secured a $1 billion line of credit on the Provenance.io blockchain. The agreement also involves two other companies, Jefferies and WSFS Institutional Services, which will provide the line of credit.

LendKey’s Vince Passione on partnering with banks and credit unions and the future of lending as a service (Tearsheet), Rated: A

Vince joins us on the show to talk about his partnership model and the challenges and opportunities of working alongside banks and credit unions, which have deployed more than $2 billion in lending capital on the digital platform.

Small-business fintech launches lending platform for banks (American Banker), Rated: A

Spurred by bank interest, small-business lending platform Biz2Credit has unveiled a software-as-a-service version of its loan management, servicing and risk analytics product.

After HSBC and New York-based Popular Bank contracted with Biz2Credit to use the software, the company decided to launch the platform for all banks to use.

At a cramped desk on the 22nd floor of a downtown Manhattan office building, Gary Roth spotted a looming disaster.

An urban planner with two master’s degrees, Mr. Roth had a new job in 2010 analyzing taxi policy for the New York City government. But almost immediately, he noticed something disturbing: The price of a taxi medallion — the permit that lets a driver own a cab — had soared to nearly $700,000 from $200,000. In order to buy medallions, drivers were taking out loans they could not afford.

Prodigy Finance Aims to Bridge Healthcare Gap with New Loan Offering (University Business), Rated: A

Prodigy Finance today announces it will be supporting international students pursuing Master of Public Health (MPH) and Master of Science in Public Health (MSPH) degrees, Master of Science in Nursing (MSN) degrees, as well as those enrolling in Advanced Standing Dental programs and Select Certificate Dentistry programs in the U.S.

Crypto Lending Startup BlockFi Slashing Interest Rates on Ether Deposits (CoinDesk), Rated: A

Cryptocurrency lending startup BlockFi is almost halving the interest rates it offers on ether (ETH) deposits, while some bitcoin (BTC) rates will increase slightly.

From June 1, customers with 25–100 ETH balances in a BlockFi Interest Account (BIA) will see the interest rate drop from the current 6.2 percent annual percentage yield (APY) to 3.25 percent, the startup announced Tuesday. Those holding over 100 ETH balances will earn just 0.2 percent APY.

Some BTC balances, on the other hand, will see a slight interest rate increase – up to 2.15 percent from the current 2 percent – for deposits of over 25 BTC. Those holding 0.5–25 BTC will continue to earn 6.2 percent APY, BlockFi said.

Find the Right Loan Among 300+ Lending Partners for Credit Card Consolidation and More (CardRates), Rated: A

In a Nutshell: LoanStart helps consumers in search of a loan find a lender that suits their funding needs within just five minutes after submitting a simple, fee-free loan request form. Working securely with more than 300 trusted lending partners, including conveniently located storefront providers, the service makes finding a suitable lender easy. In today’s connected world where loan options abound, LoanStart cuts through the clutter to connect consumers in need of funds with lenders willing to provide financing.

Maxex Closes Series B Funding (FinSMEs), Rated: A

Maxex, LLC, an Atlanta, GA-based residential mortgage loan exchange, closed a Series B funding round of undisclosed amount.

CFPB Sues Debt-Collection Agency Over Deception Allegations (PYMNTS), Rated: A

The Consumer Financial Protection Bureau (CFPB) said Friday (May 17) that it has filed a lawsuit in federal court against a debt-collection agency that, the agency said, violated the Fair Debt Collection Practices Act.

The lawsuit targets Forster & Garbus, LLP, a debt-collection law firm based in New York.

Plaid gives digital banks and fintech a new tool to bypass traditional finance (CNBC), Rated: A

Start-up Plaid, recently valued at $2.7 billion, already connects bank accounts to fintech apps like Venmo, Robinhood, Coinbase and Acorns. It announced “Plaid Direct” on Wednesday, which lets users more easily connect to newer digital banks like Chime.

Capital Markets Veteran Joins PeerStreet to Manage Institutional Sales (BusinessWire), Rated: A

PeerStreet, a marketplace for investing in real estate backed loans, has announced the appointment of Deepa Salastekar as the Vice President of Institutional Sales. Ms. Salastekar joins PeerStreet to expand the company’s relationship base of institutional partners across all investment types available through PeerStreet.

Dharma now supports peer-to-peer lending in USDC to attract mainstream investors to DeFi (The Block Crypto), Rated: B

Defi startup Dharma announced Wednesday that it will start to support peer-to-peer lending of USDC, in a push to engage mainstream investors.

United Kingdom

Funding Circle investment trust asks shareholders to approve wind-down plans (P2P Finance News), Rated: AAA

FUNDING Circle is set to begin a managed wind-down of its dedicated investment trust, the Funding Circle SME Income Fund (FCIF), once it gets the green light from shareholders.

The FTSE 250-listed peer-to-peer business lender said last month that shareholders had backed plans to stop investing in new assets and begin the process of returning capital to investors.

Funding Circle Sets Hard Limit To Incentive Pay For Senior Executives (Morningstar), Rated: A

Funding Circle Holdings PLC clarified its director pay policy Wednesday following “feedback from shareholder advisory bodies”.

The small and medium enterprise loan platform said the amount granted in each year for a three year period under the company’s long-term incentive plan to can now no longer exceed GBP2.0 million and GBP1.1 million for the company’s chief executive and chief financial officer, respectively.

Span A Higher Than Span B for Funding Circle Sme Income Fund Limited (FCIF.L) (Williams Business Review), Rated: B

After a recent indicator scan, we have noted that Span A is currently higher than Span B for shares of Funding Circle Sme Income Fund Limited (FCIF.L). Traders may be paying close attention as this signal may indicate a possible bullish move.

TransferWise doubles its valuation to $ 3.5bn (Fintech Futures), Rated: AAA

UK-based international payments fintech TransferWise has doubled its value to $3.5 billion after raising $292 million in secondary funding, Jane Connolly writes.

Call for ‘credit curfew’ to help late-night borrowers (The Times), Rated: A

Banning borrowers from accessing high-cost credit websites between 11pm and 7am would ease the numbers of people spiralling into debt as activity peaks during these hours, according to researchers at Newcastle University.

Monzo hits 2m customers, adding 1m in eight months (AltFi), Rated: A

Monzo has hit 2 million current account customers in just two years since getting a banking license, and just eight months after it hit 1 million accounts.

It launched its current accounts less than 18 months ago with customers having spent £10.7bn through Monzo so far.

Arbuthnot Specialist Finance reveals offering (Bridging and Commercial), Rated: A

Arbuthnot Latham & Co has officially launched its specialist finance division.

Arbuthnot Specialist Finance will offer short-term residential finance up to 70% of market value (MV), with rates from 0.65% per month.

For this product, it will offer loans between £30,000–£3m-plus.

For commercial properties, it will offer up to 65% of MV, including interest and fees (up to 85% of the 90-day MV, or 95% of the purchase price, whichever is the lower), with rates available from 0.75%.

New peer-to-peer lender targets 7.5% return with education loans (Your Money), Rated: A

Lendwise plans to offer borrowers loans of up to £100,000, with interest rates ranging from 7.5% to 12%. Pricing will be based on a range of factors, which the peer-to-peer lender said go beyond the applicant’s financial profile and credit record. They include the specific postgraduate or professional qualification course they are taking, the length of study and the repayment period.

Finastra’s open cloud platform drives collaboration and innovation in financial services (Fintech Finance), Rated: A

Today ahead of its FusionONE developer conference, co-hosted with Microsoft, Finastra unveiled the latest developments to its FusionFabric.cloudopen platform for innovation.

The 61 new open APIs (and more than 200 Endpoints) span many of Finastra’s solutions, including retail and corporate banking (both enterprise and North American community markets), consumer lending and mortgage, payments and treasury and capital markets. These are now available in the FusionFabric.cloud API catalog for developers to harness in building financial services applications. Some of these powerful APIs are already enabling:

China

A fintech revenue surge helped Tencent smash quarterly expectations (Business Insider), Rated: AAA

Tencent posted record quarterly profits and smashed market expectations in Q1 2019, driven largely by surges in its fintech and cloud revenue, per Reuters.

Fintech and business services is now Tencent’s second largest division, responsible for a quarter of its revenue. This was the first time the tech giant broke out earnings for the unit, which brought in revenue of Rmb21.79bn ($3.2 billion), a 44% year-over-year (YoY) spike. Key in driving this growth is its payments wallet for WeChat, whose 1.11 billion users make it the largest social media platform in China, as well as its insurance services, which include a 20% stake in Aviva Hong Kong, and its cloud computing service.

Tencent’s online advertising grew 25% YoY, compared with 55% YoY in the same period last year, suggesting that China’s slowing economy and continued trade tensions with the US are hitting the firm.

Source: Business Insider Intelligence

DBS Bank Expects a Boost in Chinese P2P Lending Market from the Greater Bay Area (LearnBonds), Rated: A

Greater Bay Area could be the key to reviving the struggling P2P lending market in China, according to DBS Bank.

The Singaporean bank estimates that P2P lending will experience a 17% annual growth rate by 2030.

European Union

Identity technology and Dublin’s draw for fintech firms post-Brexit (Forbes), Rated: AAA

According to 

1 in 10 European banks to vanish by 2023 (AltFi), Rated: A

Bumper banking profits disguise an underlying weakness in traditional banks, as their per customer income has tumbled over the past decade.

That’s the finding of a report by consultants A.T. Kearney, which found data across 92 European banks revealed income per client had fallen 11% since 2008.

Australia/New Zealand

Commerce Commission’s court case against payday lender Ferratum scheduled for next year (Interest), Rated: AAA

A backlog of cases in the Auckland High Court means the next hearing in the Commerce Commission’s legal action against online payday lender Ferratum New Zealand won’t be held until June next year.

Asia

Indonesian fintech association sanctions lending platform that sets high interest rate (KrAsia), Rated: AAA

Two Indonesian lending platforms regulated under the country’s financial services authority (OJK) have been penalized by the ethics council of AFPI, the industry association for fintech lenders in Indonesia.

The organization revealed that one of the companies in question is P2P lender Do-It, which charged an interest fee rate of 1% per day.

Africa

Onefi is Expanding Carbon’s Digital Banking Services to Ghana (Technext), Rated: AAA

Nigerian digital financial platform, Carbon (formerly Paylater) is taking big steps to introduce its revamped financial services into Ghana. The online lender is looking to hire a new country manager for Ghana and this suggests the company is looking to introduce its new services like PayVest into Ghana.

Authors:

George Popescu
Allen Taylor

The post Thursday May 23 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 10 2019, Daily News Digest

Purchase APR

News Comments Today’s main news: P2P investors outperformed FTSE 100 in 2018. U.S. government shut down hurts SBA lending at banks. Monzo, Funding Circle put UK in tech investment lead. Robinhood closes in on UK launch. N26 valuation at $2.7B. Today’s main analysis: Mortgage offer report for December 2018. Today’s thought-provoking articles: New bank credit fell below 1%. Nexo publishes […]

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Purchase APR

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Government Shutdown Hurts SBA Lending at Banks in December (AP News), Rated: AAA

With the U.S. Small Business Administration (SBA) closed for the past two weeks because of the partial government shutdown, SBA loan approvals dropped in December 2018 at banks and other institutions. Despite this setback, small business loan approval rates for big banks reached another record high (27%) in December 2018, according to the Biz2Credit Small Business Lending Index released today.

Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals slipped below the half-way mark to 49.9% following the month of November when 50.2% were approved.

Loan approval rates among alternative lenders dropped from 56.7% in November to 56.6% in December.

Strong Employment Report; PeerIQ’s Benchmarking Application (PeerIQ), Rated: AAA

Real new bank credit fell below 1% at the end of 2018. This is a mixed indicator of a recession as there have been 9 recessions since the 1950s after real new bank credit has fallen below 1%, but also about 6 false signals as well.

Source: Federal Reserve, BEA, PeerIQ

LendingTree Releases Monthly Mortgage Offer Report for December (PR Newswire), Rated: AAA

  • December’s best mortgage offers for borrowers with the best profiles had an average APR of 4.35% for conforming 30-year, fixed-rate purchase loans, down from 4.66% in November. The APR on refinance loan offers also decreased from 4.63% in November to 4.34%. We consider people with the best credit profiles to be those in the 95th percentile of borrowers who received the best mortgage offers through the LendingTree marketplace, which allows users to compare offers from multiple mortgage lenders.
  • Mortgage rates vary depending upon parameters including credit score, loan-to-value ratio, income and property type.
  • For the average borrower, the purchase APR for conforming 30-year, fixed-rate purchase loans offered on LendingTree’s platform was 5.17%, down 18 basis points from November. The loan note rate of 5.05% was down 19 basis points from November. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.
  • Consumers with the highest credit scores (760+, representing the 65th percentile of borrowers) received an average APR of 4.98%, versus 5.33% for consumers with scores of 680 to 719. The APR spread of 65 basis points between these score ranges is higher than it was in November. For the average purchase loan amount of $224,609, the spread represents over $17,000 in additional costs for borrowers with lower credit scores over 30 years. The additional costs result from higher interest rates, larger fees or a combination of the two.
  • For the average borrower, the APR for conforming 30-year, fixed-rate refinance loans decreased 24 basis points from November to 5.09%. At 4.93% and 5.21%, respectively, the spread between credit score brackets (760+ and 680-719) was 28 basis points. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $239,329.
  • Average proposed purchase down payments fell to $54,217, a decline of nearly $6,000.
Source: LendingTree
Source: LendingTree

To view the Mortgage Offers Report, visit: www.lendingtree.com/home/mortgage-offers-report-december-2018.

Minority Entrepreneurs Are Thriving in These 10 (Mostly Coastal) U.S. Cities (Inc), Rated: AAA

San Francisco and San Jose, California, are not only home to Big Tech’s all-stars, they’re also the top two spots where minority entrepreneurs are thriving.

Over 42 percent of all minority-owned companies in these cities make at least $500,000 in annual revenue and more than half have been in business for six years or more, according to a new report released Tuesday by LendingTree, an online loan marketplace based in Charlotte, North Carolina. The study uses Census data to gauge how minority business owners with employees fare in the 50 largest metro areas in the U.S. It measures performance based on metrics including a company’s longevity, revenue, and whether a city’s minority population is proportionally represented in business ownership demographics, dubbed the “parity index.”

Source: LendingTree

Lending Startup Affirm to Test High-Interest Savings Accounts (Cheddar), Rated: A

Affirm is making good on its commitment to become a full-service bank. The lending startup led by PayPal co-founder Max Levchin is introducing no-free savings accounts through a bank partner, initially with a 2 percent annual interest rate and no minimum balance, Cheddar has learned.

Kabbage Data Reveals One-Third of Successful Small Businesses Started with Less Than $ 5,000 (PRWeb), Rated: A

New data released today by Kabbage, Inc., a global financial services, technology and data platform serving small businesses, shows that the majority of successful entrepreneurs began their businesses with little cash flow and short run rates. Polling 600 thriving U.S. small business owners, the Kabbage survey found 58 percent of small businesses started with less than $25,000 and one-third started with less than $5,000.

Kabbage vs. Fundbox: Which Line of Credit is Best For Your Business? (Nav.com), Rated: A

Kabbage Pricing Example

Let’s say you borrow $25,000 and are approved for a 6 month loan with a fee of 3% (fees range from 1.5% to 10%). Using Kabbage’s calculator, you will pay $2750 in total fees if you repay the loan on schedule.

To translate that cost into an APR, you can use Nav’s free calculator and enter the loan amount plus the amount of the first two payments ($4917 each) and the amount of payments 3-6 ($4479 each). This results in an APR of 37.5%.

Fundbox

Let’s say you borrow $25,000 for 24 weeks and you are approved at their lowest fee of $4.66%. Using Fundbox’s calculator, your weekly payments will be $1135.31 and you’ll pay a total of $2247.50 in fees. This results in an APR of 39%.

LendingFront Raises $ 4 Million to Help Lenders Modernize Small Business Lending Operations (PR Web), Rated: A

LendingFront, a small business lending software provider, today announced it has raised a $4 million Series A funding round led by Information Venture Partners with participation from Newark Venture PartnersRevel PartnersContour Venture Partners and existing investors Struck CapitalValueStream Ventures and Las Olas VC.

The funding will be used to help deliver LendingFront’s end-to-end white label software platform to more banks and financial institutions, giving them access to the most sophisticated technology in the market for originating, underwriting and servicing small business credit – a $600b+ market, according to the U.S. Small Business Administration.

Cross River, Stripe partnership targets marketplace economy (Bankless Times), Rated: A

Cross River, a provider of banking services for fintech companies, today announced a partnership with Stripe to help those in the marketplace economy—such as workers in ride sharing, food delivery, and other freelance occupations real-time access to earnings using push-to-card payments.

Fintech APIs Consolidate As Plaid Buys Quovo In $ 200M Deal (Benzinga), Rated: A

Fintech startup Plaid is negotiating a $200 million acquisition of rival Quovo, according to a Tuesday announcement. The merger would unite similar application programming interfaces connecting bank accounts to other fintech apps, such as Venmo, Coinbase and Robinhood.

The deal not only expands Plaid’s reach beyond its present 25 percent of U.S. financial accounts, but also positions the firm to penetrate the brokerage and wealth management spaces. Quovo’s traditional customers include Vanguard, Stifel Financial Corp SF 0.02%, John Hancock, Betterment and Wealthfront.

Top 7 Short Term Investment Ideas For Beginners (FX Daily Report), Rated: A

Often touted as direct lending, peer-to-peer (P2P) lending has taken the financial industry by storm. Although this short term investment option has only been for the last one decade, it has already managed to create a reputation of its own with the flexibility and diversification options it brings for lenders. The idea of P2P lending is simple: it is a simple investment option that is designed to bring investors and borrowers together on a single lending platform. These platforms offer relatively higher returns because of their low operating costs. Additionally, they also get to make some profits every time a borrower makes their repayment.

YieldStreet’s Alternative Investment Marketplace Booms In Times Of Volatility (Forbes), Rated: B

When YieldStreet launched a $6.45 million offering on its marketplace, it expected a lot of investors to get in on the deal. After all, they had about seventy-two hours to digest all the important aspects of the company and the offering.

CAN Capital Has New CEO, Hires Edward Siciliano to Lead Online Lender (Crowdfund Insider), Rated: B

CAN Capital, an online lender providing financing to SMEs, has a new Chief Executive Officer. Announced in a release yesterday, the Atlanta based Fintech has appointed Edward J. Siciliano as CEO.

SS&C Releases Precision LM, Integrated Loan Servicing and Accounting Platform (SS&C), Rated: B

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), today announced the release of Precision LM 4.0, the newest version of the company’s commercial/multifamily loan servicing solution.

United Kingdom

Zopa: P2P investors outperformed the FTSE 100 in 2018 (P2P Finance Newes), Rated: AAA

The consumer lending platform compared the returns from investing £15,000 equally across a FTSE 100 exchange traded fund (ETF), a cash ISA or a Zopa Plus account last year.

By investing £5,000 in Zopa Plus, investors could have grown their money by up to 5.2 per cent or £260 in 2018, 13.5 per cent more than if they’d invested in a product tracking the stock market, Zopa said.

Monzo and Funding Circle help put UK in lead for tech investment (Independent), Rated: AAA

Britain’s tech sector saw more venture capital investment and stock market flotations in 2018 than any other European country, as the likes of Monzo and Funding Circle took centre stage.

UK tech companies attracted £2.49 billion in venture capital investment last year – far more than Germany in second place with £1.38 billion and France in third place with £1.03 billion, according to data from London & Partners and PitchBook.

The figures also showed London was by far the UK hub for investment, accounting for £1.8 billion or 72% of the country’s venture capital raised in 2018.

UK online bank Monzo hires financial market veteran as chairman – source (Reuters), Rated: A

Robinhood is getting closer to a UK launch (Business Insider), Rated: AAA

US-based commission free trading app Robinhood has quietly begun recruiting for a new office in London in preparation for an eventual launch in the UK, reports TechCrunch.

The $5.6 billion fintech is hiring for multiple positions in the city, including recruitment, operations, and marketing, according to sources familiar with the matter cited by the outlet. It’s also reportedly seeking to fill compliance and product positions, suggesting the fintech’s strategy is focused on significant localization and product market fit for its UK expansion.

Source: Business Insider

Apps more popular than online banking in UK (Finextra), Rated: A

According to the study, which was commissioned by financial services review website Smart Money People, 39.2% of customers stated that their preferred means of dealing with banks is via apps, up from 30% in 2017.

In contrast, the preference for online banking has fallen from 45% in 2017 to 38.6% putting it below that of banking apps for the first time.

The survey also shows that the preference for digital channels (both mobile apps and online services) has grown slightly from 75% to 78% in the last year.

LendInvest partners with Mortgage Brain to bring BTL loans to wider market (Property Funds World), Rated: A

LendInvest, a specialist property finance lender, has partnered with mortgage technology expert, Mortgage Brain, to bring its Buy-to-Let (BTL) product to a wider audience of intermediaries.

This partnership follows recent changes to LendInvest’s BTL product in which it dropped its headline five-year fixed rate to 3.60 per cent with the ICR being assessed at the product pay rate, of 3.60 per cent. The lender also reduced its product fees to 1 per cent for all standard property and HMO mortgages.

Britain’s tech sector clocks up £2.5billion worth of new investment in 2018 as it comfortably tops the table of European countries (This is Money), Rated: A

UK based tech companies attracted £2.49billion in venture capital investment last year, according to data compiled by London & Partners and PitchBook.

This comfortably topped Germany in second place with £1.38billion and more than doubled third place France’s £1.03billion.

The data shows investment into the UK’s AI sector peaked at £736million in 2018, up a chunky 47 per cent on 2017.

China

China’s HNA touts assets for sale as funding crunch intensifies (Reuters), Rated: AAA

China’s indebted HNA Group met bankers on Tuesday to tout the latest assets that the sprawling conglomerate is putting on the block as it looks to raise funds and stave off an intensifying cash crunch.

The range of assets, spanning a hotel project in frozen Harbin and stakes in struggling online lender Dianrong, insurer Bohai Life and brokerage HNA Futures, underscores how the group is shedding almost all non-core businesses as it pares back an empire that once spread from Deutsche Bank to Hilton Worldwide.

China’s New Negative List Targets Unified Market Access (China Briefing), Rated: A

For example, ride hailing operations are under the ‘restricted’ category. Many claim that this is an official response to the 2018 Didi scandals, while illegal financial activities and internet-related business activities are likely designed to target the problems in peer-to-peer lending platforms that emerged earlier in 2018.

European Union

German mobile bank N26 joins Europe’s unicorn club with $ 2.7 billion valuation (CNBC), Rated: AAA

German fintech firm N26 said Thursday it has raised $300 million from investors in a round of funding — valuing the online lender at $2.7 billion.

That not only puts the company among the ranks of Europe’s unicorns — or private start-ups valued at more than $1 billion. It also makes it one of the most valuable unicorns in the continent.

TrueLayer launches data API in Germany (Fintech Futures), Rated: A

Ahead of the one-year anniversary of open banking (it was unleashed on 13 January 2018), TrueLayer says its data API will mean that businesses, especially fintechs, will be able to avoid “costly and time-consuming integrations of the dozens of fragmented banking APIs in Germany and across Europe”.

International

Nexo, the World’s Largest Crypto Lender, Publishes Interim Report (Sociable.co), Rated: AAA

Nexo is sharing the interim report detailing the dividend distribution of $912,071.00 to eligible NEXO Token Holders that occurred on December 15, 2018.

In just six months, Nexo’s crypto lending model has generated a net profit of $3,040,239.

Source: Nexo

Read the full report here.

Crypto Lenders Thriving Despite The Ongoing Bear Market (Use the Bitcoin), Rated: A

The ongoing crypto winter has meant that many businesses are struggling for funding. Some have resulted in shutting down while others lay off staff. However, one section of the industry is thriving; crypto lenders.

Crypto lenders that are focused on the crypto industry say that they are finding strong demand for their services from individuals that are not willing to sell their crypto coins at depressed prices. Also, there is demand from big investors that are eager to borrow coins for short selling.

Australia

Crypto-Lending Business Helio Lending Launches Regulated Investment Fund (Investment Revolution), Rated: AAA

Australian-based, government-regulated cryptocurrency lender, Helio Lending today confidently launched a new arm of its business, the Helio Secured Income Fund —  a regulated Managed Investment Scheme with an Australian Financial Services Licence — investors are now able to indirectly invest in cryptocurrency assets while targeting a return of 9.75% a year, net of all fees.

India

IndiaMoneyMart Receives NBFC-P2P Certification From RBI (The Week), Rated: AAA

The accreditation will enable IndiaMoneyMart to expand operations and target loan disbursals worth INR 100 Cr by FY 2018-19. It is an encouraging milestone to enable IndiaMoneyMart (IMM) gain traction among investors seeking for alternative asset class and boost their sentiments. The product offers an opportunity to earn steady cash flow every month to the lenders as well as compound their earnings by reinvesting.

Southeast Asia

Indonesia’s KinerjaPay gets US$ 200 million investment deal from local conglomerate (KrAsia), Rated: AAA

Indonesian mobile payments app KinerjaPay raised US$200 million investment from Wahana Group, a Surabaya-based conglomerate. The investment consists of a subscription of $100 million worth of shares in KinerjaPay’s Series F round and an additional $100 million in shares of the company’s Series G Convertible Preferred Stock. The company is listed on the US OTC market under the ticker KPAY.

Africa

#BizTrends2019: 6 trends in fintech and its regulation (Biz Community), Rated: AAA

In peer-to-peer lending, I think we will see growth beyond remittances and micro-donations to much larger-scale crowdfunding and insurance-type products, including short-term risk insurance products and co-investment structures (like mobile stokvels) on digital platforms. These types of products hold the promise (and risks) of consumers of financial services developing and administering such platforms themselves rather than the big, established players. Similarly, consumer development of payment systems is receiving a lot of attention in the international market and, increasingly, in South Africa. This is something to watch in 2019.

Authors:

George Popescu
Allen Taylor

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Thursday January 10 2019, Daily News Digest

Purchase APR

News Comments Today’s main news: P2P investors outperformed FTSE 100 in 2018. U.S. government shut down hurts SBA lending at banks. Monzo, Funding Circle put UK in tech investment lead. Robinhood closes in on UK launch. N26 valuation at $2.7B. Today’s main analysis: Mortgage offer report for December 2018. Today’s thought-provoking articles: New bank credit fell below 1%. Nexo publishes […]

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Purchase APR

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

Government Shutdown Hurts SBA Lending at Banks in December (AP News), Rated: AAA

With the U.S. Small Business Administration (SBA) closed for the past two weeks because of the partial government shutdown, SBA loan approvals dropped in December 2018 at banks and other institutions. Despite this setback, small business loan approval rates for big banks reached another record high (27%) in December 2018, according to the Biz2Credit Small Business Lending Index released today.

Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals slipped below the half-way mark to 49.9% following the month of November when 50.2% were approved.

Loan approval rates among alternative lenders dropped from 56.7% in November to 56.6% in December.

Strong Employment Report; PeerIQ’s Benchmarking Application (PeerIQ), Rated: AAA

Real new bank credit fell below 1% at the end of 2018. This is a mixed indicator of a recession as there have been 9 recessions since the 1950s after real new bank credit has fallen below 1%, but also about 6 false signals as well.

Source: Federal Reserve, BEA, PeerIQ

LendingTree Releases Monthly Mortgage Offer Report for December (PR Newswire), Rated: AAA

  • December’s best mortgage offers for borrowers with the best profiles had an average APR of 4.35% for conforming 30-year, fixed-rate purchase loans, down from 4.66% in November. The APR on refinance loan offers also decreased from 4.63% in November to 4.34%. We consider people with the best credit profiles to be those in the 95th percentile of borrowers who received the best mortgage offers through the LendingTree marketplace, which allows users to compare offers from multiple mortgage lenders.
  • Mortgage rates vary depending upon parameters including credit score, loan-to-value ratio, income and property type.
  • For the average borrower, the purchase APR for conforming 30-year, fixed-rate purchase loans offered on LendingTree’s platform was 5.17%, down 18 basis points from November. The loan note rate of 5.05% was down 19 basis points from November. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.
  • Consumers with the highest credit scores (760+, representing the 65th percentile of borrowers) received an average APR of 4.98%, versus 5.33% for consumers with scores of 680 to 719. The APR spread of 65 basis points between these score ranges is higher than it was in November. For the average purchase loan amount of $224,609, the spread represents over $17,000 in additional costs for borrowers with lower credit scores over 30 years. The additional costs result from higher interest rates, larger fees or a combination of the two.
  • For the average borrower, the APR for conforming 30-year, fixed-rate refinance loans decreased 24 basis points from November to 5.09%. At 4.93% and 5.21%, respectively, the spread between credit score brackets (760+ and 680-719) was 28 basis points. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $239,329.
  • Average proposed purchase down payments fell to $54,217, a decline of nearly $6,000.
Source: LendingTree
Source: LendingTree

To view the Mortgage Offers Report, visit: www.lendingtree.com/home/mortgage-offers-report-december-2018.

Minority Entrepreneurs Are Thriving in These 10 (Mostly Coastal) U.S. Cities (Inc), Rated: AAA

San Francisco and San Jose, California, are not only home to Big Tech’s all-stars, they’re also the top two spots where minority entrepreneurs are thriving.

Over 42 percent of all minority-owned companies in these cities make at least $500,000 in annual revenue and more than half have been in business for six years or more, according to a new report released Tuesday by LendingTree, an online loan marketplace based in Charlotte, North Carolina. The study uses Census data to gauge how minority business owners with employees fare in the 50 largest metro areas in the U.S. It measures performance based on metrics including a company’s longevity, revenue, and whether a city’s minority population is proportionally represented in business ownership demographics, dubbed the “parity index.”

Source: LendingTree

Lending Startup Affirm to Test High-Interest Savings Accounts (Cheddar), Rated: A

Affirm is making good on its commitment to become a full-service bank. The lending startup led by PayPal co-founder Max Levchin is introducing no-free savings accounts through a bank partner, initially with a 2 percent annual interest rate and no minimum balance, Cheddar has learned.

Kabbage Data Reveals One-Third of Successful Small Businesses Started with Less Than $ 5,000 (PRWeb), Rated: A

New data released today by Kabbage, Inc., a global financial services, technology and data platform serving small businesses, shows that the majority of successful entrepreneurs began their businesses with little cash flow and short run rates. Polling 600 thriving U.S. small business owners, the Kabbage survey found 58 percent of small businesses started with less than $25,000 and one-third started with less than $5,000.

Kabbage vs. Fundbox: Which Line of Credit is Best For Your Business? (Nav.com), Rated: A

Kabbage Pricing Example

Let’s say you borrow $25,000 and are approved for a 6 month loan with a fee of 3% (fees range from 1.5% to 10%). Using Kabbage’s calculator, you will pay $2750 in total fees if you repay the loan on schedule.

To translate that cost into an APR, you can use Nav’s free calculator and enter the loan amount plus the amount of the first two payments ($4917 each) and the amount of payments 3-6 ($4479 each). This results in an APR of 37.5%.

Fundbox

Let’s say you borrow $25,000 for 24 weeks and you are approved at their lowest fee of $4.66%. Using Fundbox’s calculator, your weekly payments will be $1135.31 and you’ll pay a total of $2247.50 in fees. This results in an APR of 39%.

LendingFront Raises $ 4 Million to Help Lenders Modernize Small Business Lending Operations (PR Web), Rated: A

LendingFront, a small business lending software provider, today announced it has raised a $4 million Series A funding round led by Information Venture Partners with participation from Newark Venture PartnersRevel PartnersContour Venture Partners and existing investors Struck CapitalValueStream Ventures and Las Olas VC.

The funding will be used to help deliver LendingFront’s end-to-end white label software platform to more banks and financial institutions, giving them access to the most sophisticated technology in the market for originating, underwriting and servicing small business credit – a $600b+ market, according to the U.S. Small Business Administration.

Cross River, Stripe partnership targets marketplace economy (Bankless Times), Rated: A

Cross River, a provider of banking services for fintech companies, today announced a partnership with Stripe to help those in the marketplace economy—such as workers in ride sharing, food delivery, and other freelance occupations real-time access to earnings using push-to-card payments.

Fintech APIs Consolidate As Plaid Buys Quovo In $ 200M Deal (Benzinga), Rated: A

Fintech startup Plaid is negotiating a $200 million acquisition of rival Quovo, according to a Tuesday announcement. The merger would unite similar application programming interfaces connecting bank accounts to other fintech apps, such as Venmo, Coinbase and Robinhood.

The deal not only expands Plaid’s reach beyond its present 25 percent of U.S. financial accounts, but also positions the firm to penetrate the brokerage and wealth management spaces. Quovo’s traditional customers include Vanguard, Stifel Financial Corp SF 0.02%, John Hancock, Betterment and Wealthfront.

Top 7 Short Term Investment Ideas For Beginners (FX Daily Report), Rated: A

Often touted as direct lending, peer-to-peer (P2P) lending has taken the financial industry by storm. Although this short term investment option has only been for the last one decade, it has already managed to create a reputation of its own with the flexibility and diversification options it brings for lenders. The idea of P2P lending is simple: it is a simple investment option that is designed to bring investors and borrowers together on a single lending platform. These platforms offer relatively higher returns because of their low operating costs. Additionally, they also get to make some profits every time a borrower makes their repayment.

YieldStreet’s Alternative Investment Marketplace Booms In Times Of Volatility (Forbes), Rated: B

When YieldStreet launched a $6.45 million offering on its marketplace, it expected a lot of investors to get in on the deal. After all, they had about seventy-two hours to digest all the important aspects of the company and the offering.

CAN Capital Has New CEO, Hires Edward Siciliano to Lead Online Lender (Crowdfund Insider), Rated: B

CAN Capital, an online lender providing financing to SMEs, has a new Chief Executive Officer. Announced in a release yesterday, the Atlanta based Fintech has appointed Edward J. Siciliano as CEO.

SS&C Releases Precision LM, Integrated Loan Servicing and Accounting Platform (SS&C), Rated: B

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), today announced the release of Precision LM 4.0, the newest version of the company’s commercial/multifamily loan servicing solution.

United Kingdom

Zopa: P2P investors outperformed the FTSE 100 in 2018 (P2P Finance Newes), Rated: AAA

The consumer lending platform compared the returns from investing £15,000 equally across a FTSE 100 exchange traded fund (ETF), a cash ISA or a Zopa Plus account last year.

By investing £5,000 in Zopa Plus, investors could have grown their money by up to 5.2 per cent or £260 in 2018, 13.5 per cent more than if they’d invested in a product tracking the stock market, Zopa said.

Monzo and Funding Circle help put UK in lead for tech investment (Independent), Rated: AAA

Britain’s tech sector saw more venture capital investment and stock market flotations in 2018 than any other European country, as the likes of Monzo and Funding Circle took centre stage.

UK tech companies attracted £2.49 billion in venture capital investment last year – far more than Germany in second place with £1.38 billion and France in third place with £1.03 billion, according to data from London & Partners and PitchBook.

The figures also showed London was by far the UK hub for investment, accounting for £1.8 billion or 72% of the country’s venture capital raised in 2018.

UK online bank Monzo hires financial market veteran as chairman – source (Reuters), Rated: A

Robinhood is getting closer to a UK launch (Business Insider), Rated: AAA

US-based commission free trading app Robinhood has quietly begun recruiting for a new office in London in preparation for an eventual launch in the UK, reports TechCrunch.

The $5.6 billion fintech is hiring for multiple positions in the city, including recruitment, operations, and marketing, according to sources familiar with the matter cited by the outlet. It’s also reportedly seeking to fill compliance and product positions, suggesting the fintech’s strategy is focused on significant localization and product market fit for its UK expansion.

Source: Business Insider

Apps more popular than online banking in UK (Finextra), Rated: A

According to the study, which was commissioned by financial services review website Smart Money People, 39.2% of customers stated that their preferred means of dealing with banks is via apps, up from 30% in 2017.

In contrast, the preference for online banking has fallen from 45% in 2017 to 38.6% putting it below that of banking apps for the first time.

The survey also shows that the preference for digital channels (both mobile apps and online services) has grown slightly from 75% to 78% in the last year.

LendInvest partners with Mortgage Brain to bring BTL loans to wider market (Property Funds World), Rated: A

LendInvest, a specialist property finance lender, has partnered with mortgage technology expert, Mortgage Brain, to bring its Buy-to-Let (BTL) product to a wider audience of intermediaries.

This partnership follows recent changes to LendInvest’s BTL product in which it dropped its headline five-year fixed rate to 3.60 per cent with the ICR being assessed at the product pay rate, of 3.60 per cent. The lender also reduced its product fees to 1 per cent for all standard property and HMO mortgages.

Britain’s tech sector clocks up £2.5billion worth of new investment in 2018 as it comfortably tops the table of European countries (This is Money), Rated: A

UK based tech companies attracted £2.49billion in venture capital investment last year, according to data compiled by London & Partners and PitchBook.

This comfortably topped Germany in second place with £1.38billion and more than doubled third place France’s £1.03billion.

The data shows investment into the UK’s AI sector peaked at £736million in 2018, up a chunky 47 per cent on 2017.

China

China’s HNA touts assets for sale as funding crunch intensifies (Reuters), Rated: AAA

China’s indebted HNA Group met bankers on Tuesday to tout the latest assets that the sprawling conglomerate is putting on the block as it looks to raise funds and stave off an intensifying cash crunch.

The range of assets, spanning a hotel project in frozen Harbin and stakes in struggling online lender Dianrong, insurer Bohai Life and brokerage HNA Futures, underscores how the group is shedding almost all non-core businesses as it pares back an empire that once spread from Deutsche Bank to Hilton Worldwide.

China’s New Negative List Targets Unified Market Access (China Briefing), Rated: A

For example, ride hailing operations are under the ‘restricted’ category. Many claim that this is an official response to the 2018 Didi scandals, while illegal financial activities and internet-related business activities are likely designed to target the problems in peer-to-peer lending platforms that emerged earlier in 2018.

European Union

German mobile bank N26 joins Europe’s unicorn club with $ 2.7 billion valuation (CNBC), Rated: AAA

German fintech firm N26 said Thursday it has raised $300 million from investors in a round of funding — valuing the online lender at $2.7 billion.

That not only puts the company among the ranks of Europe’s unicorns — or private start-ups valued at more than $1 billion. It also makes it one of the most valuable unicorns in the continent.

TrueLayer launches data API in Germany (Fintech Futures), Rated: A

Ahead of the one-year anniversary of open banking (it was unleashed on 13 January 2018), TrueLayer says its data API will mean that businesses, especially fintechs, will be able to avoid “costly and time-consuming integrations of the dozens of fragmented banking APIs in Germany and across Europe”.

International

Nexo, the World’s Largest Crypto Lender, Publishes Interim Report (Sociable.co), Rated: AAA

Nexo is sharing the interim report detailing the dividend distribution of $912,071.00 to eligible NEXO Token Holders that occurred on December 15, 2018.

In just six months, Nexo’s crypto lending model has generated a net profit of $3,040,239.

Source: Nexo

Read the full report here.

Crypto Lenders Thriving Despite The Ongoing Bear Market (Use the Bitcoin), Rated: A

The ongoing crypto winter has meant that many businesses are struggling for funding. Some have resulted in shutting down while others lay off staff. However, one section of the industry is thriving; crypto lenders.

Crypto lenders that are focused on the crypto industry say that they are finding strong demand for their services from individuals that are not willing to sell their crypto coins at depressed prices. Also, there is demand from big investors that are eager to borrow coins for short selling.

Australia

Crypto-Lending Business Helio Lending Launches Regulated Investment Fund (Investment Revolution), Rated: AAA

Australian-based, government-regulated cryptocurrency lender, Helio Lending today confidently launched a new arm of its business, the Helio Secured Income Fund —  a regulated Managed Investment Scheme with an Australian Financial Services Licence — investors are now able to indirectly invest in cryptocurrency assets while targeting a return of 9.75% a year, net of all fees.

India

IndiaMoneyMart Receives NBFC-P2P Certification From RBI (The Week), Rated: AAA

The accreditation will enable IndiaMoneyMart to expand operations and target loan disbursals worth INR 100 Cr by FY 2018-19. It is an encouraging milestone to enable IndiaMoneyMart (IMM) gain traction among investors seeking for alternative asset class and boost their sentiments. The product offers an opportunity to earn steady cash flow every month to the lenders as well as compound their earnings by reinvesting.

Southeast Asia

Indonesia’s KinerjaPay gets US$ 200 million investment deal from local conglomerate (KrAsia), Rated: AAA

Indonesian mobile payments app KinerjaPay raised US$200 million investment from Wahana Group, a Surabaya-based conglomerate. The investment consists of a subscription of $100 million worth of shares in KinerjaPay’s Series F round and an additional $100 million in shares of the company’s Series G Convertible Preferred Stock. The company is listed on the US OTC market under the ticker KPAY.

Africa

#BizTrends2019: 6 trends in fintech and its regulation (Biz Community), Rated: AAA

In peer-to-peer lending, I think we will see growth beyond remittances and micro-donations to much larger-scale crowdfunding and insurance-type products, including short-term risk insurance products and co-investment structures (like mobile stokvels) on digital platforms. These types of products hold the promise (and risks) of consumers of financial services developing and administering such platforms themselves rather than the big, established players. Similarly, consumer development of payment systems is receiving a lot of attention in the international market and, increasingly, in South Africa. This is something to watch in 2019.

Authors:

George Popescu
Allen Taylor

The post Thursday January 10 2019, Daily News Digest appeared first on Lending Times.

Thursday October 11 2018, Daily News Digest

marketplace lending securitization

News Comments Today’s main news: Marcus may reign in new loans, but not SoFi, LendingClub. Fellow Finance goes public. Aereal Bank invests in BrickVest. Aussie borrowers dump banks for P2P lenders. Figure launches HELOCs on blockchain. Today’s main analysis: PeerIQ’s Q3 2018 marketplace lending securitization tracker. Today’s thought-provoking articles: How every day can be payday. Older Americans are most creditworthy. Corporate […]

marketplace lending securitization

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

Goldman’s Marcus May Rein In New Loans Next Year But Rivals Aren’t Worried (Forbes), Rated: AAA

Nearly two years after exploding on the online personal lending market scene, Marcus, the unit of Goldman Sachs, is reportedly retreating, reigning in its loan origination target for 2019.

That’s according to 

PeerIQ’s Q3 2018 Marketplace Lending Securitization Tracker (Lend Academy), Rated: AAA

A total of eight marketplace lending securitizations were issued in the third quarter, totaling $3.5 billion. This is the fifth highest level of quarterly issuance which is noteworthy given that the summer is typically a slower period for issuance. This is an increase of 35% from the prior year period.  It’s hard to believe that total marketplace lending issuance to date stands at $41.9 billion across 134 deals.

There has been a shift with spreads tightening and yields falling on new deals, a reversal from prior quarters. PeerIQ noted that all-in yields on consumer deals decreased 2 basis points from 3.72% to 3.7% and student deals decreased 100 basis points from 4.5% to 3.5% over the previous quarter.

Economic Growth is Solid, Lending Securitization Strong, but are Storm Clouds Gathering? (Crowdfund Insider), Rated: A

PeerIQ states:

“Citigroup, Deutsche Bank, and Credit Suisse continue to top the issuance league tables with 57% of MPL ABS transaction volume. Citi and CS are increasing their activity in the Fintech space, with CS also offering risk retention solutions on securitizations.”

The end of the two-week pay cycle: How every day can be payday (MarketWatch), Rated: AAA

Teresa Long, an assistant manager at a Walmart near Dallas, is like many Americans: She sometimes struggles to pay her monthly bills on time, especially when her biweekly paycheck fluctuates.

Occasionally, when she was not able to budget correctly for the month, she would default on a bill, miss a payment or send in a check late. Sometimes Long would take out a payday loan, but the fees were crippling. “You’re taking a $300 loan, and, by the time you pay it off, it’s probably $1,000 or $1,500,” said the 40-year-old mother of four. “It’s extra money you could have been saving.”

So when she saw information on an internal Walmart website about a new service from an Oakland, Calif.-based company called Even, Long was intrigued. It promised to pay her up to half her wages in advance, on demand, for an average $6 monthly subscription fee.

Sources: Pew Charitable Trusts, Center for Financial Services Innovation

LendingTree Study Finds Older Generations Most Creditworthy (PR Newswire), Rated: AAA

LendingTree today released its study on Americans’ credit scores by generation that found that the older someone is, the better their credit tends to be. On average, members of the silent generation (the oldest cohort) have credit scores 100 points higher than those of millennials.

Key takeaways

  • Millennials and Gen Xers have, on average, “fair” credit scores.
  • Baby boomers have “good” scores.
  • Members of the silent generation have “very good” scores.
Source: PR Newswire

Why older people have higher credit scores

One possible reason for higher scores among older people is cultural. In general, they may use credit less and may be more disciplined savers and spenders, said Kali McFadden, senior research analyst at LendingTree.

Another reason is that older Americans are more settled financially, with lower monthly costs. In general, the older someone is, the lower their mortgage payments and student loan debts are (or they don’t have such payments at all). Older Americans may also not need new furniture or have child care costs. That means they are less likely to have urgent financial costs that can result in delinquencies, which can hurt credit scores.

Millennials and Gen Xers may have to pay more for loans

Banks, credit card issuers and other lenders make lending decisions based on a borrower’s creditworthiness. They offer much better rates to borrowers with higher scores.

Source: PR Newswire

Boomers aren’t much better off

While the higher credit score of baby boomers (average credit score: 696) is a sign of better financial stability than the younger generations, there’s still room for improvement. The average boomer score trails that of the elder generation by 38 points.

The CEO of Robinhood sets out his vision after announcing another move to compete with major brokerages (Markets Insider), Rated: A

Robinhood, the zero-fee stock trading app that helped kickstart a race to the bottom in brokerage fees, has a new weapon in its arsenal as it fights to become the Amazon of personal finance: an in-house clearing system.

The $5.6 billion startup announced Wednesday that it has completed a two-year effort to build and launch its own in-house clearing provider that will allow it to save money and improve trading for its 6 million customers, cofounder and CEO Vlad Tenev told Business Insider.

Mike Cagney’s Figure Launches Blockchain-Powered Online Home Equity Loans (PYMNTS), Rated: AAA

Figure rolled out the first of those products yesterday: a digitally processed home equity loan that it claims can cut approval time to five minutes. According to Cagney, those Figure loans can range between $15,000 and $100,000, with funds made available to users in five days — down from the 45 days that such products usually take.

Learn more about Figure’s business model here.

Online Investing in Real Estate through Crowdfunding Expected to Grow (Urban Land Institute), Rated: A

Crowdfunding has captured the imagination—and money—of investors throughout the United States. While it is used for everything from charitable campaigns to launching startup businesses or paying legal fees, commercial real estate may be the largest online investment opportunity for crowdfunding to date, according to a panel at the 2018 ULI Fall Meeting in Boston.

“This $14 trillion market is the nation’s third-largest investment asset class behind stocks and bonds. Crowdfunding allows real estate firms to reach beyond friends and family to investors anywhere,” he said.

Toward a more inclusive fintech industry (American Banker), Rated: A

I worked for seven years in a company run exclusively by men — no women on the leadership team at all. The executive suite was physically walled off, a literal boys’ club, and no matter how valuable my performance, I wasn’t going to be a “cultural fit” for the all-male back room. Even now, 84% of venture-backed companies lack even a single female founder.

Significantrigorous research proves women in leadership make companies more profitable, and diverse leadership teams make better business decisions.

Direct lending platform Goji hits £100m in assets (AltFi), Rated: A

Goji has reached over £100 million in assets under management on its platform, the firm has said.

This latest milestone coincides with Goji becoming a partner of adviser-support network SimplyBiz.

Jake Wombwell-Povey, CEO of Goji says the firm has doubled the assets on the platform in a little over six months.

Roostify Announces Bidirectional Integration with Ellie Mae’s Encompass Digital Mortgage Solution (BusinessWire), Rated: B

Roostify, a digital lending solution, announced that its platform now offers a bidirectional integration with Ellie Mae’s Encompass digital mortgage lending platform. The seamless integration allows lenders to easily pass information between the two systems, driving quality and efficiency in the loan origination process.

States’ response to OCC fintech charter ‘disappointing,’ top Treasury official says (American Banker), Rated: B

A senior Treasury Department official said he was disheartened by state regulators’ negative response to its fintech report, which supported the Office of the Comptroller of the Currency’s plans to create a national fintech charter.

United Kingdom

Fintech startup Wagestream wants to tackle Britain’s ‘poverty premium’ (TechWorld), Rated: AAA

The UK’s Financial Ombudsman Service claims to have received 10,979 complaints about payday loans between April and June 2018, according to figures from its annual review for 2017/18.

The figures came just weeks after what was the UK’s biggest payday lender, Wonga, went into administration.

But London-based Fintech startup, Wagestream, has emerged to put an end to the misery of ‘poverty premium’ as it makes a stand to ‘destroy payday loans’.

Savers Offered 8% By ISA Bond That Fights for Justice (OA Online), Rated: A

INVESTORS seeking a higher rate of return – and who want to use their money to help victims of things like professional negligence – will be interested in a new bond by Just, held through an Innovative Finance ISA called Just ISA.

Launched in summer 2018, the Just ISA offers tax-free returns of 8% by investing in a bond that is ultimately used to fund legal cases on behalf of people who are seeking redress from things such as professional negligence by individuals and corporations.

London’s most influential people 2018 (Evening Standard), Rated: B

Tom Blomfield   – Chief executive of Monzo

The Oxford graduate has made carrying the ubiquitous orange payment card a mark of cool as its cult status continues to grow.

Samir Desai – Chief executive and co-founder of Funding Circle

The former management consultant has been at the helm for eight years of the leading peer-to-peer lender to small businesses.

Jaidev Janardana – Chief executive of Zopa

The former Capital One man is boss of the world’s first peer-to-peer lending company which is launching a bank.

China

Overheard in the Long Room: corporate China (FT Alphaville), Rated: AAA

Two diverging trends here. China, on a national level, is requiring more and more cash to service its debts. Not good news for those concerned about the Republic’s burgeoning debt burden, estimated to be anywhere between 300 to 350 per cent of GDP, depending on who you ask and what mood they’re in.

Source: Financial Times

This hasn’t deterred bond buyers however, as the IMF recorded a circa $40bn flow into yuan-denominated bonds over the second quarter of this year, according to Brad Setser at the CFR:

Source Financial Times
European Union

Fellow Finance goes public (AltFi), Rated: AAA

The platform is expected to raise approximately €10m. With a valuation of €55m at the close of the IPO on Tuesday, the platform anticipates rapid growth. The IPO saw 1.3 million new shares in the company on offer for an 18.3 per cent stake in the company. The offer was 2.2 times oversubscribed.

In addition to the new shares on offer, just under 1.3 million in existing shares in the company will go on sale too.

Nasdaq Helsinki welcomes Fellow Finance to Nasdaq First North Finland (Nasdaq), Rated: A

Nasdaq (Nasdaq: NDAQ) announce that trading in Fellow Finance Plc shares (short name: FELLOW) commence today on Nasdaq First North Finland. The company belongs to the Financials sector. Fellow Finance is the 61st company to be admitted to trading on Nasdaq’s Nordic markets* in 2018, and it represents the 9th listing on Nasdaq Helsinki in 2018.

German Blockchain Banking Group Bitwala Teams Up With solarisBank to launch Cryptobank Services (Crowdfund Insider), Rated: A

On Tuesday, German blockchain banking group Bitwala announced it has teamed up with solarisBank to launch its new cryptobanking services. According to Bitwala, nearly 35,000 customers have already pre-registered to be among the first to get access to new service, which helps customers to manage cryptocurrencies with unprecedented convenience and benefit from the high level of security and deposit protection commanded by German banking laws.

International

Germany’s Aareal Bank invests in UK real estate platform BrickVest (Banking Tech), Rated: AAA

Germany’s Aareal Bank says it plans to acquire a stake in BrickVest, the London-based online platform for commercial real estate investments.

SALT Coin Hits Retracement Target After 55% Gains (Global Coin Report), Rated: A

The announcement by SALT coin to accept Litecoin (LTC)as collateral in their blockchain lending platform led to an explosion in the price of their ERC-20 token. In a 24 hour shake-up that rocked the altcoin market just before the weekend, this crypto-lending favorite rose over US $0.82 on Friday morning. SALT (SALT) shot up 55% overnight while the rest of the market stagnated in a prolonged malaise.

The platform now offers USD loans at a 5.99% interest rate(for loans less than US$75,000) and has removed the cap on maximum loan amounts.

Nexo (NEXO) Overview: We might have gotten the first legit crypto lending platform (Captain Altcoin), Rated: A

After a prolonged period of sideways movement throughout the month of September, staying just below $0.050, the currency started growing around 21st. The slow rise lasted until 30th, when the daily trade volume sharply dropped off from $984,935 to $230,742. The same way it dropped, the volume soared back up on October 1st. NEXO price followed suit and grew to$0.0933 on a daily trade volume of $1,765,517. After a short correction of both parameters, the price and volume spiked up once again on the 5th, this time reaching $0.1143 and $1,936,530 respectively.

Source: Captain Altcoin

Crowdfunding firm aims for rapid global growth (BusinessDay), Rated: A

Finnish crowdfunding platform Fellow Finance is targeting fast international growth after a successful initial public offering (IPO) in Helsinki, its CEO says.

Founded back in 2013, the company was valued at €55m by the IPO, which closed on Tuesday and was more than two times oversubscribed.

Australia

More Aussie borrowers are dumping banks for peer-to-peer lenders, CommSec reveals (mozo), Rated: AAA

According a recent CommSec Economic Insights Report, the number of Aussies borrowing from non-bank financial institutions rose by 10.3% over the year to August.

“Banks are facing greater competition from non-banks. At the same time bank deposits are only lifting at a 2.5% annual rate, putting greater reliance on external funding. It is clearly a competitive and challenging environment for financial institutions,” said CommSec chief economist, Craig James.

Latin America

Goldman Sachs has joined George Soros and Steve Cohen in backing an Argentinian mobile banking startup (Business Insider), Rated: AAA

Ualá, the one-year-old mobile banking startup, raised $34 million in its series B round led by Goldman Sachs Investment Partners, along with existing investors including a private fund managed by Soros Fund Management, Jefferies, the venture arm of Steve Cohen’s Point72, and entrepreneur Kevin Ryan, according to an announcement seen by Business Insider.

Over 50% of people in Argentina had never had a card before and are only operating in cash, so the company aims to provide these people financial inclusion by giving them access to financial system, he added.

What’s happening with crypto in Latin America? (Crypto Insider), Rated: A

Latin America is undergoing somewhat of a transformation in the world of global finance. With the state of the banking industry in many countries in the region, people are turning to one another to solve their problems. From neighborhood initiatives to cross-border peer-to-peer lending platforms and online-only independent banking solutions, Latin America is exploring new ways to approach their personal finances.

APAC

Borrowers and Lenders Discover a Reputable Financial Conduit with FundKo (Digital Journal), Rated: AAA

As the world becomes ever more interconnected, as does the financial system. Borrowers and lenders are no longer confined by the parameters of a localized system. In fact, many lenders are branching out to the internet, through online companies such as FundKo.

FundKo is a peer to peer lending company in the Philippines.

No customer may invest 100% of their money on a single loan: in fact, the largest sum of money they may invest is 10% of a loan. This guideline ensures that lenders never suffer a catastrophic loss.

Authors:

George Popescu
Allen Taylor

Thursday September 13 2018, Daily News Digest

funding circle

News Comments Today’s main news: OnDeck tops $10B in small business lending. KBRA assigns preliminary ratings to Consumer Loan Underlying Bond Credit Trust 2018-P2. Robinhood looking to IPO. Faircent approved by Reserve Bank of India. Today’s main analysis: A credit card debt study from Wallet Hub. Today’s thought-provoking articles: Should the next billion dollar financial platform be for […]

funding circle

News Comments

United States

United Kingdom

India

Other

News Summary

United States

OnDeck Small Business Online Lending Tops $ 10 Billion (PR Newswire) Rated:AAA

OnDeck has achieved a milestone in the Financial Technology (FinTech) industry, becoming the first non-bank online lender to surpass $10 billion in total loans originated to small businesses. OnDeck, with operations in the United StatesCanada and Australia, is the world’s largest non-bank online lender to small business by total loan volume.

The achievement by OnDeck, a pioneer of the FinTech lending industry, is the latest indication that small businesses increasingly prefer to seek financing online. According to the Small Business Credit Survey from the Federal Reserve, small business owners are turning to online lenders in record numbers. In 2017, 24 percent of small businesses seeking credit applied online, up from 21 percent the previous year.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2 (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2 (“CLUB 2018-P2”). This is a $270.30 million consumer loan ABS transaction that is expected to close September 27, 2018.

Source: Business Wire

Robinhood is targeting an IPO (Business Insider) Rated: AAA

Fintech unicorn Robinhood, which offers zero-fee stock, option, and crypto trading, has begun preparations to go public, Baiju Bhatt, the company’s chief executive, revealed at TechCrunch Disrupt SF last week. The US-based firm has raised $539 million in funding, and it’s currently valued at $5.6 billion.

Source Business Insider

In preparation for the initial public offering (IPO), the five-year-old company is in the process of hiring a chief financial officer (CFO), as well as undertaking audits from the Securities and Exchange Commission (SEC) and FINRA, a US securities markets watchdog.

The Next Billion Dollar Financial Platform – Baby Boomers (The Sociable) Rated: AAA

If you’ve immersed yourself in the world of Silicon Valley and you keep up with current trends, then it comes as no surprise that ageism in the U.S. tech world is an ongoing debate. The job search engine Indeed reports that 43% of workers in the tech industry worry about losing their jobs due to their age. While the general population is aware of the issue, its resolution is slow-moving.

The characteristics of Generation Z – those born after 1996 – are still being discovered. We don’t know enough about them yet to understand what kind of impact they will have. The Millennial Generation and Gen X have arguably been the main sales focus during the rise of Silicon Valley. Millennials in particular have overtaken the market, with 83% of today’s managers belonging to that generation. Finally, we have the Baby Boomers. Whether it’s because Millennials believe that older generations can’t use new tech – or that they inherently cater to people their own age by nature – Boomers are falling by the wayside.

People aged 50+ are the largest demographic in the United States, encompassing one third of the total population at 110 million. This age group is responsible for spending 50% of the total disposable income in the country.

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

Americans repaid $40.6 billion in credit card debt during Q1 2018 – the second-largest quarterly payoff ever. But we added almost $30 billion back to our tab in Q2 2018. We also began the year owing more than $1 trillion in credit card debt for the first time ever, after adding a post-Great Recession record of $91.8 billion to our tab in 2017.

Only four times in the past three decades have we overspent so much in a year. And in each case, the charge-off rate – currently near historical lows – rose the following year. That’s true so far, as charge-offs are up nearly 3% from Q4 2017 to Q2 2018.

Source: WalletHub

Source: WalletHub

College Ave Student Loans Announces Completion of Second Successful Securitization (Crowdfund Insider) Rated: A

Student loan marketplace, College Ave Student Loans, announced on Tuesday it has completed a $199 million securitization of private student loans, its second successful securitization. According to the platform, the CASL 2018-A transaction completed over the summer, achieved higher ratings than College Ave’s inaugural securitization, receiving an ‘AA’ rating from DBRS and an ‘A’ rating from S&P for its senior notes. 

According to College Ave, the transaction was heavily oversubscribed attracting a broad and diverse group of repeat investors and nine new participants. Barclays and Credit Suisse were joint lead underwriters on the transaction with Barclays serving as structuring agent and sole bookrunner.

White Oak Global Advisors raises $ 2.1 billion for its Direct Lending Strategy (Globe Newswire) Rated: A

White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the close of the White Oak Yield Spectrum Fund (the “Fund”) to outside investors. The Fund and other associated vehicles raised concurrently approximately $2.1 billion of total commitments, exceeding the $1.75 billion fundraising target. White Oak’s previous flagship fund, the White Oak Summit Fund, closed with approximately $1.3 billion of commitments in March 2016.

The capital for the White Oak Yield Spectrum Fund was raised from a diversified group of institutional investors worldwide. In particular, the Fund attracted very strong support from public and private pension funds, insurance companies and global family offices. White Oak currently manages over $5.6 billion of committed assets.

The Fund will primarily invest in first-lien, directly originated lending strategies, including term loans, asset-based loans, and equipment financing.

‘Fintech Charter’ Has No Early Takers as Lawsuit Looms (Wall Street Journal) Rated: A

A national banking regulator is offering cutting-edge financial firms a new pathway into the traditional banking system. So far, few of them are biting.

The lack of immediate interest from the likes of LendingClub Corp. LC +0.00% , Square Inc., and others comes in large part from uncertainty about what activities the Office of the Comptroller of the Currency’s so-called fintech charter will allow, what regulatory requirements it will carry, and whether it will hold up in court.

That uncertainty grew Wednesday when the Conference of State Bank Supervisors, a group of state regulators, said it intends to file a lawsuit challenging the OCC’s authority, renewing a previously unsuccessfully legal challenge.

2018 Fed Rate Hike Survey (Wallet Hub) Rated: A

Source Wallet Hub

Opendoor Buys Open Listing To Create End-to-End Marketplace (PYMNTS) Rated: A

In a press release, Opendoor said the acquisition of Open Listings, which operates a platform that aims to make it easier and lower-cost to find, tour and buy any home on the market, will enable it to create an end-to-end marketplace for the buying, selling and trading of homes. According to the company, 71 percent of home sellers are also looking to purchase a home.

With the acquisition, Opendoor customers will be able to line up a purchase of any home on the market via a trade-in transaction. Buyers who use Open Listings will get a discount on the home purchased through a commission rebate of up to 50 percent, the company said in the press release.

Via mobile phone or computer, customers can tour and submit an offer on any home on the market, get an offer on their existing home and align the timing of both transactions. By integrating Open Listings with Opendoor‘s mortgage, title and homes services, the company said conducting a real estate transaction will be as easy as booking a flight or making an online purchase.

Fintech out to start national bank clears one hurdle but faces more (American Banker) Rated: A

Varo Money in Salt Lake City is one step closer to becoming a national bank.

The fintech firm, which aims to lower the cost of banking through a mobile-only platform, recently received preliminary and conditional approval from the Office of the Comptroller of the Currency. Varo still needs to apply and receive approval from the Federal Deposit Insurance Corp. and the Federal Reserve.

Colin Walsh, Varo’s co-founder and CEO, is optimistic that the company will be operating as a bank within a year. He characterized the OCC’s decision as a pivotal moment for banking — one that shows regulators are more willing to consider nontraditional models.

State regulators renew push to block OCC’s fintech charter (American Banker) Rated: A

State regulators said Wednesday they intend to refile a lawsuit against the Office of the Comptroller of the Currency in an effort to block it from offering a new federal bank charter for fintech firms.

The Conference of State Bank Supervisors said its board recently decided to proceed with another round of litigation against the national bank regulator now that the agency said July 31 it would offer a so-called special-purpose national bank charter to fintech firms.

This will be the state regulators’ second attempt at blocking the OCC in court.

Millennials in this American city are carrying the most debt (Ladders) Rated: B

New data from online loan marketplace LendingTree shows that San Antonio is the American city where Millennials have “the most debt,” with a median debt balance of $27,122 — not including mortgages.

Researchers took a look at “anonymized credit report data of My LendingTree users who live in the 50 biggest metro areas in the U.S.” to compile the data. They were born anywhere between the years 1981 and 1996.

The 10 cities where Millennials have the most debt

Here they are, plus the average percentages of what highly contributes to Millennials’ “total debt balances.” Again, these don’t include mortgages:

  1. San Antonio: median balance of $27,122, with car loans making up 43.2% of “total debt balances”
  2. Pittsburgh: median balance of $26,403, with student debt being 45.7% of all debt
  3. Austin: median balance of $26,164, with 18.1% of all debt being from credit cards and 37.1% being from car loans
United Kingdom

Stress testing at Funding Circle (Funding Circle) Rated: AAA

This means building a sustainable platform that allows investors to earn attractive and stable returns by lending to creditworthy businesses, during every stage of an economic cycle. Since 2010, globally we’ve improved access to affordable capital for more than 50,000 businesses, and opened up a new asset class for over 80,000 investors.

Source: Funding Circle

Fed stress parameters included:

Adverse Scenario Severely Adverse Scenario
GDP Falls 2 ¼ percent below Q4 2017 Falls 7 ½ percent below Q4 2017
Unemployment Rises to 7% Rises to 10%
Home Prices Falls 12% Falls 30-40%
Source: Funding Circle

Thinking of buying into the Funding Circle IPO? Read this first (AOL) Rated: A

Peer-to-peer lender Funding Circle fired the starting gun on its much-anticipated plans to go public earlier this month. The company, which is only eight years old, is looking to attract a value of £1.7bn and raise £300m in the process.

Since its founding, Funding Circle has transformed the market for business financing, matching everyday investors who have money to spare with businesses looking for funding to expand. In total, the company has put together £5bn in loans for small businesses since 2010.

However, if you’re thinking of buying into the IPO, there are several issues you need to consider first.

Barclays opens up mobile banking app to rival accounts (Fintech Futures) Rated: A

Barclays has become the “first” UK bank to allow customers to bring their other current accounts into its mobile banking app.

Barclays says this new feature gives customers a way to get a clearer picture of their day-to-day finances within its app. It uses API technology – all powered by open banking.With competition in UK banking tougher than an East End gangster, banks are trying to stand out and play a game of constant one-upmanship.

It’s also a riposte to the many fintech start-ups offering a similar service. For example, last month London-based personal finance app Bippit launched with the offer of an account connecting and savings service.

Monzo: When is a bank not a bank? (FT Alphaville) Rated: A

Monzo is frequently hailed as one of the most exciting challenges the tech industry poses to high street banks.

Wikipedia calls it a “digital, mobile-only bank”. Mashable summed it up as the “bank that’s apparently so cool it’s become a chat up line in London’s bars”. Its own stated ambition is to “build a better bank”. In April 2017, it acquired a banking licence.

But does Monzo actually behave like a bank?

Banks, under one interpretation, are economic inventions which create liquidity from an array of otherwise illiquid assets. Douglas Diamond, the US economist, describes a bank as “a lender financed with demand deposits”. Depositors sacrifice higher returns for the privilege of immediately being able to withdraw their capital whenever they want.

iwoca: We are the UK’s Fastest Growing SME Finance Provider (Crowdfund Insider) Rated: A

Online lender iwoca says it is UK’s fastest growing SME finance provider. The claim comes following the publication of the Sunday Times Hiscox Tech Track 100 which ranked iwoca 30th on the list.

The Sunday Times Hiscox Tech Track 100, published last Sunday, 9th September 2018. Ranked No. 30 on the ilst – which ranks Britain’s tech firms in regards to the fastest-growing sales. iwoca joins a group of prominent UK Fintechs recognized by the Times.

Proptech Startup Unmortgage Raises £10M in Seed (FinSMEs) Rated: A

Unmortgage, a London, UK-based proptech startup, raised £10m in funding.

Backers included Anthemis Exponential Ventures, and Augmentum Fintech plc.

The company intends to use the funds to expand operations and finance the part of the homes it purchases.

Crowdfunding – looking beyond equity investment (What Investment) Rated: A

At a time when banks were increasingly adopting the ‘computer says no’ approach, entrepreneurs and those involved with company start ups sought different ways of financing their ambitions.

Crowdfunding platforms including CrowdCube and Seedrs emerged, using technology to bring investors and companies thirsty for cash together.

Ten years later there are more crowdfunding platforms than ever, the top 10 crowdfunding platforms in 2018  as listed by What Investment.co.uk’s sister website Growth Businessinclude names such as Seedrs, CrowdCube plus RateSetter, Trillon Fund and Funding Circle.

P2PFN celebrates its second birthday (Peer2Peer Finance) Rated: B

PEER2PEER Finance News launched two years ago today!

The progress that has been made in two years is staggering. Most P2P platforms have become fully FCA authorised and many of them have launched IFISAs – which attracted £290m in the last tax year.

The UK’s largest P2P firms have cumulatively lent out more than £11bn, Zopa is getting closer to its bank launch and Funding Circle is floating on the main market of the London Stock Exchange next month.

China

China’s tech is addicted to debt (Technode) Rated: AAA

China has become addicted to debt. Now, its tech industry is hooked too.

It started innocently enough. Back in 2008, when the fallout of America’s own debt binge was giving the whole world a hangover, China engaged in a decisive and robust economic stimulus, injecting RMB 4 trillion into key sectors of its economy. Banks, mostly state-owned in China, were directed to lend more, particularly to other state-owned firms. As a result, China recovered quickly from the global financial crisis, even as the US and Europe struggled to get back on their feet.

However, even as the Chinese economy recovered, the banks continued to lend, and Chinese companies continued to invest, most notably in infrastructure projects. Not only did they invest, they invested A LOT.

Source: TechNode
European Union

Spotcap Issues Quarter of a Billion in Credit Lines to Businesses (Spotcap) Rated: AAA

Global fintech lender Spotcap has issued more than EUR 250 million in credit lines since its launch in 2014.

The company combines robust credit assessment principles with innovative technology to offer a smooth and straightforward loan experience. The fintech undertakes cash flow based, rather than credit-score based underwriting, resulting in a fair assessment of the real-time performance of a business.

In the last 12 months, Spotcap experienced more than 100 percent year-on-year growth in the volume of credit lines it provided, growing at a faster pace than the alternative finance industry, which recently experienced 41 percent year-on-year growth in Europe.

International

Fintech investment powerhouse Ribbit Capital aims for $ 420 million with its latest fund (Tech Crunch) Rated: A

Ribbit Capital, the financial technology investment firm whose portfolio includes hits like the no-fee mobile investment platform Robinhood; cryptocurrency wallet and marketplace provider Coinbase; and Root Insurance, the automotive insurance platform that just joined the billion-dollar startup club; is raising $420 million for its latest fund, according to a filing with the Securities and Exchange Commission.

The fund would be Ribbit’s fifth foray out with limited partners and its $420 million target is only a nominal increase from the $300 million it had set out to raise for its fourth fund last year.

Coinbase alone is now worth at least $8 billion on paper, and no one laughs when chief executive Brian Armstrong says that his company’s goal is to become the New York Stock Exchange of crypto securities.

Robinhood, another one of Ribbit’s portfolio darlings, is flirting with a $6 billion valuation after its latest funding round earlier this year — and has become synonymous with stock trading for a new generation of investors (despite some criticism about its business model).

 Australia

Fintech Prospa Ranks 6th in LinkedIn Top Startups List (Crowdfund Insider) Rated: AAA

Prospa says it has been named 6th on the 2018 LinkedIn Top Startups List. The list marks the 25 best startups to work for in Australia. Prospa adds that it is the top Fintech on the list as well.

Prospa is an online lender catering to small business. Prospa allows SMEs access to loans between $5,000 and $250,000, with approval and funding within as little as 24 hours.

Now in its sixth year, Prospa has established itself as delivering consistent high growth with a solid customer satisfaction NPS score averaging 77 and customer repeat rates of 69%.

Small business lenders pledge fairness under ASIC’s gaze (The Sidney Morning Herald) Rated: A

Fintech lenders say they’re moving quickly to review and amend any unfair contract terms before the watchdog comes knocking, but there are still questions about best lending practice.

Last week, alternative lender Prospa confirmed it had changed a number of contract clauses after receiving a query letter from the Australian Securities and Investments Commission (ASIC) back in June that arrived just days before the startup put the brakes on its planned ASX listing.

India

Authors:

George Popescu
Allen Taylor

Wednesday July 18 2018, Daily News Digest

Major US Banks' Active Mobile Banking Users

News Comments Today’s main news: SoFi partners with Ladder to offer life insurance. LendingClub has a new chief lending officer. BlueVine offers credit to QuickBook customers. Tencent, Alipay lose $1B due to payment rules. CreditEase Fintech Investment Fund ranked 3rd globally. Today’s main analysis: PeerIQ Marketplace Lending Loan Performance Monitor, May 2018. Today’s thought-provoking articles: JPMorgan, Wells Fargo mobile […]

Major US Banks' Active Mobile Banking Users

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Exclusive: SoFi teams up with Ladder to offer revamped life insurance (Fast Company) Rated: AAA

Social Finance (SoFi) today began offering life insurance to customers through a partnership with Ladder, a Palo Alto, California, startup. Customers who sign up for the co-branded service will be eligible for fully underwritten term life coverage worth up to $8 million. Most will get a policy quote instantly, sidestepping the hassle of a doctor’s appointment.

SoFi previously offered life insurance to its 500,000-plus members through Protective. But the customer experience was relatively traditional, and the value of connecting the service to SoFi was unclear. With Ladder, SoFi customers will be able to increase or decrease their coverage over time, as their needs change. SoFi, with its knowledge of customers’ overall finances, will be well-positioned to recommend such adjustments

LendingClub turns to outsider to oversee credit operations (American Banker) Rated: AAA

LendingClub has a new chief lending officer.

The San Francisco online lender said in a press release Monday that it had hired Ronnie Momen to oversee its credit strategy, including credit data use, analytics and innovative products. Momen will report directly to Steve Allocca, LendingClub’s president.

Momen previously was chief credit officer at the fintech company GreenSky. He was also chief credit officer for consumer unsecured products at Wells Fargo, where he was in charge of building risk capabilities for the company’s card and private-label products.

PeerIQ MPL Loan Performance Monitor: May 2018 (PeerIQ) Rated: AAA

  • Redesigned MPL Loan Performance Monitor tracks the delinquency rates, cumulative losses, cumulative prepays and transition matrices using public marketplace lending data that comprises unsecured consumer loans originated by Marketplace Lenders.
  • Show delinquencies (%), cumulative losses (%) and cumulative prepays (%) on this data set, broken out by annual vintages from 2013 – 2017. We further break the performance out by original loan terms of 36 and 60-months.
  • The right-hand axes show the outstanding loan balances broken out by either vintages or loan terms, which allows analysis of performance metrics in conjunction with the pool factor.
  • Overall, we notice that delinquencies and cumulative losses on newer vintages are higher while cumulative prepayments are lower than those seen on older vintages at the corresponding loan age.
Source: PeerIQ

OnDeck Announces Date of Second Quarter 2018 Earnings Conference Call (PR Newswire) Rated: A

OnDeck announced today that it will report financial results for the second quarter of 2018 on Tuesday, August 7, at approximately 7:00 a.m. ET. The company will host a conference call to discuss the results at 8:00 a.m. ET that same day.

The conference call will be webcast live on the company’s Investor Relations website and it can also be accessed toll free by dialing (866) 393-4306 for calls within the U.S., or by dialing (734) 385-2616 for international calls. The Conference ID # is 7156659.

JPMorgan Chase, Wells Fargo earnings calls show mobile banking trend (Business Insider) Rated: AAA

JPMorgan Chase and Wells Fargo announced their Q2 2018 earnings on Friday, which echo the trend of ongoing but decelerating growth in mobile banking as the market matures.

  • JPMorgan Chase counts 31.7 million active mobile customers, up 12% from 28.4 million in Q2 2017. That marks a slowdown in growth, both from the 13% annual growth it posted last quarter and from the 15% it posted in Q2 2017.
  • Wells Fargo counts 28.9 million total active digital users, 22 million of whom use mobile banking. That demonstrates slow annual growth of just 4% year-over-year (YoY) from its 27.9 million total active digital customers in Q2 2017, as well as a slight uptick from 28.8 million users in Q1 2018, which could indicate recovery of active users in the wake of the bank’s fake account scandal.
Source: Business Insider

This slowdown is likely because of saturation in the digital banking market. Eighty-three percent of consumers use mobile banking, making it nearly ubiquitous, according to Business Insider Intelligence’s Mobile Banking Competitive Edge Report (enterprise only). That saturation, not a decline in interest, is causing firms to add digital customers at a slower rate; they’re seeing customers new to banks rather than those new to mobile offerings.

LendingTree Study: Where Home Price Inequality is Highest (Guru Focus) Rated: AAA

LendingTree today released a study on where home price inequality is highest.

Key Findings:

  • Detroit, Birmingham, Ala. and Indianapolis have the highest home price inequality in the nation, with a level of inequality twice that of the most equal markets.
  • Salt Lake City, Portland, Ore. and Denver have the least home price inequality. The 95th percentile of home values is 3x the value of the 5th percentile in these markets, compared with over 10x the value in the most unequal markets.
  • High home prices don’t necessarily mean high inequality. The San Jose and San Francisco metros, with the highest values for the 95th percentile of homes ($2.7 million and $2.3 million respectively) ranked No. 41 and No. 33 out of 50 for inequality.
  • The metros with the most inequality tended to have very low prices for the 5th percentile of home values.Of the 10 most unequal markets, none had a 5th percentile home value of $100,000 or more, and averaged $48,500. The most equal markets had a $242,100 average value for the 5th percentile of homes.
  • The World Bank lists the income GINI for the U.S. at 0.415 in 2016. Only our top ranked city, Detroit at 0.446, was above this level. So income inequality is greater than home value inequality, a phenomenon also reflected in the fact that wealthier households don’t need to spend as high a portion of their earnings on housing.
Source: Lending Tree
Source: Lending Tree

Why financial companies are giving customers the velvet rope treatment (Market Watch) Rated: A

More than 1 million people waited to get access to a cryptocurrency trading platform on Robinhood. (The company did not respond to MarketWatch’s request for comment.) And over 100,000 people have signed up in the last year for the waiting list for Petal, a no-fee credit card that has not yet launched, the company said. SoFi Money, a bank account through the lender SoFi, would not disclose an official number on its waiting list, but said it was “multiple tens of thousands.”

KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2018-3 (Business Wire) Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Marlette Funding Trust 2018-3 (MFT 2018-3). This is a $402.31 million consumer loan ABS transaction.

This transaction represents the eighth securitization collateralized by unsecured consumer loans originated by Cross River Bank, under the Marlette Best Egg Platform and sold to Marlette Funding, LLC (“Marlette”) or its affiliate.

Preliminary Ratings Assigned: Marlette Funding Trust 2018-3

Class Preliminary Rating Initial Class Principal
A AA (sf) $292,588,000
B A (sf) $56,689,000
C BBB- (sf) $53,032,000

‘You get out what you put in’: Fintechs find success in QuickBooks Online’s ecosystem (TearSheet) Rated: AAA

Intuit essentially runs two different partner platforms: one open and one closed. Intuit’s closed platform generally consists of one to three, hand-picked partners in a few categories. For a handful of lucky lenders, Intuit offers the QuickBooks Financing Platform.

Limited in number, these integration partners were offered early access to the growing QuickBooks community of business owners. In 2016, Intuit tapped BlueVine, a business lender known for its factoring product, to offer credit to QuickBooks customers.

Source: Tearsheet

As CRE Lending Landscape Shifts, Nonbank Lenders Step Up (Forbes) Rated: A

Even though CRE loans celebrated a record-breaking year in 2017, according to a Mortgage Bankers Association (MBA) 

United Kingdom

Investment trust listings struggle in 2018 (Financial Times) Rated: A

Investment trusts raised £230m in June, 65 per cent less than the £654m raised in May and 81 per cent less than the amount raised in June 2017.

Twelve investment companies have come to market in the year to date, raising £1.1bn — 40 per cent less than the £1.7bn raised at the same point in 2017, when nine new trusts listed, but raised far more.

Fintechs such as P2P lenders can reduce risks of banking system (Peer2Peer Finance) Rated: A

PEER-TO-PEER lending has been cited by the Treasury as an example of fintech’s ability to reduce risk in the financial sector by reducing concentration.

The government released a response on Tuesday to the 2017 fiscal risks report, which outlines the actions it is taking to address the 57 risks outlined by the UK’s fiscal watchdog, the Office for Budget Responsibility.

The response noted “the comparatively large and highly concentrated UK banking system” as a financial risk to the UK.

Why the UK’s digital banks enhance its status as a global fintech hub (AltFi Opinion) Rated: A

Progressive regulation, government support, access to talent, to funding and to sophisticated capital markets infrastructure – these are the strengths most commonly cited in explaining London’s emergence as a global fintech hub. But there’s another, less-vaunted reason that is becoming increasingly important.

In part as a result of the factors listed above, London boasts perhaps the world’s most active digital banking sector. Between Monzo, Revolut, Starling, Tandem, Atom, Loot, Curve and Tide – to name but a few – it’s already a very competitive market, featuring at least a few billion dollar businesses and spanning several million customers.

PROPERTY P2P LENDING: A NEW CHOICE FOR INVESTORS (Raconteur) Rated: A

Take peer-to-peer (P2P) lending, for example. By connecting those with money to invest with those looking to borrow, it allows you to target what could amount to a healthy, inflation-beating return, with less of the ups and downs of the stock market. And transaction costs are often minimal, too, with many platforms totally free to use.

Property-backed P2P lending in particular has proven popular because the loans are secured on bricks and mortar. It means, should the borrower be unable to repay the loan, the property can be sold to help pay the debt, ultimately reducing the risk to the investor.

UK challenger BankNorth preps for launch (FinTech Futures) Rated: A

The new bank, based in Leeds in the north of England, is the creation of five founders – all with plenty of experience with the old order and one challenger bank in particular.

Nancy Butler (commercial director) has worked at Atom, Santander and RBS. Craig Iley (chairman) did a stint at Atom; while Jonathan Thompson (CEO) has experience at Santander.

Jon Hogan (director) worked at Atom. In addition, Richard Baker (MD savings) was employed at Atom and Metro.

On its website the bank says it is “aiming to transform the way SME lending is delivered”.

In terms of specifics, it asks for a minimum investment of £25,000 and interested parties can download an investment memorandum. It is also looking for expressions of interest and people can reserve their allocation in its investment round.

Swoon adds Klarna Slice It solution (Retail Technology Innovation Hub) Rated: B

UK-based online furniture retailer, Swoon, is rolling out Klarna’s consumer financing solution, Slice it.

This enables shoppers to buy items and make payments of £500 or more over six months and those of £1,000+ over 12 months.

China/Hong Kong

Panic Roils China’s Peer-to-Peer Lenders (Bloomberg) Rated: AAA

China’s savers are rushing to pull money from peer-to-peer lending platforms, accelerating a contraction of the $195 billion industry and testing the government’s ability to maintain calm as it cracks down on risky shadow-banking activities.

In some cases, savers are turning up at the offices of P2P operators to demand repayment, spooked by reports of defaults, sudden closures and frozen funds. At least 57 platforms have failed in the past two weeks, adding to 80 cases in June, the biggest monthly tally in two years, according to Shanghai-based Yingcan Group.

Tencent and Alipay set to lose $ 1bn in revenue from payment rules (Financial Times) Rated: AAA

New rules set by China’s central bank have the potential to wipe out more than $1bn in revenue for Alipay and Tencent; third party payment groups now need to hold all customer funds in reserve.

Previously payments groups were able to invest customer funds at banks to earn interest; the PBoC has been slowly implementing changes requiring 20 percent of funds to be held, then 50 percent and now 100 percent; the move is meant to protect fraud and protect customers according to the PBoC.

The changes do not affect mutual funds like Yu’E Bao.

HKMA and seven banks to jointly launch blockchain-based trade finance platform in September (South China Morning Post) Rated: A

The Hong Kong Monetary Authority and seven local lenders will launch a trade finance platform using blockchain technology in September, reflecting efforts by the city to bolster fintech development and close the gap with regional rival Singapore.

Lenders taking part in the project include HSBC and Standard Chartered Bank, Bank of East Asia, Australia and New Zealand Banking Group Limited, Hang Seng Bank, and DBS Bank, according to a statement.

Sina-Backed Fintech Platform Pintec Filed For U.S. IPO (Crunchbase News) Rated: A

Pinduoduo made waves this week after aiming for a $1.63 billion IPO in the United States. The Chinese company is only three years old. Following the Pinduoduo news, two-year-old Sina-backed fintech startup Pintec also filed for a United States-based IPO, hoping to raise $70 million.

The Beijing-based startup is a technology platform that provides financial services that connect businesses to their end users. Its software covers installment loans, personal loans, SME loans, wealth management, and insurance brokerage services. One of its most popular offerings is online lending, which facilitated RMB 3.9 billion loans for over 1.1 million unique borrowers by the end of 2017, per its filing.

European Union

Klarna prepares for launch of payment card and for expansion (Financial Times) Rated: AAA

Not many companies end up inspiring their own verb like Google. But there are small signs, at least in the UK, that it is happening to Klarna, the Swedish financial technology start-up.

“Klarna it,” a young woman urges her friend on Twitter who is hesitating about a purchase with online retailer Asos. Asos offers Klarna’s “pay later” function, which gives shoppers 30 days to settle their purchases and allows them to return items without ever having paid for them.

International

P2P Lender CreditEase’s Fintech Investment Fund Ranked 3rd Globally (Crowdfund Insider) Rated: AAA

CreditEase, a China based peer to peer lending platform, has been recognized for its Fintech venture fund by a CB Insights report. According to the report, the CreditEase Fintech Investment Fund is number three in the world when it comes to ranking the most active Fintech VCs in the world.

While CreditEase started life as an online lender, the company has morphed into a Fintech conglomerate providing robo-advisory services, crowdfunding, Insurtech and more. Additionally, CreditEase, and their Wealth Management Fund of Funds, is a limited partner in many Fintech VCs.

The Fund invests in five subcategories within Fintech: Lending, Payments, Personal Finance / Wealth Management, Enterprise Solutions, and Insurtech.

Venmo: how the payment app exposes our private lives (The Guardian) Rated: AAA

Anyone can track a Venmo user’s purchase history and glean a detailed profile – including their drug deals, eating habits and arguments – because the payment app lacks default privacy protections.

This was the finding of a Berlin-based researcher, Hang Do Thi Duc, who analysed the more than 200 million public Venmo transactions made in 2017. Her aim was to highlight the privacy risk from using a seemingly innocuous peer-to-peer app.

By accessing the data through a public application programming interface, Do Thi Duc was able to see the names of every user who hadn’t changed their settings to private, along with the dates of every transaction and the message sent with the payment. This allowed her to explore the lives of unsuspecting Venmo users and learn “an alarming amount about them”.

Source: Public By Default / Hang Do Thi Duc & The Guardian

Billion Reasons to bring Financial Inclusion with a frictionless Ecosystem (Global Coin Report) Rated: A

Globally, 1.7 billion adults remain unbanked, which means more than one-third of the world’s population does not have formal financial services. It is believed that bringing unbanked adults and businesses into the formal financial platform could generate about $380 billion in new revenues for banks.

LALA world is hoping to create a financial ecosystem for all, where services including low-cost remittances, cashless payments, peer-to-peer lending, fiat lending, etc.prevail under one umbrella. It is opening the door to regulated financial services stating that it has great potential to protect up to $42 billion from what it calls “the grey market.”

LALA world has the vision to reach people with limited resources through blockchain, without needing to understand the underlying technology.

India

5Paisa.com plans to raise ₹103.5 crore via rights issue to enter P2P lending business (Live Mint) Rated: AAA

Discount broker 5Paisa.com is planning to raise about ₹103.5 crore through a rights issue to enter the peer-to-peer (P2P) lending business, said chief executive Prakarsh Gagdani in an interaction with Mint.

5Paisa.com is a discount broker, which was listed in November 2017. The company is backed by the IIFL group, which is engaged in distribution of financial services and broking. It plans to use the funds for investing in improvisation of technology platform, scaling up its business operations and invest in alternative businesses.

Finzy to Trigger Pan-India Channel Tie-ups for P2P Lending Visibility: Amit More (Business World) Rated: A

Bangalore-based finzy is the premier peer-to-peer (P2P lending solution in India. It connects borrowers with investors and makes the entire process simple and easy. finzy makes the entire borrowing process simple and user friendly.  You can get your loan funded in as little as 48 hours.

Amit More, founder and CEO, finzy, tells us more. Excerpts:

Who are your borrowers, typically? Also, how do you determine profiles of lenders?

Around 80 percent of our borrowers are salaried and 20 percent are self-employed. Contrary to the perception that the P2P industry is the lender of last resort and only cater to borrowers not served by banks and NBFCs, we, at finzy, offer loans, starting at a best-in-class rate of 10.99 percent per annum.

Asia

Vemanti Group Announces Investment In eLoan, JSC (Vemanti Group) Rated: AAA

Vemanti Group, Inc. (OTC PINK:VMNT), a technology-driven holding company, today announced that it has entered into a definitive agreement to take 20% equity interest in eLoan, JSC (“eLoan”), a Fintech company based in Vietnam whose focus is to build a decentralized ecosystem of financial services starting with its business-centric online Peer-to-Peer (P2P) lending marketplace.

Based in Ho Chi Minh City, Vietnam, eLoan () is a P2P lending marketplace that match investors with borrowers, allowing anyone to lend money directly to small and medium-sized enterprises (SMEs). Established in December 2017, the company is operational and post-revenue.

eLoan is the brainchild of CEO Trung Vo, a respected C-level banking veteran, and CTO Tom Tran, a seasoned Internet commerce executive and serial entrepreneur. eLoan is the first P2P lending company in Vietnam focusing purely on serving SME clients with short-term loans. Businesses can borrow up to $250K for up to 6 months. The company determines the loan rate based on risk category and loan term. Unlike traditional banks, the approval process is much quicker with decision made in as little as 24 hours. Whole or fractional loans are participated by individual and institutional investors. Investors make money from the interest charged on participated loans which currently stands at 12%-20% annually while eLoan earns revenues by charging borrowers an origination fee on each funded loan. There is no fee charged to the investors.

Canada

Cadre, partially owned by Kushners, opens Toronto office (Real Estate News Exchange) Rated: B

Cadre, an online startup which makes commercial real estate investments, recently expanded into Canada through the opening of a Toronto office focused exclusively on software product development.

The Canadian office of the fintech firm is strictly for research, engineering, and product development and “we are not raising money or signing deals in the area,” says Raj Singh, director of product and head of Canadian operations at Cadre. Singh joined Cadre in December to run the Toronto office.

Authors:

George Popescu
Allen Taylor

Monday June 25 2018, Daily News Digest

FREED 2018-1 collateral characteristics

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

FREED 2018-1 collateral characteristics

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

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

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

Source: Lend Academy

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

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

FREED 2018-1 Deep Dive

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Credible
United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

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

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

European Union

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

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

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

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

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

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

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

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

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

The FinTech50 2018 (The FinTech 50) Rated: B

Listings include:

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

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

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

32. Funding Circle — $1 billion

Value: $1 billion | Raised: $413 million

Founded: 2009 |  | HQ: London

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

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

31. Kabbage — $1 billion

Value: $1 billion | Raised: $500 million

Founded: 2009 |  | HQ: Atlanta

What it does: Fast online small business loans.

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

24. ACORN OakNorth — $1.2 billion

Value: $1.2 billion | Raised: $486 million

Founded: 2015 |  | HQ: London

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

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

22. Tuandaiwang — $1.46 billion

Value: $1.46 billion | Raised: $380 million

Founded: 2012 | HQ: Dongguan

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

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

17. NuBank — $2 billion

Value: $2 billion | Raised: $527 million

Founded: 2013 |  | HQ: Sao Paulo

What it does: Brazilian app-only bank.

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

16. Affirm — $2 billion

Value: $2 billion | Raised: $720 million

Founded: 2012 |  | HQ: San Francisco

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

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

15. Avant — $2 billion

Value: $2 billion | Raised: $1.8 billion

Founded: 2012 |  | HQ: Chicago

What it does: Online personal loans.

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

13. Klarna — $2.5 billion

Value: $2.5 billion | Raised: $636 million

Founded: 2005 |  | HQ: Stockholm

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

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

9. GreenSky — $3.6 billion

Value: $3.6 billion | Raised: $350 million

Founded: 2006 |  | HQ: Atlanta

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

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

8. Credit Karma — $3.5 billion

Value: $3.5 billion | Raised: $868 million

Founded: 2007 |  | HQ: SanFrancisco

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

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

7. SoFi — $4 billion

Value: $4 billion | Raised: $2.1 billion

Founded: 2011 |  | HQ: San Francisco

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

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

3. Lu.com — $18.5 billion

Value: $18.5 billion | Raised: $1.7 billion

Founded: 2011 | HQ: Shanghai

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

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

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

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

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

Australia

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

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

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

India

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

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

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

Asia

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

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

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

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

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

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

Africa

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

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

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

What exactly is FINT?

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

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

Authors:

George Popescu
Allen Taylor

Monday June 11 2018, Daily News Digest

credit card issuers

News Comments Today’s main news: How to invest in the sharing economy. Elevate expected to report $184.82M in sales. Funding Circle scraps downloadable loanbook. Ant Financial valued at $150B. Standard Chartered to apply for virtual bank license in Hong Kong. Today’s main analysis: Marcus update. Today’s thought-provoking articles: PeerIQ lending earnings insights. Alternative uses of fixed-income markets. LendingTree Personal Loan Offers […]

credit card issuers

News Comments

United States

United Kingdom

China/Hong Kong

International

Other

News Summary

United States

3 Ways to Invest in the Sharing Economy (Motley Fool) Rated: A

While not a hard asset like a home or car, lending services have also come into the crosshairs of the sharing economy. Lending Club, the nation’s largest peer-to-peer lender, gets borrowers lower interest rates and smaller fees than a credit card or other traditional lending source typically offers by connecting them with investors on its online platform.

Since becoming a public company in December 2014, Lending Club revenue has soared more than 50% as seeking out alternative means of funding has increased in popularity. That sounds like a great investment, but Lending Club has actually fallen on hard times. The stock is down 75% from its 2014 debut as a result.

Other concerns, like increased competition, have surfaced: Goldman Sachs‘ online-only bank Marcus is just one of them. But there is some hope for this “sharing” company as first-quarter 2018 revenue increased 22% on an 18% increase in lending origination.

Lending Earnings Insights: 2Q2018 (PeerIQ) Rated: AAA

Where are we in the credit cycle? Most lenders see the US consumer in a good place with high consumer confidence, home prices, and higher take-home pay from tax cuts. The economy is at or near full employment with low wage and productivity growth. GDP gains are driven by consumer spending, fueled in term by consumer credit (8% YOY growth – well ahead of GDP and wage growth). Over the next few quarters due to stimulus and short-term effects there may be robust GDP prints, however, 16 to 24 months out we expect a lower pace of growth and heightened recession risk.

Credit re-normalization continues across all major lending groups. Credit performance this quarter is generally in-line with expectations. We see some of the lowest charge-offs and delinquencies at near-prime and retail lenders such as Enova and OneMain. Online lenders such as LendingClub have increased their charge-off estimates by ~50 bps.

Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions by 35% although loan growth was only 16% and Discover increased loan loss provisions by 26% on loan growth of 9%. Capital One saw a drop in loans outstanding.

Read the full report here.

Marcus Update (PeerIQ), Rated: AAA

GS Marcus Update

Personal loans are just the start, with possible expansion opportunities for Marcus into mortgages, credit cards, auto loans and insurance. There are 4 key product areas – Borrow, Spend, Save, Protect with 12 separate products listed with a focus on Clarity Money. Since its launch Marcus has served ~1.5 Mn customers with $3+ Bn loans originated and $20+ Bn in online deposits.

GS views their lack of legacy banking software as a competitive advantage and has invested heavily in building their platform. GS has invested, through capital spending and operating losses, $600 Mn, including reserves, up by $100 Mn.

GS is building Marcus as a business “for the next 50 years” but is expanding the personal loan program cautiously as the credit cycle may turn. GS wants to integrate the consumer platform with its wealth management business.

Source: Goldman Sachs

PeerIQ Webinar: Lending Earnings Insights Report – 2Q2018 (PeerIQ) Rated: B

PeerIQ is hosting a webinar by CEO Ram Ahluwalia on “Lending Earnings Insights 2Q2018” on Wednesday 6/13 at 3 p.m. EDT. We look forward to hosting you! Click to register and to add the invitation to your calendar.

$ 184.82 Million in Sales Expected for Elevate Credit (ELVT) This Quarter (StockNews Times) Rated: AAA

Equities analysts expect that Elevate Credit (NYSE:ELVT) will report $184.82 million in sales for the current quarter, Zacksreports. Two analysts have issued estimates for Elevate Credit’s earnings, with estimates ranging from $182.44 million to $187.20 million. Elevate Credit posted sales of $150.47 million during the same quarter last year, which suggests a positive year over year growth rate of 22.8%. The business is scheduled to issue its next earnings results on Monday, July 30th.

According to Zacks, analysts expect that Elevate Credit will report full-year sales of $803.08 million for the current fiscal year, with estimates ranging from $801.06 million to $805.10 million. For the next financial year, analysts expect that the firm will report sales of $930.53 million per share, with estimates ranging from $920.75 million to $940.30 million. Zacks’ sales averages are an average based on a survey of analysts that follow Elevate Credit.

Mulvaney Fires All 25 Members of CFPB Advisory Board (PJ Media) Rated: A

Mick Mulvaney, acting director of a controversial consumer finance bureau, fired an advisory board after the members criticized the new leadership for not taking their advice.

The Consumer Financial Protection Bureau (CFPB) announced Wednesday that the 25 current Consumer Advisory Board members will be replaced, and will be ineligible to reapply to the board, the Washington Post reports.

Eleven advisory board members held a news conference Monday calling out Mulvaney for canceling several meetings — which are required to take place under the Dodd-Frank Act which created the agency.

ALTERNATIVE USES OF THE FIXED-INCOME MARKETS (All About Alpha) Rated: AAA

The report, called “Building Resilience into Portfolios,” explains that the traditional use of fixed income in a portfolio is quite straightforward. That use generally involves a long position on debt of various sorts (sovereign, corporate, developed or emerging markets), that is relied upon to reap premiums from duration and credit risk.

But there are alternative uses of these instruments, and given the “rapid pace of change within fixed-income markets” in recent years they have become more available than ever, with the goal of securing absolute return, “steady positive returns above cash.”

These strategies include the exploitation of relative valuation differentials and/or the taking of short positions in order to profit from rising yields.

One obvious problem is that the central banks are about to start (in some jurisdictions have started) raising rates, reversing the tailwind that has benefitted the traditional use of FI in recent years.

Alternative investors in FX, though, have the flexibility to avoid such problems. They can “avoid issues, sectors, or sub-categories of assets altogether, as they see fit, investing solely in their highest conviction views.”

LendingTree Personal Loan Offers Report – May 2018 (Lending Tree) Rated: AAA

Offered APRs continue to rise for all borrowers, while lenders offer slightly lower loan amounts. 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 63% of all loan inquiries.

Source: Lending Tree

Use Technology To Play The Real Estate Investment Market (Forbes) Rated: A

In Chicago, a new startup has introduced a tool that builds algorithms based on questions completed by the investor to establish the baselines. The tool then finds both on- and off-market deals that suit the preferences of the investor.

PayPal is launching a pop-up art exhibit in New York City (Tearsheet) Rated: A

PayPal wants its customers to get a tangible experience of what cash-back rewards look like, adding a physical and emotional association with the digital financial-services company.

PayPal is hosting a live walk-through pop-up exhibit in New York City on June 8 and June 9, the first time the company has hosted an experiential event of this kind. Anyone can attend the free event with music and refreshments. PayPal is the latest financial company to add realness to what many consumers see as abstract, transactional products.

Real Estate Crowdfunding Earns $ 10 Million in First Week (DS News) Rated: A

Atlanta-based real estate mogul Jay Morrison recently launched a new real estate crowdfundingprogram, and it’s finding some strong early success, having raised nearly $10 million in its first week.

The Tulsa Real Estate Fund is described as “the first African-American owned Regulation A+ Tier II crowdfund designed to revitalize urban communities across the U.S.” According to the group’s press release, the Tulsa Real Estate Fund “allows both accredited and non-accredited investors to collectively invest and own real estate projects around the country that are unique, diversified, and yield a reasonable rate of return.”

Ironhorse Funding Raises $ 30M of Capital from Crestline Investors (FinSmes) Rated: A

Ironhorse Funding, LLC, a Beverly, MA-based financing platform that provides operational and capital support for dealers and distributors in the motorcycle and powersports market, raised $30M strategic financing.

Crestline Investors made the investment through the firm’s Opportunity Fund III platform, which seeks to deploy capital where Crestline finds inefficiencies in the primary credit markets in North America and Europe.

The funding will be used to provide alternative financing solutions for consumers in the motorcycle and powersports market.

SBI HOLDINGS INC ORDINARY SHARES (OTCMKTS:SBHGF) on Focus After Report of Less Shorts (Fricisco Fastball) Rated: A

The stock of SBI HOLDINGS INC ORDINARY SHARES (OTCMKTS:SBHGF) registered a decrease of 3.53% in short interest. SBHGF’s total short interest was 3.16M shares in June as published by FINRA. Its down 3.53% from 3.28M shares, reported previously. With 11,600 shares average volume, it will take short sellers 273 days to cover their SBHGF’s short positions. The short interest to SBI HOLDINGS INC ORDINARY SHARES’s float is 1.59%.

The stock decreased 1.20% or $0.32 during the last trading session, reaching $26.41. About 3,352 shares traded. SBI Holdings, Inc. (OTCMKTS:SBHGF) has 0.00% since June 8, 2017 and is . It has underperformed by 12.57% the S&P500.

How two fintech entrepreneurs are rising from the ashes (San Francisco Business Times) Rated: A

Renaud Laplanche at Lending Club and Mike Cagney at SoFi were high-profile fintech founders, but each left under a cloud. Now they are seeking quick comebacks — and a measure of vindication.

Debt restructuring company Lendstreet receives $ 7m funding (Fintech Futures) Rated: A

US-based Lendstreet has just closed a $7 million series A equity round, led by Prudential Financial and Radicle Impact.

Prudential and Radicle join Lendstreet’s existing investors Accion, the Centre for Financial Services Innovation (CFSI), Serious Change, Crunchfund, Kapor Capital, and Cross Culture Ventures in participating in the round.

Knowledge Gap Contributing To Housing Market And Affordability Concerns, Cautiousness (PR Newswire) Rated: A

Ten years after the 2008 housing crisis, Americans eye the housing market with caution, as more than half (53%) of Americans who have or plan to buy a home admit they’re concerned about their ability to afford a home in the current market, according to a recent study of college-educated adults. The findings, release today by national online lender and FDIC-insured bank Laurel Road, also reveal that Americans on average believe a similar housing crash will occur in the next five years, and nearly one-fifth of respondents anticipate a crash in less than one year.

The survey found that women in particular are potentially underestimating affordability, as they are significantly less likely than men (49% vs. 59%) to be familiar with the alternatives.

This lack of knowledge around alternative options potentially contributes to the fact that more than one-third (35%) of respondents – and 46% of millennials – do not feel confident that they could currently afford a 20% down payment. Women (45%) feel particularly less confident than men (24%), while more than two-fifths (42%) of student loan carriers do not feel confident.

United Kingdom

Funding Circle scraps downloadable loanbook (Peer2Peer Finance) Rated: AAA

FUNDING Circle has withdrawn its downloadable loanbook and stopped publishing loan performance data on a daily basis.

The peer-to-peer business lender announced on Thursday that it has launched a new statistics page which will be updated every three months.

The platform also announced that it has partnered with analytics firm AltFi Data who will provide independent verification of its quarterly loan information.

Foreign investment in UK technology firms doubles in just one year (The Telegraph) Rated: AAA

British tech businesses attracted $7.8bn of funding last year, which was almost double the amount received in 2016. Research by Dealroom and Tech Nation showed that the UK’s venture capital investment last year was higher than Germany’s total of $3.2bn and France, which brought in $2.8bn.

According to a report by EY, there was a 22pc increase in digital investment into the UK, which helped to offset a decline in investment to sectors such as a financial services and logistics, due to investor concerns over Brexit.

New SME funding hub will boost awareness of P2P (P2P Finance News), Rated: A

PEER-TO-PEER finance resources will be included in a new funding hub for high-growth businesses looking to scale up in the UK.

The state-backed development bank has partnered with 12 industry bodies to provide information on 17 types of finance, including P2P lending.

Silicon Valley CTO joins UK fintech MarketInvoice (PCR), Rated: A

Fintech start-up MarketInvoice has appointed Rija Javed as its chief technology officer (CTO) as the company looks to invest heavily into its technology. Rija Javed joins from Wealthfront, a leading Silicon Valley based start-up.

P2P fund boss Simon Champ exits Pollen Street Capital (AltFi News) Rated: B

P2P fund pioneer Simon Champ has left his role as head of the investment manager of the £735m P2P Global Investments trust, AltFi can exclusively reveal.

Champ was a founding partner of P2P Capital Solutions which later became MW Eaglewood Europe and was the driving force behind the launch of the P2P Global Investments trust (P2P GI), raising a large seed portfolio for the investment trust from respected fund managers such as Neil Woodford and Mark Barnett.

BNP Paribas Asset Management launches SME alternative lending platform, completes first UK loan (AltFi News) Rated: A

BNP Paribas Asset Management has completed its first UK loan on its new SME lending platform.

The loan, a six year senior unsecured amortising loan, was made to a specialist recruitment services company based in the West of England.

Leading the way (Peer2Peer Finance) Rated: A

SINCE its fifteen minutes of fame back around ‘OB Day’ on 13 January, when excited media reports promised the dawn of a new era of high-tech banking, Open Banking has slipped back into the fintech background, accompanied from some quarters by accusations of having been something of a damp squib.

But such claims misunderstand the nature of the beast, says Imran Gulamhuseinwala, implementation trustee of the snappily-named Open Banking Implementation Entity (OBIE) which develops and tests the APIs on which the  system is built.

There are a handful of peer-to-peer lending platforms already active in Open Banking, including Zopa and Lending Works.

LendInvest’s Buy to Let Product Propels Boom in Hiring as Demand Surges (Crowdfund Insider) Rated: B

Online mortgage lender LendInvest reports it is scrambling to hire new employees due to the demand of its Buy-to-Let (BTL) product. The LendInvest team has now grown to 15 people in the short period since the  BTL product was launched in November 2017.

Pike, joined the team from Fleet Mortgages.

LendInvest has also hired field-based Business Development Manager, Shane Wallace to cover the East of England. Shane brings over 10 years’ experience from Aldermore, where he was most recently employed as a Commercial Mortgage Manager.

China

Jack Ma’s Ant Financial Valued Around $ 150 Billion After Funding Round (Wall Street Journal) Rated: AAA

China’s Ant Small and Micro Financial Services Group Co. on Friday said it raised around $14 billion from domestic and global investors in one of the largest private-capital raises on record.

Standard Chartered says it will apply to operate a virtual bank in Hong Kong (SCMP), Rated: AAA

Hong Kong and London-listed Standard Chartered plans to apply for a virtual bank licence, making it the first traditional bank seeking a licence locally to operate purely online without physical branches.

European Union

The race to build Europe’s Robinhood: Invstr, Freetrade, Revolut, Dabbl and more (Business Insider) Rated: AAA

Startups across Europe are racing to try and replicate the success of Robinhood, the hot US stock trading app. San Francisco-based Robinhood offers a zero-fee trading app that has taken off with young Americans. Founded in 2013, it claims to have 4 million customers and in May hit a valuation of $5.6 billion. This success has not gone unnoticed. Fast-growing UK fintech startup Revolut on Thursday announced plans to build a commission-free stock trading platform, similar to the way Robinhood works.

Brokers are charging people as much as £5.00 ($6.70) per trade and the user interfaces are typically clunky, slow and confusing for consumers. The pain points are clear for us and the room for improvement is massive. We’ve just done some research and found 94% of millennials don’t actually invest but do want to, Ackred said. There are 16 million millennials just in the UK and 100 million more in Europe who are new to investing and have no good options to start.

International

The Center for Financial Inclusion Digs Into the Global Findex 2017 Numbers (Lend Academy) Rated: AAA

Source: Lend Academy

The Center for Financial Inclusion, part of Accion, have released a follow up report digging into the Findex data and the picture is less rosy than what was highlighted in the World Bank’s initial report.

On the surface it looks like the world is making good progress towards financial inclusion with the Findex report showing that 68% of adults globally having some kind of bank account versus 61% in 2014 and 51% in 2011. That is rapid progress.

But CFI found a different story when just focusing on active accounts, those accounts that had some kind of transaction in the past 12 months. This takes the percentage down to 55% and what is worse the gap is widening between total accounts and active accounts indicating a growing number of people who open an account but never use it. This is true for both developing and high income countries but the gap is getting much wider in developing countries as shown in the graphic below.

Source: Lend Academy

SuperMoney Launches No-fee Financing Platform (DeBanked) Rated: A

At the Finovate Spring 2018 conference, CEO Miron Lulic and CFO Jesse Stockwell presented the company’s new SuperMoney No-fee Financing platform, which allows merchants to obtain point of sale financing from online lenders and banks.

The new platform allows a small business merchant, like a furniture store, to create a free profile that is co-branded with SuperMoney. With the profile, the merchant can easily see when a customer has applied for financing and follow up.

According to a Forrester Consulting study on SuperMoney’s website, businesses that offer point of sale financing enjoy an average increase in sales of 17 percent and an average increase in order value of 15 percent.

Spotting a Scamcoin: Ethconnect (Coin Clarity) Rated: B

While the term “lending platform” might sound harmless and even beneficial to society, it was never disclosed outright to whom the coins were being lent or for what exact purpose they were being lent (though they did have the courtesy to mention “volatility software” – a trading bot concept directly plagiarized from Bitconnect). They were in fact being “lent” to Ethconnect themselves. This lack of detail did not stop hundreds of people, blinded by the prospects of huge profits, from throwing thousands of dollars at the project. But also unlike Bitconnect, none of them would ever see another penny of it again.

Australia

Prospa founders admit float lost ‘vital momentum’ (Sidney Morning Herald) Rated: AAA

The co-founders of small business lender Prospa maintain the company can return to the public markets for a future float, after a last-minute regulatory query this week created “confusion” that sapped the listing of vital “momentum.”

India

Digital SME Lenders Bank On Co-Lending To Make Their Presence Felt (Bloomberg Quint), Rated: AAA

If corporate lending was the flavour of the season at the turn of the decade, then retail lending has captured the attention of financiers over the last few years. Now, it is lending to the country’s small and medium enterprises, which is attracting increased focus from both traditional and new-age financial sector entities.

Capital Float, ranked among the country’s largest digital lending platforms, disbursed Rs 1,500 crore to MSMEs in 2017-18 out of a total portfolio of Rs 2,500 crore, according to information provided by the company. The ticket size of loans ranged from Rs 50,000 given to small local businesses to Rs 8-10 lakh loaned to larger SMEs.

Latin America

Fintech Regulation Promotes Invocation In Brazil (Mondaq) Rated: AAA

Resolution no. 4.656/2.018 published by the Brazilian Central Bank on 26 April,  which regulated credit fintechs in Brazil, opens the door of the highly concentrated banking sector in Brazil, so that financial technology companies can offer products and financial services in the credit market. Today, credit fintechs already operate in the financial market, but always through a financial institution duly regulated by the Brazilian Central Bank (CB).

With this new regulation, two types of financial institutions with different business models were created. They are: the “Sociedade de Crédito Direto” (SCD) (“Direct Credit Company”), which will carry out credit operations only using its own financial resources, and the “Sociedade de Emprésimo entre Pessoas” (SEP), (Peer-to-Peer Loan Company), which will carry out credit operations only as a financial intermediary without retaining risks or using their own resources, known in the market as “peer-to-peer lending”. Both institutions, after approval by the Central Bank (CB), will be authorized to operate, only, through an electronic platform.

Asia

China’s fintech companies are exporting AI and big data to Asia’s ‘laggard’ banking markets (SCMP), Rated: AAA

Chinese fintech companies have made headway in expanding their business to Southeast Asian markets, as they increasingly find their know-how in big data and artificial intelligence being sought after by Asian financial institutions in risk management and compliance.

Online consumer finance platform Weshare, which offers consumer loans through its mobile app, says it is applying for a P2P licence from Indonesia’s central bank.

Korean web harvesting giant is ready to scrape data around the world (Korea Joongang Daily) Rated: A

We also have smaller fintech start-ups as our clients. One of them is Bomapp, an insurance service application that is designed to offer insurance advice and find redundant coverage of registered insurance. For a start-up like Bomapp, we don’t charge per piece of data because we acknowledge that start-ups lack funds. Instead, we agreed to take equity from Bomapp.

As P2P start-ups become more active, we also provide user data for them. Among our clients are Lendit and 8percent. They use the data to assess credit ratings and get information about individual asset size. They try to use the online data because the P2P companies pursue a different credit rating approach to banks. We see there is a great opportunity in the fintech industry because they are keen to venture into new businesses.

Authors:

George Popescu
Allen Taylor

Thursday May 31 2018, Daily News Digest

places that owe the most in student debt

News Comments Today’s main news: Online lenders tighten rules against default wave. UK P2P lenders join effort to overturn Brexit. Consumer credit sees the most financial complaints in UK. Today’s main analysis: Where is the most student debt? Today’s thought-provoking articles: How regulations will impact Ant Financial. The 7 most innovative fintech companies. Where is the fintech innovation right […]

places that owe the most in student debt

News Comments

United States

United Kingdom

China

International

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News Summary

United States

Online lenders tighten rules as default wave rattles investors (American Banker) Rated: AAA

It’s gotten a lot harder to borrow money from the raft of fintech firms looking to bring online lending into the mainstream.

Besieged by a wave of defaults after several years of rapid growth, the biggest online lenders have been forced by bond investors to tighten underwriting standards. Social Finance, Prosper, LendingClub and Avant now demand higher average credit scores and offer shorter maturities to boost the quality of loans they repackage into asset-backed securities.

The shift in the $30 billion market comes after a swarm of borrower defaults in the past three years rattled ABS investors. It also marks a coming of age of sorts for the fintech startups that offered cut-rate loans to build a customer base. Now, with rates rising and a potential economic slowdown looming, the move toward higher-quality from the push for quantity has taken on added urgency.

According to Kroll, the weighted average of FICO credit scores of Prosper’s loans packaged in ABS increased to 717 in a March 2018 deal from 704 in a sale two years earlier.

LendingTree Study: Which Places Have the Most Student Debt? (PR Newswire) Rated: AAA

LendingTree today released its study on the places with the most student debt. To determine whether there are geographic variations in student debt, LendingTree analysts looked at a sample of anonymized users who logged into My LendingTree in the first quarter of 2018 and calculated how many had student loans, as well as the other reported statistics related to their balances.

Source: Lending Tree

Wells Fargo Plans to Expand Auto Lending Again (Lend EDU) Rated: A

Wells Fargo & Co. expects to increase its auto lending again. In mid-2017, Wells Fargo decided to reduce car financing and tighten its underwriting standards. In February 2018, the firm said it intended to finish consolidating its regional car loan centers by April, and that lending would expand within two quarters, reported Bloomberg.

For lenders in a $1.2 trillion U.S. auto loan market, they face a landscape with falling vehicle resale prices, making it difficult for them to soften losses from repossessing cars when borrowers default.

Principal Financial acquires digital advice startup RobustWealth (Investment News) Rated: A

Principal Financial Group is acquiring financial technology startup RobustWealth to improve its own technology offering and expand distribution capabilities among the banking, broker-dealer and registered investment adviser channels.

Principal also sees the RobustWealth’s platform — which includes digital advice, goal-based investment tools and client onboarding — as providing the foundation for a direct-to-consumer robo-adviser in the future.

What to Do When You Lend Family Money But They Can’t Pay You Back (Entrepreneur) Rated: A

Like many people, Entrepreneur Network partner Jeff Rose once has convinced himself it was a good idea to loan money to a family member. In reality, the situation can get messy when this close personal connection cannot return the investment. This does not mean Rose has given up on peer-to-peer lending, which is a helpful tool that can streamline the loan process.

OppLoans Named One of the Country’s Best Workplaces by Inc. Magazine (Markets Insider) Rated: A

Online lender and service provider OppLoans has been listed as one of the country’s 2018 Best Workplaces by Inc. Magazine. The award determination was based on employee survey results in areas like benefits, perks, executive leadership and opportunities for career development.

OppLoans enjoys a rating of 4.9 out of 5 stars on Glassdoor as well as a 98 percent retention rate and 99 percent approval rating for CEO Jared Kaplan. Last December, Glassdoor rated the Chicago-based startup as the sixth-best place to work nationally for small-to medium-sized businesses. The firm was named #219 on the 2017 Inc. 500 list of fastest-growing companies and the third-fastest growing technology company in Chicago by Built in Chicago.

Autoloans Company Lendbuzz Secures $ 30 Million in Funding (CTech) Rated: A

Boston-headquartered car financing service Lendbuzz Funding LLC has raised $30 million in financing, the company announced Tuesday. The round was led by BHI, the U.S. division of Israel-based Bank Hapoalim, by Viola credit, the growth and venture lending arm of Israel-based Viola Group, and by U.S.-based ConnectOne Bank.

The company, which currently offers its services in most U.S. states, says it reviews loan requests within 24 hours and transfers money immediately upon approval. Since its establishment, the company raised $43 million in both debt and equity funding.

Fifth Third Bank eBus offers free financial advice (The Blade) Rated: B

For the next week, a large bus operated by Fifth Third Bank will travel throughout Toledo, offering residents free money management advice and job-searching services.

The bus, called the Fifth Third Bank Financial Empowerment Mobile, or eBus, was located at the Lucas Metropolitan Housing Authority on Wednesday, and though it’s operated by Fifth Third, its services can be used by any residents no matter which bank they use, said Loretta Humphrey-Cruz, community development relationship manager.

PLI 23rd Annual Consumer Financial Services Institute (JD Supra) Rated: B

The third location of PLI’s 23rd Annual Consumer Financial Services Institute will take place in PLI’s San Francisco Conference facility and via concurrent live Webcast on June 25-26, 2018.  This will be the first time in many years that the Institute will take place in San Francisco.  Since the first location of this event in NYC on March 26-27 was well-attended, and the second location in Chicago on May 7-8 was sold-out, anyone interested in attending the program in San Francisco is encouraged to act quickly to register.

United Kingdom

Tech Entrepreneurs Launch Campaign to Reverse Brexit Vote (Forbes) Rated: AAA

Could Britain’s leading technology entrepreneurs derail Brexit? More than 80 innovators and investors from across the UK’s tech sector have launched a new group, Tech for UK, which will campaign for a meaningful vote on the final terms of the Brexit agreement that the British Government is currently negotiating with the European Union. Such a vote should give Britons the option to vote for the UK to remain in the EU, Tech for UK argues.

The group boasts a string of high-profile business leaders from the tech sector, including Martha Lane-Fox, best-known as the co-founder of Lastminute.com, Giles Andrews, one of the founders of peer-to-peer lending pioneer Zopa, and George Bevis, the CEO of Tide Bank. It also features leading venture capital and private equity investors, such as Simon Murdoch, the managing partner of Episode 1 Ventures.

Consumer credit made up the bulk of financial complaints last year (Peer2Peer Finance) Rated: AAA

The FOS annual report for 2017/2018 found consumer credit products, which includes some peer-to-peer lending as well as payment protection insurance, accounted for the most complaints at 36,349 last year, up 40 per cent.

The Ombudsman upheld 47 per cent of complaints, up from 45 per cent a year before.

There was also an eight per cent increase in complaints about unsecured loans to 6,909, while credit card complaints were up 15 per cent to 11,073.

How to invest in property without buying a home (City A.M.) Rated: A

Over the past few years, property-oriented investment companies have been coming in thick and fast, bolstered partly by the launch of the Innovative Finance Isa (IFISA).

The minimum investment can be as little as £10, which isn’t a patch on the huge deposits needed to buy a house (the average deposit in London is more than £90,000).

Robo-rumble: Will FCA scrutiny stop digital services moving further towards advice? (Money Marketing) Rated: A

The FCA reviewed seven firms offering online discretionary investment management services and three firms giving automated advice.

It found service and fee-related disclosures at most online discretionary investment management firms in its sample were unclear.

Some firms did not make clear whether their service was advised, non-advised, discretionary or non-discretionary. Others also compared their fee levels with their peers in a “potentially misleading way”. For example, they compared a non-advised, non-discretionary service with a discretionary service solely on a cost basis without explaining the difference in the nature of the service.

FIVE SPEAKERS JOIN ‘FUTURE OF FINTECH’ EVENT LINE-UP (Business Cloud) Rated: B

Five speakers from the world of FinTech have been confirmed for BusinessCloud’s The Future of FinTech event in London on 12 July.

Nicola Horlick, a former investment banker turned high-profile player in the peer-to-peer (P2P) lending market, is the headline speaker for the breakfast event.

China

How Will Ant Financial, China’s Fintech Giant, Be Impacted By New Regulations? (Forbes) Rated: AAA

Regulations are expected to be implemented on money market funds. Ant Financial’s main money market fund, Yu’e Bao, has been rated as much weaker than its 

GXChain (GXS) Review – A Blockchain-based Commercialized Data Marketplace (Chain Bits) Rated: A

With the proliferation of data on the internet, there are many pain points for individuals. Since you do not own your data, someone can sell you information and personal data without sharing profits. In addition, data is often scattered among multiple platforms, making it difficult to manage. Finally, data is difficult, if not impossible, for individuals seeks to monetize and earn from it. They don’t know how the blockchain could be applied in this scenario to better their lives.

GXChain solves these pain points by obtaining user consent before collecting and storing user data on a blockchain.

GXChain wants to be the data trading network that protects user privacy and offers copyright protection and usability at the same time. It has real-world applications in insurance, online lending, consumer loans and banks.

International

7 most innovative Fintech companies right now (Forex News Now) Rated: AAA

Stripe-is one of the most valuable Fintech startups. It was worth over $9 billion in 2016.

Ant Financial-has a market capitalization of $60 billion, which makes it the most valuable Fintech company in the world.

Atom Bank-has raised over $290 million in financing.

Robinhood-Valued at $5.6 billion, offers its customers a mobile wallet that allows trading shares and exchange-traded funds without paying commissions.

Lufax-is an online peer-to-peer lending platform. It matches borrowers with investors for a fee of 4% and is valued at over $18.5 million.

SoFi-is valued at over $4.4 billion.

Coinbase-has over 13 million users and makes more than $1 billion in revenue a year.

Where In the World Is Fintech Innovation? (Bank Innovations) Rated: AAA

China is also at the forefront of innovation. The government is actively cultivating fintech there.

Fintech companies like Qudian, LuFax, and ZhongAn (owned by Ant Financial), China’s first online-only insurer, are now emerging. Investment bank CLSA ranks ZhongAn as the sixth most valuable e-finance company in the world. The Chinese government has also designated development zones, such as Zhongguancun and Shenzhen, for innovation industries.

Source: Bank Innovation
Australia

Banks’ $ 220m bill for dudding customers to rise ‘significantly’ (The Canberra Times) Rated: A

Banks are set to refund “significantly” more than the $220 million already set aside for financial advice clients who were charged for services that were never provided, as institutions search their files for customers who were ripped off.

What you should look for when buying a partially renovated house (Domain) Rated: A

A recent survey by online lender State Custodians found 52 per cent of people would be open to a renovation project for their next purchase but only 19 per cent of people would be keen on tackling a full fixer-upper.

On the other hand, a quarter of respondents would prefer taking on a partially renovated home as a project, with Millennials in particular more open to the idea of buying a half-renovated house.

India

ICICI Bank also wants to be a fintech (The Ken) Rated: A

In mid-2017, B Madhivanan, the chief technology and digital officer of ICICI Bank, met Rohan Angrish, the chief technology officer of online lender Capital Float. Madhivanan had questions about online lenders’ small-ticket loans. Fintechs like Capital Float lend to underserved segments like kirana stores that banks don’t normally touch.

Asia

Funding Societies partners with UOB Malaysia to accelerate small business growth (Deal Street Asia) Rated: AAA

United Overseas Bank (Malaysia) Bhd has partnered with regional peer-to-peer financing platform Modalku Ventures Sdn Bhd (Funding Societies) to connect startups and small businesses with alternative financing solutions.

Through the partnership, startups and UOB Malaysia’s small business customers will be able to raise up to RM500,000 directly from individual and institutional investors using Funding Societies’ platform without the need to pledge collateral.

Fintech firms need support from banks: SBV (Vietnam News) Rated: A

The fintech (financial technology) sector is facing difficulties of capital mobilisation shortage, inadequate legal framework and banks’ hesitance in co-operation, said Lê Minh Hưng, Governor of State Bank of Việt Nam (SBV).

Hưng told the Việt Nam fintech forum 2018 held in Hà Nội on Wednesday that fintech and banks could contribute to expand financial universalisation, and promoting hunger eradication and poverty reduction while enhancing social equality and sustainable economic development.

Japan’s Gumi Games Founder Launches $ 30M Crypto Fund (Blockchain News) Rated: A

Japanese mobile games publisher gumi today launches a fund to invest in promising global cryptocurrency companies. With USD 30 million in initial investment secured, the venture capital fund is moving to open up the Japanese crypto startup market to international investors, honing in on a target that has, up to now, been a struggle to access and understand.

While the Japanese yen accounts for over 56 percent of Bitcoin volume, gumi believes that there is lack of understanding of Japan’s crypto market and the project’s leaders are keen to fill a void in the country that was also the first to legalize bitcoin.

He has helped to raise over USD 250 million to date for companies such as Bee Token, the Decentralized AirBnB and crypto lending platform Celsius Network.

Africa

Fintech in Africa: what investors are looking for (Fin24) Rated: AAA

According to EcoBank, more than 57% of all mobile money accounts globally can be found in sub-Saharan Africa, with the African fintech market set to grow from $200m currently to $3bn by 2020.

A recent study by McKinsey found room for growth in meeting unmet banking needs in Africa. These include borrowing, saving, and investing across the continent. South Africa alone is set to see an increase in banking revenues of $4bn over the next five years.

Kenya calls for regulation of fintech lenders (IT Web) Rated: A

A boom in  by fintech firms in Kenya has led to an increase in predatory lending practices, the country’s central bank governor said yesterday, calling for the sector to be regulated.

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.

Canada

One set of borrowers at greater risk are Canada’s 1.14 million small businesses, defined as companies that employ up to 99 workers. Statistics Canada reports that small businesses represented 98 per cent of all businesses, employed 70 per cent of workers, and generated 30 per cent of each province’s GDP on average. This category includes startups and high-growth firms, which represent Canada’s best hope for job creation and economic growth.

Fortunately, small businesses now have an alternative source for loans called peer-to-peer (P2P) lending. These online platforms match borrowers and investors directly and can provide loans cheaper and faster than traditional sources. How can that be? The answer is technology.

Fintech Select Records a Net Profit of $ 986k for Q1 Ending March 31 2018  (GlobeNewswire) Rated: A

Fintech Select Ltd. is pleased to announce that its financial statements for the Q1 ending March 31 2018 have resulted in a net profit of $986k. Q1 2018 Financial Statements and Management Discussion & Analysis (“MD&A”) have been filed on SEDAR.

Authors:

George Popescu
Allen Taylor