Thursday April 11 2019, Weekly News Digest

china p2p lending

News Comments Today’s main news: Lending Club loans $159M in the past week. OnDeck offers same-day funding. Kabbage secures $700M in funding. RateSetter ISA passes 200M GBP in subscriptions. Funding Circle CEO pocketed 4M GBP last year. Klarna launches global customer authentication platform. Today’s main analysis: Drivers of global growth in FSB’s shadow banking. (A […]

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china p2p lending

News Comments

United States

United Kingdom

European Union

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News Summary

United States

Need a loan for Tax Day? According to Lending Club data, you’re not aloan… er, alone (Thinknum), Rated: AAA

As seen in data from Lending Club ($NYSE:LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.

RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.

Lending Club Total Principal Loaned (Weekly)

ONDECK OFFERS SAME DAY FUNDING TO EMPOWER SMALL BUSINESS (OnDeck), Rated: AAA

OnDeck today announced that it will offer to fund and debit customer bank accounts with Same Day ACH transfers, eliminating a decades long pain point for small business owners accustomed to the traditional ACH transfer process, which can take multiple days and lacks certainty on when the transactions will hit bank accounts.

Same Day ACH transfers from OnDeck provide qualified OnDeck Term Loan and Line of Credit customers with funds up to the National Automated Clearing House Association (NACHA) cap of $25,000 by 5:00 pm local time on the same business day the customer books or makes a draw on their line of credit.* Qualified customers are also debited via the same day ACH service, providing them additional predictability in transaction clearing times and offering better clarity around day-to-day cash flow management.

Highlights from Jamie Dimon’s Annual Letter (PeerIQ), Rated: AAA

US payrolls rose by 196 k in March and the unemployment rate remained at 3.8%.

Source: Bloomberg, PeerIQ

Highlights from Jamie Dimon’s Letter to Shareholders

Jamie Dimon published his annual letter to shareholders. We look at some highlights below:

  • The banking system, and JPM in particular, is over-capitalized – Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks.
Source: JPM, PeerIQ

PM is investing billions in technology to compete – the cloud, AI, ML and digital banking

  • JPM customers can now open a bank account online in under 5 minutes and can reduce their mortgage closing times to 3 weeks.
  • The bank now has 49 Mn active digital customers, including 33 Mn active mobile customers
  • JPM is looking at fintechs in the US and in China as not just opportunities but also looming competition.

Online lender Kabbage rakes in 0m funding (Verdict), Rated: AAA

Kabbage, an online lender for small businesses, has fetched $700m in asset-backed securitisation (ABS) funding.

With the securitisation, the company’s debt funding increases to $940m.

Real-time data was Kabbage’s secret sauce, its first investor says (American Banker), Rated: A

The firm started life as a small, scrappy fintech startup in Atlanta in 2008, but has grown rapidly. It made $2 billion worth of loans in 2018 and more than $600 million in the first quarter of 2019. It also recently agreed to provide financing at the point of sale on Alibaba.com as part of a program called Pay Later.

Upstart Raises $ 50 Million and Announces New Bank Partners (Lend Academy), Rated: A

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

PeerStreet Lowers Minimum Real Estate Investment to $ 100 (Think Reality), Rated: A

The burgeoning peer-to-peer lending platform PeerStreet has unveiled product updates that enable investments of only $100.

The company recently announced it’s lowered the minimum investment to $100 for “small balance reinvestments” when using its automated investing product. The upgrade also expands the investment types available for automated investing to include cash offer loans and 30-day notes, which offer shorter terms than typical bridge loan investment options, the company said.

Sharestates Wins Top Real Estate Platform Award at LendIt Fintech USA 2019 (PR Newswire), Rated: A

Sharestates, a marketplace lending platform that connects real estate developers with investors, was crowned Top Real Estate Platform at LendIt Fintech USA2019 in San Francisco, California on April 9, 2019. The Top Real Estate Platform award is based on performance, volume, growth, product diversity, and responsiveness to stakeholders.

Now operating in 46 states, Sharestates offers diversified asset classes including residential, multi-family, mixed-use, commercial properties, and land acquisitions.

Since launching in 2015, Sharestates has closed on over $1.7 billion in total loan volume and returned over $675 million in principal to investors. Average annualized returns have exceeded 10% every year. As a result of its strong performance and valued relationships, 82% of Sharestates loan volume has come from repeat borrowers and 81% of its investors are repeat investors.

The stREITwise Platform Brings Real Estate Investment to All (Realty Biz News), Rated: B

The company has just announced a new acquisition to its investment portfolio, a $32 million mixed-use building in Carmel, Indiana, one of the most affluent suburbs of Indianapolis. The 140,000-square foot Allied Solutions Building, already around 87 percent leased, stands poised to increase dramatically in value thanks to its location in the heart of downtown Carmel in the heart of a busy mixed-use development surrounded by restaurants, coffee shops, fast-casual dining, service-oriented retail, and the locally renownedSun King distillery and food hall right next door.

13 cities where renting is cheaper than buying a home (AOL), Rated: A

Americans’ homeownership rate is 64.8%, according to the latest U.S. Census data.

Following are the 13 metros where renting is cheaper by more than $150 a month, beginning with cities with a smaller advantage for renters.

BlueVine Adds Term Loan to Suite of Online Working Capital Solutions to Fuel Small Business Growth (GlobeNewswire), Rated: A

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced that it is making term loan financing available for business owners through its suite of online financing solutions. The BlueVine Term Loan provides small- and medium-sized business owners with fast and simple access to financing to grow their businesses through BlueVine’s advanced online platform. More than 59 percent of businesses are looking for funds to grow their business, according to the 2017 Federal Reserve Small Business Credit Survey Report on Employer Firms. With a BlueVine Term Loan, business owners can quickly pursue larger projects and investments to bring their businesses to new heights.

Aura Approves 350,000th Affordable Loan (Bakersfield.com), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, this week approved its 350,000 th loan.

Since its launch in 2014, Aura has provided more than $437 million in credit-building loans to borrowers at approximately 1,200 partner locations using technology that enables local businesses to administer loan applications. Currently, Aura’s average loan size is around $1,600.

In total, Aura has raised over $403 million in social bonds across 21 bond issuances. The most recent issuance was in March for $50 million.

What Kind of Collateral Do I Need for a Business Loan? (Nav), Rated: A

Before you can qualify for a commercial loan, you’ll need to prove that doing business with your company is a good risk. This means you’ll need to pass successfully through a lender’s qualification process.

Next Wave of Personal Loan Growth May be Driven by Prime and Above Consumers (MarketWatch), Rated: A

The prime and above risk tiers have become a greater focus for lenders in recent years. Nearly two-thirds of unsecured personal loan balances originated in the first three quarters of 2018 were lent to prime and above consumers. FinTechs drove this shift as originations for prime and above grew to 62% in 2018, up from 52% in 2013. While still less conservative than banks, FinTechs’ overall risk profile for originations now aligns tightly with credit unions. At the end of 2018, FinTechs held the majority share of personal loan balances with 39%, while banks and credit unions followed with 28% and 21%, respectively.

Student Debt Isn’t Just An Employee Problem — It’s Also An Employer Problem (Killer Startups), Rated: A

The Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit for the fourth quarter of 2018 that outstanding student loan debt increased to $1.46 trillion, which is $15 billion more than the previous quarter. It also reported that student loan debt rose by $79 billion in 2018.

The student debt load isn’t just impacting the individual students who enter the workforce, hoping they can find a job that enables them to make those monthly payments. I’s also slowing economic growth. A January 2019 Federal Reserve paper noted that young adults report their student loan debt is the reason they’re unable to buy a home. The same report also cited other research concluding that 20 percent of the decline in homeownership among young adults relates to student loan debt that’s been rising since 2005.

Amount Announces Cloud-Based Account Verification Platform (Kake), Rated: A

Amount today announced AmountVerify, a cloud-based platform for risk management across financial products. AmountVerify marks the first time industry leading fintech provider Avant is making a component of its cutting edge online lending platform available to financial service companies as a standalone product through Amount.

Onfido raises $ 50M to create the Identity Verification Standard for Businesses Globally (Markets Insider), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M. The round was led by SBI Investment and Salesforce Ventures, with support from M12 (formerly Microsoft Ventures), FinVC and others, including existing investors.

Forward Financing Expands Capital Base with $ 90 Million Credit Facility (Yahoo! Finance), Rated: A

Forward Financing has closed on a $90 million credit facility, consisting of a $60 million senior revolving credit facility and a $30 million junior term loan. AloStar Capital Finance (“AloStar”), a division of Cadence Bank, N.A., served as the Agent on the senior facility.

Credibly Announces Investment Grade Senior Debt Offering (Yahoo! Finance), Rated: A

Today, Credibly announces the next phase in its balance sheet growth strategy with a $10 million Investment Grade-rated senior debt offering. The transaction closed on March 28, 2019.

Mitek Expands Auto-Capture User Experience Across All Digital Channels with the Addition of Desktop (GlobeNewswire), Rated: A

Mitek today announced it has upgraded its desktop browser experience to support auto-capture so customers can rapidly verify the identity of applicants across all digital channels: desktop browsers, mobile web and native applications.

According to Javelin Research, today only one third of users (34 percent) still complete the entire account opening process on their desktop.

MiSnap delivers a superior auto-capture experience for desktop and across mobile devices through:

  • Guided commands:  Real-time commands such as where to place a document in relation to the camera or detection of glare on the ID document are some of the conditions evaluated in order to help the user capture an optimal image, which improves image acceptance rates and reduces capture retries.
  • Advanced image analysis: Once MiSnap has achieved an optimal capture of the ID document, the software then further analyzes the image and makes the necessary adjustments in order to process all images consistently and accurately.
  • Modern architecture: Because MiSnap uses WebAssembly, it can perform at native speeds and is easy to integrate into customers’ web-based apps and requires minimal footprint.

58% of lenders will use AI in next two years (AI Foundry Email), Rated: A

Fannie Mae recently put out a 

  • Nearly two-thirds of lenders are familiar with AI
  • But, only 27% are using it in their businesses now, and…
  • Only half of that group are currently using it with customers (the rest are doing trials)
  • However, looking ahead two years – 58% of lenders expect to use AI/ML in their mortgage business.
  • Of the rest:
      • 22% predict they’ll be investigating AI
      • 19% foresee being in a “wait and see” mode

    These data points show us that “prime time” is coming soon for AI/ML in mortgages. 

    Fintech alone won’t be enough to boost credit union mortgage volumes (Credit Union Journal), Rated: A

    How can credit unions, especially small institutions, compete with Quicken Loans’ Rocket Mortgage “Push button, get mortgage” campaign?

    They can’t – and, sources said, they shouldn’t try.

    GROUNDFLOOR Wins 2 FinTech Awards (Groundfloor Email), Rated: B

    GROUNDFLOOR was named Best Crowdfunding Platform by the 

    Pulte Mortgage and Finicity Partner to Combat the Home Loan Paper Chase (MarketWatch), Rated: B

    Pulte Mortgage announced today it is partnering with Finicity — a leading provider of real-time financial data access and insights, to provide its borrowers with a faster, simpler and more secure way to navigate the home financing process.

    Hudson Data and LendingPoint partner to prevent Synthetic ID fraud (Finanzen), Rated: B

    Hudson Data and LendingPoint announced that they are partnering to create an industry solution to prevent synthetic identity fraud using powerful graph machine learning.

    Dharma crypto lending platform officially goes live (CoinGeek), Rated: B

    Dharma Labs completed a Series A funding round earlier this year to support its cryptocurrency lending platform project. The San Francisco-based company raised $7 million from companies such as Polychain Capital, Coinbase Ventures and others and, if there was any concern about the platform not going live, those concerns are now extinguished. Dharma announced this past Monday in a Medium post that the platform is now live.

    United Kingdom

    RateSetter ISA Milestone: Passes £200 Million in Subscriptions (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender RateSetter recently announced its ISA has now passed the milestone of attracting £200 million in subscriptions.

    “Investors have enjoyed an average annualised return of 4.5%, tax-free of course, since the RateSetter ISA launched in February 2018. The average RateSetter ISA balance stands at £11,000.”

    Funding Circle boss pocketed more than £4m last year (P2P Finance News), Rated: AAA

    FUNDING Circle founder Samir Desai (pictured) earned more than £4m last year, having cashed in some of his shares at the time of the peer-to-peer lender’s stock market flotation.

    Desai took home a salary of £210,000 last year, according to Funding Circle’s annual report, a four per cent increase from his salary of £202,000 in 2017.

    The majority of his total remuneration of £4.081m came from cashing in share options.

    Zopa rewrites outdated money idioms (The London Economic), Rated: AAA

    Each future-looking idiom challenges the status quo. For example, according to Zopa, the ‘signing for the bill’ gesture will be redundant soon. Instead, when people have finished their meal, people will be more likely to signal facial or iris recognition to the waiter. Jonesy gives his take and takes it one step further by illustrating a customer displaying his eyeball to request the bill.

    Source: The London Economic

    Fintech unicorns are leading job creation in London (Business Insider), Rated: AAA

    In 2018, there was a 61% increase in fintech job creation within London from the previous year, per a new report by Robert Walters, making it the fastest growing sector for vacancies in the city.

    The UK houses 25% of all fintech unicorns and their growth plans call for more talent. There are 29 fintech unicorns worldwide, seven of which are based in the UK, making the UK second only to San Francisco, which is home to nine.

    Over 30% of jobs in the UK’s fintech industry are for IT-related roles, compared with 24% in 2017. And fintech unicorns’ hiring for IT professionals increased 74% year-over-year (YoY).

    Source: Business Insider

    London to take San Francisco’s fintech unicorn crown (The Innovation Enterprise), Rated: A

    However, the report has predicted that London could take the lead as early as this year, as the city receives 39% of European fintech venture capital funding, with the runner-up, Berlin, taking just 21% of the total investment.

    With 50% against a global average of 33%, the UK also enjoys the highest rate of consumer fintech adoption of any Western country, only beaten by India and China, the report found.

    LendInvest gains £200m HSBC funding as it seeks home loan market entry (Verdict), Rated: A

    LendInvest, which operates an online marketplace for mortgages, has received an investment of £200m ($261m) from HSBC UK to support its foray into the regulated home loan sector.

    Peer-to-peer scheme for first-time buyers launches (FT Advisor), Rated: A

    Start-up company Stepladder is promoting a new way for first-time buyers to save for a house deposit.

    Arbuthnot Latham launches Arbuthnot Direct for those seeking long-term interest returns (Arbuthnot Email), Rated: B

    Arbuthnot Latham & Co., Limited (“Arbuthnot Latham”) is pleased to announce the launch of its new platform under the trading name of Arbuthnot Direct. Arbuthnot Direct offers fixed term deposits online, targeting retail customers who are seeking interest returns on their money over the longer term. The platform held a successful soft launch in February 2019 and has already met with a positive reception.

    China

    The rise and fall of P2P lending in China (Finextra), Rated: AAA

    It is worth mentioning that the size of China’s P2P industry is larger than that of the rest of the world combined, with outstanding loans of US$217.96BN.

    China’s online P2P lending industry grew rapidly between 2011 to 2015, with the number of P2P lenders growing from 50 to nearly 3,500 respectively.

    Trouble started brewing in China back in 2016, when statistics released by the Chinese Banking Regulatory Commission showed that about 40% of P2P lending platforms were in fact Ponzi schemes.

    This triggered the shutdown of P2P lending platforms; over 900 closed by the end of 2016. For 2018, only 1,021 providers remained in place.

    Source: Bloomberg News

    Shenzhen police arrest Zhang Wei, calling China Create Capital a ‘mafia-like gang’ (SCMP), Rated: A

    China Create Capital Limited, the investment holding company headed by the 46-year-old Heilongjiang native is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms, the Shenzhen police said in a notice. The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

    The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country’s financial system and capital markets, where 1,129 “mafia-like” syndicates were broken up across 10 provinces last year, with 4.94 billion yuan (US$737 million) of assets seized, according to the police. A number of Chinese oligarchs including Anbang Group’s

    former chairman Wu Xiaohui

    , CEFC Group’s founder Ye Jianming and financier Xiao Jianhua had fallen from grace since 2017.

    $ 60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market (CoinDesk), Rated: A

    These new crypto lenders include such notable names as Bixin Capital, FBG Capital and DGroup, founded by Dong Zhao, who made a name by operating one of the longest-running over-the-counter (OTC) trading desks in China. Along with a startup called Babelbank, these investors have originated a combined $60 million worth of loans over the last five months, denominated in cryptocurrencies or, in one firm’s case, Chinese yuan.

    European Union

    Klarna launches global customer authentication platform (Klarna), Rated: AAA

    Klarna today announced the launch of its global authentication platform — an aggregator with multiple global and local authentication solutions. The platform allows multinational businesses, including merchants and other banks, to provide a simple, secure and personalised customer authentication experience irrespective of market, through a one-time integration.

    Klarna Sees Payments as Evolving From Function to Engagement (WWD), Rated: A

    Klarna’s Hannah Bravo says customers chose brands based on payment options.

    This New Tool Is Helping Retailers Build Consumer Trust During Online Checkouts (Footwear News), Rated: B

    The Klarna platform enables businesses to choose from a range of global and local authentication methods so that they can find one that works best for their customer. Whether using SMS verification or emailed one-time passwords, brands and retailers can verify their customers’ identities with minimal interruption to the consumer’s shopping journey.

    International

    Drivers of Global Growth in FSB’s Shadow Banking (DBRS Email), Rated: AAA

    DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010, according to the FSB. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster.

    Summary highlights of the commentary include:

    • Shadow banking is still growing. This narrow, but rapidly growing, subset of nonbanks had assets of $52 trillion in 2017, up 75% from $30 trillion in 2010.
    • Since 2010, assets of nonbanks are also growing, up 61% to $185 trillion. That is 49% of the $378 trillion in total global assets in all financial institutions at the end of 2017, up significantly from 44% in 2010.
    • The key driver of this growth in nonbank assets is the expansion of OFIs. These OFIs are defined as all financial institutions that are NOT central banks, banks, insurance companies, pension funds, public financial institutions, or financial auxiliaries. Assets at these OFIs grew 71% since 2010 to a record $117 trillion in 2017, or just over 30% of assets in financial institutions globally.
    • By far, the largest segment of shadow banking globally is collective investment vehicles, which are subject to runs. These include fixed income funds, mixed funds, MMFs and hedge funds. Since 2010, this segment has grown by 130% to $36.7 trillion in assets. By contrast, growth in other segments has been less than $1 trillion, or even negative.

    Read the full report here.

    Crypto Lending Platform Salt Adds Support for Dash as Collateral (Crypto-Economy), Rated: A

    Cryptocurrency lending platform Salt will now be allowing its users to collateralize their Dash holdings including their Masternode staking coins to access loan facilities.

    India

    RentoMojo in talks to raise $ 40 million from GMO, others (livemint), Rated: A

    For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.

    Asia

    Housing sector remains major source of complaints: BPKN (The Jakarta Post), Rated: A

    The BPKN received 154 complaints in the first quarter, most originating from the housing sector. BPKN communications and education coordinator Arief Safari said the agency had received 129 complaints on the housing sector in the first quarter, followed by six complaints on online peer-to-peer (P2P) lending, three on banking and the remainder on various sectors, including travel and e-commerce.

    Batumbu to help finance SMEs (The Jakarta Post), Rated: A

    PT Berdayakan Usaha Indonesia has announced that it aims to help small and medium enterprises (SME) access financial capital through a partnership program with its digital platform Batumbu.

    MENA

    Authors:

    George Popescu
    Allen Taylor

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

    Thursday January 3 2019, Daily News Digest

    china p2p lending

    News Comments Today’s main news: RateSetter passes 500M GBP in secondary market lending. U.S. economy fuels boom in consumer debt. Seedrs tops 500M GBP in crowdfund securities. Today’s main analysis: China P2P lending crackdown could see 70% firms closed. Today’s thought-provoking articles: Peter Renton’s Q3 2018 MPL results. 2018 was a standout year for fintech funding. 9 big ideas […]

    The post Thursday January 3 2019, Daily News Digest appeared first on Lending Times.

    china p2p lending

    News Comments

    United States

    United Kingdom

    China

    International

    India

    News Summary

    United States

    U.S. Economy Fuels Boom in Consumer Debt (WSJ), Rated: AAA

    Consumer debt, including credit cards, auto and student loans and personal loans, is on pace to top $4 trillion in 2019.

    Consumer spending has increased 2.7% on average in the four quarters through September compared with the same period a year earlier, as disposable income rose 2.7% on average, according to Moody’s Investors Service. Meanwhile, personal savings as a percentage of disposable income was 6.3% in the third quarter, above a 20-year average of 5.9%, according to Bureau of Economic Analysis data.

    My Quarterly Marketplace Lending Results – Q3 2018 (Lend Academy), Rated: AAA

    My trailing 12 month returns for the year ended September 30, 2018 across all my accounts was 4.77% up from 4.46% in my last update. My original six accounts, all with Lending Club and Prosper, also improved over last quarter but are still at a paltry 3.19%.

    Source: Lend Academy

    How Betterment Stayed on Top in 2018 (and How they Plan to Stay There in 2019) (Financial Advisor IQ), Rated: A

    Robo advisor Betterment currently manages $15 billion in assets for its more than 400,000 customers, firm CEO Jon Stein tells FA-IQ. But at the start of 2016, Betterment’s AUM was just a little over $6 billion, Stein says. The firm has cemented its place on the 2018 Financial Times’ 300 Top RIAs list.

    Q: How has Betterment’s client base evolved?

    A: When Betterment was first launched, our customer base was mainly young folks in their twenties who were depositing $100-$500 to invest at a time. That client demographic has shifted dramatically over the years. Today, more than one-third of our business comes from customers who are at least 50 years old.

    2018 – Volatile Equity and Credit Markets (PeerIQ), Rated: A

    2018 was a volatile year for equity and credit markets, particularly in the fourth quarter. The S&P500 is down ~7.5% for the year, and cyclical stocks are down more. CDX IG spreads have widened ~40 bps and CDX HY spreads have widened ~150bps.

    ABS markets enjoyed record issuance. However, spreads widened, and all-in yields were higher leading to rate increases for borrowers and tighter margins for lenders. 2019 is shaping up to be a pivotal year in this late economic cycle. Synchronized global growth could turn into a synchronized slowdown. The risk of policy error is heightened as the Fed navigates record low unemployment and a slowdown in growth. The US yield curve has partially inverted and the all-important 3-month – 10-year yield spread is at ~37 bps.

    Kevin Tweddle of Independent Community Bankers of America (Lend Academy), Rated: A

    Our next guest on the Lend Academy Podcast is Kevin Tweddle. His official title is the Group EVP for Innovation and Financial Technology at the Independent Community Bankers of America (ICBA), the leading trade organization representing community banks. He is completely focused on fintech and helping community banks use technology to thrive in the future.

    Online Loan Marketplaces: Benefits, Challenges, and Enormous Growth (Small Biz Trends), Rated: A

    Financial technology (Fintech) and the internet have enabled the creation of online loan marketplaces. Marketplace lending is made possible by technology platforms that use scoring algorithms to determine the borrowers’ ability to repay.

    Fintech online loan platforms have started creating partnerships with banks and credit unions to reach small businesses who aren’t as comfortable dealing entirely online. Traditional lenders are eager to jump on the Fintech bandwagon to avoid being made obsolete.

    As a small business owner, will you consider online lenders to finance your business? The convenience of banking online is attractive to many who want to bank from anywhere. Online lender Kabbage says 17% of their loans have been accessed through mobile.

    Equifax Faces Scrutiny As Dems Take Over The House (PYMNTS), Rated: A

    A report in the Wall Street Journal, citing analysts, reported that legislative response to the massive Equifax data breach of 2017 is at the top of the agenda for 2019. The Wall Street Journal noted that existing proposals, some bipartisan, provide a glimpse into how changes can be made to the industry. The paper noted the changes would pertain to how the firms handle consumer information and could include tougher cybersecurity standards and making it easier for consumers to fix mistakes on their credit reports.

    White Oak Healthcare Finance Provides $ 161 Million to Support Allegiant Healthcare’s SNF Acquisition (AP News), Rated: B

    White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as sole lender and administrative agent on the funding of a $161 million senior credit facility for Allegiant Healthcare (“Allegiant”) and Hillstone Healthcare, Inc. (“Hillstone”). The funds were used to acquire and provide working capital for a portfolio of 17 skilled nursing facilities in Ohio.

    Five reasons Bitcoin could enter a more extreme death spiral (The Conversation), Rated: B

    The one upside to all this is that, although cryptocurrencies may have entered a death spiral, the blockchain economy is here to stay. As well as allowing safe peer-to-peer lending and transactions, it is being used to build more efficient supply chains and in the evolution of the internet of things – to name just a few of its applications.

    United Kingdom

    RateSetter passes £500m in lending on secondary market (P2P Finance News), Rated: AAA

    RATESETTER has passed £500m in lending on its secondary market, marking a major liquidity milestone for the platform.

    At the end of December 2018, the peer-to-peer platform revealed that a cumulative total of £500m in liquidity had been provided to investors via its secondary market. According to the platform, in the majority of cases investors were able to access these funds within one working day.

    Seedrs Tops £500 Million in Crowdfunded Securities (Crowdfund Insider), Rated: AAA

    In a blog post, UK crowdfunding platform Seedrs shared that it has now topped £500 million in investment crowdfunding. The money has been raised for 720 deals that have been successfully funded since the platform launched.

    P2P set for fundraising boom in 2019 (P2P Finance News), Rated: A

    P2P lenders raised more than £10m through crowdfunding platforms last year to boost their technology and operations, while almost £2bn was ploughed into the wider fintech sector.

    “39 fintech companies have used crowdfunding platforms to raise capital. This is a record level of crowdfunding investment into fintech companies and we expect to see more of this in 2019.”

    Robo-advice app for self-employed launches (FT Adviser), Rated: A

    A new robo-advice service designed especially for the self-employed and freelancers is expected to launch in the first quarter of 2019.

    The start-up, which received £1.5m after a funding round in late 2017, is currently in the Financial Conduct Authority (FCA) Sandbox, and hoping to receive authorisation in the next couple of months.

    iwoca adds Barclays and HSBC to Open Banking connections (Fintech Finance), Rated: B

    iwoca,the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking. This expands the number of Open Banking connections offered by iwoca to three, including Lloyds Bank, and will enable more than 60 percent of the lender’s customers to take advantage of the Open Banking service.

    Arbuthnot Commercial ABL provides £6.5m facility to Fluorocarbon Group (Specialist Banking), Rated: B

    Arbuthnot Commercial Asset Based Lending (ABL) has agreed to provide a £6.5m refinancing facility to fluoropolymer processor the Fluorocarbon Group.

    China

    China P2P Lending Crackdown May See 70% of Firms Close (Bloomberg), Rated: AAA

    The number of Chinese peer-to-peer lenders may drop by 70 percent this year, a research firm that tracks the industry says, as the nation intensifies a crackdown on riskier forms of financing.

    As few as 300 companies will remain by the end of the year, according to an estimate from Shanghai-based Yingcan Group. The number of operators dropped by more than 50 percent to 1,021 during 2018, it said, adding that there’s been no new entrants into the market since August.

    Tighter Reg Shrinks China’s P2P Lending Mkt By 50 Pct In 2018 (PYMNTS), Rated: A

    According to Yingcan Group, by the end of 2019, there will only be 300 P2P lenders remaining. During 2018, the market research firm said the number of P2P lenders declined by 50 percent to 1,021. What’s more, no new companies have entered the market since August.

    Yidai shuts shop as China intensifies crackdown on P2P lenders (Banking & Finance), Rated: A

    Yidai, an online peer-to-peer (P2P) lending intermediary, is the latest to exit the business as China reins in its US$176 billion experiment with this riskier form of financing.

    The company set up a committee to start refunding its lenders after “months” of losses, Yidai said in statements over the extended holiday weekend. It has about 32,000 lenders with an outstanding principal balance of four billion yuan (S$795.4 million), and expects to repay them in three-to-five years.

    International

    2018 was a standout year for fintech funding (Business Insider), Rated: AAA

    In the first half of 2018 alone, fintechs secured $57.9 billion, nearing the previous annual record of $62.5 billion set in 2015.

    Fintechs including UK neobank Revolut, US insurtech Root, US fintech for gig economy workersEarnin, Hong Kong-based alt lender Oriente, and US crypto exchange operator Coinbase all raised funding rounds of over $100 million this year.

    9 big ideas for 2019 (American Banker), Rated: AAA

    JPMorgan Chase collected more than $1.8 billion in revenue from overdraft fees in 2017, according to an analysis of regulatory data by the Center for Responsible Lending. Bank of America and Wells Fargo both raked in more than $1.6 billion. Big banks typically charge around $35 per overdraft. Many other institutions also rely on such fees.

    Give customers some control of their financial data

    For decades, banks, credit card networks and credit bureaus have been sharing and selling consumers’ financial data without their knowledge or consent while data aggregators have screen-scraped that information without the full cooperation of financial services providers.

    But there are signs that is beginning to change.

    Fintech Predictions for 2019 (Crowdfund Insider), Rated: A

    10. New Asset Class – New Asset Backed Lending for Crypto

    The likes of Nexo, SALT, CoinLoans & Unchained Capital have emerged in the recent months unlocking the value of your cryptocurrency. There is a list of crypto lending sites here.

    8. Banks will rule again

    We have seen big banks leveraging Fintech platforms from OnDeck and Avant in 2018. More of it will come in 2019 as banks begins to decentralize banking again.

    7. Everyone will be rich (unlocking home equity value)

    I attend a talk by Mike Cagney of Figure at 2018’s Lendit China conference. He’s creating something completely different to unlock the potential of the entire “supply chain” process from home equity lines of credit to bundling and tracking this asset class utilizing smart contracts and blockchain. He wants to eliminate the hurdles and ambiguity for the secondary market.

    As home equity value rises and interest rates increase, home equity products will need a ton of tech. It has become a forgotten art since the great depression. I am predicting that a lot more of Fintech companies will come to light in 2019 working with the banks to unlock consumers’ home equity value

    India

    Top 30 Fintech Influencers in India 2019 by Digital Fifth (Fintech News), Rated: AAA

    Amrish Rau : CEO at PayU India

    Amrish Rau is the CEO of PayU India, the country’s leading digital payment solution provider valued at around USD 2.5 billion. Previously, he had founded Citrus Pay, which was acquired by Naspers (PayU) in one of the largest startup acquisitions in India. PayU’s digital lending platform Lazypay has done extremely well with nearly 4.5 lakh customers already using it. He has also invested in multiple startups like Signzy, Elemential, Nuo and Open.

    Harshil Mathur : CEO & Co-Founder at Razorpay

    Harshil runs one of India’s most innovative Fintechs, Razorpay, which is morphing from a B2B Payment Gateway into a Financial Conglomerate. They have entered the lending business with Razorpay Capital, which has already reached an annual loan disbursal rate of USD 30 million.

    Manish Khera : CEO at Happy

    Manish is the founder of Happy Loans – one of the fastest growing MSME lending platform in the country.

    Naveen Kukreja : Co-Founder & CEO at Paisabazaar.com; CMO at Policybazaar

    Naveen is the co-founder and CEO of Paisabazaar.com. Under Naveen’s leadership, Paisabazaar.com has become one of the largest marketplace platforms for lending and banking products. Paisabazaar.com currently disburses annualized loans worth USD 1 billion to more than 1000 towns and cities across India.

    Red tape grounds P2P startups as investors stay clear of space (India Times), Rated: A

    The latest entrants into the digital lending sector, peer-to-peer lending platforms, are facing an uphill task attracting investors with regulatory restrictions limiting their growth potential.
    OMLP2P is a Mumbai-based lending platform and disburses around Rs 20 lakh per month. Another Mumbai-based P2P lending startup Paisadukaan’s founder Rajiv Ranjan also said that VCs have been shying away from this sector because of the limitation imposed by the RBI.
    Authors:
    George Popescu
    Allen Taylor

    The post Thursday January 3 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

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    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

    How Blockchain is Changing Alternative Lending

    blockchain for alternative lending

    Cryptocurrencies entered the mainstream in 2017. The million dollar fortunes made and 1,000% returns hogged the headlines. But behind all the hoopla is blockchain, the technology behind cryptocurrencies, quietly and steadily changing the business universe. The technology has myriad applications. Also called distributed ledger technology (DLT), it can reimagine entire industries in hitherto unknown ways. […]

    blockchain for alternative lending

    Cryptocurrencies entered the mainstream in 2017. The million dollar fortunes made and 1,000% returns hogged the headlines. But behind all the hoopla is blockchain, the technology behind cryptocurrencies, quietly and steadily changing the business universe. The technology has myriad applications. Also called distributed ledger technology (DLT), it can reimagine entire industries in hitherto unknown ways. From issues of security to scalability and cost effectiveness, entrepreneurs are incorporating DLT to bring the benefits to the masses.

    Similarly, alternative lending has changed how Americans borrow. Small business and consumer lending was hard hit when banks decamped en masse after the 2008-09 crisis. Online lending came to the fore with players like Lending Club, SoFi, OnDeck building multi-billion dollar lending platforms.

    Almost 10 years since, alternative lending is growing but not at the speed  which experts had imagined. Morgan Stanley had predicted Trillion Dollar funding via such platforms in the coming future. The sector is nowhere close to these figures. Aside from corporate governance issues, fraud and high default rates have been the true bane of the industry. IdentityMind, a RegTech company, reports that fraud caused 12% of losses in P2P online lending. That translates to almost 1.2% of total funding, which is also 2-3 times as compared to banks or retail cards.

    Blockchain and Alternative Lending

    Blockchain is an open, distributed ledger that records transactions between two parties in a verifiable and efficient manner. Putting digital assets (contracts, documents, financial data, etc.) on blockchain technology helps build a wall against unauthorized access and prevents fraud. Blockchain helps maintains transparency between entities; it could be between buyer and seller, business and employee, or customers and investor.

    A World Economic Forum report predicts that, by 2025, 10% of GDP will be stored on blockchains. Amalgamating blockchain and alternative lending has not only a technical appeal but is business common sense. Online finance decentralized lending allows savers to directly fund borrowers; they took away the middlemen, traditional banks, who otherwise used to take the major benefit away from the transaction. Now, it is the alternative lending sectors’ turn to leverage the power of decentralization via blockchain.

    The Benefits of a Decentralized Distributed Ledger

    Decentralization
    Currently, alternative lenders hold their complete data centrally, in either their own servers or on Amazon Web Services-type cloud structures. This is a honey pot for hackers. In 2017, an Equifax data breach collected 145.5 million users’ data. The breach was caused by a software flaw that allowed the hackers to take over the company’s website.

    Lenders have access to extremely sensitive data such as bank account numbers, social security numbers, and other personal identification information. Losing control of that data can compromise the entire financial history of an individual or a business. Blockchain eliminates the risk by storing information on a decentralized ledger. So a massive data hack would never be possible because it will be practically impossible for the hackers to have access to each and every part of the distributed record.

    Transparency
    A distributed ledger also provides transparency and allows that all transactions are recorded are on the blockchain in an immutable manner. Thus, backdating of contracts is not possible under any circumstance (Re: Lending Club backdating loans scandal). Corporate governance improves across the board, and investors and regulators can breathe easy knowing that the data they are seeing is the absolute truth.

    Securitization
    Digital loans can be tokenized via blockchain and be constructed as a tradeable security. This, in effect, allows securitization for loans; so you don’t need to wait till you are a billion dollar fintech lender. Othera, a blockchain lending platform, is doing just that. It creates an online marketplace where lenders can tokenize their cashflow by putting the loan on the blockchain and selling it to investors.

    User-friendly
    Apart from this, blockchain technology is more user-friendly as it is open to the public with no authentication or permission issues. It is scalable and cost efficient for businesses to incorporate into their existing systems and allows for all stakeholders to easily extract relevant information about their transactions without risking the entire system’s database.

    Digital identity verification
    Identity theft is one of the biggest reasons for online lending fraud. That is exacerbated by the fact that the lender and the borrower usually never meet in real life. The old traditional way was to go through the lengthy and costly process of physical verification. But in the age of blockchain, by merging identity verification with decentralized blockchain principles, a tamper proof digital-id can be used as the digital signature for recording and validating all transactions.

    How Blockchains Are Revolutionizing Lending

    Alternate lending has seen many iterations and pivots since inception. From being a pure peer-to-peer platform, the sector has metamorphosed to one dominated by balance sheet lenders and institutional investors. Now, the era of Alt Lending 2.0 is emerging, which is going to be dominated by players who have co-opted blockchain as an integral part of their business processes.
    Here is a brief description of some companies that are doing innovative work in the field.

    SAP
    The ERP giant is experimenting with blockchain on an enterprise level. One of its applications is focused on KYC.  The distributed ledger solution is to store a customer’s ID and link it to their personal documents, which are not stored on the blockchain. Once the transaction is cleared, the link is established and the documents are accessed to prove identity and the onboarding process continues. In this, SAP provides a solution to KYC issues, with running proof of identity. Thus, there is a single source of truth for all parties.

    WishFinance
    WishFinance is a Singapore- and Honk Kong-focused lender to merchants and small businesses. It is keeping its entire loan portfolio on a public blockchain to push transparency for investors. The investors can evaluate the performance of a loan at anytime (the data is anonymized so no identifiable borrower information is shared).

    SALT
    SALT is reversing the model by allowing crytpocurrency holders to cash out without actually selling their crypto assets. It allows loans for Bitcoin. The borrower can redeem his crypto assets once the loan is paid.

    Conclusion

    Blockchain has the power to allow alternative lending companies to scale effortlessly and solve fraud and KYC issues haunting the industry. Lenders who are able to get their blockchain game right should see renewed investor interest and benefit from higher unit economics.

    Author:

    Written by Heena Dhir.

    Monday April 2 2018, Daily News Digest

    PeerIQ

    News Comments Today’s main news: Landbay raises 1.2M GBP on Seedrs. Yirendai issues quarterly earnings results. Betterment boosts human advice. Flender to raise 50M Euro. Cash Suvidha raisess $1M. Today’s main analysis: The VC and PE markets in Canada. Today’s thought-provoking articles: PeerIQ’s credit facility management suite. Is community bank SMB lending eroding? Africa’s big blockchain potential. United States Betterment’s rise […]

    PeerIQ

    News Comments

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    United States

    Robo Pioneer Betterment Goes Upscale, Boosts Human Advice (ThinkAdvisor), Rated: AAA

    Now with $13.5 billion in assets under management, the firm claims to be the largest independent online financial advisor. Indeed, its high-net-worth offering, or Prime Plan, has been embraced by investors with accounts ranging from $100,000 to many millions, according to Holeman.

    Betterment, founded in 2008 as an automated digital-only advice platform, now has 340,000 customers, ranging from millennials to 85-year-olds, with an average age of 37 and an average balance just under $40,000.

    How have your fees changed?

    Before, we didn’t have the ability to talk with a human advisor; now we have certified financial planners. There are two levels of pricing: the basic digital plan [no minimum account size], which is 0.25% per year and our premium plan [$100,000 minimum account] for 0.4% per year to talk with a certified financial planner on an unlimited basis.

    PeerIQ’s Credit Facility Management Suite (PeerIQ), Rated: AAA

    US GDP growth for the 4th quarter was revised upwards from 2.5% to 2.9%, capping an impressive 2017. Consumer spending has driven the bulk of GDP growth and it will be relevant to see if this trend continues given the weak retail sales in Q1 and softening in some leading economic indicators. Core PCE, the Fed’s preferred inflation indicator rose 1.8% YoY in February. Personal spending rose 0.2% while incomes rose 0.4% MoM suggesting that Americans are saving more – a long-term positive for growth – although a short-term pressure on retail sales and consumer spending.

    PeerIQ’s Credit Facility Management Suite

    The Credit Facility Management Suite provides:

    • Dashboard overview of multiple facilities across various asset classes
    • Daily Covenant Calculation and Monitoring
    • Time Series Visualization and Projections
    • Automated Borrowing Base Report Generation
    • Collateral Cashflow Projections
    • Scenario Analysis
    Source PeerIQ

     

    Is community bank small business lending eroding? (Banking Exchange), Rated: AAA

    Quarles, speaking March 26 at a HOPE Global Forum, told of recent meetings he had had with owners of very small businesses. He noted that their comments jibed with trends the central bank has seen. A key one is that small businesses still face gaps in available credit although more than two-thirds of those studied by the Fed request less than $100,000 and many less than $25,000.

    Who’s lending to small businesses?

    “Large banks’ share of small business lending has grown,” said Quarles, “especially among the smallest loans. This represents a change from 20 years ago when small businesses relied more on a relationship with local community banks for access to credit.”

    Quarles shared figures for loans under $100,000. He said that small banks of less than $1 billion hold 19% of such loans—versus 60% two decades ago. By contrast, he said, that 60% share is now held by banks with $50 billion or more in assets.

    Quarles next discussed nonbank alternative lenders. This included fintech specialists as well as large technology firms that extend credit to merchants who are part of their customer bases. (Quarles did not mention names, but examples of the former would include online lender Kabbage and the former would include Amazon, which grants credit to small firms that are part of its base.)

    Tech ever-widening domain for community banks (Banking Exchange), Rated: A

    “Anybody who doesn’t believe that is kidding themselves,” says James Beckwith, president and CEO at $972.8 million-assets Five Star Bank in Rocklin, Calif.

    The attractiveness of tech-based marketplace lending, for example, is only going to increase, Beckwith says. Also, payments innovations, going on inside and outside banking, can’t be ignored by consumer or business bankers.

    Marlin Secures $ 300,000,000 Forward Flow Agreement to Expand Equipment Financing for Small Businesses (GlobeNewswire), Rated: A

    Marlin Business Services Corp. (NASDAQ:MRLN) a leading provider of credit products and services to small businesses, today announced that it has entered into a forward flow sale agreement with Varadero Capital, L.P., a leading alternative asset management firm, to sell up to $300,000,000 in equipment leases and loans to be originated by Marlin.

    Technology jobs in the Chicago area are up, but that’s not the whole story (Chicago Tribune), Rated: A

    Unlike at Enova, the overall number of technology jobs in the Chicago region grew at a modest pace last year, both at tech firms and in other industries.

    Even before Chicago entered the cutthroat competition last fall to win Amazon’s second headquarters, dubbed HQ2, the city promoted the growth. Emanuel’s office issued at least eight news releases in 2017 on technology companies planning to hire. One of them named more than a dozen companies with hiring goals by the end of 2017.

    Enova was on that list, with an aim to hire 75. Instead, it brought on 128 new people, raising its total employee count to 1,145.

    And analytics was only the second-fastest-growing team at Enova last year.

     

    LendIt Fintech USA 2018 Preview Show (Lend Academy), Rated: A

    This year we have the LendIt Content Team on the show discussing all the different aspects of the event and how attendees can get the most out of their time at LendIt Fintech USA 2018.

     

    United Kingdom

    Landbay Returns to Seedrs & Quickly Raises £1.2 Million in Funding (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender Landbay has launched another equity crowdfunding campaign on Seedrs and quickly secured more than £1.2 million in funding. This news comes less than a month after the online lending platform announced it hit its £100 million in lending milestone.

    Deposit rates are a joke, so investors should consider peer-to-peer lending (The Times), Rated: A

    Irish investors who want a regular return on their capital but are not happy to hand their money to the banks — where deposit rates are in the doldrums — have been exploring peer-to-peer (P2P) lending.

    EasyMoney launches second IFISA with higher returns (Peer2Peer Finance), Rated: A

    EASYMONEY, part of Sir Stelios Haji-Ioannou’s easy family of brands, has launched a second Innovative Finance ISA (IFISA) that offers higher returns than its first tax wrapper.

    The recently-launched peer-to-peer lending platform said on Saturday that its ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, with a target interest rate of 7.28 per cent. Loans written for the ‘balanced’ IFISA are limited to 75% loan-to-value (LTV).

    China

    Yirendai (YRD) Issues Quarterly Earnings Results (The Lincolnian Online), Rated: AAA

    Yirendai (NYSE:YRD) announced its earnings results on Wednesday, March 14th. The technology company reported $1.11 EPS for the quarter, topping the consensus estimate of $0.86 by $0.25, Briefing.comreports. Yirendai had a return on equity of 66.32% and a net margin of 24.69%. The company had revenue of $280.50 million for the quarter, compared to analysts’ expectations of $244.27 million.

    China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated AAA

    Thousands of online lenders could be facing extinction as China rolls out a new licensing framework, amid complaints about a lack of clarity on how the regime will work. The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

    The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

     

    European Union

    Peer-to-peer lending start-up Flender to announce €50m debt round (The Irish Times), Rated: AAA

    Dublin-headquartered fintech start-up Flender, whose backers include former EY Entrepreneur of the Year award winner Mark Roden, is set to announce a €50 million debt financing round to fund its expansion.

    Having secured more than £500,000 (€569,000) to fund itself through crowdfunding, Flender announced plans to raise a £2 million (€2.2 million) funding round and £20 million (€22.7 million) in leveraged debt finance last August after receiving full authorisation from the UK financial regulator to operate in Britain.

    Dutch Startup Aims To Boost Earnings Of P2P Services (Cointelegraph), Rated: A

    Dutch Startup “BotBird” is launching a set of services that aims to bring together different aspects of the blockchain. While the services alone are well known amongst crypto investors the set combined might make a big difference in the scene altogether.

    Lending

    Crypto lending took a flight last year with lending programs popping up nearly every day. The promise was simple: Invest some bitcoin or Ethereum, get the counter value returned in alt coins minted by those lending programs and earn a certain percent of interest daily.

    Escrow

    Besides the fact that they actually focus on operating a sustainable service by offering a maximum of up to 10% monthly interest they also offer investment protection by 

    International

    Big banks on notice as tech groups ramp up pressure (Financial Times), Rated: AAA

    Technology companies are set to take a big chunk of customers from banks, as they intensify their challenge to traditional lenders across a range of mass-market financial services, say industry executives and analysts. Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

    Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

    SALT: Leverage Your Blockchain Assets to Secure Cash Loans (SludgeFeed), Rated: A

    One such project is SALT, a lending platform that was a built to facilitate the creation of lending agreements using blockchain assets as collateral. Through the SALT platform, individuals and businesses are able to access the largely illiquid value of their blockchain assets by putting these assets up as collateral in return for fiat loans. These lending agreements are secure, as their terms are automatically enforced through smart contracts and once a loan is repaid, crypto assets are returned to the borrower. Therefore, the SALT platform is designed for individuals and businesses that are needing immediate cash infusions but are unwilling or unable to liquidate their cryptocurrency holdings.

    Source SludgeFeed

    It’s important to note that there are no origination fees, closing costs, or prepayment penalties on any fixed rate term loans arranged through the SALT platform, which is very different than traditional lending systems.

    Why ZPER is a Smart Investment Choice (NewsBTC), Rated: B

    Against this backdrop, P2P financing has now added a new twist with a decentralized P2P finance platform, ZPER. The platform has its basis on blockchain technology and will transcend borders and currency limitations, generating innovation in the global P2P market.

     

    India

    Fintech Startup Cash Suvidha Raises $ 1 M in Pre-Series A Funding (Next Billion), Rated: AAA

    Delhi-based online lending platform Cash Suvidha has raised $1 Mn in a Pre-Series A funding round from Initia Holdings; Vipin Agarwal, Partner in India Industrial Growth Fund and others.

    The company will use the funding to increase the loan books of the company and to further strengthen its technological infrastructure.

    Peer to Peer Lending Market is Anticipated Significant Growth due to Earliest Adopters of Latest Technologies (Digital Journal), Rated: A

    The ‘Global and Chinese Peer to Peer Lending Industry, 2013-2023 Market Research Report’ is a professional and in-depth study on the current state of the global Peer to Peer Lending industry with a focus on the Chinese market. The report provides key statistics on the market status of the Peer to Peer Lending manufacturers and is a valuable source of guidance and direction for companies and individuals interested in the industry.

    Firstly, the report provides a basic overview of the industry including its definition, applications and manufacturing technology. Then, the report explores the international and Chinese major industry players in detail. In this part, the report presents the company profile, product specifications, capacity, production value, and 2013-2018 market shares for each company.

    Canada

    THE VC AND PE MARKETS IN CANADA (AllAboutAlpha), Rated: AAA

    The Canadian Venture Capital and Private Equity Association (CVCA) has posted what it calls an “overview” of the VC and PE Markets in that country in 2017. It reports growth in both of those markets, although growth at distinct velocities.

    In 2016 there were 542 deals in the PE space. In 2017 there were 603. In 2016 the total valuation of those deals was $13.8 billion. In 2017 nearly twice that, $26.3 billion.

    Looking at exits, 2016 was a slump and 2017 was a recovery. In 2016 there were only 33 exits with a total value of $0.6 billion. In 2017, though, there were 39 exits with a total valuation of $1.7 billion. A little arithmetic indicates that the average value of one of those 2017 exits was about $43 million. The average value of one of the 2016 exits was about $18 million.

    More about Private Equity

    Breaking down the PE highlights by city, the paper tells us that 15% of the action (89 deals totaling $6.7 billion) went to Montreal-based companies. Companies based in Calgary and Montérègie each received a 9% share. This meant 54 deals for Calgary and 53 for Montérègie.

    Breaking down the highlights by sector, 19% of the PE deals closed in industry/manufacturing. The next largest share was in information and communications technology (ICT), a 16% share. The report tells us that both of these two top sectors “have been receiving a steadily increasing share of PE deal flow since 2013 when industrial and manufacturing captured only a 14% share” and ICT got 10%.

    Download the full report here.

    Africa

    Blockchain’s big potential in Africa (Venture Beat), Rated: AAA

    At the beginning of March, some of the brightest minds from the blockchain world joined representatives from the financial, legal, and global technology industries to discuss widespread blockchain adoption. But the event wasn’t held in fintech hub London, or startup mecca San Francisco. It was in Johannesburg, South Africa, at the fourth edition of the Blockchain Africa conference hosted at the Microsoft HQ.

    Emerging blockchain hubs

    While still in their early growth stages compared to the crypto hubs in central and eastern Europe and Switzerland, blockchain communities in Kenya, South Africa, Nigeria, and Sudan are growing steady.

    BitHub Africa , based in Nairobi, is a blockchain accelerator for local startups founded in December 2015.

    Tackling real problems

    To date, blockchain adoption has been sporadic across Africa, but the emerging use cases are tackling real social, economic, and political problems affecting hundreds of millions of people every day:

    Fighting corruption.

    Combatting inflation.  In Zimbabwe, which has seen rapid inflation in recent years, Bitcoin sales have soared as locals rush to protect their savings before they devalue.

    Authors:

    George Popescu
    Allen Taylor

    Monday April 2 2018, Daily News Digest

    PeerIQ

    News Comments Today’s main news: Landbay raises 1.2M GBP on Seedrs. Yirendai issues quarterly earnings results. Betterment boosts human advice. Flender to raise 50M Euro. Cash Suvidha raisess $1M. Today’s main analysis: The VC and PE markets in Canada. Today’s thought-provoking articles: PeerIQ’s credit facility management suite. Is community bank SMB lending eroding? Africa’s big blockchain potential. United States Betterment’s rise […]

    PeerIQ

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    India

    Other

    News Summary

    United States

    Robo Pioneer Betterment Goes Upscale, Boosts Human Advice (ThinkAdvisor), Rated: AAA

    Now with $13.5 billion in assets under management, the firm claims to be the largest independent online financial advisor. Indeed, its high-net-worth offering, or Prime Plan, has been embraced by investors with accounts ranging from $100,000 to many millions, according to Holeman.

    Betterment, founded in 2008 as an automated digital-only advice platform, now has 340,000 customers, ranging from millennials to 85-year-olds, with an average age of 37 and an average balance just under $40,000.

    How have your fees changed?

    Before, we didn’t have the ability to talk with a human advisor; now we have certified financial planners. There are two levels of pricing: the basic digital plan [no minimum account size], which is 0.25% per year and our premium plan [$100,000 minimum account] for 0.4% per year to talk with a certified financial planner on an unlimited basis.

    PeerIQ’s Credit Facility Management Suite (PeerIQ), Rated: AAA

    US GDP growth for the 4th quarter was revised upwards from 2.5% to 2.9%, capping an impressive 2017. Consumer spending has driven the bulk of GDP growth and it will be relevant to see if this trend continues given the weak retail sales in Q1 and softening in some leading economic indicators. Core PCE, the Fed’s preferred inflation indicator rose 1.8% YoY in February. Personal spending rose 0.2% while incomes rose 0.4% MoM suggesting that Americans are saving more – a long-term positive for growth – although a short-term pressure on retail sales and consumer spending.

    PeerIQ’s Credit Facility Management Suite

    The Credit Facility Management Suite provides:

    • Dashboard overview of multiple facilities across various asset classes
    • Daily Covenant Calculation and Monitoring
    • Time Series Visualization and Projections
    • Automated Borrowing Base Report Generation
    • Collateral Cashflow Projections
    • Scenario Analysis
    Source PeerIQ

     

    Is community bank small business lending eroding? (Banking Exchange), Rated: AAA

    Quarles, speaking March 26 at a HOPE Global Forum, told of recent meetings he had had with owners of very small businesses. He noted that their comments jibed with trends the central bank has seen. A key one is that small businesses still face gaps in available credit although more than two-thirds of those studied by the Fed request less than $100,000 and many less than $25,000.

    Who’s lending to small businesses?

    “Large banks’ share of small business lending has grown,” said Quarles, “especially among the smallest loans. This represents a change from 20 years ago when small businesses relied more on a relationship with local community banks for access to credit.”

    Quarles shared figures for loans under $100,000. He said that small banks of less than $1 billion hold 19% of such loans—versus 60% two decades ago. By contrast, he said, that 60% share is now held by banks with $50 billion or more in assets.

    Quarles next discussed nonbank alternative lenders. This included fintech specialists as well as large technology firms that extend credit to merchants who are part of their customer bases. (Quarles did not mention names, but examples of the former would include online lender Kabbage and the former would include Amazon, which grants credit to small firms that are part of its base.)

    Tech ever-widening domain for community banks (Banking Exchange), Rated: A

    “Anybody who doesn’t believe that is kidding themselves,” says James Beckwith, president and CEO at $972.8 million-assets Five Star Bank in Rocklin, Calif.

    The attractiveness of tech-based marketplace lending, for example, is only going to increase, Beckwith says. Also, payments innovations, going on inside and outside banking, can’t be ignored by consumer or business bankers.

    Marlin Secures $ 300,000,000 Forward Flow Agreement to Expand Equipment Financing for Small Businesses (GlobeNewswire), Rated: A

    Marlin Business Services Corp. (NASDAQ:MRLN) a leading provider of credit products and services to small businesses, today announced that it has entered into a forward flow sale agreement with Varadero Capital, L.P., a leading alternative asset management firm, to sell up to $300,000,000 in equipment leases and loans to be originated by Marlin.

    Technology jobs in the Chicago area are up, but that’s not the whole story (Chicago Tribune), Rated: A

    Unlike at Enova, the overall number of technology jobs in the Chicago region grew at a modest pace last year, both at tech firms and in other industries.

    Even before Chicago entered the cutthroat competition last fall to win Amazon’s second headquarters, dubbed HQ2, the city promoted the growth. Emanuel’s office issued at least eight news releases in 2017 on technology companies planning to hire. One of them named more than a dozen companies with hiring goals by the end of 2017.

    Enova was on that list, with an aim to hire 75. Instead, it brought on 128 new people, raising its total employee count to 1,145.

    And analytics was only the second-fastest-growing team at Enova last year.

     

    LendIt Fintech USA 2018 Preview Show (Lend Academy), Rated: A

    This year we have the LendIt Content Team on the show discussing all the different aspects of the event and how attendees can get the most out of their time at LendIt Fintech USA 2018.

     

    United Kingdom

    Landbay Returns to Seedrs & Quickly Raises £1.2 Million in Funding (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender Landbay has launched another equity crowdfunding campaign on Seedrs and quickly secured more than £1.2 million in funding. This news comes less than a month after the online lending platform announced it hit its £100 million in lending milestone.

    Deposit rates are a joke, so investors should consider peer-to-peer lending (The Times), Rated: A

    Irish investors who want a regular return on their capital but are not happy to hand their money to the banks — where deposit rates are in the doldrums — have been exploring peer-to-peer (P2P) lending.

    EasyMoney launches second IFISA with higher returns (Peer2Peer Finance), Rated: A

    EASYMONEY, part of Sir Stelios Haji-Ioannou’s easy family of brands, has launched a second Innovative Finance ISA (IFISA) that offers higher returns than its first tax wrapper.

    The recently-launched peer-to-peer lending platform said on Saturday that its ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, with a target interest rate of 7.28 per cent. Loans written for the ‘balanced’ IFISA are limited to 75% loan-to-value (LTV).

    China

    Yirendai (YRD) Issues Quarterly Earnings Results (The Lincolnian Online), Rated: AAA

    Yirendai (NYSE:YRD) announced its earnings results on Wednesday, March 14th. The technology company reported $1.11 EPS for the quarter, topping the consensus estimate of $0.86 by $0.25, Briefing.comreports. Yirendai had a return on equity of 66.32% and a net margin of 24.69%. The company had revenue of $280.50 million for the quarter, compared to analysts’ expectations of $244.27 million.

    China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated AAA

    Thousands of online lenders could be facing extinction as China rolls out a new licensing framework, amid complaints about a lack of clarity on how the regime will work. The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

    The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

     

    European Union

    Peer-to-peer lending start-up Flender to announce €50m debt round (The Irish Times), Rated: AAA

    Dublin-headquartered fintech start-up Flender, whose backers include former EY Entrepreneur of the Year award winner Mark Roden, is set to announce a €50 million debt financing round to fund its expansion.

    Having secured more than £500,000 (€569,000) to fund itself through crowdfunding, Flender announced plans to raise a £2 million (€2.2 million) funding round and £20 million (€22.7 million) in leveraged debt finance last August after receiving full authorisation from the UK financial regulator to operate in Britain.

    Dutch Startup Aims To Boost Earnings Of P2P Services (Cointelegraph), Rated: A

    Dutch Startup “BotBird” is launching a set of services that aims to bring together different aspects of the blockchain. While the services alone are well known amongst crypto investors the set combined might make a big difference in the scene altogether.

    Lending

    Crypto lending took a flight last year with lending programs popping up nearly every day. The promise was simple: Invest some bitcoin or Ethereum, get the counter value returned in alt coins minted by those lending programs and earn a certain percent of interest daily.

    Escrow

    Besides the fact that they actually focus on operating a sustainable service by offering a maximum of up to 10% monthly interest they also offer investment protection by 

    International

    Big banks on notice as tech groups ramp up pressure (Financial Times), Rated: AAA

    Technology companies are set to take a big chunk of customers from banks, as they intensify their challenge to traditional lenders across a range of mass-market financial services, say industry executives and analysts. Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

    Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

    SALT: Leverage Your Blockchain Assets to Secure Cash Loans (SludgeFeed), Rated: A

    One such project is SALT, a lending platform that was a built to facilitate the creation of lending agreements using blockchain assets as collateral. Through the SALT platform, individuals and businesses are able to access the largely illiquid value of their blockchain assets by putting these assets up as collateral in return for fiat loans. These lending agreements are secure, as their terms are automatically enforced through smart contracts and once a loan is repaid, crypto assets are returned to the borrower. Therefore, the SALT platform is designed for individuals and businesses that are needing immediate cash infusions but are unwilling or unable to liquidate their cryptocurrency holdings.

    Source SludgeFeed

    It’s important to note that there are no origination fees, closing costs, or prepayment penalties on any fixed rate term loans arranged through the SALT platform, which is very different than traditional lending systems.

    Why ZPER is a Smart Investment Choice (NewsBTC), Rated: B

    Against this backdrop, P2P financing has now added a new twist with a decentralized P2P finance platform, ZPER. The platform has its basis on blockchain technology and will transcend borders and currency limitations, generating innovation in the global P2P market.

     

    India

    Fintech Startup Cash Suvidha Raises $ 1 M in Pre-Series A Funding (Next Billion), Rated: AAA

    Delhi-based online lending platform Cash Suvidha has raised $1 Mn in a Pre-Series A funding round from Initia Holdings; Vipin Agarwal, Partner in India Industrial Growth Fund and others.

    The company will use the funding to increase the loan books of the company and to further strengthen its technological infrastructure.

    Peer to Peer Lending Market is Anticipated Significant Growth due to Earliest Adopters of Latest Technologies (Digital Journal), Rated: A

    The ‘Global and Chinese Peer to Peer Lending Industry, 2013-2023 Market Research Report’ is a professional and in-depth study on the current state of the global Peer to Peer Lending industry with a focus on the Chinese market. The report provides key statistics on the market status of the Peer to Peer Lending manufacturers and is a valuable source of guidance and direction for companies and individuals interested in the industry.

    Firstly, the report provides a basic overview of the industry including its definition, applications and manufacturing technology. Then, the report explores the international and Chinese major industry players in detail. In this part, the report presents the company profile, product specifications, capacity, production value, and 2013-2018 market shares for each company.

    Canada

    THE VC AND PE MARKETS IN CANADA (AllAboutAlpha), Rated: AAA

    The Canadian Venture Capital and Private Equity Association (CVCA) has posted what it calls an “overview” of the VC and PE Markets in that country in 2017. It reports growth in both of those markets, although growth at distinct velocities.

    In 2016 there were 542 deals in the PE space. In 2017 there were 603. In 2016 the total valuation of those deals was $13.8 billion. In 2017 nearly twice that, $26.3 billion.

    Looking at exits, 2016 was a slump and 2017 was a recovery. In 2016 there were only 33 exits with a total value of $0.6 billion. In 2017, though, there were 39 exits with a total valuation of $1.7 billion. A little arithmetic indicates that the average value of one of those 2017 exits was about $43 million. The average value of one of the 2016 exits was about $18 million.

    More about Private Equity

    Breaking down the PE highlights by city, the paper tells us that 15% of the action (89 deals totaling $6.7 billion) went to Montreal-based companies. Companies based in Calgary and Montérègie each received a 9% share. This meant 54 deals for Calgary and 53 for Montérègie.

    Breaking down the highlights by sector, 19% of the PE deals closed in industry/manufacturing. The next largest share was in information and communications technology (ICT), a 16% share. The report tells us that both of these two top sectors “have been receiving a steadily increasing share of PE deal flow since 2013 when industrial and manufacturing captured only a 14% share” and ICT got 10%.

    Download the full report here.

    Africa

    Blockchain’s big potential in Africa (Venture Beat), Rated: AAA

    At the beginning of March, some of the brightest minds from the blockchain world joined representatives from the financial, legal, and global technology industries to discuss widespread blockchain adoption. But the event wasn’t held in fintech hub London, or startup mecca San Francisco. It was in Johannesburg, South Africa, at the fourth edition of the Blockchain Africa conference hosted at the Microsoft HQ.

    Emerging blockchain hubs

    While still in their early growth stages compared to the crypto hubs in central and eastern Europe and Switzerland, blockchain communities in Kenya, South Africa, Nigeria, and Sudan are growing steady.

    BitHub Africa , based in Nairobi, is a blockchain accelerator for local startups founded in December 2015.

    Tackling real problems

    To date, blockchain adoption has been sporadic across Africa, but the emerging use cases are tackling real social, economic, and political problems affecting hundreds of millions of people every day:

    Fighting corruption.

    Combatting inflation.  In Zimbabwe, which has seen rapid inflation in recent years, Bitcoin sales have soared as locals rush to protect their savings before they devalue.

    Authors:

    George Popescu
    Allen Taylor

    Monday April 2 2018, Daily News Digest

    PeerIQ

    News Comments Today’s main news: Landbay raises 1.2M GBP on Seedrs. Yirendai issues quarterly earnings results. Betterment boosts human advice. Flender to raise 50M Euro. Cash Suvidha raisess $1M. Today’s main analysis: The VC and PE markets in Canada. Today’s thought-provoking articles: PeerIQ’s credit facility management suite. Is community bank SMB lending eroding? Africa’s big blockchain potential. United States Betterment’s rise […]

    PeerIQ

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    India

    Other

    News Summary

    United States

    Robo Pioneer Betterment Goes Upscale, Boosts Human Advice (ThinkAdvisor), Rated: AAA

    Now with $13.5 billion in assets under management, the firm claims to be the largest independent online financial advisor. Indeed, its high-net-worth offering, or Prime Plan, has been embraced by investors with accounts ranging from $100,000 to many millions, according to Holeman.

    Betterment, founded in 2008 as an automated digital-only advice platform, now has 340,000 customers, ranging from millennials to 85-year-olds, with an average age of 37 and an average balance just under $40,000.

    How have your fees changed?

    Before, we didn’t have the ability to talk with a human advisor; now we have certified financial planners. There are two levels of pricing: the basic digital plan [no minimum account size], which is 0.25% per year and our premium plan [$100,000 minimum account] for 0.4% per year to talk with a certified financial planner on an unlimited basis.

    PeerIQ’s Credit Facility Management Suite (PeerIQ), Rated: AAA

    US GDP growth for the 4th quarter was revised upwards from 2.5% to 2.9%, capping an impressive 2017. Consumer spending has driven the bulk of GDP growth and it will be relevant to see if this trend continues given the weak retail sales in Q1 and softening in some leading economic indicators. Core PCE, the Fed’s preferred inflation indicator rose 1.8% YoY in February. Personal spending rose 0.2% while incomes rose 0.4% MoM suggesting that Americans are saving more – a long-term positive for growth – although a short-term pressure on retail sales and consumer spending.

    PeerIQ’s Credit Facility Management Suite

    The Credit Facility Management Suite provides:

    • Dashboard overview of multiple facilities across various asset classes
    • Daily Covenant Calculation and Monitoring
    • Time Series Visualization and Projections
    • Automated Borrowing Base Report Generation
    • Collateral Cashflow Projections
    • Scenario Analysis
    Source PeerIQ

     

    Is community bank small business lending eroding? (Banking Exchange), Rated: AAA

    Quarles, speaking March 26 at a HOPE Global Forum, told of recent meetings he had had with owners of very small businesses. He noted that their comments jibed with trends the central bank has seen. A key one is that small businesses still face gaps in available credit although more than two-thirds of those studied by the Fed request less than $100,000 and many less than $25,000.

    Who’s lending to small businesses?

    “Large banks’ share of small business lending has grown,” said Quarles, “especially among the smallest loans. This represents a change from 20 years ago when small businesses relied more on a relationship with local community banks for access to credit.”

    Quarles shared figures for loans under $100,000. He said that small banks of less than $1 billion hold 19% of such loans—versus 60% two decades ago. By contrast, he said, that 60% share is now held by banks with $50 billion or more in assets.

    Quarles next discussed nonbank alternative lenders. This included fintech specialists as well as large technology firms that extend credit to merchants who are part of their customer bases. (Quarles did not mention names, but examples of the former would include online lender Kabbage and the former would include Amazon, which grants credit to small firms that are part of its base.)

    Tech ever-widening domain for community banks (Banking Exchange), Rated: A

    “Anybody who doesn’t believe that is kidding themselves,” says James Beckwith, president and CEO at $972.8 million-assets Five Star Bank in Rocklin, Calif.

    The attractiveness of tech-based marketplace lending, for example, is only going to increase, Beckwith says. Also, payments innovations, going on inside and outside banking, can’t be ignored by consumer or business bankers.

    Marlin Secures $ 300,000,000 Forward Flow Agreement to Expand Equipment Financing for Small Businesses (GlobeNewswire), Rated: A

    Marlin Business Services Corp. (NASDAQ:MRLN) a leading provider of credit products and services to small businesses, today announced that it has entered into a forward flow sale agreement with Varadero Capital, L.P., a leading alternative asset management firm, to sell up to $300,000,000 in equipment leases and loans to be originated by Marlin.

    Technology jobs in the Chicago area are up, but that’s not the whole story (Chicago Tribune), Rated: A

    Unlike at Enova, the overall number of technology jobs in the Chicago region grew at a modest pace last year, both at tech firms and in other industries.

    Even before Chicago entered the cutthroat competition last fall to win Amazon’s second headquarters, dubbed HQ2, the city promoted the growth. Emanuel’s office issued at least eight news releases in 2017 on technology companies planning to hire. One of them named more than a dozen companies with hiring goals by the end of 2017.

    Enova was on that list, with an aim to hire 75. Instead, it brought on 128 new people, raising its total employee count to 1,145.

    And analytics was only the second-fastest-growing team at Enova last year.

     

    LendIt Fintech USA 2018 Preview Show (Lend Academy), Rated: A

    This year we have the LendIt Content Team on the show discussing all the different aspects of the event and how attendees can get the most out of their time at LendIt Fintech USA 2018.

     

    United Kingdom

    Landbay Returns to Seedrs & Quickly Raises £1.2 Million in Funding (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender Landbay has launched another equity crowdfunding campaign on Seedrs and quickly secured more than £1.2 million in funding. This news comes less than a month after the online lending platform announced it hit its £100 million in lending milestone.

    Deposit rates are a joke, so investors should consider peer-to-peer lending (The Times), Rated: A

    Irish investors who want a regular return on their capital but are not happy to hand their money to the banks — where deposit rates are in the doldrums — have been exploring peer-to-peer (P2P) lending.

    EasyMoney launches second IFISA with higher returns (Peer2Peer Finance), Rated: A

    EASYMONEY, part of Sir Stelios Haji-Ioannou’s easy family of brands, has launched a second Innovative Finance ISA (IFISA) that offers higher returns than its first tax wrapper.

    The recently-launched peer-to-peer lending platform said on Saturday that its ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, with a target interest rate of 7.28 per cent. Loans written for the ‘balanced’ IFISA are limited to 75% loan-to-value (LTV).

    China

    Yirendai (YRD) Issues Quarterly Earnings Results (The Lincolnian Online), Rated: AAA

    Yirendai (NYSE:YRD) announced its earnings results on Wednesday, March 14th. The technology company reported $1.11 EPS for the quarter, topping the consensus estimate of $0.86 by $0.25, Briefing.comreports. Yirendai had a return on equity of 66.32% and a net margin of 24.69%. The company had revenue of $280.50 million for the quarter, compared to analysts’ expectations of $244.27 million.

    China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated AAA

    Thousands of online lenders could be facing extinction as China rolls out a new licensing framework, amid complaints about a lack of clarity on how the regime will work. The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

    The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

     

    European Union

    Peer-to-peer lending start-up Flender to announce €50m debt round (The Irish Times), Rated: AAA

    Dublin-headquartered fintech start-up Flender, whose backers include former EY Entrepreneur of the Year award winner Mark Roden, is set to announce a €50 million debt financing round to fund its expansion.

    Having secured more than £500,000 (€569,000) to fund itself through crowdfunding, Flender announced plans to raise a £2 million (€2.2 million) funding round and £20 million (€22.7 million) in leveraged debt finance last August after receiving full authorisation from the UK financial regulator to operate in Britain.

    Dutch Startup Aims To Boost Earnings Of P2P Services (Cointelegraph), Rated: A

    Dutch Startup “BotBird” is launching a set of services that aims to bring together different aspects of the blockchain. While the services alone are well known amongst crypto investors the set combined might make a big difference in the scene altogether.

    Lending

    Crypto lending took a flight last year with lending programs popping up nearly every day. The promise was simple: Invest some bitcoin or Ethereum, get the counter value returned in alt coins minted by those lending programs and earn a certain percent of interest daily.

    Escrow

    Besides the fact that they actually focus on operating a sustainable service by offering a maximum of up to 10% monthly interest they also offer investment protection by 

    International

    Big banks on notice as tech groups ramp up pressure (Financial Times), Rated: AAA

    Technology companies are set to take a big chunk of customers from banks, as they intensify their challenge to traditional lenders across a range of mass-market financial services, say industry executives and analysts. Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

    Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

    SALT: Leverage Your Blockchain Assets to Secure Cash Loans (SludgeFeed), Rated: A

    One such project is SALT, a lending platform that was a built to facilitate the creation of lending agreements using blockchain assets as collateral. Through the SALT platform, individuals and businesses are able to access the largely illiquid value of their blockchain assets by putting these assets up as collateral in return for fiat loans. These lending agreements are secure, as their terms are automatically enforced through smart contracts and once a loan is repaid, crypto assets are returned to the borrower. Therefore, the SALT platform is designed for individuals and businesses that are needing immediate cash infusions but are unwilling or unable to liquidate their cryptocurrency holdings.

    Source SludgeFeed

    It’s important to note that there are no origination fees, closing costs, or prepayment penalties on any fixed rate term loans arranged through the SALT platform, which is very different than traditional lending systems.

    Why ZPER is a Smart Investment Choice (NewsBTC), Rated: B

    Against this backdrop, P2P financing has now added a new twist with a decentralized P2P finance platform, ZPER. The platform has its basis on blockchain technology and will transcend borders and currency limitations, generating innovation in the global P2P market.

     

    India

    Fintech Startup Cash Suvidha Raises $ 1 M in Pre-Series A Funding (Next Billion), Rated: AAA

    Delhi-based online lending platform Cash Suvidha has raised $1 Mn in a Pre-Series A funding round from Initia Holdings; Vipin Agarwal, Partner in India Industrial Growth Fund and others.

    The company will use the funding to increase the loan books of the company and to further strengthen its technological infrastructure.

    Peer to Peer Lending Market is Anticipated Significant Growth due to Earliest Adopters of Latest Technologies (Digital Journal), Rated: A

    The ‘Global and Chinese Peer to Peer Lending Industry, 2013-2023 Market Research Report’ is a professional and in-depth study on the current state of the global Peer to Peer Lending industry with a focus on the Chinese market. The report provides key statistics on the market status of the Peer to Peer Lending manufacturers and is a valuable source of guidance and direction for companies and individuals interested in the industry.

    Firstly, the report provides a basic overview of the industry including its definition, applications and manufacturing technology. Then, the report explores the international and Chinese major industry players in detail. In this part, the report presents the company profile, product specifications, capacity, production value, and 2013-2018 market shares for each company.

    Canada

    THE VC AND PE MARKETS IN CANADA (AllAboutAlpha), Rated: AAA

    The Canadian Venture Capital and Private Equity Association (CVCA) has posted what it calls an “overview” of the VC and PE Markets in that country in 2017. It reports growth in both of those markets, although growth at distinct velocities.

    In 2016 there were 542 deals in the PE space. In 2017 there were 603. In 2016 the total valuation of those deals was $13.8 billion. In 2017 nearly twice that, $26.3 billion.

    Looking at exits, 2016 was a slump and 2017 was a recovery. In 2016 there were only 33 exits with a total value of $0.6 billion. In 2017, though, there were 39 exits with a total valuation of $1.7 billion. A little arithmetic indicates that the average value of one of those 2017 exits was about $43 million. The average value of one of the 2016 exits was about $18 million.

    More about Private Equity

    Breaking down the PE highlights by city, the paper tells us that 15% of the action (89 deals totaling $6.7 billion) went to Montreal-based companies. Companies based in Calgary and Montérègie each received a 9% share. This meant 54 deals for Calgary and 53 for Montérègie.

    Breaking down the highlights by sector, 19% of the PE deals closed in industry/manufacturing. The next largest share was in information and communications technology (ICT), a 16% share. The report tells us that both of these two top sectors “have been receiving a steadily increasing share of PE deal flow since 2013 when industrial and manufacturing captured only a 14% share” and ICT got 10%.

    Download the full report here.

    Africa

    Blockchain’s big potential in Africa (Venture Beat), Rated: AAA

    At the beginning of March, some of the brightest minds from the blockchain world joined representatives from the financial, legal, and global technology industries to discuss widespread blockchain adoption. But the event wasn’t held in fintech hub London, or startup mecca San Francisco. It was in Johannesburg, South Africa, at the fourth edition of the Blockchain Africa conference hosted at the Microsoft HQ.

    Emerging blockchain hubs

    While still in their early growth stages compared to the crypto hubs in central and eastern Europe and Switzerland, blockchain communities in Kenya, South Africa, Nigeria, and Sudan are growing steady.

    BitHub Africa , based in Nairobi, is a blockchain accelerator for local startups founded in December 2015.

    Tackling real problems

    To date, blockchain adoption has been sporadic across Africa, but the emerging use cases are tackling real social, economic, and political problems affecting hundreds of millions of people every day:

    Fighting corruption.

    Combatting inflation.  In Zimbabwe, which has seen rapid inflation in recent years, Bitcoin sales have soared as locals rush to protect their savings before they devalue.

    Authors:

    George Popescu
    Allen Taylor

    6 Blockchain-Based Crypto Lenders Changing P2P Lending

    ETHLend

    The integration of blockchain technology into multiple facets of our world could greatly streamline many industries that affect our day-to-day lives, and financial lending is the ideal forum. A natural progression of P2P lending, blockchain application can make the entire lending process more seamless and greatly reduce the amount of time the process takes. Here […]

    ETHLend

    The integration of blockchain technology into multiple facets of our world could greatly streamline many industries that affect our day-to-day lives, and financial lending is the ideal forum. A natural progression of P2P lending, blockchain application can make the entire lending process more seamless and greatly reduce the amount of time the process takes.

    Here are a few of the players in the early days of this promising technology.

    SALT (Secured Automated Lending Technology)

    According to its website, SALT is the only platform built to facilitate loans secured by blockchain assets.

    “Distributed ledgers represent a paradigm shift in the storage and transfer of assets and, for the first time in history, there is a perfect form of collateral: blockchain assets,” the website reads.

    Basing loans on blockchain assets makes creditworthiness no longer an issue. Writing for Forbes, Roger Aitken reported that SALT asserts that, by focusing on the borrower’s assets instead of their credit score, it is able to “dramatically reduce the complexity and cost of the loan process.” SALT seeks to streamline every step of the loan process, facilitating a new blockchain-backed lending market.

    The investor retains the value of their holdings, with any earnings or losses that occur to the wealth during the process reverting completely to the borrower.

    Among the potential assets to blockchain-based coin lending are that it is a realm where crypto wealth is recognized. Company CEO Shawn Owen, speaking with Forbes, said “if you’re a holder of blockchain assets, a lot of your financial wealth is not being recognized by lenders.” This technology is poised to open those funds to be leveraged and also break down geographic constraints while bringing the potential for the unbanked and underbanked into the financial world.

    SALT offers three value tiers and products.

    1. The basic membership package affords one up to $10k in term financing, paid only in USD; terms go from three to 24 months
    2. The premier package offers up to $100K in term financing with a line of credit. This can be paid in USD, Euro, GBP, JPY, and RMB. Term lengths are anywhere from one hour to 36 months.
    3. The enterprise package provides access to over $1M of term financing and a line of credit to be paid in an ad hoc currency selection, dictated by metered terms. This package offers two benefits that the premier package doesn’t–API integration and cold storage enterprise wallets.

    All three packages offer no pre-payment penalties, market data and educational resources, and loan management web portals. The premier package offers access to the SALT hardware wallet, customizable loan terms, and early access to new products. These are not offered with the basic membership package.

    All member lenders are Regulation D accredited investors, and while credit checks are not done on borrowers, SALT undertakes full Anti-Money Laundering (AML) and Know Your Customer (KYC) verification checks.

    The loans, which sport interest rates in the 10 to 15 percent range, are not transferable via the blockchain, as they become securities and are thus transferable through existing financial channels.

    EthLend

    EthLend is an Estonian-based fully decentralized P2P lending platform on the Ethereum blockchain for lending Ether as tokens for collateral. The platform uses any ERC20 token. All lending on the platform is facilitated through the use of smart contracts, a feature unique the Ethereum blockchain.

    The company’s Twitter feed from January 3 reports that it has reached nearly $600K USD in lending volume. The company offers address-to-address loans that are sent within minutes, with no middle men, assuring that no one, not even EthLend, can stop one’s lending or borrowing.

    With a roadmap that goes into Q4 2019, the company seems to have a well-plotted vision. Included in that roadmap are:

    • Q1 2018—Plans for a Decentralized Credit Rating (DCR), which will draw on Credit Tokens (CRE) and previous loans on EthLend to create a decentralized credit rating that can be used for other Decentralized Applications (DAPPs) as well
    • Q2 2018—The addition of bitcoin to the DAPP
    • Q2 2018—CRE from third party services, such as uPort and Civic, which can be used when the borrower doesn’t have enough previous loans
    • Q4 2018—the incorporation of the lending of other altcoins and tokens
    • Q3 2019—expansion beyond Ethereum to other distributed ledger networks

    Rating the company, CrushCrypto.com says “use cases may seem limited for now, but we believe as tokenization of real assets becomes more prevalent, EthLend has a good chance to become a market lender in this space.”

    A pre-ICO lasting from September 25th to October 25th of last year sold 62.5 million LEND available at a sale price of 1 ETH = 25K LEND. The ICO, which ran from November 25-30, saw the company raise $17.86M USD, essentially 100% of the $17.9M goal.

    In Q4 2107, the company opened up to USD-based loans and installments.

    The platform is not without some aspects that may cause concern for some industry insiders. Certain functions are only accessible with LEND tokens, such as featured loan listings and email marketing for new loan requests. Also, EthLend is currently only available through the Eidoo ICO search engine.

    On the upside, only dealing with crypto-to-crypto borrowing means there will be fewer regulation restrictions when those start to be handed down. Also, some insiders fear that other blockchain lending platforms that deal in fiat currencies might be swallowed by the banks, as they do open their transactions to become securities.

    ICO Bench rates EthLend at 4.4 out of 5.

    Celsius

    Celsius is a New York-based NPO based on the Ethereum blockchain, which extends instant credit through a decentralized P2P network. The network is akin to a membership organization that consists of both lenders and borrowers. Members must complete a Celsius profile to join.

    Celsius touts itself as the “first crypto wallet that allows users to earn interest (7%) on their held coins” and allows borrowers to use cryptocurreny as collateral to gain access to USD loans. Using a token called a DEG, Celsius deals in BTC, ETH, and USD and uses smart technology to bind the lender/borrower relationship.

    Borrower’s metrics are ascertained by using the Celsius Score, a digital credit score calculated by using various traditional metrics, such as FICO scores and mortgage history, as well as non-traditional ones such as Uber and Amazon histories. Lenders choose their borrowers using this score to determine risk.

    An NPO acting in the best interests of its users through lower fees and no hidden fees, Celsius’s ultimate goal is to give credit to large blocks of the public who are underserved by banks.

    ICO Bench rates Celsius at 2.8 out of 5. The central reason for the less than stellar mark centers around the company being long on marketing, but less so in technology terms.

    Some Other Players

    Fusion LenderComm

    Seven banks, including BNP Paribas, HSBC, ING, BNY Mellon and State Street, have joined forces with R3 and Finastra to develop a blockchain-powered marketplace for syndicated loans. The first pilots have already been successfully completed.

    With the early support of seven global banks (two of which do not yet wish to be named), the platform will cover 10% of the syndicated loan market when live next year.

    Inspeer

    An expansion under the Russian LightFin.ru brand, Inspeer deals in crypto and fiat. The company serves three million regional customers and processed 200,000 loans in its first year.

    LendingBlock

    For those who like to be in the know a little earlier, there is LendingBlock, a securities lending platform for crypto and digital assets. Users can lend and borrow cryptocurrencies against collateral of other cryptocurrencies in a completely decentralized and private manner. Watch for a Q1 token presale and a Q3 launch. LendingBlock is not currently working with fiat currencies.

     

    Conclusion

    The business of cryptocurrency lending is looking like the Wild West. There are some promising players to consider, and more if you look. SALT has Erik Voorhees associated with it, who founded Coinapult and gambling site SatoshiDice. He is a long-time cryptocurrency and blockchain advocate.

    Do your own homework to make informed choices, but if crypto lending is in you future, start your research with these platforms.

    Author:

    Written with Paul Keenan.

    Allen Taylor

    Wednesday December 6 2017, Daily News Digest

    purchase apr

    News Comments Today’s main news: Kabbage lends $4B to over 130K small businesses. RateSetter loses 23M GBP in ad investment. RateSetter to launch IFISA in February. Klarna, WorldPay partner on invoice and credit-based payments in Europe. Two new crypto-asset backed fiat loan platforms. Toss to expand into southeast Asia. Today’s main analysis: LendingTree’s monthly mortgage offer report. Today’s thought-provoking articles: […]

    purchase apr

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    India

    Asia

    Mexico

    News Summary

    United States

    Kabbage Delivers $ 4 Billion to More Than 130,000 Small Businesses (Kabbage Email), Rated: AAA

    Kabbage, Inc., a global financial services, technology and data platform serving small businesses, has extended over $4 billion to more than 130,000 small businesses, serving the largest customer base than any online small business lender. These landmarks represent an approximate 30-percent increase in total funding and total customers served since the company’s last milestone announcement in April 2017. With over 1.5 million live data connections with its customers, Kabbage’s high growth is attributed to its fully-automated lending technology as it continues to be a trusted lending partner to tens of thousands of small businesses across all industries in all 50 U.S. states.

    Robert Sharpe also joined the company as its chief operating officer. Sharpe has more than 20 years of executive leadership in North America, Europe and Asia. He has successfully held various C-level positions, including president, chief executive officer and chief operating officer with multiple global consumer goods companies, each serving tens of thousands of customers and generating billions of dollars in revenue. With an additional ten years of commercial banking and corporate finance experience, Sharpe will be responsible for Kabbage’s continued growth and operational oversight as the company expands internationally and scales its services to serve more and larger small businesses.

    During 2017, Kabbage reached major milestones, including:

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

    LendingTree today released its monthly  Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.

    Source: PRNewsfoto/LendingTree
    • November’s best offers for borrowers with the best profiles had an average APR of 3.75% for conforming 30-year fixed purchase loans, unchanged from October. Refinance loan offers were down 1 bps to 3.69%. Mortgage rates vary dependent upon parameters including credit score, loan-to-value, income and property type.
    • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were down 1 bps to 4.30%, the lowest since November 2016. In contrast, the loan note rate of 4.18% was unchanged from October when it reached the highest since July. We prefer to use the APR as lenders often make changes to other fees in response to changing interest rates.
    • Consumers with the highest credit scores (760+) saw offered APRs of 4.16% in November, vs 4.43% for consumers with scores of 680-719. The APR spread of 27 bps between these score ranges was 5 bps wider than in October and the widest since July 2016. The spread represents nearly $13,400 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $233,127. The additional costs are due to higher interest rates, larger fees or a combination of the two.
    • Refinance APRs for conforming 30-yr fixed loans were down 2 bps to 4.24%. The credit score bracket spread widened to 19 from 16 bps, amounting to $9,500 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $235,973.
    • Average proposed purchase down payments have been rising for 8 months and reached $62,409.
    Source: PRNewsfoto/LendingTree

    Learning About Machine Learning (PYMNTS), Rated: AAA

    Certainly, the mountains of data are becoming larger by the day. Seven years ago, the total amount of information produced on a global scale passed one zettabyte. The scale shakes out thusly: If a single cup of coffee holds a gigabyte, then the Great Wall of China stores a zettabyte. In just three years, the tally will be 44 zettabytes, or 44 Great Walls of China, as estimated by global market intelligence firm IDC.

    Along with the impressive growth in data created, stored and used on a global scale, so too is AI poised to grow in leaps and bounds. It will create nearly $37 billion in annual revenues for companies of all stripes, sizes and sectors, according to market intelligence firm Tractica.

    Within that figure, machine learning is a sector that will see $15.3 billion in revenue in 2019, as noted by BCC Research and cited by business process outsourcing company TeleTech, with an average annual growth rate of 19.7 percent. The savings for U.S. companies could be as high as $60 billion in 2020, Forbes noted. In addition, AI is expected to add $8.3 trillion in economic activity for the U.S. by 2035, according to projections by business management consultancy Accenture.

    Consider a financial institution processing credit card information. The transaction data is passed to the machine learning system as soon as it is entered at the terminal or point of sale, and the system then analyzes the transaction against the system on which it has been trained. The historical data offers a way to glean what “normal” behavior of a transaction looks like.

    To combat a payments fraud adversary that is evermore fluid with bad actors’ tactics and operates in a card-not-present (CNP) world, the machine deployed by a financial institution must be able to “explain” what it is doing, Feedzai said. The “learning” should result in explaining the reasoning so the logic behind the decisions is transparent and meets compliance needs.

    Banks Build Line of Defense for Doomsday Cyberattack (WSJ), Rated: AAA

    U.S. banks have quietly launched a doomsday project they hope will prevent a run on the financial system should one of them suffer a debilitating cyberattack.

    The effort, which went live earlier this year and is dubbed Sheltered Harbor, currently includes banks and credit unions that have roughly 400 million U.S. accounts.

    While most people worry about their money being stolen in a hack, banks fear something more sinister: an attacker destroying, or even simply locking, data.

    Such moves could cripple a bank, leaving it unable to operate for hours, days, or perhaps much longer.

    Source: The Wall Street Journal

    LendingClub Introduces New Certificate Investment Vehicle (Lend Academy), Rated: AAA

    On Friday of last week, LendingClub announced that it closed a new kind of transaction. It was a whole loan transaction structured as a tradable pass through security called a CLUB Certificate.

    This was an initiative that was investor led. Basically, they had a potential investor who did not want to invest in whole loans. They are not for everyone, given they are an illiquid investment that has a duration of several years. What this investor wanted was a security that acted like a whole loan but one that had liquidity.

    While LendingClub would not share details of this deal we did learn that these were both three and five year loans of one particular loan grade. They customized this deal to meet the investors exact requirements.

    LendingClub claimed that this was a first of its kind deal in marketplace lending but in my research I discovered this piece on Asset-Backed Alert from April 2016 that talked about a similar structure that Prosper was working on last year.

    How Technology is Streamlining the US Lending Sector (NewsGram), Rated: A

    However, when the lending process is digitized the amount of paperwork is reduced dramatically. This is because account activity, credit history, income history as well as tax compliance can be fed into the system with the click of a button. This has made the collection and verification of information quite easy. Besides streamlining the application process, the amount of time it takes to get a loan has also reduced.

    In addition, some lenders have developed some innovative mobile solutions that enable customers to submit an application from anywhere. The most outstanding feature about mobile loans is that there is a constant interaction between the lender and the borrowers. This goes a long way in improving service delivery.

    Courtesy of technology advancements, now it’s possible to view the status of your loan application as well as your account status with a lender. This helps borrowers to stay updated during the entire online installment loans process. In addition, you can get instant communication about any requests that a lender may have that is critical to the borrowing process.

    Time to address banks’ skepticism about data sharing (American Banker), Rated: A

    When bankers complain about the security risks of sharing data with fintechs, they get an eye roll. Such complaints tend to be regarded as a cover for an ulterior motive: unwillingness to give customer details to competitors.

    But when Chair Sheila Bair, a former chairman of the Federal Deposit Insurance Corp., recently warned of the security risks of sharing customer data with third parties, it made some people stop and think.

    Big banks hope early bet on Alexa will pay off (American Banker), Rated: A

    After a number of months of testing and refining an alternative way to bank, Ally Bank launched Ally Skill. “It was ready for prime time,” said Diane Morais, president of consumer and commercial banking at Ally Bank. Since mid-November, a customer can ask Alexa — in their own words — what their balance is, what the price of something costs in hours worked, and notably, to move money.

    Since Capital One announced its skill in March of 2016, U.S Bank, American Express and several credit unions announced Alexa skills in addition to Ally. Others have been testing Alexa, including bank innovator USAA. Even smaller banks are readying to launch skills. FIS, one of the biggest bank vendors that has been testing Alexa since 2016, said about a dozen of its thousands of bank customers are on track to roll out a bank skill for Alexa by Christmas. Most recently, Amazon announced Alexa for business, and Capital One is one of its launch partners.

    Mortgage providers and wealth managers are also exploring ways to offer their services over such conversational devices.

    A brand-new cybersecurity watchdog just shut down a $ 15 million cryptocurrency scam (Business Insider), Rated: A

    US regulators appear to be paying more attention to the opaque world of initial coin offerings.

    The Securities and Exchange Commission announced Monday it halted a fraudulent ICO “falsely promising” over 1,000% returns. The regulator said this was the first case filed by its brand-new cybersecurity unit, aptly named Cyber Unit.

    Trump pick plans radical shake-up of consumer protection agency (Financial Times), Rated: A

    US banks and other financial companies are preparing for a lightening of their compliance burden in areas from payday lending to mortgages as President Donald Trump tightens his grip on a powerful regulator set up to protect consumers.

    “Virtually the entire range of regulations previously adopted by the CFPB could be subject to review,” says Quyen Truong, a former senior figure at the agency who is now a partner at law firm Stroock & Stroock & Lavan. “There’s no particular set of rules that would be considered sacrosanct.”

    In an early sign of his intent, Mr Mulvaney instituted a 30-day freeze on new initiatives within hours of assuming office.

    Reforms that Mr Cordray had yet to introduce that would extend the CFPB’s reach into new areas, including mooted restrictions on small business lending, are now unlikely to see the light of day.

    Payday Lending And The New CFPB (PYMNTS), Rated: A

    As we noted when we first covered the final draft of the payday lending rule, Congress retains the power to keep the rule from ever making it into the books, so to speak, through the power of the Congressional Review Act. The CRA not only would prevent the payday lending rule from going into effect, but it would also prevent any similar rule changes from being considered for the next five years.

    After some dormancy on the issue, the House of Representatives passed a CRA resolution Friday that would effectively kill the payday lending rule in its cradle.

    The move comes as a bi-partisan effort – somewhat surprising, given the general tenor of Congress at present, particularly when it comes to consumer protection issues – with three Republican and three Democrat co-sponsors.

    Mulvaney has won the first round in court, as a U.S district judge rejected English’s request for a temporary restraining order to prevent Mulvaney from taking over. But English has said she intends to fight on and will seek a preliminary injunction against Mulvaney and the administration.

    Congress has only 60 legislative days from the publication of the rule in the federal register to invoke the CRA, and the rule passed on Nov. 17.

    Madden ruling was a step backward. Congress should fix it (American Banker), Rated: A

    I have been, far more often than not, on the same side of policy issues as the leading consumer and civil rights groups. But I disagree here: Madden is not just legally wrong; it is also bad public policy, because it moves us further away from creating a more effective and inclusive financial system. Bipartisan, bicameral proposals have already been introduced in Congress to fix Madden. Congress should pass them.

    U.S. News magazine cites LendingPoint in ‘Best Personal Loans’ list (LendingPoint), Rated: B

    We’ve been named to the “The Best Personal Loans of 2017” list by the prestigious U.S. News and World Report.

    U.S. News named LendingPoint best for “Fair to Good Credit With Merit-Based Qualifications.”

    LendingTree Selects Gordian Knot Analytics Group’s Comprehensive Segmentation Subscription Service (Guru Focus), Rated: B

    LendingTree (NASDAQ: TREE), the online loan marketplace, announced today that it has entered into a multi-year subscription for segmentation analysis and database scoring with Gordian Knot Analytics Group, utilizing their unique segmentation methodologies and proprietary machine learning toolset. Gordian Knot offers proprietary marketing analytics machine learning tools that help LendingTree more effectively target and engage with the right consumers to drive the business forward and maximize value for current and future customers.

    FinTech Leader OppLoans Named 6th Best Place to Work Nationally (Daily Telescope), Rated: B

    Socially responsible online lender OppLoans received top rankings in Glassdoor’s 2018 Best Places to Work award. The start-up was named the sixth-best place to work nationally for small- to medium-sized businesses.

    The review-based rankings serve as a capstone to a stunning year of growth for OppLoans. Accolades include rising over 200 positions to reach number 219 on the Inc. 500 list, earning an A+ rating from the Better Business Bureau, being named the third-fastest growing technology company in Chicago by Built In Chicago and launching OppU, a free, standards-aligned online curriculum that teaches personal finance skills.

    PeerStreet’s Brew Johnson Named 2017 HousingWire Vanguard Award Winner (BusinessWire), Rated: B

    PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that its Co-Founder and CEO, Brew Johnson, has been named to HousingWire’s 2017 list of Vanguard Award winners. HousingWire’s 2017 Vanguard Award recognizes top leaders from all areas of the mortgage industry, including those in lending, real estate and investing.

    Why Do I Have an Affirm Payment Due After I Returned a Phone? (Republic Wireless), Rated: B

    If Affirm was used to finance a purchase from the Republic Online Store, all carted items, including shipping, must be financed through Affirm. Shipping charges are not refunded by Republic Wireless. This means that you will still be responsible to Affirm for any shipping costs you financed and interest that has accrued.

    United Kingdom

    Peer-to-peer lender Ratesetter loses £23m after ad investment flops (The Times), Rated: AAA

    Ratesetter slumped to a £23 million loss for the year after a disastrous investment in an advertising business.

    The loss was due in large part to a £14 million write-off on Adpod Limited, which the lender ended up owning after using its own capital to prevent a huge default on its peer-to-peer loan book from hitting investors.

    The loss is sharply higher than the previous year’s figure of £5.3 million.

    RateSetter to launch IFIsa in February (Bridging&Commercial), Rated: AAA

    Peer-to-peer lending platform RateSetter expects to launch its Isa in February 2018.

    Once the Isa launches, customers will have until 5th April 2018 to invest the 2016/17 Isa allowance of £20,000.

    Lloyds Banking Group and Royal Bank of Scotland to close branches (Business Insider), Rated: AAA

    Two of the UK’s largest banks, 

    Source: Business Insider

    Orca accepted into regulatory sandbox scheme (p2P Finance News), Rated: A

    PEER-TO-PEER investment platform Orca is one of 18 firms that have been accepted into the third phase of the Financial Conduct Authority’s (FCA) regulatory sandbox scheme.

    The FCA received 61 submissions for the third phase of the scheme, of which 18 met the eligibility criteria and were accepted to move towards testing.

    One of the successful applicants is Orca, which is developing an intelligent peer-to-peer investment platform which lets users diversify across multiple P2P platforms, lending sub-sectors and borrowers.

    Personal Finance App Squirrel Now Processes £1 Million A Month (Crowdfund Insider), Rated: A

    Squirrel, a personal finance app designed to help users have more control over their money, announced this week that it now processes £1 million a month. The company reported that it processed its 10 million last week.

    Squrriel is currently seeking £400,000 through its equity crowdfunding campaign on Crowdcube. Funds from the initiative will be used to continue the expansion of Squirrels platform.

    How an MBA entrepreneur made his multiple-account bank card add up (Financial Times), Rated: A

    Israeli Shachar Bialick spent the first decade of his working life founding and backing start-ups before he dropped everything to move overseas and take an MBA.

    He started Curve, a fintech company, to simplify personal finances with a single bank card for multiple accounts from different providers.

    “We have too many cards, too many accounts, and too many products and services we use to manage our money,” he adds. “Curve is my biggest, most ambitious business so far. We are aiming to create an entirely new category in the banking system.”

    Curve has raised $12m in venture capital funding and added corporate partnerships to extend the services it offers, such as an expense filing system provided by Xero, the online accountancy service.

    Aire partners with retailer N Brown as more retailers become lenders for shopping middle class (Aire Email), Rated: A

    Aire, which provides a more accurate way for lenders to understand and score new applicants, today announces a first-of-its-kind partnership with online retailer N Brown, as research data reveals the ‘new norm’ of UK shoppers choosing to spread the cost for their retail purchases over time.

    The new agreement will see Aire provide its augmented credit assessment technology to support N Brown, which operates online stores such as JD Williams, in analysing the full picture of online customers and the true benefits and risks that come with them. Aire combines technologies of Artificial Intelligence with data science and deep knowledge of credit, which will enable N Brown to reach a wider group of customers without increasing its risk. After recent announcements about new partnerships in the p2p lending and car finance spaces, Aire’s expansion into the retail sector means that it is adding another new market to its portfolio in under six months.

    Key insight:

    –          New partnership between Aire and online retailer N Brown for customers who choose to open a new credit account

    –          Aire adds retail finance to its growing portfolio

    –          New research finds that UK adults pay off on average of £40 per month for retail purchases

    –          9% of UK adults increased their monthly commitments in the last two years

    Research shows in-store crowds are biggest stress factor for christmas shoppers (DIY Week), Rated: A

    The new research by Swedish payments provider Klarna delves into the views of more than 2,000 consumers, and reveals that Brits today are so stressed out in the extended run up to Christmas that they’re overwhelmed when the day itself arrives.

    In-store crowds were the number one stress for a quarter of respondents, whilst finding the perfect gift was the biggest source of stress for 20% of those surveyed.

    These pressures could have a big impact on the bottom line of merchants if they’re not addressed; more than a third of consumers have previously walked out of a shop in frustration as a result. This is not just a bricks and mortar issue – 1 in 10 respondents have abandoned their online basket in frustration when the process is too complex, suggesting there’s still work to be done to smooth the purchase process online.

    FinTech Marketplace Wealth Migrate Continues Expansion with New UK Office (GlobeNewswire), Rated: B

    Wealth Migrate, (KPMG Global Fintech Top 50), a global online real estate marketplace, today announced the opening of a new office in the U.K. and the appointment of a new country CEO, as the firm continues to build on its global presence as part of a strategy to meet growing demand from investors.

    To better serve its community of investors in this region, Wealth Migrate has opened a new office in London.

    Adding to the news of this expansion, Wealth Migrate additionally announced the opening of their U.A.E. office and the appointment of a new U.S. based CEO this week.

    To head up the new office, Wealth Migrate has appointed Ken Williams as its CEO of Wealth Migrate, U.K.

    China

    Runaway borrowers the new face of China’s personal credit boom (SCMP), Rated: AAA

    China’s online lending boom has sent a steady stream of new clients to Guangzhou lawyer Luo Aiping in recent months: the parents and siblings of young men trapped or ruined by usurious debts.

    Zeng Hong, from Hunan province, is a typical client. She went to Luo for help because she had been harassed by calls from debt collectors for months after her 27-year-old brother ran away, leaving behind a two-year-old son and more than 300,000 yuan (US$45,400) in debts.

    Zeng wanted to help repay her younger brother’s loans, but 300,000 yuan is a big sum for a poor family and her husband strongly opposed her plan. She approached Luo to ask whether the debts and interest her brother had incurred were legal.

    China Launches Massive Debt Crackdown (ValueWalk), Rated: AAA

    You see, in an effort to fuel economic growth over the past few years, China has taken on a lot of debt. Since 2008, China’s debt as a percentage of economic output has increased from around 160 percent to around 280 percent at the end of 2016. (By comparison, the total debt in the U.S. as a percent of economic output is upwards of 300 percent.)

    Source: ValueWalk

    Why it matters: China is BIG and getting bigger

    With a GDP of US$11.2 trillion, China is already the world’s second-largest economy (it will soon be the largest), and it has the second-largest stock market. The country will also soon have the world’s biggest middle class, totalling over 550 million people by 2022. To put this in perspective: That’s 1.7 times the entire population of the U.S.

    Consumer loans (such as peer-to-peer (P2P) lending and payday loans) have grown rapidly recently. For example, consumer loans jumped 300 percent compared to last year.

    SoftBank’s Son Eases Lufax Peer Pressure (Bloomberg), Rated: AAA

    Lufax, the online wealth manager that’s among the world’s biggest startups, has hired five banks to work on a Hong Kong initial public offering of as much as $5 billion, according to IFR.

    Lufax is the world’s 10th-largest unicorn, or startup worth at least $1 billion.

    Source: Bloomberg

    Lufax had a loan balance as of Sept. 28 of more than 158 billion yuan ($24 billion), more than three times the 43 billion yuan held by China’s second-biggest P2P lender, New York-listed Yirendai Ltd., according to wdzj.com, a Chinese website that tracks online financiers.

    DAILY BRIEFING (TechNode), Rated: B

    What happened: The Ping An-backed online wealth management firm Lufax has hired five banks to work on an up to $5 billion Hong Kong IPO.

    Why it’s important: A major player in China’s P2P lending market, Lufax will join a number of fintech companies that go public in recent months. It was eyeing an IPO as early as last year but later delayed the process due to market challenges and regulatory uncertainties, the CEO told Bloomberg last year. —Rita Liao

    China’s Lufax picks banks for up to $5 bln Hong Kong IPO – Reuters

    CreditEase Received Top Rankings in Global FinTech Investment by CB Insights and FT Partners (PR Newswire), Rated: A

    CreditEase, a world-class financial technology conglomerate based in Beijing, China, specializing in inclusive finance and wealth management, announced today that its venture fund, CreditEase FinTech Investment Fund (“CEFIF”) has recently been ranked No. 7 by CB Insights as “Top 10 Most Active VC Investors in Global FinTech Companies” and No. 1 by FT Partners as “Most Active FinTech Investors (Corporate VC)”.

    Source: CB Insights FinTech Report_Q3 (PRNewsfoto/CreditEase)

    How This Chinese Fintech Company Is Innovating by Leasing Cows (Fortune), Rated: A

    Particularly, Ning Tang, CEO of fintech firm CreditEase, is lending consumers cows in a bid to reach those living in rural areas who might have limited access to credit and financing.

    The rural population accounts for 48% of China’s total, with agriculture accounting for about 8.6% of the the nation’s Gross Domestic Production in 2015, according to the World Bank. Income in rural China has also been on the rise, with urban income narrowing to 2.7 times that of rural income from 3.3 times in 2009. And though migration toward the city has been on the rise and the nation’s dependence on farming and livestock is on the slide, rural populations and agriculture are still a significant part of the country’s economy.

    IN CHINA, THE CHARACTERS FROM THE SHOW APPEAR IN THE COMMERCIALS, TOO (AdAge), Rated: A

    iQiyi, which is backed by Chinese internet giant Baidu, adopted the tactic first and developed it into a commercial product when it broadcast the 1930s tomb-raiding adventure tale “The Mystic Nine” last year. The first batch of advertisers ranged from iQianjin, a peer-to-peer lending app, to PepsiCo, which showed characters chowing down on Lay’s and gulping Pepsi.

    The other major services, Alibaba Group’s Youku Tudou and Tencent Holdings‘ video platform, have embraced the tactic too. At iQiyi, the cost for embedding one such commercial in an episode ranges from $150,000 to $530,000, depending on projected viewership, Yuan says.

    European Union

    Worldpay Partners with Klarna to Launch Invoice and Credit Based Payments in 6 Key European Markets (PR Newswire), Rated: AAA

    Worldpay, a global leader in payments, has announced that it will partner with Klarna, a leader in invoice and credit based payments, to further enhance its product portfolio. From today, Worldpay customers trading in AustriaFinlandGermanythe NetherlandsNorwaySweden and the United Kingdom, and wishing to accept payments on invoice or instalments, will be able to use Klarna’s invoice and credit based payments from Worldpay. This will help eCommerce businesses to improve conversion rates by up to 20% and provide a fast and smooth checkout process.

    These new payment options will allow consumers to decide when to pay for the items once they have received their goods. Instead of a request for credit or debit card details at the point of checkout, consumers are prompted for their email address and postcode, ensuring a quicker checkout process and leading to lower cart abandonment. The solution allows consumers to manage the terms of their payment, be it 14-day payment by invoice, by fixed or flexible instalments, spreading the cost over several months.

    The move into credit and invoicing payments follows demand from customers wanting to expand the breadth of payment methods offered. Worldpay is one of the first payments companies to deploy this new payment integration, providing superior market coverage as well as faster time to market since there is no need for a new plug-in when  legacy technology is updated.

    Fintech deposit marketplace hits 100,000 customers (AltFi), Rated: A

    Savings specialist Raisin continues to gain momentum. The savings account marketplace now has itself 100,000 customers. The company is also integrated with more than 40 banks, from across 18 European countries, including a number of challenger banks and even an online lender (Younited Credit). SolarisBank is its newest partner.

    ConsenSys Ventures has made its first four investments (TechCrunch), Rated: B

    But the companies the fund is backing come from some relatively seasoned entrepreneurs. BlockFi, the firm’s lending for liquidity startup, was founded by Zac Prince — a serial startup founder whose previous idea was the lending platform for the underbanked, Cognical.

    Up to 5% Cashback On Long-Term Investments Offered by Mintos (P2P-Banking), Rated: B

    Lativan p2p lending marketplace Mintos just launched a cashback campaign running for the remainder of December. Investors investing in new loans with a term of at least 24 months on the primary market will receive a cashback of 2% to 5% depending on term length. The cashback will be credited within 6 days says Mintos.

    Important: To be eligable an investor needs to enroll once for the campaign by clicking on the promotion banner inside the Mintos dashboard.

    International

    Salt and Coinloan Promise Crypto-Asset Backed Fiat Loans (Bitcoin.com), Rated: AAA

    Typically, when we think of taking a loan, we think of going to a bank, filling out a ton of paperwork and then getting denied the loan unless a guarantor or cosigner signs as well. However, blockchain banking startups like Salt and Coinloan aim to change this by creating a peer to peer lending platform on the blockchain. These platforms allow users to leverage their bitcoin and other cryptocurrencies as collateral for fiat loans.

    Salt hails from the land of the free, a.k.a Denver, Colorado, USA.

    On the other hand, Coinloan has Baltic roots and is headquartered in Estonia.

    Salt will be starting straight out of Denver, Colorado and is set to launch their blockchain backed lending platform, BTC collateralized loans and loan fund by the end of 2017. In 2018, they will be launching ethereum collateralized loans in Q1, credit cards in Q2 and altcoin collateralized loans in Q3.

    By contrast, Coinloan is still currently running their ICO. By 2018, they hope to obtain payment licences in Q2, develop mobile applications for IOS and android by Q3 and enter the Asian market in 2019.

    Lendoit & RSK creates a decentralized BTC lending future together (Live Bitcoin News), Rated: A

    In about 2 weeks, Lendoit will launch its official token Pre-sale, but it can’t wait to reveal the secret that will change the future of decentralized BTC lending, which the company has entered together with the largest and most promising blockchain-based project, The RSK Project.

    Right from Argentina is Rootstock or popularly called RSK. This company is well-known for its open-source smart contract stage which has a 2-dimensional peg to Bitcoin. Amazingly, RSK uses merge-mining to reward bitcoin miners and give them the chance to be part of the smart contract ecosystem.

    The Goal? To ensure that the highest level of functionality and value is added to the entire bitcoin ecosystem through the use of smart contracts, increased scalability, and near-instant payments.

    Lendoit removes all intermediaries in the lending process, creates a trusted and secure platform for participants through the smart contract, and gives users a decentralized, anonymous platform where upscaling, lending, and borrowing are done hassle-free.

    Source: Live Bitcoin News

    PNC Live On New Real-Time Payments Network Using Finastra (Payment Week), Rated: A

    PNC, a top-10 US bank by assets, is live on RTP, The Clearing House’s new US real-time payments system, using Finastra’s payment services hub, Fusion Payments.

    “The ability to make an immediate payment at any time, on any day of the week, with a real-time confirmation of the payment significantly transforms the way businesses and consumers make payments in the United States. Emerging technologies such as RTP are creating opportunities for banks and clients to re-imagine our business models.”

    Trulioo Recognized As a Global Leader in Digital Identity Verification (PRWeb), Rated: B

    Trulioo, the global identity verification provider, is delighted to be recognized as the global identity verification leader in a recent comprehensive report published by Let’s Talk Payments (LTP).

    India

    Why America could miss out big time on India’s fintech revolution (TechCrunch), Rated: AAA

    Morgan Stanley expects India’s digital payments penetration to increase from 5 percent today to 20 percent, and the e-commerce market to reach $200 billion, with 475 million e-commerce shoppers, adding up to a GDP upwards of $6 trillion — all by 2027.

    India now has 800 million mobile phone users with 430 million having internet connectivity. According to Morgan Stanley, the number of internet users is expected to grow to 915 million by 2027.

    Source: TechCrunch

    In 2016, China’s digital payments were already 50 times America’s. Alibaba and Tencent understand ecosystems better than anyone else in the world, including American companies.

    Asia

    After success at home, Toss sets sights overseas (Korea JoongAng Daily), Rated: AAA

    After emerging as one of the top fintech start-ups in Korea, Viva Republica, the company behind Korea’s top peer-to-peer transfer app Toss, is zeroing in on Southeast Asia as its next target market.

    “While more than 70 percent of the population is using smartphones, their financial services are equivalent to that of Korea in the 1980’s. Our goal is to bring our story and product to Southeast Asian countries such as the Philippines and Vietnam and to improve the level of financial services in the market.”

    As of November this year, the accumulated transactions through Toss reached 10 trillion won ($9.2 billion). In November alone, the platform handled more than one trillion won, a feat that comes just two and half a years since it launched in February 2015. The company said its annual sales will come to 20 billion won by the end of this year and reach the break-even point sometime next year.

    M’sian regulators likely to enforce licensing for cryptocurrency exchanges (The Star), Rated: B

    Malaysian regulators are looking to clamp down on initial coin offerings or ICOs by expanding the definition of “securities” in existing laws, according to industry sources.

    The regulator is also likely to require some form of licensing for cryptocurrency exchanges to operate on Malaysian shores.

    Mexico

    Mexican Senate passes fintech law (Reuters), Rated: A

    Mexico’s Senate on Tuesday approved a bill that would regulate its fast-growing financial technology sector, including crowdfunding and cryptocurrency firms, paving the way for a vote by the lower house.

    The bill, which seeks to promote financial stability and defend against money laundering and financing of extremists, is expected to pass in a final lower house vote by Dec. 15, said three sources familiar with the measure.

    Authors:

    George Popescu
    Allen Taylor