Thursday February 7 2019, Weekly News Digest

origination costs

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-1 Trust. LendingPoint increases mezzanine financing. UK publishes Open Banking operational guidelines. Raisin raises $114M. Today’s main analysis: International P2P lending volumes for January 2019. Today’s thought-provoking articles: Where are we in the credit cycle? Marketplace lending associations respond to FDIC small dollar lending rule request. […]

The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.

origination costs

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-1 Trust (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-1 (“SCLP 2019-1”). This is a $480.7 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1

Class Preliminary Rating Class Principal
A AAA (sf) $351,800,000
B AA+ (sf) $39,400,000
C A+ (sf) $51,500,000
D BBB (sf) $38,000,000

Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA

This week’s big funding news was that digital savings and investing platform Acorns raised $105 million in its Series E round, bringing its total valuation to $860 million.

The US economy generated 304 k jobs in January, marking a record 100 months of job growth. Average hourly earnings rose by 3.2% and the unemployment rate rose slightly to 4%.

Marlette CEO Jeff Meiler discussed profitability and loan performance with Peter Renton (transcript and podcast here).  Marlette announced another year of profitability in 2018.

Prosper’s December Performance Update showed that Prosper is focusing on making higher grade loans with 62% of December originations rated AA-B.

Overall, lenders view the US consumer as healthy and the US economic growth as solid.

The Industry Responds to FDIC Small Dollar Lending Rule Request (Lend Academy), Rated: AAA

So, back in November the FDIC issued a Request for Information on Small Dollar Lending. They received more than 60 responses from banks, industry associations, non-profit groups, fintech companies and individuals. While the FDIC did not define exactly what they meant by a small dollar loan the respondents, for the most part, took it to mean loans of less than $5,000.

There are many mainstream online lenders offering personal loans down to $1,000 and there are also many fintech companies offering loans under $1,000. Companies like Oportun, Insikt, LendUp, Elevate, Opploans and many others offer these sub-$1,000 loans using the latest technology tools to make this process more efficient.

The Marketplace Lending Association (MLA) provided a detailed 10-page response where they urged the FDIC (and other regulators) to do more to support banks and foster closer working relationships with fintech providers:

The Online Lenders Alliance is a trade group that contains many small dollar lenders who operate online. Not surprisingly they are against the 36% rate cap but they also have a lot in common with their sub-36% brethren such as promoting partnerships between banks and fintech companies.

Source: Online Lenders Alliance

The Center for Responsible Lending gave one of the most detailed responses to the RFI, a full 38 pages.

Read the full Online Lenders Alliance response here.

LendingPoint Again Upsizes Its Mezzanine Financing, Bringing It to More Than $ 67.5 Million (Business Wire), Rated: AAA

LendingPoint, the consumer lending platform, announced it closed an increase of its mezzanine financing, bringing the total of the facility to $67.5 million. A Paragon co-investor joined the facility as a lender.

Today’s announcement is the latest in a string of financing transactions LendingPoint has closed in the past 15 months. The company secured an up to $500 million Senior Credit Facility in August 2017 and an up to $600 million Senior Credit Facilityin May 2018, both arranged by Guggenheim Securities.

Eight Challenger Banks Traditional Institutions Should Worry About (The Financial Brand), Rated: AAA

1. BankMobile — Hooked Up With T-Mobile

Parent Company: Customers Bank
Websitewww.bankmobile.com
Launched: 2015
Category: Mobile bank

The creation of father-daughter team of Jay and Luvleen Sidhu (CEO and President respectively), BankMobile is an evolving banking-as-a-service platform.

2. Chime — Super Slick App

Websitewww.chimebank.com
Launched: 2013
Category: Mobile banking and money management app (in partnership with the The Bancorp Bank)
Notable Milestone: 2 million account relationships

3. Finn — Chase Bank’s Millennial Play

Parent Company: JPMorgan Chase
Websitewww.chase.com/personal/finnbank
Launched: 2017
Category: Mobile bank

Chase is offering a $100 for opening a new Finn account (as long as you make ten qualifying transactions in the first 60 days).

4. Marcus — Sucking Up Your Customers

Parent Company: Goldman Sachs
Websitewww.marcus.com
Launched: 2016
Category: Online bank
Notable Milestones: 2+ million customers and $35 billion in deposits.

Marcus’ loans range from $3,500 to $40,000 at rates of 6.99% to 25%. The average loan in 2018 was $15,000 over four years with a 12% interest rate, according to Bloomberg BusinessWeek. That leaves plenty of margin room even with its online savings rate up at 2.25% (as of January 2019).

5. N26 — Platform Maestro

Websiten26.com
Launched: 2015
Category: Mobile bank
Notable Milestones: 2.3 million users and $1 billion in deposits.

6. Revolut — The Amazon of Banking

Website:www.revolut.com:
Launched: 2015
Category: Mobile financial provider

Notable Milestones: 3 million customers — both consumers and businesses. Opening about 8,000 accounts per day. 1.2 million monthly active users. Monthly transaction volume $3 billion. Received European banking license in December 2018. More than 60,000 U.S. customers on Revolut’s waiting list.

7. SoFi Money — Join The ‘Waitlist’

Parent Company: Social Finance, Inc.
Websitewww.sofi.com
Founded: 2011 (Sofi Money Beta Launch, June 2018)
Category: No-fee Mobile banking account

8. Varo Money — Almost OCC Approved

Websitewww.varomoney.com
Founded: 2015
Category: Mobile banking/money management app in partnership with the The Bancorp Bank.
Notable Milestones: First mobile-only bank to get preliminary approval for a national bank charter.

Walsh feels Varo Money is particularly suitable for the 70% of the people they initially surveyed who are “hands-off creditworthy Millennials.”

P2P Global sells US loans and chases ‘less volatile returns’ (AltFi), Rated: A

It said its net asset value (NAV) rose by 0.78 per cent in the final month of the year, amounting to a total 5.2 per cent return in 2018, as the fund sold off a number of poorly performing loans, according to its December newsletter published today.

15 Minute Mortgages? Meet Molo – The New Fintech Aiming To Shake Up The Market (Forbes), Rated: A

Francesca Carlesi is the Co-Founder and CEO of Molo, a new, super exciting fintech start-up, aiming to reimagine how people get mortgages forever. She was originally a University professor, envisioning pursuing an academic career, before quickly joining McKinsey & Co., immediately after finishing her Ph.D. Molo is her first experience as a start-up entrepreneur after a long career in the finance and banking world. Here she discusses how she made the transition and found the journey so far.

Building a bank designed for freelancers and solopreneurs with Joust’s George Kurtyka (Tearsheet), Rated: A

57 million people in the US freelance and 30 million or so of those are micro and small businesses. Small businesses use approximately a dozen apps and pieces of software to manage their finances. From a bank account to payments to QuickBooks to factoring, microbusinesses spend 365 hours a year reconciling the data between all their financial tools.

1 IN 4 SAYS MONEY IS THE BIGGEST HURDLE TO RUNNING A BUSINESS (Valpak), Rated: A

Key Findings

  • 1 in 4 Americans considers funding to be the biggest obstacle.
  • More women say not knowing how to run a business is a challenge than men.
  • Millennials ages 25 to 34 are the most afraid of failure.
  • 1 in 3 Americans lacks a strong business idea to begin with.
Source: Valpak

Plaid And Quovo Just Scratching The Surface With Data Aggregation (Forbes), Rated: A

The fintech consolidation is starting, at least in the financial data side of the business, with Plaid recently announcing an 

Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system (Business Insider), Rated: A

United Kingdom

Due diligence on P2P platforms (FT Adviser), Rated: AAA

In the immediate aftermath of the credit crunch, politicians enthused about the new crop of peer-to-peer providers and even created the Innovative Finance Isa.

UK financial institutions will receive more clarity on Open Banking (Business Insider), Rated: AAA

The Open Banking Implementation Entity (OBIE) has published its Operational Guidelines and accompanying checklist to help financial institutions (FIs) better navigate Open Banking, per a press release.

With the guidelines, the OBIE aims to clarify the regulatory requirements for a dedicated interface, as set out in the revised Payment Services Directive (PSD2), RTS, EBA Guidelines, and Financial Conduct Authority (FCA) Approach documents.

Source: Business Insider Intelligence

Read the full report here.

Starling launches euro account as UK prepares for Brexit (AltFi), Rated: A

The digital-only bank, which expects to top one million customers this year, said the new account is a simple was to ‘send and receive euros for free’.

Alt Credit Scorer Aire Scoops Up $ 11 Million in Growth Funding (Finovate), Rated: A

Alternative credit assessment innovator Aire has picked up $11 million in new funding. The London-based company, which demonstrated its Aire Credit API at FinovateEurope 2015, said the new capital will support the continued development of its credit insight engine, as well as support expansion in the U.S.

AccountScore uses Open Banking to offer real-time debt advice with Insolvency Panel (AltFi), Rated: A

A new service has been set up for people in debt, giving them the power to let advisors see their bank accounts in order to offer quick and accurate advice.

The service is a tie-up between fintech bank transactions firm AccountScore and The Insolvency Panel launched this month.

Why are SMEs declining external investment, and is it a barrier to scale? (Vox Markets), Rated: A

Small businesses accounted for 22 per cent of the UK’s economic growth in 2017 according to Octopus Investments High Growth Small Business Report. These SMEs, which comprise less than one per cent of UK companies, created one in five jobs in 2017 and hold a wealth of potential for our economy. When it comes to the future of the UK business landscape, it seems that the best things do come in smaller packages.

SME finance app ANNA gets £8.5m funding (Fintech Futures), Rated: A

SME business account Anna has received an investment of £8.5 million from Kinetik as it prepares to launch new tools and products.

What Winter? Crypto Lending Firm Has Issued over $ 630M in Just Six Months (NullTx), Rated: A

The cryptocurrency winter has been one of many contrasts. While some firms have gone out of business and shut down, some have thrived. Celsius Networks belongs to the latter.

Based in London, the firm launched just six months ago, but it has grown by leaps and bounds. It has lent over $630 million in loans, predominantly in cryptocurrencies.

Aave Launches Bitcoin on Its Ethereum-based Crypto Lending Marketplace ETHLend (PR Newswire), Rated: A

AAVE, a UK-based FinTech Startup, today announced a new release for its crypto lending marketplace ETHLend. The release introduces the capability for the ETHLend users to use their Bitcoin holdings as a collateral to borrow funds for spending.

Exclusive: P2P firm shuts platform (AltFi), Rated: B

The UK Bond Network, a p2p platform for corporate bonds, is closing as of today Monday 4 February 2019, according to the firm.

China

From private bank client to farmer: a Chinese model of social lending (Euromoney), Rated: AAA

Financial services group CreditEase runs an app through which its private banking clients can be connected to needy women farmers in China’s rural interior. It’s a remarkable initiative taken up by 200,000 farmers and shows what can be done with low-level credit. But how does the risk management work?

European Union

PayPal backed fintech Raisin raises $ 114m (Financial Times), Rated: AAA

German financial technology group Raisin has raised $114m in new funding from high-profile backers including Index Ventures and PayPal, in one of the largest fundraisings to date in Europe’s emerging “wealth tech” space.

ING Bridges Dutch SMBs To Funding Options (PYMNTS), Rated: A

Dutch bank ING is linking its small business (SMB) customers to alternative lending marketplace Funding Options, the firms said on Monday (Feb. 4).

The partnership means Funding Options has launched services in the Netherlands, expanding beyond the U.K. for the first time, said reports in Crowdfund Insider. Approximately 1.8 million SMBs in the Netherlands will gain access to Funding Options via ING Bank.

The Irish fintech startups disrupting their industries (Irish Times), Rated: A

Also based at NOVA is Initiative Ireland which aims to give cautious investors lower-risk access to the Irish property market. With poor interest rates, investors face the perennial problem of what to do with their money. Risk takers will always have options, cautious investors less so, and this is Initiative Ireland’s sweet spot. It is offering returns in the order of six to eight per cent to those investing in its novel peer-to-peer lending platform for developers building social and affordable housing.

Banco BNI Europa, NDGIT accelerate PSD2 and Open Banking in Europe (The Paypers), Rated: A

The European challenger bank in Portugal, Banco BNI Europa, has become a customer of NDGIT, provider of the API platform for banking and insurance in Europe.

BNI Europa implements “PSD2 Ready”, NDGIT’s smart standardized software solution following the Berlin Group RTS standard, to fulfil all PSD2 requirements. This cooperation is a milestone for the future development of Open Banking in Europe and for BNI Europa the next step in their company’s development.

International

International P2P Lending Volumes January 2019 (P2P-Banking), Rated: AAA

Milestones achieved this month (total volume since launch):

Source: P2P-Banking

Global regulators are struggling to define fintech credit (Business Insider), Rated: AAA

While many jurisdictions have highlighted fintech credit as a key development in the nonbank financial space over the last year, they struggle to define exactly what fintech credit is, per findings of the Financial Stability Board’s (FSB’s) Global Monitoring Report on Non-Bank Financial Intermediation 2018.

Source: Business Insider Intelligence

Why VC Is The Answer To Falling Returns (Forbes), Rated: A

In uncertain times, VC offers the advantage that its performance is completely uncorrelated with public equity markets. Last year, both the US and Europe saw record VC investment, reaching over 

Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? (Tearsheet), Rated: A

Those of us who work in finance can’t imagine life without a bank account. But for the world’s 1.7 billion unbanked adults, this is a reality. In the U.S., 33.5 million households are either unbanked or underbanked and lack the ability, criteria, or financial literacy to access banking services. Without access to savings and credit, these people often live — and remain — in a cycle of poverty.

In the U.S., nearly 95 percent of adults have a mobile phone and 80 percent of those are smartphones. And since they’re not tied to traditional banking norms such as branches, ATMs, and credit cards, the unbanked are more likely to adopt digital banking via their phones.

TymeBank in South Africa uses AI to help people learn about their money and how to save. It teaches people about credit scores and rewards them for good financial behavior — TymeBank offers an amazing 10 percent interest rate on savings accounts for customers who can define specific financial goals they want to hit, and then contribute to them.

Sancus to start accepting euros and dollars to fund loans (P2P Finance News), Rated: A

SANCUS will start accepting euro-denominated loans within the next few months, to help it expand its investor base.

The alternative business finance provider is also planning to establish a new base in the Cayman Islands by the end of 2019, a move which would allow it to accept dollar-denominated investments as well.

Revolut team ups with WeWork (AltFi), Rated: B

The new partnership will provide Revolut for Business customers with 3 months free of hot-desk space at a WeWork co-working space.

Australia

Australia’s getting wiser says Wisr in new campaign targeting disillusioned big bank customers (Mumbrella), Rated: A

Peer to peer lending service provider Wisr has targeted disillusioned big bank customers in its new ad campaign.

APAC

Diversify investments in P2P lending, youths urged (The Star), Rated: AAA

Technology-driven peer-to-peer (P2P) lending is becoming a popular investment choice among young investors, but the anticipated slowdown in the economy this year also raises the risk of losing money.

To protect their investment, a P2P financing platform operator said that investors should spread their investment into as many deals as possible.

Africa

DexAge – A Versatile Crypto-Trading Solution (Blockmanity), Rated: AAA

The P2P Crypto loan services allow users to retain their assets in case they predict the concerned cryptocurrency value might appreciate in the future. DexAge enables users to stake their crypto assets as collateral and acquire a loan of the same value to expand their investment profile.

Canada

Vancouver’s First P2P OTC Digital Trading Platform Officially Launched and Supported by Huobi Cloud Technology (Digital Journal), Rated: AAA

iBank Digital Asset L.P. (“iBank Digital”, “iBankEx” or the “Company”) has officially launched Vancouver’s first peer-to-peer (P2P) OTC digital currency trading platform on iBankEx. (www.ibankex.io) This launch is supported by Huobi Cloud (“Huobi Cloud”) technology, which has officially entered the Canadian market in 2019 with 120 exchanges around the world.

iBank Products & Services:

Fiat Lending – A decentralized global lending network connecting financial institutions worldwide by offering crypto backed loan business.

Crypto Lending – iBank provides crypto loans collateralized by your crypto assets in BTC/USDT with security and confidentiality.

Authors:

George Popescu
Allen Taylor

The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.

Thursday December 13 2018, Daily News Digest

unsecured personal loan balances

News Comments Today’s main news: FDIC opens comments on Special Purpose National Bank charters. Plaid raises $250M. P2PFA member lending exceeds 10B GBP. ThinCats raise 200M GBP. Bondora originates almost 8M euro in loans in November. Klarna joins Shopify Plus Partner Program. Nubank launches debit card. Today’s main analysis: Trends in credit card debt. Today’s thought-provoking articles: Consumer credit market poised […]

unsecured personal loan balances

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

FDIC Embraces FinTech (PeerIQ), Rated: AAA

Formation of new banks post-crisis is historically low. More banks have failed since 2009 than have new banks opened.This trend could leave some communities severely underbanked.

The FDIC wants to encourage new banks to startup and wants innovative FinTech firms to be part of that process. The agency wants to streamline its application process and is seeking comments on how that can be done.

The OCC’s Special Purpose National Bank (SPNB) charter allows FinTechs to operate as banks.

Fintech startup Plaid raises $ 250M at a $ 2.65B valuation (TechCrunch), Rated: AAA

The company is today announcing a $250 million Series C investment led by famed venture capitalist and the author of the Internet Trends reportMary Meeker, who will join its board of directors as part of the deal. The funds were raised at a valuation of $2.65 billion, according to sources close to the company. Capital from Meeker’s investment came from Kleiner Perkins’ growth fund — where Meeker has been a partner since 2010 — not from the reported billion-dollar-plus solo fund she’s in the process of raising.

New investors Andreessen Horowitz, Index Ventures, Norwest Venture Partners and Coatue Management also participated, as did existing investors Goldman Sachs, NEA and Spark Capital.

U.S. Consumer Credit Market Poised for More Growth in 2019 (TransUnion), Rated: AAA

Low unemployment rates and continued positive growth in both GDP and real disposable income are among the key drivers that will propel the U.S. consumer credit market in 2019. Partly due to the strong performance of these economic indicators, TransUnion’s (NYSE: TRU) 2019 consumer credit forecast found that originations and consumer balances are expected to increase for most credit products, while serious delinquency rates will likely decline or remain steady.

Source: Globe News Wire

A few outliers in the forecast come by way of serious credit card delinquency rates and originations as well as mortgage originations. Credit card delinquency rates are expected to rise from 1.94% in Q4 2018 to 2.04% in Q4 2019 as a shift toward more non-prime consumers with access to credit cards will likely negatively impact originations and consequently the serious delinquency rate.

Source: Globe News Wire

TransUnion Forecast: Top Consumer Credit Trends for ‘19

Trend #1: There’s Room for Growth in Personal Loans

Personal loans continue to display signs of strength, and total balances are expected to climb 20% to an all-time high of 156.3 billion by the end of 2019.

Trend #2: Affordability May Impact the Auto Industry

It’s also worth noting that the number of auto loan originations is expected to end 2018 at 28.5 million and grow to 29.4 million in 2019. This is a significant increase from recent years (27.5 million in 2017, 28.3 million in 2016, 28.0 million in 2015). This growth is expected to be driven from both ends of the risk spectrum. Yet as the growth continues, the serious delinquency rate is anticipated to remain muted, ticking up to 1.44% in Q4 2019, an increase from the expected 1.43% in Q4 2018 and the 1.43% mark observed in Q4 2017.

Trend #3: Homes Becoming More Expensive, but Home Equity Increases Could Be a Boon to Consumers

Mortgage originations have declined the past several quarters, a trend that is expected to continue into 2019.  Rising interest rates, increasing home prices, and supply constraints are driving lower origination numbers.  Average balances will continue to trend upward in 2019, growing from an anticipated $208,831 at the end of Q4 of this year to $218,490 by the end of Q4 2019, a 4.6% increase.

Trend #4: More Near Prime Consumers will Carry a Credit Card

Near prime consumers are expected to increase their origination share to 19.1% in 2019, up from 18.3% in 2018.

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

Americans repaid $40.8 billion in credit card debt during Q1 2018 – the second-largest quarterly payoff ever. But we added almost $38 billion back to our tab in Q3 and Q2 2018. We also began the year owing more than $1 trillion in credit card debt for the first time ever, after adding $87.3 billion to our tab in 2017.

Source: WalletHub

The $38 billion in credit card debt added during Q2 and Q3 2018 has nearly wiped out consumers’ large first quarter pay-down.

We ended 2017 with $87.3 billion in new credit card debt, and WalletHub projects a $70 billion increase in 2018 by the end of the year.

Source: WalletHub

Americans started 2018 with more than $1 trillion in outstanding credit card balances for the first time ever, and we are on pace to begin 2019 in even worse shape.

Cities with the Highest & Lowest Credit Card Debts

Percentile* City Median Credit Card Debt Cost to Pay off Months & Days Until Payoff
99 Colleyville, TX $5,593 $880 24 months and 28 days
99 Darien, CT $7,935 $1,167 23 months and 8 days
99 Park City, UT $5,376 $720 21 months and 5 days
99 Fairbanks, AK $4,655 $620 21 months and 2 days
99 Summit, NJ $4,953 $655 20 months and 29 days
99 Leawood, KS $4,857 $642 20 months and 29 days
99 The Woodlands, TX $5,088 $670 20 months and 27 days
99 Mill Valley, CA $5,110 $672 20 months and 26 days
99 Needham, MA $4,393 $577 20 months and 25 days
99 Sammamish, WA $4,386 $575 20 months and 24 days
99 Durango, CO $3,583 $466 20 months and 17 days
99 Lafayette, CO $3,600 $467 20 months and 16 days
99 Juneau, AK $4,166 $540 20 months and 16 days
99 Southlake, TX $5,988 $775 20 months and 14 days
99 Ridgewood, NJ $5,625 $727 20 months and 14 days
99 Hoboken, NJ $3,570 $456 20 months and 6 days
99 Westport, CT $6,112 $770 19 months and 30 days
99 Winchester, MA $4,618 $580 19 months and 28 days
99 Highland Park, IL $5,379 $672 19 months and 24 days
99 Bethesda, MD $4,599 $573 19 months and 22 days
99 Wasilla, AK $4,693 $584 19 months and 22 days
99 Monument, CO $4,157 $514 19 months and 17 days
99 Newton, MA $4,014 $494 19 months and 15 days
99 Lafayette, CA $5,028 $618 19 months and 13 days
99 Scarsdale, NY $5,231 $641 19 months and 11 days
99 Bloomfield Hills, MI $4,552 $557 19 months and 11 days
99 Deerfield, IL $4,698 $575 19 months and 10 days
99 Woodinville, WA $4,331 $528 19 months and 8 days
99 Brookhaven, GA $4,221 $513 19 months and 6 days
99 Hingham, MA $4,571 $554 19 months and 4 days
*99th Percentile = Least Sustainable Credit Card Debt

A Different Kind of Gender Gap: Homeownership Is More Common Among Single Women Than Single Men (LendingTree), Rated: AAA

  • Single women own considerably more homes than single men do. On average, single women own around 22% of homes, while single men own less than 13% of homes.
  • Oklahoma City was the metropolitan area where single men own the largest share of owner-occupied homes, at 16%. Even though single men own a greater proportion of homes in Oklahoma City than they do elsewhere in the country, they still own fewer homes than single women, who own 24% of residential properties in the area.
  • New Orleans was the metropolitan area where single women own the largest share of owner-occupied homes. In this area, single women own nearly twice as many homes than single men do: 27% compared with 15%.

OCC sees sharp drop in mortgages serviced by large banks (American Banker), Rated: A

The OCC’s quarterly metrics report, released Tuesday, showed continued improvements in credit quality of mortgage loans at banks. But it also noted that the report is based on $3.26 trillion in principal balances, representing 32% of all mortgages in the U.S. Ten years ago, that figure was $6.1 trillion in mortgage balances, representing 60% of all outstanding mortgages.

How Do Underwriters View Mortgage Lending? (Progress in Lending), Rated: A

Subprime personal loans will flourish in 2019 thanks to startups and Donald Trump (Quartz), Rated: AAA

Subprime personal loan balances have been climbing since 2014 and are forecast to increase 20% next year, to a record $156.3 billion, according to credit-scoring firm TransUnion. The last three months of this year will be the biggest quarter ever for origination, accounting for some 5 million loans.

San Francisco-based Affirm, founded by PayPal co-founder Max Levchin, is one of the leaders in point-of-sale loans and is available at more than 1,200 US retailers. The company says its lending process allows it to approve far more applicants across the credit spectrum than traditional lenders.

Payday lending has also increased. These days, this type of high-interest, short-term debt often takes place online through installment loans. San Francisco-based LendUp is an example of the new breed of payday lenders, charging annual percentage rates that can range from 30% to more than 1,300% depending on the type of loan, according to a report by NerdWallet.

Galaxy Digital Leads $ 30 Million Funding for Social-Crypto Startup Good Money (CoinDesk), Rated: A

Digital banking platform Good Money just raised $30 million in a Series A funding round to continue developing its app.

Led by Michael Novogratz’s Galaxy Digital (via its Galaxy EOS VC Fund), participants in the funding round included Breyer Capital, Blocktower Capital, Boost VC, Ken Howery, BlockChange Ventures, Cross Culture Capital, Troy Carter, Mitch Kapor, Peter Diamandis Blake Mycoskie and Justin Rosenstein, among others.

Half of Americans think using sharing services is risky (Biz Journals), Rated: A

Personal safety is a real concern Americans have about the sharing economy, according to a new survey commissioned by insurance company Lloyd’s.

The sharing economy includes companies that use data and develop platforms to connect people, including ride-sharing services like Uber and Lyft, apartment and home lending sites like Airbnb and VRBO, as well as peer-to-peer lending, reselling, co-working, and freelancing sites, per Forbes.

The analysis showed that 60 percent of American consumers believe they are putting their personal safety at risk by using sharing services because it means interacting with strangers, and 58 percent think that the risks outweigh the benefits.

Investors’ Harbour Launches New Fund That Will Finance the Development of Hawaii’s Newest Master-Planned Community (Investors’ Harbour), Rated: B

Admiral Realty Capital’s new private placement, Fund V, is engaged in providing financing to Puainako Heights Land Investment, the master-developer of a subdivision on the Big Island with over 330 single-family homesites. The offering is featured on the Boston-based crowdfunding platform Investors’ Harbour.

Different than most existing crowdfunding platforms, Investors’ Harbour does not feature an avalanche of small “fix-and-flip” projects handled by real estate enthusiasts. With a very low acceptance rate, Harbour only hosts larger-scale construction programs, conducted by commercial development firms with admirable track record.

Dharma-based Crypto Lending Platform Bloqboard Launches New Feature to Empower Lenders (Crypto Coin Spy), Rated: B

Bloqboard – a non-custodial digital asset lending platform for collateralized loans originated, settled, serviced, and managed on the Ethereum network and powered by Dharma and Compound – has today announced the release of a new feature they call ‘Offers to Lend’. This provides lenders with the ability to offer prospective borrowers their cryptoassets for peer-to-peer loans issued on the Dharma protocol.

Wyre partners with bZx, the protocol that powers decentralized margin lending (Cryptoninjas), Rated: B

Blockchain enabled payments company Wyre today announced a partnership with bZx, the protocol that powers decentralized margin lending. bZx will incorporate Wyre’s KYC/AML solution for DEXs to offer compliant trading.

United Kingdom

P2PFA member lending exceeds £10bn (P2P Finance News), Rated: AAA

PEER-TO-PEER Finance Association (P2PFA) platforms have cumulatively lent out more than £10bn, according to the trade body’s latest data.

Peer-to-peer platform ThinCats secures £200m funding deal (AltFi), Rated: AAA

The money comes from BAE Systems Pensions and is the second significant loan funding deal struck by ThinCats in the last few months.

Iwoca adds Barclays and HSBC to Open Banking connections (Finextra), Rated: A

iwoca, the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking.

Tide accounts for 1 per cent of UK’s SME banking market (AltFi), Rated: A

Digital business bank Tide has reached 56,000 SME customers, accounting for one per cent the UK’s 5.6m SMEs. The bank has more than doubled the number of customers using its services in the last 12 months.

UK recruiters say challenger banks and fintech businesses are now more appealing to candidates than traditional banks (Onrec), Rated: A

  • 55% of recruiters and HR managers have seen an increase in hiring rates over the last five years
  • Half of UK recruiters and HR managers have seen an increase in demand for AI, cryptocurrency and blockchain skills
  • 55% say the number of roles requiring these emerging tech skills has outstripped the number of available candidates
  • 32% of recruiters say traditional banks are the least appealing FS organisations to candidates, whilst cryptocurrency businesses are top

Sancus tightens credit processes amid no-deal Brexit fears (P2P Finance News), Rated: A

SANCUS BMS has prepared itself for a no-deal Brexit and tightened its credit processes to protect itself from a market slowdown, its chief executive has said.

Sancus BMS, which comprises the peer-to-peer lenders Sancus Finance and Sancus Funding, sent out an email to its community on Wednesday.

Starling Bank Adds Onedox to Its Marketplace (coverageR), Rated: B

Founded in 2015 with £1m in funding, Onedox helps people manage household bills and expenses by allowing them to connect their different accounts including gas, electric, internet, mobile, and insurance. The service – which is free of charge – allows users to stay on top of their bills while receiving personalized recommendations for saving money by switching to new providers.

China

China Lending Expands B2B Offerings With Supply Chain Service (PYMNTS), Rated: AAA

China Lending Corporation has announced the launch of its new supply chain financing services, which include a business factoring program.

In addition, China Lending has acquired 98.04 percent equity interest in Hangzhou Zeshi Investment Partners, which will enable China Lending to launch its new supply chain financing services in the near future, including financing products design, related corporate financing solutions, investments and asset management, and more.

Best/Worst Bets In Chinese Fintech (Seeking Alpha), Rated: A

China’s financial technology, or fintech, sector, has suffered this year due to a slowing economy and stricter financial regulation. In the peer to peer lending sector, hundreds of firms have shut down due to inability to comply with regulations or insolvency. So, what can we expect from this industry in the near future?

European Union

P2P Lender Bondora Reports Almost €8 Million in Originations for November (Crowdfund Insider), Rated: AAA

Peer to peer lending platform Bondora says loan originations almost hit €8 million during the month of November. This follows a record-breaking month of October

In November, Bondora issued €7,894,070 of new loans, just ahead of the record set for originations in the previous month of €7,802,163.

LendIt Fintech Europe 2018 Slide Presentations Now Live (LendIt.com), Rated: A

Thanks to everyone who joined us at LendIt Fintech Europe 2018. Below you will find all of the presentations from the event. You can also view the photos from LendIt Fintech Europe 2018.

Keynotes

  • Joel Perlman, OakNorth Holdings – The OakNorth Growth Story – from Startup to Profitable Unicorn
  • June Ou, Figure – Blockchain: Creating the Future of Financial Services
  • John Goodall, Landbay – Misconceptions of the UK Buy-to-Let Market Today

Get the full schedule here.

Spotcap increases credit lines to EUR 300M (Spotcap email), Rated: A

It’s been a busy and rewarding 12 months for us here at 

YouHodler – Top Crypto Lending Platform on the Market (NewsBTC), Rated: A

YouHodler is a crypto-backed loan service provider. This established blockchain platform allows users to acquire loans instantly, by leveraging their cryptocurrencies for EUR or USD.

The company offers the highest loan-to-value ratio in the entire industry – up to 80%. And, unlike its competitors, it accepts five of the top cryptocurrencies as collateral, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ripple. Short-term loans are available at a low interest rate of just 2.5%.

Alternative finance ‘becoming vital’ for SMEs in north (The Irish News), Rated: A

THE ability for small businesses in Northern Ireland to access alternative forms of finance has become a vital factor in their successful growth, the head of a Belfast accountancy firm insists.

Since the financial crash and credit crunch, the funding void left by traditional lenders has been filled by boutique funders and alternative finance, which can allow SMEs to access finance for a variety of different needs, from long term investment through to funding for short term working capital.

International

Klarna Joins Shopify Plus Partner Program To Power High-Growth Merchants (PR Newswire), Rated: AAA

Klarna announced today that they are among the first payment service providers to join the Shopify Plus Technology Partner Program, focusing on high-growth and high-volume merchants. This integration will allow merchants in Germany, the UK and the US to easily implement Klarna’s smoooth payment suite and offer a superior customer experience and thereby unlock additional growth potential.

Cred Opens Crypto Corporate Lending Platform To Developers (PYMNTS), Rated: A

In a press release on Tuesday (Dec. 11), Cred revealed the rollout of its developer platform CredX (not to be confused with the new credit card accounts payable solution recently launched by Finexio). The Crypto-Lending-as-a-Service (CLaaS) solution enables other crypto companies — including exchanges, crypto wallets or mining services — to integrate Cred’s lending functionality into their own solutions. Its set of application program interfaces (APIs) enable businesses to use crypto as collateral to access corporate financing products.

Australia

Payday loan applicants asked to hand over bank passwords, inquiry hears (The Guardian), Rated: AAA

A new parliamentary inquiry has begun scrutinising the behaviour of payday lenders, buy-now-pay-later firms, and credit repair agencies.

Vulnerable Australians are agreeing to share their internet banking passwords so payday lenders can see their transaction history before lending them money, an inquiry has heard.

Asia

400 Online Lending Sites, Fintech Platforms Being Shut Down (Tempo.co), Rated: AAA

Communication and Informatics (Kominfo) Minister Rudiantara said the ministry had shut down 400 financial technologies (fintech), consisted of sites and applications, related to fraud cases on online loan services that are recently rampant in Indonesia.

LBH Urged to Expose Identities of Violating Online Loan Services (Tempo.co), Rated: B

The Indonesian Fintech Joint Funding Association (AFPI) asked the Jakarta Legal Aid Institute (LBH) to open the identities of 25 peer to peer (P2P) lending organizers or registered online loan services that are said to have made violation.

South Korea is getting its first fintech unicorn (Business Insider), Rated: A

South Korean fintech Toss has raised an $80 million funding round led by US-based firms Kleiner Perkins and Ribbit Capital, with participation from Altos Ventures, Bessemer Venture Partners, PayPal, and Qualcomm Ventures, among others. This brings Toss’ valuation to $1.2 billion, making it the latest fintech unicorn globally, and Korea’s first.

Toss started out offering peer-to-peer (P2P) payments, but has since added other services —including insurance, investments, savings accounts, credit score management, and a financial dashboard that allows users to see all of their finances in one place — by partnering with third parties. Toss already has 10 million registered users, meaning it reaches around 20% of Korea’s population with its services.

Source: Business Insider

How these Amazon and Xiaomi alums are helping the unbanked with blockchain (Tech in Asia), Rated: A

“A lot of the traditional models are not applicable to onboard those people into financial systems,” says Sarah Zhang, co-founder of Singapore-based Points.

That’s where Points – also called PTS – picks up the slack. Founded last year, the blockchain-powered startup uses AI and big data to assess factors like an individual’s occupation, bill payments, and shopping activities to calculate a credit score.

Latin America

Brazilian Fintech Nubank Launches Debit Card To Reach 120M Clients (Forbes), Rated: AAA

Brazilian fintech Nubank has launched a debit function for its card offering as well as the ability to withdraw cash from ATMs, in a move that aims to extend its reach to as many as 120 million customers.

The startup created in 2013 and valued at over $4 billion 

Africa

Experian to acquire African credit info firm Compuscan for $ 263m (Fintech Futures), Rated: AAA

Experian is buying African credit information and analytics services firm Compuscan for ZAR 3.72 billion ($263 million) from markets investor Actis.

Authors:

George Popescu
Allen Taylor