Thursday February 14 2019, Weekly News Digest

OnDeck revenues

News Comments Today’s main news: SoFi invests in Apex Clearing. Zopa chairman steps down. Ratesetter ISA tops 17M GBP in first year. Assetz Capital surpasses 700M GBP in lending. Revolut denies getting Lithuanian bank license to influence politics. Today’s main analysis: OnDeck’s Q4 earnings review. Today’s thought-provoking articles: What’s happening with auto loans. How Amazon controls small businesses with lending. Banks […]

The post Thursday February 14 2019, Weekly News Digest appeared first on Lending Times.

OnDeck revenues

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United Kingdom

European Union

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News Summary

United States

SoFi held talks to acquire a fintech company backing some of the hottest robo advisors as it eyes expansion beyond its lending roots (Business Insider), Rated: AAA

OnDeck Q4 2018 Earnings Review (Lend Academy), Rated: AAA

The company achieved much of what they set to do in 2018 and posted another solid quarter as they rounded out the year. Q4 2018 net income came in at $14 million on gross revenues of $109.5 million. The company ended the year with a total of $27.7 million in net income. Below is a snapshot of their Q4 and 2018 full year highlights.

As of Q4 2018 the company still had $246 million of excess debt capacity.

BB&T and SunTrust merger; Tech in Bank Earnings (PeerIQ), Rated: AAA

The Fed’s January 2019 Senior Loan Officer Survey showed that banks tightened standards for commercial real estate (CRE) loans. Overall, banks tightened standards for credit card borrowers. However, lending standards for most categories of consumer loans and C&I loans remained unchanged. Banks also reported weaker demand for both business and household loans.

Source: Federal Reserve, PeerIQ

BB&T agreed to buy SunTrust for $28.2 Bn – the first major mega-bank deal in a decade. This deal will create the sixth-largest US retail bank. The M&A is supported by a constructive regulatory environment fostered by the OCC and CFPB, among others. The previous large acquisition was the JP Morgan acquisition of Bank One in 2004.

A major motivation for the deal was the ability of both banks to pool resources to build better digital offerings. SunTrust has a FinTech focused fund and has partnered with FinTech lenders to provide home improvement and small business loans. Banks are investing billions in digital tech spend to maintain relevance with customers that are increasingly eschewing bank branches for a seamless, online, full-service banking and wealth management customer experience.

Auto Loans in High Gear (Liberty Street Economics), Rated: AAA

Total household debt increased modestly, by $32 billion, in the fourth quarter of 2018, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Although household debt balances have been rising since mid-2013, their sluggish growth in the fourth quarter was mainly due to a flattening in the growth of mortgage balances. Auto loans, which have been climbing at a steady clip since 2011, increased by $9 billion, boosted by historically strong levels of newly originated loans. In fact, 2018 marked the highest level in the nineteen-year history of the loan origination data, with $584 billion in new auto loans and leases appearing on credit reports, up in nominal terms from 2017’s $569 billion. In this post, we take a closer look at the composition and performance of outstanding auto loan debt using the New York Fed’s Consumer Credit Panel (CCP), which is based on anonymized Equifax credit data and also the source for the Quarterly Report.

Amazon’s lending perpetuates the tech giant’s control over small businesses (Tearsheet), Rated: AAA

Amazon runs a marketplace with 2.5 million sellers, 24,000 of which had more than $1 million in sales on the platform in 2018. These sellers represent the potential customer base for the company’s lending model.

From this base of borrowers, Amazon has been able to reportedly lend over $1 billion in 2017, exceeding  $3 billion in total lending volume from its inception in 2011 to 2017. As for 2018, in its annual report, the company reported receivables outstanding from their lending program of $710 million, up from $692 million a year prior.

With access to detailed information and data on each seller, Amazon is able to mitigate lending risk substantially. Seller metrics only available to Amazon are utilized to determine a small business’s creditworthiness. Sales history, product offerings, customer service feedback, and shipping metrics enable Amazon’s lending business to have better insight into how to accurately issue loans. This allows Amazon to have an understanding of the health of each small business on its seller marketplace.

Goldman Sachs, Point72 and others invest $ 44 million in business credit startup Nav (Reuters), Rated: A

Nav, a startup that gives small businesses free access to their credit reports, said on Monday that it had raised $44 million from investors including Goldman Sachs Group Inc (GS.N), Point72 Ventures and Experian Ventures (EXPN.L).

Well Fargo Outage Points to Opportunity in Digital Banking (Lend Academy), Rated: A

Wells Fargo is still digging out from a PR disaster last week when the bank went offline for a large segment of customers due to a fire alarm triggered in a server facility in Minnesota. Customers could not access the mobile app, the website or ATMs. The incident has been used to highlight how big an opportunity there is for fintech firms or more nimble banks.

What the outage shows is that bank infrastructure is still stuck in the past, analysts rightly askedwhy Wells Fargo did not have the bank running on a cloud based system.

Digital bank Chime seemed to benefit from the news with more than 10,000 accounts being opened, a record 24 hour period for the startup.

new survey by Fraedom says 80 percent of banks believe challengers have impacted their business and 30 percent say they are their biggest threat.

Susan Ehrlich of Earnest (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is Susan Ehrlich, the CEO of Earnest. They are one of the largest student loan refinancers in the country and they also offer personal loans. Back in 2017 Earnest was acquired by the student loan servicer Navient which was itself spun out from Sallie Mae in 2014.

Government Shutdown Slows SBA Lending Volume, Approval Percentage Dipped Slightly in January (GlobeNewswire), Rated: A

Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals dropped a full percentage point from 49.9% in December 2018 to 48.9% in January.

Small business loan approval rates for big banks remained at a record high 27% in January 2019, according to the Biz2Credit Small Business Lending Index, which examines more than 1,000 small business credit applications made via its online lending platform.

Goldberg added that since reopening on January 28, her office has guaranteed more than 200 SBA loans worth $59.3 million.

Institutional lenders climbed up to 65.1 %, a jump of three-tenths of a percent from December’s mark of 64.8%.

Loan approval rates among alternative lenders rose from 56.6% in December to 57.3% in January, a jump of seven-tenths of a percent.

Citi rolls out new personal loan, online savings account (American Banker), Rated: A

Citigroup has launched a new consumer loan product and a new high-yielding savings-account as part of its rollout of its new digital bank.

The New York bank recently introduced Citi Flex Loan, which allows select existing Citi credit card customers to convert part of their credit lines to a loan with a fixed annual percentage rate, Mark Mason, Citigroup’s incoming chief financial officer, said Tuesday at an investor conference.

Square’s banking bid avoids backlash that doomed Walmart’s (American Banker), Rated: A

As Square seeks federal approval for a Utah industrial loan company, the fintech’s bid has so far avoided the kind of loud, public opposition that marred past ILC bids by higher-profile nonbanks.

Community banks still criticize the ILC charter as a banking loophole for non-financial firms, and the Independent Community Bankers of America opposes Square’s application.

Almost 60% of small business owners launch with less than $ 25,000 (CNBC), Rated: A

At least that’s according to entrepreneurs polled recently by Kabbage, a financial services and data platform serving small businesses. More than half of those polled, or 58 percent, started their businesses with less than $25,000. A third started with less than $5,000.

These numbers track with the latest data from the U.S. Census Bureau, which found that the median cost to start or acquire a company is about $25,000. It did find fewer businesses that begin with less than $25,000, only 46 percent, though that could be due to its inclusion of new owners who purchase existing operations as well owner starting from scratch.

LoanStreet Adds Commercial Lending Features for Financial Institutions (Crowdfund Insider), Rated: A

LoanStreet, an online platform that enables traditional finance like banks credit unions and other direct lenders to streamline the process of sharing, managing, and originating loans, has added new features. The SaaS platform now offers commercial loan origination and administration solution for any size financial institution, loan or deal volume.

LoanStreet’s new lending features include:

  • Built-in collaboration tools offering the flexibility to originate the loan best suited to your borrowers’ needs without sacrificing the ability to invite other financial institutions into the deal.
  • Single access point allowing all parties, including borrowers, lenders, attorneys and auditors, continuous and secure access to the same information.
  • Integrated platform from origination to maturity avoids re-keying, duplication of efforts and eliminates transfer errors and other critical information loss that occurs over time.
  • Efficient process management enabling online, borrower self-service of key administrative tasks — including online payment acceptance — while improving internal controls and information flow.
  • Automated reporting facilitating completion of all applicable regulatory and financial entries for you and every investor.

Velocity Investments sues woman for breach of contract, seeks ,500 in damages (Louisiana Record), Rated: A

Velocity Investments LLC, assignee of Lending Club Corporation, filed a complaint against Heather Darling on Feb. 12 in the 24th Judicial District Court. According to the lawsuit, the plaintiff states that the defendant has failed to pay off the balance of $22,495.23 plus interest on a contract between the parties. The defendant is accused of sums due on an open account and breach of contract.

Online Loan Companies Are No Easy Fix for Desperate Borrowers (Real Daily), Rated: A

Lending Club is currently the largest online lender in the world. By some estimates, Lending Club, which launched in 2007, facilitated anywhere between $35 billion and $55 billion in online loans in 2018.

Now as more financial institutions are beginning to extend loans, Americans are falling even deeper into debt again. Americans, as individuals and households, owed over $13 trillion dollars, collectively, in 2018.

Best News We’ve Heard All Day: More Single Women Own Homes Than Single Men (Pure Wow), Rated: A

Online loan marketplace LendingTree reports that on average, single women own around 22 percent of homes, while single men own less than 13 percent. The study states that the gender gap in housing across the country is particularly interesting “given the average woman in the U.S. only makes 80 percent of what the average man does.” Interesting, indeed. (We can think of another word for it.)

Thoma Bravo Is Buying Digital-Focused Mortgage Company (WSJ), Rated: A

Thoma Bravo LLC has agreed to buy mortgage software firm Ellie Mae Inc. for $3.7 billion, the latest indication that challenges in the home-lending market are spurring consolidation across the industry.

The transaction will give the private-equity firm control of a company whose technology has been used to help automate the closing of millions of home loans. Based in Pleasanton, Calif., Ellie Mae handles the technology that underpins the entire home-loan origination process, and its services are used in

INSIKT Changes Name to Aura (Business Wire), Rated: B

INSIKT, a mission-driven financial technology company that offers affordable loans to hard-working families, today announced that it has changed its name to Aura to expand its focus on creating greater financial health, independence and economic stability for millions in America.

Roostify Expands Advisory Board with Investment Virtuoso (Roostify), Rated: B

Roostify, the San Francisco-based digital lending platform provider, announced today the addition of financial services consultant Marshall Lux to its advisory board. Lux, a distinguished consultant, advisor and educator, brings more than 30 years’ experience in private equity to the rapidly expanding business and reflects Roostify’s commitment to perfecting a scalable operational model and further developing an ecosystem of technology partners and strategic alliances.

LendIt Fintech USA 2019 (LendIt), Rated: B

April 8-9
Moscone West
San Francisco

HIGHLIGHTED KEYNOTES

Sallie Krawcheck
CEO & Co-Founder
Ellevest

Rob Frohwein
CEO & Co-Founder
Kabbage

Steven Streit
CEO
Green Dot

Mike Cagney
Co-Founder
Figure

United Kingdom

Zopa chairman Giles Andrew to step down after 15 years (Independent), Rated: AAA

Zopa’s co-founder Giles Andrew is to step down as chairman after 15 years at Britain’s oldest peer-to-peer lender.

Zopa appoints Virgin veteran McCallum as chairman (Finextra), Rated: A

P2P lender Zopa has appointed former Virgin Management CEO Gordon McCallum as chairman as it gears up for the forthcoming launch of its new banking venture.

Ratesetter ISA tops £175m in first year (AltFi), Rated: AAA

The peer-to-peer lending platform said its ISA accounts for one-fifth of its £830m of funds under management.

Peer-to-peer lending platform Ratesetter said it has been “blown away” by the popularity of its first ISA product, which has hit £175m of subscriptions a year after launch.

Assetz Capital surpasses £700m lending mark (Bridging and Commercial), Rated: AAA

Assetz Capital has now lent over £700m to SMEs and property developers since launching in 2013.

The P2P lending platform has enjoyed significant progression, providing over £200m of funding in the eight months since it surpassed the £500m lending milestone in June 2018.

Former Assetz Capital founder launches fintech consultancy (AltFi), Rated: A

The co-founder of one of Europe’s largest peer-to-peer lenders has launched a fintech consultancy to help young firms “avoid some of the mistakes made by the early incumbents of the industry”.

Former Assetz Capital chief credit officer Andrew Holgate will lead a team of City veterans at consultancy Equitivo, which will help growing fintech firms raise cash, focus on strategy, trim operations and boost performance.

‘There is no magic bullet, people will get P2P over time’ (FT Adviser), Rated: A

The chief operating officer of peer-to-peer platform Relendex, Max Lehrain, has concerns about the Financial Conduct Authority’s crack down on P2P lenders and crowdfunding platforms.

UK challenger bank Starling secures £75m for European expansion (Fintech Futures), Rated: A

Life is sweet for UK challenger bank Starling as it has raised £75 million in funding for its expansion plans in Europe.

It got £60 million in a Series C round led by Merian Global Investors, including the Merian Chrysalis Investment Company.

Monzo Launches First 100 Business Accounts (Crowdfund Insider), Rated: A

UK challenger bank Monzo announced on Monday the launch of its first 100 business accounts. This news comes just a few months after Monzo revealed it was considered business banking, with Founder and CEO, Tom Blomfield, stating 2019 plans included business accounts. Speaking about the new accounts, Monzo reported:

Main Street banks say fintechs like Monzo, N26 and Chime pose the biggest disruptive threat to their businesses (Business Insider), Rated: A

Main Street banks believe upstarts like Monzo, N26 and Chime, known as challenger banks, pose a significant threat to their business, according to a recent survey.

Fraedom, a credit card specialist who works with companies like Visa, SunTrust, and Bank of Montreal, surveyed bankers on what some of the biggest impacts to their business will be in 2019. The vast majority (80%) believe challenger banks have an increased impact to their business, and 30% pegged the new competitors as the biggest disruptive threat to their business in 2019.

Tandem Bank boss calls for rate cut to kick-start UK economy (AltFi), Rated: A

Ricky Knox, chief executive of app-only lender Tandem Bank called on the central bank to cut rates to kick-start growth, as currently savers are locking away cash in specialist higher interest accounts.

Peer-to-Peer Lending and Brexit (4th Way email), Rated: A

Shares plunged and the pound plummeted to a 31-year low when the UK voted to leave the EU. More recently chaotic Brexit negotiations indicate a disorderly exit that could see investors avoid traditional investments in the UK, but what does this mean for peer-for-peer lending and should lenders be worried?

Bank and P2P lending is far less volatile than equity investing, because:

  • It is short-term orientated.
  • Lenders easily diversify widely across thousands of investments – loans – as opposed to a typical stock investor who diversifies across hundreds of shares through share funds.
  • In P2P lending, buy/sell price swings, often fuelled by uncertainty, are usually irrelevant, since lenders hold loans for the full term.
  • Lenders are usually in a better place in the queue compared to equity investors when recovering losses is involved, which can mean smaller losses on individual investments (loans) that go wrong.
  • With lending being data driven, recession conditions are easier to plan for. A turbulent P2P Brexit would mean a tripling of defaulting loans in some kinds of lending and cut-price sales of borrowers’ assets. Interest rates and reserve funds are prepped for most disasters, leaving a very low chance of a sizeable overall loss on a well-diversified, low-risk lending portfolio.

Most investors in peer-to-peer lending are using platforms that are run by people with relevant banking experience. The banks, when we look at their bread-and-butter lending, have found it easy to maintain net profits even during multiple downturns over the past 20 years, which includes the Great Recession. This is across the spectrum of lending, from buy-to-let mortgages to personal loans and credit cards. Perhaps surprisingly, retail and small business lending combined was still profitable for the UK’s high street banks during the 2008 and 2009 crash.

Learn more about 4th Way here.

Mojo Mortgages secures £7million to revolutionise the UK mortgage experience (Manchester Digital), Rated: A

Mojo Mortgages, a fintech start up based in the North West has secured £7million in Series A funding to transform the mortgage experience.

Mortgage Brain boosts user numbers (Mortgage Introducer), Rated: A

Mortgage Brain welcomed over 2,000 new customers during 2018 with a host of national networks, corporate firms and individual adviser firms choosing to use one or more of its products and services.

A number of new customers – including Censeo, Intelligence Mortgage Solutions, Your Expert Group, Affinity Mortgages and Your Mortgage Solutions – as well as a number of contract renewals and user license increases, have all contributed to Mortgage Brain’s growth throughout 2018.

UK inflation below official target for first time in 2 years (Miami Herald), Rated: A

Lower energy costs as well as a waning impact from the pound’s sharp fall in the aftermath of the country’s Brexit vote have helped consumer price inflation in Britain fall below the Bank of England’s target of 2 percent for the first time in two years.

The Office for National Statistics said Wednesday that consumer prices rose by 1.8 percent in the year to January, down from the 2.1 percent recorded in the previous month. Inflation has been consistently falling since August as the effects of the pound’s decline drop out of annual comparisons. The latest decline was further accentuated by a fall in the price of electricity, gas and other fuels.

Inflation is now at its lowest since January 2017, when inflation was also 1.8 percent.

Arbuthnot Commercial ABL delivers £12m refinancing facility (Bridging Loan Directory), Rated: B

Arbuthnot Commercial Asset Based Lending Ltd. is delighted to announce it has completed a £12m refinancing for L&C Limited, trading under Red 7 Marine (“R7M”), provider of nearshore access solutions to the UK marine construction and maintenance industry, and an investee company of Perwyn Private Equity (“Perwyn”).

European Union

UK fintech unicorn Revolut forced to deny links to Russia (Business Insider), Rated: AAA

Unicorn challenger bank Revolut has strongly denied claims that its activities in securing a banking license in Lithuania are attempts to interfere in the country’s politics.

Revolut was granted a European Banking License in Lithuania in December but has since faced claims of interfering in the country’s political processes by Lithuanian Member of Parliament Stasys Jakeliūnas, chair of the Lithuanian parliament’s budget and finance committee.

German Lending Marketplace auxmoney Overtakes Midsize Banks in Consumer Loan Origination (Crowdfund Insider), Rated: AAA

Düsseldorf-based Fintech auxmoney has surpassed its targets in 2018. Loan volume increased by 74 percent compared to 2017. Raffael Johnen, Founder and CEO of auxmoney, commented:

“While the major German banks are in crisis mode, the leading German fintechs are always setting new records. With our continuously strong growth, we managed to be the first credit marketplace to catch up with medium-sized banks in Germany.”

It issued new loans totaling €551 million last year.

Auxmoney Now Stands for 0.5% of the Market of German Consumer Loans (P2P-Banking), Rated: A

German p2p lending marketplace Auxmoney announced that it has facilitated 551M EUR in consumer loans in the year 2018. Up 74% compared to 2017. Approximately 73,000 loans were financed. That would mean Auxmoney now stands for a market share of roughly 0.5% of the market.

Gymshark teams up with Klarna to announce pay later service (RLI), Rated: B

Fitness wear brand Gymshark has announced the launch of a pay later service in the UK, Sweden, Norway, Finland and Denmark. The company is now in a partnership with Klarna, a payments provider which will offer Gymshark the new payment option. The payment service will allow online shoppers to try on items at home before paying for the order.

Instantor releases report on how machine learning is revolutionising credit risk management in Europe (Fintech Finance), Rated: B

Instantor, the 3rd. fastest growing Swedish FinTech who makes tough calls easy within credit risk management presents “Credit Risk Management 2019 – How Do You Stack Up?”, a report based on a survey conducted by Instantor across Europe among top executives within leading financial organisations. The report reveals that two-thirds of these players are well underway to implementing machine learning (ML) and the majority benefits from its implementation within credit risk management.

International

30 Under 30 Europe: The Young Money Merchants Shaping Financial Markets In 2019 (Forbes), Rated: AAA

Finance is hardly known for its youthfulness, yet this year’s Finance 30 Under 30s are proving that an old industry can learn new tricks. These young venture capitalists, fintech entrepreneurs, crypto enthusiasts and Millennial bankers, with an average age of just 27, are reshaping the sector and transforming our relationship with money.

The Next Global Financial Meltdown Is Just Around the Corner (Equities.com), Rated: AAA

As Bloomberg reported last year:

Shadow banking in China has ballooned into a $10 trillion ecosystem which connects thousands of financial institutions with companies, local governments and hundreds of millions of households. The practice is now at the center of a Chinese government-led regulatory crackdown aimed at defusing financial risks that threaten the wider economy. Unlike in the U.S., traditional commercial banks drive shadow banking, or unregulated lending, in China. That’s because the banks have been able to keep shadow-banking assets off their balance sheets, thereby sidestepping regulatory constraints on lending.

About 169 million Chinese, or about 12 per cent of the population, have invested in wealth management products online, a rise of 66 per cent from two years ago, according to a Moody’s report published this month. Essentially, they are putting money into the shadow banking system.

“The picture is different in the European Union. Here, the shadow sector now accounts for perhaps 30–40% of total financial intermediation. But it is growing. Between 2012 and 2016, shadow banking as broadly measured expanded by almost 40% in the eurozone.

Atlanta-based IDology to Be Acquired by GBG for $ 300m (PR Newswire), Rated: A

GBG, the UK-headquartered Identity Data Intelligence specialist, today announces that it has conditionally agreed to acquire the entire issued share capital of IDology, a US-based provider of identity verification and fraud prevention services, for $300m (£233m) in an all-cash transaction.

Nexo lending to offer crypto-backed loans with Blockport exchange (Bankless Times), Rated: B

Blockport users will be able to use the Nexo platform to get crypto loans, offering them another alternative to selling their cryptocurrencies for fiat currencies. Instead of selling they cryptocurrency assets, Blockport users can now keep their crypto, with all potential upsides, and leverage them to get instant access to cash.

Australia

Next Growth Wave: Fintech (Seeking Alpha), Rated: AAA

In this article we look at some fintech companies, beyond investor’s normal horizon of the United States. In Australia there is a small cluster of listed fintech companies that have started to explode. Some have made gains of 400% in a year and more than 1,000% on the back of strong revenue and turnover growth. Moreover because Australian companies lack access to large scale V.C. investments, technology companies often need to capital raise through a public listing.

Zip Co. (ASX: Z1P)

Zip Co. is quite similar to Afterpay and in some ways its closest competitor with an established market position. However in addition to payment splitting, it also offers interest based loans and is different in other ways.

  • Zip Co. is smaller with a market capitalization of $380 M AUD (about $266 M USD), but still has 12,600 retail partners including most of Australia’s largest retailers, however it hasn’t yet entered the U.S. or the U.K.
  • Zip Co. has Zip Pay, which provides a payment splitting application with no interest, but with more flexibility in length of time or repayment amount than Afterpay’s solution.
  • Zip Co. also has Zip Money also provides loans for purchases above $1,000 AUD, with a 3 month interest free period, but with an establishment fee of up to $99.
  • Source: Seeking Alpha

Labor’s negative gearing policies could hurt first-home buyers (Your Mortgage), Rated: A

“Despite Australia’s tight regulations on foreign investment, other overseas property markets are tighter – including China, Canada and New Zealand,” Driscoll said. “Unlike in Australia, the Chinese lack many appealing alternative investments at home and, due to government crackdowns on peer-to-peer lending, private equity funds and with the majority of their property being leasehold, many investors are forced to look elsewhere.”

India

India’s fintech future looks bright, but it needs to find its raison d’être (India Times), Rated: AAA

Yet there is more room for growth. The market in India is still small; far more deals are being done in China, and for far higher valuations. Last year alone, venture capital investments into Chinese fintechs were more than 10 times larger than those in India, with 75 percent more deals.

Although the value of investments in India declined by 21 percent in 2018 over the previous year, the number of deals actually rose 12 percent, making 2018 the most active year on record for fintech financing.

RBI may change Rs 10 lakh lending cap on P2P platforms, say P2P players (India Times), Rated: A

Peer to Peer or P2P players are hopeful that the comprehensive financial data sought by the Reserve Bank of India might help the regulator to take some major policy decisions concerning the industry.

Asia

Hundreds of unlicensed P2P lenders still operating in Indonesia (The Jakarta Post), Rated: AAA

The Financial Services Authority (OJK) has found that 231 illegal peer-to-peer lending (P2P) providers, including those from other countries, have been operating in the country since January.

An Overview on Peer-To-Peer Lending in Indonesia (Legal Business Online), Rated: A

Two years following the enactment of Financial Service Authority (Otoritas Jasa Keuangan/”OJK) Regulation No. 77/POJK.01/2016 of 2016 (POJK 77/2016), Peer-to-Peer Lending (P2P Lending) has grown popular in Indonesia. Based on data from OJK per Oct. 2018, a total of 15,990,143,141,355 rupiah has been distributed to the borrowers in P2P Lending. It has grown 432.5% from Jan. 2018 until Oct. 2018. Until Dec. 2018, the number of P2P Lending Platform which has been registered and supervised by OJK has reached 88 companies, one of them has been given a license.

Canada

Finastra announces Siobhan Byron as new Head of Technology Enabled Managed Services (Finastra), Rated: A

Finastra has appointed Siobhan Byron as Senior Vice President and Head of Technology Enabled Managed Services (TEMS). In this role, she oversees planning and execution, sales and marketing, research and development and product management across four lines of business including Checks, Enhanced Services, Student Lending and Canadian Mortgage Technology, all in the Canadian market. She oversees more than 1,300 employees that make up Finastra’s TEMS business.

Authors:

George Popescu
Allen Taylor

The post Thursday February 14 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 10 2019, Daily News Digest

Purchase APR

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

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

Purchase APR

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

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

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

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

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

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

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

Source: Federal Reserve, BEA, PeerIQ

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

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

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

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

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

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

Source: LendingTree

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

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

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

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

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

Kabbage Pricing Example

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

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

Fundbox

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

Source: Business Insider

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

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

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

European Union

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

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

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

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

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

International

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

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

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

Source: Nexo

Read the full report here.

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

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

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

Australia

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

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

India

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

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

Southeast Asia

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

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

Africa

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday January 10 2019, Daily News Digest

Purchase APR

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

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

Purchase APR

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

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

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

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

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

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

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

Source: Federal Reserve, BEA, PeerIQ

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

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

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

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

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

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

Source: LendingTree

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

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

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

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

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

Kabbage Pricing Example

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

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

Fundbox

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

Source: Business Insider

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

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

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

European Union

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

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

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

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

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

International

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

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

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

Source: Nexo

Read the full report here.

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

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

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

Australia

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

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

India

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

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

Southeast Asia

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

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

Africa

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

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

Authors:

George Popescu
Allen Taylor

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

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

How fintech gave this SBA lender an edge (American Banker) Rated: A

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

How fintech gave this SBA lender an edge (American Banker) Rated: A

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Thursday February 15 2018, Daily News Digest

Growth of asset-backed securities

News Comments Today’s main news: SmallBiz Loans top lender for SBA 7(A) loans under $350K. University of Huddersfield lens to over 2K small businesses through Funding Circle. Assetz Capital has over 2K IFISA investors, more than 10M GBP in ISAs. Mintos surpasses $500M in three years. Monzo approved to bank in Republic of Ireland. Today’s main analysis: The growth […]

Growth of asset-backed securities

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Canada

News Summary

United States

SmartBiz Loans Surpasses JP Morgan Chase as Number One Provider for SBA 7(a) Loans Under 0,000 (BusinessWire), Rated: AAA

SmartBiz Loans, the #1 SBA marketplace and bank-enabling technology platform, is pleased to announce it has outpaced a number of national banks, including JP Morgan Chase, to become the top facilitator of SBA 7(a) loans $350,000 and less for the 2017 calendar year. Previously, SmartBiz was number one excluding 7(a) Express loans. SmartBiz provides for SBA 7(a) loans through its network of eight partner banks that participate in the SmartBiz marketplace and license software from SmartBiz to automate their underwriting and origination of SBA loans referred from SmartBiz. The SmartBiz Loans SBA marketplace matches small business customers with the right partner bank to increase the likelihood of approval, while also making small business lending more efficient for banks.

Through its various SBA-preferred lending bank partners, SmartBiz facilitated $329 million in funded SBA 7(a) loans $350,000 and less for the 2017 calendar year, a 1.5x increase over calendar year 2016. The data used is based on SBA quarterly lending data for calendar year 2017 (data from October 2017 through December 2017 was released in January 2018). During calendar year 2017, JP Morgan Chase generated $322 million in SBA 7(a) loans $350,000 and less, ranking second on the list. In SBA FY 2016, SmartBiz became the first technology marketplace to claim the number one spot for SBA 7(a) loans $350,000 and less excluding 7(a) Express loans.

MARKETPLACE LENDING (Diamond Hill), Rated: AAA

According to the Securities Industry and Financial Markets Association (SIFMA), ABS is a $1.4 trillion market as of September 30, 2017 which has grown substantially since its emergence in the mid-1980s (see chart below). The size of the market peaked in 2007 leading up to the Financial Crisis and subsequently began a decline post-Crisis as issuance was greatly reduced and outstanding deals continue to pay down. Only more recently has the market begun to rebound as it expands beyond the traditional categories.

Source: Diamond Hill

One of the newer categories of securitization is marketplace lending, which originated with a British firm, Zopa, in 2005.

Source: Diamond Hill

The marketplace lending industry offers a significant yield advantage for a variety of reasons. First, some issuers opt not to pay a Nationally Recognized Statistical Rating Organization (NRSRO) such as S&P, Moody’s, or Fitch for an official rating, which can drive yields higher to compensate for the lack of official rating that some investors require. For managers willing to conduct internal research and apply their own internal rating methodology, the excess yield offered from these non-rated securities can be quite attractive. Additionally, a large percentage of marketplace lending deals are coming to the market issued under Rule 144a, which provides a mechanism for the sale of privately placed securities that do not have, and are not required to have, an SEC registration. These bonds traditionally come with a higher level of yield compensation since they are not permissible for some investors.

 

Are feds slow followers? (Banking Exchange), Rated: A

Can banks stay up with changing times if their regulators don’t?

In a recent survey, nearly eight out of ten bankers said they need new strategies, lines of business, or methods to remain competitive in a rapidly changing environment. That finding was reported in the first of three articles, of which this is the third, covering results from the Future Forces in Banking 2018 survey, conducted by CenterState Bank Correspondent Division, CS Consulting Group, and Banking Exchange.

Source: Future Forces in Banking 2018
Source: Future Forces in Banking 2018

LendingClub IRAs: What You Need to Know (LendingClub), Rated: AAA

Did you know that half of households age 55 and older have no retirement savings at all?

Q: What is the initial investment?

A: There is a required initial deposit of at least $1,000. Once an account is funded, there is a $25 minimum investment per Note.

5 money mistakes that can kill the love (CBS News), Rated: B

One place to start: your potential partner’s credit score. Americans with higher credit scores are 14 percent more likely to find love within the next year compared with singles who have scores 100 points lower, the Federal Reserve found in a 2015 study.

Perhaps more important for long-lasting love, couples with similar credit scores are more likely to stick together, the Fed found. That could reflect a shared outlook about financial management and obligations.

Having a lousy credit score. Men and women agree that a low credit score is a turnoff, according to Affirm. A majority of those with scores above 750 — considered to be a good score — take responsibility for paying bills, compared with only 37 percent of those in the subprime range.

Mobile-First Mortgage Solution StreamLoan Secures $ 2MM Seed Capital Round to Re-Imagine the Home Purchase Process (PR Newswire), Rated: A

StreamLoan, a tech innovator focused on bringing mortgage lenders into the mobile-first era, has secured a $2 Million seed capital round of funding to continue to drive change with its enterprise lending customers and partners.

Fannie taps Blend to expand Day 1 Certainty’s digital mortgage options (National Mortgage News), Rated: A

Fannie Mae is doing more to expand its list of Day 1 Certainty report suppliers, naming Blend as the first online point of sale system to supply asset validations.

More could follow. Point of sale system Roostify, for example, is on Fannie’s list of prospective report suppliers, and its approval as a supplier of asset verification reports is “coming soon.” Three other vendors — BankVOD, LendSnap and Quovo — have the same status. In addition, technology vendors FinLocker, Plaid and PointServ are working on asset validation pilots with Fannie.

 

Using a 401(k) loan for a home down payment (Bankrate), Rated: A

While the vast majority of Americans would like to own a home, nearly 70 percent of potential buyers feel that a down payment is the greatest obstacle to making that a dream a reality.

According to the Employee Benefits Research Institute, 53 percent of 401(k) plans include a loan provision that allows participants to borrow against their savings. With a 401(k) loan, you can borrow up to half of your account balance or $50,000, whichever value is smaller. So if you had a balance of $70,000 you could borrow up to $35,000; with a balance of $170,000, you could borrow up to $50,000.

‘Am I about to overdraft?’ Wells app predicts consumer behavior (American Banker), Rated: A

The bank’s new feature, which mines account information, will let mobile bank deposit customers take action with their accounts, such as transfer money from savings to checking if an overdraft fee seems likely. The bank said there are 50 different messages a customer can receive.

If someone wants to know where he’s standing before a negative outcome happens, the mobile app seems to be the best bet for easy access to the information.

House Backs Bill That Would Benefit Fintech Partnerships With Banks (WSJ), Rated: A

The House on Wednesday approved a bill that would make the resale of high-interest loans more attractive to third-party buyers such as debt collectors—and bolster fintech firms’ partnerships with banks.

The bill passed 245-171. Nearly all Republicans voted for the measure, while Democrats were divided.

The legislation would ensure that loans retain the original interest rate issued by a bank, even if they are sold to nonbanks, which unlike nationally chartered banks are bound by state interest-rate caps. The bill is a response to a 2015 ruling by the Second U.S. Circuit Court of Appeals that affects loans taken out by residents of New York, Vermont and Connecticut, the three states within the court’s jurisdiction. The Supreme Court had declined to review the case.

iCapital Network Named Top Fintech Firm by Forbes (Business Insider), Rated: B

iCapital Network, the financial technology platform democratizing alternative investments for high-net-worth individuals and their advisors, announced it has been selected as a top fintech firm in the 2018 Forbes Fintech 50 list.

Virginia Attorney General Announces Settlement with Online Lender (JD Supra), Rated: B

Under the terms of the settlement, the lender has agreed to pay back $359,811 in refunds to 1,161 Virginia consumers, and to forgive $2.3 million in outstanding interest charged to over 2,600 consumers.  The defendant also agreed to pay Virginia a $10,000 civil penalty and $20,000 for its costs of investigation and enforcement.  The settlement also permanently​ enjoins the online lender from misrepresenting its license status, interest rates, and fees.

United Kingdom

University of Huddersfield Lends to More Than 2,000 UK Small Businesses through Funding Circle Partnership (Crowdfund Insider), Rated: AAA

Could more banks team up with P2P platforms? (Specialist Banking), Rated: A

Portuguese bank Banco BNI Europa recently partnered with crowdfunding platform Fellow Finance to invest in the European SME loan market.

Last year, mobile banking platform Revolut teamed up with Lending Works to offer instant credit through P2P finance.

Government-backed British Business Bank has supported P2P finance since March 2014, when it announced a partnership with lender Funding Circle.

The alliance saw £40m of investment to support further lending to SMEs via the P2P platform.

In 2015, Zopa announced a partnership with Metro Bank, whereby the challenger bank could lend to UK consumers via the platform.

Frazer Fearnhead, CEO at the House Crowd, believed that as the P2P market matured, there would be more institutional and alternative lender partnerships.

Assetz Capital Reports Over 2,000 Investors Have Registered For An IFISA, More Than £10 million Invested in ISAs (Crowdfund Insider), Rated: AAA

UK-based online lending platform Assetz Capital announced on Wednesday that over 2,000 investors have registered for an Assetz Capital Innovative Finance ISA (IFISA) since its launch, surpassing the 2,000 accounts opened across the entire peer-to-peer (P2P) industry in the 2016/17 tax year. The online lender explained more than £10 million has already been invested in those Assetz Capital ISAs.

Open Banking: Opportunity or Dead on Arrival? (The Financial Brand), Rated: AAA

The consumer always decides: the potential of Open Banking will only be realized if it is understood and used by the consumer.

Security or scare-mongering?

It’s about security, various surveys say. In a post-Equifax data breech world, the thought of a third party accessing financial data simply won’t fly. Therefore, we need strong authentication to combat these concerns. All true – this will play valuable a role and help reassure the public that serious thought has gone into how new services will be delivered.

Communication of Benefits Needed

This reinforces that any new service created will need to provide a benefit not already received and will need to clearly communicate those benefits. Users will need to be incentivized and inspired to use these services.

Not Just in the UK: Open Banking Globally

While Open Banking is a UK phenomenon now, it is a concept that will spread globally. As in the UK, regulators will be playing catch-up, but have an important role of setting guardrails around data-sharing and helping with communication.

More fintech firms embrace Starling’s Marketplace (Fintech Futures), Rated: A

UK challenger Starling Bank’s in-app Marketplace has got more love and attention with a brace of new partners.

The new group of partners includes the digital pension provider PensionBee, digital investing service Wealthsimple, mortgage broker Habito and Kasko travel insurance in partnership with AXA.

The moment of truth for marketplace lending (Deloitte), Rated: A

Marketplace lenders (MPLs) have emerged in a unique environment of depressed interest rates.

In fact, well into the second decade of marketplace lending, the price advantage of MPLs is highly debatable.

As interest rates rise, we might find that MPLs true advantage over incumbents lies not in price, but in user experience, and their ability to serve previously unserved parts of the market.

Rising interest rates could begin to place more strain on loan books, and so it’s time for MPLs to start thinking hard about loan book management. One route could be to use supply chain partnerships to become more sophisticated at managing a scaled loan book.

Another fintech sector could be succumbing to profitability struggles (Business Insider), Rated: A

Despite the level of innovation in fintech, startups in many sectors of the industry — from digital wealth management to alt lending — have been discovering that finding the right business model to attain profitability is a major, and for some insurmountable, challenge.

Now, this hurdle seems to have struck a relatively nascent, and to all appearances, booming sector — mortgage tech — as news this week showed. Burrow, a UK-based mortgage tech startup, told TechCrunch that it’s pivoting from a B2C to a B2B model in the face of high customer acquisition costs.

Source: Business Insider

How to safeguard your money from inflation (The Telegraph), Rated: B

The Consumer Prices Index (CPI) measure of inflation fell from 3.1% in November to 3.0% in December but remains well above the government’s 2% target. According to research by financial website Moneyfacts.co.uk CPI averaged out at 2.74% in 2017, which means it was three times as high as the average cash individual savings account (ISA) rate of 0.93%. Despite the fact that real returns on cash ISAs are negative, more than £270 billion was languishing in these accounts at the end of last tax year.  This lack of return on traditional savings has resulted in many individuals seeking out professional financial advice by attending wealth seminars, to stay fully informed on all available ways to manage their money and make beneficial financial decisions.

The average stocks and shares ISA returned growth of 11.75% in 2017, according to Lipper data, more than 10 times the return provided by the average cash ISA.

China

‘Self-inspection’ campaign looms for China’s online lenders (Financial Times), Rated: AAA

Among the data not displayed, however, is the amount the group is borrowing on China’s Rmb1.53tn asset-backed securities market, where it is the largest borrower, accounting for 13.7 per cent of the total, according to UBS data.

Only 40 per cent of 1bn Chinese adults have a credit history with a traditional financial institution, says Jason Bedford, an analyst at UBS in Hong Kong. At the end of October, peer-to-peer lenders accounted for Rmb 1.2tn in outstanding loans, up from almost zero in 2014, he adds.

Despite Rapid Growth, Hexindai Fails to Thrill Investors (Capital Watch), Rated: A

With headquarters in Beijing, Hexindai (Nasdaq: HX) said its revenue grew to $43.3 million during the third fiscal quarter ended Dec. 31, representing an increase of 576 percent from the third quarter a year earlier. Net income was $26.9 million, or 52 cents per American depositary share, from $929,762, or 4 cents per share, in the year-ago period.

The company’s total loan volume that it facilitated rose 187 percent to $388.7 million and the number of borrowers reached 32,417, an increase of 285 percent compared with the year before, the company said. In addition, the gross billing ratio of unsecured loans, which made up for 100 percent of loans in the period, rose to 12.1 percent from 7.4 percent a year earlier.

Looking ahead, Hexindai said it expected to report total loans facilitated between $1.22 billion and $1.24 billion for its fiscal year ended March 31. Net revenue was expected come in between $107 million and $109 million, with adjusted net income ranging from $62 million to $64 million, the company said.

Source: Capital Watch
European Union

Mintos Online Lending Marketplace Surpasses $ 500 Million in Just Three Years (Crowdfund Insider), Rated: AAA

Mintos, an online marketplace that provides individuals with a simplified way to invest in loans originated by a variety of alternative lending companies around the world, has announced a new milestone having topped the half a billion euro mark in cumulative investments by investors.

Mintos is the leading player in the peer-to-peer lending market in continental Europe with 39% of market share. About € 45 million is funded every month.

Monzo given go-ahead to ‘passport’ banking licence to Republic of Ireland (TechCrunch), Rated: AAA

Monzo, one of a number of “challenger” banks in the U.K. aiming to re-invent the current account, has announced the first step in its plans for international expansion with news that it has regulatory approval to operate in the Republic of Ireland.

Fintech Won’t Keep the Loan Sharks from the Door (Bloomberg Gadfly), Rated: A

“There can’t be all this smoke without some fire,” lawmaker Andrew Tyrie complained at a 2014 hearing into whether Royal Bank of Scotland Group Plc mistreated 5,900 business customers. For incendiary material, how about a leaked internal memo suggesting clients should be given enough rope to “hang themselves?”

International

Terrified Of Bitcoin, Banks Forced To Innovate For The First Time In 40+ Years (ValueWalk), Rated: AAA

Yesterday morning, several banks in Australia started rolling out a new payment system they’re calling NPP, or “New Payments Platform.”

And rather than funds transfers being restricted to the banks’ normal business hours, payments via NPP can be scheduled and sent 24/7.

You can also send money via NPP to mobile phones and email addresses. So it’s a pretty robust system.

Starting late last year, though, US banks very slowly began to roll out something called the Real-time Payment system (RTP), which is similar to what Australian banks launched yesterday.

And beyond the US and Australia, there are other examples of banking systems around the world joining the 21st century and making major leaps forward in their payment system technologies.

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Top Innovators in Digital Banking (LendIt), Rated: A

Thank you for downloading The Top 19 Innovators in Digital Banking e-book. You can view your copy here.

Why Investors Shouldn’t Miss Genie ICO (Global Coin Report), Rated: A

According to the second largest professional services firm PwC, citing Morgan Stanley, there are currently more than 200 lenders in the US that provide their services online. The volume of this marketplace at the global level is expected to reach $290 billion by 2021, with Asia being an emerging market. It means that people want alternative lending channels besides traditional banks.

Australia/New Zealand

Cryptocurrency education not regulation the way to go (scoop), Rated: A

CEO of New Zealand’s largest peer-to-peer mortgage lender Southern Cross Partners, Luke Jackson, says that despite what some governments and regulatory bodies may say or do, cryptocurrencies are a technological marvel which, like peer-to-peer lending, is providing a fintech alternative to bank dominance and trying to resist it is probably futile.

India

 

Spice Mobility’s devices business losses increase 53.8% to Rs 10 crore in Q3FY18 (Medianama), Rated: A

Last month, Spice Digital, a subsidiary of Spice Mobility, invested Rs 25 crore in peer-to-peer (P2P) lending company AnyTimeLoan, which provides unsecured personal loans, K12 education loans (for primary & secondary school tuition fees), and MSME business loans.

Note that currently, Spice Mobility holds a wallet license, a license to set up as an operating unit under the Bharat Bill Payment System, license to operate as a GST Suvidha Provider, and Aadhaar Enabled Payment System (AEPS) provider. Given that Spice Mobility’s services revenue has been on a steady decline, it will interesting to keep a watch on how the company decides to proceed from here on.

P2P Platform IndiaMoneyMart Empowers Borrowers to Pay Off High (BW Business World), Rated: A

Unpaid credit card dues are one of the costliest loans an individual can take and if one doesn’t have the ability to clear these dues, the hefty interest rates charged accumulate, putting stress on the ability to pay back and also affects the borrowers’ credit card score. So, what does one do when they do not have a great credit score of 750 or more but are in need of an unsecured loan? What’s the best offer they can opt for to secure themselves? Is there a way they can come out of this debt trap?

To help manage the financial crisis, P2P lending platform allows the prospective borrower to list their loan requirement to its lenders. They offer collateral free personal loans up to INR 10 Lakh for a period of 3 years or less at affordable interest rates. Unlike credit cards, which charge exorbitant interest rates of up to 50% annually, the loans at such digital P2P platforms are quite affordable and empower the borrowers to avail loans at interest rates of their choice.

Recent recognition of P2P lending platforms as NBFC-P2P by RBI’s regulation has further instilled the confidence in the lending community to disburse loans and receive fixed monthly returns to earn 20-25% or more annually.

Asia

Thailand’s First ICO … But The Next Will Have To Wait (ICO Examiner), Rated: AAA

Cryptocurrency enthusiasts in Thailand have mixed feelings today as their first homegrown initial coin offering, JFin coin, is enjoying a successful pre-sale but, at the same time regulators, have put the brakes on any further ICOs.

While JFin have already achieved over 80% of hard cap in pre-sale, which was originally due to last until the end of the month, the central bank of Thailand has now requested all financial organisations to cease facilitating cryptocurrency transactions.

JFin is a decentralised peer to peer lending system and comes under the umbrella of companies run by Jay Mart PCL who are listed on Thailand’s Stock Exchange.

Canada

Inside Paytm’s international expansion plans (Tearsheet), Rated: AAA

The startup, whose peer-to-peer and consumer-to-business mobile payments app currently boasts 300 million customers in India, aims to onboard millions more around the world. As a first step, it’s using Canada as a testing ground.

The startup, whose peer-to-peer and consumer-to-business mobile payments app currently boasts 300 million customers in India, aims to onboard millions more around the world. As a first step, it’s using Canada as a testing ground. The startup, which has had a Toronto-based tech team for three years, has been getting to know its Canadian demographic for the past year. Now, it’s zeroing in on digital utility payments.

To rectify this, Paytm has signed on thousands of Canadian bill payers, and it incentivizes customers with cashback offers of up to 3 percent. In addition, Sharma said he hopes to bring on board consumers who don’t make digital bill payments — which he said is as much as 30 percent of Canadian consumers. Paytm currently has 100,000 Canadian customers, according to the company.

Blockchain and Cryptocurrency Feature at Fintech and Funding Conference (Investor Ideas), Rated: B

The National Crowdfunding & Fintech Association of Canada announces Canada’s leading financial technology and funding conference, FFCON18. The conference will be held March 5-6, 2018 at the Design Exchange in Toronto.

Authors:

George Popescu
Allen Taylor

Merchant Cash Accounts With a Personal Touch

merchant cash accounts

Credit Cards NJ CEO Jennifer Glass recounts how she was “paralyzed by fear” with the process of trying to set up a merchant account for herself. Having consulted so many businesses to do so, she couldn’t make a decision. When a friend told her to “pull the trigger and pick one,” she did bringing about […]

merchant cash accounts

Credit Cards NJ CEO Jennifer Glass recounts how she was “paralyzed by fear” with the process of trying to set up a merchant account for herself. Having consulted so many businesses to do so, she couldn’t make a decision. When a friend told her to “pull the trigger and pick one,” she did bringing about what she says was “one of the worst experiences I’ve ever had.”

Fifteen years later, she serves as CEO of a company designed in part to help people avoid those bad experiences.

In 2003, she accepted a vice president position in marketing. After serving two years in that capacity, she founded Credit Cards NJ, a payments processing and marketing company. She has steered that ship for over 12 now. On a good month, the company sees as much as $3 to $4 million dollars go across its books.

The Philosophy of Credit Cards NJ

If the playing field is going to be leveled with the giants who supply credit cards and other ways of getting credit, modestly sized companies like Credit Cards NJ need a strong philosophy to succeed and grow.

“Most business people are not aware of the potential profits that await them,” Glass said adding that she doesn’t let her sales reps out into the field until they understand the industry at least half as well as she does. They have to prove themselves with proposals. That’s important, she said, knowing the kind of trust that’s on the line.

This trust is necessary for a business that applies what Glass refers to as a cradle-to-grave approach. “Our clients are more than numbers. We’ve been there for clients at weddings and funerals, and when they have their babies,” Glass said. “That’s the kind of relationship we form.”

CCNJ and its Place in the Industry

Relying on mentors and industry veterans, as well as the network she brings her customers into, the company serves hundreds of clients from every business type. Among their customers are companies from the medical, legal, non-profit, and e-commerce fields. They also do business with dry cleaners, restaurants, florists, chocolate shops, gift shops, and car dealers. They even work with escort services.

Glass attributes this wide reach in part to CCNJ’s drive to make it as easy as possible for companies to make their businesses grow. If a business needs working capital, CCNJ has cash advances to work against credit card receivables.

Using ACH, Glass said, “We’ll put money in a bank account for the client, which they can access as needed, but which won’t be based on credit card receivables.” The company can also offer a merchant cash advance or a business cash advance to fund working capital.

The company relies on relationships with SBA lenders to help most businesses. Whether a micro-loan of under $25k is needed or a more typical SBA loan, CCNJ can put its clients in touch with the organizations that can make that happen.

Unlike GE Care Credit, which begins charging interest on day one if a payment is missed, CCNJ’s customers can’t miss a payment because the business gets the money up front, or in installments.

Compared to other merchant cash companies, CCNJ offers a greater breadth of solutions. “The way we look at it, if we can help the client get inventory and working capital right now, we can help them get more people in the door to pay off a cash advance and put revenue on the bottom line more quickly,” Glass said.

The approach seems to be working. When the industry standard churn rate averages 20-27 percent, CCNJ’s mark of less than 3 percent has to proof that the company’s approach is working. One key reason for the company’s ability to retain clients is its focus on where it grows or doesn’t grow in terms of processing volume through monthly trends. For that, Glass attributes her ability to see market trends, even before the government says they will be happening, to working across so many industries. This allows her to see how the portfolio is doing across the board, which tells her what to focus on at a specific time.

The total package gives the CEO the confidence to say, “We’re able to have a solution for 98% of legal industries in the U.S., Canada, Israel, and the UK.”

The company’s pricing varies per program. Merchant cash accounts are purely commission-based while marketing solutions depend on the specifics of the program. Other programs are easier to control. Text messaging is a flat rate based on keywords and subscribers in the database, and web development usually costs a 20% margin before the company hands it off to a developer.

CCNJ Going Forward and the Future of the Industry

The CEO said the prospects for the industry to grow in the next few years are good, as MCAs and ACHs continue to interest small businesses that don’t qualify for a bank loan. She does, however, see regulations coming at some point, reasoning that, like banks, once you get too big or start charging what is perceived as too much, someone is going to start saying “no.”

Glass said that CCNJ’s main goal right now is to grow more ideal clients in order to have pilot programs to see how things are going. “My goal is to show my clients the value we offer them. Our solutions and breadth of knowledge in the industry is one of the big things.” If businesses aren’t taking Level 2 credit card data, they could be leaving as much as a half a percent on the table. CCNJ’s solutions can help clients get that and more.

Announcing CCNJA

To the end of doing whatever it takes to help clients grow, CCNJ has announced the spin-off, CCNJA Marketing.

“Businesses now need an entire marketing campaign, and we place high value on those solutions,” Glass said.

Among the marketing tools at the firm’s disposal will be e-mail blasts, LinkedIn optimization, website development, and other social media tools.

Conclusion

Credit Cards NJ is a company based on the central principles of good business, no stone left unturned, and friendly personal service. They are there for just about any small business owner who needs a payments processing and/or marketing firm, especially those who like the more personal touch and finding a firm they can form a life-long bond with.

Glass does a presentation at the Small Business Development Center every month in Bergen County, NJ. She has been doing these for about two years at the request of the center’s regional director. The presentation covers how to use payments processing to grow a business. She also has a number of informational videos on YouTube.

Authors:

George Popescu
Allen Taylor

8 Key Reasons Small Businesses Are Denied Loans

life insurance sba loans

There’s no doubt about it: growing a small business is no small challenge. No matter how amazing your idea or product, you’re bound to encounter some serious mountains. According to a TD bank 2017 Business Survey, some of the key challenges that small US-based businesses face today are rising interest rates and rising healthcare costs, both […]

life insurance sba loans

There’s no doubt about it: growing a small business is no small challenge. No matter how amazing your idea or product, you’re bound to encounter some serious mountains.

According to a TD bank 2017 Business Survey, some of the key challenges that small US-based businesses face today are rising interest rates and rising healthcare costs, both of which can be at least partly attributed to uncertainty surrounding the state of political leadership.

And these days, more and more small businesses like startups are turning to credit cards and other forms of financing over bank loans than ever before. This is partly because some one in four businesses applying for credit were denied, and the ones who received financing did not get as much as they needed.

According to the Federal Reserve Bank of New York:

“… although many employer small businesses were profitable and optimistic, a significant majority faced financial challenges, experienced funding gaps and relied on personal finances. These issues were even more pronounced for the smallest firms, which were less likely to receive necessary funding and more likely to rely on personal finances to operate.”

Despite the fact that the vast majority of businesses in the United States are classified as small businesses – that is, they have employee bases of 500 or less – approximately half of all businesses fail in the first 5 years.

Many of these fail due to lack of funds and a lack of finances.

On top of that, even the businesses that succeed don’t even break even for 2 or 3 years, making financing at the outset crucial. The tricky part is that securing financing is also the most difficult part, which is why so many small businesses are denied financing. And owners are understandably frustrated.

Here are a few key reasons why small businesses are often denied funding.

An Uncertain Economic Climate

Uncertainty behind the local and regional economy is a basic stressor and reason behind the struggle many small businesses encounter. This very uncertainty is why so many businesses are likely to seek financing.

Unfortunately, this problem is also a reason why banks are less likely to give loans. When times are tight, lending is too. Banks aren’t inclined to lend when it’s possible the economy will take a dive, tanking many small businesses.

Because of this, many people are turning to personal savings, lines of credit, and even loans from family and friends.

Lack of Collateral

Collateral is some type of asset which secures the loan. This collateral can be some type of equipment, real estate, or anything else a bank could repossess and sell if the business fails to repay the loan.

It’s crucial for small businesses to list collateral on loan applications for the obvious reason of showing that they can pay it back in the case of default. The problem is that most startups don’t have much collateral like vehicles or business equipment. The result is the small business is denied a loan.

Gender and/or Ethnic Bias

Unfortunately, there appears to still be a major gap here, even though lenders are not supposed to be biased in this way. In fact, loan approval rates are much higher for white males than they are for women and minorities.

According to gudcapital.com:

“… small businesses that were more than 50 percent owned by a woman only received 15 percent of all SBA 7(a) loan approvals; American Indian owned businesses received 1 percent; Asian owned businesses received 24 percent; African American owned businesses received 2 percent; Hispanic owned businesses received 6 percent; White owned businesses received 53 percent; and male owned businesses received 70 percent of all SBA 7(a) loan approvals.”

The sexism can be so bad that some female founder resort to extreme measures, like creating an imaginary male founder to dispel the bias.

Bad Credit History

If a business owner has a terrible credit score, there’s a really good chance they’ll be denied funding. No surprise here.

This is why it’s so important that business owners get to know their credit score before they apply for a loan. Additionally, they should focus on building a solid credit score from the get go, even if they think they won’t need a big loan.

Understanding your business credit score makes you more likely to be approved for a loan and more prepared to grow your business.

What many don’t realize is that if you’re a small business owner, you need to have both a strong personal and business credit score to secure a significant amount of financing from major banks. There’s no way around this.

According to nav.com, the ideal credit score is 680 to 720. It also helps if a business owner understands how to demonstrate a solid history of responsible money management.

If you your credit score is low, you’ll need to spend time improving it before applying for a loan.

High Operating Expenses and Slow Growth

If a business can’t adequately demonstrate growth and growth projections, they may have trouble securing adequate financing for further growth—another catch-22 situation.

According to a Small Business American Dream Gap Report, 3 of 10 small businesses face challenges covering operating expenses. This trend is often due to the challenges of incorporating new employees as well as expanding or building inventory. Unfortunately, if they can’t cover their expenses, they’ll have difficulty securing funding

According to Entrepreneur.com, some 26 % of business owners don’t hire or expand because they don’t have the funds to do so. In turn, they resort to personal savings or loans from friends and family, despite the significant risks and high interest rates involved in these actions.

Lack of Cash Flow

In the past year or so, about 45% of businesses sought out financing, namely to cover operating expenses and expansion. This need for funding indicates a severe need for extra cash flow, which can be a huge red flag to banks.

Cash flow is not only one of the main reasons that existing businesses fail, it’s also a top reason why financing applications get denied. The reason behind this is simple: expenses come first before loans. This makes sense if you think about it on a personal financing level as well: you’re going to pay your rent and bills before you pay your loan payments. It’s simply a matter of priority.

Type of Business

According to nav.com, business owners are more likely to be denied financing if they are sole proprietors, brand new businesses, or state-approved businesses. In addition, businesses are liable to be rejected based on the type of industry they’re in.

In this game, size matters, and unfortunately the very nature of most small businesses makes them a bigger risk, especially if they are new. According to the Federal Reserve Website, smaller firms are “notably less successful at obtaining financing at large banks (45% success) than larger firms … (72% success).”

Part of the way a bank assesses a loan application is by assessing the customer base. If they’re looking at an application from a business in an industry that has a stable customer base, they are more likely to approve the application. Showing diversity in your client base is a key way to show secure projections.

Unclear Understanding of the Financing Process or Options

According to nav.com, there are at least 44 of different options for small business financing in the U.S. Depending on your area and/or industry, there may even be specialized grant options that are not widely advertised. Entrepreneur.com reports that some 20% of businesses applying for loans in the past 5 years had experienced multiple rejections and a quarter of these did not have a clear reason for the denial.

Researching and applying for these can be extremely time-consuming, which is why it’s recommended that small businesses ask the local business association for tips pertaining to their specific situation and/or industry.

All this points to a serious lack of understanding and transparency around what makes a business credit worthy. If people simply aren’t aware from the get go, or they’re asking questions but not getting clear answers, there’s obviously a problem.

Conclusion

To better prepare for loan applications, small business entrepreneurs need to have a clear picture of their current status, both in terms of financing and in terms of future projections.

They need to understand the context of securing funding to build accurate projections, and they can then send these projections with the loan applications to hopefully create a positive feedback loop.

But beyond that, small business owners need to thoroughly demonstrate their financial responsibility in order to have the best chance of securing crucial funding.

When you have business self-awareness, you are much more likely to succeed and to get the financing you so desperately need.

This article originally appeared at Life Insurance for SBA Loans.

Author:

Written by Life Insurance for SBA Loans.

Monday October 23 2017, Daily News Digest

Mosaic

News Comments Today’s main news: SoFi discussed acquisition with Schwab. Victory Park Capital dumps Avant loans, moves away from MPL. Banco BNI Europa partners with Parcela Já on payments solution. Skystar Capital to raise third fund in 2018. Today’s main analysis: Mosaic prices, Nelnet, and Avant. Today’s thought-provoking articles: Asian stocks outpace U.S. since Alibaba IPO. When payday loans […]

Mosaic

News Comments

United States

United Kingdom

Chin

European Union

International

India

Asia

MENA

Africa

News Summary

United States

SoFi held talks for possible $ 8bn sale this year (Financial Times), Rated: AAA

SoFi, the highly valued online lender, explored a sale earlier this year, holding talks with companies including Schwab, the San Francisco-based broker, according to people familiar with the matter.

The sale discussions at SoFi, which has since been rocked by sexual harassment allegations, were triggered by an indicative offer of $6bn from a foreign bank, according to two people familiar with the matter. That offer came soon after SoFi raised $500m in a fundraising round led by Silver Lake, which valued it at more than $4bn.

After the initial approach, SoFi held talks with other possible acquirers with a targeted price of $8bn-$10bn. Several US companies, including Schwab, discussed a possible deal but none matched the desired price. SoFi decided to wait for an initial public offering, tentatively scheduled for 2019.

Mosaic Prices, Nelnet Acquires Great Lakes, FinTech Financings (PeerIQ), Rated: AAA

Earlier this week, Mosaic priced MSAIC 2017-2, their second solar ABS. The deal was heavily oversubscribed, with over $1.7 Bn in orders for a $307.5 Mn deal.

On Thursday, Nelnet announced it would acquire Great Lakes Education Loan Services for $150 Mn in cash.

In other securitization news this week Avant filed ABS 15-G for is AVNT 2017-B deal. KBRA assigned preliminary ratings to three classes of notes issued by Avant Loans Funding Trust 2017-B (“AVNT 2017-B”). The transaction is a $232.648 Mn consumer loan ABS transaction that is expected to close on October 31, 2017. We took a close look at Avant’s first deal of 2017 in a prior newsletter.

Mosaic Background
With over $1.1 Bn loans funded, Mosaic maintains a proprietary origination channel consisting of a high-quality network of approved solar installers. These installers are carefully screened as Mosaic must rely on these partners to refer quality borrowers because the loans are secured by the installed solar systems.

Last month, Mosaic inked a deal with Goldman Sachs for a $300 Mn forward purchase agreement. In addition to the ~$450 Mn the company has raised through securitizations, other significant sources of financing include a $220 Mn series C equity raise led by Warburg Pincus in 2016 and $650 Mn in warehouse commitments from a diverse mix of banks.

Source: PeerIQ

Asian Companies Sell Most Stock in U.S. Since Alibaba’s IPO (Bloomberg), Rated: AAA

Fifteen Asian companies have raised $3.2 billion in U.S.-listed IPOs and seen their shares climb 46 percent since their listings this year, according to weighted-average share price data compiled by Bloomberg. That compares to an 11 percent climb for the 105 U.S. businesses that listed domestically and raised a combined $23.6 billion.

Combined with other listings, those three have put October on track to be the biggest month of the year for U.S. IPOs. The $29 billion raised in 2017 has already outpaced the $15.2 billion in stock offered by new U.S.-listed companies through this time last year, according to data compiled by Bloomberg.

The 13 Asian companies that raised a combined $1 billion in 2015 are up 117 percent, beating the 19 percent rise for U.S.-based companies that had domestic listings that year. In 2014, 20 Asian companies including Alibaba raised a combined $30 billion. Those stocks are up 152 percent on average. The $50 billion in U.S.-based companies’ shares sold that year have climbed only 35 percent.

When Payday Loans Die, Something Else Is Going to Replace Them (The Atlantic), Rated: AAA

But the regulations will do little to address the other side of the problem: consumers’ demand for small, fast, easy-to-obtain loans. Solving that problem, while ensuring that new predatory loans options don’t pop up, will fall to the financial industry and state legislators—who’ve struggled in the past to protect financially vulnerable Americans.

Some of those options are already out there, and won’t be covered by the CFPB’s new rule, says Nick Bourke, the director of the consumer-finance program at Pew Charitable Trusts. According to Bourke, many of the same payday and auto-title lenders that will be shelving shorter-term loans ahead of the CFPB’s onerous new rules already have other loan options available. And they’re available in about half of all states.

To prevent that, Bourke says, states could mandate that small and installment loan options include affordable repayment structures, reasonable repayment times, and lower fees. That’s an option that has already been implemented in some states such as Colorado, and one that might work elsewhere.

There are few places for poor, underbanked Americans to turn when they’re in need of a couple hundred dollars in a pinch. In the past, many traditional banks have said that the risk and cost of underwriting small-dollar loans simply isn’t worth it: Small loans, coupled with borrowers with low incomes and spotty or nonexistent credit history, don’t really appeal to large, profit-seeking banks.

One of the main alternatives provided by credit unions is the Payday Alternative Loan—which allows federally backed credit unions to provide their members with small loans in amounts ranging from $200 to $1,000, with repayment terms of one to six months. But when you compare the accessibility of PAL loans to the demand for payday products, it’s clear that they can’t meet the need. In 2016, only about 20 percent of the country’s fewer than 4,000 federal credit unions offered the loans. And to get one, a borrower must be a member of a credit union for at least a month, and sometimes complete a financial-education requirement in order to fulfill a loan application. That’s an imperfect swap for many of the 12 million Americans who use payday loans each year to receive an instant cash infusion.

How Often Do Mortgage Lenders Follow-Up via Calls And E-mails? (Tenfold), Rated: A

I conducted a study where I applied for home loans with nine different lenders and then tracked their follow-up attempts over two weeks. During this time, I also did not respond to their follow-up calls and e-mails.

  • Over the course of two weeks, Quicken Loans made the most follow-up attempts. 18 to be exact.
  • Lenders at Citigroup came second with 17 follow-up attempts.
  • loanDepot, in third place, attempted 13 follow-ups.
  • During the same period, Chase Mortgage and PennyMac Loan Services tied for fourth with 11 follow-up attempts.
  • Sales reps at Bank of America only followed-up on the home loan application five times.
  • U.S. Bancorp followed-up twice, and CapitalOne and HSBC Mortgage Services tied for last with just a single follow-up attempt.
Source: Tenfold
Source: Tenfold

Varo Money Announces New Product Features to Help Customers Save More Money (Varo Money Email), Rated: A

SmartBiz Loans brings banks back to SBA lending (Biz Journals), Rated: A

The company, which offers an online Small Business Administration loan marketplace, was the top facilitator of traditional SBA 7(a) loans under $350,000 in fiscal 2016.

As S&P Global Ratings noticed collateral performance in the U.S. subprime auto loan asset-backed securities (ABS) market deteriorated moderately on a sequential basis in August, Davis & Gilbert’s Insolvency, Creditors’ Rights & Financial Products Practice Group fears investors could be in for a surprise if that market segment makes a more notable move.

S&P Global Ratings indicated the subprime net loss rate increased to 7.95 percent in August 2017 from 7.38 percent in July but decreased year-over-year from 8.35 percent.

Between August of last year and the same month this year, analysts noted about 35 new deals with a total collateral amount of approximately $17 billion were added to their index. These additions pushed the outstanding collateral amount up to approximately $35.6 billion compared to $32.0 billion a year earlier.

Fundera Report: The Traditional SME Lending Process Pretty Much Sucks (Crowdfund Insider), Rated: A

Fundera, an online lending comparison site, has partnered with Oliver Wyman on a report about SME lending. Entitled, “Great Expectations: Improving the loan application process for small business borrowers, the document effectively labels the traditional borrowing process as broken.

On the flip side, banks still have an advantage in a lower cost of capital so if you can suffer through the frustration you loan (if ever approved) may come at a lower cost.

So what is the big takeaway from all of this?

The report explains that alternative lenders have a higher cost of capital because they lack access to low cost deposits that banks and credit unions use to fund their loans. The average cost of funds for a bank is around 0.06%. In comparison, OnDeck reported a cost of funds in Q1 2017 of 5.9%.

This App Will Loan You $ 75 Interest Free to Avoid Overdraft Fees (Lifehacker), Rated: A

Another solid solution: Dave. Not your buddy from college, the app.

Once it’s tied to your bank account (using the same military-grade 128-bit SSL encryption technology used by big banks), the app will monitor your finances and reoccurring expenses and then let you know when you’re running at risk of overdrafting your account.

Within the app you can ask to borrow $25, $50, or $75 to get you through until your next paycheck comes. Loans are free, but when you pay them back you’re given the option to leave a 5-15% tip. For every % of tip you give, the app will plant a tree.

Using the app costs $1 per month.

Real Estate Crowdfunding Firm Targets Institutional Investors (InstitionalInvestor.com), Rated: A

First RealFund will offer property investments in high-growth neighborhoods such as Brooklyn.

The New York-based firm will provide short-term real-estate investments in high-growth neighborhoods, according to co-founder and Chief Executive Officer Dan Drew. First RealFund will offer opportunities to co-invest alongside the firm in residential and commercial real-estate deals.

He projects returns of 12 percent to 24 percent on investments lasting one to three years.

First RealFund has a $5 million pipeline of deals and plans to co-invest $100,000 in each of its first two offerings, according to Drew. He said investors can allocate between $500,000 and $3 million in each of the real estate assets offered by First RealFund.

Rory Eakin of CircleUp (Lend Academy), Rated: A

In this podcast you will learn:

  • The circuitous route Rory took through South Africa before founding CircleUp.
  • The huge untapped opportunity that Rory and his co-founder discovered.
  • Some examples of consumer goods companies that have raised capital on CircleUp.
  • How they approach the due diligence process.
  • How and why they are tracking 1.2 million companies in the consumer sector.
  • Why building their own data analysis tools has been a key ingredient in their success.
  • The typical size of the companies that are raising money and the typical equity rounds.
  • The number of companies that have raised money on the platform.
  • The average revenue CAGR for those companies.
  • Their current mix of investors and the average investment on the platform.
  • Why they decided to launch a loan product earlier this year.
  • The typical loan terms they are offering.
  • Who is providing the capital for their loan product.
  • Why they remain focused on the consumer goods vertical for this loan product.
  • What the future holds for CircleUp.

OneMain Increases eSignLive E-Signatures Roll-Out to 1,700 Branches (Globe Newswire), Rated: A

VASCO Data Security International, Inc. today announced that longtime customer OneMain Financial, the largest responsible personal loan company in the U.S., has extended its use of eSignLive e-signatures for loan applications to more than 1,700 U.S. branches in 44 states. The lender has seen 99 percent adoption of the technology, which translates into an annual savings of approximately 500,000 administrative hours and $500,000 in toner costs alone, and enables OneMain to deliver an omni channel experience to improve the customer experience while reducing in-branch costs.

OneMain selected eSignLive in 2012 to enable virtual personal lending, including unsecured loans across online and call center channels.

Real Estate Crowdfunders Turn to Auto-Invest (Patch of Land), Rated: A

Automatic investment tools are gaining traction with real estate crowdfunding platforms as a way for investors to obtain greater access to transactions that meet their investing criteria.

The benefits of automatic investing to the real estate investor are multifold:

  1. It levels the playing field.
  2. It improves flexibility.
  3. It may allow for higher investments.
  4. It increases portfolio diversity. 
  5. Investors gain access even when demand is high.

How auto investing helps lenders

While the multiple benefits of automatic investing are fairly obvious to investors, real estate crowdfunding lenders stand to benefit as well. Using data gathered from investor parameters selected in a respective platform’s auto invest feature, the lender is able to see if a loan will fully fund or by what percentage it will fund before the loan documents are ever signed or approved.

This data helps determine whether an appetite exists on a particular real estate crowdfunding platform for a specific loan. If there’s a huge appetite for a particular loan type, then more of those types of loans may be offered.

Lenders who have built-out this type of auto-investing technology in an intelligent way will have an audit history to see how investing parameters have changed over time, which will help to make smarter lending decisions now and into the future.

Lenders, armed with auto-investing data, will be able to draw trend lines on how investors are or are not changing their investing parameters.

This could mean making a decision to deny a loan application because “crowd” investors have no appetite to fund it while prioritizing another loan through the approval and funding process because of high demand from investors.

Fears of commercially owned banks are unfounded: OCC’s Noreika (American Banker), Rated: A

Acting Comptroller of the Currency Keith Noreika on Thursday pushed back against concerns that his agency’s proposed fintech charter will unduly benefit nonfinancial firms.

Why Fintechs Want More Access to State Banking Regulators (Law.com), Rated: A

This week, the Conference of State Bank Supervisors (CSBS) announced more than 30 companieswill participate in its newly formed Fintech Industry Advisory Panel. The panel is part of the CSBS’s Vision 2020 initiative, which seeks to “modernize state regulation of non-banks, including financial technology firms.”

At financial startup Social Finance Inc. (SoFi), general counsel Rob Lavet, who oversees compliance professionals and is used to interacting with state and federal regulators, will be the one to serve on the panel. Kabbage’s head of global privacy, Sam Taussig, will represent the Atlanta-based small-business lending company.

Some companies have chosen other executives to participate in the regulatory conversation. At CommonBond, for instance, CEO and co-founder David Klein will represent the student loan company.

Judge OKs LendingClub Investor Class, Competing State Suit (Law360), Rated: B

Investors in LendingClub Corp. who accused the online lender of stock fraud were recognized as a class in California federal court on Friday, but the judge allowed a competing state-court case to advance despite his skepticism that it would result in a better outcome for investors.

Payments M&A, deals and financings all happened (The Financial Revolutionist), Rated: B

First Data accidentally let it slip that it was thinking about buying payments processing partner BluePay and 

Lendio Joins Innovative Lending Platform Association (OnDeck), Rated: B

The Innovative Lending Platform Association (ILPA), consisting of the nation’s leading online small business lending platforms, today announced that small business platform Lendio has joined the trade organization as an associate member. Lendio will work with other ILPA members to advance online small business lending education, advocacy, and best practices.

United Kingdom

VPC offloads Avant loans as part of shift from marketplace lending (P2P Finance News), Rated: AAA

VICTORY Park Capital (VPC) Specialty Lending Investments has offloaded the majority of its loans from US personal loans platform Avant.

The alternative lending investment trust said in a portfolio update on Monday that the move is part of its strategy of shifting from marketplace to balance sheet lending.

The investments sold represent 7.6 per cent of the company’s net asset value as at 31 August 2017.

Why investing in your neighbour is the new finance revolution and Cornwall’s leading it (CornwallLive), Rated: A

Crowd sourced funding has transformed the way we do business, whipping up a sense of entrepreneurship and encouraging all of us to think about investing more locally.

According to SWIG Finance which has a base in Truro, more than £10billion has been loaned to UK businesses and consumers by the alternative finance sector as a whole since 2005.

Crowdfunder’s growth has been meteoric with 25,000 members joining the platform every month and raising some £2m a month for UK projects.

ThinCats Expands in Midlands By Appointing Ravi Bagri As New Origination Manager (Crowfund Insider), Rated: B

Peer-to-peer lending platform ThinCats announced on Friday it has appointed Ravi Bagri as its new Origination Manager, who will cover the Midlands region. According to the online lender, Bagri is considered one of the most well-established names in the Midlands finance sector and has nearly 30 years of experience in retail and commercial banking.

Debt collector Cabot plans to float on London Stock Exchange (Financial Times), Rated: B

Cabot has also appointed Andy Haste, chairman of payday lender Wonga, as independent chairman-elect, to help oversee the debt management group’s transition to a public company.

China

Third-quarter funding for China’s fintech hits a speed bump as state tightened reins on capital outflow (SCMP), Rated: AAA

Total funding raised by China’s venture capital-backed financial technology start-ups fell to US$800 million across 26 deals between July and September, a drop of 27 per cent from last year, as the central government kept a tight rein on capital outflows from this sector.

That amount was down from US$1.1 billion in the same period last year and below the US$1 billion recorded in the quarter to June, according to a recent online briefing by Lindsay Davis, an intelligence analyst at venture capital research firm CB Insights.

Davis said deal activity of mainland fintech start-ups in the third quarter dropped 19 per cent from 32 transactions recorded in the second quarter.

Dianrong, the Shanghai-based operator of a popular online lending marketplace, recorded the region’s largest fintech deal last quarter – a US$220 million Series D funding round led by China Minsheng Investment, Singapore sovereign wealth fund GIC and South Korean private equity firm Simone Investment Managers.

That was followed by the US$200 million Series C financing round of Shenzhen Suishou Technology, which runs a personal finance management platform on the mainland. Its investors included Hong Kong-listed conglomerate Fosun International, global investment firm KKR & Co, Sequoia Capital China and Beijing-based venture capital company Source Code Capital.

Source: SCMP
European Union

BANCO BNI EUROPA AND PARCELA JÁ SIGN STRATEGIC PARTNERSHIP TO LAUNCH SOLUTION FOR PAYMENT OF PURCHASES (Global Bnking & Finance), Rated: AAA

Banco BNI Europa and Parcela Já, Portuguese Fintech, have entered into a partnership to launch an innovative solution for the Portuguese market, which aims to enable any retailer to offer its customers the instalment of any purchase without costs to the consumer.

This product is open to all consumers with a credit card. To benefit from this service, the final customer will only have to make the purchase with his usual credit card, deciding at the terminal, at the time of purchase, the instalment he intends to make, between 2 and 12.

PayKey Launches Smart Mobile Payments Keyboard (PYMNTS), Rated: A

Mobile banking startup PayKey, which offers a smartphone keyboard designed for millennial banking customers, has raised $10 million in Series B funding, bringing its total raised to $16 million.

According to news from TechCrunch, this latest round was led by MizMaa Ventures, with participation from other investors that include SBI Group, Siam Commercial Bank’s financial tech subsidiary Digital Ventures, SixThirty and Fintech71.

PSD2 signals a return to relationship banking, says Temenos (AltFi), Rated: A

Jeroen Broekema, online lender Funding Circle’s lead in the Netherlands, recently told us that PSD2 “has the potential to be a game-changer”, but that its success in the short-term will depend on the willingness of the big banks to engage.

Temenos is a software provider to banks and other financial services firms, helping them to keep pace with a rapidly changing market. It’s the fourth largest software company in Europe, with profits of over $185m and a market capitalisation of more than $5bn. (Clearly, selling technology to banks is big business.)

ENEMY TURNED INTO BROTHER: CRYPROCURRENCIES AND BANKS TO INTEGRATE IN JUST ONE YEAR (Bitcoinist), Rated: A

Two factions have formed on their own – people who stay loyal to banks and observe the cryptocurrency market from afar, only dreaming about 30–60% p.a. deposit rates. And then there are those who have switched over to cryptocurrencies and are happy with the state of things but shudder every time they hear about the latest hacking of cryptocurrency wallets. Why make this choice? The market needs a service at the intersection of these factions.

We are finally solving the issue of debit card linkage to cryptocurrency wallets. About 10 companies promise to issue their Master Card or VISA cards – all to no avail… Our marketplace will solve the problem of online lending, including p2p lending, as well as deposits in cryptocurrency assets. Sure, the market may offer similar services, however only Narbonne has the team with that much experience in finance.

Many microfinance companies like to mention that 2–3 billion people are currently unable to get a loan in a bank.

International

The ECN Updates Review of Crowdfunding Regulation in the EU, Israel & the USA (Crowdfund Insider), Rated: AAA

On October 20, at its 6th Convention in Vilnius, Lithuania, the European Crowdfunding Network (ECN), the European association of alternative finance platforms, released its Third Edition of the Review of Existing Regulations of crowdfunding and related alternative financing in the 28 countries of Europe, as well as in North America and Israel.

The 720-page long report was written by local offices of law firms in each country coordinated by international law firm Osborne Clarke under the direction of Tanja Aschenbeck-Florange and her colleague Thorge Drefke.

In response to the new alternative financing models, some 11 EU countries have implemented national level regulations for securities-based and lending-based crowdfunding:

Belgium, Finland, France, Germany, Greece, Italy, Lithuania, The Netherlands, Portugal, Spain, and The United Kingdom.

A few other countries, such as Romania and Ireland, are preparing to issue such crowd-funding-specific regulations.

The result of this lack of regulatory harmonization is a market fragmentation which clearly hampers the development of the industry.

A Call for Action

The aim of the report, in addition to providing a reference document for the platforms and their partners, is to present the European and national regulators and legislators with a clear picture of the fragmented regulatory landscape and to suggest directions for improvements inspired from the best practices observed in each country.

Sovereign funds’ corporate deals halve in Q3, Asians stay active (The Star), Rated: A

The value of corporate deals with sovereign wealth fund (SWF) participation halved in the third quarter as oil-driven funds continued to take a back seat.

GIC participated in the top three deals, the largest being a US$6.4bil offer for Danish payments processor Nets by newly-formed company Evergood 5. The deal was backed by a consortium that included GIC, led by private equity firm Hellman & Friedman.

The second largest was the US$1.6bil acquisition of Hong Kong-based insurer MassMutual Asia by another investor group that included GIC.

GIC also led a US$220mil funding round for Chinese peer-to-peer lending platform Dianrong.

Fintech startup, Trade Ledger, launches world-first tech to help banks fight off global tech giants (Business Insider), Rated: A

Career technologists, Martin McCann and Dr. Matthias Born, are launching a world-first lending tech for banks and traditional lenders that will help to equip them against competition from tech giants such as Facebook, Tencent, and eBay wanting to enter financial services.

Trade Ledger is the world’s first business lending platform that transforms digital data from business supply chains in real time, allowing banks to assess and regularly update credit and default risk of businesses they lend to. Currently this is only done on a one-off or infrequent basis on a very small sample of invoices, and not on any other trade documents.

How Cryptocurrency Loans Are Reinventing Credit (International Business Times), Rated: A

The blockchain nonprofit Celsius, headquartered in New York, now has an initial coin offering to fund the launch of its beta loan platform for Americans in January.

One of the biggest barriers for taking out a loan is credit worthiness. The traditional way banks and lenders assess credit is widely considered outdated in the modern economy.

Users will download the app and log in through Facebook or LinkedIn to authenticate their identities. Ebay or Amazon sellers can upload their transaction histories to show their reliability. Borrowers can even have a guarantor, say a friend anywhere in the world with a cryptocurrency wallet, put up her digital assets to boost your Celsius credit limit.

Borrowers receive their credit in dollars even though lenders are giving them ether.

The plan is to eventually go global. Meanwhile, a Buenos Aires-based startup called the Ripio Credit Network will soon offer similar cryptocurrency services in Latin America. Ripio will focus on short-term microloans, ranging in value from $20 to $2,000. Ripio founder and CEO Sebastian Serrano told IBT the bitcoin wallet platform already has 140,000 users, mostly in Argentina and Brazil.

According to the World Bank, around 2 billion people still doesn’t have any type of bank account.

Like Nubank in Brazil and the fintech startup Tala in Africa and Asia, Ripio will also use cellphone data to help bolster the user’s credit score.

NerdWallet reported the average credit card rate was around 12.3 percent in 2016, accounting for inflation.

Salt has a KeepKey hardware wallet and a digital lending platform set to launch near the end of this year, altogether bringing in more than $45 million in revenue thanks to 25,0000 users.

The Cambridge study estimated there are between 5.8 to 11.5 million active cryptocurrency wallets worldwide.

India

How alternative financial services ecosystem has become big boon for India (Financial Express), Rated: AAA

J Venkatesh had always wanted to gift his college-going daughter a phone. But the machine operator, who works in a tobacco-manufacturing unit in Secunderabad, could never save enough money to buy a smartphone. Though he had a savings account in a large nationalised bank, he wasn’t able to procure a personal loan due to poor credit score. That’s when Home Credit India, a consumer finance provider, came into the picture. Last year, the company gave Venkatesh a small-ticket loan of Rs 10,000 to buy a smartphone. The small-ticket loan boosted his credit score, following which he was able to avail two personal loans of Rs 1 lakh and Rs 73,000 within a gap of less than six months between the two loans.

“With less than 20 million consumers in this country having credit cards and 70% of the formal consumer credit availed by only 24 million households, the opportunity for fintechs is immense,” says Lizzie Chapman, co-founder and CEO, ZestMoney, a fintech firm. At ZestMoney, the ticket size of loans ranges from Rs 3,000 to Rs 3 lakh. “But our sweet spot is in the Rs 20,000-Rs 50,000 space. These are purchases that are too small to warrant taking a personal loan for, but too big to put in one lumpsum for most people,” Chapman adds.

Today, nearly one-third of the customers availing loans through these financial institutions are new to credit.

As per data released in 2016 from the finance ministry, only 28-32% of Indians have access to financial institutions, including post offices and banks.

Online lending startups thrive as banks with bad loans become cautious (Deal Street Asia), Rated: A

Online lending start-ups such as Faircent, Wishfin and Loantap as well as large e-commerce firms are helping expand consumer credit at a time when banks burdened by bad loans have become cautious about lending.

Personal loans advanced by banks grew 15.7% in August, slower than the 18.1% growth that the segment reported a year ago, according to the Reserve Bank of India (RBI) data.

Faircent (Fairassets Technologies Pvt. Ltd) is now processing around 300 loans per month, with an average loan size of Rs1.5 lakh on a monthly basis, compared with 130 loans given in November and December last year.

Wishfin (Mywish Marketplaces Pvt. Ltd), a company which aggregates loan and credit products from banks, has also experienced a huge increase in loans after demonetisation. The firm claims to get around 300,000 applications every month for various financial and credit products, up 2.75 times from a year ago.

LazyPay (owned by PayU) and Simpl (owned by Get Simpl Technologies Pvt. Ltd) also provide a buy-now, pay-later option to customers on their platforms by tying up with online vendors.

Loantap (LoanTap Financial Technologies Pvt. Ltd) is one such platform that provides instant finance to salaried consumers. It has categorized loans for specific-use cases including weddings, holidays, car/bike loans and credit card re-financing, among others.

Now, a safer marketplace for loans (The Hindu Business Line), Rated: A

If you want to raise money quickly for business or personal use, the peer-to-peer (P2P) lending platform has now become more transparent and safer. The RBI last week laid down directions that bring more credibility to the online platform.What is it ?A P2P lending platform brings lenders and borrowers together.

FundPitch to cater to SMEs (The Hindu), Rated: B

While Bodhtree Consulting Limited will launch its operations in the Fintech Valley-Vizag within a few days, two other companies Lycos Internet Ltd (erstwhile Ybrant Digitals) and Kissht will also invest in the city.

The three companies have given the commitment to start their operations in Fintech Valley-Vizag with a total job opportunity for 600.

Besides Bodhtree, its subsidiary FundPitch would also facilitate funding for SMEs — a long needed requirement for innovative entrepreneurs in Andhra Pradesh — J.A. Chowdary, Special Chief Secretary and IT Advisor to Chief Minister, told The Hindu.

Asia

Indonesia’s Skystar Capital to raise third fund in 2018, to target late-stage funding (Deal Street Asia), Rated: AAA

Indonesian early-stage venture capital firm Skystar Capital is expected to hit the fundraising course for its third fund by the second half of next year, a top executive told DEALSTREETASIA.

The VC is now deploying its second fund – which it closed mid-2016 – with check sizes ranging between $100,000 and $1 million. It plans to start the fundraising process when it has utilized at least 50-60 per cent of the current fund.

Lifestyle inflation could be the reason you’re struggling (The Star), Rated: A

WHAT is lifestyle inflation? Quite simply it’s when you increase your spending when your income level goes up, for instance, each time you get a salary increment. It’s a simple idea that when you make more, you spend more.

But aside from that, did you know the Malaysia Employers Federation (MEF) has reported that the average salary increase in 2017 is estimated at 5.3% for executives and 5.43% for non-executives.

Inflation is floating between 3.6% to 3.9%, that only gives you a salary increase of 1%-2%.

Propelling Singaporean SMEs to greater heights with fintech (SBR.com.sg), Rated: A

According to the January 2017 report by Hootsuite and We Are Social Singapore, there are currently 644.1 million people in Southeast Asia. Of which, 53% are internet users making the region ripe for growth and expansion for Fintech adoption.

Paired with the Smart Financial Centre, with funding of $225 million, this has reduced the barriers to entry for fledgling startups and SMEs.

Payments
As a sector that contributes between 23 and 58 percent of the Gross Domestic Product of the region’s various countries, many transactions arise from SMEs. These may include the use of paper money or cheques, processes that are labour-intensive and time-consuming. However, with the rise of payment services like Omise in Thailand, M_Service in Vietnam, and Doku in Indonesia, SMEs can now reach customers without credit cards to transact on an e-commerce platform.

In Singapore, the introduction of PayNow, a payment service that allows transactions to be made to the user’s mobile number on mobile banking apps, has made banking transactions more convenient than ever.

Lending & Financing
Whilst SMEs are key to driving economic growth in Southeast Asia, the fact that they are small and medium enterprises also mean that they encounter difficulties in securing loans from traditional financial institutions. A report by Deloitte states that less than 60% of SMEs in five countries the region have access to bank loans.

Finance Management 
Another key issue SMEs face is the lack of financial literacy or financial literacy tools available to managers.

Improve policy framework to promote consumer finance (Viet Nam News), Rated: A

Experts agreed that the consumer lending market has high potential in Việt Nam, given the low penetration and significant size of the population that remained unbanked and unserved despite increasing income.

Statistics of the State Bank of Việt Nam revealed that total outstanding consumer loans were at VNĐ960 trillion (US$42.1 billion), or 15.7 per cent of the total outstanding loans in the economy, in 2016, of which VNĐ74 trillion was provided by finance companies.

She cited the World Bank’s statistics according to which the population with loans accounted for 46.84 per cent in Việt Nam, but the percentage of population with loan at financial institutions was much smaller at 18.45 per cent.

MENA

Brace yourselves for the future of finance (Khaleej Times), Rated: A

The financial services industry is experiencing a time of unprecedented change. And the principal driver for this change is fintech.

Investment in fintech in the Middle East alone for 2017 was forecast to increase by 270 per cent at the beginning of the year, with this figure expected to rise exponentially in the short to medium-term.

With the number of people owning at least one smartphone in the UAE – forecast to reach 789 million by 2019 – mobile banking plays a large and very important part in our everyday lives. Indeed, research leading up to the annual Gitex Technology Week in Dubai shows substantial growth in the banking habits of the high-earning, always-connected under-35s who require and expect constant mobile banking access.

In addition to mobile banking apps – robo-advisers, peer-to-peer lending and cryptocurrencies such as bitcoin and Ethereum – have all played a role in this colossal upheaval of the financial services industry.

HONEST FINANCING FOR TURKISH FARMS (Delano.lu), Rated: A

Tackling the challenges of the underbanked, the EFSE Fund and the SANAD Fund for MSME, advised by Finance in Motion, have partnered with Village Capital and the LHoFT to develop the Fincluders Bootcamp 2017, unique investment readiness program designed for entrepreneurs offering inclusive financial products.

We caught up with founders from each of the 12 selected startups, this time with Mehmet Memecan, founder of Tarfin:

What does ​’financial inclusion’ mean to you?

In farming, you achieve higher profitability by either planting more value-added crops, or plant more acres of the same crop. Both of these options require additional to capital.

Could you describe the mission of Tarfin?

Tarfin uses technology and its vast retailer network to deliver competitive financing options for farmers’ purchases of farm inputs. Farmers can buy fertilisers, seeds and chemicals today, and only pay after harvest. We bridge the financing gap, and we do it at a cheaper rate than what’s otherwise available to the farmer.

What are the unique challenges and opportunities of your home market?

Unfortunately, we have very low financial literacy in Turkish agriculture.

Africa

Ghanian FinTech Bloom Impact attracts Canadian investment (CFO), Rated: AAA

Ghana’s Bloom Impact, a machine learning loans marketplace accessible from smartphones has raised undisclosed funding from Engineers Without Borders Canada, EWB Ventures, an early-stage investor in innovative Africa-based social enterprises.

Authors:

George Popescu
Allen Taylor

Monday October 16 2017, Daily News Digest

fintech financing

News Comments Today’s main news: SoFi withdraws banking application. SoFi completes largest loan securitization to date. Retailer sues Kabbage. New UK marketplace loan deal mandated. OakNorth achieves unicorn status with 154M GBP raise. PPdai plans $350M U.S. IPO. Linked Finance gets 2M Euro equity investment. Today’s main analysis: Q3 2017 FinTech Insights Report (must-read). New generation of high net worth individuals spur […]

fintech financing

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Middle East

Africa

News Summary

United States

SoFi withdraws U.S. banking application, citing leadership change (Reuters), Rated: AAA

Student online lender Social Finance Inc said on Friday that it is withdrawing its application for a bank license in the wake of the departure of a number of senior executives, including co-founder and former Chief Executive Mike Cagney.

SoFi Completes its Largest Loan Securitization to Date (PR Newswire), Rated: AAA

SoFi announced today the closing of a $776.7 million offering of SoFi Professional Loan Program 2017-E notes.

SoFi 2017-E marks the company’s largest asset-backed securities issue to date and its 10th ABS transaction this year, bringing SoFi’s total issuance for 2017 to $5.375 billion.  Since inception, SoFi has closed 30 transactions totaling $12.4 billion in issuance.  With the closing of SoFi 2017-E, SoFi maintains its position as a top ten ABS sponsor. The recent transaction was heavily subscribed with orders totaling $2.3 billion.

Wealth Management Firm GENCapital Partners with SoFi and Celebrates One-Year Anniversary (Digital Journal), Rated: A

GENCapital is proud to announce a partnership with SoFi, a new kind of finance and lending company. In addition, GENCapital celebrated its one-year anniversary in September.

FT Partners Research Publishes Q3 2017 FinTech Insights Report (FT Partners Email), Rated: AAA

Highlights of the Q3 2017 report:

  • Q3 2017 financing volume of $5.1 bn was lower than in Q2 2017 ($8.8 bn), but higher than in Q1 2017 ($4.3 bn). This quarter saw the second highest financing deal count ever at 412 transactions, only behind Q1 2016, which had 438.
  • Financing volume year-to-date is tracking just below 2016’s record level and is on pace for the second strongest year ever. This is even more impressive considering that 2016 was skewed by a handful of megadeals in China.
  • The Banking sector continues to be the most active sector this year in both the number of transactions (356 year-to-date) and financing volume ($6.3 bn year-to-date).
  • 2017 FinTech financing volume in Europe ($5.3 bn) is already more than 2x the financing volume of 2016 for the region ($2.6 bn).
  • Q3 2017 M&A volume ($32.9 bn) was the highest since Q4 2015 ($50.5 bn), which included Visa’s $23.4 bn acquisition of Visa Europe. This quarter had eight $1 billion+ M&A deals, which is the most since Q4 2015 (which also had eight).
  • So far this year, 57% of the total global M&A dollar volume is comprised of international targets, although only 38% of the number of transactions represents international targets.
Source: FT Partners

Get the full report here.

Mass. Retailer Sues Over Alleged High-Interest Loan Scheme (Law360), Rated: AAA

A Massachusetts clothing and sports retailer filed suit in federal court Thursday alleging that financial technology company Kabbage Inc. evaded state law by offering high-interest loans through an industrial bank based in Utah, which places no ceiling on interest rates for commercial loans, all the while serving as the true lender.

NRO Boston LLC and owner Alice Indelicato accuse Kabbage and Celtic Bank Corp. of devastating the retailer with their “rent-a-bank” scheme, whereby the bank was listed as the lender for loans in order to get….

Lending Club founder Renaud Laplanche opens up on his ‘frustrating’ exit and new startup Upgrade (Business Insider), Rated: A

Renaud Laplanche tries to “keep a positive attitude rather than focus on my frustration” when it comes to Lending Club.

“It was very, very frustrating. I’m not commenting on the story, but the best way to actually understand what really happened is to read the filings. I think the press made it sound a lot worse, a lot more sensational, than it really was.”

Upgrade raised $60 million (£45.7 million) in April, the biggest ever Series A funding round for a US fintech startup. Many of Lending Club’s original investors have backed the business and Jefferies, an investment bank burned by Lending Club’s loan term scandal, has signed up to buy loans from Upgrade — a vindication for Laplanche.

Now he is focused on “what can I learn from it, what can I do better. Upgrade has been part of that.”

Global Debt Registry Verifies Over $ 1.5 Billion in Loans (AltFi), Rated: A

Global Debt Registry (GDR), the asset certainty company known for its loan validation expertise, today announced it has exceeded a $1.5 Billion of loans issued by digital lending platforms and verified by the Company’s suite of due diligence solutions. On the heels of the GDR’s announcement of its successful SOC 1 Type 2 and SOC 2 Type 2 attestations last week, this achievement confirms the Company’s role as a leader in online lending’s ongoing expansion, driving capital growth in the sector by providing certainty and transparency around investors’ online lending portfolios and protection against risks surrounding the loan data integrity.

Amex targets Square, PayPal in small-biz lending (American Banker), Rated: A

In the digital age, a lot has changed about how businesses operate — and a lot of new data is being generated in the process.

This creates new possibilities for judging a consumer or merchant’s creditworthiness. Square and PayPal have been taking advantage of this for years with models that rely on a merchant’s sales history to determine their likelihood to repay a loan, and American Express is ready to compete.

Redpoint Capital Group, LLC Enters into Credit Services Agreement with Elevate Credit, Inc. Subsidiaries (BusinessWire), Rated: A

Redpoint Capital Group, LLC (“Redpoint”), an alternative investment company focused on providing financing across an array of asset-based strategies, announced it has entered into two additional Credit Agreements with two separate wholly owned subsidiaries of Elevate Credit, Inc.

Rise Credit Service of Ohio, LLC entered into a Credit Services Agreement with Redpoint Asset Funding Ohio, LLC (“Redpoint Ohio”) whereby Rise Credit Service of Ohio, LLC acts as a credit service organization on behalf of consumers for certain loans originated, funded and collected by Redpoint Ohio.

Furthermore, Rise Credit Services of Texas, LLC, a wholly owned subsidiary of the Company, entered into a Credit Services Agreement with Redpoint Capital Asset Funding, LLC (“Redpoint”) whereby Rise Credit Services of Texas, LLC acts as a credit access business on behalf of consumers for certain loans originated, funded and collected by Redpoint.

In addition to the agreements with Redpoint and Redpoint Ohio described above, Rise Credit Services of Texas, LLC, Rise Credit, LLC and the Company also entered into new guarantees of certain receivables of the Company and its subsidiaries held by Redpoint and Redpoint Ohio.

True Link Financial Secures $ 8 Million Series A Round (PR Newswire), Rated: A

True Link Financial, the financial services provider for seniors, announced today that it has raised $8 million in a Series A funding round led by QED Investors, with additional investment from Radicle Impact and Initialized Capital. In conjunction with the investment, QED’s Founding Partner Frank Rotman will join True Link’s Board of Directors. With this latest round True Link has raised $15.8 million since the company’s founding in 2012.

The 45 million seniors in America – the largest and fastest-growing segment of the population – are facing new challenges. Average lifespans increased by more than thirty years over the 20th Century, stretching savings further and layering in new medical costs. Since the time today’s retirees entered the workforce, the percentage of workers with a pension has dropped by more than half. 5.5 million Americans have Alzheimer’s today, and more than 16 million will have the disease by 2050. And according to True Link’s groundbreaking 2015 study, financial fraud costs the aging a whopping $36 billion a year. In short, people are living longer with fewer resources and more risks.

The company’s customer base has grown twentyfold in the last three years. Its cards division is the first Silicon Valley startup debit card issuer to turn a profit, and its robo-advisor is Silicon Valley’s first robo-advisor to turn a profit.

Could online lending become the next systemic risk? (American Banker), Rated: A

When banks resisted expanding credit in the years following the financial crisis and passage of the Dodd-Frank Act, online marketplace lending seized on what seemed like a niche opportunity: targeting the credit markets deserted by banks.

But with issuance of marketplace securitizations now exploding — rising 300% cumulatively in the past two years — the idea of online lending as a niche is quickly deteriorating.

Google and Amazon are ready to disrupt small business lending, former Obama advisor says (CNBC), Rated: A

Tech behemoths Google and Amazon are poised to put competitive pressure on traditional banks in the small business lending arena, one of former President Barack Obama‘s cabinet members said Tuesday.

Karen Mills, who served as Obama’s administrator for small businesses, told CNBC that the tech giants would probably push to disrupt the market and deal a blow to established lenders.

“I think they are going to dominate the market, and that is the next phase that’s coming,” she told the LendIt Europe fintech conference in London.

SBA Lending Activity in FY17 Shows Consistent Growth (PR Newswire), Rated: A

The U.S. Small Business Administration today announced fiscal year 2017 lending numbers showing increasing loan levels in small business lending through the 7(a) and 504 loan programs, as well as increases in lending to women, veterans and emerging communities.

SBA approved over 68,000 loans in the 7(a) and 504 loan programs in FY17.  These programs provided over $30 billion to small businesses.

In FY17, the 7(a) program supported a consistent number of loans — more than $25.44 billion combined across 62,430 loans.  The SBA continues to streamline and improve access to its loan program for small loans and emerging communities, delivering more than $5 billion in smaller loans of $350,000 or less in FY17.

7(a) lending to women-owned businesses (both majority and minority owned) grew in total dollar and volume.  FY17 lending exceeded $7.5 billion, an increase of $298 million from FY16.

FY17 504 lending to women-owned businesses reached $955.2 million, a $277 million increase over the previous fiscal year. Loans to veterans totaled $1.15 billion for 7(a) and 504 lending.

Ray Sturm of AlphaFlow (Lend Academy), Rated: A

In this podcast you will learn:

  • What AlphaFlow does and why it is unique in real estate investing.
  • The real estate platforms they are working with today.
  • Why they are looking to also work with offline hard money lenders.
  • How they decide which platforms to work with.
  • Details of their own proprietary real estate analytics platform.
  • The area of the real estate market they focus on.
  • The average duration, rate and LTV of the loans they invest in.
  • Why they decided to become a Registered Investment Advisor.
  • The types of investors coming to their platform today.
  • How they are able to get new investors a diversified portfolio with days.
  • The tech they are using to connect to the real estate platforms.
  • Some of the big names that participated in their recent seed round.
  • Ray’s view on the real estate crowdfunding space in general.
  • How Ray thinks about the long term direction of AlphaFlow.

    

P2B Investor Program Allows Community Banks to Lend More with Marketplace Lending Partnership (Crowdfund Insider), Rated: A

P2B Investor has launched an interesting partnership program that is good for banks, good for borrowers and good for P2Bi. Banks, typically smaller banks, would like to lend more to SMEs but are risk averse due to multiple reasons. P2B Investor’s new program allows the bank to buy the first half of the loan with their low cost of capital, and P2Bi marketplace buys the second half. Thus the SME has a hybrid line of credit to finance its cash needs.

Payday loans rule could change in 2019 (MSN), Rated: A

Consumers who are caught in a financial squeeze might one day be able to skip the payday loan store and turn to banks and credit unions for lower-cost, quick-fix loans.

Congress could move to overturn the rule — but some say that’s unlikely.

What could change: Lenders eventually would be required to research upfront whether borrowers could afford to repay all or most of  their short-term loans at once — including payday loans and auto title loans — and longer-term loans with “balloon” payments.

What won’t change: People who are cash-strapped still will be looking for ways to cover their bills.

AutoGravity Is Fintech’s Answer To Car Shopping (Benzinga), Rated: A

AutoGravity, a fintech platform for car shopping, has been nationally available for less than a year. The app’s been downloaded more than 750,000 times and processed more than $1 billion in financing requests.

Of the 20 largest automotive lenders, AutoGravity has some form of an agreement with 19, said chief marketing officer Serge Vartanov.

The app’s momentum is building: 100,000 of its downloads came in the month of August alone.

AutoGravity is now available in 49 states after kicking off with a soft launch in California.

While AutoGravity doesn’t disclose its overall lender portfolio, it has previously announced partnerships with Mercedes-Benz Financial Services and Hyundai Capital and a $30 million investment from Volkswagen and Daimler Financial Services.

Cardplatforms disrupts the financial services market (Biz Journals), Rated: A

The Boca Raton fintech company has grown revenues by nearly 400 percent in 2016.

CarGurus races up 72% in a week with 4 strong pops (NASDAQ), Rated: A

CarGurus and three medical device companies each had a strong debut, averaging a first-day pop of 45%.

Issuer
Business
Deal Size
($mm)
Market Cap
at IPO ($mm)
Price vs.
midpoint
First day
return
Return
at 10/13
CarGurus ( CARG ) $150 $1,798 14% 72% 78%
 Online marketplace for buyers and sellers of new and used cars.

The rise of a new kind of finance is setting off alarm bells at the Fed (Business Insider), Rated: A

The challenge is that regulatory bureaucracies in Washington, including the Federal Reserve, may be too slow to react to new technology — from cryptocurrencies and blockchain to crowdfunding — in the same way policymakers missed the risks embedded in the “innovations” in mortgage finance that ultimately fueled the worst housing bust and financial crisis in modern history.

“We’re not going to call it banking — we’re going to call it something else,” Bullard said.

The Unbanking of America, by Lisa Servon (Patheos), Rated: A

Add in the number of people suffering because of the poor economy, especially millennials in the Gig Economy, living from paycheck to paycheck, unable to accumulate enough money for emergency savings, and Americans’ use of businesses such as check cashing companies or payday lenders or other alternate lenders, is entirely rational, in her portrayal, and it’s wrong for policymakers to act as if all Americans need to do is to be told they should get a bank account and that’s that.

Servon’s research for the book consisted, in part, of actually working at a check cashing service and a payday lender.

She then concludes the book by talking about “innovators.”  She profiles a start-up that intends to provide an alternate credit-scoring model that takes into account other types of financial behavior that’s not typically incorporated into the mainstream credit bureaus’ credit scores, and a start-up that intends to make it cheaper to transfer money from one person to another, and a bank, KeyBank, that is more mission-oriented than the usual faceless big corporate bank.

One thing she entirely fails to mention is the fact that interest rates have dropped so dramatically.

A second development in the banking world that she neglects to mention is the rise in prepaid debit cards.

And the third missing item is that of competition.

Corporate Boards Should be Demanding Management Answer These 5 Questions About Company Culture (Entrepreneur), Rated: A

  1. Is the leadership team operating with a high level of professionalism and integrity? Do they value diversity and inclusion?
  2. Do legal and HR have a seat at the table in making key strategy, organizational and business decisions?
  3. Does the company have published policies, processes and trainings so employees easily understand what type of behavior is unacceptable and what to do if they have a problem?
  4. What is the company’s strategy to create a diverse and inclusive environment on the board and in the office?
  5. Does the board have oversight and access to management, so as to be informed about the company’s internal controls and policies and when the same are violated?

Is the way the CFPB handles enforcement about to change? (Housingwire), Rated: B

But regardless of what happens to Cordray, the way the CFPB handles enforcement could be changing as we speak, because the CFPB’s enforcement director is apparently leaving the bureau.

Anthony Alexis, the Consumer Financial Protection Bureau’s enforcement chief, is stepping down after more than two years overseeing the agency’s efforts to combat abuses by the financial industry, a departure certain to fuel speculation that Director Richard Cordray will leave soon to pursue the Ohio governorship.

Alexis, a former Mayer Brown partner who was named enforcement director in 2015 after holding the role in an interim capacity, announced his departure plans to CFPB staff Thursday afternoon, according to a former CFPB attorney who is familiar with the matter.

BREAKING: Auto Racer, Atty Guilty Of Running Criminal Payday Loan Empire (Lexis Nexis), Rated: B

A Manhattan jury on Friday found auto racer Scott Tucker and his attorney Timothy Muir guilty of operating a $2 billion criminal payday loan empire that preyed on millions of vulnerable borrowers and entered into sham deals with Native American tribes.

FINRA ratchets up fintech engagement (FinancialPlanning), Rated: B

FINRA was looking to ratchet up engagement with industry players, he said.

To that end, the regulator has hosted roundtable discussions around the country with fintech firms, robos, vendors, and traditional broker-dealers’ technology departments to get a better handle on how the business is changing, Cook said. Later this month, FINRA will convene a new fintech advisory committee.

United Kingdom

New UK marketplace loan deal mandated (Global Capital), Rated: AAA

The transaction, MOCA 2017-1, will be offered in three tranches and is backed by 31,153  Zopa loans with a total outstanding balance of £208.96m. The loans have an average current balance of £6,708 and a weighted average seasoning of 4.5 months. The average interest rate is 7.2%.

Challenger bank OakNorth nabs £154m, claims unicorn status (AltFi), Rated: AAA

OakNorth, a challenger bank focussed on lending to high growth businesses and property developers, has raised £154m in equity money in a round that values the company at £934m (approximately $1.3bn). The fundraise pushes the firm into “unicorn” territory – a term reserved for private tech firms with a valuation north of a billion dollars.

The money comes from The Clermont Group, Toscafund and Coltrane, which together have purchased a 16 per cent stake in the challenger bank. OakNorth says the money will be used to boost its lending by an additional £1.5bn.

This £4bn problem is stunting SME growth (City A.M.), Rated: A

Every year, tens of thousands of small businesses see their loan applications refused by the big banks.

In fact, figures from the British Business Bank (BBB) indicate that this amounts to around £4bn in loans annually – a staggering figure when you consider that this is preventing businesses from being able to reach their full potential.

SMEs are expected to contribute £241bn to the British economy by 2025, up 19 per cent from last year’s figure of £202bn, according to research from challenger bank Hampshire Trust Bank and the Centre for Economics and Business Research.

Seen and Heard at LendIt Europe: The Future of Finance (Crowdfund Insider), Rated: A

“Data that the bank holds on the consumer belongs to the consumer and not the bank.”

Imran Gulamhuseinwala OBE, Global Head of Fintech at EY

“Banks have outdated technology. To change that takes a lot of effort. From where they are starting, it is not easy.”

Jaidev Janardana, CEO of Zopa

“Users do not really care about the tech. They just know it works.”

Radoslav Albrecht, CEO and founder of BitBond

“As for Cost of Capital. Marketplace lending has access to a very wide range of cost of capital. A lot of platforms sell loans to banks. You have Credit Unions buying loans. Credit Unions have a return target of 2 to 3%. Lower than Goldman Sachs. Marketplace Lenders have access to similar cost of capital.”

Renaud Laplanche, CEO and founder of Upgrade

“The biggest myth of all is that Banks and other financial services are advantaged at this.  They have all the data. The truth is the data is fragmented across all different tech stacks and it is difficult to utilize. Very expensive and slow. The data is in the wrong place.”

Antony Jenkins, CEO and founder of 10X Future Technologies

BitRent Opens New Horizons for Investors (The Merkle), Rated: A

Blockchain platform BitRent announced a revolutionary solution in the area of new-built property: commercial and residential property shared investing at an early stage of construction and total control over construction process in real time by means of modules and structures chipping. The company operates on blockchain technology and smart-contracts protocol. BitRent platform’s mission is to make real estate investing easy, transparent and profitable all over the world.

Christine Farnish on the changing role of the P2PFA (P2P Finance News), Rated: A

There are changes ahead for the Peer-to-Peer Finance Association (P2PFA). The self-regulated trade body has been shaping industry standards for six years, but as alternative lending enters the mainstream, even the P2PFA has to be willing to evolve.

However, the next board meeting – set to be held in November – is expected to focus on an update to the P2PFA rules, membership criteria, and the association’s role in the wider regulatory community.

The departure of RateSetter and LendInvest (which no longer defines itself as a P2P lender) has brought the P2PFA’s market share down to around 50 per cent of the UK’s P2P sector. Current members include Funding Circle, Zopa, MarketInvoice, Landbay, ThinCats, Lending Works and newest member Folk2Folk but no new members have joined since February of this year. However, Farnish rejected rumours that the association is “a closed shop”.

For now, the P2PFA is focused on reviewing its own rules and Farnish confirmed that a revised version of these rules will be published before the end of the year.

Robo-advice in ten points  (London School of Economics and Political Science), Rated: A

The asset management industry is currently in a state of flux, and the manner in which individuals and institutions interact with their wealth managers is on the cusp of dramatic change. Digitisation and increased use of technology should mean that we are at the point of a low-cost revolution.

Robo-advice in ten points:

  • Robo-advice is online
  • The key is probably cost: Robo-advisors can be 60-70 per cent cheaper than traditional solutions and can provide savings of 1 percentage point per year of assets. Over a lifetime of investing, this would make £100,000s of difference to millions of investors in the UK alone.
  • Growth is strong: Whilst still only a fraction of the market, the assets under management of major players are growing between 50 and 100 per cent per year, and new entrants and concepts are developing all the time. There are currently over 100 robo-advisors in Europe with most based in either Germany or the UK.
  • There is a long way to go: Nutmeg, the UKs’ largest robo, has $1bn in assets, but Legal and General, the UK’s largest traditional asset manager, has over $1 trillion – a thousand times larger. Data in the US is similar, with BlackRock having $6 trillion under management and Betterment, the largest US robo, having a fraction of this.
  • On-boarding is a noted differentiator, but also a concern: The faster process and fact finding may not always be up to date with regulations or as rigorous as it should be.
  • Millennials are less important than predicted: Most of the original players in this nascent market targeted millennials. But older, wealthier and still tech-savvy baby boomers have become core clients.
  • Robo-advisors mainly use ETFs
  • Future robo-advisors will be more sophisticated
  • Robo-advice aids financial inclusion: Both the regulator and the industry are hoping that robo-advice will improve participation and access to the investment process.
  • Robo-advisors typically use Modern Portfolio Theory: Robo-advisors typically use mean-variance optimisation for asset selection, but future solutions are likely to use Liability Driven Investment (LDI) frameworks  for portfolio construction.

Ignoring women: Banking’s £130bn a year own goal? (AltFi), Rated: B

Financial services firms could be missing a £130bn opportunity by not winning over women, according to a new report.

UK financial institutions are failing to connect with female customers at every stage of the buying journey, from advertising to offerings and funds, finds Kantar’s latest research. It shows financial advertising and marketing strategies fail to communicate trustworthiness, dependability or understanding – particularly to women, 65 per cent of whom report low confidence in their financial institutions, compared to 55 per cent of men.

Only 38 per cent of women claim to feel ‘in control of their financial future’ compared to 51 per cent of men.

China

Chinese P2P Lending Platform PPdai.com Plans $ 350M IPO In US (China Money Network), Rated: AAA

Chinese peer-to-peer lending platform PPdai.com will seek an initial public offering on the New York Stock Exchange, the company said in a filing, marking the latest Chinese financial technology company to go public. PPdai.com is currently values as a unicorn on China Money Network’s China Unicorn List with a US$2 billion valuation.

The company aims to raise as much as US$350 million through the IPO, though it has not determined the listing price or the number of shares to be offered, according to an IPO prospectus filed with the U.S. Securities and Exchange Commission.

WeiyangX Fintech Review (Crowdfund Insider), Rated: A

This week, China Insurance Regulatory Commission (CIRC) announced that it had grant an operation license to Shenzhen Wei Min Insurance Agency Co. Ltd. Tencent owns a majority stake (57.8%) of this new insurer.

On October 10thAlipay announced to introduce house rental service in eight cities (Shanghai, Beijing, Shenzhen, Hangzhou, Nanjing, Chengdu, Xi’an and Zhengzhou). Users can enter the credit renting platform by searching “rent” in Alipay. If users’ Sesame Credit is above 650, they can enjoy deposit exemption and pay rent monthly.

Hexindai, a less well-known online consumer finance platform, is going to be listed in the US.  Hexindai plans to raise $80 million in this IPO.

October 10th marked the 92th birthday of the world-renowned Palace Museum. It was on the same day that the museum started to embrace a brand new era of digital payment. 

Li Ka-shing shows strong backing for Hong Kong’s fintech sector with MioTech funding (SCMP), Rate: A

Horizons Ventures, Li’s private investment arm, led a US$7 million Series A funding round for MioTech, one of just a few Chinese tech companies in the firm’s portfolio.

Qudian IPO: What Investors Need to Know (The Motley Fool), Rated: B

The Chinese micro-lending specialist is about to hit the U.S. stock market following an IPO early next week. Millions of Chinese consumers and businesses tap Qudian for credit, but does this make the stock a potential buy?

Qudian’s sweet spot is consumer loans. According to a study from Oliver Wyman commissioned by the company, it was the top small lender in the country in terms of number of active borrowers and volume of transactions as of June 30.

These loans are fairly small, even by local standards, and typically have short durations. There sure are a lot of them, though — in the first six months of this year, the company dispensed a total of around 38.2 billion yuan ($5.8 billion).

Over Ten Chinese P2P Lending Platforms expand to Southeast Asian Market (Xing Ping She), Rated: B

Recently, the PINTEC Group has announced a joint venture in Singapore to enter the Southeast Asian market with robo-adviser as its entry point. So far, there are more than 10 Chinese Internet finance companies layout in the Southeast Asian market,including Lufax, Dianrong.com, etc.

Yu-Hang Guo, the co-founder& co-chief executive of Dianrong.com, said that China’s internet finance companies have concentrated on the southeast Asian market, there are active plans as well as passive responses. With Chinese regulations tightening, many of them are looking abroad for growth. It is reported that cash loans, P2P and third-party data services have become the three most promising businesses in the Southeast Asian market.

Actually, before the small and medium-sized internet finance platforms have been set foot, industry faucets such as Ant Financial have already started to move and accelerate into the digital payment market in Southeast Asian.

European Union

Linked Finance Secures €2 Million Equity Investment (Crowdfund Insider), Rated: AAA

Ireland-based peer-to-peer lending company Linked Finance announced on Thursday it secured €2m in equity funding to support its plans for expansion. The funding round was led by the company’s original venture capital backers, Frontline Ventures. The platform has now lent over €34.5 million to Irish SMEs since its launch in 2013, with more than €16.9 million already repaid to its lenders.

The Revolut founder on why his people work 12-13 hours a day (Business Insider), Rated: AAA

So far this year, Revolut, which started as a foreign exchange card linked to an app, has launched business accounts, loans, loyalty offers, mobile phone insurance, a bill splitting feature, a subscription “Premium” account, a chatbot, and more. Oh, and raised $66 million.

“The vision is very simple,” Storonsky said. “At the moment in the world, all banks are very local. As a result, you always struggle with international activity. That means you always need to open new bank accounts, issue new cards, set up a new credit profile.

“Nowadays people are all international. Banks are not providing this service. The vision for us is alternative global banking. Anyone in the world can just download the Revolut app and set up a local bank account to access any services they need.”

‘A lot of people work on weekends’

It’s a bold ambition. But can the business sustain this pace? I had heard from people in the industry — startup founders, PRs, former staff — that Revolut’s working culture can be tough: long hours, aggressive targets, burn out.

“We are not about long hours — we are about getting shit done,” Storonsky said. “If people have this mentality, they work long hours because they want it.”

It should be said that all the company’s Glassdoor reviews are five-star reviews, even those that mention the hours. “This company is highly addictive,” one reads.

German fintech Compeon scoops €12m fundraise (AltFi), Rated: A

A credit brokerage platform by the name of Compeon has raised €12m in a series B fundraising round. The round was led by existing investor Tengelmann Ventures, with btov Partners and Dieter von Holtzbrinck Ventures also participating.

Compeon processed a total of €2.5bn in loan requests in 2016, with an average loan request of €700,000.

Israel’s Migdal Partners Decentralized P2P Lending Platform Lendoit (Finance Magnates), Rated: B

Lendoit, a new decentralized P2P lending platform, has announced that it has partnered with one of Israel’s biggest institutional investment firms, Migdal Investment Banking. Established in 1965 and part of Migdal Capital Markets Group, it currently manages assets valued at $9 billion for thousands of clients in the Israeli private, business and public sectors.

International

PRIVATE CREDIT INDUSTRY: SUPPLY AND DEMAND (All About Alpha), Rated: AAA

The Alternative Credit Council, an affiliate of the Alternative Investment Management Association, has put out a paper on the present state of the private credit industry, considering both the demand (from borrowers) for its services and the supply (from investors) of capital to lend.

In preparing this paper, the ACC has partnered with Dechert LLP, an international law firm that specializes in financial and regulatory intricacies, to research and present a discussion of how private credit has managed to “cement its place in the lending landscape globally.”

One of the points of the paper is that private credit so understood is no longer stuck in the midmarket. It is moving outward in both directions.

On the other side of the market, there continue to be a number of borrowers who are good risks yet whose needs are not being met by the banking system, which is undergoing its own uneasy transformation in the face of regulatory pressure.

The top three characteristics of private credit that borrowers value most are: the speed of decision making, the ability to develop complex structures, and the flexibility of terms.

FinTech builds on blockchain for international mobile payments (Computerworld), Rated: A

IBM has partnered with a Polynesian payments system provider and an open-source FinTech payment network to implement a new international exchange based on a blockchain electronic ledger.

The new payment network uses IBM’s Blockchain Platform, a cloud service, to enable the electronic exchange of 12 different currencies across Pacific Islands as well as Australia, New Zealand and the United Kingdom.

KlickEx Group, a United Nations-funded, Pacific-region financial services company, and Stellar.org, a nonprofit organization that supports an open-source blockchain network for financial services, are backing the new cross-border payments service.

How to Get a Loan with Bad Credit (The Global Dispatch), Rated: B

If your bank does not agree to your request, start exploring alternative lenders. Do not limit your options to institutions. Your friends or family members can lend you the cash you need to handle an emergency. Peer to peer lending is a great alternative to banks, which allows you to borrow from individuals instead of institutions.

You can easily access a quick loan with bad credit online if you have a stable and verifiable source of income. Online lenders run your credit history but will approve your loan request with proof that you can repay in time. In most cases, the lenders offer payday loans that fall due on your next payday. You must be careful when applying for a personal loan online. Most of the search results you will get are from marketing companies and not direct lenders.

Australia

TSYS’ ProPay Sets Up Shop In Australia (PYMNTS), Rated: A

TSYS’ merchant services company ProPay is expanding into new territory.

The company announced in a press release this week that ProPay has launched in Australia, bringing small- and medium-sized businesses (SMBs) there to its merchant acquiring payment network and enabling them to efficiently accept card payments. The solution is built for direct-selling companies, micro merchants, distributors and payment facilitators.

Australian Government Agencies Flagged For Company Card Fraud (PYMNTS), Rated: A

Australian government agencies are reportedly plagued by company card fraud and misuse, according to new analysis from media company Fairfax Media. By certain accounts, some agencies are seeing more than $100,000 in misspend.

Fairfax analysts found an array of instances in which government purchasing cards were used for personal use, including one that attempted to use a Weather Bureau card for a transaction surpassing $1,000, an Able Seaman who repaid nearly $2,350 after misusing a card and one employee at the Foreign Affairs department who was fired after spending more than $7,000 on the department’s credit card, The Sydney Morning Herald reported.

The ABS had 156 cases of inappropriate spend on its cards, Fairfax found, valuing more than $43,000 in misspend.

India

P2P lenders seek clarity from RBI on appointment of trustee (Livemint), Rated: AAA

Peer-to-peer lending (P2P) platforms in India have requested the Reserve Bank of India (RBI) to allow non-bank trust companies to act as trustees for fund transfers between the participants—investors and borrowers—on their platforms.

“It took us six months to get a trustee. Most of the bank promoted trustees were unwilling to come on board as the industry is nascent,” said Mukesh Bubna, founder and chief executive at Monexo Innovations Ltd, a Mumbai-based P2P platform.

“This creates a monopoly. A limited number of trustees managing transactions for multiple P2P firms may lead to conflict of interest and also a higher fee being charged by the trustees for managing the escrow accounts,” said Raghavendra Pratap Singh, co-founder at i2iFunding.com, a Noida-based P2P platform.

So far, the firms have informally reached out to the regulator, said two people close to the development. They requested anonymity. They are expected to send formal feedback to the regulator soon.

Email sent to RBI did not elicit any response.

Why RBI should ease regulations for P2P lenders (VC Circle), Rated: A

For the sake of brevity, below are summarised certain key issues of the P2P directions after taking into consideration various arguments in the central bank’s consultation paper:

  1. P2P entities as NBFCs
  2. Ambiguous definition of P2P lending – The term “or otherwise” in the definition does not clarify whether P2P lending is restricted only to online platforms.
  3. Net-owned fund and leverage ratio – The RBI in its directions stated that any NBFC-P2P platform needs to have net-owned funds of more than Rs 2 crore or as is prescribed by the central bank.
  4. Limit on lending – However, the P2P directions state that loans are subject to a cap of Rs 10,00,000.
  5. Exempting non-institutional lenders from regulation
  6. Are NBFC-P2Ps intermediaries for banks?

How tech has relaxed Mumbai’s monopoly on finance (India Times), Rated: AAA

Six months after he founded payment gateway company Razorpay in 2013, Harshil Mathur was looking to shift his headquarters from Jaipur. Of his three options — Delhi, Mumbai or Bengaluru, Mathur chose the tech hub of Bengaluru over the financial capital, Mumbai.

Source: Times of India

With the rise of tech startups that focus on financial services, the traditional banking landscape is transforming — and Mumbai, Delhi-NCR and Bengaluru are competing to become the country’s fintech capital. Mumbai is still the financial capital as it is home to major banks and financial institutions, but it is technology that is becoming integral to finance.

Source: Times of India

Watch out for these 5 fintech platforms to revolutionise business in India (Business Standard), Rated: B

A marketplace lending platform in India, Rubique empowers individuals and SMBs with an easy and smoother access to across a wide range of loan, credit card, and products.

LoanTap is a fintech platform delivering flexible EMI free loan products to salaried professionals.

India’s largest peer to peer lending website, Faircent is a platform where people who have spare money, use the means of lending it directly as a form of loan, thereby eliminating intermediaries and their margins.

Having started as an online mobile recharge and bill payments app. Paytm in a short span of time has scaled to over 250 million registered users.

CreditMantri is a multi-services platform that helps borrowers secure loans from its partner financiers.

Asia

A new generation of HNWIs spur shift in investment (Asia Asset), Rated: AAA

HNWIs’ wealth growth remains led by Asia, with ongoing gains from an increasingly affluent middle class, enhanced productivity, and property price gains.

As the largest HNWI market, the US has been the beneficiary of a sustained rally in the equities market, driven by capital inflow and currency appreciation. The recent resurgence in mergers and acquisitions and initial public offerings is also driving wealth growth.

By comparison, Europe remains beset by low yields and flagging economic growth, characterised predominantly by inherited wealth and ‘old money’.

Research from around 940 Asian shows a clear shift towards engagement of financial investment professionals over self-management.

Also notable is the shift in allocation from domestic to international equities. In 2013, there was a 60:40 split favouring domestic equities, but this has reversed to favour international stocks through to 2017.

HSBC, with US$112 billion of private bank client assets under management (AUM) in its core Hong Kong and Singapore markets, is building upon its existing investment platform and network as a new entrant to the Australian market as of November 2016.

Fintech Start-Up fidentiaX Introduces World’s 1st Marketplace for Tradable Insurance Policies (PR Newswire), Rated: A

Fintech start-up fidentiaX is in the developmental phase of creating the world’s first marketplace for tradable insurance policies by disrupting the status quo by empowering policyholders to monetise policies on the blockchain. fidentiaX will also be setting up fidentiaX Open Source Foundation (fSOF) to proliferate the embracing of blockchain technology for the insurance industry.

In 2016 alone, the total market size for insurance premiums in the 40 OECD reporting countries was estimated to be in the north of $3.86 trillion dollars and Asia is projected to the be fastest-growing market for life insurance with an estimated real annual compounded growth rate of 10.2%.

fidentiaX’s marketplace will be a membership-based ecosystem focusing on the key stakeholders and providing the following services:

  • Policy ledger – Break traditional reliance on intermediaries by creating a digital ledger for policyholders.
  • Trustless Marketplace – Provides a platform for buyers and sellers to connect and trade policies via the blockchain.
Middle East

Kuwaiti Fintech Startup Ajar Online Closes Second Investment Round Led by BECO Capital (Albawaba), Rated: AAA

Ajar Online, a fintech startup based in Kuwait, closed a second investment in a round led by Dubai-based venture firm BECO Capital, followed by an investment from Sharq Ventures, since late 2016.

The service allows tenants to pay their rent online, at anytime and anywhere via SMS and email in less than 60 seconds. Simplifying the rent collection process for landlords and providing efficient property management tools to save time, reduce cost and take the right decisions.

Africa

Discovery Gets Go-ahead to Operate a Bank (Tech Financials), Rated: AAA

The South African Registrar of Banks has given the go-ahead for Discovery, South Africa’s medical scheme operator and financial services group, to operate a retail bank.

The firm announced on Monday that NewDisc Limited (to be renamed Discovery Bank Limited) has been granted a banking licence in South Africa by the Registrar in terms of Section 17(1) of the Banks Act.

The company plans to operate a retail bank to be known as Discovery Bank by 2018.

Authors:

George Popescu
Allen Taylor