Thursday August 15 2019, Weekly News Digest

Germany yield curve

News Comments Today’s main news: Prosper reports Q2 results. Figure to raise $1B. Funding Circle shares rise. RateSetter to stress test provision fund. LendInvest raises 200M GBP. Two more Chinese P2P firms shut down. N26 eyes IPO. Today’s main analysis: Gen Z’s credit market activity. Today’s thought-provoking articles: Radius Bank’s rebranding to banking as a […]

The post Thursday August 15 2019, Weekly News Digest appeared first on Lending Times.

Germany yield curve

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Prosper Reports Second Quarter 2019 Financial Results (Business Wire), Rated: AAA

Prosper, a peer-to-peer lending platform connecting borrowers and investors, today reported financial results for the second quarter of 2019. Personal loan originations increased 27% compared to the first quarter of 2019, and the company has now generated positive adjusted EBITDA in eight out of the last nine quarters.

Financial summary:

  • Total Net Revenue, which includes the non-cash impact related to warrants to purchase preferred stock, increased to $42.9 million in Q2 2019 compared to $31.7 million in Q2 2018.
  • Core Revenue(1), which excludes the non-cash impact related to warrants to purchase preferred stock, decreased to $50.7 million in Q2 2019 compared to $52.3 million in Q2 2018.
  • Net Loss decreased to ($0.6) million in Q2 2019 compared to a Net Loss of ($12.6) million in Q2 2018.
  • Adjusted EBITDA(1) decreased to $5.3 million in Q2 2019 compared to $8.8 million in Q2 2018.

Key Operating and Financial Metrics (Unaudited) (in thousands)

SoFi Co-Founder’s New Startup Aims to Raise Funds at $ 1 Billion (Bloomberg), Rated: AAA

Mike Cagney, the former embattled chief executive officer of Social Finance Inc., is raising more than $100 million for his new startup Figure Technologies Inc. at a $1 billion valuation just less than two years after its founding, according to people familiar with the matter.

San Francisco-based Figure uses blockchain technology to provide home equity loans online in just a few days, with approval happening in minutes. The company made its first loan in 2018, and is on pace to provide more than $80 million in loans this month alone, according to one of these people, who asked not to be named because the details are private.

As Gen Z Comes of Age, Credit Market Activity Shows Significant Growth (TransUnion), Rated: AAA

Gen Z, those individuals born in 1995 or after, increasingly took part in the consumer credit market during the first half of 2019. The newly released Q2 2019 Industry Insights Report from TransUnion (NYSE: TRU) found that growth is coming from the entire Gen Z demographic who are 18 years or older – not just those who became credit eligible for the first time.

Approximately 14 million Gen Z consumers (44% of this group) were carrying a balance as of Q2 2019, up from 11 million in Q2 2018, according to the report. The number of Gen Z consumers who were credit eligible (18 years or older) increased by 4.5 million in the last year, rising to 31.5 million in Q2 2019. Over the next three years, it is anticipated that another 13 million Gen Z consumers will become credit eligible.

Gen Z Consumers Carrying a Balance Rising at High Rates

Credit Product Q2 2019 Q2 2018 YOY Growth %
Auto 4,376,000 3,072,000 42%
Credit Card 7,746,000 5,483,000 41%
Mortgage 319,000 150,000 112%
Personal Loan 746,000 534,000 45%

Credit cards are the most popular product among Gen Z consumers, with 55% carrying a balance—though they still only constitute 5% of the U.S. population carrying card debt. Mortgages had the largest year-over-year growth rate spike with Gen Z consumers (112%), but from a low base. Mortgages are still the credit product Gen Z consumers are least likely to have, with only 0.5% of mortgages held by members of this generation.

The Percentage of Gen Z Consumers Carrying a Credit Balance is Growing (Data as of Q2 2019)

Credit Product Gen Z
(carrying a balance)
All Generations
(carrying a balance)
Gen Z
Percentage
Auto 4,376,000 86,064,000 5.1%
Credit Card 7,746,000 148,141,000 5.2%
Mortgage 319,000 68,368,000 0.5%
Personal Loan 746,000 19,556,000 3.8%

Q2 2019 Credit Card Trends

 Credit Card Lending Metric Q2 2019 Q2 2018 Q2 2017 Q2 2016
 Number of Credit Cards 437.1 million 420.0 million 409.8 million 391.0 million
Borrower-Level Delinquency Rate (90+ DPD) 1.71% 1.53% 1.46% 1.29%
Average Debt Per Borrower $5,645 $5,543 $5,422 $5,247
Prior Quarter Originations* 15.3 million 14.5 million 15.0 million 15.3 million
Average New Account Credit Lines* $5,773 $5,649 $5,817 $5,466

See TransUnions infographic here.

Atlanta-Based LendingPoint #17 on Inc. 500 List of Fastest Growing Private Companies in the USA (The Daily Times), Rated: A

Inc. Magazine today ranked commerce platform LendingPoint No. 17 on its 37th annual Inc. 5000, the most prestigious ranking of the nation’s fastest-growing private companies. LendingPoint joins companies such as Microsoft, Dell, Pandora, Timberland, LinkedIn, Yelp, Zillow, and many other well-known names who gained their first national exposure as honorees on the Inc. 5000. LendingPoint has hit successive funding records year-over-year and is on pace to reach $100 million per month in loan originations by the end of 2019.

Fintech Firm OppLoans Named to Inc. 500 for Fourth Consecutive Year (Globe Newswire), Rated: A

OppLoans has been named to Inc. magazine’s prestigious 2019 Inc. 500 list for the fourth year in a row. Only four companies on this year’s list, including OppLoans, have placed on the Inc. 500 at least four or more times. With a three-year annual revenue growth of 1,435%, OppLoans placed #321 on the annual ranking of the fastest-growing companies in the U.S., 19 spots higher than the firm placed in 2018. OppLoans has achieved rankings of #340 (2018), #219 (2017) and #445 (2016).

FINICITY TO POWER DIGITAL SOLUTIONS FOR EMPLOYER STUDENT LOAN CONTRIBUTIONS (Finicity), Rated: A

Finicity, a provider of real-time financial data access and insights, announced today the rollout of its Student Loan Account Verification product, which will simplify employer benefit repayment programs, where employers are looking to contribute to or help repay employee’s student loans.

Fannie, Freddie to Consider Alternatives to FICO Scores (WSJ), Rated: A

One firm’s dominance over the credit scores used to vet many U.S. mortgages is getting a shake-up.

Fannie Mae and Freddie Mac, two mortgage-finance firms that back nearly half of U.S. mortgages, will have to consider credit-score alternatives to Fair Isaac Corp.’s FICO score when determining a mortgage applicant’s creditworthiness, under a new rule issued on Tuesday by the mortgage-finance giants’ federal overseer.

Zoca Loans Review: Installment Loans for Bad Credit Borrowers (Moneycheck), Rated: A

By going through a simple online application process, you have the chance to obtain between $300 and $1,000 – all of which can be funded the very same day.

HSBC launched a digital lending platform for online personal loans (Business Insider), Rated: A

HSBC USA partnered with Amount, a tech provider for financial institutions, to launch a digital lending platform that streamlines online personal loan applications. Consumers can evaluate loan options, submit applications online, and receive a credit decision within minutes.

HSBC will initially lend up to $30,000 with terms ranging from two to five years and it says funds will be available as quickly as the next day. The bank will charge fixed monthly payments starting 50 days after customers receive the loan. Amount’s platform — which has cumulatively originated $6 billion in loans to 800,000 customers — has been customized to HSBC’s preferences, including its proprietary risk models.

Source: Business Insider Intelligence

Virtual Bank Aims to be Primary Account Engine Behind Fintech Brands (The Financial Brand), Rated: AAA

It’s Time For Regulators To Expand Opportunities For Smaller Investors (Forbes), Rated: A

In the past decade we’ve seen a new financial movement take shape: a focus on giving more investors a seat at the table. More and more people and organizations are realizing that investors of all income levels and backgrounds could (and should) have the opportunity to access more asset classes. In this technology-enabled age of access, data and transparency in investing, there is an opportunity to update our laws to ensure that smaller investors are not excluded from the opportunity to create wealth — opportunities that have emerged under the financial ethos of fintech: crowdfunding, peer-to-peer, financial literacy and inclusion.

Former Coinbase CTO Balaji Srinivasan Joins DeFi Blockchain Project Findora (Yahoo! Finance), Rated: B

Balaji Srinivasan, the former CTO of Coinbase, has just joined decentralized finance blockchain project Findora.

Tricolor Launches New, Affordable Auto Insurance for Low Income, Credit Invisible Consumers (Globe Newswire), Rated: B

Tricolor, the used vehicle retailer focusing on the sale and financing of vehicles to the Hispanic consumer, today unveiled a groundbreaking new affordable auto insurance option for low-income and credit invisible customers through its affiliate company Tricolor Insurance. After testing the product earlier this year, Tricolor will begin rolling out the new insurance offering throughout all of its markets in Texas and California.

Artivest Achieves Critical Platform Momentum, Announces Executive Leadership Appointment (Yahoo! Finance), Rated: B

To date in 2019, Artivest, a multi-billion-dollar alternative investment platform, has achieved exponential organic growth across nearly every aspect of the business, greater than any previous full calendar year in the company’s history. The firm has attracted more new investors, allocations, investment managers, and—most importantly, in regard to how the wealth management industry gauges the success of digital platforms—has surpassed $1 billion in new investments transacted online by high-net-worth investors into private funds, at low minimums.

Netflix alum Steve Swasey to lead communications at Healthline Media (MMM-Online), Rated: B

Healthline Media has hired Steve Swasey as VP of communications, a newly created role at the health-focused publishing company.

In the first half of 2016, he worked at online lending marketplace Lending Club as SVP of corporate communications.

United Kingdom

Funding Circle Shares Rise on Positive Report (Crowdfund Insider), Rated: AAA

Last week, online lender Funding Circle (LSE:FCH) released its 6-month report and the shares have responded positively to the numbers. Six-month Revenue was reported at £81.4 million versus H1 2018 at £63.0 million – up 29%. Loans under management rose 37% to £3.54 billion and originations jumped 14% to £1.19 billion.

Funding Circle went public in 2018 priced at 440 pence per share. Funding Circle raised a gross amount of £300 million garnering a market cap of around £1.5 billion.

RateSetter to introduce stress testing to provision fund (P2P Finance News), Rated: AAA

RATESETTER is planning to introduce stress testing to its provision fund over the next financial year.

The ‘big three’ peer-to-peer lender’s provision fund is a buffer that protects investors against losses should any of its loans default. Borrowers pay cash into the provision fund in accordance with RateSetter’s assessment of their creditworthiness.

LendInvest Secures £200 Million Investment from the National Australia Bank to Expand Reach in Buy-to-Let Market (The Fintech Times), Rated: AAA

LendInvest has now raised over £1.8 billion of debt and equity from investors, making LendInvest one of the largest non-bank mortgage lenders in the country.

This new funding expands LendInvest’s capacity to lend in the UK Buy-to-Let market. LendInvest launched its first Buy-to-Let mortgage product in late 2017 after agreeing a substantial funding line with Citigroup. LendInvest has already lent more than £370 million in Buy-to-Let loans and is taking market share in the bank dominated market. In June this year, LendInvest also become the UK’s first Fintech business to securitise its own portfolio of assets worth £259 million, which received a AAA rating from Moody’s and Fitch.

SME online fashion retailers face barriers to innovation, Klarna (Retail Tech Innovation Hub), Rated: A

Small online fashion retailers in the UK are open to embracing innovative technologies, but various challenges are preventing widespread adoption, according to research by Klarna.

In terms of challenges, 53% said the cost of introducing flexible payment options was the biggest barrier to adoption.

Source: Klarna

SME online retailers look to overcome barriers to realise innovation ambitions (Retail Times), Rated: A

The research  conducted across 100 UK SME decision makers at online retailers in 2019 — shows the UK’s SMEs understand the need to embrace flexibility and innovation. Over the next 12 months they plan to prioritise investing in flexible payment options (49%) and e-commerce capabilities (48%) to meet consumer demand for a frictionless shopping experience.

Tandem Bank leverages Open Banking to offer competitive mortgages (Finextra), Rated: A

Ex-RateSetter business finance head launches new P2P platform (P2P Finance News), Rated: A

RATESETTER alumni Brian Cartwright has launched new alternative property lender Nexa Finance, with a focus on the East Midlands.

Cartwright (pictured), managing director at Nexa, previously worked as head of business finance at ‘big three’ peer-to-peer lender RateSetter.

His new venture, which bills itself as a regionally-focused business lender, aims to connect East Midlands-based small- and medium-sized enterprise (SME) property developers and house builders with funders.

Personal Finance Society publishes P2P guide following uptick in queries (P2P Finance News), Rated: A

MEMBERS of the Personal Finance Society (PFS) have been showing an increased interest in peer-to-peer lending, leading the PFS to produce its own ‘good practice’ guide to P2P.

The financial planning trade body has partnered with Octopus Investments to create the guide, which tells advisers that recommending P2P products could help them to increase their own assets under management, adding that “for suitable clients, it could prove a useful vehicle for excess cash holdings which may currently fall outside of the adviser’s view.”

Atom Bank, iwoca, Modulr Finance, & Currencycloud, All Benefit from BCR Grant (Crowdfund Insider), Rated: A

The BCR has awarded £10 million each to the following platforms:

I Never Got Paid From Winning Wonga Fantasy League in 2010 (TechRound), Rated: A

I worked for Wonga.com in 2010, back when you couldn’t even go to the bathroom without hearing their jingle on the radio. Like most offices today, everyone put in £10 to play in the office fantasy league and with Van Persie and Rooney in their prime, this was my year.

After doing some calculations, my £160 owed to me in 2010 would now be worth £2,752. (based on £24 per month for 9 years)

Without the price cap, you have 4 of those years at £30 per month. Making the total figure £3,040.

But again, I am being kind. This does not include default charges of £25 per month for every missed payment.

China

Shanghai-based Zendai closes two P2P units worth US$ 1.4 billion as Beijing intensifies crackdown (SCMP), Rated: AAA

Zendai Group, a closely held private investment company in Shanghai, abruptly shut down two peer-to-peer lending units valued at 10 billion yuan (US$1.4 billion), as Chinese financial regulators ratchet up measures to clean an industry fraught with frauds and defaults.

Another Peer-to-Peer Lending Platform Stumbles (Caixin Global), Rated: A

Laocaibao, a peer-to-peer (P2P) lending platform ultimately owned by private conglomerate Zendai Group, is the latest casualty of the troubles that have engulfed the scandal-hit industry over the past three years.

Laocaibao has stopped providing loans and Zendai’s investment and consulting arm, which directed clients to the platform, has fired employees, according to statements from the companies and investigations by Caixin.

Peer to Peer Lender Fincera Targeted by Local Chinese Government in Demand to Cease Lending Operations (Crowdfund Insider), Rated: A

Fincera Inc. (OTCQB: YUANF), a China-based peer to peer lending platform providing access to capital for SMEs, has become the target of a local government attempt to shut down P2P lenders.

According to a note from Fincera, the Hebei provincial government, where Fincera is based, has requested that Fincera “cease P2P business operations.”

Fincera Announces Intention to Sell Kaiyuan Finance Center (Benzinga), Rated: A

To protect the interests of all its stakeholders-investors, borrowers, brokers, and employees, Fincera has announced its intent to sell the Kaiyuan Finance Center, which has an estimated valued of over RMB4.0 billion.

Fincera is the largest Hebei-based company operating in the peer-to-peer lending industry, comprising over 90% of the province’s market with approximately RMB9.0 billion in unpaid principal balance.

Fincera Inc. (“Fincera” or the “Company”) (OTCQB:YUANF), a provider of internet-based financing and ecommerce services for small and medium-sized businesses (“SMBs”) and individuals in China, today announced that businesses operating within the P2P (peer-to-peer) lending industry in Hebei province, including the Company, have received requests by the Hebei provincial government to cease P2P business operations. The Company vehemently disagrees with the request and is taking steps to protect its many stakeholders, including initiating the process of moving its business registration to Beijing where local regulators are supportive of the P2P industry.

Senmiao Technology Announces Unaudited Financial Results for First Quarter of Fiscal Year 2020 (Yahoo! Finance), Rated: A

Senmiao Technology Limited  (AIHS) (“Senmiao”), a provider of automobile transaction and related services and an operator of an online lending marketplace connecting Chinese investors with individual and small-to-medium-sized enterprise borrowers in China, today announced its unaudited financial results for the quarter ended June 30, 2019.

First Quarter of Fiscal 2020 Highlights

  • Total revenues increased by 3,975% year-over-year to $5,094,440 from $125,026
  • Gross profit increased by 758% year-over-year to $1,072,128 from $125,026
  • Loss per share decreased by 50% year-over -year to $0.02 from $0.04
European Union

German mobile bank N26 eyes eventual IPO, CEO tells newspaper (Reuters), Rated: AAA

Berlin-based digital bank N26 is planning an eventual stock exchange listing, its chief executive has told a German newspaper.

Google exec joins N26 as chief banking officer (Finextra), Rated: B

N26 today announced the appointment of Thomas Grosse as Chief Banking Officer. The newly introduced role is yet another step towards realizing N26’s ambition to become the first truly global and fully digital retail bank. As Chief Banking Officer, Thomas will oversee the set-up of regulated N26 banks and bank partnerships within the N26 Group, thus ensuring the highest standards in product, processes and customer experience across all markets.

Thomas will begin his new role at N26 this October, reporting directly to N26’s co-founder and CFO, Maximilian Tayenthal.

European Fintechs Escape Troubles Afflicting Established Banks (Bloomberg), Rated: AAA

Its latest fundraising gave Klarna, which facilitates online installment payments, a $5.5 billion valuation. European fintech companies raised $3.3 billion in venture capital in the first half of 2019, up from $1.9 billion in the same period last year, according to data compiled by CB Insights. In contrast, an index of European Union banks has dropped 39% the past 18 months.

FlixMobility and Klarna raise a lot of money (Tech.eu), Rated: A

Tech.eu Podcast hosted by Natalie Novick and Andrii Degeler is a show in which we discuss some of the most interesting stories from the European technology scene and interview leading entrepreneurs and investors from across the region.

EstateGuru Seeks to Carve Out €5 Billion of European Real Estate Financing Market (Crowdfund Insider), Rated: A

EstateGuru, a crowdfunding platform based in Estonia, is out with a release predicting it will claim €3-5 billion of the European real estate financing by 2025

EstateGuru adds that approximately 70% of SMEs lack access to credit and this is a major constraint to their growth. The company claims that 12% of all loans are set to be financed by alternative providers, including crowdfunding platforms, by 2025 as it appears to be interested in expanding into other financing verticals.

Barclays releases £100,000 for unsecured SME lending through app and online banking (Finextra), Rated: A

New research released by Barclays has revealed that over half of the UK’s small and medium enterprises (SMEs) have woken up at night with a new business idea (57 per cent), while the most popular time for an idea to be dreamt up is between 2-3 am (28 per cent).

Analysis revealed that almost half (48 per cent) of SMEs said that they are more creative at night, with over two fifths saying they are more productive outside of 9 – 5 working hours and keep a note pad and pen by their bed so they can jot down ideas. Half attributed this to having extra time to think away from daytime pressures.

In a High Street banking first, Barclays has launched £100,000 unsecured lending for SMEs on its award winning app and online banking platform, with thousands of SMEs set to benefit from access to faster finance.

German Fintech Finleap Announces New Business Unit “Finleap Connect” (Crowdfund Insider), Rated: B

FinLeap, the fintech start-up platform behind Germany’s SolarisBank, announced on Wednesday the launch of its new business unit, FinLeap Connect. According to FinLeap, the fintech platforms finreach solutions and infinitec solutions will become part of this business unit.

International

Global Yields Crash, GSKY for sale, LC earnings (PeerIQ), Rated: AAA

Today, more than $15 Tn in sovereign debt trades at a negative yield. In Germany, for instance, bond investors have moved from charging 75 bps last year to a willingness to pay for the privilege of providing < 0% money for 10 years.

Source: PeerIQ

GreenSky shares sank ~37% after a strong earnings report was paired with news that the marketplace was exploring a potential sale or merger.

Alternative Data: The Great Equalizer To Lending Inequalities? (Forbes), Rated: AAA

Alternative data has come into the spotlight in financial services, and it presages a significant shift in credit availability for unbanked and underbanked consumers. There are about 

Celsius Network Announces Increased Accessibility To Crypto-Backed Loans with Updated Terms for Borrowers (Business Wire), Rated: A

Celsius Network (work/), the industry-leading cryptocurrency platform, announces updated terms for borrowers aiming to provide millions of users with increased accessibility to low-interest crypto-backed loans. In addition, Celsius has reduced its minimum requirement for loan requests to $1,500. Recently Celsius announced it will expand its lending operations throughout Europe.

The latest updates to Celsius Networks lending service include:

  • Lowered minimum requirement for loan requests from $3,000 to $1,500
  • Up to 30% discount for CEL token holders paying loan interest in CEL with yearly rates as low as 3.47%
  • Borrowers can request a loan in USD or supported stablecoins
  • Loans are issued the same day
  • Members can apply through the Celsius mobile app or on the Celsius Network website

ONTOLOGY BLOCKCHAIN HIGH FIVES WITH DEFI (ICO Examiner), Rated: B

Ontology (ONT), a project offering linking and bridging solutions for multiple blockchains, has announced five new partnerships with companies operating in various geographical locations within the decentralised finance (DeFi) arena.

The latest handful of businesses to be attracted to Ontology’s framework of compatibility are Hong Kong registered Babel Finance, USA-focused crypto loan specialists SALT Lending, cryptocurrency services provider LendChain, Hong Kong-based Fountain Financial, and Chinese trading platform HOX.

Australia

CBA FY19 results a mixed bag, digital metrics positive and Klarna will be a hit (Verdict), Rated: AAA

CBA FY19 underlying net profit for the year to end June falls by 5% to A$8.49bn ($5.75bn). The bank’s overall results do not quite match analyst forecasts.  But there is a strong argument that in all the circumstances the results represent a resilient full fiscal.

Release of the CBA FY19 earnings also serve to highlight the bank’s success in upping its digital strategy.

Operating income is 2% lower on margin pressure.

Net interest income is down by 1.2% on lower retail mortgages margins and higher funding costs.

Business lending increases by 4% while retail mortgage growth is also strong delivering 4% volume growth for the year.

India

Faircent raises fresh funding from investors led by Das Capital & Gunosy Capital (India Times), Rated: AAA

Faircent.com, a P2P lending company, has recently raised capital in a funding round. The latest funding, led by Singapore-based Das Capital and Gunosy Capital, also saw participation by existing investors Starharbor Asia Pte Ltd, and M&S Partners Pte Ltd (Sin Growth Partner Pte Ltd).

Keep retail indulgence in check (livemint), Rated: A

Overspending is a big problem for many. “They buy things they don’t need with money they don’t have to impress people they don’t like. Not passing a judgement here, but money does buy some kind of happiness for many,” said Rachit Chawla, chief executive officer, Finway, a registered non-banking financial company (NBFC). 

Payday loans, digital lending platforms, and P2P lending have evolved, so has the penetration of credit card, personal loans, and the like. At a behavioural level, de-linking debt with shame has also made it easy for people to borrow.

Asia

Hexindai-backed Musketeer Completes Registration for Its P2P Platform in Indonesia (Yahoo! Finance), Rated: AAA

Hexindai Inc. (HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, today announced that its invested Indonesian online lending platform, Musketeer Group Inc. (“Musketeer”), has completed registration for its peer-to-peer (P2P) lending platform with the Indonesian Financial Services Authority (OJK).

Musketeer’s P2P platform, PT Technology Indonesia Sentosa, is among the early batch of lending companies in Indonesia that have registered with OJK.

Philippines to Relaunch OF Bank to Create Digital-only Bank (Regulation Asia), Rated: A

The Overseas Filipino Bank was launched in January to cater to overseas Filipino workers, who will more easily be able to access digital-only services.

Latin America

Fintech Debt Investors Follow Equity Dollars Into Latin America (Forbes), Rated: AAA

Venture capital investments in LatAm startups quadrupled to a record $2 billion in 2018 from $500 million in 2016, according to an annual review by the 

Financial report for the second quarter and six months period 2019 (Yahoo! Finance), Rated: B

  • VEF made a follow-on investment in FinanZero, a Brazilian online consumer loan marketplace, who closed a Series B investment round of SEK 100 mln (USD 10.5 mln).

Authors:

George Popescu
Allen Taylor

The post Thursday August 15 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 21 2019, Weekly News Digest

fintechs and personal loans

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

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

fintechs and personal loans

News Comments

United States

United Kingdom

China/Hong Kong

Other

News Summary

United States

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

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

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

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

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

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

Source: TransUnion, PeerIQ

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How Far are Most in their Digital Transformation Strategy?

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

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

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

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

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

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

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

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

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

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

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

Source:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: Innovate Finance

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

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

Having raised £100m from an unnamed “major institution”, CrowdProperty will use the funds to expand the number of property projects it backs over the next 12-24 months.

OakNorth reports £33.9m profit for 2018 and commits to donating 1% of all future net profit to charitable causes and social entrepreneurship (OakNorth Email), Rated: A

IFISA Guide: SME loans (P2P Finance News), Rated: A

Ablrate’s IFISA offers returns ranging between 10 and 15 per cent, enabling investors to fund asset-backed loans to UK businesses.

ArchOver’s IFISA enables investors to fund secured business loans and enjoy tax-free returns of up to 10 per cent per year.

MoneyThing’s IFISA is one of the highest-paying tax wrappers that invests in secured business loans, offering annual returns of up to  13 per cent.

Assetz Capital

Returns vary depending on the account, going from 4.1 per cent to 6.25 per cent on its auto-invest products, and up to 15.5 per cent with its manual lending option.

Funding Circle

The minimum investment in this flexible IFISA is £1,000.

LendingCrowd

The Growth and Income ISAs automatically spread investors’ money across a range of loans and have variable target rates of six per cent and 5.6 per cent, respectively.

Specialist lender funding will be the key issue for 2019 – LendInvest (Mortgage Solutions), Rated: A

The situation is a big reminder to lenders that it is crucial to concentrate on building a diverse range of funding sources, rather than just one single route.

It’s something that we have put a lot of work into at LendInvest, as it allows us to lend with confidence, knowing that the funds we have promised to a borrower will be there.

The firm sent out an email on 24 January 2019 suggesting that recipients should have a “stockpile ready” as some believe Brexit “could affect the amount of food available,” while offering a £5 promotional discount on a loan.

Why investors are fleeing the ‘fear and greed’ of stock markets for peer-to-peer loans (The Telegraph), Rated: A

Investors are ditching the stock market in favour of bundled loans sold by fledgling platforms that are yet to be tested by a financial crisis.

The top 20 UK places for high net worth earners (Citywire), Rated: B

Nearly two fifths of the UK’s top earners now live in London, according to research from peer to peer lending platform easyMoney.

China/Hong Kong

China’s Online Lender Dianrong Blames Chinese Regime for its Woes (NTD), Rated: AAA

Dianrong, one of China’s biggest peer-to-peer (P2P) lenders, is laying off staff and shutting stores. The company blamed the Chinese regime for its troubles and said the absence of clear-cut policies was proving to be a heavy burden.

Dianrong shut down 60 of its 90 offline stores and laid off an estimated 2,000 employees, Reuters reported in early March.

Pintec’s Stock Rises on Steady Results During Quarter of IPO (Capital Watch), Rated: A

Pintec Technology Holdings Ltd. (Nasdaq: PT) gained 15 cents in trading by midday after reporting a slight increase in revenue and narrowed losses for the fourth quarter.

The Beijing-based tech platform facilitating financial services said on Wednesday that its revenue in the three months through December was $32.9 million, 2 percent higher year-over-year. Its net loss was $1.2 million, a 10 percent decrease from the same period of 2017. Loss per share was 1 cent.

For the full year, Pintec reported revenue of $153.1 million, 85 percent higher from the preceding 12 months, and profit of $1.1 million in contrast to a loss in 2017.

KKR Raising First Asia Real Estate Fund, Targeting $ 1.5 Billion (U.S. News), Rated: A

Global investment powerhouse KKR & Co Inc is raising its first Asia-focused real estate fund, targeting $1.5 billion as it looks to deepen its real estate portfolio in the region, said people with knowledge of the matter.

Investment firms raised $18.6 billion in 26 Asia-focused real estate funds last year, the highest since 2008, according to data provider Preqin. KKR’s U.S.-based rival Blackstone Group raised the region’s biggest real estate fund last year at $7.1 billion.

China and distressed debt top DB’s hedge funds tastes test (City Wire Selector), Rated: A

Alternative investors are increasingly drawn to Asian hedge funds and distressed strategies, according to the latest Alternative Investment Survey from Deutsche Bank.

The 2019 survey canvassed the views of 425 asset allocators running $1.7 trillion of hedge fund assets in 28 countries.

European Union

Finnest and Invesdor Merge to Combine Debt and Equity Operations in Europe (Crowdfund Insider), Rated: AAA

Finnest, an Austria based Fintech that provides debt capital to small and medium-sized firms, has announced a planned merger with Finland based Invesdor Oy. The newly formed company will see the combination of a leading Nordic equity crowdfunding platform and a top online lender serving the DACH region (Deutschland, Austria, Switzerland). The two companies will now be able to offer a full stack of debt and equity services and investments across Northern Europe as well as more numerous options for investors.

Invesdor claims over 50,000 registered users as well as a MiFID II license for 28 European countries – the first crowdfunding platform to receive approval. Invesdor reports investors, both institutional and individual, from over 150 different countries. Invesdor currently offers a unique financing portfolio in the market, from equity to loans and bonds to IPOs.

Bitbond to Work with BitGo for Germany’s First Security Token Offering (Bitbond), Rated: A

Bitbond has launched Germany’s first Security Token Offering with a BaFin approved Prospectus and will be using  BitGo’s Business Wallet. The STO has a hard cap of EUR 100 million (~USD 113 million) and will conclude in May. Thousands of investors have already joined to take advantage of early bird discounts.

The STO marks a significant milestone for the crypto asset industry, not only because it has an approved prospectus, but also because it offers tokenized debt with a predetermined maturity. Bitbond Token (BB1) holders will receive quarterly and annual payments for 10 years, after which Bitbond will buy back the token at its original value of EUR 1 per token.

India

Top 5 sectors that need upskilling: How to stay relevant in age of disruption? (Indian Express), Rated: A

The banking sector is witnessing a massive growth owing to the launch of connected products and services, business innovation and the rise of the middle class along with the emergence of new fintech areas of mobile payments, digital wallets and P2P lending. Technologies such as chatbots, blockchains and automation through robotics powered by AI are transforming the sector.

CRYPTO EXCHANGE COINDCX RAISES SEED FUNDING FROM BAIN CAPITAL VENTURES (Coin News Span), Rated: B

Bengaluru-based client leasing startup RentoMojo has raised $10 Mn serial B funding from Bain Capital Ventures and Renaud Laplanche.

Asia

Look out for 2019’s top 7 lending startups (e27), Rated: AAA

As of 2019, there are still 2.45 billion underbanked and unbanked people in the world. The more innovative lending companies there are, the faster this market will be covered and served.

October.eu (formerly Lendix) is an innovative, easy-to-use, and intuitive peer-to-peer platform for lending and investing.

The Dharma team works on a platform that lets businesses build lending products on the Ethereum blockchain.

The governing idea of Kabbage is that funding shouldn’t be complicated for businesses. So, the company makes an effort to provide entrepreneurs with up to US$250,000 in loans for which you can allegedly qualify for in just 10 minutes or at most, a day.

Founded in 2014, TurnKey Lender has already become the market’s leading intelligent all-in-one lending automation platform.

The name SoFi comes from social finance and it’s another great example of a successful peer-to-peer lending operation. Founded in 2011, the company is already a huge market player with US$30 billion worth of funded loans and 600 thousand members.

Affirm goes a different route than most alternative lenders. The idea behind it is enabling in-house financing for retail businesses. So, the store’s customers get an instant loan with zero to 30 per cent interest rates.

With quite a unique approach, Lendio offers small business an opportunity to get services and credit products from lenders with the best conditions. It’s a marketplace with more than 75 lenders on board.

Vietnam is the region’s fintech hub (The ASEAN Post), Rated: AAA

Vietnam’s strong economic growth in recent years has led to the flourishing of the nation’s digital economy. The country’s economy in 2017 was deemed to be one of the best performing in the region. Its economy saw a 6.8 percent increase in gross domestic product (GDP) – higher than the government’s initial target of 6.7 percent – making it one of the fastest growing economies in Southeast Asia.

Vietnam currently has 54 percent of its population on the internet and the number is expected to grow further in the coming years.

Data from Vietnam Briefing shows that 39,580 start-ups entered the Vietnamese market in just the first four months of 2017, a 14 percent increase from the first quarter of 2016. Within the start-up scene, the fintech sector has become the most attractive for investments, receiving US$129 million in 2016.

Travelstop Targets Fintech SMEs with Business Travel Management Platform (Fintech News), Rated: A

Co-founded by former Expedia employees, Singapore-based Travelstop is a modern, artificial intelligence (AI) powered SaaS platform that simplifies business travel, automates expense reporting for businesses in Asia, and offers insights to business owners.

The platform is quickly gaining traction from the region’s startups and fintech community, helping small and medium-sized enterprises (SMEs) and high-growth organizations including Funding Societies, Fintech News Network, RedDoorz, S P Jain School of Global Management and Dot Property better to manage their business travels.

Asia has the largest share of mobile internet traffic, with 61% of its population using mobile devices to go online.

How Ovo Has Grown to be Indonesia’s Largest Digital Payments Platform (Entrepreneur), Rated: A

After online stores, Indonesia’s leading digital payments platform Ovo has been making strides into offline stores, increasing the number of merchants that accept the payment method.

OVO has reportedly acquired local peer-to-peer lending company Taralite, a move that will pave the way for OVO to branch out into the lending business which is seen to be a potential profit-generator for the company.

TurnKey Lender Opens a New Office in Kuala Lumpur (Digital Journal), Rated: A

TurnKey Lender, a provider of intelligent lending automation, decision management, and risk mitigation solutions, announces the opening of a new office in the capital of Malaysia, Kuala Lumpur. Its main goal will be to physically represent TurnKey Lender and support the company’s operations in Asia.

With internet penetration at 85.7% in 2018, the country is perfectly positioned for the rapid growth of alternative lending initiatives in areas like peer-to-peer lending and in-house financing.

Golden Gate Ventures ties up with Hanwha to invest in Asian startups (SDF-KH), Rated: B

Golden Gate and Hanwha will focus on startups that are raising fund for ‘Series B’ stage.

Singapore-based Golden Gate Ventures confirmed on Tuesday that it has teamed up with South Korea-based Hanwha Asset Management to invest in Southeast Asian technology startups.

Authors:

George Popescu
Allen Taylor

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

Thursday November 29 2018, Daily News Digest

GlobalData

News Comments Today’s main news: MPOWER Financing raises $110M. Funding Circle, BBB partner on SME lending. Zopa sells batch of defaulted loans. Yirendai misses earnings estimates by .17 EPS. RateSetter aiming to be Australia’s biggest consumer loans provider. Revolut greenlighted to expand into Singapore, Japan. Today’s main analysis: Is UK headed for credit card crisis? Today’s thought-provoking articles: 37.4% of purchase […]

GlobalData

News Comments

United States

United Kingdom

Southeast Asia

Other

News Summary

United States

MPOWER Financing raises USD110 million in latest funding round (Private Equity Wire) Rated: AAA

MPOWER Financing, a fintech company providing educational loans to high-potential international and DACA students, has completed its largest funding round to-date with USD110 million in new financing for students enrolling in major US universities.

This latest round, led by Gray Matters Capital and Community Investment Management (CIM), will be used to support new product growth and technology enhancements as well as to finance MPOWER Financing’s expanding student loan portfolio.

“We co-created a unique type of debt with Community Investment Management’s leadership team. This USD100 million is just the beginning of MPOWER’s Capital Markets roadmap,” says Mike Davis, MPOWER Financing Chief Investment Officer and co-founder.

37.4% of Purchase Borrowers Received  Mortgage Rates Under 5% Last Week (LendingTree), Rated: AAA

  • For 30-year fixed-rate mortgages, 37.4% of purchase borrowers received offers under 5%, up from 29.4% the prior week. A year ago, 98.1% of purchase offers were under 5%.
  • Across all 30-year fixed-rate mortgage purchase applications on LendingTree, the most common interest rate was 4.875%, offered to 21.3% of borrowers.
  • 27.9% of 30-year fixed-rate mortgage refinance borrowers received offers under 5%, up from 20.1% the prior week. A year ago, 98.1% of refinance offers were under 5%.
  • Across all 30-year fixed-rate mortgage refinance applications, the most common interest rate was 5.00%, offered to 22.3% of borrowers.


5 Technologies And Trends Changing The Credit Industry (ValueWalk), Rated: AAA

New tools and advancements in the credit industry are transforming the way consumers borrow cash. Before, loan options were limited to government entities (Pag-IBIG and SSS), banks, credit cards, cash advance from credit cards, and loan sharks. These financial institutions (apart from loan sharks) are heavily regulated, but with a roster of new methods offered today, loaning has become more accessible and borrower-friendly.

The Future of Fintech Video Series: Intuit Consumer Group (ATM Marketplace), Rated: A

Intuit Consumer Group’s Varun Krishna gives some background on the company’s latest partnerships with Lending club and Wealthfront. This interview is part of a video series, “The Future of Fintech,” produced by Mobile Payments Today and powered by Galileo Processing.

MPL Loan Performance Monitor (as of August 2018) (PeerIQ), Rated: A

Highlights from the August 2018 MPL Loan Performance Monitor :

  • Our MPL Loan Performance Monitor tracks the delinquency rates, cumulative losses, cumulative prepays and transition matrices using public marketplace lending data that comprises unsecured consumer loans originated by Marketplace Lenders.
  • Delinquencies on the 2017 vintage in the first 18 months are lower than those on the 2015 and 2016 vintages with lenders having tightened underwriting standards.
  • Cumulative loss rates on the 2017 vintage are lower than those on the 2015 and 2016 vintages. Cumulative losses on the 2015-2017 vintages are outpacing those on earlier vintages.
  • Cumulative prepayments have picked up, with the 2017 vintage paying significantly faster than all prior vintages.

Lendio Recognized as a Great Place to Work for Third Consecutive Year (Lendio), Rated: A

Lendio was certified for the third consecutive year as a great workplace by the independent analysts at Great Place to Work. Lendio earned this credential based on extensive ratings provided by its employees in anonymous surveys. A summary of these ratings can be found at 

Four Major Fintech Trends In The Self-Directed IRA Industry (Forbes), Rated: A

Fintech has helped significantly increase the number of investment options available to self-directed IRA investments. From online crowdfunding platforms to peer-to-peer lending portals, as well as cryptocurrency and digital asset exchanges, new financial technology has helped self-directed IRA investors gain access to new and exciting investment opportunities in an efficient and secure investment environment.

There has never been a better time to find a bad credit mortgage (Mortgage Introducer), Rated: A

Research conducted by the Online Mortgage Adviser website has discovered that up to 70% of potential mortgage applicants fail to approach lenders or other service providers because they mistakenly believe that their personal circumstances or financial histories will preclude them from being considered.

The study, which was based upon a survey of over 2,000 people nationwide, found that almost 50% of respondents believed that a low credit score, or evidence of previous issues, would automatically disqualify their application. 33% and 15% (respectively) felt that a zero-hour contract or payday loan would prevent them from achieving a mortgage loan.

stREITwise Launches Invest for a Cause (GlobeNewswire), Rated: A

stREITwise, an investment vehicle that makes commercial real estate investments accessible to everyone, is announcing the second annual Invest for a Cause holiday campaign. Through December 31st, their executive team will personally make a donation equal to 2% of any new investment to a non-profit of the investor’s choice.

2018’s Top Takeaways (Commercial Property Executive), Rated: A

But perhaps the biggest catchphrase of 2018 represents the rapidly evolving technologies that are benefiting—and some even say revolutionizing—the commercial real estate industry. So-called “proptech” includes a range of building performance solutions, along with financial benefits like the developing blockchain process protections and growth of the still fledging real estate crowdfunding business. (Our most recent discussions include our Mission: Success profile of MetaProp’s founders and the CFO Corner column “3 Ways to Leverage Fintech.”)

Small Banks Join Forces To Bring Fintech To Customers (Forbes), Rated: A

The move is driven in part by a desire to innovate and part survival. It comes as millennials are bypassing branches and traditional banking services for the fintech offerings at an increasing rate. Take Quicken Loans, the Detroit-based lender that operates Rocket Mortgage it’s completely digital platform, for one glaring example.

Stocks Hold Onto Gains Ahead of Powell Speech (Nasdaq) Rated: A

Counterstrike: The market looks like it might rise into the G-20 meeting that begins on Friday, so Jeremy thought this was a good time to pick up a couple names. Firstly, the editor added a 6% allocation in online marketplace Lending Tree (TREE), which has been halved from its 2018 highs. But it could be poised for a sharp move higher as a strong quarterly report has exposed its oversold position.

Online Lender Settles With FTC Over Refinancing Misrepresentations (Manatt), Rated: A

Issuing a warning to other lenders, the Federal Trade Commission (FTC) reached a deal with an online lender over charges the company violated the FTC Act by making false statements about student loan refinancing.

Velocity Commercial Capital Chooses SS&C for its Finance Transformation (SS&C), Rated: A

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that Velocity Commercial Capital, LLC (‘Velocity’) has signed a multi-year agreement with SS&C Primatics’ EVOLV platform. EVOLV will help Velocity transform their financial operations and capitalize on growth opportunities in a controlled environment. Velocity, a direct portfolio lender, provides investment property loans for residential 1-4, multi-family, mixed-use and small balance commercial properties.

Guaranteed Rate Expands Its Footprint in Hawaii (GlobeNewswire), Rated: B

Guaranteed Rate, Inc. (“Guaranteed Rate”), one of the largest independent retail mortgage companies in the United States, today announced that it will acquire certain assets of Honolulu HomeLoans (HHL) and Hawaii Lending Alliance (HLA), growing its existing Guaranteed Rate presence in the Hawaii market and adding an experienced team of mortgage professionals.

BFS Capital Appoints Mark Ruddock as Chief Executive Officer (Citizen Tribune), Rated: B

BFS Capital announced today the appointment of Mark Ruddock as Chief Executive Officer, effective immediately. He will also join the company’s Board of Directors.

United Kingdom

Funding Circle and BBB announce £150m SME lending partnership (Bridging & Commercial), Rated: AAA

The British Business Bank (BBB) has committed to lend up to £150m to UK small businesses through Funding Circle.

The transaction has been made under the bank’s ENABLE Funding programme and is expected to support the growth of over 2,000 UK companies.

The new facility will provide senior financing to a transaction with the Funding Circle SME Income Fund Limited, the publicly traded fund that lends exclusively through Funding Circle.

Zopa sells batch of defaulted loans to boost investor returns (P2P Finance News), Rated: AAA

ZOPA has sold a batch of defaulted loans to a debt collection agency, which it says will enable a faster and higher recovery for investors.

The peer-to-peer consumer lender informed its investors last week about the debt sale. It said that it has received upfront payment for the loans in question and will pass on the proceeds to investors within the next couple of weeks.

The UK could be headed for a credit card crisis (GlobalData Email), Rated: AAA

Almost three quarters of retail consumers in the UK (those with liquid assets between £0 and £3,918) do not pay off their credit card balances in full each month, says 

Britain’s creative industries break the £100 billion barrier (Gov.UK), Rated: A

The UK’s roaring creative industries made a record contribution to the economy in 2017, smashing through the £100 billion mark.

Its value of the creative industries to the UK is up from £94.8 billion in 2016 to £101.5 billion, and has grown at nearly twice the rate of the economy since 2010, according to figures published today by the Department for Digital, Media, Culture and Sport (DCMS).

It continues to perform highly and over the last two months British tech firms Monzo, Farfetch and Funding Circle have surpassed the $1 billion mark, meaning they are now so-called ‘unicorns’.

China

Yirendai (YRD) Posts Quarterly Earnings Results, Misses Estimates By $ 0.17 EPS (Fairfield Current), Rated: AAA

Yirendai (NYSE:YRD) announced its earnings results on Monday, November 12th. The technology company reported $0.35 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.52 by ($0.17), Briefing.com reports. The company had revenue of $163.20 million for the quarter, compared to the consensus estimate of $179.48 million. Yirendai had a return on equity of 40.40% and a net margin of 18.56%. The company’s revenue was down 28.3% compared to the same quarter last year. During the same period last year, the firm posted $0.74 EPS.

Source: Fairfield Current

Senmiao Technology (AIHS) Acquires 60% Equity Interest in Chinese Automobile Financial Leasing (StreetInsider), Rated: AAA

Senmiao Technology Limited (NASDAQ: AIHS), an online lending platform in China connecting investors with individual and small-to-medium-sized enterprise borrowers and creditors, today announced that it entered into an Investment and Equity Transfer Agreement (the “Agreement”) to acquire a 60% equity interest in Hunan Ruixi Financial Leasing Co., Ltd. (“Ruixi”), a Chinese licensed financial leasing company focusing on the auto industry with registered capital of $10 million. In exchange for the 60% equity interest in Ruixi from its three existing shareholders, Senmiao has agreed to contribute $6 million in registered capital to Ruixi. The acquisition closed on November 22, 2018.

Beyond The Sugar Rush: Strategic Stimulus For Chinese Stocks (Seeking Alpha), Rated: A

Private companies and even individuals have taken full advantage of loose credit conditions. Rising corporate bond defaults and nonperforming loans, as well as the recent collapse of hundreds of peer-to-peer lending platforms, suggest that at least in some cases, the money came too easily. Concerned global equities investors are already applying a substantial discount to Chinese stocks because of debt issues.

European Union

‘Inconsistent and punitive’ employee ownership rules are damaging Europe’s start-ups, say tech bosses (Telegraph), Rated: AAA

A group of thirty European tech start-ups have warned that the European Union’s “inconsistent and often punitive rules” employee ownership rules are hindering their businesses.

The entrepreneurs, which include the founders and chief executives of iZettleTransferWise and Delivery Hero, stated that laws across the continent make it costly for employers to give out stock options to employees.

The warning to EU policymakers, in an open letter, comes as research by venture capitalists Index Ventures finds that employees own only 10 per cent of late-stage start-ups in Europe, because of limitations brought about by regulations.  However in the US it is 20 per cent.

Online Lender October Officially Launches in the Netherlands (Crowdfund Insider), Rated: A

Online lender October (formerly Lendix) has launched in the Netherlands. Alongside this expansion, the Paris based October is providing SME financing in France, Spain, and Italy.

According to a note from October, SMEs may apply for loans ranging from €30,000 and up to €3.5 million.

Solactive Launches New Sharing Economy Index (Mondo Visione), Rated: B

Solactive is pleased to announce the launch of the Solactive Sharing Economy Index. It tracks companies active in the Sharing Economy, and other modern economies such as on-demand and subscription.

Formerly being attributed to open-source communities, the umbrella term “Sharing Economy“, nowadays reflects various economic activities such as peer-to-peer sharing of goods and services.

International

Zero Fees and Interest-free Loans in Decentralized Credit Networks (NewsBTC), Rated: AAA

Money lending is the core principle of any functioning economy. Decentralized credit networks which have recently seen a rapid increase in popularity promise easy and global access to credit and loans for businesses and the public by immediately connecting borrowers and lenders on the platform. Users of IOU credit networks can even take advantage of interest-free loans and zero fees.

Australia

RateSetter putting pieces in place to be Australia’s biggest consumer loans provider (Finder), Rated: AAA

When RateSetter started operations in Australia four years ago, the peer-to-peer (P2P) lending industry was in its infancy and its risk-based, investor-funded loan was seen as an alternative. But a lot can happen in four years. Today, major banks such as CommBank, HSBC and Citi use risk-based pricing, once only the domain of P2P lenders, while the formerly “alternative” RateSetter funded over $25 million in consumer loans this month.

Foggo said the lender has been “determined” to focus on specific products. One of its new ones is a renewable energy loan which it launched two and a half years ago.

India

Suspension of Aadhaar verification to hit lending of small fintech players (The Hindu Business Line), Rated: AAA

Fintech players, especially online lenders in the personal and consumer loans segment, are likely to face slowdown in business following the Supreme Court order that prevents private companies from seeking Aadhaar data for e-KYC and e-signatures.

Asia

Fintech firm Revolut gets green light to expand to Japan and Singapore (CNBC), Rated: AAA

British mobile bank Revolut has obtained licenses to operate in Japan and Singapore as it readies an expansion into Asia.

The London-based financial technology firm said Thursday that it had acquired a remittance license from the Monetary Authority of Singapore and full authorization from Japan’s Financial Services Agency.

It said Thursday that it intends to launch its platform in the Asia-Pacific (APAC) region in the first quarter of 2019, and is looking to select Singapore to host its APAC headquarters.

Online lending platform Oriente announces 5m initial funding for Southeast Asia (kr-Asia), Rated: A

Hong Kong-based online lender Oriente today announced a US$105 million initial round of financing to scale its business across Southeast Asia. The fintech startup already runs lending platforms in the Philippines and Indonesia and will launch in Vietnam soon.

Tapping into digital economy (The Jakarta Post), Rated: A

According to the latest survey by Google and Singapore’s Temasek Holdings, Indonesia’s digital economy is projected to triple to US$100 billion by 2025 from $27 billion this year, given the mushrooming of the country’s online marketplaces. The projection is not an exaggeration as indicated by the huge transaction values at a recent online shopping festival, dubbed a warm-up for the National Online Shopping Day in mid-December.

P2P lending transactions total Rp 13.8 trillion in first three quarters (The Jakarta Post), Rated: A

According to Financial Services Authority (OJK) data, transactions through peer to peer (P2P) lending totaled Rp 13.8 trillion (US$951 million) in the first three quarters of 2018, with the non-performing loan (NPL) rate recorded at 1.2 percent.

P2P lending transactions in 2018 have increased drastically compared to the last two years, with the OJK recording Rp 284 billion in transactions in December 2016 and Rp 2.56 trillion in December 2017.

Who’s afraid of peer-to-peer lending? (Bangkok Post), Rated: A

The recent announcement by the Bank of Thailand on peer-to-peer (P2P) lending rules represents a significant paradigm shift. If all goes to plan, by early next year Thailand will be among the few Asian countries, most notably China and Indonesia, to legalise this match-making platform between lenders and borrowers.

Bukalapak eyes investment products, P2P lending to cash in on fintech opportunity (Deal Street Asia), Rated: B

Indonesia’s online marketplace unicorn Bukalapak is planning to cast a wider net in the country’s booming fintech market. The company is looking at launching new investment products and enter new verticles such as P2P lending and remittances, co-founder and president Muhamad Fajrin Rasyid told this portal.

Authors:

George Popescu
Allen Taylor

Monday March 19 2018, Daily News Digest

Monday March 19 2018, Daily News Digest

News Comments Today’s main news: Robinhood valuation tops $5B. MarketInvoice reaches 2B GBP milestone. Lendy reaches 20K investors. Senmiao Technology prices IPO at low end. Merchant Advance Capital closes $30M debt facility. Today’s main analysis: CLUB 2018-NP1 Deep Dive. Today’s thought-provoking articles: Helena, Montana wants to be tech talent destination. More SMEs plan to apply for finance. The third age of credit. Australian […]

Monday March 19 2018, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

Australia

Other

News Summary

United States

Valuation for Robinhood, Maker of App That Offers Free Stock Trades, Tops $ 5 Billion (Wall Street Journal), Rated: AAA

Robinhood Markets Inc. is set to be valued at about $5.6 billion in a new funding round, according to people familiar with the matter, a fourfold increase in just one year that reflects the stock-trading app’s soaring popularity among millennials.

The Silicon Valley startup is in the final stages of securing around $350 million from a group of investors led by Russian firm DST Global, according to the people familiar with the fundraising.

Helena, Montana wants to be a new destination for engineers after landing a SoFi office (VentureBeat), Rated: AAA

With a population of slightly more than 31,000, Helena is one of the country’s smallest state capitals. It’s not surprising, given that the entire state of Montana is home to only 1 million people. In addition to being tiny, Helena is also incredibly remote. The closest large metropolitan areas are Salt Lake City and Seattle, which are both nearly 500 miles away.

Those qualities shouldn’t make Helena a candidate to house a large engineering team for one of Silicon Valley’s most valuable unicorns. However, SoFi, the online personal finance company focusing on student loans, mortgages, and personal loans, has multiple locations in the city that together house roughly 140 employees — many of them programmers and engineers, as I learned on a trip last month to Helena.

Amazon’s footprint grows, CLUB 2018-NP1 Deep Dive (Peer IQ), Rated: AAA

Amazon continued its foray into the lending sector this week by offering a a robo advisor. Amazon is partnering with banks where they lack a clear regulatory swim lane.

CLUB 2018-NP1

Source: Peer IQ

This is the largest near-prime deal that has been issued so far. The deal has 8,237 loans more than the CLUB 2017-NP2 deal and the average loan balance is $422 lower. The weighted average FICO on LC’s near-prime deals is 639, lower than that on AVNT 2017-B.

Source: Peer IQ

Kushners’ Cadre Startup Benefited From Misleading Rent Filings (Bloomberg), Rated: A

Cadre owned about 60 percent of three rent-regulated buildings in Queens sold by Kushner Cos. in April 2017. The $59 million price tag was an 80 percent premium over what they paid in January 2015, property records in New York show. It was the first known deal that Cadre, then a fledgling company, took from purchase to sale, and the high rate of return in a short time was touted as a proof-of-concept for its web-based investing platform.

Kushner Cos., Cadre’s operating partner at the properties, told the city the buildings had no rent-regulated tenants when applying for construction permits to update the buildings in 2015 but tax records filed later showed almost 100 such residents, according to a report by the Associated Press. The number of tenants fell precipitously prior to the buildings’ sale, the wire service reported.

 

U.S. Appeals Court Voids Obama-Era ‘Fiduciary Rule’(Financial Advisor), Rated A

A federal appeals court on Thursday voided the U.S. Department of Labor’s “fiduciary rule,” an Obama administration measure adopted in 2016 meant to curb conflicts of interest among providers of financial advice to Americans planning for retirement.

Study Finds Link Between Payday Loans, Poor Health (LendEDU), Rated: A

A new study has disclosed that almost 40 percent of people seeking short-term, high-interest loans from lenders such as payday loan companies are likely to report their health as either fair or poor.

Short-term loans have grown from a $10 billion industry in 1998 to $48 billion in 2011, reported The Guardian. Interest is extremely high on these loans—up to 600 percent per year—and the funds, typically utilized by low-income borrowers, are used for necessities including car repairs, food, and rent, according to the study.

Short-term loans have grown from a $10 billion industry in 1998 to $48 billion in 2011, reported The Guardian.

How Citizens Bank is reaching millennials (Tearsheet), Rated: A

Citizens Bank is selling millennials a comfortable, enjoyable life of travel, adventure and everything short of avocado toast in an effort to grow its student loan refinancing business.

At the end of 2017, Citizens’ student loan book was valued at $8.1 billion, according to the company. It’s a space which startups have forged a path, with CommonBond funding $1.5 billion loans since it was founded in 2012, and the value of SoFi’s student loan originations at $14 billion. Still, banks have unique advantages when it comes to the student loan refinance market, like a strong resource base to invest in marketing, and a book of business based on deposit products that lowers their costs.

Goldman Sachs launches in-house incubator (Tearsheet), Rated: A

Goldman Sachs has launched an in-house incubator to allow its employees to bring innovative ideas and solutions to life, and to Goldman.

GS Accelerate is accepting applications for “ideas that can deliver best-in-class solutions for our clients, take Goldman Sachs into new business areas, manage risk and tackle inefficiencies in our operations,” according to an executive memo sent to staff Thursday and shared with Tearsheet. Goldman declined to comment further.

Developing The Application of Anti-fraud Technology to Enhance Financial Risk Management (Lendit), Rated: A

With the maturity of the underlying technologies such as artificial intelligence and blockchain, the manual driven anti-fraud method will be closely integrated with artificial intelligence driven anti-fraud method by incorporating the online and offline scenarios, constantly and quickly generating a surge in innovative strategies from the previous unidirectional and inefficient strategy.

The current application of anti-fraud technology is a rule engine driven approach, that is, it can detect the problems when the frauds are triggered but cannot predict and warn in the early stage. By accumulating and studying the data of fraudulent activities and developing the new cyber technology, the application of anti-fraud technology is expected to be turn from passive investigation into active pre-warning to build up the first firewall of anti-fraud. Adding intervention techniques out of the rule engine, such as neural network technology, will help to improve the pre-warning mechanism.

Bank Fintech Partnership More Than Just a Good Idea (Lendit), Rated: A

Bank customers demand highly functioning and seamless digital experiences.  They expect easy loan application processes that minimize data entry and turn around decision and funding in session-time.  They expect configurable communications, inbound and outbound, via the channel of their choosing and on the cadence of their choosing.  They expect to conduct every possible interaction, including account opening, without being require to walk into a branch.  They crave AI-driven advice and AI-fueled interaction channels.  With mobile payment processes, remote deposit capture, 24/7 access and service, and high degrees of security all to boot.

While it is possible to develop these capabilities in house, the best solutions already exist, developed by fintech providers who are ready to partner with the bank.

Blake Cohen of SALT Lending (Lending Academy), Rated: A

In this podcast you will learn:

  • How Blake first got involved with blockchain and bitcoin.
  • The conversation that led to the founding of SALT Lending.
  • The outcome of his conversations with banks around accepting bitcoin as collateral.
  • How they discovered there would be demand for their proposed lending service.
  • Why they decided to sell discounted memberships instead of doing an ICO.
  • Why anybody who is holding cryptocurrency instantly understands their value proposition.
  • How much membership tokens, known as SALT tokens, cost.
  • The total amount of loan demand they have received to date.
  • How the process works when taking out a loan.
  • The loan products they are offering today.
  • How their margin calls work.
  • Why they do no credit checks on their borrowers.
  • How loans are getting funded today and their plans for the future here.
  • How the volatility in the price of cryptocurrencies has impacted their business.
  • The vision for the future of SALT lending.

Best Online Checking Accounts (Benzinga), Rated: A

Online checking accounts are different from regular checking accounts at your bank/credit union and the number one reason they’re different is that they’re from banks that forgo a traditional branch structure. Ally Bank is a great example of this type of online-only option.

Best for no monthly fees: Capital One 360 Online Checking Account
Best for hIgh APY: Consumers Credit Union Free Rewards Checking
Best for no deposit minimum: Ally Interest Checking
Best business online checking account: EverBank Business Checking

Lendio announces South Charlotte franchise (Bankless Times), Rated: B

Small business loan marketplace Lendio this week opened a franchise in Charlotte, North Carolina. Through the Lendio franchise program, Chris Cronk will help local businesses in the community apply for loans, review their options and secure funding.

OnDeck Names Diamond Janitorial Services as Small Business Of the Month (PR Newwire), Rated: B

OnDeck (NYSE: ONDK), the leader in online lending to small business, today announced that Diamond Janitorial Services has been selected as the OnDeck Small Business of the Month for March, 2018.

 

Government Lifts Prohibition on Payday Lending Chain’s Partnership With National Banks (WSJ), Rated: B

The Office of the Comptroller of the Currency has lifted a prohibition on partnerships between payday loan chain ACE Cash Express Inc. and national banks, as the agency’s Trump-appointed head, Joseph Otting, is encouraging financial institutions to offer more small-dollar consumer loans.

The OCC rescinded a 2002 consent order that restricted ACE’s ability to offer payday loans funded by nationally chartered banks.

Private equity firms buying real estate data and software provider EDR for $ 205 million (Housingwire), Rated: B

Two prominent private equity firms are buying EDR, a provider of real estate data and software-as-a-service, for $205 million, the companies announced earlier this week.

The buyers for EDR, which provides property due-diligence and risk management technology and information, are Silver Lake and Battery Ventures.

United Kingdom

MarketInvoice reaches £2b milestone (Finextra), Rated: AAA

Business finance company MarketInvoice has today reached the landmark milestone of having advanced £2b worth of invoice finance and business loans to UK companies.

The first £1b was achieved after 5 years of trading and the second £1b took just 14 months to reach. During this brief time, two new products were launched (confidential invoice discounting and business loans). These helped MarketInvoice provide funding worth £714.2m to business in 2017 up from £410.4m in 2016 (up 74%).

Lendy Announces 20,000 Investor Milestone & Repays Five Loans in February 2018 (Crowdfund Insider), Rated: AAA

Lendy announced this week it has attracted its 20,000th investor to its peer-to-peer lending platform. This news comes just days after the online lender announced it repaid five loans in February 2018.

According to P2P Finance News, the lender reported that about 7,000 new investors have joined its platform during the past year, with growth in the under 40 age group. Lendy also revealed that investors have secured more than £37 million in interest since its platform’s launch in 2012, with over  £373 million in total has been lent through the platform.

More SMEs planning to apply for finance, research shows (London School of Business & Finance), Rated: AAA

A study from market research agency BDRC has shown that the number of SMEs planning to apply for finance increased in 2017, rising from 10% in the first quarter to 14% in the last three months of the year.  

The company’s SME Finance Monitor surveyed 132,000 businesses and also found that more SMEs are becoming aware of peer-to-peer (P2P) lending, with more than 30% being aware of this type of finance in the final quarter of 2017.

The research showed an increase in awareness of P2P lending combined with crowdfunding, with 46% being aware of these types of finance, up from 36% at the start of last year.

Nearly half (48%) of larger businesses with 50-249 employees were found to be aware of P2P lending, compared to 32% of solo operations and 31% of smaller businesses with fewer than ten employees.

Get ready for UK fintech’s Big IPO Year (AltFiNews), Rated: A

Funding Circle, one of the most notable UK ‘unicorns’ (a tech firm with a valuation north of £1bn), is the latest firm to make headlines for a soon-expected IPO. It also recently enlisted Goldman Sachs and Morgan Stanley to help with the process, according to media reports. Many other notable digital lending platforms such as Zopa and LendInvest as well as banking challengers such as Monzo have also dropped hints that they aspire to move into public spheres eventually, if not soon.

Peer-to-peer lender offers rare secured retail bond paying 5.4pc (The Telegraph), Rated: A

peer-to-peer lender is launching a secured retail bond paying 5.375pc in interest annually, until it matures in 2023. The company, LendInvest, is a service that allows individuals to loan their money to finance property projects.

IF Isas: a bold way to build your capital (Money Week), Rated: A

This time last year, for example, none of the big three peer-to-peer (P2P) lending platforms – Zopa, RateSetter, and Funding Circle – had IF Isas available. But the situation has improved, and now more than 30 platforms offer them.

More than 75% of those surveyed by specialist researcher AltFi Data shortly before Christmas said they weren’t aware of the products.

If you want to lend to consumers, you could try RateSetter, which offers up to 4.9% a year over five years. A far riskier option is FundingSecure. This platform offers 12% or more on sub-prime asset-backed lending – P2P pawnbroking, effectively.

On the lending to business side, Funding Circle offers 7.2%, but is currently only open to existing customers. Assetz Capital offers from 3.75% to 15% over various terms. Crowdstacker offers up to 7%. The UK Bond Network allows you to invest from £5,000 in individual corporate bonds from listed and unlisted businesses, returning an average of 11.1%. And if you prefer to invest in renewable-energy projects, Abundance Investments offers up to 15%.

China

Micro-cap Chinese fintech Senmiao Technology prices $ 12 million IPO at $ 4 low end (Nasdaq), Rated: AAA

Senmiao Technology, an early-stage Chinese marketplace for peer-to-peer lending, raised $12 million by offering 3.0 million shares at $4.00, the low end of the range of $4.00 to $4.50.

At $4.00, the company commands an IPO market cap of $102 million and an enterprise value of $90 million. During fiscal 2017, it booked $0.2 million in revenue and a net loss of $0.7 million.

China: WeiyangX Fintech Review (Crowdfund Insider), Rated: A

Ant Financial Buys Shares in Telenor Microfinance Bank

On March 13, Pakistan’s Telenor Group announced a strategic partnership with China’s Ant Financial Services Group. According to the agreement, Ant Financial will acquire 45% of Telenor Microcredit Bank, at the value of US $184.5 million. According to the agreement, Ant Financial will acquire 45% of Telenor Microcredit Bank, at the value of US $184.5 million.  

JD Finance Starts a New 13 Billion-Yuan Fundraising

On March 13, JD Financial announced that the group has initiated a new 13 billion yuan fundraising round. The new funding raised will be mainly utilized for financial licenses acquisition, technology research and marketing. It is said that CICC and COFCO shall lead this investment with a share of 10-billion-yuan. The leading investors will sign the agreements with JD Finance by the end of March and close their investment by the end of April.

Statistics shows that the valuation of JD Finance has reached 120-billion-yuan before this planned investment and is expected to reach between 165 and 190-billion-yuan after that.

 

 

Weekly Review (Investors Business Daily), Rated: A

China-based online lender Qudian (QD) reported $229.2 million in revenue and diluted EPS of 26 cents. ADT posted a surprise adjusted loss of 6 cents a share on 6% sales growth to $1.11 billion. On a GAAP basis, the home security company earned 99 cents a share.

European Union

Real estate crowdfunding in Finland: the drivers of campaign success and the industry development (Theseus.fi), Rated: B

The objectives of the study were to examine the phenomenon of real estate crowdfunding in Finland, to explain the success or failure of RECF campaigns, to understand the drivers behind industry development and to assess its future potential. The data was collected from the two main sources: interviews with the experts and the information from the websites of the crowdfunding platforms.

International

The Third Age of credit (TechCrunch), Rated: AAA

Today, buoyed by a plethora of technologies and a golden age for abundant data, creditis undergoing its most radical change yet. But it is being pulled in many directions by competing forces, each with their own vision for the future.

The last year has witnessed a Cambrian explosion in credit innovation, unveiling hundreds of possibilities for the future of credit. Unlike the last two ages, credit of the future will be personal, predictive, self-correcting and universal.

What does a new world of credit look like?

Thousands of startups are all finding new ways to apply this same concept of statistical modeling. WeLab in Hong Kong and Kreditech in Germany, for example, use up to 20,000 points of alternative data to process loans (WeLab has provided $28 billion in credit in four years). mPesa and Branch in Kenya provide developing-world credit using mobile data, Lendabledoes so using psychographic data and Koradoes this on blockchain. Young peer-to-peer lending startups like Funding CircleLending Club and Lufax have originated more than $100 billion in loans using algorithmic underwriting.

Victory Park Capital partners IFC on fintech fund for emerging markets (Finextra), Rated: A

Victory Park Capital (“VPC”), a leading investment firm focused on providing flexible debt and opportunistic equity solutions worldwide, announced today that it has launched a new fund together with the International Finance Corporation (“IFC”), a member of the World Bank Group.

The new fund will invest in financial technology companies in emerging markets. The partnership aims to improve access to debt capital for financial technology companies that lend to small businesses and consumers in emerging markets.

Accountants Look to Artificial Intelligence As Clients Get More Demanding (Sanvada), Rated: A

Accountancy firms to be particular are busy investing in AI and automation initiatives to help staffs with mundane tasks. The need is so open in some situations that businesses fail to deliver their mandate to customers.

In the research, close to 50 percent of the accountants said they would like to automate number crunching, diary management and the most time consuming of all: data entry. On the same note, three quarter showed great attraction to AI, to have it assist time-consuming responsibilities and automate involving tasks with recurring patterns.

Accounting firms have been in the front line of using cloud computing and Sage report stated that 67 percent of respondents now link their success to the use of cloud tech.

Finastra named provider of best payments solution by Global Finance (Vested for Finastra Email), Rated: B

Finastra has been named ‘best payment solutions provider’ by Global Finance, as part of the publication’s Best Treasury & Cash Management Banks and Providers for 2018, announced in the March issue of the magazine.

Finastra received the award based on its best-of-breed payments and financial messaging solutions that enable financial institutions and their business customers to manage cash, process payments, exchange information and transfer funds cost-effectively, securely and reliably within and across national boundaries.

Australia

SMEs shun banks, turn to fintechs (Financial Standard), Rated: AAA

The proportion of SMEs planning to use banks dropped from 38% to 24% between 2014 and 2018, the Scottish Pacific SME Growth Index shows. It is recalculated every six months.

About half (47.6%) of the 1253 small-to-medium business leaders who had not used non-banking lending options in the last 12 months said they are interested in using alternative financing in the future.

Of the SMEs that used alternative working capital options in 2017, the most popular was debtor finance (77%), followed by merchant cash advances (23%), peer-to-peer lending (10%), crowdfunding (9%) and other online lending (5%).

9 in 10 SMEs say cash flow problems prevented revenue growth (Finder), Rated: A

A new report released this week has revealed the changing state of cash flow, finance and growth for Australian small- to medium-sized enterprises (SMEs). The SME Growth Index, released by working capital provider Scottish Pacific, found that one in five (21.1%) SMEs were unable to take on new work because of cash flow restrictions, and 9 in 10 (92.7%) SMEs said that cash flow restrictions actually prevented them from generating more revenue.

Small business revenue is heavily influenced by the business’ cash flow. Of the 1,253 small business respondents to the Index, only 7.3% said that improved cash flow would not have led to more revenue. The restrictions on revenue due to cash flow has cost the Australian economy $229.8 billion.

FinTech Australia Points to Report that Highlights Growth in Fintech Lenders as Traditional Finance Declines (Crowdfind Insider), Rated: A

FinTech Australia, is highlighting a report this week that points to the decline in traditional fince options (IE Banks) and the ongoing rise in SMEs using Fintech platforms to address their capital needs.

The report is courtesy of the Scottish Pacific SME Growth Index, released every six months, which is based on interviews with 1,253 SMEs across Australia with annual revenues of up to $5 million.

For SMEs with plans to invest in expansion over the next 6 months, 24% say they will fund growth by borrowing from their main relationship bank – continuing a downward trend, and well short of the high of 38% who nominated this option to fund growth in the first round of the Index in September 2014. More than one in five SMEs (22%) plan to use alternatives to their main bank to fund upcoming growth, with 91% relying on their own funds. Of the SMEs that used alternative working capital options in 2017, their funding choices were: debtor finance (used by 77%), merchant cash advances (23%), P2P lending (10%), crowdfunding (9%) and other online lending (5%).

Gen Y advisers shy away from the big banks (Financial Review), Rated: B

Data from consumer information company Adviser Ratings provided exclusively to The Australian Financial Review reveals in the last two years, the non-aligned sector – or what was previously termed the independent space – has seen it attract 70 per cent of all news advisers, compared with 40 per cent previously.

There has also been a 32 per cent increase in the number of Australian Financial Services Licenses (AFSLs) granted by the Australian Securities and Investments Commission. This equates to 400 new licenses in two years. Total adviser numbers have grown 10 per cent, up to 24,777 from 22,612 over that period.

India

Is RBI sleeping over Faircent’s P2P ad that promises huge returns? (MoneyLife), Rated: AAA

An overhyped, front page advertisements in a leading economic daily by Faircent.com, which claims it is India’s largest peer-to-peer (P2P) lending website, is luring people promising returns that are safer than the risky ’Sensex’ — almost like a Ponzi scheme. Shockingly, the company’s business and its puffery does not seem to attract the attention or supervision of any regulator. Not even the Reserve Bank of India (RBI), whose governor recently lamented that his organisation does not have adequate powers over banks — especially public sector banks. So what about finance companies that are regulated by it? The Faircent.com advertisement would give you a clue. The last line of the advertisement, in its fine print carries a disclaimer saying, the “Reserve Bank of India (RBI) should not be held responsible for these claims or promises”.

Movers And Shakers Of The Week [12–17 March 2018] (Inc 42), Rated: B

Online financial services marketplace BankBazaar has appointed Aparna Maheshas the Chief Marketing Officer.

P2P lending company Faircent has roped in Vikas Prasad and Mayank Bishnoi on board its leadership team.  Vikas has joined Faircent as Head – Planning, Processes, and Control, while Mayank has taken over as Head – Customer Experience.

Asia

Genie: the broadest Asian business loans exchange platform (Global Coin Report), Rated: A

The Genie ICO recently hit its soft cap of $5 million, with another $20 million in the pipeline. They had achieved about $2.5million through crowd sale; with the $3million underwritten amount, the current token purchase crosses the soft cap of $5million.

 

The ICO, which started a few weeks ago, finalized on March, 1st. Tokens were for sale at a rate of 0.0025 ETH, with a fundraising goal of 5,000,000 USD that was already met.

INTERVIEW-Indonesian banks will see “more than 12 pct” loan growth in 2018- regulator (Reuters), Rated: A

Indonesian banks will see “more than 12 percent” loan growth in 2018 thanks to a recovering global economy and a pickup in commodity prices, the country’s financial regulator said.

Loan growth in Indonesia has fallen below 10 percent since the start of 2016, compared with more than 20 percent during the commodity boom years before that.

Canada

Merchant Advance Capital Closes $ 30 Million Debt Facility (deBanked), Rated: AAA

Canadian Merchant Advance Capital closed a $30 million debt facility from Comvest Credit Partners today.

“This is giving us significant runway,” Merchant Advance Capital CEO David Gens told deBanked. “For the next 12 months in particular, we’ve got great visibility as far as where our incremental capital is going to come from. This will allow us to focus less on fundraising and more on just building the business.”

Founded in 2010, Merchant Advance Capital offers several small business financing products including fixed term loans and business lines of credit.

Royal Bank of Canada Explores Blockchain to Automate Credit Scores (CoinDesk), Rated: A

The Royal Bank of Canada may be interested in putting credit scores on a blockchain.

In a patent application released Thursday, the bank outlines a platform built on a blockchain that would automatically generate credit ratings using a borrower’s historical and predictive data. The application as described proposes a system that would utilize more data sources than existing credit rating systems, improving the loan process while creating an immutable record.

If a loan application is submitted, the system would automatically determine what sort of loan and creditor would be appropriate before generating a unique smart contract that contains the terms of the loan.

Authors:

George Popescu
Allen Taylor

Thursday February 8 2018, Daily News Digest

LendingTree personal loans

News Comments Today’s main news: RateSetter’s IFISA finally arrives. Renaud Laplanche to keynote at LendItFintech USA 2018. LendingClub makes changes to IRA product. Goldman could be buying Clarity. Today’s main analysis: LendingTree January 2018 Personal Loan Offers Report. LendingTree January 2018 Mortgage Offers Report. Today’s thought-provoking articles: Amsterdam gaining ground on London as Europe’s fintech capital. Senmiao Technologies sets terms […]

LendingTree personal loans

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

MENA

Canada

Bermuda

News Summary

United States

Renaud Laplanche Joins LendItFintech USA 2018 As Keynote Speaker (PR Newswire), Rated: AAA

LendItFintech, the world’s leading event in financial services innovation, today announced that Renaud Laplanche, founder and CEO of Upgrade, Inc., will join the keynote speaker roster for LendItFintech USA 2018. For three days, the world’s most prominent and emerging fintech CEO’s will gather at the Moscone Center to focus on the hot button topics and issues exploring the future of finance.

Laplanche’s keynote speech will focus on his vision for Online Lending 2.0 and in particular how new technology, blockchain, enhanced processes and the combined learnings of the past 10 years have helped make online lending better for consumers and investors alike.

Laplanche will also unveil Upgrade’s next major consumer credit product that industry observers are already touting “the biggest innovation in financial services since the credit card. Also, to illustrate how the Online Lending 2.0 principles help create more value for consumers and enable faster growth while achieving better risk management, compliance and credit performance, Laplanche for the first time, will release metrics about Upgrade exactly one year after its public launch.

Tax Efficient Investing and LendingClub IRA Changes (Lend Academy), Rated: AAA

Tax rates for 2018 start at 10% and go up to 37% for the highest wage earners. It’s important to understand how this ordinary income affects taxes compared to other asset classes like equities.

Let’s assume you decide to invest through a taxable LendingClub account. In a given tax year, you are only allowed to deduct $3,000 in losses against your ordinary income unless you have capital gains to offset the losses.

If you have a sizable investment in LendingClub and have no capital gains you’ll have to carry forward any losses beyond the $3,000 to future years.

LendingClub Offering a Bonus for IRA Investors

After understanding the benefits of investing through an IRA it’s worth mentioning that LendingClub offers bonuses for new accounts. The bonuses range from $25 all of the way up to $3,000 and are available on Traditional IRAs, Roth IRAs, SEP IRAs or SIMPLE IRAs. Below are the bonus amounts in place for 2018.

TaxSlayer Teams Up With Kabbage To Provide Small Businesses Easy Access To Working Capital (PR Newswire), Rated: A

TaxSlayer, a leading online and professional tax and financial technology company, today announced a strategic partnership with Kabbage, Inc., a global technology and data platform powering small business lending. The collaboration offers qualified small business customers hassle-free access to lines of credit up to $250,000 from Kabbage, and exclusive tax resources, including tips, promotions and discounts from TaxSlayer.

TaxSlayer customers will have access to:

  • Lines of credit from Kabbage up to $250,000 for qualified borrowers
  • Promotions from Kabbage, including a $100 gift card after qualification
  • Partner offers through the Kabbage Customer Perks network
  • Tips and insight on small business lending and finance

Kabbage customers will have access to:

  • Small business and personal tax tips from TaxSlayer
  • Market leading tax-filing support from TaxSlayer
  • Unique promotions and discounts from TaxSlayer, including 20 percent off services

LendingTree Personal Loan Offers Report (LendingTree), Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.41% in January.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.41%, a decrease of 13 basis points from the prior month, and 47 basis points from the same period one year ago.
  • At $24,218, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above, was down up 17 basis points ($41) from December, but up over 23% ($5,607) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had APRs of 4.98% on average, and loan amounts of $34,892. A borrower with this APR and loan amount would save $2,896 by consolidating debt with a 10% APR over a three-year term.
Source: LendingTree

Good credit (680 – 719 score): Offered APRs to consumers with a credit score between 680 and 719 averaged 15.79% in January.

  • The average best APR for all borrowers with credit scores of 680 – 719 was 15.79%, down 12 basis points from last month, but up almost 200 basis points from a year earlier.
  • At $15,628, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs increase by 1% ($160) in the last month, but drop by 1.72% ($268) from January 2017.
  • The top 10% of offers, presented to borrowers with the best profiles within the 680 – 719 credit score range, had an average best APR of 7.19%, offered with an average loan amount of $24,130. A borrower with this APR and loan amount would save $3,215 by consolidating debt from a 15% APR over a three-year term.
Source: LendingTree

LendingTree Mortgage Offers Report (LendingTree), Rated: AAA

  • January’s best offers for borrowers with the best profiles had an average APR of 3.93% for conforming 30-year fixed purchase loans, up from 3.80% in December. Refinance loan offers were up 5 bps to 3.75%.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 13 bps to 4.55%. The loan note rate hit the highest since March 2016 at 4.45% and was also up 13 bps from December.
  • Consumers with the highest credit scores (760+) saw offered APRs of 4.41% in January, vs 4.70% for consumers with scores of 680-719. The APR spread of 29 bps between these score ranges was 1 bps narrower than in December but still near the widest since this data series began in April 2016. The spread represents nearly $15,000 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $238,518.
  • Refinance APRs for conforming 30-yr fixed loans were up 15 bps to 4.46%. The credit score bracket spread widened to 25 from 24 bps, amounting to $13,000 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $244,540.
  • Average proposed purchase down payments fell for the first time in 8 months to $63,411.
Source: LendingTree

Apple May use Marcus for Point of Sale Financing (Crowdfund Insider), Rated: A

Indicative of this systemic trend is a report this week in WSJ.com saying Apple may be cutting a deal with Marcus – Goldman Sachs’ vision of the future on online lending.

According to the WSJ report, Goldman may provide Apple with point of sale credit at interest rates far lower than the typical credit card.

“By offering a lower-cost loan, Goldman hopes to siphon off some of that business. Goldman charges 12% interest on its average Marcus loans. Credit cards can charge upward of 20% and carry late fees and other charges. Partnerships with big retailers like Apple are key. They can deliver millions of customers that Goldman would struggle to find on its own.”

Goldman is said close to buying personal-finance startup Clarity (American Banker), Rated: AAA

Goldman Sachs is in discussions to acquire the personal finance startup Clarity Money, with plans to fold it into its Marcus online lender, according to people familiar with the matter.

Robinhood users ramped up deposits during Monday’s market bloodbath (Business Insider), Rated: A

On Monday, the US stock market witnessed its largest point decline ever. The Dow Jones industrial average dropped as much as 1,600 points during Monday trade before closing down 1,175 points. Still, a spokesperson for Robinhood, the California-based brokerage, told Business Insider its users ramped up deposits on its zero-commission stock trading platform.

Venmo monetization may be on the horizon (Business Insider), Rated: A

Source: Business Insider

Venmo alone hit $10.4 billion, about 39% of the P2P total. As P2P surges across the board, it’s helping 

Identity fraud hits all time high with 16.7m US victims in 2017 (Payments Cards and Mobile), Rated: A

The 2018 Identity Fraud Study released by Javelin Strategy & Research, revealed that the number of identity fraud victims increased by 8% (rising to 16.7 million US consumers) in the last year, a record high since Javelin began tracking identity fraud in 2003.

The study found that despite industry efforts to prevent identity fraud, fraudsters successfully adapted to net 1.3 million more victims in 2017, with the amount stolen rising to $16.8 billion.

The 2018 Identity Fraud Study found four significant trends:

  • Record high incidence of identity fraud  In 2017, 6.64% of consumers became victims of identity fraud, an increase of almost 1 million victims from the previous year.
  • Account takeover grew significantly – Account takeover tripled over the past year, reaching a four-year high. Total ATO losses reached $5.1 billion, a 120% increase from 2016.
  • Online shopping presents the greatest fraud opportunity – Card Not Present Fraud is now 81% more likely than point of sale fraud, the greatest gap Javelin has observed.
  • Fraudsters are getting more sophisticated

Nearly half of small businesses plan to invest in cybersecurity in 2018 (AZ Big Media), Rated: A

Half of all U.S. small businesses were breached in 2016, according to 2016 State of SMB Cybersecurity Report. Disruption to normal operating expenses costs an average of $955K, which can be devastating to small business owners.

As part of Kabbage’s ongoing effort to help small businesses to be successful, Kabbage recently surveyed more than 800 customers and nearly half (47 percent) plan to invest in cybersecurity products and services in 2018.

Hackers find value in obtaining employee and customer data, bank account information and/or intellectual property, no matter the size of the business. Today, more than 70 percent of attacks are targeted toward small businesses, largely due to the their beliefs that they won’t be hacked (mostly due to their size).

Virginia consumers to receive $ 2.7 million in relief from settlement with internet lender (WINA), Rated: A

Attorney General Mark R. Herring announced today that more than $2.7 million in relief will be provided to Virginia consumers who took out loans with Internet lender MoneyLion of Virginia LLC-an affiliate of New York based Internet lender MoneyLion, Inc. Attorney General Herring’s settlement with MoneyLion will provide refunds and debt forgiveness to 3,800 consumers as a result of the company’s alleged violations of the Virginia Consumer Protection Act. Since creating a Predatory Lending Unit in his Consumer Protection Section, Attorney General Herring’s Office has recovered more than $25 million in restitution and debt forgiveness for Virginia consumers from online lenders.

The settlement includes the following key terms relating to loans made by MoneyLion during the period in question:

• MoneyLion agrees to provide $359,811.50 in refunds to 1,161 Virginia consumers who paid more than their loan principal plus 12% APR;
• MoneyLion agrees to give up the collection of $2,354,097.05 in illegal interest it charged on loans with 2,639 Virginia consumers;
• A payment to the Commonwealth of $10,000 as a civil penalty for MoneyLion’s alleged violations of the VCPA;
• A payment to the Commonwealth of $20,000 for its costs and fees in investigating MoneyLion’s alleged violations of the VCPA;
• Permanent injunctions preventing MoneyLion from misrepresenting its license status, allowable interest rates, and allowable fees.

Bankrupt Payday Lender Can’t Move CFPB Suit To Texas (Law360), Rated: A

A Montana federal judge refused to transfer a CFPB action alleging Think Finance duped borrowers and used sham tribal payday lenders to collect money it was not owed, finding Tuesday the case need not be moved to where the financial technology company’s Texas bankruptcy is.

U.S. District Judge Brian M. Morris said the state of Montana has a “substantial interest” in hearing the Consumer Financial Protection Bureau’s case since Think Finance LLC’s loans were voided under the state’s law.

Movement Mortgage Implements CompenSafe to Automate LO Compensation (Send2Press), Rated: B

LBA Ware, a leading provider of automated compensation software and systems integration solutions for mortgage lending and retail banking, announced that South Carolina-based Movement Mortgage has implemented CompenSafe to automatically calculate commissions for its loan originators (LOs) located in 700 branches across 49 states.

Cerberus Capital Management, L.P. today announced that an affiliate has entered into an agreement to acquire Cyanco Holding Corp. from funds managed by Oaktree Capital Management, L.P. (“Oaktree”).  Cyanco is the largest global producer of sodium cyanide, a critical input in the gold and silver mining industry. Terms of the transaction, which is subject to customary conditions to closing, were not disclosed.

OCC Chief Praises Mulvaney On Halting Payday Rule (PYMNTS), Rated: B

After a 45-minute meeting on Tuesday (Feb. 6), Comptroller of the Currency Joseph Otting had nothing but praise for acting Consumer Financial Protection Bureau (CFPB) Director Mick Mulvaney.

“Acting Director Mulvaney has helped reduce the burden on the banking system by delaying implementation of his agency’s Home Mortgage Disclosure Act rule, committing to reconsidering its payday lending rule, and deferring action on additional regulations until completing a more thorough review of those matters,” Otting said in the release. “I also applaud him for realigning his agency’s mission to the current needs of the nation, making its processes more transparent and fair.”

United Kingdom

RateSetter Innovative Finance ISA is Finally Here (Crowdfund Insider), Rated: AAA

Peer-to-peer lending platform RateSetter has shared that is Innovative Finance ISA (IFISA) will launch tomorrow (February 8th). RateSetter said the IFISA will initially be available to existing customers, then to new customers on 1 March and to inward transfers from other ISAs in April.

What a difference a tax year makes! P2P platforms pile in to the IFISA market (P2P Finance News), Rated: A

Just a handful of peer-to-peer platforms had full Financial Conduct Authority approval in time to launch an IFISA product in April 2016, with 2,000 accounts and £17m subscribed up to April 2017.

Many saw this as a damp squib, but as we enter ISA season for the 2017/18 tax year, platforms representing almost 80 per cent of the market could be set to lead the charge.

Both Zopa and Funding Circle have loan books worth more than £3bn each, while RateSetter boasts a portfolio worth £2.5bn.

ISA Innovation: What do investors think? (AltFi), Rated: A

Crowdstacker’s CEO Karteek Patel reveals why investors have opted for the Innovative Finance ISA over the past two years. 

When the first types of ISA launched in 1999 the country was still in the first flush of a much feted Blair Government, the economy was buoyant, and the outlook rosy.

It was the end of a decade that saw average base rates of around 8%. Inflation meanwhile may have started at 9.5% in 1990, but it rapidly fell to a more manageable 1.5% by 1999.

2016-17 average ISA subscriptions were £5,558. Average subscriptions for our Innovative Finance ISA were above £11,000 – probably indicating early adopters of the IFISA are more seasoned investors, who are investing larger sums. Of course, as we know from other innovations such as smartphones and social media, where early adopters lead, the masses will follow, as long as the proposition is attractive.

How UK challenger bank Monzo turned its customers into a loyal community (Tearsheet), Rated: A

Monzo asks customers for feedback on product launches and fees, allows them to invest in the company through equity crowdfunding rounds and holds community events across the U.K., either at Monzo offices or customer suggested venues. Its approach is based on the principle that customers will stay loyal and will refer others if they’ve got some kind of stake in it. Banks have traditionally relied on large-scale ad campaigns and promotions to get customers to change their providers. But U.K. customers still aren’t changing their banks in droves; according to U.K. nonprofit Bacs only 4.45 million successful switches have taken place since 2013. Plus, they’ll have less and less motivation to switch bank providers as more non-bank entities begin offering comparable services.

The company’s biggest growth driver is loyalty, with word-of-mouth referrals being the source of 80 percent of new customer growth, according to the company. The remaining 20 percent is based on a limited amount of sponsored ads on Facebook and Twitter. More than 30,000 customers participate in an online feedback forum for new products.

Separately, Monzo holds eight to 12 events per year around the U.K.

 

Esme Loans joins NatWest’s alternative finance panel (Finextra), Rated: A

Esme Loans, the digital lending platform that allows small and medium sized businesses to quickly obtain unsecured loans of up to £150,000, will join a select group of leading alternative finance firms on NatWest’s Capital Connections panel.

Princeton dispute pushes Ranger’s 2017 returns into negative territory (P2P Finance News), Rated: A

RANGER Direct Lending (RDL) saw its net asset value (NAV) slide 2.95 per cent over 2017 due to its ongoing Princeton legal arbitration.

The investment trust’s December update showed its NAV return was 4.53 per cent in 2017 but the ongoing legal dispute with its Princeton investment over bankrupt lender Argon pushed it into negative territory.

On a monthly basis, RDL’s NAV was actually at a six-month high to 0.48 per cent.

Lendy secures major repayment on west London flat (Bridging&Commercial), Rated: B

P2P lending platform Lendy has announced that it has received a major repayment in excess of £2.1m on a luxury flat in west London.

The property has a security value of £3.25m, a loan value of £2.12m and an LTV of 65%.

Personal lending increases four times faster than wages (BBC), Rated: A

In comparison, wage data from the Office for National Statistics (ONS) shows the typical full-time worker has seen pay increase by 6.5%, over the same period.

British households amassed £37bn in unpaid personals loans in 2017, an increase of £7bn from three years earlier.

In Northern Ireland personal loan debt is just over £1bn and has risen 4% since 2014.

FINTECH AND BANKING GROUP SET FOR IPO (BusinessCloud), Rated: B

TruFin has published a document announcing its intention to float on the AIM market of the London Stock Exchange in late February.

TruFin has offices in London and Birmingham and currently operates under three separate businesses: Distribution Finance Capital (DFC), Satago and Oxygen Finance.

The group also owns a 15 per cent stake in technology-led peer-to-peer lender Zopa. The platform was launched in 2005 and has since originated over £2.6bn of unsecured loans, connecting more than 320,000 customers to 70,000 investors.

China

China’s recent crackdowns indicate growing pains for its advanced fintech industry (Tearsheet), Rated: A

The central bank is now reining in “social credit” scoring models by companies like Tencent and Alibaba that use consumer data from purchases and social behavior, as of the past weekend. These programs are designed to make up for the lack of institutional records of individuals’ creditworthiness in China’s financial system — something the central bank itself has tried to address with its own solution. Now the government is worried e-commerce-turned-fintech giants could use social scoring as marketing to sell their financial products.

China is a mobile-first nation. Mobile e-commerce took off there because its retail landscape was weaker and less efficient 15 years ago compared to that of the U.S.

European Union

Amsterdam Makes The Most Of Its Fintech Credentials (Global Finance), Rated: AAA

Despite Brexit, London has managed to hang onto its status as Europe’s leading fintech hub, at least for now. According to the Nesta 2016 European Digital City Index, “London leads for both start-ups and scale-ups.” However, Stockholm and Amsterdam, which rank second and third respectively out of 60 cities, are leading the pack nipping at London’s heels, according to the index, which looks at how European cities support “digital entrepreneurship.”

Amsterdam has many claims to fame, but one of its lesser-known features is its concentration of 350 fintech companies, more notably in the payments (Adyen, Payvision, GlobalCollect), trading (BinckBank, Flow Traders) and alternative finance (Funding Circle, Spotcap) spaces.

European Investors Elect Favorite Projects as Prêtons Ensemble Launches New €200 Million Digital Lending Fund (Crowdfund Insider), Rated: A

The asset management firm Eiffel Investment Group which manages the €100 million marketplace lending fund “Prêtons Ensemble” (meaning “Let’s Lend Together”) for institutional investors Aviva France, AG2R LA MONDIALE, MAIF, MGEN and Klesia awarded European Digital Lending Awards at a gathering held in Paris on February 1st. The awards recognized SME projects presented on the lending platforms backed by the fund.

Nominated platforms included leaders such as Funding Circle and Lendix. The prizes however went to smaller marketplaces, a good opportunity to put the spotlight on these up-and-coming fintechs:

  • Green Economy award: Générale du Solaire, a project presented on Lendosphere, France.  
  • Job creation award: Metalliance on Wesharebonds, France.  
  • Innovation award: Selfstock on ClubFunding, France.  
  • Quality of Life award: All About Healthcare on Linked Finance, Ireland. Linked Finance is Ireland’s largest P2P lending platform with more than 16,000 registered lenders who have lent over €32 million to Irish businesses
  • Inclusive Economy: Mujeres y CIA on Finanzarel, Spain, and
    Nou verd and Nou set on Loanbook, Spain.  
  • Best pivot: Sky Hero on Look & Fin, Belgium.  
International

Senmiao Technologies Proposes Terms For $ 14 Million U.S. IPO (Seeking Alpha), Rated: AAA

Senmiao Technology (AIHS) intends to raise $14 million in a U.S. IPO by selling 3.25 million shares at between $4.00 to $4.50 per share.

According to a 2017 research report by the World Federation of Direct Selling Associations, the global direct selling volume increased by 1.9% in 2016, reaching $183 billion in sales between 107 million direct sellers.

In 2014, 45% of direct selling volume came from the Asia Pacific region and grew to 46% in 2015 – 2016, as the chart below shows:

Source: Seeking Alpha

According to management, ‘there are approximately 40 lending platforms in Sichuan province.’ Major competitive vendors that provide similar services include:

  • Sichuan Jinding Wealth Information Technology
  • Koudai Network Services
  • Chengdu Hongxue Jinxin Business Consulting
  • Chengdu Zhongke E-Commerce Co

Revenue ($)

  • Six months ended Sept 30, 2017: $182,960
  • FYE March 31, 2017: $73,237

Operating Loss ($)

  • Six months ended Sept 30, 2017: ($671,729)
  • FYE March 31, 2017: ($185,535)

Operating Margin (%)

  • Six months ended Sept 30, 2017: Negative
  • FYE March 31, 2017: Negative

Cash Flow from Operations ($)

  • Six months ended Sept 30, 2017: $302,568 cash flow used in operations
  • FYE March 31, 2017: $1,324,449 cash flow from operations

As of Sept 30, 2017, the company had $76,863 in cash and $736,246 in total liabilities.

(Source: Senmiao S-1/A)

 

Exclusive Interview with FintruX CEO Nelson Lin (Chipin), Rated: A

FintruX is an established online lending platform that is introducing blockchain into its financial network to better serve both kinds of customers.

Nelson. Thanks for joining us today. Can you tell us more about yourself and FintruX?

I am the founder and CEO of FintruX and also Robocoder. Robocoder provides the technology behind Fintrux.

FintruX is a global peer-to-peer (P2P) lending platform on the Ethereum blockchain network for providing unsecured loans. It connects small businesses who need money for cash flow issues, with lenders who want to earn a better return on their money.

In some ways, tokenized P2P lending platforms is a “killer app” for the blockchain technology. We are pretty sure you would agree, but can you elaborate and in the context of what you are trying to do.

All the current monetary transactions require too many intermediaries to facilitate a simple transaction from end-to-end and the process itself is also inefficient and time-consuming. Furthermore, most of the systems are fragmented, inconsistent and usually require extensive human intervention. Finally, such transactions require numerous touch-points to handle and manage the “trust” between all of the parties involved. Our mission is to make trustless financing a no-brainer for both borrower and lender.

What is the biggest problem within the industry or do you think there is a gap in the market for FintruX to fill?

The biggest problem is that small and startup businesses do not have sufficient credit history or access to capital for their short-term cash flow needs. Furthermore, the traditional systems are inadequate, fragmented, inconsistent, labor intensive and involve lots of intermediaries. There are many P2P lending platforms in existence but they do not talk to each other.

Australia

Global tech giants will threaten bank tax receipts (Financial Review), Rated: A

The $14 billion in taxes the federal government receives each year from the banking sector could be eroded by global technology companies including Apple capitalising on policies designed to boost competition in the sector, the chief executive of the Australian Bankers’ Association, Anna Bligh, will warn on Thursday.

In its half-year results presentation on Wednesday, Commonwealth Bank, the country’s second largest taxpayer, pointed to the $2 billion of taxes it pays to contribute to the economy. This contrasts to many of the global tech players, who book little profit in Australia despite huge sales, and therefore pay much less tax.

India

Credit is here to stay, new lenders beyond banks to play bigger role (money control), Rated: A

Emerging as an alternative to mainstream banking, NBFCs have also been playing an important role in bridging the credit gaps, i.e. in meeting the increasing financial needs of the underserved and unbanked areas in the corporate sector, unorganized sector and also for the local borrowers.

According to the Reserve Bank of India, in January 2017, a total of 28.8 million credit cards were in operation. Credit cards, also known as revolving credit, have been the preferred choice of masses as it enables repetitive use for daily purchases that can be paid back in instalments on a monthly basis.

According to PwC research, over 95% of financial services incumbents seek to explore FinTech partnerships.

MENA

A year when new innovations show up in Dubai realty (Gulf News), Rated: AAA

In the UAE, we are seeing some significant strides, where one technology-driven real estate crowdfunding platform, Smart Crowd, recently received approval from the Dubai Financial Services Authority to establish the region’s first regulated real estate crowdfunding platform. This will enable any individual to invest and own a piece of UAE property for as little as Dh5,000 and will most likely stimulate sales in the secondary market.

Canada

Business loans: Which one works for you? (Bankless Times), Rated: A

Source: Bankless Times
Bermuda

Trunomi Closes $ 3.5 Million Round from CloudScale Capital (Finovate), Rated: AAA

Consumer consent and data rights company Trunomi closed a $3.5 million round of funding today. This investment brings the Bermuda-based company’s total funding to $10.5 million.

Authors:

George Popescu
Allen Taylor

Friday November 3 2017, Daily News Digest

p2p lending volumes

News Comments Today’s main news: Kabbage sued over true lender doctrine. Orchard to launch online lending industry page on Bloomberg terminal. KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2017-6. DBRS assigns provisional ratings to SoFi Consumer Loan Program 2017-6. RateSetter changes approach to property loan defaults. Lendy breaks another record. MarketInvoice enters business loan market. Today’s main analysis: FT Partners’ […]

p2p lending volumes

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Africa

News Summary

United States

Small Business Borrower Sues Kabbage (PYMNTS), Rated: AAA

A small business (SMB) in Massachusetts borrowing funds via marketplace lender Kabbage has sued the platform, igniting new debate in the conversation over the definition of a “true lender,” according to reports in the National Law Review on Tuesday (Oct. 31).

The small business that sued the parties is reportedly arguing that Celtic let Kabbage “rent” that bank charter to originate loans with excessive interest rates, despite Kabbage being the “true lender,” because Kabbage, not Celtic, bears the risk of loss. The plaintiffs are using state usury and consumer protection statutes, the publication said, as well as the federal RICO statute and Lanham Act.

Orchard to Launch Online Lending Industry Page on the Bloomberg Terminal (PR Newswire), Rated: AAA

Orchard Platform’s online lending industry data and insights will be made available to Bloomberg terminal subscribers, providing a wealth of information on an asset class that offers a number of potential investment opportunities.

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2017-6 (BusinessWire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by SoFi Consumer Loan Program 2017-6 (“SCLP 2017-6”). This is a $591 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2017-6

Class Preliminary Rating Initial Class Principal
A-1 AA+ (sf) $315,000,000
A-2 AA+ (sf) $175,000,000
B A (sf) $75,000,000
C BBB (sf) $26,000,000

DBRS Assigns Provisional Ratings to SoFi Consumer Loan Program 2017-6 LLC (DBRS), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes issued by SoFi Consumer Loan Program 2017-6 LLC (SCLP 2017-6):

— $315,000,000 Class A-1 Notes at AA (sf)
— $175,000,000 Class A-2 Notes at AA (sf)
— $75,000,000 Class B Notes at A (sf)
— $26,000,000 Class C Notes at BBB (sf)

FinTechs Taking Larger Share of Personal Loan Market While Increasing Portfolio Risk-Return Performance (Globe Newswire), Rated: AAA

FinTech lenders continue to gain market share in the personal loan space while maintaining their portfolio risk-return performance. Results from TransUnion’s “Fact versus Fiction: FinTech Lenders” study were released today during the Digital Lending + Investing Conference in New York.

To better understand the personal loan market, TransUnion studied unsecured personal loan originations over the past several years, as well as more detailed portfolio performance between 2014 and 2016. The analysis differentiated between those loans issued by banks, credit unions, FinTechs and traditional finance companies to compare performance across lender types. The study found that the balance share of these loans originated by FinTechs had dramatically risen in recent years. At the end of 2016, FinTechs represented 30% of all personal loan balances, up from about 4% in 2012 and less than 1% in 2010. This trend continued through the first six months of 2017, with FinTechs now representing 32% of personal loan balances.

Share of Originated Personal Loan Balances

Timeframe/Lender Banks Credit Unions FinTechs Traditional Finance
2017 (Through June) 29 % 24 % 32 % 15 %
Full year 2016 26 % 23 % 30 % 21 %
Full year 2015 27 % 22 % 28 % 23 %
Full year 2012 35 % 32 % 4 % 29 %

As part of this study, TransUnion developed a coarse risk-return metric*. While loans provided by FinTechs experienced higher delinquencies than competitors, specifically within the lower credit risk tiers, TransUnion’s study found that they generated effective portfolio risk-return ratios that exceeded those of banks and credit unions. As of Q2 2017, FinTechs averaged an 8.7% return compared to 6.7% for banks and 6.3% for credit unions. Traditional finance companies average the highest return at 11.5%.

The study demonstrated how FinTechs focus their originations in the near prime and prime risk tiers.  As of Q4 2016, 59% of FinTech balances originated were in those two risk tiers. This is slightly higher than the 57% rate in Q1 2014.

Personal Loans Continue to Grow

The study also observed general personal loan trends. Personal loan total balances and consumer participation have both grown considerably. As of Q2 2017, 16.1 million consumers possessed a personal loan, compared to 14.8 million in Q2 2016 and 13.1 million in Q2 2015. Just five years ago in Q2 2012, approximately 9.8 million consumers had a personal loan. Total outstanding balances have risen from about $45 billion in Q2 2012 to $106 billion in Q2 2017.

While conventional wisdom holds that personal loan borrowers fall in the subprime risk bucket, TransUnion data through Q2 2017 show that personal loan adoption is greatest in the near prime (26%) and prime and above (49%) risk levels. Subprime constituted only 25% of such loans.

The most recent TransUnion data show that the number of lenders issuing personal loans has decreased in recent years from 7,245 in 2012 to 6,896 in 2015 and 6,680 in 2016. However, the number of lenders issuing large volumes of personal loans (at least 10,000 annually) has nearly doubled in the last 5 years from 68 in 2012 to 128 in 2016.

FT Partners’ CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA

October was another very active month for the FT Partners team as we announced seven significant FinTech transactions. We are pleased to announce our role advising:

  • Source: FT Partners

    Download the full report here.

    6th Avenue Capital Secures $ 60 Million Commitment For Merchant Cash Advance Funding (AltFi), Rated: A

    6th Avenue Capital, LLC (“6th Avenue Capital”), a provider of small business financing solutions, announced today its securement of a $60 million commitment from a large institutional investor. The investor made their commitment based on 6th Avenue Capital’s industry-leading underwriting, compliance standards and processes. 6th Avenue Capital will draw from this commitment to offer merchant cash advances to small businesses through its nationwide network of Independent Sales Organizations (“ISOs”) and other strategic partnerships, such as banks and small business associations.

    Success of CFPB data-sharing guidance relies on how it is enforced (American Banker), Rated: A

    This month, the Consumer Financial Protection Bureau took an important step toward making that potential a reality with its release of consumer-authorized data-sharing and aggregation principles. In the principles, the bureau reiterated consumers’ right to share data, recognizing that connectivity is the underlying magic fueling the consumer fintech revolution. The guidelines will promote innovation, competition and consumer control.

    Data sharing often requires consumers to provide their bank account usernames and passwords to third parties. In the guidance, the CFPB clarified that granting consumers access to their data does not necessarily mean sharing login credentials. At the same time, the bureau made it equally clear that if banks and others want to prevent the sharing of credentials, they need to find another, more secure way to provide access. Both banks and data aggregators should have an incentive to eliminate the use of credentials.

    Third, banking regulators could update their third-party vendor risk management guidelines to clarify the kinds of due diligence banks are required to conduct on parties with whom they share data.

    Elevate Credit Third Quarter 2017 Earnings Release Available on Its Investor Relations Website (CNBC), Rated: A

    Elevate Credit, Inc. (NYSE:ELVT) (“Elevate” or the “Company”), today announced financial results for the third quarter ended September 30, 2017. Elevate has posted its third quarter earnings release to its Investor Relations webpage at 

    Fintech Brokerage Robinhood Launches Spotify-Like Web Platform (Benzinga), Rated: A

    Robinhood, the fintech brokerage that offers commission-free trading through a mobile app, announced Wednesday it’s launching a web platform.

    Bhatt says the web trading platform is primarily geared towards informing people who are interested in investing about the stock market. However, the company faces an interesting product design challenge, in that about half of its users have invested previously on another platform.

    LendingTree Announces Top Customer-Rated Lenders by Loan Product for Q3 2017 (Business Insider), Rated: A

    LendingTree®, the nation’s leading online loan marketplace, today released its quarterly list of the top customer-rated lenders on its network based on actual customer reviews for the third quarter of 2017. The list features the top lenders in multiple loan product categories, including Mortgages, Personal Loans, Business Loans and Auto Loans, all of which are included in LendingTree’s online loan marketplace.

    Mortgage Category

    #1 Winner:
    Busey Bank

    Personal Loans Category

    #1 Winner:
    Best Egg

    Auto Loans Category

    #1 Winner:
    RefiJet

    Online lenders shrug off scandals to increase US market share (Financial Times), Rated: A

    The online lenders set up to upend US retail banking in the wake of the financial crisis are still expanding in spite of scandals and setbacks at some of the biggest names in the business.

    Financial technology groups originated $15bn of personal loans in the first half of the year, according to figures published on Thursday by TransUnion, the credit bureau whose database covers the borrowing habits of 220m consumers.

    That was almost a third of the total US market for new personal loans — a bigger share than banks or credit unions or other traditional consumer finance companies — and compares with just 4 per cent in 2012 and 28 per cent in 2015.

    R3 to take on Ripple with cross-border payments blockchain (American Banker), Rated: A

    R3 is working with 22 of its member banks to build a real-time, cross-border payments solution on Corda, the consortium’s “blockchain inspired” distributed ledger.

    The banks include U.S. Bank, TD Bank, Barclays, BBVA, CIBC, Commerzbank, DNB, HSBC, Intesa, KBC, KB Kookmin Bank, KEB Hana Bank, Natixis, Shinhan Bank and Woori Bank, R3 said Tuesday.

    What type of data is fair in credit models? (American Banker), Rated: A

    It’s long been a mantra in the fintech community: Traditional underwriting models that rely heavily on conventional credit scores leave out people who haven’t built up a credit history. A percentage of these people are creditworthy, but without a history to go on, the credit bureaus haven’t created profiles of them yet.

    To assess whether unscored people can repay loans, lenders are increasingly looking at “alternative data” — information that comes from someplace besides a traditional credit bureau that can help predict how a potential ….

    Foundation Capital Leads CoverWallet Series B Financing (Foundation Capital), Rated: A

    Which is why we’re excited to have led the Series B for CoverWallet, an online insurance broker for small businesses which is upending the industry.

    Small-to-medium business (SMB) insurance is a profitable, but highly fragmented $100 billion/year market. At the present, SMB insurance is sold through 40k+ brick-and-mortar insurance brokers, which employ 500k+ agents and move 99% of premiums. The typical SMB insurance application has 27 pages, and is completed while having “the talk” with the agent, which will include many upsell & cross-sell attempts. The typical SMB insurance quote takes 7-10 days. For SMB owners, this process is time consuming and painful.

    Affirm Now on Apple and Android (NewsCenter.io), Rated: A

    Affirm, a popular web service that allows users to buy online and pay off their purchases in fixed monthly payments, has launched their Android and iPhone app.

    Remitly Raises up to $ 115M in Series D Funding (FINSMES), Rated: A

    Remitly, a Seattle, WA-based independent digital remittance company, is to raise up to $115m in Series D funding.

    The financing – subject to applicable third party and regulatory approvals – will be led by Naspers’ fintech investment division PayU, a global online payment service provider, with participation from existing investors Stripes Group, DFJ, and DN Capital. In conjunction with the funding, Laurent le Moal, PayU CEO, will join Remitly’s board of directors.

    New, New Real Estate Crowdfunding Platform (Business Insider), Rated: A

    When you see prominent investors such as George SorosLarry Silverstein and Goldman Sachs participating in the real estate crowdfunding business – it means something. So, let’s follow the smart money. The real estate crowdfunder that everyone is talking about now is CityVest, which claims a top pedigree of founders and investors. And CityVest.com is living up to its mission – Smarter Real Estate Investing.

    CityVest provides wealthy individuals with online access to institutional real estate funds and the higher rates of return they generate.

    Which States Do Home Buyers Want to Move to—and From? (Realtor.com), Rated: A

    Prospective home buyers overwhelmingly want to head south, according to a recent LendingTree analysis. The online loan marketplace looked at the 1.5 million mortgage requests it received from October 2016 to October 2017 to come up with the results.

    Which state do home buyers most want to move to?

    But of all the Southern states, which was the most desirable? Drumroll please … that would be Florida. The Sunshine State was the top destination for folks from 18 states, or about 9.14% of those looking at loans on LendingTree.

    Which state do home buyers most want to leave?

    Vermont residents were the most likely to want to hightail it out of the Green Mountain State. Despite its popular ski resorts, only about 76% of locals were looking for in-state mortgages.

    Which state do home buyers most want to stay in?

    Texans were the most happy of any state’s residents to stay put. About 92.5% of folks looking for potential mortgages wanted to stay within Texas, according to LendingTree’s report.

    Real Estate Investing For The Tech-Minded (Forbes), Rated: A

    So as a techie, how does one go about evaluating not just the real estate but also the platform offering the investment?

    That’s why it’s critical for real estate investing platforms to be willing and able to answer questions from prospective investors — even those would-be investors without a ton of prior real estate knowledge. These companies should take a page out of Amazon’s book and develop a customer obsession.

    Be leery of any cliché claims of leveraging big data to automate underwriting. Underwriting is as much science as it is intuition/experience, and the best commercial real estate professionals have a carefully tailored mix of both.

    In the long run, the track records of the platforms will speak loudest.

    Steven Dupree was SoFi’s first marketing executive and VP of marketing for 3 years. He and his growth-oriented team took SoFi from originating 10 loans a day to over 1000.

    The three most basic ingredients for being able to succeed in FinTech are:

    1) “Good enough” technology

    2) Tremendous capital markets expertise

    3) Some sort of customer acquisition strategy

    Companies like Experian and Equifax know if you have loan balances, and specifically they know if you have student loan balances. We sent pre-screened offers to prospects with outstanding student loan debt through physical mail about how SoFi could help them with those loans.

    Plan Would Take Payday Lending Interest Rates From As High As 600% to 28% (StateNews.org), Rated: A

    Several community groups rallied to show their support for a bipartisan bill they think is needed reform against predatory lending.

    The bill would cap the interest rate of payday lenders at 28% and close any loopholes around that cap.
    <

    Filene, QCash Financial, CFSI Offer Free Webinar on the Benefits of Small-Dollar Lending (BusinessWire), Rated: A

    QCash Financial, a CUSO providing automated, cloud-based, omni-channel small-dollar lending technology for financial institutions, announces it will co-host a free webinar with Filene Research Institute and the Center for Financial Services Innovation to discuss the opportunities for credit unions in offering small-dollar lending on November 14.

    During the webinar, QCash Financial will address our industry’s impact and opportunity to deliver small dollar loans. QCash Financial, the Center for Financial Services Innovation and Filene will collaborate to discuss the omni-channel lending solution that serves members in search of small, short-term unsecured loans.

    Registration information can be found at filene.com. The webinar is scheduled from 2 p.m. CST / 12 p.m. PST until 3 p.m. CST / 1 p.m. PST.

    Ken Rees, CEO of Elevate, to Speak at Dallas Techweek Conference (BusinessWire), Rated: A

    Ken Rees, Chief Executive Officer at Elevate, a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, will speak on a panel session at Dallas Techweek on Thursday, November 2, at 9:15am CT. The panel will focus on data intelligence, breaking down the hype around data science, and exploring ways companies can turn that hype into actionable business intelligence.

    Rees will be joined by local tech talent and founders, including Clarisa Lindenmeyer, Chief of Strategy/Partnerships at Launch DFW; Sravan Ankaraju, President of Divergence.Academy, CEO of Divergence.AI; Dave Copps, CEO of Brainspace; and Steve Hebert, Co-Founder & CEO of Nimbix, Inc.

    Elizabeth Warren Warns: Navient Deal A Danger To Student Loan Borrowers (International Business Times), Rated: A

    U.S. Sen. Elizabeth Warren warned Wednesday that the nation’s largest student loan servicer has positioned itself to stealthily strip consumer protections from unwitting borrowers across the country. In an interview with International Business Times, she also said the loan servicer, Navient, should not be permitted to be a government contractor handling student loans on behalf of the U.S. Department of Education.

    The Massachusetts Democrat was sounding an alarm about Navient’s recent acquisition of online lender Earnest. She said the transaction opened up the possibility that the company will try to boost its profits by selling debtors on refinancing their current federal student loans with the company’s own private loans — the kind that she said to do not necessarily permit income-based repayment options.

    BrightPlan Launches ‘Hybrid-Robo’ Advisory Service (Plan Adviser), Rated: B

    A new robo-advisory platform has hit the market, under the moniker BrightPlan.

    Important to note, according to the firm, clients are not required to invest through BrightPlan in order to receive financial planning advice. They can manually input external account balances or link external accounts from more than 10,000 financial institutions to BrightPlan, which will monitor goal progress and provide advice to stay on track.

    Will a robot take your job? These startups hope so (PitchBook), Rated: B

    Avant wants to replace loan officers

    Avant has created an online lending platform that uses Big Data and machine learning algorithms to streamline the loan decision process helping borrowers consolidate debt through personal loans. The company, led by CEO and co-founder Al Goldstein (pictured), raised $325 million in Series E financing back in September 2015, with General Atlantic leading a round at a $2 billion valuation.

    Avant isn’t alone, with competitors like publicly traded Lending Club (NYSE: LC) and VC-backed Kabbage using a similar strategy: automating the credit creation process.

    Dreiling and Stamets join Attune (Royal Gazette), Rated: B

    Two new appointments have been made at data-enabled platform Attune, the company jointly created last year by American International Group, Hamilton Insurance Group and Two Sigma Investments.

    Martha Dreiling takes on the role of head of analytics and corporate operations, while Richard Stamets has been appointed head of underwriting strategy.

    United Kingdom

    RateSetter changes approach to property loan defaults (P2P Finance News), Rated: AAA

    RATESETTER is changing the way it deals with defaulted property development loans, which could involve taking control of the project and completing it itself.

    The peer-to-peer lender said on Wednesday that if a property development is only partially completed and has gone into default, it will now examine whether maximum value would be delivered via an immediate sale or by completing the development and then selling it.

    Lendy Update: Breaks Previous Monthly Loan Repayment Record; Recovers £20 Million in October 2017 (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer property platform Lendy announced on Thursday it has broken all previous records for loan repayments generated in any one month, recovering £20 million in total in October 2017 alone. The online lender reported that this exceeds its previous September 2016 high of £14.5 million. The record figure includes repayments on P2P loans on three caravan parks in Christchurch, Dorset, totaling £7.6 million and a Manchester mill of £1.35 million.

    This UK fintech is taking on big banks with business loans — and one key EU law is driving it (CNBC), Rated: AAA

    A digital invoice finance platform in the U.K. will provide business loans to its customers for the first time, it was announced Wednesday.

    The firm said it would expand into the business lending market, pitting it against established players such as U.S. listed peer-to-peer lender LendingClub and Britain’s Funding Circle. The latter raised £82 million ($100 million) in funding from venture capital investors earlier this year.

    CEO and co-founder Anil Stocker told CNBC that MarketInvoice will take advantage of an incoming European Union regulation called the Second Payment Services Directive (PSD2), which forces banks to open up data about their customers to third party companies.

    Citigroup Bets Millions on U.K. Mortgage Lender (Bloomberg), Rated: A

    Brexit may be roiling Westminster and inflating prices on supermarket shelves, but don’t tell that to financial institutions eyeing the U.K.’s burgeoning online-lending industry.

    In the latest sign of confidence in the sector, Citigroup Inc. has agreed to provide a fintech firm called LendInvest Ltd. with funding for mortgages, the startup said in a statement Wednesday.

    Citi Provides Warehouse Facility to LendInvest in Buy to Let Expansion (Crowdfund Insider), Rated: A

    LendInvest, a Fintech marketplace platform for property finance, has agreed a long-term warehouse facility with Citi boosting its entry into the UK’s £40 billion buy-to-let (BTL) market.

    The perils and profits of of peer-to-peer lending (The Spectator), Rated: AAA

    ‘We’re taking business from the banks, from the invoice discounters and from the traditional suppliers of finance, in ever larger amounts,’ says Angus Dent, chief executive of ArchOver, a P2P lender that launched in September 2014. ‘We only lend to companies with strong balance sheets and we only lend against accounts receivable (ARs). We will loan up to 80 per cent of the value of the ARs. Once the loan is made the ARs must be maintained at 125 per cent of the value of the loan, monitored by us on a monthly basis. This provides a quickly realisable asset for our investors in case the borrower gets into difficulties over repaying for the loan.’ The minimum amount that ArchOver expects clients to invest is £1,000 per project.

    For Anil Stocker, chief executive and co-founder of MarketInvoice, P2P lending against receivables (amounts owed to a business) offers a particularly interesting investment class ‘because it’s of short duration, a liquid product, with invoices typically taking 45 to 50 days to be paid.

    Source: The Spectator

    Lenders must help brokers meet specialist challenge – LendInvest (Mortgage Solutions), Rated: A

    IMLA found that lending by specialists has grown by an average of 19% each year from 2009 to 2016, with a total of almost £17bn lent last year. That’s enormous growth from a sector that was particularly badly dented by the effects of the financial crisis.

    Even with these enormous annual increases in lending, the market share of these specialists remains modest. According to IMLA it has grown from 3.5% in 2009 to 6.8% in 2016, and that still lags significantly below the levels seen before the onset of the financial crisis.

    UK fintechs take market share from dominant high-street banks (Financial Times), Rated: A

    Britain’s leading financial technology start-ups are celebrating a record-setting week as they accelerate their push to take market share from high-street banks in areas such as payments and lending.

    TransferWise will on Thursday announce that it has collected $280m from investors, a record fundraising round for a UK fintech, to finance expansion of its cross-border payments service into more countries around the world.

    Meanwhile, Funding Circle has for the first time outstripped net new lending by the major high-street banks to UK small businesses, according to figures released by the Bank of England this week and data provided by Europe’s largest peer-to-peer lender to SMEs.

    Britain’s small businesses bank on alternative finance options (Finextra), Rated: A

    Of 1000 small biz owners quizzed by WorldPay, more than half say that they are planning for growth in 2018, yet 52% admit to being concerned that the traditional routes to finance, such as bank loans, are not going to be as easily available in the coming year.

    While 21% of business owners aged 44 or under say they’re still most likely to apply for a bank loan when looking for funding, nearly as many respondents (17%) say they’re more likely to look at crowd-funding, while 11% prefer P2P lending, and six per cent say they favour business cash advance.

    HSBC unveils robo-advisor plans (Business Insider), Rated: A

    HSBC’s head of retail wealth, Dean Butler, provided his perspective on automated advice, and the bank’s plans for new products in the area, at the UK Robo-Advice Innovation Forum on Wednesday, attended by BI Intelligence.

    Source: Business Insider

    Landbay & Buy to Let Club Complete Lending to New Southgate Building in Less Than Two Months (Crowdfund Insider), Rated: A

    Earlier this week, Landbay and Buy to Let Club completed lending to a new building in Southgate, a suburban area of north London, in under two months. The initial case was reportedly submitted on the broker portal by Buy to Let Club on August 24th.

    Fintech firm MarketInvoice enters business loans market (Asset Finance International), Rated: A

    Fast-growing fintech firm MarketInvoice has launched a new business loans service that expands its solutions beyond invoice finance.

    Businesses will now be able to obtain unsecured business loans from £10,000 to £100,000 over a 12-month term, with no early repayment fees.

    By expanding into the £35 billion business loans sector, MarketInvoice aims to increase support for businesses which need working capital around their invoice finance requirements.

    Natural evolution (P2P Finance News), Rated: A

    Stuart Lunn, co-founder and chief executive of Edinburgh-based P2P business lender LendingCrowd, sees the benefits of both.

    “For P2P investing to become truly mainstream, it’s essential to simplify the products on offer and enable greater comparability between opportunities,” he asserts.

    “Passive products force greater diversification and I think that will benefit the sector as a whole.”

    Funding Circle and RateSetter make LinkedIn’s ‘Top 25’ companies list (P2P Finance News), Rated: A

    Funding Circle and RateSetter have been placed at number eight and number 21, respectively, in the ‘LinkedIn Top 25 Companies – Startups’ list, which was released on Thursday morning.

    Funding Circle was the highest-ranking P2P platform, and it was praised for funding more than 28,800 companies over the past seven years, with more than £2.8bn allocated to borrowers.

    CEO switch for online lender Patch of Land (AltFi), Rated: A

    Jason Fritton returns to his former post as CEO, as Paul Deitch steps down.

    P2P firm Assetz continues profitability (AltFi), Rated: A

    Assetz Capital notches seven figure pre-tax profit during the six months from April to September 2017.

    Durham’s Atom Bank named by LinkedIn as one of UK’s top 25 start-ups (ChroncleLive), Rated: A

    A North East company has been named by social media site LinkedIn as one of the country’s 25 most disruptive companies.

    Durham ’s Atom Bank, which is shaking up the banking world with its mobile-based app and personalised services, is named alongside companies including Deliveroo, Uber and Airbnb, on a list of start-ups which LinkedIn says are changing the UK business landscape.

    Online retailer Asos offers buy now pay later option with Klarna (Finextra), Rated: B

    Today, leading European payments provider Klarna has announced a UK partnership with ASOS – one of the world’s leading destinations for fashion loving 20-somethings.

    The news means that UK customers with the iOS or Android ASOS app can now use Klarna’s ‘Pay later’ solution to pay for their items up to 30 days later – with no interest or fees.

    Alternative lender Sancus announces new managing director (AltFi), Rated: B

    The alternative finance services firm has announced that Dan Walker will take over from current MD Caroline Langron in January 2018.

    The group is part of GLI Finance, which acquired peer-to-peer lending platform FundingKnight in 2016. Earlier this year, FundingKnight was moved into Sancus BMS Group, was awarded full FCA authorisation in July.

    China

    Chinese Listed Banks still create more profits than BAT (Xing Ping She), Rated: AAA

    In recent years, with the rise of Internet financial and the change of macroeconomic environment, the traditional commercial banks did go through a “severe winter”. Since 2011, banking climate index has been down all the way. It is not until 2017 that the new season of spring is coming.We selected 38 listed Chinese Banks in exchange of Shanghai, Hong Kong and Shenzhen as the performance comparison samples, and analyzed their comprehensive profitability based on the financial data of the first half of 2017.During this time, the total net profit of the 38 banks selected in this paper was 823.93 billion RMB, up 4.14 percent from the same period last year. The chart below described the profit data of all the 38 banks in the first half of 2017.


    Profitability Banks Ranking
    Among the 38 listed banks, we can also find the Top10 earning banks as follows, including 5 large-scale commercial banks and 5 joint-equity commercial banks. In addition, the net profit of Ping An Bank and Beijing Bank has reached the threshold of 10 billion RMB.


    Chinese listed banks VS internet giants in profitability
    According to the total value and earning data of the selected 38 listed banks as follow, their total market capitalization is about 10 trillion RMB, and the total net profit was 823.93 billion RMB. That means the net profit ratio was about 0.082.

    As for the BAT giants which are closely watched in the Internet industry, the three Internet companies are worth about 6.5 trillion RMB in total for the first half of 2017, and the net profit reached 52 billion RMB. That means their net profit ratio was just 0.008, much lower than the listed banks. Obviously, Banks still have an advantage over emerging Internet companies in terms of profit creation.

    In fact, research shows that the rise of the Internet financial companies has little impact on the profitability of large commercial Banks and rural commercial Banks, while has a great influence on city commercial Banks, and Joint-stock commercial Banks have been promoted instead because they can seize the Internet financial opportunities. In general, though the development of Internet finance has brought adverse effects on the profitability of commercial Banks, and also forced it to actively adjust the profit model and promote the diversified development of the profit structure.

    Data resource: Wind Database

    Another Chinese P2P lender! Senmiao Technology files for a $ 20 million IPO (NASDAQ), Rated: A

    Senmiao Technology, a early-stage Chinese marketplace for peer-to-peer lending, filed on Monday with the SEC to raise up to $20 million in an initial public offering.

    China pours millions into facial recognition start-up Face++ (Financial Times), Rated: A

    Chinese facial recognition start-up Megvii Face++ has raised $460m in an investment round led by a government fund, as the country pours money into efforts to become an artificial intelligence superpower to rival the US.

    The Beijing-based Face++ said on Wednesday that it had raised money from China State-Owned Venture Capital Fund and the China-Russian Investment Fund, which is backed by the sovereign wealth funds of both countries. Private investors including Alibaba’s payments affiliate Ant Financial also participated.

    Chinese listed company transferred shares of Wei Dai Network, making over 1B RMB (Xing Ping She), Rated: A

    On October 17, Handing Yuyou(300300.SZ), a listed company that was suspended from trading, began to transfer its assets of internet finance continuously. On October 30th, the company announced that it would transfer a 2 percent stake in the Wei Dai Network for 170m RMB, and then they announced to transfer a 1.5 percent stake in the Wei Dai Network for 127.5 million RMB. Through the two deals, Handing Yuyou(300300.SZ) will receive nearly 300 million RMB in cash. Deducting the previous investment costs, Handing Yuyou(300300.SZ) won over 100 million RMB in less than half a year. In the past three years, according to the company’s history of the investment in Wei Dai Network, we can find that the company has earned at least 10 times to the original investment.

    The transferee of this transaction is Beijing Qianshan Xinyuan Investment Management co., LTD. According to the public information, Beijing Qianshan Xinyuan Investment Management co., LTD. was established in 2015 with the registered capital of 10 million RMB. Its parent company, Qianshan Capital Management co., LTD is a private company registered in 2016. The parent company also have the other several subsidiary corporations, including Qianshan Venture Investment Management co., LTD., Beijing Qianshan Wealth Management co., LTD., etc. Currently, the parent company has a total capital size of 1 billion RMB.

    European Union

    Mintos Scraps Secondary Market Fees (P2P-Banking), Rated: AAA

    Starting from today, November 1, 2017, we have removed the 1% fee for selling loans on the secondary market of the Mintos marketplace. This means from now on, there are absolutely no fees for investing through Mintos.

    Source: P2P-Banking

    Orange is the new bank? Telecoms giant ventures into lending (Business Insider), Rated: A

    Telecoms giant Orange launches its own bank on Thursday, aiming to win 25 percent of France’s online banking market by capitalizing on the rising use of smartphones to steal share from established lenders with inferior technology.

    Orange is starting from a small base – Coisne says it has 25,000 customers have expressed interest ahead of the launch, a tiny fraction of the company’s 21 million mobile clients. But the timing of its entry gives some room for optimism.

    In France, 793.4 million online banking e-payments were made last year according to the European Central Bank, up from 586.2 million in 2014.

    INFOGRAPHIC: FINTECH AND THE FUTURE (Irish Tech News), Rated: A

    The GetLine Network  a decentralized P2P lending platform, recently reached out to us with one of their infographics on FinTech, and we thought it was appropriate and timely for our audience.

    Financing and loans are even being re-thought of with new forms of capital raising, such as ICOs, crowdsourcing/crowdfunding, and P2P lending, making banks and legacy financial institutions even less needed.

    Source: Irish Tech News
    International

    Lendio Gives supports Kiva borrowers (Bankless Times), Rated: AAA

    Small business loan marketplace Lendio announced it has provided more than $25,000 in loans to over 1,200 small business owners in 75 countries around the world through its employee-based Lendio Gives program in partnership with Kiva.

    The top five sectors supported by Lendio’s funding are agriculture, food, retail, clothing, and services. Of the loans Lendio has funded, 86 percent have gone to women or women’s groups. The top countries Lendio has supplied funding to include Zimbabwe, Peru, Haiti, the Democratic Republic of Congo, Ecuador, the Philippines, Kenya, El Salvador, and Senegal.

    International P2P Lending Volumes October 2017 (P2P-Banking), Rated: AAA

    Thincats reached the milestone of 250 million GBP loans originated since launch.

    This month I added Bolden.

    Source: P2P-Banking

    Fintech and Cross-Border Payments (IMF), Rated: AAA

    To gauge the IMF’s most recent analysis: A speech last month, at the Bank of England, by the IMF’s Managing Director—Christine Lagarde—analyzed potential challenges posed by fintech innovations to central banking.

    In my remarks here today—focusing on implications of fintech for cross-border payments—I’ll explore three broad areas: [1]

    • First, a sketch of the economic framework on how fintech applications will affect financial services and the market structure.
    • Second, the current landscape of cross-border payments, and the possible evolution of cross-border payment systems; and
    • Third, the role of central banks, themselves, and the possible reasons for them to issue their own digital currencies.

    Alternatives assets such as P2P loans to double in volume by 2025 (AltFi), Rated: B

    Alternative asset classes – in particular, real assets, private equity and private debt – will more than double in size, reaching $21.1trn by 2025, accounting for 15 per cent of global AuM as investors diversify to reduce volatility and target specific return and risk outcomes, according to research by PwC.

    Zelle adds major tech partners to roster (Banless Times), Rated: B

    Zelle – a new, real-time payments network from bank-owned Early Warning Services – has added ACI Worldwide, CGI, D3 Banking Technology, and IBM to its growing list of technology partners.

    India

    One Size Fits All? Regulating Peer-To-Peer Lending Platforms (India Corporate Law), Rated: A

    Briefly, as per the Master Directions:

    • It is now mandatory for entities proposing to undertake this business to be registered as ‘NBFC-P2P Lending Platforms’ with the RBI (NBFC-P2P). To ensure business continuity, existing players have been given a period of three months to apply for this licence. Applicants will be scrutinised for scalable and secure technological capabilities, financial standing as well as fit and proper management.
    • Fundamentally, the NBFC-P2P is expected to operate only as an intermediary and not undertake any lending activities itself or hold any funds of its participants (lenders or borrowers) on its books. Towards this end, an escrow mechanism for movement of funds has also been envisaged.
    • The exposure of each lender and loans (not exceeding a three year maturity period) availed by each borrower across all NBFC-P2Ps has also been capped at INR 10 lakhs, with each borrower not permitted to avail more than INR 50,000 per lender.
    • In addition, directions also prescribe that NBFC-P2Ps adopt minimum standards of transparency, disclosure requirements and fair practices.

    Impact on Aggregators

    • To the extent P2P lending platforms are servicing individuals and/or unregulated entities, there is merit in regulating such operators to contain any systemic risks. However, there are existing players in the market who primarily service regulated financial institutions (viz. banks and NBFCs) as lenders. The Master Directions fail to recognise this distinction.
    • Separately, banks and NBFCs today use distribution channels including web-based loan aggregators.

    SBI partners with Primechain Technologies and Intel to adopt blockchain-driven KYC (The Times of India), Rated: A

    PrimechainTechnologies announced on Wednesday that the country’s largest bank, State Bank of India (SBI), will adopt blockchain technology to manage the mandatory Know Your Customer (KYC) details in its system. Intel Corporation will act as a technology provider to facilitate the implementation.

    Asia

    P2P lender PeopleFund aims to change landscape (The Investor), Rated: A

    Korea’s accumulated peer-to-peer lending reached 1.47 trillion won (US$1.31 billion) by end-September as more and more borrowers are embracing the new, more convenient platforms for connecting with investors.

    Considering that the figure accounts for only 60 members of the Korea P2P Finance Association among the industry estimates of 130 lenders, the market is actually bigger. It also reflects a sharp upward trend; back in June 2016, when the association first began compiling data, accumulated loans granted by 22 members stood at just 152 billion won.

    Against this background, Kim founded PeopleFund in March 2015. Since then, the bank has been on a roll. On Nov. 1, its accumulated loans stood at 121 billion won, compared to 19 billion won in February. It’s the No. 3 player in the local industry.

    Africa

    SME failure rate set to spike unless funding issue is addressed (Engineering News), Rated: AAA

    The South African SME sector is set for a major crisis unless access to adequate business funding can be ensured as a matter of urgency. This was the key takeout from the just-released Key Funding Challenges for South African SMEs 2017 report developed by online lenderLulalend.

    “76% of respondents to our national survey of SMEs said they had undergone a tedious months-long paperwork-heavy process in applying for businessfunding from traditional lenders, only to have their applications denied.

    Considering access to credit was the #1 business challenge for nearly three out of every five SMEs surveyed, this disconnect between the needs of business owners and the lenders that have traditionally supported them is creating conditions of high risk and volatility.”

    Authors:

    George Popescu
    Allen Taylor