Thursday May 2 2019, Weekly News Digest

fintech deals india china

News Comments Today’s main news: OnDeck publishes Q1 financial results. LendingClub to move 350 jobs out of San Francisco to Utah. Salary Finance picks SoFi co-founder Dan Macklin as CEO. Klarna rolls out payment plans for physical stores in UK. HeZhong International sets terms for IPO. India tops China as Asia’s top fintech funding source. Today’s […]

The post Thursday May 2 2019, Weekly News Digest appeared first on Lending Times.

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United States

OnDeck Reports First Quarter 2019 Financial Results (PR Newswire), Rated: AAA

OnDeck today announced first quarter 2019 net income of $5.9 million, Adjusted Net Income of $8.3 million and gross revenue of $110.2 million.

Net income was $5.9 million, or $0.07 per diluted share, and decreased from the prior quarter’s net income of $14.0 million, 0.18 per diluted share, primarily due to higher loan loss provision, higher operating expenses and an accrual for income taxes.  Net income significantly improved from a loss of $1.9 million, or $0.03 per diluted share, in the year-ago period reflecting higher interest income from asset growth.

Adjusted Net Income was $8.3 million, or $0.10 per diluted share, and decreased from $15.9 million, or $0.20 per diluted share, in the prior quarter and increased from $6.4 million, or $0.08 per diluted share, in the year-ago period, reflecting the  aforementioned drivers.

Loans grew 3% sequentially and 19% from a year ago to $1.2 billion. Originations were $636 million, down from $658 million in the fourth quarter and up 8% from $591 million in the year-ago quarter.  The annual growth was broad-based with increases from both domestic and international operations as well as in both term loan and line of credit offerings. The average term loan size was unchanged sequentially at $53 thousand and was down from $58 thousand a year ago. Unit volume decreased 5% sequentially and increased 15% from the year-ago quarter.

Gross revenue was $110.2 million, essentially unchanged from the prior quarter, and up 22% from the year-ago quarter driven by higher interest income. Loan Yield of 35.6% decreased from 36.6% in the prior quarter reflecting a decline in portfolio performance while pricing was generally stable, and was unchanged from the year-ago quarter.

Interest expense of $11.3 million was essentially unchanged sequentially and decreased from a year ago despite a higher debt balance as borrowing rates improved. The Cost of Funds Rate continued to improve to 5.4%, a 20 basis point sequential improvement and a 140 basis point improvement from the year-ago quarter, as we refinanced debt at lower costs. First quarter financing activity included the extension and upsizing of four debt facilities aggregating to $595 million with improved terms.

Net Interest Margin was 29.5%, down from 30.0% the prior quarter as lower asset yields more than offset the impact from improved borrowing costs.  The increase in Net Interest Margin from 27.8% in the year-ago quarter was driven by improved borrowing costs.

Provision for loan losses increased to $43.3 million and the Provision Rate increased to 6.8%. The 15+ Day Delinquency Ratio increased 120 basis points sequentially to 8.7%.  Approximately half of the increase was in loans 15-89 days delinquent reflecting credit testing and economic trends, and the balance was in loans 90-days or more delinquent reflecting the change in our collection strategy for late-stage delinquencies. The Net Charge-off Rate increased to 12.2% and remains near the low end of our 12%-14% target range. The Reserve Ratio increased 30 basis points sequentially and 50 basis points from a year ago to 12.5%, reflecting portfolio quality trends and a higher proportion of 90-day plus delinquent loans, which have higher reserves.

Operating expenses increased from the comparable periods to $48.3 million, reflecting growth in the business and investments in our strategic initiatives, primarily technology and analytics. The Efficiency Ratio was 43.8%, up from 41.1% the prior quarter but improved from 49.3% in the year-ago quarter, while our Adjusted Efficiency Ratio* of 41.0% increased from 39.4% in the prior quarter and 40.1% in the year-ago quarter.

Provision for income taxes was $1.7 million compared to zero in 2018 when taxable income was completely offset by operating loss carryforwards. The effective tax rate was 24% and reflected a 21% U.S. federal rate, local and state income taxes, and losses in international subsidiaries.

Total assets increased 5% sequentially and 18% from a year ago to $1.2 billion primarily reflecting loan growth. Cash and cash equivalents was unchanged from year end at $60 million and decreased from $70 million a year ago. Other assets and other liabilities increased over the comparable periods as we recorded a net $28 million right-of-use asset in other assets and an equivalent increase in other liabilities stemming from the adoption of a new lease accounting standard. The 3% sequential increase in debt to $842 million was consistent with the growth in loans.

Total OnDeck stockholders’ equity of $309 million increased $10 million, or 3%, from year end and $45 million, or 17%, from a year ago.  Book value per diluted common share outstanding of $3.89 increased from $3.77 at year end and $3.40 a year ago.

Food Truck Satisfies as OnDeck Small Business of the Month (Yahoo! Finance), Rated: B

OnDeck today announced that Me So Hungry, a food truck business based in California, is its Small Business of the Month for April 2019. Owned by brothers Cory and Mike Ewing, Me So Hungry is the first food truck business to receive the OnDeck recognition.

LendingClub to slash San Francisco office, move 350 jobs to Utah (Mercury News), Rated: AAA

LendingClub, the online-loan marketplace, plans to wind down customer support operations in its home city of San Francisco and shift staff to Utah as it seeks to trim costs.

In an internal memo to staff reviewed by Bloomberg, Chief Executive Officer Scott Sanborn said LendingClub aims to have its teams completely out of San Francisco by December.

About 350 jobs will shift to Lehi, Utah, where LendingClub recently opened a new office.

SoFi Co-Founder Steps Back Onstage with Salary Finance (newKerala), Rated: AAA

Salary Finance announces SoFi co-founder Dan Macklin will be joining as CEO, Salary Finance Inc. (the US arm of the group).

Strong GDP Growth Continues (PeerIQ), Rated: AAA

Source: Bloomberg, PeerIQ

LendingTree Study Finds Tesla Drivers Have Highest Average Credit Scores (Yahoo! Finance), Rated: AAA

LendingTree today released its study ranking car brands by their buyers’ average credit score. Tesla buyers have the highest with a score of 740. Chrysler buyers have the lowest scores, with an average score of 656.

Key findings

  • Luxury brand buyers occupied the top spots. TeslaPorsche and Lexus lead with average credit scores of 740, 727 and 699 respectively.
  • Chrysler buyers had the lowest average credit score at 656, but it’s worth noting that this still falls in the “fair” range. It’s also right around the average credit score for all used car purchases.
  • For most auto makes, a credit score in the good range (670-739) was enough to be approved for an auto loan. Of the 30 different makes analyzed, 22 had an average approved credit score fall into that range

Read the full report here.

Understanding Sequential Pay Structures (DBRS), Rated: AAA

In a January 2019 newsletter, DBRS discussed the Evolution of the Shifting Interest Structure in residential mortgage-backed security (RMBS) transactions. Another common structure in RMBS transactions is the sequential pay structure.

The sequential pay structure is one of the most elementary and straight-forward structures in RMBS. Post-crisis, the sequential pay structure and its variations have been widely used in seasoned re-performing loan (RPL) and non-Qualified Mortgage (QM) transactions. Such structure largely benefits the senior classes in payment priorities over the subordinates.

Source: DBRS

Read the full report here.

Finitive Raises $ 6 Million Series Seed Round Led By Atomic Labs (PR Newswire), Rated: A

Finitive (www.finitive.com), a financial technology platform providing institutional investors with direct access to alternative lending investments, announced today that the firm raised approximately $6 million in a series seed financing. The round was led by Atomic Labs with participation from Ninepoint Partners – one of Canada’s leading private credit fund managers – as well as other investors and members of the management team.

Goldman Sachs, Regions help raise $ 55M for construction-lending fintech (American Banker), Rated: A

Built Technologies, a construction lending fintech platform, has raised $55 million in funding through Goldman Sachs and a handful of investors including Regions Financial, the company said Monday.

The Nashville, Tenn., company finished $31 million in series B funding through Goldman Sachs with the remainder amount raised by venture capitalists and Regions. The funding will help the 5-year-old fintech invest in research and development while building out its national client base, according to the firm’s CEO and co-founder, Chase Gilbert.

A busy month for fintech funding (American Banker), Rated: A

Novo, a challenger institution in the field of small-business banking, and the no-code platform provider Unqork held Series A funding rounds.

The online lender Upstart, which raised $50 million in a Series D round, says it can both lower loan loss rate and increase the number of customers underwritten.

Extend is building a platform to distribute digital cards by partnering with payment networks and card issuers. Another startup, MotoRefi, claims it can save consumers an average of $100 a month on vehicle refinancing by connecting them to trusted credit unions and community banks.

Moving Beyond Financial Literacy to Financial Empowerment (Lend Academy), Rated: A

Some of my thinking was prompted by this recent column in American Banker by Jennifer Tescher, the CEO of the Center for Financial Services Innovation (CFSI).

There are several companies in this space doing great work in creating high quality products: EvenPayActivTrueConnect and HoneyBee all offer options to employers that help their employees who need access to quick financing. Even has a groundbreaking deal with Walmart that has resulted in 300,000 employees using their pay advance app.

MoneyLion has four million users and they are focused on ending financial stress for all Americans by taking a holistic approach and being proactive in providing help. Dave helps the 30 million people who are hit by overdraft fees each year by advancing $75 from their next paycheck. Tally is a fully automated debt manager to help consumers get out of credit card debt.

Inside Varo Money’s three-year quest for a bank charter (American Banker), Rated: A

Just ask Colin Walsh, the co-founder and CEO of Varo Money, who began discussions with regulators three years ago to charter a national bank. Though the fintech won approval from the Office of the Comptroller of the Currency last year to move forward, it is still waiting on an answer from the Federal Deposit Insurance Corp.

Cross River Teams Up With RS2 To Offer New Digital Banking Experience (Crowdfund Insider), Rated: B

Cross River, a bank that delivers advanced financial and compliance products/services to the fintech industry, announced on Monday it has teamed up with RS2 to offer a new digital banking experience. Through the collaboration, Cross River and RS2 will provide merchants with a global payment experience for processing credit and debit card transactions, as well as digital banking for their workers and consumers.

Blend’s Erin Collard: Mortgages are the data superset of every other financial product (Tearsheet), Rated: A

Financial technology company Blend began building its platform by helping traditional institutions digitize mortgages, working with firms like Wells Fargo, US Bank and some regional banks and credit unions.

New York launches its own ‘mini CFPB’ (American Banker), Rated: A

New York has created a statewide financial protection division that will focus solely on corporate compliance and consumer issues, following similar efforts by New Jersey and Pennsylvania.

The New York State Department of Financial Services on Monday named Katherine A. Lemire, a former assistant U.S. attorney, to be executive deputy superintendent of the agency’s newly created Consumer Protection and Financial Enforcement division.

Think Finance to Pay CFPB $ 7 for Loan Violations (Bloomberg Law), Rated: A

A bankrupt payday lender will have to pay a $7 civil penalty to the Consumer Financial Protection Bureau over nearly $50 million in loans it issued in states where they were not legal, according to bankruptcy court filings.

Judge Brian Morris of the U.S. District Court for the District of Montana granted a stay in the CFPB’s litigation against Think Finance LLC on April 30, pending activity in the bankruptcy court.

Capital One drives auto finance deal with CarGurus (Finextra), Rated: A

CarGurus today announced a partnership with Capital One Auto Finance that will benefit both consumers and dealers.

The Most Powerful Women in Banking (American Banker), Rated: A

Camille Burckhart, Popular Inc.

Chief information and digital officer

Jacqueline Howard, Ally Financial

Senior director, corporate citizenship

Carrie Lichter, Fifth Third

Chief operational risk officer

Now you can pay for your flights in instalments with these booking companies (Lonely Planet), Rated: A

Online travel apps CheapOair and OneTravel will soon operate a new feature that allows customers to pay for their airfare in instalments. It means that customers don’t have to pay for the full cost of their flight upfront and can instead spread the cost out into more manageable payments that suit individual budgets, choosing between three-, six- or 12-month instalments. Fareportal, the company that operates CheapOair and OneTravel, said its partnering with online lender Affirm to introduce the new feature.

For example, a $300 (£230) purchase at 10% APR spread out over three months would cost $101.69 (£78) per month.

A recent study by the U.S. Chamber of Commerce revealed that Mississippi, Nebraska and Maine are the three states where small to medium businesses have grown the most year over year. This is according to sales in Amazon stores, specifically. More than half of the items sold in Amazon stores are from small to medium businesses.

The top 10 fastest-growing states breaks down as follows:

  1. Mississippi
  2. Nebraska
  3. Maine
  4. Texas
  5. Indiana
  6. Colorado
  7. North Dakota
  8. Vermont
  9. Wisconsin
  10. Missouri

The third-party physical product sales, which is what gets sold on Amazon stores primarily, passed $160 billion in 2018. Nearly 20% of rural small businesses generate 80% of their revenue by selling products online.

Unlocking the Digital Potential of Rural America (American Innovators), Rated: AAA

Unlocking the digital potential for rural small businesses across the country could add $47 billion to the U.S. GDP per year.

Increased adoption could grow annual revenues of rural small businesses by more than 21% over the next three years – the equivalent of $84.5 billion per year – with states in the South seeing the greatest benefit

Online tools and technology have the highest potential impact on rural small businesses with revenue under $100,000

Read the full report here.

Proof of Work: the slow but steady process of institutional adoption (The Block), Rated: A

Antonio from dYdX

dYdX is a decentralized exchange for margin trading, borrowing, lending, and eventually derivatives. dYdX allows traders to trustlessly short and get leverage on crypto assets.

  • DAI lending rate has been high due to strong demand to go leveraged long on ETH, peaking at over 77% APR returns for lenders over the weekend

Brendan from Dharma

Dharma is the easiest place to borrow and lend cryptocurrencies. It enables non-custodial peer-to-peer lending through smart contracts on Ethereum.

  • #ReFi with #DeFi continued in full force, leading to over 1.7m in borrow volume (nearly all Dai-denominated)

Lendio Franchise Opens in Erie to Expand Access to Capital for Local Businesses (Lendio), Rated: B

Lendio has announced the opening of a new Lendio franchise in Erie. Through the Lendio franchise program, John Fee, a local business owner himself, will help other entrepreneurs in the community apply for loans, review their options and secure funding, easing their financial hurdles.

Fundbox Selected By Brandwise To Power Net Terms For Suppliers, Agencies, And Retailers (Yahoo! Finance), Rated: B

Today Fundbox announced that the sales technology leader Brandwise and Fundbox have entered into an exclusive agreement whereas Fundbox will be Brandwise’s business-to-business (B2B) trade financing partner.  Brandwise will leverage Fundbox’s business capital platform to power financing terms within the Brandwise ecosystem of 250,000 retailers.

White Oak Commercial Finance Adds to its ABL Originations Team (Yahoo! Finance), Rated: B

White Oak Commercial Finance, LLC (“White Oak”), an affiliate of White Oak Global Advisors, LLC, announced today the appointment of Michael Goletz to Director of ABL Originations, covering the Midwest U.S. region. Mr. Goletz joins from WNB Specialty Finance, a division of Woodforest National Bank, where he was responsible for sourcing and structuring asset-based lending debt facilities ranging from $5 million to $25 million.

Urjanet Announces 2019 SPARK Award Winners (PR Web), Rated: B

Urjanet, the global leader in utility data aggregation, today announced the winners of its 2019 SPARK Awards: AvidXchange, Bright Power, SimpleBills and Guppy – four companies at the forefront of using utility bill data to better serve their customers, community partners, and the environment.

  • Most Innovative Use of Utility Data: SimpleBills. In addition to utility bill management, residents can use SimpleBills to report their utility bill payment history to credit bureaus through a unique opt-in service.
  • Leader in Financial Inclusion: Guppy. Through its partnership with Urjanet to acquire user-permissioned utility data, Guppy enables greater access to financial services for consumers, as well as background and ID checks for businesses, all while keeping the end user in control of their own data.
United Kingdom

Klarna gets physical: All UK payment methods now available in-store (Fintech Finance), Rated: AAA

Global payments provider Klarna has today announced that all its alternative payment options are available both in-store as well as online.

Klarna’s alternative payment options include:

  • Shoppers can pay later, up to 30 days after delivery of goods
  • Shoppers can pay for purchases in 3 equal instalments collected monthly
  • For higher-ticket items, consumers can use Klarna’s consumer finance in 6-36 month payment plans

£1bn debt fund launched for UK non-bank lenders (P2P Finance News), Rated: A

EUROPEAN Risk Capital (ERG) has launched a £1bn multi-client debt programme for UK-based, mid-market non-bank lenders.

The programme – titled ‘CreditStream’ – has a minimum deal target size of £10m, making it primarily suited to mid-sized lenders including bridging and development lenders, second charge mortgagees, consumer and SME funders, auto/equipment finance companies, and fintech lenders. The maximum deal size can be in excess of £100m.

Lendy execs launch wage advance firm (P2P Finance News), Rated: A

Companies House documents show Brooke and Kelly, whosecurrent role at Lendy remains a mystery, set up a firm called Copious Capital in July 2018.

Copious Capital’s launch product is Pay Me Today, described as an “antidote to payday lending,” which lets companies approve and arrange salary advances for staff who need access to money before payday.

Lendy’s operations manager Pamela Guillamón owns between 25 per cent and 50 per cent of Pay Me Today, according to Companies House documents.

Woodford’s peer-to-peer exodus continues with VPC sale (Citywire), Rated: A

Fund manager Neil Woodford has followed his £88 million sale of his stake in peer-to-peer lending trust P2P Global Investments (P2P) by offloading his entire £40 million stake in rival VPC Specialty Lending (VSLV).

Relendex ‘very keen’ to get behind modular housing (Development Finance Today), Rated: A

Relendex is “very keen” to get behind modular housing, according to its chief operating officer Max Lehrain.
Development Finance Today recently reported on the difficulties lenders faced when funding modular builds, however Fintan explained some ways Relendex was able to feel comfortable with supporting such schemes.

OakNorth continues supporting British SMEs with senior lending hires (Fintech Finance), Rated: B

OakNorth – the bank for entrepreneurs, by entrepreneurs – is bolstering its regional presence with the appointment of four senior team members in Manchester, the Midlands and the South West.

Christopher Swarbrick, who has 18 years’ banking experience, joins as a Senior Director, Debt Finance. 

Christopher Richards joins from RBS where he spent 11 years and most recently held the role of Senior Relationship Manager, managing a portfolio of 40 complex banking relationships.

Mother tells of ‘devastating’ impact caused by collapse of Eridge firm London Capital & Finance (Times Local News), Rated: B

THE mother of two sons, one of whom is autistic, has told of the impact on their lives brought about by the collapse of a Tunbridge Wells based investment firm.

Around 11,500 people are set to lose a total £237million following the demise of the company based at Eridge Park.

LCF were selling unregulated mini-bonds, offering investors an eight per cent return for money that was purportedly being lent to a range of businesses.

China

HeZhong International sets terms for $ 5 million US IPO (Nasdaq), Rated: AAA

HeZhong International Holding, which operates a peer-to-peer lending marketplace in China, announced terms for its US IPO on Wednesday.

The Shenzhen, China-based company plans to raise $5 million by offering 1.3 million shares at a price of $4. At $4, HeZhong International Holding would command a market value of $55 million.

European Union

Which digital banks have the best overdrafts? (AltFi), Rated: AAA

Starling Bank

The London-based challenger bank charges 15 per cent equivalent annual rate for arranged overdrafts.

Charges £2 a month for unarranged overdrafts as well as the standard rate of interest. Will waive charges if your monthly overdraft interest comes to less than 10p for the month. Operates a monthly fee cap of £2.

Runner up

Monzo

Customers with arranged overdrafts are charges a 50p charge every day your account is overdrawn by more than £20, up to a maximum charge of £15.50 a month.

The Rest

B

The digital lender, launched by Clydesdale and Yorkshire Banks in 2016, charges a 12.5 per cent equivalent annual rate on arranged overdrafts. On top of this it charges a fee of £6 a month. The bank charges £6 a day for unarranged overdrafts.

N26

The Berlin-based app-only bank, with more than 2 million customers in 24 countries, said it will launch an overdraft facility for its 200,000 UK account holders “soon.”

55 Investors Become the Co-Owners of a Building in Western Switzerland (Yahoo! Finance), Rated: A

Foxstone (www.foxstone.ch) announces the acquisition, in crowdinvestment, of a residential building in Concise (VD) by 55 investors, of all ages and all backgrounds. They acquired a share of the building in co-ownership with a minimum amount of CHF 50’000.-

The total amount raised in co-ownership was CHF 3,250,000 for an acquisition price of the building of CHF 6,800,000, the remaining balance being financed by a mortgage. The net return on equity is 6.53%, which represents an annual return of CHF 3,265 for a CHF 50’000 investment. The Régie du Rhône takes care of the day-to-day management of the building.

How BBVA overhauled its mobile banking app (American Banker), Rated: A


International

Global fintech investment doubled in 2018 (HousingWire), Rated: AAA

Total global fintech investment increased from $50.8 billion in 2017 to a full $111.8 billion in 2018, according to KPMG’s The Pulse of Fintech, a biannual report that highlights key trends in fintech across the globe.

But the report showed something interesting when it comes to fintech – payments and lending continued to attract the most significant investment dollars globally.

China’s fintech funding dipped significantly in Q1 2019 (Business Insider), Rated: AAA

Global fintech funding was down 13% from $7.3 billion in Q4 2018 to $6.3 billion in Q1 2019, according to a new report from CB Insights.

However, deal numbers increased from 427 in Q4 2018 to 445 in Q1 2019, despite early stage funding dipping, while mid- and late-stage funding increased. Moreover, funding actually ticked up 1.5% year-over-year (YoY) from $6.2 billion in Q1 2018.

P2P Industry is Likely to Shine Despite Troubles in China (Learn Bonds), Rated: A

According to a PWC report, the U.S. P2P market is likely to reach $150 billion by 2025. Another report from Allied Market Research indicates that Peer to Peer (P2P) market could grow at a CAGR of 51.5% from 2016 to 2022.

Efma White Paper Covers Potential of SME Ecosystem (Monitor Daily), Rated: A

Drawing insight from recent research, case studies and observations from bankers working closely with SMEs, this digest outlines the main challenges facing banks today when trying to attract SME customers, such as intense competition from new entrants like Alibaba-backed online lender MYbank and Tencent-backed WeBank in China. In other markets, like the UK, 63% of financial services players in 2018 didn’t exist a decade before.

Authors of the 2019 Geneva Report on the World Economy seek market participant input (Fintech Policy), Rated: B

The topic of this year’s Geneva Report on the World Economy will be “the future of banking.”

The authors of the report (Kathryn Petralia, Kabbage; Thomas Philippon, NYU Stern School of Business; Tara Rice, Bank for International Settlements and Nicolas Veron, Peterson Institute for International Economics and Bruegel) are asking for input from market participants.

Asia

India unseats China as Asia’s top fintech funding source (TechCrunch), Rated: AAA

China’s massive fintech industry took a beating in recent months as the government continued to wind down online lending nationwide, rattling investor confidence.

Funding for fintech startups shrank 87.6 percent year-over-year to $192.1 million during the first quarter of 2019, a new reportfrom data provider CB Insights shows. India, which recorded $285.6 million raised for fintech startups in the period, overtook China to be Asia’s top fundraising hub for financial technology. Both countries clocked in 29 fintech deals, suggesting a cooling investor sentiment in China which saw its height of 76 deals just three quarters ago.

Source: CB Insights
India

Coming Together of Traditional Lenders and Fintech Players, Creating Better Opportunities (Entrepreneur), Rated: AAA

Fintech driven alternative lending is the second most funded and one of the fastest growing segments in the Indian fintech space. At last count, there were over 20 plus digital, alternative lending companies, each with their version of the truth, and probably another twenty in the stealth mode.

One thing common with most new age lending companies is that they rightly understand that they have a better chance of succeeding by collaborating with the existing lenders like Banks and NBFCs.

Canada

MOGO: A Rapidly Growing Canadian Fintech Provider (Yahoo! Finance), Rated: AAA

Mogo (MOGO) is a rapidly growing Canadian fintech company with over 800K members that generates revenues from a series of innovative products to help consumers manage & control their financial health.

  • Mogo is a high growth disruptor. Was the company not fighting the headwinds of strategically exiting the short-term loan business that it phased out throughout 2018, it would have shown 71% revenue growth on what it calls “core revenues” or revenues of continuing operations. Core revenue, excludes the company’s legacy short term lending revenue which Mogo fully exited at the end of Q3 2018. In 2018, the company generated $61 million in total revenues representing 26% growth, spurred by a doubling of its subscription and services business to $27 million. In the most recently reported quarter, Q4 2018, Mogo’s core revenue increased 75% versus the same period in 2017 with Subscription & Services revenue having its fourth consecutive quarter of at least 100% year over year growth. In 2018, it added more than 210,000 new members to reach 756,000 members on December 31, 2018 (up 39%), and on March 21st it announced it has surpassed 800,000 members.
  • Based on a combined value of the company’s lending business and its subscription services and fee generation business we believe the company is worth $7.67 per share when compared with other companies in these spaces.
Africa

The Legal and Regulatory Framework Governing Financial Technology (Fintech) in Nigeria (Lexology), Rated: AAA

FinTech is also gaining traction in the areas of lending and alternative financing (such as peer-to-peer lending, business-to-consumer lending, and so on), as well as financial and insurance products.

Pursuant to the Banks and Other Financial Institutions Act, Chapter B3 LFN 2004, an entity that wishes to provide marketplace lending may do so by registering as a bank or Other Financial Institution (“OFI”).

The use of airtime for the repayment of loans to a mobile lender could constitute a premium rated service, the provision of which requires the approval of the NCC.

Authors:

George Popescu
Allen Taylor

The post Thursday May 2 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 14 2019, Weekly News Digest

GreenSky

News Comments Today’s main news: FTC makes final decision on SoFi. OnDeck extends two revolving credit facilities. LendingPoint sees drop in debt management loans, increase for new purchases. LendInvest to float 500M GBP. Lufax hits $39.4B valuation. Klarna adds GooglePay as payment option. Today’s main analysis: Unemployment rate and GreenSky’s earnings. Today’s thought-provoking articles: Earnest vs. SoFi for student loan […]

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

GreenSky

News Comments

United States

United Kingdom

European Union

Australia/New Zealand

Other

News Summary

United States

Deal Final in FTC’s Action Against Online Lender (Manatt), Rated: AAA

The Federal Trade Commission (FTC) has finalized its deal with SoFi, an online lender that the agency had accused of making false statements about student loan refinancing.

According to the FTC, the California-based personal finance company misrepresented how much money student loan borrowers have saved or could save by refinancing.

Read the FTC complaint here.

Read the FTC decision and order here.

OnDeck Announces Extension of Two Revolving Credit Facilities With Credit Suisse & Deutsche Bank (Crowdfund Insider), Rated: AAA

OnDeck, a small business online lending platform, announced on Wednesday extensions to its existing credit facilities with Credit Suisse and Deutsche Bank on improved terms.  According to OnDeck, the amended facilities provide an aggregate of $360 million of committed funding capacity and are available to finance OnDeck’s term loans and revolving lines of credit. The scheduled maturity dates for the facilities were extended three years to March 2022.

Unemployment Rate Drops to 3.8%; GreenSky’s Strong Earnings (PeerIQ), Rated: AAA

The unemployment rate dropped to a near five decades low of 3.8% even as nonfarm payrolls only rose by 20K. Average hourly earnings rose by 3.4%, above economists’ expectations.

Source: WSJ
Source: Deutsche Bank Research, WSJ

GreenSky’s Strong 4Q2018 Earnings

GreenSky’s 4Q revenue grew by 22% YoY to $109 Mn, although net income fell by nearly 43% YoY to $23 Mn. The stock rose by ~6% post earnings.

  • Transaction volume increased by 23% YoY to $1.3 Bn.
  • Loan servicing portfolio increased by 36% YoY to $7.3 Bn.
  • GSKY had aggregate commitments of $11.8 Bn from its nine bank partners, of which $4.8 Bn were unused.
  • 30+ DQ rates rose slightly YoY from 145 bps to 148 bps.
  • GreenSky now has nearly 12 k home improvement merchant partners and nearly 3 k elective healthcare partners.
Source: GreenSky, PeerIQ

How to Decide Between Earnest and SoFi for Student Loan Refinancing (Credible), Rated: AAA

Earnest and SoFi are two of the best student loan refinancing companiesout there. They both offer fixed as well as variable rate loans, a 0.25% autopay rate discount, and certain unemployment protections to help in the event of involuntary job loss, but they also have their differences.

Here’s a side-by-side comparison of both lenders to help you make an informed decision.

Source: Credible

The rate of borrowers using loans for debt management drops; growing proportion of borrowers use loans for new purchases (LendingPoint), Rated: AAA

It turns out that, over the past two years, the proportion of our borrowers who say they are earmarking their loans for debt consolidation has decreased markedly, from about 60% in 2017 to about 54% in 2018. The percent using loans to pay for new merchandise or services has grown during those two years. Home improvement jumped from 6% to 8%; loans for medical expenses rose from 2% to 7%.

In 2017, the percent of millennial consolidators was about 61%. In 2018, that dropped a full 10%, down to 51%, a bigger decrease than any other age cohort.

Source: LeningPoint

What Do Millennials Want From Banks? Non-Financial Products (Forbes), Rated: AAA

If they haven’t, then why are 56% of Millennials giving megabanks (the four largest US banks) their 

Source: Cornerstone Advisors

The “Millennials hate banks” meme is a myth.

Millennials’ Access to Subscription Services
Percentage of Millennials that…
Don’t have the service but would like to Have the service, and pay for it directly Have the service, but don’t pay for it directly Don’t have or want the service
Identity theft protection 31% 20% 29% 21%
Personal/family data storage 29% 20% 19% 31%
Child identity theft protection 27% 15% 16% 42%
Rx, vision, hearing discounts 26% 31% 25% 18%
Travel/trip insurance 26% 18% 19% 37%
Roadside assistance 19% 40% 26% 15%
Cell phone damage protection 18% 42% 20% 19%
Source: Cornerstone Advisors

Green Dot targets social media influencers in banking-as-service push (American Banker), Rated: A

A new affinity banking service developed by Green Dot proposes to tap one of the most potent — and controversial — sources of distribution in the digital economy: social media influencers.

The digital banking and payments provider is developing what it calls Bank OS, a simpler version of its enterprise banking-as-a-service platform already used by the likes of Intuit, Stash, Uber and Walmart. It would enable partners to develop their own financial products just as those brands do, including offering credit cards, debit cards with loyalty programs or even a mobile app.

How online lenders attract and service the evolving SMB borrower (Tearsheet), Rated: A

But while small businesses still struggle with cash flow, how they shop for loans and their level of financial education about their options are changing. On Tearsheet’s recent webinar with leaders at Kabbage, BlueVine, and Intuit’s QuickBooks Capital, we discussed the changing nature of the SMB borrower and how their firms have evolved to keep up.

Pay Yourself First? Last Is How Small Biz Often Works (Newsmax), Rated: A

Everyone knows the Golden Rule of business is to pay yourself first. But more than half of small business owners are going months without pay – if they are taking any at all.

About a quarter of these entrepreneurs go two to six months without pay, and another quarter have gone more than six months without salary, according to a recent survey from Kabbage (), a cash flow optimization platform.

PAYNET STRATEGIC INSIGHTS MARCH 2019 (PayNet), Rated: A

The PayNet Small Business Lending Index (SBLI) rebounded with a 17.2 point jump to 150.7 in January, climbing to its second-highest level ever. On an annual basis, the SBLI increased 4.9%. The SBLI 3-month moving average also rose in January and currently stands 1.5% above its year-ago level.

Source: PayNet

The PayNet Small Business Delinquency Index (SBDI) 31–90 Days Past Due edged up one basis point to 1.45% in January, and is up six basis points on an annual basis — its 33rd consecutive year-over-year increase. The SBDI 91–180 Days Past Due was unchanged at 0.38% but is three basis points above its year-ago level.

Less Than Zero? This Proposed ETF Would Pay Investors, But There’s A Catch (Benzinga), Rated: A

Salt Financial, which currently offers one ETF, has filed plans with regulators to launch a low volatility that would pay investors, but there’s a catch.

Equifax Deleted Key Data Breach-Related Docs, Senators Say (Law360), Rated: A

Equifax Inc. failed to preserve key internal discussions over its massive 2017 data breach, U.S. senators said Thursday at a hearing where elected officials grilled the credit reporting giant’s CEO and the…

Home Equity Line of Credit Providers Face Growing Threat from Alternative Lenders, J.D. Power Finds (JD Power), Rated: A

Despite record-high levels,[1]new home equity line of credit (HELOC) originations have been steadily declining[2] as a perfect storm of rising interest rates, new tax laws and growing competition from alternative lenders has crimped traditional HELOC growth. According to the J.D. Power 2019 U.S. Home Equity Line of Credit Satisfaction Study, released today, HELOC customers are more likely than ever to shop for alternative sources of funding and HELOC providers are falling short on digital offerings.

This week in Chicagoland real estate: One Chicago Square, Woodlawn and more (Chicago Agent Magazine), Rated: A

New York-based DDG, Chicago-based Marc Realty and Ruttenberg Gordon announced plans for a 13-story hotelwith 250 rooms in Fulton Market. The developers are raising $55 million to fund the project through Prodigy Network, a New York-based real estate crowdfunding platform. The hotel will be located at 1234 West Randolph Street and will be operated by New York-based Standard Hotels. It’s set to be completed within two years.

PeerStreet Expands Executive Leadership with Two Senior Hires in Finance Team (BusinessWire), Rated: B

PeerStreet has announced the hiring of two executives with extensive experience in the financial services and real estate sectors: Ellen Coleman and Bob Brown. Ms. Coleman joins as Executive Vice President of Finance, and Mr. Brown joins as Executive Vice President of Finance & Corporate Development.

CoreLogic : Introduces Verification of Employment and Income Solution to Expedite Borrower Verification Process (MarketScreener), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, today released an enhanced Verification of Employment and Income(VOE/I) product. The comprehensive new VOE/I product takes time, touch and cost out of traditional employment and income verification through a three-step ‘waterfall workflow’ process, ensuring that every mortgage applicant can be verified.

The enhanced VOE/I product features a three-step ‘waterfall workflow’ that ensures each borrower’s employment and income is verified as efficiently as possible.

  • Step One: Instant verification via a direct integration to The Work Number (TWN)
  • Step Two: Automated verification leveraging dozens of third-party data sources
  • Step Three: Manual verification by a team of dedicated CoreLogic verification experts

CORELOGIC INTEGRATES CONDOSAFE WITH THE ELLIE MAE ENCOMPASS ALL-IN-ONE MORTGAGE MANAGEMENT SOLUTION (CoreLogic), Rated: B

CoreLogic today announced the integration of its CondoSafe product with the Ellie Mae Encompass® all-in-one mortgage management solution. CondoSafeis a one-stop condo project review tool that enables lenders to have a single, consistent, standardized review process, allowing them to determine eligibility earlier in the process, resulting in quicker approvals.

ArborCrowd Announces New Equity Offering in 707-Unit Multifamily Portfolio (AP News), Rated: B

ArborCrowd, the first crowdfunding platform launched by a real estate institution, today announced a new offering that allows investors to acquire equity interests in the Sioux Falls Multifamily Portfolio, a collection of class-B apartment communities located in Sioux Falls, S.D. The properties exhibit strong upside potential due to Sioux Falls’ sound multifamily real estate fundamentals and notable lack of professionally managed workforce housing product.

The investment has a targeted internal rate of return (IRR) of 12 to 14 percent over a three- to five-year hold period. Tzadik has budgeted $5.2 million to perform a comprehensive capital improvement plan that will include upgrades to all renovated units, common areas and public spaces.

LendPro’s Female Leaders Celebrated on International Women’s Day (LendPro Email), Rated: B

As the financial technology (fintech) industry continues to grow, innovators are increasingly looking for leadership and expertise to grow their companies and stand out from competitors. LendPro, a Lending-As-A-Service (LaaS) fintech company, prides itself in hiring strong talent.  Women make up 50% of staffing at LendPro’s Charlottesville corporate office, versus 37% female staffing at most fintech companies.

United Kingdom

Property finance hub Lendinvest plots £500m London float (Sky.com), Rated: AAA

The online property finance hub Lendinvest is plotting a £500m stock market flotation that will provide a fresh test of investors’ faith in a fast-growing but volatile area of the non-bank lending market.

Sky News has learnt that Lendinvest, which was set up in 2008 and has so far lent roughly £2bn to help buy, build or renovate British homes, has appointed Lazard, the investment bank, to advise on its strategic options.

Lending revolution: fintechs vs banks (Raconteur), Rated: AAA

Eight out of ten SME loan applications were approved by banks in the third quarter of 2018, according to the latest figures from trade association UK Finance. While this is a far cry from the days of the global financial crisis, when SME lending all but dried up in part due to regulatory pressures to shore up capital, smaller companies are still citing challenges in securing funding from traditional players, according to Stuart Chalmers, commercial banking lead for Accenture UK.

Alternative lenders understand the hunger for a seamless customer experience and have built credit journeys that align to business expectations

Almost 30,000 companies used non-traditional channels over the year, with peer-to-peer lending and equity-based crowdfunding now established investment vehicles for seed, startup, early-stage and fast-growth companies seeking capital. In fact, CCAF estimates that 29 per cent of all new loans issued in 2017 to small businesses with annual turnovers less than £2 million came from alternative finance.

Source: Raconteur

Burnham residents are the most thrill-seeking in the UK according to new study (Windsor Observer), Rated: A

It may come as somewhat of a surprise, but according to research from Zopa, Burnham has been revealed to be the most thrill-seeking town.

Peer-to-peer firms told to improve wind-down arrangements (Out-Law), Rated: A

In a letter to chief executives (4 page / 352KB PDF) sent last week, the FCA said a recent supervisory review of firms’ current arrangements against current requirements “strongly suggests” some P2P firms were falling short of the standards required by its rules.

Augmentum Capital signs up to Innovate Finance (P2P Finance News), Rated: A

AUGMENTUM Capital has joined Innovate Finance as its first investor member.

It is currently planning to issue extra ordinary shares in its investment trust as it looks to fund around £300m of potential opportunities in the sector.

PEER TO PEER LENDER RELAUNCHES PRODUCTS (Insider Media), Rated: A

A South West-based peer to peer lender is to re-launch its lending products aimed at individuals and businesses.

Folk2Folk is to offers 9 per cent interest rates for investors with a loan to value ratio of up to 60 per cent.

The business has so far brought £275m into rural businesses in Britain over the past six years.

Wonga compensation claims four times higher than expected (TechRound), Rated: A

It has been recently revealed that the number of compensation claims made against the failed payday lender Wonga, which filed for administration in August 2018, has ended up increasing four-fold. The initial figure given by the Financial Ombudsman Service in a Treasury Committee in January this year suggested that there were around 10,500 customers who had open complaints with the short-term credit, high-interest company.

Now, it turns out that the number of redress claims that have been made against Wonga is considerably higher, totalling over 40,000. It is potentially the case that these people will not end up getting their money back after having been mis-sold loans.

The IFISAs you can open for £100 or less (P2P Finance News), Rated: A

According to the most recent HMRC statistics, overall ISA savings fell from £79.8bn in 2015/16 to £61.5bn in 2016/17. Meanwhile, Bank of England statistics found that the amount of money that Brits were saving (both within and outside of the ISA wrapper) fell by £7bn in 2018 alone.

  • Abundance

Minimum investment: £5

  • Assetz Capital

Minimum investment: £1

  • Crowd2Fund

Minimum investment: £10

  • RateSetter

Minimum investment: £10

  • Octopus Choice

Minimum investment: £10

Environmental benefits of ISA investment (The Ecologist), Rated: A

Crowdfunding and peer to peer lending grew out of the banking crisis of 2008. According to the European Central Bank, the availability of bank loans to SMEs declined 23 percent immediately following the crash, causing a devastating impact on the economy.

Over 100 Finastra customers upgraded trade software in time to meet new SWIFT standards (RealWire), Rated: B

Over 100 Finastra customers were upgraded to the latest compliant versions of its transaction banking software, Fusion Trade Innovation, ahead of the new SWIFT standards deadline of 17 November 2018. The new ‘Standards MT Release’ included significant changes to category 7 messaging standards used in trade finance – the most significant set of changes to the SWIFT trade finance messaging interface in over 30 years.

China

China’s Lufax hits huge $ 39.4bn vaulation thanks to Primavera Capital-led Series C (Alt Assets), Rated: AAA

Chinese peer-to-peer lending business Lufax has confirmed it has reached an enormous $39.4bn valuation thanks to a Series C round led by private equity house Primavera Capital.

Chinese fintech unicorn Lufax in no rush to IPO (Technode), Rated: A

Chinese peer-to-peer (P2P) lender Lufax is not in a hurry to list on the stock markets, said an executive of its biggest shareholder, Ping An Insurance, during its earnings call, Chinese media reported (in Chinese) on Wednesday.

Ping An Insurance Group deputy CEO Jessica Tan said after Lufax’s latest round of funding, Ping An still holds approximately 41% of its shares.

European Union

Google Pay Added to Klarna’s Bank of Payment Options (WWD), Rated: AAA

Today, Klarna, the global payments provider “smoothing” out kinks in the checkout process for retailers, announced a partnership with GooglePay. Available for Klarna customers in Sweden, the intention is to make mobile payments “even easier and more secure.”

CreditEase Invests in wefox Group, the European Largest Insurtech Platform (PR Newswire), Rated: AAA

CreditEase, a Beijing-based leading FinTech conglomerate in China, announced today that its direct investment arm, CreditEase FinTech Investment Fund (CEFIF), participated in wefox Group’s $125 million USD Series B, a fast-growing Berlin-based insurtech firm together with Mubadala’s newly created European Ventures Fund. The investment is the largest Series B round for a European insurtech and Goldman Sachs International is acting as the private placement adviser to wefox Group in connection with the transaction.

The investment will help spearhead the company’s expansion into the European broker market. It also paves the way for wefox Group to accelerate growth and create the world’s most innovative product and engineering team applying advanced data analytics to create an all-in-one insurance platform in which all interactions are personalized. The company, which was founded in 2014, has grown its revenue to around $40 million USD, while serving more than 1500 brokers and over 400,000 customers, making it Europe’s number one insurtech platform.

Luna Connect: A new digital disrupter in the lending landscape (Irish Times), Rated: A

Luna Connect is a new digital lending platform primarily aimed at those lending to SMEs. It is designed to fit into the rapidly evolving financial services ecosystem and its founder, Brian D’Arcy, drew the inspiration for his business from the disruption currently underway in the financial services sector.

The company’s target market are lenders offering loans of under €200,000, whose borrowers typically require a fast decision on their application and want a more transparent lending process. The initial focus will be on Ireland and the UK with Europe and the US to follow. Investment in the project to date has been around €120,000 which was self-funded with support from the NDRC and Enterprise Ireland through the competitive start fund.

Australia/New Zealand

New US ambassador warns of China’s ‘payday loan diplomacy’ (The Washington Post), Rated: AAA

The new U.S. ambassador to Australia said Wednesday that he’s concerned about the way China lends money to developing Pacific nations in what he describes as “payday loan diplomacy.”

China categorically rejects accusations that it uses loans, grants and other financial inducements to extend its diplomatic and political reach, saying it is merely acting in the best interests of both sides in such transactions.

New way to borrow takes Australia by storm (Mozo), Rated: A

As distrust of the nation’s big banks and mortgage brokers swells amongst the wreckage of the banking royal commission, online lenders are emerging as real challengers in the home loan, business loan and personal lending markets.

NAB’s UBank launches ‘green’ deposits to chase Millennials’ savings (Financial Review), Rated: A

The CEO of National Australia Bank subsidiary UBank, Lee Hatton, says future retail depositors will want more control over where banks lend their money, prompting it to launch a “green” term deposit targeting environmentally concerned Millennial customers.

How marketplace lending meets investor needs (Cuffelinks), Rated: A

However, it’s also true that today’s investors face a risk environment of unprecedented complexity. In 2018, the S&P/ASX200 declined by 6.8%. Residential property values are falling and bank deposit rates fail to match inflation. In the last year, the Australian media landscape was dominated by the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, with its revelations of duplicitous lending practices, improper fees, and general misconduct that, by the banks’ own admission, fell far short of community expectations.

Financial Markets Authority executive steps down over employment matter (NZ Herald), Rated: B

Financial Markets Authority (FMA) executive Garth Stanish left the investment watchdog at the end of last month over an internal employment matter, a spokesman for the authority said.

Stanish was also a director of markets oversight, a group that includes oversight of NZX, crowd-funding/P2P lending platforms and frontline supervisors.

India

P2P startup PaisaDukan raises 1st round of investment from JITO (UNI India), Rated: AAA

Vivriti Capital raises second round of funding of Rs 110 Cr from Creation Investments (YourStory), Rated: A

Vivriti Capital, a Chennai-based lending platform for corporate entities, secured Rs 110 crore worth of equityin an additional round of funding from its existing investor Creation Investments.

This comes just within two months of the Series A funding closure in December 2018, in which the company raised Rs 200 crore from Creation Investments. With the current equity infusion, Vivriti’s overall capital stands at approximately Rs 320 crore.

MSME Lending fuelled by Digitisation (Free Press Journal), Rated: A

MSMEs play a major role in Economic development of India. There are around 63.4 million units and they contribute to 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities and 33.4% of India’s manufacturing output. They have been able to provide employment to around 120 million persons and contribute around 45% of the overall exports from India. The sector grows at a rate faster than the large ones at more than 10% pa.

About 20% of the MSMEs are based out of rural areas.They provide employment to more than 130 million people and contribute to 45% of exports. MSMEs are also the largest employment generator every year. As of Sep18, the total credit in India was Rs 105.5 Lakh crores and MSMEs had borrowed Rs 24.7 cr. Large and Mid Caps borrowed Rs 44.4 cr. Year on Year the growth of overall commercial credit was at 13.5%.

Micro loans which are less than Rs1 cr grew 22.2% year on year and SME loans between Rs1 cr – Rs 2.5 cr grew at 18.3%.The growth was faster than the overall growth. Share of NBFCs in SME credit increased from 13% in Sep 15 to 17% in Sep 18. The number of NBFCs lending more than Rs 100 cr to MSMEs stood at 77 at the end of Sep 18.

Asia

Investment Task Force suspend operation of 168 illegal fintech firms (Antara News), Rated: AAA

The Investment Alert Task Force has suspended the operation of 168 entities allegedly running peer-to-peer lending services without a legal business license from the Financial Service Authority (OJK).
The task force has also suspended the operation of 47 illegal investment entities which has the potential to harm the public.
“Based on the monitoring on website and application in Google Playstore, the Investment Alert Task Force has stopped the operation of 168 entities that have violated OJK regulation no. 77/POJK.01/2016 on fintech peer-to-peer lending services, which has the potential to harm the public,” head of the task force Tongam L Tobing said in a statement here on Wednesday.

Fintech group to help develop P2P lending (The Jakarta Post), Rated: A

A group of financial technology (fintech) lenders wants to help develop a healthier lending industry and protect consumers by setting out a strict code of conduct for its members.The Indonesian Fintech Lenders Association (AFPI) will help stimulate the industry, which only gained government recognition three years ago, by providing risk management certification, public education campaigns and a compulsory code of conduct, which should be uploaded to the AFPI website soon.AFPI chairman Adrian Gunadi said the association had been established to ease the Indonesian Fintech Association’s (AFTECH) workload in dealing with fintech companies that provide lending services, including peer-to-peer (P2P) lending, crowdsourcing and digital credit cards.Such lenders account for 30 percent of all licensed fintech companies, whereas the remaining 70 percent are companies engaged in, among other thing…

Government moves to legalise P2P lending (Vietnam Vet), Rated: A

During a recent meeting with relevant ministries and agencies to discuss P2P lending, Hue instructed that during the pilot operation, P2P lending would be restricted to connecting lenders and borrowers as currently being run by most P2P lending companies in Viet Nam. P2P lending companies would not be allowed to mobilise capital, but act as intermediaries to connect lenders (investors) and borrowers.

The development of P2P lending will also create a new capital supply channel. Research conducted by Transparency Market Research showed that P2P lending would surge by 48.2 per cent annually in the 2016-24 period, while Morgan Stanley forecast the business model would reach a growth rate of 53.5 per cent globally by 2020.

Authors:

George Popescu
Allen Taylor

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

Thursday February 14 2019, Weekly News Digest

OnDeck revenues

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

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

OnDeck revenues

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

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

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

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

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

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

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

Source: Federal Reserve, PeerIQ

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LoanStreet’s new lending features include:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LendIt Fintech USA 2019 (LendIt), Rated: B

April 8-9
Moscone West
San Francisco

HIGHLIGHTED KEYNOTES

Sallie Krawcheck
CEO & Co-Founder
Ellevest

Rob Frohwein
CEO & Co-Founder
Kabbage

Steven Streit
CEO
Green Dot

Mike Cagney
Co-Founder
Figure

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Learn more about 4th Way here.

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

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

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

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

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

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

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

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

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

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

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

European Union

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

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

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

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

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

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

It issued new loans totaling €551 million last year.

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

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

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

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

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

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

International

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

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

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

As Bloomberg reported last year:

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

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

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

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

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

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

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

Australia

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

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

Zip Co. (ASX: Z1P)

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

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

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

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

India

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

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

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

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

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

Asia

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

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

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

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

Canada

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday February 7 2019, Weekly News Digest

origination costs

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

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

origination costs

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

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

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

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1

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

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

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

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

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

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

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

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

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

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

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

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

Source: Online Lenders Alliance

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

Read the full Online Lenders Alliance response here.

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

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

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

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

1. BankMobile — Hooked Up With T-Mobile

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

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

2. Chime — Super Slick App

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

3. Finn — Chase Bank’s Millennial Play

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

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

4. Marcus — Sucking Up Your Customers

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

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

5. N26 — Platform Maestro

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

6. Revolut — The Amazon of Banking

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

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

7. SoFi Money — Join The ‘Waitlist’

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

8. Varo Money — Almost OCC Approved

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

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

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

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

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

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

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

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

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

Key Findings

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

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

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

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

United Kingdom

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

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

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

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

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

Source: Business Insider Intelligence

Read the full report here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

European Union

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

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

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

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

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

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

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

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

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

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

International

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

Milestones achieved this month (total volume since launch):

Source: P2P-Banking

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

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

Source: Business Insider Intelligence

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

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

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

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

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

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

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

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

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

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

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

Australia

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

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

APAC

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

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

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

Africa

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

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

Canada

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

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

iBank Products & Services:

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

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

Authors:

George Popescu
Allen Taylor

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

Thursday January 24 2019, Weekly News Digest

millennials loan money

News Comments Today’s main news: Funding Circle, Stripe partner on small business expansion. Goldman, Citi drop Chinese P2P lenders. RateSetter attracts 75K investors. MarketInvoice gets 56M GBP in equity, debt funding. Hexindai shares credit data with Baihang Credit. Today’s main analysis: PeerIQ on bank earnings. Today’s thought-provoking articles: The link between marketplace lending and personal bankruptcy. 10 best places to […]

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

millennials loan money

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Goldman, Citi Drop Chinese Peer-to-Peer Lenders After Crackdown (Bloomberg), Rated: AAA

First came a sweeping government crackdown and a surge in defaults and failures at thousands of China’s peer-to-peer lenders. Now, in another troubling sign for the industry, some of the biggest investment banks have stopped taking them public.

Wall Street firms including Goldman Sachs Group Inc. and Citigroup Inc. walked away from U.S. initial public offerings of Chinese P2P lenders in recent months, people with knowledge of the matter said. Their concerns mainly stemmed from the timing of the deals, with an uncertain outlook for P2P companies and a slumping market knocking down valuations. In each case, the businesses went ahead with their offerings after finding new underwriters.

Marketplace Lending & Personal Bankruptcy: Cause and Effect (Lend Academy), Rated: AAA

A national wave of personal bankruptcies that began in 2008 reached a peak in the year ending September 2010, when nearly 1.6 million bankruptcies were filed.

Filings fell by 1.8 percent for the 12-month period ending March 31, 2018, compared with the year ending March 31, 2017. The data continues a national trend of declining bankruptcy filings since 2010-2011.

An interesting white paper (The Real Effects of Financial Technology: Marketplace Lending and Personal Bankruptcy) co-authored by Dr. Piotr Danisewicz, University of Bristol and Ilaf Elard, Assistant Professor of Finance at Shanghai University of International Business and Economics was released last summer.

Among the many additional conclusions Danisewicz and Elard reach in the white paper are:

  • The Madden win triggered Lending Club and Prosper, the two largest U.S. marketplace lenders, to reduce lending in the states affected by the verdict.
  • The co-authors attribute the increase in the incidence of personal bankruptcy following Madden to the reduction in marketplace lending. This hypothesis is supported by a number of further results.
  • The consequences of Madden are limited to the enforceability of marketplace loans and suggest that the increase in bankruptcy rates following Madden arises predominantly from changes in marketplace lending.
  • Danisewicz and Elard also rule out that the rise in bankruptcy following the verdict could be the result of an increase in defaults by marketplace borrowers in the affected states. This may occur if marketplace borrowers are over-indebted and default after being unable to obtain additional marketplace loans in the affected states.

Strong Bank Earnings (PeerIQ), Rated: AAA

Banks had a rough quarter for trading revenues. FICC revenues at MS dropped by 30% YoY and by 18% YoY at GSBank of America’s 15% YoY drop in trading revenues was offset by a 10% increase in consumer banking revenuesRevenues at Wells Fargo dropped by 5% YoY driven by lower consumer loan balances. WFC faces a regulatory asset cap until the end of 2019 which is hampering loan growth. JPM was the only bank where the provision for credit losses increased, driven by a reserve build for credit cards due to loan growth.

Source: PeerIQ

10 Best Places to Pay Down Debt (LendingTree), Rated: AAA

Americans’ debt balances continued climbing in 2018, with total consumer debt tracking to top $4 trillion by the end of that year. With balances climbing high, many borrowers will want to use the new year to take their debt down a peg. For those who do so, prioritizing paying off debt can bring major rewards both in the near and long distance future.

86 Million Americans Fear Maxing Out Plastic on Large Purchases (WalletHub), Rated: AAA

The holiday shopping season is over now, and many Americans are seeing the impact on their credit card bills and bank statements. During the holidays, people often make a lot of large purchases, and sometimes max out their cards in order to do so. In a nationally representative survey conducted by WalletHub, 34 percent of respondents say they worry about maxing out their card with a large purchase.

Source: WalletHub

Credit Line Increases Drive Consumer Engagement and are Most Likely to Happen at the Beginning of the Year (AP News), Rated: A

According to a new study from TransUnion (NYSE: TRU), consumers are 50% more likely to receive a credit line increase (CLI) between the months of January and May. However, credit line decreases (CLD) occur at twice the normal rate during the month of January.

Lendio Provides More Than 5,000 Kiva Loans to Support Women-Owned Businesses Around the World (Lendio), Rated: A

Lendio announced today that through continued efforts to support business growth around the world, the Lendio Gives program has funded more than 5,000 Kiva microloans. To-date, Lendio’s employee contribution and employer matching program has provided more than $130,000 in loans to underserved business owners in 78 countries.

Lendio Franchising Named No. 1 Financial Services Brand in Entrepreneur’s Franchise 500 (Lendio), Rated: B

Lendio Franchising recently ranked in Entrepreneur magazine’s Franchise 500, the world’s first, best and most comprehensive franchise ranking. Named #1 in the Business Financial Services category for the second year running, Lendio Franchising was recognized for its outstanding performance in areas including unit growth, financial strength and stability, and brand power. Placement in the Franchise 500 is a highly sought-after honor in the franchise industry; Entrepreneur received more than 1,000 applications this year, making it one of the company’s most competitive rankings ever.

Commercial Real Estate Finance Platform CrediFi Milestone: Total Capital Raised Has Surpassed $ 29 Million (Crowdfund Insider), Rated: A

CrediFi, a fintech and commercial real estate finance platform, on Wednesday it has raised an additional $6 million in funding. This funding comes on the heels of the $13 million previously raised in Series B funding. The company reported that the total amount it has raised has surpassed $29 million.

Lending Express Celebrates $ 100M Lending Milestone & California’s Golden Opportunities (Crowdfund Insider), Rated: A

Lending Express, an Israeli tech company dedicated to creating a better world of funding for SMBs, has surpassed $100 million in financing facilitated between small and medium business owners and online lenders. Lending Express also obtained state permission to open for business in California.

Fundation Launches Digital Lending Capability with Banc of California for Small Business Customers (OAOA), Rated: A

Fundation announced that it has recently launched a digital lending solution in partnership with Banc of California, enabling the California-based bank to offer a new, streamlined end-to-end solution for small businesses seeking a business loan or line of credit. The solution enables small businesses to apply for loans and lines of credit through a simple online application at Bancofcal.com and receive funds in a little as one business day.

Entrepreneurs Take Note: Success Is Within Reach (WWD), Rated: A

With insight from 600 “thriving” U.S. small business owners, a study by global financial services platform Kabbage, Inc. reveals one-third of small businesses started with less than $5,000 in start-up capital.

According to the report, particularly scrappy or thrifty entrepreneurs may want to consider starting a business in one of the three categories costing $5,000 or less “during the first six months.” Accounting; at 45 percent, online retail; at 44 percent and construction and landscaping; at 39 percent represented the least amount of start-up capital, or lowest entry barriers.

Officials caution federal workers of predatory online payday lenders during federal shutdown (News 8), Rated: A

Attorney General William Tong and Department of Banking Commissioner Jorge Perez cautioned federal workers on Wednesday to avoid predatory online payday lenders who may seek to exploit the struggling workers during the partial government shutdown.

Most People Would Not Loan Their Loved Ones Money to Start a Business (Fundera), Rated: A

The time and effort it takes to raise the funds for your startup can quickly get out of hand, which may be the reason that 29% of new small businesses run out of cash and fail.

In fact, 38% of startups are funded by friends and family members.

We surveyed 1,000 Americans on whether or not they would loan a friend or family member money to start their business and found that 82% of people would not loan a friend or family member money to start a business.

Source: Fundera

No Pay Stub? No Problem. Unconventional Mortgages Make a Comeback (WSJ), Rated: A

Lenders issued $34 billion of these unconventional mortgages in the first three quarters of 2018, a 24% increase from the same period a year earlier, according to Inside Mortgage Finance, an industry research group. While that makes up less than 3% of the $1.3 trillion of mortgage originations over that period, the growth is notable because it came as traditional home loans declined. Those originations fell 1.2% over the same period and were on track for a second down year in 2018.

North Capital Launches REITless Impact Income Strategies (PR Newswire), Rated: A

North Capital Investment Technology Inc. recently launched a new investment vehicle, REITless Impact Income Strategies (REITless), focused on lending and strategic debt investments to primarily single- and multi-family real estate development and redevelopment projects that aim to produce positive social impact in communities nationwide. The impact initiatives targeted by the company are energy efficiency, employment generation, affordable housing, and green-housing improvements that promote environmental sustainability. REITless is managed by North Capital Inc., an SEC-registered investment advisor (RIA).

BFS Capital Achieves $ 2 Billion in Financing (BusinessWire), Rated: A

BFS Capital, a leading small business financing platform, today announced it has now issued more than $2 billion in financing to over 22,000 small businesses across the United States, Canada and, through its United Kingdom subsidiary, Boost Capital.

KeyBank To Acquire Online Lending Business Laurel Road (PR Newswire), Rated: A

KeyBank National Association today announced that KeyBank and Laurel Road Bank have entered into a definitive agreement for the acquisition by Key of Laurel Road’s digital lending business; Laurel Road’s three bank branches located in southeast Connecticut are not part of this transaction. Through the acquisition, Key will enhance its digital capabilities with state-of-the-art, customer-centric technology and will leverage Laurel Road’s proven ability to attract and serve professional millennial clients.

GROUNDFLOOR Launches Real Estate Investments Specific To Georgia Residents During Federal Shutdown (PR Newswire), Rated: A

Today, Atlanta-based GROUNDFLOOR is launching new investment opportunities specific to Georgia residents. The crowdsourced real estate investing and lending platform regularly offers investment opportunities to accredited and non-accredited investors throughout the country. Due to the federal shutdown and furloughs at the Securities and Exchange Commission, GROUNDFLOOR is now resurfacing state-by-state securities to continue to offer investors the opportunity to invest on a fractional, self-directed basis in Georgia real estate.

Is community banks’ loan growth too much of a good thing? (American Banker), Rated: A

Total loans at publicly traded banks with assets of less than $20 billion rose 9.2% in the fourth quarter from a year earlier, based on Jan. 18 data compiled by FIG Partners. Publicly traded banks above that threshold have reported a 2.7% increase in loans.

Breakout Capital Finance expands Board of Directors, appoints Neil Gurvitch and Firoze Lafeer (PR Newswire), Rated: B

Breakout Capital Finance, a leading fintech innovator, announces the expansion of its Board of Directors by appointing Firoze Lafeer, company CTO, and Neil Gurvitch as an independent director.  In making the appointments, Carl Fairbank, Breakout’s Founder and CEO, said, “We continue to see rapid growth in our lending- and technology-focused endeavors.  Adding more seasoned leadership continues our expansion and growth plans.”

Samsung NEXT, NBKC Executives and Ellie Mae Veteran Join ProPair Advisory Board (BusinessWire), Rated: B

ProPair, a Silicon Valley innovator using machine learning and predictive decision-making to change how mortgage lenders are assigning and prioritizing their leads, today announced the additions of Leo Chang, Chad Cronk and Nick Hedges to its advisory board.

United Kingdom

RateSetter attracts over 75,000 investors (Bridging and Commercial), Rated: AAA

RateSetter has announced that over 75,000 investors have put money into its platform.

Since its launch in 2010, investors have earned £120m through the P2P lending platform at an average interest rate of 4.4% per year.

RateSetter currently has £830m of investment under management, including £170m invested through its Isa.

MarketInvoice secures £56m equity and debt funding (MarketInvoice), Rated: AAA

Fintech business MarketInvoice today announced it has raised £26m in new equity funding. This Series-B funding round was led by Barclays and Fintech fund, Santander InnoVentures with significant participation from European venture fund Northzone, an existing investor in the company. Technology credit fund Viola Credit, who also participated in the equity round, will provide a debt facility of up to £30m. The facility will help scale the MarketInvoice business loans offering that sits alongside their core invoice finance solutions.

Goldman Sachs’ Marcus platform reveals AUM (AltFi), Rated: A

The US investment giant said its digital bank attracted has more than £5bn in UK savings just three months after its launch.

The US investment giant debuted its online lending and deposit platform, Marcus, in the UK at the end of last summer, and pulled in 100,000 customers and £5.4bn in the final quarter of the year.

Metro Bank shares crash after loans blunder revealed (The Guardian), Rated: A

Metro Bank has revealed a major blunder in how it classifies its loan book, an admission that drove its share price down by nearly 40% on Wednesday, wiping £800m off the value of the company.

The bank, which has been opening new branches as established rivals cut back, revealed that hundreds of millions of pounds of commercial property loans and loans to commercial buy-to-let operators had been wrongly classified in risk terms, and should have been among its “risk-weighted assets” (RWAs).

Glenhawk grows team with LendInvest hire following strong start to 2019 (Property Funds World), Rated: B

Having originated GBP28.4 million of potential loans since the start of the year, and completed on just over GBP4 million, early indications are that 2019 will see accelerated demand for Glenhawk’s fast and flexible short term property finance. Wareham joins Glenhawk’s 20-strong team of real estate professionals, supporting an increasingly diverse range of borrowers across the South of England and Midlands.

China

Hexindai Begins Sharing Credit Data with Baihang Credit (PR Newswire), Rated: AAA

Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, announced today that it has connected its systems and begun sharing credit data with Baihang Zhengxin (“Baihang Credit”).

China crackdown aims to push peer-to-peer lenders out of the industry (Australian Financial Review), Rated: A

Chinese authorities have further tightened controls on the peer-to-peer lending industry, aiming to clear out as many P2P platforms as possible, according to an official document seen by Caixin.

Microlenders need to obtain licences from the regulators and meet certain minimal capital requirements. For instance, a microlender in Shanghai needs to register its business with more than 200 million yuan ($41.2 million). P2P platforms usually don’t have to meet such requirements.

Chinese investors try to storm company after P2P lender failure (Business Times), Rated: A

In the latest sign of turmoil in China’s once booming peer-to-peer (P2P) lending sector, around 80 investors in failed lender Xinhehui protested outside the Hangzhou headquarters of a related company on Tuesday, demanding a US$330 million bailout.

Mrs Xue, who would only provide a surname for fear of retaliation, said she arrived at 8am with around 80 other investors from Zhejiang and neighboring provinces, demanding payment for 2.26 billion yuan (S$452 million) of products that Xinhehui had sold, including 860 million yuan (S$172 million) worth that were due for repayment on Jan 6.

Xi Tells Cadres to ‘Prevent and Control’ Risks as China’s Economic Woes Mount (The Epoch Times), Rated: B

At a high-level meeting of senior Chinese Communist Party officials held in Beijing, Chinese leader Xi Jinping gave an opening speech on Jan. 21 that hinted at the severity of China’s economic downturn.

European Union

Fellow Finance Launches Peer to Peer Lending in Denmark (Crowdfund Insider), Rated: AAA

Finland based peer to peer lender Fellow Finance is now operating in Denmark. The company says it will offer Danish consumers access to credit while Fellow Finance investors will be able to fund Danish loans. Currently, Fellow Finance provides consumer loans in Finland, Germany, Poland, and Sweden.

Note to Irish and US parents: college not the only path for your cherished offspring (Irish Central), Rated: A

According to the student loan marketplace www.lendEDU.com, the average debt per borrower at a public college is $26,872. This rises to $31,710 if you’re inclined to a private college experience. For graduate school students – whose parents have by now presumably said, “Time to pay your own way, sunshine” – the average debt is a staggering $57,600.

International

Funding Circle partners with Stripe to help small businesses expand (PR Newswire), Rated: AAA

Funding Circle, the global small business loans platform, today announced that it has joined the Stripe Partner Program, providing businesses using Stripe with access to affordable business financing through Funding Circle. As a verified extension partner, Funding Circle now enables Stripe users to import their data directly and securely to apply for a business loan up to $500,000 — making the process faster and easier so they can get back to running their businesses.

Boost Capital ups firepower as US parent hits $ 2bn lending milestone (AltFi), Rated: A

Small business lender Boost Capital has refinanced its credit facility lifting its funding capacity to $60m, as its US parent targets European growth.

The Chelmsford-based platform, which provides business loans and merchant cash advances, said it upped its credit firepower from $40m after signing a deal with New York-based investment firm Atalaya Capital Management.

India

Matrix Partners invests in P2P lending platform LiquiLoans (Techstory), Rated: AAA

Mumbai based peer to peer lending platform LiquiLoans, one of the few players to have secured a P2P license, has now secured an undisclosed amount of funding from some of the existing investor that is Matrix partners India.

Fintech startup floated by ex-Lendingkart execs MoneyOnClick raises funding (VC Circle), Rated: A

Two former executives from online lending platform Lendingkart have quit the firm to set up a new venture in the alternative lending space, catering to consumers.

According to their respective LinkedIn accounts, the startup, which has been operational since October 2018, has already raised $2.25 million (Rs 16.02 crore at current exchange rates) as part of its first institutional funding round from undisclosed investors.

Women, non-metros topping up on credit, says BankBazaar survey (MoneyControl), Rated: A

Non-metro cities have emerged as the bigger market for unsecured credit in terms of volume than the metros in 2018, according to BankBazaar Moneymood 2019 report.

The average personal loan ticket size in non-metros is Rs 2.80 lakh compared to Rs 2.55 lakh in metros. The unsecured credit portfolio includes personal loans and credit cards which are used more for consumption activities than secured loans.

Online rental marketplace Sacorooms Rises fresh funding Pre-Series A (Times of India), Rated: A

Sacorooms, a start-up that is building co-living spaces, has closed a pre-Series A round of funding for an undisclosed amount from Mr. Broadway. The investment comes after a strategic round led by Incubate Fund and a group of investors from the real estate industry this year.

Asia

OJK Zero Down Payment Policy Drives Multifinance Growth (Tempo.co), Rated: AAA

The recent policy of zero percent down payment for vehicle credit issued by the Financial Services Authority (OJK) believed to be able to drive the performance of the multifinance industry. Businesses are confident that multi-finance companies will perform better with the new regulation.

Chairman of the Indonesian Financing Company Association (APPI) Soewandi Wiranto, said that the business expansion stated in the new regulation can increase financing industry growth. Based on APPI’s calculation, industrial asset growth for 2019 can reach up to 9 percent while the growth rate of receivables is predicted to be in a range of 6 to 7 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

Tuesday November 20 2018, Daily News Digest

Consumers pick for Robo-Advisory Source

News Comments Today’s main news: Klarna launches Boost. Funding Circle going where banks won’t. Zopa CEO says marketing restrictions appropriate for riskier platforms. ApplePie Capital hits $300M franchise loan milestone. Menē, Affirm partner. Today’s main analysis: SoFi and Prosper Q3 earnings. Today’s thought-provoking articles: LendingClub is healthier than ever. Average homeowner age in U.S. metro areas. Robo-advisors growing. Top 5 emerging […]

Consumers pick for Robo-Advisory Source

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

ApplePie Capital Reaches $ 300 Million Milestone in Franchise Business Loans (Citizen Tribune) Rated: AAA

ApplePie Capital, the first and only online lender dedicated to franchising, announced that it recently surpassed $300 million in loans originated to franchise entrepreneurs opening or expanding their businesses.

SoFi and Prosper 3Q Earnings, Volatility Ahead, PeerIQ’s Lending Earnings Insights (Peer IQ) Rated: AAA

The gap between current and projected financial conditions continues to widen suggesting greater volatility ahead:

Source: PeerIQ, The Daily Shot, St. Louis Federal Reserve

Prosper’s 10Q revealed that the company lost $19.8 Mn in 3Q, a $7.2 Mn improvement YoY. Net revenues declined from $28.9 Mn to $20.7 Mn YoY. Originations declined from $822 Mn to $640 Mn YoY driven by tighter credit guidelines and rising interest rates.

SoFi’s EBITDA loss in Q3 was $12 Mn compared to an EBITDA gain of $56 Mn in Q3 2017. SoFi’s originations were $2.5 Bn, down by 30% YoY. Rising rates have slowed SoFi’s student loan refinancing business and have contributed to the drop in originations. SoFi now has 700 k checking account customers and the company is branching into offering a suite of wealth management services to these customers. SoFi recently closed a $560 Mn line of credit.

Below is a comparison of key financial metrics of Prosper, SoFi, and their publicly-traded counterpart LendingClub.

Source: PeerIQ

LendingClub: Looking Healthier Than Ever (Seeking Alpha) Rated: AAA

Investors are barely noticing it, but LendingClub (LC) continues to pump through another record-setting quarter as the P2P lending platform shores up its core business and boosts its profit targets for the year. Volatility has largely left LendingClub stock; the company has traded in the $3-4 range for the better part of this year as investors have moved on to more exciting names, but in my view, LendingClub is well-positioned for a near-term rebound.

On the back of LendingClub’s strong Q3 report, the company also inched up its guidance for FY18. The forecast now calls for $693 million in revenue and $91.5 million in EBITDA at the midpoint of management’s ranges:

Source: LendingClub

Court appoints lead plaintiffs in class action against LendingClub (Northern California Record) Rated: A

The U.S. District Court for the Northern District of California appointed lead plaintiffs in a class-action suit against LendingClub, alleging the San Francisco-based company tried to artificially inflate securities and defraud investors.

The plaintiffs, under the title LendingClub Investor Group (LIG), include Xiangdong Ding and Zhenbin Chen, who will serve as lead plaintiffs in the suit according to the Nov. 7 ruling. Ding and Chen invested in and allegedly suffered substantial monetary losses as a result of the fraud.

LendingTree Compares Average Homeowner Age Across 100 Largest U.S. Metropolitan Areas (Lending Tree) Rated: AAA

LendingTree set out to find which metro areas have the oldest homeowners. Using data from the U.S. Census Bureau’s American Community Survey, we ranked the 100 largest metropolitan areas by average homeowner age. While some of the rankings aren’t surprising (Florida metros dominate the “old” end of the list), cities popular among millennials aren’t necessarily gaining young homeowners.

Key findings

  • The average age of a homeowner across the 100 largest metropolitan areas in the United States is 54. Only two metros in our analysis — Provo and Ogden, Utah — have an average homeowner age below 50.
  • Homeowners in Florida are older than homeowners in most other states. Seven out of the top 10 metropolitan areas with the highest average homeowner age were in Florida.
  • Homeowners in cities in Utah are among the youngest in the country. Out of the top 10 metropolitan areas with the lowest average age for homeowners, metropolitan areas in Utah — Provo, Ogden and Salt Lake City — held the top three spots.
Source: LendingTree

LendingHome Shines Spotlight on California in First-Ever “State of The Flipping Market” Report (PR Newswire) Rated: A

LendingHome today released a never-before-seen, inside look at localized market statistics based on a combination of LendingHome proprietary data and publicly available real estate records.

LendingHome’s inaugural “State of The Flipping Market” focuses on California which experienced the biggest surge in brand-new house flippers – those who buy, rehabilitate (fix), and resell (flip) residential homes – compared to any other state in 2017. California was also LendingHome’s top state for loan originations in 2017.

LendingHome’s report also pinpoints California’s Top 10 flipping hot spots by county. Ranking first was Los Angeles County, where a whopping 25.71% of all houses purchased were flips. The Top 10 in order:

Source: PR Newswire

Real Estate Crowdfunding Pros Respond to RealtyShares’ Troubles (National Real Estate Investor) Rated: A

Executives at three of RealtyShares’ real estate crowdfunding counterparts—ArborCrowd, CrowdStreet and EquityMultiple—say the collapse of a player like RealtyShares is an unfortunate but inevitable growing pain in an evolving industry. Charles Clinton, co-founder and CEO of EquityMultiple, calls the RealtyShares situation a “natural blip.”

The fall of RealtyShares isn’t “an indicator of the health or the longevity of this industry,” Steen says. “It’s actually an indicator that the industry is maturing. In an industry like this—crowdfunding of commercial real estate—you’re going to have certain business models that survive and certain ones that might not.”

Plastiq Raises $ 27M in Series C Funding (FinSMES) Rated: A

Plastiq, a San Francisco, CA-based provider of a solutions to pay bills by credit card, raised $27m in Series C financing.

The round was led by Kleiner Perkins with participation from DST Global. In conjunction with the funding, Kleiner Perkins general partner, Ilya Fushman, will join the Plastiq Board of Directors.

The company intends to use the funds to accelerate growth and roll out new services, develop and deepen its partnerships with key players in the financial and payments sectors, such as MasterCard and other major card brands.

SuperMoney Launches Student Loan Refinancing Marketplace (Finovate) Rated: A

Financial services comparison site SuperMoney is venturing into new territory this week with the launch of its student loan refinancing comparison marketplace. And since student loans are the largest source of unsecured debt in the U.S., with outstanding loan amounts totaling $1.53 trillion, now is as good a time as ever for the new endeavor.

The new marketplace aims to help students make smarter decisions when refinancing their existing student loans. By submitting a single application, users can receive actual rate quotes in real time from multiple lenders, including LendKey, CommonBond, and SoFi. Each offer transparently shows users a breakdown of monthly costs, payments, and fees so that they can make the best decision based on their circumstances.

7 ways to finance your investment home renovation (AZ Big Media) Rated: A

2. Open a Home Equity Line of Credit – If you’ve been paying down your mortgage for a few years, you’ll have built sizeable equity into your home. Assuming you have decent credit, most banks will give you a line of credit based on that equity.

4. Look into Peer-to-Peer Lending – Peer-to-peer lending is another way to get funding with a comparatively low barrier to entry. Investors put their extra cash into a peer-to-peer lending platform so you borrow from individual investors rather than a bank.

6. Crowdsource the Money – If friends and family are sympathetic to your needs, you may be able to generate funds from them. It’s easy to collect money through crowdsourcing with platforms such as GoFundMe.

Klarna Cuddles Up With Gravity Blanket To Give Consumers The Luxury Of Paying Over Time (PR Newswire) Rated: B

Today, Klarna, a leading global payments provider, announced a new collaboration with Gravity Blanket, creator of weighted blankets and sleep products engineered to naturally reduce stress and increase relaxation. Shoppers will now be able to use Klarna’s Slice it and brand-new Slice it in 4 products, which allow consumers to pay for their products in installments.

ArborCrowd Co-Founder Adam Kaufman Recognized as a HIVE 50 Innovator (AP) Rated: B

ArborCrowd, the only online platform that enables individuals to make equity investments in institutional-quality commercial real estate, announced today that its Co-Founder and Managing Director, Adam Kaufman, was named a HIVE 50 Innovator by Hanley Wood, the premier company serving the information, media, and marketing needs of the residential and commercial design and construction industries.

The prestigious HIVE 50 is made up of the top people, products, and processes that are leading the charge to inspire creativity, improve performance, and explore better ways to build. This year’s honorees were separated into five categories. Mr. Kaufman was selected as one of the top innovators in the “Capital” category for his role in co-founding and leading ArborCrowd, which provides accredited investors with access to institutional-quality real estate investment opportunities.

United Kingdom

Funding Circle Is Going Where Banks Won’t (Barrons) Rated: AAA

One company that isn’t quite doing that is Funding Circle , the platform lending company founded in the U.K. in 2010. After an initial public offering earlier this year, it’s publicly traded on the London Stock Exchange with a $1.6 billion market cap.

That’s a lower valuation than the company hoped for and that “less than giddy IPO,” as Bloomberg put it, has been seen as a cautionary data-point for other soon-to-be-public fintech lenders.

Zopa CEO: Marketing restrictions appropriate for riskier platforms (Peer2Peer Finance) Rated: AAA

ZOPA’S chief executive has said that proposed investor marketing restrictions are appropriate for platforms that offer riskier manual lending opportunities but not for them.

Jaidev Janardana (pictured) said that when an investor is lending against one property or one business, this could be riskier and “we need to make sure investors are sophisticated when they make these decisions”.

Robo-advisors are growing but incumbents still dominate investment services (Business Insider) Rated: AAA

A growth in the demand for low-cost investment services in the UK is driving new investor uptake in fintech robo-advisors, according to Boring Money research. Through Q3 2018, 800,000 new DIY investment accounts — where customers decide on investment choices without the help of financial advisors — were opened in the UK.

Source: Business Insider

Of those new account openings, a third were with one of the UK’s leading fintech robo-advisor operators, including Nutmeg and Moneyfarm, compared with 11% a year ago. The total number of DIY investment accounts, inclusive of customers of robo and traditional platforms, rose to 4.8 million in the same period — a 22% uptick.

Klarna launches search for UK’s ‘Smooothest Stores’ (Fashion United) Rated: A

Klarna is searching for eight small and medium-sized enterprises to help them grow and take their businesses to the next level with its ‘Smooothest Store’ competition.

Open to businesses specialising in fashion, jewellery or lifestyle products, who are less than two years old, with an e-commerce store and a turnover in excess of 100,000 pounds per annum, the competition will help the winning up-and-coming retailers with a tailored combination of guidance, finance, and Klarna’s in-demand Pay later payment product.

FCA hails positive impact of P2P regulation for cryptos (Peer2Peer Finance) Rated: A

Speaking at the LendIt Fintech conference in London, Chris Woolard (pictured) said the FCA wants the UK to be a “good place” for cryptoassets but it must be safe for consumers.

He highlighted that the way P2P platforms have become authorised shows that regulation is not to be feared.

Customer journey of trying to get a loan and how it could be improved (Lendit) Rated: A

Today’s customers are looking for transparency and speed. My credit card provider had years to collect data on my and had ample opportunity to contact me and explain what information they needed. Sadly they chose to wait for me to get fed up with their slow process. We see companies struggle everyday with the balance between calculated risk and customer experience. At Equiniti we have dealt with many similar situations in which we try to find the right balance for our client so that they can offer their client the credit they need in a safe and structured way without sacrificing speed. Perhaps it is time that I offer this service to my own bank. But I would make them ask me 3 times………

Paul Stallard: Why should advisers recommend peer-to-peer lending? (Professional Adviser) Rated: A

Peer-to-peer lending is growing in popularity among borrowers and investors but where could financial advisers fit into the picture? Paul Stallard has some thoughts on the matter.

Peer-to-peer lending is growing in popularity among borrowers and investors alike, offering a flexible alternative to traditional investment products. In particular, peer-to-peer lending is catching on among property investors, with platforms offering attractive returns without the associated hassle and risk of traditional buy-to-let investing.

European Union

Klarna launches financing program Boost (Ecommerce News) Rated: AAA

Klarna has launched its own financing program for SME retailers in Europe. The new initiative is called Boost and is aimed to further support retailers in accelerating their growth. The company promises the application process will be simple and straightforward.

Klarna’s Boost is currently available in Austria, Denmark, Finland, Germany, the Netherlands, Norway and Sweden for selected merchants only, but it will be widely available in these seven European countries from the beginning of December.

The company explains the release by saying how cash flow is often one of the biggest hurdles for entrepreneurs and small businesses who want to grow further.

How direct lending and securitization can disrupt consumer lending in the Nordics (Lendit) Rated: A

The consumer credit market in Sweden is a relatively large and growing market. The total loan volumes amount to approximately Bn EUR 23, distributed among 1.4 million individuals. According to the Swedish central bank, the average interest rate is 12.5% ​​and credit losses are between 0.9% to 1.5% per annum.

The funding predominantly comes from Swedish banks and niche banks which are advanced in digitization and benefit from the Swedish population being used to managing their finances online. However, digitization has not contributed to improving competition or the conditions for consumers. Instead, net interest rates (rates after deduction of funding costs) have risen well beyond 8-10% and created the world’s most profitable banks with a return on equity often well above 30%.

International

Menē Inc. Partners with Affirm to Offer New Credit Alternative to U.S. Customers (Business Wire) Rated: AAA

Menē Inc. (TSX-V:MENE) (“Menē” or the “Company”), an online 24 karat investment jewelry brand, today announced its partnership with Affirm, which provides U.S. customers with a new option based on real-time credit decisions that allow them to split Menē purchases into monthly payments while receiving items directly following payment capture.

Qualified U.S. customers will be offered 0% APR loans for 3 or 6-month terms, while remaining customers will be offered 10-30% APR loans for 3, 6 or 12-month terms. For example, a $600 loan over six months at 0% APR would cost $100 per month. Affirm’s offering is in addition to Menē’s existing Harvest Plan payment program, which remains available to Canadian and other international customers.

Top 5 Emerging Fintech Hotspots in 2018 (Bank Innovation) Rated: AAA

Charlotte, N.C. 

According to a report, the city has seen a 28% increase in technology jobs in the last five years.

The city already has major fintech players like online marketplace LendingTree, automated bill solutions provider AvidXChange, home lending platform Movement Mortgage, mobile payment companies like Passport and Payzer, and the list goes on.

Mexico City, Mexico

It’s already home to fintechs like Bankaool, a challenger bank offering an annual interest rate of 3.75%; Conekta, an AI-powered platform develops that helps FIs in Latin America detect and prevent fraud; as well as CLIP, a Square Cash-like company that allows merchants to turn their phones and tablets into POS terminals.

SALT Lending Platform Investigated, WSJ Continues Attack On Erik Voorhees (Crypto Disrupt) Rated: A

The WSJ reports that a subpoena was sent to the SALT lending platform this February and the SEC is currently evaluating whether or not the ICO constituted an unregistered securities offering. SALT’s troubles do not end there. The SALT CFO has also filed a lawsuit against the company because favorable loans were given to company executives and family members.

India

How FinTech is Changing the Game for Microbusinesses (Entrepreneur) Rated: AAA

The FinTech ecosystem is a financial evolution in itself. Right from money transfers to personal loans, from account management to asset management, FinTech is rapidly making its way into the lives of the tech-savvy microentrepreneurs of today. Just a few years ago, the only way to start a business was to approach a bank or an investor for financial assistance. Thanks to FinTech, the micro or small businesses now can choose to no longer go through the conventional methods to get microloans for starting, running or scaling up their businesses.

FinTech has opened a whole new world of opportunities for small businesses. They can now offer more and better services at a reduced price. But, if you want to not only sustain but succeed in your business, it is important that you embrace technology and stay up to date with the latest FinTech developments.

Asia

Chinese fintech firm CashCash gets funding while website and app are blocked in Indonesia (Krasia) Rated: AAA

P2P (peer to peer) lending has grown popular in Indonesia. These online lenders promise quick loans with few questions asked. According to Indonesia Investments, credit disbursement through P2P lending in Indonesia has soared 204.7% this year.

Hundreds of fintech startups launched in Indonesia with variations of the P2P loan model; some of the older players are starting to see traction, while some others are facing various challenges due to increasingly stringent regulations.

The Financial Services Regulator, OJK, at some point put out a list of more than a hundred online lenders that it had banned for pushing into the market without going through the mandatory registration with the regulator, but that doesn’t appear to deter startups from participating in the lending gold rush.

Canada

HSBC eCredit: New Service to Streamline Banking for Small Businesses (Globe Newswire) Rated: AAA

Biz2Credit is working with HSBC Bank Canada to give Canadian small business owners quicker and easier access to apply for business financing.

HSBC eCredit is a digital-first approach to lending, which will allow small business owners to apply for financing online. Currently available by invitation in selected areas, HSBC eCredit will be fully available country wide in English December 2018 and in French the following month.

Authors:

George Popescu
Allen Taylor

Monday August 20 2018, Daily News Digest

transition states

News Comments Today’s main news: SoFi is shopping for $1B credit line. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2018.2. Monzo headed to unicorn status. China Rapid Finance debuts up to $20M share repurchase program. Today’s main analysis: Forcasting cash flows using machine learning. Today’s thought-provoking articles: Report sheds light on early success of real […]

transition states

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

SoFi Eyes $ 1B Credit Line, Post Q2 Loss (PYMNTS), Rated: AAA

Student loan refinancing company Social Finance (SoFi) is looking for a loan of its own: The company is in talks with banks to secure a revolving credit line of as much as $1 billion after posting a second-quarter loss.

KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2018-2 (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Prosper Marketplace Lending Issuance Trust 2018-2 (“PMIT 2018-2”). This is a $500.5 million consumer loan ABS transaction.

Preliminary Ratings: Prosper Marketplace Issuance Trust, Series 2018-2

Class Preliminary Rating Initial Class Principal
A A+ (sf) $335,500,000
B BBB (sf) $59,950,000
C B+ (sf) $105,050,000

Forecasting Cashflows using Machine Learning, Strong Retail Sales Report (PeerIQ), Rated: AAA

The price of a loan is the present value of the loan’s cashflows (after accounting for losses and prepayments), discounted by an appropriate discount rate:

Source: PeerIQ

Cashflow Modeling with Credit Models

The inputs of a credit model are loan attributes and borrower factors such as:

  • Originator of the Loan
  • Term of the Loan
  • Interest Rate on the Loan
  • Original Principal of the Loan
  • Age of the Loan (Months on Book)
  • Loan Grade
  • Prior Loan Status
  • Borrower’s Credit Score at Origination

The sparse transition model assumes 7 possible loan statuses which describe the performance of the loan:

  1. Current (or Status C)
  2. 1 Month Delinquent (or Status 1)
  3. 2 Month Delinquent (or Status 2)
  4. 3 Month Delinquent (or Status 3)
  5. 4 Month Delinquent (or Status 4)
  6. Default (or Status D)
  7. Paid Off (or Status P)
Source: PeerIQ

Once a loan arrives at a terminal absorbing state (“Defaulted” or “Paid Off”) there is no future possible transition as there are no further cashflows. Therefore, the probability of a loan remaining defaulted is 100%.

Source: PeerIQ

Model Calibration

Source: PeerIQ

PeerIQ CEO Ram Ahluwalia on OCC Fintech Charter: Consumers Win if it is Implemented Correctly (Crowdfund Insider) Rated: A

We asked Ahluwalia who will benefit from the OCC Fintech Charter and whether it was big tech, Fintechs or other.

“The long-term winner of the charter is the US consumer who will benefit from greater competition, innovation, and access to the financial system. New technology and entrants will also promote the dynamism and resilience of the US financial system,” stated Ahluwalia. “Payments companies that seek to compete with Visa / Mastercard also stand to benefit. Payments arms of firms like Google, Apple, Amazon, and PayPal would fit the profile, as well as large non-bank lenders that can demonstrate sustainable profitability de-risked their business models. Fintech lenders are a major winner as well as they’ll be able to compete on a more level playing field. Big technology firms have an opportunity to expand their role in financial services as well.”

New Research Sheds Light on Early Successes  of Real Estate Crowdfunding (EquityMultiple Email), Rated: AAA

Some of the survey’s key findings include:

  • A full 65 percent of respondents plan to allocate at least 10 percent of their portfolios to real estate crowdfunding sites, with nearly 40 percent expecting to allocate at least 20 percent
  • More than 60 percent of respondents report typical annual returns of at least 8 percent
  • Respondents considered “transparency and details with respect to investment opportunities” the most critical factor in a crowdfunding platform, exceeding all other choices, including “attentive customer service” and “diversity of investment opportunities”
  • With respect to individual investments, “geographic focus” (i.e. where a property is located) matters less to investors than “sponsor/lender experience”, the property’s upside potential or several other factors
Source: Real Estate Crowdfunding Investor Preferences

Read the full report here.

Key Facts About the SBA (Email from SmartBiz Loans ) Rated: AAA

Source: SmartBiz Loans

Many Fintech Names on the Inc. 5000 List of Fastest Growing Companies (Lend Academy) Rated: A

Of the 5,000 companies on this year’s list exactly 233 are in the financial services category. Below is a screenshot of the top 10 companies in this category. Leading the list is Fundrise, the real estate platform for individual investors, a name that would be familiar to Lend Academy readers (I interviewed CEO Ben Miller on the podcast last year). Another well known name is Fundera, the small business lending marketplace, who were the third fastest growing company in our category. I encourage you to explore the complete list here where you can search for specific companies or filter by industry, state and many other criteria.

Source: Lend Academy

Treasury’s plan to legitimize online lenders is good for small businesses (The Guardian) Rated: A

Companies in this industry such as KabbageLending Club and BlueVine have grown significantly over the past few years by offering financing to many small businesses that otherwise would not be able to get loans. Their deals are quick to approve, rarely require collateral and are usually tied in to a customer’s financial systems for close monitoring.

Last month, the Office of the Comptroller of the Currency announced that it was moving ahead with its plan to allow online lenders to apply for banking charters. When recognized as a bank, those types of financiers would no longer have to comply with state laws and would instead be subject to federal banking regulations. “Companies that provide banking services in innovative ways deserve the opportunity to pursue that business on a national scale as a federally chartered, regulated bank,” Joseph Otting, the comptroller of the currency, one of the country’s top financial regulators, told the Los Angeles Times.

RPT-‘Fintechs’ sound cautious note on offer of U.S. bank charter (Rueters) Rated: A

Financial technology companies that lend online are sounding a cautious note on a U.S. banking regulator’s plan to offer them special federal charters because of concerns over legal challenges and requirements that are more onerous than expected.

The Office of the Comptroller of the Currency said last month it would accept applications for banking licenses from the likes of LendingClub and OnDeck Capital Inc, online lenders that do business outside the traditional banking system. They then could operate nationwide under one banking license rather than a patchwork of state-specific regulations.

Fintech executives lobbied for the license and applauded the OCC’s decision, but they are not immediately rushing in, they told Reuters.

CRA-like standards for fintechs could reduce access to credit (American Banker) Rated: A

As reported in American Banker, consumer advocacy groups are concerned that financial inclusion expectations for fintechs chartered as special-purpose national banks may not perfectly mirror the requirements of the Community Reinvestment Act.

This possibility exists because the final version of the Office of the Comptroller of the Currency’s licensing manual supplement for fintechs lacks the same level of specificity as the draft manual that was published for comment last March. Consumer advocates have been steadfast in their insistence that the substance of the CRA, which by its terms applies only to depository institutions, be applied to nondepository fintech national banks. Yet imposing CRA-like requirements on these institutions would likely result in reduced credit opportunities for low-income communities.

Walmart And Others Offer Workers Payday Loan Alternative (NPR) Rated: A

So when Loving heard about a company called PayActiv, a tech startup that helps companies get their workers emergency cash for very small fees, “I thought to myself, now that’s a good idea,” he says. And he signed up.

“Our data analysis showed that it was close to $150 a month being paid by the working poor — per employee or per hourly worker in this country,” says Shah. “That’s a substantial sum of money because it’s about $1,800 or $2,000 a year.”

Venmo competitor Zelle wants to let you pay businesses, too (Payment Source) Rated: A

Zelle, a Venmo-style app that lets consumers send money to friends, roommates and babysitters, is working on ways to ensure that customers can safely pay small businesses as well, according to people familiar with the situation.

Zelle, backed by Bank of America Corp., JPMorgan Chase & Co. and other banks, is beefing up its risk-assessment tools as part of the effort, according to one of the people, who asked not to be identified because the feature hasn’t been announced. The idea is to help protect users when they’re paying businesses like gardeners and hairdressers.

TransUnion Unveils Solution to Extend Real-Time Credit Offers (DSNews) Rated: A

To meet the evolving needs of consumers, Chicago-based TransUnion has announced the launch of credit offers through a simplified, SMS-initiated, mobile experience. The technology seamlessly integrates real-time credit decisioning with consumer and device authentication, creating a secure, personalized, and dynamic user experience.

Credit Karma acquires US lendtech Approved (Fintech Futures) Rated: A

Credit Karma, based in San Francisco, has 80 million members across North America, almost half of which are millennials and 80% of which access the service via their mobile devices.

Andy Taylor, founder and CEO of Approved, says it started the firm with a “vision that borrowers could visit an open house not having even talked with a lender, find the home of their dreams, and get fully pre-qualified on their mobile device before a listing agent offered them a business card”.

With this joint mobile mentality, both firms will be looking to cash in from the crowded US mortgage market. Approved says it has done nearly $5 billion in loan originations.

RealtyShares and Novaya Real Estate Ventures Exit Industrial Property Investment (Herald Courier), Rated: B

RealtyShares, an online platform for commercial real estate investing, has announced that one of its investment syndicates recently exited an industrial investment property—1 Distribution Center Circle in Littleton, Massachusetts—in partnership with Novaya Real Estate Ventures, an established Boston-based operator of commercial real estate throughout New England.

United Kingdom

Monzo poised to join ranks of Europe’s fintech ‘unicorns’ (Financial Times) Rated: AAA

Monzo, the British digital bank popular with millennials, is set to become the latest European fintech “unicorn” with a fresh round of fundraising expected to put a valuation on the company of up to $1.5bn.

The east London-based online bank, known for its distinctive pink cards, is signing up 18,000 customers a week and aims to reach as many as 4m customers in the next couple of years, according to Tom Blomfield, its chief executive.

Seven out of 10 people in UK now bank online (Financial Times) Rated: AAA

While email is still the most common reason people use the internet, online banking is the fastest-growing use. According to a survey by the Office for National Statistics — looking at the UK population, not just internet users — 69 per cent said they banked online, almost double the proportion recorded 10 years ago (35 per cent).

The ONS began running its survey in 1998. In the case of internet usage, people were asked about their use in the January, February and April before the survey.

Source: Financial Times

How P2P plugged the funding gap for small businesses (P2P Finance News), Rated: A

BEFORE the global financial crisis, banks were the lender of choice for Britain’s small businesses, and perhaps the only option they would consider.

Since then, banks have become more risk averse and are pulling back from lending in some parts of the market, especially since the EU referendum. Peer-to-peer, or rather peer-to-business (P2B), lending has stepped in to fill the gap.

The Peer-to-Peer Finance Association (P2PFA) says the industry provided £660m of new lending to businesses in the first quarter of 2018 and, since the third quarter of 2017, there has been a 35 per cent increase in net lending.

US-based payday loan giants Curo, QuickQuid and Lending Stream could face legal action in ‘bigger scandal than PPI’ (Daily Mail Online) Rated: A

Giant American payday lenders could face legal action in the UK today after they were accused of mis-selling loans to up to a million Britons.

Paydayrefunds.co.uk are preparing legal action against Quickquid, Curo and Lending Stream after the US-payday lending giants have so far refused to disclose information on customers who could be due tens of millions of pounds back in compensation.

The company issued a letter of action six months ago, which is due to run out next Friday. Paydayrefunds.co.uk revealed they have already appointed a barrister in preparation for issuing an injunction at the High Court against the lenders.

Income investing, inflation and P2P lending (Investors Chronicle), Rated: A

Emma Aygemang gives us a report on the Financial Conduct Authority’s study on peer-to-peer (P2P) investing, and there’s a discussion on the implications of restricting the sector to private investors, and where P2P providers need to up their game.

Crypto Lending App Lndr, Adds PayPal Integration to Increase Adoption Rates (Bitcoin Exchange Guide), Rated: B

A new cryptocurrency lending app called Lndr is planning integration with one of the most popular financial services in the world: PayPal. This integration will open the ownership to digital assets to 100 million people around the world, which can cause an unseen widespread of cryptocurrency usage even for people who never before considered using cryptocurrencies.

China

China Rapid Finance Debuts Up to $ 20 Million Share Repurchase Program (Crowdfund Insider), Rated: AAA

China Rapid Finance Limited (NYSE: XRF), one of China’s largest consumer lending marketplaces, announced earlier this week the launch of its new share repurchase program, which allows the lender to authorized the repurchase of its ordinary shares in the form of American depositary shares with an aggregate value of up to $20 million.

China regulator orders bailout of peer-to-peer lenders by managers of distressed assets (SCMP), Rated: A

During a Wednesday meeting in Beijing, the China Banking and Insurance Regulatory Commission asked four managers of distressed assets – Huarong, Cinda, Great Wall and Orient – to extend their mandate to non-performing loans owed by peer-to-peer (P2P) lending platforms, according to a source familiar with the matter. The meeting was first reported by Reuters on Thursday.

Regulations help resolve P2P plight in China (Global Times) Rated: A

In July, a total of 165 platforms reported problems, among which 65 percent had difficulties in investments withdrawal, while executives of 8.72 percent of those firms stole money and ran away, according to a report released by domestic industry website wdzj.com on August 1.

Accumulated transactions in the domestic P2P industry had reached 7.48 trillion yuan by the end of July, the report said.

On Wednesday, the China Banking and Insurance Regulatory Commission asked the country’s four State-owned asset management companies to help address rising risks in the P2P sector, according to media reports.

China orders bad-loan managers to help failing P2P lenders (Financial Times), Rated: A

China’s banking regulator has instructed the country’s four state-owned bad loan managers to deal with failing peer-to-peer lending platforms, a sign of Beijing’s concern about possible financial and social instability from the shadow banking sector.

Hundreds of P2P platforms have collapsed in recent months due to borrower defaults and fraud by platform operators. The defaults have sparked panic among investors, some of whom have sought early redemption of their investments.

European Union

European IPOs may shake off sluggish start with a fall bonanza (Gulf Times) Rated: AAA

European markets are set to see a slew of big initial public offerings this fall. Potential mega listings – from companies such as Aston Martin, Volvo Cars and Spanish oil firm Cepsa Trading – could help Europe overcome a relatively slow first half. IPOs there have raised about $31bn in 2018 so far, compared with almost $38bn in the same period last year, data compiled by Bloomberg show.

Still, volatile markets threaten to spook investors and owners away from new share sales. Concerns that turmoil in Turkey could hurt the region’s lenders has added to pressure on European stocks from the US-China trade spat. Commodities have tumbled along with US equities, fuelling fears that the sell- off may be the start of a broader market correction.

International

Disruption or evolution? Why blockchain is the future of global lending (IT Pro Portal), Rated: AAA

Global spending on blockchain solutions is estimated to reach $2.1 billion this year, but for there to be a blockchain revolution, many barriers – technological, political, organisational and societal – need to be overcome first.

Currently, citizens in Europe have the lowest levels of ‘complete trust’ in traditional banks. This is worrying, given money is simply a means of exchange, built on the trust bestowed upon it.

However, some bankers will tell you the traditional financial system is ‘global’ and ‘efficient’ as it is, despite being fully aware of its flaws. In our industry, lending, if you’re currently a non-bank lender who would like to diversify your global lending potential, you will find that it is punitively expensive, time-consuming and exclusive to large funds and traders. This ultimately reduces the potential reward for non-bank lenders through fees.

Given the astonishing fact 39 percent of the world’s population are unbanked, blockchain technologies and associated crypto currencies could open the door for anyone, anywhere to lend, borrow and invest. All you need is internet access.

Australia

Aussies borrow money not knowing how personal loans are assessed, study finds (Daily Telegraph) Rated: AAA

AUSTRALIANS have borrowed $46.6 billion in personal loans over the past 12 months, research has found, but experts claim many are unaware of how loan applications are assessed and how they may affect their own credit scores.

RateCity analysed Australian Bureau of Statistics data from the past 12 months and found personal loan numbers were up 6.4 per cent year on year, with more than half a million Australians using them to buy cars in that period. The total borrowing for new cars was $8.33 billion at an average loan size of $36,341; while a further $5.88 billion was borrowed for used cars.

On top of this, we borrowed $6.05 billion for debt consolidation and $2.54 billion for household goods, but despite the huge outlay, many borrowers are confused about how personal loans work and why they may not be offered the low interest rates they see on advertisements.

India

P2P has great potential, but too early to compare with equities (India Times), Rated: A

People with zero or poor credit score find it hard to get a loan from NBFCs and banks. P2P aims to serve such unbanked and underbanked population. Tell us how do you do it?
NBFCs and banks also lend to people ‘new to credit’. These people typically have a financial transaction whether in form of a bank account or income data, whether salaried or self-employed, and can be validated on the risk ratios, basis the information.

Asia

Cambodia Establishes New Fintech Association (Crowdfund Insider) Rated: AAA

Cambodia Fintech Association also reported it undertakes four major streams of work on behalf of its members, which are the following:

  • Champion: Advise government and regulators on policy change that supports Fintech innovation and growth
  • Assist: Provide research, legal/regulatory help, service provider discounts and other benefits that help our members build and scale their Startups
  • Match: Get customers to buy, investors to invest, and talent to get involved in Fintech solutions
  • Bridging: Connect ventures (capital), talents (education) and other stakeholders within the Cambodia Fintech ecosystem and provide connections to overseas hubs through our network Events and Partners

According to the Phnom Penh Post, CFA Vice President, Eddie Lee, stated that Cambodia is currently progressing in its fintech, but startups are slowly starting to surface in the country. Lee also explained that CFA has also signed a Memorandum of Understanding with the Taiwan Fintech Association, Thailand Fintech Association and Singapore Fintech Association to establish bridges with similar groups in the region. He added that the next step is to register the CFA with the Asian Fintech Network.

Authors:

George Popescu
Allen Taylor

Monday July 30 2018, Daily News Digest

TransUnion

News Comments Today’s main news: Prosper tops 1 million loans. KBRA assigns preliminary ratings to SoFi Consumer Loan Program (2018-3) Trust. Elevate Credit earnings preview. Zopa CEO on FCA regulatory review. 60 firms apply for Hong Kong banking license. Today’s main analysis: Credit bureau earnings. Today’s thought-provoking articles: FCA to crack down on UK P2P lenders. What to expect in […]

TransUnion

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

Marketplace Lender Prosper Tops One Million Loans (Crowdfund Insider) Rated: AAA

Online lender Prosper announced a new milestone yesterday. The marketplace lending platform topped one million loans this past week representing over $13 billion in originations.

In May, Prosper announced strong loan originations saying the platform experienced a 27% year-over-year increase in the first quarter to $744 million.

The net loss for Q1 decreased by $12.6 million to ($24) million but EBITDA was positive for the fourth consecutive quarter.

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-3 Trust (Business Wire) Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-3 (“SCLP 2018-3”). This is a $546.00 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-3

Class Preliminary Rating Class Principal
A-1 AA+ (sf) $278,000,000
A-2 AA+ (sf) $136,000,000
B A (sf) $69,000,000
C BBB (sf) $63,000,000

In Second Act, a Silicon Valley CEO Opens Up About Affairs (Wall Street Journal) Rated: A

Seeking a fresh start in Silicon Valley, former Social Finance Inc. chief and co-founder Mike Cagney now admits that an affair with a subordinate was a reason for his abrupt departure last year from the firm.

Now, Mr. Cagney is adding another reason for deciding to leave a startup he led for six years. In an interview with The Wall Street Journal, he said that he had consensual sexual relationships with female subordinates, something he had previously denied publicly. He also said he had misled SoFi’s board of directors about one of the affairs.

Sex Scandal Toppled a Silicon Valley Chief. Investors Say, So What? (The New York Times) Rated: A

Yet just months after Mr. Cagney departed SoFi, two venture capitalists who had been on the company’s board and knew many details of his actions invested $17 million in his new start-up, called Figure. Since then, Mr. Cagney has raised another $41 million from others for the lending start-up, which will open soon.

Mr. Cagney’s swift comeback — from ouster to new company took four months — provides one of the starkest illustrations of the speed with which the technology industry is moving past the sexual harassment allegations that swept Silicon Valley and many other industries over the last year.

Highest GDP Growth since 2014, Credit Bureau Earnings (PeerIQ), Rated: AAA

The US economy grew at a blistering 4.1% pace, the highest GDP growth reading since 2014, driven by consumer spending. Consumer spending grew by 4%, higher than economists’ estimates. Consumer spending has been driving US economic growth and outstanding consumer debt has reached all-time highs, although consumer debt per capita is still well below its pre-crisis peak.

Credit Bureau Earnings

PeerIQ’s partner TransUnion released its 2Q earnings this week, along with Equifax. TransUnion’s earnings beat market expectations with revenue of $563 Mn, up by 19% YoY. TU’s revenue growth was driven by Online Data Services, where revenue grew by 23% YoY.

Source: TransUnion and PeerIQ

Equifax’s revenue increased by 2% YoY to $877 Mn in 2Q, while net income decreased by 12% YoY to $145 Mn. Below we compare the latest earnings of the 3 credit bureaus – TransUnion, Equifax and Experian. Note that Experian’s earnings are for the 6 months ending 3/31/18.

Source: Bloomberg and PeerIQ

Elevate Credit earnings preview: what Wall Street is expecting (Markets Insider) Rated: AAA

  • Elevate Credit is reporting earnings from Q2 on July 30.
  • Analysts predict earnings per share of $0.073.

Elevate Credit releases earnings for the most recent quarter on July 30.

9 analysts are estimating earnings of $0.073 per share as opposed to earnings of $0.080 per share in the same quarter of the previous year.

Analysts are expecting the company to report $186.8 million, an increase of 24.13% over the prior year quarter.

5 Ways to Earn a Truly Passive Income (Zing Blog) Rated: A

In recent years, investors have started putting their money into peer-to-peer lending companies. By lending out your own money to peers in the form of personal loans, you are able to earn interest – similar to the way that banks and other lenders produce income. On sites such as Lending Club and Prosper, you can open an account and begin investing in this passive income venture.

Like all investments, the ROI varies, but Lending Club and Prosper boast an average investment return of about 5 – 10%. Both of these platforms also give opportunities for users to make their investment semiautomatic, meaning you wouldn’t need to constantly monitor your investments or reinvest returns. But there would still be some work involved. If you want this to be a completely passive income stream, Lending Club offers a PRIME account, in which you’ll have a fully managed account. You’ll need to have a minimum investment of $5,000, though, and it will be subject to a one-time .8% fee.

85% of Small Business Owners Say They’re Living the Dream (Small Business Trends) Rated: A

According to recent findings from Kabbage, a financial services and data platform, 85 percent of small business owners believe that being your own boss and owning a business is achieving the American Dream. In addition, 84 percent said they hope their children will also one day become small business owners.

The survey, which consists of responses from more than 1,000 small business owners, found that 38 percent of those who hope their children become entrepreneurs feel that way because they want them to turn their passion into a career. 24 percent appreciate that being their own boss allows them to create a flexible schedule. And 22 percent feel that building a small business is rewarding, and they want their kids to feel that sense of pride.

ArborCrowd Wants HNW Investors to Understand the Appeal of Workforce Housing (National Real Estate Investor) Rated: A

ArborCrowd targets IRRs from 12 percent to 15 percent in top-tier markets and IRRs in the mid-teens or low 20s in secondary and tertiary markets, according to Adam Kaufman, co-founder and managing director of the online crowdfunding platform.

MILLENNIUM TRUST COMPANY REFRESHES ALTERNATIVE INVESTMENT PLATFORM (STL News) Rated: B

Millennium Trust Company, LLC, (“Millennium Trust”) a leading retirement and custody services provider to advisors, financial institutions, businesses and individuals, announced today the launch of its enhanced education platform on the Millennium Alternative Investment Network (MAIN). MAIN is a free research, education and alternative investment resource to help investors and advisors increase their understanding of alternative assets, and invest through simplified and streamlined investment processes.

United Kingdom

Zopa CEO Jaidev Janardana Welcomes FCA Regulatory Review of P2P Lending (Crowdfund Insider) Rated: AAA

This past Friday, the UK Financial Conduct Authority (FCA) finally released their reviewof the crowdfunding industry regulations. While the investment crowdfunding sector (equity crowdfunding) came away mostly unscathed the loan based sector (or peer to peer lending) took a bit of a lashing.

The FCA said the peer to peer lending had become “increasingly complex” and sited occurrences of operations that lacked transparency and instances where interest rates were not matched with the appropriate level of risk. The FCA subsequently announced a new consultation as it looks to firm up compliance for UK online lenders. Gillian Roche-Saunders, a partner at the law firm of Bates, Wells & Braithwaite – and Fintech expert, said this will be “the foundation of a much more sophisticated and targeted supervisory approach from the regulator.“

Zopa CEO Jaidev Janardana welcomed the reappraisal and added scrutiny of P2P operations calling it a positive step. Janardana said they “wholeheartedly agree” with the FCA assessment;

Crackdown is looming for peer-to-peer lenders (The Times) Rated: AAA

The City watchdog is to crack down on peer-to-peer lending and the crowdfunding industry amid fears that consumers are being exposed to risks they do not understand.

The popularity of peer-to-peer lending, where individuals or small businesses borrow from members of the public and institutions on the internet, has soared in recent years.

About 150,000 Britons have handed over nearly £10 billion in the past decade through these forums, earning an attractive average of 4.5 per cent interest.

U.K. Watchdog Proposes New Regulations On Lending Platforms (PYMNTS) Rated: A

The Financial Conduct Authority is looking to tighten up oversight over crowdfunding platforms, which provide short-term lending for small businesses and consumers, in part to make sure customers have clear information about the rules, terms and conditions.

A 156-page report by the watchdog found that some customers were subject to poor practices by certain online platforms and that they were provided with unsuitable products and poor treatment.

The reform measures have been backed by platforms like Funding Circle, a leading crowdfunding lender, as a way to gain more legitimacy as competition heats up with traditional banks. RateSetter, one of the three-largest P2P lenders in the U.K., has also sought clarity on regulations as a means to better compete against established banks.

We would remain in EU now, say small companies (The Times) Rated: A

The majority of small companies would vote to stay in the European Union if there were to be a re-run of the Brexit referendum, a survey shows.

A poll of 965 small businesses found that 56 per cent now want to stay in the EU and 32 per cent wish to leave. The remainder were undecided or declined to state their preference.

The survey, which was conducted by Funding Circle, a peer-to-peer lending platform, highlighted a 7 per cent swing towards remaining since April last year.

Tougher P2P lending rules proposed over poor practice concerns (Your Money) Rated: A

The Financial Conduct Authority (FCA) has opened a consultation on loan-based crowdfunding platforms (peer-to-peer) following its original review of the sector in 2016.

It said since then, it’s observed that the new and growing area has become increasingly complex and has found evidence of “poor business practices” that could cause actual or potential harm to investors.

For example, P2P platforms have a much more active role by taking decisions on behalf of investors, structuring the loans they’re exposed to, and splitting loans across a number of investors (lenders) in order to receive a target rate of return.

Here’s what the industry thinks of the FCA review (Peer2Peer) Rated: A

THE FINANCIAL Conduct Authority released its long-awaited review into the peer-to-peer lending sectoron Friday. Here are some of the industry reactions so far…

Rhydian Lewis, chief executive, RateSetter-“I believe peer-to-peer lending will become a part of every investor’s diversified portfolio and the proposals from the FCA do not change that belief.”

James Meekings, co-founder and UK managing director of Funding Circle-“Funding Circle has consistently campaigned for proportionate regulation that protects consumers, whilst allowing innovation to boost choice and competition in the lending and investment markets.”

Stuart Law, chief executive at Assetz Capital-“While we have just received this latest FCA consultation document, and therefore have not as yet fully digested it, we will always be supportive of any regulation that ultimately benefits our investors, borrowers and the wider peer-to-peer industry. Proposals that advocate greater transparency, appropriate investor remuneration and good corporate governance are very much welcome.”

China

Hong Kong prepares to usher in virtual banks, as 60 firms apply to be pioneers in financial revolution (South China Morning Post) Rated: AAA

When SagaDigits, a HK$2 million (US$254,820) start-up, wanted to add post-merger shareholders and signatories to its corporate bank account, its chief executive approached a Hong Kong bank for help.

What happened next turned into many months of back-and-forth paperwork and arguments with the lender, said the company’s chief executive officer, Arthur Chan. He even spent a month tracking down his bank relationship manager after the staff was relocated to another branch.

Good news may be at hand for him, as the Hong Kong Monetary Authority (HKMA) is poised to issue the city’s first virtual banking licence by year’s end to promote fintech and offer customers “a new kind of experience.”

Ning Tang, founder and chief executive officer of CreditEase, a Chinese wealth-management firm and the majority owner of U.S.-listed peer-to-peer lending platform Yirendai, talks about China’s P2P lending industry. He speaks with Tom Mackenzie on “Bloomberg Daybreak: Asia.”

European Union

What Can FinTech Expect In The Next 24 Months In The Central And Eastern Europe (Forbes) Rated: AAA

Trend #1: Further development of payment and money transfer solutions., FinTech incumbents started historically with niches that were on the one hand abandoned by traditional banks and, on the other hand, not as strictly regulated. That is why there has been more transaction service providers originating in the region, compared to different types of FinTech companies.

Trend #2: Business-to-business. Retail banking requires relatively more effort and brings in lower returns in exchange than servicing Small and Medium Enterprises (SME’s), not to mention large enterprises, which has been one of the remaining strongholds for banks (aside from trading, mortgages and services for corporations). Therefore, FinTech startups began offering their products to individuals but are slowly entering the corporate sector.

One of the examples is

Trend #3: Growth in complexity. From single service providers with excellent client experience, FinTech incumbents have evolved into mature companies with the high tech background.

Trend #4: Blockchain.  

FinLeap moves into the fintech platform-as-a-service space (FinExtra) Rated: A

Berlin-based fintech factory FinLeap is positioning as a provider of bundled solutions for startups and banks, melding stand-alone products across a common platform.

The company is rolling out two platform-based products to connect disparate applications in the consumer markets – FinReach – and in business process management – Infinitec.

10 Irish startups to look out for in 2018 and beyond (EU Startups) Rated: A

This week we took a closer look at the Irish startup scene with the goal to introduce you to some of the most promising startups from there. Below you’ll find 10 Irish startups to look out for in 2018 and beyond.

Flender: Successfully funded through the Seedrs equity crowdfunding platform, Dublin’s Flender is a peer-to-peer (P2P) lending platform for businesses and consumers to borrow and lend money through their existing networks. Flender was launched in early 2017, offering a combination of social network, low-interest rates and an excellent mobile experience. They have so far raised €2 million from investors to formalise the social lending market among friends, family and business connections.

International

Libra Credit Receives Investment from Binance Labs (Crowdfund Insider) Rated: A

Libra Credit, an online lender in the cryptocurrency space, has received an investment from Binance Labs – the tech incubator and VC portion of Binance – one of the largest cryptocurrency exchanges in the world.

According to a post on Medium, the agreement enables BNB holders to receive loans collateralized by the crypto. So Libra Credit will lend fiat and digital assets to users who pledge BNB.

Nexo Crypto Lending Platform Offers to Acquire SALT Lending’s Qualifying Assets (Bitcoin Exchange Guide) Rated: A

Known for being the first-ever instant, cryptocurrency-backed loans provider, Nexo took to Twitter to express its offering to acquire what remains of SALT Lending, a membership-based lending and borrowing network and a worthwhile competitor.

The tweet made on July 27, 2018, made it seem as if the Nexo was doing a favor or “lends a helping hand” to its competition, while sharing its willingness to “provide instant liquidity to its community, up to $2,000,000 per client without “proof-of-access” requirements.” To add to this public announcement, the firm also shared what appears to be its letter of intent to SALT Lending.

Global Debt Registry Bolsters Executive Team To Help Transform Structured Credit Market (Payment Week) Rated: B

Global Debt Registry (“GDR”), today announced two new executive hires from the banking industry. Evan Psaropoulos, formerly of Credit Suisse, has joined GDR as CFO, and Patrick Dietz, formerly of BNY Mellon, has joined the organization as Product Director. This follows Charlie Moore assuming the role of Chief Executive Officer, in addition to President, in recognition of his leadership and vision.

In his role as CFO, Evan will oversee the finance function within GDR, including overseeing equity financing and commercial strategy. He will lead investor relations for GDR across the capital markets space leveraging his investment banking and corporate development experience.

Australia

Online Lender Prospa Receives Recognition as Top Fintech (Crowdfund Insider) Rated: AAA

Prospa, a leading online lender for Australian SMEs, has received a nice recognition being named National Fintech Lender of the Year in the 2018 MFAA Excellence Awards.

The Mortgage & Finance Association of Australia  or “MFAA” is the national body representing finance brokers, mortgage managers, lenders, aggregator/broking groups and other industry participants, in the mortgage and finance industry in Australia.

The MFA also recognised Prospa’s Roberto Sanz as the National Winner of Business Development Manager in the Lender and Support Service Provider category for 2018.

Strong First Half for Fintech Lending (Livewire) Rated: A

It has been a very active half year in the Australian Alternative Finance (AltFi) market. Since my previous wire on the key themes expected for 2018, the market has continued to grow and evolve. The themes were: 1) Continued Growth, 2) Consolidation of Lenders; and 3) Transparency via Listings.

These themes have been present in the first half, however we have seen two other themes present that will accelerate the development of the Australian Fintech lending market. One being the participation of banks in funding the AltFi lenders, the other, Government support for SME lending.

India

i2i Funding Helps Break Away from Traditional Banking (The Tech Panda) Rated: AAA

The Peer to Peer or P2P lending market has doubled in China. Though it might be at a nascent stage in India, according to co-founder of P2P lending platform i2i Funding Raghavendra Pratap Singh, it has a lot of potential. In a chat with The Tech Panda, Singh explained the intricate process and i2i Funding’s plans for the future.

I2i Funding had started with loan amounts of INR 10-15 lakhs per month, and now are doing INR 1.5 crore. Currently, they have around 30,000 registrations for borrowers and around 4000 for investors.  They add around 200-300 new investors per month. So far, the company has disbursed over 500 loans of over INR 8 crores.

How to earn money by investing (Economic Times) Rated: A

Many individuals still consider keeping money in their bank savings accounts akin to investing. Yes, it earns an interest rate but over a longer period of time, the earnings heavily fall short of negating the impact of inflation.

Currently, most banks offer 4 percent or even lower return on their savings accounts. It, therefore, becomes important to look out for other better alternatives and investment options to make your money earn you money.

Asia

Economy in brief: Half of unlicensed P2P lending from China (The Jakarta Press) Rated: AAA

The Financial Services Authority (OJK) has discovered that more than 100 unlicensed peer-to-peer (P2P) lending providers in the country had been developed by Chinese firms.

The OJK reported its findings on Friday, pointing out that out of 227 unlicensed P2P lenders it had listed, at least half originated from China.

What Imran Khan’s Election Win Means For Pakistani Fintech (Forbes) Rated: A

Imran Khan has claimed victory in the 2018 Pakistani election for his PTI party after a campaign that has been marred by violence and allegations of vote rigging. Although Khan’s party is expected to fall short of an overall majority and would have to form a coalition, his economic policies have been questioned.

As per his 

MENA

Thinking outside the (financing) box (CPI) Rated: AAA

Can you describe the development of peer-to-peer lending in MENA?
Marketplace lending is still a relatively new phenomenon in the MENA region. A big part of what we do is to educate investors in the potential for diversifying their existing portfolios with a different type of investment. It offers them a wide-range of choice as investors are able to browse through campaigns and select the ones that match their criteria best.

Liwwa only lends to small and medium enterprises (SMEs), and we continue to scale up that lending activity. As our underwriting activity grew from $2.3 million in 2016 to $5.2 million in 2017, the level of funding from retail investors nearly doubled. Retail lenders want to see a credible company, a solid portfolio and a low default rate. As long as Liwwa continues to deliver on those three criteria, we can build trust in the platform and hopefully build an ongoing relationship with new and existing investors.

Over the last 18 months banks have significantly scaled back lending activity to the SME sector. How as this affected P2P lending activity in the region?
IFRS 9, with its provisioning rules, is one of the main drivers of banks’ reticence to lend to SMEs. The market demand for loans hasn’t appreciably changed, and one could argue that market risk has stabilised in many MENA economies—so the accounting rule change is having an outsized impact. Alternative financing structures such as these are poised to fill a need because much of the debt is treated on an off-balance sheet basis. Retail lenders and non-bank institutions can contribute to filling the SME lending gap given a difference in risk appetites and a more generous perspective on solvency ratios.

Africa

Peer to peer lending: from Nigerians, to Nigerians (Stears Business) Rated: AAA

When societies were small and closed-off, people lent freely among themselves based on trust. At worst, the lender believed that he could take up his case with the local community. But as globalisation and technology came, people began to migrate, and personal lending became inefficient. The solution? Banks.

At the centre of this story is FINT, a Nigerian online peer-to-peer lender founded in early 2017. The idea is simple. Emeka signs up to the FINT platform and requests for a loan. Chinyere signs up, funds her account, and chooses which loan(s) she wants to finance from a pool of anonymous borrowers. In its simplest form, Emeka wants ₦120,000 for six months, and Chinyere lends it to him and gets monthly payments of the principal (₦120,000) and interest (e.g. 10%) every month – or ₦13,200 each month.

FINT has been pioneering this simple form of lending in Nigeria. Its aim to “empower Nigerians by making loans more accessible and affordable; and lending more rewarding” speaks to the core idea of peer-to-peer lending.

Latin America

New rules for credit fintech companies (Lexology) Rated: AAA

The Central Bank also issued Circular 3,898 in May 2018, which set out the procedural rules for establishing such entities.

The Central Bank has introduced these rules in order to continue the modernisation of Brazil’s financial sector – something which has been ongoing since 2013, with more intensive actions being taken since 2016. The main goals of the rules are to:

  • incentivise innovation;
  • increase legal certainty;
  • enable the entrance of new players in the market;
  • increase competition; and
  • reduce interest rates.

Authors:

George Popescu
Allen Taylor

Friday December 29 2017, Daily News Digest

china mobile payments

News Comments Today’s main news: OnDeck adds BlackRock-managed fund to platform. China imposes order on mobile payments. P2P lending demand booms in Australia. Moneybank launches in Vietnam. Today’s main analysis: India’s startup watchlist for 2018. Today’s thought-provoking articles: 3 trends transforming advisor practices. Is P2P lending in India truly disruptive? 7 fintech predictions for 2018. Canadians’ top priority is paying down […]

china mobile payments

News Comments

United States

China

  • China moves to impose order on mobile payments. AT: “There’s no surprise here. China is all about the regulation right now. While regulations will likely slow the growth of mobile payments in China, the sector will still outpace growth in the U.S.”

International

Australia

India

Asia

MENA

Canada

News Summary

United States

OnDeck Adds a BlackRock-Managed Fund to its Platform of Financing Partners (PR Newswire), Rated: AAA

On December 15, 2017, OnDeck introduced the BlackRock-managed fund as the Class B lender under OnDeck’s existing asset-backed, revolving credit facility with SunTrust Bank. As a result, OnDeck increased the facility’s borrowing capacity to approximately $120 million. SunTrust Bank, the Class A lender under the facility, will act as the administrative agent for both the Class A and Class B lenders.

25 Best Small Business Articles of 2017 (OnDeck), Rated: A

Here are the 25 most read articles from our blog this year. If you missed any of them, now’s your time to catch up.

Which 3 trends are transforming advisor practices? (FinancialPlanning), Rated: AAA

In the face of 2017’s unprecedented opportunities and challenges, advisors have also felt the pressure of three converging forces — and their impact will be heightened in the year ahead.

It starts with the commoditization of financial advice, best exemplified by the growing use of robo advice by both financial advisors and do-it-yourself investors. Second, the downward pressure of fee compression, as consumers demand high-value and low-cost products and services. And third, the continuing consolidation that is reshaping the advisor industry, as firms join forces to achieve greater scale and gain a competitive edge.

In 2018, the impact of commoditization, fee compression and consolidation will lead to a massive shift, shaping the products you use, the portfolios you build, and the very nature of financial advice itself.

CFP Board Revamps Standards, Seeks Comments (Financial Advisor IQ), Rated: A

The CFP Board polled around 1,000 CFP professionals on its initial revision proposal and found that 96% agreed that CFPs should be required to put their clients’ best interest first, according to WealthManagement.com.

The CFP Board is seeking comment on its revised code of ethics and standards of conduct, according to a press release from the board.

5 Trends to Watch in Fintech, Wealthtech and Regtech in 2018 (Think Advisor), Rated: B

  1. Regulation is just beginning.
  2. Technology will continue to converge.
  3. Roles will be blurred.
  4. Enterprise companies will get in the game.
  5. Non-industry brands join in the fun.

Here’s What Over 40% of Millennials Plan to Do With Their Tax Refund (The Motley Fool), Rated: A

Instead, over 40% of millennials have a sensible plan for a windfall that averaged $2,782 across all Americans getting refunds last year. Of course, not every filer will get that much (some even owe) but the 43% of millennials who get a refund will be using it to pay down bills they accrued over the holidays, according to a survey from tax preparation company Jackson Hewitt.

That’s actually a higher rate of using a tax refund to pay down holiday debt than the 31% of the general population polled who gave the same answer to the question “Do you tend to use your tax refund to pay off holiday debt/bills/credit cards?”

In general, you want to keep your credit utilization ratio below 30%. That means you should have more than 70% of your total allotment of credit across all cards available to use.

How Mike Praeger has put AvidXchange — and Charlotte — on fintech map (Biz Journals), Rated: A

When it comes to Charlotte’s business aspirations, homegrown automated payment company AvidXchange hits all the right notes.

SoFi Landing Page (dribbble), Rated: B

China

China moves to impose order on mobile payments boom (Financial Times), Rated: AAA

China’s central bank has tightened rules on mobile payments made by scanning a barcode, imposing restrictions that could slow the explosive growth for Alibaba’s financial services affiliate and that of its main rival, Tencent.

The regulations set daily limits on the amount consumers can spend each day using barcode-based payments. They also forbid “burning money” via subsidies to merchants, which are designed to capture market share from competitors.

China leads the world in mobile payments, most of which are executed by scanning a QR code. While some scans use a specialised point-of-sale (POS) terminal, others occur between mobile phones or when the consumer scans a decal posted near the checkout area.

Source: Financial Times
International

Fintech predictions BI Intelligence got right in 2017 (Business Insider), Rated: A

As 2016 drew to a close, BI Intelligence collated its top five fintech predictions for 2017. As we enter the new year, we’re revisiting them to see how they stood the test of time. Here is what we got right about 2017:

  • Insurtech will continue to ascend.
  • Alternative lending will consolidate around a few big players. Just two of the UK’s largest consumer marketplace lenders, Zopa and RateSetter, 
    Source: Business Insider
    Australia

    Demand for peer-to-peer lending booms (AustralianBroker), Rated: AAA

    Australia’s peer-to-peer lending industry nearly doubled its loan originations this past financial year writing $300m in loans, according to a recent ASIC report.

    More than 18,500 consumers and 201 businesses borrowed $300m in the 2016-17 FY, compared with $156m in 2015-16. More than 7,760 investors provided financing to the platforms.

    The average interest rate charged for these loans was 10.5%. The majority of businesses (77%) were charged an interest rate of between 12-15.99% and the majority of consumers (55%) were charged between 8-11.99%.

    India

    P2P lending in India: Is it truly delivering a disruptive new asset-class? (Economic Times), Rated: AAA

    When we started the P2P business, it was all about reaching out to borrowers who have been untapped by the formal sources of finance. I will get to that in my next point, but during our journey we have realized it was not only about the borrowers, but also about lenders. It was not easy to draw lenders to the model, but once they realized the potential, it was clear to them that P2P was a good alternate source of investment.

    The P2P industry and us included have painstakingly worked to safeguard the lender’s interest, use technology to help lenders take the most informed lending decision and strengthen every process of the P2P value chain. From having bank-grade security to having the best credit verification technologies, P2P in the country has relentlessly worked to make the sector better.

    Borrowers
    When it comes to borrowers, the impact has been more straightforward. P2P has enabled a whole new section of individuals to seek credit. What is interesting is that a large percentage of our loans today, more than 50% is business loans for small and medium businesses.

    Top 7 Fintech Predictions for 2018 (Economic Times), Rated: AAA

    UPI 2.0 – UPI has grown 400X in volume since November last year, proving to be a huge success in terms of consumer adoption. Several entities like banks, fintech players have built their own UPI solutions, contributing to this tremendous growth.

    UPI 2.0 with its two features – biometric authentication and E-mandates aim to transform the way payments are made today.

    E-Mandates – E-Mandates replace the physical mandate system of ECS (Electronic Clearing System), transforming the entire system of direct debit payments. Setting up and managing e-Mandates is fast, convenient and completely digital, reducing the payment processing time by nearly 80%.

    BharatQR – BharatQR can prove to be a boon for offline businesses and small merchants, especially in tier 2 and tier 3 cities to adopt digital payments easily.

    Peer-To-Peer (P2P) Lending

    Artificial Intelligence & Machine Learning in Payments – The trend to use artificial intelligence and machine learning in payments is fast growing. Some of the application areas of these technologies we can envisage in the near future are chatbots, voice-based payments and advanced fraud detection mechanisms.

    Blockchain – The technology can be used across several areas like digital currency exchange, cross-border payments, money transfers and smart contracts among many others.

    Startup Watchlist: 9 Fintech Startups To Watch Out For In 2018 (Inc42), Rated: AAA

    In India, the need for technological disruption in the banking sector is all the more acute, given that over 19% of the country’s population still remains unbanked.

    Forecasted to cross $2.4 Bn by 2020, as per a report by KPMG India and NASSCOM, India is currently home to more than 500 fintech startups, whose collective aim is to attain financial inclusion.

    The Explosive Growth Of Indian Fintech Sector

    Home to more than 462 Mn Internet users, the number of mobile users in India is expected to reach 1 Bn by the year 2020. In fact, it has the greatest market potential in the entire world, as determined by the Harvard Business Review (HBR) in its latest edition of Digital Evolution Index 2017.

    Post the ban on INR 500 and INR 1,000 notes, India witnessed an acute dearth of cash, which in turn caused Internet-enabled cashless transactions to sky-rocket. As reported by Inc42, digital transactions increased 22% almost immediately after the ban came into effect.

    In less than 24 hours after the embargo was announced by PM Narendra Modi-led government, Paytm saw an overwhelming 435% increase in overall traffic. Other digital wallets like PayU India witnessed a staggering 80% jump in transactions, while FreeCharge claimed that the average wallet balance on its platform increased 12 times. MobiKwik meanwhile reported an over 40% increase in app downloads within less than 18 hours of the announcement.

    Faircent

    Till date, lenders on the platform have committed to lend over $4.8 Mn (INR 31 Cr), while borrowers have sought up to $3.5 Mn (INR 23 Cr) in loans. At present, Faircent claims to receive over 225K loan requests per month, with most of them being used for funding businesses, family events, appliance purchases, debt consolidation, among others.

    Kissht

    Conceived in 2015, Mumbai-based Kissht is a fintech startup that provides instant credit to consumers for making purchases at digital points of sale (both offline and online). Through its app, users can buy various items including mobiles, laptops, jewellery, and electronics by opting for flexible EMIs even without a credit card.

    Last month, Kissht raised $10 Mn (INR 67 Cr) in a round led by Chinese investment conglomerate, Fosun International.

    Simpl

    Launched in 2015, Simpl is an online payment instrument that allows customers to make purchases and settle payments online.

    As claimed by the company’s spokesperson, Simpl boasts a customer retention of around 85% overall, which is growing at 50% monthly.

    Here’s how 2017 has been a roller coaster ride for Indian startups (Economic Times), Rated: A

    SoftBank to invest in India through its mega, technology focused $100 billion Vision Fund

    Around 50 employees of Paytm sold shares worth about Rs 100 crore to both internal and external buyers

    Flipkart raises $1.4 billion in funding from Tencent, Ebay and Microsoft

    Paytm raises $1.4 billion from SoftBank; Sees valuation jump to $8 billion

    Snapdeal sells its digital payments platform to Axis Bank, the country’s third-largest private sector lender, for Rs 390 crore.

    SoftBank pumps $2.5 billion into Flipkart, making it the biggest private investment in the country’s consumer technology sector.

    The RBI identifi es peer to peer lending startups under a separate category of non banking fi nance companies and frames rules of operation. Also opens window for applications under NBFC-P2P category

    6 amazing ways personal finance changed in 2017 (Financial Express), Rated: A

    1. Social credit scores
    2. Digital Payments
    3. eKYC and Aadhaar
    4. P2P lending
    5. Algorithmic-driven personal finance management
    6. Bitcoin and Blockchain

    How to get paperless personal loans? (SRJ News), Rated: B

    Among several other activities and banking transactions, personal loans too can be availed online. From applying for a loan to getting it sanctioned, the entire process can be carried out from the comfort of your laptop or desktop. Gone are the days of running around for paperwork and visiting bank branches. The whole process is completely digital;thus, paperless online personal loans are nothing but everyone’s saviour.

    Benefits of online personal loans

    • No physical documents are required
    You just need to upload all the identity proofs along with your bank statement online, to get your loan approved.
    • Quick disbursement route
    If you submit all the required details, along with the application and other statements, your loan can be disbursed as quickly as within 24 hours.
    • A complete online process
    You don’t need to constantly visit banks and wait for days to get your loan approved.
    • No collateral required
    You only need to share your information and documents to get the loan approved, for anonline personal loan these days no security or collateral is required.
    • Flexible tenure options
    You get comfortable EMI option on your loan tenure, starting from 12 to 36 months.

    Asia

    The future of commercial real estate investing: How the investment ecosystem is being disrupted (Moneybank Email), Rated: AAA

    Singapore based consumer finance group Silkway Ventures has expanded its operations to Southeast Asian region by opening a subsidiary in Vietnam. The group announced today that it has launched its online peer-to-peer lending platform Moneybank.vn. Over the next five years the company plans to expand its footprint to other neighboring Asian markets to tap into a potential underbanked consumer base, estimated to be 500 million people.

    Vietnam is the first international foray in the digital consumer lending space for Silkway Ventures. The country has a population of over 90 million people, where demand for consumer finance services is rising rapidly and a large percentage of the population is virtually unbanked. At the same time the rate of Internet and smartphone penetration is already significant. The digital consumer finance model offers greater customer coverage at a significantly lower cost compared to traditional banking channels. The move by Silkway Ventures into the Vietnam consumer finance market offers a welcoming Segway for fintech companies to access the market and drive further development in this sector.

    MENA

    Largest fintech hub to open in Bahrain (Zawya), Rated: A

    A facility opening in Bahrain next February will be the largest dedicated fintech hub in the Middle East and Africa, according to its developer and manager.

    Bahrain FinTech Bay, operated by Singapore-based fintech incubator Fintech Consortium, will be a 10,000 sqft facility which will include a variety of shared infrastructure, such as co-working spaces, the consortium’s Bahrain chairman Missan Al Maskati told the GDN in an exclusive interview.

    Canada

    CIBC poll shows that Canadians’ top financial priority is paying down debt (The Georgia Straight), Rated: AAA

    Once again, a large number of debt-soaked Canadians have told a pollster that they’re going to put repaying creditors at the top of their financial to-do list in the coming year.

    It’s the eighth consecutive year that this has been the Number 1 financial priority of those surveyed for CIBC by the Angus Reid Institute.

    Canada’s household debt to disposable income reached a record of 171.1 percent in the third quarter of this year.

    Authors:

    George Popescu
    Allen Taylor

Thursday December 21 2017, Daily News Digest

PBC interest rates

News Comments Today’s main news: SoftBank leads $120M funding round for Lemonade. Shareholders file class action against Qudian. RateSetter looks to cautious growth in car financing. LoanBook rakes in 650K GBP on Crowdcube. Prospa planning a 2018 IPO. Today’s main analysis: Muddy Waters goes cold on China Internet Nationwide Financial Services Inc. (CIFS). Today’s thought-provoking articles: Two big banks […]

PBC interest rates

News Comments

United States

United Kingdom

China

European Union

Australia

India

Asia

Canada

News Summary

United States

SoftBank leads a $ 120 million round for insurance startup Lemonade (TechCrunch), Rated: AAA

The SoftBank Group has finally made a good tech investment around real estate.

After investing $4.4 billion in what is essentially a bespoke office space rental business (WeWork) and another $450 million in Zillow for rich people (Compass), the gargantuan Japanese tech investor is leading a $120 million round of funding for Lemonade, a startup providing renters and homeowners insurance.

Additional investors in the round include previous backers Alphabet’s investment firm, GV, General Catalyst and Sequoia Capital.

Shareholder Class Action Filed Against Qudian Inc. – QD (GuruFocus), Rated: AAA

The law firm of Kessler Topaz Meltzer & Check, LLP announces that a shareholder class action lawsuit has been filed against Qudian Inc. (NYSE: QD) (“Qudian” or the “Company) on behalf of investors who purchased the Company’s securities between October 18, 2017 and November 20, 2017, inclusive (the “Class Period”).

Qudian shareholders may, no later than February 12, 2018, petition the Court to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel, or may choose to do nothing and remain an absent class member.

Two Big Banks Set to Launch Their Own Online Lending Platforms (Lend Academy), Rated: AAA

A little over a year ago Goldman Sachs launched their consumer lending platform Marcus as part of a digital strategy to move into the retail banking segment. They have since grown faster than any online lending platform with originations approaching $2 billion. Goldman Sachs now believes revenues from online loans will equal that of trading in the near future.

U.K. based Barclays has been increasing their footprint in the U.S. the last few years through the Barclaycard brand. They are now one of the top 10 credit card issuers in the US.  News broke last month that Barclays would be launching a digital bank in 2018 and rebranding from Barclaycard to Barclays in the US.

Pittsburgh based PNC Financial Services Group is one of the top 10 largest banks in the US with $371 billion in assets. They are looking to launch their online consumer lending product in new branches and through their mobile wallet product.

From On Fire To Under Fire: Marketplace Lending Enters 2018 Taking On Flak (ValueWalk), Rated: A

After a meteoric rise, marketplace lending has had its share of challenges and scrutiny, but the future should still be bright for such an industry on the forward edge of technology and consumer needs. Yet marketplace lending seems to be ending 2017 under an unwarranted attack from regulators and commentators determined to find similarities in marketplace lending to the subprime mortgage market in the years leading up to the financial crisis.

EquityMultiple CEO Charles Clinton Highlights Real Estate Opportunities & Disruption, Predictions for 2018 (Crowdfund Insider), Rated: A

CEO Charles Clinton and CIO Marious Sjulsen co-founded EquityMultiple with a shared vision of transforming real estate investing through tech and by providing new access to private transactions while streamlining the investment process.

Erin: Please share EquityMultiple’s latest stats.

Charles: We’ve funded 32 investments to date and are expecting to hit around 100% year-over-year growth in dollars invested. For investments that have fully repaid or are currently cash-flowing to investors, we’re averaging around a net 9% annualized dividend.

Erin: What sets EquityMultiple apart from its industry peers? How will EquityMultiple continue to differentiate itself?

Charles: We’ve taken a different path from most of our direct competitors and I suspect that will continue. This started at the very beginning – rather than look for venture capital financing, we sought out a real estate firm to partner with and found that in Mission Capital, a national capital markets firm that has done over $70 billion of business in its 15-year history.

Erin: Earlier this year you stated that individuals made up 100% of EquityMultiple’s investments. Has institutional money entered into this investment flow?  Why or why not? What are your methods of tapping into new investors?

Charles: We are still 100% focused on individual investors by design. We feel that individual investors are the customers that we provide the most value to. For institutional investors, there often is no real accessibility issue for getting into commercial real estate. Individual investors, on the other hand, are significantly under-allocated into real estate by comparison.

Krawcheck expands Ellevest robo to three service levels with more human advice (InvestmentNews), Rated: A

Investors can access the robo-adviser by itself for 25 basis points (formerly 50 basis points), which includes algorithmic portfolio construction, tax minimization strategies, and now support from human advisers via email and text.

For 50 basis points and an account minimum of $50,000, investors can access Ellevest Premium, which includes the technology platform as well as personalized goals-based planning from an adviser with certified financial planner credentials.

Why Employers Need To Help Workers Deal With Income Volatility (Forbes), Rated: A

Roughly a quarter of American families suffer a major disruption to their income each year, according to the Urban Institute. Nearly one in five of those families suffer an income drop of 50% or more: a potentially catastrophic shock for low-income families.

But it’s not just these one-time shocks that affect families’ ability to plan and save — it’s the month-to-month fluctuations, as well. The JP Morgan Chase Institute foundthat, between 2012 and 2015, 55% of the bank’s customers regularly experienced more than a 30% change in income — up or down — from one month to the next.

BankMobile deploys AI, alternative data to lend to FICO-poor students (American Banker), Rated: A

BankMobile has become the first bank to start using online lending software developed by Upstart, which is designed to use artificial intelligence and alternative data to determine the creditworthiness of consumers with thin or no credit files.

BankMobile, the digital-only subsidiary of Customers Bank in Wyomissing, Pa., which is due to be spun off and merged with Flagship Community Bank in mid-2018, is planning to use the software to offer its first credit product to the students it reaches through relationships with 800 universities.

 

Merrill Lynch Fined $ 1.4M Over Supervisory Failures (Financial Advisor IQ), Rated: A

Finra has fined Merrill Lynch $1.4 million for alleged supervisory failures related to extended settlement transactions, the industry’s self-regulator says in a press release.

From April 2013 through June 2015, the wirehouse allegedly didn’t collect enough margin to offset credit, market and exposure risk presented by the longer time period between trades and settlements inherent in such trades, Finra says.

‘Banks can’t attract the talent they want or need’ (Tearsheet), Rated: A

Banks have always proclaimed themselves as technology companies with banking licenses. But culturally, banks are still banks: conservative. Innovation teams can only innovate so much before someone in legal or compliance tells them no; they can only move so fast before someone tells them to slow down.

In this installment of Confessions, in which we trade anonymity in exchange for honesty, we spoke with an analyst at a startup attached to a large bank about internal innovation, attracting strong talent and why alternative bank service companies should get serious about becoming or partnering with a bank.

10 who had a rough year in 2017 (American Banker), Rated: A

Move over Wells Fargo, another prominent financial firm has taken your place as the poster child for bad behavior.

Equifax, the credit reporting agency whose primary responsibility is to protect consumers’ personal information, became public enemy No. 1 this year when it revealed that thieves hacked into its database and stole the personal information — birth dates, credit card data, Social Security numbers — of some 145 million consumers.

Runway Growth Credit Fund Successfully Closes $ 275 Million Equity Offering with Increased Investment from Oaktree Funds (BusinessWire), Rated: A

Runway Growth Credit Fund Inc. (“Runway Growth Credit”), a provider of term debt to fast-growing companies seeking an alternative to raising equity, today announced the successful closing of its $275 million initial equity capital raise with an increased commitment to $139 million from OCM Growth Holdings, LLC, an entity owned by certain investment funds managed by Oaktree Capital Management, L.P. (“Oaktree”), along with commitments from other investors.

Investors Commit 0 Million to tZERO ICO (Coindesk), Rated: A

As reported by CoinDesk, the first leg of the sale – in which the firm is selling Simple Agreements for Future Equity (SAFEs) that will later be redeemed for tokens by accredited investors – began yesterday, albeit a bit laterthan planned. Hiccups aside, Byrne told CoinDesk the sale ultimately attracted a big crowd – some 2,000 accredited investors.

As such, he indicated the company may move to shorten the initial two-month timeframe for the token sale.

Some of the offers, he said, were as high as $5 million or more for single token allocations.

OCC’s Otting sees future for fintech charter, CRA reform (American Banker), Rated: A

Comptroller of the Currency Joseph Otting said in a press conference Wednesday morning that there is a place in the banking world for some kind of fintech charter, though the exact parameters of such a charter are still unclear and have to be worked out.

“I’m not sure what it looks like, and how it’s funded, but I do think there’s a space there that a technology solution can solve,” Otting said when asked whether he sees a future for the Office of the Comptroller of the Currency’s nascent fintech charter.

BLACKSTONE LOOKS AT THE SECONDARY PRIVATE EQUITY MARKET (All About Alpha), Rated: A

An October paper put out by Strategic Partners Fund Solutions, of Blackstone, argues that (despite risks and drawbacks) investing in the secondary private equity market  can still be a smart play, offering “accelerated returns with lower volatility, lower loss rates, and greater downside protection” than the primary market.

How the digital community is supporting small business (Rapid Growth Media), Rated: A

The 2016 Small Business Credit Survey, published by the Federal Reserve Bank of New York, reports that startups are more likely than their mature counterparts to be undergoing growth and planning to add jobs. The report shows 70 percent of startup applicants are in need of funding to support this growth, versus 60 percent of mature applicants. Additionally, in 2016, 52 percent of startups applied for financing.

The Credit Survey highlights that only “31 percent of startup applicants were approved for the full amount of financing sought”.

Debt crowdfunding: Peer-to-Peer lending

Lending Tree was a revolutionary option for individuals to secure financing when they simply wanted to compare options or if they may not have been bankable. Kiva, for example, allows lenders to contribute small amounts, sometimes as little as $25, to help fund requests.

As of October 2017, Kiva reports funding over 1M loans resulting in $1 billion being lent.

Equity crowdfunding

Now, instead of searching for affluent individuals looking to invest in a business, entrepreneurs can turn to sites like MicroVentures. MicroVentures is a public, online venture capital investment bank. Investors have the opportunity to invest as little as $100, which opens up the market to a much larger pool of potential investors. This option is best suited for established companies with strong historical performance and larger financial needs. Since their launch in 2011, MicroVentures reports facilitating over 160 investments, resulting in over $100M in capital investment to date.

Mayor Kasim Reed Announces Bank on Atlanta Initiative (AJC.com), Rated: B

Bank on Atlanta, a financial access program that will focus on providing free or low-cost banking products, along with financial education and financial counseling, to unbanked and underbanked residents in the city of Atlanta has been created.

Research shows that relying on alternative financial service providers such as check-cashing or payday lending establishments makes it hard for residents to rise out of poverty in our city.

9 Holiday Gift Cards That Give You Something for Nothing (TheStreet), Rated: A

Online student loan marketplace LendEDU.com studied the most sought-after gift cards and listed them in descending order: Amazon (AMZN – Get Report) , Walmart (WMT – Get Report) , Target (TGT – Get Report, Best Buy (BBY – Get Report) , and Subway. But these cards sold for only 2% to 5% less than face value, compared with 1-800-Flowers (FLWS – Get Report) , H&M or Dress Barn gift cards which offered, on average, 30% off face value on their sites. Even Dunkin’ Donuts (DNKN – Get Report) and Godiva mark down their gift cards by 25%.

RealtyMogul Hires New Chief People Officer (BusinessWire), Rated: B

RealtyMogul, a unique commercial real estate private markets investing platform, today announced the addition of Soley Van Lokeren as Chief People Officer.

Credit Karma adds Gannesh Bharadhwaj as General Manager, Credit Cards (Credit Karma), Rated: B

Credit Karma, the leading personal finance technology company in North America, today announced it has appointed Gannesh Bharadhwaj as general manager of credit cards. Previously president of Renew Financial, Bharadhwaj brings a strong background in financial institutions as Credit Karma remains focused on using innovative technology to bridge the gap between banks and consumers.

The Small Business Benefits of Being Charitable (Business2Community), Rated: B

Entrepreneurs can make charity a part of their approach to business, and in a variety of ways. A survey by Funding Circle revealed some interesting figures, as reported by Joshua Sophy last December for smallbiztrends.com.

  • Of 1,400 small business owners polled, 52 percent said they were donating or had already donated to charity.
  • 46 percent planned to donate “up to $1,000.”
  • 44 percent preferred to donate cash.
United Kingdom

RateSetter plans ‘cautious growth’ in car finance market (P2P Finance News), Rated: AAA

RATESETTER is planning to grow its motor finance division to take advantage of the huge opportunities it sees in the market.

The peer-to-peer lender entered the consumer hire purchase industry in May when it acquired Vehicle Credit Limited out of its parent company’s administration as part of its wholesale lending “interventions”. Vehicle Credit Limited has now been integrated into the group as part of RateSetter Motor Finance.

Chip, the chatbot savings app, raises over £1M in crowdfunding with plans to apply for a banking license (TechCrunch), Rated: A

Chip, the chatbot app that plugs into your bank account and lets you automatically save for a rainy day, has raised nearly £1.1 million on equity crowdfunding platform Crowdcube.

The fund raise, which is part of a larger £2.4 million funding round, forms part of plans for the London-based startup to apply for a banking license so that it has more flexibility regarding the kinds of products it can offer in the future. The app currently claims 30,000 active users “who are collectively saving millions a month”.

China

Muddy Waters Is Short China Internet Nationwide Fncl Srvcs Inc (CIFS) (ValueWalk), Rated: AAA

We conclude that China Internet Financial Services Inc. (NASDAQ:CIFS) is a King Zero – just another worthless China fraud, says Muddy Waters Research.

  • Every one of the purported borrowers to which CIFS disclosed having made loans (accounting for 84.2% of loan balances) appears to be a sham counterparty.  (The purported borrowers of the remaining 15.8% of reported loan balances were not disclosed; however, we strongly suspect that most – if not all – of these loans and associated income are also fabrications.)
  • CIFS’s recently announced “big data” company purchase also appears to be a lie.
  • 47.3% of CIFS’s reported 2016 net income purportedly was generated by its Kashgar subsidiary; however, that subsidiary existed for only two days in 2016.
  • CIFS is too good to be true – claiming to turn a seeming commoditized business model into an overnight juggernaut with purported gross margins over 97% and net margins over 70%.
Source: ValueWalk

Read “The Farce Awakens: CIFS” in full here.

China Ripe for Auto Finance Boom as Consumer Penetration Rate Rises (Auto Finance News), Rated: AAA

Since 2009, China has surpassed the United States as the largest market for new-vehicle sales, according to Deloitte Consulting LLC. And now, auto finance is starting to catch up.

For many years, the Chinese automotive market has been propped up by government incentives like tax breaks, which encouraged customers to purchase cars. So far, this incentive has led to more than 2 million cars being sold a month, with growth running up 15% last year, the Wall Street Journal reported in March. But as the tax breaks are expected to wind down, auto lenders have a greater opportunity to step in and capture marketshare in China, where penetration rates remain lower than other developed nations.

In the U.S., for instance, 84% of new cars in the U.S. were financed in 2014 compared with 20% in China, according to Experian. The Chinese auto finance rate rose to 38% in 2016, and is expected to rise steadily in the next few years; reaching an estimated 55% in 2021, according to ReportLinker.

Debtors in China are placed on a blacklist that prohibits them from flying, buying train tickets, and staying at luxury hotels (Business Insider), Rated: A

China maintains a public blacklist of debtors that effectively restricts their movements and their spending habits.

The country’s highest court publishes the names and ID numbers of “dishonest people” on its website and restricts those people from flying domestically, using high-speed trains, or enrolling their children at expensive private schools.

Defaulters are also prevented from staying at hotels with three-stars or more. They also face tougher exams if they want to join the civil service, and are charged higher fees for booking cars. The bans work by linking to a person’s ID number. Some people used their passport when travelling to circumvent the ban, but that loophole now appears to be closed.

European Union

Spanish Marketplace Lending Platform LoanBook Secures £650,000 Funding Target on Crowdcube (Crowdfund Insider), Rated: AAA

LoanBook, a Spanish marketplace lending platform, has successfully secured its initial £650,000 funding target from more than 200 investors through equity crowdfunding platform Crowdcube. Founded in 2013, LoanBook claims to be Spain’s largest marketplace lending platform, with a 4-year track record of working capital lending to Spanish SMEs and 40% market share.

Two Additional Ways to Improve API Security for Fintech startups (Finextra), Rate: AAA

It’s simple: the probability of being under cyber attack is 100%.

With high probability and high impact, the risk is very high that API’s in the PSD2 era will enable a New Normal in Bank Robberies. Not IF, rather WHEN and WHO.

1. Consider new AI-based approaches in vulnerability scanning.

2. Know what’s under the hood

Think of the Infineon-developed RSA Library version v1.02.013, which lead to Estonia having to reissue over 750,000 certificates, part of their National ID scheme. Or the 2014 GnuTLC bugwhich allowed a Man-in-the-Middle attack due wrong behavior during a TLS handshake.

My advice is to keep track of all dependencies and track vulnerabilities in all underlying components. OWASP has a project calledDependency-Check aimed to do just that.

5 hugely successful Nordic entrepreneurs share their advice to young people (Business Insider), Rated: A

iZettle CEO Jacob de Geer says you should team up with peers – and experiment.

“Apart from getting the business started, is to experiment with whatever idea you have. Most of your trials will fail, but one in 100 will work. If you view problem solving as a way of increasing the value of the company that you are building, then you are off to a good start.”

Klarna co-founder Sebastian Siemiatkowski thinks it’s important to have a holistic approach to problem solving.

When I advise young entrepreneurs, I tell them, “It’s not about figuring out the best business ideas, and it’s not about solving problems theoretically, but it’s about testing your ideas. It’s about coming up with an idea, and then trying it and learning from it.”

A small fintech company surges 250% after launching a blockchain-focused business unit (Business Insider), Rated: A

Australia

Online lender Prospa joins the 2018 IPO pipeline (Financial Review), Rated: AAA

Investment bankers lining up for a stronger 2018 pipeline of initial public offerings have online business lender Prospa in their sights.

Street Talk understands a handful of banks have pitched their wares to Prospa’s chief executives Greg Moshal and Beau Bertoli in recent weeks ahead of a planned run at the local bourse some time next year.

India

“Five best alternative investment strategies to consider in 2018” (Business Today), Rated: AAA

Alternative investing is as much a mindset, as it is about specific investments. Here are some alternative investments approaches culled from our members around the world that are applicable to any investment decisions.

Invest in markets or assets that your analysis leads you to believe will do well; don’t invest in a product just because it’s likely to (or, worse, has in the past) “outperform the market”.

Understand that returns are one-dimensional, risk is multi-dimensional

You should constantly revisit your assumptions of the return drivers of the investment (much more so than its price performance), in case they change and you need to rethink your investment.

When we’re asked to define alternatives, we often end up saying “well, anything that’s not traditional”. Actually that’s not quite such a lame definition; alternative investment practitioners know that the best opportunities are usually those that are yet well known or exploited, and hence the field of “alternative investment” is one populated by investment ideas that may not be immediately obvious.

Diversification is the only free lunch – make sure you are diversified

Alternative asset classes: P2P lending emerges as viable option in India (Financial Express), Rated: A

India has a unique problem of too much money chasing too few customers. So at one end, we have traditional salaried class getting loan offers and at the other end, people are left at the mercy of hawkish money lenders ever-more resembling Shakespeare’s Shylock. Clearly, P2P lending and borrowing is the disruption that was waiting to happen as banks and NBFCs have successfully struggled at twin accounts of making credit affordable and accessible in a credit-hungry nation.

Regulations helped fintech mature in 2017; yet 2018 may prove challenging for cos to navigate (Economic Times), Rated: A

If 2016 saw demonetisation change India’s fintech ecosystem forever, this year will be remembered for the Reserve Bank of India’s (RBI) multiple regulations aimed at organising the sector. Recognition of peer-to-peer lending startups, revised guidelines for digital wallets, finalising charges for digital payments—the second half of the year saw it all, setting the template for a more mature yet challenging 2018.

Meet The Top 20 Finalists Of The 5th Edition Of Wharton India Startup Challenge (Inc42), Rated: B

The 22nd Wharton India Economic Forum (WIEF) has announced the finalists of the Yes Bank – Wharton India Startup challenge.

Perpule: Perpule’s 1Pay is a self -checkout app for express checkouts and easy payments in Perpule’s partnered stores like Hypercity, Spar etc.

Capzest: Capzest is a digital lending platform focused on providing unsecured credit to individuals for income generation purposes. It secures partnerships with income generation service platforms and provides short term capital to their various stakeholders. It was founded in October 2015 in Mumbai by Rohan Adlakha andSayantan Sarkar.

Luharia Technologies Pvt. Ltd: Based in Hyderabad, Luharia Technologies owns and operates peer-to-peer platforms for businesses and individuals. Founded by ISB alumni Keerthi Kumar Jain, Luharia’s flagship solution is Vote4Edu, which is an online peer-to-peer lending platform for K-12 education loans. The company also runs Vote4Cash, a P2P marketplace where borrowers can avail cash loans. Machine Bank, an infrastructure ecommerce platform, and P2P lending platform SMEBank are also owned by Luharia Group.

Asia

Cyberattack brings a cryptocurrency exchange to its knees (Business Insider), Rated: A

A South Korea-based cryptocurrency exchange was brought to its knees by a cybersecurity attack.

Yapian, the operator of crypto-exchange Youbit, halted trading of cryptocurrencies on its venue Tuesday and filed for bankruptcy after a hack, according to reporting by The Wall Street Journal.

The Journal reported the exchange had 17% of its digital currency holdings stolen.

How to get a personal loan without a credit score? (Asianet Newsable), Rated: B

Your credit score reflects how well you have treated your credit in the past. It is one of the most important factors that lenders consider while evaluating a loan or credit card application. But what if you don’t have a credit score?

  1. NBFCs

If your bank has rejected your personal loan application, approach NBFCs. Since they usually target customers with low or no credit score, they are more flexible with credit scores than banks.

  1. Peer to Peer Lending

Since P2P platforms connect borrowers and investors online, they run with lower overheads and resultantly offer services cheaper than what traditional financial institutions have to offer. There are over 40 peer-to-peer lending platforms in India that are helping a large section of people who have been failed to qualify for loans from banks.

Canada

RATEHUB REPORTS GENERATIONAL DIVIDE WHEN IT COMES TO TRUST IN FINTECH (Betakit), Rated: A

A RateHub report examining FinTech trends in 2017 found that there is a generational divide when it comes to trust in the emerging technology.

Nearly twice as many millennials (44 percent) and Generation Xers (42 percent) said they trust robo-advisors, compared to baby boomers (23 percent).

Forty-seven percent of millennials and forty-eight percent of Gen Xers trust marketplace lenders, compared to 23 percent of boomers.

Online banking and contactless payments were the two most trusted FinTech offerings this year, capturing the trust of 85 percent and 62 percent of Canadians on average.

Access the full report here.

Authors:

George Popescu
Allen Taylor