Thursday May 24 2018, Daily News Digest

Small Dollar SBA Loans

News Comments Today’s main news: PeerStreet funds $1B in loans. Elevate Credit celebrates 2M non-prime customers. Assetz Capital raises rates. Australian government lends $700K to HashChing. Plaid expands into Canada. Today’s main analysis: Fintech gave brick-and-mortar SBA lender an edge. Today’s thought-provoking articles: How much mortgage borrowers can save by shopping around. Competition is pushing banks to change strategies. Millennials dominate […]

Small Dollar SBA Loans

News Comments

United States

United Kingdom

European Union

International

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News Summary

United States

PeerStreet Funds One Billion in Loans (Business Wire) Rated: AAA

PeerStreet, an award-winning platform for investing in real estate backed loans, today announced that one billion in loans have been funded through its marketplace since launch. This announcement comes after the company announced the close of its $30 million Series B last month.

Elevate Credit Celebrates Its 2 Millionth Non-Prime Customer (Citizens Tribute) Rated: AAA

Elevate Credit, Inc. (NYSE: ELVT) (“Elevate” or the “Company”) today announced it has served more than two million non-prime customers in the US and UK, saving them more than $3 billion versus the cost of payday loans. Elevate’s three products, RISE, Elastic and Sunny, employ advanced data and analytics to provide safe access to small-dollar credit to the two-thirds of Americans who cannot get personal unsecured loans from their banks.

Mortgage Borrowers Could Save the Most Ever by Shopping Around (Lending Tree) Rated: AAA

We calculate the Mortgage Rate Competition Index weekly as the median spread between the lowest and highest APR offered by lenders in our marketplace.

Purchase loans

  • Across all purchase loan applications on LendingTree for the week ending May 13, 2018, the index was 0.66, up 0.03 from the previous week.
  • How big of a deal is it to get a mortgage rate that’s 0.66% lower than the competition? Over 30 years, that could translate to $30,617 in savings on a $300,000 loan —over 10% of the total loan amount (see Mortgage Savings Tracker graphic below).
Source: Lending Tree

Lenders are ramping up competition as spring season heats up (MPA Magazine) Rated: A

The spread between the lowest median APR offered by mortgage lenders and the highest rate increased last week.

That’s according to the LendingTree Mortgage Rate Competition Index which analyzes rates offered by lenders on its platform. The spread for purchase loans increased from 0.23 a year ago to 0.66 last week and was up 0.03 from a week earlier.

For refinances the spread was 0.71, up from 0.67 a week earlier.

Here’s why GreenSky is one of the year’s most-anticipated fintech IPOs (Proactive Investors) Rated: A

The financial technology company plans to issue more than 34 million shares priced between US$21 and US$23. It’s scheduled to price the shares after the market close Thursday. At the midpoint price, GreenSky may raise as much as US$748mln.

The fintech has received US$560mln in funding from big-name investment firms such as PIMCO, TPG, Iconiq Capital and Fifth Third Bank.

OCC gives banks green light to compete with payday lenders (American Banker) Rated: A

The Office of the Comptroller of the Currency is shaking up the world of short-term lending by encouraging banks to offer high-interest rate loans to subprime borrowers as an alternative to payday lenders.

In a major break from past regulators, Comptroller Joseph Otting said Wednesday that he wants banks to originate loans of $300 to $5,000 to borrowers with FICO scores of 680 or below, with few other parameters beyond “sound underwriting.” The new OCC guidelines could open a $90 billion market to financial institutions.

Pew Commends OCC for Encouraging Banks to Provide Installment Loans (PR Newswire) Rated: A

The Pew Charitable Trusts today praised the Office of the Comptroller of the Currency (OCC) for formally encouraging banks to offer their customers safe, affordable small-dollar installment loans.

Millions of American adults, many of whom are low income and have damaged credit, spend more than $30 billion a year to borrow small amounts of money from payday and other high-cost lenders that operate outside the banking system. Pew research indicates that, given the opportunity, 8 in 10 payday loan borrowers would prefer to get credit from their banks or credit unions.

Americans Are Prioritizing Phone Payments Over Car Loans (Bloomberg) Rated: A

U.S. consumers are more devoted to their mobile phones than their automobiles.

The sea change has taken place over the last few years as mobile devices become an integral tool not just for communication with loved ones or employers, but also everything from banking to dating to watching TV and listening to music. As cars grow relatively less important, borrowers struggling to pay back their loans on time are increasingly prioritizing payments on the latest iPhone instead of making sure they hold on to their pickup or coupe.

Small businesses becoming more satisfied with fintech lenders (American Banker) Rated: A

Small-business owners are becoming increasingly satisfied with online lenders largely because they will often make loans that most banks won’t.

That was a key takeaway from an annual survey of small-business credit trends released Tuesday by the 12 Federal Reserve banks.

While small-business borrowers are generally more satisfied with banks — their rates are substantially lower — the survey found that the gap is narrowing.

Radius Bank Debuts Rewards Program with Enhanced Benefits For Loyal Customers (Crowdfund Insider) Rated: A

Radius Bank, a virtual bank focused on providing clients with banking solutions to better financial health, announced on Tuesday the launch of its new rewards program that offers enhanced benefits, such as increased transaction limits and cash back opportunities, for loyal customers.

According to Radius Bank, the rewards program is tiered into three levels based on criteria such as personal deposit balance and the longevity of the relationship clients have had with the Bank.

Loeb Seeks to Raise $ 400 Million for New Blank-Check Company (Bloomberg) Rated: A

Activist investor Dan Loeb is seeking to raise as much as $400 million to acquire financial technology firms via a so-called blank-check company.

The firm, Far Point Acquisition Corp., will be led by Tom Farley, who stepped down Monday as president of the New York Stock Exchange. Credit Suisse Group AG and Bank of America Corp. are leading the share sale, according to a regulatory filing Tuesday.

Far Point intends to issue 40 million units at $10 apiece under the terms of the offering. Each unit consists of one Class A share and one-third of one redeemable warrant.

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

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

Seacoast, which became a SmartBiz client late last year, booked $700,000 of gains from selling SBA loans in the first quarter, tripling what it reported a quarter earlier and surpassing its total for all of 2017 by 40%.

Kleffel, who said loans generated through SmartBiz hit 127% of targeted volume in the first quarter, predicted that the effort should allow Seacoast to become one of the SBA’s top 100 7(a) lenders for the fiscal year that ends on Sept. 30. To do so, Seacoast would likely have to increase year-over-year 7(a) originations by more than 60%, according to SBA data.

Source: American Banker

CREXi raises $ 11 million to bring commercial real estate out of the Dark Ages (Tech Crunch) Rated: A

CREXi — the CRE stands for “commercial real estate” — has been around since 2015, but recently announced an $11 million Series A as well as some interesting user numbers. Key investors include Jackson Square Ventures, Manifest Investment Partners, Lerer Hippeau, Freestyle Capital, TenOneTen Ventures and Founder Collective. The company has managed more than 100,000 “properties brought to market” on its platform and they have 200,000 users per month. They see more than 6,000 properties listed on the site each month.

 

American banks had their most profitable quarter ever (CNN) Rated: A

Bank profits soared by 28% during the first three months of 2018 to $56 billion, according to statistics published by the FDIC on Tuesday.

The stellar results were released hours before the House of Representatives is expected to pass legislation that would roll back some rules on community banks and regional lenders designed to prevent another financial crisis.

 

NEA Welcomes Jonathan Golden as Partner; Announces Several New Hires (Pilot Online) Rated: B

New Enterprise Associates, Inc. (NEA) today announced that Jonathan Golden has joined the firm as Partner. Golden, an experienced technology investor and the first product manager at Airbnb, will be based in the firm’s Menlo Park, Ca., and San Francisco offices. The firm also named Matthew McAviney, M.D., Tak Cheung, M.D., and Santhosh Palani, Ph.D., as Principals on the healthcare team.

As an active angel investor, Golden has backed numerous early-stage companies including Bowery Farming, Coinbase, Everlane, Funding Circle, and Tile, among others.

Trelix Now Provides End-to-End Mortgage Fulfillment with the Addition of its Closing Services Solution (Altisource) Rated: B

Trelix quality control and other due diligence products and services across the loan origination and securitization lifecycle, today announced the launch of its closing services solution that helps mortgage lenders efficiently and properly execute and settle their loans. With the addition of closing services, Trelix now provides a full suite of end-to-end fulfillment services for its customers.

United Kingdom

Assetz Capital Announces Its First Ever Rate Increase Across Access Accounts (Crowdfund Insider) Rated: AAA

UK-based peer-to-peer lending platform Assetz Capital announced last week its first ever rate rise across its access accounts. The online lender reported that the rate increase, which takes effect from 1st May 2018 until further notice, will take target interest rates for the Quick Access Account and 30-Day Access Account from 3.75% to 4.10% and from 4.25% to 5.10%. Assetz Capital also revealed both new and existing investors will benefit from the target interest rate boost, and it applies to both ISA-wrapped and non-ISA accounts.

New SME funding platform launches (Peer2Peer Finance) Rated: A

A NEW funding platform is aiming to make it easier for small- and medium-sized (SME) businesses to access loans, equity and grants.

The online platform has been created by Swoop, which is a rebrand of BizFly.

The firm says it holds a database of over 400 lenders.

P2P lenders accessible via the platform include Funding Circle, Zopa, Growth Street, RateSetter and MarketInvoice.

“Manchester Can Be A Global Leader In Fintech” Say Policymakers (Business Up North) Rated: B

Further evidence of the optimism and ambition of the event comes from the business deals and opportunities that are created among this group of people. For example, Dan Rajkumar, chief executive of White Label Crowdfunding and Rebuildingsociety, and co-founder of the event, has announced the win of a new customer, AGPeer, which is launching a new peer-to-peer lending platform targeted at the agriculture sector.

 

European Union

Millennials dominate European P2P lending (Peer2Peer Finance) Rated: AAA

MORE THAN half of all European peer-to-peer lenders are millennials, new research has found.

Data from European P2P loans platform Robo.cash has shown that the younger demographic is steadily taking over the leading position from the older generation of investors.

Over the past six months, Robo.cash has noticed that its share of investors aged between 22 and 37 has grown to 53.9 per cent.

A Swedish startup has raised 10 MSEK to help Nordic banks attract millennial house buyers (Business Insider) Rated: A

Headed by Klarna veteran Pär Isaksson, the startup offers established banks – not exactly known for their innovative zeal – a one-stop-shop for streamlining their mortgage lending online, from user interface to operations.

The service is planned for launch in Sweden this fall, to be followed by the rest of the Nordics during 2019. To execute on that, the company is now raising 10 million Swedish krona ($1,2 m) from a number of profiles in Swedish finance, including Swedbank’s former CFO Göran Bronner.

International

Fintech competition is pushing banks to change strategies (Business Insider) Rated: AAA

It has become apparent that the space is evolving in a way that will see new technologies have an outsized impact in the next few years, according to a reportfrom Temenos and The Economist Intelligence Unit. Additionally, the report examined the impact of open banking and how banks are shifting their business models, among other things.

Source: The Economist

Here are some of the key takeaways from the report:

  • Tech and digitization will have a bigger impact than regulation. Forty-eight percent of banking executives think new technologies, such as blockchain and AI, will have the biggest impact on retail banks through 2020, while only 43% are most worried about regulatory fines.
  • Though open banking initiatives are the center of many recent stories, only 13% of respondents think those initiatives will have the biggest impact on retail banks.
  • In terms of evolving their business models, 61% of banks want to develop niche propositions for their own customers, followed by 54% wanting to maintain their own products and become an aggregator of third party-products, and 53% opting to open their services to third-party developers.

Access the report here.

Exclusive Interview with Alex Mashinsky, Celsius CEO and VoIP Innovator (Crypto Globe) Rated: A

During the recent Milken Institute conference debate, Alex Mashinsky really stood out as a harsh critic of the traditional banking system, and a strong believer in the future of cryptocurrency. He recently had the ICO for his crypto lending platform Celsius Network, but his involvement in the tech world dates a few decades back. In the 1990s, when Alex invented VoIP (Voice over Internet Protocol), he strongly believed that internet calls through a decentralized protocol could disrupt the business model of phone companies. It is now used by over a billion peopleacross the globe.

Vlad: About that, just a few weeks ago I was thinking that cryptocurrency could replace all the functions of a bank except for that of lending money to other parties. I guess it’s so much easier to follow tradition and go to the bank to get a loan each time you need a large amount of money. But then I saw you debating at the Milken Institute Conference. I found out about Celsius and was amazed that someone found a solution around it. So can you tell me how these crypto loans work?

Alex Mashinsky: They work exactly the same way as in the case of banks. There’s no magic involved, we’ve implemented a cryptocurrency-driven system which follows the same principles you find in a bank, only that you can deposit or lend funds in ways that are more stimulating from a financial perspective. We are fairer, more transparent, and operate on the blockchain.

International Digital Asset Platform (IDAP Token): Crypto Derivatives? (Bitcoin Coin Exchange) Rated: B

The Idap.io, which is a shorter name for the International Digital Asset Platform, has been planning to transform the cryptocurrency market with its new projects and ideas.

What Is International Digital Asset Platform?

This platform is a derivatives instrument that lets you access assets of the market by clicking. It has many tools that you will help you to find the best investments that you can make in the market and discover why you should make them.

You will be able to access crypto pairs, swaps, ICO venture funds and even P2P lending via this new platform.

Australia

Australian Government Backs Fintech HashChing with $ 700,000 Loan from Jobs NSW (Crowdfund Insider) Rated: AAA

HashChing, a Sydney-based home loan marketplace, has just announced a $700,000 loan from Jobs NSW. Deputy Premier and Minister for Small Business John Barilaro said the NSW Government had backed the Fintech which is expected to create 46 jobs over the next five years.

India

How Zerodha is reinventing the rules of lending with an age-old product (Your Story) Rated: AAA

The country’s third-largest brokerage Zerodha has received a lending licence from the RBI, and is now gearing up to launch operations by June end.

Loan against a security, be it a movable or immovable asset, is an age-old practice. While banks have traditionally occupied the largest piece of the lending pie in this space, there are others like non-banking finance companies that are also establishing themselves.

Loans against shares have been a popular product in the retail category, but of late, these loans seen some degrowth. Clocking a growth rate of 21.5 percent in FY2015, the growth of loans against shares grew by 16.5 percent in FY2017, according to the RBI Bulletin.

Chinese lenders out for a taste of India (The Economic Times) Rated: AAA

Several digital lending startups have been receiving a unique set of visitors in recent months: Chinese lending companies looking to set shop in the country. At least half a dozen Chinese financial-technology companies have held multiple meetings with the founders of digital lending startups in India for investment as well as partnership opportunities, according to domestic entrepreneurs involved in those discussions.

Chinese lenders facing regulatory heat in China due to
1 Restriction in lending rates
2 No fresh licences being given out to lending startups
3 Credit bubble causing ballooning NPAs

Sectors the Chinese could be interested in
1 Consumer lending
2 Instant personal loans
3 Peer-to-peer lending

Late last year, Chinese regulators cracked down on the micro-lending space, tightening lending rates to 36% annualised and withholding new licences for online lending startups.

Asia

P2P lending feared to trigger black credit (News Vietnam Net) Rated: AAA

After registering to borrow money on Tima.vn, a reporter, who acted as a borrower, was told to send some necessary documents via Zalo or Facebook. He was informed that he would have to pay the interest rate of 18 percent per annum to the company, not including the consultancy fee.

The reporter, when contacting vaymuon.vn, was told that he would have to pay the interest rate of 1.5 percent per month, plus the fee of VND2,000 a day for every VND1 million worth of loan, and the interest rate and fee may change at different moments.

The borrower was also warned that if he cannot pay debts, the lenders will be able to take necessary measures to collect debts – making public about the debt, selling the debt to third parties or suing before the civil court.

 

Canada

Dead fintechs don’t wear Plaid (Fintech Futures) Rated: AAA

San Francisco-based fintech app provider Plaid is expanding to Canada as its first international market.

Authors:

George Popescu
Allen Taylor

Thursday February 15 2018, Daily News Digest

Growth of asset-backed securities

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

Growth of asset-backed securities

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Canada

News Summary

United States

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

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

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

MARKETPLACE LENDING (Diamond Hill), Rated: AAA

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

Source: Diamond Hill

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

Source: Diamond Hill

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

 

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

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

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

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

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

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

Q: What is the initial investment?

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

Security or scare-mongering?

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

Communication of Benefits Needed

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

Not Just in the UK: Open Banking Globally

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

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

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

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

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

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

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

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

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

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

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

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

Source: Business Insider

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

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

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

China

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

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

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

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

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

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

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

Source: Capital Watch
European Union

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

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

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

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

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

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

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

International

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

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

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

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

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

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

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

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

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

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

Australia/New Zealand

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

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

India

 

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

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

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

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

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

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

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

Asia

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

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

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

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

Canada

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

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

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

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

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

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

Authors:

George Popescu
Allen Taylor