Friday July 5 2019, Weekly News Digest

Friday July 5 2019, Weekly News Digest

News Comments Today’s main news: Kabbage secures $200M. Funding Circle plummets 20%. Zopa to raise 200M GBP pre-IPO. RateSetter Isa attracts over 250M GBP in subscriptions. OakNorth doubles staff. Funding Societies tied up in SME financing. Today’s main analysis: Recession talk, global easing, and SoFi rated pass-thru innovation. Today’s thought-provoking articles: 10 years of marketplace […]

The post Friday July 5 2019, Weekly News Digest appeared first on Lending Times.

Friday July 5 2019, Weekly News Digest

News Comments

United States

United Kingdom

International

Southeast Asia

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News Summary

United States

Kabbage secures 0M to fuel its AI-based loans platform for small businesses (Tech Crunch) Rated: AAA

Kabbage, the AI-based small business loans platform backed by SoftBank and others, is adding more firepower to its lending machine: the Atlanta-based startup has secured an additional $200 million in the form of a revolving credit facility from an unnamed subsidiary of a large life insurance company, managed and administered by 20 Gates Management, and Atalaya Capital Management.

The money comes on the heels of a $700 million securitization Kabbage secured just three months ago and it is notable not just for its size but its terms: it’s a four-year facility, a length of time that underscores a level of confidence in the company’s performance.

Recession Talk and Global Easing; SoFi Rated Pass-Thru Innovation (PeerIQ), Rated: AAA

In FinTech financing news, Ocrolus, led by CEO Sam Bobley, successfully raised $24 million in their Series B led by Oak HC/FT.

Source: PeerIQ, Goldman Sachs

SoFi Pass Thru Security

SoFi this week secured a provisional A-rating from DBRS on a $200 MM pass-thru security consisting of student refi loans [ PSR and announcement ]. Notably, the structure is the first CUSIP that does not rely on over-collateralization or subordination to provide credit enhancement for investors. This is a promising innovation from the first FinTech to crack open the securitization market for student refi loans.

Ten Years of Investing in Marketplace Lending (Lending Academy) Rated: AAA

This month marks ten years since I made my first investment in what was then called peer to peer lending.

Ten Ways Marketplace Lending Has Changed Since 2009

  1. Scale
  2. The Rise of Institutional Investors
  3. The Rise of Automation

Home Affordability in the “13 Original Colonies” (DS News) Rated: A

To celebrate the Fourth of July, LendingTree, the nation’s largest online loan marketplace, has taken a look at the states that were present at the birth of the country,” said LendingTree Chief Economist Tendayi Kapfidze.

New Hampshire is the most affordable of the original 13 states, with a median home value of $244,900 and a median salary of $71,305. New Hampshire capital Concord is also the most affordable capital, with a median home value of $212,600, and a median salary of $61,310.

The least affordable state is New York, with a median home value of $293,000, which is less than Massachuset’s median value of $352,600, but New York’s median income is slightly less, at $62,765, plus an affordability surplus of just $292.

Embracing The Digital Lending Revolution (Monja Blog) Rated: A

A recent report by McKinsey & Company pointed out that in the traditional lending process of most banks, the “time to decision” for small business loans is usually from three to five weeks, while the “time to cash” can take up to three months. Personal loans usually have shorter processing times but still, take days or even weeks.

Digital lending helps banks retain individual and business customers by making the process more convenient and faster. According to an extensive survey by the American Bankers Association in 2018, an overwhelming majority of banks agree that some level of digitalization is vital to keeping their loan customers from going elsewhere.

Funds raised for direct lending hit a fresh high this year, raising concerns the market could be running a little hot amid the deluge.

Capital One keeps closing branches, even as rivals open them (American Banker) Rated: A

The McLean, Va., company, with roughly $373 billion of assets, has shuttered more than half of its branches over the past decade, including nearly 50 in the second quarter alone, according to a recent analysis by Sandler O’Neill & Partners. It now has fewer than 500 branches in eight states and the District of Columbia.

Policing The Internet Is Critical To Protecting Online Lending Consumers (Forbes) Rated: A

In May, the United States Federal Reserve issued its “

How Two College Dropouts Made $ 860 Million by the Time They Were 23 (Fortune) Rated: A

They are the founders and top executives of Brex Inc. a fintech startup recently valued at $2.6 billion, with an unlikely origin story.

Brex, which launched its first product last year, has become a fintech darling, catapulting its founders into the ranks of the richest entrepreneurs — on paper at least. Today their stakes in the company are worth an estimated $430 million each, according to an analysis by EquityZen, a marketplace for shares of tech firms that haven’t yet gone public.

A ‘turtle bank’ plays catch-up in small-business lending (American Banker) Rated: B

Provident Financial in Iselin, N.J., has partnered with a fintech to become a stronger small-business lender.

The $9.8 billion-asset company is working with Fundation to offer unsecured small-dollar loans to commercial clients. While available in Provident’s more than 80 branches, applications for loans as big as $250,000 are also being accepted online.

United Kingdom

Funding Circle shocks the City, plummeting 20% after slashing growth forecasts thanks to Brexit (Evening Standard) Rated: AAA

The FTSE 250 company now expects 20% revenue growth this year, half its previous guidance of 40%, amid slumping demand for loans from small businesses.

The latest miserable update sent its shares down 20%, or 34p, to 129.6p and piles more pain on investors after a torrid nine months on the stock market. Since going public the shares have fallen 70% amid wider concerns about the peer-to-peer lending model.

Funding Circle bins the boasts as Brexit bites (Brinkwire) Rated: A

As if to show what’s possible, the online lending platform had itself valued at a remarkable £1.5bn in the flotation last year. Investors were invited to ignore current losses and feel the growth in revenues – up 55% to £142m in 2018, it turned out.

Few businesses, even fintech operators with smart kit and a big marketing budget, can sustain that pace, but Funding Circle still reckoned 40% was on the cards this year.

Companies & Markets show: Fintech’s big bang (Investors Chronicle) Rated: A

Digital editor Graeme Davies in discussion with James Norrington and Alex Newman on the latest problems for Funding Circle, Jupiter’s fund manager departure and the massive opportunities in the fin tech space both now and in the future.

Is Funding Circle the barometer for SME opinions on Brexit? (Daily Fintech) Rated: AAA

Loans under management on the platform are up 37% for the first half of 2019 compared to the same period in 2018, currently sitting at £3.5 billion. Originations are up 14% on the prior corresponding period, at £1.2 billion. All healthy figures in their own right.

separate study by academics at St Andrew’s University found that in 2016, 25% of businesses viewed Brexit as a major obstacle to their success. This number had jumped from 16% in the year prior, when they were surveyed right after the referendum.

Zopa plans £200m fundraise ahead of bank launch and IPO (P2P Finance) Rated: AAA

ZOPA is reportedly looking to raise up to £200m as it gears up for its bank launch and a possible stockmarket flotation.

The peer-to-peer consumer lender is in talks with private equity firms and sovereign wealth funds about the fresh funding, which could be secured in the next few months, chief executive Jaidev Janardana (pictured) told Bloomberg.

RateSetter’s Isa attracts more than £250m in subscriptions (Bridging & Commercial) Rated: AAA

RateSetter has revealed that its Isa has attracted over £250m in subscriptions by the end of June.

The P2P lender’s RateSetter Isa — which was launched in February 2018 — received £50m of Isa inflows in the last three months alone.

More than 600,000 customers have used RateSetter to invest or borrow and it has originated £3.3bn of loans, which has generated over £135m in returns for investors to date.

FINTECH UNICORN OAKNORTH DOUBLES STAFF (Business Cloud) Rated: AAA

Challenger bank OakNorth has doubled its staff after securing more than $1 billion in funding.

The London-based unicorn has also signed a five-year deal to provide its technology platform, OakNorth Analytical Intelligence, to Dutch lender NIBC Bank.

With a valuation of $2.8bn, it has rapidly grown to become one of Europe’s most valuable companies, having raised more than $1bn, a record for a European FinTech, from the likes of Japan’s SoftBank Group.

Moneybox launches ISA partnership with OakNorth Bank (AltFi News) Rated: A

OakNorth’s growing role as the go-to ISA partner to the digital disruptors of UK fintech has been further cemented. The bank, which was briefly Europe’s most valuable fintech earlier this year, has today joined forces with Moneybox to offer the latter’s 200k-strong, and growing, user base a Cash Lifetime ISA.

The Moneybox Cash Lifetime ISA, with an interest rate of 1.4 per cent, is designed to help customers who are saving for their first home with its government-backed 25 per cent bonus up to £1,000 per year. Users can open an account with £1.

Nutmeg is another fintech offering the Lifetime ISA while, Skipton – the UK’s fourth largest building society – says it has had over 130,000 accounts opened to date.

OakNorth also powered tax-wrapped savings accounts for Monzo’s c.2m customers in March, although they were not Lifetime ISAs. OakNorth reported a 220 per cent increase in profits last year to £33.9m.

FIBA to publish default rates of lenders (Bridging & Commercial) Rated: A

Adam Tyler, executive chairman at FIBA, said the move followed concerns about the transparency of default rates in the industry, which was raised by members and lender partners.

Mark Posniak, managing director at Octane Capital, initiated the conversation about default interest last week via LinkedIn.

Growth Street rockets past £500m of matched loans (Business Love London) Rated: A

Growth Street, which is reinventing the business overdraft, has hit a big milestones in June. It has now matched over £500m worth of investor funds on its platform since launch in 2014.

LendingCrowd partners with Brismo for verified returns data (Fintech Finance) Rated: A

LendingCrowd, Scotland’s only fintech lending platform, has today announced that it is the latest leading marketplace to partner with Brismo to provide sophisticated and independently verified performance metrics for investors.

Brismo is a London-based provider of lending performance data that uses detailed loan information to analyse and verify returns, allowing investors to perform like-for-like analysis.

Purplebricks $ 5m US retreat shows startups need to slow down (Sifted) Rated: A

Britain’s online estate agent Purplebricks this week said it would pull out of the US to focus on its hometurf.

The peer-to-peer industry isn’t doing enough to protect investors (City AM) Rated: A

Many peer-to-peer lenders target unsophisticated retail investors, who can invest as little as £100. And yet, there is a relatively high cost to on-board small investors, because platforms have to handle customer calls, and anti-money laundering requirements.

There have been dozens of failures, but the closure of Lendy has shocked the industry. The high-profile peer-to-peer lender accrued more than £160m on its loan book, and by the time the administrators were called, £90m was believed to be in default.

Lendingblock partners with institutional crypto platform Caspian (Institutional Asset Manager), Rated: B

Lendingblock, a regulated, open exchange for institutional borrowing and lending of digital assets, has partnered with Caspian, the institutional crypto trading platform. 

This partnership enables essential market infrastructure for borrowing and lending digital assets to be scaled to institutions globally.

China

Breakneck growth in China’s credit-card debt since 2012 raises worries about a potential bust (South China Morning Post) Rated: AAA

Credit-card debt has grown more than sixfold in China since 2012, mirroring booms in other Asian markets that ended badly and raising concerns about the potential risks to Chinese banks, according to a new report from S&P Global Ratings.

The credit rating agency said that unsecured consumer lending in the mainland is expected to increase at a rate of 20 per cent annually for the next two years, a slight slowdown, but reminiscent of problematic booms in Hong Kong, South Korea and Taiwan.

Source: South China Morning Post

It is rash to expect a rerun of past stock market booms in China (Financial Times) Rated: A

One way to profit from Chinese equities is to play a familiar paradox. Market participants know that when economic growth ebbs significantly, Shanghai share prices tend to rally.

The key to this incongruity might be called the “Communist party put”. In the same way that Alan Greenspan, former chairman of the US Federal Reserve, used to relax US monetary policy when dynamism stalled, a tactic known as the “Greenspan put”, China’s ruling party often steps in when commerce starts to wilt.

Regulators curb market irregularities (Ecna) Rated: A

China has spared no efforts to carry out supply-side reform and fight against financial market irregularities by better regulating high-risk institutions to make overall risk manageable, officials of the China Banking and Insurance Regulatory Commission said on Thursday.

In the past two years, China reduced high-risk assets worth 13.74 trillion yuan ($2 trillion), restraining the flow of resources from the real economy — the part of the economy that produces goods and services — to the virtual economy, said Zhou Liang, vice-chairman of the CBIRC, at a news conference.

European Union

Fintech Lender creditshelf Doubles Loan Volume in First Half of 2019 (Crowdfund Insider) Rated: AAA

creditshelf Aktiengesellschaft, a Germany based online lender, says it lending volume has more than doubled in volume during the first 6 months of 2019. In comparing the first half of 2019 versus the first six months of 2018,  creditshelf reports that the volume of arranged loans was  € 35.8 million or 132 % higher year-on-year (prior at € 15.4 million).

June 2019 was the strongest month in creditshelf’s history with arranged loans of € 12.2 million.

The company says the pipeline for the second half of the year is well filled.

PropertyBridges attracts first tranche of peer-to-peer loans for Limerick housing project in record time (Irish Examiner) Rated: A

A project to develop 16 houses in Pallaskenry, Co Limerick, is well on track to raise the €2.4m in funding that it pitched out to peer-to-peer investors just a few weeks ago, having very quickly raised the first tranche of €665,000.

PropertyBridges.com, who are leading the financial management of the project, will raise the remainder in three further tranches when the development progresses over the next 12 months.

International

International P2P Lending Volumes June 2019 (P2P Banking) Rated: AAA

Arboribus is listed for the last time, as the platform will cease to originate new loans.

Generic Looks to Launch Tokenized Peer to Peer Lending Platform (Crowdfund Insider) Rated: A

Blockchain startup Generic wants to create a tokenized bridge for peer to peer lending/merchant cash advanced credit, according to a note from the company. While not live yet, Generic claims it will “create a direct bridge between users and companies looking for funds, without an intermediary.”

FinTech is ‘new normal’ as majority are regular users (FS Tech) Rated: B

A global survey of 883 consumers from the UK, Europe, Asia, Africa, Latin America and Australasia, by financial advisory company deVere Group found that 55 per cent were using FinTech services online or via mobile on a regular basis to access and manage their money.

Australia

Loans.com.au passes on the full rate cut, now offers mortgage rates as low as 3.03% (Mozo) Rated: AAA

This afternoon, however, loans.com.au will be bucking the trend. The online lender announced it will be passing on the cut in full to its variable home loan customers, effective immediately.

The changes will apply to both new and existing customers, and will see owner occupiers looking at rates as low as 3.03% (3.05% p.a. comparison rate*) – among the more impressive on the market. Below, we’ve compiled some stellar loans.com.au home loans for you to check out.

India

Expectations of the Fintech Industry From the Union Budget of 2019 (Entrepreneur) Rated: AAA

The online lending industry has emerged as a massive relief for both individuals and small businesses that have historically been facing a lack of funds and were rendered underserved by traditional financial institutions. But for the digital model to truly thrive, fintech lenders need to have ready access to the credit guarantee schemes being initiated by the government to build a supportive financial structure. For instance, recent government initiatives like that of SIDBI wherein loans can be provided in under an hour, or its subsidiary MUDRA have only been supporting banks, NBFCs, and micro-finance institutions. But their penetration levels are relatively low, because of which a substantial portion of these funds remain unutilized. Therefore, the fintech industry expects the government to extend credit and allow the players to participate in these recent initiatives and other measures being undertaken.

‘P2P model is a solution for many small businesses’ (Deccan Herald) Rated: A

P2P model is a solution for many small businesses that are struggling for funds. Digital lending has changed the face of many developing countries’ economies because of the transparent environment and paperless approvals.

So, from the perspective of Peer-to-Peer (P2P) industry in India, it has tremendous opportunities because this industry is still at a nascent stage and requires encouragement through tax benefits.

Canada

BMO LAUNCHES DIGITAL-ONLY LINE OF CREDIT SERVICE (Betakit) Rated: AAA

Bank of Montreal is launching a new digital-only lending solution, allowing customers to apply for a personal line of credit directly from their mobile devices.

Through the new solution, BMO said customers can apply for credit by taking a short application, receiving a decision on their loan within minutes. Customers will get a real-time decision on their application, as well as faster access to credit, allowing them to tap into their loans within 48 hours of approval.

Asia

Funding Societies in SME Financing Tie-Up (Finews) Rated: AAA

Funding Societies has entered into a partnership with Lazada Malaysia to offers merchants on the e-commerce marketplace short-term financing, Malaysian newspaper «The Star» reported on Thursday.

As part of the tie-up, the peer-to-peer lending platform will leverage alternative data from Lazada as part of its risk assessment, which will provide more opportunities for online businesses to get tailor-made financing products conveniently, the firm said in a joint press statement.

Helios P2P Sri Lanka’s First Peer-To-Peer Lending Platform Secures Second Round Funding (Daily Mirror) Rated: A

Helios P2P – Sri Lanka’s First Peer-To-Peer Lending Platform secured their second round of funding from John Keells X which is the corporate accelerator of John Keells Holdings PLC. Helios P2P were winners of the 2017 John Keells X accelerator programme and the first startup to receive funding for the second stage of the accelerator.

The peer-to –peer lending industry, valued globally at $64 billion in 2015, is growing at a compound annual growth rate of approximately 50%.

Budget Expectations 2019: P2P lending hopes for these policy changes (Banking & Finance) Rated: A

So what will it be – fiscal consolidation or a focus on growth? Getting the balance right is the key here. The top priority according to Abhishek Gandhi, Co-Founder & CFO, RupeeCircle from this budget is to tackle consumption slowdown and boost it by cutting taxes which will increase the spending power of the people, especially in rural areas and the lower income groups. The subliminal effect of this step will boost investments as well. This will especially be a shot in the arm for the Peer-to-peer (P2P) the lending landscape which has been affected by the sluggish pace of policy changes in the past several months (understandably due to the impending general elections of 2019).

Visa Indonesia opens applications for fintech innovation competition (Jakarta Post) Rated: B

Visa Indonesia, a subsidiary of California-based payment systems provider Visa, opened on Wednesday applications for its Visa Everywhere Initiative competition, which is designed to crowdsource financial inclusion solutions from local financial technology (fintech) start-ups.

Authors:

George Popescu
Allen Taylor

The post Friday July 5 2019, Weekly News Digest appeared first on Lending Times.

Thursday July 6 2019, Weekly News Digest

PayPal

News Comments Today’s main news: 3 top execs exit SoFi. Zopa proclaims end of monogamous banking. LendInvest earnings hit the roof. Financial Conduct Authority sets new rules for UK P2P lending. Quarter of global small firms are significant fintech users. Biz2Credit raises $52M. Today’s main analysis: Alternative lenders steal business from banks. P2P lending will be […]

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

PayPal

News Comments

United States

United Kingdom

China/Hong Kong

International

Other

News Summary

United States

SoFi Loses Three Top Executives (WSJ), Rated: AAA

Three top executives of Social Finance Inc. are leaving the financial-tech startup in the coming weeks, adding to the challenges the company faces as it moves through a tough environment for online lenders.

Marketing chief Joanne Bradford, head of risk Kevin Moss and Ashish Jain, the lender’s top capital markets executive, recently told Chief Executive Anthony Noto about their plans to step down from their roles. All three had been at the company prior to Mr. Noto taking the reins in early 2018.

Tech Driving Bank Earnings Growth (PeerIQ), Rated: AAA

US first quarter GDP growth was revised lower to 3.1%. There is fear that the economy is slowing due to the ongoing trade war and the length of this economic expansion. The 3 month-10 year yield curve fell to its most inverted since 2007 to -12.3 bps. Recessions have usually followed within 18 months of this curve inverting. The market is looking to the Fed to bolster economic growth with the odds of a rate cut at the September meeting now at 54%.

Source: CME, PeerIQ

Technology Driving Earnings Growth

Banks and lenders are reaping the benefits of their technology investments now. Banks like Citi have been able to offer new products and grow their deposit base, while Capital One has improved its efficiency ratio by 400 bps. Banks and lenders continue to make large technology investments for faster growth at lower cost.

Alternative Lenders Continue to Steal Business From Banks (The Financial Brand), Rated: AAA

What is less well known is the rapid growth of PayPal as a digital lending alternative. It may be time for banks and credit unions to wake up, however, as the company announced that they had crossed $10 billion in small business lending in only 5 years.

Amazon Joins PayPal as Top 5 Small Business Digital Lender

Amazon has joined PayPal, OnDeck, Kabbage, and Square as a top 5 digital small business lender. In fact, Amazon revealed that it had made more than $1 billion in small business loans to US-based merchants in 2018.

The peer-to-peer business lender, Funding Circle, also revealed its first-quarter trading update, showing that loans under management rose by 44% compared to the first quarter of 2018, while originations grew by 23% (they have originated $9.5 billion in loans).

Consumer Financial Protection Bureau Releases Rules for Comprehensive Reform of Debt Collection Industry (Debevoise & Plimpton), Rated: AAA

On May 7, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) released a Notice of Proposed Rulemaking (“NPRM” or “Notice”) to increase regulation of the debt collection industry.1 The much-anticipated Notice is the outgrowth of the CFPB’s 2016 Outline of Proposals (the “Outline” or the “2016 Outline”), which was a cornerstone of the Obama Administration’s efforts to protect consumers and overhaul all aspects of consumer finance (see our August 10, 2016 client alert on the Outline here). One presidential election and two CFPB Directors later, CFPB Director Kathleen Kraninger announced a more limited plan to put in place substantial protections, but which rejects some of the 2016 Outline’s more ambitious proposals. The NPRM would overhaul the industry by, for example, requiring that debt collectors make no more than seven attempts by telephone per week to reach consumers about specific debts, and allow debtors to opt out of allowing collectors to contact them via e-mail, text messages, or other media. However, the proposal fails to address many of the Outline’s calls for increased regulation of substantiation of debt, decedent debt, and transfer of information to subsequent collectors (among other things).

See the full report here.

Biz2Credit Raises $ 52M In Funding To Expand (PYMNTS), Rated: AAA

Biz2Credit, the online lending platform that helps banks and other financial institutions manage small and medium-sized business (SMB) lending processes, announced Tuesday (June 4) that it raised $52 million in venture funding.

Biz2Credit said the Series B funding round was led by WestBridge Capital.

Jared Kaplan of OppLoans (Lend Academy), Rated: A

The next guest on the Lend Academy Podcast is Jared Kaplan, the CEO of OppLoans.

Lighter Capital Introduces Suite of Alternative Financing Solutions to Fund More Startups up to $ 3 Million (Yahoo! Finance), Rated: A

Lighter Capital announced today that it has launched new financing products to better match the capital needs of growing startups. To date, Lighter Capital has provided over $150 million in more than 500 rounds of financing to over 300 startups. The company has historically provided Revenue-Based Financing and has now broadened its portfolio to include lines of credit and term loans, designed to provide startups capital over time as they need it. Unlike most venture debt, startups do not need to have raised Venture Capital to qualify for funding.

1. Lighter Line of Credit – Startups have fluctuations in capital needs, to make essential payments like payroll or wait for a big customer payment. The Lighter Line of Credit is a revolving working capital line. It enables startups to draw and return capital numerous times, to even out their cash needs.

2. Lighter Term Loan – Provides startups growth capital in a traditional structure with predictable payments. Lighter Capital will also make forward commitments, giving startups the right to get additional capital for a period of time. For example, a startup could get a $500,000 loan today and a commitment from Lighter Capital to provide an additional $500,000 over the following six months.

LendPro Unveils Dynamic Routing Capability to Streamline POS Financing (LendPro Email), Rated: A

LendPro LLC, a provider of Lending-As-A-Service (LaaS) products and platforms for retailers, today unveiled Dynamic Routing —an innovative POS financing solution that automatically matches consumer credit applications with the best-available lending option.

While alternative lending software moves credit applications through a pre-defined, inflexible process, Dynamic Routing by LendPro dynamically guides borrower application data to lenders in the merchant’s financing portfolio based on the attributes of the sale. For example, if the total price for a specific purchase is too large (or small) for a lender’s target loan size, LendPro’s Dynamic Routing system can route the applicant to a different lender. This technological innovation saves time, increases simplicity, and may help the borrower avoid an unwanted credit application.

Why it’s Time to Ask Your Wealth Manager About P2P Lending (Crowdfund Insider), Rated: A

Using a crowdfunding platform, however, 5,000 individuals might each invest $1,000 into the company. Each of those individual investors is exposed to a very small amount of risk, and the company is able to raise the funds without surrendering ownership.

Possible Finance lands $ 10.5 million to provide consumers softer, kinder short-term loans (TechCrunch), Rated: A

It’s one reason that venture capitalist Rebecca Lynn, a managing partner with Canvas Ventures  and an early investor in the online lending company LendingClub, has largely steered clear of the numerous startups crowding into the industry in recent years. It’s also why she just led a $10.5 million investment in Possible Finance, a two-year-old, Seattle-based outfit that’s doing what she “thought was impossible,” she says. The startup is “helping people on the lower end of the credit spectrum improve their financial outlook without being predatory.”

Santa Clarita Ranked Second Highest ‘Debt-Ridden’ City In California (Home Town Station), Rated: A

LendingTree, an online loan marketplace, released a report this week detailing the accrued debt of all California cities with a population of at least 50,000.

Santa Clarita ranked the second highest in auto loan debt with an average of about $21,000, and second in the state for personal loan debt, excluding mortgages, with an average of just over $6,000.

Source: Home Town Station

Cities With the Highest Percentage of Black Homeowners (Black Enterprise), Rated: A

Even though housing discrimination has been outlawed for 50 years, studies show that the U.S. black homeownership rate isn’t any higher than when the Fair Housing Act initially passed in 1968. In fact, the racial gap between white and black homeowners today is significant. According to the U.S. Census Bureau, the homeownership rate among white Americans is 73.2%, while the black homeownership rate stands at 41.1%. In comparison, 42% of black households owned their homes back in 1970, two years after housing discrimination based on race, color, religion, and national origin was outlawed.

According to the report, the U.S. cities that have the highest percentage of black homeowners are San Jose, Los Angeles, Salt Lake City, San Antonio, and Portland. On the other hand, the cities where black homeownership is lowest relative to overall population are Memphis, New Orleans, Baltimore, Virginia Beach, and Milwaukee, where the median household income for black residents is a mere $28,928.

See LendingTree’s report here.

Real Crowd Says HNW Investors Poised to Boost Real Estate Investments in 2019 (Crowdfund Insider), Rated: A

Real estate crowdfunding platform RealCrowd reports that High Net Worth (HNW) investors are looking to increase their portfolio of real estate investments during 2019. According to a survey by the Fintech platform, 53% of surveyed HNW individuals expect to make “two-to-four direct real estate investments in 2019.” Specific details on the survey process were not revealed.

This is a big improvement over year prior when just 33% planned to do the same thus an increase of around 20%.

The survey also stated that 47% of respondents’ desire to allocate more than 25 percent of their investment portfolio to commercial real estate.

WealthStone – Democratizing Access to Commercial Real Estate (PR Newswire), Rated: A

WealthStone LLC announces the launch of its new website, WealthStoneLLC.com, where technology brings increased access to institutional-quality commercial real estate investments to a wider audience, while delivering the best customer experience possible for its growing global investor base.

3 Investments That Lead to Passive Income (Realty Biz News), Rated: B

Peer-to-peer lending is a relative newcomer to the world of investments. Lending Club and Prosper were the first institutions to offer P2P loans beginning in mid-2000, and they’ve changed the way countless loans are handled. Instead of going to the bank, borrowers apply for loans from other people. People who have been denied loans from financial institutions are often approved for P2P loans at rates that are lower than those of larger financial institutions.

Sagent Lending Technologies to Transform the Lending Experience, Powered by Microsoft Azure (BusinessWire), Rated: A

Sagent Lending Technologies announced today a strategic initiative to transform the borrower and the lender experience through Microsoft Azure. Sagent will leverage the potential of artificial intelligence, machine learning, data science, and cognitive services available on Azure that will provide a reimagined experience for Sagent clients and their consumer borrowers.

BofA, Longtime Leader in Leveraged Loans, Warns of `Carnage’ (Bloomberg), Rated: A

The U.S. economy is on solid footing except for one potential trouble spot, according to Bank of America Corp.’sChief Executive Officer Brian Moynihan: leveraged loans — a business the bank has dominated for a decade.

Bank of America was bookrunner on some $317 billion of leveraged loans this year, accounting for 10.8 percent of the market share, the Bloomberg data show, which captures all leveraged term loans and revolver facilities that are either new or have been amended.

Moody’s Investors Service said covenant quality for 2018’s last quarter was close to a record low, and the rating company sees no signs of improvement this year. Federal Reserve Chairman Jerome Powell said last month that the market looks a lot like the mortgage industry in the run-up to the subprime crisis.

Digital Banks Look to Attract Older Generations (LendIt), Rated: A

One of the challenges for the challenger banks like Monzo, Starling and Revolut is to go beyond the young demographic they’ve been successful at attracting to their products; not surprisingly, less than 5% of Monzo’s customers over 60; as more bank branch close they are looking to bring in older customers who are no longer being served by traditional banks; Monzo and Starling have both added the ability to make cash deposits; Starling recently partnered with the post office and Monzo partnered with a payments service which is in 30,000 shops in the UK; these digital banks and their competitors are experimenting in how they can have more physical points of contact with customers; Revolut recently shared a plain English customer contract in a move to help their customers better understand the product.

The tech banks are using to boost deposit growth (American Banker), Rated: A

First Arkansas & Trust, for example, is using Plinqit, a goal-oriented savings app from a fintech called HTMA Holdings, in the hopes of boosting deposits.

And some banks have begun to specialize in the banking-as-a-service model to increase deposits.

Following is a look at how regional and community banks are employing tech to help in the race for deposit growth:

Wharton just released an online fintech course for the masses (Technical.ly), Rated: A

On Thursday, the University of Pennsylvania’s Wharton Online announced its new virtual fintech specialization program, “FinTech: Foundations and Applications of Financial Technologies,” for students and professionals who want to learn about the rapidly changing tech.

The four-course financial program is available via online education platform Coursera, and will detail the use of cryptocurrency, robo-advising, crowdfunding and modern investing.

BlueVine Appoints Silicon Valley Veteran Herman Man to Chief Product Officer (BlueVine), Rated: B

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced today that it has named Silicon Valley technology and engineering veteran, Herman Man, its Chief Product Officer. In this role, Man will focus on developing the next generation of BlueVine products and oversee the company’s product vision, strategy, design and execution to deliver on its mission to provide fast, fair and easy financing solutions every small business needs to thrive.

Lendio Announces New Senior Vice President of Lender & Partner Strategy (Lendio), Rated: B

Lendio announced today that Denada Ramnishta has been promoted to Senior Vice President of Lender & Partner Strategy.

Thomas M. Affolter Joins White Oak as Managing Director to Bolster Origination Efforts (Yahoo! Finance), Rated: B

White Oak Global Advisors, LLC (White Oak) is pleased to announce that Thomas (Tom) M. Affolter has joined White Oak as a Managing Director based in Chicago. Mr. Affolter will focus on originating new investment opportunities and expanding the coverage network for White Oak’s private debt funds.

United Kingdom

Zopa says fintech revolution has killed off monogamous banking (P2P Finance News), Rated: AAA

ZOPA has declared that “monogamous banking is a thing of the past”, as new research reveals that the average UK adult has a relationship with seven different financial providers.

The peer-to-peer consumer lender, which is launching a digital bank, said that the fintech revolution has changed the shape of financial services for consumers.

It cited a survey that found 71 per cent of UK adults said they do not need a relationship with their main bank, while two thirds are actively using products from banks and financial providers other than their main current account provider.

LendInvest earnings soar as it looks to disrupt ‘slow moving’ banks (P2P Finance News), Rated: AAA

ONLINE property lender LendInvest has reported an 82 per cent jump in core earnings, as it looks to disrupt the UK mortgage market.

LendInvest, which used to be a peer-to-peer lender before it shut its platform to retail investors, posted core earnings of £4m for the year ended 31 March 2019, up from £2.2m the previous year.

The firm, which is considering a stock market flotation, said that platform assets rose by 69 per cent to £788.3m over the same period, while revenue rose by 36 per cent to £72.7m.

FCA Announces New Rules For UK P2P Lending Platforms (Lend Academy), Rated: AAA

The long awaited changes to P2P lending regulations in the UK are finally here. Today, the Financial Conduct Authority (FCA) announced that the new rules for peer to peer lending platforms have been set and will come into effect on December 9, 2019.

  • Introducing more explicit requirements to clarify what governance arrangements, systems and controls platforms need to have in place to support the outcomes they advertise. These new rules focus particularly on credit risk assessment, risk management and fair valuation practices, especially for platforms with more complex business models.
  • Strengthening rules on plans for the wind-down of P2P platforms.
  • Applying marketing restrictions to P2P platforms, designed to protect new or less experienced investors. We have also clarified the practical implication of these new rules as they apply to P2P agreements.
  • Introducing a requirement that an appropriateness assessment (to assess an investor’s knowledge and experience of P2P investments) be undertaken, where no advice has been given to the investor. We have also provided guidance on what the assessment should include.
  • Setting out the minimum information that P2P platforms need to provide to investors

Assetz Capital hits bridging loans and small business lending milestones (AltFi), Rated: A

Peer-to-peer lender Assetz Capital said it has hit a double milestone, providing over £100m in bridging loans and a further £50m in small business funding, “as the appetite for alternative forms of finance continues to rise across the UK”.

The Manchester-based fintech adds that since it was founded six years ago it has lent over £780m to small firms and property developers, helping build 3,700 homes in Britain.

UK P2P sector poised for “significant further growth” (P2P Finance News), Rated: A

THE UK’S peer-to-peer lending sector is set to experience “significant further growth”, according to Standard & Poor’s.

A report released by the ratings agency this week said that the growing involvement of institutional funds and increased securitisation issuance are set to boost the industry.

Santander and eBay team up on UK loans app (Techradar), Rated: A

In an effort to fend off tech giants and newer digital rivals, Santander and eBay have announced a new lending partnership for small businesses.

The Spanish bank will begin offering loans to over 200,000 small and medium-sized businesses that sell products on eBay in the UK through its financial technology app Astro.

As £165m Lendy collapses, experts warn ‘a dozen more peer-to-peer firms will follow’ (The Telegraph), Rated: A

While investments of varying risk are available, some platforms have tempted consumers with returns of more than 12pc on high-risk projects. But the collapse of one large platform, Lendy, which offered loans on property developments, has concerned investors across the sector.

Wagestream Says One Complaint Against PayDay Lenders is Resolved for Every Three Received (Crowdfund Insider), Rated: A

Payday loan alternative Wagestream has issued a release stating the Financial Ombudsman Service (FOS) has received 47,220 complaints against payday lenders since 2018. Yet while many complaints have been received only a fraction have been resolved. Wagestream states that only one out of three are resolved or just under 17,000.

Welendus unveils rebrand as Fund Ourselves (P2P Finance News), Rated: B

WELENDUS, the peer-to-peer payday lender, has rebranded as Fund Ourselves.

ARBUTHNOT SPECIALIST FINANCE CONCLUDES FIRST LOAN COMPLETION SINCE LAUNCHING THE BUSINESS (Arbuthnot Latham), Rated: B

Arbuthnot Specialist Finance (ASFL) is pleased to announce it has concluded its first loan completion since announcing its launch in late May. The deal is a 70% LTV residential product loan on a property located less than half a mile from the University of Central Lancashire campus in Preston.

China/Hong Kong

The Escalating US-China Trade War, Part 1 (In Homeland Security), Rated: AAA

China is in debt, significantly. Part of the problem is that it is difficult, if not impossible, to assign a figure to the debt. There are Chinese statistics for official debt, but following the 2008 economic crisis, China implemented new restrictions on lending. Over the past decade, those restrictions have shifted from one type of loan to another so Chinese citizens get creative with how they borrow money for business purposes or to purchase property.

Furthermore, the economic crisis took “shadow lending” to new heights. Shadow lending can include everything from organized crime to banks obfuscating the purpose of a loan or peer-to-peer lending. China cracked down on this lending practice too, but the debt amount is significant and official numbers do not typically include shadow lending.

New US Tariffs Spell Doomsday for China’s Economy (The Epoch Times), Rated: AAA

The additional 25 percent tariff imposed by the United States on $200 billion worth of Chinese goods will trigger a new round of factory closures in China, driving economic collapse.

In the context of the blow-up of the P2P (peer-to-peer lending) and other usury, the 8.4 trillion will cause most medium and small-sized banks to fall into bankruptcy crisis.

HSBC Rolls Out Digital Wallet To Hong Kong Businesses (PYMNTS), Rated: A

HSBC has reportedly expanded its PayMe digital wallet to startups and small businesses, marking its first foray into the business payments marketplace.

European Union

ING pushes for open banking with SME financing platform and Yolt expansion (Fintech Futures), Rated: A

ING is keen to maximise the possibilities of open banking and is working with Yolt and Funding Options on bringing new features to customers across Europe.

Firstly, ING is launching a marketplace for SME financing in the Netherlands, which will open to other external financing providers, becoming the first Dutch bank in doing so.

International

We are “very close” to peak fintech, with more than 10,000 startups jumping into the boom (Quartz), Rated: AAA

According to Curve’s Shachar Bialick, the founder and CEO, an app that lets customers to link all their credit and debit cards to just one card, says there are more than 10,000 fintech startups around the world, and even he can’t keep track of them all. Some, or even most, aren’t going to make it.

Quartz: It’s been about four months since Amex blocked Curve. What are your plans now?

Bialick: Amex was never a critical part of Curve. It was always an opportunity to solve a big problem Amex has in the UK and Europe, which is access.

Curve has continued to grow in Europe without Amex.

Have we reached the peak in terms of new fintech startups?

I don’t know if we reached the peak, but we definitely are very close, because today there are over 10,000 fintechs globally. I don’t know over 90% of them.

Peer To Peer Lending To Be The Next $ 1 Trillion Industry (ValueWalk), Rated: AAA

By eliminating the need for banks, peer to peer lending allows investors to invest in individual and company debt with 5-10% returns – a far cry from the the lowly 1.5% that you’ll received in a regular CD account.

And it works better for borrowers too. Borrowers are able to take out loans with greater ease and lower interest rates, typically offered in the region of 3-4%.

The average default rate at Lending Works is only 3.2% over the last six years. And many P2P lenders allow you to choose secured loans for additional protection.

Transparency Market Research estimates the industry be worth $900 billion by the end of 2024, with an annual growth rate of 48%, up from $26 billion in 2015.

Source: ValueWalk

One quarter of world’s small firms are ‘significant’ fintech users, says report (AltFi), Rated: AAA

Fintechs are becoming the ‘new normal’ in financial services, said a survey by professional services firm EY.

Fintech adoption is by far the highest in China, where 61 per cent of small businesses use their services, followed by the US, 23 per cent, the UK, 18 per cent, South Africa, 16 per cent, Mexico, 11 per cent, with the average set at 25 per cent.

Source: Ernst & Young

See the full report here.

Tencent, Temasek Invest $ 35 Million in U.K. Open-Banking Startup (Bloomberg), Rated: A

Chinese technology giant Tencent Holdings Ltd. and Singapore government-owned fund Temasek is to invest $35 million in London-based TrueLayer.

The Fintech Bubble Floats Toward a $ 64 Billion Pin (The Washington Post), Rated: A

Trendy U.S. online payments company Stripe, worth some $22.5 billion according to private-market valuations, is joining Amazon.com Inc. and Apple Inc. in warning about the impact of EU rules aimed at getting customers to double-check payments going out from their accounts.

Adyen trades at a gob-smacking 110 times this year’s earnings, with a market value of 20.8 billion euros. That’s almost twice the worth of Deutsche Bank AG, even though the Dutch fintech only employs the equivalent of 1% of the German lender’s staff. Stripe is the sixth most expensive private company in the world, according to researchers at CBInsights.

Australia

RBA Boss Warns Banks On Undermining The Economy (SB Dirty South Soccer), Rated: A

THE Reserve Bank of Australia (RBA) has cut the cash rate to a new record low.

The online lender announced a new headline variable rate for owner-occupiers at 3.34 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday July 6 2019, Weekly News Digest appeared first on Lending Times.

Thursday April 11 2019, Weekly News Digest

china p2p lending

News Comments Today’s main news: Lending Club loans $159M in the past week. OnDeck offers same-day funding. Kabbage secures $700M in funding. RateSetter ISA passes 200M GBP in subscriptions. Funding Circle CEO pocketed 4M GBP last year. Klarna launches global customer authentication platform. Today’s main analysis: Drivers of global growth in FSB’s shadow banking. (A […]

The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

china p2p lending

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

Need a loan for Tax Day? According to Lending Club data, you’re not aloan… er, alone (Thinknum), Rated: AAA

As seen in data from Lending Club ($NYSE:LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.

RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.

Lending Club Total Principal Loaned (Weekly)

ONDECK OFFERS SAME DAY FUNDING TO EMPOWER SMALL BUSINESS (OnDeck), Rated: AAA

OnDeck today announced that it will offer to fund and debit customer bank accounts with Same Day ACH transfers, eliminating a decades long pain point for small business owners accustomed to the traditional ACH transfer process, which can take multiple days and lacks certainty on when the transactions will hit bank accounts.

Same Day ACH transfers from OnDeck provide qualified OnDeck Term Loan and Line of Credit customers with funds up to the National Automated Clearing House Association (NACHA) cap of $25,000 by 5:00 pm local time on the same business day the customer books or makes a draw on their line of credit.* Qualified customers are also debited via the same day ACH service, providing them additional predictability in transaction clearing times and offering better clarity around day-to-day cash flow management.

Highlights from Jamie Dimon’s Annual Letter (PeerIQ), Rated: AAA

US payrolls rose by 196 k in March and the unemployment rate remained at 3.8%.

Source: Bloomberg, PeerIQ

Highlights from Jamie Dimon’s Letter to Shareholders

Jamie Dimon published his annual letter to shareholders. We look at some highlights below:

  • The banking system, and JPM in particular, is over-capitalized – Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks.
Source: JPM, PeerIQ

PM is investing billions in technology to compete – the cloud, AI, ML and digital banking

  • JPM customers can now open a bank account online in under 5 minutes and can reduce their mortgage closing times to 3 weeks.
  • The bank now has 49 Mn active digital customers, including 33 Mn active mobile customers
  • JPM is looking at fintechs in the US and in China as not just opportunities but also looming competition.

Online lender Kabbage rakes in 0m funding (Verdict), Rated: AAA

Kabbage, an online lender for small businesses, has fetched $700m in asset-backed securitisation (ABS) funding.

With the securitisation, the company’s debt funding increases to $940m.

Real-time data was Kabbage’s secret sauce, its first investor says (American Banker), Rated: A

The firm started life as a small, scrappy fintech startup in Atlanta in 2008, but has grown rapidly. It made $2 billion worth of loans in 2018 and more than $600 million in the first quarter of 2019. It also recently agreed to provide financing at the point of sale on Alibaba.com as part of a program called Pay Later.

Upstart Raises $ 50 Million and Announces New Bank Partners (Lend Academy), Rated: A

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

PeerStreet Lowers Minimum Real Estate Investment to $ 100 (Think Reality), Rated: A

The burgeoning peer-to-peer lending platform PeerStreet has unveiled product updates that enable investments of only $100.

The company recently announced it’s lowered the minimum investment to $100 for “small balance reinvestments” when using its automated investing product. The upgrade also expands the investment types available for automated investing to include cash offer loans and 30-day notes, which offer shorter terms than typical bridge loan investment options, the company said.

Sharestates Wins Top Real Estate Platform Award at LendIt Fintech USA 2019 (PR Newswire), Rated: A

Sharestates, a marketplace lending platform that connects real estate developers with investors, was crowned Top Real Estate Platform at LendIt Fintech USA2019 in San Francisco, California on April 9, 2019. The Top Real Estate Platform award is based on performance, volume, growth, product diversity, and responsiveness to stakeholders.

Now operating in 46 states, Sharestates offers diversified asset classes including residential, multi-family, mixed-use, commercial properties, and land acquisitions.

Since launching in 2015, Sharestates has closed on over $1.7 billion in total loan volume and returned over $675 million in principal to investors. Average annualized returns have exceeded 10% every year. As a result of its strong performance and valued relationships, 82% of Sharestates loan volume has come from repeat borrowers and 81% of its investors are repeat investors.

The stREITwise Platform Brings Real Estate Investment to All (Realty Biz News), Rated: B

The company has just announced a new acquisition to its investment portfolio, a $32 million mixed-use building in Carmel, Indiana, one of the most affluent suburbs of Indianapolis. The 140,000-square foot Allied Solutions Building, already around 87 percent leased, stands poised to increase dramatically in value thanks to its location in the heart of downtown Carmel in the heart of a busy mixed-use development surrounded by restaurants, coffee shops, fast-casual dining, service-oriented retail, and the locally renownedSun King distillery and food hall right next door.

13 cities where renting is cheaper than buying a home (AOL), Rated: A

Americans’ homeownership rate is 64.8%, according to the latest U.S. Census data.

Following are the 13 metros where renting is cheaper by more than $150 a month, beginning with cities with a smaller advantage for renters.

BlueVine Adds Term Loan to Suite of Online Working Capital Solutions to Fuel Small Business Growth (GlobeNewswire), Rated: A

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced that it is making term loan financing available for business owners through its suite of online financing solutions. The BlueVine Term Loan provides small- and medium-sized business owners with fast and simple access to financing to grow their businesses through BlueVine’s advanced online platform. More than 59 percent of businesses are looking for funds to grow their business, according to the 2017 Federal Reserve Small Business Credit Survey Report on Employer Firms. With a BlueVine Term Loan, business owners can quickly pursue larger projects and investments to bring their businesses to new heights.

Aura Approves 350,000th Affordable Loan (Bakersfield.com), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, this week approved its 350,000 th loan.

Since its launch in 2014, Aura has provided more than $437 million in credit-building loans to borrowers at approximately 1,200 partner locations using technology that enables local businesses to administer loan applications. Currently, Aura’s average loan size is around $1,600.

In total, Aura has raised over $403 million in social bonds across 21 bond issuances. The most recent issuance was in March for $50 million.

What Kind of Collateral Do I Need for a Business Loan? (Nav), Rated: A

Before you can qualify for a commercial loan, you’ll need to prove that doing business with your company is a good risk. This means you’ll need to pass successfully through a lender’s qualification process.

Next Wave of Personal Loan Growth May be Driven by Prime and Above Consumers (MarketWatch), Rated: A

The prime and above risk tiers have become a greater focus for lenders in recent years. Nearly two-thirds of unsecured personal loan balances originated in the first three quarters of 2018 were lent to prime and above consumers. FinTechs drove this shift as originations for prime and above grew to 62% in 2018, up from 52% in 2013. While still less conservative than banks, FinTechs’ overall risk profile for originations now aligns tightly with credit unions. At the end of 2018, FinTechs held the majority share of personal loan balances with 39%, while banks and credit unions followed with 28% and 21%, respectively.

Student Debt Isn’t Just An Employee Problem — It’s Also An Employer Problem (Killer Startups), Rated: A

The Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit for the fourth quarter of 2018 that outstanding student loan debt increased to $1.46 trillion, which is $15 billion more than the previous quarter. It also reported that student loan debt rose by $79 billion in 2018.

The student debt load isn’t just impacting the individual students who enter the workforce, hoping they can find a job that enables them to make those monthly payments. I’s also slowing economic growth. A January 2019 Federal Reserve paper noted that young adults report their student loan debt is the reason they’re unable to buy a home. The same report also cited other research concluding that 20 percent of the decline in homeownership among young adults relates to student loan debt that’s been rising since 2005.

Amount Announces Cloud-Based Account Verification Platform (Kake), Rated: A

Amount today announced AmountVerify, a cloud-based platform for risk management across financial products. AmountVerify marks the first time industry leading fintech provider Avant is making a component of its cutting edge online lending platform available to financial service companies as a standalone product through Amount.

Onfido raises $ 50M to create the Identity Verification Standard for Businesses Globally (Markets Insider), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M. The round was led by SBI Investment and Salesforce Ventures, with support from M12 (formerly Microsoft Ventures), FinVC and others, including existing investors.

Forward Financing Expands Capital Base with $ 90 Million Credit Facility (Yahoo! Finance), Rated: A

Forward Financing has closed on a $90 million credit facility, consisting of a $60 million senior revolving credit facility and a $30 million junior term loan. AloStar Capital Finance (“AloStar”), a division of Cadence Bank, N.A., served as the Agent on the senior facility.

Credibly Announces Investment Grade Senior Debt Offering (Yahoo! Finance), Rated: A

Today, Credibly announces the next phase in its balance sheet growth strategy with a $10 million Investment Grade-rated senior debt offering. The transaction closed on March 28, 2019.

Mitek Expands Auto-Capture User Experience Across All Digital Channels with the Addition of Desktop (GlobeNewswire), Rated: A

Mitek today announced it has upgraded its desktop browser experience to support auto-capture so customers can rapidly verify the identity of applicants across all digital channels: desktop browsers, mobile web and native applications.

According to Javelin Research, today only one third of users (34 percent) still complete the entire account opening process on their desktop.

MiSnap delivers a superior auto-capture experience for desktop and across mobile devices through:

  • Guided commands:  Real-time commands such as where to place a document in relation to the camera or detection of glare on the ID document are some of the conditions evaluated in order to help the user capture an optimal image, which improves image acceptance rates and reduces capture retries.
  • Advanced image analysis: Once MiSnap has achieved an optimal capture of the ID document, the software then further analyzes the image and makes the necessary adjustments in order to process all images consistently and accurately.
  • Modern architecture: Because MiSnap uses WebAssembly, it can perform at native speeds and is easy to integrate into customers’ web-based apps and requires minimal footprint.

58% of lenders will use AI in next two years (AI Foundry Email), Rated: A

Fannie Mae recently put out a 

  • Nearly two-thirds of lenders are familiar with AI
  • But, only 27% are using it in their businesses now, and…
  • Only half of that group are currently using it with customers (the rest are doing trials)
  • However, looking ahead two years – 58% of lenders expect to use AI/ML in their mortgage business.
  • Of the rest:
      • 22% predict they’ll be investigating AI
      • 19% foresee being in a “wait and see” mode

    These data points show us that “prime time” is coming soon for AI/ML in mortgages. 

    Fintech alone won’t be enough to boost credit union mortgage volumes (Credit Union Journal), Rated: A

    How can credit unions, especially small institutions, compete with Quicken Loans’ Rocket Mortgage “Push button, get mortgage” campaign?

    They can’t – and, sources said, they shouldn’t try.

    GROUNDFLOOR Wins 2 FinTech Awards (Groundfloor Email), Rated: B

    GROUNDFLOOR was named Best Crowdfunding Platform by the 

    Pulte Mortgage and Finicity Partner to Combat the Home Loan Paper Chase (MarketWatch), Rated: B

    Pulte Mortgage announced today it is partnering with Finicity — a leading provider of real-time financial data access and insights, to provide its borrowers with a faster, simpler and more secure way to navigate the home financing process.

    Hudson Data and LendingPoint partner to prevent Synthetic ID fraud (Finanzen), Rated: B

    Hudson Data and LendingPoint announced that they are partnering to create an industry solution to prevent synthetic identity fraud using powerful graph machine learning.

    Dharma crypto lending platform officially goes live (CoinGeek), Rated: B

    Dharma Labs completed a Series A funding round earlier this year to support its cryptocurrency lending platform project. The San Francisco-based company raised $7 million from companies such as Polychain Capital, Coinbase Ventures and others and, if there was any concern about the platform not going live, those concerns are now extinguished. Dharma announced this past Monday in a Medium post that the platform is now live.

    United Kingdom

    RateSetter ISA Milestone: Passes £200 Million in Subscriptions (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender RateSetter recently announced its ISA has now passed the milestone of attracting £200 million in subscriptions.

    “Investors have enjoyed an average annualised return of 4.5%, tax-free of course, since the RateSetter ISA launched in February 2018. The average RateSetter ISA balance stands at £11,000.”

    Funding Circle boss pocketed more than £4m last year (P2P Finance News), Rated: AAA

    FUNDING Circle founder Samir Desai (pictured) earned more than £4m last year, having cashed in some of his shares at the time of the peer-to-peer lender’s stock market flotation.

    Desai took home a salary of £210,000 last year, according to Funding Circle’s annual report, a four per cent increase from his salary of £202,000 in 2017.

    The majority of his total remuneration of £4.081m came from cashing in share options.

    Zopa rewrites outdated money idioms (The London Economic), Rated: AAA

    Each future-looking idiom challenges the status quo. For example, according to Zopa, the ‘signing for the bill’ gesture will be redundant soon. Instead, when people have finished their meal, people will be more likely to signal facial or iris recognition to the waiter. Jonesy gives his take and takes it one step further by illustrating a customer displaying his eyeball to request the bill.

    Source: The London Economic

    Fintech unicorns are leading job creation in London (Business Insider), Rated: AAA

    In 2018, there was a 61% increase in fintech job creation within London from the previous year, per a new report by Robert Walters, making it the fastest growing sector for vacancies in the city.

    The UK houses 25% of all fintech unicorns and their growth plans call for more talent. There are 29 fintech unicorns worldwide, seven of which are based in the UK, making the UK second only to San Francisco, which is home to nine.

    Over 30% of jobs in the UK’s fintech industry are for IT-related roles, compared with 24% in 2017. And fintech unicorns’ hiring for IT professionals increased 74% year-over-year (YoY).

    Source: Business Insider

    London to take San Francisco’s fintech unicorn crown (The Innovation Enterprise), Rated: A

    However, the report has predicted that London could take the lead as early as this year, as the city receives 39% of European fintech venture capital funding, with the runner-up, Berlin, taking just 21% of the total investment.

    With 50% against a global average of 33%, the UK also enjoys the highest rate of consumer fintech adoption of any Western country, only beaten by India and China, the report found.

    LendInvest gains £200m HSBC funding as it seeks home loan market entry (Verdict), Rated: A

    LendInvest, which operates an online marketplace for mortgages, has received an investment of £200m ($261m) from HSBC UK to support its foray into the regulated home loan sector.

    Peer-to-peer scheme for first-time buyers launches (FT Advisor), Rated: A

    Start-up company Stepladder is promoting a new way for first-time buyers to save for a house deposit.

    Arbuthnot Latham launches Arbuthnot Direct for those seeking long-term interest returns (Arbuthnot Email), Rated: B

    Arbuthnot Latham & Co., Limited (“Arbuthnot Latham”) is pleased to announce the launch of its new platform under the trading name of Arbuthnot Direct. Arbuthnot Direct offers fixed term deposits online, targeting retail customers who are seeking interest returns on their money over the longer term. The platform held a successful soft launch in February 2019 and has already met with a positive reception.

    China

    The rise and fall of P2P lending in China (Finextra), Rated: AAA

    It is worth mentioning that the size of China’s P2P industry is larger than that of the rest of the world combined, with outstanding loans of US$217.96BN.

    China’s online P2P lending industry grew rapidly between 2011 to 2015, with the number of P2P lenders growing from 50 to nearly 3,500 respectively.

    Trouble started brewing in China back in 2016, when statistics released by the Chinese Banking Regulatory Commission showed that about 40% of P2P lending platforms were in fact Ponzi schemes.

    This triggered the shutdown of P2P lending platforms; over 900 closed by the end of 2016. For 2018, only 1,021 providers remained in place.

    Source: Bloomberg News

    Shenzhen police arrest Zhang Wei, calling China Create Capital a ‘mafia-like gang’ (SCMP), Rated: A

    China Create Capital Limited, the investment holding company headed by the 46-year-old Heilongjiang native is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms, the Shenzhen police said in a notice. The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

    The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country’s financial system and capital markets, where 1,129 “mafia-like” syndicates were broken up across 10 provinces last year, with 4.94 billion yuan (US$737 million) of assets seized, according to the police. A number of Chinese oligarchs including Anbang Group’s

    former chairman Wu Xiaohui

    , CEFC Group’s founder Ye Jianming and financier Xiao Jianhua had fallen from grace since 2017.

    $ 60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market (CoinDesk), Rated: A

    These new crypto lenders include such notable names as Bixin Capital, FBG Capital and DGroup, founded by Dong Zhao, who made a name by operating one of the longest-running over-the-counter (OTC) trading desks in China. Along with a startup called Babelbank, these investors have originated a combined $60 million worth of loans over the last five months, denominated in cryptocurrencies or, in one firm’s case, Chinese yuan.

    European Union

    Klarna launches global customer authentication platform (Klarna), Rated: AAA

    Klarna today announced the launch of its global authentication platform — an aggregator with multiple global and local authentication solutions. The platform allows multinational businesses, including merchants and other banks, to provide a simple, secure and personalised customer authentication experience irrespective of market, through a one-time integration.

    Klarna Sees Payments as Evolving From Function to Engagement (WWD), Rated: A

    Klarna’s Hannah Bravo says customers chose brands based on payment options.

    This New Tool Is Helping Retailers Build Consumer Trust During Online Checkouts (Footwear News), Rated: B

    The Klarna platform enables businesses to choose from a range of global and local authentication methods so that they can find one that works best for their customer. Whether using SMS verification or emailed one-time passwords, brands and retailers can verify their customers’ identities with minimal interruption to the consumer’s shopping journey.

    International

    Drivers of Global Growth in FSB’s Shadow Banking (DBRS Email), Rated: AAA

    DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010, according to the FSB. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster.

    Summary highlights of the commentary include:

    • Shadow banking is still growing. This narrow, but rapidly growing, subset of nonbanks had assets of $52 trillion in 2017, up 75% from $30 trillion in 2010.
    • Since 2010, assets of nonbanks are also growing, up 61% to $185 trillion. That is 49% of the $378 trillion in total global assets in all financial institutions at the end of 2017, up significantly from 44% in 2010.
    • The key driver of this growth in nonbank assets is the expansion of OFIs. These OFIs are defined as all financial institutions that are NOT central banks, banks, insurance companies, pension funds, public financial institutions, or financial auxiliaries. Assets at these OFIs grew 71% since 2010 to a record $117 trillion in 2017, or just over 30% of assets in financial institutions globally.
    • By far, the largest segment of shadow banking globally is collective investment vehicles, which are subject to runs. These include fixed income funds, mixed funds, MMFs and hedge funds. Since 2010, this segment has grown by 130% to $36.7 trillion in assets. By contrast, growth in other segments has been less than $1 trillion, or even negative.

    Read the full report here.

    Crypto Lending Platform Salt Adds Support for Dash as Collateral (Crypto-Economy), Rated: A

    Cryptocurrency lending platform Salt will now be allowing its users to collateralize their Dash holdings including their Masternode staking coins to access loan facilities.

    India

    RentoMojo in talks to raise $ 40 million from GMO, others (livemint), Rated: A

    For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.

    Asia

    Housing sector remains major source of complaints: BPKN (The Jakarta Post), Rated: A

    The BPKN received 154 complaints in the first quarter, most originating from the housing sector. BPKN communications and education coordinator Arief Safari said the agency had received 129 complaints on the housing sector in the first quarter, followed by six complaints on online peer-to-peer (P2P) lending, three on banking and the remainder on various sectors, including travel and e-commerce.

    Batumbu to help finance SMEs (The Jakarta Post), Rated: A

    PT Berdayakan Usaha Indonesia has announced that it aims to help small and medium enterprises (SME) access financial capital through a partnership program with its digital platform Batumbu.

    MENA

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

    Thursday October 18 2018, Daily News Digest

    Major US Banks Active Mobile Banking Users

    News Comments Today’s main news: Upgrade to debut ABS bond. KBRA assigns preliminary ratings to Upgrade Receivables Trust 2018-1. Funding Circle launches free iPad incentive. China’s P2P lending is in trouble. Today’s main analysis: State laws put installment loan borrowers at risk. (A MUST-READ) Today’s thought-provoking articles: SoFi’s data science head on machine learning and non-traditional lending. LendingClub’s Bill Walsh says […]

    Major US Banks Active Mobile Banking Users

    News Comments

    United States

    United Kingdom

    International

    Other

    News Summary

    United States

    Online lender Upgrade prepares debut ABS bond  (International Financing Review) Rated: AAA

    Upgrade, an online lending company started by former LendingClub founder Renaud Laplanche, is looking to sell a debut asset-backed bond deal, four people with knowledge of the deal told IFR on Wednesday.

    KBRA Assigns Preliminary Ratings to Upgrade Receivables Trust 2018-1 (Business Wire) Rated: AAA

    Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Upgrade Receivables Trust 2018-1 (“UPGR 2018-1”). This is a $286.390 million consumer loan ABS transaction that is expected to close October 30, 2018.

    This transaction represents the first ABS securitization collateralized by unsecured consumer loans originated through the online marketplace lending platform operated by Upgrade, Inc. (“Upgrade”) and the first from the Upgrade Receivables Trust (“UPGR”) shelf. Upgrade Receivables Trust 2018-1 (“UPGR 2018-1” or the “Issuer”) will issue four classes of notes totaling $286.390 million. The proceeds from the sale of the notes will be used to purchase the loans and related rights from Upgrade Receivables Depositor LLC (the “Depositor”), who purchased the loans from the unaffiliated transferors, to fund the reserve account and to pay transaction expenses. The Depositor will in turn sell the loans to the Issuer.

    Preliminary Ratings Assigned: Upgrade Receivables Trust 2018-1

    Class Preliminary Rating Expected Initial Class Principal
    A A (sf) $187,308,000
    B BBB (sf) $32,569,000
    C BB (sf) $28,440,000
    D B (sf) $38,073,000

    SoFi’s data science head: Opening the funnel to non-traditional borrowers with machine learning (Thomson Reuters) Rated: AAA

    ANSWERS: What are some of the issues in machine learning that you are working to solve for right now?

    WU: I think where machine learning plays the biggest role is in datasets that have extremely high numbers of dimensions, very low signal ratios and very sparsely populated values. For example, people in lending use data from the bureau. There are millions and millions of rows, there are thousands and thousands of columns. Each specific field has very little to no signal and each person has very few things that are actually populated. Those are opportunities where machine learning, particularly deep learning, has an extremely high potential.

    ANSWERS: How can machine learning assist with lending decisions, and how does one keep bias from creeping into that?

    WU: When making a decision on creditworthiness, machine learning can help lenders look at metrics beyond FICO and income. Whether it’s adding more information to traditional metrics versus determining creditworthiness of applicants without a full credit history, machine learning can drive tighter risk management while assessing borrower’s creditworthiness where traditional models cannot.

    LendingClub’s Bill Walsh: ‘At its core, marketing is a data problem’ (Tearsheet) Rated: AAA

    Today’s marketer on the hot seat is Bill Walsh, LendingClub’s general manager and head of marketing for personal loans. Bill brings an engineer’s approach to marketing. The MIT grad began his tenure at Lending Club in an operations role, where rigorous problem solving was used to solve some of the biggest problems in the business. Now that he’s leading marketing on the consumer side, he brings a similar approach.

    We talk about how LendingClub defines marketing and approaches channels. We pay particular attention to a recent TV campaign you might have seen over the summer of 2018. Measuring and responding to the signal is core to LendingClub’s approach and in the course of this four week broadcast campaign, Bill’s team iterated twice. This puts ad agencies on notice — this is the new data-driven fintech marketing world.

    Mobile banking is reaching a saturation point in the US (Business Insider) Rated: AAA

    JPMorgan Chase counted32.5 million active mobile banking customers in Q3 2018 — an 11% year-over-year (YoY) increase from 29.3 million in Q3 2017.

    That’s up from the 31.7 million active mobile customers in Q2 2018, but is also a slight deceleration from the 12% YoY growth in Q3 2017— following several quarters of decelerating growth: Chase has been adding around 800,000 mobile users on a quarterly basis.

    Wells Fargo counts 29 million total active digital customers — 22.5 million of which use mobile banking. This marks an 8% annual increase in mobile banking customers, but a 4% YoY increase in total digital customers, demonstrating that most of its new customers are coming from mobile channels.

    Source: Business Insider

    State Laws Put Installment Loan Borrowers at Risk (PEW) Rated: AAA

    Pew’s analysis found that although these lenders’ prices are lower than those charged by payday lenders and the monthly payments are usually affordable, major weaknesses in state laws lead to practices that obscure the true cost of borrowing and put customers at financial risk. Among the key findings:

    • Monthly payments are usually affordable, with approximately 85 percent of loans having installments that consume 5 percent or less of borrowers’ monthly income.Previous research shows that monthly payments of this size that are amortized—that is, the amount owed is reduced—fit into typical borrowers’ budgets and create a pathway out of debt.
    • Prices are far lower than those for payday and auto title loans. For example, borrowing $500 for several months from a consumer finance company typically is three to four times less expensive than using credit from payday, auto title, or similar lenders.
    • Installment lending can enable both lenders and borrowers to benefit. If borrowers repay as scheduled, they can get out of debt within a manageable period and at a reasonable cost, and lenders can earn a profit. This differs dramatically from the payday and auto title loan markets, in which lender profitability hinges on unaffordable payments that drive frequent reborrowing. However, to realize this potential, states would need to address substantial weaknesses in laws that lead to problems in installment loan markets.
    • State laws allow two harmful practices in the installment lending market: the sale of ancillary products, particularly credit insurance but also some club memberships (see Key Terms below), and the charging of origination or acquisition fees. Some costs, such as nonrefundable origination fees, are paid every time consumers refinance loans, raising the cost of credit for customers who repay early or refinance.
      Source: PEW

    Read the full report here.

    Bank Of America’s Zelle Boosts P2P Transactions 138 Pct In Q3 (PYMNTS) Rated: A

    Bank of America cut expenses and reduced its provision for credit losses as the financial institution also beat analysts’ revenue and earnings expectations. Bank of America, in reporting its latest financials on Monday, also said that Zelle P2P payment transactions increased 138 percent year over year.

    Revenue increased about 4 percent year over year, hitting $22.8 billion, higher than analyst expectations of $22.67 billion. The financial institution reported earnings per share of 66 cents, which represents a 43 percent year-over-year increase and is above analyst expectationsof 62 cents. Net income grew 32 percent to $7.2 billion.

    Bank of America said its provision for credit losses decreased $118 million during the third quarter of 2018, to $716 million. “The net reserve release was $216 million, driven by continued improvement in consumer real estate and energy portfolios,” the bank said in its Q3 financial report.

    As digital banks proliferate, so do risks (American Banker) Rated: A

    Facing intense deposit competition from online-only banks such as Ally Financial and Goldman Sachs’ Marcus, many traditional banks are looking to turbocharge their deposit gathering by launching — or considering launching — digital banks of their own.

    PNC Financial Services Group is the latest big bank to join the fray, recently rolling out a digital-only bank in markets where it lacks a brick-and-mortar presence. Like JPMorgan Chase, Citizens Financial Group and a number of other regional and community banks, PNC is counting on its digital bank to attract low-cost deposits to fuel loan growth while also helping it reach new demographic groups.

    Early results have been promising — PNC CEO William Demchak said Friday that he’s been “pleasantly surprised” by the response in the Kansas City, Mo., market — but with the space becoming so crowded, industry watchers are beginning to question if the U.S. marketplace can reasonably support so many new digital banks.

    Source: American Banker

    Outside Financial Launches to Help Consumers Save up to $ 3,000 on Auto Loan Packages (PR Newswire) Rated: A

    Outside Financial, an independent auto loan marketplace, launched its consumer-first platform today to bring transparency to auto finance. The company is the first to offer full auto loan packages outside of the dealership, which can save customers $1,000 to $3,000, along with time and hassle. Outside Financial also arranges refinances for existing borrowers.

    In 2017, Americans racked up $568.6 billion in auto loans1, yet 60 percent of buyers don’t know they can bring their own financing to the dealership. The company’s new Outside Financial (OF) Markup Index* reveals that, on average, new car buyers are charged $1,717 in hidden markups when arranging their loans through a dealer.

    Individual Investors Can Now One-Click Invest in Commercial Real Estate with CrowdStreet’s “Blended Portfolio” Offering (Benzinga) Rated: A

    CrowdStreet, which operates the largest and most diversified online marketplace for direct equity investment in U.S. commercial real estate, is now raising $25 million for the company’s first CrowdStreet Blended Portfolio investment offering. To provide individual investors and registered investment advisors another way to diversify their investments with commercial real estate, the company plans a series of diversified and specialty portfolio investment options that will collectively raise and invest up to $170 million.

    The first CrowdStreet Blended Portfolio’s proceeds will be deployed across 30-50 pre-vetted projects on the CrowdStreet marketplace, representing a broad range of commercial and multifamily asset types, risk profiles and geographies.

    Credible.com Unveils First Truly Consumer-Centric Mortgage Marketplace (Business Wire) Rated: A

    Credible.com, the leading online loan marketplace, announces the launch of its first-of-its-kind mortgage marketplace. Credible.com is the only mortgage marketplace that provides actual rates from top lenders in 3 minutes (without affecting a borrower’s credit score), and a streamlined digital origination process. The platform is designed to save borrowers frustration, time and money.

    The Credible.com mortgage marketplace builds on the success of the company’s marketplaces for student loans, student loan refinancing, and personal loans, which have facilitated more than $1.6 billion in loans to date. The first product offered through the mortgage marketplace is mortgage refinancing, which went live today in 20 states that collectively represent 65 percent of mortgage originations.

    Talking Regulation at the Online Lending Policy Summit (Lend Academy) Rated: A

    The big topic of the day was the OCC’s Special Purpose National Bank Charter also known as the Fintech Charter. The topic was laid out for the audience by the first keynote speaker, Grovetta Gardineer, the Senior Deputy Comptroller for Compliance and Community Affairs at the OCC. She talked about the history of the OCC going back to 1863, with the National Banking Act, when the dollar supplanted state currencies as the sole currency of the United States, a revolutionary idea back then. Ms. Gardineer reaffirmed the authority of the OCC to introduce a national fintech charter and talked about how companies should proceed if they are interested. While she would not comment on specifics she did say that the OCC is currently having preliminary conversations with fintech companies but no formal application has been received yet.

    The new head of the CFPB’s Office of Innovation, Paul Watkins, talked about the importance of the regulatory sandbox concept. He was one of the architects of the Arizona fintech sandbox and he is bringing that knowledge with him to Washington. He talked about the two main tools to help facilitate innovation at the CFPB: their trial disclosure program and the no action letter.

    How Dealstruck Arrived, “Disrupted,” and Died – A Cautionary Online Lending Tale (deBanked) Rated: A

    A self-described member of the “lucky sperm club,” a not-even 30-years-old Senturia went on to successfully raise $30 million of investor capital to fund his business, enough to fuel his rise and price-shame his competitors for years. But it wouldn’t last, as he detailed in book, Unwound, about the behind-the-scenes chaos that ravaged Dealstruck until the company closed for good in late 2016.

    AFR Wholesale announces partnership with Floify (Housingwire) Rated: B

    AFR Wholesale and Floify shook hands on a partnership, and AFR will now use Floify’s point-of-sale technology.

    AFR’s goal in partnering with Floify, a 2018 HW Tech100 winner, is to reduce origination time and increase broker productivity. According to the release, Floify’s POS platform can save up to 15 hours of processing time per loan.

    This is only one of an ever-increasing number of companies partnering with software companies or developing their own tech solutions in hopes of increasing productivity and getting some breathing room in the margin department in this tough mortgage market.

    iintoo Launches Principal-Protection Product for Retail Investors Supported by Insurance Provided by Everest (iintoo Email) Rated: B

    Online Real Estate Investment Management Company iintoo Investments Ltd. (“iintoo”) launched Epiic (Equity Protection Investment Community), the first-of-its-kind real estate investment product that provides principal protection for private accredited investors. Supported by insurance provided by an affiliate of Everest Re Group, Ltd. (NYSE:RE), a leading international reinsurance and insurance organization with operations that span the globe, and a social community pool, Epiic offers two layers of protection for investors’ principal.

    iintoo opens up access to real estate investments that were once exclusive to professional funders and high-net-worth individuals. Starting at $25,000, accredited investors can invest in ownership shares in projected high yield, premium real estate projects.  Each project undergoes a rigorous due-diligence and approval process provided by iintoo.  In order to assess the risk factors in real estate investing, iintoo also conducted a thorough analysis of the real estate market in the United States, taking into consideration all sectors in all 50 states over the past 30 years.

    TRANSACT Tech San Francisco to Examine the Impact of Software Providers on the Payments Industry (PR Newswire) Rated: B

    The Electronic Transactions Association (ETA) will bring together executives from leading banking, payments and FinTech companies on November 1, 2018 for TRANSACT Tech San Francisco at the Wells Fargo Connections Center. The event will explore how software services are changing the way key ecosystems players – processors, banks and hardware manufactures – serve merchants and channel partners.

    The day-long conference will kick-off with a fireside chat with Secil Watson, Executive Vice President and Head of Digital Solutions for Business at Wells Fargo. “Customer expectations are changing rapidly, and pace of change in technology is accelerating.” said Watson. “Yet we still have cash and checks. What can we learn from today’s customer experiences to build a better payments ecosystem for tomorrow?

    Finicity Partners with Freddie Mac to Provide Industry-Leading Automated Income and Asset Assessment Solution (Finicity Corp) Rated: B

    Finicity, a leading provider of real-time financial data aggregation and insights, announced today it has been selected as a third-party service provider for the new Freddie MacLoan AdvisorSM automated income and asset assessment capabilities, which provide a faster, easier way for lenders to verify loan application data upfront. Finicity’s digital verification reports greatly improve efficiency and accuracy, while also providing a simpler, more pleasant borrower experience.

    Freddie Mac announced its new income and asset assessment capabilities at the Mortgage Bankers Association Annual Convention & Expo earlier today. Finicity’s verification reports are integrated within Freddie Mac Loan Product Advisor®, the cornerstone of Loan Advisor Suite.  When the capability goes live later this quarter, asset verification will be generally available and income verification will be available as a limited release.

    United Kingdom

    Funding Circle launches ‘free iPad’ incentive (Peer2Peer Finance) Rated: AAA

    LISTED peer-to-peer platform Funding Circle is enticing new investors by offering a free iPads. But there’s a catch – they have to add at least £30,000 to their Funding Circle accounts before 16 November.

    The P2P platform is also offering a number of other cashback and ‘giftback’ incentives to lenders who invest lower amounts of money.

    Investors who add £20,000 to their Funding Circle accounts will receive £200 in John Lewis vouchers, while those adding £15,000 will get an Amazon Echo.

    LendInvest Update: Accelerates BTL Production Application Volume Thanks to Rate Reductions (Crowdfund Insider) Rated: A

    UK-based online lender LendInvest announced last week it has reduced rates and product fees across its Buy-to-Let product range. According to LendInvest, the pay rate for its five year fixed rate product has dropped to 3.60%, with the ICR calculation at a pay rate of 3.60%. Meanwhile, product fees for all BTL mortgages on standard property and HMO cases have been reduced to 1%, with borrowers who prioritize leverage in mind.

    The lending platform also reported that for a limited time, valuation fees have been reduced to £100 for all standard property cases. LendInvest will now cover the borrower’s legal fee scale costs for standard property, standard conveyance cases, where dual representation is selected.

    You think it’s going to be easy challenging the big banks? Think again (The Times) Rated: A

    here has never been a more opportune moment for the pack of digital upstarts looking to topple the institutions that dominate the financial industry. Rarely does a week go by when a big bank does not suffer an IT meltdown, spewing sensitive data into the ether or freezing customers out of their accounts.

    A decade after the collapse of Lehman Brothers, public distaste for the high street banks remains at elevated levels. Two thirds of Britons do not trust big banks to act in the best interests of society, according to a recent YouGov poll. The advent of smartphones, meanwhile, has fundamentally altered consumers’ expectations of their relationship with service providers.

    Amex brings SME financing to UK with ezbob (Banking Tech) Rated: A

    American Express (Amex) has partnered with online financing platform ezbob to offer UK SMEs competitive access to finance.

    Through this partnership, eligible Amex business clients will receive a referral to apply for up to £300,000 in finance from ezbob at a fixed annual interest rate from 3%.

    Carlos Carriedo, senior vice-president of global commercial services at Amex, says: “We know agility is crucial for smaller businesses to help retain a competitive advantage but accessing the finance needed to react swiftly to changing customer demands, or seize an opportunity, can be a challenge.”

    Amex customers taking out a loan with ezbob will also benefit from a 40,000 Membership Reward points offer, the company adds.

    Connect for Intermediaries announces new panel (Mortage Strategy) Rated: A

    Connect for Intermediaries has announced the launch of a new unsecured lending panel.

    Comprising Funding Circle, iwoca, Whitoak and Fleximise, the panel will be open to all of Connect’s AR members, and Connect will be able to obtain terms on behalf of other brokers as referrals.

    Loans from £5,000 to £250,000 for up to five years will be available from 1.5 per cent.

    Connect sales director Kevin Thomson says: “We have seen an increased demand for unsecured loans for trading businesses, as increasingly, brokers are coming to us with business clients who are looking to ease cashflow or expand their businesses.

    P2P Lending Investment Returns Outstrip Many Market Competitors (CL News) Rated: A

    P2P lending arrived in the UK back in 2010 with the launch of Funding Circle. The idea was simple. In the wake of the financial crisis, banks were – and still are – paying abysmally low rates of interest to savers. P2P platforms allowed savers to collectively lend money to businesses and individuals, usually over relatively short periods of time. By cutting out the middleman (or to be more precise, banks and other traditional lenders), P2P lenders were able to offer competitive rates to borrowers and superior returns to investors.

    The market has evolved over the years. AltFi – which provides specialist news for the alternative investment industry along with a range of analytics services – says the market is growing rapidly. For instance, in 2015, P2P lending platforms brokered around £1.1bn in loans. In the first half of 2018 alone, the figure was £3bn. Separate figures from the Peer to Peer Finance Association reveal that its members have, to date, originated loans to a value of £9bn.

    11:FS Foundry’s launch brings digital to banks (Banking Tech) Rated: A

    Consultancy firm 11:FS has launched 11:FS Foundry, an approach to delivering digital banking services through a modular core banking architecture. It kicks off with the partnership with DNB, Norway’s financial services group, which has also become an investment partner.

    DNB has invested £3 million for a 5% stake in 11:FS Foundry. This investment represents the long-term commitment between 11:FS and DNB to change how banks deliver digital banking services, the two companies say.

    Watchdog warns payday lenders over customer complaints (Financial Times) Rated: A

    The UK’s Financial Conduct Authority encouraged payday lenders to proactively compensate past customers; the industry has come under a lot of heat in recent months after a surge of complaints; companies say a lot of these complaints are bogus and a pushed by professional claims management companies (CMCs)

    Wonga was forced to shut down a few months ago after they saw a significant rise in complaints, complaints now cost companies more than $725 per complaint after the first 25 complaints; the rise in complaints has come after new rules were put in place in 2015 where high cost lenders we ordered to drop fees and adhere to stricter standards; a new survey by Kantar TNS showed that 60 percent of payday loan customers still pay more than anticipated.

    Fintech offers fresh ways to finance an MBA (Financial Times) Rated: A

    According to David Simpson, admissions director at London Business School, MBA students spend just as much time trying to find funding as they do trying to find the right program; while struggling to find his own financing Prodigy Finance CEO Cameron Stevens though there had to be a better way so he started Prodigy with two former classmates.

    The company is now growing fast by offering a service few others do, while also collecting credit records from across the globe; “You have talented people who have proved their potential in receiving offers to business school,” says Mr Stevens to the FT. “The only barrier for them is funding, because the banks are still incredibly localised, as they were in the 1500s.”

    Arbuthnot Banking Group PLC Third Quarter Trading Update (Arbuthnot Group) Rated: A

    Customer Lending balances are 28% higher than at the same time in the prior year and originations of new loans are 18% higher. However, as previously stated, the Group remains committed to maintaining its discipline in both credit underwriting decisions and return on capital when extending credit.

    The newly launched Asset Based Lending division continues to develop ahead of the original business plan and has a strong pipeline of new opportunities. The Specialist Finance division has now completed the hiring of its core team of six employees and is currently setting up its operations based in Manchester. It is expected that it will write its first deals toward the end of the fourth quarter or early 2019.

    OakNorth appoints form PRA director to board (Finextra) Rated: B

    OakNorth – the bank for entrepreneurs, by entrepreneurs – today announces the appointment of Martin Stewart, the former Director of Banks, Building Societies & Credit Unions at the Bank of England, as an Independent Adviser on its advisory board.

    Stewart joined the Bank of England in April 2013 and spent five and a half years there. In addition to supervising UK banks, building societies, credit unions and new entrants into UK banking, he was a Member of the PRA’s Executive Team responsible for PRA regulatory policy. His regulatory experience also includes spending three years at the FSA between 2010-2013, where he was a member of the leadership team that defined and implemented the UK’s post financial crisis prudential regulatory regime that now underpins the work of the Prudential Regulation Authority. In addition to this, he has almost two decades’ board-level experience having been Managing Director of a group of European subsidiary companies of the IFG Group PLC for almost four years, and as Chairman of the International Credit Union Regulators’ Network for the last six years.
    China

    China’s P2P Lending Sector Is in Serious Trouble (Money Makers) Rated: AAA

    P2P lending has been lucrative in China with little constraining regulation. The industry is worth as much as $120 billion and has been high-risk, but high return.

    Chinese regulators have been clamping down on debt and financial risk, the number of loan defaults is rising, capital investments are running out of the sector, and Chinese citizens are losing money. And getting pretty angry about it.

    In July 2018, 114 P2P lending platforms in China were shut down or had funds suspended, without warning, by China’s regulators over liquidity concerns. Since June 2018, 243 online P2P lending platforms have gone bust.

    Several Chinese Peer-to-Peer Lending Companies Have Submitted Self-Inspection Reports (Capital Watch) Rated: A

    With hundreds of peer-to-peer (P2P) lending platforms having collapsed at the beginning of this year, different district-level financial bureaus recently rolled out a tougher reform on all P2P platforms’ risk compliance to ease a growing panic among investors.

    This industry reform involves three major steps. First, all platforms have to complete a P2P Compliance Self-Inspection Report and submit it to the bureau by the end of October. Then, companies will be inspected by its local Internet Finance Industry Association, a non-state association. This will be followed by verification of inspection results by district-level Municipal Bureau of Financial Work with field inspection and a possible final check by higher-level government organizations.

    New York-listed Hexindai Inc. (Nasdaq: HX) and PPDAI Group Inc. (NYSE: PPDF) both announced that they have completed and submitted the report.

    European Union

    A risky investment (Euro Weekly News) Rated: AAA

    MANY UK nationals living part of the year in Spain, or visiting often, might spend months here but still retain tax residency in their home country.

    This means those looking for investment opportunities can still take advantage of UK tax efficient products such as Finance ISAs – ones which use peer-to-peer lending to offer high rates of return. They may be nothing new but one legal justice firm has upped the ante offering returns of up to 8 per cent a year.

    International

    Advantages of P2B platforms in lending to SMEs (Lendit Conference Blog) Rated: AAA

    In the EU and Australia, SMEs comprise 99.8% of all the firms and employ about 67% of the workforce. To tell the truth, SMEs might be rightfully called the economy, not just the backbone of it. A few other facts that follow are paradoxical. 2 years ago, International Finance Corporation (under World Bank) presented statistics that the gap for underfinanced SMEs around the world stood at 2.6 trillion $. One might expect, the situation got better in recent years with the global economy picking up and showing better and better numbers. On the contrary, most recent statistics from the same institution shows that the gap has widened to 5.2 trillion $.

    P2P platforms make lending process global

    P2B platforms can connect a business on one side of the world with an investor from another side of the world, and with a third party providing a service from yet another part of the world. All applications for loans can be made online, processed, assessed and the decision made within a matter of a few hours. Compare it to a similar process with the banks and the difference, that of speed and efficiency becomes clear. As an asset (loan) is put on the platform, investors can start investing within a matter of seconds. In such a way, a local business, somewhere in Eastern Europe can get funds from someone (or institutional investors) in UK or Germany and be able to use the collected amount for business operations within a couple of days.

    4 developments that will shape the future of fintech (Business Matters) Rated: A

    Within the past decade, we’ve seen the landscape of fintech move from a few disruptive start-ups to an industry that’s changing the landscape of business altogether. Consumers are becoming more and more accepting of technology as part of their day-to-day finance, a factor that has stretched the services sector and levelled the playing field with traditional institutions.

    For instance, there has been a monumental shift in the way that consumers are managing their money. PwC’s Global Fintech Survey 2017 found that 84% of incumbent financial services providers believed their customers were already making payments with fintech companies, 68% thought customers were conducting fund transfers, and 60% said their clients were using fintech for their personal finances.

    Quona Capital leads $ 5 million round for Brazilian small business lender BizCapital (Impact Alpha) Rated: A

    Brazilian fintech firm BizCapital launched operations in January to help Brazil’s small business owners secure capital necessary for the day-to-day and growth needs of their businesses. Quona Capital, a financial tech investment firm that spun out of Accion, has led the company’s R$20 million ($5 million) investment round. Two existing investors, Monashees and Chromo Invest, both based in Brazil, also participated.

    Roughly 70% of Brazil’s micro and small business owners are shut out of mainstream bank lending and instead resort to taking personal loans, which can carry interest rates as high as 200%. BizCapital offers short-term loans for up to R$150,000 ($40,000) at annual rates in the mid-double digits. The company hasn’t disclosed the size of its loan book but says it’s received more than 100,000 credit requests and serves customers in all 26 Brazilian states.

    Australia

    Global corporate lending platform, Trade Ledger has warned the Federal Government of substantial weaknesses in its proposed Open Banking implementation plan, when compared to the global best-practice model.

    These primarily include the lack of an independent implementation and governance organisation, and limited consumer and small to medium-sized enterprise representation in the development of industry standards.

    According to Trade Ledger, these omissions “risk a scaremongering campaign around data security that could stall progress and reduce the scope of the changes, leaving the door open for overseas financial markets to take over our local markets in the new era of Open Banking”.

    India

    UIDAI Asks Non-Banking Fintech Companies To Stop Aadhaar-Based Services (Inc 42) Rated: AAA

    After getting telecom companies to submit their exit plans from Aadhaar-based services, the Unique Identification Authority of India (UIDAI), the Aadhaar regulatory body, has now asked digital payment companies to stop offering any sort of Aadhaar-based service on their platforms.

    In a letter, the UIDAI also directed digital payment companies to submit confirmation of closure of Aadhaar-related authentication and their alternative plans to exit from the Aadhaar-based ecosystem.

    According to reports, the UIDAI has sent the letter only to non-banking companies such as PayPoint, Eko India Financial Services, and Oxigen Services, among others.

    Citing unnamed sources, an ET report stated that banks and payment companies such as Paytm, which have obtained banking licences, have not received the notice.

    Africa

    Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account.

    Now, a proliferation of lenders are using the same technology to extend credit to the banked and unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up.

    This week, the finance ministry published a draft bill on financial regulation which covers digital lenders for the first time. A key aim is to ensure that providers treat retail customers fairly, it said.

    Authors:

    George Popescu
    Allen Taylor

    Thursday September 6 2018, Daily News Digest

    Purchase APR by Credit Score Range

    News Comments Today’s main news: Varo Money gets preliminary approval for bank charter. SynapseFI raises $17M for banking platform. RateSetter ISA gets 130M GBP inflow in 8 months. Ex-Lloyds Banking boss set to make 3.3M GBP from Funding Circle float. LendInvest hits 1B GBP total lending. Today’s main analysis: International P2P lending volumes for August 2018. Today’s thought-provoking articles: […]

    Purchase APR by Credit Score Range

    News Comments

    United States

    United Kingdom

    International

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    News Summary

    United States

    Varo Money wins preliminary approval for US national bank charter (FinExtra) Rated: AAA

    San Francisco-based fintech startup Varo Money has been granted preliminary approval for a national bank charter by the Office of the Comptroller of the Currency (OCC), paving the way for the creation of the first fully-licensed mobile-only bank in the US.

    Co-founded by former Wells Fargo executive Colin Walsh, Varo Money has raised $79 million in funding over the past two years and currently provides a range of savings, loans and account-based services through a relationship with The Bancorp Bank.

    The approval for a Federal banking charter will enable the firm to expand its portfolio of millennial-friendly financial products on a national scale, providing a wider range of services in all 50 states.

    Four Things for FinTechs to Consider Before Filing a Bank Charter Application, says Auriemma Consulting Group (PR Web) Rated: A

    Each FinTech now finds itself at a regulatory Rubicon: To either take control of its destiny by embracing one of the available bank charters, with all of the attendant compliance and regulatory challenges; or to remain a non-bank technology company, dependent on a bank partner or subject to multi-state laws.

    Here are four of the most important factors for FinTechs to consider now:

    1. Determine the importance of interest rate exportation to your business.
    2. Consider the need for deposit funding.
    3. Consider the requirements of equity investors – now and in the future.
    4. Weigh the risk represented by a Bank Partner.

    3 best pieces of career advice for young people from ex NFL and Twitter exec (NBC) Rated: AAA

    Anthony Noto has had a star-studded corporate career.

    He has been the chief operating officer of Twitter, the co-head of telecommunications, media and technology investment banking at Goldman Sachs and the executive vice president and chief financial officer of the National Football League. And currently, he is the chief executive officer at the online personal finance company SoFi, short for Social Finance.

    1. Fix problems, don’t pass the buck
    2. ‘Be a truth seeker’ so you can make the best decisions possible
    3. Focus on making your whole team better

    SynapseFI raises $ 17M to develop its fintech and banking platform (Tech Crunch) Rated: AAA

    SynapseFI, a startup that helps banks and fintech companies work together to develop technology, has announced that it raised a $17 million Series A funding round.

    The funding actually closed at the back end of last year, but CEO Sankaet Pathak said the company has been so busy developing new products, hiring and more than that it is only getting around to disclosing the deal now. The investment was led by Trinity Ventures and Core Innovation Capital, with participation from other unnamed backers.

    The San Francisco-based startup has sat under the radar for a while now despite starting up in 2014. Its core product is a platform that helps banks and developers work together. That involves developer-facing APIs that allow companies to connect with banks to offer services, and also bank-facing APIs that allow banks to automate and extend back-end operations.

    The LendingTree Mortgage Offers Report contains data from actual loan terms offered to borrowers on LendingTree.com by lenders.

    • APR: Actual APR offers to borrowers on our platform
    • Down Payment: Though analogous to the LTV, we find that borrowers identify more closely with the down payment. Academic studies have also found that the down payment is the primary concern for homebuyers and one of the main impediments to entering the home buying market.
    • LTV: Actual LTV offered to borrowers on our platform
    • Loan Amount: The average loan amount borrowers are offered
    • Lifetime Interest Paid: This is the total cost a borrower incurs for the loan, inclusive of fees.
    Source: Lending Tree

    Credit unions split on potential threat posed by OCC’s fintech charter (Credit Union Journal) Rated: A

    With the Office of the Comptroller of the Currency having approved a national bank charter for fintechs this summer, a host of insiders have weighed in on potential pros and cons, and how OCC’s move might ultimately impact credit unions.

    “The threat to any financial institution, including credit unions, would be around the prospect of a fintech with compelling, modern technology and innovative approaches to traditional banking services becoming regulated and competing with CUs and banks,” said Michael Carter, EVP of digital practice for the Memphis-based Strategic Resource Management (SRM).

    Ted Bilke, president of Symitar and VP of Jack Henry & Associates, said one charter “negative” could be enabling large players like Walmart and Amazon to “provide traditional depository and lending services” that compete directly with traditional credit union business.

    Should You Take Out a Loan for Payroll? (NAV) Rated: A

    When cash flow slows, becomes stagnant, or is otherwise disrupted (large purchases, overdue accounts, etc.), business owners can become vulnerable to a variety of financial woes. Bills can go unpaid, vendor relationships can become strained, and, if the problems persist, your credit can take a quick slide downward. Unfortunately, cash flow problems can also impact another essential part of your business – payroll.

    Aside from leaving employees disgruntled, failure to meet your payroll obligations is considered a violation of the Fair Labor Standards Act (FLSA), which can result in penalties handed down from the Department of Labor.

    Why can’t you make payroll? 

    Though the exact reason for payroll problems can vary from business to business, there are typically two primary circumstances that leave business owners frantically trying to make good on this obligation:  changes in cash flow or unexpected expenses.

    Americans Are Planning to Spend Less on Fashion This Fall; Many Are Embracing Alternatives to Cash or Credit Cards (Business Wire) Rated: A

    Affirm, Inc., the company founded by entrepreneur Max Levchin to provide fair and honest alternatives to traditional credit, today announced the “Shop with Affirm” fall fashion campaign and released the findings of a new survey revealing how Americans plan to shop and pay for apparel purchases this fall.

    Starting in September, Affirm will feature fashion and apparel brands that partner with Affirm across Instagram and Affirm.com, showing consumers where they can buy now and pay for purchases over time with Affirm. Many fashion brands now give customers the option to use Affirm to buy items with no interest, repaid in three easy monthly installments.

    The campaign was designed to make great brands accessible to more customers, offering a transparent payment option that better aligns with shoppers’ cash flows and helps them budget for fall purchases.

    White Oak Healthcare Finance Closes $ 20 Million Financing For Fox Rehabilitation (Business Wire) Rated: B

    White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as sole lender and administrative agent on the funding of a $20 million asset based senior credit facility for Fox Rehabilitation, Inc. (“Fox”). The funds were primarily used to refinance existing indebtedness and support continued growth.

    Fox provides physical, occupational and speech therapy services to help geriatric patients regain a better quality of life. “We are excited to partner with a practice that is so highly focused on clinical outcomes. By investing in people and processes, Fox has demonstrated the unique ability to maintain continuity of care while expanding throughout the country,” said Ross Eldridge, Managing Director at White Oak.

    United Kingdom

    RateSetter ISA sees £130m inflows in eight months (Altfi News) Rated: AAA

    Peer-to-peer lender RateSetter has seen a inflows of more than £130m into its Innovative Finance ISA in just eight months.

    The firm, one of the three largest P2P lending platforms in the UK, launched its IFISA to existing customers in February and new customers in March. Like its peers Funding Circle and Zopa, the platform was fully regulated and therefore able to launch an IFISA later than many of its smaller peers.

    John Battersby, head of communications at the firm, says that demand has been higher than expected for Ratesetter’s ISA.

    Disgraced ex Lloyds Banking boss set to make £3.3m when web-based lender Funding Circle floats (This is Money) Rated: AAA

    The disgraced former boss of Lloyds Banking Group could make millions of pounds when fintech darling Funding Circle lists on the stock market in the coming weeks.

    Eric Daniels, who orchestrated Lloyds’ disastrous takeover of rival HBOS during the financial crisis which left the bank in need of a £20billion taxpayer bailout, is an investor and director at the peer-to-peer lender.

    He owns a 0.2 per cent stake in the business, which looks set to be worth £3.3million when it joins the stock market.

    Funding Circle “Go further” by Lucky Generals (Campaign) Rated: A

    Funding Circle, the small business loans platform, breaks the functional conventions of most financial services advertising in its second TV campaign.

     

    LendInvest’s Total Lending Capital Hits £1 Billion as Fintech Raises £150 Million in Residential Development Funding in New JV (Crowdfund Insider) Rated: AAA

    LendInvest, an online property finance platform, reports it has secured £150 million of “initial funding” in a new joint venture with Nomura, a global investment bank,  and Magnetar, an alternative investment manager. This new capital infusion now places LendInvest’s total capital for lending at around £1 billion. The JV with LendInvest will see the funding used for residential development finance.

    Nomura is a Japan headquartered financial services group with an integrated global network spanning over 30 countries. Magnetar, based in the US, is a $13.7 billion investment manager that seeks to achieve stable risk-adjusted returns by opportunistically employing a wide range of fixed income, energy, quantitative and fundamental investment strategies.

    Proposed investor restrictions threaten P2P sector’s growth (Peer2Peer Finance) Rated: A

    THE PEER-TO-PEER lending industry has blasted the City watchdog’s proposed investor restrictions as unfair, costly and damaging to the sector’s future.

    P2P platforms have been busy digesting the Financial Conduct Authority’s (FCA’s) long-awaited post-implementation review of the sector – released over the summer – and while most are happy with plans for heightened transparency and loanbook disclosure, there are concerns over proposed marketing restrictions and appropriateness tests  for investors.

    These proposals would make P2P lending platforms become the preserve of sophisticated, high-net-worth or ‘restricted’ investors, akin to crowd bond providers like Abundance and alternative investment firms such as Goji.

    WELENDUS LAUNCHES INDUSTRY-FIRST 15% RETURN ISA PRODUCT (Fintech Finance) Rated: A

    Welendus, the FCA-approved Peer-to-Peer (“P2P”) lender, today announces the launch of an industry-first; it’s HMRC-approved Innovative Finance ISA (“IF-ISA”), which will allow investors to invest their annual ISA allowance in a flexible high return investment product, with no income tax on the interest earnings. This product will be the first ISA product on the market with up to a 15% return.

    The UK’s short-term lending market is now worth £3.7 billion per year[1], however new innovative products have been few and far between, leaving great opportunity for disruption and innovation. In addition, the UK’s P2P lending market is expected to exceed £10 billion this year, and up to £19 billion by 2020.

    Buy to let Britain: A divided nation sell or stay? (Property Reporter) Rated: A

    Britain’s buy-to-let landlords are divided over their future, in light of tax and market changes – according to latest research from property-backed P2P lending product, Octopus Choice.

    While three in five buy to let investors (56%) want to keep or buy more rental properties, two in five (44%) are looking to sell. The majority of UK landlords still view it as a money-making asset class but think it will be on the decline in the future. As the market consolidates, buy to let owners are polarized across the country, with tough decisions to make on whether to stay or leave the sector.

    For those looking to exit the market, nearly a quarter blame falling yields (24%) and tax changes (23%), while a fifth blame cooling house prices (19%). Three in five (60%) say that property management had become a burden and 61% undervalued the costs involved.

    Charlotte Rogers: The demise of Wonga shows toxic brands will always fail (Marketing Week) Rated: A

    At one point Wonga was the UK’s biggest payday lender and tipped for a $1bn listing on the New York Stock Exchange, but it collapsed under the weight of compensation claims from customers who had been mis-sold loans and has not done enough to repair the damage.

    Some 200,000 customers who owe an estimated £400m in short-term loans are still being asked to make repayments to the company, despite the fact compensation claimants are unlikely to ever receive a full pay-out.

    The current reality is a world away from 2008, the year Wonga launched. The company positioned itself as a flexible digital alternative to banks and as an option for people looking online for a financial fix in 15 minutes.

    Taking a cheeky and brash tone, the loans firm invested heavily in marketing to raise its brand awareness. Wonga’s advertising spend rocketed from £22,000 in 2009 to £16m by 2011, according to estimates by analysts AC Nielson MMS.

    In 2010, Wonga made its first high profile move into sponsorship, teaming up with Transport for London to sponsor five hours of free late-night travel on New Year’s Eve. That same year the company made its first foray into the world of sports through a shirt sponsorship deal with Blackpool FC, which it would continue until 2015.

    The PRS in a divided Nation – 44% say sell and 56% stay (Property 118) Rated: A

    Britain’s buy-to-let landlords are divided over their future, in light of tax and market changes with 56% buy to let investors wanting to keep or buy more rental properties, and 44% are looking to sell. This is according to latest research from property-backed P2P lending product, Octopus Choice.

    The majority of UK landlords still view it as a money-making asset class, but think it will be on the decline in the future. As the market consolidates, buy to let owners are polarized across the country, with tough decisions to make on whether to stay or leave the sector.

    Meet the Wonga wannabees: Britain cheered when its biggest payday lender went bust last week… But beware its rivals still out there (This is Money) Rated: A

    Wonga is no more — but there are still dozens of other payday loan firms out there.

    So who are the Wonga wannabes?

    SUNNY LOANS

    Borrowers can apply for a loan of between £100 and £2,500.

    The standard representative APR is 1,293 per cent, with risky borrowers charged up to 1,617 per cent.

    QUICKQUID

    Owned by parent firm Cash- EuroNet UK, QuickQuid has been trading since 2007 and offers loans up to £1,000 for new customers — £1,500 to those returning.

    PEACHY

    It offers loans of between £100 and £1,000 for between one and 12 months.

    MR LENDER

    It offers loans of between £200 and £1,000 over a term of six months.

    Its typical APR is 1,256 per cent and maximum is 1,462 per cent. Borrow £1,000 over six months at the standard rate and you would repay a total of £1,815.

    MYJAR

    Based in Westcliff-on-Sea, Essex, Myjar launched a decade ago and offers loans of between £100 and £7,200 over three, six, 12 or 24 months, with a maximum interest rate of 1,326 per cent.

    China

    Slow-Motion Crash Sees Chinese Auto Stocks Skid 40% This Year (Wall Street Journal) Rated: AAA

    A plan by Great Wall Motor Co. GWLLY -4.12% to offer discounts of between 11% and 27% on its cars has helped trigger a round of selling this week, according to analysts at Deutsche Bank.

    Source: Wall Street Journal

    Dongfeng Motor Group Co. DNFGY 8.84% Geely Automobile Holdings Ltd. GELYY -0.90% andGuangzhou Automobile Group Co. 2238 -2.97%—among the largest Chinese auto makers listed in Hong Kong—have each dropped by between 4% and 7% in the last two days of trading.

    Combined, the trio have lost nearly 194 billion Hong Kong dollars (US$24.8 billion) in market capitalization this year, Datastream shows, while a Thomson Reuters index of Hong Kong-listed auto and truck manufacturers is down 39%.

    Vehicle purchases are on the decline: In July, new car sales were 5.5% lower than in the same month last year. Sales of insurance policies are also falling. Peer-to-peer lending for car purchases had become increasingly popular, but after a series of lending scandals the government has cracked down.

    International

    International P2P Lending Volumes August 2018 (P2P Banking) Rated: AAA

    Source P2P Banking

    Startup Influx into Fintech: Is There Still Space for Growth? (Equities) Rated: AAA

    We need to understand that the fintech industry is extremely broad, and the user base does not fit into a single category. Therefore, the applications of financial technology will find relevance in many spheres. This is one of the factors that have accounted for a massive growth in the number of fintech startups across the world. It is estimated that the number of startups in the fintech space has increased 8-fold; from an estimated 1000 companies in 2005 to more than 8000 companies in 2016.

    Source: Equities

    The fintech industry is still in a growth phase and therefore there is every possibility that we will continue to see an increase in the number of startups jumping into the fintech space. However, the emerging markets will see more of the increase in the number of startups due to the underserved nature of these markets.

    ACORN OakNorth Holdings closes $ 100m round as business continues to grow ahead of plan (Fintech Finance) Rated: A

    ACORN OakNorth Holdings has today announced that it has secured $100m from the EDBI of Singapore, NIBC Bank, Clermont Group, GIC, and Coltrane Asset Management. The $100m represented 4.3% of the company. The capital will be used to accelerate the growth of ACORN machine and enable OakNorth to continue scaling its lending efforts in the UK.

    Meanwhile, ACORN machine has opened offices in New York and Singapore to service clients across multiple continents and will have over $5bn of assets under service on its platform by year end. NIBC Bank is the platform’s first client in the Netherlands. ACORN machine’s team now consists of almost 100 people and in the short term expects to add another 50 people across growth and operations, engineering, machine learning and data science.

    Biz2Credit Launches New Virtual CFO for Small Businesses (Crowfund Insider) Rated: A

    Biz2Credit announced on Wednesday the launch of its BizAnalyzer Virtual CFO, which is described as an advanced software tool that enables business owners to make smarter financial decisions about their companies. According to Biz2Credit, the virtual CFO software is available to clients of Paychex Promise, a subscription-based service from Paychex, a provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services.

    Australia

    Lender produces guide to business loans (Broker News) Rated: A

    An online lender has released a free eBook to help brokers move into writing unsecured online business loans.

    The ‘Guide to Online Business Loans’ is the first comprehensive guide to alternative lending produced by a fintech lender in Australia.

    It was created to overcome barriers such as a lack of education and knowledge of the industry, to help brokers diversify.

    India

    P2P lending: How the Rs 10 lakh cap will affect small businesses? (The Economic Times) Rated: AAA

    If you are salaried and earn up to Rs 20,000 every month, cold calls and emails from banks for pre-approved personal loans is a regular thing. But for someone planning to open a franchise store or start a catering business, getting an unsecured loan is not easy. Banks and NBFCs are reluctant to fund businesses or expansion plans of MSMEs/SMEs or proprietors.

    This could be due to factors like lack of credit data, remote location or poor education. Banks and financial institutions require an individual to display established source of income, thus leaving about 80 percent of the population with no access to credit.

    The Peer-to-peer (P2P) online platform aims to bridge the gap between people who can lend and those who want to borrow without any security. The P2P industry took its first baby step in October in the form of RBI regulations which allows high-end investors to lend their money to low-end borrowers.

    Asia

    The evolution of sme financing (The Business Times) Rated: AAA

    This gap in payments in certain industries can be up to several months, such as in the construction sector. When unexpected crises hit, such as late payments by customers or budget overruns during projects, businesses without adequate financing can be left high and dry.

    With so much at stake, SMEs need to ask themselves if their current financing facilities are adequate for their needs and future expansion.

    While the SME Financing Survey suggests that SMEs do not have a serious problem with getting external debt financing as 90 per cent of SMEs were successful in securing loans in 2017, other SME surveys indicate that financing is still a top concern by this particular segment. In a separate SME Development Survey 2017 by DP Info, 35 per cent of SMEs cited facing financing concerns – up from 22 per cent in 2016 and 14 per cent in 2015.

    Kristine Ng: Fundaztic’s SME Lifeline to Plug the RM80 Billion Funding Gap (Awani Review) Rated: A

    Kristine Ng understands very well the struggles SMEs go through to obtain financing. She spent a decade in the banking sector – five with Credit Guarantee Corporation (CGC), which was set up with the sole objective to help SMEs obtain credit facilities by providing guarantee schemes.

    Recognising the need to plug the funding gap, particularly among smaller and micro enterprises. Kristine left her corporate career to start to start peer-to-peer (P2P) platform Fundaztic with a team of senior level ex-bankers.

    Hard cash (Business Times) Rated: A

    Indonesian ride-hailing and online payment company GO-JEK is expanding its financial technology services through partnerships with three peer-to-peer (P2P) lending firms: Findaya, Dana Cita and Aktivaku.

    GO-JEK’s payment system GO-PAY launched last year, accounting for more than half of the startup’s transactions. The company integrated GO-PAY into the GO-JEK app, enabling customers to store money on their mobile phones — similar to a digital debit card. Adding to the GO-PAY account can be done from a bank account or ATM. If customers don’t have a bank account, they can hand cash over to GO-JEK’s drivers, and it will be transferred immediately to their account.

    MENA

    New Report Trails the Rise of Israeli Fintech (C Tech) Rated: AAA

    Over the last 18 months, 16 multinational financial firms started operating in the Israeli tech system, or increased their local footprint through strategic partnerships and investments, according to a new report by Start-Up Nation Central (SNC), a nonprofit working to promote Israeli tech.

    Newcomers include French insurance firm AXA SA, Bank of Montreal, Fosun, TD Bank, AmTrust, and Mastercard.

    Authors:

    George Popescu
    Allen Taylor

    Wednesday June 6 2018, Daily News Digest

    Marcus future plans

    News Comments Today’s main news: N26 reaches 1 million customers. Prospa postpones float. Transferwise could be working with Monzo. Ant Financial shifts away from finance. Goldman Sachs backs Marqeta. BlueVine raises $60M. Today’s main analysis: Capitalists invest in Chinese companies. Today’s thought-provoking articles: Goldman shares its vision for Marcus. 10x Banking founder discusses the future of fintech. Indonesia’s looming digital disruption. United […]

    Marcus future plans

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

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    News Summary

    United States

    Goldman Sachs backs card issuing, processing startup Marqeta (Reuters) Rated: AAA

    Goldman Sachs Group Inc (GS.N) has joined a $45 million investment round in Marqeta, a U.S. fintech company offering technology businesses can use to issue payment cards, the startup said on Tuesday.

    The round, which brings Marqeta’s total funding raised to $116 million, was led by venture capital firm ICONIQ Capital, according to a statement from the companies. Marqeta is also backed by Visa Inc (V.N).

    Goldman Sachs Shares Their Vision for the Future of the Marcus Platform (Lend Academy) Rated: AAA

    Source: Lend Academy

    In the presentation Solomon did not address everything on this slide directly but much of it is self-explanatory. First, Goldman is breaking down their vision for their consumer platform into four key areas: Borrow, Spend, Save, Protect with 12 separate products listed. It is also interesting that Clarity Money is front and center on this slide. They clearly view the personal financial management app as a critical piece of the puzzle.

    Let’s look at the future products in the Borrow space beyond personal loans:

    1. Credit Cards – we have already heard about their deal with Apple but there will likely be a Marcus branded credit card at some point.
    2. Mortgage – This is a huge market and one that still has plenty of room for disruption. While it won’t be easy to displace the banks or large non-bank lenders like Quicken Loans and loanDepot there is a huge market to go after.
    3. Auto – Another big market with no clear fintech leader. The banks still dominate auto lending, particularly for new cars. LendingClub has started in the auto space focused on auto refinancing and I expect that will be the area Marcus would go to first.

    When disaster strikes, digital banking can become a lifeline (American Banker) Rated: A

    As chief information and digital officer at Popular Inc., Burckhart’s role is mostly in the office and boardroom. But in the aftermath of the Category 4 storm, she and her team spent days in the field, figuring out how to get banking services to those who needed them.

    Their efforts cannot be overstated, since the company occupies a key role in the island’s economy: Its Banco Popular claims to have 56% of the deposits in Puerto Rico and 49% of the net loans, as of year-end.

    A week after Hurricane Maria, despite islandwide communication and electrical outages, Popular had 53 of 168 branches and 150 of 635 ATMs in service, as well as all digital channels.

    Digital Banker of the Year: Fifth Third’s Tim Spence (American Banker) Rated: A

    Last year, Spence oversaw the configuration of so-called Agile teams to work on Fifth Third’s online banking channels and mobile apps. This resulted in a revamped bill pay experience, along with the addition of online branch appointment scheduling and the ability to withdraw cash at ATMs using the bank’s mobile app. In months, it was also able to launch Zelle peer-to-peer payments and Momentum, a proprietary app that helps millennials pay off student loans faster through micro payments from rounding up purchases.

    The plumber to US fintechs branches out (Financial Times) Rated: A

    Apex Clearing helps to power leading fintech firms like Robinhood, Betterment and Stash, acting as the plumbing and operating in the background; as these digital platforms begin to slow their growth Apex has started to look beyond the startups for bigger clients; Bill Capuzzi, CEO of Apex Clearing, says there is more than $500bn of addressable market with larger firms who want to digitize; the effort is not easy as some traditional players still use fax machine technology; making progress slow but firms know they need to digitize and Apex is hoping to take a big share of those making the shift.

    The Woz: Blockchain might be a bubble, but it’s on the right track (AltFi News) Rated: A

    The ‘Woz’ also offered thoughts on digital banking and artificial intelligence.

    He said that online banks ‘just aren’t as secure’ as their incumbent rivals, referencing a time that his own crypto-currency holdings, or a portion of them, were stolen from a digital bank.

    Real Estate Startup FlyHomes Raises $ 17m in Series A Funding (Finsmes) Rated: A

    FlyHomes, a Seattle, WA-based real estate startup, raised $17m in Series A funding.

    The round was led by Andreessen Horowitz, with participation from Mark Vadon and Shasta Ventures, among others.

    The company intends to use the funds to increase deployment of its Cash Offers program, accelerate hiring, invest in further product development, and drive new market expansion in Seattle, San Francisco, Chicago and Boston.

    IDology Study Reveals Consumer Insights on Digital Identity Fraud (IDology) Rated: B

    Key consumer behavior trends and other major findings identified in the IDology Consumer Digital Identity Studyinclude:

    • Fraud concerns are impacting consumer choices online, with 83 percent surveyed having extreme to moderate concern that their identities will be used to fraudulently open accounts.
    • Consumers view biometrics, knowledge-based authentication and one-time passcodes as the most secure methods of authentication. Overall, 90 percent of consumers are comfortable answering knowledge-based authentication questions to verify their identities but prefer demographic-based questions over credit-based questions two to one.
    • Fifty-six percent of consumers report that they are more likely to choose a financial institution if they know it offers advanced identity verification methods.
    • When opening an account online, consumers place a premium on security (88 percent) and ease (72 percent), with 31 percent reporting they have abandoned signing up because it was too difficult or took too long. This reveals that more than ever, consumers are looking to do business with companies and financial institutions that have minimal friction as part of their overall service experience, along with assurance that their transactions and identities are secure.

    Despite worries, America’s small business owners bullish on economy (Bankless Times) Rated: A

    According to the survey, 53 per cent and 52 per cent respectively of small business owners named (1) the cost of providing health insurance for employees and (2) the effect of changes in the new tax law as key business considerations. What’s more, 35 per cent of respondents report the new tax plan has already caused them to make changes in their business, with 10 per cent reporting that they are actively investing in new equipment or staffing.

    Cross River Hires Veteran Banker To Lead SBA Loan Practice (PR Newswire) Rated: B

    Cross River, a leader in the emerging Fintech industry, has hired Kevin Gallagher, an accomplished small business lending specialist, to head its Small Business Administration loan division.

    Gallagher joins Cross River from Empire State CDC: The 504 Company, where he led business development efforts around various SBA loan products and community lending products. Prior to that, he served as national sales director for SBA-related programs at Customers Bank and Citibank.

    United Kingdom

    TransferWise’s next partnership could be with U.K. challenger bank Monzo (Tech Crunch) Rated: AAA

    According to sources, the international money transfer service and European unicorn is working with the fast-growing U.K. challenger bank Monzo.

    The tie-in will likely see TransferWise functionality offered within Monzo’s mobile banking app, courtesy of the TransferWise API. It will give Monzo’s 700,000 customers the ability to send money in various supported currencies at the ‘mid market’ rate in addition to TransferWise’s low and transparent fees.

    A partnership with U.K. challenger bank Starling was also announced last year, but integration with the bank’s app never materialised and TechCrunch learned last week that the partnership has now dissolved entirely. That is particularly noteworthy given that Monzo and Starling are direct competitors with an interesting shared history, shall we say.

    10x Banking Founder on Why FinTech Is the Future (Bloomberg) Rated: AAA

    Sphonic to partner with Paysafe on digital wallet services (Peer2Peer Finance) Rated: A

    DATA and risk management specialist Sphonic has been chosen to provide digital wallet services to global payments provider Paysafe Group.

    Sphonic, which works with peer-to-peer lenders including Funding Circle and Zopa, supplies data networking services.

    These include customer on-boarding, anti-money laundering, know your customer, fraud detection and monitoring as well as authentication.

    Automated financial advisor Multiply raises £1.75 million (Finextra) Rated: A

    Multiply, the UK’s first fully-automated independent financial advice service, has secured investments totaling £1.75 million, led by Octopus Ventures.

    Octopus Ventures, the early stage investor, invested £1 million, and was joined by Portag3 Ventures LP and Entrepreneur First to support Multiply’s development and roll-out of their beta consumer facing product. Angel investors include Nick Hungerford, former CEO of Nutmeg, Taavet Hinrikus, CEO and co-founder of TransferWise, Peter Rading, Michael Orland and Toby Moore.

    China

    Ant Financial is shifting its focus from finance to tech services (CNBC) Rated: AAA

    Ant Financial Services, the dominant Chinese fintech company, is shifting its main focus to technology services and away from payments and consumer finance as Beijing’s crackdown on financial risk deepens, four sources with knowledge of the matter said.

    But in five years, technology services will make up 65 percent of Ant Financial’s revenue, compared with an estimated 34 percent in 2017, according to confidential company projections viewed by Reuters. That would involve helping banks and other institutions with services like online risk management and fraud prevention.

    Mao is Laughing: Capitalists Pour Money into Chinese Companies (Nasdaq) Rated: AAA

    Over the past week, two private Chinese technology unicorns, Xiaohongshu (“Little Red Book”) and Sensetime, announced that they had raised nearly $1 billion, adding to the ranks of large Chinese enterprises thinking about going public. Another Chinese company is scheduled to IPO in June, 3 recently selected bankers (a key step for launching an IPO) and 11 have already gone public for a total of 15 year to date, compared to 15 in all of 2017.

    Year to date, the 11 Chinese companies are up 39%, compared to only 3% for last year’s vintage. HUYA, a leading live streaming platform for video games, is up 147% since its May 10, 2018 IPO, followed by another video streamer, IQIYI, up 62%. Last year’s big winner was tiny filter maker Newater, up 177%, followed by online lender Lexin Fintech, up 73%, while more than half of its 2017 comrades are under water.

    China’s fintech startup Caogen Touzi secures $ 358m Series D round (Deal Street Asia) Rated: A

    Hangzhou-based fintech platform Caogen Touzi has closed an RMB 2.3 billion ($357.8 million) Series D round led by Shanghai-listed Geo-Jade Petroleum, a property development and oil and gas firm, and other investors.

    In a security filing, Geo-Jade Petroleum said it will invest no more than RMB 500 million ($78 million) in Caogen Touzi.

    Caogen Touzi told Kr36 that the firm will focus on tapping the rural finance market in the future and use the funds for business development.

    Fintech Company Pintec Raises $ 103M in Equity Funding (Finsmes) Rated: A

    Pintec, a Beijing, China-baased independent technology platform enabling financial services, raised US$103m in financing.

    The round was led by Mandra Capital and SINA Corp., with participation from STI Financial Group, Shunwei Capital Partners and ZHONG Capital Holding Group, among others.

    The company intends to use the funds to increase investment in R&D, traffic integration, risk management and operations.

    European Union

    N26 passes million customer milestone (Finextra) Rated: AAA

    We are very excited to announce that N26, that’s us, now has over a million customers.

    To celebrate we put together a look at how customers help us transact €1 billion a month. Before continuing though, we’d like to mention that while we do look at aggregated data, we never look at individual data unless explicitly asked to do so.

    ING pushes for open banking with SME financing platform and Yolt expansion (Fintech Futures) Rated: AAA

    ING is launching a marketplace for SME financing in the Netherlands, which will open to other external financing providers, becoming the first Dutch bank in doing so.ING is keen to maximise the possibilities of open banking and is working with Yolt and Funding Options on bringing new features to customers across Europe.

    ING is also expanding its money management capabilities offered to consumers with the launch of Yolt in France and Italy.

    Fintech Company FinCompare Raises €10M in Series A Funding (Finsmes) Rated: A

    FinCompare, a Berlin, Germany-based fintech company, raised €10m in Series A funding.

    The round was led by ING Ventures with participation from Speedinvest and Uniaq Ventures.

    The company intends to use the funds for the expansion of the team, investment in IT and further growth.

    Challenger bank Banco BNI Europa selects Alterestfor effortless loan data management (Banco BNI Europa Email) Rated: B

    Banco BNI Europa and Alterest, an innovative loan data and intelligence platform, publicly announced today their partnership to streamline investment analytics and risk management between the bank and its credit originating partners. Initiated in Oct, 2017, the partnership comprised of data-feeds integration with tech-enabled lending platforms, implementation of a reconciliation process between operations and nostro accounts, and configuration of an IFRS9-compliant impairment calculation model.

    Euro MPLs growing, but securitization a ways off (GlobalCapital) Rated: A

    The marketplace lending sector in Europe is growing, with a sharp focus on the small to medium sized enterprise segment, but it is still lagging UK and the US markets and lenders will need to ramp up scale and educate investors before a meaningful pipeline of securitization can build

    A panel on focused on European marketplace lenders on day one highlighted the risks and the challenges facing the sector. Speakers hit on some well tread talking points, such as the availability of data on underlying loan portfolios and the lack of performance history.

    International

    FusionFabric.cloud platform changes the way software is developed, deployed and consumed in the financial world (Finastra) Rated: A

    Finastra announced the availability of the three core components within its FusionFabric.cloud platformfor open innovation:

    • FusionCreator – A rapid development environment for financial applications with low-code capabilities and integrated API management tools
    • FusionOperate – A management system to deploy and operate applications in a secure cloud infrastructure
    • FusionStore – An online marketplace for banks to search, try and buy applications

    FusionFabric.cloud already has over 60 Fintechs and providers signed up.

    The AI and robo-advice questions you should be asking (Professional Adviser) Rated: A

    Automated advice, robo-adviser, machine learning, AI-enabled expert advice, robo-advice digital journey, hybrid machine/adviser solution … in a very short space of time the advisory sector has coined a significant amount of terminology for robo-advice.

    Being properly informed about these issues and asking the right questions of a provider can make an enormous difference in levels of investment.

    Australia

    Prospa float postponed as ASIC queries small business loan terms (Australian Financial Review) Rated: AAA

    Small business lender Prospa says it has taken a conservative approach in delaying its $576 million ASX float by two days, in order to respond to renewed concerns from the corporate regulator that its standard form contracts may contain unfair clauses in breach of consumer laws.

    New build financing gap boosts Southern Cross (Good Returns) Rated: AAA

    Peer to peer lender Southern Cross Partners has seen an increase in investor demand as first time buyers struggle to finance new-build properties.

    The lender says it experienced a 10-20% increase in investor demand last year amid a lack of available funding for the construction and sale of new homes.

    Mortgage group’s “mortgage hell” billboard above CBA (Australian Broker) Rated: A

    Online mortgage startup HashChing is advertising with a billboard above a Commonwealth Bank of Australia (CBA) branch.

    The home loan marketplace has launched a campaign against the big banks, which includes this billboard in the Melbourne CBD. The slogan reads, “Our brokers will go to mortgage hell, so you don’t have to”.

    MENA

    Israeli fintech co BlueVine Raises $ 60m (Globes) Rated: AAA

    Israeli alternative business lending company BlueVine today announced that it has closed $60 million iSeries E financing round led by Menlo Ventures, and including new investors, such as SVB Capital. All major existing investors also participated. Including this financing round, the company has raised $533 million to date including $128 million in equity financing and $405 million in debt financing. This latter figure included $200 million raised from Credit Suisse two months ago.

    The new financing will support BlueVine’s plan to expand its highly-successful invoice factoring and business line of credit products, and to explore new products catering to small and medium-sized businesses. BlueVine also plans to use the funding to accelerate R&D hiring.

    Asia

    Indonesia’s coming digital disruption (The Business Times) Rated: AAA

    INDONESIA’S digital economy is set to boom, helping its overall economy expand from US$1 trillion in 2017 to US$2.7 trillion by 2027.

    Over the next 10 years, we expect online retail in Indonesia to increase 14-fold from just US$4.4 billion in 2017 to US$63.2 billion, or 19 per cent of total retail sales versus 3 per cent currently.

    To support this growth, as well as the rise in e-services such as ride hailing, travel bookings and food delivery, we expect an equally rapid adoption of e-money from just 2 per cent of nation-wide transactions in 2017 to 24 per cent by 2027.

    We are also seeing the emergence of fintech solutions such as peer-to-peer lending targeting the 44 per cent of the population who do not have access to banking services today.

    Thierry Sanders, CEO Of Mekar (Indonesia Expat) Rated: A

    We’ve shifted our activities and are now mainly financing women’s businesses. Lending to women is safer in Indonesia. Statistics show that five percent of male borrowers, on average, will not pay back. With our female borrowers, it’s only 0.5 percent. Which is why we chose to focus on women. They also have a harder time getting financed. Now, 95 percent of the businesses we finance are women’s businesses.

    Caribbean

    ECCB advises caution regarding non-traditional financial services (St. Lucia Times) Rated: AAA

    The Eastern Caribbean Central Bank (ECCB) is aware of the emergence of several initiatives which compete directly with traditional financial services. These include but are not limited to: peer to peer lending, digital wallets, crowd funding ventures, crypto-assets and initial coin offerings (ICOs) in the Eastern Caribbean Currency Union (ECCU).

    Authors:

    George Popescu
    Allen Taylor

    Friday May 18 2018, Daily News Digest

    Seedinvest returns vs traditional

    News Comments Today’s main news: PayPal to buy iZettle. LendInvest integrates with Stripe. KBRA assigns preliminary ratings to Avant Loans Funding Trust 2018-A. Ant Financial extends dominance. Today’s main analysis: SeedInvest delivers 17.4% IRR. Today’s thought-provoking articles: UK tech expanding faster than the rest of the economy. Why spreading fiber optic cable in Africa offers hope. Digital transformation is key […]

    Seedinvest returns vs traditional

    News Comments

    United States

    United Kingdom

    European Union

    International

    • PayPal to acquire iZettle for about $2.2 billion. AT: “This is huge news. If PayPal becomes a regular option in retail stores alongside Visa and Mastercard, it could become the defacto payment option for the majority of consumers. Of course, it will still have to compete with Square, Affirm, and Klarna. It’s bright spot is the massive head start is has over all of the above.”
    • Bitcoin boosts fintechs. AT: “I just can’t see any way that lenders and othe fintech companies to lose by offering crypto alternatives to their current products.”

    Other

    News Summary

    United States

    KBRA Assigns Preliminary Ratings to Avant Loans Funding Trust 2018-A (Business Wire) Rated: AAA

    -Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Avant Loans Funding Trust 2018-A (“AVNT 2018-A”). This is a $221.935 million consumer loan ABS transaction that is expected to close on May 31, 2018.

    Preliminary Ratings Assigned: Avant Loans Funding Trust 2018-A

    Class Preliminary Rating Expected Initial

    Class Principal

    A A- (sf) $149,010,000
    B BBB- (sf) $47,500,000
    C BB- (sf) $25,425,000

    SeedInvest Publishes Report on Investor Returns, Delivers IRR of 17.4% (Crowdfund Insider) Rated: AAA

    SeedInvest, one of the largest investment crowdfunding platforms in the US, has released a performance report on investor returns. SeedInvest has been in operation since 2013 following the creation of accredited crowdfunding under Title II of the JOBS Act (Reg D 506c). Since that date, SeedInvest has become a full stack crowdfunding platform offering investments in the three different crowdfunding exemptions to both accredited and non-accredited investors.

    Source: Crowdfund Insider

    According to SeedInvest, investors on their platform have generated an unrealized Internal Rate of Return (IRR) of 17.4%1 since 2013. In comparison, this number is 1.5x greater than the 11.7% median return calculated by research firm Cambridge Associates for U.S. venture capital funds of the same vintage. The term of the report was up to the end of 2017.

    SeedInvest said that the top 10% of their listed investors generated an a whopping 76.86% IRR while the bottom 10% delivered a negative 7.4% IRR. SeedInvest estimated that only 1.3% of their platform investors who have invested in three or more companies have generated negative unrealized IRR.

    Check out the full report here.

    Study Details Why Women Entrepreneurs Have Greater Crowdfunding Success (Entrepreneur) Rated: A

    Crowdsourcing has emerged as a positive platform for women. The National Women’s Business Council released a report — Crowdfunding as a Capital Source for Women Entrepreneurs — based on exclusive and original data from the two leading crowdsourcing platforms, Kickstarter and Kiva. The goal was to determine various predictors of success on crowdsourcing platforms for women business owners, and if those predictors of success were different than their male counterparts.

    Real Estate Crowdfunding Platform Small Change Lists Side by Side Reg CF – Reg D 506c Offer (Crowdfund Insider) Rated: A

    Recently, Small Change has listed their first side-by-side Reg D 506c / Reg CF offering thus leveraging a work around other securities crowdfunding platforms in the early stage space have incorporated.

     

    The SEC Just Launched a Fake ICO Website to Educate Investors (CoinDesk) Rated: A

    The regulator announced Wednesday it has launched a mock ICO called HoweyCoin, presumably named after the Howey Test, which “touts an all too good to be true investment opportunity.”

    However, the company notes, “the offer isn’t real.” Users who try to invest in the token sale will instead be redirected to the regulator’s education tools, which are aimed at pointing out the signs of fraudulent token sales.

    BlackRock’s bet on Acorns is a bet on tomorrow’s investor (Financial Planning) Rated: A

    BlackRock’s investment in microinvesting app Acorns underscores an evolution occurring in financial services in its shift toward digital — that gaining scale early will be essential to amassing future client assets.

    The world’s largest asset manager is leading a $50 million funding round that will build out the startup’s portfolio stack with new investment options. It also gives BlackRock an inside look into the behavior of next generation investors, which it says will help fine-tune future releases and broaden its appeal beyond large institutions and pension funds.

    Fundation grabs $ 120 mln from SunTrust (PE Hub) Rated: A

    Fundation Group LLC, a lender and credit solutions provider, has secured a $120 million credit facility from SunTrust Bank. Fundation is also backed by Waterfall Asset Management and is majority-owned by Garrison Investment Group.

    TransUnion Announces Agreement to Acquire iovation to Strengthen Fraud and Identity Solutions (Omaha World-Herald) Rated: A

    TransUnion (NYSE:TRU) has agreed to acquire iovation, one of the most advanced providers of device-based information in the world, strengthening its leadership position in fraud and identity management.

    PR Mortgage & Investments Selects SS&C Precision LM to Support Its Agency Lending Operations (SS&C Technologies) Rated: B

    SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that PR Mortgage & Investment Corp. (“PR Mortgage”) has selected SS&C Precision LM to support loan servicing and origination for HUD/Ginnie Mae, Fannie Mae, Freddie Mac and its banking programs. SS&C Precision LM will also enhance PR Mortgage’s asset management and investor reporting, and provide secure web-based portals for borrower self-service and document workflow automation.

    United Kingdom

    LendInvest Announces Integration With Payments Platform Stripe To Streamline Loan Application Process (Crowdfund Insider) Rated: AAA

    On Thursday, specialist property finance lender LendInvest announced it has expanded on its long-term partnership with Stripe by integrated the payments platform in order to streamline its loan application process. According to the online lender, the new integration will be embedded in the primary stages of the buy-to-let loan application process. LendInvest reported:

    “Stripe allows the broker to pay the valuation fee through LendInvest’s online buy-to-let portal immediately after the borrower’s application forms have been signed. This process was previously handled manually, with the case manager having to call the broker and then the borrower to arrange payment. Managing these payments centrally through LendInvest’s self-service online portal cuts down the overall time taken to complete the application, whilst providing a transparent way to track this stage of the application process.”

    Tech Nation 2018 report: UK tech expanding faster than the rest of the economy (Information Age) Rated: AAA

    Tech is expanding 2.6 times faster than the rest of the UK economy, according to Tech Nation’s 2018 report. The digital tech sector is worth nearly £184 billion to UK economy, up from £170 billion in 2016.

    London ranks as second most connected place for tech in the world, after Silicon Valley. But, when it comes to proportion of overseas customers, the UK capital trumps the self-appointed tech capital of the world.

    The UK’s digital tech sector continues to accelerate faster than the rest of the economy, according to Tech Nation 2018. Turnover of digital tech companies grew by 4.5% between 2016-17 compared to UK GDP which grew by 1.7% over the same period, according to the figures.

    HSBC to tap Open Banking potential through new partnership (AltFi News) Rated: A

    HSBC UK is set to capitalise on the opportunities presented by Open Banking after agreeing to a partnership with consents.online, an Account Information Service Provider (AISP).

    Under the deal, HSBC can access consumer transaction data held by other organisations. The bank plans to use this information to launch new consumer products.

    It will also use consents.online’s consent management architecture, which allows consumers to view and control how their data is used. The platform gives consumers and small businesses the ability to see who is accessing their data and to control access – with the power to revoke it at any time.

    Peer to Peer (P2P) Lending – Withholding Tax Obligations – Borrowers (and Lenders) Beware (Lexology) Rated: A

    Borrowers and lenders should be aware that currently Ireland’s withholding tax regime has not been amended for P2P Lending (aside the ability in certain circumstances to group payments together to the same lender in a calendar year) and in that regard the Irish Revenue Commissioners have issued a timely Revenue eBrief reminding Irish corporate borrowers (as well as lenders) of their Irish tax obligations. In particular the general obligation on an Irish corporate borrower2 to, amongst other things, withhold tax on interest payments made on the finance raised, at the standard rate (currently 20%) subject to certain exceptions, most of which will not apply where the lender is an individual, regardless of where resident.

    Ablrate takes equity stake in Huddle (Peer2Peer Finance) Rated: A

    ABLRATE has taken an equity stake in fellow peer-to-peer lender Huddle, as part of a wider strategic partnership between the two platforms.

    Under the new deal, Ablrate has taken a minority holding in the business lender and the two platforms will share their investor bases.

     

    Atom Bank launches mortgages for first-time buyers (AltFi News) Rated: A

    Digital banking app Atom has launched first-time buyer products on its standalone Digital Mortgages platform.

    The new loans will offer first-time home-buyers £500 cashback, along with a free valuation and no product fee. The newly-launched range will be available for mortgages between 80-95 per cent loan-to-value (LTV). The range consists of two, three and five-year fixed rates mortgages, with rates starting at 2.24 per cent.

    The platform has also extended its existing range by adding 95 per cent LTV products for its purchase and remortgage products.

    Furthermore, Atom has removed the £300,000 limit on first-time buyer applications and increased its maximum mortgage term from 35 to 40 years – changes meant to increase its flexibility and in line with broker feedback.

    BitBose ICO (BOSE Token): Crypto Lending & Investment Platform (Bitcoin Exchange Guide) Rated: B

    • The platform will also have the Bitbose crypto loans program that will allow users to be able to receive real cash by holding to their crypto assets in a secured platform. The program offers an easy way for users to get money without having to sell their crypto assets. The program will have an easy to borrow and lend application, almost instant approval of loans and the borrower will get their cash instantly since it will be credited to borrower’s bank account. The interest rates are also competitive and do not have advance payment requirements. Another significant feature of the program is the lack of a capital block. Users of the program can withdraw their assets back anytime.
    China

    Ant Financial extends dominance in Chinese online finance (Financial Times) Rated: AAA

    In documents reviewed by the FT Ant Financial says they now have more than 620 million users and their wealth management business has $345bn in assets under management; the information was put together for investors as the fintech company looks to raise $10bn of new capital; reports say the round is already oversubscribed and would value Ant Financial at more than $160bn

    European Union

    Hermes launches European Direct Lending Fund (AltFi News) Rated: A

    Hermes Investment Management has launched the Hermes European Direct Lending following on from the launch of a UK direct lending fund in 2016.

    Also headed by Patrick Marshall, Hermes head of private debt & CLOs, the European focused direct lending fund aims to offer institutional investors access to stable, low-correlated returns from high-quality, senior-secured loans.

    These loans are typically to middle-market businesses in the UK and Europe, with a focus on Scandinavia, Germany, Benelux and Ireland.

    Lendix Appoints Luuc Mannaerts As New CEO of Lender Nederland (Crowdfund Insider) Rated: B

    Earlier this week, France-based online lending platform Lendix announced it has appointed Luuc Mannaerts as the new CEO of Lender Nederland, Lendix’s Dutch subsidiary. According to the online lender, Mannaerts has more than 20 years of experience in the Dutch and European banking sector.

    Prior to joining Lendix, Mannaerts was CEO of ABN AMRO Commercial Finance, an ABN AMRO subsidiary with over 500 employees and specializing in SME finance in the Netherlands, the UK, France, and Germany. Lendix also revealed that thanks to his background, Mannaerts has specialized knowledge of the Dutch SME fabric

    International

    PayPal Agrees to Buy European Fintech Startup iZettle for About $ 2.2 Billion (Wall Street Journal) Rated: AAA

    PayPal Holdings Inc. has agreed to buy European financial-technology startup iZettle AB for about $2.2 billion, a move that would catapult the U.S. digital-payments giant into hundreds of thousands of brick-and-mortar retailers around the world.

    The acquisition, the largest in PayPal’s history, sets up a showdown between the San Jose, Calif., company and Jack Dorsey’s Square Inc.

    Bitcoin is steroids for fintech startups that big banks are afraid to touch (Quartz) Rated: AAA

    Making money by trading bitcoin, whose price has fallen by about 40%this year, has been difficult lately. But startups that provide services supporting crypto markets are faring much better. Companies like Revolut, a payment app, and Robinhood, a mobile broker, scoredlegions of new customers after they added buying and selling of digital tokens to their services.

    TransferGo, a remittance company, is another fintech upstart that plans to offer crypto trading to customers. CEO Daumantas Dvilinskas says users were asking for ways to buy digital assets—about 4,000 people pre-registered for the service in just a few hours. The London-based firm, which announced today that it raised an additional $10 million from venture capital investors, will soon allow customers to buy and sell bitcoin, ethereum, XRP, litecoin, and bitcoin cash.

    India

    Fintech Startup Open Raises Pre-Series A Funding (Inc42) Rated: AAA

    Bengaluru-based fintech startup Open Financial Technologies has raised an undisclosed amount of pre-series A funding led by Unicorn India Ventures and Recruit Co. Ltd, through its investment subsidiary RSP India Fund LLC.

    Existing investors ISME-ACE and Vaibhav Domkundwar’s BetterCapital AngelList syndicate also participated in the round.

    How has lending Money to SME evolved in India? (The Indian Wire) Rated: A

    According to a report by Planning Commission of India, the MSME sector comprises 30 million establishments. It generates employment for 70 million people, manufactures over 6000 products, and contributes 45% to manufacturing output and 40% to exports. These statistics validate the fact that MSME sector is the backbone of the Indian economy.

    There are several reasons why small and medium-size enterprises are unable to secure easy and quick business loans in India:

    • They do not have hard assets to mortgage, which disqualifies them from loans offered by most credit channels.
    • They do not have documented credit scores to assess their creditworthiness.
    • The loan application process in banks and other mainstream financial institutions is very tedious.

     

    Asia

    Validus, Lighthouse Canton launch S$ 20m SME financing fund (The Business Times) Rated: A

    VALIDUS Capital and Lighthouse Canton Group launched a S$20 million fund to finance small and medium enterprises (SMEs) in Singapore on Friday, and hope to grow the fund to S$200 million in the next three years.

    The LCV Trade Finance Fund will invest in loans that originate from Validus’ peer-to-peer lending platform.

    Africa

    Why the Spreading Network of Fibre Optic Cables Carries So Much Hope for Africa (Equities) Rated: AAA

    The growing fibre infrastructure also has a direct impact on labour markets across the continent as the demand for specialized technicians and engineers increases. Plus, because fibre gives users and businesses access to more bandwidth, this technology is helping spur growth for small businesses directly and indirectly.

    To illustrate, online P2P lending platforms such as Kiva and Lending Club have become quite popular with small businesses around the continent that now maintain an online presence. As a result, small business owners have ready access to unsecured business lines of credit, which helps them grow outside the confines of traditional financial systems.

    Latin America

    Why Digital Transformation Is Key to Argentina’s Future (Knowledge@Wharton) Rated: AAA

    A surging U.S. dollar is playing havoc with its interest rates and the central bank pushed the key rate from 27.25% to a stunning 40% recently to support the peso. Even that was not enough to stem the run on the currency, and last week the government requested aid from the International Monetary Fund in the form of a $30 billion credit line.

    In a country that has one of the smallest financial systems in the world as a percentage of GDP (14%), some of the world’s highest interest rates, and where nearly half of the population is unbanked, the opportunities presented by digital technologies are tremendous.

    These include 123Seguro, the largest online insurance broker in Argentina, Mexico and Colombia, which is growing over 50% per year with an admittedly simple offering, and Afluenta, a peer-to-peer lending platform serving Mexico, Peru, Colombia and Argentina, and now expanding into Brazil, Chile and Uruguay.

    Authors:

    George Popescu
    Allen Taylor

    Friday February 2 2018, Daily News Digest

    Groundfloor repayment timelines

    News Comments Today’s main news: Alibaba acquires 33% stake in Ant Financial. MPL issuance grew by 100% year-over-year in Q4 2017. RateSetter prepares investors for IFISA launch. Bitbond launches alt investment fund with 1741 Fund Management. Today’s main analysis: An empirical analysis of Groundfloor’s loan vintages. International P2P lending volumes for January 2018. Today’s thought-provoking articles: The effect of […]

    Groundfloor repayment timelines

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    India

    Asia

    Africa

    News Summary

    United States

    PeerIQ 4Q17 securitization tracker shows growth of marketplace lending industry (Bankless Times), Rated: AAA

    Ten marketplace lending securitizations priced this quarter totaled $4.4 billion, a record for quarterly issuance, head of research Ashish Dole said. That is 100 per cent growth in issuance over the same quarter in 2016. Cumulative issuance is now $28.2 billion from 106 deals.

    THE EFFECT OF ORIGINATION GROWTH ON QUALITY: AN EMPIRICAL ANALYSIS OF LOAN VINTAGES (Groundfloor), Rated: AAA

    As we addressed those limitations by qualifying our offering with the SEC and raising our first round of venture capital funding in 2015, new critics emerged to say that while we might be able to lend in a local market at a small scale, we could never lend nationwide in very large numbers without compromising loan quality. In 2016, we set out to build a lending operations team (including risk management, underwriting, and asset management) with the professional expertise, policies, tools and processes to do just that. Our aim was to improve loan quality and volume simultaneously, well beyond our home market.

    How have we done?

    Vintages

    Vintage A is composed of 88 relatively small, mostly local Atlanta-area loans originated during Groundfloor’s formative years, a period of 30 months (2.5 years).

    Vintage B, by contrast, is composed of 222 loans that were originated following our addition and application of greater lending expertise. This vintage is more than 2.5X larger, and was originated over the course of 24 months (two years, a 20% shorter period of time).

    Source: Groundfloor

    Performance Measure #2: Timeliness of Repayment

    For each vintage, we analyzed when loans repaid in relation to their maturity dates. Here is a comparison of the timeliness of repayment for Vintage A and Vintage B, with percentages provided to break down the share of repaid loans.

    Source: Groundfloor

    Here is a snapshot of the situation as of December 31, 2017:

    Source: Groundfloor

    Juniper Square raises $ 6M for its real estate investment platform (TechCrunch), Rated: A

    Juniper Square, which today announced it has raised a $6 million Series A round led by Felicis Ventures, is tackling the real estate investment side by helping investment managers raise and manage outside capital for their projects.

    Today’s funding round brings the company’s total funding to date to $8 million; the company plans to use the new influx of capital to accelerate its product development and grow its team to better service its user base.

    Overstock Introduces Robo-Advising Investment Platform tZERO Advisors (Crowdfund Insider), Rated: A

    Overstock.com, Inc. (NASDAQ:OSTK) has introduced a digitally-driven investment platform (aka robo-advising), presented by tZERO Advisors. The service is accessible to investors through the online retailer’s FinanceHub. For a monthly fee of $9.95, investors can either select from a group of pre-established Adaptive Dynamic Portfolios matched to their investment profiles, or create a customized blend of these portfolios.

    States mull loosening of laws in response to CFPB payday rule (American Banker), Rated: A

    The Consumer Financial Protection Bureau’s payday loan rule was supposed to reduce the number of Americans who get mired in debt they can’t afford.

    But in an ironic twist, the 4-month-old rule is being used in state legislatures to justify the creation of a new category of loans that would be even costlier for many borrowers.

    One such bill in Florida has zipped through three legislative committees in recent weeks. The Indiana House of Representatives voted to pass a similar measure Wednesday.

    Bradley Strock, PayPal CIO, Joins Elevate’s Board of Directors (BusinessWire), Rated: A

    Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that Bradley Strock has joined its Board of Directors, effective immediately.

    Mr. Strock joined PayPal in 2011 and since 2014 has been its Chief Information Officer.

    Chase is using memes and GIFs to bring millennials to QuickPay (Tearsheet), Rated: A

    JPMorgan is focusing its Zelle efforts on millennials, despite the platform outwardly claiming it’s not targeting that age group.

    Chase will soon roll out an animated GIF campaign on social media as the second part of its Quick Pay with Zelle campaign.

    With Chase QuickPay with Zelle, they can set recurring payments so you never wait for rent again. The best part? It’s already in your Chase Mobile app.  href="https://t.co/tQyDUm75Hf">pic.twitter.com/tQyDUm75Hf

    In 2017 Chase saw a nearly 50 percent increase in p-to-p transactions — which includes all transactions before and after it joined the Zelle network — and a 15 percent increase in enrollments.

    On Monday Zelle reported it transacted $75 billion across its member banks in 2017. Venmo processed $30 billion in the same period.

    Subcommittee hearing looks at challenges, opportunities with fintech (Financial Regulation News), Rated: A

    The House Subcommittee on Financial Institutions and Consumer Credit convened this week to discuss opportunities and challenges in the financial technology, or fintech, market.

    “From online lending and payment companies to blockchain and cryptocurrencies, advances in financial technology are changing the way financial markets work and how consumers access credit,” Subcommittee Chairman Blaine Luetkemeyer (R-MO) said.

    “Fintech lenders present an opportunity to expand credit access and quality. Although such lenders should be subject to appropriate regulation, the regulation must work with the fundamental economic reality of the market,” said Brian Knight, director of the program on financial regulation and senior research fellow at Mercatus Center, George Mason University. “Ensuring that regulations do not burden fintech lenders more heavily than their bank competitors are burdened and that the validity of their loans is not in doubt are important steps toward helping realize the promises of innovation.”

    EquityBuild Launches New Website Showcasing Their New Revolutionary Hybrid Capital Fund (PR Web), Rated: A

    EquityBuild announces the launch of their completely new website and newest investment product EquityBuild Fund.This site is dedicated to the company’s new revolutionary hybrid capital fund only available on their platform.

    How to boost your monthly income: The easy way (Augusta Free Press), Rated: A

    Safe investments are a real thing, and there cannot be a more secure way of investing in interest rates at a lending club. However, the alternative for which you must search is a peer-to-peer lending platform, where investors finance loans and then get interest rates as high as 10% on a yearly basis.  For instance, you could start with an initial deposit of $2,500, as the starting investment rate is 25%.

    Cryptocurrency passive income is a thing – And you should try it

    • Decred – Decred is a self-funded crypto platform, where investors have a share of the platform’s currency even at the very beginning.
    • AKR – is a mining platform which offers each investor, even at the beginning of their journey a “delegated proof of work”. It works literally all around the clock and you virtually have to put NO EFFORTS.
    • NEO – another passive crypto income for those searching to round a bit their monthly income. The network works on “Gas” – this is the name of this small cryptocurrency.

    Square shares climb after the payments company launches bitcoin trading for most users (CNBC), Rated: B

    Nearly all users of Square‘s Cash payments app can now buy and sell bitcoin on the platform, CEO Jack Dorsey announced Wednesday.

    The service will not be available for customers in New York state, Georgia, Wyoming and Hawaii, according to Square’s website.

    LendingPoint Names Antonio Martino as New Chief Financial Officer (BusinessWire), Rated: B

    LendingPoint, the online balance sheet lender and provider of the LoanHero point of sale financing platform, today announced that Antonio Martino has joined the company as its Chief Financial Officer (CFO).

    Martino is a financial industry leader with more than 25 years of experience spanning 10 countries. Most recently he was Director, Citi Corporate Treasury, where he had global oversight roles within the asset liability management and balance sheet management processes for Citibank, N.A. Previously, Martino served as CFO of Citibank in Turkey and across Central Europe, with roles in Istanbul and Budapest, Hungary. In addition, Martino was Finance Director of Citibank Poland’s consumer banking division in Poland and Vice President of Finance within Citibank credit card business in Canada. Martino started his career in public accounting with Ernst & Young.

    United Kingdom

    RateSetter starts preparing investors for IFISA launch (P2P Finance News), Rated: AAA

    RATESETTER has begun emailing existing investors to get them ready for the launch of its Innovative Finance ISA (IFISA) this month.

    The peer-to-peer lender sent messages to its customers on Thursday revealing that the IFISA would be made available to investors in the order they opened accounts.

    Innovative Isas finally take off (MoneyWeek), Rated: A

    The new innovative finance individual savings accounts (IF Isas) raised just £17m in the 2016-2017 tax year, their first year of operation, but the figure for 2017-2018 looks set to be a lot higher, says HM Revenue & Customs. IF Isas enable savers to use their annual Isa allowance to invest through peer-to-peer (P2P) lending platforms, which match investors looking for income with borrowers who need a loan.

    In all, more than 30 platforms now offer the product, and providers report high demand – so much so that the market’s potential size in 2017/2018 may be limited only by the platforms’ ability to source enough borrowers who want to take out loans from investors wanting to lend.

    Folk2Folk launches local lending movement (Bridging&Commercial), Rated: A

    The local lending movement has been created by the peer-to-peer lending platform to build and sustain socially and financially successful rural communities.

    Folk2Folk intends to incorporate this ethos into its behaviour and activity.

    The movement involves the participation and support of the platform’s lenders and borrowers, legal and accountancy partners, local authorities, MPs, chambers of commerce, local enterprise partnerships, surveyors, land agents, local cooperatives, leisure and tourism platforms, interest groups, community associations, charities, business groups and banks.

    Novae GC joins payday lender Wonga after company takeover (The Lawyer), Rated: A

    Payday loan company Wonga has hired a new general counsel following the departure of Bill Flynn after nearly three years.

    Goji celebrates first year of investment bond (Bridging&Commercial), Rated: B

    Goji has reported a strong first year for its diversified lending bond, which has yielded a net return of 6% to investors.

    The Business Funding Show closes the funding knowledge gap (KCW Today), Rated: B

    The only funding exhibition in the UK and EU is returning to London for its third year. The Business Funding Show will be held on 22nd February 2018 at East Wintergarden and will connect entrepreneurs to top funders and service providers through conference talks,  an exhibitor showcase, and one-to-one investment clinics.

    BFS aims to bring awareness to entrepreneurs about alternative funding options, from crowdfunding and peer-to-peer lending to business angels and venture capital. The event saw a 33% increase in attendance in 2017, a figure the organisers aim to surpass this year.

    China

    Alibaba nabs 33% stake in Alipay operator A (IT Brief), Rated: AAA

    With Alipay and Alipay Wallet under its umbrella, the company also runs 4 other major businesses: Yu’e Bao, Zhao Cai Bao, Ant Credit, and MYbank, a cloud based online lender the company was in the middle of establishing at the time of the name change.

    Now, Alibaba Group Holdings has announced it will strengthen its strategic relationship with Ant Financial by acquiring a 33% equity stake in the company. The parties have agreed to certain amendments to their 2014 transaction agreements to facilitate the transaction.

    Under the terms of the amended agreements, Alibaba will acquire newly-issued equity from Ant Financial in exchange for certain intellectual property rights owned by Alibaba exclusively related to Ant Financial.

    Alibaba-backed online lender MYbank owes cost-savings to home-made tech (The Star), Rated: A

    MYbank, a Chinese online lender that is an offshoot of Alibaba Group Holding Ltd, has built its business on doing things cheaply.

    The bank says it can deliver loans to borrowers across China at lightning speeds for up to 1,000 times less than it would cost brick-and-mortar banks to do so.

    MYbank employs about 300 people, half of whom are technicians.

    As a result, the cost of approving a small business loan can be as little as 2 yuan (RM1.24), compared to at least 2,000 yuan (RM1,239) at a traditional bank, according to data provided by the bank. MYbank has built its technological infrastructure with Chinese-made technology, avoiding more expensive products from companies like IBM Corp, Oracle Corp and Dell EMC, which form the network backbone for much of China’s finance sector, Huang said.

    MYbank is one of a handful of Chinese lenders – along with Tencent Holdings Ltd’s WeBank – that are founded completely with private investment. Since mid-2015, MYbank has served more than 7 million small business owners, Huang said. The bank is seeking to expand its network to include China’s 70 million to 100 million small businesses under-served by traditional financial institutions.

    The bank’s net interest margin – around 3% to 5% – is higher than those for China’s major banks, which target large state companies, Huang said.

     

    European Union

    Bitbond Launches Alternative Investment Fund in Partnership with 1741 Fund Management (Finovate), Rated: AAA

    Peer-to-peer small business financing platform Bitbond has entered into a partnership with 1741 Fund Management to launch an alternative investment fund.

    European Alternative Finance Market Expanded by 41% in 2016, P2P Consumer Lending Leads (Crowdfund Insider), Rated: AAA

    The European online alternative finance market grew by 41 per cent to 7.7 billion euros in 2016, according to the 3rd annual European Alternative Finance Industry Benchmarking Report by the Cambridge Centre for Alternative Finance. The report entitled “Expanding Horizons” indicates that online alternative finance showed growth in new areas across Europe.

    For country-specific numbers, click here.

    Among other findings of the report:

    • Institutionalization grew considerably from 2015 to 2016, with 45 per cent of peer-to-peer consumer lending and 29 per cent of peer-to-peer business lending funded by institutions such as banks, pension funds and asset management firms.

    • Online alternative finance for business continued to grow, providing 1.14 billion euros to more than 14,000 businesses throughout Europe. Debt models including peer-to-peer business lending accounted for 67 per cent of business finance, while equity models accounted for 27 per cent.

    • Estonia ranked first for alternative finance volume per capita for the second year in a row, at 63 euros, followed by Monaco (51 euros) and Georgia (28 euros).

    • Countries in which platforms believe that existing regulations are adequate are more likely to show higher levels of alternative finance per capita and a larger share of business funding.

    • While overall perceptions of regulatory adequacy are divided, the greatest discontent concerns laws governing equity-based crowdfunding

    • Two types of risk are of greatest concern to European alternative finance platforms: a potential collapse of a well-known platform due to malpractice, and fraud involving one or more high-profile transactions.

    Bob Diamond to join board of Corrado Passera acquisition vehicle (Financial Times), Rated: A

    Bob Diamond plans to join the board of a €600m acquisition vehicle chaired by Corrado Passera, which listed on Thursday, bringing together two of Europe’s best known ex-bankers to buy an Italian lender to small businesses.

    After the cash shell’s initial public offering on Thursday, Mr Passera told reporters in Milan that it had shortlisted five small Italian lenders and would complete the acquisition of one of them for up to €60m — allowing it to become a bank.

    The plan is to turn the small bank into an online lender to small businesses and a merchant bank, which will buy non-performing loans from other banks and parcel them up before selling them on to institutional investors.

     

    Italy’s SPAXS shortlists five banks in acquisition hunt (Reuters), Rated: A

    Saddled with one quarter of Europe’s nearly $1 trillion debt pile, which has rattled investor confidence in them, Italian banks have become more selective in their lending and compete to lend to low-risk firms, squeezing profit margins, while many small businesses find it hard to access funds.

    Shares in SPAXS, which will use up to 10 percent of the amount raised in the IPO for the acquisition, were 4.04 percent higher at 1038 GMT on their market debut on the alternative investment segment of the Milan bourse.

    Google and Facebook set off a second wave of fintech talent (Financial Times), Rated: A

    One cloud on the horizon, however, is Brexit. The UK’s departure from the EU could make it harder for Irish fintechs to scale up quickly through expansion into the neighbouring British market, which many of them use as an early testing ground.

    A good example of this is Plynk, a payment and messaging app aimed at young people, which was co-founded by Charles Dowd and Clive Foley in 2015, a year after Mr Dowd left Facebook. Based in the Camden Street area, Plynk last year raised €25m from investors led by Swiss Privée.

    Another start-up that aims to build a global presence from its Irish base is TransferMate, which has handled more than $10bn of cross-border payments for businesses since it set up in 2010. Last year it raised €30m from Allied Irish Banks, with plans to offer the fintech’s software to all the bank’s clients.

    By the end of this year, TransferMate expects to derive as much as half its revenue coming from clients in the US, where it has been approved by all 50 states. A third of its revenue is expected to come from European clients and a fifth from the rest of the world.

    The most successful product of Ireland’s fintech scene is actually based in San Francisco. Stripe, which provides payment services to businesses, was founded by Irish brothers Patrick and John Collison, who have become paper billionaires thanks to its rapid growth.

    Stripe has its European headquarters in Ireland, where it employs about 10 per cent of its 1,000 global staff. Iain McDougall, the company’s head of UK and Ireland, says the country’s fintech growth is being driven by “a second wave of talent in Ireland, spawned by the massive investment of Google, Apple, Facebook and Amazon in Silicon Docks”. A former Google employee himself, Mr McDougall says: “We’re starting to see some of that talent come through, not just college graduates with a couple of years experience . . . there’s now significant depth to it.”

    International

    International P2P Lending Volumes January 2018 (P2P-Banking), Rated: AAA

    This month I added Linked Finance.

    Zopa crossed the milestone of 3 billion GBP originated since launch.

    Source: P2P-Banking

    Moven To Buy US Bank, Create Joint Venture In Japan With SBI (PYMNTS), Rated: A

    According to a report in the American Banker, SBI will receive one seat on Moven’s six-member board and the companies will create a joint venture in Japan.

    Of the funding the company will receive from SBI Group, some will go toward the joint venture to sell customized Moven software for Asian banks.

    Salesforce boosts nCino global expansion plans (American Banker), Rated: A

    NCino, a vendor of cloud-based banking technology, announced a new round of funding led by Salesforce Ventures to help fund its global expansion strategy.

    The funding round led by Salesforce Ventures, the corporate investment group of Salesforce, also featured participation from another existing nCino shareholder. The amount of investment was not disclosed.

    Several countries investigating Japanese virtual coin heist (e27), Rated: B

    Takao Asayama, who is a member of the Singapore-based NEM Foundation that is behind the cryptocurrency, told reporters in Tokyo that it is working with exchanges to block the hackers from cashing out the stolen cryptocurrency. He did not name the countries involved in investigations.

    India

    Jaitley extends avenue for SME financing, bad loans in the sector now on radar (Economic Times), Rated: AAA

    As bank credit to micro, small and medium enterprises shrink, the government has decided to get innovative by getting Non-Bank Finance Companies (NBFCs) and the burgeoning fintech industry to play a larger role in financing. However, NPAs in the MSME sector would also now undergo greater scrutiny.

    “Non-Bank Finance Companies (NBFCs) stepped up financing of MSMEs after demonetization. NBFCs can be a very powerful vehicle for delivering loans under MUDRA. Refinancing policy and eligibility criteria set by MUDRA will be reviewed for better refinancing of NBFCs,” said Finance Minister Arun Jaitley while presenting the Union Budget for 2018-19.

    If we look at the NBFC segment first, it specialises in catering to sector specific financial needs covering retail; consumer and vehicle loans; micro, small and medium enterprises (MSMEs) and micro finance among others.

    Source: Economic Times

    Tech play
    Jaitly also laid out a roadmap to use data generated by the Goods and Services Tax (GST) to enhance credit availability to the SME sector.

    “It is proposed to onboard public sector banks and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link this with GSTN. Online loan sanctioning facility for MSMEs will be revamped for prompt decision making by the banks. Government will soon announce measures for effectively addressing non-performing assets and stressed accounts of MSMEs. This will enable larger financing of MSMEs and also considerably ease cash flow challenges faced by them,” said Jaitley.

    Source: Economic Times

    At end-March 2017, there were 11,522 NBFCs registered with the Reserve Bank, a number that is only bound to increase with fintech sectors like P2P being clubbed in the segment. The Economic Survey has revealed that the amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was cornered by large enterprises.

    For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.

    Indian Budget 2018: A Push for Blockchin and Cyber Tech (Bank Info Security), Rated: A

    In a move to push adoption and development of new technologies, such as machine learning, artificial intelligence and the internet of things, the finance minister announced allocation of Rs 3,073 crore for the Department of Science and Technology.

    Meanwhile, the finance minister’ pledge to encourage use of blockchain, the distributed ledger technology that supports cryptocurrencies, in payment systems has earned him accolades from some security practitioners.

    “Blockchain can be effectively used to process banking transactions. I see blockchain-enabled wallets and blockchain-enabled cards as next big thing in the payment systems,” Jyoti says. “Blockchain can provide an extra layer of cybersecurity to the payment systems, which could have led to this decision.”

    Why Blockchain?

    Blockchain has been popular among the banking industry in India. In fact, banks in India have formed a “bank chain,” an association of more than 20 banks where they discuss some typical use cases of blockchain.

    Sapan Gupta, national practice head – banking and finance, at the law firm Shardul Amarchand Mangaldas, notes: “Capitalizing on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors. Segregating the use of blockchain from crypto-currencies reflects the government’s intention to use the technology in a gradual and safe manner.”

    What do Ola, ShopClues, Practo, and Paytm feel about the budget? (Yourstory), Rated: A

    Rajat Gandhi, Founder & CEO, Faircent.com 

    “The finance minister’s budget speech reflects the government’s intent to increase the credit access for the MSME sector and women entrepreneurs under MUDRA scheme. P2P lending is using technology and new-age data, and diligently working towards taking organised credit to the non and under-banked segments of the Indian economy. This is an opportunity for the government to directly invest or co-fund through registered P2P Lending Platforms and ensure credit access for MSMEs, New-To-Credit as well as female entrepreneurs. P2P lending is an asset class ensuring flow of investments from those with surplus to those in need. Hence it’s important that the lenders are supported through tax incentives. We look forward to working with the government towards the common goal of financial inclusion.

     

    Bipin Preet Singh, Co-founder, MobiKwik 

    “A reformist budget for startups and digital India. The government’s impetus on digitising the rural hinterlands, focus on smart cities, and commitment to blockchain technology will encourage the promotion of digital payments across the country, thereby making India truly digital. Further, disallowing cash payments beyond Rs 10,000 by trusts and institutions will boost digital payments. I commend the government’s decision to reduce corporate tax to 25 percent and improve the ease of doing business by providing a unique ID for every company on lines of Aadhaar. These initiatives will benefit startups and MSMEs immensely and lay a strong foundation for a progressive India. However, the government should consider regulating cryptocurrencies than curbing their use entirely.”

    Budget 2018: 10% Long Term Capital Gain tax to benefit P2P lending players (moneycontrol), Rated: B

    Imposing 10% long-term capital gain tax on equity investments may create some level playing field for the P2P lending industry. So far, the favourable tax treatment on long-term gains on equity investments made them a preferred choice for the investors. Now, those who are ready to take higher risk for earning better returns may also think of investing in P2P lending projects which have a better risk profile as compared to equity-oriented investments.

    Asia

    Ulema council, OJK to issue fatwa on sharia-based fintech lenders (The Jakarta Post), Rated: AAA

    The Indonesia Ulema Council’s (MUI) sharia division and the Financial Services Authority (OJK) are preparing a fatwa to serve as a legal basis for the operation of sharia-based financial technology (fintech) lending institutions.

    “Many non-Muslims are also interested in sharia-based fintech financing. So it has a very large potential market,” Adiwarman said as reported by kontan.co.id.

    Since a trial run in November 2017, Investree has disbursed Rp 2.7 billion (US$189,000) in sharia-based financing.

    Africa

    Five ways to finance your dream (Standard Digital), Rated: AAA

    It found that in 2015, Kenya and South Africa raised $16.7 million (Sh1.7 billion) and $15 million (Sh1.5 billion), respectively, in financing from various online channels. However, unlike in South Africa, most of the money raised using these alternative financing platforms in Kenya came from foreigners.

    Overall, a total of $62.2 million (Sh6.4 billion) was raised across Africa, with more than 75 per cent of this money going towards funding start-ups and SMEs.

    1. Equity-based crowdfunding
    2. Peer-to-peer business lending
    3. Debt-based securities
    4. Donation-based crowdfunding
    5. Reward-based crowdfunding

    Authors:

    George Popescu
    Allen Taylor

    Tuesday January 30 2018, Daily News Digest

    France crowdfunding

    News Comments Today’s main news: WeWork, SoFi partner on student debt. Marlette Funding closes largest securitization in company history. Kabbage targets larger businesses with expanded credit lines. LendInvest adds 200 brokers to buy-to-let panel. Signicat builds out identity assurance as a service with $2M fundraise. Today’s main analysis: France’s alternative finance sector grows by 50% while equity crowdfunding shrinks. […]

    France crowdfunding

    News Comments

    United States

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    International

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    News Summary

    United States

    WeWork Joins Forces With SoFi to Help Employees & Members to Tackle Student Debit (Crowdfund Insider), Rated: AAA

    Online lending platform SoFi announced on Monday that it has joined forces with WeWork to help WeWork’s more than 3,000 employees and over 175,000 members take on their student loan debt. The lender revealed that this is its first SoFi At Work partnership to extend beyond a company’s employees to include customer base.

    How Twitter’s Noto Found Room at SoFi (Market Realist), Rated: AAA

    Twitter’s (TWTR) outgoing COO (chief operating officer), Anthony Noto, quietly worked out his exit from the company. When the Wall Street Journal broke the story that he was considering taking up the job of CEO (chief executive officer) at SoFi, both Twitter and SoFi were tight-lipped at the time.

    But only a few days later, Twitter confirmed that Noto was departing, and SoFi confirmedthat Noto was joining its team. Who made room for Noto at SoFi, and what might follow after he leaves Twitter?

    Given SoFi’s ambitions and the ambitions of Square (SQ), the company run by Twitter CEO Jack Dorsey, Noto and Dorsey appear to be on a competition course. SoFi and Square both have ambitions of becoming full-service banks. And Noto, a former Goldman Sachs (GS) banker, has made it clear that this is a course he would like to pursue once he joins SoFi.

    Square, which supplied $303 million in loans to customers in 3Q17 and has supplied over $1.8 billion in loans overall, already faces competitive pressures from Amazon.com (AMZN) and PayPal (PYPL) in the alternative lending market.

    Source: Market Realist

    Marlette Funding Closes Largest Securitization Transaction in Company History (BusinessWire), Rated: AAA

    Marlette Funding, LLC, the parent company of Best Egg, announced today it closed its fifth proprietary “MFT” securitization. Approximately $495 million of Best Egg loans were financed via $464.3 million of MFT 2018-1 Notes with four classes and one class of Certificates, with certain loan sellers retaining risk on a portion of the Notes and/or Certificates.

    This is the first securitization of 2018 bringing the total program issuance to date to $1.7B, with capital provided by a broad set of investors. The transaction was significantly oversubscribed, upsized and successfully priced, reflecting Marlette’s differentiated product offering and superior credit performance. Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Citi, Deutsche Bank and Morgan Stanley. The Class A, B, C and D fixed-rate Notes were rated AA (sf), A (sf), BBB (sf) and BB (sf), respectively, by Kroll Bond Rating Agency (KBRA).

    Year over year, Best Egg has demonstrated impressive scalability – 66% year-over-year growth in originations with only 9% growth in year-over-year fixed operating expenses and 29% reduction in marketing cost per loan.

    Why banks should rethink their fee models (Tearsheet), Rated: AAA

    If free checking accounts aren’t already a thing of the past, perhaps they should be, now that consumers are demonstrating that if something is valuable to them, they’ll pay for it.

    About 77 percent of people have a “free checking account” at their bank, according to a studyfrom Cornerstone Advisors’ Ron Shevlin published last week. But nearly every free checking account holder paid at least one fee in the 12 months leading up to the survey. Out of 1,555 surveyed, 26 percent paid a third-party bank ATM fee and 25 percent paid an overdraft fee. They also paid fees to replace lost or misplaced ATM and debit cards, rush fees for those replacements, non-sufficient funds fees, wire transfer fees, international transaction fees, fees for overdraft protection and “extended overdrawn balances,” for stop payments and for statement copies, check copies and check image services.

    But banks have been reporting flat fee income for the past six quarters. Service charges on deposit accounts have hardly moved in several years and banks are changing their overdraft programs to improve customer relationships, which eats into that fee income.

    Bank of America has one of the most competitive mobile and digital banking offerings and no longer needs to give people an incentive to bank digitally instead of at branches (those were the terms of the account; those who wanted branch banking and paper statements paid an $8.95 monthly fee that was waived for customers who agreed to do all their banking digitally).

    Almost 60 percent of people indicated they would consider switching accounts if their primary financial institution offered a hypothetical Amazon-like bundled checking account — which would include basic checking account services plus cell phone damage protection, ID theft protection, roadside assistance, travel insurance and product discounts — for a $5 to $10 monthly fee, Shevlin found.

    Kabbage expands credit line, targeting larger businesses (AltFi), Rated: AAA

    After previously securing a $200m asset-backed revolving credit facility from Credit Suisse in 2017, Kabbage has announced it will be offering lines of credit of up to $250k in an effort to attract larger businesses.

    The expanded product will provide large businesses with greater purchasing power for longer-term investments, and is the largest credit line available from any online lender yet.

    A recent survey of 800 small businesses conducted by the platform showed that more than 73 per cent of businesses expect to increase their revenue by more than 20 per cent in 2018.

    The Tao of Rob Frohwein (LinkedIn), Rated: A

    I had the pleasure of interviewing Rob Frohwein, the CEO and co-founder of Kabbage, for the 11:FS Connection Interrupted podcast.

    “Getting easy access to your data allows you to see your data and know if someone has compromised it.”

    “One of our goals is to make it more advantageous to be a small business than a large business.”

    Or listen here.

    Elevate Appoints Former PayPal, loanDepot Executive Brian Biglin as Chief Credit Officer (BusinessWire), Rated: A

    Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the appointment of Brian Biglin as Chief Credit Officer, effective immediately. Elevate also said it has granted inducement stock awards as part of Mr. Biglin’s employment.

    He served as Chief Credit Officer at Bill Me Later when it was acquired in 2008 by PayPal, and he continued until 2014 as Chief Credit Officer at PayPal, where he helped grow the portfolio from $400 million to $6 billion and managed credit through the Great Recession. Mr. Biglin subsequently was Chief Risk Officer at loanDepot.com and at Intuit. At loanDepot he built a new consumer lending platform and helped create the first personal loan securitizations for the company; at Intuit he reduced fraud losses, improved customer experience, overhauled operations and increased efficiencies.

    California judge issues stunning rebuke to CFPB (RESPA News), Rated: A

    The Consumer Financial Protection Bureau’s (CFPB) first enforcement action against an online lender has ended with a judicial rebuke nearly as stunning as its case against the Accrediting Council for Independent Colleges and Schools.

    Although a California district court ruled in favor of the CFPB in the case, it declined to confirm the CFPB’s request for restitution from the lender defendants, instead cutting the penalty award to a Tier One violation of the Consumer Financial Protection Act.

    Should you crowdsource to buy a home? (Bankrate), Rated: B

    Only a small handful of companies currently offer mortgages through this method. One of most well-established, SoFi, offers mortgages in 29 states and the District of Columbia through its peer-to-peer lending platform, which is a type of crowdsourcing where individual investors contribute through a lending platform, and in return earn interest on their investment, paid for by the borrower.

    Feather the Nest offers a crowdfunding registry, where friends and family can donate toward your real estate goals. Every donation to your registry is charged a percentage of the amount given as a transaction fee.

    Best Investment Funds Options For 2018 (FX Daily Report), Rated: B

    #8: Peer to Peer Lending

    Peer-to-peer lending platforms such as the Lending Club allow you to loan small amounts of money to individuals and earn a decent return of 6 percent or more. As a peer-to-peer lending investor, you are helping other people reach their goals. The good thing about this is that you are not giving large amounts of money to people who you do not know at all. According to experts, the benefits of investing in peer-to-peer lending platforms include the following:

    • Easy to sign up and started
    • Five to Seven percent returns
    • Starting investment can be as small as $1,000

    House Financial Services Committee to hold Jan. 30 hearing on fintech marketplace (The National Law Review), Rated: B

    On January 30, 2018 at 10 a.m., the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee will hold a hearing, “Examining Opportunities and Challenges in the Financial Technology (“Fintech”) Marketplace.”

    The Committee Memorandum states that the hearing “will examine the current regulatory landscape [for fintech], the need to amend or modernize the regulatory landscape or the necessity to amend existing financial laws or develop new legislative proposals that would allow financial services entities to use fintech to deliver new products and services to consumers.”

    United Kingdom

    Over 200 brokers join LendInvest BTL panel (Bridging&Commercial), Rated: AAA

    LendInvest has formed a national panel made up of over 200 brokers, packagers and other introducers, following the launch of its buy-to-let product.

    The lender launched the BTL product – which is only available via intermediaries – in late November.

    LendInvest believes that assembling a panel of this size in just 10 weeks demonstrates the appetite brokers have to get behind the product.

    Ranger Direct Lending Expects Princeton Arbitration Decision Soon (London South East), Rated: B

    Ranger Direct Lending Fund PLC said on Monday it expects arbitration against Princeton Master Fund to conclude by mid-April.

    European Union

    Signicat Raises $ 2 Million to Build Out its Identity Assurance as a Service Technology (Finovate), Rated: AAA

    Identity Assurance as a Service (IDAaaS) innovator Signicat has won phase two funding from Horizon 2020, the EU framework program for research and innovation. The $2 million grant (€1.6 million) will enable Signicat to continue development of its IDAaaS toolbox for use in Europe, and takes the company’s total funding to $3.9 million.

    France’s Alternative Finance Grows by 50% – Equity Crowdfunding Shrinks (Crowdfund Insider), Rated: AAA

    The annual Alternative Finance & Crowdfunding Barometer compiled by KPMG for the French Crowdfunding Association (Financement Participatif France, FPF) shows that in 2017 the French Alternative Finance market grew by 50%, driven by SME lending growth, and came close to the billion euro mark, at €940 million. Crowdfunding, as a subcategory of alternative finance open to retail investors, grew slightly slower at 44%, and equity crowdfunding shrank.

    • Institutional SME lending grew by 157% to €215 million,
    • SME crowdlending and crowdinvesting in SME debt grew by 102% to €195 million.

    The market is heavily concentrated, with the top 5 platforms, Lendix, Credit.fr, Lendosphère, Unilend and Lendopolis accounting for more than 80% of the loans originated. Credit.fr, which was recently acquired by investment firm Tikehau Capital is growing fastest. Funded for more than 80% by non-retail money, Lendix captures more than half of the market. Most recently, the platform raised €120 million of a new €200 million investment fund designed to finance SME loans from 2018 on.

    Source: Crowdfund Insider

    Consumer Lending Decelerates

    Alternative consumer lending grew only by 17%, from €197 million to €231 million, three times more slowly than in the previous year. The market is dominated by Younited Credit which originated €227 million worth of consumer loans in France, Italy and Spain in 2017. Younited’s growth remained high in terms of number of loans (nearly +50%) but the growth in euros was slower because the company introduced smaller €1,000 to €3,000 loans and stopped promotional campaigns that were waving fees on large loans.

    Source: Crowdfund Insider

    Equity Crowdfunding Shrinks

    French equity crowdfunding raised a mere €58 million, 15% less than in the past year. 

    Read the full report here.

    3 things that could drive fintech investment in Europe through the roof (again) (PitchBook), Rated: A

    Last year, venture investment in European fintech companies more than doubled YoY to €2.8 billion, even though the deal count remained almost flat, per the PitchBook Platform.

    The jump in money invested was boosted by some monster deals, including rounds of well over $200 million each into foreign exchange unicorn TransferWise and student loans startup Prodigy Finance.

    Pan-European Marketplace Investly Now Seeking £500,000 on Seedrs (Crowdfund Insider), Rated: A

    Investly, an Estonian peer-to-peer (P2P) lending platform, is now seeking £500,000 through its equity crowdfunding campaign on Seedrs.

    International

    CB Insights is working with The New York Times to identify the best VC professionals. (CB Insights), Rated: AAA

    We’re exploring additional rankings for other types of investors:

    • Top Corporate VCs
    • Top Seed-Stage VCs Brand
    • Top VCs by Region (Asia & Europe)

    Ranking Algorithm Factors:

    • Performance Persistence
    • Network Centrality
    • Brand
    • Investment Discipline
    • Illiquid Portfolio Strength

    The Top 20 Venture Capitalists Worldwide (The New York Times)

    FinTech, RegTech and SupTech (Finextra), Rated: A

    Two–thirds of consumers between the ages of 18 and 29 have a mobile phone and use mobile banking.

    FinTech improves the lending process by reducing the cost of underwriting through automation of the credit application process. That process includes the review of the credit application, credit score monitoring, and the collection of financial documents.

    Credit standards and trading limits are monitored more efficiently as Fintech applications can be created that employ customized credit standards per the bank’s risk-management policies

    Just as FinTech helps institutions manage their internal credit and trading standards, RegTech enhances their ability to adhere to the government’s regulatory rules set out by various agencies and The Federal Reserve Bank.

    Fewer fines and litigation costs are possible with RegTech applications.

    Adapting to new regulations faster can be achieved with RegTech as financial institutions can monitor changes in regulations in real-time.

    Regulatory reporting times improve with RegTech.

    Australia

    IFM Investors ups stake in digital provider Decimal (Private Banker International), Rated: A

    IFM Investors, an Australian fund manager, has increased its stake in local digital advice provider Decimal to 15%.

    IFM acquired the additional stake through the placement of 28,900,000 ordinary shares at $0.03 per share.

    India

    Why P2P should be empowered to fill the void in SME financing (ET Rise), Rated: AAA

    The Economic Survey 2017-18 tabled in the Parliament on Monday delivered an unsurprising, but troubling figure. The amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was pocketed by large enterprises. For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.

    RBI data show that NBFCs have increased their lending to the SME sector by giving out about Rs 680 crore to the micro, small and medium enterprises compared to Rs. 480 crore in 2016. These figures do not include the loans extended to SMEs by the P2P industry, which has been recently classified as an NBFC.

    In 2015-16 more than 10,000 businesses across UK benefitted and an estimated 30,000 new jobs were created due to UK government’s favorable policies for the P2P lending sector.

    India’s flourishing fintech sector is craving the finance minister’s attention (Quartz), Rated: A

    While the Narendra Modi government and the Reserve Bank of India (RBI) have already laid down regulations for certain segments, such as peer-to-peer lending, others like cryptocurrencies and online lending startups are yet to be regulated. Such regulation may mean stricter compliance, but the management at these firms believe it will lend legitimacy to the industry, which is expected to be worth $2.4 billion by 2020. That, in turn, will help them grow faster.

    Asia

    Indonesia’s fintech lending boom exploits shortfall in bank loans (Reuters), Rated: AAA

    Wimboh Santoso, head of Indonesia’s financial regulator (OJK), said while the trend was still a drop in the ocean of overall lending, more than 250,000 people had taken out loans through fintech. Around 30 P2P firms had extended 2.6 trillion rupiah ($193.8 million) in lending as of January 2018, compared with just 247 billion rupiah of lending in December 2016. Another 36 more firms were waiting to be approved, he added.

    George Popescu
    Allen Taylor

    Tuesday January 30 2018, Daily News Digest

    France crowdfunding

    News Comments Today’s main news: WeWork, SoFi partner on student debt. Marlette Funding closes largest securitization in company history. Kabbage targets larger businesses with expanded credit lines. LendInvest adds 200 brokers to buy-to-let panel. Signicat builds out identity assurance as a service with $2M fundraise. Today’s main analysis: France’s alternative finance sector grows by 50% while equity crowdfunding shrinks. […]

    France crowdfunding

    News Comments

    United States

    United Kingdom

    European Union

    International

    Australia

    India

    Asia

    Africa

    News Summary

    United States

    WeWork Joins Forces With SoFi to Help Employees & Members to Tackle Student Debit (Crowdfund Insider), Rated: AAA

    Online lending platform SoFi announced on Monday that it has joined forces with WeWork to help WeWork’s more than 3,000 employees and over 175,000 members take on their student loan debt. The lender revealed that this is its first SoFi At Work partnership to extend beyond a company’s employees to include customer base.

    How Twitter’s Noto Found Room at SoFi (Market Realist), Rated: AAA

    Twitter’s (TWTR) outgoing COO (chief operating officer), Anthony Noto, quietly worked out his exit from the company. When the Wall Street Journal broke the story that he was considering taking up the job of CEO (chief executive officer) at SoFi, both Twitter and SoFi were tight-lipped at the time.

    But only a few days later, Twitter confirmed that Noto was departing, and SoFi confirmedthat Noto was joining its team. Who made room for Noto at SoFi, and what might follow after he leaves Twitter?

    Given SoFi’s ambitions and the ambitions of Square (SQ), the company run by Twitter CEO Jack Dorsey, Noto and Dorsey appear to be on a competition course. SoFi and Square both have ambitions of becoming full-service banks. And Noto, a former Goldman Sachs (GS) banker, has made it clear that this is a course he would like to pursue once he joins SoFi.

    Square, which supplied $303 million in loans to customers in 3Q17 and has supplied over $1.8 billion in loans overall, already faces competitive pressures from Amazon.com (AMZN) and PayPal (PYPL) in the alternative lending market.

    Source: Market Realist

    Marlette Funding Closes Largest Securitization Transaction in Company History (BusinessWire), Rated: AAA

    Marlette Funding, LLC, the parent company of Best Egg, announced today it closed its fifth proprietary “MFT” securitization. Approximately $495 million of Best Egg loans were financed via $464.3 million of MFT 2018-1 Notes with four classes and one class of Certificates, with certain loan sellers retaining risk on a portion of the Notes and/or Certificates.

    This is the first securitization of 2018 bringing the total program issuance to date to $1.7B, with capital provided by a broad set of investors. The transaction was significantly oversubscribed, upsized and successfully priced, reflecting Marlette’s differentiated product offering and superior credit performance. Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Citi, Deutsche Bank and Morgan Stanley. The Class A, B, C and D fixed-rate Notes were rated AA (sf), A (sf), BBB (sf) and BB (sf), respectively, by Kroll Bond Rating Agency (KBRA).

    Year over year, Best Egg has demonstrated impressive scalability – 66% year-over-year growth in originations with only 9% growth in year-over-year fixed operating expenses and 29% reduction in marketing cost per loan.

    Why banks should rethink their fee models (Tearsheet), Rated: AAA

    If free checking accounts aren’t already a thing of the past, perhaps they should be, now that consumers are demonstrating that if something is valuable to them, they’ll pay for it.

    About 77 percent of people have a “free checking account” at their bank, according to a studyfrom Cornerstone Advisors’ Ron Shevlin published last week. But nearly every free checking account holder paid at least one fee in the 12 months leading up to the survey. Out of 1,555 surveyed, 26 percent paid a third-party bank ATM fee and 25 percent paid an overdraft fee. They also paid fees to replace lost or misplaced ATM and debit cards, rush fees for those replacements, non-sufficient funds fees, wire transfer fees, international transaction fees, fees for overdraft protection and “extended overdrawn balances,” for stop payments and for statement copies, check copies and check image services.

    But banks have been reporting flat fee income for the past six quarters. Service charges on deposit accounts have hardly moved in several years and banks are changing their overdraft programs to improve customer relationships, which eats into that fee income.

    Bank of America has one of the most competitive mobile and digital banking offerings and no longer needs to give people an incentive to bank digitally instead of at branches (those were the terms of the account; those who wanted branch banking and paper statements paid an $8.95 monthly fee that was waived for customers who agreed to do all their banking digitally).

    Almost 60 percent of people indicated they would consider switching accounts if their primary financial institution offered a hypothetical Amazon-like bundled checking account — which would include basic checking account services plus cell phone damage protection, ID theft protection, roadside assistance, travel insurance and product discounts — for a $5 to $10 monthly fee, Shevlin found.

    Kabbage expands credit line, targeting larger businesses (AltFi), Rated: AAA

    After previously securing a $200m asset-backed revolving credit facility from Credit Suisse in 2017, Kabbage has announced it will be offering lines of credit of up to $250k in an effort to attract larger businesses.

    The expanded product will provide large businesses with greater purchasing power for longer-term investments, and is the largest credit line available from any online lender yet.

    A recent survey of 800 small businesses conducted by the platform showed that more than 73 per cent of businesses expect to increase their revenue by more than 20 per cent in 2018.

    The Tao of Rob Frohwein (LinkedIn), Rated: A

    I had the pleasure of interviewing Rob Frohwein, the CEO and co-founder of Kabbage, for the 11:FS Connection Interrupted podcast.

    “Getting easy access to your data allows you to see your data and know if someone has compromised it.”

    “One of our goals is to make it more advantageous to be a small business than a large business.”

    Or listen here.

    Elevate Appoints Former PayPal, loanDepot Executive Brian Biglin as Chief Credit Officer (BusinessWire), Rated: A

    Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the appointment of Brian Biglin as Chief Credit Officer, effective immediately. Elevate also said it has granted inducement stock awards as part of Mr. Biglin’s employment.

    He served as Chief Credit Officer at Bill Me Later when it was acquired in 2008 by PayPal, and he continued until 2014 as Chief Credit Officer at PayPal, where he helped grow the portfolio from $400 million to $6 billion and managed credit through the Great Recession. Mr. Biglin subsequently was Chief Risk Officer at loanDepot.com and at Intuit. At loanDepot he built a new consumer lending platform and helped create the first personal loan securitizations for the company; at Intuit he reduced fraud losses, improved customer experience, overhauled operations and increased efficiencies.

    California judge issues stunning rebuke to CFPB (RESPA News), Rated: A

    The Consumer Financial Protection Bureau’s (CFPB) first enforcement action against an online lender has ended with a judicial rebuke nearly as stunning as its case against the Accrediting Council for Independent Colleges and Schools.

    Although a California district court ruled in favor of the CFPB in the case, it declined to confirm the CFPB’s request for restitution from the lender defendants, instead cutting the penalty award to a Tier One violation of the Consumer Financial Protection Act.

    Should you crowdsource to buy a home? (Bankrate), Rated: B

    Only a small handful of companies currently offer mortgages through this method. One of most well-established, SoFi, offers mortgages in 29 states and the District of Columbia through its peer-to-peer lending platform, which is a type of crowdsourcing where individual investors contribute through a lending platform, and in return earn interest on their investment, paid for by the borrower.

    Feather the Nest offers a crowdfunding registry, where friends and family can donate toward your real estate goals. Every donation to your registry is charged a percentage of the amount given as a transaction fee.

    Best Investment Funds Options For 2018 (FX Daily Report), Rated: B

    #8: Peer to Peer Lending

    Peer-to-peer lending platforms such as the Lending Club allow you to loan small amounts of money to individuals and earn a decent return of 6 percent or more. As a peer-to-peer lending investor, you are helping other people reach their goals. The good thing about this is that you are not giving large amounts of money to people who you do not know at all. According to experts, the benefits of investing in peer-to-peer lending platforms include the following:

    • Easy to sign up and started
    • Five to Seven percent returns
    • Starting investment can be as small as $1,000

    House Financial Services Committee to hold Jan. 30 hearing on fintech marketplace (The National Law Review), Rated: B

    On January 30, 2018 at 10 a.m., the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee will hold a hearing, “Examining Opportunities and Challenges in the Financial Technology (“Fintech”) Marketplace.”

    The Committee Memorandum states that the hearing “will examine the current regulatory landscape [for fintech], the need to amend or modernize the regulatory landscape or the necessity to amend existing financial laws or develop new legislative proposals that would allow financial services entities to use fintech to deliver new products and services to consumers.”

    United Kingdom

    Over 200 brokers join LendInvest BTL panel (Bridging&Commercial), Rated: AAA

    LendInvest has formed a national panel made up of over 200 brokers, packagers and other introducers, following the launch of its buy-to-let product.

    The lender launched the BTL product – which is only available via intermediaries – in late November.

    LendInvest believes that assembling a panel of this size in just 10 weeks demonstrates the appetite brokers have to get behind the product.

    Ranger Direct Lending Expects Princeton Arbitration Decision Soon (London South East), Rated: B

    Ranger Direct Lending Fund PLC said on Monday it expects arbitration against Princeton Master Fund to conclude by mid-April.

    European Union

    Signicat Raises $ 2 Million to Build Out its Identity Assurance as a Service Technology (Finovate), Rated: AAA

    Identity Assurance as a Service (IDAaaS) innovator Signicat has won phase two funding from Horizon 2020, the EU framework program for research and innovation. The $2 million grant (€1.6 million) will enable Signicat to continue development of its IDAaaS toolbox for use in Europe, and takes the company’s total funding to $3.9 million.

    France’s Alternative Finance Grows by 50% – Equity Crowdfunding Shrinks (Crowdfund Insider), Rated: AAA

    The annual Alternative Finance & Crowdfunding Barometer compiled by KPMG for the French Crowdfunding Association (Financement Participatif France, FPF) shows that in 2017 the French Alternative Finance market grew by 50%, driven by SME lending growth, and came close to the billion euro mark, at €940 million. Crowdfunding, as a subcategory of alternative finance open to retail investors, grew slightly slower at 44%, and equity crowdfunding shrank.

    • Institutional SME lending grew by 157% to €215 million,
    • SME crowdlending and crowdinvesting in SME debt grew by 102% to €195 million.

    The market is heavily concentrated, with the top 5 platforms, Lendix, Credit.fr, Lendosphère, Unilend and Lendopolis accounting for more than 80% of the loans originated. Credit.fr, which was recently acquired by investment firm Tikehau Capital is growing fastest. Funded for more than 80% by non-retail money, Lendix captures more than half of the market. Most recently, the platform raised €120 million of a new €200 million investment fund designed to finance SME loans from 2018 on.

    Source: Crowdfund Insider

    Consumer Lending Decelerates

    Alternative consumer lending grew only by 17%, from €197 million to €231 million, three times more slowly than in the previous year. The market is dominated by Younited Credit which originated €227 million worth of consumer loans in France, Italy and Spain in 2017. Younited’s growth remained high in terms of number of loans (nearly +50%) but the growth in euros was slower because the company introduced smaller €1,000 to €3,000 loans and stopped promotional campaigns that were waving fees on large loans.

    Source: Crowdfund Insider

    Equity Crowdfunding Shrinks

    French equity crowdfunding raised a mere €58 million, 15% less than in the past year. 

    Read the full report here.

    3 things that could drive fintech investment in Europe through the roof (again) (PitchBook), Rated: A

    Last year, venture investment in European fintech companies more than doubled YoY to €2.8 billion, even though the deal count remained almost flat, per the PitchBook Platform.

    The jump in money invested was boosted by some monster deals, including rounds of well over $200 million each into foreign exchange unicorn TransferWise and student loans startup Prodigy Finance.

    Pan-European Marketplace Investly Now Seeking £500,000 on Seedrs (Crowdfund Insider), Rated: A

    Investly, an Estonian peer-to-peer (P2P) lending platform, is now seeking £500,000 through its equity crowdfunding campaign on Seedrs.

    International

    CB Insights is working with The New York Times to identify the best VC professionals. (CB Insights), Rated: AAA

    We’re exploring additional rankings for other types of investors:

    • Top Corporate VCs
    • Top Seed-Stage VCs Brand
    • Top VCs by Region (Asia & Europe)

    Ranking Algorithm Factors:

    • Performance Persistence
    • Network Centrality
    • Brand
    • Investment Discipline
    • Illiquid Portfolio Strength

    The Top 20 Venture Capitalists Worldwide (The New York Times)

    FinTech, RegTech and SupTech (Finextra), Rated: A

    Two–thirds of consumers between the ages of 18 and 29 have a mobile phone and use mobile banking.

    FinTech improves the lending process by reducing the cost of underwriting through automation of the credit application process. That process includes the review of the credit application, credit score monitoring, and the collection of financial documents.

    Credit standards and trading limits are monitored more efficiently as Fintech applications can be created that employ customized credit standards per the bank’s risk-management policies

    Just as FinTech helps institutions manage their internal credit and trading standards, RegTech enhances their ability to adhere to the government’s regulatory rules set out by various agencies and The Federal Reserve Bank.

    Fewer fines and litigation costs are possible with RegTech applications.

    Adapting to new regulations faster can be achieved with RegTech as financial institutions can monitor changes in regulations in real-time.

    Regulatory reporting times improve with RegTech.

    Australia

    IFM Investors ups stake in digital provider Decimal (Private Banker International), Rated: A

    IFM Investors, an Australian fund manager, has increased its stake in local digital advice provider Decimal to 15%.

    IFM acquired the additional stake through the placement of 28,900,000 ordinary shares at $0.03 per share.

    India

    Why P2P should be empowered to fill the void in SME financing (ET Rise), Rated: AAA

    The Economic Survey 2017-18 tabled in the Parliament on Monday delivered an unsurprising, but troubling figure. The amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was pocketed by large enterprises. For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.

    RBI data show that NBFCs have increased their lending to the SME sector by giving out about Rs 680 crore to the micro, small and medium enterprises compared to Rs. 480 crore in 2016. These figures do not include the loans extended to SMEs by the P2P industry, which has been recently classified as an NBFC.

    In 2015-16 more than 10,000 businesses across UK benefitted and an estimated 30,000 new jobs were created due to UK government’s favorable policies for the P2P lending sector.

    India’s flourishing fintech sector is craving the finance minister’s attention (Quartz), Rated: A

    While the Narendra Modi government and the Reserve Bank of India (RBI) have already laid down regulations for certain segments, such as peer-to-peer lending, others like cryptocurrencies and online lending startups are yet to be regulated. Such regulation may mean stricter compliance, but the management at these firms believe it will lend legitimacy to the industry, which is expected to be worth $2.4 billion by 2020. That, in turn, will help them grow faster.

    Asia

    Indonesia’s fintech lending boom exploits shortfall in bank loans (Reuters), Rated: AAA

    Wimboh Santoso, head of Indonesia’s financial regulator (OJK), said while the trend was still a drop in the ocean of overall lending, more than 250,000 people had taken out loans through fintech. Around 30 P2P firms had extended 2.6 trillion rupiah ($193.8 million) in lending as of January 2018, compared with just 247 billion rupiah of lending in December 2016. Another 36 more firms were waiting to be approved, he added.

    George Popescu
    Allen Taylor