Thursday November 7 2019, Weekly News Digest

Lending Club

News Comments Today’s main news: Prosper launches HELOCs with BBVA. LendingClub beats profit estimates. Pennsylvania fines SoFi subsidiary $110,000. Kabbage partners with GoDaddy. Zopa makes banking debut. RateSetter rolls out investor self-certification. Today’s main analysis: LendingClub Q3 earnings. International P2P lending volumes. Today’s thought-provoking articles: The hot stuff at Money 2020. China’s slowing economy. International […]

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

Lending Club

News Comments

United States

United Kingdom

China

Other

News Summary

United States

Prosper Officially Launches HELOCs with First Bank Partner BBVA (Lend Academy), Rated: AAA

It was last November when we first heard that Prosper had plans to expand their offerings from personal loans into HELOCs.  In 2018 David Kimball noted that they would be partnering with banks on the new product and loans would be available both directly through Prosper.com and also as a white-labeled offering. Now we know their first bank partner is BBVA.

LendingClub beats profit estimates on higher fees, loans (Reuters), Rated: AAA

Online lending pioneer LendingClub Corp (LC.N) beat analysts’ estimates for third-quarter profit on Tuesday and forecast current-quarter largely above estimates, sending its shares up 4% in after-hours trading.

Transaction fees jumped 17% at the company, which helps connect customers looking for loans to individuals or institutional investors, such as banks, through its online marketplace.

Loan originations soared 16% to $3.35 billion in the third quarter, with total revenue rising 11% to $204.9 million.

LendingClub Q3 2019 Earnings Results Review (Lend Academy), Rated: AAA

Revenue also topped records at $204.9 million, up 11% year over year. Losses narrowed to a GAAP net loss of just $400,000 compared to the prior year period where they lost $22.8 million. Adjusted net income came in at $8 million, up from a loss of $7.3 million in the prior year period.

Source: Lending Club

Pennsylvania regulators hit SoFi with enforcement action (American Banker), Rated: AAA

A subsidiary of Social Finance Inc. has agreed to pay a $110,000 fine in Pennsylvania after operating as a mortgage servicer for nearly a year without the required state licensing.

SoFi Lending Corp. is one of several mortgage companies that has been hit recently with enforcement actions in Pennsylvania after a change in state law in December 2017.

The new law required mortgage servicers that were operating in Pennsylvania to be licensed. Companies had until June 30, 2018, to apply without being penalized for unlicensed activity.

SoFi vs. Prosper: Which Personal Loan Lender Is Right for You? (credible), Rated: A

SoFi and Prosper are two companies that offer personal loans with competitive interest rates and no prepayment penalties. However, there are some major differences between the companies that could affect your decision on which one to choose.

Money 2020 Highlights, Jobs Report, Markets Doubt Fed (PeerIQ), Rated: AAA

What’s Hot and What’s Not at Money 2020?

Attendance was at record levels. Here’s our view on the areas attracting the most attention at Money 2020:

  • Lending-as-a-Service: lenders that enable non-banks, banks and credit unions originate loans (e.g., loan origination software, digital experience, bank workflow software, etc.). Examples: Better, nCino, Happy Money (backed by CUNA Mutual), Alchemy, Splash Financial, Blend, Roostify
  • International Lending: Non-banks expanding access to credit, particularly in the LatAm markets. Examples: CrediJusto (Mexico SME), Addi (Colombia POS), Nova Credit
  • Underwriting infrastructure: Reducing OPEX or fraud risk thru automation. Examples: Ocrolus, Feedzai

The healthy Friday jobs report supports the ‘wait and see’ Fed view (although it is a backward looking indicator). The report indicated growth in employment of 128K in October and a tick-up in unemployment to 3.6%.

Source: WSJ, Labor Department, PeerIQ

Kabbage partners with GoDaddy to offer capital to entrepreneurs and SMBs (Tearsheet), Rated: AAA

The partnership: Kabbage’s online lending platform is now available to GoDaddy’s U.S. customers to access a business line of credit in minutes.

  • Customers can access flexible lines of credit of up to $250,000 in minutes after filling out a short application.
  • Existing GoDaddy customers can get $100 off their first month’s fees
  • “We know that a lack of capital for marketing and other core activities remains a major roadblock to accelerate growth. Our partnership with Kabbage is key in our ongoing mission to empower our customers and provide them with the resources they need to fuel their business needs,” said Melissa Schneider, GoDaddy’s vice president of global marketing operations.

Ron Suber Shares Perspective on Fintech (Crowdfund Insider), Rated: A

Ron Suber is one of the better-known names in the Fintech sector. Originally, Suber’s role as the President of the marketplace lending platform Prosper Marketplace brought Suber’s name to prominence as the Fintech emerged as an early leader in the US online lending market. Since departing Prosper’s management team several years ago, Suber has been associated with multiple Fintech’s as an investor, advisor or, perhaps, a board member. Today, Suber has invested in more than a dozen Fintech companies

Real estate crowdfunding startup CrowdStreet turns to its customers to raise $ 12M round (GeekWire), Rated: A

CrowdStreet, a Portland-based commercial real estate crowdfunding startup, has raised a big new funding round, with a twist. Instead of relying solely on venture capital investors, the startup turned to its own community of real estate investors and developers to raise the bulk of the money for its Series C round.

The result: CrowdStreet this morning announced it has raised $12 million, primarily from the users of its platform, bringing lifetime funding to $25 million.

CrowdStreet lands $ 12M in financing, hires execs (The Real Deal), Rated: B

Robert Stiles, former chief financial officer at LendingHome, joined as CFO/COO. Londa Quisling was named chief technology officer, after serving as chief product officer at Treehouse. And John Havens, previously of BNY Mellon, joined as vice president of capital markets.

Inside Affirm’s ID Verification And Fraud Prevention Techniques (PYMNTS), Rated: A

Many consumers do not have funds readily on hand to make big purchases like electronics or furniture and prefer turning to instant loan apps like Affirm, a point-of-sale installment lender established in 2013, rather than going into debt with a bank or credit card provider. Customers may feel thankful to be able to pay off a purchase over a year, but not at the cost of losing their identities to fraudsters or scammers.

Max Levchin backs digital banking startup built to reward savers (Finextra), Rated: A

A new digital banking platform promising to help reward people for positive financial behaviour has closed a $3.5 million seed round led by Accomplice Ventures and Walkabout Ventures nd joined by PayPal founder Max Levchin’s startup studio.

According to Moody Analytics, an average person under the age of 35 saves -1.8% of their income. HMBradley is promising to tackle this by increasing awareness and rewarding people for saving more.

LA is fast becoming a fintech hub as HMBradley launches another West Coast challenger bank (TechCrunch), Rated: B

Add HMBradley to the list of Los Angeles-based startups looking to shake up the world of high finance typically dominated by East Coast giants with names like JPMorgan Chase, Citigroup, Morgan Stanley and Goldman Sachs.

Building A Challenger Bank That Actually Challenges Traditional Banking (PYMNTS), Rated: A

Minus the CEOs at the top-10 largest banks in the U.S., whose main concern is probably figuring how to deal with their trillions of dollars’ worth of assets, nearly the entirety of bank CEOs outside that tier have one primary concern, according to Bruhnke: How do they grow deposits? Meanwhile, he noted, bank customers also have a singular desire: How do they make the most money on the funds they have deposited?

How Goldman Sachs plans to boost its reputation with online bank Marcus (Yahoo! Finance), Rated: A

Goldman Sachs’ upstart digital consumer bank, Marcus by Goldman Sachs, will help boost the reputation of its parent company, one of its leaders told Yahoo Finance recently.

The OCC Fintech Charter Is Down, but Maybe Not Out (Lexology), Rated: A

The Office of the Comptroller of the Currency (OCC) recently faced another setback in its attempt to issue a special purpose national bank charter tailored to fintech companies (fintech charter). A federal district court in New York held that the OCC does not have the authority to grant charters to companies that do not accept deposits. The ruling is a blow to the OCC’s efforts to provide new avenues for innovation in financial services. The fintech charter would allow fintech companies, which do not accept deposits like traditional banks, to benefit from the same preemption of state laws and licensing requirements as national banks.

Troubled Fintech Charter: How More Delays Impact Competitive Situation (The Financial Brand), Rated: A

The other is Varo, which initially considered going for an OCC special purpose charter but then decided to apply for a full-service charter. Varo has preliminary approval from OCC and awaits approval of its FDIC deposit insurance application. Below, we look at how Lending Club, the online marketplace consumer loan platform, is exploring chartering options.

Crypto APIs Launches Trading APIs, Allowing Users to Leverage Multiple Crypto Exchange Accounts (Cryptovest), Rated: A

The Trading APIs service provides one Unified API that has integrated multiple crypto exchanges. Thus, users will now be able to link multiple exchange accounts to their profile, collect data and execute their portfolio management trades from a single point.

Crypto APIs is used by thousands of developers to create products like Crypto exchanges, Crypto wallets, Trading bots, Crypto PSP, Arbitrage solutions, Crypto Lending solutions and many more.

Brex And Bank Of The West Team On Co-Branded Credit Card (Forbes), Rated: A

Brex, the fintech credit card startup, is teaming up with Bank of the West, the subsidiary of BNP Paribas, to roll out a co-branded credit card. It marks the first co-branded credit card to come out of Brex which caters to startups and entrepreneurs.

Washington flexes its muscles on small-business lending (American Banker), Rated: A

In one instance, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency angered borrower advocates by siding in court with a high-cost business lender. In the other, the Consumer Financial Protection Bureau signaled its intention to move forward with a small-business lending rule that has languished for nine years amid sharp disagreements over its proper scope.

USA Continues to be a Top Location for Fintech Events (Fintech News), Rated: A

On the global fintech scene, the US has been amongst the top leaders, accounting for 57% of the fintech market in 2018, according to a Mordor Intelligence research.

Fintech continues its momentum this year, with investment in US fintech companies surging to US$12.7 billion in the first half of 2019. That represents a 60% increase in value of deals and signals a trend of larger deals in already the world’s biggest and most active fintech market, according to data from Accenture.

Legitimate Shoppers Take Advantage of Deals, Outpacing Seasonal Growth in Fraudsters (Riskified Email), Rated: A

A new report from 

Elevate Credit to Attend the Stephens 2019 Investment Conference (BusinessWire), Rated: B

Elevate Credit, Inc. (NYSE: ELVT) today announced that its Interim Chief Executive Officer, Jason Harvison, and Chief Financial Officer, Chris Lutes, will attend the Stephens 2019 Nashville Investment Conference on November 14th at the Omni Nashville Hotel. Mr. Harvison and Mr. Lutes will be available for 1×1 meetings with investors.

Michigan AG sues online tribal lender (Lexology), Rated: B

On October 31, the Michigan attorney general announced it filed a lawsuit against an online lender alleging the lender violated the CFPA and Michigan…

United Kingdom

Peer-to-peer lender Zopa makes banking debut as pressure mounts (City A.M.), Rated: AAA

Zopa, one of the UK’s three largest names in peer-to-peer lending, is to launch its first foray into banking after receiving partial authorisation last year.

RateSetter begins roll-out of investor self-certification (P2P Finance News), Rated: AAA

RATESETTER has begun asking its customers to confirm their investor status ahead of the Financial Conduct Authority’s (FCA) new marketing and disclosure rules that come into effect on 9 December.

iwoca hits £1bn lending milestone as headcount soars (AltFi), Rated: A

UK business lender nearly doubled its lending last year to £330m, helping the startup announce it has now reached a cumulative lending milestone of over £1bn.

The news comes as iwoca’s headcount has jumped 50% in the last 12 months, boosted further by the £10m BCR grant which the company secured in August to further expand its customer base.

China

China has a steady hand on its slowing economy, but can it prevent a crash landing? (SCMP), Rated: AAA

Year-on-year growth has fallen by 0.2 percentage points per quarter this year, from 6.4 per cent in the first quarter to 6.2 per cent in the second quarter and to 6 per cent in the most recent quarter.

China to Transform Remaining P2P Platforms (Finews.Asia), Rated: A

Recent data showed that the number of online P2P platforms plummeted to just 427 – a 59 percent drop compared to 2018-end. The total outstanding loan value and the number of borrowers also dropped correspondingly by 49 percent and 55 percent, respectively.

China is making rapid inroads towards reducing peer-to-peer lending risk to meet the 2020 target deadline but expects to keep alive the few remaining with strong fintech expertise and shareholder support.

China warned to avoid P2P lending mistakes in blockchain push (Tech in Asia), Rated: A

China has been warned to avoid the same mistakes with blockchain that it made with its peer-to-peer lending, as the government vowed a “thorough revamping” of the controversial lending platforms as part of a continuing battle against financial risk amid the domestic economic slowdown and the trade war with the US.

Chinese fintech players want to do a Xiaomi in lending. Caution: regulatory glare ahead (India Times), Rated: A

From adopting unique business models to routing investments through Singapore, Chinese lenders are trying every trick in the book to win the Indian fintech-lending space. But getting money to India, deploying it, and dealing with stringent KYC norms is easier said than done.

Asset management arbitration cases in China (Vantage Asia), Rated: A

The wave of closures of P2P platforms in China in the summer of 2018 garnered national attention. The latest blacklist for P2P lending published by “P2PEYE.COM” ( shows that as of the end of March 2019, the number of problematic P2P platforms reached 5,388.

European Union

Marks & Spencer Buy Now, Pay Later Option (The National Law Review), Rated: AAA

Klarna, a popular BNPL provider used by over 4,000 UK retailers, offers three types of BNPL service:

  1. delayed payment up to 30 days after purchase. This incurs no interest or fees, providing the payment is made within the timeframe.
  2. instalment options whereby the purchaser can pay in three equal, interest-free payments every 30 days.
  3. flexible financing, which spreads the cost of larger purchases into manageable monthly payments. The term for this repayment option ranges from six to 36 months.

Upcoming maintenance affecting ability to view orders (Klarna), Rated: A

On Wednesday 6th November at 05:00 CEST, we will perform an important technical maintenance which will prevent customers from seeing some order details within the Klarna app for a short time. We expect this maintenance to take approximately 15 minutes, after which time full details of orders will become accessible again.

LendIt Fintech Europe 2019 Slide Presentations Now Live (LendIt), Rated: AAA

Below, you can find the presentations from keynote speakers at the event, as well as the different track presentations.

Lending Innovations

More presentations here.

International

Beijing may cull a stateside unicorn stampede (Reuters), Rated: AAA

Chinese firms have raised just $3 billion from American exchanges so far this year, less than a third of the 2018 total. In the last week of October, however, half a dozen companies filed for initial public offerings in New York, bringing the total backlog of Chinese floats to 24, according to data from Refinitiv. Rising trade uncertainties, tougher listing requirements on the NASDAQ and an upcoming U.S. presidential election have sparked fears that 2020 may prove even more volatile for debutants.

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

Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 703 million Euro.

Milestones in cumulative volume lent crossed this month:

Asia

P2P lending platform Validus expands into Vietnam (Business Times), Rated: AAA

SMEs make up 97 per cent of Vietnam’s enterprises, but only account for 22 per cent of total bank lending. To meet a US$21 billion SME financing gap in the country, Validus Vietnam will partner corporates to provide SME growth financing to their vendors and subcontractors.

How South Korea’s PeopleFund Is Shaking Up P2P Lending (Yahoo! Finance), Rated: A

Joey Kim, chief executive officer at PeopleFund, discusses what his company does, the growth drivers for his company, his latest funding round, P2P lending in South Korea, regulation, the possibility of consolidation in the industry and how the Korean economic headwinds are impacting his business. He speaks exclusively on “Bloomberg Daybreak: Asia.”

Vietnam’s IT Sector: 5 Industries to Watch (Vietnam Briefing), Rated: A

Vietnam’s fintech industry is expected to reach US$7.8 billion in revenue by 2020. A rising middle class, growing internet usage, and a young population present a great combination for the fintech sector to thrive. An estimated 120 companies and brands cover a wide range of services, from digital payments to wealth management and blockchain.

Fintech help banks broaden customer base (The Jakarta Post), Rated: A

Instead of competing against each other, banks and financial technology (fintech) companies are joining hands and combining their resources to tap into the country’s growing financial services market.In an effort to keep up-to-date with recent technology and stay relevant amid the latest changes in financial services, many banks have signed partnership deals or bought into nimble start-ups as an alternative to building costly technology projects.For the banks, the logic behind a partnership with fintech companies is simple: It gives them the opportunity to reach a wider customer base, unlock their technological capabilities without having to buy one of their own and penetrate the country’s unbanked population — all without having to spend too much money.“We are partnering with 12 fintech companies from peer-to-peer [P2P] lending and payment apps to SME [small, middle, enterprise]…

Latin America

Preview of LendIt Fintech’s inaugural LatAm conference (LendIt), Rated: AAA

Temenos’ report tags financial inclusion as LatAm bankers’ priority (IBS Intelligence), Rated: A

Temenos has concluded the LatAm results for its annual retail banking survey, conducted by the Economist Intelligence Unit (EIU). The survey titled ‘A whole new world: How technology is driving the evolution of intelligent banking in Latin America’ stated that 35% of retail bankers prioritize investments in digital technologies along with cost-cutting or margin improvement for furthering their financial inclusion goal.

Authors:

George Popescu
Allen Taylor

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

Tuesday April 10 2018, Daily News Digest

Tuesday April 10 2018, Daily News Digest

News Comments Today’s main news: Prime Meridian announces new opportunities fund. TransUnion launches startup credit kit. SoFi hires Goldman head of mortgage securitization as CFO. Upgrade intros new personal credit line. The Axiom Group ready to invest $50M into charge-off portfolios. S. Korean P2P loans increase 10.3% in March. Today’s main analysis: The highs and lows of Bank Negara’s 2017 […]

Tuesday April 10 2018, Daily News Digest

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Prime Meridian Capital Management Announces New Fund Launch: The Prime Meridian Special Opportunities Fund (Benzinga), Rated: AAA

Prime Meridian Capital Management (PMCM) a Registered Investment Advisor (RIA) specializing in marketplace lending strategies across three alternative credit verticals in four funds, today introduced the Special Opportunities Fund.

The new fund, due to launch in the second quarter 2018, will invest in multiple high yielding alternative credit verticals including litigation finance, life settlements, targeted high yielding, niche real estate, small business, and consumer loans.

TransUnion Boosts Entrepreneurial Innovation with New Startup Credit Kit (Investors Hub), Rated: AAA

To meet the needs of startups and their investors, TransUnion (NYSE:TRU) today launched the Startup Credit Kit at LendIt Fintech USA 2018, giving new companies faster access to cutting-edge alternative and trended credit and fraud prevention data.

With TransUnion’s Startup Credit Kit, new businesses can more quickly gain access to depersonalized consumer credit data to better explore the market for untapped opportunities. It also helps new businesses determine the viability of their products by analyzing real-world depersonalized consumer credit data. This allows startups to focus their resources on high-potential market segments and product opportunities while allowing them to prove their concept to raise funding in the early stages of the startup lifecycle.

SoFi hires former Goldman Sachs head of mortgage securitization as new CFO (Housing Wire), Rated: AAA

Now, it looks like SoFi may be making a bigger move into securitizations by hiring the former head of mortgage securitization at Goldman Sachs as its new chief financial officer.

SoFi announced Monday that it named Michelle Gill as the company’s new CFO.

Gill comes to SoFi from TPG Sixth Street Partners, a credit firm. Gill joined TPG last yearafter a lengthy term at Goldman Sachs.

Gill spent 14 years at Goldman Sachs, eventually serving as a partner and co-heading the firm’s structured finance business.

Lending Club Ex-CEO Is Staging A Comeback With New Fintech Startup (Forbes), Rated: AAA

Online lending startup Upgrade, led by cofounder and CEO Renaud Laplanche, announced that it’s now initiating $100 million in personal loans a month, with an average loan size of about $10,000. The one-year-old company has reached $60 million in annualized revenue, Laplanche says, and by the end of 2018, he expects to hit a $100 million revenue run-rate and become profitable.

Upgrade also announced a new product called Personal Credit Line, a hybrid of a personal loan and credit card. Consumers can get approved for up to $50,000 in credit, and they can draw down on the line as needed, paying interest only on what they’ve borrowed. The credit line has a fixed length of 12 to 60 months and a fixed interest rate, and it forces consumers to pay part of the loan principal every month.

Online lender touts new personal credit line as HELOC alternative (American Banker), Rated: A

The first online lending firm Renaud Laplanche founded, LendingClub, targeted consumers with hefty credit card balances, offering them the opportunity to refinance at a lower interest rate.

In his latest venture, Laplanche hopes to lure customers before they rack up big credit card bills. Upgrade, the San Francisco-based online lender that he founded in August 2016, is rolling out a new product that is designed for folks who are anticipating big expenses but are not sure exactly how much they will need to spend or when.

THE AXIOM GROUP ANNOUNCES $ 50M IN FUNDING AVAILABLE TO PURCHASE CHARGE OFF PORTFOLIOS (Lendit), Rated: AAA

The Axiom Group announced today at LendIt Fintech USA that it has obtained $50M in capital to finance the purchase of charge off portfolios with a focus on consumer loans and credit cards, specifically in the FinTech lending space.

This increase in capital will allow The Axiom Group to pursue large portfolios and monetize those portfolios immediately for the lender/seller partners. By selling bad debt portfolios, FinTech companies can utilize the income for further lending, as well as reduce their risk associated with the challenges of collecting on charged off accounts.

Fintech lenders will struggle to regain mojo alone (Nasdaq), Rated: A

Some 13 months later LendingClub, which Sanborn has run since a mis-selling scandal cost predecessor Renaud Laplanche his job in 2016, remains just a lender. Its stock has lost around a third of its value in the past year.

On Deck’s shares are effectively flat over the same period. But boss Noah Breslow had to slash costs last year after credit losses. He now plans to boost revenue by expanding into portfolio management and loss mitigation, and finding more bank partnerships.

Privately held Social Finance has done the most to diversify, adding consumer and mortgage loans as well wealth management to student-loan refinancing.

SoFi is now the biggest player. It extended $12 billion of new loans last year, 50 percent more than erstwhile leader LendingClub, and its adjusted EBITDA is two-thirds higher at $126 million, according to the Wall Street Journal. Yet each pales in comparison to JPMorgan’s retail unit, which lends around 10 times as much and enjoys lower funding costs thanks to customer deposits.

Consumer Lending Platform Best Egg Exceeds $ 5 billion & Celebrates Fourth Birthday (Crowdfund Insider), Rated: A

Marlette Funding, LLC, the owner of consumer lending platform Best Egg, announced on Monday the year-end results and key accomplishments for first quarter 2017. According to Marlette Funding, during the past year, Best Egg experienced origination growth of 66%, significantly reduced its customer acquisition costs, and ended 2017 with three straight quarters of net income positive on a GAAP basis. Best Egg has reportedly exceeded $5 billion of prime loans and celebrated its fourth birthday. 

Launched in 2014, Marlette Funding, through its consumer brand Best Egg, describes itself as a financial technology provider on a mission to find better ways to make money accessible to allow people to “enjoy life.”

Elevate to Release First Quarter 2018 Earnings on Monday, April 30, 2018 (Business Wire), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it will release its first quarter 2018 financial results after the market closes on Monday, April 30, 2018. Ken Rees, Chief Executive Officer, and Chris Lutes, Chief Financial Officer, will also host a conference call on the day of the release (April 30, 2018) at 5:00 pm ET to discuss Elevate’s financial results.

 

How Blockchain is Changing the Mortgage Game (Investopedia), Rated: A

While blockchain doesn’t offer a perfect remedy to the problems afflicting the industry, it does provide a model that minimizes some of them. The first major improvement the technology brings is transparency. Blockchain’s distributed ledger technology (DLT) provides two major upgrades to the current model—it decentralizes the storage of information, and it makes all transactions immediately available across all nodes of the chain. The first upgrade means that companies and lenders can no longer manipulate information or engage in shadowy practices with data, as it is shared across an entire network and not under their exclusive supervision.

Nav Launches First-of-Its-Kind Cash Flow Analysis Tool for Small Business Owners (Lendit), Rated: A

Nav, a free platform that helps small business owners build, protect and leverage their financial data, announced the launch of Business Banking Health Check, a feature to help small business owners make more informed decisions on their cash flow. Nav is the only place entrepreneurs can access their personal and business credit scores, along with cash flow insights to provide greater transparency into how lenders view their
creditworthiness and enable greater access to capital.

According to Pepperdine’s Capital Markets Report, insufficient credit profiles and cash flow are two of the primary reasons banks reject business loan applications. Nav’s platform uses these data sets to help business owners manage their fundability, while also doing legwork for lenders by matching its small business customers to their most-qualified funding options.

LENDIO ANNOUNCES LENDER TURNDOWN PROGRAM (Lendit), Rated: A

Lendio announced today at LendIt Fintech USA that it has facilitated nearly $60 million in loans through its lender turndown program.

Lendio’s lender turndown program allows lending partners to offer a marketplace of loan options to customers that do not fit the lender’s credit box; this allows lenders to turn a decline response into a potential loan offer for the small business owner.

LENDR ANNOUNCES THE LAUNCH OF ITS BUSINESS DEBIT CARD (Lendit), Rated: A

Lendr Online, LLC. announced today at LendIt Fintech USA that it is has launched a new business debit card product to service its growing client base. The ability to fund business owners in real-time via an instant access virtual Mastercard followed up with a traditional plastic card utilizing the latest in EMV chip security, will further enhance its brand and solidify Lendr’s position as a premier financial services firm.

Ocrolus Secures $ 4M in Series A Funding (Finsmes), Rated: A

Ocrolus, a New York City-based provider of solutions to analyze financial documents, raised $4m in Series A funding.

The round was led by Bullpen Capital with participation from QED Investors, Laconia Capital Group, ValueStream Ventures, RiverPark Ventures, Sam Hodges (co-founder, Funding Circle), Vince Passione (CEO, LendKey), Ram Ahluwalia (CEO, PeerIQ), Bill King (former head of securitization, JP Morgan), Hugh Nguyen (CEO, ClearServe) and Tanya Barnes (managing director, Golden Seeds), among others. In conjunction with the funding, David Arcara of Laconia Capital Group and Nick Adams of Differential Ventures will be joining Ocrolus as board members. Paul Martino of Bullpen Capital, Amias Gerety of QED Investors and Karl Antle of ValueStream Ventures will be board observers.

 

THINK WALLET REVEALS SCALABLE SOLUTION TO REDUCE FUNDING COST OF PERSONAL LOANS (Lendit), Rated: A

ThinkWallet.com announced today at LendIt Fintech USA that it has solved the problem many lenders currently face: Overspending to attract leads that can’t qualify for their personal loan products.

Nelnet Expands Loan Servicing Offerings To Meet Demands Of Fintech Lenders (PR Newswire), Rated: A

Nelnet (NYSE: NNI) is bringing a new servicing option to Fintech lending platforms. Nelnet Loan Servicing will leverage the experience, scale, and personnel of its existing servicing business with technology enhancements to meet the unique needs of Fintech companies with primary and backup servicing.

 

General Atlantic in talks on a deal with Brazil’s online lender Geru (Reuters), Rated: B

U.S. investment firm General Atlantic is in talks to buy a minority stake in closely held Brazilian online lending startup Geru Tecnologia e Serviços SA, according to two sources with knowledge of the matter.

Other investors may join General Atlantic, the sources said, adding that Geru’s partners have spent the last few weeks visiting funds in San Francisco and New York to raise about $50 million.

 

 

 

 

IDVALIDATION SHOWCASES GOVERNMENTAL VERIFICATION SOLUTIONS FOR LENDERS AT LENDIT FINTECH USA – 2018 (Lendit), Rated: B

IDValidation will be showcasing their governmental verification solutions to the lending community and Stops 100% of Synthetic Identity Theft.

IDValidation’s Consent Based SSN Verification Allows Financial Institutions Direct Access to the Main Frame Database of the Social Security Administration to Accurately Verify the Validity of a Social Security Number and Stop Synthetic Identity Theft. Toyota Financial Services has conducted a successful pilot. IDValidation has become the forerunner in providing this vital tool to the Financial World helping mitigate
Fraud & ID Theft.

 

 

 

LendingPoint To Accept Loan Payments and Disburse Loans via Debit Cards (Business Wire), Rated: A

Bringing a new layer of convenience to financial transactions with its customers, LendingPoint, the company working to revolutionize access to consumer credit, announced today it has entered into an agreement with TabaPay that will integrate debit cards into LendingPoint’s financing platform.

Beginning immediately, LendingPoint will allow borrowers to use debit cards for loan payments they make online or over the phone. LendingPoint will be able to verify account ownership and balance of its applicants through the TabaPay platform. Then later this year, LendingPoint will also be able to instantly disburse loans to approved borrower accounts through their debit cards, 24/7/365, or credit card payoffs. Those inbound and outbound debit-card disbursements and collections will happen instantaneously and are free for the borrower.

HARVESTING INC LAUNCHES AI BACKED CREDIT RISK SYSTEM FOR AGRICULTURE LENDERS (Lendit), Rated: A

Silicon Valley-based FinTech Social Enterprise Harvesting Inc, launches its innovative credit scoring system for financial institutions to assess farmers creditworthiness and facilitate agriculture financing .

Harvesting’s Credit Risk System is an Artificial Intelligence (AI) powered platform which leverages on traditional & alternative data sets and allows financial institutions to build, deploy and monitor credit business in the cloud, within a fraction of time & resources it takes today. It’s easy to use interface with advanced feature engineering flexibility allows credit risk manager to create best of the breed custom credit risk model for the organization on a cloud infrastructure. It allows credit risk manager of any size of financial institutions to leverage the power of AI and increase acceptance rate and reduce defaults.

FUTUREBANK DIGITAL AND API BANKING PLATFORM INTEGRATES ENTERSEKT’S SECURE CONNEKT PAYMENT FUNCTIONALITY (Lendit), Rated: B

Global Kinetic announced today at LendIt Fintech USA, that it will be integrating Entersekt’s Connekt functionality into the FutureBank platform. FutureBank’s unique ability to abstract the complexities in legacy core banking systems and customize digital channels through its technology platform helps banks and disruptive FinTech companies work together more efficiently. The growing digital banking market in the US has become vulnerable as consumers are frustrated by poorly designed mobile apps that often have weak security implementations and limited payment functionality. The FutureBank platform can now offer converged payment acceptance through Connekt.

PENSCO Launches Custodian Connect (Lendit), Rated: B

PENSCO Trust Company (“PENSCO”) announced today at LendIt Fintech USA, the launch of Custodian Connect, an API-driven capability that seamlessly connects investment platforms to PENSCO enabling uninterrupted opening and funding of an IRA from within the platform.

 

Spring Labs Announces World Class Industry Advisory Board to Help Build Decentralized Credit and Identity Validation Network (Lendit), Rated: B

Spring Labs, which is building the Spring Network, a blockchain-based network being designed to allow lenders, banks, and data providers to securely and efficiently exchange data with one another, today announced its founding industry advisory board. The industry advisory board comprises a group of industry leaders in finance, credit, and compliance, with members including Sheila Bair, the former Chair of the U.S. Federal Deposit Insurance Corporation (FDIC); and Nigel Morris, Co-Founder and former long-time President of Capital One, and co-founder of QED Investors, a leading investor in global financial technology companies.

This news of the industry advisory board comes on the heels of Spring Labs announcing a $14.75 million seed fundraising round, one of the largest initial venture rounds to-date for a blockchain startup.

CoinVantage Announces Release of Flagship Portfolio Accounting & Reporting System for Digital Assets (Lendit), Rated: B

Alternative Investment fund administrator MG Stover & Co. (MG Stover) announced today a partnership with software technology firm CoinVantage as part of its strategy to grow its digital asset fund administration business and deliver world class solutions to its clients.

Cross River Bank Demonstrates Key Growth, Makes Significant Personnel Hires (Lendit), Rated: B

As Cross River Bank approaches its 10th anniversary, the leader in the emerging FinTech market is demonstrating a surge in growth and surpassing significant milestones as it grows its customer base, offerings and strategic partnerships designed to revolutionize the banking infrastructure.

 

United Kingdom

VPC’s revenue dips in February after record January performance (Peer2Peer Finance News), Rated: AAA

VICTORY Park Capital (VPC) Specialty Lending Investments saw its total net revenue return dip to 0.81 per cent in the month of February, after reporting a record return of 1.08 per cent in January.

In its monthly market commentary, VPC said that the fall in revenue was due to a combination of factors including a “one-time fee earned in January and a shorter day count”. Capital losses were attributed to VPC’s exposure to Elevate Credit – a US-based provider of short-term loans, and securitisation residuals.

 

International

The P2P Lending Alternative – Crowdvouching – Will Now Run in Test Mode (Coin Telegraph), Rated: AAA

In 2017, Suretly token-holders were inspired by the idea of a crowdvouching platform – an international exchange for micro-guarantees, where people can make money by helping others borrow. In the beginning of 2018, the project made something that many other ICOs were not able to deliver: the demo version of its product. To become a guarantor (or a ‘voucher’, in the crowdvouching terminology), an individual needs to download the Suretly mobile application, where he can find borrowers’ loan orders, vouch, and get receive a sum of money in return (a fee).

On April 9, Suretly releases the first version of the new app, available to all users registered for its testing period. The borrowers’ behavior is based on the real data of past periods, and, therefore, users can learn different vouching strategies and practice them in future.

Unlike p2p lending, Suretly does not lend money directly, but rather serves as an intermediary between financial institutions, borrowers, and co-signers. Suretly users vouch for a small part of a loan sum and guarantee that the loan will be repaid in the case of a borrower’s default. Liability for each loan is divided among all vouchers and each voucher’s approval serves as an insurance of the loan. In order for the loan to be approved, the entire amount must be guaranteed by the vouchers.

RCN AT LENDIT FINTECH USA 2018 (Lendit), Rated: B

RCN announced today at LendIt Fintech USA that it will showcase how global lending through peer-to-peer technology is possible using blockchain technology and cosigned smart contracts.

With billions of people all over the world excluded from traditional banking & financial services, Sebastian Serrano (CEO), will explain the company’s successful history in Latin America since it was funded and how RCN can contribute to the world’s economy by providing credit and financial inclusion through blockchain technology and cosigned smart contracts.

Scienaptic releases significant product enhancements to its credit underwriting product ‘Ether Underwrite’ (Lendit), Rated: B

Scienaptic Systems Inc. announced today at LendIt Fintech USA that it has released an advanced version of its Credit Underwriting product, Ether Underwrite.

European Union

Can Europe cash in on the fintech revolution? (Silicon Republic), Rated: AAA

Technologies such as blockchain underpin the fintech revolution, paving the way for a whole groundswell of new start-ups that have targeted markets underserved by banks through better user interfaces and user experience (UX) as well as through digital marketing and branding.

A case in point is Revolut, a London-headquartered start-up with offices in Dublin. It turns out that cash-savvy young workers have no time for bank fees and are less forgiving of banks than older generations, and are flocking to these challenger banks.

Examples include: Zurich’s Advanon, an online platform for invoice financing for SMEs; Dublin’s CurrencyFair, which allows individuals and businesses to send funds to bank accounts worldwide; Stockholm’s Klarna, which provides online payments for e-commerce sites; and London’s Monzo, a start-up bank that has amassed more than 20,000 current-account holders and more than 500,000 people using its distinctive ‘hot coral’ cards.

Latin America

Creditas publishes report on the Brazilian lending market (Lendit), Rated: B

Creditas, the leading digital lending platform for secured loans in Latin America, has published the updated report “The disruptors paradise: Understanding the Brazilian lending space” at the Lendit USA 2018 conference.

With roughly US$ 150 billion in net interest margin, Brazilian consumer debt represents a unique opportunity to significantly increase debt availability and reduce the 30%+ banking spread. The report summarizes the reasons behind the high spread of the Brazilian ecosystem and the evolution during the last decade.

Canada

Nova Credit Partners with Transunion Canada to Expand Immigrant Financial Access across North America (Lendit), Rated: AAA

Nova Credit announced today at LendIt Fintech USA that it partnered with Transunion to serve creditworthy newcomers to Canada who may otherwise miss out on credit opportunities due to a lack of Canadian credit history.

The new product—TransUnion Global Credit Connect powered by Nova Credit—provides newcomers to Canada with a platform to import their historical credit information and have their international credit reports delivered to end-users such as banks, in a streamlined, standardized format. The foreign credit score is mapped to a Canadian equivalent score so that it can be consistently applied.

MENA

Dubai SME Expands Agreement With Finance Solutions Provider ‘Beehive’ (Albawaba Business), Rated: A

The Mohammed bin Rashid Fund (MBRF) for SME – the financial arm of Dubai SME, itself an affiliate of Dubai’s Department of Economic Development (DED) – has expanded the partnership agreement with Beehive, the MENA region’s first regulated peer-to-peer lending platform, which will cross the $50 million mark of total funding for SMEs across the platform this month.

Following a successful initial launch, MBRF and Beehive have broadened the scope of the agreement to increase the credit guarantee to AED750k and also offer Sharia Compliant Invoice Finance, a short-term finance option for businesses wishing to improve cash flow.

Asia

South Korea’s P2P loans jump 10.3% on month in March (Pulse News), Rated: AAA

The combined loans of peer-to-peer (P2P) lenders in South Korea reached almost 2.3 trillion won ($2.1 billion) last month amid burgeoning demand for the debt financing service that allows individuals to borrow or lend money online without going through an official financial institution.

According to Korea P2P Finance Association on Monday, the accumulated loans of its 65 members reached 2.296 trillion won as of end of March, up 213.6 billion won or 10.26 percent from a month ago. By sector, total loans on real estate project financing reached 768.5 billion won, real estate mortgage 611.5 billion won, and other mortgages 472.4 billion won, and credit loans 443.2 billion won. The members’ average loan interest rate was 14.32 percent.

The State Of The Nation: The highs and lows in Bank Negara’s 2017 annual report (The Edge Markets), Rated: AAA

Source: The Edge Markets

THERE is a chance the economy will grow as much as 6% this year, according to Bank Negara Malaysia’s 2017 annual report, which was released on March 28. Not only is that ahead of 2017’s stronger-than-expected 5.9% gross domestic product growth, the central bank’s baseline projection of 5.5% growth for this year is at the higher end of the official 5% to 5.5% projected in the Economic Report 2017/2018, which was released just five months ago.

In fact, working numbers in the annual report indicate 5.67% growth for 2018 — exceeding the government’s projection last October, although just short of 2017’s spectacular 5.9% reading.
Source: the Edge Markets

While last year’s growth beat everyone’s expectations (including the central bank’s working number of 4.57%), it is worth noting that 2016’s actual GDP growth of 4.2% was very close to the central bank’s working number of 4.1% when official projections were between 4% and 5%.

 

Authors:

George Popescu
Allen Taylor

Friday January 26 2018, Daily News Digest

marketplace lending

News Comments Today’s main news: SoFi completes $960.2M student loan securitization. Robinhood adds zero-fee crypto trading, tracking. Goldman partners with Cadre. South Korea earmarks 11.2T won for midrange borrowers. Today’s main analysis: Buying overdue loans at discount on Mintos’ secondary market. Today’s thought-provoking articles: What RateSetter will look like without unsecured commercial loans. AltFi Data predicts strong U.S. MPL […]

marketplace lending

News Comments

United States

United Kingdom

International

Australia/New Zealand

India

Asia

Africa

News Summary

United States

SoFi Completes $ 960.2 Million Student Loan Securitization (Crowdfund Insider), Rated: AAA

Online lender SoFi announced on Thursday the closing of its $960.2 million offering of SoFi Professional Loan Program 2018-A Notes (SoFi 2018-A). According to the lending platform, the offering reflects underlying collateral of more than $1billion in student loans and is SoFi’s largest ever securitization, as well as the first by any fintech lender to reach the billion-dollar collateral mark.

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-1 (BusinessWire), Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-1 (“SCLP 2018-1”). This is a $591.5 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-1

Class Preliminary Rating Class Principal
A-1 AA+ (sf) $320,000,000
A-2 AA+ (sf) $142,500,000
B A (sf) $81,000,000
C BBB (sf) $48,000,000

A Knife in Twitter’s Back Could Bring A Happy Ending to SoFi Investor’s Wild Ride (Inc.), Rated: A

And the reason that departure could make me better off is that I invested in SoFi in December 2014 when the company was valued at $1 billion. The last time SoFi raised money – in 2017 – it was valued at $4.3 billion.

There are five reasons I invested in SoFi  — of which these four are the most important.

1. It was targeting a huge market

SoFi started out targeting the $1.2 trillion student loan industry and in 2014 announced an expansion into the $12 trillion mortgage market.

 2. Its management team had excellent industry knowledge

 3. It knew what ailed stakeholders and provided a remedy

Of the 15,500 borrowers who had taken out about $1.3 billion worth of loans in 2014, SoFi estimated that it had saved the average borrower $11,783.

 4, It looked like it could reach $100 million in revenue

In November 2017, Bloomberg reported that in the third quarter of 2017 SoFi’s adjusted operating revenue rose 8.2% to $145.3 million in the third quarter while its adjusted earnings totaled $56.1 million.

Moreover, SoFi added 55,000 members in the quarter to a total of 400,000 – having completed “more than $3.52 billion in loans in the period and completed three securities offerings totaling more than $1.5 billion,” according to Bloomberg.

Scandal-rocked SoFi says it has foundation for full recovery (American Banker), Rated: A

He points to the $12.9 billion in loan originations SoFi did last year. The company sold more than $2 billion of those loans.

“All our investors are still buying, and we’ve added many new investors post Mike leaving,” Jain said. “All our lenders continue to lend to us and they’ve shown interest in lending us more. In the face of adversity, we did all we could.”

Source: American Banker

6 Awesome Benefits of SoFi Parent Student Loans (Student Loan Hero), Rated: A

If your child is a college student, you can borrow money to help offset their education costs with a SoFi Parent Loan. According to the company, borrowers can save $3,637 over the life of the loan compared to a federal Parent PLUS Loan, on average.

If you took out a federal Parent PLUS Loan, you could face interest rates as high as 7.00%.

  1. Low interest rates – Depending on your credit score and income, you could qualify for a much lower rate with SoFi than you would with a federal student loan. SoFi student loans have fixed interest rates as low as 3.25% and variable rates as low as 2.58%.
  2. No origination or application fees – For borrowers who received their loans after October 2017, that fee is 4.264 percent of your loan amount. On a $10,000 loan, that means you’ll have to pay a fee of $426.40, adding to the cost of your child’s education.
  3. Career support
  4. Wealth advisors
  5. Member discounts – If you have a SoFi parent student loan and go on to take out a personal loan, mortgage, or another student loan with the company, you’ll receive a 0.125 percent interest rate discount on the new debt.
  6. Customer support

Loan Program Plans to Offer Students Prepaid Bank Cards (The New York Times), Rated: A

The Department of Education plans to provide students with a prepaid card that would hold surplus loan money that is not needed for tuition, giving the government and financial services providers a firsthand look at how students are spending those dollars.

Robinhood adds zero-fee cryptocurrency trading and tracking (TechCrunch), Rated: AAA

No-commission stock trading app Robinhood will let you buy and sell Bitcoin and Ethereum without any added transaction fees starting in February, compared to Coinbase’s 1.5 to 4 percent fees in the US. And as of today Robinhood will let all users track the price, news, and set alerts on those and 14 other top crypto coins, including Litecoin and Ripple.

Former Ripple Exec Invests $ 57.5 Million in Uphold (CoinDesk), Rated: A

Digital money platform Uphold today announced it has received a $57.5 million investment from former Fed Reserve senior analyst and Ripple chief risk officer Greg Kidd.

Goldman Sachs Teams Up With This Silicon Valley Upstart in Commercial Real Estate (The Motley Fool), Rated: AAA

Goldman’s strategic investments group, which makes venture-capital-like investments, now owns 80 portfolio companies.  One such company is Cadre, a fintech company involved in online commercial real estate investing that Goldman funded in its Series B, C, and D funding rounds. The start-up, which happens to be led by some Goldman alumni, also just received a $250 million investment from Goldman’s private wealth clients.

Cadre also charges its LPs less than a typical private real estate fund. These funds usually charge a management fee, often around 1.5%, as well as a 20% cut of the profits above an 8% “preferred” return to LPs. On Cadre’s website, it advertises a 1% “transaction fee” (I assume that’s based on a per-deal fee, like a broker would get) and then a similar 1.5% management fee, but no incentive fee. Cadre claims this fee structure will increase investors’ invested rate of return by over 2% compared with a typical fund, all other factors being equal.

Instant cash out comes to Venmo (Business Insider), Rated: A

Venmo, the PayPal-owned digital peer-to-peer (P2P) transfer service, is within 30 minutes) cash out their Venmo balance for a flat $0.25 fee.

Trump administration prepares to roll back key financial protections for consumers (MarketWatch), Rated: A

The new leadership has taken over at a time when consumers are struggling with credit-card, auto loan and student loan debt. They’re also worried about their personal data, after a 2017 breach at the credit reporting agency EquifaxEFX, +0.81%   exposed personal information of more than 145 million U.S. adults, including their Social Security numbers and financial accounts.

Mulvaney requested zero dollars for his second-quarter budget

The bureau already had $177 million in reserves, enough to cover the $145 million the bureau projected it would need during the second quarter, he said.

USA consumer bureau delays prepaid card rules into 2019 (AliveForFootball), Rated: B

The Consumer Financial Protection Bureau today finalized changes to its final rule on prepaid products, including an overall delay of the rule’s effective date until April 1, 2019 – an extension long sought by the American Bankers Association. The bureau also made changes meant to boost compliance with the rule and loosen rules on linking credit cards to prepaid accounts or “virtual wallets”.

The rule requires companies to disclose fees on prepaid cards and cooperate with consumers who discover unauthorized charges or errors.

Mastercard eyes biometric totality by 2019 (Fintech Futures), Rated: A

Mastercard says all consumers will be able to identify themselves with biometrics such as fingerprints or facial recognition, when they shop and pay with Mastercard by April next year.

StreetShares lands $ 23M for expansion, will look for new office space (Washington Business Journal), Rated: A

The veteran-oriented online lender will beef up staff and look to expand its government contracting offerings.

REIT Industry Veteran Talks About What to Expect from the Sector in 2018 (NREI Online), Rated: A

NREI: More specifically, what’s your take on how publicly-traded REITs will perform this year? Will 2018 be better overall than 2017?

Aaron Halfacre: In 2017, publicly-traded REIT performance was anemic relative to the S&P 500. I think that can be largely attributed to a few factors: big demand for large-cap “infotech” names driving the broader market, a meaningful sell-off in retail REITs and general market hesitation on REITs in front of the tax bill and Fed decisions. On a relative basis, publicly-traded REITs are well-positioned in 2018, not only from the fundamentals picture, but from a value perspective.

NREI: What about non-traded REITs?

Aaron Halfacre: I think 2018 could be as strong, or stronger, than what we saw in 2017. Personally, I am excited about the industry changes in the non-traded REIT space. It is a good thing to see Blackstone and Starwood entering the space while some of the traditional fee-hungry shops have bowed out—a good advocacy trend for the individual retail investor. Institutional-grade real estate choices without the… fee structures of yesteryear, combined with greater valuation transparency and an investment that is not correlated to the broader equity market — that’s a positive story for all of us who aren’t part of the 1 percent.

‘AI isn’t just technology, it’s good judgment’: Cathy Bessant on why banks need humans (Tearsheet), Rated: A

Bessant is transforming B of A into a technology firm and leading it into a future that requires humans to apply immense computing power to immense amounts of data — an artificial intelligence future. But like any every other technology executive, she’s facing a shortage of talent with science, technology, engineering and math backgrounds. The result is often departments hiring from other departments.

Bank of America will spend $600 million this year on cyber defense alone. It employs 1,200 people whose jobs are dedicated to nothing else but information security, although the company makes that “the job of every single employee,” Bessant said. But the caliber of the talent the bank hires is just as important as the technology it invests in, since they’ll be the ones that determine how to work responsibly with AI.

Bank of America Enters Car Subscription Space With Volvo (Auto Finance News), Rated: A

All of Volvo Car Financial Services’ loan and lease originations end up on Bank of America’s balance sheet, Hollodick explained, including subscriptions to Care by Volvo, which starts at $600 a month for an XC40 compact crossover.

2,000+ bank branches closed in US in 2017 (Fintech Futures), Rated: B

US banks accelerated their pace of branch closures in 2017, shutting down 2,069 locations (an 18% increase compared to 2016), according to CoStar, a US-based commercial real estate news site.

3 Industries that can benefit from alternative credit data (MicroBilt), Rated: A

Although alternative credit remains a murky, unfamiliar concept to some, its adoption is slowly but steadily spreading. Some sectors may be particularly well-positioned to benefit from its use, and businesses under those umbrellas should consider adopting them if they haven’t yet done so.

Rally Rd collects $ 2.6 mln seed (PE Hub), Rated: A

Rally Rd., A marketplace for making investments in collector cars the same way you buy & sell stock, announced that it has raised a $2.6 million seed round investment from leading venture capital firms and individual investors.

The Unconventional Way This Man Paid Off $ 70,000 in Student Loans (Student Loan Hero), Rated: A

When Ray Laureano and his wife graduated from college, they left school with a staggering amount of student loans. Between the two of them, they were over $200,000 in debt.

Ray and his wife paid off over $70,000 in just one year.

A radical debt repayment strategy

Instead, he talked to each loan servicer and entered the lower-interest loans into forbearance; in other words, he paused payments on those loans.

With his other debt payments on hold, he put all of his extra money toward just one loan with the highest interest rate. When that loan was fully paid off, he tackled the next highest-interest debt, and so on.

Ray estimates that they will be debt-free by March 2020.

Enacomm Inks Reseller Agreement with Telvoyant (GlobeNewswire), Rated: B

Data intelligence and advancements in communications technologies are helping financial institutions dramatically improve the customer self-service experience. Enacomm, Inc., a leading provider of intelligent interactions and customer authentication technologies for banks, credit unions and credit card companies, today announced a new partnership with Telvoyant, a premier telecom consulting firm providing comprehensive telecom solutions for business, non-profit organizations and government institutions. Through a reseller agreement between the two companies, Telvoyant’s bank and credit union customers will be able to take advantage of Enacomm’s VPA (Virtual Personal Assistant) banking and the Enacomm Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

United Kingdom

What will RateSetter look like without unsecured business lending? (P2P Finance News), Rated: AAA

Consumer loans still make up the lion’s share of RateSetter’s £2.2bn loan book, while its commercial arm – both secured and unsecured – makes up 9.8 per cent, equating to £223.4m.

Of 2,213 commercial loans in total, including those that have been paid and repaid, 1,622 were unsecured and 591 secured as of the end of last year.

But its secured loans tend to be larger. 42.5 per cent of the value of RateSetter’s commercial loan book are listed as unsecured. This represents £95.1m worth of unsecured business loans compared with £128.2m of secured business loans.

UK Federation Of Small Businesses Says AltFin Is Just Heating Up (PYMNTS), Rated: A

The not-for-profit Federation of Small Businesses (FSB) has been a vocal proponent of faster SMB payment times, greater access to more robust banking services and tighter regulation in support of small businesses across the U.K. Most recently, the FSB announced plans to join the alternative finance world and establish the FSB Funding Platform, a marketplace lending portal through which small businesses can access funding from more than 100 lenders.

The FSB’s own research on small business finance, outlined in its Q4 FSB Voice of Small Business Index, found that fewer SMBs were concerned about their access to finance in Q4 2017 than they were in the same quarter of 2016. For the first time since Q1 2012, the FSB’s credit availability index has surpassed its credit affordability index.

And yet, according to the report, small business confidence fell into negative territory, with 73 percent of SMBs reporting a rise in the cost of doing business.

Does cutting-edge technology require a new approach to insurance? (techworld), Rated: A

Digital Risks, an insurtech startup launched in 2014, focuses solely on providing insurance to startups working in the digital, media and tech space.

“We insure things like challenger banks, peer-to-peer lending, payments, medtech, teleadvice, fraud detection, cyber security software, and sharing economy businesses,” Rose adds. “The general focus is around technology.”

Digital Risks doesn’t provide insurance itself – rather, it acts as a broker between companies and a group of about 20 different underwriters.

Lendinvest backs £12m Leeds-based PRS scheme (Specialist Lending Solutions), Rated: B

The specialist property finance lender has completed a £12.5m financing deal with KMRE Group to build 111 new homes in Kirkstall, in a private rental sector (PRS) scheme.

The whole development will be managed as a PRS scheme, and was forward sold before construction commenced to a £300bn investment management group.

International

AltFiData Predicts Strong Growth for Marketplace Lending in the US in 2018 (Lend Academy), Rated: AAA

Today, leading data analytics provider for marketplace lending, AltFiData, released the total origination numbers for the UK, Europe and the USA. They are predicting solid growth for the industry in all three regions in 2018. The new loan volume for the USA in 2018 is expected be $38.9 billion, a year on year increase of 46%.

Still, I think 46% growth is a little on the high side for the four companies covered here but I expect we will get close to those numbers. Interestingly, AltFiData is expecting the UK industry to grow at 43%, slightlty slower than the USA, and Continental Europe to grow at 73% off a much smaller base.

Investing on the Mintos Secondary Market – Hint 2 – Buying overdue loans at discount (P2P-Banking), Rated: AAA

I get a result of 349 loans with various discounts and an YTM of up to 14%. Not surprising for me, many of the loans listed at the top are Mogo loans.

Source: P2P-Banking

If these loans do pay up and then run till regular maturity date, then he recieves a yield of 12.4% to 13.8%. Decent, but not very high compared to other Mintos loans.

However there is a chance of at least 50% that these loans will default and are bought back within the next 30 days. If that happens to a loan, that a buyer bought at 0.3% discount, it will boost his yield very roughly by more 3.6% (0.3% for 30 days multiplied by 12 to get annual effect). Likely it is more because the next payment date will be less than 30 days away. But even taking 3.6% the yield will be around 17%.

The loan with the 0.6% discount would mean a boost of very rougly 7.2% yield on top (0.6*12). So that could lead to about 20% yield.

Global Venture Capital Investment Market – Top 3 Trends by Technavio (BusinessWire), Rated: A

According to Technavio analysts, the global venture capital investment market will grow at a CAGR of more than 27% during the forecast period.

The three emerging market trends driving the global venture capital investment market according to Technavio research analysts are:

  • IPO market gains momentum
  • Growing portion of new investments in China and India
  • Increased participation from mutual funds, hedge funds, and banks in the VC market

In 2017, a lot of major startups such as Cloudera, China Rapid Finance, and Okta came up with IPOs. Most of the companies issuing IPOs were technology-focused and were software and cloud service providers.

During the forecast period, the Americas was the leading venture capital investment market with a market share of more than 56%, with the US being the leading country in the region.

Source: BusinessWire

Crowdfunding – Raising Billions (BW Disrupt), Rated: B

Equity crowdfunding has also become legal in countries like United Kingdom, France, Austria, Germany, Netherlands, Australia, Hong Kong and the U.S. with President Obama legalizing the equity crowdfunding by signing the JOBS Act into law.

Source: BW Disrupt

The Crowdfunding statistics for 2017 reports a global amount raised for $34 billion, broken into $25 billion through peer-to-peer lending, $5.5 billion through reward and donation and $2.5 billion through equity crowdfunding. The projection of the crowdfunding industry is expected to grow over $300 billion by 2025.

Australia/New Zealand

Big banks, biased financial advisers, and the three tricks to avoid them (The NewDaily), Rated: AAA

This week the big banks got more bad press when the corporate regulator ASIC declared that their huge networks of financial advisers were failing to operate in the best interests of their customers.

The report, which covered the financial advice arms of the Commonwealth Bank, Westpac, ANZ, NAB and AMP, found that an astonishing 75 per cent of advice provided was not in the best interests of customers.

And in 10 per cent of cases, consumers were actually worse off than they would have been if they hadn’t got advice.

PledgeMe announces new crowdlending-inspired platform in the works (bizEDGE), Rated: A

PledgeMe has jumpstarted the year with the announcement of the launch of a new lending platform they will be offering.

The Ta Koha platform will be based on a crowdlending model in partnership with the Māori Women Development Inc (MWDI).

India

Innovative products pay off for e-lending startups (ET Rise), Rated: A

After payments, digital lending as a space is at the vanguard of innovations, driven by a clutch of startups seeking to take formal lending to a customer segment that never got easy credit from banks.

From a digital EMI card to instant personal loans and a line-of-credit product, new-age disruptors such as Stashfin, Kissht, and Antworks, along with their established peers Paysense and Moneytap, are trying to generate traction through innovative lending products. Mumbai-based Kissht is financing consumption requirements of low-income households with a digital EMI card that can be used to make payments directly.
“There are around 40 online merchant partners and 2,000 points of presence accepting the Kissht EMI card across businesses like electronic stores, furniture shops and others,” said Krishnan Vishwanathan, chief executive of Kissht. Another Delhi-based startup, Stashfin, is also targeting consumers with income levels between ?20,000 and 1 lakh per month.
Asia

W11.2tr earmarked for midrange borrowers (The Korea Herald), Rated: AAA

South Korea’s Financial Services Commission said Thursday it plans to circulate a combined 11.2 trillion won ($10.6 billion) this year for local retail borrowers that hold midrange credit scores while having trouble finding corresponding loans.

The FSC pledged to pour a combined 8 trillion won into state-run loan products sold at banks, including those designed for refinancing. The remaining 3.2 trillion won will be spent to encourage private banking institutions to develop and sell midrange loan products this year, and the volume of support is expected to gradually increase, according to the plans.

By 2022, the government’s annual financial support for five commercial banking groups — Shinhan, KB, KEB Hana, NH and Woori — will increase by 2.5 times to 2.4 trillion won from 2017, according to the plans. Direct banks Kakao Bank and K Bank received 900 billion won in 2017, and the volume will increase by 3.5 times to 3.1 trillion won in 2022.

Africa

SelfKey Receives Regulatory Sandbox License in Mauritius (Crowdfund Insider), Rated: B

SelfKey, a blockchain-based digital identity firm, has obtained a Mauritius’ Regulatory Sandbox License (RSL), according to information provided by the company. This license will allow SelfKey to develop their self-sovereign digital identity wallet and financial services marketplace under supervision and scrutiny of the Board of Investment of Mauritius.

Authors:

George Popescu
Allen Taylor

Solving the Student Loan Problem for International Students

U.S. international students

The most common and pertinent issue facing an international student looking to study in the United States is securing credit for various needs like tuition, credit card, and buying a car. The stress of settling in a new country coupled with finding the best loan option can be a daunting task. Nomad Credit realized there […]

U.S. international students

The most common and pertinent issue facing an international student looking to study in the United States is securing credit for various needs like tuition, credit card, and buying a car. The stress of settling in a new country coupled with finding the best loan option can be a daunting task. Nomad Credit realized there is a void with regards to helping international students and visa holders (H-1B, L1, etc.) find credible lenders, and vice-versa. Nomad Credit’s search engine provides comparable options for the credit seeker to compare and decide the best possible loan option for them. It functions as a pure marketplace.

International Student Analytics

The number of international students in the U.S. grew by 7.1% and crossed the 1 million mark in the 2015-16 academic year. China (328,547) is the biggest contributor followed by India (165,918), Saudi Arabia (61,287), South Korea (61,007) and Canada (26,973). In total, there are approximately 5 million international students around the world, and by 2025, the number is expected to reach 8 million.

Source: NewAmericanEconomy.org

Economic Benefit of International Students

Source: NAFSA.org

As per the latest NAFSA’s analysis, 1,043,839 international students contributed $32.8 billion and supported more than 400,000 jobs in the U.S. economy during the 2015-16 academic year. That means for every seven international students enrolled, three U.S. jobs are created.

Source: NAFSA.org

All of the above highlights the definitive impact international students have on the economy of the host nation. But the hurdles these students face in accessing credit is remarkable. Though they are a riskier credit bet as compared to local students, shutting down a multi-billion dollar market is just not feasible.

Introduction to Nomad’s Specialized Marketplace

Nomad Credit has its headquarters in Chicago and was launched in 2017. Founder and CEO Brian Hoffman initially launched a plain-vanilla education loan company, following SoFi’s footsteps. But soon the company’s focus changed from refinancing student loans to funding international students. It aims to find the right financial product for international students and/or visa holders currently or planning to live in the U.S. The main visa holders it serves are F1, J1, L1, and H-1B visas.

Prior to Nomad Credit, Hoffman worked as an analyst at Sagence, a management advisory firm. In the beginning of this year, the company managed to raise $125,000 in angel funding.

Business/Revenue Model

The underlying business matrix is similar to already established fintech loan marketplaces like Lending Tree or Credit Karma. Nomad gets paid from partner lending companies for providing leads or customers. Payment structure may vary as it also deals with lenders based out of the United States, but could include a percentage fee, fixed fee per customer, monthly fee, or fee per led. This flexibility in payment options is necessary for serving and partnering with multiple lenders in different parts of the world.

The company has invested its resources to help find international students find the right combination of lender, insurer, and other financial services depending on their needs. It uses a simple questionnaire focused on the school, degree, original location of the student, and other personal information.

Partners and Unique Selling Proposition

The young company has managed to stitch up multiple partnerships with 11 financial partners, 2 insurance companies, and one international payments company. Adding insurance to its list of services was a no-brainer as international students are simultaneously looking at travel, medical, and renter insurance.

Though there are established players in the overall education and marketplace segment, such as Credible and Lending Tree, what sets Nomad Credit apart from its competitors is its specialization on becoming the one-stop shop for international students. It is the only company that is directly dealing with the U.S. as well as Indian lenders and is in the process of onboarding Chinese lenders. Though there is little competition from traditional lenders in India, well-funded Indian tech startups like BankBazaar are also turning their attention to student loans.

Nomad Credit’s Ideal Customer

Though the company is only 4 months old, it has managed to generate a lot of interest among international students while website traffic has been increasing two- or three-fold every month. It uses various marketing tools in India like advertising through partnerships, using paid ads, and blogging, and will be adding a student forum soon.

Anyone from Asia or African country coming to the United States to get an advanced degree like MBA or M.Eng (Masters in Engineering) is a prospective customer. Lenders prefer students who are studying MBA or M.Eng because those are highly employable and lucrative degrees, and there is lesser chance of default.

Though the company is based out of the United States, it has consciously decided to serve the entire international student ecosystem and not just students looking to come to the U.S. It has originated a lot of loans for students from India going to Germany or Singapore for higher studies.

Future Headwinds and Goals

Sallie Mae funds almost 95% of the U.S. student loan market. This has stifled innovation and made it imperative that Nomad targets markets where government entities are not the biggest players in student loans. Massive markets like India fit the bill; there is a lot of potential as the majority of the market is still untapped. That is the reason why this young startup sees more value in going after Asian countries.

Once the company is able to establish a firm footing in India, it wants to further expand into China and Nigeria. It aims to form partnerships in more and more countries so that it is able to serve a wider range of the population. Moving forward, it wants to further improve its technology as well its products so that it can cater to people from different cultures with unique needs. Integrating multiple languages into the platform is an important step toward that vision.

There are roughly 5 million international students today. They have more than doubled since 2000 and represent a hundred billion dollar opportunity for the financial services industry, currently being overlooked due to the fragmented nature of the customer base. Nomad Credit has been able to envisage the power of uniting this global industry on one platform and with funding and proper execution can actually target one of the last few untapped pockets of the alt-lending industry.

Authors:

Written by Heena Dhir.

Allen Taylor