News Comments Today’s main news: BlockFi hits $25M in deposits in 2 weeks. Cash-back ETF injects trouble into ETF market. PeerStreet expands product line. Funding Circle fund higher impairments drag returns. Dianrong blames Chinese regime for troubles. Today’s main analysis: New home equity loans do not significantly alter credit scores. Today’s thought-provoking articles: SoFi Money review. Can Citi, JPMorgan beat […]
Can Citi, JPMorgan compete with fintechs on personal loans? Fintechs had 36% of the personal loan market in 2017. Can big banks make a comeback? I think their efforts in doing so are going to make this a much more competitive market. Can alternative lenders continue to grow with streamlined processes and leaner teams?
BlockFi Lending LLC, a New York-based “secured non-bank lender” that provides cryptocurrency-backed loans in USD to digital asset investors, has revealed that its interest-generating deposit accounts have received over $25 million in cryptocurrency.
SoFi Money is an online checking account by SoFi, a company best known for its student loan refinance loans. SoFi’s account has a top-of-the-line interest rate and no monthly or overdraft fees. There’s no free ATM network, but SoFi reimburses many third-party ATM fees and doesn’t charge its own. SoFi also boasts unique perks: free career counseling and financial planning sessions.
Can Citi and JPM beat FinTech Personal Loans? (PeerIQ Email), Rated: AAA
Home prices in the United States have rebounded to new highs since the financial crisis. As a result, American homeowners are sitting on the largest amount of home equity in history — at just over $15 trillion dollars, according to the Federal Reserve.
The decline in scores averaged just 13 points. At the high end, scores declined by 24 in San Jose,Calif. The smallest decline was 5 points in San Diego. Borrowers had an average score of 735 to start, so the declines are quite negligible in terms of access to credit and may have marginal impacts on the cost of credit. The highest starting credit score was 752 in San Francisco, while the lowest was 712 in Indianapolis.
The decline took an average of 158 days to reach bottom, which is just over five months. St. Louis homeowners saw their credit scores reach their lowest points in an average time of 101 days (3 months), while the longest decline was for homeowners in Dallas at 211 days (7 months). Loans do not appear on credit reports immediately after closing. Typically, the lender starts reporting to the credit bureaus after your first payment, depending on the lender’s reporting cycle. Thus it may take about 60 days after closing or even longer for it show up and start affecting a score.
Scores recovered over an average of 163 days. This is also just over five months, so the time to fall and recover are about equal. The quickest time to recover was 102 days, or slightly over 3 months, in Cincinnati. Borrowers in Chicago had the longest recovery time of 243 days, just over 8 months.
Scores recover within a year and begin to move higher. The complete cycle to return to the credit score prior to the home equity loan takes 321 days, less than 11 months. The shortest cycle was in St. Louis at 211 days and the longest in Chicago at 443 days, about 15 months.
Last week, one ETF upstart created a minor splash by doing what was once unthinkable — offering to pay investors to buy into its exchange-traded fund. That comes on the heels of eight fund providers — including JPMorgan Chase, Vanguard and BlackRock to name a few — all slashing fees in one of the industry’s most aggressive rounds of price cuts to date.
The sub-zero fee giveaway by Salt Financial, which previously ran a single $11 million ETF, is widely seen as a marketing gimmick to drum up a little PR, get customers in the door and increase its assets under management. During the first year, investors will receive 50 cents for every $1,000 in a new low-volatility stock ETF — until it grows to $100 million. After a year, a management fee of 0.29 percent, or $2.90 per $1,000, could kick in.
The race to zero, however, is very real. Fidelity Investments jump-started the no-fee push in August by offering index funds for free. In February, SoFi said it would waive charges on two planned ETFs for the first year. Last week, JPMorgan started selling America’s cheapest-ever ETF for the princely sum of 20 cents for every $1,000 invested. And BlackRock unveiled plans Wednesday to cut fees for large clients in one of its S&P 500 indexed mutual funds.
PeerStreet, a platform for investing in real estate backed loans, today announced the launch of a new loan product for private lenders: Residential for Rent loans. Residential for Rent loans have a 30-year term so borrowers can secure long-term financing for residential rental properties. This launch is in response to key market conditions: as more people struggle to finance buying a home, the rental market has continued to grow.
One-quarter of families don’t complete the FAFSA, according to Sallie Mae’s 2018 How America Pays for College survey. Of those that don’t fill it out, 48 percent say it’s because they don’t believe they’ll qualify for financial aid.
But they’re often wrong: An analysis by NerdWallet found that in 2017, students left an estimated $2.3 billion in federal financial aid on the table by not filling out the FAFSA.
According to Elaine Rubin, senior contributor and communications specialist at private student loan marketplace Edvisors, most Americans are eligible for some type of federal aid. In fact, it’s available to anyone with a household income below $250,000 per year, CNBC reported.
An 8-year-old class action that wreaked havoc on the online lending industry is finally winding down, but the lobbying push in Washington to undo its impact shows no signs of abating.
Lawyers in the case have filed a proposed settlement that would provide $9.8 million in cash and debt relief to as many as 58,000 consumers, setting up the final chapter in a lawsuit that is likely to be remembered best for the legal precedent it established.
The stock of X Financial (NYSE: XYF) jumped more than 5 percent Tuesday morning, to $6.55 per American depositary share, after the peer-to-peer lending marketplace announced improved revenue and profit for the fourth quarter, as well as a dividend for 2018.
The Shenzhen-based company, which connects borrowers and investors on its platform, reported in a statement Monday evening that its revenue grew 18 percent year-over-year to $125.5 million during the three months through December.
Its net income, X Financial said, was $35.2 million, or 22 cents per share, at a 53 percent increase from the same period of 2017.
If you look at the graph below, 5% of S&P 500 companies hold more than half the overall cash; the other 95% of corporations have cash-to-debt levels that are the lowest in data going back to 2004, according to Wells Fargo research. We know who those 5% are — they are the GAFA companies: Google, Amazon, Facebook and Apple.
News Comments Today’s main news: Preview of OnDeck’s Q3 earnings. Credit Karma acquires Noddle from TransUnion, expands into UK. Lufax to move P2P lending to the blockchain. WeBank hits $21B valuation. Linked Finance loans up 63%. Nubank now worth $4B. Today’s main analysis: The unbanked approaches banking like everyone else. Today’s thought-provoking articles: HSBC, Barclays bucking the trend. International P2P lending […]
QED Investors has raised its largest fund to-date. QED raised $175 Mn in its fifth fund which is focused on early-stage FinTech. QED also released their first quarterly newsletter. (Subscribe here) Matt Burton, the founder and CEO of the Orchard platform, joined as a partner and will lead QED Belay, the newly formalized founding stage investment platform.
SoFi and Marlette are issuing their fourth Consumer Unsecured deals of 2018. SCLP 2018-4 is a $549 Mn securitization. KBRA has rated the tranches A to D AAA, AA+, A+ and BBB respectively. SCLP 2018-4 is the first consumer unsecured deal to receive a AAA rating. MFT 2018-4 is a $266 Mn securitization. KBRA has rated the tranches A to C AA, A, and BBB- respectively.
HSBC and Barclays Leaning In, Marcus and Discover Pulling Back
HSBC and Barclays are launching new unsecured personal loan products. These products will complement the banks’ existing US credit card offerings while competing head-on with Marcus on its home turf. HSBC and Barclays are looking to capture a piece of the $140 Bn personal loan market, that is growing at an annualized rate of eighteen percent.
Discover and Marcus are cautious about the growth in personal loans and the potential for higher losses. GS will temper Marcus’s origination growth and not “chase volume targets”. We note that GS is the only bank whose provision for loan losses increased in Q3 – GS provisions rose by 172% YoY to $174 Mn, while loans grew by 72% – far outpacing loan growth (and what might be expected from loan seasoning).
When community advocates ask banks to provide accounts for the estimated 63 million people in the U.S. who are unbanked, bankers typically raised two concerns.
Both arguments appear to be shot down by a new trove of data collected from four of the largest banks: Bank of America, JPMorgan Chase, U.S. Bank and Wells Fargo.
Seventy-four percent of the 3 million previously unbanked people who opened accounts at the four banks in the past year are digitally active. In fact, they are heavy users of online and mobile banking. They are statistically no more likely to call or walk into a branch than existing bank customers.
Financial technology startup Credit Karma said on Tuesday it is expanding into insurance through a new service that makes it easier for users to find cheaper auto insurance policies.
The tool generates suggestions by analyzing government information on drivers and vehicles together with data from credit bureaus and public insurance rate filings, bypassing the need for users to manually input information into long forms, the company said.
ForwardLine, a nationwide direct lender providing affordable loans to small businesses, has announced strong results for third quarter 2018, achieving a 350% increase in loan originations over third quarter 2017. The company attributes its growth trajectory to strategic investments in technology, enhanced analytics, and an improved overall customer experience.
Online mortgage lending has been a very large part of NBKC Bank’s business model, and remains so.
Now, people in all 50 states can apply online for a mortgage from NBKC. Its originations run between $2.5 and 3 billion annually, and the bank is one of eight mortgage lenders on Costco’s nationwide platform.
AGORA Data, Inc., a secondary loan marketplace based in Arlington, Texas, announced today, the release of the first-ever Loan Validation Report for seasoned loans. AGORA’s proprietary technology enables car dealers and finance companies to avoid compliance issues with the Truth in Lending Act (Regulation Z), by assessing in real-time any issues with the terms of a loan, either at the portfolio or individual loan level. This includes assessment of the loan APR, Finance Charges, Principal Balance, Total of Payments, Unearned Interest and Gross Balance. Violation of Regulation Z can lead to significant penalties and other legal issues.
Roostify, a leading digital lending platform provider, announced today that Courtney Keating Chakarun has joined the company as Chief Marketing Officer. Chakarun comes to Roostify from CoreLogic, where she served as Senior Vice President, Marketing & Innovation.
PeerIQ, the leading provider of risk analytics for consumer credit, today announced that Liberty Lending, a leading online platform that provides innovative borrowing solutions to deserving consumers, has entered into an agreement to license two PeerIQ products: Consumer Credit Suite and Analytics Platform.
Credit Karma, the US startup with 85 million users that offers credit reports and a platform to browse and buy other financial services, has made an acquisition to help it kick-start its first overseas expansion beyond the US and Canada: it has acquired Noddle, a UK-based credit reporting service with 4 million users, from TransUnion.
Financial terms of the deal are not being disclosed, but Valerie Wagoner, Credit Karma’s VP of International (who had previously been at Twitter), said that it will be a full acquisition of tech and employees — 35 in all — and TransUnion is not taking any stake in Credit Karma as part of this deal, although the two will continue to work together with TransUnion providing data to Credit Karma, as it had done before.
As a point of reference — and a sign of the consolidation and competition in the market — earlier this year Experian acquired another credit scoring service in the UK, ClearScore, for the equivalent of $385 million. That service has 6 million users compared to Noddle’s 4 million. Competition authorities are still investigating that deal, and Credit Karma’s will also have to get the pass from regulators before closing.
Experian is launching a new range of services to help lenders evolve their approach to making consumer credit decisions, so businesses can make more informed decisions and deliver fairer, more affordable outcomes for their customers. It’s now possible to take a multi-dimensional view of a borrower’s financial health with Experian Credit 3D.
Knowing a consumer’s credit information at a single point in time only offers a snapshot of their financial behaviour. However, by using innovative trended and alternative data sources via ExperianCredit 3D, businesses can access an unparalleled set of insights, enabling faster decisions based on a more rounded picture of affordability.
UK based flight search site Alternative Airlines, has put the cat amongst the pigeons with an announcement of a new deal with Affirm to roll out what the American company describes as its “fair and honest alternatives” to traditional payment options.
The new partnership will see customers pay for their flights in instalments, instead of one single tranche. Giving them the opportunity to plan ahead and even open up a travellers horizons by giving them a chance to experience more wide-ranging trips, with the US customers able to divide fees over three, six and 12 months instalments.
Tencent-backed online lender WeBank Co. Ltd. has reached a sky-high valuation of 147 billion yuan ($21 billion) after less than four years in operation, becoming one of the world’s largest “unicorn” companies.
The new valuation is based on a legal document attached to an auction notice on Taobao.com, which described the upcoming auction of a minor stake in WeBank.
WeBank’s latest valuation makes it the fifth most valuable privately-held company in the world, based on the CB Insights list.
Of the 29 virtual bank licence applications before the HKMA, submissions have been made by WeLab, HKT, Standard Chartered Bank, as well as an alliance between Australia’s Airwallex, Bank of East Asia (BEA), and mainland firm Sequoia Capital China.
There are 21.43 bank branches and 50.09 ATMs for every 100,000 residents in Hong Kong, higher than the global city average of 12.6 and 47.55 respectively in 2016, according to World Bank data.
LendUp’s mission is to provide anyone with a path to better financial health. Through its proprietary software, it designs safe, transparent products that expand access, lower costs, and provide credit building opportunities for the population of Americans who currently have limited options within the traditional banking system because of low credit scores and income volatility.
More than 500 fintech aficionados hit the swanky Peninsula event space in Melbourne’s Docklands last week for the third annual Intersekt festival.
The three-day shindig, organised by FinTech Australia, debated topics such as how start-ups can capitalise on the loss of trust in incumbent institutions (exacerbated by the banking royal commission); and the extraordinary rise of “neobanks” around the world.
Anthony Eisen, co-founder of local payments star Afterpay, and Chad West, the marketing head of globally focused neobank Revolut, explained how they have lured customers by reinventing traditional fee models.
LARGE unexpected expenses are hitting the household budgets of two-thirds of Australians, and many are resorting to dangerously expensive credit cards to get themselves out of a financial jam.
Cars are the biggest cause of unpleasant financial surprises, according to new research by marketplace lender SocietyOne, followed by travel costs and medical bills.
The lender’s When ‘It’ Happens report reveals that 40 per cent of people would cover unexpected costs by borrowing money from family and friends, almost 20 per cent would add the expense to their mortgage, 31 per cent would sell stuff, and 28 per cent would take on extra credit card debt.
Iwan Kurniawan, 28, Indonesia; Reynold Wijaya, 29, Indonesia Co-Founder, Modalku
Together with Kelvin Teo, Iwan Kurniawan and Reynold Wijaya founded Indonesia-based Modalku, called Funding Societies in its sister operations in Singapore and Malaysia, a peer-to-peer (P2P) digital lending platform that connects cash-strapped SMEs with lenders. The startup is backed by Sequoia, Softbank Ventures Korea, and Alpha JWC Ventures, and recently passed the US$110 million mark through more 3,000 loans to businesses in the region.
Rachel De Villa, 25, Philippines Founder and CTO, Cropital
Rachel De Villa is the co-founder and CTO of Cropital, a crowdfunding platform that helps finance local Filipino farmers. Established in 2015, Cropital aims to improve the income and productivity of farmers through crowdfunding, providing scalable and sustainable financing. Through Cropital’s online platform, investors choose a farm or farms to invest in. Cropital manages the fund for the farmer making sure it goes to the right resources, assuring as well that investors will get a return on investment.
Abraham Viktor, 25, Indonesia Co-Founder and CEO, Taralite
Abraham Viktor is the co-founder and CEO of Taralite, a P2P lending platform. Taralite’s loans are issued by financial institutions other than banks, also known as multi-financers, which allows it to reduce the interest rate up to 2% and extend the loan period of up to three years. The platform accepts houses, cars or motorcycles as collateral. Founded in January 2015 as Wedlite, Taralite graduated from startup incubator program Global Entrepreneurship Programme Indonesia (GEPI) in November 2015. Previously, Viktor was an investment banking analyst, first with Boston Consulting Group and later at Nomura investment banking.
Mohamed Abbas, 27, Singapore Co-Founder, Rely
Mohamed Abbas is a tech entrepreneur and the co-founder of Rely, a startup that enables online shoppers to shop and pay for their purchases by splitting their cost into manageable monthly payments, interest-free. Abbas is also the co-founder of Onelyst, an online marketplace that helps users from lower-income brackets compare loan rates across different licensed moneylenders. The website allows users to find loans for different purposes, such as medical or rental expenses, and produces a list of personalized options in minutes.
The federal government announced during the tabling of Budget 2019 on Friday (2 November) that it will introduce a “property crowdfunding” platform by Q1 2019 to help Malaysians buying their first homes, reported Bernama.
On Sunday (4 November), Prime Minister Tun Dr Mahathir Mohamad said the scheme is the first of its kind in the world, and will enable people to buy a home as long as they can a pay the 20 percent down payment, which can be financed via savings, debts or withdrawals from their Employee Provident Fund (EPF) account. The remaining 80 percent will be funded by investors via peer-to-peer lending supervised by the Securities Commission.
Dubbed as FundMyHome.com, the property crowdfunding platform is expected to help the Pakatan Harapan administration fulfil its election promise of one million low-cost housing within 10 years.
CIMB and Maybank are the participating institutions that will contribute towards the externally funded 80-percent portion of the house price, with more expected to sign up in the future.
The site – developed by finance and real estate media platform The Edge – will list about 1,000 homes costing less than US$120,000 during the first phase of its rollout. All properties listed will be completed or near completion, and buyers looking for rental income will be allowed to “buy to rent” through the portal.
News Comments Today’s main news: New York sues OCC. SoFi prez to leave for biotech firm. RateSetter clarifies types of lending. Prudential chairman to join RateSetter. JP Morgan launches virtual branch in China. BNI Europa invests in MarketInvoice. Nubank reports $39M net loss. Today’s main analysis: How bad Brexit will be for UK households. Alt lending deals on pace for new low. […]
New York regulator sues OCC over fintech charter. AT: “First, Colorado. Now, New York. My bet is, more states will follow. The Trump Administration seems poised to side with the states. The fight over who has the power to regulate fintechs isn’t going away any time soon. In fact, it will only grow hotter.”
SoFi’s 2017 nursing school rankings. AT: “Regardless of major, there seems to be an interest in a certain class to attend schools based on reputation. I appreciate SoFi’s college rankings because they illustrate the value is not necessarily tied to a school’s reputation. In a pure money sense, value is tied to earnings after graduation against what you paid for the education. These studies force us to think of college as an investment rather than a rite of passage. Isn’t that how it should be?”
New York’s banking regulator on Friday sued the U.S. Office of the Comptroller of the Currency over its decision to offer special-purpose charters that would let online lenders and other “fintech” companies do business nationwide.
In the lawsuit, filed in U.S. district court in Manhattan, Maria Vullo, superintendent of the New York Department of Financial Services, called the decision to grant the national charters “lawless, ill-conceived and destabilizing of financial markets” that are properly and most effectively regulated by the state.
Weekly Industry Update: Future of Fintech & OnDeck Earnings (PeerIQ Email), Rated: AAA
PeerIQ held a panel discussion this Tuesday titled, “What’s Next in Fintech Lending” featuring speakers including moderator, Peter Rudegeair (WSJ), and panelists Ram Ahluwalia (PeerIQ), Zhengyuan Lu (Victory Park), William Black (Moody’s Investors Service) and Greg Nowak (Pepper Hamilton). Discussion centered on credit performance, regulatory developments, and company news. Access the full replay here.
OnDeck released earnings this past Monday. The stock was down 7% on earnings day and, remarkably, trades slightly above book value, fueling M&A speculation and investor interest. Gross revenues and loan loss provisions were up 48% and 82% respectively from the prior year period. Tighter underwriting criteria slowed origination growth to 1%. Guidance for sale of loans thru the marketplace channel reduced from 18% to 5%. Balance sheet funding is now central.
Our interpretation is that OnDeck is taking actions that are at least consistent with pursuing a bank charter:
Bank regulator friendly actions – OnDeck has gradually lowered rates over time, tightened underwriting, and announced a focus on profitability rather than growth (targeting 2018 GAAP profitability).
Increasing bank executive on board and management – Seasoned banking executive, Jim Rosenthal (former COO of Morgan Stanley), joined OnDeck’s board. Seasoned banking personnel are a key requirement ahead of any bank charter approval.
Continued focus on originating loans under the JPM bank-approved credit policy.
A PeerIQ analysis shows that a shift to deposit funding would create ~$30 to $40 Mn in savings by reducing financing costs from ~5.9% to funding costs observed in the brokered CD market.
The No. 2 executive at online lender Social Finance Inc. is exiting the company to take a senior job at a biotechnology startup.
Nino Fanlo, SoFi’s president and chief financial officer, is leaving the firm at the end of the month to take over as finance chief at Human Longevity Inc., a four-year-old genomics company, the two companies said. After that time, Mr. Fanlo plans to remain a board observer and adviser to SoFi.
On an interim basis, Mr. Fanlo’s duties will be assumed by Steven Freiberg, a former top executive at E*Trade FinancialCorp.ETFC -1.43% and Citigroup Inc. who joined SoFi’s board earlier this year. The company plans to launch a formal search for Mr. Fanlo’s successor.
The Consumer Financial Protection Bureau (CFPB) has kicked off an inquiry into the U.S.’ SME finance space to understand how lenders lend to small businesses — or even define what they are.
The bureau has requested information from industry stakeholders to kick off its inquiry and also released a white paper to explore SME lending, in which it concluded there is a “current lack of comprehensive data in this area.”
The bureau has requested information from industry stakeholders to kick off its inquiry and also released a white paper to explore SME lending, in which it concluded there is a “current lack of comprehensive data in this area.”
$34.2 trillion is held by the world’s shadow banking market, with the U.S. holding the most of that money than anyone else in the world, according to the latest data from the global Financial Stability Board (FSB).
57.4 percent of U.K. SMEs are unaware of alternative lending options, finds the newest analysis from Close Brothers in its Business Barometer. Just over a third, the report found, said they are familiar with how invoice financing works.
OnDeck shares fell 8 percent last week immediately following the alternative lender’s announcement that it would be increasing credit requirements further in an effort to boost long-term profitability.
The 1 percent decline in loan origination volume posted by Lending Club could have investors worried as analysts said progress for the alternative lender has, on a whole, stalled.
The 1 percent decline in loan origination volume posted by Lending Club could have investors worried as analysts said progress for the alternative lender has, on a whole, stalled.
Ron Suber of Prosper Marketplace to Keynote at LEND360 (Lend360 Email), Rate: A
Join Prosper Marketplace President Ron Suber on Thursday, October 12, at 9:00 AM CTas he discusses the opportunities on the horizon in marketplace lending and how non-banks are solidifying their role in providing financial services.
Ron will also explore how the industry can work together and invent ways to deliver much needed access to credit to millions of consumers and small businesses.
The New York State Department of Financial Services announced Thursday it will allow fintech companies to register through a common platform used by a majority of state regulators, marking another step toward better regulatory coordination that will help states compete with the Office of the Comptroller of the Currency’s fintech charter.
Founded in 2012, San Carlos California startup Upstart has taken in $85.65 million in funding so far from the likes of Peter Thiel, Mark Cuban, Google Ventures, and Khosla Ventures among many others. The Company first unveiled their peer to peer (P2P) lending product in May of 2014 and since then they have originated over $700 million in loans with an average loan size of around $12,000:
We’re not really sure what to make of that double-digit interest rate for a used car loan but that seems to be normal for Upstart since they claim that their average borrower pays 12% for a loan.
Whereas in peer-to-peer platforms like Lending Club you are allowed to select the loans you want to take part in for as little as $25, Upstart allocates loans to lenders randomly with a minimum requirement of $100. The minimum amount you need to invest to use the platform is $5,000 and that means that you have a 98.9% chance of achieving a rate of return greater than zero. You can also expect an average return of 5.8% using the platform.
From a lenders point of view, it doesn’t appear that AI gives you that much value add. You get around the same rate and the same likelihood of a positive return.
Back in September 2016 River North, an alternative asset manager based in Chicago, launched a new fund targeting income investors and offering exposure solely to marketplace – often called P2P – lending.
The fund is a registered 1940 Act closed-end interval fund dedicated to the rapidly growing marketplace lending online lending asset class.
Since inception, the fund has returned 4.46 per cent, which is largely inline with expectations.
Digital asset-based lender InterNex Capital (“InterNex”) raised $3.85 million from family offices and private investors in an oversubscribed seed offering. The convertible notes offering, which originally targeted $2.5 million, closed last week.
InterNex was founded in May 2015 by former GE Capital senior executives & fintech experts. The company’s digital lending platform offers small- and mid-sized businesses an optimized client experience while enhancing asset-based underwriting and monitoring reliability through integrated technology, data analytics and artificial intelligence.
Small- and mid-sized businesses are heavily underserved when it comes to their working capital needs. The seed offering closed on the heels of InterNex securing a $100 million debt financing from 400 Capital Management in late 2016 and growing its digital asset-based revolving line of credit financing solution. InterNex has funded over $5 million to its business clients to date.
The mean wage for registered nurses is $72,180 a year, and rises to over $100,000 for nurse midwives, nurse practitioners, and nurse anesthetists, who make a mean annual salary of about $164,000, according to the Bureau of Labor Statistics (BLS).
But nurses can also end up carrying tens of thousands of dollars in debt. Graduate nursing students have a median debt of $40,000-$54,999, according to a 2017 loan survey by the American Association of Colleges of Nursing (AACN). Just under a third have to swallow the bitter pill of owing $70,000 or more.
Nursing grads from all of our 10 least lucrative schools had more debt owed than salary paid.
It’s worth noting that one of our least lucrative schools–-Seton Hall University, one of U.S. News & World Report’s top 100 graduate nursing schools–-is in the same state (New Jersey) as one of our most lucrative schools, Fairleigh Dickinson. Seton Hall nursing grads earn an average of $87,510 a year, but have to pay back over 1.5 times as much.
It seems like every few months, or so, another article or paper appears that retells the history of online lending. Orchard published one a few years back, and I’ve written one or two on the subject before joining the team last year. And although I personally have no interest in retreading that ground anytime soon as a writer, I do keep up with the reading. The latest example, “When Markets Quake” Online Banks and Their Past, Present and Future,” comes out of the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School, written by Marshall Lux and Martin Chorzempa.
The authors paint a mostly positive picture of a rapidly evolving industry—acknowledging the fits, starts, and bumps experienced over its short lifespan, doubtless there will be more as we head into the next leg of the credit cycle but confident that the industry will survive (in one form or another) and that the innovation demonstrated by online lenders will likely continue to have “significant benefits for the financial economy.”
The pair also provides examples of how banks and online lenders are working together today. The 2016 partnership between Avant and Regions Bank resulted in a co-branded portal that channeled borrowers to one or the other company based on underwriting criteria, and SoFi has sold more than $1 billion of its loans to banks and insurers.
The co-authors also voice concerns about the risk of standardizing loans to allow for a more liquid secondary market via open-end funds—because of the liquidity mismatch between the open-end fund (often with daily liquidity) and the underlying asset (loans with three-to-five-year maturities).
AlphaFlow Adds Veteran Fintech Executive AdaPia d’Errico To Management Team (AlphaFlow Email), Rated: A
AlphaFlow, the first automated portfolio service for real estate investments, announced today that veteran fintech executive AdaPia d’Errico has joined the company as Chief Operating Officer to scale the investor platform and expand AlphaFlow’s customer channels. Ms. d’Errico is nationally recognized for growing businesses through brand advocacy and designing innovative platforms that build engaged communities. She has been at the forefront of real estate crowdfunding since 2014, advocating the power of increased transparency, education and technology to provide opportunities in real estate investments.
Ms. d’Errico’s career spans retail banking, investment management, intellectual property and brand development, and financial technology. Most recently she was Chief Marketing Officer at Patch of Land where she led brand, marketing strategy and operations, and built the investor platform. Prior to Patch of Land, she provided brand and online growth strategy services to consumer and media companies in the US and the UK, and co-founded two businesses. Ms. d’Errico has over 10 years of experience in banking and investment management with a focus on customer management, client communications and investor relations.
AlphaFlow continues to grow its team with key people from the marketplace lending industry; earlier this year the company hired Miles Deamer, an early LendingHome employee who scaled lending operations there. Mr. Deamer is responsible for portfolio management along with Mr. Sturm.
AlphaFlow Optimized Portfolios are a truly passive, highly diversified and fully transparent managed portfolio service, bringing to real estate what ETFs brought to stocks. For a low minimum investment, each client’s capital is invested in 1st lien real estate loans to produce a personal portfolio of 75-100 notes spread across 15+ states, selected, rebalanced and managed by portfolio managers with the help of smart automation, algorithms and analytics.
Fast-forward seven years and SoFi is on fire, the rare example of a startup that hasn’t seemed to flounder after advertising during the Super Bowl.
Whatever SoFi is doing is working. Cagney says the company originated $8 billion in loans last year, a figure that will double this year. He reckons the company will earn $200 million on a pre-tax basis in 2017 on revenues of $650 million.
For our 100th episode I thought we would do something a little different. We decided to bring the Lend Academy team (pictured above) together to get their perspective on their favorite episodes in the first 100 podcasts.
Customers looking to finance or refinance their vehicles through Ally’s newly launched auto finance marketplace, Clearlane, will soon be able to complete financing online through a new digital signing capability. Built on top of the industry’s leading digital transaction management platform, the SmartSign technology from eOriginal will be incorporated into the Clearlane platform in July 2017, and will allow customers to sign and submit their financing documents online or via mobile devices, facilitating a more efficient transaction.
DeVall, who served as Senior Vice President of Wells Fargo for two years, recently joined Tipalti, a California-based fintech company that seeks to simplify business to business transactions. He joined the company in March as its director of alliances and business development after a career of more than a decade in banking.
LendInvest, a leading specialist mortgage lender, has completed its largest development finance deal to date with an experienced borrower, who will build 66 new affordable homes in West Drayton, Hillingdon, a town set to benefit from a Crossrail station in 2019.
LendInvest has been working with the borrower since June 2016, when it provided a bridging loan to acquire the site, while the client applied for enhanced planning for 53 new homes. The borrower then transitioned to a £17m development loan to finance the construction.
The total loan provision for both sites is £21m, with the total gross development value forecast to exceed £31m.
makepositive, a London-based consultancy that helps firms to make better use of Salesforce, has raised £1m, made up of £800k in equity finance plus a £200k loan facility from P2P provider RateSetter Business Finance. The additional funding has enabled the business to invest in consultants, sales and marketing as well as in R & D to support the creation of new solutions on the Salesforce platform.
JP Morgan has launched a virtual branch in China. The service eliminates the need to be physically present at bank branches. JP Morgan hopes to reduce manual interventions and improve turnaround times through faster transaction processing.
P2P Industry News (Xing Ping She Email), Rated: A
DYCD and Jingdong Finance issued 625M RMB
On May 12th , Diyichedai, a Chinese P2P lending platform focused on auto loans, announced that they have jointed with Jingdong Finance to issue an 625 million RMB ABS of “Zhejing•Weirong-7 ABS trust plan”, and Zhejin Trust acted as trustee agency of the basic assets. The product was launched in otc structured financing market, consisted of ABS products based on used car financial assets.
According to DYCD, Jingdong Finance took part in the program as the credit monitoring services agency, monitoring the basic assets of duration in real time. Up to now, with the uproar of ABS origination in China, it has already become one of the most important source of finance for auto financing companies.
Yu’E Bao Rates Back to 4%, Banks Shrug
Recently, the annualized interest return for 7days of Yu’E Bao, the world’s biggest money funds, has reached over 4%. It is the first time for the rates back to this level after June 2015. Up to Q1 of this year, Yu’E Bao’s accumulative assets up to around 1.14 trillion RMB.
It was revealed that the reason for the increase of Yu’E Bao’s rates was based on the regulator intensifying control on the leverage ratio, along with the liquidity of the financial system has been keeping tightening. As one of the “Big 2” online payments in China, Alipay has been proposing the cash free time. However, unlike official banks, Alipay is not allowed to pay interests directly to their customers according to related Financial Regulatory Policy. Therefore, it created “Yu’E Bao” to provide financial services on Alipay account.
Since it opened for business in 2012, French lending startup Younited Credit has thrived by implementing strategic choices that ran contrary to common practice among lending marketplaces. It was the first of its kind (and still is the only one so far) to get a full banking license and to start fueling its growth through loan securitization.
What sets Younited Credit apart from its competitors is not so much its record growth, as how the company achieved it and how this positions it for the future.
Whereas other lending marketplaces opt for a broker or other financial intermediary status, and often, like Lending Club in the US and Auxmoney in Germany, use a fronting bank to actually issue the loans, Charles Egly and his partners decided that Younited Credit should get its own banking license, an agreement as a credit institution and investment service provider. This came at very high cost in terms of capital requirements, including €5 million in equity plus a €3 million buffer, as well as in financing the two years needed to obtain the agreement from the French regulator, the Autorité de Contrôle Prudentiel et de Résolution.
The faster Younited Credit grows, the more its needs large institutional lenders. Major international institutional investors such as the Dutch insurer Aegon, investment companies Zencap, Eiffel Investment Group and Hexagone Finance are investing through Younited Credit. The company favors institutional investors with patient money such as insurers, investment funds and family offices, rather than the more volatile ones, such as hedge funds.
Online property lending is becoming big business in the UK, generating £700 million worth of investment in 2015 alone. Newer entrants to the industry include Bricklane, which is selling its own property ISA, and Octopus Choice, which offers a target rate of 4.2 per cent.
A further boost has been provided by the introduction of the Innovative Finance ISA, which shields all P2P returns from tax, although only a handful of providers have regulatory permission to sell the product so far, including Lending Crowd, Landbay and LandlordInvest.
The trend is being driven not just by institutional investors but young web-savvy investors who are disillusioned with poor rates of savings. One P2P platform – ThinCats – reckons that millennials are four times more likely to choose this option as those aged over 55.
Property investors also need to note the difference between P2P lending and crowdfunding, which is the category that Housecrowd falls into. Haaris Ahmed, founder of property crowdfunding platform uOwn, said P2P lending consisted of property-backed loans where a lender will pay an interest rate that is “set in stone”, unless a borrower was to default.
Our 2017 event will be a little different to last year. Similar to what we have done at our USA event we are expanding to include other aspects of fintech beyond online lending. While we will still be covering lending in some depth we also want to highlight the innovations happening in other areas of financial services.
Early confirmed keynote speakers include Jaidev Janardana, the CEO of Zopa, Francesco Brenna, an Executive Partner at IBM Global Business Services and Shane Williams, the co-head of UBS Smartwealth. Our current confirmed speakers are here and if you are interested in becoming a speaker at LendIt Europe 2017 you can submit an application here.
The launch price of £795 is in effect until June 2nd, but as a Lend Academy reader you can receive an additional 15% discount by using the code LENDACADEMYVIP at checkout. The discount code is always good for 15% off but you will receive the best pricing if you purchase before midnight on June 2nd. You can register now on the LendIt website.
China Rapid Finance, which last year raised funds at a $1B valuation, went public last month at a $350M valuation.
Deals and dollars to alternative lending companies trended up between 2012 through 2015. Funding saw a 188% funding increase from $1.54B in 2014 to a record $4.43B in 2015 across 94 deals. But at the current run rate, 2017 will see a dip to approximately 42 deals worth $2.01B. And this funding run-rate is actually inflated by SoFi’s $500M Series F, which represents 73% of funding in the year-to-date. The full-year total could come in far lower than $2B.
Alternative lending companies saw both deals and dollars retreat on a year-over-year basis in 2016 with 78 deals worth approximately $2.45B in funding.
Digging into the quarterly data, Q2’15 saw a record 30 deals worth approximately $1.45B in funding.
Q3’15 was a record quarter for funding with approximately $2.14B invested across 24 deals.
When 28-year-old Karan Lalchandani had to take a call on expanding his investment portfolio, he steered away from the common options -real estate, equities and precious metal.Instead, he took a small loan on peer-to-peer (p2p) lending platform Faircent.
Lalchandani is part of a growing tribe of young professionals who, not happy with the rate of return or long lock-in period that traditional investment options have, are looking at the p2p lending model.
According to Rajat Gandhi, chief executive of Faircent, about 60% of the 10,000 lenders on the platform are under the age of 35, with a significant chunk being under 30. “Most 30-year-olds haven’t experienced a good asset class.This offers quick returns monthon-month,“ he said.
This trend has been visible across various p2p lending platforms like Lendbox and i2iFunding, many of which rely solely on social media to reach out to this lender profile. Chaudhary, for instance, came across p2p lending through a simple online search on investment options.
After dabbling in traditional investment avenues like stocks, fixed deposits, gold, mutual funds and real estate, some investors are
venturing into more adventurous territory—digital currency, crowdfunding and P2P funding—to make their wealth grow.
There are a little over 15 million bitcoins in circulation today and no more than 21 million will be mined ever, making the virtual currency attractive to investors. The rising demand for and lack of supply of have pushed up the price of bitcoins from $16 per coin in 2013 to $1,700 today.
P2P platforms have brought lenders and borrowers closer. Technology allows easy credit to borrowers, while lenders earn high returns on idle funds. Chennai-based Jose Joseph, 45, has been lending on P2P platforms since 2015. On the Rs 1 lakh he has put in so far, he has earned an average return of 20%.
Microfinance consists in providing of financial help to low-income families or individuals who traditionally lack access to banking and loans (a.k.a. the “unbanked”).
Going by the above, there is no relationship or link between microfinance loan product and peer to peer lending. Urban MFIs have a income household parameter of minimum 1.6 lacs per annum. Do they have an individual income parameter? If yes, they could partner with P2P platforms and lend on the platform.Going by what we have above, it is not possible to design a P2P platform to suit the needs of microfinance landscape. But it is a very important question to ask how MFIs can decrease their operational and transactional costs using technology. This is being addressed since almost 10 years with less success. Is it really possible to successfully implement BC/CSP model?
Nubank, Brazil’s biggest Fintech startup, reported a net loss of BRL 122 million last year. In 2015, the loss had been BRL 32.7 million. Operating income in the period was BRL 77.09 million, a significant expansion of BRL 10.4 million from the previous year.
In order to finance the operations with the rotary – whose rates vary from 2.75% to 14% per month – Nubank allocates part of its card receivables portfolio to a fund. The portfolio totals BRL 1.4 billion, while the receivables fund closed 2016 with approximately BRL 150 million.