Friday January 12 2018, Daily News Digest

bitcoin debt

News Comments Today’s main news: More LendingClub-IEG drama.Black Fish raises $145M.Moneygram partners with Ripple.Kreditech expands into India with Mambu. Today’s main analysis: JP Morgan Chase’s investments into digital technology.Is Yirendai undervalued? Today’s thought-provoking articles: Investors go into debt to buy bitcoin.Small business financing trends.How open banking could change how people manage money.Banks, trade finance, and […]

bitcoin debt

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United States

United Kingdom

China

European Union

International

India

APAC

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News Summary

United States

Lending Club has a bitcoin pivoting suitor (Financial Times), Rated: AAA

Lending Club has all kinds of problems: a history of profit warnings, faint traces of scandal after a management upheaval almost two years ago, and a share price still more than 80 per cent adrift from its peak.

Add to that list: a bizarre, crypto-fuelled activist campaign waged by a Las Vegas-based payday lender called Paul Mathieson, who told authorities in his native Australia that he fled to America in 2008 because he feared being killed by a mobster.

Mathieson’s case for change at Lending Club, laid out in a letter to the company’s board on 2 January, is not a terrible one, on the face of it. He argues that the cost structure at the loss-making company, a pioneer in peer-to-peer lending, is “excessive,” noting fancy headquarters in San Francisco and “hundreds” of “excess” developers. He says that the board should consider a pivot to using its own balance sheet to lend, rather than acting as a broker, taking fees for matching borrowers with lenders. Underwriting has been sloppy, he says, resulting in sub-par returns to investors.

Mathieson is offering 13 shares in his own penny-stock company, IEG Holdings, for every share in Lending Club. At the time of the offer on Monday morning, that was a premium of 19 cents, or about 5 per cent.

Source: Financial Times

SeeThruEquity Issues Update on IEG Holdings Corporation (Bay Street), Rated: A

IEG Holdings Corporation (OTCQB: IEGH) provides online unsecured consumer loans under the brand name “Mr. Amazing Loans” via its website, www.mramazingloans.com, in 20 US states. The company offers $5,000 and $10,000 personal loans over a five-year term at rates ranging from 19.9% to 29.9% APR. IEG Holdings plans future expansion to a total of 25 US states, which would cover 240mn people and represent approximately 75% of the US population.

Since 2013, IEGH has obtained additional state lending licenses, and they are licensed and originating direct consumer loans in 20 states including: Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. The Company was founded in 2010 and is headquartered in Las Vegas, Nevada.

IEG Holdings Plans to Create its own IEGH Crypto/Blockchain Currency Backed by Gold Metal and SEC Registration as a Security

IEGH announced that its wholly owned subsidiary, Investment Evolution Crypto, LLC (“Crypto”), is negotiating to purchase a gold project with gold metal in the ground and prospecting licenses. IEG Holdings plans to utilize a gold resource to investigate creating, through Crypto, and a joint venture with Investment Evolution Corporation, also a wholly owned subsidiary of IEG Holdings, its own gold metal-backed crypto/blockchain currency, and potentially offer loans and accept loan repayments in its own crypto/blockchain currency.

IEGH increases loan originations

The company stated that it provided $960,000 in new consumer loans through its online property mramazingloans.com, from the October 2017 to December 2017 period. This represented a 12.3% increase over its July to September 2017 operating period, during which the company’s new loan originations were $855,000.

Desperate to get into bitcoin, investors slip into debt (CNBC), Rated: AAA

Roughly 18 percent of people who buy bitcoin use a credit card to do so, according to a new survey by loan marketplace LendEDU. Of those, 20 percent have not paid off their balance. The phrase “buy bitcoin with credit” has been trending on Google for weeks.

Another problem with going into debt for cryptocurrencies is that people will have to pay back their debt before they see sufficient returns, said Erika Safran, founder of Safran Wealth Advisors. That may require tapping other resources, potentially creating further financial trouble.

Credit card debt from CNBC.

Small Business Financing Trends To Stay Abreast Of (CXO Today), Rated: AAA

  • Traditional bank loan rejections are notoriously high in all markets
  • Small Business Administration (and equivalent agencies) are nefarious for overextending the time-to-credit tolerances of small businesses
  • Volatility of markets, and exposure of almost all markets to disruption by startups could pose urgent cash needs for businesses, which are generally not considered for loan applications by traditional lenders.

Online Lending And Its Deepening Hold Over The Small Business Finance Market

In 2014, a Federal Reserve (US) survey concluded that one in five small business owners opted for loans from online lenders. Since then, the proliferation of online lending platforms has been on the surge, to the extent that traditional brick and mortar lending institutions have also had to move base to the online domain. In the coming years, multiple factors will result in the success and sustainability of online lending platforms. These include:

  • Growing confidence among small business owners to trust online lending platforms
  • Availability of cheaper, quicker, and more convenient loans
  • Options to truly personalize and customize the loan repayment terms to suit the business’ interests

The Call for Transparency in the Online Lending Market

Though the online lending market has been growing year on year, this doesn’t detract from the concerns around lack of transparency in the way some of these platforms operate. Some of the key concerns are around undisclosed APRs and hidden fees. In fact, some online lenders have been castigated for charging significantly high rates of interests from borrowers, often with service quality issues post-approval. Thankfully, there’s already some progress towards bringing a degree of regulation in place for online lending platforms to be at par with traditional lending regulations.

JPMorgan Chase Competitive Strategy Teardown: How The Bank Stacks Up On Fintech & Innovation (CB Insights), Rated: AAA

JPMorgan is making a bigger push into payments technology as digital banking becomes a strategic priority.

In 2016, the bank spent $9.5B on technology and Dimon has committed $300M alone to improve JPMorgan’s technology for its asset management products. Relative to its peer group, JPM claims the highest number of mobile banking customers and its Chase Mobile app currently sports a 4.7 (out of 5) rating in the App Store.

Earnings call analysis – Barclays, Bank of America, Morgan Stanley talking up digitization

  • JPM discussed continued digital consumer banking growth, which grew 6% in Q3’17.
  • Bank of America spent portions of its Q1’17 and Q3’17 talking about digital banking initiatives and technology investment. Specifically, CEO Brian Moynihan mentioned the bank spent $2.25B on technology initiatives in the first three quarters of 2017. The bank also now sees mobile devices account for 1 of every 5 deposit transactions.
  • On Morgan Stanley’s Q3’17 earnings call, Morgan Stanley CFO Jonathan Pruzan mentioned the bank is beta testing new customer-facing digital products it plans to launch, potentially in the robo-advisory space. Specifically, Pruzan noted: “When we think about our wealth business, it’s a business that’s built on scale. And it’s built on the fact that people with wealth want personal advice. So it’s going to be both a mix of technology and digital with the personal element of the advice channel. And we think that’s the winning formula going forward.”

Based on the data, JPMorgan ranks ahead of most bulge bracket banks when it comes to overall fintech investment since 2013, but behind its peers Goldman Sachs and Citi.

Online Marketplace Lender Nav Facilitated More Than 20,000 Small Business credit Approvals in 2017 (Crowdfund Insider), Rated: A

Nav, a small business marketplace lending platform, announced this week it has facilitated more than 20,000 small business credit approvals in 2017.

The company currently has more than 327,000 entrepreneurs now using its platform to manage their data and access capital.

Bono’s Fund Makes Its First Fintech Investment, Backing Acorns (Bloomberg), Rated: A

The Rise Fund, a private investment firm co-founded by the U2 lead singer, is making its first known bet on a fintech business by backing Acorns Grow Inc., said people familiar with the matter, who asked not to be identified because the details are private.

Georgia Company Acquires S.D. Fintech Startup LoanHero (San Diego Business Journal), Rated: A

LoanHero, one of San Diego’s few financial technology startups, has been acquired by Georgia-based company LendingPoint.

Terms of the deal, announced Jan. 11, were not disclosed.

Small-dollar lender Oportun to open 20 offices in Florida (American Banker), Rated: A

Oportun, a community development financial institution that provides small loans to individuals with little or no credit history, is planning to open 20 lending offices in Florida.

The Redwood City, Calif.-based lender said this week that it has already opened four offices in Miami and Hialeah and that it expects to add 16 more in the Sunshine State, primarily in South Florida, by the end of the year.

6 Key Trends in Fintech to Watch in 2018 (Lend Academy), Rated: A

  1. Convergence of Software and Financial Products  One of the important lessons that Square taught the market is that bundles of software solutions (loyalty, POS, analytics, scheduling and many others) and lending are essential drivers in advancing growth of payment processing.
  2. InsureTech
  3. The Power of the Machines  Companies like LendingClub are using machines to discover new relationships and patterns to introduce more tailored financial offers to their customers.
  4. Emerging Economies  Many growing companies in Africa, Asia, and Latin America are developing and adopting financial solutions, often faster and with more innovation than in developed economies.
  5. Wealth Management
  6. Rise of Crypto and Blockchain

Google Pay brings payment tools under a single brand (Tearsheet), Rated: A

The Internet giant is finally putting its many payments capabilities — Google Wallet, Android Pay and Pay with Google — under a single name, Google Pay, after lagging for years behind Apple Pay and Samsung Pay.

Ladder Secures $ 30M Series B Led by RRE Ventures (coverager), Rated: A

CA-based life insurance MGA Ladder announced it has raised $30M in a Series B round led by RRE Ventures, with participation from Thomvest Ventures, as well as Ladder’s existing investors: Canaan Partners, Lightspeed Venture Partners and Nyca Partners . Ladder launched its fully-digital life insurance solution in California on January 10, 2017, and has since expanded to nearly every state across the country.

Fifth Third regains top CRA grade, an entree to M&A (American Banker), Rated: A

Fifth Third Bancorp has received top marks from the Federal Reserve on its most recent Community Reinvestment Act examination as expected.

Fifth Third announced the results on Wednesday, saying in a press release that the Fed gave it an “outstanding” rating on its most recent exam. The Cincinnati company had said in a regulatory filing last month that it expected to ace the test, which covered the period between Jan. 1, 2014, and June 30, 2016.

A Beginner’s Guide to Applying for College Loans (Student Loan Hero), Rated: A

Student loan debt statistics show that more than 70 percent of students graduating from four-year colleges have debt, so you aren’t alone if you need to borrow to cover educational costs.

Step 1: Understand your options

  • Federal loans for students
  • Federal loans for parents
  • Private loans for students
  • Private loans for parents
Source: Federal Student Aid

Step 7: Determine if you’ll need to apply for private loans

  • Family contributions if parents or other family members are willing and able to pay
  • Savings
  • Scholarships or grants from community groups or other sources
  • Parent PLUS Loans
  • Private student loans

Step 8: Learn how to apply for private student loans

Because there are many private student loan lenders, it’s a good idea to shop around. You should consider:

  • Loan eligibility requirements: What do you need to qualify?
  • Loan terms: How long do you have to repay the loan?
  • Repayment terms: When do you need to start repaying, and is there a prepayment penalty?
  • Fees: Is there a cost to apply for the loan or a loan origination fee?
  • Interest rates: Is the rate fixed or variable? How much will you pay to borrow?

You can visit our private student loan marketplace to find private student loan lenders offering loans to parents and students.

Here are the top 6 lenders of 2018!

LENDER RATES (APR) ELIGIBLE DEGREES
CHECK OUT THE TESTIMONIALS AND OUR IN-DEPTH REVIEWS!
2.58% – 7.25% Undergrad
& Graduate
VISIT SOFI
2.57% – 6.39% Undergrad
& Graduate
VISIT EARNEST
2.76% – 7.25% Undergrad
& Graduate
VISIT COMMONBOND
2.99% – 5.15% Undergrad
& Graduate
VISIT LAUREL ROAD
2.74% – 7.26% Undergrad
& Graduate
VISIT LENDKEY
3.11% – 8.46% Undergrad
& Graduate

 

 

Roostify adds tech veteran Adnan Habib as vice president of engineering (Housingwire), Rated: B

Roostify announced Thursday that it hired Adnan Habib as the company’s new vice president of engineering.

In this role, Habib will lead Roostify’s growing product delivery team and will be responsible for making improvements to the Roostify’s digital lending platform.

Roofstock Appoints Suresh Srinivasan as Chief Marketing Officer (BusinessWire), Rated: B

Roofstock (www.roofstock.com), the leading online marketplace for buying and selling leased single-family rental homes, today announced the strategic hire of Suresh Srinivasan as chief marketing officer. Srinivasan has 20 years’ experience leading marketing, product, and e-commerce functions at Fortune 500 and high-growth tech startups. Most recently serving as the SVP of Marketing for Xome, Srinivasan brings a deep understanding of the fast-growing real estate technology sector to Roofstock where he will be responsible for accelerating growth of Roofstock’s marketplace for single-family rental homes and developing the company’s partnership network.

United Kingdom

An invisible banking reform that ‘could fundamentally change how we manage our money’ is days away (Business Insider), Rated: AAA

Regulators in Europe and the UK are ordering banks and credit card companies to share customer data with other companies if their customers agree. The companies will also be able to carry out payments on a customers’ behalf.

Open Banking forces lenders to offer a digital “fire hose” of data that any third party can use to get standardised access — provided the startup is registered with the UK Financial Conduct Authority (FCA) and the customer agrees to share their data. They won’t have to negotiate deals with banks, just plug into their digital systems and go.

The aim of Opening Banking is to give customers greater control over their data and to encourage account switching.

An investigation by the UK Competition and Markets Authority in 2015 found just 3% of customers switched their banks in the last year, meaning many were left with accounts that were not right for them.

 

ThinCats Says 2018 is Poised for Growth in SME Lending (Crowdfund Insider), Rated: A

ThinCats says 2018 is poised for growth. The online lender reports that December was a record month booking £12 million of funding listed on the platform followed the biggest-ever ThinCats-listed loan of £6.7 million to the Chelsea Yacht & Boat Company at the end of September.

Loan Store Reveals to Reduce Interest Rates on Instant Cash Loans for the UK People (MENAFN), Rated: A

Loan Store is the responsible lending hub that reveals to reduce the interest rates on instant cash loans for the UK people.

Hennery Dicosta, a senior adviser of Loan Store, has offered the complete details about this announcement. This is what he said- In a recent scenario, people usually try to borrow a small loan amount. That is why we have decided to provide the loans for bad credit people with no guarantor and no fees on an instant decision to resolve their short term emergencies. We never charge any processing fee and we are now providing these loans on quite low rates of interest. Besides, we do not judge the creditworthiness of the borrowers with their credit rating and give an instant decision on their loan request.

Crowdstacker joins the Peer-to-Peer Finance Association (P2P Finance News), Rated: B

CROWDSTACKER has joined the Peer-to-Peer Finance Association (P2PFA), becoming the self-regulated trade body’s eighth member.

The business lending P2P platform will be represented by chief executive Karteek Patel.

China

3 Growth Stocks at Deep-Value Prices (The Motley Fool), Rated: AAA

With that in mind, we asked three Motley Fool investors to each profile a company that has a low valuation now compared to its earnings-growth potential. They identified Yirendai (NYSE:YRD)Criteo S.A.(NASDAQ:CRTO), and Changyou.com (NASDAQ:CYOU) as strong contenders trading at attractive discounts.

China’s first P2P online lending platform

The Chinese P2P lending market blossomed in the late 2000s, catering to  customers who were underserved by traditional banks, and is worth about $60 billion today.

Analysts expect Yirendai’s revenue and earnings to rise 74% and 14% respectively this year, followed by 43% revenue growth and 41% earnings growth next year. Yet the stock trades at just 14 times earnings, compared to an industry average of 26 for credit service providers. Based on those numbers, Yirendai looks likely an undervalued growth stock.

But there are some obvious reasons why investors are discounting it.

First, Yirendai is a subprime lender. Just 1.7% of its loans were rated as prime “Grade A” last quarter. Another 8.7% were Grade B, and 14.1% were Grade C — but 75.5% were rated Grade D. Yirendai collects higher fees from lower rated borrowers, but its business could collapse if its delinquency rates rise.

The company only discloses delinquency rates for loans past due by 15 to 89 days, and that rate came in at a low 1.8% last quarter. But it doesn’t report any data on loans delinquent for over 90 days.

Chinese finance platform Black Fish raises $ 145m from Gobi, Lightspeed, others (Deal Street Asia), Rated: AAA

Black Fish, a consumer finance platform based in China’s Nanjing region, has received $145 million in a series A round from a cluster of firms  including Lightspeed China Partners and Shanghai and Kuala Lumpur based Gobi Partners.

Others who participated in the round include Morningside Venture Capital, JAFCO Asia, Fullcent Capital and Zhang Tao, founder of Dianping.com.

At this point, the average annual growth rate of consumer finance is 16.4 percent.

China’s Renren Is Poised To Unlock Value From Its Investment Portfolio And Grow With Blockchain (Seeking Alpha), Rated: A

Renren holds a significant investment portfolio that is easily worth $12 per share.  This value will likely be realized in the near term due to multiple catalysts.

The company has started to get involved with blockchain-related businesses, which potentially turns them into a “blockchain play”.

This situation leads to an asymmetrical payoff structure in which there is very little downside and significant upside. My target price is $18.

Renren was an early VC investor in Sofi, taking part in its seed round of financing as well as a later follow-on round. They currently hold a 13% stake in SoFi, having sold 14.1% of their holdings (representing 2% of SoFi) in April 2017 for $92 million.

Source: Seeking Alpha

Dianrong Signs Strategic Agreement with Dalian Finance Development Bureau & Dalian Finance Industry Investment Group (PR Newswire), Rated: A

Dianrong and the Dalian Finance Development Bureau and Dalian Finance Industry Investment Group (DFIIG) recently signed a strategic cooperation agreement to drive financial innovation in Dalian and across China. According to the agreement, Dianrong will develop a series of specific projects in partnership with the Dalian government, including:

  • Assist the Dalian Finance Development Bureau in creating a financial technology (fintech) cloud platform to provide fintech capabilities for small loan and guarantee companies, and other small and medium-sized financial institutions in the region and at large. Tools and services will include sophisticated fraud detection, big-data risk management tools, payment channel integration, and compliance reporting. The fintech cloud platform will also provide regulators with easier monitoring of local lending activities and trends in an ongoing and comprehensive way, helping them provide timely policy guidance and support on risk management.
  • Work with DFIIG to establish a special Internet finance investment fund for Dalian. The fund will focus on investment in fintech projects and startups with the potential to strengthen Dalian’s new economy and financial services industry.
  • Develop a supply-chain trading platform in Dalian utilizing advanced fintech and blockchain capabilities to help more small and medium-sized suppliers secure needed funding. Last year, Dianrong created the first blockchain platform for supply-chain finance with FoxConn Group, a global leader in consumer electronics.

Shanghai tightens financial sector supervision (Ecns), Rated: B

Shanghai is one of China’s largest financial markets by market trading volume. In 2017, its trading volume was 1,438 trillion yuan ($220.9 trillion).

Shanghai has already launched a campaign against fraud and illegal behavior in financial consumer markets, such as internet-based peer-to-peer lending, cash loans to college students, and pay-day loans.

European Union

Rocket Internet CEO says ready to pounce with cash pile (Business Insider), Rated: AAA

Germany’s Rocket Internet needs to hold on to its mountain of cash so it can compete with rivals from the United States and China and pounce when investment opportunities arise, the chief executive said in an interview.

CAUTIOUS MARKET

Rocket is invested in more than 100 start-ups, including in financial and property tech, logistics and travel sites, with its stakes in the five biggest of them potentially worth more than 1 billion euros to Rocket, according to Berenberg bank.

International

MoneyGram Signs Deal to Work With Currency Startup Ripple (WSJ), Rated: AAA

MoneyGram International Inc. MGI +2.63% signed on to run a pilot program testing XRP, a digital currency created by San Francisco startup Ripple, in its payments network, the companies said Thursday.

The Dallas-based company agreed to test XRP as a tool for reducing money-transfer costs and settlement times.

How Banks Can Use Trade Finance Services and Data to Increase Share of Wallet (Traxpay), Rated: AAA

While global trade presents tremendous growth opportunities, businesses of all sizes are none-the-less finding it difficult to access much needed credit, resulting in a global trade finance gap. According to an Asian Development Bank’s (ADB) 2017 Trade Finance Gaps, Growth, And Jobs Survey, that gap was $1.5 trillion in 2016.

Non-financial institution competitors are aggressively targeting this market, using innovations such as blockchain to develop products and tools that not only replace outdated paper and manual-based processes, but also deliver unprecedented levels of cybersecurity that are critical in today’s digital transaction space. The same ADB survey revealed more than $13 billion in venture capital was invested in FinTech trade finance in 2016 alone.

The recent Simmons & Simmons Hyperfinance studyof the world’s leading trade banks found that only 7% believe they are at the forefront of digital innovation in spite of the fact that 80% of innovation leaders report digitally-driven products and services introduced over the past three years have expanded revenue growth. This illustrates the reality that financial institutions recognize the importance of developing a digital strategy, but few are moving aggressively enough to take advantage of these new technologies.

PRINCIPLES, ESG, AND CREDIT RISK (All About Alpha), Rated: AAA

The question before the house right now, though, is: what about the credit rating agencies? The question comes in three parts: there are the global CRAs; the smaller/regional CRAs in most of the world, and regional CRAs in the special case of China.

First, the global CRAs [there are just two of them, Moody’s and S&P] are making “strong efforts” to incorporate an understanding of ESG issues. They are hiring staff with ESG backgrounds, equipping their existing analysts with the relevant expertise, and drawing on third party providers.

Then there is China. Its CRAs include Dagong Global, China Chengxin, and Golden Credit Ratings. The idea of integrating ESG into their analyses is thus far limited to the issue of green bonds, that is, bonds issued for the development of brownfield sites. Government policy in China encourages green bonds and the CRAs have responded. The resulting assessments are focused on the “E,” not so much the “S” or the “G.” And their environmental assessments rely on measuring the impact of the project the bond aims to finance.

  • Research very generally supports the hypothesis that there exists a causal link between ESG factors and the credit worthiness of a borrower;
  • Academic research in limited in that it is too exclusively content to measure credit risk by credit ratings, rather than testing the ratings themselves against alternative measures;
  • But some research does employ the spread of credit default swaps as an independent measure of risk;
  • Anecdotal observation indicates a clear link between G and defaults, although the linkage between E and S and defaults is more difficult to pin down;
  • There is much evidence in the linkage of ESG to macroeconomic factors and potential growth, which in turn are important to sovereign risk in particular.

ABS braces for more auto deals after strong start to year (IFR), Rated: A

The asset-backed bond market is braced for a slew of new issues next week, with deal flow expected to be dominated by auto issuers including BMW and Mercedes.

Just two issuers sold deals this week – GM Financial and Consumer Portfolio Services – and both auto trades were met with strong demand from investors. One banker on the GM deal said the deal was over-subscribed across the capital stack.

The biggest tightening though was seen on the smallest and lower rated tranches. The 3.58-year Class B, rated Aa3/AA by Moody’s and Fitch, priced at 30bp over interpolated swaps versus guidance of 35-40bp and whispers of 45bp area.

The 3.58-year Class C, rated A1/A, priced at 50bp over interpolated swaps versus guidance of 55-60bp and whispers of 65bp area.

FROM BANKING TO BITCOIN, FINTECH IS POISED TO CHANGE THE WORLD (Tech Genix), Rated: A

Currently, it represents only 1 percent of the global financial industry. By comparison, digital media accounts for 40 percent while eCommerce accounts for around 10 percent.

Source: Tech Genix

To give you a perspective, venture capitalists invested more than $13 billion across 840 different fintech holdings in 2016, according to a report by KPMG. This is 7 percent more than they invested in 2015.

According to the McKinsey report, five areas will see high growth over the next decade. They are consumer finance, mortgage, lending, retail payment, and wealth management.

Online payments

PayPal handled $1.73 billion worth of transactions in the first quarter of 2017 alone, representing a 30 percent increase year-on-year.

Borrowing and lending

However, the delinquency rates have been increasingover the last few years. These rates have increased from 0.56 percent in January 2015 to 0.75 percent in December of the same year.

Overstock.com’s 2017 Highlights: Innovation, Expansion, and Recognition (Business Insider), Rated: A

Overstock’s blockchain-focused subsidiary, Medici Ventures, named its board of directors in 2017, and also saw a number of its portfolio companies continue to use blockchain to revolutionize industries including capital markets, money and banking, property registry, voting, identity, and underlying blockchain technology, including:

  • tZERO, the world’s first SEC approved, blockchain-based alternative trading system, launched its initial coin offering (ICO), which attracted over 10,000 subscribers and raised $100M in commitments in the first 12 hours of its pre-sale. A significant portion of the tZERO security tokens issued will be available to accredited investors in the public sale beginning in January, 2018.
  • DeSoto Inc., a joint venture between Overstock.com founder and CEO Patrick Byrne and world-renowned economist Hernando de Soto, was created to develop a global property registry system to surface the property rights of billions of people in the developing world.
  • Bitt, a Barbados-based financial technology company using blockchain to create central banking tools and mobile money applications, named Rawdon Adams, son of former Barbadian Prime Minister Tom Adams, as its CEO. Bitt also fully launched its new mMoney digital payment product, bringing to market a blockchain-based mobile wallet that allows users to participate in digital transactions on their smartphones without the need for a traditional bank account, helping to foster financial inclusion in the region.
  • South-American based Ripio (formally known as BitPagos), participated in an ICO that raised $37M to fund its Ethereum-based peer-to-peer lending platform, Ripio Credit Network.
  • Belgium-based SettleMint launched a token sale for its DataBroker DAO, a peer-to-peer marketplace created to provide Internet of Things (IoT) sensor-owners with a clear path to data monetization, and data consumers with a decentralized marketplace in order to buy IoT sensor data. SettleMint also signed an agreement with The Islamic Research and Training Institute, the research arm of the Islamic Development Bank Group, to work with local partner Ateon on developing blockchain-based financial products that can be used to support development and inclusion in IsDB member countries.

Global lender selects Aussie fintech, Trade Ledger, as worldwide technology partner (PR Newswire), Rated: A

Zürich-based lender, TradePlus24, has selected Australian deep tech startup, Trade Ledger, as its global technology partner to roll out its new trade insurance wrapped lending product across their European lending network, and enter the Australian market.

Bankers fear they will get Amazon-ed in tech disruption (Financial Times), Rated: A

According to IDC, only about a quarter of US bank technology budgets is spent on digital transformation, as opposed to business as usual. They expect this to grow to nearer 40 per cent in 2020.

Secondly, this spending could substantially boost banks’ productivity, and profits.

Banks will drive up the cost of customer acquisition for start-ups who will increasingly struggle unless they build network effects and scale very quickly. Roboadvisers and peer-to-peer lenders will be on heightened alert. Some start-ups will need to rethink their plans to disrupt and look to form partnerships instead.

Changes in financial regulation, such as a lighter touch fintech charter being examined in the US or the second payment services directive in Europe, could potentially make this more likely. The tech giants have the brands, customer reach, digital processes and flair to develop good products, and to take swift advantage of any regulatory changes.

Karma token trading opens after successful million ICO campaign (Crypto Ninjas), Rated: B

India

German Online Lender Kreditech Heads to India (Bank Innovation), Rated: AAA

German online lender Kreditech is making its way to India, Bank Innovation has learned.

For this expedition, the fintech has teamed up with SaaS banking platform Mambu for providing short-term lending products specifically tailored to local consumers.

Kreditech selects Mambu’s SaaS banking engine for its passage to India (Finextra), Rated: A

Kreditech currently operates in Europe and Latin America and will expand into India in early 2018, together with its partner PayU, a global online payments provider and Mambu client in Latin America.

The loan product is expected to go live in the first quarter of 2018, all data will be hosted by AWS India.

NiYO Solutions Raises $ 13.2M in Series A Funding (FINSSMES), Rated: A

NiYO Solutions Inc., a Bangalore, India-based fintech startup for salaried employees, raised $13.2m (85 crore) in Series A funding.

APAC

Myanmar takes small steps towards providing greater liquidity for SMEs (Myanmar Times), Rated: AAA

A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

Currently, local banks extend loans at interest rates ranging between 8.5 percent and 13pc. The local banks began offering SME loans at8.5pc interest in 2015. Since then, the Japan International Cooperation Agency (JICA) and KfW Development Bank from Germany have also launched SME loans.

P2P lending

To get around the financial constraints, borrowing from family members and peers is common.

In fact, a rising number of businesses have resorted to P2P lending for funds to build up their businesses. Without any guarantees of success though, many entrepreneurs ultimately end up in debt. Others fall prey to fraud. Last year, The Myanmar Times reported at least three cases of fraud involving fake promises of repayments with up to 30pc interest.

Cloud Lending Solutions Recognized as a Top 25 FinTech Company of 2017 (BusinessWire), Rated: B

Cloud Lending Solutions was recognized as a “Top 25 FinTech Company for 2017” by APAC CIO Outlook Magazine. A panel of industrial experts and executives collaborated with the editorial board to curate the list with an aim to provide clarity into the ideal FinTech partners.

Africa

Local digital currency eyes real estate disruption (ITWeb), Rated: AAA

Cape Town-based fintech company, Wealth Migrate, has launched a global   – WEALTHE Coin.

According to Wealth Migrate, while almost half of the world’s wealth is held in real estate, fewer than 13% of people have access or the resources to invest in and  from this lucrative market.

Authors:

George Popescu
Allen Taylor

Monday November 27 2017, Daily News Digest

fintech TransUnion

News Comments Today’s main news: Ant Financial bans high-interest consumer loan products. Lending Club boosts MPL credit metrics in 3rd self-sponsored ABS. Funding Circle to launch Isa next week. Zopa reforms how returns are displayed. Robo-advisors in China must be licensed. CreditEase to pioneer fund of funds for direct real estate purchases. New Zealand publishes first P2P/crowdfunding statistical returns. Today’s main […]

fintech TransUnion

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Africa

News Summary

United States

Lending Club boosts MPL credit metrics in 3rd self-sponsored ABS (Asset Securitization Report), Rated: AAA

LendingClub’s third self-sponsored securitization of online marketplace loans is benefiting from the company’s recent tightening of credit standards.

The loans backing the $330 million Consumer Loan Underlying Bond (CLUB) Credit Trust 2017-P2 involve borrowers with higher FICO scores that have allowed LendingClub to reduce its credit enhancement levels on the deal.

CLUB Credit Trust 2017-P2 has a collateral pool of 22,062 prime, consumer loans with a cumulative net balance of $368 million, or an average balance of $16,681.

TransUnion Study On FinTech Market; PayPal Enters Robo Advice Market (PeerIQ), Rated: AAA

The Federal Reserve Bank of New York reports that household debt totaled $12.95 Tn last quarter – the 13th straight quarterly increase. As a share of GDP however, household debt stands at 66% below a peak of 87% in early 2009.

PayPal continues to expand the range of its consumer offerings. PayPal started with payments initially, moved to personal and small business loans, and is now delivering asset management solutions. The partnership will offer Acorns a unique channel for customer acquisition and allow Acorns to compete with Betterment and Wealthfront. Paypal led a $30 Mn investment round in Acorns Grow in April 2016.

FinTechs are Growing and Taking Market Share

FinTech’s market share has grown from virtually zero in 2012 to 30% in 2016. The outstanding balances on personal loans have doubled to over $100 Bn in 2017 from late 2013, with 128 lenders making more than 10,000 personal loans annually. FinTechs compete with banks to originate loans to prime consumers, and FinTech’s originate 30% of their loans to non-prime consumers where there is less competition from banks.

Source: TransUnion

FinTechs Have The Most Robust, Risk-Based Pricing

Source: TransUnion

Brian Dally of Groundfloor (Lend Academy), Rated: A

In this podcast you will learn:

  • Where the idea for Groundfloor come from.
  • Why Brian decided to start in the real estate asset class.
  • How many states they are operating in today for both borrowers and investors.
  • How they go about sourcing real estate deals.
  • Why they decided to focus on non-accredited investors.
  • How their securities offering is structured.
  • The minimum investment allowed per deal.
  • How returns have been for investors.
  • Which side of the marketplace is constraining growth today.
  • How they differentiate themselves from their competition.
  • The performance of their loan book to date.
  • Their business model and how they make money.
  • Details of their first institutional investor and why this is good for retail investors.
  • Their goal for an institutional/retail investor mix.
  • What the future holds for Groundfloor.

Online lenders pull out the popcorn, as the Trump administration fights to control the CFPB (TechCrunch), Rated: AAA

Republican lawmakers have long sought to reduce the CFPB’s oversight. Now dueling appointments put its immediate future in question. Last night, President Trump named his budget director, Mick Mulvaney, as acting director of the agency hours after its current leader, Obama-appointed Richard Cordray, announced he would leave the job.

To counter the administration’s plans, on his way out the door, Cordray named his chief of staff, Leandra English, as the agency’s deputy director.

Under the law, the appointment should make English the agency’s acting director, though the White House says that Mulvaney plans to show up at the CFSB Monday morning anyway. The White House further says Mulvaney will keep his current job as head of the Office of Management and Budget.

If the Trump administration follows through on its threats, Mulvaney will lead both agencies until a permanent head of CFPB is chosen and confirmed by the Senate.

Nobody Knows Who the Consumer Financial Protection Bureau’s New Boss Is (New York Magazine), Rated: A

On his way out, he appointed his chief of staff, Leandra English, to take over the CFPB, citing the Dodd-Frank Act, which states that the agency’s deputy director will take over the agency if the director leaves. Trump responded by naming Mulvaney as expected, pointing to the Federal Vacancies Reform Act as justification for his move.

The eventual director must be confirmed by the Senate; Trump’s pick is expected within weeks.

3 trends powering the rise of financial robo-advice (VentureBeat), Rated: A

1. Availability of data

We generate more than 2.5 billion GB of data every day.

In one notable example, JP Morgan and Intuit earlier this year announced their companies will make data available via the Open Financial Exchange API. Their goal is to make it easier and more secure for consumers to use their data across various financial apps and websites.

2. Increased power and storage

  • Google Tensor Processing Unit.
  • Nvidia Volta.
  • Huawei Kirin.

3. Advancements in AI

In particular, deep learning and boosting models enable significant leaps forward in the application of machine learning. These include design concepts such as Google’s Capsule Network, which offers an alternative to traditional neural nets, and replicative and transfer learning, which enable pattern discoveries and accuracies impossible by human counterparts.

The results of studies using these ideas are impressive. In one example, University of Mannheim researchers showed how ontologies help some machine learning models validate data 50 times faster. And Google’s AutoAI demonstrated it can create better machine learning code than the researchers who made it.

Student debt relief trumps other benefits (Employee Benefit Adviser), Rated: A

Student loan repayment programs are climbing the pantheon of employee benefits, suggests a recent survey of full-time workers with student loan debt.

Pollfish found that 23% would gladly give up healthcare benefits for a student loan repayment benefit. In addition, 46% would relinquish paid time off and 33% would do the same for retirement benefits in exchange for a repayment benefit. Also, 53% said they’d consider a salary cut in exchange for a student loan repayment benefit.

Of 1,000 college graduates polled by SoFi, an online personal finance company, 90% were more willing to accept a job offer at a new company if their employer offered a student loan contribution benefit. In the Pollfish survey, 84% gave the same response.

The Most Well-Funded Fintech Startup In Each State (CB Insights), Rated: A

State Company Total Equity Funding ($M)
Arizona CampusLogic $ 17.5
Arkansas LumoXchange $ 0.2
California SoFi $ 2,040.5
Colorado IP Commerce $ 54.7
Connecticut PayVeris $ 14.2
DC Fundrise $ 52.6
Delaware College Avenue Student Loans $ 50.0
Florida YellowPepper $ 34.0
Georgia Kabbage $ 490.0
Idaho VisitPay $ 18.4
Illinois Avant $ 655.0
Indiana Allied Payment Network $ 2.6
Iowa Dwolla $ 39.1
Kansas C2FO $ 99.7
Kentucky Inked Brands $ 4.0
Louisiana Zlien $ 7.2
Maryland Regent Education $ 39.7
Massachusetts Toast $ 138.0
Michigan Clinc $ 7.5
Minnesota Bright Health $ 240.0
Missouri Clearent $ 27.5
Nebraska D3 Technology $ 35.6
Nevada Filament $ 31.8
New Jersey Billtrust $ 104.5
New York Oscar Insurance Corporation $ 727.5
North Carolina AvidXchange $ 558.2
Ohio Aver $ 23.2
Oklahoma CreditPoint Software $ 1.1
Oregon NVoicePay $ 21.5
Pennsylvania InstaMed Communications $ 101.9
Rhode Island Upserve $ 191.5
South Carolina Ceterus $ 10.2
South Dakota ReliaMax $ 3.9
Tennessee Digital Reasoning Systems $ 75.6
Texas BigCommerce $ 164.5
Utah MX $ 54.1
Virginia StreetShares $ 18.9
Washington Avalara $ 253.0
Wisconsin Dynamis Software Corporation $ 4.3
Source: CB Insights

Bridge loan helps borrowers as they pursue graduate degrees (SFGate), Rated: B

The sellers wanted to accept the offer but were concerned about the VA financing with an online lender who was unresponsive to the listing agent’s calls. The Realtor advised the couple that if they could find a local lender who could preapprove them with conventional financing, their offer would be accepted.

Wyatt held a video conference with the couple to clarify the structure of the file and learned that both clients were pursuing their graduate degrees and took time off work to attend classes. In addition, the co-borrower had recently received an employment offer for a salaried position.

United Kingdom

Funding Circle Isa to launch next week (Bridging&Commercial), Rated: AAA

Peer-to-peer platform Funding Circle has announced that it will start rolling out its Isa account to all current investors from next Thursday (30th November).

UK peer-to-peer lenders plan to raise millions from ISAs (Financial Times), Rated: A

Britain’s largest peer-to-peer lenders plan to raise hundreds of millions of pounds from savers in the coming weeks even as many of them say they will reduce higher risk lending in case there is a downturn.

“We expect a lot of demand,” Samir Desai, chief executive of Funding Circle, told the Financial Times. “We have done lots of surveys and a huge proportion of the base told us they would like to put all of the money they invest with us through the ISA.”

Zopa addresses default concerns by reforming how returns are displayed (P2P Finance News), Rated: AAA

ZOPA is working on improving the way long-term returns are displayed so investors do not become overly concerned with monthly defaults in their portfolio.

The peer-to-peer lender said it is working on a prototype that would show investors their current portfolio performance, a range of what their returns will be and what their target rate is.

The display, currently in testing, includes a graph showing portfolio growth, and the net cash earnings after losses, a range of what the returns will be that narrows closer to maturity and what the target rate is in comparison to what was advertised.

Welendus launches new £150,000 crowdfunding campaign (P2P Finance News), Rated: A

PEER-TO-PEER payday loan platform Welendus has launched a new crowdfunding round on Seedrs this morning to raise an additional £150,000.

The lender, which raised £100,000 from investors during a Seedrs fundraise in March, has already reached 92 per cent of its target by attracting funding from the existing crowdfunding backers.

NatWest joins the robo-advisers (This is Money), Rated: A

High-street bank NatWest has launched a fully regulated robo-advice proposition charging £10 for customers seeking to invest sums as low as £500.

Unlike some rival robo-advisers that offer guidance based on responses to just a few questions, or simplified advice that doesn’t factor in your complete financial position, NatWest said its process will offer full-fat advice akin to the traditional face-to-face process but online.

57% of SMEs support European Free Trade Agreement (Bridging&Commercial), Rated: A

More than half of small business owners (57%) are supportive of joining the European Free Trade Agreement (EFTA), a new survey has revealed.
Research by peer-to-peer platform Funding Circle has found that the key reasons cited by businesses for wanting to join the EFTA included the ease of exporting and importing (59%), a larger customer base (46%) and lower tariffs (42%).

 

Was the Budget boom or bust for personal finance? (P2P Finance News), Rated: A

PEER-TO-PEER lenders are split about the outcome of the Budget for people’s finances.

RateSetter said there was “a notable absence of measures to help people put away more for the future” in Wednesday’s fiscal event, but Lending Works called it “a boost for personal finance”.

Rethinking bricks and mortar: alternatives for property investors (Your Money), Rated: B

A mismatch of supply and demand has made UK property more unaffordable than ever for would be buyers. Property investors pursuing the buy-to-let route are also facing challenges due to a recent crackdown in tax legislation. Against this backdrop, peer to peer (P2P) and equity crowdfunding have grown in popularity as alternative ways to access the property market.

Key considerations before picking an investment route

 

  • Investment risk
  • Debt or equity
  • Liquidity
  • Who’s the provider

RateSetter Appoints Richard Steele Regional Manager of Midlands (Crowdfund Insider), Rated: B

UK-based peer-to-peer lending platform RateSetter announced on Friday it has appointed Richard Steele as its regional manager for the Midlands. According to the online lender, Steele has more than 15 years of business lending experience and prior to joining RateSetter, he held the relationship manager position at Barclays and business development manager at BCRS Business Loans.

China

WeiyangX Fintech Review (Crowdfund Insider), Rated: AAA

On November 17th, top financial regulators in mainland China (including PBOC, CBRC, CSRC, CIRC and SAFE) released a new set of rules covering the country’s asset management market. It is the first time that the regulators designated one of the articles to Robo-advisors.

According to the article, financial institutions that conduct Robo-advisory services or AI-driven investment programs should be granted license from financial regulator before carrying out any operations.

Here Comes Tencent Credit

Two years ago, Ant Financial, the financial affiliate of Alibaba, launched its own credit scoring system Sesame Credit. This week, Tencent, Alibaba’s main rival in China, finally followed suit by launching a similar and competitive product, Tencent Credit. The credit score ranges between 300 and 850.

Sesame Credit Ceases Cooperation with Cash Loan Platforms

On November 21st, a cash loan platform told the media that they had received a notification from Sesame Credit, the credit scoring services of Ant Financial. According to the notification, Sesame Credit will cease to cooperate with cash loans from December 12th of 2017 due to some of its illegal behavior regarding interest rate setting and debt collection.

Chinese fintech firm CreditEase to pioneer funds of funds as alternative to direct real estate purchases (SCMP), Rated: AAA

CreditEase, one of China’s largest financial technology companies, has set its sights on funds of funds focusing on real estate projects as founder and chief executive Tang Ning anticipates a new property investment scenario.

At present, high-net-worth individuals in China seeking returns from property investment often directly buy and own residential or commercial units, betting on the appreciation of assets.

CreditEase, which specialises in lending to small businesses and consumers as well as wealth management for affluent investors, plans to set up a clutch of funds of funds that will allocate capital to leading global real estate funds managed by big names such as Blackstone and KKR.

China Online Lender Qudian’s Latest Plunge Knocks CEO From Billionaire Ranks (Forbes), Rated: A

Qudian lost 24.3% on Friday to end at $12.22, the worst close since it listed at $24 on Oct. 18.  Friday’s decline left Luo’s fortune at $776 million.

Luo, 34, ranked No. 255 on the 2017 Forbes China Rich List published on Nov. 16 with an estimated fortune of $1.48 billion.

Shares in Qudian, which is 11% owned by Alibaba Group affiliate Ant Financial, and other Chinese online lenders have been falling on reports that regulators plan to tighten restrictions on microlenders. On Friday, Qudian said it would cap charges and costs to customers linked to Alipay at an annual interest rate of 24% (see announcement and details here).  Qudian also said it is working to extend credit through its own app where it can charge up to an annual rate of 36%.

Alibaba Affiliate Bans High-interest Consumers Loan Products (ValueWalk), Rated: AAA

Ant Financial, the financial arm of Alibaba, has barred consumer loanswith an annual interest rate above 24% on its Alipay platform.

Ant Financial stated that it has increased monitoring of the financial service providers on Alipay and its credit platform, Sesame Credit, and found some inappropriate collection methods and interest rates above legal limits, according to Reuters. Further, Alibaba’s Ant Financial stated that it would withdraw cooperation with some cash loan providers. Sesame Credit is a proprietary credit scoring system, which gives Alipay e-wallet users a credit score.

China Fintech Firm Is Said to Mull Fate of $ 500 Million IPO (Bloomberg), Rated: A

LexinFintech Holdings Ltd., owner of Chinese online lending platform Fenqile, plans to meet advisers this weekend to discuss the fate of its proposed U.S. initial public offering, people with knowledge of the matter said.

The company aims to decide whether to imminently start its IPO roadshow or wait for a later date when market sentiment may be better, according to the people.

Yirendai Awarded ISO 27001 Certification (Business Insider), Rated: A

Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”) announced today that it has been awarded certification to the international standard for Information Security Management (ISO 27001) from British Standards Institution.

The ISO 27001 certification is an internationally recognized best practice framework for an information security management system (“ISMS”) and specifies the requirements for establishing, implementing, maintaining and improving information security management within an organization. It also takes into account risk assessment and risk treatment with regards to security of information.

Tencent to set up fintech lab in Xiongan (ECNS.cn), Rated: B

Tencent Holdings Ltd, Asia’s most valuable firm, is planning to set up a financial technology lab and digitize public medical services in the Xiongan New Area, as part of a broader push to gain a foothold in China’s latest economic zone.

European Union

One Idea to Make Europe Bigger in Tech Is to Pay Employees More (Bloomberg), Rated: AAA

Europe isn’t producing the kind of large, globally-influential technology companies like those coming out of the U.S. and China. A perennial question is why?

One reason might be that European startups don’t give employees as much of a chance to strike it rich, according to a new study by the European venture capital firm Index Ventures. While startup employees in the U.S. are often rewarded with stock options — allowing them to cash out handsomely if a company is sold or goes public — young firms in Europe don’t offer the same scale of incentives.

In an analysis of 73 companies, Index found that European employees own on average about 10 percent of the startup where they work, compared to 20 percent for U.S. workers. European companies often skew stock options to executives rather than rank-and-file employees.

A tech VC explains why Revolut is such a hot ticket as the fintech app hits 1 million users (Business Insider), Rated: A

Revolut announced the milestone on Friday, saying that customers have now completed 42 million transactions on its app worth a combined $6 billion (£4.5 billion). The company began as a foreign exchange app linked to a pre-paid card but has since branched out into broader financial services, such as current accounts, insurance, and investments.

Revolut, which is applying for a full European banking license, said that 42% of its customers are aged 25-35, “a clear indication that traditional banks are no longer meeting the needs of younger, tech-savvy generations.”

Flender closes in on £2m funding round (Independent), Rated: A

Dublin-based peer-to-peer lending business Flender is close to raising more than €2m in its latest funding round.

Some €400,000 of the money has been raised from its own platform – the first peer-to-peer equity investment on an Irish platform. Terms are close to being agreed for the remaining balance of a £2m (€2.25m) round.

CS Invests in Swiss Fintech (finews), Rated: B

Credit Suisse has bought a majority stake in Tradeplus24, a Zurich-based fintech firm specialized in small- and mid-sized business loans. The Swiss bank bought into a series A1 financing through its subsidiary, SVC, the bank said in a statement.

International

2 investment trusts for income investors seeking reliable high yields (The Motley Fool), Rated: AAA

With interest rates still near historic lows, it can be hard to find mainstream investments that will pay out a significant yield.

But for investors who don’t want to go through the trouble of setting up their own account with a peer-to-peer lending platform, P2P Global Investments (LSE: P2P) offers an alternative route to gain access to the sector. It’s an investment trust that offers investors a ready-made and diversified portfolio of peer-to-peer loans, saving time from building a portfolio from scratch and enabling investors to earn income straight away. At its current share price, it has a trailing 12-month dividend yield of 6%.

ETHLend – A Fully Decentralized & Democratized P2P Lending Platform On The Ethereum Blockchain (Chipin), Rated: A

The main feature of ETHLend is the financing options available in ETH, which allows users to borrow or lend ETH using ETHLend’s digital tokens in an efficient manner or by using ENS domains as a collateral.

The ETHLend platform can be also used as a tool for both B2B and B2C transactions.

An interesting aspect of ETHLend is that both borrowers and lenders will receive 0.1 credit tokens (equal to 1 ETH) each for every loan that is repaid successfully.

These credit tokens can then be used as collateral for loans on the platform or sold for profit.

Here are the details of the upcoming LEND token sale:

Token name: LEND

Token base: Ethereum (ERC-20)

Token supply: 1,000,000,000

Token sale duration: 25th November, 2017 – 27th December, 2017

Token sale target: 37,600 ETH (hard cap)

Token exchange rate: 1 ETH = 25,000-27,500 LEND (depending on period of sale)

Celsius – The P2P Decentralized Credit Protocol Built On Smart Contract Technology (Chipin), Rated: A

The modern credit system is a mess, particularly for millennials and the Generation X youths.

Celsius is a P2P and blockchain-powered global credit network designed to improve the efficiency of modern credit and financing systems.

There are 4 types of loans in the Celsius platform:

    • The platform will enable millennials to establish a digital credit score and be issued a credit line; the credit can then be accessed by a sponsored credit card from Celsius.
    • Celsius will also allow the platform’s users to expand their credit limit against their own cryptocurrency asset holdings they have at Celsius. The extended credit can be easily accessed through several options.
    • Members can also choose to lend any cryptocurrencies they own and earn up to 5x the normal interest rates they get from banks. Finally, members can borrow cryptocurrencies in a secure and transparent manner
    • To safeguard the platform’s ecosystem, both lenders and borrowers on Celsius are verified and carefully selected to prevent fraud.

Here are the details of the upcoming DEG token sale:

Token name: DEG

Token base: Ethereum (ERC-20)

Token supply: 1,000,000,000

Token sale duration: 25th of January, 2018 – TBA (pre-sale is currently LIVE)

Token sale target: $100,000,000 (hard cap)

Token exchange rate: $0.20 = 1 DEG

Australia/New Zealand

Why SocietyOne needs more than its billionaire backers (Financial Review), Rated: AAA

The other is it’s in the midst of what is expected to be its last funding round before listing the business, raising up to $20 million in equity based on a valuation of up to $200 million, which is based on a multiple of one times its loan book.

The raising, managed by Venture Advisory and due to close late this month, is part of a long-term, highly anticipated plan to target a sharemarket listing in 2018.

SocietyOne is expected to need a book worth $500 million or so before it starts breaking even.

Chief executive Jason Yetton has said previously the company is eyeing a 2 per cent to 3 per cent share of the $105 billion consumer finance market in the long term, of which credit card debt comprises $42 billion.

Fortress backs $ 120m capital raising by MoneyMe (Financial Review), Rated: AAA

Global credit investor Fortress Investment Group will invest $100 million in debt capital to support MoneyMe’s consumer lending growth as the fintech considers an initial public offering in early 2019.

Fortress’s investment is part of a $120 million asset-backed securitisation deal, which also includes a $20 million bond, issued by Evans & Partners, which was oversubscribed.

MoneyMe, which has made $150 million in personal loans to 70,000 customers in the past four years, is both cash flow positive and profitable, very rare for an Australian fintech.

Of its $150 million in lending, $80 million has been advanced in the past 12 months.

New Zealand’s Financial Markets Authority Publishes First Peer-To-Peer/Crowdfunding Statistical Returns (MondoVisione), Rated: AAA

The Financial Markets Authority (FMA) today published its first statistical reporton peer-to-peer lending and crowdfunding in New Zealand.

The data shows $259.9 million is currently loaned to individuals and $29.5 million loaned to businesses through peer-to-peer lending in the year ending 30 June 2017.

A total of $74.2 million was raised from investors through crowdfunding, including wholesale investors, in the same period.

Tic:Toc to undercut broker distribution in white label play (TheAdviser), Rated: A

Mortgage brokers are facing a double threat from online lender Tic:Toc, which is seeing a surge in demand from consumers and interest from banks and non-bank lenders looking for cheaper distribution.

The fintech started lending four months ago and has received approximately $330 million of applications in that time, with conversions hovering around 17 per cent this month.

Financial regulator shines light on P2P lending, crowdfunding (Stuff), Rated: A

Kiwis have nearly 17,000 loans through “peer-to-peer” lending platforms, but more than one in 12 borrowers were behind on repayments, according to the Financial Markets Authority.

There were 16,977 loans outstanding with P2P lenders at the end of June, it said, of which 1469 were in arrears. The average size of loans being taken out was $8771.

During the year, 833 loans with a total value of $8.5 million were written off.

Why banks and fin-techs need each other (NZ Herald), Rated: B

Chris Russell, HSBC New Zealand chief executive, said history was littered with banks who had spent large sums of money on developing new technology, only to find it had gone in another direction while it was working on it.

Globally Russell said HSBC was setting up innovation labs to work with financial technology firms and it was China and India where it saw the biggest sources of development.

In New Zealand it is also partnering with a local fin-tech, although Russell won’t name who yet.

India

The quick and safe way to build a credit score (livemint), Rated: A

If you are new in the workforce, you can start by getting a low-limit credit card from the bank where you have a salary account, said Sumit Bali, senior executive vice president and head-personal assets, Kotak Mahindra Bank Ltd.

Alternative credit scoring

While the RBI-regulated credit bureaus are currently not allowed to use alternative data for credit scoring; in other developed markets parameters like utility bill payments, insurance premium payments have been used for credit scoring (read more on it here.

However, financial institutions including top public and private sector banks and NBFCs in India, have started using alternative data in multiple verifications and validations across the credit value chain, Agarwal said.

Asia

Considering an ICO… then read this (The Star), Rated: AAA

The ICO euphoria is likely being fuelled by the fact that despite all the negative news surrounding ICOs and cryptocurrencies, the price of bitcoin has generally kept soaring, despite the many mini crashes it tends to suffer.

For sober markets like Malaysia and Singapore, the regulators’ stance is clear. They are not outlawing ICOs but making a simple statement: if fund-raising is your main objective, then please take note of existing securities laws, which have been built and refined over a very long time.

Malaysia should not become a hotbed for dodgy ICOs.

Asian regulators should focus on light touch for ICOs (Asian Review), Rated: A

China banned initial coin offerings in September as “a form of unapproved illegal public financing behavior.” South Korea followed suit a few weeks later. Regulators in Hong Kong, Singapore, the U.S. and other countries have also expressed concerns. What is it that has them so worried?

Africa

A Digital Transactions Takeover right under our nose – Cassava Fintech (Newsday), Rated: AAA

Cassava Fintech is a specialized Pan-African Fintech company that delivers innovative digital transaction solutions across the mobile ecosystem. Sounds fancy right? Not quite. Simply put Econet’s vision has expanded beyond Telecoms and our Zimbabwean borders. Econet’s premise sits within an inclusive connected future that leaves no African behind.

Fintech SMEs to drive 72% of bank innovation (The Star), Rated: A

Financial technology startups, commonly known as fintechs, will be responsible for 72 per cent of financial innovations in the next three years, a new industry report shows.

Financial technology startups, commonly known as fintechs, will be responsible for 72 per cent of financial innovations in the next three years, a new industry report shows.

81 per cent of financial institutions said they are currently partnering with start-ups or intend to in the next 12 months.

Authors:

George Popescu
Allen Taylor

Monday May 1 2017, Daily News Digest

Upstart

News Comments Today’s main news: Funding Circle US to bolster capital markets team. US investors in Yirendai try to preserve lawsuit. Fed wants a say in fintech rules. Ablrate gains ISA manager status. Mizuho commits to fintech partnerships. Today’s main analysis: AI fintech startups offer loans on new credit. Global fintech report from CB Insights. Today’s thought-provoking articles: Multi-seller ABS […]

Upstart

News Comments

United States

United Kingdom

European Union

China

International

Australia

Asia

Africa

News Summary

United States

Funding Circle US to bolster capital markets team (AltFi), Rated: AAA

Funding Circle US is currently advertising for a number of capital markets jobs, all based in San Francisco. Among the listed jobs is a newly created Head of US Capital Markets role.

A Funding Circle spokesperson told us that Sachin Patel is now running capital markets for the firm globally.

There are currently five capital markets jobs listed in the US.

US Investors In Chinese Online Lender Fight To Preserve Suit (Law360), Rated: AAA

Shareholders in Chinese peer-to-peer lending company Yirendai Ltd. asked a California federal judge on Thursday to keep their securities fraud suit against the company and its executives alive, saying their request to dismiss the case rested on mischaracterizations and factual arguments the court couldn’t consider.

The investors sued Yirendai in 2016 after news that Chinese regulators were cracking down on the peer-to-peer lending business sent its stock tanking.

AI Fintech Startups Offer Loans on New Credit (Nanalyze), Rated: AAA

We’ve found more than a dozen AI fintech firms through our friends at CB Insights that claim their machine-learning algorithms can evaluate loan applications in milliseconds while minimizing defaults.

Many of these companies target so-called thin-file borrowers—people with little credit history—who are usually trying to consolidate debt from high-interest credit cards.

CB Insights reported in its 2016 Global Fintech report that investments dropped from an all-time high of $14.6 billion in 2015 to $12.7 billion last year. Online loan companies, in particular, took something of a hit in 2016. The last quarter was particularly tough, with a 31 percent tumble in loan originations. (However, overall, the top online loan sharks companies tracked by S&P Global Market Intelligence improved their bottom-dollar on loan originations by 15 percent from year-to-year, mostly on the backs of small businesses and students.)

Avant offers direct unsecured personal loans ranging from $1,000-$35,000 with funding delivered as soon as the next business day. It has served more than 500,000 customers worldwide, though last year’s downturn for digital lenders also hit Avant. Its year-to-year loan originations were down 12 percent to about $1.7 billion.

Led by a bevy of former Google-ites, including former Google CIO and ZestFinance CEO and founder Douglass Merrill, ZestFinance has raised $62 million in equity financing, including an undisclosed amount last July. Total funding is $262 million thanks to a couple of additional rounds of debt financing. Peter Thiel’s name again appears on the long list of investors.

Key VC tech investors like Andreessen Horowitz and Khosla Ventures have helped pour $320 million of equity into Affirm, bringing total funding to $420 million after a $100 million round of debt financing from Morgan Stanley. The company is led by PayPal co-founder Max Levchin.

Upstart is an AI fintech version of Lending Club. Meaning it provides peer-to-peer lending. Like ZestFinance, it particularly markets to the skinny jeans crowd, offering loans of up to $50,000 to help consolidate debt, pay off student loans and build credit history for those living in hipster cities like Portland and Brooklyn. The machine learning bit involves taking less tangible variables like education, college major and astrological sign into account.

Upstart CEO (and former president of Google Enterprise) Dave Girouard told TechCrunch he expects his company to become profitable this year. He predicts Upstart will originate about $1 billion in loans this year after doing about $650 million in loans in its first 2½ years.

Federal Reserve wants a say on U.S. fintech rules -Brainard (NASDAQ), Rated: AAA

The Federal Reserve wants to give input on future rules governing how technology companies move into consumer lending markets, Fed Governor Lael Brainard said on Friday.

Policymakers will have to determine whether financial technology, or fintech, companies may tap the Fed for services that large, traditional banks enjoy.

“The OCC’s proposal raises interpretive and policy issues for the Federal Reserve regarding whether charter recipients would become Federal Reserve members or have access to Federal Reserve accounts and services,” Brainard told a conference at Northwestern University in Evanston, Illinois.

Ten Marketplace Lending Options for Accredited Investors (Lend Academy), Rated: A

LendingHome launched in 2014 but quickly established themselves as the leader in the category. They are the only real estate crowdfunding platform to have reached $1 billion in total loans issued, a milestone they crossed in December, 2016 just two and half years after launching.

PeerStreet were founded just 18 months ago but they are already making a name for themselves. They are also focused on the fix & flip market providing loans ranging from 6-24 months in length. They target 6-12% returns and they maintain a conservative maximum LTV (loan-to-value) of 75%.

Sharestates has offered both debt and equity investments, although the vast majority of their deals are for debt. These deals are similar to other platforms with loan terms typically 6-24 months targeting 8-12% returns.

RealtyMogul is one of the most established players in the space having launched in 2013. They have done around $260 million in deals and today they focus primarily on commercial property.

Patch of Land is 100% focused on debt deals tied to mainly residential properties but with a small number of commercial properties as well.

RealtyShares is a “full stack” capital provider, meaning they offer both debt and equity deals on a single project for borrowers. They have done some large deals including this $5.9 million deal for a 132-unit apartment complex in Ohio.

The world leader in marketplace lending for small business loans offers US accredited investors a solid option. Loan terms range from 12 – 60 months and interest rates from 5.49% – 27.79%. Loans are rated from A+ for least risky down to D grade. They have a marketplace where you can browse the loans on offer or you can setup automated investing strategies based on loan grade. As I wrote this there were 12 loans available on their marketplace. Funding Circle provides financials and other details about each company although they don’t provide the company name.

Streetshares is a relatively new small business lender, they launched in 2014, and they are focused primarily on providing funding for military and veteran community businesses. Run by two veterans they provide three different products: term loans (3 – 36 months), lines of credit ($5,000 – $100,000) and government contract financing (for companies dealing with federal or state government contracts).

P2Binvestor, or P2Bi for short, is an asset backed lender providing revolving lines of credit typically backed by accounts receivables. These lines of credit range from $250,000 to as much as $10 million.

Upstart has been something of a quiet achiever when compared to some of their well-established competitors. Founded by ex-Googlers they have a very data-centric approach to their business. One of the things that makes Upstart unique is they were the first platform to look at a borrower’s education and factor that into the lending decision. Interest rates range from 6.37% – 29.99% APR, loan terms are three or five years and amounts range from $1,000 – $50,000.

Could Facial Recognition Technology Transform Insurance? (FA Magazine), Rated: A

In Wilmington, N.C., a high-tech company called Lapetus Solutions has developed a technology it calls Chronos that interprets facial characteristics such as baggy eyes, rosy cheeks and double chins to estimate a person’s life expectancy. One purported use of this futuristic-sounding software is to help insurance companies assess risk quickly and inexpensively. Customers could then purchase life insurance online in record time, perhaps circumventing the usual medical examination altogether.

In theory at least, insurance carriers want to provide coverage only to those less likely to need it. The better the carriers understand and predict risks, the better they can manage their liabilities. So if facial recognition technology identifies risks that were previously unknown or unknowable, it could render some consumers uninsurable, an advantage perhaps for the insurance company but not the consumer.

But Erin Ardleigh, president and founder of Dynama Insurance, an independent insurance brokerage based in New York City, isn’t so sure. “How would facial recognition technology help underwriters? I suppose if it could identify clients [who were] engaging in risky behavior, such as smoking or skydiving,” she says.

Rodgers, though, contends that the decision of whether to try this or any other new technology may ultimately come down to dollars and cents.

McHenry Working With Senate Democrat on New Fintech Bill (Bloomberg BNA), Rated: A

A leading House Republican on financial technology issues said April 25 he is working with a Senate Democrat on a revised “permanent beta test” bill to prod regulators to foster fintech innovation.

“You must have a default ‘yes’ to new innovation,” Rep. Patrick McHenry (R-N.C.) said in a speech at the American Action Forum in Washington.

McHenry said the 2017 version of the act would include “significant changes and revisions,” but he declined to discuss those. He also declined to identify the Democratic senator with whom he is working. He said he hopes to introduce the new bill in two months.

Global Debt Registry Wins FinTech Breakthrough Award (GDR Email), Rated: A

Global Debt Registry (GDR), the asset certainty company known for its loan validation expertise, today announced it has won the FinTech Breakthrough Award for ‘Best Business Lending Product’. The 

Female Fintech Founder On Series F And The Future Of Payments (Forbes), Rated: A

Karla Friede was first an executive with depth in sales and marketing and a passion for innovating. As the president and CEO of a company who had developed a new offering, a B2B payment technology, she was excited about getting to market.

Friede, now the CEO along with co-founders, Tana Law and Shaun McAravey, bought the rights to the idea from Zevez Corporation and in 2009 launched Nvoicepay.

Friede admits it wasn’t easy launching and scaling at that time. But, it taught them to be very smart with every penny. And, they had to prove their business case as they went along because investors weren’t throwing money at every shiny object.

Many B2B organizations don’t accept credit cards. And, managing ACH transfers require a lot of manual processes and the collection of sensitive financial data.

Friede says she was a little naïve in tackling the launch because the B2B payments space was so large. It’s one thing tackling Billion Dollar industries, it’s another thing dipping your toe into a market in the tens of Trillions.

Friede encourages founders to partner with people that think differently but complement your skills.

As Friede puts it, investors are looking for reasons not to invest in you…rather than reasons to invest in you. Don’t give them those reasons, give them a proven business model and secure set of customers.

Only 9% of VC-backed companies have woman CEOs so you won’t ‘look and feel like them.’ Instead, look and feel like someone who knows what they are doing and has proven it. That’s a shorthand all investors respond to.

If you are a female founder and you’re concerned about bias, she has this advice:

  • Target women-lead VCs or those with a woman partner.
  • Make it easy for the VC to relate to you.
  • Talk like the men around you.

She considers it a point of pride that they’ve raised $25M and it’s taken them to Series F to do it.

Small Change Announces Pittsburgh’s Liberty Bank Building Real Estate Offering (Crowdfund Insider), Rated: A

Real estate crowdfunding platform Small Change announced this week the launch of Pittsburgh’s Liberty Bank Building real estate offering. The funding portal noted that the project is seeking $300,000 to fund development of the building into co-working operator Beauty Shoppe’s flagship location.

Picker also noted that the next reincarnation of the Liberty Bank Building is having difficulty getting funds because it is considered to be the first full co-working building in Pittsburgh:

“Why is it so difficult to finance projects that bring innovation and new life to neighborhoods and cities? Must we rely on traditional financial institutions that are not very innovative at their core?”

Small Change added there is a 10% projected return on debt instrument. A full return of interest and capital is anticipated in 36 months. This is not an offer to sell securities.

State Bank Regulators Sue to Stop the OCC’s Fintech Charter (National Law Review), Rated: A

As we reported last fall, New York Department of Financial Services Superintendent Maria T. Vullo stated that she was “ardently opposed” to the Office of the Comptroller of the Currency’s (OCC’s) intention to process applications for a new financial technology (fintech) company charter. We now see just how much her counterparts in other states share that view, as the state bank regulators recently came together under the Conference of State Bank Supervisors (CSBS) banner to ask the federal courts to stop the OCC’s fintech charter initiative.

In turn, we believe that the CSBS action will act as a further disincentive for at least some fintech companies to pursue a national bank charter at this time.

Are Robo-Advisers in Your Future (My Prime Time News), Rated: A

Rather than having a “real” human being as your financial adviser, you can now hire a robot, or robo-adviser. The automated adviser will then manage your investment funds through the use of mathematical rules called algorithms. There is almost no human interaction.

While there may be cost savings, it is important to understand their risks and limitations before using them. First, what level of human interaction is important to you? While limited human interaction may result in reduced fees, many people feel more comfortable having often complex investment decisions explained by a person they trust. Before you decide to create an account with a robo-adviser, it’s important that you understand how the system works. Robo-adviser systems are limited to the information provided, and do not seek out new information or research potential options in the same way that a human adviser would.

Therefore, remember that even if you are not dealing with a human, you still need to verify the license of the service and the registration of the product or offering with the proper authorities.

FinTech Fireside Chat with PayJoy (Center for Digital Strategies), Rated: B

PayJoy is a FinTech company based in San Francisco, CA. PayJoy is bringing consumer finance to people who otherwise could not afford modern electronics such as smartphones. Today, PayJoy’s unique locking technology enables us to offer monthly installment payment plans to millions who otherwise would be unable to afford a quality smartphone. PayJoy’s ambition is to deliver affordable consumer finance to 1B+ people worldwide to obtain a smartphone and join the modern digital, mobile economy.

Poloniex Lending Bot vs Manual Poloniex Lending (The Merkle), Rated: B

Unfortunately, Poloniex Lending Bot cannot do much about issuing loans at very low rates when the market spikes. Additionally, the bot negates any opportunity to benefit from high long-term rates. Moreover, there is a 10% fee for using the bot, which can negate some of the profits earned rather quickly. It is a convenient lending bot, granted, but it should not necessarily replace manual, lending activities for anyone who knows what they are doing.

This also means one needs to buy small amounts of said coin to effectively issue the loan. If the coin suddenly plummets in value, that can cause losses in a cryptocurrency portfolio. Then again, a lending bot would not be able to protect users from falling currency values either by any means.

United Kingdom

Ablrate Gains ISA Manager Status and Passes £20 Million in Loans (EIN News), Rated: AAA

David Bradley-Ward, CEO at Ablrate, said: “Following our successful application for full authorisation from the FCA we now have the necessary approvals from HMRC to offer an Innovative Finance ISA. We hope to be able announce the launch of our IFISA soon after integrating the necessary technology.”

However, the asset backed lender is taking a cautious attitude towards the new product.

Multi-seller ABS approach to flourish (Structured Credit Investor), Rated: AAA

Marketplace loan ABS involving a multi-seller approach is expected to become more commonplace, due to the extra control that online lending platforms can exert over the securitisation process. Investors and loan sellers also benefit from a consistent securitisation programme, but a degree of expertise is required to handle the greater complexity involved in executing such transactions effectively.

VPC Specialty Lending Net Asset Value Rises As Dividend Is Lifted (Alliance News), Rated: A

VPC Specialty Lending Investments PLC on Friday said its net asset value increased significantly over the course of 2016 but said its NAV per share declined after its share capital swelled, while it reported negative total return in the period.

VPC said its net asset value at the end of 2016 stood at GBP363.1 million versus GBP201.8 million at the close of 2015, but the NAV per share fell to 95.26 pence from 100.90 pence after 182.6 million new shares were issued throughout the year.

Total shareholder return in the period was -17% versus the total return in 2015 of -5.5%. Revenue return was 6.0% versus 4.3% the year before.

Funding Circle to shut down forum amid property loan debate (P2P Finance News), Rated: A

FUNDING Circle is closing its community forum on Tuesday, as it says that some investors are “asking questions about a narrow range of technical topics” that would be better dealt with through its investor support team.

A thread on short-term property loans has now attracted 1,300 replies and more than 59,000 views. Lenders on the platform expressed their concerns around a tranche of London-based property loans that are going into default.

The platform suggested that its investors share their views on another website called the P2P Independent Forum instead.

How will your career evolve as the fintech sector grows? (Silicon Republic), Rated: A

For a start, you are probably wondering what future jobs will be available in fintech, as banking as we know it transforms into an online entity and long-standing financial institutions are shapeshifting for a new era.

If you want to work in this sector, you’ll need to brush up on the latest goings-on in the industry, and what better way to do that than to follow the experts online? To save you some trouble, we’ve provided you with a list of 10 people to follow on Twitter if you want to work in the fintech sector.

European Union

Tradeplus24 CHF100m Fintech raise in Switzerland signals Insurance move into SME Lending (Daily Fintech), Rated: AAA

Note: the deal was done in CHF which is about parity with USD, so you can read that as $100m.

A $100m Fintech raise in Switzerland in 2014 would have been inconceivable. In 2017 it is noteworthy as another sign of a rapidly maturing Fintech community in Switzerland.

I could only find the Tradeplus24 news on German language sites, so if that is an issue for you, here are the key facts:

– they raised CHF100m debt

– The debt is for lending to Swiss SME (note: they refer to KMU which translates to SME). This makes them a balance sheet lender, like Avant, not a marketplace lender like Lending Club. This means they have assured capital to offer rather than simply matching on a best efforts basis (our take is the latter is the better model long term but that you need balance sheet based lending to get a market going).

The Tradeplus24 approach is different. It brings Insurance into the mix. AsOceanoOne put it “An insurance or equal protection of investment grade quality against credit loss and fraud is in place for all pre-financed receivables. The purchase of the receivables occurs only when a credit insurance or an equal protection is in place and confirmed by the relevant protection provider.”

China

26 on trial over China P2P fraud (XinhuaNet), Rated: AAA

Twenty-six executives of a Chinese online peer-to-peer lender stood trial in Beijing on Wednesday and Thursday after allegedly cheating the public out of a huge amount of money.

The local procuratorate charged that the defendants had used two online P2P platforms, Ezubao and Sesame Financial, to illegally raise funds and then spent lavishly on luxury gifts and salaries between June 2014 and December 2015.

International

THE GLOBAL FINTECH REPORT: Q1’17 (CB Insights), Rated: AAA

While fintech covers a diverse array of companies, business models, and technologies, companies generally fall into several key verticals, including:

  • Lending tech: Lending companies on the list include primarily peer-to-peer lending platforms as well as underwriter and lending platforms using machine learning technologies and algorithms to assess creditworthiness.
  • Payments/billing tech: Payments and billing tech companies span from solutions to facilitate payments processing to payment card developers to subscription billing software tools.
  • Personal finance/wealth management: Tech companies that help individuals manage their personal bills, accounts and/or credit, as well as manage their personal assets and investments.
  • Money transfer/remittance: Money transfer companies include primarily peer-to-peer platforms to transfer money between individuals across countries.
  • Blockchain/bitcoin: Companies here span key software or technology firms in the distributed ledger space, ranging from bitcoin wallets to security providers to sidechains.
  • Institutional/capital markets tech: Companies either providing tools to financial institutions such as banks, hedge funds, mutual funds, or other institutional investors. These range from alternative trading systems to financial modeling and analysis software.
  • Equity crowdfunding: Platforms that allow a collection of individuals to provide monetary contributions for projects or companies provisioned in the form of equity.
  • Insurance tech: Companies creating new underwriting, claims, distribution and brokerage platforms, enhanced customer experience offerings, and software-as-a-service to help insurers deal with legacy IT issues.

Read the full report here.

Australia

The Australian Securities and Investments Commission (ASIC) anticipates getting over $200 million returned to consumers out of its so-called “fee for no service” remediation projects plus $30 million out of quality-of-advice work with the large institutions.

It said that in the financial advice space in the last 12 months it had extracted six enforceable undertakings; banned 41 individuals from providing financial advice; had four infringement notices and had undertaken seven criminal actions.

“In our fee-for-no-service remediations, we have got up to just over $60 million, and we anticipate getting over $200 million returned to consumers out of that project. We will have about $30 million in the backward-looking quality-of-advice work that we have done with the large institutions,” Bird said.

Kristen Lunman: Taking a chance on financial technology (NZ Herald), Rated: A

As the programme director for New Zealand’s first fintech-focused business accelerator programme, the pressure is on in the countdown to demo day. That’s when the teams will pitch their business plans and – they hope – attract the crucial dollars that will enable them to forge ahead.

The 39-year-old expat Canadian moved to Wellington six years ago with her husband and two pre-school children after falling in love with the country when the couple honeymooned here.

Asia

Japanese Megabank Mizuho Commits to Fintech in Series of Partnerships (Crowdfund Insider), Rated: AAA

One of the largest banks in Japan, Mizuho Financial Group, has been in the news recently for several partnerships involving fintech. According to Nikkei Asian Review, the bank is in talks to co-develop a fintech incubator that will be focused on virtual currencies, like bitcoin, and AI-based loan screening ventures. The discussions are with World Innovation Labs (WiL), a firm based out of Silicon Valley that helps US and Japanese startups raise capital, to co-found the incubator by as early as June of this year.

The creation of an incubator is not Mizuho’s first foray into fintech. Just last week, it was reported that Mizuho partnered with Cognizant (one of the world’s leading professional services companies, a member of the Nasdaq-100, and Fortune 500 company) to develop a distributed ledger solution for more efficient and secure trade financing.

Just two days after the partnership with Cognizant was reported, it was announced that Mizuho had also partnered with IBM to create a blockchain-based trading platform.

OJK’s regulation on financial technology-based lending services (Lexology), Rated: AAA

Both agreements must be drawn up in an electronic form. Providers are restricted by the following rules:

  • Providers must be established as a legal entity in the form of a limited-liability company as meant by Law No. 40 of 2007, or in the form of a cooperative as meant by Law No. 25 of 1992.
  • The maximum direct or indirect foreign share ownership in Providers in the form of a limited-liability company which are established and owned by foreign citizens and/or legal entities is 85% of the total issued capital.
  • Providers are required to have IDR 1 billion in capital (i.e. paid-up capital for a limited-liability company and self-capital for a cooperative) at the time they apply for registration and IDR 2.5 billion at the time they apply for the license. Limited-liability companies or cooperatives intending to engage in the P2P Lending Services business are required to register with and subsequently apply for a license to the OJK.
  • Providers are prohibited from conducting other businesses outside the P2P Lending Services, such as acting as lender or borrower, providing security or guarantee for other parties’ debt and issuing bonds.

Vietnamese fintechs and the $ 35 billion dream (VietnamNet), Rated: A

According to Boston Consulting Group (BCG), roughly $53 billion has been reserved for fintech firms and there are over 3,500 fintech firms all over the world.

According to PwC, online payment and mobile money transfer services are becoming the gateway to approach a fraction of the population which have not yet transacted with banks.

It forecasts that mobile technology will help many new customers access financial services and open up a new market worth $3 trillion in global payments.

Vietnam has 90 million people, most of whom are young, 50 percent of whom have internet access and 70 percent use smartphone.

These factors, according to Nielsen, a market survey firm, are the important reasons for experts to believe Vietnam is a potential fintech market.

Are crowdfunding and P2P lending good investments? (The Star), Rated: A

However, there is also “equity-based” crowdfunding, which is smaller, but more interesting from an investment point of view.

Peer-to-peer lending, on the other hand, is not concerned with equity, but with debt.

In Malaysia, it will still take a few years before these alternatives really take off, either as a way to obtain debt or equity for entrepreneurs or as an investment vehicle for investors.

But some fintech crowdfunding start-ups already exist, such as pitchIN, Mystartr and CrowdPlus.asia.

For those of us looking to obtain unsecured loans for personal consumption, the bank still seems the best option. For now.

Africa

World Bank offers African FinTech startups better odds (IT Web Africa), Rated: AAA

An exclusive pan-African post-acceleration programme, XL Africa has been launched by the World Bank Group for African digital startups.

XL Africa aims at supporting enterprises in any sector that are making smart use of digital solutions and connect these businesses with angel investors and venture capital firms in a bid to raise growth capital estimated at US$1.5 million.

Authors:

George Popescu
Allen Taylor