Thursday September 19 2019, Weekly News Digest

MAS Singapore

News Comments Today’s main news: SoFi to get its name on a football stadium. Petal raises $300M. Funding Circle closing in on 1-year anniversary of float. Zopa sends warning of imitation scams. Cumulative UK alt lending hits 11.3B GBP. Companies to get social credit in China. Today’s main analysis: Student loan refinancing rates are down. […]

The post Thursday September 19 2019, Weekly News Digest appeared first on Lending Times.

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News Summary

United States

Sundays at SoFi: NFL Stadium in Inglewood Lands a Corporate Name (Commercial Observer), Rated: AAA

Online lender SoFi Lending Corp. has secured the naming rights and a 20-year deal with the Rams and Chargers, according to the Los Angeles Business Journal. The firm agreed to pay around $20 million per year, reports say.

SoFi Stadium, which will be the largest in the NFL, is the centerpiece to the much larger $5-billion Hollywood Park project developed by Rams Owner/Chairman E. Stanley Kroenke. Construction is 75 percent complete, and the stadium is expected to open next summer for other events before the NFL preseason begins in August.

Taylor Swift to Open SoFi Stadium Next Summer (KFI AM 640), Rated: B

The opening of the $2.6 billion SoFi Stadium will happen next summer on July 25th. However it’s not for a Rams or Chargers game. Swift announced that she will play two shows (July 25th and July 26th) at the stadium as a part in her much-anticipated 2020 world tour.

Economy is Top Concern for Small Businesses Ahead of 2020 Election (OnDeck), Rated: AAA

Key Findings from the OnDeck Small Business Survey:

  • Economic concerns arise in several dimensions, including tax policy, job growth, support for small businesses, government spending and the overall economic climate. These issues were cited as the top concerns of more than 33% of those surveyed;
  • Immigration was an issue of interest for 11.3% of small business owners surveyed, ranking second behind the economy as a concern.
  • 57% of small businesses surveyed said they were either ”Very Optimistic” or ”Somewhat Optimistic” about the economic outlook for their businesses;
  • 93% of those surveyed said they plan to vote in the 2020 election.
  • 60% of small business owners surveyed said they already know who they plan to vote for in the 2020 presidential election.

President Donald Trump was the choice of 37% of small businesses surveyed, followed by Joe Biden at 18%. When combined, the top five Democratic candidates were the preference of 44% of respondents.

Student Loan Refinancing Rates Down Sharply (Credible), Rated: AAA

During August:

  • Rates on 10-year fixed-rate loans averaged 4.70%, down 22% from a July 2018 peak of 6.05%
  • Rates on 5-year variable-rate loans averaged 4.03%, down 14% from September

A borrower repaying the average graduate school debt of $84,300 over 10 years at 6.36% interest — the average rate for grad school loans in recent years — could save:

  • $20,927 by refinancing into a 5-year variable rate loan
  • $8,327 by refinancing into a 10-year fixed-rate loan

Credit card start-up Petal raises $ 300 million debt round from Jefferies (CNBC), Rated: AAA

The New York City-based company announced a $300 million debt round from Jefferies on Tuesday, adding to existing venture capital investments from names like Peter Thiel’s Valar Ventures.

Plaid adds credit card data to Liabilities product (Tearsheet), Rated: A

In July, Plaid launched its Liabilities product that gives developers access to real time information about what consumers owe. Expanding beyond student loan data, the company has added support for credit card information, so firms can build better debt management solutions.

GoCardless launches US debit payments solution and opens San Francisco office (TechCrunch), Rated: A

GoCardless, the London fintech that aims to become the one-stop shop globally for businesses that want to let customers pay via recurring bank payments, has launched a U.S. debit solution.

Specifically, GoCardless’  new U.S. product supports debit payments on the ACH (Automated Clearing House) network.

The company has also opened an office across the pond in San Francisco’s financial district, headed up by Andrew Gilboy, general manager, North America, who was previously the company’s chief revenue officer.

Nav Launches New Feature to Help Business Owners Boost Business Credit (PR Newswire), Rated: A

Today Nav, a fintech company that matches business owners with their best financing options for free, announced new offerings to help small business owners boost their business credit scores, giving an easy solution to developing a strong business credit profile that alternative and traditional lenders can trust and finance.

Why would HUD gut its own disparate impact rule? (The Times Weekly), Rated: AAA

Since 2013, the disparate impact rule has objectively examined the effects of business practices with lenders, landlords, insurers, and real estate professionals against the provisions of the 1968 Fair Housing Act. The rule required that first a plaintiff must establish a discriminatory effect in policies and/or practices, before the defendant(s) would bear the responsibility of proving their own practices were nondiscriminatory.

During delivery of Capitol Hill testimony earlier this spring, Nikitra Bailey, an EVP with the Center for Responsible Lending (CRL) also underscored the importance of disparate impact in fair housing.

“Disparate impact analysis encourages creative approaches that both increase effectiveness and inclusion,” testified Bailey. “This process and the value of disparate impact analysis was recently pointed out and endorsed by the largest personal loan company in the country, Lending Club.”

BlueVine Appoints Dosh & PayPal Vet Brad Brodigan As New Chief Commercial Officer (Crowdfund Insider), Rated: A

Online lender BlueVine announced on Wednesday it has appointed Brad Brodigan as its new Chief Commercial Officer. BlueVine reported that through this role, Brodigan will be responsible for overseeing revenue-generating functions including sales, customer service, and partner management.

Money360 Closes $ 170 Million in Commercial Real Estate Loans in July and August (GlobeNewswire), Rated: A

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, announced today it closed approximately $170 million in loans during July and August. This benchmark brings Money360 close to $500 million in loans closed this year.

Groundfloor Now Allows Real Estate Developers to Gain Pre Approval on Loans (Crowdfund Insider), Rated: A

Groundfloor, a real estate lending and investing platform that allows anyone to participate directly in real estate investments, has launched a new product to make the lending process more easier for real estate investors. Groundfloor now allows certain developers to gain pre-approval on loans with a new program called “QC Maxx.”

ABS East; Stripe’s Lending Arm; Madden Decision (PeerIQ), Rated: A

In financing news, student loan fintech “College Ave” locked down a $300MM securitization and a AAA rating this week. The securitization was co-led by both Barclays and Goldman Sachs. Affirm, led by Max Levchin, is reportedly close to wrapping up a $1.5 Bn debt and equity financing with Thrive Capital and Spark Capital leading.

Stripe is mirroring other payments companies that have since built lending capabilities – notably, Square and PayPal. Stripe believes it can compete in an already crowded small business lending market (OnDeck, Kabbage, Fundera, Funding Circle, etc.) due to its data & channel advantages stemming from its payments business.

Fintech Firm OppLoans Announces Its First Bank-Led Credit Facility (GlobeNewswire), Rated: A

OppLoans, a growing fintech and top rated direct-to-consumer online lending platform, announced today that it has secured its first bank-led asset-backed revolving credit facility. This facility structure will enable OppLoans to further its mission by broadening access to online personal lending products for more middle-income consumers with credit challenges.

Aura Completes Three Social Bond Issuances Totaling 5 million Over Last 4 Months (Yahoo! Finance), Rated: A

M&G Investments and Community Capital Management, a mutual fund that specializes in impact and Community Reinvestment Act (CRA) related investments, have joined with U.S. and international banks to invest $145 million in Aura’s social bonds to finance the origination of affordable, small dollar installment loans to working families in the United States.

Challenger banks insist they’re equal to the task of lending (American Banker), Rated: A

Almost all U.S. challenger banks offer no-fee checking, savings accounts and enhanced personal financial management tools. Now some of the most popular have taken, or are poised to take, their next step: making loans.

Personal loans and credit cards are lucrative but inherently risky, and these young companies — like MoneyLion, Varo and others — will have to prove to regulators, investors and the public that they have the wherewithal to weather downturns in the credit cycle.

Cash-flow data shows promise as predictor of credit risk (American Banker), Rated: A

Melissa Koide, co-founder and CEO of FinRegLab, analyzed loan data from six lenders that use cash-flow data in their underwriting. She shares what she found.

Prevu Raises $ 2 Million in Seed Funding to Grow its Digital Home Buying Platform (Digital Journal), Rated: A

Prevu, a customer-focused digital home buying platform delivering industry-leading efficiency and savings, announced today the closing of its $2 million seed funding round. The round was led by Corigin Ventures, a prominent seed-stage venture capital firm with expertise in the real estate technology and consumer industries as well as a history of backing startups disrupting residential brokerage business models.

Embattled Prodigy Network CEO Rodrigo Niño to step down (The Real Deal), Rated: A

Prodigy Network founder Rodrigo Niño is stepping down from his position as CEO amid mounting financial and legal issues, The Real Deal has learned.

Prodigy, a real estate crowdfunding platform, has faced criticism from investors in recent months over underperforming investment properties and unpaid distributions. On Monday, an investor in one of Prodigy’s newest projects — the 13-story Standard Hotel in Chicago — filed a lawsuit alleging the firm was “insolvent” and had used investments “for purposes other than those relating to the project.”

EquityMultiple Provides Investors with Options to Take Advantage of Unique Tax Benefits (Crowdfund Insider), Rated: A

Opportunity Zones are new, tax-advantaged vehicles for investors to earn more on their money. Created by the Tax Cuts and Jobs Act of 2017, the first qualified opportunity zones (QOZs) first hit the market in early 2018. Designated by state authorities, there are now thousands of QOZs in the US designed to boost development in selected communities. Investors receive a break on capital gains taxes which can be significant. Local officials can spur economic development which leads to more jobs. Online investment platforms immediately saw the opportunity intrinsic to QOZs with multiple platforms now offering investments in developments that benefit from these tax breaks.

Why are your Opportunity Zone Offerings better than some others available on competing investment platforms?

Soren Godbersen: There are a number of firms out there now marketing Opportunity Zone offerings to investors. We’re proud of what we have been able to offer to our investor network and there are a few things about our Opportunity Zone investments that are unique:

How to Recession-Proof Your Investments (U.S. News), Rated: A

AFTER A DECADE OF steady growth, the economic cycle is due for a reversal, with concerns of a recession.

  • Consider other types of investments outside of stocks and bonds.
  • Know that timing the market is difficult.

What to Invest in During a Recession?

Other less correlated assets include the real estate niche. With real estate crowdfunding, hypermarket segmentation is available. Investors can choose their property type and geographic region when investing in real estate. Two real estate crowdfunding platforms for accredited investors are CrowdFund and EquityMultiple. Fundrise and Groundfloor open targeted real estate investing to nonaccredited investors as well.

Litecoin Non-Profit to Hold Undisclosed Treasury Sum with Crypto Lender (CoinDesk), Rated: A

The Litecoin Foundation is putting its capital to work, lending at interest through another cryptocurrency program.

The Foundation has tapped the Celsius Network, a blockchain-based crypto lending program, to become its preferred crypto wallet, Celsius Network CEO Alex Mashinsky told CoinDesk.

As part of the deal, the Foundation will allocate an undisclosed portion of its treasury to the Network. LTC holders can receive up to 10.53% annually back on their crypto holdings and dollar loans as low as 4.95 percent as well.

Fintechs give small business more choice for credit than just banks (PaymentsSource), Rated: AAA

It’s no secret working capital is the lifeblood of all small businesses. It’s the fuel that keeps them running, helps them grow and take on new opportunities.

And yet, so many small businesses struggle with cash flow. In fact, according to a recent study from Intuit QuickBooks, 61% of small businesses have had cash flow issues in the past year.

Source: FIS

Walmart’s New Credit Cards Have One Big Goal: Boost E-Commerce (Bloomberg), Rated: A

In a sign of how much Walmart Inc. is betting on e-commerce, the retailer’s revamped credit-card program with Capital One Financial Corp. offers better rewards for online shopping and checking out with its mobile app.

The new options, which become available Sept. 24 and use Mastercard Inc.’s network, offer 5% cash back for purchases made at Walmart’s website, including groceries. At the chain’s physical stores, shoppers only get that rate for a year and have to check out with Walmart Pay at the cashier. Otherwise, store customers get 2% back.

Finicity Releases New Verification of Income and Employment Solution for Lenders (PR Web), Rated: B

Finicity, a provider of real-time financial data access and insights, announced today the release of its new Verification of Income and Employment (VOIE) solution using patent-pending TXVerify technology that will speed up borrower verifications and further advance the industry shift toward a fully digital experience.

The Finicity VOIE solution digitally extracts a borrower’s pay statement data from the paystub and then cross-verifies that key data with their income transactions from their financial institutions. Enabled by its TXVerify technology, this detailed vetting process creates a real-time picture of an applicant’s income and employment for fast, accurate reports. The solution does this by leveraging the highest value data – direct from banks – along with a scan, photo or PDF of a borrower’s paystubs. This process significantly shifts the current paradigm from a mostly manual process to one that is fully digital, all while reducing fraud and increasing confidence in the underwriting process.

Sallie Krawcheck: Why ‘don’t buy daily coffee’ is terrible advice (CNBC), Rated: B

“Don’t buy daily coffee” is the go-to financial advice. Co-founder and CEO of Ellevest, Sallie Krawcheck, says that advice is misleading and just enjoy your latte.

Ethereum Development Studio ConsenSys Announces Codefi, A New DeFi Software Suite (Crowdfund Insider), Rated: A

ConsenSys founder Joseph Lubin announced at the Ethereal Tel Aviv press conference (on September 15) that his New York-based venture studio is launching a new product, Codefi, for the emerging decentralized finance (DeFi) ecosystem.

Despite not having invested in emerging DeFi platforms, Lubin described P2P lending systems such as Uniswap and MakerDAO as some of the blockchain industry’s most promising projects.

ApplePie Capital Partners with LSQ Funding on A/R Franchise Financing (Monitor Daily), Rated: B

Online lender ApplePie Capital entered into a new strategic partnership with LSQ Funding Group, a technology-enabled provider of accounts receivable financing for small and mid-sized businesses.

United Kingdom

Funding Circle nears one-year anniversary of London float (P2P Finance News), Rated: AAA

The peer-to-peer business lender began conditional dealings on the London Stock Exchange on 28 September before being officially admitted to the bourse on 3 October. It launched with an offer price of 440p per share, giving the firm a valuation of £1.5bn.

However, its market capitalisation as of 17 September has since dropped to £348.7m, with its shares now trading at just over 100p.

Zopa warns over imitation scam firms (P2P Finance News), Rated: AAA

ZOPA has warned over a growing number of scam operators targeting UK customers using the peer-to-peer lender’s name to dupe investors.

They include: asking customers directly for their Zopa login details; claiming to work with companies investing money in Bitcoin or other cryptocurrencies; or working with companies who would ask them to take out a Zopa loan to fund an investment.

Record numbers of investors and borrowers as cumulative lending hits £11.3bn (P2P Finance News), Rated: AAA

MORE than 150,000 lenders were invested in 321,483 loans facilitated by Peer-to-Peer Finance Association (P2PFA) platforms at the end of the second quarter, which the trade body deemed “a record level of involvement in the sector”.

Funding Circle is the largest P2P lender among the P2PFA platform members, having lent out a cumulative total of £5.4bn as of the end of the second quarter. It is followed by Zopa at £4.5bn, with ThinCats in third place with just over £491m.

£814m of new loans were made in the second quarter, compared to £866m in the first three months of 2019.

Monzo halts cash referrals as it hits three million users (AltFi), Rated: A

Monzo has ended its cash incentivised referral system as the firm continues to grow users at a rapid pace.

Monzo now has passed the 3 million ‘users’ number, hitting the milestone late on yesterday and is now onboarding 55,000 people to Monzo every week.

Transferwise Books Its Third Consecutive Year of Profits (Lendit), Rated: A

European fintech company Transferwise has recorded its third year in a row of profits; the company reported its net profit after tax climbed to £10.3 million in the fiscal year ending March 2019, up 66% from the previous year on revenue of £179 million;

Payment provider Klarna appearing at London Fashion Week has everybody talking (MyLondon), Rated: A

UK fashion Designer Henry Holland decided to take things up a notch in Saturdays catwalk show with a T Shirt design in collaboration with Klarna.

Klarna expands partnership with Mothercare (The Paypers), Rated: B

Klarna and Mothercare have announced an extension to their partnership, which will see Klarna’s Pay later, Pay in 3, and Slice it products available online and in-store across the UK.

OakNorth Bank provides £3.7m loan to Clearview Developments (London Loves Property), Rated: A

OakNorth Bank the UK bank powered by OakNorth has provided a £3.7m loan to Clearview Developments for a new residential development in Royal Tunbridge Wells.

Smarterly and OakNorth Bank partner to offer new Notice Cash ISA range to Smarterly customers (Fintech Finance), Rated: B

The product range includes five Cash ISA Notice accounts, exclusive to Smarterly, ranging from 35 days at 1.05% to one year at 1.25%; Customers will not be able to apply for these products with OakNorth directly;

These five Cash ISAs Notice Accounts are:

  • 35 days – 1.05%
  • Three months – 1.10%
  • Six months – 1.15%
  • Nine months – 1.20%
  • One year – 1.25%
China/Hong Kong

Coming Soon: ‘Social Credit’ for Companies, Too (WSJ), Rated: AAA

A key target of China’s coming “social credit” system, which among Westerners usually triggers visions of “1984”-style monitoring of people, is actually misbehaving businesses.

Corporate America needs to prepare.

About 80% of information on the main data-sharing platform relates to companies rather than individuals, according to China consulting…

Hexindai Reports Unaudited First Quarter of Fiscal Year 2020 Financial Results (PR Newswire), Rated: A

First Quarter of Fiscal Year 2020 Operational Highlights

  • Total loan volume facilitated[1] was US$ 28.2 million (RMB192.3 million) during the first quarter of fiscal year 2020, a decrease of 93.5% from the first quarter of fiscal year 2019.
  • Gross billing amount (net of VAT)[2] was US$4.7 million during the first quarter of fiscal year 2020, a decrease of 90.7% from the first quarter of fiscal year 2019.
  • Gross billing ratio (net of VAT)[3] for credit loans was 16.7% during the first quarter of fiscal year 2020, an increase from 11.7% during the first quarter of fiscal year 2019.
  • Number of borrowers[4] was 18,546 during the first quarter of fiscal year 2020, a decrease of 36.0% from the first quarter of fiscal year 2019.
  • Number of investors[5] was 9,534 during the first quarter of fiscal year 2020, a decrease of 85.9% from the first quarter of fiscal year 2019.

First Quarter of Fiscal Year 2020 Unaudited Financial Highlights

  • Net revenue was US$4.9 million during the first quarter of fiscal year 2020, a decrease of 90.5% from the first quarter of fiscal year 2019.
  • Operating costs and expenses were US$12.6 million during the first quarter of fiscal year 2020, a decrease of 18.9% from the first quarter of fiscal year 2019.
  • Net loss was US$7.2 million during the first quarter of fiscal year 2020, compared to net income of US$29.7 million in first quarter of fiscal year 2019.
  • Basic loss per ordinary shares in the first quarter of fiscal year 2020 was US$0.15, compared to basic earnings per ordinary shares (“EPS”) of US$0.62 in first quarter of fiscal year 2019.
  • Diluted loss per ordinary shares in the first quarter of fiscal year 2020 was US$0.15, compared to diluted EPS of US$0.56 in first quarter of fiscal year 2019.
  • Adjusted net loss attributable to Hexindai Inc.’s shareholders (Non-GAAP) in the first quarter of fiscal year 2020 was US$7.0 million, compared to adjusted net income attributable to Hexindai Inc.’s shareholders (Non-GAAP) of US$29.9 million in the first quarter of fiscal year 2019.
  • Adjusted EBIT (Non-GAAP) in the first quarter of fiscal year 2020 was (US$5.8) million, compared to US$36.6 million in the first quarter of fiscal year 2019.

Zhang Yue, senior vice president at CreditEase, discusses the demand for credit in China, write downs in her portfolio, P2P lending, their wealth management business and their expansion plans.

Securing privacy concerns in FinTech in Hong Kong (Lexology), Rated: A

Hong Kong has built a strong environment for fostering innovation and financial technology or FinTech. With its large financial sector and its strategic role with Mainland China and gateway to the rest of Asia and the world, Hong Kong has the potential to take on an important role in being a leader in FinTech. In March 2019, for example, Hong Kong issued its first virtual banking licences, which will likely increase adoption of FinTech in the financial services sector.

Emerging technologies used in Fintech services and operations come in different forms, and include:

  • data analytics that support the operations of financial institutions (for example, credit scoring, loan processing);
  • peer-to-peer (P2P) financing (such as P2P lending and crowdfunding platforms);
  • distributed ledger technology, such as cryptocurrency, bitcoin transactions and smart contract applications, as well as blockchain services to help reduce fraud by keeping provenance data on the blockchain; and
  • financial investments, such as stock trading apps, robo-advisors and algorithmic trading and budgeting apps.
European Union

Binance Announces Phase Five of Crypto Lending Featuring Privacy Coins XMR, ZEC, and DASH (Crypto-Economy), Rated: AAA

Leading cryptocurrency exchange Binance has announced its launch of the fifth phase of its cryptocurrency lending product in which it customers subscribe to an allocation to lend other users their funds for interest rates as high as 15% Apr.

the 15% interest rate was only available to Binance’s native coin lenders in the first phase. On Tuesday, the exchange revealed three coins that will be included in the crypto lending product including only privacy-centric coins Monero [XMR], Zcash [ZEC] and Dash [DASH]. Their annualized interest rates will be a constant 3.5% but the lending period is only two weeks starting from this Friday September 20th through October 4th.

P2P Lender creditshelf to Acquire SME Finance Provider Valendo (Crowdfund Insider), Rated: A

creditshelf Aktiengesellschaft has signed a purchase agreement for the acquisition of all shares in Valendo – part of the finleap Fintech ecosystem.

According to a company release, the purchase price was in the “low seven-digit amount.” Payment will take place in two separate tranches. creditshelf has the option of settling both tranches in the course of two capital increases via a contribution in kind.

International

How MAS propelled Singapore to the top of the class (Euromoney), Rated: AAA

Today, Singapore sits proudly atop the Euromoney Country Risk (ECR) rankings. Based on ECR’s blend of financial and economic data, combined with the views of leading economists, no country in the world today has a stronger financial position.

When MAS said in July 2019 that it planned to issue five new digital banking licences, analysts soon spotted that three of them were wholesale licences, open to banks and non-banks alike.

Winners will be encouraged to lend, using digital means, to small and medium-sized enterprises and other non-retail segments – further evidence that corporate banking will be the next segment to feel the hot breath of disruption on its neck.

Source: Euromoney County Risk

Goldman Leads Trulioo’s $ 70M Raise To Expand Global Digital ID (PYMNTS), Rated: A

Trulioo, the global identity verification provider, has raised $70 million in new funding, eyeing growth in its core digital identification efforts, the company announced Tuesday (Sept. 17).

The company said in a release that the funding includes $60 million in a Series C round that was led by Goldman Sachs Growth Equity. Other participants included Citi VenturesSantander InnoVentures and existing investor American Express Ventures. The remaining $10 million came as unannounced follow-on financing from early investors, including BDC Capital and Blumberg Capital.

Equifax Continues Leadership In Alternative Data With Worldwide Urjanet Partnership (PR Newswire), Rated: A

Equifax Inc. (NYSE: EFX) and Urjanet today announced a global partnership that empowers consumers and businesses to share their payment data from thousands of utility, telecom and cable providers worldwide for a more complete picture of individual payment history, easier identity verification and the potential for better access to credit. This partnership builds on Equifax’s leadership in alternative data, using the Urjanet Utility Data Platform to incorporate consumer-permissioned data into the Equifax differentiated data approach.

5 Reasons Investors Should Consider Tokenized Assets (Benzinga), Rated: A

According to Deloitte, we shouldn’t view DLT as just a new type of “database ” but rather as a new way to organize the security value chain from issuance to custody. But what exactly can be transmitted through this chain?

Fractional ownership – take as much as you want

Digitizing shares makes them highly divisible, meaning that investors can buy very small percentages of tokenized assets.

So long, intermediaries! 

Security tokens have a simpler investment structure and lower fees.

On the way to maximum liquidity

Cherry on top

A security token is basically a digital signature connected with a smart contract responsible for facilitation and verification of ownership rights transactions.

India

Ribbit leads Series B funding in online investment platform Groww (VC Circle), Rated: AAA

Groww, an online investment platform that sells mutual fund products, has raised $21.4 million (Rs 152.5 crore at current exchange rate) in a Series B funding round led by Silicon Valley-based venture capital firm Ribbit Capital.

Groww said existing investors Sequoia India and Y Combinator also participated in the funding round.

RBI looking at how NBFCs, HFCs set their lending rates (livemint), Rated: AAA

The Reserve Bank of India (RBI) is studying how non-bank lenders and home financiers price their loans, close on the heels of directing commercial banks to link their loan rates to external benchmarks.

Source: livemint

RBI restricts access to credit data of consumers (Economic Times), Rated: A

The Reserve Bank of India has ordered commercial banks and non-banking lenders to stop providing unregulated entities access to consumer data held by credit bureaus, dealing a blow to scores of fintech startups that have based their business models on such information.

Source: India Times

RBI not in favour of ‘teaser’ loans, examines rate-setting mechanism of NBFCs, HFCs (CNBCTV18), Rated: B

The banking regulator is not in favour of hybrid loan products or ‘teaser loans’, a senior Reserve Bank of India (RBI) official today clarified. The remark gains significance in the light of State Bank of India chairman Rajnish Kumar’s recent comment that SBI would seek the regulator’s view on whether banks can introduce fixed-cum-floating rate products.

No dearth of demand on credit side, disbursed credit worth INR 5 billion: Flexiloans Co-founder (IBS Intelligence), Rated: A

FlexiLoans.com, an online lender for MSMEs in India, said that it has crossed a milestone number of disbursing over INR 5 billion of unsecured business loans across the country with its unique digital-only model. The Mumbai-based company, which has disbursed over 16000 loans across 1000 cities and towns in the country, says that there is no dearth of demand on the credit side. The company caters primarily to micro, small and medium-sized businesses.

How has the online lending market shaped up in the last few years?

Digital Lending market is currently at about USD 2 billion, up from about USD 1 billion in 2016. Significant traction and market niches discovered by various FinTech startups across the country have made this space very exciting, holistic and game-changing.

Online SME lender Cash Suvidha plans to raise upto $ 10 million (IBS Intelligence), Rated: B

The online lender for business and personal loans, Cash Suvidha, is planning to raise $5 million -$10 million equity funds in the next six months.

Asia

Terafunding Closes US$ 18M Series B Financing Round (FINSMES), Rated: AAA

Terafunding, a Seoul, South Korea-based Peer-to-Peer (P2P) lending platform, raised US$18M in Series B funding.

Backers included KB Investment, Hana Ventures, IBK Industrial Bank and Woomi Construction.

Julo raises $ 10M to expand its P2P lending platform (TechCrunch), Rated: A

Julo, a peer-to-peer lending platform in Indonesia, said on Wednesday it has extended its $5 million Series A raise to $15 million as it looks to scale its business in the key Southeast Asian market.

The $10 million Series A2 round for the Jakarta-headquartered startup was led by Quona Capital,  with Skystar, East Ventures,  Provident, Gobi Partners and Convergence participating.

Chinese P2P Firms Seeks Business in Vietnamese Market (W7 News), Rated: A

The declining demand for peer-to-peer (P2P) lending in China has prompted firms to find business elsewhere. LearnBonds report that Chinese P2P companies are eyeing Vietnam, which alarmed local lending companies.

MENA

Now Money offers alternative for Gulf’s unbanked expats (Financial Times), Rated: AAA

About 70 per cent of the population in the Middle East and north Africa do not have access to banking services, says Ian Dillon, co-founder of Now Money, a Dubai-based financial technology group.

The GCC recorded outbound remittances of $120bn in 2017, according to World Bank data. However, Gulf banks tend to exclude workers earning less than $1,400 a month, leaving most of them reliant on exchange houses to remit cash home.

Authors:

George Popescu
Allen Taylor

The post Thursday September 19 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 23 2019, Weekly News Digest

young credit card delinquents

News Comments Today’s main news: DBRS assigns provisional ratings to SoFi Consumer Loan Program 2019-3 Trust. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2019-3. Funding Circle seeds shareholder input on wind-down plans for investment trust. TransferWise valuation doubles to $3.5B. Today’s main analysis: High income, super prime borrowers take bigger share of […]

The post Thursday May 23 2019, Weekly News Digest appeared first on Lending Times.

young credit card delinquents

News Comments

United States

United Kingdom

European Union

Other

News Summary

United States

DBRS Assigns Provisional Ratings to SoFi Consumer Loan Program 2019-3 Trust (DBRS Email), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes (collectively, the Notes) to be issued by SoFi Consumer Loan Program 2019-3 Trust (SCLP 2019-3):

— $420,000,000 Class A Notes at AAA (sf)
— $31,100,000 Class B Notes at AA (sf)
— $62,500,000 Class C Notes at A (sf)
— $35,600,000 Class D Notes at BBB (sf)

View the full report here.

KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2019-3 (Yahoo! Finance), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Prosper Marketplace Issuance Trust 2019-3 (PMIT 2019-3). This is a $380.99 million consumer loan ABS transaction.

Class Rating Initial Class Principal
A A- (sf) $270,750,000
B BBB- (sf) $51,470,000
C BB- (sf) $39,720,000
D B- (sf) $19,050,000

Millennial DQs on the rise; GreenSky earnings; OCC on a fix for Madden? (PeerIQ), Rated: AAA

US consumer debt rose by 0.9% QoQ in 1Q to $13.7 Tn.

Source: Bloomberg, PeerIQ

Mixed FinTech Earnings

FinTech issuers saw growth in revenues and loans. Pace of loan growth weakened slightly as originations fell at Enova and grew by less than 10% YoY at OnDeck and OneMain. Stock price performance post earnings was mixed. Enova saw its stock price increase by 18% post earnings while OnDeck’s stock price dropped by 16%.

Source: Bloomberg, PeerIQ

High Income and Super Prime Borrowers Taking Bigger Share of Personal Loans on LendingTree Marketplace (Lending Tree), Rated: AAA

Over the past 10 years, the amount of outstanding personal loan debt has increased by 75%.

Key findings

  • The share of personal loan inquiries from those with incomes over $108,000 increased by 77% between the second quarter of 2017 and the first quarter of 2019, while the share of inquiries from people earning over $84,000 increased by 65%.
  • The share of personal loan inquiries from super prime borrowers (740 and higher) increased by 47% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime and super prime borrowers (680 and higher) rose by 36%.
  • The share of personal loans closed by borrowers with incomes over $108,000 on the LendingTree marketplace increased by 38% between the second quarter of 2017 and the first quarter of 2019, and the share of borrowers earning over $84,000 increased by 26%.
  • The share of closed personal loans from super prime borrowers (740 and higher) increased by 37% between the second quarter of 2017 and the first quarter of 2019, and the increase in prime borrowers (680 and higher) rose by 19%.
  • Borrowers with incomes up to $24,000 decreased their share of closed loans by 22%, and those with incomes up to $48,000 decreased their share by 17%.
  • The share of loans closed by borrowers with scores below 560 increased by 28%, but the share of closed loans from borrowers with scores between 560 and 619 dropped by 24%.
  • The share of inquiries from people with incomes up to $24,000 dropped by 27% during the same period, while inquires from those with incomes up to $48,000 dropped by 16%.
  • The share of loan inquiries by borrowers with scores below 560 decreased by 12%, and the share of closed loans from borrowers with scores below 620 decreased by 9.2%.

For example, in the SoFi Consumer Loan Program 2017-3 LLC, securities show that the average gross income of borrowers as of May 2017, was $141,780, with an average FICO score of 731, and an average VantageScore of 682. The most recent offering, reported in February 2019, showed borrowers had an average income of $151,144, an average 753 FICO score, and a 713 VantageScore.

Job Loss and Medical Expenses Leading Causes of Bad Credit (Yahoo! Finance), Rated: AAA

Job loss and medical expenses are the leading factors causing Americans’ credit scores to drop, according to new research by Elevate’s Center for the New Middle Class (CNMC).

According to the new report, 55% of respondents cited job loss or reduction in work hours as the reason why their credit score dipped below 700. Nearly a quarter (24%) cited medical bills as the primary cause. Following these leading factors, a variety of typical, seemingly innocuous expenses follow, including repairing a car (11%), leaving home for the first time (6%), and putting a child through college (5%).

Non-prime consumers are 86% more likely to experience multiple factors that negatively affect their credit score compared to just one. For example, of the 23% who mention a medical reason, about three-quarters (75%) also experienced an income drop, severely complicating their ability to manage and cover medical expenses.

Americans Use Short-Term Loans to Pay Off Debt (Lexington Law), Rated: A

American debt is at an all-time high. How did we manage to dig ourselves into a steep $13 trillion hole? Credit card debt alone accounts for $1 trillion of this debt, with the average balance over $6,000 per capita.

  • 33% of Americans are going into debt to pay off debt
  • Generation X is most likely to incur short-term debt to pay down long-term debt
  • Women who use debt to make other debt payments tend to do so multiple times

Bernardo Martinez of Funding Circle USA (Lend Academy), Rated: A

In this podcast you will learn:

  • The knowledge that Bernardo brought with him from PayPal.
  • What he has learned in his first year on the job at Funding Circle.
  • The range of terms for their small business loans.
  • The types of investors they have on their platform today.
  • How and why 72% of their customers came to Funding Circle first.
  • How their offering compares to what is offered at banks today.
  • Who Bernardo sees as their biggest competitors.
  • How they view the SBA and their loan guarantee program.
  • How the LendingClub partnership came together.
  • Why no other online platform has reached significant scale in term loans for small business.
  • How they expanding their business into Canada.
  • Who they are hiring for their new Denver office.
  • How they are approaching their relationships with regulators in DC these days.
  • How they helped get SB-1235 passed in California.
  • How Funding Circle is monitoring their risk as it pertains to the economic cycle.
  • What is most exciting for Bernardo today at Funding Circle.

How a Silicon Valley startup is trying to rebrand payday loans (Vox), Rated: AAA

Once every few weeks, Myra Haq withdraws $100 or so from Earnin, an app that lets people borrow small sums of money.

The app lets her withdraw up to $100 a day, and never more than what she actually makes in a pay period, and then withdraws the money from her checking account once her direct deposit hits.

Unsurprisingly, payday lenders typically target low-income people — a 2013 Pew report found that 58 percent of people who use payday loans have trouble meeting monthly expenses at least half the time and usually borrow to deal with “persistent cash shortfalls rather than temporary emergencies.”

The average American household with student debt owes almost $48,000, and experts believe that student loan debt has held millennials back from major life milestones like marriage, homeownership, and having children.

How One Company Wants to Reduce or Even Eliminate Your Unpaid Medical Bills (Forbes), Rated: A

Relying on personal savings or insurance may not even be enough to pay off expensive medical bills. As a result, .

Earnin invited some community members to try HealthAid and was able to find savings for about 90% of people.

In one case, Earnin was able to get a patient’s $48,000 bill fully forgiven.

Figure Technologies loan platform secures $ 1B financing facility (CoinGeek), Rated: A

Figure Technologies looks to be profiting from increased interest in the cryptocurrency industry. Specifically, in a press release dated May 9, it was announced that the company had secured a $1 billion line of credit on the Provenance.io blockchain. The agreement also involves two other companies, Jefferies and WSFS Institutional Services, which will provide the line of credit.

LendKey’s Vince Passione on partnering with banks and credit unions and the future of lending as a service (Tearsheet), Rated: A

Vince joins us on the show to talk about his partnership model and the challenges and opportunities of working alongside banks and credit unions, which have deployed more than $2 billion in lending capital on the digital platform.

Small-business fintech launches lending platform for banks (American Banker), Rated: A

Spurred by bank interest, small-business lending platform Biz2Credit has unveiled a software-as-a-service version of its loan management, servicing and risk analytics product.

After HSBC and New York-based Popular Bank contracted with Biz2Credit to use the software, the company decided to launch the platform for all banks to use.

At a cramped desk on the 22nd floor of a downtown Manhattan office building, Gary Roth spotted a looming disaster.

An urban planner with two master’s degrees, Mr. Roth had a new job in 2010 analyzing taxi policy for the New York City government. But almost immediately, he noticed something disturbing: The price of a taxi medallion — the permit that lets a driver own a cab — had soared to nearly $700,000 from $200,000. In order to buy medallions, drivers were taking out loans they could not afford.

Prodigy Finance Aims to Bridge Healthcare Gap with New Loan Offering (University Business), Rated: A

Prodigy Finance today announces it will be supporting international students pursuing Master of Public Health (MPH) and Master of Science in Public Health (MSPH) degrees, Master of Science in Nursing (MSN) degrees, as well as those enrolling in Advanced Standing Dental programs and Select Certificate Dentistry programs in the U.S.

Crypto Lending Startup BlockFi Slashing Interest Rates on Ether Deposits (CoinDesk), Rated: A

Cryptocurrency lending startup BlockFi is almost halving the interest rates it offers on ether (ETH) deposits, while some bitcoin (BTC) rates will increase slightly.

From June 1, customers with 25–100 ETH balances in a BlockFi Interest Account (BIA) will see the interest rate drop from the current 6.2 percent annual percentage yield (APY) to 3.25 percent, the startup announced Tuesday. Those holding over 100 ETH balances will earn just 0.2 percent APY.

Some BTC balances, on the other hand, will see a slight interest rate increase – up to 2.15 percent from the current 2 percent – for deposits of over 25 BTC. Those holding 0.5–25 BTC will continue to earn 6.2 percent APY, BlockFi said.

Find the Right Loan Among 300+ Lending Partners for Credit Card Consolidation and More (CardRates), Rated: A

In a Nutshell: LoanStart helps consumers in search of a loan find a lender that suits their funding needs within just five minutes after submitting a simple, fee-free loan request form. Working securely with more than 300 trusted lending partners, including conveniently located storefront providers, the service makes finding a suitable lender easy. In today’s connected world where loan options abound, LoanStart cuts through the clutter to connect consumers in need of funds with lenders willing to provide financing.

Maxex Closes Series B Funding (FinSMEs), Rated: A

Maxex, LLC, an Atlanta, GA-based residential mortgage loan exchange, closed a Series B funding round of undisclosed amount.

CFPB Sues Debt-Collection Agency Over Deception Allegations (PYMNTS), Rated: A

The Consumer Financial Protection Bureau (CFPB) said Friday (May 17) that it has filed a lawsuit in federal court against a debt-collection agency that, the agency said, violated the Fair Debt Collection Practices Act.

The lawsuit targets Forster & Garbus, LLP, a debt-collection law firm based in New York.

Plaid gives digital banks and fintech a new tool to bypass traditional finance (CNBC), Rated: A

Start-up Plaid, recently valued at $2.7 billion, already connects bank accounts to fintech apps like Venmo, Robinhood, Coinbase and Acorns. It announced “Plaid Direct” on Wednesday, which lets users more easily connect to newer digital banks like Chime.

Capital Markets Veteran Joins PeerStreet to Manage Institutional Sales (BusinessWire), Rated: A

PeerStreet, a marketplace for investing in real estate backed loans, has announced the appointment of Deepa Salastekar as the Vice President of Institutional Sales. Ms. Salastekar joins PeerStreet to expand the company’s relationship base of institutional partners across all investment types available through PeerStreet.

Dharma now supports peer-to-peer lending in USDC to attract mainstream investors to DeFi (The Block Crypto), Rated: B

Defi startup Dharma announced Wednesday that it will start to support peer-to-peer lending of USDC, in a push to engage mainstream investors.

United Kingdom

Funding Circle investment trust asks shareholders to approve wind-down plans (P2P Finance News), Rated: AAA

FUNDING Circle is set to begin a managed wind-down of its dedicated investment trust, the Funding Circle SME Income Fund (FCIF), once it gets the green light from shareholders.

The FTSE 250-listed peer-to-peer business lender said last month that shareholders had backed plans to stop investing in new assets and begin the process of returning capital to investors.

Funding Circle Sets Hard Limit To Incentive Pay For Senior Executives (Morningstar), Rated: A

Funding Circle Holdings PLC clarified its director pay policy Wednesday following “feedback from shareholder advisory bodies”.

The small and medium enterprise loan platform said the amount granted in each year for a three year period under the company’s long-term incentive plan to can now no longer exceed GBP2.0 million and GBP1.1 million for the company’s chief executive and chief financial officer, respectively.

Span A Higher Than Span B for Funding Circle Sme Income Fund Limited (FCIF.L) (Williams Business Review), Rated: B

After a recent indicator scan, we have noted that Span A is currently higher than Span B for shares of Funding Circle Sme Income Fund Limited (FCIF.L). Traders may be paying close attention as this signal may indicate a possible bullish move.

TransferWise doubles its valuation to $ 3.5bn (Fintech Futures), Rated: AAA

UK-based international payments fintech TransferWise has doubled its value to $3.5 billion after raising $292 million in secondary funding, Jane Connolly writes.

Call for ‘credit curfew’ to help late-night borrowers (The Times), Rated: A

Banning borrowers from accessing high-cost credit websites between 11pm and 7am would ease the numbers of people spiralling into debt as activity peaks during these hours, according to researchers at Newcastle University.

Monzo hits 2m customers, adding 1m in eight months (AltFi), Rated: A

Monzo has hit 2 million current account customers in just two years since getting a banking license, and just eight months after it hit 1 million accounts.

It launched its current accounts less than 18 months ago with customers having spent £10.7bn through Monzo so far.

Arbuthnot Specialist Finance reveals offering (Bridging and Commercial), Rated: A

Arbuthnot Latham & Co has officially launched its specialist finance division.

Arbuthnot Specialist Finance will offer short-term residential finance up to 70% of market value (MV), with rates from 0.65% per month.

For this product, it will offer loans between £30,000–£3m-plus.

For commercial properties, it will offer up to 65% of MV, including interest and fees (up to 85% of the 90-day MV, or 95% of the purchase price, whichever is the lower), with rates available from 0.75%.

New peer-to-peer lender targets 7.5% return with education loans (Your Money), Rated: A

Lendwise plans to offer borrowers loans of up to £100,000, with interest rates ranging from 7.5% to 12%. Pricing will be based on a range of factors, which the peer-to-peer lender said go beyond the applicant’s financial profile and credit record. They include the specific postgraduate or professional qualification course they are taking, the length of study and the repayment period.

Finastra’s open cloud platform drives collaboration and innovation in financial services (Fintech Finance), Rated: A

Today ahead of its FusionONE developer conference, co-hosted with Microsoft, Finastra unveiled the latest developments to its FusionFabric.cloudopen platform for innovation.

The 61 new open APIs (and more than 200 Endpoints) span many of Finastra’s solutions, including retail and corporate banking (both enterprise and North American community markets), consumer lending and mortgage, payments and treasury and capital markets. These are now available in the FusionFabric.cloud API catalog for developers to harness in building financial services applications. Some of these powerful APIs are already enabling:

China

A fintech revenue surge helped Tencent smash quarterly expectations (Business Insider), Rated: AAA

Tencent posted record quarterly profits and smashed market expectations in Q1 2019, driven largely by surges in its fintech and cloud revenue, per Reuters.

Fintech and business services is now Tencent’s second largest division, responsible for a quarter of its revenue. This was the first time the tech giant broke out earnings for the unit, which brought in revenue of Rmb21.79bn ($3.2 billion), a 44% year-over-year (YoY) spike. Key in driving this growth is its payments wallet for WeChat, whose 1.11 billion users make it the largest social media platform in China, as well as its insurance services, which include a 20% stake in Aviva Hong Kong, and its cloud computing service.

Tencent’s online advertising grew 25% YoY, compared with 55% YoY in the same period last year, suggesting that China’s slowing economy and continued trade tensions with the US are hitting the firm.

Source: Business Insider Intelligence

DBS Bank Expects a Boost in Chinese P2P Lending Market from the Greater Bay Area (LearnBonds), Rated: A

Greater Bay Area could be the key to reviving the struggling P2P lending market in China, according to DBS Bank.

The Singaporean bank estimates that P2P lending will experience a 17% annual growth rate by 2030.

European Union

Identity technology and Dublin’s draw for fintech firms post-Brexit (Forbes), Rated: AAA

According to 

1 in 10 European banks to vanish by 2023 (AltFi), Rated: A

Bumper banking profits disguise an underlying weakness in traditional banks, as their per customer income has tumbled over the past decade.

That’s the finding of a report by consultants A.T. Kearney, which found data across 92 European banks revealed income per client had fallen 11% since 2008.

Australia/New Zealand

Commerce Commission’s court case against payday lender Ferratum scheduled for next year (Interest), Rated: AAA

A backlog of cases in the Auckland High Court means the next hearing in the Commerce Commission’s legal action against online payday lender Ferratum New Zealand won’t be held until June next year.

Asia

Indonesian fintech association sanctions lending platform that sets high interest rate (KrAsia), Rated: AAA

Two Indonesian lending platforms regulated under the country’s financial services authority (OJK) have been penalized by the ethics council of AFPI, the industry association for fintech lenders in Indonesia.

The organization revealed that one of the companies in question is P2P lender Do-It, which charged an interest fee rate of 1% per day.

Africa

Onefi is Expanding Carbon’s Digital Banking Services to Ghana (Technext), Rated: AAA

Nigerian digital financial platform, Carbon (formerly Paylater) is taking big steps to introduce its revamped financial services into Ghana. The online lender is looking to hire a new country manager for Ghana and this suggests the company is looking to introduce its new services like PayVest into Ghana.

Authors:

George Popescu
Allen Taylor

The post Thursday May 23 2019, Weekly News Digest appeared first on Lending Times.

Thursday December 20 2018, Daily News Digest

US Yield Curve

News Comments Today’s main news: OnDeck to enter equipment financing. SoFi releases video to destigmatize debt. RateSetter sees 47% revenue growth. Funding Circle fund expects lower returns. 360 Finance financials. Today’s main analysis: U.S. yield curve inverts. Today’s thought-provoking articles: Why did OnDeck file suit in Arlington? Fewer Americans rely on cash. More than half of Americans can’t cover a $1,000 […]

The post Thursday December 20 2018, Daily News Digest appeared first on Lending Times.

US Yield Curve

News Comments

United States

United Kingdom

China/Hong Kong

Southeast Asia

Other

News Summary

United States

OnDeck (ONDK) to Enter Equipment Financing Market (StreetInsider), Rated: AAA

OnDeck announced today that it will begin offering equipment finance loans to select U.S. small businesses next year, bringing its heralded technology and digital lending expertise to what has traditionally been a slow-moving, opaque, and complicated process.

Who’s On Deck? And why are they in Arlington? We explain. (Biz Journals), Rated: AAA

At 2 p.m. on a Friday in mid-October, it’s judgment day for 13 small companies from across the country.

The plaintiff is On Deck Capital Inc., a publicly traded online small business lender based in New York that has sued each of the 13 companies for not repaying loans. Its choice of setting: the Arlington General District Courthouse.

New SoFi Campaign Aims To Destigmatize Debt and Financial Insecurity In Powerful “Money Talks” Video (PR Newswire), Rated: AAA

SoFi today launched a campaign showcasing some of its members’ most intimate stories around their personal struggles with money. Produced in collaboration with director Tatia Pilieva, the filmmaker most notably known for her sensational short film ‘First Kiss,’ the video captures twelve SoFi members, strangers to each other, meeting for the first time to have open-ended, unfiltered conversations about their lives, their money, and their views for their futures.

The video, along with more about the members featured in the video, are now live at 

US Yield Curve Inverts; Spreads Widening on New FinTech Deals (PeerIQ), Rated: AAA

Core CPI rose by 2.2% keeping the Fed on track to raise interest rates next week for the fourth time this year. The market-implied probability of a rate hike next week is ~77%, although the rate hike path in 2019 remains uncertain. The US yield curve saw its first post-crisis flatteningwhich we will look at in greater detail below.

US Yield Curve Inverts for the First Time Post-Crisis

The US yield-curve saw its first inversion post-crisis as the spreads between the yields on 3-year and 5-year Treasuries fell to -1 bps. The spread between the yields on 3-month and 10-year treasuries has been an accurate predictor of past recessions. As the chart below shows, there have been 6 recessions since 1970 after the 3-month – 10-year curve inverted. Currently, the 3-month – 10-year curve is 49 bps away from inversion, but markets are watching every part of the yield curve closely.

Source: Federal Reserve, PeerIQ

Spreads are Widening on New FinTech Deals

LendingClub and CommonBond are out with new securitizations. KBRA has rated the tranches on LendingClub’s latest $272 Mn deal CLUB 2018-P3 A-, BBB, and BB. The $300 Mn collateral pool consists of 17,825 Prime loans with an average balance of $16.8 k, a weighted average coupon of 14.58%, and a weighted average remaining term of 48 months. The weighted average FICO score of the borrowers is 703. The deal has an initial O/C of 9.2% and an excess spread of 9.1%. Both the O/C and excess spread are the lowest for LC’s 2018 prime deals. This deal priced 27-50bps wider than LC’s prior deal in September due to market volatility and widening structured products spreads, according to DebtWire.

More Americans are making no weekly purchases with cash (Pew Research), Rated: AAA

Entegra Bank Chooses Velocity Solutions to Power Its Small Business Digital Lending (deBanked), Rated: A

Velocity Solutions announced today that its Akouba digital lending platform was selected by Entegra Bank to power the bank’s digital lending for its small and medium-sized business customers. Akouba provides community and regional banks with origination and underwriting services.

LoanStreet Signs Up Workers Credit Union to Use Fintech Loan Participation Platform (Crowdfund Insider), Rated: B

LoanStreet, a Fintech “loan participation platform,” has signed up Massachusetts-based Workers Credit Union to its growing network.

Lending Express Appoints Former Maple Founder Ofer Ariel to Chief Product Officer; Promotes Daniel Katz to Chief Operating Officer (PR Newswire), Rated: B

Lending Express, the technology company dedicated to increasing access to funding for small businesses, today announced the promotions of Ofer Ariel and Daniel Katz to Chief Product Officer and Chief Operating Officer, respectively. This announcement follows a period of impressive growth for the company, and is indicative of its commitment to provide best-in-class service to both its customers and partners.

United Kingdom

RateSetter Announces 2017-18 Revenue Growth of 47% (Crowdfund Insider), Rated: AAA

UK based peer-to-peer lender RateSetter announced last week the results of its 2017-2018 financial year, which ended on March 31, 2018. The lending platform reported that revenues were up by 47% (which was £34.3 million) from the previous year (£23.4 million). The company noted that the year-end, there were 44,441 active investors on the platform with loans under management of £700 million.

Funding Circle fund expecting lower returns (AltFi), Rated: AAA

A hit from its European Investment Bank transaction as well as higher UK loss rates have prompted a fall in expected returns for the Funding Circle SME Income fund.

The £332m Funding Circle SME Income Fund saw a fall in its net asset value (NAV) of 1.4 per cent in November as the investment trust’s board said it expected returns for the full year would be lower than previously anticipated owing to a higher expected rate of defaults among certain loan pools.

Orca opens waiting list ahead of 2019 IFISA launch (P2P Finance News), Rated: A

ORCA has opened a waiting list for investors interested in its self-select portfolio and Innovative Finance ISA (IFISA), with plans to launch both products in the first quarter of 2019.

The peer-to-peer lending analysis and investment platform, which first revealed its plans to launch a tax wrapper to Peer2Peer Finance News in October, said the Orca ISA will allow investors to hold multiple P2P loans from different providers in one tax wrapper.

It will offer interest of up to 6.5 per cent.

Transferwise – the power of partnerships (Fintech Futures), Rated: A

Cross-border payments were ripe for disruption and doing more than most to shake up things is peer-to-peer (P2P) specialist, Transferwise. Its number of partnerships with banks is multiplying while, in parallel, it is adding settlement options, most recently for direct access to the euro payment infrastructure through a euro settlement account with the Bank of Lithuania.

At present, with one notable exception, the partner banks that have been announced are challenger or other low-end players. However, it now claims over four million people around the world using its service to transfer over £3 billion each month. In the UK, global head of partnerships, Stuart Gregory, says its share of consumer international transfers is around 15%, putting in on or close to a par with some of the largest UK banks.

P2P property lending platform completes £10m investment round (AltFi), Rated: A

Peer-to-peer property lending platform BLEND Network has completed a £10m late-seed round of investing.

N26 Metal Now Available in the UK (coverageR), Rated: A

N26, the provider of mobile banking services which launched in the UK last month with a free account, is now offering N26 Metal – its first premium membership for UK customers.

For the price of £14.90 per month, Metal members get access to an exclusive partner program, dedicated customer service, and worldwide travel insurance provided by Allianz. In addition, members benefit from free ATM withdrawals in pounds, free payments in any currency, free withdrawals worldwide, and LoungeKey airport access in over 1k destinations.

This ex-Googler wants to help high street banks be more like Monzo (Yahoo! Finance), Rated: A

The head of innovation at one of Britain’s big high street banks told me earlier this year that he has a mantra when approaching a new problem: “What would Monzo do?”

Traditional banks are struggling to keep pace as Monzo pushes the boundaries. The startup sends smartphone push alerts when you spend money, knows when you’re abroad, lets you freeze your debit card if lost, and offers chatbot customer service — all through the app.

Onfido Sees 342 Pct Sales Growth In 2018 (PYMNTS), Rated: A

Onfido, the global identity verification company, announced Tuesday (Dec. 18) that it achieved 342 percent sales growth in 2018 compared with 2017 and that it has a four-year growth rate of 3,857 percent.

Starling Bank’s Megan Caywood jumps to Barclays’ ship (Fintech Futures), Rated: B

Megan Caywood, Starling Bank’s chief platform officer, is joining Barclays, as she handed in her notice a couple of weeks ago, according to TechCrunch.

China/Hong Kong

How a Chinese anti-virus software maker builds a fintech firm to wrestle with giants (TechCrunch), Rated: AAA

360 Finance,  an online consumer loan platform that spun off from China’s anti-virus service giant 360 Group, has joined a raft of Chinese fintech companies to go public in the U.S. over the last two years.

The company priced its initial public offering at $16.50 per share last Friday, raising $51 million by selling 3.1 million American depositary shares.

Source: TechCrunch

You’ve applied for a Virtual Bank license, what’s next? (Hubbis), Rated: AAA

Hong Kong is preparing for the arrival of virtual banks (VB) — pure digital players that offer banking services solely through digital channels without bricks-and-mortar branches. In an exclusive article from Synpulse we discover the challenges associated with virtual banking.

What is your differentiating proposition?

With HKMA’s recent announcement of receiving 29 applications for VB, competition is expected to be intense.

Focus on Customer Needs

Basic banking services are about fulfilling three main needs of the customer:

  • How do I pay or get paid?
  • How can I borrow?
  • How do I grow or protect my savings?

Capitalize on strong partnerships

FinTechs have traditionally excelled in one particular area (e.g.p2p lending, remittance and FX conversion).

Avoid a Pure Discount Model

VBs can leverage their lower operating costs to provide lower fees, higher deposit rates or other price incentives to attract customers. However, without a clear differentiating proposition, a pure low-cost play will not be sustainable.

Jiayin, a Top Player in P2P Lending Business, Files for $ 57.5 Million IPO on Nasdaq (Capital Watch), Rated: A

A leading individual financial marketplace, Jiayin Group Inc., is seeking to raise up to $57.5 million in an initial public offering on the Nasdaq Global Select Market in New York.

ByteDance registers fintech trademarks (Technode), Rated: A

In July, Jinri Toutiao launched a fintech product named Safe Lending. Up to 20,000 users were permitted to borrow up to RMB 200,000 (around $30,000) per person per day. The company claimed the Bank of Nanjing was one of its loan partners.

The product became the subject of investigations by the media in September. ByteDance later shuttered the online money lending service, while thousands of Chinese P2P lending companies shut down in the second half of the year.

PINTEC Partners with China National Investment & Guaranty Corporation to Develop Digital Lending Technologies (Markets Insider), Rated: B

Pintec Technology Holdings Ltd. (“PINTEC”) (NASDAQ: PT) today signed a strategic cooperation agreement with China National Investment & Guaranty Corporation (“I&G”), a leading enterprise in China’s guarantee industry. The two sides will jointly develop the next generation digital lending technologies and nurture a dynamic credit financing ecosystem for small and micro-sized enterprises in China.

European Union

Online Lender Creditshelf Partners with CrossLend to Offer First Digital Securitization of Loans (Crowdfund Insider), Rated: AAA

Germany based Fintech creditshelf Aktiengesellschaft, an SME financing platform, is launching a new partnership with CrossLend to offer the first digital securitization of SME loans in Germany.

A Visit to Crowdestor in Riga (P2P Banking), Rated: A

On invitation of Crowdestor I travelled to Riga and met the founders of Crowdestor Janis Timma and Gunars Udris. Crowdestor is a Latvian p2p lending platform for SME loans. They launched a year ago. Loans are typically for terms of up to 18 months and interest rates are quite high – the current loan offer by a transportation company seeking expansion capital carries 17% interest rate. The Crowdestor website is available in English, German and Portuguese language. Currently most investors on the platform are Germans, followed by Spanish investors.

Funding Options: From Fintech Petting Zoos To SME Lending Sanctuaries (Forbes), Rated: A

Both financial institutions and fintech startups have made serving SMEs a priority in 2018. However, despite business current accounts like Mettle being created this year, online comparison marketplace Funding Options has helped millions of firms across Europe, especially those that cannot get traditional bank lending because they are early-stage, high-growth or in difficulty, since its launch in 2012.

International

Finastra announces Eric Duffaut as President and Global Head of Field Operations (RealWire), Rated: A

Finastra has appointed Eric Duffaut as President and Global Head of Field Operations. Based at Finastra’s London Headquarters, Duffaut will take responsibility for the company’s entire go-to-market organization including global sales, services and consultancy, as well as overseeing the Finastra partner ecosystem.

Strengthening the Spread: ETHOS Now Live on Nitrogen Network (CoinTelegraph), Rated: A

Token of Ethos.io, a leading cryptocurrency wallet provider and Blockchain Financial Services (BFS) platform, has been officially listed on Nitrogen Network, a new decentralized peer-to-peer crypto lending network.

Nitrogen Network enables market participants to lend and borrow cryptocurrencies on their own terms, all while maintaining control of their holdings and private keys. This supports effective portfolio management and a diverse range of investment views across a wide variety of crypto assets.

Australia

As banks become stricter with lending, could your HELP debt get in the way of getting a home loan? (ABC.net.au), Rated: AAA

As banks rein in lending in the wake of the banking royal commission which revealed “irresponsible lending is endemic in Australia”, those who might have easily secured a home loan a few years ago now face much more stringent criteria.

Banks are looking more carefully at expenses and debts which, for 2.7 million Australians, will include a HELP (formerly HECS) debt.

India

NBFC Vivriti Capital secures Rs 200 Cr from Creation Investments in Series-A equity funding (Your Story), Rated: AAA

Vivriti Capital, a Chennai-based lending platform for corporate entities, has raised Series A equity funding of Rs 200 crores from Creation Investments, an investment management company focused on financial services.

Crowdfunding – A Brief Overview Of The Regulatory Framework (Mondaq), Rated: A

3. Peer-to-Peer Lending or Debt Crowdfunding: Peer-to-Peer Lending (P2P lending) is a form of crowdfunding used to raise loans which are re-paid along with interest. It can be defined as the use of an online platform that matches lenders with borrowers in order to provide unsecured loans. The borrower can either be an individual or a legal person requiring a loan. The interest rate may be set by the platform or by mutual agreement between the borrower and the lender. Fees are paid to the platform by both the lender as well as the borrower.2

4. Equity Crowdfunding:

The SEBI Consultation Paper furnishes proposals for a regulatory framework governing procedure of Security based Crowdfunding methods for Start-ups and Small and Medium Enterprises (SMEs).

The Directions define a “Non-banking financial company – Peer to Peer Lending Platform”4(NBFC-P2P) as a non-banking institution which carries on the business of a Peer-to-Peer Lending Platform. Peer-to- Peer Lending Platform5 has been defined as an intermediary providing the services of loan facilitation via online medium or otherwise, to the participants6(a person who has entered into an arrangement with an NBFC-P2P to lend on it or to avail of loan facilitation services provided by it). Non-banking institutions other than companies have been prohibited from undertaking the business of Peer-to-Peer Lending platform.7 The Directions provide the scope of activities, prudential norms (the aggregate loans taken by a borrower at any point of time, across all P2Ps, is subject to a cap of Rs.10,00,000/-), operational guidelines, inter alia other regulations.

Southeast Asia

Why the ASEAN P2P lending market will avoid the Chinese pitfalls (ASEAN Today), Rated: AAA

To say that 2018 was a rough year for peer-to-peer (P2P) lending businesses in China would be a gross understatement. It was nothing short of a bloodbath, mirroring in many ways the US sub-prime mortgage crisis of 2008-09.

China, despite its economic power, shares the following crucial features with smaller markets in South and Southeast Asia:

  • A large percentage of small-to-medium enterprises (SMEs) and individuals without access to traditional banking services
  • High mobile penetration among the population
  • Easy access to investor funds, both domestic as well as international

The Southeast Asian approach to P2P lending regulation is more proactive than the Chinese model

In the heydays of P2P platforms in China, the authorities pursued more of a “wait and watch” approach. In marked contrast, the regulatory bodies of Southeast Asian economies have adopted more pro-active steps to regulation.

Korea’s digital banks have two speeds: fast and faster (Asia Money), Rated: A

The average internet speed in South Korea is 26.7 megabits per second, faster than anywhere else in the world, according to French virtual private network developer Le VPN.

No Korean bank has ever been in the mix for this much-coveted prize. Nor did a single Korean firm appear in the latest Forbes rankings of the world’s 50 most innovative fintech companies. Indeed, it’s hard to identify a single well-known and home-grown fintech brand. There’s no Korean answer to, say, China’s Ant Financial, or Singapore-based ride-sharing-to-food-delivery service Grab.

OJK Pledges to Announce Names of Illegal Fintech Firm (Tempo), Rated: A

The Financial Services Authority (OJK) committed to monitoring legal and registered financial technology (fintech) companies of peer-to-peer lending or online loan as an effort to maintain the security for consumers.

Eurasia

Russia Is A Top Five Leader Of Digital Banking In Europe (Forbes), Rated: AAA

Because of the lack of legacy IT infrastructure within banks in Russia, the country has been listed in the top five leaders of digital banking in Europe, according to a new Deloitte and ID Finance report.

Latin America

Vitacon innovates again and launches an investment opportunity starting at USD250 with return of up to 12,8% per year (PR Newswire), Rated: AAA

Vitacon, a leading construction company that is revolutionizing the way people live in São Paulo, is launching one more investment opportunity for people seeking new options for earning income and diversifying their portfolios. The company, which for the past nine years has been incentivizing the shared economy in its residential developments, is launching the possibility for any investor to invest directly USD250 in a CD, a fixed income security issued by Banco Topázio, with a 24-month maturity, which allows for annual yields of up to 12.8%.

This new method, P2P Lending, is similar to one introduced in 2015, when Vitacon launched the first real estate crowdfunding, which surpassed expectations and created an international benchmark in the field, raising 28% above what was expected for the construction of the VN Cardoso de Melo building in a very prime location of São Paulo, scheduled for delivery next year.

Authors:

George Popescu
Allen Taylor

The post Thursday December 20 2018, Daily News Digest appeared first on Lending Times.

Thursday November 29 2018, Daily News Digest

GlobalData

News Comments Today’s main news: MPOWER Financing raises $110M. Funding Circle, BBB partner on SME lending. Zopa sells batch of defaulted loans. Yirendai misses earnings estimates by .17 EPS. RateSetter aiming to be Australia’s biggest consumer loans provider. Revolut greenlighted to expand into Singapore, Japan. Today’s main analysis: Is UK headed for credit card crisis? Today’s thought-provoking articles: 37.4% of purchase […]

GlobalData

News Comments

United States

United Kingdom

Southeast Asia

Other

News Summary

United States

MPOWER Financing raises USD110 million in latest funding round (Private Equity Wire) Rated: AAA

MPOWER Financing, a fintech company providing educational loans to high-potential international and DACA students, has completed its largest funding round to-date with USD110 million in new financing for students enrolling in major US universities.

This latest round, led by Gray Matters Capital and Community Investment Management (CIM), will be used to support new product growth and technology enhancements as well as to finance MPOWER Financing’s expanding student loan portfolio.

“We co-created a unique type of debt with Community Investment Management’s leadership team. This USD100 million is just the beginning of MPOWER’s Capital Markets roadmap,” says Mike Davis, MPOWER Financing Chief Investment Officer and co-founder.

37.4% of Purchase Borrowers Received  Mortgage Rates Under 5% Last Week (LendingTree), Rated: AAA

  • For 30-year fixed-rate mortgages, 37.4% of purchase borrowers received offers under 5%, up from 29.4% the prior week. A year ago, 98.1% of purchase offers were under 5%.
  • Across all 30-year fixed-rate mortgage purchase applications on LendingTree, the most common interest rate was 4.875%, offered to 21.3% of borrowers.
  • 27.9% of 30-year fixed-rate mortgage refinance borrowers received offers under 5%, up from 20.1% the prior week. A year ago, 98.1% of refinance offers were under 5%.
  • Across all 30-year fixed-rate mortgage refinance applications, the most common interest rate was 5.00%, offered to 22.3% of borrowers.


5 Technologies And Trends Changing The Credit Industry (ValueWalk), Rated: AAA

New tools and advancements in the credit industry are transforming the way consumers borrow cash. Before, loan options were limited to government entities (Pag-IBIG and SSS), banks, credit cards, cash advance from credit cards, and loan sharks. These financial institutions (apart from loan sharks) are heavily regulated, but with a roster of new methods offered today, loaning has become more accessible and borrower-friendly.

The Future of Fintech Video Series: Intuit Consumer Group (ATM Marketplace), Rated: A

Intuit Consumer Group’s Varun Krishna gives some background on the company’s latest partnerships with Lending club and Wealthfront. This interview is part of a video series, “The Future of Fintech,” produced by Mobile Payments Today and powered by Galileo Processing.

MPL Loan Performance Monitor (as of August 2018) (PeerIQ), Rated: A

Highlights from the August 2018 MPL Loan Performance Monitor :

  • Our MPL Loan Performance Monitor tracks the delinquency rates, cumulative losses, cumulative prepays and transition matrices using public marketplace lending data that comprises unsecured consumer loans originated by Marketplace Lenders.
  • Delinquencies on the 2017 vintage in the first 18 months are lower than those on the 2015 and 2016 vintages with lenders having tightened underwriting standards.
  • Cumulative loss rates on the 2017 vintage are lower than those on the 2015 and 2016 vintages. Cumulative losses on the 2015-2017 vintages are outpacing those on earlier vintages.
  • Cumulative prepayments have picked up, with the 2017 vintage paying significantly faster than all prior vintages.

Lendio Recognized as a Great Place to Work for Third Consecutive Year (Lendio), Rated: A

Lendio was certified for the third consecutive year as a great workplace by the independent analysts at Great Place to Work. Lendio earned this credential based on extensive ratings provided by its employees in anonymous surveys. A summary of these ratings can be found at 

Four Major Fintech Trends In The Self-Directed IRA Industry (Forbes), Rated: A

Fintech has helped significantly increase the number of investment options available to self-directed IRA investments. From online crowdfunding platforms to peer-to-peer lending portals, as well as cryptocurrency and digital asset exchanges, new financial technology has helped self-directed IRA investors gain access to new and exciting investment opportunities in an efficient and secure investment environment.

There has never been a better time to find a bad credit mortgage (Mortgage Introducer), Rated: A

Research conducted by the Online Mortgage Adviser website has discovered that up to 70% of potential mortgage applicants fail to approach lenders or other service providers because they mistakenly believe that their personal circumstances or financial histories will preclude them from being considered.

The study, which was based upon a survey of over 2,000 people nationwide, found that almost 50% of respondents believed that a low credit score, or evidence of previous issues, would automatically disqualify their application. 33% and 15% (respectively) felt that a zero-hour contract or payday loan would prevent them from achieving a mortgage loan.

stREITwise Launches Invest for a Cause (GlobeNewswire), Rated: A

stREITwise, an investment vehicle that makes commercial real estate investments accessible to everyone, is announcing the second annual Invest for a Cause holiday campaign. Through December 31st, their executive team will personally make a donation equal to 2% of any new investment to a non-profit of the investor’s choice.

2018’s Top Takeaways (Commercial Property Executive), Rated: A

But perhaps the biggest catchphrase of 2018 represents the rapidly evolving technologies that are benefiting—and some even say revolutionizing—the commercial real estate industry. So-called “proptech” includes a range of building performance solutions, along with financial benefits like the developing blockchain process protections and growth of the still fledging real estate crowdfunding business. (Our most recent discussions include our Mission: Success profile of MetaProp’s founders and the CFO Corner column “3 Ways to Leverage Fintech.”)

Small Banks Join Forces To Bring Fintech To Customers (Forbes), Rated: A

The move is driven in part by a desire to innovate and part survival. It comes as millennials are bypassing branches and traditional banking services for the fintech offerings at an increasing rate. Take Quicken Loans, the Detroit-based lender that operates Rocket Mortgage it’s completely digital platform, for one glaring example.

Stocks Hold Onto Gains Ahead of Powell Speech (Nasdaq) Rated: A

Counterstrike: The market looks like it might rise into the G-20 meeting that begins on Friday, so Jeremy thought this was a good time to pick up a couple names. Firstly, the editor added a 6% allocation in online marketplace Lending Tree (TREE), which has been halved from its 2018 highs. But it could be poised for a sharp move higher as a strong quarterly report has exposed its oversold position.

Online Lender Settles With FTC Over Refinancing Misrepresentations (Manatt), Rated: A

Issuing a warning to other lenders, the Federal Trade Commission (FTC) reached a deal with an online lender over charges the company violated the FTC Act by making false statements about student loan refinancing.

Velocity Commercial Capital Chooses SS&C for its Finance Transformation (SS&C), Rated: A

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that Velocity Commercial Capital, LLC (‘Velocity’) has signed a multi-year agreement with SS&C Primatics’ EVOLV platform. EVOLV will help Velocity transform their financial operations and capitalize on growth opportunities in a controlled environment. Velocity, a direct portfolio lender, provides investment property loans for residential 1-4, multi-family, mixed-use and small balance commercial properties.

Guaranteed Rate Expands Its Footprint in Hawaii (GlobeNewswire), Rated: B

Guaranteed Rate, Inc. (“Guaranteed Rate”), one of the largest independent retail mortgage companies in the United States, today announced that it will acquire certain assets of Honolulu HomeLoans (HHL) and Hawaii Lending Alliance (HLA), growing its existing Guaranteed Rate presence in the Hawaii market and adding an experienced team of mortgage professionals.

BFS Capital Appoints Mark Ruddock as Chief Executive Officer (Citizen Tribune), Rated: B

BFS Capital announced today the appointment of Mark Ruddock as Chief Executive Officer, effective immediately. He will also join the company’s Board of Directors.

United Kingdom

Funding Circle and BBB announce £150m SME lending partnership (Bridging & Commercial), Rated: AAA

The British Business Bank (BBB) has committed to lend up to £150m to UK small businesses through Funding Circle.

The transaction has been made under the bank’s ENABLE Funding programme and is expected to support the growth of over 2,000 UK companies.

The new facility will provide senior financing to a transaction with the Funding Circle SME Income Fund Limited, the publicly traded fund that lends exclusively through Funding Circle.

Zopa sells batch of defaulted loans to boost investor returns (P2P Finance News), Rated: AAA

ZOPA has sold a batch of defaulted loans to a debt collection agency, which it says will enable a faster and higher recovery for investors.

The peer-to-peer consumer lender informed its investors last week about the debt sale. It said that it has received upfront payment for the loans in question and will pass on the proceeds to investors within the next couple of weeks.

The UK could be headed for a credit card crisis (GlobalData Email), Rated: AAA

Almost three quarters of retail consumers in the UK (those with liquid assets between £0 and £3,918) do not pay off their credit card balances in full each month, says 

Britain’s creative industries break the £100 billion barrier (Gov.UK), Rated: A

The UK’s roaring creative industries made a record contribution to the economy in 2017, smashing through the £100 billion mark.

Its value of the creative industries to the UK is up from £94.8 billion in 2016 to £101.5 billion, and has grown at nearly twice the rate of the economy since 2010, according to figures published today by the Department for Digital, Media, Culture and Sport (DCMS).

It continues to perform highly and over the last two months British tech firms Monzo, Farfetch and Funding Circle have surpassed the $1 billion mark, meaning they are now so-called ‘unicorns’.

China

Yirendai (YRD) Posts Quarterly Earnings Results, Misses Estimates By $ 0.17 EPS (Fairfield Current), Rated: AAA

Yirendai (NYSE:YRD) announced its earnings results on Monday, November 12th. The technology company reported $0.35 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.52 by ($0.17), Briefing.com reports. The company had revenue of $163.20 million for the quarter, compared to the consensus estimate of $179.48 million. Yirendai had a return on equity of 40.40% and a net margin of 18.56%. The company’s revenue was down 28.3% compared to the same quarter last year. During the same period last year, the firm posted $0.74 EPS.

Source: Fairfield Current

Senmiao Technology (AIHS) Acquires 60% Equity Interest in Chinese Automobile Financial Leasing (StreetInsider), Rated: AAA

Senmiao Technology Limited (NASDAQ: AIHS), an online lending platform in China connecting investors with individual and small-to-medium-sized enterprise borrowers and creditors, today announced that it entered into an Investment and Equity Transfer Agreement (the “Agreement”) to acquire a 60% equity interest in Hunan Ruixi Financial Leasing Co., Ltd. (“Ruixi”), a Chinese licensed financial leasing company focusing on the auto industry with registered capital of $10 million. In exchange for the 60% equity interest in Ruixi from its three existing shareholders, Senmiao has agreed to contribute $6 million in registered capital to Ruixi. The acquisition closed on November 22, 2018.

Beyond The Sugar Rush: Strategic Stimulus For Chinese Stocks (Seeking Alpha), Rated: A

Private companies and even individuals have taken full advantage of loose credit conditions. Rising corporate bond defaults and nonperforming loans, as well as the recent collapse of hundreds of peer-to-peer lending platforms, suggest that at least in some cases, the money came too easily. Concerned global equities investors are already applying a substantial discount to Chinese stocks because of debt issues.

European Union

‘Inconsistent and punitive’ employee ownership rules are damaging Europe’s start-ups, say tech bosses (Telegraph), Rated: AAA

A group of thirty European tech start-ups have warned that the European Union’s “inconsistent and often punitive rules” employee ownership rules are hindering their businesses.

The entrepreneurs, which include the founders and chief executives of iZettleTransferWise and Delivery Hero, stated that laws across the continent make it costly for employers to give out stock options to employees.

The warning to EU policymakers, in an open letter, comes as research by venture capitalists Index Ventures finds that employees own only 10 per cent of late-stage start-ups in Europe, because of limitations brought about by regulations.  However in the US it is 20 per cent.

Online Lender October Officially Launches in the Netherlands (Crowdfund Insider), Rated: A

Online lender October (formerly Lendix) has launched in the Netherlands. Alongside this expansion, the Paris based October is providing SME financing in France, Spain, and Italy.

According to a note from October, SMEs may apply for loans ranging from €30,000 and up to €3.5 million.

Solactive Launches New Sharing Economy Index (Mondo Visione), Rated: B

Solactive is pleased to announce the launch of the Solactive Sharing Economy Index. It tracks companies active in the Sharing Economy, and other modern economies such as on-demand and subscription.

Formerly being attributed to open-source communities, the umbrella term “Sharing Economy“, nowadays reflects various economic activities such as peer-to-peer sharing of goods and services.

International

Zero Fees and Interest-free Loans in Decentralized Credit Networks (NewsBTC), Rated: AAA

Money lending is the core principle of any functioning economy. Decentralized credit networks which have recently seen a rapid increase in popularity promise easy and global access to credit and loans for businesses and the public by immediately connecting borrowers and lenders on the platform. Users of IOU credit networks can even take advantage of interest-free loans and zero fees.

Australia

RateSetter putting pieces in place to be Australia’s biggest consumer loans provider (Finder), Rated: AAA

When RateSetter started operations in Australia four years ago, the peer-to-peer (P2P) lending industry was in its infancy and its risk-based, investor-funded loan was seen as an alternative. But a lot can happen in four years. Today, major banks such as CommBank, HSBC and Citi use risk-based pricing, once only the domain of P2P lenders, while the formerly “alternative” RateSetter funded over $25 million in consumer loans this month.

Foggo said the lender has been “determined” to focus on specific products. One of its new ones is a renewable energy loan which it launched two and a half years ago.

India

Suspension of Aadhaar verification to hit lending of small fintech players (The Hindu Business Line), Rated: AAA

Fintech players, especially online lenders in the personal and consumer loans segment, are likely to face slowdown in business following the Supreme Court order that prevents private companies from seeking Aadhaar data for e-KYC and e-signatures.

Asia

Fintech firm Revolut gets green light to expand to Japan and Singapore (CNBC), Rated: AAA

British mobile bank Revolut has obtained licenses to operate in Japan and Singapore as it readies an expansion into Asia.

The London-based financial technology firm said Thursday that it had acquired a remittance license from the Monetary Authority of Singapore and full authorization from Japan’s Financial Services Agency.

It said Thursday that it intends to launch its platform in the Asia-Pacific (APAC) region in the first quarter of 2019, and is looking to select Singapore to host its APAC headquarters.

Online lending platform Oriente announces 5m initial funding for Southeast Asia (kr-Asia), Rated: A

Hong Kong-based online lender Oriente today announced a US$105 million initial round of financing to scale its business across Southeast Asia. The fintech startup already runs lending platforms in the Philippines and Indonesia and will launch in Vietnam soon.

Tapping into digital economy (The Jakarta Post), Rated: A

According to the latest survey by Google and Singapore’s Temasek Holdings, Indonesia’s digital economy is projected to triple to US$100 billion by 2025 from $27 billion this year, given the mushrooming of the country’s online marketplaces. The projection is not an exaggeration as indicated by the huge transaction values at a recent online shopping festival, dubbed a warm-up for the National Online Shopping Day in mid-December.

P2P lending transactions total Rp 13.8 trillion in first three quarters (The Jakarta Post), Rated: A

According to Financial Services Authority (OJK) data, transactions through peer to peer (P2P) lending totaled Rp 13.8 trillion (US$951 million) in the first three quarters of 2018, with the non-performing loan (NPL) rate recorded at 1.2 percent.

P2P lending transactions in 2018 have increased drastically compared to the last two years, with the OJK recording Rp 284 billion in transactions in December 2016 and Rp 2.56 trillion in December 2017.

Who’s afraid of peer-to-peer lending? (Bangkok Post), Rated: A

The recent announcement by the Bank of Thailand on peer-to-peer (P2P) lending rules represents a significant paradigm shift. If all goes to plan, by early next year Thailand will be among the few Asian countries, most notably China and Indonesia, to legalise this match-making platform between lenders and borrowers.

Bukalapak eyes investment products, P2P lending to cash in on fintech opportunity (Deal Street Asia), Rated: B

Indonesia’s online marketplace unicorn Bukalapak is planning to cast a wider net in the country’s booming fintech market. The company is looking at launching new investment products and enter new verticles such as P2P lending and remittances, co-founder and president Muhamad Fajrin Rasyid told this portal.

Authors:

George Popescu
Allen Taylor

Tuesday September 11 2018, Daily News Digest

AEP

News Comments Today’s main news: Betterment adds financial advice packages. Funding Circle the fastest growing P2P lender in UK. TransferWise revenue almost doubles. China’s P2P lending problems hit consumer spending. Lending Club CEO says U.S., China need clearer P2P lending regulations. Today’s main analysis: Funding Circle’s IPO, and aggregate excess payment. Today’s thought-provoking articles: How China tech companies are […]

AEP

News Comments

United States

United Kingdom

China/Hong Kong

International

Other

News Summary

United States

Betterment Introduces Financial Advice Packages (Markets Insider), Rated: AAA

Betterment, the largest, independent online financial advisor, today announced it will be piloting a new line up of financial advice packages, expanding its access to personalized advice from licensed financial experts. This new service furthers Betterment’s commitment to making advice more accessible and personalized.

Varo Money Bank Charter; Funding Circle IPO (PeerIQ), Rated: AAA

Early this week, Funding Circle announced plans to raise £300Mn on the London Stock Exchange through an IPO, valuing the company at up to £1.65 billion. To date, Funding Circle has originated over £5 billion in loans across Europe and the United States. Funding Circle has grown revenue by a 54% CAGR to £63 Mn in the first half of 2018. Funding Circle charges 100bps for servicing and estimates it receives revenue equal to almost 5% of loan value originated.

Source: TransUnion, PeerIQ

Chinese tech giants are dominating North America in VC funding (Markets Insider), Rated: AAA

Chinese companies have outpaced their North American rivals in funding startups for the first time — even as the country’s economy shows signs of slowing down.

In the second quarter, China-based companies recorded $30.9 billion of venture-capital investment, higher than North America’s $27.2 billion, according to data from Goldman Sachs.

What I Learned at LendIt Fintech China 2018 (Lend Academy), Rated: A

Hu Liming from Tencent Financial Cloud talked about the importance of the AI offerings within their cloud computing platform. AI is powering their anti-fraud offerings, their lending process, their collections and customer service efforts. More than 20 of the largest banks and insurance companies in China are using Tencent Financial Cloud for their core services.

Ken Lin of Credit Karma (Lend Academy), Rated: A

In this podcast you will learn:

  • How the work Ken was doing at Prosper led to the founding of Credit Karma.
  • When Ken realized that Credit Karma was going to be a sizable business.
  • The key drivers of adoption early on in their business.
  • How Credit Karma’s business has evolved over time.
  • The different verticals they are in today.
  • How Credit Karma makes money.
  • What it means when Credit Karma says a consumer is pre-qualified for a loan.
  • How exactly they are integrated with the platforms when it comes to credit approvals.
  • How platforms can reduce their customer acquisition cost when they’re working with Credit Karma.
  • What autonomous finance means and why it is critical to the future of personal finance.
  • Why finance is not autonomous today.
  • The story behind their recent acquisition of the mortgage platform Approved.
  • The total number of consumers who have a Credit Karma account today.
  • How Ken thinks about geographic expansion at Credit Karma.
  • Where they are at with IPO plans.
  • What Ken is working on today that he is most excited about.

Places Where Millennials Carry the Most Debt (Markets Insider), Rated: AAA

LendingTree, the nation’s leading online loan marketplace, today released its study on the places where millennials carry the most debt. The study found that student loans make up the biggest share of millennial debt, but auto loans are close behind. The study revealed that the typical urban millennial carries significant debt; the average debt balance for millennials living in the 50 biggest U.S. cities is $23,064.

  • Millennials in San AntonioPittsburgh, and Austin, Texas, shoulder the largest debt burdens of the 50 biggest metros, with median non-mortgage debts of $27,122$26,403 and $26,164, respectively.
  • Three California cities — San JoseSacramento and Los Angeles — have the lowest median balances on the list at $18,376$18,691 and $19,299, respectively.

In the top 10 cities, more than half of millennials have outstanding debts totaling $25,000 or more (not including mortgages), and roughly 1 in 4 millennials living in these cities owes more than $50,000.

The 10 Places Where Millennials Carry the Most Debt

(Excluding Mortgages)

Rank

Metro

Median
Balance

1

San Antonio

$27,122

2

Pittsburgh

$26,403

3

Austin, Texas

$26,164

4

Houston

$25,978

5

Jacksonville, Fla.

$25,947

6

Dallas

$25,939

7

Washington

$25,810

8

Virginia Beach, Va.

$25,591

9

Oklahoma City

$25,351

10

Columbus, Ohio

$25,129

Sacramento homebuyers are among the most financially stretched in the nation, study shows (Sacramento Bee), Rated: B

Area buyers took out mortgages in 2017 that were on average 3.2 times larger than their annual income, according to a study by Lending Tree, an online loan marketplace. The national average is 2.56.

That ranks Sacramento 10th nationally among the country’s 50 largest metro areas.

Six California cities are in the national top 10, a sign that Golden State residents are stretching more to buy a home than those living elsewhere.

LendingTree is the secret success story of fintech (TechCrunch), Rated: A

For all of the excitement centered around fintech over the past half-decade, most venture-backed fintech companies struggle to acclimate to public markets. LendingClub and OnDeck have plummeted since their late 2014 IPOs after several years of darling status in the private markets. GreenSky, which went public in May of this year, has been unable to return to its IPO price. Square is the exception to the rule.

Sometimes we overlook the companies that hail from the era that precedes the current wave of fintech fascination, a vertical which has accumulated over $100 billion in global investment capital since 2010.

PeerStreet Expands Real Estate Investing Options with Shorter-Term Notes (Business Wire), Rated: A

PeerStreet, an award-winning platform for investing in real estate backed loans, today announced the addition of a new investment option, Cash Offer Loans. Cash Offer Loans are a new investment option that provides PeerStreet investors with a shorter duration than typical bridge loans.

Baltimore financial technology start-up gets $ 33 million investment (The Baltimore Sun), Rated: A

Facet Wealth, a Baltimore-based financial services startup, has attracted a $33 million investment led by a New York-based venture capital firm.

Finitive Facilitates $ 50 Million Warehouse Line Of Credit For Bungalow (PR Newswire), Rated: B

Finitive (www.finitive.com), a financial technology platform providing institutional investors with direct access to alternative lending investments, announced today the closing of a $50 million senior secured warehouse credit facility for Bungalow (bungalow.com). This transaction was the first of its kind in the co-living sector.

4 Interesting Investment Strategies With Good Yields (Influencive), Rated: A

4. Peer-to-Peer Lending

Lending clubs have revolutionized how small businesses get money and act as a third party between individuals who want to lend money and people who need it. You can think of it as a peer-to-peer lending system that’s normally backed up and insured. You could get around 7% with one of these investments.

United Kingdom

Funding Circle remains fastest growing P2P firm (P2P Finance News), Rated: AAAA

FUNDING Circle has retained its place as the fastest growing peer-to-peer lending firm in the latest Sunday Times Hiscox Tech Track 100.

Fellow ‘big three’ P2P platform Zopa also featured in the list, which was published on Sunday. However, the smallest member of the ‘big three’, RateSetter, has dropped out of the annual league table.

Funding Circle confirms more details of IPO (P2p Finance News), Rated: A

FUNDING Circle has unveiled more details of its plan to raise £300m through a listing on the London Stock Exchange’s main market in October.

The peer-to-peer lending platform said retail investors will be able to apply for shares via intermediaries such as Hargreaves Lansdown, AJ Bell Youinvest and The Share Centre, with a minimum application size of £1,000.

Funding Circle plans October listing in British ‘fintech’ first (Channel News Asia), Rated: B

Funding Circle will test investor demand for British peer-to-peer lenders in a listing scheduled for October and expected to value it at more than 1.5 billion pounds (US$1.94 billion).

Capitalising on high-street banks’ retreat from lending to that sector since the financial crisis, it has facilitated more than 5 billion pounds in loans to more than 50,000 companies across Britain, the United States, Germany and the Netherlands.

Fintech start-up TransferWise reports second year of profit, revenue almost doubles (CNBC), Rated: AAA

TransferWise, one of Europe’s largest financial technology (fintech) start-ups, said Monday it was profitable for the second year in a row.

The London-headquartered money transfer firm reported an annual post-tax net profit of £6.2 million ($8 million) for the fiscal year ending March 2018.

Annual revenue nearly doubled to £117 million during the period, from £66 million the previous year, TransferWise said. Operating profit came in at £9.5 million following a loss of £519,000 last year.

101 Fintech Disrupters (BusinessCloud), Rated: AAA

See the full list.

The unique side of Crypto Lending and why it could be the option to reduce risk (London Loves Business), Rated: AAA

Crypto lending or digital asset backed loan is comparatively a new concept used in earning profits without much effort. It revolves around the concept of shorting. Perhaps, you do not understand how shorting works, do not worry because all you need to know is that you are lending fund to others who are making short trades. In exchange for the funds, you get an interest rate that goes from 5% to 50% each year.

OakNorth just landed a $ 2.3 billion valuation (Business Insider), Rated: A

ACORN OakNorth, a UK-based alt lender focused on small- and medium-sized businesses (SMBs) and property financing, has secured a £78 million ($100 million) funding round from the EDBI of Singapore, NIBC Bank, Clermont Group, and Coltrane Asset Management. OakNorth’s loans have helped create 8,500 homes in the UK and 8,000 jobs.

Wonga payday loans collapse shows extent of UK poverty (World Socialist Web Site), Rated: A

The UK payday loan industry grew rapidly from 2008-2012, coinciding with the global financial crash and the pauperisation of millions of people in the UK. The numbers of loans issued in this period were 10.2 million per year, with a value of £2.8 billion.

Wonga’s posted pre-tax profit losses in 2016 of nearly £65 million, after recording huge profits just a few years before.

In its 2014 review of the payday loans industry, the FCA found that the average income of a payday lender was £16,500 a year, far below the UK’s median wage of £26,500 at that time.

The CMA found most recipients (52 percent) of payday loans have experienced financial problems in the recent past, with 38 percent of all customers having a bad core/credit rating and 10 percent of customers having had a bailiff or debt collector visit to their home. Over half (53 percent) use payday loans to pay for living expenses, food, utility bills—with 7 percent having to use these loans to pay for general shopping such as clothes and household items.

Crowd2Fund publishes loanbook and performance data (P2P Finance News), Rated: A

CROWD2FUND is publishing its loanbook for the first time and has analysed the data to forecast investor returns more accurately.

Detailed information on loans, including late repayments and defaults, will now be available to read online, as well as rates offered to borrowers and investors’ returns.

The House Crowd launches development finance offering (Development Finance Today), Rated: A

Borrowers can apply for funding ranging from £500,000-£5m over a maximum loan term of 24 months, with interest rates starting from 8% per annum and both arrangement and exit fees at 2%.

China/Hong Kong

Implosion of China’s P2P Lending Boom Hits Consumer Spending (Wolf Street), Rated: AAA

The Chinese government legalized peer-to-peer lending platforms in 2015. P2P sites attract money from individual investors – mostly savers – by offering them extraordinarily high yields. They lend this money at high interest rates to borrowers who have trouble getting loans elsewhere – classic subprime. By the end of 2017, there were over 8,000 P2P platforms, according to the People’s Bank of China, with over 50 million registered users. By the end of June, in a little over two years, the industry had gone from zero to $190 billion in outstanding loans.

In May, new vehicle sales still surged 7.9% from a year ago. Through the first five months of the year, sales were up 5.1%. But in June, the year-over-year sales increase eased to 2.3%. And in July, sales actually fell 5.3% year-over-year.

That 5.3% decline in July was a big, sudden, and unexpected swing from the 7.9% surge in May.

Mother Hangs Herself After Becoming a Victim of China’s P2P Crash (The Epoch Times), Rated: A

Around 4 a.m. on Sept. 7, construction workers in Jinhua, a city in eastern China’s Zhejiang Province, found the body of a woman hanging from a tree in a park. She was Wang Qian, a 31-year-old single mother who had lost her savings in China’s recent peer-to-peer (P2P) lending crash.

Wang worked as an individual seller on Taobao, a Chinese shopping site similar to eBay. She lost about 260,000 yuan ($37,990). She had invested her money in P2P platform PPMiao, which collapsed on Aug. 6. She lost about 260,000 yuan ($38,000).

9F, fintech company with 63 million mainland Chinese users, eyes Hong Kong virtual banking licence (SCMP), Rated: B

Mainland Chinese financial technology company 9F Group has teamed up with local and international firms to apply for a virtual banking licence in Hong Kong.

European Union

The Hottest Fintech, Insurtech Startups in Berlin (Inside Bitcoins), Rated: AAA

Launched in 2013, N26 is a German neo-bank and one of the fastest growing banks in Europe. It serves more than 1 million customers, both businesses and individuals, across 17 European markets, and intends to enter the UK market in 2018 and the US market in 2019.

Smava is a loan portal that aims to make personal loans transparent, fair and affordable for consumers. Based on digital processes, Smava provides a market overview of 70 loan offers from 25 banks. As of January 2018, Smava had originated over US$3 billion in loans through its platform since inception.

Raisin is a fintech startup providing savings and investments marketplaces across Europe. The company operates several localized platforms for the German, French, Spanish, and Austrian markets, and more. These allow savers to shop and compare rates European-wide. In February, it launched a dedicated UK site, enabling savers to access deposit accounts in GBP, and another platform dedicated to the Dutch market in August.

SolarisBank is a platform with a full banking license which enables companies to offer their own financial products. Through APIs, partners gain access to SolarisBank’s modular services including payments and e-money, lending, digital banking as well as services provided by integrated third party providers.

Launched in 2014, CrossLend is a B2B marketplace lending platform that specializes in flexible refinancing via a capital market structure. CrossLend also offers cross-border credit intermediation through cooperation with a partner bank. The company aims to facilitate the borrowing, investing, and trading of money across the globe.

Founded in 2016, Billie offers a fully automated invoice financing platform that aims to “revolutionize small business financing.” Based on big data analytics, fully digitalized processes and a highly scalable state of the art tech platform, the company offers a simple and fast way for small businesses to access capital.

Real Estate Platform Zinsbaustein Receives Additionaly Investment from Sontowski & Partner Group (Crowdfund Insider), Rated: B

Real estate crowdfunding platform zinsbaustein.de has received additional backing from the Sontowski & Partner Group.

Zinsbaustein founding group FinLeap has sold its stake in the firm and is now focusing on building the recently introduced “B2B2X Fintech” platform.

International

Lending Club CEO: US’s and China’s P2P lending need clearer regulation and communication (TechNode), Rated: AAA

The idea became popular when it was first proposed around a decade ago. The then fast-growing sector fostered a series of unicorns. US P2P pioneer Lending Club was valued at $5.4 billion in its 2014 IPO and its peer Prosper was valued by private investors as worth $1.9 billion in its prime. Although a few years later than its foreign counterparts, Chinese P2P platforms have grown rapidly with leaders in the sector such as Hexindai who has gone public, and the likes of Lufax and Dianrong poised for an IPO.

Australia/New Zealand

Non-banks emerge as traditional banks retreat (NZ Adviser), Rated: AAA

The peer-to-peer lending space is gobbling up market share in mortgages as banks appear to be lending less to homebuyers, says one P2P mortgage lender.

Non-bank Southern Cross Partners is growing 20% year-on-year as the banks retreat from funding house, and sector demand grows, Southern Cross Partners chief executive officer Luke Jackson said.

Southern Cross enjoys strong year (Good Returns), Rated: A

The company’s total value of loans under arrangement  grew 24.8% in the year to date, as growth in investor funds rose 19.9%.

In a city that needs 13,000 houses a year to keep up – but only 7,000 are being built annually – lack of funding will only make the housing crisis worse.”

Asia

The Chinese P2P crisis and what Southeast Asia can learn from it (KrAsia), Rated: AAA

Merely three years ago, peer to peer (P2P) lending in China was hailed as the banks of tomorrow and the harbinger of financial innovation. Powered by technology and ever burgeoning rounds of funding and valuation, P2P lending was set to disrupt financing the world’s 2nd largest economy dominated by state owned (or sponsored) banks. The new elites in jeans and T-shirts would show the suited up old guard how finance is supposed to work. Here came the new finance, Silicon Valley style – with Chinese characteristics.

Fair was its blossom; and wretched is its downfall. By June 2018, the Chinese financial information provider 01Cajing reported only 1504 functioning P2P platforms, down from over 3000 in the heydays. The change in fortune is as swift as it is bizarre. Is this an omen of darker times to come for South East Asian marketplace lending? Before this question can be addressed, it is necessary to disentangle how the crisis precipitated in China, and the confluences of forces behind the calamity.

Peer-to-peer lenders plan to self-regulate (Korea JoongAng Daily), Rated: A

On Monday, the Preparatory Committee of the Digital Finance Association announced a series of self-imposed regulations that it plans to apply to all member companies when the association kicks off later this year.

Lendit, 8percent and Popfunding, the three P2P firms in the preparatory committee, left the older Korea P2P Finance Association in May along with other firms due to disagreements over its management direction.

Authors:

George Popescu
Allen Taylor

Monday June 25 2018, Daily News Digest

FREED 2018-1 collateral characteristics

News Comments Today’s main news: SoFi launches SoFi Money. Robinhood in talks with regulators about bank products. Orca Money plans to double in size this year. Monzo, TransferWise partner. Banco BNI Europa drops 50M Euro into Linked Finance. Today’s main analysis: FREED 2018-1 Deep Dive. Today’s thought-provoking articles: What financial service firms can learn from direct-to-consumer companies. Graduate degrees with […]

FREED 2018-1 collateral characteristics

News Comments

United States

United Kingdom

European Union

International

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News Summary

United States

SoFi’s Latest Product Called “SoFi Money” is Here (Lend Academy) Rated: AAA

At time of writing, SoFi is paying 1.1% on their account which is a competitive rate when you consider that it is a hybrid account. Other banks who continuously offer the highest rates available on the market such as Goldman Sachs’ Marcus are currently paying around 1.7% on savings accounts. The largest banks in the US such as Bank of America, Citi and JP Morgan Chase pay between 0.01% and 0.1% on savings accounts which varies depending on deposit amounts and current promotions.

Source: Lend Academy

Continued Yield Curve Flattening, FREED 2018-1 Deep Dive (PeerIQ), Rated: AAA

The yield curve continued its unrelenting flattening after last week’s Fed meeting. The spread between 10-year and 2-year treasury yields now stands at 36 bps (about 1 to 2 rate hikes from inversion). An inverted yield curve and lower-long term yields have presaged economic slowdown or recessions in the past. You can read our analysis of the Fed’s interest rate decision here.

FREED 2018-1 Deep Dive

FREED 2018-1’s collateral pool consists of 2 types of loans – 61.6% Freedom Plus (F+) and 38.4% Consolidation Plus (C+).

F+ Loans: F+ loans are unsecured consumer loans to near prime and prime borrowers. F+ collateral has a WA age of 8 months and WA remaining term of 41 months. The WA current FICO score of the pool is 723 and the WA interest rate is 14.8%.

C+ Loans: C+ loans are offered to select qualified debt settlement clients as an option to shorten the duration of their debt settlement program by making funds immediately available to fund settlements reached by Freedom Debt Relief. C+ collateral has a WA age of 8 months and WA remaining term of 44 months. The WA current FICO score of the pool is 654 and the WA interest rate is 22.9%.

Source: Source: PeerIQ, KBRA, DBRS
Source: PeerIQ
Source: PeerIQ

There’s plenty more. See the rest of the charts here.

Robinhood is said to discuss bank products with regulators (American Banker) Rated: AAA

Robinhood Markets has more than 4 million U.S. consumers using its free stock-trading platform. Now, it’s in talks to offer them other banking services like savings accounts, according to people familiar with the matter.

KeyBank Acquires Digital Lending Platform For Small Businesses Bolstr (Crowdfund Insider) Rated: A

On Wednesday, KeyBank announced it has acquired digital lending platform for small businesses Bolstr. According to Key, the fintech software, which is expected to be implemented later this year, will enable the banking group to provide faster and easier access both to SBA loans and to traditional capital for business owners. The acquisition comes just after the OCC recently called on banks to issue more SME loans. 

Capital One Co-Founder Is Making a Bet on Risky Borrowers (Bloomberg) Rated: A

The co-founder of Capital One Financial Corp. is betting now’s a good time to lend to the riskiest borrowers.

Nigel Morris, Richard Fairbank’s partner in creating the company that became Capital One, is joining the board of LendUp Global Inc. and boosting his investment in the firm, which uses machine learning to look beyond traditional credit scores in the subprime market.

What Financial Services Can Learn from Direct-to-Consumer Companies (Crowdfund Insider) Rated: AAA

2016 Bain study found that nearly a third of customers globally would change their bank if they could do so easily. With dissatisfaction that high, traditional financial institutions should look to emulate the branding strategies of direct-to-consumer retailers, rather than leaning on their well-established names, to engage with millennial and Gen Z consumers.

Research from BCG found that brands that create personalized customer experiences with technology and data can increase revenue by six to ten percent, and direct-to-consumer brands have capitalized on the benefits of personalization.

Many fintech companies’ value proposition is to leverage technology to provide less expensive financial advice, lower interest rates on student loans, or more fair and reflective insurance rates. For example, robo-advisor Betterment charges only 25 basis points for wealth management services and no minimum to enroll, as opposed to traditional financial advisors that charge one to two percent on assets under management and often require high minimum investments to qualify for on-boarding.

A recent PricewaterhouseCoopers study found that 75 percent of bank customers base their purchasing decisions on whether or not they’ve had a positive customer experience at the bank.

Which Graduate Degrees Deliver More Debt than Income? (Credible) Rated: AAA

Credible’s analysis of student loan debt levels and salaries across 16 graduate school majors shows that the most important consideration isn’t how much debt you’ll take on to obtain an advanced degree — or how much you’ll earn after graduation — but achieving the right balance between the two.

Source: Credible
United Kingdom

Scottish fintech Orca Money hopes to double in size (Insider), Rated: AAA

Scottish fintech firm Orca Money hopes to double its staff to ten over the next year following its second funding round.

The Edinburgh-based company raised £280,000 seed capital last January and is now talking to investors about follow-on funding.

P2PFA accused of reducing transparency after loanbook changes (Peer2Peer Finance) Rated: A

THE PEER-TO-PEER Finance Association (P2PFA) has been accused of reducing transparency and hindering efforts to enhance investor protection after changing the rules governing how firms publish their loanbook.

Previously, members of the self-regulated trade body were obliged to publish their full loanbook, showing information about all the loans on their platform.

But at the start of June, the P2PFA announced that members now have the option to “either continue to publish their entire loan book, or provide a detailed breakdown of loans in their overall loan book to enable a consumer to be informed about the nature and number of loans of different descriptions presently originated through the platform according to standards to be approved by the P2PFA board.”

Asset management giant warns on ‘exotic’ peer-to-peer lending pension investing (AltFi News) Rated: A

Pension investors should avoid high yielding assets such as peer-to-peer loans, according to new research by UK-based Royal London Asset Management.

The firm, which manages £114bn of assets, says investors looking generate income in retirement should beware for high risk, higher yielding investments.

How I invest: Ayo Adesina, a software engineer with £32,000 in peer-to-peer (iNews), Rated: A

Ayo Adesina, 34, was lucky enough to come into a £50,000 windfall when he won series two of Channel 4’s TV programme Hunted in 2016.

Mr Adesina, who describes himself as a novice investor, put the majority of the money – £32,000 – into a peer-to-peer property lending platform. He says his investment has grown 7 per cent, or £3,000, since he opened an account a year ago.

Who’s switching jobs at BWB Compliance (City A.M.), Rated: B

BWB Compliance has recruited Dena Chadderton as a senior adviser. With wide-ranging experience both as a regulatory consultant and across the financial services industry, Dena will primarily be advising firms in the fintech and asset management space. In particular, Dena will continue to specialise in the regulation of P2P lending and crowdfunding platforms, a growing part of the current team’s client-base.

China

Online lender seeks small-scale borrowers (The Standard) Rated: AAA

China’s FinUp Finance Technology Group, which operates a technology-enabled finance platform with a focus on marketplace lending, aims to widen its market in the country by going public in Hong Kong.

The fintech firm also provides a variety of other personal credit services including point of sale instalment services to automobile financing services.

Chinese Fintech PINTEC Launches Installment Financing on E-Commerce Platforms (Crowdfund Insider) Rated: A

Chinese fintech Pintec Technology Holdings Limited (PINTEC) announced on Wednesday it has launched installment financing on its e-commerce platforms. This news comes just a couple of weeks after PINTEC secured $103 million through its latest financing round, which as led by Mandra Capital and SINA Corp.

European Union

Monzo partners with TransferWise for international payments (TechCrunch) Rated: AAA

The partnership, which TechCrunch outed nearly three weeks ago, will see TransferWise power international payments for the U.K. challenger bank’s 750,000 customers. It is the second new bank partnership that TransferWise has unveiled this month, after the fintech unicorn announced that it has begun working with France’s second largest bank BPCE Groupe.

Asked why Monzo  has chosen to work with TransferWise, Blomfield reiterates the challenger bank’s goal of becoming a “hub or control centre” for your money. This won’t necessarily all be done by Monzo, he says, “but with partner organisations who plug into this hub”. TransferWise is the first of these.

LINKED FINANCE SECURES €50M FUNDING FOR IRISH SMES FROM BANCO BNI EUROPA (Irish Tech News) Rated: AAA

Linked Finance, Ireland’s leading peer-to-peer (P2P) lending platform, has secured backing from Portugal’s fastest growing digital bank, Banco BNI Europa, who will deploy up to €50m over a 2-year period, to lend to Irish SMEs.

As part of a wider strategy to identify the best P2P lending platforms in key European markets, Banco BNI Europa will deploy its capital alongside Linked Finance’s existing lenders. Linked Finance, connects Irish SMEs who need loans with an online lending community of more than 19,000 users.

HAVE YOUR CAKE AND ‘HODL’ TOO: TAKING OUT A LOAN WITH BITCOIN (Bitcoinist), Rated: A

P2P lending platform InLock wants to change this by enabling cryptocurrency to be used as collateral for a loan in fiat — effectively solving the short-term spendability problem. At the same time, borrowers can remain ‘hodlers‘ with the option to get their cryptocurrency back in full after the loan is paid off, regardless of any changes in price.

Csaba: When we looked at the Bitcoin blockchain, we found that 40% of all bitcoins existing today had not been moved at all in the past year. Looking back at 2017, there were plenty of reasons to move them: hard forks, the mempool crisis, regulation problems, an amazing bull run, followed by a 70% correction.

The FinTech50 2018 (The FinTech 50) Rated: B

Listings include:

  • Monzo
  • N26
  • OakNorth
  • Raisin
  • Revolut
  • Seedrs
  • SolarisBank
  • Starling Bank
International

34 Fintech and Insurtech Unicorns (Inside Bitcoins), Rated: AAA

According to data compiled from CB Insights and Crunchbase, they are currently 34 fintech unicorns, or startups valued at over $1 billion.

32. Funding Circle — $1 billion

Value: $1 billion | Raised: $413 million

Founded: 2009 |  | HQ: London

What it does: Peer-to-peer marketplace for business loans.

Why it’s hot:Over £3 billion has been lent across the platform and the company is tipped for a blockbuster European float later this year.

31. Kabbage — $1 billion

Value: $1 billion | Raised: $500 million

Founded: 2009 |  | HQ: Atlanta

What it does: Fast online small business loans.

Why it’s hot: The company has written over $4 billion-worth of loans and has partnered with Spanish bank Santander.

24. ACORN OakNorth — $1.2 billion

Value: $1.2 billion | Raised: $486 million

Founded: 2015 |  | HQ: London

What it does: A fintech firm focused on unlocking the potential in bespoke SME lending globally using its data and technology platform, ACORN machine.

Why it’s hot: ACORN machine is a fintech platform that helps automate the way banks penetrate this underserved and underestimated market. It does this by leveraging process excellence, machine learning and technology to fuel data-driven decision making across the loan lifecycle.

22. Tuandaiwang — $1.46 billion

Value: $1.46 billion | Raised: $380 million

Founded: 2012 | HQ: Dongguan

What it does: Peer-to-peer lending platform.

Why it’s hot: The company has helped individuals and companies borrow $11.4 billion and helped lenders make $335 million in returns.

17. NuBank — $2 billion

Value: $2 billion | Raised: $527 million

Founded: 2013 |  | HQ: Sao Paulo

What it does: Brazilian app-only bank.

Why it’s hot: The bank has 3 million customers and has raised money from Sequoia Capital, Goldman Sachs, Tiger Global, and more.

16. Affirm — $2 billion

Value: $2 billion | Raised: $720 million

Founded: 2012 |  | HQ: San Francisco

What it does: A hire-purchase provider, letting people buy products and pay them off in installments.

Why it’s hot: The company works with over 1,200 retailers in the US and its technology helps retailers increase average order sizes by 51%. Morgan Stanley and Singapore’s GIC are both investors.

15. Avant — $2 billion

Value: $2 billion | Raised: $1.8 billion

Founded: 2012 |  | HQ: Chicago

What it does: Online personal loans.

Why it’s hot: The company has lent over $1 billion and is backed by the likes of Tiger Global, KKR, and Jefferies.

13. Klarna — $2.5 billion

Value: $2.5 billion | Raised: $636 million

Founded: 2005 |  | HQ: Stockholm

What it does: User-friendly payment systems for mobile and web that lets people buy now and pay later.

Why it’s hot: The company processes 800,000 transactions a day and has been used by 60 million people globally. Sequoia Capital, the Silicon Valley fund that backed PayPal, is an investor.

9. GreenSky — $3.6 billion

Value: $3.6 billion | Raised: $350 million

Founded: 2006 |  | HQ: Atlanta

What it does: Provides technology to banks that is used in processing loan applications.

Why it’s hot: Steven McLaughlin, a former Goldman Sachs banker whose firm advised GreenSky on a funding deal, told Bloomberg in 2016 that GreenSky “is the single best fintech company created in the last 10 years, by far.”

8. Credit Karma — $3.5 billion

Value: $3.5 billion | Raised: $868 million

Founded: 2007 |  | HQ: SanFrancisco

What it does: Provides free online credit reports, offsetting the cost of paying for them with targeted advertising of financial products.

Why it’s hot: Over 75 million people in the US and Canada have used the service. Google Capital is an investor.

7. SoFi — $4 billion

Value: $4 billion | Raised: $2.1 billion

Founded: 2011 |  | HQ: San Francisco

What it does: Peer-to-peer student loan refinancing, mortgages, and other types of personal loans.

Why it’s hot: Like Zenefits, SoFi struggled with a slew of setbacks in 2017. Allegations of sexual misconduct and loan misstatements forced out founder Mike Cagney. Former Twitter CFO and ex-Goldman banker Anthony Noto is now leading a turnaround of the business.

3. Lu.com — $18.5 billion

Value: $18.5 billion | Raised: $1.7 billion

Founded: 2011 | HQ: Shanghai

What it does: Chinese peer-to-peer loans and financing platform.

Why it’s hot: Lu.com, also known as Lufax, is one of China’s largest online lenders and is tipped for an IPO this year.

ETHLend Blockchain Lending Platform Adds MyBit Token (MYB) in Partnership (Bitcoin Exchange Guide) Rated: B

MyBit is an Ethereum-powered ecosystem that aims to connect the global Internet of Things (IoT) industry. ETHLend works with the Ethereum blockchain as well and is a marketplace for peer-to-peer lending services that use smart contracts. The company provides low interest rates and a transparent technology for processing transactions.

Currently, it allows users to lend with Ethereum, but it may be ready to introduce new altcoins at the end of this year, including MYB.

Australia

RateSetter to ‘accelerate’ broker strategy with new appointment (The Adviser) Rated: A

Last week, The Adviser broke the story that Mark Woolnough had left his role at ING after 18 years at the lender to join the fintech RateSetter.

It has now been confirmed by RateSetter that Mr Woolnough has joined its ranks as head of third-party distribution.

India

P2P lending marketplace ‘PaisaDukan’ to open branches in Noida and Bangalore (Knowledge & News Network) Rated: AAA

PaisaDukan, a P2P lending platform fully owned by Mumbai based fintech startup BigWin Infotech, has decided to launch 2 branches in Noida & Bangalore as a part of its PAN India expansion and growth plans by the end of next month.

This will enable the company to have better control over their operations and widen its reach.

Asia

Bills on P2P lending, cryptocurrency pending in National Assembly (The Korea Herald) Rated: AAA

Rep. Min Byung-doo of the ruling Democratic Party and Rep. Kim Su-min of the minor opposition Bareunmirae Party filed two separate bills to regulate P2P lending firms in July last year and in February, respectively.

With the bills still pending in the National Assembly, financial authorities have been struggling to tackle abusive and deceptive P2P lending practices.

Open Banking: no leisurely walk in the DX park (Enterprise Innovation) Rated: A

The 2018 Global Payments Insight Survey: Retail Banking report by ACI Worldwide and OVUM  claimed that 86% of banks in Asia are developing their open banking strategy.

Ovum’s 2017 Payments Insight Survey said 87% of surveyed banks report having a clear strategy for developing open APIs, up from 59% in 2017.

Africa

FINT is changing the narratives in the Nigerian lending space (Nairametrics), Rated: AAA

In a recent report by the International Finance Corporation (IFC) and the Central Bank of Nigeria (CBN), less than a third of MSMEs have successfully obtained loans from financial institutions, and that is not for a lack of trying.

Nigeria currently has over 35 million MSMEs and if approximately only 10 million MSMEs have been able to get loans from financial institutions, hence, a credit gap of about 25 million in the country.

What exactly is FINT?

FINT is an online lending marketplace, basically we connect verifiable income borrowers looking for access to affordable credit with lenders who are looking to fund the loans for attractive returns. We have consumer loans i.e. loans between N60,000 and N2 million at rates as low as 8% for 3 – 12  months, with retail and institutional lenders (banks and asset managers).

For lenders, they can lend in the multiples of N20,000 grows at 26-39% for one-year loan tenures, for 6 months 15-22% for 3 months it is 8-14%.

Authors:

George Popescu
Allen Taylor

Thursday June 7 2018, Daily News Digest

Lending Tree Purchase APR by Month

News Comments Today’s main news: Circle seeks a banking license. Revolut has 2M users. Ping An looks beyond insurance. TransferWise partners with first big bank. Today’s main analysis: How microfinance is navigating the fintech revolution in Africa. Today’s thought-provoking articles: Where retail credit, charge cards are used the most. The case for a VRP strategy. A different type of Know Your […]

Lending Tree Purchase APR by Month

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United States

United Kingdom

International

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News Summary

United States

Crypto Unicorn Circle Aims to Expand Into Regulated Banking (Bloomberg) Rated: A

Circle Internet Financial Ltd., one of the world’s most valuablecryptocurrency platforms, is looking to make a big leap into the highly regulated realm of U.S. banks and brokerages.

The venture, partly backed by Goldman Sachs Group Inc., plans to seek a federal banking license to provide more services to customers. It also intends to pursue registration as a brokerage and trading venue with the Securities and Exchange Commission, so it can help investors buy and sell tokens deemed to be securities.

LendingTree Releases Monthly Mortgage Offer Report for May (PR Newswire) Rated: AAA

LendingTree today released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.

Source: PRNewsfoto/LendingTree
  • May’s best rate offers for borrowers with the best credit profiles had an average APR of 4.35% for conforming 30-year fixed purchase loans, up from 4.26% in April.
  • Refinance loan offers for borrowers with the best profiles were up 12 bps to 4.35%.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 10 bps to 5.02%. The loan note rate of 4.91% was also up 10 bps.

CompareCards Study Reveals Which Places Use the Most Retail Credit and Charge Cards (Benzinga) Rated: AAA

CompareCards by LendingTree today released the findings of its study on the places that use the most retail credit and charge cards. The study found that some metro areas are home to heavy users of retail cards while other locations have a population who use retail cards more sparingly.

Nationally, 61.3 percent of credit card owners have at least one retail card. Of those who have at least one retail card, 30.4 percent carry a balance on a retail card, representing 11.4 percent of outstanding balances. The average balance on a retail card in the U.S. is $2,699.

Highlights from the report:

  • Residents of McAllen, Texas are by far the highest users of retail credit and charge cards. The metro earned a final score of 87.2 and ranked first in these categories:
    • The number of people who have retail cards (72%)
    • The number of retail card owners who carry a balance on their retail cards (45%)
    • And the percentage of credit card debt carried on a retail card (17%)
  • People in Charleston, S.C. have this retail card claim to fame: They carry the highest balances on their retail cards among all 100 metros, with an average balance of $4,026and a median balance of $1,746. Meanwhile, Albany, N.Y. had the lowest average balance ($2,420).
  • Honolulu has the lowest retail card usage, with a final score of 9.4. Although it didn’t rank last in any individual category, it ranked extremely low in all.
Source: Benzinga and CompareCards

AQR MAKES THE CASE FOR A VRP STRATEGY (all About Alpha) Rated: AAA

AQR Capital Management, the Greenwich, CT-based global investment firm, has posted a new discussion of thevolatility risk premium and of the advantages of strategies based thereon.

In principle the premium would disappear if markets efficiently estimated the probability of significant losses. But it remains, because investors are risk averse and tend to overestimate the probability of substantial losses.

QR models an investor who was hypothetically long the S&P 500 from 1996 to 2016, while hedging his position with a continuously rolled one-month 5% out-of-the-money put. The hedged strategy will in fact lessen portfolio volatility as measured against simply being long in the S&P without the hedge. Vol falls from 16.1% in the latter case to 14.7% in the former.

But, as noted, this risk aversion comes at a hefty cost. Average portfolio returns decline from 5.1% to just 1.8%.

Unchained Capital Raises $ 3M To Lend Fiat To HODLers (Crunchbase News) Rated: A

Austin-based crypto-finance startup Unchained Capital has raised nearly $3 million in seed funding. Unchained’s first product is a crypto asset-backed loan, which is like borrowing against one’s home—except the company lends against digital assets such as bitcoin and ethereum.

The round includes $2.4 million in new capital and $595,000 of SAFE notes converting.

Court upholds sanctions against lawyers, KC firm in payday case (Kansas City Business Journal) Rated: A

A federal appeals court upheld $150,000 in sanctions levied against Stephen Sixand Austin Moore of Stueve Siegel Hanson LLP in Kansas City, Darren Kaplan of the Darren Kaplan Law Firm PC in New York, and their respective law firms.

The plaintiff filed a class-action lawsuit that wasn’t against the online payday lending companies themselves, but against four nonlender financial institutions — Generations Federal Credit Union, BMO Harris Bank, Four Oaks Bank & Trust Co. and Bay Cities Bank — that processed the debit transactions and were paid fees.

LoanNow Reviews: Beware Personal Loan Offers With Sky-High APRs (Student Loan Hero) Rated: A

That’s where online lender LoanNow comes in. LoanNow reviews your application even if you don’t have strong credit.

Here are the ranges for APRs and repayment terms in the six states that LoanNow operates in as of June 6, 2018. Double-check the LoanNow website for the latest rates.

State Loan amount APR Repayment term
Alabama $2,500 – $5,000 29.00% – 229.00% 12 – 48 months
California $2,500 – $5,000 29.00% – 229.00% 12 – 48 months
Georgia $3,100 – $5,000 29.00% – 59.00% 12 – 48 months
Missouri $1,000 – $2,500 29.00% – 299.00% 9 – 24 months
New Mexico $2,600 – $5,000 29.00% – 229.00% 12 – 48 months
Utah $1,000 – $2,500 29.00% – 299.00% 9 – 24 months

Startup Aims to Disrupt High-Interest Payday Lending With Blockchain (Thirty K) Rated: A

Meje Tuyo thinks the payday loan industry is ripe for disruption and he wants to do it using blockchain technology. Specifically, Tuyo wants to deliver more equitable access to loans through Owo, a startup venture set to debut this fall. The company’s name means “money” in the West African language of Yoruba.

Tuyo, a native of Nigeria, is looking to, at first, address the challenges of African Americans, a population that relies more on payday loans than other groups. Another study from the Pew Charitable Trusts from 2012 found that 12 percent of African-Americans had taken out payday loans, compared with 4 percent of whites and 6 percent of Hispanics.

The company plans to launch an app called Pazimawhich will allow consumers to request loans that will be automatically repaid when they receive their paychecks.

Renovate America Named “Esoteric ABS Issuer of the Year” (PR Newswire) Rated: B

Renovate America, a leading provider of home improvement financing, has been recognized as “Esoteric ABS Issuer of the Year” in the 2018 U.S. Securitization Awards announced by GlobalCapitalmagazine. The award recognizes Renovate America’s position as a leader in the esoteric ABS market, which includes not only PACE, but also equipment leasing, containers, marketplace lending, whole business, solar, and cell tower deals, to name a handful.

Sallie Krawcheck thought she hated banking (Business Insider) Rated: A

  • Sallie Krawcheck spent years as a Wall Street exec, commonly called “the most powerful woman on Wall Street.”
  • But when she got her first investment banking job in her early 20s, she hated it, and even went back to business school to transition into her dream jobs in media.
  • It wasn’t until she asked herself what she loved about media that she could find in banking that she found a place in equity research, which launched her into a series of executive roles on Wall Street.

David Mitchell Joins White Oak Business Capital as Senior Vice President and Senior Business Development Officer (Globe Newswire) Rated: B

White Oak Business Capital, Inc. (“WOBC” or White Oak), an affiliate of White Oak Global Advisors, LLC, today announced the appointment of David Mitchell to the role of Senior Vice President and Senior Business Development Officer, responsible for expanding business in the Southeast and Mid-Atlantic markets.

United Kingdom

UK fintech start-up Revolut reaches 2 million users (The Telegraph) Rated: AAA

London fintech start-up Revolut has announced that it has grown to 2m users following its launch in 2013.

Revolut said that it has now signed up 2m customers in Europe ahead of plans to launch in the US this year. Customers have also made over 100m transactions, the company said, with a monthly transaction volume of $2bn (£1.4bn).

Going tribal: A different type of ‘know your customer’ (Mortgage Finance Gazette) Rated: AAA

The fintech industry is coming of age. Global investments in the sector have grown from $20 billion in 2014 to $39 billion in 2017, according to Fintech Global. Fintechs like Transferwise, Nutmeg, Revolut, Starling Bank and Funding Circle in the UK have grown rapidly over the last five years. A large reason for this success is attributable to the way fintechs are able to develop deep relationships with their customers who rally around them in an almost tribe-like manner. Successful firms manage to convert isolated customers into communities and finally highly engaged ‘tribes’.

Fintechs that have successfully demonstrated that they can generate a sense of community within their customer base share the following six characteristics.

  1. Transparency-or at least the perception of it – is a great way to build trust and attract younger customers. Transferwise publishes its rate card in full on its website for instance.
  2. Reachability-In general, fintechs are much more in tune with what their customers want to be developed next. Revolut got this formula right from the start – this has helped them to grow to a $1.7 billion company in just 33 months.
  3. A sense of purpose-A large part of fintechs’ success in tribe-building is their ability to generate the sense of a greater purpose. Fintechs are typically focussed on achieving a specific goal which on its own, is mundane and something on the lines of – ‘help you transfer money cheaply’. However, this mundane goal is transformed into a grandiose vision when put into the intended context— ‘transfer money cheaply and beat the big banks at their game’. An origin story is the final touch required to transform this vision into a sense of purpose for the community – ‘transfer money cheaply, beat big banks and be a part of something meaningful’.

The growing popularity of bridging loans for investors (Property Week) Rated: A

This trend has only been exacerbated by Brexit as the ongoing uncertainty around Britain’s exit from the EU leaves borrowers, banks and new lenders without a clear picture of the next few years.

In light of this, bridging loans are increasingly popular as a short-term solution for investors and a way for high-net-worth individuals to see a return on capital.

Although the recent rise of bridging loans is associated with specialist lenders, particularly in the commercial space offering non-FCA regulated loans, the product originated as an option for property buyers to bridge a gap between exchanging contracts and completion of a sale where you needed to purchase a property in the interim but did not have the capital.

China

Chinese Giant Ping An Looks Beyond Insurance To A Fintech Future (Forbes) Rated: AAA

Global 2000 list — look beyond the stodgy insurance business and into the realm of high technology, whose tentacles reach into every aspect of commerce in China and eventually show up in the mobile handsets of Chinese consumers.

European Union

Klarna at Money 20/20: Banks are obsessed with themselves (Bobs Guide) Rated: A

In a presentation entitled ‘Banking on the CX factor’, Klarna CEO Sebastian Siemiatkowski spoke to a packed crowd under The Big Top at Money 20/20 EU, Amsterdam, today, taking the opportunity to open fire on the banks.

The audience heard insight from Klarna on customer experience, including the fact that, according to the Happiness Index, consumers are more stressed and unhappy than ever before.

Auto1 Joins Deutsche Bank, Allianz in Fintech Car Financing Push (Bloomberg) Rated: A

Auto1 Group GmbH is partnering with Deutsche Bank AG and Allianz SE as the German startup expands into fintech to ease financing for customers buying its used cars.

The three partners together own more than 50 percent in a new company called Auto1 Fintech, that will offer refinancing loans and insurance products to car dealerships buying SoftBank Group Corp.-backed Auto1’s vehicles, co-Chief Executive Officer Hakan Koc said Wednesday in an interview.

International

TransferWise just partnered with its first big bank (Business Insider) Rated: AAA

UK-based cross-border money transfer company TransferWise has announced a partnership with France’s second-largest bank, BPCE Groupe, that will take effect at the beginning of 2019. Under the partnership, TransferWise will provide international money transfer services for BPCE Groupe’s customers, enabling them to send money in different currencies with TransferWise’s low standard fees.

Source: Business Insider

StartUp Nation Ventures Announces the Israel-Florida Innovation Alliance’s First Call for Proposals (PR Newswire) Rated: A

StartUp Nation Ventures (“SUNV”) in partnership with the Israel Innovation Authority (“IIA”) is proud to announce the initial Call for Proposals through the Israel-Florida Innovation Alliance (“Innovation Alliance”).

The Innovation Alliance was created to support Israeli innovation companies in the discovery and selection of Florida as their destination to establish U.S. headquarters—a gateway for expansion into the U.S., and Latin America markets.

The joint collaboration between SUNV and the IIA establishes a scalable platform to support Israeli companies that have proven the feasibility of their technologies and have a minimal viable product or working prototypes for the U.S and Latin America markets in the following areas:

  • Financial Technologies (FinTech), Blockchain, Cybersecurity, Augmented Reality/Virtual Reality (AR/VR) Entertainment, Cryptocurrency, Initial Coin Offerings (ICOs); and
  • Tech Innovation related to smart contracts, supply chain, asset verification, certification, identity, health and financial transactions, digital and mobile payments; capital markets & investing, banking & corporate finance, financial platforms, crowdfunding & peer-to-peer lending, and personal financial management.

How Fintech Is Disrupting the Personal Loans Market (The Market Mogul) Rated: A

Lending has experienced one of the biggest changes in the traditional banking marketplace with financial technology startups, or simply, fintechs, introducing disruptive products to consumers. Peer-to-peer lending platforms have been at the forefront in this space, but recent developments suggest more could be about to unfold over the coming years.

Startup lending companies have managed to gain a substantial chunk of the market over the last few years. According to credit analysts, this growth has been driven by personal loans. In a report published by TransUnion late last year, it was established that fintechs continue to disrupt the personal loans market at an alarming rate. In the report titled Fact versus Fiction, the TransUnion study found that fintechs have grown from a mere 1% of personal loan originations in 2010 to one-third of the entire personal loan market in 2017.

The 32% market share for fintechs in the personal loans market was more than the 29% for banks, 24% for credit unions, and 15% for traditional finance. This clearly shows that fintechs are on the path to dominate the entire lending market if the momentum can be maintained.

Here’s why robo-advisors won’t replace human financial advisors (CNBC) Rated: A

Robo-advisors give retail investors access to automated investment strategies, creating portfolios and coming up with an asset allocation that’s based on client data points, including time horizon and risk tolerance.

As convenient as it may be, this technology doesn’t make human financial advisors obsolete, said Joe Duran, founder and CEO of United Capital.

That’s because robo-advisors fail to account for the complexity of financial planning, he says.

Cambridge Centre for Alternative Finance Launches Global Research (Crowdfund insider) Rated: B

Having now tracked alternative finance for five years, and from this relatively short perspective, the Centre has noted an emerging industry that has progressed quickly. Where once there were only handful of early adopters and innovators in a given country, they now see an “altfin” landscape that is growing rapidly, with an exponential number of new platforms driving competition and introducing new products.

In many regions (the EU, UK, USA) the Centre is also seeing their first cases of consolidation, but with continued diversification of products and services to customers.

Africa

MICROFINANCE PAPER WRAP-UP: “How Microfinance is Navigating the Fintech Revolution in Africa” (MicroCapital) Rated: AAA

We are also looking to provide insight for microfinance stakeholders into how MFIs can leverage Fintech solutions to remain competitive in the rapidly changing financial landscape in Africa. While it is still too early to present a definitive response to the opportunities and challenges of Fintech, we are
convinced that MFIs will need to adapt to succeed in this increasingly dynamic microfinancing environment in Africa.

Source: Triple Jump

Fintech is considered more as an enabler than as a disruptor.

  • The MFIs surveyed perceived Fintech more as an opportunity than as a threat to their business (see graph 3: 88% consider it as a (very) great opportunity, while only 35% see a moderate to high threat).
Source: Triple Jump
  • Few MFIs foresee increasing competition in the future from Fintech-based (B2C) companies. This is explained by the fact that most digital lenders enter relatively easy markets with a target audience that is tech savvy, literate and more urban and where data and technical infrastructure are already available. But to access more informal and rural client segments effectively, these Fintech players face a number of challenges, such as client acquisition, initial high write-offs and limited profitability.

Read the paper in full here.

Asia

The Trillion-Dollar Investment Trend You’ve Never Heard Of And How You Can Be A Part Of It (Indonesia Expat) Rated: AAA

You can support Indonesian micro businesses and help them grow and thrive by investing in their loans. A leading, Indonesia-based peer-to-peer lending platform lets you do just that in just a few simple steps. Mekar (PT Mekar Investama Sampoerna) connects you, the investors (also called ‘funders’ in Mekar) from all over the world, with micro businesses in many provinces in Indonesia that are in need of funding.

About 99% of the micro businesses that are seeking loans in Mekar are run by women. Loans in Mekar range from around Rp 2 million (US$ 140) to Rp 8 million. For the last couple of years 99.5% of these borrowers have repaid on time.

Source: Indonesia Expat

Authors:

George Popescu
Allen Taylor

Wednesday June 6 2018, Daily News Digest

Marcus future plans

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

Marcus future plans

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

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

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

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

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

Source: Lend Academy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

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

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

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

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

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

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

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

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

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

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

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

European Union

N26 passes million customer milestone (Finextra) Rated: AAA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

International

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

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

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

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

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

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

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

Australia

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

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

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

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

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

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

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

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

MENA

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

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

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

Asia

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

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

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

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

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

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

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

Caribbean

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

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

Authors:

George Popescu
Allen Taylor

Monday June 4 2018, Daily News Digest

Average segment revenue Qudian

News Comments Today’s main news: Yirendai announces earnings results. LendingCrowd goes over 3M GBP in loan originations in May. Starling seeks 80M GBP in funds. Transferwise partners with first European bank. Today’s main analysis: Is Qudian too risky? Today’s thought-provoking articles: The most well-funded tech startups in each U.S. state. Alipay isn’t just for the Chinese. International P2P lending volumes […]

Average segment revenue Qudian

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

The United States Of Startups: The Most Well-Funded Tech Startup In Every US State (CB Insights) Rated: AAA

Using the CB Insights database, we identified the most-well funded VC-backed technology startups by state based on disclosed equity funding. We excluded funding from debt as well as lines of credit, and only considered companies that have raised at least $1M of equity funding since 2015 to date (5/23/18).

Source: CB Insights

Citi has announced a direction for a new digital bank (Business Insider) Rated: A

A digital-only bank can allow Citi to continue onboarding new account holders despite its shrinking physical presence.

And because Citi already has 10 million active mobile banking customers as of Q1 2018, which represents 25% year-over-year (YoY) growth, it’s likely that consumers with Citi accounts will continue to do their mobile banking through Citi, so it’s a good move for the firm to target another customer base by leveraging its card network and cobrand partnerships.

How Capital One sees digital identity as a business opportunity (American Banker) Rated: A

Capital One has taken a different tack, spending much of the past year building out a digital identity platform that it can potentially position as a service it would sell to businesses.

By buying the startup Confyrm and hiring its founder, consumer identity expert Andrew Nash, the bank is taking another step toward making a business out of addressing the industry’s digital identity needs, industry observers say.

Source: American Banker/Experian

Hottest Alternative Lending Options Available for Small Businesses (All Business) Rated: A

Here are some trending alternative lending options—one of them may be just right for your SME.

Revolving business line of credit-Individuals and corporations are eligible to take out revolving lines of credit; this type of credit line allows entrepreneurs to pay a commitment fee and then utilize funds on an as-needed basis.

Unsecured business loan-Secured business loans require collateral and unsecured business loans do not. If you’re an entrepreneur and would prefer not to borrow money without putting your home, auto, or business inventory (or something else along those lines) up as collateral, then seeking out an unsecured business loan from an alternative lender may be your most practical option.

Crowdfunding-This funding method involves raising capital via individual investors, friends, customers, and family. It’s about tapping into the collective efforts of a big group of people, mostly through crowdfunding platforms and social media networks.

Too broke to own a home? These startups will fund your American Dream (Fast Company) Rated: A

Loftium, a Seattle-based startup, will contribute to a buyer’s down payment in exchange for Airbnb income.

Loftium has so far closed on nearly 50 homes, says Yifan Zhang, cofounder and CEO.

Other startups are taking a similarly innovative approach to the staid, highly regulated housing market. HomeFundMe, for example, helps homeowners crowdsource down payment funds from family members, friends, and employers. Point, based in San Francisco, buys equity from existing homeowners, and then cashes out when they sell–a homeowner-friendly twist on home equity lines of credit (HELOCs).

Laurel Road, MoviePass Join Forces  (Broadway World) Rated: A

Laurel Road, an online lender and FDIC-insured bank, has announced an exclusive, first-of-its-kind partnership with MoviePass, the nation’s premier movie theater subscription service, designed to further amplify savings and value for its customers.

As part of the agreement, MoviePass customers who refinance their student loans with Laurel Road will receive a free annual membership to MoviePass.

How credit card issuers are prepping for the next downturn (American Banker) Rated: A

Is the next turn in the credit cycle right around the corner? Or is it still years away?

The answer has big ramifications for the $1 trillion credit card industry, which has enjoyed unusually strong profits in the post-crisis period, but typically suffers during recessions.

At an industry conference in New York, credit card industry executives said Thursday that they still see sunshine on the horizon. But they were also careful to make clear that they are taking steps to prepare for rainy days ahead.

2018 Rising Stars: Viral Shah (Housing Wire) Rated: B

Viral Shah is cofounder and head of capital markets at Better Mortgage, where he oversees financial product innovation, the mortgage marketplace and corporate nance. Shah’s experience includes consumer nance, capital markets, corporate development and strategy.

Shah led the acquisition and integration of the mortgage lender that Better Mortgage purchased in 2015, while concurrently running the $30 million Series A capital raise.

Shah built out the capital markets infrastructure for the company, obtaining multiple warehouse lines and establishing a loan marketplace representing $700 billion of annual demand and 70% of the mortgage market, including some of the largest GSEs, banks, hedge funds, REITS and asset managers.

PeerStreet’s Nia Patel Named One of HousingWire’s 2018 Rising Stars (Business Wire) Rated: B

PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that Nia Patel has been named to HousingWire’s 2018 Rising Stars list of young leaders to watch in the housing industry. HousingWire’s 2018 Rising Stars list recognizes talent that demonstrate leadership and innovation, inspiring not only those within their company, but also their communities and the industry at large.

United Kingdom

LendingCrowd Milestone: Celebrates Record Month For Loan Origination (Crowdfund Insider) Rated: AAA

LendingCrowd, one of the UK’s fastest-growing alternative finance lenders to the SME market, announced on Friday it is on course for continued expansion after completing loan deals totaling to more than £3 million during May, marking the p2p lending platform’s best month ever. The company also reported that despite the month having two bank holidays it also saw its deal volumes reach a fresh record and secured loans for 36 small business covering a wide range of sectors across Britain.

UK challenger bank Starling seeks £80m funding (Fintech Futures) Rated: AAA

UK challenger bank Starling is looking to raise £80 million in its latest quest for funding – and it has ended its relationship with TransferWise.

In addition to the cash injection, Starling is hiring a new international advisory firm, as it potentially hunts for action beyond the UK. Starling is already in Ireland.

Catch the budgeting bug: apps aimed at millennials (The Sunday Times) Rated: A

Chip promises to help you save “without feeling it”. You link the app to your current account (12 providers are signed up); it works out what you can afford and sends this money every few days to a savings account paying 1% interest. It’s free, regulated by the Financial Conduct Authority (FCA) and available for iOS and Android.

Plum uses Facebook Messenger to analyse your cashflow before banking money. You can invest it in peer-to-peer platform RateSetter and earn up to 3% interest (RateSetter is not covered by the Financial Services Compensation Scheme). Plum is free and available for iOS and Android.

If you are self-employed or do freelance work, Coconut allows you to track your income and outgoings and any tax you owe.

In the red: the soaring cost of middle-class borrowing (The Times) Rated: A

This week the city regulator, the Financial Conduct Authority (FCA), said charges for dipping into an unarranged overdraft, something 13 million people do each year, can be ten times higher than the cost of paying off the same amount on a payday loan.

While 19 million people use the planned overdraft that comes with their bank account, most don’t see this as debt and will also probably have paid charges.

UK financial watchdog calls for ‘radical overhaul’ of high-cost credit (Financial Times) Rated: A

The UK financial regulator called for a “radical” overhaul of rules surrounding bank overdrafts and rent-to-own businesses on Thursday, dismissing criticism that it was dragging its heels in its efforts to protect vulnerable customers.

The Financial Conduct Authority said forcing banks to give more transparent information about overdrafts would save customers more than £200m a year. The regulator said it would consider more fundamental changes in future, such as a ban on fixed fees and ending distinctions between unarranged and arranged borrowing costs.

When Tandem met Harrods: we had ‘sir’, but we didn’t have ‘dame’ (AltFi News) Rated: A

When Tandem’s banking plans went up in smoke last year, after a failed fundraise, few could have guessed that it would rise from the ashes on the wings of luxury department store Harrods’ banking arm.

But that is exactly what happened. The digital challenger completed the acquisition of Harrods Bank in January, giving it a banking licence, £80m of equity capital, £400m of deposits and a £375m mortgage loanbook. It has now launched a cashback credit card and fixed savings accounts – not to mention having signed up 100,000 customers.

In announcing that milestone earlier this week, Tandem revealed that its chief executive Ricky Knox (pictured, right-middle) had invited Harrods Bank’s 7,000 global customers to meet face-to-face in his office in the months following the acquisition.

Finance companies and retailers are experimenting with Slack (Tear Sheet) Rated: B

While no major bank has rolled out a Slack bot for customers (though they’ve done so on Facebook messenger or iMessage), challenger bank Revolut is testing its capabilities for business customers.

This week, the bank launched Revolut Connect, a feature that lets business account holders “talk” to companion apps they use frequently for crucial day-to-day functions like payroll and expense management.

China

Yirendai Announces Earnings Results (The Ledger Gazette) Rated: AAA

Yirendai (NYSE:YRD) issued its quarterly earnings data on Thursday, May 24th. The technology company reported $1.72 EPS for the quarter, beating the consensus estimate of $0.99 by $0.73, Briefing.com reports. The firm had revenue of $253.90 million during the quarter, compared to the consensus estimate of $250.75 million. Yirendai had a net margin of 21.93% and a return on equity of 51.90%. During the same period in the prior year, the firm posted $5.81 earnings per share.

Qudian: The Risky Chinese Fintech Opportunity (Seeking Alpha) Rated: AAA

QD’s average loan size is small. Roughly speaking it ranges from $100-200 per customer. The average cash credit was $136, as listed in its IPO prospectus. QD considers that these small credits pose a favorable risk-reward profile because customers are likely always to pay back their debts. Also, since their credit is short term, its risk is lower compared to longer-term credit products.

Source: SEC filings, quote QD, and author’s elaboration
Source: SEC filings, quote QD, and author’s elaboration

China: WeiyangX Fintech Review (Crowdfund Insider) Rated: A

International Tuition Payment Platform Easy Transfer Receives Tens of Million Yuan in Series A Financing

This week, Easy Transfer announced that it has won tens of millions yuan in Series A financing, which was led by Zhen Fund and followed by IDG Capital. It is reported that this round of investment will be mainly used for product development, team-building and marketing.

The Hong Kong Monetary Authority is Expected to License Virtual Banks by the End of this Year

On May 31st, Hong Kong Monetary Authority (HKMA) issued the revised “Virtual Bank Recognition Guidelines”. The president of the HKMA, CHAN Tak-Lam, said that some interested parties have begun to submit applications to the HKMA. HKMA will carefully and quickly assess the applications and is expected to license virtual banks by as early as the end of this year.

Consumer Finance Company Dauron Secures Tens of Million Yuan in Pre-A Round of Financing

Dauron, an online consumer finance company, announced that it had received tens of million yuan in Pre-A round of financing from Jingbei Investment and Wanrui Factoring.

European Union

Transferwise partners with first major European bank BPCE (City A.M.) Rated: AAA

Out with the old and in with the new: digital money transfer service Transferwise has partnered with Banques Populaires’ and Caisses d’Espargne (BPCE), France’s second largest bank, to integrate its API directly into BPCE’s banking apps.

Set to go live at the beginning of 2019, the partnership between Groupe BPCE, its international banking arm Natixis Payments and Transferwise will see the fintech’s international payments API power all payments made digitally by the group’s 15.1m retail customers at the mid-market exchange rate.

Transactions will also be set at Transferwise’s low-cost 0.5 per cent fee on most routes, and will serve over 60 international destinations. Currently over 3m people use the platform to transfer more than €2m (£1.75m) every month.

How European FIs Are Building Delightful Banking Experiences (Medici) Rated: A

BBVA was the first financial institution in Spain to launch ‘Online Onboarding’via mobile in 2016, which allows anyone to open an account in just a few minutes and start banking right away. This service uses a procedure that verifies a customer’s identity through a selfie and a video call.

The Estonian eID card system is one of the most advanced in the world and serves as the basis for all of the digital services that are available in the country. The system has been in service for 16 years already and represents a highly sophisticated digital access card for all of Estonia’s secure e-services.

Monzo uses a photo of the customer’s passport or DL for identification and matches it to a video selfie; N26 uses passport/ID proof + video chat-based ID verification (in Germany, specific nationalities are also required to check at the closest post office to show their ID); similar to N26, Fidor asks for passport/ID proof + a video chat for ID verification.

International

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

Source: P2P Banking

So you think Alipay is just for the Chinese? (Chris Skinners Blog) Rated: AAA

It all started with a very good sum-up of Ant Financial’s recent $150 billion by Huy Nguyen Trieu, CEO @ The Disruptive Group. Ant were valued at around $50 billion when I first started to focus upon them two years ago, so a tripling in value in two years is notable, especially as it would make them the tenth largest bank in the world by value.

Second point is that valuation of $150 billion. In another conversation on social media, someone questioned that valuation (coincidentally a former member of Standard Chartered, Axel Winter, Former Global Chief Architect & Technology Strategy Head).

Source: Chris Skinners Blog

How Banks Can Stay Relevant in a Changing World (Payments Journal) Rated: AAA

The idea that we don’t care about our finances is counterintuitive. Hot new fintech start-ups and challenger banks are racing to develop apps providing evermore detailed analytics. But to make an impact and deliver real value, Brkic argues that banks need to take a step back and get better at delivering simple services that make a big difference.

Take overdraft charges. A service that alerts the consumer when they are about to go overdrawn and comes up with a solution (such as transferring money from a savings account, or temporarily extending a planned overdraft) is useful because it instantly solves a problem before it arises. For those living pay check to pay check, an avoided overdraft charge is more immediately beneficial than knowing that 10% of income is spent on dining out.

Meet the new bank. Same as the old bank

Advanced algorithms that promote generic, impersonal user experiences should be avoided. To immunise against engineers’ disease, Hammersley contends that inherently human interactions, such as customer service chatbots, should not be left solely in the hands of engineers.

Accessible Data and Artificial Intelligence: Is this the Future of Fintech? (Payments Journal) Rated: A

For organizations faced with the rise in product liability and fraud losses, AI is progressively positioned as a key tech to help robotize instant fraud detection and maximize performance in the near future. In addition, overlooked factors that influence the effectiveness of access data will include:

  • Geographical variances in data
  • Varied risk across products, apps, and channels
  • Accuracy of fraud classification
  • Relatively occurrence of fraud compared to transactions

With the advancements of AI and Accessible Data, we can add in precious metals, international currencies, peer-to-peer lending, identity protection, e-Wallet security, cloud computing access and more into the global payment experience.

Cyber, battery, sports tech win big investments (Isreal 21c) Rated: B

Lending Express of Tel Aviv, San Francisco and New York City, an AI-powered business loan marketplace with more than 55,000 customers in the US and Australia, secured $2.7 million in seed financing.

Millennials and money (Gulf News) Rated: A

Millennials make up about one-fourth of the global population today and are the inheritors of one of the largest inter-generational wealth transfers seen in human history, holding $17 trillion (Dh62.44 trillion) or about 10 per cent of the world’s private wealth. Banks and financial institutions have the challenge of catering to a newer type of customer in a rapidly changing technological environment, blurring boundaries and creating new business paradigms.

For banks, merely building a digital version of a branch is not the answer if your customers have never been to one. As author and futurist Brett King says, a bank is no longer somewhere you go to, it is something you do. Banks that are able to provide anytime, anywhere banking, combining tech and touch intelligently, stand to win.

Australia

How this fintech startup chief facilitated $ 50 million in Australian business loans without stepping foot in the country (Smart Company) Rated: AAA

Business loan marketplace Lending Express launched in Australia in 2016, and since then it’s facilitated $50 million in small business loans. But it was only last month that co-founder and chief executive Eden Amirav first set foot on Australian soil.

Now the Israeli startup has secured $US2.8 million ($3.7 million) in funding, Amirav has plans to further improve the artificial intelligence-enabled platform, and to get his message to even more Aussies.

Using artificial intelligence and machine learning, Lending Express connects small businesses seeking loans with alternative lenders. The business owner fills in an application via the online platform, and Lending Express runs an algorithm, immediately identifying the lenders that would be most likely to approve the loan.

Upcoming IPOs this week (Motley Fool Australia) Rated: A

According to ASX Ltd (ASX: ASX) there is only one IPO this week. That share is:

Prospa Group Limited (ASX: PGL)

Its principal activity is online lending to small businesses.

It’s looking to raise $146.5 million and list on 6 June 2018.

Asia

Fintech in Iran: Challenges and opportunities (Tehran Times) Rated: AAA

According to statistics published by International World Stats (IWS) until December 31, 2017, there are 56,700,000 Internet users in Iran, which is 69.1% of the population.

The internet finance in Iran is now mostly PSP-based, which offers shops online services for accepting electronic payments by a variety of payment methods including credit card and bank-based payments.

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

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

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

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor