Monday July 2 2018, Daily News Digest

Monday July 2 2018, Daily News Digest

News Comments Today’s main news: Zopa is profitable again. Capital One limits access to alt lenders. SimpleNexus raises $20M. Funding Circle changes projected returns. Metro Bank launches digital bank in Australia. Today’s main analysis: Deep dive into Amazon. Today’s thought-provoking articles: Deep dive into Amazon. More Chinese P2P lenders fall under regulatory scrutiny. How blockchain can assist banks with consumer lending. SMBs access […]

Monday July 2 2018, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Capital One restricts third-party data access, upsets customers (Payments Source) Rated: AAA

Capital One Financial Corp. is limiting how account data flows to outside apps for managing finances, prompting a backlash from the bank’s customers who say they have been locked out of their own information.

A technology upgrade led to the disruption, people familiar with the situation said. Plaid Technologies, whose software is used to connect banks with third parties, is unable to link with some Capital One accounts, according to the people, who requested anonymity because they weren’t authorized to speak publicly.

Slightly weak US GDP growth, Amazon Deep-Dive (PeerIQ), Rated: AAA

US Q1 GDP growth was revised slightly lower from 2.2% to 2% driven by lower-than-expected growth in services. This slowdown in growth seems to be temporary as the Atlanta Fed is projecting a blistering 4.5% GDP growth rate for Q2.

Amazon Treading Carefully with Its Financial Services Ambitions

A new report by CB Insights details Amazon’s “barreling into” the financial services sector, notably in payments and lending. Our view on Amazon is more sober.

In the absence of a clear regulatory swim lane, Amazon will continue to partner with financial institutions to provide lending services. The major lending products Amazon offers today are executed with highly regulated banking partners. Amazon for instance has developed co-brand relationships with JPM, Synchrony and AmEx.

Also, Amazon is courting major financial services institutions as customers of its cloud business so the company has a delicate balance that it needs to maintain between disrupting the financial services industry and losing its clients and partners.

Amazon’s Lending Products

Amazon has made a foray into consumer lending mainly with the help of co-branded credit cards. The company has also made ~$3 Bn in small business loans, but that standalone effort has now fallen to the wayside with the new small business lending partnership with AmEx.

Amazon’s international investments in fintech products have been concentrated in India where Amazon will finance commercial loans to Amazon’s sellers. However, unlike the model in the US where Amazon lends on its own balance sheet, Amazon will utilize a marketplace model with six participating banks at the outset. The lending program has grown 150% in the first five months of this year (total volumes are unreported).

Source: CB Insights

Digital Mortgage Platform SimpleNexus Raises $ 20M In Growth Capital (FinSmes) Rate: AAA

SimpleNexus, a Lehi, Utah-based company that brings the home mortgage process to mobile devices through a dynamic digital mortgage platform, raised $20m in growth capital.

Insight Venture Partners made the investment.

The company intends to use the funds to accelerate its continued growth and expansion.

TD Bank Teams Up With Fintech BizEquity to Enhance Commercial Customer Experience (Crowdfund Insider) Rated: A

TD Bank announced on Tuesday it has formed a new partnership with BizEquity to provide its small and mid-size business customers and prospects from Maine to Florida a no-cost comprehensive business valuation through a cutting-edge digital application.

The bank revealed that through its relationship with the Philadelphia-based fintech it now offers a service that typically costs several thousand dollars free of charge to small and mid-size companies. BizEquity delivers a detailed report with valuation information and key industry performance indicators to TD Bank relationship managers, who then share it with the business owner.

Small Businesses Access More Than $ 1 Billion of Working Capital During Non-Banking Hours through Kabbage (PR Web) Rated: A

Kabbage, Inc., a global financial services, technology and data platform serving small businesses, reports its 145,000-plus small business customers accessed over 300,000 loans during non-banking hours, reaching a record total of more than $1 billion in funding. In total, Kabbage has now provided access to more than $5 billion in funding to its customers across America. The non-banking hour analysis illustrates how Kabbage’s fully automated lending solutions remove the age-old hurdle of normal business hours by offering companies 24/7 access to working capital online.

LendingPoint Upsizes its Mezzanine Financing, Bringing it to More Than $ 50 Million (Business Wire) Rated: A

LendingPoint announced it closed an increase of its mezzanine financing, bringing the total of the facility to $52.5 million.

Paragon Outcomes Management LLC provided the financing that closed earlier this month. Paragon and LendingPoint have been building upon a successful relationship started with their first mezzanine credit facility in January 2017 of just $20 million, which was upsized just seven months later, and now has been upsized again to $52.5 million.

Amit Aggarwal: Refining A Real Estate Platform (Think Realty) Rated: A

Amit Aggarwal joined Auction.com as its chief technology officer in late 2017, but the experienced senior information technology (IT) leader had his eye on the needs of the national housing market for more than a decade before the hire. As early as 2005, Aggarwal was watching the residential real estate industry, considering the early signs of what he refers to as “cracks” in the then-booming housing ecosystem and working on a solution. By the time the market melted down in 2007, Aggarwal had been instrumental in the design and implementation of the workflow processes and platforms that served as the underpinning for the foreclosure crisis, including working closely with Fannie Mae and several of the country’s biggest banks and mortgage lenders.

Aggarwal took his passion for purifying and refining technology, processes, and real estate transactions with him when he joined Auction.com. 

Marketplace Lending: 60-Second Market Review and Insights (Credit Chronometer) Rated: AAA

Seven securitizations totaling $4.3 billion closed in Q1 2018, up 34% versus a year ago and representing the second-highest issuance in any quarter (after Q4 2017). Q1 issuances comprised $2.1 billion in student loan ABS, more than double Q1 2017 and the highest ever quarterly issuance of student deals. Total ABS issuance is expected to climb to $18 billion in 2018, up 30% from 2017.

Delinquencies increased in Q1 2018 across the consumer credit space, and reports of an influx of defaults on marketplace loans have prompted online lenders, including Lending Club and Prosper, to tighten their underwriting guidelines. The bright spot has been the student loan sector. The sector, led by SoFi which issued its largest ever student deal in Q1 at $1 billion, has been performing well, driven by refinance loans made to borrowers with strong credit profiles.

Battle for small-business customers spurs arms race at banks (American Banker) Rated: A

Surveys of small-business owners show an increasing level of confidence and commercial-and-industrial lending is up. The Small Business Administration’s 7(a) loan guarantee program seems poised for a fourth consecutive record year.

To capitalize, banks are investing in technology to make faster loan decisions. They are also hiring more lenders to better serve this segment. Now, bankers and other industry observers are hoping it all leads to increased earnings.

A retirement perk for millennials who are buried under student debt (LA Times) Rated: A

A new benefit program at Abbott means she won’t have to choose between paying down student debt and saving for the future. For any U.S.-based employee who puts at least 2% of their salary toward student loan payments, the healthcare company will contribute the equivalent of 5% of their salary into their 401(k) plan.

Abbott’s twist works around the tax penalty, because 401(k) payments are tax-free. Steve Fussell, a human resources vice president at Abbott, says the benefit also helps employees kick off their retirement savings early, which can make a huge difference over several decades of work. Only about a third of millennials are currently contributing to the company’s retirement plan, compared with 90% of the workforce overall.

Lending to Digital Natives: A Map to the Millennial Market (Credit Union Times) Rated: A

Millennials are a major demographic, yet they are not being served by credit unions. Only 32% of millennials are currently using a credit union compared to 50% of baby boomers, according to the Financial Brand.

Time reported the average 2016 college graduate will enter the workforce with $37,172 in student loan debt. They will change jobs four times in their first decade after college and their salaries are 20% lower than those of baby boomers at the same age, according to CNN.

United Kingdom

Zopa back in black (The Times) Rated: AAA

Peer-to-peer lender Zopa scraped back into profit last year, but rising default levels have led it to crack down on who it allows to borrow, writes Rosamund Urwin. The company, which has lent out £3.3bn in total, matches borrowers with investors wanting to lend. It has applied for a banking licence and wants to launch its bank within a year. A float has been pencilled in for 2020.

Funding Circle changes projected returns (Peer2Peer Finance) Rated: A

FUNDING Circle has altered its projected returns, meaning that investors lending across the platform’s full risk spectrum are expected to earn less money and those opting for lower-risk loans could earn more.

The peer-to-peer business lender said on Friday that that its projected returns for its Balanced account – which invests in the full range of businesses across all risk bands – will now be six to seven per cent.

The target rate on the Balanced account had previously been 7.2 per cent.

Meanwhile, Funding Circle’s Conservative account – which only invests in businesses assessed as lower risk – is now offering a projected return ranging between five and 5.5 per cent.

Funding Circle fund warns on dividend as currency costs bite (Citywire) Rated: A

Shares in Funding Circle SME Income (FCIF) fell today after peer-to-peer lending fund said the rising currency costs would force it to cut its dividend.

Shares fell 2.1%, or 3p, to 102p after it reported a ‘material increase’ in the cost of hedging, or removing the impact of the investment company’s holdsin dollar-denominated loans.

As a result the company, which mainly lends to small and medium-sized businesses in the UK, would only be able to pay a fully covered annual dividend of 5p to 6p per share from the third quarter of 2018. This is down from the current annual dividend of 6.5p, a potential decline of 8%-23%.

SHARE PUNT OF THE WEEK: Recent AIM entrant Trufin is a financing business with four divisions (This is Money) Rated: A

Recent AIM entrant Trufin is a financing business with four divisions. DFC lends to firms selling motorbikes, caravans, yachts and industrial kit, areas that mainstream banks may not be willing to touch.

Oxygen Finance helps councils make savings by prompting them to pay suppliers early, and Satago helps smaller businesses manage their cash flow. Lastly, it holds a 15 per cent stake in peer-to-peer lender Zopa.

Trufin is applying for a UK banking licence, which could help lower the company’s funding costs and boost margins. Zopa has also proposed a new funding round, which could increase the value of Trufin’s stake.

Open Banking could be worth £7.2bn by 2022, report shows (London School of Business & Finance) Rated: A

A report from Big Four accountancy firm PwC has predicted that the Open Banking sector could be worth £2.8bn by the end of the year and £7.2bn by 2022.

SMEs were shown to be more aware of the effects of Open Banking than retail customers and are also willing to make use of the data-sharing scheme, with 40% saying that they would share their financial transaction information.

When it comes to what information individuals would be willing to share, just 10% cited transaction history, while 12% said that they would share information about their financial products.

Banks were also found to still be popular with businesses, with 72% favouring them over fintech companies and peer-to-peer lending firms. This was also found to be the case for 65% of individuals.

HEAVYWEIGHT INVESTOR SAYS ‘TOO MUCH MONEY’ THROWN AT TECH (Business Cloud) Rated: A

One of Britain’s most high-profile investors has expressed concerns about “too much money being chucked” at tech businesses in the UK.

Moulton has also been an active tech investor over the last three decades, having backed peer-to-peer lending marketplace Funding Circle “very early on”, and estimates that around 50 of his 120 current investments have a link to technology.

However speaking to BusinessCloud at an investment roundtable in London organised by the Lancashire Investment Readiness Programme, the 67-year-old said the return on investment in technology is is relatively “poor”, particularly in the UK, and fears that it could become worse.

China

More P2P lenders collapse amid tough regulations (Global Times) Rated: AAA

As China has been ramping up efforts to strengthen regulations on the online financial industry, an increasing number of Peer-to-Peer (P2P) lending platforms have found themselves collapsing. As such, experts have warned investors of the perils of illegal financial activities that offer lucrative rewards.

After several P2P firms such as lianbijr.com and txslicai.com.cn were investigated by police in June, another Shanghai-based online lender reportedly collapsed.

Yilongcaifu and its parent company Fuxing Group have been shut down and are under investigation by police, news site stcn.com reported on Thursday.

Another Online Lender Falls Under Investigation (Caixin Global) Rated: A

Another online peer-to-peer (P2P) lender has fallen under investigation on suspicion of illegal fundraising as the crackdown continues on China’s scandal-plagued internet finance industry.

Shanghai police have detained four senior executives of Tangxiaoseng, an online lending platform controlled by Zibang Financial Service Internet Technology Co. Ltd., since police began investigating the platform on June 16, Caixin has learned.

51 Credit Card hits road for $ 174m IPO (Global Capital) Rated: A

51 Credit Card opened books on Friday for its HK$1.4bn ($173.9m) listing in Hong Kong, with 10 firms in the syndicate.The Chinese online peer-to-peer lending platform is offering 118.7m primary shares for HK$8.5 to HK$11.5 each, which could raise between HK$1bn and HK$1.4bn.

Sponsors China Merchants Securities and Citi are leading the trade alongside CLSA, which is a global co-ordinator.

European Union

Belgian Lending Marketplace Look&Fin Partners with Insurer Atradius (Crowdfund Insider) Rated: AAA

Today June 28, Belgium-based SME lending platform Look&Fin announced that it has partnered with credit insurer Atradius to offer a 100% guarantee on the capital lent to SMEs by its retail investors. The move is dramatically closing the gap between marketplace lending and bank lending. SME borrowers will get marketplace loans at lower interest rates, closer to the banks’ and retail investors will enjoy bank-level security for their investment.

Headquartered in the Netherlands, Atradius is the second largest global credit insurance leader with operations in more than 50 countries around the globe and total revenue of more than €1.8 billion.

Azlo and Green Dot Offer New Lending Products for Gig Economy Workers (Bank Innovation) Rated: A

Azlo will begin offering lending services to small businesses and gig economy workers this fall, the company announced last week. The fintech, which is backed by BBVA Compass, will be partnering with an undisclosed “non-traditional lending platform” to originate loans. These loans will range between $10,000 and $100,000, and even less Azlo CEO Brian Hamilton told Bank Innovation.

To determine a borrower’s creditworthiness, Azlo will not be looking at FICO scores. Instead, it will look at data collected from payment tools using APIs connected to platforms like Stripe, Square, and PayPal, in an Azlo account.

Latvia Pushes Fintech Innovation (Inside Bitcoins) Rated: A

Riga-based online lending marketplace Mintos, which just turned an annual profit for the first time, is now looking for global expansion.

Alongside Mintos, some of Latvia’s most well-known fintech startups include peer-to-peer lending marketplace Twino, and micropayment app Monea.

INLOCK to Conduct Poll to Determine the Future of Its ILK Token Model (Tech Bullion) Rated: B

INLOCK(INCOME LOCKER), a blockchain and smart-contract based peer-to-peer lending platform that enables crypto assets to be used as collateral, today announced that it will be hosting a community poll to help inform the development of its ILK token model.

Amidst preparation for the initial token sale and throughout the business screening process, INLOCK found that its token model with fractals created an unnecessary inconvenience for its users, leading to an overwhelming number of requests for a token split.

Spotcap Expands C-Suite As Business Matures (Spotcap) Rated: B

Fintech business lender Spotcap recently expanded its C-Suite to include two newly created roles.

Linh Bergen-Peters joins the company as Chief Marketing Officer and Martin Gawlak as Chief People Officer. These new roles will be instrumental in ensuring Spotcap’s continued growth. The company increased its gross revenue by more than 100 percent between May 2017 and May 2018, and doubled the size of its loan book during the same time period.

Linh Bergen-Peters joins Spotcap from HID Global and will be responsible for Spotcap’s multinational marketing strategy. Linh is a highly experienced global marketer, having held senior roles in leading technology companies such as AMD and Hewlett Packard, building and marketing high-tech brands.

International

Harmonic Fund Services live with Finastra for loan servicing (Finastra) Rated: A

Harmonic Fund Services has gone live with Finastra’s Fusion Loan IQ solution. The independent fund administration and alternative asset fund servicing firm will leverage the platform — traditionally used by banks and increasingly by service providers, to service their bilateral, specialised and syndicated loan portfolios — to provide a new loan administration and agency service to its diverse alternative investment funds client base.

Blockchain can assist banks with consumer lending (Digital Journal) Rated: AAA

The finance sector has been in the lead in terms of implementing blockchain and tokenization. The next area where the technology is likely to be applied is with traditional loans.

The advantage of cryptocurrency assets as collateral lies in the efficiency the digital currency can bring into the entire lending process. For any cryptocurrency asset approved by the lender, blockchain allows for immediate validation of its authenticity, ownership and worth. This should enables anyone to get immediate backing for a loan, provided they have a verifiable means of making repayments.

The types of startups that are making in-roads in the finance space include Ripple, a real-time gross settlement system, currency exchange and remittance network. Ripple is by companies such as UniCredit, UBS and Santander. A second is the Depository Network [DEPO]. This is a multi-platform network enable lenders, including peer-to-peer lending marketplaces, banks, other credit institutions to accept digital assets as collateral.

Bitcoin Millionaires Turn to SALT for Liquidity (BTC Manager) Rated: A

SALT Lending offers a peer-to-peer lending platform that allows cryptocurrency holders to use their Bitcoin and Ethereum as collateral for loans.

A Peer-to-Peer Lending Platform

Dave Carlson, who runs a cryptocurrency mining operation in Washington, has used SALT for this very purpose. With electricity expenses running as high as $250,000 per month, Dave needed $1 million to cover operating expenses for Giga-Watt, his mining operation. However, the potential for a price surge made him reluctant to exchange his cryptocurrency for cash.  He found an alternative in SALT, which The Wall Street Journal has reported is helping Bitcoin millionaires “unleash their fortunes.”

Australia

Metro Bank founder joins digital challengers in Australia (Financial Times) Rated: AAA

Serial banking entrepreneur Anthony Thomson, co-founder of Metro Bank in the UK, is helping to set up a new digital bank in Australia that aims to shake up a market dominated by the Big Four institutions.

The bank, named 86 400 after the number of seconds in a day, is initially being funded by Cuscal, an Australia payment services company.

Asia

The magic of crowdfunding (The Manila Times) Rated: AAA

Here in the Philippines and in many countries around the world, not only is the family the basic unit of society, but it also serves as the primordial foundation for economic activity.

Crowdfunding, through its biggest platform, Kickstarter, proved to be a very effective mode of hosting linkages between entrepreneurs and investors. Since its inception in 2009, Kickstarter has successfully funded 130,000 projects having around $3.76 Billion worth of pledges on all its projects. The huge acceptance and positive reception of these crowdfunding platforms continue to grow. In fact, it is estimated that it will be a $300 Billion industry by the year 2025.

Another type is “Peer-to-Peer Lending” that enable proponents to gain funding outside the traditional banking system through the risk-taking investors who are willing to shed a buck or two towards the growth of their loan portfolios.

Bermuda

Blockchain mortgages, touted for real estate investors, get thumbs-down on security concerns (Financial Post) Rated: AAA

Blockchain advocates have long touted the technology’s ability to disrupt entrenched business models. Now, several companies want to use it for real estate crowdfunding in a bid to circumvent the banks.

Bermuda-based Viva Network wants to exploit the blockchain’s ability to store records and transfer value quickly across international borders.

Targeting Bermuda as its first market, the company would use local mortgage professionals to run “mortgage hubs” that would evaluate and underwrite mortgages. It would divide each mortgage into 100,000 FMS units that could then be listed on the company’s blockchain-based exchange. Investors would purchase an FMS using Viva’s blockchain-based VIVA tokens and would harvest principal and interest payments from the property’s owner each month.

Inventions funded by

Authors:

George Popescu
Allen Taylor

Tuesday May 22 2018 Daily News Digest

GreenSky vs. LendingClub

News Comments Today’s main news: Kabbage to launch payment services. Funding Circle SME Income Fund limited force signal moves past key line. Zopa boosts TruFin results. DEPO launches to help lenders accept digital assets as collateral. Qudian stock drops 16.5%. Today’s main analysis: Deep dive into MFT 2018-2 vs. AVNT 2018-A (A MUST-READ). Today’s thought-provoking articles: Credit score improvement […]

GreenSky vs. LendingClub

News Comments

United States

United Kingdom

European Union

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News Summary

United States

Online lender Kabbage to launch payment services by year-end (Reuters) Rated: AAA

Kabbage Inc, a U.S. online lender for small businesses, plans to launch payment processing services by year-end, President Kathryn Petralia said on Monday, helping it to diversify and compete more directly with industry leaders PayPal Holdings Inc and Square Inc.

The Atlanta-based startup will offer tools to enable clients, mostly brick-and-mortar businesses, to accept card payments in-store and online, Petralia said in an interview.

Deal Deep Dive MFT 2018-2 vs AVNT 2018-A (PeerIQ), Rated: AAA

This week we compare 2 very different MPL personal loan securitizations – Marlette’s MFT 2018-2 Prime deal and Avant’s AVNT 2018-A Near Prime deal.

Collateral Comparison 

AVNT 2018-A has lower average loan size by $6,435, shorter weighted average loan terms by 9 months and higher WAC by 16.28%. This is a reflection of the quality of borrowers that Avant and Marlette target. Marlette’s prime borrowers have higher weighted average FICO scores by 59 points than Avant’s near prime borrowers. The geographic distribution is quite similar between the two deals.

Source: PeerIQ, KBRA

Bond Characteristics and Pricing

The significantly higher WAC on AVNT 2018-A leads to a 14.8% pickup in excess spread. KBRA’s base case loss estimate is 7.4% higher on AVNT 2018-A, which leads to a 7.4% higher loss-adjusted excess spread on AVNT 2018-A.

Source: PeerIQ, KBRA

Capital Structure

AVNT 2018-A has 3.3% lower O/C which is compensated by 14.8% higher excess spread. The A tranches have similar CE in both deals but Marlette’s A is rated one notch higher.

Source: PeerIQ

Avant continues to benefit from tighter underwriting criteria (Asset Securitization Report) Rated: A

The introduction of tighter underwriting criteria continues to pay off for the online consumer lender Avant.

The company, which was founded in 2012 and is based in Chicago, was able to lower the credit enhancement, again, on its latest securitization, the $221.9 million Avant Loans Funding Trust 2018-A.

Kroll Bond Rating Agency assigned an A- to the $149 million senior tranche of notes to be issued, which benefit from 38.42% credit enhancement. That’s down from 41.8% on the comparable tranche of its prior transaction, completed last year.

LendingTree Study Finds More than Half of My LendingTree Users Improved Credit Scores in Majority of 50 Metros Analyzed (PR Newswire) Rated: AAA

LendingTree today released its study on the top places with rising credit scores. With credit scores being a crucial component of personal financial stability and opportunity, LendingTree analysts decided to look at anonymized My LendingTree users who logged into their accounts in both the first quarter of 2017 and the first quarter of 2018 to determine the top metros for rising credit scores among the 50 largest in the United States.

Below are some of the key takeaways from the study.

  • JacksonvilleIndianapolisDenver and Tampa saw the highest rate of rising credit scores among the 50 biggest metros from Q1 2017 to Q1 2018.
  • Virginia Beach, Va.Los Angeles and Birmingham, Ala., had the lowest rate of rising credit scores, with 47 percent of Virginia Beach users raised their credit scores.
  • San Jose (Silicon Valley) saw the most dramatic rises in credit scores, with the highest rates of people who raised their score by more than 75 points and 100 points.
  • In the majority of the 50 metros analyzed, more than 50 percent of users improved their credit scores between Q1 2017 and Q1 2018.
  • About one in three increased their scores by over 20 points, and 3.5 percent were able to improve their scores by 100 points or more.
Source: Lending Tree
Source: Lending Tree

New Fintech IPO Offers Litmus Test for Online Lenders (Wall Street Journal) Rated: AAA

It wasn’t long ago that online lenders were ascendant. More than $3 billion in capital from investors as diverse as Japanese conglomerate SoftBank Group Corp. and celebrity chef David Chang gushed into lending startups in 2015, according to Dow Jones VentureSource. Analysts at Morgan Stanley predicted that year that the nascent industry would account for 10% of all unsecured consumer and small-business loans by 2020.

Investors soured on the sector. Shares of LendingClub, which once had a market value of about $10 billion, are down 77% from their IPO price. Prosper’s valuation was slashed by more than two-thirds in a private fundraising round last year.

Source: The Wall Street Journal

GreenSky said in its IPO filings that it has facilitated more than $12 billion in loans to consumers for home-improvement projects and elective medical procedures.

Part of GreenSky’s advantage comes from its relatively low customer-acquisition costs. LendingClub’s biggest expense is sales and marketing, which last year rose to $229.9 million, equivalent to 40% of revenue.

Source: The Wall Street Journal

 

How to responsibly invest in bitcoin (Bankrate) Rated: A

Recently, Bank of America, Chase, and Citigroup joined Capital One and Discover in banning cardholders from using them to buy cryptocurrencies. Credit cards were one of the most popular payment methods because of their relatively low fees and instant transaction rates, and investors are having to look at other options to make their investments.

Source: Bankrate

You can borrow money from a family member or friend, or you can use a peer-to-peer lending platform like SoFi to leverage funds for Bitcoin investments. However, be cautious when borrowing money for an investment. Interest rates can eliminate any gains you get from the investment, and the risk of losing money in such a volatile market is high.

Is Mulvaney targeting fintech or nonbanks? (Respa News) Rated: A

The acting director also responded to a question about qualified mortgages which has left the industry scratching its head since. Was Mulvaney separating fintech marketplace lending from traditional mortgage lending, or was he drawing a line between depository mortgage and non-depository mortgages?

 

Banking overhaul heading for likely passage in Congress (Yahoo! Finance) Rated: A

Legislation that would ease banking regulations — and modify rules governing credit reports and some consumer loans — is headed for likely passage in Congress any day now.

The bill cleared the Senate in March with some bipartisan support and is expected to be voted on by House lawmakers this week, perhaps as early as Tuesday.

The measure rolls back some of the regulations imposed by the Dodd-Frank Act of 2010. That legislation came on the heels of the financial meltdown that rocked the U.S. economy a decade ago, when risky and unaffordable mortgages contributed to millions of homeowners losing their houses to foreclosure.

Main Street Banks’ New Lending Rivals: Hedge Funds and Private Equity (Wall Street Journal) Rated: A

Main Street banks are feeling squeezed by competition from new rivals: nonbanks like hedge funds and private-equity firms that are elbowing into business loans.

Growth in business lending has picked up recently—it was up 3.3% year over year as of May 9, according to Federal Reserve data released Friday, after falling below 1% earlier this year. But the growth rate is still far below where it’s been in recent years, when loans to businesses grew at a double-digit clip for much of 2014, 2015 and 2016.

Making technology the solution, not the problem, at small banks (American Banker) Rated: A

The board members of R Bank in Round Rock, Texas — who include the Hall of Fame fireballer Nolan Ryan, a co-founder of the bank — hold accounts there, and they, like most other patrons, knew its old technology made for clunky customer service.

So, says president and CEO Steve Stapp, he channeled those irksome experiences into board support for an investment in a systems overhaul at the $455 million-asset bank.

For community banks in highly competitive markets, service with a personal touch can be a differentiator to win and keep customers. But when legacy technology hampers the customer experience, all the cups of coffee in the world won’t help.

 

Vota turns your credit card transactions into recommendations, helps you spot fraud (Tech Crunch) Rated: A

Blippy, which was hyped up to a $46.2 million valuation back in 2010 before the world realized that almost nobody wanted a dedicated network for sharing and viewing each others’ purchases. Well, guess what? Someone’s trying a Blippy-like thing again — this time, in the form of a new app called Vota, which automatically records your credit card purchases and the places you visit so you can share them with friends or family, or view them privately for your own reference.

As a byproduct of this data collection, you may spot credit card fraud or other errant charges, too, or just get a handle on your spending.

Optimal Blue First-to-Market with Pipeline & Lock Management APIs (Business Wire) Rated: B

Optimal Blue is proud to recognize enterprise SaaS digital mortgage solution leader, Capsilon, as its first strategic partner to complete certification with the highly anticipated Pipeline & Lock Management APIs. By debuting these innovative system-to-system API interfaces in the mortgage industry, Optimal Blue has enabled Capsilon’s digital mortgage platform to fully support the creation, management, registration, and locking of first-lien mortgages instantaneously with Optimal Blue. As a result of this advanced integration, a completed application and pre-approval are done in half the time of the traditional back-and-forth processes, empowering loan officers to be more competitive in today’s purchase market and win more business from real estate agents.

Mastercard Unveils Fintech Initiative Aimed at Digital Banking (Banker & Tadesman) Rated: B

The company on Monday announced the creation of Accelerate, a new initiative to drive growth at scale for the fast-evolving fintech industry, reflecting the company’s ongoing commitment to this sector.

Designed to operate alongside its successful Start Path program, Accelerate will broaden Mastercard’s engagement with the payment fintech community including the next generation of digital banks.

United Kingdom

Funding Circle Sme Income Fund Limited Force Signal Moves Past Key Line  (Concordia Review) Rated: AAA

Checking on current RSI levels on shares of Funding Circle Sme Income Fund Limited (FCIF.L), the 14-day RSI is currently standing at 58.31, the 7-day is at 65.97, and the 3-day is resting at 83.22.

Funding Circle Sme Income Fund Limited (FCIF.L) currently has a 14-day Commodity Channel Index (CCI) of 148.41.

Shares of Funding Circle Sme Income Fund Limited (FCIF.L) have a 200-day moving average of 103.52. The 50-day is 104.93, and the 7-day is sitting at 104.82.

 

Zopa stake boosts TruFin annual results (AltFi News) Rated: AAA

TruFin, the AIM listed fintech lender and payments provider, has released its first set of annual results following on from its public listing back in February. The numbers show a 7.67 per cent uptick in its valuation of its stake in p2p lender Zopa in 2017.

TruFin, which says it used an external company to aid the valuation of Zopa, re-valued its holding upwards by £2.6m to £36.5m over the course of the year. The firm, which was spun out of hedge fund Arrowgrass’ fintech holdings, holds a c.15 per cent stake in Zopa bought by Arrowgrass in 2014 for £15m. TruFin was set up by Henry Kenner, one of the founders of Arrowgrass, who is also its CEO and chairman. The hedge fund itself was launched by a group of Deutsche Bank traders in the wake of the financial crisis, including Kenner.

UK watchdog says automated financial advice falls short (Rueters) Rated: A

Advice doled out online or via smartphone apps, referred to in the industry as “robo advice”, aims to cut costs for customers looking to save or invest. It also seeks to foster innovation and increase competition in financial services.

But the Financial Conduct Authority (FCA) said two reviews of the industry uncovered problems among early entrants.

Exclusive: Former ADS Securities exec Jamieson Blake joins specialty lender Basset and Gold (Leaprate) Rated: B

Following our exclusive report from earlier this month that Jamieson Blake, Head of Client Experience at the FCA regulated London based arm of ADS Securities, had resigned from the company, LeapRate has now learned that Mr. Blake has landed – at specialty lending and retail investment firm Basset and Gold, as Head of Relationship Management.

China

Why Qudian Inc Stock Dropped 16.5% Today (Motley Fool) Rated: AAA

Shares of Qudian (NYSE:QD) closed down 16.5% on Monday after the Chinese online lender announced earnings that fell short of expectations.

Qudian reported “diluted adjusted net income per share” of $0.16 but GAAP diluted net income per share of only $0.15 per share. Whichever yardstick you use, though, these numbers appear to be lower than the $0.17-per-share estimate quoted on Yahoo! Finance. Revenue, on the other hand, came in at $273.7 million, significantly above consensus expectations for $214.6 million.

European Union

European Company Helps Turning Cryptocurrency into Collateral (the Merkle) Rated: AAA

Following a similar model as traditional depository services, DEPO gives lenders the freedom to accept digital assets as loan collateral. The platform also allows borrowers to keep ownership of their digital asset during the entire loan period.  The platform also protects future financial gain of the asset for borrowers with its decentralized design.

By employing the DEPO platform, lenders will be able to accept cryptocurrency as collateral for loans. To be protected, lenders can request additional collateral, or a partial sale of the asset should the market become excessively volatile at any time during the loan period.

Matthias Setzer of PayU (Lend Academy) Rated: A

In this podcast you will learn:

  • The history of Naspers, the parent company of PayU.
  • What PayU does and the markets where it operates.
  • Why Matthias decided to leave PayPal after 12 years and move to PayU.
  • How PayU approaches going into a new international market.
  • The Naspers investment in Chinese giant Tencent and the PayU footprint in China.
  • Why the number one country PayU is focused on today is India.
  • Why they invested €110 million in Kreditech and how they are leveraging that partnership.
  • The point of sale lending product they have launched in India with Kreditech.
  • The biggest growth drivers for PayU over the next 12-18 months.

New Insight will change the way you think about data (Instantor Email) Rated: A

Today Instantor, the Swedish fintech company making financial decisions easy, announces Insight. A new product that will transform the way financial organisations assess risk for loan applicants. By using robust machine learning, Insight analyses more than 70 predictive features and insightful patterns in historical banking, and can be used to make better risk and opportunity decisions. Instead of having a risk team spending months testing risk models, Insight ́s intelligent features will build the most optimal risk model using the clients own data and can be up and running within a week.

Bricknode and Lendytech unite under Untie Group banner (Finextra) Rated: B

Untie Group used to be several companies, the largest of which were Bricknode and Lendytech. They had a common founder in Stefan Willebrand and used, at least to a degree, the same self developed software. Also a number of people have gone from one firm to the other over the years.

International

Decentralized Lending Promises Easy And Global Access To Credit, But Is It Too Good To Be True? (Forbes) Rated: AAA

Since the rise of cryptocurrencies, the term “decentralized” seems to be everywhere. Decentralization has been proposed in many industries as a way to heighten transparency and make transactions simpler. One field in particular which has shown great potential for the application of decentralization is money lending. As many might rightly ask, don’t we need banks who are willing to take the financial risk and approve loans? As it turns out, maybe we don’t.

For lenders, the use of smart contracts allows for much easier assessments of the counter-party’s trustworthiness. Something that would take traditional audits weeks, not to mention the costs of such a traditional audit. Validating transactions and follow-up can become fully automated. Collateral is automatically returned at the end of the loan period or liquidated if the loan is defaulted on, removing many of the time-consuming actions that come with it.

Automation, ‘platformisation’ tipped to take hold in banking (AltFi News) Rated: A

The report, entitled Whose customer are you? The reality of digital banking, shows that 73 per cent of bankers believe retail banking will be at least 80 per cent automated in the next two years. A further 78 per cent see ‘platformisation’ steering the market in the future.

71 per cent of respondents are focusing their digital investment budget on cyber security, up from 34 per cent last year. Yet a mere 17 per cent are thinking about the risks of third-party integrations under Open Banking.

Fin-tech changes the loan process: Meet new lending models (Bankless Times) Rated: A

The new FinTech lending model opens new opportunities to people who were not able to borrow from traditional banks and other financial institutions because of the poor credit history and other factors. Such loans are now available to the new groups of people who need an instant funding, for instance, small business owners, students etc. In particular, entrepreneurs got a chance to get a loan without collateral, which a while ago was a real obstacle for many business owners.

Millennials Choose FinTech

Millenials are the first generation to accept the real advantages of new technologies and ready to use them for their own convenience. When it comes to lending process, millennials no longer wish to visit bank branches personally, stand in lines, deal with unnecessary paperwork and wait for months to get the approval.

End of the Line…

Today we are already witnessing a drastic change in the lending model that existed for centuries. Consumers want to have a more flexible way to lend money but most importantly, they want this process to be quick. The FinTech industry already gave us this opportunity and hopefully, the following changes will be for the better.

 

Asia

Kieran Arasaratnam to Join Credify Founding Team as CFO (Digital Journal) Rated: B

Credify Inc., a pioneer in decentralised reputation systems, is pleased to announce that Kieran Arasaratnam is joining the founding team as Chief Financial Officer.

Authors:

George Popescu
Allen Taylor

Wednesday February 14 2018, Daily News Digest

OnDeck gross revenue

News Comments Today’s main news: OnDeck becomes profitable. NepFin launches first online commercial lending platform for U.S. market. MoneyLion has 2 million customers. Sequoia China leads $40M DataVisor Series C. Moody’s reviews CommonBond for upgrade. Today’s main analysis: Review of OnDeck Q4 2017 earnings results. Today’s thought-provoking articles: The Future of Lending. Is investing RateSetter Isa worth it? Genie ICO: The […]

OnDeck gross revenue

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

OnDeck swings to profit, eyes second bank partnership (American Banker), Rated: AAA

The New York-based small-business lender recorded net income of $5.1 million in the quarter that ended Dec. 31, which compared with a $35.9 million loss in the fourth quarter of 2016.

OnDeck, which has recorded $94.5 million losses over the last two years, is cutting costs in an effort to achieve profitability.

Review of OnDeck Q4 2017 Earnings Results (Lend Academy), Rated: AAA

In the fourth quarter they generated $5 million of GAAP profit. To put this in perspective, this is $41 million better than the prior year period. This puts them on solid footing as they look towards priorities for 2018. Originations for the quarter were $546 million, up 3% from the prior quarter.

Source: Lend Academy

Gross revenue came in at $87.7 million, up 7% year over year. Gain on sale revenue or revenue from loans sold on OnDeck’s marketplace to investors totaled $0.6 million. Other income totaled $3.5 million, up slightly from $3.4 million in the previous quarter.

Source: Lend Academy
Source: Lend Academy

Full Year 2018

  • Gross revenue between $370 million and $382 million.
  • GAAP Net income (loss) attributable to OnDeck between $(2) million and $10 million.
  • Adjusted Net income between $16 million and $28 million.

First Quarter 2018

  • Gross revenue between $86 million and $90 million.
  • GAAP Net income (loss) attributable to OnDeck between $(5.5) million and $(1.5) million.
  • Adjusted Net income between $1 million and $5 million.

OnDeck Flips To Profitability Much To The Market’s Delight (PYMNTS), Rated: A

Originations were up 3 percent over the previous quarter to $546 million.

Loans sold or designated as held for sale through OnDeck Marketplace represented 3.9 percent of term loan originations. Provision for loan losses was $34.4 million and the Provision Rate was 6.4 percent, down from Q3’s 7.5 percent.

Gross revenue increased to $87.7 million, up 7 percent year-over-year, while net revenue was $42.1 million, up 159 percent year-on-year.

The cost of funds rate was 6.5 percent, which was a slight increase over Q3. OnDeck noted that figure will likely continue to tick up during 2018, as the Fed is forecast to keep raising short-term interest rates.

Online lender OnDeck’s profit beats on lower costs, shares soar (Reuters), Rated: B

Shares of OnDeck Capital Inc (ONDK.N) soared on Tuesday after the online lender reported better-than-expected quarterly profit as it set aside less money for bad loans, and managed to keep costs lower.

NepFin Launches First Online Commercial Lending Platform for -Trillion U.S. Market (Digital Journal), Rated: AAA

Neptune Financial Inc., or NepFin, a financial services firm, announced today that it has launched the first online commercial lending platform for mid-sized U.S. businesses, creating a new source of credit as well as business software solutions for a large, thriving sector of the economy whose borrowing options are limited.

NepFin also announced that it has raised a $10-million Series A round led by Sands Capital Ventures with participation from its existing investors. Michael Raab, Partner at Sands Capital, will join NepFin’s board, which already includes Third Point’s David Bonanno, currently a board member of SoFi, as well as Robert Schwartz, Managing Partner at Third Point Ventures. This round brings NepFin’s total capital raised to $13 million.

NepFin, whose platform has digital solutions built from the team’s years of experience in online lending and traditional finance, says that its focus is on one of the most underserved sectors of the broader U.S. economy – businesses with between $10 million and $100 million in revenue. NepFin provides loans of up to $60 million.

LendingClub at the Watermark Conference for Women (LendingClub), Rated: A

LendingClub is excited and proud to be a sponsor of the Watermark Conference for Women being held on February 23rd in San Jose, California. As part of the agenda, two of our Client Advisors from the Business Loans team, Mana and Somie, will be leading roundtable discussions with women entrepreneurs on the core elements to consider when exploring small business financing options.

Forbes Fintech 50 2018: The Future Of Lending (Forbes), Rated: AAA

Affirm, San Francisco

Makes instant three, six and 12 month loans for purchases from 1,500 online merchants. A handful of sellers subsidize 0% rates, but most loans carry annual interest rates of 10% to 30%.

Bona fides: More than 1 million loans issued. Partners include Wayfair and Expedia.

Better Mortgage

Digital-only mortgage originator estimates the loan an applicant qualifies for within three minutes using stated income and a credit score check.

Bona fides: Fannie Mae and five of nation’s six largest banks buy its loans.

Blend

Speeds up the mortgage approval process at the nation’s largest lenders with its cloud based white label software.

Bona fides: Wells Fargo and U.S. Bancorp are already onboard

CommonBond

Online lender refinances and finances undergraduate and graduate student loans.

Bona fidesCommonBond has made $1.5 billion in loans, but says just two have gone into default.

GreenSky

Provides on-the-spot financing for home improvement projects (with loans up to $65,000) via a network of contractors and bank partners — without itself taking on the risk of defaults. Most borrowers don’t pay a dime in interest thanks to zero-interest promotional periods that last from 6 to 60 months. Recently began offering financing at doctor, dentist and veterinary offices.

Bona fides: Has facilitated over $10 billion in loans

Kabbage

Lending platform offers nearly instantaneous small business loans. Uses creative alternative data to underwrite loans–such as the number of UPS packages a business sends and receives over time.

Bona fides: Over $4 billion in originations to 130,000 small businesses

LendingHome

Four year-old online lender started out providing bridge loans to fix and flip housing investors, a historically underserved segment. With original product now available in 25 states, LendingHome has expanded into personal mortgages in 14.

Bona fides: $2 billion in loans made; 10,000 homes financed

Tala

Approves developing-world borrowers who lack a credit history for micro-loans of between $10 and $500 by crunching 10,000 data points—from financial transactions to mobile games played—from an applicant’s smartphone.

Bona fidesHas made more than 4.5 million loans, with a repayment rate above 90%.

Upstart, San Carlos, CA

Uses alternative data such as education, employment history and whether applicants know their own credit score to underwrite and price loans. After five years of training its algorithms, it now approves 47% of loans without human intervention and with some of the lowest default rates in the industry.

Bona fides: $1.5 billion in loans originated to 120,000 borrowers

MoneyLion Reaches 2 Million Customer Milestone As Growth Accelerates (BusinessWire), Rated: AAA

MoneyLion, the digital personal finance platform for the financial middle class, today announced that it now empowers over 2 million customers to better their borrowing, saving and investing through personalized, AI-driven solutions. The growth of MoneyLion’s community is a reflection of the positive financial outcomes its customers have achieved and the platform’s unique approach to money management for everyday Americans.

The momentum behind MoneyLion’s customer growth follows a number of recent milestones for the company, including:

  • The December launch of MoneyLion Plus, a first-of-its-kind membership that combines guided savings, simple investing, access to low-cost loans, and personalized daily financial tips to help consumers build their credit, financial resilience, and first $2,000 in savings. MoneyLion Plus has democratized access to private banking-like services typically reserved for high net worth consumers, providing an opportunity for first-time investors to begin building wealth.
  • Completion of a successful $42 million Series B equity round in January, bringing MoneyLion’s total funds raised to $67 million. This financing accelerates MoneyLion’s continued development of innovative, inclusive financial products and services for America’s financial middle class.

Student lending platform on review for ratings boost (AltFi), Rated: AAA

Moody’s puts six tranches issued by CommonBond on review for upgrade.

Moody’s Investor Services has placed six tranches issued by CommonBond Student Loan Trust 2016-B, 2017-A-GS and 2017-B-GS on review for upgrade. The tranches are comprised of loans to students, and $488m of asset backed securities are affected by the review.

Dwolla Lands $ 12 Million (Finovate), Rated: A

In a short, three-sentence blog post, Dwolla CEO Ben Milne announced that the company closed a $12 million round of funding. The investment, which brings the Iowa-based company’s total to $51.4 million, was led by Foundry Group with participation from Union Square Ventures, Next Level Ventures, Ludlow Ventures, High Alpha, and Firebrand– all existing investors.

Fortress Balance Sheet: Goldman Sachs’ Online Lender Marcus Has Access to $ 17 Billion in Deposits (Crowdfund Insider), Rated: A

But today, Blankfein shared that Marcus now has access to over $17 billion in deposits representing a huge amount of credit firepower at an unbeatable cost to lend.

In a savvy move, Goldman acquired GE Capital’s retail deposits prior to launching Marcus. Since the acquisition, these deposits have grown an impressive 90%.

Secured Lender BlockFi Secures $ 1.55M Funding to Build Cryptoasset Ecosystem (Crowdfund Insider), Rated: A

BlockFi, a New York-based non-bank lender that offers USD loans to cryptoasset owners, announced a $1.55 million raise from ConsenSys Ventures, Kenetic Capital, PJC, SoFi,  Purple Arch Ventures and Lumenary. The new capital injection will be used to bridge the gap between traditional debt capital markets and the cryptoasset ecosystem.

Five credit unions sign with new text messaging platform in January to enhance lending and operations (CUInsights), Rated: A

Shastic, a SaaS company specializing in banking-specific technology services, has signed on five new customers in the first month of 2018. The recent growth follows the fintech company’s early launch of Elle, the conversational text messaging platform built for credit unions. Elle is an expansion of their automation services to deliver efficient, real-time message communication between a credit unions and their members.

Data-sharing spec revised to encourage open banking (American Banker), Rated: A

The Financial Services Information Sharing and Analysis Center announced Tuesday an attempt to move the ball forward on data sharing and open banking in the U.S.

The FS-ISAC on Tuesday released a new version of its technical recommendations for data sharing, the Durable Data API specification. This could become the standard banks and third parties adopt for PSD2-style data sharing and open banking. In fact, the new standard meets all of PSD2’s requirements, according to the security data-sharing organization. (However, PSD2 also requires third parties to register and agree to be overseen by a regulator, something unlikely to happen here.)

What We Talk About When We Talk About Finances (With Alexa) (PYMNTS), Rated: A

As anyone who has used an Alexa skill might know, the movement toward conversational finance, or financial conversations, is a tricky one, as specific instructions or questions (okay, they are commands, really) have traditionally been needed to spur the assistant to retrieve information.

To that end, USAA has sought to bring a natural cadence and flow to the conversation, one that builds, and built, on its experience in the PYMNTS Voice Challenge last year.

In play for customer data, TD Ameritrade rolls out Twitter trading bot (Tearsheet), Rated: B

The brokerage firm released a Twitter bot Thursday, allowing stock investors to execute trades, get market updates and browse educational content through direct messages. For the brokerage, encouraging traders who use Twitter to transact will give it, the hope is, a rich source of user data to offer personalized customer experiences and product recommendations.

Millennial entrepreneur strives to provide affordable financial advice to all (NewsOK), Rated: A

How to go about repairing your credit, reducing your student loan debt or obtaining the best mortgage loan now is available to you through a locally produced app.

The answers are among the widespread financial advice available to consumers nationwide through a new app called Coinmast launched by an Oklahoma City-based millennial entrepreneur.

At $11 a call, the tech startup offers such help from certified financial counselors, certified financial planners and certified public accountants whom Haller contracts nationwide. Experts, he said, offer advice on almost anything, excluding on individual securities, insurance and taxes.

Robo advice app Stash raises .5m Series D, releases investing for kids (AltFi), Rated: A

US-based micro investments app Stash has announced a $37.5m raise in Series D funding, led by Union Square Ventures. Existing investors Breyer Capital, Coatue Management, Entree Capital, as well as fintech familiars Goodwater Capital and Valar Ventures, also joined in on the round.

My Financial Advisor is a Robot (Direct Industry), Rated: A

Fintech company Moneyfarm uses cutting-edge technology as well as human financial expertise to help make investing simple, easy and cost-effective. The company also invests in artificial intelligence and machine learning and recently bought AI-driven chatbot Ernest. 

DirectIndustry e-magazine: What is the technology behind it?

Paolo Galvani: We use technology to match investors with investment portfolios that are specifically built for their investor profiles. Each new customer completes a survey during the sign-up process. The algorithms we have developed in-house match each investor to an investor profile that reflects their tolerance for risk. Investors are then paired with a portfoliothat is specifically built and managed by our team of investment experts to reflect the customer’s investor profile.

LPL rolls out robo-adviser to regional bank (InvesmentNews), Rated: A

Webster Bank, a $26.4 billion financial institution with branches in Connecticut, Rhode Island, Massachusetts and New York, announced that it would start offering access to Guided Wealth Portfolios, a digital advice platform developed by LPL Financial and BlackRock Inc.‘s FutureAdvisor.

Interest Doesn’t Always Bring Adoption of Robo-Adviser Tech (PlanAdviser), Rated: A

A new report published by Cerulli Associates examines the growth trajectory of the digital financial advice market that has occurred since 2015, finding there remains a clear inverse relationship between an investor’s age and their willingness to engage with purely digital financial advice platforms.

Scott Smith, director at Cerulli, notes that as of the third quarter of 2017, there is “greater openness to digital advice relationships, but a strongly negative correlation between age and interest remains.”

Cetera Financial Group Enhance Delivery of Advice-Centric Experience for Financial Advisors, Clients (PR Newswire), Rated: B

Cetera Financial Group (“Cetera”)*, a network of independent firms supporting the delivery of professional financial advice, today announced that the six firms comprising its network will be organized under its newly-created Traditional and Specialty Channels. The formation of these two channels is expected to accelerate the ability of each network firm to support Cetera’s Advice-Centric Experience for advisors and clients, which envisions a financial advice profession driven by goals-based planning and solutions that help clients achieve more predictable outcomes on their journey to financial well-being.

Looking for Credit Union Student Loans? Here’s How to Find and Apply for Them (Student Loan Hero), Rated: B

MyCreditUnion.gov provides a map that makes it easy to locate credit unions in your area. Input your address to find a list of credit unions, directions to each location, and available member services. You can then contact local credit unions to find out about membership requirements and student loan options.

One of the best ways to research your options is to use LendKey. LendKey offers easy access to hundreds of different credit unions and community banks that provide private student loans.

You have the option of applying directly through a credit union that allows people to join from anywhere in the United States. Some examples of credit unions open to individuals nationwide include Alliant Credit UnionDigital Federal Credit Union, and First Tech Federal Credit Union.

United Kingdom

New Isa from RateSetter offers 6% return: is it worth investing? (Which?), Rated: AAA

With the new product form RateSetter, you could earn 3-6% interest on your investment, depending on how long you lock your money away.

RateSetter’s Innovative finance Isa allows you to invest up to £20,000 in a tax year.

It is a flexible Isa product, meaning you can withdraw money and replace it without using up your £20,000 tax-free savings allowance.

Say, for example, you put £10,000 into your innovative finance Isa and then withdrew £5,000. Under the rules, you could still deposit £15,000 without incurring tax.

The shortest duration investment rolls over monthly with an interest rate of 3.1%. The longest is a five-year investment, which currently has an interest rate of 5.8%.

Money goes to… Minimum investment Projected rate
Abundance Green energy projects £5 6-9% over lifetime of investment (3-5 years)
Advancr Public and private businesses £1,000 5-6% depending on length of bond
Basset & Gold Fixed income bonds £1,000 3-7% depending on product
CapitalRise Property development projects £1,000 10% or more depending on the project
Crowd2Fund Businesses £10 9%
Crowd for Angels Crowd bonds funding small businesses £25, but companies can increase that 12%
Crowdstacker Businesses £500, but set by borrowers 5-7%
Downing Crowd Fixed-term bonds for small businesses £100 4-7%
Folk2Folk Asset-backed loans to small, mostly rural businesses £20,000 5.5-6.5% depending on product
Funding Circle* Businesses £1,000 4.8-7.5% depending on selected risk level
FundingSecure Asset-backed sub-prime loans to individuals £25 Up to 16%
Goji P2P Consumer, business and property loans £5,000 5%
HNW Lending Asset-backed loans to individuals and businesses £10,000 6-15% depending on term and risk
Kuflink Property loans £100 5%
LandlordInvest Asset-backed loans to landlords £100 5-12%
Landbay Buy-to-let mortgages £5,000 4%
LendingCrowd Business loans £1,000 6%
Lending Works Individuals £10 3-5% depending on term
Money&Co. Businesses £100 8%
Mongoose Crowd Community energy projects £100-200, but can vary by project 4-7%
Property Crowd Commercial and residential developments £5,000 10%
Proplend Property of varying types £1,000 5-12%
Ratesetter Businesses, individuals and property developers £10 3-6% depending on product
Rebuildingsociety Small and medium-sized businesses £10 9.7%
Relendex Commercial and residential property loans £500 10%
UK Bond Network Businesses £5,000 11%
Zopa** Individuals £1,000 4-4.6% dep

Fintech group TruFin raises £70m (Finextra), Rated: A

TruFin, a British fintech and banking business with fingers in various niche lending pies, has raised £70 million through a listing on the LSE’s AIM market.

LendInvest unveils product transition process (BestAdvice), Rated: A

The Product Transition process allows existing borrowers to transfer between specialised loans that are tailored to support them at each stage in their development project.

Lendy returns £2.1m loan repayment from luxury property in Chelsea (Mortgage Introducer), Rated: A

Peer-to-peer lending platform Lendy returned a £2.1m loan repayment to P2P investors from a luxury apartment in Chelsea, on an investment made through Lendy.

Lendy appoints new head of finance (Bridging&Commercial), Rated: B

Andrew Wawrzyniak has joined the peer-to-peer lending platform from Fund Partners, a fund manager whose clients include Octopus Investments, Pictet Asset Management and Russell Investments.

China

Sequoia China leads $ 40M DataVisor Series C (Bankless Times), Rated: AAA

DataVisor, a provider of fraud detection solutions using unsupervised machine learning, today announced a $40 million Series C round of financing led by Sequoia China, with participation from existing investors New Enterprise Associates and GSR Ventures.

Rock Wang, managing director at Sequoia China, will join DataVisor’s board of directors. With this new round of financing, DataVisor will expand its global footprint in the fraud detection and prevention market, which is estimated to reach $41.6 billion by year 2022 according to research firm MarketsandMarkets.

European Union

Swedish Online Payments Company Klarna Shuts Down Tel Aviv Development Center (CTech), Rated: AAA

Swedish online payments company Klarna Bank AB (publ) will be shutting down its Tel Aviv development center during the next few months, the company announced Tuesday. All 31 of its employees in Tel Aviv were offered the opportunity to remain with the company and relocate to one of its Swedish or German offices.

Banco BNI Europa to invest with CrossLend (Finextra), Rated: A

Banco BNI Europa and CrossLend have launched a cooperation whereby Banco BNI Europa invests into notes issued by CrossLend Securities SA.

International

Barclays faces new charge, Triodos innovates and outlook for Citizens Bank in the US (Financial Times), Rated: A

Martin Arnold and guests discuss the latest charges against Barclays, Bevis Watts of the ethically-focused bank Triodos talks about his new UK peer-to-peer lending model and Bruce van Saun explains what US rate rises will mean for Citizens Bank.


 

Australia

DirectMoney Secures New Strategic Investment From Alceon For Growth & Innovation Initiatives (Crowdfund Insider), Rated: AAA

Australian marketplace lending platform DirectMoney announced on Tuesday it secured a strategic investment from alternative investment manager Alceon to fund growth and innovation initiatives.

According to DirectMoney, the investment will be structured through an initial placement of $600,000 at $0.042 per share (being 14,285,715 new shares), a 56% premium to the price at close of trading on February 9th and equivalent to a 3.1% shareholding.

India

Why just rent when RentoMojo also gives you the option of renting and owning (YourStory), Rated: AAA

Online rental and financing marketplace RentoMojo, which lets consumers in eight cities lease furniture, two-wheelers and home appliances, has launched an additional  rent-to-own model. 

PE AND VC OPPORTUNITIES IN 21ST CENTURY INDIA (AllAboutAlpha), Rated: AAA

ARA Law, a firm based in Mumbai and Bangalore, India, has issued a paper on private equity and venture capital in that country.

The main text of the paper begins with sectoral analysis and market behavior. PE and VC investments in India declined in the early months of 2017, but they had started to pick up already before the end of the first quarter and in the third quarter investments by such vehicles “surprised the market with a tremendous jump in deal volume as well as value.”

In August of that year the deal value reached US$5 billion. The third quarter as a whole saw 129 deals of value greater than US$100 million, aggregating to about US$7 billion.

The most lucrative sector last year was e-Commerce, “in spite of the sharp fall in investments by the end of AY 2016,” followed by real estate. In the 3d quarter, e-Commerce recorded roughly US$2.6 billion in deals across 18 deals. Real estate?  US$2.3 billion across 13 deals. Banking and Financial Services? Third place in the league table with US $1.4 billion across 25 deals.

MoneyOnMobile Raises $ 5 Mn Funding From S7 Group (Inc42), Rated: A

Mumbai-based fintech startup MoneyOnMobile has raised $5 Mn in Series H funding from Russia-based private aviation and aerospace holding company S7 Group. The development comes just two weeks after the startup secured $7.6 Mn Series F funding from undisclosed investors.

Asia

Genie ICO: A Blockchain Network For Decentralized Business Loans (Global Coin Report), Rated: AAA

Genie was created to provide individuals based in Asia with a unique way to borrow and lend money for their business using a peer-to-peer system that is based on a blockchain network. The Genie ICO has been created by an experienced team after observing the rapidly changing Asian financial landscape ever since cryptocurrencies, ICOs, and blockchain technology grew to prominence in 2017.

The platform will also have its very own token Crowd Genie Coin (CGC) which will be generated via an ICO. There will be a limited supply of 120,000,000 tokens available. Of this amount, only 50 million will be available for purchase during the token sale. The rest of the tokens will be used for facilitating transactions on the platform, will be given to the founders, used for distribution, etc. All tokens that are not bought during the token sale, however, will be destroyed to increase the value of a single CGC.

The Genie team hopes to raise a total of $35,000,000 throughout the ICO and the value of 400 CGC tokens has been estimated to be of equal value of 1 ether, which at the time of writing equates to $858. This means that a single CGC is worth $2.15. However, the interested investor can invest a minimum of 0.1, which will attract a wide variety of investors.

Authors:

George Popescu
Allen Tayl

Thursday February 8 2018, Daily News Digest

LendingTree personal loans

News Comments Today’s main news: RateSetter’s IFISA finally arrives. Renaud Laplanche to keynote at LendItFintech USA 2018. LendingClub makes changes to IRA product. Goldman could be buying Clarity. Today’s main analysis: LendingTree January 2018 Personal Loan Offers Report. LendingTree January 2018 Mortgage Offers Report. Today’s thought-provoking articles: Amsterdam gaining ground on London as Europe’s fintech capital. Senmiao Technologies sets terms […]

LendingTree personal loans

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

MENA

Canada

Bermuda

News Summary

United States

Renaud Laplanche Joins LendItFintech USA 2018 As Keynote Speaker (PR Newswire), Rated: AAA

LendItFintech, the world’s leading event in financial services innovation, today announced that Renaud Laplanche, founder and CEO of Upgrade, Inc., will join the keynote speaker roster for LendItFintech USA 2018. For three days, the world’s most prominent and emerging fintech CEO’s will gather at the Moscone Center to focus on the hot button topics and issues exploring the future of finance.

Laplanche’s keynote speech will focus on his vision for Online Lending 2.0 and in particular how new technology, blockchain, enhanced processes and the combined learnings of the past 10 years have helped make online lending better for consumers and investors alike.

Laplanche will also unveil Upgrade’s next major consumer credit product that industry observers are already touting “the biggest innovation in financial services since the credit card. Also, to illustrate how the Online Lending 2.0 principles help create more value for consumers and enable faster growth while achieving better risk management, compliance and credit performance, Laplanche for the first time, will release metrics about Upgrade exactly one year after its public launch.

Tax Efficient Investing and LendingClub IRA Changes (Lend Academy), Rated: AAA

Tax rates for 2018 start at 10% and go up to 37% for the highest wage earners. It’s important to understand how this ordinary income affects taxes compared to other asset classes like equities.

Let’s assume you decide to invest through a taxable LendingClub account. In a given tax year, you are only allowed to deduct $3,000 in losses against your ordinary income unless you have capital gains to offset the losses.

If you have a sizable investment in LendingClub and have no capital gains you’ll have to carry forward any losses beyond the $3,000 to future years.

LendingClub Offering a Bonus for IRA Investors

After understanding the benefits of investing through an IRA it’s worth mentioning that LendingClub offers bonuses for new accounts. The bonuses range from $25 all of the way up to $3,000 and are available on Traditional IRAs, Roth IRAs, SEP IRAs or SIMPLE IRAs. Below are the bonus amounts in place for 2018.

TaxSlayer Teams Up With Kabbage To Provide Small Businesses Easy Access To Working Capital (PR Newswire), Rated: A

TaxSlayer, a leading online and professional tax and financial technology company, today announced a strategic partnership with Kabbage, Inc., a global technology and data platform powering small business lending. The collaboration offers qualified small business customers hassle-free access to lines of credit up to $250,000 from Kabbage, and exclusive tax resources, including tips, promotions and discounts from TaxSlayer.

TaxSlayer customers will have access to:

  • Lines of credit from Kabbage up to $250,000 for qualified borrowers
  • Promotions from Kabbage, including a $100 gift card after qualification
  • Partner offers through the Kabbage Customer Perks network
  • Tips and insight on small business lending and finance

Kabbage customers will have access to:

  • Small business and personal tax tips from TaxSlayer
  • Market leading tax-filing support from TaxSlayer
  • Unique promotions and discounts from TaxSlayer, including 20 percent off services

LendingTree Personal Loan Offers Report (LendingTree), Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.41% in January.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.41%, a decrease of 13 basis points from the prior month, and 47 basis points from the same period one year ago.
  • At $24,218, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above, was down up 17 basis points ($41) from December, but up over 23% ($5,607) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had APRs of 4.98% on average, and loan amounts of $34,892. A borrower with this APR and loan amount would save $2,896 by consolidating debt with a 10% APR over a three-year term.
Source: LendingTree

Good credit (680 – 719 score): Offered APRs to consumers with a credit score between 680 and 719 averaged 15.79% in January.

  • The average best APR for all borrowers with credit scores of 680 – 719 was 15.79%, down 12 basis points from last month, but up almost 200 basis points from a year earlier.
  • At $15,628, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs increase by 1% ($160) in the last month, but drop by 1.72% ($268) from January 2017.
  • The top 10% of offers, presented to borrowers with the best profiles within the 680 – 719 credit score range, had an average best APR of 7.19%, offered with an average loan amount of $24,130. A borrower with this APR and loan amount would save $3,215 by consolidating debt from a 15% APR over a three-year term.
Source: LendingTree

LendingTree Mortgage Offers Report (LendingTree), Rated: AAA

  • January’s best offers for borrowers with the best profiles had an average APR of 3.93% for conforming 30-year fixed purchase loans, up from 3.80% in December. Refinance loan offers were up 5 bps to 3.75%.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 13 bps to 4.55%. The loan note rate hit the highest since March 2016 at 4.45% and was also up 13 bps from December.
  • Consumers with the highest credit scores (760+) saw offered APRs of 4.41% in January, vs 4.70% for consumers with scores of 680-719. The APR spread of 29 bps between these score ranges was 1 bps narrower than in December but still near the widest since this data series began in April 2016. The spread represents nearly $15,000 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $238,518.
  • Refinance APRs for conforming 30-yr fixed loans were up 15 bps to 4.46%. The credit score bracket spread widened to 25 from 24 bps, amounting to $13,000 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $244,540.
  • Average proposed purchase down payments fell for the first time in 8 months to $63,411.
Source: LendingTree

Apple May use Marcus for Point of Sale Financing (Crowdfund Insider), Rated: A

Indicative of this systemic trend is a report this week in WSJ.com saying Apple may be cutting a deal with Marcus – Goldman Sachs’ vision of the future on online lending.

According to the WSJ report, Goldman may provide Apple with point of sale credit at interest rates far lower than the typical credit card.

“By offering a lower-cost loan, Goldman hopes to siphon off some of that business. Goldman charges 12% interest on its average Marcus loans. Credit cards can charge upward of 20% and carry late fees and other charges. Partnerships with big retailers like Apple are key. They can deliver millions of customers that Goldman would struggle to find on its own.”

Goldman is said close to buying personal-finance startup Clarity (American Banker), Rated: AAA

Goldman Sachs is in discussions to acquire the personal finance startup Clarity Money, with plans to fold it into its Marcus online lender, according to people familiar with the matter.

Robinhood users ramped up deposits during Monday’s market bloodbath (Business Insider), Rated: A

On Monday, the US stock market witnessed its largest point decline ever. The Dow Jones industrial average dropped as much as 1,600 points during Monday trade before closing down 1,175 points. Still, a spokesperson for Robinhood, the California-based brokerage, told Business Insider its users ramped up deposits on its zero-commission stock trading platform.

Venmo monetization may be on the horizon (Business Insider), Rated: A

Source: Business Insider

Venmo alone hit $10.4 billion, about 39% of the P2P total. As P2P surges across the board, it’s helping 

Identity fraud hits all time high with 16.7m US victims in 2017 (Payments Cards and Mobile), Rated: A

The 2018 Identity Fraud Study released by Javelin Strategy & Research, revealed that the number of identity fraud victims increased by 8% (rising to 16.7 million US consumers) in the last year, a record high since Javelin began tracking identity fraud in 2003.

The study found that despite industry efforts to prevent identity fraud, fraudsters successfully adapted to net 1.3 million more victims in 2017, with the amount stolen rising to $16.8 billion.

The 2018 Identity Fraud Study found four significant trends:

  • Record high incidence of identity fraud  In 2017, 6.64% of consumers became victims of identity fraud, an increase of almost 1 million victims from the previous year.
  • Account takeover grew significantly – Account takeover tripled over the past year, reaching a four-year high. Total ATO losses reached $5.1 billion, a 120% increase from 2016.
  • Online shopping presents the greatest fraud opportunity – Card Not Present Fraud is now 81% more likely than point of sale fraud, the greatest gap Javelin has observed.
  • Fraudsters are getting more sophisticated

Nearly half of small businesses plan to invest in cybersecurity in 2018 (AZ Big Media), Rated: A

Half of all U.S. small businesses were breached in 2016, according to 2016 State of SMB Cybersecurity Report. Disruption to normal operating expenses costs an average of $955K, which can be devastating to small business owners.

As part of Kabbage’s ongoing effort to help small businesses to be successful, Kabbage recently surveyed more than 800 customers and nearly half (47 percent) plan to invest in cybersecurity products and services in 2018.

Hackers find value in obtaining employee and customer data, bank account information and/or intellectual property, no matter the size of the business. Today, more than 70 percent of attacks are targeted toward small businesses, largely due to the their beliefs that they won’t be hacked (mostly due to their size).

Virginia consumers to receive $ 2.7 million in relief from settlement with internet lender (WINA), Rated: A

Attorney General Mark R. Herring announced today that more than $2.7 million in relief will be provided to Virginia consumers who took out loans with Internet lender MoneyLion of Virginia LLC-an affiliate of New York based Internet lender MoneyLion, Inc. Attorney General Herring’s settlement with MoneyLion will provide refunds and debt forgiveness to 3,800 consumers as a result of the company’s alleged violations of the Virginia Consumer Protection Act. Since creating a Predatory Lending Unit in his Consumer Protection Section, Attorney General Herring’s Office has recovered more than $25 million in restitution and debt forgiveness for Virginia consumers from online lenders.

The settlement includes the following key terms relating to loans made by MoneyLion during the period in question:

• MoneyLion agrees to provide $359,811.50 in refunds to 1,161 Virginia consumers who paid more than their loan principal plus 12% APR;
• MoneyLion agrees to give up the collection of $2,354,097.05 in illegal interest it charged on loans with 2,639 Virginia consumers;
• A payment to the Commonwealth of $10,000 as a civil penalty for MoneyLion’s alleged violations of the VCPA;
• A payment to the Commonwealth of $20,000 for its costs and fees in investigating MoneyLion’s alleged violations of the VCPA;
• Permanent injunctions preventing MoneyLion from misrepresenting its license status, allowable interest rates, and allowable fees.

Bankrupt Payday Lender Can’t Move CFPB Suit To Texas (Law360), Rated: A

A Montana federal judge refused to transfer a CFPB action alleging Think Finance duped borrowers and used sham tribal payday lenders to collect money it was not owed, finding Tuesday the case need not be moved to where the financial technology company’s Texas bankruptcy is.

U.S. District Judge Brian M. Morris said the state of Montana has a “substantial interest” in hearing the Consumer Financial Protection Bureau’s case since Think Finance LLC’s loans were voided under the state’s law.

Movement Mortgage Implements CompenSafe to Automate LO Compensation (Send2Press), Rated: B

LBA Ware, a leading provider of automated compensation software and systems integration solutions for mortgage lending and retail banking, announced that South Carolina-based Movement Mortgage has implemented CompenSafe to automatically calculate commissions for its loan originators (LOs) located in 700 branches across 49 states.

Cerberus Capital Management, L.P. today announced that an affiliate has entered into an agreement to acquire Cyanco Holding Corp. from funds managed by Oaktree Capital Management, L.P. (“Oaktree”).  Cyanco is the largest global producer of sodium cyanide, a critical input in the gold and silver mining industry. Terms of the transaction, which is subject to customary conditions to closing, were not disclosed.

OCC Chief Praises Mulvaney On Halting Payday Rule (PYMNTS), Rated: B

After a 45-minute meeting on Tuesday (Feb. 6), Comptroller of the Currency Joseph Otting had nothing but praise for acting Consumer Financial Protection Bureau (CFPB) Director Mick Mulvaney.

“Acting Director Mulvaney has helped reduce the burden on the banking system by delaying implementation of his agency’s Home Mortgage Disclosure Act rule, committing to reconsidering its payday lending rule, and deferring action on additional regulations until completing a more thorough review of those matters,” Otting said in the release. “I also applaud him for realigning his agency’s mission to the current needs of the nation, making its processes more transparent and fair.”

United Kingdom

RateSetter Innovative Finance ISA is Finally Here (Crowdfund Insider), Rated: AAA

Peer-to-peer lending platform RateSetter has shared that is Innovative Finance ISA (IFISA) will launch tomorrow (February 8th). RateSetter said the IFISA will initially be available to existing customers, then to new customers on 1 March and to inward transfers from other ISAs in April.

What a difference a tax year makes! P2P platforms pile in to the IFISA market (P2P Finance News), Rated: A

Just a handful of peer-to-peer platforms had full Financial Conduct Authority approval in time to launch an IFISA product in April 2016, with 2,000 accounts and £17m subscribed up to April 2017.

Many saw this as a damp squib, but as we enter ISA season for the 2017/18 tax year, platforms representing almost 80 per cent of the market could be set to lead the charge.

Both Zopa and Funding Circle have loan books worth more than £3bn each, while RateSetter boasts a portfolio worth £2.5bn.

ISA Innovation: What do investors think? (AltFi), Rated: A

Crowdstacker’s CEO Karteek Patel reveals why investors have opted for the Innovative Finance ISA over the past two years. 

When the first types of ISA launched in 1999 the country was still in the first flush of a much feted Blair Government, the economy was buoyant, and the outlook rosy.

It was the end of a decade that saw average base rates of around 8%. Inflation meanwhile may have started at 9.5% in 1990, but it rapidly fell to a more manageable 1.5% by 1999.

2016-17 average ISA subscriptions were £5,558. Average subscriptions for our Innovative Finance ISA were above £11,000 – probably indicating early adopters of the IFISA are more seasoned investors, who are investing larger sums. Of course, as we know from other innovations such as smartphones and social media, where early adopters lead, the masses will follow, as long as the proposition is attractive.

How UK challenger bank Monzo turned its customers into a loyal community (Tearsheet), Rated: A

Monzo asks customers for feedback on product launches and fees, allows them to invest in the company through equity crowdfunding rounds and holds community events across the U.K., either at Monzo offices or customer suggested venues. Its approach is based on the principle that customers will stay loyal and will refer others if they’ve got some kind of stake in it. Banks have traditionally relied on large-scale ad campaigns and promotions to get customers to change their providers. But U.K. customers still aren’t changing their banks in droves; according to U.K. nonprofit Bacs only 4.45 million successful switches have taken place since 2013. Plus, they’ll have less and less motivation to switch bank providers as more non-bank entities begin offering comparable services.

The company’s biggest growth driver is loyalty, with word-of-mouth referrals being the source of 80 percent of new customer growth, according to the company. The remaining 20 percent is based on a limited amount of sponsored ads on Facebook and Twitter. More than 30,000 customers participate in an online feedback forum for new products.

Separately, Monzo holds eight to 12 events per year around the U.K.

 

Esme Loans joins NatWest’s alternative finance panel (Finextra), Rated: A

Esme Loans, the digital lending platform that allows small and medium sized businesses to quickly obtain unsecured loans of up to £150,000, will join a select group of leading alternative finance firms on NatWest’s Capital Connections panel.

Princeton dispute pushes Ranger’s 2017 returns into negative territory (P2P Finance News), Rated: A

RANGER Direct Lending (RDL) saw its net asset value (NAV) slide 2.95 per cent over 2017 due to its ongoing Princeton legal arbitration.

The investment trust’s December update showed its NAV return was 4.53 per cent in 2017 but the ongoing legal dispute with its Princeton investment over bankrupt lender Argon pushed it into negative territory.

On a monthly basis, RDL’s NAV was actually at a six-month high to 0.48 per cent.

Lendy secures major repayment on west London flat (Bridging&Commercial), Rated: B

P2P lending platform Lendy has announced that it has received a major repayment in excess of £2.1m on a luxury flat in west London.

The property has a security value of £3.25m, a loan value of £2.12m and an LTV of 65%.

Personal lending increases four times faster than wages (BBC), Rated: A

In comparison, wage data from the Office for National Statistics (ONS) shows the typical full-time worker has seen pay increase by 6.5%, over the same period.

British households amassed £37bn in unpaid personals loans in 2017, an increase of £7bn from three years earlier.

In Northern Ireland personal loan debt is just over £1bn and has risen 4% since 2014.

FINTECH AND BANKING GROUP SET FOR IPO (BusinessCloud), Rated: B

TruFin has published a document announcing its intention to float on the AIM market of the London Stock Exchange in late February.

TruFin has offices in London and Birmingham and currently operates under three separate businesses: Distribution Finance Capital (DFC), Satago and Oxygen Finance.

The group also owns a 15 per cent stake in technology-led peer-to-peer lender Zopa. The platform was launched in 2005 and has since originated over £2.6bn of unsecured loans, connecting more than 320,000 customers to 70,000 investors.

China

China’s recent crackdowns indicate growing pains for its advanced fintech industry (Tearsheet), Rated: A

The central bank is now reining in “social credit” scoring models by companies like Tencent and Alibaba that use consumer data from purchases and social behavior, as of the past weekend. These programs are designed to make up for the lack of institutional records of individuals’ creditworthiness in China’s financial system — something the central bank itself has tried to address with its own solution. Now the government is worried e-commerce-turned-fintech giants could use social scoring as marketing to sell their financial products.

China is a mobile-first nation. Mobile e-commerce took off there because its retail landscape was weaker and less efficient 15 years ago compared to that of the U.S.

European Union

Amsterdam Makes The Most Of Its Fintech Credentials (Global Finance), Rated: AAA

Despite Brexit, London has managed to hang onto its status as Europe’s leading fintech hub, at least for now. According to the Nesta 2016 European Digital City Index, “London leads for both start-ups and scale-ups.” However, Stockholm and Amsterdam, which rank second and third respectively out of 60 cities, are leading the pack nipping at London’s heels, according to the index, which looks at how European cities support “digital entrepreneurship.”

Amsterdam has many claims to fame, but one of its lesser-known features is its concentration of 350 fintech companies, more notably in the payments (Adyen, Payvision, GlobalCollect), trading (BinckBank, Flow Traders) and alternative finance (Funding Circle, Spotcap) spaces.

European Investors Elect Favorite Projects as Prêtons Ensemble Launches New €200 Million Digital Lending Fund (Crowdfund Insider), Rated: A

The asset management firm Eiffel Investment Group which manages the €100 million marketplace lending fund “Prêtons Ensemble” (meaning “Let’s Lend Together”) for institutional investors Aviva France, AG2R LA MONDIALE, MAIF, MGEN and Klesia awarded European Digital Lending Awards at a gathering held in Paris on February 1st. The awards recognized SME projects presented on the lending platforms backed by the fund.

Nominated platforms included leaders such as Funding Circle and Lendix. The prizes however went to smaller marketplaces, a good opportunity to put the spotlight on these up-and-coming fintechs:

  • Green Economy award: Générale du Solaire, a project presented on Lendosphere, France.  
  • Job creation award: Metalliance on Wesharebonds, France.  
  • Innovation award: Selfstock on ClubFunding, France.  
  • Quality of Life award: All About Healthcare on Linked Finance, Ireland. Linked Finance is Ireland’s largest P2P lending platform with more than 16,000 registered lenders who have lent over €32 million to Irish businesses
  • Inclusive Economy: Mujeres y CIA on Finanzarel, Spain, and
    Nou verd and Nou set on Loanbook, Spain.  
  • Best pivot: Sky Hero on Look & Fin, Belgium.  
International

Senmiao Technologies Proposes Terms For $ 14 Million U.S. IPO (Seeking Alpha), Rated: AAA

Senmiao Technology (AIHS) intends to raise $14 million in a U.S. IPO by selling 3.25 million shares at between $4.00 to $4.50 per share.

According to a 2017 research report by the World Federation of Direct Selling Associations, the global direct selling volume increased by 1.9% in 2016, reaching $183 billion in sales between 107 million direct sellers.

In 2014, 45% of direct selling volume came from the Asia Pacific region and grew to 46% in 2015 – 2016, as the chart below shows:

Source: Seeking Alpha

According to management, ‘there are approximately 40 lending platforms in Sichuan province.’ Major competitive vendors that provide similar services include:

  • Sichuan Jinding Wealth Information Technology
  • Koudai Network Services
  • Chengdu Hongxue Jinxin Business Consulting
  • Chengdu Zhongke E-Commerce Co

Revenue ($)

  • Six months ended Sept 30, 2017: $182,960
  • FYE March 31, 2017: $73,237

Operating Loss ($)

  • Six months ended Sept 30, 2017: ($671,729)
  • FYE March 31, 2017: ($185,535)

Operating Margin (%)

  • Six months ended Sept 30, 2017: Negative
  • FYE March 31, 2017: Negative

Cash Flow from Operations ($)

  • Six months ended Sept 30, 2017: $302,568 cash flow used in operations
  • FYE March 31, 2017: $1,324,449 cash flow from operations

As of Sept 30, 2017, the company had $76,863 in cash and $736,246 in total liabilities.

(Source: Senmiao S-1/A)

 

Exclusive Interview with FintruX CEO Nelson Lin (Chipin), Rated: A

FintruX is an established online lending platform that is introducing blockchain into its financial network to better serve both kinds of customers.

Nelson. Thanks for joining us today. Can you tell us more about yourself and FintruX?

I am the founder and CEO of FintruX and also Robocoder. Robocoder provides the technology behind Fintrux.

FintruX is a global peer-to-peer (P2P) lending platform on the Ethereum blockchain network for providing unsecured loans. It connects small businesses who need money for cash flow issues, with lenders who want to earn a better return on their money.

In some ways, tokenized P2P lending platforms is a “killer app” for the blockchain technology. We are pretty sure you would agree, but can you elaborate and in the context of what you are trying to do.

All the current monetary transactions require too many intermediaries to facilitate a simple transaction from end-to-end and the process itself is also inefficient and time-consuming. Furthermore, most of the systems are fragmented, inconsistent and usually require extensive human intervention. Finally, such transactions require numerous touch-points to handle and manage the “trust” between all of the parties involved. Our mission is to make trustless financing a no-brainer for both borrower and lender.

What is the biggest problem within the industry or do you think there is a gap in the market for FintruX to fill?

The biggest problem is that small and startup businesses do not have sufficient credit history or access to capital for their short-term cash flow needs. Furthermore, the traditional systems are inadequate, fragmented, inconsistent, labor intensive and involve lots of intermediaries. There are many P2P lending platforms in existence but they do not talk to each other.

Australia

Global tech giants will threaten bank tax receipts (Financial Review), Rated: A

The $14 billion in taxes the federal government receives each year from the banking sector could be eroded by global technology companies including Apple capitalising on policies designed to boost competition in the sector, the chief executive of the Australian Bankers’ Association, Anna Bligh, will warn on Thursday.

In its half-year results presentation on Wednesday, Commonwealth Bank, the country’s second largest taxpayer, pointed to the $2 billion of taxes it pays to contribute to the economy. This contrasts to many of the global tech players, who book little profit in Australia despite huge sales, and therefore pay much less tax.

India

Credit is here to stay, new lenders beyond banks to play bigger role (money control), Rated: A

Emerging as an alternative to mainstream banking, NBFCs have also been playing an important role in bridging the credit gaps, i.e. in meeting the increasing financial needs of the underserved and unbanked areas in the corporate sector, unorganized sector and also for the local borrowers.

According to the Reserve Bank of India, in January 2017, a total of 28.8 million credit cards were in operation. Credit cards, also known as revolving credit, have been the preferred choice of masses as it enables repetitive use for daily purchases that can be paid back in instalments on a monthly basis.

According to PwC research, over 95% of financial services incumbents seek to explore FinTech partnerships.

MENA

A year when new innovations show up in Dubai realty (Gulf News), Rated: AAA

In the UAE, we are seeing some significant strides, where one technology-driven real estate crowdfunding platform, Smart Crowd, recently received approval from the Dubai Financial Services Authority to establish the region’s first regulated real estate crowdfunding platform. This will enable any individual to invest and own a piece of UAE property for as little as Dh5,000 and will most likely stimulate sales in the secondary market.

Canada

Business loans: Which one works for you? (Bankless Times), Rated: A

Source: Bankless Times
Bermuda

Trunomi Closes $ 3.5 Million Round from CloudScale Capital (Finovate), Rated: AAA

Consumer consent and data rights company Trunomi closed a $3.5 million round of funding today. This investment brings the Bermuda-based company’s total funding to $10.5 million.

Authors:

George Popescu
Allen Taylor