Friday May 11 2018, Daily News Digest

Volume of homes flipped with loans

News Comments Today’s main news: Robinhood raises $363M. Americans on pace to amass $4T in consumer debt by end of year. Zopa to boost regulatory clout. Reserve Bank of India regulations create P2P lending road blocks. How China struggles to create a credit scoring system. Today’s main analysis: LendingClub earnings overreaction. LendingTree Personal Loan Offers Report for April 2018. Today’s […]

Volume of homes flipped with loans

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United States

Robinhood Aims to Rival Coinbase in Crypto With $ 363 Million Funding Round (Fortune) Rated: AAA

Robinhood, the free stock trading app, has raised $363 million in a new investment round valuing the company at $5.6 billion.

The Series D round, announced Thursday, makes Robinhood the second most valuable private fintech startup in the U.S. after Stripe, the online payments company.

Inside SoFi’s (expensive) customer acquisition push (Tear Sheet) Rated: AAA

SoFi, which recently confirmed it had 500,000 members, is on a customer acquisition push.

The company, which initially offered student loan refinancing for high-earning top-tier graduates and has since expanded its offerings, differentiates with VIP-style “member” benefits.

It’s a customer-for-life strategy other digital banking upstarts are pursuing. Luvleen Sidhu, CEO of BankMobile, recently told Tearsheet that a “customer for life” strategy is underpinned by the reality that “every customer is a potential customer,” with product offerings tailored for different life stages. SoFi has been known to pay a high price to gain customers; last year, it reportedly acquired customers at $756 apiece. The non-financial member services are valued at $795 per customer, according to the company.

Hey Future SoFi Money Member (SoFo Money Email), Rated: A

Higher interest (1.09% for May—21x the national checking account average of 0.05%!)

  • Reimbursed ATM fees worldwide (up to 6 per month)
  • No foreign transaction fees
  • No overdraft fees or account fees whatsoever!
  • Easy-to-use mobile app
  • SoFi Money Visa Debit Card
  • Mobile check deposit
  • Free checks
  • Top notch customer support
  • Send money to friends and family with easy P2P at no cost
  • Bill pay
  • Direct deposit
  • PLUS access to SoFi membership including complimentary career coaching and member events when you set up direct deposit

Did we mention that if you sign up for an account and set up direct deposit you’ll get $200?

LendingClub: Earnings Overreaction (Seeking Alpha) Rated: AAA

Such a strong reaction to LendingClub hasn’t happened in years. The company is still down 20% year to date, and more than 40% in the last twelve months. LendingClub has struggled to find its footing ever since the ouster of its CEO, Renaud Laplanche, after controversy over the parking of LendingClub notes in a related third-party firm. More recently, in the wake of Wells Fargo’s (WFC) fake-account scandal, the FTC has also charged LendingClub with charging improper fees to borrowers, sending the stock to new all-time lows of $2.57.

Source: Seeking Alpha

But with this earnings quarter – the first time in a long time that LendingClub has rallied to earnings news (in Q4, LendingClub dropped 9% after missing revenue estimates; the quarter before that, it tanked 17% for doing the same). What’s interesting is that even in this quarter, LendingClub continued a three-quarter streak of missing analysts’ revenue expectations.

How Wall Street, Silicon Valley institutionalized home flipping (Curbed) Rated: AAA

As the housing market has gone from recovering to roaring over the last five years, home flipping has also increased.

Source: Curbed

According to data provided by ATTOM Data Solutions, a real estate data provider, some 138,410 flippers invested $56 billion in home flipping in 2017, 34.8 percent of which was financed as opposed to executed in all cash. Prior to the housing bust, the same type of easy credit that infected the traditional mortgage market was also present in home flipping. At the peak of the housing bubble in 2005, more than $100 billion worth of homes were flipped by 287,929 investors, and 66 percent of those home flips were financed with loans.

Source: Curbed

Turn the Post Office Into a Bank? First Check Japan (Bloomberg) Rated: AAA

Koizumi won his fight, his party crushing all opposition in a landslide, and his plan was set in motion, though the process has taken more than a decade. The company’s initial public offering in 2015 was the world’s biggest in that year. The government still owns most of Japan Post Holdings Co., and periodically sells off shares, with the goal of eventually reducing its stake to only a third from more than half now. But privatization hasn’t shrunk Japan’s postal bank itself, which remains one of the largest and most important in the world:

Source: Bloomberg

The problem was that Japan’s postal bank didn’t just take deposits — it also lent money, including to so-called zombie companies, or inefficient enterprises that survive due to below-market-rate loans.

Bond Fund Inflows, Dollar Rally and Buyback Surge (INTL FCStone Email), Rated: AAA

Source: INTL FCStone

U.S. equity ETFs have lost $35 billion since the Nasdaq index peaked in mid-March. This is the longest stretch of ETF outflows I can remember since the end of the great financial crisis. Inflows into bond funds accelerated to $16 billion over the same time. Jumping from stock to bond funds at the first sign of volatility was a logical reaction when bond yields were falling to record lows amidst the deflationary fears of the beginning of 2016.

It makes a lot less sense when corporate earnings are soaring, when deficit-related treasury issuance is exploding, and when the New York Fed underlying inflation gauge is clocking above 3%. Last but not least, the equity selloff was in large part driven by a bond market rout that pushed 10-year yields above the economically meaningless but psychologically symbolic 3% level.

Read the full report here.

The Real Estate Lending Merger That Shook Mt. Olympus (Digital Journal) Rated: A

Zeus CrowdFunding, Zeus Hard Money and Zeus Mortgage Bank—made the switch to monotheism. The three successful businesses are now united under a single brand: ZeusLending.com.

Zeus Founder and Chief Acceleration Officer Steven Kaufman claims to have consolidated all three financing businesses into a single organization to better serve the community of real estate buyers and investors who rely upon fast, no-hassle loans to conduct timely transactions.

Federal student loans are about to get more expensive. What you need to know (CNBC) Rated: A

Although the Department of Education hasn’t formally announced the new rates, this year’s bump is likely to be higher than expected, said Mark Kantrowitz, a student loan expert.

Americans On Pace to Amass a Collective $ 4 Trillion in Consumer Debt by the End of 2018 (Benzinga) Rated: AAA

LendingTree today released its first Consumer Debt Outlook for May 2018. Americans are on pace to amass a collective $4 trillion in consumer debt by the end of 2018. Collectively, Americans owe more than 26 percent of their income on consumer debt, up from 22 percent in 2010.

Incomes growing, but consumer borrowing growing faster
Overall, the percentage of total non-housing debt, at 26 percent of Disposable Personal Income, is now even higher than during the credit boom in the mid-2000s.

Source: Lending Tree

 

LendingTree Personal Loan Offers Report – April 2018 (Lending Tree) Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.35% in April.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.35%, a decrease of 7 basis points from the prior month and 2 basis points from the same period one year ago.
  • At $22,774, the average loan amounts offered with the best APRs to all borrowers with a score of 760, up 0.57% ($130) from last month, and over 17.86% ($4,067) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had offered APRs of 4.87% on average, and loan amounts of $33,931. A borrower with this APR and loan amount would save $2,877 by consolidating debt with a 10% APR over a three-year term.
Source: Lending Tree

Real Estate Crowdfunding: MG Capital Migrates Investment Opportunity Online (Crowdfund Insider) Rated: A

Recently, CI had a chance to catch up with Eric Malley, founder & CEO of MG Capital Management during the Crypto Invest Summit in Los Angeles. While not quite there yet, Malley is interested in the potential of blockchain.  He is looking at the options of how crypto and property can make sense for both investor and issuer.

RealtyMogul’s MogulREIT I Closes $ 4.9 Million Investments in Two Retail Shopping Centers (Citizen Tribune) Rated: B

MogulREIT I, as part of its diversified income strategy, recently completed two preferred equity investments in community-based retail centers. Community-based retail centers are centrally located within their respective population centers and focus on durable tenancy that serves the needs of the working community, thereby being less susceptible to internet retailing. The transactions include a $3 million preferred equity investment in a retail center in Waterbury, CT, consisting of three multi-tenant strips with 17 suites across 50.5 acres and a $1.9 million preferred equity investment in a retail center comprised of two lots with over 27,000 square feet located in Orange County, CA. CoStar reports that within a one-mile radius of the property, average household income is over $116,000.

Goldman Sachs, Apple Team Up on New Credit Card (Wall Street Journal) Rated: A

Apple Inc. and Goldman Sachs Group Inc. are preparing to launch a new joint credit card, a move that would deepen the technology giant’s push into its customers’ wallets and mark the Wall Street firm’s first foray into plastic.

The planned card would carry the Apple Pay brand and could launch early next year, people familiar with the matter said. Apple will replace its longstanding rewards-card partnership with Barclays PLC, the people said.

Guaranteed Rate Continues Record-Breaking Streak through April (Blobe Newswire) Rated: A

Guaranteed Rate, one of the nation’s largest retail mortgage lenders, reached $3 billion in total locked loan volume for the month of April and eclipsed records previously broken in March. In a highly-competitive housing market, the retail mortgage lender showed it’s the home purchase expert by achieving the following records: 9,387 in total locked units, $2.5 billion in locked purchase volume and 8,041 in locked purchase units.

 

Why Nationwide is ditching retail banking (Tear Sheet) Rated: A

Nationwide is shutting down its retail bank, returning to its historical core business lines including insurance and retirement; part of this plan is to invest more resources in reaching the fee-only adviser community.

The move to wind down banking operations was a strategic decision to focus on trust operations that support  retirement plans, a company spokesman said. Gaining scale and becoming competitive in retail banking would have required a “significant investment.”

Digital Lending 2.0 — A New Era (LinkedIn) Rated: A

We are now seeing an evolution of the online lending model: version 2.0. This version looks in many ways like a traditional bank, albeit a much lighter and digital one, with multi-product platforms and a variety of custom offerings for consumers. With non-traditional models like Barclays and Goldman Sachs entering the market, online lenders are either partnering up or learning from the players they sought to disrupt. In digital lending 2.0, it will be important to take an open collaborative approach, broaden offerings and deepen customer relationships through more customized solutions.

Marketplace Lending Update #3: Kabbage Heads to Court (The National Law Review) Rated: A

A recently filed California lawsuit raises the stakes in the ongoing challenge to the “bank origination model.” The lawsuit, Barnabas Clothing, Inc. v. Kabbage, Inc., was filed on March 22, 2018 in Superior Court in Los Angeles and recently removed to the federal court.1 Barnabas alleges violations of state usury, false advertising, and unfair competition laws, and asserts two federal Racketeer Influenced and Corrupt Organizations (“RICO”) Act claims. Barnabas seeks to certify a class on behalf of all California-based Kabbage borrowers and requests various relief, including that the court void the Kabbage loans.

You can do more than you think with bad credit (Inquirer Business) Rated: B

CreditCards.com, the average FICO credit score was 699 in 2016, which is just a step above fair credit. About 30 percent of Americans have poor credit, making it difficult for them to function in the financial world.

Get Creative with Loans

  • Peer to Peer LendingSince 2005, peer to peer (P2) lending has been a staple for those seeking funding with bad credit. Rather than going through an institution, you apply for and receive funds over a member-funded platform.

 

United Kingdom

Zopa to boost regulatory clout ahead of Brexit (Peer2Peer Finance) Rated: AAA

ZOPA is recruiting staff to bolster its regulatory expertise and influence ahead of industry changes and developments such as Brexit.

The peer-to-peer lender is advertising for a public and regulatory affairs officer who will be responsible for building relationships with key regulatory and political stakeholders and industry bodies.

 

Nearly Half of Aspiring Property Developers Say Economic Growth Will Have the Greatest Effect on House Prices in the Next Five Years (Crowdfund Insider) Rated: A

According to LendInvest, when asked what will have the biggest effect on house prices in the next five years, nearly half (40%) of those surveyed viewed national economic growth as having the greatest impact. Only a quarter of respondents (24%) reportedly believe political developments, such as further elections and impending Brexit, will affect house price growth the most. And a shortage in supply of housing is the biggest concern affecting house prices for only a fifth (20%) of those surveyed, while 16% of aspiring developers cited the construction of new infrastructure such as the new HS2 and Crossrail lines as the key influencing factor.

 

Goldman Sachs has invested in a UK startup that tells you when to switch mortgages (Business Insider) Rated: A

Goldman Sachs has led a £13.6 million funding round into UK startup Trussle, a company that helps people get mortgages online and tells them when to switch to better deals.

Goldman Sachs Principal Strategic Investments and Propel Venture Partners led the Series B investment into Trussle, which was announced on Wednesday.

Virgin Money offer highlights testing times for challenger banks (Financial Times) Rated: A

CYBG recently made a takeover approach of rival Virgin Money as challenger banks look for solutions in what has become a tough market; challenger banks are dealing with increased competition by digital entrants, not to mention the big four UK banks, rising funding costs and bigger rivals in the mortgage market; M&A activity among challengers is increasing as companies look to consolidate and digitize to compete.

 

 

Credit Kudos a bureau hero in open banking roll-out race (Fintech Futures) Rated: B

Credit Kudos has got connected with banks in the UK, becoming the “first credit bureau to offer open banking services to lenders and individuals”.

According to the credit bureau, borrowers can now use its services to verify income and demonstrate creditworthiness using their financial history data.

The company has now launched connections with Lloyds, Halifax, Bank of Scotland, Royal Bank of Scotland, NatWest, Ulster Bank, Allied Irish Bank, Danske Bank, and HSBC.

Mortgages shine in Castlight Financial’s open banking pilot (Fintech Futures) Rated: B

Glasgow-based Castlight Financial is partnering with Paradigm Mortgage Services and Foundation Home Loans to launch a pilot of its affordability tool powered by open banking technology.

Called Affordability Passport, Castlight says it allows brokers to process mortgages in under ten minutes.

China

China Struggles to Establish Credit Scoring System (Lend Academy) Rated: AAA

China’s government has tried for many years to establish a credit system that rivals the U.S. and Europe, but has found it a struggle to get there.

In 2015 China’s Central Bank contracted eight companies, including affiliates of TencentPing Anand Alibaba, to help build a credit system that could rival what other developed economies use. The experiment up until today has not fared well as lenders and e-commerce firms continue to use their own proprietary systems to determine risk of the borrower.

One of the main drivers behind the failure is companies were reluctant to share the data they collected. Also, conflicts of interest arose as users could be rewarded by using certain companies to drive their score up.

International

Splitit is financing purchases for debit cardholders (Tear Sheet) Rated: AAA

Splitit, a competitor to lending companies like Affirm and Klarna, is bringing its point-of-sale financing product to debit card users in the U.S. and Europe, targeting fashion and jewelry websites in particular, like Vestiaire Collective and Philip Stein.

Unlike its competitors, however, the company is focused on making the retail industry better for everyone involved — banks, processors, consumers and merchants — rather than displacing credit cards, said Gil Don, CEO of Splitit.

It might be decades before credit cards disappear, but different industries are already seeking ways to sidestep the fees that come with today’s credit card payments.

Getline ICO (GET Token): Blockchain Credit Scoring & Lending? (Bitcoin Exchange Guide) Rated: A

The GetLine network is a peer-to-peer lending platform that is built on the Ethereum blockchain. By leveraging distributed ledger technology, the objective of this project is to disrupt the lending sector, which is currently valued at a whopping $1 trillion. Therefore, transactions will be processed instantly thanks to the direct connection between lenders and borrowers. Moreover, the platform will rely on an advanced credit risk prediction mechanism, making the entire lending process safer and accessible to lenders and borrowers respectively.

 

India

RBI regulations create roadblocks for peer-to-peer lending companies (Business Standard) Rated: AAA

Is non-bank lending a form of access to credit for those in need or an investment asset class for the well-to-do? That is the question that India’s central bank perhaps grappled with while framing the regulations for the nascent peer-to-peer (P2P) lending companies.

While the regulations were put up only in November last year, a handful of companies have exited business and many others have changed tack after looking at the guidelines.

Asia

DBS Bank rolls out Singapore’s first in-app digital financial advisor that’s called ‘Your Financial GPS’ – (Business Insider) Rated: A

DBS Bank recently announced a new in-app holistic digital financial advisor which it called “Your Financial GPS”  – said to be the first of its kind in Singapore.

If you’re a DBS/POSB Bank member and have recently used your iBanking or digibank app, you might have noticed the new feature already available on the app’s main page.

Indonesia: Skystar-backed P2P lender Julo raises $ 5m Series A round (Deal Street Asia) Rated: A

Indonesian peer-to-peer (P2P) lending startup Julo has raised $5 million in a Series A funding round led by Skystar Capital and East Ventures.

Other investors that joined the round include Gobi Partners, Convergence Ventures, Provident Capital, Central Capital Ventura, Heyokha Brothers and other strategic investors, Julo announced on Thursday.

The new round of funding comes only a year after Julo raised an undisclosed amount in a seed round, also led by Skystar Capital.

Authors:

George Popescu
Allen Taylor

Revolutionizing the UK Digital Mortgage Market

uk digital mortgage marketplace

There are multiple fintech lenders and marketplaces in the UK dealing in mortgages and other financial products. What sets Nuvo apart is it’s claim to be the first artificial intelligence (AI)-powered digital broker. Launched by Nick Sherratt (heads oversees operations and finance) and Richard Hayes (CEO) 18 months ago, Nuvo fills the gap between traditional […]

uk digital mortgage marketplace

There are multiple fintech lenders and marketplaces in the UK dealing in mortgages and other financial products. What sets Nuvo apart is it’s claim to be the first artificial intelligence (AI)-powered digital broker.

Launched by Nick Sherratt (heads oversees operations and finance) and Richard Hayes (CEO) 18 months ago, Nuvo fills the gap between traditional brokers and established price comparison websites. They had been running their own mortgage brokerage in Macclesfield, Cheshire for a decade, also selling life insurance and income protection. Their experience as a traditional broker helped them understand what was missing in the market. As a result, they’ve made it easier for customers to access the best mortgage offers in less than a minute, once they’ve gained some basic information from the user.

Now Nuvo Works

The focus was on user accessibility and speed of providing quotes. But the platform’s USP is its AI-powered chatbot technology, which helps users chat in real time and suggests the best mortgage products suited to their finances. The platform was established with 1 million GBP in a seed round, and it recently raised 1 million GBP in a second round of funding.

Historically, if a customer wanted advice on mortgages, he would rush toward a broker or any other independent financial advisor and, in turn, the advisor charged a fees for their advice. However, recent research conducted by Nuvo revealed that nearly 40% of Britons rely on their own research once they get a list of prices from comparison websites. But the problem is most comparison sites don’t give the full picture and can’t answer queries accurately. This passive information overload did not really solve the user problem. Thus, Nuvo was born of the need to marry the traditional mortgage broker experience with the convenient of free comparison websites.

Nuvo has digitalized large parts of the mortgage application process through incorporating real-time sourcing. With an emphasis on transparency, customers can put their queries online with the help of a laptop or other mobile device and get an instant response. Instead of collecting data from the customer through a lengthy form, Nuvo provides a platform that allows the customer to provide details to a chatbot. Customers can also opt to chat with a qualified human financial advisor via the website or by booking a telephonic interview. It means the process is a two-way process, so the customer can ask specific questions at any point if there is something they do not understand.

What Artificial Intelligence Brings to the Table

Artificial intelligence and machine learning add substantial value by bridging the data, information, and context gap so that the virtual assistant and its human counterparts can deliver a seamless customer experience. If the platform lacks data, or the customer provides insufficient data, then it implements sentiment analysis to ascertain intent. Sentiment analysis identifies the customer attitude, emotions, and opinions. If the platform feels like customers are unhappy and/or confused, they can quickly add it to their processing and allow the virtual assistant to interact without sacrificing user experience. There is no need on the part of the customer to wait for a response if the virtual assistant is unable to answer a complex question. Nuvo removes the uncertainty and interjects with a human being.

The first version of the product launched was a Facebook chatbot with some basic functionality that helped people find the best deals on mortgages. Soon, Nuvo will launch the new version integrated on their site with a state-of-the-art user interface, better communication technology, and a next-gen interaction process. Nuvo utilizes its access to endpoints for a better user experience. It also ensures that APIs match the products the platform is offering to users.

The platform launched after the review by UK’s regulator, The Competition and Market Authority (CMA), which recommended that customers use a variety of sites for comparing the best deals. But there are no other companies giving real insight into the market and products.

The UK Mortgage Market Has Not Caught Up With Technology

Most digital brokers are startups and not evolved from traditional brokers. Products and prices are changing constantly. Nuvo allows customer to find the most suitable offer by updating information on a daily basis. Customers can see and compare all the options to make sure they are getting the best deal, eliminating the need for a traditional broker. Also, the founders’ traditional brokers’ practice became a competitive advantage for Nuvo as it enables the company to combine domain expertise and knowledge in their aim to better serve customers.

The UK is one of the largest marketplaces for mortgage deals. Habito and Trussle are other startups aiming for a slice of UK’s lucrative mortgage market. But Nuvo is in for the long haul and believes it can achieve a market share of 5%-10% of the online mortgage market in the next five years.

According to Nuvo founders, they have 10,000 more deals on their platform than Habito at this moment. There is an in-house team of financial experts that assist the customer in solving complicated financial decisions at zero cost. Nuvo does not charge fees to customers like traditional brokers. Instead, they get a commission from the insurer or the mortgage provider.

Founder Richard Hayes said, “Millennials are now willing to transact digitally, so we have an opportunity to resonate with anyone who is willing to engage digitally.”

So far, the mortgage sector has not been able to innovate to meet the demands of customers, but Nuvo, with its AI-powered chatbot, is attempting to simplify the on-boarding process. They are also focused on first-time buyers to build trust and confidence in the mortgage ecosystem.

A major tailwind for digital brokers is the slow but steady death of brick-and-mortar mortgage advisors. In 1985, there were over 120k independent financial advisors in the mortgage space, but now it’s under 20k. Correspondingly, there has been a massive increase in people seeking mortgages. This suggests that the market is consolidating and scale will be an important element in winning the sweepstakes.

How Nuvo is Capturing the Future Digital Mortgage Market

“2018 will see a full mortgage journey on our platform,” Hayes said. Nuvo is incorporating new features to speed up the application process and using APIs to enhance the customer experience at large. “We all know that buying a house is a costly and long process.” Thus, the platform assimilates all the information about property such as value, construction details, and more, from different sources to help the customer get the best mortgage deal and insights about the property itself.

The platform is focused on its journey to help borrowers find the best mortgage and other financial products. It is looking to raise further funding to grow aggressively in this massive market space with its proprietary AI technology.

Author:

Written by Heena Dhir.

Tuesday December 5 2017, Daily News Digest

credit-to-cash ratio

News Comments Today’s main news: Prosper’s top concern next year is liquidity. Affirm seeks new funding at $1.5B valuation. LendingHome surpasses $2B in loan originations. ThinCats delays IFIsa launch. Funding Circle hits 3B GBP in lending. Dianrong planning $500M IPO. Today’s main analysis: Acorns puts up a fight to upscale. Mobile credit and financial inclusion. Today’s thought-provoking articles: Is Lending Club […]

credit-to-cash ratio

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United States

United Kingdom

China

International

India

APAC

News Summary

United States

Prosper’s Top Concern in 2018 is Liquidity, CEO Says (Bank Innovation), Rated: AAA

Marketplace lender Prosper will make liquidity a top priority as the company moves into 2018, company CEO David Kimball said during a lending conference that took place last week.

“Our main concern… it’s always liquidity, and I think most people in this room understand that the best way to get to liquidity is to have a lot of different options,” Kimball said to attendees of the Investors Conference in Marketplace Lending on Friday, December 1st. “And so I think you’ll see our toolkit expand [in 2018] versus where it is now.”

Is Lending Club Misleading New Investors About Past Performance? (deBanked), Rated: AAA

New retail investors interested in the Lending Club platform are greeted with a friendly statistic, that “99% of portfolios with 100+ Notes have seen positive returns.” That’s a slippery statement, which is probably why they footnoted it.

Affirm Is Said to Be Raising Funding at $ 1.5 Billion Valuation (Bloomberg), Rated: AAA

Affirm Inc., an online lender run by PayPal co-founder Max Levchin, is in advanced talks for a financing round that would earn it a place in the unicorn startup club.

The San Francisco-based startup is discussing an investment of about $150 million, said people familiar with the matter. The deal would value the company at $1.5 billion, about double the valuation from the last round in April 2016, said the people, who asked not to be identified because the terms aren’t finalized. Affirm declined to comment.

Acorns Teardown: The Most Popular Robo-Advisor Faces A Fierce Fight As It Goes ‘Upmarket’ (CB Insights), Rated: AAA

The micro-investing app has grown an of army of 2.2M accounts. But making money off these first-time, lower-income investors won’t be easy. To do so, Acorns is building out higher-tier investment services and moving into the highly saturated $40T retirement planning market.

With over 2.2M investment accounts in the US since launch, the company has proved there is a clear niche for its product. It is already the largest robo-advisor by client accounts.

Acorns’ service isn’t free, but it is cheap — the company charges $1 a month or .25% for accounts over $500. At $12 annually for many accounts, that’s not a lot of revenue.

Acorns is making a number of important moves:

  • It is launching its own retirement savings plan in 2018 called Acorns Later, which could help it reach new users and push up current users’ account size.
  • It has formed a strategic partnership with investor Paypal to extend its product to Paypal’s huge user base. In addition, its partnership with Paypal could ultimately help Acorns get into bank account services, a move similar to what low-income investing competitor Stash has done.
  • A B2B offering may also be in the works, based on recent acquisition activity. B2B products have helped other robo-advisors see big jumps in AUM.
Source: CB Insights

Acorns manages approximately $528M in AUM and approximately $407 per account as of September 2017. Compare that to Betterment which manages approximately $28.5K per client account and Wealthfront which averages $42.3K.

Source: CB Insights

Mortgage Marketplace Lender LendingHome Surpasses $ 2 Billion in Loan Originations (Crowdfund Insider), Rated: AAA

On Monday, mortgage marketplace lender LendingHome announced it has originated more than $2 billion in mortgage loans for homeowners and real estate investors. The online lender revealed that the first billion of originations occurred over the course of 30 months, while it took just 12 months for the company to originate its second billion. In the process, LendingHome crossed the major milestone of financing more than 10,000 homes nationwide.

How Cross River Bank plans to bring mobile payments to business customers (Tearsheet), Rated: A

How and when employees get paid should be their choice, Isaacson said. The technology to make that happen is already in the market — Uber and Lyft drivers are taking advantage of it, for example — but the systems aren’t in place at most companies, and there’s a mental barrier for businesses to overcome to begin creating mobile payout experiences.

It’s also too inflexible for some businesses, like a restaurant or store that may need more or fewer cases of Coca Cola than the originally ordered 10. They need to be able to make adjustments like that in real time, Isaacson said. With a mobile device, people can manage and initiate payments in real time and remotely.

Cross River Bank is a business bank, whose clients are some of the biggest fintech companies. Behind the scenes, CRB has developed payments solutions for faster, more secure and lower-cost transfers that have been integrated by TransferWise and the bitcoin wallet Coinbase, as well as Google Wallet and Stripe — which counts Lyft as a customer.

Morgan Stanley is getting in on the hottest trend in investing (Business Insider), Rated: A

The New York-based investment bank announced Monday the launch of Access Investing, an online roboadviser designed to capture a younger clientele.

The goal of Morgan Stanley’s new offering is to serve as a stepping stone, so to speak, for younger savers who one day might want to tap into the bank’s broader suite of wealth-management services when they are wealthier and older.

2017’s Best & Worst Cities for Wallet Fitness (WalletHub), Rated: AAA

Wallet Fitness levels vary widely across the U.S. As we prepare to make resolutions for self-improvement, it’s fair to wonder who’s best positioned for financial success and who has the most work to do. To find out, we compared more than 180 U.S. cities based on 29 key indicators of Wallet Fitness.

Source: WalletHub
10 Best Cities for Wallet Fitness 10 Worst Cities for Wallet Fitness
1 Fremont, CA 173 Oxnard, CA
2 San Francisco, CA 174 Miami, FL
3 Madison, WI 175 New Orleans, LA
4 Columbia, MD 176 Gulfport, MS
5 San Jose, CA 177 Santa Ana, CA
6 Seattle, WA 178 Brownsville, TX
7 Minneapolis, MN 179 San Bernardino, CA
8 Sioux Falls, SD 180 North Las Vegas, NV
9 Bismarck, ND 181 Newark, NJ
10 Warwick, RI 182 Hialeah, FL
Source: WalletHub

See the rest of the results here.

Rich Uncles Announces New CFO, COO, and Corporate Headquarters (Business Insider), Rated: A

Leading crowdfunding real estate investment platform, Rich Uncles, LLC, today announced the appointment of John H. Davis as its new chief financial officer and Jean Ho as its new chief operating officer and chief compliance officer.

Mr. Davis comes to Rich Uncles after more than four decades with KPMG LLP, one of the world’s four largest accounting firms, where he had served as a partner since 1988.

Ms. Ho joined Rich Uncles, LLC in 2016 as the company’s chief financial officer, where she has helped lead the acquisitions of 29 commercial properties across two Rich Uncles-sponsored REITs: Rich Uncles Real Estate Investment Trust I and Rich Uncles NNN REIT, Inc. Prior to joining Rich Uncles, LLC, Ms. Ho held positions as chief operating officer and chief financial officer of Soteira Capital, LLC, chief financial officer of MKA Capital Advisors, LLC, and with KPMG LLP, where she specialized in real estate, financial services, and high net wealth personal financial and estate planning.

Perkins Coie Law Firm Boosts Fintech Bench with SEC Attorney Hire (Crowdfund Insider), Rated: A

Perkins Coie, a law firm that is very active in the Fintech / Blockchain space, has announced the hiring of a former SEC attorney. Michael S. Didiuk has joined the firm’s Investment Management practice group as a partner in the San Francisco office where he will represent clients on various federal securities laws and complex regulatory issues raised by Blockchain technology and with the emergence of digital asset sales and digital securities.

Barclaycard building digital bank in US (Banking Technology), Rated: A

Barclaycard is rebranding itself to Barclays in the US as part of its retail digital banking strategy in 2018.

According to Tearsheet, Barclaycard says since last November it has been targeting prime and super-prime borrowers with an online personal loan offering on a test-and-learn basis to a small group of customers. Barclaycard plans to launch the same offering publicly by the middle of 2018.

Mass firings at top digital currency investment bank (New York Post), Rated: A

The largest investment bank catering to the red-hot cryptocurrency sector was in total disarray on Friday after management fired nine employees — including the entire tech team, The Post has learned.

The Argon Group had been battling internal turmoil recently as many of its investment bankers had grown disenchanted over the direction of the company, sources said.

Atlantic Capital Bank expands into Fintech Banking with strategic new hire (GlobeNewswire), Rated: A

Chris Stanley joins Atlantic Capital Bank as Vice President of Fintech Industry Banking, to lead Atlantic Capital’s Fintech Banking practice.

Expanding on a successful payments industry line of business, the new fintech banking practice will focus on emerging growth and growth-stage companies in this evolving technology segment. This will bolster Atlantic Capital’s core deposit gathering strategy.

Want to Learn 8 Secrets for Getting a Business Loan? Here are 2 (Small Biz Trends), Rated: B

Secret #1:  Yes, You CAN Improve Your Personal Credit Score

  • Pay down your credit cards. As a yardstick, you’ll want all your cards under 50 percent  of their limits. This means no more maxing out cards — for personal or business.
  • Lower your debt compared to your income. A good benchmark is keeping debt to 30 percent of less of your income. Rather than taking a second mortgage on your home and increasing your debt load, you might be better served to apply for a business loan.
  • Monitor your credit score. Errors are more common than most people realize. Besides you’ll learn which creditors report to credit agencies and what they report on.

Secret #2:  Your Business Credit History May Be Incomplete, But It’s Not Hard to Change That

  • Establish free profiles with the three major business credit bureaus: D&B, Experian, Equifax
  • Apply for a business credit card and use it to establish a timely repayment history.
  • Do business with vendors (“trades”) that report to credit bureaus regularly.
United Kingdom

ThinCats delays IFIsa launch (Bridging&Commercial), Rated: AAA

ThinCats has announced that it will now be launching its Innovative Finance Isa (IFIsa) early next year.

The peer-to-peer lending platform had hoped to launch its IFIsa by the end of this year and thanked investors for their patience.

It is currently building the new systems needed to handle the different aspects of accepting and administering Isa investments safely.

Funding Circle hits £3bn lending milestone (P2P Finance News), Rated: AAA

FUNDING Circle has become the first UK peer-to-peer platform to reach the £3bn cumulative lending milestone.

The business finance provider said on its website that “30,948 UK businesses have financed their goals by borrowing £3bn through Funding Circle”.

Zopa, which lent out a record £100m last month, said it expects to reach the £3bn mark in January.

Micro-lender Oakam secures £35 million debt facility from Victory Park Capital (Finextra), Rated: A

Digital micro-lender, Oakam today announced that it has secured a £35 million debt investment from Victory Park Capital Advisors, LLC (VPC), an investment firm focused on private middle market debt and equity investments.

LandlordInvest publishes loan book (P2P Finance News), Rated: A

LANDLORDINVEST, a peer-to-peer lending platform for residential and commercial real estate mortgages, has published its entire loan book to mark its one-year anniversary.

It reveals that LandlordInvest lent a total of £2.7m between December 2016 and December 2017, with an average loan amount of £210,535.

The average loan term was 7.6 months, the average LTV was 63.7 per cent and the average annual gross return to investors was 11.1 per cent.

Welendus launches beta platform for investors (P2P Finance News), Rated: A

WELENDUS, the peer-to-peer payday lender, has launched a beta version of its platform for investors after its latest funding round exceeded its target in under 24 hours.

The fully-authorised platform, which aims to re-define the short-term lending market with cheaper rates and no hidden costs, is now inviting investors to create an account.

Six ways fintech startups could hurt incumbent banks (Econsultancy), Rated: A

For years, there has been much talk about the impact of fintech startups like Mondo and Atom Bank on incumbent banks but little has been done to quantify the actual effects fintechs are having on big banks.

New data from The Bank of England (BoE), published as part of its 2017 stress test of the UK banking system, however, is shedding light on this subject.

  • Reduced overdraft revenue
  • Reduced fees from payment services
  • Higher customer acquisition and retention costs
  • More difficulty cross-selling
  • Increased liquidity risk
  • Increased cyber security risk

Five (more) UK startups to watch: Were we right? | Fintech Recap 2017 (Bob’s Guide), Rated: B

Where they were then: Trussle, the online mortgage trading company, is a rising star in the fintech industry. The start-up company provides solutions and answers to those looking to invest with a hassle-free process.

Where they are now: Following their funding round in early February to raise £4.5m ($5.68m) backed by Orange and Growth Capital, and existing investors LocalGlobe, Zoopla and Seedcamp, Trussle went on to join forces with Revolut in April to give users direct access to their mortgage brokering services.

Total equity funding: $7.38m (now $7.6m) +2.98%*

Where they were then: Iwoca was created to help make credit and loans of up to £100,000 available to small businesses.

Where they are now: 8 days after the time of writing the previous bio, Iwoca partnered with NatWest through Capital Connections to provide SMB loans, a significant collaboration for the six year-old startup.

Total equity funding: $58.5m (now $90m) +54%*

Where they are now: They currently boast a 6.6% annual return for investors and have earned £156m in interest for investors. They’ve lent £3 billion to UK businesses in a total of 43,251 loans (since 2010).

Total equity funding: $373.2m (now flat) –%*

Where they were then: Crowdcube is an investment crowdfunding platform that lets customers hand pick the businesses they want to back and invest in.

Where they are now: In the third quarter of 2017, Crowdcube registered £1m in company revenue, with 70 pitches.

Funds raised to date: $18.69m (now $28.3m) +51.42%*

Where they were then: Based in the heart of the UK capital, LendInvest is the UK’s leading online property lending and investing businesses.

Where they are now: In September, LendInvest announced the strategic partnership with Clever Lending, a specialist lending solution.

Total equity funding: $58.6m (now $393m) +570%*

China

Chinese Online Lender Dianrong Eyes 2018 IPO, Could Raise at Least $ 500 Million (WSJ), Rated: AAA

Dianrong.com, a Chinese online lending platform started and run by a co-founder of LendingClub Corp. , is planning an initial public offering as soon as next year that could raise at least $500 million, according to people familiar with the matter.

China Is Set to Implement a System of Ranking Its Citizens (Interesting Engineering), Rated: AAA

China is set to implement a social credit system that will rate each of its citizens on a publicly available scale. Officially known as the Social Credit Score or SCS, the system is likely to be implemented by 2020.

It works by giving each citizen a score based on their daily interactions and financial decisions, the score can be affected by debt, spending habits and even social interactions. Obviously, to get this kind of score that will be somewhat compared to a person’s trustworthiness, there will need to be a huge amount of individual monitoring and data collection. The SCS is expected to be rolled out in 2020, but there will be a large scale trial period from now until then so the system can be at optimal functionality when it goes live on its 1.3 billion citizens.

Micro-lender China Rapid Finance spots opportunity in new rules (Reuters), Rated: AAA

China Rapid Finance will make any adjustments needed to its business practices and the fees it charges in response to Bejing’s new requirements to clean up fast-growing online micro-lenders, its chief executive Zane Wang said on Monday.

Online micro-lenders have come under scrutiny as “problems such as over-lending, repeat borrowing, improper collection, abnormally high interest rates, and privacy violations have become prominent”, Chinese financial regulators said last week.

Banks’ robo-advisers are facing increasing scrutiny (China Daily), Rated: A

With financial institutions increasingly employing roboadvisers, China’s central bank and financial regulators issued draft regulations for comment recently, requiring financial institutions to receive regulatory approval for offering such services.

The regulatory authorities said financial institutions should create rational investment strategies and algorithm models, as well as remind investors of the flaws and risks associated with algorithm-based robo-advisory models.

WeiyangX Fintech Review (Crowdfund Insider), Rated: A

The project that Pinganfang.com was caught up in is a sharing working place project called Bar Works. Every work place was sold at $25,000 and the minimum purchase quota per investor was two each. The expected annual rate of return was between 12% to 15%.  On June 30th 2017, the SEC charged Renwick Haddow (the planner of Bar Works project) with multiple counts, including illegal fundraising $36 million from the Bar Works investors. 

On November 30th, JD Finance and China UnionPay co-launched a Blockchain-based risk information sharing mechanism.

On December 1st, Alibaba officially set up a poverty alleviation fund. As planned, the fund will invest 10-billion-yuan in the next five years to establish a comprehensive security system and help people fight against poverty. At the fund launch ceremony, Jack Ma, the executive chairman of Alibaba Group, told the media that Ant Financial would suspend plans for an initial public offering.

Change of pace ahead for fintech (China Daily), Rated: A

China has emerged as a leading fintech market globally, with analysts estimating the market size to have exceeded $243 billion by the end of last year, accounting for about 85 percent of the global market share.

The sector’s fast and furious growth was also illustrated by the surge of fintech investment in the country, which attracted capital of $8.8 billion between July 2015 to June 2016, equivalent to an increase of 252 percent since 2010, according to a report by Singaporean banking giant DBS Group and global accounting firm Ernst & Young.

International

Why Mobile Credit Can Be the Entry Ticket to Financial Inclusion (Let’s Talk Payments), Rated: AAA

Think for a moment of what your life would be like with no access to credit. Chances are you wouldn’t own a home or a car. Most of us could not have afforded our college education. The entrepreneurs among us would be hard-pressed to build successful businesses. And what about the ways we take advantage of credit cards – basically small-time loans that exist to allow us to pay for emergencies and unexpected expenses? Our financial identity is tied up in our access to these credit opportunities.

The good news, however, is that mobile devices – along with the existence of the cloud – are providing an entirely new landscape for the developing world. This landscape involves assigning a financial identity to those who have largely remained anonymous, reaching these populations through their smartphones. There are scores of creditworthy people on the planet, and we’ve proven before through data science that worthiness has little to do with income or wealth, but instead with the opportunity to demonstrate responsibility.

With this understanding in mind, we reviewed activity in the wake of recent hurricanes that rocked the Caribbean and observed a spike in prepaid mobile users topping up their phone allowances via on-demand credit extensions prior to hurricanes making landfall.

Source: Let’s Talk Payments

The following image shows the ratio of airtime credit extensions to cash top-ups as the eye of Hurricane Irma hit the Leeward Islands as well as Turks & Caicos.

Source: Let’s Talk Payments

As Irma made landfall, purchasing airtime from shops become extremely difficult, if not impossible. The graph above shows what happens when cash based-top ups are not possible.

For these reasons, creating a mobile financial identity in order to provide mobile credit remains the best place to start to address financial exclusion in many parts of the world and smartphones are the most logical vehicle for providing it. Nearly 80% of people all across the globe have prepaid phones, and there are nearly $1 trillion in transactions taking place every day.

Anger and confusion as crypto traders lose thousands in ‘flash crash’ on $ 54 billion exchange (Business Insider), Rated: A

A “flash crash” on the world’s biggest cryptocurrency exchange has left customers demanding answers and refunds, with many claiming to have lost thousands of dollars.

The price of cryptocurrencies NEO, OMG, and ETP crashed as much as 90% in minutes on the Bitfinex exchange on Wednesday before quickly bouncing back to former levels.

The price crash led Bitfinex, the world’s largest cryptocurrency exchange by daily volume, to close the positions of many traders who had placed leveraged bets on these digital currencies. Leveraged trading involves borrowing money to increase exposure.

Brett Kruger, a Bitfinex user affected by the “flash crash”, told Business Insider he is unhappy with Bitfinex because he claims the website was “lagging, unresponsive” at the time of the crash. He said he was also repeatedly logged out of the website, blaming recent DDoS attacks. Bitfinex announced last Sunday that it had been hit by a distributed denial of service (DDoS) attack, a malicious attack meant to bring down the service.

Etherecash Provides Lawyer-backed Platform to Secure Loans Against Your Own Cryptocurrency (Coinspeaker), Rated: B

EthereCash, is a three prong financial platform, wants to eliminate borders, intermediaries and prejudices, providing access to bank services for everybody. It makes all the tedious and lengthy bank operations simple, transparent and secure.

ID Finance strengthens board with ex-CEO of 4finance (ID Finance Email), Rated: A

ID Finance, the emerging markets fintech company, has strengthened its board with the appointment of Kieran Donnelly, ex-CEO of, 4finance, as a board advisor. The appointment will support ID Finance as it continues rapid expansion and further diversification of its business.

Kieran Donnelly served as CEO at 4finance, the European online and mobile consumer lending group for three years. He brings over 30 years of management experience to ID Finance having also held senior roles at Standard Bank Group, MDM Bank and Renaissance Group.

India

India’s Small Businesses Are Ready To Boom, Thanks To Fintech (Forbes), Rated: AAA

In 2017, India ranked second in the growth rate of fintech adoptionamong digitally active consumers across the globe; this surge was paralleled by the rise in fintech funding — receiving over $200 million in the first half of the year.

The financial services market in India is primarily untapped, with 40% of the population having no association with any bank, and more than 80% of the transactions carried out through cash.

Economic analysts predict that the next impetus for growth in the Indian economy will come from SMBs and startups.This is a great opportunity for the fintech industry, especially startups, to make it easier for SMBs, including kirana and mom-and-pop stores that are looking to gain access to capital and grow their business, by providing services where traditional banks and lenders have failed to reach, or have done so at a far higher cost. For example, Mumbai-based online loan platform, SMECorner.com, offers business loans to SMBs with virtually zero collateral.

Online lifestyle renting firm Rentickle.com raises $ 4 M in equity and debt (YourStory), Rated: A

Delhi-NCR-based lifestyle products rental portal Rentickle.com today announced it has raised $4 million in a fresh funding round. The fundraising is a combination of equity and debt.

The equity portion was led by Ajay Relan, Founder and Chairman, CX Partners, and ThinKuvate, a Singapore-based VC firm, with participation from existing investors. Delhi-based NBFC, DMI Finance Pvt Ltd, extended the company a debt line. Rentickle.com had raised $250,000 seed funding in early 2016.

P2P Easy Extends Services As The Fastest Growing Peer-to-Peer Money Lending Platform In India (Digital Journal), Rated: B

‘P2P Easy’ is a recently founded online platform that works hand in hand with borrowers and lenders for fast loan processing & acceptance.

Although the idea of loaning money dates back to the time when the first bank was established, the core issues are more or less the same to date – i.e. 90% borrowers are rejected, and lenders are skeptic due to a lack of any reasonably acceptable guarantee.

APAC

Culum Capital launches online platform for alternative investment (HedgeWeek), Rated: A

Culum Capital, a Singapore-based receivables and supply chain financing provider, has launched a new investor platform, which is aimed at accredited and institutional investors around the globe, and provides invoice financing to SMEs as an alternative to traditional financing sources.

The platform uses its proprietary credit scoring and on-going risk measurement to identify optimum investment opportunities and provide transparency. The transactions carry a short tenor of maximum 120 days, with the average transaction at 70 days. Annualised gross returns are between 10 and 25 per cent, with a strong SME diversification.

Fintech versus financial inclusion: What’s the difference? (DevEx), Rated: A

Mobile phones have introduced a sea of opportunities in every sector imaginable, and that includes in finance. Today, anyone with a cellphone can engage in one form or another of cashless transaction, be it paying bills, sending phone credit, transferring cash, or buying goods and services — even in flea markets.

But what makes this a game changer in the financial sector is how it has penetrated different levels of society. This applies particularly to the unbanked, who are unable to access formal financial institutions and often borrow money from informal lenders who may charge high interest rates and where there is no guarantee of consumer protection.

In recent years, new technologies have emerged that are being used to complement and further what mobile money has achieved: machine learning, peer-to-peer lending, biometric technology, cloud computing, and blockchain, among others.

A conscious effort to ensure all these innovations work for the unbanked

But just because it’s fintech doesn’t necessarily mean it covers financial inclusion.

In fact, a number of the technologies being adopted in the sector are largely aimed at consumer convenience instead of the unbanked.

Authors:

George Popescu
Allen Taylor

Thursday November 16 2017, Daily News Digest

securitization

News Comments Today’s main news: Marcus surpasses 2017 goal. LendInvest gets into buy-to-let. Top 3 spots on KPMG Fintech 100 list are all Chinese. Lendix launches SME bridge loans in France, Spain, and Italy. Mauritia issues draft P2P lending rules. Marlette closes fourth securitization in a year. Today’s main analysis: Rising challenges unlikely to deter U.S. securitizations. Today’s thought-provoking articles: […]

securitization

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

Africa

Canada

Russia

News Summary

United States

Marcus from Goldman Sachs Surpasses 2017 Goal (Bank Innovation), Rated: AAA

Martin Chavez, chief financial officer for Goldman Sachs, showed in a slideshow at a Bank of America Merrill Lynch event yesterday that Marcus had already surpassed $1.96 billion in originations as of Nov. 9.

What that means is that from Nov. 9 to Nov. 14, over a span of five days, Marcus originated more than $40 million in loans.

Rising challenges unlikely to deter U.S. securitization in 2018 (Asset Securitization Report), Rated: AAA

As a result, Fitch’s outlook for U.S. structured finance ratings is predominately stable for 2018. That said, given where we are in the credit cycle, Fitch is keeping a close watch on select asset types that could run into some issues over the next 12 months.

Entering 2018, Fitch has either Positive or Stable Outlook on over 90% of its rated securitized bonds.

Perhaps the most notable change that has manifested from risk retention is the shrinking universe of originators bringing new securitizations to market. This is particularly notable in the universe of CMBS originators, which has shrunk from a high of roughly 40 to now less than 20 due to a combination of risk retention and Reg A/B.

Competitive pressures, long in place for subprime autos, are escalating in a marketplace ABS environment that is struggling to find its footing by testing recent underwriting models, asset quality and, in some cases, business models. Delinquencies and chargeoffs of existing assets continue to increase as marginal borrowers increase their leverage. Not likely to help is the drive for growth among large marketplace lenders coupled with rising market pressure from competing banks like Goldman Sachs (Marcus), Discover, and Suntrust. And unless originators tighten their credit policies with discipline, the strain will intensify.

Source: Asset Securitization Report

Online lenders should heed criticism of their effect on borrowers (American Banker), Rated: AAA

The consumer lending industry is abuzz about the Federal Reserve Bank of Cleveland’s recent report on debt consolidation and online lending. This excellent piece of research concludes that, on average, online installment loan borrowers fall into more debt after taking out a loan, experience hits to their credit score and history as a result, and take out online loans despite having access to traditional banking and credit channels.

The first two conclusions are damning, especially as these loans are often marketed as a way to help consumers consolidate credit card debt and improve their finances. At the end of the day, a lender’s duty is not merely to avoid losses. Any loan must be suitable for the customer — which means it should be made only if the lender believes it is improving the customer’s financial health. A lender not guided by that principle should be prepared for severe criticism as well as elevated losses down the road.

But it would be nonsensical to discredit or ignore the study because it includes online lenders beyond well-known fintech names.

The Best of Both Worlds with Prosper for Borrowers and Lenders (DoughRoller), Rated: AAA

Founded in 2005, and generally recognized as the first peer-to-peer (P2P) lending platform in the US, Prosper has funded more than $10 billion in loans since.

While borrowers can get personal loans ranging in size between $2,000 and $35,000, investors can put as little as $25 toward funding those loans.

There is one exception, however. You cannot use loan proceeds for post-secondary educational expenses. That’s because some of the rules in federal law aren’t compatible with P2P lending. More specifically, with education loans, the borrower must have at least 30 days to accept or reject a loan offer.

Medical procedures available for financing under the PHL program include:

  • Cosmetic dentistry
  • Bariatric surgery
  • Cosmetic and plastic surgery
  • Fertility and reproductive procedures

All Prosper loans have a term of either three or five years.

The minimum requirements are:

  • A minimum FICO score of 640, based on a TransUnion FICO 08 score
  • Debt-to-Income (DTI) ratio below 50%
  • Stated income greater than $0 (you must have an income)
  • No bankruptcies filed within the previous 12 months
  • Fewer than seven credit bureau inquiries within the last six months
  • A minimum of three open trades reported on your credit report

Interest rates are between a minimum of 3.00% for the best AA rated borrowers to a maximum of 36.00% for the lowest rated HR borrower grades.

Source: DoughRoller

Prosper for Investors

Prosper advertises that the average rate of return by investors on the platform is 7.41% per year.

Loans rated HR have a much higher average return, at 11.73%.

You can open either a General Investment Account or an IRA. Available IRAs include traditional, Roth, SIMPLE, SEP and rollover IRAs (IRA accounts are held with Millennium Trust Company). At this time, Prosper has made only individual accounts available. You cannot hold an account jointly with someone else.

For regular investment accounts, the minimum is $25. For IRA accounts, the minimum is $5,000.

Similar to other P2P platforms, when you invest with Prosper, you don’t actually invest in whole loans. Instead, you invest in small slivers of those loans, referred to as “notes.” The notes are in denominations of $25. This means that you can spread an investment of $1,000 across as many as 40 different loans.

The servicing fee is 1% of the outstanding balance of a loan. That means that if the loan pays 8%, your net return will be 7%.

Source: DoughRoller

Marlette Funding Closes Fourth Personal Loan Securitization Within Past Year (LendEDU), Rated: A

Last week, marketplace lender Marlette Funding announced the closing of its fourth proprietary securitization. The transaction was worth an estimated $312 million, and it is the fourth securitization announcement since August of 2016 from Marlette Funding.

eOriginal Named as One of Fastest Growing Companies in North America on Deloitte’s 2017 Technology Fast 500 (eOriginal), Rated: A

eOriginal, Inc., today announced it has been named to Deloitte’s Technology Fast 500 list as one of North America’s fastest growing technology, media, telecommunications, life sciences, and energy companies. eOriginal earned the rank of 294 by more than doubling revenues during the evaluation period of FY 2013 through FY 2016.

Betterment, the investing startup with $ 11 billion in assets, is rolling out a new service to make charitable giving easier (Business Insider), Rated: A

Betterment, the New York-based roboadviser, announced Wednesday a charitable giving feature that’ll let users donate shares of their account to partnered charities.

The firm, which manages $11 billion for over 300,000 customers, partnered with 11 charities for Betterment Charitable Giving, including Big Brothers Big Sisters of NYC, UNICEF, and World Wildlife Fund, according to a news release. The new feature is set to go live November 28.

Subprime car loans souring faster at nonbank lenders (American Banker), Rated: A

Despite signs of trouble in subprime auto lending, U.S. banks and credit unions are well positioned to ride out any market turbulence, a new report from the Federal Reserve Bank of New York suggests.

More than $435 billion in auto loans to borrowers with credit scores below 660 were outstanding during the third quarter of this year, the report found. That total has been climbing steadily since bottoming out at $249 billion in early 2011. Delinquency rates have also been rising as it has become easier to qualify for an auto loan.

Fidelity latest financial firm to facilitate data sharing with fintechs (American Banker), Rated: A

Fidelity Investments is joining the ranks of financial firms sharing customer account data with others through an application programming interface.

The new service, called Fidelity Access, will give third parties access to Fidelity customers’ account data for use in apps and services like tax preparation, budgeting, financial planning, spending analysis and portfolio advice — provided the Fidelity customers give their OK. Customer data to be shared includes Fidelity account balances, securities holdings, and transactions.

These are the most valuable fintech companies in America (MarketWatch), Rated: A

Stripe Inc., whose software is used by businesses to accept and track digital payments, leads the way as the most valuable fintech startup in the U.S., with a $9.2 billion valuation.

And just to be clear, fintech startups are nowhere near close to catching up to the big banks. Wells Fargo & Co. has a market cap of more than $266 billion, and Bank of America Corp. has a market cap of more than $273 billion.

RealtyProfits Offers Accredited Investors an Innovative Platform to Invest in the Real Estate Sector (Digital Journal), Rated: A

RealtyProfits (www.RealtyProfits.com) announces today an exciting and innovative investment opportunity, RealtyProfits IV, with a Preferred Return of 12 percent per annum, available exclusively to accredited high net-worth individuals and institutional investors. The private preferred equity securities, available for purchase at www.RealtyProfits.com, are being offered through WealthForge Securities, LLC, a registered broker/dealer and member of FINRA/SIPC.

The geographically diversified portfolio includes properties in 700 cities coast to coast, with a current estimated value of $1.73 billion and more than $700 million of equity in more than 5,900 portfolio properties. The properties include primarily single-family homes and condominiums ranging in value from $100,000 to more than $2,500,000.

Accredited investors can start investing with as little as $20,000. RealtyProfits IV offers monthly cash distributions. Preferred equity investors receive all distributions made by RealtyProfits IV until fully repaid. The Preferred Return is 12 percent per annum, with initial monthly Base Preferred Return payments at 6 percent per annum anticipated depending on cash flow during each of the first 24 months.

Reality Shares Teams up with Nasdaq to Launch Blockchain Tech Index (BusinessWire), Rated: A

Reality Shares and Nasdaq announce the creation of the Reality Shares Nasdaq Blockchain Economy Index, a smart-beta index that tracks the growth and development of leading global companies creating and implementing blockchain solutions.

An ETF that will track the Index is already in the works, with Reality Shares filing for it on November 2, 2017.

Reality Shares and Nasdaq compiled the index by utilizing internal and external research and their proprietary Blockchain ScoreTM ranking system. The Index is comprised of global companies that seek to capitalize upon transformational blockchain technology that may potentially disrupt the markets in which they operate.

How to Choose Between a Peer-To-Peer Lending or Traditional Loan (Experian), Rated: A

Shopping for a loan at a P2P provider is a two-step process. First, based on a credit score (or credit scores) and your answers to a few basic questions—your full name, address, date of birth and annual income—the lender determines which loan offer(s) to extend to you. (It’s possible at this juncture that the lender will decide not to extend any loan offers; if they do, they’ll explain why.)

Once you choose the loan you want, the lender does a more detailed credit check and may ask you to verify your income and to provide additional background information.  Each P2P site has its own lending criteria, including minimum credit scores, and additional information requirements vary accordingly. Some P2P lenders want information on your educational background; others want work history or details about your financial assets. In most cases, you can submit the necessary documents electronically.

The first step in the P2P loan-approval process gets one or more of your credit scores by a method known as a soft inquiry—the same process you use when you check your own credit scores. Soft inquiries have no impact on your credit scores. However, the hard inquiries traditional lenders make when you apply for a credit cards or bank loans are reported to the national credit bureaus. They appear on your credit reports, and typically cause temporary credit-score drops of several points.

In the second step of P2P loan approval, the lender performs a hard inquiry to confirm your credit score and, likely, to review your full credit report.

Before you apply for a P2P loan

  • Take a look at the fine print on the bottom of each provider’s homepage, to get an overview of the loan amounts they offer and the rates and fees they charge.
  • Make sure the lender operates in your state.
  • Check your FICO Score and review your credit reports for any major negative entries. Accounts in collection, liens and civil judgments are among the items that could torpedo your loan application, even if you meet the credit-score requirements.
  • Determine the amount of money you need and watch out for tempting upsells.
  • Consider using the Experian loan-referral tool to explore offers from multiple P2P lenders (and possibly traditional lenders as well).

Resignation of CFPB head gives Trump opportunity to erase Elizabeth Warren’s legacy (Legal Insurrection), Rated: A

Richard Cordray, an Obama appointee and head of the Consumer Financial Protection Bureau (CFPB) announced to staff in an email Wednesday his plans to resign. While he’s yet to confirm his plans, there’s speculation Cordray will return home to run for Ohio’s governorship.

Seven Signs That the Bond Bull Market is Over (INTL FCStone), Rated: A

  • The bond bear market is already here: short and medium-term treasuries have lost value in the past 5 years
  • Buybacks have fallen to a five-year low, and big repurchasers have underperformed
  • Oil prices are at a 30-month high, and the futures curve is in backwardation
  • The long and the short ends of the yield curve are moving together again
  • The Chinese trade surplus has shrunk from 10% of GDP to almost zero in the past ten years
  • The U.S. deficit is growing again, an unprecedented phenomenon in times of expansion and peace
  • Small bubbles are popping out: Auckland houses, Ethereum crypto coins, and collectible cars
Source: Global Macro Report, INTL FCStone

Read the full report here.

Spring Framework Creator Launches Atomist for Development Automation With $ 22 Million in Series A Funding (Marketwired), Rated: A

Today on stage at Structure 2017, Atomist is formally launching and unveiling its Development Automation Platform with an Open Source client and API. As part of today’s launch, Atomist is announcing $22 million in Series A funding from Accel and Matrix Partners.

Bestow Gives Texas Residents First Access to On-Demand Life Insurance (PRWeb), Rated: A

Bestow Inc., the company behind a revolutionary new approach to life insurance, today announced the early access roll out of its comprehensive, full-stack, digital life insurance solution in Texas. For the first time Bestow’s solution is available to the public, giving Texas residents primary access to apply for the only on-demand life insurance solution, instantly and without a medical exam.

Leveraging applied intelligence and algorithmic underwriting, Bestow redefines the way consumers research, buy and manage life insurance. Using data to calculate risk, Bestow removes the need for a medical exam and streamlines the entire process into a matter of minutes. The Texas launch gives consumers access to choice term life insurance plans, including a unique two year term policy never before available for life insurance. Additionally, customers can choose between ten or twenty year term life insurance.

The Zebra Raises $ 40 Million, Taps New CEO To Expand Beyond Car Insurance (Forbes), Rated: A

The Zebra, which has always described itself as the Kayak of car insurance, has hired a longtime Kayak executive as its new CEO.

The Austin-based company, which allows drivers to compare prices for car insurance online, said on Tuesday that it has tapped Kayak’s former president Keith Melnick to run the company.

The Zebra also said it has raised $40 million in a Series B funding round, led by Accel Partners. That brings its total funding to $61.5 million.

MarketScout in Dallas Creates $ 25M Insurtech Venture Fund (Insurance Journal), Rated: B

Dallas-based insurance exchange and MGA MarketScout announced it has launched MarketScout InsurTech (MIT), which will make investments in tech-enabled insurance distribution. The initial funding of $25 million will come exclusively from MarketScout Corp., parent of MIT, according to the firm.

House Financial Services Committee Approves Legislation to Help Keep Lending Partnerships Between Banks and Online Lenders (Crowdfund Insider), Rated: A

The House Financial Services Committee has approved HR 3299 or the “Protecting Consumers’ Access to Credit Act of 2017.” The bill “restores consistency” in lending laws across state boundaries. HR 3299 impacts the case of Midland Funding, LLC v. Madden – an ongoing law suit that has the potential to undermine online lenders. Sponsored by Congressman Patrick McHenry, includes an important statement that clarifies allowable interest rates on loans potentially ending the issue associated with the law suit.

How Do You Beat a Robo-Advisor? Trust (Think Advisor), Rated: A

“Technology by itself cannot create trust,” Robert C. Merton, a Nobel laureate in economics now teaching at MIT, recently told ThinkAdvisor. “The successful advisor must have the trust of their clients.”

Given the importance of trust in the advisor-client relationship, Merton recommends financial advisors (the breathing kind) should:

  • Check what they are doing to retain and enhance trust with their clients.
  • Make sure the business model being used supports the creation of trust.
  • Take advantage of technology to improve/enhance what the advisor does.
  • Do not view technology as a “competitor or substitute” for the advisor.
  • Understand and assess the financial technology they employ to certify trusting its use in client solutions.

HFLA launches initiative to help underserved reach financial stability (Cleveland Jewish News), Rated: A

The Hebrew Free Loan Association has launched its Looking to the Future Initiative with support from the St. Luke’s Foundation and the PNC Foundation. The initiative accounts for $73,000.

The initiative enables HFLA to increase its lending of interest-free loans to Cleveland’s underserved neighborhoods and grows the organization by expanding its reach, according to a news release. HFLA received a $63,000 grant from the St. Luke’s Foundation and a $10,000 grant from the PNC Foundation to launch the effort.

Fundation Purchases Select Assets from Able Lending to Enhance Partnership Strategy (BusinessWire), Rated: B

Fundation Group LLC, a digitally-enabled lender and credit solutions provider, today announced that it has acquired a variety of assets from online small business lender, Able Lending of Austin, Texas.

Former Capital One Executive Troy Jamison Joins Victory Park Capital as Chief Risk Officer (BusinessWire), Rated: B

Victory Park Capital (VPC), an investment firm focused on middle-market debt and equity investments, announced today that Troy Jamison joins as chief risk officer for the firm’s nonbank financial services portfolio. Jamison is based in Chicago and reports directly to CEO and Co-Founder Richard Levy.

CFPB updates website to officially address end of arbitration rule (Housingwire), Rated: B

The Consumer Financial Protection Bureau finally updated its website to acknowledge President Donald Trump revoking the controversial arbitration rule.

blog post from Ballard Spahr previously stressed the importance of the CFPB updating its website to note the rule’s override since the rule was killed nearly two weeks ago.

The webpage for “Arbitration agreements” now has an update on the top that states:

On Nov. 1, 2017, the President signed a joint resolution passed by Congress disapproving the Arbitration Agreements Rule under the Congressional Review Act (CRA). Pursuant to the joint resolution, the Arbitration Agreements Rule has no force or effect. The materials relating to the Arbitration Agreements Rule on the Bureau’s website are for reference only.

HOUSE FINANCIAL SERVICES COMMITTEE PASSES SMALL BUSINESS CREDIT ACT (Coalition for Small Business Growth Email), Rated: B

The 

United Kingdom

LendInvest launches into buy-to-let (Mortgage Strategy), Rated: AAA

LendInvest is launching a range of buy-to-let loans aimed at professional landlords and investors.

Rates start at 3.69 per cent for a two-year fix at 60 per cent LTV.

The firm will offer loans of between £50,000 and £5m, up to a maximum LTV of 80 per cent.

Citigroup joins the AI bandwagon (Business Insider), Rated: A

Citigroup 

Source: Business Insider

SyndicateRoom Alum Squirrel Launches Crowdcube Funding Round (Crowdfund Insider), Rated: A

Squirrel, a personal finance app designed to help users have more control over their money, has launched an equity crowdfunding round on Crowdcube. This initiative debut comes less than one year after the company completed its SyndicateRoom funding round with £585,000 in funds. Squrriel is now seeking £400,000.

Government unveils financial package to support tech (P2P Finance News), Rated: A

THE GOVERNMENT has given a £21m boost to a technology programme that has supported firms such as Zopa and Funding Circle as part of a range of measures to boost the tech sector.

The funding will make Tech City UK and Tech North one national organisation called Tech Nation and help grow government-backed startup support programmes such as Founders Network, Northern Stars, Future Fifty and Upscale.

Cash Converters International Ltd reports security breach and ransom demand (The Motley Fool), Rated: A

Payday lending and pawnbroking business Cash Converters International Ltd (ASX:CCV) announced a cybersecurity breach in its UK operations last night.

Sadly, computer system integrity is becoming an increasingly relevant – and often overlooked – concern for investors, with a vast majority of companies relying in one way or another on computer systems.

Valorem Foundation Launches All-New Cryptocurrency Platform (PR Newswire), Rated: A

Valorem Foundation, a Blockchain startup specializing in stabilized value-based exchange and transactions, has announced the launch of its new cryptocurrency platform. The company has developed a multi-layered platform to disrupt and expand the following services globally: microloans, car loans, student loans, rent payment, P2P networks, buying and selling of goods & services, business investing, real estate crowdfunding, and insurance.

Empowering the world: How you can make money through improving lives (City A.M.), Rated: A

This sea change should explain why investment firm Ethex has managed to scoop up so much support in its short history – raising more than £50m since 2013.

Its business model has a peer-to-peer lending feel – that is, it uses a digital platform to allow retail investors to lend to individuals and entrepreneurs.

But it comes with a twist, because Ethex is a not-for-profit organisation which lets you invest in companies that have a positive impact – socially and environmentally.

If you want to get involved, the platform has a minimum investment of £50, which arguably makes it more accessible to younger generations.

Trussle hires VP engineering from Funding Circle (Mortgage Introducer), Rated: B

Trussle has appointed Matthew Gretton as vice president of engineering from peer-to-peer lending platform Funding Circle.

China

Alibaba affiliates sweep top 3 spots in global fintech ranking (Asian Review), Rated: AAA

Financial technology companies linked to China’s Alibaba Group Holding took over the podium in KPMG’s latest Fintech 100 list, announced on Wednesday.

Ant Financial, which runs Alibaba’s massive Alipay e-payments network, took the No. 1 spot on the list, which was compiled with fintech accelerator H2 Ventures. Online property insurer ZhongAn Insurance and microloan provider Qudian placed second and third; both have received investments from Ant.

See the full list here.

One of China’s hottest companies rebuffs criticism about transparency (CNBC), Rated: A

Despite public criticism about a lack of transparency in some practices, Ant Financial is doing things the right way, a senior executive at the company said Wednesday.

“The demand for these securities is very healthy and continuing to expand,” Douglas Feagin, senior vice president and head of global business at Ant Financial, told CNBC’s “Street Signs.” “That, at the end of the day, is the ultimate barometer of whether you’re giving enough information to investors to invest.”

Ant Financial will use local partners in Southeast Asia: executive from CNBC.

Earnings at Some U.S.-Listed Chinese Microlenders Taper (Caixin), Rated: A

In the three months ending Sept. 30, Yirendai’s net income was down 12% to 303 million yuan ($45.7 million) from 344.3 million yuan a year ago, the company said Wednesday. Another Chinese microlender, China Rapid Finance Ltd., earlier reported a wider net loss of $4.4 million in the third quarter. Although Qudian Inc., a larger player that listed in New York last month, recently posted a four-fold increase in its third-quarter net profit from a year ago, citing better operational efficiency and its growing borrower base.

Cinda International Leads Massive Round In Chinese Fintech Company 9f Group (China Money Network), Rated: A

Beijing-based fintech company 9f Group has raised a massive new funding round from Cinda International Holding Ltd, a subsidiary of state-owned China Cinda Asset Management Co., Ltd., Focus Media Information Technology’s Chairman Jiang Nanchun, video game developer Youzu Interactive’s chairman Lin Qi and an unnamed Chinese industry fund.

The company did not disclose financial details except to say that it raised “hundreds of millions of U.S. dollars” in the latest financing deal, according to a company announcement. It is also unclear how the company is valued in the round, but 9f Group is listed on China Money Network’s China Unicorn List with a US$1 billion valuation when it last raised a US$110 million series B round in 2015.

European Union

For Spain’s banks, survival means digital (Financial Times), Rated: AAA

Santander’s Openbank has changed a great deal since it was founded as Spain’s first telephone banking service in 1995. Now a fully digital operation, its mobile app allows users to temporarily disarm a lost credit card, as well as to check whether fellow Openbank customers are buying or selling a given stock at any moment. Currently, it has some 1.2m customers in Spain and more than €8bn ($9.3bn) in assets under management.

In recent years, Spain’s two biggest banks — Santander and BBVA — have increased their financial and managerial investment in fintech, digital banking and big data. Like their peers, they are convinced that the days of branch-based lending are drawing to a close.

Spanish banks average about €15m assets under management per employee, says Daragh Quinn, banks analyst at investment bank Keefe, Bruyette & Woods. At a digital operator like Openbank, that number is close to €60m.

The digital push is on two fronts: first, a mobile app that allows customers to access almost all of the bank’s products without going into a branch. Second, a venture capital approach whereby banks invest in or partner with fintech start-ups to add products.

Online Lender Lendix Launches Flexible SME Bridge Loans in France, Spain & Italy (Crowdfund Insider), Rated: AAA

Lendix, online lender for SMEs in continental Europe, has announced the launch of a new financing product: the Flexible Bridge Loan. This product is designed to will allow a greater number of French, Spanish and Italian SMEs to benefit from the speed of execution of Lendix’s lending platform while leaving them the possibility of setting up an overall refinancing solution with other financial institutions.

The Lendix Flexible Bridge Loan is a 5-year amortizable loan with a standard commitment for the first 9 months and the possibility of early repayment at no cost for the remainder of the loan term, even in the event of refinancing by other financial institutions.

Swedish $ 370 Billion Home-Loan Market Gets New Mortgage Fund (Bloomberg Quint), Rated: A

As investors wonder whether Sweden’s housing market is headed for a correction, the country’s first mortgage fund is about to enter the $370 billion Swedish home-loan industry.

Stabelo plans to pool capital from Swedish institutional investors in exchange for fixed-income securities. That money will then be lent to home buyers. The fund starts offering its products this week and will work with Avanza Bank AB, Sweden’s largest online lender. Avanza, which owns just below 20 percent of Stabelo, will handle distribution and marketing.

International

Has P2P marketplace lending become B2P? (Cuffelinks), Rated: AAA

Due to this issue, the original incarnation of peer-to-peer lending has not lasted. As the CEO of Zopa, a UK-based P2P lender said,

“As bad debts soared, the approach was abandoned and Zopa was moulded into a ‘big sausage machine’. Its technology now links lenders with a pool of borrowers without any direct contact or the need for investors to make credit decisions.”

Australia’s major peer-to-peer lender is SocietyOne. It currently has $350 million borrowed through its platform, and is growing rapidly. In fact, loan volumes in the first three quarters of this year have totalled $141 million so far, surpassing the $139 million in loans facilitated over the entire course of 2016, as shown below.

Source: Cuffelinks
Australia/New Zealand

Exemption for personalised digital (robo) advice (Scoop), Rated: A

Following the FMA’s release of its second consultation paper on personalised robo-advice (now called digital advice), the leading law firm has published its tips for providers looking to develop digital advice platforms.

Head of Russell McVeagh’s Corporate Advisory group, Dan Jones, says the exemption is a necessary first step in putting the New Zealand financial advice regime on equal footing with overseas regimes, and may provide particular assistance to New Zealanders in KiwiSaver.

India

How P2P lending can be a route to creating financial inclusion (Daily News & Analysis), Rated: A

For years, banks have had a monopoly in lending money to businesses and individuals. However, the 2007-08 financial crisis created a havoc, rapidly-expanding the funding gap. This led to the advent of a niche fintech vertical, peer-to-peer (P2P) lending.

The geographical reach of a P2P lending platform is far superior, with the major differentiator being its online interface. Such digital financial services play an important role in supporting the objective of financial inclusion. Anybody, from the remotest areas, having access to internet, can be eligible to get/give a loan.

In the age of digitisation where almost everyone has access to internet, such platforms have the potential to change the financial graph of a country.

Are P2P platforms safe for lending and borrowing? (India Times), Rated: B

While banks and non-banking finance companies (NBFC) are the readily available sources for loans, who does the P2P platform cater to? “Unfortunately, banks in India follow mediocre credit assessment policies which are suited only for borrowers who can offer collateral or have an impeccable credit history. In practice, majority of the borrowers lie in between these extremes. Therefore, majority of Indians can borrow on P2P platforms,” says Raghavendra Pratap Singh, co-founder, i2ifunding, an online P2P lending marketplace.

RBI has put a cap on the amount that can be borrowed and lent. The aggregate exposure of a lender or the maximum that one may borrow at any point of time, across all P2Ps, shall be capped at Rs 10 lakh. Even the exposure of a single lender to the same borrower, across all P2Ps, shall not exceed Rs 50,000 and the maturity of the loans shall not exceed 36 months. “More clarity from RBI is expected on how the regulator intends to monitor the compliance of this aspect and how it will fix the responsibility,” says Singh.

Risks for a lender
Since this is an unsecured loan where there is no face-to-face interaction, a P2P lender needs to be aware of the risks involved. Bubna says, “All investments involve risk. However, in comparison to equity or commodity market investments or real estate, P2P lending has lower risk as it is addressed by on-boarding high quality borrowers. Further, lenders are suggested to create a diversified portfolio of loans.”

Asia

Introducing ACE, Crowdo’s New Artificial Intelligence Due Diligence System (Crowdfund Insider), Rated: A

Crowdo, a South East Asian online marketplace for P2P lending and crowdfunding unveiled today its proprietary Artificial Intelligence driven due diligence system, Crowdo ACE, aimed at benefiting both their borrowers and investors. Crowdo ACE takes into account a few thousand unconventional and alternative attributes and represents a new way to perform due diligence versus traditional means used by conventional financial institutions. It has already been applied to process more than 3,000 loans.

In a largely-unbanked Indonesia, Amartha uplifts women micro-entrepreneurs (YourStory), Rated: A

Twenty-six people, four nationalities, 10 days. Travelling across Southeast Asia as a Startup AsiaBerlin Roadshow delegate to explore startup ecosystems was an experience unto itself.

Amartha has so far disbursed over $13 million to 60,000 women micro-entrepreneurs and aims to improve their income, and ultimately quality of life.

Aria: Amartha is an Indonesian financial technology startup that focuses on providing affordable financial access, and mentorship to the unbanked population living below the poverty line. Amartha operates much like a peer-to-peer lending platform, and so far, has disbursed more than $13 million to 60,000 borrowers. The borrowers are mostly women micro-entrepreneurs and Amartha aims to improve their income, and ultimately alleviate their status through financial inclusion.

Aria: When we started operations in April 2016, we disbursed $40,000 a month. By the end of 2016, we were disbursing $800,000. Today, on average, we disburse $2.5 million per month. So far, we have disbursed more than $13 million, across more than 60,000 borrowers. The average ticket size of a loan now is around $300.

We charge a fee based on the profit sharing principle. Of the 22-30 percent annual interest rate paid by borrowers, we collect 11-13 percent for our revenue.

Africa

The Mauritian Financial Services Commission Issues Draft Peer-To-Peer lending Rules (Mondaq), Rated: AAA

Following the announcement of the Government on peer-to-peer lending and funding in the 2017-2018 Budget, the Mauritian Financial Services Commission (“Commission”) has issued draft rules on 10 November 2017 to regulate the peer-to-peer lending sector – as sector which has grown rapidly in other countries.

In the region, Kenya and Africa are leading in the peer-to-peer business lending market. According to a study conducted by the University of Cambridge, within Africa, South Africa had the largest number online alternative finance platforms, with $15 million raised in 2015 (The Africa and Middle East Alternative Finance Benchmarking Report, February, 2017).

Borrower and lender – a borrower must be a resident in Mauritius; however, there is no residency requirement for the lender.

Restrictions on amounts  Hence, a lender, who is a legal person, cannot lend more than MUR 500,000 (approx. GBP 11,000) in any 12 months’ period. A lender, who is a natural person, cannot lend an amount in excess of 10 per cent of his income or a maximum of MUR 300,000 (approx. GBP 6,600), whichever is lower, in any 12 months’ period.

Obligations of a P2P operator – the Peer-to-Peer operator must publish the following information on its website:

  • details of how the P2P lending will operate
  • measures to prevent money laundering and combatting terrorist financing
  • security measures to ensure data protection
  • dispute resolution mechanism.
Canada

Borrowell wins Deloitte Fast50 award (Borrowell Email), Rated: A

Borrowell has won a Companies to Watch award as part of the Deloitte Fast50 program. We are one of only eleven companies across Canada to win that award this year, and the only company from Toronto. Fast50 winners in the category for established companies include well-known names like Shopify, SkipTheDishes, Wave and Influitive. The list was announced an hour ago. 

Russia

Moscow Is On Its Way To Becoming A Smart City And Fintech Powerhouse (Forbes), Rated: A

Its citizens and businesses are also quick to adopt the latest disruptive technologies such as fintech and cryptocurrencies. Moscow has a 35 percent fintech adoption rate, higher than New York’s 33.1 percent.

Authors:

George Popescu
Allen Taylor